Tate & Lyle Plc · LSE:TATE
Tate & Lyle — H1 2025 Earnings Presentation
40 slides from Tate & Lyle's earnings presentation, Nov 7, 2024
Slide 1: Half Year Results: Nick Hampton and Sarah Kuijlaars
Nick Hampton, Chief Executive Sarah Kuijlaars, Chief Financial Officer
Slide 2: Forward-looking statements
Six months to 30 September 2024 This presentation for the Half Year Results for the six months to 30 September 2024 contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tate & Lyle PLC. These statements and forecasts involve risk
Slide 3: Agenda
Six months to 30 September 2024 01. Overview 02. Financial results and outlook 03. Strategic progress 04. CP Kelco combination 05. Summary and Q&A 3
Slide 4: Strong financial performance, acceleration of strategy, customer focus
Six months to 30 September 2024 Strong financial Significant acceleration Customer focus driving performance of growth-focused strategy innovation and solutions Strong volume and profit Transformational combination New Products revenue and growth, and cash delivery with CP Kelco announced solu
Slide 5: Six months to 30 September 2024
Six months to 30 September 2024 Volume Revenue1 EBITDA1,2 Free cash flow Productivity increase lower increase savings growth 5 1. Percentage changes are in constant currency 2. Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation)
Slide 6: Focusing the portfolio and strategic acceleration
Six months to 30 September 2024 Focusing the portfolio Strategic acceleration Combination Sale of Primient Transformation to fully-focused Creates a leading, global speciality speciality business completed food and beverage solutions business 6
Slide 7: Science, Solutions, Society
Six months to 30 September 2024 SCIENCE SOLUTIONS SOCIETY Increase in Solutions by value from Tonnes of sugar removed from New Products revenue1 new business wins2 diets by our low- and no-calorie sweeteners and fibres3 7 1. On a like-for-like basis (i.e. no products are removed from disclosure due
Slide 8: Financial results and outlook
Six months to 30 September 2024 01. Overview 02. Financial results and outlook 03. Strategic progress 04. CP Kelco combination 05. Summary and Q&A 8
Slide 9: Positive volume momentum and profit growth
Six months to 30 September 2024 ▪ Positive volume momentum and profit growth ▪ Strong financial discipline, productivity and focus on cost reduction ▪ Excellent cash delivery with cash conversion at 94% ▪ Bought back £93 million of shares in H1, 43% of ongoing £215 million buyback programme ▪ Contin
Slide 10: Six months to 30 September 2024
Six months to 30 September 2024 Revenue Adjusted EBITDA Adjusted profit before tax £775 million £188 million £156 million Adjusted earnings per share Return on capital employed Free cash flow 30.6 pence 18.5% £127 million 10 See descriptions of adjusted results for the six months to 30 September 202
Slide 11: Food & Beverage Solutions results
Six months to 30 September 2024 ▪ Volume 4% higher Driver Region ‒ Reflecting growth-focused approach to customer contracting and the end of customer de-stocking North Volume 4% (6)% America ▪ Revenue (8)% lower at £631m Asia, Middle ‒ Pass through of input cost deflation and price mix Price mix (4)
Slide 12: Sucralose results
Six months to 30 September 2024 ▪ Volume 20% higher benefiting from customer orders brought forward into H1 and productivity Volume 20% ▪ Revenue 17% higher at £99m with customer mix leading to a modest decline in average pricing Price mix (3)% ▪ Adjusted EBITDA at £33m, 23% higher with lower input
Slide 13: Delivering productivity
Six months to 30 September 2024 Delivering productivity ▪ Delivered US$27m of productivity savings from yield improvements1 Sagamore, Indiana ‒ US$17m from operational and supply chain efficiencies US$1.4m savings ‒ US$10m from other costs savings including SG&A McIntosh, Alabama US$0.6m savings ▪ O
Slide 14: Adjusted EBITDA bridge
