REG - Tate & Lyle PLC - Trading Statement

Tate & LyleAnnouncement

13/02/2025 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250213:nRSM9087Wa&default-theme=true

RNS Number : 9087W  Tate & Lyle PLC  13 February 2025

13 February 2025 - Tate & Lyle PLC

 

TRADING STATEMENT

 

Tate & Lyle issues the following trading statement for the three months
ended 31 December 2024.

 

   Solid operating performance; CP Kelco acquisition completed, integration
   progressing well

 

 

 

 

 

Overview

Tate & Lyle delivered another quarter of solid operating performance, with
volume and EBITDA growth and continued strong cash delivery.  The acquisition
of CP Kelco completed in November.

 

Trading

Volume in Food & Beverage Solutions was 4% higher, with growth in each
region.  Revenue was 4% lower primarily reflecting the pass through of input
cost deflation.  Sucralose performed strongly, benefiting from the continued
impact of the pull-forward of customer orders which we expect will partly
unwind in the fourth quarter.

 

We delivered further productivity savings during the quarter, with good
progress against our five-year US$150 million productivity target.

 

CP Kelco performed in line with our expectations, delivering strong volume
growth in the 2024 calendar year as well as delivering the anticipated
progress on the phased margin recovery outlined at the time of the
acquisition.  The integration of CP Kelco, focused on our three priorities of
'customers, people and performance', is progressing to plan.  The progress
to-date reinforces our confidence in delivering the targeted run-rate cost
synergies of US$50 million by the end of the 2027 financial year, as well as
the identified revenue synergies over the medium term.  We will operate as
one business from 1 April 2025.

 

In line with the normal cycle of our industry, during the quarter we renewed
contracts for the 2025 calendar year for those customers who contract
annually.  While market demand remains broadly stable, we have not yet seen
the acceleration in demand we expected in the second half of the 2025
financial year.  Against this background, continued geopolitical
uncertainties and some pricing pressure, we renewed contracts for both Tate
& Lyle and CP Kelco which are expected to deliver volume and revenue
growth in the 2025 calendar year.

 

Balance sheet

Cash generation remained strong, with cash conversion consistent with our
long-term ambition.

 

On 9 January 2025 we completed our £215 million on-market share buyback
programme to return the net proceeds from the sale of our remaining interest
in Primient to shareholders.

 

On 23 January 2025 we successfully priced a multi-tranche debt offering of
US$300 million and €275 million in the private placement market.  The
proceeds will be used to refinance the bridge facility entered into at the
completion of the acquisition of CP Kelco and for general corporate purposes.

 

Outlook

For the year ending 31 March 2025, excluding CP Kelco and in constant
currency, we now expect revenue to be mid-single digit percent lower and for
EBITDA growth to be towards the lower end of our guidance range of 4% to 7%.

Financial results

                                                 3 months to                      9 months to

31 December 2024
31 December 2024
                                                 Revenue    Revenue Change(1      Revenue    Revenue Change(1)

          ) %

                                                 £m                               £m         %
 Food & Beverage Solutions                       296        (4)%                  927        (7)%
 Sucralose                                       41         19%                   140        18%
 Primary Products Europe                         20         (24)%                 66         (24)%
 Total before CP Kelco                           357        (4)%                  1 132      (6)%
 CP Kelco (from completion on 15 November 2024)  66         n/a                   66         n/a
 Group                                           423        14%                   1 198      (0)%

1     In constant currency.

 

 

Nick Hampton, Chief Executive, said:

"This was another quarter of good volume and EBITDA performance.  Each region
delivered volume growth, and we saw strong productivity and cash delivery.
 The muted consumer demand environment and ongoing geopolitical uncertainties
reinforce the importance of the steps we have taken to reposition Tate &
Lyle over the last six years.  In this environment, we remain focused on
delivering profitable volume growth through stronger solutions-based
relationships with customers, delivering productivity savings and strong cash
flow.

 

We also made excellent strategic progress in the quarter with the completion
of the acquisition of CP Kelco, a leading global pectin and speciality gums
business.  This acquisition represents a significant acceleration in the
delivery of our growth-focused strategy and establishes Tate & Lyle as a
leader in Mouthfeel, while strengthening expertise across our Sweetening and
Fortification platforms.  Mouthfeel is a critical driver of customer
solutions, and we are encouraged by the positive response of customers to the
benefits of our expanded portfolio and solutions capabilities.

 

I want to recognise colleagues across Tate & Lyle and CP Kelco for their
unrelenting focus on bringing our two great businesses together.  This
combination significantly strengthens our customer offering, expands our
reformulation capabilities, and further increases our ability to benefit from
structural long-term trends towards healthier, tastier and more sustainable
food and drink."

 

 

END

 

Conference call

The third quarter conference call will be held today at 10.00am GMT hosted by
Nick Hampton, Chief Executive and Sarah Kuijlaars, Chief Financial Officer.
Participants are requested to dial in at least 10 minutes before the start of
the call.  Dial in details are as follows:

 

UK dial in number:  +44 (0)33 0551 0200

UK toll free number: 0808 109 0700

US dial in number: +1 786 697 3501

US toll free number: +1 866 580 3963

Password: Tate & Lyle

14 day conference call replay:

UK replay number:  +44 (0)20 8196 1480

UK toll free replay number: 0800 640 6344

US toll free replay number: +1 866 583 1035

Access pin: 7481245#

 

For more information contact Tate & Lyle PLC:

Christopher Marsh, VP, Investor Relations

Mobile: +44 (0)7796 192 688

 

Nick Hasell (FTI Consulting), Media Relations

Mobile: +44 (0)7825 523 383

 

About Tate & Lyle:

 

Supported by our 165-year history of ingredient innovation, we partner with
customers to provide consumers with healthier and tastier choices when they
eat and drink. We are proud that millions of people around the world consume
products containing our ingredients and solutions every day.

 

Through our leading expertise in sweetening, mouthfeel and fortification, we
develop ingredients and solutions which reduce sugar, calories and fat, add
fibre and protein, and provide texture and stability to food and drink in
categories including beverages, dairy, bakery, snacks, soups, sauces, and
dressings.

 

Tate & Lyle recently acquired CP Kelco, a leading provider of pectin,
speciality gums and other nature-based ingredients to create a leader in
mouthfeel, significantly enhancing our solutions capabilities. Following this
combination, we now have more than 5,000 employees working in around 75
locations in 39 countries, serving customers in more than 120 countries.
Science, Solutions, Society is our brand promise and how we will achieve our
purpose of Transforming Lives through the Science of Food. By living our
purpose, we believe we can successfully grow our business and have a positive
impact on society. We live our purpose in three ways, by supporting healthy
living, building thriving communities and caring for our planet.

 

Tate & Lyle is listed on the London Stock Exchange under the symbol
TATE.L. American Depositary Receipts trade under TATYY. For the year ended 31
March 2024, and on a pro forma basis which assumes for illustrative purposes
that the combination with CP Kelco took place on 1 April 2023, revenue for the
enlarged Tate & Lyle Group would have been £2.25 billion. For more
information, please visit https://www.tateandlyle.com
(https://www.tateandlyle.com) or follow Tate & Lyle on X, Linkedin
(https://www.linkedin.com/company/tate-&-lyle) , Facebook
(https://www.facebook.com/TateandLyleCommunity) or YouTube
(https://www.youtube.com/c/TateLylePLC) .

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTPKBBPABKDDBD