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Tate & Lyle PLC Final Results Final Results Tate & Lyle PLC 27 May 2011 TATE & LYLE PLC ANNOUNCEMENT OF FULL YEAR RESULTS For the year ended 31 March 2011 Continuing operations1 £m unless stated otherwise 2011 2010 Change (reported) Change (constant currency)4 Sales 2 720 2 533 + 7 % + 5 % Adjusted results2 Adjusted operating profit 321 268 + 20 % + 17 % Adjusted profit before tax 263 196 + 34 % + 32 % Adjusted diluted earnings per share 45.7p 33.7p + 36 % + 34 % Statutory results Operating profit/(loss) 303 (44 ) Profit/(loss) before tax 245 (116 ) Profit for the period (on total operations) 167 19 Diluted earnings per share (on total operations) 34.7p 3.3p Cash flow and net debt Free cash flow3 190 414 Net debt 464 814 Dividend per share 23.7p 22.9p + 3.5 % Javed Ahmed, Chief Executive, said: "Tate & Lyle performed well in the year achieving steady growth across a number ofour markets. In Speciality Food Ingredients, we delivered strong profit growth drivenby increased sales volumes across the product portfolio, improved product mix andlower sucralose manufacturing costs. In Bulk Ingredients, we experienced good volumegrowth from sweeteners and very strong returns from co-products due to high cornprices. The Board is proposing an increase in the final dividend reflecting its confidencein the business." Financial performance * Adjusted operating profit up 20% at £321 million (17% in constant currency) * Adjusted operating profit from Speciality Food Ingredients up 26% (25% in constantcurrency) * Adjusted operating profit from Bulk Ingredients up 15% (11% in constant currency) * Adjusted diluted earnings per share up 36% at 45.7p (34% in constant currency) * Net debt down by £350 million (43%) to £464 million (40% before exchange translation) * Increase of 5% proposed for the final dividend to 16.9p, making a total dividendof 23.7p (2010 - 22.9p) Strategic update * 'Focus, Fix, Grow' programme remains on track: o Disposal of EU Sugar Refining, Molasses and Fort Dodge facility and conditionalsale of Vietnam Sugar o Global Commercial and Food Innovation Centre in Chicago on track to beoperational in early 2012 o New global Shared Service Centre being established in Lodz, Poland; tobe operational by end of 2011 * SPLENDA® Sucralose facility in McIntosh, Alabama to restart production in firsthalf of financial year 2013 Outlook In Speciality Food Ingredients, we expect the current steady demand patterns to continueand anticipate a year of good sales growth. The lower sucralose manufacturing costsare now reflected in the performance of this division and, accordingly, the levelof profit growth in the coming financial year is expected to be more modest thanthe strong result achieved in financial year 2011. In Bulk Ingredients, we expectsweetener margins to remain flat calendar year on year with volumes slightly downas we diversify some grind to Speciality Food Ingredients. Elsewhere, industrialstarches are expected to perform better, particularly in Europe, but not sufficientlyto offset more normal co-product returns. Given the Group's strong cash generationand reduction in net debt, interest costs are expected to decrease. Overall, with a more focused business, a stronger balance sheet and a continuationof the steps we are taking to focus, fix and grow our business, we expect to deliveranother year of profitable growth. 1 Excluding the results of the Sugars division in both periods except where notedotherwise. 2 Before exceptional costs of £5 million (2010 - £298 million) and amortisation ofacquired intangible assets of £13 million (2010 - £14 million). 3 Free cash flow is operating cash flows from continuing operations after workingcapital, interest, taxation and capital expenditure. 4 Changes in constant currency are calculated by retranslating comparative periodresults at current period exchange rates. TATE & LYLE PLC Cautionary statement This Announcement of Full Year Results contains certain forward-looking statementswith respect to the financial condition, results, operations and businesses of Tate& Lyle PLC. These statements and forecasts involve risk and uncertainty because theyrelate to events and depend upon circumstances that will occur in the future. Thereare a number of factors that could cause actual results or developments to differmaterially from those expressed or implied by these forward-looking statements andforecasts. Nothing in this Announcement of Full Year Results should be construedas a profit forecast. A copy of this Announcement of Full Year Results for the year ended 31 March 2011can be found on our website at www.tateandlyle.com. A hard copy of this statementis also available from The Company Secretary, Tate & Lyle PLC, Sugar Quay, LowerThames Street, London EC3R 6DQ. SPLENDA® is a trademark of McNeil Nutritionals, LLC. Webcast and teleconference A presentation of the results by Chief Executive, Javed Ahmed and Chief FinancialOfficer, Tim Lodge will be audio webcast live at 10.00 (UKT) today. To view and/orlisten to a live audiocast of the presentation, visit http://www.media-server.com/m/em/28mcx8pj/r/1.Please note that remote listeners will not be able to ask questions during the Q&Asession. A webcast replay of the presentation will be available within two hoursof the end of the live broadcast for six months, on the link above. For those unable to view the webcast, there will also be a teleconference facilityfor the presentation. Details are given below: Dial in details: UK dial in number: +44 (0)20 7806 1957 US dial in number: +1 212 444 0413 Access code: 8441160# 7 day conference call replay: UK replay number: +44 (0)20 7111 1244 US replay number: +1 347 366 9565 Replay Access code: 8441160# 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 100320 Andrew Lorenz, Financial Dynamics (for Media enquiries) Tel: +44 (0) 20 7831 3113 or Mobile: +44 (0) 7775 641807 CHIEF EXECUTIVE'S REVIEW Results for the continuing operations are adjusted to exclude exceptional items andamortisation of acquired intangible assets. Except where specifically stated to thecontrary, this commentary relates only to the adjusted results for the continuingoperations. A reconciliation of statutory and adjusted information is included atNote 16. Overview of Group's financial performance Tate & Lyle performed well in the year achieving steady volume growth across a numberof our markets, very strong returns from co-products and lower sucralose manufacturingcosts. Sales for the year were £2,720 million (2010 - £2,533 million), an increase of 7%(5% in constant currency) on the prior year. In Speciality Food Ingredients, salesincreased by 2% (2% in constant currency) to £805 million (2010 - £788 million) withsales volumes up by 7%. The rate of sales growth was impacted by reduced sellingprices for SPLENDA® Sucralose reflecting our strategy of securing long-term volumeincentive contracts with our customers. Within Bulk Ingredients, sales increasedby 10% (7% in constant currency) to £1,915 million (2010 - £1,745 million). Adjusted operating profit increased by 20% (17% in constant currency) to £321 million(2010 - £268 million). In Speciality Food Ingredients, adjusted operating profitincreased by 26% (25% in constant currency) to £206 million (2010 - £163 million),driven by increased sales volumes, operational leverage, improved product mix andlower SPLENDA® Sucralose manufacturing costs. The effect of exchange translationwas to increase adjusted operating profit by £2 million. In Bulk Ingredients, adjustedoperating profit increased by 15% (11% in constant currency) to £157 million (2010- £136 million), driven by volume growth, very strong returns from co-products andan improved performance from ethanol offset by lower margins in sweeteners and industrialstarches. Higher corn prices, particularly in the second half of the year, resultedin an additional £16 million of co-product returns compared to the prior year. Theeffect of exchange translation was to increase adjusted operating profit by £5 million. Central costs, which include head office, treasury and reinsurance activities, increasedby £11 million to £42 million reflecting the costs associated with strengtheningthe Group's senior management team, costs associated with our financing portfolioand one-off costs of £6 million in the first half relating to the review of the Group'sactivities. The net finance expense from continuing operations decreased from £72 million to£58 million principally as a result of lower pension interest expense. Adjusted profitbefore tax was up 34% (32% in constant currency) to £263 million (2010 - £196 million)reflecting the strong operating performance and reduction in net interest charge. Adjusted diluted earnings per share increased by 36% (34% in constant currency) to45.7p benefiting from improved operating performance and a lower effective tax rateof 18.5% (2010 - 20.8%). Exceptional items on continuing and discontinued operations totalled a charge of£48 million (2010 - £276 million). Within continuing operations there was a net £10million gain on the sale of the Fort Dodge facility and £15 million of costs associatedwith the business transformation programme. Within discontinued operations a lossof £55 million was booked on the disposal of the EU Sugar Refining Operations (EUSugars), which remains subject to closing adjustments and adjudication as discussedbelow, and a gain of £12 million on the disposal of Molasses. Balance sheet We continue to focus on managing our working capital closely resulting in our averagequarterly cash conversion cycle falling from 45 days to 34 days. The key performance indicators (KPIs) of our financial strength, the ratio of netdebt to earnings before interest, tax, depreciation and amortisation (EBITDA) andinterest cover, remain well within our internal targets. At 31 March 2011, the netdebt to EBITDA ratio was 1.1 times (2010 - 1.8 times), against our target of 2.0times. Interest cover on total operations at 31 March 2011 was 6.9 times (2010 -5.8 times), again ahead of our minimum target of 5.0 times. The Group's balance sheet was strengthened significantly during the year. Net debtreduced by 43% to £464 million at 31 March 2011 (31 March 2010 - £814 million). Thisimprovement in net debt, which builds upon the considerable reduction achieved inthe prior year, was driven by the disposals of the EU Sugars, Molasses and Fort Dodge,resulting in a net cash inflow of £316 million, and the underlying cash generatedby the business. Return on Capital Employed increased from 13.6% to 20.6% as a result of increasedprofits, a reduction in operating assets reflecting the writedown of Fort Dodge,the reduced average levels of working capital within the business and exchange rateeffects. Dividend The Board is recommending a 5% increase in the final dividend to 16.9p (2010 - 16.1p)making a full year dividend of 23.7p (2010 - 22.9p) per share, up 3.5% on the prioryear. Subject to shareholder approval, the proposed final dividend will be due andpayable on 5 August 2011 to all shareholders on the Register of Members at 1 July2011. In addition to the cash dividend option, shareholders will also be offereda Dividend Reinvestment Plan (DRIP) alternative. The DRIP replaces the scrip alternativethat was previously available to shareholders. Safety We have no higher priority than safety and are committed to providing safe and healthyworking conditions for all our employees, contractors and visitors. Whilst we arepleased that the safety performance at most of our locations improved in the 2010calendar year, and that our safety performance continues to compare favourably againstthe industry, the Group's overall safety performance (as detailed in the KPI tablebelow) deteriorated in 2010. Having set ourselves very high standards, we take anyreduction in performance very seriously. A detailed plan has been put in place todrive an improvement in safety performance which our global safety teams, employeesand contractors are working hard to embed across the Group. Key Performance Indicators (KPIs) In May 2010, we announced that we would report a set of KPIs to measure our performance.For the year ended 31 March 2011 these are as follows: KPI Measure Year to 31 March Change 2011 2010 Growth in SFI sales Sales £805m £788m + 2% Profitability Adjusted operating profit £321m £268m + 17% Working capital efficiency Cash conversion cycle† 34 days 45 days + 11 days Financial strength Net debt/EBITDA* 1.1x 1.8x Interest cover* 6.9x 5.8x Return on assets ROCE 20.6% 13.6% + 700bps Corporate Responsibility** Safety - Recordable incident rate 0.93 0.89 - 5% Safety - Lost time accident rate 0.58 0.39 - 49% †Calculated as the average cash conversion cycle at the end of each of the four quarterends to show the underlying progress throughout the year *Calculated under banking covenant definitions **We are establishing an index for environmental sustainability which we will reporton as a key performance indicator moving forward Focus, Fix, Grow: Update As we set out in May 2010, Tate & Lyle's strategy is to grow our Speciality FoodIngredients business supported by cash generated from Bulk Ingredients. To deliveron this strategy, and to reinvigorate Tate & Lyle, we have taken a number of stepsduring the year to 'focus, fix and grow' the business. 