Tate & Lyle Stock

Good morning. Thank you for dialing into Ingredion's call. I'd now like to turn the call over to Noah Weiss.

Good morning, everyone, and thank you for joining us. I'm Noah Weiss, Vice President of Investor Relations. Joining me on today's call are Jim Zallie, our CEO, President and CEO and Jason Payant, our Vice President and Interim CFO. The press release we issued today as well as the presentation we will reference for this call can be found on our website, ingredion.com. There's also a separate landing page that we have set up on our website to access materials and disclosures in connection with this transaction. As a reminder, our comments within this presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties and include expectations and assumptions regarding the company's future operations and financial performance.

Actual results could differ materially from those estimated in the forward-looking statements, and Ingredion assumes no obligation to update them in the future as or if circumstances change. Additional information concerning factors that could cause actual results to differ materially from those discussed during today's conference call or in this morning's press release can be found in the company's most recently filed annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. During this call, we will also refer to certain non-GAAP financial measures, including adjusted EBITDA and adjusted operating income, which are reconciled to U.S. GAAP measures in today's presentation appendix.

With that, I will turn the call over to Jim.

Thanks, Noah, and good morning, everyone. Today, we are announcing the recommended all-cash offer by Ingredion for the acquisition of Tate & Lyle, a significant milestone in Ingredion's transformation to a global leader in ingredient solutions. Combining Ingredion and Tate & Lyle's complementary portfolios establishes a global leader with the innovation, expertise and geographic reach that will help create the future of food.

The combined group will be better positioned to serve customers' needs for the development of great tasting, healthier and affordable food products that consumers demand. This compelling combination will create exciting new possibilities for employees while also generating significant value for all stakeholders. This acquisition represents a leap forward in a transformation that Ingredion has been executing for nearly a decade to create a more global, scaled ingredient solutions provider, better equipped to help customers solve key formulation challenges across taste, texture, nutrition and performance.

Additionally, the acquisition expands Ingredion's localized innovation network, thus enabling deeper co-creation with customers and accelerating our speed to market.

Just as importantly, the combination of our ingredient solutions capabilities with those of Tate & Lyle strengthens our formulation expertise, enabling us to deliver more integrated, higher-value solutions that help customers meet performance and affordability needs. And finally, our expanded manufacturing and commercial network enhances our ability to provide reliable, cost-effective supply to customers around the world. We believe these capabilities will make Ingredion the partner of choice for customers. For the benefit of those less familiar with Tate & Lyle, let me spend a few minutes providing details on why we are so excited about this opportunity.

Headquartered in London, Tate & Lyle is a highly respected ingredient solutions company with a long and rich history. Like Ingredion, they have spent more than a century helping food and beverage manufacturers solve complex formulation challenges and bringing new products to market.

Tate & Lyle has generated approximately $2.7 billion in full year 2026 revenue and about $570 million in adjusted EBITDA, with approximately 5,000 employees globally and a patent portfolio of roughly 1,000. Tate & Lyle's revenues are geographically balanced across the Americas, Europe, Middle East and Africa and Asia Pacific, and they have established leading capabilities in mouthfeel, sweetening and fortification. Both Ingredion and Tate & Lyle are trusted brands with storied histories serving customers in the food and beverage industry for more than 100 years. Over time, both companies have evolved from their roots in traditional ingredients to businesses focused on higher-value specialty ingredients and customer solutions.

Both organizations have strong commitments to innovation and have independently invested to expand capabilities focused on attractive growth areas. This gives us confidence in the strategic fit and in the portfolio we continue to expand. As we touched on earlier, this transaction rapidly accelerates a transformation we've been executing for nearly a decade, shifting our portfolio toward higher-value, higher-growth specialty solutions. Following the combination, more than half of our revenue will come from Texture and Healthful Solutions, the fastest growth portion of our portfolio where customer and consumer demand remains strong and volume growth persists.

On a combined basis, Tate & Lyle and Ingredion will have generated $10 billion of revenue with an adjusted EBITDA margin of 18.1% before integration and synergies. Now let me briefly walk through the key transaction terms. Ingredion has agreed the terms of a recommended all-cash offer to acquire Tate & Lyle under which the shareholders of Tate & Lyle will be entitled to receive GBP 5.95 per share, which implies a total enterprise value of approximately $5 billion and represents an acquisition multiple of 8.8x full year 2026 adjusted EBITDA.

Tate & Lyle shareholders will also be entitled to receive a final dividend of no greater than 13.2p per ordinary share and an interim dividend of no greater than 6.8p per share for financial year ended March 31, 2026, and the 6-month period ended September 30, 2026, respectively. Following the transaction, the company is expected to have approximately $10 billion in revenue and adjusted EBITDA of $1.8 billion, representing an 18.1% margin prior to integration and synergies, creating a more -- creating a larger, more diversified ingredient solutions platform with an enhanced growth profile.

Additionally, we expect a significant run rate net cost synergy opportunity of approximately $130 million by full year 2030 with onetime cash costs of $175 million. We expect the transaction to be more than 15% accretive to adjusted EPS in the first full calendar year following the acquisition with significantly improved free cash flow conversion. As it relates to capital structure and financing, the transaction is supported by fully committed bridge financing, and we remain committed to maintaining an investment-grade rating. At close, we expect the combined group to have leverage of approximately 3x net debt to adjusted EBITDA, and we expect to reduce leverage to approximately 2.5x within 18 months post closing, all while continuing to target a similar dividend policy to what Ingredion has had in the past.

Overall, it delivers a compelling combination of strategic fit, financial discipline and the potential for long-term value creation. Now before I turn to the next slide, I would like to touch on some details with regards to the next steps of the U.K. takeover process, which the transaction will follow, which is governed by the U.K. City Code on takeovers and mergers, otherwise known as the U.K. Takeover Code. The acquisition will be implemented as a court-sanctioned scheme of arrangement. This requires, amongst other things, the approval of the scheme by a majority in number of present and voting Tate & Lyle shareholders who must also represent at least 75% of the votes being cast at a meeting of shareholders ordered by the English High Court. It is worth noting that Tate & Lyle's largest shareholder, Huber Equity Corporation, has provided an irrevocable undertaking to Ingredion to vote in favor of the scheme, subject to the terms of the undertaking.

The acquisition is also subject to the satisfaction of certain regulatory conditions, which are set out in the Rule 2.7 announcement, which will be available on Ingredion and Tate & Lyle's respective websites. A scheme document further containing further details and terms of the acquisition will be published within 28 days of today's announcement. I would now like to turn to the strategic rationale and why this combination significantly strengthens Ingredion's long-term growth potential. The acquisition of Tate & Lyle strengthens our ability to service our customers around the world more reliably and more cost effectively. It also creates a differentiated go-to-market platform for texture solutions, sugar reduction and fortification, underpinned by exceptional technical capabilities. Let me walk through these 3 strategic capabilities one by one.

Post closing, we will operate approximately 65 manufacturing facilities globally, supported by a network of over 50 idea labs and innovation centers with more than 800 scientists and approximately 2,700 granted and/or pending patents. That scale matters because while many of our customers increasingly operate globally, their formulation needs are highly localized. They desire innovation partners that can help them develop solutions for local and regional tastes that meet consumer preferences and regulatory requirements. With this transaction, we will have broader manufacturing capabilities, a larger innovation network, enhanced local-for-local service and deeper technical resources across North America, EMEA and Asia Pacific.

Across the food and beverage industry, several trends continue to shape product development and innovation. Consumers are looking for healthier products with reduced sugar, more protein and fiber and simpler labels with better nutritional profiles. They also continue to expect great taste and texture that provides an overall enjoyable eating experience. Affordability continues to remain a key consideration for both consumers and food manufacturers. The acquisition of Tate & Lyle strengthens Ingredion's ability to address these trends. Post transaction, we will have expanded capabilities across sugar reduction, protein and fiber fortification, texture and mouthfeel with the opportunity to better assist our customers in developing products that are healthier, better tasting and are appealing to value-conscious consumers.

The combined group will be positioned to address the just described needs through complementary solution platforms. In Texturants, we bring together a broad range of texture solutions, including native and modified starches, functional texturizing systems and clean label ingredients. And these capabilities help customers improve mouthfeel, stability, consistency and overall product performance across a wide range of food and beverage applications. For sugar reduction, the acquisition significantly expands our sweetening toolbox.

Ingredion will be able to offer solutions spanning Stevia, Sucralose, Allulose and Polyols, allowing customers to reduce sugar while maintaining taste, functionality and consumer appeal. In fortification, we strengthened our ability to help customers improve nutritional profiles through protein and fiber systems, prebiotics and nutritional blends. These capabilities are increasingly important as consumers seek products that support health and wellness goals without compromising on taste or convenience. And lastly, within our Texturants platform, Tate & Lyle adds a complementary hydrocolloid portfolio of Pectins, Carrageenan and Guar Gum that combines with our starch capabilities to create one of the most comprehensive texturizing toolkits in the industry.

Taken together, these platforms strengthen our ability to deliver more complete formulation solutions for customers. Turning to the complementary capabilities of our solutions business. We expect the acquisition to further grow our higher-value portfolio through our solutions-led growth model. We spoke about how Tate & Lyle's capabilities expands our solutions toolbox, broadening portfolio coverage and enabling more integrated customer solutions. It also strengthens customer partnerships through deeper co-development and shared category expertise while scaling innovation and formulation to accelerate and optimize speed to market.

Furthermore, it extends our solutions capabilities across a larger global platform, enhancing our reach, relevance and ability to serve customers around the world. We believe this creates a clear path to value creation through solutions-led growth and supports a higher value mix across the portfolio over time. And when we connect these expanded solutions capabilities with our innovation platform, customer relationships and global reach, we strengthen what we call our customer-centric flywheel, which I'll discuss on the next slide. One of the things we find most compelling about this acquisition is how it strengthens our customer-centric innovation model. We think about innovation as a continuous flywheel that starts with understanding consumer and customer needs, translates those insights into differentiated solutions and ultimately brings those solutions to market through customer -- close customer collaboration.

And this transaction truly strengthens every part of that flywheel. Ultimately, the combination enhances our ability to move from insight to innovation to commercialization more quickly and more effectively, helping customers bring differentiated products to market. Just as importantly, this transaction brings together 2 organizations that share a strong cultural foundation and common values, which will be an important advantage as we move forward. Both Ingredion and Tate & Lyle are purpose-driven organizations that put customers at the center of all that we do. We share a commitment to innovation, operational excellence, sustainability and creating long-term value for all of our stakeholders.

We also share similar values around empowering our people, fostering an inclusive culture, acting with integrity and an owner's mindset while working together to deliver results. Importantly, both organizations believe that growth and innovation go hand-in-hand with helping customers meet evolving consumer needs and creating a better future through the science of food. While acquisitions are ultimately about strategy and value creation, they are also about people. The cultural alignment between Ingredion and Tate & Lyle will be an important advantage as we bring these organizations together and build the next chapter of growth.

With that, let me turn it over to Jason, who will discuss the financial framework.

Thank you, Jim. We believe this transaction enhances our financial profile and creates multiple avenues for value creation. On a combined basis, Ingredion and Tate & Lyle have generated approximately $10 billion in revenue, $1.8 billion in adjusted EBITDA, $1.4 billion in adjusted operating income and approximately $600 million in annual capital expenditures, a financial profile, which we anticipate to be further improved through synergy upside. One of the main reasons we are confident in this transaction is our proven track record of successfully integrating acquisitions and realizing synergies. Over more than a decade, we've completed a number of strategic acquisitions that have expanded our capabilities and strengthened our position in higher-value ingredient solutions, including National Starch, Penford, PureCircle, Western Polymer, TIC Gums and KaTech, among others. Each of these transactions has helped advance our transformation into a more solutions-oriented company.

And throughout those integrations, we have developed a disciplined and repeatable playbook across planning, execution and value creation. Our integration philosophy is straightforward and begins and ends with ensuring business continuity for customers and employees. We also focus on adopting a best of the best approach from the combined organization across talent, systems and processes and through optimization of operations, all of which create opportunities to accelerate growth. Importantly, this is not just about cost synergies. It is also about bringing together complementary capabilities, retaining key talent and creating a stronger platform for long-term growth. We believe Tate & Lyle is an excellent strategic fit for Ingredion, and we intend to apply the same disciplined integration approach that has served us well in prior transactions.

Turning to synergies. We have identified approximately $130 million of annual run rate net cost synergies that we expect to achieve by 2030. Approximately 60% of the opportunity is expected to come from SG&A synergies, including the elimination of public company costs, organizational simplification and other back-office savings, including IT expenses across the combined group. The remaining 40% is expected to come from COGS synergies, driven by procurement savings and optimization across manufacturing and supply chain, including logistics and warehousing, streamlined network flow and greater scale. We also expect to incur approximately $175 million of onetime cash costs to achieve these synergies, which we believe is a highly attractive investment given the opportunity for long-term value creation.

Additionally, we see further potential synergies coming from commercial cross-selling opportunities, optimized route to market, greater efficiency of capital spend and enhanced geographic presence as well as a more extensive innovation network. Overall, we believe this transaction creates a compelling balance of near-term financial benefits and long-term strategic growth opportunities. And while we are excited about the potential for value creation, we are equally focused on maintaining the financial discipline that has long been a hallmark of our company, which Jim will discuss on the next slide.

Thanks, Jason. As we evaluate any transaction, maintaining financial discipline is a top priority. At close, we expect the combined group's leverage to be approximately 3x net debt to EBITDA, and we are committed to reducing leverage to approximately 2.5x within 18 months after close. We have a strong track record of deleveraging following acquisitions, supported by our cash-generative business model and disciplined approach to capital allocation. Importantly, our financial priorities will remain unchanged.

We are committed to maintaining a strong investment-grade credit profile, allowing us to continue investing in high-return growth opportunities that deliver returns above our cost of capital and provide balanced and progressive returns to shareholders over time. To summarize, we believe this transaction represents a transformative leap forward into a larger differentiated and more solutions-oriented ingredients company, creating compelling value for customers, employees and all stakeholders.

And with that, operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of Kristen Owen with Oppenheimer. Our next question comes from the line of Andrew Strelzik with BMO Capital Markets.

You talked a lot about the strategic fit and the rationale, which I certainly get. But I was hoping you could talk about the trajectory of business fundamentals at tape and kind of what you're assuming moving forward. Obviously, we've seen estimates have come down a decent amount over the last year plus. So how are you thinking about kind of the underlying business trajectory for tape?

Well, we are very excited about the portfolio, and we have had an opportunity to do some limited due diligence through the process, and we're very impressed with the caliber of the leadership, the team as well as the strategy and the ideas. And we see an opportunity to bring complementary portfolios of ingredients, talent as well as supply networks that is really going to bring about the opportunity for synergies.

We think the work that Tate & Lyle has done over these last number of years to transform its portfolio has really been something that is not easy and the benefits of which take time to bear fruit. And we think the timing of this combination and the ability to bring urgency to the compelling inherent value proposition of the acquisition is going to accelerate the opportunity to execute on behalf of customers.

And so we think the way they've transformed their portfolio has made our interest in them that much more compelling and makes the complementary nature of the combination quite attractive and will enable the ability to execute on behalf of customers easier and more attractive. So we think that they're very well positioned now through this combination to accelerate their volume-led growth that I know that they have been committed -- committed to, and that was recently stated in their most recent full year earnings summary.

Okay. That was helpful. And maybe if I could just follow up. I think the regulatory side is going to be very top of mind for investors. So can you -- you talked a little bit about the overlap, but can you talk a little bit more about where the biggest overlap is and isn't? And ultimately, how you're thinking about the regulatory approval process, if divestitures might be needed? Just a little more color around that would be helpful.

Yes. Yes. What I would say, just to clarify, the strategic rationale is not really driven by product or customer overlap, but it's about combining complementary portfolios, technical expertise and geographic supply networks that expand Ingredion's ability to address customer needs across a wider range really of end use categories and applications. And together, this, we believe, is going to enhance our ability to better serve customers across a broader range of applications and end markets. We remain confident in that strategic rationale. And of course, we're committed to explaining this and engaging constructively with regulators throughout the process.

Right now, it's really too early to speculate on specific outcomes or hypothetical scenarios in that regard. We're going to stay focused on completing the transaction, and we're confident that going forward, we're going to deliver significant benefits for customers. And again, very well prepared to engage constructively with relevant authorities throughout the review process.

Our next question comes from the line of Kristen Owen with Oppenheimer & Company.

I wanted to start first with the cost synergies. The $130 million that you called out by 2030, if you could maybe just give us a sense of how you're thinking about those synergies? And maybe I know you talked 60-40 in terms of the split, but maybe talk a little bit more about where some of the opportunities are. Obviously, Tate had its own cost mitigation efforts in place. Ingredion just exited from its cost to serve. So I'm just wondering how you're thinking about both the cadence and then maybe potential upside to that synergy number as we get through the transaction.

