Nick Hampton,
Chief Executive said:
"In challenging market conditions,
it's been another year of robust financial performance and
strategic progress, with strong profit growth and productivity
delivery, excellent cash generation, and further progress to
transform the business.
The actions taken over the last
six years have created a higher quality and more resilient
business, with the agility to navigate the challenging economic
environment and softer consumer demand we saw last year. While
managing these short-term market dynamics, we also continued to set
up the business for long-term growth by increasing investment in
technology, innovation, solution selling and new capacity, and by
intentionally moving away from low margin business. I am
particularly pleased by our progress building our solutions
business with customers, a core element of our strategy, with
solutions new business wins continuing to grow.
The separate announcement we made
today of the sale of our remaining stake in Primient represents an
important milestone for our business. With this sale, the
transformation of Tate & Lyle into a fully-focused speciality
food and beverage solutions business is complete. We are now
well-positioned to capture the significant growth opportunities
ahead as we look to provide our customers with the solutions they
need to meet growing consumer demand for healthier, tastier and
more sustainable food and drink.
Our robust balance sheet, strong
cash generation and the proceeds from the sale of Primient underpin
our confidence to enhance shareholder returns through the share
buyback programme, whilst retaining the flexibility to pursue both
organic and inorganic growth opportunities. We are excited by
Tate & Lyle's future."
Outlook
We have navigated the
unprecedented cycle of inflation and volatile consumer demand well,
delivering a compound average growth rate of revenue of 11% and
adjusted EBITDA of 10% for the three years ended 31 March
2024.
Over the last year, we prioritised
revenue and margin, ahead of volume growth. Looking ahead, we
expect to grow from this new base and, with the end of customer
destocking and consumer confidence gradually improving, we expect
good volume growth in the 2025 financial year, accelerating as the
year progresses.
Following a period of exceptional
input cost inflation, we are now seeing input cost deflation and,
as a result, revenue was lower in the second half of the 2024
financial year reflecting the pass through of lower costs. This is
expected to continue in the first half of the 2025 financial
year.
Therefore, for the year ending 31
March 2025, we expect to deliver in constant currency:
·
Revenue slightly lower than the prior
year
·
EBITDA growth of between 4% and 7%.
Following completion of the sale
of Primient, we will no longer consolidate its profits.
Sale of Primient and share
buyback programme
Sale of remaining interest in Primient
Over the last six years, Tate
& Lyle has been executing a major strategic transformation to
become a growth-focused speciality food and beverage solutions
business. This transformation has included a much sharper focus on
customers and categories, increased investments in innovation and
solution selling capabilities, and significantly strengthening our
sweetening, mouthfeel and fortification platforms through new
product development and acquisitions.
A critical step in this
transformation journey was the sale, in April 2022, of a
controlling interest in Primient, our primary products business in
North America and Latin America to KPS Capital Partners, LP
(KPS).
Today, we separately announced
that we have reached an agreement to sell our remaining 49.7%
interest in Primient to KPS. Under the agreement, Tate & Lyle
will receive US$350 million (c.£279 million). These proceeds will
be payable in cash at completion which is anticipated by the end of
July 2024. The transaction values Tate & Lyle's 49.7% stake in
Primient at 6.5x EV/EBITDA, ahead of the valuation of Primient on
the sale of the initial controlling stake, completed on 1 April
2022.
The sale completes the staged exit
from Primient well ahead of expiry of the original lock-up period
of eight years which lasts until 1 April 2030. The robust long-term
agreements between Tate & Lyle and Primient put in place in
April 2022 to ensure supply security, with a remaining life of
around 18 years, will continue to operate. Net cash proceeds, after
tax, are expected to be around US$270 million (c.£215
million).
Total cash proceeds from the full
exit of Primient including dividends received since the sale of the
initial holding in April 2022 exceeds US$1.5 billion.
Share buyback programme and capital
allocation
Consistent with the Board's
capital allocation policy, the Board intends to return the net cash
proceeds received from the Primient sale to shareholders by way of
an on-market share buyback programme. The buyback is expected to
commence on completion of the Primient sale and further details
will be announced in due course.
The Board's priority is to continue
its disciplined deployment of capital and to maintain Tate &
Lyle's financial strength. Looking forward, we will look to retain
the flexibility in the balance sheet to drive value accretive
organic and inorganic growth, with long-term efficient leverage
sitting in the range of 1.0x to 2.5x net debt to EBITDA.
Fully-focused speciality food and beverage solutions
business
Following the sale of Primient,
Tate & Lyle is a fully-focused, speciality food and beverage
solutions business with a clear strategic focus and strong sense of
purpose.
·
Global leader in sweetening, mouthfeel and
fortification, creating solutions for our customers to meet growing
consumer trends for healthier food and drink.
·
Science-driven business, with an established
record of innovation and scientific expertise.
·
Well-balanced and global business with a strong
presence in developed markets and a platform for accelerated growth
in the large markets of Asia, Middle East, Africa and Latin
America.
·
Strong balance sheet providing flexibility to
invest for growth, and an experienced management team with a track
record of delivery.
Over the last six years, Tate
& Lyle has been re-positioned to be at the centre of the future
of food, operating in segments of the market which are seeing
significant growth. This supports our five-year financial ambition
to 31 March 2028, to deliver:
·
Revenue growth of 4% to 6% each year (2024: (2)%
lower)
·
Adjusted EBITDA growth of 7% to 9% each year
(2024: 7% growth)
·
Improved organic return on capital employed by up
to 50bps on average each year (2024: 40 bps improvement)
·
US$100m of productivity savings (2024: US$41
million savings and ambition increased to US$150m).
As stated at our Capital Markets
Event on 8 February 2023, revenue growth is on an underlying basis
excluding the impact of abnormal inflation and deflation. We also
have the potential to further accelerate growth through
partnerships and M&A.
Delivering our
strategy
We continued to invest in
progressing our strategy in line with our commitment to 'Science,
Solutions, Society'.
Science
·
Investment in innovation and solution selling was
5% higher, with investments in new customer-facing labs, new
technology and strengthening capabilities in areas such as sensory
and open innovation.
·
New Product revenue was up 13% on a like-for-like
basis (i.e. no products are removed from disclosure due to age)
with strong growth in the mouthfeel platform; revenue was modestly
lower on a reported basis.
·
We launched 9 New Products into the market
including TASTEVA® SOL Stevia Sweetener, a
patent-protected breakthrough in stevia technology to help
customers solve stevia solubility challenges.
·
New automated lab established at our Customer
Innovation and Collaboration Centre in Singapore with advanced
technology to accelerate the development of mouthfeel solutions and
increase our customers' speed-to-market.
·
We added 61 patents to our patent portfolio and
now have over 540 patents granted and over 220 pending.
Solutions
·
The value of solutions-based new business wins
increased by 3ppts to 21% of revenue, with strong solutions
performance in Asia, Middle East, Africa and Latin
America.
·
Innovation is a key driver of our solutions
offering. 44% of revenue from our new business pipeline involved
the formulation of one or more New Products.
·
We opened a new Customer Innovation and
Collaboration Centre in Jakarta, Indonesia, bringing our global
network of Centres to seventeen.
·
We invested €25 million to add new capacity for
non-GMO PROMITOR® Soluble Fibres in Boleráz,
Slovakia. Production came on-line in May 2024.
Society
·
We significantly advanced our sustainability
agenda:
− In the 2023 calendar year,
from a 2019 base, our Scope 1 and 2 absolute greenhouse gas (GHG)
emissions were 11% lower (2030 target: 30% reduction), and our
Scope 3 absolute GHG emissions were 20% lower, exceeding our target
of a 15% reduction by 2030 seven years ahead of
schedule.
− In May 2024, we announced
new targets to accelerate the reduction of our Scope 1 and 2 and
Scope 3 GHG emissions. Our new targets to 2028, from a 2019 base,
replace our existing 2030 targets and have been validated as
science-based on a 1.5oC trajectory by the Science Based
Targets initiative.
− Our facility in Guarani,
Brazil became our first site to be 100% powered by renewable
energy, and our facilities in the Netherlands, UK and Italy are
buying 100% of their electricity from renewable sources.
− We continued to support
sustainable acres of corn equivalent to 100% of the corn we buy
each year (367,000 acres in 2023), and to support intervention
programmes with farmers in the US, for example to manage nitrogen
levels in the soil to increase crop yields, improve soil health and
minimise the impact on local watersheds.
− 90% of our waste was
beneficially used mainly either as nutrients on local farms or for
energy recovery.
·
45% of leadership and management roles (~500
positions) are held by women.
·
Since 31 March 2020, our low- and no-calorie
sweeteners and our fibres have removed 7.9 million tonnes of sugar
from people's diets, equivalent to more than 31 trillion
calories.
Group
performance
Revenue
|
Adjusted
EBITDA
|
Full-year
|
Change1
|
Full-year
|
Change1
|
|
£1 647m
|
(2)%
|
£328
|
7%
|
1 Growth in constant
currency.
Overview
The Group delivered strong
adjusted EBITDA growth. Revenue was 2% lower reflecting lower
volume partially offset by good mix management and the recovery of
inflation. Adjusted EBITDA was 7% higher with adjusted profit
before tax 18% higher.
Food & Beverage Solutions
performed well with revenue slightly lower and adjusted EBITDA 8%
higher. The underlying performance of the Sucralose business
remained steady, with adjusted EBITDA 4% lower. The optimisation of
Primary Products Europe is continuing with losses significantly
reduced.
Our focus in Food & Beverage
Solutions was to prioritise revenue and margin, ahead of volume
growth. This intentional re-positioning, together with softer
consumer demand and customer de-stocking, combined to deliver lower
volume. Revenue was 2% lower, reflecting the benefit of mix
management and the recovery of net input cost inflation. A key
driver of our growth-focused approach is our investment in
innovation and solution selling. We made further progress in
the year, with revenue from New Products up 13% on a like-for-like
basis, and solutions as a percentage of our new business wins by
value increasing by 3ppts to 21%.
For Primient, the adjusted share
of joint venture profit was £35 million, 53% higher. Operating
performance improved, supported by robust demand for sweetener
products, strong customer contracting in 2023 and 2024 and improved
operational performance, while increased interest rates drove
finance charges higher. Tate & Lyle received US$74 million in
cash dividends from Primient in the year.
Cash generation
Free cash flow was £49 million
higher at £170 million, with an improvement in working capital of
£112 million, benefiting from increased discipline in inventory
management. While driving greater cash generation, we also
continued to invest in long-term growth with capital expenditure
increasing by £39 million to £110 million to deliver capacity
expansions for Food & Beverage Solutions.
Our ambition is to increase the
conversion of profit into cash to 75% in the five years to 31 March
2028. During the 2024 financial year, we exceeded that target
delivering cash conversion of 85%, 23ppts higher. Cash generation
remains a priority, and our focus now is to consistently exceed
cash conversion of 75%. Net debt was £153 million, £85 million
lower, with net debt to EBITDA at 0.5x, and liquidity of over £1.1
billion.
Productivity
We have made an excellent start on
our five-year ambition to deliver US$100 million of productivity
savings by 31 March 2028. Productivity savings in the year were
US$41 million, well ahead of our target at the start of the year of
US$25 million savings. These savings came from areas such as
operational efficiencies, supply chain and other cost
savings. Given this strong progress, we have increased our
productivity target and now expect to deliver savings of US$150
million by 31 March 2028.
