Tate & Lyle PLC · LSE:TATE
Tate & Lyle — Investor Presentation (February 2021)
27 slides from Tate & Lyle's investor presentation, February 2021
Slide 1: Tate & Lyle PLC Investor Presentation February 2021
TATE & LYLE PLC INVESTOR PRESENTATION FEBRUARY 2021
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: Living our Purpose
Living 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 We help people make healthier and We help build thriving communities We care for our
Slide 4: 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 5: Investment Case
Investment Case A Clear Strategy FOOD & BEVERAGE SOLUTIONS PRIMARY PRODUCTS TOP AND BOTTOM LINE GROWTH STABLE EARNINGS AND CASH GENERATION By building leading positions in: By managing its portfolio to: • Three global categories – beverage, dairy, and soups, sauces and dressings • Optimise product a
Slide 6: 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 7: Consistent delivery
Consistent delivery Adjusted profit before tax1,3 Adjusted earnings per share1,2,3 Return on capital employed1,3 6% 8% 65bps average p/yr CAGR CAGR £331m 57.8p 17.5% 17.1% 52.0p 16.2% 49.4p £309m £296m FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 1 See descriptions of adjusted results in Note 2 of F
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: Food & Beverage Solutions
FOOD & BEVERAGE SOLUTIONS Ingredients and solutions which add specific functionality and value to customers’ products Year ended 31 March 2020: • Volume +1% • Revenue £942 million, +5%1 − North America +6%1; ASPAC and LATAM +7%1; EMEA +1%1 • Profit2 £162 million, +10%1 • New Products revenue £113 mi
Slide 10: Global Trends Driving Consumer, Customer and Government Actions
Food & Beverage Solutions Global Trends Driving Consumer, Customer and Government Actions Obesity and Diabetes 70 million children projected to be overweight or obese globally by 20251 Sugar Reduction Plant Power 110 million diabetics in China, estimated to increase to 154 million by 20402 Regulator
Slide 11: 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 Thicke
Slide 12: 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 Nutr
Slide 13: Strategy Delivering
Food & Beverage Solutions Strategy Delivering Sugar Reduction Clean Label Plant Power Fibres +16%1 +51%1 +23%1 +13%1 Increase in revenue for Increase in revenue for Increase in Increase in ingredients used for clean label texturants stevia revenue revenue sugar reduction2 1 Year ended 31 March 2020;
Slide 14: Sucralose
SUCRALOSE A high-intensity sweetener which offers sugar-like sweetness, stability and versatility Year ended 31 March 2020: • Volume (4)% − Lapping actions taken to optimise inventory in fiscal 2019 − Underlying volume +1% • Revenue £164 million, (4)%1 − Strong customer mix management • Profit2 £63
Slide 15: Primary Products
PRIMARY PRODUCTS High volume ingredients which are largely undifferentiated and compete primarily on quality, service and price Year ended 31 March 2020: • Total volume (2)% • Revenue £1,702 million, +2%1 • Profit2 £148 million, +3%1 − Sweeteners and starches £133 million, +1%1; mix management and c
Slide 16: 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 Dextr
Slide 17: Primary Products Strategy Delivering
Primary Products Strategy Delivering Challenging market conditions Clear focus and actions in year ended 31 March 2020 • 2.0%2 decline in US regular • Operational efficiency carbonated soft drinks volume • Optimise product and customer mix • Lower exports to Mexico • Strong customer service • Weaker
Slide 18: 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-product
Slide 19: 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 20: 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 21: A Key Enabler of Tate & Lyle's Future Growth
Innovation and Commercial Development A Key Enabler of Tate & Lyle’s Future Growth ICD’s structure enables rapid commercialisation of new ingredients and solutions Platform Research & Nutrition Science Open Strategy Development and Regulatory Innovation Partner with Rapid commercialisation Globally
Slide 22: Strong Trajectory of Innovation Performance
Strong Trajectory of Innovation Performance New Product Revenue (£m) +15% • ‘New Products’ are products launched within the last seven years. 113 • 15% growth in revenue of New Products in FY20 95 93 81 • New Products represent 12% of 57 Food & Beverage Solutions revenue 43 30 FY14 FY15 FY16 FY17 FY
Slide 23: Appendix
Appendix TATE LYLE
Slide 24: 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 25: Productivity Programme
Productivity Programme Programme summary at 31 March 2020 Productivity Benefits (cumulative) • Delivered US$87m benefits after two years, ahead of expectations • Extended by two years and US$50m to US$150m by March 2024 Actual New benefits target • Cash exceptional costs to increase from US$40m to a
Slide 26: Strong Balance Sheet
Strong Balance Sheet Debt maturity profile1 • Low leverage with net debt / EBITDA ratio 0.9x at 31 March 2020 $180m $150m • Significant covenant headroom on borrowings $100m $100m • Strong liquidity with access to >US$1 billion $24m • No debt repayment until 2023 Nil 2020-22 2020 2023 2025 2027 2028
Slide 27: 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