Tate & Lyle (AO) | Hold | Recommended offer

Research evidence excerpt

Tate & Lyle (AO) | Hold | Recommended offer

Tate & Lyle Hold | Target Price: 547p

Company description Management

Tate & Lyle is a North American-focused provider of ingredients and solutions to Nick Hampton, CEO

food and beverage companies, with a strong heritage in corn-derived products. It Sarah Kuijlaars, CFO

has a strong franchise in the area of sugar and calorie reduction and operates David Hearn, Chairman

through two business units: a Food & Beverage Solutions unit focusing on low- Key shareholders

sugar and high-fibre products, and Sucralose. In 2024, the company completed Free float 83.00%

the exit from its low growth and margin Primary Products unit and bought CP Huber 16.80%

Kelco for USD1.8bn. Ameriprise 5.50% Vanguard 5.30%

Investment case Valuation methodology

Organic growth acceleration. DCF with a 9% WACC and 2% long-term growth .

Deliver the synergies following the merger with CP Kelco and We use an EV/EBIT comparison its own historical valuation

growth the EBITDA margin. Risks to our rating

Take out bid by Ingredion. The rerating may take much longer than we anticipate or not

Catalysts occur at all.

Reporting good and consistent organic growth as a new Cost inflation is affecting T&L at multiple levels. Although the

company. group has been successful in offsetting cost inflation in 2021-22

Increasing understanding of prospects for new company. and the CEO seems quite confident about the company’s ability

Delivery of the cost savings and top-line synergies related to the to raise prices, we cannot rule out a scenario in which such price

CPK deal. increases might not fully materialise.

A weak US dollar, with every one-cent change in the US dollar

having a GBP1-1.5m impact on PBT.

Key data charts