Reporting
segments
Food & Beverage Solutions
82% of Group revenue and 86% of Group adjusted
EBITDA
|
Revenue
|
Revenue
Drivers
|
Adjusted
EBITDA
|
|
Full-year
|
Change1
|
Volume2
|
Price
Mix2
|
Full-year
|
Change1,3
|
North America
|
£642m
|
(3)%
|
(8)%
|
5%
|
-
|
-
|
Asia, Middle East, Africa and
Latin America
|
£396m
|
(3)%
|
(7)%
|
4%
|
-
|
-
|
Europe
|
£321m
|
1%
|
(1)%
|
2%
|
-
|
-
|
Total
|
£1 359m
|
(2)%
|
(6)%
|
4%
|
£281m
|
8%
|
|
|
|
|
|
|
|
| |
1 Growth
in constant currency.
2 To
reflect the underlying drivers of revenue growth, the total
percentages for volume and price mix have been adjusted by 4ppts to
exclude the impact from our focus on mix management and margin
expansion. Without this adjustment, the values for both volume and
price mix would be 4ppts greater.
3
Comparative restated to exclude other M&A costs of £(2) million
reflecting the revised definition of adjusted EBITDA, see page
33.
Revenue was 2% lower in constant
currency at £1,359 million. Lower volume from softness in consumer
demand and customer destocking led to 6ppts reduction in revenue.
Price mix increased revenue by 4ppts, reflecting 1ppt from
our focus on strategic mix management and
solution selling, and 3ppts from the
impact of net input cost inflation (the recovery of inflation in
the three quarters to 31 December 2023, net of the pass-through of
deflation in the quarter to 31 March
2024).
Looking at the three regions, all
were impacted by soft consumer demand and customer destocking.
Revenue growth in Europe reflected the pricing through of greater
net input cost inflation.
·
North
America: Revenue was 3% lower. Cost
of living pressures on consumers resulted in softer demand across
our focus categories, partially offset by higher pricing. As we
entered the fourth quarter, a reducing impact from customer
destocking and lower food inflation, and new customer contracts,
delivered improved volume momentum.
·
Asia, Middle
East, Africa and Latin America:
Revenue was 3% lower. In Asia, revenue was lower reflecting pricing
pressure and weaker demand for stabilisation solutions, mitigated
by good growth in beverages, particularly in North Asia. Consumer
demand in China remained soft. In Latin America, revenue declined
driven by lower priced imports from outside the region, especially
in Mexico. Excluding the impact of these imports, revenue was ahead
of the prior year with strong growth in beverages and bakery. In
Middle East and Africa, revenue was ahead of the prior year with
strong demand for dairy solutions in North Africa.
·
Europe: Revenue was slightly
ahead of the prior year driven by three main factors.
Firstly, we saw good demand across the dairy and infant nutrition
categories, and for mouthfeel solutions generally. Secondly, we
continued to execute our strategy to exit some low margin business,
with revenue from distributors, in particular, lower. Finally, we
saw increased competition from imports from outside the
region.
The renewal of customer contracts
for the 2024 calendar year is expected to deliver a sequential
improvement in volume growth as the year progresses. Reflecting
this, average daily volume accelerated in the final quarter.
The new customer contracts include the pass through of input cost
deflation. As a result, revenue was lower in the second half of the
2024 financial year.
Adjusted EBITDA was up 8% in
constant currency at £281 million benefiting from mix management
and the pricing through of net input cost inflation. This, together
with the benefit from productivity and strong cost control, saw
adjusted EBITDA margins expand by 180bps in constant currency. The
effect of currency translation decreased adjusted EBITDA by £12
million.
Innovation and solution selling
New Product
Revenue
|
Investment
|
Solutions
|
Value
|
Change
|
% of FBS
revenue
|
Innovation and solution selling
|
% of new business
wins
|
|
£219m
|
(4)%
|
16%
|
5%
|
21%
|
|
Revenue from New Products was 4%
lower. Certain ingredients reached post-launch maturity in the year
and were removed from the definition of New Products. On a
like-for-like basis, which assumes the same ingredients are
included in New Products revenues in both the current and
comparative periods, New Products revenue was 13% higher. On this
like-for-like basis, we saw strong growth in the mouthfeel
platform, protein delivered a near-doubling of revenue and Quantum
Hi-Tech helped to accelerate growth in
fortification.
Investment in innovation and
customer-facing solution selling capabilities including sensory and
open innovation was 5% higher. Targeted programmes to develop new
ways of working with customers and build stronger solutions-based
partnerships helped increase solutions new business wins by value
to 21% (2023 - 18%). We have set an ambition to increase this to
32% over the five years to 31 March 2028.
Sucralose
11% of Group revenue and 16% of Group adjusted
EBITDA
Revenue
|
Revenue
Drivers
|
Adjusted
EBITDA
|
Full-year
|
Change1
|
Volume
|
Price Mix
|
Full-year
|
Change1
|
£174m
|
(1)%
|
in line%
|
(1)%
|
£52m
|
(4)%
|
Underlying customer demand for
sucralose remained steady. Revenue was broadly in line with the
prior year as volume remained consistent and customer mix led to
modestly lower pricing. Adjusted EBITDA declined modestly
reflecting cost inflation across a range of inputs. Currency
translation decreased adjusted EBITDA by £3 million.
Primary Products Europe
7% of Group revenue and (2%) of Group adjusted
EBITDA
Revenue
|
Revenue
Drivers
|
Adjusted
EBITDA
|
Full-year
|
Change1
|
Volume
|
Price Mix
|
Full-year
|
Change1
|
£114m
|
(12)%
|
(15)%
|
3%
|
£(5)m
|
34%
|
1 Growth in constant
currency.
We continue to optimise the
financial performance of Primary Products Europe through the
transition of capacity to speciality ingredients. Revenue was lower
by 12%, mainly reflecting the reduced volume of co-products.
Adjusted EBITDA losses reduced significantly, benefiting from lower
input costs.
Webcast
details
Following this statement's release
on 23 May 2024 at 07.00am (UK time), a live webcast will be held at
10.00am via
this link. A replay of the webcast and
presentation will be made available afterwards at
this
link. 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.
Commentary on the financial
statements
Year ended 31 March
|
2024
£m
|
Restated
20231
£m
|
Constant currency change %
|
Adjusted EBITDA
|
|
|
|
Food & Beverage
Solutions
|
281
|
273
|
8%
|
Sucralose
|
52
|
58
|
(4%)
|
Primary Products
Europe
|
(5)
|
(9)
|
34%
|
Adjusted EBITDA
|
328
|
322
|
7%
|
Depreciation and adjusted
amortisation
|
(70)
|
(71)
|
(1%)
|
Adjusted operating
profit
|
258
|
251
|
8%
|
Operating profit
(statutory)
|
207
|
196
|
10%
|
Net finance expense
|
(6)
|
(20)
|
66%
|
Adjusted share of profit of
Primient joint venture
|
35
|
24
|
53%
|
Adjusted profit before
tax
|
287
|
255
|
18%
|
Profit before tax
(statutory)
|
226
|
152
|
54%
|
1
Comparative restated to exclude other M&A
costs of £(2) million reflecting the revised definition of adjusted
EBITDA, see page 33.
Net finance expense
Net finance expense at £6 million
was 66% lower in constant currency, mainly reflecting higher net
income on the Group's cash balances. Because almost all of the
Group's borrowings in the year were at fixed rates of interest, the
Group was not exposed to significant changes in interest rates on
its borrowings.
Exceptional items
Net exceptional charges of £25
million were included in profit before tax, of which a charge of £1
million was included from the Group's share of exceptional items in
the Primient joint venture. Of these costs, £21 million related to
organisational improvements to the Food & Beverage Solutions
business and activities to drive productivity savings. Exceptional
cash outflows for the period totalled £27 million.
(For more information see Note 5).
Adjusted share of profit of Primient joint
venture
Year ended 31 March
|
2024
£m
|
Restated
20232,3
£m
|
Constant currency change %
|
Adjusted operating
profit
|
143
|
102
|
47%
|
Net finance expense
|
(92)
|
(80)
|
(21%)
|
Adjusted share of profit from its
own joint ventures after tax
|
32
|
33
|
2%
|
Adjusted profit before
tax
|
83
|
55
|
58%
|
Adjusted share of profit of
Primient joint venture3
|
35
|
24
|
53%
|
2
Reclassification adjustment: adjusted operating profit has been
increased by £2 million and adjusted share of profit from its own
joint ventures after tax reduced by the same amount.
3
The Group's share of the adjusted profit of
Primient joint venture is based on profit after tax. Primient is a
US partnership (so its partners rather than Primient itself are
responsible for tax on its US income). Tax of £12 million (2023 -
£6 million) has been deducted from profit before tax relating to
tax on income earned by Primient's Brazilian subsidiary.
Adjusted operating profit was 47%
higher in constant currency at £143 million reflecting robust
demand for sweeteners, strong customer contracting in 2023 and
2024, and improved operational performance. The net finance expense increase reflected higher US interest
rates. Statutory share of profit from the joint venture for the
2024 financial year was £25 million, mainly reflecting a £9 million
charge for the amortisation of acquired intangibles and other fair
value assets which was excluded from the adjusted share of
profit.
Tate & Lyle received cash
dividends from Primient of US$74 million in the
year.
Taxation
The adjusted effective tax rate
for the year was 21.6% (2023 -
19.9%). The increase in the rate reflects
more profit taxed in higher rate jurisdictions and the increase in
the rate of UK corporation tax from 19% to 25%. Looking
ahead, we expect the adjusted effective tax rate for the year
ending 31 March 2025 to be in line with the rate for fiscal year
2024. The reported effective tax rate (on statutory earnings) for
the year was 20.6% (2023 - 16.8%). The
lower rate in the comparative year was due to higher tax deductions
on exceptional items recorded by Primient.
Earnings per share
Adjusted earnings per share for
continuing operations at 55.5p were 18% higher (in constant
currency). This increase reflects 16% higher profits after tax and
benefit from a lower weighted number of shares of 2ppts, reflecting
the share consolidation completed on 3 May 2022. Statutory diluted
earnings per share for continuing operations increased
significantly to 44.4p (2023 -
30.8p), reflecting mainly higher exceptional
costs in, and therefore a lower share of profit from, joint
ventures in the comparative period.
Return on capital employed (ROCE)
ROCE at 17.4% (2023
- 17.6%)
was slightly lower reflecting the impact of the
acquisition of Quantum Hi-Tech part way through the comparative
period. ROCE increased by 40bps on an organic basis.
Dividend
The Board is recommending a final
dividend of 12.9p (2023 - 13.1p) per share. This brings the full
year dividend to 19.1p (2023 - 18.5p), an increase of 3.2%. In
February 2023, in our Capital Markets Event, we announced our
policy of paying interim dividends at the level of one third of the
previous year's full-year dividend, accordingly an interim dividend
for the six months to 30 September 2023 was paid of 6.2p (30
September 2022 - 5.4p) per share. Subject to shareholder approval,
the proposed final dividend will be due and payable on 2 August
2024 to all shareholders on the Register of Members on 21 June
2024. In addition to the cash dividend option, shareholders will
continue to be offered a Dividend Reinvestment Plan
alternative.
