Tate & Lyle reports a steady rise in profits despite a decrease in sales within its food and beverage sector.
- The company’s EBITDA saw a 6% increase to £188m, while food and beverage profits rose by 3% to £157m.
- Overall group sales dropped by 7% to £775m, with the food and beverage sector experiencing an 8% decline to £631m.
- An exceptionally strong performance in Sucralose helped offset some sales losses, with a 17% increase in sales to £99m.
- Tate & Lyle continues to focus on innovation and expects to see volume growth as input costs stabilise.
Tate & Lyle, a notable presence in the ingredients industry, has demonstrated resilience amidst challenging market conditions. The company reported a 6% growth in EBITDA to £188 million in the first half of the year, ending September 30, 2024. However, it faced a 7% decline in overall group sales, amounting to £775 million, with its food and beverage solutions sector experiencing an 8% dip in sales to £631 million.
In Europe, sales declined by 23% to £130 million, a reflection of significant input cost deflation and strategic price investments. Despite these challenges, demand remained robust in certain categories, particularly beverages, soups, sauces, and dressings. Yet, the infant nutrition segment saw a decrease in demand.
One area of notable success was the Sucralose business, which saw a significant sales increase of 17%, reaching £99 million. This robust performance played a key role in mitigating the declines experienced in other areas.
Throughout the operational downturn in sales, Tate & Lyle has maintained a strong emphasis on driving innovation, which contributed to 17% of sales within the food and beverage division. This focus on innovation, alongside stabilising input costs, has the company optimistic about recovering volume growth in the coming months.
Chief Executive Nick Hampton described the period as ‘momentous’ for the firm. He highlighted the return to volume growth and continued profit strength, alongside robust cash generation, as significant achievements. Following its acquisition of CP Kelco, the company anticipates further strengthening of its market position, with a comprehensive integration plan focusing on customer service, employee clarity, and performance.
The strategic £1.4 billion agreement to purchase CP Kelco was met with positive responses from customers, recognising the expanded innovation and solutions capabilities this merger brings to the table. Tate & Lyle expects stable input costs to facilitate profit growth between 4% and 7% going forward, despite projecting slightly lower annual sales compared to the previous year.
Tate & Lyle remains confident in its strategy to bolster growth through innovations and strategic acquisitions.
