Tate & Lyle Plc · LSE:TATE
Tate & Lyle — Deutsche Bank Conference, Paris 2007
35 slides from Tate & Lyle's conference presentation, Jun 12, 2007
Slide 1: Deutsche Bank Conference
Deutsche Bank Conference John Nicholas, Group Finance Director Paris, 12 June 2007
Slide 2: Agenda
Agenda Overview and Key Financials SPLENDA® Sucralose Business Reshaping for Future Growth 2
Slide 3: Strategic vision
Strategic vision PURPOSE to create the world’s leading renewable ingredients business 3
Slide 4: Strategy for growth: Where we compete - Food and Beverage
Strategy for growth Where we compete Food and Beverage Sweeteners Acidulants Stabilisers Enrichers Nutritive: Sugars, Citric acid Hydrocolloids: Dietary fibres: Cereal Sweeteners Starches, Gums Resistant syrups and starches, Polydextrose Low-calorie – Polyols, Emulsifiers: Starches, Malic Acid Polyd
Slide 5: Strategy for growth: Where we compete - Industrial
Strategy for growth Where we compete Industrial Bio-fuels Paper ingredients Bio-materials Other applications Ethanol Starches Bio-PDO™ Acidulants Retention aids Fermentation substrates Bio-gums Animal feed Pharmaceutical and personal care Basic nutrients Humectants Excipients Sweeteners Other applic
Slide 6: Tate & Lyle Today
Tate & Lyle Today The leading renewable ingredients business Food & Food & Industrial Industrial Ingredients, Ingredients, Sucralose Sugars Americas Europe (TALFIIA) (TALFIIE) Ingredients, Americas Ingredients, London Citric Acid Europe SPLENDA® Lisbon Custom Ingredients Cesalpinia Sucralose Sugar /
Slide 7: Key Results
Key Results Year to 31 March 2007 vs 2006 Total Profit Before Tax1 £336m Up 14% Margin1 9.2% Up 40 bp Diluted EPS1 47.9p Up 15% Dividend 21.5p Up 1.5p, 7.5% 1 Before exceptional items and amortisation of acquired intangibles 7
Slide 8: Three consecutive years of double digit profit growth
Three consecutive years of double digit profit growth Total Profit before Tax1 £336m £295m £254m +14% £227m +16% +12% CAGR FY04* to FY07 = 14% FY04* FY05 FY06 FY07 1 Before exceptional items and amortisation of acquired intangibles * Reported under UK GAAP 8
Slide 9: Pro Forma Contribution to profitability
Pro Forma Contribution to profitability FY2007 Pro Forma# Operating Profit (ex Central Costs) : £352m* By division: £m By category: £m (9%) (19%) (20%) £30m (2%) £66m (50%) £71m £7m (8%) £28m (0%) Total (20%) £1m £175m value added £71m (13%) £47m £159m £88m (45%) (25%) £40m £80m (11%) (23%) TALFIIA
Slide 10: Margin improvement
Margin improvement Total PBI*/Sales Margin# 9.5 9.0 8.5 8.0 7.5 % 7.0 6.5 6.0 5.5 5.0 4.5 4.0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 * Before exceptional items and amortisation of acquired intangibles # 2001-2004 reported under UK GAAP, 2005-2007 reported under IFRS 10
Slide 11: Key Financial Ratios
Key Financial Ratios Years to March 2007 2006 Diluted adjusted earnings per share (pence) * - Total operations 47.9 41.7 - Continuing operations 45.2 37.8 Final dividend proposed (pence) ^ 15.3 14.1 Full year dividend per share (pence) 21.5 20.0 Dividend cover (times) *# 2.3 2.1 Effective tax rate f
Slide 12: Agenda
Agenda Overview and Key Financials SPLENDA® Sucralose Business Reshaping for Future Growth 12
Slide 13: We took over McIntosh, Alabama in April 2004
SPLENDA® Sucralose We took over McIntosh, Alabama in April 2004 Challenge Action Reliability of production Technical advances resulted in major turnaround by mid-2006 Capacity constraints Doubled Alabama and built new plant in Singapore Security of Supply Built new plant in Singapore Patent protecti
Slide 14: Strong historic sales growth
SPLENDA® Sucralose Strong historic sales growth $143m $133m $133m $122m $113m $99m CAGR FY05 to FY07 = 14%+ 1H05 2H05 1H06 2H06 1H07 2H07 8% YOY growth in FY2007, 17% YOY growth in 2H07 14
Slide 15: World intense sweetener market
SPLENDA® Sucralose World intense sweetener market Manufacturers' Sales FY2007 Total Market Value ~ US $1billion By Product By Geography 1% 10% 7% 11% 28% 2% 19% 8% 53% 21% 42% 2% Sucralose Aspartame Americas Europe Acesulfame K Saccharin Asia Rest of World Cyclamate Stevia Source: Company Data. Excl
Slide 16: High intensity sweeteners
SPLENDA® Sucralose High intensity sweeteners Market shares by region North Latin Asia Rest of US $m Global America America Europe Pacific World TOTAL HIS 1,000 440 90 211 191 68 SPLENDA® Sucralose 276 197 29 26 23 1 Market share 28% 45% 32% 12% 12% 1% Source: LMC International; Company data. Exclude
Slide 17: Household Penetration Data
SPLENDA® Sucralose Household Penetration Data US Household Penetration of SPLENDA® Brand higher than many iconic brands* SPLENDA® Brand 58.5% Heinz 55.5% McCormick Spices 53.1% Tropicana 51.1% * % of US households purchasing a product with the “Sweetened with SPLENDA® Brand “ logo on the packaging i