Cash flow, net debt and liquidity
Free cash flow was £170 million
(2023 - £121 million), an increase of £49 million. This reflected
both higher profits and a strong focus on cash generation which
delivered a £112 million improvement in net working capital mainly
through improved inventory management
discipline, with strong progress in initiatives to optimise
inventory, across all of; raw materials, in-process inventory, and
finished goods. Investments in infrastructure, capacity and technology drove
capital expenditure to £110 million, £39 million higher in
the year. Overall, cash conversion for the period improved by
23ppts to 85%1.
We expect capital expenditure in
the year ending 31 March 2025 to be in the £100 million to £120
million range.
Net debt at 31 March 2024 was £153
million, £85 million lower than at 31 March 2023. Strong free cash
flow generation and dividends received from Primient of US$74
million (£59 million) were more than offset by outflows including
the payment of dividends to shareholders of £76 million and
payments in respect of share incentive schemes of £25 million. In
April 2023, to reduce interest costs and in line with on-going
balance sheet optimisation, the Group repaid a US private placement
debt floating rate note of US$95 million ahead of its maturity
using cash. On 30 October 2023, a US$25 million US private
placement 3.83% fixed rate note was repaid on maturity using
cash.
At 31 March 2024, the Group had
access to £1.1 billion of available liquidity through readily
available cash and cash equivalents and access to a committed,
undrawn revolving credit facility of US$800 million (£633 million).
Reported leverage at 31 March 2024 was 0.5 times net debt to
EBITDA. On a covenant testing basis, the net debt to EBITDA ratio
was 0.3 times, which was much lower than the covenant threshold of
3.5 times.
On 16 May 2024 the Group's
committed, undrawn and sustainability-linked revolving credit
facility of US$800 million (£633 million) was amended and
re-stated. The maturity date was extended for five years to 16 May
2029, and includes two further one-year extension options, which
are subject to lender credit approval.
-----------------------------------------------------------------------------------------
1 Free cash conversion calculated
as: free cash flow before capital expenditure divided by adjusted
EBITDA
Non-GAAP
measures
Some performance discussion and
narrative in this announcement includes measures which are not
defined by generally accepted accounting principles (GAAP) such as
IFRS. The Group believes this information, together with comparable
GAAP measures, is useful to investors in providing a basis for
measuring our operating performance, cash generation and financial
strength. The Group uses these alternative performance measures for
internal performance analysis and incentive compensation
arrangements for employees. These measures are not defined
terms and may therefore not be comparable with similarly-titled
measures reported by other companies. Wherever appropriate and
practical, reconciliations are provided to relevant GAAP
measures.
Alternative performance measures
are used for and refer to continuing operations only.
The Group uses constant currency
percentages and movements, using constant exchange rates which
exclude the impact of fluctuations in foreign currency exchange
rates. We calculate constant currency values by retranslating
current year results at prior year exchange rates into British
Pounds. The average and closing US dollar and Euro exchange
rates used to translate reported results were as
follows:
|
Average
rates
|
Closing
rates
|
Year ended 31 March
|
2024
|
2023
|
2024
|
2023
|
US dollar : sterling
|
1.26
|
1.20
|
1.26
|
1.24
|
Euro : sterling
|
1.16
|
1.16
|
1.17
|
1.14
|
Items adjusted in alternative performance income statement
measures (Adjustment items)
Several alternative performance
measures are adjusted to exclude items due to their size, nature
and / or frequency of occurrence.
1. Adjusted items excluded
from earnings before interest, tax, depreciation and amortisation
(adjusted EBITDA) are: exceptional
items (as they are material in amount; and are outside the normal
course of business or relate to events which do not frequently
recur), amortisation of acquired
intangible assets, the unwind of fair value adjustments and other
M&A costs.
2. Additional adjusted items excluded from adjusted
profit after tax are: tax on the
above items and tax items that themselves are exceptional as they
meet these definitions. For tax items to be treated as
exceptional, amounts must be material and their treatment as
exceptional enable a better understanding of the Group's underlying
financial performance. Included in adjusted profit after tax
is the adjusted share of profit of Primient (the Group's
non-controlling joint venture interest, where the results of
Primient have been adjusted for items meeting the Group's
definitions herein).
Income statement measures
Adjusted revenue change
Adjusted revenue growth refers to
the change in revenue for the period, in constant currency.
This is analysed between the drivers of revenue growth attributable
to:
1. Volume - this means,
for the applicable period, the change in revenue in the period
attributable to volume excluding those related to the
re-positioning of the Food & Beverage Solutions business
through a focus on mix management and margin expansion.
2. Price mix - this
means, for the applicable period, the change in revenue in such
period calculated as the sum of i) the change in revenue
attributable to changes in prices during the period; and ii) the
change in revenue attributable to the composition of revenue in the
period, including the volume effect of the impact of the
re-positioning of the Food & Beverage Solutions business
through a focus on mix management and margin expansion.
In the narrative where
acquisitions are referred to in explaining revenue growth, this
means changes in revenue resulting from acquisitions.
Adjusted EBITDA
Adjusted EBITDA is used as the
Group's primary profit measure for
internal performance analysis. Adjusted EBITDA is calculated
as follows:
Year ended 31 March
|
|
2024
£m
|
20231
£m
|
Operating profit
|
|
207
|
196
|
Depreciation
|
|
58
|
59
|
Amortisation
|
|
36
|
36
|
Exceptional items
|
|
24
|
28
|
Other M&A activity-related items
|
|
2
|
2
|
Unwind of fair value
adjustments
|
|
1
|
1
|
Adjusted EBITDA
|
|
328
|
322
|
Revenue
|
|
1
647
|
1
751
|
Adjusted EBITDA margin
|
|
19.9%
|
18.4%
|
1
Comparative restated to exclude other M&A
costs of £(2) million reflecting the revised definition of adjusted
EBITDA, see page 33.
Adjusted earnings per share
Adjusted earnings per share
(adjusted EPS) is calculated as the adjusted profit for continuing
operations attributable to shareholders' equity divided by the
diluted average number of ordinary shares. In calculating
adjusted profit attributable to shareholders' equity, net profit
attributable to shareholders' equity is adjusted to eliminate the
post-tax impact of all excluded adjustment items. Refer to Note 8
for reconciliation of net profit attributable to shareholders'
equity to adjusted profit attributable to shareholders
equity.
Change in adjusted earnings per
share is shown in constant currency.
Cash flow measure
The Group also presents an
alternative cash flow measure, 'free cash
flow' which is defined as cash generated from operating activities
after net capital expenditure, net interest and tax payments, and
excludes the impact of exceptional items, tax payments on behalf of
Primient and the impact of acquisitions and
disposals.
The reconciliation of net cash
flow from operating activities to free cash flow is as
follows:
Year ended 31 March
|
2024
£m
|
20231
£m
|
Net cash flow from operating
activities
|
208
|
66
|
Capital expenditure
(net)
|
(110)
|
(71)
|
Tax paid in respect of Primient
partnership
|
12
|
5
|
Exceptional cash
flows2
|
39
|
101
|
Interest received
|
19
|
11
|
Other M&A activity-related
items
|
2
|
2
|
Free cash flow attributable to
discontinued operations
|
-
|
7
|
Free cash flow
|
170
|
121
|
1
Comparative restated to
exclude other M&A costs of £(2) million reflecting the revised
definition of adjusted EBITDA, see page 33.
2 Includes
exceptional cash flow of £27 million (2023 - £59 million) and tax
paid in relation to gain on disposal of Primient of £12 million
(2023 - £42 million)
Year ended 31 March
|
2024
£m
|
20231
£m
|
Adjusted EBITDA
|
328
|
322
|
Adjusted for
|
|
|
Changes in working
capital
|
7
|
(105)
|
Capital expenditure
(net)
|
(110)
|
(71)
|
Net retirement
benefit obligations
|
(7)
|
(9)
|
Net interest and tax
paid2
|
(57)
|
(28)
|
Share-based payment
charge
|
13
|
20
|
Other non-cash
movements
|
(4)
|
(8)
|
Free cash flow
|
170
|
121
|
1
Comparative restated to exclude other M&A
costs of £(2) million reflecting the revised definition of adjusted
EBITDA, see page 33.
2 Includes
net interest paid of £5 million (2023 - £14 million) and tax paid
(excluding tax in relation to Primient) of £52 million (2023 - £14
million).
Financial strength measures
The Group uses three financial
metrics as key performance measures to assess its financial
strength. These are net debt, the net debt to EBITDA ratio and the
return on capital employed ratio. For the purposes of KPI
reporting, the Group uses a simplified calculation of these KPIs to
make them more directly related to information in the Group's
financial statements.
All ratios are calculated based on
unrounded figures in £ million.
Net debt
Net debt is a measure that
provides valuable additional information on the summary
presentation of the Group's net financial liabilities. Net
debt is defined as the excess of borrowings and lease liabilities
over cash and cash equivalents.
The components of the Group's net
debt are as follows:
|
|
|
At
31 March
2024
£m
|
At
31
March
2023
£m
|
Borrowings
|
(544)
|
(659)
|
Lease liabilities
|
(46)
|
(54)
|
Cash and cash
equivalents
|
437
|
475
|
Net debt
|
(153)
|
(238)
|
Net debt to EBITDA ratio
The net debt to EBITDA ratio shows
how well a company can cover its debts if net debt and EBITDA are
held constant.
The net debt to EBITDA ratio is as
follows:
|
|
|
At
31 March
2024
£m
|
At
31
March
20231
£m
|
Calculation of net debt to EBITDA ratio
|
|
|
Net debt
|
153
|
238
|
Adjusted EBITDA
|
328
|
322
|
Net debt to EBITDA ratio (times)
|
0.5
|
0.7
|
1
Comparative restated to exclude other M&A
costs of £(2) million reflecting the revised definition of adjusted
EBITDA, see page 33.
Return on capital employed (ROCE)
Return on capital employed (ROCE)
is a measure of the return generated on capital invested by the
Group. The measure encourages compounding reinvestment within
the business and discipline around acquisitions, as such it
provides a guardrail for long-term value creation. ROCE is a
component of the Group's five-year performance ambition to 31 March
2028 and is used in incentive compensation.
ROCE is calculated as underlying
operating profit excluding exceptional items and M&A related
costs, divided by the average invested operating capital
(calculated as the average for each month of goodwill, intangible
assets, property, plant and equipment, working capital, provisions
and non-debt related derivatives). As such the average invested
operating capital is derived from the management balance sheet and
does not reconcile directly to the statutory balance sheet.
All elements of average invested operating capital are calculated
in accordance with IFRS.
|
31
March
|
31
March
|
|
2024
|
20231
|
Twelve months ended
|
£m
|
£m
|
Adjusted EBITDA
|
328
|
322
|
Deduct:
|
|
|
Depreciation
|
(58)
|
(59)
|
Amortisation
|
(36)
|
(36)
|
Unwind of fair value
adjustments
|
(1)
|
(1)
|
Profit before interest, tax and
exceptional items for ROCE
|
233
|
226
|
|
|
|
Average invested operating
capital
|
1
343
|
1
278
|
ROCE %
|
17.4%
|
17.6%
|
1
Comparative restated to exclude other M&A
costs of £(2) million reflecting the revised definition of adjusted
EBITDA, see page 33.
