Creating a leading, global speciality
food and beverage solutions business
Proposed combination of Tate & Lyle and CP Kelco
20 June 2024
Nick Hampton, Chief Executive
Dawn Allen, Chief Financial Officer
Tate & Lyle
Cautionary statement
This presentation has been prepared by Tate & Lyle PLC (the “Company”) solely for your information in connection with the agreement to acquire the entire issued share capital of (i) CP Kelco U.S.; (ii) CP Kelco China; and (iii) CP Kelco ApS together with each of their respective subsidiaries,
from J.M. Huber Corporation (the “Transaction”). The release, presentation, publication or distribution of this document in or from certain jurisdictions may be restricted or prohibited by the laws of any jurisdiction other than the United Kingdom. Recipients are required to inform themselves of,
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(“Greenhill”) are acting as the Company’s financial advisers.
This presentation and the information contained herein is not intended to, and does not constitute or form part of, and should not be construed as, any offer, invitation, solicitation or recommendation or offer to purchase, sell, subscribe for or otherwise dispose of or acquire any securities or the
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The Company does not consider the information contained in this presentation to amount to inside information for the purposes of the EU Market Abuse Regulation (as it forms part of UK domestic law under the European Union (Withdrawal) Act 2018 (“MAR”)). However, you should make your
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This presentation may contain certain forward-looking statements, beliefs or opinions, including statements with respect to the Company’s business, financial condition and results of operations, and, following completion of the Transaction, that of the combined group (“Combined Group”).
These forward-looking statements can be identified by the use of words such as “anticipate”, “expect”, “estimate”, “intend”, “will”, “may”, “project”, “plan”, “target” and “believe” and other words of similar meaning in connection with any discussion of future events. These statements, by their
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financial years would necessarily match or exceed the historical published earnings per share for the Company.
To the extent available, the industry, market and competitive position data contained in this presentation has come from official or third-party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources
believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company believes that each of these publications, studies and surveys has been prepared by a reputable source, the Company has not independently verified the data contained
therein. In addition, certain of the industry, market and competitive position data contained in this presentation comes from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the market in which the Company
operates. While the Company believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice.
Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation.
Citigroup Global Markets Limited ("Citi") is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and is acting for the Company and no one else in connection with the Transaction and will not be responsible to any other person other than the
Company for providing the protections afforded to clients of Citi or for providing advice in relation to the Transaction or any transaction, matter or arrangement referred to in this presentation. Neither Citi nor any of its affiliates, directors or employees owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Citi in connection with any transaction, matter or arrangement referred to in this presentation.
Greenhill & Co. International LLP, an affiliate of Mizuho Financial Group, Inc., is authorised and regulated in the UK by the Financial Conduct Authority, is acting for the Company and for no one else in connection with the Transaction, and will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Greenhill nor for providing advice in connection with the Transaction or any other transaction, matter or arrangement referred to in this presentation. Neither Greenhill nor any of its affiliates, directors or employees owes or accepts
any duty, liability or responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Greenhill in connection with this presentation, any statement contained herein, the Transaction or
otherwise.
No representation or warranty, express or implied, is made or given by or on behalf of the Company or Citi or Greenhill or any of their respective shareholders, subsidiaries, directors, officers, employees, agents, affiliates or advisers, as to, and no reliance should be placed on, the accuracy,
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By attending (whether in person, by telephone or webcast) this presentation or by reading the presentation slides, you agree to be bound by the foregoing limitations and conditions
2
3
Transformational combination
Creating a leading speciality solutions business driving stronger customer
proposition and shareholder value
A global leader
in Sweetening, Mouthfeel
and Fortification
A global leader
in Pectin and
Speciality Gums
4
Tate & Lyle
Agenda
01.
Overview
02.
Strategic rationale
03.
Synergies, financial framework and next steps
04.
Summary and Q&A
Overview
Combination accelerates delivery of Tate & Lyle’s growth strategy
5
1. Sale of remaining interest in Primient announced on 23 May 2024; subject to completion expected before end of July 2024.
