Tate & Lyle Plc · LSE:TATE
Tate & Lyle — Investor Day (February 2023)
99 slides from Tate & Lyle's investor day presentation, Feb 8, 2023
Slide 1: Capital Markets Event 2023
Slide 2: Science Solutions Society (video)
TATE (YW LYLE Science \ Solutions \ Society Video
Slide 3: Producing more food in 40 years than in 8,000
To meet increasing demand from a growing global population, we will need to produce more food in the next 40 years than has been produced in the previous 8,000 years. 3 Source: Jason Clay, SVP, Market Transformation, WFF, 2050 Criteria Report and in Business Council for International Understanding,
Slide 4: Science Solutions Society
SCIENCE SOLUTIONS SOCIETY 44 External use permitted
Slide 5: Our purpose
Science\ Solutions \Society Our purpose Transforming Lives through the Science of Food
Slide 6: Global leader in sweetening, mouthfeel and fortification
Global leader in sweetening, mouthfeel and fortification 6
Slide 7: Transformation accelerated
New Tate & Lyle Step up in customer collaboration >US$200m invested over four years Four strategic acquisitions Commitment by 2050 Sales and applications US$150m benefits over four years Primient sale Transformation accelerated 7
Slide 8: New Tate & Lyle
New Tate & Lyle % of revenue1 % of revenue1 Speciality ingredients2 Asia, Middle East, Africa and Latin America 8 1. Financial years ended 31 March; 2. Includes Food & Beverage Solutions and Sucralose
Slide 9: Consumer trends and capabilities
New Tate & Lyle People living longer Healthy Population growing Tasty Capabilities Convenient Climate change Sustainable On demand society Affordable 9
Slide 10: Leading market positions
New Tate & Lyle Leading Large and Portfolio aligned Leading scientific Strong market attractive to structural and solutions customer positions markets consumer trends capabilities relationships 10
Slide 11: New Tate & Lyle platforms
New Tate & Lyle Sugar and calorie reduction Texture and stability Fibre fortification 11 Mouthfeel defined as starches, gums and stabilisers (texturants)
Slide 12: Four core categories of US$19bn addressable market
New Tate & Lyle Tate & Lyle’s four core categories represent of US$19bn addressable market1 Market addressable by Beverage Dairy Tate & Lyle’s three platforms ~6%1 CAGR CAGR Soups, Sauces Bakery and Dressings and Snacks Other 30% in categories such as confectionery and infant nutrition where Tate &
Slide 13: Health and wellbeing trends
New Tate & Lyle expected Consumers are to be obese concerned about by 20251 health and wellbeing2 of food and drink launches of food and drink globally in 2022 had no, low or launches globally in reduced sugar/calorie claims3 2022 were plant-based4 13 1. World Obesity Federation 2. Global Data Consu
Slide 14: Healthy Sweetening, Mouthfeel, Fortification
New Tate & Lyle ▪ Sugar and calorie reduction Healthy ▪ Nutrition improvement ▪ Label improvement Sweetening ▪ Cost optimisation Tasty ▪ Enhance texture and mouthfeel experience Convenient ▪ Clean label Mouthfeel Mouthfeel ▪ Stability ▪ Cost optimisation Sustainable ▪ Increase nutrition from fibres
Slide 15: Science capabilities
New Tate & Lyle ▪ Sugar and calorie reduction ▪ Nutrition improvement Fermentation Enzymology ▪ Label improvement ▪ Cost optimisation Bio-chemistry ▪ Enhance texture and mouthfeel Separation Crystallisation experience ▪ Clean-label ▪ Stability Materials ▪ Cost optimisation Fractionation Drying Scien
Slide 16: Revenue growth with customers
New Tate & Lyle Two thirds of our top We’ve grown revenue 30 customers were more than 3x with over top 30 customers 100 customers in the 5 years ago last 5 years 16
Slide 17: Leading speciality food and beverage solutions business
New Tate & Lyle A leading and differentiated speciality food and beverage solutions business Sweetening Mouthfeel Fortification Soups, Sauces Bakery Beverage Dairy and Dressings and Snacks 17