Changes to the Board of
Directors
· David Hearn
became a Director and Chair of the Tate & Lyle Board on 1
January 2024 following the resignation of Dr Gerry Murphy. On
his appointment, Warren Tucker stepped down as Interim Chair but
continues to serve as a non-executive director and as Chair of the
Audit Committee.
· Paul Forman,
the Senior Independent Director retired from the Board on 31
December 2023 having served his nine-year term.
· Kimberly (Kim)
Nelson became Senior Independent Director on 1 January
2024.
· Jeffrey (Jeff)
Carr joined the Board as a non-executive director and as a member
of the Audit and Nominations Committees on 1 April 2024.
· On 24 April
2024, we announced that Dawn Allen, Chief Financial Officer, had
decided to leave the Company to take the position of Chief
Financial Officer of Haleon plc. Mrs Allen will remain with Tate
& Lyle until October 2024 to support an orderly
transition. A process to appoint her successor has
begun.
Cautionary
statement
This statement of Full-Year
Results for the year ended 31 March 2024 (Statement) contains
certain forward-looking statements with respect to the financial
condition, results, operations and businesses of Tate & Lyle
PLC. These statements and forecasts involve risk and uncertainty
because they relate to events and depend upon circumstances that
will occur in the future. There are a number of factors that could
cause actual results or developments to differ materially from
those expressed or implied by these forward-looking statements and
forecasts. A copy of this Statement can be found on our
website at www.tateandlyle.com. A hard copy of the Statement is
also available from the Company Secretary, Tate & Lyle PLC, 5
Marble Arch, London W1H 7EJ.
Enquiries
For more information contact Tate & Lyle
PLC:
Christopher Marsh, VP Investor
Relations
Nick Hasell, FTI Consulting (Media)
Tel: Mobile: +44 (0) 7796 192
688
Tel: Mobile: +44 (0) 7825 523 383
CONSOLIDATED INCOME STATEMENT
|
|
|
|
Year
ended 31 March
|
|
|
Notes
|
|
2024
£m
|
|
2023
£m
|
Continuing operations
Revenue
|
|
4
|
|
1
647
|
|
1
751
|
|
|
|
|
|
|
|
Operating profit
|
|
|
|
207
|
|
196
|
Finance income
|
|
|
|
19
|
|
12
|
Finance expense
|
|
|
|
(25)
|
|
(32)
|
Share of profit/(loss) of joint
venture
|
|
|
|
25
|
|
(24)
|
Profit before tax
|
|
|
|
226
|
|
152
|
Income tax expense
|
|
6
|
|
(47)
|
|
(25)
|
Profit for the year
- continuing
operations
|
|
|
|
179
|
|
127
|
Profit for the year
- discontinued
operations
|
|
|
|
9
|
|
63
|
Profit for the year
- total
operations
|
|
|
|
188
|
|
190
|
|
Attributable to:
|
|
|
|
|
|
|
Owners of the Company
|
|
|
|
188
|
|
190
|
Profit for the year
- total
operations
|
|
|
|
188
|
|
190
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
Pence
|
|
Pence
|
Continuing operations:
|
|
8
|
|
|
|
|
- basic
|
|
|
|
45.2p
|
|
31.3p
|
- diluted
|
|
|
|
44.4p
|
|
30.8p
|
|
|
|
|
|
|
|
Total operations:
|
|
8
|
|
|
|
|
- basic
|
|
|
|
47.3p
|
|
47.0p
|
- diluted
|
|
|
|
46.5p
|
|
46.2p
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
|
|
|
Year
ended 31 March
|
|
|
|
|
2024
£m
|
|
2023
£m
|
|
Profit for the year - total
operations
|
|
|
188
|
|
190
|
|
|
|
|
|
|
|
|
Other comprehensive income /(expense)
|
|
|
|
|
|
|
Items that have been/may be reclassified to profit or
loss:
|
|
|
|
|
|
|
(Loss)/gain on currency
translation of foreign operations
|
|
|
(50)
|
|
62
|
|
Fair value gain/(loss) on net
investment hedges
|
|
|
7
|
|
(33)
|
|
Fair value loss on net investment
hedges transferred to the income statement
|
|
|
-
|
|
28
|
|
Gain on currency translation of
foreign operations transferred to the income statement on sale of a
subsidiary
|
|
|
-
|
|
(81)
|
|
Fair value gain on cash flow
hedges transferred to the income statement on sale of a
subsidiary
|
|
|
-
|
|
(48)
|
|
Net loss on cash flow
hedges
|
|
|
(6)
|
|
(2)
|
|
Recycling of cost of
hedging
|
|
|
-
|
|
5
|
|
Share of other comprehensive
income/(expense) of joint ventures
|
|
|
2
|
|
(5)
|
|
Tax effect of the above
items
|
|
|
-
|
|
6
|
|
|
|
|
(47)
|
|
(68)
|
|
|
|
|
|
|
|
|
Items that will not be reclassified to profit or
loss:
|
|
|
|
|
|
|
Re-measurement of retirement
benefit plans:
|
|
|
|
|
|
|
- actual return
higher/(lower) on plan assets
|
|
|
12
|
|
(289)
|
|
- net actuarial gain on
retirement benefit obligations
|
|
|
4
|
|
295
|
|
Changes in the fair value of
equity investments at fair value through OCI
|
|
|
(17)
|
|
3
|
|
Tax effect of the above
items
|
|
|
(4)
|
|
-
|
|
|
|
|
(5)
|
|
9
|
|
Total other comprehensive expense
|
|
|
(52)
|
|
(59)
|
|
Total comprehensive income - total
operations
|
|
|
136
|
|
131
|
|
|
|
|
|
|
|
|
Analysed by:
|
|
|
|
|
|
- Continuing operations
|
|
|
127
|
|
68
|
- Discontinued
operations
|
|
|
9
|
|
63
|
Total comprehensive income
- total
operations
|
|
|
136
|
|
131
|
All amounts are attributable to
owners of the Company.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
|
|
At 31
March
|
|
Notes
|
2024
£m
|
2023
£m
|
ASSETS
|
|
|
|
Non-current assets
|
|
|
|
Goodwill and other intangible
assets
|
|
406
|
452
|
Property, plant and equipment
(including right-of-use assets of £34 million (2023 - £39
million))
|
|
528
|
488
|
Investments in joint
venture
|
|
165
|
199
|
Investments in equities
|
|
28
|
42
|
Retirement benefit
surplus
|
|
29
|
18
|
Deferred tax assets
|
|
28
|
13
|
Trade and other
receivables
|
|
11
|
11
|
|
|
1 195
|
1
223
|
Current assets
|
|
|
|
Inventories
|
|
353
|
446
|
Trade and other
receivables
|
|
294
|
351
|
Current tax assets
|
|
3
|
9
|
Derivative financial
instruments
|
|
-
|
3
|
Cash and cash
equivalents
|
10
|
437
|
475
|
|
|
1 087
|
1
284
|
TOTAL ASSETS
|
|
2 282
|
2
507
|
EQUITY
|
|
|
|
Capital and reserves
|
|
|
|
Share capital
|
|
117
|
117
|
Share premium
|
|
408
|
408
|
Capital redemption
reserve
|
|
8
|
8
|
Other reserves
|
|
82
|
143
|
Retained earnings
|
|
623
|
513
|
Equity attributable to owners of
the Company
|
|
1 238
|
1
189
|
Non-controlling
interests
|
|
1
|
1
|
TOTAL EQUITY
|
|
1 239
|
1
190
|
LIABILITIES
|
|
|
|
Non-current liabilities
|
|
|
|
Borrowings (including lease
liabilities of £36 million (2023 - £44
million))
|
10
|
573
|
592
|
Retirement benefit
deficit
|
|
111
|
118
|
Deferred tax
liabilities
|
|
19
|
30
|
Provisions
|
|
2
|
5
|
|
|
705
|
745
|
Current liabilities
|
|
|
|
Borrowings (including lease
liabilities of £10 million (2023 - £10
million))
|
10
|
17
|
121
|
Trade and other
payables
|
|
259
|
372
|
Provisions
|
|
12
|
13
|
Current tax liabilities
|
|
47
|
62
|
Derivative financial
instruments
|
|
3
|
4
|
|
|
338
|
572
|
Total liabilities
|
|
1 043
|
1
317
|
TOTAL EQUITY AND LIABILITIES
|
|
2 282
|
2
507
|
|
|
|
| |
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
|
|
Year
ended 31 March
|
|
|
Notes
|
|
2024
£m
|
|
2023
£m
|
Cash flows from operating activities - total
operations
|
|
|
|
|
|
|
Profit before tax from total
operations
|
|
|
|
226
|
|
248
|
Adjustments for:
|
|
|
|
|
|
|
Depreciation of property, plant
and equipment (including right-of-use assets and excluding
exceptional items)
|
|
|
|
58
|
|
59
|
Amortisation of intangible
assets
|
|
|
|
36
|
|
36
|
Share-based payments
|
|
|
|
13
|
|
20
|
Net impact of exceptional income
statement items
|
|
5
|
|
(3)
|
|
(129)
|
Net finance expense
|
|
|
|
6
|
|
20
|
Share of (profit)/loss of joint
ventures
|
|
|
|
(25)
|
|
24
|
Net retirement benefit
obligations
|
|
|
|
(7)
|
|
(9)
|
Other non-cash
movements
|
|
|
|
(3)
|
|
(7)
|
Changes in working
capital
|
|
|
|
7
|
|
(110)
|
Cash generated from total
operations
|
|
|
|
308
|
|
152
|
Net income tax paid
|
|
|
|
(64)
|
|
(19)
|
Exceptional tax on gain on
disposal of Primient
|
|
|
|
(12)
|
|
(42)
|
Interest paid
|
|
|
|
(24)
|
|
(25)
|
Net cash generated from operating
activities
|
|
|
|
208
|
|
66
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
|
|
(101)
|
|
(70)
|
Acquisition of businesses, net of
cash acquired
|
|
|
|
-
|
|
(192)
|
Disposal of subsidiary (net of
cash)
|
|
7
|
|
12
|
|
1
045
|
Investments in intangible
assets
|
|
|
|
(9)
|
|
(8)
|
Purchase of equity
investments
|
|
|
|
(3)
|
|
(3)
|
Disposal of equity
investments
|
|
|
|
3
|
|
10
|
Interest received
|
|
|
|
19
|
|
11
|
Dividends received from joint
ventures
|
|
|
|
59
|
|
41
|
Redemption of shares held in joint
venture
|
|
|
|
-
|
|
1
|
Net cash (used in)/ generated from
investing activities
|
|
|
|
(20)
|
|
835
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Purchase of own shares including
net settlement
|
|
|
|
(25)
|
|
(13)
|
Cash inflow from additional
borrowings
|
|
|
|
-
|
|
1
|
Cash outflow from repayment of
borrowings
|
|
|
|
(101)
|
|
(3)
|
Repayment of leases
|
|
|
|
(13)
|
|
(13)
|
Dividends paid to the owners of
the Company
|
|
|
|
(76)
|
|
(570)
|
Net cash used in financing
activities
|
|
|
|
(215)
|
|
(598)
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents
|
|
10
|
|
(27)
|
|
303
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
Balance at beginning of
year
|
|
|
|
475
|
|
127
|
Net (decrease)/increase in cash
and cash equivalents
|
|
|
|
(27)
|
|
303
|
Currency translation
differences
|
|
|
|
(11)
|
|
45
|
Balance at end of year
|
|
10
|
|
437
|
|
475
|
A
reconciliation of the movement in cash and cash equivalents to the
movement in net debt is presented in Note 10.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
Share capital and share
premium
|
Capital redemption
reserve
|
Other
reserves
|
Retained
earnings
|
Attributable to the owners
of the Company
|
Non- controlling
interests
|
Total
equity
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1 April 2022
|
524
|
8
|
222
|
865
|
1
619
|
1
|
1
620
|
Profit for the year
- total
operations
|
-
|
-
|
-
|
190
|
190
|
-
|
190
|
Other comprehensive
(expense)/income
|
-
|
-
|
(65)
|
6
|
(59)
|
-
|
(59)
|
Total comprehensive
(expense)/income
|
-
|
-
|
(65)
|
196
|
131
|
-
|
131
|
Hedging gains transferred to
inventory
|
-
|
-
|
(19)
|
-
|
(19)
|
-
|
(19)
|
Tax effect of the above
item
|
-
|
-
|
5
|
-
|
5
|
-
|
5
|
Transactions with
owners:
|
|
|
|
|
|
|
|
Share-based payments, net of
tax
|
-
|
-
|
-
|
22
|
22
|
-
|
22
|
Issue of share capital
|
1
|
-
|
-
|
-
|
1
|
-
|
1
|
Purchase of own shares including
net settlement
|
-
|
-
|
-
|
(13)
|
(13)
|
-
|
(13)
|
Dividends paid
|
-
|
-
|
-
|
(570)
|
(570)
|
-
|
(570)
|
Other movements
|
-
|
-
|
-
|
13
|
13
|
-
|
13
|
At 31 March 2023
|
525
|
8
|
143
|
513
|
1
189
|
1
|
1
190
|
Profit for the year
- total
operations
|
-
|
-
|
-
|
188
|
188
|
-
|
188
|
Other comprehensive
(expense)/income
|
-
|
-
|
(64)
|
12
|
(52)
|
-
|
(52)
|
Total comprehensive
(expense)/income
|
-
|
-
|
(64)
|
200
|
136
|
-
|
136
|
Hedging losses transferred to
inventory
|
-
|
-
|
4
|
-
|
4
|
-
|
4
|
Tax effect of the above
item
|
-
|
-
|
(1)
|
-
|
(1)
|
-
|
(1)
|
Transactions with
owners:
|
|
|
|
|
|
|
|
Share-based payments, net of
tax
|
-
|
-
|
-
|
11
|
11
|
-
|
11
|
Purchase of own shares including
net settlement
|
-
|
-
|
-
|
(25)
|
(25)
|
-
|
(25)
|
Dividends paid
|
-
|
-
|
-
|
(76)
|
(76)
|
-
|
(76)
|
At 31 March 2024
|
525
|
8
|
82
|
623
|
1
238
|
1
|
1
239
|
NOTES TO THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 MARCH 2024
1. Background
The financial information on pages
15 to 31 is extracted from the Group's consolidated financial
statements for the year ended
31 March 2024, which were approved by the Board of Directors on 22
May 2024.
