Annual Report 2024
Strategic report
1
Introduction
3
Chairman’s Statement
5
Chief Executive’s Statement
8
Our strategy and business model
12
Key performance indicators
14
Operating review
14
Retail
22
Grocery
28
Ingredients
34
Sugar
40
Agriculture
44
Financial review
48
Section 172 and our stakeholders
54
Responsibility
66
Climate-related Financial Disclosures (‘TCFD’)
78
Principal risks and uncertainties
87
Viability statement and going concern
Governance
88
Chairman’s introduction
90
Board of Directors
92
Corporate governance matters
111 Directors’ Remuneration Report
128 Directors’ Report
131 Statement of directors’ responsibilities
132 Independent Auditor’s Report
140 Independent Assurance Statement
Financial statements
142 Consolidated income statement
143 Consolidated statement
of comprehensive income
144 Consolidated balance sheet
145 Consolidated cash flow statement
146 Consolidated statement of changes in equity
148 Material accounting policies
154 Accounting estimates and judgements
155 Notes forming part of
the financial statements
211 Company financial statements
218 Progress report
219 Glossary
220 Company directory
Progress made in 2024
Group revenue
£20.1bn
(2023: £19.8bn)
Adjusted operating profit*
£1,998m
(2023: £1,513m)
Gross investment*
£1,281m
(2023: £1,171m)
Basic earnings per share
193.7p
(2023: 134.2p)
Operating profit
£1,932m
(2023: £1,383m)
Profit before tax
£1,917m
(2023: £1,340m)
Adjusted profit before tax*
£1,957m
(2023: £1,473m)
Adjusted earnings per share*
196.9p
(2023: 141.8p)
Net cash before lease
liabilities*
£1,044m
(2023: £895m)
Net debt including lease
liabilities*
£2,021m
(2023: £2,265m)
Return on average capital
employed* (‘ROACE’)
18.1%
(2023: 13.6%)
Dividends per share
(including special dividend)
90.0p
(2023: 60.0p)
Women in the workforce
57%
(2023: 55%)
Number of employees
and number of countries
138,000 / 56
(2023: 133,000 / 55)
ABF Group scope 1 & 2
2,868 kt
(2023: 2,834 kt)
Primark number of stores
and selling space
451 / 18.8m sq ft
(2023: 432 / 18.2m sq ft)
* Alternative Performance Measures (APMs) as defined on pages 206 to 210.
Front cover images:
Primark’s store on
Wenceslas Square,
Prague; and a farm
in the Primark Cotton
Project in India
Our purpose is to provide safe, nutritious
and affordable food, and clothing that is great
value for money.
We take a long-term, patient approach to drive
sustainable growth and cash generation across
our portfolio of food and retail businesses to
create value for all stakeholders.
This aligns with our approach to sustainability
and sustainable supply chains, where we
focus on what matters and where we can
make a difference.
This year, we have continued to invest across
the Group to deliver on these aims.
Investing for
tomorrow
Delivering
today
Associated British Foods plc | 1 | Annual Report 2024
This year all our material responsibility disclosures
are included in this report. For detailed information
relating to our responsibility activities during 2024,
please visit our website www.abf.co.uk
A Jordans Farm
Partnership farm
in Hampshire, UK
Retail
Primark is a fast-growing, international
value retailer. It is one of the largest
and fastest-growing clothing retailers
in Europe, the market leader by volume
in the UK and has a growing presence in
the US. It has 451 stores in 17 countries
and more than 82,000 colleagues.
Revenue
£9,448m
47%
(2023: £9,008m)
Adjusted operating profit
£1,108m
55%
(2023: £735m)
Read more on page 14
Grocery
Grocery comprises a large and diverse
portfolio of both international brands and
regionally-focused businesses, with
leading positions in markets across the
globe. It employs almost 17,000 people.
Revenue
£4,242m
21%
(2023: £4,198m)
Adjusted operating profit
£511m
26%
(2023: £448m)
Read more on page 22
Ingredients
Ingredients comprises yeast and bakery
ingredients as well as a portfolio of
specialty ingredients focused on enzymes,
precision extraction, health and nutrition
and pharmaceutical delivery systems.
Revenue
£2,134m
11%
(2023: £2,157m)
Adjusted operating profit
£233m
12%
(2023: £214m)
Read more on page 28
Sugar
ABF Sugar produces a range of sugar
and other products from sugar cane,
sugar beet and wheat in Africa,
the UK and Spain.
Revenue
£2,529m
13%
(2023: £2,474m)
Adjusted operating profit
£199m
10%
(2023: £179m)
Read more on page 34
Agriculture
AB Agri is an international agri-food
business. We produce speciality feed
ingredients, premix and compound animal
feed. We also have an integrated dairy
business in the UK.
Revenue
£1,650m
8%
(2023: £1,840m)
Adjusted operating profit
£41m
2%
(2023: £41m)
Read more on page 40
Our operating businesses
Associated British Foods plc | 2 | Annual Report 2024
The Group delivered significant
growth in margin and profit in this
financial year as inflation eased
and market conditions stabilised
after the disruption of recent years.
The year also brought an increase in revenue as a result of good
growth in sales at Primark and many of our food businesses.
Group revenue increased accordingly to £20.1bn, 4% higher
than the previous year at constant currency and 2% higher
at actual exchange rates.
Primark’s sales increased due to its rollout of new stores
in both Europe and the US and consistent focus on its value
proposition. In Grocery, both our leading international brands and
our US-focused brands performed well with astute marketing
and notable new product launches. Our yeast and bakery
ingredients business, AB Mauri, delivered higher sales in
Ingredients, while Sugar sales were strong against a previous
year impacted by poor growing conditions in the UK. Sales
in Agriculture fell due to soft market demand.
This margin improvement across the Group followed the
restoration of some normality in our markets and good execution
by our businesses. It was particularly pronounced at Primark
where supply chain costs fell year-on-year following the previous
year’s decision not to pass the full cost of inflation on to the
customer. Similarly, lower input costs supported higher margins
in Grocery and in Ingredients. Sugar profitability was also well
ahead on much improved year-on-year production in the UK
despite lower European prices impacting performance as the
financial year closed. Improved margin in Agriculture offset
lower revenues.
The strong margin led to a substantial year-on-year increase
in Group adjusted operating profit to £1,998m, an increase over
the previous year of 32% at actual exchange rates and 38%
at constant currency. Adjusted profit before tax rose 33%
to £1,957m and adjusted earnings per share increased
by 39% to 196.9p.
Gross investment increased 9% to £1.3bn as we invested further
in both Primark and our food businesses. Primark’s investments
were centred not only on new stores but also on technology
to improve capabilities needed to drive growth. We also invested
in enhanced production capacity for our Australian bread business,
for our enzymes and yeast extraction plants in our specialty
ingredients division, and for our Tanzanian sugar business
expansion. We completed some modest acquisitions in the
year, principally for our Grocery and Ingredients businesses.
Capital structure and shareholder returns
Our capital allocation policy is for the Group’s financial leverage,
expressed as the ratio of total net debt including lease liabilities
to adjusted EBITDA, to be well under 1.5 times whilst financial
leverage consistently below 1.0 times may indicate a surplus
capital position. Surplus capital may be returned to shareholders
by special dividends or share buybacks.
During the financial year we continued our share buyback
programmes. We completed the outstanding amount from
our first £500m share buyback programme commenced in the
previous financial year. We subsequently initiated our second
£500m share buyback programme in November 2023, which we
completed in August 2024. We then extended this programme
by a further £100m, which is now complete.
CHAIRMAN’S STATEMENT
Investing for tomorrow
Delivering today
Associated British Foods plc | 3 | Annual Report 2024
The Group had very strong free cashflow in the year,
generating £1,355m. Therefore, at the end of the financial year
the financial leverage ratio was 0.7x times. The Group continues
to prioritise investment in its businesses and we expect to
maintain investment in the medium term at a level in line with
last year’s level. Nevertheless, given the outlook for the Group,
the strength of the balance sheet and the underlying cash
generation of the business, the Board has decided to continue to
return additional capital to shareholders. Therefore, the Group
will continue with a buyback programme, targeting an additional
amount of £500m over the next 12 months.
In addition, the Group is declaring a special dividend of 27.0p
per share. The Board is proposing a final dividend of 42.3p per
share, which together with the special dividend will be paid on
10 January 2025 to shareholders on the register on 13 December
2024. Taken with the interim dividend of 20.7p per share, the
total dividend equates to 90.0p per share, an increase of 50%
on the total dividend of 60.0p in 2023.
Our commitment to good business
The Board has ultimate responsibility for overseeing business
practices and this Group has a clear sense of social purpose.
We work hard to provide safe, nutritious and affordable food
and good quality, affordable clothing to millions of customers
worldwide every day. Only if we do these well should we
make a profit. So our approach to ESG and supply chains is
aligned to our long-term and patient approach to value creation.
This year we made further good progress on decarbonising
Sugar in the UK. We completed further improvements to water
treatment at our yeast and bakery ingredients business. Primark
also made significant progress in reducing its environmental
footprint as well as helping its suppliers work towards the same
objective. We are very clear in our approach to sustainability,
focusing on what matters, doing what needs to be done on
reporting but balancing this with obtaining an acceptable
commercial return.
Board
In a year notable for Board succession planning, I would like
to start by thanking Wolfhart Hauser for his wise and perceptive
counsel. Wolfhart stepped down on 18 January 2024 after nine
years on the Board and his service to the Company was much
appreciated. Kumsal Bayazit Besson joined as a non-executive
director on 1 December 2023 and was duly appointed a member
of the Audit and Remuneration Committees.
More recently we welcomed Loraine Woodhouse as a
non-executive director with effect from 1 October 2024. Loraine
brings extensive experience of financial disciplines in retail,
food and property. She became a member of the Audit and
Remuneration Committees on appointment and will chair the
Audit Committee from 24 April 2025 when Richard Reid reaches
nine years’ tenure as a non-executive director.
Outlook
Primark is targeting mid-single digit sales growth in 2025 as we
continue to execute our store rollout programme in our growth
markets in Europe and the US and to focus on like-for-like sales
growth in our more mature markets. This will be supported by
investment in initiatives across product, digital and brand. We
expect adjusted operating margin to remain broadly in line with
this year’s level, as gross margins stabilise and we step up
investment to drive sustainable growth. Over the medium and
long term, we continue to have significant white space
opportunities in our growth markets. We are targeting our store
rollout programme to contribute around 4% to 5% per annum to
Primark's total sales growth for the forseeable future.
In Grocery, we will continue to drive sales momentum,
underpinned by increased marketing investment. As expected,
the strong performance in our US-focused businesses during
2024 began to normalise towards the end of the year and we
expect to see the full year effect in 2025. In Ingredients, we
expect continued growth in yeast and bakery ingredients and
improved growth in speciality ingredients.
In Sugar, as previously announced, we expect the reduction in
European sugar pricing in Q4 2024 to impact performance in our
sugar business significantly in 2025, with adjusted operating
profit for the overall Sugar segment expected to be in the range
of £50m to £75m. However, we expect profitability to recover in
2026 to be more in line with 2024, as a result of the lower beet
prices that have been contracted and a rebalancing of supply and
demand in the market. In Agriculture, we expect some
improvement, particularly as our grain trading business recovers
in the UK.
The Group is well positioned for the medium term, supported by
strong cash generation and good momentum in our Retail and
food businesses.
Michael McLintock
Chairman
CHAIRMAN’S STATEMENT CONTINUED
Associated British Foods plc | 4 | Annual Report 2024
“We are very clear in our approach
to sustainability, focusing on what
matters, doing what needs to be
done on reporting but balancing
this with obtaining an acceptable
commercial return.”
This has been a year of very
significant progress both
operationally and financially with
new records set for profits, free
cashflow, and capital investment.
It was particularly pleasing that
four of five divisions grew
profits, and all five made good
strategic progress.
Of course, some of this strong performance was due to a return
to something like normality in our markets and supply chains,
and by inflation easing which in turn supported a distinct if fragile
improvement in consumer behaviour. Self-help contributed too,
with our steadily increasing levels of investment funding more
research and development, more digital and technology
innovation, and more marketing as well as physical capital
expenditure in production capacity and efficiencies.
That said, the outturn came with a sting in the tail as the year
came to close: short-term volatility in European sugar prices is
taking its toll on the profitability of the European sugar industry
and we are not exempt from that. We expect this impact to be
relatively short-lived and our sugar businesses and the Group
as a whole remain very well positioned.
So, Group revenue increased to £20.1bn, 4% higher than
the previous year on a constant currency basis. Adjusted
operating profit increased to £1,998m, higher by 38% than
the previous year. Adjusted earnings per share increased 39%
to 196.9p. Gross investment was £1.3bn.
Last year I noted that we had more to do to rebuild Group
margins and we have made very good progress. We are
now back to margins that are higher than those we saw in
pre-pandemic times. It has been a somewhat bumpy road for
everyone but the strength of the Group has shown through.
Primark’s margin recovery to more normal levels after years
of disruption is particularly pleasing, although we never doubted
that it would return to these levels. And that despite the fact
there was still some volatility in supply chains with the closure
of the Suez canal and disruption in some of our sourcing
locations such as Bangladesh.
Primark’s low-cost model is as strong as ever. We continue to
offer the lowest prices to consumers in each of our markets and
this remains our core operating principle. With the normalisation
of input costs, the era of needing to raise prices to cover inflation
is now behind us. Our product ranges, curated by our exceptionally
talented buying teams, were characterised by our relentless
focus on value and desirability. Our licence and collaboration
development continues to grow.
Chief Executive’s Statement
Associated British Foods plc | 5 | Annual Report 2024
Our opportunity for sustainable compounding growth remains
substantial. We are delivering significant growth in our target
growth markets such as Spain, Italy, France, Eastern Europe and
of course the US. In our ‘home’ markets of the UK and Ireland
we do not expect to grow as fast given their maturity, but they
remain hugely important to us and they are where we trial new
concepts and test and build innovation in product and technology.
We are particularly delighted to celebrate our 50th anniversary in
the UK this year, a milestone of real note marked by our intention
to invest £100m more in the UK high street. I am very proud
of how Primark has developed since 2005 when our acquisition
of Littlewoods gave Primark presence and scale. Nearly 20 years
on we still have plenty to do in the UK.
More broadly, Primark’s strategic development is still exciting.
We are focusing on individual country strategies, refreshing our
brand and launching brand campaigns in countries where needed
for different reasons, namely in Germany to reposition the brand
and in the US to increase brand awareness. In Germany it is
too early to declare success but the business feels significantly
better than it did 12 months ago. Our business in the US now
has 27 stores and, more importantly, is profitable.
From a digital perspective, we increased our customer database
significantly, which has contributed to a 23% increase in web
traffic. This year also saw a significant milestone in our digital
deployment with our decision to roll out Click & Collect across
Great Britain. And our regions of expansion are increasing, as
we add countries in Eastern Europe and new states in the US
while we have also announced our intention to open stores
in the states that make up the Gulf Cooperation Council.
There is a lot of white space to be excited about.
Grocery also had an excellent year and delivered a very strong
improvement in financial performance despite significant
investment in new product development and targeted marketing
campaigns. We directed much of this investment at our
International Brands such as Twinings, Ovaltine, Patak’s, Blue
Dragon, Jordans and Mazzetti and at our US-focused brands
such as Mazola and Fleischmann’s. Twinings and Mazola, to
pick out just two, are clearly benefitting, Twinings in its growth
markets and Mazola through a stronger market position and
greater consumer affinity.
In general the operating environment has allowed us a welcome
return to focusing on long-term growth rather than on inflation
and supply chain disruption. Our businesses in Australia and
New Zealand have been engaged in some of the most interesting
activities. They have also had probably the most challenging
consumer conditions this year that we have seen across our
markets. However, they also have some of the best long-term
fundamentals of any Western markets and so we are investing
there for the long-term and have completed, or are in the middle
of completing, some of the Group’s bigger capital projects.
We are also evolving our Australian portfolio through acquisitions.
Ingredients continued to perform very well indeed, with very
good growth in sales and profits led by AB Mauri, our yeast and
bakery ingredients businesses. To put the performance in context,
it feels as though the business is at levels of profitability which
are both deserved and sustainable. The business is making great
advances on numerous fronts whether it be innovation in bakery
ingredients, growth in non-bakers yeast, including through
acquisition, or delivery of bespoke customer solutions in the
varied markets in which we operate.
ABFI, our portfolio of specialty ingredients businesses, had a
mixed year from a short-term trading perspective as it continued
to wrestle with customer destocking but that phase looks to be
nearing its natural end. We continue to invest in capability with
a view to accelerating the long-term growth potential that these
businesses undoubtedly have.
We increasingly think of Sugar as two sets of businesses.
We have significant growth opportunities in Africa, and a source
of cash generation in Europe. There was a third: we sold our
remaining sugar factories in North China in the course of the year
after some 25 years. Across those years, our China sugar
businesses have been very profitable for us.
This was a year when profit improved strongly in the Sugar
segment, now the fourth successive year of profitable growth.
European sugar initially benefitted from higher prices and good
beet crops but as the year progressed it became evident first
that sugar prices were falling and then that they were falling
significantly. So, we ended the year with lowered expectations
and the outlook for next year is challenging. However, we are
confident our European businesses will bounce back in the 2026
financial year and we can already see drivers of that improvement.
Our sugar businesses in Africa continue to develop. That
continent has and always will be subject to short-term bumps
caused by weather and currency, but we are building a great
set of businesses there and I have never been more confident
in their long-term potential supported by strong fundamentals,
great brands and routes to market, and significant
improvement opportunities.
Revenues have continued to fall in our Agriculture segment
with lower prices and volumes prevalent in our UK and China
compound feed markets. The biggest challenge however
was the impact of poor weather in the UK which hurt sales
at Frontier, our joint venture specialising in arable farm inputs
and grain marketing. However, we are making progress on
developing a suite of agricultural technology businesses that
should operate at better margins. Our dairy business, built
around a combination of established and recently acquired
businesses, performed well. AB Vista, our international feed
additives business, continued to broaden its product range
and AB Neo, our animal starter feed business, had a good year.
We will continue to build these innovative businesses.
CHIEF EXECUTIVE’S STATEMENT CONTINUED
Associated British Foods plc | 6 | Annual Report 2024
ESG
This year saw us move towards combined financial and
ESG reporting. Our financial and ESG investments have always
been closely aligned and it makes sense to report both activities
in this way, particularly as providing transparency will require
the provision of more data. This Group can be proud of what
we are achieving, and we endorse transparency as a means
of demonstrating progress while remaining clear that reporting
should not become an end in itself nor a distraction from
achieving real progress.
We made further progress in decarbonising UK sugar production.
British Sugar is the largest contributor to the entire ABF Group
Scope 1 footprint. A major energy reduction project at Wissington
in the UK has cut onsite energy usage sharply, with emissions
reduced by 30,000 tonnes of carbon a year. Further energy-
reduction measures have taken place at other sugar sites. Taken
together, this work is delivering a substantial reduction in British
Sugar’s Scope 1 and 2 emissions against our 2017-2018 baseline.
Primark has also made great progress in cutting total GHG
emissions. Scope 3 emissions fell year on year by 12% and by
0.6% against the 2018/19 baseline. Primark has been working
with its supplier factories on programmes focused on energy
use and efficiency to cut Scope 3 emissions. Given Primark
is growing sales and activity year-by-year, this year has been
one of achievement.Energy-saving measures in store and
procurement of renewable and low-carbon electricity meant
Scope 1 and 2 (market based) emissions fell by 21% in the year
and by 52% against the 2018/19 baseline.
AB Mauri has continued to improve the way it recycles and
manages effluent water. The multi-year investment programme
for this work reached $120m this year. Some 84% of the water
we use in the production of yeast is now treated and returned
safely to the environment. Most of this work is done so this
project will now progress without needing to be on the Group’s
list of priority issues.
Looking further ahead, we believe there is a need to prioritise
sustainable food production given the need for greater food
security, but we have to achieve that sustainable food production
while reducing GHG emissions in the agricultural sector
and agriculture in turn has to conserve the environment.
Our agricultural technology and consulting businesses are
acting with these goals in mind.
Investment
As I mentioned, we have stepped up our investment to
record levels and we expect it to remain at similar levels in
the medium term. This of course includes the continued
expansion at Primark but also some very interesting capacity
additions in our food businesses. In 2025, we will see the
completion of a number of important multi-year projects in our
food businesses and I look forward to seeing them contribute to
the growth of the Group.
We have also made a set of interesting acquisitions to help
develop our food portfolios. Investment remains the priority
of our capital allocation policy but we remain diligent about how
we deploy that investment.
People
The major part of the year’s strong showing is due to the
excellent work of our people. They remained disciplined and
focused on strong execution and performance improvement,
taking full advantage of the more stable environment. Our
improvement in Group margins is due in large part to their work.
In a group of this size people inevitably come and go. I’d like
to welcome new arrivals and thank those departing for their
contribution. In particular I want to single out Fabienne Saadane-
Oaks who leaves after nine successful years with us, growing
our specialty ingredients division with a clear sense of purpose.
I thank her for her considerable contribution delivered with
intelligence and energy.
Looking ahead
Looking ahead, the Group is well-positioned. Strong cash flow
generation is enabling disciplined capital allocation to growth
opportunities across the Group and we have ongoing multi-year
projects to deliver our focused sustainability priorities. We
believe our long-term, patient investment approach will deliver
strong returns and continue to create value for all stakeholders.
George Weston
Chief Executive
Associated British Foods plc | 7 | Annual Report 2024
“In 2025, we will see the
completion of a number of
important multi-year projects
in our food businesses and
I look forward to seeing them
contribute to the growth
of the Group.”
Our purpose is to provide safe, nutritious and affordable
food, and clothing that is great value for money.
OUR STRATEGY AND BUSINESS MODEL
Understanding our business
Associated British Foods plc | 8 | Annual Report 2024
This purpose defines our culture and values...
As a Group, we have a clear sense of our social
purpose. We work hard to provide safe, nutritious
and affordable food and good quality, affordable
clothing to millions of customers worldwide every
day. Only if we do these things well should we
make a profit.
Across all of our businesses, we live and breathe
our values through the work we do every day, from
how we drive our strategies, how we invest and
how we deliver for our customers and consumers.
It is also how we approach sustainability, with
a focus on outcomes.
Our people are key to driving the necessary
innovation and implementing the action required.
It is only through their skills and capability that
we will make necessary and timely progress.
Our employees tend to stay with us for a long time,
building exciting careers that help them fulfil their
goals at work, at home and in the community.
We believe that most people are inherently good
and that with encouragement, engagement and
support they will do the right thing in the right way.
Our high standards of integrity enable us to drive
a strong culture, recognising that acting responsibly
is the only way to build and manage a business
over the long term.
We pride ourselves on being a first-class employer,
working actively to develop our people and create
opportunities for progression.
Our businesses thrive on the diversity of their
people, so we are investing in programmes to
help remove barriers to talent.
We want to attract, recruit and retain the best
people, ensuring they are stimulated by the jobs
they do and equipped with the skills they need
to succeed.
Learn more online at
www.abf.co.uk
We proudly promote and protect
a culture of trust, fairness and
accountability that puts ethics first.
We work with others to leverage
our global expertise for local good.
From the products we make, to the
way we preserve the resources we
rely on, we are always learning and
incorporating better practices.
We strive to protect the dignity
of everyone within and beyond
our operations.
Associated British Foods plc | 9 | Annual Report 2024
...it informs our Group strategy...
Our strategy is to drive sustainable, long-term growth and
cash generation across our portfolio of food and retail businesses to create
value for shareholders and other stakeholders.
We take a long-term, patient investment approach to
create sustainable growth. We aim to build and acquire
long-duration growth businesses that will create value
and deliver strong returns.
Our portfolio of clothing retail and food businesses is
well positioned for long-term growth through a focus on
categories and sectors with resilient market fundamentals
and geographies with favourable demographics. We select
opportunities where we can create a competitive advantage
to build leadership or niche market positions, typically in
moderate-scale categories. Our investment decisions are
influenced by strategic patience and we believe our highly
diversified portfolio, across different business activities and
geographies, enables discipline and creates breadth in our
opportunities for growth. We have designed a devolved
operational leadership model that effectively manages the
breadth, mix and long-term nature of our businesses.
Our businesses are typically highly cash generative,
which enables continuous reinvestment. We are investing
in our well-established, growth-engine businesses to
drive expansion into new markets and adjacencies, while
nurturing a substantial portfolio of smaller, early-stage
businesses which have the potential to be the next
generation of long-duration growth drivers. Our ability
to invest is strengthened by having several mature,
lower-growth businesses within the Group that continue
to deliver good profitability and cash generation.
Across our portfolio, we are investing to accelerate
growth through effective marketing, innovative new
product development and enhanced digital and technology
capabilities. This is underpinned by continuous investment
to expand our manufacturing capacity and add new
capabilities. We are also investing to deliver our ESG
priorities based on the most material risks, opportunities
and impacts to the Group. In particular, this includes
decarbonisation and social factors within our supply
chains. We supplement organic growth with investment
in value-creating acquisitions that bring new opportunities
and capabilities. We make disposals when judged to be
the best route to creating shareholder value.
Our investment approach is grounded in conservative
financial management and we maintain a resilient balance
sheet. This ensures long-term financial stability and
creates the flexibility to fund opportunities as they arise.
Our disciplined approach to capital allocation, using risk-
adjusted hurdle rates, drives strong returns on capital.
Learn about our strategic performance
in our KPIs on pages 12 and 13
Dividends per share
(including special dividend)
90.0p
(2023: 60.0p)
Disciplined
capital allocation
to drive
strong returns
Conservative
financial management
and resilient
balance sheet
Strong
cash generation
enables continuous
reinvestment
Investing to
drive growth
and create
competitive
advantage
Building
and acquiring
long-duration
growth businesses
Learn about how we reward Executives
for strategic progress in the Remuneration
Report on pages 111 to 127
Learn about the strategic risks
we manage against on pages 78 to 86
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OUR STRATEGY AND BUSINESS MODEL CONTINUED
Understanding our business continued
Associated British Foods plc | 10 | Annual Report 2024
...which is realised through our business strategies...
Retail
Primark is a fast-growing, international value retailer with
a differentiated customer proposition delivered through
a digitally-enabled, store-led model. It has significant white
space to continuously expand its store footprint in existing
and new markets.
We win with customers through our strong brand, known for
unbeatable prices and great quality essential clothing and fashion.
We target a wide customer base across women’s, men’s and
kidswear and we are building strong positions in categories such
as home and beauty. We continuously evolve our ranges to meet
customer needs, including through collaborations and licensing
partnerships. The execution of our strategy in each market is adapted
to reflect the size of the white space opportunity, the maturity of the
store portfolio and local customer needs.
We aim to offer a unique store experience by finding the right spaces
in the right locations and creating exciting retail destinations. We also
use effective digital customer engagement as a key driver of footfall,
including our website, stock checker and increasingly Click & Collect,
and social media platforms.
We work to maintain an ethical and responsible supply chain, and we
focus on driving efficiencies and cost savings across our supply
chain, store portfolio and central operations. We target strong
financial returns and cash generation.
Grocery
Our strategy is to drive sustainable growth across our large and
diverse portfolio of both international brands and regionally-
focused businesses. We will continue to deliver growth
organically and through carefully selected acquisitions.
Our international brands, Twinings, Ovaltine, Patak’s, Blue Dragon,
Jordans and Mazzetti, have a long runway for growth. Our focus
is on reaching new consumers in existing markets, expanding into
new markets and broadening our offering through new product
development. We are investing in effective marketing and innovation
to drive category growth and build market share. We benefit from
our centralised manufacturing footprint for these brands.
In our regionally-focused businesses in the UK, North America,
Australia and New Zealand, our focus is on driving strong cash
generation over the long term. We adopt bespoke strategies to win
in local markets. This includes investing in marketing to maintain
brand health and support our strong local market positions.
Ingredients
Our strategy is to drive sustainable growth in Ingredients
within focused categories, including yeast, bakery ingredients,
enzymes, precision extraction, health and nutrition and
pharmaceutical delivery systems.
In our yeast and bakery ingredients business, AB Mauri, we are
growing our portfolio of products for industrial, craft and retail bakers
in our well-established regions of the Americas, Europe and Asia.
Our focus is on consistent delivery and innovation for new and existing
customers. This is underpinned by strong, insight-led investment in
the development of new technologies and ingredients that will meet
the changing needs of our customers in different local markets.
Our individual country businesses are dedicated to their local
markets, backed by global expertise in bakery products, technologies
and know-how. We are also expanding our portfolio of speciality
yeast products and technologies for other industries, including
alcoholic beverages.
In our specialty ingredients portfolio, ABFI, we are using science and
technology to create value-added, innovative speciality ingredients to
serve the food and beverage, health and nutrition and pharmaceutical
industries, as well as markets such as animal feed and certain
industrial segments. Our strategic focus is on niche categories where
we can have a differentiated proposition using platforms such as
enzymes and other industrial biotechnology, precision extraction and
synthetic chemistry. As well as building on these platforms, we are
broadening our geographical exposure to our focused markets.
We will continue to grow both through acquisitions and organically,
including geographical expansion, innovation and new applications.
Sugar
Our strategy is to drive sustainable long-term growth in Africa,
building on our strong market positions, while delivering good
returns in our European businesses over the cycle.
In our African markets, particularly Zambia, Malawi and Tanzania,
growth in sugar consumption is expected to be driven by both
population and economic growth. We have strong, attractive
consumer brands and continue to build effective routes to market.
We are investing to add production capacity in our growth markets,
such as Tanzania and Zambia. We also continue to improve our
operational effectiveness and strengthen our agricultural practices,
which will help to increase cane yields and reduce the impact from
severe weather conditions. Over time, we have opportunities to
expand our portfolio of co-products, such as potable alcohol and
electricity. We are investing to deliver our ESG priorities, which
include sustainable agricultural practices as well as social factors.
In Europe, our strategy is to deliver good profitability and cash
flow generation through the cycle. We do this through long-term
customer relationships, which are built on the high quality of our
products and the security of our supply. We also see opportunities
to grow our portfolio of co-products, drive continuous operational
efficiencies and to use data and technology to improve yields and
profitability for our growers. We continue to invest in the delivery
of our ESG priorities, in particular our decarbonisation programme.
Agriculture
Our strategy is to build value-added agri-food businesses on the
foundation of our experience in our commoditised feed business.
We will continue to grow organically and through acquisition.
We are expanding our portfolio of innovative, speciality feed
ingredients, including feed enzymes and additive products, which
we sell globally. We are also growing our integrated dairy business
in the UK, connecting data, services and products in new ways,
to provide insights to help our customers improve dairy farm
performance. We continue to strengthen our position as a market
leader in premix and compound animal feed in the UK and China.
Associated British Foods plc | 11 | Annual Report 2024
...and is delivered by our operating model.
We believe the best way to create enduring value involves
setting objectives from the bottom up rather than the top down.
We make operational decisions locally, because in our experience
decisions are most successful when made and owned
by the people with the best understanding of their
customers and markets.
We employ a devolved operating model across our Retail, Grocery,
Ingredients, Sugar and Agriculture businesses.
Objectives are set from
the bottom up to create
enduring value
Local teams make
operational decisions
for better customer and
market understanding
Local accountability
motivates management
and fosters innovative thinking
ESG agenda is shaped
by local leaders with
detailed knowledge and
customer insights
ESG factors are integrated
into strategy and implemented
by trusted employees
Corporate centre
shares ideas and
best practices
Continuous dialogue with
business leaders for risk and
opportunity overview
Small corporate centre
ensures clear and quick
decision making
Learn more online at
www.abf.co.uk
Our stakeholders
Employees
Suppliers
Customers/
consumers
Our value chain
Supply chains
Operations
Products
The Group, or corporate centre, provides a framework for the
sharing of ideas and best practice and is in constant dialogue
with the people who run our businesses, giving our corporate
leaders a comprehensive overview of their material opportunities
and risks, enabling collaboration.
Communities and
the environment
Shareholders
and institutional
investors
Governments
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We use key performance indicators (KPIs) to measure our progress in delivering the successful
implementation of our strategy and to monitor our performance.
Financial indicators
Group revenue
Adjusted operating profit*
Adjusted earnings per share*
(£bn)
'20
'21
'22
'23
'24
(£m)
'20
'21
'22
'23
'24
(pence)
'20
'21
'22
'23
'24
Revenue is a measure of business growth.
Constant currency comparisons are also used
to provide greater clarity of performance.
Adjusted profit and earnings measures
provide a consistent indicator of performance
year-on-year and are aligned with
management incentive targets.
The Group’s organic growth objective aims
to deliver steady growth in earnings over
the long term.
Gross investment*
Free cash flow*
Net cash before lease liabilities*
(£m)
'20
'21
'22
'23
'24
(£m)
'20
'21
'22
'23
'24
(£m)
'20
'21
'22
'23
'24
A measure of the commitment to the long-
term development of the business.
The free cash flow measure represents
the cash that the Group generates from its
operations after maintaining and investing
in its capital assets.
This measure monitors the Group’s
liquidity and capital structure and is used to
calculate the Group’s liquidity ratio.
Return on average capital
employed*
Financial leverage*
Dividends per share
(%)
'20
'21
'22
'23
'24
(times (x))
'20
'21
'22
'23
'24
(pence)
'20
'21
'22
'23
'24
This measure monitors the level of return
generated by the Group’s investment in
its operating assets. It is also a key part
of management incentive targets.
This measure monitors the Group’s financial
strength to ensure long-term financial stability.
The Group’s organic growth objective aims
to deliver steady growth in dividends over
the long term. This included the payment
of special dividends of 13.8p, 12.7p and 27.0p
in 2021, 2023 and 2024 respectively.
* APMs as defined on pages 206 to 210.
Each business develops KPIs relevant to its operations. These are monitored regularly. In the case of adjusted operating profit and return on average capital
employed, we use them as metrics to incentivise our management teams.
KEY PERFORMANCE INDICATORS
Tracking our progress
Associated British Foods plc | 12 | Annual Report 2024
13.9
13.9
17.0
19.8
20.1
1,024
1,011
1,435
1,513
1,998
81.1
80.1
131.1
141.8
196.9
641
721
930
1,171
1,281
875
419
(84)
269
1,355
1,558
1,901
1,488
895
1,044
9.5
9.8
14.0
13.6
18.1
1.1
0.7
0.8
1.0
0.7
13.8
12.7
27.0
Nil
26.7
43.7
33.1
42.3
Non-financial indicators
Lost time injuries and lost time
injury rate (%)*
Number of employees and number
of countries
Percentage of women in workforce
0.42%
0.38%
0.36%
0.35%
0.38%△
'20
'21
'22
'23
'24
53
53
53
55
56
'20
'21
'22
'23
'24
'20
'21
'22
'23
'24
A measure of the Group’s management
of the health and safety of its employees
– the number of on-site lost time injuries
resulting from an accident arising out of,
or in connection with, on-site work activities
and the proportion of the full-time equivalent
workforce experiencing a lost time injury.
Read more on page 58
Measure of the scale and diversity of our
operations. Reflecting all employees in
the Group with a contract of employment,
whether full-time, part-time, contractor
or seasonal worker and highlighting the
number of countries of operation.
Read more on page 59
The proportion of our employees that have
disclosed their gender as female/woman
in line with the local legislation.
Read more on page 60
ABF Scope 1 and 2 GHG emissions*
Primark Scope 1, 2 and 3
GHG emissions
Total energy consumed and
percentage from a renewable source*
(000 tonnes of CO2e)
'20
'21
'22
'23
'24
(000 tonnes of CO2e)
'20
'21
'22
'23
'24
(GWh)
56%
55%
55%
58%
57%△
'20
'21
'22
'23
'24
The amount of ABF Group Scope 1 and 2
(location-based) greenhouse gas emissions.
Read more on page 62 & 63
The amount of Primark’s Scope 1, 2 (location-
based) and 3 greenhouse gas emissions.
Read more on pages 62 & 63
Total energy used and the proportion of
which is from renewable sources. Renewable
energy is mainly generated on our sites from
biogenic sources.
Read more on page 62
Primark selling space and number
of countries of operation
Total waste generated and percentage
sent for recycling in own operations*
Total water abstracted in own
operations*
(000 sq ft)
'20
'21
'22
'23
'24
Selling space
Countries of operation
Waste (000 tonnes)
574
560
575
510
609
84%
79%
84%
83%
87%
'20
'21
'22
'23
'24
(million m3)
'20
'21
'22
'23
'24
These two measures represent
the retail space growth and breadth
of Primark’s presence.
Read more on page 18
A measure of the total waste generated in our
own operations and the proportion of waste
sent for recycling or other beneficial use
instead of being sent to landfill for disposal.
Read more on pages 64
This measure includes water supplied by third
parties or from local water resources.
Read more on page 64
The Group data in this report on our environmental and safety KPIs covered the period 1 August to 31 July, excluding Primark selling space and number
of countries of operation and employee numbers.
△EY has provided limited independent assurance over the 2024 metrics. See page 140 for EY’s assurance statement.
* Prior year numbers have been represented to reflect where ABF has financial control as described on page 55.
**The 2023 numbers are restated to correct an understatement in steam in the Scope 2 emissions numbers, impacting GHG emissions and energy consumed.
Associated British Foods plc | 13 | Annual Report 2024
403
346
353
347
392△
133,425
127,912
132,273
133,487
138,271△
3,313
3,004
2,970
2,834**
2,868
5,247
4,725
6,576
7,139
6,319△
53%
53%
54%
55%
57 %△
842
859
792
859
880△
22,329
21,524
20,603
21,129**
20,697△
16,247
13
16,842
14
17,302
14
18,198
16
18,759△
17△
Primark is a fast-growing, international
value retailer with a differentiated customer
proposition delivered through a digitally-
enabled, store-led model. It is one of
the largest and fastest-growing clothing
retailers in Europe, the market leader by
sales volume in the UK, and has a growing
presence in the US.
We have 451 stores at the end of 2024, with 18.8 million square
feet of selling space, across 17 countries and more than 82,000
colleagues. Our founder, Arthur Ryan, opened our first store in
1969 in Dublin city centre and this remains the home of our
global headquarters.
Primark’s strong brand is known for offering unbeatable prices
and great quality essential clothing and fashion. We target a wide
customer base across women’s, men’s and kidswear, as well as
beauty, homeware and accessories. Our licensed clothing ranges
are with some of the biggest names in entertainment and sport.
We offer a unique store experience by finding the right spaces,
in the right locations and creating exciting retail destinations.
Some of our stores offer additional services including beauty
studios, nail and brow salons, barbers, themed cafes and our
vintage clothing concession. We use our digital customer
experience to drive engagement and increase footfall in stores.
This includes our customer website, our stock-checker facility
and our social media platforms. We are expanding our Click
& Collect service across all of our stores in Great Britain to give
customers the convenience to order online before collecting
their purchase in store.
We are committed to high ethical trading standards and we
are working to make more sustainable fashion affordable for
everyone through our Primark Cares strategy. This is a multi-year
programme focused on giving clothing a longer life, reducing
emissions in our supply chain and supporting the livelihoods
of the people who make Primark’s clothes.
We maintain a continuous focus on driving efficiencies and
cost savings across our supply chain, store portfolio and
central operations.
Revenue
£9,448m
2023: £9,008m
Actual currency: up 5%
Constant currency: up 6%
Adjusted operating profit
£1,108m
2023: £735m
Actual currency: up 51%
Constant currency: up 51%
Adjusted operating profit margin
11.7%
2023: 8.2%
Operating profit
£1,100m
2023: £717m
Actual currency: up 53%
Return on average capital employed
18.7%
2023: 12.0%
Selling Space
18.8m sq ft
2023: 18.2m sq ft
Scope 1, 2 (location based) and
3 GHG emissions
6,319 (000 tonnes of CO2e)
2023: 7,139 (000 tonnes of CO2e)
Gross investment
£530m
2023: £547m
OPERATING REVIEW
Retail
About Retail
Associated British Foods plc | 14 | Annual Report 2024
Primark's sales grew 6% in the year. This reflects a strong
performance across our key growth markets, including the US,
France, Spain, Italy and Central and Eastern Europe ('CEE'), as
well as growth in our largest market, the UK. We continued to
benefit from the relevance of our great-value clothing and the
expansion of our product and category offering, including
through collaborations and licensing partnerships. We are also
successfully executing our store rollout programme across the
US and Europe, which is adding profitable new selling space.
This year's growth reflects investment in recent years to
enhance our unique store experience and to increase our use of
effective digital customer engagement.
Most of our key categories performed well this year as we
continued to deepen and broaden our product offering in
women’s, men’s and kidswear, while growing our presence in
categories such as home and accessories. We believe our
expanded product ranges are further differentiating our
proposition and increasing our appeal to existing and new
customers.
Growth in womenswear was led by performance and
leisurewear, knitwear and nightwear. Our collaboration ranges,
including Rita Ora and Paula Echevarría, contributed strongly to
growth and we benefitted from continued expansion of the Edit
collection, our more premium essentials range. Sales of our
seasonal summer clothing, as well as footwear, beachwear and
swimwear, were impacted by wet weather in the UK and Ireland
during H2. Menswear delivered good growth, with particularly
strong sales of leisurewear and good growth in shirts. We
benefitted from our expanded product range, including our
premium collaborations via our Kem collection and LA workwear
brand, The Stronghold. Licensed sportswear lines with the NBA,
NFL and Kappa also performed well. In kidswear, sales of our
licensed ranges, including partnerships with global brands such
as Disney, the NBA and gaming brands, performed very strongly.
Markdowns during the year were managed effectively and we
exited the year with good inventory levels.
In Spain and Portugal, which accounted for 17% of sales, our
sales grew strongly, up 6%. Sales grew 4% in H1 and 7% in H2.
Growth in Spain reflected the sales contribution from space
expansion and good execution. We continued to outperform the
market, which was relatively flat in the year. In Portugal, sales in
H1 were impacted by market challenges, followed by an
encouraging improvement in H2. During the year, we opened
five new stores in Spain. This included four stores in Madrid,
where we now have 12 stores in total.
In France and Italy, which accounted for 16% of sales, we had
some of the strongest growth, with sales growing 12% in the
year. Sales grew 18% in H1 and 8% in H2. Growth includes a
strong sales contribution from new stores and we continued to
gain share in both markets. In Italy, overall sales densities
continued to be particularly strong. We opened three new stores
in France and two new stores in Italy.
In our newer markets in Central and Eastern Europe, which
accounted for 3% of sales, our sales grew 42%. Sales grew
48% in H1 and 37% in H2. We opened three new stores in the
year, including our first store in Hungary, one store in Poland and
one store in Romania.
Creating employment: Primark’s
socioeconomic impact across Europe
Retail is the largest private sector
employer in Europe and Primark has
a big part to play.
Since 2006 we have expanded outside of Ireland and the
UK and further into Europe. We now have a presence in
16 markets across the geography, contributing significantly
to the economies and communities in which we operate.
We employ more than 78,000 retail colleagues across
these markets, offering opportunities in countries where
there are sometimes high unemployment rates. In 2024,
our 16 new store openings across the UK, Republic of
Ireland and mainland Europe have created almost 3,000
new roles and just under 250 managerial positions.
These jobs in turn contribute towards economic growth
and stability in each community. In addition, in six of our
key markets – the UK, Republic of Ireland, France, Italy,
Spain and Portugal – we have invested in excess of
£230m in new stores, extensions, relocations and refits.
We provide employment opportunities at all levels.
For many people we create pathways for a lifelong
career. Over the last financial year we have recruited
just under 9,000 colleagues aged between 16-18 and
for many of those it will be their first job. We are also an
attractive prospect for those who are returning to work
after a break from employment. When our Nantes store
opened in November 2023, 205 of the 238 hourly paid
colleagues recruited were returning to work.
As well as investing in new people, we deliver training
programmes for our existing colleagues to establish
future leaders in our business. We have internally promoted
more than 1,900 colleagues across Europe this year.
Our impact goes beyond direct employment and
investment. As we continue to grow, we will directly
and indirectly support thousands of jobs and help boost
economic prosperity across sectors from hospitality
and construction to warehousing and transportation.
Research carried out by Public First and published in
the UK this year showed that Primark contributes £2.6bn
to the UK economy and supports 54,000 jobs. Similarly,
in France another commissioned study found that
we create an average of 0.7 additional local jobs for
every job in store.
Operating review
Associated British Foods plc | 15 | Annual Report 2024
Primark colleagues
at our store in
Lanzarote, Spain
UK spotlight: Opportunities in our biggest market
2024 marked 50 years of Primark on the great British high street. The UK
is Primark’s biggest market, with 194 stores and over 30,000 retail colleagues,
and it continues to create significant opportunities for us.
While our business is growing internationally,
Primark in the UK remains well-established as a
retail anchor on the high street. This is evidenced
by our £100m investment in our UK store
estate this year.
Our stores are well-placed to meet shopping
demand through our high sales densities, wide
product ranges and broad mix of shopping
destinations nationwide. Shoppers continue
to prioritise value, enabling a highly profitable
market position.
Primark is directly responsible for driving footfall
to high streets and retail parks, in turn creating
a ripple effect of economic growth and consumer
spending for wider industries. Research carried
out by Public First and published in October 2024
showed that 2.3 million people each week cite
Primark as the main reason for visiting their
local high street.
Primark continues to respond to widespread
consumer demand, even in shopping locations
where we do not have an existing presence – we
receive hundreds of requests to open stores each
year. This financial year, we opened new stores
in Bury St Edmunds and Stockton-on-Tees, which
both delivered significant queues on opening day
and sales that surpassed expected retail targets.
The UK offers an ideal testbed for physical and
digital innovation before we roll out new concepts
globally, including investments to improve store
efficiency such as expanding our self-service
checkouts. As we continue to roll out Click &
Collect into all our stores in England, Scotland
and Wales this will further drive consumer footfall
and increase access to wider ranges, giving
people more reasons to visit us.
OPERATING REVIEW CONTINUED
Retail continued
Associated British Foods plc | 16 | Annual Report 2024
Opening day
queue at Primark’s
new store in Bury
St Edmunds,
6 March 2024
In the US, which accounted for 5% of sales, our sales grew
30%, reflecting continued good progress. Sales grew 38% in H1
and 24% in H2. We opened six new stores in the year, including
our second store in Florida and our first stores in Virginia, North
Carolina and Michigan. We also opened a new distribution centre
in Jacksonville, Florida, which will support our continued
expansion in southern states. Recently opened stores performed
well and are positively contributing to our overall sales density in
the US. Sales in the year were driven by both womenswear and
menswear, with licensed products performing particularly well.
Primark recently launched its first US marketing campaign in the
New York metro area as we focus on increasing brand
awareness with US customers. We continue to execute our
store rollout programme, with 14 leases for new stores now
signed1, including our first store in Manhattan, New York, which
will be our 11th store in New York state.
In the UK and Ireland, which accounted for 47% of sales, our
sales grew 2%. In the UK and Ireland, like-for-like sales grew
0.7%, reflecting 3.1% growth in H1 and a 1.6% decline in H2. In
both markets, challenging weather impacted footfall during H2,
particularly in April and June. However, we had a very
encouraging start to sales of our Autumn/Winter ranges, with
strong like-for-like growth in both markets in the last weeks of
the financial year. For 2024 as a whole, like-for-like sales in the
UK grew 1.0%, reflecting 3.6% growth in H1 and a 1.3% decline
in H2. Primark maintained its market share in the UK at 6.7%2.
During the year, we continued to expand and optimise our store
portfolio in the UK and Ireland. In total, we opened three new
stores. In the UK, we also extended two existing stores, right-
sized one store and relocated two stores. We are now offering a
Click & Collect service in 87 stores1 in the UK and expect this to
be available in all stores in England, Wales and Scotland by the
end of 2025.
In our Northern European markets, Germany, the Netherlands,
Belgium and Austria, which accounted for 13% of sales, our
sales grew 3%. In H1, sales grew 1% and in H2, sales grew 4%.
Like-for-like sales grew 6.1% in 2024, with 5.6% growth in H1
and 6.6% growth in H2. In Germany, we restructured our store
footprint with three store closures and three right-sizings in the
year. The restructuring contributed to strong like-for-like sales in
the remaining stores, with much-improved sales densities and
profitability, despite industry-wide strike action. Even with the
reduction in selling space, total sales grew in H2. We also
launched our first multi-media brand marketing campaign in the
country. During the year, we signed leases for two smaller-sized
stores in new locations in Germany. In the Netherlands, like-for-
like growth was also very strong, benefitting from our
commercial and operational actions, including the right-sizing of
four stores.
Overall, Primark's total like-for-like sales grew 1.2%. In H1, like-
for-like sales grew 2.1%, driven by the annualisation of last
year’s carefully-selected price increases. In H2, like-for-like sales
grew 0.5%, with a positive product mix benefit more than
offsetting the impact of soft volumes, mainly due to unfavourable
weather in the UK and Ireland. As expected in our fastest-growing
markets such as the US, Italy and France, like-for-like metrics are
impacted by the high number of store openings.
As at 14 September 2024, we were trading from 451 stores
across 17 markets, with 18.8m sq ft of selling space. During the
year, we opened a total of 22 new stores, closed three stores,
extended five stores, right-sized eight stores and relocated two
stores, which increased our retail selling space by 0.8m sq ft on
a gross basis and by 0.6m sq ft on a net basis. We also made
good progress with our store refurbishment programme,
completing refits in 23 stores comprising 0.8m sq ft of selling
space.
We continue to see significant white space opportunities in our
growth markets in Europe and in the US and we have a clear
roadmap for new store rollouts over the medium and long term
to drive sustainable growth. At the same time, we continue to
assess expansion opportunities in new markets. We recently
signed an agreement with the Alshaya Group to explore the
opportunity to open stores in the Gulf Cooperation Council
(‘GCC’) markets. We are targeting our store rollout programme
to contribute around 4% to 5% per annum to Primark's total
sales growth for the foreseeable future.
We are focused on a number of initiatives to drive digital
customer engagement, in particular in the UK where we have
made the most investment and progress. In 2024, traffic to our
websites increased in all markets and grew by 23% overall. The
number of visitors now using the stock checker facility in each
market is in the range of 15% to 25% and the total usage
increased by 35% in 2024. We believe that the increase in
website traffic is being driven by our investment in Search
Engine Optimisation ('SEO'), our CRM database and activity, and
our paid digital marketing. In particular, our CRM database now
has approximately three million customers. Overall, we believe
our increased digital engagement is contributing to higher footfall
in stores and overall sales growth.
Adjusted operating profit grew 51% to £1,108m. Adjusted
operating profit margin was 11.7%, up from 8.2% in 2023. This
margin recovery reflects an increase in gross margin, largely due
to lower material costs and reduced realised freight costs, as
well as the annualisation of prior year price increases. These
benefits were partially offset by labour cost inflation and an
increase in investment in digital and data capabilities, technology
and brand marketing to support long-term growth. We expect
this investment to continue over the medium term. We continue
to focus on driving cost optimisation and efficiencies, including
through the store operating model, the introduction of self-
service checkouts ('SCOs') and energy cost efficiencies.
This was another year of significant investment to support future
growth, captured within operating expense as noted above, and
in the £530m of gross investment in capital projects in 2024. As
well as opening new stores in Europe and the US, we made
progress with our store refurbishment programme, including the
rollout of SCOs and energy-efficient lighting upgrades. We are
supporting growth with investment in depots, including new
depots and several ongoing automation projects. We have
significantly increased our investment in technology, including
the capability build to support long-term growth. In 2024, return
on average capital employed increased from 12.0% to 18.7%.
This primarily reflects the increase in operating profit and a
normalisation in net working capital.
1. As at 31 October 2024.
2. Kantar, Primark market share of the total UK clothing, footwear and accessories market including online by value, 52-week data to 14 September 2024.
Associated British Foods plc | 17 | Annual Report 2024
New store openings in the year ended 14 September 2024:
France
Grenoble, Grand Place S.C.
Nantes, Beaulieu S.C.
Rouen, Saint-Sever S.C.
Republic of Ireland
Bray
Hungary
Budapest East, Arena Mall
Spain
Lorca, Parque Almenara S.C.
Madrid, Alcala de Henares
Madrid, Conde de Penalver
Madrid, La Vaguada
Madrid, Rivas H20
Italy
Livorno, Porto a Mare
Turin, To Dream
Poland
Lodz, Manufaktura S.C.
UK
Bury St. Edmunds
Teesside
Romania
Timisoara, Lulius Mall
US
Concord Mills, Charlotte, NC
Great Lakes Crossing, Detroit, MI
Smith Haven, Long Island, NY
The Florida Mall, Orlando, FL
Tysons Corner, Washington DC, VA
Woodfield Mall, Chicago, IL
Year ended
Year ended
14 September 2024
16 September 2023
# of stores
sq ft 000
# of stores
sq ft 000
UK
194
7,815
192
7,725
Spain
64
2,587
59
2,390
Germany
27
1,380
30
1,605
France
27
1,352
24
1,203
Republic of Ireland
38
1,184
37
1,165
US
27
1,084
21
873
Netherlands
20
943
20
1,016
Italy
17
820
15
747
Belgium
8
403
8
403
Portugal
10
401
10
383
Austria
5
242
5
242
Poland
6
233
5
197
Romania
3
107
2
75
Czechia
2
89
2
89
Slovenia
1
46
1
46
Slovakia
1
39
1
39
Hungary
1
34
–
–
451
18,759
432 18,198
OPERATING REVIEW CONTINUED
Retail continued
Associated British Foods plc | 18 | Annual Report 2024
ESG highlights
• Primark is committed to promoting human rights throughout
its supply chains. For over 15 years, its Ethical Trade and
Environmental Sustainability (ETES) programme has been the
cornerstone of this commitment. In 2024, Primark conducted
over 2,000 social audits, most of which were unannounced,
to monitor compliance with its Supplier Code of Conduct.
With a team of over 130 people across 10 key sourcing
markets, the ETES programme works across all aspects of
human rights and environmental due diligence, from strategy
and risk assessment to supporting suppliers and their factories
in implementing the Supplier Code of Conduct.
• The Science Based Target Initiative has approved Primark’s
near-term target to reduce absolute Scope 1 and 2
greenhouse gas (GHG) emissions and absolute Scope 3 GHG
emissions from purchased goods and services respectively
by 50% by 2030 from a 2018/19 baseline.
• Primark’s total Scope 3 GHG emissions, which represent the
biggest portion of its footprint, reduced by 12% in 2023/24
compared to 2022/23 and were 0.6% lower than the 2018/19
baseline. Primark is investing in its Environmental Sustainability
Team and in supplier factory efficiency programmes aimed
at supporting GHG emission reductions through targeted
training, upskilling, and energy-saving projects.
• Primark’s Scope 1 and 2 (market-based) emissions reduced
by 21% in 2023/24 compared to 2022/23 and were 52% lower
than the 2018/19 baseline. This reduction was achieved
through energy efficiency measures in its stores and the
procurement of renewable and low-carbon electricity.
Considering its planned geographical expansion, Primark
expects this reduction to fluctuate in the short-term.
• Primark has committed to 100% of the cotton in its clothing
being either organic, recycled or made from cotton from
its Primark Cotton Project by 2027. In 2024, 57% of its cotton
clothing units sold contained cotton that was organic or from
the Primark Cotton Project.
• Through its Primark Cotton Project, the business equips
smallholder farmers with essential knowledge and skills to
drive the adoption of more sustainable agriculture practices.
To date 309,394△ farmers have been trained through the
programme, across four countries and the majority of these
farmers are women.
• In July 2024, Primark published its Durability Framework, a set
of guidelines for durability testing that can be integrated into
its business operations and contributes to the development
of best practice as no industry standard currently exists.
Read more about ESG initiatives at Primark
on our website at www.abf.co.uk.
Clothes made to last at Primark
Primark is committed to giving clothes
a longer life by designing and making
clothes that are not only recyclable by
design, but also more durable. This means
creating clear guidelines for how clothes
are designed and made.
The newly introduced Primark Durability Framework
is the latest step in our journey. Inspired by the Waste and
Resources Action Programme’s (WRAP) Extending
Clothing Life Protocol, the framework builds on four years
of work. It sets out the durability requirements that all
eligible clothes must adhere to, including physical quality
tests and a set number of washes across four levels.
These levels range from five to 45 washes, categorised
as minimum, foundational, progressive and aspirational.
The framework, which has been embedded into both
our business and our supply chain, exists to give clear
guidance to our product teams and suppliers when
considering the material, design and development
of a clothing item.
Primark has now collected a full year’s durability data for
denim, socks and jersey. This will enable us to build a full
product performance baseline and truly understand how
each product category is performing on durability. 66%
of Primark’s clothing that was tested has passed the
aspirational level of 45 washes.
The framework is anchored in the principles of continuous
improvement which we use across our operations,
with the aim that durability is sewn into the lifecycle
of our clothing.
Primark’s ambition is to demonstrate to our customers
that there is no need for the industry to charge higher
prices for clothes made to last.
ESG at Primark
Associated British Foods plc | 19 | Annual Report 2024
Primark’s jersey
pyjamas, which have
been tested under the
Primark Durability
Framework
to drive footfall
in our stores
Investing in
digital retail
Rolling out Click & Collect
Our successful trial of Click & Collect – now rolling out across England, Scotland and Wales
– is showing how the service enables us to reach new customers. It offers greater product choice
and unlocks new opportunities while driving more people into stores.
Click & Collect gives our customers the opportunity to browse
and buy online before collecting their purchase in store on
their chosen date. Our trial launched in November 2022 in
25 stores, offering a selection of kidswear items. In July 2023
it expanded to another 32 stores, with womenswear added
in September 2023.
Every stage has been monitored and analysed. Our steady
approach has given us a detailed understanding of customer
behaviour and activity to provide confidence that the service
complements, rather than competes with, Primark stores.
Not only has it met and in many cases exceeded our targets on
basket size, additional spend in-store and the impact on in-store
sales, it has unlocked some new growth opportunities.
We estimate four out of 10 customers pick up another basket
while they are in-store and the value of that basket is significant
– in line with the first purchase. And more than a fifth of
customers have been back and used the service more than once
already. Almost half have told us they are visiting Primark more
often since using Click & Collect, highlighting the halo effect
it has on footfall.
Click & Collect is also enabling existing customers to make
purchases they would not have made previously, supporting
a busy customer who pops in while on a lunch break, or a
customer who makes a purchase after searching for a specific
trend online.
External data* tells us that around a third of spending has come
from people who had not shopped with Primark for at least
two years.
As the roll out continues we see potential beyond the trial
categories of womenswear and kidswear, with menswear and
selected home and lifestyle products now included as part of
the nationwide expansion. The ranges and products offered will
continue to be curated to complement the local store offering.
* Kantar Worldpanel, June 2024.
OPERATING REVIEW CONTINUED
Retail continued
Associated British Foods plc | 20 | Annual Report 2024
Packing orders at
our Primark Click
& Collect depot
at Magna Park, UK
Associated British Foods plc | 21 | Annual Report 2024
A Primark colleague
with a Click & Collect
customer at our store
in Leicester, UK
Grocery comprises brands which occupy
leading positions in markets across the globe.
International brand businesses
Twinings has been blending tea since it was founded in 1706
and its premium teas and infusions are now sold in more than
120 countries. Ovaltine malted beverages and snacks are
consumed throughout the day in countries across the globe.
Patak’s is the original spice blending expert and is recognised
around the world for creating authentic Indian food that is quick
and easy to prepare. Jordans produces delicious wholegrain
breakfast cereals. Blue Dragon offers authentic, simple and
convenient ingredients to create delicious dishes from China,
Thailand, Japan and Vietnam. Mazzetti is our leading brand
of Balsamic Vinegar of Modena.
US-focused businesses
We have some of the leading US, Mexican and Canadian
cooking and baking branded products. These include Mazola
and Capullo cooking oils and Fleischmann’s yeast. In addition,
Anthony’s Goods is a leading brand of organic and natural
ingredients and superfoods which are sold online in the US.
We also have a 50% ownership in Stratas Foods, the leading
US supplier of packaged oils, margarines, mayonnaise, sauces
and dressings for the food service, food ingredients and
retail markets.
UK-focused businesses
We have a broad set of food brands and businesses focused
on the UK market. Kingsmill produces a range of bakery
products for the whole family. Dorset Cereals’ award-winning
muesli and granolas are renowned for the quality of the
ingredients. Ryvita is the UK category leader in crispbreads.
Silver Spoon and Billington’s are our two retail sugar brands
in the UK. We are also a leading supplier to the Indian, Chinese
and Thai foodservice sectors with well-known brands, including
Lucky Boat noodles.
Australia and New Zealand-focused businesses
We are one of Australia and New Zealand’s largest food
manufacturers. Tip Top is one of the most recognised brands
in Australia with an extensive range of bread and baked goods.
The Artisanal Group is a leading manufacturer and wholesaler
of high-quality baked goods. Our Don business manufactures
a variety of bacon, ham and meat products. Yumi’s produces
hommus, vegetable dips and snacks and is the leader in the
Australian market.
For a full list of our businesses and brands visit
www.abf.co.uk/our-businesses/a-z-finder.
Revenue
£4,242m
2023: £4,198m
Actual currency: up 1%
Constant currency: up 4%
Adjusted operating profit
£511m
2023: £448m
Actual currency: up 14%
Constant currency: up 17%
Adjusted operating profit margin
12.1%
2023: 10.7%
Operating profit
£493m
2023: £402m
Actual currency: up 23%
Return on average capital employed
35.8%
2023: 30.0%
Packaging
142 kt
2023: 142 kt
Recycled waste
86.0%
2023: 82.3%
Gross investment
£226m
2023: £141m
OPERATING REVIEW CONTINUED
Grocery
About Grocery
Associated British Foods plc | 22 | Annual Report 2024
Grocery sales grew 4%, reflecting good demand across a
number of our leading international brands and regionally-
focused businesses, supported by increased investment in
effective marketing, strong commercial execution and
successful new product launches.
Adjusted operating profit margin for the Grocery segment
improved to 12.1%, driving significant growth in adjusted
operating profit, up 17% to £511m. The strong margin
improvement reflects an easing in input cost pressures, strong
performance in our US-focused businesses and much-reduced
losses in Allied Bakeries, partially offset by a significant increase
in marketing investment. Return on average capital employed
increased from 30.0% to 35.8%.
Our international brand businesses, which include Twinings,
Ovaltine, Blue Dragon, Patak’s, Jordans and Mazzetti, accounted
for approximately a third of total Grocery sales. Twinings had
strong sales momentum led by volume growth across its largest
markets, the UK, US and France. This reflects increased
distribution, particularly in the US, strong commercial execution
to strengthen in-store visibility and a significant increase in
investment and focus on effective marketing. Growth also
benefitted from recent product launches, as we continue to
expand our presence in the wellness category, including our
growing portfolio of herbal and infusion teas.
In Ovaltine, performance was mixed this year. We continued to
drive sales of ready-to-drink ('RTD') products in Thailand, in
response to the shift in consumer demand from powder
products, and we grew our market share in both categories.1 We
are leveraging our strong brand in that market to launch new
products, supported by increased marketing investment. In
China, sales were impacted by the weaker economy and in
Myanmar by the political situation. In Europe, we benefitted from
new product launches and we had good growth in Africa. We
also progressed with the construction of a production facility in
Nigeria, which will enable Ovaltine to serve markets across West
Africa. Sales of both Patak's and Blue Dragon were broadly flat
overall this year with a mixed performance across markets.
Jordans sales were impacted by reduced promotional activity in
H1 but had good growth in H2. Our balsamic vinegar business,
including the Mazzetti brand, had continued good volume
growth.
Within our regionally-focused portfolio, our US-focused
businesses accounted for approximately 15% of Grocery sales
and performed well. This reflects the strong performance of our
market-leading brands, including Mazola and Fleischmann’s,
supported by improved production capacity. As expected, strong
performance in consumer oils began to normalise towards the
end of the financial year. Stratas, our joint venture that supplies
oils to the foodservice, ingredients and retail markets, delivered
strong profit, albeit slightly below last year.
1. Nielsen, Ovaltine share by value of the malt-based and chocolate powder
beverages category and the mal-bases and chocolate UHT beverages
category respectively for the 12-month period ending 1 August 2024.
ACH: Listening to our consumers
This year we have invested in growing
and deepening our US-focused brands’
relationships with consumers.
The people who buy and use our products are our highest
priority. By listening to them and understanding their
preferences, we have evolved our brands to ensure they
remain consistently relevant to consumer needs.
Our Mazola cooking oil brand has continued to tailor
its consumer communications. For example, core
consumers of Mazola include US Latino consumers and
we have invested in Spanish language brand campaigns
as a result. Significant and impactful content in media
used by these communities has helped Mazola maintain
its strong brand awareness and preference. This year
we took further market share and outsold our closest
branded competitor in the US by more than 40%.
Meanwhile we have been tapping into the trend for
home-baking in the US. Since the Covid-19 pandemic,
many people have continued to enjoy baking from
scratch, helped by the rise of flexible working patterns
that enable them to spend more time at home.
We undertook quantitative and qualitative research into
the needs and motivations of these home bakers so we
could better understand them.
Based on what we found, our Fleischmann’s yeast brand
team developed a campaign that promoted the benefits
of yeast baking, encouraged more people to use it at
home and positioned Fleischmann’s as the brand of
choice for bakers. Thanks to this work we have seen the
number of households purchasing Fleischmann’s grow
by 7% in the last year as well as increasing the amount
purchased per shopper by more than 3%.
Operating review
Associated British Foods plc | 23 | Annual Report 2024
An image from
Mazola's Spanish
language campaign
in the United States
Our UK-focused businesses, which accounted for approximately
a quarter of Grocery sales, generally performed well. Allied
Bakeries had a much-reduced operating loss compared to 2023
as a result of improved sales and operational performance. Silver
Spoon delivered strong growth, benefitting from better pricing
and a brand refresh. Ryvita made good progress, supported by
recent product launches and advertising. We are investing in
manufacturing capacity for our Scrocchiarella bakery products in
Bradford, UK, to support future growth.
Our Australia and New Zealand-focused businesses, which
accounted for approximately a quarter of Grocery sales, remained
resilient in a challenging consumer environment. Our Tip Top
bakery business grew well despite consumers trading down due
to cost of living pressures. Sales growth in our Don meat
business reflected pricing and new product launches, however
profitability was impacted by higher input costs. Yumi’s, which
produces dips and vegetarian snacks, delivered good growth in
sales and profitability. During the year, we made further progress
with the evolution of our product portfolio, completing the
acquisition of The Artisanal Group, a leading manufacturer and
wholesaler of high-quality baked goods in Australia, primarily
serving cafes, restaurants and hotels. Our investment in long-
term capital projects in Australia continued, including the
expansion of the Canning Vale bakery in Western Australia to
secure Tip Top’s position as the leading supplier in that state, as
well as investing in capacity expansion in Springwood,
Queensland, to support Tip Top's foodservice growth.
Within the Grocery segment there are an extensive number
of social and environmental programmes relevant to their
businesses. To find out more about the progress being made
across these businesses please see our website for further
information.
Read more about ESG initiatives of our Grocery
businesses on our website at www.abf.co.uk.
OPERATING REVIEW CONTINUED
Grocery continued
ESG at Grocery
Associated British Foods plc | 24 | Annual Report 2024
A rice farmer growing
Hom Mali rice for Westmill
using the Sustainable Rice
Platform standard, Ubon
Ratchathani, Thailand
Investing in new baking capacity at Tip Top
Australia and New Zealand are developed economies with growing
populations. Our highly differentiated Tip Top baking business is well-placed
to capitalise as the market expands.
Tip Top operates in the retail and foodservice
channels and is one of the most known and
trusted brands in Australia and New Zealand.
Its product offering is a market leader in
packaged bread, including gluten-free, and
spanning buns, rolls and bakery snacks.
This year we began a multi-million dollar upgrade
and expansion of our Canning Vale, Western
Australia bakery, where we produce a significant
proportion of the Western Australian market’s
needs. The population in the state is growing
quickly and the existing site is currently at
maximum capacity. We will install a new bread
line with a production capacity of 8,350 loaves
per hour. Overall, the upgrade will increase
capacity from 44 million to 56 million loaves per
year as well as raising service levels for customers
and providing additional amenities on-site.
* SME analysis.
Tip Top also has a large business supplying quick-
service restaurant (‘QSR’) customers. In this
foodservice channel, where Tip Top is a major
supplier of buns, the market is growing strongly
and experiencing premiumisation as major QSR
customers look to differentiate their offers.
This trajectory is likely to continue: the total food
service market is forecast to grow at 3.5%*
for the next decade and beyond.
We are investing in our foodservice
manufacturing network to keep up with demand
and position ourselves for future growth. At our
Springwood site in Brisbane, Queensland, we
have just completed a significant upgrade to our
bun and roll line to almost double our capacity
from 90 million to 168 million buns per year.
Associated British Foods plc | 25 | Annual Report 2024
Tip Top’s expanding
bakery at Canning Vale,
Western Australia
to grow our
international brands
Investing in
marketing
Improving our marketing model
to drive growth
Several of our brands made further progress this year thanks to a step-up in marketing
investment. We have taken a careful approach to developing and delivering our marketing
campaigns, resulting in greater brand awareness and market penetration.
The best example of this is at Twinings, now enjoyed in more
than 120 countries and where we see further scope to grow our
consumer base. We have invested significantly in advertising to
build our brand and achieve our growth ambitions in key markets
including the US, Canada, UK, France and Australia. Consumer-
centricity is important to us, from product development through
to advertising, so we have taken a thoughtful approach to ensure
our messaging engages and resonates with consumers to
achieve maximum impact.
This approach involves initial qualitative testing of our messages,
followed by small trials of the advertising campaigns where
we can gauge their effectiveness using data. Only then do we
go live on a regional basis in our markets while continuing to
monitor the response via leading independent research companies
to confirm that we are getting a strong return on our investment.
In the US, for example, we began in New Jersey and Connecticut
before rolling out across the rest of the East Coast once we had
seen proven results from that first trial.
* Numerator Panel Insights, Top 10 Tea Category Brands, 52 weeks
ending 26 May 2024.
Our US advert was adapted from an earlier French version,
taking the most successful elements from the campaign in
France and capitalising on the two markets’ similar consumer
objectives and brand positioning. This meant our US campaign
development costs were much lower and we were able to
invest more in the placement of the adverts in target media.
Our approach is working well. The latest Twinings advert was
in the top 1% of adverts tested by Kantar, the market insight
company, which assesses adverts for short-term sales uplift
and long-term brand impact. It reached 85% of our intended
audience in the US. We are growing household penetration in
both black and herbal teas and we are the top selling tea brand
on Amazon. Looking at the top 10 tea brands in the US at a total
market level, Twinings has had the greatest increase in ‘repeat
rate purchasing’ in the past year – which is the key measure
of consumer loyalty to a brand.*
OPERATING REVIEW CONTINUED
Grocery continued
Associated British Foods plc | 26 | Annual Report 2024
An image from a US
TV advert, profiling
the 50+ delicious
varieties of Twinings
teas and infusions
available in North
America
Associated British Foods plc | 27 | Annual Report 2024
A US social media
post of two people
enjoying Twinings,
America’s #1 English
Breakfast tea
Ingredients businesses comprises yeast
and bakery ingredients, as well as a portfolio
of specialty ingredients focused on enzymes,
precision extraction, health and nutrition
and pharmaceutical delivery systems.
Yeast and bakery ingredients
We have a global yeast and bakery ingredients business, AB
Mauri, with well-established market positions in the Americas,
Europe and Asia. We sell our products to customers in over 100
countries, operating from 52 plants across 32 countries and we
have over 5,300 employees.
We work with industrial and craft bakers to develop leading
yeast solutions and bakery ingredients that are right for the
needs of their local markets. We are a technology leader in
bakery ingredients, supplying a range of products including bread
improvers, dough conditioners and bakery mixes and
concentrates for bread, cake and dough products. In addition to
bakers’ yeast, we supply speciality yeast products and
associated technologies to the alcoholic beverage and bioethanol
markets.
Mauri ANZ
Mauri ANZ is an ingredient company with production and milling
capacity in Australia and New Zealand. Our product portfolio
includes a range of flour products, yeast and bakery ingredients,
as well as animal feed mixes.
New Food Coatings
We have a 50% ownership in New Food Coatings, one of the
leading suppliers of customised breaders, batters, seasonings,
sauces and functional ingredients to the food manufacturing
and food service markets across Australia, New Zealand and
south east Asia.
Specialty ingredients
We have a portfolio of specialty ingredients businesses,
ABFI, that use science and technology to create value-added,
innovative ingredients to serve the food and beverage, health
and nutrition and pharmaceutical industries, as well as markets
such as animal feed and certain industrial segments. We use
platforms such as enzymes and other industrial biotechnology,
precision extraction and synthetic chemistry.
We have almost 1,400 employees and serve customers in
more than 50 countries from manufacturing and R&D facilities
in 15 countries across Europe, the Americas and Asia Pacific.
In food and beverage, we develop ingredients and solutions that
support product innovation. In health and nutrition, we develop
ingredients that provide a health benefit in dietary supplements
and functional food. In the pharmaceutical market, we produce
antacids, excipients, adjuvants and delivery systems that enter
the formulation of drugs.
ABFI is comprised of AB Enzymes, Ohly, ABFI Health &
Nutrition, ABITEC Corp, SPI Pharma and PGP International.
Revenue
£2,134m
2023: £2,157m
Actual currency: down 1%
Constant currency: up 2%
Adjusted operating profit
£233m
2023: £214m
Actual currency: up 9%
Constant currency: up 12%
Adjusted operating profit margin
10.9%
2023: 9.9%
Operating profit
£219m
2023: £201m
Actual currency: up 9%
Return on average capital employed
16.9%
2023: 16.1%
Water abstracted
16 million m3
2023: 17 million m3
Scope 1 & 2 GHG emissions
258 kt
2023: 291 kt
Gross investment
£238m
2023: £179m
OPERATING REVIEW CONTINUED
Ingredients
About Ingredients
Associated British Foods plc | 28 | Annual Report 2024
Ingredients sales grew 2% driven by a strong performance in our
yeast and bakery ingredients business, AB Mauri. As expected,
sales in our portfolio of speciality ingredients businesses, ABFI,
were impacted by customer destocking in H1, with performance
then improving in H2. Adjusted operating profit increased by
12% led by yeast and bakery ingredients.
Sales in yeast and bakery ingredients grew strongly across most
of our regions. This reflects both the annualisation of prior year
price increases, predominantly in H1, and good volume growth
supported by innovation in bakery ingredients, particularly in H2.
We had strong growth in North America, Brazil, Mexico, south
Asia and south east Asia. Our business in Argentina was
impacted by challenging economic conditions and currency
devaluation.
We continue to grow our presence and capabilities in Ingredients
through strategic acquisitions. We completed the acquisition of
Omega Yeast Labs LLC, a leading provider of liquid yeast to the
craft brewing industry in the US, complementing our existing
portfolio of speciality yeast products. We also completed the
acquisition of Mapo, an Italian manufacturer of premium frozen
baked goods, underpinning the growth potential for our
Scrocchiarella bakery products, and the acquisition of Romix, a
specialist blender of baking ingredients based in the UK.
During the year, our recently built speciality yeast plant in Hull,
UK, came online, expanding our capacity and capability in yeast.
We also continued with the construction of our new fresh yeast
plant in Northern India, where there is considerable market
demand for baker's yeast.
Our ingredients business in Australia and New Zealand, Mauri
ANZ, performed well and benefitted from increased production
in our new animal feed mill in Hope Valley, Western Australia,
after closing an older facility. New Food Coatings, our joint
venture ('JV') in Australia, New Zealand and south east Asia,
specialising in seasonings, sauces and ingredients, delivered
good growth. The JV is investing in a new facility in Bangkok,
Thailand, to add capacity.
Sales in our portfolio of speciality ingredients businesses,
focused on enzymes, precision extraction, health and nutrition
and pharmaceutical delivery systems, were impacted by
customer destocking in H1 before delivering a more encouraging
performance in H2. In particular, our enzymes and health and
nutrition businesses delivered good growth. We delivered an
improvement in the adjusted operating margin of our speciality
portfolio, benefitting from improved input costs, while
significantly increasing investment in R&D and commercial
capabilities to support long-term growth.
Investment continued across a number of strategic capital
projects in speciality ingredients. This included our yeast extracts
business, Ohly, where we are adding capacity in fermentation
and spray drying at our site in Hamburg, Germany. At AB
Enzymes, we are constructing a new high-care enzyme powder
packing line in Rajamäki, Finland.
Operating review
Associated British Foods plc | 29 | Annual Report 2024
AB Mauri colleagues
inspect tortillas at our
Global Technology
Centre in Etten-Leur,
the Netherlands
Using digital R&D to deliver efficiencies at AB Enzymes
Biotechnology research is advancing rapidly and driving the innovation that
is crucial for product development at AB Enzymes, where we develop and
market enzyme solutions for customers in the bake, food, technical and feed
markets. Our work involves screening for new or improved enzymes and
creating microbial strains to produce them before testing in different applications.
This year we initiated our ‘DigiReDI’ programme
aimed at further digitalising and automating our
research and development (‘R&D’) processes in
combination with the development of algorithms
and the introduction of AI. This work will help to
make our product development faster, more
efficient and more sophisticated.
Our investment will connect all our lab equipment
to our bespoke digital R&D processes, enabling
more automated data processing and analysis.
This eliminates a significant amount of manual
data handling, with early trials seeing the time
needed to compile the sample data and complete
the analyses cut from hours to seconds.
Digitalisation will also support our enzyme
screening methods by more effectively enabling
the processing of ever-increasing volumes of
data. Furthermore, new digital processes can pull
data together into useful formats, for example
detailed reports required by external regulators
responsible for approving new enzyme products.
As a result, our researchers are freer to focus
more on the product development itself, the
interpretation of results and the fine tuning of
experiments to produce successful outcomes,
as well as being able to run more product
projects in parallel.
Looking ahead, DigiReDI will create the digital
infrastructure to enable us to integrate new
software and technologies as they evolve into
our further digitised R&D so that we can maintain
pace with new scientific advances. We believe
this digital infrastructure will significantly improve
our product development capabilities in the
years to come.
OPERATING REVIEW CONTINUED
Ingredients continued
Associated British Foods plc | 30 | Annual Report 2024
An AB Enzymes
R&D colleague
at our lab in
Rajamäki, Finland
ESG highlights
• AB Mauri is focused on using water efficiently and returning
it safely to the environment after use. Many of its production
facilities have complex on-site effluent treatment plants that
include biological processes, evaporators and reverse osmosis
membrane systems that can produce reusable water and
useful co-products. Since 2010, it has invested $120m
in waste water treatment and 2023/24 was another year
of progress on this agenda, with the construction of a new
biogas co-generation plant in Brazil.
• AB Mauri reduced its Scope 1 and 2 (location-based) GHG
emissions by 13% against last year, driven by energy
efficiency initiatives, including advanced fermentation aeration,
high-efficiency natural gas boilers, and heat recovery
technologies. Biogenic carbon emissions from yeast
fermentation were also reduced by 4%.
• AB Enzymes, the ABFI industrial biotech business, has
continued developing innovative enzyme products for various
industries, that enable GHG emissions reductions without
compromising product performance. This is a key part of its
customer offering and continues to be a central focus for
investment and innovation.
• 75% of our Ingredients businesses’ waste was recycled,
recovered, reused, or sent for another beneficial use in
2023/24. Initiatives this year included transforming waste into
animal feed or into fertiliser and recycling of paper and plastics.
Read more about ESG initiatives of our Ingredients
businesses on our website at www.abf.co.uk.
Investing in water stewardship
at AB Mauri
Good water stewardship is essential for
our yeast and bakery ingredients business.
Water is the medium in which we grow yeast and it is also
used for cooling and cleaning equipment in our factories.
Our water stewardship strategy focuses on a ‘Four R’
approach: Return, Reduce, Reuse, and Recycle. Water
that we return to the environment must be treated to
standards that meet or exceed regulations in the countries
where we operate. In some cases, water treatment also
results in valuable by-products which can be used to
produce fertiliser, animal feed or a source of energy.
Our sites predict future water treatment legal
requirements so that upgrades can be future-proofed.
Guided by this strategy, we have invested more than
$120m in water treatment since 2010. A recent example
of this investment is a new waste water treatment
installation paired with a biogas co-generation plant at our
site in Pederneiras, Brazil, which will both improve water
quality and produce electrical and thermal energy from
steam and hot water. The installation utilises digesters:
a process that uses anaerobic digestion in the treatment
of waste water to produce biogas. It can also then treat
this biogas so it can be used as a fuel source and
transformed into energy via a co-generation plant.
Following our investment and strategic approach to water
stewardship, we have seen a steady year-on-year
increase in the proportion of water used that is treated
and returned safely to the environment, up from 74%
in 2018/19 to 84% in 2023/24. We are approaching the
theoretical maximum of this water return KPI due to the
water which leaves the site in our products or through
production process evaporation. We are now moving
to the next water circularity phase focused on Reduce,
Reuse and Recycling of water into our facilities, and
measuring our performance through an evolution of our
KPI metrics.
ESG at Ingredients
Associated British Foods plc | 31 | Annual Report 2024
The waste water
anaerobic digestion
facility at AB Mauri’s
yeast plant in
Pederneiras, Brazil
to enhance
our portfolio
Investing in
new capabilities
Brewing a bright future: Yeast's role in
craft beer and biotechnological evolution
In August 2024, AB Mauri North America acquired Omega Yeast, a leader in the craft brewing
liquid yeast market, to further strengthen and accelerate its speciality yeast business.
We believe there is a good opportunity to expand and enhance
the offerings of AB Biotek (an AB Mauri business division)
in the beer and wider alcohol beverage market globally.
