Tate & Lyle Plc · LSE:TATE
Tate & Lyle — Debt Investor Presentation (June 2002)
33 slides from Tate & Lyle's debt investor presentation, June 2002
Slide 1: Sterling Bond Investor Presentation
WORLD LEADER IN CARBOHYDRATE INGREDIENTS WORLD LEADER IN CARBOHYDRATE INGREDIENTS Sterling Bond Investor Presentation June 2002
Slide 2: Agenda
Agenda • Business Overview • Group Strategy • Financial Review • Credit Strength • Bond Offering Details 2
Slide 3: A World Leader in Carbohydrate Ingredients
A World Leader in Carbohydrate Ingredients 3
Slide 4: History
History The First Initial Starch A Focused Hundred Years Investments Business 1859 1938 1976 1999-2002 2000 Henry Tate Listed on the First Sale of 30 Creation of forms sugar London investment in businesses a Global refining Stock Cereal to focus on Cereal partnership Exchange Sweeteners core Sweeten
Slide 5: Group Structure in June 2002
Group Structure in June 2002 Following disposal of 30 businesses CEREAL SWEETENERS SUGAR & STARCHES Staley TLS/Alcantara • Almex (JV) • Sugar Trading • Citric Acid Eastern Sugar (JV) Amylum Redpath Sugar • Eaststarch (JV) Occidente Sucralose Vietnam & China Note: excludes UM Group - planned disposal
Slide 6: Starch Industry Overview
Starch Industry Overview The Starch Tree – Inputs and Outputs of the Industry Lysine Enzymes Citric Acid Tryptophan Lactic Acid MonoSodium Glutamate Fuel/Industrial/ Potable Ethanol Xanthan Gum 42 & 55 HFCS Riboflavin Crystalline Fructose Crystalline Dextrose Separation Cyclodextrins Corn Syrup Ferm
Slide 7: Cereal Sweeteners
Cereal Sweeteners Raw Material Product Markets Corn HFCS Soft drinks Corn Syrup Confectionery Brewing Maltodextrins Polydextrose Wheat Dextrose Crystalline Dextrose Baking Fermentation & Fructose Tate & Lyle Product Volume : 5m tonnes Tate & Lyle Position World: No.1 Crystalline Fructose North Ameri
Slide 8: Starches
Starches Raw Material Product Markets Corn Food Food Starches Beverages Pharmaceutical Wheat Industrial Paper & Board Starches Corrugating Building Materials Textiles Tate & Lyle Product Volume : over 1.5m tonnes Tate & Lyle Position Global: No.1 Industrial Starches North America: No. 2 in Commodity
Slide 9: Fermentation & Hydrogenation
Fermentation & Hydrogenation Raw Material Product Market Cereal Fermentation Soft Drinks Sweeteners Citric Acid Foods Ethanol Detergents MSG Alcoholic Drinks Fuel Industrial Uses Sugar Molasses Hydrogenation Toothpaste Chewing Gum Dextrose Sorbitol Polyurethane World: No.1 Citric Acid EU: No.1 MSG &
Slide 10: Sugar
Sugar TLS (UK) – 42% share of UK industrial, 30% share of UK retail sugar markets Alcantara – c. 50% of Portuguese market Regulatory protection under EU sugar regime Strong consumer brands Eastern Sugar poised to benefit from EU enlargement Other Markets: Redpath (Canada), Occidente (Mex
Slide 11: Agenda
Agenda • Business Overview • Group Strategy • Financial Review • Credit Strength • Bond Offering Details 11
Slide 12: Strategy Overview
Strategy Overview FOCUS LOW VALUE COST ADDED Focusing Developing a Growing the on our core low cost contribution business culture from throughout value added the Group products 12
Slide 13: The Group in March 1999
The Group in March 1999 Significant operating units Starch Sugar Sugar A E Staley Domino TLS/Alcantara Starch Almex Western TLI Citric Redpath Amylum Eastern (JV) Imasa (Argentina) Occidente Eaststarch (JV) Garbow (Poland) North America Animal Feed Europe International PM Ag Other Bundaberg United M
Slide 14: Group Structure in June 2002
Group Structure in June 2002 Following disposal of 30 businesses CEREAL SWEETENERS SUGAR & STARCHES Staley TLS/Alcantara • Almex (JV) • Sugar Trading • Citric Acid Eastern Sugar (JV) Amylum Redpath Sugar • Eaststarch (JV) Occidente Sucralose Vietnam & China Note: excludes UM Group - planned disposal
Slide 15: Delivering on Strategy
Delivering on Strategy Low cost culture throughout the Group Good progress on Amylum integration Confident of achieving £50m pa benefit Millwall production site closed Exceeded 3% energy efficiency target New Global Teams Export Sales Speciality Sales R&D 15
