REG - Tate & Lyle PLC - Final Results
25/05/2023 07:00
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RNS Number : 5792A Tate & Lyle PLC 25 May 2023
TATE & LYLE PLC
Results for the year ended 31 March 2023
Strong financial performance and significant strategic progress
Adjusted performance(1) Statutory performance(2)
2023 vs 2022 2023 vs 2022
Revenue growth 18% Revenue £1,751m 27%
Food & Beverage Solutions 19% Food & Beverage Solutions £1,438m 29%
Sucralose 2% Sucralose £184m 13%
EBITDA £320m 22% Primary Products Europe £129m 28%
Food & Beverage Solutions £271m 21%
Sucralose £58m (5)%
EBITDA margin 18.3% 60bps
Share of profit of Primient £24m (64)%
Profit before tax £253m 13% Operating profit £196m >100%
Earnings per share(3) 49.3p 10% Profit before tax £152m >100%
Free cash flow £119m £47m Diluted earnings per share 30.8p >100%
Full-year highlights
Group: Strong financial performance across all key measures
· Revenue growth +18%: +19% in Food & Beverage Solutions (FBS)
· Adjusted EBITDA +22%: inflation offset by mix management, pricing,
productivity savings and cost discipline
· Adjusted profit before tax +13%: strong FBS performance and materially
lower profits from Primient
· Return on capital employed of 17.5%, improved by 100 bps
· Free cash flow(1) £119m, £47m higher reflecting strong cash
conversion
· Strong balance sheet supports investment in growth, net debt to EBITDA
ratio 0.7x
· Recommending increase in final dividend of 2.5% to 13.1p per share;
full-year dividend of 18.5p per share
Science: Innovation continues to deliver with investment accelerating to
support future growth
· New Product revenue growth +17% with strong growth in mouthfeel and
fortification platforms
· New Product revenue as a percentage of Food & Beverage Solutions
revenue at 17%
· Investment in innovation and solutions selling increased by 11%
Solutions: Building deeper solutions-based relationships with customers
· Solutions new business wins by value up 2ppts to 18% of pipeline
· Strengthened solutions offering with acquisitions of Quantum (dietary
fibre) and Nutriati (chickpea protein)
· Expanded consumer and category insights expertise in North America,
Asia and Latin America
Society: Good progress on purpose and sustainability targets
· 6% reduction in Scope 1 & 2 GHG emissions and 13% in Scope 3
emissions(4); 92% of waste beneficially used
· Sustainable agriculture programmes for corn and stevia delivering
material environmental improvements
· Target to provide 3 million(4) meals through food bank partnerships
met two years ahead of schedule
---------------------------------------------------------------------------------------
1. Revenue growth, adjusted EBITDA and adjusted EBITDA margin, share of
adjusted profit of Primient, adjusted earnings per share, free cash flow,
return on capital employed (ROCE), net debt and net debt to EBITDA are
non-GAAP measures (see pages 8 to 11). Changes in adjusted performance metrics
are in constant currency and for continuing operations. Comparatives for
adjusted performance are pro-forma financial information (see Additional
Information)
2. Continuing operations.
3. Adjusted EPS calculated using the shares in issue adjusted for impact of
the 6 for 7 share consolidation as if it occurred on 1 April 2021.
4. From baseline of 31 December 2019 for GHG emissions; baseline of 31 March
2020 for meal donations
Nick Hampton, Chief Executive said:
"It has been an excellent first year for the new Tate & Lyle with strong
financial performance and significant strategic progress.
Our key financial measures were all met, with Group revenue and adjusted
EBITDA showing double-digit growth and productivity savings well ahead of
target. It's also been another year of strategic progress as we further
improved the mix of the business, greatly strengthened our solution selling
capabilities, acquired a high-quality dietary fibre business in China, made a
commitment to reach net zero by 2050 and launched our new brand to better
reflect the new Tate & Lyle.
Tate & Lyle's expertise in sweetening, mouthfeel and fortification plays
directly into increasing consumer demand for food and drink which is healthy,
tasty, convenient, and more sustainable and affordable. The growth opportunity
ahead is substantial and we saw encouraging progress in the year with revenue
from New Products and solutions wins both demonstrating good momentum.
The re-positioning of Tate & Lyle continues at pace. With our clear
strategic focus and strong scientific and solutions capabilities, we are
well-placed to progress our strategy and deliver on the five-year financial
growth ambition announced in our Capital Markets Event in February 2023."
Outlook
For the year ending 31 March 2024, we expect to deliver progress in line with
our five-year ambition to 31 March 2028 with, in constant currency:
· Revenue growth of 4% to 6%
· Adjusted EBITDA growth of 7% to 9%.
We also expect stronger profits from our minority holding in Primient.
Overview
New Tate & Lyle
Tate & Lyle is a growth-focused speciality food and beverage solutions
business with a strong sense of purpose and clear strategic focus.
· Global leader in sweetening, mouthfeel and fortification, creating
solutions for our customers to meet growing consumer trends for healthier food
and drink.
· Science-driven business, with an established record of innovation and
scientific expertise.
· Well-balanced and global business with a strong presence in developed
markets and a platform for accelerated growth in the large markets of Asia,
Middle East, Africa and Latin America.
· Strong balance sheet providing flexibility to invest for growth, and an
experienced management team with a track record of delivery.
Tate & Lyle has been re-positioned to be at the centre of the future of
food, operating in segments of the market which are seeing significant growth.
This supports our five-year financial ambition to 31 March 2028, to deliver:
· Revenue growth of 4% to 6% each year
· Adjusted EBITDA growth of 7% to 9% each year
· Improved return on capital employed by up to 50 basis points on
average each year
· US$100m of productivity savings.
We also have the potential to further accelerate growth through partnerships
and M&A.
Delivering our growth-focused strategy
To expand our portfolio, accelerate innovation, increasingly provide solutions
for our customers and deliver on our purpose and sustainability programme,
during the year:
· We acquired two businesses for a combined purchase price of £192m.
Quantum Hi-Tech, a leading prebiotic FOS and GOS dietary fibre business in
China, and Nutriati, a small ingredient technology business developing and
producing chickpea protein and flour. Both businesses are performing as
expected.
· We executed targeted programmes to develop new ways of working with
customers to build stronger solutions-based partnerships, leading to solutions
new business wins by value increasing to 18%.
· We expanded our global network of Customer Innovation and Collaboration
Centres, opening a new Centre in Santiago, Chile and extending our Centre in
Singapore.
· We expanded our patent portfolio with over 70 patents granted, with a
further c.300 pending.
· We expanded our sustainable agriculture programme for stevia in China
delivering 55% reduction in greenhouse gas emissions on participating farms,
while increasing crop yields.
· We are increasingly making sustainability part of our customer offering.
For example, we developed a more sustainable manufacturing process for our
CLARIA(®) clean-label starches which results in a 34% reduction in greenhouse
gas emissions and a 35% reduction in water use.
Maintaining strong financial discipline
To support growth in our business, we continue to focus on improving cash
conversion, and delivered free cash flow £47 million higher at £119 million.
We were disciplined in the use of capital investment for growth,
productivity and sustainability, with return on capital employed increasing by
100bps to 17.5%. At 31 March 2023, net debt was £238 million, and net debt
to EBITDA was 0.7x, with liquidity of over £1.1bn. Total dividends paid to
shareholders in the 2023 financial year were £570 million including a special
dividend of £497 million from the proceeds of the Primient disposal.
Productivity remains a key focus, driving efficiencies in our business. We
delivered productivity of US$21 million, more than double the target at the
beginning of the 2023 financial year. Looking ahead, our target is to
deliver US$100 million productivity savings in the five years ending 31 March
2028 enabled by systems investment. The cost to deliver this programme is
expected to be in the range of US$80 million to US$100 million.
Group performance
Revenue Volume Price/mix M&A Revenue change Adjusted EBITDA
Full-year Change(1)
£1,751m (11)% 27% 1% 18% £320m 22%
1 Comparative pro-forma financial information (see Additional Information)
Overview
The Group delivered strong financial performance. Revenue was up 18%
reflecting the pricing through of inflation and good mix management,
delivering higher margin business in a period of capacity constraint.
Adjusted EBITDA was 22% higher and adjusted profit before tax was 13% higher
reflecting strong performance from Tate & Lyle and weaker performance from
our minority holding in the Primient joint venture. Food & Beverage
Solutions, our growth driver, performed particularly well delivering strong
revenue and adjusted EBITDA growth. Sucralose once again delivered
attractive returns with profits slightly lower. We continued to optimise the
Primary Products Europe business with losses reducing significantly in the
year.
We continued to intentionally reset Tate & Lyle as a growth-focused
speciality business through the focus on revenue growth and margin expansion,
ahead of volume growth, by way of solution selling, mix management and
pricing. We expect to continue to follow this approach in the coming year
and to enhance the quality of the business in line with our long-term
financial ambition.
Primient had a difficult year primarily due to operational challenges. While
underlying demand for Primient's products remained robust, this and increased
finance charges limited adjusted share of joint venture profit to £24m, 64%
lower. The operational challenges are being addressed, and the 2023 calendar
year pricing round returned unit margins to more normal levels in the final
quarter of the financial year. Reflecting this, we expect stronger profits
from Primient in the 2024 financial year. Tate & Lyle received US$76
million in cash dividends from Primient in the year.
Managing input cost inflation
The war in Ukraine caused significant inflation in raw material, energy and
logistics costs, especially in Europe. To recover these incremental input
costs, in May 2022 we implemented a programme of supplementary price increases
across our main markets. Later in the year, we renewed customer contracts for
the 2023 calendar year, again recovering higher input costs. We built
flexibility into these contracts to address possible further input cost
volatility and added variable pricing frameworks to meet customer
requirements. These pricing actions, together with mix management,
productivity savings and strong cost discipline, enabled us to offset input
cost inflation. With the war in Ukraine continuing, we remain vigilant of
possible further supply chain volatility.