1) Focus We have disposed of a number of businesses and assets to ensure that our resourcesare focused on delivering our strategy and maximising returns to shareholders. Duringthe year we sold EU Sugars, Molasses, Fort Dodge and, after the year-end, we announcedthe conditional sale of our Vietnam sugar interests. As a result of these disposals,Tate & Lyle is a more focused, less complex business with a reduced exposure to commoditymarkets. 2) Fix The new operating model implemented on 1 June 2010 based on two global business units,Speciality Food Ingredients and Bulk Ingredients, supported by a global unit dedicatedto driving growth, Innovation and Commercial Development, and shared support servicesis being embedded. This new operating model is simple and transparent and providesan efficient platform for future growth, both organically and through bolt-on acquisition.We have also taken steps to strengthen the customer-facing areas of our business- for example, the commercial organisations of the speciality and bulk businesseshave been separated and are now fully focused on serving their different end markets. In May 2010, we announced two major two-year initiatives to transform our operationalcapabilities - firstly, to implement a common global IS/IT platform and secondly,to provide global support services through the use of shared service centres. Aftera detailed and thorough planning process, both initiatives were launched on 1 January2011 and are making good progress. Following an evaluation of a number of differentlocations, the decision was made to locate our global Shared Service Centre in Lodz,Poland. The new Centre is expected to be operational by the end of 2011 with thevarious services to be provided migrated to the new Centre in a phased process overa 12 to 15 month period. The new IS/IT platform will also be implemented via a phasedprocess starting in the first half of 2012. Building a high-performance culture is a key part of the 'fix' phase. To help achievethis, during the year we put in place a new global performance management system,a new global sales incentive system and established common global metrics in areassuch as working capital, customer service and quality. Ensuring we have the rightskills and talent in the business is also very important. We are developing our highpotential employees by providing them with more training and opportunities to learn,particularly with international assignments, and are also recruiting new staff bothto fill skills gaps and to refresh our talent base. The new process for capital investment planning and implementation has now been fullyembedded within the organisation. All new investments are now evaluated against clearstrategic and financial criteria with greater scrutiny and clear execution milestonesfor approved investments. 3) Grow The Innovation and Commercial Development (ICD) group, which was formed on 1 June2010, has made good progress during the year working closely with customers on productdevelopment and innovation initiatives. ICD is responsible for the innovation pipelineand, during the year, the processes used by ICD to manage and review the pipeline,and the way it launches new products, were completely overhauled. During the yearwe launched RESISTAMYL™ 140, a bakery cream starch in Europe and PROMITOR™ SolubleCorn Fiber 85 in the US and Latin America. We also recently announced a five-yearstrategic partnership agreement with BioVittoria Ltd for the exclusive global marketingand distribution rights for BioVittoria's monk fruit extract, marketed under thePUREFRUIT™ brand name. PUREFRUIT™ is the only fruit-based calorie-free sweeteningingredient available today and is a good addition to our sweetener and wellness portfolios. To enhance how we engage with our customers, and improve our access to them, in October2010 we announced that we would be establishing a new Commercial and Food InnovationCentre in Chicago, Illinois. The Centre, which is due to be operational in early2012, will be the global headquarters of ICD and will feature laboratories, a demonstrationkitchen, sensory testing, analytical and pilot plant facilities. The underlying global consumer trends of health and wellness and convenience continueto underpin long-term growth in the Speciality Food Ingredients market. Customerdemand for both new and existing products that meet consumers' needs in these keyareas remains strong, particularly for products that can help address rising levelsof diabetes and obesity in the developed and, increasingly, the developing world.Cost optimisation in the face of high and volatile commodity (e.g. sugar) pricesis also driving demand. In light of the strong pipeline of demand for SPLENDA® Sucraloseboth from existing and new customers, and having carried out a comprehensive reviewof the available options, we have decided to restart sucralose production at ourmothballed facility in McIntosh, Alabama. The restart of production, which we expectto take place during the first half of financial year 2013, reinforces our commitmentto the sucralose business, provides further resilience in our supply chain and furtherstrengthens our position as the leading global manufacturer and supplier of sucralose. We are also looking to build our business and capabilities in two areas where wesee long-term growth - new customer segments and emerging markets. Dedicated resourceshave now been put in place in Europe and the US to serve small and medium enterprise(SMEs) and private label customers. In emerging markets, we have changed our seniormanagement team in Asia Pacific to provide fresh impetus to our efforts in that region.We are also building new application laboratories in Mexico and Brazil to add toour global network, and have strengthened our sales teams in both Latin America andChina. In our Bulk Ingredients division, we are looking at ways to diversify our businessby leveraging our fermentation expertise and facilities to partner with businessesin the bio-based materials industry. In November 2010, we signed an agreement withAmyris under which Tate & Lyle will produce farnesene at its facilities in Decatur,Illinois with the end product being distributed by Amyris. Then in March 2011, wesigned an agreement with Genomatica under which we will dedicate a demonstration-scaleproduction facility in Decatur for exclusive use by Genomatica for the scale-up ofthe Bio-BDO process. 4) Costs The total costs associated with the delivery of the new Commercial and Food InnovationCentre are expected to be £37 million and the common IS/IT platform and global supportservices to be £57 million. Of the total amount of £94 million, £40 million is expectedto be treated as exceptional costs within the income statement and £54 million ascapital expenditure. During the financial year 2011, £6 million of capital and £10million of exceptional costs were incurred and we anticipate around £65 million ofexpenditure in relation to these projects during the year ending 31 March 2012. Theremaining expenditure relating to IS/IT and global shared services will be incurredin the year ending 31 March 2013. We expect the investment made in the common IS/ITand global support services to pay back over a period of three years. 5) Risk management We have embedded a framework of risk management into the various programmes undertakingthe initiatives to focus, fix and grow the business, to address the execution riskassociated with them. This framework has been supplemented by internal and externalrisk and assurance activities over the life of the programmes. 6) Conclusion We have taken a number of important steps during the year to deliver on our commitmentto focus, fix and grow the business. The focus phase is now largely complete andthe fix phase is progressing well, although, there is still more work to do. Whilstthe grow phase is beginning to yield some small but tangible benefits it is stillearly days. Our objective remains to build a platform on which we can deliver steadyand sustainable long term growth and value for shareholders. We remain on track todeliver on this objective. Javed Ahmed Chief Executive GROUP FINANCIAL RESULTS Basis of preparation Adjusted performance Adjusted profit is reported as it provides both management and investors with valuableadditional information on the performance of the business. The following items areexcluded from adjusted profit: * results of discontinued operations, including gains and losses on disposal(Note 9 and Note 11); * exceptional items from continuing operations (Note 4); and * amortisation of intangibles acquired through business combinations. This adjusted information is used internally for analysing the performance of thebusiness. A reconciliation of reported and adjusted information is included in Note16. Impact of changes in exchange rates Our reported financial performance has been positively impacted this year by exchangerate translation, in particular due to the strengthening of the average US dollarexchange rate against sterling. The movement in exchange rates had led to increasedprofits and a reduction in net debt as a result of the translation of accounts recordedin foreign exchange. The average and closing exchange rates used to translate reportedresults were as follows: Average rates Closing rates 2011 2010 2011 2010 US dollar:sterling 1.55 1.61 1.60 1.52 Euro:sterling 1.19 1.13 1.13 1.12 Segmental analysis Following the change of the organisational structure announced in May 2010, the Grouprestructured its internal organisation into four distinct segments: Speciality FoodIngredients, Bulk Ingredients, Sugars and central costs. Sugars was subsequentlyclassified as discontinued following the announcement on 1 July 2010 of the disposalof EU Sugars and the launch of processes to sell the remaining businesses withinthe Sugars division. Comparative information has been reclassified accordingly. Summary of financial results Year to 31 March Year to 31 March Change Change 2011 £m 2010 £m reported % constant currency % Continuing operations Sales 2,720 2,533 + 7 % + 5 % Adjusted operating profit 321 268 + 20 % + 17 % Net finance expense (58 ) (72 ) Adjusted profit before tax 263 196 + 34 % + 32 % Exceptional items (5 ) (298 ) Amortisation of acquired intangibles (13 ) (14 ) Profit/(loss) before tax 245 (116 ) Income tax (expense)/credit (49 ) 95 Profit/(loss) for the year from continuing operations 196 (21 ) (Loss)/profit for the year from discontinued operations (29 ) 40 Profit for the year 167 19 Earnings/(loss) per share - continuing operations Basic 42.6p (4.7 )p Diluted 41.9p (4.7 )p Adjusted earnings per share from continuing operations Basic 46.5p 33.9p + 37 % + 36 % Diluted 45.7p 33.7p + 36 % + 34 % Dividends per share Interim paid 6.8p 6.8p - Final proposed 16.9p 16.1p + 5 % 23.7p 22.9p + 3.5 % Net debt At 31 March 464 814 + 43 % SUMMARY OF GROUP PERFORMANCE Sales of £2,720 million (2010 - £2,533 million) from continuing operations were 7%higher than the prior year (5% in constant currency). Sales in Speciality Food Ingredientsincreased by 2% (2% in constant currency) from £788 million to £805 million withsales volume increasing 7% year on year. The rate of sales growth was impacted byreduced selling prices for sucralose reflecting our strategy of securing long-termvolume incentive contracts with our customers. Sales in Bulk Ingredients grew by10% (7% in constant currency) to £1,915 million (2010 - £1,745 million). Adjusted operating profit increased by 20% over