Interim Management Statement
Tate & Lyle PLC
9 February 2012 – Tate & Lyle PLC
INTERIM MANAGEMENT STATEMENT
Tate & Lyle issues the following interim management statement covering
the period from 1 October 2011 to 31 December 2011.
OPERATING PERFORMANCE – CONTINUING OPERATIONS
The Group delivered a solid performance in our third quarter ended 31
December 2011 with operating profit in line with our expectations and we
remain on track to deliver a good performance for the financial year
ending 31 March 2012.
Within Speciality Food Ingredients, we achieved steady sales growth
although the rate of volume growth was, as expected, lower than that
achieved in the first half. In corn-based speciality sweeteners and
starches, we achieved good sales growth on higher volumes. Sucralose
volumes grew but below the particularly strong levels seen in the first
half. In Food Systems, we also delivered good sales growth with volumes
in line with the prior year period.
Within Bulk Ingredients, North American liquid sweetener volumes
continued to benefit from robust levels of domestic and Mexican demand.
In Europe, higher sugar prices, which provide a reference price for
isoglucose, enabled us to increase liquid sweetener margins despite
higher corn prices. While industrial starch margins were ahead of the
prior year, volumes were lower as we started to see some softening in
demand from European paper and board customers reflecting the more
uncertain economic environment. Towards the end of the period, US
ethanol margins weakened on the back of lower prices in anticipation of
the expiry of the blenders’ tax credit.
Following a strong first half during which we were able to contract
volumes further forward than usual, income from co-products reverted to
more normal levels during the period. This compares with a strong
performance from co-products during the third quarter last year.
BALANCE SHEET AND WORKING CAPITAL
Net debt of £410 million at 31 December 2011 was in line with 30
We continue to maintain full silos given the continued tight corn
supply. The majority of the corn we are purchasing to keep our silos
full through to the end of the harvest year has been paid for in January
and at higher prices than the prior year. As a result, and based on
current corn prices and exchange rates1, we currently
anticipate that this will drive a net cash outflow in the final quarter
of the financial year and continue to expect that net debt at the end of
31 March 2012 will be somewhat higher than the £464 million at the end
of the last financial year.
1 At 7 February 2012 the US corn price (March 2012 contract)
was US$6.42 per bushel and the £/US$ exchange rate 1.59
The 2012 calendar year sweetener pricing round in North America for the
Bulk Ingredients business is now substantially complete. This pricing
round has been conducted against the backdrop of higher corn and process
In North America, after recovering these higher input costs, overall we
achieved a modest increase in corn sugar unit margins reflecting a
continuation of high levels of industry capacity utilisation on the back
of robust domestic and Mexican demand. Bulk Ingredients sweetener
volumes are likely to be broadly in line with calendar year 2011. In
Europe, where we continue to contract over shorter periods to partially
mitigate corn cost volatility, we have enhanced sweetener margins
against a backdrop of higher sugar prices.
The Group has performed well during the first nine months of the
financial year. While we recognise the wider uncertainties in the global
economy, we remain on track to deliver a good performance for the full
A conference call will be held today at 8.00am GMT, hosted by Javed
Ahmed, Chief Executive and Tim Lodge, Chief Financial Officer.
Participants are requested to dial in at least 5 minutes before the
commencement of the call. Dial in details are as follows:
Participant dial in number: +44 (0) 1452 555 566 (UK freephone 0800 694
Conference ID: 48319120
Replay dial in number: +44 (0) 1452 55 00 00 (UK freephone 0800 953 1533)
A replay of this call will be available from two hours after the end of
the live call until 22 February 2012.
For more information contact Tate & Lyle PLC:
Mathew Wootton, Group VP, Investor and Media Relations
Tel: +44 (0)
20 7977 6211 or Mobile: +44 (0) 7500 100 320
Andrew Lorenz (FTI Consulting), Media Relations
Tel: +44 (0) 20
7269 7113 or Mobile: +44 (0) 7775 641 807