REG - Tate & Lyle PLC - Final Results
23/05/2024 07:15
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RNS Number : 5531P Tate & Lyle PLC 23 May 2024
Tate & Lyle PLC
Results for the year ended 31 March 2024
Strong profit and cash performance
Sale of remaining interest in Primient completes transformation to speciality
business
Sale proceeds to be returned to shareholders through share buyback programme
Adjusted performance(1) Statutory performance
2024 vs 2023 2024 vs 2023
Revenue £1 647m (2)% Revenue £1 647m (6)%
Food & Beverage Solutions £1 359m (2)% Food & Beverage Solutions £1 359m (5)%
Sucralose £174m (1)% Sucralose £174m (6)%
EBITDA(2) £328m 7% Primary Products Europe £114m (12)%
Food & Beverage Solutions(2) £281m 8%
Sucralose £52m (4)%
EBITDA margin 19.9% 170bps
Share of profit of Primient £35m 53%
Profit before tax(2) £287m 18% Operating profit £207m 6%
Earnings per share(2) (EPS) 55.5p 18% Profit before tax £226m 48%
Free cash flow(2) £170m £49m Diluted earnings per share 46.5p 1%
Key highlights
· Strong financial performance, successfully navigating challenging
markets
− Adjusted EBITDA growth +7%, adjusted EBITDA margin +170bps
− Excellent cash generation with cash conversion 23ppts higher at 85%,
well ahead of target
− Strong productivity performance leads to increase in 5-year savings
target to US$150m
· Primient sale completes transformation to speciality food and
beverage solutions business
− Agreed sale of remaining interest in Primient for US$350m in cash
− Intention to return net cash proceeds from Primient sale to
shareholders via share buyback programme
· Continue to progress growth-focused strategy and invest for long-term
− Solutions-based business increasing; solutions revenue from new
business wins up 3ppts to 21%
− Continue to invest in innovation and solution selling, technology
and new capacity
· Leading in sustainability, with new, more ambitious climate targets
aligned to 1.5(o)C trajectory
− New science-based GHG emissions targets to 2028 deliver larger,
faster emissions reductions
Financial headlines
· Revenue (2)% due to lower volume from soft consumer demand, customer
destocking and prioritising margin
· Adjusted EBITDA(2) up 7%, benefiting from proactive mix management,
productivity savings and cost discipline
· Strong productivity performance with savings of US$41m delivered in
first year of five-year ambition
· Adjusted profit before tax up 18%, from FBS(3) growth, increased
Primient share of profit, lower finance charges
· Free cash flow(1) of £170m, £49m higher driven by strong cash
conversion from working capital discipline
· Organic return on capital employed(1) improved by 40bps; on reported
basis decreased 20bps to 17.4%
· Recommending final dividend of 12.9p per share: full-year dividend of
19.1p per share +3.2%
---------------------------------------------------------------------------------------
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 11 to 14). Changes in adjusted performance
metrics are in constant currency and for continuing operations. Organic ROCE
excludes the impact of acquisitions.
2. Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page 33.
3. FBS is Food & Beverage Solutions
Nick Hampton, Chief Executive said:
"In challenging market conditions, it's been another year of robust financial
performance and strategic progress, with strong profit growth and productivity
delivery, excellent cash generation, and further progress to transform the
business.
The actions taken over the last six years have created a higher quality and
more resilient business, with the agility to navigate the challenging economic
environment and softer consumer demand we saw last year. While managing these
short-term market dynamics, we also continued to set up the business for
long-term growth by increasing investment in technology, innovation, solution
selling and new capacity, and by intentionally moving away from low margin
business. I am particularly pleased by our progress building our solutions
business with customers, a core element of our strategy, with solutions new
business wins continuing to grow.
The separate announcement we made today of the sale of our remaining stake in
Primient represents an important milestone for our business. With this sale,
the transformation of Tate & Lyle into a fully-focused speciality food and
beverage solutions business is complete. We are now well-positioned to capture
the significant growth opportunities ahead as we look to provide our customers
with the solutions they need to meet growing consumer demand for healthier,
tastier and more sustainable food and drink.
Our robust balance sheet, strong cash generation and the proceeds from the
sale of Primient underpin our confidence to enhance shareholder returns
through the share buyback programme, whilst retaining the flexibility to
pursue both organic and inorganic growth opportunities. We are excited by Tate
& Lyle's future."
Outlook
We have navigated the unprecedented cycle of inflation and volatile consumer
demand well, delivering a compound average growth rate of revenue of 11% and
adjusted EBITDA of 10% for the three years ended 31 March 2024.
Over the last year, we prioritised revenue and margin, ahead of volume growth.
Looking ahead, we expect to grow from this new base and, with the end of
customer destocking and consumer confidence gradually improving, we expect
good volume growth in the 2025 financial year, accelerating as the year
progresses.
Following a period of exceptional input cost inflation, we are now seeing
input cost deflation and, as a result, revenue was lower in the second half of
the 2024 financial year reflecting the pass through of lower costs. This is
expected to continue in the first half of the 2025 financial year.
Therefore, for the year ending 31 March 2025, we expect to deliver in constant
currency:
· Revenue slightly lower than the prior year
· EBITDA growth of between 4% and 7%.
Following completion of the sale of Primient, we will no longer consolidate
its profits.
Sale of Primient and share buyback programme
Sale of remaining interest in Primient
Over the last six years, Tate & Lyle has been executing a major strategic
transformation to become a growth-focused speciality food and beverage
solutions business. This transformation has included a much sharper focus on
customers and categories, increased investments in innovation and solution
selling capabilities, and significantly strengthening our sweetening,
mouthfeel and fortification platforms through new product development and
acquisitions.
A critical step in this transformation journey was the sale, in April 2022, of
a controlling interest in Primient, our primary products business in North
America and Latin America to KPS Capital Partners, LP (KPS).
Today, we separately announced that we have reached an agreement to sell our
remaining 49.7% interest in Primient to KPS. Under the agreement, Tate &
Lyle will receive US$350 million (c.£279 million). These proceeds will be
payable in cash at completion which is anticipated by the end of July 2024.
The transaction values Tate & Lyle's 49.7% stake in Primient at 6.5x
EV/EBITDA, ahead of the valuation of Primient on the sale of the initial
controlling stake, completed on 1 April 2022.
The sale completes the staged exit from Primient well ahead of expiry of the
original lock-up period of eight years which lasts until 1 April 2030. The
robust long-term agreements between Tate & Lyle and Primient put in place
in April 2022 to ensure supply security, with a remaining life of around 18
years, will continue to operate. Net cash proceeds, after tax, are expected to
be around US$270 million (c.£215 million).
Total cash proceeds from the full exit of Primient including dividends
received since the sale of the initial holding in April 2022 exceeds US$1.5
billion.
Share buyback programme and capital allocation
Consistent with the Board's capital allocation policy, the Board intends to
return the net cash proceeds received from the Primient sale to shareholders
by way of an on-market share buyback programme. The buyback is expected to
commence on completion of the Primient sale and further details will be
announced in due course.
The Board's priority is to continue its disciplined deployment of capital and
to maintain Tate & Lyle's financial strength. Looking forward, we will
look to retain the flexibility in the balance sheet to drive value accretive
organic and inorganic growth, with long-term efficient leverage sitting in the
range of 1.0x to 2.5x net debt to EBITDA.
