This Interim Management Statement covers the period from 1 April 2012 to 30 June 2012, which is the first quarter of the financial year. At the Annual General Meeting of Tate & Lyle PLC, to be held in London today, Sir Peter Gershon, Chairman, will make the following statement:
INTERIM MANAGEMENT STATEMENT
OPERATING PERFORMANCE – CONTINUING OPERATIONS
Adjusted operating profit for the Group for the first quarter was in line with our expectations.
In Speciality Food Ingredients, volumes and sales grew compared with the first quarter of the previous financial year, with solid overall volume growth in the US and within emerging markets offset by a weaker performance from Europe. Sucralose volumes were lower than the prior year period (which included an unusually large volume from customers’ new product launches), primarily due to the more difficult market conditions in Europe. This, together with the impact of the strike at our joint-venture plant in Turkey, which was settled towards the end of the period, resulted in operating profit in this division being lower than our expectations.
Within Bulk Ingredients, operating profit was slightly above our expectations with a strong performance from liquid sweeteners in both the US and Europe more than offsetting extremely challenging conditions in US ethanol and more normal co-product returns, following the exceptionally strong performance in the comparative period last year.
CORN PRICES AND CO-PRODUCTS
Since mid-June 2012, corn prices in the US have increased significantly as a result of the severe and ongoing drought in the mid-west and concerns over the impact this will have on this year’s harvest and corn supplies overall. Continued dry and hot conditions in central Europe have also driven up European corn prices.
Co-products generated a small amount of additional income during the quarter, as we locked in prices at levels marginally higher than those anticipated during the 2012 pricing round.
It is not clear how the current volatility in the corn price and markets that drive co-product demand and pricing will impact the business over the remainder of the year. As in previous years, we will continue our strategy of maintaining full corn silos in the US to secure supply against the backdrop of tight market conditions.
DISPOSAL OF VIETNAM SUGAR INTERESTS
Further to the announcement made in April 2011 and following completion of regulatory and government approvals, on 30 June 2012 we completed the disposal of our Vietnamese sugar interests to TH Milk Food Joint Stock Company for consideration of £45 million.
DEBT MANAGEMENT AND BALANCE SHEET
The Group’s financial position strengthened during the period.
Net debt of £373 million at 30 June 2012 has reduced from £476 million at 31 March 2012. In June, at their maturity, we redeemed the outstanding £100 million bonds from our own funds.
Overall, we continue to expect to make progress this financial year while recognising the current level of uncertainty surrounding the wider economy and volatile corn markets.
A conference call will be held today at 7:30am BST, hosted by Javed Ahmed, Chief Executive and Tim Lodge, Chief Financial Officer. Participants are requested to dial in at least 5 minutes before the commencement of the call. Dial in details are as follows:
Participant dial in number: +44 (0) 1452 555 566
Conference ID: 10160969
A replay of this call will be available from two hours after the end of the live call for 14 days until 8 August 2012
Replay dial in number: +44 (0) 1452 55 00 00
Replay passcode: 10160969#
 Continuing operations: before exceptional items and amortisation of intangible assets
 Between 15 June 2012 and 20 July 2012, the September 2012 US corn futures price increased from $5.09 per bushel to $8.24 per bushel, an increase of 62%. September 2012 US corn futures price on 25 July 2012 at 18.00 BST $7.95 per bushel
Tate & Lyle is a global provider of ingredients and solutions to the food, beverage and other industries, operating from over 30 production facilities around the world.
Tate & Lyle operates through two global business units, Speciality Food Ingredients and Bulk Ingredients, supported by Innovation and Commercial Development. The Group's strategy is to become the leading global provider of Speciality Food Ingredients through a disciplined focus on growth, and by driving the Bulk Ingredients business for sustained cash generation to fuel this growth.
Speciality Food Ingredients include starch-based speciality ingredients (corn-based speciality starches, sweeteners and fibres), no calorie sweeteners (including SPLENDA
Sucralose) and Food Systems which provides blended ingredient solutions. Bulk Ingredients include corn-based bulk sweeteners, industrial starches and fermentation products (primarily acidulants). The co-products from both divisions are primarily sold as animal feed.
Tate & Lyle is listed on the London Stock Exchange under the symbol TATE.L. American Depositary Receipts trade under TATYY. In the year to 31 March 2012, Tate & Lyle sales totalled £3.1 billion.