What Tate & Lyle (TATE) Said on Its H1 Earnings Call

Key Points

• Revenue returned to volume-led growth, but profitability declined: First-half revenue rose 1% and underlying volume mix increased 4%, while adjusted EBITDA fell 8% to £197 million and adjusted profit before tax declined 18%, pressured by pricing and higher costs.
• Regional results were mixed: Asia Pacific revenue rose 7% and the Americas gained 1%, but EMEA revenue fell 4% and EBITDA dropped 28% amid weaker bulk sweeteners and co-products, pricing pressure and inflation. Fiber products were a growth bright spot, with polydextrose revenue up 29% in the Americas.
• Full-year outlook and Ingredion deal remain on track: Tate & Lyle expects modest revenue growth and broadly flat EBITDA before a $20 million rescheduling impact, and says the sale to Ingredion is progressing toward a close in the second half of 2027.

Tate & Lyle LON: TATE reported a return to volume-led revenue growth in its first half and maintained its full-year outlook, even as a prolonged conflict in the Middle East added to cost pressures, particularly in Europe.

Revenue rose 1% and volume mix increased 3%, Chief Executive Nick Hampton said on the company’s half-year results call. Excluding bulk sweeteners and co-products in Europe and tariff reimbursements in the U.S., revenue grew 2% and volume mix rose 4%. Profit was in line with the company’s expectations, he said.

Strong top-line momentum in Asia Pacific and a robust performance in the Americas helped offset a more challenging environment in Europe, the Middle East and Africa. The company generated £100 million in free cash flow, with cash conversion of 75%, matching its long-term target. Its interim dividend increased by 0.2 pence to 6.8 pence.

Inflation and customer contracts

Hampton said the Middle East conflict had lasted longer than Tate & Lyle anticipated at the start of the year. The company plans to seek to pass cost inflation through to customers as it renews framework agreements for calendar 2027, while also pursuing procurement and operational measures to offset costs.

He declined to quantify the prospective pricing increases, citing volatile conditions and commercial sensitivity. Contract negotiations were at an early stage and could take place later than usual because of that volatility, he said.

“Conversations are going to be challenging as we go into the next round,” Hampton said, adding that customers understood the inflationary pressures and that the company had managed similar situations in the past.

Chief Financial Officer Sarah Kuijlaars said the first-half return to volume-led revenue growth and an expanding customer pipeline positioned the company for the second half. She said there was not a significant step up between the first and second halves in absolute terms, while navigating the start of calendar 2027 would influence the full-year outcome.

Regional demand and innovation

Hampton described growth in Asia Pacific as broad-based, although China was more challenging than the regional average. Tate & Lyle was still seeing underlying growth in China, including through expansion into food service, and encouraging momentum in India, he said.

In the Americas, the company grew volume and revenue despite the North American consumer environment, while Latin America delivered a solid performance, Hampton said. Europe remained more competitive, with affordability under pressure. The company made price concessions there to drive growth, he said.

Hampton said growth in Europe and the U.S. was being driven more by customer innovation than by consumers at present. He pointed to demand for products addressing affordability, health and wellness, and clean-label trends. The proportion of new business wins from solutions rose by 15 percentage points to 58%, he said.

Fiber products were a smaller part of the portfolio but were growing rapidly, Hampton said. He expects that growth to continue over the next 12 to 18 months, citing demand for soluble fibers and work with U.K. brand McVitie’s on additional projects.

Ingredion sale and bio-gums project

The proposed sale of Tate & Lyle to Ingredion, announced in June, remains on track for completion in the second half of calendar 2027, Hampton said. The company has received written or verbal approval in six jurisdictions: Brazil, China, the U.K., South Korea, Tanzania and Zanzibar.

Six approvals remain outstanding, comprising merger controls in Canada, Colombia, Mexico and the U.S., along with merger control and Foreign Subsidies Regulation approvals in the European Union. Hampton said the remaining filings were progressing as anticipated.

Separately, Kuijlaars said the company’s bio-gum consolidation project was proceeding as anticipated and remained on track. She said Tate & Lyle would provide a further update next year.

About Tate & Lyle (LON:TATE)

Tate & Lyle PLC, together with its subsidiaries, provides ingredients and solutions to the food, beverage, and other industries in the United States, the United Kingdom, other European countries, and internationally. It operates through three segments: Food & Beverage Solutions, Sucralose, and Primary Products. The company offers dairy products, soups, sauces, and dressings; bakery products and snacks; texturants; nutritive sweeteners, such as high fructose corn syrup and dextrose; fibres; and stabilizers and functional systems.

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