Slide 18: Growth strategy
New Tate & Lyle ▪ Increase investment in R&D ▪ Build on existing strong platforms ▪ Expand open innovation ▪ Expand into new platforms ▪ Leverage scientific knowledge ▪ Deliver value enhancing M&A ▪ Grow above market in ▪ Build category insight developed markets ▪ Strengthen customer intimacy ▪ Acce
Slide 19: Revenue, EBITDA and New Products 2018-2022
New Tate & Lyle 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Revenue1 EBITDA1 New Products2 19 1. Financial years ended 31 March, excludes Sucralose; 2. See Appendix for definition of New Products
Slide 20: At a glance
At a glance 2 Employees1 Revenue2 Innovation and Customer EBITDA2 Collaboration centres1 North America Countries where we serve customers2 Net debt to EBITDA1 Europe Asia, Middle East, Africa and Latin America 20 1. At 30 September 2022; 2. Year ended 31 March 2022 (Regional revenue is Food & Bevera
Slide 21: Revenue and EBITDA by business
New Tate & Lyle Revenue1 EBITDA1 Food & Beverage Solutions Sucralose Primary Products Europe 21 1. Proportion of Group in year ended 31 March 2022
Slide 22: Potential for further growth acceleration
New Tate & Lyle Revenue EBITDA Return on capital employed Productivity growth per annum growth per annum increase per annum on average benefits Potential for further growth acceleration through 22
Slide 23: Purpose & performance
Purpose & performance 23
Slide 24: Purpose
Purpose tonnes of sugar removed Meals provided to of waste is beneficially from diets by our no-/low-calorie food banks and other used, mostly as nutrients sweeteners and fibres1 charitable partners1 for local farms2 24 1. From 1 April 2020 to 30 September 2022; 2. Year ended 31 December 2021
Slide 25: Carbon, water, waste and agriculture targets
Purpose Carbon emissions Water Waste Agriculture Scope 1 and 2 Scope 3 15% 100% Support sustainable corn acres 2030 Target 30% reduction 15% reduction intensity reduction beneficial use equivalent to annual purchase Progress 2020-211 Carbon emissions, water and waste targets linked to LTIP (15%) 25
Slide 26: New CLARIA process
Purpose reduction in carbon footprint1 ▪ Developed new process for producing CLARIA® ▪ Innovative and more environmentally friendly ▪ Same functionality as existing CLARIA® reduction in water consumption1 26 1. Compared to current CLARIA® forms
Slide 27: Committed to net zero by 2050
27, AN We are committed to reaching net zero by 2050, and to help protect our planet’s natural resources for the benefit of future generations. TATE QYLYLE
Slide 28: Diversity and inclusion
Purpose Women in Targets to measure New behaviours leadership and progress on equity, to drive ambition management roles1 diversity and inclusion of new Tate & Lyle 28 1. At 30 September 2022, 42% of approximately 500 positions
Slide 29: Reshaped management team
New Tate & Lyle Reshaped management team Purpose-led Extensive industry experience Deep customer knowledge Committed to delivery rate GY LYLE
Slide 30: Summary
Summary ▪ Re-positioned for growth ▪ At the centre of the future of food ▪ Solutions for healthier, tastier food and drink ▪ Financial strength to invest for growth 30
Slide 31: Agenda
Overview / Markets / Innovation / Financial Investment case BREAK Q&A New Tate & Lyle Portfolio Customer framework / Summary Solutions 31
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Slide 33: Food & Beverage Solutions, Sucralose, Primary Products Europe
New Tate & Lyle Food & Beverage Solutions Revenue1 CAGR 2018-222 Sucralose EBITDA1 CAGR 2018-222 Primary Products Europe 33 1. Year ended 31 March 2022 continuing operation; 2. Continuing operations
Slide 34: Well-balanced business
New Tate & Lyle Region Platform Category North America Dairy Sweetening Beverage Europe Mouthfeel Soups, Sauces and Dressings Asia, Middle East, Africa and Latin America Fortfification Bakery & Snacks Other (including distribution) Well-balanced business 34 )