Yes. This is Jason. I can field that one. So as we stated in the prepared remarks, we have identified about $130 million of annual run rate net cost synergies -- we expect to achieve those by 2030, and there's approximately $175 million of onetime cash cost to achieve those. Where we're looking at the COGS piece is really procurement savings, network flow optimization, logistics and warehousing.

And then on the SG&A side, it's really areas of overlap in corporate and support functions, which are really expected to drive savings versus creating any disruption. It's probably also important to say, we haven't identified any material dis-synergies as part of the integration planning, given the complementary nature of the 2 portfolios and the geographic footprints. We're going to obviously carefully sequence the integration to maintain customer continuity and business momentum, and we're going to try to minimize any potential near-term friction.

And the only thing that I would add to what Jason said is that, again, everything that we've identified are run rate cost synergies, and we have not factored in any revenue synergies.

And to your point about potential upside, obviously, as this is what we've identified in the initial phases of the work. So as we continue to move forward with the integration, we'll obviously be looking for other opportunities to identify additional.

Okay. That's helpful. And then, Jim, you kind of got to the heart of my next question, which is on the top line synergies. I mean, in particular, I'm sort of interested in how you think about the hydrocolloids business and just the general expansion of the toolbox on the texture side. Maybe help us quantify what sort of TAM that combined portfolio could unlock.

Yes. We're very excited about that opportunity. As you know, Kristen, we have been focused on unlocking the potential of texture and the impact that it has on overall liking. At the same time, Tate has been developing its understanding of mouthfeel. And this cuts across all different types of food types. So you have high moisture foods, intermediate moisture foods, low moisture foods. Tate's mouthfeel understanding, maybe a little bit more skewed towards higher moisture foods, our understanding across all the various dimensions. And Tate & Lyle's acquisition not that long ago of CP Kelco, which is a storied franchise and leader in the hydrocolloid space complements the overall ability to structure water in ways that enhance overall sensory preference for foods alongside of starches.

And that overall texturizing market is very large, and it's, I believe, a $20 billion market. And so we believe the combination of their hydrocolloids portfolio, along with our specialty starch portfolio really does expand our problem-solving toolbox to, again, structure water in ways that we can influence overall consumer preference and enjoyment when it comes to formulating healthier foods that still have to taste great or formulating more indulgent products for consumers that are looking for those enjoyable eating experience and moments in time.

So we're very excited. We actually really believe this is going to enable us to help our customers create the future of food aligned with trends of health and wellness, authenticity and affordability. And it's just tremendous new possibilities that we're going to be able to unlock with this combination.

Our next question comes from the line of Josh Spector with UBS.

I wanted to follow up again just on some of the cost synergies and specifically procurement. I guess our understanding is Tate has a long-term offtake agreement for a lot of their starch products from Primient. And I mean, I guess they produce most of their gums, you guys buy most of your gums. Just wondering where kind of that procurement savings really comes from.

Yes. I don't believe Tate & Lyle secures starch necessarily from Primient. They source other unique specialty ingredients such as fibers from Primient, not necessarily starches. Also CP Kelco is vertically integrated in relationship to hydrocolloids. And collectively, we source from a variety of suppliers in hydrocolloids, but Ingredion is smaller in that regard. We're looking at procurement in certainly chemicals, packaging, freight, logistics, warehousing, all in how you put out bids with more scale, providing procurement synergies.

Ingredion has invested significantly over the last 5 to 6 years in building out a global procurement organization. And we believe that the capabilities and muscles that we've developed there, folding that in with Tate & Lyle's procurement operations are going to give us more scale to procure more efficiently and effectively in all of that regard. So travel, et cetera, we just think that, that's where the majority of the synergies are going to come from on the procurement side.

Okay. And I mean, I don't know if you can get into the details on this call. I may need to follow up, but I'm having trouble getting to your 15% year 1 accretion using what consensus estimates are for Tate, assuming $5 billion of debt, maybe at a 6% rate and then assuming minimal cost savings in year 1, is anything in that very off? I'm getting to about 1/3 to half of your number.

It may be more efficient to take that offline just so we can kick the tires on what you're looking at. But we're comfortable with our calculations. We've done a lot of work on it and have to be well prepared given the takeover code in the U.K. So we believe that we've appropriately presented that. So maybe we can take that offline.

Yes, we can have a separate call and do a walk-through of the bridge and the building block to get to what is, we feel confident greater than 15% EPS -- adjusted EPS accretion 1 year, calendar year after the deal closes, the effective date.

Okay. Yes, I could maybe try a couple of quick ones then to follow up here is just are there any break fees with this deal? And if there are divestments, is that $130 million still the achievable number? Does that get adjusted?

Yes. The $130 million does not get adjusted, and there are no break fees.

Our next question comes from the line of Ryan Lavin with Barclays.

This is Ryan on for Ben today. I wanted to dig a little bit more into the leverage and balance sheet. So you give the 3.0 target following the close of the transaction and gave yourselves about 1.5 years to get it down to 2.5. You had said that the dividend policy is going to stay relatively stable. So with that, am I to assume that there's going to be some level of a reduction in CapEx? Or is there something else here that's going to help you drive the leverage turn alongside those cost synergies?

Yes. I think if you look at our capital structure and how we invest, we're always focused on growth CapEx first. So that's kind of the primary. And then obviously, returning value to shareholders through the dividend. After that, we look at reliability, capital and continuing to maintain the plants. I think where you're going to see the changes after we've accounted for those allocations, then we're looking at share repurchases and M&A. Obviously, this will be the focus for the next few years. So we'll be allocating less towards M&A. And then opportunistically looking for share repurchases, but clearly, we'll have other capital priorities. Both businesses generate solid cash flow, and that's why we believe we can quickly deleverage over the next 18 months.

Our next question comes from the line of Heather Jones with Heather Jones Research LLC.

I was just wondering if you all have done any work yet or able to offer us a sense of how this would change the combined company's growth profile? I mean, do you have a sense of what a long-term growth algo would be for EBIT or EBITDA for the combined company?

Yes. That's a body of work, obviously, that we'll do during the 12-month planning period, and we'll be prepared to communicate at the appropriate time. I think both companies are Texture and Healthful Solutions growth outlook, the revenue and the operating income and the targets that we most recently put out, along with what I think Tate had as their growth outlook for a business that predominantly will fit in our texture and healthful solutions are similar in ways.

So we'll continue to unlock that and do our planning. And again, what I mentioned is that our synergies are predominantly exclusively the $130 million on the cost side. There will obviously, we expect be revenue synergies, and that's one of the things that I think we'll take our time on and then that will be factored into the combined growth outlook that we'll put forward shortly after the effective date of the combination closing, the deal closing.

Okay. And then a follow-up on a question that was asked earlier, but just looking at Tate's numbers over the last couple of years and looking at the fiscal '27 projections, it looks like EBITDA margins have contracted a couple of hundred basis points. So I was wondering, I'm clearly not as familiar with their business as I am with you. And just wondering if you could give us some color as to what's driven that contraction? And is that expected to stabilize? Or just how we should be thinking about that?

Yes. I think that the volume growth has been somewhat challenging, I think, for Tate & Lyle. And that's one of the areas that I think was addressed on their most recent earnings call about the investments that they're going to make to drive volume-led growth. And that's one of the things we're most excited about the combination where there definitely will be synergies in the way we go to market and with the enhanced customer reach and the geographic reach, we think that's the opportunity to help address the volume-led growth where they were going to make some targeted organic growth investments.

And -- there also, I think, maybe were some mix-related matters there as well, but that's where the solutions-led combination, which is at its essence about margin accretion. And so that's, again, what makes the combination so compelling is we genuinely believe that together, we can achieve more than what either company could achieve on its own.

[Operator Instructions] Our next question comes from the line of Ben Klieve with Benchmark [indiscernible].

A couple of questions on the overlap. Clearly, there's a lot of synergies that you guys outlined, but I'm curious if you can elaborate a bit on where you think the most pronounced overlap is with the combined company, either from a kind of a customer capability, geographic standpoint?

Yes. Again, I wouldn't characterize it as product and customer overlap, but complementary the complementary nature of the product lines. Again, in the case of texturant, which we got asked earlier, Tate & Lyle's acquisition of CP Kelco creates leading positions in Pectin. Ingredion does not have any Pectin. Carrageenan, we don't have any Carrageenan to speak of, [ Gellan gum ] and products such as that. So those are nice portfolio complements. Protein fortification. Ingredion is a leader in plant-based protein with pea protein isolate.

Tate & Lyle is a leader in fiber fortification and soluble fibers. Ingredion does not have much in the way of soluble fibers. So all of these are compelling complementary elements. Also, the geographic supply network is, I think, incredibly important for customers on what they're looking for from trusted suppliers that have redundancies in their network to assure more reliable supply. One of the things that the pandemic exposed is the frailty of the global supply chain network. And so we believe that the very strong position that Ingredion has in South America, which Tate & Lyle doesn't have as long of a heritage and history. Ingredion, we talked about it, I think, at the Investor Day was -- is more than a 90-year history in South America.

Tate & Lyle does not have that history there. These are real compelling geographic complements that on behalf of global multinational customers that are nervous about the frailties in the supply chain from everything that the industry endured going back to '21 and '22 and now with what's happening in the Middle East, they're really interested in a trusted, reliable supplier that has redundancies that can get product to them under any set of circumstances. And that's the other thing that really, I think we're very, very excited about on behalf of customers, not -- and of course, the whole innovation capability side and what that unlocks.

Got it. Very helpful. And then you touched on my follow-up question, which is around the global manufacturing footprint and redundancies. And I'm wondering, maybe it's too early to answer this, but to the extent to which you observe likelihood of facility consolidation to maybe kind of reduce the pro forma maintenance CapEx spend that the combined company would have.

Yes, that will all be part of our 12-month planning work that we're going to do. We do believe that there will be opportunities in the cost synergies numbers that we put forward to look at not just corporate costs, but how to optimize that supply network. We do think there will be procurement synergies, certainly on CapEx, but also CapEx synergies that will come also just by bringing together the ingenuity of both companies on how to avoid CapEx spend in certain circumstances.

We're confident that -- and we're very, very impressed during the due diligence work that we did and the engagement we had with the Tate & Lyle management on their knowledge of the industry, their knowledge of their business and their network. And we're very confident that together, good ideas are going to come out and they are going to lead to savings and efficiencies and effectiveness.

And I'm currently showing no further questions at this time. I'd now like to hand the call back over to Jim Zallie for closing remarks.

All right. Thank you, operator, and thank you for joining us this morning. In closing, we are excited, and I think that's an understatement about the opportunity to bring these 2 great companies together. And I believe the transaction will strengthen our portfolio, deepen our customer capabilities and create vast benefits for our shareholders and other stakeholders. As always, I want to thank you for your continued interest in Ingredion on what was a very, very important day for us. Thank you so much.

This concludes today's conference. Thank you for your participation. You may now disconnect.

[Presentation]

Good morning, and thank you for joining us today, both in person and online. Sarah and I are pleased to announce and present Tate & Lyle's results for the year ended the 31st of March 2026. Before we start, I want to acknowledge that a week ago, we made an announcement under Rule 2.4 of the U.K. Takeover Code in which we confirm that Ingredion has made a conditional proposal to acquire Tate & Lyle.

Details of the proposal are on the slide. At this stage, there can be no certainty that any offer will be made nor as to the terms of such an offer. Clearly, we can't say anything more than we said in our announcement last week. So today, I'm purely going to focus on our results and the encouraging progress our business is making.

We have 4 key messages for you today. Firstly, the integration of CP Kelco has been successfully completed. And the entire Tate & Lyle team is focused on delivering on our priority of volume-led top line growth. Secondly, our full year results are in line with the revised guidance we gave in October, with performance impacted by muted market demand. Thirdly, we are making good progress on the strategic actions we set out in November to drive top line growth and strengthen our performance. Finally, with the integration of CP Kelco complete, our focus is on leveraging the power of the combination to accelerate growth. What's encouraging is that the combination is starting to gain real traction with our customers. And as we move into the new financial year, we are seeing early signs of top line momentum.

Let's start then by looking at the first of those key messages in more detail. Integrating 2 large global businesses is always challenging and takes focus and time. The fact that the integration has gone smoothly and has been completed without disruption to our customers is a testament to the energy and commitment of all our colleagues. The integration was made more challenging by both softer market demand than we expected and a complex geopolitical environment, notably the evolving tariff situation last year. While successfully completing the integration in these circumstances, was a significant achievement. Our financial performance was disappointing.

As we move into the 2027 financial year, we are determined to put that right. Looking forward, our #1 priority is to deliver volume-led top line growth. That's why when we renewed customer framework agreements for the 2026 calendar year, we selectively chose to drive volume and revenue growth. We are also acting at pace to deliver on the 4 strategic priorities we set out in November, and then I will come back to these in more detail later.

Finally, we continue to operate in a highly unpredictable geopolitical environment. And as we have done in the past, we will look to navigate whatever external challenges we face. Overall, our performance -- our focus is on delivering top line growth and stronger performance. With that, let me hand over to Sarah to talk through the financial results.

Thank you, Nick, and good morning, everyone. I'd like to remind you that I will focus on adjusted measures and items with percentage growth are in constant currency. Comparatives are pro forma unless I indicate otherwise, as if the acquisition of CP Kelco had completed on 1 April 2024.

Before I start, I want to describe our performance in the round. Despite a challenging year, we saw solid performance in our largest market of North America, encouraging [ resort ] performance in Asia Pacific despite the impact of tariffs. Specific challenges affected us in Europe, where we're impacted by lower bulk sweetener revenue and in Latin America, where we saw lower sweetener volumes. It's encouraging that around 2/3 of the portfolio continued to grow. The challenge moving forward is to build on the early signs of top line momentum that Nick talked about earlier.

That all said, our overall financial performance last year was disappointing, and let me take you through the headlines. On a statutory basis, including the impact of the acquisition of CP Kelco in November 2024, revenue was 16% higher and adjusted EBITDA was 13% higher. On an adjusted and like-for-like pro forma basis, muted market demand led to 3% lower revenue, and we delivered EBITDA of GBP 415 million, also 3% lower, in line with the revised guidance we set out in October last year.

Adjusted profit before tax was 5% lower at GBP 238 million, and adjusted earnings per share were 40.4p on a reported basis. We delivered GBP 164 million free cash flow with cash conversion of 70%, slightly below our target. Given lower earnings, the Board is proposing to hold the full year dividend flat, maintaining a healthy dividend yield. This chart shows the key drivers of lower revenue.

Volume and mix impacted revenue by GBP 34 million, with some mix improvements more than offset by volume declines. We invested GBP 33 million in pricing, such that overall, revenue was 3% lower in constant currency. There were some specific challenges which impacted performance. Approximately 20% of the revenue decline was from our bulk sweetener business in Europe. Over time, as demand for fiber grows, we will transition that bulk capacity into specialty products. But until then, its role is to help absorb fixed costs. It is likely to continue to be just less than 1 percentage point drag on growth in this financial year.

Softness in the sweetening market in Latin America, notably in Mexico accounted for a further 30% of the top line decline. Looking into the coming year, any further softness should be offset by growth of other ingredients. Elsewhere in the portfolio, we saw more resilience, including CP Kelco ingredients growing volume on broadly flat pricing and a more encouraging performance in Asia Pacific.

Turning now to the performance of our geographic segments, where, as I mentioned earlier, the underlying performance is more reassuring than the headline figures may convey. In the Americas, revenue was 3% lower, with EBITDA 4% lower. While pricing was broadly flat, volume was lower. As just highlighted, much of this underperformance was in Latin America for sweeteners. Encouragingly, in the U.S., despite muted market demand, notably in beverage, bakery and snacks, revenue was stable.

In Europe, Middle East and Africa, revenue decreased by 5% and EBITDA by 6%. Volume was flat, while pricing was lower. We came into the year expecting lower pricing, reflecting our decision to invest in price back into the market, particularly in Europe, in customer framework agreements for the 2025 calendar year. Performance across our core categories was varied with positive demand in dairy and beverage, somewhat offset by softness in soups, sauces and dressings. As previously stated, bulk sweeteners in Europe was the principal driver of revenue decline in the region, driven largely by lower sugar pricing.

Asia Pacific delivered robust performance, with revenue broadly in line despite tariff pressures and EBITDA was up 9%. Our North Asia business continued to grow well, while our China business was flat, reflecting the challenging tariff environment since July '25. Looking ahead, we see encouraging momentum as the power of our combined business and solutions offering increases customer engagement.

Moving on to EBITDA, which was 3% lower on a constant currency basis. EBITDA decreased as a result of the lower volumes and investment in price. COGS increases were broadly offset by $53 million of productivity gains, whilst the incremental growth investments were more than offset by cost and synergies, lower sales incentives and focused cost discipline. Our EBITDA margin on a constant currency basis was broadly flat. The reported margin of 20.7% remains attractive and well positioned compared to our specialty ingredient peers.

