Annual Report 2023

Delivering

today

Investing

for tomorrow

Strategic report Governance Financial statements

Group revenue

£19.8bn

(2022: £17.0bn)

Dividends per share (including

special dividend)

60.0p

(2022: 43.7p)

Return on average capital

employed* (ROACE)

13.6%

(2022: 14.0%)

Basic earnings per share

134.2p

(2022: 88.6p)

Adjusted operating profit*

£1,513m

(2022: £1,435m)

Adjusted earnings per share*

141.8p

(2022: 131.1p)

Adjusted profit before tax*

£1,473m

(2022: £1,356m)

Profit before tax

£1,340m

(2022: £1,076m)

Operating profit

£1,383m

(2022: £1,178m)

Net cash before lease

liabilities*

£895m

(2022: £1,488m)

Gross investment*

£1,171m

(2022: £930m)

Net debt including lease

liabilities*

£2,265m

(2022: £1,764m)

1 Introduction

5 Chairman’s statement

7 Chief Executive’s statement

9 Our strategy and business model

12 Key performance indicators

14 Operating review

14 Grocery

18 Ingredients

22 Agriculture

26 Sugar

30 Retail

37 Financial review

40 Section 172 and our stakeholders

46 Responsibility

56 Climate-related Financial

Disclosures (TCFD)

68 Principal risks and uncertainties

76 Viability statement and

goingconcern

78 Chairman’s introduction

80 Board of Directors

82 Corporate governance matters

100 Directors’ Remuneration Report

116 Directors’ Report

119 Statement of directors’

responsibilities

120 Independent Auditor’s Report

128 Consolidated income statement

129 Consolidated statement

ofcomprehensive income

130 Consolidated balance sheet

131 Consolidated cash flow statement

132 Consolidated statement

ofchanges in equity

133 Significant accounting policies

139 Accounting estimates

andjudgements

140 Notes forming part of

thefinancialstatements

194 Company financial statements

201 Progress report

202 Glossary

203 Company directory

On the cover: An Allied Mills

employee at our Manchester

flourmill

* Alternative Performance Measures (APMs) as

defined on pages 189 to 191.

We invest in our businesses to create long-term

value for our shareholders and our stakeholders

including customers, employees and suppliers.

Webelieve that this investment, with the process

of ambition and renewal that accompanies it, builds

momentum and sharpens focus across the Group.

In our Annual Report this year we highlight how

weare continuing to invest in new technologies,

inproducts and processes, in our people, and in

capital and acquisitions despite a year of economic

volatility and high inflation. We show how our

businesses are increasingly well-placed to grow

sustainably from this year’s delivery of sales

andprofits.

Associated British Foods is a highly diversified

group, with a range of food and ingredients

businesses as well as our retail brand, Primark.

Weare united in our purpose: to provide safe, We are united in our purpose: to provide safe,

nutritious and affordable food, and clothing that

isgreat value for money.is great value for money.

Investing

for tomorrow

Delivering

today

1Associated British Foods plc Annual Report 2023

OUR GROUP AT A GLANCE

58%

of the energy we used

came from renewables

83%

of the waste* we

generated was sent for

recycling, recovery or

other beneficial use

188

food manufacturing

sitesglobally

One of the

largest

fashion retailers

inEurope

96%

of our people have

access to an employee

assistance programme

countries operated in,

across Europe, Africa,

the Americas, Asia

andAustralia

55%

of our total workforce

are women

133,000

employees

About us

* A substance or material that has no further use in our main processes

andrequires management to discard or treat prior to final disposal.

Our values

See pages 10 and 11 for more on our

values and how we operate.

’

Our consumer brands

For a full list of our businesses and brands,

visit www.abf.co.uk/our-businesses/a-z-finder

2 Associated British Foods plc Annual Report 2023

Our operating businesses

Our Grocery division employs more than 15,000 people

andcomprises brands which occupy leading positions

inmarkets across the globe. In the UK, nine out

of10households use our brands.

Our Ingredients businesses are leadersin

yeast and bakery ingredients as well as in

specialty ingredients forthefood, human

and animal nutrition,pharmaceutical and

variousother industries.

Primark is one of the largest clothing retailers

in Europe, with the highest sales by volume

in the UK and a growing presence in the US.

In total, we have 432 stores in 16 countries

across Europe and the US.

Grocery

IngredientsRetail

Revenue

£4,198m

(2022: £3,735m)

Adjusted operating profit

£448m

(2022: £399m)

Twinings and

Ovaltine are enjoyed

in more than 100

countries worldwide

Read more on page 26

Revenue

£1,840m

(2022: £1,722m)

Adjusted

operating profit

£41m

(2022: £47m)

3Associated British Foods plc Annual Report 2023

Investing

for tomorrow

Delivering

today

4 Associated British Foods plc Annual Report 2023

Chairman’s statement

Group revenue increased to £19.8bn, 16% higher than the

previous year at actual exchange rates and 15% higher at

constant currency. This increase in revenue was largely due to

price increases negotiated across different businesses to

mitigate high levels of inflation. As the financial year progressed,

we saw the rate of inflation ease.

Year-on-year performance in our Grocery and Ingredients

divisions was strong while Sugar delivered higher sales and

resilient profits in the face of difficult growing conditions in

Europe. Retail revenue was very good, driven by our like-for-like

performance and selling space expansion. At the start of the

year we decided not to recover through pricing all the inflation

in Primark’s input costs, and Primark adjusted operating profit

fell by 3% year-on-year.

Group adjusted operating profit rose to £1,513m, an increase

over the previous year of 5% at actual exchange rates and

4% at constant currency. Adjusted profit before tax rose 9%

to £1,473m and adjusted earnings per share increased by 8%

to 141.8p.

Gross investment stepped up to £1.2bn in the financial year

reflecting the many strategic investments made in our Grocery,

Ingredients and Sugar divisions as well as a step-up in the store

and technology roll-out in Primark. We made a number of small

acquisitions for a total cash payment of £94m, in particular in our

Agriculture division to expand the strength and breadth of our

offer to the dairy sector.

Capital structure 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.

During the financial year we executed £446m of a £500m

share buyback programme with the remaining amount being

completed recently. At the end of the financial year the financial

leverage ratio was just under 1.0 times. The Group continues

to prioritise investment in its businesses, and we expect to

increase spend in each of the next few years to slightly above

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 12.7p per share.

The Board is proposing a final dividend of 33.1p per share which

together with the special dividend will be paid on 12 January

2024 to shareholders on the register on 15 December 2023.

Taken with the interim dividend of 14.2p a share, the aggregate

total dividend equates to 60.0p per share, 37% higher than the

total dividend of 43.7p per share in 2022.

Our commitment to good business

Our businesses aim to make a lasting contribution to society

by following our Group values of respecting everyone’s dignity,

acting with integrity, progressing through collaboration and

delivering with rigour. The Group operates a devolved business

model which gives the businesses considerable autonomy, but

the Board has ultimate responsibility for overseeing responsible

business practices across the Group. This year we continued to

make good progress in our environmental initiatives in particular

with significant investments in decarbonisation of Sugar, in

water and effluent projects in Ingredients, and at Primark which

progressed a number of initiatives under the Primark Cares

programme including an increase in the proportion of recycled

or more sustainably sourced materials used in our clothing.

Board

There have been several important changes to the Board this

year. We welcomed Eoin Tonge as a director in February 2023,

succeeding John Bason as Finance Director in April 2023.

Dame Heather Rabbatts became Senior Independent Director

and Graham Allan became Chair of the Remuneration

Committee in May 2023. Ruth Cairnie stepped down

on 31 August 2023 after nine years on the Board. Ruth made

a terrific contribution to our Board deliberations, and she leaves

with our grateful thanks.

We have also welcomed Annie Murphy and Kumsal Bayazit as

new non-executive directors. Annie joined from 6 September

2023 and Kumsal will be joining from 1 December 2023.

They bring a wealth of relevant experience in different areas to

the Board and I very much look forward to working with them.

Looking ahead

Whilst the environment is still challenging for the consumer,

inflationary pressures have eased and there is less volatility

than there was 12 months ago. The Group is well positioned

as a result.

At Primark, we believe our trading performance demonstrates

the enduring strength of our appeal to customers across all

markets. We continue to invest in both our existing store estate

and in new stores and in our digital infrastructure. We expect

further growth in sales next year driven by new selling space

expansion of some 1 million sq ft and modest levels of like-for-

like sales growth. This like-for-like growth will be underpinned

by our value proposition, our product relevance and stretch,

our increasingly effective digital platform and some limited

pricing. Lower material costs and lower freight costs should

result in a substantial recovery in gross margin and overall

we expect Primark adjusted operating profit margin to recover

strongly. At this early stage we believe that the adjusted

operating profit margin will be above 10% with further

improvement dependent on levels of consumer demand.

In our food businesses, we expect stability across our Grocery

division as inflation recedes and as we step up our investment

in marketing in our international brands. In Ingredients we

anticipate a modest decline in sales and profit as we consolidate

following a year of very strong growth and we invest to enhance

capabilities. We expect Agriculture to move forward as markets

improve and it integrates and leverages the acquisitions of the

last two years. We continue to expect the broader Sugar

portfolio to deliver a substantial improvement in profitability

in this new financial year, driven by a marked improvement in

the performance of British Sugar with an anticipated better UK

sugar beet crop, and a significant reduction in losses at Vivergo.

Strong cash generation will be driven by higher profitability,

lower working capital, lower levels of cash tax payable and

pension contributions, partially offset by higher capital

investment. We look forward to a year of meaningful progress.

Michael McLintock

Chairman

The Group performed very well in the financial

year despite significant inflationary and other

macro-economic pressures.

5Associated British Foods plc Annual Report 2023

6 Associated British Foods plc Annual Report 2023

Chief Executive’s statement

At the start of this financial year we were staring at some very significant economic and political

challenges. International currency markets were subject to extreme volatility and sterling’s

weakness was damaging Primark’s gross margin. Supply chains were disrupted, not least by

conflict in Ukraine. Inflation threatened consumer spending. And it was all but impossible to

forecast how consumers in our many markets would behave.

Faced with that outlook, we made two decisions. First, that we

would work hard and consistently to recover our food margins

wherever we could while taking great care to look after our

customer relationships. And second, that we would raise prices

only selectively at Primark, with the result that the impact of

input cost inflation would mean lower Primark profits. To get

a sense of the scale of the challenge, we believe that inflation

increased costs across the Group by some £1.7bn in this

financial year. That follows higher costs of £1bn in the previous

year. As always in inflationary cycles, pricing actions lag the

impact of rising input costs and, as a result, some of the

benefits apparent this year originated from pricing agreed

last year.

Today I look back at the twelve months with enormous pride

in how the Group navigated those conditions. Revenues

increased significantly but what is especially pleasing is how

our businesses managed inflation with both consumers and

customers in a thoughtful way, without damaging our

businesses or those of others in the long run. It was not an easy

process, but it was a necessary one, and it was handled with

care. As the financial year progressed, inflation eased and some

costs began to decline from recent highs, for example in freight,

fabric and energy. This is not a uniform picture and inflation

remains substantial in some countries in which the Group

operates. But in aggregate we believe that the need for price

increases in food and Primark are now largely behind us.

So, Group revenue increased to £19.8bn, 16% higher than

the previous year. Adjusted operating profit was also higher at

£1,513m, an increase over the previous year of 5%. Adjusted

earnings per share increased 8% to 141.8p. The fact that profits

and earnings per share increased by less than revenues is a

clear indication that we have more work to do to rebuild the

Group margins.

Against this backdrop our Ingredients business fared very well,

with significantly higher adjusted operating profit. Grocery and

Sugar also increased profits, albeit more modestly. Faced with

challenging markets, profits fell in Agriculture.

The effects of inflation were felt most in our Grocery

businesses. We operate in many markets particularly through

our international brands - Twinings, Ovaltine, Blue Dragon,

Patak’s, Jordans and Mazzetti – and we used local consumer

insight to manage inflation without overly impacting consumer

demand. For the most part our branded product lines secured

price increases sufficient to recover cash margins eroded by

inflation, and in places we benefited from increased demand for

own-label products. Our brands are now also more on the front

foot in terms of investment. For example, Twinings plans to roll

out campaigns internationally in the coming year while Ovaltine

is benefitting from work on product innovation with the further

introduction of Ready-to-drink products. Operational delivery

also featured in our progress. Mazola and Fleischmann’s, our

edible oils and yeast brands respectively in the US, had a very

strong year with good availability of supply. In particular, I am

very pleased with the improvement at Allied Bakeries while

recognising we have more work to do.

In Ingredients, the step-up in performance at AB Mauri has been

significant. There were a number of good performances across

its many geographies due to pricing, resilient volumes and good

supply chain management. In fact, many other businesses

in the Group benefitted from the experience AB Mauri has

gained in the past from operating for years in high inflation

environments. We continue to invest in the business to

increase capacity and develop new products. ABF Ingredients,

our specialty ingredients business, also increased sales well.

Most of its businesses are long-term growth opportunities for

the Group and much of this year has been focused on stepping

up investment in capacity and capability for that growth.

Agriculture had a more difficult year, as did many agriculture

businesses across the world. Disease, particularly in pig

and poultry, became a more common feature to manage.

The imperative is to innovate using both science and

technology, and we continue to invest in both AB Vista

and our dairy-related businesses to this end.

The year for Sugar could have been torrid. The UK beet harvest

was blighted by a sequence of weather events that resulted in

one of the lowest levels of sugar production at 0.74m tonnes

and this in a year when energy costs were exceptionally high.

In addition, Vivergo had a poor start to the year with a perfect

storm of challenged industry margins and a difficult operating

environment, both of which improved as the year progressed

but which resulted in a substantial trading loss for this year.

Next year looks much more promising. Illovo, our African sugar

business, had a good year despite severe damage to our cane

business in Mozambique due to flooding and it made further

progress in developing its capability to offer retail packs to local

markets. It strikes me that taken as a whole our Sugar business

now has more balance due in part to geographical diversification

– Illovo and our Spanish sugar business, Azucarera, performed

well while our UK businesses struggled somewhat – and even

within British Sugar our co-products activity compensated for

some of the losses from sugar.

I am delighted by Primark’s navigation of what could have been

a very difficult year, when volatile inflation threatened to disrupt

consumer spending. In the event, the strength of the Primark

offer, and our decision to pass on only part of Primark’s cost

increases in higher prices, stood us in good stead with our

customers. Against the same period a year ago, sales reached

more than £9bn, 15% higher at constant currency. Our difficult

decision not to fully recover costs was fully vindicated, resulting

in market share gains. The business has real confidence

in its product offering both in the core proposition and in an

increasingly impressive range extensions and collaborations,

culminating in the collaboration with Rita Ora as the financial

year ended. Margins at 8.2% were lower year-on-year, the

natural consequence of our pricing decision.

7Associated British Foods plc Annual Report 2023

We now have real momentum in our store opening programme

and customer enthusiasm for new Primark stores continues.

The digital programme is also building well. The roll-out

of our enhanced website has been a key component of the

programme, but as significant is the way we are organising and

connecting our social media and digital marketing activities.

Our Click + Collect trial has been extended by range and by

geography, and we are adding self-checkout to our stores and

automated systems to our warehousing. Last but not least,

we are continuing to fit large numbers of low energy lightbulbs

into our stores.

Step-up in investment

We spent more than £1 billion in capital as a Group this year.

While a minority of that investment is to replace existing plant

or facilities or to meet regulatory requirements, most of the

investment is aimed at growth.

Among our ongoing capital projects for our food businesses

is the exciting build of a new sugar factory in Tanzania, the

completion of 17 decarbonisation projects across various sugar

processes, completion of a new animal feed mill in Western

Australia, reconstruction of a bakery for Tip Top also in Western

Australia, further investment in core technology platforms for

Grocery, and initiation of investment in a production facility in

Nigeria for Ovaltine to serve markets across West Africa.

In Primark, capital investment was also substantial.

The company made considerable progress with its store

expansion programme, now back at some 1 million sq ft of retail

space a year with the associated logistics investments. We are

also deploying technology in our digital roll-out and in areas such

as self-checkouts and automated warehousing.

More broadly we continue to invest across the Group

in technology and innovation, not just in core operating

systems but also increasingly in more innovative solutions

for our businesses.

We continue to expect at least this level of investment

in the medium term.

People

I am immensely proud of the efforts of all our people in ABF

who have worked hard in difficult economic circumstances

made worse in some parts of the world by particularly bad

weather. We continue to work very hard indeed to build a

company where everyone feels welcome and included.

In August we announced that Paul Foster, Managing Director

of Mauri Australia, would succeed Stuart Grainger in November

as Chief Executive of George Weston Foods following Stuart’s

decision to retire from the role. Stuart joined ABF in 1995 and

since 2008 he has been in Australia where he has transformed

our businesses. I’d like to thank Stuart for being such an

effective steward of the Group’s assets on the other side

of the world.

ESG

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

every day. At the heart of this purpose lies a devolved business

model that empowers our managers to make the right

decisions. This year saw significant progress across a wide

range of ESG activities and actions designed to deliver

on our previously published commitments.

Of particular note were the steps taken this year to advance

the decarbonisation of British Sugar. These investments,

detailed later in this report under the Operating Review for ABF

Sugar, are part of a broader strategy to cut Scope 1 and 2 GHG

emissions at ABF Sugar by 30% by 2030. ABF Sugar accounts

for some 82% of the energy used by the Group in our own

operations, making its progress in decarbonisation critical to the

delivery of commitments on GHG emissions. By the end of this

calendar year, reduction targets for Scope 1, 2 and 3 emissions

at ABF Sugar should be validated by the Science Based Targets

initiative (SBTi). Primark’s targets for GHG emission reductions

have already been validated by the SBTi this year.

We recognise that water is a vital resource. We have carried

out a high level water risk assessments for our Group

operations using recognised methodologies and we are working

steadily to reduce our water footprint. A significant amount

of our water use occurs in crop irrigation and we are focused

on improving the efficiency of this process. We have recently

approved a large-scale irrigation project which could bring

significant benefits.

The year has shown us the potential impact of extreme

weather. Our businesses are adapting and building resilience.

They are also supporting social and environmental interventions

on farms globally, with management models that include

certified organic production, standards to promote wildlife

biodiversity, and engagement with smallholder growers in

developing markets.

We understand that making progress in our supply chain,

which is extensive, requires sustained and focused work over

time. For that reason it is gratifying to note that the Primark

Sustainable Cotton Programme celebrated its 10

anniversary

this year. This year alone, Primark sold more than 337 million

products made from this cotton, at the end of July this year,

299,388 farmers had taken part in the training programme. This

feels like very tangible progress, although there remains more

to do of course.

Looking ahead

The Group is in very good shape. Its diversification,

its strong positions in attractive markets, and the calibre

of its management teams will stand it in good stead in the year

ahead. But more than that, the operational improvements that

we have made in the last 12 months, along with investment in

new capacity and capabilities, should enable the Group to make

very meaningful financial progress. Primark is as well placed as

it has ever been, and our food businesses are as strong as ever.

I look forward to this year with pleasurable anticipation.

George Weston

Chief Executive

CHIEF EXECUTIVE’S STATEMENT CONTINUED

8 Associated British Foods plc Annual Report 2023

OUR STRATEGY

Our strategy is to achieve sustainable growth over the long

term, increasing shareholder value through sound commercial

and responsible business decisions that deliver steady growth

inearnings and dividends. Our ownership structure provides us

with the stability to invest in businesses that we believe in and

to support the growth of those businesses over the long term.

Our ESG agenda is shaped by the leaders within each business

who are closest to the opportunities and risks. ESG factors are

not only taken into account within business strategy, they are

put into effect by people at every level of the Group who are

trusted and empowered to exercise good judgement.

Grocery

Our Grocery businesses are founded on a set of strong

brands with leading positions in many markets worldwide.

For our international brands such as Twinings, Ovaltine, Patak’s,

Blue Dragon and Jordans, we focus on investing in brand equity

and employ regional strategies to drive growth.

We also have a series of more regional brands that are market

specific, such as Tip Top bakery in Australia, Mazola vegetable

oils in the US, and Kingsmill in the UK, where we seek out

leading market positions in the relevant domestic markets.

For most of our brands we have our own end-to-end

manufacturing capability which is critical in supporting new

product development and operational excellence that drives

ourbrand proposition.

Read more about Grocery’s performance and brands in action

thisyear on pages 14 to 17.

Ingredients

Our Ingredients businesses enable or enhance the

production of food and other products.

AB Mauri manufactures and sells yeast and ingredients

ofaconsistently high quality to the baking industry. We operate

globally and have strong market positions in the Americas,

Europe, and south and south east Asia. Through our Global

Technology Centre in the Netherlands we invest in innovation

togenerate opportunities for growth. ABF Ingredients develops

and manufactures specialty ingredients for the food, health and

nutrition, pharmaceutical, animal health and industrial sectors.

We focus on high-value niches and are differentiated by our

technology, product quality and customer-centric culture.

Thebreadth and low cyclicality of our products, customer base

and applications provide commercial resilience. Our strategy

isfor growth both through acquisitions and organically through

geographical expansion, innovation and new applications.

Read more about Ingredients’ performance and the innovation

inour business this year on pages 18 to 21.

Creating long-term value…

Our Group strategy is to createlong-term value for ourshareholders

and other stakeholders alike.

Agriculture

AB Agri is an international agri-food business and a leader

in the UK.

We supply farm performance services, animal feed, speciality

ingredients and supplements to farms, feed manufacturers,

food producers and retailers.

Our growth strategy sets out opportunities to strengthen our

position in current markets, expand into new geographies,

connect data and technology in new ways to deliver on-farm

performance and build on our established position of strength

inthe dairy industry.

Read more about Agriculture’s performance and the expansion

ofour business this year on pages 22 to 25.

Sugar

ABF Sugar has a portfolio of attractive positions,

generallyin deficit markets which are somewhat insulated

from the volatile world sugar price by local supply and

demand conditions.

We have significant opportunities to grow profits by continuing

our efforts to become truly customer-led, by driving further

efficiency and building out our co-products portfolio, all whilst

working to reduce our water, carbon and electricity usage.

Our African sugar businesses are building attractive consumer

brands and effective routes to market that will reinforce our

market-leading positions. In the UK and Spain, where the

majority of sugar demand is from food and drink manufacturers,

we have built strong business-to-business offers around security

of supply and quality. We have efficient operations, but there

remains an opportunity to fully optimise reliability and utilisation

to gain valuable additional volumes. In our fields, we are using

data toimprove yields and profitability for our growers.

Read more about Sugar’s performance and the development

ofourbusiness this year on pages 26 to 29.

Retail

Primark’s vision is to provide a wide choice of great-quality

essential clothing and fashion at prices that are affordable

to as many people as possible.

Our strategy is to drive business growth through the

development of existing product categories, expansion into

newproduct categories and space expansion in both existing

and new markets.

Our customer appeal is supported by our commitment to price

leadership, an exciting store environment and our sustainability

programme. We are also using our increasingly sophisticated

digital and online technologies which are driving marketing

andcustomer engagement.

Read more about our performance and investment in Primark

thisyear on pages 30 to 35.

9Associated British Foods plc Annual Report 2023

Our Group strategy and devolved operating model…

Our way of operating – entrepreneurial but also financially

prudent and focused on the long term – has achieved growth

over many years and creates long-term value for our

shareholders and other stakeholders alike.

OUR BUSINESS MODEL

…Together

Long-term view

Organic and acquisition growth

Devolved operating model

Entrepreneurial flair

Prudent balance sheet management

Ethical and sustainable business

…

Disciplined capital allocation

Material risk assessment

Strategic engagement

Framework for collaboration

Role of the Group:

Devolved operating model

We operate a devolved operating model across our five

business segments of Grocery, Ingredients, Agriculture, Sugar

and Retail and 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. This accountability is highly motivating

for our strong local management teams, encouraging an

entrepreneurial approach that drives innovative

businessthinking.

The same is true of our ESG agenda, which is shaped by

theleaders within each business who are closest to the

opportunities and risks, and who benefit from detailed local

knowledge, customer insights and clear ownership of actions.

Itmeans ESG factors are not only taken into account within

business strategy, they are put into effect by people at every

level of the Group who are trusted andempowered to exercise

good judgement.

Who we are

Associated British Foods is a highly diversifiedgroup with

awide range of food andingredients businesses, more than

40well-known grocery brands, and our flagship retail brand,

Primark. We have a strong socialpurpose: to provide safe,

nutritious and affordable food, and clothing that is great value for

money. We are a global organisation with 133,000 employees,

operations in 55 countries, suppliers in many more, and

customers in more than 100 countries. More than half of our

senior leaders are non-UK citizens, representing 26 different

nationalities between them.

10 Associated British Foods plc Annual Report 2023

Our unique ownership structure

The Group’s majority shareholder is Wittington

Investments Limited, a privately owned company

which in turn is majority owned by the Garfield

Weston Foundation. The Foundation is one of the

UK’s leading grant-making charitable institutions and

is mainly funded by the dividends from Associated

British Foods. The returns we generate therefore

matter not only for shareholders, but also to many

charities. In its last financial year to 5 April 2023,

theFoundation donated £90m to around 2,000

charities across the UK and in the 65 years since

theFoundation was created it has disbursed more

than £1.5bn in grants.