The origins of AB Biotek’s yeast and associated fermentation
technologies for beer can be found within the traditions of
whisky production in Scotland and Ireland and leading wine
producers worldwide. For many decades our products have
been preferred by world-leading artisans to produce some
of the most iconic whisky brands and award-winning wines.
The craft beer segment has experienced significant growth,
driven by consumer demand for diverse and consistent high-
quality beers. A critical component in this industry is brewing
yeast, which plays a vital role in fermentation and flavour
profile development.
In the early days of craft brewing, brewers relied on traditional
yeast strains, often sourced from larger breweries or home-
brewing communities. However, advances in biotechnology
and yeast management have revolutionised the industry.
AB Biotek’s fermentation and yeast technology experts have
meticulously developed a specialist portfolio of yeast solutions
for craft brewers. The strategic acquisition of Omega Yeast
significantly enhances our existing brewer’s yeast portfolio
and brands. It introduces cutting-edge strains and innovative
bioengineering capabilities, further strengthening the quality
and diversity of our craft brewing solutions.
Omega Yeast is a leading producer of liquid yeast for the
craft brewing industry in North America, operating from a state-
of-the-art facility in Chicago, Illinois. The business is renowned
for its innovative capabilities, catering to a wide range of brewing
styles from traditional lagers and ales to West Coast IPAs
and hard seltzers.
Omega Yeast offers a diverse range of yeast strains tailored
to enable craft brewers to differentiate their products, including
traditional styles and innovative advanced solutions such as
the NEXT™ Series, featuring bioengineered strains for novel
flavours, and the PLUS™ Series, which offers familiar strains
with enhanced performance.
These strain evolutions allow brewers to explore new and
unique flavour profiles, pushing the boundaries of traditional
brewing techniques. Advanced propagation methods ensure
consistent quality and performance, improving fermentation
reliability. By continuously advancing our yeast technology,
we can assist brewers globally to experiment with new
brewing methods and styles, keeping the craft beer market
dynamic and exciting.
OPERATING REVIEW CONTINUED
Ingredients continued
Associated British Foods plc | 32 | Annual Report 2024
The Omega
Yeast Labs
production facility
in Chicago,
United States
Associated British Foods plc | 33 | Annual Report 2024
Craft beer being enjoyed
at Rockwell Beer Company,
an Omega Yeast customer,
in St. Louis, United States
ABF Sugar produces a range of sugar, fuels
and other products from sugar cane, sugar
beet and wheat in Africa, the UK and Spain.
Across this group of businesses we employ 29,000 people and
operate 19 plants in eight countries, with the capacity to produce
approximately 4.5 million tonnes of sugar annually. We farm
more than 330,000 hectares across our markets, between
ourselves and over 25,000 growers.
In Africa, we have sugar cane operations in Eswatini, Malawi,
South Africa, Tanzania and Zambia, and packing operations in
Rwanda. We have market-leading consumer brands in these
countries, with Bwana Sukari in Tanzania, White Spoon in
Zambia and Illovo in multiple markets. In certain markets we
also produce co-products such as potable alcohol, furfural and
electricity for local grids.
In the UK, British Sugar is the sole processor of the sugar
beet crop and in Spain, Azucarera is the largest sugar producer.
Our strong domestic brands include Silver Spoon in the UK and
the Azucarera brand in Spain. In the UK, we produce a range of
co-products including energy, animal feed, bioethanol, betaine
and CO2. We operate one of the largest wheat bioethanol
production facilities in the UK, Vivergo.
We also have a 42.5% ownership in Czarnikow Group Limited
(CZ), a global supply chain management and advisory company
specialising in the food and beverage sector.
Revenue
£2,529m
2023: £2,474m
Actual currency: up 2%
Constant currency: up 11%
Adjusted operating profit
£199m
2023: £179m
Actual currency: up 11%
Constant currency: up 46%
Adjusted operating profit margin
7.9%
2023: 7.2%
Operating profit
£181m
2023: £119m
Actual currency: up 52%
Return on average capital employed
10.9%
2023: 9.7%
Scope 1 & 2 GHG emissions
2,072 kt
2023: 1,973 kt
Water abstracted
859 million m3
2023: 838 million m3
Gross investment
£252m
2023: £205m
OPERATING REVIEW CONTINUED
Sugar
About Sugar
Associated British Foods plc | 34 | Annual Report 2024
Sugar segment sales and profitability were strongly ahead of the
prior year.
Our European sugar businesses in the UK and Spain, which
accounted for approximately half of total Sugar sales, grew
strongly in 2024 due in large part to higher sugar prices. In the
UK in H1, the benefit from higher prices was more than offset by
the fact that low stock levels were carried over from the 2022/23
campaign, whereas H2 benefitted from increased production as
a result of the return to a more typical sugar beet crop in the
2023/24 campaign. In Spain, sales also benefitted from increased
acreage. Beet prices were high in both the UK and Spain for the
2023/24 campaign. As previously announced, sharper than
expected falls in UK and European sugar pricing, due to
increased supply in the market, negatively impacted sales and
profitability in Q4 2024. Consequently, adjusted operating profit
for the European sugar businesses for the full year in 2024 was
lower than expected.
Our overall African sugar business, which accounted for
approximately 40% of total Sugar sales, grew well in 2024 on a
constant currency basis. Growth in Zambia and South Africa was
particularly strong, where we benefitted from both strong cane
yields and good factory performances. Malawi was resilient and
Eswatini delivered a good performance. Across our African
businesses, commercial execution was strong and we made
further progress across a range of projects to drive continuous
improvement in both our manufacturing and agricultural
performance. On an actual currency basis, our African sales
declined due to the impact of foreign exchange translation,
primarily due to currency devaluations in Zambia and Malawi.
We continued to invest in a number of capital projects. The
largest is the new sugar mill we are building to expand our
capacity in Tanzania, a key growth market, which we expect to
complete in 2025. We are also investing in technology
infrastructure for our African businesses.
Improving factory performance
and decarbonising at British Sugar
At British Sugar we are using our
engineering expertise to make our factories
more efficient in ways that will significantly
reduce our energy consumption and
greenhouse gas emissions. Our work has
contributed materially to the reduction in
ABF’s overall Scope 1 and 2 emissions
since 2017/18.
At our Wissington factory in Norfolk, we have designed
and invested in a major energy reduction project with the
installation of additional evaporators, heat exchangers and
processing equipment to significantly reduce the steam
required in sugar manufacturing. The project has
delivered a step-change reduction in site energy usage,
with emissions lowered by 30,000 tonnes of carbon this
year and demand for process steam reduced by 25%.
Our engineers are replicating the design principles at our
three other UK processing sites to deliver similar results,
with ground broken this year for the construction of
similar plant and equipment at Bury St Edmunds. When
complete, the site’s carbon emissions will be cut by
around 20,000 tonnes per year.
Alongside these projects, we have switched the fuel
source for our animal feed dryers at Bury and Newark to
natural gas, reducing carbon emissions by 20,000 tonnes
this year. We are also installing a modular gas-fired
combined heat and power plant at our Cantley site, which
is scheduled to be operational in 2025 and will reduce
carbon emissions by around 16,000 tonnes per year.
This technology sets us up for fuel flexibility as the plant
can be fuelled by hydrogen too.
This work is enabled by the expertise of our in-house
teams, who have carried out detailed process mapping
across our operations to identify efficiencies. In total, our
investments since 2017/18 have delivered a Scope 1
reduction of 21.2% for British Sugar against our baseline
year of 2017/18. As technology develops, we will
continue to consider all options to further drive
decarbonisation across our sites and supply chain.
Operating review
Associated British Foods plc | 35 | Annual Report 2024
A British Sugar
engineer inspecting
an evaporator at
our factory in
Wissington, UK
During 2024, we closed our sugar business in the north of China
and agreed to the sale of its assets. Our sugar operations in
Mozambique were impacted by severe flooding in 2023. In 2024,
the operations were mothballed and we recognised an additional
impairment charge of £6m.
The operational performance of Vivergo, our bioethanol plant in
the UK, strengthened this year and it had a substantially reduced
operating loss. However, trading margins achieved during the
year continued to be variable as a result of volatility in bioethanol
prices. As such, we recognised an asset impairment of £18m in
2024.
As previously announced in our trading update on 5 September
2024, we expect the sharp fall in European sugar prices in Q4
2024 to impact performance in our Sugar segment significantly
in 2025, with adjusted operating profit expected to be in the
range of £50m to £75m. We expect profitability to recover in
2026 to be more in line with 2024, as a result of lower beet
prices that have been contracted and a rebalancing of supply and
demand in the market.
ESG highlights
• In January 2024, ABF Sugar set near-term and net-zero Scope
1 and 2 and Scope 3 GHG emissions reduction targets
validated by the Science Based Targets initiative. Further
details can be found on our website.
• ABF Sugar’s Scope 1 and 2 emissions increased by 5%
compared to last year, due to several factors which included
the extended campaign as a result of wet weather. However,
it has reduced its Scope 1 and 2 emissions by 18% against its
2018 baseline. British Sugar, the largest contributor to these
categories, increased its Scope 1 and 2 emissions by 19%
compared to last year due to short-term operational challenges.
However, it has reduced by 21% against the baseline year.
At its Wissington site, the installation of additional evaporators,
heat exchangers, and other equipment has significantly
lowered steam usage, reducing emissions by 30 kt of CO2e
annually and reducing process steam demand by 25%.
• ABF Sugar improved water-use efficiency in 2024 by reducing
water abstraction per tonne of product by 0.3%. Moreover,
25% of abstracted water was reused during production before
being returned to the environment.
• In 2024, 86% of ABF Sugar’s total waste was recycled or
used in another capacity. ABF Sugar's African operations used
bagasse, the fibrous by-product of sugar cane crushing, to
generate up to 87% of their factories' annual power needs.
• Our sugar businesses in Africa provide accommodation for
more than 60,000 employees and their families who work on
sugar estates in rural and remote areas. Throughout the year,
these businesses conducted a review of housing and living
conditions and have developed comprehensive plans to
continuously invest and update their accommodation
infrastructure.
Read more about ESG initiatives at ABF Sugar
on our website at www.abf.co.uk.
OPERATING REVIEW CONTINUED
Sugar continued
ESG at Sugar
Associated British Foods plc | 36 | Annual Report 2024
A drone being used for
targeted crop spraying
on the Ubombo sugar
estate in Eswatini
Water irrigation projects creating improved yields and further resilience
in Zambia and Eswatini
Growing high-yielding and resilient sugar cane is a major focus for our sugar
businesses in Africa and efficient use of water is essential to achieving this goal.
We are investing in more precise irrigation systems that maximise efficiency
and help sustain the agricultural systems on which our businesses rely.
Specifically, we are currently focused on more
efficient irrigation systems at our Nakambala
estate and Nanga Farms in Zambia. At
Nakambala, we are replacing traditional furrow
irrigation with sub-surface drip irrigation and
‘synergistic surface irrigation and drainage’,
a new system that will improve crop yield and
soil health. We are actively considering further
investments in these systems at Nanga Farms.
Together with the use of precision agriculture
technologies, we can concentrate more on areas
of the field where the crop experiences weather
stress and adapt our field layouts so that every
stick of cane receives the precise amount
of water it needs.
The projects are driving better yields while
improving water use efficiency and providing
greater weather resilience. Over the seven-year
period of implementation, the investment at the
two estates is approximately $20m.
Our focus on water also benefits the
communities in which we operate. In Eswatini,
we are making significant strides towards
reducing local poverty by partnering with the
Eswatini Water and Agricultural Development
Enterprise, a government agency, to support
the Lower Usuthu Smallholder Irrigation Project
which is developing 11,500 hectares of
smallholder irrigation.
Some 2,300 households are expected to benefit
directly from the project which is also
establishing 28 farmer companies to cultivate
cane and other crops, providing greater food
security and nutrition for local communities.
Our Ubombo Sugar business has invested
significantly to optimise factory capacity to enable
the processing of the additional cane that will be
produced as a result.
Associated British Foods plc | 37 | Annual Report 2024
A sugar cane irrigation
system at the Ubombo
estate in Eswatini
to grow our
presence in Africa
Investing in
capacity
Building a new sugar factory to drive
growth in Tanzania
The potential for growth in Tanzania’s sugar market presents a substantial opportunity for
Kilombero Sugar with its strong local brand and our investment in new production capacity.
Tanzania’s population is growing by an average of 2.6% per year
and there has been an annual increase in sugar consumption
in the last decade as a result. There is also a deficit in supply to
the local market. In 2021 we decided accordingly to build a new
sugar factory, known as ‘K4’, which will dramatically increase
Kilombero’s annual production capacity from 145,000 to 270,000
tonnes and should take our share of the Tanzanian consumer
sugar market to approximately 40%. The factory will be
commissioned in June 2025 and will create 2,000 direct jobs
in the cane-to-sugar value chain.
Our significant investment in K4 will enable us to reduce costs
per tonne of sugar we produce. The factory will have the latest
equipment and be highly automated, with the capability to
produce different pack sizes according to demand and store
up to 110,000 tonnes of product on site, reducing the need for
multiple distribution warehouses. K4 will generate all the energy
and electricity it needs for its on-site operations from bagasse,
the sugarcane waste product, and each year for the next 10
years it will export 10MW of electricity to the local grid to create
an additional revenue stream.
This expanded production capacity requires an increase in the
supply of sugar cane from 1.25 million to 2.5 million tonnes per
year. This is an opportunity for the local growers. Their numbers
are forecast to increase from 6,500 to 12,000, making K4 the
largest community-inclusive rural economic development
project in Tanzania.
A key strategic priority for the project is community inclusivity.
Accordingly, Kilombero Sugar carried out climatic and agronomic
reviews of the surrounding farming area and conducted surveys
of the local grower community to assess interest in cane
cultivation. Kilombero Sugar will further support local cane
farmers by providing information and analyses of the farms.
The project envisages local growers will supply some 1.5 million
tonnes of cane a year, with 75% of the supply expected within
the first six years. Kilombero Sugar’s cane supply from its
own farm will also increase to 1 million tonnes a year, with
investment to be made in upgrading irrigation equipment
as part of that.
OPERATING REVIEW CONTINUED
Sugar continued
Associated British Foods plc | 38 | Annual Report 2024
The K4 sugar factory
and warehouse
under construction
at Kilombero
in Tanzania
Associated British Foods plc | 39 | Annual Report 2024
An advertising
image for White
Spoon in Zambia
AB Agri is an international agri-food
business.
We sell our products and services to farmers, feed and food
manufacturers, processors and retailers in more than 100
countries. We employ more than 3,000 people globally.
We produce speciality feed ingredients for livestock, horses and
pets. We develop pioneering ingredients including feed additive
products, high-quality bespoke vitamin and mineral
pre-mixes and starter feeds.
Our dairy business in the UK delivers targeted insights that
help create continuous improvement for dairy supply chains.
We provide products and data insights to major food processors,
retailers and directly with farmers, enabling them to produce
high-yielding, safe and nutritious dairy products.
AB Agri is also one of the UK’s largest compound feed
businesses for pig and poultry customers. It is also one of the
UK’s largest marketers of co-products from the food and drink
industries for dairy and beef farmers. We have international
manufacturing capabilities extending into Europe and China.
Frontier
We also have a 50% ownership in Frontier, the UK’s leading
provider of grain marketing and crop production services to
customers in the UK. It supplies seed, crop protection products
and fertiliser to farmers, as well as providing specialist
agronomy advice.
Revenue
£1,650m
2023: £1,840m
Actual currency: down 10%
Constant currency: down 9%
Adjusted operating profit
£41m
2023: £41m
Actual currency: down 0%
Constant currency: up 3%
Adjusted operating profit margin
2.5%
2023: 2.2%
Operating profit
£31m
2023: £32m
Actual currency: down 3%
Return on average capital employed
8.0%
2023: 8.4%
Number of employees
3,446
2023: 3,052
Gross investment
£29m
2023: £92m
OPERATING REVIEW CONTINUED
Agriculture
About Agriculture
Associated British Foods plc | 40 | Annual Report 2024
Agriculture revenue decreased by 9%while adjusted operating
profit increased by 3% in 2024.
Our speciality feed and additives businesses performed well. AB
Neo, our starter feed business, had good growth in volumes and
operating profit. AB Vista, our international feed additives
business, grew volumes of both enzyme and non-enzyme
additives, albeit continued price competition on certain products
impacted sales growth. Premier Nutrition, our specialist premix
manufacturing business, had good growth driven by volumes
and our nutritional supplements businesses delivered good
growth in sales and profit. Our dairy business, which was formed
through a number of acquisitions in 2023, performed well as we
continued with their integration.
Lower sales in our compound feed businesses reflected reduced
commodity prices and continued soft demand in the UK and
China. Market conditions in the UK remained challenging due to
reduced herd sizes and excess feed production capacity and in
China the market was depressed by the economic environment
and low farm profitability.
Frontier, our JV that provides grain marketing and crop
production services to customers in the UK, was significantly
impacted by prolonged wet weather in autumn 2023. This
particularly affected the overall performance of Agriculture in
2024.
We continued to invest in long-term growth, with the ongoing
build of new premix plants in Vietnam and China.
ESG highlights
• AB Agri reduced its Scope 1 and 2 emissions (location-based)
by 14% in 2024 compared to last year. This reduction was
partly due to operational reasons, but also driven by efficiency
improvements, technological investments, and a shift to
lower-emission fuel sources, including the installation
of solar panels.
• AB Agri continues to develop its integrated dairy business
which collaborates with various stakeholders along the
value chain to develop solutions aimed at reducing the
environmental footprint of dairy farms and in particular
reducing their GHG emissions.
Read more about ESG initiatives at AB Agri
on our website at www.abf.co.uk.
Operating review
ESG at Agriculture
Associated British Foods plc | 41 | Annual Report 2024
A lab manager testing
waste animal feed for use
as anaerobic digestion
feedstock at Amur
Energy's lab in York, UK
to improve
livestock wellbeing
Investing in
innovation
AB Vista expands offering to support
responsible livestock production
We have identified the need for more holistic solutions to support customers in addressing
the challenges ahead, so creating an opportunity to add more value beyond feed additive products.
Since its inception in 2004, AB Vista has grown to be a leading
player in supplying enzymes to the global animal feed industry
and livestock farm businesses. With a reputation for scientific
capability and products backed by extensive trials and evidence,
the business has been seeking to expand its offering to
better address the biggest challenges facing the industry today
– producing more from less and supporting animal health
and welfare.
Many of the most common and problematic diseases found
in livestock affect the animals’ gut, so maintaining gut health
is vital in responsible and productive livestock farming systems.
Livestock producers can minimise the risk of disease and reduce
the use of antibiotics and other therapeutic medicines by
focusing on building gut health and immune system robustness,
rather than treating animals once disease is prevalent.
This increases the number of healthy animals produced.
The gut is a complex area to manage, not least because of the
interaction between the animal, its conditions and its unique
microbiome comprising billions of microorganisms.
So AB Vista’s research has focused in part on identifying
biomarkers of microbiome health, such as those that indicate
the balance between fibre and protein fermentation and the
population of some potentially pathogenic bacteria families.
This research underpins AB Vista’s new gut health service for
piglets and broiler chicken producers, bringing together its health
expertise, its gut health testing and a product portfolio featuring
feed additive products which all combine to enhance gut health
without the use of medicine. One example of such a product is
Progres, a patented natural feed material derived from
coniferous trees with active ingredients proven to reduce the
damage caused by inflammation in poultry and livestock.
We believe AB Vista is uniquely well positioned because it
is now able to combine its well-developed existing routes to
market with its recently enhanced offer made up of products,
services and expertise. As our capability in diagnostics and data
analysis grows further, we hope to enter new markets with this
broad solution-led offering.
OPERATING REVIEW CONTINUED
Agriculture continued
Associated British Foods plc | 42 | Annual Report 2024
An AB Vista lab
technician at our
technology and
innovation centre
in Wales
Associated British Foods plc | 43 | Annual Report 2024
Piglets on an AB Agri
feed customer’s farm
in Norfolk, UK
Group performance
Group revenue was £20.1bn, 4% ahead of last year at constant
currency, with sales growth in Retail and most of the food
businesses. The Group generated an adjusted operating profit of
£1,998m, an increase of 32% at actual exchange rates ahead of
last year, reflecting a strong margin recovery across the Group as
a result of input cost pressures easing. Group adjusted operating
profit margin improved from 7.7% last year to 10.0%. Operating
profit for the Group of £1,932m was 40% ahead, after charging
exceptional items of £35m (2023 – £109m).
For the full year the average rates used to translate the income
statement resulted in an adverse translation movement
compared to the prior year of £97m, primarily driven by the
strengthening of sterling against the US dollar and the euro, as
well as against some of our trading currencies in our business in
Africa.
Free cash flow of £1,355m increased significantly on last year,
an increase of £1,086m.
Segmental summary
The segmental analysis by division is set out in the operating
reviews. The segmental analysis by geography is set out in note 1
in the notes to the financial statements.
Revenue
Adjusted operating profit
At actual rates
2024
2023
Change
2024
2023
Change
£m
£m
%
£m
£m
%
Retail
9,448
9,008
+4.9
1,108
735
+50.7
Grocery
4,242
4,198
+1.0
511
448
+14.1
Ingredients
2,134
2,157
-1.1
233
214
+8.9
Sugar
2,529
2,474
+2.2
199
179
+11.2
Agriculture
1,650
1,840
-10.3
41
41
–
Central
–
–
–
(100)
(94)
-6.4
20,003
19,677
+1.7
1,992
1,523
+30.8
Business disposed
Sugar
70
73
6
(10)
20,073
19,750
+1.6
1,998
1,513
+32.1
FINANCIAL REVIEW
Financial review
Associated British Foods plc | 44 | Annual Report 2024
Adjusted earnings per share
2024
2023
Change
£m
£m
%
Adjusted operating profit
1,998
1,513
+32.1
Finance income
71
48
Finance expense
(33)
(37)
Lease interest expense
(102)
(91)
Other financial income
23
40
Adjusted profit before taxation
1,957
1,473
+32.9
Taxation on adjusted profit
(453)
(346)
Adjusted profit after tax
1,504
1,127
+33.5
Adjusted earnings attributable to
equity shareholders
1,479
1,103
+34.1
Adjusted earnings per share (in
pence)
196.9 p
141.8 p
+38.9
Interest and other financial income
Finance income increased in the year as a result of higher rates
of interest earned on our cash and investments. Finance
expense reduced as a result of the repayment of our final $100m
Private Placement notes in early April while lease interest
expense increased driven in part by our continued store
expansion programme in Retail. Other financial income was
lower primarily due to foreign exchange losses caused by the
devaluation of certain African currencies on non-local currency
liabilities.
As a result of the above, on an adjusted basis, profit before tax
was up 32.9%, to £1,957m.
Taxation
This year’s tax charge on the adjusted profit before tax was
£453m, with a reduction in the adjusted effective tax rate to
23.1% from 23.5% last year. The adjusted effective tax rate
included the full year impact of the increase in UK corporation tax
from 19% to 25% from April 2023 but this was more than offset
by the changes to the mix in profits by jurisdiction.
Our current expectation is for the Group's effective tax rate in
2025 to be broadly in line with 2024. This assumes that the
limited upward pressure on the rate arising from the introduction
of Pillar 2 will be offset by several smaller movements.
Adjusted earnings per share increased by 38.9% to a record
196.9p per share. This increase reflects the higher adjusted profit
as well as as a benefit from the reduction in the weighted
average number of shares, from 778 million for 2023 to 751
million for 2024, as a result of share buyback programmes
executed in the year.
Basic earnings per share
2024
2023
Change
£m
£m
%
Adjusted profit before tax
1,957
1,473
+32.9
Acquired inventory fair value
adjustments
(2)
(3)
Amortisation of non-
intangibles
(40)
(41)
Exceptional items
(35)
(109)
Profits less losses on sale and
closure of businesses
26
(3)
Profits less losses on disposal
of non-current assets
16
28
Transaction costs
(5)
(5)
Profit before tax
1,917
1,340
+43.1
Taxation
(437)
(272)
Profit after tax
1,480
1,068
+38.6
Earnings attributable to equity
shareholders
1,455
1,044
+39.4
Basic earnings per share (in
pence)
193.7 p
134.2 p
+44.3
Exceptional items
2024
2023
£m
£m
Grocery - impairment
–
41
Sugar - impairments
24
50
Retail - impairments, right-sizing and fair
value write-downs
11
18
35
109
The income statement this year included a non-cash exceptional
impairment charge of £35m.
In the Sugar segment, Vivergo recognised a £18m impairment
write-down against assets driven by the volatility of bio-ethanol
prices impacting trading margins. Due to the severe flooding in
Mozambique last year, the related damage to the sugar crop
fields and the inability to plant for the foreseeable future, our
sugar business in Mozambique recognised a further £6m
impairment write-down against assets.
In the Retail segment, the Group recognised £11m of
exceptional impairment charges relating to the German stores
impaired in 2022, after additional right-of-use assets were
recognised due to rent indexation adjustments in the current
financial year.
The prior year exceptional impairment charge of £109m
comprised non-cash write-downs of assets specifically £41m for
the Don businesses in the Grocery segment, £50m for the Sugar
segment including £15m for China North Sugar and £35m for
Mozambique and £18m for the Retail segment relating to rent
indexation in the German Primark store portfolio.
Associated British Foods plc | 45 | Annual Report 2024
Profit less losses on sale and closure of businesses of £26m
predominantly includes the profit on our sale of our China North
Sugar business. Profit less losses on disposal of non-current
assets of £16m includes profit on sale of our non-operating
investment property portfolio in our Central division for
properties in the UK and Australia. The prior year profit of £28m
also relates to the sale of other non-operating investment
properties in Central mostly in Australia and also included a large
property sale in the UK for our Grocery Segment.
Profit before tax of £1,917m was 43.1% ahead of last year,
benefitting from the lower level of exceptional items in 2024.
Total tax charge for the year of £437m benefitted from a credit
of £16m (2023 – £74m) for tax relief on the amortisation of non-
operating intangible assets, the amortisation of acquired
inventory fair value adjustments, the profits on disposal of non-
current assets, the profits on disposal of businesses and on the
exceptional items.
Earnings attributable to equity shareholders were £1,455m
and basic earnings per share were 193.7p, 44% ahead of last year,
also benefitting from the lower level of shares.
Cash flow
2024
2023
£m
£m
Adjusted EBITDA
2,910
2,361
Repayment of lease liabilities net
of incentives received
(308)
(246)
Working capital
305
(216)
Capital expenditure
(1,184)
(1,073)
Purchase of subsidiaries, joint ventures
and associates
(93)
(94)
Sale of subsidiaries, joint ventures
and associates
24
4
Net interest paid
(69)
(74)
Taxation
(340)
(341)
Share of adjusted profit after tax from
joint ventures and associates
(120)
(127)
Dividends received from joint ventures
and associates
105
107
Other
125
(32)
Free cash flow
1,355
269
Share buyback
(562)
(448)
Dividends
(502)
(345)
Movement in loans and current asset
investments
(318)
(10)
Cash flow
(27)
(534)
There was a record free cash inflow in the year totalling £1,355m
as a result of a combination of record operating profit generated
by the Group, and the normalisation of working capital.
Working capital inflows during the current financial year were
driven by a number of factors including the normalisation of
inventory at Primark as expected, stock reductions in most of our
food businesses, reducing inflation overall and various other
working capital initiatives.
The capital expenditure increase this year continues from the
step up in investment last year following low levels in the prior
years. This is driven by the continuation of a number of large
capital projects. The increase of the investment in our food
businesses primarily relates to projects to build capacity. In
Primark the increase reflects the acceleration of our new store
programme and expenditure to expand our capabilities in
warehouse automation and technology. We expect this higher
level of investment to continue in the medium term.
2024 gross investment
Retail: £530m
Sugar: £252m
Grocery: £226m
Agriculture: £29m
Ingredients: £238m
Central: £6m
The spend on acquisitions this financial year was £93m. The
most significant of these were the acquisition of The Artisanal
Group ('TAG') in Australia in our Grocery segment, acquisitions in
our Ingredients segment of Mapo, Romix and Omega Yeast and
the acquisition of our remaining holding of the Roal business in
which we previously had a 50% stake.
We disposed of our China North Sugar business.
Cash tax was broadly similar to last year, notwithstanding the
significant increase in profit, because of the reallocation of
historic overpayments arising from favourable settlements of
historical enquiries and returns. We expect this impact to
continue in 2025 and overall are expecting a slightly reduced
level of cash tax due to the anticipated receipt of the state aid
refund.
In Other cash flow, we have seen the benefit of the UK pension
fund abatement of £64m (£38m for the defined contribution
scheme and £26m for the defined benefit scheme) and an
increase in non-cash provisions predominantly as a result of the
onerous contract provisions recognised in our Sugar segment.
FINANCIAL REVIEW CONTINUED
Associated British Foods plc | 46 | Annual Report 2024
£1,281m
(2023: £1,171m)
Below free cash flow, there was cash outflow of £562m from
our share buyback programmes, £56m related to the first £500m
share buyback early in the financial year, the completion of the
second £500m share buyback programme. We also paid £502m
for total dividends in this financial year, which reflects the 2023
final and special dividend and interim 2024 dividend. Cash
deposits placed with a greater than 90-day term resulted in an
increase in current asset investments in the year.
Financing and liquidity
2024
2023
£m
£m
Short-term loans
(71)
(99)
Long-term loans
(454)
(394)
Lease liabilities
(3,065)
(3,160)
Total debt
(3,590)
(3,653)
Cash, cash equivalents and overdrafts
1,235
1,388
Current asset investments
334
–
Total net debt
(2,021)
(2,265)
Leverage ratio
0.7x
1.0x
Total short and long term loans of £525m at the year end
increased by £32m compared to £493m last year, with our final
$100m (£81m) Private Placement notes being repaid in April
2024. This was offset by increased borrowing in our Sugar
businesses in Africa, to primarily fund expansion in Tanzania.
Cash, cash equivalents and current asset investments of
£1,569m increased by £181m compared to last year, reflecting
our positive cash flow. £334m of this is classified as current
asset investments, with cash deposits with maturities between
three and six months placed to diversify our cash investments
and lock in favourable interest rates. Net cash before lease
liabilities of £1,044m increased by £149m year-on-year.
Total Liquidity of £2.9bn was £0.2bn higher than last year. Total
Liquidity comprises cash, cash equivalents and current asset
investments of £1.7bn less non-qualifying borrowings of £0.2bn
and inaccessible cash of £0.1bn, plus the £1.5bn committed
revolving credit facility ('RCF'), which is free of financial
performance covenants. The RCF was extended in the year,
taking the final maturity to June 2029.
Lease liabilities reduced by £95m year-on-year as a result of the
capital repayment element of the leases and favourable
exchange rate movements more than offsetting the impact of
new space and lease renewals.
Total net debt reduced by £244m in 2024 to £2,021m at the year
end. A combination of higher Adjusted EBITDA and lower Total
net debt resulted in a lower Leverage ratio of 0.7x at the year
end, compared to 1.0x in 2023.
Pensions
The Group’s defined benefit pension schemes aggregate surplus
increased by 4% to £1,432m at year end compared to last year’s
£1,377m. The UK scheme, which accounts for around 90% of
the Group’s gross pension assets was in surplus by £1,454m
(2023 – £1,397m. The most recent triennial actuarial valuation of
the UK scheme was carried out as of 5 April 2023. This last
valuation showed a funding surplus of £1,013m . Details of the
assumptions made in the current and previous year are disclosed
in note 13 of the financial statements together with the bases on
which those assumptions have been made.
The charge for the year for the Group’s defined contribution
schemes amounted to £103m (2023 – £95m). This compared
with the cash contribution to the defined benefit schemes of
£9m (2023 – £36m), the decrease driven by the benefit of the
abatement on the UK pension fund.
As agreed with the trustees last year and reconfirmed this year,
as a result of this significant increase in the surplus in the UK
scheme, the Group will continue to receive a cash flow benefit
per year from the abatement of UK employer pension
contributions on both the defined benefit and defined
contribution schemes, the latter approximately £35m.
Dividend and shareholder returns
Our capital allocation policy is for the Group’s financial leverage,
expressed as the ratio of Total net debt to Adjusted EBITDA, to
be well under 1.5 times whilst financial leverage consistently
below 1.0 times may indicate a surplus capital position. Surplus
capital may be returned to shareholders by special dividends or
share buybacks, subject to the Board’s discretion.
In November 2023 we announced our second share buyback
programme of £500m, which was completed in August 2024.
At the end of the financial year we had 744 million ordinary
shares in issue. The weighted average number of shares for the
year was 751 million, which compared to 778 million for the prior
financial year. This year's share buyback has had a positive
impact on our reported adjusted earnings per share of 6.7p,
calculated on a simplified basis.
At the end of the financial year 2024, our financial leverage ratio
was 0.7x In September 2024, we extended the buyback
programme by £100m. This has now been completed. The
Group continues to prioritise investment in its businesses.
Nevertheless, given the outlook for the Group, the strength of
the balance sheet and the underlying cash generation of the
business, the Board has decided to continue to return additional
capital to shareholders. Therefore, the Group will continue with a
buyback programme, targeting an additional amount of £500m
over the next 12 months.
In addition, the Group is declaring a special dividend of 27.0p per
share. The Board is proposing a final dividend of 42.3p per share,
which together with the special dividend will be paid on 10
January 2025 to shareholders on the register on 13 December
2024. Taken with the interim dividend of 20.7p per share, the
total dividend equates to 90.0p per share, an increase of 50% on
the total dividend of 60.0p in the financial year 2023.
Eoin Tonge
Finance Director
Associated British Foods plc | 47 | Annual Report 2024
Stakeholder engagement
We engage regularly with stakeholders at Group and/or business
level, depending on the particular issue.
As illustrated in our operating model on pages 8 to 11, the role
of the Group, the corporate centre, and therefore of the Board,
is to provide a framework for the sharing of ideas and best
practice. There is constant dialogue with the people who run
our businesses, giving our corporate leaders a comprehensive
overview of their material opportunities and risks, enabling
collaboration. We consider this to be an important factor
in the success of the Group.
Authority for the operational management of the Group’s
businesses is delegated to the Chief Executive for execution
or for further delegation by the Chief Executive to the senior
management teams of the businesses. This is to ensure the
effective day-to-day running and management of the Group.
The chief executive of each business within the Group has
authority for that business and reports directly to the
Chief Executive.
While day-to-day operational decisions are made locally,
the Board not only provides input on the principal decisions
and strategy, but also supports individual businesses
by facilitating the sharing of best practice and know-how
between the businesses.
This approach necessarily involves a high degree of delegation
of communication with stakeholders to the management of the
Group businesses. Where the directors of the Company have
not themselves directly engaged with stakeholders, those
stakeholder issues are considered at Board level both through
reports to the Board by the Chief Executive and/or Finance
Director and also by the senior management of the Group’s
businesses. Senior management of the businesses are
requested, when presenting to the Board on strategy and
principal decisions, to ensure that the presentations cover
what impact the strategy/principal decision has on the relevant
stakeholders and how the views of those stakeholders have
been taken into account.
In the following pages, we set out the key stakeholder groups
with whom engagement is fundamental to the Group’s
ongoing success.
Employees
We employ approximately 138,000 people. Our people are central to our success.
Key matters
How the businesses engage with this
stakeholder group
• Health, safety and wellbeing
• Diversity, equity and inclusion
• Cost of living
• Culture
• Engagement
• Development
• Day-to-day engagement
• Email
• Town halls
• Surveys
• Health and safety
programmes
• Training
• Notice boards
• Newsletters
• Intranet
How the Board engages and/or is kept informed and takes matters into account
• Richard Reid, as designated Non-Executive Director for
engagement with the workforce, meets with employees from
a selection of businesses to seek to ensure that the ‘voice’
of each workforce in the Group is heard at Board level.
• The Board receives two specific updates each year from
Richard Reid and the Chief People and Performance Officer
in respect of progress on workforce engagement and
resulting actions.
• Each business division also specifically reports to the Board
on workforce engagement within that division.
• The Chief Executive and Finance Director continue to engage
with employees both at the corporate centre and at the
regional businesses through town halls in the businesses
covering business updates and ESG topics.
• The Group Safety and Environment Manager provides the
Board with updates on safety trends and progress against
key performance indicators, supplemented by updates from
the divisions.
See the letter from Richard Reid on pages 95 and 96,
which includes details of some of the outcomes
from workforce engagement. See also the
‘Our people’ section on pages 58 to 60.
SECTION 172 STATEMENT | OUR STAKEHOLDERS
Engaging with our stakeholders
Associated British Foods plc | 48 | Annual Report 2024
Suppliers
As a diversified international Group, we have many complex supply chains.
Key matters
How the businesses engage with this
stakeholder group
• Responsible sourcing
• Supply chain sustainability
• Payment practices
• Human and labour rights
in our supply chains
• Transparency in supply
chains
• Conversations (face-to-face
or virtual)
• Training
• Communication sessions
• Correspondence
• Audits
• Engagement with supplier
representatives and NGOs
How the Board engages and/or is kept informed and takes matters into account
• Senior management of each business division (often with the
assistance of specialists from within that division) regularly
report to the Board on key relationships and projects with
suppliers either as part of their business updates to the Board
or through reports to the Chief Executive and Finance Director.
• The Board reviews each business segment every year,
including a review of ESG matters in the supply chains.
Examples of key matters or projects on which the Board was
briefed include:
• human rights and environmental due diligence in respect
of our supply chains;
• disruption to ocean freight in the Red Sea and its impact
on supply chains; and
• the expansion of the Kilombero sugar plant in Tanzania and
the impact on growers.
See further details on pages 19 and 61 in respect of
our human rights and environmental due diligence,
page 80 in respect of working with suppliers to
manage supply chain risks and page 38 in respect of
the expansion of the Kilombero plant.
Customers/Consumers
The buyers of our safe, nutritious and affordable food, and clothing that is great
value for money.
Key matters
How the businesses engage with this
stakeholder group
• Healthy and safe products
• Value for money
• Availability of products
• Customer relations
• Social and environmental
impact
• Store environment
• In-store signage (Primark)
• Face-to-face interactions
with staff
• Customer surveys
• Websites
• Labelling
• Social media
• Customer/consumer
contact lines
• Market data analysis
How the Board engages and/or is kept informed and takes matters into account
• The Board is regularly updated by each business division
on its strategy, including in relation to key customers and key
activities impacting customers and consumers.
• The Group Director of Financial Control provides the Board
with an annual report on food and feed safety.
• The Chief Executive and Finance Director meet each division
quarterly to discuss key commercial matters.
Examples of key matters or projects on which the Board was
briefed include:
• increased marketing investment in Twinings and Ovaltine;
• Primark’s Digital Strategy, including expansion of the Click
& Collect offering; and
• the Agriculture division’s strategy of connecting data
and technology in new ways to help customers
improve performance.
See further details on page 20 about Primark’s
roll-out of Click & Collect, on page 26 about
Twinings investing in marketing to grow our
international brands and on page 42 about AB
Vista investing in innovation to support customers
in improving livestock wellbeing.
Associated British Foods plc | 49 | Annual Report 2024
Communities and the environment
Supporting society and respecting the environment are two of the key ways we live our
values and make a difference.
Key matters
How the businesses engage with this
stakeholder group
• Climate change mitigation
and adaptation
• Natural resources and circular
economy
• Social impact – including
employment opportunities
• Agriculture and farming
practices
• Various environmental
programmes
• Dealings with NGOs and
other expert programmes
and schemes
• Coaching and training
programmes
• Community programmes
and schemes
How the Board engages and/or is kept informed and takes matters into account
• Senior management of the business divisions report to
the full Board on their key ESG matters as part of their
business updates.
• The Board reviews risk assessments undertaken by the
businesses each year which consider, among other things,
climate change impacts and risks.
• The Director of Legal Services and Company Secretary and
the Group Corporate Responsibility Director present to the
Board (or to individual Board members) on broader corporate
responsibility issues that sit beyond our direct manufacturing
operations e.g. in the supply chains.
• The Board receives updates from the Chief People and
Performance Officer and the Group Safety and Environment
Manager on environmental matters in our direct
manufacturing operations.
• The Board receives updates and provides views on other
sustainability matters. This included individual sessions with
non-executive directors on climate-related financial reporting.
See pages 61 to 65 in the Responsibility section
of this Annual Report. See also pages 37 and 38 for
examples of projects which also benefit surrounding
communities.
Shareholders and institutional investors
The Company has a mix of individual and institutional shareholders, including bondholders,
whose views are valued.
Key matters
How the businesses engage with this
stakeholder group
• Strategic updates
• Business and financial
performance
• Return on investment
• ESG
• Remuneration
• Results announcements
• Press releases
• Annual general meeting
• Annual Report
• Website
• Meetings
• Registrar
How the Board engages and/or is kept informed and takes matters into account
• Regulatory News Service (RNS) announcements keep
investors updated on business and financial performance
and other matters.
• The Chief Executive and/or Finance Director meet with
investors throughout the year. The Head of Investor Relations
also meets prospective and current investors, as well as
analysts who write reports on the Company.
• Each year, the Chairman meets with the Company’s
largest institutional shareholders to discuss their views,
issues or concerns.
• The annual general meeting provides an opportunity for retail
shareholders to ask the Board questions.
• The Board also responds either directly or via its in-house
company secretarial team to shareholder queries raised
throughout the course of the year.
• At each Board meeting, the directors are briefed on meetings
that have taken place with institutional shareholders and
on feedback received.
• The Remuneration Committee Chair meets with investors and
analysts to answer queries and respond to feedback around
remuneration issues.
• All shareholders are treated equally and a Relationship
Agreement is in place with the Company’s controlling
shareholders (see page 128 and 129).
See further details on page 93, which includes
details on this year’s annual general meeting.
SECTION 172 STATEMENT | OUR STAKEHOLDERS CONTINUED
Associated British Foods plc | 50 | Annual Report 2024
Governments
The Group is impacted by changes in laws and public policy.
Key matters
How the businesses engage with this
stakeholder group
• Climate and environment-
related matters
• Tax and business rates
• Agricultural and trade policy
• Public health
• Support of businesses
and workers
• Energy support schemes
• Meetings, calls and
correspondence
• Responding to consultations
and calls for evidence
• Providing data/insights
(e.g. supply challenges)
• Participation in government
schemes
• Parliamentary events
• Industry forums
• Site visits
• Attendance at conferences
How the Board engages and/or is kept informed and takes matters into account
• The Company engages with governments to contribute to,
and anticipate, important changes in public policy.
• The Board takes into account the interplay between
commercial decisions and government policies and aims
in its investment decisions.
• The Board is briefed on engagement with governments,
which, using the UK as an example, might cover matters
specifically related to environmental policies including
Extended Producer Responsibility, decarbonisation and the
Emissions Trading Scheme, high streets and business rates
and taxes, the impact of international conflicts and new
government priorities.
Associated British Foods plc | 51 | Annual Report 2024
In making decisions throughout the course of the financial year, there is a need to ensure that the
consequences promote the long-term success of the Company, as well as maintain our reputation
for high standards of business conduct.
Provided in this section are some examples of principal decisions that were taken (or implemented) by the Board during the year
and how stakeholder views were taken into account and impacted on those decisions.
Capital structure and shareholder returns
Which stakeholders most affected?
Shareholders/Institutional investors
Consideration of stakeholder views/interests and impact
on decision-making
Following completion of the first £500m share buyback
announced in November 2022, the Board decided to launch
a further £500m share buyback in November 2023. The Board
also declared a special dividend, in addition to proposing a final
dividend, both payable in January 2024.
In making these decisions, the Board considered the Company’s
capital allocation policy, which is for the Group’s financial leverage
(expressed as the ratio of net debt including lease liabilities to
adjusted EBITDA) to be well under 1.5 times. As the financial
leverage was just under 1.0 times, this indicated a surplus capital
position, giving the Board the discretion to return surplus capital
to shareholders both by way of a special dividend and a share
buyback programme. In exercising that discretion, the Board
took into account the outlook for the Group, the strength of
the balance sheet and the underlying cash generation of the
business. The Board considered that these shareholder returns
still allowed the Group the ability to continue to prioritise
investment in its businesses. The Board also considered that
share buybacks should only be used if they created enhanced
value for continuing shareholders.
Following payment of an interim dividend in July 2024, and
following completion of the further £500m buyback in August
2024, in September 2024 the Board approved an additional
£100m extension to the share buyback.
In deciding to buy back shares, as well as taking into account
the Company’s capital allocation policy, the Board also took into
account ongoing views of various investors (including views
expressed in meetings with the Chairman, the Chief Executive
and/or Finance Director) and advice from the Company’s
advisers and brokers that further share buybacks would be
an appropriate way to return capital to shareholders.
Investments in digital and data capabilities,
technology and brand marketing at Primark
Which stakeholders most affected?
Customers/Consumers
Employees
Consideration of stakeholder views/interests and impact
on decision-making
Following the continued investment in digital capability and
expansion of Click & Collect services referred to in last year’s
Annual Report, the Board approved increased investment in
Primark’s product, digital and brand initiatives.
During the financial year, the Board spent two days with Primark
in Madrid and received presentations from senior management
of Primark covering a range of matters including updates on
Primark’s digital strategy and investments in technology, as well
as on investments in brand marketing and the ongoing store
expansion and store refits.
The Board was updated on the Click & Collect trial in the UK, which
demonstrated that the service satisfied unfulfilled demand from
both new and existing customers by offering an extended choice
beyond the local store offering. The digital initiatives have resulted
in increased engagement with customers and the stock-checker
facility, combined with other improvements to the websites,
were considered to have provided meaningful support to sales.
There is continued investment in search engine optimisation,
customer relationship management and paid marketing.
Other technology investments discussed and approved by the
Board include the continued roll-out of self-checkouts in Primark
stores, which we believe will both improve customer experience
and reduce costs.
Customers at the self-checkouts in Primark’s expanded
store in Westfield Stratford, UK. Credit: ITAB.
SECTION 172 STATEMENT | PRINCIPAL DECISIONS
Principal decisions
Associated British Foods plc | 52 | Annual Report 2024
Approval of various capital projects in our food
and ingredients businesses
Which stakeholders most affected?
Customers/Consumers
Communities/Environment
Employees
Shareholders/Institutional investors
Consideration of stakeholder views/interests and impact
on decision-making
Throughout the financial year, the Board approved further
significant capital expenditure (or increases to existing approved
capital expenditure) in our food and ingredients businesses.
This included:
• expansion of the AB World Foods production facility at Nowa
Sol in Poland to accommodate growing demand;
• proposed investment in a replacement flour mill for George
Weston Foods in Ballarat, Victoria; and
• investment in our new yeast plant in Northern India where we
consider there to be considerable demand for bakery yeast.
The Board received regular updates on all major capital
expenditure projects including decarbonisation projects at British
Sugar. These updates also included the key technology projects
in the Group.
The decisions to approve projects and initiatives took into account
the environmental benefits of improving the carbon efficiency
of the businesses. The decisions also factored in our investors’
interest in us making the best use of the Company’s capital.
A new evaporator installed at British Sugar’s factory in
Wissington as part of a project to reduce site emissions
Acquisition of various food businesses to build
capability and create new growth opportunities
Which stakeholders most affected?
Shareholders/Institutional investors
Customers/Consumers
Employees
Consideration of stakeholder views/interests and impact
on decision-making
During the course of the financial year, the Board considered
and/or approved a number of acquisitions by divisions within
the Group. This included:
• The Artisanal Group in Australia, strengthening the Group’s
grocery portfolio in Australia by adding a leading manufacturer
and wholesaler of high-quality baked goods, primarily serving
cafes, restaurants and hotels;
• Omega Yeast Labs, a leading provider of liquid yeast to the
craft brewing industry in the United States, complementing
AB Mauri’s existing portfolio of speciality yeast products;
• Mapo in Italy, supporting AB Mauri’s growth in premium
frozen baked goods and underpinning the growth potential for
our Scrocchiarella dough products; and
• Romix in the UK, bringing new manufacturing capabilities
to AB Mauri in respect of products requiring allergen control,
including egg-free and gluten-free.
Each of these acquisitions, as well as providing growth
opportunities for the Group, was considered to give the
capability to offer a broader range of products to our existing
customers and potentially access a broader range of customers
for our existing businesses. Consideration was also given
to the impact of the acquisitions on employees in the
respective businesses.
The Board was also updated on disposals during the financial
year, including our China North Sugar business and our Africa
Sugar business’s investment in Gledhow.
The Omega Yeast Labs production facility in Chicago,
United States
Associated British Foods plc | 53 | Annual Report 2024
I believe that at ABF we have a clear sense of our social
purpose. We work hard every day to provide safe, nutritious and
affordable food and good quality, affordable clothing. In fact this
sense of purpose underpins not just what we do, but how we do
it too. It is engrained in how the Group is run, in how we invest
and innovate, and in how we judge success. This core conviction
runs through our devolved operating model and binds us together
in how we operate across 56 countries and multiple markets.
It will come as no surprise therefore when I say that we have
been acting on ESG opportunities and issues for years, well
before it became a mainstream priority for the Group as a whole.
Our focus on steady, long-term, compounding growth is a natural
bedfellow for ESG delivery. Consistent investment and focus
and commitment are all required to deliver results in both the
world of sustainability, and the commercial and financial world.
Having a strong sense of purpose is of course not enough.
We also have to be effective in where and how we invest for
change. That means making choices, given we operate through
many businesses in many markets. We use materiality as the
yardstick for assessing potential projects. By material, we mean
material both for the Group and its future, and for the impact
the Group has on the world. This assessment leads us to choose
very substantial projects when allocating significant capital to
drive change and make a real difference.
This year our Group priorities were the continued decarbonisation
of British Sugar, human rights in Primark’s supply chain, water
and effluent at AB Mauri, dealing with social factors in our
sugar businesses in Africa, and building a greater understanding
of the very complex issue of Scope 3 emissions across the
Group as a whole.
These priorities are illustrative of how we are engaged in some
of society’s most complex issues and decisions. There are
trade-offs everywhere, many of them preoccupying governments,
regulators and civic society too. It can make no sense for example
to offshore domestic production simply to hit domestic carbon
emission targets. Nor is it sensible to offshore agriculture if so
doing has a net adverse impact on the global environment or on
animal welfare. Similarly, food security is increasingly important
to populations everywhere and sustainable food production has
to be correspondingly every bit as important as sustainable land
use. Amid these complexities we will continue to make our
decisions as best we can in the context of global considerations
and remain committed to doing the right thing for the long-term.
Meeting our obligations may not be easy, but our operating
model confers real advantage: as a devolved group, we empower
the managers of the businesses to select and deliver many of
the projects that deliver on the Group’s priorities. These projects
are embedded in the Group review processes for good governance
and deliver good commercial and financial returns as well as the
social or environmental returns.
One area of progress this year has been improvement in our
internal reporting. It is important however that reporting is not
the sole focus. Delivering outcomes is the real focus, so ensuring
teams are freed up to deliver is critical. This is why we have
clearly linked financial and non-financial reporting throughout
the Group to drive effectiveness.
This interlocking of the financial with the environmental and
social makes it a logical step for us to move to combined
reporting of these previously separate worlds. This year marks
the first combined report for the Group. In this part of our Annual
Report and Accounts to shareholders, we set out our material
ESG initiatives. We have also developed the Group website
to include an expanded Responsibility section where we provide
more detail on our initiatives. The website’s Responsibility
section also provides more functionality for easier access
to information and data for download.
I hope you find our reporting here and on the website both
useful and helpful in getting a sense of the scale of the work
we are undertaking across the Group.
George Weston
Chief Executive
Associated British Foods plc
RESPONSIBILITY
ESG at ABF
Associated British Foods plc | 54 | Annual Report 2024
Non-financial and sustainability reporting requirements
The Group data included in this Report on our environmental
and safety KPIs covers the period 1 August 2023 to 31 July 2024.
The Companies Act 2006 requires the Company to disclose
certain non-financial and sustainability information within the
Annual Report and Accounts.
Accordingly, the disclosures required in the Company’s
non-financial and sustainability information statement can
be found on the following pages in the Strategic Report
or are incorporated into the Strategic Report by reference
for these purposes:
Information on our business model (pages 8 to 11)
Information on our people (pages 58 to 60)
Information on DEI (page 59)
Information on our Anti-Bribery and Corruption Policy (page 61)
Information on our Speak Up Policy (page 61)
Information on our approach to human rights (page 61)
Information on supporting communities (page 61)
Information on our environmental management
(pages 62 to 65)
Information on our climate-related financial disclosures
(pages 66 to 77)
Information on our principal risks and uncertainties, including
how we manage and mitigate those risks (pages 78 to 86)
For the current and prior reporting years, safety and environment
data is from companies over which the Group has financial
control. Control is determined with reference to the financial
control tests. Control exists where the Group has the power to
unilaterally, directly or indirectly, direct the activities of an entity
as to affect significantly the returns of the entity. This represents
a change over previous years reporting and the comparative
numbers have been restated accordingly.
We engaged Ernst & Young (EY) to provide independent limited
assurance over the 27 ESG KPIs. These are marked with the
symbol Δ in these pages 54 to 65 and on page 13. Of these
assured metrics, a number are associated to climate-related risks
and opportunities. The EY assurance statement can be found
on page 140.
Further information on these can also be found on our website
at www.abf.co.uk/responsibility. Our website provides additional
information and data relating to the commitments, approach,
performance and impact of ABF and our businesses. Our website
also includes previous Responsibility Reports, our Modern
Slavery Statement and our climate, water and forests reports
submitted to Carbon Disclosure Project (CDP).
Our Group ESG governance
All our businesses operate within a clear governance framework
defined by the Group. Our devolved business model gives
businesses autonomy to manage their own ESG impacts, risks
and opportunities within this framework. We adapt our governance
process as required to cover all relevant ESG issues, including
climate change.
The ABF Board (the Board) has oversight and overall
responsibility for ESG across the Group, including climate-related
matters. The Board holds our businesses accountable for their
management of ESG impacts, risks and opportunities, which
includes an annual review of material ESG matters. The Chief
Executive and Finance Director have responsibility for assessing
and managing material ESG matters across the Group, including
in relation to climate change, and reporting this to the Board.
In carrying out its duties the Board is also supported by:
• our Director of Legal Services and Company Secretary, who
reports to the Chief Executive, has responsibility for Group
ESG issues and acts as the focal point for communications
to the Board and shareholders on ESG matters;
• our Chief People and Performance Officer (‘CPPO’) who
reports to the Chief Executive and has responsibility for all
employee matters, including safety, mental health, financial
wellbeing, employee development, workforce engagement
and diversity, equity and inclusion (DEI), the co-ordination
of environmental programmes across our own operations,
how we ensure security for our people and assets as well as
initiatives within central procurement in our supply chains;
• our Group Corporate Responsibility Director who leads the
Group’s Corporate Responsibility Hub team; and
• our Group Financial Controller who leads the Finance
Transformation Team, which is responsible for all social and
environmental data reporting and consolidation at Group level.
The Corporate Responsibility Hub (CR Hub) is a central resource
available to all our businesses, which provides guidance and
support on environmental and social issues. It facilitates a network
that brings together professionals across the Group working in
these areas so that expertise, experience and best practice can
be shared.
From this year, the Finance Transformation team which is part
of the Group Finance team also oversees all non-financial data
reporting, collaborating closely with the CR Hub to ensure timely
and accurate reporting. It coordinates with other finance teams
within the businesses across the Group to ensure robust and
consistent data collection aligned with assurance requirements.
Additionally, dedicated teams covering specific areas such as
DEI, health, safety, environment and procurement, ensure
the businesses have a comprehensive level of support across
ESG matters.
The Board receives regular updates each year on material
ESG matters, including climate-related matters. This year these
included updates on the following:
• strategic decisions taken by the businesses in addressing
climate change and wider ESG issues;
• health and safety performance of our operations;
• environmental performance of our operations;
• employee development, workforce engagement and DEI;
• TCFD requirements;
• our businesses’ continued approach and development
of transition plans;
Associated British Foods plc | 55 | Annual Report 2024
• UK mandatory climate disclosures and which entities are
in scope; and
• the EU Corporate Sustainability Reporting Directive (CSRD).
In addition to these regular updates, in October 2023, two Non-
Executive Directors, Dame Heather Rabbatts and Annie Murphy,
spent time with our Group Corporate Responsibility Director
visiting the Primark Cotton Project in India to see the social and
environmental impacts of the programme.
Since 2022, we have included strategic ESG KPIs in our short-
term incentive plan (STIP) for executive directors. We report
to the Remuneration Committee on progress against these KPIs
three times each year. The measures that applied this year, and
how we assessed progress against them, are disclosed in the
Directors’ Remuneration Report on page 115.
This year, we have further strengthened our governance of
ESG matters by creating an ESG Policy and Reporting Group.
This Group meets regularly and is responsible for overseeing
the ESG reporting strategy, for allocating resource, prioritising
activities, and reviewing Group ESG reporting or policy as
needed. This Group is supported by subject matter experts
(SMEs) across the Group as required.
Responsibility within our businesses
Under ABF’s devolved structure, each of our businesses is
required to understand its material ESG impacts, risks and
opportunities, and is given the independence to put in place the
necessary measures and policies that it believes will effectively
manage such matters.
In addition to individual business leaders, divisional chief
executives are accountable for their businesses taking the
appropriate action in relation to ESG risks, opportunities and
impacts, including assessing, managing and mitigating the
impact of climate change on their businesses.
Across most of our divisions, ESG measures are part of the
personal objectives of the divisional chief executives, with
appropriate KPIs to reflect the nature of their business. In addition,
since the start of this financial year, all Primark directors have
ESG measures for a significant part of their short-term incentive
performance targets.
Divisional management presents quarterly to the Chief Executive
and Finance Director on business performance including relevant
material ESG issues and where appropriate on significant
climate-related matters. They also have other regular touch
points with the Chief Executive where these matters are also
discussed as needed. Additionally, the operating businesses
periodically present significant ESG matters to the Board.
Our governance framework chart
ABF Board
Annual business
reviews
Retail
Grocery
Ingredients
Sugar
Agriculture
Audit
Committee
Risk reviews of
material topics
Our people
People in
our supply
chains
Carbon and
climate
Water
Waste and
packaging
Food safety
and
nutrition
Agriculture
and farming
Material topics
Continuous
oversight and
support
Chief Executive and Finance Director
Director of Legal Services
and Company Secretary
Chief People and
Performance Officer
Group Corporate
Responsibility Director
Group Financial
Controller
Our Group-level policies
We maintain and keep under review a series of Group-level
policies and position statements. Ranging from Health, Safety
and Wellbeing, Environmental, Animal Health and Welfare, and
Board Diversity (which also applies to the Group approach to
DEI) to our Supplier Code of Conduct, our policies and position
statements articulate the Group’s requirements and set
expectations for the actions of our businesses, employees,
suppliers and partners.
It is the responsibility of the chief executive of each business
to ensure that the business is compliant with both relevant
legislation and Group policies.
Our Group policies, position statements and Supplier Code
of Conduct can be accessed online www.abf.co.uk/responsibility
Materiality
In line with our devolved business model, assessing and
prioritising material environmental and social impacts, risks
and opportunities starts with our businesses. This process
builds on their business-level assessments of overall risk and
opportunities, including ESG matters.
At Group-level, we aggregate the material ESG topics and
risks identified by our businesses and incorporate a Group
perspective. This includes considering topics discussed through
stakeholder engagement, including with investors.
RESPONSIBILITY CONTINUED
Associated British Foods plc | 56 | Annual Report 2024
Group priorities
We are clear on our Group priorities, these are:
• human and labour rights in Primark’s supply chain;
• decarbonisation at British Sugar;
• water treatment at AB Mauri;
• employee accommodation and living standards at our sugar
businesses in Africa; and
• understanding our wider Scope 3 GHG emissions across
our businesses.
We will continue to focus on these Group priorities next year
with the additional priority area of human and labour rights in
the Twinings and Ovaltine supply chains. The investment and
programme of work relating to water treatment and effluent
at AB Mauri is almost complete and therefore will be removed
as a Group priority in due course. We expect our individual
businesses to set their own additional priorities as they see fit.
There will always be a need for the Group to be responsive
to new and emerging priorities that may occur at any time.
We will seek to ensure that we are able to respond when there
is something we need to do.
In addition, the topics presented in the table below have been
identified as material for the Group. Most are material for some
or all businesses, however the degree to which each topic
is material for each business varies.
As part of our ongoing review of our material thematic topics
at Group level, we will update the consolidation of topics
as necessary. Our current grouping of material topics
is detailed below:
• our people;
• people in our supply chains and surrounding communities;
• carbon and climate;
• water;
• waste and packaging;
• food safety and nutrition; and
• agriculture and farming practices.
Double materiality and CSRD
With divisions operating across the EU, one of our areas of
focus this year has been preparing for the upcoming disclosure
requirements under CSRD. In 2025/26 some of our European
entities will be required to report under CSRD.
At Group level, we are working to support those businesses
in scope to ensure they are prepared for the requirements
of CSRD. Over the past year we have held briefings and training
sessions to outline the requirements, with a specific focus
on the double materiality assessment, which will inform the
disclosure requirements for each reporting entity.
At Group level, as part of this focus, we have worked closely with
internal and external stakeholders to create guidance to assist
the businesses as they undertake their double materiality
assessments.
This is aligned with the guidance of EFRAG1 and aims to ensure
that the businesses are equipped to conduct their assessments
in compliance with the required standard and that the analysis
is conducted consistently, in preparation for our groupwide
reporting, which will be required in 2028/29.
Group-level
material topics
Impacts on the
business segments
Impacts in the
value chain
Our people
Health, safety
and wellbeing
Diversity, equity
and inclusion
Engagement
and development
People in our supply chains and surrounding communities
Human and labour rights
in our supply chains
Supporting communities
Carbon and climate
GHG emissions
Energy and renewables
Water
Water use
Water treatment
Group-level
material topics
Impacts on the
business segments
Impacts in the
value chain
Waste and packaging
Waste and circularity
Plastic and packaging
Food safety and nutrition
Food safety
Nutrition and health
Agriculture and farming practices
Responsible agriculture
Biodiversity and land use
Animal health and welfare
For more detailed information relating to our activities
during 2024, visit our website.
Learn more online at www.abf.co.uk
These topics span our five business segments and influence various stages of our value chain
Our business segments
Our value chain
Retail
Grocery
Ingredients
Sugar
Agriculture
Supply chains
Operations
Products
Associated British Foods plc | 57 | Annual Report 2024
1. European Financial Reporting Advisory Group.
Our people
We employ more than 138,000 △ people and have operations
in 56 countries across the United Kingdom, Europe, Africa, the
Americas and Asia Pacific. The people across our businesses are
united by our purpose, culture and passion for delivering for our
customers. We empower them to innovate and support them to
grow and develop.
Health, safety and wellbeing
Our businesses strive to safeguard our people when they
are working or travelling for business, including contractors
and visitors to our sites. We have cultures, processes and
programmes to ensure their safety and wellbeing at all times.
Loss of life in our operations is unacceptable and we expect
all colleagues to return home after work as well as when
they arrived. As such, we are deeply saddened to report one△
employee and five△ contractor fatalities this year. An employee
died from drowning in a water canal in Malawi. A contractor
was fatally injured during an off-site weather-related traffic
accident in Brazil. In Tanzania, a contractor driver was fatally
injured by a moving vehicle. In Zambia, a contractor was
electrocuted during electric works and in South Africa, a contractor
was fatally injured during tree felling. In Malawi, a security
contractor died as a result of responding to criminal activity.
Following these tragic events, our priority was to ensure
the families and colleagues of those who died were supported.
Thorough root cause investigations were conducted by the
businesses, and the learnings shared with all our operations.
Remedial actions, including a review of our safety culture
and training expectations with our contractors, have been
implemented to minimise the likelihood of such events
reoccurring.
All of our businesses must comply with our Group Health,
Safety and Wellbeing Policy. Many of them supplement this with
additional local and business specific policies. Responsibility for
ensuring compliance with these policies sits with the chief
executives of the various businesses. Each business also has
a nominated director with specific accountability for health,
safety, and wellbeing.
In line with the Group Policy, our businesses focus their safety
efforts in five key areas:
• providing strong and visible safety leadership from
senior management;
• identifying and managing activities with the highest risk
of fatal and serious injuries;
• supporting line managers accountable for workplace safety
with safety specialists and training approaches;
• actively involving employees in their own health, safety
and wellbeing; and
• reporting against both leading and lagging indicators
and implementing continuous improvement programmes
and activities, taking learnings from other businesses
where relevant.
Across the Group, we have identified the following key on-site
and off-site safety risks:
• harm from moving vehicles;
• falls from height;
• machinery safeguarding;
• the storage and handling of hazardous materials;
• manual handling of heavy and awkward loads;
• working in confined spaces;
• electrical risks; and
• the management of contractors.
The on-site employee Lost Time Injury (LTI) rate has increased
this year from 0.35% in 2023 to 0.38%△. The number of on-site
employee LTIs has also increased by 13% from 347 to 392△.
In Retail there has been an increase of its on-site employee
LTI rate this year by 9% from 0.34% to 0.37%. However, the
LTIs cover a broad range of situations and over 60% of the LTIs
are less severe on average than last year.
The on-site contractor LTI rate this year has increased from
0.32% to 0.34%△ and the number of on-site contractor LTIs
has increased by 20% from 74 to 89△. Our Retail and Sugar
segments made up 81% of these LTIs .
We are pleased to report that 67% of our factories and retail
stores have operated for over a year without an on-site employee
injury. This demonstrates that despite the risks involved in our
activities, such as using powerful machinery or working in
fast-paced environments, safety remains our top priority with
processes and programmes in place to safeguard our people.
The Group’s increase in LTI rate is disappointing; however we
are clear on the details of the issues and action plans have been
put in place to address them. See our website for further details.
The businesses continue to place even more focus on
their safety culture, governance approach and processes to keep
their people safe. The majority of businesses have increased
or improved the number and quality of safety observations,
with additional focus on line manager initiatives to increase their
involvement and direct ownership. All businesses have improved
their reporting of near misses and have placed increasing focus
on reporting and investigating significant events linked to
our critical risks.
Supporting our people’s mental health and their sense of
general wellbeing is evermore important. We continue to invest
in support across the Group, including programmes designed
to raise awareness and provide practical assistance across all
areas of wellbeing, including financial. Our businesses provide
wellbeing tools and resources across our operations. The website
provides further detail on initiatives undertaken across all our
businesses. We are pleased to be recognised by the CCLA
Corporate Mental Health Benchmark UK 100 as tier 2 for the
support we provide to our people in this area.
Lost Time Injuries and Lost Time Injury rate (%)
403
346
353
347
392△
0.42%
0.38%
0.36%
0.35%
0.38%△
'20
'21
'22
'23
'24
RESPONSIBILITY CONTINUED
Associated British Foods plc | 58 | Annual Report 2024
Group priority
Employee accommodation and living standards
at our sugar businesses in Africa
Our sugar businesses in Africa have sugar estates that are
situated in rural and remote areas, creating a need to provide
accommodation for many employees and their families.
Each operation has a comprehensive plan to continuously
invest in its accommodation infrastructure.
In 2024, ABF Sugar began a review of the housing and living
conditions across its sugar estates in Zambia, Malawi, Eswatini,
South Africa, and Tanzania. The findings of the review have
formed the basis for the new ABF Sugar Housing and Living
Standards Programme. The programme aims to enhance
decent and safe living conditions for employees living on the
estates. Each country team has developed an updated set
of minimum standards covering various aspects, including
occupancy level, number of rooms per household and
provision of amenities such as washing and cooking facilities.
The programme is divided into three streams of work:
• immediate actions to address outstanding maintenance
and repairs which will be completed in 2024/25. In 2023/24,
renovations to approximately 150 houses for employees
and their families have been completed at the Nchalo
estate in Malawi;
• ensuring all entry level estate houses meet updated
minimum standards, with completion expected by 2029
across more than 4,000 houses; and
• investigating future housing options for employees
aiming to support the evolving needs and expectations
of the workforce.
Diversity, equity and inclusion (DEI)
We believe that engaging diverse talent is a competitive
advantage and strengthens the Group’s ability to deliver long-
term success. Our businesses are dedicated to ensuring we
attract and develop diverse talent and establishing meaningful
connections with the varied communities we serve.
Our Board Diversity Policy details our approach for all our
businesses in the Group and is often enhanced by local
diversity policies, DEI teams and dedicated programmes.
These initiatives aim to support every employee, including
women, ethnic minorities, individuals with disabilities, and
members of the LGBTQIA+ community, ensuring equitable
access to employment, training, career development and
promotion opportunities.
Our Group DEI Network brings together people from across
our businesses to share knowledge, best practices and ideas,
celebrating diversity in all its forms. We have almost 500 DEI
advocates across the Group, and provide access to training and
thought leadership from expert external partners across the full
range of DEI topics to support them including allyship, handling
difficult conversations, neurodiversity inclusion, disability
inclusion, racial and ethnic diversity and anti-racism, female
careers and leadership, gender identity and LGBTQIA+ inclusion.
We empower and equip our leaders and line managers with the
skills needed to create inclusive cultures in their businesses and
local settings. We also provide unconscious bias training, cultural
awareness programmes, and a range of tools to support our
businesses in promoting inclusivity.
For almost 15 years our ‘Women in ABF’ network, has helped
women develop skills, business awareness and build
connections that enhance their current performance and future
careers prospects. Women across the Group have access
to virtual events featuring both internal and external speakers
as well as valuable networking opportunities.
We continue to prioritise attracting and developing a broader
range of talent, maintaining our focus on gender and ethnicity
imbalances through identifying and removing barriers that could
discourage talent from being attracted to or joining ABF, or from
advancing to leadership positions.
Overall the gender balance of the Group is fairly equal, with
women making up 57%△ of our total global workforce,
increased from 53% in 2019/20. Women also account for an
increasing number of our senior management roles, currently
at 39% across the Group.
Considering the most senior levels to be those reporting to the
divisional chief executives and Group functional directors, our
gender balance as reported to the FTSE Women Leaders has
improved to 30% from 28% last year and 22% in 2019/20. It is
pleasing to see the outcome from the focus we have given to
addressing gender imbalances. We commit to a continued focus
on ensuring women are represented in our most senior roles.
Our leadership teams are increasingly multicultural and ethnically
diverse, with 30 nationalities in our leadership group reporting to
the divisional chief executives, business managing directors and
group functional directors. We are pleased with the progress that
we are making on ethnic diversity in this most senior population.
Globally, 14.5% of these roles are held by leaders from minority
ethnic backgrounds based on UK definitions, up from 12.4% last
year. In the UK, while those of minority ethnic backgrounds are
under-represented in our most senior leadership positions, we
are pleased to have increased their representation from just over
8% in 2023 to just over 9% this year. We commit to a continued
focus on ensuring women and those from ethnic minorities are
represented in our most senior roles.
Associated British Foods plc | 59 | Annual Report 2024
We voluntarily report on our overall gender pay gap for
employees in Great Britain (GB) on page 121. Each of our
GB-based businesses with over 250 employees also reports
on its own gender pay gap, with these reports published
on their websites.
These reports share some inspirational business-level insights
about the actions being taken to enable all employees to
successfully grow their careers with us.
For more information on this topic see
www.abf.co.uk/responsibility.
Number of employees, highlighting percentage of women
in the workforce
(%)
133,425
127,912
132,273
133,487
138,271△
53%
53%
54%
55%
57%△
'20
'21
'22
'23
'24
Gender metrics
Total
employees¹
Men in
workforce
Women in
workforce
Percentage of
workforce
who are
women
Number of
senior
management
roles²
Number of
men in senior
management
roles
Number of
women in
senior
management
roles
Percentage of
senior
management
who are
women
Retail
82,123
18,646
63,477
77 %
268
143
125
47 %
Grocery
16,692
10,713
5,979
36 %
841
496
345
41 %
Ingredients
6,699
4,837
1,862
28 %
670
443
227
34 %
Sugar
28,679
22,748
5,931
21 %
246
166
80
33 %
Agriculture
3,446
2,208
1,238
36 %
455
259
196
43 %
Central
632
378
254
40 %
82
60
22
27 %
Total
138,271 △
59,530
78,741
57 %△
2,562
1,567
995
39 %
Board directors are not included in the table above. As at 14 September 2024 we had four women and five men on the Board, but
this has increased to five women and five men on 1 October 2024. The Board is pleased that our composition continues to meet
the recommendations of the Parker Review and the recommendations of the FTSE Women Leaders Review as well as the targets
on gender and ethnic diversity in the UK Listing Rules.
1. Full-time, part-time and seasonal/contractors.
2. Includes directorships of subsidiary undertakings.
See our website for definitions.
Engagement and development
We believe the engagement and development of our people is
directly linked to the performance and long-term sustainability of
our businesses. A highly engaged workforce drives productivity,
innovation, and operational excellence, while robust development
programmes ensure we have the talent pipeline necessary to
meet future challenges. By investing in our people, we foster
a culture of continuous improvement, which translates into
stronger financial outcomes, enhanced customer satisfaction,
and a competitive edge.
We prioritise open communication within our businesses,
offering multiple channels for employees to share their views
and engage in two-way dialogue. Alongside direct conversations
with managers and leaders, we use engagement surveys,
discussion groups, and digital forums to foster feedback.
In his role as Independent Non-Executive Director for workforce
engagement, Richard Reid provides assurance to the Board that
our businesses have cultures of openness, that our people can
share their views, and have their voices heard and acted upon.
Read more about workforce engagement on pages 95 and 96.
We are dedicated to attracting and nurturing talent, creating
space for professional and personal growth. Our businesses
encourage their people to leverage their unique skills and diverse
abilities through development opportunities, that equip our
people with the skills to excel in their current roles and develop
their careers within their business or across the Group.
Our businesses encourage employee involvement in their
performance, with many offering incentives to employees based
on the performance of the business where they work.
We have multiple development programmes across the Group.
For details on these, please visit our website.
RESPONSIBILITY CONTINUED
Associated British Foods plc | 60 | Annual Report 2024
Speak Up
We are committed to always acting with integrity. We proudly
promote and protect a culture of trust, fairness and accountability.
Our Speak Up Policy empowers our people to raise a grievance
or tell us whenever they encounter anything inappropriate,
improper, dishonest, illegal or dangerous and ensures that
their concerns will be handled confidentially and professionally.
Speak Up includes both a telephone line and a web reporting
platform, managed by an independent provider.
We encourage all individuals working for the Group, in any of our
businesses, in any country and in any capacity, to use Speak Up,
including employees at all levels, directors, officers, part-time
and fixed-term workers, casual and agency workers, seconded
workers and volunteers. Speak Up also enables issues to be
raised by third parties.
In the year to 30 June 2024, 276 notifications were received,
of which:
• 20% were resolved, with outcomes ranging from reviews
of processes and support for individual employees to,
where necessary, disciplinary procedures being followed;
• 52% were investigated as appropriate and required no action;
and
• 28% remain under investigation.
A copy of the ABF Speak Up Policy is available on our website.
Anti-Bribery and Corruption Policy
Our approach to governance is to respect not simply the letter,
but also the spirit, of our Anti-Bribery and Corruption Policy and
always act with integrity. To ensure the effective implementation
of our policy and procedures, each business has its own
designated Anti-Bribery and Corruption Officer and we have
monitoring systems in place at various levels within the Group
including global risk assessments. In addition, all relevant
employees are required to complete an e-learning course on the
subject when they join the Group and at regular intervals
thereafter, and those who work in higher-risk roles are required
to attend regular face-to-face training.
A copy of the policy is available online.
People in our supply chains and surrounding
communities
Group approach to human and labour rights
Our businesses work with a diverse range of suppliers from
large businesses to smallholder farmers. They recognise the
importance of the United Nations Guiding Principles on Business
and Human Rights (UNGPs) and their guidance on human rights
due diligence processes.
Our Group Supplier Code of Conduct is an essential requirement
of the responsible business conduct of our businesses.
This Code is based on the core conventions of the International
Labour Organization (ILO) and on the Base Code of the Ethical
Trading Initiative.
In their application of the Group Supplier Code of Conduct, our
businesses continue to develop and improve human rights due
diligence processes. Some of them are guided by the UNGPs,
the Organisation for Economic Co-operation and Development
(OECD) Due Diligence Guidance for Responsible Business
Conduct, and the ILO Decent Work Agenda.
Our devolved business model enables each of our businesses
to adopt tailored risk-based approaches based on their specific
supply chains and the nature of their supplier relationships.
Assessing where potential negative human rights impacts might
exist, combined with supply chain mapping, helps some of our
businesses to identify, monitor and where they can address
actual issues, to seek remedies, or even anticipate and prevent
issues before they arise, prioritising those that are most salient.
Group priority
Human and labour rights in Primark’s
supply chain
Primark does not own any factories. Given the scale and
complexity of Primark’s supply chain, human rights are
particularly material for the Group, making robust due
diligence practices essential. Primark’s Ethical Trade
and Environmental Sustainability (ETES) programme is one
of the key elements of how human rights due diligence
is implemented in its product supply chains. Through this
programme, Primark conducted over 2,000 social audits over
the last year. Primark carries the full cost of these audits,
which include rigorous checks for human rights issues and
against the requirements of the Primark Supplier Code of
Conduct, based on first-hand assessment of the working
environment, reviews of relevant documentation and
confidential worker interviews. At the end of each audit,
supplier factories are issued with a time-bound corrective action
plan that outlines any areas for improvement. Primark uses
these audits in the approval process for all new tier one
factories. Any potential new factories are audited and only if the
outcome of the audit is satisfactory can any orders be placed.
Primark’s ETES team has over 130 people based in its 10
key sourcing markets. The team works across all aspects
of human rights due diligence, from strategy and risk
assessment to supporting suppliers and their factories in
implementing the Supplier Code of Conduct. Where inherent
risks and more systemic issues are identified, Primark’s
Social Impact team works with suppliers and their factories,
as well as partners and other brands, to address these issues
through longer-term solutions and projects.
Associated British Foods plc | 61 | Annual Report 2024
Carbon and climate
As a Group, we have an ambition to achieve net zero by 2050
or sooner. Beyond that broad ambition, we do not set groupwide
climate-related plans or commitments. In line with our devolved
business model, our businesses set plans and commitments
appropriate to their operations and supply chains regarding
Scope 1 and Scope 2 greenhouse gas (GHG) emissions, and
several of our businesses have set their own GHG emissions
reduction commitments.
ABF Sugar and Primark each have specific public commitments
for reducing their GHG emissions. The reduction targets for ABF
Sugar and Primark have been validated by the Science Based
Targets initiative (SBTi), ensuring they align with the latest
climate science. This year Primark and ABF Sugar have also
published transition plans detailing their strategies for achieving
these goals. Achieving net zero across the Group will depend on
a number of factors that are beyond our control, however, we
will do our upmost to deliver on this objective in our operations.
Energy and renewables
We remain focused on energy efficiency and transitioning
to renewable energy where viable. This year our businesses
consumed 20,697△ gigawatt hours (GWh) of energy in our
operations, which is a 2% decrease compared with last year.
Of this total energy, 57%△ was derived from renewable sources,
predominantly biomass fuels from by-products generated as part
of the production process within our agricultural businesses.
This year 31% of the electricity we bought came from
renewable sources, with the majority coming from the UK and
European renewable energy markets.
Several of our businesses also export surplus renewable energy
back into national grids. During 2024, 887 GWh of renewable
energy generated by our sites was exported, with ABF Sugar
contributing 96%. Of the renewable energy we generate, 87%
comes from bagasse, the plant-based fibre that remains after the
extraction of juice from the crushed stalks of sugar cane. Some
renewable energy is also derived from the anaerobic digestion
of a range of waste materials.
For more examples of energy efficiency actions, see
www.abf.co.uk/responsibility.
Total energy consumed highlighting percentage from
a renewable source
(GWh)
22,329
21,524
20,603
21,129
20,697△
56%
55%
55%
58%
57%△
'20
'21
'22
'23
'24
Scope 1 and 2 GHG emissions
Our Scope 1 and 2 (location-based) GHG emissions increased
by 1% this year from 2,834 kt of CO2e to 2,868 kt of CO2e.
Unless otherwise stated, Scope 2 GHG emissions are
location-based figures.
Our Sugar segment is the most significant contributor of Scope
1 and 2 emissions within the Group at 72%. As a result this has
been a priority for the Group over many years.
Sugar’s Scope 1 and 2 emissions had an increase of 5% this
year. The drivers for the increase are as a result of Vivergo (our
bio-ethanol plant) returning to near full operating capacity, British
Sugar contending with the operational challenges due to difficult
wet weather conditions and Azucarera processing more sugar
beet. Despite the short-term increase, Sugar has reduced its
Scope 1 and 2 emissions by 18% against its 2018 baseline
by continuously improving how efficiently it produces sugar,
investing in new technology, innovating to use less energy and
reducing its use of fossil fuels.
Our Retail, Grocery, Ingredients and Agriculture segments have
reduced their Scope 1 and 2 emissions compared with last year
which has been driven by decreases in imported electricity,
changes to the fuels used as well as investment in on-site
renewable generation and purchased power and in more
efficient equipment which reduces overall energy use.
Group priority
British Sugar decarbonising its operations
British Sugar, the largest contributor to the Group’s Scope 1
GHG emissions at 36%, has made significant investment
across its sites to reduce GHG emissions. From the 2018
baseline through to 2023/24, British Sugar invested
approximately £96 million in various initiatives, resulting
in a cumulative reduction of around 162 kt of CO2e.
Key initiatives include the energy reduction scheme at the
Wissington site, which targets a 25% reduction in steam
usage, and ongoing improvements in pulp pressing processes
across multiple sites. Additionally, British Sugar is improving
factory performance and efficiency by upgrading heaters,
evaporators, and dryers to save energy and reduce coal and
gas consumption. These efforts have contributed
substantially to lowering Scope 1 emissions.
