REG - Tate & Lyle PLC - Integration update and pre-close statement

Tate & LyleAnnouncement

15/04/2025 07:02

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RNS Number : 9797E  Tate & Lyle PLC  15 April 2025

15 April 2025 - Tate & Lyle PLC: Integration update and Pre-close
statement

 

 Integration of CP Kelco on-track, Tate & Lyle operating as one combined
 business

 

Tate & Lyle issues the following update on the CP Kelco integration and a
pre-close statement for the year ended 31 March 2025 ahead of the announcement
of full-year results on 22 May 2025.

 

Headlines

·   Integration on-track, confident in synergy delivery, operating as one
combined business from 1 April 2025

·   Tate & Lyle performed as expected in Q4 with 2025 financial year
results to be in line with guidance

·   CP Kelco trading well and will deliver over 90bps increase in EBITDA
margin(1,2) in year to 31 March 2025

·   Strong free cash flow with Net debt to EBITDA expected to be 2.2x at 31
March 2025

·   Capital Markets event for investors and analysts to be held in the
first week of July 2025.

 

Nick Hampton, Chief Executive said

"Notwithstanding the uncertain macroeconomic environment, we are confident in
the medium-term growth potential of the business we have created and are
focused on delivering the benefits of the combination with CP Kelco and
accelerating topline growth.  Our confidence in the growth opportunity ahead
has been strengthened by the positive engagement we are seeing from customers
in both our expanded portfolio and capabilities.

 

In line with our normal practice, we will provide an update on the business
when we announce our full-year results on 22 May 2025."

 

Trading update

Tate & Lyle performed as expected in Q4 and for the year ended 31 March
2025 will be in line with guidance.  Excluding CP Kelco and in constant
currency, we expect revenue will be 5% lower and EBITDA will be 4% higher.

 

CP Kelco continues to trade well and will deliver an increase in EBITDA
margin(1,2) of over 90bps in the year ended 31 March 2025, ahead of our
acquisition plan.  This progress further reinforces our confidence in its
phased margin recovery.

 

CP Kelco integration

The integration is progressing well and as planned, with Tate & Lyle and
CP Kelco operating as one combined business from 1 April 2025.  We continue
to focus on three key areas to deliver the significant value we see from the
combination:

·   People:  The new organisation and leadership team are now established
and, from 1 April 2025, we have been operating under a new regional framework
‒ Americas; Asia Pacific; Europe, Middle East and Africa.

·   Performance:  We are confident in delivering the targeted run-rate cost
synergies of US$50 million by the end of the 2027 financial year, and for more
than 50% of these to be delivered by the end of the 2026 financial year.

·   Customers:  The transition to the combined business has been executed
well, and we are seeing positive engagement from customers to both our
expanded portfolio and capabilities, reinforcing our confidence in the
delivery of the identified revenue synergies of up to 10% of CP Kelco's
revenue over the medium-term.

Balance sheet

Cash generation remains strong with cash conversion(3) for the 2025 financial
year exceeding 75%, in line with our long-term ambition. Net debt to EBITDA at
31 March 2025 is expected to be 2.2 times, better than anticipated when we
acquired CP Kelco reflecting disciplined cash management and the momentum in
CP Kelco's margin recovery.

 

Capital Markets event

We will be hosting a Capital Markets event for investors and analysts on
Tuesday 1 July 2025 in London.

This will be followed by a site visit to our pectin facility and labs in Lille
Skensved, near Copenhagen on Thursday 3 July 2025.  To register your interest
for either, or both, of these days, please contact Lucy Huang at
lucy.huang@tateandlyle.com (mailto:lucy.huang@tateandlyle.com) .

 

---------------------------------------------------------------------------------

Notes

1.   Adjusted EBITDA margin is a non-GAAP measure, see definition of
non-GAAP measures on page 147 of the Tate & Lyle annual report for the
year ended 31 March 2024.

2.   Change in adjusted EBITDA margin is in constant currency and compares
to the restated adjusted EBITDA for the year ended 31 March 2024 of £100
million.  The restatement reflects the inclusion of incremental costs of
operating CP Kelco as a standalone business. The previously published CP Kelco
adjusted EBITDA for that year was £106 million which excluded all recharges
of operating costs from CP Kelco's previous owner.

3.   Cash conversion is free cash flow before capital expenditure divided by
adjusted EBITDA.

 

END

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 38 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) .

 

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