…to create long-term value for all our stakeholders.

1. Customers

2. Investors and shareholders

3. Employees

4. Suppliers

5. Communities

6. Governments

Our people, culture and values

We understand the value of good people, strong and accountable

teams, the power of brands, the need for continuous investment

and the need to maintain strong and enduring relationships

withcustomers and suppliers.

Across all our businesses, we live and breathe our values

through the work we do every day, from investing in the

healthand safety of our colleagues, to promoting diversity and

inclusion and respecting human rights. Our values are: respecting

everyone’s dignity; acting with integrity; progressing through

collaboration; and delivering with rigour.

We pride ourselves on being a first-class employer, working

actively to develop our people and create opportunities for

progression. As a result, 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.

The Group, or corporate centre, provides a framework for the

sharing of ideas and best practice. The Group is in constant

dialogue with the people who run our businesses, giving our

corporate leaders a comprehensive overview of their material

opportunities and risks and enabling collaboration, where

appropriate. Because the centre is small and uses short lines of

communication, we can also ensure prompt and unambiguous

decision-making.

The chart to the left shows how our business model works,

from the discussion and scrutiny of each business by the Group

leadership team to oversight by the Board through our

structured governance framework.

Creating long-term value

We take a long-term view to create long-term value for our

shareholders, business partners, employees and the

communities in which we operate. Our strategy is to achieve

sustainable growth over the long term and the Group balance

sheet is managed to ensure long-term financial stability,

regardless of the state of the capital markets. We are

committed to increasing shareholder value through sound

commercial and responsible business decisions that deliver

steady growth in earnings and dividends.

Our ownership structure provides us with the stability to invest

in businesses that we believe in and to support the growth

ofthose businesses over the long term. Our growth has been

mostly organic, achieved through investment in marketing,

development of existing and new products and technologies,

and through targeted capital expenditure to improve efficiency

and expand capacity. Acquisitions are carefully selected to

complement existing business activities and exploit opportunities

in adjacent markets or geographies; disposals are made when

judged the best route to creating shareholder value.

Our long-established, disciplined approach to capital investment

underpins our growth. We manage our balance sheet to provide

the headroom necessary to fund long-term investment and

wemake funding available to all our businesses, providing

thatanalysis of their investment proposals proves sound and

thefinancial returns meet or exceed a set of clearly defined

criteria.Webelieve that this approach, coupled with a rigorous

commitment to ethical conduct and sustainable business

practice, is the best way to create enduring value for all

ourstakeholders.

The Foundation has

disbursed more than

£1.5bn

in grants since 1958

11Associated British Foods plc Annual Report 2023

We use key performance indicators (KPIs) to measure our progress in delivering the successful

implementation of our strategy and to monitor our performance.

KEY PERFORMANCE INDICATORS

Tracking our progress

Financial indicators

* Impacted by COVID-19 pandemic.

** APMs as defined on pages 189 to 191.

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.

Cash generation Net cash before lease liabilities**Gross investment**

Adjusted operating proﬁt**Group revenue Adjusted earnings per share**

Adjusted proﬁt and earnings measures

providea consistent indicator of performance

year-on-year and are aligned with management

incentive targets.

Revenue is a measure of businessgrowth.

Constant currency comparisons are also used

to provide greater clarity ofperformance.

The Group’s organic growth objective aims

to deliver steady growth in earnings over

thelong term. Adjusted earnings per share

isa key management incentive measure.

Net cash generated from operating activities

ismonitored toensure that proﬁt is converted

into cash for future investment and to return

toshareholders.

This measure monitors the Group’s

liquidity and capital structure and is used to

calculate ratios associated with the Group’s

banking covenants.

A measure of the commitment tothe

long-term development of the business.

Dividends per shareFinancial leverage**Return on average capital

employed**

The Group’s organic growth objective aims

todeliver steady growth in dividends over

thelong term. This included the payment

ofa13.80p and 12.70p special dividend in

2021 and 2023 respectively.

This measure monitors the Group’s financial

strength toensure long-term financial stability.

The 2019 figure is given on an IFRS 16 pro

forma basis.

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.

2,000

(£m)

1,753

1,509

1,413

1,153

1,654

‘19 ‘20 ‘21 ‘22 ‘23

2,000

(£m)

1,558

936

1,901

1,488

895

‘19 ‘20 ‘21 ‘22 ‘23

1,200

(£m)

641

837

721

930

1,171

‘19 ‘20 ‘21 ‘22 ‘23

150

(pence)

81.1*

137.5

80.1*

131.1

141.8

‘19 ‘20 ‘21 ‘22 ‘23

2,000

(£m)

1,024*

1,421

1,011*

1,435

1,513

‘19 ‘20 ‘21 ‘22 ‘23

(£bn)

13.9*

15.8

13.9*

17.0

19.8

‘19 ‘20 ‘21 ‘22 ‘23

(pence)

nil

46.35

26.7013.80

43.70

12.70 33.10

‘19 ‘20 ‘21 ‘22 ‘23

1.5

1.1

1.2

0.7

0.8

1.0

‘19 ‘20 ‘21 ‘22 ‘23

(%)

9.5

19.3

9.8

14.0

13.6

‘19 ‘20 ‘21 ‘22 ‘23

12 Associated British Foods plc Annual Report 2023

Non-financial indicators

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 2023 metrics. See the 2023 ABF Responsibility Report, page 114, for EY’s assurance statement.

* Impacted by COVID-19 pandemic.

Number of farmers trained in Primark

Sustainable Cotton Programme (PSCP)

Lost time injuries and lost time

injuryrate (%)

Number of employees, highlighting

percentage of women in workforce

This includes farmers that are currently being

trained and those that have completed training

under the programme.

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.

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

proportion of our employees that have

disclosed their gender as female/woman

inline with the local legislation.

Read more on page 50 Read more on page 51 Read more in our 2023 ResponsibilityReport

ABF Scope 1 and 2 GHG emissions Total energy consumed and

proportion from a renewable source

Primark Scope 1, 2 and 3

GHG emissions

The amount of ABF Group Scope 1 and 2

greenhouse gas emissions.

Total energy used and the proportion of

which is from renewable sources. Renewable

energy is mainly generated on our sites from

biogenic sources.

The amount of Primark’s Scope 1, 2

and 3 greenhouse gas emissions.

Read more on pages 52 and 53 Read more on pages 52 and 53 Read more on page 53

Primark selling space and number

of countries of operation

Total water abstracted Proportion of clothing sales (units)

containing recycled or more

sustainably sourced materials

Read more on page 31 and 32 Read more on page 32 Read more on pages 54 and 55

These two measures represent the retail space

growth and breadth of Primark’s presence.

This measure includes water supplied by third

parties or from local water resources.

Primark Cares products are assessed against

Primark’s protocols regarding minimum

content levels which will vary by material.

These protocols have evolved during the year

with products assessed against protocols

existing at the date of production.

800

406

682

346

355

348

∆

‘19 ‘20 ‘21 ‘22 ‘23

0.35

%∆

0.36

0.39

0.42

0.65

300,000

132,771

53,689

146,069

252,800

299,388

∆

‘19 ‘20 ‘21 ‘22 ‘23

160,000

133,425

138,097

127,912

132,273

133,487

∆

‘19 ‘20 ‘21 ‘22 ‘23

%∆

8,000

(000 tonnes of CO

5,247*

6,406

4,725*

6,576

7,139

∆

‘19

‘20

* ‘21*

‘22 ‘23

5,000

(000 tonnes of CO

3,555*

3,993

3,161*

3,107

2,915

∆

‘19 ‘20 ‘21 ‘22 ‘23

30,000

(GWh)

22,877

23,566

21,990

21,046

21,183

∆

‘19 ‘20 ‘21 ‘22 ‘23

%∆

20,000

(000 sq ft)

16,247

15,642

16,842

17,302

18,198

∆

‘19 ‘20 ‘21 ‘22 ‘23

(%)

16%

25%

45%

55%

∆

‘19 ‘20 ‘21 ‘22 ‘23

1,000

(million m

)

847

880

864

796

860

∆

‘19 ‘20 ‘21 ‘22 ‘23

13Associated British Foods plc Annual Report 2023

Operating review

Grocery

A selection of grocery products from

ourbusinesses around the world

Grocery comprises brands

which occupy leading

positions in markets across

the globe. In the UK, nine

outof 10 households use

ourbrands.

Revenue

£4,198m

2022: £3,735m

Actual currency: up 12%

Constant currency: up 11%

Adjusted operating proﬁt

£448m

2022: £399m

Actual currency: up 12%

Constant currency: up 8%

Adjusted operating proﬁt margin

10.7%

2022: 10.7%

Operating profit

£402m

2022: £369m

Actual currency: up 9%

Return on average capital

employed

30.0%

2022: 29.3%

14 Associated British Foods plc Annual Report 2023

Operating review

Our Grocery businesses performed with great resilience in what

were challenging inflationary conditions. Revenues were strongly

ahead of last year driven primarily by price increases through the

course of the year to mitigate cost inflation. Despite the challenges

of dealing with inflation volatility, adjusted operating profit margin

held at 10.7%, helped in part by a recovery in our Allied Bakeries

business. Adjusted operating profit for the year was 8% higher

at £448m. In the first half of the year revenues were 10% higher

than the same period a year ago. In the second half, revenues

were 12% higher. The difference in the growth rates predominantly

reflects the lag between the input cost inflation of the prior year

and the first half of this financial year and the time taken to

implement pricing. As this year progressed, inflation abated

somewhat. Adjusted operating profit in the first half was £173m,

down 10% on the same period a year ago. However, in the second

half adjusted operating profit increased by 23% to £275m as the

effect of pricing came through.

Our group of international brands – Twinings, Ovaltine, Blue Dragon,

Patak’s, Jordans and Mazzetti – largely performed well. Sales at

Twinings moved higher on pricing to recover input cost inflation,

with volumes broadly flat. Within this, there were good

performances in the US, UK, Australia and France. The brand

conducted a number of marketing trials in the year as a prelude to

deploying marketing spend to drive further growth. Sales of fruit and

herbal infusion teas have increased significantly and are now close

to those of black teas. Ovaltine sales also moved higher, with good

performances in Brazil, Switzerland and Nigeria partially offset by

lower foodservice sales in China and by difficult trading conditions

in Myanmar. We saw an increase in sales of Ready-to-drink products

in Thailand but lower sales of higher margin powder products.

Patak’s and Blue Dragon both traded well. Half the sales of Patak’s

are now located outside the UK where we delivered good growth,

and the brand also delivered strong growth in the US and good

growth in Australia. Blue Dragon delivered strong value growth,

increasing further its proportion of international sales with growth in

the US and Canada. Jordans had a resilient year, broadly maintaining

its international sales. The Mazzetti brand of balsamic vinegars

continued its international growth and nearly half of sales are now

outside Europe.

As noted above, in the US our international brands performed well.

Our US focused brands and businesses also traded well. Mazola,

the leading brand in the US edible oils category, delivered strong

volumes and profitability supported by new production capabilities.

Sales of our Fleischmann’s yeast and baking ingredients products

have also been strong. Stratas, our joint venture in the US that

supplies oils and other products to the foodservice, ingredients and

retail markets, traded strongly due to improved sales mix and good

procurement of oils.

In our UK focused brands and businesses, the sales trajectory

of Allied Bakeries improved considerably through the course

of the year due to higher volumes, stronger pricing and operational

improvement. We continue to work on improvements to the

financial performance of this business. Ryvita continues to

underperform but is investing in a brand relaunch and early results

are positive. Shortly after the period end we acquired the Capsicana

range of Latin American products such as tortillas, pastes, kits and

seasoning mixes, broadening further our range of world foods.

In our Australian focused brands and businesses, sales at our Tip

Top brand increased due to pricing taken to mitigate cost inflation.

Performance at Don was held back by high meat costs, labour

shortages and the insolvency of a major distribution business.

As a result, we have conducted a value in use assessment which

has led to a non-cash exceptional impairment charge of £41m.

Investment continued, with major projects including the

re-construction of the Canning Vale bakery in Western Australia

which will secure Tip Top’s position as the leading supplier in that

state and the first part of Ovaltine’s investment in a production

facility in Nigeria to serve markets across West Africa. We have

also invested in increased edible oil production capacity in the US.

The division has also stepped up its investment in core

technology platforms.

About Grocery

International

Twinings has been blending tea since it was founded in 1706 and

now sells premium teas and infusions in more than 100 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

hasa heritage of using traditional methods to produce 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.

North America focused

We make and market leading US, Mexican and Canadian cooking

and baking branded products. These include Mazola and Capullo

cooking oils, Fleischmann’s yeast, Karo corn syrup and Argo corn

starch. Anthony’s Goods is a leading brand of organic and natural

better-for-you 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 foodservice market, specialist packaged

oils andfats for food ingredients, and private-label bottled oil for

theretail market.

UK focused

We have a broad set of food brands and businesses focused in the

UK. Kingsmill produces a range of bakery products for the whole

family. Dorset Cereal’s 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

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. 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 https://www.abf.co.

uk/our-businesses/a-z-finder.

15Associated British Foods plc Annual Report 2023

OPERATING REVIEW – GROCERY CONTINUED

A poster advertising Tip Top’s new premium bun range

Thai consumers favour Ovaltine’s

Ready-to-drink products

Ovaltine has been a household name and

staple product in Thailand for more than

80years. This year, as the Thai economy

continued to recover from the effects of the

COVID-19 pandemic, we saw consumers

favouring our Ready-to-drink (RTD) format.

Our RTD products grew by 17.1%, driving growth across the

malted beverage category but also significantly outperforming it.

This surge in popularity was due not only to advertising but also

to a desire for convenience, with RTD growth stronger in urban

centres where this format is even more important to consumers.

Our new advertising helped strengthen the brand image, with

the campaign ‘Promoting love and warmth in the family’

resonating well.

In the past year, Ovaltine Ready-to-drink reached its highest

consumption at 243 million serves, an increase of more than

20% on the previous year.

Tip Top’s expanded foodservice offering

Tip Top is a key player in Australia’s bakery

market, serving both the retail channel and

thefoodservice channel, which includes

restaurants, cafés and clubs. The retail bakery

market is quite mature, but we have leveraged

drivers of growth such as ‘out of home’ dining

and premiumisation to deliver impressive sales

growth in the foodservice channel over the

lastthree years.

Despite the challenges brought on by the pandemic, when

many restaurants and cafés were forced to close, the trend for

consumers to dine ‘out of home’ bounced back and continues

to grow. This is demonstrated by foodservice’s impressive

five-year growth rate of 8%, significantly above the 5% growth

rate achieved in retail sales over the same period. Over the past

two years, Tip Top has outperformed the market and driven

sales by focusing on premiumisation of its product range and

arevitalised channel strategy, which focuses on our three key

routes to market: ‘quick service restaurants’ (QSR), distributors

and direct accounts.

A great example of this progress is in burger buns, where

wehave significantly improved our product offering. Our new

range of premium buns – which are glazed, noticeably softer

and better-tasting – have been very well received by our QSR

customers and, importantly, by consumers too. This new

range– which includes potato, brioche-style and milk buns

–hasdriven impressive sales growth and transformed the

performance of the burger bun category. This trajectory looks

set to continue as we partner with our customers in the QSR

segment and expand our customer base in the fast-growing

andhigh-value hotels, restaurants and cafés segment. As we

like tosay – it’s the bun that makes the burger!

An advert for Ovaltine Smart and Ovaltine Base, two of our

popular Ovaltine RTD products in Thailand

16 Associated British Foods plc Annual Report 2023

Strong brand propositions driving

growth intheUS

This year has been notable for the strong

progression in the US enjoyed by a number

ofour brands despite a challenging

retailenvironment.

Twinings is now the fastest-growing tea brand in the

Americanmarket. Our products are enjoyed in half a million

more households compared with three years ago, the

greatestincrease in household penetration of any tea brand.

Weachieved this outperformance by broadening our offering,

both in terms of ranges and pack sizes; by evolving our

marketing to become more modern, distinctive and relevant

totoday’s consumers; and by building strong relationships with

our retail partners.

In addition to strong growth in traditional retail, we are now

thenumber one selling tea brand on Amazon. We have

developed a powerful, collaborative partnership with Amazon

and revamped our brand store to showcase compelling content.

We keep the consumer at the heart of what we do, creating

meaningful and engaging advertising, enhancing search engine

optimisations and making it easier for consumers to find and

buy the Twinings products they are looking for.

Our Mazola cooking oil brand bucked the category trend, which

was impacted by inflation resulting in a decline in the overall

market. It grew market share to return to its position as the

number one branded cooking oil in the US.

Weaccomplishedthis by using targeted digital and TV

advertising to strengthen brand loyalty and remind consumers

of the heart-healthy benefits of Mazola corn oil.

Some of our branded products that have proved particularly

successful in the US

Our Fleischmann’s yeast brand also used digital and social

media to promote the brand, extolling the benefits of home

baking to consumers and helping us grow the category and

ourmarket share. The cost-of-living crisis is cited as the reason

behind declining volumes across 86% of US grocery categories

but, with home-baking remaining elevated, commercial

activitiesto promote Fleischmann’s helped the yeast category

grow more than 5%.

Our Blue Dragon and Patak’s world food brands have been

available on the US market for many years but the pandemic

was a pivotal moment for them. With restaurants closed,

consumers wanted to enjoy international cuisines by cooking

them at home, a trend that continued post-pandemic.

Growthwas also fuelled by changing consumer trends, with

professional chefs finding innovative ways to use rice and nori

wrappers, including frying them or adding them as a topping

tosalads and poke bowls.

The Asian food category is worth $1bn annually and Blue

Dragon is one of many players in this market. However, we

have the added advantage of being pan-Asian, offering Thai,

Chinese, Vietnamese and Japanese ranges. Blue Dragon is

nowthe number one spring roll wrapper in the US and we are

broadening our offering to include Asian sauces and a selection

of egg, riceand soba noodles, as well as a range of products

including Thai paste and coconut milk to help consumers make

authentic Thai curries at home.

17Associated British Foods plc Annual Report 2023

Our Ingredients businesses

are leaders in yeast and

bakery ingredients as well as

in specialty ingredients for

the food, human and animal

nutrition, pharmaceutical

and various other industries.

Revenue

£2,157m

2022: £1,827m

Actual currency: up 18%

Constant currency: up 15%

Adjusted operating proﬁt

£214m

2022: £159m

Actual currency: up 35%

Constant currency: up 28%

Adjusted operating proﬁt margin

9.9%

2022: 8.7%

Operating profit

£201m

2022: £141m

Actual currency: up 43%

Return on average capital

employed

16.1%

2022: 14.8%

Ohly process engineer sampling

productto ensure quality

Operating review

Ingredients

18 Associated British Foods plc Annual Report 2023

Operating review

Ingredients had a very strong year with substantial increases in both

revenues and profits and, significantly for the future development

of these businesses, higher investment in both production capacity

and capability.

Revenues were well ahead of last year primarily due to pricing

action to recover large increases in raw material and other input

costs which were apparent both this year and in the prior financial

year. Revenues in the first half of the financial year were ahead of

the same period last year by 27% at £1,088m. In the second half

of this financial year, revenues were 6% ahead at £1,069m.

Profitability this year was well ahead of the last financial year as the

benefits of pricing were felt, with volumes proving generally resilient

and a particularly strong performance by AB Mauri, our yeast and

bakery ingredients business. In the first half of the financial year,

Ingredients’ adjusted operating profit was 48% higher than the

same period a year ago at £102m; in the second half of the period,

adjusted operating profit was 14% higher at £112m.

AB Mauri had a very strong year with significant increases in both

revenues and profit. Price increases lagged prior year input cost

inflation as customer contracts came up for renewal. As these

contracts were repriced, the benefits came through strongly with

little impact on volumes. Demand for yeast remained good, both

from industrial bakers and from consumers who returned to home

baking during the pandemic. Sales and profitability were particularly

strong in the US. Elsewhere, hyperinflation continued in Argentina,

Venezuela and Turkey with a consequent need for frequent

repricing. Transition of our China business to our joint venture

was completed.

We continue to invest in effluent treatment plants at many sites

todeliver on our commitment to maintain appropriate standards

ofwater quality, this investment being significant in recent years.

More broadly, the company’s water strategy focuses on reducing

itswater-intensity ratio defined as the quantity of water consumed

per tonne of product produced, excluding by-products. AB Mauri

hasreduced its overall water-intensity ratio by 25% since 2017/18.

ABF Ingredients, our portfolio of specialty ingredients businesses,

delivered a solid increase in revenues derived from pricing taken

to offset input cost inflation, partially offset by a small decline in

volumes, particularly in the second half of the period as customers

destocked following the stabilisation of supply chains. Profits were

slightly lower year-on-year as we continue to invest in these growth

businesses to enhance capability in both research and development

and in commercial activities.

Specifically, AB Enzymes, specialising in food and feed enzymes,

had flat sales with pricing offsetting lower volumes caused by

destocking. Ohly, specialising in yeast extracts, delivered good

revenue growth driven by robust demand from food and

bionutrients customers. SPI Pharma, specialising in pharmaceutical

excipients, continued to progress with pricing and volume growth

and an improvement in manufacturing efficiency. ABITEC,

specialising in lipids, delivered a modest increase in sales driven

by a solid performance in the Pharma and Nutritional Science

sectors. Fytexia, our life sciences businesses acquired last year,

continued to perform well. PGPI, which specialises in extruded

proteins, saw volumes fall due to lower consumer demand for

nutrition bars in the US.

Investment continued, with major projects including a powder

packing line for AB Enzymes at Rajamaki, Finland, and increased

capacity at Ohly’s fermentation and spray dryer operations in

Hamburg. In Mauri ANZ, investment in our animal feed mill in Hope

Valley in Western Australia was completed and commissioned. Our

specialty yeast plant in Hull has now been commissioned.

About Ingredients

ABF Ingredients (ABFI)

ABFI is a global leader in specialty ingredients offering innovative,

differentiated, sustainable and value-added products to the food,

health and nutrition, pharmaceutical, animal health and industrial

sectors. Our ingredients are an essential part ofproducts that are

just as likely to be found in the kitchen and medicine cabinet as

inproduction units and research laboratories.

We have over 1,200 employees and serve customers in more than

50 countries from manufacturing and R&D facilities in 15 countries

across Europe, the Americas and India. ABFI comprises seven

businesses which operate worldwide with distinct identities.

AB Biotek Human Nutrition and Health uses fermentation

technology to provide microbiome modulating solutions for health

and nutrition applications.

AB Enzymes is an industrial biotech business specialising in

enzymes. Applications derived from our technology are used in the

bakery and other food and beverage markets, as well as in animal

nutrition, pulp and paper, detergent and other technical markets.

ABITEC Corp. supplies specialty lipids, surfactants and reagents for

the pharmaceutical, nutritional and specialty chemical industries.

Fytexia is a life science company specialising in the identification,

characterisation and development of polyphenol-based active

nutrients, extracted from botanicals, and used by the dietary

supplements industry.

Ohly produces a range of innovative yeast extracts and culinary

powders specially developed to enhance the taste of customer food

recipes, as well as yeast-based functional ingredients for both

animal and human nutrition and health.

PGP International produces specialty flours and extruded

ingredients for use in a wide range of nutritional products such

asenergy bars.

SPI Pharma supplies antacids, pharmaceutical excipients and drug

delivery solutions to the pharmaceutical industry.

AB Mauri

AB Mauri has a global presence in bakers’ yeast with significant

market positions in the Americas, Europe and Asia. We have over

5,000 employees and sell our products to customers in over 100

countries, operating from 52 plants across 32 countries. We are a

technology leader in bakery ingredients, supplying bread improvers,

dough conditioners and bakery mixes to industrial and craft bakers

across the globe. The business employs experts who have

extensive knowledge and understanding of the functionality of yeast

and bakery ingredients and of the raw materials and processes to

produce them. In addition to bakers’ yeast, AB Mauri supplies

specialty yeast products to a wide range of other markets, providing

associated technologies and fermentation capability to the alcoholic

beverages, bioethanol and animal nutrition markets.

Mauri ANZ

Mauri ANZ is a baking ingredient company, with production and

milling capacity in Australia and New Zealand. Our product portfolio

includes bakers and speciality flours, yeast, dough improvers and

pre-mixes for cakes and breads.

New Food Coatings

We also 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.

19Associated British Foods plc Annual Report 2023

It is this consistency that has made our levadura fresca product,

or fresh yeast, a household name in the country since its origins

in 1923. Calsa, which was created as a high-quality yeast for

legendary Argentine bakery Virgen, has evolved to become

ABMauri’s flagship product in Argentina.

