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1. Company Snapshot

1.a. Company Description

Tate & Lyle PLC, together with its subsidiaries, provides ingredients and solutions to the food, beverage, and other industries in the United States, the United Kingdom, other European countries, and internationally.It operates through three segments: Food & Beverage Solutions, Sucralose, and Primary Products.The company offers texturants; nutritive sweeteners, such as high fructose corn syrup and dextrose; health and wellness ingredients; and stabilizers.


It also provides industrial starches for paper, packaging, and industrial adhesives; acidulants, such as citric acid; and commodities comprising corn gluten feed and meal for animal nutrition, as well as corn oil and ethanol.In addition, the company engages in the treasury and insurance businesses; and provision of research and development services.Tate & Lyle PLC was incorporated in 1903 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on TATE

Tate & Lyle's recent performance was negatively impacted by a slowdown in market demand, leading to a revision of its fiscal 2026 revenue and earnings expectations. The company now expects revenue and EBITDA to decline by a low-single digit percent compared to the prior year. Analysts cite challenging market conditions, shifts in contract negotiations, and strategic customer decisions as reasons behind the recalibration of its valuation. The consensus analyst price target dropped significantly from £7.09 to £6.26 per share.

1.c. Company Highlights

2. Tate & Lyle's Resilience Amidst Market Softness

Tate & Lyle reported a revenue decline of 3% to 4% in constant currency for the first half, with EBITDA expected to be high single-digit percent lower. Despite the challenging market conditions, the company's EPS came in at 0.213, beating estimates of 0.1945. The margin of the CP Kelco portfolio is expected to improve further in the first half, a positive note amidst the softness in demand. For the full year, the company expects revenue and EBITDA to decline by low single-digit percent compared to the prior year.

Publication Date: Nov -13

📋 Highlights
  • Revenue & EBITDA Decline:: H1 revenue to drop 3-4% (constant currency), EBITDA down high single-digits due to Americas demand slowdown and EMEA mid-single-digit contraction.
  • CP Kelco Synergy Progress:: Combined portfolio gains traction, margin improvement in CP Kelco portfolio expected in H1, with full synergy benefits anticipated by Q4.
  • Market Challenges:: Global demand softness persists, driven by North American consumer price inflation and cautious CPG purchasing, with volume down despite retail value growth.
  • Strategic Priorities:: Accelerating growth via customer segmentation, manufacturing optimization, and product innovation, with productivity programs exceeding targets.
  • Sucralose Outlook:: High-intensity sweetener demand under pressure, but decade-long sucralose growth trajectory remains intact, supported by portfolio diversification (e.g., stevia alternatives).

Operational Challenges and Strategic Responses

The company is operating in a tough market, with a slowdown in demand attributed to significant consumer price inflation, particularly in the Americas. Nick Hampton, CEO, noted that retail sales data shows value up despite volume down, indicating that price inflation is driving a significant piece of the volume softness. In response, the company is accelerating steps to drive top-line growth, including investing in customer segmentation and enhancing customer-facing capabilities.

Growth Drivers and Innovation

Despite the near-term challenges, the fundamental growth drivers of the business remain strong, with consumer demand for healthier and more nutritious food and drink continuing to grow. The company is confident that the benefits of the CP Kelco combination will start to flow through in the fourth quarter, driven by cross-selling and cost synergies. The innovation pipeline is also strengthening, although the pace of conversion is uncertain due to the current market environment.

Valuation and Outlook

With a P/E Ratio of 33.29 and an EV/EBITDA of 10.54, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at 14.6%, which, if achieved, could support the current valuation. The Dividend Yield of 5.13% is also attractive, indicating that the company is committed to returning value to shareholders. The ROE of 10.11% suggests that the company is generating decent returns on equity.

Management's Confidence and Future Plans

Management remains confident in the outlook for the business, with a focus on driving productivity hard and navigating through tariffs by building inventory levels. The company is also committed to its dividend policy, with a clear capital allocation structure framework in place. As the market environment evolves, Tate & Lyle's ability to execute on its strategic priorities will be key to delivering long-term value to shareholders.

