Associated British Foods plc results for the 52 weeks ended 16 September 2023
Annual Results Announcement
YEAR ENDED 16 SEPTEMBER 2023
Associated British Foods plc results for the 52 weeks ended 16 September 2023
Financial Headlines
| 2023 | 2022 | Actualcurrency | Constant currency | |
| Group revenue | £19,750m | £16,997m | +16% | +15% |
| Adjusted operating profit | £1,513m | £1,435m | +5% | +4% |
| Adjusted profit before tax | £1,473m | £1,356m | +9% | |
| Adjusted earnings per share | 141.8p | 131.1p | +8% | |
| Operating profit | £1,383m | £1,178m | +17% | |
| Profit before tax | £1,340m | £1,076m | +25% | |
| Basic earnings per share | 134.2p | 88.6p | +51% | |
| Gross investment | £1,171m | £930m | +26% | |
| Free cash flow | £269m | £(84)m | ||
| Net cash before lease liabilities | £895m | £1,488m | ||
| Total net debt | £2,265m | £1,764m | ||
| Return on Average Capital Employed (ROACE) | 13.6% | 14.0% | ||
| Total dividends per share | 60.0p | 43.7p | +37% |
Performance
| – | Strong performance in demanding environment | |
| – | Significant growth in Group sales driven in large part by pricing actions | |
| – | Resilient growth in Group adjusted operating profit | |
| – | Continued momentum across Retail | |
| – | Revenues well ahead at £9.0bn, supported by selective pricing and well received ranges | |
| – | Adjusted operating profit 3% lower at £735m with margin of 8.2% reflecting our decisions on pricing | |
| – | Space expansion on track with 27 new stores in the year | |
| – | Continued investment in digital capability with completion of enhanced website rollout and Click + Collect expansion | |
| – | Significant profit growth at Ingredients | |
| – | Good growth in Grocery led by international brands, US focused brands and recovery in Allied Bakeries | |
| – | Sugar sales well ahead, profitability ahead but impacted by more challenging British Sugar crop conditions and Vivergo | |
| – | Lower profitability at Agriculture due to tough market conditions | |
| – | Investment of £1.2bn with a number of strategic initiatives driving increased capacity and capability | |
| – | Good progress on ESG priorities | |
| – | Free cash flow of £269m with higher profit, offset by higher capital investment and reduced working capital outflow | |
Shareholder returns
| ● | Initial £500m buyback programme concluded end of October. Additional £500m buyback programme announced |
| ● | Total dividends of 60.0p per share up 37% comprising interim of 14.2p per share, final proposed of 33.1p per share and special dividend of 12.7p per share |
George Weston, Chief Executive of Associated British Foods, said
“At the outset of this financial year the Group was facing very significant economic challenges caused in part by major geo-political events. Looking back on the year, it is clear to me that the Group performed extremely well and is as a result now well positioned for the year ahead.
Trading at Primark was excellent under the circumstances. At the beginning of the year we implemented selective price increases partially to protect profitability, on the grounds that the significant input cost inflation was temporary. That careful pricing delivered as intended, with customers continuing to shop with us enthusiastically. Profitability in our food businesses moved ahead as a result of the appeal of our products and the strength of our brands, both of which supported us in the recovery of high levels of input cost inflation without disrupting our customer relationships.
Although consumer demand remains uncertain, Primark is as well placed as it has ever been. We continue to believe that Primark’s offer is very attractive not just to existing customers but also to new customers engaged by our digital platform, new store openings, and word of mouth which remains as powerful as ever. With Primark margin now moving back to its historic levels, we view the future for this business with confidence. Our food businesses are also in very good shape, and our Sugar business especially should see much better profitability in the year ahead.”
The Group has defined, and outlined the purpose of, its Alternative performance measures (APMs) in note 13. These measures are used within the Financial Headlines and in this Annual Results Announcement.
References to growth in the following commentary are based on constant currency unless stated otherwise.