Calsa’s dedication to the skilled craft of bakery has endured

fordecades, particularly in the 1960s, when the brand featured

a much-expanded product, and in the 1970s when we

introduced a school of bakery. With the launch of this

educational initiative we deepened our business strategy,

thereby delivering on Calsa’s ultimate mission and purpose:

tohelp develop the artisan bakers of tomorrow. Thebakery

school still serves as a trusted mentor to home and commercial

bakers across Argentina.

OPERATING REVIEW – INGREDIENTS CONTINUED

An advert celebrating the

100

anniversary of Calsa,

ourconsumer yeast brand

Fast-forwarding to the 1990s, Calsa underwent further

significant development with the addition of a premium lineup

of silver-branded bakery and pastry ingredients which has

proved important to its current success.

Today the collection is led by Calsa’s traditional fresh yeast as

well as other innovative products featuring added sourdough,

better kneading and mixing capabilities, and more.

Calsa continues to lead the industry by staying true to the

purpose established a century ago, prioritising what is important

for artisan and home bakers in Argentina. We continue to

nurture this reputation through the creation of the freshest,

highest-quality handmade bakery products and our focus on

consistent and well-executed serviceto customers.

Celebrating the centennial of an iconic brand inbakery ingredients

In Argentina this year we celebrated the 100

anniversary of Calsa, AB Mauri’s consumer

yeastbrand. Calsa is well known there for its high quality, innovation and customer service,

areputation which we havedeveloped over the past century.

20 Associated British Foods plc Annual Report 2023

Capacity expansion at Ohly’s Hamburg plant

After multiple years of sales and volume

growth at our Hamburg plant, where we

produce innovative yeast extracts, we

implemented a significant programme of

investment to increase capacity and efficiency

to enable us to continue to service increasing

customer demand.

This investment will also improve environmental performance

and enhance our ability totailor products to customer needs.

Ohly’s strong growth has been driven by our product-led

commercial teams, who have developed deeper insights into

both their sectors and customers’ needs in key markets such as

food, health and nutrition, animal health, and bionutrients.

We have invested in a state-of-the-art drying tower which, once

complete, will enable us to dry a significant proportion of our

yeast extract products on-site, reducing the distance our

products have to travel during processing. This new equipment

will also reduce the amount of electricity and water used during

the drying process by 10%, enhancing our efficiency and

improving our environmental footprint.

We have also invested in a new on-site fermentation facility.

Thiscutting-edge system has been designed specifically for

themanufacture of our products and will increase production

capacity by 50%. The investment should also enable us to run

our fermentation process using approximately 40% less water,

30% less natural gas and 25% less electricity.

These two investments will enable us to meet customer

demand, which has nearly doubled over the last seven years. It

will also provide us with the capability to tailorour products to

these markets, as well as the potential forfurther innovation.

Ohly project engineers looking at site plans

21Associated British Foods plc Annual Report 2023

AB Agri is an international

agri-food business and a

leader in the UK supplying

farm performance services,

animal feed, speciality

ingredients and supplements

to farms, feed manufacturers,

food producers and retailers.

Revenue

£1,840m

2022: £1,722m

Actual currency: up 7%

Constant currency: up 7%

Adjusted operating proﬁt

£41m

2022: £47m

Actual currency: down 13%

Constant currency: down 15%

Adjusted operating proﬁt margin

2.2%

2022: 2.7%

Operating profit

£32m

2022: £41m

Actual currency: down 22%

Return on average capital

employed

8.4%

2022: 10.3%

Operating review

Agriculture

An AB Vista laboratory technician

preparing testing solution for feed

sample analysis using our automated

analyser technology

22 Associated British Foods plc Annual Report 2023

Operating review

AB Agri revenues were up 7% against the same period last

year driven by pricing taken to mitigate input cost inflation,

partially offset by lower volumes in the UK and China compound

feed businesses. By period, revenue in the first half grew

15% compared to the same period a year ago but fell by 1%

year-on-year in the second half, largely reflecting movements in

input commodity prices. As a result of these challenging market

conditions, adjusted operating profit reduced to £41m despite

a modest recovery in the second half of the financial year.

There was a decline in the size of the European pig and poultry

sectors as a result of disease and high cost of inputs, reducing

sales volumes and margins in our compound feed and starter

feed businesses. The dairy sector was more resilient, and we

saw higher revenues and profits in our businesses serving that

sector. In China, lockdowns caused by the pandemic depressed

demand for pork products and reduced pig herd sizes, resulting

in a decline in that market. AB Vista, our international feed

additives business, traded robustly with sales and profits both

slightly higher. The performance at Frontier, our joint venture

specialising in farm crop inputs and grain marketing, was only

slightly lower than the record results achieved last year as grain

and fertiliser trading normalised.

We believe there is an opportunity to develop a unique full

service offer to the dairy sector. In August 2023 we completed

the acquisition of National Milk Records for £48m which

provides services to the dairy supply industry including

testing services and management information which are

complementary to AB Agri’s existing services. This follows our

acquisition in November 2022 of Kite Consulting and Advance

Sourcing which also serve customers in this sector.

About Agriculture

AB Agri employs more than 3,000 people around the world.

Wesell products and services into more than 100 countries and

our global operations continue to grow.

We have an expert understanding of agriculture and animal

nutrition and we combine data and technology with industry

expertise to enable the production of nutritious and

affordablefood.

Our core capabilities include:

Creating innovative nutrition and technology-based

products –we are a major investor in innovation of speciality

feed ingredients for livestock, equine and pet foods. We

develop pioneering ingredients including feed additive products,

high-quality bespoke vitamin and mineral pre-mixes, starter

feeds and alternative proteins.

Making animal feed – AB Agri is one of the UK’s largest

compound feed businesses for pig and poultry customers and

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 and plan to increase global manufacturing further.

Delivering farm performance services for the agri-food

industry – our data and technology platforms deliver targeted

insights that help create continuous improvement for agricultural

supply chains. We work with major food processors, retailers

and directly with farmers, enabling them to:

• increase productivity and yields sustainably;

• improve animal wellbeing and husbandry; and

• develop quality assurance and operate in a more

sustainable way.

Our products, insights and technological solutions enable our

customers to produce high-yielding, safe and nutritious food

using fewer chemicals whilst safeguarding natural resources

and reducing environmental impact.

We also have a 50% ownership in Frontier, the UK’s largest

arable farm inputs and grain marketing business. Its customers

are some 25% of arable farmers in the UK and many UK food

producers andprocessors. It supplies seed, crop protection

products and fertiliser to farmers, as well as providing specialist

agronomy and crop marketing advice. Frontier also works with

farmers to increase the biodiversity of their farms and implement

practices which help productivity and carbon reduction and

sustainability. Its food customers look to Frontier for reliable

supplies ofqualityagricultural products as well as procurement

advice andlogistics service.

23Associated British Foods plc Annual Report 2023

AB Vista’s evolution from enzymes to a feed

additive business

AB Vista is a leader in feed enzymes and one

ofthe largest suppliers of yeast and natural

betaine to the global animal nutrition industry.

We recently broadened our portfolio through

acquisitions and in-house product development

into the highly profitable additives market.

We are focused on better protecting animal gut health in

livestock agriculture through additive solutions to help animals

better cope with environmental and biological challenges that

could otherwise result in both ill health and reduced productivity.

We launched Signis, an AB Vista product that is proven to

accelerate the fermentation of fibre in the gut. We also acquired

the intellectual property for Progres, a patented natural feed

material derived from coniferous trees. Developed in Finland,

where resin has been used as a natural treatment for centuries

due to its natural antiviral, antibacterial and anti-inflammatory

properties, Progres is the only natural feed material on the

market with a proven direct effect on intestinal integrity.

Itsactive ingredients, resin acids, reduce the damage caused

byinflammation, with proven application so far in poultry and

livestock. Having acquired Progres, we can now leverage our

global supply chain to bring this product to new markets while

continuing to develop our portfolio to support our customers

inthe journey to produce feed and food more responsibly.

OPERATING REVIEW – AGRICULTURE CONTINUED

An AB Vista laboratory technician

preparing testing solution for manual

analysis of our phytase products

24 Associated British Foods plc Annual Report 2023

Expanding AB Dairy through acquisition

As the global population increases, the need

toprovide nutritious, affordable protein that can

be produced sustainably has never been greater.

The dairy industry stands to benefit from this demand and milk,

as one of the lowest-emitting andaffordable animal proteins,

isparticularly well positioned. There is also ample scope to

improve productivity through the integration of insights and

technology to inform nutrition, genetics and feeding strategies.

In the UK, data is routinely collected across a range of inputs,

such as diet and genetics, and outputs such as milk production

volumes and quality. However, this data is yet to be collated and

interpreted in a way that gives farmers a deeper understanding

of optimal dairy cow performance. Building on our 30 years’

experience supplying feed and providing nutritional expertise,

we have acquired three businesses to help the industry

respondto these challenges and enable more sustainable

andprofitable dairy farming.

Kite Consulting is a specialist dairy consultancy, providing

practical and strategic advice on dairy farm performance across

the food supply chain from farmers and food processors right

through to retailers. Kite is known for its technical and business

consultancy service, which supports dairy farmers in their

efforts to improve the efficiency of their business and herd, and

for its sustainability advisory service, which helps them reduce

the carbon footprint of dairy production.

International Farm Comparison Network (IFCN) is a global dairy

research network, providing globally comparable economic data

and forecasts through partnerships with researchers, dairy

companies and organisations in over 100 countries. Its dairy

farm economics model is accepted as the global standard for

comparing and understanding dairy systems, helping to secure

profitability and sustainability in dairy farming by enabling users

to understand the drivers that contribute to better performance.

National Milk Records (NMR) provides a range of milk quality,

herd health and genomic testing services to farmers and milk

buyers, as well as providing an independent source of data for

third parties such as vets, farm consultants and breed societies.

Data is used to provide the phenotypic database for UK genetic

evaluation, and the milk recording database is used to provide

the basis of food provenance schemes run by major

supermarket retailers.

Together, these businesses provide unrivalled capability to

combine milk, health, genomics and dairy industry insights,

aswell as the ability to help farmers consistently use these

insights to make more precise and timely decisions.

One of our AB Agri consultants with a

client farmer on their farm in Somerset

25Associated British Foods plc Annual Report 2023

ABF Sugar produces a range

of food, feeds, fuels and

other products from sugar

cane, sugar beet and wheat

in Africa, the UK, Spain and

China.

Revenue

£2,547m

2022: £2,016m

Actual currency: up 26%

Constant currency: up 29%

Adjusted operating proﬁt

£169m

2022: £162m

Actual currency: up 4%

Constant currency: up 8%

Adjusted operating proﬁt margin

6.6%

2022: 8.0%

Operating profit

£119m

2022: £164m

Actual currency: down 27%

Return on average capital

employed

9.7%

2022: 10.3%

Operating review

Sugar

British Sugar refinery technician

monitoring sugar crystallisation

26 Associated British Foods plc Annual Report 2023

British Sugar production levels were exceptionally low at

0.74 million tonnes, 27% lower than the prior year’s campaign,

the result of a sequence of unusually poor weather conditions which

reduced the crop size and lowered beet yields and sugar content.

The business secured alternative sources of supply in order to fulfil

customer contracts but profitability was significantly reduced

as a consequence in the second half of the year. In the course

of the year energy costs remained at elevated levels, but were

partially offset by strong pricing for electricity produced and other

co-products. Profitability for the year at British Sugar was lower

as a result of the combination of these factors.

Azucarera, our Spanish sugar business, benefitted in the course of

the year from the higher prices, partially offset by elevated costs for

beet, raw sugars and energy. Beet sugar production was lower than

the prior year due to hot and dry weather, and additional purchasing

of raw sugars for refining was required in order to support sales.

Overall production was down 20% at some 0.45 million tonnes.

Our Illovo Sugar Africa business performed very well. The business

continues to develop sales and higher margin routes to market

for pre-packed branded sugar in Malawi, Tanzania and Zambia.

Overall, Illovo sugar production was 1.53 million tonnes compared

to 1.45 million tonnes in the previous financial year reflecting the

recovery in production in Eswatini and good production in Malawi

and South Africa partially offset by the impact of flooding in

Mozambique. The combination of higher volumes and strong

pricing resulted in both sales and profit being well ahead of last year.

Construction of our new sugar mill in Tanzania continues and will

increase our production capacity considerably in that country.

At the end of February, severe flooding in Mozambique affected

our cane estate at Maragra and most of our partner-grower

operations. The Maragra mill will not open for sugar production

this season and as such we have taken a non-cash exceptional

impairment charge of £35m in these accounts to write down

the net asset value of this business.

The trading performance of AB Sugar China was below last year

as a result of lower demand caused by lockdowns earlier in the year.

More recently the relaxation of restrictions has caused sugar prices

to recover strongly. However, trading remains difficult and we have

reviewed our outlook for this business, including the forecast for the

evolution of beet crop area and yields. As a result, we have taken

a one-off non-cash adjustment of £15m as an exceptional

impairment charge this year.

Vivergo incurred substantial losses in the first half due to high wheat

and energy costs and low bioethanol prices. The second half of the

year saw much reduced losses and a significant improvement in

margin and operating performance, particularly in the fourth quarter.

Sugar made good progress in its decarbonisation programme in

thefinancial year. It completed 17 decarbonisation projects across

various sugar processes, which contributed to a 4% reduction

ingreenhouse gas emissions compared with 2022. Among the

projects completed are modifications in the UK to replace coal with

natural gas in the dryers at our Bury St Edmunds processing plant,

improvements to gas turbine performance at ourWissington plant,

the elimination of heavy fuel oil at Cantley, andtheinstallation

ofmore efficient slicer machines at Bury St Edmunds. In addition,

Sugar has also published its transition plan toa low carbon

economyby 2030.

About Sugar

ABF Sugar is a group of agribusinesses which together employ

30,000 people and operate 20 plants in nine countries, with the

capacity to produce some 4.5 million tonnes of sugar annually.

Wefarm more than 330,000 hectares worldwide by ourselves, and

by over 25,000 growers.

In Africa, we have sugar cane operations in Eswatini, Malawi,

Mozambique, South Africa, Tanzania and Zambia, and packing

operations in Rwanda. We are the largest sugar producer in Spain

and in the UK we are the sole processor of the beet sugar crop

andone of the largest bioethanol producers. We also have a sugar

business in China.

Our sugar-making plants are efficient bio-refineries that enable us

toproduce a range of products including sugar, animal feed, biofuels

and a number of speciality products. We have the market leading

consumer brand in over half our markets, including Silver Spoon in

the UK, Azucarera in Spain, Bwana Sukari in Tanzania, White Spoon

in Zambia and Illovo in multiple markets. We are also a large-scale

power generator, with renewable sources providing 60% of our

own energy use as well as significant renewable energy exports

into national grids.

Although we have a global portfolio, we operate on a local basis,

working together to do what is right in each location and market.

Aswe continue to evolve to meet the changing needs of

customers, growers and others, our role is to ensure we use

resources responsibly, build strong rural economies and support

local communities.

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.

Operating review

Sales were well ahead of last year with a strong performance

by Illovo, our African sugar business, which delivered both higher

sugar production and strong pricing actions. Illovo also made good

progress in developing new and higher margin routes to market

through pre-pack branded sugar facilities. In Europe, production was

lower due to adverse weather conditions, but the resulting impact

on profitability was partially offset by good co-product sales.

Revenues were strongly ahead of the prior year driven by higher

sugar pricing, a recovery in production and sales in Eswatini

in Africa following strike action last year, and much higher sales

from Vivergo, our bioethanol plant in Hull. European sugar prices

moved higher this year, building on the price levels seen in the

previous year and driven by lower European sugar production

and higher world market prices. Prices in Africa also increased.

Sales volumes increased modestly, with higher volumes at Illovo

more than offsetting declines at British Sugar and Azucarera.

Total production, at 2.8 million tonnes, is 8% down on last year

reflecting lower volumes as a result of adverse weather affecting

European crops, partly mitigated by strong co-product performance

and partially offset by higher production in Africa driven by the

recovery in Eswatini and good factory performances in Malawi and

South Africa. By period, revenue in the first half increased 27%

to £1.2bn against the same period a year ago; in the second half,

revenue rose 31% to £1.4bn.

Adjusted operating profit was modestly ahead of last year at £169m.

Overall, the contribution from higher sales prices was partially offset

by higher costs for beet, cane and energy. Specifically, profit was

impacted by the need for British Sugar to buy and import sugar

to make good a shortfall in beet sugar production. Overall profits

were held back by the substantial trading losses incurred by Vivergo

in the first half of the year. First half Sugar adjusted operating profit

was 5% ahead of the same period last year at £86m while second

half adjusted operating profit was 11% higher at £83m.

27Associated British Foods plc Annual Report 2023

OPERATING REVIEW – SUGAR CONTINUED

Success in Azucarera’s grower base in

northernSpain

We have transformed our relationship with

sugar beet growers supplying Azucarera’s

factories in northern Spain to deliver an

impressive 70% increase in growing area

forour 2022/23 campaign.

Over the last five years we have developed a commercially

viable model that delivers a tailored, grower-centric proposition

to build confidence in growing beet. The approach is about

much more than price: it is focused on developing a collaborative

model that encourages all parties to work together to minimise

risk and overcome barriers to growing the crop successfully.

Our team negotiates directly with growers to agree a tailor-

made model that works for them. This model encompasses

allaspects of the growing process including buying the inputs

needed to develop the beet crop, selecting the service providers,

and defining the responsibilities and workload. Thisapproach

means all parties are aligned to deliver the best possible

outcomes, resulting in a more equitable share of risk between

us, the growers and service providers.

Our collaborative model also gives growers access to

Azucarera’s significant data capabilities, which provide valuable

insights that can improve yields. Our ‘Visor’ platform gives

growers access to real-time monitoring of crop health, of

irrigation levels and of the evolving sugar content in the crop.

Visor aggregates data across our grower sites, offering

personalised advice and best practice to individual farms to

improve beet yields. Equally, Visor gives Azucarera a significant

competitive advantage as growers are incentivised to work with

us in order to access this powerful monitoring tool that would

otherwise be unavailable to them.

Pulp processing improvement programme

atBritish Sugar

At British Sugar, one of the most valuable

co-products we produce is animal feed. We

make and sell over 500,000 tonnes of feed a

year from sugar beet pulp, the fibrous material

left over from the sugar-making process.

To produce the feed, the wet pulp needs to be dried. The first

step of this process involves mechanically squeezing the pulp

toremove as much residual water as possible, before drying

itat a high temperature in rotating drums which uses a lot

ofenergy. We have therefore been working to find ways to

increase the efficiency of this mechanical squeezing process.

This has included an investment programme to transform our

systems, increasing profitability and reducing energy costs

across our UKsites.

In September 2022, we upgraded the sugar beet pulp press

station at our Wissington factory to include a new, larger,

self-draining press as well as making improvements across

three other pulp presses. These improvements increased the

quantity of water squeezed from the pulp, reducing the energy

required to dry it.

In just over a year of operation the improvements at

Wissingtonalone have delivered a number of substantial

efficiencies, including:

An operator at our Wissington plant holding pressed pulp

anddried animal feed from the pulp processing station

The success is testament to our team’s commitment to

collaboration. By promoting a grower-centric approach,

underpinned by data and technology, we have significantly

increased the growing area and fostered trust and confidence

among our partners to grow beet more efficiently and

moresustainably.

One of our Azucarera employees demonstrating the

Visorplatform to a Spanish sugar beet farmer on their farm

• a 6% overall improvement in the dry content of the pulp;

• a reduction in gas usage of 12% at site and 6% across

thebusiness; and

• a CO

emission reduction of more than 5,000 tonnes

perannum.

This strategy is being replicated across all other sites to deliver

considerable savings and significant carbon reductions.

28 Associated British Foods plc Annual Report 2023

Optimising sugar distribution in Illovo Malawi

In Malawi, we have successfully redesigned

Illovo Sugar’s routes to market to put

customers’ needs at the heart, helping us

toimprove sugar margins and connections with

distributors and stockists. This helped increase

sugar sales to both consumers and industrial

customers across the country.

We did this by developing and implementing a standardised

process across the country, with one of the most important

changes being the introduction of our improved delivery

network. In delivering products to customers instead of them

having to travel to collect stock, this eliminated price disparities

arising from transportation costs being added to the selling

priceof our sugar.

We also expanded our geographic footprint by appointing

newdistributors, opening new container shops in strategic

locations and significantly scaling up our secondary distribution.

Thiscombination of improved delivery and an expanded

footprint has transformed market penetration and ensures

easier and more reliable access to Illovo products in rural areas.

These improvements contributed to a significant increase in our

domestic sales, which have increased by 40% over the last

three years.

Looking ahead, we are committed to refining our processes to

promote closer and stronger relationships with our customers,

improve the availability of sugar in the domestic market and

grow volume and value for our stakeholders.

An Illovo employee with a customer at their container

storeattheThabwa Trading Centre in Chikwawa district,

southern Malawi

29Associated British Foods plc Annual Report 2023

Operating review

Retail

Womenswear in our Oxford Street

Eaststore

Primark is one of the largest

clothing retailers in Europe,

with the highest sales by

volume in the UK and a

growing presence in the US.

In total, we have 432 stores

in 16 countries across Europe

and the US.

Revenue

£9,008m

2022: £7,697m

Actual currency: up 17%

Constant currency: up 15%

Adjusted operating proﬁt

£735m

2022: £756m

Actual currency: down 3%

Constant currency: down 3%

Adjusted operating proﬁt margin

8.2%

2022: 9.8%

Operating profit

£717m

2022: £550m

Actual currency: up 30%

Return on average capital

employed

12.0%

2022: 12.9%

30 Associated British Foods plc Annual Report 2023

as a return to festive socialising gathered pace. In the new year

sales of beachwear and luggage were exceptionally strong as

customers looked early to holidays. Our summer trading was

good, led by our boho-inspired design trend. Throughout the

year we further broadened our ranges and collaborations to

appeal to customers trying Primark for the first time alongside

existing customers. We expanded our Edit collection, our more

premium essentials range for women, across more stores

which sold well. We also continued our successful UK and

European collaborations with Stacey Solomon, Kem Cetinay,

and Paula Echevarria, and launched our first truly international

partnership with Rita Ora whose first collection sales have

surpassed expectations. Sales of licensed products grew

significantly year-on-year, in particular over Christmas across

our growing portfolio of brand partners including Disney, Netflix,

The Grinch, and US sports partners NFL and NBA. Our summer

Barbie collection with Mattel also proved very successful.

Trading was influenced in the second half of the year by

weather. We saw good sales through the early summer with

the exception of Iberia which suffered unusually poor weather

in May. In July, there was very poor weather in the UK and

Ireland and heatwaves in Southern Europe, followed by warm

conditions in August and September which coincided with

the launch of our Autumn / Winter ranges. Despite these

unseasonal conditions, we generally traded well with our

core product ranges remaining in robust demand and partially

offsetting inevitable volatility in sales more dependent on

fashion and season.

Like-for-like sales growth was 8.5% for the year. In the first half,

like-for-like sales rose by 10% driven by higher average selling

prices and higher unit volumes partially offset by smaller basket

sizes. Footfall increased in both the UK and Europe, against

a comparative period which featured some disruption from the

pandemic. In the second half of the year like-for-like growth was

lower than in the first half at 7%. This growth was driven

by a slightly greater benefit from selective pricing taken to

part-mitigate inflation, the benefits of which were partially offset

in turn by lower unit volumes, smaller basket sizes and slightly

lower footfall. Space growth contributed sales growth of 6%,

driven by the increase in selling space across a number of our

markets, in particular Italy, France and the US, and higher sales

densities in most new stores.

Adjusted operating profit margin for the full year was 8.2%,

down on the previous financial year’s 9.8%. Adjusted operating

profit margin in the first half was 8.3%, down on the same

period a year ago due to our decision not to fully recover

all the inflation in input costs. In the first half the higher costs

of bought-in goods, higher freight rates, higher labour costs and

higher energy costs outweighed the benefits of our selective

price increases and an improvement in store sales densities due

to higher footfall. In the second half, compared with the same

period a year ago, the cost of bought-in goods was higher again

including a more significant impact of the strength of the US

dollar against sterling and the euro when we placed orders for

our Spring / Summer ranges several months earlier. This higher

cost of goods was offset somewhat by the benefit of like-for-

like sales growth and sales from new store openings and by

the benefit of additional pricing being implemented in the spring

and summer ranges. Freight costs fell in the fourth quarter,

but labour costs were higher than the same period a year ago.

Second half operating profit margin was 8.0%, slightly below

the first half of the year, and also held back by higher than

expected stock loss and a modest amount of German

restructuring costs, albeit helped by lower markdowns.

About Retail

About Primark

Primark is a leading international retailer with 18.2 million sq ft

of selling space across 432 stores in 16 countries with more

than 76,000 colleagues. Founder Arthur Ryan opened our first

store in 1969 in Mary Street and this remains our flagship Dublin

city centre store and home of the global headquarters. Today

Primark has stores in the UK, Ireland, Europe and the US with

ambitious expansion plans: we expect to trade from 530 stores

by the end of 2026, including from 60 in the US. We have

expanded but remain true to our roots: offering unbeatable

value alongside great quality products.

