Tate & Lyle PLC · LSE:TATE
Tate & Lyle — H1 FY2018 Earnings Presentation
24 slides from Tate & Lyle's earnings presentation, November 2017
Slide 1: Results for the Six Months to 30 September 2017
RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2017
Slide 2: Cautionary Statement
Cautionary Statement This presentation of Half Year Results for the six months to 30 September 2017 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 and uncertainty
Slide 3: Agenda
Agenda Overview Javed Ahmed Financial Review and Outlook Nick Hampton Business Update Javed Ahmed 3
Slide 4: Overview
Overview • Strong start to the year • Broad based volume growth in core Speciality Food Ingredients • Excellent performance from Bulk Ingredients • Earnings per share progression • Strong cash generation • Interim dividend increase 44
Slide 5: On track to deliver against priorities coming into the 2018 financial year
On track to deliver against priorities coming into the 2018 financial year Grow Speciality Food Ingredients +3% volume growth Volume momentum in SFI North America +1% volume growth Improve performance in Food Systems +13% profit growth1 Steady earnings from core Bulk Ingredients +16% profit growth1
Slide 6: Financial Review and Outlook
FINANCIAL REVIEW AND OUTLOOK NICK HAMPTON CHIEF FINANCIAL OFFICER 6
Slide 7: Financial Highlights
Financial Highlights Half Year ended 30 September 2017 Sales Adjusted profit before tax Adjusted diluted EPS £1.4bn £169m 27.6p In line* +13%* +6%* Adjusted free cash flow Net Debt Interim dividend £151m £371m 8.4p +£13m £81m lower than at 31 March +0.2p Adjusted results and a number of other terms
Slide 8: Adjusted Profit Before Tax
Adjusted Profit Before Tax Half Year ended 30 September 2017 +£13m +£11m £169m +£10m £(7)m £(2)m £158m +£4m £140m H1 FY17 Adj Speciality Food Core Bulk Commodities Joint Ventures Interest / H1 FY18 Adj FX H1 FY18 Adj PBT Ingredients Ingredients Central costs PBT PBT Constant Currency See description
Slide 9: Speciality Food Ingredients
Speciality Food Ingredients Half Year ended 30 September 2017 Total volume Sales Good growth across the business • +3% volume growth in core business +3% £509m ‒ North America +1% ‒ Asia Pacific and Latin America +6% ‒ Europe, Middle East and Africa +8% (2%)* • +3%* profit growth in core business ‒
Slide 10: Bulk Ingredients
Bulk Ingredients Half Year ended 30 September 2017 North American Bulk Strong H1 Performance Total volume Sweetener volume • +2% volume growth ‒ Robust demand +2% +2% • Core business profit +16%* ‒ Commercial execution ‒ Product line and customer focus Adjusted operating profit Adjusted operating pr
Slide 11: Strong free cash flow generation
Strong free cash flow generation Adjusted free cash flow For the half year ended 30 September Net debt £151m £452m £138m £92m £371m H1 FY16 H1 FY17 H1 FY18 31 March 30 September 2017 2017 See descriptions of adjusted results in Note 2 of Statement of Half Year Results for half year ended 30 Septembe
Slide 12: Summary and Outlook
Summary and Outlook • Volume momentum, 13%1 higher profit, and cash generation • Robust balance sheet Strong H1 performance • 6%2 earnings per share growth despite 5ppts3 higher tax rate • Interim dividend increased to 8.4p • Adjusted effective tax charge in upper end of 21% ‒ 24% guided range Expec
Slide 13: Business Update
BUSINESS UPDATE JAVED AHMED CHIEF EXECUTIVE 13
Slide 14: Clear and focused business proposition
Clear and focused business proposition Speciality Food ingredients Bulk Ingredients Growing steadily over time Manage for steadier earnings and cash flow Attractive, growing end-markets Large, mature end-markets Strong organic capability, supplemented by M&A Strong market positions High quality Oper
Slide 15: Speciality Food Ingredients: Key areas of focus
Speciality Food Ingredients Key areas of focus North America Emerging Markets New Products 15
Slide 16: Speciality Food Ingredients: North America
Speciality Food Ingredients: North America Grow share with larger customers Volume US Food Tate & Lyle growth and Beverage Core SFI market North America 1 FY17 0% -3% Penetrate faster growing channels 2 H1 FY18 -0.4% +1% Target higher growth sub-categories 1 IRI US Multi Outlet + Convenience stores
Slide 17: Speciality Food Ingredients: Emerging Markets
Speciality Food Ingredients: Emerging Markets Building high quality business Delivering local customer solutions • New applications lab in Mexico City Local presence Local expertise Local solutions • Lab expansions in Singapore and Shanghai • Further strengthening technical capabilities • New fibre
Slide 18: New Products: Continued momentum
New Products Continued momentum Sales (US $m) Examples of new products • Good growth in sweeteners 105 ‒ PUREFRUIT® and TASTEVA® +14% • Strong growth in texturants ‒ Increasing demand for CLARIA® 58 ‒ Non-GMO starches • High level of customer interest in 18 expanded stevia-based product offering FY1
Slide 19: Speciality Food Ingredients: Food Systems and Sucralose
Speciality Food Ingredients Food Systems and Sucralose Food Systems Sucralose • Rebuilding European business • Value-based strategy • Progress in emerging markets • Driving manufacturing efficiencies • Improving profit performance • Pricing relatively firm 19
Slide 20: Bulk Ingredients: Re-shaped, focused business
Bulk Ingredients Re-shaped, focused business Bulk Ingredients • Operates in large, mature markets Core business Commodities • Reshaped to focus predominantly on North America ‒ Reduced exposure to regulated markets • Scale and efficient assets • Bulk Sweeteners • Co-products • Strong market position
Slide 21: Bulk Ingredients: Industry/market dynamics relatively stable
Bulk Ingredients Industry/market dynamics relatively stable • US corn wet milling industry remains well-balanced • US corn harvest progressing well ‒ Expect continued low/stable corn prices • Relatively stable commodities environment • NAFTA negotiations ongoing 21
Slide 22: Bulk Ingredients: Driving performance
Bulk Ingredients Driving performance Product Line Commercial Customer Continuous Focus Execution Service Improvement End-markets/categories Product mix Supply chain execution Operational efficiencies Contract management Margin management Technical expertise Investments Refined operating model to del
Slide 23: Summary
Summary • Both businesses performing well Strong start • Good commercial and operational execution to the year • Robust balance sheet, strong cash flow, increase in dividend • Grow Speciality Food Ingredients, including ‒ North America volume Key priorities ‒ Emerging markets and new products for 20
Slide 24: Questions
QUESTIONS 24 24