VALUE ADDED SEMINAR OCTOBER 2004

1
VALUE ADDED SEMINAROCTOBER 2004

• Iain Ferguson
• Chief Executive

2
Agenda
SPLENDA is a trademark of McNeil Nutritionals,
LLC
3
Purpose and Vision

• PURPOSETo create the worlds leading renewable
  ingredients business

• VISION
• We will grow by uniting our businesses and
  developing partnerships to create the worlds
  leading renewable ingredients business. We will
  build a consistent global portfolio of
  distinctive, profitable, high value solutions in
  products and services for our customers.

4
Vision into Action

• Change how we go to market
• Change what we take to market
• Select where we compete

5
Tate Lyle Today
CEREAL SWEETENERS STARCHES
SUGAR
VALUE-ADDED PARTNERSHIPS
SPLENDA Sucralose Sorona Bio 3G AquastaTM
Astaxanthin

• Staley
• Almex
• Citric Acid
• Amylum
• Eaststarch

• TLS/Alcantara
• Sugar Trading
• United Molasses
• Eastern Sugar
• Redpath Sugar
• Occidente
• Vietnam

The DuPont Oval Logo, DuPontTM, Sorona, and The
miracles of scienceTM are trademarks or
registered trademarks of E.I. du Pont de Nemours
and Company
6
Choosing How We Will GrowEconomics of the Four
Segments
Cash Generation per Unit
Cash for Growth
Consumer Branded
Cash and Low Cost/ High Volume Substrate for
Growth
Growth Opportunities
Data Illustrative not to scale
7
The Silent Partners of Prepared Foods

• Increasing demand for convenience and nutrition
  driven by socio-economic change
• Organic growth opportunities for value-added
  ingredients
• Our products help to provide convenience, reduced
  calories and fat, and improved functionality

What makes value added? Greater degree of
processing, technical know-how or intellectual
property, sustainable / superior margins, pricing
power
8
We Are Asking Consumers What They Want
Health Convenience Pleasure
I dont have time to cook from fresh I dont
want to compromise on taste my kids need energy
and fun products I want to eat more healthily,
not diet I dont want to be misled by brands
the manufacturers have to be responsible
9
We are Responding to Evolving Consumer Trends and
Customer Needs
Today . . .
Yesterday . . .
Consumers are getting more sophisticated, more
demanding and increasingly health-conscious
Strong brands Solid distribution Great
taste Traditional Ingredients

• Our customers focused on strong brands and great
  taste
• Products had ingredients understood by consumers
• Limited ingredient differentiation

• Healthy, innovative and lifestyle-friendly but
  no taste compromises!
• Our customers need performance ingredients
• We need to balance, taste, energy, creativity
  traditional ingredients and novel ingredients
• Its about the experience!

10
Obesity Trends Among U.S. Adults1985
Source Behavioral Risk Factor Surveillance
System, CDC
11
Obesity Trends Among U.S. Adults1988
Source Behavioral Risk Factor Surveillance
System, CDC
12
Obesity Trends Among U.S. Adults1991
Source Behavioral Risk Factor Surveillance
System, CDC
13
Obesity Trends Among U.S. Adults1994
Source Behavioral Risk Factor Surveillance
System, CDC
14
Obesity Trends Among U.S. Adults1997
Source Behavioral Risk Factor Surveillance
System, CDC
15
Obesity Trends Among U.S. Adults2000
Source Behavioral Risk Factor Surveillance
System, CDC
16
Obesity Trends Among U.S. Adults2002
(BMI ?30, or 30 lbs overweight for 54 person)
Source Behavioral Risk Factor Surveillance
System, CDC
17
Forecast 2005
Source Behavioral Risk Factor Surveillance
System, CDC / Mokdad AH
18
Research Development Focus
Health and Wellness Initiatives 30 SPLENDA
Sucralose, sweetener systems, wellness
ingredients, delivery systems Customer Solutions
- 30 CORE Create/Optimize/Rebalance/Enrich,
new food ingredients, unique ingredient
systems Bio-Materials 25 Bio 3G, packaging
alternatives, films and coatings Animal Feed
Ingredients 5 Aquasta astaxanthin, high value
additives, proteins Process support 10
19
The Starch Process
Starch
Value Added Starches
Conversion
Glucose Syrup
Hydrogenation
Refining
42 55 HFCS Crystalline Dextrose Crystalline
Fructose Maltodextrin
AquastaTM Bio-3G Citric Acid Ethanol Xanthan Gum
20
What Do Our Products Do?