Sale of Primient
1
Proposed combination
Creates a leading, global speciality
food and beverage solutions business
Focusing the portfolio Strategic acceleration
Transformation to fully-focused
speciality business completed
Overview
CP Kelco is a perfect fit with Tate & Lyle’s growth strategy
6
Global leader in Pectin
and Speciality Gums
Leader in Mouthfeel and
supports Sweetening and Fortification
90% of food-related revenue
from same four core categories
Together creating significantly greater value for customers
1. Multi-year ambition to 31 March 2028. 2. Information is not intended to, and does not, constitute proforma financial information for the purpose of the UK Listing Rules
or PR Regulation (the UK version of Regulation number 2019/980 of the European Commission). See basis of preparation of illustrative pro-forma financial information in the
Appendix to this presentation. 3. See Tate & Lyle descriptions of adjusted results in Tate & Lyle Annual Report for year to 31 March 2024 on the Tate & Lyle website.
7
Overview
Combination creates a leading speciality solutions business
Indicative proforma financials
(with synergies)
2
Latest completed financial year
Revenue
£2.3bn
Adjusted EBITDA
3
£474m
Adjusted EBITDA margin
3
20.9%
Combined business:
▪ Creates a leader in mouthfeel and strengthens all three sweetening, mouthfeel and fortification platforms
▪ Expands offering and deepens expertise across Tate & Lyle’s core categories and markets
▪ Delivers compelling customer proposition with a significantly enhanced solutions offering
▪ Accelerates R&D and innovation by combining world-class scientific, technical and applications expertise
▪ Expanded business provides strong growth opportunities in its core and adjacent markets
▪ Drives stronger growth:
− Revenue growth towards the higher-end of 4%-6% per annum ambition
1
− Significant adjusted EBITDA margin improvement over the next few years
▪ Underpinned by shared purpose, values and culture
1. Based on GBP:USD foreign exchange rate of £1:$1.2723, as at 5pm BST on 19 June 2024. 2. Subject to customary adjustments. 3. Value of shares based on Tate & Lyle share price of 677.0p per share
as at close of trading on 19 June 2024. 4. Deferred share consideration contingent on Tate & Lyle’s volume-weighted average price for the 30 trading days ending on and including the date that is two years
following completion of the transaction, with the full 10 million shares to be issued if Tate & Lyle’s share price over such period is at least £10, and no deferred share consideration will be payable if Tate & Lyle’s
share price over such period is £8.50 or below. Tate & Lyle also has the option to pay part of the deferred consideration in cash. 5. Acquisition multiple calculated based on purchase price of US$1.8 billion,
divided by adjusted EBITDA of US$131 million for the financial year ending 31 December 2023 (in accordance with US GAAP) and US$50 million of run-rate cost synergies.
8
Overview
Transaction summary
▪ Tate & Lyle to acquire CP Kelco from J.M. Huber Corporation (‘Huber’) for total implied consideration
of US$1.8 billion (c.£1.4 billion
1
) at completion
2
on a cash-free, debt-free basis:
− US$1.15 billion (c.£905 million
1
) in cash from new and existing debt facilities and cash resources
− Issue of 75 million new Tate & Lyle shares to Huber with an implied value
3
of US$645million (c.£510million
1
)
− Deferred consideration of up to 10 million additional Tate & Lyle shares to Huber approximately two years
post-completion subject to performance criteria
4
▪ Headline consideration represents
5
10x CP Kelco’s adjusted EBITDA for the year ended 31 December 2023
including run-rate cost synergies
1. At the financial year-end immediately following completion. Leverage of 2.3x excludes the impact of any liability required to be recognised in relation to deferred share consideration.