The financial information does not
constitute statutory accounts within the meaning of sections 434(3)
and 435(3) of the Companies Act 2006 or contain sufficient
information to comply with the disclosure requirements of UK
adopted International Accounting Standards.
The Company's auditor, Ernst &
Young LLP, has given an unqualified report on the consolidated
financial statements for the year ended 31 March 2024. The
auditor's report did not include reference to any matters to which
the auditor drew attention without qualifying its report and did
not contain any statement under section 498 of the Companies Act
2006. The consolidated financial statements will be filed with the
Registrar of Companies, subject to their approval by the Company's
shareholders on 25 July 2024 at the Company's Annual General
Meeting.
2. Basis of
preparation
Basis of accounting
The Group's consolidated financial
statements for the year ended 31 March 2024 have been prepared in
accordance with UK adopted International Accounting
Standards.
The Group's principal accounting
policies are unchanged compared with the year ended 31 March 2023.
The Group's principal accounting policies have been consistently
applied throughout the year. Descriptions and specific accounting
policy information on how the Group has applied the requirements of
UK adopted International Accounting Standards will be included in
the notes to the consolidated financial statements in the Group's
2024 Annual Report. All amounts are rounded to the nearest million,
unless otherwise indicated.
Discontinued operations and application of Held for
Sale
On 1 April 2022 the Group
completed the disposal of a controlling stake in a new company and
its subsidiaries ('Primient' or the 'Primient business' or
'Primient disposal group'), comprising its Primary Products
business in North America and Latin America to KPS
Capital Partners, LP ('KPS') (the 'Transaction'). The Group
currently holds a 49.7% interest in Primient.
In accordance with IFRS 5
'Non-current Assets Held for Sale and Discontinued Operations',
from 1 July 2021 the Group has classified the business that became
Primient on 1 April 2022 as a disposal group held for sale and a
discontinued operation. An operation is classified as discontinued
if it is a component of the Group that: (i) has been disposed
of, or meets the criteria to be classified as held for sale; and
(ii) represents a separate major line of business or
geographic area of operations or will be disposed of as part of a
single coordinated plan to dispose of a separate major line of
business or geographic area of operations. The results of
discontinued operations are presented separately from those of
continuing operations. Refer to Note 7 for further details on
discontinued operations.
New Accounting standards
On 1 April 2023, the Group adopted
IFRS 17 'Insurance Contracts'. The standard introduces a new model
for accounting for insurance contracts. The adoption of this
standard has had no material impact on the Group's financial
statements.
On 23 May 2023, amendments to IAS
12 'Income Taxes' came into effect relating to International Tax
Reform - Pillar Two Model Rules, which were endorsed by the UK
Endorsement Board on 19 July, whereby an entity shall disclose
qualitative and quantitative information about its exposure to
Pillar Two income taxes at the end of the reporting period. The
amendments provide a temporary mandatory exemption from deferred
tax accounting for the top-up tax, which is effective
immediately. As at 31 March 2024, the
Group has applied the exemption to not recognise any deferred tax
relating to top-up tax arising from the Pillar Two
legislation. The expected impact of this
amendment has been disclosed within the 2024 Annual
Report.
On 9 April 2024, IFRS 18
Presentation and Disclosure in
Financial Statements was issued which will be effective for
the Group from 1 April 2027 onwards. An impact assessment on this
new standard will be performed in due course. No other new standards, new interpretations or amendments to
standards or interpretations that are effective or that have been
published but are not yet effective, are expected to have a
material impact on the Group's financial statements.
Alternative performance measures
The Group also presents
alternative performance measures, including adjusted earnings
before interest, tax, depreciation and amortisation ('adjusted
EBITDA'), adjusted profit before tax, adjusted earnings per share,
free cash flow, net debt to EBITDA and return on capital employed.
These alternative performance measures reported by the Group are
not defined terms under UK adopted International Accounting
Standards and may therefore not be comparable with similarly-titled
measures reported by other companies. Refer to further details on
pages 11 to 14 ('Non-GAAP measures').
The Group has amended its
alternative performance measures to exclude certain merger and
acquisition ('M&A') costs in order to more clearly measure its
underlying performance. The prior year comparatives have been
restated accordingly.
Reconciliations of the alternative
performance measures to the most directly comparable IFRS measures
are presented in Note 3.
Exceptional items
Exceptional items comprise items
of income, expense and cash flow, including tax items that: are
material in amount; and are outside the normal course of business
or relate to events which do not frequently recur, and therefore
merit separate disclosure in order to provide a better
understanding of the Group's underlying financial performance.
Exceptional items in the Group's financial statements are
classified on a consistent basis across accounting periods.
Examples of events that give rise to the disclosure of material
items of income, expense and cash flow as exceptional items
include, but are not limited to:
· significant impairment events;
· significant business transformation activities;
· disposals of operations or significant individual
assets;
· litigation claims by or against the Group; and
· restructuring of components of the Group's
operations.
For tax items to be treated as
exceptional, amounts must be material and their treatment as
exceptional enable a better understanding of the Group's underlying
financial performance.
3. Reconciliation of alternative performance
measures
Income statement measures
The Group presents alternative
performance measures including adjusted earnings before interest,
tax, depreciation and amortisation ('adjusted EBITDA'), adjusted
profit before tax and adjusted earnings per share.
The following table shows the
reconciliation of the key income statement alternative performance
measures to the most directly comparable measures reported in
accordance with IFRS:
|
|
|
|
|
Year ended 31 March
2024
|
|
Year
ended 31 March 2023*
|
Continuing operations
£m unless otherwise
stated
|
IFRS
reported
|
Adjusting
items
|
Adjusted
reported
|
|
IFRS
reported
|
Adjusting
items
|
Adjusted
reported
|
Revenue
|
1
647
|
-
|
1
647
|
|
1
751
|
-
|
1
751
|
EBITDA
|
301
|
27
|
328
|
|
291
|
31
|
322
|
Depreciation1
|
(58)
|
1
|
(57)
|
|
(59)
|
1
|
(58)
|
Amortisation
|
(36)
|
23
|
(13)
|
|
(36)
|
23
|
(13)
|
Operating profit
|
207
|
51
|
258
|
|
196
|
55
|
251
|
Net finance expense
|
(6)
|
-
|
(6)
|
|
(20)
|
-
|
(20)
|
Share of profit/(loss) of joint
venture
|
25
|
10
|
35
|
|
(24)
|
48
|
24
|
Profit before tax
|
226
|
61
|
287
|
|
152
|
103
|
255
|
Income tax expense
|
(47)
|
(15)
|
(62)
|
|
(25)
|
(25)
|
(50)
|
Profit for the year
|
179
|
46
|
225
|
|
127
|
78
|
205
|
Effective tax rate expense
%
|
20.6%
|
|
21.6%
|
|
16.8%
|
|
19.9%
|
Earnings per share:
|
|
|
|
|
|
|
|
Basic earnings per share
(pence)
|
45.2p
|
-
|
-
|
|
31.3p
|
-
|
-
|
Diluted earnings per share
(pence)
|
44.4p
|
11.1p
|
55.5p
|
|
30.8p
|
18.8p
|
49.6p
|
* Restated to
include other M&A activity-related items in adjusting items.
See Note 2.
1.
Depreciation includes £1 million (2023 - £1 million) related to the
Quantum acquisition fair value adjustments which is excluded from
adjusted operating profit.
The following table shows the
reconciliation of the adjusting items impacting adjusted profit for
the year:
|
|
|
Year
ended 31 March
|
|
Continuing operations
|
Notes
|
|
2024
£m
|
|
2023*
£m
|
Exceptional costs included in
operating profit
|
5
|
|
24
|
|
28
|
M&A costs
|
|
|
27
|
|
27
|
Adjusting items excluded from
share of profit of joint venture
|
|
|
10
|
|
48
|
Total excluded from adjusted
profit before tax
|
|
|
61
|
|
103
|
Tax credit on adjusting
items
|
6
|
|
(15)
|
|
(25)
|
Total excluded from adjusted
profit for the year
|
|
|
46
|
|
78
|
|
|
|
|
|
| |
* Restated to include
other M&A activity-related items in adjusting items. See Note
2.