Six months to 30 September 2024 £1m £(3)m £6m £4m £191m £188m £180m H1 FY24 Food & Sucralose Primary Products H1 FY25 FX H1 FY25 Adj EBITDA Beverage Europe Adj EBITDA Adj EBITDA Solutions Constant Currency 14 EBITDA is earnings before interest, tax, depreciation and amortisation; H1 FY represents th
Slide 15: Restructuring, tax and dividend
Six months to 30 September 2024 £(7)m 21.6% 6.4p per share ▪ £(7)m restructuring costs ▪ In-line with the comparative ▪ 0.2p per share increase to drive organisational period ‒ Represents one third of improvements and productivity prior year’s full-year dividend benefits ▪ Effective tax rate for the
Slide 16: Primient sale
Six months to 30 September 2024 ▪ Sale of remaining 49.7% stake completed on 27 June 2024 ▪ Cash proceeds of US$350m (6.5x EV/EBITDA multiple) ▪ Share of adjusted profit of £9m, 40%1 lower reflecting mid-period sale ▪ £85m post-tax gain on disposal 16 1. Percentage change is in constant currency
Slide 17: Adjusted free cash flow
Six months to 30 September 2024 Adjusted free cash flow Adjusted free cash Free cash H1 FY25 vs H1 FY242 flow £127m conversion 94%1 £41m £3m +£48m +25ppts £(4)m £127m £8m ▪ Working capital £41m lower £79m ▪ Timing of tax payments to be weighted to H2 ▪ Capital expenditure £4m higher at £50m ‒ Contin
Slide 18: Robust balance sheet
Six months to 30 September 2024 Robust balance sheet Net cash/(debt) H1 FY25 vs H1 FY24 ▪ Net cash £39m (£192m better than 31 March 2024) £277m £(93)m ‒ Primient proceeds (£277m before tax and costs) to be returned to shareholders via share buyback £(51)m £(31)m £(37)m ‒ At 30 September 2024, 14m sh
Slide 19: Outlook for standalone Tate & Lyle is unchanged
Six months to 30 September 2024 Outlook for standalone Context Tate & Lyle is unchanged Market For the year ending 31 March 2025, ▪ Modest improvement in consumer sentiment we expect to deliver in constant currency: ▪ Continued variation in local market conditions ▪ Improving customer demand for inn
Slide 20: Summary of financial results and outlook
Six months to 30 September 2024 Six months to 30 September 2024 ▪ Positive volume momentum, strong profit growth and cash delivery ▪ FBS1 adjusted EBITDA margin of 24.9%, +3.9ppts since H1 fiscal 2023 ▪ Investing to support customers, grow solutions and drive productivity ▪ Buyback continuing, commi
Slide 21: Strategic progress
Six months to 30 September 2024 01. Overview 02. Financial results and outlook 03. Strategic progress 04. CP Kelco combination 05. Summary and Q&A 21
Slide 22: New partnership for stevia Reb M
Six months to 30 September 2024 New partnership with New strategic partnership with: World-class supply, extraction and bio-conversion to commercialize large-scale, all-Americas sourced and bio-converted stevia Reb M. to commercialize large-scale, Sweetener platform all-Americas sourced and ▪ Stevia
Slide 23: ALFIE automated laboratory in Singapore
Six months to 30 September 2024 ‘ALFIE’ ‒ Automated Laboratory for Ingredient Experimentation ‒ opened in Singapore ▪ First-of-its-kind in the food industry ▪ Step change in providing customer solutions ‒ Faster and more accurate solutions design ‒ Accelerates speed-to-market ▪ New automated robotic
Slide 24: Delivering on our 1.5°C science-based targets
Six months to 30 September 2024 Delivering on our 1.5oC science-based targets ▪ New renewable electricity agreements in place: ‒ Long-term Purchase Power Agreement in US with Enel North America ‒ Agreement for McIntosh sucralose facility with Alabama Power 100% of purchased electricity1 ‒ Renewable
Slide 25: CP Kelco combination
Six months to 30 September 2024 01. Overview 02. Financial results and outlook 03. Strategic progress 04. CP Kelco combination 05. Summary and Q&A 25
Slide 26: Business combination rationale
Business combination ▪ Creates a leader in Mouthfeel and strengthens Sweetening and Fortification platforms ▪ Expands offering and deepens expertise across Tate & Lyle’s core categories and markets ▪ Delivers compelling customer proposition with a significantly enhanced solutions offering ▪ Accelera
Slide 27: Leading speciality portfolio
Business combination Leading speciality portfolio …offering key functionality …in core categories …addressing consumer trends ▪ Pectin ▪ Gelling ▪ Beverage ▪ Clean-label ▪ Carrageenan ▪ Stabilizing ▪ Plant-based ▪ Dairy ▪ Speciality gums ▪ Suspending ▪ ‘Free from’ ▪ Thickening ▪ Soups, sauces and dr
Slide 28: Global leader in Mouthfeel solutions
Business combination Combination creates a global leader in Mouthfeel solutions ▪ Sugar and calorie reduction ▪ Enhance texture ▪ Improved nutrition (fibres/protein) ▪ Nutrition improvement ▪ Sensory experience ▪ Add health benefits ▪ Label improvement ▪ Clean label solutions ▪ Sugar and calorie red
Slide 29: Focus on four core categories
Business combination Combined business Focus on four core categories 79% Complementary offering strengthens category expertise and opens new growth 90% opportunities across sub-categories of revenue of food-related from four core revenue from categories four core categories 29
Slide 30: Leading scientific capabilities
Business combination Combined business Leading scientific capabilities Highly complementary Leading scientific capabilities ▪ Chemistry / bio-chemistry world-class science ▪ Fermentation ▪ Bioconversion ▪ Extraction ▪ Fractionation and separation ▪ Enhanced R&D and innovation ▪ Gelation ▪ Crystallis
Slide 31: Combined solution example: gummies
Business combination Example Consumer preference Combined business Significant preference1 in consumer testing “I like to take my daily for gummies with enhanced solution vitamins in a gummy, but (sugar-free and gelatin-free) sugar and gelatin don’t Combined capabilities fit with my desire for a 6.1
Slide 32: Drivers of growth and margin
Business combination Drivers of growth ▪ Industry growth: Increasing consumer demand for healthier, more sustainable food and drink Towards higher-end ▪ Broader offering: Accelerate growth from complementary portfolios, platforms and categories of 4%-6% per annum growth ambition1 ▪ Stronger capabili
Slide 33: Integration overview and priorities
Business combination Overview Priorities ▪ Dedicated joint integration team working since June ▪ CP Kelco to operate as operating unit of Tate & Lyle Customer People Performance until 31 March 2025 ▪ Operate as one business from 1 April 2025 ▪ Seamless service ▪ Build new organisation ▪ Targeted syn
Slide 34: New leadership team
Business combination ▪ New team to be in place from completion Nick Hampton Bill Magee Jerome Bera Remington Zhu ▪ Draws upon the experience and skills Chief Executive President, Americas President, Europe, Middle East and Africa President, Asia Pacific of both Tate & Lyle and CP Kelco ▪ New roles f
Slide 35: Greater value for customers
Business combination Global leader in Pectin and Speciality Gums Leader in Mouthfeel and supports Sweetening and Fortification 90% of food-related revenue from same four core categories Together creating significantly greater value for customers 35
Slide 36: Summary and Q&A
Six months to 30 September 2024 01. Overview 02. Financial results and outlook 03. Strategic progress 04. CP Kelco combination 05. Summary and Q&A 36
Slide 37: Summary
Six months to 30 September 2024 ▪ Strong first-half performance ▪ Customer obsession driving growth in innovation and solutions ▪ Investing in new partnerships and technology to support customers ▪ Clear focus on driving benefits from CP Kelco combination ▪ Combined business positioned at the centre
Slide 38: Q&A
QXA
Slide 39: Appendix
Appendix
Slide 40: Primary Products Europe results
Six months to 30 September 2024 ▪ Higher volume driven by co-products ▪ Revenue (24)% lower at £45m due to lower sweetener and Volume 12% co-products pricing ▪ Adjusted EBITDA improved to £(2)m loss due to lower input costs Price mix (36)% ▪ Transition to speciality ingredients continuing 40 Revenue