• Thicken
• Bind
• Adhere
• Strengthen
• Sweeten
• Preserve
• Suspend
• Carry
• Improve Appearance
• Extend Shelf-Life
• Provide Humectancy

• Enrich / Fortify
• Encapsulate
• Emulsify
• Gel
• Agglomerate
• Coat
• Stabilise
• Acidify
• Provide Body
• Add Bulk
• Reduce Calories

21
What Do Our Products Do?

• Thicken
• Bind
• Adhere
• Strengthen
• Sweeten
• Preserve
• Suspend
• Carry
• Improve Appearance
• Extend Shelf-Life
• Provide Humectancy

• Enrich / Fortify
• Encapsulate
• Emulsify
• Gel
• Agglomerate
• Coat
• Stabilise
• Acidify
• Provide Body
• Add Bulk
• Reduce Calories

22
What Do Our Products Do?

• Thicken
• Bind
• Adhere
• Strengthen
• Sweeten
• Preserve
• Suspend
• Carry
• Improve Appearance
• Extend Shelf-Life
• Provide Humectancy

• Enrich / Fortify
• Encapsulate
• Emulsify
• Gel
• Agglomerate
• Coat
• Stabilise
• Acidify
• Provide Body
• Add Bulk
• Reduce Calories

23
What Do Our Products Do?

• Thicken
• Bind
• Adhere
• Strengthen
• Sweeten
• Preserve
• Suspend
• Carry
• Improve Appearance
• Extend Shelf-Life
• Provide Humectancy

• Enrich / Fortify
• Encapsulate
• Emulsify
• Gel
• Agglomerate
• Coat
• Stabilise
• Acidify
• Provide Body
• Add Bulk
• Reduce Calories

24
What Do Our Products Do?

• Thicken
• Bind
• Adhere
• Strengthen
• Sweeten
• Preserve
• Suspend
• Carry
• Improve Appearance
• Extend Shelf-Life
• Provide Humectancy

• Enrich / Fortify
• Encapsulate
• Emulsify
• Gel
• Agglomerate
• Coat
• Stabilise
• Acidify
• Provide Body
• Add Bulk
• Reduce Calories

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Summary

• We are turning our vision into action through
  investment in
• Consumer understanding
• Sales and marketing experience
• Research and development
• We understand the drivers behind the growth in
  our value added starches
• Our starches add functionality to our customers
  products

26
Value Added SeminarFinancial Context

• Simon Gifford
• Group Finance Director

27
Value Added Consumer BrandedGroup Strategy
Strategy announced September 2000
To grow the contribution to EBITA by value added
and consumer branded products from a base of
around 30-35 to 50
Target met and exceeded for the past three years
28
Analysis of FY2004 EBITA 251m
Value Added 42
Commodity 24
Quota Constrained 22
Consumer Branded 12
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Contribution to Profitability Year Ended March
2004
CB
VA
CB
VA
30
Contribution to Profitability Year Ended March
2004
Margin Category Sales
EBITA/Sales Contribution to
Mgn Value added 15 23
3.4
Consumer branded 5 20
1.0 Quota constrained 16 10
1.6 Commodity 64
3 1.9 Group total
100 7.9
7.9
31
Group EBITA / Sales Margin FY01 to FY04
32
Product Analysis by Unit
UNIT Value Added Consumer Quota
Commodity Branded
Constrained Staley ?
? ? ? Redpath
? ? ? ? TL
Sugars ? ? ?
? Alcantara ? ?
? ? Amylum ?
? ? ? Sucralose
? ? ?
? Bio-3G ? ? ?
? Astaxanthin ? ? ?
?
33
Value Added Product Applications
Bio-products
Cereal Sweeteners
Alcohols Polyols
Sugars Syrups
Sucralose
Cereal Starches
Top 10 VA product ranges contributed 75m to EBITA
34
Value Added Product Applications
Bio-products
Cereal Sweeteners
Alcohols Polyols
Sugars Syrups
Sucralose
Cereal Starches
Top 10 VA product ranges contributed 75m to EBITA
35
Value Added Product Applications
Bio-products
Cereal Sweeteners
Alcohols Polyols
Sugars Syrups
Sucralose
Cereal Starches
Top 10 VA product ranges contributed 75m to EBITA
36
Value Added Product Applications
Bio-products
Cereal Sweeteners
Alcohols Polyols
Sugars Syrups
Sucralose
Cereal Starches
Top 10 VA product ranges contributed 75m to EBITA
37
Value Added Product Applications
Bio-products
Cereal Sweeteners
Alcohols Polyols
Sugars Syrups
Sucralose
Cereal Starches
Top 10 VA product ranges contributed 75m to EBITA
38
Research Development Expenditure