the prior year (17% in constant currency)to £321 million (2010 - £268 million). Adjusted operating profits in Speciality FoodIngredients increased by 26% (25% in constant currency) to £206 million (2010 - £163million) driven by increased volumes, operational leverage, improved product mixand lower manufacturing costs for sucralose. In Bulk Ingredients, adjusted operatingprofit grew by 15% (11% in constant currency) to £157 million (2010 - £136 million)driven by increased volumes, very strong returns from co-products on the back ofthe high corn price and an improved performance from ethanol, despite lower marginsin sweeteners and industrial starches. Central costs, which include head office, treasury and reinsurance activities, increasedby £11 million to £42 million reflecting the costs associated with strengtheningthe Group's senior management team, costs associated with our financing portfolioand one-off costs of £6 million in the first half relating to the review of the Group'sactivities. Amortisation of intangibles acquired through business combinations was £13 million(2010 - £14 million). Exceptional items from continuing and discontinued operations totalled a charge of£48 million (2010 - £276 million). Within continuing operations there was a net £10million gain on the sale of the Fort Dodge facility and £15 million of costs associatedwith the business transformation programme. Within discontinued operations a lossof £55 million was booked on the disposal of EU Sugars, which remains subject toclosing adjustments and adjudication as discussed below, partially offset by a gainof £12 million on the disposal of Molasses. The net finance expense from continuing operations decreased from £72 million to£58 million principally as a result of lower pension interest expense. We were notable to benefit fully in the year from the decrease in average net debt due to thepredominantly fixed nature of our gross borrowings. However, the net interest chargeis expected to be lower in the 2012 financial year as a result of lower levels ofaverage net debt, the repayment of our US$300 million 6.125% bond in June 2011 anda positive impact from pension interest. Adjusted profit before tax increased by 34% (32% in constant currency) to £263 million(2010 - £196 million). On a statutory basis, profit before tax was £245 million comparedto a loss of £116 million in the prior year. The effective rate of tax on adjustedprofit from continuing operations was 18.5% (2010 - 20.8%). The decrease was duemainly to changes in the geographical origin of profits and also the resolution ofsome historical tax issues. Discontinued operations comprise EU Sugars, Molasses, International Sugar Trading,and the sugar operations in Vietnam and Israel. The operating loss from discontinuedoperations was £45 million after exceptional losses of £43 million (2010 - profitof £50 million, after exceptional gains of £22 million). On 20 April 2011, we announcedthe conditional sale of our Vietnam sugar interests. Any profit on disposal willbe recognised as and when the sale completes. The loss from discontinued operationsafter taxation for the year was £29 million (2010 - profit of £40 million). Total basic earnings per share was 35.3p (2010 - 3.3p) and total diluted earningsper share was 34.7p (2010 - 3.3p). Adjusted diluted earnings per share from continuingoperations was 45.7p (2010 - 33.7p) and on the same basis basic earnings per sharewas 46.5p (2010 - 33.9p). Speciality Food Ingredients Year to 31 March Change 2011 £m 2010 £m Reported Constant currency Sales 805 788 + 2% + 2% Adjusted operating profit 206 163 + 26% + 25% Margin 25.6% 20.7% + 490bps + 480bps Market conditions In food starches, increased demand for starch derivatives and the poor availabilityin Europe of potato-based starches due to the poor harvest, has tightened Europeanindustry capacity resulting in increased demand for corn-based starches and a firmingof starch margins overall. A short supply of tapioca based starches in Asia resultedin an increase in corn-based modified food starch sales in the region. In the USand Europe the continuing, albeit gradual, recovery from the recession has seen astrengthening demand for modified food starch in the convenience food industry withinnovation in snacks leading the recovery. Continuing high and volatile sugar prices have had a positive impact on demand forstarch-based speciality and high intensity sweeteners. Increased regulation in somemarkets, notably Latin America where some countries are now mandating stricter labellingof sugar levels in foods or restricting the use of competing sweeteners, furthercontribute to this trend. Rising levels of obesity and diabetes in both the developed and emerging marketsas well as the high and volatile price of sugar continue to support the market forhigh-intensity sweeteners ("HIS"). Sucralose again increased its value share of theHIS market, increasing from 27% to 28%. SPLENDA® Sucralose's share of the globalmarket for sucralose remains approximately 90%. The increased focus on healthier lifestyles is also driving demand in the Healthand Wellness space and we have seen robust growth in this area driven by new productlaunches during the year. In addition, the favourable opinions granted by the EuropeanFood Safety Authority (EFSA) for polydextrose and sucralose in April 2011 are expectedto increase the focus on these ingredients as key contributors to healthy diets. Within Food Systems, a key driver of growth continues to be the need for customersto develop and formulate more cost effective solutions against a backdrop of highcommodities prices. Financial performance Sales volumes increased by 7% with volume growth across all value added product categories.Sales increased by 2% (2% in constant currency) to £805 million (2010 - £788 million).Adjusted operating profit increased by 26% (25% in constant currency) to £206 million(2010 - £163 million). The increase in operating profit and margin was driven byhigher volumes, operational leverage, improved product mix and lower sucralose manufacturingcosts. The effect of exchange translation was to increase adjusted operating profitby £2 million. This division comprises three broad product platforms namely: starch-based specialityingredients, high intensity sweeteners and food systems. Starch-based speciality ingredients In starch-based speciality ingredients sales increased by 4% (2% in constant currency)to £434 million (2010 - £418 million). Margins increased by five percentage pointsand our aim is to hold on to most of these margin gains during financial year 2012.The benefits of operational leverage derived from selling additional volumes of highermargin products with only a relatively small uplift in our fixed cost base was thekey driver of the profitability growth of this product segment. In modified food starches, sales volume increases were driven by increased demandacross all regions. Steady growth in developing markets, especially the Asia-Pacificregion, was driven by the demand for more convenience and manufactured foods. Duringthe year we launched RESISTAMYL™ 140, a bakery cream starch, in Europe and the initialsales response has been encouraging. Speciality corn sweeteners benefited from higher sales volumes in Europe, the USand developing markets, particularly Latin America on the back of high and volatilesugar prices. The successful launch of our high-fibre, low-sugar and low-calorie prebiotic fibre- PROMITOR™ Soluble Corn Fiber 85 - in the US and Latin America has driven growthin our Health and Wellness platform which we expect will continue to benefit fromthe consumer trend towards healthier lifestyles. During the year we also commissionedthe first polydextrose fibre manufacturing operation in Europe, providing our Europeancustomers with a shorter supply chain and a broader product range. We are very pleasedwith the customer reaction to our fibre product range. As high value products, theirgrowth has improved product mix leading to an improvement in margin. Whilst sales to developing markets increased strongly across this product categoryduring the year, they are building from a low base and thus the contribution to operatingprofit remains modest. High intensity sweeteners Within high intensity sweeteners, we saw good sales volume growth during the year.As expected, average selling prices were lower than the comparative period, reflectingour strategy of securing long-term sucralose contracts with volume incentive arrangements.As a result, sales by value decreased by 1% (3% in constant currency) to £185 million(2010 - £187 million). Looking forward, we expect the decline we have seen in sellingprices for SPLENDA® Sucralose to moderate towards the end of this financial yearas contracts renew. A reduction in SPLENDA® Sucralose manufacturing costs was animportant driver of increased profitability in this product segment and SpecialityFood Ingredients overall. We have seen continuing strong growth in demand for SPLENDA® Sucralose. This growthhas come not only from more mature markets such as Europe and the US but also emergingmarkets, particularly Asia and Latin America where, as in developed markets, obesityand diabetes is becoming more prevalent. These markets provide an excellent opportunityto expand our footprint where the taste preferences of consumers for beverages andother products are less well established and where the heat stability of SPLENDA®Sucralose make it well suited to less well developed supply chains. In addition,we have also seen increased demand for SPLENDA® Sucralose from customers lookingto use more cost-efficient alternatives in an environment of volatile and high pricedsugar. We expect these long-term structural drivers to sustain the growth levels achievedover the last few years, supported by a strong pipeline of demand for SPLENDA® Sucraloseboth from existing and new customers. This means that we will need further capacityto meet future demand and as a result we are going to re-start production of SPLENDA®Sucralose at McIntosh, Alabama during the first half of the year ending 31 March2013. The decision to restart production at McIntosh, which was taken following acomprehensive review of alternative options, reinforces our commitment to the sucralosebusiness, provides further resilience in our supply chain and further strengthensour position as the leading global manufacturer and supplier of sucralose. In restarting McIntosh, we will incur approximately £3 million of additional costswhich will reduce profit in the year to 31 March 2012 and the loss for the plantwill be around twice that amount the following year as fixed costs increase. Theincrease in fixed costs includes the impact of additional depreciation as the plantis brought back into operation. We plan to operate the two plants in such a way asto minimise the additional fixed costs incurred and expect to achieve good levelsof operational leverage as volumes increase. In May 2009, following the significant increase in manufacturing yields achievedduring the 2009 financial year, we announced the mothballing of the McIntosh facilityand that production of all SPLENDA® Sucralose would take place at our Singapore facility.At that time, we recognised an impairment of £97 million and took a provision of£55 million to cover the cash costs associated with mothballing McIntosh, in anticipationof cash payback over three years. In restarting McIntosh we expect to reverse approximately£50 million of this impairment this financial year, adjusting the original amountby the notional depreciation over the last two years and for some equipment whichneeds to be replaced. We expect to incur a further £13 million of capital expenditurethis financial year to bring the plant back into operation and will employ more workingcapital once we restart production. We have achieved the annual savings from themothballing as anticipated but expect to be able to release approximately £20 millionof the original £55 million provision this financial year once we re-commission thefacility. This saving more than covers the cash costs of the re-start. Food Systems During the year, sales from Food Systems increased by 2% (3% in constant currency)to £186 million (2010 - £183 million) impacted by weaker second half volume on theback of tougher trading conditions in some markets, notably Russia. Volume growthof 4% was driven by increases in Asia Pacific, the