TIDMTATE
RNS Number : 7367L
Tate & Lyle PLC
04 May 2020
4 May 2020 - Tate & Lyle PLC
TATE & LYLE TRADING UPDATE FOR APRIL IN RELATION TO
COVID-19
Introduction
Tate & Lyle will issue its results for the year ended 31
March 2020 on 21 May 2020. The Group performed well during the year
with each trading division exceeding the prior year's performance.
Accordingly, we expect to announce results slightly ahead of our
guidance coming into the year.
While trading in March showed limited impact from the Covid-19
pandemic, the lockdowns in place in many countries across the world
throughout April, most notably in our largest markets of the US and
Europe, have led to some significant changes in demand patterns for
our products. This statement provides an update on trading in April
based on the information currently available and the actions we are
taking.
Our priorities continue to be the health, safety and wellbeing
of our colleagues, their families and the local communities where
we operate, and to serve our customers in these difficult times.
Strict hygiene and protective measures are in place across our
business, we are working closely with our customers to respond
quickly to their changing needs and all our manufacturing
facilities have remained fully operational during the pandemic.
Trading in April 2020
Food & Beverage Solutions and Sucralose continued to perform
well with volume for Food & Beverage Solutions in line with the
comparative period and Sucralose 18% higher due to phasing of
customer orders. Earlier in the month, demand was strong for
ingredients used in packaged and shelf-stable foods as consumers in
North America and Europe filled their pantries for consumption at
home. As the month progressed, this was offset by lower demand for
products consumed out-of-home, such as in the food service sector
in North America.
Primary Products volume was significantly impacted by the first
full month of lockdown in the US. Bulk sweetener volume was 26%
lower from reduced out-of-home consumption as bars, cinemas,
restaurants and sporting events were either shut or cancelled.
Industrial starch volume was 9% lower reflecting reduced demand for
paper and packaging following the closure of schools, offices and a
general decline in economic activity. Commodities were also
impacted as ethanol prices decreased sharply.
The financial impact of lower demand was partially mitigated by
prompt actions taken in March to optimise cash and reduce costs as
we saw the pandemic unfolding. These included freezing salary
increases and recruitment, stopping non-essential discretionary
spend and reprioritising capital commitments.
We will provide more information when we announce our full-year
results on 21 May 2020 and going forward as necessary.
Strong balance sheet
We continue to have a strong financial position and balance
sheet. Our leverage is low with net debt / EBITDA of 0.9x at 31
March 2020 (0.6x on a covenant basis) and strong liquidity with
access to over US$1 billion through cash on hand and a revolving
credit facility. We also have significant covenant headroom on
borrowings (covenant: net debt / EBITDA not greater than 3.5x) and
no debt maturity until 2023.
Nick Hampton, Chief Executive of Tate & Lyle said:
"I am delighted with our performance over the last financial
year and the progress we are making executing our strategy and
living our purpose.
I am also very proud of the way we have responded to the
unprecedented challenges of Covid-19. From the outset of the
pandemic, our priority has been to look after our employees and
local communities, keep our operations running and support our
customers. The fact that all our manufacturing facilities have
remained fully operational during the pandemic and customer orders
have continued to be fulfilled, often at very short notice, is a
testament to the commitment and skill of all our employees.
Tate & Lyle is a resilient business that meets challenges
head-on. I am confident that with the strength of our portfolio,
people and operating capabilities we will navigate this period
successfully and that our future prospects remain strong."
END
For more information contact Tate & Lyle PLC:
Christopher Marsh, VP, Investor Relations
Tel: Mobile: +44 (0) 7796 192 688
Andrew Lorenz, FTI Consulting (Media)
Tel: Mobile: +44 (0) 7775 641 807
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 2019, Tate & Lyle sales totalled GBP2.8
billion. For more information, please visit
http://www.tateandlyle.com or follow Tate & Lyle on Twitter or
LinkedIn.
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END
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