Fully-focused speciality food and beverage solutions business
Following the sale of Primient, Tate & Lyle is a fully-focused, speciality
food and beverage solutions business with a clear strategic focus and strong
sense of purpose.
· 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.
Over the last six years, 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 (2024: (2)% lower)
· Adjusted EBITDA growth of 7% to 9% each year (2024: 7% growth)
· Improved organic return on capital employed by up to 50bps on average
each year (2024: 40 bps improvement)
· US$100m of productivity savings (2024: US$41 million savings and
ambition increased to US$150m).
As stated at our Capital Markets Event on 8 February 2023, revenue growth is
on an underlying basis excluding the impact of abnormal inflation and
deflation. We also have the potential to further accelerate growth through
partnerships and M&A.
Delivering our strategy
We continued to invest in progressing our strategy in line with our commitment
to 'Science, Solutions, Society'.
Science
· Investment in innovation and solution selling was 5% higher, with
investments in new customer-facing labs, new technology and strengthening
capabilities in areas such as sensory and open innovation.
· New Product revenue was up 13% on a like-for-like basis (i.e. no
products are removed from disclosure due to age) with strong growth in the
mouthfeel platform; revenue was modestly lower on a reported basis.
· We launched 9 New Products into the market including TASTEVA(®) SOL
Stevia Sweetener, a patent-protected breakthrough in stevia technology to help
customers solve stevia solubility challenges.
· New automated lab established at our Customer Innovation and
Collaboration Centre in Singapore with advanced technology to accelerate the
development of mouthfeel solutions and increase our customers'
speed-to-market.
· We added 61 patents to our patent portfolio and now have over 540
patents granted and over 220 pending.
Solutions
· The value of solutions-based new business wins increased by 3ppts to
21% of revenue, with strong solutions performance in Asia, Middle East, Africa
and Latin America.
· Innovation is a key driver of our solutions offering. 44% of revenue
from our new business pipeline involved the formulation of one or more New
Products.
· We opened a new Customer Innovation and Collaboration Centre in
Jakarta, Indonesia, bringing our global network of Centres to seventeen.
· We invested €25 million to add new capacity for non-GMO
PROMITOR(®) Soluble Fibres in Boleráz, Slovakia. Production came on-line
in May 2024.
Society
· We significantly advanced our sustainability agenda:
− In the 2023 calendar year, from a 2019 base, our Scope 1 and 2 absolute
greenhouse gas (GHG) emissions were 11% lower (2030 target: 30% reduction),
and our Scope 3 absolute GHG emissions were 20% lower, exceeding our target of
a 15% reduction by 2030 seven years ahead of schedule.
− In May 2024, we announced new targets to accelerate the reduction of our
Scope 1 and 2 and Scope 3 GHG emissions. Our new targets to 2028, from a 2019
base, replace our existing 2030 targets and have been validated as
science-based on a 1.5(o)C trajectory by the Science Based Targets initiative.
− Our facility in Guarani, Brazil became our first site to be 100% powered
by renewable energy, and our facilities in the Netherlands, UK and Italy are
buying 100% of their electricity from renewable sources.
− We continued to support sustainable acres of corn equivalent to 100% of
the corn we buy each year (367,000 acres in 2023), and to support intervention
programmes with farmers in the US, for example to manage nitrogen levels in
the soil to increase crop yields, improve soil health and minimise the impact
on local watersheds.
− 90% of our waste was beneficially used mainly either as nutrients on
local farms or for energy recovery.
· 45% of leadership and management roles (~500 positions) are held by
women.
· Since 31 March 2020, our low- and no-calorie sweeteners and our
fibres have removed 7.9 million tonnes of sugar from people's diets,
equivalent to more than 31 trillion calories.
Group performance
Revenue Adjusted EBITDA
Full-year Change(1) Full-year Change(1)
£1 647m (2)% £328 7%
1 Growth in constant currency.
Overview
The Group delivered strong adjusted EBITDA growth. Revenue was 2% lower
reflecting lower volume partially offset by good mix management and the
recovery of inflation. Adjusted EBITDA was 7% higher with adjusted profit
before tax 18% higher.
Food & Beverage Solutions performed well with revenue slightly lower and
adjusted EBITDA 8% higher. The underlying performance of the Sucralose
business remained steady, with adjusted EBITDA 4% lower. The optimisation of
Primary Products Europe is continuing with losses significantly reduced.
Our focus in Food & Beverage Solutions was to prioritise revenue and
margin, ahead of volume growth. This intentional re-positioning, together with
softer consumer demand and customer de-stocking, combined to deliver lower
volume. Revenue was 2% lower, reflecting the benefit of mix management and the
recovery of net input cost inflation. A key driver of our growth-focused
approach is our investment in innovation and solution selling. We made
further progress in the year, with revenue from New Products up 13% on a
like-for-like basis, and solutions as a percentage of our new business wins by
value increasing by 3ppts to 21%.
For Primient, the adjusted share of joint venture profit was £35 million, 53%
higher. Operating performance improved, supported by robust demand for
sweetener products, strong customer contracting in 2023 and 2024 and improved
operational performance, while increased interest rates drove finance charges
higher. Tate & Lyle received US$74 million in cash dividends from Primient
in the year.
Cash generation
Free cash flow was £49 million higher at £170 million, with an improvement
in working capital of £112 million, benefiting from increased discipline in
inventory management. While driving greater cash generation, we also continued
to invest in long-term growth with capital expenditure increasing by £39
million to £110 million to deliver capacity expansions for Food &
Beverage Solutions.
Our ambition is to increase the conversion of profit into cash to 75% in the
five years to 31 March 2028. During the 2024 financial year, we exceeded that
target delivering cash conversion of 85%, 23ppts higher. Cash generation
remains a priority, and our focus now is to consistently exceed cash
conversion of 75%. Net debt was £153 million, £85 million lower, with net
debt to EBITDA at 0.5x, and liquidity of over £1.1 billion.
Productivity
We have made an excellent start on our five-year ambition to deliver US$100
million of productivity savings by 31 March 2028. Productivity savings in the
year were US$41 million, well ahead of our target at the start of the year of
US$25 million savings. These savings came from areas such as operational
efficiencies, supply chain and other cost savings. Given this strong
progress, we have increased our productivity target and now expect to deliver
savings of US$150 million by 31 March 2028.
Reporting segments
Food & Beverage Solutions
82% of Group revenue and 86% of Group adjusted EBITDA
Revenue Revenue Drivers Adjusted EBITDA
Full-year Change(1) Volume(2) Price Mix(2) Full-year Ch
an
ge
(1
,3
)
North America £642m (3)% (8)% 5% - -
Asia, Middle East, Africa and Latin America £396m (3)% (7)% 4% - -
Europe £321m 1% (1)% 2% - -
Total £1 359m (2)% (6)% 4% £281m 8%
1 Growth in constant currency.
2 To reflect the underlying drivers of revenue growth, the total
percentages for volume and price mix have been adjusted by 4ppts to exclude
the impact from our focus on mix management and margin expansion. Without this
adjustment, the values for both volume and price mix would be 4ppts greater.
3 Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page 33.
Revenue was 2% lower in constant currency at £1,359 million. Lower volume
from softness in consumer demand and customer destocking led to 6ppts
reduction in revenue. Price mix increased revenue by 4ppts, reflecting 1ppt
from our focus on strategic mix management and solution selling, and 3ppts
from the impact of net input cost inflation (the recovery of inflation in the
three quarters to 31 December 2023, net of the pass-through of deflation in
the quarter to 31 March 2024).