Slide 16: A World Leader in Carbohydrate Ingredients
A World Leader in Carbohydrate Ingredients Speciality products - specific functionality Focused R&D working with customers 45% contribution from Value Added 16
Slide 17: Agenda
Agenda • Business Overview • Group Strategy • Financial Review • Credit Strength • Bond Offering Details 17
Slide 18: Summary Profit and Loss Account
Summary Profit and Loss Account £m Change 2002 2001 Year ending March (%) Turnover 3,944 4,146 -5 EBIT 1 216 185 +17 Margins 5.5 4.5 Net interest (57) (72) +21 Profit before tax 1 159 113 +41 EBITDA / Interest 2 5.5x 4.3x +28 EBIT / Interest 2 3.3x 2.3x +43 1 Before exceptional items and goodwill am
Slide 19: Profit and Loss Account
Profit and Loss Account Analysis - year ended March 2002 £m Planned# Ongoing# Disposals Discont’d Total Sales 3,053 371 520 3,944 Profit before interest* 216 15 (15) 216 Goodwill amortisation (8) - - (8) Profit before interest‡ 208 15 (15) 208 PBI/Sales margin* 7.1% 4.0% n/a 5.5% # Ongoing and Plann
Slide 20: Segmented Profit and Loss
Segmented Profit and Loss 2002 Sales 2002 EBIT Sales: £3,053m EBIT (1): £216m * Before exceptional items and goodwill amortisation (1) Includes net cost from Other Businesses and Activities of £22m 20
Slide 21: Summary Balance Sheet
Summary Balance Sheet £m 2002 2001 Year ending March Fixed Assets 1,699 1,860 365 551 Working Capital (639) (963) Net Debt (344) (386) Provisions 1,081 1,062 Net Assets Gearing 59% 91% Net Debt / EBITDA # 2.1x 3.3x RONOA ‡ 10.5% 8.5% 21 # EBITDA excludes share of income from joint ventures and assoc
Slide 22: Capital Expenditure
Capital Expenditure £m 300 Capital Expenditure Depreciation 200 100 0 1998 1999 2000 2001 2002 Years ended March 22
Slide 23: Free Cash Flow Generated £273m
Free Cash Flow Generated £273m Year to March 2002, in £m 1 Interest 143 Other Tax Capex 301 61 35 273 Reduction in working capital 76 Operating profit Free cash flow before depreciation 23
Slide 24: Reduction in Net Debt £324m
Reduction in Net Debt £324m Year to March 2002, in £m 963 Free cash flow 15 Disposals 79 Investments Other 639 273 Dividends 137 8 2001 2002 24
Slide 25: Net Debt - 5 Year History
Net Debt - 5 Year History As at 31 March £m 1200 Net debt 1000 800 600 400 200 0 1998 1999 2000 2001 2002 25
Slide 26: Financial Targets
Financial Targets • EBITA / Interest Cover > 4x • 15% RONOA • > 50% of EBITA from value added 26
Slide 27: Debt Maturity Profile
Debt Maturity Profile Maturity of Borrowings Undrawn Committed Facilities Existing borrowings 300 £200m bond 200 250 160 200 £ in millions £ in millions 120 150 100 80 50 40 0 0 < 1 yr > 1 yr >2 yrs >3 yrs >4 yrs >5 yrs < 1 yr > 1 yr and up > 2 yr and up and up and up and up and up to 2 yrs to 5 yrs
Slide 28: Items not on Balance Sheet
Items not on Balance Sheet £m Year ending March 2002 2001 Receivables securitisation 52 42 Indebtedness of JVs & associates 100%145 220 Group share 7186 Commitments under operating leases 166 210 28
Slide 29: Agenda
Agenda • Business Overview • Group Strategy • Financial Review • Credit Strength • Bond Offering Details 29
Slide 30: Rating Agency Perspective
Rating Agency Perspective Moody’s – Baa2 (Stable) Standard & Poor’s – BBB (Stable) “The ratings reflect the strengths of T&L’s “The ratings reflect the group's leading competitive positions in the sugar, cereal positions in cereal sweeteners and starches sweeteners and starch industries, and the in
Slide 31: Investment Highlights
Investment Highlights • Strength of operating cash flow • Investment grade ratings • Conservative financial policies • Improving financial ratios • Consistent and effective strategy 31
Slide 32: Agenda
Agenda • Business Overview • Group Strategy • Financial Review • Credit Strength • Bond Offering Details 32
Slide 33: Offering Summary
Offering Summary Issuer: Tate & Lyle International Finance PLC Guarantor: Tate & Lyle PLC Issue Size: GBP 200m Maturity: 7 or 10 years Offering Format: Eurobond issued off existing EMTN programme Ratings: Baa2 (stable outlook) / BBB (stable outlook) Use of proceeds: Refinancing existing debt Joint-B