Now turning to other lines on the income statement. On exceptional items, net pretax exceptional charges were GBP 45 million largely driven by CP Kelco-related integration costs and the buyout of U.K. and U.S. pension schemes. Overall, there was a net GBP 48 million cash outflow associated with these one-offs. The adjusted effective tax rate was 23.9%, up 130 basis points. This increase is due to CP Kelco's operations being located in higher tax jurisdictions. We expect the adjusted effective tax rate in the 2027 financial year to be in the range of 23% to 25%. The Board remains committed to a progressive dividend policy to grow the dividend when earnings allow and to hold dividends in other periods. Given the reduction in earnings this year, the Board is recommending a final dividend of 13.2p per share, bringing the full year dividend to 19.8p in line with last year.

Turning now to free cash flow, for which comparatives are as we reported a year ago. Overall, free cash flow was GBP 164 million, some GBP 26 million lower than the prior year. Reported adjusted EBITDA was GBP 34 million higher, net working capital change by GBP 51 million. The majority of this movement related to higher inventory to mitigate the impact of tariffs on the supply chain and support customer supply continuity where we manage the consolidation of bio-gums capacity. I will talk to this more later.

Receivables also increased given extensions in the terms of framework agreements with some customers to support our volume-led growth priority. Capital expenditure was GBP 4 million higher at GBP 125 million. For the 2027 financial year, we expect capital expenditure to be in the GBP 110 million to GBP 130 million range. Net interest increased by GBP 26 million to reflect higher borrowings following the acquisition of CP Kelco while cash taxes and other items fell by a similar amount benefiting from in-year tax reimbursements and lower taxable earnings.

Our balance sheet remains robust. Long-term debt financing is in place at a competitive mix of fixed and floating interest rates and with a well-balanced range of maturities running out to 2037. We continue to target long-term leverage to be between 1 and 2.5x net debt to EBITDA, and our leverage stands currently at 2.3x. Net debt at 31 March was GBP 939 million, a GBP 22 million reduction.

At the end of October last year, we entered a $180 million 2-year term loan facility in drew it down. These funds were used to repay an expiring $180 million U.S. private placement fixed rate note on maturity. Consequently, our weighted average cost of debt is currently 4% with a weighted average maturity of 4.7 years. And we put a slide in the appendix illustrating our maturity profile.

We continue to have strong liquidity with an access to nearly GBP 1 billion through cash in hand and a committed and undrawn revolving cash credit facility of $800 million, which we have recently extended to 2031. We have good financial stability providing attractive optionality to support future organic investment and return of capital to shareholders.

I'll now hand back to you, Nick.

Thank you, Sarah. Moving now to the good progress we are making on the actions we set out in November to drive top line growth and stronger performance. By way of a reminder, these actions are focused on 4 priorities: the first is targeted investment to accelerate customer wins in key growth areas. Second is delivering the benefits of the CP Kelco combination. Third is accelerating productivity and lastly, to strengthen our balance sheet and deliver shareholder returns.

Let me start with the first priority. We continue to make a series of targeted investments to ensure we have the insights capabilities resources and tools we need to win with our customers. Given our significantly expanded portfolio and solutions offering, over the last few months, we've undertaken a detailed customer segmentation exercise which has characterized our customers into 4 distinct groups: partner accounts, enterprise accounts, accelerators and core accounts.

We are taking the output from this exercise and realigning our customer-facing teams, including our sales, technical services, applications and marketing teams to focus on those customers and subcategories where we can accelerate growth. Alongside this segmentation exercise, we are recalibrating which customers are best served through distributors. To ensure we have the capabilities in our global and regional teams to capture this growth, we are increasing our investment in areas such as applications, sensory science, nutrition science and process development.

We are also accelerating the rollout of our solutions chassis program to speed up customer innovation. Eight chassis, mainly for mouthfeel solutions were launched during the year. Meaning we now have 18 chassis available in the market with a further 9 in development. To accelerate their adoption we trained over 300 colleagues during the year, supporting the delivery of many customer projects across our core categories. We also continue to selectively invest in technology to enhance the effectiveness and agility of our customer-facing teams. We have invested in developing a new generative AI tool with the ability to search our broad technical and scientific libraries to provide faster and deeper insights for our sales and technical teams as they develop solutions to solve customer formulation challenges.

The rollout of this new tool started in February and is already having a positive impact on how we serve our customers. We are also working to improve our customer relationship management tools. And this year, we will implement a single integrated platform, which will improve the visibility of pipeline progression, technical resource allocation and enhance our sales team's performance management.

Moving to our second priority, which is to deliver the benefits of the CP Kelco combination. We are targeting revenue synergies of 10% of CP Kelco's revenue or around $70 million by the end of the 2029 financial year. While it's still early days, we are making good progress with around 10% of our target delivered to date. Cross-selling, which is the sale of CP Kelco's ingredients and solutions to Tate & Lyle customers and vice versa is a key way we will deliver these synergies. It's therefore pleasing to see the value of the cross-selling pipeline more than doubled in the second half and now stands at over $100 million.

I'm now going to hand back to Sarah to talk about cost synergies and productivity.

Thank you, Nick. When we acquired CP Kelco we targeted annualized run rate cost synergies of at least $50 million by the end of the 2027 financial year. As this slide illustrates, we have made strong progress in pursuit of this target. Last year, we delivered synergies of $24 million, predominantly people related, but supported by indirect cost savings and some procurement benefits. The annualized run rate of these actions already taken means we have now met our target of $50 million, 1 year ahead of our plan.

Moving to our third action, which is increased productivity across the enlarged group. In addition to the delivery of cost synergies, I'm pleased to say that productivity once again showed excellent progress. We delivered a further $53 million of productivity savings in the year with $33 million of this coming from operational efficiencies and cost reduction and $20 million from procurement and supply chain. This brings our total productivity savings over the last 3 years to $144 million. In November, we announced that we're increasing our 5-year target of $150 million savings by the end of the 2028 financial year by an additional $50 million to $200 million. Given the strength of our productivity pipeline, we are confident we could reach that increased target.

Our productivity culture is deeply embedded across our global operations organization. And we recently launched a campaign to extend this productivity mindset across the entire organization. The success of the program is based on a very granular Six Sigma approach to driving productivity. This is illustrated by the breadth of projects we employed to deliver savings.

Last year, we initiated over 500 productivity projects, of which some 27 delivered savings of over $0.5 million each. Three examples of these larger projects are on this slide, process improvements at our sucralose plant is saving $1.4 million annually. Finding ways to increase airflow in the spray dry at our corn wet mill in Indiana is saving $1 million. and the optimization of ocean freight transit times is saving $1.2 million. A major productivity and cost saving project that is currently underway is the consolidation of our bio-gums production capacity. We had expected to see a financial benefit from this consolidation in the 2027 financial year of some $20 million. However, due to rescheduling, we now expect this financial benefit will be delivered in the 2028 financial year.

Turning to our fourth action to strengthen our balance sheet and shareholder returns. We remain very focused on cash generation. Our target is to achieve cash conversion greater than 75% each year while delivering our priority to drive top line growth. This year, we'll be undertaking a group-wide project to optimize our warehousing activities. We will also look to improve inventory management across the business. with the continued expansion of procurement and planning optimization tools as well as our operational excellence programs. Another area of focus is the disciplined investment of capital. We continue to bring rigor to the investment appraisal process and new capital investments need to meet attractive rates of return. Our capital allocation policy remains unchanged.

And with that, I'll hand back to you, Nick.

Thank you, Sarah. Moving to our fourth key message for today, which is how we leverage the power of the combination to accelerate growth. The combination with CP Kelco has created a unique customer proposition. This is based on 3 strengths. Firstly, we have the broadest Ingredion's portfolio and solutions toolbox across our 3 platforms. Secondly, our unique capabilities to formulate across our 3 platforms to provide the solutions our customers need. And thirdly, our unrivaled scientific and technical expertise.

We operate in a large and attractive market. The global specialty food ingredients market is around USD 70 billion with about $20 billion of this market addressable by Tate & Lyle's 3 ingredients platforms. In each of our 3 platforms, we have a market-leading position. In total, we have over 1,000 different sweeteners, starches, pectins, specialty gums and dietary fibers, all with their own different functional attributes or nutritional benefits. Each platform has a large addressable market. The sweetening and mouthfeel markets are already sizable and have significant growth potential given the food trends we are seeing. And the sugar still makes up around 80% of the global sweetening market, there is an estimated $3 billion of sugar replacement opportunity in addition to the $20 billion addressable market.

Whilst comparatively small today, the fortification platform also has significant growth potential, given increasing awareness of the importance of fiber in the diets. I will talk more about this opportunity later. All this gives me confidence that despite current market environment, despite the current market environment, the fundamental growth drivers of our business remain strong and continue to offer significant market penetration opportunities.

I see these coming from 3 areas. Firstly, societal trends such as population growth, heightened awareness of the link between diet and health and the continued need for convenience. Secondly, food industry trends with arguably the biggest opportunity being to reformulate ultra processed foods to improve their nutritional content. Other areas, which are, of course, interrelated include increasing demand for sugar and calorie reduction as well as fiber and protein fortification, cleaner labels and cost optimization in today's world. The third driver is capturing the benefits of the CP Kelco combination. In addition to delivering on targeted revenue synergies, this includes leveraging our expanded portfolio and enhanced technical capabilities with both existing and new customers, particularly our leadership in mouthfeel.

And also benefiting from our increased presence in the fast-growing markets of Asia, Middle East and Africa and Latin America. With the growth opportunity clear, our focus is on leveraging the power of the combination to drive top line growth. This will build over time, and I'm pleased that we are now starting to see that happen in the marketplace. Let me give you some tangible examples. A large customer in China wanted to improve the mouthfeel experience of one of its premium yogurt drinks, while at the same time developing a cleaner label.

We would have had difficulty providing the right solution before, but with our combined portfolio, a solution based on our CLARIA clean-label starch and pectin provided the answer. In the U.S., a customer wanted to create a new chocolate milk product with no added sugar, an organic certification and obviously provide a great taste experience for the consumer. Our technical team created a series of prototypes, which led to a blend of TASTEVA stevia sweetener and gellan gum, giving the customer the perfect solution.

In Europe, a large multinational dairy customer wanted to enter the high-growth meal replacement category for the first time by creating a plant-based product targeting on-the-go nutrition. The customer came to us and told us that the product had to have a creamy mouthfeel, a clean label and meet certain other technical requirements. In this case, a combination of CLARIA starch and gellan gum provided both a strong sensory experience and the required technical protein and mineral suspension.

Finally, in Latin America, a combination of sucralose and NUTRAVA Citrus Fiber provided the solution for one of our largest global accounts who wanted to optimize the cost of its ketchup and maintain its important mouthfeel characteristics. What's clear around the world is that customers are increasingly recognizing a much stronger solutions offering and the benefits the combinations bring.

Moving to look briefly at fiber, which we see as another significant growth opportunity. Fiber is a key nutrient for people at all stages of life. Awareness is increasing of the importance of fiber in the diets with 58% of consumers in the U.K. saying they plan to increase their fiber intake in 2026. But the reality is the intake remains low, with only 3% of U.K. adults getting enough fiber each day. We know that consumers cannot eat enough fiber purely from Whole Foods. So it's increasingly accepted that people will need to consume foods fortified with added fibers to close the fiber intake gap.

This is shown by a 13% increase in new products launched globally in 2025 with a fiber claim. Fiber is also very important for GLP-1 users. GLP-1s suppress appetite and so users can't and don't eat as much food. This means every bite counts when it comes to nutrition. We are increasingly providing solutions for customers, specifically targeted at GLP-1 users.

Let me give you just one example. In North America, one of our largest customers in the snacking category wanted to reformulate some of their products to make them healthier and directly target GLP-1 users. We created a solution using our PROMITOR and STA-LITE soluble fibers, which provided an additional 6 grams of fiber per serving and a front-of-pack fiber claim. The customer has now launched 4 products with the solution and has given us 3 new briefs to work on fiber fortification on other product lines.

The increasing traction with customers is showing through in the growth we are seeing in our new business pipeline. Last year, the value of our new business pipeline increased by 15%. Revenue from new products increased by 9% on a like-for-like basis. and revenue from solutions as a percentage of new business wins was 35%. While the market environment remains challenging, the progress we are seeing gives me real confidence that we're on the right track. And that we are well positioned to benefit as and when market demand improves.

Turning now to the outlook and summary. For the year ending 31st of March 2027, on a constant currency basis, we currently expect to deliver modest revenue growth underpinned by volume growth weighted to the second half and broadly flat EBITDA before the around $20 million impact of rescheduling the consolidation of bio-gums.

Our outlook currently assumes a limited impact from the conflict in the Middle East, but we are taking actions to mitigate cost inflation through a range of initiatives, including procurement activities, operational discipline and pricing action. So to conclude, with the CP Kelco integration complete, our priority is clear. to drive volume-led top line growth, and we are seeing early signs of progress. We are making good progress on the strategic priorities we set out in November and on leveraging the power of the combination to accelerate growth.

Over the last 6 years, the business has been repositioned to be at the center of the future of food. Today, we have a portfolio that is perfectly placed to address growing consumer demand for healthier, more nutritious and sustainable food and drink. The power of the combination is clear. And our focus now is on execution, driving top line growth and strengthening our performance.

With that, Sarah and I will be happy to take your questions. May I remind you that under the U.K. Takeover Code, we can't comment on anything relating to Ingredions proposal we announced last week.

We will take questions both from the floor and those joining remotely.

For the purposes of the recording, please state your name and institution. So with that, can we have the first question from the floor?

Can you hear me?

Yes.

This is Joan Lim from BNP Paribas. I just had a couple of questions. So you mentioned that your H2 weighted growth for 2027, what gives you the confidence that volume growth will recover? Are you seeing any trends in April and May as you spoke about some momentum to the start of the year? That's my first question.

Okay. So let me take that one. So what gives us confidence? A number of things. Firstly, we're seeing good momentum coming into the year. Q4 ended as we expected, which is obviously the first year of this calendar year. And we're seeing -- we saw good revenue growth in April as we started the year. So we started strongly.

Secondly, we always said that momentum would build through the year given the power of the combination amplifying. So the pipeline strength will grow through the year. The segmentation exercise and focusing our sales team on the customers we want to grow with faster will grow through the year as well the cross-selling pipeline. So that's the second reason.

The third reason is when you think about the shape of last year, we really started to get significantly impacted by tariffs in North America and to a lesser China in the second half. So remember, the North American slowdown in volume was weighted to the second half for us when we looked at the market. So we're starting to lap that as we go into the second year, into the second half in the sense that that's already -- the tariffs are already built into the base.

And then lastly, of course, as we build momentum with customers and the power of the combination grows. And remember, we've only just annualized the point where we put our sales teams together, we should see more momentum going into the contracting round for the following year as well. So it's really a combination of all of those things put together.

Okay. And for Americas, it still declined 3% in volumes. Why has beverages been weak? What are some of the ways you think you can outgrow markets?

So look, I mean, specifically in the Americas, we saw more weakness in sweeteners in Latin America. North America actually was relatively stable from a revenue perspective. I mean, ultimately, the repositioning of the portfolio and the growth of the new products in the portfolio and the newest sweeteners to offset some of that sweetness is what we'll start to see flow through this year.

And of course, we're lapping out of that now. So that's -- I mean, that's really the shape of it. And we're absolutely seeing the momentum in the new portfolio and the solution selling start to flow through. As markets stabilize, that will offset some of the declines we saw in the rest of the portfolio.

Next question in the room? Matthew?

Matthew Webb from Investec. The -- I wonder if you could just comment on the new product sort of development and launches in -- particularly in the U.S. but more broadly. And specifically, it feels like there's sort of 2, sort of, factors here. There's on the one hand, there's clearly a lot of change going on in consumer demand for different types of foods for different properties. But on the other hand, we still got quite a subdued consumer environment, which typically slows that process.

So I just wonder if you could comment on sort of where you think we are now in terms of the balance between those 2 and maybe how you see that playing out over the next sort of 12 months or so?

Good question. So let me start with North America because that's probably -- because it is still the biggest part of our business. It's clearly what we saw last year was a lot of noise around regulation, Maha, GLP-1, but all of which pointed towards healthier diets over time. And in our case in the business that we're in, reformulation to create better nutritional outcomes and lots of conversations with customers about what to do in that regard.

I've given you a very good fiber example in the presentation that led to launch of new products. Environmentally, though what happened last year was, you saw this massive impact to tariffs, significant consumer inflation, volume slowdown and a natural slowdown in innovation as well because people are trying to figure out how to manage those impacts. What we're now seeing is sort of as Maha starts to become a little bit clearer is real engagement in those trends that I've talked about.

I think the question is, as we see how the Middle Eastern conflict impacts overall consumer sentiment and demand. Do we see an acceleration in product launches or not? We're seeing -- definitely seeing an acceleration in conversations at what point in that translates into real launches and therefore, new business. So we're still watching to see how that evolves. Encouragingly though, we have seen momentum coming into the year, on the top line. And all of the indicators in the pipeline suggests that will happen over time. The question is what time.

And then second question, I don't know whether you're going to be able to answer this one, given the restrictions you're under. But just specifically on the delay to the bio-gums capacity consolidation, is that something that you have been aware of for a while long enough for Ingredion who have been aware of that in their due diligence and therefore, comfortable with that in terms of the offer that they've made?