Slide 18: Little change in overall breakdown of ingredient use year on year
SPLENDA® Sucralose Little change in overall breakdown of ingredient use year on year Global Sucralose sales up $21m (8%) FY2006 FY2007 10% 9% 48% 48% 42% 43% Food Bev Pharma Food Bev Pharma % split by sales revenue Source: Company Data 18
Slide 19: Pipeline update April 2007
SPLENDA® Sucralose Pipeline update April 2007 Number of new projects Expected time to launch 3–6 months 6–12 months 12–18 months North America 77 62 94 Latin America 13 20 10 Europe 79 19 11 TOTAL 169 101 115 Source: Company data 19
Slide 20: Four drivers of growth
SPLENDA® Sucralose Four drivers of growth Tea drink in Pakistan Baked cookies in the New product United States lines which are difficult to Entry into new manufacture geographies with other HIS’s SPLENDA® Sucralose Substitution for Sweetener other HIS’s in optimisation – existing ranges nutritive bl
Slide 21: SPLENDA Sucralose is a highly successful product
SPLENDA® Sucralose SPLENDA® Sucralose is a highly successful product y SPLENDA® Sucralose is a strong brand with high consumer trust y More than doubled sales since realigning the business with McNeil Nutritionals y Capacity successfully added and we estimate this will achieve 70% utilisation by 201
Slide 22: Agenda
Agenda Overview and Key Financials SPLENDA® Sucralose Business Reshaping for Future Growth 22
Slide 23: Business reshaping in line with Strategy: Investments
Business reshaping in line with Strategy Investments Investments in Global Food Ingredients y 80% investment in G.C. Hahn in Germany, a leader in dairy stabiliser systems (expected to complete in June 2007) y Established Health and Wellness centre in Lille and added new sales and R&D centres in Shan
Slide 24: Business reshaping in line with Strategy: Disposals
Business reshaping in line with Strategy Disposals Sale of Redpath y completed on 21 April 2007 with a net consideration of £131m Eastern Sugar y surrender of quota and successful outcome of litigation resulted in net gain of £23m European Starches y discussions at an advanced stage of with Syral (s
Slide 25: Expansion projects: Bio-PDO JV
Expansion projects continue to progress satisfactorily Bio-PDO™ JV – £60m Completed on time and sales made across several categories 9 25
Slide 26: Expansion projects: Sagamore
Expansion projects continue to progress satisfactorily Sagamore – £50m Expansion to increase capacity for value added food starches complete 9 26
Slide 27: Expansion projects: Loudon
Expansion projects continue to progress satisfactorily Loudon – £50m 9 Value added starches and ethanol capacity expansion, on track to complete in Oct 2007 27
Slide 28: Expansion projects: Fort Dodge
Expansion projects continue to progress satisfactorily Fort Dodge – £140m 9 1st phase of new corn wet mill (for cationic starches & ethanol) on track to complete by March 2009 28
Slide 29: Key areas of focus
Key areas of focus y Geographic and product expansion of SPLENDA® Sucralose y Reshape our European ingredients business y Continue European Sugar reshaping for the market beyond 2009 y Progress all expansion projects and continue to seek bolt-on acquisitions y Improve balance sheet efficiency 29
Slide 30: Conclusion
Conclusion • Our long term strategy continues to serve us well • We are confident we will be well-placed to deliver further growth in the years ahead 30
Slide 31: Question and Answers
TATE & LYLE CONSISTENTLY FIRST IN RENEWABLE INGREDIENTS Question and Answers
Slide 32: Appendix
TATE & LYLE Appendix
Slide 33: Income Statement
Income Statement Year to March 2007 Total Discont’d# Continuing Pro forma Pro forma £m TALFIIE Total Discont’d^ Sales 4,070 256 3,814 520 3,294 Profit before interest * 373 18 355 38 317 Net finance expense (37) 1 (38) (10) (28) Profit before taxation* 336 19 317 28 289 PBI*/Sales margin 9.2% 7.0% 9
Slide 34: Income Statement
Income Statement Year to March 2007 Pro forma Pro forma £m Total Discont’d# Continuing TALFIIE Total Discont’d^ Profit before taxation* 336 19 317 28 289 Amortisation of (9) - (9) - (9) acquired intangibles Exceptional items 10 23 (13) - (13) Taxation (120) (15) (105) (19) (86) Minority interest (3)
Slide 35: Pro Forma Revised Product Analysis
Pro Forma Revised Product Analysis Year to March 2007 UNAUDITED FIGURES Sales Operating Profit* Value Total Value £m Primary Primary Total added added Sugar - Products 531 72 603 30 7 37 - Trading 985 - 985 28 - 28 Ingredients - Food 681 351 1,032 88 80 168 - Industrial 407 120 527 47 1 48 Global Su