Slide 1: Tate & Lyle PLC Investor Presentation November 2019
TATE & LYLE PLC INVESTOR PRESENTATION NOVEMBER 2019 1
Slide 2: Introducing Tate & Lyle
INTRODUCING TATE & LYLE Our Strategy Formed in 1921 Member of • Growing Food & Beverage Solutions following merger of FTSE 250 by building leading positions in three Henry Tate & Sons and Abram Lyle & Sons Headquartered in categories globally – beverage, dairy, London and soups, sauces and dressings
Slide 3: Our Purpose: Improving Lives for Generations
OUR PURPOSE IMPROVING LIVES FOR GENERATIONS We believe we can successfully grow our business and have a positive impact on society Supporting healthy living Building thriving communities Caring for our planet 3
Slide 4: Our Purpose: Sustainable agriculture and reducing carbon emissions
OUR PURPOSE IMPROVING LIVES FOR GENERATIONS Sustainable agriculture Reducing carbon emissions New, multi-year partnership with Land O’Lakes SUSTAINTM New natural gas-fired combined heat and power system to supporting sustainability on 1.5m acres of US-grown corn be constructed at Lafayette South, In
Slide 5: An Integrated Business
AN INTEGRATED BUSINESS Business divisions Food & Beverage Shared customers Primary Solutions Products Provides solutions for Provides high volume customers globally that food and industrial meet consumer demand products primarily for for healthier and tastier customers in the food and drink. North A
Slide 6: Investment Case
INVESTMENT CASE A clear strategy for our business… FOOD & BEVERAGE SOLUTIONS SUCRALOSE PRIMARY PRODUCTS TOP AND BOTTOM LINE GROWTH MANAGE FOR CASH; STABLE EARNINGS AND CASH GENERATION RETURN ON ASSETS By building leading positions in: By managing its portfolio to: • Three global categories – beverag
Slide 7: Three Key Priorities
Three Key Priorities Supporting performance SHARPEN ACCELERATE SIMPLIFY • Increasing customer interaction • Better balance in innovation portfolio • Continuous improvement projects • Collaborating in new ways • New Product sales growing • Capital investments to reduce costs • Expanding labs in emerg
Slide 8: Strong Leadership Team
STRONG LEADERSHIP TEAM Nick Hampton Imran Nawaz Jim Stutelberg Melissa Law Chief Executive Chief Financial Officer President, President, Primary Products Global Operations Andrew Taylor Laura Hagan Rowan Adams Lindsay Beardsell Harry Boot President, Innovation and Chief Human Executive Vice Presiden
Slide 9: Summary
Summary Encouraging progress SHARPEN • Solid financial delivery • Purpose-driven organisation ACCELERATE • ‘Sharpen, Accelerate, Simplify’ supporting performance • Increasing culture of pace and agility SIMPLIFY • Investing in long-term growth 9
Slide 10: Food & Beverage Solutions
FOOD & BEVERAGE SOLUTIONS Ingredients and solutions which add specific functionality and value to customers’ products Year ended 31 March 2019: • Volume +3% − North America +3%; ASPAC and LATAM +15%; EMEA (2)% • Sales £889 million, +5% (constant currency) • Adjusted operating profit £143 million Val
Slide 11: Food & Beverage Solutions: Global Trends
FOOD & BEVERAGE SOLUTIONS: GLOBAL TRENDS DRIVING CONSUMER, CUSTOMER AND GOVERNMENT ACTIONS Trends Actions 70 million children Reduce sugars by Obesity and Diabetes projected to be at least 5% over overweight four years to 2020 or obese globally by Sugar Reduction 20251 Plant Power Reduce calories 11
Slide 12: Food & Beverage Solutions: Focus on Three Core Categories
FOOD & BEVERAGE SOLUTIONS: FOCUS ON THREE CORE CATEGORIES Differentiated by the combination of our leading category expertise and ingredient knowledge Soups, sauces Dairy Beverages and dressings CUSTOMER SOLUTIONS Sugar and calorie Texturants Enrichment Stabilisation reduction Adding sweetness Thick
Slide 13: Food & Beverage Solutions: Delivering Value, Taste and Nutrition
FOOD & BEVERAGE SOLUTIONS: DELIVERING VALUE, TASTE AND NUTRITION Sweeteners • Replace sugars • Reduce calories Health & Wellness • Match sweetness • Replace sugar to reduce Value • Optimise product bulk and calories while maintaining taste mouthfeel • Add nutrition through fibre enrichment Taste Nut
Slide 14: Food & Beverage Solutions: Accelerating Growth in North America
FOOD & BEVERAGE SOLUTIONS: ACCELERATING GROWTH IN NORTH AMERICA Winning Winning in new Winning with Global Accounts customers/channels with Innovation 14
Slide 15: Food & Beverage Solutions: Maintaining Momentum in Emerging Markets
FOOD & BEVERAGE SOLUTIONS: MAINTAINING MOMENTUM IN EMERGING MARKETS Geographic expansion model Local labs serving local tastes Get 17 >50% Smart Application and Located in Understand local technical service emerging markets trends and centres globally customers Get Get In Ahead Build beachhead Partn