Looking ahead, British Sugar plans to further its
decarbonisation strategy with major projects, such as the
implementation of a new modular gas-fired Combined Heat
and Power (CHP) plant at its Cantley site, expected to be fully
operational by 2025.
RESPONSIBILITY CONTINUED
Associated British Foods plc | 62 | Annual Report 2024
Group priority
Scope 3 GHG emissions
Understanding our total Group GHG emissions will be an
important step towards achieving our ambition to meet
net zero by 2050. At a Group level, we are supporting the
divisions in the process of calculating their material Scope 3
GHG emissions, which will help us identify where to focus
our priorities. Most of our divisions have either published or
are in the process of calculating their Scope 3 GHG emissions
from across their value chains.
Primark first completed this process in 2021 and this year
reported 6,211kt of CO2e for its Scope 3 emissions, which
is a 12% decrease compared with 2023. This represents
a 0.6% decrease against its 2018/19 baseline, despite the
significant increase in volumes. This reduction was achieved
through investments in its Environmental Sustainability team
and in supplier factory efficiency programmes aimed at
supporting GHG emission reductions through targeted
training, upskilling, and energy-saving projects.
For more information on this topic see
www.abf.co.uk/responsibility.
Scope 1 and 2 (location based) GHG emissions by segment
(000 tonnes CO2e and % of Group total)
l Retail
109
(4 %)
l Sugar
2,072 (72 %)
l Grocery
370 (13 %)
l Agriculture
59
(2 %)
l Ingredients
258
(9 %)
Scope 1 and 2 (location-based) GHG emissions
(000 tonnes CO2e)
3,313
3,004
2,970
2,834
2,868
'20
'21
'22
'23
'24
Streamlined energy and carbon reporting
2023
2024
UK only
Non-UK
Total
UK only
Non-UK
Total
Scope 1: 000 tonnes of CO2e
1,039
1,164
2,203
1,218
1,035 2,253 △
Scope 2 location-based method: 000 tonnes of CO2e
158
472
631
179
436
615 △
Scope 2 market-based method: 000 tonnes of CO2e
174
444
618
190
379
569 △
Total Scopes 1 and 2 location-based method: 000 tonnes of CO2e
1,197
1,637
2,834
1,397
1,470 2,868
Scope 3 – Primark’s Scope 3 emissions: 000 tonnes of CO2e
7,019
6,211
Biogenic carbon emissions: 000 tonnes of CO2e
108
4,080
4,188
142
3,903 4,045 △
Intensity ratio: Scopes 1 and 2 emissions per £1m revenue Scopes 1
and 2 location-based method: tonnes CO2e/£1m
143
143
Energy consumed: GWh
5,008
16,121
21,129
5,653
15,045 20,697 △
We calculate and disclose our Scope 1 and 2 GHG emissions
based on the WRI/WBCSD GHG Protocol Corporate Accounting
and Reporting Standard Revised Edition. We use carbon emission
factors published by the UK Government in June 2023, other
internationally recognised sources and bespoke factors based
on laboratory calculations at selected locations. Scope 2 market-
based emissions have been calculated in accordance with the
GHG Protocol Scope 2 Guidance on procured renewable energy.
Energy consumption is calculated using country-specific
conversion factors from physical quantities to kWh to provide
an accurate representation of our energy consumption.
The Group data in this report on our environmental and safety
KPIs covered the period 1 August to 31 July. This excludes
Primark selling space, number of countries of operation and
employee numbers.
This is different from the period in respect of which the
Directors’ Report is prepared. Where indicated the information
for this period is externally assured and allows for like-for-like
comparison with previous years.
Associated British Foods plc | 63 | Annual Report 2024
Water
Our businesses aim to reduce the amount of water they abstract
for their own operations, reuse process water as much as possible,
and return treated waste water to nature after ensuring it meets
or exceeds local and national water regulations and standards.
This year, businesses across the Group collectively abstracted
880△ million m3 of water for use in its operations, a 2% increase
compared with last year. While this aligns with the increase
in production tonnage, the main driver was increased irrigation
demand due to drought impacting our sugar businesses in
Africa. The total water use of these businesses accounts for
97% of the Group’s total water use.
Of the water used by our businesses, 97% comes from surface
water, such as rivers and lakes, as well as man-made dams.
Our businesses’ sites are regulated by water permits or licences,
and they withdraw water within their agreed limits.
This year, across the Group, 24% of the water abstracted was
reused before being returned to the environment. This is both
a cost and resource efficient way of managing water. Our sites
reuse the water for irrigation, land spreading, cleaning
machinery, and horticultural purposes.
Total water abstracted in own operations
(million m3)
842
859
792
859
880△
'20
'21
'22
'23
'24
Group priority
Waste water treatment at AB Mauri
Waste water treatment at AB Mauri is a priority for the Group.
The business carefully assesses water risks affecting each of
its sites, and manages any water returned to the environment
as safely as possible and to meet legal requirements.
To support this approach, AB Mauri has built significant
in-house capability in water use and waste water
management. Since 2010, it has invested $120m in waste
water treatment. Many of its production facilities have
complex on-site effluent treatment plants that include
biological processes, evaporators and reverse osmosis
membrane systems that can produce reusable water and
useful co-products. The selection of technologies addresses
the local aquatic sensitivities and water quality objectives.
As a minimum, sites equalise their flow so as not to disrupt
any downstream municipal processes.
The proportion of water used that is treated and returned
safely to the environment, is up from 74% in 2019 to 84%
in 2024.
For more information on this topic see
www.abf.co.uk/responsibility.
Waste and packaging
Waste and circularity
We have a long history of finding ways to make more from less
and maximise the use of by-products and co-products from our
operations. We believe that waste materials are simply products
for which we have not yet found a use. With that in mind, our
businesses are implementing practices to reuse, recycle or
reduce food, plastic and textile waste.
Our businesses produce many commercially viable products
from sources potentially considered waste. For example,
our sugar businesses have become a major supplier of raw
materials for animal feed, an important feedstock source for
many different sectors, and is a supplier of raffinate and betaine
for use in the petrochemical and pharmaceutical sectors.
Our food and ingredients businesses are highly efficient, and
aim to avoid products going to waste by donating surpluses
to food banks, community groups and charities. Once no longer
fit for human consumption, food waste is used as animal feed
or in energy generation.
Across the Group, we generated 609kt of waste in 2024 which
is a 19% increase compared with the 510kt tonnes generated
in 2023. This increase is primarily due to our sugar business
in Spain operating longer campaigns and processing larger
quantities of sugar beet, as well as management of settlement
ponds to maintain efficient operations. The soil from the
settlement ponds is sent off-site for agricultural purposes
as fertiliser and soil conditioning.
Of the total waste generated by the Group, 87% was sent for
recycling or other beneficial use.
Total waste generated and percentage sent for recycling
in our own operations
(000 tonnes)
574
560
575
510
609
84%
79%
84%
83%
87%
'20
'21
'22
'23
'24
RESPONSIBILITY CONTINUED
Associated British Foods plc | 64 | Annual Report 2024
Plastic and packaging
As a leading provider of food, ingredients and clothing, packaging
contributes significantly to our groupwide environmental
footprint. Paper is the main packaging material used across the
Group, followed by plastic and glass. Our businesses also use
wood, steel, aluminium and a number of other materials.
Though we fully recognise the harmful effects of plastic waste
on ecosystems, plastic currently plays a vital role in both
ensuring the safety and quality of products and reducing food
waste by extending the shelf life of food. Our challenge is to use
plastic materials responsibly and find solutions that balance the
needs of our customers and our desire to reduce the impact of
plastics on ecosystems. Where viable, our businesses are doing
this by removing unnecessary packaging, switching to more
easily recyclable types of plastic and increasing the use of
recycled content in the plastics we use.
Our businesses also demonstrate their commitment to
tackling plastic and packaging challenges by involvement with
and support for a number of collaborative industry pacts and
programmes, including the WRAP UK Plastics Pact and the Soft
Plastic Recycling Scheme in New Zealand.
In 2024, our businesses used 241 kt△ of packaging compared
with 246 kt used in 2023, marking a 2% decrease year-on-year.
For more information on this topic see
www.abf.co.uk/responsibility.
Quantity of packaging used
(000 tonnes)
242
229
265
246
241△
'20
'21
'22
'23
'24
Food safety and nutrition
Our businesses are united by our purpose to provide safe,
nutritious and affordable food. Our food and drink businesses
operate quality management systems based on the WHO Codex
Alimentarius Hazard Analysis Critical Control Point (HACCP)
principles and the Global Food Safety Initiative (GFSI) range
of standards, with most retailer-facing businesses required to
seek formal GFSI certification, typically via unannounced audit
schemes. Additionally, each division, as a minimum, sets and
monitors a range of KPIs for each of its sites, including in relation
to recalls and withdrawals, incidents and complaints.
Relevant businesses take nutritional factors into account
across their product portfolio. Many of our food products already
support healthier choices – from high-fibre breakfast cereals,
wholemeal bread and crispbreads to specialist sports nutrition
products. Product reformulation can also help to gradually shift
consumer tastes towards foods that support better long-term
nutrition, and our food businesses actively review their portfolios
with this in mind.
For more information on this topic see
www.abf.co.uk/responsibility.
Agriculture and farming practices
Our businesses depend on agricultural systems for the majority
of the raw materials and ingredients used in our products. Global
supply chains need to move towards sustainable farming and
crop production, and not just sustainable land use, in order
to meet a growing population’s need for food and clothing.
We therefore recognise the need to support more sustainable
farm management practices and address the most material
biodiversity-related impacts, risks and opportunities.
We have a strong association with the UK agricultural sector.
Globally, we are a significant purchaser of cotton, sugar beet,
sugar cane, tea and cereals.
We expect our businesses to go further than legal compliance
by continuously considering and implementing activities,
voluntary commitments and internationally recognised
management systems to reduce their environmental and
social impacts and risks.
This encompasses the responsible stewardship of our
environment in line with the following requirements
as a minimum:
• Group Environment Policy;
• Group Animal Health and Welfare Position Statement; and
• Group Supplier Code of Conduct.
Our businesses support a wide range of social and
environmental interventions at the agricultural and farm level.
These involve a number of farm management models, including
certified organic production, standards to promote wildlife
biodiversity, engagement with smallholder growers in developing
markets, and adoption of farm management systems built on
driving more sustainable farm productivity.
For more information on this topic see
www.abf.co.uk/responsibility.
Associated British Foods plc | 65 | Annual Report 2024
We are steadfast in our commitment to taking
action and our approach is aligned with the
goals of the 2015 Paris Climate Agreement
to limit the rise in global temperatures to well
below 2°C above pre-industrial levels, and to
pursue efforts to limit the temperature increase
even further to 1.5°C.
This year within our Climate-related Financial Disclosures,
we highlight the work that our businesses are undertaking
to address risks and embrace opportunities. The risks and
opportunities identified previously are still relevant, and the
actions identified within last year’s transition plans are ongoing
and evolving.
Climate-related commitments continue to be defined by our
businesses based on their material risks and what is relevant
and realistic for them.
Some of our material businesses have had emission reduction
commitments validated and approved by the Science Based
Targets initiative (‘SBTi’).
Other Group businesses have identified their own emission
reduction targets or are in the process of doing so. Further
information can be found on our website.
Our material businesses continue to be ABF Sugar, Primark
and Twinings, within Grocery. These businesses comprise
77% of Group adjusted operating profit (2023 – 77%) and
77% of Scope 1 and 2 GHG emissions. Primark is the primary
contributor of our reported Scope 3 emissions. Scope 3
emissions account for 96% (2023 – 98%) of Primark’s total
GHG emissions. See pages 62 to 63 for the detailed disclosure.
The Group considers that it has included climate-related financial
disclosures that are consistent with the TCFD recommendations
and recommended disclosures, and that comply with the
requirements under section 414CB(2A) of the Companies Act
2006.
TCFD disclosure index
TCFD Pillar
TCFD recommendation
Reference
Governance
A) Describe the board’s oversight of climate-related risks and opportunities.
page 55
B) Describe management’s role in assessing and managing climate-related risks
and opportunities.
pages 55 to 56
Strategy
A) Describe the climate-related risks and opportunities the organisation has
identified over the short, medium and long term.
pages 68 to 70
B) Describe the impact of climate-related risks and opportunities on the
organisation’s businesses, strategy and financial planning.
pages 67 to 70
C) Describe the resilience of the organisation’s strategy, taking into consideration
different climate-related scenarios, including 2°C or lower scenario.
page 67
Risk Management
A) Describe the organisation’s process for identifying and assessing climate risk.
page 67
B) Describe the organisation’s processes for managing climate-related risks.
page 67
C) Describe how processes for identifying, assessing, and managing climate-
related risks are integrated into the organisation’s overall risk management.
page 67
Metrics and Targets
A) Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process.
pages 68 to 77
B) Disclose scope 1, 2 and, if appropriate, scope 3 greenhouse gas emissions
and the related risks.
page 63
C) Describe the targets used by the organisation to manage climate-related risks
and opportunities and performance against targets.
pages 68 to 77
Governance
The Board has continued to make strategic decisions regarding
our approach to climate change. Some of these decisions include
the evolution of ABF Sugar and Primark transition plans and
continued work with our businesses and SBTi validation process.
In 2023 we stated our intention to publish Twinings’ transition
plan in the 2024 TCFD statement. Since then, Twinings has
been working on gathering the data needed to assess Scope 3
emissions and to set a baseline against which the business can
measure and report progress.
This work is progressing, but we have deferred publication
of its baseline and transition plan until the GHG emission
reduction targets have been submitted and validated by SBTi.
The Board possesses sufficient competencies to lead the
Group in responding to climate-related risks and opportunities.
Please refer to pages 90 to 91 for details of the Board.
CLIMATE-RELATED FINANCIAL DISCLOSURES (‘TCFD’)
Climate-related Financial Disclosures
(‘TCFD’)
Associated British Foods plc | 66 | Annual Report 2024
Risk management
Climate-related considerations are included in a number of
processes affecting our financial statements. These include
going concern assumptions, impairment assessments, capital
expenditure and acquisition considerations.
Identifying, assessing and managing climate-related risks
and opportunities
Identifying, assessing and managing ESG risks, including climate-
related risks and opportunities, resides with the business where
the risk or opportunity sits. This is the same process for all other
business risks. Annually, climate-related risks are collated and
reviewed at the individual business and divisional level, which
includes existing and emerging regulatory requirements.
During the year, we held sessions with every division reviewing
current identified risks and opportunities questioning whether
they are still appropriate and also to identify any new risks or
opportunities. In light of these sessions, we have determined
that the current scenario analysis still remains appropriate for the
current year. However, this has identified areas of future focus.
We considered the results of the risk refresh exercise conducted
this year and concluded that in aggregate, there continued to be no
material risks or opportunities. However, we note the prevalence
of heat stress on workers within our businesses. This will be
a focus of the Group and affected divisions in the coming year.
Where risks or opportunities were identified but not deemed
material for the Group, the businesses will incorporate these into
their risk registers and their wider ESG strategies as appropriate.
Climate risks and opportunities
Output from the risks
and opportunities assessment
process
Primark
Sugar
Twinings
Cross-divisional
Climate impact on the
Group’s key
agricultural crops
Physical risks
Cotton yields*
Sugar yields (UK,
Eswatini, Malawi,
South Africa,
Tanzania, Zambia)
Tea yields (Argentina,
China, India,
Indonesia, Kenya,
Sri Lanka)
Wheat yields
(Australia, UK)
Corn yields (US)
Impact of flooding
on the Group’s end-to-
end supply chain
including operations
Coastal and river
flood risks: third-party
manufacturers
(Bangladesh, China)
and Primark stores
and warehouses
Malawi
Coastal and river
flood risks: key Group
manufacturing sites
Heat stress
Heat stress impact
on farmers
Resilience of workers
to mitigate or adapt to
climate change
Heat impact on
farmers (Bangladesh,
India, Pakistan)
Transition risks as the
world reduces its
reliance on carbon
Transition
risks
Carbon pricing
mechanisms
Carbon pricing
mechanisms
Carbon enablement:
providing solutions to
reduce carbon
Opportunities
Biofuels, renewable
energy
Enzymes, animal
feeds, ingredients,
on-farm carbon
measurement
Efficiency
Fuel substitution,
energy efficiency,
process optimisation
and increased
contribution from by-
products
* The focus of the cotton yield analysis was on the Primark Cotton Project locations in India and Pakistan.
Scenario analysis and strategic decisions
This year’s risk refresh process and our existing risk process has
confirmed that the scenarios previously assessed remain
appropriate and no further update is required at this stage. This
means that our businesses’ actions to tackle risks and embrace
opportunities remain relevant and the businesses will continue to
evolve these strategies. The results of this and current mitigating
actions demonstrate that our business is resilient to climate-
related risks and opportunities.
Financial planning
Each business has developed their own plans which detail
strategic actions through which they are planning to achieve their
carbon reduction targets. These focus on areas that will have
the largest or most material impact. They will be embedded
in budgets and long-term plans and translate to a balance sheet
and income statement impact. Disclosing the individual amounts
of these plans would not provide meaningful information for
investors as they are part of the overall business and capital plans.
Associated British Foods plc | 67 | Annual Report 2024
Risks and opportunities have been considered over the following
time horizons:
Years
Rationale
Short term
2025 Mid-decade
Medium term 2030 Our most material businesses, ABF
Sugar, Primark and Twinings have set
2030 emission commitments, which are
supported by emission reduction plans
Long term
2050 2050 is consistent with many national and
industry targets. Primark is aligned with
the UNFCCC Fashion Industry Charter
goal of net zero emissions across all three
Scopes by 2050
When assessing our mitigating factors, we have considered
several factors:
1. Greater reliance is placed on actions already underway and
where we have seen evidence of the success of those
actions, for example, the benefits seen by smallholder farmers
in Primark’s Cotton Project.
2. Physical risks from a changing climate are already present,
growing and being managed by our businesses. In many cases,
risks may worsen but there is time to adapt to their impacts.
Impact
assessment
Description
Low
Projected impacts from scenario analysis
are positive or not significant
Medium
Impacts judged not to be significant once
mitigating actions are considered
High
Impacts judged to be significant even after
mitigating actions have been considered
Climate models still have several fixed assumptions and there
is some uncertainty around the impacts of climate change and
how governments will respond.
Some of the below metrics have been assured by Ernst & Young.
These are marked with Δ.
Results of the climate-related risks and
opportunities assessment
Given no update to our scenario analysis was required, all
physical and transition risks in the table on page 67 are still
relevant. We disclose below the risks we believe have the
potential to be the most financially significant and/or of the most
interest to stakeholders:
Climate impact on cotton yields
2023 assessment
Low
2030
Medium
2050
Scenarios assessed
2022 RCP2.6 and RCP8.5 / 2024 No update required.
Assessment
The outcomes to 2030 show that effects of climate risks such
as extreme temperatures, heavy rainfall and timing/duration of
monsoon season range from virtually no impact to a reduction
of approximately 4% under RCP8.5.
The outcomes to 2050 project a negative impact on yield
of 14% under RCP8.5 and 4% under RCP2.6 before
mitigating actions.
Mitigation
• Farmers in our Primark Cotton Project (formerly the Primark
Sustainable Cotton Programme) are trained in farming
methods aimed at increasing cotton yields and reducing
inputs including water use, chemical pesticide and fertiliser
use, with the goal of helping to address the environmental
impacts of growing cotton.
• Primark is working with its implementation partner to further
develop the impact performance indicators and farmer
reporting processes of the Primark Cotton Project, allowing
for enhanced disclosure in future reports.
• Primark has developed a cotton sourcing strategy in order
to achieve its commitment that all cotton in Primark clothing
will be organic, recycled or sourced from the Primark Cotton
Project. Part of this strategy is to diversify the sourcing
regions of cotton, which can help to mitigate potential
climate-related impacts on cotton availability and supply.
2024 update
Metrics and targets
• Percentage of Primark’s cotton clothing units sold containing
cotton that is organic, recycled or from the Primark Cotton
Project: 100% by 2027. 57%△ (2023 – 46%)
• Number of farmers trained in the Primark Cotton Project.
We have achieved our target number of farmers trained.
The total number of farmers to date is 309,394△
Please refer to corporate.primark/en-gb/primark-cares/
resources/reports for Primark’s basis of reporting for each metric.
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Impact assessment
Associated British Foods plc | 68 | Annual Report 2024
Impact of climate on sugar yields in Africa
(Malawi, South Africa, Tanzania and Zambia)
2023 assessment
Low
2030
Medium
2050
Scenarios assessed
2022 RCP2.6 and RCP8.5 / 2024 No update required.
Assessment
Climate impact on sugar yields varies country by country.
The outcomes to 2030 under the USDA’s EPIC crop model
indicate a range from no change to a decline of 10%.
The outcomes to 2050 indicate a 5% gain to a 29% decline.
Mitigation
• Our African sugar businesses already experience and
manage significant climate variability, so their responses
to weather events are well developed.
• We are improving irrigation efficiency and overall farming
methods to mitigate the risk of drought, including investing
in drip irrigation and river defences to reduce storm damage.
2024 update
Metrics and targets
• Sugar production (tonnes): 3,200kt (2023 – 2,800kt)
• ABF Sugar has a target to reduce its end-to-end supply chain
water usage by 30% by 2030. Water usage has increased
by 6.7% this year.
Climate impact on tea yields
2023 assessment
Low
2030
Low
2050
Scenarios assessed
2022 RCP8.5 / 2024 No update required.
Assessment
The outcomes through 2030 and 2050 show a positive
impact on tea yields. However, the crop model has limited
representation of acute weather events such as extreme
temperatures, heavy rainfall and droughts. We have a
well-grounded experience in understanding volatility in regional
tea yields as a result of weather events and by extension
the world’s tea-growing regions. With this, we can respond
to extreme weather events by sourcing tea products from
multiple locations to continue to produce tea to our set
standards. Where this is not an option for single origin blends,
the impact would not be material to the business.
Mitigation
• Twinings’ sourcing capability coupled with its blending capability
enables the business to manage localised yield issues.
2024 update
Metrics and targets
• Since the impact of climate change on tea yields is assessed
as low, no metrics are disclosed. We will continue to monitor
this risk and will develop a metric at such a time where the
risk could be material.
Impact on flooding risk on Primark’s third-party
manufacturers
2023 assessment
Low
2030
Medium
2050
Scenarios assessed
2022 Bangladesh: RCP4.5 and RCP8.5 – China: RCP8.5 /
2024 No update required.
Assessment
Bangladesh
Bangladesh is exposed to both coastal and river flooding.
The flood risk outcomes through to 2030 are minimal,
but by 2050 there is a distinct increase.
China
The flood risk in China only changes minimally through to 2030
and 2050. Coastal flooding is projected at 1% in 2030 and less
than 2% in 2050. River flooding is projected at less than 5%
for 2030 and 2050. Primark has a large geographical spread
of supplier factories which would require a large number
of rivers and coastlines to flood simultaneously for there
to be a material problem.
Mitigation
• Primark’s sourcing strategy is focused on geographical
diversification, creating a more balanced global footprint
and developing risk mitigation strategies to increase flexibility
and agility when unexpected events occur.
• The analysis shows that the majority of Primark’s suppliers
in Bangladesh are located in areas of Dhaka which are less
susceptible to flooding.
• We ensure a geographical spread of supplier factories
across China.
• Flood Risk Assessment Inspection reports and corrective
action plans (‘CAP’) are issued to factories, along with
guidance notes. Remediation meetings are then held with
the factories to address items noted in the CAP.
• Structural Integrity Programme – Mott MacDonald flood
pilot update:
• Following on from last year’s pilot study covering
inspection programmes in Bangladesh, a further 16
factories were identified under phase two. All 16 sites
were inspected during the year and CAPs are currently
under review. For the phase one locations, the average
CAP progress rate is 78%.
• A similar project is planned for China in autumn this year,
targeting 27 factories for the initial pilot.
2024 update
Metrics and targets
• Number of Primark supplier factories (Bangladesh and China)
subject to high flood risk. The below figures relate to Primark’s
most recent flood risk assessment, for which an update on
mitigation activities has been provided for the current year.
Bangladesh ravine and coastal assessment – 4.5%
China ravine and coastal assessment – 13.7%
Associated British Foods plc | 69 | Annual Report 2024
Impact of carbon pricing mechanisms on ABF Sugar
2023 assessment
Medium
2030
Scenarios assessed
2022 International Energy Agency’s Net Zero Emissions by
2025 scenario, Sustainable Development Scenario and Stated
Policies Scenario Assessment / 2024 No update required.
Assessment
Incremental impact ranges from £0m to £48m in 2030.
ABF Sugar has developed a plan to reduce Scope 1 and 2
emissions by 30% by 2030 (from a 2018 baseline), achieved
through a series of fuel substitution and energy efficiency
programmes that generally are expected to have a return on
investment above 15%. Beyond 2030, while some
technologies exist, they are not yet commercially viable.
Mitigation
• Please refer to the ABF Sugar transition plan on page 70.
2024 update
Metrics and targets
• Please refer to the transition plan on pages 70 to 73.
Impact of carbon pricing mechanisms on Primark
2023 assessment
Medium
2030
Scenarios assessed
2022 International Energy Agency’s Net Zero Emissions by
2025 scenario, Sustainable Development Scenario and Stated
Policies Scenario Assessment / 2024 No update required.
Assessment
Incremental impact ranges from £55m to £155m in 2030,
driven by hypothetical carbon taxes on Scope 3 upstream
emissions. Scope 1 and 2 make up less than 2% of Primark’s
total emissions. Primark’s decarbonisation programme is
managed as an integral part of the Primark Cares strategy
with a road map to reduce absolute emissions by 50% by 2030
and mitigate potential exposure to increased carbon taxation.
Mitigation
• Please refer to the Primark transition plan on page 73.
The plan focuses on Primark’s top five sourcing markets
and supporting suppliers in implementing energy efficient
measures and making a switch to renewable sources.
The plan does not assume the purchase of offsets.
2024 update
Metrics and targets
• Please refer to the transition plan on pages 73 to 77.
Transition plans
ABF Sugar
In 2018 ABF Sugar launched the 2018 Commitments with an
aspiration to reduce our carbon footprint (Scope 1 and 2) by 30%.
In 2024 ABF Sugar transformed our 2030 commitment to
a Science Based Target, under the SBTi. This means we are
following the latest science, have targets that will help them
articulate our progress in reducing carbon at the factory,
in the field and on the move.
SBTi validation is a significant milestone in their journey to
manage and align our transition plan.
Governance
There has been no change in the ABF Sugar governance
structure from last year. The ABF Sugar Chief Executive and
business unit managing directors remain responsible and
accountable for overseeing climate-related risks, opportunities,
overall strategy and transition plans. Please refer to our website
for a more detailed understanding of our governance process.
To ensure plans will be delivered and savings captured for
all projects, the ‘Results Delivery Office’ has developed an
integrated approach to measure carbon savings and categorise
projects for ESG. All ABF Sugar businesses have access to
a central system that provide up-to-date carbon information
to track targets and define savings.
Risk management
Each business within ABF Sugar develops action plans to
respond to the climate-related risks and opportunities that
apply to them. All plans and projects have passed through
a well-established governance process that examines each
performance improvement proposal against internal rate
of return criteria and ESG and climate factors. These plans
are then approved by the ABF Sugar Chief Executive and
business unit managing directors.
Strategy, metrics and targets
In working towards reducing greenhouse gas emissions (GHG)
for Scope 1 and 2, Energy & Industry (E&I), ABF Sugar have
categorised our proposed plans and projects into three focuses.
1. Immediate term: Focusing on reducing operation GHG
emissions, investing in energy efficiency with the aim
of reducing energy consumption and eliminating coal.
2. Short term (to 2030): Targeting key sites and pairing them with
key technological resources.
3. Long term (to 2050): Focusing on employing low emission
technologies, managing climate-related risks across the
value chain, and partnering to innovate at factories across
the business.
ABF Sugar does not intend to utilise carbon offsets in their
de-carbonisation strategy.
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Associated British Foods plc | 70 | Annual Report 2024
ABF Sugar GHG improvement roadmap
Impact from today
• Efficiency programmes
• Fuel switch from coal
• Reducing feed drying
• Green cane harvesting
Moving towards 2030
• CCUS (Vivergo)
• Biogas / Biomass
• Tactical electrification
• Solar electricity
Beyond 2030
• Hydrogen / CCUS / Negative
carbon (other)
• General electrification
• New sugar process technology
Plan and execute
Develop projects /
commercial relationships
New technology
Figure ABF Sugar road map 1.
Progress to target: Energy and Industrial (‘E&I’)
British Sugar, the largest contributor to this category of
emissions, has reduced its Scope 1 and 2 emissions by 21%
from baseline year. Another significant contribution comes from
the reduction of the use of coal in Illovo South Africa.
ABF Sugar has a continued focus on scope 1 and 2 E&I as
this is the most material risk to the business and is an area
of significant spend. In 2023/24 ABF Sugar spent approximately
£73m on 39 approved projects. To date 30 of these projects
have contributed a saving of 53,721 tCO2e. For their 5-year plan,
ABF Sugar is planning to spend 6% of their planned capex to
support their climate change strategy and ESG initiatives.
E&I Scope 1 and 2, 52% reduction by 2030
The reductions have been achieved by a focus on three areas
– efficiency, fuel switch and investment in new technology.
Each business has a decarbonisation plan focused on their area
of risk and opportunity, British Sugar is focused on Scope 1 factory
emissions reduction plan with projects, efficiency programmes
and clear KPIs. The reductions are achieved by capital investments
but also understanding and running our factories more efficiently.
For example, at our Sezela and Noodsberg factories in South
Africa, we have reduced coal usage in boilers through our
efficient use of bagasse.
Projects supporting carbon reduction
Entity
British Sugar – Bury
Project
Decarbonisation steam reduction (Phase 1)
Description
This project replaces four existing Roberts type evaporators with three new falling-film type evaporators.
This will realise a significant reduction in LP liquid prolene gas burn for sugar manufacturing (approx. 25%)
as well as increasing engineering reliability of the station. The second main element of the project will be
to upgrade the Raw Juice Heating Station. This project will replace the station as a whole, eliminating the
planned essential replacement plan spend, and will allow the factory to realise the full gas burn reduction
of the three new evaporators as well as improving engineering and process reliability of the site.
Year of approval
2023/24
Expected tCO2e
saving
19,500
Target project
close-out date
1 December 2026
Associated British Foods plc | 71 | Annual Report 2024
Projects supporting carbon reduction continued
Entity
British Sugar – Cantley
Project
Provision of modular steam and power
Description
This project will re-establish a steam generation capacity of up to 60 t/hr at the Cantley Factory to meet
a range of business requirements within upcoming Medium Combustion Plant Directive emission limits.
The low-pressure ‘modular technology’ utilised will deliver process/maintenance simplification, improve
process safety, as well as enable operational effectiveness through ‘Industry 4.0’ methodology.
Year of approval
2023/24
Expected tCO2e
saving
16,000
Target project
close-out date
1 September 2025
Entity
Azucarera – Guadalete
Project
Pre-scalders and 6th evaporation effect
Description
This project reduces the global energy consumption of the Guadalete factory through the installation
of pre-scalders, and implementation of evaporators. In turn, this will improve the heating steam scheme.
Year of approval
2023/24
tCO2e saving
5,202
Project close-out
date
Completed.
Entity
Illovo Sugar – Sezela
Project
Steam traps replacement on juice heaters
Description
Over the years, the steam traps on the juice heaters were replaced with non-return valves (NRVs) which
has caused excessive steam wastage. The ideal opportunity is to reinstate the steam traps on the juice
heaters to allow energy savings to be made. It will install x13 steam traps on the various heaters and these
will be placed before the NRV to ensure the energy is captured. In turn, this will reduce energy and save
coal use within the Sezela heaters area.
Year of approval
2022/23
tCO2e saving
3,605
Project close-out
date
Completed
Entity
Azucarera – Miranda
Project
Energetic improvements APRO (Phase 1)
Description
The objective of the project is to modify the heating of the raw juice, improving the use of the pan vapours
and reducing the consumption of steam in the heating of the purification stage.
Year of approval
2023/ 2024
Expected tCO2e
saving
1,000
Target project
close-out date
1 December 2025
Entity
Illovo Sugar – Ubombo
Project
Entry-level housing upgrade (Phase 8 – 15)
Description
The project involves the phased upgrading of staff housing at agricultural and industrial villages to comply
with the minimum Illovo Group entry-level housing standards. As part of the project, houses for employees
at Nyetane, Majombe and Shonalanga villages will be electrified to eliminate the usage of domestic coal
within the villages.
Year of approval
2023/24
tCO2e saving
1,177
Project close-out
date
Completed
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Emission reduction plan
Looking ahead and per figure ABF Sugar roadmap 1, there
is a strong pipeline of accretive GHG reduction projects.
Each business has its own environmental plan which has
been categorised between short and long term.
Short term
• British Sugar: Projects focus on smaller factory energy
efficiency/steam reduction, coal elimination and reduction
of energy use for pulp drying.
• Our sugar businesses in Africa: across all businesses projects
focus on energy efficiency and green cane harvesting, while
Illovo Sugar South Africa has coal elimination/ reduction
projects too.
• Azucarera: Projects focus on factory energy efficiency and
automation as well as the specific Guadalete project.
Long term
• British Sugar: Projects focus on technological advancements
for factory energy efficiency/steam reduction and alternate
pulp drying technologies
• Illovo Sugar South Africa: Projects are aligned to those in the
short term, however, the technology is yet to be developed
• Azucarera: Projects focus on alternate fuel projects, however,
current regulations present a challenge at this point in time.
Primark
Governance
A comprehensive governance system has been established at
Primark to oversee sustainability and ethics matters, including
the delivery of the commitments related to its Primark Cares
strategy, which coincides with Primark’s transition plan in
the medium term. There has been no change in this position
from last year. The Primark chief executive officer (‘CEO’) and
Executive Committee remain responsible and accountable for all
decision-making and implementation, and ultimately approve the
transition plan. Please refer to Primark’s most recent reporting
for a more detailed understanding of its sustainability and ethics
governance structure.
Risk management
In 2021/22 the ABF Group performed an initial assessment of
the impact of climate-related risks and opportunities on Primark
for which material risks and opportunities underwent scenario
analysis. Any identified climate-related risks connected to the
implementation of Primark’s transition plan are managed through
the governance structure described above.
Primark recognises the need to evolve the initial scenario
analysis by performing a deeper and more focused assessment
of climate-related risks and opportunities across its value chain,
ensuring that these get embedded into long-term transition,
strategic and financial planning.
Strategy, metrics and targets
In 2021, Primark launched its Primark Cares strategy building
on the work of its Ethical Trade and Environmental Sustainability
(‘ETES’) programme. Under Primark Cares, the business has set
out a number of public commitments up to 2030 with a focus
on three areas, Product, Planet and People, which are expected
to accelerate its transition to a lower-carbon economy. As such,
in the medium term the Primark Cares strategy coincides with
Primark’s transition plan.
The strategy includes an overarching objective to halve carbon
emissions across Primark’s value chain by 2030, from a base
year of 2018/19, which is aligned with Primark’s commitments
under the UNFCCC Fashion Charter for Climate Action (FICCA)
and, therefore, the 1.5°C Paris Agreement. Under the FICCA,
Primark has also pledged to achieve net zero emissions no later
than 2050. The organisation is working to define its plan to reach
this long-term goal, taking into consideration uncertainties
beyond 2030 in technology development and innovation, as well
as the political and regulatory global landscape.
At present, Primark has not included carbon offsets in its
transition planning.
Progress to target
Please refer to page 63 for information on Primark’s
progress to target.
Associated British Foods plc | 73 | Annual Report 2024
Projects supporting carbon reduction to date
Primark Cares
Commitment
Protecting Life on the Planet – Primark will halve carbon emissions across its value chain by 2030
Project
Energy efficiency and renewable energy procurement in the supply chain
Timeline
2018 – present
Description
Primark has been working on a decarbonisation programme with key suppliers, which focuses on
improving energy efficiency, reducing the energy intensity of manufacturing goods and moving away
from a carbon-intensive fuel mix within manufacturing under tier 1, tier 2 and tier 3 of our supply chain.
At the same time, Primark has been working to pool some of the factories in its value chain and assisting
them in negotiating contracts so they can use their combined purchasing power to access renewable energy.
Target
Reduce absolute Scope 3 GHG emissions from ‘purchased goods and services category’ by 50% by 2030
from a 2018/19 base year.
Metric
Annual Scope 3 GHG emissions from purchased goods and services (tCO2e)
Methodology
Primark’s Scope 3 calculation methodology has been third-party reviewed by the Carbon Trust.
It is not currently public.
Underlying
uncertainties,
challenges and
assumptions
• Challenge – maturity of renewable energy procurement in specific sourcing regions
• Challenge – supply chain monitoring and reporting for lower tiers
Progress to date
Energy efficiency: Primark keeps scaling up its resource efficiency programme, having now engaged
a cumulative total of 108 factories in all key sourcing regions (Bangladesh, India, China, Cambodia) since
activities started.
Renewable energy procurement: Primark kicked-off activities to support factories with collective
renewable power procurement in India, according to the roadmap developed in 2022/23. In particular,
a solar power profile was created for all first 39 contributing factories and a collective Request for Proposal
(‘RFP’) will be released to local renewable power developers.
Please refer to page 63 for commentary of Primark’s Scope 3 emissions.
Primark Cares
Commitment
Protecting Life on the Planet – Primark will eliminate single-use plastics and all non-clothing waste by 2027
Project
Eliminate non-clothing waste – Packaging Centre of Excellence
Timeline
Early 2019 – present
Description
A dedicated team, within Primark’s Packaging Centre of Excellence, manages the delivery of packaging
transformation projects.
An example of a project is Primark’s durable new plastic clothes hanger design made from a minimum
of 90% recycled polypropylene which has been designed for reuse/ to be retained. This design is being
phased in for main apparel ranges, with completion due in 2027. Alongside reusing hangers retained in stores,
Primark also collects unusable hangers to be recycled and made into new hangers. The move to recycled
materials for all hangers is expected to achieve a reduction in Primark’s carbon footprint attributable
to hangers by 40%.
Target
Eliminate single-use plastics by 2027
Metric
1. % reduction in tonnage of single-use plastic (SUP) packaging against 2022 baseline year
2. % of SUP to overall packaging in tonnes
Methodology
The methodology is publicly available at the Basis of Reporting page of the Primark website
corporate.primark.com/en-ie/primark-cares/resources/reports
Underlying
uncertainties,
challenges and
assumptions
• Challenge and uncertainty – there are practical limitations, technical constraints and an absence
of suitable alternatives that may impact Primark’s goal of complete elimination of SUP by 2027
Progress to date
• Performance against Primark’s baseline will be reported from 2024/25 onwards
• Primark’s SUP baseline of 21,797 tonnes represents 19.4% of our total packaging footprint for
the baseline year
CLIMATE-RELATED FINANCIAL DISCLOSURES (‘TCFD’) CONTINUED
Associated British Foods plc | 74 | Annual Report 2024
Primark Cares
Commitment
Giving Clothes a Longer Life – All Primark clothes will be made from recycled or more sustainably sourced
materials by 2030
Project
Clothes made from recycled or more sustainably sourced materials
Timeline
Early 2021 – present
Description
Primark has committed to have all Primark clothes made from recycled or more sustainably sourced
materials by 2030. The business works with certification bodies, to certify and validate claims it makes
on individual materials relevant to these standards.
Primark also works hard to ensure that all Primark Cares products containing recycled fibres meet Primark’s
quality testing requirements.
Target
All Primark clothes will be made from recycled or more sustainably sourced materials by 2030
Metric
1. Percentage of Primark’s clothing units sold containing recycled or more sustainably sourced materials
2. Percentage of Primark’s clothing units sold containing cotton that is organic, recycled or sourced from
the Primark Cotton Project
Methodology
The methodology is publicly available at the Basis of Reporting page of the Primark website
corporate.primark.com/en-ie/primark-cares/resources/reports
Underlying
uncertainties,
challenges and
assumptions
• Challenge – restriction on the handling and trade of recycled materials due to regulatory changes
• Challenge – some sourcing markets may not have access to all recycled or more sustainable material types
• Challenge – for some less commonly used fabrics such as elastane, there are currently no sustainable
alternatives available
Progress to date
66% of Primark clothing units sold in 2023/24 contained recycled or more sustainably sourced materials, up
from 55% the previous year and 25% in 2021. 57% of Primark cotton clothing units sold in 2023/24
contained organic cotton, recycled cotton, or cotton sourced from the Primark Cotton Project, up from 46%
last year. As our Primark Cares initiatives continue to grow in number, Primark is actively working on training
and embedding processes to facilitate the conversion to recycled and more sustainably sourced materials.
Building on last year’s training of 286 suppliers, Primark is continuing its efforts to further educate suppliers
on the criteria required for products to meet its Cares standards. The business has already hosted six
training sessions in February and March 2024, with plans for additional sessions in July 2024. The aim
is to provide clarity to suppliers regarding Primark Cares requirements, including minimums, certification and
chain of custody.
Primark Cares
Commitment
Protecting Life on the Planet – Primark will halve carbon emissions across its value chain by 2030
Project
Energy efficiency and renewable energy procurement in own operations
Timeline
Early 2021 – present
Description
While significantly smaller than Scope 3, Scope 1 and 2 emissions are areas where the business has the
most direct influence.
Energy efficiency: Primark uses a system called the Energy Bureau, which allows the business to manage
energy consumption remotely by monitoring and modifying environmental parameters, to maintain suitable
store conditions in an energy-efficient manner. To further reduce energy consumption, Primark has also
been switching to energy-efficient LED lightbulbs in stores globally.
Renewable energy: Primark’s ambition is to switch all stores to renewable energy, as well as exploring
ways to reduce emissions from on-site heating.
Target
Reduce absolute Scope 1 and 2 GHG emissions by 50% by 2030 from a 2018/19 base year
Metric
Annual Scope 1 and 2 (market-based) emissions (tCO2e)
Methodology
Annual Scope 1 and 2 emissions are calculated by ABF at Group level
Underlying
uncertainties,
challenges and
assumptions
• Challenge – Misalignment between lease lifetime of some retail properties and payback period for
installing new high-efficient equipment
• Challenge and uncertainty – Maturity of renewable energy procurement in specific markets
Progress to date
• By the end of 2023/24, renewable power contracts were in place in 8 countries, covering approximately
64% of Primark’s electricity demand
• The number of Primark stores fitted with energy-efficient LED lightbulbs significantly increased, from 141
in July 2023 to 274 in July 2024. At the end of 2023, the Energy Bureau covered more than 179 locations
across the UK.
Please refer to page 62 for commentary of Primark’s Scope 1 and 2 emissions.
Associated British Foods plc | 75 | Annual Report 2024
Projects supporting carbon reduction to date continued
Primark Cares
Commitments
Giving Clothes a Longer Life – Primark clothes will be recyclable by design by 2027. Primark will
strengthen the durability of its clothes by 2025.
Project
Giving Clothes a Longer Life
Timeline
Late 2021 – present
Description
Circular design: Since the launch of Primark’s Circular Product Standard (‘CPS’) and its pilot clothing
collection designed in line with CPS in April 2023, Primark has focused efforts on:
• continuing to expand and improve knowledge of circularity within the business via training
• scaling up the use of circular design principles in key product categories
• investing in additional expertise
The CPS is as an integral and foundational part of Primark’s overarching public ambition to become a more
sustainable and more circular business.
Durability: Durability to Primark means the amount of wear or use that a customer can get from an item
of clothing over a period of time. Clothing is durable if it remains functional and wearable without requiring
too much maintenance or repair, when faced with the challenges of normal wash and wear over its lifetime.
As part of the Textiles 2030 initiative, Primark is taking part in a durability project led by WRAP.
Target
1. Primark clothes will be recyclable by design by 2027
2. Primark will strengthen the durability of its clothes by 2025
Metric
1. % of all clothing units sales that are circular by design
2. % of clothing which passed the aspirational level of the durability framework
Methodology
1. Developed in 2023 with support from a third-party consultant primark.a.bigcontent.io/v1/static/Primark-
Circular-Product-Standard-2023
2. Will be developed in the next financial year with support from a third-party consultant
Underlying
uncertainties,
challenges and
assumptions
• Uncertainty – No industry-wide definition for ‘circularity’
• Uncertainty – No recognised standard for durability across the fashion industry
• Challenge – Today, many items of clothing are inherently hard or impossible to recycle based on their
design, componentry, and fabric composition. For example – elastane is widely used within the fashion
industry to ensure that a garment has adequate stretch to function and fit, but it is virtually impossible
to recycle today. Primark’s approach to circular design is category specific and will evolve as textile
recycling innovation grows
Progress to date
Circular design:
Training: Primark estimates that 80% of product colleagues have completed the foundation course of the
Circular Design training by July 2024. This is an increase from 74% last year. Primark’s expert level training
was trialled in October/November 2023. This training will continue its roll-out.
Product categories: Following from the pilot collection in April, sales from circular clothing products have
reached 3% of total clothing units sales (August 2023 – July 2024). For Spring / Summer 2024, Primark
has seen major progress in menswear, kidswear and womenswear, with an increasing number of products
meeting the CPS.
Circularity team: The team has grown from one colleague to four in the past 12 months.
Durability:
• Primark has launched its Primark Durability Framework which is guided by the WRAP Clothing Longevity
Protocol. Information on the framework is available on the website.
• As of January 2024, extended wash testing has been implemented on all machine washable products
across all product categories (excluding exempted categories of hand wash and dry clean only products)
• Primark’s extended wash testing methodology has been standardised and aligned across all machine
washable products
CLIMATE-RELATED FINANCIAL DISCLOSURES (‘TCFD’) CONTINUED
Associated British Foods plc | 76 | Annual Report 2024
Emission reduction plan
Key priority areas for action were identified on the basis of
the influence and materiality of emissions categories, assessed
from the base year of 2018/19 (see the table below).
These are Primark’s Scope 1 and 2 emissions, where the
business has direct ownership, and the most significant Scope 3
categories in terms of absolute emissions (purchased goods and
services; upstream transportation; use of sold products).
Primark’s baseline emissions (2018/19) (% of total
emissions across all scopes)
Scope 1 and 2 (location-based)
2.5 %
Scope 3
97.5 %
Of which:
Purchased goods and services
74.5 %
Capital goods
1.9 %
Fuel and energy-related activities
0.5 %
Upstream transportation
7.9 %
Waste generated in operations
0.1 %
Business travel
0.2 %
Use of sold products
11.8 %
End-of-life treatment of sold products
0.6 %
Scope 1 and 2 emissions
Short term (present – 2025)
• Maintain ISO50001 certification for all stores, offices
and distribution centres.
• Develop appropriate regional pathways for heat
decarbonisation in Primark properties.
Medium term (2026 – 2030)
• Reduce absolute Scope 1 and 2 GHG emissions by 50%
by 2030, from a 2018/19 baseline year.
Scope 3 emissions
Short term (present – 2025)
• Launch an energy efficiency programme, engaging and
supporting suppliers’ manufacturing facilities on energy
demand reduction.
• Launch a renewable energy programme, engaging and
supporting suppliers’ manufacturing facilities on sourcing
low-carbon and renewable energy.
• Optimise inbound transport modes to balance emissions,
cost and time.
• Strengthen the durability of Primark’s clothes by 2025.
Medium term (2026 – 2030)
• Primark clothes to be recyclable by design by 2027.
• All Primark clothes from recycled or more sustainably sourced
materials by 2030.
• More regenerative agricultural practices will be used
in the Primark Cotton Project.
• Eliminate single-use plastics and all non-clothing
waste by 2027.
Primark acknowledges the uncertainties and challenges
connected to the implementation of its medium-term plan,
which include: supply chain monitoring and reporting for lower
tiers; evolving climate policy in operating markets and sourcing
regions; technology innovation and costs; consumer sentiment
and behaviour. Primark is planning to address these through
targeted long-term actions such as policy advocacy, data
systems enhancement, supplier engagement and consumer
education. Please refer to Primark’s latest reporting for
detailed information.
Associated British Foods plc | 77 | Annual Report 2024
Our approach to risk management
The delivery of our strategic objectives, sustainable growth
and long-term shareholder value is dependent on effective
risk management. The diversified nature of our operations,
geographical reach, physical and technological assets
and currencies are important factors in mitigating the risk
of us missing our strategic goals.
As with any business, risks and uncertainties are inherent
in our business activities and these risks may have a financial,
operational, environmental and reputational impact. It is through
a structured approach to risk management that we are able
to mitigate and manage risks and embrace opportunities
when they arise.
The Board is accountable for effective risk management, for
agreeing the principal, including emerging, risks facing the Group
and ensuring that these are successfully managed. The Board
undertakes a robust annual assessment of the principal risks
that would threaten the business model, future performance,
solvency or liquidity. The Board also monitors the Group’s
exposure to risks as part of the business performance reviews
conducted at each Board meeting, providing the Board with
an opportunity to discuss risk mitigation actions with divisional
senior management.
Our decentralised business model empowers the management
of our businesses to identify, evaluate and manage the
risks they face to ensure each business’s compliance with
relevant legislation, our business principles and Group policies.
Their risk assessments are wide-ranging and consider operational,
environmental and other external risks, in the context of the
overall materiality, key controls and relevance to the markets
in which they operate. The divisional chief executives individually
present their division’s consolidated risks to the Director of
Financial Control and the Finance Director on an annual basis,
who review and challenge them.
Emerging risks are identified and considered at both a Group
and business unit level, as part of the overall risk management
process. They are identified through a variety of horizon-scanning
methods including: geopolitical insights; ongoing assessments
of competitor activity and market factors; workshops and
management meetings focused on risk identification; analysis
of existing risks using industry knowledge and experience to
understand how these risks may affect us in the future; and
representation and participation in key industry associations.
Group functional heads including Legal, Treasury, Tax, IT,
Pensions, HR, Procurement and Insurance also assess the key
risks in their functional area, together with the controls that are
in place or planned to mitigate them. The Director of Financial
Control takes these perspectives and combines them with the
business risk assessments to create a consolidated view of
the Group’s risk profile. A summary of these risk assessments
is then shared and discussed with the Finance Director and
Chief Executive at least annually.
The Director of Financial Control holds meetings with each
of the non-executive directors seeking their feedback on the
reviews performed and discussing the key risks and mitigating
activities identified through the risk assessment exercise.
Once all non-executive directors have been consulted, a Board
report is prepared summarising the full process and providing an
assessment of the status of risk management across the Group.
The key risks, mitigating controls and relevant policies are then
summarised and the Board confirms the Group’s principal risks.
These are the risks which could prevent ABF from delivering our
strategic objectives. This report also details when formal updates
relating to the key risks will be provided to the Board.
Key areas of focus this year
Effective risk management processes and internal controls
We continued to seek improvements in our risk management
processes to ensure the quality and integrity of information
and the ability to respond swiftly to direct risks. During the year,
the Audit Committee on behalf of the Board conducted reviews
on the effectiveness of the Group’s risk management processes
and material internal controls in accordance with the 2018 UK
Corporate Governance Code.
Our approach to risk management and systems of internal
control is in line with the recommendations in the Financial
Reporting Council’s (FRC) revised guidance ‘Risk management,
internal control and related financial and business reporting’.
The Board is satisfied that internal controls were properly
maintained, and that principal and emerging risks are being
appropriately identified and managed.
Consumer confidence
Household budgets continue to face real pressures and
consumer confidence remains low in a number of key markets.
Primark’s cost leadership position continues to be attractive
to the customer. In the food businesses, there is continued
demand for private label products.
All of our businesses have developed strategies considering
the potential changes in both end consumer and our customer
behaviours and demands, the implications for the business
and where investment or changes to business models
may be appropriate.
PRINCIPAL RISKS AND UNCERTAINTIES
Managing our risks
Associated British Foods plc | 78 | Annual Report 2024
Regulatory changes
Our businesses continue to face a large number of regulatory
changes with ever-increasing complexity and variations
in requirements across the markets in which we operate.
For example, the EU Corporate Sustainability Reporting Directive
(CSRD) requiring companies operating in the EU to disclose and
report on environmental, social affairs and governance issues,
the new German Supply Chain Due Diligence Act (LkSG), and
changes to data privacy laws.
The extent of change will have an impact on the capacity of
management at a time when they are dealing with the ongoing
challenges resulting from economic uncertainty, alongside
the day-to-day growth of our businesses.
UK Corporate Governance Code 2024
In January 2024, the FRC issued a revised version of the UK
Corporate Governance Code. Upon its release, we undertook
a detailed review to evaluate the impact that the new Code will
have on our governance and risk management arrangements.
We have concluded that the key change impacting risk
management and controls at ABF relates to Provision 29.
Provision 29 will require companies to make a declaration of the
effectiveness of the Group’s material controls as at the balance
sheet date in the annual report. The new Code will apply to the
Group for its financial year 2025/26, except for Provision 29
which will apply to the Group for its financial year 2026/27.
Whilst this revised provision clarifies the Board’s responsibilities
and requires explicit confirmation on the effectiveness of material
controls, we believe that our existing risk management and
control monitoring and validation processes mean that we are
well-placed to meet the new requirements.
Risk appetite
Our approach to risk management gives the authority to our
business leaders to make decisions that enable them to deliver
our strategy of delivering long-term value for our shareholders
and other stakeholders as detailed on pages 8 to 11. They achieve
this by identifying and managing their risks within acceptable
levels through our devolved operating model and our people,
culture and values. These principles underline how we manage
the Group within the Board’s risk appetite.
Divisional risks and their impact on business performance are
reported during the year and are considered as part of the
monthly and quarterly management review process.
Our principal risks and uncertainties
The directors have carried out an assessment of the principal
risks facing ABF, including emerging risks, that would threaten
our business model, future performance, solvency or liquidity.
ABF is exposed to a variety of other risks related to a range of
issues such as human resources, commodity prices, community
relations, the regulatory environment and competition. These are
managed as part of the risk process and a number of these are
referred to in the Responsibility section at pages 54 to 65 and
on our website at www.abf.co.uk/responsibility.
Outlined below are the Group’s principal risks and uncertainties
which we believe are likely to have the greatest current or
near-term impact on our strategic and operational plans and
reputation, and the key mitigating activities in place to address
them. These are the principal risks of the Group as a whole
and are not in any order of priority.
Our risks are grouped into external risks, which may occur
in the markets or environment in which we operate, and
operational risks, which are related to internal activity linked
to our own operations and internal controls.
The ‘Changes since 2023’ describe our experience and activity
over the last year.
Key
Risk trending
Stakeholders
impacted by the risk
Increasing risk
Customers
Unchanged risk
Investors and
shareholders
Decreasing risk
Employees
Suppliers
Communities
Governments
Associated British Foods plc | 79 | Annual Report 2024
Complexity of operating across global markets
Context and potential impact
Associated British Foods operates in 56 countries with sales and supply
chains in many more. For example, Primark has a complex supply chain,
which is dependent on supplies from countries including China, Bangladesh,
India and Turkey. We are therefore exposed to: global market forces;
fluctuations in national economies; societal unrest; and evolving legislation.
Geopolitical uncertainty remains high given the ongoing war in Ukraine,
the escalation of the conflict in Gaza into Lebanon, the closure of the Suez
Canal, the recent resignation of the Prime Minister in Bangladesh and the
wider political landscape including elections in the US, and a number
of countries in South America, Africa and south east Asia.
Failure to recognise and respond to any of these factors could directly
impact the profitability of our operations.
Entering new markets is a risk to any business.
Mitigation
Our approach to risk management considers potential short-term market
volatility and evaluates longer-term socio-economic and political scenarios.
By their nature, socio-political events are largely unpredictable.
Nonetheless, our businesses have detailed contingency plans which
include site-level emergency responses and improved security for
employees.
In the event of a major geopolitical event that disrupts Primark’s supply
chain, in the short term the risk would be partially mitigated as we have
several weeks of stock in warehouses and relatively long lead times, whilst
alternative sourcing strategies are implemented.
Our management teams continue to monitor where products and raw
materials are sourced from and to work closely with suppliers to secure raw
materials, maintain production and provide a reliable supply to our customers.
We engage with governments, local regulators and community
organisations to contribute to, and anticipate, important changes in public
policy. We conduct rigorous checks when entering or commencing
business activities in new markets.
The Group’s financial control framework and Board-adopted tax and treasury
policies require all businesses to comply fully with relevant local laws.
Provision is made for known issues based on management’s interpretation
of country-specific tax law, EU cases and investigations on tax rulings and
their likely outcomes.
Changes since 2023
Whilst supply chain volatility has eased and energy
prices have continued to reduce during the year,
the ongoing geopolitical situations remain fragile.
This could have an impact on the cost and
availability of raw materials and key commodities.
Our procurement teams continue to work closely
with suppliers to maintain the effective operation
of our supply chains.
The war in Ukraine means that there remains a risk
of volatility in energy prices and of further supply
chain disruption.
We have experienced no direct impact by the
escalating conflict in Gaza, but we are monitoring
the situation. We continue to monitor the situation
in the Red Sea and the closure of the Suez Canal but
at this stage we have been able to manage without
any significant disruption to our supply chain.
The general election in the UK saw a change in
government in July 2024 and we are monitoring the
direction of the new government. General elections
are planned in a number of our key markets,
including the US and in a number of countries
in South America, Africa and south east Asia.
The commercial implications of any governmental
changes are being evaluated.
Consumer spending has continued to be resilient
in this trading period; however, a number of our
countries face the risk of recession that could
exacerbate debt problems, raise risks of emerging
market crises and trigger market instability. High
inflation continues to be a particular challenge for
our yeast and bakery ingredients businesses based
in Argentina and Turkey.
Geopolitical tensions continue to be a factor in a
number of countries in which we or our supply chain
operate. We monitor the situation on an ongoing
basis and there have been no major impacts for our
businesses. For example, we have been able to
successfully work with our suppliers to manage
the implications of the political unrest in Bangladesh
and as a result there has been no material impact on
the Primark business.
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
External risks
Associated British Foods plc | 80 | Annual Report 2024
Fluctuations in commodity and energy prices
Context and potential impact
Changes in commodity and energy prices can have a material impact
on the Group’s operating results, asset values and cash flows.
Mitigation
The Group purchases a wide range of commodities in the ordinary
course of business. We constantly monitor the markets in
which we operate and manage certain of these exposures with
exchange-traded contracts and hedging instruments.
The commercial implications of commodity price movements
are continuously assessed and, where appropriate, are reflected
in the pricing of our products.
Changes since 2023
Certain commodity prices have been volatile in the financial
year, however most commodity markets on average are
falling in price. Energy markets in the UK and Europe have
fallen from highs in the prior year. However, the risk of
volatility remains as a result of market uncertainty and
supply concerns.
The extreme pace of the decline in European sugar prices
has impacted our European sugar businesses.
Businesses continue to manage commodity price risk
under existing risk management frameworks and, where
appropriate, pricing of products.
Movement in exchange rates
Context and potential impact
Associated British Foods is a multinational Group with operations and
transactions in many currencies. Changes in exchange rates give rise
to transactional exposures within the businesses and to translation
exposures when the assets, liabilities and results of overseas entities
are translated into sterling upon consolidation.
Mitigation
Our businesses constantly review their currency exposures and their
hedging instruments and ensure appropriate actions are taken to
manage the impact of currency movements.
Board-approved policies require businesses to hedge transactional
currency exposures and committed long-term supply or purchase
contracts which are denominated in a foreign currency, using foreign
exchange forward contracts. Cash balances and borrowings are
largely maintained in the functional currency of the local operations.
Changes since 2023
On average, sterling has strengthened against most of our
trading currencies this year, resulting in an operating loss
on translation of £97m.
Cash and liability balances held in our businesses in Malawi
and Nigeria in non-functional currencies had a devaluation
loss of £45m.
Health and nutrition
Context and potential impact
Failure to adapt to changing consumer health choices or to address
nutrition concerns in the formulation of our products, related to
consumer preferences or government public health policies, could
result in a loss of consumer base and impact business performance.
Mitigation
All of our food businesses are individually responsible for managing
their product portfolio. Consumer preferences, regulation and market
trends are monitored continually. Recipes are regularly reviewed
and, where technically feasible, are considered for reformulation
to improve their overall nutritional value.
All of our grocery products are labelled with nutritional information,
including in many cases front of pack nutrition labelling on our
branded grocery products.
We actively consider consumer health in the context of brand
development and acquisition activity.
We invest in research with experts to improve our understanding
of the science and societal trends.
Changes since 2023
Our Sugar and Grocery businesses have continued
to focus on nutrition and health during the year to help
consumers improve their diet.
Our businesses always take nutritional factors into
account when developing their product ranges. To support
this approach, many of our consumer-branded grocery
businesses have adopted nutrition policies which set out
the businesses’ principles of: transparency about nutritional
properties of products; consumer choice through product
development and reformulation; responsible product
development and advertising. Our businesses also operate
a formal process to ensure that any health claims across
their brands are subject to in-house legal review to ensure
they meet necessary legal requirements and are
responsibly communicated.
In addition to reformulating existing products, our businesses
have launched a range of products with nutritional benefits,
all of which are non-HFSS (high in fat, salt or sugar). These
include: Patak’s Curry Creations, a range of sauce kits;
Jordan’s Popped Oat Crunch, high fibre breakfast cereal;
and Kingsmill Fruit Fingers, a source of fibre.
Associated British Foods plc | 81 | Annual Report 2024
Workplace health and safety
Context and potential impact
Our operations have the potential for loss of life or workplace injuries to
employees and contractors, both on-site and off-site, if the hazards and
associated risks are not fully controlled.
Mitigation
The safety, health and wellbeing of our employees and contractors
continues to be one of our main priorities. The chief executives of each
business, who lead by example, are accountable for the performance of
their business.
Our Health, Safety and Wellbeing Policy, refreshed in November 2023,
makes it very clear that we require the businesses to continuously improve
and to make sure that we understand the hazards and risks of our activities
and have in place appropriate controls to look after our people.
We have an external annual independent audit programme to verify
implementation of our risk management processes and to support a culture
of continuous improvement.
Best practice guidance is shared across the businesses, co-ordinated from
the corporate centre, to supplement the delivery of their own programmes.
These address our critical risks of moving vehicle interactions, falls of
people and materials from height, machinery safety, confined spaces,
electrical safety and management of contractors, as well as addressing the
more common, but less severe, injuries from manual handling and from
slips and trips.
Changes since 2023
Businesses have continued to treat health and
safety as the key priority and have delivered
numerous improvements during the year.
The safety performance of the Group is reported on
our website at www.abf.co.uk/responsibility.
We are deeply saddened to report that in the year
there were six work-related fatalities: one employee
in an on-site accident and five contractors (one in an
off-site accident and four in on-site incidents). These
occurred in Brazil and Africa.
Following these tragic events, our priority was to
support the families and colleagues of those who
died. Our businesses have conducted thorough
root cause analyses, have implemented safety
changes and communicated the findings to the
other businesses.
This year just under £39m was invested in reducing
health and safety risks across a wide range of
operational hazards.
Product safety and quality
Context and potential impact
As a leading food manufacturer and retailer, it is vital that we manage the
safety and quality of our products throughout the supply chain.
Mitigation
Product safety is put before economic considerations.
We operate strict food safety and traceability policies within an
organisational culture of hygiene and product safety to ensure consistently
high standards in our operations and in the sourcing and handling of raw
materials and garments.
Food quality and safety audits are conducted across all our manufacturing
sites, by independent third parties and customers, and a due diligence
programme is in place to ensure the safety of our retail products.
Our sites comply with international food safety and quality management
standards and our businesses conduct regular mock product incident
exercises.
All businesses set clear expectations of suppliers, with relevant third-party
certification or other assessment a condition of doing business. Product
testing and trials are undertaken as required and where bespoke raw
materials are purchased, the businesses will work closely with the supplier
to ensure quality parameters are suitably specified and understood.
All Primark’s products are tested to, and must meet, stringent product
safety specifications in line with and, in some instances above, legal
requirements.
Primark continues to drive and improve product performance for quality and
compliance purposes through its product approval processes, in-country
inspections centres and management of its supply base.
Changes since 2023
We had no major product recalls during the year.
There have been a very small number of product
recalls that have been managed and monitored as
part of our normal course of business.
Businesses have continued to define and refine KPIs
in this area.
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Operational risks
Associated British Foods plc | 82 | Annual Report 2024
Breaches of IT and information security
Context and potential impact
The cyber security risk landscape has continued to evolve, with threats
continuing to be prevalent, sophisticated, organised and aggressive.
This increasing risk requires continual improvement activities by our cyber
security teams to manage our ongoing risk exposure.
Our delivery of efficient and effective business and manufacturing
operations is enhanced using relevant technologies and by sharing of
information. A successful cyber-attack due to malicious activity by an internal
or external threat actor could result in data loss, operational disruption,
non-compliance with regulations, or loss of customer confidence.
Mitigation
There is an ongoing programme of investment in both technology and
people to enhance the longevity of our IT environments. This ongoing
investment includes the control and protection of the IT and manufacturing
environments.
We continue to improve our security culture through user awareness
training programmes including phishing simulations. This reduces the
likelihood of our workforce falling victim to such attacks.
We have established Group IT security policies, technologies and
processes, all of which are subject to regular internal audit.
Our cyber security teams implement and monitor security tools and
controls to ensure effective and efficient security operations.
Technical security controls are in place over key IT platforms with the Chief
Information Security Officer tasked with identifying and responding to
potential security risks.
Changes since 2023
We have continued to invest in and make
improvements to security policies, procedures and
capabilities during the year across our IT estates
and manufacturing facilities. We have also continued
to strengthen our central cyber security capabilities
and support.
The Group has remained vigilant as, like all
businesses, we remain subject to attack from
increasingly sophisticated malicious actors.
We work with independent third-party security
specialists that provide periodic penetration tests.
Coverage of our tools to protect our email systems
have been expanded providing greater defence
against more advanced threats which have become
prevalent with the weaponisation of artificial
intelligence.
A new crisis simulation platform has been
selected for use by all ABF businesses. This is
part of our improvements in cyber major incident
response capabilities.
Associated British Foods plc | 83 | Annual Report 2024
Our supply chain and ethical business practices
Context and potential impact
We have a global diverse business with complex supply chains, most of
which depend on agriculture and manufacturing.
The most critical risks in our supply chain are:
• the transparency of the source of raw materials and manufacturing
locations and working conditions in our supply chains;
• the inherent vulnerability of workers; and
• ensuring that we have consistency in our approach to due diligence and
the leverage to prevent, avoid or mitigate negative social and
environmental impacts that may arise.
Mitigation
The processes followed by our businesses to manage supply chain due
diligence are key to identifying, mitigating, preventing and ceasing human
rights violations. These processes are reviewed on an ongoing basis.
The due diligence requires our businesses to understand the issues specific
to the workers within their respective supply chains and, where
appropriate, the communities in which they reside. In line with our Group
Supplier Code of Conduct, our businesses prohibit all forms of modern
slavery, including forced labour and human trafficking. For more
information, see our Group Modern Slavery Statement 2024 which is
reported on our website at www.abf.co.uk/responsibility.
Compliance with our Group Supplier Code of Conduct is mandatory and this
sets out the essential requirements of responsible business conduct. It is
based on the International Labour Organization’s (ILO) standards as well as
the Ethical Trading Initiative’s Base Code. We have developed online
training modules to facilitate both internal awareness across the Group and
to support knowledge of our approach and expectations amongst our
suppliers.
Primark is a member of the Ethical Trading Initiative and is recognised for
its Ethical Trade and Environmental Sustainability programme. Primark has a
well-established Ethical Trade auditing and monitoring programme, which is
key for identifying risks within the supply chain and for ensuring that
mitigating actions are taken where necessary. Primark’s approach to due
diligence is explained in its Supply Chain Human Rights Policy which is
available at corporate.primark.com/en-gb/policies-and-reports/policies.
Several of our businesses, including UK Grocery, ABF Ingredients and
George Weston Foods, monitor their supply chains and engage suppliers
using the Sedex (Supplier Ethical Data Exchange) online database.
Twinings recognises the challenges within its tea
and herb supply chain and the importance of
working closely with our suppliers. Twinings uses
a comprehensive community needs assessment
framework, developed in consultation with expert
external stakeholders, which in addition to labour
rights covers housing, water and sanitation, health
and nutrition, land, gender and children’s rights,
farming practices and more.
Some of our businesses, including Primark and
Twinings, publish global sourcing maps and provide
information about their processes, progress and
challenges through corporate reports, websites,
stakeholder engagement activities and submissions
to benchmarks. This helps our understanding of
human rights risks and, where necessary, supports
collaboration both locally and across our sectors
to identify, mitigate and remediate risks.
Changes since 2023
We continue to report, as required, under relevant
regulations, including the UK Modern Slavery Act,
the Australian Modern Slavery Act, the US Uyghur
Forced Labor Prevention Act (UFLPA) and the
recently introduced Canadian Forced Labour and
Child Labour Act.
The most significant changes in the year relate
to new and emerging regulations which focus
on reporting, due diligence and supply chain
governance. This has prompted businesses to
further review their current governance and supply
chain due diligence processes as well as key
reporting metrics.
In preparation for the EU Corporate Sustainability
Reporting Directive (‘CSRD’), which some of our
entities will be required to report under from
2025/26, our in-scope businesses have initiated
double materiality assessments (DMA), which
include detailed value chain mapping, to identify
material sustainability matters and reporting metrics.
The established Group ESG Policy and Reporting
Steering Committee, oversees the activities to
prepare for upcoming material regulations and
emerging risks, including requirements for
publishing mandatory ESG information.
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Associated British Foods plc | 84 | Annual Report 2024
Our use of natural resources and managing our environmental impact
Context and potential impact
We are reliant on the use of a range of natural resources to deliver our
products. Our material environmental impacts come from:
• fuel and energy use;
• agricultural operations giving rise to GHG emissions;
• use of land related to agricultural operations;
• the abstraction and management of water and waste water especially in
water-stressed areas; and
• waste which cannot be reused or recycled, including single-use plastics.
Failure to manage these could pose a risk to the environment and local
communities, also potentially creating risks to our licences to operate and
result in additional costs.
We continue to set key performance indicators to quantify the outcome of
our efforts to reduce our environmental impact. We also continue to
strengthen our existing data management processes to facilitate the
reporting of robust data. There continues to be increased regulatory
scrutiny and ESG reporting requirements that we must meet in many
countries where we operate. We are committed to remaining compliant
with these requirements.
Mitigation
We recognise our role in supporting the transition to a low-carbon economy
and we are aligned with the commitment to the goals of the 2015 Paris
Climate Agreement.
Climate-related targets continue to be set by our businesses based on their
material risks. The reduction methodologies used by ABF Sugar and
Primark have been validated by the Science Based Targets initiative (SBTi).
Our businesses are targeting reductions in GHG Scope 1 and 2 emissions
through carbon reduction plans, which include both energy efficiency
measures and growing the use of renewable energy. British Sugar, which is
our most material business for Scope 1 GHG emissions, has a number of
projects that focus on factory energy efficiency, steam reduction, coal
elimination and reduction of energy use for pulp drying.
Our businesses continuously seek ways to improve the efficiency of both
their operations and supply chains by using technologies and techniques to
reduce their use of natural resources. Areas of focus include minimising
garment, packaging and food waste. At the agricultural and farm level, our
businesses support a wide range of environmental interventions. These
span many farm management models, including certified organic
production, standards to promote wildlife biodiversity, engagement with
smallholder growers in developing markets, and adoption of farm
management systems built on the principles of sustainable intensifications.
Water is an essential input for clothing and food
production. It is a valuable resource and our
businesses aim to reduce the amount of water they
abstract for their own operations. In addition, we
reuse process water as much as possible and treat
waste water ensuring it meets or exceeds local and
national water standards.
For example, AB Mauri has built significant in-house
capability in water use and waste water
management to assess water risks at each of its
sites and to ensure that any water returned to the
environment meets regulations and is managed as
safely as possible.
ABF Sugar continues to focus on water usage,
particularly in Africa. This year, the division has
concentrated activities in two areas: accuracy of
water measurement and investment in irrigation
efficiency.
An example of how some of our businesses work
with their supply chain to encourage responsible use
of natural resources is the Primark Cotton Project
(PCP). As part of this project, farmers are trained in
methods aimed at increasing cotton yields and
reducing inputs including water use, chemical
pesticide and fertiliser use.
Changes since 2023
The environmental performance of the Group and its
businesses is reported in our CDP
submissions which can be found on the ABF
website at www.abf.co.uk/responsibility. For details
on transition plans and our risk management and
materiality assessment approach, refer to the 2024
TCFD report and the ABF website at
www.abf.co.uk/responsibility.
There have also been new regulations that will
require additional levels of reporting, data gathering,
and supplier due diligence regarding our impact on
the environment.
For example, a number of our businesses will be
impacted by the upcoming EU Deforestation
Regulation (EUDR). Those in scope of this regulation
are working to address the new requirements,
including by working with external bodies, suppliers
and customers.
Associated British Foods plc | 85 | Annual Report 2024
The impact of climate change and natural disasters on our operations
Context and potential impact
Our businesses and their supply chains rely on a secure supply of finite
natural resources, some of which are vulnerable to external factors such
as natural disasters and climate change. Climate change continues to
represent a material risk throughout our supply chains and poses challenges
to some of our businesses. Most of our businesses rely on agricultural
crops with complex supply chains. Long-term climate change will impact
agricultural crops, while extreme weather events have the potential to
cause disruption to supply chains and operations.
The diversified and devolved nature of the Group means that mitigation
or adaptation strategies are considered and implemented by the
individual businesses.
Mitigation
Determining the potential medium- to long-term impact of climate risks and
opportunities is challenging as the impacts of climate change are uncertain.
Where appropriate, our businesses work with third-party experts to
understand division- and location-specific climate-related risks and
opportunities. Where risks are considered to be significant, these are
incorporated into the relevant business risk registers and mitigating controls
and processes identified.
For example, ABF Sugar’s businesses are investing in more sustainable
agriculture approaches and trialling more regenerative practices. Initiatives
are being carried out on our African estates and across the wider supply
chain of the other ABF Sugar businesses. In Spain we have partnered with
growers through the Research Association for Sugar Beet Crop
Improvement (‘AIMCRA’).
One of the aims is to help strengthen the links between individual farmers
and field technicians to enhance the resilience and productivity of crops.
Our annual TCFD reporting focuses on ABF Sugar, Primark and Twinings
which together comprise 62% of the Group’s adjusted operating profit.
A climate-related scenario analysis identified the material risks for the
Group, and actions to mitigate these are overseen by the relevant
businesses. Further information and updates on our material Group
climate-related risk is provided in the TCFD report on page 67.
Changes since 2023
Our review of the current environmental risks and
opportunities has determined that the scenario
analysis delivered as part of our Group TCFD
reporting remains appropriate.
Our businesses continue to implement specific
actions, which aim to reduce the impact of climate
change and natural disasters on our businesses.
For details on the scenario analysis, transition plans,
and our risk management and materiality
assessment approach, refer to the TCFD section on
pages 66 to 77 and our website at www.abf.co.uk/
responsibility.
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Associated British Foods plc | 86 | Annual Report 2024
Viability statement
The Board has determined that the most appropriate period
over which to assess the Company’s viability, in accordance
with the 2018 UK Corporate Governance Code, is three years.
Each business sets a strategic planning time horizon appropriate
to its activities which are typically of a three to five year duration.
The directors also considered the diverse nature of the Group’s
activities and the degree to which the businesses change and
evolve in the relatively short term. The directors considered the
Group’s profitability, cash flows and key financial ratios over this
period and the potential impact that the principal risks and
uncertainties set out on pages 78 to 86 could have on future
performance, solvency or liquidity of the Group and its resilience
to threats to its viability posed by severe but plausible scenarios.
Building on the analysis performed as part of the going concern
review, sensitivity analysis was applied to these metrics
and the projected cash flows were stress tested against
a range of scenarios.
The directors considered the level of performance that would
cause the Group to exhaust its available liquidity, the financial
implications of making any strategic acquisitions and a variety
of additional potentially adverse factors including long-term
reputational damage, macroeconomic influences such as
fluctuations in commodity markets and climate-related business
risks. The impact of potential mitigating actions under the
Group’s control were also considered in this analysis. The Group
is highly diversified operating in 56 countries in different markets,
sectors, customer groups, geographies and products. While the
principal risks considered all have the potential to affect future
performance, none of them are considered individually or
collectively to threaten the viability of the Company for the
period of the assessment. The Group has a track record of
delivering strong cash flows. This has been more than sufficient
to meet not only our ongoing financing obligations but also
to fund the Group’s expansionary capital investment.
The Board’s treasury policies are in place to maintain a strong
capital base and manage the Group’s balance sheet and liquidity
to ensure long-term financial stability. These policies are the
basis for investor, creditor and market confidence and enable
the successful development of the business. The financial
leverage policy requires that, in the ordinary course of business,
the Board prefers to see the Group’s ratio of net debt including
lease liabilities to adjusted EBITDA to be well under 1.5x. At the
end of this financial year, the financial leverage ratio was 0.7x.
In addition, the Group requires a certain level of total liquidity
at all times. At the end of the financial year, the Group had total
cash, cash equivalents and current asset investments of £1.7bn
and an undrawn committed Revolving Credit Facility of £1.5bn.
The Group’s committed Revolving Credit Facility is free of
performance covenants and matures in 2029.
In April 2024, S&P Global Ratings reaffirmed their assignment
to the Group of an ‘A’ grade long-term issuer credit rating.
The Group’s access to a diverse funding base is supported
by the existing £400m public bond due in 2034. Even in a worst-
case scenario, with risks modelled to materialise simultaneously
and for a sustained period, the possibility of the Group having
insufficient resources to meet its financial obligations is
considered remote. Based on this assessment, the directors
confirm that they have a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due over the three-year period
to 18 September 2027.
Going concern
After making enquiries, the Board has a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the
consolidated financial statements. The forecast for the going
concern assessment period to 28 February 2026 has been
updated for the business’s latest trading in October and is the
best estimate of cash flow in the period.
The Board’s treasury policies are in place to maintain a strong
capital base and manage the Group’s balance sheet and liquidity
to ensure long-term financial stability. These policies are the
basis for investor, creditor and market confidence and enable the
successful development of the business. The financial leverage
policy requires that, in the ordinary course of business, the Board
prefers to see the Group’s ratio of total net debt including lease
liabilities to adjusted EBITDA to be well under 1.5x. At the end of
this financial year, the financial leverage ratio was 0.7x. At the
end of the financial year, the Group had total cash, cash
equivalents and current asset investments of £1.7bn and an
undrawn committed Revolving Credit Facility of £1.5bn. The
Revolving Credit Facility is free of performance covenants and
matures in 2029, after a further one year extension was made in
April 2024. The $100m of outstanding private placement notes
were repaid on 2 April 2024, after which point Group funding is
not subject to financial performance covenants.
In reviewing the cash flow forecast for the period, the directors
reviewed the trading for both Primark and the food businesses in
light of the experience gained from events of the last three years
of trading and emerging trading patterns. The directors have a
thorough understanding of the risks, sensitivities and
judgements included in these elements of the cash flow forecast
and have a high degree of confidence in these cash flows.
As a downside scenario, the directors considered the adverse
scenario in which inflationary costs are not fully recovered, high
levels of volatility in key commodities prices without price
adjustments, adverse movement to the cash conversion cycle
within the Group and server IT outages leading to extended
periods of non-operation. This downside scenario was modelled
without taking any mitigating actions within their control. Under
this downside scenario the Group forecasts liquidity throughout
the period.
In addition, the directors also considered the circumstances
which would be needed to exhaust the Group’s total liquidity
over the assessment period – a reverse stress test. This
indicates that, on top of the downside scenario outlined above,
annual profit before tax would need to decline by 17% without
any price increases or other mitigating actions being taken
before total liquidity is exhausted. The likelihood of these
circumstances is considered remote for two reasons. Firstly,
over such a period, management could take substantial
mitigating actions, such as reviewing pricing, taking cost-cutting
measures and reducing capital investment. Secondly, the Group
has significant business and asset diversification and would be
able to, if it were necessary, dispose of assets and/or businesses
to raise considerable levels of funds.
The Strategic Report was approved by the Board and signed
on its behalf
Michael McLintock
Chairman
George Weston
Chief Executive
Eoin Tonge
Finance Director
VIABILITY STATEMENT AND GOING CONCERN
Viability statement and going concern
Associated British Foods plc | 87 | Annual Report 2024
Michael McLintock
Chairman
Dear fellow shareholders
I am pleased to present the Associated British Foods plc Corporate
Governance Report for the year ended 14 September 2024.
Our Company continues to operate with its clear sense of social
purpose – to provide safe, nutritious and affordable food, and
clothing that is great value for money.
This year marks our first combined report for the Group.
Our four values, namely respecting everyone’s dignity, acting
with integrity, progressing through collaboration and delivering
with rigour, are illustrated throughout this Annual Report,
including through the various case studies, through our Section
172 Statement on pages 48 to 53 and through the Responsibility
section on pages 54 to 65. This is supplemented by our newly
updated Responsibility section of our website at:
www.abf.co.uk/responsibility.
Operating under our clear sense of social purpose, the Board
consciously decides to give a high degree of autonomy to
the executive teams who run the businesses within our five
divisions. This empowers those executive teams to make
proactive decisions according to the conditions in the relevant
markets or geographies in which they operate. This also means
that decisions are taken at the level which we consider to be
the most effective, but with the oversight of the Board and with
the support of the resources and expertise from throughout
the broader Group. We consider this devolved model to be
a distinctive and very positive characteristic of ABF.
The Board continues to be kept informed about, and engages
with, the individual businesses through regular updates by
the executive directors and through annual updates by senior
management of the businesses, as well as visits by directors
to different businesses.
This gives the Board the opportunity to provide effective
guidance and constructive challenge to management.
We continue to monitor and assess the culture of the Group
in various ways, reflecting its devolved nature. Richard Reid has
continued in his role as our Independent Non-Executive Director
designated for engagement with the workforce and an update
on his activities during the year is provided in Richard’s letter
on pages 95 and 96. Alongside Richard’s activities, culture is
monitored through director and senior executive visits to sites,
business divisions’ updates to the Board (including on workforce
engagement), input from our Speak Up programme and the annual
talent review and update to the Board from the Chief People and
Performance Officer.
On succession planning at Board level, there have been several
changes since the start of the last financial year. Kumsal Bayazit
Besson was appointed as an Independent Non-Executive Director
and as a member of the Audit and Remuneration Committees
on 1 December 2023, shortly before our last AGM. Wolfhart
Hauser stepped down from the Board on 18 January 2024,
having served nine years as a director. We are very grateful
to Wolfhart for his service to the Board and to the Company.
Most recently, as announced in September 2024, Loraine
Woodhouse was appointed as an Independent Non-Executive
Director and as a member of the Audit and Remuneration
Committees on 1 October 2024. It is intended that Loraine
will chair the Audit Committee from 24 April 2025, with Richard
Reid having reached nine years as a Non-Executive Director.
We greatly appreciate the additional skills, insights and
experience that our Non-Executive Directors bring to the Board.
We continue to meet the commitments and aspirations around
Board composition as set out in our Board Diversity Policy. Details
on gender and ethnic diversity both at Board level and at senior
executive level below this are set out in further detail in the
Nomination Committee Report.
We will again hold a physical AGM in December 2024 and all
directors will be standing for election or re-election. As was the
case last year, we will also stream the event online for those
shareholders who are not able to attend in person. Please note,
however, that you will not be able to vote or ask questions
on the day if you do not attend in person, so please vote in
advance by proxy and submit any questions in advance if you
cannot attend. Details on how to do so are provided in the Notice
of Annual General Meeting 2024. We look forward to seeing
as many of you as possible on the day.
Michael McLintock
Chairman
CORPORATE GOVERNANCE
Chairman’s introduction
Associated British Foods plc | 88 | Annual Report 2024
Compliance with the
UK Corporate Governance Code
As a company listed on the Equity Shares Commercial
Companies category in the UK, the Company is reporting in
accordance with the 2018 UK Corporate Governance Code
(‘2018 Code’). The 2018 Code sets out standards of good
practice in relation to: (i) board leadership and company
purpose; (ii) division of responsibilities; (iii) board composition,
succession and evaluation; (iv) audit, risk and internal
control; and (v) remuneration. The 2018 Code is published
by the UK Financial Reporting Council (‘FRC’) and a copy
is available from the FRC website: www.frc.org.uk.
The Board takes its compliance with the 2018 Code
seriously. The Board considers that the Company has,
throughout the year ended 14 September 2024, applied
the principles and complied with all the provisions set
out in the 2018 Code.
The Company’s disclosures on its application of the principles of the 2018 Code can be found on the following pages:
Board leadership and company purpose
See pages 92 to 96
Chairman’s introduction
See page 88
Leadership, values, culture and purpose
See pages 8 to 13; 54 to 65; 92 to 96
Strategy
See pages 8 to 13; 92 to 93
Stakeholder and shareholder engagement
See pages 48 to 53; 58 to 61; 92 to 96
Division of responsibilities
See page 97 to 98
Commitment, development and information flow
See pages 97 to 98
Composition, succession and evaluation
See pages 97; 99 to 100
Board evaluation
See page 99 to 100
Nomination Committee Report
See pages 101 to 103
Audit, risk and internal control
See pages 104 to 110
Risks, viability and going concern
See pages 78 to 87
Audit Committee Report
See pages 104 to 110
Remuneration
Directors’ Remuneration Report
See pages 111 to 127
Associated British Foods plc | 89 | Annual Report 2024
Michael McLintock
Chairman
Michael was appointed a director in November 2017 and
Chairman in April 2018. He was formerly Chief Executive of
M&G, retiring in 2016, having joined the company in 1992 and
been appointed Chief Executive in 1997. In 1999 he oversaw the
sale of M&G to Prudential plc where he served as an Executive
Director from 2000 until 2016. Previously he held roles in
investment management at Morgan Grenfell and in corporate
finance at Morgan Grenfell and Barings.
Other appointments:
• Trustee of the Grosvenor Estate
• Non-Executive Chairman of Grosvenor Group Limited
• Chairman of The Investor Forum CIC
• Member of the advisory board of Bestport Private Equity Limited
• Member of the Takeover Appeal Board
• Member of the MCC Committee
George Weston
Chief Executive
George was appointed to the Board in April 1999 and took up
his current appointment as Chief Executive in April 2005. In his
former roles at Associated British Foods, he was Managing
Director of Westmill Foods, Allied Bakeries and George Weston
Foods Limited (Australia).
Other appointments:
• Non-Executive Director of Wittington Investments Limited
• Trustee of the Garfield Weston Foundation
• Trustee of the British Museum
Key to Board Committees
Nomination Committee
Audit Committee
Remuneration Committee
Red indicates Committee Chair
Eoin Tonge
Finance Director
Eoin was appointed a director in February 2023 and Finance
Director in April 2023. He previously held positions as the Chief
Financial Officer and Chief Strategy Officer at Marks and
Spencer Group Plc, Chief Financial Officer of Greencore Group
plc and Managing Director of Greencore's grocery division and
Chief Strategy Officer. Eoin has also previously held various
different senior roles within Goldman Sachs.
Other appointments:
• None
Dame Heather Rabbatts
Independent Non-Executive Director
Dame Heather was appointed a director on 1 March 2021 and
has been Senior Independent Director since 1 May 2023.
Heather has held a number of executive and non-executive roles
including in local government, infrastructure, media and sports.
She has previously been a Non-Executive Director of Grosvenor
Britain & Ireland, a Non-Executive Director of Kier Group plc and
was the first woman on the Board of the Football Association in
over 150 years. She continues to work in film and sports.
Other appointments:
• Senior Independent Non-Executive Director of M&C Saatchi plc
• Chair of Soho Theatre
Emma Adamo
Non-Executive Director
Emma was appointed a director in December 2011. She was
educated at Stanford University and has an MBA from INSEAD.
She has served as a director/trustee on a number of non-profit
and Foundation boards in the UK and Canada.
Other appointments:
• Director of Wittington Investments Limited
• Director of the Weston Family Foundation
CORPORATE GOVERNANCE CONTINUED
Board of Directors
Associated British Foods plc | 90 | Annual Report 2024
Graham Allan
Independent Non-Executive Director
Graham was appointed a director in September 2018 and
became Chair of the Remuneration Committee in May 2023.
Graham was formerly the Group Chief Executive of Dairy Farm
International Holdings Limited, a pan-Asian retailer. Prior to
joining Dairy Farm, he was President and Chief Executive Officer
at Yum! Restaurants International. Graham has previously held
various senior positions in multinational food and beverage
companies with operations across the globe and has lived
and worked in Australia, Asia, the US and Europe.
Other appointments:
• Senior Independent Director of Intertek Group Plc
• Senior Independent Director of InterContinental Hotels Group
PLC
• Non-Executive Director of Americana Restaurants International
PLC
• Non-Executive Chairman of Bata International
• Director of IKANO Pte Ltd
• Strategic Advisor to Nando's Group Holdings Limited
Kumsal Bayazit Besson
Independent Non-Executive Director
Kumsal was appointed a director on 1 December 2023. Kumsal
is currently Chief Executive Officer of Elsevier, a global
information analytics company that helps institutions and
professionals progress science, advance healthcare and improve
performance. Since 2004, Kumsal has held multiple
management positions at RELX Group, including as Chief
Strategy Officer, President of Reed Exhibitions and, until 2023,
as Chair of the RELX Technology Forum, responsible for
technology, risk management and cyber security strategy across
the RELX Group. Prior to joining RELX, Kumsal spent several
years at Bain & Company in its New York, Los Angeles,
Johannesburg and Sydney offices.
Other appointments:
• Chief Executive Officer of Elsevier
• Non-Executive Director of Preqin
Annie Murphy
Independent Non-Executive Director
Annie was appointed a director in September 2023. Annie has
held senior roles at fast-moving consumer goods and retail
companies including PepsiCo and Procter & Gamble and, most
recently, as SVP, Global Chief Commercial Officer - Brands and
International at Walgreens Boots Alliance until January 2023.
Other appointments:
• Deputy Chair and Board member of the British Beauty Council
Richard Reid
Independent Non-Executive Director
Richard was appointed a director and Chair of the Audit
Committee in April 2016. He was formerly a Partner at KPMG
LLP ('KPMG'), having joined the firm in 1980. From 2008, Richard
served as London Chairman at KPMG until he retired from that role
and KPMG in September 2015. Previously, Richard was KPMG’s
UK Chairman of the High Growth Markets group and Chairman
of the Consumer and Industrial Markets group.
Other appointments:
• Chairman of National Heart and Lung Foundation
• Deputy Chairman of Berry Bros & Rudd
• Senior Advisor to Bank of China UK
• Warden and Member of the Court of the Goldsmiths' Company
Loraine Woodhouse
Independent Non-Executive Director
Loraine was appointed a director on 1 October 2024. Loraine was
formerly Finance Director of Waitrose, Chief Financial Officer of
Hobbs, Finance Director of Capital Shopping Centres Limited and
Finance Director of Costa Coffee. Loraine was also previously Chief
Financial Officer of Halfords Group plc and a Non-Executive
Director of The Restaurant Group plc and of Bristol Water plc.
Other appointments:
• Non-Executive Director of The British Land Company plc
• Non-Executive Director of Pennon Group plc
• Trustee of the Zoological Society of London
Associated British Foods plc | 91 | Annual Report 2024
The Board
The Board is collectively responsible to the Company’s
shareholders for the direction and oversight of the Company
to ensure its long-term success. This includes setting the
Company’s purpose, which is described in the Strategic Report.
The Board met regularly throughout the year to approve the
Group’s strategic objectives, to lead the Group within a framework
of effective controls which enable risk to be assessed and
managed, and to ensure that sufficient resources are available
to meet the objectives set.
There are a number of matters which are specifically reserved
for the Board’s approval. These are set out in a clearly defined
schedule which is available to view on the corporate governance
section of the Company’s website: www.abf.co.uk.
Certain specific responsibilities are delegated to the Board
Committees, being the Nomination, Audit and Remuneration
Committees, which operate within clearly defined terms of
reference and report regularly to the Board. Membership of
these Committees is reviewed annually. Minutes of Committee
meetings are made available to all directors on a timely basis.
For further details, please see the Reports of each of these
Committees below.
Purpose, business model and strategy
The purpose of the Company is to provide safe, nutritious
and affordable food, and clothing that is great value for money.
A description of the Company’s business model for sustainable
growth in support of this purpose is set out in the Group
business model and strategy section on pages 8 to 13.
This section provides an explanation of the basis on which
the Group generates and preserves value over the long term
and its strategy for delivering its objectives. Our ‘Managing
our risks’ section starting on page 78 provides details on how
opportunities and risks to the future of the business have
been considered.
Culture and values
At their simplest, our culture and our values (respecting
everyone’s dignity, acting with integrity, progressing through
collaboration, and delivering with rigour) centre around doing
the right thing. Our devolved decision-making model empowers
the people closest to the markets to make the right judgements
to mitigate risks and to find opportunities, but importantly with
encouragement, engagement and support from the centre.
That support can take the form of resources and expertise or
it can be provided through challenge. We believe the route to
enduring value creation lies in our focus on building objectives
from the bottom up rather than from the top down.
Culture is monitored by the Board through a number of different
approaches. Richard Reid’s work on workforce engagement,
with the support of the Chief People and Performance Officer,
continues to provide assurance to the Board on processes in
place within businesses to ensure two-way communication
and to test for positive cultures. Richard’s letter on pages 95
and 96 sets out further detail on how he has engaged with the
businesses during this financial year and the overarching themes
of such engagement. This is supported by business presentations
from senior management of each business division to the
Board (which include information on safety performance and
health and wellbeing initiatives, as well as the individual
businesses’ workforce engagement initiatives, including
results and outcomes).
It is essential that the businesses not only engage with and
assess culture within their workforce, but that they also respond
and take action. Some of the initiatives that our businesses
have taken arising from people surveys and other listening and
engagement interactions, including examples of how we reward
and invest in our workforce, are set out in Richard Reid’s letter
on pages 95 and 96.
In addition, other directors have carried out a range of visits and
other engagement events, further details of which can be found
on page 98.
Whistleblowing
The Group’s Speak Up Policy contains arrangements for an
independent external service provider to receive, in confidence
(where legally permitted), reports of any inappropriate, improper,
dishonest, illegal or dangerous behaviour for reporting to the
Audit Committee as appropriate. The Audit Committee reviews
reports and the actions arising from internal audit and reports
on these to the Board.
The Audit Committee reports to the full Board on (or all Board
members attend the relevant parts of the Audit Committee
meeting to obtain details of) the analysis of reported allegations
which is compiled by the Director of Financial Control.
Arrangements are in place for proportionate and independent
investigations of allegations and for follow-up action.
Further details of the Speak Up Policy and processes in place,
as well as information on the status of notifications received
in the year to 30 June 2024 are provided on page 61.
Conflicts of interest procedure
The Company has procedures in place to deal with the situation
where a director has a conflict of interest. As part of this
process, the Board:
• considers each conflict situation separately on its
particular facts;
• considers the conflict situation in conjunction with the rest of
the conflicted director’s duties under the Companies Act 2006;
• keeps records and Board minutes as to authorisations granted
by directors and the scope of any approvals given; and
• regularly reviews conflict authorisation.
Engagement with stakeholders
Our scale, employing approximately 138,000 people and
with operations in 56 countries across the world, means that
our activities matter to, or have an impact on, many people.
As a result, the Company engages regularly with its stakeholders
at Group and/or business level, depending on the particular issue.
At a Group level we engage with a variety of stakeholder groups
including shareholders, governments, media and investors
through a range of methods. As part of daily business activities
and through structured processes, our businesses routinely
engage with customers, suppliers, regulators and industry bodies.
More detail about our approach to stakeholder engagement
and specific activities this year can be found on pages 48 to 53
(which contain our Section 172 Statement on engaging with
our stakeholders), pages 54 to 65 (on responsibility) and in the
letter on pages 95 and 96 from Richard Reid, our Independent
Non-Executive Director for engagement with the workforce.
CORPORATE GOVERNANCE CONTINUED
Board leadership and company purpose
Associated British Foods plc | 92 | Annual Report 2024
We have a dedicated in-house team to manage communications
with our shareholders, making sure we respond directly,
as appropriate, to any matters regarding their shareholdings.
We also have a dedicated team at Equiniti Limited (our share
registrar) which looks after their needs. To improve security
and efficiency of communications and to reduce the amount
of paper we use, we seek to use e-communications to
communicate with shareholders wherever possible and
encourage shareholders to switch to e-communications in order
to reduce our paper usage further. We also encourage the direct
payment of dividends into bank or building society accounts.
We also engage with shareholders, both institutional investors
and individual shareholders, in a number of other ways:
Meetings with institutional shareholders
The Chairman meets with the Company’s largest institutional
shareholders to hear their views and discuss any issues or
concerns. During the year, the Chairman held meetings with a
number of institutional shareholders (either in person or virtually)
and discussed a range of topics including the Company’s
strategy and approach to corporate governance, Board
composition, ESG and remuneration-related matters. The
Remuneration Committee Chair also meets with investors and
analysts to answer queries and respond to feedback around
remuneration issues.
On the day of the announcement of the interim and final results,
and on the day of our January and September trading updates,
the Company’s largest shareholders, together with financial
analysts, are invited to a presentation with a question and
answer session by the Chief Executive and Finance Director,
with webcast presentations of the results available for all
shareholders through the Company’s website. Following
the results, the Chief Executive, Finance Director and/or Head of
Investor Relations holds one-to-one and group meetings (virtually
where necessary) with institutional shareholders and potential
investors. These views are then reported back to the Board
as a whole at the following Board meeting to ensure that the
Board is aware of any issues that the Company’s largest
shareholders are concerned with.
During the year, the Board has maintained an active programme
of engagement with institutional investors, including
engagement by the Chief Executive and/or Finance Director, the
purpose of which is both to develop shareholders’ understanding
of the Company’s strategy, operations and performance and to
provide the Board with an awareness of the views of significant
shareholders. At each Board meeting, the directors are briefed
on shareholder meetings that have taken place and on feedback
received, including any significant concerns raised.
AGM
All shareholders are invited to attend the AGM in person,
have access to our website and the choice to receive
electronic communications.
The AGM provides an opportunity for the directors to engage
with shareholders, answer their questions and to meet them
informally. The AGM will be held on Friday 6 December 2024
at 11.00 am at the Congress Centre, 28 Great Russell Street,
London WC1B 3LS. It is planned that shareholders will be able to
attend in person. There will also be the possibility for registered
shareholders to follow proceedings through a livestream on the
AGM website. We encourage all shareholders not attending in
person on the day to vote by proxy in advance of the meeting
on all resolutions put forward as shareholders will not be
able to vote on the day if they are not attending in person.
Shareholders will also have the opportunity to put their questions
to the Board either at the meeting (if attending in person) or in
advance of the meeting. Further details are included in the
Notice of AGM and documentation accompanying the proxy
form. All votes are taken by a poll. In 2023, voting levels at the
AGM were over 85% of the Company’s issued share capital.
Annual Report
We publish a full Annual Report and Accounts each year which
contains a Strategic Report, responsibility section, corporate
governance section and financial statements. The Annual Report
is available in paper format for those who request it and on our
website: www.abf.co.uk.
Responsibility/ESG
The Director of Legal Services and Company Secretary acts
as a focal point for communications on matters of corporate
responsibility. During the year, the Company responded to
requests for meetings, telephone meetings and written
information from both existing and potential shareholders and
research bodies on a broad range of environmental, social and
governance risk matters, including matters related to climate
change, water and greenhouse gas risk management, supply
chain management, sustainable agriculture, human rights,
employee welfare, gender balance and human capital
development. The Director of Legal Services and Company
Secretary and the Group Corporate Responsibility Director
regularly meet with investors, potential investors and other
stakeholders to discuss corporate responsibility matters.
This year marks our first combined report for the Group and our
ESG activities are illustrated throughout this Annual Report,
including through the various case studies, through our Section
172 Statement on pages 48 to 53 and through the Responsibility
section on pages 54 to 65. This is supplemented by our newly
updated Responsibility section of our website at:
www.abf.co.uk/responsibility.
Website (www.abf.co.uk)
Our website is regularly updated and contains a comprehensive
range of information on our Company. There is a section
dedicated to investors which includes our investor calendar,
financial results, presentations, press releases and contact
details. The area dedicated to individual shareholders is an
essential communication method. It includes information
on shareholder news, administrative services and
contact information.
Associated British Foods plc | 93 | Annual Report 2024
During the financial year, key activities of the Board included:
Strategy
• conducting regular strategy update sessions with the divisions in Board meetings; and
• receiving a strategy update from the Director of Business Development.
Acquisitions/
disposals/projects
• considering/approving various acquisitions including the acquisitions of: The Artisanal Group
in Australia; Omega Yeast Labs in the US; Mapo in Italy; and Romix in the UK;
• considering and approving capital investment including in relation to: the opening of new Primark
stores and upgrades to existing stores; investment in Primark digital strategy and technology,
including websites and self-checkouts; expansion of the AB World Foods production facility in Nowa
Sol, Poland; the replacement flour mill in Ballarat, Victoria, Australia; and the building of a new yeast
plant in Northern India;
• getting updates on and considering/approving various large technology projects; and
• receiving regular updates on proposed acquisitions and disposals.
Financial and
operational
performance
• receiving regular reports to the Board from the Chief Executive and Finance Director;
• receiving, on a rolling basis, senior management presentations from Group business segments;
• considering the Group budget for the 2024/25 financial year;
• approving the Company’s trading updates, full year results and interim results;
• deciding to recommend payment of a 2023 final dividend and a special dividend (paid in January
2024) and deciding to pay an interim dividend (paid in July 2024);
• deciding to approve a further £500m buyback in November 2023 and an additional £100m buyback
extension in September 2024; and
• approving banking mandate updates and various other treasury-related matters.
Governance and
risk
• reviewing the material financial and non-financial risks facing the Group’s businesses;
• receiving regular updates on corporate governance and regulatory matters;
• participation in, as well as subsequent review and discussion of recommendations from, the external
Board evaluation;
• receiving reports from the Board Committee Chairs as appropriate;
• confirming directors’ independence and conflicts of interest;
• reviewing and approving gender pay reporting and the Modern Slavery and Human Trafficking
Statement; and
• undertaking appropriate preparations for the holding of the AGM and, subsequently, discussing any
issues arising from the AGM.
Corporate
responsibility
• continuing to support the enhanced activity on ESG matters;
• receiving regular management reports from the businesses including on ESG matters as well as
annual presentations on health and safety and on environmental issues; and
• non-executive directors receiving one-on-one briefings on non-financial reporting including in relation
to climate-related financial disclosures and the EU Corporate Sustainability Reporting Directive.
Investor relations
and other
stakeholder
engagement
• one or more of the Chairman, Chair of the Remuneration Committee, Chief Executive and Finance
Director attending meetings with institutional investors to hear their views; and
• receiving reports on investor relations activities and regular feedback on directors’ meetings held
with institutional investors.
People
• approving the appointment of Loraine Woodhouse as an Independent Non-Executive Director
of the Company with effect from 1 October 2024;
• Richard Reid, Independent Non-Executive Director for engagement with the workforce, reviewing
the work of the businesses to ensure that the voice of the workforce is heard and acted upon
– see further details on pages 95 and 96;
• receiving updates from senior management of the businesses on how they have engaged with their
workforces and the outcomes of such engagement; and
• receiving and considering presentations on succession planning and talent management from the
Chief People and Performance Officer.
CORPORATE GOVERNANCE CONTINUED
The work of the Board during the year
Associated British Foods plc | 94 | Annual Report 2024
Richard Reid
Independent Non-Executive Director
Our Group’s success is driven by the people within all our
businesses, where we foster cultures and implement processes
that ensure employee voices are encouraged and valued at every
level, from local teams to the boardroom. We are committed to
listening to the insights and acting on the feedback of our people.
Given the diversity and complexity of our Group, and our
decentralised operating model, maintaining close and open
communication between leaders and their teams is vital. They
are expected to listen attentively and respond thoughtfully to
suggestions, considering the local context and cultural nuances.
George Weston sets the tone for this continuous engagement,
setting expectations with divisional chief executives and their
senior management teams. As the Independent Non-Executive
Director for engagement with the workforce, my role is to
provide assurance to the Board that employees have effective
routes to share their opinions and concerns, and to test our
culture to ensure it enables this two-way flow of communication
across the Group.
While local cultures may vary, our divisional chief executives are
tasked with embedding the Group’s overarching culture and
values, and this remains a priority for the Board. Since my last
update, I have spoken with a variety of groups and individuals,
from those in offices and factories to stores and fields. These
interactions have given me valuable insights into how employees
view their business and the broader Group.
In the last 12 months I have connected with:
• employees across a range of functions within AB Mauri’s
India, EMEA and North American businesses, including
engineering, marketing and sales;
• members of Primark’s Technical and Digital Strategy teams;
• retail staff, supervisors and managers at Primark’s Marble
Arch store;
• employees attending a Values session for retail staff across
Primark;
• operators, supervisors and managers at our British Sugar
operation in Bury;
• colleagues within the central finance team within ABF Sugar;
• employees leading and working on production lines in Allied
Bakeries’ Trafford site;
• colleagues in the operations and office functions within our
Westmill grocery business; and
• employees across our Spanish sugar business Azucarera,
including those with international careers, in early stages of
their career, participating in development programmes, or in
the operations and engineering teams.
The openness and honesty of our people during these
conversations and their active participation in discussing both
successes and areas for improvement is immensely appreciated
by me. This reflects the strong cultures that our leaders have
cultivated across the Group and the openness of our divisional
chief executives to this process. Through these interactions I
also meet with union or employee group representatives, such
as those focused on engagement in our North American AB
Mauri business. All of these interactions enable me to bring the
perspective of our people into our Boardroom discussions.
I am also grateful for the input from fellow Board members
who have visited our businesses including British Sugar,
Twinings, Jordans Dorset Ryvita and Primark during the year.
It has been reassuring to see positive themes from prior years
remain and strengthen, as well as new insights come to the fore.
Themes include:
• people enjoy their work, feel respected and value the
accountability and empowerment within the ABF devolved
operating model;
• people appreciate the culture and values, often seeing them
as distinct from other organisations;
• there is a strong sense of care, both for the work they do and
from the businesses themselves;
• clear and frequent communication is valued, and there is no
such thing as too much communication. This is especially true
as businesses deliver significant investment or change projects;
• the role of leaders has a significant impact on engagement;
• where new leaders step into role, smooth transitions rely on
open communication and engagement with the people in the
business;
• personal and career development remains important and
people value the ability to explore opportunities across the
broader Group;
• line managers play a critical role in supporting individuals; and
• our people see the opportunity for greater technological
enablement of our businesses.
Independent Non-Executive Director for engagement with the workforce
Associated British Foods plc | 95 | Annual Report 2024
In my discussions, I make a point of ensuring employees are
aware of our Speak Up Policy, which provides a pathway for
raising concerns outside of local leadership. This is a vital
channel, ensuring all employees can voice concerns, even in
sensitive situations (see page 61 for more details).
These discussions are only one part of the ABF approach to
workforce engagement. In addition, I and the executive also:
• discuss workforce engagement in detail at two Board
meetings a year, where the Chief People and Performance
Officer presents a group wide view, including metrics, process
improvements, and feedback loops highlighting “we asked,
you said, we listened, we did” case studies. This helps identify
ongoing areas for improvement that are shared with the
businesses;
• include workforce engagement in every divisional chief
executive’s presentation at Board meetings, ensuring a
comprehensive review of the Group;
• hold an annual Board session dedicated to talent, succession,
and inclusion progress;
• have in-depth discussions between the Chief Executive, Chief
People and Performance Officer, and divisional leaders on
organisation, talent and workforce engagement;
• bring together the divisional People and Performance/HR
Directors, led by the Chief People and Performance Officer, to
share learnings on workforce engagement across the Group. I
attend these sessions annually to share insights from my
employee discussions; and
• have many other connections and workforce engagement
discussions with leadership teams throughout the year.
94% of our businesses regularly conduct employee engagement
surveys through partners including Willis Towers Watson,
Mercer, Workday Peakon, Korn Ferry and Great Place to Work.
This year those businesses running engagement surveys invited
88% of their people to participate, with a response rate of 81%.
The insights from these surveys are presented to the Board and
I am pleased to report that 96% of the businesses running
surveys showed engagement scores above 70%.
Our businesses continue to expand the reach of engagement,
despite local technological, legal, and cultural norms occasionally
presenting challenges. However, we expect leaders to find
suitable ways to assess and enhance engagement moving
forward and this year have been pleased to see the use of other
methods of understanding the engagement of our people such
as focus groups, listening sessions, onboarding check-ins after
90 days or similar, exit interviews and strong working
relationships with union or employee representatives.
We continue to see businesses acting on employee feedback
gathered through surveys and other channels, including:
• AB World Foods using a Kaizen platform so people can
highlight, and be recognised for, cost-saving opportunities;
• ACH Mexico, AB Mauri and Primark, being examples of
businesses increasing the use of career conversations in
supporting people’s development;
• AB Sports Nutrition, Anthony’s Goods and Germains, amongst
others, enhancing or introducing business-wide
communications, helping employees to more fully understand
the organisational performance and priorities;
• our Australian bakery business Tip Top involving a wide group
of people in the development of its 2030 strategy. This will
continue into next year and enhance the engagement with and
awareness of the business priorities;
• businesses, including Twinings and AB Mauri, reviewing their
reward and recognition mechanisms and helping employees
better understand their benefits; and
• Allied Bakeries and ACH changing maternity or parental
leave provision.
In summary, over the past 12 months, I have seen clear
evidence that the processes are in place for employees to share
their ideas, concerns and opinions. These feedback loops have
become an essential part of our culture, reinforcing that voices
are heard and acted upon. Through direct interactions with
George Weston, divisional leaders and employees, and through
survey data and Board presentations, I see healthy, open
cultures across ABF where our people’s voices matter.
The Board and I remain committed to holding our leadership
accountable and ensuring that all employees across ABF can
contribute to our shared success and thrive in their roles.
Richard Reid
Independent Non-Executive Director
CORPORATE GOVERNANCE CONTINUED
Board leadership and company purpose continued
Associated British Foods plc | 96 | Annual Report 2024
Board composition
At the date of this Annual Report, the Board comprises
the following directors:
Chairman
Michael McLintock
Executive Directors
George Weston (Chief Executive)
Eoin Tonge (Finance Director)
Non-Executive Directors
Dame Heather Rabbatts (Senior Independent Director)
Emma Adamo
Graham Allan
Kumsal Bayazit Besson – appointed 1 December 2023
Annie Murphy
Richard Reid
Loraine Woodhouse – appointed 1 October 2024
Wolfhart Hauser retired from the Board with effect from
18 January 2024.
Biographical and related information about the directors as at
the date of this Annual Report are set out on pages 90 and 91.
We consider the size of the Board to be large enough to ensure
diversity and an appropriate variety of skills whilst still being
small enough to ensure a good quality of debate. This view
was supported by the externally facilitated Board performance
review in 2024, further details of which are set out on pages
99 and 100.
Chairman and Chief Executive
The roles of the Chairman and the Chief Executive are separately
held and the division of their responsibilities is clearly established,
set out in writing and agreed by the Board to ensure that no
one has unfettered powers of decision. Copies are available
on request.
The Chairman is responsible for the operation and leadership
of the Board, ensuring its effectiveness and setting its agenda.
The Chairman works with the Company Secretary to set the
agenda for Board meetings. The Chairman promotes a culture
of openness and debate, which has been a key factor behind
seeking to keep the size of the Board relatively small, and
facilitates constructive Board relations and contributions from
all non-executive directors, as well as ensuring that directors
receive accurate, timely and clear information. The Chairman
was independent on appointment.
The Chief Executive is responsible for leading and managing the
Group’s business within a set of authorities delegated by the
Board and for the implementation of Board strategy and policy.
Authority for the operational management of the Group’s
business has been delegated to the Chief Executive for
execution or further delegation by him for the effective day-to-
day running and management of the Group. The chief executive
of each business within the Group has authority for that business
and reports directly to the Chief Executive.
Senior Independent Director
The purpose of this role is to act as a sounding board for the
Chairman and to serve as an intermediary for other directors
where necessary. The Senior Independent Director is also
available to shareholders should a need arise to convey concerns
to the Board which they have been unable to convey through
the Chairman or through the executive directors. The role of the
Senior Independent Director is set out in writing and a copy
is available on request.
The Senior Independent Director leads the non-executive
directors’ appraisal of the Chairman’s performance, which this
year was carried out with the assistance of the external Board
review facilitator as part of the Board performance review.
The Senior Independent Director otherwise meets with the
non-executive directors as necessary.
The non-executive directors
The non-executive directors, in addition to their responsibilities
for strategy and business results, play a key role in providing a
solid foundation for good corporate governance and ensure that
no individual or group dominates the Board’s decision-making.
They each occupy, or have occupied, senior positions in industry
which, taken together, cover a broad range of jurisdictions,
bringing valuable external perspectives to the Board’s
deliberations through their experience and insight from different
sectors and geographies. This enables them to contribute
significantly to Board decision-making by providing constructive
challenge and holding to account both management and
individual executive directors against agreed performance
objectives. The Board is of a sufficiently small size to be
conducive to open and candid discussions. The formal letters
of appointment of non-executive directors are available for
inspection at the Company’s registered office.
Board Committees
The written terms of reference for the Nomination, Audit and
Remuneration Committees are available on the Company’s
website, www.abf.co.uk, and hard copies are available on
request. Further details on the work of each of the Committees
are included later in this Corporate Governance Report.
Board independence
Emma Adamo is not considered by the Board to be independent
in view of her relationship with Wittington Investments Limited,
the Company’s majority shareholder. Emma was appointed in
December 2011 to represent this shareholding on the Board.
The Board considers that the other non-executive directors are
independent in character and judgement and that they are each
free from any business or other relationships which would
materially interfere with the exercise of their independent
judgement. Further details of their independence are included
in the Notice of AGM. At least half the Board, excluding the
Chairman, are independent non-executive directors.
Commitment
The letters of appointment for the Chairman and the
non-executive directors set out the expected time commitment
required of them and are available for inspection by any person
during normal business hours at the Company’s registered office
and at the AGM. Other significant commitments of the Chairman
and non-executive directors are disclosed prior to appointment
and subsequent appointments require prior approval.
Division of responsibilities
Associated British Foods plc | 97 | Annual Report 2024
During the financial year, Dame Heather Rabbatts was appointed
to the board of M&C Saatchi plc as Senior Independent Director.
This appointment was not considered to impact Dame Heather’s
ability to discharge her responsibilities to the Company.
The Company does not have a specific policy on the number of
external appointments that executive directors and non-executive
directors can have. Before appointing a director or approving
a director to take on additional significant appointments, the
Board and the Chair will consider the relevant director's external
commitments and will want to ensure that they can make a
good and engaged contribution to the Company. This is therefore
considered better to assess on a case-by-case basis rather than
by adopting a specific policy.
Board meetings
The Board held eight meetings during the financial year.
Periodically, Board meetings are held away from the corporate
centre in London.
The attendance of the directors at Board and Committee meetings
during the year is shown in the table below. All of the directors
attended those meetings that they were eligible to attend other
than George Weston who was unable to attend one Board
meeting for personal reasons and Dame Heather Rabbatts who
was unable to attend one Board meeting and one Remuneration
Committee meeting (both on the same day) for personal
reasons. If a director is unable to participate in a meeting either
in person or remotely, the Chairman will solicit their views on key
items of business in advance of the relevant meeting and share
these with the meeting so that they are able to contribute
to the debate.
Senior executives below Board level are invited, when
appropriate, to attend Board meetings and to make presentations
on the results and strategies of their business units. Papers for
Board and Committee meetings are generally provided to
directors a week in advance of the meetings.
Information flow
The Company Secretary manages the provision of information to
the Board at appropriate times in consultation with the Chairman
and Chief Executive and ensures that the Board has the policies,
processes, time and resources it needs in order to function
effectively and efficiently. This includes the provision of corporate
governance updates to all Board members in the Board pack for
each meeting. In addition to formal meetings, the Chairman and
Chief Executive maintain regular contact with all directors. The
Chairman holds informal meetings or calls with non-executive
directors, without any of the executives being present, to
discuss issues affecting the Group, as appropriate. All directors
have access to the Company Secretary, who is responsible for
advising the Board on all governance matters.
Board induction
The Company provides all non-executive directors with a tailored
and thorough programme of induction, which is facilitated by the
Chairman and the Company Secretary and which takes account of
prior experience and business perspectives of the relevant director
and the Committees on which he or she serves. This typically
includes training, as well as site visits and meetings with
management to get to know the businesses better.
Shortly after her appointment, Kumsal Bayazit Besson had
meetings with various executives at the corporate centre including
the Company Secretary, Chief People and Performance Officer,
Director of Business Performance, Business Development
Director, Director of Corporate Development and M&A and
Director of Corporate Governance.
Kumsal joined Annie Murphy and Dame Heather Rabbatts in
visiting the British Sugar Wissington sugar plant and Riverside
Glasshouse in January 2024 where they attended tours of the
sites and received updates from various members of British
Sugar management. Kumsal also virtually attended a technology
review with Twinings in July 2024.
In October 2023, Annie Murphy visited the Primark Cotton
Project in India with Dame Heather to see the social and
environmental impact of the programme. Annie also visited
Jordans Dorset Ryvita in Biggleswade in October 2023,
attending a factory tour and meeting with senior management,
and Twinings Ovaltine in Andover in November 2023, meeting
with members of senior management and others, including the
heads of master blending, brand and HR international supply chain.
Annie also met with senior management at Primark in Dublin
in February 2024 and attended store visits.
Loraine Woodhouse joined the Board with effect from
1 October 2024 and an induction is being arranged, including
visits to businesses.
Training, development and engagement
The Chairman has overall responsibility for ensuring that the
directors receive suitable training to enable them to carry out
their duties and is supported in this by the Company Secretary.
Directors are also encouraged personally to identify any additional
training requirements that would assist them in carrying out their
role. Training is provided in briefing papers, such as the regular
update from the Company Secretary as part of the Board
pack ahead of each meeting covering developments in legal,
regulatory and governance matters, and by way of presentations
and meetings with senior executives or other external sources.
The Chief Executive and Finance Director encourage other
Board members to visit operations either with them, with other
directors, or on their own. The Board meeting in May 2024 was
held in Madrid and included a visit to the Primark Gran Via store.
For details of connections by Richard Reid with a variety of
businesses across the Group, please see pages 95 and 96.
Attendance of directors at Board and Committee
meetings
Board
Audit
Committee
Nomination
Committee
Remuneration
Committee
Michael McLintock
8/8
-
2/2
4/4
George Weston
7/8
-
-
-
Eoin Tonge
8/8
-
-
-
Dame Heather Rabbatts
7/8
4/4
2/2
3/4
Emma Adamo
8/8
-
-
-
Graham Allan
8/8
4/4
2/2
4/4
Kumsal Bayazit Besson
7/7
3/3
-
3/3
Wolfhart Hauser
2/2
2/2
1/1
2/2
Annie Murphy
8/8
4/4
-
4/4
Richard Reid
8/8
4/4
2/2
4/4
Loraine Woodhouse only became a director on 1 October 2024
and therefore was not entitled to attend any Board meetings
or Committee meetings in the year to which this Corporate
Governance Report relates.
CORPORATE GOVERNANCE CONTINUED
Division of responsibilities continued
Associated British Foods plc | 98 | Annual Report 2024
Board composition and succession
Details of the composition of the Board are on page 97. There is a formal and transparent procedure for the appointment of new
directors to the Board. Details are available in the Nomination Committee Report on pages 101 to 102 which also provides details
of the Committee’s activities, including the approval of the appointment of Loraine Woodhouse as an Independent Non-Executive
Director as well as details of Board and senior management succession plans and diversity.
Election and re-election of directors
In accordance with the provisions of the 2018 Code, at the 2024 AGM to be held in December, all directors currently in office
will be proposed for election/re-election.
Board performance review
2023 internal Board performance review
As reported in our last Annual Report, an internal Board performance review was carried out in July and August 2023. A summary
of the recommendations and actions arising from the 2023 Board review and their outcomes during 2024 are set out below:
Recommended actions from 2023 internal review
Outcome
Increase the businesses’ discussions with the Board
on the competitive environment and growth areas
Discussion of competitive environment and growth areas
is considered to have increased as part of the businesses’
presentations to the Board
Consider aligning the Board’s ‘deep dives’ on businesses
with the Audit Committee’s ‘deep dives’ on the audit
The Board and Audit Committee agendas have been adapted
to follow this recommendation
Consider how to facilitate more business visits
by non-executive directors
Non-executive directors have made visits together and this
continues to be an area of focus – see examples on page 98
Continue to consider how ESG risks and opportunities
are addressed most effectively
Alignment of audit deep dives with strategy presentations
by the businesses assists with considering how ESG and risk
opportunities can be assessed most effectively
2024 externally facilitated Board performance review
The Senior Independent Director (SID), Chief People and
Performance Officer (CPPO) and Director of Corporate
Governance drew up a shortlist of three potential candidates
to carry out the externally facilitated Board performance review.
The shortlist featured a candidate who had recently been met
with, a candidate who had previously been engaged by the
Company for performance review services and a candidate
recommended by the SID and CPPO. A meeting was held with
the one candidate who had neither been previously engaged by
the Company or recently met with.
Following an assessment of the candidates, the preferred
candidate, Independent Board Evaluation (IBE), was put forward
to meet with the Chairman. The appointment of IBE as the
external Board evaluator, to be led by Ffion Hague of IBE, was
ratified by the Board. The Director of Corporate Governance was
responsible for providing IBE with the necessary access and
support to conduct the review.
IBE has not previously carried out an evaluation of the Board.
Our CPPO had experience of IBE’s board evaluation work at
other companies and our SID had sat on the British Council
board with Ffion Hague in the late 1990s/early 2000s. This prior
experience of Ffion Hague’s and IBE’s capabilities and work with
other boards assisted in supporting the Board’s decision as to
why IBE was qualified to carry out the review.
Aside from this, neither Ffion Hague (who led the review) nor
IBE has any other connection with the Company or any individual
directors. Ffion Hague is a signatory to, and IBE is a supporter of,
the International Register of Board Reviewers.
The Company confirms that it considers that it has abided by the
Principles of Good Practice for listed companies using external
board reviewers and that the content of this disclosure has been
reviewed and approved by IBE.
How the 2024 Board performance review was conducted
The review was conducted according to the guidance in
the 2018 Code and was facilitated by Ffion Hague at IBE.
A comprehensive brief was given to Ffion Hague by the
Chairman, the SID, the Chief Executive and the Director
of Corporate Governance in May 2024. Ffion Hague observed
main Board and Committee meetings in early September 2024
and support materials for briefing purposes were provided by the
Company. The objective of the review was to assess all aspects
of the effectiveness of the Board, its Committees, the Chairman
and the individual directors.
Composition, succession and evaluation
Associated British Foods plc | 99 | Annual Report 2024
In June and July 2024, detailed interviews were conducted
with every Board member. All participants were interviewed
by Ffion Hague according to a set agenda, tailored for the Board.
In addition, IBE interviewed members of the senior management
team and advisers, including the Primark CEO, the UK Grocery
CEO, the Company Secretary, the CPPO, the Director of
Financial Control, the Group Corporate Responsibility Director,
the Group Reward Director, the Senior Statutory Auditor from
EY and the external remuneration adviser from Deloitte.
Initial conclusions were discussed with the Chairman and Ffion
Hague presented her findings to the Board at its October 2024
meeting, where the Board discussed the review. Ffion Hague
gave feedback to Committee Chairs on the performance of
each Committee and discussed the Board’s feedback for the
Chairman with the SID. In addition, the Chair received a report
with feedback on individual directors’ performance.
Outcome of the 2024 Board performance review
The headline findings of the review were that this is a
high-performing Board with thoughtful and engaged directors.
It is an intellectually curious Board with very positive dynamics
characterised by mutual respect among Board members.
All Board members described the Board culture as excellent
and regarded it as a key strength.
The review found that all members of the Board are encouraged
to speak freely on any issue and to be as active as they wish
in visiting companies and meeting members of the
executive teams.
Board and Committee meetings were considered to be tightly
run, with additional scheduled private sessions and other
opportunities at which more confidential matters can be
discussed. The tone in Board meetings was considered to be
mature and supportive but with frank feedback and challenge
woven into the mix.
Any suggestions for improvement recognised in the review were
identified as being in the spirit of continuous improvement rather
than suggesting the need for any major changes. These primarily
related to:
• considering how best to enshrine the positive aspects
of the Board’s culture through the succession process;
• encouraging challenge by the Board in areas where it is most
needed, such as by creating more opportunities to debate
longer-term issues with less focus on day-to-day performance;
and
• considering the evolution of the Board Committee structure,
and in particular keeping under review the potential creation
of a committee to oversee ESG disclosure and/or key risks.
Actions proposed to be taken forward from the review are:
• an increased focus on succession planning;
• a more tailored induction process for newly-appointed
directors;
• more formal post-acquisition reviews to identify good practice
and lessons learnt; and
• a continued focus on reducing the length of Board papers.
In light of the recent appointments of Annie Murphy (in
September 2023), Kumsal Bayazit Besson (in December
2023) and Loraine Woodhouse (in October 2024), the findings
of the Board performance review will not have any impact
on Board composition.
The Board (apart from the Chairman) also reviewed the
performance of the Chairman during the year. This review
concluded that the Chairman continues to bring leadership
and insight and supports a highly inclusive culture at the Board.
In particular it was noted that two new non-executive directors
have been appointed since September 2023 and that the
Chairman has significantly contributed to discussions being open
and fluid, enabling the new members to fully participate in Board
deliberations from the beginning of their terms. It was also noted
that the Company covers a complex range of global businesses
together with a retail business of significant scale and that
the Chairman navigates these demands with great dexterity,
ensuring that key issues are given the time for effective Board
discussion and governance. The Chairman was also considered
to be continuing to evolve the capabilities of the Board,
developing strong relationships with the executive together
with robust independence.
CORPORATE GOVERNANCE CONTINUED
Composition, succession and evaluation continued
Associated British Foods plc | 100 | Annual Report 2024
Michael McLintock
Nomination Committee Chair
Members
At the date of this report, the following are members
of the Nomination Committee:
• Michael McLintock (Chair)
• Graham Allan
• Annie Murphy (since 4 September 2024)
• Dame Heather Rabbatts
• Richard Reid
All members served on the Committee throughout the year,
with the exception of Annie Murphy who was appointed on
4 September 2024. Wolfhart Hauser served on the Committee
until he stepped down from the Board on 18 January 2024.
Meetings
The Committee met two times during the year under review.
Primary responsibilities
In accordance with its terms of reference, the Nomination
Committee’s primary responsibilities included:
• leading the process for Board appointments (both executive
and non-executive) and making recommendations to the Board;
• reviewing regularly the Board structure, size and composition
(including skills, knowledge, experience and diversity) and
recommending any necessary or desirable changes;
• ensuring effective succession plans are in place for the Board
and senior management and overseeing the development
of a diverse pipeline for orderly succession based on merit and
objective criteria, with due regard to diversity of age, gender,
ethnicity, sexual orientation, disability, educational, professional
and socio-economic background, cognitive and personal
strengths; and
• making recommendations to the Board on the Board’s policy
on boardroom diversity and inclusion, its objectives and linkage
to strategy, how it has been implemented and progress
on achieving its objectives.
Governance
Members of the Nomination Committee are appointed
by the Board from amongst the directors of the Company,
in consultation with the Committee Chair. The Nomination
Committee comprises a minimum of three members at any
time, a majority of whom are independent non-executive
directors. A quorum consists of two members, being either
two independent non-executive directors or one independent
non-executive director and the Chairman.
Only members of the Nomination Committee have the right to
attend Nomination Committee meetings. Other individuals such
as the Chief Executive, the Finance Director, members of senior
management, the Chief People and Performance Officer and
external advisers may be invited to attend meetings as and
when appropriate.
The Nomination Committee may take outside legal or other
professional advice on any matters covered by its terms of
reference at the Company’s expense but within any budgetary
constraints imposed by the Board.
The Nomination Committee Chair reports the outcome of
meetings to the Board to the extent that any Board members
are not in attendance at the relevant meeting.
The terms of reference of the Nomination Committee are
available on the Corporate Governance section of the Company’s
website: www.abf.co.uk.
Committee activities during the year
Succession planning
The Board continues to emphasise generalist skills in Board
recruitment as well as continuing to factor in all forms
of diversity, including gender and ethnic diversity.
A detailed review of succession planning in respect of senior
management was presented to the Board by the Chief People
and Performance Officer at the Board meeting as part of the
ABF Group Talent update in July 2024.
This review included a focus on our ability to make internal
appointments and the use of more purposeful approaches to
succession planning at the most senior levels within the Group,
including through deployment of a range of groupwide and
bespoke development initiatives to help develop high potential
talent. In this regard, the Board was briefed on three out of five
divisional chief executive appointments in the last few years
having been internal appointments, and on the desire to increase
the proportion of internal appointments to other senior positions.
There is also a continued focus on creating more options for
succession among under-represented groups in the workforce,
specifically women. There continue to be a number of
development initiatives to support diverse talent across the
Group (e.g. the Executive Leadership Programme; the Senior
Executive Induction Programme; the Finance Excellence
Programme (Finex); and the Business Acumen Programme) as
well as inclusion and diversity networks throughout the Group
(e.g. Women in ABF and the Group DEI Network, further details
of which are provided on page 59).
Nomination Committee Report
Associated British Foods plc | 101 | Annual Report 2024
Board appointments process
The process for making new appointments is led by the
Chairman. Where appropriate, external, independent consultants
are engaged to conduct a search for potential candidates,
who are considered on the basis of their skills, experience and
fit with the existing members of the Board. The Nomination
Committee has procedures for appointing directors and these
are set out in its terms of reference.
During the year, the Chairman led the process for conducting
a search for a new non-executive director who was also
intended to become Audit Committee Chair after Richard Reid
reaches nine years’ tenure as a Non-Executive Director in April
2025. Lygon Group, an external executive search consulting firm,
was engaged to help identify potential candidates. In line with
our Board Diversity Policy, the firm is a signatory to the Voluntary
Code of Conduct for Executive Search Firms for best practice
on gender and ethnic diversity. The firm is also a signatory to the
Change the Race Ratio. Lygon has no other connection to the
Company or the directors.
Potential candidates were considered on the basis of their
skills and experience, particularly financial skills given the nature
of this specific role, as well as their fit with the Group’s strategy.
Following a rigorous process, including interviews with members
of the Nomination Committee and the Chief Executive, and
following the recommendation of the Nomination Committee, in
September 2024 the Board approved the appointment of Loraine
Woodhouse as an Independent Non-Executive Director with
effect from 1 October 2024.
Election/re-election of directors
The Nomination Committee members considered the
composition of the Board and the time needed to fulfil the roles
of Chairman, Senior Independent Director and Non-Executive
Director. They also considered the election/re-election of directors
prior to their recommended approval by shareholders at the AGM.
Performance review
The performance of the Nomination Committee was considered
as part of the externally facilitated Board performance review.
The overall view was that it was highly effective, having steered
the appointments process to recent highly successful
appointments, whilst maintaining a process that is both flexible
and appropriate.
Diversity and inclusion
We operate under the principle that we should be a Group
where anyone with ambition and talent can have a great career,
regardless of their age, gender, ethnicity, sexual orientation,
disability, educational and socio-economic background, cognitive
and personal strengths or any of the other qualities that make
people unique. This applies as much to the Board and to its
Remuneration, Audit and Nomination Committees as it does
to the Group as a whole.
In furtherance of this principle, we aim to ensure that there
are no obstacles or barriers to people joining the Group and
progressing their careers with us. Across all of our operations,
our objective is that everyone should feel respected, valued
and included.
In November 2022, the Board approved a Board Diversity Policy
which reflects the Group’s principles as outlined above and
is available at: www.abf.co.uk/about-us/corporate-governance/
policies.
This Board Diversity Policy is reviewed annually and was taken
into account in the appointment approved during the course
of the financial year.
The objectives under our Board Diversity Policy include:
• continuing to engage executive search firms who have signed
up to the Voluntary Code of Conduct for Executive Search
Firms for best practice on gender and ethnic diversity;
• committing to maintain at least 33% female directors on
the Board and at least one person from an ethnic minority
background on the Board;
• aspiring to have at least 40% female directors on the Board
by the end of 2025 and to maintain at least one woman
in the Chair, Chief Executive, Finance Director or Senior
Independent Director role;
• with a view to attracting non-executive directors from
more diverse socio-economic backgrounds, reducing the
shareholding expectation for non-executive directors to
‘a meaningful level of shareholding’; and
• overseeing the development of a diverse pipeline for orderly
succession of appointments to both the Board and to senior
management, so as to maintain an appropriate balance
of skills and experience, taking into account the challenges
and opportunities facing the Group. This includes continuing
to receive detailed annual updates on succession planning and
talent management from the Chief People and Performance
Officer in recognition of their importance in supporting the
Group’s strategy.
By way of update, with the appointment of Loraine Woodhouse
on 1 October 2024 (including Loraine’s appointment to both
the Audit and Remuneration Committees), the Board currently
has 50% female representation. The Board therefore continues
to meet its aspiration as set out in the Board Diversity Policy
to have at least 40% female representation on the Board,
as recommended by the FTSE Women Leaders Review.
We also continue to meet our commitment to have at least one
person from an ethnic minority background as a director, in line
with the recommendations of the Parker Review. The Board
has also maintained at least one woman in the Chair, Chief
Executive, Finance Director or Senior Independent Director role,
with Dame Heather Rabbatts having taken up the position of
Senior Independent Director in May 2023.
The Board also reviews progress on diversity and inclusion
with the divisions as part of their business updates and with
the Chief People and Performance Officer as an element of
the talent and succession planning reviews. Details of other
initiatives across the Group to promote diversity are provided
on pages 59 to 60, as is information on the gender balance of
senior managers and direct reports.
On the next page we also publish a director skill sets matrix
which seeks to provide a snapshot of the diversity of skills of the
Board, as well as gender and ethnicity representation at Board
and executive management levels.
Michael McLintock
Nomination Committee Chair
CORPORATE GOVERNANCE CONTINUED
Associated British Foods plc | 102 | Annual Report 2024
Director skill sets
Food/
Retail
Financial/
Audit/Risk
Legal/
Public
Policy
Senior
Executive
Cybersecurity
/IT
Comms/
Marketing/
Customer
Service
Environmental/
Social
International
markets
Technical/
Engineering
Health and
Safety
Manufacturing/
Supply chain
Michael McLintock
l
l
l
l
George Weston
l
l
l
l
l
l
l
l
Eoin Tonge
l
l
l
l
l
l
l
l
l
Dame Heather
Rabbatts
l
l
l
l
l
l
l
Emma Adamo
l
l
l
Graham Allan
l
l
l
l
l
l
l
l
l
l
Kumsal Bayazit
Besson
l
l
l
l
l
l
l
l
l
Annie Murphy
l
l
l
l
l
l
Richard Reid
l
l
l
l
l
l
Loraine
Woodhouse
l
l
l
l
l
l
Board and executive management gender and ethnicity metrics
As at 14 September 2024, the Company had met the three UK Listing Rules targets for gender and ethnic Board diversity.
This remains the case as at the date of this Annual Report.
The following metrics set out the range of gender and ethnicity as they relate to our Board and executive management as at 14
September 2024. The percentage of Board members that are women has increased from 33% at the end of the previous financial
year to 44% (and as at November 2024, following the appointment of Loraine Woodhouse, stands at 50%). In the absence of an
Executive Committee, by ‘executive management’ we refer to the most senior level of managers reporting to the Chief Executive,
including the Company Secretary but excluding administrative and support staff, in accordance with the definition in the UK Listing
Rules. The process by which diversity data was collected was, where permitted by relevant laws, to contact relevant individuals and
ask them how they identified using the categorisations set out in the UK Listing Rules. Where we already held gender or ethnicity
data for executives, with consents in place to use it for reporting on an anonymous basis, we used that data.
Gender representation at Board and executive management level (at 14 September 2024)
Number of
Board
members
% of the
Board
Number of
senior Board
positions
(CEO, CFO,
SID, Chair)
Number in
executive
management
% of
executive
management
Men
5
56 %
3
14
87.5 %
Women
4
44 %
1
2
12.5 %
Not specified/prefer not to say
–
–
0
0
–
Ethnicity representation at Board and executive management level
Number of
Board
members
% of the
Board
Number of
senior Board
positions
(CEO, CFO,
SID, Chair)
Number in
executive
management
% of
executive
management
White British or other White (incl. minority white groups)
7
78 %
3
12
75 %
Mixed Multiple Ethnic Groups
1
11 %
1
–
–
Asian/Asian British
–
–
–
1
6.3 %
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group
1
11 %
–
1
6.3 %
Not specified/prefer not to say*
–
–
–
2
12.5 %
* This includes, as permitted by UKLR 6.6.13R, those people in respect of whom data protection laws in the relevant jurisdiction (e.g. France) prevent the
collection or publication of some or all of the personal data required to be disclosed.
Associated British Foods plc | 103 | Annual Report 2024
Richard Reid
Audit Committee Chair
Members
At the date of this report, the members and Chair of the Audit
Committee are as follows:
• Richard Reid (Chair)
• Graham Allan
• Kumsal Bayazit Besson (appointed 1 December 2023)
• Annie Murphy
• Dame Heather Rabbatts
• Loraine Woodhouse (appointed 1 October 2024)
All members served on the Committee throughout the year
with the exception of Kumsal Bayazit Besson, who was
appointed on 1 December 2023. Loraine Woodhouse was
appointed after the end of the financial year on 1 October 2024.
Wolfhart Hauser served on the Committee until stepping down
from the Board on 18 January 2024.
It is intended that Loraine Woodhouse will chair the Audit
Committee from 24 April 2025, with Richard Reid having
reached nine years as a Non-Executive Director.
Meetings
The Committee met four times in the year under review.
The Committee’s agenda is linked to events in the Group’s
financial calendar.
Primary responsibilities
In accordance with its terms of reference, the Audit
Committee’s primary responsibilities include:
Financial reporting
• monitoring the integrity of the Group’s financial statements
and any formal announcements relating to the Company’s
performance, reviewing significant financial reporting judgements
contained in them before their submission to the Board;
• informing the Board of the outcome of the Group’s external
audit and explaining how it contributed to the integrity
of financial reporting;
• reviewing and challenging, where necessary, the consistency
of, and changes to, accounting and treasury policies; whether
the Group has followed appropriate accounting policies and
made appropriate estimates and judgements; the clarity and
completeness of disclosure; significant adjustments resulting
from the audit; and compliance with accounting standards;
Narrative reporting
• at the Board’s request, reviewing the content of the Annual
Report and advising the Board on whether, taken as a whole, it
is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company’s position
and performance, business model and strategy;
• where requested by the Board, assisting in relation to the
Board’s robust assessment of the principal and emerging risks
facing the Company and the prospects of the Company for
the purposes of disclosures required in the Annual Report;
• reviewing and approving statements to be included in the
Annual Report concerning the going concern statement
and viability statement;
Internal financial controls
• reviewing the effectiveness of the Group’s internal financial
controls and internal control and risk management systems
(including the systems to identify, manage and monitor
financial risks);
Whistleblowing and fraud
• reviewing and reporting to the Board on the Group’s
arrangements for its employees and contractors to raise
concerns, in confidence, about possible improprieties in
financial reporting, financial and management accounting,
or any other matters. The objective is to ensure that
arrangements are in place for the proportionate and
independent investigation of such matters and appropriate
follow-up action;
• reviewing the Group’s policies, procedures and controls for
preventing and detecting fraud, preventing bribery, identifying
money laundering, and ensuring compliance with legal and
regulatory requirements;
Internal audit
• monitoring, reviewing and assessing the effectiveness and
independence of the Group’s internal audit function in the
context of the Group’s overall risk management system;
• considering and approving the remit of the internal audit function,
ensuring it has adequate resources and appropriate access to
information to enable it to perform its function effectively; and
External audit
• overseeing the relationship with the Group’s external auditor,
including considering when the external audit contract should
be put out to tender (adhering to any legal requirements for
tendering or rotation), reviewing and monitoring the external
auditor’s independence and objectivity, agreeing the scope
of their work and fees paid to them for audit, assessing the
effectiveness of the audit process, and agreeing the policy
in relation to the provision of non-audit services.
CORPORATE GOVERNANCE CONTINUED
Audit Committee Report
Associated British Foods plc | 104 | Annual Report 2024
Governance
The Audit Committee comprises a minimum of three members,
all of whom are independent non-executive directors of the
Company. Two members constitute a quorum.
The Committee Chair fulfilled the requirement that there must
be at least one member with recent and relevant financial
experience and competence in accounting or auditing (or both)
during the year. In addition, the Committee as a whole has
competence in the sectors in which the Company operates.
All Committee members are expected to be financially literate
and to have an understanding of the following areas:
• the principles of, and developments in, financial reporting
including the applicable accounting standards and statements
of recommended practice;
• key aspects of the Company’s operations including corporate
policies and the Group’s internal control environment;
• matters which may influence the presentation of accounts
and key figures;
• the principles of, and developments in, company law and other
relevant corporate legislation;
• the role of internal and external auditing and risk management;
and
• the regulatory framework for the Group’s businesses.
The Committee invites the other non-executive directors, Chief
Executive, Finance Director, Group Financial Controller, Director
of Financial Control and senior representatives of the external
auditor to attend its meetings in full, although it reserves
the right to request any of these individuals to withdraw.
Other senior managers are invited to present such reports
as are required for the Committee to discharge its duties.
During the year, the Committee held four meetings with the
external auditor without any executive members of the Board
being present.
The Committee has unrestricted access to Company documents
and information, as well as to employees of the Company and
the external auditor.
The Committee may take independent professional advice
on any matters covered by its terms of reference at the
Company’s expense.
The Committee Chair reports the outcome of meetings to the
Board (to the extent that any Board members were not in
attendance at the relevant meeting).
The performance of the Audit Committee was considered
as part of the 2024 externally facilitated Board performance
review carried out during the financial year. This found that the
Committee was working smoothly and was very well chaired,
with a thorough approach to governance.
The terms of reference of the Audit Committee can be viewed
on the Investors section of the Company’s website:
www.abf.co.uk.
The Committee advises the Board to enable it to meet its
responsibilities under audit, risk and internal control.
Board responsibilities on audit, risk and
internal control
The Board recognises that its responsibility to present a fair,
balanced and understandable assessment extends to interim and
other price-sensitive public reports, reports to regulators, and
information required to be presented by statutory requests.
The directors confirm that they consider that the Annual Report
and financial statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for
shareholders to assess the Company’s position, performance,
business model and strategy. The Company produced a paper
in this respect, prepared by the Group Financial Controller,
containing an assessment of the Annual Report and financial
statements, including a summary by division of performance
issues in the year and one-off items which benefitted
performance. This paper was presented to the Audit Committee.
Risk management and internal control
The Board acknowledges its overall responsibility for monitoring
the Group’s risk management and internal control systems to
facilitate the identification, assessment and management of
risk and the protection of shareholders’ investments and the
Group’s assets.
The directors confirm that there is a process for identifying,
evaluating and managing the risks faced by the Group and the
operational effectiveness of the related controls, which has
been in place for the year under review and is up to the date
of approval of the Annual Report. The directors also confirm
that they have regularly monitored the effectiveness of the risk
management and internal control systems (which cover all
material controls including financial, operational and compliance
controls) utilising the review process set out below.
Standards
There are guidelines on the minimum groupwide requirements
for health and safety and environmental standards. There are
also guidelines on the minimum level of internal control that
each of the divisions should exercise over specified processes.
Each business has developed and documented policies and
procedures to comply with the minimum control standards
established, including procedures for monitoring compliance and
taking corrective action. The board of each business is required
to confirm twice yearly that it has complied with these policies
and procedures.
High-level controls
All businesses prepare annual operating plans and budgets
which are updated regularly. Performance against budget is
monitored at business unit level and centrally, with variances
being reported promptly. The cash position at Group and
business level is monitored constantly and variances from
expected levels are investigated thoroughly. Clearly defined
guidelines have been established for capital expenditure and
investment decisions. These include the preparation of budgets,
appraisal and review procedures and delegated authority levels.
Associated British Foods plc | 105 | Annual Report 2024
Financial reporting
Detailed management accounts are prepared every four
weeks, consolidated in a single system and reviewed by senior
management and the Board.
They include a comprehensive set of financial reports and
key performance indicators covering commercial and operational
issues. Performance against budgets and forecasts is discussed
regularly at Board meetings and at meetings between
operational and Group management. The adequacy and
suitability of key performance indicators are reviewed regularly.
All chief executives and finance directors of the Group’s
operations are asked to sign an annual confirmation that their
business has complied with the Group Accounting Manual in the
preparation of consolidated financial statements and specifically
to confirm the adequacy and accuracy of accounting provisions.
Internal audit
The Group’s internal audit activities are co-ordinated centrally
by the Director of Financial Control, who is accountable to the
Audit Committee.
Our internal audit team adopts a risk-based approach to develop
and deliver a balanced internal audit plan that provides assurance
over our businesses’ key risks and related controls. Where
issues are identified, action plans to make any necessary control
improvements are agreed with business leaders.
All Group businesses are required to comply with the Group’s
Financial Control Framework which sets out minimum control
standards. Our internal audit plans are designed to include
coverage of financial controls to provide assurance over how
our businesses meet the requirements of the Financial
Control Framework.
Assessment of principal risks
The directors confirm that, during the year, the Board has carried
out a robust assessment of the principal and emerging risks
facing the Group, including those that could threaten its business
model, future performance, and solvency or liquidity.
A description of these principal and emerging risks and how they
are being managed and mitigated is set out on pages 78 to 86.
Annual review of the effectiveness of the systems of risk
management and internal control
During the year, the Board reviewed the effectiveness of the
Group’s systems of risk management and internal control
processes embracing all material systems, including financial,
operational and compliance controls, to ensure that they remain
robust. The review covered the financial year to 14 September
2024 and monitored for any material changes up to the date of
approval of this Annual Report. The review included:
• the annual risk management review, a comprehensive process
identifying the key external and operational risks facing the
Group and the controls and activities in place to mitigate them,
the findings of which are discussed with each member of the
Board individually (refer to the risk management section on
pages 78 to 86 for details of the process undertaken); and
• the annual assessment of internal control, which, following
consideration by the Audit Committee, provided assurance to
the Board around the control environment and processes in
place around the Group, specifically those relating to internal
financial control.
The Board evaluated the effectiveness of management’s
processes for monitoring and reviewing risk management and
internal control. No significant failings or weaknesses were
identified by the review and the Board is satisfied that, where
areas of improvement were identified, processes are in place
to ensure that remedial action is taken and progress monitored.
The Board confirmed that it was satisfied with the outcome of
the review of the effectiveness of the systems and processes
and that they complied with the requirements of the 2018 Code.
Going concern and viability
The 2018 Code requires the directors to assess and report on
the prospects of the Group over a longer period. This longer-term
viability statement and statement of going concern is set out on
pages 87.
Audit Committee activities during the year
In order to fulfil its terms of reference, the Audit Committee
receives and reviews presentations and reports from the
Group’s senior management, consulting as necessary with
the external auditor.
Monitoring the integrity of reported financial information
Ensuring the integrity of the financial statements and
associated announcements is a fundamental responsibility
of the Audit Committee.
During the year it formally reviewed the Group’s interim and
annual reports.
These reviews considered:
• the description of performance in the Annual Report to ensure
it was fair, balanced and understandable;
• the accounting principles, policies and practices adopted in the
Group’s financial statements, any proposed changes to them,
and the adequacy of their disclosure;
• important accounting issues or areas of complexity, the
actions, estimates and judgements of management in relation
to financial reporting and in particular the assumptions
underlying the going concern and viability statements;
• any significant adjustments to financial reporting arising from
the audit; and
• the Assessment of Controls Effectiveness (ACE) programme.
The Audit Committee also considered:
• reporting in line with the recommendations and recommended
disclosures of the Task Force on Climate-related Financial
Disclosures (TCFD) and the Companies Act 2006 climate-
related disclosure requirements;
• tax contingencies, compliance with statutory tax obligations
and the Group’s tax policy; and
• the Group’s treasury policies.
A briefing meeting was also held separately with each Audit
Committee member during the course of the year on the EU
Corporate Sustainability Reporting Directive and on non-financial
reporting more generally.
CORPORATE GOVERNANCE CONTINUED
Associated British Foods plc | 106 | Annual Report 2024
Significant accounting issues considered by the Audit
Committee in relation to the Group’s financial statements
A key responsibility of the Committee is to consider the
significant areas of complexity, management judgement and
estimation that have been applied in the preparation of the
financial statements. The Committee has, with support from
Ernst & Young LLP (‘EY’) as external auditor, reviewed the
suitability of the accounting policies which have been adopted
and whether management has made appropriate estimates
and judgements.
Set out below are the significant areas of accounting judgement
or management estimation and a description of how the
Committee concluded that such judgements and estimates were
appropriate. These are divided between those that could have a
material impact on the financial statements and those that are
less likely to have a material impact but nevertheless, by their
nature, required a degree of estimation.
Areas of significant accounting judgement and
estimation material to the Group financial
statements
Audit Committee assurance
Impairment of goodwill, intangibles, property,
plant and equipment, investment properties and
right-of-use assets
Assessment for impairment involves comparing the
book value of an asset with its recoverable amount,
being the higher of value-in-use and fair value less
costs to sell. Value-in-use is determined with
reference to projected future cash flows discounted at
an appropriate rate. Both the cash flows and the
discount rate involve a significant degree of estimation
uncertainty.
The Committee considered the reasonableness of cash flow projections
which were based on the most recent budget approved by the Board and
reflected management’s expectations of sales growth, operating costs and
margins based on past experience and external sources of information.
The Committee focused on Don, Illovo Mozambique, Jordans Dorset Ryvita,
Azucarera and Vivergo.
Long-term growth rates for periods not covered by the annual budget were
challenged to ensure that they were appropriate for the products, industries
and countries in which the relevant cash-generating units operate.
The Committee reviewed and challenged the key assumptions made in
deriving these projections: discount rates, growth rates, and expected
changes in production and sales volumes, selling prices and direct costs. The
Committee also considered the adequacy of the disclosures in respect of the
key assumptions and sensitivities. Refer to notes 8 ,9, 10 and 11 to the
financial statements for more details of these assumptions.
The Committee was satisfied that the discount rate assumptions
appropriately reflected current market assessments of the time value of
money and the risks associated with the particular assets. The other key
assumptions were all considered to be reasonable.
On the basis of the key assumptions and associated sensitivities, it is
considered that the charge of £35m, £18m in Vivergo, £6m in Illovo
Mozambique and £11m in Primark, was appropriately recognised and
included within exceptional items as detailed in notes 8, 9, 10 and 11.
The external auditor undertook an independent audit of the estimates of
value-in-use and fair value less costs to sell, including a challenge of
management’s underlying cash flow projections, long-term growth
assumptions and discount rates. On the basis of its work, and its challenge
of the key assumptions and sensitivities, it considered that the impairment
charges as detailed in notes 8, 9, 10 and 11 were appropriately recognised.
Viability statement and going concern
The Board considered future performance and cash
flows in its going concern assessment, through to
February 2026, and its viability statement over the
next three years.
Management has undertaken a detailed financial
modelling exercise that has considered the impact on
profit, cash and working capital of a number of
potential scenarios.
The Committee has reviewed and challenged the scenarios considered
by management and concluded that these, and the stress-testing scenarios
and assumptions, were appropriate and adequate.
The Committee has reviewed the detailed cash flow forecasts, which
incorporate the mitigating actions proposed by management.
The Committee also reviewed and challenged the reverse stress test
assumptions to confirm the viability of the Group.
The Committee has been kept informed of the impacts of commodity price
pressures on the Group, in particular in our Sugar business, including
accounting matters, going concern and viability considerations. The
Committee has satisfied itself that management has adequately identified
and considered all potentially significant accounting and disclosure matters.
Associated British Foods plc | 107 | Annual Report 2024
Areas of significant accounting
judgement and estimation material
to the Group financial statements
Audit Committee assurance
Post-retirement benefits
Valuation of the Group’s pension
schemes and post-retirement medical
benefit schemes require various
subjective judgements to be made
including mortality assumptions,
discount rates, general and salary
inflation, and the rate of increase for
pensions in payment and those in
deferment.
Actuarial valuations of the Group’s pension scheme obligations are undertaken every three
years in the UK by an independent qualified actuary who also provides advice to
management on the assumptions to be used in preparing the accounting valuations each
year. Actuarial valuations in other jurisdictions are performed as required. Details of the
assumptions made in the current and previous year are disclosed in note 13 of the financial
statements together with the bases on which those assumptions have been made.
The Committee reviewed the assumptions by comparison with externally derived data and
also considered the adequacy of disclosures in respect of the sensitivity of the surplus to
changes in these key assumptions.
Other accounting areas requiring
management judgement
or estimation
Audit Committee assurance
Taxation
Current and deferred tax recognised in
the financial statements is dependent
on subjective judgements as to the
outcome of decisions by tax authorities
in various jurisdictions around the world
and the ability of the Group to use tax
losses within the time limits imposed
by various tax authorities.
The Committee reviews the Group’s tax policy and principles for managing tax risks
annually.
The Committee reviewed and challenged the provisions recorded and the contingent
liabilities disclosed at the balance sheet date and management confirmed that they
represent their best estimate of the financial exposure faced by the Group.
The external auditor explained to the Committee the work that they had conducted during
the year, including how their audit procedures were focused on those provisions requiring
the highest degree of judgement.
The Committee discussed with both management and the external auditor the key
judgements which had been made. The Committee was satisfied that the judgements
were reasonable and that, accordingly, the provision amounts recorded were appropriate.
Misstatements
Management reported to the Committee that they were not aware
of any material or immaterial misstatements made intentionally to
achieve a particular presentation. The external auditor reported to
the Committee the misstatements that they had found in the
course of their work. After due consideration the Committee
concurred with management that these misstatements were not
material and that no adjustments were required.
Internal financial control and risk management
The Committee is required to assist the Board to fulfil its
responsibilities relating to the adequacy and effectiveness of
the control environment, controls over financial reporting and the
Group’s compliance with the 2018 Code. To fulfil these duties,
the Committee (or the Board as a whole) reviewed:
• the external auditors’ summary of management letters
and their Audit Committee reports;
• internal audit findings on key audit areas and any significant
deficiencies in the financial control environment;
• reports on the systems of internal financial control and risk
management, including the preparatory work for additional
control reviews under the Group’s ACE programme;
• as part of internal audit reports, a high-level assessment of the
adequacy of business continuity plans in place in the Group’s
businesses;
• reports on fraud perpetrated against the Group;
• the Group’s approach to anti-bribery and corruption, and
whistleblowing;
• the Group’s approach to IT and cybersecurity; and
• commodity price challenges and response assurance plan.
Internal audit
The Group’s businesses employ internal auditors (both
employees and resources provided by major accounting firms
other than the firm involved in the audit of the Group (except
where expressly permitted by the Audit Committee)) with skills
and experience relevant to the operation of each business.
All of the internal audit activities are co-ordinated centrally by
the Director of Financial Control, who is accountable to the
Audit Committee.
The Audit Committee is required to assist the Board in fulfilling
its responsibilities for ensuring the capability of the internal audit
function and the adequacy of its resourcing and plans.
The Audit Committee receives regular reports on the results
of internal audit’s work and monitors the status of
recommendations arising. The Committee reviews annually
the adequacy, qualifications and experience of the Group’s internal
audit resources and the nature and scope of internal audit activity
in the overall context of the Group’s risk management system.
To fulfil its duties, the Committee reviewed:
• internal audit’s reporting lines and access to the Committee
and all members of the Board;
• internal audit’s plans and its achievement of the planned activity;
• the results of key audits and other significant findings,
the adequacy of management’s response and the timeliness
of their resolution; and
• changes in internal audit personnel to ensure appropriate
resourcing, skills and experience are put in place.
CORPORATE GOVERNANCE CONTINUED
Associated British Foods plc | 108 | Annual Report 2024
The Group’s Director of Financial Control meets with the Chair of
the Audit Committee as appropriate but at least quarterly,
without the presence of executive management, and has direct
access to the Chairman of the Board.
Whistleblowing and fraud
The Whistleblowing Policy ‘Speak Up’ is designed to protect
ABF’s culture of fairness, trust, accountability and respect,
encouraging effective and honest communication at all levels.
In addition, an independent external service provider receives,
in confidence, complaints on accounting, risk issues, internal
controls, auditing issues and related matters which are reported
to the Audit Committee each quarter as appropriate. Further
details on the Policy can be found on page 92. The Committee
reviewed reports from internal audit and the actions arising
therefrom and reported this to the Board (to the extent any
Board member was not in attendance at the relevant meeting).
The Group’s Anti-fraud Policy is available to all employees via the
ABF intranet and website and states that all employees have a
responsibility for fraud prevention and detection. Any suspicion
of fraud should be reported immediately and will be investigated
vigorously. The Audit Committee reviewed all instances
of fraud perpetrated against the Group and the action taken
by management both to pursue the perpetrators and to
prevent reoccurrences.
External audit
Auditor independence
The Audit Committee is responsible for the development,
implementation and monitoring of policies and procedures
on the use of the external auditor for non-audit services,
in accordance with professional and regulatory requirements.
These policies are kept under review to meet the objective
of ensuring that the Group benefits in a cost-effective manner
from the cumulative knowledge and experience of its auditor,
whilst also ensuring that the auditor maintains the necessary
degree of independence and objectivity. The Committee’s policy
on the use of the external auditor to provide non-audit services is
in accordance with applicable laws and takes into account the
relevant ethical guidance for auditors. Any non-audit work to be
undertaken by the auditor requires authorisation by the Finance
Director, and above a certain threshold, the Audit Committee,
prior to its commencement.
The Committee also ensures that fees incurred, or to be
incurred, for non-audit services, both individually and in
aggregate, do not exceed any limits in applicable law and take
into account the relevant ethical guidance for auditors.
The Committee is required to approve the use of the external
auditor to provide: accounting advice and training; corporate
responsibility and other assurance services; financial due
diligence in respect of acquisitions and disposals; and will
consider other services when it is in the best interests of the
Company to do so, provided they can be undertaken without
jeopardising auditor independence. Tax services including tax
compliance, tax planning and related implementation advice may
not be undertaken by the external auditor except in very
exceptional circumstances where specialist knowledge is
required. The aggregate expenditure with the Group auditor
is reviewed by the Audit Committee. No individually significant
non-audit assignments that would require disclosure were
undertaken in the financial year.
The Company has a policy that any partners, directors or senior
managers hired directly from the external auditor must be pre-
approved by the Chief People and Performance Officer, and the
Finance Director or Group Financial Controller, with the Chair of
the Audit Committee being consulted as appropriate.
The Audit Committee has formally reviewed the independence
of the external auditor. EY has reported to the Committee
confirming that it believes it remained independent throughout
the year, within the meaning of the regulations on this matter
and in accordance with its professional standards.
To fulfil its responsibility to ensure the independence of the
external auditor, the Audit Committee reviewed:
• a report from the external auditor describing arrangements
to identify, report and manage any conflicts of interest, and
policies and procedures for maintaining independence and
monitoring compliance with relevant requirements; and
• the extent of non-audit services provided by the
external auditor.
The total fees paid to EY for the 52 weeks ended 14 September
2024 were £11.6m, of which £1.1m related to non-audit work.
Further details are provided in note 2 to the financial statements.
Auditor effectiveness
To assess the effectiveness of the external auditor,
the Committee reviewed:
• the external auditor’s fulfilment of the agreed audit plan
and variations from it (including changes in perceived audit
risks and the work undertaken by the external auditors to
address those risks);
• reports highlighting the major issues that arose during
the course of the audit;
• feedback from the businesses via questionnaires evaluating
the conduct and performance of each assigned audit team
(including in respect of their planning, challenge and interaction
with the business); and
• a report on EY, as a firm, from the Audit Quality Review Team
(‘AQRT’) of the Financial Reporting Council (‘FRC’) and the
discussions with EY on the contents of such report.
There is regular open communication between EY and the Audit
Committee as well as between EY and the businesses’ senior
management. The Audit Committee holds private meetings with
the external auditor after each Committee meeting to review key
issues within their sphere of interest and responsibility and to
satisfy itself that the audit is of a sufficiently high standard.
During the year, the FRC’s AQR team completed an inspection
of EY’s audit of the Company’s financial statements for the 52
weeks ended 16 September 2023. No key findings arose from
the inspection. Limited improvements were identified as being
required. These related to oversight of journal testing and
revenue testing and oversight of independence of other partners
and staff involved in senior positions. The Committee is satisfied
that the auditor has taken appropriate actions in response to the
findings.
Associated British Foods plc | 109 | Annual Report 2024
To fulfil its responsibility for oversight of the external audit
process, the Audit Committee reviewed:
• the terms, areas of responsibility, associated duties and scope of
the audit as set out in the external auditor’s engagement letter;
• the overall work plan and fee proposal;
• the major issues that arose during the course of the audit
and their resolution;
• key accounting and audit judgements;
• the level of errors identified during the audit; and
• the content of, and any recommendations made by the
external auditor in, their management letters and the adequacy
of management’s response.
Auditor appointment for 2024/25
The Audit Committee reviews annually the appointment of
the auditor, taking into account the auditor’s effectiveness and
independence, and makes a recommendation to the Board
accordingly.
The Company’s current external auditor, EY, was first appointed
at the annual general meeting in December 2015, with effect
from 2016, following the conclusion of a competitive tender
process. The Audit Committee is satisfied with the auditor’s
effectiveness and independence and has recommended to the
Board that EY be reappointed as the Company’s external auditor
for 2024/25. The Board accepted such recommendation.
Auditor tender for 2025/26 onwards
In accordance with applicable law and regulation, the Company is
required to conduct a competitive audit tender in respect of the
audit for the financial year 2025/26 and onwards. The Audit
Committee considered that a competitive tender was in the best
interests of the Company’s shareholders as it allowed the
Company to appoint the audit firm that will provide the highest
quality, most effective and efficient audit. The Company
commenced a competitive audit tender in 2024, earlier than
anticipated in our Annual Report for the year ended 16
September 2023, far enough in advance of appointment to allow
firms to exit relationships which may cause a conflict of interest
or independence issues.
The Audit Committee formed a steering committee to lead on
the audit tender process (the Steering Committee). The Steering
Committee was led by the Chair of the Audit Committee and
also consisted of the Finance Director, the Financial Controller
and Director of Financial Control. Outcomes from Steering
Committee meetings and key actions were discussed with all
members of the Audit Committee.
In December 2023, the Steering Committee notified the four
largest audit firms of the Company’s intention to tender in 2024.
Given the complexity of the Group and global mindset and
coverage required as part of the selection criteria (see further
below), the Steering Committee did not consider any ‘challenger’
firms for this tender.
In January 2024 the Audit Committee was presented with, and
approved via the Steering Committee, the proposed selection
criteria and process. The selection criteria were categorised
under the following headings:
• Global mindset and coverage;
• Culture and approach of the firm;
• Technical capability;
• Tools/digital deployment;
• ESG/non-financial data approach;
• Approach to audit of IT and system change;
• Retail experience; and
• Quality and credentials of key partners.