9
Overview
Combination delivers strong financial impact
Synergies
▪ Targeted run-rate cost synergies of at least US$50m (£40m) by end of second full financial year post-completion
▪ Significant opportunity to accelerate revenue growth through complementary platforms, regions and categories
− Targeted revenue synergies of up to 10% of CP Kelco’s revenue over the medium term
Financial outcomes
▪ Expected to be accretive to adjusted earnings per share, including cost synergies only, in second full financial year
post-completion, and strongly accretive thereafter
▪ Return on invested capital (ROIC) expected to exceed weighted cost of capital in fifth full financial year post-completion
▪ Net debt to EBITDA leverage anticipated to be c.2.3x
1
, within long-term range of 1.0x to 2.5x net debt to EBITDA
Share buyback programme
▪ Previously announced share buyback of US$270m (c.£215m), originally to follow completion of Primient sale, will start today
10
Overview
Long-term equity stake reflects Huber’s conviction in
future growth potential of combined business
▪ Transaction the result of multi-year engagement and bi-lateral discussions
▪ Equity stake a key unlock in creating opportunity for combination
▪ Equity stake reflects Huber’s strong conviction in the future value creation of the combined business
▪ Huber to be long-term (c.16%) shareholder
1
of Tate & Lyle following completion of the transaction
▪ Huber entitled to appoint two non-executive directors to the Tate & Lyle Board
2
1. Based on 401,694,461 shares in issue on 31 March 2024 and including the 75 million Tate & Lyle shares to be issued to Huber at completion of the transaction.
2. Subject to holding certain minimum shareholding thresholds in Tate & Lyle.
1. Portfolio includes pectin, carrageenan, citrus fibre, gellan gum, xanthan gum, diutan gum, cellulose (fermentation-derived), locust bean gum (refined), microparticulated whey protein concentrate
2. 7 manufacturing facilities across Brazil, US, China, Denmark, Germany; 3. CY23 is year ended 31 December 2023; $ is US dollars. 4. See footnote 3 on slide 36 for details on EBITDA adjustments.
11
Overview
CP Kelco at a glance
90+
years of industry-
leading experience
1.7k
Employees
globally
7
Manufacturing
facilities
2
2
Global
innovation centres
9
Regional
application centres
Leader
in pectin and
speciality gums
1
▪ Division of J.M. Huber Corporation
▪ Headquartered in Atlanta, Georgia
▪ >10 years innovation work with Tate & Lyle
$772m
Net revenue
(CY23)
3
▪ A global leader in speciality hydrocolloids; nature-based ingredients
▪ Leading innovator in fermentation and extraction-driven ingredients
▪ Strong commitment to sustainability, quality and safety
▪ Deep relationships with customers across range of categories
▪ >$400m invested to enhance asset base over last four years
▪ Strong talent base, including applications and process engineering
$131m
Adjusted EBITDA
(CY23)
3,4
77%
23%
Revenue breakdown (CY23)
3
Asia, Middle
East, Africa and
Latin America
North America
Food & Beverage
Consumer
and Industrial
28%
26%
46%
Europe
12
Overview
CP Kelco’s complementary portfolio addresses key consumer trends
Leading speciality portfolio
…offering key functionality
A global leader in pectin,
key clean label ingredient
…in core categories
…addressing consumer trends
▪ Pectin
▪ Carrageenan
▪ Speciality gums
▪ Proteins
▪ Citrus fibre
▪ Gelling
▪ Stabilizing
▪ Suspending
▪ Thickening
▪ Modifying viscosity
▪ Beverage
▪ Dairy
▪ Soups, sauces and dressings
▪ Bakery and snacks
▪ Clean-label
▪ Plant-based
▪ ‘Free from’
▪ Added fibre
▪ Cost optimisation
Leading
formulation expertise
Deep understanding
of core categories
Supporting solutions for healthier,
tastier and more sustainable food
Strong customer reputation built on superior product portfolio and high levels of technical support
)13
Overview
Combination strengthens regions and platforms
43%
27%
30%
Combined business to have greater proportion of revenue from larger, fast-growing markets
2
42%
48%
10%
Sweetening Mouthfeel Fortification
28%
26%
46%
77%
23%
Mouthfeel Other
39%
26%
35%
30%
56%
7%
7%
Sweetening Mouthfeel Fortification Other
Combined
Region
(Revenue
1
)
Platform
(Revenue
1
)
Year ended 31 March 2024
£1,647m
Year ended 31 December 2023
£621m
£2,268m
1. Information is not intended to, and does not, constitute proforma financial information for the purpose of the UK Listing Rules or PR Regulation (the UK version of Regulation number 2019/980
of the European Commission). See basis of preparation of illustrative pro-forma financial information in the Appendix to this presentation. 2. Asia, Middle East, Africa and Latin America.
