Tate & Lyle Q1 Performance in Line With Expectations, Outlook Unchanged

24 July 2013 --- Tate & Lyle PLC has reported in an Interim Management Statement that adjusted operating profit for the Group for the first quarter was in line with expectations. As expected, the unusually cold spring and slow start to the summer in the US resulted in volume softness within the beverage sector, mainly impacting Bulk Ingredients.

In Speciality Food Ingredients, volumes and sales grew ahead of the wider speciality food ingredients market. “We experienced strong volume growth in Europe and emerging markets although this was partially offset by a softer performance in the US, where lower than expected sweetener sales resulted in slightly lower margins,” the company reported.

In Bulk Ingredients, as expected, “we experienced somewhat lower volumes in US bulk liquid sweeteners, although this was offset primarily by a stronger performance from EU bulk liquid sweeteners, where high sugar prices and lower corn costs resulted in higher margins than expected.”

In the last two months, the company announced two initiatives to develop its Speciality Food Ingredients business.

On 16 July 2013, Tate & Lyle announced the formation of a food systems joint venture, Tate & Lyle Howbetter, through the acquisition of a 51% equity interest in Jiangsu Howbetter Food Co., Ltd, a leading food systems business in China. “The creation of Tate & Lyle Howbetter will provide us with a solid platform on which to accelerate the growth of our Food Systems business in China. The transaction is subject to governmental approval which is expected in the autumn,” the company reported.

“In May 2013, we acquired Biovelop, an early-stage manufacturer of oat beta-glucan, which broadens our health and wellness offering and adds a clean-label, speciality fibre with strong health claims to our existing corn-based fibre portfolio.”

In May 2013, the on-sale of Orsan China (a monosodium glutamate producer in which Tate & Lyle previously held a stake and which was sold in 2009) resulted in a one-off operating gain of £3.5 million.

The Group’s financial position strengthened during the period. Net debt of £426 million at 30 June 2013 has reduced from £479 million at 31 March 2013.

The outlook for the year remains unchanged and the company continues to expect to deliver another year of profitable growth.