We target a wide customer base, offering quality essentials

andaffordable fashion across women’s, men’s and kidswear,

aswell as beauty, homeware, accessories and licensed ranges

with some of the biggest names in entertainment, sport and

food. Through our Primark Cares strategy, we have set open

and measurable targets relating to product, planet and people

and we are evolving how we operate. This is alongside

ourexisting commitment to high ethical trading standards.

Ourintention is to use our scale for good, deploying it to have

the most benefit across our end-to-end supply chain, so

ultimately enabling customers to access more sustainable

products affordably.

Primark is a retail store business and the store model centres

onfinding the right-sized stores in the right locations. We seek

to continually improve our in-store experience, creating exciting

retail destinations with additional services including beauty, food

and beverage and our vintage concession WornWell. We focus

on cost alongside price leadership; keeping our operating costs

low and maximising efficiencies across our supply chain and

operations to keep prices competitive and maintain margins.

Digital is a core enabler of how we showcase our offering to

customers and drive footfall into stores. We have now launched

our enhanced customer website into all our markets, significantly

improving our customers’ digital experience. The new site

hasincreased traffic in all markets and we believe it is driving

incremental growth in store sales. We have also launched

aClick + Collect trial across selected stores in the UK to offer

customers more choice and convenience to browse and order

online before coming into store to collect their purchase.

Operating review

Primark revenues rose strongly in this financial year,

up 15% and exceeding our expectations a year ago.

This reflects a sales increase in all our markets driven by

a number of factors, including carefully selected price increases

taken to partially offset high and volatile input cost inflation,

well-received product ranges and the resulting appeal of our

offer to new and existing customers. Good footfall, strongly

performing new stores and the rollout of our enhanced

customer website also contributed to the strong sales

performance. Sales increased in both halves of the year:

in the first half, by 17% to £4.2bn against the same period

in the prior year; and in the second half, by 14% to £4.8bn.

We believe that our product offer was a source of differentiation

and competitive advantage throughout the year. Cold weather

essentials and other seasonal product lines, including our

well-received velvet plush leggings, drove strong sales leading

into a record Christmas season which included a resurgence

in women's partywear, tailoring separates and beauty products

31Associated British Foods plc Annual Report 2023

OPERATING REVIEW – RETAIL CONTINUED

commitment that all our clothes will be made from recycled

or sustainably sourced materials by 2030. Within this, 46%

of our cotton clothing now contains cotton that is organic,

recycled or sourced from our Primark Sustainable Cotton

Programme (PSCP), up from 40% last year. Our commitment

to reduce our carbon emissions across our value chain by 50%

by 2030 was validated by the Science Based Targets initiative

(SBTi). While carbon emissions increased this year by 11%

compared to our baseline 2018/19 financial year, this is as

expected: Scope 1 and 2 emissions reduced but there was

an increase in our Scope 3 emissions due to an increase in the

volume of materials used to produce the higher number of

products sold in the period year-on-year. In the short term,

this trend is likely to continue, but emissions will decline

in time as we increase the use of more sustainably sourced

materials across our product ranges. In our own store estate,

some 70% of our stores are now powered by renewable

or low-carbon electricity and 141 stores have switched

to energy-efficient lighting.

Primark continues to build and invest in transforming its digital

capability. This year we successfully rolled out our new and

improved website to all 16 markets. Since launching the new

website, we have seen a positive customer reaction and strong

traffic uplift in all trading markets, led by the UK and the

Republic of Ireland which were the first two countries to move

on to the new platform. Usage of the stock checker facility

ranged broadly between 15%-20% of website sessions across

our markets. We are also putting more focus on increasing

traffic growth to www.primark.com through organic search,

CRM and selected performance marketing trials and, overall,

working in closer alignment with our already strong social media

engagement. We believe our digital platform is already

beginning to support good uplifts in footfall and that it is

contributing to store like-for-like sales across our markets.

In April we announced the expansion of our Click + Collect trial

to an additional 32 stores in London, taking the total number

offering this service to 57 stores, one third of our UK estate.

On 13 September 2023 we extended the service to include

womenswear, alongside the existing offer on kidswear.

Although this remains a trial, we are encouraged by the early

results. In addition, we implemented self-checkouts in 22 stores

in the period. This service has seen high utilisation and

customer engagement and the roll-out continues.

Retail selling space overall increased by just under 1 million sq ft

since the last financial year end and on 16 September 2023

we were trading from 432 stores and 18.2 million sq ft of selling

space. We added 27 stores in the period: eight in the US;

six in Central and Eastern Europe with three in Poland, two in

Romania and our first store in Slovakia marking our 15

and 16

market; four in Italy and France respectively; three in Spain; and

two in the UK. As referred to above, two stores in Germany

were closed during the year. We fully reopened our Bank

Buildings store in the heart of Belfast, which was damaged by

fire in 2018, and closed our temporary store in Donegal Place.

We also re-started our store refurbishment programme.

We remain on track to grow to 530 stores by the end of 2026

and have visibility for continued footprint expansion beyond.

In the UK, sales increased by 11% against the previous financial

year, driven by like-for-like growth of 10% helped in particular by

our new customer website that has now been running for more

than a year. This sales performance was achieved despite

unhelpful weather impacts in the third and fourth quarters which

resulted in slightly lower footfall in contrast to the first half of

the year when footfall was significantly higher. Primark’s market

grew in the financial year, increasing from 6.4% last year

to 6.7% this year.

In Europe excluding the UK, sales increased by 18%

on the previous financial year, with like-for-like growth of 8%

despite weaker trading at times due to unseasonable weather.

Our store estates in all the countries in which we operate

delivered like-for-like sales growth, with good performances

in Iberia, France, Germany, Belgium, the Netherlands and

Eastern Europe. Italy delivered strong total sales growth

and continues to operate on high sales densities. We opened

17 stores in the European region in the period to strong

customer demand and good resulting footfall. Sales densities

in most of these new stores continue to be higher than average.

Primark’s share of the total clothing, footwear and accessories

market by value increased in both Spain and France. In Germany

we closed two stores in the period and, after period end,

we closed one more store and agreed two further closures.

In addition we have started our rightsizing programme with

two stores in the period and the signs are encouraging.

Two further stores were resized in September after the period

end. We continue to consider further resizing. We are also

developing plans to open new stores smaller than average

in new locations with merchandise selected to appeal

to local customer demand.

In the US, total net sales were 24% higher than last year driven

by space expansion. We opened eight new stores in the period,

largely in the Northeast, taking the estate to 21 stores trading

from 0.9 million sq ft and are on track to meet our US store

expansion target of around 60 stores by the end of 2026.

Weare pleased with trading in our new stores which are

benefitting from our growing knowledge of the US consumer

and the wider retail market. We have refined the design, size

and layout of our stores and continue to tailor our ranges to suit

the US consumer. We continued to expand our footprint beyond

the Northeast with further progress in the new store pipeline

and two leases signed recently in Texas. Investment in

infrastructure to support this expansion continues with work

ongoing at our new Jacksonville logistics centre where we

expect to be operational in the spring.

Further progress has been made implementing our wide-ranging

sustainability strategy unveiled two years ago, itself an evolution

of an earlier and long-standing ethical trade and sustainability

programme. During the year we further embedded the

processes and capabilities needed to drive and accelerate

change both internally and across our value chain. Some 55%

of all the clothing units we sold in the financial year contained

recycled or more sustainably sourced materials, up from

45% last year and up from 25% at launch two years ago.

This represents good progress in the delivery of our

1. Kantar, Primark market share of the total UK clothing, footwear and accessories market including online by value, 52-week data to 16 September 2023.

32 Associated British Foods plc Annual Report 2023

Broadening our reach and attracting new

customers through expanded ranges, still with

value at their heart

Primark was founded with the aim of making

great quality fashion affordable for everyone.

The Edit – our collection of quality investment pieces for

womenfeaturing more premium fabrics, blends and detailing

–continues to go from strength to strength following its

successful launch in Autumn/Winter 21. This range caters

forcustomers seeking more premium products at the value

Primarkis famous for and has been extended to include

products such as jewellery and elevated knitwear with

cashmere and merino wool content. Due to its success,

thecollection has gone frombeing offered in selected stores

and is now in more than 60% of our stores internationally.

The Edit’s ultimate heavyweight t-shirt is a bestseller. It comes

insix colours and sells for £12/$16/€14, representing incredible

value versus other comparable heavyweight t-shirts on the high

street. And this t-shirt is, of course, only part of our offering.

Wehave a comprehensive selection of t-shirts across our

ranges, which start with our essential t-shirt at £3/$4.50/€3.50

through to our more premium styles.

Alongside The Edit, we have also broadened our offer

throughcollaborations. In September 2023 we launched our

collaboration with global superstar and style icon Rita Ora.

Thefirst in a series of collections with Rita, it was made

available in all our stores across all our markets. This more

trend-led collection appeals to the style conscious and

fashion-led consumer, and while it retails at slightly higher

prices, it offers excellent value-for-money by giving customers

the opportunity to shop Rita’s famous style for less.

Spring Summer 23 shot from Primark’s ‘The Edit’ collection

Year ended

16 September 2023

Year ended

17 September 2022

# of stores sq ft 000 # of stores sq ft 000

UK 192 7,725 191 7,620

Spain 59 2,390 56 2,305

Germany 30 1,605 32 1,841

France 24 1,203 20 1,044

Republic of Ireland 37 1,165 37 1,121

Netherlands 20 1,016 20 1,016

US 21 873 13 563

Italy 15 747 11 552

Belgium 8 403 8 403

Portugal 10 383 10 383

Austria 5 242 5 242

Poland 5 197 2 77

Czechia 2 89 2 89

Romania 2 75 – –

Slovenia 1 46 1 46

Slovakia 1 39 – –

Total 432 18,198 408 17,302

New store openings in the year ended 16 September 2023:

France

Brest, Coat Ar Gueven S.C.

L’Atoll Angers

Mulhouse, Ponte Jeune

Saint-Etienne, Centre Deux S.C.

Slovakia

Bratislava – Eurovea

Italy

Caserta Campania

Bari Casamassima

Turin Le Gru

Venice Nave de Vero

Spain

Lanzarote Arreclife

Melilla

Toledo Luz de Tajo

Poland

Bonarka S.C., Krakow

Katowice Silesia City Centre

Magnolia Park S.C., Wroclaw

Craigavon –Rushmere S.C.

Salisbury

Romania

AFI Palace, Bucharest

Park Lake, Bucharest

Arundel Mills, Baltimore, MD

Crossgates, Albany, NY

City Point, Brooklyn, NYC

Green Acres, Long Island, NY

Jamaica Ave, Queens, NYC

Jersey Gardens, Newark, NJ

Roosevelt Field, Long Island, NY

Walden Galleria, Buffalo, NY

33Associated British Foods plc Annual Report 2023

Our ‘Supporting Women for Life’ collection,

making specialist collections more accessible

andaffordable

At Primark, we want all our customers to

feelseen, included and understood but after

listening to them, we realised many of the

products women rely on during key moments

of their lives were, for many, out of budget.

For example, post-surgery bras for breast cancer patients

wereoften expensive and not widely available on the high

street. Period underwear, which has become more popular

inrecent years, was in many cases prohibitively expensive.

Wechallenged ourselves to think about the different products

we could create for women offering the same functionality

butat Primark prices. As a result, we created our Supporting

Women for Life collection, offering a range of more specialist

clothing, lingerie and nightwear at affordable prices.

We started with our maternity range in January 2021, when

maternity wear was not widely available on the high street and

often sold online only. We followed with period underwear,

designed as an alternative to single-use sanitary products.

Sincethen, we have launched a dedicated breast cancer range

comprising leisurewear, underwear, nightwear and accessories

for women. We extended our underwear sizing across all our

ranges to include fuller bust and bigger brief sizes, and to

include a greater variety of skin tones. We also introduced

innovative new fabrics – for example, our menopause collection

contains anti-flush technology and cooling yarns across

nightwear, underwear and base layers, which to date have

onlybeen available at a premium price elsewhere.

Some of the products in our ‘Supporting Women for Life’ range

Using self-checkouts to enhance customers’

in-store experience

At Primark, we think about every stage of

acustomer’s journey with us and we know

how important it is that they have a good

experience, including when they pay in-store.

With more customers using card and contactless payments and

self-checkouts becoming commonplace, we took the decision

to launch a trial to understand the benefits these technologies

might bring to our customers, colleagues and business.

OPERATING REVIEW – RETAIL CONTINUED

Self-checkouts in Magnolia Park, Wroclaw, Poland

Today, our Supporting Women for Life collection is made up

ofsix ranges, representing almost £100m in sales and growing.

We are continuing to work with our customers, colleagues and

specialist organisations to better understand consumers’ needs

and experiences and will continue to bring to market more

inclusive and specialist products at accessible prices for women

at their different stages of life.

We started with self-checkouts in two UK stores, Sheffield and

Northampton, which had higher-than-average numbers of card

transactions. The initial response from both customers and

colleagues was very positive, with high adoption rates from

customers who were given the option to use either the

self-checkouts or the staffed checkouts as before.

We then extended the trial to three additional UK stores of

different sizes, formats and locations. With an average overall

satisfaction rating of 88%, speed, convenience and reduced

queue times were cited as the biggest draws for the service.

The benefits to the business are already apparent and have the

potential to be very significant. These innovations free up

colleagues to focus on where they are most needed – for

example re-stocking the shop floor, helping customers or

manning fitting rooms – relieving recruitment pressures faced

by the business in a tight labour market.

Due to the initial success of the trial, we have added self-

checkouts to 22 stores across the UK, the US, Ireland and Poland,

both incorporating them into existing stores and fitting them

innew ones. Today, around two thirds of our customers choose

to use our self-checkouts when they have the option to do so,

with many customers saying they prefer this check-out method.

We are excited by the benefits that self-checkouts can bring to

the business and are rolling them out more widely to new and

existing stores.

34 Associated British Foods plc Annual Report 2023

An overview of our growth andsuccess in Spain

As part of our expansion strategy, we continue

to explore not just new markets and regions

but also the potential of our more established

markets. Our presence in Spain, which was

ourfirst market outside the UK and Ireland,

isagreat example of this organic growth.

Since opening our first store in Madrid in 2006, Spain has grown

to become our second biggest market in terms of both store

numbers and sales. We have 59 stores in Spain and employ

more than 9,500 colleagues with 2.4 million sq ft of selling space.

The Primark offer has resonated with Spanish shoppers who

love us for our style credentials and everyday affordable

essentials for the whole family. In particular, our kids collections

and licensed collections have been received really well, as

customers love the quality and choice we offer at such

affordable prices. Our collaboration with Spanish influencer

Paula Echevarría has proven notably successful and helped to

attract new customers in this market. We have also tailored our

in-store experiences tolocal tastes and culture, partnering with

other domestic brands such as Llaollao frozen yoghurt, Granier

cafés and Hello Nails beauty.

We have enjoyed strong growth in Spain and that track record

gives us confidence as we continue to invest and grow our

presence there. We will invest €100m in our Spanish business

between April 2023 and the end of 2024 in both new store

openings and upgrading existing stores.

In this financial year, we have opened three stores to a strong

customer response: the first in April, in the city of Toledo; the

second in June on the Canary Island of Lanzarote; and last but

not least in September a store in the autonomous city of Melilla

on the North African coastline.

Looking ahead to next year, we have plans for more new stores.

Madrid remains as important to us today as it was 17 years ago

when we first came to Spain. It is the city with the second

highest number of Primark stores, after London. Today, there

are eight stores across the city and we plan to open as many as

four more in the next financial year, including our second

flagship store in Madrid, in the iconic Cine Salamanca building.

We continue to invest in and improve our existing stores too.

With a strong pipeline of store extensions and upgrades, our

Spanish customers can continue to expect to see the very

bestof Primark.

Our Spanish flagship store in Gran Vía, Madrid

35Associated British Foods plc Annual Report 2023

36 Associated British Foods plc Annual Report 2023

Financial review

Group performance

Group revenue was £19.8bn, 15% ahead of last year at

constant currency, with sales growth in each of our businesses,

benefitting from the build of price increases taken to offset

inflation. However, as expected, adjusted operating profit margin

declined, from 8.4% last year to 7.7% this year as a result of the

overall inflation. The Group generated an adjusted operating

profit of £1,513m, an increase of 5% at actual rates ahead of

last year, a strong result given the scale of input cost increases.

Net finance income and other financial income

Finance income increased as a result of higher interest rates

earned on our cash deposits. Other financial income increased

this year as a consequence of the higher surplus in the Group’s

UK defined benefit pension scheme at the beginning of the

financial year. Lease interest increased during the year because

of more leases being entered into from our continued store

expansion programme, particularly in the US, Italy and France.

As a result, on an adjusted basis, profit before tax was

up 8.6%, to £1,473m.

Taxation

This year’s tax charge on the adjusted operating profit before

tax was £346m, with an increase in adjusted effective tax rate

to 23.5% from 22.2% last year. This rate includes the impact

on the blended tax rate for the full year of the increase in UK

corporation tax rate from 19% to 25% in April 2023.

The Group is exposed to a range of uncertain tax positions.

The provision at the financial year end for these tax positions

was £55m (2022 – £102m). The reduction in the provision is due

to the conclusion of UK tax audits covering several businesses

and years. This reduction in the provision between last

financial and this financial year was due to partial utilisation

and also translated into a one-off benefit to the effective

tax rate for the year.

We expect the Group’s effective tax rate in 2024 to be broadly

in line with 2023. This includes the full year impact of the

increase in the UK corporation tax rate in April 2023 and changes

to the mix of profits by jurisdiction.

Statutory operating profit for the Group of £1,383m was 17%

ahead, after charging exceptional items of £109m

(2022 – £206m).

For the full year the average rates used to translate the income

statement resulted in a translation gain of £17m, primarily driven

by the strengthening of the US dollar, particularly in the first half

compared to the first half of 2022. The weakness of sterling

against some of our trading currencies also drove a benefit

on translation of our non-sterling earnings.

Segmental summary

At actual rates

Revenue Adjusted operating profit

2023

£m

2022

£m

Change

2023

£m

2022

£m

Change

Grocery 4,198 3,735 +12.4 448 399 +12.3

Ingredients 2,157 1,827 +18.1 214 159 +34.6

Agriculture 1,840 1,722 +6.9 41 47 -12.8

Sugar 2,547 2,016 +26.3 169 162 +4.3

Retail 9,008 7,697 +17.0 735 756 -2.8

Central – – – (94) (88) -6.8

19,750 16,997 +16.2 1,513 1,435 +5.4

The segmental analysis by division is set out in the operating reviews. The segmental analysis by geography is set out in note 1

on page 140. Of note is the increase in adjusted operating profit in North America which is driven by the success of our Grocery

and Ingredients’ businesses there.

Adjusted earnings per share

2023

£m

2022

£m

Change

Adjusted operating profit 1,513 1,435 +5.4

Net finance income/(expense) before lease interest 11 (11) +200.0

Other financial income 40 13 +207.7

Lease interest (91) (81) -12.3

Adjusted profit before tax 1,473 1,356 +8.6

Taxation on adjusted profit (346) (302) -14.6

Adjusted profit after tax 1,127 1,054 +6.9

Adjusted earnings attributable to equity shareholders 1,103 1,034 +6.7

Adjusted earnings per share (in pence) 141.8p 131.1p +8.2

37Associated British Foods plc Annual Report 2023

FINANCIAL REVIEW CONTINUED

Adjusted earnings per share increased by 8.2% to a record

141.8p per share. This increase follows from the higher adjusted

profit and the higher financial income, more than offsetting the

slightly higher adjusted effective tax rate. The adjusted earnings

per share also benefit from the reduction in weighted average

number of shares, from 789 million for 2022 to 778 million for

2023, as a result of the buyback programme.

Basic earnings per share

2023

£m

2022

£m

Change

Adjusted profit before tax 1,473 1,356 +8.6

Acquired inventory fair

value adjustments (3) (5)

Amortisation of non-

operating intangibles (41) (47)

Exceptional items (109) (206)

Profits less losses on sale

and closure of businesses (3) (23)

Profits less losses on

disposal of non-current

assets 28 7

Transaction costs (5) (6)

Profit before tax 1,340 1,076 +24.5

Taxation (272) (356) +23.6

Profit after tax 1,068 720 +48.3

Earnings attributable to equity

shareholders 1,044 700 +49.1

Basic earnings per share

(inpence) 134.2p 88.6p +51.5

Profit before tax of £1,340m was 24.5% ahead of last year,

benefitting from the lower level of exceptional items in 2023.

Exceptional items

2023

£m

2022

£m

Grocery – Impairment 41 –

Sugar – Impairments 50 –

Retail – Impairments, rightsizing and

fairvalue writedowns 18 206

109 206

The income statement this year included a non-cash exceptional

impairment charge of £109m. In Grocery, the Don business has

been impacted by inflationary pressures, a surplus supply of

fresh pork in the market, labour constraints, equipment reliability

causing production shortfalls and additional transportation costs

following the unforeseen liquidation of its distribution partner.

As a result we recognised impairment write-downs of £39m

against property, plant and equipment, £1m against right-of-use

assets and £1m against intangible assets.

In Sugar, the China Sugar North business recognised a £15m

impairment write-down against property, plant and equipment.

This business was held for sale in the previous year but that

process was halted in the second half of the year. Due to

severe flooding in Mozambique, the related damage to the

sugar crop fields and the inability to plant for the foreseeable

future Illovo Mozambique recognised £25m impairment

write-downs against property, plant and equipment, £7m

against current biological assets, £2m of personnel costs

and £1m write-down against inventory.

In Retail, the German Primark portfolio recognised exceptional

impairment charges relating to stores that were impaired in the

previous year: £13m as a result of additional right-of-use assets

being recognised due to rent indexation adjustments on

right-of-use assets that were impaired, a further £5m non-cash

exceptional charge for the right-sizing of four stores and the fair

value write-down of a store.

The prior year exceptional impairment charge of £206m

comprised non-cash write-downs of assets in Primark Germany,

£72m against property plant and equipment and £134m against

right-of-use assets.

Total tax charge for the year was £272m. This includes

the positive benefit of deferred tax on exceptional items from

the prior year, when a £63m exceptional charge was included

in the Group's total tax charge reflecting the de-recognition

of the deferred tax assets relating to Primark Germany.

A significant proportion of that asset had been deemed

to be irrecoverable and was written off as an exceptional

tax charge last year. As a result of further work undertaken this

year it has been determined that more of this deferred tax asset

is recoverable and so, an exceptional non-cash tax credit of

£58m was recognised in the first half.

Earnings attributable to equity shareholders were

£1,044m and basic earnings per share were 134.2p,

52% ahead of last year.

Cash flow

2023

£m

2022

£m

Adjusted EBITDA 2,361 2,261

Repayment of lease liabilities net

ofincentives received (246) (275)

Working capital (216) (729)

Capital expenditure (1,073) (769)

Purchase of subsidiaries, joint

ventures and associates (94) (154)

Sale of subsidiaries, joint ventures

andassociates 4 –

Net interest paid (74) (97)

Taxation (341) (304)

Share of adjusted profit after tax from

joint ventures and associates (127) (112)

Dividends received from joint ventures

and associates 107 93

Other (32) 2

Free cash flow 269 (84)

Share buyback (448) –

Dividends (345) (380)

Movement in loans and current

assetinvestments (10) 196

Cash flow (534) (268)

There was free cash inflow in the year totalling £269m

as a result of the operating profit generated by the Group,

despite cash outflows driven by higher capital expenditure

than the prior year and a working capital outflow.

38 Associated British Foods plc Annual Report 2023

The capital expenditure increase was driven by the number

of large capital projects and a step up following low levels

of the last few years. 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 over the medium term.

The main factors driving the increase in working capital were

twofold: the impact of inflation across all our food businesses

and higher inventories, particularly in our Sugar and Primark

businesses. As a reminder Primark inventories a year ago were

too low and reflected the logistics and supply chain difficulties

experienced in the prior year. We do expect a working capital

inflow in 2024 as Primark inventory levels normalise.

Cash tax increased in the year driven by the increase in profit

before tax. We expect a reduced level of cash tax in 2024 due

to the reallocation of historic overpayments and favourable

settlements of historical enquiries and returns.

There was cash outflow of £448m for our share buyback

programme, with the remainder of the £500m programme

completed after the year end. We also paid £345m for total

dividends in this financial year, which reflects the final 2022

dividend and interim 2023 dividend. The £380m paid in the prior

year included a special dividend that was declared in respect of

the 2021 financial year.

Acquisitions and disposals

The spend on acquisitions this financial year was £94m.

The most significant of these were the acquisitions

of National Milk Records, Kite Consulting and Advance

Sourcing in Agriculture.

For disposals, a non-cash provision of £6m was included

in profit less losses on sale and closure of business in respect

of Illovo's investment in Gledhow.