Slide 35: Growth in Food & Beverage Solutions
Growth Large and attractive addressable markets Food & Beverage Portfolio aligned to structural consumer trends Solutions expected to grow revenue Significant growth opportunity across all platforms high single digit Increasing presence in large and fast-growing markets percent each year, ahead of m
Slide 36: Addressable market
Addressable market High intensity sweeteners Nutritive sweeteners Market addressable by Tate & Lyle’s three platforms Rare sugars and other sweeteners Starches and gums Fibres Plant proteins 36 1. Market research data, Tate & Lyle and BCG analysis, estimated value growth 2022-26
Slide 37: Addressable speciality ingredient market by category
Addressable market Tate & Lyle Soups, Sauces Bakery Beverage Dairy core category and Dressings and Snacks Addressable Speciality Ingredient Market1 Estimated Growth 2022-26 CAGR1,2 37 1. Market research data, Tate & Lyle and BCG analysis; US dollars; 2. Value growth
Slide 38: Consumer trends
Consumer trends ▪ Most in developing world ▪ Staying healthier longer ▪ Climate emergency ▪ Fast adoption of technology ▪ Expanding middle class ▪ Impact of obesity/diabetes ▪ Impact on crops ▪ Desire for convenience 38
Slide 39: Consumer trends
Consumer trends Empowerment and choice Food as basis for good health Food for memorable experiences Busy lifestyles and cost of living ▪ Sustainability ▪ Sugar and calorie reduction ▪ New sensory experiences ▪ Cost and quality ▪ Product claims ▪ Gut health and added fibre ▪ Affordable treats ▪ Added
Slide 40: Consumer trends: sweetening, mouthfeel, fortification
Consumer trends ▪ Sugar and calorie reduction ▪ Nutrition improvement Healthy ▪ Label improvement Sweetening ▪ Cost optimisation Tasty ▪ Enhance texture and mouthfeel experience Convenient ▪ Clean label Mouthfeel Mouthfeel ▪ Stability ▪ Cost optimisation Sustainable ▪ Increase nutrition from fibres
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Slide 42: Sweetening portfolio
Portfolio ▪ #1 sweetening provider globally ▪ US$5.2 billion addressable market1 ▪ Market growing at ~6% CAGR1,2 New product launches Consumers more conscious in last 2 years included of low-sugar products sugar reduction claim3 because of pandemic4 42 1. Speciality ingredient market; Market researc
Slide 43: Sweetening platforms
Platforms Non-Sugar 20% Sugar 80% 43 1. Euromonitor International 2022; 2. Speciality ingredient market; Market research data, Tate & Lyle and BCG analysis
Slide 44: Sweetening platforms
Platforms Non-nutritive Low-calorie Functional sugar Low-calorie Nutritive sweeteners rare sugar replacement sugar alcohol sweetener of sugar of sugar of sugar of sugar of sugar of sugar of sugar Reduce sugar Taste Nutrition Cost Label Key attributes and calories experience improvement optimisation
Slide 45: Sweetening platforms: before and after
Platforms Before After Key Benefits reduction in reduction in carbohydrates calories reduction in total sugars Ingredients Sugar, Enriched Bleached Wheat Flour (Wheat Ingredients: Erythritol, Almond Flour, Coconut Flour, Niacin, Reduced Iron, Thiamine Mononitrate, Riboflavin, Flour, Allulose, Chicor
Slide 46: Sucralose
Platforms ▪ Key sugar reduction ingredient in sweetener solutions toolbox ▪ Market demand continues to grow Market growth in new product launches including sucralose ▪ Significant value of our product for customers: (2018-22)1 / Supply chain security / Clinical and regulatory support / US manufactur
Slide 47: Mouthfeel platforms
Platforms ▪ #2 texturants globally ▪ US$7 billion addressable market1 ▪ Market growing at ~6% CAGR1,2 Claims on new product Consumers make their launches in last 2 years choice made on taste3 are clean label4 47 1. Speciality ingredient market; Market research data, Tate & Lyle and BCG analysis; 2.
