TIDMTATE
RNS Number : 8095T
Tate & Lyle PLC
23 July 2020
23 July 2020 - Tate & Lyle PLC
TRADING STATEMENT
Tate & Lyle issues the following trading statement for the
three months to 30 June 2020.
As anticipated in our trading update on 4 May 2020 and in our
full-year results statement on 21 May 2020, the Group's performance
in the first quarter reflected the impact of lockdowns on
out-of-home consumption in North America and Europe, partially
offset by resilience from in-home consumption. Having seen
fluctuating demand patterns in April and May, demand improved in
both divisions in June as lockdowns started to ease. The full
extent of the pandemic's impact still remains unclear.
Our response to Covid-19 has successfully focused on ensuring we
look after the health, safety and wellbeing of our colleagues,
their families and the local communities in which we operate; and
to work closely with our customers to play our part in supporting
the food supply chain with all our manufacturing facilities
remaining fully operational in the quarter.
Three months ended 30 June 2020 Volume change Revenue
growth*
-------------- ---------
Food & Beverage Solutions (2% ) +1%
---------
Sucralose (2%) (1%)
Primary Products (12%) (9% )
---------
Group (5% )
--------------------------------- -------------- ---------
* Growth in constant currency
Food & Beverage Solutions
Revenue was GBP232 million, 1% higher benefiting from good price
and mix management and 9% growth in New Products [1] revenue.
Volume was 2% lower as reduced demand for ingredients used in food
and drink consumed out-of-home (representing 15% to 25% of revenue)
outweighed stronger demand for packaged and shelf-stable foods for
consumption in-home.
In North America, revenue for the quarter was 2% lower due to
reduced demand for out-of-home consumption particularly in the food
service sector. North America returned to revenue growth in June as
lockdown restrictions eased. In Europe, Middle East and Africa
revenue was in line with the comparative period reflecting solid
demand for in-home consumption. In Asia Pacific and Latin America
revenue was 8% higher reflecting good revenue growth in Asia
Pacific as China emerged from lockdown, while in Latin America
revenue grew modestly, slowing as the quarter progressed and the
region went into lockdown.
Sucralose
Revenue was GBP39 million, 1% lower reflecting softer demand for
products consumed out-of-home, particularly beverages.
Primary Products
Revenue was GBP420 million, 9% lower. North American bulk
sweetener volume was 12% lower reflecting reduced out-of-home
consumption (representing around 30% of sweetener consumption) with
demand recovering sequentially during the quarter as some US states
began to ease lockdown restrictions. Industrial starch volume was
16% lower as the paper industry took actions to reduce capacity
temporarily with many schools and offices still closed.
Reducing costs and preserving cash
The financial impact of lower demand was partially mitigated by
actions taken to reduce costs including freezing salary increases
and recruitment and significantly reducing discretionary costs.
Procedures were also put in place to preserve cash through
re-prioritising capital commitments and a rigorous approach to
managing working capital. No employees have been furloughed and no
government aid has been sought.
Strong balance sheet
Our balance sheet is strong with net debt at 30 June 2020 of
GBP384 million, GBP67 million lower than at 31 March 2020
reflecting seasonal improvement and good cash management.
Nick Hampton, Chief Executive said:
"As expected, the first quarter presented many challenges and I
am very proud of the way we are navigating the impact of Covid-19.
We are encouraged by the improvement in demand we saw in June and
the continued strategic progress we are making, with new product
revenue growing 9% in the quarter. Our new business pipeline is
healthy, we continue to find creative ways to use technology to
support and connect with our customers, and all our manufacturing
facilities remain fully operational.
The fundamentals of our business are sound. Demand for
ingredients and solutions which enable consumers to enjoy healthier
and tastier food and drink is strong, and we have the portfolio of
products and technical expertise to help our customers deliver on
these trends.
Looking ahead, our priorities are clear - to look after our
people and communities, strengthen our relationships with
customers, continue to progress our strategy and maintain our
financial strength. I am confident that our future prospects remain
strong."
For more information contact Tate & Lyle PLC:
Christopher Marsh, VP, Investor Relations
Tel: Mobile: +44 (0) 7796 192 688
Nick Hasell, FTI Consulting (Media)
Tel: Mobile: +44 (0) 7825 523 383
About Tate & Lyle:
Tate & Lyle is a global provider of solutions and
ingredients for food, beverage and industrial markets.
Tate & Lyle operates through two global divisions, Food
& Beverage Solutions and Primary Products, supported by the
Innovation and Commercial Development and Global Operations teams.
Food & Beverage Solutions is focused on growth by building
leading positions globally in the categories of beverages, dairy,
and soups, sauces and dressings. Primary Products is focused on
delivering steady earnings and generating cash.
Food & Beverage Solutions consists of: Texturants, including
speciality starches; Sweeteners, including low- and no-calorie
sweeteners; and a Health and Wellness portfolio comprising mainly
speciality fibres; and Stabilisers and Functional Systems, which
are bespoke ingredient blends that ensure foods retain their
structure.
Primary Products consists of high-volume sweeteners, industrial
starches and fermentation products (primarily acidulants). It also
sells co-products from the corn milling process as animal
nutrition.
Tate & Lyle is listed on the London Stock Exchange under the
symbol TATE.L. American Depositary Receipts trade under TATYY. In
the year to 31 March 2020, Tate & Lyle revenue totalled GBP2.9
billion. For more information, please visit
http://www.tateandlyle.com or follow Tate & Lyle on Twitter or
LinkedIn.
[1] New Products are products launched in the last seven
years
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END
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