• Budgeted around 20m for FY05
• Focussed on value added
• product development
• (Staley, Amylum, sucralose)
• Rifle shot methodology

Group RD Expenditure in m
39
Financial Context Summary

• 50 target achieved and exceeded
• Growth in value added will improve quality of
  profits and EBITA/sales margin
• Value added products sold by several business
  units, to many different customers
• Value added growth enabled by focussed RD
  expenditure

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Product Tasting
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Value Added Seminar A New Approach to Customers

• Greg Morency
• Vice President Marketing

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Agenda A New Approach to Customers
43
Why We Are Changing

• Insight a better understanding of market
  trends and customer needs
• Building on our relationships with key customers
• Providing solutions to new product strategies
• We want to become a more relevant and valued
  customer partner

..offering innovative solutions rather than
individual ingredients
44
Agenda A New Approach to Customers
45
Where Can We Look For Added-Value Growth? Where
Is The Opportunity In Foods?
Forecast category values, Retail Sales Price, bn
bn
(North America, Western Europe)
200
22
153
150
22
125
23
103
32
2003
100
84
84
82
25
68
2008
62
49
17
39
50
38
18
16
11
8
0
Beverages
Bakery
Confectionery
Dairy
Soups, Sauces,
Breakfast
Bars
Dressings
cereals
Source Euromonitor, 2004
46
Developing Leadership With Key Accounts and
Influential Category Leaders
Mid-market Category Leaders and Innovators

• Global Key Accounts Regional Key Accounts
• 30 global and regional key accounts
• Scale players in our target value added
  categories
• Leveraging our traditional relationships

• Aligned with target categories and our solutions
  expertise
• Proving our innovation skills with fast-moving
  brands
• Significant volumes in aggregate supported by
  new channels

47
From Supplier to Partner
Strategic Relationship Top-to-Top

• Sharing strategic priorities and consumer/market
  insights
• Set frameworks
• Listen to needs and set priorities
• Agree review process

Account Co-ordination/Planning
Collaborative project

• Routine price negotiation for commodities
• Partnering on innovation projects
• Solutions/account teams
• Separate pricing discussions from
  innovation/solutions relationships

OTIFFT
Delivery one way of doing business
Service level 1 Service level 2 Service level
3 Service level 4

• Choice of channel face-to-face, Electronic Data
  Interface, call centre
• Consistent standards and operations to meet the
  customers service targets
• Innovating the services we offer them
  (traditional relationships and added-value
  partnerships)

48
A New Approach to Managing Delivery and Service
Targets and measures in place
Tools and capabilities

• Price and margin management
• Shipping performance
• Customer satisfaction
• Global and regional performance

• Real time data updates on Sharepoint
• Integrated CRM system
• Empowered delivery and operational staff
• Prioritization of flagged account deliveries

49
Customer Management Journey
Pro-activity

• Proactive consumer research and concept
  development
• Negotiating exclusivity, support , price

H
Why dont we..?
What do you need how about ...?

• Collaborative product development
• Negotiating on price and added-value

• Proactive problem resolution
• Agreeing a price they have choices

What do you need?
I have made this, who wants it?

