REG - Tate & Lyle PLC - Half-year Report
09/11/2023 07:00
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RNS Number : 8595S Tate & Lyle PLC 09 November 2023
Half-year results for the six months to 30 September 2023
Robust revenue, profit and cash performance
Adjusted performance(1) Statutory performance
2023 vs 2022 2023 vs 2022
Revenue £857m 4% Revenue £857m 1%
Food & Beverage Solutions £707m 5% Food & Beverage Solutions £707m 2%
Sucralose £89m (5)% Sucralose £89m (9)%
EBITDA £178m 7% Primary Products Europe £61m - %
Food & Beverage Solutions £153m 10%
Sucralose £28m (14)%
EBITDA margin 20.8% 70bps
Share of profit of Primient £17m 32%
Profit before tax £156m 16% Operating profit £123m 8%
Earnings per share 30.1p 19% Profit before tax £130m 92%
Free cash flow £77m £15m Diluted earnings per share 25.4p 90%
Key highlights
· Revenue growth +4%, with Food & Beverage Solutions (FBS) +5%
· Adjusted EBITDA +7%, driven by mix management, pricing, productivity
and cost discipline
· Adjusted profit before tax +16%, strong FBS growth, increased Primient
share of profit, lower finance charges
· Free cash flow(1) £77m, £15m higher reflecting cash conversion of
69%, 14ppts higher
· Investment in innovation and solution selling 11% higher
· Solutions new business wins by value up 4ppts to 22% of pipeline
· Major investment underway in new capacity for dietary fibres at
manufacturing facility in Slovakia
· 0.8p increase in interim dividend, up to 6.2p per share; reflecting
one third of prior year full-year dividend
Nick Hampton, Chief Executive said:
"Tate & Lyle delivered a robust financial performance in the first half
despite challenging market conditions and made good progress on its
growth-focused strategy.
Food & Beverage Solutions performed well with double-digit profit growth.
Revenue was higher benefiting from a combination of our focus on mix and
margin expansion as well as the recovery of inflation, partially offset by
softer consumer demand and customer de-stocking. In Sucralose, underlying
customer demand remained steady with the lower first-half performance
reflecting the phasing of orders in the comparative period.
To deliver our commitment to 'Science, Solutions, Society', we increased
investment in innovation and solution selling, announced a major expansion of
growth capacity for dietary fibres, and expanded the use of renewable energy
across our operations. These investments strengthen customer partnerships
and drive long-term growth.
The strategic re-positioning of Tate & Lyle to focus on speciality food
and beverage solutions is enhancing the quality of the business and driving
performance. Our strong ingredient portfolio and solutions capabilities in
sweetening, mouthfeel and fortification mean we are well-placed to benefit
from the long-term trends towards healthier, tastier and more sustainable food
and drink."
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
Outlook
We expect to deliver progress in-line with our five-year ambition to 31 March
2028 with revenue reflecting both strategic momentum and the impact of the
expected pass through of input cost deflation in the second half. Therefore,
for the year ending 31 March 2024, in constant currency, we expect to deliver:
· Revenue slightly ahead of the prior year; and
· EBITDA growth of 7% to 9%.
We continue to expect stronger profits from our minority holding in Primient.
Overview
Our business
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.
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 growth-focused strategy
We continued to invest in the first half to progress our growth-focused
strategy in line with our commitment to 'Science, Solutions, Society'.
Science
· Investment in innovation and solutions selling was 11% 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 18% 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 broadly in line on a reported basis.
· We expanded our sweetener portfolio by launching 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 and speed-to-market of mouthfeel solutions.
· We added 18 patents to our patent portfolio and now have over 500
patents granted and over 320 pending.
Solutions
· The value of solutions-based new business wins increased by 4ppts to
22% of revenue, with strong solutions performance in Asia, Middle East, Africa
and Latin America.
· Value of new business pipeline increased by 1%, with 38% of the total
pipeline coming from New Products.
· We opened a new Customer Innovation and Collaboration Centre in
Jakarta, Indonesia, bringing our global network of Centres to seventeen.
· Investment programme underway to add new capacity for non-GMO
PROMITOR(®) Soluble Fibres in Boleráz, Slovakia. Production of fibres from
the first phase, a €25 million investment, will start in mid-2024.
Society
· We advanced our sustainability agenda:
− Our production facility in Guarani, Brazil became our first site to be
100% powered by renewable energy.
− Our production facilities in the Netherlands, UK and Italy are buying
100% of their electricity from renewable sources.
− Intervention programmes are underway with corn farmers in the US, such
as managing nitrogen levels in the soil to increase crop yields, improve soil
health and minimise the impact on local watersheds.
− Around 90% of all waste generated is being beneficially used.
· 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 7.0 million tonnes of sugar from people's diets, equivalent to 28
trillion calories.
Strong cash generation
Free cash flow was £15 million higher at £77 million, benefiting from an
improvement in working capital of
£47 million. Capital expenditure increased by £20 million to £46 million to
deliver capacity expansion in our Food & Beverage Solutions business,
particularly for dietary fibres in Europe. Overall, cash conversion
increased to 69%, 14ppts higher. We are on track to deliver our ambition to
increase the conversion of our profit into cash to 75% over the five years to
31 March 2028.
At 30 September 2023, net debt was £249 million, £11 million higher than at
31 March 2023, with net debt to EBITDA at 0.8x, and liquidity of over £1.0
billion.
Productivity
We have made a good start to our US$100 million five-year productivity target
to 31 March 2028, with savings delivered in the first half of US$17 million
from areas such as operational efficiencies, supply chain and other cost
savings. We expect benefits from this programme for the full-year to be more
than US$25 million.
Group performance
Revenue Adjusted EBITDA
Half-year Change(1) Half-year Change(1)
£857m 4% £178m 7%
1 Growth in constant currency.
Overview
The Group delivered a robust financial performance. Revenue was up 4%
reflecting good mix management, pricing and the recovery of inflation.
Adjusted EBITDA was 7% higher with adjusted profit before tax 16% higher.
Food & Beverage Solutions performed well delivering revenue growth,
particularly in Europe, and adjusted EBITDA growth. The underlying
performance of the Sucralose business remained steady, with the phasing of
orders into the comparative period resulting in lower profits. The
optimisation of Primary Products Europe is continuing with losses
significantly reduced.
We continued to intentionally reset Tate & Lyle as a growth-focused
speciality business through a focus on revenue growth and margin expansion,
ahead of volume, by way of solution selling (by value up 4ppts to 22% for new
business wins), mix management and pricing. This approach, together with
softer consumer demand, customer de-stocking and the ongoing transition of
capacity out of Primary Products Europe combined to deliver 4% revenue growth.
Following consecutive periods of high input cost inflation which significantly
accelerated revenue growth, we are now seeing input cost deflation with
revenue in the second half expected to reflect the pass through of these lower
costs as customer contracts for the 2024 calendar year are renewed.
For Primient, the adjusted share of joint venture profit was £17 million, 32%
higher. Operating performance improved, supported by robust demand for
sweetener products, strong 2023 calendar year contracting and improving
operational performance, while increased interest rates drove finance charges
higher. We expect continued improvement in performance in the second half of
the 2024 financial year. Tate & Lyle received US$17 million in cash
dividends from Primient in the half, with a further US$37 million cash
dividend received on 2 November 2023.
