WHO recommendation “subject to change”, stresses the Tate & Lyle CEO
LONDON — The World Health Organization on May 15 advised against using sugar-free sweeteners to help control body weight or reduce the risk of non-communicable diseases like diabetes. The recommendation covered several of Tate & Lyle, Inc.’s sweeteners, most notably sucralose, but the London-based company remains a believer in those sweeteners, said Nick Hampton, chief executive officer, who indicated the recommendation was “conditional.”
“And that means it’s based on low-weight evidence and therefore there’s a little bit of controversy about it,” he said on a May 25 conference call to discuss financial results for the fiscal year ended March 31. “So for We will of course be monitoring this very closely, but we believe what we are doing is the right thing to do to help solve the immediate problem of rising obesity and diabetes in the world.”
A lot of scientific evidence shows that low-calorie and no-calorie sweeteners are effective in helping with weight management and other lifestyle choices, he said.
“And that’s really important in a world where obesity and diabetes are the biggest health challenges facing the world, and we’re seeing tremendous demand for these products from consumers as they seek to provide consumers with positive ways to reduce their sugar consumption.” recording,” Mr Hampton said.
In addition to sucralose, the sugar-free sweeteners in the WHO recommendation also included acesulfame potassium (Ace-K), aspartame, advantame, cyclamates, neotame, saccharin, stevia and stevia derivatives.
Adjusted EBITDA for Tate & Lyle’s sucralose business fell 5% to £58 million ($71 million) for the fiscal year. Adjusted sucralose sales rose 2% to £184 million ($227 million). Volume was down, especially in the first half of the year, Mr Hampton said.
“That’s the first point: major customers withdrew their contracts quite a bit in the first half of the year,” he said. “What we’ve also seen in the second half of the year is that we’re doing a record quarter in the fourth quarter of 2022.”
Dawn Amanda Allen, chief financial officer, added, “If you think about sucralose’s role in the portfolio, its job is to deliver attractive returns, and the company has delivered that on a margin of about 30% this year.” the world market for sucralose remains very robust and growing.”
Company-wide, adjusted EBITDA rose 22% to £320m for the year, while adjusted sales rose 18% to £1.75bn thanks to price/mix gains. In Food & Beverage Solutions, adjusted sales rose 19% to £1.44 billion on price/mix gains and constant exchange rates.
“Food & Beverage Solutions is our growth engine and its mission is to drive margin-enhancing growth,” said Ms. Allen in prepared comments. “Sales are expected to grow in the high single-digit percentage range per year and thus outperform the market. It’s also the largest part of our portfolio, accounting for over 80% of our revenue and EBITDA. “
A little over a year ago, Tate & Lyle’s portfolio changed. The company sold a controlling interest in its primary products business in North and Latin America to KPS Capital Partners. As a result of this transaction, a new company, Primient, was formed in April 2022. Tate & Lyle owns a 49.7% interest in Primient, a joint venture. Tate & Lyle’s adjusted stake in Primient was £24m in the financial year.
“Primient had a difficult year due to some operational challenges at its plant network and the impact of inflation,” Ms. Allen said in prepared remarks. “Interest costs were also 47% higher, reflecting higher U.S. interest rates.”