• Potentially extreme price concessions
• Fire-fighting to solve problems

L
L
H
Competitive differentiation
50
Agenda A New Approach to Customers
51
We Are Helping Our Customers Respond Effectively
52
New Sales Strategy Account Teams Prioritised a
Short List of Opportunities For Solution Selling
Tate Lyle RebalanceTM in ice-cream and
yoghurt
Flavoured waters with enhanced nutritional
benefits e.g. added calcium, balanced to your
needs (energy, calories, glycaemic index)
Tate Lyle RebalanceTM and Tate Lyle EnrichTM
in beverages Tate Lyle CreateTM and Tate
Lyle RebalanceTM in confectionery and snack bars
Snack bars that are fruitier, sweeter, tastier,
healthy/energy balanced, fortified
53
New Processes Tate Lyle Rebalance Shows
Where We Can Take Customers Brands
Tastier diet product
Showing how we can help reach new positions in
health and taste
Extreme diet/positive health proposition
Positive health/vitality product
Everyday vitality/ good-for-you proposition
No targeted health proposition
Indulgence product
Where exactly do you want to be?
Exceptional
Plain, unexciting
Taste/texture
54
Making Our Offer The Best-in-Market
SPLENDA is a trademark of McNeil Nutritionals,
LLC
55
Agenda A New Approach to Customers
56
The Analysts Sensory Panel

• Three samples of ice-cream
• Two are existing branded products vanilla soft
  scoop and vanilla soft scoop light
• The third has been made in our labs using the
  rebalance model
• Electronic voting
• We will compare your findings to one of the most
  respected tasting organisations in the world

57
Who Wants To Be An Ice-cream Taster?

• Use scales
• Interactive
• Results immediately visible
• Test now!

58
Our New Sensory Partners Have Given Us External
Validation and Credibility
TL T25 Full flavour Light
Source Independent Research
59
Agenda A New Approach to Customers
60
Conclusion Our New Customer Solution Model
Enhanced Customer Relationships
New Focus on Communications
New Processes
New Products Services
New Key Account Focus
Existing Relationships
61
Value Added Seminar Bio-products

• John Roginski
• Vice President, Sales And Marketing
• Industrial Products

62
Why Bio-products?

• Made from renewable materials
• Sustainability
• Greenhouse gases
• Petroleum and natural gas reserves and prices
• Development of value added products
• Diversity

63
Bio-products

• 1,3-Propanediol (Bio-3G)
• Bio-gums
• AquastaTM Astaxanthin

The DuPont Oval Logo, DuPontTM, Sorona, and The
miracles of scienceTM are trademarks or
registered trademarks of E.I. du Pont de Nemours
and Company
64
Developing Partnerships Bio-3G with DuPont
Bio-3G Loudon Plant (north view) Computer
Generated Image

• Combined investment approx. US100m by March 2006
• Initial commercial manufacturing facility in
  Loudon, Tennessee
• Construction complete 31 March 2006
• Sales forecast US75m by 2008

65
What is 1,3-Propanediol (Bio-3G)?

• Chemically 1,3-Propanediol is CH2OH-CH2-CH2OH
• It can be produced from petrochemicals or by the
  joint ventures patented fermentation technology
• When Bio-3G is polymerised with terephthalic
  acid, a new unique polymer is produced DuPont
  Sorona polymer

Commodity corn syrup is being traded up to value
added Bio-3G
66
The Value Chain

67
The Bio-3G Process
Fermentation
Separations
Refining
Water
Glucose
Low MW
Nutrients
Impurities
Fibre
-
Ion Exchange
Distillation
Membrane
Fermentation
Grade
Evaporation
Hydrogenation
Filtration
3G
Organic
Biomass
High MW
Impurities
Biocatalyst
Oxygen
Water
Impurities
68
DuPont and Tate Lyle Bio-3G Video
Not available for web viewing
69
Market Drivers and Barriers

• Bio-3G Drivers
• Unique polymer properties
• Cost and quality of monomer
• Sustainability/renewability
• Oil and natural gas prices
• Barriers
• Polymerisation technology
• Patent position
• Microbe technology

