Sterling Bond Investor Presentation

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Sterling Bond Investor Presentation
WORLD LEADER IN CARBOHYDRATE INGREDIENTS WORLD
LEADER IN CARBOHYDRATE INGREDIENTS
June 2002
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Agenda

• Business Overview
• Group Strategy
• Financial Review
• Credit Strength
• Bond Offering Details

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A World Leader in Carbohydrate Ingredients
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History
The First Hundred Years
Initial Starch Investments
A FocusedBusiness
1859Henry Tate forms sugar refining partnership
1976First investment in Cereal Sweeteners
Starches
1938Listed on the London Stock Exchange
1999-2002Sale of 30 businesses to focus on core
activities
2000Creation of a Global Cereal Sweeteners
Starches business
1921Henry Tate Sons merge with Abram Lyle
Sons
1988First investment in US Corn Wet Milling
1959First investment in North America
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Group Structure in June 2002Following disposal
of 30 businesses
CEREAL SWEETENERS STARCHES
SUGAR

• TLS/Alcantara
• Sugar Trading
• Eastern Sugar (JV)
• Redpath Sugar
• Occidente
• Vietnam China

• Staley
• Almex (JV)
• Citric Acid
• Amylum
• Eaststarch (JV)
• Sucralose

Note excludes UM Group - planned disposal
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Starch Industry Overview

• The Starch Tree Inputs and Outputs of the
  Industry

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Cereal Sweeteners
Markets
Product
Raw Material
Corn
HFCS Corn Syrup Maltodextrins Polydextrose Dextros
e Crystalline Dextrose Fructose
Soft drinks Confectionery Brewing
Wheat
Baking Fermentation
Tate Lyle Product Volume 5m tonnes
Tate Lyle Position
World No.1 Crystalline Fructose North America
No. 2/3 HFCS, No.2 Dextrose EU No.1 HFCS
(Isoglucose), No.2 Glucose
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Starches
Markets
Product
Raw Material
Corn
Food Beverages Pharmaceutical
Food Starches
Wheat
Paper Board Corrugating Building Materials
Textiles
Industrial Starches
Tate Lyle Product Volume over 1.5m tonnes
Tate Lyle Position
Global No.1 Industrial Starches North America
No. 2 in Commodity Specialty Food Starches
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Fermentation Hydrogenation
World No.1 Citric Acid EU No.1 MSG
Grain Alcohols
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Sugar

• TLS (UK) 42 share of UK industrial, 30 share
  of UK retail sugar markets
• Alcantara c. 50 of Portuguese market
• Regulatory protection under EU sugar regime
• Strong consumer brands
• Eastern Sugar poised to benefit from EU
  enlargement
• Other Markets Redpath (Canada), Occidente
  (Mexico), Nghe An (Vietnam)

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Agenda

• Business Overview
• Group Strategy
• Financial Review
• Credit Strength
• Bond Offering Details

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Strategy Overview
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The Group in March 1999Significant operating
units
Sugar Domino Western Redpath Occidente
Sugar TLS/Alcantara TLI Eastern (JV) Garbow
(Poland)
Starch A E Staley Almex Citric Imasa (Argentina)
Starch Amylum Eaststarch (JV)
North America
Europe
Animal Feed PM Ag United Molasses UMT Rumenco ABS
(JV) FSL Bells
International
Other
Bundaberg ZSR Zambia Sugar UFIC/EAP NATL
(Vietnam) China
Booker Tate (JV) Fletcher Smith TLPT
Sucralose
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Group Structure in June 2002Following disposal
of 30 businesses
CEREAL SWEETENERS STARCHES
SUGAR

• TLS/Alcantara
• Sugar Trading
• Eastern Sugar (JV)
• Redpath Sugar
• Occidente
• Vietnam China

• Staley
• Almex (JV)
• Citric Acid
• Amylum
• Eaststarch (JV)
• Sucralose

Note excludes UM Group - planned disposal
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Delivering on Strategy Low cost culture
throughout the Group
Good progress on Amylum integration Confident of
achieving 50m pa benefit
Millwall production site closed
Exceeded 3 energy efficiency target
New Global Teams Export Sales Speciality
Sales RD
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A World Leader in Carbohydrate Ingredients
Speciality products - specific functionality
Focused RD working with customers
45 contribution from Value Added
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Agenda

• Business Overview
• Group Strategy
• Financial Review
• Credit Strength
• Bond Offering Details

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Summary Profit and Loss Account
m Year ending March
2002
2001
Change ()