3. NewsRoom

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How Recent Developments Are Rewriting the Story for Tate & Lyle

Nov -30

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Why The Narrative Around Tate & Lyle Is Shifting Amid Analyst Revisions and Growth Concerns

Nov -16

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Tate & Lyle (LON:TATE) Is Due To Pay A Dividend Of £0.066

Nov -09

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Tate & Lyle PLC (TATYF) Half Year 2026 Earnings Call Highlights: Navigating Market ...

Nov -06

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Why The Story Behind Tate & Lyle Is Shifting After Recent Analyst Updates

Nov -02

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United States Artificial Sweetener Market Report 2025-2033 Featuring Tate & Lyle, Cargill, Archer Daniels Midland, DuPont de Nemours, Ajinomoto, Ingredion, GLG Life Tech

Oct -24

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GCC Bitterness Suppressors and Flavor Carriers Market Forecast and Growth Trends Report 2025-2033 Featuring Cargill, Koninklijke DSM, Givaudan, Takasago, IFF, Kerry, Symrise, Tate & Lyle

Oct -23

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Why The Narrative Around Tate & Lyle Is Shifting After Recent Analyst Updates

Oct -18

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.15%)

6. Segments

Food & Beverage Solutions

Expected Growth: 1.2%

Tate & Lyle's Food & Beverage Solutions segment growth of 1.2% is driven by increasing demand for healthier and more sustainable ingredients, expansion in emerging markets, and strategic partnerships. Additionally, the company's focus on innovation, particularly in the areas of sugar reduction and clean label products, is contributing to growth.

Sucralose

Expected Growth: 0.8%

Sucralose growth driven by increasing demand for low-calorie sweeteners, rising health consciousness, and expanding presence in emerging markets. Tate & Lyle's strong brand reputation, product innovation, and strategic partnerships also contribute to the 0.8% growth rate.

Primary Products Europe

Expected Growth: 1.1%

Tate & Lyle's Primary Products Europe segment growth of 1.1% is driven by increasing demand for specialty food ingredients, particularly in the dairy and beverage industries. Additionally, the company's focus on innovation and product differentiation, as well as its strong customer relationships, have contributed to this growth.

7. Detailed Products

Specialty Food Ingredients

Tate & Lyle's specialty food ingredients are used in a wide range of food products, including baked goods, beverages, and snacks.

Bulk Ingredients

Tate & Lyle's bulk ingredients are used in the production of food products, including soups, sauces, and dressings.

Starches

Tate & Lyle's starches are used as thickeners, stabilizers, and emulsifiers in food products.

Sweeteners

Tate & Lyle's sweeteners are used in the production of low-calorie foods and beverages.

Texturants

Tate & Lyle's texturants are used to modify the texture of food products, including yogurts, desserts, and snacks.

Fibers

Tate & Lyle's fibers are used to promote digestive health and support healthy blood sugar levels.

8. Tate & Lyle plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Tate & Lyle plc operates in a industry where there are few substitutes for its products, but the threat of substitutes is still present due to the increasing demand for natural sweeteners and sugar reduction.

Bargaining Power Of Customers

Tate & Lyle plc has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized to meet specific customer needs, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

Tate & Lyle plc relies on a few large suppliers for its raw materials, which gives these suppliers some bargaining power. However, the company's long-term contracts and relationships with suppliers help to mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the industry, including the need for significant capital investment and specialized expertise. Additionally, Tate & Lyle plc's strong brand recognition and established customer relationships make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The industry in which Tate & Lyle plc operates is highly competitive, with several large players competing for market share. The company's focus on innovation and customer relationships helps it to differentiate itself from competitors, but the intensity of rivalry remains high.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.92%
Debt Cost 5.53%
Equity Weight 69.08%
Equity Cost 6.28%
WACC 6.05%
Leverage 44.75%

11. Quality Control: Tate & Lyle plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.74$

Current Price

3.74$

Potential

-0.00%

Expected Cash-Flows