Although the four largest audit firms were invited to tender, after
significant engagement only two firms decided to participate in
the full tender process. After a detailed process set out below,
EY were selected to continue to be auditor for the Company on
the basis of the criteria set out above.
A timeline and the outcome of the tender process is set out below:
2023
December
Notification of four largest audit firms of the intention
to tender in 2024.
2024
January
Audit Committee confirmation of audit tender timetable,
selection criteria and process.
Firms invited to tender and agreed the process and objectives
and the key requirements from the firms.
February
Launched a dataroom of relevant information for
confirmed bidders.
March to May
Meetings between each of the two bidding firms and ABF
personnel including finance, internal audit, information
technology and regulatory teams.
End of May
Receipt of tenders from the two firms.
June
Presentations from the two tendering firms to the
Audit Committee.
Audit Committee made a recommendation to the Board
Board consideration and approval of Audit Committee
recommendation to appoint EY as auditor for a second
term from the 2025/26 financial year onwards, subject
to shareholder approval.
Compliance with the Competition and Markets
Authority Order
The Company confirms that, during the period under review,
it has complied with the provisions of The Statutory Audit
Services for Large Companies Market Investigation (Mandatory
Use of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014.
Minimum Standard
The FRC’s ‘Audit Committees and the External Audit: Minimum
Standard’ (the ‘Minimum Standard’) was published in May 2023.
The Audit Committee considers that it has met the Minimum
Standard.
Richard Reid
Audit Committee Chair
CORPORATE GOVERNANCE CONTINUED
Associated British Foods plc | 110 | Annual Report 2024
Graham Allan
Remuneration Committee Chair
In this section
Committee Chair letter
pages 111 to 112
Remuneration at a glance
pages 113 to 114
Remuneration Report
pages 111 to 127
Wider workforce remuneration
pages 118 to 119
Additional required disclosures
pages 122 to 127
The Annual Remuneration Report is subject to an advisory
vote at the 2024 AGM.
Dear shareholders
I am pleased to present the Directors’ Remuneration Report
for the year to 14 September 2024.
Ahead of our policy review next year, this year has seen the
Committee consider the implementation of our current reward
approach. We are delighted that the focus and effort of the
executive directors has been reflected in good strategic
progress, improved operational performance and a strong set
of financial results for the year.
At Primark, sales growth was driven by the ongoing store rollout
programme, particularly in our growth markets. The strength
of our value proposition, our product relevance, category stretch
and increasingly effective digital engagement helped Primark
to achieve good year-on-year profit growth.
Significant profit improvement was achieved in Grocery led
by good sales growth in international and regional brands and
supported by new product launches. Sales and profit progress
in the Sugar division and continued strong performance from
AB Mauri in the Ingredients division also contributed significantly
to our year-on-year profit growth.
Incentive Plan Outcomes for 2023/24
Short-Term Incentive Plan (STIP) 2023/24
15% of the STIP is based on strategic KPIs, currently all related
to ESG. The diversified nature of ABF means that ESG targets,
strategies and plans are developed by each division based on
their most important initiatives, with the centre having a key role
in governance, overseeing progress and ensuring accountability
for performance. Our scorecard of measures for the year
focused on our most material ESG priorities across the Group.
The Committee assessed the overall score at 23/30. A table
setting out more detail on this is on page 115.
Financial measures, specifically adjusted operating profit and
working capital, determine 85% of the STIP outcome. We set
very stretching targets this year, requiring more than 20%
adjusted operating profit growth at target and over 30% growth
at maximum.
The Board encourages management to take action, at the most
appropriate time, for the long-term benefit of the business and
the Remuneration Committee routinely reviews any impact this
may have on incentive outcomes. This year executives have
taken appropriate action, including restructuring and
reorganisation in a number of businesses to ensure optimal
performance for the long term. The cost of these actions, which
has been charged in arriving at adjusted operating profit, was
greater than anticipated when budgets were set. If all of the
actions had been planned at the start of the year, they would
have been reflected in the STIP performance range. The
Committee reviewed all of the actions taken and determined
that it was fair and reasonable to make an adjustment, but that
this would be made only for a portion of the additional costs.
We were pleased to see a good working capital performance
this year with decreased cash outflows, resulting in significantly
improved free cash flow and contributing to a higher return
on average capital employed. For the Group overall, an excellent
all-round performance resulted in adjusted operating profit
finishing between the target and maximum of the performance
range, after the adjustment discussed above. Working capital
levels resulted in a modifier outcome that was just above target.
The overall outcome under the financial performance measures
for this year is 87.22% of maximum.
Combining the ESG and financial measures, the overall outcome
for the 2023/24 STIP was 85.63% of maximum. The adjustment
noted above had the impact of increasing the overall bonus out-
turn from 82.43%. The Remuneration Committee believes that
this outcome is appropriate in the context of business
performance and the wider stakeholder experience.
Long-Term Incentive Plan (LTIP) 2021-24
Reflecting the Group’s strong post-COVID recovery, EPS
performance for the 2021-24 LTIP was ahead of the target set.
The EPS-based outcome is subject to potential downward
modification based on the Group three-year average return
on average capital employed (ROACE) without Sugar, which
exceeded the maximum level, and five-year average Sugar
ROACE, which was below maximum. The outcome for the
2021-24 LTIP was therefore 96.75% of maximum. The
Remuneration Committee is comfortable that this outcome
is appropriate in the context of business performance and the
wider stakeholder experience over the performance period.
DIRECTORS’ REMUNERATION REPORT
Annual statement by the Remuneration
Committee Chair
Associated British Foods plc | 111 | Annual Report 2024
Remuneration decisions for 2024/25
Salary and fees
In ABF’s decentralised model, each business is given flexibility
to determine its own salary increases and there is no single
budgeted increase rate for UK employees. Our resulting average
UK salary increases will be around 3.5% for most staff with
higher increases for hourly-paid Primark staff. In this context,
the Committee has determined that, for 2024/25, the executive
directors will receive salary increases of around 3.5%, below
the average increase for the wider employee population.
STIP 2024/25
For 2024/25, the financial measures under the STIP remain
focused on Adjusted operating profit and working capital.
We have, however, determined that it would be appropriate
to move to a cash conversion cycle measure for working capital.
This measure will still be applied as a modifier which increases
or decreases the outcome based on Adjusted operating profit
performance by up to 15%. Strategic measures, focused on
ESG, will continue to represent 15% of the total measures.
Restricted Share Plan (RSP) 2024-27
ABF has operated a conservative overall incentive quantum for
many years. This year, we will continue to make RSP awards
at 125% of salary to both executive directors. This remains very
modest compared to other companies of our scale. As a reminder,
we made the decision to move from a performance share plan
to a restricted share plan at the last policy review. We will need
to keep this under review.
Work of the Committee over the coming year
Over the coming financial year the Committee will consider
any changes to the remuneration policy that may be appropriate.
We look forward to engaging with investors as part of this
process to ensure that your views are taken into account.
Consideration of wider workforce views
and remuneration approaches
As a geographically dispersed group, subject to varied
employment market conditions, meaningful comparisons
of executive pay against wider workforce compensation are
complex. The Committee is mindful of reward practices across
the Group when setting and implementing its approach to
executive remuneration. The Committee receives data on the
remuneration structure for two tiers of management below the
executive directors and uses this information to ensure as much
consistency of approach as is practicable.
Divisional HR directors provided input to the most recent
remuneration policy review and they also share, on an ongoing
basis, feedback they receive from employees on remuneration.
Richard Reid, a member of the Committee, engages with
employees through his work as the Non-Executive Director
for workforce engagement and specifically affords them
an opportunity to share their views on pay and conditions.
This feedback is shared fully with the Remuneration Committee.
We also have an email inbox (remcochair@abfoods.com) to
enable employees and other stakeholders to share directly their
views on the Company’s executive remuneration approach
should they so wish. No feedback has been received through
this channel over the most recent financial year.
Board review
We were pleased that the externally-facilitated performance
review of the Remuneration Committee found that it is
performing effectively and that Committee members feel well
served and supported by the internal and external advisers.
2024 AGM
Again this year, the Committee has maintained its approach
of aligning compensation with business performance and taking
into consideration the experience of a wide range of stakeholders.
I hope you will feel able to support our Directors’ Remuneration
Report at the 2024 AGM.
Graham Allan
Remuneration Committee Chair
DIRECTORS’ REMUNERATION REPORT CONTINUED
Associated British Foods plc | 112 | Annual Report 2024
Remuneration summary
Remuneration principles
Our remuneration approach needs to support efforts to attract and retain top executive talent and to promote the strategic and
financial performance of the business. Our principles, which are consistent with the requirements of Provision 40 of the UK Corporate
Governance Code, are considered in the Committee’s decision making. In particular, we believe that pay should be:
Fair
Total remuneration should fairly
reflect the performance delivered
by executives. Where appropriate,
this may include the application
of discretion to ensure remuneration
outcomes are aligned to performance
that creates value for shareholders
and other stakeholders
Aligned
The portfolio we operate is diverse and
complex. We aim to align remuneration
and business objectives and to use
performance measures which provide
clear line of sight for executives
Clear and simple
We believe that executive remuneration
should be clear and simple for
participants to understand. The best way
to achieve this is through close alignment
with business performance
Remuneration approach
The Remuneration Policy for the executive directors, approved by shareholders in 2022, includes the following elements:
Base salary
Pension and
benefits
Short-Term
Incentive Plan (STIP)
Restricted Share
Plan (RSP)
Shareholding
requirement
Base salary set at
an appropriate level
for the Group’s size
and scale
The Chief Executive no longer
participates in a company pension
and receives no cash allowance in
lieu. The Finance Director receives a
cash allowance of 10% of salary in
line with other employees.
Maximum of 200%
of salary
(Up to 150% of salary
cash, and 50% of salary
STIP shares)
Normal annual RSP
award of 125%
of salary
Set at 250% of
salary, retained for
two years after
leaving employment
The policy worked as intended this year and outcomes are in line with performance. The full Remuneration Policy is set out in the
2022 Annual Report and Accounts which is available on the Company’s website www.abf.co.uk.
Time horizons for STIP and RSP awards
2023/24
2024/25
2025/26
2026/27
2027/28
STIP cash
One year
performance
STIP shares
One year
performance
Deferral period
Vest at end of year three
RSP
Three year performance period – underpins apply
Vest at end of year three
Two year holding period
STIP and RSP payments are subject to malus and clawback provisions.
Performance alignment
Reward in Group and business roles – Group roles, including the executive directors, are granted RSP awards. This structure is
consistent with their responsibility for managing the portfolio to achieve sustainable growth in shareholder value. Performance-based
LTIPs are used at division and business level where tangible and directly relevant targets are set.
STIP performance measures – STIP performance is based on financial measures (Adjusted operating profit and cash conversion)
and a portion based on strategic measures including ESG.
RSP underpins – The RSP underpins are intended to avoid rewards for failure. The underpins ensure a disciplined approach
to investment using ROACE as a key indicator, alignment with shareholders using dividends as a key indicator, strategic focus for
future sustainable growth, good governance and meaningful progress on the ESG agenda.
Discretion and judgement – In line with the principle of fairness, the Committee has a long history of applying discretion both to
increase and reduce incentive outcomes to ensure that they ‘feel fair’ given the circumstances and achievements across our portfolio,
consistent with our established remuneration principles.
Associated British Foods plc | 113 | Annual Report 2024
Annual remuneration report
Single total figure of remuneration for the executive directors (audited)
George Weston
Eoin Tonge
2024
2023
2024
2023
£'000
£'000
£'000
£'000
Fixed pay
Salary
1,184
1,118
747
446
Benefits
18
18
27
17
Pension
–
–
75
45
Total fixed remuneration
1,202
1,136
849
508
Variable pay
STIP cash
1,554
1,167
973
449
STIP deferred shares
514
469
322
253
LTIP
2,783
1,544
–
–
Other
–
–
1,793
2,372
Total variable remuneration
4,851
3,180
3,088
3,074
Single total figure
6,053
4,316
3,938
3,582
Notes to single total figure of remuneration for the executive directors
Salary
For George Weston, the salary paid was reduced for pension-related salary sacrifices until 31 December 2023.
Benefits
The value of benefits for George Weston comprised £15,613 taken in cash and £2,288 taxed as benefits-in-kind and for Eoin Tonge
comprised £24,553 taken in cash and £2,288 taxed as benefits-in-kind.
Pension
George Weston opted out of the EFRBS on 31 December 2023. Until that date he had an overall benefit promise of 1/45th of
final pensionable pay for each year of pensionable service up to 5 April 2016 and 1/50th of final pensionable pay for each year of
pensionable service thereafter, subject to a maximum of 2/3rds of final pensionable pay (basic salary during the last 12 months before
retirement, plus if applicable, the average of the last three years’ fluctuating earnings). He opted out of the Associated British Foods
Pension Scheme on 5 April 2006 and has a deferred benefit in that scheme; the balance of the promise was provided under the EFRBS.
His pension benefits are payable from age 65. No alternative defined benefit arrangements are available to any member who chooses
to take their benefits early. His accrued pension at 14 September 2024 was £784,886 per annum.
The nature of George Weston’s pension benefits did not change in the period before he opted out of the EFRBS and the pensions
number for remuneration purposes is £0 as inflation exceeded salary increases in the year.
Eoin Tonge received a cash allowance of 10% of salary in lieu of pension, which is reported under the pensions section in the single
figure table for clarity.
George Weston total remuneration
(£000)
1,138
3,329
2,286
4,316
6,053
'20
'21
'22
'23
'24
Eoin Tonge total remuneration
(£000)
3,582
3,938
'20
'21
'22
'23
'24
DIRECTORS’ REMUNERATION REPORT CONTINUED
Associated British Foods plc | 114 | Annual Report 2024
STIP 2023/24
Achievement against financial targets
This table details the financial performance ranges for STIP 2023/24 and the calculated outcome for the cash element of the STIP.
Cash element
Cut In
Target
Maximum
2023/24 STIP outcome
Adjusted operating profit £m1
1,721
1,862
2,004
1,998
STIP based on profit (as % of salary)
15.00 %
63.75 %
110.87 %
109.00 %
Working capital as % of 3rd party sales
17.03 %
15.92 %
14.81 %
15.77 %
% modifier to profit element
85 %
100 %
115 %
102.03 %
Total STIP cash financial element (as % of salary)
12.75 %
63.75 %
127.50 %
111.20 %
1. The Adjusted operating profit targets were amended as outlined on page 111. The adjustment had a less than 1% impact on the target range.
At the start of the year, when setting the STIP range, we analysed the risks and opportunities in the budget in detail. These included
commodity price movements, currency movements, supply chain disruption and increases in labour costs. Adjusted operating profit
was expected to be well ahead of 2022/23 and the performance range was set to be stretching. As explained on page 111, the Group
delivered a strong financial performance. The overall outcome under the financial performance measures for this year is 87.22% of
maximum.
Achievement against ESG strategic KPIs
This year our STIP strategic KPIs were all related to ESG. As detailed in the responsibility report our Group approach in ESG is to focus
on what is material, to the Group and to the world. Therefore we have a set of Group priorities. Accordingly, the ESG targets for
incentives were aligned to these priorities.
The targets set were demanding. Against a scorecard of measures, the overall score achieved was 23/30. The Committee also
considered our performance on ESG in the round and concluded that the outcome was appropriate taking into account very good
progress in this area.
Score
Commentary and performance outcome
Primark
sustainability
6/7.5
• Strengthened grievance mechanisms with Tier One suppliers across the supply chain, including
suppliers of goods for sale and of goods not for resale.
• 57% of cotton clothing units sold contained organic, recycled or Primark Cotton Project cotton,
up from 46% last year.
• The Primark durability framework was launched in July 2024; see page 19 for more details.
• More than 309,394 farmers trained or currently in the Primark Cotton Project.
People and
community
4.5/7.5
• In 2024, we began a review of the housing and living conditions across our sugar estates in Zambia,
Malawi, Eswatini, South Africa and Tanzania. We renovated approximately 150 houses for employees
and their families at the Nchalo estate in Malawi and have put in place detailed plans for further work
over the coming years across our estates. See page 59 for more details.
Carbon
5.5/7.5
• Primark has reduced Scope 1, 2 and 3 emissions significantly this year, as set out on page 19.
• Wissington projects reduced emissions by 30kt of CO2e at British Sugar.
• Despite good progress from projects, emissions per thousand tonnes sugar beet processed did not
meet stretch targets set for the year.
Water
7/7.5
• AB Mauri is focused on using water efficiently and returning it safely to the environment after use.
Since 2010, it has invested $120m in waste water treatment and 2023/24 saw significant progress,
as set out on page 31.
• ABF Sugar improved water-use efficiency in 2024 and 25% of abstracted water was reused during
production before being returned to natural watercourses.
Overall achievement
The overall outcome for the STIP cash element was 128.45% of salary (85.63% of maximum) as shown in the table below.
Cut In
Target
Maximum
Actual
STIP financial element
12.75 %
63.75 %
127.50 %
111.20 %
STIP ESG/KPI element
2.25 %
15.00 %
22.50 %
17.25 %
STIP cash total
128.45 %
The 2023-26 STIP shares element was subject to the same performance conditions as the cash element. 85.63% of the shares that
were allocated at the beginning of the performance period will vest in 2025, subject to a service condition. The remaining allocated
shares have now lapsed. The number of shares vesting is shown on page 122.
Associated British Foods plc | 115 | Annual Report 2024
STIP amounts included in the single total figure table
For 2023/24, the figures shown in the single total figure table comprise the annual cash bonus, which is paid in December in respect
of the preceding financial year, and the value of deferred share awards, earned for performance in the 2023/24 financial year,
calculated based on the average mid-market closing price over the last quarter of the financial year of 2,447p. These shares are
subject to a two-year deferral period. 3.6% of the value of the deferred awards is attributable to share price appreciation as the share
price has increased from 2,361.6p at allocation in November 2023. No value is included in respect of the STIP deferred shares based
on performance in 2021/22 and vesting in November 2024 as these values were required to be reported in the 2021/22 annual report.
The directors are also paid dividend equivalents in respect of vested shares. These are not included in the single total figure as the
amounts do not relate to the periods being reported on.
For 2022/23, this figure comprises the annual cash bonus, which was paid in December 2023 in respect of the preceding financial
year, and the value of deferred share awards, earned for performance in the 2022/23 financial year, calculated based on the average
mid-market closing price over the last quarter of the 2022/23 financial year of 2,008.02p. These shares are subject to a two-year
deferral period. These values are not updated to reflect vesting share price as the awards have not yet vested. 20.6% of the value
of the deferred awards is attributable to share price appreciation as the share price has increased from 1,665.3p at allocation in
December 2022. The directors are also paid dividend equivalents in respect of vested shares. These are not included in the single
total figure as the amounts do not relate to the periods being reported on.
LTIP 2021-24
The EPS performance for the 2021-24 LTIP was ahead of target. The Group three-year average ROACE without Sugar exceeded
the maximum level. The five-year average Sugar ROACE outcome was just below the maximum level. The Group ROACE without
Sugar modifier and the Sugar ROACE modifier act only as downward modifiers to the calculated incentive outcomes. The overall
outcome for the 2021-24 LTIP was 96.75% of maximum, as shown in the table below.
Threshold
Target
Maximum
Performance
Calculated
outcome
100% of award
Group adjusted EPS in the non-Sugar
businesses
132p
142p
152p
182.29p
100.00 %
Three-year ROACE in the non-Sugar
businesses downward modifier
10.00 %
12.00 %
16.45 %
100.00 %
Five-year Sugar ROACE downward
modifier
5.00 %
9.00 %
8.35 %
96.75 %
Vesting as % of maximum
96.75 %
LTIP amounts included in the single total figure table
The numbers in the single total figure table reflect the number of shares vesting as a result of performance achieved. Further details
in respect of LTIP amounts for 2024 are set out below:
George Weston will receive 106,809 shares in respect of his 2021-24 LTIP award. As required by UK regulations, the vesting value
has been estimated using the mid-market closing price over the last quarter of 2023/24 of 2,447p. Vesting will be on 19 November
2024 and a figure recalculated for the share price on that date will be presented in the 2024/25 annual report. The values shown in
the table also include an amount in respect of cash dividend equivalent payments that will be made in respect of the shares vesting.
The amount included for George Weston is £169,506. 24.0% of the value of the LTIP awards is attributable to share price appreciation
as the share price has increased from 1,974.7p at allocation in November 2021.
In respect of 2023 LTIP values, as required by UK regulations, the vesting value reported last year was estimated using the mid-market
closing price over the last quarter of 2022/23 of 2,008.02p. On the actual vesting date, the share price was 2,349.55p. The values in
the table, which include amounts in respect of cash dividend equivalent payments made, have therefore been updated to reflect this.
Other remuneration
The numbers in the single total figure table for both years reflect buyout awards made to Eoin Tonge related to his recruitment,
as disclosed on page 105 of the 2023 Annual Report. Eoin Tonge will receive 73,265 shares in respect of his 2021-24 PSP buyout
award made following his recruitment, as disclosed in the 2023 Annual Report. This reflects an outcome of 96.75% of maximum on
the 30% of the award based on the same performance measures as George Weston’s LTIP, 90% of maximum for the 30% of the
award based on performance against strategic KPIs (finance leadership, investor relations, M&A activity, non-financial reporting and
risk & controls) and 87% of maximum for the 40% of the award based on the average STIP financial performance as a percentage of
maximum over the period. As required by UK regulations, the vesting value has been estimated using the mid-market closing price
over the last quarter of 2023/24 of 2,447p. Vesting will be on 19 November 2024 and a figure recalculated for the share price on that
date will be presented in the 2024/25 annual report. No dividend equivalent payments will be made in respect of these shares. 52.5%
of the value of the deferred awards is attributable to share price appreciation as the share price has increased from 1,604.61p at
allocation on joining ABF.
DIRECTORS’ REMUNERATION REPORT CONTINUED
Associated British Foods plc | 116 | Annual Report 2024
Implementation of policy in 2024/25
Base salary
Our UK salary increases will be around 3.5% for most staff, with higher increases for hourly-paid Primark
staff. George Weston will receive a salary increase of 3.5% and Eoin Tonge will receive an increase of
3.6%, below the average increase for the wider employee population including Primark staff.
Increase
Salary from 1
December 2024
George Weston
3.5 %
£1,252,000
Eoin Tonge
3.6 %
£785,000
Pension
George Weston opted out of the EFRBS on 31 December 2023 and became a deferred member of this
Scheme. He does not receive a cash allowance in lieu of pension contributions.
Eoin Tonge receives a cash supplement of 10% of salary in lieu of pension contributions, in line with the
approach for the wider ABF UK workforce.
STIP 2024/25
150% of salary
in cash
50% of salary
in shares
Adjusted
operating profit
(% of salary)
Modification
based on
average cash
conversion days
Total financial
element
(% of salary)
ESG and
strategic
measures
(% of salary)
Total STIP
(% of salary)
Maximum
147.83 %
x 1.15
170 %
30 %
200 %
On-target
85 %
x 1
85 %
20 %
105 %
Threshold
20 %
x 0.85
17 %
3 %
20 %
Below threshold
0 %
x 0.85
0 %
0 %
0 %
The financial measures remain the same as in 2023/24 but this year we will measure working capital
performance using a cash conversion cycle measure rather than working capital as a percentage of sales.
STIP share awards will be granted in November 2024 and will lapse at the end of the financial year to the
extent that performance conditions have not been met. The balance of the shares will remain conditional
and be deferred for a further two years.
Malus and clawback provisions apply to STIP awards for up to two years after being paid.
RSP 2024-27
125% of salary
in shares
Restricted share awards will be granted in November 2024. At the Committee’s discretion, vesting may
be reduced if the following underpins are not met:
• ROACE above the weighted average cost of capital;
• dividend payments maintained;
• consideration of whether the right actions have been taken to strengthen the Group’s competitive
position for long-term sustainable growth. Performance will be assessed in the round. The underpin will
be deemed to not be met in the event that there is an identified and agreed specific management failure;
and
• satisfactory governance performance including no ESG issues that result in material reputational damage
(as determined by the Board).
A two-year post-vesting holding period applies to net of tax shares. Malus and clawback provisions apply
for two years post-vesting.
Shareholding
requirement
250% of salary
George Weston’s shareholding very significantly exceeds the 250% of salary requirement.
Eoin Tonge’s shareholding does not yet meet the requirement and at least 50% of net shares vested under
the STIP and RSP awards as well as 50% of net shares vested under certain new joiner awards must be
held by him until it is met.
NED fees
Non-executive directors’ fees will increase from £81,750 to £85,000 in December 2024. No other changes
to fees will be made this year.
The Chairman’s fee will increase from £460,000 to £476,500 in December 2024
Associated British Foods plc | 117 | Annual Report 2024
Wider Workforce Remuneration
Fair pay
Associated British Foods is a diversified business that currently operates in 56 countries and employs 138,000 people working across
five business segments. Our people are central to our business and we pride ourselves on being a first-class employer.
As an international business, we have a duty to operate responsibly and are keen to ensure that the people who work in our
businesses are paid fairly. We support the work of governments to ensure that minimum wages are sufficient to allow employees
to have an acceptable standard of living. Our businesses, each of which is responsible for setting and managing its own remuneration
approach, operate in line with the principles set out below and in compliance with all local laws.
Fair pay should be…
Appropriate
Free from
discrimination
Intuitive
Explainable
Market
competitive
For the employee’s
role, experience
and skills
Fixed pay will meet/
exceed legal minimum
and appropriate
industry standards
(e.g. collective
bargaining agreements)
Pay should not be
impacted by an
individual’s age,
gender, sexual
orientation, ethnicity
or other characteristics
Employees should
always receive
compensation
regularly, in full and
on time
The business should
be able to explain
how pay has been
calculated so that it
is easy to understand
Local market conditions
(industry/location/cost
of living) should be
considered when
setting pay levels
Workforce engagement on remuneration
Please see the Remuneration Committee Chair’s letter on page 111 for more information on how the Committee communicates with
the wider workforce.
DIRECTORS’ REMUNERATION REPORT CONTINUED
Associated British Foods plc | 118 | Annual Report 2024
Directors’ pay in the context of the Group’s wider pay practices
The Committee has regard to workforce remuneration and related policies across the Group and ensured alignment of incentives and
reward with the Company’s culture when determining the 2022 Remuneration Policy for directors. The table below summarises the
remuneration structure for the wider workforce.
Below the Board
Executive directors
Salary
Salary increase budgets are determined by each of the businesses for each
country, taking into account country-specific conditions such as inflation.
Salary increases are then determined by line managers based on factors
such as development in role and local market practice. Salaries are
benchmarked to ensure that we are able to recruit and retain
talented people.
We review the ratio of the Chief Executive’s pay to that of our UK
employees on page 120.
Salary increases as a percentage
of salary are normally aligned with,
or lower than, those of the
wider workforce.
Consistent with the wider workforce,
salaries are set competitively against
peers in support of the recruitment
and retention of executive directors.
STIP
In our decentralised model the approach to incentives varies by division.
This is consistent with our line of sight approach and ensures design is
appropriate for the strategy of each business and market. There is a
common governance framework, with central oversight, for signing off all
changes to incentive design to ensure that risks are mitigated and cultural
considerations are appropriately taken into account.
Key performance measures of adjusted operating profit, working capital,
ESG targets and personal performance are commonly used across the Group.
As employees progress and are promoted, their target and maximum bonus
opportunities increase.
The STIP for executive directors
is primarily based on the financial
performance of the Group. 15% of
the STIP is based on
ESG performance.
STIP share awards are made for 25%
of the total STIP payment and are
deferred for a further two years after
the performance condition has been
met.
LTIP
We make share-based LTIP or RSP awards to around 200 of our most
senior managers across the Group to support the remuneration philosophy
of incentivising superior long-term business results and shareholder
value creation.
The performance measures for around one-fifth of participants are aligned
fully or partially to those of the executive directors. For other participants, the
appropriate measures are agreed with the individual business to reflect the
strategy and role in the portfolio of the business. Measures include profit
growth, returns, working capital management and strategic objectives, e.g.
related to business transformation or ESG priorities.
We also operate a cash LTIP to ensure long-term incentivisation for a wider
population of senior managers and to reward performance in businesses,
where relevant long-term targets can be set.
All of our LTIPs have a performance period of at least three years with some
being up to five years. Awards are made as a percentage of base salary.
Executive directors’ LTIP grants up
to 2021 were subject to achievement
of EPS and ROACE performance
conditions.
From 2022 the LTIP was replaced
with an RSP, granted by reference
to a percentage of salary, which vest
provided performance underpins are
met.
Vested shares are subject to a two-
year holding period.
Pension
A pension/provident fund is offered to our employees in line with local market
requirements and practices. Exceptions to this are countries where pension
provision is not prevalent in the local market and/or is provided by the state.
In the UK, newly appointed employees and executives of ABF companies
are entitled to receive a Company pension contribution that matches their
own contribution to a maximum of 10% of salary. They are eligible to take
some or all of this as a cash alternative if subject to the lifetime or
annual allowance.
In certain countries, including the UK and Ireland, longer-serving employees
continue to participate in and accrue benefits under defined benefit pension
schemes which are closed to new members.
Executive directors are eligible
to receive a Company pension
contribution of up to 10% of salary
in line with the wider workforce
in the UK. They are eligible to take
some or all of this as a cash
alternative if subject to the lifetime
or annual allowance.
Benefits
In our decentralised model, we expect our businesses to ensure that core
benefits provided to employees in each country remain appropriate and local
market competitive. For example, in our African sugar businesses outside
South Africa, we have on-site clinics/hospitals (dependent on country)
available to employees and their families to ensure that they have access to
healthcare. In other locations such provision may be through the state
or may be covered by insurances that we offer as a benefit to employees.
Executive directors receive benefits
which consist primarily of the
provision of a company car/allowance
and health cover.
In addition, executive directors are
eligible for benefits available to
the wider head office workforce.
Associated British Foods plc | 119 | Annual Report 2024
CEO Pay Ratio
Year
Methodology used
Lower quartile
Median
Upper quartile
2023/24
Option B
236:1
218:1
184:1
2022/23
Option B
196:1
166:1
131:1
2021/22
Option B
114:1
104:1
85:1
2020/21
Option B
171:1
155:1
115:1
2019/20
Option B
79:1
70:1
48:1
2018/19
Option B
253:1
238:1
169:1
We have chosen to use Option B of the available methodologies to calculate our CEO Pay Ratio. Given the complexity of our Group,
this approach enables us to use existing gender pay data for Great Britain (GB) as a foundation for our calculations. We determined
the hourly rates at each quartile of our 5 April 2024 gender pay data then calculated the average annual salary and total remuneration
for each quartile as each point represents multiple individuals. We pro-rated the data for part-time individuals to reflect full-time
equivalent remuneration and excluded leavers from the calculation.
The increase in the pay ratio reflects the increase in incentive outcomes this year for the Chief Executive. We are pleased that the
remuneration levels for our GB-based employees have increased year-on-year by 12.4% at the median.
Whilst based on data for GB only, this year’s pay ratio reflects the relationship between the Chief Executive’s pay and the experience
of UK employees as a whole. Many of our early career employees are in Primark and this affects the data, with those in the food
businesses typically later in their careers and with remuneration at higher levels in line with their skills and experience.
Lower quartile
Median
Upper quartile
Salary for GB-based employees
£24,089
£24,433
£29,960
Single figure of total remuneration for GB-based employees
£25,665
£27,709
£32,868
Annual percentage change in remuneration of directors and employees
% change in salary/fees
% change in benefits5
% change in cash STIP6
2024
2023
2022
2021
2024
2023
2022
2021
2024
2023
2022
2021
George Weston1
5.90 %
3.14 %
0.15 %
33.09 %
0.74 %
5.88 %
5.45 %
–
33.16 %
33.83 %
0.04 % 100.00 %
Eoin Tonge1
67.41 %
n/a
n/a
n/a
62.13 %
n/a
n/a
n/a
116.70 %
n/a
n/a
n/a
Michael McLintock3
3.90 %
3.56 %
0.96 %
15.19 %
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Richard Reid2,4
2.72 %
3.52 %
(2.07) %
42.16 %
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Graham Allan2
21.59 %
15.79 %
1.33 %
15.38 %
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Heather Rabbatts2
20.69 %
14.47 %
1.33 %
–
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Emma Adamo2
3.85 %
2.63 %
1.33 %
15.38 %
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Wolfhart Hauser2
(65.38) %
2.63 %
1.33 %
15.38 %
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Annie Murphy
1,300.00 %
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Kumsal Bayazit Besson
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Loraine Woodhouse
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Average ABF plc UK
employee
5.60 %
2.10 %
9.50 %
4.70 %
(0.60) %
(1.50) %
15.10 %
3.90 %
22.90 %
9.30 %
13.50 % 167.00 %
1. George Weston and Eoin Tonge’s salary rates increased by 4.5%, which was lower than the rate of 5% that applied for other head office employees.
The increases for employees shown in the table above also reflect changes in the number of roles in the head office.
2. The NED fee increased from £78,250 to £81,750 in December 2023.
3. Michael McLintock’s fee increased from £440,000 to £460,000 in December 2023.
4. The additional fee for responsibility for workforce engagement has remained flat at £25,000 and the Senior Independent Director fee increased from £24,500
to £25,000 in December 2023. There was no change to other additional responsibility fees in the period, but the change in the base NED fee detailed above
applies to these roles.
5. Benefits data is calculated on the same basis as the benefits data in the single total figure table on page 114 and includes benefits in kind and benefits taken
in cash but excludes any pension allowances.
6. Includes cash STIP payments only.
Note: % change being based on whole numbers
DIRECTORS’ REMUNERATION REPORT CONTINUED
Associated British Foods plc | 120 | Annual Report 2024
2024 gender pay gap reporting
Women comprise 57% of our total global workforce. We have chosen to report on the gender pay gap that relates to our employee
population in Great Britain (GB) as of 5 April 2024. However, more than half of our workforce is employed outside Great Britain and is not part
of this analysis. Consistent with last year we have presented data for the whole Group and for the Group without Primark in Great Britain.
ABF Group businesses in GB
2024
2023
ABF Group businesses in GB
(excluding Primark)
2024
2023
Women's mean hourly pay rate
is below that of men by
25.6 %
28.2 %
Women's mean hourly pay rate
is above that of men by
4.6 %
3.6 %
Women's median hourly pay rate
is below that of men by
15.2 %
18.9 %
Women's median hourly pay rate
is above that of men by
7.3 %
10.2 %
Women's mean bonus pay rate
is below that of men by
41.6 %
27.0 %
Women's mean bonus pay rate
is below that of men by
43.3 %
24.1 %
Women's median bonus pay rate
is above that of men by
57.4 %
21.8 %
Women's median bonus pay rate
is above that of men by
29.9 %
29.8 %
Percentage of men who
received a bonus
23.9 %
26.6 %
Percentage of men who
received a bonus
46.4 %
50.8 %
Percentage of women who
received a bonus
8.5 %
7.9 %
Percentage of women who
received a bonus
65.8 %
66.5 %
Gender pay and bonus gaps are calculated by comparing
the mean (average) and median (central value in the data list)
measures for women to that of men and identifying the
percentage difference between the two. As required by the
UK Equality Act 2010 (Gender Pay Gap Information) Regulations
2017, we submit data for our relevant legal entities to the UK
Government through their website.
Group
The Group gender pay gap has improved as the number
of women at senior levels is increasing (see page 60), though
it remains in favour of men. A significant number of female
employees work in retail, with 75.4% of roles in the lower
pay quartile taken by women.
Whilst the gender balance at the top of the Group is changing,
it is slow due to long tenure. Balancing long tenure, fresh
external insights and the need for diverse thinking is a focus
across our businesses. We support new colleagues to build
strong internal networks so that they can more quickly
understand the organisation.
The greater presence of senior men in the bonus pool has a
distorting effect on the mean bonus gap. The median bonus
gap, which includes recognition awards, is in favour of women.
Recognition awards are smaller in quantum and often given to
men with long service in the manufacturing environment. They
are compared to bonuses for women in middle management.
Food businesses
In the food businesses the pay gap remains in favour of
women as we have a significant majority of male employees
who work in a manufacturing environment. These employees
are being compared to women who, on average, work in
middle management.
Primark
The Primark gender pay data can be found on their website.
At median we have only a 0.8% gender pay gap in Primark.
Ethnicity data
This year for the first time, we have collated ethnicity information
for nearly all of our businesses in Great Britain. We are pleased
that almost three-quarters of our employees have shared their
ethnicity with us, with only 0.4% choosing ‘prefer not to say’.
We believe this indicates a high level of trust in the business.
We need to undertake more work to fully understand our
ethnicity pay gap data and to support those businesses that do
not yet collect this data to do so. This will enable our businesses
to make appropriate action plans and to continue their focus on
ensuring that all employees can progress their careers with us,
regardless of their background or any protected characteristics.
Proportion of men and women in each pay quartile
Upper
(%)
64.5
65.6
35.5
34.4
Group
businesses in
GB
Group
businesses in
GB without
Primark
Upper middle
(%)
41.8
72.1
58.2
27.9
Group
businesses in
GB
Group
businesses in
GB without
Primark
Lower middle
(%)
25.5
76.7
74.5
23.3
Group
businesses in
GB
Group
businesses in
GB without
Primark
Lower
(%)
24.6
70.5
75.4
29.5
Group
businesses in
GB
Group
businesses in
GB without
Primark
Male
Female
Associated British Foods plc | 121 | Annual Report 2024
Executive directors’ shareholding and scheme interests
Scheme interests (audited information)
The table below details the conditional share interests held by the executive directors as at 14 September 2024. The awards made
before December 2022 were made in line with the 2019 Remuneration Policy.
LTIP, RSP and Buyout Awards
Vesting of LTIP awards is subject to meeting performance conditions over the performance period. RSP awards are expected to vest
in full, subject to meeting performance underpins. A further two-year post-vesting holding period applies to net of tax vested shares
for LTIP and RSP awards.
Maximum award
Shares vesting
Scheme
Award
date
% of salary
Face value
at grant
£000
Market
price at
grant1
End of
performance
period
Maximum
Target
(50% of
maximum)
Threshold
(10% of
maximum)
Release
date
George
Weston
LTIP
19/11/21
200 %
2,180
1,974.7p
14/09/24 110,397
55,199
11,040 19/11/24
RSP
09/12/22
100 %
1,158
1,665.3p
13/09/25
69,537
N/A
N/A 17/11/25
RSP2
23/11/23
125 %
1,447
2,361.6p
12/09/26
61,293
N/A
N/A 23/11/26
Eoin
Tonge
RSP
03/03/23
125 %
906
1,665.3p
13/09/25
54,420
N/A
N/A 17/11/25
RSP2
23/11/23
125 %
906
2,361.6p
12/09/26
38,374
N/A
N/A 23/11/26
Unvested M&S buyout
PSP 21-24 buy out3
03/03/23
N/A
1,358
1,604.6p
14/09/24
84,611
42,306
8,461 01/11/24
DSBP buy out4
03/03/23
N/A
570
1,604.6p
N/A
35,511
N/A
N/A 01/07/25
PSP 22-25 buy out5
03/03/23
N/A
113
1,604.6p
13/09/25
7,068
N/A
N/A 01/11/25
1. The price used to determine the number of shares allocated under the LTIP and RSP is the average closing price on the five trading days immediately preceding the
main allocation in November/December each year. The details of the buyout awards for Eoin Tonge, including the price used to determine the number of shares
allocated was agreed as part of his joining arrangements as set out on page 146 of our 2022 Annual Report.
2. The performance underpins that apply to these RSP allocations are the same as those set out for RSP 2024-27 on page 117.
3. See page 116 for details of performance measures.
4. Performance conditions were met in July 2023 and the shares will vest on 01/07/25.
5. Net vested shares to be retained until 01/07/27, underpins apply in line with those on the 2023-26 RSP award.
DIRECTORS’ REMUNERATION REPORT CONTINUED
Associated British Foods plc | 122 | Annual Report 2024
STIP – shares
The number of deferred STIP shares released is determined based on the achievement of the STIP performance conditions.
Scheme
Award date
Maximum award
Deferred awards
% of salary
Face value
at grant
£000
Market
price at
grant1
End of
performance
period
Maximum
shares
Shares
lapsed for
performance
Shares subject
to service
condition
Release
date
George
Weston
Deferred
awards
19/11/21
50 %
545
1,974.7p
17/09/22
27,599
14,233
13,366
19/11/24
09/12/22
50 %
579
1,665.3p
16/09/23
34,769
11,415
23,354
17/11/25
23/11/23
50 %
579
2,361.6p
14/09/24
24,517
3,523
20,994
23/11/26
Eoin Tonge
Deferred
awards
03/03/23
50 %
312
1,665.3p
16/09/23
18,745
6,154
12,591
17/11/25
23/11/23
50 %
363
2,361.6p
14/09/24
15,350
2,206
13,144
23/11/26
1. The share price used for determining the number of shares in an allocation is the average closing price on the five trading days immediately preceding the main
annual award date. The awards to Eoin Tonge in 2023 were made at the same share price as those for the main award.
Executive directors’ shareholding requirements (audited information)
The interests below as at 14 September 2024 remained the same at 5 November 2024. George Weston has met our shareholding
requirement. Since joining the business, Eoin Tonge has begun to build a holding of ABF shares.
Holding
requirement
Beneficial
Beneficial as
% of salary
LTIP/RSP/buyout
awards subject
to performance
condition/
underpins
Unvested
deferred STIP/
buyout
awards
Total 14
September
2024
Total 16
September
2023
George Weston
Wittington Investments Limited,
ordinary shares of 50p
n/a
15,181
n/a
n/a
n/a
15,181
15,061
Associated British Foods plc,
ordinary shares of 5 15/22p
250% of salary 3,836,046
6707 %
241,227
57,714 4,134,987 4,133,596
Eoin Tonge
Associated British Foods plc,
ordinary shares of 5 15/22p
250% of salary
50,855
142 %
135,373
110,346
296,574
245,056
1. Calculated using share price as at close of business on 13 September 2024 of 2,189p and rate of base salary as at 14 September 2024.
2. George Weston is a director of Wittington Investments Limited which, together with its subsidiary Howard Investments Limited, held 421,243,985 ordinary
shares in Associated British Foods plc as at 14 September 2024.
Associated British Foods plc | 123 | Annual Report 2024
Directors’ service contracts/letters of appointment
Date of
appointment
Date of current
contract/letter
of appointment
Notice from
Company
Notice from
individual
Unexpired period of service contract
Executive Directors
George Weston
19/04/99
01/06/05
12 months
12 months
Rolling contract
Eoin Tonge
06/02/23
20/07/22
12 months
12 months
Rolling contract
Non-executive Directors
Michael McLintock
01/11/17
11/04/18
6 months
6 months
Letter of appointment
Emma Adamo
09/12/11
09/12/11
6 months
6 months
Letter of appointment
Richard Reid
14/04/16
13/04/16
6 months
6 months
Letter of appointment
Graham Allan
05/09/18
05/09/18
6 months
6 months
Letter of appointment
Heather Rabbatts
01/03/21
16/02/21
6 months
6 months
Letter of appointment
Annie Murphy
06/09/23
31/05/23
6 months
6 months
Letter of appointment
Kumsal Bayazit Besson
01/12/23
21/08/23
6 months
6 months
Letter of appointment
Loraine Woodhouse
01/10/24
04/09/24
6 months
6 months
Letter of appointment
Copies of service contracts are available for inspection at the Company’s head office.
Payments to past directors and payments for loss of office (audited information)
The only payments made to John Bason in relation to his role as Finance Director since his retirement are those detailed on page 147
of our 2022 annual report in respect of his participation in incentive schemes up to his leaving date.
In line with those terms 37,981 shares in respect his 2021 LTIP award will vest on 19 November 2024, reflecting the performance
assessment of 96.75% of maximum (see page 116 for details), and time pro-rating for the 19 out of 36 months of the performance
period that he worked. Consistent with the terms of this award he will receive dividend equivalent payments of £60,276.
His 2021 STIP share award will also vest on 19 November 2024 following the completion of the deferral period.
No payments for loss of office were made in the year.
Executive directors serving as non-executive directors
To encourage self-development and external insight, the Committee has determined that, with the consent of both the Chairman and
the Chief Executive, executive directors may serve as non-executive directors of other companies in an individual capacity, retaining
any fees earned. Neither individual currently holds such other roles.
DIRECTORS’ REMUNERATION REPORT CONTINUED
Associated British Foods plc | 124 | Annual Report 2024
Non-executive Directors’ remuneration (audited information)
Fees
Fixed pay
Variable pay
Single total figure of
remuneration
2024
2023
2024
2023
2024
2023
2024
2023
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Michael McLintock
453
436
453
436
–
–
453
436
Richard Reid
151
147
151
147
–
–
151
147
Emma Adamo
81
78
81
78
–
–
81
78
Wolfhart Hauser1
27
78
27
78
–
–
27
78
Graham Allan2
107
88
107
88
–
–
107
88
Heather Rabbatts3
105
87
105
87
–
–
105
87
Annie Murphy4
78
6
78
6
–
–
78
6
Kumsal Bayazit Besson5
65
–
65
–
–
–
65
–
Loraine Woodhouse6
–
–
–
–
–
–
–
–
1. Wolfhart Hauser left the Board on 18 January 2024.
2. Graham Allan was appointed as Remuneration Committee Chair on 1 May 2023.
3. Heather Rabbatts was appointed as Senior Independent Director on 1 May 2023.
4. Annie Murphy joined the Board on 6 September 2023.
5. Kumsal Bayazit Besson joined the Board on 1 December 2023.
6. Loraine Woodhouse joined the Board on 1 October 2024.
Non-executive Directors’ remuneration
Non-executive directors’ fees were reviewed during 2024 and it was determined that increases should be made as shown below.
Fees effective
1 Dec 2024
Fees effective
1 Dec 2023
Chairman
£476,500
£460,000
Additional fee for Senior Independent Director responsibilities
£25,000
£25,000
Additional fee for Committee Chair (Audit/Remuneration only)
£27,000
£27,000
Additional fee for responsibility for workforce engagement
£25,000
£25,000
Director
£85,000
£81,750
Non-executive Directors’ shareholdings and share interests (audited information)
The following shareholdings are ordinary shares of Associated British Foods plc unless stated otherwise. The interests remained the
same at 5 November 2024.
Total1
Total
2024
14
September
2024
16 September
2023
total holding
as % of
annual fee
Michael McLintock
24,000
24,000
116 %
Richard Reid
3,347
3,347
49 %
Emma Adamo2
Wittington Investments Limited, ordinary shares of 50p
1,011
1,011
–
Associated British Foods plc, ordinary shares of 5 15/22p
511,234
511,234
13,887 %
Wolfhart Hauser3
7,161
7,161
581 %
Graham Allan
10,000
10,000
204 %
Heather Rabbatts
395
–
8 %
Annie Murphy
1,830
–
52 %
Kumsal Bayazit Besson
2,930
–
99 %
Loraine Woodhouse
–
–
-
1. Calculated using share price as at close of business on 13 September 2024 of 2,189p.
2. Emma Adamo is a director of Wittington Investments Limited which, together with its subsidiary, Howard Investments Limited, held 421,243,985 ordinary
shares in Associated British Foods plc as at 14 September 2024.
3. Wolfhart Hauser’s shareholding is shown as at 18 January 2024 when his appointment ended.
Associated British Foods plc | 125 | Annual Report 2024
Total shareholder return (TSR) performance and Chief Executive’s pay
The performance graph below illustrates the performance of the Company over the 10 years from September 2014 to September
2024 in terms of total shareholder return compared with that of the companies comprising the FTSE 100 index.
This index has been selected because it represents a cross-section of leading UK companies and Associated British Foods is a part
of the index.
In addition, the table below the graph provides a summary of the total remuneration of the Chief Executive over the last 10 years.
Value of a hypothetical £100 investment
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
0.00
25.00
50.00
75.00
100.00
125.00
150.00
175.00
200.00
ABF
FTSE 100
Source: DataStream Return Index
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Single total figure
remuneration
3,056
3,133
4,849
3,843
4,204
1,138
3,329
2,286
4,316
6,053
(£’000)
Annual variable element –
STIP (% of maximum)
44.46 %
86.75 %
97.47 %
50.34 %
73.37 %
0.00 %
52.50 %
51.09 %
67.17 %
85.63 %
Long-term variable
element – LTIP (% of
maximum)
18.54 %
0.00 %
51.02 % 100.00 % 57.13 %
0.00 %
40.00 %
0.00 %
58.46 %
96.75 %
Relative importance of spend on pay
A year-on-year comparison of the relative importance of pay with significant distributions to shareholders and taxes paid is shown
below. Taxes paid represents part of our societal contribution, alongside the activities detailed in our Responsibility Report.
2024
£m
2023
£m
Change
%
Pay spend for Group
3,408
3,158
8
Dividends relating to period
666
459
45
Taxes paid
340
341
–
Shareholder voting
We were pleased last year that 99.69% of our investors supported the Directors’ Remuneration Report, as shown below.
Resolution
Dates of AGM
Votes for
Votes against
Votes withheld
Directors’ Remuneration Policy 2022
December 2022
92.37 %
7.63 %
2,539,398
Directors’ Remuneration Report 2023
December 2023
99.69 %
0.31 %
101,291
We look forward to reconnecting with investors on the topic of executive remuneration over the course of 2024/25 as we review our
Remuneration Policy.
DIRECTORS’ REMUNERATION REPORT CONTINUED
Associated British Foods plc | 126 | Annual Report 2024
Members of the Remuneration Committee
In the financial year and as at the date of this report, members and Chair of the Committee have been as follows:
Role on Committee
Independence
Year of
appointment
Meetings
attended
Wolfhart Hauser
Member
Independent Director (until January 2024)
2015
2/2
Richard Reid
Member
Independent Director
2016
4/4
Michael McLintock
Member
Chairman
2017
4/4
Graham Allan
Chair
Independent Director
2018
4/4
Heather Rabbatts
Member
Senior Independent Director
2021
3/4
Annie Murphy
Member
Independent Director
2023
4/4
Kumsal Bayazit Besson
Member
Independent Director
2023
3/3
Loraine Woodhouse
Member
Independent Director
2024
0/0
The Chairman was considered independent on appointment and, as such, is a member of the Committee. George Weston
(Chief Executive), Sue Whalley (Chief People and Performance Officer) and Julie Withnall (Group Director of Reward) attend the
meetings of the Committee. No individual is present when their own remuneration is considered.
Role of the Committee
The Committee is responsible to the Board for determining:
• the Remuneration Policy for the executive directors and Chairman, considering internal and external trends on remuneration;
• the overall policy for remuneration of the Chief Executive’s direct reports;
• the design and monitoring of the operation of any Company share plans;
• stretching performance targets for executive directors to encourage enhanced performance;
• an approach that fairly and responsibly rewards contribution to the Company’s long-term success; and
• the specific terms and conditions of employment of each executive director, ensuring that contractual terms and payments made
on termination are fair to the individual and Company, that failure is not rewarded and loss is mitigated.
The Committee’s remit is set out in detail in its terms of reference, which are reviewed regularly to ensure that they are compliant
with the latest corporate governance requirements and were most recently updated in November 2022. They are available from the
corporate governance section of our website at www.abf.co.uk.
Remuneration Committee advisers and fees
Following a competitive tender the Committee appointed Deloitte LLP (Deloitte) in March 2020 to provide independent advice to the
Committee. Deloitte are members of the Remuneration Consultants Group and adhere to its Code of Conduct in relation to executive
remuneration consulting. The Committee is satisfied that the advice it received in the year was objective and independent and that
Deloitte did not have any connections with the Company or any individual directors which may impair their independence. This advice
included independent meetings with the Committee Chair during the year. During the year, other services that Deloitte provided to
the Company were corporate and employment tax advice, advice related to transactions, and risk and controls-related advisory work.
The fees paid to Deloitte for Committee assistance over the past financial year totalled £100,100.
Herbert Smith Freehills LLP and Addleshaw Goddard LLP provide the Company with legal advice. Their advice is made available
to the Committee, where it relates to matters within its remit.
Compliance
Where information in this report has been audited by Ernst & Young LLP, it has been clearly indicated. The report has been prepared
in line with the requirements of The Large and Medium-sized Companies Regulations (as amended), the recommendations of the UK
Corporate Governance Code (July 2018) and the requirements of the UK Listing Rules.
The Directors’ Remuneration Report was approved by the Board and signed on its behalf by
Paul Lister
Company Secretary
5 November 2024
Associated British Foods plc | 127 | Annual Report 2024
The directors of Associated British Foods plc present their report
for the 52 weeks ended 14 September 2024, in accordance with
section 415 of the Companies Act 2006. The Financial Conduct
Authority’s Disclosure Guidance and Transparency Rules and
UK Listing Rules also require the Company to make certain
disclosures, some of which have been included in other
appropriate sections of the Annual Report and Accounts.
The information set out on page 131 and the following cross-
referenced material, which would otherwise be required to be
disclosed in this Directors’ Report, is incorporated into this
Directors’ Report:
• likely future developments in the Group’s business
(pages 1 to 47);
• greenhouse gas emissions and energy consumption
(page 62 to 63);
• the Board of Directors (pages 90 and 91);
• information on our employees including disabled persons
(pages 58 to 60; 101 to 102; 121);
• information on how the directors keep employees informed
on and involved with the Company’s performance (pages 48;
95 to 96);
• information on how the directors have engaged with
employees (including those in the UK), have had regard
to employee interests and the effect of that regard on the
Company’s principal decisions (pages 48 to 53; 58 to
60; 95 to 96);
• information on how the directors have had regard to the need
to foster the Company’s business relationships with suppliers,
customers and others and the effect of that regard, including
on the principal decisions taken by the Company during the
year (pages 48 to 65); and
• the Corporate Governance Statement (pages 88 to 127).
Results and dividends
The consolidated income statement is on page 142. Profit for
the financial year attributable to equity shareholders amounted
to £1,455m.
The directors recommend a final dividend of 42.3p per ordinary
share to be paid, subject to shareholder approval, on 10 January
2025. Together with the interim dividend of 20.7p per share paid
on 5 July 2024, this amounts to 63.0p for the year. See page 162
for the note on dividends. In addition, a special dividend of 27.0p
is proposed by the directors as an interim dividend which will
also be paid on 10 January 2025 to holders of ordinary shares
on the register at the close of business on 13 December 2024.
Shareholder approval for this special dividend is not required.
Directors
The names of the persons who were directors of the Company
during the financial year and as at 5 November 2024 appear
on page 97.
Appointment of directors
The Articles give directors the power to appoint and replace
directors. Under the terms of reference of the Nomination
Committee, any appointment must be recommended
by the Nomination Committee for approval by the Board.
A person who is not recommended by the directors may only be
appointed as a director where details of that director have been
provided at least seven and not more than 35 days prior to the
relevant meeting by at least two members of the Company.
The Articles require all directors to retire and seek re-election
at each AGM in line with the 2018 Code.
Details of unexpired terms of directors’ service contracts are set
out in the Directors’ Remuneration Report on page 124.
Power of directors
The directors are responsible for managing the business of
the Company and may exercise all the powers of the Company
subject to the provisions of relevant statutes, to any directions
given by special resolution and to the Articles. The Articles, for
example, contain specific provisions and restrictions concerning
the Company’s power to borrow money. Powers relating to
the issuing of shares are also included in the Articles and such
authorities are renewed by shareholders at the AGM each year.
Directors’ indemnities and insurance
The directors of a subsidiary company that acts as trustee of
a pension scheme benefitted from a qualifying pension scheme
indemnity provision during the financial year and at the date
of this report.
The Company has in place appropriate directors’ and officers’
liability insurance cover in respect of legal action against its
executive and non-executive directors, amongst others.
Directors’ share interests
Details regarding the share interests of the directors (and their
persons closely associated) in the share capital of the Company,
including any interests under the Restricted Share Plan, LTIP and
any deferred awards, are set out in the Directors’ Remuneration
Report on pages 123 and 125.
Disclosures required under UK Listing Rule 6.6.1R
The following table is included to meet the requirements of UK
Listing Rule 6.6.1R. The information required to be disclosed by
UK Listing Rule 6.6.1R, where applicable to the Company, can
be located in the Annual Report at the references set out below.
Information required
Location in Annual Report
(1) Amount of interest
capitalised by the Group
Note 4 on page 160
(3) Long term incentive
scheme
See page 122
(11) Shareholder waiver
of dividends
Note 24 on page 181
(12) Shareholder waiver
of future dividends
Note 24 on page 181
(13) Board statement on
carrying on business
independently from controlling
shareholders
Directors’ Report on page 129
Paragraphs (2), (4), (5), (6), (7), (8), (9) and (10) of UK Listing Rule 6.6.1R
are not applicable.
Relationship with controlling shareholders
Any person who exercises or controls, on their own or together
with any person with whom they are acting in concert, 30%
or more of the votes able to be cast at general meetings
of a company is known as a ‘controlling shareholder’ under
the UK Listing Rules.
DIRECTORS’ REPORT
Directors’ Report
Associated British Foods plc | 128 | Annual Report 2024
Wittington Investments Limited (‘Wittington’) and, through
their control of Wittington, the trustees of the Garfield Weston
Foundation (the ’Foundation’) are controlling shareholders of the
Company. Certain other individuals, including certain members
of the Weston family who hold shares in the Company (and
including two of the Company’s directors, George Weston and
Emma Adamo) are, under the UK Listing Rules, treated as acting
in concert with Wittington and the trustees of the Foundation
and are therefore also treated as controlling shareholders of the
Company. Wittington, the trustees of the Foundation and these
individuals together comprise the controlling shareholders of the
Company and, as at 14 September 2024, had a combined
interest in approximately 60.3% of the Company’s voting rights.
On 14 November 2014 the Company entered into a relationship
agreement with Wittington and the trustees of the Foundation
(the ‘Relationship Agreement’) as required by the then provisions
of the UK Listing Rules. The Relationship Agreement remains in
force and contains certain independence-related undertakings
from the controlling shareholders.
The Board confirms that, as required by UK Listing Rule
6.6.1(13)R, the Company is able to carry on the business it
carries on as its main activity independently from its controlling
shareholders at all times.
Major interests in shares
During the period under review, and up until 1 November 2024,
the Company received the following formal notifications under
the Disclosure Guidance and Transparency Rules of material
interests in its shares:
Shareholder
Number of
ordinary shares
% of issued
share capital
Date of notification
of interest
Wittington
Investments
Limited
421,243,985
56.1 %
3 June 2024
Further details of the Company’s controlling shareholders for the
purpose of the UK Listing Rules who, as at 14 September 2024,
had a combined interest in approximately 60.3% of the voting
rights, are set out above.
Share capital
Details of the Company’s share capital and the rights attached
to the Company’s shares are set out in note 22 on page 179.
The Company has one class of share capital: ordinary shares
of 5 15/22p. The rights and obligations attaching to these shares
are governed by English law and the Articles.
No shareholder holds securities carrying special rights with
regard to the control of the Company. There are no restrictions
on voting rights.
There are no restrictions on the holding or transfer of the
ordinary shares other than the standard restrictions for an
English incorporated company.
Authority to issue shares
At the last AGM, held on 8 December 2023, authority was given
to the directors to allot shares in the Company up to an aggregate
nominal amount equivalent to two thirds of the shares in issue
(of which one third must be offered by way of rights issue).
This authority expires on the date of this year’s AGM to be
held on 6 December 2024. No such shares have been issued.
The directors propose to renew this authority at the 2024 AGM
for the forthcoming year.
A further special resolution passed at the 2023 AGM granted
authority to the directors to allot equity securities in the Company
for cash, without regard to the pre-emption provisions of the
Companies Act 2006 in certain circumstances. This authority also
expires on the date of the 2024 AGM and the directors will seek
to renew this authority for the forthcoming year.
Authority to purchase own shares
The Companies Act 2006 empowers the Company to purchase
its own shares subject to the necessary shareholder approval.
At the last AGM, authority was given to the directors to allow the
Company to purchase its own shares. This authority expires on
the date of this year’s AGM. The directors propose to renew this
authority at the 2024 AGM for the forthcoming year.
During the financial year, the Company continued to buy back
shares under its announced share buyback programmes in order
to reduce the capital of the Company. In the financial year, the
Company purchased a total of 23,649,281 of its ordinary shares
of 5 15/22p (being approximately 3.1% of called-up share capital)
for a total consideration of approximately £557,710,000. All such
shares were subsequently cancelled. Further details of the
Company’s share capital are set out on page 179.
Amendment to Articles
Any amendments to the Articles may be made in accordance
with the provisions of the Companies Act 2006 by way of special
resolution of the shareholders.
Significant agreements – change of control
The Group has contractual arrangements with many parties
including directors, employees, customers, suppliers and
banking groups. The following arrangements are considered to
be significant in terms of their potential impact on the business
of the Group as a whole and could alter or terminate on a
change of control of the Company:
• the Group has a number of borrowing facilities provided by
various banking groups. These facility agreements generally
include change of control provisions which, in the event
of a change of control of the Company, could result in their
renegotiation or withdrawal. The most significant of these is
a £1.5bn syndicated loan facility dated 9 June 2022, maturing
in June 2029, which was undrawn at the year end. In the
event of a change in control of the Company, the lenders
may request cancellation of the commitment and repayment
of any outstanding amounts; and
Associated British Foods plc | 129 | Annual Report 2024
• on 16 February 2022, the Company issued £400m 2.5% Notes
due 16 June 2034 (‘the Notes’). In the event of a change of
control of the Company, in certain circumstances set out in
the Terms and Conditions of the Notes as set out in the
Prospectus dated 14 February 2022 (which is available on the
Company’s website at www.abf.co.uk), noteholders shall have
the option to require the Company to redeem or repay the
notes at their principal amount together with interest accrued
to (but excluding) the date of redemption or purchase.
There are no agreements between the Company and its
directors or employees providing for compensation for loss of
office or employment that occurs as a result of a takeover bid.
Political donations
During the year, the Group did not make any political donations
or incur any political expenditure (within the ordinary meaning
of those words) in the UK. However, under the wider definition
of those terms in Part 14 of the Companies Act 2006, the
Company and subsidiaries of the Company paid costs totalling
approximately £12,200, predominantly relating to attendance of
employees at events at the Conservative and Labour Party
Conferences, which could potentially fall within that wider
definition. The Group did not make any contributions to non-UK
political parties during the year.
Charitable donations
Companies within the Group contribute significant sums to
charities of their choice. In addition, the dividends paid by the
Company to its shareholders are the principal source of funding
of the Garfield Weston Foundation. The Foundation is one of the
UK's leading grant-making charitable institutions and, in its last
financial year, donated some £100m to charities.
Financial risk management
Details of the Group’s use of financial instruments, together
with information on our risk management objectives and policies,
including the policy for hedging each major type of forecasted
transaction for which hedge accounting is used, and our exposure
to price, credit, liquidity, cash flow and interest rate risks, can be
found in note 26 starting on page 183.
Research and development
Innovative use of existing and emerging technologies will
continue to be crucial to the successful development of new
products and processes for the Group.
The Company has a technical centre in the UK at the Allied
Technical Centre. R&D facilities also exist across the Group,
including at: ACH Food Companies in the USA; AB Mauri in
Australia and the Netherlands (including the Global Technology
Centre); AB Enzymes in Germany; and our (now wholly-owned)
Roal pilot plant in Rajamäki, Finland. These centres support the
technical resources of the trading divisions in the search for new
technology and in monitoring and maintaining high standards
of quality and food safety. The Company also acquired National
Milk Records plc in 2023 which invests in an innovative range
of milk quality, herd health and genomic testing services,
generating data and building robust insights that empower
farmers to make informed decisions on cow productivity.
Branches
The Company, through various subsidiaries, has established
branches in a number of different countries in which the
Group operates.
Disclosure of information to auditor
Each of the directors who held office at the date of approval
of this Directors’ Report confirms that:
• so far as each director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
• each director has taken all the steps that they ought to have
taken as a director to make themself aware of any relevant
audit information and to establish that the Company’s auditor
is aware of that information.
For these purposes, relevant audit information means information
needed by the Company’s auditor in connection with the
preparation of its report on pages 132 to 139.
Auditor
Resolutions for the reappointment of Ernst & Young LLP as
auditor of the Company and to authorise the Audit Committee
to determine its remuneration are to be proposed at the
forthcoming AGM.
Annual general meeting
The AGM will be held on 6 December 2024 at 11.00 am.
Details of the resolutions to be proposed are set out in a
separate Notice of AGM which accompanies this report for
shareholders receiving hard copy documents and which is
available at www.abf.co.uk for those who elected to receive
documents electronically. All resolutions for which notice has
been given will be decided on a poll.
The Directors’ Report was approved by the Board and signed
on its behalf by
Paul Lister
Company Secretary
5 November 2024
Associated British Foods plc
Registered office:
Weston Centre
10 Grosvenor Street
London W1K 4QY
Company No. 293262
DIRECTORS’ REPORT CONTINUED
Associated British Foods plc | 130 | Annual Report 2024
Statement of directors’ responsibilities in respect
of the Annual Report and the financial statements
The directors are responsible for preparing the Annual Report
and the Group and parent company financial statements
in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent
company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements
in accordance with Adopted IFRS and have elected to prepare
the parent company financial statements in accordance with UK
Accounting Standards, including FRS 101.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent company and
of their profit or loss for that period.
In preparing each of the Group and parent company financial
statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable
and prudent;
• for the Group financial statements, state whether they have
been prepared in accordance with Adopted IFRS;
• for the parent company financial statements, state whether
applicable UK Accounting Standards have been followed,
subject to any material departures disclosed and explained
in the parent company financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and
the parent company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
company’s transactions and disclose with reasonable accuracy at
any time the financial position of the parent company and enable
them to ensure that its financial statements comply with the
Companies Act 2006. They have general responsibility for taking
such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Responsibility statement of the directors in respect
of the Annual Report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report includes a fair review of the development
and performance of the business and the position of the
Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
On behalf of the Board
Michael McLintock
Chairman
George Weston
Chief Executive
Eoin Tonge
Finance Director
5 November 2024
Statement of directors’ responsibilities
Associated British Foods plc | 131 | Annual Report 2024
Opinion
In our opinion:
• Associated British Foods plc’s consolidated financial
statements and parent company financial statements
(the “financial statements”) give a true and fair view of
the state of the Group’s and of the parent company’s affairs
as at 14 September 2024 and of the Group’s profit for the
52 weeks then ended;
• the consolidated financial statements have been properly
prepared in accordance with UK adopted international
accounting standards;
• the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements of Associated British
Foods plc (the ‘parent company’) and its subsidiaries (the ‘Group’)
for the 52 weeks ended 14 September 2024 which comprise:
Group
Parent company
Consolidated balance sheet
as at 14 September 2024
Balance sheet as at
14 September 2024
Consolidated income statement
for the 52 weeks then ended
Statement of changes in
equity for the 52 weeks
then ended
Consolidated statement of
comprehensive income for the
52 weeks then ended
Related notes 1 to 11 to
the financial statements
including material
accounting policy
information
Consolidated statement of
changes in equity for the 52 weeks
then ended
Consolidated statement of cash
flows for the 52 weeks then ended
Related notes 1 to 30 to the financial
statements, including material
accounting policy information
The financial reporting framework that has been applied in the
preparation of the consolidated financial statements is applicable
law and UK adopted international accounting standards.
The financial reporting framework that has been applied in
the preparation of the parent company financial statements
is applicable law and United Kingdom Accounting Standards,
including FRS 101 “Reduced Disclosure Framework”
(United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Independence
We are independent of the Group and parent company in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance
with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the Group or the parent company and
we remain independent of the Group and the parent company
in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group and
parent company’s ability to continue to adopt the going concern
basis of accounting included:
• Understanding the process undertaken by management
to evaluate the economic impacts of the principal risks on
the Group and to reflect these in the Group’s forecasts for
the going concern period until 28 February 2026;
• Assessing the reasonableness of forecasts underpinning
the going concern assessment which are based on the
Board-approved budget;
• Analysing the historical accuracy of forecasting by comparing
management’s forecasts to actual results, for 2024
and through the post-balance sheet period and performing
inquiries to the date of this report to determine whether
forecast cash flows are reliable based on past experience;
• Considering whether the Group’s forecasts in the going concern
assessment were consistent with other forecasts used by
the Group in its accounting estimates, including impairment;
• Confirming the opening cash and cash equivalents to the
financial statements and the Group’s facilities to the
agreements and third party confirmations and agreeing the
terms of the facilities to the underlying contracts;
• Considering the downside scenario identified by management
in their assessment on page 87, assessing whether there
are any other scenarios which should be considered, and
assessing whether the quantum of the impact of the
downside scenario in the going concern period was
sufficiently severe whilst remaining plausible;
• Testing the clerical accuracy of the model used to prepare
the Group’s going concern assessment;
• Performing a reverse stress test to establish the decrease
in liquidity that would lead to overall liquidity being exhausted
and considering whether this scenario was plausible; and
• Assessing the appropriateness of the Group’s disclosure
concerning the going concern basis of preparation.
The audit procedures performed to address this risk were
performed by the Group audit team.
We observed that the Group achieved the forecasts that it was
targeting in 2024. We observed the significant liquidity that the
Group has at its disposal that can be utilised if the modelled
downside was to materialise. The Group has the facilities
disclosed in note 26 which includes details of the maturities
of those facilities.
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s report to the
members of Associated British Foods plc
Associated British Foods plc | 132 | Annual Report 2024
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and parent company’s ability to continue as a going
concern to 28 February 2026.
In relation to the Group and parent company’s reporting on how
they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report. However, because not all future events or
conditions can be predicted, this statement is not a guarantee
as to the Group’s ability to continue as a going concern.
Overview of our audit approach
Audit
scope
• We performed an audit of the complete
financial information of 107 components
and audit procedures on specific balances
for a further 11 components.
• The components where we performed full
or specific audit procedures accounted for
87% of adjusted profit before taxation,
87% of revenue and 85% of total assets.
Key audit
matters
• Assessment of the carrying value of goodwill,
other intangible assets, property, plant and
equipment, investment properties and
right-of-use assets.
• Taxation provisions.
• Revenue recognition, including the risk
of management override.
Materiality
• We used a Group materiality of £98m
which represents 5% of adjusted profit
before taxation.
An overview of the scope of the parent company
and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and
our allocation of performance materiality determine our audit
scope for each company within the Group.
Taken together, this enables us to form an opinion on the
consolidated financial statements. We take into account the
level of revenue and adjusted profit before taxation, risk profile
(including country risk, controls and internal audit findings and
the extent of changes in management, systems and processes
and the business environment) and other known factors when
assessing the level of work to be performed at each entity.
In assessing the risk of material misstatement to the
Group financial statements, and to ensure we had adequate
quantitative coverage of significant accounts in the financial
statements, of the 539 reporting components of the Group,
we selected 118 components, which represent the principal
business units within the Group.
Of the 118 components selected, we performed an audit of the
complete financial information of 107 components (“full scope
components”) which were selected based on their size or risk
characteristics. For the remaining 11 components (“specific
scope components”), we performed audit procedures on specific
accounts within that component that we considered had the
potential for the greatest impact on the significant accounts
in the financial statements either because of the size of these
accounts or their risk profile.
The reporting components where we performed audit
procedures accounted for 87% (2023 – 88%) of the Group’s
adjusted profit before taxation, 87% (2023 – 87%) of the Group’s
revenue and 85% (2023 – 86%) of the Group’s total assets.
For the current period, the full scope components contributed
83% (2023 – 79%) of the Group’s adjusted profit before taxation,
84% (2023 – 84%) of the Group’s revenue and 83% (2023 – 83%)
of the Group’s total assets. The specific scope components
contributed 4% (2023 – 9%) of the Group’s adjusted profit
before taxation, 3% (2023 – 3%) of the Group’s revenue and
2% (2023 – 3%) of the Group’s total assets. The audit scope
of these components may not have included testing of all
significant accounts of the component but will have contributed
to the coverage of significant accounts tested for the Group.
Of the remaining 421 components that together represent
13% of the Group’s adjusted profit before taxation, none are
individually greater than 1% of the Group’s adjusted profit before
taxation. For these components, we performed other procedures,
including analytical review, testing of consolidation journals
and intercompany eliminations and foreign currency translation
recalculations to respond to any potential risks of material
misstatement to the Group financial statements.
The charts below illustrate the coverage obtained from the work
performed by our audit teams.
Adjusted profit before taxation
l Full scope components
83 %
l Specific scope components
4 %
l Other procedures
13 %
Revenue
l Full scope components
84 %
l Specific scope components
3 %
l Other procedures
13 %
Total assets
l Full scope components
83 %
l Specific scope components
2 %
l Other procedures
15 %
Associated British Foods plc | 133 | Annual Report 2024
Involvement with component teams
In establishing our overall approach to the Group audit, we
determined the type of work that needed to be undertaken at
each of the components by us, as the Group audit engagement
team, or by component auditors from other EY global network
firms operating under our instruction. Of the 107 full scope
components, audit procedures were performed on 34 of these
directly by the Group audit team and 73 by component audit
teams. For the 11 specific scope components, where the work
was performed by component auditors, we determined the
appropriate level of involvement to enable us to determine that
sufficient audit evidence had been obtained as a basis for our
opinion on the Group as a whole.
During the current audit cycle, we completed a combination
of physical visits to component teams and alternative oversight
procedures, including video meetings and live reviews of our
local audit teams’ working papers based on the risk and size of
the components. Our physical visits included the senior statutory
auditor visiting components in Ireland, Malawi, the United States
of America and the United Kingdom and other senior members
of the primary team physically visiting components in the United
States of America, the Netherlands, Thailand, Switzerland, South
Africa, Spain, Italy, the United Kingdom, Turkey and Poland.
The alternative oversight procedures involved using video
technology to meet with our component teams to discuss and
direct their audit approach. We utilised our global audit software
to review key working papers, oversee the work performed
in response to the risk areas including asset impairment, tax
provisions and revenue recognition and to assess the significant
audit findings. We also held meetings with local management
and obtained updates on IT systems implementations and
local matters including tax, pensions and legal. The Group audit
team interacted regularly with the component teams where
appropriate during various stages of the audit, reviewed
key working papers and were responsible for the scope and
direction of the audit process. This, together with the additional
procedures performed at a consolidated level, gave us appropriate
evidence for our opinion on the Group financial statements.
Climate change
Stakeholders are increasingly interested in how climate
change will impact Associated British Foods plc. The Group
has determined that the most significant future impacts from
climate change on their operations will be from the impact
on key agricultural crops, the impact of flooding on end to
end supply chain including operations, resilience of workers
to mitigate/adapt to climate change and transition risks as the
world reduces its reliance on Carbon. These are explained on
pages 67 to 70 in the Task Force On Climate Related Financial
Disclosures and on pages 78 to 86 in the principal risks and
uncertainties. The Group does not set group-wide climate-related
commitments, in line with their devolved business model, rather
the separate businesses set plans and commitments appropriate
to their operations and supply chains. They have explained their
climate commitments for ABF Sugar and Primark, on pages
70 to 77. All of these disclosures form part of the “Other
information”, rather than the audited financial statements.
Our procedures on these unaudited disclosures therefore
consisted solely of considering whether they are materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appear
to be materially misstated, in line with our responsibilities
on “Other information”.
In planning and performing our audit, we assessed the potential
impacts of climate change on the Group’s business and any
consequential material impact on its financial statements.
The Group has explained in Material accounting policies (Climate
change) how they have reflected the impact of climate change in
their financial statements. These disclosures also explain where
governmental and societal responses to climate change risks
are still developing, and where the degree of certainty of these
changes means that they cannot be taken into account when
determining asset and liability valuations under the requirements
of UK adopted International Accounting Standards.
Whilst the Group have stated their commitment to the aspirations
of the Paris Agreement to achieve net zero emissions by 2050,
they are currently unable to determine the full future economic
impact on their business model, operational plans and customers
to achieve this and therefore as set out above the potential
impacts are not fully incorporated in these financial statements.
Our audit effort in considering the impact of climate change on
the financial statements was focused on evaluating management’s
assessment of the impact of climate risk, physical and transition,
their climate commitments, the effects of material climate risks
disclosed on pages 85 to 86 and whether these have been
appropriately reflected in asset values where these are determined
through modelling future cash flows, being goodwill, other
intangible assets, property, plant and equipment, investment
properties, right-of-use assets and deferred tax assets. As part
of this evaluation, we performed our own risk assessment,
supported by our climate change internal specialists, to
determine the risks of material misstatement in the financial
statements from climate change which needed to be
considered in our audit.
We also challenged the Directors’ considerations of climate
change risks in their assessment of going concern and viability
and associated disclosures.
Based on our work, whilst we have not identified the impact
of climate change on the financial statements to be a standalone
key audit matter, we have considered the impact on the carrying
value of goodwill, other intangible assets, property, plant and
equipment, investment properties and right-of-use assets key
audit matter. Details of the impact, our procedures and findings
are included in our explanation of the key audit matter below.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due
to fraud) that we identified. These matters included those
which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and
in our opinion thereon, and we do not provide a separate opinion
on these matters.
INDEPENDENT AUDITOR’S REPORT CONTINUED
Associated British Foods plc | 134 | Annual Report 2024
Risk
Our response to the risk
Key observations
communicated to the
Audit Committee
Assessment of the carrying value
of goodwill, other intangible assets,
property, plant and equipment,
investment properties and
right-of-use assets (2024 – £10,354m;
2023 – £9,986m)
The Group has significant carrying
amounts of goodwill, other intangible
assets, property, plant and equipment,
investment properties and right-of-use
assets. The most sensitive impairment
tests covered Jordans Dorset Ryvita
(‘JDR’) (£133m), the Don business
(carrying value £111m) and Azucarera
(carrying value £235m).
Don and JDR continue to operate
in environments where there is
significant retailer pressure on price
and competitor activity, which is
further exacerbated by high inflationary
costs and operational challenges.
Azucarera operates in a traded
commodity market and as such is
exposed to trends in market price.
There has been recent downward
pressure on the price of European
sugar which is not expected to abate
in the short term.
There is a risk that these cash
generating units (‘CGUs’) or groups of
CGUs may not achieve the anticipated
business performance to support their
carrying value, or that the estimated
fair value less cost to sell of a disposal
group may not support its carrying
value. This could lead to an impairment
charge that has not been recognised
by management.
Significant estimation is required in
forecasting the future cash flows of
each CGU or, in the case of goodwill,
group of CGUs, together with the rate
at which they are discounted.
This risk existed in the prior year as
well. We focus our audit effort on
those businesses where we believe
there is greater risk of impairment.
Refer to the Audit Committee Report
(page 107); accounting policies (pages
151 to 153); accounting estimates and
judgements (page 154); and notes 8, 9,
10 and 11 to the consolidated financial
statements (pages 164 to 169).
We understood the methodology applied by management in
performing its impairment test for each of the relevant CGUs
or groups of CGUs and walked through the controls over the
process but did not test their operating effectiveness.
For CGUs where there were indicators of impairment or low
levels of headroom, including the three CGUs described, we
performed detailed testing to critically assess and corroborate
the key inputs to the impairment tests, including:
• Analysing the historical accuracy of budgets to actual results
to determine whether forecast cash flows are reliable;
• For JDR, we critically challenged and evaluated the key
assumptions adopted in managements’ forecasts. Where
assumptions in our opinion could not be supported or
appeared, in our view, optimistic these have been risk
adjusted and/or removed in our analysis. We calculated the
breakeven level of operating profit required and assessed this
in the context of historical performance of the business;
• For Don, we challenged management’s key assumptions
within the impairment model for optimism and performed an
independent assessment of the fair value of underlying assets.
We used specialists to assess property and brand values in
line with IFRS 13;
• For Azucarera, we challenged the key assumptions adopted
in management’s forecasts by performing stress test analysis
on the key estimates, assessing the impact on the underlying
cash flows. This included sensitising assumptions relating
to crop yields and the impact of climate factors on these;
• In conjunction with our valuation specialists, assessing the
discount rates used by independently determining a range
of acceptable rates for each CGU, considering market data
and comparable organisations, and comparing these ranges
to the rates used by management;
• Validating the long-term growth rates assumed by comparing
them to economic and industry forecasts that we obtained
independently; and
• Considering any contra evidence obtained during the course
of the audit.
For all CGUs we calculated the degree to which the key inputs
and assumptions would need to fluctuate before an impairment
is triggered and we considered the likelihood of this occurring.
We performed our own sensitivities on the Group’s forecasts.
We then determined whether adequate headroom remained
using these sensitivities and our independent assessment.
We assessed the disclosures in notes 8, 9, 10 and 11 against the
requirements of IAS 36, in particular in respect of the requirement
to disclose further sensitivities for CGUs where a reasonably
possible change in a key assumption would cause an impairment.
The JDR, Don and Azucarera CGUs were subject to full scope
audit procedures by the respective component teams, directed,
and reviewed, by the Group audit team.
For JDR, Don and
Azucarera, we concluded
that no impairments
were required at the
period end, based on
the results of our work.
Assets relating to JDR
and Azucarera remain
sensitive to reasonably
possible changes in key
assumptions.
Management discloses
these sensitivities
appropriately in the
intangible assets and
property, plant and
equipment notes to the
consolidated financial
statements, in
accordance with the
requirements of IAS 36.
Associated British Foods plc | 135 | Annual Report 2024
Risk
Our response to the risk
Key observations
communicated to the
Audit Committee
Tax provisions for uncertain tax
positions £82m (2023 –£55m)
included within the income tax
liability of £133m (2023 – £109m).
The global nature of the Group’s
operations results in complexities
in the payment of, and accounting
for, tax.
Management applies judgement
in assessing tax exposures in each
jurisdiction, which require
interpretation of local tax laws.
Given this judgement, there is a risk
that tax provisions are misstated.