North America
Europe
Asia, Middle East, Africa and Latin America
North America
Europe
Asia, Middle East, Africa and Latin America
North America Europe
Asia, Middle East, Africa and Latin America
£1,647m
£621m
£2,268m
14
Tate & Lyle
Agenda
01.
Overview
02.
Strategic rationale
03.
Synergies, financial framework and next steps
04.
Summary and Q&A
Strategic rationale
Compelling strategic logic for combination
15
Creates
a leader in Mouthfeel,
and deepens expertise
across core platforms,
categories and markets
Markets
Accelerates
R&D and innovation
combining world-class
scientific, technical and
applications expertise
Innovation
Delivers
compelling customer
proposition and
significantly enhances
solutions offering
Customers
Drives
stronger growth
and unlocks new
opportunities
in core markets
Financial
Underpinned by shared purpose, values and culture
1
2
3
4
5
1. Market research data, Tate & Lyle and BCG analysis, estimated value growth 2022-26.
16
Strategic rationale
Expands offering in large addressable market
High intensity sweeteners
Nutritive sweeteners
Rare sugars and other sweeteners
Starches
Pectin
Gums
Fibres
Plant proteins
Addressable by
combined business’
three platforms
US$19bn
~6%
1
CAGR
Global speciality food ingredient market
US$75bn
~6%
1
CAGR
1
Tate & Lyle
CP Kelco
17
Fortification
▪ Improved nutrition (fibres/protein)
▪ Add health benefits
▪ Sugar and calorie reduction
Mouthfeel
▪ Enhance texture
▪ Sensory experience
▪ Clean label solutions
▪ Cost optimisation
Strategic rationale
Creates a leader in Mouthfeel, strengthens offering across all platforms
Sweetening
▪ Sugar and calorie reduction
▪ Nutrition improvement
▪ Label improvement
Combination creates a global
leader in Mouthfeel solutions
Pectin, citrus fibre and speciality gums strengthen Tate & Lyle’s customer offering across intersection of three platforms
1
Strategic rationale
Creates ‘go-to’ Mouthfeel solutions provider for customers
Mouthfeel is the critical unlock for customer solutions
▪ Taste is main driver of consumers’ food choice and preference
▪ Mouthfeel is a key driver of taste and so critical to a customer’s product success
▪ Mouthfeel is critical for sensory appeal in all food matrices and for sugar reduction
Combination creates a leader in Mouthfeel solutions
▪ Deep recipe application expertise drives superior solution flexibility
▪ Broader ingredient portfolio supports cost-in-use benefits
▪ Combination of Tate & Lyle’s superior sensory and CP Kelco’s technical capabilities
1. 2023 Food and Health Survey, International Food Information Council. 2. Mintel GNPD 2023. 3. Speciality ingredient market, market research data, Tate & Lyle and BCG analysis.
4. Estimated value growth 2022-26; CAGR is compound annual growth rate.
23%
of all food and drink
launches in 2023
made a texture claim
2
>85%
of consumers’ primary
reason for purchasing food
and drink is taste
1
US$7bn
Addressable market
for mouthfeel platform
3
~6%
Mouthfeel market
growth (CAGR)
3,4
2
18
Strategic rationale
Combination deepens category capabilities with target customers
79%
of revenue
from four core
categories
90%
of food-related
revenue from
four core categories
Focus on four core categories
Complementary offering strengthens
category expertise and opens new growth
opportunities across sub-categories
Combined business
2
19
20
Strategic rationale
Combination of world-class science accelerates innovation
Combined business
Highly complementary
world-class science
▪ Enhanced R&D and innovation
expertise
▪ Deep knowledge of plant-based
ingredients and value stream valorisation
▪ Integrated innovation pipelines
▪ Synergistic open innovation programmes
and partnership opportunities
Leading scientific capabilities
▪ Chemistry / bio-chemistry
▪ Bioconversion
▪ Fractionation and separation
▪ Crystallisation
Deep expertise
▪ Sensory science
▪ Nutrition research
▪ Regulatory science
Latest innovation
▪ TASTEVA
®
SOL (stevia)
