Global ingredients company Tate & Lyle has reported strong financial and operational performance for the first half of the year, underscored by rising volumes, improved profit margins, and robust cash delivery. The company’s transformation into a specialized food and beverage solutions provider is now firmly on track, marked by key strategic moves, innovative partnerships, and a major merger with CP Kelco.

Tate & Lyle delivered a 6% increase in overall volume, driven by a 4% rise in Food & Beverage Solutions and an impressive 20% growth in Sucralose. Adjusted EBITDA rose by 6%, with margins improving by 290 basis points. This growth was complemented by a 13% surge in adjusted earnings per share, partially due to the company’s share buyback program. Free cash flow reached £127 million, up £48 million from last year, with a conversion rate of 94%, attributed to disciplined management of working capital.

Strategic advancements in innovation and customer solutions

The company’s focus on innovation has yielded significant results. Revenue from new products grew by 10% (like-for-like), spurred by strong demand for fiber-based solutions. Tate & Lyle also reported that new business wins now represent 22% of its sales pipeline, a 1-point increase from earlier this year. Furthermore, a new partnership with Manus for bio-converted stevia will allow Tate & Lyle to scale production of this natural sweetener across the Americas, a move expected to bolster its portfolio in the health-focused sweetening market.

Completion of primient sale and the CP Kelco merger

The sale of Tate & Lyle’s stake in Primient marks a critical step in its transformation into a dedicated food and beverage solutions business. Net proceeds of £215 million from the sale will be returned to shareholders through an ongoing share buyback initiative.

In addition, Tate & Lyle is set to complete its merger with CP Kelco in the coming days, following regulatory approvals. The merger will position Tate & Lyle as a market leader in the mouthfeel segment, enhancing its expertise in the sweetening and fortification sectors. Integration plans are already underway, with a joint team focusing on customer support, workforce alignment, and performance metrics. The combined capabilities of Tate & Lyle and CP Kelco are expected to drive growth and increase value for shareholders over the long term.

Tate & Lyle has made strides in aligning with science-based climate targets, aimed at limiting global warming to 1.5°C. New renewable energy agreements now cover all electricity consumed by the company’s manufacturing operations worldwide, underscoring its commitment to sustainable practices.

Financial overview

The financial results reflect positive momentum across key areas. Adjusted profit after tax rose 11%, and Tate & Lyle reported an interim dividend of 6.4p per share, marking an increase consistent with its policy. The company also achieved productivity savings of $27 million during the first half of the year.

Nick Hampton, CEO of Tate & Lyle, remarked, “It has been a momentous six months for Tate & Lyle. Our merger with CP Kelco, alongside the successful sale of Primient, has transformed us into a fully-focused food and beverage solutions business aligned with the consumer trends for healthier, tastier, and more sustainable food and drink.”

Hampton also highlighted the positive response from customers, noting that the expanded innovation and solutions capabilities from the CP Kelco merger will further support growth in key areas like mouthfeel, sweetening, and fortification. “With our combined business, we are poised to accelerate our growth strategy and create long-term value for shareholders.”

As Tate & Lyle enters the next phase of its growth journey, the company’s strengthened market position, commitment to innovation, and sustainability-driven goals have positioned it as a key player in the future of food and beverage solutions.

Editorial contact:
Editor: Kiran Grewal kgrewal@kennedys.co.uk