Associated British Foods (ABF) Trading update summary

Trading and operational performance

• Primark sales grew 3% in Q3, with new stores contributing 5 percentage points to growth and UK market share gains, especially in womenswear; like-for-like sales declined 2.2%.

• US Primark sales rose 16%, while Europe sales fell 1%; UK sales were flat, and Europe saw divergence with Iberia outperforming and France and Italy facing challenges.

• Grocery sales increased 1%, led by Twinings and Ovaltine, with Hovis acquisition approved.

• Ingredients sales rose 3%, driven by yeast, bakery, and specialty ingredients.

• U.S. oils business faces ongoing headwinds due to consumer pressures and changing foodservice demand.

Sugar business outlook and risks

• Sugar is projected to deliver an adjusted operating loss of £25m–£60m in FY2026, with significant uncertainty from gas prices, African production, and currency devaluation.

• Gas price volatility and potential Malawian kwacha devaluation could swing profitability by tens of millions.

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

• Further deterioration in sugar results is expected in 2027, with ongoing risks from energy, fertilizer, and weather impacts.

• Sugar Q3 sales declined 4%, with lower prices in Europe and production delays in Africa.

Strategic initiatives and investments

• Continued investment in marketing, digital, and technology capabilities to drive like-for-like sales and customer engagement, especially in Primark.

• Integration of Hovis with Allied Bakeries is expected to deliver cost synergies and support bakery innovation.

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

• Tight stock management and markdowns in Primark are seen as opportunities for margin recovery or price investment in future years.

• Several long-running projects completed or nearing completion, supporting long-term growth confidence.