Leading scientific capabilities
▪ Fermentation
▪ Extraction
▪ Gelation
▪ Purification
Deep expertise
▪ Blending
▪ Formulation
▪ Technical service
Latest innovation
▪ Citrus fibre
3
1. Multi-year ambition to 31 March 2028. 2. Full financial years.
Revenue growth
21
Strategic rationale
Combination strengthens Group financial performance
Drivers of growth
▪ Industry growth: Increasing consumer demand for healthier, more sustainable food and drink
▪ Broader offering: Accelerate growth from complementary portfolios, platforms and categories
▪ Stronger capabilities: Enhanced capabilities to increase innovation and solution selling
Towards higher-end
of 4%-6% per annum
growth ambition
1
EBITDA growth
Drivers of margin
▪ Cost synergies: Targeted run-rate cost synergies of at least US$50m over 2 years
2
▪ Margin recovery: Phased recovery of profitability in CP Kelco
▪ Solution selling: Margin accretive solution selling from 2+ years
Significant adjusted
EBITDA margin
improvement
4
1. Compound annual growth rate. 2. CP Kelco prepares financial information in US GAAP and for accounting periods ending on 31 December, no alignment to Tate & Lyle’s use of IFRS, accounting policies or accounting period.
3. CP Kelco’s reported EBITDA for the year ended 31 December 2023 was £82 million (2022 - £110 million, 2021 - £117 million). The following adjustments have been made; 1) exceptional costs were removed for the year
ended 31 December 2023 of £11 million (2022 - £Nil, 2021 - £Nil) (as they are material in amount; and are outside the normal course of business or relate to events which do not frequently recur); and, 2) recharges and other
intra-group costs from Huber were removed for the year ended 31 December 2023 of £13 million (2022 – credit of £(12) million, 2021 costs of £7 million). 4. Free cash flow is shown as reported; only selected material cash
flows are shown. 5. CP Kelco is part of the Huber tax group; tax cash assumes a 24% effective tax rate paid in the year incurred.
22
Strategic rationale
CP Kelco’s historical financial performance
Year ended 31 December
2
(US$) 2021 2022 2023
Volume change (%) 8% (2)% (13)%
Revenue $749m $796m $772m
- Change (%) 9% 6% (3)%
Adjusted EBITDA
3
$170m $151m $131m
Adjusted EBITDA Margin 22.6% 19.0% 17.0%
Depreciation and amortisation $68m $67m $69m
Adjusted operating profit $102m $84m $62m
Capital expenditure $(129)m $(141)m $(85)m
Change in working capital $(5)m $(76)m $(38)m
Exceptional restructuring cash flow
− − $(14)m
Free cash flow before tax
4
$47m $(66)m $(6)m
Tax cash
5
$(26)m $(20)m $(15)m
Free cash flow including tax $21m $(86)m $(21)m
Three years ended 31 December 2021 − track record of growth
▪ Mid-single digit EBITDA growth
1
▪ EBITDA margin consistently above 20%
Two years ended 31 December 2023
▪ Temporary EBITDA margin compression
− ~50% from macro-economic headwinds and industry-wide challenges
(inflationary pressures, customer de-stocking, consumer softness)
− ~50% from supply chain disruption during capital investment programme
▪ Cash headwinds
− Higher growth and productivity capital expenditure initiated pre-Covid
− Working capital build reflecting inflationary cycle
Capital expenditure deployment
▪ Historic run-rate (pre-2020) ~8% of revenue
▪ Last four years, major >$400m capital investment programme
− ~50% on growth and productivity (speciality gums)
− ~50% on innovation and sustainability (pectin)