Reporting segments
Food & Beverage Solutions
83% of Group revenue and 86% of Group adjusted EBITDA
Revenue Revenue Drivers Adjusted EBITDA
Half-year Change(1) Volume(2) Price Mix(2) Half-year Change(1)
North America £334m 2% (8)% 10% - -
Asia, Middle East, Africa and Latin America £200m 1% (8)% 9% - -
Europe £173m 19% (6)% 25% - -
Total £707m 5% (8)% 13% £153m 10%
Revenue was 5% higher in constant currency at £707 million. Lower volume
from softness in consumer demand and customer destocking led to 8ppts
reduction in revenue. Price mix increased revenue by 13ppts, reflecting 6ppts
from our focus on strategic mix management and solution selling and 7ppts from
the pass-through of input cost inflation (including higher corn costs).
Looking at the three regions, North America revenue was stable, Asia, Middle
East, Africa and Latin America was mixed with pockets of growth and some
regional challenges, while Europe was strong reflecting the pricing through of
significant input cost inflation.
· North America: Revenue was 2% higher. We saw good gains in the
beverage, confectionery, and bakery categories, particularly with our largest
customers. However, cost of living pressures on consumers and customer
destocking led to softer demand.
· Asia, Middle East, Africa and Latin America: Revenue was 1% higher.
In Asia, revenue was broadly in line with the comparative period. Revenue
growth in China was robust supported by good growth in the dairy category,
while revenue was lower in both south-east and north Asia. In Latin America,
revenue declined driven by lower priced imports from outside the region,
especially in Mexico, while revenue from central America was solid. In
Middle East and Africa, strong demand in north and west Africa more than
offset weaker demand in southern Africa.
· Europe: Revenue was 19% higher. We saw good revenue growth across
all categories, especially in dairy. We continued to exit some low margin
business and saw increased competition from imports from outside the region.
Adjusted EBITDA was up 10% in constant currency at £153 million benefiting
from mix management and the pricing through of input cost inflation. This,
together with the benefit from productivity and strong cost control, saw
adjusted EBITDA margins expand by 90bps in constant currency. The effect of
currency translation decreased adjusted EBITDA by £5 million.
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 5ppts 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 5ppts
greater.
Innovation and solution selling
Investment New Product Revenue Solutions
Innovation and solution selling Value Growth % of FBS revenue % of new business wins
11% £109m (1)% 15% 22%
Revenue from New Products was 1% lower. 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 18% higher. On this
like-for like basis, the mouthfeel platform saw good growth, reflecting growth
in clean label starches and cost optimisation, while Quantum helped to
accelerate growth in fortification.
Investment in innovation and customer-facing solution selling capabilities
including sensory and open innovation 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 22%. We
have set an ambition to increase this to 32% over the five years to 31 March
2028.
Sucralose
10% of Group revenue and 15% of Group adjusted EBITDA
Revenue Revenue Drivers Adjusted EBITDA
Half-year Change(1) Volume Price Mix Half-year Change(1)
£89m (5)% (8)% 3% £28m (14)%
Underlying customer demand for Sucralose remained steady. We delivered
attractive returns however revenue and adjusted EBITDA were lower than the
comparative period which benefited from the phasing of orders into the half.
Revenue declined by 5% reflecting more normal phasing and the recovery of
inflation. EBITDA declined as cost inflation across a range of inputs
increased production costs and multi-year contracts with our larger customers
limited our near-term recovery of these increases. Currency translation
decreased adjusted EBITDA by £1 million.
Primary Products Europe
7% of Group revenue and (1%) of Group adjusted EBITDA
Revenue Revenue Drivers Adjusted EBITDA
Half-year Change(1) Volume Price Mix Half-year Change(1)
£61m (2)% (25)% 23% £(3)m 51%
We continue to optimise the financial performance of Primary Products Europe
through the transition of capacity to speciality ingredients. Lower volume
also reflected reduced co-products. Revenue was slightly lower partially
mitigated by improved pricing from more favourable market conditions and the
recovery of input cost inflation. Adjusted EBITDA losses were significantly
reduced.
1 Growth in constant currency.
Webcast details
Following this statement's release on 9 November 2023 at 07.00am (UK time), a
live webcast will be held at 10.00am via this link
(https://event.on24.com/wcc/r/4398904/0D4F978DCC69E608B89685D1E6C18FE6) . A
replay of the webcast and presentation will be made available afterwards at
this link (https://tateandlyle-events.com/watch/half-year-sep2023) . 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
Six months to 30 September 2023 Constant
currency
£m 2022 change
%
£m
Adjusted EBITDA
Food & Beverage Solutions 153 144 10%
Sucralose 28 34 (14%)
Primary Products Europe (3) (6) 51%
Adjusted EBITDA 178 172 7%
Depreciation and adjusted amortisation (35) (35) (3%)
Adjusted operating profit 143 137 8%
Net finance expense (4) (11) 64%
Adjusted share of profit of Primient joint venture 17 13 32%
Adjusted profit before tax 156 139 16%
Net finance expense
Net finance expense at £4 million was 64% 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 £8 million were included in profit before tax.
Of these costs, £7 million related to organisational improvements to the
Food & Beverage Solutions business and activities to drive productivity
savings. Exceptional cash outflows for the period totalled £11 million.
(For more information see Note 5).
Adjusted share of profit of Primient joint venture
Six months to 30 September 2023 Constant
currency
£m 2022(1) change
%
£m
Adjusted operating profit 73 48 59%
Net finance expense (46) (35) (38%)
Adjusted share of profit from its own joint ventures after tax 10 18 (41%)
Adjusted profit before tax 37 31 25%
Adjusted share of profit of Primient joint venture(2) 17 13 32%
1 Reclassification adjustment: adjusted operating profit has been
increased by £5 million and adjusted share of profit from its own joint
ventures after tax reduced by the same amount.
2 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
£4 million (2022 - £5 million) has been deducted from profit before tax
relating to tax on income earned by Primient's Brazilian subsidiary.
Adjusted operating profit was 59% higher in constant currency at £73 million
reflecting robust demand for sweeteners, strong 2023 calendar year contracting
and improved operational performance in Primient's plants. Net finance
expense increased in the half reflecting higher US interest rates. Lower
profits in Primient's own joint ventures reflected lower volumes in Covation
PDO, and adverse foreign currency impacts in Almex.
Tate & Lyle received a cash dividend from Primient of US$17 million in the
half. A further cash dividend of US$37 million was paid on 2 November 2023
bringing the total dividend for the year to-date to US$54 million.
Taxation
The adjusted effective tax rate for the period was 21.9% (2022 - 21.9%).
Looking ahead, we continue to expect the adjusted effective tax rate for the
year ending 31 March 2024 to be one to two percentage points higher than the
full-year effective tax rate for the prior year of 19.9%. The expected
increase in the full-year rate reflects more profit taxed in higher rate
jurisdictions and the increase in the rate of UK corporation tax from 19% to
25%.