This risk existed in the prior year as
well. Refer to the Audit Committee
Report (page 108); accounting policies
(page 150); accounting estimates and
judgements (page 154); and note 5 to
the consolidated financial statements
(pages 161 to 162).
We understood:
• The Group’s process for determining the completeness
and measurement of provisions for tax;
• The methodology for the calculation of the tax provision
and considered whether this is compliant with IFRIC 23
requirements; and
• Management’s controls over tax reporting but did not test
the operating effectiveness of these controls.
The Group audit team, including tax specialists, evaluated the tax
positions taken by management in each significant jurisdiction
in the context of local tax law outcomes, correspondence with
tax authorities and the status of any tax audits. Our work
utilised additional support from country tax specialists in five
jurisdictions where the Group had more significant tax exposures.
We assessed the Group’s transfer pricing judgements,
considering the way in which the Group’s businesses operate
and the correspondence and agreements reached with
tax authorities.
We considered the impact of BEPS 2.0 to the extent legislation
is enacted and whether this creates any additional tax
uncertainties for which a provision is required.
In evaluating management’s accounting, we developed our own
range of acceptable provisions for the Group’s tax exposures,
based on the evidence we obtained. We then compared
management’s provision to our independently determined range.
We have evaluated the
Group’s tax provisions
and challenged the
judgements applied.
We consider provisions
for uncertain tax
positions to be within an
acceptable range in the
context of the Group’s
overall tax exposures.
INDEPENDENT AUDITOR’S REPORT CONTINUED
Associated British Foods plc | 136 | Annual Report 2024
Risk
Our response to the risk
Key observations
communicated to the
Audit Committee
Revenue recognition, including
the risk of management override
£20,073m (2023 – £19,750m)
There continues to be pressure
to meet expectations and targets.
Management reward and incentive
schemes, based on achieving profit
targets and working capital as a
percentage of revenue targets, may
also place pressure on management
to manipulate revenue recognition.
The majority of the Group’s sales
arrangements are generally
straightforward, being on a point
of sale basis and requiring little
judgement to be exercised. However,
in the Grocery segment, management
estimates the level of trade promotions
and rebates to be applied to its
sales to customers, adding a level
of judgement to revenue recognition.
Rebates and other promotions are
approximately 3% (2023 – 3%) of the
Group’s gross revenue.
There is a risk that management
may override controls intentionally to
misstate revenue transactions, either
through the judgements made in
estimating rebates in the Grocery
segment or by recording fictitious
revenue transactions across
the business.
This risk existed in the prior year
as well. Refer to the accounting
policies (page 149) and note 1 to the
consolidated financial statements
(pages 155 to 158).
We understood the revenue recognition policies and how they
are applied, including the relevant controls, we did not test the
operating effectiveness of these controls.
We discussed key contractual arrangements with management
and obtained relevant documentation, including in respect
of trade promotions and rebate arrangements. Where rebate
arrangements existed, on a sample basis, we obtained third-party
confirmations or performed appropriate alternative procedures,
including reviewing contracts and recalculating rebates. We also
performed hindsight analysis over changes to prior period rebate
estimates to challenge the assumptions made, including
assessing the estimates for evidence of management bias.
For several businesses, including Primark, as part of our overall
revenue recognition testing, we used data analysis tools on
revenue transactions in the period to test the correlation of
revenue to cash and sample tested to cash receipts to verify
the occurrence of revenue. This provided us with assurance over
£17.2bn (86%) (2023 – £17.1bn (87%)) of revenue recognised
by the Group. For those in-scope businesses where we did not
use data analysis tools, we performed alternative procedures
over revenue recognition such as detailed transaction testing
to invoices and payments.
We performed other audit procedures specifically designed to
address the risk of management override of controls in addition
to the correlation testing including journal entry testing, applying
particular focus to manual journals.
We performed full and specific scope audit procedures over
this risk area in 79 locations, which covered 87% of the
Group’s revenue.
The audit procedures performed to address this risk were
performed by component teams and reviewed by the
Group audit team.
Based on the procedures
performed, including
those in respect of trade
promotions and rebates
in the Grocery segment,
we did not identify any
evidence of management
override or material
misstatement in the
revenue recognised
in the period.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements
on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and
extent of our audit procedures.
We determined materiality for the Group to be £98m
(2023 – £66m), which is 5% (2023 – 5%) of adjusted profit
before taxation. We believe that adjusted profit before taxation
provides us with the most relevant performance measure to the
stakeholders of the entity and therefore have determined Group
materiality based on this number.We determined materiality for
the parent company to be £79m (2023 – £49m), which is 2%
(2023 – 2%) of equity.
Performance materiality
The application of materiality at the individual account or balance
level. It is set at an amount to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment, our
judgement was that performance materiality was 75% (2023 –
75%) of our planning materiality, namely £73m (2023 – £50m).
Audit work at component locations for the purpose of obtaining
audit coverage over significant financial statement accounts is
undertaken based on a percentage of total performance materiality.
The performance materiality set for each component is based
on the relative scale and risk of the component to the Group
as a whole and our assessment of the risk of misstatement
at that component.
In the current year, the range of performance materiality allocated
to components was £2m to £43m (2023 – £1m to £20m).
Associated British Foods plc | 137 | Annual Report 2024
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would report
to them all uncorrected audit differences in excess of £1m
(2023 – £1m) as well as differences below that threshold that,
in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both
the quantitative measures of materiality discussed above and
in light of other relevant qualitative considerations in forming
our opinion.
Other information
The other information comprises the information included in the
Annual Report set out on pages 1 to 131, other than the financial
statements and our auditor’s report thereon. The directors are
responsible for the other information contained within the
Annual Report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of the other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the
Group and the parent company and its environment obtained
in the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent company financial statements and the part of
the Directors’ Remuneration Report to be audited are not
in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations
we require for our audit.
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group and parent company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 87
• Directors’ explanation as to their assessment of the
company’s prospects, the period this assessment covers and
why the period is appropriate set out on pages 87;
• Director’s statement on whether they have a reasonable
expectation that the Group will be able to continue in operation
and meets its liabilities set out on pages 87;
• Directors’ statement on fair, balanced and understandable set
out on page 105;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out
on page 106;
• The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems set out on page 105; and
• The section describing the work of the Audit Committee set
out on page 104 to 110.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities
Statement set out on page 131 the directors are responsible for
the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group and parent company’s ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
Group or the parent company or to cease operations, or have
no realistic alternative but to do so.
INDEPENDENT AUDITOR’S REPORT CONTINUED
Associated British Foods plc | 138 | Annual Report 2024
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these financial statements.
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including
fraud. The risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through
collusion. The extent to which our procedures are capable
of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with
governance of the company and management.
Our approach was as follows:
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group and determined
that the most significant frameworks which are directly
relevant to specific assertions in the financial statements are
those that relate to the reporting framework (UK adopted
International Accounting Standards, United Kingdom Generally
Accepted Accounting Practice, the Companies Act 2006 and
the UK Corporate Governance Code) and the relevant tax laws
and regulations in the jurisdictions in which the Group
operates. In addition, we concluded that there are certain
significant laws and regulations which may have an effect
on the determination of the amounts and disclosures in the
financial statements being the UK Listing Rules of the UK
Listing Authority, and those laws and regulations relating
to health and safety, employee matters, food standards
and food safety.
• We understood how Associated British Foods plc is complying
with those frameworks by observing the oversight of those
charged with governance, the culture of honesty and ethical
behaviour and whether a strong emphasis is placed on fraud
prevention, which may reduce opportunities for fraud to take
place, and fraud deterrence, which could persuade individuals
not to commit fraud because of the likelihood of detection
and punishment.
• We assessed the susceptibility of the Group’s financial
statements to material misstatement, including how fraud
might occur by meeting with management from various parts
of the business to understand where it considered there
was susceptibility to fraud. We also considered performance
targets and their influence on efforts made by management
to manage earnings or influence the perceptions of analysts.
We considered the programmes and controls that the Group
has established to address risks identified, or that otherwise
prevent, deter and detect fraud; and how senior management
monitors those programmes and controls. To support in these
procedures, we engaged forensics specialists to assist in
assessing risk factors, and where appropriate, to aid in
designing procedures to address the risk.
• Where the risk was considered to be higher, we performed
audit procedures to address each identified fraud risk.
These procedures included testing manual journals and testing
the authorisation of certain significant supplier contracts
and payments related to capitalisation of assets, and were
designed to provide reasonable assurance that the financial
statements were free from material fraud or error.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws and
regulations. Our procedures involved: journal entry testing,
with a focus on manual consolidation journals and journals
indicating large or unusual transactions based on our
understanding of the business; enquiries of legal counsel,
Group management, internal audit, divisional management and
all full and specific scope management; and focused testing,
as referred to in the key audit matters section above.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Other matters we are required to address
Following the recommendation from the Audit Committee,
we were appointed by the shareholders on 4 December 2015
to audit the financial statements for the 52 weeks ending
17 September 2016 and subsequent financial periods.
The period of total uninterrupted engagement including previous
renewals and reappointments is nine years, covering the 52
weeks ending 17 September 2016 until the 52 weeks ending
14 September 2024. The audit opinion is consistent with the
additional report to the Audit Committee.
Use of our report
This report is made solely to the company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and
the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Simon O’Neill (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP,
Statutory Auditor
Birmingham
5 November 2024
Associated British Foods plc | 139 | Annual Report 2024
Scope
We have been engaged by Associated British Foods plc (‘Associated British Foods’ or the ‘Group’) to perform a ‘limited assurance
engagement,’ as defined by International Standards on Assurance Engagements, hereafter referred to as the engagement, to report
on the Group selected non-financial indicators as listed below in Table 1 (the ‘Subject Matter’) for the year ended 31 July 2024 (or for
the 52 weeks ended 14 September 2024 for metrics marked with an asterisk) contained in the Group’s 2024 Annual Report and in the
2024 Data subsection of the Responsibility section of the Associated British Foods website (together the ‘Reports’).
The Subject Matter, as listed in Table 1, is also marked with a Δ symbol in the Reports:
Table 1. List of selected non-financial indicators
Topic
Indicator name
Associated British Foods – Group
Health and
Safety (H&S)
• Number of work-related deaths to employees
• Number of work-related deaths to independent contractors as a result of Associated British Foods’ work activities
• Number of Lost Time Injuries (LTIs) to employees on-site
• Number of LTIs to contractors on-site
• LTIs rate (%) to employees on-site
• LTIs rate (%) to contractors on-site
Environment
• Total energy consumed (GWh)
• Total electricity exported (GWh)
• Percentage of renewable energy (%)
• Total energy exported (GWh)
• Biogenic carbon emissions (tCO2e)
• Greenhouse gas emissions (tCO2e) consisting of
• Scope 1
• Scope 2 location-based
• Scope 2 market-based
• Quantity of non-hazardous waste sent for disposal (tonnes)
• Quantity of hazardous waste sent for disposal (tonnes)
• Quantity of waste sent for recycling or recovery or other beneficial use (tonnes)
• Quantity of packaging used for the containment, protection, handling, delivery and presentation of goods (tonnes)
• Total water abstracted (m3)
• Water reused or recycled (m3)
• Effluent leaving the site for final disposal (m3)
People
• Number of employees*
• Percentage of women in workforce (%)*
Operational
• Tonnes of product
Business segment specific – Primark
Environment
• Greenhouse gas emissions (Scope 1, 2 and 3) (tCO2e)
• Percentage of our clothing unit sales containing recycled or more sustainably sourced materials (%)
• Number of farmers trained in Primark Cotton Project
• Selling space (sqm)*
• Number of countries of operation*
Other than as described in the preceding paragraph, which sets out the scope of our engagement, we did not perform assurance
procedures on the remaining information included in the Reports, and accordingly, we do not express a conclusion on this information.
INDEPENDENT ASSURANCE STATEMENT
Independent Assurance Statement
to Associated British Foods plc
Associated British Foods plc | 140 | Annual Report 2024
Criteria applied by Associated British Foods
In preparing the Subject Matter, Associated British Foods has
applied the ‘Methodologies’ and ‘Scope of reporting’ published
within the 2024 Data subsection of the Responsibility section of
the Associated British Foods website (the ‘Criteria’).
Associated British Foods’ responsibilities
Associated British Foods’ management is responsible for
selecting the Criteria, and for presenting the Subject Matter
in accordance with that Criteria, in all material respects.
This responsibility includes establishing and maintaining internal
controls, maintaining adequate records and making estimates
that are relevant to the preparation of the subject matter,
such that it is free from material misstatement, whether due
to fraud or error.
EY’s responsibilities
Our responsibility is to express a conclusion on the presentation
of the Subject Matter based on the evidence we have obtained.
We conducted our engagement in accordance with the
International Standard for Assurance Engagements Other
Than Audits or Reviews of Historical Financial Information
(‘ISAE 3000 (Revised)’ and the terms of reference for this
engagement as agreed with Associated British Foods plc on 28
June 2024. Those standards require that we plan and perform
our engagement to express a conclusion on whether we are
aware of any material modifications that need to be made to
the Subject Matter in order for it to be in accordance with the
Criteria, and to issue a report. The nature, timing, and extent
of the procedures selected depend on our judgment, including
an assessment of the risk of material misstatement, whether
due to fraud or error.
We believe that the evidence obtained is sufficient and appropriate
to provide a basis for our limited assurance conclusions.
Our independence and quality management
We have maintained our independence and confirm that
we have met the requirements of the Code of Ethics
for Professional Accountants issued by the International
Ethics Standards Board for Accountants, and have the
required competencies and experience to conduct this
assurance engagement.
EY also applies International Standard on Quality Management 1,
Quality Management for Firms that Perform Audits or Reviews
of Financial Statements, or Other Assurance or Related Services
engagements, which requires that we design, implement and
operate a system of quality management including policies
or procedures regarding compliance with ethical requirements,
professional standards and applicable legal and
regulatory requirements.
Description of procedures performed
Procedures performed in a limited assurance engagement
vary in nature and timing from, and are less in extent than for
a reasonable assurance engagement. Consequently, the level
of assurance obtained in a limited assurance engagement is
substantially lower than the assurance that would have been
obtained had a reasonable assurance engagement been
performed. Our procedures were designed to obtain a limited
level of assurance on which to base our conclusion and do
not provide all the evidence that would be required to provide
a reasonable level of assurance.
Although we considered the effectiveness of management’s
internal controls when determining the nature and extent of our
procedures, our assurance engagement was not designed to
provide assurance on internal controls. Our procedures did not
include testing controls or performing procedures relating to
checking aggregation or calculation of data within IT systems.
A limited assurance engagement consists of making enquiries,
primarily of persons responsible for preparing the Subject Matter
and related information, and applying analytical and other
appropriate procedures.
Our procedures included:
• Engaging with selected members of the Group's leadership
and senior management to discuss the governance structures
around the preparation of the Subject Matter.
• Meeting with key data owners within each division and
the central team to understand the processes for recording,
aggregating, calculating, and reporting the Subject Matter
as it relates to the Group’s consolidated figures.
• Undertaking analytical procedures on the Subject Matter
and making enquiries of management to obtain explanations
for any significant differences we identified.
• Analysing each division’s contribution to the Group’s
consolidated figures to identify material risk areas and applying
analytical procedures to assess the accuracy and
completeness of the Subject Matter, consistent with the
established Criteria.
• Testing, on a sample basis, underlying source information
to check the accuracy of the Subject Matter.
• Recalculating the group-level computations to assess
the accuracy of data aggregation and consolidation for
reporting purposes.
We also performed such other procedures as we considered
necessary in the circumstances.
Conclusion
Based on our procedures and the evidence obtained, we are not
aware of any material modifications that should be made to the
Subject Matter for the year ended 31 July 2024 (or for the 52
weeks ended 14 September 2024 for metrics marked with an
asterisk), in order for it to be in accordance with the Criteria.
Use of our Assurance Statement
We disclaim any assumption of responsibility for any reliance
on this assurance statement or its conclusions to any persons,
or for any purpose other than that for which it was prepared.
Accordingly, we accept no liability whatsoever, whether
in contract, tort or otherwise, to any third party for any
consequences of the use or misuse of this assurance
statement or its conclusion.
Ernst & Young LLP
Birmingham
5 November 2024
Associated British Foods plc | 141 | Annual Report 2024
2024
2023
Continuing operations
Note
£m
£m
Revenue
1
20,073
19,750
Operating costs before exceptional items
2
(18,239)
(18,410)
Exceptional items
2
(35)
(109)
1,799
1,231
Share of profit after tax from joint ventures and associates
12
117
124
Profits less losses on disposal of non-current assets
16
28
Operating profit
1,932
1,383
Adjusted operating profit
1
1,998
1,513
Profits less losses on disposal of non-current assets
16
28
Amortisation of non-operating intangibles
8
(40)
(41)
Acquired inventory fair value adjustments
2
(2)
(3)
Transaction costs
2
(5)
(5)
Exceptional items
2
(35)
(109)
Profits less losses on sale and closure of businesses
23
26
(3)
Profit before interest
1,958
1,380
Finance income
4
71
48
Finance expense
4
(135)
(128)
Other financial income
4
23
40
Profit before taxation
1,917
1,340
Adjusted profit before taxation
1,957
1,473
Profits less losses on disposal of non-current assets
16
28
Amortisation of non-operating intangibles
8
(40)
(41)
Acquired inventory fair value adjustments
2
(2)
(3)
Transaction costs
2
(5)
(5)
Exceptional items
2
(35)
(109)
Profits less losses on sale and closure of businesses
23
26
(3)
Taxation – UK (excluding tax on exceptional items)
(108)
(40)
– UK (on exceptional items)
5
–
– Overseas (excluding tax on exceptional items)
(335)
(300)
– Overseas (on exceptional items)
1
68
5
(437)
(272)
Profit for the period
1,480
1,068
Attributable to
Equity shareholders
1,455
1,044
Non-controlling interests
25
24
Profit for the period
1,480
1,068
Basic and diluted earnings per ordinary share (pence)
7
193.7
134.2
Dividends per share paid and proposed for the period (pence)
6
63.0
47.3
Special dividend per share proposed for the period (pence)
6
27.0
12.7
FINANCIAL STATEMENTS
Consolidated income statement
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 142 | Annual Report 2024
2024
2023
Note
£m
£m
Profit for the period recognised in the income statement
1,480
1,068
Other comprehensive income
Remeasurements of defined benefit schemes
13
38
(7)
Deferred tax associated with defined benefit schemes
(10)
4
Items that will not be reclassified to profit or loss
28
(3)
Effect of movements in foreign exchange
(349)
(470)
Net gain on hedge of net investment in foreign subsidiaries
–
1
Net loss on other investments held at fair value through other comprehensive income
(5)
–
Deferred tax associated with movements in foreign exchange
–
(5)
Current tax associated with movements in foreign exchange
(2)
6
Movement in cash flow hedging position
(51)
(260)
Deferred tax associated with movement in cash flow hedging position
13
40
Deferred tax associated with movement in other investments
1
–
Share of other comprehensive loss of joint ventures and associates
(10)
(18)
Effect of hyperinflationary economies
59
40
Items that are or may be subsequently reclassified to profit or loss
(344)
(666)
Other comprehensive loss for the period
(316)
(669)
Total comprehensive income for the period
1,164
399
Attributable to
Equity shareholders
1,159
397
Non-controlling interests
5
2
Total comprehensive income for the period
1,164
399
Consolidated statement of comprehensive income
for the for the 52 weeks ended 14 September 2024
Associated British Foods plc | 143 | Annual Report 2024
2024
2023
Note
£m
£m
Non-current assets
Intangible assets
8
1,896
1,870
Property, plant and equipment
9
6,098
5,674
Investment properties
10
105
107
Right-of-use assets
11
2,255
2,335
Investments in joint ventures
12
286
303
Investments in associates
12
95
91
Employee benefits assets
13
1,506
1,446
Income tax
–
23
Deferred tax assets
14
223
193
Other receivables
15
30
63
Total non-current assets
12,494
12,105
Current assets
Inventories
16
2,942
3,207
Biological assets
17
94
99
Trade and other receivables
15
1,697
1,778
Derivative assets
26
28
96
Current asset investments
18,25
334
–
Income tax
102
102
Cash and cash equivalents
18
1,323
1,457
Total current assets
6,520
6,739
Total assets
19,014
18,844
Current liabilities
Lease liabilities
11
(267)
(335)
Loans and overdrafts
19
(159)
(168)
Trade and other payables
20
(2,934)
(2,953)
Derivative liabilities
26
(97)
(69)
Income tax
(133)
(109)
Provisions
21
(78)
(55)
Total current liabilities
(3,668)
(3,689)
Non-current liabilities
Lease liabilities
11
(2,798)
(2,825)
Loans
19
(454)
(394)
Provisions
21
(60)
(48)
Deferred tax liabilities
14
(682)
(626)
Employee benefits liabilities
13
(74)
(69)
Total non-current liabilities
(4,068)
(3,962)
Total liabilities
(7,736)
(7,651)
Net assets
11,278
11,193
Equity
Issued capital
22
42
44
Other reserves
22
177
179
Translation reserve
22
(383)
(42)
Hedging reserve
22
(45)
2
Retained earnings
11,395
10,910
Total equity attributable to equity shareholders
11,186
11,093
Non-controlling interests
92
100
Total equity
11,278
11,193
The financial statements on pages 142 to 210 were approved by the Board of Directors on 5 November 2024 and were signed
on its behalf by:
Michael McLintock
Chairman
Eoin Tonge
Finance Director
FINANCIAL STATEMENTS CONTINUED
Consolidated balance sheet
at 14 September 2024
Associated British Foods plc | 144 | Annual Report 2024
2024
2023
Note
£m
£m
Cash flow from operating activities
Profit before taxation
1,917
1,340
Profits less losses on disposal of non-current assets
(16)
(28)
Profits less losses on sale and closure of businesses
(26)
3
Transaction costs
2
5
5
Finance income
4
(71)
(48)
Finance expense
4
135
128
Other financial income
4
(23)
(40)
Share of profit after tax from joint ventures and associates
12
(117)
(124)
Amortisation
8
100
82
Depreciation (including of right-of-use assets)
849
804
Exceptional items
2
35
109
Acquired inventory fair value adjustments
2
3
Effect of hyperinflationary economies
21
14
Net change in the fair value of current biological assets
(22)
(11)
Share-based payment expense
24
31
18
Pension costs less contributions
58
(8)
Decrease/(increase) in inventories
169
(94)
Decrease/(increase) in receivables
23
(107)
Increase/(decrease) in payables
113
(15)
Purchases less sales of current biological assets
1
(9)
Increase/(decrease) in provisions
30
(27)
Cash generated from operations
3,214
1,995
Income taxes paid
(340)
(341)
Net cash generated from operating activities
2,874
1,654
Cash flow from investing activities
Dividends received from joint ventures and associates
12
105
107
Purchase of property, plant and equipment
(1,124)
(997)
Purchase of intangibles
(60)
(76)
Lease incentives received
40
62
Sale of property, plant and equipment
43
48
(Increase)/decrease in current asset investments
25
(334)
3
Purchase of subsidiaries, joint ventures and associates
23
(93)
(94)
Sale of subsidiaries, joint ventures and associates
24
4
Purchase of other investments
(4)
(4)
Interest received
71
44
Net cash used in investing activities
(1,332)
(903)
Cash flow from financing activities
Dividends paid to non-controlling interests
(13)
(7)
Dividends paid to equity shareholders
6
(502)
(345)
Interest paid
(140)
(118)
Repayment of lease liabilities
25
(348)
(308)
Decrease in short-term loans
25
(50)
(13)
Increase in long-term loans
25
66
–
Share buyback
(562)
(448)
Movement from changes in own shares held
(20)
(46)
Net cash used in financing activities
(1,569)
(1,285)
Net decrease in cash and cash equivalents
25
(27)
(534)
Cash and cash equivalents at the beginning of the period
1,388
1,995
Effect of movements in foreign exchange
(126)
(73)
Cash and cash equivalents at the end of the period
25
1,235
1,388
Consolidated cash flow statement
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 145 | Annual Report 2024
Attributable to equity shareholders
Note
Issued
capital
Other
reserves
Translation
reserve
Hedging
reserve
Retained
earnings
Total
Non-
controlling
interests
Total
equity
£m
£m
£m
£m
£m
£m
£m
£m
Balance as at 17 September 2022
45
178
422
154 10,649 11,448
106 11,554
Total comprehensive income
Profit for the period recognised in the income statement
–
–
–
– 1,044 1,044
24 1,068
Remeasurements of defined benefit schemes
–
–
–
–
(7)
(7)
–
(7)
Deferred tax associated with defined benefit schemes
13
–
–
–
–
4
4
–
4
Items that will not be reclassified to profit or loss
–
–
–
–
(3)
(3)
–
(3)
Effect of movements in foreign exchange
–
–
(448)
–
–
(448)
(22)
(470)
Net gain on hedge of net investment in foreign subsidiaries
–
–
1
–
–
1
–
1
Deferred tax associated with movements in foreign
exchange
–
–
(5)
–
–
(5)
–
(5)
Current tax associated with movements in foreign exchange
–
–
6
–
–
6
–
6
Movement in cash flow hedging position
–
–
–
(260)
–
(260)
–
(260)
Deferred tax associated with movement in cash flow
hedging position
–
–
–
40
–
40
–
40
Share of other comprehensive income of joint ventures
and associates
–
–
(18)
–
–
(18)
–
(18)
Effect of hyperinflationary economies
–
–
–
–
40
40
–
40
Items that are or may be subsequently reclassified to profit
or loss
–
–
(464) (220)
40 (644)
(22) (666)
Other comprehensive income
–
–
(464) (220)
37 (647)
(22) (669)
Total comprehensive income
–
–
(464) (220) 1,081
397
2
399
Inventory cash flow hedge movements
Amounts transferred to cost of inventory
–
–
–
68
–
68
–
68
Total inventory cash flow hedge movements
–
–
–
68
–
68
–
68
Transactions with owners
Dividends paid to equity shareholders
6
–
–
–
–
(345)
(345)
–
(345)
Net movement in own shares held
–
–
–
–
(28)
(28)
–
(28)
Share buyback
(1)
1
–
–
(448)
(448)
–
(448)
Deferred tax associated with share-based payments
–
–
–
–
1
1
–
1
Dividends paid to non-controlling interests
–
–
–
–
–
–
(8)
(8)
Total transactions with owners
(1)
1
–
– (820) (820)
(8) (828)
Balance as at 16 September 2023
44
179
(42)
2 10,910 11,093
100 11,193
FINANCIAL STATEMENTS CONTINUED
Consolidated statement of changes in equity
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 146 | Annual Report 2024
Attributable to equity shareholders
Note
Issued
capital
Other
reserves
Translation
reserve
Hedging
reserve
Retained
earnings
Total
Non-
controlling
interests
Total
equity
£m
£m
£m
£m
£m
£m
£m
£m
Balance as at 16 September 2023
44
179
(42)
2 10,910 11,093
100 11,193
Total comprehensive income
Profit for period recognised in income statement
–
–
–
– 1,455 1,455
25 1,480
Remeasurements of defined benefit schemes
13
–
–
–
–
38
38
–
38
Deferred tax associated with defined benefit schemes
–
–
–
–
(10)
(10)
–
(10)
Items that will not be reclassified to profit or loss
–
–
–
–
28
28
–
28
Effect of movements in foreign exchange
–
–
(329)
–
– (329)
(20) (349)
Net loss on other investments held at fair value through OCI
–
(5)
–
–
–
(5)
–
(5)
Current tax associated with movements in foreign exchange
–
–
(2)
–
–
(2)
–
(2)
Movement in cash flow hedging position
–
–
–
(51)
–
(51)
–
(51)
Deferred tax associated with movement in cash flow
hedging position
–
–
–
13
–
13
–
13
Deferred tax associated with movement in other
investments
–
1
–
–
–
1
–
1
Share of other comprehensive income of joint ventures
and associates
–
–
(10)
–
–
(10)
–
(10)
Effect of hyperinflationary economies
–
–
–
–
59
59
–
59
Items that are or may be subsequently reclassified to profit
or loss
–
(4)
(341)
(38)
59 (324)
(20) (344)
Other comprehensive income
–
(4)
(341)
(38)
87 (296)
(20) (316)
Total comprehensive income
–
(4)
(341)
(38) 1,542 1,159
5 1,164
Inventory cash flow hedge movements
Amounts transferred to cost of inventory
–
–
–
(9)
–
(9)
–
(9)
Total inventory cash flow hedge movements
–
–
–
(9)
–
(9)
–
(9)
Transactions with owners
Dividends paid to equity shareholders
6
–
–
–
– (502) (502)
– (502)
Net movement in own shares held
–
–
–
–
11
11
–
11
Share buyback
(2)
2
–
– (568) (568)
– (568)
Current tax associated with share-based payments
–
–
–
–
2
2
–
2
Dividends paid to non-controlling interests
–
–
–
–
–
–
(13)
(13)
Total transactions with owners
(2)
2
–
– (1,057) (1,057)
(13) (1,070)
Balance as at 14 September 2024
42
177
(383)
(45) 11,395 11,186
92 11,278
Consolidated statement of changes in equity continued
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 147 | Annual Report 2024
Associated British Foods plc is domiciled in the United Kingdom.
The Company’s consolidated financial statements for the 52 weeks
ended 14 September 2024 comprise those of the Company, its
subsidiaries and its interest in joint ventures and associates.
The directors authorised the consolidated financial statements
for issue on 5 November 2024. The directors prepared and
approved the consolidated financial statements in accordance
with UK-adopted IAS (‘Adopted IFRS’).
The Company has elected to prepare the parent company
financial statements under FRS 101. These are presented
on pages 211 to 217.
Basis of preparation
The Company presents its consolidated financial statements
in sterling, rounded to the nearest million, prepared on the
historical cost basis except that current biological assets and
certain financial instruments are stated at fair value, and assets
classified as held for sale are stated at the lower of carrying
amount and fair value less costs to sell.
The preparation of financial statements under Adopted IFRS
requires management to make judgements, estimates and
assumptions about the reported amounts of assets and liabilities,
income and expenses and the disclosure of contingent assets and
liabilities. The estimates and associated assumptions are based
on experience. Actual results may differ from these estimates.
Judgements made by management in the application of Adopted
IFRS that have a significant effect on the financial statements,
and estimates with a significant risk of material adjustment next
year, are discussed in Accounting estimates and judgements
detailed on page 154.
The estimates and underlying assumptions are reviewed
regularly. Revisions to accounting estimates are recognised
prospectively from when the estimates are revised.
The accounting policies set out below apply to all periods
presented, except where stated otherwise.
Details of accounting standards which came into force in the
year are set out at the end of this note.
The Group’s consolidated financial statements are prepared to
the Saturday nearest to 15 September. Accordingly, they have
been prepared for the 52 weeks ended 14 September 2024
(2023 – 52 weeks ended 16 September 2023).
To avoid delay in the preparation of the consolidated financial
statements, the results of certain subsidiaries, joint ventures
and associates are included to 31 August each year.
Adjustments have been made where appropriate for significant
transactions or events occurring between 31 August and
14 September.
The Group’s business activities, together with factors likely
to affect its future development, performance and position are
set out in the Strategic Report on pages 1 to 87. The financial
position of the Group, its cash flows, liquidity position and
borrowing facilities are described in the Financial review
on pages 44 to 47.
In addition, the principal risks and uncertainties on pages 78
to 86 and note 26 on pages 183 to 194 provide details of the
Group’s policy on managing its financial and commodity risks.
Going concern
After making enquiries, the Board has a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the
consolidated financial statements.
The forecast for the going concern assessment period to
28 February 2026 has been updated for the business’s latest
trading in October and is the best estimate of cash flow in the
period.
The Board’s treasury policies are in place to maintain a strong
capital base and manage the Group’s balance sheet and liquidity
to ensure long-term financial stability. These policies are the
basis for investor, creditor and market confidence and enable the
successful development of the business. The financial leverage
policy requires that, in the ordinary course of business, the Board
prefers to see the Group’s ratio of total net debt including lease
liabilities to adjusted EBITDA to be well under 1.5x. At the end of
this financial year, the financial leverage ratio was 0.7x. At the
end of the financial year, the Group had total cash, cash
equivalents and current asset investments of £1.7bn and an
undrawn committed Revolving Credit Facility of £1.5bn. The
Revolving Credit Facility is free of performance covenants and
matures in 2029, after a further one year extension was made in
April 2024. The $100m of outstanding private placement notes
were repaid on 2 April 2024, after which point Group funding is
not subject to financial performance covenants.
In reviewing the cash flow forecast for the period, the directors
reviewed the trading for both Primark and the food businesses in
light of the experience gained from events of the last three years
of trading and emerging trading patterns. The directors have a
thorough understanding of the risks, sensitivities and
judgements included in these elements of the cash flow forecast
and have a high degree of confidence in these cash flows.
As a downside scenario, the directors considered the adverse
scenario in which inflationary costs are not fully recovered, high
levels of volatility in key commodities prices without price
adjustments, adverse movement to the cash conversion cycle
within the Group and server IT outages leading to extended
periods of non-operation. This downside scenario was modelled
without taking any mitigating actions within their control. Under
this downside scenario the Group forecasts liquidity throughout
the period.
In addition, the directors also considered the circumstances
which would be needed to exhaust the Group’s total liquidity
over the assessment period – a reverse stress test. This
indicates that, on top of the downside scenario outlined above,
annual profit before tax would need to decline by 17% without
any price increases or other mitigating actions being taken
before total liquidity is exhausted. The likelihood of these
circumstances is considered remote for two reasons. Firstly,
over such a period, management could take substantial
mitigating actions, such as reviewing pricing, taking cost-cutting
measures and reducing capital investment. Secondly, the Group
has significant business and asset diversification and would be
able to, if it were necessary, dispose of assets and/or businesses
to raise considerable levels of funds.
FINANCIAL STATEMENTS CONTINUED
Material accounting policies
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 148 | Annual Report 2024
Climate change
In preparing the consolidated financial statements, management
has considered the impact of climate change, particularly in the
context of the TCFD disclosures set out on pages 66 to 77 and
the Group’s sustainability targets. These considerations did not
have a material impact on the financial reporting judgements and
estimates, consistent with the assessment that climate change
is not expected to have a significant impact on the Group’s going
concern assessment to 28 February 2026 nor the viability of the
Group over the next three years.
Management has considered the impact of climate change
on a number of key estimates within the financial statements,
including the estimates of future cash flows used in impairment
assessments of the carrying value of goodwill and other
non-current assets. The assessment with respect to the impact
of climate change will be kept under review by management,
as the future impacts depend on factors outside of the Group’s
control, which are not all currently known.
Basis of consolidation
These consolidated financial statements include the results
of the Company and its subsidiaries from the date that control
commences to the date that control ceases.
They also include the Group’s share of the after-tax results, other
comprehensive income and net assets of its joint ventures and
associates on an equity-accounted basis from the point at which
joint control or significant influence respectively commences,
to the date that it ceases.
Subsidiaries are entities controlled by the Company. Control
exists when the Company has the power, directly or indirectly,
to direct the activities of an entity so as to affect significantly
the returns of that entity.
Changes in the Group’s ownership interest in a subsidiary that
do not result in a loss of control are accounted for within equity.
All the Group’s joint arrangements are joint ventures, which
are entities over whose activities the Group has joint control,
typically established by contractual agreement and requiring
the venturers’ unanimous consent for strategic, financial and
operating decisions.
Associates are those entities in which the Group has significant
influence, being the power to participate in the financial and
operating policy decisions of the entity, but which does not
amount to control or joint control.
Where the Group’s share of losses exceeds its interest in a joint
venture or associate, the carrying amount is reduced to zero and
recognition of further losses is discontinued except to the extent
that the Group has incurred legal or constructive obligations
or made payments on behalf of an investee.
Control, joint control and significant influence are generally
assessed by reference to equity shareholdings and voting rights.
Business acquisitions
On acquisition of a business, the Group attributes fair values
to the identifiable assets, liabilities and contingent liabilities
acquired, reflecting conditions at the date of acquisition. These
include aligning accounting policies with those of the Group.
The Group finalises provisional fair values within 12 months
of the date of acquisition and, where significant, reflects them
by restatement of the comparative period in which the
acquisition occurred.
The Group measures non-controlling interests at the
proportionate share of the net identifiable assets acquired.
The Group remeasures existing equity interests in the acquiree
to fair value at the date of acquisition, with any resulting gain
or loss taken to the income statement.
Goodwill arising on acquisition of a business is the excess of the
remeasured carrying amount of any existing equity interest plus
the fair value of consideration payable for the additional stake over
the fair value of the share of net identifiable assets and liabilities
acquired (including separately identified intangible assets), net
of non-controlling interests. Total consideration does not include
transaction costs, which the Group expenses as incurred.
The Group measures contingent consideration at fair value at
the date of acquisition, classified as a liability or equity (usually
as a liability).
Other than for the finalisation of provisional fair values, the Group
accounts for changes in contingent consideration classified as
a liability in the income statement.
Revenue
Revenue represents the value of sales made to customers after
deduction of discounts, sales taxes and a provision for returns.
Discounts include sales rebates, price discounts, customer
incentives, some promotional activities and similar items.
Revenue does not include sales between group companies.
The Group recognises revenue when performance obligations
are satisfied, goods are delivered to customers and control
of goods is transferred to the buyer.
In the food businesses, the Group generally recognises revenue
from the sale of goods on dispatch or delivery to customers,
dependent on shipping terms, and provides for discounts and
returns as a reduction to revenue when sales are recorded,
based on management’s best estimate of the amount required
to meet claims by customers, taking into account contractual
and legal obligations, historical trends and past experience.
In the Retail business, the Group generally recognises revenue
from the sale of goods when a customer purchases goods and
provides for returns as a reduction to revenue when sales are
recorded, based on management’s best estimate of the amount
required to meet claims by customers, taking into account
historical trends and past experience.
Borrowing costs
The Group accounts for borrowing costs using the effective interest
method. The Group capitalises borrowing costs directly attributable
to the acquisition, construction or production of qualifying items
of property, plant and equipment as part of their cost.
Foreign currencies
Individual group companies record transactions in foreign
currencies at the exchange rate at the date of the transaction,
and translate monetary assets and liabilities in foreign currencies
at the exchange rate at the balance sheet date, with any resulting
differences taken to the income statement, unless designated in
a hedging relationship, in which case hedge accounting applies.
Associated British Foods plc | 149 | Annual Report 2024
On consolidation, the Group translates the assets and liabilities
of operations denominated in foreign currencies into sterling
at the exchange rate at the balance sheet date and the income
statements of those operations into sterling at average
exchange rates.
The Group records differences arising from the retranslation
of opening net assets of group companies, together with
differences arising from the restatement of the net results
of group companies from average exchange rates to those
at the balance sheet date, in the translation reserve in equity.
Pensions and other post-employment benefits
The Group’s pension and other post-employment benefit
arrangements comprise defined benefit plans, defined
contribution plans and other unfunded post-employment plans.
For defined benefit plans, the income statement charge
comprises the cost of benefits earned by members and benefit
improvements granted to members during the year, as well as
net interest income/expense calculated by applying the liability
discount rate to the opening net pension asset or liability.
The Group records the difference between the market value
of scheme assets and the present value of scheme liabilities
on a scheme-by-scheme basis as net pension assets
(to the extent recoverable) or liabilities.
The Group recognises remeasurements and movements
in irrecoverable surpluses in other comprehensive income.
The Group charges contributions payable in respect of defined
contribution plans to operating profit as incurred.
The Group accounts for other unfunded post-employment plans
in the same way as defined benefit plans.
Share-based payments
The Group recognises the fair value of share awards at grant
date as an employee expense with a corresponding increase in
equity, spread over the period during which employees become
unconditionally entitled to the shares.
The Group adjusts the amount recognised to reflect expected
and actual levels of vesting except where the failure to vest
is as a result of not meeting a market condition.
Income tax
Income tax on profit or loss comprises current and deferred tax.
The Group recognises income tax in the income statement except
to the extent that it relates to items taken directly to equity.
Current tax is the tax expected to be payable on taxable income,
using tax rates enacted or substantively enacted, together with
any adjustment to tax payable in respect of prior periods.
The Group provides for deferred tax using the balance sheet
liability method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for tax purposes.
The Group does not provide for the following temporary
differences: initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor
taxable profit or loss and does not give rise to equal taxable and
deductible temporary differences; and differences relating to
investments in subsidiaries to the extent that they will probably
not reverse in the foreseeable future.
The Group bases the amount of deferred tax provided on the
expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
The Group recognises deferred tax assets only to the extent that
it is probable that future taxable profits will be available against
which the asset can be utilised.
The Group offsets deferred tax assets and liabilities if, and only
if, it has a legally enforceable right to set off current tax assets
and liabilities and the deferred tax assets and liabilities relate
to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities which intend
either to settle current tax liabilities and assets on a net basis,
or to realise the assets and settle the liabilities simultaneously,
in each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
As required by IAS 12, the Group has applied the exception to
recognising and disclosing information about deferred tax assets
and liabilities related to Pillar Two income taxes.
The Group recognises income tax arising from dividend
distributions at the same time as the liability to pay the
related dividend.
Financial assets and liabilities
The Group recognises financial assets and liabilities when it
becomes a party to the contractual provision of the relevant
financial instrument.
Trade and other receivables
The Group records trade and other receivables initially at fair
value and subsequently at amortised cost. This generally results
in recognition at nominal value less an expected credit loss
provision, which is recognised based on management’s
expectation of losses without regard to whether or not a specific
impairment trigger has occurred.
Other non-current receivables
Other non-current receivables comprise minority shareholdings
in private companies.
The Group records minority shareholdings in private companies
initially at fair value, including directly attributable transaction
costs, and subsequently at fair value through other
comprehensive income.
On disposal of a minority shareholding, the cumulative gain
or loss previously recognised in other comprehensive income
is included directly in retained earnings, without recycling
it to the income statement.
Bank and other borrowings
The Group records bank and other borrowings initially at fair
value, which equals the proceeds received, net of direct issue
costs, and subsequently at amortised cost. The Group accounts
for finance charges, including premiums payable on settlement
or redemption and direct issue costs, using the effective interest
rate method.
Trade payables
The Group records trade payables initially at fair value
and subsequently at amortised cost. This generally results
in recognition at nominal value.
FINANCIAL STATEMENTS CONTINUED
Material accounting policies
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 150 | Annual Report 2024
Cash, cash equivalents and current asset
investments
Cash and cash equivalents comprise bank and cash balances,
deposits and short-term investments with original maturities
of three months or less.
Current asset investments comprise bank deposits and
short-term investments with maturities of between three
and six months.
For the purposes of the cash flow statement, the Group includes
bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management as a component
of cash and cash equivalents.
Derivative financial instruments and hedging
The Group primarily uses derivatives to manage economic
exposure to financial and commodity risks. The principal
instruments used are foreign exchange, interest rate and
commodity contracts, futures, swaps and options. The Group
does not use derivatives for speculative purposes.
The Group recognises derivatives at fair value based on market
prices or rates, or calculated using discounted cash flow
or option pricing models.
The Group recognises changes in the fair value of derivatives
in the income statement unless the derivative is designated
in a hedging relationship, when recognition of the change in fair
value depends on the nature of the item being hedged.
The purpose of hedge accounting is to mitigate the impact on
the Group of changes in foreign exchange or interest rates and
commodity prices.
At the inception of each hedging relationship, the Group
documents the hedging instrument, the hedged item, the risk
management objectives and strategy for undertaking the hedge,
and assesses hedge effectiveness.
During the life of each hedging relationship, the Group performs
testing to demonstrate that the hedge remains effective.
For derivatives hedging future cash flows, the Group recognises
the change in fair value through other comprehensive income in
either the cost of hedging reserve (for the element of the change
in fair value relating to the currency spread) or in the hedging
reserve (for the remaining change in fair value). Any ineffective
portion is recognised immediately in the income statement.
When the future cash flow results in the recognition of a non-
financial asset or liability, then at the time that asset or liability is
recognised, the Group includes the associated gains and losses
previously recognised in the hedging reserve in the initial
measurement of that asset or liability.
When the future cash flow does not result in the recognition
of a non-financial asset or liability, the Group includes the
associated gains and losses previously recognised in the hedging
reserve in the income statement in the same period in which
the hedged item affects profit or loss.
Hedges of the Group’s net investment in foreign operations
principally comprise borrowings in the currency of the
investment’s net assets.
For derivative or non-derivative financial instruments used as
hedges of the Group’s net investment in foreign operations,
the Group recognises the change in fair value through other
comprehensive income in the net investment hedging reserve.
Any ineffective portion is recognised immediately in the
income statement.
The Group discontinues hedge accounting when a hedging
instrument expires or is sold, terminated, exercised, or no longer
qualifies for hedge accounting. At that time, the Group retains
the cumulative associated gain or loss recognised in the hedging
reserve until the forecast transaction occurs. Gains or losses
on hedging instruments relating to an underlying exposure that
no longer exists are taken to the income statement.
The Group economically hedges foreign currency exposure on
recognised monetary assets and liabilities but does not normally
seek hedge accounting. The Group records any derivatives held
to hedge this exposure at fair value through profit and loss.
Intangible assets other than goodwill
Non-operating intangible assets are generally intangible assets
that arise on business combinations and typically include
technology, brands, customer relationships and grower
agreements. The Group acquires operating intangible assets
in the ordinary course of business, typically including computer
software, land use rights and emissions trading licences.
The Group records intangible assets other than goodwill at cost
less accumulated amortisation and impairment charges.
Amortisation is charged to the income statement on a straight-
line basis over the estimated useful lives of intangible assets
from the date they are available for use. Estimated useful lives
are generally deemed to be no longer than:
• Technology and brands – up to 15 years
• Customer relationships – up to 10 years
• Grower agreements – up to 10 years
• Operating intangibles – up to 10 years
Goodwill
Goodwill is defined under ‘Business acquisitions’ on page 149.
Certain commercial assets associated with the acquisition of
a business are not capable of being recognised in the acquisition
balance sheet. In such circumstances, goodwill is recognised,
which may include, but is not necessarily limited to, workforce
assets and the benefits of expected future synergies.
Goodwill is subject to an annual impairment review.
Research and development
The Group expenses research and development expenditure
as incurred, unless development expenditure relates to products
or processes which are technically and commercially feasible,
in which case it is capitalised. The Group records capitalised
development expenditure at cost less accumulated amortisation
and impairment charges.
Impairment
The Group reviews the carrying amount of intangible assets
and property, plant and equipment at each balance sheet date
to determine whether there is any indication of impairment.
If any such indication exists, the Group estimates the asset’s
recoverable amount. For goodwill and intangibles without a finite
life, the Group does this at least annually.
The Group recognises an impairment charge in the income
statement whenever the carrying amount of an asset or its CGU
exceeds its recoverable amount.
Associated British Foods plc | 151 | Annual Report 2024
The Group allocates impairment charges recognised in respect
of CGUs first to reduce the carrying amount of any goodwill
relating to that CGU and then to reduce the carrying amount
of the other assets in the CGU on a pro rata basis.
Calculation of recoverable amount
The recoverable amount of assets is the greater of fair value
less costs to sell and value in use. In assessing value in use,
the Group discounts estimated future cash flows to present
value using a pre-tax discount rate reflective of current market
assessments of the time value of money and the risks
specific to the asset.
For an asset that does not generate largely independent cash
inflows, the Group determines recoverable amount for the
CGU to which the asset belongs.
Reversals of impairment
The Group does not subsequently reverse impairments
of goodwill. For other assets, the Group may reverse an
impairment charge if there has been a change in the estimates
used to determine the recoverable amount, but only to
the extent that the new carrying amount does not exceed
the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment charge
had previously been recognised.
Property, plant and equipment
The Group records property, plant and equipment at cost less
accumulated depreciation and impairment charges.
The Group charges depreciation to the income statement on
a straight-line basis over the estimated useful economic life of
each item sufficient to reduce it to its estimated residual value.
Land is not depreciated. Estimated useful economic lives are
generally deemed to be no longer than:
Freehold buildings
up to 66 years
Plant and equipment, fixtures and fittings
• sugar factories, yeast plants,
mills and bakeries
up to 20 years
• other operations
up to 12 years
Vehicles
up to 10 years
Sugar cane roots
up to 10 years
Investment properties
The Group records investment properties at cost less
accumulated depreciation and impairment charges.
The Group charges depreciation to the income statement
on a straight-line basis over the estimated useful economic life
of each property sufficient to reduce it to its estimated residual
value. Land is not depreciated. Estimated useful economic lives
are generally deemed to be no longer than:
Freehold buildings
up to 66 years
Leasehold buildings
term of lease
The book value of investment properties was not previously
material and was included in property, plant and equipment and
right-of-use assets. This book value is now more significant and
the Group has decided to disclose investment properties
separately on the face of the balance sheet.
For ease of comparison, the comparative balance sheet has
been re-presented. There is no change to any balance sheet
sub-total, net assets, profit, earnings or cash flows and therefore
no opening balance sheet has been disclosed. The reclassification
for the 2023 opening position was £120m and for the 2023
balance sheet was £107m.
Leases
A lease is an agreement whereby the lessor conveys to the
lessee, in return for a payment or a series of payments, the right
to use a specific asset for an agreed period.
Where the Group is a lessee, the following accounting
policy is applied.
Right-of-use assets
The Group records right-of-use assets at cost at the
commencement date of the lease, which is the date the underlying
asset is available for use, less any accumulated depreciation and
impairment losses, and adjusted for subsequent remeasurement
of lease liabilities.
Cost includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before
the commencement date, less any lease incentives received.
The Group charges depreciation to the income statement on
a straight-line basis over the shorter of the estimated useful life
and the lease term.
Lease liabilities
The Group records lease liabilities at the commencement date
of the lease at the present value of lease payments to be made
over the lease term, discounted using the incremental borrowing
rate at the commencement date of the lease if the interest rate
implicit in the lease is not readily determinable.
Lease payments include fixed payments, including in-substance
fixed payments, and variable lease payments that depend on
an index or a rate, less any lease incentives receivable.
Variable lease payments that do not depend on an index or a rate
are recognised as an expense in the period in which the event
or condition that triggers the payment occurs.
The Group subsequently measures lease liabilities at amortised
cost using the effective interest rate method. The Group records
the accretion and settlement of interest through accruals and
reduces the carrying amount of lease liabilities for the capital
element of lease payments made.
The carrying amount of lease liabilities is remeasured when there
is a change in future lease payments due to a change in the
lease term, a change in the in-substance fixed lease payments
or a change in the assessment of whether to purchase the
underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption
to leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option.
It also applies the low-value asset recognition exemption to
groups of underlying leases considered uniformly low-value.
The Group expenses lease payments on short-term leases and
leases of low-value assets in the income statement as incurred.
FINANCIAL STATEMENTS CONTINUED
Material accounting policies
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 152 | Annual Report 2024
Lessor accounting
The Group classifies subleases based on the right-of-use
asset of the head lease. A portion of the right-of-use asset is
derecognised based on the ratio of sublease income to head
lease payments. Finance lease receivables are recorded at the
net investment, with any difference recognised in the income
statement. Finance income is recognised over the lease term,
while operating lease income is recognised on a straight-line basis.
Current biological assets
The Group records current biological assets at fair value less
costs to sell.
The basis of valuation for growing cane is estimated sucrose
content valued at estimated sucrose price for the following
season, less estimated costs for harvesting and transport.
When harvested, the Group transfers growing cane to inventory
at fair value less costs to sell.
Inventories
The Group records food inventories at the lower of cost and net
realisable value. Cost includes raw materials, direct labour and
expenses and an appropriate proportion of production and other
overheads, calculated on a first-in first-out basis.
The Group records retail inventories at the lower of cost and net
realisable value using the retail method, calculated on the basis
of selling price less appropriate trading margin. All retail
inventories are finished goods.
On acquisition of a business, the Group records inventories at
fair value. Subsequently, the Group charges the book value of
the inventories to adjusted operating profit as they are sold or
used. Any significant fair value uplift is charged below adjusted
operating profit as the inventories are sold or used.
Grants
The Group recognises grants only when there is reasonable
assurance that the Group will comply with the conditions
attached and that the grants will be received. Grants receivable
as compensation for expenses already incurred are recognised
in profit or loss in the period in which they become receivable.
Hyperinflation
The Argentinian economy was designated hyperinflationary from
1 July 2018. The Turkish economy was designated
hyperinflationary from 1 July 2022.
The Group has applied IAS 29 Financial Reporting in
Hyperinflationary Economies to its Argentinian operations from
the beginning of the 2019 financial year and to its Turkish
operations from the beginning of the 2022 financial year. IAS 29
requires that hyperinflationary adjustments are reflected from
the start of the reporting period in which it is applied.
The adjustments required by IAS 29 are set out below:
• adjustment of historical cost non-monetary assets and
liabilities from their date of initial recognition to the balance
sheet date to reflect the changes in purchasing power of the
currency caused by inflation, according to the official indices
for Argentina published by the Federación Argentina de Consejos
Profesionales de Ciencias Económicas (‘FACPCE’) and for
Turkey published by Turkish Statistical Institute (‘TUIK’);
• adjustment of the components of the income statement and
cash flow statement for the inflation index since their
generation, with a balancing entry in the income statement
and a reconciling item in the cash flow statement,
respectively;
• adjustment of the income statement to reflect the impact
of inflation on holding monetary assets and liabilities
in local currency;
• the financial statements of the Group’s Argentinian and
Turkish operations have been translated into sterling at the
closing exchange rate at 14 September 2024 (ARS 1261.46:
£1; TRL 44.63:£1); and
• the cumulative impact corresponding to previous years has
been reflected in other comprehensive income in the year.
In Argentina, the FACPCE index was 2044.2832 at 31 August
2023 and 6883.4412 at 31 August 2024. The inflation index for
the year is therefore 3.367.
In Turkey, the TUIK index was 58.94 at 31 August 2023 and
51.97 at 31 August 2024. The inflation index for the year is
therefore 0.882.
The Venezuelan economy has been designated hyperinflationary
for a number of years, but the impact on the Group’s results
remains immaterial.
New accounting standards
The Group adopted the following accounting standards and
amendments during the year with no significant impact:
• International Tax Reform – Pillar Two Model Rules
(Amendments to IAS 12)
• Deferred Tax related to Assets and Liabilities arising from
a Single Transaction (Amendments to IAS 12)
• Definition of Accounting Estimates (Amendments to IAS 8)
• Disclosure of Accounting policies (Amendments to IAS 1 and
IFRS Practice Statement 2)
• IFRS 17 Insurance Contracts, Amendments to IFRS 17, Initial
Adoption of IFRS 17 and IFRS 9 – Comparative Information
The Group is assessing the impact of the following standards,
interpretations and amendments that are not yet effective.
Where already endorsed by the UKEB, these changes will be
adopted on the effective dates noted. Where not yet endorsed
by the UKEB, the adoption date is less certain:
• Lease Liability in a Sale and Leaseback (Amendments to IFRS
16), effective 2025 financial year
• Amendments to IAS 1 Presentation of Financial Statements,
effective 2025 financial year
• Classification of Liabilities as Current or Non-Current
(Amendments to IAS 1), effective 2025 financial year
• Supplier Finance Arrangements (Amendments to IAS 7
and IFRS 7), effective 2025 financial year
• Lack of Exchangeability (Amendments to IAS 21), effective
2026 financial year
• IFRS 18 Presentation and Disclosures in Financial Statements,
effective 2028 financial year (not yet endorsed by UKEB)
• Amendments to the Classification and Measurement of
Financial Instruments effective 2027 financial year (not yet
endorsed by UKEB).
Associated British Foods plc | 153 | Annual Report 2024
Significant accounting estimates
The preparation of the Group’s consolidated financial statements
includes the use of estimates and assumptions. Although the
estimates used are based on management’s best information
about current circumstances and future events and actions,
actual results may differ from those estimates.
The accounting estimates with a significant risk of a material
change to the carrying value of assets and liabilities within
the next year are set out below.
Forecasts and discount rates
The carrying values of a number of items on the balance sheet
are dependent on estimates of future cash flows arising from
the Group’s operations which, in some circumstances, are
discounted to arrive at a net present value.
Assessment for impairment involves comparing the book value
of an asset with its recoverable amount (the higher of value in
use and fair value less costs to sell). Value in use is determined
with reference to projected future cash flows discounted at
an appropriate rate. Both the cash flows and the discount rate
involve a significant degree of estimation uncertainty.
The recovery of deferred tax assets is dependent on the
generation of sufficient future taxable profits. The Group
recognises deferred tax assets to the extent that it is
considered probable that sufficient taxable profits will be
available in the future. This involves a significant degree
of estimation uncertainty.
When considering sources of future taxable profit, the Group
firstly considers existing deferred tax liabilities. However, the
majority of deferred tax assets are recognised based on future
profit forecasts, including the deferred tax assets in the Group’s
most material jurisdictions of the United Kingdom, the United
States, Australia, Germany and Spain.
When relying on profit forecasts, the assessment of whether
to recognise deferred tax assets is based on the following year’s
budget and expectations of the future performance of individual
businesses (or groups of businesses in the case of national
tax groups). Where possible, this is consistent with forecasts
used for impairment assessments. Forecasts for impairment
assessments are discounted, but this is not permitted for
recognition of deferred tax assets.
Deferred tax assets are reduced when it is no longer considered
probable that the related tax benefit will be realised.
The widespread nature of the Group’s activities across multiple
jurisdictions means that it is not practical to provide detailed
sensitivities in respect of individual deferred tax assets.
Further details of deferred tax assets are included in note 14.
Post-retirement benefits
The Group’s defined benefit pension schemes and similar
arrangements are assessed annually in accordance with IAS 19
Employee Benefits. The accounting valuations, assessed using
assumptions determined with independent actuarial advice,
resulted in a significant net surplus as at 14 September 2024,
principally relating to the UK defined benefit scheme, which
is separately disclosed.
The net surplus is highly sensitive to the market value of scheme
assets, to discount rates used in assessing liabilities, to actuarial
assumptions (including price inflation, rates of pension and salary
increases, mortality and other demographic assumptions) and
to the level of contributions.
Further details are included in note 13, including associated
sensitivities.
Other areas of judgement and accounting
estimates
The consolidated financial statements include other areas of
judgement and accounting estimates. While these areas do not
meet the definition of significant accounting estimates or critical
accounting judgements, the recognition and measurement of
certain material assets and liabilities are based on assumptions
and/or are subject to longer term uncertainties. The other areas
of judgement and accounting estimates are set out below.
Biological assets
In valuing growing cane, estimating sucrose content requires
management to assess expected cane and sucrose yields for the
following season considering weather conditions and harvesting
programmes. Estimating sucrose price requires management to
assess into which markets the forthcoming crop will be sold and
to assess domestic and export prices as well as related foreign
currency exchange rates. The carrying value of growing cane
and associated sensitivities is disclosed in note 17.
Income tax
The Group is exposed to a range of uncertain tax positions.
It provides for open tax matters, where it believes it is probable
that payments will be required, including those for routine tax
audits, which are by nature complex and may take a number
of years to resolve. Uncertainty is driven by the resolution of the
issue and estimation process in arriving at the amount. The Group
has recognised potential current corporate tax liabilities for a
number of uncertain tax positions, none of which are individually
material. The provision for these uncertain tax positions is £82m
(2023 – £55m). The increase reflects a change in judgement on
a number of exposures as well as an additional year of risk where
applicable. The majority of the provisions relate to transfer pricing
risks across a number of jurisdictions in which the Group has
operations. Transfer pricing is a complex area with resolution
of matters taking many years. Given the underlying nature
of these risks, the timing of when they will resolve is uncertain.
The Group has applied IFRIC 23 Uncertainty over Income
Tax Treatments to measure uncertain tax positions. The Group
calculates each provision using management’s best estimate of
the liability based on interpretation of tax law in each jurisdiction
and ongoing monitoring of tax cases and rulings. The Group
believes it has adequate provision for these matters. Final
conclusion of each matter may result in an outcome different
to any amounts provided, but the Group has concluded that
this is unlikely to have a material impact.
FINANCIAL STATEMENTS CONTINUED
Accounting estimates and judgements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 154 | Annual Report 2024
1. Operating segments
The Group has five operating segments, as described below.
These are the Group’s operating divisions, based on the
management and internal reporting structure, which combine
businesses with common characteristics, primarily in respect of the
type of products offered by each business, but also the production
processes involved and the manner of the distribution and sale
of goods. The Board is the chief operating decision-maker.
Inter-segment pricing is determined on an arm’s length basis.
Segment result is adjusted operating profit, as shown on the face
of the consolidated income statement. Segment assets comprise
all non-current assets except employee benefits assets, income
tax assets, deferred tax assets and all current assets except cash
and cash equivalents, current asset investments and income tax
assets. Segment liabilities comprise trade and other payables,
derivative liabilities, provisions and lease liabilities.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly
corporate assets and expenses, cash, borrowings, employee
benefits balances and current and deferred tax balances.
Segment non-current asset additions are the total cost incurred
during the period to acquire segment assets that are expected to
be used for more than one year, comprising property, plant and
equipment, right-of-use assets, operating intangibles and
biological assets.
Businesses disposed are shown separately and comparatives
are re-presented for businesses sold or closed during the year.
The Group comprises the following operating segments:
Retail
Buying and merchandising value clothing and accessories
through the Primark and Penneys retail chains.
Grocery
The manufacture of grocery products, including hot beverages,
sugar, vegetable oils, balsamic vinegars, bread and baked goods,
cereals, ethnic foods and meat products, which are sold to retail,
wholesale and foodservice businesses.
Ingredients
The manufacture of yeast and bakery ingredients as well as
speciality ingredients focused on enzymes, procession extracts,
health and nutrition and pharmaceutical delivery systems.
Sugar
The growing and processing of sugar beet and sugar cane for
production of a range of sugar and other products in Africa, the
UK and Spain.
Agriculture
The manufacture of speciality feed ingredients, premix and
compound animal feed, as well as the provision of other
products and services for the agriculture sector.
Geographical information
In addition to the required disclosure for operating segments, disclosure is also given of certain geographical information about
the Group’s operations, based on the geographical groupings: United Kingdom; Europe & Africa; The Americas; and Asia Pacific.
Revenues are shown by reference to the geographical location of customers. Profits are shown by reference to the geographical
location of the businesses. Segment assets are based on the geographical location of the assets.
Revenue
Adjusted operating profit
2024
2023
2024
2023
£m
£m
£m
£m
Operating segments
Retail
9,448
9,008
1,108
735
Grocery
4,242
4,198
511
448
Ingredients
2,134
2,157
233
214
Sugar
2,529
2,474
199
179
Agriculture
1,650
1,840
41
41
Central
–
–
(100)
(94)
20,003
19,677
1,992
1,523
Business disposed
Sugar
70
73
6
(10)
20,073
19,750
1,998
1,513
Geographical information
United Kingdom
7,297
7,271
708
488
Europe & Africa
7,830
7,552
754
559
The Americas
2,513
2,420
406
353
Asia Pacific
2,363
2,434
124
123
20,003
19,677
1,992
1,523
Business disposed
Asia Pacific
70
73
6
(10)
20,073
19,750
1,998
1,513
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 155 | Annual Report 2024
1. Operating segments continued
2024
Retail
Grocery Ingredients
Sugar
Agriculture
Central
Total
£m
£m
£m
£m
£m
£m
£m
Revenue from continuing businesses
9,448
4,262
2,342
2,652
1,659
(360) 20,003
Internal revenue
–
(20)
(208)
(123)
(9)
360
–
External revenue from continuing businesses
9,448
4,242
2,134
2,529
1,650
– 20,003
Business disposed
–
–
–
70
–
–
70
Revenue from external customers
9,448
4,242
2,134
2,599
1,650
– 20,073
Operating profit
1,100
493
219
181
31
(92)
1,932
Adjusted operating profit before joint ventures and
associates
1,108
438
201
192
33
(100)
1,872
Share of adjusted profit after tax from joint ventures and
associates
–
73
32
7
8
–
120
Business disposed
–
–
–
6
–
–
6
Adjusted operating profit
1,108
511
233
205
41
(100)
1,998
Finance income
71
71
Finance expense
(96)
(1)
(1)
(3)
(1)
(33)
(135)
Other financial income
23
23
Adjusted profit before taxation
1,012
510
232
202
40
(39)
1,957
Profits less losses on disposal of non-current assets
3
5
–
–
–
8
16
Amortisation of non-operating intangibles
–
(20)
(11)
–
(9)
–
(40)
Acquired inventory fair value adjustments
–
(1)
(1)
–
–
–
(2)
Transaction costs
–
(2)
(2)
–
(1)
–
(5)
Exceptional items
(11)
–
–
(24)
–
–
(35)
Profits less losses on sale and closure of businesses
–
–
11
15
–
–
26
Profit before taxation
1,004
492
229
193
30
(31)
1,917
Taxation
(437)
(437)
Profit for the period
1,004
492
229
193
30
(468)
1,480
Segment assets (excluding joint ventures and
associates)
7,282
2,798
2,104
2,252
620
89 15,145
Investments in joint ventures and associates
–
57
116
53
155
–
381
Segment assets
7,282
2,855
2,220
2,305
775
89 15,526
Cash and cash equivalents
1,323
1,323
Current asset investments
334
334
Income tax
102
102
Deferred tax assets
223
223
Employee benefits assets
1,506
1,506
Segment liabilities
(4,347)
(685)
(415)
(437)
(178)
(172)
(6,234)
Loans and overdrafts
(613)
(613)
Income tax
(133)
(133)
Deferred tax liabilities
(682)
(682)
Employee benefits liabilities
(74)
(74)
Net assets
2,935
2,170
1,805
1,868
597
1,903 11,278
Non-current asset additions
702
212
180
329
43
2
1,468
Depreciation and non-cash lease adjustments
(574)
(100)
(70)
(77)
(21)
(7)
(849)
Amortisation
(39)
(31)
(15)
(4)
(11)
–
(100)
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 156 | Annual Report 2024
2023
Retail
Grocery
Ingredients
Sugar
Agriculture
Central
Total
£m
£m
£m
£m
£m
£m
£m
Revenue from continuing businesses
9,008
4,222
2,366
2,591
1,849
(359) 19,677
Internal revenue
–
(24)
(209)
(117)
(9)
359
–
External revenue from external customers
9,008
4,198
2,157
2,474
1,840
– 19,677
Business disposed
–
–
–
73
–
–
73
Revenue from external customers
9,008
4,198
2,157
2,547
1,840
– 19,750
Operating profit
717
402
201
119
32
(88)
1,383
Adjusted operating profit before joint ventures and
associates
735
368
190
172
25
(94)
1,396
Share of adjusted profit after tax from joint ventures and
associates
–
80
24
7
16
–
127
Business disposed
–
–
–
(10)
–
–
(10)
Adjusted operating profit
735
448
214
169
41
(94)
1,513
Finance income
–
–
–
–
–
48
48
Finance expense
(86)
(1)
(1)
(3)
–
(37)
(128)
Other financial income
–
–
–
–
–
40
40
Adjusted profit before taxation
649
447
213
166
41
(43)
1,473
Profits less losses on disposal of non-current assets
–
19
–
–
–
9
28
Amortisation of non-operating intangibles
–
(23)
(13)
–
(5)
–
(41)
Acquired inventory fair value adjustments
–
(1)
–
–
(2)
–
(3)
Transaction costs
–
–
–
–
(2)
(3)
(5)
Exceptional items
(18)
(41)
–
(50)
–
–
(109)
Profits less losses on sale and closure of businesses
–
–
3
(6)
–
–
(3)
Profit before taxation
631
401
203
110
32
(37)
1,340
Taxation
–
–
–
–
–
(272)
(272)
Profit for the period
631
401
203
110
32
(309)
1,068
Segment assets (excluding joint ventures and associates)
7,530
2,759
2,011
2,179
640
110
15,229
Investments in joint ventures and associates
–
58
133
48
155
–
394
Segment assets
7,530
2,817
2,144
2,227
795
110 15,623
Cash and cash equivalents
1,457
1,457
Income tax
125
125
Deferred tax assets
193
193
Employee benefits assets
1,446
1,446
Segment liabilities
(4,326)
(689)
(407)
(501)
(196)
(166)
(6,285)
Loans and overdrafts
(562)
(562)
Income tax
(109)
(109)
Deferred tax liabilities
(626)
(626)
Employee benefits liabilities
(69)
(69)
Net assets
3,204
2,128
1,737
1,726
599
1,799 11,193
Non-current asset additions
711
154
174
289
20
4
1,352
Depreciation and non-cash lease adjustments
(526)
(114)
(62)
(75)
(19)
(8)
(804)
Amortisation
(31)
(26)
(15)
(3)
(7)
–
(82)
Associated British Foods plc | 157 | Annual Report 2024
1. Operating segments continued
2024
United Kingdom
Europe & Africa
The Americas
Asia Pacific
Total
£m
£m
£m
£m
£m
Revenue from external customers
7,297
7,830
2,513
2,433
20,073
Segment assets
5,537
6,599
1,810
1,580
15,526
Non-current asset additions
367
726
209
166
1,468
Depreciation (including of right-of-use assets)
(289)
(411)
(97)
(52)
(849)
Amortisation
(21)
(65)
(8)
(6)
(100)
Acquired inventory fair value adjustments
–
(2)
–
–
(2)
Transaction costs
(2)
(1)
–
(2)
(5)
Exceptional items
(19)
(16)
–
–
(35)
2023
United Kingdom
Europe & Africa
The Americas
Asia Pacific
Total
£m
£m
£m
£m
£m
Revenue from external customers
7,271
7,552
2,420
2,507
19,750
Segment assets
5,690
6,651
1,792
1,490
15,623
Non-current asset additions
305
732
217
98
1,352
Depreciation (including of right-of-use assets)
(279)
(374)
(84)
(67)
(804)
Amortisation
(17)
(56)
(4)
(5)
(82)
Acquired inventory fair value adjustments
(2)
(1)
–
–
(3)
Transaction costs
(4)
(1)
–
–
(5)
Exceptional items
–
(53)
–
(56)
(109)
The Group’s operations in the following countries met the criteria for separate disclosure:
Revenue
Non-current assets
2024
2023
2024
2023
£m
£m
£m
£m
Australia
1,409
1,407
656
541
Spain
1,972
1,836
713
651
United States
1,690
1,580
950
887
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 158 | Annual Report 2024
2. Operating costs
2024
2023
Note
£m
£m
Operating Costs
Cost of sales (including amortisation of intangibles)
15,191
15,587
Distribution costs
1,682
1,603
Administration expenses
1,366
1,220
Exceptional items
35
109
18,274
18,519
Operating costs are stated after charging/(crediting):
Employee benefits expense
3
3,408
3,158
Amortisation of non-operating intangibles
8
37
38
Amortisation of operating intangibles
8
63
44
Acquired inventory fair value adjustments
2
3
Depreciation of property, plant and equipment and investment properties
9,10
555
531
Depreciation of right-of-use assets and non-cash lease adjustments
11
294
273
Transactions costs
5
5
Effect of hyperinflationary economies
21
14
Other operating income
(43)
(35)
Research and development expenditure
49
42
Fair value gains on financial assets and liabilities held for trading
(13)
(19)
Fair value losses on financial assets and liabilities held for trading
19
22
Foreign exchange gains on operating activities
(43)
(48)
Foreign exchange losses on operating activities
47
62
Amortisation of non-operating intangibles of £40m (2023 – £41m) shown as adjusting items in the income statement, include
£3m (2023 – £3m) incurred by joint ventures, in addition to the amounts shown above.
Exceptional items
2024
The income statement this year included a non-cash exceptional impairment charge of £35m.
In the Sugar segment, Vivergo recognised a £17m impairment write-down against property, plant and equipment and £1m against
right-of-use assets driven by the volatility of ethanol prices impacting trading margins. Due to the severe flooding in Mozambique last
year, the related damage to the sugar crop fields and the inability to plant for the foreseeable future, our sugar business in Mozambique
recognised a further £3m impairment write-down against property, plant and equipment and £3m against working capital.
In the Retail segment, the Group recognised £11m of exceptional impairment charges still relating to the German stores impaired
in 2022, after additional right-of-use assets were recognised due to rent indexation adjustments in the current financial year.
2023
The prior year exceptional impairment charge of £109m comprised non-cash write-downs of assets predominantly against property,
plant and equipment and right-of-use assets specifically £41m for the Don businesses in the Grocery segment, £50m for the Sugar
segment including £15m for China North Sugar and £35m for Maragra, our sugar business in Mozambique, and £18m for the Retail
segment relating to the German Primark store portfolio.
2024
2023
Auditor's Remuneration
£m
£m
Fees payable to the Company's auditor and its associates in respect of the audit
Group audit of these financial statements
1.7
1.7
Audit of the Company's subsidiaries' financial statements
8.8
8.5
Total audit remuneration
10.5
10.2
Fees payable to the Company's auditor and its associates in respect of non-audit services
Audit-related assurance services
0.4
0.4
All other services
0.7
0.6
Total non-audit remuneration
1.1
1.0
Associated British Foods plc | 159 | Annual Report 2024
3. Employees
2024
2023
Average number of employees
United Kingdom
44,110
42,071
Europe & Africa
74,766
73,411
The Americas
7,663
6,769
Asia Pacific
11,732
11,236
138,271
133,487
2024
2023
Note
£m
£m
Employee benefits expense
Wages and salaries
2,852
2,657
Social security contributions
391
355
Contributions to defined contribution schemes
13
103
95
Charge for defined benefit schemes
13
31
33
Equity-settled share-based payment schemes
24
31
18
3,408
3,158
Details of directors’ remuneration, share incentives and pension entitlements are shown in the Remuneration Report on pages 111 to 127.
4. Interest and other financial income and expense
2024
2023
Note
£m
£m
Finance income
Cash, cash equivalents and current asset investments
71
48
71
48
Finance expense
Bank loans and overdrafts
(19)
(23)
All other borrowings
(12)
(11)
Lease liabilities
11
(102)
(91)
Other payables
(2)
(3)
25
(135)
(128)
Other financial income
Interest income on employee benefit scheme assets
13
206
185
Interest charge on employee benefit scheme liabilities
13
(131)
(123)
Interest charge on irrecoverable surplus
13
(2)
(2)
Net financial income from employee benefit schemes
73
60
Net foreign exchange losses on financing activities
(50)
(20)
Total other financial income
23
40
Finance expense on bank loans and overdrafts is net of interest capitalised of £5m (2023 – £nil).
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 160 | Annual Report 2024
5. Income tax expense
2024
2023
£m
£m
Current tax expense
UK – corporation tax at 25% (2023 – 21.8%)
51
26
Overseas – corporation tax
337
249
UK – under/(over) provided in prior years
4
(14)
Overseas – under provided in prior years
10
18
402
279
Deferred tax expense
UK – deferred tax
61
54
Overseas – deferred tax
(16)
28
UK – over provided in prior years
(13)
(26)
Overseas – under/(over) provided in prior years
3
(63)
35
(7)
Total income tax expense in the income statement
437
272
Reconciliation of effective tax rate
Profit before taxation
1,917
1,340
Less share of profit after taxation from joint ventures and associates
(117)
(124)
Profit before taxation excluding share of profit after taxation from joint ventures and associates
1,800
1,216
Nominal tax charge at UK corporation tax rate of 25% (2023 – 21.8%)
450
265
Effect of higher and lower tax rates on overseas earnings
(92)
(16)
Effect of changes in tax rates on the income statement
7
5
Expenses not deductible for tax purposes
101
66
Disposal of assets covered by tax exemptions or unrecognised capital losses
(9)
(2)
Deferred tax not recognised
(24)
39
Adjustments in respect of prior years
4
(85)
437
272
Other comprehensive income or equity
Deferred tax associated with defined benefit schemes
10
(4)
Deferred tax associated with share-based payments
–
(1)
Current tax associated with share-based payments
(2)
–
Deferred tax associated with movements in cash flow hedging position
(13)
(40)
Deferred tax associated with movements in foreign exchange
–
5
Current tax associated with movements in foreign exchange
2
(6)
Deferred tax in reserves on other investment reserves
(1)
–
(4)
(46)
The UK corporation tax rate of 19% increased to 25% from 1 April 2023.
The EU state aid case relating to the Group Financing Exemption in the UK’s controlled foreign company legislation concluded on
19 September 2024 with no further appeals being permitted. The Court of Justice of the European Union ('CJEU') found in favour
of the UK Government and the UK companies appealing the case. Therefore, there is no longer a potential liability (2023 – £26m) for
the Group relating to the case. In prior years the Group considered a provision was not required and therefore there is no impact on
the tax charge in the year. Payments were made to HM Revenue & Customs (‘HMRC’) in 2021 following the receipt of charging
notices. These payments, totalling £22.9m, will now be refunded to the Group by HMRC.
In the prior year an exceptional prior year tax credit of £58m was recognised in relation to deferred tax asset recognition in Germany.
Associated British Foods plc | 161 | Annual Report 2024
5. Income tax expense continued
Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates, including the UK.
The legislation will be effective for the Group’s 2025 financial year. The Group has performed an assessment of the Group’s potential
exposure to Pillar Two income taxes. This assessment is based on data available from the Group’s 2023 consolidated financial
statements and the 2023 financial year Country-by Country Report. Based on the assessment, the Pillar Two effective tax rates
in most of the jurisdictions in which the Group operates are above 15%. However, there are a limited number of jurisdictions where
the transitional safe harbour relief does not apply. Of these jurisdictions, the most noteworthy is Ireland, where the statutory tax rate
is 12.5% and where there will be a local top up tax to 15%. Based on a high-level assessment, the impact in 2023 of Pillar 2 on the
ABF adjusted effective tax rate would have been less than 1%. The Pillar 2 legislation is complex and still evolving. We will continue
to monitor the impact of future developments.
We recognise the importance of complying fully with all applicable tax laws as well as paying and collecting the right amount of tax
in every country in which the Group operates. Our tax strategy, approved by the Board, is based on seven tax principles that are
embedded in the financial and non financial processes and controls of the Group. This tax strategy is available in the Policies section
of the Group’s website.
Deferred taxation balances are analysed in note 14.
6. Dividends
2024
2023
2024
2023
pence per
share
pence per
share
£m
£m
2022 final
–
29.9
–
235
2023 interim
–
14.2
–
110
2023 final and special
45.8
–
348
–
2024 interim
20.7
–
154
–
66.5
44.1
502
345
The 2024 interim dividend was declared on 23 April 2024 and paid on 5 July 2024. Given the outlook for the Group, the strength
of the balance sheet and the underlying cash generation of the business, we have declared the payment of a special dividend,
to be paid as a second interim dividend at 27.0p per share at an estimated cost of £199m.
The Board has proposed a final dividend of 42.3p per share at an estimated cost of £312m. The combined 2024 final and
special dividend of 69.3p, with an estimated value of £511m, will be paid on 10 January 2025 to shareholders on the register
on 13 December 2024.
Dividends relating to the period including the special dividend were 90.0p per share totalling £666m (2023 – 60.0p per share
totalling £459m).
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 162 | Annual Report 2024
7. Earnings per share
The calculation of basic earnings per share at 14 September 2024 was based on the net profit attributable to equity shareholders of
£1,455m (2023 – £1,044m), and a weighted average number of shares outstanding during the year of 751 million (2023 – 778 million).
The calculation of the weighted average number of shares excludes the shares held by the Employee Share Ownership Plan Trust
on which the dividends are being waived. The weighted average number of shares has reduced as a result of our first and second
share buyback programmes. In the year, we repurchased 23.6 million shares which were cancelled.
Adjusted earnings per ordinary share, which exclude the impact of profits less losses on disposal of non-current assets and the sale
and closure of businesses, amortisation of acquired inventory fair value adjustments, transaction costs, amortisation of non-operating
intangibles, exceptional items and any associated tax credits, is shown to provide clarity on the underlying performance of the Group.
Amortisation of non-operating intangibles of £40m (2023 – £41m) shown as adjusting items in the income statement, include £3m
(2023 – £3m) incurred by joint ventures.
The diluted earnings per share calculation takes into account the dilutive effect of share incentives. The diluted, weighted average
number of shares is 751 million (2023 – 778 million). There is no material difference between basic and diluted earnings.
