2024 Interim Results Announcement


Associated British Foods plc results for the 24 weeks ended 2 March 2024

Financial Headlines

  24 weeks ended 2 March 2024 24 weeks ended 4 March 2023 Actual currency change Constant currency change
Group revenue £9,734m £9,560m 2% 5%
Adjusted operating profit £951m £684m 39% 46%
Adjusted profit before tax £911m £667m 37%  
Adjusted earnings per share 90.4p 62.0p 46%  
Operating profit £931m £663m 40%  
Profit before taxation £881m £644m 37%  
Basic earnings per share 87.4p 67.0p 30%  
Gross investment £571m £527m 8%  
Free cash flow £468m £(510)m    
Net cash before lease liabilities £668m £586m    
Total net debt £(2,496)m £(2,601)m    
Interim dividend 20.7p 14.2p 46%  
Adjusted operating profit is derived from operating profit after taking certain charges and credits as shown on the face of the condensed consolidated income statement. References to changes in revenue and adjusted operating profit in the following segmental commentary are based on constant currency. The Group has defined and outlined the purpose of its Alternative performance measures in note 14. These measures are used within the Financial Headlines and in this Interim Results Announcement.

George Weston, Chief Executive of Associated British Foods, said:

“This is a very strong set of financial results, as we are now benefitting from the restoration of some normality in our markets and in our supply chains. Improvements to the Group’s operational performance, driven by the investments and strong execution over the last few years, are now becoming visible. Group profit margins are recovering accordingly to more normal levels.

Looking ahead, we continue to invest with discipline to build further sustainable growth. Geopolitical risks remain, of course, and the consumer has yet to fully emerge from cost of living pressures. But the Group is well positioned to deliver good returns to shareholders.”

Group performance

  • Revenue growth, up 5%, driven by continued good momentum in Retail and food businesses
  • Significant growth in adjusted operating profit, up 46%, reflecting strong margin recovery
  • Investment of £571m, including a number of strategic initiatives to improve capacity, capability and sustainability
  • Free cash flow of £468m, reflecting profit growth and a significant reduction in working capital outflow

Segmental performance

  • Strong Retail sales growth and further margin recovery
    • Revenue up 7.5% to £4.5bn, reflecting continued growth in selling space
    • Like-for-like sales up 2.1%, driven by good performance across most markets due to pricing and well-received product ranges
    • Significant increase in adjusted operating profit, up 46% to £508m, with margin recovery to 11.3%
    • Rolling out Click + Collect service more broadly in the UK
  • Significant profitability improvement in Grocery led by US-focused brands and reduction of losses in Allied Bakeries
  • Strong profitability improvement in Sugar, driven by better Vivergo performance
  • Good profit growth in Ingredients, driven by continued strong performance in AB Mauri
  • Higher profitability in Agriculture due to lower input costs

Shareholder returns

  • Significant increase in interim dividend, to 20.7p, reflecting growth in earnings
  • Final £56m of first £500m and £225m of the second £500m share buyback programmes completed in the period

Full year outlook

The Group has delivered a strong first half performance and is on track to deliver significant growth in both profitability and cash generation ahead of expectations at the start of this financial year.

We expect Grocery to continue to perform well, supported by a step-up in marketing investment, although the strong profitability of our US-focused brands is expected to normalise somewhat towards the end of the second half. In Sugar, we continue to expect a substantial improvement in profitability, benefitting from a more typical beet crop and production level at British Sugar and the reduced losses in Vivergo. Following a better than expected first half, we now expect Ingredients to

perform well this financial year, driven by AB Mauri. We continue to expect Agriculture to move forward as markets improve and it integrates and leverages the acquisitions of the last two years.

We expect Primark to continue to perform well in the second half driven by our store expansion programme and the modest levels of like-for-like growth, as we focus on driving volumes. While the consumer environment remains soft, we expect to benefit from the strength of our value proposition, our product relevance and category stretch and our increasingly effective digital engagement. We expect a moderate improvement in adjusted operating margin in Primark in the second half compared to the first half, albeit with a step-up in investment to support medium-term growth.

The Group continues to prioritise investment in its businesses and we continue to expect to increase spend in each of the next few years to slightly above last year's level.

For further information please contact:

Associated British Foods:

+44 20 7399 6545

Eoin Tonge, Finance Director

Lucinda Baker, Head of Investor Relations

Chris Barrie, Corporate Affairs Director

Citigate Dewe Rogerson:

+44 20 7638 9571

Jos Bieneman    +44 7834 336 650

Angharad Couch    +44 7507 643 004

Ellen Wilton    +44 7921 352 851

2024 Interim Results Announcement