Financing and liquidity

2023

£m

2022

£m

Short-term loans (99) (31)

Long-term loans (394) (480)

Lease liabilities (3,160) (3,252)

Total debt (3,653) (3,763)

Cash at bank and in hand, cash

equivalents and overdrafts 1,388 1,995

Current asset investments – 4

Total net debt (2,265) (1,764)

Leverage ratio 0.96 0.78

At 16 September 2023, the Group held cash balances of

£1,388m. In addition, the Group has an undrawn Revolving

Credit Facility (RCF) for £1.5bn. This facility is free from

performance covenants and was extended in June 2023 for

a further year, bringing the maturity to 2028. Our £400m bond,

launched last year, at 2.5% is due in 2034, and our final $100m

Private Placement notes are due in March 2024.

Total liquidity at year end was £2.7bn, comprising the £1.5bn

of cash, less £0.2bn of short-term loans and overdrafts

and £0.1bn of inaccessible cash, plus the £1.5bn RCF.

This compares to £3.4bn at the end of 2022.

Pensions

The Group’s defined benefit pension schemes aggregate

surplus increased by 5% to £1,377m at year end compared

to last year’s £1,314m. The UK scheme, which accounts for

around 90% of the Group’s gross pension assets was in surplus

by £1,397m (2022 – £1,366m). A significant increase in the

pension surplus in the prior year was driven by an increase in

bond yields reducing liabilities. Details of the assumptions made

in the current and previous year are disclosed in note 12 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, which was equal to the contributions made,

amounted to £95m (2022 – £87m). This compared with

the cash contribution to the defined benefit schemes

of £36m (2022 – £36m).

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. This is a clear improvement on

the previous valuation undertaken at 5 April 2020, which

showed a deficit of £302m. As agreed with the trustees in

September, as a result of this significant increase in the surplus,

the Group will receive a cash flow benefit of approximately

£70m per year from the abatement of UK employer pension

contributions on both the defined benefit and defined

contribution schemes. This will take effect from the start

of the new financial year.

Dividend and shareholder returns

We announced a share buyback programme of £500m in

November 2022. In the financial year we purchased 23.7 million

shares for £446m and the shares bought back were cancelled.

At the end of the financial year we had 765 million ordinary

shares in issue. The weighted average number of shares for

theyear was 778 million which compared to 789 million for the

last financial year. This share buyback has resulted in a positive

impact on our reported adjusted earnings per share of 1.8p.

Since the financial year end, a further 2.8 million shares were

purchased, completing the total £500m buyback programme.

The Group has announced the continuation of a buyback

programme, targeting an additional amount of £500m

over the next 12 months.

This year the Board declared an interim dividend of 14.2p

per share (2022 – 13.8p), an increase of 3% compared to

prioryear. The Board is proposing a final dividend of 33.1p

pershare. It is also declaring a special dividend of 12.7p per

share to be paid as a second interim dividend. Taken with the

first interim dividend of 14.2p per share, the aggregate total

dividend for the year is 60.0p per share, 37% higher than the

total dividend of 43.7p in 2022, which comprised an interim

dividend of 13.8p, and a final dividend of 29.9p.

Eoin Tonge

Finance Director

39Associated British Foods plc Annual Report 2023

Stakeholder engagement

We engage regularly with stakeholders at Group and/or

business level, depending on the particular issue.

As illustrated in our Group business model and strategy section

on pages 9 to 11, the role of the Group, and therefore ofthe

Board, is to provide a framework in which the Group businesses

have the freedom and decision-making authority topursue

opportunities with entrepreneurial flair and to manage risks at

the level at which the businesses operate. 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 generally 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.

SECTION 172 STATEMENT | OUR STAKEHOLDERS

Engaging with our stakeholders

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 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 133,000 people. Our people are central to our success.

• Health and safety

• Diversity, equity and

inclusion

• Cost of living

• Culture and wellbeing

• Engagement and

development

• Intranet

• Newsletters

• Surveys

• Email

• Training

• Notice boards

• Health and Safety

programmes

• Town halls

• Meetings

Key matters How the businesses engage with this

stakeholder group

How the Board engages and/or is kept informed and takes matters into account

• So as to seek to ensure that the ‘voice’ of each workforce in

the Group is heard at Board level, Richard Reid, as designated

Non-Executive Director for engagement with the workforce,

meets with employees from a selection of businesses.

Eachbusiness division also specifically reports to the Board

on workforce engagement within that division. The Board also

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.

• 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.

• The Chief Executive and Finance Director continue to engage

with Company employees both at the corporate centre and at

the regional businesses through town halls inthe businesses

covering issues such as business updates andESG topics.

See the letter from Richard Reid on pages 84 and 85,

which includes details of some ofthe outcomes from workforce

engagement. See also the ‘Our people’ section on pages 50

and 51.

40 Associated British Foods plc Annual Report 2023

Suppliers

As a diversified international Group, we have many complex supply chains.

• Responsible sourcing

• Supply chain sustainability

• Payment practices

• Capital strength

• Human and labour rights

inour supply chains

• Transparency in supply

chains

Key matters

• Conversations

(face-to-face or virtual)

• Training

• Communication sessions

• Correspondence

• Audits

• Engagement with trade

unions and NGOs

How the businesses engage with this

stakeholder group

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 issues, with support from the

Director of Legal Services and Company Secretary and

the Group Corporate Responsibility Director.

Examples of key matters or projects on which the Board was

briefed include:

• the expansion of the Kilombero sugar plant in Tanzania;

• the responsible exit from Myanmar as a source of garments

for Primark; and

• human rights and environmental due diligence in respect

ofour supply chains.

See further details on page 45 in respect of the implementation ofa

responsible exit from Myanmar as a source of garments forPrimark

and page 47 in respect of ESG governance.

Customers/Consumers

The buyers of our safe, nutritious and affordable food, and clothing that is great value for money.

• Healthy and safe products

• Value for money

• Availability of products

• Customer relations

• Social and environmental

impact

• Store environment

Key matters

• 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 businesses engage with this

stakeholder group

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:

• changes to fitting rooms at Primark stores to seek to ensure

that our customers feel safer and more welcome;

• performance of the Click and Collect trial at Primark;

• self-checkout trials at Primark;

• Twinings marketing trials; and

• increased marketing investment in Patak’s, Blue Dragon,

Jordans Dorset Rvyita and Mazzetti.

See further details on page 15 about Twinings marketing trials and

on page 34 about Primark using self-checkouts to enhance

customers’ in-store experience.

41Associated British Foods plc Annual Report 2023

Communities and the environment

Supporting society and respecting the environment are two of the key ways we live our values and

make a difference.

• Climate change mitigation

and adaptation

• Natural resources and

circular economy

• Social impact – including

employment opportunities

• Agriculture and farming

practices

Key matters

• Coaching and training

programmes

• Community programmes

and schemes

• Dealings with NGOs and

other expert programmes

and schemes

• Various environmental

programmes

How the businesses engage with this

stakeholder group

SECTION 172 STATEMENT | OUR STAKEHOLDERS CONTINUED

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.

• 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 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 operational safety and key environmental matters

in our direct manufacturing operations reflecting an additional

focus on climate and sustainability.

• The Board receives updates and provides views on key

sustainability matters. This included individual sessions with

non-executive directors on climate-related financial reporting.

See the Responsibility section on pages 46 to 67 of this Annual

Report. See also the sections of our Responsibility Report 2023

providing further details of our businesses’ work with people

inthesupply chains and surrounding communities.

Shareholders and institutional investors

The Company has a mix of individual and institutional shareholders, including bondholders,

whoseviews are valued.

• Business and financial

performance

• Return on investment

• ESG

• Remuneration

Key matters

• Press releases

• Annual general meeting

• Annual Report

• Responsibility Report

• Website

• Results announcements

• Meetings

• Registrar

How the businesses engage with this

stakeholdergroup

How the Board engages and/or is kept informed and takes matters into account

• 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 queries raised throughout

thecourse of the year.

• Regulatory News Service (RNS) announcements keep

investors updated on business and financial performance

andother matters.

• Each year, the Chairman meets with the Company’s

largestinstitutional shareholders to discuss their views,

issues orconcerns.

• The Chief Executive and/or Finance Director meet with

investors throughout 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.

• The Responsibility Report is approved by the Board and

isproduced to provide greater transparency in response

toincreasing requests for information from investors.

• All shareholders are treated equally and a Relationship

Agreement is in place with the Company’s controlling

shareholders (see pages 116 and 117).

See further details on page 86, which includes details on this year’s

annual general meeting.

42 Associated British Foods plc Annual Report 2023

Governments

The Group is impacted by changes in laws and public policy.

• Corporate governance and

audit reform

• Energy support schemes

• Tax and business rates

• Agricultural and trade policy

• Climate and environment-

related matters

• Public health

• Support of businesses

and workers

Key matters

• Meetings, calls and

correspondence

• Responding to consultations

and calls for evidence

• Providing data/insights

(e.g. supply challenges and

international conflict)

• Participation in government

schemes

• Parliamentary events

• Industry forums

• Site visits

• Attendance at conferences

How the businesses engage with this

stakeholder group

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 energy support schemes,

environmentalpolicies including Extended Producer

Responsibility, decarbonisation and the Emissions Trading

Scheme, highstreets and business rates and the impact

ofinternationalconflicts.

Our refurbished store on Mary Street,

Dublin

43Associated British Foods plc Annual Report 2023

SECTION 172 STATEMENT | OUR STAKEHOLDERS CONTINUED

Principal decisions

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.

Investment in Primark’s existing store estate

alongside its ongoing international expansion.

Which stakeholders most affected?

• Customers/Consumers

• Employees

• Suppliers

• Communities and the environment

Consideration of stakeholder views/interests

andimpact on decision-making

In line with Primark’s commitment to create a great in-store

experience for consumers, the Board has approved the

investment of substantial sums in extensions and upgrades to

existing stores. This is in addition to investment in growing the

Primark store estate to 530 by the end of the 2026 financial year

as well as in automation of distribution depots.

The upgrades to stores have included the continued roll-out of

LED lighting across the UK store portfolio, which will also help

Primark progress its ambition to reduce its carbon footprint, and

self-service checkouts, which, as well as reducing labour costs,

should also reduce queues for customers (in response to

customer feedback). We are also upgrading CCTV monitoring

ina bid to reduce theft and anti-social behaviour in stores, both

of which impact our employees.

During the course of the financial year, Primark has opened

stores in two new markets, namely Slovakia and Romania,

bringing the total number of countries in which Primark operates

to 16 at year end. The decision to expand Primark’s footprint

inthe southern states of the US was also taken. New store

openings continue to be met with an enthusiastic reception

from customers, as well as providing employment opportunities

in the local areas and increasing career options for employees.

Relationships with key landlords continue to be important, as is

the use of technology and demographic data to inform decisions

about new store locations.

Approval of various projects in our food

andingredients businesses.

Which stakeholders most affected?

• Customers/Consumers

• Employees

• Shareholders/Institutional investors

Consideration of stakeholder views/interests

andimpact on decision-making

Throughout the financial year, the Board approved significant

capital expenditure (or increases to existing approved capital

expenditure) by our food and ingredients businesses.

Thisincluded a new yeast plant for AB Mauri in northern India,

anew spray dryer and upgraded yeast production facility for

Ohly in Germany, a new sugar factory in Tanzania, a major

newwater irrigation system in Malawi, an upgrade to a Tip

Topbakery and a new animal feed plant in Western Australia

(seepicture on page 45), a steam reduction project for British

Sugar (as part ofits pledge to reduce its carbon footprint) and

anewfactory purchase with plans for localised production

forOvaltineinNigeria.

The decisions to approve such projects and initiatives took into

account customer demand for our products and the additional

quantity of products and/or improved quality that such investment

should bring about. The decisions also factored in our investors’

interest in us making the best use of the Company’s capital.

Provided in this section are some examples of principal

decisions that were taken (or implemented) during the year and

how stakeholder views were taken into account and impacted

on those decisions.

Launch of a £500m share buyback programme.

Which stakeholders most affected?

• Shareholders/Institutional investors

Consideration of stakeholder views/interests

andimpact on decision-making

The Board took into account views of various investors

(including views expressed in meetings with the Chairman, the

Chief Executive and/or Finance Director) in reaching the decision

in November 2022 to launch a share buyback programme of up

to £500m. This included, for example, investor views that the

Company’s shares were undervalued, that a share buyback

would be an appropriate way to return capital to shareholders

and that return on investment from a potential buyback should

be considered in the same way as an M&A opportunity.

Following detailed consideration by the Board and engagement

with brokers and external advisers, the first tranche of the

programme was launched in November 2022 with Barclays

Capital Securities Limited (‘Barclays’) being irrevocably

instructed to buy back up to £250m of the Company’s ordinary

shares. Feedback received from institutional investors following

the launch of the first tranche of the buyback indicated that

they welcomed the buyback programme and that, in particular,

they were pleased with the quantum.

Following completion of the first tranche of the programme

by Barclays, in May 2023 we commenced the second £250m

tranche of the share buyback, having irrevocably appointed

Credit Suisse International to carry out that tranche. In deciding

to launch the second tranche, the Board considered whether

the share buyback continued to be value accretive, taking into

account external advice.

The share buyback programme announced in November 2022

has now completed and, in total, the Company purchased

26,478,215 ofits ordinary shares for a total consideration

of £499,999,929. The purpose of the share buyback was

to reduce the capital of the Company and all shares repurchased

as part of the programme were cancelled.

Whilst some shareholders, particularly retail shareholders,

expressed a preference for return of capital by way of an

additional (or larger) dividend rather than by way of a share

buyback, the Company considered on this occasion that a

buyback was the more appropriate way to return capital,

takinginto account the long-term consequences of the

differentoptions.

44 Associated British Foods plc Annual Report 2023

Implementation of a responsible exit from

Myanmar as a source of garments for Primark.

Which stakeholders most affected?

• Suppliers

• Communities and the environment

Consideration of stakeholder views/interests

andimpact on decision-making

Primark places a high priority on the safety and wellbeing of the

people who make its clothes and products and of the Ethical

Trade team that carries out visits to the factories.

Following the military coup in Myanmar in February 2021 and

subsequent calls from global trade unions to disinvest from the

country, the situation became both concerning and complex,

given that many people in Myanmar are employed in suppliers’

factories making garments for major retailers such as Primark.

In September 2022, following its human rights impact

assessment, the Ethical Trading Initiative published a report

setting out the significant challenges faced by businesses

sourcing garments from Myanmar in relation to their ability

to conduct the level of due diligence required to meet

recognised standards governing human rights and labour rights.

The conclusions ofthis report were combined with information

from the Primark Ethical Trade team and the resulting document

was then reviewed by the Primark Myanmar Steering

Committee. Asreferred to in our 2022 Annual Report,

Primark decided to work towards a responsible exit from

Myanmar. Accordingly, Primark stopped placing orders in

October 2022 and expects itsfinal orders from Myanmar

to ship before the end of the 2023 calendar year.

Following the announcement that it would stop sourcing

fromMyanmar, Primark doubled the size of the Ethical Trade

team onthe ground to enable more frequent visits to supplier

factories to give the business improved visibility of working and

employment conditions. While the exit plan from Myanmar is

being implemented, the Primark Ethical Trade team will continue

towork with supplier factory management and relevant

stakeholders to address any issues as and when they arise.

The decision to exit was not taken lightly. Primark has managed

its exit in consultation with partners and stakeholders both

inMyanmar and globally, following the UN Guiding Principles

onBusiness and Human Rights and ACT’s responsible exit

guidelines. It is also working with IndustriALL Global Union

andalongside other retail brands to create a framework for

responsible business disengagement.

We continue to monitor the Group’s small number of

food-related sales and co-packing operations in Myanmar

(which primarily relate to the supply of food and grocery

products to the local population).

Acquisition of National Milk Records.

Which stakeholders most affected?

• Shareholders/Institutional investors

• Customers/Consumers

• Employees

Consideration of stakeholder views/interests

andimpact on decision-making

In June 2023, following detailed consideration of both the

short-term and longer-term benefits of the transaction for AB

Agri customers and our investors, we announced the acquisition

by AB Agri Limited (an indirect wholly-owned subsidiary of the

Company) of the entire issued and to-be-issued ordinary share

capital of National Milk Records plc (NMR) for approximately

£48m. The NMR business was considered by the Board to be

well-aligned with AB Agri’s objective of supporting customers

across the dairy industry, helping to drive efficiency and

increaseproductivity.

NMR provides complementary services and technology

offerings to AB Agri’s existing operations across the dairy supply

chain. It was considered that the combination will enable a

better service to the dairy industry and will ultimately offer

products that deliver increased value, efficiency and ultimately

profitability for farmers. It was also considered that the

acquisition will allow NMR to accelerate and de-risk the delivery

of its strategy, as well as creating greater opportunities for

NMR’s customers, employees and wider stakeholders.

The work done leading to the decision to acquire NMR took

into account our customers’ desire for increased value and

efficiency, as well as the opportunities that this is likely

to create for our employees as we strengthen our position

in the dairy sector.

Mauri ANZ’s new animal feed plant, Weston Animal Nutrition,

Hope Valley, Australia

45Associated British Foods plc Annual Report 2023

The list of ABF material topics has been grouped into

six areas:

• Agriculture and farming practices;

• People in our supply chains and surrounding

communities;

• Our people;

• Carbon and climate;

• Efficient resource use; and

• Food and nutrition.

We live and breathe our values through the work we do every

day. They guide our behaviour and help us deliver long-term

benefits for our people, suppliers, communities, customers

andthe environment.

These do not replace each business’s own values, but rather

consolidate and summarise the most common themes found

across the Group.

Non-financial and sustainability reporting

requirements

The Group data included in this Report on our environmental

and safety KPIs covers the period 1 August to 31 July.

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 10 to 11)

Information on our people (pages 50 to 52)

Information on DEI (page 51)

Information on our Anti-Bribery and Corruption Policy (page52)

Information on our Speak Up Policy (page 52)

Information on our approach to human rights (page 49)

Information on supporting communities (page 49)

Information on our environmental management (pages 52 to55)

Information on our climate-related financial disclosures

(pages56 to 67)

Information on our principal risks and uncertainties, including

how we manage and mitigate those risks (pages 68 to 75)

Further information on these can also be found in our 2023

Responsibility Report. Our Responsibility Report is published

online and provides additional information relating to the

commitments, approach, performance and impact of ABF

andour businesses.

We engaged Ernst & Young (EY) to provide independent limited

assurance over the 29 ESG KPIs. These are marked with the

symbol ∆ in these pages and on page 13.

There is also further information on our website at www.abf.

co.uk/responsibility, which includes our current and previous

responsibility reports, our Modern Slavery Statement and our

climate, water and forests reports submitted to CDP.

Materiality and stakeholders

This year, to better support our stakeholders’ understanding of

our business model and our approach to ESG, this Responsibility

section of the Annual Report focuses on the areas that have

been identified as material for the Group.

The materiality assessment helps us understand how ESG

factors might impact our businesses. This assessment helps

usprioritise our activities. We consider the guidance of globally

recognised sustainability standards and frameworks when

compiling potential material topics and issues. Our stakeholders

are a key part of the materiality assessment and we give them

the chance to provide input on our ESG agenda and put their

views to inform our decision-making.

Looking ahead, we are working to further develop our

materiality approach in line with the reporting requirements

under the EU’s Corporate Sustainability Reporting

Directive(CSRD).

For more information please see our Responsibility Report 2023.

RESPONSIBILITY

Investing for tomorrow

Delivering today

Our purpose is to provide safe, nutritious and affordable food, and good quality

clothing that is great value for money.

∆ EY has provided limited independent assurance over the 2023 metrics.

Seethe 2023 Responsibility Report page 114 for EY’s assurance statement.

46 Associated British Foods plc Annual Report 2023

From the products we make, to

the way we preserve the resources

we rely on and support the people

we work with, we are always

learning and incorporating better

practices. Across our businesses,

we are partnering with industry

experts to help us work towards

thehighest standards.

We work with others to leverage

our global expertise for local good.

Through collaboration with our

stakeholders, we are working

tocreate safer, fairer working

environments and promoting

thriving, resilient communities.

Our values

We strive to protect the

dignity of everyone within and

beyond our operations, so that

the people who make our

products feel safe, respected

and included.

We proudly promote and protect

aculture of trust, fairness and

accountability that puts ethics first.

From farms and factories right

through to our boardroom, we are

committed to embedding integrity

into every action.

Our Group ESG governance

The Board has overall responsibility for the general oversight

ofESG factors across ABF. It reviews each business segment

every year, including a review of ESG issues.

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 and has responsibility for ESG

issues. He 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), as well as initiatives

within procurement in our supply chains, the coordination

ofenvironmental reporting across our operations and how

weensure security for our people and assets; and

• our Group Corporate Responsibility Director who leads the

Group’s Corporate Responsibility Hub team.

The Corporate Responsibility Hub is a central resource available

to all our businesses, which provides support to them as required

on environmental and human rights issues. It provides a network

that brings together professionals across the Group working

inthese areas, the Corporate Responsibility (CR) Leads, so that

they can share knowledge and best practices with each other.

Within the remit of the CPPO, other teams have been assigned

dedicated focus areas, including DEI and health, safety and

environment (HSE) and procurement.

All our businesses operate within a clear governance framework

defined by the Group. However, our devolved business model

gives businesses autonomy to operate in ways that aim to create

enduring economic, environmental and social value. In addition

to individual business leaders, divisional CEOs also have

responsibility and are accountable fortheir ESG programmes.

This covers their ESG risks, opportunities and impacts. They can

draw on specialist support from the Corporate Responsibility

Hub and the Director of Legal Services and Company Secretary,

the CPPO as well as specialist legal advice from the team led

bythe Associate General Counsel for ESG.

Governance structure

ABF Board

Continuous

oversight and

support

Director of Legal Services

and Company Secretary

Chief People and

Performance Officer

Group Corporate

Responsibility Director

Annual business

reviews

Grocery

Sugar

Agriculture

Ingredients

Retail

Risk reviews of

material topics

Agriculture

and farming

practices

People in

our supply

chains

Our people Carbon and

climate

Efficient

resource

use

Food and

nutrition

Audit

Committee

Material topics

’

47Associated British Foods plc Annual Report 2023

RESPONSIBILITY CONTINUED

Agriculture and farming practices

ABF is a diversified group, with a wide range of food and

ingredients businesses as well as our retail brand, Primark.

Ourbusinesses depend upon agricultural systems for most of

the raw materials we use in our products, and we recognise the

need to support more sustainable farm management practices.

We have a strong association with the UK agricultural sector,

where our businesses collectively form the largest end-to-end

food producer. Globally, we are also a significant purchaser

ofcotton, sugar beet, sugar cane, tea and cereals.

Global agricultural systems are under increasing pressure

toprovide for a growing population while responding to the

challenges and effects of climate change. Extreme weather

events, increasing water stress, biodiversity loss and soil

degradation are all adding to pressures within the system.

We expect our businesses to go further than legal compliance

by continuously considering and implementing other appropriate

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:

• Group Environment Policy;

• Group Animal Health and Welfare Policy; and

• Group Supplier Code of Conduct.

Our businesses support a wide range of social and

environmentalinterventions at farm level. These span

management models including certified organic production,

standards to promote wildlife biodiversity, engagement with

smallholder growers indeveloping markets, and the adoption

ofintegrated farm management systems built on the principles

of sustainableintensification.

For example, Primark launched its Sustainable Cotton Programme

in 2013, with farmers in the programme trained ontechniques

to help improve efficiency, increase soil qualityand reduce their

use of agrichemicals. It also aims to address awide range

ofsocial development issues related in incomeimprovement.

While it is not possible for our businesses to intervene in every

farm supply chain, collectively we support many farm-focused

intervention programmes. The objective of these is to shape

management practices to promote systemic commercial, social

and environmental resilience for the long term. Science,

technology and data are essential to achieving this aim.

Many of the farm management standards our businesses

support align with the core principles of Integrated Farm

Management (IFM). They require the incorporation of a range

ofmanagement practices across a number of designated

criteria in the context of improving overall supply chain efficiency

anddriving more sustainable farm productivity. Requirements

typically include, for example, the safe handling of agrochemicals

and improving soil structure, as well as the provision of land

management practices to sustain habitats forwildlife biodiversity.

IFM can make a significant impact onarange ofmeasures.

TheUN Sustainable Rice Platform (SRP) Standard, for example,

requires Alternate Wet and Dry farm management techniques

to reduce water use in the rice sector by around 30% and,

byassociation, GHG emissions by up to 50%. Westmill has

committed to source 20% of all the rice it purchases from

farmsin Pakistan and Thailand to follow this Standard.

Our businesses also supply a range of products and services to

the agricultural sector that facilitate efficient farm management

and regenerative approaches such as cover-cropping to improve

soil structure and water retention.