Full-Year review: Reporting segments
Food & Beverage Solutions
82% of Group revenue and 85% of Group adjusted EBITDA
Revenue Volume Price/mix M&A Revenue Adjusted EBITDA
Change(1)
Full-year Change(1,2)
North America £687m (4)% 16% -% 12% - -
Asia, Middle East, Africa and Latin America £432m (4)% 26% 3% 25% - -
Europe £319m (15)% 42% 1% 28% - -
Total £1,438m (7)% 25% 1% 19% £271m 21%
1 Growth in constant currency. 2 Comparative pro-forma financial
information (see Additional Information).
Revenue was 19% higher in constant currency at £1,438 million. Our focus
was on delivering revenue growth and margin expansion through solution
selling, mix management and pricing. Volume was 7% lower, reflecting this
approach and the impact of two further factors. Firstly, one-off factors
including supply chain disruption, the exit of low margin business and the
impact of industrial action in The Netherlands in the first half. Secondly,
some demand softness and customer destocking in the fourth quarter.
We delivered strong price/mix leverage of 25ppts with equal weighting of mix
management and the pass-through of input costs inflation (including higher
corn costs). Acquisitions contributed 1ppt of revenue growth.
All regions saw double-digit revenue growth reflecting the benefit from pass
through of inflation, strong mix management and lower volume.
· North America: While input cost inflation was more moderate in North
America, revenue was 12% higher. We saw good gains in the beverage,
confectionery, and soup, sauces and dressings categories, particularly with
our largest customers. Despite consumer trends for healthier, better tasting
food remaining strong, we saw some customer demand softness from supply chain
inventory management in the final quarter of the financial year.
· Asia, Middle East, Africa and Latin America: Revenue was 25% higher.
In Asia, revenue growth was strong across all sub-regions. Good mix
management contributed to strong growth in Southeast Asia and China, with the
acquisition of Quantum contributing to revenue growth. In the final quarter,
consumer demand in China was somewhat slower to recover than expected
following the easing of Covid controls. In Latin America, all sub-regions
saw revenue growth. We saw good progress in sweetener solutions, especially in
Mexico driven largely by customer desire to address front-of-pack labelling
regulations, and growth in the bakery and snacks, and soups, sauces and
dressings categories. In Middle East and Africa, demand for mouthfeel and
fortification solutions drove strong revenue growth.
· Europe: Revenue was 28% higher reflecting the pricing through of
significant input cost inflation. Lower volume reflected our pricing and
margin focus, the exit from low-margin sweetener business, and the impact of
supply chain challenges especially from industrial action at our corn wet mill
in The Netherlands. We saw good revenue growth across all categories,
especially in soups, sauces and dressings. As the year progressed and
pricing in Europe increased, we saw increased competition from imports from
outside the region.
To recover incremental input costs, we implemented a programme of
supplementary price increases. Then, customer contracts were successfully
renewed for the 2023 calendar year recovering further higher input costs. In
renewing these contracts, we applied our approach of focusing on revenue
growth and margin expansion.
Adjusted EBITDA was up 21% in constant currency at £271 million benefiting
from mix management, a transparent approach with customers to the pricing
through of input cost inflation, and operational leverage. This, together
with the benefit from productivity, saw adjusted EBITDA margins expand by
40bps in constant currency. The effect of currency translation increased
adjusted EBITDA by £28 million.
Innovation and solutions
Investment New Product revenue Solutions
Innovation and solution selling Value Growth % of FBS revenue(1) % of new business wins
11% £239m 17% 17% 18%
1 From 1 April 2022 New Products includes stabiliser and functional systems
new ingredients. Excluding this change, New Products are 16% of FBS revenue
Revenue from New Products was 17% higher. The mouthfeel platform grew
strongly, reflecting good demand for clean label starches and cost
optimisation, while Quantum helped to accelerate growth in fortification and
in New Products revenue overall. On a like-for-like basis, which assumes the
same ingredients are included in New Products revenues in both the current and
comparative periods (i.e. no products are removed from New Product disclosure
due to age), New Products revenue was 20% higher.
Investment in innovation and customer-facing solution selling capabilities
including sensory, nutrition and regulatory, was 11% higher. Targeted
programmes to develop new ways of working with customers and build stronger
solutions-based partnerships helped increase solutions new business wins by
value to 18%. We have set an ambition to increase this to 32% over the five
years to 31 March 2028.
Sucralose
11% of Group revenue and 18% of Group adjusted EBITDA
Revenue Volume Price/mix M&A Revenue change(1) Adjusted EBITDA
Full-year Change(1,2)
£184m (4)% 6% -% 2% £58m (5)%
1 Growth in constant currency. 2 Comparative pro-forma financial
information (see Additional Information).
Sucralose delivered attractive returns with revenue slightly higher and
adjusted EBITDA slightly lower than the prior year. Cost inflation across a
range of inputs increased production costs at our single facility in McIntosh,
Alabama, US. While the existence of multi-year contracts with our larger
customers limited our near-term ability to recover higher input costs, this
impact was mitigated by customer mix management. Currency translation
increased adjusted EBITDA by £8 million.
Primary Products Europe
7% of Group revenue and (3%) of Group adjusted EBITDA
Revenue Volume Price/mix M&A Revenue change(1) Adjusted EBITDA
Full-year Change(1,2)
£129m (19)% 44% -% 25% £(9)m +57%
1 Growth in constant currency. 2 Comparative pro-forma financial
information (see Additional Information).
We continue to optimise the financial performance of Primary Products Europe
as we transition capacity to higher margin Food & Beverage Solutions
ingredients. Revenue was significantly higher reflecting improved pricing
from more favourable market conditions and the recovery of input cost
inflation. Lower volume reflected both the impact of industrial action at
our facility in The Netherlands in the first half and the transition of
capacity to speciality ingredients. Higher revenue delivered significantly
lower adjusted EBITDA losses.
Webcast details
Following this statement's release on 25 May 2023 at 07.00am (UK time), a live
webcast will be held at 10.00am via
https://event.on24.com/wcc/r/4219130/62E4A9DE5070EE426DB680898784688E
(https://event.on24.com/wcc/r/4219130/62E4A9DE5070EE426DB680898784688E) . A
replay of the webcast and presentation will be made available afterwards at
https://tateandlyle-events.com/year-ended-2023
(https://tateandlyle-events.com/year-ended-2023) . Only sell-side analysts
and any pre-registered buy-side investors will be able to ask questions during
the Q&A session. Sell-side analysts will be automatically
pre-registered. To pre-register, please contact Lucy Huang
at lucy.huang@tateandlyle.com (mailto:lucy.huang@tateandlyle.com) .
Commentary on the financial statements - Full Year
Year ended 31 March 2023 Pro forma(1) Constant
currency
Continuing operations £m 2022 change
%
£m
Adjusted EBITDA 320 233 22%
Depreciation and adjusted amortisation (71) (70) (7%)
Adjusted operating profit(2)
Food & Beverage Solutions 214 145 31%
Sucralose 46 42 (6%)
Primary Products Europe (11) (24) 55%
Adjusted operating profit 249 163 35%
Net finance expense (20) (25) 29%
Adjusted share of profit of Primient joint venture 24 61 (64%)
Adjusted profit before tax 253 199 13%
1. Comparatives are pro-forma financial information (see Additional
Information).
2. Pro-forma adjusted operating profit for the year ended 31 March 2022,
previously reported as Food & Beverage Solutions £153 million, Sucralose
£61 million and Central (costs) £(51) million. Primary Products Europe
operating loss of £(21) million has been separated from Food & Beverage
Solutions, and Central (costs) have been allocated as follows £(29) million
to Food & Beverage Solutions, £(19) million to Sucralose and £(3)
million to Primary Products Europe.
Net finance expense and liquidity
Net finance expense at £20 million was 29% lower in constant currency, mainly
reflecting higher net income on the Group's cash balances. Because
approximately 90% of the Group's borrowings in the year were at fixed rates of
interest, the Group was not exposed to significant changes in interest rates
on its borrowings.
Exceptional items
Net exceptional charges of £28 million were included in profit before tax.
Exceptional cash outflows for the year totaled £59 million, comprising £24
million of cash outflows related to charges in the current year and
£35 million of cash outflows resulting from prior year exceptional costs.
(For more information see Note 5).
Adjusted share of profit of Primient joint venture
Year ended 31 March 2023 Pro-forma Constant
currency
£m 2022 change
%
£m
Adjusted operating profit 100 135 (33%)
Net finance expense (80) (48) (47%)
Adjusted share of profit from its own joint ventures after tax 35 35 (13%)
Adjusted profit before tax 55 122 (59%)
Adjusted share of profit of Primient joint venture 24 61 (64%)
Adjusted operating profit was 33% lower in constant currency at £100 million
reflecting operational disruption in Primient's plants. The operational
challenges which impacted the 2023 financial year are being addressed, and the
2023 calendar year pricing round returned unit margins to more normal levels
in the final quarter of the financial year. Reflecting this, we expect
stronger operating profits from Primient in the 2024 financial year. Net
finance expense increased significantly reflecting higher US interest rates.
The Primient joint venture was set up under a US partnership arrangement.
Under this arrangement, the partnership does not pay tax on its US income as
the partners are responsible for this tax. Primient however, pays tax on
income earned by its Brazilian subsidiary.
Tate & Lyle received US$76 million in cash dividends from Primient. Of
this amount, US$30 million represented a distribution in respect of the 2023
financial year, US$31 million related to the distribution of a dividend from a
former joint venture announced prior to disposal, and US$15 million allowed
Tate & Lyle to settle tax obligations on Primient profits.
Taxation
The adjusted effective tax rate on continuing operations was 19.9% (2022 -
19.3%). The slightly higher rate reflects higher profits, with more profit
taxed in higher rate jurisdictions, and the inclusion of the minority interest
in the Primient joint venture. Looking ahead, we expect the adjusted
effective tax rate for the year ending
31 March 2024 to increase by one to two percentage points reflecting the
increase in the rate of UK corporation tax from 19% to 25%, and stronger
profits in Primient.