There is no comment I can make on that specifically. No, I can't. I've got my handlers looking at me.

So why don't we go to a question online, and then I'll come back to the room. I think we've got Karel Zoete on the line. Karel, can you hear me?

Yes. I have a question with regards to the outlook, you say we kind of assume there are no real impact from the conflict in the Middle East. But can you discuss a bit what the higher energy cost mean for the cost base? And what you've seen in terms of demand trends?

And the second question is about reinvestment. You're optimistic about the savings and the synergies that are coming in. But at the same time, we see stable profit in the current fiscal year. So what are areas you say, this is where we really reinvest, which is holding back profit growth?

So what I take your first question. So on the Middle East, we've got limited exposure to the affected countries. So about 1% of our revenue goes in there. We're actually seeing a lot of customer demand still. And we're finding ways of shipping into the Middle East now through going through different ports, et cetera. So we are now shipping in.

And actually, I think we'll see that continue. And obviously, there might be a rebalancing of stocks. In terms of overall demand, as I said, we're seeing some encouraging signs coming into the year. So no real impact near-term impact on demand. In terms of costs, we've got a very rigorous hedging policy on energy. So we're well covered through the first half of the year. But there are incremental costs as we go through the balance of the year, and we're going to have to look to balance that off with productivity and procurement initiatives and selectively pricing and passing through things like freight costs where necessary. So we're assuming a limited impact in our outlook at this point.

I mean if you can predict what's going to happen tomorrow in the Middle East, I'll tell you what the impact is going to be for the full year. But currently, we're assuming a limited impact, and we're controlling the things that we can control. Sarah, I don't know whether you want to take -- say anything more specifically about energy and then take the question on the reinvestment versus the sort of the stability in earnings?

Okay. Thanks, Nick. Karel. So I think indeed, I think it's just to remind you that sort of, so energy is about 5% of our costs. And as Nick mentioned, we're well covered in this calendar year. I think in the near term, the freight costs, which, of course, is seeing some increase, that's a more straightforward conversation to have with customers.

But again, it's going to be considered in the around that #1 priority is growing volume-led top line. So I think we're watching and seeing very much in the near term. And then your first question about investments. So it's how do we ensure we have the right people and capabilities in the front line to support the volume-led revenue growth. So it's the people, but it's also training the people, the technology support the digital investments to support to give them even more confidence. So giving them the tools and the investments to give us confidence that we can grow the top line.

And of course, we're trying to offset some of that. We've talked about delivering the cost synergies. So you've got a $15 million, $20 million help into FY '27, but again, remember, there's always the drag on inflation. We want to reset sales incentives. So it's a -- we work really hard to try and stay still. But #1 priority in the organization is investing capability to give us confidence about top line growth.

Karel, if I take us back and just add one more point to that, which is the benefits of bringing the 2 organizations together is allowing us to reinvest in a more challenging environment than we had anticipated in the last couple of years and still maintain a very attractive earnings profile and margin structure in the business. So it's another example of the power of the 2 businesses coming together. It's giving us the flexibility that we might not have had as one business.

Let's come back into the room, any questions in the room? I think over here.

This is Artem from Rothschild & Co Redburn. One of the messages we get from the presentation is that the integration with CP Kelco is successfully complete I'm very keen to hear about your learnings about the new business after about a year or so.

Specifically, first about the portfolio. It sounds like some categories are performing better than others. Do you expect the underperformance to improve? Or do you see that a bit more structural? And secondly, about competition by region? Have you seen any unexpected intensification of competition in any particular region? That would be interesting to hear.

Sure. I mean, as you rightly said, we've said today that the integration is complete, and it's been very successful in what we've been trying to achieve. We've learned a lot and a lot of positives and a couple of learnings that we could maybe have done things differently. But what we've really learned is the power of the combination together makes a difference with our customers.

I mean, and our sales teams and our application scientists working together are creating things that we couldn't do before for solutions for our customers. And that's the underpin of our confidence in the medium term and the future of the business because that is the future of what we were trying to create this idea of a company that can really help with improving the nutritional content of food in a way that consumers are looking for.

And we can do things today that we couldn't do. The 4 examples I gave you, we couldn't do as the old Tate & Lyle. We can do as the Tate & Lyle. And that's giving us huge confidence in the future. We've learned a lot about the power of common cultures coming together. The benefits of the fact that both companies believe this was really the right thing to do, really stood us in good stead as we went through. An integration process that's never easy because you're changing your organizations.

I'd say the couple of things that we maybe learned that on the sort of more challenging side is, if I had my time again, I would probably accelerated the commercial integration because we spent 6 months putting that together and only started to face into customers as one in April last year, that was really doing that quicker, I think, would have been -- would have benefited what we're seeing today more, but hindsight is a wonderful thing.

And then, of course, as we've talked about, unfortunately, the significant benefit of the productivity investment that was made in bio-gums even before we acquired CP Kelco is taking longer to deliver than we thought. It's there, it's going to be delivered, but it's a phasing issue that is impacting the near term. But from everything we've learned, by far, the most important thing is a different view on us from our customers and the different capability for us to serve their future needs. And in terms of the medium term, that gives us huge confidence.

Can I -- I'll come back to you in a minute, Matthew, if I will. Because, Alex has been very patiently waiting online. So Alex, I'll come to you if you can hear us.

It's Alex Sloane from Barclays. Just the first one, just in terms of bio-gums, the $20 million impact. Could you give us a bit more color on maybe what's gone wrong versus your plan? And how confident you are that, that drag couldn't be worse than the $20 million this year? And just in terms of thinking about how that unwinds in '28, is it just the $20 million headwind that goes to neutral? Or is it kind of a swing to a $20 million positive, so more like a $40 million year-over-year swing.

That would be helpful. And secondly, just can you remind us in terms of the key terms of the Primient 20-year supply agreement, is there any change of control clause on either side? And can you maybe just remind us how much of Tate's current supply is sourced from Primient and versus what Tate still produces on Primient's behalf?

Sure. So let me take the second question first. So in terms of the Primient supply agreement, we've always said that it's a long-term agreement that survives change of control.

I can't say any more than that because that's all we've said in the public domain. I mean there is documentation out there that's available. And I'm being looked at again by my advisers. Obviously, the amount of our business that comes from Primient has to significantly decreased since the CP Kelco transaction. So it's much less than it was, but it's still an important part of our business.

In terms of the bio-gums, I wouldn't say anything has gone wrong. I mean sometimes when you're scaling up new technology. So we're going from kind of we're significantly scaling up the fermentation technology, and it's taking a little bit longer to stabilize the process and it's taking a little bit longer to reference new products with customers from the new technology. So it's just a phasing issue. We're 100% confident that it's going to flow through, and we're really clear about the phasing now in terms of when the delivery is going to happen.

And as we go into next year, Sarah can probably comment more on the numbers. but we're going to see a benefit of GBP 20 million for sure as we go in. And over time, that will increase. Is that...

Yes, absolutely. Maybe just to add. So as we complete this consolidation, that GBP 20 million falls away. And obviously, as we go through this year, we'll talk more about the outlook into FY '28.

Matthew, I said I'd come back to you.

Yes. This is also related to the bio-gums, but just a broader question on working capital guidance for next year. I think you've mentioned that the bio-gums delay will have some inventory implications. Obviously, in the year just gone, there were some issues that meant that you had to increase inventory levels. Just any overall comments and any specific number guidance would be very helpful.

Take that, [indiscernible]?

I would think so.

So yes, great question. So indeed, we have this GBP 50 million headwind in FY '26. Going into FY '27, that turns to a more neutral position. Because, yes, as we -- there's some continued build of the bio-gums, but also as we implement the sort of the tighter working capital management across the organization, we are confident that we can offset. So it will be a neutral impact for cash for FY '27.

Great. And then I fear the answer will be no. But on a purely factual basis without making any comments about competition implications, can you make any observations about the extent to which you compete directly with Ingredion in any particular categories on a purely factual basis?

On a purely factual basis, yes. In detail, no. We both make starches.

Would you like to elaborate?

No. At this stage, no. I'm sorry.

All right So let's go back on to online. I think we've got Matthew Abraham from Berenberg with a question.

Just looking to get a bit more color on the pricing that you've taken in response to the Middle East. Just looking to understand what specific markets and categories you've pushed pricing in and magnitude of pricing that you've taken in response to the Middle East impact. Also, just wondering a follow-up if there will be the opportunity for you to take follow-up pricing actions if the initial view of the limited impact from the Middle East is exceeded?

Sure. I mean so in simple terms, to answer your first question, to date, where we've taken limited pricing actions to offset freight costs primarily because that's the primary thing that's hitting our business. As we did in the Ukraine crisis. If you remember when that hit just after contracts have been renewed for the new year, we did revisit pricing as a result and successfully passed through. What at the time were very significant cost increases. We have that flexibility. We'll navigate and see how things evolve through the through the next few months to see if we need to do that or not. And the moment our focus actually on is recovering the freight costs we're seeing and continuing to maintain top line momentum.

Okay. Any more questions in the room? In the back there?

Priya from UBS. I just had one question. So on APAC, obviously did a lot better in terms of top line and EBITDA performance compared to the other regions. But you talk about some competition in parts of Asia due to excess capacity in China. I was wondering if you could give some color on which ingredients that you're seeing these oversupply pressures and how that plays out in 2027?

Yes. So the competition that we're principally referring to is there's still relatively muted demand in China. We're seeing stability but not significant growth yet. And across some of the portfolio, so things like sweeteners, and some of the gum business, there is competition out of China that is locally having some impact.

So I'll probably pick out those things as being the most significant and it's primarily on Xanthan not gellan gum.

Okay. Any more hands in the room?

Okay. Then if there are no more questions, let me finish, and I'll just finish with 3 final points. First, as I said, with the CP Kelco integration successfully completed, the entire Tate & Lyle team is focused on delivering volume-led top line growth and improving performance. Secondly, the power of the combination really is starting to gain traction with customers, and this is reflected in some early signs of top line growth as we come into the new year. And finally, longer term, we remain very, very confident in the future growth potential of the business. It's clear that consumer demand for healthier, more nutritious and sustainable food and drink is going to grow strongly, and our leading positions across sweetening, mouthfeel and fortification make us very well placed to capture that growth going forward.

So with that, thank you for joining us, both in the room and on the webcast, and we wish you all a very good day. Thank you.

Good morning, and welcome to the conference call for Tate & Lyle's Q3 Trading Statement. Your speakers today are Nick Hampton, Chief Executive; and Sarah Kuijlaars, Chief Financial Officer. I will now hand you over to Nick Hampton for some opening remarks.

Thank you, operator. Good morning, everyone, and thank you for joining this third-quarter conference call. I will start by making a few remarks on our performance and strategic progress, and then we'll open it up to Q&A. Trading in the third quarter was in line with our expectations and consistent with the first half. Our guidance for the full year remains unchanged. On a pro forma basis and in constant currency, revenue was 2% lower in the quarter, reflecting continued muted market demand with performance in all regions broadly in line with the first half. On a reported basis, which includes CP Kelco from the date of acquisition on the 15th of November 2024, group revenue was 15% higher.

For the 9 months to the 31st of December 2025, on a pro forma basis, revenue in the Americas was 2% lower, with modestly higher pricing more than offset by lower volume. In Europe, Middle East, and Africa, lower pricing resulted in 5% lower revenue. While in Asia Pacific, revenue was up 1%, driven by higher volumes.

Turning to the renewal of customer framework agreements for the 2026 calendar year, which is well advanced. With our #1 priority returning the business to top-line growth, we have selectively chosen to invest to drive volume and revenue growth. This is the right thing to do for the business, giving us a stronger platform for future growth, and we are pleased with the engagement from customers to our expanded offering. We are making good progress on the series of actions we set out at our interim results to drive top-line growth and improve performance. Let me give you 1 or 2 examples of progress. We continue to accelerate the rollout of our solutions chassis program with a focus on mouthfeel.

We launched 2 new mouthfeel chassis in the quarter, one to improve the stability of portable salad dressings and another to support egg reduction. The level of customer engagement on our enlarged portfolio remains high, with the value of cross-selling opportunities in our new business pipeline increasing by more than 1/3 in the quarter. Revenue synergies from the CP Kelco combination are growing in line with our expectations, and we remain confident that run-rate cost synergies will exceed our target of $50 million by the end of the 2027 financial year.

And finally, our 5-year $200 million productivity program continues to operate well, with further savings delivered in the quarter. Overall, then, I am pleased with the progress we are making. There is a real determination and focus across the business to deliver on the actions we are taking, and I am confident that in the near term, they will improve the top-line performance of the business. We will give you more detail of our progress when we announce our full-year results in May. At that time, as usual, we will also provide guidance for the 2027 financial year.

To conclude, with our leading positions in sweetening, mouth and [indiscernible], we remain well placed to benefit from the global trends towards healthier and more nutritious food and drink. With the breadth of our portfolio, our formulation expertise, and the targeted investments we are making to accelerate customer wins in key growth areas, we are well-positioned to drive profitable revenue growth over time.

With that, Sarah and I will be happy to take any questions.

[Operator Instructions] We will now take our first question from Karel Zoete from Kepler Cheuvreux.

I have 2 questions. The first one is in regards to the price investment you mentioned to sustain volume growth or to improve volume growth. Can you be a bit more specific which markets you decided to invest and what that might mean for pricing going forward? And the other question is around fiber. So I think more and more evidence or discussions in the public domain about fiber, fiber being the new protein, et cetera. What kind of engagement do you see with your customers on the fiber ingredients you sell?

Okay. Karel, let me pick up on the fiber question first. I think it's an important one, and I'll let Sarah handle the selective view on pricing. But I mean, fiber clearly is a big global trend. In fact, there was an article yesterday in Bloomberg about fiber maxing. And we're seeing very encouraging progress with customers on our fiber portfolio, both products going into market, notably in the U.S. market, where in both beverages and dairy, we're seeing fiber fortification as a trend, and increasing the pipeline for fiber is growing. But it's a global trend as well, and we're seeing that trend across Europe and Asia, too. And I expect that to continue as we think about the continued desire to create more nutritious processed food, especially in a world where people have a significant shortfall of fiber in their diets, and all of the nutritional trends we're seeing point towards fiber addition as a strong growth opportunity for us going forward.

Thanks, Nick. So when we think about our framework agreements, I think it's worth taking a step back, and we're all very aware that market demand remains muted. And as we stated, our #1 priority is to deliver the top-line growth. So that's volume and mix-driven top-line growth. So we've taken the decision to set our business up stronger for the future is that we're selectively investing to drive that volume momentum and the revenue growth. So we think about this is we're being very selective. So by product, by customer, by region, to ensure that we're setting ourselves up for that growth, given we now have the broader portfolio following the acquisition of [ Kelco ].

Our next question is from Ranulf Orr from Citi.

Just one for me. I mean you talked a bit in the past about the sort of 4Q improvement. Could you just provide a bit of an update on that? What's going well and where you have visibility on some of those sort of factors coming through?

You mean in the fourth quarter?

Yes, yes.

I just want to get clarity on the question. Look, so I mean, I think we're seeing encouraging signs of increased customer engagement on reformulation. It's very clear the sentiment in the market is our customers at least increasingly thinking about the need to put price back in to drive momentum. But we're not assuming any improvement in market outlook in the fourth quarter in our underlying guidance for this financial year. What we saw in the third quarter was consistent performance from the first half and very clearly in line with our expectations. And so far, as we've entered the fourth quarter, we'd say the same. Always as you go from Q3 to Q4 across the calendar year, you can get some kind of pluses and minuses between December and January from a phasing perspective. But we're seeing the kind of customer demand that we would be expecting, given the underlying guidance given for this year.

And just one more, if I may. On the price investments for the year ahead, can you give any kind of quantification or indication of the scale of those, maybe in relation to the current year?

Look, I mean I think we haven't finished yet because we're still closing out the renewal agreements for this calendar year. And we'll give you a precise view on that when we get to our May results, as things have settled down. But I think it's fair to say that a little bit more this year than we did in this calendar year than we did in the last calendar year to ensure that we're really driving momentum with key customers. And you're obviously offsetting that with real focus on productivity and the benefits of the combination coming through in both cost synergies and the revenue synergies, of course, let's not forget, this is now the second year of the new business. And this is the first year we're entering as one combined business.

We'll move to our next question from Joan Lim from BNP Paribas.

Quite a few of my questions have been asked, but maybe just could you provide more color on trends by regions and category, like for example, which category has been doing well, or you're seeing more uptake with customers. So you mentioned a bit about fiber. Is that more driven by innovation in beverages, for example, and supported by GLP-1 users taking more fiber? My second question is, do you have any indication of how FX will be like for the next year? And lastly, maybe an update on CP Kelco's volume and margin recovery, please?