70
Unique Properties that Bring Benefitsto the
Consumer

• Stretch and recovery
• Softness
• Dyeability
• Stain resistance
• Chlorine and UV resistance

71
Renewability Benefits to the Environment

• Produced from renewable resources
• Less energy to produce and lower greenhouse gas
  emissions than petrochemical 3G
• Smaller environmental footprint and greater
  functionality than incumbent polymers

72
Crude Oil Prices
Average price of crude oil each year - US/ barrel
Calendar Years
73
Patent Protection

• Numerous microbe patents
• Comprehensive process patent submitted
• Extensive Bio-3G and Sorona polymer trade secrets

74
Bio-3G Target Markets

• Carpet
• Apparel
• Engineering polymers
• Polyols
• Heat transfer fluids
• Petro polymer substitution

75
Market Polyester Grows Globally
76
Bio-products

• 1,3-Propanediol (Bio-3G)
• Bio-gums
• AquastaTM Astaxanthin

The DuPont Oval Logo, DuPontTM, Sorona, and The
miracles of scienceTM are trademarks or
registered trademarks of E.I. du Pont de Nemours
and Company
77
Bio-Gums -An Example of Organic Growth

• A family of hydrocolloid gums produced by
  fermentation
• Xanthan gum first entry for Tate Lyle
• Complementary to food and industrial ingredients
• An important addition to our solution set
  approach to customers
• Highly value added
• Opportunity for a portfolio of unique bio-gums
• Principal markets food ingredients and oil well
  drilling
• A thickener high viscosity at low concentrations

78
Bio-products

• 1,3-Propanediol (Bio-3G)
• Bio-gums
• AquastaTM Astaxanthin

The DuPont Oval Logo, DuPontTM, Sorona, and The
miracles of scienceTM are trademarks or
registered trademarks of E.I. du Pont de Nemours
and Company
79
AquastaTM Natural Astaxanthin

• Joint venture with US bio-tech company, Igene,
  announced in March 2003 to produce natural
  astaxanthin, AquastaTM
• Selby, UK plant is being commissioned
• Essential nutrient for farm raised fish
• Natural fermentation product
• Brand is trademarked

80
Aquaculture Projections
Global Farmed Salmon Production
Source TL estimates, Norwegian Seafood Export
Council and Kontali Analyse AS.
81
Bio-products Summary

• Excellent partners DuPont, Igene
• Attractive margins
• Already produced from petrochemicals/synthetics
  with an established market
• Patent protected
• Unique functionality
• Produced from renewable resources
• Exciting growth potential if commercialisation is
  successful

82
SPLENDA Sucralose

• Austin Maguire,
• President Tate Lyle Sucralose

83
Agenda
SPLENDA and the SPLENDA logo are trademarks of
McNeil Nutritionals, LLC
84
Sucralose - Made From Sugar
Sucralose
Sucrose
Made from sugar and tastes like sugar 600 times
sweeter than sugar No calories Process and shelf
stable No unpleasant after-taste Blends easily
with other nutritive and non-nutritive
sweeteners and food ingredients No warning labels
85
Development History

• 1976 Discovered by Tate Lyle researchers
• 1980 Licence agreement with Johnson Johnson
  signed
• 1987 Petitions for approvals submitted
  worldwide
• 1991 First regulatory approval granted (Canada)
• 1992 Worlds first food product sweetened with
  SPLENDA Sucralose is launched in
  Canada McNeil launch SPLENDA No Calorie
  Sweetener tabletop product in Canada
• 1998 US FDA approval Diet RC Cola
  reformulates to 100 sucralose New
  manufacturing plant announced Alabama, USA

86
Development History

• 2000 McNeil Nutritionals launch SPLENDA No
  Calorie Sweetener tabletop product in the
  USA
• 2001 Tate Lyle / McNeil Nutritionals Global
  Alliance on sucralose announced
• 2002 Sucralose approval granted in the UK
• 2003 SPLENDA No Calorie Sweetener becomes the
  number 1 brand in the Low Calorie Sweetener
  (LCS) category in the USA
• 2004 EU approval process complete
  Realignment of sucralose business with McNeil
  Nutritionals (April)