Looking at the three regions, all were impacted by soft consumer demand and
customer destocking. Revenue growth in Europe reflected the pricing through of
greater net input cost inflation.
· North America: Revenue was 3% lower. Cost of living pressures on
consumers resulted in softer demand across our focus categories, partially
offset by higher pricing. As we entered the fourth quarter, a reducing impact
from customer destocking and lower food inflation, and new customer contracts,
delivered improved volume momentum.
· Asia, Middle East, Africa and Latin America: Revenue was 3% lower. In
Asia, revenue was lower reflecting pricing pressure and weaker demand for
stabilisation solutions, mitigated by good growth in beverages, particularly
in North Asia. Consumer demand in China remained soft. In Latin America,
revenue declined driven by lower priced imports from outside the region,
especially in Mexico. Excluding the impact of these imports, revenue was ahead
of the prior year with strong growth in beverages and bakery. In Middle East
and Africa, revenue was ahead of the prior year with strong demand for dairy
solutions in North Africa.
· Europe: Revenue was slightly ahead of the prior year driven by three
main factors. Firstly, we saw good demand across the dairy and infant
nutrition categories, and for mouthfeel solutions generally. Secondly, we
continued to execute our strategy to exit some low margin business, with
revenue from distributors, in particular, lower. Finally, we saw increased
competition from imports from outside the region.
The renewal of customer contracts for the 2024 calendar year is expected to
deliver a sequential improvement in volume growth as the year progresses.
Reflecting this, average daily volume accelerated in the final quarter. The
new customer contracts include the pass through of input cost deflation. As a
result, revenue was lower in the second half of the 2024 financial year.
Adjusted EBITDA was up 8% in constant currency at £281 million benefiting
from mix management and the pricing through of net input cost inflation. This,
together with the benefit from productivity and strong cost control, saw
adjusted EBITDA margins expand by 180bps in constant currency. The effect of
currency translation decreased adjusted EBITDA by £12 million.
Innovation and solution selling
New Product Revenue Investment Solutions
Value Change % of FBS revenue Innovation and solution selling % of new business wins
£219m (4)% 16% 5% 21%
Revenue from New Products was 4% lower. Certain ingredients reached
post-launch maturity in the year and were removed from the definition of New
Products. On a like-for-like basis, which assumes the same ingredients are
included in New Products revenues in both the current and comparative periods,
New Products revenue was 13% higher. On this like-for-like basis, we saw
strong growth in the mouthfeel platform, protein delivered a near-doubling of
revenue and Quantum Hi-Tech helped to accelerate growth in fortification.
Investment in innovation and customer-facing solution selling capabilities
including sensory and open innovation was 5% 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 21% (2023
- 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 16% of Group adjusted EBITDA
Revenue Revenue Drivers Adjusted EBITDA
Full-year Change(1) Volume Price Mix Full-year Change(1)
£174m (1)% in line% (1)% £52m (4)%
Underlying customer demand for sucralose remained steady. Revenue was broadly
in line with the prior year as volume remained consistent and customer mix led
to modestly lower pricing. Adjusted EBITDA declined modestly reflecting cost
inflation across a range of inputs. Currency translation decreased adjusted
EBITDA by £3 million.
Primary Products Europe
7% of Group revenue and (2%) of Group adjusted EBITDA
Revenue Revenue Drivers Adjusted EBITDA
Full-year Change(1) Volume Price Mix Full-year Change(1)
£114m (12)% (15)% 3% £(5)m 34%
1 Growth in constant currency.
We continue to optimise the financial performance of Primary Products Europe
through the transition of capacity to speciality ingredients. Revenue was
lower by 12%, mainly reflecting the reduced volume of co-products. Adjusted
EBITDA losses reduced significantly, benefiting from lower input costs.
Webcast details
Following this statement's release on 23 May 2024 at 07.00am (UK time), a live
webcast will be held at 10.00am via this link
(https://event.on24.com/wcc/r/4596484/101371B68C8EA28C9C56F1A38EE30A43) . A
replay of the webcast and presentation will be made available afterwards at
this link (https://tateandlyle-events.com/watch/full-year-mar2024) . 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
Year ended 31 March 2024 Restated Constant
currency
£m 2023(1) change
%
£m
Adjusted EBITDA
Food & Beverage Solutions 281 273 8%
Sucralose 52 58 (4%)
Primary Products Europe (5) (9) 34%
Adjusted EBITDA 328 322 7%
Depreciation and adjusted amortisation (70) (71) (1%)
Adjusted operating profit 258 251 8%
Operating profit (statutory) 207 196 10%
Net finance expense (6) (20) 66%
Adjusted share of profit of Primient joint venture 35 24 53%
Adjusted profit before tax 287 255 18%
Profit before tax (statutory) 226 152 54%
1 Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page 33.
Net finance expense
Net finance expense at £6 million was 66% lower in constant currency, mainly
reflecting higher net income on the Group's cash balances. Because almost all
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 £25 million were included in profit before tax, of
which a charge of £1 million was included from the Group's share of
exceptional items in the Primient joint venture. Of these costs, £21 million
related to organisational improvements to the Food & Beverage Solutions
business and activities to drive productivity savings. Exceptional cash
outflows for the period totalled £27 million. (For more information see Note
5).
Adjusted share of profit of Primient joint venture
Year ended 31 March 2024 Restated Constant
currency
£m 2023(2,3) change
%
£m
Adjusted operating profit 143 102 47%
Net finance expense (92) (80) (21%)
Adjusted share of profit from its own joint ventures after tax 32 33 2%
Adjusted profit before tax 83 55 58%
Adjusted share of profit of Primient joint venture(3) 35 24 53%
2 Reclassification adjustment: adjusted operating profit has been
increased by £2 million and adjusted share of profit from its own joint
ventures after tax reduced by the same amount.
3 The Group's share of the adjusted profit of Primient joint venture
is based on profit after tax. Primient is a US partnership (so its partners
rather than Primient itself are responsible for tax on its US income). Tax of
£12 million (2023 - £6 million) has been deducted from profit before tax
relating to tax on income earned by Primient's Brazilian subsidiary.
Adjusted operating profit was 47% higher in constant currency at £143 million
reflecting robust demand for sweeteners, strong customer contracting in 2023
and 2024, and improved operational performance. The net finance expense
increase reflected higher US interest rates. Statutory share of profit from
the joint venture for the 2024 financial year was £25 million, mainly
reflecting a £9 million charge for the amortisation of acquired intangibles
and other fair value assets which was excluded from the adjusted share of
profit.
Tate & Lyle received cash dividends from Primient of US$74 million in the
year.
Taxation
The adjusted effective tax rate for the year was 21.6% (2023 - 19.9%). The
increase in the rate reflects more profit taxed in higher rate jurisdictions
and the increase in the rate of UK corporation tax from 19% to 25%. Looking
ahead, we expect the adjusted effective tax rate for the year ending 31 March
2025 to be in line with the rate for fiscal year 2024. The reported effective
tax rate (on statutory earnings) for the year was 20.6% (2023 - 16.8%). The
lower rate in the comparative year was due to higher tax deductions on
exceptional items recorded by Primient.
Earnings per share
Adjusted earnings per share for continuing operations at 55.5p were 18% higher
(in constant currency). This increase reflects 16% higher profits after tax
and benefit from a lower weighted number of shares of 2ppts, reflecting the
share consolidation completed on 3 May 2022. Statutory diluted earnings per
share for continuing operations increased significantly to 44.4p (2023 -
30.8p), reflecting mainly higher exceptional costs in, and therefore a lower
share of profit from, joint ventures in the comparative period.