Okay. So let me give you some headlines on the overall shape of what we're seeing in the market, and then maybe Sarah can pick up on the ForEx and the CPK question. I mean, overall, what we saw in the third quarter was quite consistent with the first half. In the Americas, we're seeing modestly higher pricing more than offset by lower volume. And that's very consistent with the Nielsen volume data that we saw in the first half, where you saw volume down and value driven by pricing, which was in part the pass-through of tariffs at the time, as you remember. And that's been pretty consistent. In Europe, volume pretty flattish volume mix with the pricing investment driving lower revenue. And then in Asia, encouragingly, some revenue growth driven by higher volumes, so some signs of momentum.

I think underlying that, though, I think it's important to say what we're seeing with customers in terms of trends is some clear benefits of the combination flowing through. So in the quarter, the cross-selling pipeline was up over 1/3, having been strong at the first half. And we're seeing double-digit growth in our innovation pipeline to customers. And that's driven by some key themes. So as we've already talked on the call, we're clearly seeing a focus on fiber fortification across many categories. And I think it may well be driven by this need for nutritional density, driven by nutritional needs for processed food and the GLP-1 point you made. We're seeing that especially in beverages and dairy in the U.S. In EMEA, we're seeing dairy and beverages being more resilient, Baker and snacks a bit softer. And in Asia, actually, overall robust category performance. We talked about recovery in China at the half driven by CPK.

Beyond fiber fortification, the other trends we're seeing is renovation for value. So cost efficiency and product renovation. We're also seeing continued focus on sugar reduction, and that linked to mouthfeel that we talked about at the half, where as you take sugar out, being able to control the texture mouthfeel of product is really important. And that's where the combination is really helping us build a stronger pipeline, which we expect to build as we go into next year.

Thanks, Nick. And the next question is about ForEx. So indeed, we saw a headwind of -- given the U.S. in the first 9 months, which is approximately 2% to 3% of revenue, and that we expect to continue. That is partly offset by the strength in euro. Remember, with the acquisition of CPK, we have a broader footprint. So there's also some impact of the Danish krona, et cetera. But overall, you expect a headwind in the sort of the 2% to 3% on the top line. That's a slightly higher impact on EBITDA given the important contribution from the North American and the profitable North American business.

Turning to CPK. So clearly, the integration continues to go well. cost synergies well in hand. And as Nick has spoken about now, obviously, the attention on the pipeline growth of those cross-sells. And it's been really powerful going into the conversations this year as a combined portfolio, punching up the combined commercial staff, really demonstrating the ability and the strengthening capability of the portfolio and the stronger [indiscernible].

Our next question is from [indiscernible] from Barclays.

So my question is on the selective investments. How should we think about the margin impact of these investments as we move into FY '27? Are you viewing this as a 1-year reset to drive volume recovery or a more structural change in pricing intensity? And my second question would be, regarding like to what extent can with the ongoing productivity program and CP Kelco cost and revenue synergies can offset the margin impact of these investments? Should we expect net margin pressure or stability as we bridge from FY '26 into FY '27?

Okay. So I think let me start by saying we'll give very clear guidance on fiscal '27 when we get to full year results. So we need to complete our planning process for next year and see how trading evolves in quarter 1 of the calendar year. But the way I think about it is if you think about the building blocks going to next year, we're clearly because of the market demand remaining muted, putting some selective investments into price to drive the top line, both volume and revenue.

Alongside that, we've got clear offsets from productivity delivery and accelerating the benefits of the CP Kelco combination. And different to last year, we've also got the benefits of the combination flowing through in terms of the pipeline and the cross-selling opportunities to support the framework agreement renewals. So we're confident that that builds a strong platform for growth. Where that leads us to on overall earnings delivery and margins, will be much clearer about when we get to our full year results. But the key here is the quality of the portfolio to build a growing pipeline of business with customers, as we see markets start to improve and the trends that are our friend from a positioning of the business perspective, we fully expect to drive growth going forward and into the medium term. And we'll give very clear guidance on the nearer term when we get to our results.

Just a follow-up on the fiber thing. Thanks for giving some color on that. So are you seeing a meaningful increase in customer briefs or RFP activity linked to high fiber formulations? And how does the current pipeline compare with the time last year?

So if you think about our pipeline in the last quarter, it grew double-digit overall. And that is driven by a focus on things like fiber fortification. I think the question always is at what pace of those pipeline projects convert into innovation in the market. And as you know, we've probably seen -- we haven't really seen an increase in innovation pace yet, but we're anticipating that coming as these projects start to flow through.

And Nick, maybe I'll just add, it's not simply just adding fiber to a product. With fiber, you really need the mouthfeel. And that's really where our sweet spot because you really need the appealing mouthfeel for the fortified product to be successful in the market.

We'll now move to our next question from Samantha Lavishire from Goldman Sachs.

I just kind of wanted to talk about some of the themes you're seeing in the market longer term. So we heard a lot of feedback at CAGNY last week about clean label reformulation, including away from artificial sweeteners like sucralose and several emulsifiers, some of which I think are in your portfolio. What proportion of products are being reformulated this way? And is the increased customer opportunity that you're seeing with CP Kelcos from fortification and protein and fiber, is that enough to offset this headwind? Are you still seeing structural growth in the way that customers are reformulating with your ingredients?

So thanks for the question. I mean all of those trends that we talked about at CAGNY this month actually play to the reshaping of the portfolio. And I think it's important to say that sucralose clearly is an important part of our portfolio as an artificial sweetener of choice, but it's growing in demand. And we're selling every kilo sucralose that we can make because it's the best-tasting artificial sweetener out there. It is also important to say that if there was a shift away from artificial sweeteners, we've got lots of non-nutritive natural sweeteners in the portfolio, everything from stevia, we're the only company with an all-American supply chain for stevia, for example, through to monk fruit and allulose. So we're well placed for the reformulation to more natural and clean label.

The emulsifiers actually are part of our portfolio. We do a lot of replacement of emulsifiers, and that's where the CP calc portfolio comes in as well. So one of the trends that we're seeing people talk about the trends we really believe the combination of our 3 core platforms can help customers win because that sugar replacement or artificial sweetener replacement that we talked about also comes with the need for modulation as Sarah just talked about. So the things that we heard from CAGNY are precisely the reason that we've repositioned the business the way we have done in the last 5 years.

We'll now move to our next question from Matthew Abraham from Joh. Berenberg.

Just first one relates to the fiber fortification services you touched on. Just wondering if you can provide a sense of the margins from those services relative to the rest of the group. If fiber demand does accelerate meaningfully, could there be a broader impact on overall group margins? And then the second question just relates to the price investment commentary that you provided. Is that a reflection of a perception of improved demand elasticity? Or is it more a reflection that demand is such that it requires stimulation through price investment?

So on your first question on fiber, our fiber portfolio generates very nice margins for us. And obviously, it depends on a customer-by-customer basis, how much fiber we're using, what other components we're putting in to help with that solution. But I think the key is the fiber fortification trend is driving a solutions model where typically that business is stickier business and good margin business. So it's certainly helpful in that regard.

In terms of your question on price and price elasticity, we're clearly in a world where consumers are more challenged. Food is 20% to 30% more expensive than it was pre-pandemic because of all of the geopolitical challenges we've seen over the last 3 or 4 years. And there clearly is a requirement for some price stimulation to drive demand. But more importantly, for us, we're trying to balance the way we think about growing our business to make sure we're well-positioned for growth through the cycle. And in a cycle where demand is more muted, we want to make sure we're stimulating growth so that we're well positioned as markets start to grow.

[Operator Instructions] The next question is from Lisa De Neve from Morgan Stanley.

I have 2. First, can we talk a little bit about what you're seeing in APAC? Various players in this reporting season have noted an improvement in China specifically. And I believe your sequential local currency growth is modestly better in APAC. So any color on that would be great. That's one. And secondly, can you provide us a little bit of color on how your raw materials are trending into this year on average? How should we think about the direction for cost input inflation or deflation?

So maybe let me pick up the APAC question. Sarah can pick up the input cost one. Look, I mean, we're encouraged by the progress we're seeing in Asia. As you mentioned, we did see some improvement in China in the first half, and that continued through the third quarter. I mean it's difficult to talk about Asia as one region because it's such a vast area, but we're seeing good progress in China, solid demand in North Asia, across Japan and Korea. And that gives us some encouragement for the future. And if I look at APAC in the broader suite, we've grown that business significantly over the last 5 years. We're now a $500 million business revenue when we were around about $100 million 5 years ago. And it's a huge growth opportunity for us still because it's 60% of the world's population, and a lot of the trends we talked about on the call are true in Asia as well. So the opportunity there is very clear. And the fact that we're starting to see some stability and improvement is very encouraging as we go into the next 12 months.

Thanks, Nick. And then Lisa, on the raw materials, I think it's worth reminding you that we've now got a much broader array of raw materials, CPK, it's not just corn, [indiscernible], et cetera. And broadly, it's a more benign environment. There's not a strong inflationary push coming through there. So it's more benign, and we're well diversified.

I think it's fair to say we're seeing pretty flat year-on-year costs overall. I mean, with some ups and downs, but nothing significant.

We have a follow-up question from Joan Lim from BNP Paribas.

Sorry, just squeezing in one more question because everyone seems to be asking about margins. Nick, you've historically talked about how important it is to protect unit margins. Has this changed? Are you confident of maintaining unit margins this year?

No, I think the focus on unit margins hasn't changed at all. I think in the near term, we're trying to balance all the levers we have to get the business back into top-line growth. And doing that in an environment where markets are more sluggish means we're having to make some choices about where we invest and what choices you make. But fundamentally, over time, we expect to focus on maintaining unit margins and using mix to improve margins to the quality of the portfolio. We're in a cycle at the moment where we're having to make some choices.

It's reassuring to hear that you are confident of maintaining the margins.

With this, I'd like to hand the call back over to Nick Hampton for any closing remarks.

Thank you, operator, and thank you, everybody, for your questions. So just to summarize, trading in the third quarter was in line with our expectations and consistent with the first half. And importantly, our guidance for the full year remains unchanged. As we talked a lot about on the call, our #1 priority is returning the business to top-line growth. And we're clear on the actions we're going to take to improve top line performance of the business in the near term. We remain focused on top-line growth, execution, and delivering for our customers. So thank you for your time and questions, and I wish you all a very good day.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.

Good morning, everyone, and thank you for joining us. Almost to the day, 12 months ago, we announced the completion of the acquisition of CP Kelco. And I'm delighted by the progress we made integrating the 2 businesses over the last year.

Today, we have 3 key messages for you. Firstly, we are stronger together. We've made good progress delivering the benefits of the combination. There's real excitement in the new team about the future potential of our business and the power of the combination is driving high levels of customer engagement. With our deeper product portfolio and leading reformulation capabilities, we have a compelling solutions offering, which meets growing consumer demand for healthier, more nutritious and sustainable food and drink. I saw this firsthand in Mexico 2 weeks ago, both in the new solutions our teams are creating for customers locally and in the kind of discussions we had with one of the leading dairy businesses in the country.

Our second key message is that a slowdown in market demand, notably in North America, is impacting our current performance. This is both disappointing and frustrating given the progress we're making elsewhere in the business.

Thirdly, as a result of this, we are taking decisive actions to drive top line growth, strong performance and position the business for an upturn in demand.

Let me start by looking at the first of those 3 key messages. Our expanded product portfolio and stronger technical capabilities are driving high levels of customer engagement. Over the last 6 months, we have had over 4,000 interactions with customers globally through a range of different channels across online meetings, innovation days, workshops and prototype tasting sessions. During these interactions, we've seen a significant increase in the number of customers engaged on technical issues. In fact, we've held technical discussions with over 250 more customers in the first half than this time last year. All these activities have helped to increase the value of our new business pipeline to $420 million. $175 million of new projects have been added to the pipeline in the last 6 months.

One of the main reasons for the high levels of customer engagement is the significantly expanded formulation and solutions offering of the combined business. In the last 6 months, with the inclusion of CP Kelco's portfolio, revenue from new products increased by 55% to GBP 166 million. New product revenue increased by 7% on a like-for-like basis with a particularly strong performance from the mouthfeel platform, which saw double-digit growth. So reflecting the strength of the combined portfolio and increased capabilities. The inclusion of CP Kelco's portfolio and the technical solutions of both businesses increased solutions-based revenue from new business wins to 39% on a like-for-like basis, increasing from 20% to 22%.

Investment in innovation and solution selling with the inclusion of CP Kelco's investment increased by 68% or 4% on a like-for-like basis. Innovation is the lifeblood of any business and the strength and quality of our pipeline is very encouraging. We said we would deliver targeted revenue synergies of 10% of CP Kelco's revenue or around $70 million by the end of the 2029 financial year, and we are tracking ahead of the plan. Cross-selling, which is the sale of CP Kelco's ingredients and solutions to Tate & Lyle customers and vice versa is a key part of how we're delivering these synergies. While it's still early days, we are making good progress.

The risk-adjusted value of our cross-selling pipeline stood at around $60 million at the end of the first half. This growth is broad-based with each region's cross-selling pipeline increasing by more than 85% in the second quarter. To support cross-selling across the business, we have rolled out global training programs for our commercial and technical teams. And we have also revised our sales incentive scheme to directly incentivize cross-selling. This is having a positive impact with some early customer successes, particularly for mouthfeel solutions.

Let me give you a few examples. In the U.S., an existing large customer wanted to improve the mouthfeel experience of its high-protein shakes. We would have struggled to deliver this in the past, but with the technical support of our new CP Kelco colleagues, we produced a solution based on gellan gum, which in the words of the customer, provided a mouthffit experience that no one else in the industry could offer. In Australia, another existing Tate & Lyle customer told us it was looking for better functionality when including dried fruit pieces in its granola bars. In response, we developed a pectin-based solution, which not only provided the desired functionality and mouthfeel our customer wanted, but also reduced cost.

Back in the U.S. and now looking at a CP Kelco customer, a well-known dairy manufacturer is now working with us on developing a wide range of solutions. The customer was initially only interested in formulation support for a high-protein yogurt dessert. But after having seen firsthand the breadth of our technical expertise across both businesses, more projects have entered the pipeline for products such as nutritional shakes, ice cream and dairy-based drinks.

Finally, to Spain, where we are developing a solution for a former CP Kelco customer to fiber fortify its range of gummies and make them sugar-free. We have only been able to do this because CP Kelco was a trusted supplier, and the customer can see the combined offering provides a much better offering for them than before. This gives me confidence that despite the current slowdown in market demand, the fundamental growth drivers of our business remain strong and continue to offer significant growth opportunities. These include societal trends such as population growth and the heightened awareness of the link between diet and health. Food industry trends also offer opportunities, whether for the reformulation of ultra-processed food to improve their nutritional content to the increasing demand for sugar and calorie reduction and fortification with fiber and protein.

The power of the combination also offers growth opportunities with its expanded customer offering, increased customer access and enlarged presence in the fast-growing markets of Asia, Middle East and Africa and Latin America.

In summary then, it's clear from what customers are telling us and from the growth in our pipeline, we have a highly compelling solutions offering. We are stronger together and our leading expertise in sweetening, mouthfeel and fortification means we are very well positioned to meet growing consumer demand for healthier, more nutritious and sustainable food and drink. While we are making strong progress setting the business up for future growth, in the near-term, we are operating in a challenging economic environment. And this brings me to our second key message for today, how a slowdown in market demand is impacting our current performance.

Before I hand over to Sarah to talk through the financial results, I want to look at the overall market context. In simple terms, in the Americas, volume was lower than we expected. In Europe, Middle East and Africa, we saw competitive pricing. And in Asia Pacific, we delivered good profit performance despite muted market demand. To put a bit more color on this, let's look at the U.S. market in a little more detail. After an extended period of weak consumer confidence, we came into the financial year expecting to see some improvements in market demand. As we outlined in our pre-close statement a month ago, this improvement has not materialized. Instead, we saw a slowdown in demand as the first half progressed, notably over the last 2 months.

On the screen are 2 charts showing Nielsen data for the U.S. food and beverage market in our key categories over the last 12 and 3 months, respectively. These show that in our largest market, volumes declined over the last 12 months and that in the last 3 months, this decline has accelerated as pricing increased. With consumer confidence remaining low, we expect the U.S. market to remain subdued in the near-term. I will come back later to talk about the actions we are taking to drive top line growth and improve performance.

But for now, I will hand over to Sarah to talk through the financial results. Sarah?

Thank you, Nick. Before I talk to the numbers, I would like to reiterate Nick's message of how we're already demonstrating the power of the combination. We are delivering cost synergies and productivity ahead of our commitment. Our new business pipeline has strengthened to $420 million, and we are taking decisive action to fuel our top line growth.

Now turning to the numbers. Please keep 3 things in mind. Firstly, I will focus on adjusted measures and items with percentage growth are in constant currency. Secondly, comparators are pro forma unless I indicate otherwise, as if the acquisition of CP Kelco had completed on 1 April 2024. Thirdly, given the ingredients in both the Tate & Lyle and CP Kelco portfolios are sold in volumes that differ greatly in value, in analyzing drivers of revenue change, we have combined the effects of volume and mix in line with industry best practice. More details are available in our disclosures. I will refer to this simply as volume.