2024
2023
£m
£m
Adjusted profit for the period
1,479
1,103
Disposal of non-current assets
16
28
Sale and closure of businesses
26
(3)
Acquired inventory fair value adjustments
(2)
(3)
Transaction costs
(5)
(5)
Exceptional items
(35)
(109)
Tax effect on above adjustments and exceptional tax
6
64
Amortisation of non-operating intangibles
(40)
(41)
Tax credit on non-operating intangibles amortisation
10
10
Profit for the period attributable to equity shareholders
1,455
1,044
2024
2023
pence per
share
pence per
share
Adjusted earnings per share
196.9
141.8
Disposal of non-current assets
2.1
3.6
Sale and closure of businesses
3.5
(0.4)
Acquired inventory fair value adjustments
(0.3)
(0.4)
Transaction costs
(0.6)
(0.6)
Exceptional items
(4.6)
(14.0)
Tax effect on above adjustments and exceptional tax
0.8
8.2
Amortisation of non-operating intangibles
(5.4)
(5.3)
Tax credit on non-operating intangibles amortisation
1.3
1.3
Earnings per ordinary share
193.7
134.2
Associated British Foods plc | 163 | Annual Report 2024
8. Intangible assets
Non-operating
Operating
Goodwill
Technology
Brands
Customer
relationships
Grower
agreements
Other
Other
Total
£m
£m
£m
£m
£m
£m
£m
£m
Cost
At 17 September 2022
1,414
285
488
290
110
5
697 3,289
Acquisitions – externally purchased
–
–
4
–
–
–
143
147
Acquired through business combinations
39
2
9
21
–
–
3
74
Other disposals
–
–
–
(15)
–
(5)
(69)
(89)
Transfer to assets classified as held for sale
–
–
–
–
–
–
15
15
Effect of hyperinflationary economies
2
–
–
–
–
–
–
2
Effect of movements in foreign exchange
(79)
(15)
(15)
(11)
(16)
–
(25)
(161)
At 16 September 2023
1,376
272
486
285
94
–
764 3,277
Acquisitions – externally purchased
–
–
–
–
–
–
126
126
Acquired through business combinations
77
2
28
5
–
–
2
114
Businesses disposed
–
–
–
–
–
–
(14)
(14)
Other disposals
–
–
–
–
–
–
(63)
(63)
Effect of hyperinflationary economies
8
–
–
–
–
–
–
8
Effect of movements in foreign exchange
(42)
(10)
(12)
(8)
1
–
(15)
(86)
At 14 September 2024
1,419
264
502
282
95
–
800 3,362
Amortisation and impairment
At 17 September 2022
122
221
415
226
110
5
322 1,421
Amortisation for the year
–
9
15
14
–
–
44
82
Other disposals
–
–
–
(15)
–
(5)
–
(20)
Transfer to assets classified as held for sale
–
–
–
–
–
–
4
4
Impairment
–
–
–
–
–
–
1
1
Effect of movements in foreign exchange
(12)
(13)
(11)
(8)
(16)
–
(21)
(81)
At 16 September 2023
110
217
419
217
94
–
350 1,407
Amortisation for the year
–
9
13
15
–
–
63
100
Businesses disposed
–
–
–
–
–
–
(3)
(3)
Other disposals
–
–
–
–
–
–
(1)
(1)
Effect of movements in foreign exchange
(2)
(9)
(12)
(7)
1
–
(8)
(37)
At 14 September 2024
108
217
420
225
95
–
401 1,466
Net book value
At 17 September 2022
1,292
64
73
64
–
–
375 1,868
At 16 September 2023
1,266
55
67
68
–
–
414 1,870
At 14 September 2024
1,311
47
82
57
–
–
399 1,896
Amortisation of non-operating intangibles of £40m (2023 – £41m) shown as an adjusting item in the income statement includes
£3m (2023 – £3m) incurred by joint ventures in addition to the amounts shown above.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 164 | Annual Report 2024
Impairment
As at 14 September 2024, the consolidated balance sheet included goodwill of £1,311m (2023 – £1,266m). Goodwill is allocated
to the Group’s cash-generating units (CGUs), or groups of CGUs, that are expected to benefit from the synergies of the business
combination that gave rise to the goodwill, as follows:
Primary reporting
segment
Discount rate
2024
2023
CGUs or group of CGUs
£m
£m
Acetum
Grocery
12.4 %
89
91
ACH
Grocery
13.9 %
182
193
AB Mauri
Ingredients
14.8 %
292
267
Twinings Ovaltine
Grocery
13.3 %
119
119
Illovo
Sugar
23.6 %
90
89
AB World Foods
Grocery
13.3 %
78
78
Other (not individually significant)
Various
Various
461
429
1,311
1,266
A CGU, or group of CGUs, to which goodwill has been allocated must be assessed for impairment annually, or more frequently
if events or circumstances indicate that the carrying amount may not be recoverable. There has been no change in CGUs or group
of CGUs from the prior year.
The carrying value of goodwill is assessed by reference to its value in use reflecting the projected cash flows of each of the CGUs
or group of CGUs. These projections are based on the most recent budget, which has been approved by the Board and reflects
management’s expectations of sales growth, operating costs and margin, taking into consideration past experience and external
sources of information. Long-term growth rates for periods not covered by the annual budget reflect the products, industries and
countries in which the relevant CGU, or group of CGUs, operate.
Management expects to achieve growth over the next three to five years in excess of the long-term growth rates for the applicable
country or region. In these circumstances, budgeted cash flows are extended, generally to between three and five years, using
specific growth assumptions and taking into account the specific business risks.
The key assumptions in the most recent annual budget on which the cash flow projections are based relate to discount rates, growth
rates and expected changes in volumes, selling prices and direct costs.
The cash flow projections have been discounted using a pre-tax weighted average cost of capital for each business, adjusted for
country, industry and market risk. Inflation assumptions used to calculate discount rates are aligned with those used in the cash flow
projections. The rates used were between 10.4% and 23.6% (2023 – between 10.2% and 23.7%).
The long-term growth rates beyond the initial budgeted cash flows, applied in the value in use calculations for goodwill allocated
to each of the CGUs or groups of CGUs that are significant to the total carrying amount of goodwill, were in a range between
2% and 5.7%, consistent with the inflation factors included in the discount rates applied (2023 – between 0% and 6%).
Changes in volumes, selling prices and direct costs are based on past results and expectations of future changes in the market.
Sensitivity to changes in key assumptions
Impairment testing is dependent on management’s estimates and judgements, particularly as they relate to the forecasting of future
cash flows, the discount rates selected and expected long-term growth rates. Each of the Group’s CGUs had headroom under the
annual impairment review.
In light of the supply side inflationary pressures combined with the cost of living pressures faced by our UK Grocery business,
management performed a detailed impairment review of Jordans Dorset Ryvita, and concluded that no impairment was required.
Key drivers of the forecast improvement in performance include completion of a number of margin improvement initiatives,
implementation of planned strategic initiatives and the completion of ongoing new product development. Headroom was £65m
on a CGU carrying value of £133m (2023 – headroom of £59m on a CGU carrying value of £137m).
The discount rate used was 11.5% and would have to increase to more than 15.4% before value in use fell below the CGU carrying
value. The long-term growth rate applied into perpetuity was 2.5%.
Associated British Foods plc | 165 | Annual Report 2024
9. Property, plant and equipment
Land and
buildings
Plant and
machinery
Fixtures and
Fittings
Assets under
construction
Sugar cane
roots
Total
Note
£m
£m
£m
£m
£m
£m
Cost
At 17 September 2022
2,825
4,419
4,419
605
105 12,373
Opening balance adjustment – investment property
re-presentation
10
(112)
–
–
(26)
–
(138)
Acquisitions – externally purchased
20
86
431
449
16
1,002
Acquired through business combinations
–
4
–
–
–
4
Other disposals
(24)
(57)
(3)
(1)
(1)
(86)
Transfers from assets under construction
28
191
87
(306)
–
–
Transfer to assets classified as held for sale
37
75
2
–
–
114
Effect of movements in hyperinflation
–
78
19
–
–
97
Effect of movements in foreign exchange
(93)
(257)
(84)
(34)
(19)
(487)
At 16 September 2023
2,681
4,539
4,871
687
101 12,879
Acquisitions – externally purchased
44
105
350
597
18
1,114
Acquired through business combinations
21
49
1
3
–
74
Interest capitalised
–
–
–
5
–
5
Transfer to investment properties
10
(3)
–
–
–
–
(3)
Other disposals
(7)
(99)
(39)
–
(1)
(146)
Disposal of subsidiaries
(35)
(71)
(2)
–
–
(108)
Transfers from assets under construction
24
234
231
(489)
–
–
Effect of movements in hyperinflation
–
76
10
–
–
86
Effect of movements in foreign exchange
(45)
(177)
(85)
(49)
(22)
(378)
At 14 September 2024
2,680
4,656
5,337
754
96 13,523
Depreciation and impairment
At 17 September 2022
834
3,120
2,760
–
60
6,774
Opening balance adjustment – investment property
re-presentation
10
(36)
–
–
–
–
(36)
Depreciation for the year
50
183
287
–
9
529
Impairment
22
56
3
–
2
83
Other disposals
(22)
(46)
(3)
–
(1)
(72)
Transfer to assets classified as held for sale
20
75
2
–
–
97
Effect of movements in hyperinflation
–
64
17
–
–
81
Effect of movements in foreign exchange
(33)
(158)
(50)
–
(10)
(251)
At 16 September 2023
835
3,294
3,016
–
60
7,205
Depreciation for the year
46
184
315
–
8
553
Impairment
5
14
1
–
–
20
Transfer of investment properties
10
(1)
–
–
–
–
(1)
Other disposals
(4)
(77)
(39)
–
(1)
(121)
Disposal of subsidiaries
(36)
(72)
1
–
–
(107)
Effect of movements in hyperinflation
–
56
8
–
–
64
Effect of movements in foreign exchange
(15)
(109)
(50)
–
(14)
(188)
At 14 September 2024
830
3,290
3,252
–
53
7,425
Net book value
At 17 September 2022
1,991
1,299
1,659
605
45
5,599
At 16 September 2023
1,846
1,245
1,855
687
41
5,674
At 14 September 2024
1,850
1,366
2,085
754
43
6,098
2024
2023
£m
£m
Capital expenditure commitments – contracted but not provided for
430
493
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 166 | Annual Report 2024
Impairment
The methodology used to assess property, plant and equipment for impairment is the same as that described for impairment
assessments of goodwill. See note 8 for further details. In addition where the fair value less costs of disposal is higher than value in use,
this methodology has been used to determine the recoverable amount. This method uses inputs that are unobservable, using the best
information available in the circumstances for valuing the CGU, and therefore falls into the Level 3 category of fair value measurement.
In Grocery, for the Australian Don business, management performed a detailed impairment review and of the methodologies available
to assess impairment, the Group applied the ‘fair value less costs of disposal’ approach to identify its best estimate of impairment.
Management have concluded that no further impairment was required. Headroom was A$39m on a CGU carrying value of A$218m.
An impairment of A$72m (£39m) was recorded in the prior year under the value-in-use methodology.
Azucarera’s operating performance has been impacted by the sharp decline in European sugar pricing due to increased supply in the
market. Accordingly, management performed a detailed impairment review and concluded no impairment was required. Headroom
was €1.2m on a CGU carrying value of €279m. The impairment model assumed a long-term growth rate beyond the forecast period
of 2% (2023 – 2%) and a discount rate of 10.6% (2023 – 10.2%).
The CGU carrying value is sensitive to assumptions around sugar and beet prices, beet crop area and discount rate. A sensitivity
of +/- 5% on long-term beet area affects value-in-use by +/- €14m; and increasing the discount rate used by 1% causes the value-in-
use to reduce by €39m. Applying sensitivities to these assumptions, a change of +/- 5% on long-term sugar prices affects carrying
value by +/- €52m, and an increase in the long-term beet price of +/- 5% per tonne changes value-in-use by +/- €29m.
In the year there was a £17m (2023 – £nil) impairment of property, plant and equipment assets related to the Vivergo business
(included within exceptional items).
10. Investment properties
Reconciliation of carrying amount
Total
Note
£m
Cost
At 17 September 2022
–
Opening balance adjustment – investment property representation
9,11
162
Acquisitions – externally purchased
4
Disposals
(10)
Effect of movement in foreign exchange
(8)
At 16 September 2023
148
Acquisitions – externally purchased
8
Disposals
(9)
Transfer from property, plant and equipment
9
3
Effect of movement in foreign exchange
(2)
At 14 September 2024
148
Depreciation and impairment
At 17 September 2022
–
Opening balance adjustment – investment property representation
9,11
42
Depreciation for the year
2
Disposals
–
Effect of movement in foreign exchange
(3)
At 16 September 2023
41
Depreciation for the year
2
Transfer from property, plant and equipment
9
1
Effect of movement in foreign exchange
(1)
At 14 September 2024
43
Net book value
At 17 September 2022
–
At 16 September 2023
107
At 14 September 2024
105
The directors consider that the carrying amount of investment properties approximates fair value.
Associated British Foods plc | 167 | Annual Report 2024
11. Leases
Most of the Group’s right-of-use assets are associated with our leased property portfolio in the Retail segment.
Right-of-use assets
Land and
buildings
Plant and
machinery
Fixtures and
fittings
Total
Note
£m
£m
£m
£m
Cost
At 17 September 2022
3,502
76
1
3,579
Opening balance adjustment – investment property re-presentation
10
(24)
–
–
(24)
Additions
182
17
–
199
Lease incentives
(53)
–
–
(53)
Acquired through business combinations
1
–
–
1
Other disposals
(1)
(4)
–
(5)
Other movements
80
5
–
85
Effect of movements in foreign exchange
(72)
(4)
–
(76)
At 16 September 2023
3,615
90
1
3,706
Additions
199
15
1
215
Lease incentives
(46)
–
–
(46)
Acquired through business combinations
–
8
–
8
Other disposals
–
(2)
–
(2)
Other movements
92
(1)
–
91
Effect of movements in foreign exchange
(65)
(9)
–
(74)
At 14 September 2024
3,795
101
2
3,898
Land and
buildings
Plant and
machinery
Fixtures and
fittings
Total
£m
£m
£m
£m
Depreciation and impairment
At 17 September 2022
1,073
50
–
1,123
Opening balance adjustment – investment property re-presentation
(6)
–
–
(6)
Depreciation for the year
257
16
–
273
Impairment
13
1
–
14
Other disposals
(1)
(4)
–
(5)
Effect of movements in foreign exchange
(25)
(3)
–
(28)
At 16 September 2023
1,311
60
–
1,371
Depreciation for the year
277
17
–
294
Impairment
12
–
–
12
Other disposals
–
(2)
–
(2)
Effect of movements in foreign exchange
(28)
(4)
–
(32)
At 14 September 2024
1,572
71
–
1,643
Net book value
At 17 September 2022
2,429
26
1
2,456
At 16 September 2023
2,304
30
1
2,335
At 14 September 2024
2,223
30
2
2,255
Impairment
The methodology used to assess right-of-use assets for impairment is the same as that described for impairment assessments
of goodwill. See note 8 for further details. In the year there was a £12m (2023 – £14m) impairment of right-of-use assets related
to Primark and the Vivergo business (included within exceptional items).
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 168 | Annual Report 2024
Lease liabilities
Land and
buildings
Plant and
machinery
Fixtures and
fittings
Total
£m
£m
£m
£m
Cost
At 17 September 2022
3,237
29
–
3,266
Additions
180
18
–
198
Interest expense relating to lease liabilities
89
2
–
91
Repayment of lease liabilities
(373)
(18)
–
(391)
Other movements
80
5
–
85
Other disposals
(5)
–
–
(5)
Effect of movements in foreign exchange
(60)
(3)
–
(63)
At 16 September 2023
3,148
33
–
3,181
Additions
198
14
1
213
Interest expense relating to lease liabilities
100
2
–
102
Repayment of lease liabilities
(431)
(18)
–
(449)
Acquisition of businesses
–
8
–
8
Other movements
89
(1)
–
88
Effect of movements in foreign exchange
(52)
(4)
–
(56)
At 14 September 2024
3,052
34
1
3,087
2024
2023
£m
£m
Current
289
356
Non-current
2,798
2,825
3,087
3,181
Lease liabilities comprise capital payable of £3,065m (2023 – £3,160m) and interest payable £22m (2023 – £21m). The interest
payable is all current and disclosed within trade and other payables. Repayments comprise capital of £348m (2023 – £308m) and
interest of £101m (2023 – £83m).
Other information relating to leases
The Group had the following expense relating to short-term leases and low-value leases:
2024
2023
£m
£m
Land and buildings
–
2
Plant and machinery
2
1
2
3
The Group expensed £nil (2023 – £1m) of variable lease payments that do not form part of the lease liability. Cash outflows
of £1m (2023 – £2m) that do not form part of the lease liability are expected to be made in the next 12 months.
Rental receipts of £2m (2023 – £3m) were recognised relating to operating leases. The total of future minimum rental receipts expected
to be received is £39m (2023 – £43m). £8m (2023 – £10m) is due to be received in respect of sub-leasing right-of-use assets.
Associated British Foods plc | 169 | Annual Report 2024
12. Investments in joint ventures and associates
Joint Ventures
Associates
£m
£m
At 17 September 2022
301
85
Acquisitions
9
–
Profit for the period
106
18
Dividends received
(102)
(5)
Effects of movements in foreign exchange
(11)
(7)
At 16 September 2023
303
91
Transfers
(15)
–
Profit for the period
94
23
Dividends received
(90)
(15)
Effects of movements in foreign exchange
(6)
(4)
At 14 September 2024
286
95
Details of joint ventures and associates are listed in note 29.
Included in the consolidated financial statements are the following items that represent the Group’s share of the assets, liabilities
and profit of joint ventures and associates:
Joint Ventures
Associates
2024
2023
2024
2023
£m
£m
£m
£m
Non-Current Assets
199
222
45
47
Current Assets
470
541
435
500
Current Liabilities
(342)
(414)
(385)
(454)
Non-current Liabilities
(58)
(67)
(1)
(3)
Goodwill
21
25
1
1
Non-controlling interest
(4)
(4)
–
–
Net Assets
286
303
95
91
Revenue
2,001
2,539
1,880
1,605
Profit for the period
94
106
23
18
13. Employee entitlements
The Group operates a number of defined benefit and defined contribution retirement benefit schemes in the UK and overseas.
The defined benefit schemes expose the Group to a variety of actuarial risks including demographic assumptions such as mortality
and financial assumptions such as discount rate, inflation risk and market (investment) risk. The Group is not exposed to any unusual,
entity-specific or scheme-specific risks. All schemes comply with local legislative requirements.
UK defined benefit scheme
The Group’s principal UK defined benefit scheme is the Associated British Foods Pension Scheme (the ‘Scheme’), which is a funded
final salary scheme that is closed to new members. Defined contribution arrangements are in place for other employees. The UK defined
benefit scheme represents 90% (2023 – 90%) of the Group’s defined benefit scheme assets and 85% (2023 – 85%) of defined
benefit scheme liabilities. The Scheme is governed by a trustee board which is independent of the Group and which agrees a
schedule of contributions with the Company each time a formal funding valuation is performed.
The most recent triennial funding valuation of the Scheme was carried out as at 5 April 2023, using the current unit method, and
revealed a surplus of £1,013m. The market value of the Scheme assets was £3,648m, representing 138% of members’ accrued
benefits after allowing for expected future salary increases.
The Scheme’s assets are managed using a risk-controlled investment strategy, which includes a liability-driven investment policy that
seeks to match, where appropriate, the profile of the liabilities. This includes the use of derivative instruments to hedge inflation, interest
and foreign exchange risks. The Scheme utilises both market and solvency triggers to develop the level of hedges in place. To date,
the Scheme is fully hedged for 91% of inflation sensitivity and 90% of interest rate risk. It is intended to hedge 90% of total exposure.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 170 | Annual Report 2024
The Scheme is forbidden by the trust deed from holding direct investments in the equity of the Company, although it is possible that
the Scheme may hold indirect interests through investments in some equity funds.
Overseas defined benefit schemes
The Group also operates defined benefit retirement schemes in a number of overseas businesses, which are primarily funded final
salary schemes, as well as a small number of unfunded post-retirement medical benefit schemes, which are accounted for in the
same way as defined benefit retirement schemes.
Defined contribution schemes
The Group operates a number of defined contribution schemes for which the charge was £54m in the UK and £49m overseas,
totalling £103m (2023 – UK £47m, overseas £48m, totalling £95m).
Actuarial assumptions
The principal actuarial assumptions for the Group’s defined benefit schemes at the year end were:
2024
2024
2023
2023
UK
Overseas
UK
Overseas
%
%
%
%
Discount rate
4.8
0 - 15.7
5.5
1 - 15.8
Inflation
2.5 - 3
0 - 52
2.7 - 3.4
0 - 17.4
Rate of increase in salaries
3 - 4
0 - 95.6
3.7 - 4.3
0 - 150.0
Rate of increase for pensions in payment
1.9 - 2.9
0 - 78
1.9 - 3.1
0 - 49.0
Rate of increase for pensions in deferment (where provided)
2.5
0 - 3.6
2.5 - 2.8
0 - 3.9
Discount rates are determined by reference to market yields at the balance sheet date on high-quality corporate bonds consistent
with the estimated term of the obligations. This has been done in conjunction with independent actuaries in each jurisdiction.
The UK inflation assumption includes assumptions on both the Retail Price Index and Consumer Price Index measures of inflation
on the basis that the gap between the two measures is expected to remain stable in the long term.
The mortality assumptions used to value the UK defined benefit schemes in 2024 are derived from the S3 mortality tables with
improvements in line with the 2023 projection model prepared by the Continuous Mortality Investigation of the UK actuarial
profession (2023 – S3 mortality tables with improvements in line with the 2022 projection model), with a 0-year rating movement
for males and females (2023 – 0-year rating movement for males and females), both with a long-term trend of 1.75% (2023 – 1.75%).
These mortality assumptions take account of experience to date, and assumptions for further improvements in life expectancy
of scheme members. Examples of the resulting life expectancies in the UK defined benefit schemes are as follows:
2024
2023
Life expectancy from age 65 (in years)
Male
Female
Male
Female
Member aged 65 in 2024 (2023)
21.8
24.2
21.8
24.2
Member aged 65 in 2044 (2043)
23.7
26.2
23.7
26.2
An allowance has been made for cash commutation in line with emerging scheme experience. Other demographic assumptions
for the UK defined benefit schemes are set having regard to the latest trends in scheme experience and other relevant data.
The assumptions are reviewed and updated as necessary as part of the periodic funding valuation of the schemes.
For the overseas schemes, regionally appropriate assumptions for mortality, financial and demographic factors have been used.
A sensitivity analysis on the principal assumptions used to measure UK defined benefit scheme liabilities at 14 September 2024 is:
Change in assumption
Impact on scheme liabilities
Discount rate
increase/decrease by 0.1%
increase/decrease by 1.2%
Inflation
increase/decrease by 0.1%
increase by 0.6%/decrease by 1%
Rate of real increase in salaries
increase/decrease by 0.1%
increase/decrease by 0.1%
Rate of mortality
members assumed to be one year younger/older
increase/decrease by 3.1%
A sensitivity to the rate of increase in pensions in payment and pensions in deferment is represented by the inflation sensitivity,
as all pensions increases and deferred revaluations are linked to inflation.
The sensitivity analysis above has been determined based on reasonably possible changes in the respective assumptions occurring
at the end of the period and may not be representative of the actual change. It is based on a change in the specific assumption while
holding all other assumptions constant. When calculating the sensitivities, the same method used to calculate scheme liabilities
recognised in the balance sheet has been applied. The method and assumptions used in preparing the sensitivity analysis have not
changed since the prior year.
Associated British Foods plc | 171 | Annual Report 2024
13. Employee entitlements continued
Balance sheet
2024
2023
UK
Overseas
Total
UK
Overseas
Total
£m
£m
£m
£m
£m
£m
Equities
898
160
1,058
1,020
172
1,192
Government bonds
568
154
722
455
89
544
Corporate and other bonds
872
40
912
619
55
674
Property
242
35
277
314
36
350
Cash and other assets
1,157
41
1,198
1,145
57
1,202
Scheme assets
3,737
430
4,167
3,553
409
3,962
Scheme liabilities
(2,307)
(390)
(2,697)
(2,176)
(373)
(2,549)
Aggregate net surplus
1,430
40
1,470
1,377
36
1,413
Irrecoverable surplus
–
(38)
(38)
–
(36)
(36)
Net pension asset
1,430
2
1,432
1,377
–
1,377
Analysed as
Schemes in surplus
1,454
52
1,506
1,397
49
1,446
Schemes in deficit
(24)
(50)
(74)
(20)
(49)
(69)
1,430
2
1,432
1,377
–
1,377
Unfunded liability included in the present value
of scheme liabilities above
(24)
(34)
(58)
(20)
(32)
(52)
* The surpluses in the plans are only recoverable to the extent that the Group can benefit from either refunds formally agreed or from future contribution reductions.
UK Scheme
Scheme assets include £99m (2023 – £64m) of derivative instruments, £597m (2023 – £409m) of corporate debt instruments
and £1,559m (2023 – £1,119m) of government debt.
Corporate and other bonds assets of £872m (2023 – £619m) include £49m (2023 – £235m) of assets whose valuation is not derived
from quoted market prices. The valuation for all other equity assets, government bonds, and corporate and other bonds is derived
from quoted market prices. The carrying value of UK property assets is based on a 30 June market valuation, adjusted for purchases,
disposals and price indexation between the valuation and the balance sheet date. Cash and other assets includes £828m (2023 – £888m)
of assets whose valuation is not derived from quoted market prices.
For financial reporting in the Group’s financial statements, liabilities are assessed by actuaries using the projected unit method.
The accounting value is different from the result obtained using the funding basis, mainly due to different assumptions used to project
scheme liabilities.
The defined benefit scheme liabilities comprise 20% (2023 – 18%) in respect of active participants, 22% (2023 – 21%) for deferred
participants and 58% (2023 – 61%) for pensioners.
The weighted average duration of the defined benefit scheme liabilities at the end of the year is 12 years for both UK and overseas
schemes (2023 – 12 years for both UK and overseas schemes).
The Group recognises the accounting surplus as it has the ability to use the surplus to meet employer contributions to the UK
Scheme, covering both the defined benefit and defined contribution sections. This has been agreed with the independent Trustee
Board for the new financial year. See the Cash flow section below for further details.
A UK High Court judgment in 2023 was upheld by the Court of Appeals on 25 July 2024. This confirmed that actuarial confirmations
should have been provided for amendments made to contracted-out schemes in the period between 6 April 1997 and 5 April 2016,
including for amendments that only affected future service benefits. The UK Scheme Trustee commissioned a review of historic
scheme amendment documentation to check for appropriate evidence that the required actuarial confirmations were given
in respect of relevant deeds of amendment. The review concluded that there was appropriate evidence in relation to all relevant
deeds of amendment which changed contracted-out benefits over the relevant period and that no further action is required.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 172 | Annual Report 2024
Income statement
The charge to the income statement for employee benefit schemes comprises:
2024
2023
Note
£m
£m
Charged to operating profit:
Defined benefit schemes
• Current service cost
3
(31)
(31)
• Past service cost
3
–
(2)
Defined contribution schemes
3
(103)
(95)
Total operating cost
(134)
(128)
Reported in other financial income:
Net interest income on the net pension asset
75
62
Interest charge on irrecoverable surplus
4
(2)
(2)
Net financial income from employee benefit schemes
73
60
Net impact on profit before tax
(61)
(68)
Cash flow
Group cash flow in respect of employee benefits schemes comprises contributions paid to funded schemes of £9m (2023 – £36m)
and benefits paid in respect of unfunded schemes of £2m (2023 – £5m). Contributions to funded defined benefit schemes are subject
to periodic review. Contributions to defined contribution schemes amounted to £65m (2023 – £95m).
Total contributions to funded schemes and benefit payments by the Group in respect of unfunded schemes in 2024 are currently
expected to be approximately £1m in the UK and £9m overseas, totalling £10m (2023 – UK £3m, overseas £10m, totalling £13m).
As part of the triennial funding valuation of the UK Scheme as at 5 April 2023, which was finalised with the independent trustee
board in September 2023, the Company agreed an abatement of all UK employer contributions to the UK Scheme, covering both the
defined benefit and defined contribution sections from the start of the 2024 financial year, since when the employer contributions
have been met from the surplus in the UK Scheme. This is subject to a solvency check, assessed annually by the Scheme Actuary.
Other comprehensive income
Remeasurements of the net pension asset recognised in other comprehensive income are as follows:
2024
2023
Other comprehensive income
£m
£m
Loss/(return) on scheme assets excluding amounts included in net interest in the income statement
182
(238)
Actuarial (losses)/gains arising from changes in financial assumptions
(140)
264
Actuarial gains arising from changes in demographic assumptions
6
18
Experience losses on scheme liabilities
(10)
(57)
Change in unrecognised surplus
–
6
Remeasurements of the net pension asset/(liability)
38
(7)
Associated British Foods plc | 173 | Annual Report 2024
13. Employee entitlements continued
Reconciliation of change in assets and liabilities
2024
2023
2024
2023
2024
2023
assets
assets
liabilities
liabilities
net
net
£m
£m
£m
£m
£m
£m
At the beginning of the year
3,962
4,151
(2,549)
(2,795)
1,413
1,356
Current service cost
–
–
(31)
(31)
(31)
(31)
Employee contributions
6
7
(6)
(7)
–
–
Employer contributions
9
36
–
–
9
36
Abatement of employer contributions to defined
contribution schemes
(38)
–
–
–
(38)
–
Benefit payments
(157)
(161)
159
166
2
5
Past service cost
–
–
–
(2)
–
(2)
Interest income/(expense)
206
185
(131)
(123)
75
62
Loss/(return) on scheme assets less interest
income
182
(238)
–
–
182
(238)
Actuarial (losses)/gains arising from changes in
financial assumptions
–
–
(140)
264
(140)
264
Actuarial gains arising from changes in
demographic assumptions
–
–
6
18
6
18
Experience losses on scheme liabilities
–
–
(10)
(57)
(10)
(57)
Effect of movements in foreign exchange
(3)
(18)
5
18
2
–
At end of year
4,167
3,962
(2,697)
(2,549)
1,470
1,413
Reconciliation of change in irrecoverable surplus
2024
2023
Note
£m
£m
At the beginning of the year
(36)
(42)
Change recognised in other comprehensive income
–
6
Interest charge on irrecoverable surplus
4
(2)
(2)
Effect of movements in foreign exchange
–
2
At end of year
(38)
(36)
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 174 | Annual Report 2024
14. Deferred tax assets and liabilities
Property,
plant and
equipment
Intangible
assets
Employee
benefits
Financial
assets and
liabilities
Provisions
and other
temporary
assets
Leases
Tax value
of carry-
forward
losses
Total
£m
£m
£m
£m
£m
£m
£m
£m
At 17 September 2022
187
117
324
40
(75)
(78)
(26)
489
Amount charged/(credited) to the Income
Statement
73
(3)
12
–
(11)
(30)
(53)
(12)
Amount (credited)/charged to equity
–
–
(5)
(40)
5
–
–
(40)
Acquired through business combinations
–
7
1
–
(1)
–
(1)
6
Effect of changes in tax rates on the income
statement
3
–
2
–
–
–
–
5
Effect of hyperinflationary economies taken
to operating profit
4
–
–
–
–
–
–
4
Transfer from assets/liabilites held for sale
(5)
–
–
–
–
–
–
(5)
Effect of movements in foreign exchange
(19)
(3)
–
–
3
3
2
(14)
At 16 September 2023
243
118
334
–
(79)
(105)
(78)
433
Amount charged/(credited) to the Income
Statement
46
(10)
2
–
(21)
(4)
15
28
Amount charged/(credited) to equity
–
–
9
(13)
(1)
–
–
(5)
Acquired through business combinations
7
6
–
–
(7)
–
–
6
Effect of changes in tax rates on the income
statement
6
–
–
–
2
(1)
–
7
Effect of changes in tax rate on equity
–
–
1
–
–
–
–
1
Effect of hyperinflationary economies taken
to operating profit
6
–
–
–
–
–
–
6
Effect of movements in foreign exchange
(14)
(5)
–
–
(3)
3
2
(17)
At 14 September 2024
294
109
346
(13)
(109)
(107)
(61)
459
Provisions and other temporary differences include provisions of £(118)m (2023 – £(103)m), biological assets of £35m (2023 – £33m),
tax credits of £(10)m (2023 – £(9)m) and other temporary differences of £(16)m (2023 – £nil).
Certain deferred tax assets and liabilities have been offset in the table above. The following is the analysis of the deferred tax balances
(after offset) for financial reporting purposes:
2024
2023
£m
£m
Deferred tax assets
(223)
(193)
Deferred tax liabilities
682
626
459
433
Deferred tax assets have not been recognised in respect of tax losses of £328m (2023 – £358m). Of these tax losses, £187m
(2023 – £186m) will expire at various dates between 2024 and 2029 (2023: 2023 and 2028). Tax losses not recognised also include
capital losses in Ireland and Australia of £16m and £86m respectively (2023 – £16m and £98m). Deferred tax assets have also not
been recognised in respect of other temporary differences of £237m (2023 – £353m). This includes £88m (2023 – £160m) relating
to property, plant and equipment and leases in Germany which were derecognised following the impairment in 2022. These deferred
tax assets have not been recognised on the basis that their future economic benefit is uncertain.
In addition, the Group’s overseas subsidiaries have net unremitted earnings of £2,476m (2023 – £2,527m), resulting in temporary
differences of £1,514m (2023 – £1,426m). No deferred tax has been provided in respect of these differences since the timing
of the reversals can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Associated British Foods plc | 175 | Annual Report 2024
15. Trade and other receivables
2024
2023
Note
£m
£m
Non-current – other receivables
Loans and receivables
26
–
31
Other non-current investments
26
30
32
30
63
Current – trade and other receivables
Trade receivables
26
1,271
1,319
Other receivables
213
223
Accrued income
21
26
26
1,505
1,568
Prepayments and other non-financial receivables
192
210
1,697
1,778
The directors consider that the carrying amount of receivables approximates fair value. For details of credit risk exposure on trade
and other receivables, see note 26.
Prior year trade and other receivables included £32m in respect of finance lease receivables, which related to property, plant and
equipment leased to a joint venture of the Group (see note 28).
16. Inventories
2024
2023
£m
£m
Raw materials and consumables
474
599
Work in progress
103
78
Finished goods and goods held for resale
2,365
2,530
2,942
3,207
Write-down of inventories
(141)
(123)
17. Biological assets
Growing cane
Other
Total
£m
£m
£m
At 17 September 2022
97
8
105
Transferred to inventory
(121)
(14)
(135)
Purchases
3
6
9
Impairment
(7)
–
(7)
Changes in fair value
135
11
146
Effect of movements in foreign exchange
(19)
–
(19)
At 16 September 2023
88
11
99
Transferred to inventory
(93)
(11)
(104)
Purchases
–
7
7
Other disposals
–
(8)
(8)
Changes in fair value
113
11
124
Effect of movements in foreign exchange
(24)
–
(24)
At 14 September 2024
84
10
94
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 176 | Annual Report 2024
Impairment
The methodology used to assess current biological assets for impairment is the same as that described for impairment assessments
of goodwill. See note 8 for further details.
In the prior year there was a £7m impairment charge booked on current biological assets in Mozambique due to the severe flooding
and damage to the sugar crop fields and that was included within exceptional items. This year there was no impairment booked on
these assets.
Growing cane
The fair value of growing cane is determined using inputs that are unobservable, using the best information available in the circumstances
for valuing the growing cane and therefore falls into the Level 3 category of fair value measurement. The following assumptions were
used in the determination of the estimated sucrose tonnage at 14 September 2024:
South Africa
Malawi
Zambia
Eswatini
Tanzania
Expected areas to harvest (hectares)
6,393
18,194
14,966
10,486
9,339
Estimated yield (tonnes cane/hectare)
64.6
89.0
114.9
96.1
81.9
Average maturity of growing cane
45.8 %
66.8 %
65.7 %
67.7 %
46.2 %
The following assumptions were used in the determination of the estimated sucrose tonnage at 16 September 2023:
South Africa
Malawi
Zambia
Eswatini
Tanzania
Expected areas to harvest (hectares)
5,729
18,819
15,700
10,580
9,578
Estimated yield (tonnes cane/hectare)
67.9
100.1
114.0
92.0
80.2
Average maturity of growing cane
46.4 %
67.4 %
65.7 %
67.7 %
46.2 %
A 1% change in the unobservable inputs could increase or decrease the fair value of growing cane as follows:
2024
2023
+1%
(1) %
+1%
(1) %
£m
£m
£m
£m
Estimated sucrose content
1.3
(1.3)
1.6
(1.6)
Estimated sucrose price
1.6
(1.6)
1.9
(1.9)
18. Cash, cash equivalents and current asset investments
2024
2023
Note
£m
£m
Current asset investments
334
–
Cash and cash equivalents
Cash at bank and in hand
551
481
Cash equivalents
772
976
Cash and cash equivalents in the balance sheet
25, 26
1,323
1,457
Reconciliation to the cash flow statement
Bank overdrafts
19, 25
(88)
(69)
Cash and cash equivalents in the cash flow statement
1,235
1,388
Cash, cash equivalents and current asset investments in the balance sheet
1,657
1,457
Cash at bank and in hand generally earns interest at rates based on the applicable daily bank deposit rate.
Cash equivalents generally comprise bank deposits placed for periods of up to three months and money market funds which earn
interest at a short-term deposit rate.
Current asset investments comprise bank deposits for periods between three and six months which earn interest at a short-term
deposit rate.
The carrying amount of cash, cash equivalents and current asset investments approximates fair value.
Associated British Foods plc | 177 | Annual Report 2024
19. Loans and overdrafts
2024
2023
Note
£m
£m
Current loans and overdrafts
Secured loans
3
–
Unsecured loans and overdrafts
25
156
168
159
168
Non-current loans
Secured loans
60
–
Unsecured loans
25
394
394
454
394
26
613
562
2024
2023
Note
£m
£m
Secured loans
• Other floating rates
63
–
Unsecured loans and overdrafts
• Bank overdrafts
18
88
69
• GBP floating rate
44
–
• GBP fixed rate
391
392
• USD floating rate
9
8
• USD fixed rate
–
81
• EUR floating rate
4
1
• Other floating rate
9
9
• Other fixed rate
5
2
26
613
562
Secured loans comprise amounts borrowed from commercial banks and are secured by charges over the assets of subsidiaries.
Bank overdrafts generally bear interest at floating rates.
20. Trade and other payables
2024
2023
£m
£m
Current – trade and other payables
Trade payables
1,159
1,177
Accruals
1,276
1,271
2,435
2,448
Deferred income and other non-financial payables
499
505
2,934
2,953
For payables with a remaining life of less than one year, carrying amount is deemed to reflect fair value.
In a small number of businesses, the Group utilises supplier financing arrangements to enable participating suppliers, at each
supplier’s sole discretion, to sell any or all amounts due from the Group to a third party bank earlier than the invoice due date, at better
financing rates than the supplier alone could achieve. Payment terms for suppliers are identical, irrespective of whether they choose
to participate. Contractual terms and invoice due dates are unchanged and the Group considers amounts owed to the third party bank
as akin to amounts owed to the supplier. Such amounts are therefore included within trade payables and associated cash flows are
included within operating cash flows, as they continue to be part of the Group’s normal operating cycle.
At year end, the value of invoices sold by suppliers under supply chain financing arrangements was £55m (2023 – £75m).
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 178 | Annual Report 2024
21. Provisions
Restructuring
Onerous
contracts
Deferred
consideration
Other
Total
£m
£m
£m
£m
£m
At 16 September 2023
18
–
6
79
103
Created
22
13
9
50
94
Utilised
(9)
–
(4)
(14)
(27)
Released
(8)
–
–
(21)
(29)
Effect of movements in foreign exchange
–
–
–
(3)
(3)
At 14 September 2024
23
13
11
91
138
Current
22
12
6
38
78
Non-current
1
1
5
53
60
23
13
11
91
138
Financial liabilities within provisions comprised deferred consideration in both years (see note 26).
Restructuring
Restructuring provisions include business restructure costs, including redundancy, associated with the Group’s announced
reorganisation plans. These restructuring provisions are largely expected to be utilised in the next financial year.
Onerous contracts
Onerous contract provisions relate to potential losses to be incurred on fixed-price agreements in the Sugar segment as a result of the
current decline in the European market sugar price.
Deferred consideration
Deferred consideration comprises estimates of amounts due to the previous owners of businesses acquired by the Group which are
often linked to performance or other conditions.
Other
Other provisions mainly comprise litigation claims, and warranty claims arising from the sale and closure of businesses. The extent
and timing of the utilisation of these provisions is more uncertain given the nature of the claims and the period of the warranties.
22. Share capital and reserves
Share capital
At 14 September 2024, the Company’s issued and fully paid share capital comprised 744,303,807 ordinary shares of 5 15⁄22p each
carrying one vote per share (2023 – 767,953,088). Total nominal value was £42m (2023 – £44m). The Company repurchased and
cancelled 23,649,281 shares during the year at a cost of £562m (2023 – 23,721,095 shares at a cost of £448m).
At 14 September 2024, the Company recognised a current liability of £6m in accruals in respect of shares yet to be delivered under
the share buyback programme (2023 – nil). At 14 September 2024, the Company had a contractual right to terminate the share
buyback programme, so the liability recognised is limited to the Company’s obligation to pay for shares already purchased on its
behalf at 14 September 2024 but not yet paid for.
Other reserves
£173m of other reserves arose from the cancellation of share premium account by the Company in 1993. £2m arose in 2010 following
redemption of two million £1 deferred shares at par. £3m has arisen since 2023 following the purchase and subsequent cancellation
of shares (2023 – £1m).
The remaining £4m comprises a £5m unrealised gain on investments held at fair value through other comprehensive income, net
of £1m deferred tax (2023 – £3m, £4m and £1m, respectively).
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign
operations, as well as from the translation of liabilities that hedge the Group’s net investment in foreign subsidiaries.
Hedging reserve
The hedging reserve comprises all changes in the value of derivatives to the extent that they are effective cash flow hedges, net
of amounts recycled from the hedging reserve on occurrence of the hedged transaction or when the hedged transaction is no longer
expected to occur.
Associated British Foods plc | 179 | Annual Report 2024
23. Acquisitions and disposals
Acquisitions
2024
In the first half, the Grocery division acquired Capsicana, a provider of Latin American products including tortillas, pastes, kits and
seasoning mixes. Also in the first half, the Ingredients division acquired the remaining 50% stake of its existing joint venture Roal,
making it a wholly owned subsidiary. The acquisition gave rise to negative goodwill of £7m which was released to the income
statement through profit on disposal of business.
In the second half, the Ingredients division acquired Mapo, an Italian manufacturer of premium frozen baked goods, to support AB
Mauri’s Scrocchiarella product range, Omega Yeast Labs, a leading provider of liquid yeast to the craft brewing industry in the US,
for £36m, and Romix, a specialist blender of baking ingredients in the UK.
Also in the second half, the Grocery division acquired The Artisanal Group, a leading manufacturer and wholesaler of high-quality
baked goods in Australia, for £35m.
Recognised values on acquisition
Pre-acquisition
carrying values
TAG (The
Artisanal
Group)
Omega Yeast
Other
Total
£m
£m
£m
£m
£m
Net assets
Intangible assets
1
15
8
14
37
Property, plant and equipment and right-of-use assets
73
8
11
63
82
Working capital
6
(1)
–
9
8
Cash
7
2
1
4
7
Loans
(25)
(25)
–
–
(25)
Capital payable
(39)
–
–
(39)
(39)
Lease liabilities
–
–
(8)
–
(8)
Provisions
–
–
–
(1)
(1)
Taxation
(4)
(5)
–
(1)
(6)
Net identifiable assets and liabilities
19
(6)
12
49
55
Goodwill
41
24
12
77
Negative goodwill released to the income statement
–
–
(7)
(7)
Total consideration
35
36
54
125
Recognised
values on
acquisition
£m
Satisfied by
Cash consideration
96
Consideration already paid
5
Net assets already owned
15
Deferred consideration
9
125
Net cash
Cash consideration
96
Cash and cash equivalents acquired
(7)
89
Pre-acquisition carrying amounts were the same as recognised values on acquisition apart from £36m of non-operating intangibles
in respect of brands, technology and customer relationships, and £9m of property, plant and equipment, together with a £(2)m
related deferred tax liability, an inventory uplift of £2m, lease liabilities of £(8)m, £(1)m of provisions and goodwill of £77m. Cash flow
on acquisition of subsidiaries, joint ventures and associates of £93m comprised £89m cash consideration and £4m deferred
consideration paid in respect of previous acquisitions.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 180 | Annual Report 2024
2023
In the first half, the Agriculture division acquired Kite Consulting, Advance Sourcing and Progres. Kite Consulting is a specialist dairy
consultant and Advance Sourcing provides specialist products to create value by improving herd performance and supports dairy
farmers to improve herd efficiency and resilience. Progres in Finland uses a patented additive to support gut health.
Also in the first half, the Ingredients division acquired Vital Solutions in Germany, which specialises in natural science-based
ingredients for application in dietary supplements and functional foods.
In the second half, the Agriculture division acquired IFCN, a dairy research and consulting company and National Milk Records plc
(NMR) for £48m. NMR is the leading agri-tech supplier of management information and testing services to the UK dairy supply chain.
2024
The Sugar division sold its remaining assets in north China for £24m net of restructuring costs. Profit on sale was £12m compared
to assets of £12m. The Sugar division also disposed of a 30% associate interest in South Africa which enabled the release of a £5m
non-cash provision taken in the prior year and charged £2m for the closure of a small joint venture in South Africa. On completion
of the buyout of the Roal joint venture in Finland, the Ingredients division released £7m negative goodwill arising. The Ingredients
division also released £4m of surplus provisions relating to closed factories in China.
2023
The Ingredients division sold property, plant and equipment in China to its local joint venture partner for a profit of £3m. The Sugar
division booked a £6m non-cash provision for a financial guarantee when its 30% associate in South Africa went into business rescue.
24. Share-based payments
The annual charge in the income statement for equity-settled share-based payments schemes was £31m (2023 – £18m). The Group
had the following principal equity-settled share-based payment plans in operation during the period:
Associated British Foods 2016 Long-term Incentive Plan (‘the 2016 LTIP’)
The 2016 LTIP was approved and adopted by the Company at the AGM held on 9 December 2016. It takes the form of conditional
allocations of shares which are released if, and to the extent that, performance targets are satisfied, typically over a three-year
vesting period.
Associated British Foods 2016 Short-term Incentive Plan (‘the 2016 STIP’)
The 2016 STIP was approved and adopted by the Board on 2 November 2016. It takes the form of conditional allocations of shares
which are released at the end of a three-year vesting period if, and to the extent that, performance targets are satisfied, over
a one-year performance period. Further information regarding the operation of the above plans can be found in the Remuneration
Report on pages 111 to 127. Total conditional allocations under the Group’s equity-settled share-based payment plans are as follows:
Balance
outstanding at the
beginning of the
period
Granted/awarded
Vested
Expired/lapsed
Balance
outstanding at the
end of the period
2024
6,977,182
2,170,822
(1,202,101)
(1,422,362)
6,523,541
2023
6,090,005
3,113,056
(607,140)
(1,618,739)
6,977,182
Employee Share Ownership Plan Trust
Shares subject to allocation under the Group’s equity-settled share-based payment plans are held in a separate Employee Share
Ownership Plan Trust funded by the Company. Voting rights attached to shares held by the Trust are exercisable by the trustee, who
is entitled to consider any recommendation made by a committee of the Company. At 14 September 2024 the Trust held 4,348,890
(2023 – 4,734,992) ordinary shares of the Company. The market value of these shares at the year end was £95m (2023 – £99m).
The Trust has waived its right to dividends. Movements in the year were a release of 1,202,101 shares and the purchase of 815,999
shares (2023 – release of 607,140 shares and the purchase of 2,300,000 shares).
Fair values
The weighted average fair value of conditional grants made was determined by taking the market price of the shares at the
time of grant and discounting for the fact that dividends are not paid during the vesting period. The weighted average fair value
of the conditional shares allocated during the year was 2,196p (2023 – 1,544p) and the weighted average share price was 2,362p
(2023 – 1,660p). The dividend yield used was 2.5% (2023 – 2.5%).
Associated British Foods plc | 181 | Annual Report 2024
25. Analysis of net debt
At 16
September
2023
Cash flow
Acquisition
and disposals
New leases,
non-cash
items and
transfers
Exchange
adjustments
At 14
September
2024
£m
£m
£m
£m
£m
£m
Short-term loans
(99)
50
(25)
–
3
(71)
Long-term loans
(394)
(66)
–
–
6
(454)
Lease liabilities
(3,160)
348
(8)
(301)
56
(3,065)
Total liabilities from financing activities
(3,653)
332
(33)
(301)
65
(3,590)
Cash at bank and in hand, cash equivalents
and overdrafts
1,388
(27)
–
–
(126)
1,235
Current asset Investments
–
334
–
–
–
334
Net debt including lease liabilities
(2,265)
639
(33)
(301)
(61)
(2,021)
At 17
September
2022
Cash flow
Acquisition
and disposals
New leases,
non-cash
items and
transfers
Exchange
adjustments
At 16
September
2023
£m
£m
£m
£m
£m
£m
Short-term loans
(31)
13
(1)
(87)
7
(99)
Long-term loans
(480)
–
(1)
87
–
(394)
Lease liabilities
(3,252)
308
–
(279)
63
(3,160)
Total liabilities from financing activities
(3,763)
321
(2)
(279)
70
(3,653)
Cash at bank and in hand, cash equivalents
and overdrafts
1,995
(534)
–
–
(73)
1,388
Current asset Investments
4
(3)
–
–
(1)
–
Net debt including lease liabilities
(1,764)
(216)
(2)
(279)
(4)
(2,265)
Reconciliation of net debt to balance sheet
2024
2023
Note
£m
£m
Cash and cash equivalents
18
1,323
1,457
Current asset investments
18
334
–
Current loans and overdrafts
19
(159)
(168)
Non-current loans
19
(454)
(394)
Net cash before lease liabilities
1,044
895
Lease liabilities
11
(3,065)
(3,160)
Net debt including lease liabilities
(2,021)
(2,265)
Roll forward of the liabilities associated with interest paid
2024
2023
Note
£m
£m
Opening balance
(25)
(18)
Interest expense
4
(135)
(128)
Interest paid
140
118
Interest capitalised
4
(5)
–
Effect of hyperinflationary economies
–
3
Closing balance
(25)
(25)
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 182 | Annual Report 2024
26. Financial instruments
a) Carrying amount and fair values of financial assets and liabilities
2024
2023
£m
£m
Financial assets
Financial assets at amortised cost
Cash and cash equivalents
1,323
1,457
Current asset investments
334
–
Trade and other receivables
1,505
1,568
Other non-current receivables
–
31
At fair value through other comprehensive income
Investments
30
32
At fair value through profit or loss
Derivative assets not designated in a cash flow hedging relationship:
• currency derivatives (excluding cross-currency swaps)
6
11
• commodity derivatives
1
–
Designated cash flow hedging relationships
Derivative assets designated and effective as cash flow hedging instruments:
• currency derivatives (excluding cross-currency swaps)
10
40
• cross-currency swaps
–
24
• interest rate derivatives
1
4
• commodity derivatives
10
17
Total financial assets
3,220
3,184
Financial liabilities
Financial liabilities at amortised cost
Trade and other payables
(2,435)
(2,448)
Secured loans
(63)
–
Unsecured loans and overdrafts (fair value 2024 – £345m; 2023 – £470m)
(550)
(562)
Lease liabilities (fair value 2024 – £3,394m; 2023 – £3,178m)
(3,065)
(3,160)
Deferred consideration
(11)
(6)
At fair value through profit and loss
Derivative liabilities not designated in a cash flow hedging relationship:
• currency derivatives (excluding cross-currency swaps)
(18)
(6)
Designated net investment hedging relationships
Derivative liabilities designated as net investment hedging instruments:
• cross-currency swaps
–
(7)
Designated cash flow hedging relationships
Derivative liabilities designated and effective as cash flow hedging instruments:
• currency derivatives (excluding cross-currency swaps)
(66)
(4)
• commodity derivatives
(13)
(52)
Total financial liabilities
(6,221)
(6,245)
Net financial liabilities
(3,001)
(3,061)
Except where stated, carrying amount is equal to fair value.
Associated British Foods plc | 183 | Annual Report 2024
26. Financial instruments continued
Valuation of financial instruments carried at fair value
Financial instruments carried at fair value on the balance sheet comprise derivatives and investments. The Group classifies these
financial instruments using a fair value hierarchy that reflects the relative significance of both objective evidence and subjective
judgements on the inputs used in making the fair value measurements:
• Level 1: financial instruments are valued using observable inputs that reflect unadjusted quoted market prices in an active market for
identical instruments. An example of an item in this category is a widely traded equity instrument with a normal quoted market price.
• Level 2: financial instruments are valued using techniques based on observable inputs, either directly (i.e. market prices and rates)
or indirectly (i.e. derived from market prices and rates). An example of an item in this category is a currency derivative, where
forward exchange rates and yield curve data, which are observable in the market, are used to derive fair value.
• Level 3: financial instruments are valued using techniques involving significant unobservable inputs.
b) Derivatives
All derivatives are classified as current on the face of the balance sheet. The table below analyses the carrying amount of derivatives
and their contractual/notional amounts, together with an analysis of derivatives by the level in the fair value hierarchy into which their
fair value measurement method is categorised.
2024
2023
Contractual
/notional
amounts
Level 1
Level 2
Total
Contractual/
notional
amounts
Level 1
Level 2
Total
£m
£m
£m
£m
£m
£m
£m
£m
Financial assets
Currency derivatives (excluding
cross-currency swaps)
1,305
–
16
16
2,402
–
51
51
Cross-currency swaps
–
–
–
–
84
–
24
24
Interest rate derivatives
400
–
1
1
400
–
4
4
Commodity derivatives
169
1
10
11
163
5
12
17
1,874
1
27
28
3,049
5
91
96
Financial liabilities
Currency derivatives (excluding
cross-currency swaps)
3,460
–
(84)
(84)
626
–
(10)
(10)
Cross-currency swaps
–
–
–
–
65
–
(7)
(7)
Commodity derivatives
219
–
(13)
(13)
275
(2)
(50)
(52)
3,679
–
(97)
(97)
966
(2)
(67)
(69)
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 184 | Annual Report 2024
c) Cash flow hedging reserve
The following table identifies the movements in the cash flow hedging reserve during the year, and the periods in which the cash
flows are expected to occur. The periods in which the cash flows are expected to impact profit or loss are materially the same.
2024
2023
Currency
derivatives
(excluding
cross-
currency)
Cross-
currency
swaps
Interest
rate
derivatives
Commodity
derivatives
Total
Currency
derivatives
(excluding
cross-
currency)
Cross-
currency
swaps
Interest
rate
derivatives
Commodity
derivatives
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Opening balance
(28)
(2)
(2)
30
(2)
(41)
–
2
(115)
(154)
Losses/(gains)
recognised in the
hedging reserve
68
–
1
6
75
73
5
(5)
339
412
Amount removed from
the hedging reserve
and included in the
income statement:
• revenue
8
–
–
(5)
3
(6)
–
–
(7)
(13)
• cost of sales
–
–
–
(28)
(28)
–
–
–
(132)
(132)
• other financial
(income)/expense
(1)
2
–
–
1
–
(7)
–
–
(7)
Amounts removed
from the hedging
reserve and included in
a non-financial asset:
• inventory
18
–
–
(9)
9
(52)
–
–
(16)
(68)
Deferred tax
(21)
–
–
8
(13)
(2)
–
1
(39)
(40)
Closing balance
44
–
(1)
2
45
(28)
(2)
(2)
30
(2)
Cash flow are
expected to occur:
• within six months
26
–
–
2
28
(15)
–
–
25
10
• between six months
and one year
18
–
(1)
–
17
(13)
(2)
(2)
4
(13)
• between one and
two years
–
–
–
–
–
–
–
–
1
1
44
–
(1)
2
45
(28)
(2)
(2)
30
(2)
Of the closing balance of £45m, £45m is attributable to equity shareholders and £nil to non-controlling interests (2023 – £(2)m,
£(2)m attributable to equity shareholders and £nil to non-controlling interests). Of the net movement in the year of £47m, £47m
is attributable to equity shareholders and £nil to non-controlling interests (2023 – £151m, £151m attributable to equity shareholders
and £nil to non-controlling interests).
The balance remaining in the commodity cash flow hedge reserve from hedging relationships for which hedge accounting is no longer
applied is £1m (2023 – £3m).
The balance in the cost of hedging reserve was not significant at 14 September 2024 or 16 September 2023.
d) Financial risk identification and management
The Group is exposed to the following financial risks from the use of financial instruments:
• market risk; and
• credit risk.
The Group’s financial risk management process seeks to enable the early identification, evaluation and effective management of key
risks facing the business. Risk management policies and governance committees have been established and are reviewed regularly
to reflect changes in market conditions and the Group’s activities. The Group, through its policies and procedures, aims to develop
a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group sources and sells products and manufactures goods in many locations around the world. These operations expose the
Group to potentially significant price volatility in the financial and commodity markets. Risk management teams have been established
to manage this exposure by entering into a range of products, including physical and financial forward contracts, futures, swaps,
and, where appropriate, options. These teams work closely with Group Treasury and report regularly to executive management.
Associated British Foods plc | 185 | Annual Report 2024
26. Financial instruments continued
Treasury activities and commodity hedging are conducted within a clearly defined framework of Board-approved policies and
guidelines to manage the Group’s financial and commodity risks. Group Treasury works closely with the Group’s commercial and
procurement teams to manage commodity risks. Group Treasury policy seeks to ensure that adequate financial resources are
available at all times for the management and development of the Group’s businesses, whilst effectively managing its market risk and
credit risk. The Group’s risk management policy explicitly forbids the use of financial or commodity derivatives for speculative purposes.
e) Foreign currency translation
The Group presents its financial statements in sterling. As a result of its worldwide operations, the Group is exposed to foreign
currency translation risk where overseas operations have a functional currency other than sterling. Changes in foreign currency
exchange rates impact the translation into sterling of both the income statement and net assets of these foreign operations.
The Group typically finances its operations using own funds generated in the functional currency of its operations and where appropriate,
by borrowing locally in the same functional currency. This reduces net asset values reported in functional currencies other than sterling,
thereby reducing the economic exposure to fluctuations in foreign currency exchange rates on translation.
The Group also finances its operations by obtaining funding at Group level through external borrowings and, where they are not
in sterling, these borrowings may be designated as net investment hedges. This enables gains and losses arising on retranslation
of these foreign currency borrowings to be charged to other comprehensive income, providing a partial offset in equity against
the gains and losses arising on translation of the net assets of foreign operations.
The Group held cross-currency interest rate swaps to hedge its fixed rate non-sterling debt which matured during the year.
These were reported as cash flow hedges and net investment hedges. The change in fair value of the hedging instrument, to the
degree effective, is retained in other comprehensive income. Under IFRS 9, the currency basis on the cross-currency swaps is
excluded from the hedge designation and recognised in other comprehensive income – cost of hedging. The value of the currency
basis is not significant. Effectiveness was measured using the hypothetical derivative approach. The hypothetical derivative was
based on the critical terms of the debt and therefore the only ineffectiveness that might arise was in relation to credit risk. Credit risk
was monitored regularly and was not a significant factor in the hedge relationship.
The Group does not actively hedge the translation impact of foreign exchange rate movements on the income statement (other than
via the partial economic hedge arising from the servicing costs on non-sterling borrowings).
The Group designates certain of its intercompany loan arrangements as quasi-equity for the purposes of IAS 21. The effect of the
designation is that any foreign exchange volatility arising within the borrowing entity and/or the lending entity is accounted for directly
within other comprehensive income.
A net foreign exchange loss of £nil (2023 – £2m) on retranslation of these loans has been taken to the translation reserve on
consolidation, all of which was attributable to equity shareholders. The Group held cross-currency swaps that were designated as
hedges of its net investments in euros, whose change in fair value of £nil charged to the translation reserve, all of which was
attributable to equity shareholders (2023 – £1m debited to the translation reserve).
f) Market risk
Market risk is the risk of movements in the fair value of future cash flows of a financial instrument or forecast transaction as
underlying market prices change. The Group is exposed to changes in the market price of commodities, interest rates and foreign
exchange rates. These risks are known as ‘transaction’ (or recognised) exposures and ‘economic’ (or forecast) exposures.
(i) Commodity price risk
Commodity price risk arises from the procurement of raw materials and sale of finished goods linked to market indices, the consequent
exposure to changes in market prices.
The Group purchases a wide range of commodities in the ordinary course of business and has some sales contracts which are linked
to financial market indices. Exposure to changes in the market price of certain of these commodities including sugar raws, energy,
wheat, edible oils, soya beans, tea, lean hog, cocoa and rice is managed through the use of forward physical contracts and hedging
instruments, including futures, swaps and options primarily to convert floating prices to fixed prices. The use of such contracts to
hedge commodity exposures is governed by the Group’s risk management policies and is continually monitored by Group Treasury.
Commodity derivatives also provide a way to meet customers’ pricing requirements whilst achieving a price structure consistent
with the Group’s overall pricing strategy.
Some of the Group’s commodity forward contracts are classified as ‘own use’ contracts, since they are entered into, and continue
to be held, for the purposes of the Group’s ordinary operations. In this instance the Group takes physical delivery of the commodity
concerned. Own use contracts do not require accounting entries until the commodity purchase actually crystallises. Where possible,
other commodity derivatives are accounted for as cash flow hedges (typically with a one-to-one hedge ratio), but there are some
commodity derivatives for which the strict requirements of hedge accounting cannot be satisfied. Such commodity derivatives are
used only where the business believes they provide an economic hedge of an underlying exposure. These instruments are classified
as held for trading and are marked to market through the income statement.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 186 | Annual Report 2024
The majority of the Group’s forward physical contracts and commodity derivatives have maturities of less than one year.
The Group’s sensitivities in respect of commodity derivatives for a +/- 20% movement in underlying commodity prices are £19m
(2023 – £16m) and £(16)m (2023 – £(13)m), respectively.
(ii) Interest rate risk
Interest rate risk comprises two primary elements:
• interest price risk results from financial instruments bearing fixed interest rates. Changes in floating interest rates therefore affect
the fair value of these financial instruments; and
• interest cash flow risk results from financial instruments bearing floating rates. Changes in floating interest rates affect cash flows
on interest receivable or payable.
The Group’s policy is to manage its mix of fixed and floating rate debt, cash and investments so that a significant change in interest
rates does not have a material negative impact on the Group’s cash flows.
At 14 September 2024, £396m (65%) (2023 – £475m and 85%) of total debt was subject to fixed rates of interest, the majority
of which is the 2034 public bond. Floating rate debt comprises other bank borrowings bearing interest rates for various time periods
up to 12 months, by reference to the relevant market rate for the currency and location of the borrowing.
The Group’s cash, cash equivalents and current asset investments are subject to floating rates of interest, fixed for periods up to
6 months by reference to the relevant market rate for the currency of the cash placing or investment.
£400m of sterling interest rate swaps have been entered into so that the floating interest rate received on an equivalent balance
of the Group’s cash and cash equivalents is fixed for the 12-month period to September 2025.
(iii) Foreign currency risk
The Group conducts business worldwide and consequently in many foreign currencies. As a result, it is exposed to movements
in foreign currency exchange rates which affect the Group’s transaction costs. The Group also publishes its financial statements
in sterling and is therefore exposed to movements in foreign exchange rates on the translation of the results and underlying net
assets of its foreign operations into sterling.
Translation risk is discussed in section e) on page 186.
Transaction (recognised) risk
Currency transaction exposure occurs where a business makes sales and purchases in a currency other than its functional currency,
or where the functional currency value of the sale or purchase is linked to a currency other than its functional currency. It also arises
where monetary assets and liabilities of a business are not denominated in its functional currency, and where dividends or surplus
funds are remitted from overseas. The Group’s policy is to match transaction exposures wherever possible, and to hedge actual
exposures and firm commitments as soon as they occur by using forward foreign currency contracts.
The Group uses derivatives (principally forward foreign currency contracts) to hedge its exposure to movements in exchange rates on
its foreign currency trade receivables and payables. The Group does not seek formal fair value hedge accounting for such transaction
hedges. Instead, such derivatives are classified as held for trading and marked to market through the income statement. This offsets
the income statement impact of the retranslation of the foreign currency trade receivables and payables.
Economic (forecast) risk
The Group principally uses forward foreign currency contracts to hedge its exposure to movements in exchange rates on its highly
probable forecast foreign currency sales and purchases. The Group does not formally define the proportion of highly probable forecast
sales and purchases to hedge, but agrees an appropriate percentage on an individual basis with each business by reference to the
underlying commercial model of the business, the Group’s risk management policies and prevailing market conditions. The Group
designates currency derivatives used to hedge its highly probable forecast transactions as cash flow hedges. Under IFRS 9, the spot
component is designated in the hedging relationship and forward points and currency basis are excluded and recognised in other
comprehensive income – cost of hedging. The cost of hedging value during the period and at the balance sheet date was not material.
The economic relationship is based on critical terms and a one-to-one hedge ratio. To the extent that cash flow hedges are effective,
gains and losses are deferred in equity until the forecast transaction occurs, at which point the gains and losses are recycled either to
the income statement or to the non-financial asset acquired.
The majority of the Group’s currency derivatives have original maturities of less than one year.
The Group’s most significant currency transaction exposures are:
• sourcing for Primark – costs are denominated in a number of currencies, predominantly US dollars, euros and sterling.
• sugar sales in British Sugar to movements in the sterling/euro exchange rate.
Elsewhere, a number of businesses make sales and purchase a variety of raw materials in foreign currencies (primarily US dollars and
euros), giving rise to transaction exposures. In all other material respects, businesses tend to operate in their functional currencies.
Associated British Foods plc | 187 | Annual Report 2024
26. Financial instruments continued
The table below illustrates the effects of hedge accounting on the consolidated balance sheet and consolidated income statement
by disclosing separately by risk category, and each type of hedge, the details of the associated hedging instrument and hedged item.
2024
Contract
notional
Carrying
amount
assets/
(liabilities)
Furthest
maturity
date
Hedge
ratio
Change in fair
value of hedging
instrument used to
determine hedge
ineffectiveness
Change in fair
value of hedged
item used to
determine hedge
effectiveness
£m
£m
%
£m
£m
Current
Designated cash flow hedging relationships
• currency derivatives
3,449
(56)
Sep-25
100 %
(63)
63
• commodity derivatives
343
(2)
Aug-25
100 %
(1)
1
• interest rate derivatives
400
1
Sep-25
100 %
1
(1)
Non-current
Designated cash flow hedging relationships
• currency derivatives
20
–
May-27
100 %
–
–
• commodity derivatives
2
–
Nov-25
100 %
–
–
2023
Contract
notional
Carrying
amount
assets/
(liabilities)
Furtherest
maturity
date
Hedge
ratio
Change in fair value
of hedging
instrument used to
determine hedge
ineffectiveness
Change in fair value
of hedged item used
to determine hedge
effectiveness
£m
£m
%
£m
£m
Current
Designated cash flow hedging relationships
• currency derivatives (excluding cross-currency
swaps)
2,024
36
Sep-24
100 %
36
(36)
• cross-currency swaps
84
24
Mar-24
100 %
6
(6)
• commodity derivatives
427
(35)
Sep-24
100 %
(35)
35
• interest rate derivatives
400
4
Sep-24
100 %
4
(4)
Designated net investment hedging relationships:
• currency derivatives (cross-currency swaps)
65
(6)
Mar-24
100 %
–
–
Non-current
Designated cash flow hedging relationships
• currency derivatives (cross-currency swaps)
21
–
Apr-25
100 %
–
–
• commodity derivatives
11
–
Feb-25
100 %
–
–
Hedging relationships are typically based on a one-to-one hedge ratio. The economic relationship between the hedged item and
the hedging instrument is analysed on an ongoing basis. Sources of possible ineffectiveness include changes in forecast transactions
as a result of timing or value or, in certain cases, different indices linked to the hedged item and the hedging instrument. As at 14
September 2024, £3,471m of forward foreign currency contracts designated as cash flow hedges were outstanding (2023 – £2,045m),
largely in relation to purchases of USD (£2,779m) and sales of EUR (£219m) with varying maturities up to May 2027. Weighted
average hedge rates for these contracts are GBPUSD: 1.276, EURUSD: 1.098 and GBPEUR: 1.158. Weighted average hedge rates
for the cross-currency swaps for 2023 were GBPUSD: 1.70 and GBPEUR: 1.26. Commodity derivatives designated as cash flow
hedges related to a range of underlying hedged items, with varying maturities up to November 2025.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 188 | Annual Report 2024
The analysis of the Group’s foreign currency exposure to financial assets and liabilities by currency of denomination is as follows:
2024
Sterling
US dollar
Euro
Other
Total
£m
£m
£m
£m
£m
Financial assets
Cash and cash equivalents
1
189
63
27
280
Current asset investments
–
208
–
–
208
Trade and other receivables
1
42
73
17
133
2
439
136
44
621
Financial liabilities
Trade and other payables
(19)
(342)
(34)
(9)
(404)
Unsecured loans and overdrafts
–
–
(4)
–
(4)
(19)
(342)
(38)
(9)
(408)
Currency derivatives
Gross amounts receivable
81
3,403
183
259
3,926
Gross amounts payable
(2)
(156)
(351)
(330)
(839)
79
3,247
(168)
(71)
3,087
62
3,344
(70)
(36)
3,300
2023
Sterling
US dollar
Euro
Other
Total
£m
£m
£m
£m
£m
Financial assets
Cash and cash equivalents
–
264
17
32
313
Trade and other receivables
–
50
56
19
125
–
314
73
51
438
Financial liabilities
Trade and other payables
(17)
(381)
(41)
(6)
(445)
Unsecured loans and overdrafts
–
(81)
–
1
(80)
(17)
(462)
(41)
(5)
(525)
Currency derivatives
Gross amounts receivable
67
1,890
112
466
2,535
Gross amounts payable
(3)
(161)
(299)
(179)
(642)
64
1,729
(187)
287
1,893
47
1,581
(155)
333
1,806
Average rate
Closing rate
2024
2023
2024
2023
US dollar
1.26
1.22
1.32
1.24
Euro
1.17
1.15
1.19
1.16
Sensitivity analysis – translation impact of non-functional assets and liabilities
The following sensitivity analysis illustrates the impact that a 10% strengthening of the Group’s transactional currencies against
local functional currencies would have had on profit and equity. The analysis covers currency translation exposures at year end on
businesses’ financial assets and liabilities that are not denominated in the functional currencies of those businesses. A similar but
opposite impact would be felt on both profit and equity if the Group’s main operating currencies weakened against local functional
currencies by a similar amount.
The exposure to foreign exchange gains and losses on translating the financial statements of subsidiaries into sterling is not included
in this sensitivity analysis, as there is no impact on the income statement, and the gains and losses are recorded directly in the translation
reserve in equity (see below for a separate sensitivity). This sensitivity is presented before taxation and non-controlling interests.
Associated British Foods plc | 189 | Annual Report 2024
26. Financial instruments continued
2024
2024
2023
2023
impact on
profit for the
period
impact on
total equity
impact on
profit for the
period
impact on total
equity
10% strengthening of non-functional currencies
£m
£m
£m
£m
Sterling
1
7
1
6
US dollar
29
333
21
164
Euro
22
8
(2)
(19)
Other
23
31
29
32
Sensitivity analysis – translation of foreign operations profit before tax
A second sensitivity analysis calculates the impact on the Group’s profit before tax if the average rates used to translate the results
of the Group’s foreign operations into sterling were adjusted to show a 10% strengthening of sterling. A similar but opposite impact
would be felt on profit before tax if sterling weakened against the other currencies by a similar amount.
2024
2023
impact on
profit for the
period
impact on
profit for the
period
10% strengthening of sterling against
£m
£m
US dollar
(26)
(24)
Euro
(38)
(22)
Other
(39)
(27)
g) Credit risk
Credit risk is the risk that counterparties to financial transactions can not perform according to the terms of the contract.
The Group’s businesses are principally exposed to counterparty credit risk when dealing with their customers, suppliers,
and from financial institutions.
The immediate credit exposure of financial derivatives is represented by those financial derivatives that have a net positive fair value
by counterparty at 14 September 2024. The Group considers its maximum exposure to credit risk to be:
2024
2023
Note
£m
£m
Cash and cash equivalents
18
1,323
1,457
Current asset investments
18
334
–
Trade and other receivables
15
1,505
1,568
Other non-current receivables
15
–
31
Investments
15
30
32
Derivative assets at fair value through profit and loss
6
11
Derivative assets in designated cash flow hedging relationships
21
78
3,219
3,177
The Group uses changes in credit ratings and other metrics to identify significant changes to the financial profile of its counterparties.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 190 | Annual Report 2024
Counterparty risk profile and management
The table below analyses the Group’s current asset investments, cash equivalents and derivative assets by credit exposure:
2024
Derivatives
Current asset
investments
Cash
equivalents
Currency
derivatives
Cross-
currency
swaps
Interest rate
swaps
Commodities
Total
Long term issuer rating
£m
£m
£m
£m
£m
£m
£m
AAA
–
90
–
–
–
–
90
AA
30
–
–
–
–
–
30
A
304
641
3
–
1
6
955
BBB
–
5
3
–
–
–
8
BB
–
14
–
–
–
–
14
Not rated
–
22
–
–
–
–
22
Total
334
772
6
–
1
6
1,119
2023
Derivatives
Current asset
investments
Cash
equivalents
Currency
derivatives
Cross-currency
swaps
Interest rate
swaps
Commodities
Total
Long term issuer rating
£m
£m
£m
£m
£m
£m
£m
AA
–
50
2
–
–
–
52
A
–
874
39
17
4
1
935
Not rated
–
52
–
–
–
7
59
Total
–
976
41
17
4
8
1,046
Cash of £551m (2023 – £481m) has been excluded from this analysis as the balances are available on demand. The significant
majority of cash balances and short-term deposits are held with strong investment-grade banks or financial institutions.
Trade and other receivables
Significant concentrations of credit risk are very limited as a result of the Group’s large and diverse customer base. The Group has
an established credit policy applied by each business under which the credit status of each new customer is reviewed before credit
is advanced. This includes external credit evaluations where possible and in some cases bank references. Credit limits are established
for all significant or high-risk customers, which represent the maximum amount permitted to be outstanding without requiring additional
approval from the appropriate level of management. Outstanding debts are continually monitored by each business. Credit limits are
reviewed on a regular basis, and at least annually. Customers that fail to meet the Group’s benchmark creditworthiness may only
transact on a prepayment basis. Aggregate exposures are monitored at Group level.
Many customers have been transacting with the Group for many years and the incidence of bad debts has been low. Where appropriate,
goods are sold subject to retention of title so that, in the event of non-payment, the Group may have a secured claim. The Group does
not typically require collateral in respect of trade and other receivables.
The Group provides for impairment of financial assets including trade and other receivables based on known events, and makes a
collective provision for losses yet to be identified, based on historical data. The majority of the provision comprises specific amounts.
To measure expected credit losses, gross trade receivables are assessed regularly by each business locally with reference
to considerations such as the current status of the relationship with the customer, the geographical location of each customer,
and days past due (where applicable).
Expected losses are determined based on the historical experience of write-offs compared to the level of trade receivables. These
historical loss expectations are adjusted for current and forward-looking information where it is identified to be significant. The Group
considers factors such as national economic outlooks and bankruptcy rates of the countries in which its goods are sold to be the most
relevant factors. Where the impact of these is assessed as significant, the historical loss expectations are amended accordingly.
The Group considers credit risk to have significantly increased for debts aged 180 days or over and expects these debts to be
provided for in full. Where the Group holds insurance or has a legal right of offset with debtors who are also creditors, the loss
expectation is applied only to the extent of the uninsured or net exposure.
Associated British Foods plc | 191 | Annual Report 2024
26. Financial instruments continued
Trade receivables are written off when there is no reasonable expectation of recovery, indicators of which may include the failure
of the debtor to engage in a payment plan, and failure to make contractual payments within 180 days past due.
The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region of origin was:
2024
2023
£m
£m
UK
547
584
Europe & Africa
389
398
The Americas
214
216
Asia Pacific
355
370
1,505
1,568
Trade receivables can be analysed as follows:
2024
2023
£m
£m
Not overdue
1,095
1,157
Up to one month past due
141
121
Between one and two months past due
19
29
Between two and three months past due
11
10
More than three months past due
32
30
Expected loss provision
(27)
(28)
1,271
1,319
Trade receivables are stated net of the following expected loss provision:
2024
2023
£m
£m
Opening balance
28
27
Increase charged to the income statement
7
7
Amounts released
(3)
(2)
Amounts written off
(4)
(2)
Effect of movements in foreign exchange
(1)
(2)
Closing balance
27
28
No trade receivables were written off directly to the income statement in either year.
The geographical and business line complexity of the Group, combined with the fact that expected credit loss assessments are all
performed locally, means that it is not practicable to present further analysis of expected credit losses.
In relation to other receivables not forming part of trade receivables, a similar approach has been taken to assess expected credit
losses. No significant expected credit loss has been identified.
The directors consider that the carrying amount of trade and other receivables approximates fair value.
Cash and cash equivalents
Policies including choice of bank, opening of bank accounts and repatriation of funds must be agreed with Group Treasury. The Group
has not recorded impairments against cash or cash equivalents, nor have any recoverability issues been identified with such balances.
h) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its obligations as they fall due. Group Treasury is responsible
for monitoring and managing group liquidity and ensures that the Group always has access to sufficient cash balances and headroom
on committed credit facilities to meet unforeseen circumstances. The Group also has access to uncommitted credit facilities which
provide short-term funding flexibility.
Liquidity availability headroom is monitored via the use of detailed cash flow forecasts prepared by each business, which are reviewed
at least quarterly, or more often, as required. Actual results are compared to budget and forecast each period, and variances
investigated and explained. Particular focus is given to management of working capital.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 192 | Annual Report 2024
The Board’s treasury policies are in place to maintain a strong capital base and manage the Group’s balance sheet to ensure long-term
financial stability. This includes maintaining access to significant total liquidity comprised of both cash and undrawn committed credit
facilities. These policies are the basis for investor, creditor and market confidence and enable the successful development of the business.
Details of the Group’s borrowing facilities are given in section i) on page 194.
The following table analyses the contractual undiscounted cash flows relating to financial liabilities at the balance sheet date and
compares them to carrying amounts:
2024
Due within
6 months
Due
between 6
months
and 1 year
Due
between 1
and 2
years
Due
between 2
and 5
years
Due after 5
years
Contracted
amount
Carrying
amount
Note
£m
£m
£m
£m
£m
£m
£m
Non-derivative financial liabilities
Trade and other payables
20
(2,356)
(80)
–
–
–
(2,436)
(2,435)
Secured loans
19
(3)
(1)
(17)
(47)
(19)
(87)
(63)
Unsecured loans and overdrafts
19
(147)
(9)
(22)
(31)
(450)
(659)
(550)
Lease liabilities
11
(225)
(232)
(443)
(1,201)
(2,153)
(4,254)
(3,065)
Deferred consideration
21
(1)
(5)
(5)
–
–
(11)
(11)
Derivative financial liabilities
• Currency derivatives (net payments)
(47)
(28)
–
–
–
(75)
(84)
• Commodity derivatives (net payments)
(11)
–
–
–
–
(11)
(13)
Total financial liabilities
(2,790)
(355)
(487)
(1,279)
(2,622)
(7,533)
(6,221)
2023
Due within
6 months
Due
between 6
months
and 1 year
Due
between 1
and 2 years
Due
between 2
and 5 years
Due after 5
years
Contracted
amount
Carrying
amount
Note
£m
£m
£m
£m
£m
£m
£m
Non-derivative financial liabilities
Trade and other payables
20
(2,380)
(68)
–
–
–
(2,448)
(2,448)
Unsecured loans and overdrafts
19
(80)
(101)
(13)
(30)
(460)
(684)
(562)
Lease liabilities
11
(197)
(210)
(406)
(1,057)
(2,074)
(3,944)
(3,160)
Deferred consideration
21
(2)
(1)
(3)
–
–
(6)
(6)
Derivative financial liabilities
• Currency derivatives (excluding cross-
currency swaps) (net payments)
(4)
–
–
(3)
–
(7)
(10)
• Commodity derivatives (net payments)
(46)
(5)
(1)
–
–
(52)
(52)
Total financial liabilities
(2,709)
(385)
(423)
(1,090)
(2,534)
(7,141)
(6,238)
The above tables do not include forecast data for liabilities which may be incurred in the future but which were not contracted
at 14 September 2024.
The principal reasons for differences between carrying values and contractual undiscounted cash flows are coupon payments on
the fixed rate debt to which the Group is already committed, future interest payments on the Group’s lease liabilities, and cash flows
on derivative financial instruments which are not aligned with their fair value.
Associated British Foods plc | 193 | Annual Report 2024
26. Financial instruments continued
i) Borrowing facilities
The Group has substantial borrowing facilities available to it totalling £2,009m (2023 – £2,002m). The undrawn committed facilities
at 14 September 2024 amounted to £1,532m (2023 – £1,516m). Uncommitted facilities at 14 September 2024 totalled £343m
(2023 – £363m) of which £207m (2023 – £287m) was undrawn.
In addition to the above facilities there are also £210m (2023 – £149m) of undrawn and available credit lines for the purposes
of issuing letters of credit and guarantees in the normal course of business.
The Group has issued a public bond of £400m due in 2034. Included are deferred financing costs totalling £9m which have been
capitalised against the bond and are to be amortised over its term.
Uncommitted bank borrowing facilities are normally reaffirmed by the banks annually, although they can be withdrawn at any time.
Refer to note 9 for details of the Group’s capital commitments and to note 27 for a summary of the Group’s guarantees.
An assessment of the Group’s current liquidity position is given in the Financial Review on page 47.
j) Capital management
The capital structure of the Group is presented in the consolidated balance sheet. For the purpose of the Group’s capital
management, capital includes issued capital and all other reserves attributable to equity shareholders, totalling £11,186m
(2023 – £11,093m).
The consolidated statement of changes in equity provides details on equity and note 19 provides details of loans and overdrafts. Short
and medium-term funding requirements are provided by a variety of loan and overdraft facilities, both committed and uncommitted,
with a range of counterparties and maturities. Longer-term debt funding is sourced from the 2034 Public Bond and committed
revolving credit facilities.
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to enable
successful future development of the business. The financial leverage policy is that, in the ordinary course of business, the Board
prefers to see the Group’s ratio of total net debt including lease liabilities to Adjusted EBITDA to be well under 1.5 times at each half
year and year end reporting date. The Board monitors return on capital by division and determines the overall level of dividends
payable to shareholders.
From time to time the trustee of the Employee Share Ownership Plan Trust purchases the Company’s shares in the market to satisfy
awards under the Group’s incentive plans. Once purchased, shares are not sold back into the market. The Group does not have
a defined share buyback plan.
There were no changes to the Group’s approach to capital management during the year. Neither the Company nor any of its
subsidiaries is subject to externally-imposed capital requirements.
27. Contingencies
Litigation and other proceedings against the Group are not considered material in the context of these financial statements.