Return on capital employed (ROCE)
ROCE at 17.4% (2023 - 17.6%) was slightly lower reflecting the impact of the
acquisition of Quantum Hi-Tech part way through the comparative period. ROCE
increased by 40bps on an organic basis.
Dividend
The Board is recommending a final dividend of 12.9p (2023 - 13.1p) per share.
This brings the full year dividend to 19.1p (2023 - 18.5p), an increase of
3.2%. In February 2023, in our Capital Markets Event, we announced our policy
of paying interim dividends at the level of one third of the previous year's
full-year dividend, accordingly an interim dividend for the six months to 30
September 2023 was paid of 6.2p (30 September 2022 - 5.4p) per share. Subject
to shareholder approval, the proposed final dividend will be due and payable
on 2 August 2024 to all shareholders on the Register of Members on 21 June
2024. In addition to the cash dividend option, shareholders will continue to
be offered a Dividend Reinvestment Plan alternative.
Cash flow, net debt and liquidity
Free cash flow was £170 million (2023 - £121 million), an increase of £49
million. This reflected both higher profits and a strong focus on cash
generation which delivered a £112 million improvement in net working capital
mainly through improved inventory management discipline, with strong progress
in initiatives to optimise inventory, across all of; raw materials, in-process
inventory, and finished goods. Investments in infrastructure, capacity and
technology drove capital expenditure to £110 million, £39 million higher in
the year. Overall, cash conversion for the period improved by 23ppts to
85%(1).
We expect capital expenditure in the year ending 31 March 2025 to be in the
£100 million to £120 million range.
Net debt at 31 March 2024 was £153 million, £85 million lower than at 31
March 2023. Strong free cash flow generation and dividends received from
Primient of US$74 million (£59 million) were more than offset by outflows
including the payment of dividends to shareholders of £76 million and
payments in respect of share incentive schemes of £25 million. 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. On 30 October 2023, a US$25 million
US private placement 3.83% fixed rate note was repaid on maturity using cash.
At 31 March 2024, 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 (£633 million). Reported
leverage at 31 March 2024 was 0.5 times net debt to EBITDA. On a covenant
testing basis, the net debt to EBITDA ratio was 0.3 times, which was much
lower than the covenant threshold of 3.5 times.
On 16 May 2024 the Group's committed, undrawn and sustainability-linked
revolving credit facility of US$800 million (£633 million) was amended and
re-stated. The maturity date was extended for five years to 16 May 2029, and
includes two further one-year extension options, which are subject to lender
credit approval.
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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.
Alternative performance measures are used for and refer to continuing
operations only.
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 2024 2023 2024 2023
US dollar : sterling 1.26 1.20 1.26 1.24
Euro : sterling 1.16 1.16 1.17 1.14
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, the unwind of fair value adjustments and other M&A costs.
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).
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 excluding those related to the
re-positioning of the Food & Beverage Solutions business through a focus
on mix management and margin expansion.
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, including the volume
effect of the impact of the re-positioning of the Food & Beverage
Solutions business through a focus on mix management and margin expansion.
In the narrative where acquisitions are referred to in explaining revenue
growth, 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:
Year ended 31 March 2024 2023(1)
£m £m
Operating profit 207 196
Depreciation 58 59
Amortisation 36 36
Exceptional items 24 28
Other M&A activity-related items 2 2
Unwind of fair value adjustments 1 1
Adjusted EBITDA 328 322
Revenue 1 647 1 751
Adjusted EBITDA margin 19.9% 18.4%
1 Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page 33.
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:
Year ended 31 March 2024 2023(1)
£m £m
Net cash flow from operating activities 208 66
Capital expenditure (net) (110) (71)
Tax paid in respect of Primient partnership 12 5
Exceptional cash flows(2) 39 101
Interest received 19 11
Other M&A activity-related items 2 2
Free cash flow attributable to discontinued operations - 7
Free cash flow 170 121
1 Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page 33.
2 Includes exceptional cash flow of £27 million (2023 - £59 million)
and tax paid in relation to gain on disposal of Primient of £12 million (2023
- £42 million)
Year ended 31 March 2024 2023(1)
£m £m
Adjusted EBITDA 328 322
Adjusted for
Changes in working capital 7 (105)
Capital expenditure (net) (110) (71)
Net retirement benefit obligations (7) (9)
Net interest and tax paid(2) (57) (28)
Share-based payment charge 13 20
Other non-cash movements (4) (8)
Free cash flow 170 121
1 Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page 33.
2 Includes net interest paid of £5 million (2023 - £14 million) and
tax paid (excluding tax in relation to Primient) of £52 million (2023 - £14
million).
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 At
31 March 31 March
2024 2023
£m £m
Borrowings (544) (659)
Lease liabilities (46) (54)
Cash and cash equivalents 437 475
Net debt (153) (238)
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 At
31 March 31 March
2024 2023(1)
£m £m
Calculation of net debt to EBITDA ratio
Net debt 153 238
Adjusted EBITDA 328 322
Net debt to EBITDA ratio (times) 0.5 0.7
1 Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page 33.
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 the 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
and M&A related costs, 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.
31 March 31 March
2024 2023(1)
Twelve months ended £m £m
Adjusted EBITDA 328 322
Deduct:
Depreciation (58) (59)
Amortisation (36) (36)
Unwind of fair value adjustments (1) (1)
Profit before interest, tax and exceptional items for ROCE 233 226
Average invested operating capital 1 343 1 278
ROCE % 17.4% 17.6%
1 Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page 33.
Changes to the Board of Directors
· David Hearn became a Director and Chair of the Tate & Lyle Board on
1 January 2024 following the resignation of Dr Gerry Murphy. On his
appointment, Warren Tucker stepped down as Interim Chair but continues to
serve as a non-executive director and as Chair of the Audit Committee.
· Paul Forman, the Senior Independent Director retired from the Board on
31 December 2023 having served his nine-year term.
· Kimberly (Kim) Nelson became Senior Independent Director on 1 January
2024.
· Jeffrey (Jeff) Carr joined the Board as a non-executive director and as
a member of the Audit and Nominations Committees on 1 April 2024.
· On 24 April 2024, we announced that Dawn Allen, Chief Financial
Officer, had decided to leave the Company to take the position of Chief
Financial Officer of Haleon plc. Mrs Allen will remain with Tate & Lyle
until October 2024 to support an orderly transition. A process to appoint
her successor has begun.