So looking first at the financial highlights. On a statutory basis, including the impact of the acquisition of CP Kelco, revenue was 32% higher and EBITDA was 24% higher. On an adjusted basis, as Nick explained, a slowdown in market demand led to 3% lower revenue, and we delivered EBITDA of GBP 215 million, some 6% lower. Adjusted earnings per share were 21.3p. We delivered GBP 98 million of free cash flow with cash conversion of 71%, broadly in line with our long-term target. On a rolling 12-month basis, following the recent acquisition of CP Kelco, return on capital employed was 8.2%. This chart shows the main drivers of lower revenue. Softer market demand and tariffs impacted revenue by GBP 22 million. We invested GBP 10 million of revenue to the market through lower pricing, mainly in Europe. Overall, revenue was 3% lower in constant currency. While no longer a reporting segment, Sucralose performed well with revenue broadly in line with a strong comparative period.

I'd also like to highlight the revenue from the CP Kelco portfolio also continued to grow. Looking ahead, while the geopolitical environment remains uncertain, given the level of tariffs currently in force, we expect to see further impact in the second half due to the additional tariffs brought into effect late in August on imports from Brazil into the U.S.

Moving on to EBITDA, which is 6% lower. EBITDA decreased as a result of softer market demand, investment in price and the impact of tariffs, net of mitigation. This was offset by the positive impact of strong cost discipline, net of investments in growth and the early benefit of cost synergies. The recovery of CP Kelco portfolio continues, delivering margin improvement in the first half in addition to revenue growth. Our EBITDA margin at 21% remains attractive and well positioned compared to our specialty ingredient peers.

Turning now to the performance of our geographic segments. In the Americas, revenue was 2% lower and EBITDA 7% lower. While pricing was slightly higher, volume was lower as the slowdown in market demand led to customers ordering less than expected. In the U.S., revenue was broadly flat. We saw lower demand in each of our core categories, notably beverage and bakery and snacks. Market demand in Latin America was mixed with steady demand in Brazil, softer demand in Mexico. In Europe, Middle East and Africa, revenue decreased by 6% and EBITDA by 16%. Volume and pricing were both lower. We came into the year expecting lower pricing, reflecting our decision to invest some price back into the market in customer framework agreements for the 2025 calendar year.

Performance across our core categories have varied with higher demand in dairy and lower demand in soups, sauces and dressings and bakery and snacks. Asia Pacific delivered a robust performance with revenue in line despite tariff pressures and EBITDA was up 19%. Overall, demand was slightly stronger with good demand in China, especially in the beverage and bakery and snacks categories and in North Asia. However, this underlying demand was offset by the effect of tariffs across the region. We continue to work closely with our customers to meet their supply needs.

Turning to other lines on the income statement. On exceptional items, net pretax exceptional charges were GBP 17 million. This included GBP 20 million charge for integration costs, reflecting our strong cost synergy delivery and a GBP 10 million noncash charge from the buyout of the U.S. pension scheme as we continued to derisk our pension exposure. This was partially offset by a GBP 20 million provision release related to decommissioning costs at our former tapioca facility in Thailand. We sold this business in the half and as part of the sale agreement, these costs will no longer be incurred. The adjusted effective tax rate was 24.4%. As we stated in May, this increase is due to CP Kelco's operations being located in higher tax jurisdictions. We now expect the adjusted effective tax rate in the 2026 financial year to be in the range of 24% to 25%.

I'm pleased to report that the Board has declared an interim dividend of 6.6p per share, an increase of 0.2p per share. This is in line with our approach of paying interim dividends equivalent to 1/3 of the prior year's full year dividend.

Turning now to free cash flow for which comparatives are as we reported a year ago. Overall, adjusted free cash flow was GBP 98 million, GBP 29 million lower than a very strong comparative. EBITDA was GBP 27 million higher. Net working capital increased by GBP 37 million as we built higher inventory to mitigate the impact of tariffs on our supply chain and support customer supply continuity while we manage the optimization of capacity in our U.S. manufacturing facilities. Capital expenditure was GBP 5 million higher at GBP 55 million. For the 2026 financial year, we expect capital expenditure to be towards the lower end of the GBP 120 million to GBP 140 million range. Net interest increased by GBP 20 million, reflecting higher borrowings following the acquisition.

Our balance sheet remains strong. Long-term debt financing is in place at a competitive mix of fixed and floating interest rates and with a well-balanced range of maturities running out to 2037. We are targeting long-term leverage to be between 1x and 2.5x net debt to EBITDA, and our leverage stands at 2.3x currently. Net debt at end September was GBP 952 million. At the end of October, we entered a $180 million 2-year term loan facility and drew it down. These funds were used to repay an expiring $180 million U.S. private placement fixed rate note at its maturity. We continue to have strong liquidity with access to nearly GBP 1 billion through cash in hand and a committed and undrawn revolving cash facility -- credit facility. We are well positioned to continue to invest in the business.

I'll now hand back to Nick.

Thank you, Sarah. Moving now to our third key message for today, the actions we are taking to drive top line growth and stronger performance. These actions are focused on 4 priorities. The first is targeted investment to accelerate customer wins in key growth areas. Second is delivering the benefits of the CP Kelco combination. Third is to accelerate productivity across the enlarged group. And lastly, to continue to strengthen our balance sheet and deliver shareholder returns through clear capital allocation priorities. We are also making some organizational changes to support these priorities.

Let's start with the first priority. We are making a series of targeted investments to ensure we have the insights, capabilities, resources and tools we need to win with our customers in key categories and subcategories of growth. I'll cover these in a bit more detail. It starts with segmenting our new global customer base in a very granular way. As a new business with a significantly expanded portfolio and solutions offering, we want to ensure that we are targeting higher-growth subcategories and working with those customers who value our solutions and formulation expertise the most. This will help us prioritize the deployment of our commercial and technical resources and our investments in innovation. As I said earlier, we increased investments in innovation and solution selling by 4% on a like-for-like basis in the first half.

We will continue to invest to strengthen our customer-facing capabilities in the second half in areas such as applications, sensory, nutrition science and process development. This investment will be aligned with the work we are doing on customer segmentation to ensure we are building capabilities that directly support areas of growth. We are also accelerating the rollout of our solutions chassis program, initially focusing on mouthfeel. As a brief reminder, a formulation chassis is the base framework or foundational piece of technical knowledge within a given solution. Developed by a global team, chassis toolkits are then tailored by our regional teams to meet consumers' local tastes. As we explained at our Capital Markets Day in July, mouthfeel is critical to deliver a successful reformulation, and the combination has created a leadership position in mouthfeel for Tate & Lyle. We are seeing very strong interest from customers for mouthfeel solutions. And so we are ramping up our program. 10 new mouthfeel chassis have already been launched and a further 10 are in development.

Recent customer wins using mouthfeel chassis include a solution for a customer in the U.S. using a base of pectin and starch to create a high-protein yogurt and a solution for a customer in Europe for a low-fat no egg mayonnaise using a base of citrus fiber, Xanthan gum and starch, once again demonstrating the power of the combination.

With consumer trends changing all the time, it's more important than ever that we work collaboratively with our customers to develop the ingredient solutions they need. Our chassis approach for solutions allows us to meet our customer requirements faster and more efficiently. We are investing around $10 million in new technology and digital tools to support the effectiveness of our customer-facing teams. Part of this is a $3 million investment in building a new generative AI tool for our sales and technical teams. This tool will give our teams the ability to search our broad technical and scientific libraries to provide faster and deeper insights into how to solve customer formulation challenges. In short, when we are with a customer, we want this tool to eliminate the phrase, we'll get back to you so that we can always say, let me show you. This tool is currently being piloted with the rollout due to take place over the next 12 months.

We also continue to invest in ALFIE, our first of its kind automated laboratory for ingredient experimentation in Singapore. These investments include developing advanced AI predictive algorithms to help us better model customers' formulation requirements and develop line extensions more quickly. Customer collaboration on ALFIE continues to be strong. Our pipeline of projects is ahead of our business plan and the first customer product directly created by ALFIE has now been launched in China.

Moving now to the second action we are taking to drive top line growth, which is to continue to deliver the benefits of the CP Kelco combination. In addition to cross-selling, another key driver of revenue synergies is moving targeted CP Kelco customers to a direct service model. By way of a reminder, over half of CP Kelco's revenue currently comes from distribution partners. We have started the migration process and expect that around 10% of the revenue from CP Kelco's portfolio will have moved in-house by the end of the 2026 financial year. This will allow us direct access to these customers and significantly increase our ability to create growth opportunities with them. This process will also enable us to concentrate our remaining distribution business with our stronger partners and to migrate smaller accounts to them. We are seeing a positive response from customers to this approach.

I'm now going to hand back to Sarah to talk about cost synergies and our other 2 priority actions.

Thank you, Nick. I'm pleased to report that the CP Kelco integration continues to go well, reinforcing our confidence that we will deliver the cost and revenue synergies we have set out. On cost synergies, we have delivered $30 million in run rate savings as of 30 September 2025 and now expect to exceed our target of $50 million by the end of the 2027 financial year. As planned, our financial results will increasingly benefit from the realization of cost synergies in the second half.

Moving now to our third action, which is to increase productivity across the enlarged group. In addition to the delivery of cost synergies, I'm pleased to say that productivity once again showed significant progress. We delivered a further $21 million of productivity savings in the half with $40 million of this coming from operational and supply chain efficiencies and $7 million from procurement and cost management. To give you a sense of how deeply the culture of productivity is embedded across the whole organization, more than 150 procurement projects and over 180 continuous improvement projects across our manufacturing network were delivered to achieve these savings.

Our strong performance brings our total productivity savings over the last 2.5 years to $112 million. Given our strong productivity pipeline, we are increasing our 5-year target of $150 million savings by the end of 2028 financial year by a further $50 million to $200 million.

Turning to our fourth action to strengthen our balance sheet and shareholder returns. We continue to have a strong focus on cash generation. Our target is to deliver cash conversion greater than 75% each year while balancing with our priority to drive top line growth. We are targeting an improvement in the cash conversion cycle of the CP Kelco portfolio, which is naturally higher inventory, and we expect our operational expertise to deliver inventory reductions over time. In addition, we're also working to increase working capital efficiency across the combined business. Another area of focus is the disciplined investment of capital. We continue to bring rigor to the investment appraisal process of the combined business and expect new capital investments to meet attractive rates of return.

Moving on to capital allocation. We are committed to the disciplined deployment of capital and maintaining our financial strength. Consistent with our capital allocation policy, we will continue to invest in organic growth, selectively in acquisitions, joint ventures and partnerships, operate a progressive dividend policy and look to return any surplus capital to shareholders. Our current leverage of 2.3x sits within our long-term target range between 1x and 2.5x net debt to EBITDA. Looking ahead, for excess capital, the Board intends to continue to pursue the deleverage of the balance sheet and subject to prevailing market conditions, we will consider initiating a share buyback program when leverage is below 2x. The Board remains firmly committed to its progressive dividend policy.

And with that, I'll hand back to you, Nick.

Thank you, Sarah. To ensure we act with pace and agility, we are making some organizational changes to drive delivery of our priorities.

Firstly, I have appointed Didier Viala to lead our Americas region. Didier was previously the Chief Executive of CP Kelco and has over 30 years of food industry experience. His leadership abilities, fresh perspective and deep customer knowledge will be a great benefit to us as we focus on accelerating top line growth.

Secondly, we are combining platform solutions, marketing and commercial transformation into one team to drive commercial execution across the business. This team will be led by Melissa Law, our Chief Commercial and Transformation Officer, and will allow us to accelerate end-to-end deployment of new solutions and capabilities to customers.

Turning now to the outlook and summary. Our outlook for the year ending the 31st of March 2026 is unchanged from our pre-close statement on the 1st of October. In constant currency and compared to pro forma comparatives, we continue to expect revenue and EBITDA to decline by low single-digit percent compared to the prior year.

So to conclude, there is no getting away from the fact that it's been a difficult first 6 months of the year, and our performance is not where we want it to be. However, on the positive side, we are very pleased with the progress in delivering the benefits of the CP Kelco acquisition with both revenue and cost synergies ahead of plan. What's clear is that we are stronger together and have a highly engaged team. The power of the combination is driving high levels of customer engagement and our new business pipeline is growing strongly. This reinforces our confidence that the enlarged Tate & Lyle has a highly compelling customer offering and is well placed for growth. Given the challenging near-term economic environment, we are taking decisive action to deliver top line growth and improve our performance. We are investing to strengthen our customer-facing capabilities. We are simplifying our organization to focus on commercial execution. We're continuing to deliver the benefits of the CP Kelco combination, and we're accelerating productivity to invest further in our business.

As one Tate & Lyle team, we are excited about the future. With a portfolio repositioned to address growing consumer demand for healthier, more nutritious and sustainable food and drink, the long-term structural growth drivers of our business remain strong. Our opportunity is to turn high levels of customer engagement and the strength of our pipeline into top line growth and stronger financial performance. Everyone at Tate & Lyle is focused on making this happen, delivering on our action plan and the priorities we have set out today. The power of the combination is clear, and our focus is on execution, delivering for our customers and growth.

With that, Sarah and I will be happy to take your questions. We will take questions from both the floor and those joining remotely.

For the purposes of recording, please state your name and institution. Can we please have our first question from the floor?

I'm Joan from BNP Paribas Exane. So I have 3 questions, if I may. The first question is your new President of Americas. Can you share more about why Didier is the right person to lead Americas? And how can he help spearhead the recovery of this division? What went wrong in Americas? And how do you envision Tate outperforming end markets going forward? So this is my first question.

The second question is on your EBITDA guidance. With better-than-expected run rate cost synergies and higher cost savings from your productivity program, what is stopping you from raising your guidance? Why do you still expect it to decline in line with sales for the year?

And my last question is on Sucralose. So you said revenues were broadly in line with last year, which is surprising because it's already grown double digits last year, and we're expecting some phasing effects. Can you help us understand the market dynamics for Sucralose for this year, please?

Sure. So let me -- let's take those in order then. And Sarah, maybe you take the second question on EBITDA. Look, on Didier, I mean let me start with nothing has gone wrong in North America or in the Americas. We're experiencing a slowdown in market demand. But in North America, specifically, we saw flat revenues in the first half. However, a fresh perspective is always good. Didier with his vast experience of serving the food and beverage industry as the CEO of CP Kelco is deeply ingrained in our customer base and has a really strong understanding of the potential of the combined portfolio because of all of the work that we've done together. He's been leading our platform teams for the last 12 months, close to 12 months, and they're fueling growth as well. So we're taking his experience and putting it into a specific region to help accelerate growth. And we should remember as well, the Americas is still our biggest business. it's over 40% of our business.

So I'm really delighted that he's taking on this new challenge, and he's really excited about it as well because at the heart, Didier is a commercial guy. I mean, he's been doing this for a long time. So he'll bring real new energy and a fresh perspective, which is always good of what's a solid base as well. We've got a great business in the Americas.

Let me take the Sucralose question as well while we're on it. Look, Sucralose had a very solid first half, very consistent with the previous 3 or 4 years, very consistent delivery on both the top line and the bottom line. We're still seeing strong growth and demand for Sucralose globally. It's still the best nonnutritive sweetener out there, and there's a huge demand for sugar replacement. So we still got this franchise that's incredibly strong for us. and lots of customer demand for what we do, especially in the developed markets because of our unique sourcing out of North America. So we feel really good about Sucralose. It's a solid part of the portfolio and we'll continue to remain.

I'll let Sarah take the details on the EBITDA guidance. But let me put it into reference. We're assuming in our guidance that we're going to continue to see muted demand through the balance of the year. But despite that, we want to continue to invest in growth because ultimately, we're looking to grow the business now and for the longer-term, and therefore, reinvesting some of the savings we're seeing is really important. But I don't want to add a little bit to that.

Yes. Thanks, Nick. So I think indeed, I think it's put in context, so the first half is obviously minus 3% revenue, minus 6% EBITDA. So we've got to demonstrate improvement in the second half to deliver the low single digits. As Nick said, so we absolutely have demonstrated taking those costs out. but we're choosing to invest to ensure that we have the right competencies and capabilities in the organization to drive that top line, and we've talked about some of those activities today.

Fintan Ryan here from Goodbody. A few questions for me, please. Firstly, in terms of the soft end market demand that you're currently seeing, even though you're starting to develop a lot of cross-selling benefits seem to be growing. Could you just describe in terms of the -- is it a case that the core underlying end markets or business is performing worse than expected in the short run? I mean we're not seeing the benefits of the new cross-selling benefits come through? Or is it the case that the products are being launched on the market, but they're just not meeting the initial hopes and thresholds that maybe you would have envisaged?

And secondly, you pointed out quite strong performance in the Chinese market, particularly in the first half. So a lot of other food and beverage companies are talking about softness in that particular market. Can you describe what makes your business different? Is it your customer base? Is it your category mix? And could you foresee that continued strength in the Chinese market continuing into the second half and beyond?