US and South Africa. We continueto leverage our product formulation expertise to provide cost effective solutionsfor our customers against a backdrop of high and rising prices in raw materials. Speciality Food Ingredients Outlook In Speciality Food Ingredients, we anticipate the current steady demand patternsto continue and a year of good sales growth. The lower sucralose manufacturing costsare now reflected in the performance of this division and, accordingly, the levelof profit growth in the coming financial year is expected to be more modest thanthe strong result achieved in financial year 2011. Bulk Ingredients Year to 31 March Change 2011 £m 2010 £m Reported Constant currency Sales 1,915 1,745 + 10% + 7% Adjusted operating profit 157 136 + 15% + 11% Margin 8.2% 7.8% + 40bps + 30bps Market conditions Whilst US domestic demand for nutritive sweeteners in the 2011 financial year continuedits gradual long-term downward trend, strong seasonal demand and increased exportsof corn sweeteners to Mexico offset this impact. Higher Mexican demand was drivenby high domestic sugar prices in the Mexican market, and a relative recovery of theMexican peso against the US dollar which accelerated the substitution of cane sugarwith corn sugar. US corn yields for the 2010 harvest were low compared with recent experience. Thefall in production is expected to reduce stocks to their lowest level since 1996and the forecast stocks-to-use ratio for the end of the current crop year is thelowest on record. The latest planting intentions, reported by the USDA, indicatethat planted corn would increase to the second highest level on record, driven byhigh corn prices. The European corn price has followed similar trends to the US market. In the European sweetener market world sugar prices rose above the EU preferentialrate thereby discouraging traditional suppliers of cane sugar, some of whom alsoexperienced harvest difficulties, from supplying to Europe. This supply restrictionwas compounded by lower beet sugar yields from the harsh winter resulting in highersugar prices. The selling price of isoglucose (corn sugar), which is closely correlatedto the sugar price, rose towards the end of the financial year but not at the samerate as corn prices, resulting in a squeeze on margins. Although demand for industrial starches in the US recovered modestly, it still remainssignificantly below the levels experienced before the economic downturn. The demandfor industrial starches in Europe also improved with demand for corn starches receivingan additional boost on the back of the poor potato harvest. In US ethanol, whilstcash margins have increased, levels of profitability within the industry remain lowoverall. Co-product prices were supported by fundamental demand and improved through the yearon the back of higher corn and competing commodity prices. The market for US corngluten feed was boosted by the reopening of European markets to EU-approved geneticallymodified varieties and by China's increased imports of competing feed products. Demandfor corn gluten meal, primarily for pet food, remained firm and exports to LatinAmerica were stronger as aquaculture companies continued to increase production.In addition, demand for corn oil remained strong. Financial performance Sales increased by 10% (7% in constant currency) to £1,915 million (2010 - £1,745million). Adjusted operating profit increased by 15% to £157 million (11% in constantcurrency) driven by strong levels of co-product income and an improved performancefrom our ethanol business, despite lower margins in sweeteners and industrial starches.The effect of exchange translation was to increase operating profit by £5 million. This division comprises three broad product platforms namely: sweeteners; industrialstarches, acidulants and ethanol; and co-products. Sweeteners In the Americas, bulk corn sweetener volumes increased by 14% and sales by 3% (decreasedby 1% in constant currency) to £734 million (2010 - £715 million). As anticipatedat the time of the announcement of our contracting round in January 2010, corn sugar(HFCS) unit margins were somewhat below the comparative period after taking intoaccount lower input costs. Whilst we experienced firm demand patterns for Corn Sugar55 and 42 in Mexico and strong US domestic demand as good weather provided an upliftin seasonal demand, the higher volumes did not offset the lower margins which hadresulted from the 2010 calendar year pricing round and profits for the full yearwere below the comparative period. In Europe, sales of bulk corn sweeteners increased by 10% (14% in constant currency)to £123 million (2010 - £112 million). Volumes increased by 11% year on year reflectingthe increased capacity from our Slovakian expansion and increased quotas. Unit marginswere lower, particularly in the second half, on the back of higher corn costs whichincreased at a faster rate than the price of sugar, which effectively determinesthe price for isoglucose (corn sugar) in the EU. Operating profits from Almex, our Mexican joint venture, were up significantly onthe comparative period, reflecting higher volumes and improved pricing. Industrial starches, acidulants and ethanol Sales of Industrial starches, acidulants and ethanol increased by 13% (10% in constantcurrency) to £709 million (2010 - £629 million). Industrial starch volumes grew by 8%. Whilst we have seen a modest recovery in marketconditions margins continued to be under pressure in the US where the market remainsvery competitive. The performance for the year was below the prior year as the increasedvolumes were more than offset by lower unit margins. In Europe, tighter supply sideconditions as a result of the poor starch potato harvest resulted in improved marginstowards the end of the year. Whilst we experienced improved positive cash margins in US ethanol, this productcontinued to generate a loss at the operating level. At the end of the period, wecompleted the sale of our Fort Dodge facility for cash consideration of £36 millionresulting in an exceptional credit for the full year of £10 million (2010 - impairmentof £217 million). The disposal reduces our exposure to what remains a volatile andhighly commoditised industry. Whilst citric acid sales increased within our acidulants business, profits were lowerthan the prior year as a result of higher input costs. As in the prior year, theBio-PDO™ joint venture broke even in the 2011 financial year. Co-products Sales of co-products increased by 21% (19% in constant currency) to £349 million(2010 - £289 million). The impact of rising US corn prices throughout the year resulted in additional profitsof £16 million from co-products compared with the prior year. Since over 80% of ourcorn grind is utilised to produce Bulk Ingredients, the majority of this impact isrecorded within this segment. In anticipation of potential supply tightness in therun up to the new harvest, we plan to hold our silos full to the beginning of theharvest year. With the larger volumes in inventory combined with the higher priceof corn, we increased the amount of working capital tied up in US corn inventoriesby approximately £126 million at 31 March 2011. European corn prices also rose increasingco-product sales. However, hedging options are more limited than in the US so thathigher corn prices had a modest negative impact on profitability in the second half. Bulk Ingredients Outlook In Bulk Ingredients, we expect sweetener margins to remain flat calendar year onyear with volumes slightly down as we diversify some grind to Speciality Food Ingredients.Elsewhere, industrial starches are expected to perform better, particularly in Europe,but not sufficiently to offset more normal co-product returns. Central costs Central costs, which include head office, treasury and reinsurance activities, increasedby £11 million to £42 million reflecting the costs associated with strengtheningthe Group's senior management team, costs associated with our financing portfolioand one-off costs of £6 million in the first half relating to the review of the Group'sactivities. The effect of exchange translation was to increase central costs by £1million. Energy costs Energy costs for the year were £170 million (2010 - £178 million), a decrease of4% (7% in constant currency). The improvement of £12 million in constant currencywas due principally to lower prices (£22 million) and efficiency improvements (£9million), partly offset by higher volumes (£14 million) and an unfavourable inputmix (£5 million). We have covered the cost of almost 70% of our estimated energyneeds for the 2012 financial year, and while contracts have been secured at higherprices than in the 2011 financial year we will look to mitigate some of the upwardpressure through efficiencies. Exceptional items from continuing operations Year to 31 March 2011 £m 2010 £m Business transformation costs (15 ) (3 ) Gain on disposal of assets net of pre-disposal costs - Fort Dodge 10 — Impairment charges - Fort Dodge — (217 ) UK Group Pension Scheme changes — 5 Closure costs — (55 ) Write-down of assets — (28 ) Exceptional items (5 ) (298 ) Exceptional items within our continuing operations during the year totalled a netcharge of £5 million on a pre-tax basis. We recognised an exceptional gain of £10million relating to the Fort Dodge, Iowa facility which was sold on 30 March 2011.The facility was impaired in the previous financial year. We have incurred an exceptionalcharge of £15 million in relation to business transformation costs, principally restructuringassociated with the new Commercial and Food Innovation Centre in Chicago and theimplementation of a common global IS/IT platform and global support services. The tax impact on continuing net exceptional items is a charge of £10 million. Inaddition, an exceptional tax credit of £8 million has been recognised in respectof unrealised profit on inventory following the restructuring of our business. Thiscredit has no impact on cash paid or received. Exceptional items from continuing operations in the 2010 financial year compriseda £3 million charge relating to business transformation costs in Speciality FoodIngredients, an impairment charge of £217 million relating to the decision to mothballour Fort Dodge facility, a £55 million charge relating to our decision to mothballthe sucralose manufacturing facility in McIntosh, Alabama, and the write off of £28million of research and development assets from which we no longer expect to receivea commercial benefit. We also recognised a £5 million exceptional gain in relationto changes to the UK Group Pension Scheme. The exceptional tax credit on continuingoperations was £117 million, primarily due to the deferred tax asset related to theimpairment of the Fort Dodge facility. An exceptional tax credit of £15 million wasalso recognised in respect of the release of various tax provisions. Net finance expense The net finance expense from continuing operations decreased from £72 million to£58 million, principally as a result of lower pension interest expense. We were notable to benefit fully from the decrease in average net debt due to the fixed natureof our gross borrowings. However, the net interest charge is expected to be significantly lower in the 2012financial year as a result of lower levels of average net debt, a reduction of ouraverage effective interest rate principally as a result of the repayment of our US$300million bond in June 2011, and a change from a £4 million pension interest expensein the year ended 31 March 2011 to an anticipated pension interest credit of £5 millionin the year ending 31 March 2012. Taxation The taxation charge from continuing operations before exceptional items and amortisationof acquired intangible assets was £49 million (2010 - £41 million) as a result ofhigher pre-tax adjusted profit. The effective rate of tax on adjusted profit decreasedto 18.5% (2010 - 20.8%) as a result of the geographic mix of profits and also theresolution of some historical tax issues. The effective tax rate for the 2012 financial year is expected to remain broadlyin line with this year's effective tax rate assuming the geographic mix of profitsis in line with our expectations. Discontinued operations Discontinued operations comprise our former Sugars Division, principally our formerEU Sugars business which we sold in September 2010, our former Molasses businesswhich we sold in December 