Tate & Lyle Plc · LSE:TATE
Tate & Lyle — FY2011 Earnings Presentation
41 slides from Tate & Lyle's earnings presentation, May 27, 2011
Slide 1: Results for year ended 31 March 2011
Results for year ended 31 March 2011 27 May 2011, London Good morning and welcome to the presentation of Tate & Lyle’s results for the year ended 31 March 2011.
Slide 2: Agenda
Agenda Key Results and Operating Highlights Javed Ahmed Financial Review Tim Lodge Outlook Javed Ahmed Focus, Fix, Grow: Update Javed Ahmed 2 Turning to the agenda. I will start with an overview of how Tate & Lyle and the main operating divisions performed during the year. Tim will then take you thr
Slide 3: Key Results and Operating Highlights
Key Results and Operating Highlights Javed Ahmed, Chief Executive Starting with our key results.
Slide 4: Key Results
Key Results Year ended 31 March Continuing operations ¹ Change 2011 2010 Change (constant (£1=US$1.55) (£1=US$1.61) currency) Adjusted operating profit 2 - SFI operating profit up 25% in constant currency £321m £268m + 20% + 17% - BI operating profit up 11% in constant currency PBTEA 2 £263m £196m +
Slide 5: Our KPIs
Our KPIs Year ended 31 March 2011 Year ending 31 March KPI Measure 2011* 2010* Change Growth in Speciality Sales £805m £788m + 2% Food Ingredients Profitability Adjusted operating profit £321m £268m + 17% Financial performance1 Working capital Cash conversion cycle 34 days 45 days + 11 days efficien
Slide 6: Speciality Food Ingredients
Speciality Food Ingredients Adjusted Operating Profit1 (+26% reported, +25% constant currency) Starch-based High Intensity Food Systems Speciality Ingredients Sweeteners • Strong demand for • Continued volume growth • Sustained growth in modified food starches • Market share maintained emerging mark
Slide 7: Bulk Ingredients
Bulk Ingredients Adjusted Operating Profit1 (+15% reported, +11% constant currency) Sweeteners Industrial Starches, Co-products Acidulants & Ethanol • In the US, lower unit margins • Higher industrial starch • Strong increase in offset by strong US seasonal volumes offset by lower unit co-product in
Slide 8: Financial Review
Financial Review Tim Lodge, Chief Financial Officer Thank you Javed, and good morning. 8
Slide 9: Income Statement
Income Statement Year ended 31 March Continuing operations 1 2011 2010 At constant £m, unless stated (£1=US$1.55) (£1=US$1.61) currency Sales 2,720 2,533 5% Adjusted operating profit ² - SFI 206 163 25% - BI 157 136 11% - Central (42) (31) (27%) 321 268 17% Net finance expense (58) (72) 22% Adjusted
Slide 10: Speciality Food Ingredients
Speciality Food Ingredients Year ended 31 March At Continuing £m, unlessoperations stated 2011 2010 constant currency Sales 805 788 2% Exchange effect on 1 Adjusted operating profit 206 163 25% adjusted operating profit £2m 1 Margin 25.6% 20.7% Operating cash flow 263 200 Sales Operating profit 1 Op
Slide 11: Speciality Food Ingredients
Speciality Food Ingredients Year ended 31 March At Continuing £m, unlessoperations stated 2011 2010 constant currency Sales 805 788 2% 1 Adjusted operating profit 206 163 25% 1 Margin 25.6% 20.7% Starch-based High Intensity Food Systems Speciality Ingredients Sweeteners Sales £434m, up 2% Sales £185
Slide 12: McIntosh Re-opening
McIntosh Re-opening Year ended 31 March Continuing operations McIntosh EBIT positive in second year after commissioning £m, unless stated 2009 2010 2012 Restart costs - - (3) McIntosh asset value - Impairment (97) - 50 - New capital - - 13 (97) - 63 Mothballing costs - exceptional - (55) 20 12 Ret
Slide 13: Bulk Ingredients
Bulk Ingredients Year ended 31 March At Continuing £m, unlessoperations stated 2011 2010 constant currency Sales 1,915 1,745 7% 1 Adjusted operating profit 157 136 11% Exchange effect on adjusted operating profit 1 £5m Margin 8.2% 7.8% Operating cash flow 99 402 1 Before exceptional items and amorti
Slide 14: Bulk Ingredients
