REG - Tate & Lyle PLC - Operating Segment Restatement
04/04/2023 11:00
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RNS Number : 2123V Tate & Lyle PLC 04 April 2023
4 APRIL 2023 - TATE & LYLE PLC
RESTATEMENT OF PRIOR YEAR FINANCIAL INFORMATION FOR ADOPTION OF SIMPLIFIED
OPERATING SEGMENTS
Introduction
On 8 February 2023, Tate & Lyle PLC ('Tate & Lyle' or the 'Group')
announced it would be simplifying its disclosure framework, with the Group's
core operations moving to three operating segments: Food & Beverage
Solutions; Sucralose; and Primary Products Europe. These segments reflect the
new shape of the Group.
There are three areas of disclosure simplification: firstly, the
disaggregation of Food & Beverage Solutions and Primary Products Europe,
making each a separate operating segment to improve transparency and clearly
highlight the performance of each. Secondly, that Central costs will no
longer be reported separately and finally, the Group's primary profit measure
will now become adjusted earnings before interest, tax, depreciation and
amortisation ('Adjusted EBITDA').
In advance of the publication on 25 May 2023 of Tate & Lyle's results for
the year ended 31 March 2023, this announcement is being made to provide
details of the framework under which the future results of Tate & Lyle
will be reported and also set out the restated comparative information for the
year ended 31 March 2022 and the six months to 30 September 2022.
Outline of the restated financial information
Set out in the financial information below are details of the restatement for
the year ended 31 March 2022 and the six months ended 30 September 2022,
including a reconciliation from the results originally disclosed for the year
ended 31 March 2022. The operations of the Group now comprise the following:
· Food & Beverage Solutions operating segment
· Sucralose operating segment
· Primary Products Europe operating segment.
The financial information has been restated as follows:
· The transfer of Primary Products Europe activities from within the
Food & Beverage Solutions segment to a stand-alone operating segment
· The allocation of Central costs to the other operating segments,
which has included the re-allocation of total selling and general
administrative costs, firstly attributed by the support provided to each
segment directly, then with non-directly attributed costs allocated on the
basis of segment share of Group gross profit
· Adoption of Adjusted EBITDA as the Group's primary profit metric.
Accordingly, previously reported adjusted operating profits have been restated
to add-back segment depreciation and amortisation.
The adjustments made reflect the reclassification and allocation of previously
disclosed items, with no change in totals for the Group. All other Group
profit metrics and earnings per share remain unchanged.
On 1 April 2022, Tate & Lyle announced that it had completed the sale of a
controlling stake in Primient and its subsidiaries which holds Tate &
Lyle's former Primary Products business in North America and Latin America and
its interests in the Almidones Mexicanos S.A de C.V and DuPont Tate & Lyle
Bio-Products Company, LLC joint ventures (the 'Transaction'). Tate &
Lyle continues to hold a 49.7% interest in Primient. Details of this
Transaction are provided in the Annual Report for the year ended 31 March
2022. Tate & Lyle equity accounts for Primient, and it also constitutes
an operating segment.
Also set out in the financial information, is a further adjustment to Adjusted
EBITDA to illustrate the pro-forma impact of the Transaction for the year
ended 31 March 2022. Such adjustment reflects the impact of long-term
agreements that exist between the Group and Primient from completion of the
Transaction, including, inter alia, for the cost of certain services provided
by Primient for procurement of net raw materials and the manufacture of
finished goods products. The adjustment, a pro-forma charge of £7 million
for the year ended 31 March 2022, is unchanged from that previously reported
in the Annual Report for that year (see page 43 - "Unaudited pro-forma
financial results for the year ended 31 March 2022").
Pro-forma Adjusted EBITDA is designed to show the illustrative impact of the
Transaction on continuing operations as if it had completed on 1 April 2021,
being the start of the earliest period presented in this document.
Accordingly, no pro-forma adjustment is provided for the six months to 30
September 2022 as that period is wholly after the completion of the
Transaction.
There is no impact on the restatements set out below from the corresponding
change to the pro-forma adjustment of the Group's equity accounted share of
profits of Primient from completion, which can be seen in the above-mentioned
section of the 2022 Annual Report. This adjustment is not shown in this
document.
RESTATED FINANCIAL INFORMATION
Summary of restated financial results for the year ended 31 March 2022
Year ended 31 March 2022(1) 2022
Continuing Operations
£m
Revenue 1 375
Adjusted EBITDA
- Food & Beverage Solutions 207
- Sucralose 53
- Primary Products Europe (20)
Adjusted EBITDA(2) 240
Less: Depreciation (56)
Less: Adjusted amortisation(3) (14)
Adjusted operating profit 170
Net finance expense (25)
Adjusted share of profit of joint ventures(4) -
Adjusted profit before tax 145
Exceptional items (93)
Amortisation of acquired intangible assets (10)
Profit before tax 42
Income tax expense (16)
Profit for the year - continuing operations 26
Profit for the year - discontinued operations 210
Profit for the year - total operations 236
EPS (pence) - continuing operations
Adjusted diluted 24.9p
Diluted 5.5p
1. Adjusted results and a number of other terms and performance
measures used in this document are not directly defined within IFRS. We have
provided descriptions of the various metrics and their reconciliation to the
most directly comparable measures reported in accordance with IFRS and the
calculation (where relevant) of any ratios in Note 4 to the Notes to the
consolidated financial statements for the year ended 31 March 2022.
