Tate & Lyle reports US$507.6M EBITDA boost from CP Kelco acquisition despite revenue decline
Tate & Lyle sees EBITDA growth driven by CP Kelco acquisition, even as global revenue declines amid pricing and cost pressures.
UK – Tate & Lyle has posted a 5% increase in adjusted EBITDA to £446 million (US$507.6M) for the fiscal year ending 31 March, largely supported by the acquisition of CP Kelco in November.
The newly acquired business contributed significantly to profitability, even as overall pro forma revenue declined by 3% to £2.124 billion (US$2.42B) due to input cost deflation and pricing adjustments.
The company’s core business revenue dropped 5% to £1.51 billion (US$1.72B), while CP Kelco delivered £612 million (US$696.6M) in revenue, marking a 3% increase. This performance was driven by 8% volume growth, although offset by a 5-percentage-point decline from pricing and product mix.
CP Kelco’s adjusted EBITDA rose 9% to £108 million (US$122.9M), and its margin improved by 100 basis points to 17.6%. Excluding CP Kelco, Tate & Lyle’s adjusted EBITDA increased 4% to £338 million (US$384.7M), with the group’s combined EBITDA margin rising by 170 basis points to 21%.
Chief Executive Nick Hampton highlighted the group’s alignment with long-term consumer trends, saying the business is now “right at the centre of the future of food,” focusing on healthier, tastier, and more sustainable offerings.
Profit before tax rose 7% to £263 million (US$299.3M), while statutory profit before tax from continuing operations stood at £88 million (US$100.16M).
The company also recorded £190 million (US$216.3M) in free cash flow, an increase of £20 million (US$22.8M) from the prior year, with a conversion rate of 82%, exceeding its long-term target of 75%.
However, net debt increased to £961 million (US$1.09B), mainly due to the CP Kelco acquisition, with a net debt to EBITDA ratio of 2.2x.
In the Food and Beverage Solutions segment, revenue fell 7% to £1.232 billion (US$1.4B). Though volume grew by 3%, pricing and mix declined by 10 percentage points. Adjusted EBITDA rose 2% in constant currency to £284 million (US$323.3M), with margin expansion of 200 basis points to 23.1%.
Sucralose revenue increased 16% to £193 million (US$219.7M), entirely driven by volume. Adjusted EBITDA for the segment rose 18% to £60 million (US$68.3M).
Conversely, Primary Products Europe revenue dropped 21% to £87 million (US$99M), with adjusted EBITDA recording a £6 million (US$6.8M) loss.
CP Kelco’s strong results included double-digit growth in gellan gum and increased pectin demand in North America and Europe, strengthening the group’s strategic direction.
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