Cautionary statement
This statement of Full-Year Results for the year ended 31 March 2024
(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
Nick Hasell, FTI Consulting (Media)
Tel: Mobile: +44 (0) 7796 192
688
Tel: Mobile: +44 (0) 7825 523 383
CONSOLIDATED INCOME STATEMENT
Year ended 31 March
Notes 2024 2023
£m £m
Continuing operations 1 647 1 751
Revenue 4
Operating profit 207 196
Finance income 19 12
Finance expense (25) (32)
Share of profit/(loss) of joint venture 25 (24)
Profit before tax 226 152
Income tax expense 6 (47) (25)
Profit for the year - continuing operations 179 127
Profit for the year - discontinued operations 9 63
Profit for the year - total operations 188 190
Attributable to:
Owners of the Company 188 190
Profit for the year - total operations 188 190
Earnings per share Pence Pence
Continuing operations: 8
- basic 45.2p 31.3p
- diluted 44.4p 30.8p
Total operations: 8
- basic 47.3p 47.0p
- diluted 46.5p 46.2p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 March
2024 2023
£m
£m
Profit for the year - total operations 188 190
Other comprehensive income /(expense)
Items that have been/may be reclassified to profit or loss:
(Loss)/gain on currency translation of foreign operations (50) 62
Fair value gain/(loss) on net investment hedges 7 (33)
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 on cash flow hedges (6) (2)
Recycling of cost of hedging - 5
Share of other comprehensive income/(expense) of joint ventures 2 (5)
Tax effect of the above items - 6
(47) (68)
Items that will not be reclassified to profit or loss:
Re-measurement of retirement benefit plans:
- actual return higher/(lower) on plan assets 12 (289)
- net actuarial gain on retirement benefit obligations 4 295
Changes in the fair value of equity investments at fair value through OCI (17) 3
Tax effect of the above items (4) -
(5) 9
Total other comprehensive expense (52) (59)
Total comprehensive income - total operations 136 131
Analysed by:
- Continuing operations 127 68
- Discontinued operations 9 63
Total comprehensive income - total operations 136 131
All amounts are attributable to owners of the Company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March
2024 2023
Notes £m £m
ASSETS
Non-current assets
Goodwill and other intangible assets 406 452
Property, plant and equipment (including right-of-use assets of £34 million 528 488
(2023 - £39 million))
Investments in joint venture 165 199
Investments in equities 28 42
Retirement benefit surplus 29 18
Deferred tax assets 28 13
Trade and other receivables 11 11
1 195 1 223
Current assets
Inventories 353 446
Trade and other receivables 294 351
Current tax assets 3 9
Derivative financial instruments - 3
Cash and cash equivalents 10 437 475
1 087 1 284
TOTAL ASSETS 2 282 2 507
EQUITY
Capital and reserves
Share capital 117 117
Share premium 408 408
Capital redemption reserve 8 8
Other reserves 82 143
Retained earnings 623 513
Equity attributable to owners of the Company 1 238 1 189
Non-controlling interests 1 1
TOTAL EQUITY 1 239 1 190
LIABILITIES
Non-current liabilities
Borrowings (including lease liabilities of £36 million (2023 - £44 million)) 10 573 592
Retirement benefit deficit 111 118
Deferred tax liabilities 19 30
Provisions 2 5
705 745
Current liabilities
Borrowings (including lease liabilities of £10 million (2023 - £10 million)) 10 17 121
Trade and other payables 259 372
Provisions 12 13
Current tax liabilities 47 62
Derivative financial instruments 3 4
338 572
Total liabilities 1 043 1 317
TOTAL EQUITY AND LIABILITIES 2 282 2 507
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 March
2024 2023
Notes £m £m
Cash flows from operating activities - total operations
Profit before tax from total operations 226 248
Adjustments for:
Depreciation of property, plant and equipment (including right-of-use assets 58 59
and excluding exceptional items)
Amortisation of intangible assets 36 36
Share-based payments 13 20
Net impact of exceptional income statement items 5 (3) (129)
Net finance expense 6 20
Share of (profit)/loss of joint ventures (25) 24
Net retirement benefit obligations (7) (9)
Other non-cash movements (3) (7)
Changes in working capital 7 (110)
Cash generated from total operations 308 152
Net income tax paid (64) (19)
Exceptional tax on gain on disposal of Primient (12) (42)
Interest paid (24) (25)
Net cash generated from operating activities 208 66
Cash flows from investing activities
Purchase of property, plant and equipment (101) (70)
Acquisition of businesses, net of cash acquired - (192)
Disposal of subsidiary (net of cash) 7 12 1 045
Investments in intangible assets (9) (8)
Purchase of equity investments (3) (3)
Disposal of equity investments 3 10
Interest received 19 11
Dividends received from joint ventures 59 41
Redemption of shares held in joint venture - 1
Net cash (used in)/ generated from investing activities (20) 835
Cash flows from financing activities
Purchase of own shares including net settlement (25) (13)
Cash inflow from additional borrowings - 1
Cash outflow from repayment of borrowings (101) (3)
Repayment of leases (13) (13)
Dividends paid to the owners of the Company (76) (570)
Net cash used in financing activities (215) (598)
Net (decrease)/increase in cash and cash equivalents 10 (27) 303
Cash and cash equivalents
Balance at beginning of year 475 127
Net (decrease)/increase in cash and cash equivalents (27) 303
Currency translation differences (11) 45
Balance at end of year 10 437 475
A reconciliation of the movement in cash and cash equivalents to the movement
in net debt is presented in Note 10.
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 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
Profit for the year - total operations - - - 188 188 - 188
Other comprehensive (expense)/income - - (64) 12 (52) - (52)
Total comprehensive (expense)/income - - (64) 200 136 - 136
Hedging losses transferred to inventory - - 4 - 4 - 4
Tax effect of the above item - - (1) - (1) - (1)
Transactions with owners:
Share-based payments, net of tax - - - 11 11 - 11
Purchase of own shares including net settlement - - - (25) (25) - (25)
Dividends paid - - - (76) (76) - (76)
At 31 March 2024 525 8 82 623 1 238 1 1 239
NOTES TO THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 MARCH 2024
1. Background
The financial information on pages 15 to 31 is extracted from the Group's
consolidated financial statements for the year ended
31 March 2024, which were approved by the Board of Directors on 22 May 2024.
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 2024. 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 25 July 2024 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 2024
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 2023. 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 2024 Annual Report. All
amounts are rounded to the nearest million, unless otherwise indicated.
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 to KPS Capital Partners, LP ('KPS') (the
'Transaction'). The Group currently holds a 49.7% interest in Primient.
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. 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.
New Accounting standards
On 1 April 2023, the Group adopted IFRS 17 'Insurance Contracts'. The standard
introduces a new model for accounting for insurance contracts. The adoption of
this standard has had no material impact on the Group's financial statements.
On 23 May 2023, amendments to IAS 12 'Income Taxes' came into effect relating
to International Tax Reform - Pillar Two Model Rules, which were endorsed by
the UK Endorsement Board on 19 July, whereby an entity shall disclose
qualitative and quantitative information about its exposure to Pillar Two
income taxes at the end of the reporting period. The amendments provide a
temporary mandatory exemption from deferred tax accounting for the top-up tax,
which is effective immediately. As at 31 March 2024, the Group has applied the
exemption to not recognise any deferred tax relating to top-up tax arising
from the Pillar Two legislation. The expected impact of this amendment has
been disclosed within the 2024 Annual Report.
On 9 April 2024, IFRS 18 Presentation and Disclosure in Financial Statements
was issued which will be effective for the Group from 1 April 2027 onwards. An
impact assessment on this new standard will be performed in due course. No
other new standards, new interpretations or amendments to standards or
interpretations that are effective or that have been published but are not yet
effective, are expected to have a material impact on the Group's financial
statements.
Alternative performance measures
The Group also presents alternative performance measures, including adjusted
earnings before interest, tax, depreciation and amortisation ('adjusted
EBITDA'), adjusted profit before tax, adjusted earnings per share, free cash
flow, net debt to EBITDA and return on capital employed. These alternative
performance measures reported by the Group are not defined terms under UK
adopted International Accounting Standards and may therefore not be comparable
with similarly-titled measures reported by other companies. Refer to further
details on pages 11 to 14 ('Non-GAAP measures').