We support the adoption of regenerative farm management

techniques alongside the responsible use of precision science

and technology to maximise efficiency, reduce greenhouse

emissions and limit biodiversity losses while maintaining

commercially productive agricultural outputs. For example,

Illovo– Africa’s largest sugar producer – manages cane lands

and farming activities in South Africa according to the

SUSFARMS® environmental management system. Allied Mills

and British Sugar require the farms they purchase from to

meetthe Combinable Crops Standard specified under the Red

Tractor mark. In Jordans Dorset Ryvita, the Jordan’s Farm

Partnership programme is run across 15,000ha in conjunction

with both LEAF (Linking Environment And Farming) and

TheWildlife Trusts.

We believe in the importance of high animal health and welfare

standards. This is captured in our Group Animal Health and

Welfare Policy, which applies to all our businesses.

For more information please see our Responsibility Report 2023.

A Jordan’s Farm Partnership grower tending the infield crop

alongside woodland habitat

48 Associated British Foods plc Annual Report 2023

People in our supply chains and

surrounding communities

Respect for the working conditions and labour standards of the

workers in our businesses’ supply chains is important to us. We

also recognise the potential contribution we can make to

surrounding communities.

Human and labour rights in our supply chains

Our businesses use the United Nations Guiding Principles on

Business and Human Rights (UNGPs) as a reference point to

guide their activities in implementing human rights due diligence

processes. The OECD’s Guidelines for Multinational Enterprises,

Due Diligence Guidance for Responsible Business Conduct and

various sectoral guidance documents all provide valuable

models and reference material.

Our Group Supplier Code of Conduct is an essential

requirement of theresponsible business conduct of our

businesses. This document is based on the core conventions

of the International Labour Organization (ILO) and on the Base

Code of the Ethical Trading Initiative, of which Primark is a

member. All businesses within the Group are responsible for

managing their relationships with suppliers and satisfying

themselves that suppliers operate in line with the principles

contained in the Supplier Code of Conduct.

In their application of the Supplier Code of Conduct, our

businesses continue to develop and improve human rights

due diligence processes in their supply chains as laid out in the

UNGPs. Knowledge of where potential negative human rights

impacts might exist, combined with supply chain mapping, helps

them to monitor and identify actual issues, to seek remedy or

even to anticipate and prevent them before they arise, prioritising

those that are most salient. Our devolved business model

enables our businesses to take the most appropriate approach

based on their specific supply chains and the nature of their

supplier relationships. In many cases we find that suppliers have

their own programmes that meet our expectations in this area,

but where this is not the case our businesses seek to use their

leverage or collaborate to drive change.

Our businesses use a number of data platforms to assess and

monitor potential human rights risks. Many businesses monitor

their risk through audits carried out by internal teams or third

parties. For example, Primark’s Ethical Trade auditing and

monitoring programme is one of Primark’s most important

resources for identifying risks. Some businesses also engage

workers and their representatives directly outside of the audit

process to understand what issues they face.

Our businesses seek to use the leverage they may have with

their suppliers to secure access to an effective remedy for

workers facing negative human rights impacts in their supply

chains. For example, in India, Primark’s Ethical Trade and

Environmental Sustainability team has developed a

comprehensive programme called the India Worker

Empowerment Programme to address the root causes and

manifestations of key human rights risks.

Our businesses have or are developing grievance mechanisms

to give workers a voice on the issues they face in the

workplace. Examples include ABF Sugar’s ‘We Listen, We Act,

We Remedy’ toolkit. Primark has multiple approaches to

achieve effective grievance mechanisms, these include the

Amader Kotha programme in Bangladesh, where a hotline is

available to workers in garment factories.

A cotton farmer in Primark’s Sustainable CottonProgramme, India

Different stakeholders including NGOs, trade unions,

governments, other businesses (subject to relevant competition

and anti-trust laws) and industry bodies inform our approach to

human rights due diligence. We work with these organisations

due to their expert knowledge and we acknowledge

theircontribution.

Transparency about who and where our businesses source

from enhances our understanding of human rights risks and,

where necessary, encourages collaboration to resolve issues

both locally and across our sectors. Some of our businesses,

including Primark, Twinings and ABF Sugar, publish global

sourcing maps and provide information about their processes,

progress and challenges through corporate reports, websites,

stakeholder engagement activities and submissions

toESGbenchmarks.

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 2023. Alongside our Group statement, some

of our businesses publish separate modern slavery statements.

Supporting communities

ABF Sugar continues to invest in its relationships with

communities and key stakeholders. For instance, Illovo

recognises that its sugar estates are a key part of the

communities they are located in, and this is reflected by its

activities to support those communities, such as by providing

clinics, schools and local services to support its employees

andin some cases also to support their families and

neighbouring communities.

For more information please see our Responsibility Report 2023.

49Associated British Foods plc Annual Report 2023

Our people

We employ over 133,000 people and have operations in

55countries across Europe, Africa, the Americas, Asia and

Australia. 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 the wellbeing, health and

safety of our people, contractors and visitors to our sites and

when they are travelling for business. Safety is non-negotiable.

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 three

fatalities this year and recognise the irreplaceable loss this has

caused their families, friends and colleagues. One contractor

inSpain was fatally injured during an off-site traffic accident.

Anemployee was involved in a fatal incident with a forklift truck

in one of our bakeries in Australia. An employee in Malawi was

fatally injured while working on an overhead electricity line.

Following these tragic events, our priority was to support the

families and colleagues of those who died. We investigate all

fatalities and serious accidents thoroughly, share the learnings

with safety and operational colleagues across the group

andhave reinvigorated our focus on working with moving

vehiclesand electricity to minimise the risk of such events

fromhappening again.

All our businesses must comply with our Group Health,

Safety and Wellbeing Policy. Many of them supplement this

with additional policies of their own. Responsibility for ensuring

compliance with the Health, Safety and Wellbeing Policy is

devolved to the chief executives of thevarious businesses.

Each business also has a nominated director with specific

accountability for health, safety and wellbeing.

A growing number of our businesses are investigating the

potential of human behavioural and psychological techniques,

some of them based on neuroscience, to help employees and

contractors stay focused on health, safety and wellbeing.

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; and

• the management of contractors.

Supporting our people’s mental health and their sense of

general wellbeing also remains a priority. We continue to invest

in our support across the Group, including programmes designed

to raise awareness and provide practical assistance. Inresponse

to rising living costs this year, we have continued tofocus

onensuring financial wellbeing tools and resources are

availableinternationally.

Engagement and development

Our employees can provide feedback to their business

through discussions with their line manager and leaders,

engagement surveys, and other mechanisms that support

two-way communication. The work and focus of Richard Reid,

our Non-Executive Director for engagement with our workforce,

enables the Board to ensure that our businesses have cultures

of openness so our people can share their views, that their

voice is heard and acted upon. Read more about workforce

engagement on pages 84 and 85.

Our businesses strive to attract and develop the most talented

people. We enable this by creating opportunities for professional

and personal development, and by fostering environments that

enable our people to showcase their diverse and unique skills.

We offer a variety of learning opportunities and development

programmes to help our people gain the skills our businesses

need, including apprenticeships and mentoring. Our people are

supported to build a rewarding career with us, we help them

explore their own aspirations by building awareness of what

their business and the wider group has to offer.

RESPONSIBILITY CONTINUED

We engage independent HSE specialists to provide us with

anobjective opinion of our safety performance, through

acompliance and risk management audit programme.

Of our factories and retail stores, 69% have operated for one

ormore years without an on-site employee injury.

This year, the Group’s on-site employee Lost Time Injury

(LTI)rate has reduced slightly from 0.36% in 2022 to 0.35%.

Thenumber of onsite employee LTIs has also reduced by 2%

from 355 to 348. Primark has reduced its on-site employee

LTIrate again this year by 15% from 0.40% of employees

experiencing an LTI to 0.34%.

The on-site contractor LTI rate this year has increased from

0.14% to 0.33% and the number of on-site contractor LTIs has

increased significantly by 85% from 41 to 76. Ofthis year’s

on-site contractor LTIs 80% are attributed to our Retail and

Sugar segments. The two segments are working hard

toaddress the reasons for these incidents.

For more information please see our Responsibility Report 2023.

Lost time injuries and lost time injury rate

Number of employees having an LTI during the year

0.35

%∆

0.36

0.39

0.42

0.65

800

(%)

406

682

346

355

348

∆

‘19 ‘20 ‘21 ‘22 ‘23

50 Associated British Foods plc Annual Report 2023

Diversity, equity and inclusion (DEI)

We celebrate diversity in all its forms. Ourbusinesses are

focused on widening and deepening their talent pools,

attractingnew recruits and connecting with the diverse

communities they serve. We believe engaging with adiverse

talent pool gives us a competitive edge and enhances our ability

to deliver long-term success.

Many of our businesses have their own diversity policies,

alongside the Board Diversity policy which applies across the

Group, DEI teams and dedicated programmes to support their

people, be they women, people from ethnic minorities, those

working with disabilities or people who identify as LGBTQIA+.

Our Group DEI Network brings together people from across

ourbusinesses to share knowledge, best practices and ideas.

We have over 300 DEI advocates across the Group, who

benefitfrom access to masterclasses and self-study kits

acrossa rangeof topics, 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.

To create a more inclusive workplace, we ensure leaders and

line managers have the skills they need to set the tone, model

appropriate behaviour and put in place targeted campaigns

relevant to local circumstances. We provide unconscious bias

and cultural awareness training and tools to all our businesses.

Our ‘Women in ABF’ network was established over 10 years

ago and continues to grow and evolve. It provides support for

our women to develop skills, business awareness and networks

that will enhance their current performance and future careers

across the Group. Virtual events with external and internal

speakers and networking opportunities are available to women

across the Group.

To further address gender and ethnicity imbalances, we need

toprioritise attracting a broader range of talent using more

inclusive and effective processes. We are addressing the

barriers that have historically discouraged talent from being

attracted to or joining ABF or from reaching the top of our

organisation. We continue to support female talent with

bespoke development interventions to further strengthen our

succession pipeline for senior roles across the Group.

Overall, the gender balance of the Group is fairly equal,

with women making up 55%∆ of our total global workforce.

We voluntarily report on our overall gender pay gap for

employees inGreat Britain (GB) on page 110 of this Annual

Report. Each of our GB-based businesses with over 250

employees also report on their 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.

Gender metrics

Associated British Foods plc Board directors are not included in the table below. We currently have three women and six men on the

Company’s Board. The Board is pleased that our composition continues to meet the recommendations of the Parker Review and that,

by the time of the annual general meeting, we will also have met the recommendations of the FTSE Women Leaders Review and the

new targets on gender and ethnic diversity in the Listing Rules.

Total

employees*

Men in

workforce

Women in

workforce

% women who

are in workforce

Number

ofsenior

management

roles**

Number of

menin senior

management

roles

Number of

women in senior

management

roles

Percentage

ofsenior

management

who are women

Grocery 15,788 10,164 5,624 36% 795 470 325 41%

Sugar 30,975 24,849 6,126 20% 246 171 75 30%

Agriculture 3,052 2,028 1,024 34% 454 263 191 42%

Ingredients 6,257 4,583 1,674 27% 562 387 175 31%

Retail 76,857 17,466 59,391 77% 253 131 122 48%

Central 558 350 208 37% 71 55 16 23%

Total 133,487Δ 59,440 74,047 55%Δ 2,381 1,477 904 38%

* Full-time, part-time and seasonal/contractors.

** Includes directorships of subsidiary undertakings.

See our Responsibility Report 2023 for definitions.

Number of employees, highlighting percentage

ofwomen in workforce

160,000

(%)

133,425

138,097

127,912

132,273

133,487

∆

‘19 ‘20 ‘21 ‘22 ‘23

%∆

Considering the most senior levels, those reporting to the

divisional chief executives and Group functional directors,

ourgender balance as reported to the FTSE Women Leaders

has improved to 28.1% from last year. We also see an increase

in the number of women in senior management roles to 38%.

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.

For more information please see our Responsibility Report2023.

51Associated British Foods plc Annual Report 2023

RESPONSIBILITY CONTINUED

that areappropriate to their operations and supply chains.

Ourbusinesses are all committed to cutting GHG emissions and

several of our businesses have set specific reduction targets.

ABF Sugar, Primark, Twinings Ovaltine and UK Grocery have

each set a specific emissions reduction target. Primark has set

a target in line with the Science Based Targets initiative (‘SBTi’),

while ABF Sugar is in the process of validating their reduction

target against the SBTi. We expect this to be completed by the

end of the calendar year.

Achieving net zero across ABF by 2050 will depend on a

number of factors that are beyond our control. However, based

on our track record and progress against our plans so far, we are

confident in our ability to deliver on this objective.

Reducing GHG emissions

Our businesses are targeting reductions in GHG emissions

through carbon reduction plans, energy efficiency and growing

their use of renewable energy. ABF Sugar and Primark have

transition plans in place.

Energy efficiency has long been a driver of better performance

for our Group, and we remain focused on finding ways to

produce more from less energy. Much of our electricity is

purchased from third-party power generation companies via

national grids, and our businesses understand the benefits of

transitioning to renewable energy tariffs for their purchased

electricity. Many are doing so as soon as it becomes operationally

and commercially feasible. In 2022/23, 29% of the electricity we

bought came from renewable sources, which is a 62% increase

in the amount of purchased renewable electricity compared

with last year.

Several of our businesses are also contributing to

decarbonisation by exporting renewable energy, contributing

909 gigawatt hours (GWh) this year to national grids.

This year our businesses consumed 21,183 GWh∆ of energy

which is a 1% increase compared with last year. Of this

totalconsumed, 58%∆ was derived from renewable sources.

Theseare predominantly biomass fuels from by-products

generated aspart of the production process within our

agricultural based businesses. In the main, the renewable

energy we generate comes from bagasse, the renewable

plant-based fibrous residue that remains after the extraction

ofjuice from the crushed stalks ofsugar cane. Some renewable

energy is derived from the anaerobic digestion of a range

ofwaste materials.

Our Scope 1 and 2 (location-based) emissions decreased by

6%this year from 3.11 million tonnes of CO

e to 2.91 million

tonnes of CO

e ∆. This decrease has been driven primarily

byareduction in imported electricity and a change in the fuels

used on-site.

In compliance with UK reporting requirements, we have

provided in the table on the following page our UK energy and

GHG emissions data. The principal energy efficiency measures

undertaken this year to reduce our carbon emissions include

alarge-scale project to replace fluorescent lighting with LED

lighting across stores in eight of Primark’s markets; embedding

the use of energy monitoring systems; and upgrades to

production machinery such as evaporators, pulp presses and

boilers to improve efficiencies across our UK businesses.

For more examples of energy efficiency actions, see our

Responsibility Report 2023.

Anti-Bribery and Corruption Policy

Our approach to governance is to respect not simply the letter,

but also the spirit, of our 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 ABF Anti-Bribery and Corruption Policy is available

on the ABF website.

Speak Up

Our Speak Up Policy provides a route for our employees toraise

concerns confidentially about inappropriate behaviouratwork.

Speak Up empowers our people to tell us whenever they see

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 device managed by a leading independent

provider, People Intouch.

We encourage all individuals working for ABF in any of our

businesses in any country and in any capacity to 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.

Any contact made is disseminated to the appropriate

management team responsible for investigating the issues

raised. A thorough investigation is then undertaken and any

remediation agreed.

In the year to 31 May 2023, 216 notifications were received,

ofwhich:

• 24% were resolved, with outcomes ranging from reviews

ofprocesses and support for individual employees to,

wherenecessary, disciplinary procedures being followed;

• 60% were investigated as appropriate and required no action;

and

• 16% remain under investigation.

A copy of the ABF Speak Up Policy is available on the

ABFwebsite.

Carbon and climate

As a Group, we recognise that climate change represents a

material risk throughout our supply chains and poses challenges

to some of our businesses worldwide. However, we also

recognise that climate change and the transition to a lower-

carbon world presents opportunities.

We wholly support policies that are aligned with the goals of the

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.

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 targets. In line with our devolved

business model, our businesses set plans and targets

52 Associated British Foods plc Annual Report 2023

Streamlined energy and carbon reporting

2022 2023

UK only Non-UK Total UK only Non-UK Total

Scope 1: 000 tonnes of CO

e 1,093 1,315 2,408 1,053 1,219 2,272Δ

Scope 2 Location method: 000 tonnes of CO

e 90 609 699 92 551 643Δ

Scope 2 Market method: 000 tonnes of CO

e 124 596 720 108 527 635Δ

Total scopes 1 and 2 location method: 000 tonnes of CO

e 1,184 1,923 3,107 1,145 1,770 2,915Δ

Scope 3 – Indirect emissions from use of third-party transport:

000tonnes of CO

e 637 656Δ

Scope 3 – Primark’s scope 3 emissions: 000 tonnes of CO

e 6,452 7,019Δ

Total Scope 3: 000 tonnes of CO

e 7,089 7,675Δ

Biogenic carbon emissions: 000 tonnes of CO

e 14 3,865 3,879 108 4,152 4,260Δ

Intensity ratio: Scopes 1 and 2 emissions per £1m revenue

Scopes1 and 2 location method: tonnes CO

e/£1m – – 183 – – 148

Energy consumed: GWh 4,777 16,269 21,046 4,625 16,558 21,183Δ

Biogenic emissions are those from the combustion or fermentation of biomass/biofuels on our sites.

We calculate and disclose our GHG emissions based on the WRI/WBCSD GHG Protocol Corporate Accounting and Reporting Standard Revised Edition, except

foralignment with the GHG Protocol’s approach for determining our organisational boundary and limitations with our Scope 3 disclosures. See our Responsibility

Report Appendix for detail on our current treatment of emissions from joint ventures and Scope 3 limitations. We use carbon conversion factors published by the

UK’sDepartment for Business, Energy and Industrial Strategy (BEIS) in June 2022, 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. Since 2021, we have excluded Primark’s third-party transport emissions from the Group figure as these are accounted for in the reported Primark

Scope 3 emissions. Aligned with the GHG Protocol, biogenic CO

emissions are specifically excluded from Scope 1 emissions and are separately reported.

Scope 1 and 2 GHG emissions

Many of our businesses are in the process of calculating their

wider Scope 3 emissions, focusing initially on their supply

chains. Primark completed this process in 2021 and is currently

implementing plans to support its suppliers and partners to

reduce their GHG emissions in line with its reduction target.

ABF Sugar completed this year a project to calculate its Scope 3

emissions and it is also inthe process of validating its Scope 3

reduction target with the SBTi.

Primark reports 7.02 million tonnes of CO

e ∆ this year for

theirfull Scope 3 emissions. For the rest of the Group, we

currently report emissions from third-party transport for

whichwe are responsible. These equate to 655,545 tonnes

ofCO

e∆whichis a 3% increase compared with last year.

Thisincreasehas been driven primarily by third-party transport

emissions from our Retail and Sugar segments.

Our total Scope 3 emissions, which include Primark’s Scope 3

emissions and Group third-party transport emissions increased

by 8% from 7.09 million tonnes of CO

e to 7.67 million tonnes

of CO

e ∆. This is largely due to Primark’s continued increase in

trading activity during the year and expansion into new markets,

resulting in increased materials and products brought into

thebusiness. Our businesses have started to collect their

third-party transport data to align with the internationally

recognised GHG Protocol.

For more information please see our Responsibility Report 2023.

Providing products that help others reduce their

GHG emissions

We provide products and services that have the potential to

assist others in reducing their carbon emissions, often referred

to as carbon enablement. This has always been integral to our

businesses, and a key focus for investment and innovation.

ABFbusinesses including ABF Sugar, AB Enzymes and AB

Agriplay a role in facilitating the potential reduction of other

businesses’ emissions. Forexample they do this by creating

products which have environmental benefits for the end user.

For more information please see our Responsibility Report 2023.

Our performance in 2023

5,000

(000 tonnes CO

3,555

3,993

3,161

3,107

2,915

∆

‘19 ‘20 ‘21 ‘22 ‘23

Total energy consumed and proportion from

arenewable source (%)

30,000

(GWh)

‘19 ‘20 ‘21 ‘22 ‘23

22,877

23,566

21,990

21,046

∆

21,183

∆

%∆

53Associated British Foods plc Annual Report 2023

RESPONSIBILITY CONTINUED

Efficient resource use

We are reliant on a range of natural resources to deliver our

products and new processes and technologies have enabled us

to become highly efficient at maximising the value that we can

derive from them.

Waste and circularity

As a first step, our businesses aim to avoid waste generation

asfar as possible, and reuse and recycle waste where they can.

Some of our businesses also explore energy recovery solutions

for any remaining waste. Landfill and other final disposal

techniques are always the last resort.

We are focused on making finite resources go further, believing

that waste materials are often a resource that we can find a use

for. With that in mind, our businesses are implementing

practices to reuse, recycle or reduce food, plastic and/or textile

waste. For example, we do not just make sugar. Our sugar

facilities are highly efficient biorefineries that play a key role in

other sectors’ value chains. We turn sugar beet and sugar cane

co-products and by-products into animal feed and chemical

products, as well as using it to generate renewable energy.

Wealso use on-site anaerobic digesters to generate biogas

from our waste streams.

In Retail, Primark has made a commitment to giving its clothes

alonger life. Its ambition is to drive forward innovation and

collaboration within its industry to make its clothes last longer

and reduce clothing waste.

Our food businesses avoid products going to waste by donating

surpluses to food banks, community groups and charities.

Across the Group, we generated 520,608 tonnes of waste ∆

in2023 which is an 11% decrease compared with the 584,845

tonnes generated in 2022. Of the total generated, 83% was

sent for recycling or other beneficial use. Our businesses

continue to focus on reusing waste materials where possible.

This year, 11% of all our production sites achieved zero waste

to landfill and 37% recycled or reused 95% or more of their total

generated waste.

For more information please see our 2023 Responsibility Report.

Plastic and packaging

As a leading provider of food, ingredients and clothing,

packaging contributes significantly to our environmental

footprint. Paper is the main packaging material used across the

Group, followed byplastic and glass. We 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 food

safety and reducing food waste, by extending the shelf life of

food. Our challenge is to use plastic materials responsibly and

find solutions which balance the needs of our customers and

our desire to minimise our impact.

Our businesses aim to achieve this by removing unnecessary

and problematic plastic packaging, switching to more easily

recyclable types of plastic and increasing the use of recycled

content in the plastics we use.

Our businesses demonstrate their commitment to tackling

plastic and packaging challenges by involvement with and

support for a number of pacts and programmes, including the

WRAP UK Plastics Pact, REDcycle in Australia and the Soft

Plastic Recycling Scheme in New Zealand.

In 2023, our businesses used 246,683 tonnes ∆ of packaging

compared with 267,638 tonnes used in 2022. This is an 8%

annual decrease even though tonnes of production from Group

operations increased by 3%. There has been a decrease in the

use of all the packaging materials, including plastic, steel, glass

and paper, which remains the main packaging material used.

Tonnes of plastic used as a packaging material has decreased

by 9% this year and demonstrates the commitment of our

businesses to reduce the use of plastic where appropriate.

Proportion of total waste sent for recycling or other

beneficial use

Quantity of packaging used

100

(% of total waste)

‘19 ‘20 ‘21 ‘22 ‘23

84%

80%

79%

84%

83%

Total waste generated

700

(000 tonnes)

‘19 ‘20 ‘21 ‘22 ‘23

585

632

571

585

521

∆

300

(000 tonnes)

‘19 ‘20 ‘21 ‘22 ‘23

245

259

258

268

247

∆

54 Associated British Foods plc Annual Report 2023

Food and nutrition

Providing safe food and enabling customers to make healthier

choices have both been central to our approach for a long time.

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.

As part of ABF Sugar’s commitment to thriving and healthy

communities, the business has its Making Sense of Sugar

website which provides factual information based on robust

science to help inform and educate people about sugar and the

role it can play as part of a healthy balanced diet.

As part of UK Grocery’s commitment to responsibly produce

and market safe, nutritious and affordable food, our UKGrocery

businesses provide details of the revenue generated bytheir UK

branded portfolio in terms of the 2004/5 Nutrient Profiling Model

and the Food (Promotion and Placement) (England) Regulations

2021. The Nutrient Profiling Model uses aformula to assess the

nutritional content of foods, designating them as either HFSS

(high in fat, salt, or sugar), or non-HFSS.

Overall, more than 94% of the revenue generated from our

UKGrocery’s branded portfolio in 2022/23 was derived from

products that are designated as being non-HFSS, or that are

classified as HFSS but are not subject to restrictions under the

Food (Promotion and Placement) (England) Regulations 2021.

Forcontext, foods designated HFSS within our UK Grocery’s

branded portfolio that are not within the scope of public

health-related sales restrictions include bagged sugars and

cooking oils, as well as some cooking sauces andcondiments.

Examples of products becoming healthier include Jordans

Dorset Ryvita launching several new non-HFSS recipes and AB

World Foods reducing sugar, fat and salt from Patak’s sauces.

AB Mauri has successfully developed solutions for its sweet

bakery portfolio that enables up to 100% sugar reduction while

preserving the delightful taste experience. AB Mauri is also

improving the nutritional profile of its sweet bakery goods by

increasing the amount of fibre.