87
Recap of Business Realignment (April 2004)

• Enduring relationship
• Realignment completed 2 April 2004
• Tate Lyle manufactures and sells SPLENDA
  Sucralose as an ingredient to food and beverage
  companies worldwide
• McNeil Nutritionals sells SPLENDA Brand tabletop
  products worldwide
• Cash price of US132m paid
• Pro forma PBT of US33m in calendar 2003

88
Trading Update Six Months to September 2004

• Sales will be 100 million
• The profit will exceed the pro forma PBT of 33
  million that was achieved in the 2003 calendar
  year
• Two plant expansions announced

89
Manufacturing

• 6 June 2004 Investment of 16m (US30m) in plant
  expansion
• 28 July 2004 Additional investment of 22m
  (US45m)
• Plant expansion will be completed by early 2006
  and will double capacity
• Expansion programme on track and within budget

90
Agenda
91
Building A Branded Food Ingredient

• Working with our partners, McNeil Nutritionals,
  we are jointly leveraging the equity of the
  SPLENDA Brand
• Ingredient business experiencing tremendous
  success in the North American market and Japan
• Significant interest in featuring the Sweetened
  with SPLENDA logo on customer packaging
• Additional growth potential in Europe, South
  America, Far East
• McNeil Nutritionals continue to expand their
  global tabletop brand

92
SPLENDA No Calorie SweetenerNo.1 Brand in the
low calorie sweetener category in the USA
Market Share (US sales)
Source Information Resources, Inc. - Total US
FDTKS, 4-5 week periods ending 15 September 2004
93
Brand Synergy Builds Awareness
Ingredient
Tabletop
94
SPLENDA Brand PositioningNew UK Television
Advertisement
Not available for web viewing
95
Agenda
96
Patents - Overview

• There are 32 sucralose patents currently in force
• 23 manufacturing patents
• 5 patents related to blends / applications
• 4 patents on product forms
• Manufacturing patents now form the cornerstone of
  protection
• All known economically viable routes for making
  sucralose patented
• 7 new patent applications filed
• We remain committed to continuing to patent new
  routes to manufacture sucralose and any process
  improvements
• No relevant 3rd party patents on sucralose
  manufacturing

97
Patents - Expiry
Expired
98
Barriers to entry
SPLENDA Sucralose brand
Regulatory Specifications
Economy of Scale
Technology
Know-how
Patents
99
Agenda
100
Intense Sweetener Market Relative Value Split by
Geography and by Product, Total Value US1bn
USm, Manufacturers Sales 2003
Data Company Estimates
101
SPLENDA Sucralose Ingredient Use Split by
sales revenue
Pharma, 6
Beverages, 32
Food, 62
Data Company Estimates
102
Agenda
103
Global Success

• Over 4,000 foods and beverages are now sweetened
  with SPLENDA Sucralose around the world
• USA is the most important market driven by the
  success of the tabletop products, plus
• Soft drinks
• Nutritionals Atkins, Slimfast, low Carb
• Dairy yogurts and ice cream
• Popcorn!
• Success in Japan sucralose has been included in
  over 2,000 product launches since 1999
• Business currently being developed in Europe, led
  by the UK

104
Recent US Launches
105
Pepsi Edge TV Commercial
Not available for web viewing
106
United Kingdom
107
Japan
108
Summary

• Strong consumer proposition made from sugar so
  it tastes like sugar
• Enduring partnership with McNeil Nutritionals
• Synergies between ingredient and tabletop
  businesses through the SPLENDA Brand
• Excellent growth prospects
• Synergies with other Tate Lyle ingredients
• Global expansion
• Barriers to third party market entry

109
VALUE ADDED SEMINARCONCLUSION

• Iain Ferguson
• Chief Executive

110
Conclusion

• Strong management team
• Sound strategy based on continued growth in value
  added products
• Success in growing the business both organically
  and through partnerships
• Investing in research and development, consumer
  research and sales and marketing expertise
• More customer focussed