2010, our former International Sugar Trading business,and our Vietnam and Israeli sugar interests which are reported as assets held forsale. On 20 April 2011 we announced we had entered into a conditional agreement tosell our Vietnam business. Sales from discontinued operations for the year decreased to £590 million from £1,074million as a result of the sale of EU Sugars and Molasses part way through the year.The operating loss from our discontinued operations totalled £45 million, after exceptionallosses of £43 million (2010 - profit of £50 million, after exceptional profits of£22 million). The exceptional pre-tax loss for the year of £43 million comprises the £55 millionloss on disposal of EU Sugars booked during the year partially offset by the £12million profit on the disposal of Molasses. Taxation on our discontinued operationswas a £16 million credit (2010 - £11 million charge) after reflecting an exceptionaltax credit of £19 million (2010 - £5 million charge). The loss from discontinuedoperations after taxation for the year was £29 million (2010 - profit £40 million).The final loss on disposal of EU Sugars is subject to closing adjustments arisingfrom the agreement of post completion statements. The process to reach such agreementis ongoing, and items totalling £54 million remain outstanding and are expected tobe submitted for adjudication to an independent expert. These items relate to theimpact of major turbulence in the supply of raw sugar to the EU during the periodprior to closing which resulted in an increase in certain rolling re-export commitmentsof the business arising under the EU Sugar Regime. The Group believes that its positionis fully supported and as such will be robustly defended. No provision in respectof outstanding items has been recorded. Earnings per share Adjusted diluted earnings per share from continuing operations was 45.7p (2010 -33.7p), an increase of 36% (34% in constant currency) as a result of higher operatingprofits, lower finance costs and the reduction in the effective tax rate. On thesame basis, basic earnings per share was higher by 37% (36% in constant currency)at 46.5p (2010 - 33.9p). Total basic earnings per share at 35.3p was higher than the prior year as the 2010basic earnings per share of 3.3p was impacted by significant exceptional costs. Dividend The Board is recommending a 5% increase in the final dividend to 16.9p (2010 - 16.1p)making a full year dividend of 23.7p (2010 - 22.9p) per share, up 3.5% on the prioryear. Subject to shareholder approval, the proposed final dividend will be due andpayable on 5 August 2011 to all shareholders on the Register of Members at 1 July2011. In addition to the cash dividend option, shareholders will also be offereda Dividend Reinvestment Plan (DRIP) alternative. The DRIP replaces the scrip alternativethat was previously available to shareholders. Assets Gross assets at 31 March 2011 were £3,051 million, £237 million lower than the previousyear principally as a result of the disposal of EU Sugars and Molasses. Net assetsincreased by £119 million to £973 million driven by the profits generated in theyear and actuarial gains relating to our post retirement plans partially offset bydividend payments and foreign exchange losses on the translation of overseas subsidiaries. Post-retirement benefits We maintain pension plans for our employees in a number of countries. Some of thesearrangements are defined benefit pension schemes and, although we have closed themain UK Scheme to future accrual and commenced the process for closing the US schemesto future accrual during the year, legacy obligations remain. In the US, we alsoprovide medical and life assurance benefits as part of the retirement package. The net deficit on our post retirement obligations reduced by £118 million to £139million at 31 March 2011 from £257 million in the prior year principally as a resultof increasing asset valuations and cash contributions during the year. The UK pensionobligations relating to EU Sugars and Molasses remained with the Group. Net debt Net debt fell by £350 million to £464 million (2010 - £814 million) driven by freecash flow of £190 million from the continuing businesses and £316 million relatingto the sale of EU Sugars, Molasses and Fort Dodge. These inflows were partially offsetby cash utilised by the discontinued businesses amounting to £105 million, principallythe repayment of letters of credit ahead of disposal, and dividend payments of £70million. In addition, the Group's debt is primarily denominated in US dollars andeuros to match the underlying currencies of the operational cash flows and net assetsand, therefore, as sterling has strengthened against the US dollar and the euro,net debt reported in sterling has reduced by £27 million. During the year, net debt peaked at £836 million in May 2010. The average net debtwas £661 million, a reduction of £359 million from £1,020 million in the prior year. Cash flow Year to 31 March 2011 £m 2010 £m Adjusted operating profit from continuing businesses 321 268 Depreciation/amortisation 96 105 Working capital (101 ) 186 Share-based payments 9 4 Operating cash flow 325 563 Capital expenditure (58 ) (60 ) Operating cash flow less capital expenditure 267 503 Net interest and tax paid (77 ) (89 ) Free cash flow 190 414 Operating cash flow from continuing operations was £325 million, a decrease of £238million compared with the prior year primarily due to increases in working capitalof £101 million (2010 - reduction of £186 million) as we took the decision to increaseUS inventories (£126 million) in the second half of the year. This action was takenin response to the anticipated tight supply situation running up to the next cornharvest. We also made further progress to reduce working capital tied up in payablesand receivables. Net interest paid decreased by £13 million to £46 million principally as a resultof a decrease in interest paid on our bank and other borrowings. Income tax paid was £31 million. Capital expenditure of £58 million was 64% of the depreciation charge, reflectingthe transition to our new Group capital allocation process. Including the investmentswe will be making in growth and business transformation and the additional capitalinvestment required to restart production at the McIntosh facility, we expect capitalexpenditure to be up to 1.4 times depreciation in the 2012 financial year. Free cash inflow (representing cash generated from continuing operations after workingcapital, interest, taxation and capital expenditure) was £190 million, £224 millionlower than the prior year principally as a result of the increases in working capitaldiscussed earlier. Cash outflow related to discontinued operations was £105 million compared with aninflow of £97 million in the prior year due to the timing of working capital flowsahead of the disposal of EU Sugars and Molasses. Net disposal proceeds from the saleof EU Sugars and Molasses were £280 million. Equity dividends paid were £70 million, £33 million lower than the previous yeardue to the high take up of the scrip dividend. CONSOLIDATED INCOME STATEMENT Year to 31 March Year to 31 March Notes 2011 £m 2010 £m Continuing operations Sales 3 2 720 2 533 Operating profit/(loss) 3 303 (44 ) Finance income 5 3 2 Finance expense 5 (61 ) (74 ) Profit/(loss) before tax 245 (116 ) Income tax (expense)/credit 6 (49 ) 95 Profit/(loss) for the year from continuing operations 196 (21 ) (Loss)/profit for the year from discontinued operations 9 (29 ) 40 Profit for the year 167 19 Profit for the year attributable to: - Equity holders of the Company 163 15 - Non-controlling interests 4 4 167 19 Earnings per share attributable to the equity holders of the Company from continuing and discontinued operations 7 pence pence - Basic 35.3 3.3 - Diluted 34.7 3.3 Earnings/(loss) per share attributable to the equity holders of the Company from continuing operations 7 - Basic 42.6 (4.7 ) - Diluted 41.9 (4.7 ) Dividends per share 8 - Interim paid 6.8 6.8 - Final proposed 16.9 16.1 23.7 22.9 Analysis of adjusted profit before tax from continuing operations £m £m Profit/(loss) before tax 245 (116 ) Add back: Exceptional items 4 5 298 Amortisation of acquired intangible assets 13 14 Adjusted profit before tax, exceptional items and amortisation of acquired intangibleassets 263 196 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year to 31 March Year to 31 March 2011 £m 2010 £m Profit for the year 167 19 Actuarial gains/(losses) in post employment benefit plans 58 (104 ) Net fair value gains on cash flow hedges 9 13 Cash flow hedges reclassified and reported in the income statement during the year9 11 Valuation gain/(losses) on available-for-sale financial assets 1 (10 ) Net exchange differences (37 ) (10 ) Items recycled to the income statement on disposal (23 ) − Deferred tax relating to the above components − 25 Other comprehensive income/(expense) for the year, net of tax 17 (75 ) Total comprehensive income/(expense) for the year 184 (56 ) Attributable to: Equity holders of the Company 181 (59 ) Non-controlling interests 3 3 184 (56 ) CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 March 31 March Notes 2011 £m 2010 £m ASSETS Non-current assets Goodwill and other intangible assets 320 340 Property, plant and equipment 855 1 208 Investments in associates 5 7 Available-for-sale financial assets 19 14 Derivative financial instruments 48 49 Deferred tax assets 74 143 Trade and other receivables 1 2 Retirement benefit surplus 103 16 1 425 1 779 Current assets Inventories 454 409 Trade and other receivables 291 424 Current tax assets 25 4 Derivative financial instruments 135 150 Cash and cash equivalents 12 654 504 1 559 1 491 Assets held for sale 10 67 18 1 626 1 509 TOTAL ASSETS 3 051 3 288 SHAREHOLDERS' EQUITY Capital and reserves attributable to the equity holders of the Company Share capital 117 115 Share premium 406 405 Capital redemption reserve 8 8 Other reserves 175 220 Retained earnings 244 79 950 827 Non-controlling interests 23 27 TOTAL SHAREHOLDERS' EQUITY 973 854 LIABILITIES Non-current liabilities Trade and other payables 1 1 Borrowings 12 887 1 119 Derivative financial instruments 56 67 Deferred tax liabilities 30 59 Retirement benefit deficit 242 273 Provisions for other liabilities and charges 21 37 1 237 1 556 Current liabilities Trade and other payables 406 485 Current tax liabilities 33 52 Borrowings and bank overdrafts 12 227 190 Derivative financial instruments 126 125 Provisions for other liabilities and charges 44 26 836 878 Liabilities held for sale 10 5 − 841 878 TOTAL LIABILITIES 2 078 2 434 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 3 051 3 288 CONSOLIDATED STATEMENT OF CASH FLOWS Year to 31 March Year to 31 March Notes 2011 £m 2010 £m Cash flows from operating activities Profit/(loss) before tax from continuing operations 245 (116 ) Adjustments for: Depreciation of property, plant and equipment 91 99 Exceptional items 4 5 298 Amortisation of intangible assets 18 20 Share-based payments 9 4 Finance income 5 (3 ) (2 ) Finance expense 5 61 74 Change in working capital (101 ) 186 Cash generated from continuing operations 325 563 Interest paid (49 ) (61 ) Income tax paid (31 ) (30 ) Cash (used in)/generated from discontinued operations 9 (100 ) 115 Net cash generated from operating activities 145 587 Cash flows from investing activities Proceeds on disposal of property, plant and equipment 37 − Interest received 3 2 Purchase of available-for-sale financial assets (5 ) (3 ) Acquisitions of subsidiaries, net of cash acquired − (21 ) Disposal of businesses, net of cash disposed 280 (26 ) Purchase of property, plant and equipment (58 ) (60 ) Purchase of intangible assets and other non-current assets (12 ) (5 ) Net cash used in investing activities in discontinued operations 9 (5 ) (18) Net cash generated from/(used in) investing activities 240 (131 ) Cash flows from financing activities Proceeds from issuance of ordinary shares 2 2 Purchase of ordinary shares − (6 ) Cash inflow from additional borrowings − 198 Cash outflow from repayment of borrowings (129 ) (417 ) Cash outflow from repayment of capital element of finance leases (2 ) (3 ) Dividends paid to the Company's equity holders (70 ) (103 ) Net cash used in financing activities in discontinued operations 9 (18 ) (47) Net cash used in financing activities (217 ) (376 ) Net increase in cash and cash equivalents 