Slide 16: Sucralose
SUCRALOSE A high-intensity sweetener which offers sugar-like sweetness, stability and versatility Year ended 31 March 2019: • Volume +16% − Benefits of programme to optimise production and sale of excess inventory • Sales £164 million • Adjusted operating profit £61 million − Softer pricing due to s
Slide 17: Primary Products
PRIMARY PRODUCTS High volume ingredients which are largely undifferentiated and compete primarily on quality, service and price Year ended 31 March 2019: • Volume in line • Sales £1,702 million • Adjusted operating profit £148 million − Sweeteners and starches £126 million − Commodities £22 million
Slide 18: Primary Products: What We Make
PRIMARY PRODUCTS: WHAT WE MAKE Industrial Joint Sweeteners Acidulants Commodities starches ventures HFCS 55 Adhesive starches Citric Acid Corn Gluten Feed DuPont Tate & Lyle Bio-Products HFCS 42 Coating starches Malic Acid Corn Gluten Meal Corn Syrup Binding starches Fumaric Acid Corn Oil Almex Dext
Slide 19: Primary Products: Market Overview and Actions
PRIMARY PRODUCTS: MARKET OVERVIEW AND ACTIONS Market conditions remain challenging Clear focus and actions Bulk sweeteners • Volume in US regular carbonated • Mix management soft drinks declined by 1.6%1 − Optimise customer and product mix • Exports to Mexico slightly lower − Margin expansion opport
Slide 20: Primary Products: Commodities
PRIMARY PRODUCTS: COMMODITIES Principal activities Dampening volatility • Corn procurement • Conservative hedging strategy • Network of storage facilities • Investments in elevator network to manage cost effectiveness and security of corn supply • Sale of co-products • Active management of co-produc
Slide 21: Corn Wet Milling Process
CORN WET MILLING PROCESS • Majority of our ingredients produced Primary Corn Co-Products through corn wet milling capacity Wet Milling Corn Corn Gluten Corn Gluten • We have 6 major corn wet mills: 4 in US, Starch Oil Meal Feed 2 in Europe Physical / Chemical Glucose • Around 60% of a kernel of corn
Slide 22: Innovation and Commercial Development
INNOVATION AND COMMERCIAL DEVELOPMENT Brings together scientific and commercial functions to provide an integrated approach to developing and commercialising new products Critical growth enabler Unique Driven by Strong track Accelerating strengths consumer and record of portfolio drive category comm
Slide 23: Innovation and Commercial Development: A Key Enabler of Future Growth
INNOVATION AND COMMERCIAL DEVELOPMENT: A KEY ENABLER OF TATE & LYLE’S FUTURE GROWTH ICD’s unique structure enables rapid commercialisation of new ingredients and solutions Platform Research & Nutrition Science Open Strategy Development and Regulatory Innovation Partner with Rapid commercialisation G
Slide 24: Strong Trajectory of Innovation Performance: New Product Sales
STRONG TRAJECTORY OF INNOVATION PERFORMANCE: NEW PRODUCT SALES 131 New Product Sales (£m) • Three ingredients were removed from New Products • ‘New Products’ are products during the year since they launched within the last seven were launched more than years. seven years ago FY12 to • 2% growth in s
Slide 25: Appendix
TATE % LYLE 25
Slide 26: Clear Capital Allocation Framework
CLEAR CAPITAL ALLOCATION FRAMEWORK Capital allocation priorities to maintain Balance investment grade credit rating Sheet Invest in organic growth Strong returns on capital employed Acquisitions, joint ventures, partnerships Progressive dividend policy Forward leverage range of 1.5x to 2.5x Return s
Slide 27: Disciplined Use of Capital
DISCIPLINED USE OF CAPITAL Investing to Grow Capital expenditure mix Capital expenditure Medium FY201 term 40% Outlook £140m – £160m £130m – £170m Expansion Cost Reduction 25% • Strong balance sheet gives investment flexibility Maintenance • Invest behind growth as opportunities arise e.g. significa
Slide 28: Sources of Productivity Benefits
SOURCES OF PRODUCTIVITY BENEFITS Produce, Selling, General and Procure and Fulfil Administrative Efficiencies Capital investment to reduce costs Zero-based budgeting Continuous improvement ~60% ~40% Supply chain / Procurement Simplify organisation to make faster decisions Operational reliability US$
Slide 29: Cautionary Statement
CAUTIONARY STATEMENT This presentation has been prepared solely to provide information to assess the Group’s strategy and should not be relied upon for any other purpose. It contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tat