The following table shows the
M&A costs excluded from adjusted profit for the
year:
|
|
|
Year
ended 31 March
|
|
Continuing operations
|
|
|
2024
£m
|
|
2023*
£m
|
Amortisation of acquired
intangible assets
|
|
|
23
|
|
23
|
Unwind of fair value
adjustments1
|
|
|
2
|
|
2
|
Other M&A activity-related
items
|
|
|
2
|
|
2
|
Total M&A costs
|
|
|
27
|
|
27
|
|
|
|
|
|
| |
* Restated to include
other M&A activity-related items in adjusting items. See Note
2
1. Unwind
of fair value adjustments includes depreciation of £1 million (2023
- £1 million) related to Quantum.
The following table shows the
reconciliation of the Primient joint venture adjusting items
impacting adjusted profit for the year:
|
|
|
Year
ended 31 March
|
Continuing operations
|
|
|
2024
£m
|
|
2023
£m
|
Exceptional costs included in
operating profit
|
|
|
1
|
|
52
|
Amortisation of acquired
intangible assets and other fair value adjustments
|
|
|
9
|
|
(4)
|
Total excluded from adjusted share
of profit
|
|
|
10
|
|
48
|
For the year ended 31 March 2023,
the Group's share of exceptional costs of Primient comprised
certain non-recurring costs incurred by Primient as part of the
Transaction and separation including the re-charge of shareholder
costs. In addition, this included the unwind of fair value
adjustments determined by the purchase price allocation which
included certain net corn position fair value adjustments no longer
recorded by Primient.
Cash flow measure
The Group also presents an
alternative cash flow measure, 'free cash flow', which is defined
as cash generated from total operations, after net interest and tax
paid, after capital expenditure and excluding the impact of
exceptional items.
Tax paid refers to tax paid for
the Group's operations excluding any tax paid for its share of the
Primient joint venture's results. The Group receives specific
dividends from Primient in order to settle such tax liabilities. As
all dividends received are excluded from free cash flow, it is
appropriate to exclude tax paid out of the receipt of these
dividends.
The following table shows the
reconciliation of free cash flow relating to continuing
operations:
|
Year
ended 31 March
|
|
2024
|
2023*
|
|
£m
|
£m
|
Adjusted operating profit from
continuing operations
|
258
|
251
|
Adjusted for:
|
|
|
Adjusted depreciation and adjusted
amortisation1
|
70
|
71
|
Share-based payments
charge
|
13
|
20
|
Other non-cash
movements2
|
(4)
|
(8)
|
Changes in working
capital3
|
7
|
(105)
|
Net retirement benefit
obligations
|
(7)
|
(9)
|
Net capital expenditure
|
(110)
|
(71)
|
Net interest and tax
paid4
|
(57)
|
(28)
|
Free cash flow from continuing operations
|
170
|
121
|
* Restated to include
other M&A activity-related items in adjusting items. See Note
2.
1. Total
depreciation of £58 million (2023 - £59 million) less £1 million of
depreciation related to Quantum acquisition fair value adjustments
(2023 - £1 million) and amortisation of £36 million (2023 - £36
million) less £23 million (2023 - £23 million) of amortisation of
acquired intangible assets.
2. In the
year ended 31 March 2024, other non-cash movements excludes an
inflow of £1 million (2023 - inflow of £1 million) for an item not
included in adjusted operating profit.
3. In the
year ended 31 March 2023, changes in working capital excludes the
2022 financial year bonus of £7 million to employees who have
transitioned to Primient which is classified as a discontinued cash
outflow. This impact is partially offset by the increase of a
legal provision relating to discontinued operations.
4. Net
interest and tax paid excludes tax payments of £24 million (2023 -
£47 million) relating to the Group's share of Primient's tax
including the exceptional tax on the gain on disposal of Primient
of £12 million (2023 - £42 million).
4. Segment information
Segment information is presented
on a basis consistent with the information presented to the Board
(the designated Chief Operating Decision Maker (CODM)) for the
purposes of allocating resources within the Group and assessing the
performance of the Group's businesses.
The Group's core operations
comprise three operating segments as follows: Food & Beverage
Solutions, Sucralose and Primary Products Europe. These operating
segments are also reportable segments. The Group does not aggregate
operating segments to form reportable segments. Food & Beverage
Solutions operates in the core categories of beverages, dairy,
soups, sauces and dressings and bakery and snacks. Sucralose, a
high-intensity sweetener and a sugar reduction ingredient, is used
in various food categories and beverages. Primary Products
Europe focuses principally on high-volume sweeteners and industrial
starches. The Group is executing a planned transition away
from these lower margin products in order to use the capacity
to fuel growth in the Food & Beverage Solutions operating
segment.
Whilst not part of the Group's
core operations, its 49.7% investment in the Primient joint venture
is also an operating segment and reportable segment. Primient is a
leading producer of food and industrial ingredients, principally
bulk sweeteners and industrial starches. Key products include
nutritive sweeteners (such as high fructose corn syrup and
dextrose), industrial starches, acidulants (such as citric acid)
and commodities (such as corn gluten feed and meal and corn oil).
Primient includes interests in the Almex and the Primient Covation
joint ventures.
Group costs including head office,
treasury and insurance activities have been allocated to segments.
The allocation methodology is based on firstly attributing total
selling and general administrative costs by the support provided to
each segment directly, then allocating non-directly attributed
costs mainly on the basis of segment share of Group gross
profit.
Adjusted
EBITDA is used as the measure of the profitability of the Group's
businesses. For the Primient operating segment, the Board uses the
Group's share of adjusted profit of the Primient joint venture as
the measure of profitability of this business. Adjusted EBITDA and
the Group's share of adjusted profit of the Primient joint venture
are therefore the measures of segment profit presented in the
Group's segment disclosures for the relevant operating
segments. The segmental classification of exceptional items
is detailed in Note 5.
All revenue is from external
customers.
Segmental results for the year ended 31 March
2024
IFRS 8 Segment results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended 31 March 2024
|
Total operations
|
|
|
|
Food & Beverage
Solutions
£m
|
Sucralose
£m
|
Primary
Products
Europe
£m
|
Primient Joint
Venture
£m
|
Total
£m
|
Revenue
|
1 359
|
174
|
114
|
-
|
1 647
|
Adjusted
EBITDA1
|
281
|
52
|
(5)
|
-
|
328
|
Adjusted EBITDA margin
|
|
|
|
20.7%
|
29.8%
|
(4.8%)
|
-
|
19.9%
|
Adjusted share of profit of joint
venture1
|
|
|
|
-
|
-
|
-
|
35
|
35
|
1.
Reconciled to statutory profit for the year for continuing
operations in Note 3.
Segmental results for the year ended 31 March
2023
IFRS 8 Segment results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended 31 March 2023*
|
Total operations
|
|
|
|
Food & Beverage
Solutions
£m
|
Sucralose
£m
|
Primary
Products
Europe
£m
|
Primient Joint
Venture
£m
|
Total
£m
|
Revenue
|
1
438
|
184
|
129
|
-
|
1
751
|
Adjusted
EBITDA1
|
273
|
58
|
(9)
|
-
|
322
|
Adjusted EBITDA margin
|
|
|
|
18.9%
|
31.3%
|
(6.5%)
|
-
|
18.4%
|
Adjusted share of profit of joint
venture1
|
|
|
|
-
|
-
|
-
|
24
|
24
|
* Restated to include other M&A activity
related items in adjusting items. See Note 2.
1.
Reconciled to statutory profit for the year for continuing
operations in Note 3.
Geographic disclosures
|
Year
ended 31 March
|
|
2024
|
2023
|
Revenue - total
operations
|
£m
|
£m
|
Food & Beverage Solutions
|
|
|
North America
|
642
|
687
|
Asia, Middle East, Africa and
Latin America
|
396
|
432
|
Europe
|
321
|
319
|
Food & Beverage Solutions - total
|
1 359
|
1
438
|
Sucralose - total
|
174
|
184
|
Primary Products Europe
|
114
|
129
|
Total
|
1 647
|
1
751
|
5.
Exceptional items
Exceptional (costs)/income
recognised in the income statement are as follows:
|
|
Year
ended 31 March
|
|
|
2024
|
2023
|
Income statement - continuing
operations
|
Footnotes
|
£m
|
£m
|
Restructuring costs
|
(a)
|
(21)
|
(5)
|
Costs associated with the
separation and disposal of Primient
|
(b)
|
(4)
|
(25)
|
Stabiliser product
contamination
|
|
1
|
(1)
|
Historical legal
matters
|
|
-
|
3
|
Exceptional items included in operating
profit
|
|
(24)
|
(28)
|
|
|
|
|
Exceptional items related to share of profit of joint venture
(see Note 3)
|
|
(1)
|
(52)
|
Exceptional items included in profit before
tax
|
|
(25)
|
(80)
|
Exceptional items - continuing
operations
|
|
(25)
|
(80)
|
Discontinued operations
|
|
|
|
Gain on disposal of
Primient
|
|
-
|
98
|
Exceptional items - discontinued
operations
|
|
-
|
98
|
Exceptional items - total
operations
|
|
(25)
|
18
|
Set out below are the principal
components of the Group's exceptional items:
(a) As part of the
Group's previously announced commitment to deliver US$100 million
of productivity savings in the five years ending 31 March 2028, a
£21 million charge has been recognised in the year ended 31 March
2024 related to organisational improvements to the Food &
Beverage Solutions business and activities to drive productivity
savings. This charge includes severance costs, project costs and
information technology (IT) initiatives. Included in this amount is
a £4 million charge relating to a programme of digital
restructuring. These costs relate principally to an incremental
IT-capabilities investment programme to leverage digital
technologies to improve the Group's end-to-end customer and
employee experience, and to drive efficiency savings.
(b) The Group incurred
certain separation costs related to the Primient disposal which
totalled £4 million. These costs relate principally to IT costs in
respect of the final separation of IT infrastructure following the
cessation of the transition services arrangement for IT support to
Primient at the end of the prior financial year.
The most significant exceptional
costs in the comparative year related to the Primient disposal
separation costs, including IT costs to separate the Group's and
Primient's IT.
Tax credits or charges on
exceptional items are only recognised to the extent that gains or
losses incurred are expected to result in tax recoverable or
payable in the future. The total tax impact of these exceptional
items was a tax credit of £7 million (2023 - £6 million).
Discontinued operations
In the year ended 31 March 2023,
the Group recorded a gain of £98 million relating to the disposal
on 1 April 2022 of a 50.1% controlling interest in Primient in
exchange for gross cash proceeds of US$1.4 billion (£1.1 billion).
An exceptional tax charge of £33 million arose on this gain.
Further details on the gain on disposal, and the associated tax
charge, are set out in Note 7.
Cash flows from total operations
Exceptional costs recorded in
operating profit in continuing operations during the year resulted
in £21 million (outflow) disclosed in exceptional operating cash
flow. Exceptional costs recorded in the prior year resulted
in further cash outflows in the year of £6 million.
Further details in respect of cash
flows from exceptional items are set out
below.