So on your first question, it's simply a phasing question. So fundamentally underlying market demand, not where we had anticipated it would be. We're seeing real build in pipeline, cross-selling, et cetera. But those -- the benefits of the combination, especially on the top line, really only start to phase in from the next calendar year. So if you think about the distribution take back, you think about some of the cross-selling coming through, those naturally come through in the next year. So we're expecting to see those start to flow through in quarter 4 and into the next financial year. So the underlying base is where the softness is with those things coming in as we phase them. If you remember, we said when we announced the transaction, this was a kind of 3-year build, and it really started to build in the second year. So that's what we're seeing. The good news is we're seeing that demand come through in terms of the pipeline we're building.

In terms of China, I'd say a couple of things are different for us. The first is the CP Kelco business is on a recovery path, and China was especially soft part of the business where they saw the decline historically because dairy was suffered really badly through the sort of last couple of years. So we're seeing recovery there. And of course, we're also seeing the increased benefit of the 2 businesses starting to come through. So I would say China was robust. We saw some growth, but we're not getting too excited about it yet. We're still seeing relatively muted consumer confidence overall in China, but the CP Kelco recovery is part of it. And the way the business is doing a really good job of managing the tariff issues into China is helping too. And we should expect to see that in the second half, too.

Matthew, I said I'll come to you next. And Damian, I promise I'll come to you after that.

Matthew Webb from Investec. First one is probably one for you, Sarah. Could you just talk us through where we are on the working capital and inventory front? Obviously, you took inventory levels up in the first half. I just wonder whether that's done, whether there's more to come in the second half, at what point -- obviously, you talked longer-term about getting working capital levels down. Just sort of where we are on that cycle. That's the first question.

And the second one, which I suspect is quite closely related to it is I wonder if you could just update us on the tariff sort of implications, what you are doing both to deal with that yourselves and also to help your customers adjust to that new reality.

And then the third question, forgive me if you talked about this already, but I noted the comments about optimizing capacity in your U.S. manufacturing facilities. I wonder if you could just be very clear what that entails.

Yes.

So indeed, so there was a working capital drag in our free cash flow. It comes back to a #1 priority is having the right product in the right place for the customer. And with the ever-changing world of tariffs, it leads to an environment where we're not optimal working capital, we're very much focusing on the right product in the right place for the customer. There's also an element and it comes to your third point about as we optimize our manufacturing facilities in the U.S., and that particularly relates to biogums, we have to build a bit of inventory as we revalidate product with customers, as we continue to ensure we have that optimized footprint in the U.S. with respect to biogums. I think absolutely, this is going to take some time to unwind. So it will not be a tailwind in H2. But absolutely, over the months, it's that continuing focus. And it comes back to how are we delivering what's under our control. And clearly, working capital is one of those elements. So absolutely, over time, we continue to optimize our working capital.

So on tariffs, it's sort of tired saying it's a moving piece because everybody knows that already. But it's having an impact on the business in a number of ways. The first is, as Sarah has pointed about, we're prioritizing putting inventory where we need to for customers and building inventory in anticipation of tariffs moving around. And we're still seeing a little bit of a moving piece, especially with the U.S.-China issue. It's therefore impacting our ability to serve customers effectively, clearly, and we're prioritizing that. We're passing through tariffs where we can. And we're also moving production around the world to avoid tariffs where possible. So for example, recently for us, shipping pectin or hydrocolloids out of Brazil into the U.S. has become more of a challenge. So we're shifting production into Europe and managing the network in a different way. So the team is doing a really nice way, nice job of managing that effectively. And it hasn't had a disproportionate impact on the business. But operationally, it's a challenge that a lot of businesses are dealing with.

I'd say the bigger question actually is the second order effect of tariffs and the impact it's having on consumer demand. That's what we're seeing in the U.S. If you -- the Nielsen chart I showed you earlier, that pricing that came through in the second quarter is a reflection of tariff pass-through. And that's -- so the consumer confidence around the world is being impacted by it because of pricing. But all of those things are factored into how we're managing the business. And like every other business, we're dealing with it in a sort of agile way and as best we can. In terms of the footprint rationalization in the U.S., I think Sarah has broadly covered that. One of the benefits of the transaction was a significant investment in lower-cost biogums manufacturing in North America. That's allowing us to move production around and rationalize facilities in a way that would take cost out. So it is part of the productivity drive in the business. And that capital has already been invested as well, which is a good thing.

If you remember, we talked about the $200 million of investment that was made. We're now in the middle of executing that transfer. The transfer takes a little bit of time because of moving customers onto a new facility and a slightly different production platform.

David, I promise I'll come to you next, and then we'll go...

Damian McNeela from Deutsche Numis. I think first one for you, Nick, is I appreciate you've given us some information about U.S. FMCG markets and volumes down sort of broadly 2%. But if we look at some of your peers, they've delivered positive volume performances in that region. I was just wondering, how do you think about Tate's market share evolution over the last 6 months? And where do you -- is it sort of a category issue for Tate? Or is it the fact that it's very difficult to compare apples with apples in this environment is the first one.

And then secondly, Sarah, for you, APAC profitability was up like nearly 20% on flat revenues. Can you talk about what drove that improvement in profitability? Is that country mix driving that, please?

So let me take the first question, obviously. It's very difficult to measure share precisely, and it goes up and down. And when we look at our North American business in the first half, volume down a little bit, pricing up a bit of a bit, revenue flat. So actually, in terms of volume weighted ahead of the categories that we're seeing. Now what does that mean in terms of share, difficult to say. I wouldn't say we're performing particularly differently to anybody else because there are category mix issues, there are comparability issues. But what I'm concerned about now is accelerating top line growth. And to do that in the near-term, we'll have to make sure we're targeting growth areas within our categories and look to take share as reformulation kicks in. Sarah.

Thanks, Nick. And David, on the APAC. So it's great to see APAC performance resilient despite all the noise about tariffs. Recall, CP Kelco is a really important part of APAC. And as they have improved, that's really supported the improvement of EBITDA. In addition, there's good old-fashioned cost control supporting that broader agreement to the region.

I think, I think it's a good example of controlling all the things that we can control in the context of the environment that we're in. And the Asia team has done a really nice job when you add on the complexes of tariffs in their business. I'm conscious that we've got people very patiently waiting online as well. So I think I'm going to take an online question next, and then I'll come back to the room. So Carol from Kepler, over to you.

I have a question on supply-demand in the North American market because it's been -- the market has been difficult for a period of time now, and we're heading into the negotiation season, of course. So how you're seeing supply demand in the North American market, I guess, particularly on the new sweeteners platform.

And the other question is in a slightly different way, it's been asked before, but we noticed quite sizable gaps in the performance of ingredients players also in North America, depending on the end markets they serve or have a strong foothold in. If you look to your -- to the wins and new customer engagement, is there a big program to where you see we see us becoming more successful making inroads in higher growth segments? Can you single out a couple of things that look promising at this point?

Sure. So in general, with muted demand for the last couple of years, the supply-demand balance is clearly shifting a little bit. And we sort of were conscious of that as we go into the season for renewal of framework agreements with customers. But the thing I'd say is part of the repositioning of the business is about creating levers that go beyond that. And if you think about the growing pipeline, the broader portfolio we have, it gives us many more levers to play as we go into that into that season. So very, very early in the whole process of renewing customer agreements for next year. So we'll give you an update on that in the new year. But we are bringing different levers this time around to the past as we brought the 2 businesses together. And we've got the distribution takeback and the direct selling from that to benefit from. We've got the pipeline. So there are lots of other things we're thinking about driving. And what we've seen so far in North America is relatively stable pricing. In the first half, we saw price slightly ahead of volume.

In terms of what does that mean in terms of focusing on growth, it's all about going after those priority growth subcategories. So it's about low sugar relating to the sweetener business as you talked about earlier. I mean, clearly, we've got a unique sweetening portfolio. So we've got the only North American or American supply chain for stevia. We've clearly got our North American Sucralose business benefiting us as well. So it's about targeting subcategories where we're seeing low sugar combined with mouthfeel because when you take sugar out, you need to replace the mouthfeel to provide customers with products that really work for consumers. And those are the kind of things we're working on in terms of building a pipeline of future growth. And as we start to see innovation pick up, we'd expect to see those things flow through into new business for us. So Vincent, I'll come back to you.

Artem from Rothschild Redburn. I've got one on Solutions. Encouraging to see the number of your solutions sales as part of your new business wins, 39% compared to 22% like-for-like. Just maybe help us understand this number a little bit. So like obviously, it looks like a big jump in the number. If it's like-for-like, does that mean it's still Tate plus CP Kelco? Does that exclude synergies before? So is it a function of synergies kicking in and you see the progress of more solution sales? Otherwise, is it just a function of you being able to do more with the CP Kelco business, your portfolio broadens, you can offer more solutions. So could you talk a little bit about this number because that's obviously very encouraging to see such growth?

Yes. So like you, we're very encouraged with the growth in our new product revenue and in the pipeline of solution wins. The like-for-like really means that we're measuring the combined business in both years. So we're taking the combined portfolio last year and measuring it against the combined portfolio this year, which I think is a fairest measure in terms of seeing progress. Clearly, there's been a big increase in the overall total and spend because when you bring an extra business in, you naturally get a big bump. But think of it as a comparable. So the 7% on new product revenue, for example, is a really good example of that. And why is it growing? Because our new products have real relevance for the future of where food is going and because the combination coming together allows us to do things that we couldn't do when we were a part. So if you think about the examples I showed you from the U.S. to Australia to Spain, they were all a combination of the 2 portfolios coming together. 12 months ago, we couldn't do that. So hopefully that answers that question.

Lisa De Neve, Morgan Stanley. I have 3 questions. One is a follow-up from Artem's question. I mean you've done very strong on solution-driven sales. Can you just put a bit of context on how that's going to drive your mix and your delta margin progress over the coming 12 months? That's my first question.

The second question is on price. You've talked about making price investment in the first half. Can you just detail a little bit where you've invested in price and how we should think about this to trend in the second half of the year, especially in ongoing deflationary context for raw materials?

And the last question is on special returns. you've highlighted you would consider a buyback when net leverage drops below 2x. Can you share if that's the main driver driving that potential decision for a buyback or whether you will take other variables in consideration as well, such as market backdrop or your level of your share price?

Sarah, do you want to take the margin point?

Price point.

Yes, then I'll come back on the...

Go first. Okay. So yes, thanks for the question. So I think it's really important to think about region by region. So we've talked a lot about what's going on in the Americas, but I think it's worth highlighting in Europe, for example, we've -- the price has been under a lot of pressure. So we have invested in price there. We knew that was going to happen going into this calendar year, and that's one of the main contributors to the slightly muted results in Europe. So I think it's really important that region by region, there are different dynamics and that depends on the supply chain, what else is going on. But indeed, the significant price pressure has -- we've seen it in Europe.

So on solution selling then and the sort of pipeline, I mean, clearly, our experience from history and all of the pipeline conversion we've seen over the last 3 or 4 years is that the conversion of that pipeline is margin positive. So it should help as we go into quarter 4 and into the following financial year. And that will be weighed off against all the other factors we're driving in terms of managing the mix in the business. So it's a positive benefit for us as we go forward. How much flows in and when it flows in, of course, will be determined by the rate of pipeline conversion.

Coming back to your question about shareholder returns and share buybacks and how you might do that. Look, I think the signal today is that we're very conscious about balancing off investing in the business for growth and delivering returns to shareholders as our balance sheet allows us that flexibility. When we get to a point in time where we have that decision to make, the Board will use lots of different factors to determine what the right answer is for both shareholders and the business. And it's a bit difficult to give you a template for that. It's not prescriptive because it will be situational. There'll be the market circumstance, there will be the share price, there will be investments in the business. There'll be what the growth potential of the business looks like in the near-term. All of those things will come into play. But I think the point we're trying to make today is we're going to be very flexible and open-minded about that, conscious of the fact that we want to maximize shareholder returns in the current environment.

So I'm going to go back to the screen now, and I see that Alex Sloane from Barclays has a question. So Alex, over to you.

The first one, just in terms of the CP Kelco business, I think you're bringing back a lot of that distributors in quarter 4. I wonder if you could speak to how you're managing any risk of potential air pockets as distributors try to phase out stock. Is that something you're seeing at all in quarter 3? And is that embedded in your second half guidance? That's the first one.

And the second one, I mean, over the summer, a former FDA commissioner filed a citizens petition with the FDA seeking to revoke GRAS status for our host of corn-derived ingredients [ he argues ] contribute to negative health outcomes. How material is that development on your sort of overall radar screen of risks?

Do you want to take the first question?

Very happy to. So I think -- so absolutely, so take back from distributor is a key part of the transformation case with CP Kelco. We are working well with our distributors and trying to find the win-win -- so how do we consolidate our relationship with distributors. And of course, distribution will be a key part going forward. I think -- and with those larger distributors, the conversation is if we take back this geography, but we could give you another geography to support their growth as well. You talk about air pockets. I think absolutely we got acknowledged that in Q3, as we start some of those distributors, we do start taking house. That does have an impact as obviously, they work through their inventory. But absolutely, that's built in the guidance for the full year.

And Alex, I'd just add one other thing to that, which is as we work with our distributors on that program, we're focused, #1, on maintaining customer service; and #2, on working with them to balance off the business to give them incentive to grow with us going forward as well because they're always going to be an important part of our business to a certain extent in certain markets.

On your question on the Kessler petition to the FDA, I mean, not unusual. We've seen things like this in the past. They tend to take time to work through. And when we look about -- look at our broad portfolio, a number of our products in the portfolio already have alternative accreditation anyway, so it wouldn't be impacted by it. And that's where the sort of breadth of the portfolio really helps as well because to the extent that there will be any substitution, we'd have other products that we could move into the mix. Obviously, we're following regulation in the U.S. very carefully, as you'd expect, but we don't anticipate it having a material impact on the portfolio.

Okay. Any other questions? No? Yes. Patrick, sorry, I missed you on the screen. Patrick Higgins from Goodbody.

I just wanted to come back to the solution selling for a minute. And forgive me if I missed this, but do you know how much of the combined sales today are sold via solution? And I appreciate it might be too early to guide on this, but where do you think that could get in the medium term? And obviously, through today's presentation, you've kind of highlighted the benefits of the combination and the power of the combination and how CPK will enable that increased solution selling. But where do you see the biggest gaps in the rest of your kind of offering to enable that kind of progression in terms of solution selling? Is it application? Is it consumer insights? Just a bit of color on that would be really helpful.

I mean great question. I actually can't give you a specific answer to how much of it is combined in terms of the solutions bit of it. What I do know is the pipeline is growing very strongly and a lot of examples I've given you in terms of recent success have included the combined portfolio. But I actually think the more important measure is the total strength of the pipeline. Because actually, if you think about the example in Spain, where we're working with the customer on a broad-based set of solutions now, it's because of the combination. And it might only be one part of the portfolio that goes into a particular solution, but it's the fact that we can cross-formulate that gives the access and the confidence that we're the best partner for that. How far that goes, we'll see. I mean we clearly want to continue to grow it because it has a positive impact on the business.

In terms of gaps, I don't think the gaps in the portfolio are about the latent ammunition, if you like, the ingredients themselves. I mean, will we like to have a little bit more exposure to protein maybe. I think the gap is actually more about building increased consumer understanding of where we can grow best, so really understanding our customers' needs and where they see the big opportunities and then continuing to learn internally about the power of the combination as our application scientists come together and formulate in a way across the portfolio that we couldn't do before. And that's about time and learning. I mean, over time, that will strengthen. And it will be augmented by things like ALFIE, where we've got this rapid prototyping capability. So we can actually accelerate our own understanding and therefore, accelerate our ability to delight our customers with solutions they didn't think were possible before.

So it's now really about execution of what we have and executing it in a way that we're executing against the biggest growth opportunities externally, either customer-specific, category specific, and in some cases, through region-by-region differences.

Okay. So if there are no more questions, I can't see any hands up in the room or names on the screen. I'll finish with a couple of brief remarks, if you like. Look, as we said, in the first 6 months of the year, our performance is not where we want it to be. But we're incredibly encouraged by the strength of customer engagement and the strength of our pipeline. And that gives me confidence that we're moving in the right direction. So our near-term focus is absolutely on the priorities we just laid out for growth. And it's all about execution, growing with our customers and really helping them grow in a more difficult world.

So thank you for joining us today, and we'll no doubt see you in the new year when we give you an update then.

Good morning, and welcome to the conference call for Tate & Lyle's First Half Pre-closing Statement. Today's call is hosted by Nick Hampton, Chief Executive Officer; and Sarah Kuijlaars, Chief Financial Officer. I will now hand over to Nick Hampton.

Thank you, operator, and good morning, everyone. Welcome to the conference call. I will make some introductory comments, and then Sarah and I will be happy to take your questions. First, I want to look at the bigger picture. We continue to make very good progress delivering the benefits of the CP Kelco combination. Customers are increasingly recognizing the strength of our combined portfolio, especially our expertise in mouthfeel. And this has led to a very encouraging early cross-selling successes with the value of the pipeline more than doubling in the last 2 months alone. The strong interest our combined offering and reformulation expertise is generating with customers clearly demonstrates the strategic logic of bringing Tate & Lyle and CP Kelco together, and reinforces our confidence in the growth potential of the combined business.