12 168 80 Cash and cash equivalents Balance at beginning of year 504 434 Effect of changes in foreign exchange rates (18 ) (10 ) Net increase in cash and cash equivalents 168 80 Balance at end of year 12 654 504 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Share capital and share premium Capital redemption reserve Other reserves Retained earnings Attributable to the equity holders of the Company Non-controlling interests Total equity £m £m £m £m £m £m £m Balance at 31 March 2009 519 8 219 241 987 26 1 013 Other comprehensive income/(expense) for the year - - 1 (75 ) (74 )(1 ) (75 ) Profit for the year - - - 15 15 4 19 Share-based payments charge, including tax - - - 6 6 - 6 Share purchase - - - (6 ) (6 ) - (6 ) Proceeds from shares issued 1 - - 1 2 - 2 Dividends paid - - - (105 ) (105 ) (2 ) (107 ) Scrip issue of shares for scrip dividend - - - 2 2 - 2 Balance at 31 March 2010 520 8 220 79 827 27 854 Other comprehensive (expense)/income for the year - - (45 ) 63 18 (1) 17 Profit for the year - - - 163 163 4 167 Share-based payments charge, including tax - - - 10 10 - 10 Proceeds from shares issued 1 - - 1 2 - 2 Dividends paid - - - (105 ) (105 ) (2 ) (107 ) Scrip issue of shares for scrip dividend 2 - - 33 35 - 35 Non-controlling interests disposed - - - - - (5 ) (5 ) Balance at 31 March 2011 523 8 175 244 950 23 973 NOTES TO THE FINANCIAL INFORMATION For the Year to 31 March 2011 1. Basis of preparation The full year results for the year to 31 March 2011 have been extracted from auditedconsolidated financial statements which have not yet been delivered to the Registrarof Companies. The financial information in this announcement does not constitutethe Group's Annual Report and financial statements. The auditors have reported onthe Group's financial statements for the year to 31 March 2011. The report was unqualifiedand did not contain a statement under Section 498 (2) or (3) of the Companies Act2006. The consolidated financial statements have been prepared in accordance with IFRSas adopted by the European Union, and with those parts of the Companies Act 2006applicable to companies reporting under IFRS. 2. Changes in accounting policy and disclosures The accounting policies adopted in the preparation of the condensed set of consolidatedfinancial information are consistent with those of the Group's Annual Report andAccounts 2010, other than the adoption, with effect from 1 April 2010, of new orrevised accounting standards, as set out below. Following a change in the organisational structure the segments disclosed under theprovisions of IFRS 8 Operating Segments have been changed to Speciality Food Ingredients,Bulk Ingredients, Sugars and Central costs. The comparative segmental informationfor the year ended 31 March 2010 has been reclassified. Following the disposal of the EU Sugar Refining operations ("EU Sugars") to AmericanSugar Refining, Inc, the sale of Molasses to W&R Barnett Ltd and the announcementof the proposed sale of Vietnam Sugar and commitment to sell the Israel operations,the Sugars segment has been reclassified as discontinued operations in the currentand comparative periods. In the current year, the assets and liabilities of VietnamSugar and the sugar operations in Israel have been included within assets and liabilitiesheld for sale. The following new standards are effective for the Group's accounting period beginningon 1 April 2010 and where relevant have been adopted in this financial information.They have not had a material impact on the results or financial position of the Group: * IFRS 1 (revised) First time adoption * IFRIC 17 Distribution of Non-cash Assets to Owners * Amendment to IAS 27 (revised) Consolidated and Separate Financial Statements * IFRS 3 (revised) Business Combinations * IFRS 2 Share-based Payment - group cash-settled share-based payment transactions * Amendment to IAS 32 Financial Instruments: Presentation on classification ofrights issues * Amendment to IAS 39 Financial Instruments: Recognition and Measurement - eligiblehedged items * IFRIC 18 Transfer of Assets from Customers * IFRIC 16 Hedges of a net investment in a foreign operation 3. Segment information Following the change in the organisational structure announced in May 2010, the Grouprestructured its internal organisation into four distinct segments: Speciality FoodIngredients, Bulk Ingredients, Sugars and Central costs. Sugars was subsequentlyclassified as discontinued. Management reporting has been realigned with this reorganisationand, as a result, the segment information set out below reflects this change. Comparativeinformation for the year ended 31 March 2010 has been reclassified. Central costs, which include head office, treasury and reinsurance activities, donot meet the operating segment definition under IFRS 8 but have been disclosed asa reportable segment in the tables below to be consistent with internal managementreporting. Discontinued operations comprise previously disclosed International Sugar Tradingand Eastern Sugar together with the Sugars division (Note 9). The segment results for the year to 31 March 2011 were as follows: Continuing operations Speciality Food Ingredients Bulk Ingredients Central costs Total Discontinued operations (Note 9) Total from continuing and discontinued operations £m £m £m £m £m £m Sales Total sales 916 1 987 - 2 903 590 3 493 Inter-segment sales (111 ) (72 ) - (183 ) - (183 ) External sales (note a) 805 1 915 - 2 720 590 3 310 Operating profit/(loss) Before exceptional items and amortisation of acquired intangible assets 206 157(42 ) 321 (2 ) 319 Exceptional items (Note 4) (7 ) 9 (7 ) (5 ) (43 ) (48 ) Amortisation of acquired intangible assets (13 ) - - (13 ) - (13 ) Operating profit/(loss) 186 166 (49 ) 303 (45 ) 258 Net finance expense (58 ) - (58 ) Profit/(loss) before tax 245 (45 ) 200 Adjusted operating margin 25.6 % 8.2 % - 11.8 % (0.3 %) 9.6 % Operating margin 23.1 % 8.7 % - 11.1 % (7.6 %) 7.8 % (a) There were no customers that contributed more than 10% of the Group's externalsales from continuing operations for the year ended 31 March 2011. The segment results for the year to 31 March 2010 are as follows: Continuing operations Speciality Food Ingredients Bulk Ingredients Central costs Total Discontinued operations (Note 9) Total from continuing and discontinued operations £m £m £m £m £m £m Sales Total sales 869 1 772 - 2 641 1 074 3 715 Inter-segment sales (81 ) (27 ) - (108 ) - (108 ) External sales (note a) 788 1 745 - 2 533 1 074 3 607 Operating profit/(loss) Before exceptional items and amortisation of acquired intangible assets 163 136(31 ) 268 28 296 Exceptional items (Note 4) (66 ) (237 ) 5 (298 ) 22 (276 ) Amortisation of acquired intangible assets (14 ) - - (14 ) - (14 ) Operating profit/(loss) 83 (101 ) (26 ) (44 ) 50 6 Net finance (expense)/income (72 ) 1 (71 ) (Loss)/profit before tax (116 ) 51 (65 ) Adjusted operating margin 20.7 % 7.8 % - 10.6 % 2.6 % 8.2 % Operating margin 10.5 % (5.8 %) - (1.7 %) 4.7 % 0.2 % (a) Two external customers contributed more than 10% of the Group's external salesfrom continuing operations for the year ended 31 March 2010. The combined externalsales for these customers were £553 million which have been recorded across all thereportable segments, excluding central costs. 4. Exceptional items Exceptional items are as follows: Year to 31 March Year to 31 March 2011 2010 £m £m Continuing operations Gain on disposal, net of pre-disposal costs - Fort Dodge (note a) 10 - Impairment charges - Fort Dodge (note b) - (217 ) Business transformation costs (note c) (15 ) (3 ) Closure and restructuring costs (note d) - (55 ) UK Group Pension Scheme changes (note e) - 5 Write-down of assets (note f) - (28 ) (5 ) (298 ) Discontinued operations Loss on disposal - EU Sugars (note g) (55 ) - Gain on disposal - Molasses (note h) 12 - UK Group Pension Scheme changes (note e) - 37 Impairment charges (note b) - (15 ) (43 ) 22 The comparative figures for 2010 have been restated to reflect the disposal of EUSugars and Molasses, which are presented as discontinued operations in both years. (a) The Group has recorded a net exceptional gain of £10 million in respect of themothballed ethanol facility at Fort Dodge, Iowa. On 30 March 2011 the facility wassold for cash consideration of £36 million resulting in a gain on disposal of £15million. An exceptional charge of £25 million had previously been booked early inthe year in respect of onerous contracts relating to future obligations of the plant.As a result of the disposal, £20 million of the resultant provision was no longerrequired and was reversed. This exceptional gain is reported in the Bulk Ingredientssegment. (b) In the year ended 31 March 2010, following a detailed analysis of end markets,in light of costs of around £70 million to complete and commission the plant in FortDodge, Iowa, and factoring in the risks associated with future returns from operatingthe plant, the Group concluded that the plant was highly unlikely to be completedor commissioned in the foreseeable future. As a result, the facility was mothballedand an impairment charge of £217 million recognised. Of the £217 million charge,£209 million related to assets previously held in assets under construction and £8million related to prepayments. This exceptional item was reported in the Bulk Ingredientssegment. In the year ended 31 March 2010, the Group recognised an impairment charge of £15million at its sugar refining business in Israel comprising a full write-down ofthe property, plant and equipment (£11 million) and an inventory impairment (£4 million).This impairment charge reflected anticipated future decline in the commercial prospectsof Israel which is now reported within discontinued operations. (c) The Group has recognised an exceptional charge of £15 million in relation tobusiness transformation costs. The Group incurred £6 million of charges in relationto the implementation of a common global IS/IT platform, £4 million in relation tothe relocation of employees and restructuring associated with the new Commercialand Food Innovation Centre in Chicago, Illinois, and £5 million (2010 - £3 million)of closure and other restructuring costs relating to the Food Systems business. Thesecosts are reported in the Bulk Ingredients (£1 million), Speciality Food Ingredients(£7 million) and the Central costs (£7 million) segments. (d) In the year ended 31 March 2010, the Group recognised an exceptional charge inrelation to the decision to mothball the sucralose manufacturing facility in McIntosh,Alabama. The charge totalled £55 million and covered costs connected with redundancy,clean-up activities and ongoing fixed costs, and included provision for costs tofinal closure. The exceptional item was reported in the Speciality Food Ingredientssegment. (e) In the year ended 31 March 2010, the Group recognised an exceptional gain of£42 million in relation to changes announced to the Group Pension Scheme in the UnitedKingdom. Of the total gain, £32 million related to negative past service costs followingthe removal of the discretionary early retirement benefit from November 2009 and£10 million related to a curtailment gain as a result of the closure of the schemeto future benefit accrual for employee members from 6 April 2011. This exceptionalitem related to the Central costs segment (£5 million) and Sugars (£37 million) segments. (f) In the year ended 31 March 2010, following a review of its portfolio of researchand development projects, the Group wrote off £28 million in relation to assets fromwhich it does not expect to receive a commercial benefit. Of the £28 million, £20million had previously been reported within property, plant and equipment, £6 millionwithin intangible assets and £2 million within prepayments. These assets relatedto operations reported in both the Bulk Ingredients (£20 million) and Specialty FoodIngredients (£8 million) segments. (g) The Group recorded a loss of £55 million in relation to the disposal of EU Sugars.Further details are set out in Note 11. (h) The Group recorded a gain of £12 million in relation to the disposal of Molasses.Further details are set out in Note 11. The tax impact on continuing net exceptional items is £10 million charge (2010 -£117 million credit). The tax impact on the discontinued net exceptional items isa £19 million credit (2010 - £5 million charge). Tax credits on exceptional costsare only recognised to the extent that losses incurred will result in tax recoverablein the future. In addition, there has been an exceptional tax credit of £8 millionin respect of the recognition of a deferred tax asset on unrealised profit in inventoryfollowing the restructuring of the business organisation. There was an exceptional tax credit of £15 million in the year ended 31 March 2010in respect of the release of various tax provisions following settlement of outstandingissues around the Group. 