Treatt plc – Full Year Results

Strong performance, poised to accelerate growth

Treatt, the manufacturer and supplier of a diverse and sustainable portfolio of natural extracts and ingredients for the beverage, flavour and fragrance industries, announces today its audited results for the financial year ended 30 September 2024.

	Financial year ended 30th Sept 2024	Financial year ended 30th Sept 2023	Change
Revenue	£153.1m	£147.4m	+3.8%
Gross profit	£44.5m	£44.8m	(0.8)%
Gross profit margin	29.1%	30.4%	(130)bps
Profit before tax and exceptional items	£19.1m	£17.3m	+10.1%
Profit before tax	£18.5m	£13.5m	+36.3%
Adjusted EBITDA1	£24.9m	£23.0m	+8.4%
Adjusted basic earnings per share2	24.47p	22.94p	+6.7%
Basic earnings per share	23.61p	18.01p	+31.1%
Total dividend per share	8.41p	8.01p	+5.0%
Net debt	£0.7m	£10.4m	(92.9)%
Adjusted net operating margin	13.0%	12.4%	+60bps
Adjusted return on average capital employed3	13.6%	12.2%	+140bps
Return on average capital employed	12.6%	9.0%	+360bps

1. EBITDA is calculated as operating profit plus depreciation and amortisation. The adjusted measure excludes exceptional items.
2. Adjusted earnings per share measures exclude exceptional items and the related tax effect.
3. Return on average capital employed is calculated by dividing operating profit before exceptional items (as shown in the Group income statement) by the average capital employed in the business, which is calculated as total equity (as shown in the Group balance sheet) plus net debt or minus net cash (as shown in the Group reconciliation of net cash flow to movement in net debt), averaged over the opening, interim and closing amounts. The adjusted measure excludes exceptional items.

FINANCIAL HIGHLIGHTS:

• Revenue growth of 4% (6% in constant currency), driven by strong H2 revenue growth of 13% reflecting organic growth from new business wins and a normalisation in industry demand.
• Full year revenue was marginally lower than anticipated (by 1.4%) as extreme weather in the US delayed a large shipment at year-end, shifting associated revenue into 2025.
• Record adjusted EBITDA of £24.9m, growth of 8% (FY23: £23.0m), reflecting strong cost disciplines and other self-help measures embedded.
• Profit before tax and exceptional items growth of 10% (13% in constant currency) to £19.1m (2023: £17.3m), slightly ahead of Board expectations.
• Year-end net debt significantly reduced to £0.7m (2023: £10.4m), reflecting the robust cash generation and investment discipline.
• Full year dividend of 8.41p up 5%, reflecting our progressive dividend policy.

OPERATIONAL HIGHLIGHTS:

• Strong Heritage growth, with a focus on utilising capacity, growing volumes with strategic customers and price increases in Citrus due to sustained higher commodity prices. Treatt remains a key strategic supplier to flavour houses as demand normalised in Synthetic Aroma.
• China continues growth momentum; new Shanghai innovation facility approved to accelerate localised innovation and customer collaboration.
• Strong growth in Tea underpinned by multiple branded wins in North America; progressing with investment in pilot plant to accelerate new product trials and scale up across our Premium segment.
• Focus on driving revenue growth, including recruitment of experienced industry experts based closer to our customers.

David Shannon, CEO of Treatt, commented:

“I’m pleased to be delivering a strong set of results for the year, my first since joining Treatt in June.

“We made great progress, with growth in both sales and profit, boosted by a really strong revenue performance in the second half, up 13%. And I am particularly pleased that we have brought net debt right down thanks to our strong cash generation, with further momentum to be cash positive in the new financial year. This performance not only reflects good conversion of the order book and the strong cost discipline that’s now embedded across the Group, but also normalising demand trends and the benefits of investment. We have invested for growth, expanding our commercial teams, bringing them closer to customers, and are close to opening our new Shanghai innovation centre, in line with our strategic focus in the region.

“Since I started, my reasons for joining Treatt have been reinforced. I have seen firsthand that it has a great reputation in the market. This is a strong business with a leading market position, perhaps no surprise, as it is full of talented people. We punch above our weight, with innovative products offering, cutting edge technologies and deep, longstanding relationships with our customers.

“I’m excited about the future and I see clear opportunities to build on what has been achieved so far. We will look to enhance our agility and explore new areas within existing, adjacent and new markets. We are well positioned for the future and I look forward to working with the talented team to achieve Treatt’s longer term ambitions.“