A number of ABF brands, including Ryvita and Kingsmill, are

among 24 signatories to the UK Food and Drink Federation’s

Action on Fibre pledge, to increase fibre consumption in the UK.

Our UK Grocery division is also a long-term sustaining member

of the British Nutrition Foundation.

For more information please see our Responsibility Report 2023.

Water use

Our businesses aim to reduce the amount of water they abstract,

to reuse process water as much as possible and to return treated

wastewater to nature, having ensured it meets or exceeds local

and national water standards, and protect aquatic ecosystems.

We have carried out annual water risk assessments for our

operations using internationally recognised methodologies to

identify the sites operating in water-stressed areas.

We use a range of technologies in our operations to manage our

water use in fields and factories, and constantly work to further

reduce our water footprint per tonne of product we produce.

This year, the Group collectively abstracted 860 million m

∆

ofwater for use in operations and irrigation, an 8% increase

compared with last year. This rise is driven by three of Illovo’s

estates which account for a significant proportion of the Group’s

total water abstraction. Their increase in water abstraction, which

is primarily used for cane irrigation, is aligned with their increase

in tonnes of production from their operations for this year.

ABF Sugar accounts for a significant proportion of the water

used in our own operations across the Group, at 97% of the

total water abstracted. Water is used carefully and extensively

throughout the sugar manufacturing operations compared with

our other businesses; from the processing stage to extract and

refine the sugar, to generating steam in the boilers, through to

cleaning the equipment. A significant amount of ABF Sugar’s

abstracted water is also used for crop irrigation within Illovo and

where possible the sites reuse abstracted water for this

irrigation, for dust control, landspreading and cleaning machinery.

This year, across the Group, 25% of the water abstracted was

reused before being returned to watercourses. This is a cost-

and resource-efficient way of managing water.

Notable improvements in water management this year were

made by ABF Sugar and include the approval of a large-scale

irrigation project and continued conversions from furrow to

more efficient drop irrigation systems.

AB Mauri continues to invest in effluent treatment plants

atmany of its sites to deliver on its commitment to maintain

appropriate standards of water quality, this investment being

significant in recent years. More broadly, its water strategy

focuses on reducing its water-intensity ratio defined as the

quantity of water consumed per tonne of product produced,

excluding by-products. AB Mauri has reduced its overall water

intensity-ratio by 25% since 2017/18.

Total water abstracted

900

(million m

)

‘19 ‘20 ‘21 ‘22 ‘23

847

880

864

796

860

∆

55Associated British Foods plc Annual Report 2023

We recognise our role in working towards a low-carbon

economy. We have developed last year’s disclosure to highlight

actions we have taken in the current year and describe transition

plans for two of our largest businesses.

In our diversified Group, climate-related targets are set by our

businesses based on their material risks and what is relevant

and achievable for them. ABF Sugar, Primark and Twinings

remain our most material businesses, comprising 76% of

Group adjusted operating profit (2022 – 81%) and 72% of

Scope1 and 2 greenhouse gas (‘GHG’) emissions (2022 – 70%),

mainly from ABF Sugar and Twinings. Primark’s GHG emissions

arise predominantly in Scope 3, which accounts for 98% of

Primark’s total GHG emissions. See pages 52 and 53 for the

detaileddisclosure.

Our most material businesses each have their own emission

reduction targets. These are:

• ABF Sugar – a 30% absolute reduction in Scope 1 and 2

emissions by 2030 (baseline: 2018)

• Primark – a 50% absolute reduction in emissions across

thevalue chain by 2030 (baseline: 2018)

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.

We are committed to the aim of reaching net zero by 2050, but

this cannot be achieved by us in isolation. There is a need for

systemic change throughout the value chain, including a

redesign of national energy strategies and policies.

Twinings’ previously set target is under review to develop a

new, more specific carbon reduction target. For further details

please read page 33 of the Responsibility Report 2023.

Climate change continues to represent a

material risk throughout our supply chains

andpresents ongoing risks and opportunities

tosome of our businesses, some of which

wehave been working on for many years.

Weremain committed to taking action and

supporting policies 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.

Background

We published our approach to TCFD in the 2021 Annual Report

before our first TCFD report in the 2022 Annual Report.

Last year we met the requirements of Listing Rule 9.8.6R

with TCFD disclosures in line with the 2017 TCFD framework.

Thisyear we have applied the same framework, now including

the 2021 implementation guidance which requires details of

transition plans. For the first time, we have included transition

plans for ABF Sugar and Primark as they contribute most

significantly to adjusted operating profit and total GHG emissions.

Twinings’ transition plan will be included next year. These

disclosures also meet the Companies Act 2006 requirement

tomake UK Mandatory Climate Disclosures.

Last year we considered a variety of climate scenarios including

<2°C and 4°C scenarios to assess the resilience of the Group

toclimate change. On the basis of that analysis, we determined

that in the period to 2030, the risks to the Group were not

material, but are material in the longer term. This year we have

identified no significant changes in our businesses or where

they operate that would require an update to last year’s

scenarioanalyses.

Governance

Our governance processes in relation to overseeing, assessing

and managing climate-related issues evolve every year. This year

we enhanced our processes to address the evolving requirements

of climate change and other ESG matters. The Board continues

to have oversight over, and responsibility for, climate-related

risks and opportunities.

Oversight by the Board and Audit Committee

The Board receives specific updates each year on climate and

other ESG matters from the Group Corporate Responsibility

Director, the Director of Legal Services and Company Secretary

and the Chief People and Performance Officer. This year,

thisincluded:

• an update on TCFD requirements and the additional areas

weare required to report against

• our approach to transition plans and why the focus is on ABF

Sugar and Primark

• an update on UK Mandatory Climate Disclosures and which

entities are in scope

• update on strategic decisions taken by businesses

inaddressing climate change and wider ESG issues

The Board receives relevant updates, such as updates

ontransition plans throughout the year outside of this annual

presentation. All operating businesses present periodically

tothe Board, including on significant climate matters.

The Board is proactive and has taken prior assessments of

climate risks and opportunities and information from the above

meetings and used these to influence strategic decisions.

In2023 this has primarily crystallised through approval anddrive

of transition plans.

Primark’s targets for GHG emission reductions have been

validated against the Science Based Targets Initiative (SBTi). By

the end of the calendar year, reduction targets for

Scope1,2and 3 emissions at ABF Sugar should be validated

against the SBTi.

The Board possesses sufficient competencies to lead the

Group in responding to climate-related risks and opportunities.

Please refer to pages 80 and 81 for details of the Board.

Climate-related Financial Disclosures (TCFD)

CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)

56 Associated British Foods plc Annual Report 2023

The Audit Committee was briefed on updated TCFD

requirements, including transition plans for Primark and ABF

Sugar, as well as on UK Mandatory Climate Disclosures, which

apply to our largest UK subsidiaries for the first timethisyear.

Management’s role

Assessing and managing the impact of climate change on the

Group is the responsibility of the Chief Executive, reporting to

the Board. Divisional chief executives are responsible for

assessing, managing and mitigating the impact of climate

change on their businesses. Every business presents quarterly

updates to the Chief Executive and Finance Director, which

include discussion ofsignificant climate-related matters.

The Chief Executive and the Board are supported in these

activities by the Director ofLegal Services and Company

Secretary, the Chief People andPerformance Officer and the

Group Corporate ResponsibilityDirector.

Further details of their activities are set out in the ’Our Group

ESGGovernance’ section on page 47.

15% of short-term incentive targets for the Chief Executive

andFinance Director, equivalent to 30% of base salary, is linked

tostrategic, primarily ESG, measures. See pages 104, 105, 107

and 108 for further details.

Risk management

The Board is accountable for risk management including on

climate change issues. The process for identifying, assessing

and managing climate-related risks is the same as for other

business risks and sits with the business where the risk resides.

Risks are collated and reviewed at a business and divisional

level and are then reported to the Director of Financial Control,

who reviews the key risks with the Board.

More information on our risk management process is available

inthe ‘Our approach to risk management’ section on page 68.

We have integrated climate-related considerations into

processes affecting our financial statements, including

considerations of capital expenditure within the ABF Sugar

business as well as for impairment assessments.

Identifying, assessing and managing climate-related

risks and opportunities

Last year, we described our groupwide materiality-based risk

assessment, focussed on financially material climate risks and

opportunities at a divisional level and our decentralised

structure. This assessment identified risks and opportunities in

the most material divisions contributing to Group adjusted

operating profit and GHG emissions – ABF Sugar, Primark

andTwinings.

Our cross-functional divisional teams worked with third-party

experts to understand climate-related physical and transition

risks and opportunities. These were included in our

scenarioanalysis.

Following this we worked with the third-party experts and

performed high-level assessments across the remainder of our

businesses to understand whether the risks and opportunities

inindividual businesses, but also in aggregate, could be material

to the Group. The most significant risks were incorporated

intorelevant risk registers, in line with our existing risk

managementprocess. We have considered, in aggregate,

other risks and opportunities that might have a material impact.

None were identified.

This year, ABF Sugar and Primark formalised their transition

plans, which confirmed that the risks and opportunities

identified last year were still appropriate. No new risks

or opportunities were identified.

An Illovo sugar cane field in Malawi

57Associated British Foods plc Annual Report 2023

Strategy and action, metrics and targets

We operate a decentralised business model because we believe in giving our leaders the scope and accountability to create and run

the best businesses they can.

Enabling decision-making by the people closest to these issues, with the relationships with affected stakeholders, provides resilience,

agility and flexibility in planning, allowing for quick action on impacts and opportunities.

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,

Mozambique,

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

Mozambique and

Malawi

Coastal and river flood

risks: Key Group

manufacturing sites

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 Primark's Sustainable Cotton Programme (PSCP) locations in India and Pakistan.

CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

58 Associated British Foods plc Annual Report 2023

°C

-2

Scenario analysis

As described in last year's Annual Report, we engaged third-party

experts to help us perform scenario analysis to assess

the potential impact of these risks. This year, we considered

whether that analysis should be updated for any new material

factors. We concluded that the analysis remains appropriate,

exceptin respect of flooding risk in Bangladesh, where revised

information is given on page 62.

Knowledge in this area is growing and we expect models and

pathways to evolve with time. Models have limitations, and some

areas are challenging to model, for example the frequency and

severity of extreme weather events. However, our businesses can

stillconsider how they would mitigate or adapt to such events.

Additionally, in certain situations different models can project

contrasting results. In these situations, wehave used our

experience of current risks that may be exacerbated by climate

change and then considered how different outcomes would impact

our businesses.

We have used the following scenarios:

Warming

trajectory by 2100

Transition scenarios

Physical

scenarios

< 2˚ C Net Zero Emissions by 2050

Scenario (‘NZE’) (1.5˚ C)

Sustainable Development

Scenario (‘SDS’)

RCP2.6

2-3˚ C Stated Policies Scenario

(‘STEPS’)

RCP4.5

~4˚ C RCP8.5

1. The International Energy Agency’s scenarios have been used to assess

transition impacts with each scenario built on a set of assumptions on how

theenergy system might evolve. Each scenario has a different temperature

outcome. We used scenarios covering 1.5˚ C, <2˚ C and <3˚ C.

2. We used the Intergovernmental Panel on Climate Change’s Representative

Concentration Pathways (RCP) to assess physical climate risk. RCPs are

commonly used by climate scientists to assess physical climate risk, with each

pathway representing a different greenhouse gas concentration trajectory

whichcan then be translated into global warming impacts. We used climate

data from the World Climate Research Programmes Coupled Model

Intercomparison Project – Phase 5 (CMIP 5 adjusted for spatial resolution and bias

corrected) to do this translation. RCPs feed into climate, crop and flood models.

There are four RCP pathways with RCP8.5 representing the worst case scenario.

The impact of compounding means that even small changes

inassumptions can lead to a significant range of outcomes

fromclimate models and scenarios. We have therefore placed more

emphasis on projections to 2030, using them for action planning,

and used projections to 2050, where there is more uncertainty, to

check our sense of direction and consider theresilience of our

businesses should certain hypothetical scenarios take place.

Risks and opportunities have been considered over the following

time horizons:

Years Rationale

Short-term 2025 Mid-decade

Medium-term 2030 Our most financially material businesses,

ABF Sugar, Primark and Twinings have

set 2030 emission targets, 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

TCFD physical risk: concepts and frameworks

In all physical risk analysis, we have used the RCP8.5 scenario,

which is widely considered to represent one of the worst-case

climate scenarios with temperatures reaching some 4˚ C above

pre-industrial levels by 2100. This scenario projects an extreme

view of physical climate change impacts.

In addition to RCP8.5, the evaluation of physical risks has been

supplemented with analysis using either RCP2.6 or RCP4.5

scenarios, depending on which climate scenario is most

applicable to the risk. We have focused on the results of

RCP8.5as it is the most challenging scenario from a physical

risk perspective.

In line with best practice, we used a multi-modal approach to

capture and assess the uncertainty of future climate change

projections. The numbers quoted represent the median

projected result. Where appropriate we have also disclosed

ranges in potential outcomes to reflect the uncertainties and

variables inherent when using models to assess future climate

outcomes. These outcome ranges represent the 25

and 75

percentiles. Detailed data for the analysis was supplied by our

businesses, including individual locations of our own operations,

suppliers’ factories and the location of the farming communities

in Primark’s Sustainable Cotton Programme in India, Pakistan

and Bangladesh.

Our third-party experts advised us which crop models to use to

assess climate change impacts on crop yields. In some cases

(e.g. for cotton and tea), only one available crop model was

deemed sufficiently robust for evaluating future climate impacts

on yields, the analysis was based on the input of five climate

models providing sensitivity to the analysis. For other crops (e.g.

sugar cane, wheat and corn), multiple crop models were used.

Global average surface temperature change

RCP8.5

RCP2.6

2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Climate model projections of average global temperature under the RCP2.6

and RCP8.5 scenarios (IPCC Fifth Assessment Report, 2013).

Use of scenario results to support strategy

and financial planning

Scenario analysis has helped our businesses confirm the actions

they need to take and strategies they need to adopt on an

ongoing basis to mitigate and adapt to risks and take advantage

of opportunities. Mitigating actions are managed by the relevant

businesses as the actions are specific to them. We consider

that the scenario analysis performed in conjunction with the

mitigating actions undertaken by our businesses demonstrate

that our business models and strategy are resilient to climate

change in each of the transition and physical scenarios

outlinedabove.

59Associated British Foods plc Annual Report 2023

Determining the potential impact of climate risks and the size of

climate opportunities is challenging. Climate models include

several fixed assumptions and there is significant uncertainty

around the impacts of climate change and how governments

will respond toitsthreats.

We have taken several factors into consideration when

assessing our confidence in mitigating actions:

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 farmers in Primark’s

sustainable cotton programme and pest control in British

Sugar.

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 find innovative

solutions to adapt to their impacts.

This year we experienced significant flooding, damaging the

sugar crop in our sugar business in Mozambique, which

required an asset write-off, butthe financial impact on the group

was not material.

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

Significance assessed by considering the impact of climate risks

and opportunities on the Group’s financial performance and position.

Results of the climate-related risks and opportunities assessment

Having evaluated, using scenario analysis, all physical and transition risks in the table on page 58, 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

2022 assessment

Low

2030

Medium

2050

Scenarios assessed: RCP2.6 and RCP8.5

Assessment: based on RCP8.5

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

• By 2022, 40% of Primark’s cotton clothing sales (units)

contain cotton that is organic, recycled or is sourced from

Primark’s Sustainable Cotton Programme (‘PSCP’).

• Cotton sourced through PSCP is grown using farming

methods with a lower environmental impact, including

reducing water, chemical pesticide and fertiliser use and

training farmers in these methods. Our 2013-2019 study

concluded that switching to these farming methods led to

increased yields which help mitigate negative yield impacts

caused by climate change.

• By 2022, some 250,000 farmers have received training

inour PSCP.

2023 update

Metrics and targets

• Proportion of cotton clothing sales (units) that contain cotton that is organic, recycled or sourced from Primark’s Sustainable

Cotton Programme: 100% by 2027. 46% of cotton clothing units sold against this metric in 2023. This is up from 27% at the

launch oftheprogramme and 40% from 2022.

• Number of farmers trained in Primark’s Sustainable Cotton Programme: 275,000 by end of 2023. As of July 2023, 299,388

(

∆

assured) farmers had received training through the programme.

Please refer to https://corporate.primark/en-gb/primark-cares/resources/reports for Primark’s basis of reporting for each metric.

Projects addressing physical risks

Primark Sustainable Cotton Programme

Cotton sourced through PSCP is grown using farming methods with lower environmental impact, including reducing

water, chemical pesticide and fertiliser use. This has led to increased yields, lower input costs and an overall increase

inincome for the farmers trained in these methods.

Project impact

As at July 2023, 299,388 (

∆

assured) farmers had received training through the programme compared to a target

of275,00 farmers. In 2023, the programme was expanded to Turkey.

Impact assessment

CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

60 Associated British Foods plc Annual Report 2023

Impact of climate on sugar yields in Africa (Malawi, Mozambique,

South Africa, Tanzania and Zambia)

2022 assessment

Low

2030

Medium

2050

Scenarios assessed: RCP2.6 and RCP8.5

Assessment: based on RCP8.5

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.

• Improving irrigation efficiency to mitigate the risk of drought,

including investing in drip irrigation and river defences to

reduce storm damage.

2023 update

Metrics and targets

• Sugar production (tonnes): ABF Sugar has produced 2.8m tonnes of sugar

• Volume of water abstracted (million m

): ABF Sugar has abstracted 830million m

of water.

• ABF Sugar has a target to reduce its end-to-end supply chain water usage by 30% by 2030. ABF Sugar has reduced water usage

by 4% between 2017/18 and 2022/23.

Projects addressing physical risks

Irrigation and drainage investment

ABF Sugar is implementing a variety of irrigation and drainage projects across its African businesses to reduce the

impact climate has on sugar yields. These include drip irrigation conversion, a bulk water supply efficiency programme

andsub-surface drainage in Malawi.

Project impact

These are a few of the ongoing projects to improve irrigation and drainage and therefore reduce water usage.

Thisismeasured primarily through solutions implemented and volume of water saved.

Climate impact on tea yields

2022 assessment

Low

2030

Low

2050

Scenarios assessed: RCP8.5

Assessment: based on RCP8.5

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 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.

2023 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.

61Associated British Foods plc Annual Report 2023

Impact on flooding risk on Primark’s third-party manufacturers

2022 assessment

Low

2030

Medium

2050

Scenarios assessed: Bangladesh RCP4.5 and RCP8.5;

China RCP8.5

Assessment: Bangladesh (based on RCP4.5 and RCP8.5)

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 (based on RCP8.5)

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

• The analysis shows that the majority of Primark’s suppliers

in Bangladesh are located in areas of Dhaka which are less

susceptible to flooding.

• The local Dhaka community regularly deals with flooding

and has adapted processes to mitigate its impacts.

• Ensuring a geographical spread of supplier factories

across China.

• Primark’s Sourcing Strategy has been in place for two years

with a focus on geographical diversification, creating a more

balanced global footprint and developing risk mitigation

strategies to increase flexibility and agility when unexpected

events occur.

2023 update

Metrics and targets

• Number of Primark supplier factories (China and Bangladesh) subject to high flood risk.

China

• 10.9% of factories face high ravine flood risk at baseline (2023)

• 2.9% of factories face high coastal flood risk at baseline (2023)

Bangladesh

• 10.2% of factories face high ravine flood risk at baseline (2023)

• 5.1% of factories face high coastal flood risk at baseline (2023)

Projects addressing physical risks

Structural Integrity Programme – Mott MacDonald flood pilot – Bangladesh

Primark has mobilised an engineering team under its Structural Integrity Programme to pilot an approach in Bangladesh

to support supplier factories to mitigate flood risk. Primark has appointed Mott MacDonald to investigate flood risk

associated with factories within Primark’s supply chain that are deemed high risk. The programme seeks to understand

the detailed risk to each site and how those supplier factories have taken appropriate measures to minimise the potential

impact of flooding such as damage to property, plant and equipment and finished goods as well as protecting the

wellbeing of factory workers.

Project impact

Primark will use the pilot to determine how to deploy wider activity within the existing Structural Integrity Programme.

Progress in this area will be provided in next year’s report. However, the overarching goal is to ensure factories have

theright flood mitigation measures in place.

CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

62 Associated British Foods plc Annual Report 2023

Impact of carbon pricing mechanisms on ABF Sugar

2022 assessment

Medium

2030

Scenarios assessed: International Energy Agency’s Net

Zero Emissions by 2050 Scenario, Sustainable

Development Scenario and Stated Policies Scenario

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 have a return on investment above

15%. Beyond 2030, while some technologies exist, they are

not yet commercially viable.

Mitigation

• ABF Sugar has a detailed plan to achieve its 30% absolute

GHG reduction by 2030. Some 12% reduction has already

been delivered versus its 2018 baseline.

2023 update

Metrics and targets

• A 30% absolute reduction in Scope 1 and 2 emissions by

2030 (from a 2018 baseline).

See also the transition plan on pages 64 and 65.

Impact of carbon pricing mechanisms on Primark

2022 assessment

Medium

2030

Scenarios assessed: International Energy Agency’s Net

Zero Emissions by 2050 Scenario, Sustainable

Development Scenario and Stated Policies Scenario

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.

The plan focuses on Primark’s top five sourcing markets and

support to suppliers with implementing energy-efficient

measures and making a switch to renewable sources.

Theplan does not assume the purchase of offsets.

Mitigation

• Primark has a worked-up plan to achieve a significant

reduction in supplier emissions by the end of the decade

and is aligned with the UNFCCC Fashion Industry Charter

goal of net zero emissions across all three Scopes by 2050.

2023 update

Metrics and targets

• A 50% absolute reduction in Scope 1, 2 and 3 emissions by

2030 from a 2018 baseline.

See also the transition plan on pages 66 and 67.

Projects addressing physical risks

Technology adoption

ABF Sugar is using SAI platform FSA to support assessing, improving and validating on-farm sustainability. Thisfocuses

on soil health, pest management and climate change.

Project impact

ABF Sugar is in the process of defining metrics to monitor the progress of this programme. It will align these metrics to

the SAI regenerative agriculture framework.

63Associated British Foods plc Annual Report 2023

ABF Sugar

ABF Sugar is committed to reducing absolute Scope 1 and 2

emissions by 30% from a 2018 baseline by 2030. ABF Sugar is

undergoing a project to measure Scope 3 emissions. Once this

is completed, they will be considered. This transition plan explains

the activities ABF Sugar has planned to ensure that it can meet

this commitment.

Governance

The ABF Sugar chief executive and local managing directors are

responsible for overseeing climate-related risks, opportunities,

overall strategy and transition plans. ABF Sugar holds regular

meetings with the corporate centre which act as a forum for

climate-related content, particularly updates on: climate

commitments, transition plans, GHG reduction roadmaps and

any additional risks or opportunities identified. The frequency

ofthese meetings has increased in this first year of reporting

ontransition plans.

Climate related targets are included in the personal performance

incentive assessment of senior management.

Risk management

The ABF Sugar chief executive and local managing directors are

accountable for effective risk management. The process for

identifying, assessing and managing climate-related risks is

thesame as for other risks and sits with the business where

therisk resides. These individuals are also accountable for

identifying, assessing and managing risks to delivering the

transition plan.

Each business develops action plans to respond to relevant

climate-related risks and opportunities. All plans and projects are

subject to a well-established governance process within ABF

Sugar that examines each performance improvement proposal

against internal rate of return criteria and ESG factors. These

plans are then approved by the local managing director and the

chief executive of ABF Sugar.

Strategy, metrics and targets

ABF Sugar has categorised existing and new plans and projects

into three timeframes:

1. Short term (present to 2025): Focus on improving efficiency

and reducing operational GHG emissions; investing in energy

efficiency with the aim of reducing energy consumption and

eliminating coal.

2. Medium term (2026 to 2030): Targeting key sites and pairing

them with key technological resources.

3. Long term (beyond 2030): Focusing on employing low-

emission technologies, managing climate-related risks across

the value-chain, and partnering to innovate at factories across

the business.

There are assumptions on low-emission technologies for

hydrocarbons and government regulations surrounding biogas

that underpin these goals. The above short- and medium-term

goals have been identified to achieve ABF Sugar’s 2030

commitments.

These goals have been set in line with the Science Based

Targets Initiative (‘SBTi’). ABF Sugar’s emissions reduction

target will be validated by the SBTi throughout 2023, with the

aim of completion before the end of the calendar year.

In alignment with the best practice, ABF Sugar will need to

develop a strategy to neutralise residual emissions that will not

be abated through emissions reductions initiatives in the future.

The progress of each project is monitored by a defined

governance structure which aligns with the capital and

performance improvement programme quarterly review. This is

owned by the Head of Advocacy who monitors each project

with appropriate metrics. Progress against the transition plan

isalso monitored as part of this process.

The selection and implementation process for these projects

areincluded in ABF Sugar’s financial planning process.

Eachselected project undergoes a formal capital

expenditureprocess.

Some of the long-term projects are reliant on external factors.