5. Finance income and finance expense Year to 31 March Year to 31 March 2011 2010 Continuing £m £m Finance income Interest receivable 3 2 Total finance income 3 2 Finance expense Interest payable on bank and other borrowings (45 ) (54 ) Net finance expense arising on post employment benefit plans: - interest cost (76 ) (76 ) - expected return on plan assets 72 57 Finance lease charges (1 ) (1 ) Unwinding of discounts in provisions (2 ) - Fair value gains/(losses) on interest-related derivative instruments: - interest rate swaps - fair value hedges 7 (2 ) - derivatives not designated as hedges (3 ) (1 ) Fair value adjustment of borrowings attributable to interest rate risk (7 ) 3 Recycle of cash flow hedge reserve in respect of borrowings repaid (6 ) - Total finance expense (61 ) (74 ) Net finance expense (58 ) (72 ) Finance expense is shown net of borrowing costs capitalised into the cost of assetsof £nil (2010 - £2 million at a capitalisation rate of 5.0%). Interest payable on other borrowings includes £0.2 million (2010 - £0.2 million)of dividends in respect of the Group's 6.5% cumulative preference shares. Discontinued Included within the loss for the year in relation to discontinued operations (Note9) is net finance income of £nil (2010 - £1 million). 6. Income tax expense Year to 31 March Year to 31 March 2011 2010 Continuing £m £m Current tax: In respect of the current year - UK - 1 - Overseas 3 33 Adjustments in respect of previous years (10 ) (2 ) Exceptional tax credit - (15 ) (7 ) 17 Deferred tax: Deferred tax charge/(credit) 64 (112 ) Exceptional tax credit (8 ) - Income tax expense/(credit) 49 (95 ) The income tax charge relating to continuing operations in the year to 31 March 2011of £49 million (2010 - credit of £95 million) includes a charge of £10 million inrespect of pre-tax exceptional items (2010 - £117 million credit). Included within current tax is a £10 million credit (2010 - £2 million) principallyrelating to the settlement of prior year tax obligations in a number of jurisdictions. The exceptional tax credit of £8 million represents the recognition of a deferredtax asset on unrealised profit in inventory following the restructuring of the Group.£15 million in 2010 represented releases of various tax provisions following settlementof outstanding issues around the Group. The effective tax rate for the year, calculated on the basis of the total incometax charge relating to continuing operations as a proportion of profit before tax,is 19.7% (2010 - income tax credit on loss before tax of 81.9%). This compares withthe standard rate of corporation tax in the United Kingdom of 28% (2010 - 28%). The standard rate of corporation tax in the United Kingdom will reduce from 28% to26% from 1 April 2011. Discontinued The income tax credit in respect of discontinued operations (Note 9) in the yearto 31 March 2011 is £16 million (2010 - £11 million expense). 7. Earnings per share Basic Basic earnings per share is calculated by dividing the profit attributable to equityholders of the Company by the weighted average number of ordinary shares in issueduring the year, excluding ordinary shares purchased by the Company and held in theEmployee Share Ownership Trust or in Treasury. Year to 31 March 2011 Year to 31 March 2010 Continuing operations Discontinued operations Total Continuingoperations Discontinued operations Total Profit/(loss) attributable to equity holders of the Company (£million) 196 (33) 163 (21) 36 15 Weighted average number of ordinary shares in issue (millions) 461.5 461.5 461.5457.0 457.0 457.0 Basic earnings/(loss) per share 42.6p (7.3)p 35.3p (4.7)p 8.0p 3.3p Diluted Diluted earnings per share is calculated by adjusting the weighted average numberof ordinary shares in issue to assume conversion of all potential dilutive ordinaryshares. Potential dilutive ordinary shares arise from share options, and the Group'slong term share incentive plans. For non-performance related share plans, a calculationis performed to determine the number of shares that could have been acquired at fairvalue (determined as the average annual market share price of the Company's shares)based on the monetary value of the subscription rights attached to outstanding shareoptions. For performance related share plans, a calculation is performed to determinethe satisfaction or otherwise, of the forecast performance conditions at the endof the reporting period, and the number of shares which would be issued based onthe forecast status at the end of the reporting period. Year to 31 March 2011 Year to 31 March 2010 Continuing operations Discontinued operations Total Continuingoperations Discontinued operations Total Profit/(loss) attributable to equity holders of the Company (£million) 196 (33) 163 (21) 36 15 Weighted average number of diluted shares in issue (millions) 468.8 468.8 468.8457.0 457.0 457.0 Diluted earnings/(loss) per share 41.9p (7.2)p 34.7p (4.7)p 8.0p 3.3p The adjustment for the dilutive effect of share options at 31 March 2011 was 7.3million shares (2010 - nil). Adjusted earnings per share Adjusted earnings per share is stated excluding exceptional items and amortisationof acquired intangible assets as follows: Year to 31 March Year to 31 March Continuing operations 2011 2010 Profit/(loss) attributable to equity holders of the Company (£million) 196 (21) Adjustments for (£million): - exceptional items 5 298 - amortisation of acquired intangible assets 13 14 - tax effect of the above adjustments 8 (121 ) - exceptional tax credit (8 ) (15 ) Adjusted profit (£million) 214 155 Adjusted basic earnings per share from continuing operations 46.5p 33.9p Adjusted diluted earnings per share from continuing operations 45.7p 33.7p For the purposes of the adjusted diluted earnings per share from continuing operationsfor the year ended 31 March 2010, the adjustment for the dilutive effect of shareoptions was 2.3 million. 8. Dividends Year to 31 March Year to 31 March 2011 2010 Dividends paid on ordinary equity shares (£million): - final paid relating to prior year − interim paid relating to current year 74 31 74 31 Total dividend paid (£million) 105 105 Satisfied by: - cash (£million) - scrip dividends (£million) (note a) 70 35 103 2 Total 105 105 The total ordinary dividend is 23.7p (2010 − 22.9p) made up as follows: − interim dividend paid − final dividend proposed (note b) 6.8p 16.9p 6.8p 16.1p Total 23.7p 22.9p (a) During the year, shareholders were given the option to receive the final dividendrelating to the prior year and the interim dividend relating to the current yearin the form of a scrip issue. On 30 July 2010 and 7 January 2011, the Group issued5,716,625 shares and 1,601,272 shares respectively for scrip at a nominal value pershare of 25p and a cash equivalent value of £35 million. (b) The final dividend proposed for the year of £79 million (2010 - £74 million),based on the number of shares outstanding as at 31 March 2011 has not been recognisedas a liability and will be paid, subject to approval by shareholders at the Company'sAnnual General Meeting, on 5 August 2011 to shareholders who are on the Registerof Members on 1 July 2011. 9. Discontinued operations On 1 July 2010, the Group announced its intention to sell all the businesses withinthe Sugars segment. Accordingly, the results of these Sugar businesses are presentedas discontinued operations for the year ended 31 March 2011 and 31 March 2010. On30 September 2010, the Group completed the disposal of EU Sugars to American SugarRefining, Inc. On 3 December 2010, the Group completed the disposal of Molasses toW&R Barnett Ltd. On 20 April 2011, the Group announced that it had entered into aconditional contract to dispose of Vietnam Sugar to TH Milk Food Joint Stock Companyfor cash consideration of approximately £33 million together with the Group's proportionateshare of cash and working capital. The results of Israel and Vietnam Sugar are presentedwithin the Other category for both periods. Year to 31 March 2011 International EU Sugars Molasses Sugar Trading Other Total £m £m £m £m £m Sales 330 141 18 101 590 Operating (loss)/profit before exceptional items (2 ) 7 (11 ) 4 (2) Exceptional items (note 4) (55 ) 12 - - (43 ) Operating (loss)/profit (57 ) 19 (11 ) 4 (45 ) Finance income - - - 1 1 Finance expense - - (1 ) - (1 ) (Loss)/profit before tax (57 ) 19 (12 ) 5 (45 ) Income tax credit /(expense) 22 (1 ) - (5 ) 16 (Loss)/profit for the year (35 ) 18 (12 ) - (29 ) Non-controlling interests - (1 ) - (3 ) (4 ) (Loss)/profit attributable to equity holders of the Company (35 ) 17 (12 ) (3 ) (33 ) Year to 31 March 2010 International EU Sugars Molasses Sugar Trading Other Total £m £m £m £m £m Sales 689 228 101 56 1 074 Operating profit/(loss) before exceptional items 14 14 (3 ) 3 28 Exceptional items 37 - - (15 ) 22 Operating profit/(loss) 51 14 (3 ) (12 ) 50 Finance income 2 1 - - 3 Finance expense - - (2 ) - (2 ) Profit/(loss) before tax 53 15 (5 ) (12 ) 51 Income tax (expense)/credit (12 ) (2 ) - 3 (11 ) Profit/(loss) for the year 41 13 (5 ) (9 ) 40 Non-controlling interests - (1 ) - (3 ) (4 ) Profit/(loss) attributable to equity holders of the Company 41 12 (5 ) (12 ) 36 Net cash flows from discontinued operations are as follows: Year to 31 March 2011 International EU Sugars Molasses Sugar Trading Other Total £m £m £m £m £m Net cash (used in)/generated from operating activities (85 ) (11 ) (17 )13 (100 ) Net cash (used in)/generated from investing activities (5 ) (1 ) - 1 (5) Net cash used in financing activities (16 ) (1 ) - (1 ) (18) Year to 31 March 2010 International EU Sugars Molasses Sugar Trading Other Total £m £m £m £m £m Net cash generated from/(used in) operating activities 110 28 (25 ) 2115 Net cash (used in)/generated from investing activities (17 ) (2 ) - 1(18 ) Net cash used in financing activities (45 ) (1 ) - (1 ) (47) Sale of EU Sugars The sale of EU Sugars to American Sugar Refining Inc. completed on 30 September 2010.The consideration after working capital adjustments was £227 million, subject toclosing adjustments arising from the agreement of post completion statements. Theprocess to reach such agreement is ongoing and items totalling £54 million remainoutstanding and are expected to be submitted for adjudication to an independent expert.These items relate to the impact of major turbulence in the supply of raw sugar tothe EU during the period prior to closing which resulted in an increase in certainrolling re-export commitments of the business arising under the EU Sugar Regime.The Group believes that its position is fully supported and as such will be robustlydefended. No provision in respect of outstanding items has been recorded. 