Slide 48: Starches and gums
Platforms Over starches and gums providing a range of speciality functional benefits including: Gelling, Thickening, Emulsifying, Film Forming, Bulking Some ingredient examples Enhance texture and Cost Key attributes Clean label Stability mouthfeel experience optimisation 48 Note: Labelling, claims
Slide 49: Partnering with Oatly
Platforms Partnering with plant-based pioneer Oatly to develop a solution for its dairy-free alternative to whipping cream 49
Slide 50: Fortification platforms
Platforms ▪ #1 in soluble fibres globally ▪ Growing presence in plant proteins ▪ US$6.5 billion addressable market1 ▪ Market growing at ~6% CAGR1,2 Global consumers Global consumers plan to eat or drink associate fibre with more fibre3 boosting immune health4 50 1.Speciality ingredient market includ
Slide 51: Fibre gap
Platforms Range of fibre recommendation 25 – 38G/Day FIBRE GAP UK China USA Brazil Current fibre intake globally (grammes/day)1 51 1 Source: Data taken from various papers. See www.tateandlyle.com/fibre-gap for full list
Slide 52: Fibre platforms
Platforms ▪ Variety of fibre ▪ Helps promote ▪ Superior ▪ Used mainly in ▪ Plant-based, vegan, content and health healthy digestion functionality health foods and gluten-free, non- benefit claims and satiety and processing infant formula GM, clean label attributes Increase nutrition Add health Sugar
Slide 53: Fortification example
Platforms ▪ Low-fat ▪ Reduced sugar and calories ▪ Added fibre ▪ Indulgent mouthfeel ▪ Diabetic and keto-friendly Skim Milk, No Sugar Added Caramel Wave (Maltitol, Water, Evaporated Milk, Modified Food Starch, Natural Flavor, Salt, Butter, Caramel Color, Potassium Sorbate, Citric Acid), Soluble Corn
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Slide 55: Markets and growth opportunity
Markets and growth opportunity Estimated Revenue Global speciality ingredient Approach mix1 population2 market growth3 Developed regions Grow above the market Large and fast-growing regions Accelerate growth 55 1. Percentage of Food & Beverage Solutions revenue in year ended 31 March 2022; 2. United
Slide 56: Food & Beverage Solutions revenue growth
Markets and growth opportunity Food & Beverage ▪ Higher growth sub-categories Solutions1 £542 m ▪ New products Broader food and ▪ Improved product mix beverage market2 ▪ Customer focus 2018 2019 2020 2021 2022 56 1. Food & Beverage Solutions excluding sucralose; 2. Global Data, North America total f
Slide 57: Addressable market by region
Markets and growth opportunity (by region)1 % of market 19.0 7.2 1.5 1.4 4.3 4.6 US$ billion Total Middle East North America Europe Latin America Asia and Africa 57 1. Market research data, Tate & Lyle and BCG analysis, value
Slide 58: Markets and growth opportunity
Markets and growth opportunity Middle East Global Asia Latin America and Africa 58 1. Mintel GNPD, product launches with one or more of the following claims: Vegan/No Animal Ingredients; Plant Based
Slide 59: Regional presence in fast-growing markets
Markets and growth opportunity ▪ Dubai ▪ Stevia (China) ▪ Shanghai ▪ Singapore ▪ Tapioca (Thailand) ▪ Sao Paulo ▪ Mexico City ▪ FOS/GOS Fibre (China) ▪ Santiago de Chile 59
Slide 60: Higher growth sub-categories
Higher growth sub-categories \ N S| TATE (Y LYLE
Slide 61: Higher growth sub-categories
Higher growth sub-categories Sweetening Mouthfeel Fortification Soups, Sauces Bakery Beverage Dairy and Dressings and Snacks Examples Examples Examples Examples ▪ Ready to drink tea ▪ Yoghurt ▪ Sauces ▪ Biscuits ▪ Carbonates ▪ Dairy Desserts ▪ Ready Meals ▪ Cereals ▪ Juice ▪ Dairy Alternatives ▪ Sal
Slide 62: Approach to sub-categories
Higher growth sub-categories ▪ Extensive consumer and category insight by region ▪ Deep understanding of consumer and category trends ▪ Close collaboration with customers ▪ Size sub-categories 62
Slide 63: RTD tea market
Higher growth sub-categories Global RTD Tea Market1 End-market size Estimated growth North America RTD Tea Market1 End-market size Estimated growth Customer Prototype Solution 63 1. Market research data, Tate & Lyle and BCG analysis, value