2. Adjusted EBITDA excludes the impact of exceptional items of £93
million.
3. Adjusted amortisation excludes amortisation of acquired intangible
assets of £10 million (costs associated with amounts recognised through
acquisition accounting that impact earnings compared to organic investments).
4. Share of profit after tax of joint ventures is zero, as in the year
presented the Group's interest in its former joint ventures of Almidones
Mexicanos S.A de C.V and DuPont Tate & Lyle Bio-Products Company, LLC were
part of the disposal Group and are included in 'Profit for the period -
discontinued operations'. This summary income statement is prepared on a
reported basis, and accordingly the pro-forma adjustment to show the Group's
share of profit in Primient is not shown as that interest was created on 1
April 2022, after the period shown.
Segmental results for the year ended 31 March 2022
IFRS 8 Segmental disclosure (unchanged from previous disclosure)
Year ended 31 March 2022
Total operations Food & Beverage Solutions Central Total
£m Primary £m £m
Sucralose Products
£m £m
Revenue(1) 1 111 163 1 858 - 3 132
Adjusted operating profit(2) 190 61 112 (51) 312
Adjusted operating margin 17.2% 37.1% 6.0% n/a 10.0%
1. Includes £1 757 million of revenue recognised in discontinued
operations.
2. Reconciled to statutory profit for the year in Note 4 (and Note 12
for discontinued operations) of 2022 Annual Report.
Reconciliations of IFRS 8 segmental disclosures to summary of restated
financial results:
(i) Revenue
Year ended 31 March 2022
Continuing operations Food & Beverage Solutions Primary Central Total
£m Products Primary £m £m
Sucralose Europe Products
£m £m £m
Segment revenue - as above 1 111 163 - 1 858 - 3 132
Reclassification to discontinued operations - - (1 757) - (1 757)
-
Reclassification of European PP business out of Primary Products - (101) - -
101
As presented in summary of restated financial results 1 111 163 - - 1 375
101
(ii) Adjusted EBITDA Year ended 31 March 2022
Continuing operations Food & Beverage Solutions Primary Central Total
£m Products Primary £m £m
Sucralose Europe Products
£m £m £m
Adjusted operating profit - segmental results 190 61 112 (51) 312
-
Transfer of European PP business out of Primary Products - 21 - -
(21)
Reclassification to discontinued operations(1) (9) - - (133) - (142)
Central and overhead re-allocation (29) (19) (3) - 51 -
Adjusted operating profit 152 42 (24) - - 170
Add back depreciation 43 9 4 - - 56
Add back adjusted amortisation 12 2 - - - 14
Adjusted EBITDA(2) as presented in summary of restated financial results 207 53 - - 240
(20)
Adjusted EBITDA margin 18.6% 32.6% (19.4%) - - 17.5%
Pro-forma impact of long-term agreements (7) - - - - (7)
Pro-forma Adjusted EBITDA 200 53 (20) - - 233
Pro-forma Adjusted EBITDA margin 18.0% 32.6% (19.4%) - - 17.0%
1. Operating costs of £9 million are reallocated from Primary
Products to Food & Beverage Solutions because they remain within the Group
after completion of the Transaction.
2. Adjusted EBITDA excludes the impact of exceptional items of £93
million.
Summary of restated financial results for the six months to 30 September 2022
Six months to 30 September(1) 2022
Continuing operations
£m
Revenue
- Food & Beverage Solutions 691
- Sucralose 97
- Primary Products Europe 61
Revenue 849
Adjusted EBITDA
- Food & Beverage Solutions 144
- Sucralose 34
- Primary Products Europe (6)
Adjusted EBITDA(2) 172
Less: Depreciation (29)
Less: Adjusted amortisation(3) (6)
Adjusted operating profit 137
Net finance expense (11)
Adjusted share of profit of joint venture(4) 13
Adjusted profit before tax 139
Exceptional items (11)
Amortisation of acquired intangible assets and other fair value adjustments (12)
Adjusting items excluded from share of profit of joint venture (48)
Profit before tax 68
Income tax expense (12)
Profit for the period - continuing operations 56
Profit for the period - discontinued operations 65
Profit for the period - total operations 121
EPS (pence) - continuing operations
Adjusted diluted 26.1p
Diluted 13.3p
1. Adjusted results and a number of other terms and performance
measures used in this document are not directly defined within IFRS. We have
provided descriptions of the various metrics and their reconciliation to the
most directly comparable measures reported in accordance with IFRS and the
calculation (where relevant) of any ratios in Note 2 of the half year results
statement for the six months to 30 September 2022.
2. Adjusted EBITDA excludes the impact of exceptional items of £11
million.
3. Adjusted amortisation excludes amortisation of acquired intangible
assets and other fair value adjustments of £12 million (costs associated with
amounts recognised through acquisition accounting that impact earnings
compared to organic investments).
4. The Group's share of profit in Primient, a joint venture created by
the Transaction on 1 April 2022.
No supplementary reconciliations of IFRS 8 segmental disclosures to summary
financial results are provided for the six months to 30 September 2022.
END.
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