Associated British Foods (ABF) H2 2024 earnings summary

Executive summary

• Operating profit rose 38% year-over-year, with adjusted EPS up 39% and cash generation up to £1.4 billion, a £1.1 billion increase from last year.

• Group revenue reached £20.1 billion, up 4% at constant currency, with all divisions advancing.

• Both Retail and Food businesses delivered robust performance, supported by consistent multi-year investment and a return to more normal market and supply chain conditions.

• Significant returns to shareholders through increased dividends and share buybacks, with over £2.3 billion returned over two years.

• Focused investments in sustainability, digital, and product initiatives contributed to growth and margin recovery.

Financial highlights

• Adjusted operating profit up 38% at constant currency to £1,998 million; adjusted EPS up 39% to 196.9p.

• Group margin improved from 7.7% to 10%; return on average capital employed rose from 12% to 18.7%.

• Free cash inflow of £1,355 million, strengthening the balance sheet and reducing leverage to 0.7x from 1x.

• Adjusted profit before tax up 33% to £1,957m; adjusted effective tax rate down to 23.1%.

• Total dividend per share increased 50% to 90.0p, including a special dividend.

Outlook and guidance

• Primark targets mid-single digit sales growth in 2025, with margins broadly in line with last year.

• Sugar segment expected to drop in 2025 before rebounding in 2026; grocery to see normalization in U.S. but progress elsewhere.

• Ingredients anticipates growth in yeast and bakery ingredients and recovery in specialty ingredients.

• Continued investment in business and capital returns to shareholders prioritized.

• Agriculture segment expects some improvement, particularly in UK grain trading.