The reported effective tax rate (on statutory earnings) for the period was
21.3% (2022 - 18.4%). The lower rate in the comparative period was due to
higher tax deductions on exceptional items recorded by Primient.
Earnings per share
Adjusted earnings per share at 30.1p were 19% higher (in constant currency).
This increase reflects 16% higher profits after tax and benefit from a lower
weighted number of shares of 3ppts, reflecting the share consolidation
completed on 3 May 2022. Statutory diluted earnings per share for continuing
operations increased significantly to 25.4p (2022 - 13.3p), 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 for the 12 months ended 30 September 2023 at 16.8% was lower than the 12
months ended 31 March 2023, reflecting the impact of the acquisition of
Quantum part way through the comparative period. ROCE increased by 10bps on an
organic basis.
Dividend
In line with the policy announced in our Capital Markets Event in February
2023 that interim dividends will be at the level of one third of the previous
year's full-year dividend, the Board has approved an interim dividend for the
six months to 30 September 2023 of 6.2p (2022 - 5.4p) per share. This
dividend will be paid on 5 January 2024 to all shareholders on the Register of
Members on 24 November 2023. As well as the cash dividend option,
shareholders will be offered a Dividend Reinvestment Plan 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.
Cash flow, net debt and liquidity
Free cash flow was £77 million (2022 - £62 million), an increase of £15
million. This reflected both higher profits and a strong focus on cash
generation which delivered a £47 million improvement in net working capital
compared to the comparative period. Investments in infrastructure, capacity
and technology drove capital expenditure to £46 million, £20 million higher
in the period. Overall, cash conversion for the period improved by 14ppts to
69%(1).
Looking ahead, we continue to expect capital expenditure for the year ending
31 March 2024 to be in the
£90 million to £100 million range.
Net debt at 30 September 2023 was £249 million, £11 million higher than at
31 March 2023. Strong free cash flow generation and dividends received from
Primient of US$17 million were more than offset by outflows including the
payment of the final dividend to shareholders of £52 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 30 September 2023, the Group had access to £1.0 billion of available
liquidity through readily available cash and cash equivalents and access to a
committed, undrawn revolving credit facility of US$800 million (£655
million). Reported leverage at 30 September 2023 was 0.8 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.
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
Six months to 30 September 2023 2022 2023 2022
US dollar : sterling 1.26 1.21 1.22 1.11
Euro : sterling 1.16 1.17 1.15 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 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).
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:
Six months to 30 September 2023 2022
£m £m
Operating profit 123 114
Depreciation 29 29
Amortisation 18 18
Exceptional items 8 11
Unwind of fair value adjustments - -
Adjusted EBITDA 178 172
Revenue 857 849
Adjusted EBITDA margin 20.8% 20.2%
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:
Six months to 30 September 2023 2022
£m £m
Net cash flow from operating activities 86 38
Capital expenditure (net) (46) (26)
Tax paid in respect of Primient partnership 4 4
Exceptional cash flows(1) 23 52
Interest received 10 2
Collection on behalf of previous owners of Quantum and share based payment - (15)
adjustment
Free cash flow attributable to discontinued operations - 7
Free cash flow 77 62
1. Includes exceptional cash flow of £11 million (2022 - £37 million) and
tax paid in relation to gain on disposal of Primient of £12 million (2022:
£15 million)
Six months to 30 September 2023 2022
£m £m
Adjusted EBITDA 178 172
Adjusted for
Changes in working capital (28) (75)
Capital expenditure (net) (46) (26)
Net retirement benefit obligations (3) (3)
Net interest and tax paid (30) (13)
Share-based payment charge 8 7
Other non-cash movements (2) -
Free cash flow 77 62
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
30 September 31 March
2023 2023
£m £m
Borrowings (588) (659)
Lease liabilities (52) (54)
Cash and cash equivalents 391 475
Net debt (249) (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
30 September 31 March
2023 2023
£m £m
Calculation of net debt to EBITDA ratio
Net debt 249 238
Adjusted EBITDA 326 320
Net debt to EBITDA ratio (times) 0.8 0.7
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.
30 September 31 March
2023 2023
Twelve months ended £m £m
Adjusted EBITDA 326 320
Deduct:
Depreciation (59) (59)
Amortisation (36) (36)
Unwind of fair value adjustments (1) (1)
Profit before interest, tax and exceptional items for ROCE 230 224
Average invested operating capital 1 366 1 278
ROCE % 16.8% 17.5%
Changes to the Board of Directors
· Dr Gerry Murphy stepped down as Chair of the Board on 1 September 2023.
The Board appointed Warren Tucker as Interim Chair from that date.
· On 8 November 2023, it was announced that David Hearn was appointed as a
Director and Chair of the Tate & Lyle Board from 1 January 2024. On his
appointment, Warren Tucker will step down as Interim Chair but will continue
to serve as a non-executive director and as Chair of the Audit Committee.
· Mr Paul Forman, the Senior Independent Director and who led the Chair's
succession process, will retire from the Board on 31 December 2023 having
served his nine-year term. As previously announced, Kimberly (Kim) Nelson
will become Senior Independent Director on 1 January 2024.
Cautionary statement
This statement of Half-Year Results for the six months to 30 September 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
CONDENSED (INTERIM) CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Six months to Six months to Year to
31 March
30 September 30 September
2023
2023 2022
£m
£m
£m
Notes
Continuing operations 857 849 1 751
Revenue 4
Operating profit 123 114 196
Finance income 9 4 12
Finance expense (13) (15) (32)
Share of profit/(loss) of joint venture 11 (35) (24)
Profit before tax 130 68 152
Income tax expense 6 (28) (12) (25)
Profit for the period - continuing operations 102 56 127
Profit for the period - discontinued operations - 65 63
Profit for the period - total operations 102 121 190
Attributable to:
Owners of the Company 102 121 190
Profit for the period - total operations 102 121 190
Earnings per share Pence Pence Pence
Continuing operations:
- basic 8 25.8p 13.5p 31.3p
- diluted 8 25.4p 13.3p 30.8p
Total operations:
- basic 8 25.8p 29.4p 47.0p
- diluted 8 25.4p 29.0p 46.2p
CONDENSED (INTERIM) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Six months to Six months to Year to
31 March
30 September 30 September
2023
2023 2022
£m
£m
£m
Note
Profit for the period - total operations 102 121 190
Other comprehensive income / (expense)
Items that have been/may be reclassified to profit or loss:
(Loss)/gain on currency translation of foreign operations (13) 137 62
Fair value loss on net investment hedges (6) (71) (33)
Fair value loss on net investment hedges transferred to the income statement - 28 28
Gain on currency translation of foreign operations transferred to the income - (81) (81)
statement on sale of a subsidiary
Fair value gain on cash flow hedges transferred to the income statement on - (48) (48)
sale of a subsidiary
Net (loss)/gain on cash flow hedges (2) 3 (2)
Recycling of cost of hedging - 5 5
Share of other comprehensive income/(expense) of joint ventures 14 43 (5)
Tax effect of the above items (2) (1) 6
(9) 15 (68)
Items that will not be reclassified to profit or loss:
Re-measurement of retirement benefit plans:
- actual return lower on plan assets (52) (329) (289)
- net actuarial gain on retirement benefit obligations 66 335 295
Changes in the fair value of equity investments at fair value through OCI 11 (16) 10 3
Tax effect of the above items (3) 1 -
(5) 17 9
Total other comprehensive (expense)/income (14) 32 (59)
Total comprehensive income - total operations 88 153 131
Analysed by:
- Continuing operations 88 88 68
- Discontinued operations - 65 63
Total comprehensive income - total operations 88 153 131
All amounts are attributable to owners of the Company.