As at 14 September 2024, Group companies have provided guarantees in the ordinary course of business amounting to £1,695m
(2023 – £1,724m).
In 2021, a Thai court ruled in favour of the Group’s Ovaltine business in Thailand in a legal action it brought against one of its suppliers
in respect of a contractual dispute. The court concluded that between 2009 and 2019 the supplier had overcharged Ovaltine Thailand
and should pay compensation of 2.2 billion Thai baht (£50m; 2023 – £50m). The relevant contractual relationship between the Group
and its supplier terminated at the end of 2019. The supplier appealed the judgement, which was overturned in October 2023. Ovaltine
Thailand filed an objection to the appeal in May 2024 which is pending. The Group has not yet recorded an asset in respect of this matter.
28. Related parties
The Group has a controlling shareholder relationship with its parent company, Wittington Investments Limited, with the trustees of
the Garfield Weston Foundation and with certain other individuals who hold shares in the Company. Further details of the controlling
shareholder relationship are included in note 29. The Group has a related party relationship with its associates and joint ventures
(see note 29) and with its directors. In the course of normal operations, related party transactions entered into by the Group have
been contracted on an arm’s length basis.
Details of the directors are given on pages 90 and 91. Their interests in the Company, including family interests, are given on pages
123 and 125. Key management personnel are considered to be the directors. Their remuneration is disclosed in the Directors'
Remuneration Report on pages 111 to 127.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 194 | Annual Report 2024
Material transactions and year end balances with related parties were as follows:
2024
2023
Sub note
£'000
£'000
Charges to Wittington Investments Limited in respect of services provided by the Company
and its subsidiary undertakings
984
985
Sales to fellow subsidiary undertakings on normal trading terms
1
19
18
Sales to companies with common key management personnel on normal trading terms
2
9,740
9,912
Amounts due from companies with common key management personnel
2
770
1,028
Sales to joint ventures on normal trading terms
23,172
40,645
Sales to associates on normal trading terms
103,248
88,753
Purchases from joint ventures on normal trading terms
463,030
482,267
Purchases from associates on normal trading terms
76,185
97,844
Amounts due from joint ventures
3,899
36,986
Amounts due from associates
7,804
8,745
Amounts due to joint ventures
30,240
17,609
Amounts due to associates
1,219
7,161
1. The fellow subsidiary undertaking is Fortnum and Mason plc.
2. The company with common key management personnel is the George Weston Limited group, in Canada.
Prior year amounts due from joint ventures included £32m (£4m of which was current) of finance lease receivables (see note 15)
and the remainder was trading balances. In the current year all amounts due are trading balances.
29. Group entities
Control of the Group
The Garfield Weston Foundation (‘the Foundation’) is an English charitable trust established in 1958 by the late W. Garfield Weston.
The Foundation has no direct interest in the Company, but at 14 September 2024 was the beneficial owner of 683,073 shares
(2023 – 683,073 shares) in Wittington Investments Limited (‘Wittington’) representing 79.2% (2023 – 79.2%) of that company’s
issued share capital and the Foundation is therefore the Company’s ultimate controlling party. At 14 September 2024, the trustees
of the Foundation comprised nine grandchildren of the late W. Garfield Weston of whom five are children of the late Garry H. Weston.
The largest group in which the results of the Company are consolidated is that headed by Wittington, the accounts of which are
available at Companies House, Crown Way, Cardiff CF14 3UZ. It is the ultimate holding company, is incorporated in Great Britain and
is registered in England.
At 14 September 2024, Wittington, together with its subsidiary Howard Investments Limited, held 421,243,985 ordinary shares
(2023 – 431,515,108) representing in aggregate 56.6% (2023 – 56.2%) of the total issued ordinary share capital of the Company.
Wittington, and through their control of Wittington, the trustees of the Foundation, are controlling shareholders of the Company.
Certain other individuals, including certain members of the Weston family who hold shares in the Company (and including two of the
Company’s directors, George Weston and Emma Adamo) are, under the UK Listing Rules, treated as acting in concert with Wittington
and the trustees of the Foundation and are therefore also treated as controlling shareholders of the Company. Wittington, the trustees
of the Foundation and these individuals together comprise the controlling shareholders of the Company and, at 14 September 2024,
have a combined interest in approximately 60.3% (2023 – 59.8%) of the Company’s voting rights. Information on the relationship
agreement between the Company and its controlling shareholders is set out on page 128 of the Directors’ Report.
Associated British Foods plc | 195 | Annual Report 2024
29. Group entities continued
Subsidiary undertakings
A list of the Group’s subsidiaries as at 14 September 2024 is given below. The entire share capital of subsidiaries is held within the
Group except where ownership percentages are shown. These percentages give the Group’s ultimate interest and therefore allow
for situations where subsidiaries are owned by partly owned intermediate subsidiaries. Where subsidiaries have different classes of
shares, this is largely for historical reasons and the effective percentage holdings given represent both the Group’s voting rights and
equity holding. Shares in ABF Investments plc and ABF Investments (No. 2) Limited are held directly by Associated British Foods plc.
All other holdings in subsidiaries are owned by members of the Associated British Foods plc group. All subsidiaries are consolidated
in the Group’s financial statements.
United Kingdom
England & Wales
Weston Centre, 10 Grosvenor Street, London, W1K 4QY
A.B. Exploration Limited
A.B.F.Holdings Limited
A.B.F. Nominees Limited
A.B.F. Properties Limited
AB Agri Limited
AB Foods Australia Limited
AB Ingredients Limited (dissolved 8 October 2024)
AB Mauri (UK) Limited
AB Mauri China Limited
AB Mauri Europe Limited
AB Sugar China Holdings Limited
AB Sugar China Limited
AB Sugar China North Limited (dissolved 29 October 2024)
AB Technology Limited (dissolved 8 October 2024)
AB World Foods (Holdings) Limited
AB World Foods Limited
ABF (No.1) Limited
ABF (No.2) Limited
ABF (No.3) Limited
ABF BRL Finance Ltd
ABF Energy Limited
ABF Europe Finance Limited
ABF European Holdings Limited
ABF Finance Limited
ABF Food Tech Investments Limited
ABF Funding
ABF Grain Products Limited
ABF Green Park Limited
ABF Grocery Limited
ABF HK Finance Limited
ABF Ingredients Limited
ABF Investments (No.2) Limited
ABF Investments plc
ABF Japan Limited
ABF MXN Finance Limited
ABF Overseas Limited
ABF PM Limited
ABF UK Finance Limited
ABF ZMW Finance Limited
ABN (Overseas) Limited
ABNA Feed Company Limited
ABNA Limited
Acetum (UK) Limited
Agrilines Limited
Subsidiary undertakings
% effective
holding if not
100%
Allied Bakeries Limited
Allied Grain (Scotland) Limited
Allied Grain (South) Limited
Allied Grain (Southern) Limited
Allied Grain Limited
Allied Mills (No.1) Limited
Allied Mills Limited
Allinson Limited
Associated British Foods Pension Trustees Limited
Atrium 100 Properties Limited
Atrium 100 Stores Holdings Limited
Atrium 100 Stores Limited
B.E. International Foods Limited
Banbury Agriculture Limited
British Sugar (Overseas) Limited
British Sugar plc
BSO (China) Limited
Capsicana Ltd
Cereform Limited
Dairy Consulting Limited
Davjon Food Limited
Dorset Cereals Limited
Eastbow Securities Limited
Elsenham Quality Foods Limited
Fishers Feeds Limited
Fishers Seeds & Grain Limited
Food Investments Limited
G. Costa (Holdings) Limited
G. Costa and Company Limited
Germain's (U.K.) Limited
Greencoat Farm Limited
Greencoat Limited
H 5 Limited
Illovo Sugar Africa Holdings Limited
John K. King & Sons Limited
Kingsgate Food Ingredients Limited
KO2 Limited
LeafTC Limited
Mauri Products Limited
Mountsfield Park Finance Limited
Natural Vetcare Limited
Nutrition Trading (International) Limited
Nutrition Trading Limited
Patak (Spices) Limited
Patak Food Limited
Patak's Breads Limited
Patak's Foods 2008 Limited
Subsidiary undertakings
% effective
holding if not
100%
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 196 | Annual Report 2024
Premier Nutrition Products Limited
Pride Oils Public Limited Company
Primark (U.K.) Limited
Primark Austria Limited
Primark Mode Limited
Primark Stores Limited
Primark US Holdings Limited (previously ABF US Holdings
Limited)
Primary Diets Limited
Pro-Active Nutrition Limited
Proper Nutty Limited
R. Twining and Company Limited
Reflex Nutrition Limited
Roses Nutrition Ltd
Seedcote Systems Limited
Shep-Fair Products Limited
Spectrum Aviation Limited
Speedibake Limited
Sunblest Bakeries Limited
The Billington Food Group Limited
The Home Grown Sugar Company Limited
The Jordans & Ryvita Company Limited
The Natural Sweetness Company Limited
The Roadmap Company Limited
The Silver Spoon Company Limited
Tip Top Bakeries Limited
Trident Feeds Limited
Twining Crosfield & Co Limited
Vivergo Fuels Limited
W. Jordan & Son (Silo) Limited
W.Jordan (Cereals) Limited
Wereham Gravel Company Limited (The)
Westmill Foods Limited
Weston Biscuit Company Limited (The)
Weston Foods Limited
Weston Research Laboratories Limited
Worldwing Investments Limited
Fox Talbot House, Unit 4 Greenways Business Park,
Bellinger Close, Chippenham, Wiltshire, SN15 1BN
National Livestock Records Limited
National Milk Records Limited
National Milk Records Trustee Company Limited
Nordic Star Ltd
Bright Street, Leigh, WN7 5QH
Romix Foods Limited
Romix Nutrition Limited
Northern Ireland
1 College Place North, Belfast, BT1 6BG
James Neill, Limited
Unit 4, 211 Castle Road, Randalstown, Co. Antrim, BT41
2EB
Jordan Bros. (N.I.) Limited
Nutrition Services (International) Limited
Vistavet Limited
Scotland
180 Glentanar Road, Glasgow, G22 7UP
ABN (Scotland) Limited
Subsidiary undertakings
% effective
holding if not
100%
32 Kelvin Avenue, Hillington Park, Glasgow, G52 4LT
National Milk Laboratories Limited
Miller Samuel LLP, RWF House, 5 Renfield Street, Glasgow,
G2 5EZ
Korway Foods Limited
Korway Holdings Limited
Patak's Chilled Foods Limited
Patak's Frozen Foods Limited
Argentina
Mariscal Antonio José de Sucre 632, 2nd Floor, Buenos
Aires 1428, Argentina
AB Mauri Hispanoamerica S.A.
Compañía Argentina De Levaduras S.A.I.C.
Australia
170 South Gippsland Highway, Dandenong VIC 3175,
Australia
ABF Wynyard Park Limited Partnership
35-37 South Corporate Avenue, Rowville, VIC 3178, Australia
AB Food & Beverages Australia Pty Limited
Building A, Level 2, 11 Talavera Road, North Ryde, NSW
2113, Australia
AB Mauri Overseas Holdings Limited
AB Mauri Pakistan Pty Limited
AB Mauri ROW Holdings Pty Limited
AB Mauri South America Pty Limited
AB Mauri South West Asia Pty Limited
AB Mauri Technology & Development Pty Limited
AB Mauri Technology Pty Limited
AB World Foods Pty Ltd
Anzchem Pty Limited
Artisanal Finance Pty Ltd
Artisanal Holdings Pty Ltd
Artisanal Operations Pty Ltd
AusPac Ingredients Pty Ltd
Brasserie Bread Operations Pty Ltd
CCD Animal Health Pty Ltd
Food Investments Pty. Limited
George Weston Foods (Victoria) Pty Ltd
George Weston Foods Limited
Indonesian Yeast Company Pty Limited
Mauri Fermentation Brazil Pty Limited
Mauri Fermentation Chile Pty Limited
Mauri Fermentation China Pty Limited
Mauri Fermentation India Pty Limited
Mauri Fermentation Indonesia Pty Limited
Mauri Fermentation Malaysia Pty. Limited
Mauri Fermentation Philippines Pty Limited
Mauri Fermentation Vietnam Pty Limited
Mauri Yeast Australia Pty. Limited
N&C Enterprises Pty. Ltd
Noisette Bakery Pty Ltd
Noisette Bakery Unit Trust
Noisette Retail Pty Ltd
Serrol Ingredients Pty Limited
The Jordans and Ryvita Company Australia Pty Ltd
Yumi’s Quality Foods Pty Ltd
Subsidiary undertakings
% effective
holding if not
100%
Associated British Foods plc | 197 | Annual Report 2024
29. Group entities continued
Austria
Annagasse 6/3. OG, 1010 Vienna, Austria
Primark Austria Ltd & Co KG
Krottenbachstrasse 82-88/Stg 1/Top 5, 1190 Vienna, Austria
Nutrilabs GmbH
Bangladesh
Level 13, Shanta Western Tower, Bir Uttam Mir Shawkat
Road, 186 Tejgaon I/A, Dhaka 1208, Bangladesh
Twinings Ovaltine Bangladesh Limited
Belgium
Chaussée de la Hulpe 177/20, 1170 Bruxelles, Belgium
Primark SA
Industriepark 2d, 9820 Merelbeke, Belgium
AB Mauri Belgium NV
Brazil
Avenida Dra. Ruth Cardoso, no. 7.221, 11th Floor, Room
1.101 (parte), Condomínio Edifício Birmann 21, Pinheiros,
CEP 05425-902, City of São Paulo, State of São Paulo, Brazil
AB Enzimas Brasil Comercial Ltda
AB Vista Brasil Comércio De Alimentação Animal Ltda
Avenida Tietê, L-233 Barranca do Rio Tietê, City of
Pederneiras, State of São Paulo, CEP 17.280-000, Brazil
AB Mauri Brasil Ltda. (previously AB Brasil Indústria e
Comércio de Alimentos Ltda.)
Canada
Blake, Cassels & Graydon LLP, 199 Bay Street, Suite 4000,
Toronto, Ontario M5L 1A9, Canada
AB Mauri (Canada) Limited
Chile
Miraflores Street No. 222, 28th Floor, Santiago, Chile
Calsa Chile Inversiones Limitada
China
1 Industrial North Street, Zhangjiakou, Zhangbei County,
Hebei Province, China
Hebei Mauri Food Co., Ltd.
14 Juhai Road, Jinghai Development Zone, Tianjin, China
ABNA (Tianjin) Feed Co., Ltd.
145 Xincheng Road, Tengao Economic Development Zone,
Anshan, Liaoning 114225, China
ABNA Feed (Liaoning) Co., Ltd.
17 Xiangyang Street, Tu Township, Chayouqianqi, Inner
Mongolia, China
Botian Sugar Industry (Chayou Qianqi) Co., Ltd.
8 Lancun Road, Economic and Technical Development Zone,
Minhang, Shanghai 200245, China
Shanghai AB Food & Beverages Co., Ltd.
868 Yongpu Road, Pujiang Town, Minhang District, Shanghai
201112, China
ABNA (Shanghai) Feed Co., Ltd.
Building 1, 35 Chi Feng Road, Yangpu District, Shanghai,
200092, China
AB Mauri Foods (Shanghai) Company Limited
90%
Chuangxin Road, Tonggu Industry Zone, Sandu Town,
Tonggu County, Jiangxi Province, China
AB Agri Pumeixin Tech (Jiangxi) Co., Ltd.
No 28, South Shunjin Road, Yintai District, Tongchuan,
Shaanxi Province, China
AB Agri Animal Nutrition (Shaanxi) Co., Ltd.
Subsidiary undertakings
% effective
holding if not
100%
No. 1 Botian Road, Economic Development Zone, Zhangbei
County, Zhangjiakou City, Hebei Province, China
Botian Sugar Industry (Zhangbei) Co., Ltd.
No. 1 Tongcheng Street, A Cheng District, Harbin,
Heilongjiang Province, China
AB (Harbin) Food Ingredients Co., Ltd. (in liquidation)
No. 68-1, Shuanglong Road, Fushan District, Yantai City,
Shandong Province, China
Yantai Mauri Yeast Co., Ltd.
92%
North Huang He Road, Rudong Economic Development
District, Nantong City, Jiangsu Province, China
AB Agri Animal Nutrition (Nantong) Co., Ltd.
AB Agri Animal Nutrition (Rudong) Co., Ltd.
Room 1110, No. 368, Changjiang Road, Nangang
Concentrated District, Economic Development Zone, Harbin,
China
Botian Sugar Industry Co., Ltd.
Room 2802, Raffles City Changning, No.1189 Changning
Road, Changning District, Shanghai, 200051, China
AB Enzymes Trading (Shanghai) Co., Ltd.
Unit 03, 28th Floor (actual 24th) of Qiantan Xinde Center, No.
18, Lane 666, Haiyang West Road, China (Shanghai) Pilot
Free Trade Zone, China
ABNA Management (Shanghai) Co., Ltd.
ABNA Trading (Shanghai) Co., Ltd.
Room 2906, Raffles City Changning, No. 1189 Changning
Road, Changning District, Shanghai, 200051 China
Associated British Foods Holdings (China) Co., Ltd
Room 7-1068, No. 68 Shijiu Hubei Road, Chunxi Street,
Gaochun District, Nanjing City, Jiangsu Province, China
AB Agri Pumeixin Tech (Jiangsu) Co., Ltd.
Shu Shan Modern Industrial Zone of Shou County, Huainan
City, Anhui Province, China
ABNA Feed (Anhui) Co., Ltd.
Room 2401, No. 2461, 24th Floor, No. 77 Jianguo Road,
Chaoyang District, Beijing, China
AB Mauri (Beijing) Food Sales and Marketing Company
Limited
Colombia
Carrera 35 No. 34A – 64, Palmira, Valle del Cauca, Colombia
Fleischmann Foods S.A.
Czech Republic
Nadrazní 523, 349 01 Stribro, Czech Republic
Bodit Tachov s.r.o.
Palladium, Na Porici 1079/3a, Prague 1, 110 00, Czech
R
bli
Primark Prodejny s.r.o.
Denmark
Middelfartvej 77, Baaring, 5466 Asperup, Denmark
Cowconnect ApS
Skjernvej 42, Troestrup, 6920 Videbæk, Denmark
AB Neo A/S
Ecuador
Medardo Ángel Silva 13 y Panamá, Manzana 12, El Recreo,
Eloy Alfaro, Durán, Guayas, Ecuador
ABCALSA S.A.
Subsidiary undertakings
% effective
holding if not
100%
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 198 | Annual Report 2024
Eswatini
Ubombo Sugar Limited, Old Main Road, Big Bend, Eswatini
Bar Circle Ranch Limited
60%
Illovo Swaziland Limited
60%
Moyeni Ranch Limited
60%
Ubombo Sugar Limited
60%
Finland
Koskelontie 19 B, Espoo, FI-02920, Finland
AB Vista Finland Oy
Alimetrics Research Oy
Tykkimäentie 15b (PO Box 57), Rajamäki, FI-05201, Finland
AB Enzymes Finland Oy (previously Roal Oy)
France
2 Rue des Moulins, 75001 Paris, France
ABFI France SAS
25 Rue Anatole France, 92300 Levallois-Perret, France
Twinings & Co SAS
40/42, Avenue Georges Pompidou, 69003 Lyon, France
AB Mauri France SAS
845 Chemin du Vallon du Maire, 13240 Septemes les
Vallons, France
SPI Pharma SAS
Centre Commercial Régional Créteil Soleil, Niveau 3, 101
Avenue du Général de Gaulle, 94000 Créteil, France
Primark France SAS
ZAE Via Europa, 3 Rue d'Athènes, 34350 Vendres, France
Fytexia SAS
Fytexia Group SAS
Germany
Feldbergstrasse 78, 64293, Darmstadt, Germany
AB Enzymes GmbH
Hausinger Strasse 4-8, 40764, Langenfeld, Germany
Vital Solutions GmbH
Kennedyplatz 2, 45127, Essen, Germany
Primark Mode Ltd. & Co. KG
Primark Property GmbH
Marie-Kahle-Allee 2, D-53113, Bonn, Germany
Westmill Foods Europe GmbH
Schauenburgerstrasse 116, 24118, Kiel, Germany
IFCN AG
Wandsbeker Zollstrasse 59, 22041, Hamburg, Germany
ABF Deutschland Holdings GmbH
Ohly GmbH
Ohly Grundbesitz GmbH
Rheinische Presshefe- und Spritwerke GmbH
Westendstrasse 28, 60325, Frankfurt am Main, Germany
Wander GmbH
Greece
28, Dimitriou Soutsou Str, Athens, GR 115 21, Greece
PSH Teal Single Member S.A.
Guernsey
Dorey Court, Admiral Park, St. Peter Port, GY1 2HT, Guernsey
Talisman Guernsey Limited
Subsidiary undertakings
% effective
holding if not
100%
Hong Kong
5/F, Manulife Place, 348 Kwun Tong Road, Kowloon, Hong Kong
Associated British Foods Asia Pacific Holdings Limited
Hungary
Károlyi utca 12. 3. em., Budapest, 1053, Hungary
Primark Üzletek Korlátolt Felelősségű Társaság (Primark
Üzletek Kft.)
India
Plot No. 218 & 219, Bommassandra Jigani Link Road,
Rajapura Hobli, Jigani Anekal Taluk, Bengaluru, Karnataka,
560105, India
AB Mauri India Private Limited
First Floor, Regent Sunny Side, 80 Ft Road, 8th Block,
Koramangala Bengaluru, Karnataka, 560030, India
SPI Specialties Pharma Private Limited
G3/41, New Budge Budge Trunk Road, Old Dakghar,
Kolkata, West Bengal, 700141, India
Twinings Private Limited
Indonesia
Wisma GKBI Lt.39, Suite 3901, No.28 Jl. Jend, Sudirman,
Jakarta, Indonesia
PT AB Food & Beverages Indonesia (in liquidation)
Ireland
1 Stokes Place, St. Stephen’s Green, Dublin 2, Ireland
Allied Mills Ireland Limited
13 Classon House, Dundrum Business Park, Dundrum,
Dublin 14, D14 W9Y3, Ireland
Nutritional Advanced Formulas (Ireland) Limited
47 Mary Street, Dublin 1, Ireland
Abdale Finance Limited
Primark Holdings Unlimited Company
Primark Pension Trustees Limited
Arthur Ryan House, 22-24 Parnell Street, Dublin 1, Ireland
Primark Austria Limited
Primark Handel Limited
Primark Limited
Primark Mode Limited
Unit 5, Hebron House, Macdonagh Junction, Kilkenny, R95
T91Y, Ireland
Intellync Technology Limited
Italy
Via Gran Sasso, 33, Corbetta, 20011, Milan, Italy
B Natural S.r.l.
Via Milano 42, 27045, Casteggio, (Pavia), Italy
AB Mauri Italy S.p.A.
ABF Italy Holdings S.r.l.
Via Rizzotto 46, 41126, Modena (MO), Italy
Acetaia Fini Modena S.r.l.
Via Sandro Pertini 440, 41032, Cavezzo (MO), Italy
Acetum S.p.A. Società Benefit
Viale Monte Nero, 84, 20135, Milan, Italy
AB Agri Italy S.r.l.
Via Pantanaccio, SNC., 04100, Latina, Italy
Mapo S.r.l.
Largo Francesco Richini 2/A, 20122, Milan, Italy
Primark Italy S.r.l.
Subsidiary undertakings
% effective
holding if not
100%
Associated British Foods plc | 199 | Annual Report 2024
29. Group entities continued
Japan
36F Atago Green Hills Mori Tower, 2-5-1 Atago, Minato-ku,
Tokyo 105-6236, Japan
Twinings Japan Co Ltd
50%
Malawi
Illovo House, Churchill Road, Limbe, Malawi
Dwangwa Sugar Corporation Limited
76%
Illovo Sugar (Malawi) Plc
76%
Malawi Sugar Limited
Malaysia
Unit 30-01, Level 30, Tower A, Vertical Business Suite,
Avenue 3, Bangsar South, No. 8, 59200 Jalan Kerinchi, Kuala
Lumpur, Malaysia
AB Mauri Malaysia Sdn. Bhd.
52%
Malta
171 Old Bakery Street, Valletta, VLT 1455, Malta
Relax Limited
70%
Mauritius
10th Floor, Standard Chartered Tower, 19 Cybercity, Ebene,
Mauritius
Illovo Group Financing Services
Illovo Group Holdings Limited
Illovo Group Marketing Services Limited
Kilombero Holdings Limited
Sucoma Holdings Limited
Mexico
Avenida Javier Barros Sierra 495, Piso 7, Oficina 07-102, Col.
Santa Fe, Alvaro Obregón, Ciudad de México, 01219,
México
ACH Foods Mexico, S. de R.L. de C.V.
Paseo de la Reforma 1015, Piso 6, Suite/Oficina 06W123,
Colonia Lomas de Santa Fe, Delegación Cuajimalpa de
Morelos, Mexico City, 05348, Mexico
AB CALSA, S.A. de C.V.
Mozambique
KM75 EN1, Maçiana, Distrito de Manhiça, Provincia de
Maputo, Mozambique
Maragra Açucar, S.A.
Netherlands
7122 JS Aalten, Dinxperlosestraatweg 122, Netherlands
Germains Seed Technology B.V.
Laarderhoogtweg 25, 1101 EB Amsterdam, Netherlands
Westmill Foods Europe B.V.
Mijlweg 77, 3316 BE, Dordrecht, Netherlands
AB Mauri Netherlands B.V.
AB Mauri Netherlands European Holdings B.V.
Foods International Holding B.V.
Oude Kerkstraat 55 4878 AK, Etten-Leur, Netherlands
Mauri Technology B.V.
Van Oldenbarneveltplaats 36, 3012 AH, Rotterdam,
Netherlands
Primark Fashion B.V.
Primark Netherlands B.V.
Primark Stil B.V.
Weena 505, 3013AL Rotterdam, Netherlands
AB Vista Europe B.V.
Subsidiary undertakings
% effective
holding if not
100%
New Zealand
57 Forge Road, Silverdale 0932, New Zealand
Dad’s Pies Limited
Building 3, Level 2, Central Business Park, 666 Great South
Road, Ellerslie, Auckland 1051, New Zealand
AusPac Ingredients NZ Limited
Building 6, Level 2, Central Business Park, 666 Great South
Road, Ellerslie, Auckland 1051, New Zealand
Allied Foods (NZ) Limited
George Weston Foods (NZ) Limited
Nigeria
23 Oba Akinjobi Street, GRA, Ikeja, Lagos, Nigeria
Twinings Ovaltine Nigeria Limited
Pakistan
21KM Ferozepur Road, 2 KM Hadyara Drain, Lahore,
Pakistan
AB Mauri Pakistan (Private) Limited
60%
Peru
Av. Republica de Argentina No. 1227, Z.I. La Chalaca, Callao,
Peru
Calsa Perú S.A.C.
Philippines
1201-1202 Prime Land Building, Market Street, Madrigal
Business Park, Ayala Alabang, Muntinlupa, 1770, Philippines
AB Mauri Philippines, Inc.
86 E Rodriguez Jr. Ave., Ugong Norte, QC, 1604, Pasig City,
Metro Manila, Philippines
AB Food & Beverages Philippines, Inc.
99%
Poland
Przemysłowa 2, 67-100 Nowa Sól, Lubuskie, Poland
AB Foods Polska Spólka z ograniczona odpowiedzialnoscia
(AB Foods Polska Sp. z.o.o.)
Towarowa 28,00-839 Warsaw, Poland
Primark Sklepy Spólka z ograniczona odpowiedzialnoscia
(Primark Sklepy Sp. z.o.o)
ul. Główna 3A, Bruszczewo, 64-030, Śmigiel, Poland
AB Neo Polska Spólka z ograniczona odpowiedzialnoscia (AB
Neo Polska Sp. z.o.o)
ul. Rabowicka 29/31, 62-020, Swarzędz – Jasin, Poland
R. Twining and Company Spółka z ograniczona
odpowiedzialnoscia (R. Twining and Company Sp. z.o.o.)
Portugal
Avenida Salvador Allende, No. 99, Oeiras, Julião da Barra,
Paço de Arcos e Caxias, 2770-157, Paço de Arcos, Portugal
AB Mauri Portugal, S.A.
96%
Rua Castilho 50, 1250-071, Lisbon, Portugal
Lojas Primark Portugal - Exploração, Gestão e Administração
de Espacos Comerciais S.A.
Romania
District 1, 165 Calea Floreasca, One Tower, 12th Floor,
Bucharest, Romania
Primark Magazine S.R.L.
Rwanda
Nyarugenge District, Nyarugenge Sector, Kigali City, Rwanda
Illovo Sugar (Kigali) Limited
Subsidiary undertakings
% effective
holding if not
100%
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 200 | Annual Report 2024
Singapore
63 Chulia Street, OCBC Centre East, #15-01, 049514,
Singapore
AB Vista Asia Pte. Limited
9 Raffles Place, #26-01 Republic Plaza, 048619, Singapore
AB Mauri Investments (Asia) Pte Ltd
Slovakia
Staromestska 3, 811 03 Bratislava - Stare Mesto, Slovakia
Primark Slovakia s.r.o.
Slovenia
Bleiweisova cesta 30, Ljubljana, 1000, Slovenia
Primark Trgovine, trgovsko podjetje, d.o.o.
South Africa
1 Nokwe Avenue, Ridgeside, Umhlanga Rocks, Kwazulu
Natal, 4320, South Africa
CGS Investments (Pty) Limited
East African Supply (Pty) Limited
Glendale Sugar (Pty) Ltd
Illovo Distributors (Pty) Limited
Illovo Sugar (South Africa) Proprietary Limited
Illovo Sugar Africa Proprietary Limited
Illprop (Pty) Limited
Lacsa (Pty) Limited
70%
Noodsberg Sugar Company (Pty) Ltd
Reynolds Brothers (Pty) Ltd
S.A. Sugar Distributors (Pty) Limited
Spain
8, 2 Calle Via Servicio I, 2, 19190 Torija, Guadalajara, Spain
Primark Logística, S.L.U. Sociedad Unipersonal
Avienda Virgen de Montserrat 44, Castelloli, 08719,
Barcelona, Spain
Germains Seed Technology, S.A.
Calle Escultor Coomonte No. 2, Entreplanta, Benavente,
Zamora, Spain
Agroteo S.A.
53%
Calle Cardenal Marcelo Spínola, 42, Madrid, 28016, Spain
AB Azucarera Iberia, S.L. Sociedad Unipersonal
AB Vista Iberia, S.L.
Calle Comunidad de Murcia, Parcela LIE-1-03, Plataforma
Logística de Fraga, 22520, Huesca, Spain
Alternative Swine Nutrition, S.L.
Calle Escoles Pies 49, Planta Baja, 08017, Barcelona, Spain
DR Healthcare España, S.L.U.
Calle Levadura, 5, 14710, Villarrubia, Córdoba, Spain
AB Mauri Food, S.A
ABF Iberia Holding S.L.
Gran Vía 32, 5a Planta, 28013, Madrid, Spain
Primark Tiendas, S.L.U.
Plaza Pablo Ruiz Picasso S/N, Torre Picasso, Planta 37,
Madrid, Spain
Illovo Sugar España, S.L.
Sri Lanka
124 Templers Road, Mount Lavinia, Sri Lanka
AB Mauri Lanka (Private) Limited
Subsidiary undertakings
% effective
holding if not
100%
Sweden
Retzius väg 8, 171 65, Solna, Sweden
Larodan AB
Switzerland
Fabrikstrasse 10, CH-3176, Neuenegg, Switzerland
Wander AG
Taiwan
3F-1, No. 161, Sec 4, Nanking E Rd, Taipei City 104, Taiwan
(R.O.C.)
AB Food and Beverages Taiwan, Inc.
Tanzania
Msolwa Mill Office, Kidatu, Morogoro, Tanzania
Illovo Distillers (Tanzania) Limited
Illovo Tanzania Limited
Kilombero Sugar Company Limited
75%
Thailand
1 Empire Tower, 24th Floor, Unit 2412-2413, South Sathorn
Road, Yannawa, Sathorn, Bangkok, 10120, Thailand
AB World Foods Asia Ltd.
11th Floor, 2535 Sukhumvit Road, Kwaeng Bangchak, Khet
Prakhanong, Bangkok, 10260, Thailand
AB Food & Beverages (Thailand) Ltd.
ABF Holdings (Thailand) Ltd.
229/110 Moo 1, Teparak Road, T. Bangsaothong, A.
Bangsaothong, Samutprakarn, 10540, Thailand
Jasol Asia Pacific Limited (dissolved 20 September 2024)
Turkey
Aksakal Mahallesi, Kavakpinari, Kume Evleri No. 27,
Bandirma/Balikesir, 10245, Turkiye
Mauri Maya Sanayi A.S.
United Arab Emirates
Office 604A, Jafza LOB 15, Jebel Ali Freezone, Dubai, PO
BOX 17620, United Arab Emirates
AB Mauri Middle East FZE
United States of America
158 River Road, Unit A, Clifton, NJ 07014, United States
Modena Fine Foods, Inc.
158 River Road, Unit B, Clifton, NJ 07014, United States
Balsamic Express LLC
208 S. LaSalle Street, Suite 814, Chicago, IL 60604, United
States
Omega Yeast Labs, LLC
251 Little Falls Drive, Wilmington, DE 19808, United States
Fytexia Corp.
C T Corporation System, 155 Federal Street Suite 700,
Boston, MA 02110, United States
Primark GCM LLC
C T Corporation System, 330 N. Brand Blvd., Glendale, CA
91203, United States
Pennypacker, LLC
CT Corporation System, 818 West Seventh Street, Suite
930, Los Angeles CA 90017, United States
AB Mauri Food Inc.
The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington DE 19801, United States
AB Agri US, Inc.
Subsidiary undertakings
% effective
holding if not
100%
Associated British Foods plc | 201 | Annual Report 2024
29. Group entities continued
AB Enzymes, Inc.
AB Vista, Inc.
AB World Foods US, Inc.
ABF North America Corp.
ABF North America Holdings, Inc.
Abitec Corporation
ACH Capital Ventures, Inc.
ACH Food Companies, Inc.
ACH Jupiter LLC
BakeGood, LLC
Germains Seed Technology, Inc.
PGP International, Inc.
Primark US Corp.
Prosecco Source, LLC
SPI Pharma, Inc.
SPI Polyols, LLC
Twinings North America, Inc.
Uruguay
Carlos Antonio Lopez 7547, Montevideo, Uruguay
Levadura Uruguaya S.A.
Venezuela
Oficinas Once 3 (11-3) y Once 4 (11-4), Torre Mayupan, Av.
Principal San Luis, Urbanización San Luis, Caracas, Bolivarian
Republic of Venezuela
Alimentos Fleischmann, C.A.
Compañía de Alimentos Latinoamericana de Venezuela
(CALSA) S.A.
Vietnam
La Nga Commune, Dinh Quan District, Dong Nai Province,
Vietnam
AB Mauri Vietnam Limited
66%
Viettel Tower, Floor 6A2, 285 Cach Mang Thang Tam Str.,
Ward 12, District 10, HCMC, Vietnam
AB Agri Vietnam Company Limited
Zambia
Nakambala Estates, Plot No. 118a Lubombo Road, Off Great
North Road, Zambia
Illovo Sugar (Zambia) Limited
Nanga Farms Limited
75%
Zambia Sugar plc
75%
Subsidiary undertakings
% effective
holding if not
100%
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 202 | Annual Report 2024
Joint ventures
A list of the Group’s joint ventures as at 14 September 2024 is given below. All joint ventures are included in the Group’s financial
statements using the equity method of accounting.
United Kingdom
England & Wales
Weston Centre, 10 Grosvenor Street, London, W1K 4QY
Boothmans (Agriculture) Limited
50%
Forward Agronomy Limited
50%
Frontier Agriculture Limited
50%
G F P (Agriculture) Limited
50%
GH Grain (No.2) Limited
50%
GH Grain Limited
50%
Grain Harvesters Limited
50%
Intracrop Limited
50%
Nomix Limited
50%
North Wold Agronomy Limited
50%
Phoenix Agronomy Limited
50%
SOYL Limited
50%
The Agronomy Partnership Limited
50%
Berth 36, Test Road, Eastern Docks, Southampton,
Hampshire, SO14 3GG
Southampton Grain Terminal Limited
50%
C/o Nomix Enviro Limited, Witham St Hughs, Lincoln, LN6
9TN
Nomix Enviro Limited
50%
Northants Apc, Rushton Road, Kettering, NN14 1FL
Navara Oat Milling Limited
38%
Platinum Building Cowley Road, St John's Innovation Park,
Cambridge, CB4 0DS
Yagro Ltd
50%
Riverside, Wissington Road, Nayland, Colchester, Essex,
CO6 4LT
Anglia Grain Holdings Limited
50%
Anglia Grain Services Limited
50%
Unit 8, Burnside Business Park, Burnside Road, Market
Drayton, TF9 3UX
B.C.W. (Agriculture) Limited
50%
Scotland
Kingseat, Newmacher, Aberdeenshire, AB21 0UE
Euroagkem Limited
50%
Lothian Crop Specialists Limited
50%
Australia
Building A, Level 2, 11 Talavera Road, North Ryde, NSW
2113, Australia
Fortnum & Masons Pty Limited
33%
Chile
Ave. Balmaceda 3500, Valdivia, Chile
Levaduras Collico S.A.
50%
China
1 East Ren Min Road, Regiment 66, Cocodala, Xinjiang,
China
AB Mauri Yihai Kerry (Cocodala) Food Co., Ltd.
50%
Xinsha Industrial Zone, Machong Town, Dongguan,
Guangdong Province, China
AB Mauri Yihai Kerry (Dongguan) Food Co., Ltd.
50%
Ta Ha Comprehensive Industrial Park, Fuyu County
Economic Development Area, Qiqihar, Heilongjiang
Province, China
AB Mauri Yihai Kerry (Fu Yu) Yeast Technology Co., Ltd.
50%
Joint ventures
% holding
9 Tonggang Road, Shage Village, Nanpu Town, Quangang
Area, Quanzhou, Fujian Province, China
AB Mauri Yihai Kerry (Quanzhou) Yeast Technology Co., Ltd.
50%
Intersection of Jiaotong Avenue and Zhoushan Road, Gang
District, Zhoukou, Henan Province, China
AB Mauri Yihai Kerry (Zhoukou) Yeast Technology Co., Ltd.
50%
Room 608, 6th Floor, 1379, Bocheng Road, Pudong New
District, Shanghai, China
AB Mauri Yihai Kerry Food Marketing (Shanghai) Co., Ltd.
50%
Room 607, 6th Floor, 1379, Bocheng Road, Pudong New
District, Shanghai, China
AB Mauri Yihai Kerry Investment Company Limited
50%
1828 Tiejueshan Road, Huangdao District, Qingdao,
Shandong Province, China
Qingdao Xinghua Cereal Oil and Foodstuff Co., Ltd.
25%
France
59, Chemin du Moulin, 695701, Carron, Dardilly, France
Synchronis
50%
Germany
Brede 4, 59368, Werne, Germany
UNIFERM FI GmbH (previously INA Nahrmittel GmbH)
50%
UNIFERM GmbH & Co. KG
50%
UNIFERM Verwaltungs GmbH
50%
Brede 8, 59368, Werne, Germany
UNILOG GmbH
50%
Ireland
Rathcore Golf & Country Club, Rathcore, Co. Meath, A83
KP98, Ireland
Independent Milk Laboratories Limited
50%
Poland
ul. Wybieg, nr 5, lok 9, Miesjsc, KOD 61-315, Poznan, Poland
Uniferm Polska Sp. z.o.o.
50%
South Africa
1 Nokwe Avenue, Ridgeside, Umhlanga Rocks, Kwazulu
Natal 4320, South Africa
Glendale Distilling Company
50%
Spain
Calle Raimundo Fernández, Villaverde 28, Madrid, Spain
Compañía de Melazas, S.A. (in liquidation)
50%
United States of America
The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington DE 19801, United States
Stratas Foods LLC
50%
Stratas Receivables I LLC
50%
Joint ventures
% holding
Associated British Foods plc | 203 | Annual Report 2024
29. Group entities continued
Associates
A list of the Group’s associates as at 14 September 2024 is given below. All associates are included in the Group’s financial
statements using the equity method of accounting.
United Kingdom
England & Wales
Pacioli House, Duncan Close, Moulton Park Industrial Estate,
Northampton, NN3 6WL
Bakers Basco Limited
20%
Paternoster House, 65 St. Paul's Churchyard, London, EC4M
8AB
C. Czarnikow Limited
43%
C. Czarnikow Sugar Futures Limited
43%
C. Czarnikow Sugar Limited
43%
Czarnikow Group Limited
43%
Sugarworld Limited
43%
Australia
283 Flagstaff Rd, Murray Bridge SA 5253, Australia
Big River Pork Pty Ltd
20%
Murray Bridge Bacon Pty Ltd
20%
32 Davis Road, Wetherill Park, Sydney, NSW 2164, Australia
New Food Coatings Pty Ltd
50%
Bahrain
Suite No. 1959 Diplomatic Commercial Office, Tower B,
Building No. 1565, Road 1722, Diplomatic Area/Manama 317
Bahrain
Czarnikow Supply Chain Sales for Food & Beverage
Ingredients Bahrain W.L.L.
43%
Brazil
Av Dos Vinhedos, 71, Floor 11, Room 1101, Uberlandia,
Minas Gerais, Brazil
2C Energia S.A.
22%
Avenida Presidente Juscelino Kubitschek, 2041, Floor 11,
Vila Olímpia, CEP 04.543-011, São Paulo/SP, Brazil
Cz Energy Comercializadora De Etanol S.A.
21%
Czarnikow Brasil Ltda
43%
China
Rm 1105-1106 , 181 Yanjiang West Road, Yuexiu,
Guangzhou, Guangdong, 510120, China
C. Czarnikow Sugar (Guangzhou) Company Ltd.
43%
Colombia
Edificio Nova Tempo, Oficina 309, Carrera 43A No. 14 - 109,
Av. El Poblado, El Poblado, Medellín, Antioquia, Colombia
Czarnikow Colombia S.A.S.
43%
India
House No. 1-8-373/A, Chiran Fort Lane, Begumpet,
Hyderabad, 500003, India
C. Czarnikow Sugar (India) Private Limited
43%
Indonesia
Komplex Puri Mutiara Blok A21-22, JL. Griya Utama, Sunter
Agung, Jakarta, 14350, Indonesia
P.T. Jaya Fermex
49%
PT Indo Fermex
49%
PT Sama Indah
49%
Israel
26, Harokmim st., Holon Azireli Center Building B, Israel
Sucarim (C.I.S.T.) Ltd
43%
Italy
Via Borgogna, 2-20122, Milan, Italy
Czarnikow Italia S.r.l.
43%
Associates
% holding
Kenya
I & M Bank House, Second Ngong Avenue, P.O. Box 10517,
Nairobi 00100, Kenya
Czarnikow East Africa Limited
43%
Mauritius
ENL House, Vivea Business Park, Moka, Mauritius
Sukpak Ltd
30%
Mexico
Jaime Balmes #8 Loc. 3-A , Los Morales Polanco, México
City, 11510, Mexico
C. Czarnikow Sugar (Mexico), S.A. de C.V.
43%
New Zealand
27D Smales Road, East Tamaki, Auckland, 2013, New Zealand
New Food Coatings (New Zealand) Limited
50%
Philippines
5F Don Jacinto Building, Dela Rosa cor. Salcedo Streets,
Legaspi Village, 1229 Makati City, Philippines
CZ Philippines, Inc.
43%
Unit A, 103 Excellence Avenue, Carmelray Industrial Park 1,
Canlubang, Calamba, Laguna, Philippines
New Food Coatings (Philippines), Inc.
50%
Singapore
3 Phillip Street, #14-01 Royal Group Building, 048693,
Singapore
C. Czarnikow Sugar Pte. Limited
43%
Tanzania
7th Floor, Amani Place, Ohio Street, PO Box 38568, Dar-es-
Salaam, Tanzania
Czarnikow Tanzania Limited
43%
Msolwa Mill Office, Kidatu, Morogoro, Tanzania
Kilombero Sugar Distributors Limited
20%
Thailand
1203, 12th Floor, Metropolis Building, 725 Sukhumvit Road,
North Klongton, Wattana, Bangkok, 10110, Thailand
Czarnikow (Thailand) Limited
43%
909 Moo 15, Teparak Road, Tambol Bangsaothong, King
Amphur Bangsaothong, Samutprakarn, Thailand
Newly Weds Foods (Thailand) Ltd
50%
Uganda
Coral Criscent, Kololo IV, Central Division, Kampala, Central,
Uganda
Czarnikow Uganda Limited
43%
United States of America
333 SE 2nd Avenue, Suite 2860, Miami, FL 33131, United
States
C. Czarnikow Sugar Inc.
43%
Vietnam
14th Floor, Tower 1, Saigon Center Building, 65 Le Loi, Ben
Nghe Ward, District 1, Ho Chi Minh City, Vietnam
Czarnikow (Vietnam) Limited
43%
Associates
% holding
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 204 | Annual Report 2024
In accordance with section 479A of the Companies Act 2006 (the ‘Act’), and subject to compliance with the requirements of that
section including the provision of a statutory guarantee from Associated British Foods plc, the following subsidiaries are exempt from
the requirements of the Act relating to the audit of individual accounts in respect of the financial year ended 14 September 2024:
Company name
Company number
Company name
Company number
A.B. Exploration Limited
00487323
A.B.F. Properties Limited
00683361
AB Mauri China Limited
12109070
ABF UK Finance Limited
07267422
AB Mauri Europe Limited
02883738
ABF ZMW Finance Limited
13485724
AB Sugar China Holdings Limited
09468366
ABN (Overseas) Limited
00145374
AB Sugar China Limited
09469163
Atrium 100 Properties Limited
04502487
ABF (No.1) Limited
04668120
Atrium 100 Stores Holdings Limited
04660969
ABF (No.2) Limited
03369799
Atrium 100 Stores Limited
05007953
ABF (No.3) Limited
00155305
British Sugar (Overseas) Limited
02400085
ABF BRL Finance Ltd
11001902
BSO (China) Limited
03799608
ABF Finance Limited
04659735
G. Costa (Holdings) Limited
03679738
ABF Food Tech Investments Limited
00172141
Mountsfield Park Finance Limited
07882348
ABF Funding
05380813
Primark Austria Limited
07770764
ABF HK Finance Limited
07761084
Primark US Holdings Limited
05659249
ABF Japan Limited
00492278
Twining Crosfield & Co Limited
00144900
ABF PM Limited
00486887
Worldwing Investments Limited
02778854
Associated British Foods plc | 205 | Annual Report 2024
30. Alternative performance measures
In reporting financial information, the Board uses various APMs which it believes provide useful additional information for
understanding the financial performance and financial health of the Group. These APMs should be considered in addition to IFRS
measures and are not intended to be a substitute for them. Since IFRS does not define APMs, they may not be directly comparable
to similar measures used by other companies.
The Board also uses APMs to improve the comparability of information between reporting periods and geographical units (such as
like-for-like sales) by adjusting for non-recurring or uncontrollable factors which affect IFRS measures, to aid users in understanding
the Group’s performance.
Consequently, the Board and management use APMs for performance analysis, planning, reporting and incentive-setting.
APM
Closest equivalent
IFRS measure
Definition/purpose
Reconciliation/calculation
Like-for-like sales
No direct
equivalent
The like-for-like sales metric enables measurement of the
performance of our retail stores on a comparable year-on-year
basis.
This measure represents the change in sales at constant
currency in our retail stores adjusted for new stores, closures and
relocations. Refits, extensions and downsizes are also adjusted
for if a store’s retail square footage changes by 10% or more. For
each change described above, a store’s sales are excluded from
like-for-like sales for one year.
No adjustments are made for disruption during refits, extensions
or downsizes if a store’s retail square footage changes by less
than 10%, for cannibalisation by new stores, or for the timing of
national or bank holidays.
It is measured against comparable trading days in each year.
Consistent with the
definition given
Adjusted operating
profit
Operating profit
Adjusted operating profit is stated before amortisation of non-
operating intangibles, transaction costs, amortisation of fair value
adjustments made to acquired inventory, profits less losses on
disposal of non-current assets and exceptional items.
Items defined above which arise in the Group’s joint ventures
and associates are also treated as adjusting items for the
purposes of Adjusted operating profit.
A reconciliation of this
measure is provided
on the face of the
consolidated income
statement and by
operating segment in
note 1 of the financial
statements
Adjusted operating
(profit) margin
No direct
equivalent
Adjusted operating (profit) margin is Adjusted operating profit as
a percentage of revenue.
See note A
Adjusted profit
before tax
Profit before tax
Adjusted profit before tax is stated before amortisation of non-
operating intangibles, transaction costs, amortisation of fair value
adjustments made to acquired inventory, profits less losses on
disposal of non-current assets, profits less losses on sale and
closure of businesses and exceptional items.
Items defined above which arise in the Group’s joint ventures
and associates are also treated as adjusting items for the
purposes of Adjusted profit before tax.
A reconciliation of this
measure is provided
on the face of the
consolidated income
statement and by
operating segment in
note 1 of the financial
statements
Adjusted earnings
and Adjusted
earnings per share
Earnings and
earnings per
share
Adjusted earnings and Adjusted earnings per share are stated
before amortisation of non-operating intangibles, transaction
costs, amortisation of fair value adjustments made to acquired
inventory, profits less losses on disposal of non-current assets,
profits less losses on sale and closure of businesses and
exceptional items, together with the related tax effect.
Items defined above which arise in the Group’s joint ventures
and associates are also treated as adjusting items for the
purposes of Adjusted earnings and Adjusted earnings per share.
Reconciliations of these
measures are provided
in note 7 of the financial
statements
Exceptional
items
No direct
equivalent
Exceptional items are items of income and expenditure which are
significant and unusual in nature and are considered of such
significance that they require separate disclosure on the face of
the income statement.
Exceptional items are
included on the face of
the consolidated income
statement with further
detail provided in note
2 of the financial
statements
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 206 | Annual Report 2024
APM
Closest equivalent
IFRS measure
Definition/purpose
Reconciliation/calculation
Constant
currency
Revenue and
Adjusted
operating
profit (non-
IFRS) measure
Constant currency measures are derived by translating the
relevant prior year figures at current year average exchange
rates, except for countries where CPI has escalated to extreme
levels, in which case actual exchange rates are used. There are
currently three countries where the Group has operations in this
position – Argentina, Venezuela and Turkey.
See note B
Effective tax rate
No direct
equivalent
This measure is the tax charge for the year expressed as a
percentage of profit before tax.
Whilst the Effective tax
rate is not disclosed, a
reconciliation of the tax
charge on profit before
tax at the UK corporation
tax rate to the actual tax
charge is provided in
note 5 of the financial
statements
Adjusted effective
tax rate
No direct
equivalent
This measure is the tax charge for the year excluding tax on
adjusting items expressed as a percentage of Adjusted profit
before tax.
The tax impact of
reconciling items
between profit before
tax and Adjusted profit
before tax is shown in
note 7 of the financial
statements
Dividend cover
No direct
equivalent
Dividend cover is the ratio of Adjusted earnings per share to
dividends per share relating to the year.
See note C
Capital expenditure
No direct
equivalent
Capital expenditure is a measure of investment in non-current
assets in existing businesses. It comprises cash outflows from
the purchase of property, plant and equipment and intangibles.
See note D
Gross investment
No direct
equivalent
Gross investment is a measure of investment in non-current
assets in existing businesses and acquisition of new businesses.
It comprises capital expenditure, cash outflows from the
purchase of subsidiaries, joint ventures and associates, additional
shares in subsidiary undertakings purchased from non-controlling
interests and other investments.
See note E
Net cash/debt
before lease
liabilities
No direct
equivalent
This measure comprises cash, cash equivalents and overdrafts,
current asset investments and loans.
A reconciliation of this
measure is shown in
note 25 of the financial
statements
Net cash/debt
including lease
liabilities
No direct
equivalent
This measure comprises cash, cash equivalents and overdrafts,
current asset investments, loans and lease liabilities.
A reconciliation of this
measure is shown in
note 25 of the financial
statements
Adjusted EBITDA
Adjusted
operating
profit
(non-IFRS)
measure
Adjusted EBITDA is stated before depreciation, amortisation and
impairments charged to Adjusted operating profit.
See note F
Financial leverage
ratio
No direct
equivalent
Financial leverage is the ratio of net cash/debt including lease
liabilities to Adjusted EBITDA.
See note F
Associated British Foods plc | 207 | Annual Report 2024
30. Alternative performance measures continued
APM
Closest equivalent
IFRS measure
Definition/purpose
Reconciliation/calculation
Free cash flow
No direct
equivalent
This measure represents the cash that the Group generates from
its operations after maintaining and investing in its capital assets.
All the items below Adjusted EBITDA can be found on the face of
the cash flow statement or derived directly from it.
Working capital comprises the movements in inventories,
receivables and payables within net cash generated from
operating activities.
Net interest paid is the sum of interest received within net cash
used in investing activities and interest paid within net cash used
in financing activities.
Share of adjusted profit after tax from joint ventures and
associates is the amount on the face of the cash flow statement,
plus the £3m (2023 – £3m) non-operating intangible amortisation
which is not included in Adjusted EBITDA.
Other includes all other items from net cash generated from
operating activities and net cash used in investing activities
except for the purchase and sale of subsidiaries, joint ventures
and associates, plus dividends paid to non-controlling interests
and the movement from changes in own shares held.
See note G
Total liquidity
No direct
equivalent
Total liquidity comprises cash, cash equivalents and current asset
investments, less non-qualifying borrowings and an estimate of
inaccessible cash, plus the qualifying credit facilities.
Cash, cash equivalents and current asset investments are set out
in note 18.
Non-qualifying borrowings are current loans and overdrafts and
any non-current borrowings that are uncommitted or that contain
covenants that could be breached in a severe downside scenario.
Current loans and overdrafts are set out in note 19.
Inaccessible cash is generally located in jurisdictions where there
is limited access to foreign currency or where there are exchange
controls. It is estimated at 5% of cash and cash equivalents.
Qualifying credit facilities have a maturity of more than 18
months, are committed, and either contain no performance
covenants, or where they do, they are assessed as highly unlikely
to be breached even in a severe downside scenario. At 14
September 2024, this comprised the RCF.
See note H
(Average) capital
employed
No direct
equivalent
Capital employed is derived from the management balance sheet
and does not reconcile directly to the statutory balance sheet. All
elements are calculated in accordance with Adopted IFRS.
Average capital employed for each segment and for the Group is
calculated by averaging capital employed for each period of the
year based on the reporting calendar of each business.
Consistent with the
definition given
Return on (average)
capital employed
No direct
equivalent
This measure expresses Adjusted operating profit as a
percentage of Average capital employed.
Consistent with the
definition given
(Average) working
capital
No direct
equivalent
Working capital is derived from the management balance sheet
and does not reconcile directly to the statutory balance sheet. All
elements are calculated in accordance with Adopted IFRS.
Average working capital for each segment and for the Group is
calculated by averaging working capital for each period of the
year based on the reporting calendar of each business.
Consistent with the
definition given
(Average) working
capital as a
percentage of
revenue
No direct
equivalent
This measure expresses (Average) working capital as a
percentage of revenue.
Consistent with the
definition given
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 208 | Annual Report 2024
Note A
Retail
Grocery
Ingredients
Sugar
Agriculture
Central and
disposed
business
Total
£m
£m
£m
£m
£m
£m
£m
2024
External revenue from continuing businesses
9,448
4,242
2,134
2,529
1,650
70 20,073
Adjusted operating profit
1,108
511
233
199
41
(94)
1,998
Adjusted operating margin %
11.7%
12.1%
10.9%
7.9%
2.5%
10.0%
2023
External revenue from continuing businesses
9,008
4,198
2,157
2,474
1,840
73 19,750
Adjusted operating profit
735
448
214
179
41
(104)
1,513
Adjusted operating margin %
8.2%
10.7%
9.9%
7.2%
2.2%
7.7%
Note B
Retail
Grocery
Ingredients
Sugar
Agriculture
Central and
disposed
business
Total
£m
£m
£m
£m
£m
£m
£m
2024
External revenue from continuing businesses
at actual rates
9,448
4,242
2,134
2,529
1,650
70 20,073
2023
External revenue from continuing businesses
at actual rates
9,008
4,198
2,157
2,474
1,840
73 19,750
Impact of foreign exchange
(94)
(108)
(62)
(199)
(22)
(4)
(489)
External revenue from continuing businesses
at constant currency
8,914
4,090
2,095
2,275
1,818
69 19,261
% change at constant currency
+6%
+4%
+2%
+11%
-9%
+4%
Retail
Grocery
Ingredients
Sugar
Agriculture
Central and
disposed
business
Total
£m
£m
£m
£m
£m
£m
£m
2024
Adjusted operating profit at actual rates
1,108
511
233
199
41
(94)
1,998
2023
Adjusted operating profit at actual rates
735
448
214
179
41
(104)
1,513
Impact of foreign exchange
(3)
(13)
(6)
(43)
(1)
–
(66)
Adjusted operating profit at constant currency
732
435
208
136
40
(104)
1,447
% change at constant currency
+51%
+17%
+12%
+46%
+3%
+38%
Note C
2024
2023
Adjusted earnings per share (in pence)
196.9
141.8
Dividend relating to the period (in pence) - excluding special dividend proposed
63.0
47.3
Dividend cover
3
3
Note D
2024
2023
From the cash flow statement
£m
£m
Purchase of property, plant and equipment
1,124
997
Purchase of intangibles
60
76
Capital expenditure
1,184
1,073
Associated British Foods plc | 209 | Annual Report 2024
30. Alternative performance measures continued
Note E
2024
2023
From the cash flow statement
£m
£m
Purchase of property, plant and equipment
1,124
997
Purchase of intangibles
60
76
Purchase of subsidiaries, joint ventures and associates
93
94
Purchase of shares in subsidiary undertaking from non-controlling interests
–
–
Purchase of other investments
4
4
Gross investment
1,281
1,171
Note F
2024
2023
£m
£m
Adjusted operating profit
1,998
1,513
Charged to adjusted operating profit:
Depreciation of property, plant and equipment and investment properties
555
531
Amortisation of operating intangibles
63
44
Depreciation of right-of-use assets and non-cash lease adjustments
294
273
Adjusted EBITDA
2,910
2,361
Net debt including lease liabilities
(2,021)
(2,265)
Financial leverage ratio
0.7x
1.0x
Note G
2024
2023
£m
£m
Adjusted EBITDA (see note F)
2,910
2,361
Repayment of lease liabilities net of incentives received
(308)
(246)
Working capital
305
(216)
Capital expenditure (see note D)
(1,184)
(1,073)
Purchase of subsidiaries, joint ventures and associates
(93)
(94)
Sale of subsidiaries, joint ventures and associates
24
4
Net interest paid
(69)
(74)
Income taxes paid
(340)
(341)
Share of adjusted profit after tax from joint ventures and associates
(120)
(127)
Dividends received from joint ventures and associates
105
107
Other
125
(32)
Free cash flow
1,355
269
Note H
2024
2023
£m
£m
Cash and cash equivalents
1,323
1,457
Current asset investments
334
–
Current loans and overdrafts
(159)
(168)
Non-qualifying non-current borrowings*
(63)
–
Estimated inaccessible cash
(66)
(73)
Qualifying credit facilities
1,500
1,500
Total liquidity
2,869
2,716
* At 14 September 2024, non-current borrowings on the face of the balance sheet included the £400m public bond due in 2034 (carrying value £391m)
as qualifying borrowings.
FINANCIAL STATEMENTS CONTINUED
Notes forming part of the financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 210 | Annual Report 2024
2024
2023
Note
£m
£m
Fixed assets
Intangible assets
1
–
–
Right-of-use assets
2
3
6
Investments in subsidiaries
3
3,137
1,296
3,140
1,302
Current assets
Debtors
• due within one year
4
3,619
4,165
• due after one year
4
94
129
Employee benefits assets – due after one year
5
1,454
1,397
Derivative assets
15
31
Current asset investments
334
–
Cash and cash equivalents
797
924
6,313
6,646
Creditors: amounts falling due within one year
Bank loans and overdrafts – unsecured
(44)
(81)
Lease liabilities
2
(3)
(3)
Other creditors
7
(4,488)
(4,411)
Derivative liabilities
(13)
–
(4,548)
(4,495)
Net current assets
1,765
2,151
Total assets less current liabilities
4,905
3,453
Creditors: amounts falling due after one year
Bank loans - unsecured
(395)
(394)
Lease liabilities
2
–
(3)
Amounts owed to subsidiaries
(213)
(200)
Employee benefits liabilities
5
(24)
(20)
Deferred tax liabilities
6
(343)
(325)
(975)
(942)
Net assets
3,930
2,511
Capital and reserves
Issued capital
8
42
44
Capital redemption reserve
8
5
3
Hedging reserve
8
2
2
Profit and loss reserve
8
3,881
2,462
Equity shareholders' funds
3,930
2,511
The Company’s profit for the 52 weeks ended 14 September 2024 was £2,448m (52 weeks ended 16 September 2023 – £1,043m).
The financial statements on pages 211 to 217 were approved by the Board of Directors on 5 November 2024 and were signed
on its behalf by:
Michael McLintock
Chairman
Eoin Tonge
Finance Director
Company balance sheet
at 14 September 2024
Associated British Foods plc | 211 | Annual Report 2024
Share capital
Capital
redemption
reserve
Hedging
reserve
Profit and
loss reserve
Total
£m
£m
£m
£m
£m
Balance as at 17 September 2022
45
2
–
2,263
2,310
Total comprehensive income
Profit for period recognised in the income statement
–
–
–
1,043
1,043
Remeasurement of defined benefit schemes
–
–
–
(33)
(33)
Deferred tax associated with defined benefit schemes
–
–
–
10
10
Items that will not be reclassified to profit or loss
–
–
–
(23)
(23)
Movements in cash flow hedging position
–
–
4
–
4
Deferred tax associated with movement in cash flow hedging position
–
–
(2)
–
(2)
Items that are or may be subsequently reclassified to profit or loss
–
–
2
–
2
Other comprehensive income
–
–
2
(23)
(21)
Total comprehensive income
–
–
2
1,020
1,022
Transactions with owners
Dividends paid to equity shareholders
–
–
–
(345)
(345)
Net movement in own shares held
–
–
–
(28)
(28)
Share buyback
(1)
1
–
(448)
(448)
Total transactions with owners
(1)
1
–
(821)
(821)
Balance as at 16 September 2023
44
3
2
2,462
2,511
Total comprehensive income
Profit for period recognised in the income statement
–
–
–
2,448
2,448
Remeasurement of defined benefit schemes
–
–
–
38
38
Deferred tax associated with defined benefit schemes
–
–
–
(10)
(10)
Items that will not be reclassified to profit or loss
–
–
–
28
28
Movements in cash flow hedging position
–
–
–
–
–
Deferred tax associated with movement in cash flow hedging position
–
–
–
–
–
Items that are or may be subsequently reclassified to profit or loss
–
–
–
–
–
Other comprehensive income
–
–
–
28
28
Total comprehensive income
–
–
–
2,476
2,476
Transactions with owners
Dividends paid to equity shareholders
–
–
–
(502)
(502)
Net movement in own shares held
–
–
–
11
11
Deferred tax associated with share-based payments
–
–
–
2
2
Share buyback
(2)
2
–
(568)
(568)
Total transactions with owners
(2)
2
–
(1,057)
(1,057)
Balance as at 14 September 2024
42
5
2
3,881
3,930
FINANCIAL STATEMENTS CONTINUED
Company statement of changes in equity
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 212 | Annual Report 2024
Basis of preparation
The Company presents its financial statements in sterling,
rounded to the nearest million, prepared on the historical cost
basis, except that derivative financial instruments are stated
at fair value, and in accordance with FRS 101 and the
Companies Act 2006.
As permitted by FRS 101, the Company takes advantage of
the disclosure exemptions available in relation to share-based
payments, financial instruments, capital management,
presentation of comparative information in respect of certain
assets, presentation of a cash flow statement, standards not
yet effective, impairment of assets and certain related party
transactions. Where required, equivalent disclosures are given
in the consolidated financial statements.
As permitted by section 408(4) of the Companies Act 2006, a
separate income statement and statement of comprehensive
income for the Company are not included in these financial
statements. The principal accounting policies adopted are
described below. They have all been applied consistently
to all years presented.
Intangible assets
Intangible assets comprise operating intangibles.
Operating intangibles are stated at cost less accumulated
amortisation and impairment charges. Amortisation is charged to
the income statement on a straight-line basis over the estimated
useful economic lives of intangible assets from the date they
are available for use. The estimated useful lives are generally
deemed to be no longer than five years.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision
for impairment.
Impairment
The Company reviews the carrying amount of investments
in subsidiaries and other assets at each balance sheet date
to determine whether there is any indication of impairment.
If any such indication exists, the Company estimates the asset’s
recoverable amount. The Company recognises an impairment
charge in the income statement whenever the carrying amount
of an asset exceeds its recoverable amount.
The recoverable amount of assets is the greater of their fair
value less costs to sell and their value in use. In assessing value
in use, the Company discounts estimated future cash flows to
present value using a pre-tax discount rate reflective of current
market assessments of the time value of money and the risks
specific to the asset.
The Company may reverse an impairment charge if there
has been a change in the estimates used to determine the
recoverable amount, but only to the extent that the new carrying
amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no
impairment charge had previously been recognised.
Financial assets and liabilities
The Company recognises financial assets and financial liabilities,
except for derivatives, initially at fair value and subsequently
at amortised cost.
Derivatives
The Company uses derivatives to manage its economic
exposure to financial risks. The principal instruments used are
foreign exchange contracts and swaps and interest rate swaps.
The Company recognises derivatives at fair value based on
market prices or rates, or calculated using discounted cash flow
or option pricing models. The Company recognises changes
in the value of derivatives in the income statement unless
the derivative is designated in a hedging relationship, when
recognition of any change in fair value depends on the nature
of the item being hedged.
Accounting policies
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 213 | Annual Report 2024
Pensions
The Company operates one defined contribution and two
defined benefit pension schemes. The Company is the principal
employer of the Associated British Foods Pension Scheme,
which is a funded final salary scheme that is closed to new
members, as well as a small unfunded final salary scheme.
The accounting policy for pensions is the same as for the Group,
which is set out on page 150.
Income tax
The accounting policy for income tax is the same as for the
Group, which is set out on page 150.
Share-based payments
The Company recognises the fair value of share awards at grant
date as an employee expense with a corresponding increase in
equity, spread over the period during which employees become
unconditionally entitled to the shares.
The Company adjusts the amount recognised to reflect expected
and actual levels of vesting except where the failure to vest
is as a result of not meeting a market condition.
Where the Company grants allocations of shares to employees
of its subsidiaries, these are accounted for on the same basis
as allocations to employees of the Company, except that the fair
value is recognised as an increase to investment in subsidiaries
with a corresponding increase in equity.
Cash, cash equivalents and current asset
investments
Cash and cash equivalents comprise bank and cash balances,
deposits and short-term investments with original maturities
of three months or less.
Current asset investments comprise bank deposits and
short-term investments with maturities of between three
and six months.
Leases
The accounting policy for leases is the same as for the Group,
which is set out on page 152.
Significant accounting estimates
The preparation of the Company’s financial statements includes
the use of estimates and assumptions. Although the estimates
used are based on management’s best information about current
circumstances and future events and actions, actual results
may differ from those estimates. The accounting estimates
with a significant risk of a material change to the carrying value
of assets and liabilities within the next year are forecasts and
discount rates, and pensions.
These are set out in Accounting estimates and judgements
in the consolidated financial statements on page 148.
Other areas of judgement and accounting estimates
The Company’s financial statements include other areas of
judgement and accounting estimates. While these areas do not
meet the definition of significant accounting estimates or critical
accounting judgements, the recognition and measurement of
certain material assets and liabilities are based on assumptions
and/or are subject to longer term uncertainties.
New accounting standards
The Company adopted the following accounting standards
and amendments during the year with no significant impact:
• International Tax Reform – Pillar Two Model Rules
(Amendments to IAS 12)
• Deferred Tax related to Assets and Liabilities arising from
a Single Transaction (Amendments to IAS 12)
• Definition of Accounting Estimates (Amendments to IAS 8)
• Disclosure of Accounting policies (Amendments to IAS 1
and IFRS Practice Statement 2)
• IFRS 17 Insurance Contracts, Amendments to IFRS 17, Initial
Adoption of IFRS 17 and IFRS 9 – Comparative Information
FINANCIAL STATEMENTS CONTINUED
Accounting policies
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 214 | Annual Report 2024
1. Intangible assets
Operating
intangibles
£m
Cost
At beginning and end of year
9
Amortisation
At beginning and end of year
9
Net book value
At beginning and end of year
–
2. Leases
Right-of-use assets
2024
2023
£m
£m
Cost
At beginning and end of year
18
18
Depreciation
At beginning of year
12
9
Depreciation for the year
3
3
At end of year
15
12
Net book value
At beginning of year
6
9
At end of year
3
6
Lease liabilities
2024
2023
£m
£m
Cost
At beginning of year
6
10
Repayment of lease liabilities
(3)
(4)
At end of year
3
6
Current
3
3
Non-current
–
3
3
6
Leases relate to land and buildings.
3. Investments in subsidiaries
2024
2023
£m
£m
At beginning of year
1,296
1,287
Additions
3,664
9
Disposals
(1,823)
–
At end of year
3,137
1,296
Additions in the year comprise £3,646m invested in a number of the Company’s subsidiaries pursuant to a group re-organisation
and £18m relating to the allocation of shares under equity-settled share-based payment plans to employees of the Company’s
subsidiaries (2023 – £9m relating to the allocation of shares under equity-settled share-based payment plans to employees of the
Company’s subsidiaries). Disposals in the year related to the transfer of subsidiaries to a new wholly owned holding company within
the group (2023 – nil).
Notes to the Company financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 215 | Annual Report 2024
4. Debtors
2024
2023
£m
£m
Amounts falling due within one year
Amounts owed by subsidiaries
3,510
4,079
Other debtors
21
16
Corporation tax recoverable
88
70
3,619
4,165
Amounts falling due after one year
Amounts owed by subsidiaries
94
129
5. Employee entitlements
2024
2023
2024
2023
2024
2023
assets
assets
liabilities
liabilities
net
net
£m
£m
£m
£m
£m
£m
Reconciliation of change in assets and liabilities
At the beginning of the year
3,553
3,735
(2,176)
(2,391)
1,377
1,344
Current service cost
–
–
(15)
(23)
(15)
(23)
Employee contributions
4
5
(4)
(5)
–
–
Employer contributions
3
28
–
–
3
28
Abatement of employer contributions to defined
contribution schemes
(38)
–
–
–
(38)
–
Benefit payments
(141)
(140)
132
139
(9)
(1)
Interest income/(expense)
189
169
(115)
(107)
74
62
Return on scheme assets less interest income
166
(244)
–
–
166
(244)
Actuarial gains arising from changes in financial
assumptions
–
–
(126)
252
(126)
252
Actuarial gains arising from changes in demographic
assumptions
–
–
7
19
7
19
Experience losses on scheme liabilities
–
–
(9)
(60)
(9)
(60)
At end of year
3,736
3,553
(2,306)
(2,176)
1,430
1,377
The net pension asset of £1,430m comprises a funded scheme with a surplus of £1,454m and an unfunded scheme with
a deficit of £24m.
Further details of the Associated British Foods Pension Scheme are contained in note 13 of the consolidated financial statements.
6. Deferred tax assets and liabilities
Employee
benefits
Share-based
payments
Other
Total
£m
£m
£m
£m
At 17 September 2022
(336)
3
9
(324)
Amount charged to the income statement
(16)
3
6
(7)
Amount charged to equity
10
–
(2)
8
Disposals
(2)
–
–
(2)
At 16 September 2023
(344)
6
13
(325)
Amount charged to the income statement
(4)
–
(6)
(10)
Amount charged to equity
(10)
2
–
(8)
At 14 September 2024
(358)
8
7
(343)
7. Other creditors
2024
2023
£m
£m
Amounts falling due within one year
Accruals and deferred income
82
69
Amounts owed to subsidiaries
4,406
4,342
4,488
4,411
FINANCIAL STATEMENTS CONTINUED
Notes to the Company financial statements
for the 52 weeks ended 14 September 2024
Associated British Foods plc | 216 | Annual Report 2024
8. Capital and reserves
Share capital
At 14 September 2024, the Company’s issued and fully paid share capital comprised 744,303,807 ordinary shares of 5 15⁄22p each
carrying one vote per share (2023 – 767,953,088). Total nominal value was £42m (2023 – £44m). The Company repurchased and
cancelled 23,649,281 shares during the year at a cost of £562m (2023 – 23,721,095 shares at a cost of £448m).
At 14 September 2024, the Company recognised a current liability of £6m in accruals in respect of shares yet to be delivered under
the share buyback programme (2023 – nil). At 14 September 2024, the Company had a contractual right to terminate the share
buyback programme, so the liability recognised is limited to the Company’s obligation to pay for shares already purchased on its
behalf at 14 September 2024 but not yet paid for.
Capital redemption reserve
£2m arose in 2010 as a transfer to capital redemption reserve following redemption of two million £1 deferred shares at par. £3m
has arisen since 2023 following the purchase and subsequent cancellation of shares (2023 – £1m). The capital redemption reserve
is regarded as non-distributable.
Dividends
Details of dividends paid and proposed are provided in note 6 to the consolidated financial statements.
Share-based payments
Details of the Company’s equity-settled share-based payment plans are provided in note 24 to the consolidated financial statements.
Hedging reserve
The hedging reserve comprises all changes in the value of derivatives to the extent that they are effective cash flow hedges, net
of amounts recycled from the hedging reserve on occurrence of the hedged transaction or when the hedged transaction is no longer
expected to occur.
9. Contingent liabilities
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group,
the guarantee contract is treated as a contingent liability until such time as it becomes probable that the Company will be required
to make a payment under the guarantee.
At year end, the Company had provided £515m of guarantees in the ordinary course of business (2023 – £480m).
10. Related parties
The Company has a controlling shareholder relationship with its parent company, Wittington Investments Limited, with the trustees
of the Garfield Weston Foundation and with certain other individuals who hold shares in the Company. Further details of the controlling
shareholder relationship are included in note 28 to the consolidated financial statements. The Company has a related party relationship
with its subsidiaries, associates and joint ventures and directors. In the course of normal operations, related party transactions entered
into by the Company have been contracted on an arm’s length basis.
Material transactions and year end balances with related parties (excluding wholly owned subsidiaries) were as follows:
2024
2023
Sub note
£'000
£'000
Charges to Wittington Investments Limited in respect of services provided by the Company
984
985
Interest income earned from non-wholly owned subsidiaries
1
421
1,647
Amounts due from non-wholly owned subsidiaries
1
15,899
14,780
1. Details of the Company’s subsidiaries, joint ventures and associates are set out in note 29 of the consolidated financial statements.
11. Other information
Emoluments of directors
The remuneration of the directors of the Company is shown in the Remuneration Report for the Group on pages 111 to 127.
Employees
The Company had an average of 229 employees (2023 – 208). Remuneration was £35m (2023 – £34m).
Audit fees
Note 2 to the consolidated financial statements of the Group provides details of the remuneration of the Company’s auditors.
Associated British Foods plc | 217 | Annual Report 2024
2020
2021
2022
2023
2024
£m
£m
£m
£m
£m
Revenue
13,937
13,884
16,997
19,750
20,073
Adjusted operating profit
1,024
1,011
1,435
1,513
1,998
Exceptional items
(156)
(151)
(206)
(109)
(35)
Transaction costs
(2)
(3)
(6)
(5)
(5)
Amortisaton of non-operating intangibles
(59)
(50)
(47)
(41)
(40)
Acquired inventory fair value adjustments
(15)
(3)
(5)
(3)
(2)
Profits less losses on disposal of non-current assets
18
4
7
28
16
Profit less losses on sale and closure of businesses
(14)
20
(23)
(3)
26
Finance income
11
9
19
48
71
Finance expense
(124)
(111)
(111)
(128)
(135)
Other financial income/(expense)
3
(1)
13
40
23
Profit before taxation
686
725
1,076
1,340
1,917
Taxation
(221)
(227)
(356)
(272)
(437)
Profit for the period
465
498
720
1,068
1,480
Basic and diluted earnings per ordinary share (pence)
57.6
60.5
88.6
134.2
193.7
Adjusted earnings per share (pence)
81.1
80.1
131.1
141.8
196.9
Dividends per share (pence)
nil
26.7
43.7
47.3
63.0
FINANCIAL STATEMENTS CONTINUED
Progress report
Saturday nearest to 15 September
Associated British Foods plc | 218 | Annual Report 2024
AGM
Annual General Meeting
APM
Alternative Performance Measure
the Board
the board of Associated British Foods plc
CDP
Carbon Disclosure Project
CGU
Cash-generating unit
the Company
Associated British Foods plc
CPI
Consumer Price Index (UK)
ESG
Environmental, Social and Governance
ESOP
Employee Share Ownership Plan
FCA
Financial Conduct Authority
FRC
Financial Reporting Council
FRS 101
Financial Reporting Standard 101 Reduced Disclosure Framework
GHG
Greenhouse gas emissions
GMP
Guaranteed Minimum Pension
the Group
Associated British Foods plc, its subsidiaries and its interests in joint ventures and associates
HSE
Health, Safety and Environment
IFRIC
International Financial Reporting Interpretations Committee
IFRS
International Financial Reporting Standard(s)
LTIP
Long-term incentive plan
Net finance expense
the sum of finance income, finance expense and other financial income/expense on the face
of the consolidated income statement
RCF
Revolving Credit Facility
ROI
Return on investment (see ESG glossary for further information)
RSP
Restricted Share Plan
SBTi
the Science Based Targets initiative
STIP
Short-term incentive plan
TCFD
The Task Force on Climate-related Financial Disclosures
UKEB
UK Endorsement Board
UK MCD
UK Mandatory Climate Disclosures
Glossary
Associated British Foods plc | 219 | Annual Report 2024
Associated British Foods plc
Registered office Weston Centre
10 Grosvenor Street
London W1K 4QY
Company registered in
England and Wales,
number 293262
Company Secretary
Paul Lister
Registrar
Equiniti Aspect House
Spencer Road
Lancing BN99 6DA
Auditor
Ernst & Young LLP
Chartered Accountants
Brokers
UBS AG London Branch
5 Broadgate
London EC2M 2QS
Barclays Bank PLC
5 The North Colonnade
Canary Wharf
Timetable
Annual general meeting
6 December 2024
Interim results to be announced
29 April 2025
Website
www.abf.co.uk
Warning about share fraud
From time to time, companies, their subsidiary companies, and shareholders can be the subject of investment scams. The perpetrators
obtain lists of shareholders or subsidiaries and make unsolicited phone calls or correspondence concerning investment matters.
They may offer to sell worthless or high-risk shares and may offer to buy your current shareholdings at an unrealistic price. They will
often also inform you of untrue scenarios to make you think that you need to sell your shares or to justify an offer that seems too
good to be true. These operations are commonly known as ‘boiler rooms’.
Shareholders are advised to be very wary of any offers of unsolicited advice, discounted shares, premium prices for shares they
own or unsolicited investment opportunities. If you receive any such unsolicited calls, correspondence or investment advice:
• ensure you get the correct name of the person and firm;
• check that the firm is on the Financial Conduct Authority (FCA) Register to ensure they are authorised at register.fca.org.uk/;
• use the details on the FCA Register to contact the firm;
• call the FCA Consumer Helpline (0800 111 6768) if there are no contact details in the Register or you are told they are out of date; and
• if you feel uncomfortable with the call or the calls persist, simply hang up.
Forward-looking statements
Certain statements included in this report may constitute ‘forward-looking statements’. Forward-looking statements are all statements
that do not relate to historical facts and events, and include statements concerning the Company’s plans, objectives, goals, financial
condition, strategies and future operations and performance and the assumptions underlying these forward-looking statements. The
Company often, but not always, uses the words ‘may’, ‘will’, ‘could’, ‘believes’, ‘assumes’, ‘intends’, ‘estimates’, ‘expects’, ‘plans’,
‘seeks’, ‘approximately’, ‘aims’, ‘projects’, ‘anticipates’ or similar expressions, or the negative thereof, to generally identify forward
looking statements. Forward-looking statements may be set forth in a number of places in this report. The Company has based these
forward-looking statements on the current view with respect to future events and financial performance. These views involve
uncertainties and are subject to certain risks, the occurrence of which could cause actual results to differ materially from those predicted
in the forward-looking statements contained in this report and from past results, performance or achievements. Although the Company
believes that the estimates and the projections reflected in its forward-looking statements are reasonable, if one or more of the risks or
uncertainties materialise or occur, including those which the Company has identified in its report, or if any of the Company's underlying
assumptions prove to be incomplete or incorrect, the Company's actual results of operations may vary from those expected, estimated
or projected. These forward-looking statements are made only as at the date of this report. Except to the extent required by law, the
Company is not obliged to, and does not intend to, update or revise any forward-looking statements made in this report whether as a
result of new information, future events or otherwise. All subsequent written or oral forward-looking statements attributable to the
Company, or persons acting on the Company’s behalf, are expressly qualified in their entirety by the cautionary statements contained
throughout this report. As a result of these risks, uncertainties and assumptions, readers should not place undue reliance on these
forward-looking statements and persons needing advice should consult an independent financial adviser. This report does not constitute
an invitation to underwrite, subscribe for or otherwise acquire or dispose of any shares or other securities in the Company. No statement
in this report is intended to be, nor should be construed as, a profit forecast or a profit estimate.
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Associated British Foods plc | 220 | Annual Report 2024