The reported effective tax rate (on statutory earnings) for continuing
operations was 16.8% (2022 - 38.4%). The lower effective tax rate is due to
the prior year being impacted by a £12 million exceptional tax charge on the
de-recognition of deferred tax assets as a result of the Primient transaction.
Earnings per share
Adjusted earnings per share at 49.3p were 10% higher (in constant currency,
pro-forma comparative information for continuing operations only), reflecting
strong performance from Tate & Lyle and weaker performance from our
minority holding in the Primient joint venture. Statutory diluted earnings
per share for continuing operations increased significantly to 30.8p,
reflecting in the current year strong operational performance and the
inclusion of a share of profits from our minority interest in the Primient
joint venture, and in the prior year higher exceptional costs related to the
Primient transaction.
Dividend
The Board is recommending a 0.3p or 2.5% increase in the final dividend to
13.1p (2022 - 12.8p) per share. In the previous year, the final dividend was
re-based to reflect the Primient transaction and the associated share
consolidation, while the interim dividend was paid at a higher rate (before
re-basing). Reflecting this the full year dividend of 18.5p per share is
lower than the prior year amount of 21.8p (18.1p rebased for reduced earnings
base following the Primient transaction and impact of the share
consolidation). Subject to shareholder approval, the proposed final dividend
will be due and payable on 2 August 2023 to all shareholders on the Register
of Members on 23 June 2023. In addition to the cash dividend option,
shareholders will continue to be offered a Dividend Reinvestment Plan (DRIP)
alternative.
Within the context of its growth-focused strategy the Board operates a
progressive dividend policy with the overall aim of balancing growing the
dividend with further strengthening dividend earnings and cash cover over the
medium term. As announced in our Capital Markets Event in February 2023, the
Board intends for interim dividends in future to be paid at the level of one
third of the previous year's full year dividend.
Cash flow, net debt and liquidity
Free cash flow was £119 million (2022 continuing operations - £72 million),
an increase of £47 million, benefiting from higher profits. Despite
significant activities to optimise working capital, input cost inflation drove
working capital £37 million higher. Capital expenditure of £78 million (on
a gross basis) was £3 million higher in the year. Overall, a strong focus
on working capital delivered cash conversion at 62%(1).
Looking ahead, capital expenditure for the year ending 31 March 2024 is
expected to be in the £90 million to £100 million range.
Net debt at 31 March 2023 was £238 million, £388 million lower than at the
prior year end. Significant cash flows in the year included the receipt of
gross cash proceeds of £1.1 billion from the disposal of a controlling stake
in Primient and the subsequently returned £497 million to shareholders by way
of a special dividend. Net debt was further reduced by the receipt of
dividends from Primient of £66 million (US$76 million). This reduction in
net debt from these items was partially offset by the investment to acquire
two businesses for £192 million (net) and further dividend payments to
shareholders of £73 million.
At 31 March 2023, the Group had access to £1.1 billion of available liquidity
through readily available cash and cash equivalents and access to a committed,
undrawn revolving credit facility of US$800 million (£647 million). Reported
leverage at 31 March 2023 was 0.7 times net debt to EBITDA. On a covenant
testing basis, the net debt to EBITDA ratio was 0.6 times, which was much
lower than the covenant threshold of 3.5 times. In April 2023, to reduce
interest costs and in line with on-going balance sheet optimisation, the Group
repaid a US private placement debt floating rate note of US$95 million ahead
of its maturity using cash.
1 Free cash conversion calculated as: free cash flow before capital
expenditure divided by adjusted EBITDA
Non-GAAP measures
Some performance discussion and narrative in this announcement includes
measures which are not defined by generally accepted accounting principles
(GAAP) such as IFRS. The Group believes this information, together with
comparable GAAP measures, is useful to investors in providing a basis for
measuring our operating performance, cash generation and financial strength.
The Group uses these alternative performance measures for internal
performance analysis and incentive compensation arrangements for employees.
These measures are not defined terms and may therefore not be comparable
with similarly-titled measures reported by other companies. Wherever
appropriate and practical, reconciliations are provided to relevant GAAP
measures.
The Group uses constant currency percentages and movements, using constant
exchange rates which exclude the impact of fluctuations in foreign currency
exchange rates. We calculate constant currency values by retranslating
current year results at prior year exchange rates into British Pounds. The
average and closing US dollar and Euro exchange rates used to translate
reported results were as follows:
Average rates Closing rates
Year ended 31 March 2023 2022 2023 2022
US dollar : sterling 1.20 1.37 1.24 1.32
Euro : sterling 1.16 1.18 1.14 1.19
Items adjusted in alternative performance income statement measures
(Adjustment items)
Several alternative performance measures are adjusted to exclude items due to
their size, nature and / or frequency of occurrence.
1. Adjusted items excluded from earnings before interest, tax, depreciation
and amortisation (adjusted EBITDA) are: exceptional items (as they are
material in amount; and are outside the normal course of business or relate to
events which do not frequently recur), amortisation of acquired intangible
assets and the unwind of fair value adjustments.
2. Additional adjusted items excluded from adjusted profit after tax are:
tax on the above items and tax items that themselves are exceptional as they
meet these definitions. For tax items to be treated as exceptional, amounts
must be material and their treatment as exceptional enable a better
understanding of the Group's underlying financial performance. Included in
adjusted profit after tax is the adjusted share of profit of Primient (the
Group's non-controlling joint venture interest, where the results of Primient
have been adjusted for items meeting the Group's definitions herein).
3. Items excluded from discontinued operations for the year ended 31 March
2022 are: IFRS 5 held for sale accounting consisting of 1) cessation of
depreciation and amortisation of assets of the Primient business; and, 2)
cessation of equity accounting of the share of profits and dividends received
from the Group's existing joint venture interests.
Income statement measures
Adjusted revenue change
Adjusted revenue growth refers to the change in revenue for the period, in
constant currency. This is analysed between the drivers of revenue growth
attributable to:
1. Volume - this means, for the applicable period, the change in revenue in
the period attributable to volume.
2. Price/Mix - this means, for the applicable period, the change in revenue
in such period calculated as the sum of i) the change in revenue attributable
to changes in prices during the period; and ii) the change in revenue
attributable to the composition of revenue in the period.
3. Acquisitions - this means changes in revenue resulting from acquisitions.
Adjusted EBITDA
Adjusted EBITDA is used as the Group's primary profit measure for internal
performance analysis. Adjusted EBITDA is calculated as follows:
Continuing operations 2023 2022
£m £m
Operating profit 196 67
Depreciation 59 56
Amortisation 36 24
Exceptional items 28 93
Unwind of fair value adjustments 1 -
Adjusted EBITDA 320 240
Pro-forma impact of long-term agreements(1) - (7)
Pro-forma adjusted EBITDA 320 233
Revenue 1 751 1 375
Adjusted EBITDA margin 18.3% 17.0%
1 See Additional Information
Adjusted earnings per share
Adjusted earnings per share (adjusted EPS) is calculated as the adjusted
profit for continuing operations attributable to shareholders' equity divided
by the diluted average number of ordinary shares. In calculating adjusted
profit attributable to shareholders' equity, net profit attributable to
shareholders' equity is adjusted to eliminate the post-tax impact of all
excluded adjustment items. Refer to note 8 for reconciliation of net profit
attributable to shareholders' equity to adjusted profit attributable to
shareholders equity.
Change in adjusted earnings per share is shown in constant currency.
Cash flow measure
The Group also presents an alternative cash flow measure, 'free cash flow'
which is defined as cash generated from operating activities after net capital
expenditure, net interest and tax payments, and excludes the impact of
exceptional items, tax payments on behalf of Primient and the impact of
acquisitions and disposals.
The reconciliation of net cash flow from operating activities to free cash
flow is as follows:
Continuing operations 2023 2022
£m £m
Net cash flow from operating activities 66 88
Capital expenditure (net)(1) (71) (75)
Tax paid in respect of Primient partnership 5 -
Exceptional cash flows(2) 101 58
Interest received 11 1
Free cash flow attributable to discontinued operations 7 -
Free cash flow 119 72
1. Gross capital expenditure of £78 million less proceeds from the sale of an
investment of £7 million
2 Includes exceptional cash flow of £59 million and tax paid of £42
million in relation to the gain on disposal of Primient.
Continuing operations 2023 2022
£m £m
Adjusted EBITDA 320 240
Adjusted for
Changes in working capital (105) (68)
Capital expenditure (net) (71) (75)
Net retirement benefit obligations (9) (7)
Net interest and tax paid (28) (32)
Share-based payment charge 20 10
Other non-cash movements (8) 4
Free cash flow from continuing operations 119 72
Financial strength measures
The Group uses three financial metrics as key performance measures to assess
its financial strength. These are net debt, the net debt to EBITDA ratio and
the return on capital employed ratio. For the purposes of KPI reporting, the
Group uses a simplified calculation of these KPIs to make them more directly
related to information in the Group's financial statements.
All ratios are calculated based on unrounded figures in £ million.
Net debt
Net debt is a measure that provides valuable additional information on the
summary presentation of the Group's net financial liabilities. Net debt is
defined as the excess of borrowings and lease liabilities over cash and cash
equivalents.
The components of the Group's net debt are as follows:
At 31 March
2023 2022
£m £m
Borrowings (659) (620)
Lease liabilities (54) (133)
Cash and cash equivalents 475 127
Net debt (238) (626)
Net debt to EBITDA ratio
The net debt to EBITDA ratio shows how well a company can cover its debts if
net debt and EBITDA are held constant.
The net debt to EBITDA ratio is as follows:
At 31 March
2023 2022(1)
£m £m
Calculation of net debt to EBITDA ratio
Net debt 238 626
Adjusted EBITDA 320 470
Net debt to EBITDA ratio (times) 0.7 1.3
1. Total operations
Return on capital employed (ROCE)
Return on capital employed (ROCE) is a measure of the return generated on
capital invested by the Group. The measure encourages compounding
reinvestment within business and discipline around acquisitions, as such it
provides a guardrail for long-term value creation. ROCE is a component of
the Group's five-year performance ambition to 31 March 2028 and is used in
incentive compensation.