CONDENSED (INTERIM) CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
Notes At 30 September At 30 September At 31 March
2023 2022 2023
£m £m £m
ASSETS
Non-current assets
Goodwill and other intangible assets 430 498 452
Property, plant and equipment (including right-of-use assets of £38 million 505 502 488
(30 September 2022 -
£44 million, 31 March 2023 - £39 million))
Investments in joint venture 211 247 199
Investments in equities 11 27 49 42
Retirement benefit surplus 25 13 18
Deferred tax assets 16 11 13
Trade and other receivables 12 1 11
Derivative financial instruments 11 - 4 -
1 226 1 325 1 223
Current assets
Inventories 409 446 446
Trade and other receivables 299 410 351
Current tax assets 4 3 9
Derivative financial instruments 11 1 13 3
Cash and cash equivalents 10 391 516 475
1 104 1 388 1 284
TOTAL ASSETS 2 330 2 713 2 507
EQUITY
Capital and reserves
Share capital 117 117 117
Share premium 408 407 408
Capital redemption reserve 8 8 8
Other reserves 120 240 143
Retained earnings 556 449 513
Equity attributable to owners of the Company 1 209 1 221 1 189
Non-controlling interests 1 1 1
TOTAL EQUITY 1 210 1 222 1 190
LIABILITIES
Non-current liabilities
Borrowings (including lease liabilities of £42 million 10 597 770 592
(30 September 2022 - £52 million,
31 March 2023 - £44 million))
Retirement benefit deficit 110 125 118
Deferred tax liabilities 26 62 30
Provisions 4 8 5
737 965 745
Current liabilities
Borrowings (including lease liabilities of £10 million 10 43 27 121
(30 September 2022 - £11 million,
31 March 2023 - £10 million))
Trade and other payables 270 416 372
Provisions 15 13 13
Current tax liabilities 53 66 62
Derivative financial instruments 11 2 4 4
383 526 572
Total liabilities 1 120 1 491 1 317
TOTAL EQUITY AND LIABILITIES 2 330 2 713 2 507
CONDENSED (INTERIM) CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Six months to 30 September 2023 Six months to 30 September 2022 Year to
£m £m 31 March
2023
£m
Notes
Cash flows from operating activities - total operations
Profit before tax from total operations 130 166 248
Adjustments for:
Depreciation of property, plant and equipment (including right-of-use assets 29 29 59
and excluding exceptional items)
Amortisation of intangible assets 18 18 36
Share-based payments 8 8 20
Net impact of exceptional income statement items 5 (3) (124) (129)
Net finance expense 4 11 20
Share of (profit)/loss of joint ventures (11) 35 24
Net retirement benefit obligations (3) (3) (9)
Other non-cash movements (2) - (7)
Changes in working capital (28) (68) (110)
Cash generated from total operations 142 72 152
Net income tax paid (31) (8) (19)
Exceptional tax paid on gain on disposal of Primient (12) (15) (42)
Interest paid (13) (11) (25)
Net cash generated from operating activities 86 38 66
Cash flows from investing activities
Purchase of property, plant and equipment (42) (28) (70)
Acquisition of businesses, net of cash acquired - (192) (192)
Disposal of subsidiary (net of cash) 7 12 1 021 1 045
Investments in intangible assets (4) (5) (8)
Purchase of equity investments 11 (3) (2) (3)
Disposal of equity investments 11 2 9 10
Interest received 10 2 11
Dividends received from joint venture 13 13 41
Redemption of shares held in joint venture - 1 1
Net cash (used in)/generated from investing activities (12) 819 835
Cash flows from financing activities
Purchase of own shares including net settlement (25) (4) (13)
Preference share buy-back advance payment - (2) -
Cash inflow from additional borrowings 2 2 1
Cash outflow from repayment of borrowings (78) (2) (3)
Repayment of leases (6) (6) (13)
Dividends paid to the owners of the Company 9 (52) (548) (570)
Net cash used in financing activities (159) (560) (598)
Net (decrease)/increase in cash and cash equivalents 10 (85) 297 303
Cash and cash equivalents
Balance at beginning of period 475 127 127
Net (decrease)/increase in cash and cash equivalents (85) 297 303
Currency translation differences 1 92 45
Balance at end of period 10 391 516 475
A reconciliation of the movement in cash and cash equivalents to the movement
in net debt is presented in Note 10.
CONDENSED (INTERIM) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Share capital and share premium
Attributable to owners of the Company
Capital redemption reserve Non-controlling interests Total equity
Other reserves Retained earnings
£m £m £m £m £m £m £m
At 1 April 2023 525 8 143 513 1 189 1 1 190
Profit for the period - total operations - - - 102 102 - 102
Other comprehensive (expense) / income - - (25) 11 (14) - (14)
Total comprehensive (expense) / income - - (25) 113 88 - 88
Hedging losses transferred to inventory - - 2 - 2 - 2
Transactions with owners:
Share-based payments, net of tax - - - 7 7 - 7
Purchase of own shares including net settlement - - - (25) (25) - (25)
Dividends paid (Note 9) - - - (52) (52) - (52)
At 30 September 2023 525 8 120 556 1 209 1 1 210
At 1 April 2022 524 8 222 865 1 619 1 1 620
Profit for the period - total operations - - - 121 121 - 121
Other comprehensive income - - 25 7 32 - 32
Total comprehensive income - - 25 128 153 - 153
Hedging gains transferred to inventory - - (11) - (11) - (11)
Tax effect of the above item - - 4 - 4 - 4
Transactions with owners:
Share-based payments, net of tax - - - 8 8 - 8
Purchase of own shares including net settlement - - - (4) (4) - (4)
Dividends paid - - - (548) (548) - (548)
At 30 September 2022 524 8 240 449 1 221 1 1 222
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
TATE & LYLE PLC
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS TO 30 SEPTEMBER 2023
1. Presentation of half year financial information
The principal activity of Tate & Lyle PLC and its subsidiaries, together
with its joint venture, is the global provision of ingredients and solutions
to the food, beverage and other industries.
The Company is a public limited company incorporated and domiciled in the
United Kingdom and registered in England. The address of its registered office
is 5 Marble Arch, London W1H 7EJ. The Company has its primary listing on the
London Stock Exchange.
2. Basis of preparation
The Group's principal accounting policies are unchanged compared with the year
ended 31 March 2023. This condensed set of consolidated financial information
for the six months to 30 September 2023 has been prepared on a going concern
basis and on the basis of the accounting policies set out in the Group's 2023
Annual Report, in accordance with UK adopted IAS 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
The Directors are satisfied that the Group has adequate resources to continue
to operate as a going concern for the foreseeable future and that no material
uncertainties exist with respect to this assessment. In making the assessment,
the Directors have considered the Group's balance sheet position and forecast
earnings and cash flows for the period from the date of approval of this
condensed set of consolidated financial information to 31 March 2025. The
business plan used to support the going concern assessment (the "base case")
is derived from Board-approved forecasts together with certain downside
sensitivities.