Slide 64: Yoghurt market
Higher growth sub-categories Global Yoghurt Market1 End-market size Estimated growth China Yoghurt Market1 End-market size Estimated growth Customer Prototype Solution 64 1. Market research data, Tate & Lyle and BCG analysis, value
Slide 65: Competitive advantage
Competitive advantage ▪ #1 Sweetening ▪ Leading scientific and ▪ Deep understanding of, and application expertise in expertise in, sub-categories ▪ #1 Fibre fortification the intersection of where sugar reduction, sweetening, mouthfeel mouthfeel and fortification ▪ #2 Mouthfeel (texturants) and fort
Slide 66: Overview
Overview ▪ Large and attractive addressable market ▪ Speciality portfolio aligned to consumer trends ▪ Strong opportunities for growth across platforms ▪ Focus on higher growth sub-categories ▪ Increasing presence in large and fast-growing markets ▪ Well-positioned to grow ahead of the market 66
Slide 67: TATE W LYLE
TATE W LYLE 5
Slide 68: Innovation and Solutions
a and ote Solutions |
Slide 69: Innovation overview
Overview Driving innovation and technology to enable the next-generation of speciality ingredients and solutions 69
Slide 70: Innovation and commercial development
Overview Innovation and Commercial Development Research Platform Solutions and Development Management Innovation Nutrition Marketi Open and Regulatory and Consumer Insight Innovation 70 \. TATE (YLYLE
Slide 71: Innovation pipeline new product revenue
Pipeline £173m Fortification launched from £95m innovation pipeline Mouthfeel (2018-22) Sweetener 2018 2019 2020 2021 2022 71 See Appendix for definition of New Products
Slide 72: Innovation pipeline
Innovation pipeline Line Mouthfeel Fortification 20% extension Breakthrough 20% 30% 20% 60% 50% Next generation Sweetener 72 1. Probability weighted revenue at 31 December 2022
Slide 73: Customer collaboration and innovation centres
Customer collaboration Customer Collaboration Mold, UK Lübeck, Germany and Innovation Centres globally Tokyo, Japan Sycamore, IL Hoffman Estates, IL Shanghai, China Dubai, UAE Mexico City, Mexico Singapore Cali, Colombia In fast-growing markets Brisbane, Australia of Asia, Middle East, Africa and La
Slide 74: Increase in customer collaboration
Customer Type ▪ Customer provides clear ▪ Customer develops recipe ▪ Work with customer’s R&D and ingredient specifications in-house Marketing teams from concept ▪ Share resources and facilities, and Approach ▪ No or minimal technical ▪ Provide technical and process provide co-manufacturing support
Slide 75: Customer priorities
Customer ▪ Improve customer experience ▪ Grow solutions business ▪ Capture more value 75
Slide 76: Science Solutions Society
SCIENCE SOLUTIONS SOCIETY 76 76
Slide 77: Interview with Julia Glotz, Food Journalist
Interview with Julia Glotz, Food Journalist 77
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Slide 79: Financial framework overview
New Tate & Lyle ▪ Large and attractive markets ▪ Leader in sweetening, mouthfeel and fortification ▪ Strong financial position ▪ Investing in growth ▪ Focus on cash generation and disciplined use of capital ▪ Generating strong returns 79 Internal Use Only
Slide 80: Potential for further growth acceleration
New Tate & Lyle Revenue EBITDA Return on capital employed Productivity growth per annum growth per annum increase per annum on average benefits Potential for further growth acceleration through 80 1. EBITDA is Earnings before interest, tax, depreciation and ammortization, excluding exceptional items
Slide 81: Drive growth, attractive returns, optimize
New Tate & Lyle Drive growth Attractive returns Optimize Percent growth per annum Growing Broadly flat Declining High-single digit over time Low double digit Percent per annum Percent per annum 81 1. Percentage of Group revenue in year ended 31 March 2022
Slide 82: Drivers of growth
New Tate & Lyle Drivers of growth Grow volume Price/mix ▪ Demand for healthier food ▪ Strategic mix management and drink ▪ Margin accretive New Products % Group EBITDA ▪ Stronger customer relationships ▪ Increasing solution selling driving new business ▪ Expanding geographic presence Manage costs ▪