ROCE is calculated as underlying operating profit excluding exceptional items
divided by the average invested operating capital (calculated as the average
for each month of goodwill, intangible assets, property, plant and equipment,
working capital, provisions and non-debt related derivatives). As such the
average invested operating capital is derived from the management balance
sheet and does not reconcile directly to the statutory balance sheet. All
elements of average invested operating capital are calculated in accordance
with IFRS.
Pro-forma*
2023 2022
At 31 March - continuing operations £m £m
Adjusted EBITDA 320 240
Deduct:
Depreciation (59) (56)
Amortisation (36) (24)
Unwind of fair value adjustments (1) -
Impact of long-term agreements - (7)
Profit before interest, tax and exceptional items for ROCE 224 153
Average invested operating capital 1 278 924
ROCE % 17.5% 16.5%
* Comparatives are based on pro-forma financial information (see Additional
Information)
Board and management
Changes to the Board of Directors
1. Paul Forman will retire as a non-executive director and as the Senior
Independent Director at the Annual General Meeting (AGM) on 27 July 2023.
2. Kimberly (Kim) Nelson becomes Senior Independent Director from the AGM
on 27 July 2023.
Changes to the Executive Committee
3. Tamsin Vine was appointed Chief Human Resources Officer with effect
from 1 December 2022.
Cautionary statement
This statement of Full-Year Results for the year ended 31 March 2023
(Statement) 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 because they
relate to events and depend upon circumstances that will occur in the future.
There are a number of factors that could cause actual results or developments
to differ materially from those expressed or implied by these forward-looking
statements and forecasts. A copy of this Statement can be found on our
website at www.tateandlyle.com. A hard copy of the Statement is also available
from the Company Secretary, Tate & Lyle PLC, 5 Marble Arch, London W1H
7EJ.
Enquiries
For more information contact Tate & Lyle PLC:
Christopher Marsh, VP Investor Relations
Tel: Mobile: +44 (0) 7796 192 688
Nick Hasell, FTI Consulting (Media)
Tel: Mobile: +44 (0) 7825 523 383
CONSOLIDATED INCOME STATEMENT
Year ended 31 March
Notes 2023 2022
£m £m
Continuing operations 1 751
Revenue 4 1 375
Operating profit 196 67
Finance income 12 1
Finance expense (32) (26)
Share of loss of joint venture (24) -
Profit before tax 152 42
Income tax expense 6 (25) (16)
Profit for the year - continuing operations 127 26
Profit for the year - discontinued operations 63 210
Profit for the year - total operations 190 236
Attributable to:
Owners of the Company 190 236
Non-controlling interests - -
Profit for the year - total operations 190 236
Earnings per share Pence Pence
Continuing operations:
- basic 8 31.3p 5.5p
- diluted 8 30.8p 5.5p
Total operations:
- basic 8 47.0p 50.7p
- diluted 8 46.2p 50.2p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 March
2023 2022
£m
£m
Profit for the year - total operations 190 236
Other comprehensive income /(expense)
Items that have been/may be reclassified to profit or loss:
Gain on currency translation of foreign operations 62 86
Fair value loss on net investment hedges (33) (52)
Fair value loss on net investment hedges transferred to the income statement 28 -
Gain on currency translation of foreign operations transferred to the income (81) -
statement on sale of a subsidiary
Fair value gain on cash flow hedges transferred to the income statement on (48) -
sale of a subsidiary
Net (loss)/gain on cash flow hedges (2) 82
Recycling of cost/(cost) of hedging 5 (5)
Share of other comprehensive (expense)/income of joint ventures (5) 10
Tax effect of the above items 6 (20)
(68) 101
Items that will not be reclassified to profit or loss:
Re-measurement of retirement benefit plans:
- actual return lower on plan assets (289) (70)
- net actuarial gain on retirement benefit obligations 295 67
Changes in the fair value of equity investments at fair value through OCI 3 (4)
Tax effect of the above items - -
9 (7)
Total other comprehensive (expense)/income (59) 94
Total comprehensive income - total operations 131 330
Analysed by:
- Continuing operations 68 9
- Discontinued operations 63 321
Total comprehensive income - total operations 131 330
All amounts are attributable to owners of the Company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March
Restated*
2023 2022
Notes £m £m
ASSETS
Non-current assets
Goodwill and other intangible assets 452 278
Property, plant and equipment (including right-of-use assets of £39 million 488 431
(2022 - £40 million))
Investments in joint venture 12 199 -
Investments in equities 42 46
Retirement benefit surplus 18 23
Deferred tax assets 13 9
Trade and other receivables 11 1
Derivative financial instruments - 3
1 223 791
Current assets
Inventories 446 317
Trade and other receivables 351 270
Current tax assets 9 11
Derivative financial instruments 3 13
Other current financial assets - 2
Cash and cash equivalents 10 475 110
1 284 723
Assets classified as held for sale - 1 737
1 284 2 460
TOTAL ASSETS 2 507 3 251
EQUITY
Capital and reserves
Share capital 117 117
Share premium 408 407
Capital redemption reserve 8 8
Other reserves 143 222
Retained earnings 513 865
Equity attributable to owners of the Company 1 189 1 619
Non-controlling interests 1 1
TOTAL EQUITY 1 190 1 620
LIABILITIES
Non-current liabilities
Borrowings (including lease liabilities of £44 million (2022 - £49 million)) 10 592 658
Retirement benefit deficit 118 130
Deferred tax liabilities 30 51
Provisions 5 12
745 851
Current liabilities
Borrowings (including lease liabilities of £10 million (2022 - £10 million)) 10 121 21
Trade and other payables 372 294
Provisions 13 11
Current tax liabilities 62 23
Derivative financial instruments 4 31
572 380
Liabilities directly associated with the assets held for sale - 400
572 780
Total liabilities 1 317 1 631
TOTAL EQUITY AND LIABILITIES 2 507 3 251
* For the reclassification of certain items between net assets classified as
held for sale and the continuing Tate & Lyle Group refer to Note 2.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 March
2023 2022
Notes £m £m
Cash flows from operating activities - total operations
Profit before tax from total operations 248 296
Adjustments for:
Depreciation of property, plant and equipment (including right-of-use assets 59 74
and excluding exceptional items)
Amortisation of intangible assets 36 26
Share-based payments 20 12
Net impact of exceptional income statement items 5 (129) 36
Net finance expense 20 28
Share of loss/(profit) of joint ventures 24 (8)
Net retirement benefit obligations (9) (7)
Other non-cash movements (7) (38)
Changes in working capital (110) (250)
Cash generated from total operations 152 169
Net income tax paid (19) (45)
Exceptional tax on gain on disposal of Primient (42) -
Interest paid (25) (21)
Net cash generated from operating activities 66 103
Cash flows from investing activities
Purchase of property, plant and equipment (70) (132)
Acquisition of businesses, net of cash acquired (192) 1
Disposal of subsidiary (net of cash) 7 1 045 -
Investments in intangible assets (8) (16)
Purchase of equity investments (3) (4)
Disposal of equity investments 10 4
Interest received 11 1
Dividends received from joint ventures 41 33
Redemption of shares held in joint venture 1 -
Net cash generated from/(used in) investing activities 835 (113)
Cash flows from financing activities
Purchase of own shares including net settlement (13) (13)
Cash inflow from additional borrowings 1 2
Cash outflow from repayment of borrowings (3) (60)
Repayment of leases (13) (32)
Dividends paid to the owners of the Company (570) (144)
Net cash used in financing activities (598) (247)
Net increase/(decrease) in cash and cash equivalents 10 303 (257)
Cash and cash equivalents
Balance at beginning of year 127 371
Net increase/(decrease) in cash and cash equivalents 303 (257)
Currency translation differences 45 13
Balance at end of year 10 475 127
A reconciliation of the movement in cash and cash equivalents to the movement
in net debt is presented in Note 10.
Included in the total cash and cash equivalents of £127 million at 31 March
2022, is £17 million classified as held for sale.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital and share premium Attributable to the owners of the Company Non- controlling interests
Capital redemption reserve
Other reserves Retained earnings Total
equity
£m £m £m £m £m £m £m
At 1 April 2021 524 8 144 777 1 453 1 1 454
Profit for the year - total operations - - - 236 236 - 236
Other comprehensive income/(expense) - - 97 (3) 94 - 94
Total comprehensive income - - 97 233 330 - 330
Hedging gains transferred to inventory - - (26) - (26) - (26)
Tax effect of the above item - - 7 - 7 - 7
Transactions with owners:
Share-based payments, net of tax - - - 12 12 - 12
Purchase of own shares including net settlement - - - (13) (13) - (13)
Dividends paid - - - (144) (144) - (144)
At 31 March 2022 524 8 222 865 1 619 1 1 620
Profit for the year - total operations - - - 190 190 - 190
Other comprehensive (expense)/income - - (65) 6 (59) - (59)
Total comprehensive (expense)/income - - (65) 196 131 - 131
Hedging gains transferred to inventory - - (19) - (19) - (19)
Tax effect of the above item - - 5 - 5 - 5
Transactions with owners:
Share-based payments, net of tax - - - 22 22 - 22
Issue of share capital 1 - - - 1 - 1
Purchase of own shares including net settlement - - - (13) (13) - (13)
Dividends paid - - - (570) (570) - (570)
Other movements - - - 13 13 - 13
At 31 March 2023 525 8 143 513 1 189 1 1 190
TATE & LYLE PLC
NOTES TO THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 MARCH 2023
1. Background
The financial information on pages 12 to 29 is extracted from the Group's
consolidated financial statements for the year ended
31 March 2023, which were approved by the Board of Directors on 24 May 2023.
The financial information does not constitute statutory accounts within the
meaning of sections 434(3) and 435(3) of the Companies Act 2006 or contain
sufficient information to comply with the disclosure requirements of
UK-adopted international accounting standards.
The Company's auditor, Ernst & Young LLP, has given an unqualified report
on the consolidated financial statements for the year ended 31 March 2023. The
auditor's report did not include reference to any matters to which the auditor
drew attention without qualifying its report and did not contain any statement
under section 498 of the Companies Act 2006. The consolidated financial
statements will be filed with the Registrar of Companies, subject to their
approval by the Company's shareholders on 27 July 2023 at the Company's Annual
General Meeting.
