Tate & Lyle delivers six-month results, with North American slowdown impacting performance

First half financial results for Tate & Lyle ingredients revealed continued market challenges, as its registered revenues down 3%, to £1.01 billion, attributed to weakened US demand, writes Neill Barston.

The company, which has enjoyed strong success with product solutions for the global confectionery and snacks, noted that it has accelerated targeted actions to boost its performance, including delivering a greater range of healthier options.

In addition, the business noted there had been particular value in cross-selling within the overall industry, though its EBIDTA figures of £215 year-on-year were down 6%, underlining market challenges. Profits before tax were put at £126 million, down 10% for the group.

The Americas remains its largest market, registering revenues of £512 million, followed by Europe and the Middle East, put at £319m sales in its half-year financial results. 

As previously reported by Confectionery Production, the introduction of tariffs in the US has had a markedly negative impact on companies performance in the region, with businesses effectively facing fresh import taxes that they had not previously faced for a considerable period under former free-market trading arrangements. 

In its assessment of the first half of the year, Tate & Lyle noted the CP Kelco, a specialist in pectic, gums and other natural ingredients as being especially strategically important to the company’s future development.

Nick Hampton, Chief Executive, Tate & Lyle, commented on the company’s latest results.

He said: “Over the last six months we have made strong progress driving the benefits of the CP Kelco combination and setting the business up for future growth. Customer engagement is high, we are tracking ahead of our planned revenue and cost synergies, and the fundamental growth drivers of our business remain strong.

“Despite this encouraging progress, performance in the first six months of the year has been disappointing, impacted by softer than expected market demand, notably in North America. As a result, we are accelerating a series of targeted actions to drive top-line growth and improve performance.”

“With our growing pipeline of new business opportunities, the power of the combination is clear. Our leading positions across sweetening, mouthfeel and fortification provide a unique platform to provide our customers with the solutions they need to meet growing consumer demand for healthier, more nutritious and sustainable food and drink. Our focus is on execution, delivering for our customers and growth.”