Javed Ahmed, Chief Executive, said:
“Tate & Lyle performed slightly ahead of our expectations in the first half of the year, before the impact of exchange translation, despite challenging conditions in a number of our markets. We are encouraged by the good progress made in reducing net debt, reflecting our focus on reducing costs, optimising working capital and reducing capital expenditure.”
• Net debt reduced by 20% since 31 March 2009 to £987 million (11% before exchange translation)
• Free cash flow3 of £258 million
• Adjusted operating profit down 1% at £148 million (16% in constant currency4)
5 up 10% (down 6% in constant currency) • Adjusted operating profit from core value added food ingredients
• Adjusted diluted earnings per share down 4% at 18.3p (14% in constant currency)
• Food & Industrial Ingredients, Americas reported higher profits from food ingredients, outweighed by lower industrial profits, reflecting weaker industrial starch and ethanol markets, and lower co-product income
• Food & Industrial Ingredients, Europe reported profits well ahead of the prior period, aided by lower corn costs
• The EU Sugar market remained challenging
• Sucralose sales increased by 15% in volume and by 9% in value in constant currency
• Underlying costs reduced by £16 million over the comparative period
Overall, the Group's performance, before the impact of exchange translation, remains on track to meet our expectations for the full year.
At our Food & Industrial Ingredients businesses in the Americas and Europe, the order patterns of our food and beverage customers appear to have been re-established, albeit at slightly lower levels. However, global industrial starch, US ethanol and US animal feed markets remain under pressure. We expect continuing underlying growth in Sucralose and improved profits from Sugars in the second half. As usual, the outcome of the 2010 calendar year sweetener pricing rounds will influence performance in the last quarter of the financial year.
Against this backdrop, we continue to take the actions necessary to strengthen the Group’s balance sheet, reduce our costs and ensure that we are well positioned as markets improve.
1 Excluding the results of International Sugar Trading and Eastern Sugar in both periods.
2 Before exceptional costs of £55 million (2008 – £nil) and amortisation of acquired intangible assets of £7 million (2008 – £7 million).
3 Free cash flow is operating cash flows from continuing operations after working capital, interest, taxation and capital expenditure.
4 Changes in constant currency are calculated by retranslating prior period results at current period exchange rates.
5 Core value added food ingredients comprise value added starch-based food ingredients and excludes sucralose.
This Statement of Half Year Results 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. Nothing in this Statement of Half Year Results should be construed as a profit forecast.
A copy of this Statement for the six months ended 30 September 2009 can be found on our website at www.tateandlyle.com. A hard copy of this Statement is also available from The Company Secretary, Tate & Lyle PLC, Sugar Quay, Lower Thames Street, London EC3R 6DQ.
SPLENDA® is a trademark of McNeil Nutritionals, LLC
Webcast and conference call
A presentation of the results by Chief Executive, Javed Ahmed and Group Finance Director, Tim Lodge will be audio webcast live at 10.00 (UKT) today. To view and/or listen to a live audiocast of the presentation, visit http://www.tateandlyle.com/TateAndLyle/investor_relations/results/default.htm or http://www.thomson-webcast.net/uk/dispatching/?event_id=c796a9511c4def0352dc2b673fad69f8&portal_id=39b37fe9dc2bfc6ead9b7087924f0a2e. Please note that remote listeners will not be able to ask questions during the Q&A session. A webcast replay of the presentation will be available within two hours of the end of the live broadcast for six months, on the link above.
For those unable to view the webcast, there will also be a teleconference facility for the presentation. Details are given below:
UK dial in number: +44 (0) 203 003 2666
US dial in number: +1 866 966 5335
7 day conference call replay:
UK replay number: +44 (0) 208 196 1998
US replay number: +1 866 583 1035
Replay Access code: 691691#
For the full Interim Results Announcement, click here.