Year
ended 31 March
|
|
|
2024
|
2023
|
Net operating cash (outflows)/inflows on exceptional
items
|
Footnotes
|
£m
|
£m
|
Restructuring costs
|
(a)
|
(18)
|
(3)
|
Costs associated with the
separation and disposal of Primient
|
(b)
|
(7)
|
(52)
|
US pension plan past service
credit
|
(c)
|
(1)
|
(1)
|
Stabiliser product
contamination
|
|
1
|
(1)
|
Historical legal
matters
|
|
(2)
|
(2)
|
Net cash outflows - continuing
operations
|
|
(27)
|
(59)
|
Net cash outflows - discontinued
operations
|
|
(12)
|
(42)
|
Net cash outflows - total
operations
|
|
(39)
|
(101)
|
|
|
|
| |
(c) In the 2022
financial year, a plan amendment to the Group's US pension plans
resulted in a past service credit of £13 million, with the Group
agreeing to make incremental contributions of £4 million (resulting
in a net exceptional credit of £9 million). Incremental
contributions were paid in the prior and 2022 financial year, with
the remaining £1 million paid in the current
financial year.
Exceptional cash flows
The total cash adjustment relating
to exceptional items presented in the cash flow statement of £3
million (outflow) (2023 -
£129 million (outflow)) reflects the net exceptional charge in
profit before tax for total operations of £24 million (2023 - net
exceptional gain of £70 million) which was £3 million lower (2023 -
£129 million higher) than net cash outflows of £27 million (2023
-
£59 million) set out in the table above.
The Group also paid £12 million
(2023 - £42
million) of exceptional tax on the gain on disposal of Primient
(see Note 7).
6. Income tax expense
Income tax for the year is
presented as follows:
· Statutory current and deferred taxes from continuing
operations of £47 million, which when divided by statutory profit
before tax from continuing operations of £226 million gives a
statutory effective tax rate of 20.6%.
· Adjusted income tax expense from continuing operations of £62
million, which when divided by adjusted profit before tax from
continuing operations of £287 million gives an adjusted effective
tax rate of 21.6% Adjusted income tax is different to statutory
income tax due to the tax effect of adjusting and exceptional
items.
Analysis of charge for the year
|
|
|
Year
ended 31 March
|
Continuing operations
|
|
|
2024
£m
|
2023
£m
|
Current tax
United Kingdom
|
|
|
(5)
|
(1)
|
Overseas
|
|
|
(76)
|
(66)
|
Tax credit on exceptional
items
|
|
|
8
|
6
|
Credit in respect of
previous financial years
|
|
|
2
|
16
|
|
|
|
(71)
|
(45)
|
Deferred tax
|
|
|
|
|
Credit for the year
|
|
|
21
|
13
|
Credit/(charge) in respect of
previous financial years
|
|
|
4
|
(6)
|
Tax charge on exceptional
items
|
|
|
(1)
|
-
|
Tax credit on Primient exceptional
items
|
|
|
-
|
13
|
Income tax expense
|
|
|
(47)
|
(25)
|
Statutory effective tax rate
%
|
|
|
20.6%
|
16.8%
|
Reconciliation to adjusted income tax
expense
|
|
|
Year
ended 31 March
|
Continuing operations
|
|
Note
|
2024
£m
|
2023*
£m
|
Income tax expense
|
|
|
(47)
|
(25)
|
Add back the impact of:
Tax credit on exceptional
items
|
|
|
(7)
|
(6)
|
Tax credit on Primient exceptional
items
|
|
|
-
|
(13)
|
Tax credit on amortisation of
acquired intangibles and other fair value adjustments
|
|
|
(6)
|
(7)
|
Tax (credit)/charge on
amortisation of Primient acquired intangibles and other fair value
adjustments
|
|
|
(2)
|
1
|
Adjusted income tax
expense
|
|
3
|
(62)
|
(50)
|
Adjusted effective tax rate
%
|
|
|
21.6%
|
19.9%
|
* Restated to include
other M&A activity-related items in adjusting items. See Note
2.
7. Discontinued operations
As described in Note 2, on 1 July
2021 the Group classified the business that became Primient and in
which a controlling stake was sold to KPS on 1 April 2022 as a
disposal group held for sale and a discontinued
operation.
The Primient business consists of
the following operations:
· Corn
wet mills in the US in Decatur, Illinois; Lafayette, Indiana; and
Loudon, Tennessee.
· Acidulants plants in Dayton, Ohio; Duluth, Minnesota; and
Santa Rosa, Brazil.
· Shareholdings in two joint ventures - Almex in Guadalajara,
Mexico and Primient Covation, in Loudon, Tennessee.
· Grain
elevator network and bulk transfer stations in North America.
Primary Products' European
operations were not included in this transaction and are therefore
not part of the discontinued operations.
Primient disposal
On 1 April 2022 the Group
completed the disposal of a 50.1% controlling interest in Primient
in exchange for gross cash proceeds of US$1.4 billion (£1.1
billion), resulting in an exceptional gain on disposal before tax
of £98 million (see Note 5).
A reconciliation of gross cash
proceeds received in the 2023 financial year is shown in the table
below:
|
Year
ended 31 March
|
Reconciliation of gross cash proceeds
|
2023
US$m
|
2023
£m
|
Cash consideration
|
330
|
253
|
Less: completion accounts
adjustments in favour of the Group not yet received
|
(15)
|
(12)
|
Add: cash received for
intercompany loan notes, payables and transaction costs
|
1
089
|
830
|
Add: contingent consideration
received
|
31
|
24
|
Disposal of Primient, gross proceeds
|
1
435
|
1
095
|
In the year ended 31 March 2024,
the completion accounts adjustment in favour of the Group of US$15
million (£12 million) was received.
The gain on disposal recognised in
the 2023 financial year is shown in the table below:
Gain on disposal
|
|
Year ended 31 March
2023
|
|
|
|
£m
|
|
Cash consideration
- as shown in table above1
|
|
|
253
|
Contingent consideration
received2
|
|
|
24
|
Fair value of investment in
Primient joint venture on initial recognition
|
|
|
253
|
Total consideration for
equity
|
|
|
530
|
|
|
|
|
Primient net assets derecognised
on disposal on 1 April3
|
|
|
(539)
|
Recycling of accumulated foreign
exchange from other comprehensive income to the income
statement
|
|
|
81
|
Recycling of cash flow hedges from
other comprehensive income to the income statement
|
|
|
48
|
Impact of deal contingent
forward4
|
|
|
(33)
|
Other amounts
|
|
|
11
|
Gain on disposal before tax
|
|
|
98
|
Tax on gain on disposal
|
|
|
(33)
|
Gain on disposal
|
|
|
65
|
|
|
|
|
|
|
| |
1. Includes deferred consideration
relating to the completion accounts adjustment not received of £12
million (this was subsequently received in the 2024 financial
year).
2. Contingent consideration was
based on the dividend payable by Almex relating to the period under
the Group's ownership.
3. Net assets held for sale at 31
March 2022 were £1,337 million. This amount excluded intercompany
payable and loan balances which eliminated on consolidation prior
to completion of the Transaction. Net assets derecognised on
disposal included such amounts.
4. The Group entered into a deal
contingent forward to hedge the currency risk associated with the
consideration received from the Transaction which was partly used
for the shareholder distribution on 16 May 2022. The fair value
loss on this forward and the impact of the cost of hedging have
been recycled from other comprehensive income to the income
statement on completion of the Transaction.
In the year ended 31 March 2024, a
£9 million exceptional tax credit was recognised, principally
relating to the deferred tax with respect to the change in
measurement of the difference between the tax basis and carrying
value of the Primient joint venture.
In the year ended 31 March 2023,
the tax charge arising on the gain on disposal of Primient was £54
million. Of this amount,
£42 million was paid in the year ended 31 March 2023. This tax
charge was partially offset by a deferred tax credit of £21 million
reflecting the change in measurement of the difference between the
tax basis and carrying value of the investment. This resulted in a
net tax charge on the gain on disposal of £33 million.
A reconciliation to the
consolidated statement of cash flows is shown in the table
below:
|
|
Year ended 31
March
|
Cash flows
|
|
2024
£m
|
2023
£m
|
|
Total cash consideration of £253
million less completion accounts adjustments not yet received of
£12 million - as shown above
|
|
-
|
241
|
Completion accounts adjustment
received
|
|
12
|
-
|
Repayment of intercompany loan
notes and payables and transaction costs
|
|
-
|
830
|
Less: cash outflow relating to
deal contingent forward
|
|
-
|
(33)
|
Less: net cash derecognised on
disposal
|
|
-
|
(17)
|
Add: contingent consideration
received - as shown above
|
|
-
|
24
|
Disposal of business, net of cash derecognised on
disposal
|
|
12
|
1
045
|
|
|
|
|
|
|
| |
8. Earnings per share
Basic earnings per share is
calculated by dividing the profit attributable to owners of the
Company by the weighted average number of ordinary shares in issue
during the year (excluding shares held by the Company and the
Employee Benefit Trust to satisfy awards made under the Group's
share-based incentive plans).
Diluted earnings per share is
calculated by dividing the profit attributable to owners of the
Company by the weighted
average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would
be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
The average market price of the
Company's ordinary shares during the year was 691p (2023 - 752p).
The dilutive effect of share-based incentives was 7.1 million
shares (2023 - 7.3 million shares).
|
Year ended 31 March
2024
|
|
Year
ended 31 March 2023
|
|
Continuing
operations
|
Discontinued
operations
|
Total
|
|
Continuing operations
|
Discontinued
operations
|
Total
|
Profit attributable to owners of
the Company (£ million)
|
179
|
9
|
188
|
|
127
|
63
|
190
|
Weighted average number of shares
(million) - basic
|
397.1
|
397.1
|
397.1
|
|
404.1
|
404.1
|
404.1
|
Basic earnings per share
(pence)
|
45.2p
|
2.1p
|
47.3p
|
|
31.3p
|
15.7p
|
47.0p
|
|
|
|
|
|
|
|
|
Weighted average number of shares
(million) - diluted
|
404.2
|
404.2
|
404.2
|
|
411.4
|
411.4
|
411.4
|
Diluted earnings per share
(pence)
|
44.4p
|
2.1p
|
46.5p
|
|
30.8p
|
15.4p
|
46.2p
|
Adjusted earnings per share
A reconciliation between profit
attributable to owners of the Company from continuing operations
and the equivalent adjusted measure, together with the resulting
adjusted earnings per share measure, is shown below:
|
|
Year
ended 31 March
|
|
Continuing operations
|
Notes
|
2024
£m
|
2023*
£m
|
Profit attributable to owners of
the Company
|
|
179
|
127
|
Adjusting items:
|
|
|
|
- exceptional costs in
operating profit
|
5
|
24
|
28
|
- M&A costs
|
3
|
27
|
27
|
- Adjusted items excluded
from share of profit of joint venture
|
3
|
10
|
48
|
- tax credit on adjusting
items
|
6
|
(15)
|
(25)
|
Adjusted profit attributable to
owners of the Company
|
3
|
225
|
205
|
Weighted average number of shares
(million) - diluted
|
|
404.2
|
411.4
|
Adjusted earnings per share
(pence) - continuing operations
|
|
55.5p
|
49.6p
|
|
|
|
|
|
| |
* Restated to include other M&A
activity-related items in adjusting items. See Note 2.
|
|
Year
ended 31 March
|
|
Total operations
|
Note
|
2024
£m
|
2023*
£m
|
Adjusted profit attributable to
owners of the Company - continuing operations
|
3
|
225
|
205
|
Adjusted loss attributable to
owners of the Company - discontinued operations
|
|
-
|
(2)
|
Adjusted profit attributable to
owners of the Company - total operations
|
|
225
|
203
|
Adjusted earnings per share (pence)
- total operations
|
|
55.5p
|
49.2p
|
|
|
|
|
| |
* Restated to include other M&A activity
related items in adjusting items. See Note 2.