Further details of the Directors' assessment are set out below:
At 30 September 2023, the Group has significant available liquidity, including
£391 million of cash and
US$800 million (£655 million) from a committed and undrawn revolving credit
facility, of which US$100 million matures in March 2025 and US$700 million
matures in March 2026. In April 2023, the Group repaid, ahead of maturity and
from existing cash, a US$95 million (£77 million) US Private Placement Note
which matured in October 2023. A further US$25 million relating to a US
Private Placement Note has also been repaid on maturity from cash after the
balance sheet date. The next earliest maturity date for any of the Group's US
Private Placement notes is October 2025, when US$180 million will mature.
The Group has only one debt covenant requirement which is to maintain a net
debt to EBITDA ratio of not more than 3.5 times. On the covenant-testing basis
this was 0.6 times at 30 September 2023. For a covenant breach to occur it
would require a significant reduction in Group profit. Such reduction is
considered to be extremely unlikely.
As set out in our 31 March 2023 Annual Report, during May 2023, the Directors
modelled the impact of a 'worst case scenario' to the 'base case' by including
the same two plausible but severe downside risks also used for the Group's
viability statement, being: an extended shutdown of one of our large corn wet
mill manufacturing facilities following operational failure or energy
shortage; and the loss of two of our largest Food & Beverage Solutions
customers. In aggregate, such 'worst case scenarios' did not result in any
material uncertainty to the Group's going concern assessment and the resultant
position still had significant headroom above the Group's debt covenant
requirement. The Directors also calculated a 'reverse stress test' which
represents the changes that would be required to the 'base case' in order to
breach the Group's debt covenant. Such 'reverse stress test' showed that the
forecast Group profit would have to reduce significantly in order to cause a
breach.
Since the assessment in May, the Directors updated the model to consider
similar downside cases and to reflect the most recent Board approved forecasts
incorporating the current inflationary outlook. Based on this assessment,
the Directors concluded that in both the base case and worst case scenario,
the Group has significant liquidity and covenant headroom throughout the
period to 31 March 2025. Accordingly, the Directors have concluded that there
are no material uncertainties with respect to going concern and have adopted
the going concern basis in preparing the condensed consolidated financial
information of the Group as at 30 September 2023.
The condensed set of consolidated financial information is unaudited but has
been reviewed by the external auditor and its report to the Company is set out
on page 33. The information shown for the year ended 31 March 2023 does not
constitute statutory accounts as defined in Section 435 of the Companies Act
2006 and has been extracted from the Group's 2023 Annual Report which has been
approved by the Board of Directors on 24 May 2023 and filed with the Registrar
of Companies.
The report of the auditor on the financial statements contained within the
Group's 2023 Annual Report was unqualified and did not contain a statement
under either Section 498(2) or Section 498(3) of the Companies Act 2006. The
interim financial statements should be read in conjunction with the annual
consolidated financial statements for the year ended 31 March 2023, which were
prepared in accordance with UK adopted International Accounting Standards.
The condensed set of consolidated financial information for the six months to
30 September 2023 on pages 12 to 30 was approved by the Board of Directors on
8 November 2023.
Risks and uncertainties
The principal risks and uncertainties affecting the business activities of the
Group are detailed on pages 67 to 75 of the Tate & Lyle Annual Report
2023, a copy of which is available on the Company's website at
www.tateandlyle.com (http://www.tateandlyle.com) . The Board considers that
the principal risks set out in the Annual Report 2023 remain unchanged and
that actions continue to be taken to substantially mitigate the impact of such
risks, should they materialise.
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 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.
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. The expected impact of this amendment will be
disclosed within the 2024 Annual Report.
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.
Use of 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 IFRS
and may therefore not be comparable with similarly-titled measures reported by
other companies. Refer to further details on pages 8 to 11 ('Non-GAAP
measures').
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:
Six months to 30 September 2023 Six months to 30 September 2022
Continuing operations IFRS Adjusting items Adjusted IFRS Adjusting Adjusted
£m unless otherwise stated reported reported reported items reported
Revenue 857 - 857 849 - 849
EBITDA 170 8 178 161 11 172
Depreciation(1) (29) 1 (28) (29) - (29)
Amortisation (18) 11 (7) (18) 12 (6)
Operating profit 123 20 143 114 23 137
Net finance expense (4) - (4) (11) - (11)
Share of profit/(loss) of joint venture 11 6 17 (35) 48 13
Profit before tax 130 26 156 68 71 139
Income tax expense (28) (6) (34) (12) (18) (30)
Profit for the period 102 20 122 56 53 109
Effective tax rate expense % 21.3% 21.9% 18.4% 21.9%
Earnings per share:
Basic earnings per share (pence) 25.8p - - 13.5p - -
Diluted earnings per share (pence) 25.4p 4.7p 30.1p 13.3p 12.8p 26.1p
Year ended 31 March 2023
Continuing operations IFRS Adjusting items Adjusted
£m unless otherwise stated reported reported
Revenue 1 751 - 1 751
EBITDA 291 29 320
Depreciation(1) (59) 1 (58)
Amortisation (36) 23 (13)
Operating profit 196 53 249
Net finance expense (20) - (20)
Share of (loss)/profit of joint venture (24) 48 24
Profit before tax 152 101 253
Income tax expense (25) (25) (50)
Profit for the year 127 76 203
Effective tax rate expense % 16.8% 19.9%
Earnings per share:
Basic earnings per share (pence) 31.3p - -
Diluted earnings per share (pence) 30.8p 18.5p 49.3p
1. For the six months to 30 September 2023, depreciation includes
depreciation of £1 million related to the Quantum acquisition fair value
adjustments which is excluded from adjusted operating profit (30 September
2022 - £nil; 31 March 2023 - £1 million).
The following table shows the reconciliation of the adjusting items in the
current and comparative periods:
Continuing operations Note Six months to 30 September 2023 Six months to Year to
£m
30 September 2022
31 March
£m
2023
£m
Exceptional costs included in operating profit 5 8 11 28
Amortisation of acquired intangible assets 11 12 23
Unwind of fair value adjustments(1) 1 - 2
Adjusting items excluded from share of profit of joint venture (as shown 6 48 48
below)
Total excluded from adjusted profit before tax 26 71 101
Tax credit on adjusting items (6) (18) (25)
Total excluded from adjusted profit for the period 20 53 76
1. For the six months to 30 September 2023, unwind of fair value
adjustments includes depreciation of £1 million (six months to 30 September
2022 - £nil; year ended 31 March 2023 - £1 million).
