Associated British Foods (ABF) investor relations material

Trading and operational highlights

• Primark sales grew 3% in Q3, with U.K. sales up 1%, U.S. sales up 16%, and market share gains, especially in womenswear.

• New store openings, including the first Manhattan location, contributed 5 percentage points to Primark's sales growth, with strong performance in the U.S. and Middle East.

• Grocery sales rose 1%, supported by brands like Twinings and Ovaltine, while U.K. oils remained a drag; the Hovis acquisition is expected to drive cost synergies.

• Ingredients sales increased 3%, with growth in yeast, bakery, and specialty ingredients; small acquisitions supported future growth.

• Agriculture sales declined 14% in Q3, with cost base adjustments and disposal of a U.K. feed mill following a customer loss in compound feed.

Sugar business outlook and risks

• Sugar faces significant uncertainty, with a projected adjusted operating loss of £25m–£60m for FY2026, driven by gas price volatility, African production, and currency risks.

• Gas price movements have a material impact on profit, with every GBP 0.01/therm change affecting profit by GBP 600,000–700,000.

• Malawian currency devaluation and Tanzanian mill ramp-up are key variables; further deterioration in sugar results is expected in 2027.

• European sugar production is forecast to drop nearly 15% in the next harvest, but high inventories may keep the market in surplus.

• El Niño weather patterns could impact African sugar output, though not yet observed this year.

Primark strategy and performance

• U.K. Primark performance is strong, especially in womenswear, with positive like-for-like sales and effective marketing and digital investments.

• European Primark markets remain subdued, but targeted marketing and customer focus are beginning to show positive results, especially in Iberia and Eastern Europe.

• U.S. Primark stores show mixed results: Manhattan is performing well, while newer markets face brand awareness challenges.

• No change to Primark's 2026 guidance; adjusted operating profit margin for the full year is expected to be around 10%.

• Click-and-collect in the U.K. is outperforming expectations, with plans to expand in Europe pending supply chain solutions.