Tate + Lyle: Full Year Results Announcement

London / UK. (tl) Tate + Lyle PLC, a leading global provider of speciality food ingredients and solutions, announced its financial results for the full year, ended 31 March 2015. Chief Executive Javed Ahmed: «It has been a very challenging year for the Group, but with the necessary actions underway we are firmly focused on improving our performance and continuing the evolution of Tate + Lyle into a global Speciality Food Ingredients business supported by cash generated from Bulk Ingredients. The fundamentals of our Speciality Food Ingredients business and demand for our products remain strong. We have a portfolio of products with leading market positions, an expanding global footprint, and a steady flow of new products focused on major consumer trends, particularly in the health and wellness space; our Speciality Food Ingredients business is well-positioned for the future». Key Points:

  • Group adjusted profit before tax in line with February guidance, 30 percent lower at 224 million GBP (2014: 322 million GBP):
    • Costs from operational and supply chain disruption of 20 million GBP
    • «Splenda» Sucralose adjusted operating profit lower by 46 million GBP (43 million GBP in constant currency)
    • European Bulk Ingredients adjusted operating profit lower by 17 million GBP
  • Speciality Food Ingredients adjusted operating profit 29 percent lower in constant currency at 149 million GBP (2014: 213 million GBP)
  • Bulk Ingredients adjusted operating profit 19 percent lower in constant currency at 133 million GBP (2014: 172 million GBP)
  • Business re-alignment announced on 21 April 2015 to further focus on and strengthen Speciality Food Ingredients:
    • Re-focus «Splenda» Sucralose on rigorous value-based strategy and consolidate production into one facility: impairment charge of 113 million GBP included in total exceptional charges of 142 million GBP (2014: 14 million GBP)
    • Re-align Eaststarch European joint venture by acquiring full ownership of the more speciality-focused plant in Slovakia and exiting the predominantly Bulk Ingredients plants in Bulgaria, Türkiye and Hungary. We will receive 240 million EUR in cash on completion of the transaction
  • Implementation of new supplementary disclosure framework to provide more detail on business performance, including new disclosure on Innovation; volume from new products nearly doubled in the year
  • Two major new product launches: «dolcia prima» Allulose and «claria» Functional Clean-label Starches
  • Speciality Food Ingredients completed two «bolt-on» acquisitions in Asia Pacific and Latin America
  • Proposed final dividend of 19.8 Pence, making a total dividend of 28.0 Pence (2014: 27.6 Pence), up 1.4 percent on prior year
  • The Board intends to maintain the total dividend payment at 28.0 Pence for the year ending 31 March 2016

Outlook

The year ahead will be one of structural change as we re-align the Eaststarch joint venture and «Splenda» Sucralose, embed changes to improve our global supply chain capabilities, and bring on line additional growth capacity for Speciality Food Ingredients. We anticipate that, in this year of change, adjusted profit before tax for the year ending 31 March 2016 will be broadly in line with the 2015 financial year on a pro-forma basis8 assuming the Eaststarch transaction completes in the summer as expected. The longer term outlook for the business remains positive. We expect the global market for speciality food ingredients to grow at mid-single digits and our objective is to grow modestly ahead of the market via organic growth supplemented by bolt-on acquisitions. We continue to target sustained cash flows from Bulk Ingredients and to dampen volatility where possible. As the mix of the Group moves towards our higher margin Speciality Food Ingredients business augmented by operational improvements, over time we expect to steadily enhance Group profit and returns on capital. The Board recognises the importance of dividends to shareholders and remains committed to the dividend policy it implemented in 2009. Underpinned by the confidence it has in the strategy of the business, the Board intends to recommend an unchanged final dividend for the year ended 31 March 2015 of 19.8 Pence to make a total for the year of 28.0 Pence, an increase of 1.4 percent. Further, the Board intends to maintain the total dividend payment at 28.0 Pence for the year ending 31 March 2016.

Tate + Lyle: Full Year Results Announcement

London / UK. (tl) Tate + Lyle PLC announced its results for the full year ended 31. March 2011. «The company performed well in the year achieving steady growth across a number of our markets», said Javed Ahmed, Chief Executive. «In Speciality Food Ingredients, we delivered strong profit growth driven by increased sales volumes across the product portfolio, improved product mix and lower sucralose manufacturing costs. In Bulk Ingredients, we experienced good volume growth from sweeteners and very strong returns from co-products due to high corn prices. The Board is proposing an increase in the final dividend reflecting its confidence in the business», Ahmed said in a statement.

Overview

(r) = reported   ::   (cc) = constant currency

Continuing operations 2011 2010 Change (r) Change (cc)
Sales 2’720 mio. GBP 2’533 mio. GBP +7% +5%
Adjusted results
– Adjusted operating profit 321 mio. GBP 268 mio. GBP +20% +17%
– Adjusted profit before tax 263 mio. GBP 196 mio. GBP +34% +32%
– Adjusted diluted earnings per share 0,457 GBP 0,337 GBP +36% +34%
Statutory results
– Operating profit / (loss) 303 mio. GBP (44 mio. GBP)
– Profit / (loss) before tax 245 mio. GBP (116 mio. GBP)
– Profit for the period (total operations) 167 mio. GBP 19 mio. GBP
– Diluted earnings per share (total operations) 0,347 GBP 0,033 GBP
Cash flow and net debt
– Free cash flow 190 mio. GBP 414 mio. GBP
– Net debt 464 mio. GBP 814 mio. GBP
Dividend per share 0,237 GBP 0,229 GBP +3,5%

Financial performance

  • Adjusted operating profit up 20 percent at 321 million GBP (17 percent in constant currency)
  • Adjusted operating profit from Speciality Food Ingredients up 26 percent (25 percent in constant currency)
  • Adjusted operating profit from Bulk Ingredients up 15 percent (eleven percent in constant currency)
  • Adjusted diluted earnings per share up 36 percent at 0,457 GBP (34 percent in constant currency)
  • Net debt down by 350 million GBP (43 percent) to 464 million GBP (40 percent before exchange translation)
  • Increase of five percent proposed for the final dividend to 0,169 GBP, making a total dividend of 0,237 GBP (2010: 0,229 GBP)

Strategic update

  • «Focus, Fix, Grow» programme remains on track:
    • Disposal of EU Sugar Refining, Molasses and Fort Dodge facility and conditional sale of Vietnam Sugar
    • Global Commercial and Food Innovation Centre in Chicago on track to be operational in early 2012
    • New global Shared Service Centre being established in Lodz, Poland; to be operational by end of 2011
  • Splenda® Sucralose facility in McIntosh, Alabama to restart production in first half of financial year 2013

Outlook

In Speciality Food Ingredients, Tate + Lyle expects the current steady demand patterns to continue and anticipate a year of good sales growth. The lower sucralose manufacturing costs are now reflected in the performance of this division and, accordingly, the level of profit growth in the coming financial year is expected to be more modest than the strong result achieved in financial year 2011. In Bulk Ingredients, the company expects sweetener margins to remain flat calendar year on year with volumes slightly down as it diversifies some grind to Speciality Food Ingredients. Elsewhere, industrial starches are expected to perform better, particularly in Europe, but not sufficiently to offset more normal co-product returns. Given the Group´s strong cash generation and reduction in net debt, interest costs are expected to decrease. Overall, with a more focused business, a stronger balance sheet and a continuation of the steps Tate + Lyle is taking to focus, fix and grow its business, the company expects to deliver another year of profitable growth.