Half-year results for the six months to 30 September 2024
Key highlights
- Strong volume and profit growth, and cash delivery
- Encouraging return to volume growth with Group +6% and Food & Beverage Solutions +4%
- Adjusted EBITDA2 growth +6% and adjusted EBITDA margin2 +290bps
- Adjusted EPS2 +13% from strong profit performance and benefit from share buyback programme
- Free cash flow2 £127m, up £48m reflecting cash conversion of 94% and good working capital discipline
- Continued strategic progress on innovation, solution selling and investment to support customers
- New Product revenue +10% (like-for-like) with strong demand for fibres; +2% on reported basis
- Solutions new business wins by value at 22% of pipeline, +1ppt from 31 March 2024
- New partnership with Manus for bio-converted stevia sourced and produced at scale in the Americas
- Sale of Primient completed transformation to speciality food and beverage solutions business
- Net cash proceeds of £215m being returned to shareholders through share buyback programme
- Significant acceleration in delivery of growth-focused strategy through combination with CP Kelco
- Regulatory approvals received and completion expected in the next few days
- Creates a leader in Mouthfeel, a critical driver of customer solutions
- Strengthens expertise and leading positions across Sweetening and Fortification platforms
- Integration plans in place focused on customers, people and performance
- Good progress on science-based climate targets aligned to 1.5oC trajectory
- New renewable energy agreements cover all the electricity purchased by manufacturing operations globally
Financial headlines
- Positive volume momentum +6% with Food & Beverage Solutions +4% and Sucralose +20%
- Revenue (7)% with Food & Beverage Solutions (8)% due to pass through of input cost deflation weighted to H1
- Adjusted EBITDA2 +6%, with Food & Beverage Solutions2 +3% and Sucralose +23%
- Further productivity savings of US$27m during H1
- Adjusted profit after tax2 +11%, statutory profit after tax (continuing ops) (26)% reflecting increased M&A costs
- Profit after tax from discontinued operations of £95m, includes post-tax gain on Primient disposal of £85m
- Return on capital employed1 improved by 150bps to 18.5%
- Interim dividend +0.2p to 6.4p per share; one third of prior year full-year dividend, in line with policy
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1. Revenue growth, adjusted EBITDA and adjusted EBITDA margin, share of adjusted profit of Primient, adjusted earnings per share, free cash flow, return on capital employed (ROCE), net debt and net debt to EBITDA are non-GAAP measures (see pages 10 to 13). Changes in adjusted performance metrics are in constant currency and for continuing operations.
2. Comparative restated to exclude other M&A costs of £(2) million.
Nick Hampton, Chief Executive said:
“It has been a momentous six months for Tate & Lyle. The combination with CP Kelco, preceded by the sale of Primient, transforms our business into a fully-focused speciality food and beverage solutions business directly aligned to attractive structural and growing consumer trends for healthier, tastier and more sustainable food and drink.
The business has continued to perform well delivering a return to volume growth, continued strong profit growth and excellent cash generation. New Product revenue from our innovation pipeline and solutions new business wins both increased, and we announced an important new partnership for all-Americas sourced and manufactured stevia at scale. CP Kelco performed as expected delivering strong volume growth and higher revenue, underpinning our confidence in a phased recovery in its profitability over time.
Since the announcement of our combination with CP Kelco in June, we have seen a very positive response from our customers who recognise the much broader innovation and solutions capabilities we will offer. A joint team has developed a comprehensive integration plan which is focused on three priorities – serving our customers, clarity for our people and delivering performance.
The combination with CP Kelco will significantly strengthen Tate & Lyle’s position at the centre of the future of food. Our combined business, with its leading positions across sweetening, mouthfeel and fortification, deep scientific and solutions expertise, and unrelenting focus on the customer, creates a strong platform from which to accelerate delivery of our growth-focused strategy and create long-term value for shareholders.”
Tate & Lyle standalone
Our outlook remains unchanged. For the year ending 31 March 2025, we expect to deliver in constant currency:
- Revenue slightly lower than the prior year
- EBITDA growth of between 4% and 7%.
For more information contact Tate & Lyle PLC:
Christopher Marsh, VP Investor Relations
Tel: Mobile: +44 (0) 7796 192 688
Nick Hasell, FTI Consulting (Media)
Tel: Mobile: +44 (0) 7825 523 383
Tel: Office: +44 (0) 203 727 1340
tate@fticonsulting.com
