24 July 2013 – Tate & Lyle PLC INTERIM MANAGEMENT STATEMENT
24 July 2013 – Tate Lyle PLC
INTERIM MANAGEMENT STATEMENT
This Interim Management Statement covers the period from 1 April 2013 to 30 June 2013, which is the first quarter of the financial year.
OPERATING PERFORMANCE – CONTINUING OPERATIONS
Adjusted operating profit for the Group for the first quarter was in line with our expectations.
As expected, the unusually cold spring and slow start to the summer in the US resulted in volume softness within the beverage sector, mainly impacting Bulk Ingredients.
In Speciality Food Ingredients, volumes and sales grew ahead of the wider speciality food ingredients market. We experienced strong volume growth in Europe and emerging markets although this was partially offset by a softer performance in the US, where lower than expected sweetener sales resulted in slightly lower margins.
In Bulk Ingredients, as expected, we experienced somewhat lower volumes in US bulk liquid sweeteners, although this was offset primarily by a stronger performance from EU bulk liquid sweeteners, where high sugar prices and lower corn costs resulted in higher margins than expected.
BUSINESS DEVELOPMENT
In the last two months, we have announced two initiatives to develop our Speciality Food Ingredients business.
On 16 July 2013, we announced the formation of a food systems joint venture, Tate Lyle Howbetter, through the acquisition of a 51% equity interest in Jiangsu Howbetter Food Co., Ltd, a leading food systems business in China. The creation of Tate Lyle Howbetter will provide us with a solid platform on which to accelerate the growth of our Food Systems business in China. The transaction is subject to governmental approval which is expected in the autumn.
In May 2013, we acquired Biovelop, an early-stage manufacturer of oat beta-glucan, which broadens our health and wellness offering and adds a clean-label, speciality fibre with strong health claims to our existing corn-based fibre portfolio.
ORSAN CHINA
In May 2013, the on-sale of Orsan China (a monosodium glutamate producer in which Tate Lyle previously held a stake and which was sold in 2009) resulted in a one-off operating gain of £3.5 million.
DEBT MANAGEMENT AND BALANCE SHEET
The Group’s financial position strengthened during the period. Net debt of £426 million at 30 June 2013 has reduced from £479 million at 31 March 2013.
OUTLOOK
Our outlook for the year remains unchanged and we continue to expect to deliver another year of profitable growth.
END
A conference call will be held today at 8:00am BST, hosted by Javed Ahmed, Chief Executive and Tim Lodge, Chief Financial Officer. Participants are requested to dial in at least 10 minutes before the commencement of the call. Dial in details are as follows:
Standard International Access: +44 (0) 20 3003 2666 Password: Tate Lyle
UK replay number: +44 (0)20 8196 1998 International replay numbers: http://www.meetingzone.com/en-GB/replaydialinnumbers.aspx Replay access PIN: 1577970
A replay of this call will be available after the end of the live call for 14 days until 6 August 2013.
Tate Lyle is a global provider of ingredients and solutions to the food, beverage and other industries, operating from over 30 production facilities around the world.
Tate Lyle operates through two global business units, Speciality Food Ingredients and Bulk Ingredients, supported by the Innovation and Commercial Development group. The Group's strategy is to become the leading global provider of Speciality Food Ingredients through a disciplined focus on growth, and by driving Bulk Ingredients for sustained cash generation to fuel this growth.
Speciality Food Ingredients consists of three platforms: Texturants, which includes speciality starches and stabilisers; Sweeteners, which comprises nutritive sweeteners and our range of no-calorie sweeteners including SPLENDA® Sucralose; and our Health and Wellness portfolio which includes speciality fibres and our salt-reduction offering. Additionally, our food systems business provides a wide variety of blended ingredient solutions.
Tate Lyle Bulk Ingredients includes bulk sweeteners, industrial starches and fermentation products (primarily acidulants). Corn co-products from both divisions are primarily sold as animal feed.
Tate Lyle is listed on the London Stock Exchange under the symbol TATE.L. American Depositary Receipts trade under TATYY. In the year to 31 March 2013, Tate Lyle sales totalled £3.3 billion. http://www.tateandlyle.com. SPLENDA® is a trademark of McNeil Nutritionals, LLC.
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