The following table shows the reconciliation of the Primient joint venture
adjusting items impacting adjusted profit after tax:
Primient adjusting items at Group's share Six months to 30 September 2023 Six months to Year to
£m
30 September 2022
31 March
£m
2023
£m
Exceptional costs included in operating profit 1 51 52
Amortisation of acquired intangibles and other fair value adjustments 5 (3) (4)
Total excluded from adjusted share of profit 6 48 48
The Group's share of exceptional costs of Primient in the six months to 30
September 2022 and year ended 31 March 2023 comprises 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:
Six months to Year to
30 September
31 March
2023 Six months to
2023
£m
30 September 2022
£m
£m
Adjusted operating profit from continuing operations 143 137 249
Adjusted for:
Adjusted depreciation and adjusted amortisation(1) 35 35 71
Share-based payments charge 8 7 20
Other non-cash movements(2) (2) - (8)
Changes in working capital(3) (28) (75) (105)
Net retirement benefit obligations (3) (3) (9)
Net capital expenditure (46) (26) (71)
Net interest and tax paid(4) (30) (13) (28)
Free cash flow from continuing operations 77 62 119
1. Total depreciation of £29 million (30 September 2022 - £29 million; 31
March 2023 - £59 million) less £1 million of depreciation related to Quantum
acquisition fair value adjustments (30 September 2022 - £nil; 31 March 2023 -
£1 million) and amortisation of £18 million (30 September 2022 - £18
million; 31 March 2023 - £36 million) less £11 million (30 September 2022 -
£12 million; 31 March 2023 - £23 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 six months to 30 September 2022, changes in working capital exclude
a cash inflow of £14 million collected on behalf of Quantum's previous owners
which was returned to the previous owners in the second half of the prior
year. In the six months to 30 September 2022 and 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. In the year ended 31 March 2023, 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 £16 million relating to
the Group's share of Primient's tax (30 September 2022 - £19 million; 31
March 2023 -
£47 million) including the exceptional tax on the gain on disposal of
Primient of £12 million (30 September 2022 - £15 million; 31 March 2023 -
£42 million) .
The following table shows the reconciliation of free cash flow to net cash
generated from operating cash flows:
Six months to Year to
30 September
31 March
2023 Six months to
2023
£m
30 September 2022
£m
£m
Free cash flow from continuing operations 77 62 119
Adjusted for:
Add: Adjusted free cash flow relating to discontinued operations - (7) (7)
Less: exceptional cash flow (11) (37) (59)
Less: tax payments relating to Primient and gain on disposal (16) (19) (47)
Less: interest received (10) (2) (11)
Add: share-based payment charge included in exceptional items - 1 -
Add: cash flow collected on behalf of previous owners of Quantum - 14 -
Add: net capital expenditure 46 26 71
Net cash generated from operating activities - total operations 86 38 66
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 Bio-PDO joint ventures.
Central 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.
All revenue is from external customers.
IFRS 8 Segment results
Six months to 30 September 2023
Total operations Food & Beverage Solutions Primary Primient Joint Venture Total
£m Products £m £m
Sucralose Europe
£m £m
Revenue 707 89 61 - 857
Adjusted EBITDA(1) 153 28 (3) - 178
Adjusted EBITDA margin 21.7% 30.8% (4.2%) - 20.8%
Adjusted share of profit of joint venture(1) - - - 17 17
1. Reconciled to statutory profit for the period for continuing operations in
Note 3.
Six months to 30 September 2022*
Total operations Food & Beverage Solutions Primary Primient Joint Venture Total
£m Products £m £m
Sucralose Europe
£m £m
Revenue 691 97 61 - 849
Adjusted EBITDA(1) 144 34 (6) - 172
Adjusted EBITDA margin 20.8% 34.5% (8.8%) - 20.2%
Adjusted share of profit of joint venture(1) - - - 13 13
* Restated to reflect change in operating segments.
1. Reconciled to statutory profit for the period for continuing operations in
Note 3
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.
Geographic disclosures
Six months to Six months to Year to
30 September 30 September 31 March
2023 2022 2023
Revenue - total operations £m £m £m
Food & Beverage Solutions
North America 334 340 687
Asia, Middle East, Africa and Latin America 200 208 432
Europe 173 143 319
Food & Beverage Solutions - total 707 691 1 438
Sucralose 89 97 184
Primary Products Europe 61 61 129
Total 857 849 1 751
5. Exceptional items
Exceptional (costs)/income recognised in the income statement are as follows:
Six months to Six months to Year to
30 September 30 September 31 March
2023 2022 2023
Income statement - continuing operations Footnotes £m £m £m
Restructuring costs (a) (7) (1) (5)
Costs associated with the separation and disposal of Primient (1) (13) (25)
(b)
Stabiliser product contamination - - (1)
Historical legal matters - 3 3
Exceptional items included in profit before tax (8) (11) (28)
Exceptional items - continuing operations (8) (11) (28)
Discontinued operations
Gain on disposal of Primient - 98 98
Exceptional items - discontinued operations - 98 98
Exceptional items - total operations (8) 87 70
Continuing operations for the six months to 30 September 2023
(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 £7 million charge has been recognised 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.
(b) The Group incurred certain separation costs related to the Primient
disposal which totalled £1 million. These costs consist principally of IT
costs and relate to 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 net £8 million exceptional costs recorded in operating profit in
continuing operations during the period resulted in £6 million (outflow)
disclosed in exceptional operating cash flow. In addition, exceptional costs
recorded in the prior year resulted in cash outflows in the period of £5
million.
In the prior period, the most significant exceptional costs 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 £2 million.
Discontinued operations
In the six months to 30 September 2022 and 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
Further details in respect of cash flows from exceptional items are set out
below.
Net operating cash outflows on exceptional items Footnotes Six months to Six months to 30 September 2022 Year to
30 September
31 March 2023
2023 £m
£m
£m
Restructuring costs (a) (4) - (3)
Costs associated with the separation and disposal of Primient (5) (35) (52)
(b)
US pension plan past service credit - - (1)
Stabiliser product contamination - - (1)
Historical legal matters (2) (2) (2)
Net operating cash outflows - continuing operations (11) (37) (59)
Net operating cash outflows - discontinued operations - - (42)
Net operating cash outflows - total operations (11) (37) (101)
Exceptional cash flows
The total cash adjustment relating to exceptional items presented in the cash
flow statement of £3 million outflow reflects the net exceptional charge in
profit before tax for total operations of £8 million which was £3 million
lower than net cash outflows of
£11 million set out in the table above.
6. Income tax expense
Income tax for the period is presented as follows:
· Statutory current and deferred taxes from continuing operations of
£28 million, which when divided by statutory profit before tax from
continuing operations of £130 million gives a statutory effective tax rate of
21.3%.
· Adjusted income tax expense from continuing operations of £34
million, which when divided by adjusted profit before tax from continuing
operations of £156 million gives an adjusted effective tax rate of 21.9%.
Adjusted income tax is different to statutory income tax due to the tax
effect of adjusting and exceptional items.
