Despite challenges within its food and beverage solutions sector, Tate & Lyle has managed to achieve a slight profit increase for the first half of the year.
In the six months leading up to 30 September 2024, Tate & Lyle reported a 6% rise in EBITDA, amounting to £188 million. Profits from its food and beverage solutions saw a 3% increase, reaching £157 million. However, overall group sales declined by 7%, landing at £775 million, with the food and beverage solutions segment experiencing an 8% drop, now standing at £631 million. This decline was partly mitigated by a strong performance in the sucralose sector, which witnessed a 17% surge in sales, totalling £99 million.
In Europe, sales figures were particularly affected, declining by 23% to £130 million. According to Tate & Lyle, this was due to significant input cost deflation and strategic pricing adjustments. Meanwhile, sales volumes across Europe remained stable compared to the previous year. The company noted increased demand in beverages, soups, sauces, and dressings, which helped balance out the weakened demand observed in infant nutrition.
Despite the sales downturn, the company continues to focus on innovation within the food and beverage solutions segment, which contributes to 17% of this division’s sales. Tate & Lyle anticipates that volume growth will accelerate as the year progresses and input costs stabilise. The firm expects that the impact of input cost deflation will lessen in the second half of the year.
Tate & Lyle has maintained its full-year outlook, anticipating slightly lower sales compared to the prior year but projecting a profit growth range of 4% to 7%. Nick Hampton, the Chief Executive of Tate & Lyle, stated, ‘It has been a momentous six months for Tate & Lyle. The business has continued to perform well delivering a return to volume growth, continued strong profit growth and excellent cash generation.’
Furthermore, the company’s strategic move in June to acquire US-based CP Kelco for £1.4 billion has been well-received by clients, enhancing their innovative capacities and solutions. This acquisition is expected to bolster Tate & Lyle’s position in the food industry and align with its future objectives. Hampton emphasised the importance of this integration, stating that a comprehensive plan has been developed to focus on customer service, employee clarity, and performance delivery.
Overall, Tate & Lyle has demonstrated resilience in the face of challenging market conditions, with strategic acquisitions and focus on innovation poised to support future growth.
