IN Brief:
- Group revenue rose 1% in constant currency during the six months to 30 September 2026 as volume and mix improved 3%.
- Adjusted EBITDA fell 8%, while the margin declined to 19.0% and the group generated £100m in free cash flow.
- Tate & Lyle expects to pass on more cost inflation when it renews customer framework agreements for calendar 2027.
Tate & Lyle intends to recover more input cost inflation through customer contracts renewed for calendar 2027 after first-half earnings fell despite a return to revenue growth. The ingredients manufacturer said the prolonged conflict in the Middle East has increased its cost exposure beyond earlier expectations, prompting stronger pricing measures alongside procurement and operational savings.
For the six months ended 30 September 2026, group revenue increased by 1% on a constant-currency basis, supported by a 3% increase in volume and mix. Adjusted earnings before interest, tax, depreciation and amortisation declined by 8%, while adjusted EBITDA margin fell by 190 basis points to 19.0%. The company described the earnings performance as in line with its expectations.
Adjusted profit before tax declined by 18% to £102 million and statutory profit before tax fell by 37% to £46 million. Free cash flow reached £100 million, £2 million above the comparative period, while net debt stood at £959 million on 30 September. The different profit measures reflect separate accounting definitions; both show weaker earnings even as volumes recovered.
Volume and mix increased by 3%, while pricing reduced revenue growth by approximately two percentage points on a constant-currency basis. Higher costs and commercial pricing decisions consequently outweighed the benefit of selling more ingredients. Tate & Lyle reported stronger momentum in Asia Pacific and a robust performance in the Americas, partly offsetting weaker conditions in Europe, the Middle East and Africa.
Its intention to increase cost pass-through applies to the renewal of customer framework agreements for the 2027 calendar year. That is separate from the financial year ending 31 March 2027, for which Tate & Lyle has maintained its existing outlook. The company has not published a uniform price rise or indicated that every customer, geography or ingredient category will receive the same adjustment.
Framework contracts can shape the timing of raw material and energy cost recovery. Ingredients producers may face higher costs immediately through energy procurement, processing inputs or transport, while the prices received under existing agreements can take longer to reset. Tate & Lyle’s planned renewals create a defined commercial route to address that lag, subject to the terms negotiated with individual customers.
Ingredient costs feed through to food manufacturers’ formulations as well as purchasing budgets. Tate & Lyle supplies ingredients used in sweetening, texture, mouthfeel and fortification, with CP Kelco broadening its hydrocolloid capabilities. Some customers may review specifications when contracts are renewed, but alternative ingredients must still deliver the required functional properties, processing behaviour and quality. The company has not indicated how many recipes or customer contracts will change.
Solutions-based business accounted for 58% of the value of new wins, an increase of 15 percentage points, while revenue from new products rose by 4% on the company’s stated measure. These figures describe the commercial mix of new business, rather than giving a direct measure of additional manufacturing throughput. Product formulation work and the expanded technical portfolio remain central to the group’s effort to offset lower prices and protect its margins.
Operational cost reduction remains another major part of the company’s response. Tate & Lyle achieved US$27 million of productivity savings during the first half against a five-year programme targeting US$200 million. The savings programme covers the enlarged business and sits alongside ongoing work to consolidate bio-gums capacity following the CP Kelco combination.
The timing of that bio-gums consolidation has been rescheduled. The group expects broadly flat adjusted EBITDA in the year ending March 2027 before an approximately US$20 million impact associated with the revised timetable. It is also forecasting modest full-year revenue growth, weighted towards the second half. These are expectations rather than confirmed year-end outcomes.
Tate & Lyle is separately progressing a recommended acquisition by Ingredion Incorporated. Shareholders approved the scheme of arrangement on 28 July 2026, with 98.64% of votes cast in favour. Regulatory and antitrust filings remain under way, and completion is currently expected in the second half of calendar 2027. Until the deal closes, the businesses continue as separate companies.
Contract renewals for calendar 2027 will determine how quickly Tate & Lyle can recover higher input costs through selling prices. The separate bio-gums consolidation and five-year productivity programme are intended to reduce the manufacturing cost base, but their contributions follow different schedules. The company has maintained its March 2027 outlook and has not specified the price increases or margin recovery expected from individual customer agreements.