While the level of customer engagement is high, we are operating in a tough market and have seen a slowdown in demand as the first half progressed, particularly over the last 2 months, which in turn has slowed our recent performance. We are seeing different dynamics across each region. In the Americas, we expect revenue in the first half to be slightly lower, reflecting softer consumer demand, notably in North America, still have largest market.

In Europe, Middle East and Africa, revenue is expected to be mid-single-digit lower despite slightly higher demand. In Asia Pacific, revenue is expected to be broadly in line after absorbing the impact of tariffs, which we continue to navigate well. Against this more challenging backdrop, we are accelerating a series of steps to drive delivery of top-line growth. These include investing in enhanced customer segmentation, further strengthening our customer-facing capabilities such as solution selling, applications and marketing, working even more closely with customers to accelerate innovation through technology and optimizing capacity in our manufacturing network to accelerate productivity.

The margin of the CP Kelco portfolio is expected to improve further in the first half. Planned revenue and cost synergies, and delivery of savings from our productivity programme remain on track and demand for sucralose continues to be strong. Overall then, for the first half in constant currency and compared to the pro forma comparatives, we now expect Group revenue to be 3% to 4% lower. Reflecting this top-line softness, the investments we continue to make for growth, and the planned weighting of cost synergies into the second half, EBITDA in the first half is now expected to be high single-digit percent lower.

We will provide a more detailed update on the business and the actions we are taking when we announced our half year results on the 6th of November 2025. Turning to the full year outlook. While we anticipate the near-term market demand environment will remain challenging, we expect performance to improve as we move into the fourth quarter. This will be driven by the acceleration of actions we are taking to drive delivery of top-line growth and increasing benefits from the CP Kelco combination, including an acceleration in cross-selling, the migration of distribution relationships to a direct service customer model, and delivery of cost synergies.

Therefore, for the year ending 31st of March 2026, in constant currency and compared to pro forma comparatives, we now expect revenue and EBITDA to decline by low single-digit percent compared to the prior year.

In summary then, in April, we started to operate as one combined business. Since then, we have made real progress setting up the business for future growth, while also operating in a period of considerable economic volatility. The benefits of the combination appear to see. Looking ahead, the fundamental growth drivers of our business remain strong. Consumer demand for healthier and more nutritious food and drink continues to grow. And our expertise in food and drink reformulation and our leading positions across sweetening, mouthfeel and fortification, mean we are well-positioned to capture this growth.

To conclude, we are determined to accelerate top-line growth and are fully focused on successfully delivering the benefits of the CP Kelco combination. With that, I will open up the call for questions.

[Operator Instructions] We will now take our first question from Matthew Webb from Investec.

I wonder if I could start off by just asking about the split of the revenue decline, both in H1 and expected for the full year between volume and pricing. And I suppose I'm particularly interested in the extent to which the weakness in volume demand has had the knock-on effect on pricing and what sort of the competitor behavior has been as well as a result of that weakness? That's my first question.

Obviously, overall we're seeing a lack of consumer confidence in sluggish markets and the dynamics across regions are somewhat different. So in North America, we're seeing pretty broad-based category softness fueled by inflation and tariffs, I think. But we're seeing relatively balanced pricing environment, but broadly in line, slightly positive. In Europe, as we said when we did our full year results, we consciously invested some price in driving volume momentum. So in Europe, we're actually seeing a slight volume momentum, but some pricing decline. And in Asia, we're seeing relatively muted demand with some pricing pressure, especially driven by softness in China.

And then I wonder if you could perhaps try and separate out the impact that tariffs have had here on the reduced guidance. Is that a big factor? And I suppose there, I mean even more about the direct impact of tariffs on you rather than the sort of broader impact of tariffs on consumer demand?

You're asking the right question, of course, because the second order impact on consumer confidence is difficult to measure but clearly, we're seeing that, especially in North America. And overall, the team is navigating the tariff situation well, given that it's still bumping around a bit, it's relatively uncertain, and we're focused on customer supply security, recovery of tariffs where possible and alternative supply routes. So if you look at it around the world, we said at the full year that it routed about 2% of our revenue shipped into China was being impacted. There's a little bit going the other way. The other thing that's happened is the significant imposition of tariffs on Brazil and [indiscernible] out of Brazil into North America. So we think -- and again, it's very difficult to be precise when you look at supply routes, probably 3% to 5% of our revenue pre -- any mitigation is being impacted by tariffs because of the flow of goods. As I said, we're mitigating that in various ways. So I would think about it in that kind of...

And then sorry, final question. I mean clearly, the deterioration in the market environment, as you said, has been a relatively recent thing at least has become worse of late. And I wonder, therefore, how much sort of confidence and visibility you've got in the ability to improve your performance in Q4. It just sort of feels like you're slightly swimming against the tide there. How confident can you be that we will see that improvement?

So we're not assuming any near-term improvement in the market environment until we see that, and we shouldn't be building that into our assumptions. However, what we are clearly going to see in Q4 is the benefits of the combination starting to flow through. So if you remember, we always said the cross-selling benefits, the distribution to direct benefits would only start to flow towards the end of the year and we have very clear line of sight to those. And we're also seeing the pipeline building on our solution selling portfolio because of the benefits of bringing the 2 portfolios together. So we're really assuming any improvement in quarter 4 is coming from the benefits of combination flowing through more fully and the actions we're taking to accelerate growth regardless of the environment we're operating within.

We'll now take our next question from Patrick Higgins from Goodbody.

A couple of questions, if I may. Firstly, just in terms of, I guess, that innovation pipeline, and you touched on it there, Mark, but Nick, sorry, but maybe you could just elaborate one of the things we've heard from a lot of customers of yours or peers is the pipeline and the demand from an innovation perspective, particularly in the U.S. as reformulation really starts to kick in, has never been stronger, so I'd be interested to hear your comments on that. And secondly, look, apologies, I didn't hear all of your prepared remarks, but on sucralose, could you maybe just give us a comment in terms of how that business is trending and how much of the softness you've called out today is related to that business?

So let me take your second question first on sucralose. We're still seeing very strong demand for sucralose, this is what we do. We talked about this a number of times and let me put simply, we're pretty much selling everything we can make. And while there's been some noise on sucralose in the market recently, we're seeing very strong robust demand and continue to see that, so that's pretty clear. On your first point, yes, we are seeing strengthening of the pipeline. And a lot of that is to do with the benefits of bringing the combination together as well.

I think the question we're still asking ourselves internally is how fast that pipeline converts in an uncertain consumer environment because what we're seeing at the moment is a lot of relative pricing in the market versus innovation, so the question we can't answer yet is the pace of conversion of that pipeline. The win -- success rate is very good actually in the pipeline when we look at that. When those products come to market, it is still less certain, I would say.

We'll now move to our next question from Joan Lim from BNP Paribas Exane.

A couple of questions from me, please. So you mentioned you are taking a series of actions with customers. I was wondering if you could help providing more color as to how the conversations look like, what else you're doing with the customers? So that's my first question. And second question was the categories. In terms of categories, I know you said broad-based softness in North America, but I wondered if there were any like beverages or specific categories you could call out in terms of latest color on market trading?

So let me take the second question first. We're actually seeing pretty consistent softness across our key categories currently. I wouldn't call any out specifically at a sort of macro category level. Clearly, when you go double click one level below into subcategories, we're seeing more slightly healthier demand for the better-for-you type part of the portfolio. But overall, net-net, there isn't a significant difference across the core categories that we always talk about serving and we're obviously continuing to track that closely as we go forward.

In terms of what we're doing, the benefits of the portfolio clearly allow us to think differently about how we serve our customers. And a big part of that is, frankly, working through which customers we want to double down our efforts on and where do we see the most growth and how do we deploy our resources with the right ammunition to accelerate growth with the customers where we see most opportunity. So we're doing a lot of work on segmenting our customers both globally and locally to deploy our resources as effectively as possible. And at the same time, making sure that based upon what we're seeing in terms of consumer demand and consumer trends, we're building the ammunition and the solutions focused on those areas of consumer opportunity. And we'll talk more about that when we do our half year results in November.

Sorry, can I just follow up on that? So you mentioned customers locally and globally. Are you seeing a difference between the local and regional customers and the bigger customers?

Always when you come across the world, you see different behaviors. I wouldn't call out a specific trend that's global versus regional. It's just more importantly for us, it's about making sure in each region, we're working with the right customers because of how they're building their businesses locally. And that can vary global customers versus regional.

Because I think the global customers have been losing share to the local and regional, who might be growing faster. So I wonder if there were any...

Why it's important that we build a balanced focus across all customer types to make sure we're focusing on where we see most growth potential.

And then on your broad-based category softness, was it just in North America? Or was it across regions?

Specifically referencing to North America in the more recent months, I mean we are seeing varying cash flow dynamics across the world. In Latin America, we're seeing stability in Brazil, some softness in Mexico. Across Asia, we're seeing relatively muted demand, but there are opportunities in places like health and wellness. In Europe, we're seeing relatively stable demand with opportunities in categories like dairy and clean-label, so the point I made earlier in some way about customer segmentation, you have to look at it region by region and get on the surface where the key trends are.

We'll now take our next question from Alex Sloane from Barclays.

Two for me. One is a follow-up in terms of the assumptions in the second half. So it sounds like you're not assuming much in the way of improvement inflection in underlying market conditions from a sort of a volume perspective. What are you assuming in terms of the pricing round? So obviously, I guess, kind of weaker demand probably doesn't bode that well there. So have you been conservative in your assumptions there? And I guess sort of the overarching question there is how confident can we be that this is kind of one and done? Or is there more risk to the revised full year guidance?

And then second question, I think in your prepared remarks, you talked about CP Kelco margins moving higher in the first half despite obviously the fact that kind of the group profits are going to be down high single digits. So is it fair to assume that sort of more of this pressure is being felt in the legacy-tight FBS business than CP Kelco?

So on your first question, Alex, obviously, we're very early in the framework agreements we're building for next year with customers and that process will continue through the next few months. We've been relatively conservative in our assumptions for the contracting round at this point in the year. And as always, we'll give you more color on that as the round evolves. On the CP Kelco margin point, we are seeing improvements at the gross margin level. You have to remember, of course, that we're not measuring profit margins separately across the 2 businesses at the moment because they're integrated. So to some extent, some of the investments we're making in the business sit below the gross margin level. But it would be fair to say that we have seen some pressure on the legacy-tight Lyle business, especially because of the pricing which has put back into the market in the last round.

And maybe just if I could squeeze in one more. Just in terms of the Brazil tariff situation, obviously kind of relatively lower I think those kicked in, in August. Could you give a bit more color in terms of how you're mitigating that and what impact that had -- I guess what impact you're assuming that has for the full year?

So roughly about 1% of our revenue is shipped out of Brazil into North America. We are shifting supply routes to source more out of Europe because we've got [indiscernible] manufacturing in Brazil and in Europe. And obviously, where possible, we're passing tariffs through. So we've assumed a rebalancing between Brazil and Europe and an appropriate level of cost associated with the tariff shipping into the U.S. that's built into the overall assumptions we've given you today. Sarah, do you want to add anything to that?

No, I think that's absolutely. I think [indiscernible] maybe linked to that, as we navigate through tariffs, obviously, we are really focusing on having the right products for the customer in the right place which impacts our supply chain. And I think that leads to an inventory level which is not yet optimal. And that will come later. But obviously, it's that -- the prime focus is the right products in the right place for our customers.

And sorry, just one more. Obviously, you've done well over the last few years in terms of driving productivity savings. If the outlook actually does deteriorate further, is there more you can look at on this front?

Absolutely, we will continue to drive productivity hard. As you say, we've got a very successful track record and overall, the program that we announced a couple of years ago is running ahead of target, so we'll continue to double down our efforts on that. And of course, as we learn more about the potential of the combined business, we'll -- I'm sure [indiscernible] more opportunities that will help with fueling the business.

We will now take our next question from Damian McNeela from Deutsche Numis.

A few for me, please. Firstly, just on the sort of the demand outlook, I think in North America, you're ascribing the slowdown to broadly economic factors. I was just wondering to what extent do you think GLP and consumers just eating less is impacting this? And how we should think about that when we think about our medium-term expectations in that business is the first question?

Second question is on sucralose. Now I hear what you said around the sort of current trading of sucralose. But what do you think the risks are around changing regulatory sentiment towards high-intensity sweeteners and how sucralose positioned to deal with that? And then I guess the final question is perhaps for you, Sarah. Given the sort of downgrades we're sort of looking at today and the sort of increased talk about destocking across the sector, how should we think about cash generation for the full year?

So on the demand outlook, I would say I mean the facts that we're seeing are significant consumer inflation in price in North America. So if you look at the retail sales data, while volume is down, value is up quite significantly. And that's always a big driver of relative demand. On GLP-1, no doubt it's changing the way people eat. And as we talked about in our capital markets event a couple of months ago, we see that as an opportunity for reformulation over time because of the need to provide more nutritionally balanced and dense food for those on GLP-1 and then to provide healthy alternatives when they come off the drug. So we're looking at through the lens of opportunity. And obviously, we'll see how that plays out. When I look at the data, it looks like the price inflation is driving a significant piece of the volume softness in the near term.

And on your question on sucralose, there's been a continual [indiscernible] pressure on high-intensity sweeteners for a number of years. And we continue to see the demand for sucralose especially to be very robust and growing across the world. And that's a trend we've seen for the last 10 years. So we're very confident about the outlook for our sucralose business, especially as we are very focused on customers who really value what we do and we are capacity constrained at this point.

However, whether a decrease in demand for high-intensity sweeteners, that's the power of the portfolio because we have other sweetening solutions in the business that can replace high-intensity sweeteners and provide the same kind of impact, albeit that there's often a cost trade-off there. So if you take a high-intensity sweetener out, you've got to put something else in and natural sweetener solutions like stevia can really play against that trend should that happen. So I think the portfolio balance here is really important and the way we position that sucralose business is really important when you think about the future.

And then Damian, on cash, of course, we continue to focus on cash and continue to focusing on target cash conversion of 75% and the reduction of our leverage. However, as per one of the earlier answers, we've got to acknowledge that the working capital is going to take a bit of time to be optimized because given the volatility in the tariff environment, that doesn't help optimizing our inventory position at the moment; absolutely, we're focusing on getting inventory in the right places to support the customers. And obviously, we'll talk more about where cash lands on November 6 for our H1 results.

[Operator Instructions] We'll now move to our next question from Lisa De Neve from Morgan Stanley.

I have 2 questions, and one is a bit of a follow-up on the demand comments you've made. So can I just ask you to which extent -- I mean, CPGs are being here much more cautious in their purchases and are either mimicking the underlying market? Or are they actually being a lot more cautious than perhaps the softness we're seeing in the market? I'm just trying to understand and disentangle what's driving this demand weakness?

Because my understanding is that the North American market and global food and beverage market is trending broadly flattish with CPGs, the big ones being down. And I'm just trying to understand, is it just CPGs being even more cautious on their purchases and managing their inventories? Is it specific ingredients that -- where you see softer demand? I mean it would be great to get a little bit more granularity on this. And then secondly is a bit of a follow-up on the free cash flow question. In the light of the sort of softer year for you, and it's very much across the sector, but just talking about you, I mean, how committed are you to the dividend?

So on your point on CPG and overall demand, we've clearly seen a decline in volumes in North American retail in the last quarter. So that's a clear trend we're seeing. Whether that's then impacting customers' inventory levels and how they think about that is a bit early to tell. But we're certainly seeing a reduction in demand in the near term. As you rightly correct, more broadly across the [indiscernible], things are relatively more stable, not growth but stable. Now that's a gross generalization because you have to look market by market. But the thing we've really seen in the recent couple of months or so is a notable slowdown in North America.

On your question on the dividend, the Board has a very clear capital allocation structure framework and has been committed to a progressive dividend for the last 10 to 15 years. So we're absolutely committed to the dividend, and the Board will continue to appraise the capital allocation framework as normal as we go forward.

It appears there are currently no further questions today. So with this, I'd like to hand the call back over to Nick Hampton for any additional or closing remarks. Over to you, sir.

Thank you, operator, and thank you for your questions. So in summary, we continue to make good progress delivering the benefits of the CP Kelco combination. Customers are increasingly recognizing the strength of our combined portfolio and the cross-selling pipeline has more than doubled in value over the last 2 months. A slowdown in market demand has impacted our recent performance, and we are accelerating actions to drive a top-line growth.

Looking ahead, the fundamental growth drivers of our business remain strong. Consumer demand for healthier and more nutritious food and drink continues to grow, and our expertise in food and drink reformulation mean we are well positioned to capture this growth. We are determined to accelerate top-line growth and are fully focused on successfully delivering the benefits of the combination. Thanks for your time and questions, and I wish you all a very good day.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.