4
1. Year ending 31 December 2024.
23
Strategic rationale
Delivering improved CP Kelco financial performance
Current trading
1
▪ Volume recovery in key products and regions
▪ Supply disruption improving
▪ Actions underway on cost control and to reduce working capital
Drivers of recovery
▪ Macro-economic and industry normalisation
▪ Realisation of benefits from major capital investments
▪ Margin accretive solution selling
Stronger cash flow
▪ Lower capital expenditure (6% to 7% of revenue)
▪ Significant opportunity for working capital recovery and optimisation
4
2025 onwards
▪ Topline acceleration
▪ Margin recovery
▪ >75% free cash flow conversion
2024
▪ Year of stabilisation
24
Strategic rationale
Expanded business unlocks further growth opportunities
Food & Beverage
Personal care
and Household
▪ Creating greater value for customers
through a focus on core platforms,
categories and markets
▪ Beauty
▪ Pharmaceutical
Core focus for growth
Longer term growth potential
Potential for selective M&A to accelerate growth
Food & Beverage
New growth opportunities
▪ Extend core categories e.g. confectionery
▪ Geographic expansion across growth markets
4
1. B Corp certification only achieved by Zanea Seaweed Co., Ltd, CP Kelco’s carrageenan sourcing business in Africa.
25
Strategic rationale
Combination underpinned by shared purpose, values and culture
Unlocking Nature-Powered Success
1
Transforming Lives through the Science of Food
5
Both businesses committed to leading on sustainability and delivering positive social impact
Building
thriving communities
Caring
for our planet
Supporting
healthy living
Sustainability
Respect
for people
Excellence
Ethical
behaviour
25
26
Tate & Lyle
Agenda
01.
Overview
02.
Strategic rationale
03.
Synergies, financial framework and next steps
04.
Summary and Q&A
27
Synergies, financial framework and next steps
Combination accelerates growth-focused strategy
▪ Proposed transaction improves the growth potential of the business
▪ Clear drivers of adjusted EBITDA margin improvement
− Underlying improvement in CP Kelco’s performance
− Worked in collaboration with CP Kelco to develop synergies plan
▪ Maintain robust balance sheet providing flexibility to continue to invest for growth
− Expect leverage to return to midpoint of target range within two years
▪ Previously announced share buyback programme of US$270m (c.£215m) will start today
▪ Financing in place with attractive terms
1. Beverage; diary; soups, sauces and dressings; bakery and snacks.
28
Synergies, financial framework and next steps
Combination drives stronger revenue growth
Regions
▪ Increase in presence across
larger, fast-growing markets
of Asia, Middle East, Africa
and Latin America
From 30% to:
35%
of revenue
Categories
▪ Increase in customer
penetration and cross selling
across platforms and categories
Revenue of combined business:
>80%
From four core categories
1
Solutions
▪ Increase in customer-facing
capabilities, infrastructure and
insights, and access to
broader solution toolkits
Customer-facing labs increase by:
>50%
globally
Revenue growth towards higher-end of 4%−6% per annum ambition
Targeted revenue synergies of up to 10% of CP Kelco’s revenue over the medium term
29
Synergies, financial framework and next steps
Significant opportunity for near-term cost synergies
Total run-rate cost synergies c.US$50m
▪ Procurement c.US$10m (20%)
▪ Operations and supply chain c.US$10m (20%)
▪ SG&A c.US$30m (60%)
Delivery targeted for end of second full financial year following completion
▪ 50%−60% of cost synergies
expected to be delivered by
end of first full financial year
following completion
▪ Cost to deliver synergies
expected to be c.US$75m
▪ Aligned culture and
experienced teams
to support integration
1. At the financial year-end immediately following completion. Leverage of 2.3x excludes the impact of any liability required to be recognised in relation to deferred share consideration.