Analysis of charge for the period
Six months to Six months to Year to
30 September 30 September 31 March
Continuing operations 2023 2022 2023
£m £m £m
Current tax:
United Kingdom (3) (2) (1)
Overseas (38) (16) (66)
Tax credit on exceptional items 2 2 6
(Charge)/credit in respect of previous financial years (1) - 16
(40) (16) (45)
Deferred tax:
Credit/(charge) for the period 9 (3) 13
Credit/(charge) in respect of previous financial years 3 (5) (6)
Tax credit on Primient exceptional items - 12 13
Income tax expense (28) (12) (25)
Statutory effective tax rate % 21.3% 18.4% 16.8%
Reconciliation to adjusted income tax expense
Six months to Six months to Year to
30 September 30 September 31 March
2023 2022 2023
Continuing operations £m £m £m
Income tax expense: (28) (12) (25)
Add back the impact of:
Tax credit on exceptional items (2) (2) (6)
Tax credit on Primient exceptional items - (12) (13)
Tax credit on amortisation of acquired intangibles and other fair value (3) (3) (7)
adjustments
Tax (credit)/charge on amortisation of Primient acquired intangibles and other (1) (1) 1
fair value adjustments
Adjusted income tax expense (34) (30) (50)
Adjusted effective tax rate % 21.9% 21.9% 19.9%
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$1.4 billion
(£1.1 billion), resulting in an exceptional gain on disposal before tax of
£98 million (see Note 5).
A reconciliation of gross cash proceeds received is shown in the tables below:
Reconciliation of gross cash proceeds (US$m) Six months to Year to
30 September 31 March
2022 2023
US$m
US$m
Cash consideration 330 330
Less: completion accounts adjustments in favour of the Group not yet received (15) (15)
Add: cash received for intercompany loan notes, payables and transaction costs 1 089 1 089
Add: contingent consideration received - 31
Disposal of Primient, gross proceeds 1 404 1 435
Reconciliation of gross cash proceeds (£m) Six months to Year to
30 September 31 March
2022 2023
£m
£m
Cash consideration 253 253
Less: completion accounts adjustments in favour of the Group not yet received (12) (12)
Add: cash received for intercompany loan notes, payables and transaction costs 830 830
Add: contingent consideration received - 24
Disposal of Primient, gross proceeds 1 071 1 095
In the six months to 30 September 2023, the completion accounts adjustment in
favour of the Group of £12 million was received.
Gain on disposal Six months to 30 September 2022 Year ended 31 March 2023
£m £m
Cash consideration - as shown in table above(1) 253 253
Contingent consideration received(2) 24 24
Fair value of investment in Primient joint venture on initial recognition 253 253
Total consideration for equity 530 530
Primient net assets derecognised on disposal on 1 April 2022(3) (539) (539)
Recycling of accumulated foreign exchange from other comprehensive income to 81 81
the income statement
Recycling of cash flow hedges from other comprehensive income to the income 48 48
statement
Impact of deal contingent forward(4) (33) (33)
Other amounts 11 11
Gain on disposal before tax 98 98
Tax on gain on disposal (33) (33)
Gain on disposal 65 65
1 Included deferred consideration relating to the completion accounts
adjustment not yet received of £12 million.
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 were 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 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:
Cash flows Six months to 30 September 2022 Year ended 31 March 2023
£m £m
Total cash consideration of £253 million less completion accounts adjustments 241 241
not yet received of £12 million - as shown above
Repayment of intercompany loan notes and payables and transaction costs 830 830
Less: cash outflow relating to deal contingent forward (33) (33)
Less: net cash derecognised on disposal (17) (17)
Add: contingent consideration received - as shown above - 24
Disposal of business, net of cash derecognised on disposal 1 021 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 period (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 ordinary equity holders of the parent 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 six
months to 30 September 2023 was 751p (30 September 2022 - 762p; 31 March 2023
- 752p). The dilutive effect of share-based incentives was 6.2 million shares
(30 September 2022 - 5.3 million shares; 31 March 2023 - 7.3 million shares).
Six months to 30 September 2023 Six months to 30 September 2022
Continuing operations Discontinued operations Total Continuing operations Discontinued
operations Total
Profit attributable to owners of the Company (£ million) 102 - 102 56 65 121
Weighted average number of shares (million) - basic 398.2 n/a 398.2 410.5 410.5 410.5
Basic earnings per share (pence) 25.8p - 25.8p 13.5p 15.9p 29.4p
Weighted average number of shares (million) - diluted 404.4 n/a 404.4 415.8 415.8 415.8
Diluted earnings per share (pence) 25.4p - 25.4p 13.3p 15.7p 29.0p
Year ended 31 March 2023
Continuing operations Discontinued operations Total
Profit attributable to owners of the Company (£ million) 127 63 190
Weighted average number of shares (million) - basic 404.1 404.1 404.1
Basic earnings per share (pence) 31.3p 15.7p 47.0p
Weighted average number of shares (million) - diluted 411.4 411.4 411.4
Diluted earnings per share (pence) 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:
Continuing operations Notes Six months to Six months to Year to
30 September 30 September 31 March
2023 2022 2023
£m £m £m
Profit attributable to owners of the Company 102 56 127
Adjusting items:
- exceptional costs in operating profit 5 8 11 28
- amortisation of acquired intangible assets and other fair value adjustments 3 12 12 25
- adjusting items excluded from share of profit of joint venture 3 6 48 48
- tax credit on adjusting items 3, 6 (6) (18) (25)
Adjusted profit attributable to owners of the Company 3 122 109 203
Weighted average number of shares (million) - diluted 404.4 415.8 411.4
Adjusted earnings per share (pence) - continuing operations 30.1p 26.1p 49.3p
Total operations Note Six months to Six months to Year to
30 September 30 September 31 March
2023 2022 2023
£m £m £m
Adjusted profit attributable to owners of the Company - Continuing operations 3 122 109 203
Adjusted loss attributable to owners of the Company - Discontinued operations - - (2)
Adjusted profit attributable to owners of the Company - Total operations 122 109 201
Adjusted earnings per share (pence) - total operations 30.1p 26.1p 48.9p
9. Dividends on ordinary shares
The Directors have declared an interim dividend of 6.2p per share for the six
months to 30 September 2023 (six months to
30 September 2022 - 5.4p per share), payable on 5 January 2024.
The final dividend for the year ended 31 March 2023 of £52 million,
representing 13.1p per share, was paid during the six months to 30 September
2023.
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 2023 475 (713) (238)
Movements from cash flows (85) 82 (3)
Currency translation differences 1 (7) (6)
Lease liabilities - (4) (4)
Other non-cash movements - 2 2
At 30 September 2023 391 (640) (249)
In April 2023, the Group repaid, ahead of maturity and from existing cash,
US$95 million relating to its US Private Placement Note which matured in
October 2023.
11. Investments in equities and financial instruments
Carrying amount versus fair value
The fair values of the Group's cash and cash equivalents, trade and other
receivables and trade and other payables approximate their carrying amounts
due to their short-term nature. The fair value of borrowings, excluding lease
liabilities, is estimated to be £520 million (30 September 2022 - £656
million; 31 March 2023 - £608 million) and has been determined by discounted
estimated cash flows with an applicable market quoted yield, using quoted
market prices, discounted estimated cash flows based on broker dealer
quotations or quoted market prices. The carrying value of other assets and
liabilities held at amortised cost is not materially different from their fair
value.
Fair value measurements recognised in the balance sheet
The table below shows the Group's financial assets and liabilities measured at
fair value at 30 September 2023. The fair value hierarchy categorisation,
valuation techniques and inputs, are consistent with those used in the year
ended 31 March 2023.