The Group has amended its alternative performance measures to exclude certain
merger and acquisition ('M&A') costs in order to more clearly measure its
underlying performance. The prior year comparatives have been restated
accordingly.
Reconciliations of the alternative performance measures to the most directly
comparable IFRS measures are presented in Note 3.
Exceptional items
Exceptional items comprise items of income, expense and cash flow, including
tax items that: are material in amount; and are outside the normal course of
business or relate to events which do not frequently recur, and therefore
merit separate disclosure in order to provide a better understanding of the
Group's underlying financial performance. Exceptional items in the Group's
financial statements are classified on a consistent basis across accounting
periods. Examples of events that give rise to the disclosure of material items
of income, expense and cash flow as exceptional items include, but are not
limited to:
· significant impairment events;
· significant business transformation activities;
· disposals of operations or significant individual assets;
· litigation claims by or against the Group; and
· restructuring of components of the Group's operations.
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.
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.
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 2024 Year ended 31 March 2023*
Continuing operations IFRS Adjusting items Adjusted IFRS Adjusting Adjusted
£m unless otherwise stated reported reported reported items reported
Revenue 1 647 - 1 647 1 751 - 1 751
EBITDA 301 27 328 291 31 322
Depreciation(1) (58) 1 (57) (59) 1 (58)
Amortisation (36) 23 (13) (36) 23 (13)
Operating profit 207 51 258 196 55 251
Net finance expense (6) - (6) (20) - (20)
Share of profit/(loss) of joint venture 25 10 35 (24) 48 24
Profit before tax 226 61 287 152 103 255
Income tax expense (47) (15) (62) (25) (25) (50)
Profit for the year 179 46 225 127 78 205
Effective tax rate expense % 20.6% 21.6% 16.8% 19.9%
Earnings per share:
Basic earnings per share (pence) 45.2p - - 31.3p - -
Diluted earnings per share (pence) 44.4p 11.1p 55.5p 30.8p 18.8p 49.6p
* Restated to include other M&A activity-related items in
adjusting items. See Note 2.
1. Depreciation includes £1 million (2023 - £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
2024 2023*
£m
Continuing operations Notes £m
Exceptional costs included in operating profit 5 24 28
M&A costs 27 27
Adjusting items excluded from share of profit of joint venture 10 48
Total excluded from adjusted profit before tax 61 103
Tax credit on adjusting items 6 (15) (25)
Total excluded from adjusted profit for the year 46 78
* Restated to include other M&A activity-related items in
adjusting items. See Note 2.
The following table shows the M&A costs excluded from adjusted profit for
the year:
Year ended 31 March
2024 2023*
£m
Continuing operations £m
Amortisation of acquired intangible assets 23 23
Unwind of fair value adjustments(1) 2 2
Other M&A activity-related items 2 2
Total M&A costs 27 27
* Restated to include other M&A activity-related items in
adjusting items. See Note 2
1. Unwind of fair value adjustments includes depreciation of £1
million (2023 - £1 million) related to Quantum.
The following table shows the reconciliation of the Primient joint venture
adjusting items impacting adjusted profit for the year:
Year ended 31 March
2024 2023
£m
Continuing operations £m
Exceptional costs included in operating profit 1 52
Amortisation of acquired intangible assets and other fair value adjustments 9 (4)
Total excluded from adjusted share of profit 10 48
For the year ended 31 March 2023, the Group's share of exceptional costs of
Primient comprised 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.
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.
Tax paid refers to tax paid for the Group's operations excluding any tax paid
for its share of the Primient joint venture's results. The Group receives
specific dividends from Primient in order to settle such tax liabilities. As
all dividends received are excluded from free cash flow, it is appropriate to
exclude tax paid out of the receipt of these dividends.
The following table shows the reconciliation of free cash flow relating to
continuing operations:
Year ended 31 March
2024 2023*
£m £m
Adjusted operating profit from continuing operations 258 251
Adjusted for:
Adjusted depreciation and adjusted amortisation(1) 70 71
Share-based payments charge 13 20
Other non-cash movements(2) (4) (8)
Changes in working capital(3) 7 (105)
Net retirement benefit obligations (7) (9)
Net capital expenditure (110) (71)
Net interest and tax paid(4) (57) (28)
Free cash flow from continuing operations 170 121
* Restated to include other M&A activity-related items in
adjusting items. See Note 2.
1. Total depreciation of £58 million (2023 - £59 million) less £1
million of depreciation related to Quantum acquisition fair value adjustments
(2023 - £1 million) and amortisation of £36 million (2023 - £36 million)
less £23 million (2023 - £23 million) of amortisation of acquired intangible
assets.
2. In the year ended 31 March 2024, other non-cash movements excludes
an inflow of £1 million (2023 - inflow of £1 million) for an item 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. Net interest and tax paid excludes tax payments of £24 million
(2023 - £47 million) relating to the Group's share of Primient's tax
including the exceptional tax on the gain on disposal of Primient of £12
million (2023 - £42 million).
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.
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
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 includes interests in the Almex
and the Primient Covation joint ventures.
Group costs including head office, treasury and insurance activities have been
allocated to segments. 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.
Adjusted EBITDA is used 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. The segmental classification of exceptional items is
detailed in Note 5.
All revenue is from external customers.
Segmental results for the year ended 31 March 2024
IFRS 8 Segment results
Year ended 31 March 2024
Total operations Food & Beverage Solutions Primary Primient Joint Venture Total
£m Products £m £m
Sucralose Europe
£m £m
Revenue 1 359 174 114 - 1 647
Adjusted EBITDA(1) 281 52 (5) - 328
Adjusted EBITDA margin 20.7% 29.8% (4.8%) - 19.9%
Adjusted share of profit of joint venture(1) - - - 35 35
1. Reconciled to statutory profit for the year for continuing
operations in Note 3.
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) 273 58 (9) - 322
Adjusted EBITDA margin 18.9% 31.3% (6.5%) - 18.4%
Adjusted share of profit of joint venture(1) - - - 24 24
* Restated to include other M&A activity related items in adjusting
items. See Note 2.
1. Reconciled to statutory profit for the year for continuing
operations in Note 3.
Geographic disclosures
Year ended 31 March
2024 2023
Revenue - total operations £m £m
Food & Beverage Solutions
North America 642 687
Asia, Middle East, Africa and Latin America 396 432
Europe 321 319
Food & Beverage Solutions - total 1 359 1 438
Sucralose - total 174 184
Primary Products Europe 114 129
Total 1 647 1 751
5. Exceptional items
Exceptional (costs)/income recognised in the income statement are as follows:
Year ended 31 March
2024 2023
Income statement - continuing operations Footnotes £m £m
Restructuring costs (a) (21) (5)
Costs associated with the separation and disposal of Primient (b) (4) (25)
Stabiliser product contamination 1 (1)
Historical legal matters - 3
Exceptional items included in operating profit (24) (28)
Exceptional items related to share of profit of joint venture (see Note 3) (1) (52)
Exceptional items included in profit before tax (25) (80)
Exceptional items - continuing operations (25) (80)
Discontinued operations
Gain on disposal of Primient - 98
Exceptional items - discontinued operations - 98
Exceptional items - total operations (25) 18
Set out below are the principal components of the Group's exceptional items:
(a) As part of the Group's previously announced commitment to deliver
US$100 million of productivity savings in the five years ending 31 March 2028,
a £21 million charge has been recognised in the year ended 31 March 2024
related to organisational improvements to the Food & Beverage Solutions
business and activities to drive productivity savings. This charge includes
severance costs, project costs and information technology (IT) initiatives.