2. Free cash flow conversion calculated as: free cash flow before capital expenditure divided by adjusted EBITDA.
30
Synergies, financial framework and next steps
Consistent approach to capital allocation
Capital allocation to prioritise growth opportunities
and drive shareholder value
Invest in
organic growth
Acquisitions,
joint ventures,
partnerships
Progressive
dividend policy
Return
surplus capital
to shareholders
Maintain strong and efficient balance sheet
Target long-term leverage between 1.0x and 2.5x net debt to EBITDA
▪ Net debt to EBITDA leverage
anticipated to be c.2.3x
1
− Financing in place with attractive
terms
− Strong cash generation to drive
significant de-leverage thereafter
− Free cash flow conversion
2
targeted to exceed 75%
▪ Previously announced share buyback
programme of US$270m (c.£215m)
will start today
▪ Progressive dividend policy
unchanged
31
Synergies, financial framework and next steps
Next steps
▪ Class 1 transaction − based on current Listing Rules requiring
approval by shareholder vote
1
▪ Completion is also conditional on receipt of regulatory approvals and
other customary closing conditions
▪ Completion is expected in the fourth quarter of the 2024 calendar year
1. FCA’s Listing Rules anticipated to change in coming weeks, with expected removal of shareholder vote for class 1 transactions.
32
Tate & Lyle
Agenda
01.
Overview
03.
Strategic rationale
03.
Synergies, financial framework and next steps
04.
Summary and Q&A
Leading customer-focused business delivering accelerated growth
1. Multi-year ambition to 31 March 2028.33
Proposed combination
Creates a leading speciality ingredients business
▪ Creates a leader in Mouthfeel and strengthens Sweetening and Fortification platforms
▪ Accelerates R&D and innovation combining world-class science, technical and applications expertise
▪ Delivers compelling customer proposition with a significantly enhanced solutions offering
▪ Drives stronger growth:
− Revenue growth towards the higher-end of 4%-6% per annum ambition
1
− Significant adjusted EBITDA margin improvement over the next few years
▪ Underpinned by shared purpose, values and culture
Q&A
34
35
Appendix
Appendix
Illustrative pro-forma information
Tate & Lyle prepares financial information
under IFRS and for accounting periods ending on
31 March, CP Kelco prepares financial information under
US GAAP for accounting periods ending 31 December.
The illustrative pro-forma financial information is neither
aligned for accounting periods, GAAP differences,
accounting policies nor reflects the necessary standalone
carve out adjustments.
The illustrative pro-forma information is not intended to,
and does not, constitute pro-forma financial information
for the purposes of the UK Listing Rules or PR Regulation
(the UK version of Regulation number 2019/980 of the
European Commission). If Tate & Lyle is required to
publish a Class 1 circular in connection with the Proposed
Transaction in accordance with the UK Listing Rules, the
pro forma information in such circular would differ from the
illustrative pro forma information set out in the table above.
36
Appendix
Illustrative Pro-forma Financial Profile
Tate & Lyle
year ended
31 March 2024
CP Kelco
2,3
year ended
31 December 2023
Benefit of cost
synergies
4
Pro-
forma (with /
without benefit of
cost synergies)
Revenue
£1,647m £621m £2,268m
Adjusted EBITDA
£328m £106m
£40m
£474m / £434m
Adjusted EBITDA
margin
19.9% 17.0% 20.9% / 19.1%
Footnotes
1. Adjusted results and a number of other terms and performance measures used in this document are not directly defined within IFRS. We have provided descriptions of the various metrics and their
reconciliation to the most directly comparable measures reported in accordance with IFRS and the calculation (where relevant) of any ratios in the 2024 Annual Report on pages 146 to 148.
2. CP Kelco financial information is presented in US Dollars, such information has been translated into GB Pounds at the average rate for the year to 31 December 2023 of USD:GBP 1.243:1.
3. CP Kelco reported EBITDA for the year ended 31 December 2023 was £82 million. This has been adjusted to be both consistent with Tate & Lyle adjusted results definition and to adjust for Huber
costs that will not be incurred under Tate & Lyle ownership. Accordingly, the following adjustments have been made; 1) exceptional costs of £11 million were removed (as they are material in amount;
and are outside the normal course of business or relate to events which do not frequently recur); and 2) recharges and other intra-group costs from Huber of £13 million were removed.
4. Cost synergies of US$50 million (£40 million) will be delivered in the first two full years from completion of the proposed transaction. For the purposes of this illustrative information, the full synergies
are considered to be in place for the year presented.
