- Food & Beverage Solutions delivers strong top-line growth and double-digit profit2 growth
- Primary Products profit2 higher, benefiting from record year of Commodities profits2
- Strong demand for New Products with revenue up 21% at £133m
- Acquisition of stevia and tapioca businesses expands customer offering and presence in Asia
- Productivity programme continues to support operational efficiency and investment in growth
- 2030 sustainability targets on track with Scope 1 and 2 greenhouse gas emissions reduced by 7%
- Three years of consistent strategic and financial delivery, creating strong platform for future growth
- Exploring separation of two businesses by selling controlling stake in Primary Products
- Food & Beverage Solutions profit2 +12% to £177m; +3% volume and +6% revenue
- Sucralose profit2 -9% to £55m reflecting pricing pressure and higher production costs
- Primary Products profit2 +5% to £158m with Sweeteners and Starches -13%, Commodities +98%
- Group adjusted profit before tax +6%
- Adjusted diluted EPS +12%, benefitting from lower effective tax rate of 14.3% (2020: 17.9%)
- Group statutory diluted EPS +3% after exceptional costs to explore separating businesses and for productivity
- Adjusted free cash flow +£3m higher at £250m
- Net debt £34m lower at £417m; Net Debt to EBITDA ratio 0.8x
- Strong return on capital employed of 17.2%, a 30bps decrease due to the short-term impact of acquisitions
- Final dividend increased by 5.8% to 22.0p, making a full year dividend of 30.8p, up 4.1%
Emerging stronger from the pandemic
- Purpose-led response to pandemic ensuring colleagues and communities supported and customers served
- Broadening product portfolio, investing in innovation and strengthening technical capabilities
- Pandemic accelerating trends for healthier food and drink; supporting growth in new business and innovation
Nick Hampton, Chief Executive said:
"Despite all the challenges thrown at us by the pandemic, we progressed our strategy, grew our profits, strengthened our financial position and increased our dividend.
"In response to the pandemic, we focused on making the right decisions for our colleagues, communities, customers and the environment. Inspired by our purpose of Improving Lives for Generations, this included protecting and supporting colleagues at our sites and at home, providing over one and a half million meals to food banks in our local communities, operating with agility to meet customers’ rapidly changing needs, and delivering significant progress on our sustainability targets. I would like to express my personal thanks to all our colleagues for their dedication during an extremely demanding year.
"Both businesses performed well, with the impact of the pandemic starting to ease through the second half. Food & Beverage Solutions delivered another year of strong top-line growth and double-digit profit growth. The pandemic is accelerating consumer demand for healthier food and drink and with its leading capabilities in sweetening, mouthfeel and fortification, Food & Beverage Solutions is well-placed to capitalise on this trend. Primary Products delivered resilient performance with profit higher despite a significant reduction in out-of-home consumption in North America. This reflects a record year of profits from Commodities as well as a focus on customer service, operational performance and rigorous cost discipline.
"We continue to make good progress on our strategy. We acquired two businesses in Asia to strengthen our sweetener and texturant portfolios in Food & Beverage Solutions. New Products delivered double-digit revenue growth, our new business and innovation pipelines both grew and our productivity programme continued to generate significant benefits.
"Since we announced our strategic priorities in 2018, we have delivered three years of consistent progress and built a strong platform for future growth. We are exploring the potential to separate our Food & Beverage Solutions and Primary Products businesses through the sale of a controlling stake in Primary Products to a long-term financial partner. This transaction would create two businesses, each able to focus on its own strategic and capital allocation priorities – Tate & Lyle focused on Food & Beverage Solutions, and Primary Products in partnership with a new investor with a long-term commitment to growing the business.
"The past year has tested us like no other, and our performance has demonstrated the resilience, quality and agility of Tate & Lyle. We are emerging stronger from the pandemic and I am more confident than ever in the long-term growth potential of our business."
Outlook for the year ending 31 March 2022
For the year ending 31 March 2022, despite the continuing impact of the Covid-19 pandemic, we expect:
- Food & Beverage Solutions to deliver another year of progress
- Sucralose to see further modest pricing pressure
- In Primary Products, Sweeteners and Starches to return to growth as out-of-home consumption recovers and Commodities profits to be significantly lower
- Further productivity benefits.
With overall positive momentum, we expect growth in Group adjusted operating profit before Commodities to be in the mid-single digit range in constant currency.
Reflecting significantly lower Commodities profits and an increase in the adjusted effective tax rate, Group adjusted diluted earnings per share are expected to be lower than the prior year in constant currency.
1 The adjusted results for the year ended 31 March 2021 have been adjusted to exclude exceptional items, amortisation of acquired intangible assets, the tax on those adjustments and tax items that are themselves exceptional. A reconciliation of statutory and adjusted information is included in Note 3 to the Financial Information. Growth percentages are calculated on unrounded numbers. Changes in adjusted performance metrics are in constant currency.
2 Adjusted operating profit