2. Basis of preparation
Basis of accounting
The Group's consolidated financial statements for the year ended 31 March 2023
have been prepared in accordance with UK-adopted International Accounting
Standards.
The Group's principal accounting policies are unchanged compared with the year
ended 31 March 2022. The Group's principal accounting policies have been
consistently applied throughout the year. Descriptions and specific accounting
policy information on how the Group has applied the requirements of UK-adopted
International Accounting Standards will be included in the notes to the
consolidated financial statements in the Group's 2023 Annual Report. All
amounts are rounded to the nearest million, unless otherwise indicated.
Changes in constant currency
Where year-on-year changes in constant currency are presented in this
statement, they are calculated by retranslating current year results at prior
year exchange rates. Reconciliations of the movement in constant currency have
been included in 'Additional Information' within this document.
New Accounting standards
The adoption of new amendments from 1 April 2022 had no material effect on the
Group's financial statements.
No new standards, new interpretations or amendments to standards or
interpretations have been published which are expected to have a significant
impact on the Group's financial statements.
Discontinued operations and application of Held for Sale
On 1 April 2022 the Group completed the disposal of a controlling stake in a
new company and its subsidiaries ('Primient' or the 'Primient business' or
'Primient disposal group'), comprising its Primary Products business in North
America and Latin America and its interests in the Almidones Mexicanos S.A.
de C.V. ('Almex') and DuPont Tate & Lyle Bio-Products Company, LLC
('Bio-PDO') joint ventures, to KPS Capital Partners, LP ('KPS') (the
'Transaction'). The Group currently holds a 49.7% interest in Primient,
decreased from the 49.9% interest held at completion of the Transaction due to
the redemption of a number of shares held by the Group for the return of £1
million to the Group.
In accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued
Operations', from 1 July 2021 the Group has classified the business that
became Primient on 1 April 2022 as a disposal group held for sale and a
discontinued operation. 1 July 2021 reflects the date that negotiations on
substantive matters with KPS were completed. An operation is classified as
discontinued if it is a component of the Group that: (i) has been disposed
of, or meets the criteria to be classified as held for sale; and
(ii) represents a separate major line of business or geographic area of
operations or will be disposed of as part of a single coordinated plan to
dispose of a separate major line of business or geographic area of operations.
The results of discontinued operations are presented separately from those of
continuing operations. Refer to Note 7 for further details on discontinued
operations.
Prior year restatement
Following the completion accounts exercise which took place after the
Transaction date, the balance sheet at 31 March 2022 was restated to correctly
reflect certain additional non-current assets being assigned to the Primient
disposal group held for sale (impact on non-current assets: reducing Property,
Plant and equipment by £66 million, reducing Goodwill and other intangible
assets by £5 million and increasing Assets held for sale by £71 million).
This restatement impacted the balance sheet only.
Pro-forma impact of the disposal of the Primient business
Due to the significance of the Primient disposal, the Group has also provided
pro-forma financial information in order to provide shareholders with better
comparability of the performance of the continuing operations. Refer to
Additional Information and where indicated in the notes to the financial
information, where certain comparative information for adjusted results is
pro-forma information.
3. Reconciliation of alternative performance measures
Income statement measures
The Group presents alternative performance measures including adjusted
earnings before interest, tax, depreciation and amortisation ('adjusted
EBITDA'), adjusted profit before tax and adjusted earnings per share. Where
indicated, comparatives are presented on a pro-forma basis to provide
investors with better comparability of the performance of continuing
operations (see Additional Information).
The following table shows the reconciliation of the key income statement
alternative performance measures to the most directly comparable measures
reported in accordance with IFRS:
Year ended 31 March 2023 Year ended 31 March 2022
Continuing operations IFRS Adjusting items Adjusted IFRS Adjusting Adjusted
£m unless otherwise stated reported reported reported items reported
Revenue 1 751 - 1 751 1 375 - 1 375
EBITDA 291 29 320 147 93 240
Depreciation(1) (59) 1 (58) (56) - (56)
Amortisation (36) 23 (13) (24) 10 (14)
Operating profit 196 53 249 67 103 170
Net finance expense (20) - (20) (25) - (25)
Share of (loss)/profit of joint venture (24) 48 24 - - -
Profit before tax 152 101 253 42 103 145
Income tax expense (25) (25) (50) (16) (12) (28)
Profit for the year 127 76 203 26 91 117
Effective tax rate expense % 16.8% 19.9% 38.4% 19.3%
Earnings per share:
Basic earnings per share (pence) 31.3p - - 5.5p - -
Diluted earnings per share (pence) 30.8p 18.5p 49.3p 5.5p 19.4p 24.9p
1. For the year ended 31 March 2023, depreciation includes depreciation of £1
million related to the Quantum acquisition fair value adjustments which is
excluded from adjusted operating profit.
The following table shows the reconciliation of the adjusting items impacting
adjusted profit for the year:
Year ended 31 March
2023 2022
£m
Continuing operations Notes £m
Exceptional costs included in operating profit 5 28 93
Amortisation of acquired intangible assets 23 10
Unwind of fair value adjustments (including £1 million of depreciation) 2 -
Adjusting items excluded from share of profit of joint venture 12 48 -
Total excluded from adjusted profit before tax 101 103
Tax credit on adjusting items 6 (25) (24)
Exceptional tax charge 5, 6 - 12
Total excluded from adjusted profit for the year 76 91
Cash flow measure
The Group also presents an alternative cash flow measure, 'free cash flow',
which is defined as cash generated from total operations, after net interest
and tax paid, after capital expenditure and excluding the impact of
exceptional items.
The following table shows the reconciliation of free cash flow relating to
continuing operations:
Year ended 31 March
2023 2022
£m £m
Adjusted operating profit from continuing operations 249 170
Adjusted for:
Adjusted depreciation and adjusted amortisation(1) 71 70
Share-based payments charge 20 10
Other non-cash movements(2) (8) 4
Changes in working capital(3) (105) (68)
Net retirement benefit obligations (9) (7)
Net capital expenditure (71) (75)
Net interest and tax paid(4) (28) (32)
Free cash flow from continuing operations 119 72
1. Total depreciation of £59 million (2022 - £56 million) less £1 million
of depreciation related to Quantum acquisition fair value adjustments (2022 -
£nil) and amortisation of £36 million (2022 - £24 million) less £23
million (2022 - £10 million) of amortisation of acquired intangible assets.
2. In the year ended 31 March 2023, other non-cash movements excludes an
inflow of £1 million not included in adjusted operating profit.
3. In the year ended 31 March 2023, changes in working capital excludes the
2022 financial year bonus of £7 million to employees who have transitioned to
Primient which is classified as a discontinued cash outflow. This impact is
partially offset by the increase of a legal provision relating to discontinued
operations.
4. In the year ended 31 March 2023, net interest and tax paid excludes tax
payments of £47 million relating to the Group's share of Primient's tax
including the exceptional tax on the gain on disposal of Primient (£42
million).
The following table shows the reconciliation of free cash flow to net cash
generated from operating cash flows:
Year ended 31 March
2023 2022
£m £m
Free cash flow from continuing operations 119 72
Adjusted for:
Add: Adjusted free cash flow relating to discontinued operations (7) (56)
Less: exceptional cash flow (59) (60)
Less: tax payments relating to Primient and gain on disposal (47) -
Less: interest received (11) (1)
Add: net capital expenditure 71 148
Net cash generated from operating activities - total operations 66 103
4. Segment information
Segment information is presented on a basis consistent with the information
presented to the Board (the designated Chief Operating Decision Maker (CODM))
for the purposes of allocating resources within the Group and assessing the
performance of the Group's businesses. Following the completion of the
Transaction on 1 April 2022, the Group has changed its operating segments to
reflect the Group's structure.
The Group's core operations comprise three operating segments as follows: Food
& Beverage Solutions, Sucralose and Primary Products Europe. These
operating segments are also reportable segments. The Group does not aggregate
operating segments to form reportable segments. Food & Beverage Solutions
now includes certain operating costs associated with the Group's former
Primary Products operating segment that have remained with the Group. Food
& Beverage Solutions operates in the core categories of beverages, dairy,
soups, sauces and dressings and bakery and snacks. Sucralose, a high-intensity
sweetener and a sugar reduction ingredient, is used in various food categories
and beverages.
Primary Products Europe focuses principally on high-volume sweeteners and
industrial starches. The Group is executing a planned transition away from
these lower margin products in order to use the capacity to fuel growth in the
Food & Beverage Solutions operating segment.
Whilst not part of the Group's core operations, its 49.7% investment in the
Primient joint venture is also an operating segment and reportable segment.
Primient is a leading producer of food and industrial ingredients, principally
bulk sweeteners and industrial starches. Key products include nutritive
sweeteners (such as high fructose corn syrup and dextrose), industrial
starches, acidulants (such as citric acid) and commodities (such as corn
gluten feed and meal and corn oil). Primient comprises the Group's former
Primary Products business in North America and Latin America and its former
interests in the Almex and Bio-PDO joint ventures.
Central, which comprised central costs including head office, treasury and
insurance activities, was shown separately in prior years. Reflecting that the
Group is now a smaller, more focused business following the completion of the
Transaction, in the 2023 financial year Central has been allocated to segments
to enable closer alignment of investments to segment strategies. The
allocation methodology is based on firstly attributing total selling and
general administrative costs by the support provided to each segment directly,
then allocating non-directly attributed costs mainly on the basis of segment
share of Group gross profit.
The Board now uses adjusted EBITDA as the measure of the profitability of the
Group's businesses. For the Primient operating segment, the Board uses the
Group's share of adjusted profit of the Primient joint venture as the measure
of profitability of this business. Adjusted EBITDA and the Group's share of
adjusted profit of the Primient Joint Venture are therefore the measures of
segment profit presented in the Group's segment disclosures for the relevant
operating segments.