10. Assets and liabilities classified as held for sale On 20 April 2011, the Group have entered into a conditional contract to dispose ofVietnam Sugar to TH Milk Food Joint Stock Company. The Group is committed to thedisposal of its other remaining businesses within the legacy Sugars division, principallyTate & Lyle Gadot Manufacturing and Tate & Lyle Israel Limited. These businesseshave been disclosed as discontinued operations (Note 9) and the assets and liabilitiesas at 31 March 2011 are shown in the table below. Assets and liabilities as at 31 March 2011 are shown as held for sale as follows: 31 March 31 March 2011 2010 £m £m Assets Intangible assets 2 - Property, plant and equipment 22 - Inventories 17 - Trade and other receivables 9 - Available-for-sale financial assets 17 18 Total assets held for sale 67 18 Liabilities Trade and other payables (5 ) - Total liabilities held for sale (5 ) - 11. Acquisitions and disposals Acquisitions During the year ended 31 March 2008, the Group acquired 80% of the issued share capitalof G.C. Hahn & Co. (Hahn) from Georg Hahn Familien GmbH. As the Group effectivelybears all the risks and rewards for 100% of this business, no non-controlling interestis recognised in the Group's financial statements. The acquisition agreement allowed for the Group to acquire the remaining 20% of theissued share capital of Hahn through put and call options. During the year to 31March 2010 a put option was exercised for 15% of the issued share capital for a totalconsideration of £21 million which was paid by the Group on 31 March 2010. At 31March 2011 deferred consideration of £7 million relating to the remaining 5% of theissued share capital is recognised in trade and other payables. Disposals EU Sugars and Molasses disposal During the year the Group completed the disposal of EU Sugars to American Sugar Refining,Inc. The disposal comprised an asset sale of the Thames Sugar Refinery and its associatedbusinesses in London and a share sale of Alcantara Empreendimentos SGPS, SA and Tate& Lyle Norge AS and Eridania Tate & Lyle SpA. Total consideration of £227 millionremains subject to finalisation of post completion statements (Note 9). During the year the Group also completed the disposal of Molasses to W&R BarnettLtd. Total consideration was £66 million, subject to finalisation of post completionstatements. The Group incurred £4 million of costs associated with the disposal. The calculation of the result on disposal is shown below: 31 March 2011 EU Sugars Molasses Total £m £m £m Goodwill and intangible assets 1 2 3 Property, plant and equipment 203 14 217 Investment in associates 2 - 2 Available-for-sale financial assets 1 - 1 Derivative financial instruments - assets 18 7 25 Inventories 72 35 107 Trade and other receivables 66 42 108 Trade and other payables (53 ) (33 ) (86 ) Derivative financial instruments - liabilities (15 ) (3 ) (18 ) Retirement benefit obligation (2 ) - (2 ) Cash and cash equivalents 5 5 10 Borrowings (5 ) (3 ) (8 ) Taxation (1 ) (2 ) (3 ) Total assets disposed 292 64 356 Non controlling interests disposed - (5 ) (5 ) Net assets disposed 292 59 351 Cash received during the year 225 65 290 Receivable at 31 March 2011 2 1 3 Total consideration 227 66 293 Other items: Disposal costs (4 ) (4 ) (8 ) Recycling of cash flow hedge reserve 3 - 3 Exchange differences transferred from equity 11 9 20 (Loss)/gain on disposal (55 ) 12 (43 ) Cash flows: Cash consideration 225 65 290 Cash disposed (5 ) (5 ) (10 ) Cash inflow in the year 220 60 280 International Sugar Trading In the year to 31 March 2009, the Group disposed of its International Sugar Tradingbusiness to Bunge Limited (Bunge) for total consideration, net of disposal costsof £57 million. Following agreement of completion adjustments, the Group repaid £26million to Bunge during the year to 31 March 2010. 12. Net debt The components of the Group's net debt are as follows: 31 March 31 March 2011 2010 £m £m Non-current borrowings (887 ) (1 119 ) Current borrowings and overdrafts (227 ) (190 ) Debt-related derivative instruments (4 ) (9 ) Cash and cash equivalents 654 504 Net debt (464 ) (814 ) Derivative financial instruments presented within assets and liabilities in the statementof financial position of £1 million net asset comprise net debt-related instrumentsof £4 million liability and net non-debt-related instruments of £5 million asset(2010 - £7 million net asset comprising net debt-related instruments of £9 millionliability and net non-debt-related instruments of £16 million asset). Movements in the Group's net debt are as follows: Year to 31 March Year to 31 March 2011 2010 £m £m At 1 April (814 ) (1 231 ) Increase in cash and cash equivalents in the year 168 80 Cash outflow from net decrease in borrowings 147 267 Debt transferred on disposal of businesses 8 - Trade finance recognised as debt - (16 ) Fair value and other movements - 7 Exchange 27 79 Decrease in net debt in the year 350 417 Balance at 31 March (464 ) (814 ) Included in the cash outflow from the net decrease in borrowings is an amount of£16 million (2010 - £45 million) that is included in net cash used in financing activitiesfrom discontinued operations. 13. Capital commitments 31 March 31 March 2011 2010 £m £m Commitments for the acquisition of property, plant and equipment 24 8 14. Post balance sheet events On 20 April 2011, the Group announced the sale on a conditional basis of VietnamSugar to TH Milk Food Joint Stock Company for cash consideration of £33 million inaddition to the Group's share of the value of working capital and net cash to beretained in the business. The disposal is expected to be completed during the firsthalf of the 2012 financial year. On 26 May 2011, the Group took the decision to re-open the mothballed facility inMcIntosh, Alabama and restart production of sucralose there. The Group estimatesthat the re-opening process will take about 12 months and that production will commencein the first half of the financial year ending 31 March 2013. Capital expenditureof around £13 million is anticipated before the plant can restart. The decision willresult in the reversal of impairment of around £50 million and the release of around£20 million of the McIntosh mothball provision at current exchange rates. Both thereversal of the impairment and the release of the provision will be recognised asexceptional items in the 2012 financial year. 15. Foreign exchange rates The following exchange rates have been applied in the translation of the financialstatements of foreign subsidiaries, joint ventures and associates: Year to Year to 31 March 31 March Average foreign exchange rates 2011 2010 £1 = US$ 1.55 1.61 £1 = € 1.19 1.13 31 March 31 March Year end foreign exchange rates 2011 2010 £1 = US$ 1.60 1.52 £1 = € 1.13 1.12 16. Reconciliation to adjusted information Adjusted information is presented as it provides both management and investors withvaluable additional information on the performance of the business. The followingitems are excluded from adjusted information: - exceptional items including profits and losses on disposals of businesses, impairmentsand closure and restructuring provisions; and - amortisation of intangibles acquired through business combinations The following table shows the reconciliation of the statutory information presentedin the income statement to the adjusted information: Year to 31 March 2011 Year to 31 March 2010 Reported £m Exceptional/ Amortisation £m Adjusted £m Reported £m Exceptional/ Amortisation £m Adjusted £m Continuing operations Sales 2 720 - 2 720 2 533 - 2 533 Operating profit/(loss) 303 18 321 (44 ) 312 268 Net finance expense (58 ) - (58 ) (72 ) - (72 ) Profit/(loss) before tax 245 18 263 (116 ) 312 196 Income tax (expense)/credit (49 ) - (49 ) 95 (136 ) (41 ) Non-controlling interests - - - - - - Profit/(loss) attributable to equity holders of the Company 196 18 214 (21 ) 176 155 Basic EPS (p) 42.6 3.9 46.5 (4.7 ) 38.6 33.9 Diluted EPS (p) 41.9 3.8 45.7 (4.7 ) 38.4 33.7 Tax rate 19.7 % 18.5 % 81.9 % 20.8 % Discontinued operations Sales 590 - 590 1 074 - 1 074 Operating (loss)/profit (45 ) 43 (2 ) 50 (22 ) 28 Net finance income - - - 1 - 1 (Loss)/profit before tax (45 ) 43 (2 ) 51 (22 ) 29 Income tax credit/(expense) 16 (19 ) (3 ) (11 ) 5 (6 ) Non-controlling interests (4 ) - (4 ) (4 ) - (4 ) (Loss)/profit attributable to equity holders of the Company (33 ) 24 (9 ) 36 (17 ) 19 Basic EPS (p) (7.3 ) 5.4 (1.9 ) 8.0 (3.7 ) 4.3 Diluted EPS (p) (7.2 ) 5.3 (1.9 ) 8.0 (3.7 ) 4.3 Total operations Sales 3 310 - 3 310 3 607 - 3 607 Operating profit 258 61 319 6 290 296 Net finance expense (58 ) - (58 ) (71 ) - (71 ) Profit/(loss) before tax 200 61 261 (65 ) 290 225 Income tax (expense)/credit (33 ) (19 ) (52 ) 84 (131 ) (47 ) Non-controlling interests (4 ) - (4 ) (4 ) - (4 ) Profit attributable to equity holders of the Company 163 42 205 15 159 174 Basic EPS (p) 35.3 9.3 44.6 3.3 34.9 38.2 Diluted EPS (p) 34.7 9.1 43.8 3.3 34.7 38.0 Tax rate 16.4 % 19.7 % 129.2 % 20.9 % ADDITIONAL INFORMATION For the Year to 31 March 2011 1. Ratio analysis Year to 31 March 2011 Year to 31 March 2010 Net debt to EBITDA (a) = Net debt 474 780 Pre-exceptional EBITDA 426 425 = 1.1 times = 1.8 times Interest cover (a) = Operating profit before amortisation of acquired intangibles and exceptional items Net interest and finance expense 329 301 48 52 = 6.9 times = 5.8 times Earnings dividend cover = Adjusted basic earnings per share from continuing operations 46.5 33.9 Dividend per share 23.7 22.9 = 2.0 times = 1.5 times Cash dividend cover (b) = Free cash flow from continuing operations 190 414 Cash dividends paid 70 103 = 2.7 times = 4.0 times Gearing = Net debt 464 814 Total shareholders' equity 973 854 = 48% = 95% Return on capital employed = PBITE 308 254 Average invested operating capital (c) 1 495 1 866 = 20.6% = 13.6% Average quarterly cash conversion cycle (d) 34 days 45 days (a) These ratios have been calculated under the Group's bank covenant definitions.Net debt is calculated using average rates of exchange. (b) Cash dividends paid reflect the impact of scrip elections. (c) Defined as the sum of shareholders equity, net debt, net tax assets, pensionliabilities, and adjusted net operating assets of discontinued operations. (d) Defined as controllable working capital divided by quarterly sales, multipliedby number of days in quarter.
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Share Price:
674.00
Bid:
675.00
Ask:
676.00
Change:
0.50 (0.07%)
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1.00 (0.148%)
Open:
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678.50
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| Date | Source | Headline | |
|---|---|---|---|
| 4th Jun 2024 | 5:22 pm | RNS | Annual Financial Report and Notice of AGM |
| 4th Jun 2024 | 11:00 am | RNS | Director/PDMR Shareholding |
| 3rd Jun 2024 | 12:00 pm | RNS | Total Voting Rights |
| 30th May 2024 | 12:15 pm | RNS | Holding(s) in Company |
| 23rd May 2024 | 7:00 am | RNS | Final Results |
| 23rd May 2024 | 7:00 am | RNS | Sale of remaining interest in Primient JV to KPS |
| 20th May 2024 | 1:00 pm | RNS | Directorate Change |
| 17th May 2024 | 3:30 pm | RNS | Holding(s) in Company |
| 14th May 2024 | 3:30 pm | RNS | Holding(s) in Company |
| 13th May 2024 | 10:00 am | RNS | Holding(s) in Company |
| 8th May 2024 | 3:15 pm | RNS | Holding(s) in Company |
| 1st May 2024 | 2:30 pm | RNS | Total Voting Rights |
| 25th Apr 2024 | 3:45 pm | RNS | Holding(s) in Company |
| 24th Apr 2024 | 7:00 am | RNS | Directorate Change |
| 22nd Apr 2024 | 2:30 pm | RNS | Director/PDMR Shareholding |
| 19th Apr 2024 | 10:15 am | RNS | Holding(s) in Company |
| 17th Apr 2024 | 4:15 pm | RNS | Holding(s) in Company |
| 17th Apr 2024 | 10:30 am | RNS | Holding(s) in Company |
| 15th Apr 2024 | 10:30 am | RNS | Holding(s) in Company |
| 10th Apr 2024 | 3:45 pm | RNS | Holding(s) in Company |
| 8th Apr 2024 | 11:15 am | RNS | Holding(s) in Company |
| 5th Apr 2024 | 3:45 pm | RNS | Holding(s) in Company |
| 4th Apr 2024 | 4:15 pm | RNS | Holding(s) in Company |
| 4th Apr 2024 | 12:30 pm | RNS | Holding(s) in Company |
| 4th Apr 2024 | 11:30 am | RNS | Director/PDMR Shareholding |
| 2nd Apr 2024 | 12:45 pm | RNS | Total Voting Rights |
| 2nd Apr 2024 | 11:30 am | RNS | Holding(s) in Company |
| 28th Mar 2024 | 11:45 am | RNS | Holding(s) in Company |
| 25th Mar 2024 | 11:45 am | RNS | Holding(s) in Company |
| 21st Mar 2024 | 4:10 pm | RNS | Holding(s) in Company |
| 20th Mar 2024 | 3:00 pm | RNS | Holding(s) in Company |
| 20th Mar 2024 | 12:00 pm | RNS | Holding(s) in Company |
| 19th Mar 2024 | 2:00 pm | RNS | Holding(s) in Company |
| 13th Mar 2024 | 4:00 pm | RNS | Holding(s) in Company |
| 12th Mar 2024 | 4:24 pm | RNS | Holding(s) in Company |
| 12th Mar 2024 | 4:22 pm | RNS | Holding(s) in Company |
| 7th Mar 2024 | 7:00 am | RNS | Directorate Change |
| 4th Mar 2024 | 2:00 pm | RNS | Director/PDMR Shareholding |
| 4th Mar 2024 | 1:45 pm | RNS | Holding(s) in Company |
| 28th Feb 2024 | 2:30 pm | RNS | Holding(s) in Company |
| 21st Feb 2024 | 7:00 am | RNS | Trading Statement |
| 1st Feb 2024 | 12:00 pm | RNS | Total Voting Rights |
| 11th Jan 2024 | 1:00 pm | RNS | Director/PDMR Shareholding |
| 2nd Jan 2024 | 12:00 pm | RNS | Block listing Interim Review |
| 8th Dec 2023 | 11:45 am | RNS | Director/PDMR Shareholding |
| 6th Dec 2023 | 10:30 am | RNS | Holding(s) in Company |
| 27th Nov 2023 | 4:15 pm | RNS | Holding(s) in Company |
| 23rd Nov 2023 | 2:30 pm | RNS | Holding(s) in Company |
| 20th Nov 2023 | 10:00 am | RNS | Holding(s) in Company |
| 9th Nov 2023 | 7:00 am | RNS | Half-year Report |
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