Tate & Lyle sees revenues, volumes rise in continuing operations
LONDON — After completing a transaction April 1, Tate & Lyle PLC now has two…
LONDON — After completing a transaction April 1, Tate & Lyle PLC now has two continuing operations: Food and Beverage Solutions and Sucralose. Both operations turned in revenue growth of double-digit percentages for the fiscal year ended March 31.
In Food and Beverage Solutions, volume was up 5% when compared with the previous fiscal year. Revenues increased 19% to £1.21 billion ($1.51 billion). In-home consumption remained robust while out-of-home consumption continued to recover, according to Tate & Lyle. The Food and Beverage Solutions segment seeks to help customers reduce sugar, calories and fat in their products while adding fiber.
Within Food and Beverage Solutions, revenue for new products rose 35% in the fiscal year and now represents 14% of the segment. Tate & Lyle expects that percentage to grow to about 20% by the fiscal year ended March 31, 2027.
“During the year, 10 new products and more than 30 stevia sweetener solutions were launched from our pipeline,” said Nick Hampton, chief executive officer, in a June 9 presentation. “Revenue from new products grew by 35% in the year and by a compound annual growth rate of 24% over the last two years. Growth was led by the sweetener platform, which nearly doubled revenue as customers’ demand for stevia-based solutions increased, and the mouthfeel platform, which grew revenue by 19% as consumers continue to look for products with cleaner labels.”
In Sucralose, volume was up 15% while revenue increased 13% to £163 ($204) million.
“This reflected higher demand in beverages as out-of-home consumption recovered,” said Dawn Amanda Allen, chief financial officer. “We also optimized production at our facility in Alabama. This unlocked both higher volume and productivity-related cost-savings.”
Tate & Lyle on April 1 completed the sale of a controlling stake in a new company comprising its Primary Products business in North America and Latin America and its interests in Almidones Mexicanos SA de CV and DuPont Tate & Lyle Bio-Products Co., LLC joint ventures to KPS Capital Partners LP. Tate & Lyle holds a 49.9% interest in the new company, called Primient, while KPS holds a 50.1% interest.
Mr. Hampton on June 9 said, “This transaction creates two strong businesses, each well positioned to realize their potential: Tate & Lyle as a global food and beverage solutions business focused on higher-growth markets and a new joint venture called Primient as a leading plant-based business serving food and industrial markets.”
London-based Tate & Lyle in the fiscal year managed supply chain disruption, COVID-19 restrictions, cost inflation and uncertainty related to the conflict in Ukraine.
“In continuing operations, we saw cost inflation of £100 million during the year,” Ms. Allen said. “This came from different sources, including energy, labor and consumables as well as transportation and supply chain.
“We offset this inflation through a combination of pricing, productivity, cost discipline and broader volume/mix improvements. Of these, pricing was the most important part. We passed through price increases in 2022 calendar year contracts, where our aim was to at least maintain absolute unit margin. Since then, we have seen further cost inflation, which we are addressing through supplementary pricing.”