Sweeteners group Tate & Lyle issues confident trading update despite coronavirus disruption
Global sweeteners and industry solutions group Tate & Lyle has issued a trading update that it expects its annual results due later this month to exceed last year’s performance, despite the coronavirus pandemic.
As the company, which produces a considerable volume of products for the confectionery and bakery sector, noted, trading in March showed limited impact from the emergence of Covid-19, yet the lockdowns in place in many countries across the world throughout April, most notably in its largest markets of the US and Europe, have led to some significant changes in demand patterns for our products.
In a statement, the company said: “Our priorities continue to be the health, safety and wellbeing of our colleagues, their families and the local communities where we operate, and to serve our customers in these difficult times. Strict hygiene and protective measures are in place across our business, we are working closely with our customers to respond quickly to their changing needs and all our manufacturing facilities have remained fully operational during the pandemic.”
The business, which will release its full results on 21 May, said its Food & Beverage Solutions and Sucralose continued to perform well with volume for Food & Beverage Solutions in line with the comparative period and Sucralose 18% higher due to phasing of customer orders. Earlier in April, demand was strong for ingredients used in packaged and shelf-stable foods as consumers in North America and Europe filled their pantries for consumption at home. As the month progressed, this was offset by lower demand for products consumed out-of-home, such as in the food service sector in North America.
Primary Products volume was significantly impacted by the first full month of lockdown in the US. Bulk sweetener volume was 26% lower from reduced out-of-home consumption as bars, cinemas, restaurants and sporting events were either shut or cancelled. Industrial starch volume was 9% lower reflecting reduced demand for paper and packaging following the closure of schools, offices and a general decline in economic activity. Commodities were also impacted as ethanol prices decreased sharply.
The financial impact of lower demand was partially mitigated by prompt actions taken in March to optimise cash and reduce costs as we saw the pandemic unfolding. These included freezing salary increases and recruitment, stopping non-essential discretionary spend and reprioritising capital commitments.
Nick Hampton, Chief Executive of Tate & Lyle commented: “I am delighted with our performance over the last financial year and the progress we are making executing our strategy and living our purpose.
“I am also very proud of the way we have responded to the unprecedented challenges of Covid-19. From the outset of the pandemic, our priority has been to look after our employees and local communities, keep our operations running and support our customers. The fact that all our manufacturing facilities have remained fully operational during the pandemic and customer orders have continued to be fulfilled, often at very short notice, is a testament to the commitment and skill of all our employees.
Tate & Lyle is a resilient business that meets challenges head-on. I am confident that with the strength of our portfolio, people and operating capabilities we will navigate this period successfully and that our future prospects remain strong.”