Interim Results Announcement

Associated British Foods plc results for the 24 weeks ended 1 March 2025

^{Operating profit is stated after exceptional charges and other items as shown on the face of the condensed consolidated income statement. In H1 2025, total exceptional items were £104m primarily related to a non-cash impairment charge (H1 2024: £6m). 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 13. These measures are used within the Financial Headlines and in this Interim Results Announcement.}

Group performance

• Revenue in line with prior year, with growth in Retail and Ingredients offset by a decline in Sugar
• Adjusted operating profit declined 10% due to an adjusted operating loss in Sugar
• Adjusted EPS decreased 8% to 83.6p benefitting from the accretive impact of share buybacks
• Continued investment of £557m in capacity, capabilities and new technology
• Free cash flow of £27m reflects lower operating profit and normal seasonal working capital outflow
• Continued strong balance sheet with leverage ratio of 1.0x at 1 March 2025

Segmental performance

• Retail:
  • Sales grew 1% to £4.5bn
  • Adjusted operating profit increased 8% to £540m and adjusted operating margin increased to 12.1%
  • Growth in Europe and the US, while the retail environment in the UK and Ireland was challenging
• In Grocery, good sales growth across most of our brands offset by lower sales in US oils and Allied Bakeries, as expected
• Ingredients sales grew 2% and adjusted operating profit increased 8%
• Sugar had an adjusted operating loss of £16m, primarily due to lower European sugar prices and an operating loss in Vivergo
• Agriculture adjusted operating profit decreased 8% to £12m

Shareholder returns

• Interim dividend in line with the prior year at 20.7p per share
• Completed £422m of share buybacks in 2025 to-date, with a further £169m to be completed this financial year¹

1 _{As at 15 April 2025}

Full year outlook

Our outlook for the Group in this financial year is unchanged, with the exception of Sugar where we are providing updated guidance below. The Group outlook reflects the absorption of a US tariff impact in H2 2025, based on what we know today.

In Primark, we continue to target low-single digit sales growth for the full year. This will be driven by our store rollout programme in our growth markets in Europe and the US, which is on track to contribute around 4% to total Primark sales growth, offset by weaker sales in the UK and Ireland. While we continue to assume our trading in the UK remains challenging in H2 2025, there have been some early signs of improvement in recent weeks. We are focused on driving underlying growth across our markets as we continue to strengthen Primark's great-value proposition through initiatives in product, digital and brand. We continue to expect adjusted operating profit margin in 2025 to be broadly in line with last year's level. This reflects an improvement in gross margin and good cost management, offsetting wage inflation and a step up in investment. Our adjusted operating margin in H2 2025 is expected to be lower than it was in H1 2025, given the impact from phasing of one-off items which benefitted H1 2025. We continue to make good progress with our store rollout programme and target a contribution of around 4% to 5% to Primark's total annual sales growth for the foreseeable future.

In Grocery, we remain focused on driving sales of our leading international and regionally-focused brands, underpinned by effective marketing investment and strong commercial execution. We continue to expect overall performance this year to reflect the normalisation of profitability in our US-focused businesses and an operating loss in Allied Bakeries. Allied Bakeries continues to face a very challenging market. We are evaluating strategic options for Allied Bakeries against this backdrop and we expect to provide an update in H2 2025. In Ingredients, we expect growth to continue in both our yeast and bakery ingredients businesses as well as in our portfolio of speciality ingredients businesses.

In Sugar, persistent low European sugar prices and an operating loss in our UK bioethanol business, Vivergo, are impacting overall profitability in 2025. Challenges in Tanzania, due to the overhang of high levels of sugar imports in 2024, and in South Africa, due to drought, are also impacting performance. As a result, we now expect Sugar to have an adjusted operating loss of up to £40m in this financial year. In our Spanish business, Azucarera, the deterioration in market conditions has demonstrated that the cost base is structurally too high. As a result, we are close to completing an operational review, which is assessing a number of scenarios to restructure this business. In Vivergo, the way in which regulations are being applied to bioethanol is undermining the commercial viability of our business. We are having constructive discussions with the UK Government to explore regulatory options to improve the position. There is no guarantee that these discussions will be successful, and we will either mothball or close the Vivergo plant if necessary. The actions we are taking in Azucarera and Vivergo increase our confidence that Sugar profitability can recover over the medium term. The timeframe for recovery in the Sugar segment is longer than we had originally expected due a slower-paced rebalancing of supply and demand in European sugar markets and a delay in the recovery of profitability in Tanzania.

In an operating environment with significant uncertainties, the Group still remains well positioned for the medium term, supported by a strong balance sheet and cash generation and good momentum in our Retail, Grocery and Ingredients businesses.

For further information please contact:

Associated British Foods:

+44 20 7399 6545

Joana Edwards, Interim Finance Director

Lucinda Baker, Head of Investor Relations

Chris Barrie, Corporate Affairs Director

Citigate Dewe Rogerson:

+44 20 7638 9571

Kevin Smith +44 7710 815924

Angharad Couch +44 7507 643 004

There will be an analyst and investor presentation at 09.00am BST today which will be streamed online and accessed via our website here.

2025 Interim Results Announcement (PDF)