As a result of the change in the Group's operating segments, where relevant,
the Group has restated the comparative year's segmental disclosure in order to
provide a like-for-like comparison for the performance of the operating
segments.
All revenue is from external customers.
Segmental results for the year ended 31 March 2023
IFRS 8 Segment results
Year ended 31 March 2023
Total operations Food & Beverage Solutions Primary Primient Joint Venture Total
£m Products £m £m
Sucralose Europe
£m £m
Revenue 1 438 184 129 - 1 751
Adjusted EBITDA(1) 271 58 (9) - 320
Adjusted EBITDA margin 18.8% 31.3% (6.5%) - 18.3%
Adjusted share of profit of joint venture(1) - - - 24 24
1. Reconciled to statutory profit for the year for continuing operations in
Note 3.
Segmental results for the year ended 31 March 2022
IFRS 8 Segment results
Year ended 31 March 2022*
Total operations Food & Beverage Solutions Primary Primient Joint Venture Total
£m Products £m £m
Sucralose Europe
£m £m
Revenue 1 111 163 101 - 1 375
Adjusted EBITDA 207 53 (20) - 240
Adjusted EBITDA margin 18.6% 32.6% (19.4%) - 17.5%
Adjusted share of profit of joint venture - - - - -
* Restated to reflect the change in operating segments.
Geographic disclosures
Year ended 31 March
2023 2022
Revenue - total operations £m £m
Food & Beverage Solutions
North America 687 542
Asia, Middle East, Africa and Latin America 432 325
Europe 319 244
Food & Beverage Solutions - total 1 438 1 111
Sucralose - total 184 163
Primary Products Europe 129 101
Primary Products - in the Americas - 1 757
Total 1 751 3 132
5. Exceptional items
Exceptional (costs)/income recognised in the income statement are as follows:
Year ended 31 March
2023 2022
Income statement - continuing operations Footnotes £m £m
Costs associated with the separation and disposal of Primient (a) (25) (79)
Restructuring costs (b) (5) (1)
Impairment related to the disposal of Primient - (13)
US pension plan past service credit - 9
Stabiliser product contamination (1) (9)
Historical legal matters (c) 3 -
Exceptional items included in profit before tax (28) (93)
UK tax charge - (6)
US tax charge - (6)
Exceptional items included in income tax - (12)
Exceptional items - continuing operations (28) (105)
Discontinued operations
Gain on disposal of Primient 98 -
Restructuring costs - (3)
Exceptional items - discontinued operations 98 (3)
Exceptional items - total operations 70 (108)
Continuing operations for the year ended 31 March 2023
(a) The Group incurred certain transaction and separation costs related to
the Primient disposal which totalled £25 million. The costs consisted
principally of information technology (IT) costs to separate the Group's and
Primient's IT.
(b) The Group recognised a £5 million restructuring charge, principally in
relation to IT initiatives.
(c) The Group recognised a credit of £3 million in relation to the release
of provisions reflecting favourable legal rulings.
The net £28 million exceptional costs recorded in operating profit in
continuing operations during the year resulted in £24 million (outflow)
disclosed in exceptional operating cash flow. In addition, exceptional costs
recorded in the prior year resulted in cash outflows in the year of £35
million.
In the prior year, the most significant exceptional costs related to the
Primient disposal, including, the impairment of certain assets remaining with
the Group which will no longer be used following the disposal.
Tax credits or charges on exceptional items are only recognised to the extent
that gains or losses incurred are expected to result in tax recoverable or
payable in the future. The total tax impact of these exceptional items was a
tax credit of £6 million.
Discontinued operations
The Group recorded a gain of £98 million relating to the disposal on 1 April
2022 of a 50.1% controlling interest in Primient in exchange for gross cash
proceeds of US$1.4 billion (£1.1 billion). An exceptional tax charge of £33
million arose on this gain. Further details on the gain on disposal, and the
associated tax charge, are set out in Note 7.
Cash flows from total operations
Further details in respect of cash flows from exceptional items are set out
below.
Year ended 31 March
2023 2022
Net operating cash outflows on exceptional items Footnotes £m £m
Costs associated with the separation and disposal of Primient (a) (52) (48)
Restructuring costs (b) (3) (5)
US pension plan past service credit (d) (1) (1)
Stabiliser product contamination (1) -
Historical legal matters (c) (2) (4)
Net cash outflows - continuing operations (59) (58)
Net cash outflows - discontinued operations (42) (2)
Net cash outflows - total operations (101) (60)
(d) In the prior year, a plan amendment to the Group's US pension plans
resulted in a past service credit of £13 million, with the Group agreeing to
make incremental contributions of £4 million (resulting in a net exceptional
credit of £9 million). Incremental contributions of £1 million were paid in
the current and prior year, with the remaining £2 million expected to be paid
in the 2024 financial year.
Exceptional cash flows
The total cash adjustment relating to exceptional items presented in the cash
flow statement of £129 million outflow (2022 - £36 million (inflow))
reflects the net exceptional gain in profit before tax for total operations of
£70 million (2022 - net exceptional loss of £96 million) which was £129
million higher (2022 - £36 million higher loss) than net cash outflows of
£59 million (2022 - £60 million) set out in the table above.
The Group also paid £42 million of exceptional tax on the gain on disposal of
Primient (see Note 7).
6. Income tax expense
Income tax for the year is presented as follows:
· Statutory current and deferred taxes from continuing operations of
£25 million, which when divided by statutory profit before tax from
continuing operations of £152 million gives a statutory effective tax rate of
16.8%.
· The impact on this income tax charge of the tax effect of adjusting
and exceptional items and a tax item that is itself an exceptional item, such
that adjusted income tax expense from continuing operations is £50 million,
which when divided by adjusted profit before tax from continuing operations of
£253 million gives an adjusted effective tax rate of 19.9%.
Analysis of charge for the year Year ended 31 March
Continuing operations 2023 2022*
£m £m
Current tax (1) -
United Kingdom
Overseas (66) (56)
Tax credit on exceptional items 6 5
Credit in respect of previous financial years 16 15
(45) (36)
Deferred tax
Credit for the year 13 12
(Charge)/credit in respect of previous financial years (6) 4
Tax credit on exceptional items - 16
Tax credit on Primient exceptional items 13 -
UK exceptional tax charge - (6)
US exceptional tax charge - (6)
Income tax expense (25) (16)
Statutory effective tax rate % 16.8% 38.4%
* The comparatives have been amended to enhance consistency with the current
year disclosure.
Reconciliation to adjusted income tax expense
Year ended 31 March
2023 2022
Continuing operations Notes £m £m
Income tax expense (25) (16)
Add back the impact of: (6)
Tax credit on exceptional items (21)
Tax credit on Primient exceptional items (13) -
Tax credit on amortisation of acquired intangibles and other fair value (7) (3)
adjustments
Tax charge on amortisation of Primient acquired intangibles and other fair 1 -
value adjustments
UK exceptional tax charge 5 - 6
US exceptional tax charge 5 - 6
Adjusted income tax expense 3 (50) (28)
Adjusted effective tax rate % 19.9% 19.3%
7. Discontinued operations
As described in Note 2, on 1 July 2021 the Group classified the business that
became Primient and in which a controlling stake was sold to KPS on 1 April
2022 as a disposal group held for sale and a discontinued operation.
The Primient business consists of the following operations:
· Corn wet mills in the US in Decatur, Illinois; Lafayette, Indiana;
and Loudon, Tennessee.
· Acidulants plants in Dayton, Ohio; Duluth, Minnesota; and Santa
Rosa, Brazil.
· Shareholdings in two joint ventures - Almex in Guadalajara, Mexico
and Covation Biomaterials (formerly Bio-PDO), in Loudon, Tennessee.
· Grain elevator network and bulk transfer stations in North America.
Primary Products' European operations were not included in this transaction
and are therefore not part of the discontinued operations.
Primient disposal
On 1 April 2022 the Group completed the disposal of a 50.1% controlling
interest in Primient in exchange for gross cash proceeds of US$1.4 billion
(£1.1 billion), resulting in an exceptional gain on disposal before tax of
£98 million (see Note 5).
A reconciliation of gross cash proceeds received is shown in the table below:
Year ended 31 March
Reconciliation of gross cash proceeds 2023 2023
US$m
£m
Cash consideration 330 253
Less: completion accounts adjustments in favour of the Group not yet received (15) (12)
Add: cash received for intercompany loan notes, payables and transaction costs 1 089 830
Add: contingent consideration received 31 24
Disposal of Primient, gross proceeds 1 435 1 095
Gain on disposal Year ended 31 March 2023
£m
Cash consideration - as shown in table above(1) 253
Contingent consideration received(2) 24
Fair value of investment in Primient joint venture on initial recognition 253
Total consideration for equity 530
Primient net assets derecognised on disposal on 1 April(3) (539)
Recycling of accumulated foreign exchange from other comprehensive income to 81
the income statement
Recycling of cash flow hedges from other comprehensive income to the income 48
statement
Impact of deal contingent forward(4) (33)
Other amounts 11
Gain on disposal before tax 98
Tax on gain on disposal (33)
Gain on disposal 65
1 Includes deferred consideration relating to the completion accounts
adjustment not yet received of £12 million.
2 Contingent consideration received in the year ended 31 March 2023 was
based on the dividend payable by Almex relating to the period under the
Group's ownership.
3 Net assets held for sale at 31 March 2022 were £1 337 million. This
amount excluded intercompany payable and loan balances which eliminated on
consolidation prior to completion of the Transaction. Net assets derecognised
on disposal included such amounts.
4 The Group entered into a deal contingent forward to hedge the currency
risk associated with the consideration received from the Transaction which was
partly used for the shareholder distribution on 16 May 2022. The fair value
loss on this forward and the impact of the cost of hedging have been recycled
from other comprehensive income to the income statement on completion of the
Transaction.
The tax charge arising on the gain on disposal of Primient was £54 million.
Of this amount, £42 million has been paid in the year ended 31 March 2023.