Bulk Ingredients Year ended 31 March At Continuing £m, unlessoperations stated 2011 2010 constant currency Sales 1,915 1,745 7% Firmer co-product income added £16m to 1 Adjusted operating profit 157 136 11% profit US corn prices – ¢/bushel European corn prices – €/tonne 800 250 700 220 600 190 500 1
Slide 15: Bulk Ingredients
Bulk Ingredients Year ended 31 March At Continuing £m, unlessoperations stated 2011 2010 constant currency Sales 1,915 1,745 7% 1 Adjusted operating profit 157 136 11% 1 Margin 8.2% 7.8% Operating cash flow 99 402 Sweeteners Industrial & Other US Sweeteners EU Sweeteners Sales £1,058m, up 13% Sales
Slide 16: Interest, Tax and EPS
Interest, Tax and EPS Year ended 31 March Continuing operations 1 At constant £m, unless stated 2011 2010 currency Interest reported (58) (72) 22% - add back pension interest 4 19 - add back net hedge unwind 4 - Underlying interest (50) (53) Tax ² (49) (41) (14%) Effective tax rate ² 18.5% 20.8% Ear
Slide 17: Discontinued Operations
Discontinued Operations Year ended 31 March £m, unless stated 2011 2010 Sales 590 1,074 1 Adjusted operating profit (2) 28 Cash proceeds from disposals 290 (26) Cash disposed (10) - Cash (absorbed) / generated by discontinued operations (105) 97 Total discontinued cash flow 175 71 1 Before exception
Slide 18: Exceptional Items
Exceptional Items Year ended 31 March £m 2011 2010 Continuing operations Gain on disposal, net of disposal costs - Fort Dodge 10 - Impairment charges - Fort Dodge - (217) Business transformation costs (10) - Closure and restructuring costs (5) (3) McIntosh mothballing provision - (55) UK Group Pensi
Slide 19: Business Transformation
Business Transformation Year ended 31 March Continuing operations 1 £m 2011 Commercial & Food Innovation Centre 6 IS/IT & Global Shared Services 10 16 2011 – Exceptional cost £10m; Capital cost £6m 2012 – £65m estimated total expenditure; capital estimated at 60% 2013 – Remaining IS/IT and Glo
Slide 20: Free Cash Flow
Free Cash Flow Year ended 31 March 2011 EBITDA £417m 96 9 101 58 46 321 325 31 190 Adjusted Deprn / Working Share- Operating Capex Interest Tax Free cash operating amort 1 capital based cash flow flow profit payments from cont. ops. 1 Deprn/amort includes amortisation of non-acquired intangibles 20
Slide 21: Movements in Net Debt
Movements in Net Debt Year ended 31 March 70 190 8 175 36 814 27 464 Net debt Free cash Dividends Cash from Fort Dodge Other Exchange Net debt March flow discont'd March 2010 2011 21 From the free cash flow of £190 million we paid out £70 million in dividends. That is a smaller amount than we declar
Slide 22: Balance Sheet
Balance Sheet As at 31 March £m, unless stated 2011 2010 Goodwill, intangibles and fixed assets 1,199 1,569 Inventories 454 409 Trade and other receivables 292 426 Trade and other payables (407) (486) Other, including provisions (137) (286) Net operating assets 1,401 1,632 Less: Pension and disconti
Slide 23: Pensions
Pensions Constant 31 March 31 March £m, unless stated Exchange currency 2010 2011 movements Net asset / (liability) UK 5 - 91 96 US (154) 9 11 (134) Other (7) 1 2 (4) Subtotal (156) 10 104 (42) US healthcare (101) 6 (2) (97) Total (257) 16 102 (139) 23 Before I leave the Balance Sheet, I’d like to c
Slide 24: Summary of Financial Position
Summary of Financial Position Adjusted operating Adjusted diluted Net Debt profit EPS 350 50 1300 +43% +17% +34% 40 900 300 1,231 45.7 321 30 500 814 33.7 464 268 250 20 100 2011 2010 2009 Note: Adjusted operating profit and Net debt are shown in £m and Adjusted diluted EPS shown at pence/share. 24
Slide 25: Outlook
Outlook Javed Ahmed, Chief Executive Thanks Tim.
Slide 26: Outlook
Outlook For the year ending 31 March 2012 Speciality Food Ingredients • Current demand patterns expected to continue and expect a year of good sales growth • Lower sucralose manufacturing costs now reflected in performance of this division • Level of profit growth expected to be more modest than tha
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