Included in this amount is a £4 million charge relating to a programme of
digital restructuring. These costs relate principally to an incremental
IT-capabilities investment programme to leverage digital technologies to
improve the Group's end-to-end customer and employee experience, and to drive
efficiency savings.
(b) The Group incurred certain separation costs related to the Primient
disposal which totalled £4 million. These costs relate principally to IT
costs in respect of the final separation of IT infrastructure following the
cessation of the transition services arrangement for IT support to Primient at
the end of the prior financial year.
The most significant exceptional costs in the comparative year related to the
Primient disposal separation costs, including IT costs to separate the Group's
and Primient's IT.
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 £7 million (2023 - £6 million).
Discontinued operations
In the year ended 31 March 2023, 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
Exceptional costs recorded in operating profit in continuing operations during
the year resulted in £21 million (outflow) disclosed in exceptional operating
cash flow. Exceptional costs recorded in the prior year resulted in further
cash outflows in the year of £6 million. Further details in respect of cash
flows from exceptional items are set out below.
Year ended 31 March
2024 2023
Net operating cash (outflows)/inflows on exceptional items Footnotes £m £m
Restructuring costs (a) (18) (3)
Costs associated with the separation and disposal of Primient (b) (7) (52)
US pension plan past service credit (c) (1) (1)
Stabiliser product contamination 1 (1)
Historical legal matters (2) (2)
Net cash outflows - continuing operations (27) (59)
Net cash outflows - discontinued operations (12) (42)
Net cash outflows - total operations (39) (101)
(c) In the 2022 financial 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 were paid in the
prior and 2022 financial year, with the remaining £1 million paid in the
current financial year.
Exceptional cash flows
The total cash adjustment relating to exceptional items presented in the cash
flow statement of £3 million (outflow) (2023 -
£129 million (outflow)) reflects the net exceptional charge in profit before
tax for total operations of £24 million (2023 - net exceptional gain of £70
million) which was £3 million lower (2023 - £129 million higher) than net
cash outflows of £27 million (2023 -
£59 million) set out in the table above.
The Group also paid £12 million (2023 - £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 £47 million, which when divided by statutory profit before tax from
continuing operations of £226 million gives a statutory effective tax rate of
20.6%.
· Adjusted income tax expense from continuing operations of £62
million, which when divided by adjusted profit before tax from continuing
operations of £287 million gives an adjusted effective tax rate of 21.6%
Adjusted income tax is different to statutory income tax due to the tax effect
of adjusting and exceptional items.
Analysis of charge for the year Year ended 31 March
Continuing operations 2024 2023
£m £m
Current tax (5) (1)
United Kingdom
Overseas (76) (66)
Tax credit on exceptional items 8 6
Credit in respect of previous financial years 2 16
(71) (45)
Deferred tax
Credit for the year 21 13
Credit/(charge) in respect of previous financial years 4 (6)
Tax charge on exceptional items (1) -
Tax credit on Primient exceptional items - 13
Income tax expense (47) (25)
Statutory effective tax rate % 20.6% 16.8%
Reconciliation to adjusted income tax expense
Year ended 31 March
2024 2023*
Continuing operations Note £m £m
Income tax expense (47) (25)
Add back the impact of: (7) (6)
Tax credit on exceptional items
Tax credit on Primient exceptional items - (13)
Tax credit on amortisation of acquired intangibles and other fair value (6) (7)
adjustments
Tax (credit)/charge on amortisation of Primient acquired intangibles and other (2) 1
fair value adjustments
Adjusted income tax expense 3 (62) (50)
Adjusted effective tax rate % 21.6% 19.9%
* Restated to include other M&A activity-related items in
adjusting items. See Note 2.
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 Primient Covation, 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$1.4 billion
(£1.1 billion), resulting in an exceptional gain on disposal before tax of
£98 million (see Note 5).
A reconciliation of gross cash proceeds received in the 2023 financial year is
shown in the table below:
Year ended 31 March
Reconciliation of gross cash proceeds 2023 2023
US$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
In the year ended 31 March 2024, the completion accounts adjustment in favour
of the Group of US$15 million (£12 million) was received.
The gain on disposal recognised in the 2023 financial year is shown in the
table below:
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 received of £12 million (this was subsequently received in the
2024 financial year).
2. Contingent consideration 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.
In the year ended 31 March 2024, a £9 million exceptional tax credit was
recognised, principally relating to the deferred tax with respect to the
change in measurement of the difference between the tax basis and carrying
value of the Primient joint venture.
In the year ended 31 March 2023, the tax charge arising on the gain on
disposal of Primient was £54 million. Of this amount,
£42 million was paid in the year ended 31 March 2023. This tax charge was
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 resulted 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
Cash flows 2024 2023
£m
£m
Total cash consideration of £253 million less completion accounts adjustments - 241
not yet received of £12 million - as shown above
Completion accounts adjustment received 12 -
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 12 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 dividing the profit attributable
to owners of the Company by the weighted
average number of ordinary shares outstanding during the period plus the
weighted average number of ordinary shares that would
be issued on conversion of all the dilutive potential ordinary shares into
ordinary shares.
The average market price of the Company's ordinary shares during the year was
691p (2023 - 752p). The dilutive effect of share-based incentives was 7.1
million shares (2023 - 7.3 million shares).
Year ended 31 March 2024 Year ended 31 March 2023
Continuing operations Discontinued operations Total Continuing operations Discontinued
operations Total
Profit attributable to owners of the Company (£ million) 179 9 188 127 63 190
Weighted average number of shares (million) - basic 397.1 397.1 397.1 404.1 404.1 404.1
Basic earnings per share (pence) 45.2p 2.1p 47.3p 31.3p 15.7p 47.0p
Weighted average number of shares (million) - diluted 404.2 404.2 404.2 411.4 411.4 411.4
Diluted earnings per share (pence) 44.4p 2.1p 46.5p 30.8p 15.4p 46.2p
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 2024 2023*
Notes £m £m
Profit attributable to owners of the Company 179 127
Adjusting items:
- exceptional costs in operating profit 5 24 28
- M&A costs 3 27 27
- Adjusted items excluded from share of profit of joint venture 3 10 48
- tax credit on adjusting items 6 (15) (25)
Adjusted profit attributable to owners of the Company 3 225 205
Weighted average number of shares (million) - diluted 404.2 411.4
Adjusted earnings per share (pence) - continuing operations 55.5p 49.6p
* Restated to include other M&A activity-related items in
adjusting items. See Note 2.
Year ended 31 March
Total operations Note 2024 2023*
£m £m
Adjusted profit attributable to owners of the Company - continuing operations 3 225 205
Adjusted loss attributable to owners of the Company - discontinued operations - (2)
Adjusted profit attributable to owners of the Company - total operations 225 203
Adjusted earnings per share (pence) - total operations 55.5p 49.2p
* Restated to include other M&A activity related items in
adjusting items. See Note 2.
9. Dividends on ordinary shares
Dividends on ordinary shares in respect of the financial year:
Year ended 31 March
2024 2023
Pence Pence
Per ordinary share:
Interim dividend paid 6.2 5.4
Final dividend proposed 12.9 13.1
Total dividend 19.1 18.5
The Directors propose a final dividend for the financial year of 12.9p per
ordinary share that, subject to approval by shareholders, will be paid on 2
August 2024 to shareholders who are on the Register of Members on 21 June
2024. Based on the number of ordinary shares outstanding at 31 March 2024, the
final dividend for the financial year is expected to amount to £51 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.