Slide 83: Growth by business
New Tate & Lyle ▪ Food & Beverage Solutions ▪ Food & Beverage Solutions (incl. Primary Products Europe) ▪ Sucralose ▪ Sucralose ▪ Central ▪ Primary Products Europe 83
Slide 84: Investment in R&D and New Product revenue growth
New Tate & Lyle Investment in R&D Over last four years New Product revenue growth Over last four years Year ended Year ended 31 March 2018 31 March 2022 84 See Appendix for definition of New Products
Slide 85: New Products and solutions targets
New Tate & Lyle New Products Investment1 in innovation Solutions2 revenue from new as % of FBS revenue and solutions selling business wins to double to of revenue growth per annum out of new business pipeline 85 1. Investment is operating expense in the income statement and excludes capital investme
Slide 86: Productivity programme
(to March 2028) ▪ Delivery expected to be: \ from operational efficiencies \ from supply chain improvements ▪ Initiatives include improving our end-to-end customer experience alongside cost efficiencies 86 Internal Use Only
Slide 87: Primient transaction rationale
New Tate & Lyle ▪ Created two standalone businesses, each positioned to focus on their respective strategies ▪ Re-positioned Tate & Lyle as a focused global speciality food and beverage solutions business ▪ Accelerates opportunity to benefit from growing consumer demand for healthier food and drink
Slide 88: Relationship with Primient and KPS
New Tate & Lyle ▪ Positive relationship with KPS Capital Partners ▪ Strong cash generative business ▪ 20-year supply arrangements operating effectively ▪ Primient’s provision of corn procurement services provides supply security and price stability ▪ ~20% of Tate & Lyle’s revenue from products made
Slide 89: Capital allocation and dividend policy
New Tate & Lyle Acquisitions, Return Invest in Progressive joint ventures, surplus capital organic growth dividend policy partnerships to shareholders Maintain strong and efficient balance sheet, Target long-term leverage between 1.0x and 2.5x net debt to EBITDA Grow dividend when earnings Improving
Slide 90: Guidance and free cash flow conversion
New Tate & Lyle FY232 FY24 - FY282 Guidance free cash flow conversion1 target by 31 March 2028 FY22 & FY23 FY24 - FY28 Growth projects: typically IRR of 20% Growth Sustainability (inc maintenance) Productivity 90 1. Free cash flow conversion calculated as: (Free cash flow before capex)/EBITDA; 2. FY
Slide 91: Financial framework summary
New Tate & Lyle ▪ Strong financial position ▪ Well-placed to deliver on growth strategy ▪ Attractive organic growth profile ▪ Disciplined use of capital ▪ Productivity programme extended ▪ Attractive value proposition 91 Internal Use Only
Slide 92: Investment case and summary
5 TATE (Y LYLE < Investment case and summary _ . 92
Slide 93: Investment case
New Tate & Lyle Revenue1 ▪ Purpose-led: Transforming Lives through the Science of Food ▪ Global leader in sweetening, mouthfeel and fortification percent growth per annum ▪ Creating solutions to meet growing consumer trends for healthier food and drink EBITDA1 ▪ Established track record of innovatio
Slide 94: Science Solutions Society
SCIENCE SOLUTIONS SOCIETY 94 94
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Slide 97: Appendix: New Products definition
Appendix To reflect the differentiated profiles of ingredients launched from the innovation pipeline we have adapted the periods from launch for which we consider ingredients to be New Products as follows: Innovation type Description Examples New Product life cycle ‘New to the world’ products or pro
Slide 98: Science
Slide shown during interview with Dr. Victoria Spadaro Grant Science ▪ Bio-chemistry ▪ Ingredient performance in recipe ▪ Nutritional improvement ▪ Organic and inorganic chemistry ▪ Functionality across shelf life ▪ Value-based claims ▪ Process engineering ▪ Sensory ▪ Regulatory framework 98
Slide 99: Solutions
Solutions Prototyping Application Co-development know-how Ingredients Consumer Regulatory and Nutrition & systems and market understanding Pricing Marketing Sensory understanding 99