Tate & Lyle Results Strongly Boosted by Specialty Ingredients
31 May 2013 --- Tate & Lyle has announced its full year results for the year ended 31 March 2013. Speciality Food Ingredients sales were up 7% to £947 million (8% in constant currency) (US$1,439 million) with adjusted operating profit broadly in line (0% in constant currency) with the prior year at £213 million (2012 – £214 million).
Bulk Ingredients adjusted operating profit up by 6% to £182 million (7% in constant currency. Adjusted diluted earnings per share up 4% to 57.0p (5% in constant currency. 5.6% increase proposed for the final dividend to 18.8p, making a total dividend increase of 5.2% to 26.2p. There were promising new product launches including the stevia-based, natural, no-calorie sweetener, TASTEVA Stevia Sweetener and salt reduction product, SODA-LO Salt Microspheres.
In Speciality Food Ingredients, the company expects to deliver good sales and profit growth with volume growth across all major product categories. In Bulk Ingredients, against a backdrop of continued corn price volatility, improved bulk sweetener unit margins in the US are expected to offset a softer start in US bulk sweetener volumes and lower isoglucose margins in Europe. Profits within Bulk Ingredients are expected to be more evenly distributed between the first and second half than in the prior year. Overall, the company expects to deliver another year of profitable growth.
Javed Ahmed, Chief Executive, said: “I am pleased to report that the underlying business continues to perform well and that despite having entered the year facing a number of headwinds we have made progress. The opening of our new global Commercial and Food Innovation Centre in Chicago has significantly enhanced the level of engagement with our customers, and we have also made headway developing the innovation pipeline and bringing new products to market. Looking ahead, we will continue to build on the foundations we have laid and expect to deliver another year of profitable growth.”
The company reported that the underlying business continues to perform well and that, despite having entered the year facing a number of headwinds, including the step change in fixed costs associated with the restart of our SPLENDA Sucralose facility in McIntosh, Alabama and business transformation initiatives, progress has been made.
Sales for the year were £3,256 million (2012 – £3,088 million), an increase of 5% (6% in constant currency) on the prior year with sales in our Speciality Food Ingredients division growing by 7% (8% in constant currency) to £947 million (2012 – £887 million). Adjusted operating profit increased by 3% (4% in constant currency) to £358 million (2012 – £348 million) with adjusted operating profit in Speciality Food Ingredients broadly in line with the prior year at £213 million and up 6% (7% in constant currency) in Bulk Ingredients at £182 million (2012 – £172 million). Adjusted profit before tax increased by 4% (4% in constant currency) to £329 million (2012 – £318 million) with adjusted diluted earnings per share also up 4% (5% in constant currency) to 57.0p (2012 – 54.7p).
The company’s Innovation and Commercial Development group (ICD), continues to develop the new product development pipeline across our core platforms of sweeteners, texturants and health and wellness. During the year, ICD supported the launch of six new products including the stevia-based, natural, no-calorie sweetener TASTEVA Stevia Sweetener, and the salt reduction product, SODA-LO Salt Microspheres for which the formal grant of the US patent was confirmed in March 2013. To drive the successful commercialisation of our new products, we have reorganised and strengthened the marketing organisation including the recruitment of a new Senior Vice-President, Global Marketing.
The Open Innovation team continues to search for opportunities globally to form partnerships with universities, research institutes and start-ups specialising in food science. In December 2012, the company signed an agreement with Nandi Proteins Limited, a spin-out from Heriot-Watt University in Edinburgh, to continue developing an early-stage protein ingredient technology for use in the food texturants space. In January 2013, they launched a new, dedicated open innovation web portal (www.tateandlyleopeninnovation.com) to encourage potential partners to submit proposals aligned with our innovation priorities. In May 2013, following an earlier agreement on SODA-LO Salt Microspheres, the company broadened its relationship with Eminate, a subsidiary of Nottingham University, with an agreement to develop its hollow microsphere technology to reduce sodium bicarbonate in baked goods.
The company launched a new £30 million eight-year venture capital fund on 1 January 2013, building on our existing venture fund activities. The new fund will invest in start-ups and expansion-stage companies in both developed and emerging markets in food sciences and enabling technologies. The combination of the new fund and our internal Open Innovation team will give us access to the full spectrum of new ideas, technologies and opportunities in the global food science sector enabling us to deliver more innovative solutions to our customers.
On 17 May 2013, the company acquired Biovelop, an early-stage manufacturer of oat beta-glucan. The acquisition broadens our health and wellness offering and adds a clean-label, speciality fibre with strong health claims to our existing corn-based fibre portfolio.
The company continued to grow its presence in emerging markets. In December 2012, the company opened newly upgraded offices and applications centre in Shanghai which, together with the opening of applications and technical services facilities in Mexico City and São Paulo last year, has strengthened our ability to service customers in these regions and expanded our global innovation network. These new facilities include pilot plant equipment for the production of food and beverage prototypes which are helping the company to leverage its applications know-how and technical expertise to help meet local taste preferences and to respond rapidly to our customers. The company have also continued to expand our go-to-market and technical teams in both Asia and Latin America allowing us to broaden our coverage in these regions in terms of both product categories and geography.