Based on the number of ordinary shares outstanding at 31 March 2024 and the
proposed dividend per share, the final dividend for the financial year is
expected to amount to £51 million.
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 2023 475 (713) (238)
Movements from cash flows (27) 114 87
Currency translation differences (11) 13 2
Lease liabilities - (7) (7)
Other non-cash movements - 3 3
At 31 March 2024 437 (590) (153)
In April 2023, the Group repaid the US$95 million (£77 million) US private
debt floating rate note ahead of its maturity using cash. A further US$25
million (£21 million) relating to a US Private Placement Note was repaid on
maturity in October 2023 from cash.
On 16 May 2024 the Group's committed, undrawn and sustainability-linked
revolving credit facility of US$800 million (£633 million) was amended and
re-stated. The maturity date was extended for five years to 16 May 2029, and
includes two further one-year extension options, which are subject to lender
credit approval.
11. Events after the balance sheet date
On 22 May 2024, the Group agreed the sale of the remaining interest in
Primient joint venture to KPS Capital Partners, LP for US$350 million.
Refer to the amendment and restatement of the revolving credit facility in the
section above.
There are no other post balance sheet events requiring disclosure in respect
of the year ended 31 March 2024.
ADDITIONAL INFORMATION
FOR THE YEAR ENDED 31 MARCH 2024
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 2024 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 2024 FX 2024 Underlying 2023* Change % Change in
Continuing operations
£m
£m
at constant
growth
£m
constant
currency
£m
currency
£m
%
Revenue 1 647 61 1 708 (43) 1 751 (6%) (2%)
Food & Beverage Solutions 281 12 293 20 273 3% 8%
Sucralose 52 3 55 (3) 58 (10%) (4%)
Primary Products Europe (5) - (5) 4 (9) 35% 34%
Adjusted EBITDA 328 15 343 21 322 2% 7%
Adjusted operating profit 258 13 271 20 251 3% 8%
Net finance expense (6) (1) (7) 13 (20) 67% 66%
Share of adjusted profit of joint venture 35 2 37 13 24 46% 53%
Adjusted profit before tax 287 14 301 46 255 12% 18%
Adjusted income tax expense (62) (3) (65) (15) (50) (22%) (29%)
Adjusted profit after tax 225 11 236 31 205 10% 16%
Adjusted diluted EPS (pence) 55.5p 2.8p 58.3p 8.7p 49.6p 12% 18%
* Restated to include other M&A activity-related items in
adjusting items. See Note 2.
Currency Sensitivities
Currency-sensitivity information for the year ended 31 March 2024 is
summarised below. This sets out the sensitivity to a 5% strengthening of
pound sterling impacting the Group's revenue and adjusted EBITDA in the year
ended 31 March 2024:
Currency Year ended 31 March 2024(1) Year ended Change (%)(3) Impact (£m) of
31 March 5% strengthening of GBP
2023(2) (vs 2023 average rate)(4)
Revenue Adjusted EBITDA
USD 1.26 1.20 4.3% (41) (13)
EUR 1.16 1.16 0.1% (25) (5)
Other(5) (8) 1
1. Based on average daily spot rates from 1 Apr 2023 to 31 March 2024
2. Based on average daily spot rates from 1 Apr 2022 to 31 March 2023
3. Change verses average spot rates for the previous year
4. Based on best prevailing assumptions around currency profiles
5. Other currencies include CNY, AUD, JPY, MXN, PLN, ZAR, BRL, AED, THB
Restatement of prior year alternative performance measures for treatment of
M&A related costs
In the year ended 31 March 2024, the Group amended its alternative performance
measures to fully exclude incremental merger and acquisition activity-related
costs.
Incremental M&A activity-related items are excluded as they are a direct
result of completing or attempting to complete an acquisition or disposal.
Their exclusion allows a better understanding of the Group's underlying
financial performance. Such items include:
1. Transaction costs for acquisitions and disposals
including advisory, legal, accounting, valuation and other professional or
consulting services;
2. Acquisition-related remuneration costs; and,
3. The cost of integrating an acquisition into the
Group, or separating a disposal from the Group, in the
12 months following the associated transaction.
Alternative performance measures for the year ended 31 March 2024 are reported
excluding these costs and the comparatives for the year ended 31 March 2023
have been restated accordingly. The additional information shown here provides
details supporting the restatement of information related to the year ended 31
March 2023.
Income statement measures
Year ended 31 March 2023 As reported Restated
previously £m £m
£m
Operating profit 196 - 196
Depreciation 59 - 59
Amortisation 36 - 36
Exceptional items 28 - 28
M&A costs - 2 2
Unwind of fair value adjustments 1 - 1
Adjusted EBITDA 320 2 322
Adjusted profit before tax 253 2 255
Adjusted profit after tax 203 2 205
Adjusted earnings per share 49.3p 0.3p 49.6p
For segmental reporting purposes, all restatements relate to the Food &
Beverage Solutions reporting segment, with EBITDA for that segment increasing
from £271 million to £273 million.
Cash flow measures
Year ended 31 March 2023 As reported Restated
previously £m £m
£m
Net cash flow from operating activities 66 - 66
Capital expenditure (net) (71) - (71)
Tax paid in respect of Primient partnership 5 - 5
Exceptional cash flows 101 - 101
Interest received 11 - 11
M&A activity-related items - 2 2
Free cash flow attributable to discontinued operations 7 - 7
Free cash flow 119 2 121
Pro-forma restatement of financial information for the sale of the remaining
interest in the Primient joint venture
To assist with understanding the impact of the transaction to sell our
remaining 49.7% interest in Primient to KPS, its majority owner, set out below
is pro-forma financial information for Tate & Lyle for the financial year
ended 31 March 2024. The pro-forma financial information is designed to show
the illustrative impact of this transaction on continuing operations of Tate
& Lyle as if it had completed on 1 April 2023, being the start of the
period presented. The pro-forma adjustments show a reduction in adjusted
diluted earnings per share for the year.
The transaction has been treated as a non-adjusting post balance sheet event
in the results for the financial year ended 31 March 2024. As a result, the
transaction has given rise to no change in Tate & Lyle's accounting for
Primient or of its presentation in the Tate & Lyle financial statements
for the financial year ended 31 March 2024.
Year ended 31 March 2024
£m unless otherwise stated Adjusted Impact of the Transaction Pro forma
reported
Revenue 1 647 - 1 647
Adjusted EBITDA 328 - 328
Depreciation (57) - (57)
Amortisation (13) - (13)
Adjusted operating profit 258 - 258
Net finance expense(1) (6) - (6)
Adjusted share of profit/(loss) of joint venture 35 (35) -
Adjusted profit before tax 287 (35) 252
Adjusted income tax expense (62) 8 (54)
Adjusted profit for the year 225 (27) 198
Effective tax rate expense % 21.6% 21.1%
Diluted number of shares outstanding: 404.2 404.2
Diluted earnings per share (pence) 55.5p (6.4p) 49.1p
1. No proforma adjustment for interest income generated from the
proceeds has been made as it has been assumed the net proceeds received from
this transaction will be returned to shareholders by way of an on-market share
buyback programme.
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