• Turnover
• EBIT 1
• Margins
• Net interest
• Profit before tax 1

3,944 216 5.5 (57) 159
4,146 185 4.5 (72) 113
-5 17 21 41
4.3x 2.3x
28 43
5.5x 3.3x
EBITDA / Interest 2 EBIT / Interest 2
1 Before exceptional items and goodwill
amortisation 2 Excludes joint ventures and
associates
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Profit and Loss AccountAnalysis - year ended
March 2002
m Planned Ongoing Disposals Discontd To
tal Sales 3,053 371
520 3,944 Profit before interest 216
15 (15) 216 Goodwill amortisation
(8) - -
(8) Profit before interest 208 15
(15) 208 PBI/Sales margin
7.1 4.0 n/a 5.5
Ongoing and Planned Disposals together
constitute continuing activities before
exceptional items and goodwill amortisation be
fore exceptional items
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Segmented Profit and Loss
2002 Sales
2002 EBIT
EBIT (1) 216m
Sales 3,053m
Before exceptional items and goodwill
amortisation
(1) Includes net cost from Other Businesses and
Activities of 22m
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Summary Balance Sheet
2002
2001
m Year ending March
1,860 551 (963) (386) 1,062

• Fixed Assets
• Working Capital
• Net Debt
• Provisions
• Net Assets

1,699 365 (639) (344) 1,081
Gearing Net Debt / EBITDA RONOA
59 2.1x 10.5
91 3.3x 8.5
EBITDA excludes share of income from joint
ventures and associates before exceptional
items
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Capital Expenditure
m
Years ended March
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Free Cash Flow Generated 273mYear to March
2002, in m
Interest
1
143
Tax
Other
Capex
301
61
273
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Reduction in working capital
76
Free cash flow
Operating profit before depreciation
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Reduction in Net Debt 324mYear to March 2002,
in m
963
Free cash flow
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Disposals
79
639
Investments
Other
Dividends
273
137
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2002
2001
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Net Debt - 5 Year HistoryAs at 31 March
m
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Financial Targets

• EBITA / Interest Cover gt 4x
• 15 RONOA
• gt 50 of EBITA from value added

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Debt Maturity Profile
Maturity of Borrowings
Undrawn Committed Facilities
Existing borrowings
200m bond
Dotted line represents syndicated facility to be
repaid with proceeds from 200m bond issue
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Items not on Balance Sheet
2002
2001
m Year ending March

• Receivables securitisation 52
  42
• Indebtedness of JVs associates
  
• 
  100 145 220
• Group share 71 86
• Commitments under
• operating leases 166 210

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Agenda

• Business Overview
• Group Strategy
• Financial Review
• Credit Strength
• Bond Offering Details

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Rating Agency Perspective
Moodys Baa2 (Stable)
Standard Poors BBB (Stable)
The ratings reflect the strengths of TLs
competitive positions in the sugar, cereal
sweeteners and starch industries, and the broad
diversification of the companys earnings
base....It also takes into account that the
operating performance should improve after a
difficult 2000 / 2001 financial year....The
ratings outlook is stable, reflecting Moodys
expectation that TL will continue to be exposed
to the cyclicality of its markets, resulting in
fluctuating profitability and debt protection
measures it also reflects that TL financial
profile should be positively impacted by asset
sales which should help reduce debt. 7 Mar
2002
The ratings reflect the group's leading
positions in cereal sweeteners and starches in
the U.S. and the EU, as well as in the very
stable EU sugar industry its successful
divestment of noncore businesses, especially that
of the loss-making U.S. sugar operations and
improving financial profile Further improvements
in earnings and debt measures are likely in
financial year 2003, on the back of stable market
conditions additional synergy benefits from the
integration of Staley and Amylum the group's
enhanced business mix following the divestment of
the U.S. sugar operations and limited
investments. To sustain the current ratings, Tate
Lyle needs to maintain EBITA net interest
coverage of at least 3x to 3.5x. 7 June 2002
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Investment Highlights

• Strength of operating cash flow
• Investment grade ratings
• Conservative financial policies
• Improving financial ratios
• Consistent and effective strategy

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Agenda

• Business Overview
• Group Strategy
• Financial Review
• Credit Strength
• Bond Offering Details

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Offering Summary

• Issuer Tate Lyle International Finance PLC
• Guarantor Tate Lyle PLC
• Issue Size GBP 200m
• Maturity 7 or 10 years
• Offering Format Eurobond issued off existing
  EMTN programme
• Ratings Baa2 (stable outlook) / BBB (stable
  outlook)
• Use of proceeds Refinancing existing debt
• Joint-Bookrunners HSBC, Schroder Salomon Smith
  Barney