Tate & Lyle's restatement of prior year financial information for adoption of simplified operating segments
On 8 February 2023, Tate & Lyle PLC (‘Tate & Lyle’ or the ‘Group’) announced it would be simplifying its disclosure framework, with the Group’s core operations moving to three operating segments: Food & Beverage Solutions; Sucralose; and Primary Products Europe. These segments reflect the new shape of the Group.
There are three areas of disclosure simplification: firstly, the disaggregation of Food & Beverage Solutions and Primary Products Europe, making each a separate operating segment to improve transparency and clearly highlight the performance of each. Secondly, that Central costs will no longer be reported separately and finally, the Group’s primary profit measure will now become adjusted earnings before interest, tax, depreciation and amortisation (‘Adjusted EBITDA’).
In advance of the publication on 25 May 2023 of Tate & Lyle’s results for the year ended 31 March 2023, this announcement is being made to provide details of the framework under which the future results of Tate & Lyle will be reported and also set out the restated comparative information for the year ended 31 March 2022 and the six months to 30 September 2022.
Outline of the restated financial information
Set out in the financial information below are details of the restatement for the year ended 31 March 2022 and the six months ended 30 September 2022, including a reconciliation from the results originally disclosed for the year ended 31 March 2022. The operations of the Group now comprise the following:
• Food & Beverage Solutions operating segment
• Sucralose operating segment
• Primary Products Europe operating segment.
The financial information has been restated as follows:
• The transfer of Primary Products Europe activities from within the Food & Beverage Solutions
segment to a stand-alone operating segment
• The allocation of Central costs to the other operating segments, which has included the re-allocation of total selling and general administrative costs, firstly attributed by the support provided to each segment directly, then with non-directly attributed costs allocated on the basis of segment share of Group gross profit
• Adoption of Adjusted EBITDA as the Group’s primary profit metric. Accordingly, previously reported adjusted operating profits have been restated to add-back segment depreciation and amortisation.
The adjustments made reflect the reclassification and allocation of previously disclosed items, with no change in totals for the Group. All other Group profit metrics and earnings per share remain unchanged.
On 1 April 2022, Tate & Lyle announced that it had completed the sale of a controlling stake in Primient and its subsidiaries which holds Tate & Lyle’s former Primary Products business in North America and Latin America and its interests in the Almidones Mexicanos S.A de C.V and DuPont Tate & Lyle Bio-Products Company, LLC joint ventures (the ’Transaction‘). Tate & Lyle continues to hold a 49.7% interest in Primient. Details of this Transaction are provided in the Annual Report for the year ended 31 March 2022. Tate & Lyle equity accounts for Primient, and it also constitutes an operating segment.
Also set out in the financial information, is a further adjustment to Adjusted EBITDA to illustrate the pro-forma impact of the Transaction for the year ended 31 March 2022. Such adjustment reflects the impact of long-term agreements that exist between the Group and Primient from completion of the Transaction, including, inter alia, for the cost of certain services provided by Primient for procurement of net raw materials and the manufacture of finished goods products. The adjustment, a pro-forma charge of £7 million for the year ended 31 March 2022, is unchanged from that previously reported in the Annual Report for that year (see page 43 - “Unaudited pro-forma financial results for the year ended 31 March 2022”).
Pro-forma Adjusted EBITDA is designed to show the illustrative impact of the Transaction on continuing operations as if it had completed on 1 April 2021, being the start of the earliest period presented in this document. Accordingly, no pro-forma adjustment is provided for the six months to 30 September 2022 as that period is wholly after the completion of the Transaction.
There is no impact on the restatements set out below from the corresponding change to the pro-forma adjustment of the Group’s equity accounted share of profits of Primient from completion, which can be seen in the above-mentioned section of the 2022 Annual Report. This adjustment is not shown in this document.