11 February 2016 – Tate & Lyle PLC
TRADING STATEMENT
Tate & Lyle issues the following trading statement for the three months ended 31 December 2015.
OPERATING PERFORMANCE – CONTINUING OPERATIONS
The Group remains on track to deliver full year guidance.
Speciality Food Ingredients performed steadily with volume ahead of the comparative period. Strong volume growth in Europe and Asia Pacific more than offset softer demand in North America and Latin America. In Food Systems, volume continued to grow and also benefited from the acquisition of Gemacom in December 2014, however margins declined as a result of the sharp increase in certain ingredient costs. SPLENDA® Sucralose volume was ahead of the comparative period although, as expected, pricing was lower year-on-year.
In Bulk Ingredients, North American sweetener volume in the quarter was slightly ahead of the comparative period. As previously communicated, the bulk sweetener pricing round will deliver modest margin gains in the fourth quarter. Commodities continue to have a material adverse impact on performance especially due to further weakness in the US ethanol market. As a result, we now expect a small loss from Commodities for the full year.
OUTLOOK
Our outlook for the full year remains unchanged. As previously communicated the Group’s adjusted profit before tax from continuing operations in constant currency and on an equity accounting basis is expected to be broadly in line with that of the 2015 financial year at £193 million[1]. At reported rates, adjusted profit before tax is expected to be modestly below this figure[2].
The longer term outlook for the business remains positive. In Speciality Food Ingredients we expect the market to grow at mid-single digits, and over time our objective is to grow modestly ahead of the market and to drive margin expansion, supported by increased utilisation of new capacity, growing revenues from new products, and a gradual return to growth in North America. While in the near term we expect weakness in commodity markets to persist, we will continue to target stable earnings from core Bulk Ingredients and to manage Commodities to dampen volatility.
END
A conference call will be held today at 8:00am GMT, hosted by Javed Ahmed, Chief Executive and Nick Hampton, Chief Financial Officer. Participants are requested to dial in at least 10 minutes before the commencement of the call. Dial in details are as follows:
Standard International Access: +44 (0) 20 3003 2666
Password: Tate & Lyle
UK replay number: +44 (0) 20 8196 1998
Replay access PIN: 6063715#
A replay of this call will be available after the end of the live call for 14 days until 25 February 2016.
[1] Guidance assumed foreign exchange rates of GBP: USD £1/US$1.54.
[2] Reflects the negative impact of non-US Dollar average exchange rates, principally the Mexican Peso and Brazilian Real.