This tax charge has been partially offset by a deferred tax credit of £21
million reflecting the change in measurement of the difference between the tax
basis and carrying value of the investment. This results in a net tax charge
on the gain on disposal of £33 million.
A reconciliation to the consolidated statement of cash flows is shown in the
table below:
Year ended 31 March 2023
Cash flows £m
Total cash consideration of £253 million less completion accounts adjustments 241
not yet received of £12 million - as shown above
Repayment of intercompany loan notes and payables and transaction costs 830
Less: cash outflow relating to deal contingent forward (33)
Less: net cash derecognised on disposal (17)
Add: contingent consideration received - as shown above 24
Disposal of business, net of cash derecognised on disposal 1 045
8. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
owners of the Company by the weighted average number of ordinary shares in
issue during the year (excluding shares held by the Company and the Employee
Benefit Trust to satisfy awards made under the Group's share-based incentive
plans).
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue assuming conversion of potentially dilutive
ordinary shares, reflecting vesting assumptions on employee share plans, as
well as the deemed profit attributable to owners of the Company for any
proceeds on such conversions.
The average market price of the Company's ordinary shares during the year was
752p (2022 - 721p). The dilutive effect of share-based incentives was 7.3
million shares (2022 - 5.3 million shares).
The significant decrease in weighted average number of shares compared to the
comparative year is due to the share consolidation in May 2022 which resulted
in ordinary shareholders receiving six new ordinary shares with a nominal
value of 29 1/6 pence each for every seven existing ordinary shares that they
held. The share consolidation was completed at the same time as the Group
returned £497 million to ordinary shareholders by way of a special dividend.
The share consolidation was executed in order to maintain the comparability,
so far as possible, of Tate & Lyle PLC's share price before and after the
special dividend.
Year ended 31 March 2023 Year ended 31 March 2022
Continuing operations Discontinued operations Total Continuing operations Discontinued
operations Total
Profit attributable to owners of the Company (£ million) 127 63 190 26 210 236
Weighted average number of shares (million) - basic 404.1 404.1 404.1 465.1 465.1 465.1
Basic earnings per share (pence) 31.3p 15.7p 47.0p 5.5p 45.2p 50.7p
Weighted average number of shares (million) - diluted 411.4 411.4 411.4 470.4 470.4 470.4
Diluted earnings per share (pence) 30.8p 15.4p 46.2p 5.5p 44.7p 50.2p
Adjusted earnings per share
A reconciliation between profit attributable to owners of the Company from
continuing operations and the equivalent adjusted measure, together with the
resulting adjusted earnings per share measure, is shown below:
Year ended 31 March
Continuing operations 2023 2022
Notes £m £m
Profit attributable to owners of the Company 127 26
Adjusting items:
- exceptional costs in operating profit 5 28 93
- amortisation of acquired intangible assets and other fair value 3 25 10
adjustments
- Adjusted items excluded from share of profit of joint venture 12 48 -
- tax credit on adjusting items 6 (25) (24)
- exceptional tax charge 5, 6 - 12
Adjusted profit attributable to owners of the Company 3 203 117
Weighted average number of shares (million) - diluted 411.4 470.4
Adjusted earnings per share (pence) - continuing operations 49.3p 24.9p
Year ended 31 March
Total operations Notes 2023 2022
£m £m
Adjusted profit attributable to owners of the Company - continuing operations 3 203 117
Adjusted profit attributable to owners of the Company - discontinued (2) 146
operations
Adjusted profit attributable to owners of the Company - total operations 201 263
Adjusted earnings per share (pence) - total operations 48.9p 56.0p
9. Dividends on ordinary shares
Dividends on ordinary shares in respect of the financial year:
Year ended 31 March
2023 2022
Pence Pence
Per ordinary share:
Interim dividend paid 5.4 9.0
Final dividend proposed 13.1 12.8
Total dividend 18.5 21.8
The Directors propose a final dividend for the financial year of 13.1p per
ordinary share that, subject to approval by shareholders, will be paid on 2
August 2023 to shareholders who are on the Register of Members on 23 June
2023. Based on the number of ordinary shares outstanding at 31 March 2023, the
final dividend for the financial year is expected to amount to £52 million.
On 16 May 2022, the Group returned £497 million to ordinary shareholders by
way of a special dividend of £1.07 per existing ordinary share in the capital
of Tate & Lyle PLC. In order to maintain the comparability, so far as
possible, of Tate & Lyle PLC's share price before and after the special
dividend, the Group also completed a share consolidation resulting in ordinary
shareholders receiving six new ordinary shares with a nominal value of 29 1/6
pence each for every seven existing ordinary shares that they held.
10. Net debt - total operations
Movements in the Group's net debt were as follows:
Cash and cash equivalents Borrowings and lease liabilities Total
£m
£m
£m
At 1 April 2022(1,2) 127 (753) (626)
Movements from cash flows 303 15 318
Currency translation differences 45 (42) 3
Lease liabilities(3) 69 69
-
Other non-cash movements - (2) (2)
At 31 March 2023 475 (713) (238)
1. Borrowings and lease liabilities included £74 million of leases included
in liabilities directly associated with the assets held for sale as at 31
March 2022.
2. Cash and cash equivalents included £17 million of cash and cash
equivalents included in assets held for sale as at 31 March 2022.
3. Lease liabilities movement in the year ended 31 March 2023 is principally
due to the disposal of Primient.
11. Acquisitions
In the 2023 financial year:
Nutriati acquisition
On 29 April 2022, the Group completed the acquisition of Nutriati, an
ingredient technology business developing and producing chickpea protein and
flour, expanding its capability to offer customers sustainable, plant-based
solutions. This transaction was structured as an asset purchase and is being
accounted for as a business combination. Total consideration was £10
million, including £1 million of deferred consideration and £1 million of
non-cash consideration. Included within the identifiable assets acquired are
inventories of £3 million and intangible assets of £6 million. Goodwill of
£1 million, which is not deductible for tax purposes, has been recorded on
the acquisition.
Quantum acquisition
On 9 June 2022, the Group completed the acquisition for 100% of the equity of
Quantum Hi-Tech (Guangdong) Biological Co., Ltd (Quantum), a leading prebiotic
dietary fibre business in China from ChemPartner Pharmatech Co., Ltd
(ChemPartner) for a total consideration of US$238 million (£188 million).
The acquisition of Quantum, which engages in the research, development,
production and sale of fructo-oligosaccharides and galacto-oligosaccharides,
significantly strengthens Tate & Lyle's position as a leading global
player in dietary fibres, bringing a high-quality portfolio of speciality
fibres, strong research and development capabilities and proprietary
manufacturing processes and technologies. The acquisition also expands Tate
& Lyle's ability to provide added-fibre solutions for its customers across
a range of categories including dairy, beverages, bakery and nutrition
(including infant nutrition), and to meet growing consumer interest in gut
health. It also significantly expands Tate & Lyle's presence in China and
Asia, and extends its capabilities to create solutions across food and drink
utilising its leading speciality ingredient portfolio.
Details of the acquisition are provided in the tables on the next page.
Goodwill At 31 March
2023
£m
Total consideration 188
Less: fair value of net assets acquired (93)
Goodwill 95
Cash flows At 31 March
2023
£m
Total consideration 188
Less: net cash acquired (4)
Acquisition of business, net of cash acquired 184
Fair value of net assets acquired Book value on acquisition Fair value adjustment
£m £m Total fair value
£m
Intangible assets (customer relationships,
technology/know-how)
- 90 90
Property, plant and equipment 12 7 19
Inventories 4 1 5
Trade and other receivables 5 - 5
Cash and cash equivalents 4 - 4
Trade and other payables (6) - (6)
Deferred tax liabilities - (24) (24)
Net assets on acquisition 19 74 93
The gross amount of trade receivables is materially the same as the fair value
of the trade receivables and it is expected that the full contractual amounts
can be collected. The goodwill, which is not deductible for tax purposes,
primarily represents the premium paid to acquire an established business with
a leading and sustainable market position in China with the potential to
expand beyond. It also represents the future value to the Group of being
able to leverage its technology and products, which are highly complementary
to the Group's existing fibres portfolio, to offer an enhanced range of fibre
solutions to existing customers.
The acquired business contributed revenue of £32 million and an operating
profit of £8 million for the period from acquisition on 9 June 2022 until 31
March 2023 (excluding the amortisation of acquired intangibles recognised from
the acquisition). Had the business been acquired at the beginning of the 2023
financial year, it would have contributed revenue of £39 million and an
operating profit of £14 million in the year ended 31 March 2023.
In the 2022 financial year:
There were no acquisitions in the 2022 financial year.
12. Investment in joint venture
In the year ended 31 March 2023, the Group acquired a 49.7% interest in
Primient, a joint venture which is a leading producer of food and industrial
ingredients, principally bulk sweeteners and industrial starches. Key products
include nutritive sweeteners (such as high fructose corn syrup and dextrose),
industrial starches, acidulants (such as citric acid) and commodities (such as
corn gluten feed and meal and corn oil). Primient comprises the Group's
former Primary Products business in North America and Latin America and its
former interests in the Almidones Mexicanos S.A de C.V ('Almex') and Covation
Biomaterials (formerly DuPont Tate & Lyle Bio-Products Company, LLC
('Bio-PDO')) joint ventures. From completion, the Group and Primient entered
into certain long-term agreements, principally relating to the supply of
product between one another.
The Group's interest in the Primient joint venture decreased from the 49.9%
interest held immediately on completion of the Transaction to a 49.7% interest
following a redemption of shares held by the Group for the return of £1
million. Primient subsequently re-issued the same number of shares in order
to award these to Primient management as performance incentives.
The Group's interest in Primient is accounted for using the equity method.
Primient has share capital consisting of ordinary shares, which is held
directly by the Group (and its joint venture partner) and is a private
company. No quoted market price is available for its shares. There are no
contingent liabilities relating to the Group's interest in the joint venture.