9. Dividends on ordinary
shares
Dividends on ordinary shares in
respect of the financial year:
|
Year
ended 31 March
|
|
2024
Pence
|
2023
Pence
|
Per ordinary share:
|
|
|
Interim dividend paid
|
6.2
|
5.4
|
Final dividend proposed
|
12.9
|
13.1
|
Total dividend
|
19.1
|
18.5
|
The Directors propose a final
dividend for the financial year of 12.9p per ordinary share that,
subject to approval by shareholders, will be paid on 2 August 2024
to shareholders who are on the Register of Members on 21 June
2024. Based on the number of ordinary
shares outstanding at 31 March 2024, the final dividend for the
financial year is expected to amount to
£51 million.
On 16 May 2022, the Group returned
£497 million to ordinary shareholders by way of a special dividend
of £1.07 per existing ordinary share in the capital of Tate &
Lyle PLC. In order to maintain the comparability, so far as
possible, of Tate & Lyle PLC's share price before and after the
special dividend, the Group also completed a share consolidation
resulting in ordinary shareholders receiving six new ordinary
shares with a nominal value of 29 1/6 pence each for every
seven existing ordinary shares that they held.
Based on the number of ordinary
shares outstanding at 31 March 2024 and the proposed dividend per
share, the final dividend for the financial year is expected to
amount to £51 million.
10. Net debt - total operations
Movements in the Group's net debt
were as follows:
|
Cash and cash equivalents
£m
|
Borrowings and lease
liabilities
£m
|
Total
£m
|
At 1 April 2023
|
475
|
(713)
|
(238)
|
Movements from cash
flows
|
(27)
|
114
|
87
|
Currency translation
differences
|
(11)
|
13
|
2
|
Lease liabilities
|
-
|
(7)
|
(7)
|
Other non-cash
movements
|
-
|
3
|
3
|
At 31 March 2024
|
437
|
(590)
|
(153)
|
In April 2023, the Group repaid
the US$95 million (£77 million) US private debt floating rate note
ahead of its maturity using cash. A further US$25 million
(£21 million) relating to a US Private Placement Note was repaid on
maturity in October 2023 from cash.
On 16 May 2024 the Group's
committed, undrawn and sustainability-linked revolving credit
facility of US$800 million (£633 million) was amended and
re-stated. The maturity date was extended for five years to 16 May
2029, and includes two further one-year extension options, which
are subject to lender credit approval.
11. Events after the balance sheet date
On 22 May 2024, the Group agreed
the sale of the remaining interest in Primient joint venture to KPS
Capital Partners, LP for US$350 million.
Refer to the amendment and
restatement of the revolving credit facility in the section
above.
There are no other post balance
sheet events requiring disclosure in respect of the year ended 31
March 2024.
ADDITIONAL INFORMATION
FOR THE YEAR
ENDED 31 MARCH 2024
Calculation of changes in constant currency
Where changes in constant currency
are presented in this statement, they are calculated by
retranslating current year results at prior year exchange rates.
The following table provides a reconciliation between the 2024
performance at actual exchange rates and at constant currency
exchange rates. Absolute numbers presented in the tables are
rounded for presentational purposes, whereas the growth percentages
are calculated on unrounded numbers.
Adjusted performance
Continuing operations
|
2024
£m
|
FX
£m
|
2024
at constant
currency
£m
|
Underlying
growth
£m
|
2023*
£m
|
Change %
|
Change
in
constant
currency
%
|
Revenue
|
1
647
|
61
|
1
708
|
(43)
|
1
751
|
(6%)
|
(2%)
|
Food & Beverage
Solutions
|
281
|
12
|
293
|
20
|
273
|
3%
|
8%
|
Sucralose
|
52
|
3
|
55
|
(3)
|
58
|
(10%)
|
(4%)
|
Primary Products Europe
|
(5)
|
-
|
(5)
|
4
|
(9)
|
35%
|
34%
|
Adjusted EBITDA
|
328
|
15
|
343
|
21
|
322
|
2%
|
7%
|
Adjusted operating
profit
|
258
|
13
|
271
|
20
|
251
|
3%
|
8%
|
Net finance expense
|
(6)
|
(1)
|
(7)
|
13
|
(20)
|
67%
|
66%
|
Share of adjusted profit of joint
venture
|
35
|
2
|
37
|
13
|
24
|
46%
|
53%
|
Adjusted profit before
tax
|
287
|
14
|
301
|
46
|
255
|
12%
|
18%
|
Adjusted income tax
expense
|
(62)
|
(3)
|
(65)
|
(15)
|
(50)
|
(22%)
|
(29%)
|
Adjusted profit after
tax
|
225
|
11
|
236
|
31
|
205
|
10%
|
16%
|
Adjusted diluted EPS
(pence)
|
55.5p
|
2.8p
|
58.3p
|
8.7p
|
49.6p
|
12%
|
18%
|
*
Restated to include other M&A activity-related items in
adjusting items. See Note 2.
Currency Sensitivities
Currency-sensitivity information
for the year ended 31 March 2024 is summarised below. This
sets out the sensitivity to a 5% strengthening of pound sterling
impacting the Group's revenue and adjusted EBITDA in the year ended
31 March 2024:
Currency
|
Year ended 31 March
20241
|
Year
ended
31
March
20232
|
Change
(%)3
|
|
Impact (£m)
of
5% strengthening of
GBP
(vs 2023 average
rate)4
|
|
|
|
|
|
Revenue
|
Adjusted
EBITDA
|
USD
|
1.26
|
1.20
|
4.3%
|
|
(41)
|
(13)
|
EUR
|
1.16
|
1.16
|
0.1%
|
|
(25)
|
(5)
|
Other5
|
|
|
|
|
(8)
|
1
|
1. Based on average daily spot rates from 1 Apr 2023 to 31 March
2024
2. Based on average daily spot rates from 1 Apr 2022 to 31 March
2023
3. Change verses average spot rates for the previous
year
4. Based on best prevailing assumptions around currency
profiles
5. Other currencies include CNY, AUD, JPY, MXN, PLN, ZAR, BRL,
AED, THB
Restatement of prior year alternative performance measures for
treatment of M&A related costs
In the year ended 31 March 2024,
the Group amended its alternative
performance measures to fully exclude incremental merger and
acquisition activity-related costs.
Incremental M&A
activity-related items are excluded as they are a direct result of
completing or attempting to complete an acquisition or disposal.
Their exclusion allows a better understanding of the Group's
underlying financial performance. Such items
include:
1.
Transaction costs for acquisitions and
disposals including advisory, legal, accounting, valuation and
other professional or consulting services;
2.
Acquisition-related remuneration costs; and,
3.
The cost of integrating an acquisition into the Group, or
separating a disposal from the Group, in the
12 months following the associated transaction.
Alternative performance measures
for the year ended 31 March 2024 are reported excluding these costs
and the comparatives for the year ended 31 March 2023 have been
restated accordingly. The additional information shown here
provides details supporting the restatement of information related
to the year ended 31 March 2023.
Income statement measures
Year ended 31 March 2023
|
|
As
reported
previously
£m
|
£m
|
Restated
£m
|
Operating profit
|
|
196
|
-
|
196
|
Depreciation
|
|
59
|
-
|
59
|
Amortisation
|
|
36
|
-
|
36
|
Exceptional items
|
|
28
|
-
|
28
|
M&A costs
|
|
-
|
2
|
2
|
Unwind of fair value
adjustments
|
|
1
|
-
|
1
|
Adjusted EBITDA
|
|
320
|
2
|
322
|
Adjusted profit before
tax
|
|
253
|
2
|
255
|
Adjusted profit after
tax
|
|
203
|
2
|
205
|
Adjusted earnings per
share
|
|
49.3p
|
0.3p
|
49.6p
|
For segmental reporting purposes,
all restatements relate to the Food & Beverage Solutions
reporting segment, with EBITDA for that segment increasing from
£271 million to £273 million.
Cash flow measures
Year ended 31 March 2023
|
As
reported
previously
£m
|
£m
|
Restated
£m
|
Net cash flow from operating
activities
|
66
|
-
|
66
|
Capital expenditure
(net)
|
(71)
|
-
|
(71)
|
Tax paid in respect of Primient
partnership
|
5
|
-
|
5
|
Exceptional cash flows
|
101
|
-
|
101
|
Interest received
|
11
|
-
|
11
|
M&A activity-related
items
|
-
|
2
|
2
|
Free cash flow attributable to
discontinued operations
|
7
|
-
|
7
|
Free cash flow
|
119
|
2
|
121
|
Pro-forma restatement of financial information for the sale of
the remaining interest in the Primient joint
venture
To assist with understanding the
impact of the transaction to sell our remaining 49.7% interest in
Primient to KPS, its majority owner, set out below is pro-forma
financial information for Tate & Lyle for the financial year
ended 31 March 2024. The pro-forma financial information is
designed to show the illustrative impact of this transaction on
continuing operations of Tate & Lyle as if it had completed on
1 April 2023, being the start of the period presented. The
pro-forma adjustments show a reduction in adjusted diluted earnings
per share for the year.
The transaction has been treated as
a non-adjusting post balance sheet event in the results for the
financial year ended 31 March 2024. As a result, the transaction
has given rise to no change in Tate & Lyle's accounting for
Primient or of its presentation in the Tate & Lyle financial
statements for the financial year ended 31 March 2024.
|
|
|
|
Year ended 31 March 2024
|
|
|
|
£m unless otherwise
stated
|
Adjusted
reported
|
Impact of the
Transaction
|
Pro forma
|
Revenue
|
1
647
|
-
|
1
647
|
Adjusted EBITDA
|
328
|
-
|
328
|
Depreciation
|
(57)
|
-
|
(57)
|
Amortisation
|
(13)
|
-
|
(13)
|
Adjusted operating
profit
|
258
|
-
|
258
|
Net finance
expense1
|
(6)
|
-
|
(6)
|
Adjusted share of profit/(loss) of
joint venture
|
35
|
(35)
|
-
|
Adjusted profit before
tax
|
287
|
(35)
|
252
|
Adjusted income tax
expense
|
(62)
|
8
|
(54)
|
Adjusted profit for the
year
|
225
|
(27)
|
198
|
Effective tax rate expense
%
|
21.6%
|
|
21.1%
|
Diluted number of shares
outstanding:
|
404.2
|
|
404.2
|
Diluted earnings per share
(pence)
|
55.5p
|
(6.4p)
|
49.1p
|
1. No
proforma adjustment for interest income generated from the proceeds
has been made as it has been assumed the net proceeds received from
this transaction will be returned to shareholders by way of an
on-market share buyback programme.