At 30 September 2023 At 31 March 2023
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Assets at fair value
Financial assets at FVPL(1) - - 20 20 - - 20 20
Financial assets at FVOCI(1) - - 7 7 - - 22 22
Derivative financial instruments:
- commodity derivatives 1 - - 1 3 - - 3
Assets at fair value 1 - 27 28 3 - 42 45
Liabilities at fair value
Derivative financial instruments:
- commodity derivatives (2) - - (2) (4) - - (4)
Liabilities at fair value (2) - - (2) (4) - - (4)
1. Included in Investment in equities in the Consolidated Statement of
Financial Position.
Included in investments in equities are assets classified as FVOCI. These
relate principally to long-term strategic investments that the Group does not
control, nor has significant influence over. The investments are non-listed
and are mainly start-ups or in the earlier stages of their lifecycle.
Therefore, fair value has been determined based on the most recent funding
rounds adjusted for indicators of impairment. The fair values assigned to each
of the investments have different significant unobservable inputs.
For assets and liabilities that are recognised in the financial statements at
fair value on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorisation (based
on the lowest level of input that is significant to the fair value measurement
as a whole) at the end of the reporting period. There were no transfers
between Level 1 and Level 2 fair value measurements during the period, and no
transfers into or out of Level 3 fair value measurements during the six months
to 30 September 2023.
The following table reconciles the movement in the Group's net financial
assets classified in 'Level 3' of the fair value hierarchy:
Financial assets at FVPL Financial assets at FVOCI Total
£m £m £m
At 1 April 2023 20 22 42
Other comprehensive income(1) - (16) (16)
Purchases 2 1 3
Disposals (2) - (2)
At 30 September 2023 20 7 27
1. The £16 million charge recognised in other comprehensive income
relates to the full impairment of the Group's investment in Infinant Health.
At the balance sheet date it is considered unlikely that the Group will
participate in the forthcoming funding round which will result in the Group's
interest in that company being fully diluted.
12. Events after the balance sheet date
On 30 October 2023, the Group repaid its US$25 million US private placement
3.83% fixed rate note on maturity using cash.
On 2 November 2023, the Group received dividend payments of US$37 million from
Primient.
There are no other material post balance sheet events requiring disclosure in
respect of the six months to 30 September 2023.
Calculation of changes in constant currency
Where changes in constant currency are presented in this statement, they are
calculated by retranslating current period results at prior period exchange
rates. The following table provides a reconciliation between the current
period and the six months to September 2022 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.
Six months to 30 September 2023 FX 2023 Underlying 2022* Change % Change in
£m
£m
at constant
growth
£m
constant
Adjusted performance
currency
£m
currency
Continuing operations
£m
%
Revenue 857 22 879 30 849 1% 4%
Food & Beverage Solutions 153 5 158 14 144 7% 10%
Sucralose 28 1 29 (5) 34 (18%) (14%)
Primary Products Europe (3) - (3) 3 (6) 52% 51%
Adjusted EBITDA 178 6 184 12 172 4% 7%
Adjusted operating profit 143 5 148 11 137 4% 8%
Net finance expense (4) - (4) 7 (11) 65% 64%
Share of adjusted profit of joint venture 17 - 17 4 13 26% 32%
Adjusted profit before tax 156 5 161 22 139 12% 16%
Adjusted income tax expense (34) (1) (35) (5) (30) (12%) (16%)
Adjusted profit after tax 122 4 126 17 109 12% 16%
Adjusted EPS (pence) 30.1p 1.1p 31.2p 5.1p 26.1p 15% 19%
* Restated to reflect change in operating segments and use of adjusted
EBITDA.
Currency Sensitivities
Currency-sensitivity information for the six months to 30 September 2023 is
summarised below. This sets out the sensitivity to a 5% strengthening of
pound sterling impacting the Group's revenue and EBITDA in the six months to
30 September 2023:
Currency Six months to 30 September 2023(1) Six months to Change (%)(3) Six months impact (£m) of
30 September 2022(2)
5% strengthening of GBP
(vs 2023 average rate)(4)
Revenue EBITDA
USD 1.26 1.21 3.5% (21) (7)
EUR 1.16 1.17 (1.5%) (13) (3)
Other(5) (6) -
1. Based on average daily spot rates from 1 Apr 2023 to 30 Sep 2023
2. Based on average daily spot rates from 1 Apr 2022 to 30 Sep 2022
3. Change verses average spot rates for the previous period
4. Based on best prevailing assumptions around currency profiles
5. Other currencies include CNY, AUD, JPY, MXN, PLN, ZAR, BRL, AED, THB
TATE & LYLE PLC
ADDITIONAL INFORMATION
FOR THE SIX MONTHS TO 30 SEPTEMBER 2023
Statement of Directors' responsibilities
The Directors confirm: that this condensed consolidated set of financial
information has been prepared on the basis of the accounting policies set out
in the Group's 2023 Annual Report, and in accordance with UK adopted
International Accounting Standard 34 "Interim Financial Reporting"; that the
condensed consolidated set of financial statements gives a true and fair view
of the assets, liabilities, financial position and profit or loss as required
by the Disclosure Guidance and Transparency Rules (DTRs) sourcebook of the
United Kingdom's Financial Conduct Authority, paragraph DTR 4.2.4; and that
the interim management report herein includes a fair review of the information
required by paragraphs DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the
first six months and their impact on the condensed set of consolidated
financial information;
· a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
· material related party transactions in the first six months and any
material changes in the related party transactions described in the last
Annual Report.
The Directors are responsible for the maintenance and integrity of the
Company's website. UK legislation governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
The Directors of Tate & Lyle PLC are listed in the Tate & Lyle Annual
Report for the year ended 31 March 2023. The following changes have been made
to the Board in the six months to 30 September 2023.
Dr Gerry Murphy stepped down as Chair of the Board on 1 September 2023. The
Board appointed Warren Tucker as Interim Chair from that date.
On 8 November 2023, it was announced that David Hearn was appointed as a
Director and Chair of the Tate & Lyle Board from
1 January 2024. On his appointment, Warren Tucker will step down as Interim
Chair but will continue to serve as a non-executive director and as Chair of
the Audit Committee.
Mr Paul Forman, the Senior Independent Director and who led the Chair's
succession process, will retire from the Board on
31 December 2023 having served his nine-year term. As previously announced,
Kimberly (Kim) Nelson will become Senior Independent Director on 1 January
2024.
For and on behalf of the Board of Directors:
Nick Hampton
Dawn Allen
Chief Executive
Chief Financial Officer
8 November 2023
INDEPENDENT REVIEW REPORT TO TATE & LYLE PLC
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2023 which comprises the condensed (interim) consolidated income
statement, condensed (interim) consolidated statement of comprehensive income,
condensed (interim) consolidated statement of financial position, condensed
(interim) consolidated statement of cash flows, condensed (interim)
consolidated statement of changes in equity and the related explanatory notes
1 to 12. We have read the other information contained in the half yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2023 is not prepared,
in all material respects, in accordance with UK adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" (ISRE) issued by the Financial
Reporting Council. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting'.
Conclusions relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London
8 November 2023
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