The movements in the carrying value of the Group's investment in Primient is
summarised as follows:
Primient
£m
At 1 April 2022
Fair value of investment in Primient joint venture on initial recognition 253
Share of loss of joint venture (24)
Other comprehensive expense (including foreign exchange) (5)
Dividends paid (41)
Other movements (including contributions) 17
Share redemption (1)
At 31 March 2023 199
The following tables summarise the financial information of Primient as
included in its own financial statements, adjusted for fair value adjustments
at the Transaction date (disposal of 100% of Primient and acquisition of the
Group's share) and differences in accounting policies.
Statement of total comprehensive income
Primient Year ended
31 March 2023
£m
At 100%
Revenue 2 552
Depreciation and amortisation (85)
Other expenses (2 329)
Exceptional items (61)
Net finance expense (80)
Loss before tax (3)
Income tax expense(1) (6)
Loss after tax at 100% (9)
Other comprehensive expense at 100% (41)
Total comprehensive expense at 100% (50)
At 49.7%
Group's share of loss for the year (4)
Amortisation of fair value adjustments on initial recognition of Primient (17)
Other Group adjustments (3)
Group's share of loss of joint venture (24)
Group's share of other comprehensive expense (21)
Group adjustments to other comprehensive income 16
Group's share of other comprehensive expense (5)
Group's share of total comprehensive expense (29)
1. Tax expense relates principally to tax on Primient's Brazilian
subsidiary.
Statement of financial position
Primient At 31 March 2023
£m
Assets
Non-current assets 993
Cash and cash equivalents 43
Other current assets 624
Liabilities
Non-current liabilities (1 072)
Current borrowings (9)
Other current liabilities (303)
Net assets at 100% 276
Group's share of net assets 137
Goodwill and fair value adjustments (net of amortisation) 62
Carrying amount of investment in Primient 199
As discussed in Note 2, the Group's adjusted profit before tax excludes
certain items relating to the Primient joint venture. The following table
shows the reconciliation of such adjusting items:
Year ended 31 March 2023
Primient income statement at Group's share Reported Adjusting items Adjusted reported
£m £m £m
Revenue 1 267 - 1 267
Operating profit 1 48 49
(Loss)/ profit before tax (21) 48 27
Income tax expense (3) - (3)
(Loss)/profit after tax (24) 48 24
The following table shows the reconciliation of the adjusting items impacting
adjusted profit after tax
Primient adjusting items at Group's share Note Year ended
31 March 2023
£m
Exceptional costs included in operating profit 52
Amortisation of acquired intangibles and other fair value adjustments (4)
Total excluded from adjusted profit before tax 48
Total excluded from adjusted profit after tax 3 48
The Group's share of exceptional costs of Primient comprise certain
non-recurring costs incurred by Primient as part of the Transaction and
separation including the re-charge of shareholder costs. In addition, this
included the unwind of fair value adjustments determined by the purchase price
allocation which included certain net corn position fair value adjustments no
longer recorded by Primient.
13. Events after the balance sheet date
In April 2023, the Group repaid a US$95 million US private debt floating rate
note ahead of its maturity using cash.
There are no other post balance sheet events requiring disclosure in respect
of the year ended 31 March 2023.
TATE & LYLEDITIONAL INFORMATION
FOR THE YEAR ENDED 31 MARCH 2023
Calculation of changes in constant currency
Where changes in constant currency are presented in this statement, they are
calculated by retranslating current year results at prior year exchange rates.
The following table provides a reconciliation between the 2023 performance at
actual exchange rates and at constant currency exchange rates. Absolute
numbers presented in the tables are rounded for presentational purposes,
whereas the growth percentages are calculated on unrounded numbers.
Adjusted performance 2023 FX 2023 at constant Underlying growth Pro-forma(1) Change % Change in constant
Continuing operations
£m
£m
currency
£m
currency
£m 2022
%
£m
Revenue 1 751 (134) 1 617 242 1 375 27% 18%
Food & Beverage Solutions 271 (28) 243 43 200 35% 21%
Sucralose 58 (8) 50 (3) 53 8% (5%)
Primary Products Europe (9) 1 (8) 12 (20) 57% 57%
Adjusted EBITDA 320 (35) 285 52 233 37% 22%
Adjusted operating profit 249 (29) 220 57 163 53% 35%
Net finance expense (20) 2 (18) 7 (25) 21% 29%
Share of adjusted profit of joint venture 24 (2) 22 (39) 61 (60%) (64%)
Adjusted profit before tax 253 (29) 224 25 199 27% 13%
Adjusted income tax expense (50) 5 (45) (8) (37) (36%) (21%)
Adjusted profit after tax 203 (24) 179 17 162 25% 11%
Adjusted diluted EPS (pence) 49.3p (5.7p) 43.6p 4.1p 39.5p 25% 10%
1. Comparative information for the year-ended 31 March 2022 is based on
pro-forma financial information (see Additional Information).
Unaudited pro-forma financial results for the year ended 31 March 2022
On 1 April 2022, Tate & Lyle completed the sale of a controlling stake in
Primient comprising the Primary Products business in North America and Latin
America and interests in the Almidones Mexicanos S.A de C.V and Covation
Biomaterials (formerly DuPont Tate & Lyle Bio-Products Company, LLC) joint
ventures, to KPS Capital Partners, LP (KPS). Following the transaction KPS
held a 50.1% interest in Primient and has Board and operational control, while
Tate & Lyle held a 49.9% interest (the 'Transaction').
The following pro-forma financial information shows financial information for
Group's continuing operations adjusted to show the pro-forma effect of
adjustment for factors that came into effect at completion of the Transaction
or related to the associated shareholder approved special dividend and share
consolidation. These adjustments were for:
− The financial impact of certain long-term agreements that will
exist between the Group and Primient;
− The Group's equity-accounted share of profits of the Primient
business from completion of the Transaction; and
− The share consolidation is included as if it were effected on 1
April 2021.
Because the adjustments are also not included in the continuing operations
information contained within the results for the year ended 31 March 2022
disclosed herein, pro-forma adjustment is given to them as set out below. To
assist the reader, certain financial information for the year ended 31 March
2023 is given for comparison purposes and where this has been done growth
percentages are stated in constant currency.
While IFRS 5 provides the basis on which to determine the composition of
continuing and discontinued operations, pro-forma financial information is a
non-IFRS measure. In addition, because such pro-forma financial information
contains estimates with respect to each of the items set out above, it should
not be used to replace the restated statutory financial information but is an
illustration of how the Group now presents its financial results.
Year ended 31 March 2022
Continuing operations Food & Beverage Solutions Primary Central Total
£m Products Primary £m £m
Sucralose Europe Products
£m £m £m
Adjusted operating profit - segmental results 190 61 112 (51) 312
-
Transfer of European PP business out of Primary Products - - 21 - -
(21)
Reclassification to discontinued operations(1) (9) - (133) - (142)
-
Central and overhead re-allocation (29) (19) (3) - 51 -
Adjusted operating profit 152 42 (24) - - 170
Add back depreciation 43 9 4 - - 56
Add back adjusted amortisation 12 2 - - - 14
Adjusted EBITDA(2) 207 53 (20) - - 240
Adjusted EBITDA margin 18.6% 32.6% (19.4%) - - 17.5%
Pro-forma impact of long-term agreements (7) - - - (7)
-
Pro-forma Adjusted EBITDA 200 53 (20) - - 233
Pro-forma Adjusted EBITDA margin 18.0% 32.6% (19.4%) - - 17.0%
1. Operating costs of £9 million are reallocated from Primary Products
to Food & Beverage Solutions because they remain within the Group after
completion of the Transaction.
2. Adjusted EBITDA excludes the impact of exceptional items of £93
million.
Year ended 31 March 2023 Pro forma Constant
currency
Continuing operations - pro-forma £m 2022 change
%
£m
Adjusted EBITDA
Food & Beverage Solutions 271 200 21%
Sucralose 58 53 (5)%
Primary Products Europe (9) (20) 57%
Adjusted EBITDA 320 233 22%
Depreciation and adjusted amortisation (71) (70) (7)%
Adjusted operating profit 249 163 35%
Net finance expense (20) (25) (29)%
Adjusted share of profit from its own joint ventures 24 61 (64)%
Adjusted profit before tax 253 199 13%
Income tax expense (50) (37) (21%)
Adjusted effective tax rate 19.9% 18.6%
Profit for the year 203 162 11%
Earnings per share
Diluted weighted average number of ordinary shares(1) 411.4 408.8 n/a
Adjusted diluted (pence) 49.3p 39.5p 10%
1. Pro-forma adjusted earnings per share, for the year ended 31 March 2022 has
been calculated based on the pro-forma earnings for the year and the shares in
issue adjusted for impact of the 6 for 7 share consolidation as if it occurred
on 1 April of that financial year.
Share of Primient joint venture profit
Year ended 31 March 2022 £m
Adjusted profit before tax from discontinued operations(1) 174
Pro-forma effect of Primient's financing facilities(2) (45)
Impact of long-term agreements 7
Additional standalone costs in Primient(3) (14)
Adjusted pro-forma profit before tax of Primient 122
Share of Primient joint venture profit at 49.9% pro-forma equity interest 61
1. Primient joint venture's adjusted profit before tax of £174 million
is before charging exceptional items of £3 million and the impact of held for
sale adjustments of £83 million.
2. Reflects final borrowings in Primient of US$1.1 billion.
3. Represents additional costs required in Primient in order to replicate
back-office activities previously shared across Tate & Lyle PLC.
Summary of pro-forma Return on Capital employed for the year ended 31 March
2022 for continuing operations
Set out below is the pro-forma return on capital employed calculation:
Year ended 31 March
2022 2021
£m £m
Calculation of ROCE - pro-forma
Adjusted operating profit - continuing operations 170
Impact of long-term agreements (7)
Deduct: amortisation of acquired intangible assets (10)
Profit before interest, tax and exceptional items for ROCE - pro-forma 153
Invested operating capital - total operations 2 177 1 871
Less: impact of Primient invested operating capital and Add: impact of (1 258) (942)
long-term agreements
Invested operating capital of continuing operations - pro-forma 919 929
Average invested operating capital of continuing operations - pro-forma 924
ROCE % - pro-forma 16.5%
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