For example, development of hydrogen solutions will require

significant government policy change and support. If this

doesnot eventuate, ABF Sugar will have to reassess its

long-termplans.

In line with the 2021 TCFD implementation

guidance, this year we are disclosing transition

plans for ABF Sugar and Primark. We have

applied a materiality-based methodology as set

out in the climate risk and opportunity section.

ABF Sugar and Primark are currently our largest

contributors to GHG emissions. Twinings will

be included next year.

Whilst each business prepares and executes

their own transition plans, the Board has

overallaccountability for the transition plan.

Transition plans were reviewed by the Board

inJune. The Board reviews these plans to

ensure they align and further the Group’s

transition to a low-carbon economy. The Board

will receive an update annually on the status

and execution of the transition plans with the

transition plansbeing revised every three

years, or sooner if amaterial event occurs.

Transition plans

CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

64 Associated British Foods plc Annual Report 2023

GHG improvement road map

Impact from today Moving towards 2030 Beyond 2030

Monitor the horizon

Hydrogen, carbon capture, usage

and storage and negativecarbon

General electrification

New sugar process technology

Plan and execute

Efficiency programmes

Co-generation in Africa

Tactical electrification

Feed drying

Green cane harvesting

Solar electricity

Develop projects and

commercial relationships

Hydrogen and carbon capture,

usage and storage (Vivergo)

EU biogas/biomass

Short term (present to 2025)

• UK: Projects focus on smaller factory energy efficiency/steam

reduction, coal elimination and reduction of energy use for

pulp drying.

• Africa: Projects focus on energy efficiency and coal

elimination/reduction in South Africa and green cane

harvesting.

• Spain: Projects focus on factory energy efficiency and

automation as well as a specific project in Guadalete.

Medium and long term (2026 to 2050)

• UK: Projects focus on technological advancements for factory

energy efficiency/steam reduction and alternate pulp drying

technologies.

• Africa: Projects are aligned to those in the short term, but the

technology is yet to be developed.

• Spain: Projects focus on alternative fuel projects, but current

regulations present a challenge at this point in time.

ABF Sugar has reported an overall 24% reduction in absolute

Scope 1 and 2 emissions for 2023 against 2018. Please refer to

page 92 of the 2023 Responsibility Report for further detail. ABF

Sugar is on track to achieve its carbon reduction goal of 30%

absolute reduction by 2030.

Projects supporting carbon reduction to date

Since communicating its 2030 commitments, ABF Sugar has delivered a number of projects to support the transition to a low-carbon

economy. These are a sample of the projects ABF Sugar has delivered, there is a larger number and carbon impact.

Project Impact

Bury St Edmunds hot gas

generator dryer (February 2019 –

September 2021)*

Modifications made to dryers have allowed them to run on natural gas instead of coal,

leading to a 1% decrease in carbon emissions (9,833 tCO

e).

Newark decalcification (February

2018 – September 2022)*

Calcium was removed from thin juice to prevent evaporator scaling. This enables

evaporators to operate more energy efficiently, leading to a 0.3% decrease in carbon

emissions (3,302 tCO

e).

Newark heater (October 2018 –

September 2022)*

Several new heaters have facilitated improved heat transfer and improved energy

performance, leading to a 0.2% decrease in carbon emissions (1,758 tCO

e).

Wissington gas turbine

performance recovery (July 2017

– September 2019)*

Gas turbine performance has been improved, leading to a 1% decrease in carbon

emissions (10,407 tCO

e).

Cantley process safety – heavy fuel

oil elimination (September 2016 –

September 2019)*

A switch from heavy fuel oil to natural gas at this site, leading to a 0.1% decrease in carbon

emissions (1,422 tCO

e).

Bury cossette quality improvement

(March 2017 – September 2018)*

Slicer machines were replaced with newer models allowing for higher quality cossette and

lower water usage leading in turn to less process water for sugar extraction and lower

evaporation demand. This has led to a 2% decrease in carbon emissions (20,242 tCO

e).

* All emission decreases are against the 2017/18 baseline.

All of the above projects were selected in alignment with ABF Sugar’s short-term focus on energy reduction, energy efficiency and

smaller fuel switching projects. These have included projects that enable the reduction of steam usage in the factory and fuel

reduction in our animal feed dryers. By minimising our factories’ energy demand in the near-term, this will enable ABF Sugar to deploy

technological and larger fuel-switching projects in the medium- to long-term.

There is a strong pipeline of accretive GHG reduction projects. Each ABF Sugar business has its own environmental plan which has

been categorised between short- and long-term.

65Associated British Foods plc Annual Report 2023

Strategy, metrics and targets

In 2021, Primark set an overarching objective to halve absolute

carbon emissions across its value chain by 2030, from a base

year of 2018. In defining a roadmap to realise this ambition,

Primark has focussed on key priority areas across all emission

scopes for the short term (up to 2025) and medium term

(upto2030).

Short-term goals focus on maintaining current certifications,

developing strategies for heat decarbonisation and energy

efficiency. Medium-term goals focus on product-specific

initiatives. Long-term goals are yet to be defined. Development

of technology and innovations gaps in the market are constraints

in defining long-term goals. We will evolve these goals as these

needs are met and as the business evolves.

These goals have been set in line with the Science Based

Targets Initiative (‘SBTi’). Primark’s emissions reduction target

has been validated by the SBTi in 2023.

At present, Primark has not included residual emissions

neutralisation (“carbon offsetting”) in its transition planning.

However, in alignment with industry standards, for its long-term

ambition Primark will need to develop an approach to

neutralising the residual emissions that will not be abated

through its emissions reduction strategy.

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 (see the diagram below). These are

Scope 1 and 2 emissions, where the business has stronger

influence, and the most significant Scope 3 categories in terms

of absolute emissions.

Scope 1 and 2: 3.5%

Scope 3: 96.5%

Primark’s baseline emissions (2018)

Primark

Governance

The overall responsibility for the Primark transition plan lies with

Primark’s Chief Financial Officer. The Director of Primark Cares

and Head of Environmental Sustainability work with the Chief

Financial Officer to implement the plan.

Primark has established dedicated forums for the governance of

its decarbonisation strategy (transition plan), which fall under the

broader Primark Cares governance structure. In particular, these

forums engage key stakeholders across the business, including

board members, and cover related climate commitments,

GHGemissions reduction roadmaps and any relevant risks

oropportunities identified. For additional information, please

refer to the Primark Sustainability and Ethics report,

‘Governance’section.

Additional ad-hoc meetings with the corporate centre have been

held in this first year of reporting on transition plans to ensure

alignment across the Group.

Climate related targets are included in the personal performance

incentive assessment of senior management.

Risk management

The Primark Chief Executive and Chief Financial Officer are

accountable for effective management of physical and transition

climate-related risks.

Last year the impact of climate risks and opportunities on

Primark was assessed by the Group using scenario analysis.

Primark has incorporated this analysis on transition risks into its

own risk management process to ensure that no risks are

omitted. Risks are identified and assessed through various

means. Workshops with internal stakeholders are held focusing

on the identification, assessment and management of climate

and nature-related risks.

CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

End-of-life treatment of sold products

Business travel

Waste generated inoperations

Capital goods

Fuel and energy-related activities

Use of sold products

Upstream transportation

Purchased goods and services

0.6%

0.2%

0.1%

2.0%

0.6%

12.1%

8.1%

76.3%

66 Associated British Foods plc Annual Report 2023

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 2018/2019 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)

• Develop all clothes to be recyclable by design by 2027.

• Develop all clothes from recycled or sustainably sourced

materials by 2030.

• Further regenerative agricultural practices will be used in the

Primark Sustainable Cotton Programme.

• Eliminate single-use plastics and all non-clothing

wasteby2027.

The selection and implementation process for these projects are

included in Primark’s financial planning process. Each selected

project undergoes a formal capital expenditure process where

capital spend is involved.

This year, there has been an overall increase of 11% in carbon

emissions across the value chain against Primark’s baseline year

2018/19. This is the result of an increased volume of material

used to produce the products sold over that period. In the short

term, this trend is likely to continue, but there will be a decline

as Primark increases the use of more sustainably sourced

materials across its product range and once the energy

programmes being rolled out across the supply chain begin

todeliver at scale.

Projects supporting carbon reduction to date

Since communicating its 2030 commitments in 2021, Primark has started several key projects focussed on the priority areas

identified in the road map and using a pilot-learning-scale approach. Once at scale, these projects are expected to drive the bulk

of Primark’s decarbonisation as they tackle the most material value chain emissions categories.

Project Impact

Renewable energy

procurement

(Late2022

topresent)

Own operations: Primark has signed renewable power contracts in seven countries, covering the UK and continental

Europe. At the time of publishing this report, approximately 70% of stores were covered by a renewable orlow-carbon

electricity contract. However, as these contracts have come into operation at different times over the course of the

year, their full benefit isn’t seen in the Scope 2 emissions reporting. Continuing its progress in the renewable power

market is a key priority for Primark in the next year, alongside addressing Scope 1 emissions from onsite heating.

Supply chain: Primark has partnered with Ren Energy to help suppliers source and switch to energy from

renewablesources.

Customer

education

(Late2021

topresent)

Influencing customers on how to use Primark’s products is important to support the decarbonisation of itsdownstream

value chain. Key behavioural drivers to emissions reductions include reducing the number ofwashes, avoiding tumble

drying and keeping clothes in active use for longer. Primark’s plan is to collaborate with customers and industry

partners to advance our understanding and extend our sphere ofinfluence. Over the last year, Primark has scaled

itsrepair workshops further in the UK and Ireland, andintroduced them in the Netherlands, Germany and France.

Todate, Primark has held 120 workshop sessions, offering more than 1,700 free places tocustomers and colleagues.

To further maximise the reach of the repair workshops, Primark has created an online customer hub featuring

easy-to-follow repair videos.

Energy efficiency

improvements

(early2021

topresent)

Own operations: Primark is scaling the roll-out of an energy bureau to enable remote management of energy and

greater visibility of energy use to manage demand more effectively. Atyear end, this covered more than 179 locations

across the UK at year end. It allows the business to maintain sustainable store condition in an energy efficient manner.

Primark also launched a significant initiative to fit all stores with energy-efficient light fittings. Approximately 70%

ofPrimark stores across eight markets are now powered by renewable or low-carbon electricity and 141 stores have

switched to energy-efficient LED lighting.

Supply chain: Building on the learning of small-scale energy and water efficiency pilot projects conducted over years

inChina using the Apparel Impact Institutes (Aii) Clean by Design (CBD), Primark has now scaled its energy efficiency

programmes to engage 57 factories in Bangladesh, China and Cambodia. Suppliers involved learn about more energy

efficient practices and receive support on data collected and analyse to create their own emissions reduction action

plan, while improving manufacturing processes. These programmes create improvements in factory operations by

delivering training, guidance and workshops.

Packaging Centre

of Excellence

(2019to present)

Primark has set a target to remove all single-use plastic by 2027 and estimates it has already removed and/or avoided

more than 1 billion units of single-use plastic from its business in 2019.

67Associated British Foods plc Annual Report 2023

Our approach to risk management

The delivery of our strategic objectives and the sustainable

growth and long-term shareholder value of our business is

dependent on effective risk management. We regularly face

business uncertainties and it is through a structured approach to

risk management that we are able to mitigate and manage

these risks and embrace opportunities when they arise.

Thesedisciplines remain effective as the global environment

continues to be uncertain in the face of increasingly complex

global economic, geopolitical and environmental challenges.

Asa result of these, together with ongoing inflationary pressures,

cost-of-living remains a real issue for consumers across a

number of the markets in which we operate.

The diversified nature of our operations, geographical reach,

assets and currencies are important factors in mitigating the

riskof a material threat to the Group’s sustainable growth

andlong-term shareholder value. However, as with any

business, risks and uncertainties are inherent in our business

activities. These risks may have a financial, operational and

reputational impact.

The Board is accountable for effective risk management,

foragreeing the principal, including emerging risks facing the

Group and ensuring 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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, on a timely basis, to ensure each business’s

compliance with relevant legislation, our business principles

andGroup policies.

Our businesses perform risk assessments which consider

materiality, risk controls and specific local risks that are relevant

to the markets in which they operate. The collated risks from

each business are shared with the respective divisional

chiefexecutives who present their divisional risks to the

GroupExecutive.

Emerging risks are identified and considered at both a Group

and business unit level, with key management being close to

their markets and geographies. These risks are identified as

partof the overall risk management process 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.

The Group’s Director of Financial Control receives the risk

assessments on an annual basis and, with the Finance Director,

reviews and challenges them with the divisional chief

executives on an individual basis.

These discussions are wide-ranging and consider operational,

environmental and other external risks. These risks and their

impact on business performance are reported during the

yearand are considered as part of the monthly management

review process.

Group functional heads including Legal, Treasury, Tax, IT,

Pensions, HR, Procurement and Insurance also provide input to

this process, sharing with the Director of Financial Control their

view of key risks and what activities are in place or planned to

mitigate them. A combination of these perspectives together

with the business risk assessments creates 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, which include

emerging 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 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

throughout the year.

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 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.

Geopolitical uncertainty, Russia’s ongoing war

inUkraine and the potential for escalation of the conflict

in Gaza

The ongoing Russian war in Ukraine continues to drive economic

uncertainty in almost all of the markets in which we operate.

Whilst during the year, we have seen a reduction in energy

prices and sea freight costs, which are significant costs for ABF,

the ongoing situation remains volatile and could result in supply

chain disruption.

We remain cognisant of the significant impacts that would

result from an escalation in the war in Ukraine, particularly

ifwestern governments’ support for Ukraine were to waver.

PRINCIPAL RISKS AND UNCERTAINTIES

Managing our risks

68 Associated British Foods plc Annual Report 2023

Russia’s suspension of the Ukraine grain export agreement

inJuly 2023 could result in tensions and further inflation inthe

medium-term. Our management teams continue to workclosely

with suppliers to secure raw materials, maintain production and

provide a reliable supply to our customers.

Escalation of recent events in Gaza could have further

inflationary pressures, particularly on energy. In addition, there

could potentially be wider implications for global logistics and

supply chains.

Cost of living

Recent global financial data shows that several European

economies in which we operate tipped into recession in

recentmonths and a prolonged period of stagnation is a real

possibility. This would increase consumer debt problems,

resulting in increasing costs of living and putting additional

strainon household budgets.

Whilst consumer spending has proven to be more resilient than

anticipated at the start of the financial year, household budgets

continue to face real pressures as a result of high inflation and

interest rates and general economic uncertainty. This means that

some consumers are having to make challenging and difficult

choices in respect of what they spend and where theyspend it.

We continue to offer safe, nutritious and affordable food and

affordable, quality clothes to our customers. Primark’s cost

leadership position continues to be attractive to the customer.

In the food businesses, there is an increasing 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.

The medium-term impact on our businesses will depend on

theextent of government intervention and the duration of any

economic downturns.

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’s Corporate Sustainability Reporting

Directive (CSRD) requiring EU-incorporated companies and

certain other companies with operations in the EU topublicly

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.

Environmental, Social and Governance

ABF has an ambition to continue to make food and clothes

available and affordable and to achieve net zero by 2050 orsooner.

Environmental factors, including the potential implications of

climate change within our businesses and their supply chains,

are considered as part of the risk management framework and

they also frame opportunities for our businesses. Our culture

and values, and particularly our devolved decision-making

model, empowers our teams to make the right judgements

inassessing and mitigating risks related to climate change.

Where relevant, third-party experts have been engaged to

perform scenario analyses and in-depth risk assessments which

form the basis of strategies to mitigate the material risks.

Our local management teams have demonstrated their ability

torespond quickly and make decisions that make sense to

theirbusinesses when extreme climate-related events occur.

Forexample, in response to adverse weather conditions which

resulted in significantly lower beet yields from the 2022/23 crop,

British Sugar moved swiftly to secure alternative sources of

supply. Similarly, our Africa sugar business, Illovo, has been

significantly impacted by floods in Mozambique and Malawi,

andis investing in a variety of irrigation and drainage projects

toreduce the impact climate has on sugar yields.

Leaders across ABF are also empowered to implement

responsible business practices to further reduce our negative

impact on the environment, such as the sustainable use of

natural resources, sourcing responsible packaging and our use

of plastic, as well as reducing carbon emissions. Each of our

businesses has prioritised resources to those environmental

factors which are of greatest relevance and will make the

greatest long-term difference.

The Board has overall responsibility for overseeing ESG factors

across ABF. On a regular basis, the Board conducts a review of

each of our business segments, including a review of significant

ESG issues.

Divisional chief executives have responsibility and are

accountable for their ESG programmes, as well as for risks,

opportunities and impacts in their divisions. They can draw on

support from the Corporate Responsibility Hub and the Director

of Legal Services and Company Secretary, the CPPO as well as

specialist legal advice from the team led by the Associate

General Counsel for ESG. The leaders of our businesses are

also challenged by the centre through detailed reviews of the

Group’s environmental performance, health and safety

performance, and its diversity, equity and inclusion and

workforce engagement programmes.

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.

Outlined below are the Group’s principal risks and uncertainties

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.

ABF is exposed to a variety of other risks related to a range of

issues such as human resources and the attraction, development

and retention of people, 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 our 2023

Responsibility Report. Here, we report the principal risks which

we believe are likely to have the greatest current or near-term

impact on our strategic and operational plans and reputation.

They 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 2022’ describe our experience and activity

over the last year.

69Associated British Foods plc Annual Report 2023

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

External risks

Operating in global markets

Fluctuations in commodity and energy prices

Context and potential impact

Associated British Foods operates in 55 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 geopolitical uncertainty;

a range of consumer trends; evolving legislation; and changes

made by our competitors.

The ongoing Russian war in Ukraine continues to drive

economic uncertainty in almost all of the markets in which

weoperate.

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 incorporates potential

short-term market volatility and evaluates longer-term socio-

economic and political scenarios. 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.

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 geo-political 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.

We engage with governments, local regulators and community

organisations to contribute to, and anticipate, important changes

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 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.

in public policy. We conduct rigorous checks when entering

orcommencing business activities in new markets.

Our management teams continue to both monitor where

products and raw materials are sourced from and work closely

with suppliers to secure raw materials, maintain production and

provide a reliable supply to our customers.

Changes since 2022

Whilst during the second half of the year, we have seen

areduction in energy prices and sea freight costs, which are

significant costs for ABF, the ongoing war in Ukraine means

thatthere is still a level of volatility in energy prices and a risk

offurther supply chain disruption. Russia’s suspension of the

Ukraine grain export agreement in July 2023 could result in

further inflation in the medium term. An escalation of the recent

hostilities in Gaza and the potential wider implications for the

global economy are being closely monitored.

Recent global financial data shows that several European

economies in which we operate tipped into recession in recent

months and a prolonged period of stagnation is a real possibility.

This would increase consumers’ debt problems and put

additional strain on household budgets.

Geopolitical tensions continue to arise in a number of countries

in which we operate and this is having an impact on sourcing

and supplier management. For example, Primark are working

through a responsible exit plan in consultation with partners

andstakeholders in Myanmar and globally, in line with the

UNGuiding Principles on Business and Human Rights and the

ACT (Action, Collaboration and Transformation Responsible

ExitGuidelines). Since the announcement to stop sourcing from

Myanmar, Primark has doubled the size of its ethical team in

itsremaining sourcing locations enabling an increased number

of supplier factory audits.

High inflation continues to be a challenge for our yeast and

bakery ingredients businesses based in Argentina and Turkey.

The impact of the COVID-19 pandemic on our businesses has

been negligible in the past year, now that restrictions have

largely been removed, particularly in China.

Changes since 2022

A number of our food and agriculture businesses have

experienced increased input costs driven by the appreciation

ofenergy and agricultural commodity prices in the financial year.

Energy prices, particularly in the first half of the year in UK and

Europe, increased materially as a result of significant market

uncertainty and supply concerns. Whilst wholesale energy

prices have reduced from the peak, the market continues

toexperience levels of volatility. Businesses continue

tomanage commodity price risk under their existing risk

management frameworks and, where appropriate, reflect

thisinpricing of products.

Increased

Unchanged

Decreased

70 Associated British Foods plc Annual Report 2023

Movement in exchange rates

Health and nutrition

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, where necessary, ensure

appropriate actions are taken to manage the impact of currency

movements.

Board-approved policies require businesses to hedge all

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.

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. We have provided a detailed breakdown

of our UK Grocery product portfolio in the context of nutrition

within the ABF Responsibility Report.

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 merger and acquisition activity.

Changes since 2022

On average, sterling has weakened against most of our trading

currencies this year, resulting in an operating profit gain on

translation of £17m.

Primark covers its currency exposure on purchases of

merchandise denominated in foreign currencies at the time of

placing orders, with an average tenor of Primark’s hedging

activity of between three and four months. There was a

negative transactional effect from the appreciation of the US

dollar exchange rate against both sterling and euro on Primark’s

largely dollar-denominated purchases for the year.

There has been a high level of volatility in sterling exchange rates

against our major trading currencies during the financial year.

This has been driven by the impacts and varying global responses

to high inflation and increasing interest rates impacting

economic growth output.

We invest in research with experts to improve our

understanding of the science and societal trends. Both ABF UK

Grocery and British Sugar support the charitable work of the

British Nutrition Foundation to promote understanding of

nutrition science in the context of healthy and sustainable diets.

Changes since 2022

Our Sugar and Grocery businesses have continued to focus on

nutrition and health during the year to help consumers improve

their diet.

Notable examples include AB World Foods, who have continued

to roll out recipes with a reduction in fat, sugar and salt, and

Jordans Dorset Ryvita who reduced the salt level in the Ryvita

Thins range.

In addition to reformulating existing products, our businesses

have launched a range of products with nutritional benefits

including Dorset Cereals range of high in fibre, non-HFSS (high

in fat, salt or sugar) porridges, Jordan’s non-HFSS No Added

Sugar Granola and Westmill’s Elephant Rice Basmati Boost, the

UK’s first fortified basmati with thiamin and iron.

71Associated British Foods plc Annual Report 2023

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Operational risks

Increased

Unchanged

Decreased

Workplace health and safety

Product safety and quality

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

Safety continues to be one of our main priorities. The chief

executives of each business, who lead by example, are

accountable for the safety performance of their business.

Our Health, Safety and Wellbeing Policy makes it very clear that

we require the businesses to make improvements to safety

year on year, and to make sure that we understand the hazards

and risks of our activities and have in place appropriate controls.

We have an external independent safety audit programme

toverify implementation of safety management and support

aculture of continuous improvement.

Best practice safety guidance is shared across the businesses,

coordinated from the corporate centre, to supplement the

delivery of their own programmes.

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.

This guidance addresses 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 2022

The safety performance of the Group is reported in the 2023

Responsibility Report at www.abf.co.uk/responsibility.

We are deeply saddened to report that in the year there were

three work-related fatalities: two to employees, both on-site,

and one to a contractor off-site. They occurred in Australia,

Spain and Africa. Our businesses have conducted thorough

rootcause analyses, have implemented safety changes and

communicated the findings to the other businesses.

This year just under £42m was invested in reducing the safety

and health risks across a wide range of operational hazards.

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 inspection centres and

management ofits supply base.

Changes since 2022

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.

72 Associated British Foods plc Annual Report 2023

Breaches of IT and information security

Context and potential impact

To meet employee, customer, consumer and supplier needs,

our IT infrastructure needs to be flexible, reliable and secure to

allow us to interact through technology.

Our delivery of efficient and effective operations is enhanced

using relevant technologies and the sharing of information.

Weare therefore subject to potential cyber-threats such as

social engineering attacks, computer viruses and the loss

ortheft of data.

There is the potential for disruption to operations from data

centre failures, IT malfunctions or external cyber-attacks.

Mitigation

There is an ongoing programme of investment in both

technology and people to enhance the longevity of our IT

environments for both on-site and remote working. This ongoing

investment includes the control and protection of the IT and

manufacturing environments being provided.

To support our employees in our campaign against phishing and

social engineering attacks we have invested in cyber security

solutions that prevent the majority of attacks from reaching our

employees. We continue to educate through user awareness

training programmes to help further reduce the likelihood of our

employees falling victim to such attacks. We measure and

report on these campaigns and training programmes regularly.

We have established Group IT security policies, technologies

and processes, all of which are subject to regular internal audit.

Access to sensitive data is restricted and closely monitored.

Robust disaster recovery plans are in place for business-critical

applications and are adequately tested.

Cyber incident response testing is done at all levels of the

business to ensure we have adequate and effective processes

to respond to a cyber incident.

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 2022

As cybersecurity risks evolve, we continue to invest in our

security capabilities at a Group level and across the businesses

allowing us to more effectively detect, respond to and recover

from disruptive cyber-threats.

We have improved and developed the existing disciplines to

ensure that user devices and applications are regularly patched

and upgraded to reflect emerging IT security threats.

During the year we have reviewed, tested and refined our cyber

security ransomware response plan at the Group level.

We have developed an operational technology security strategy

and policy to further protect our manufacturing and supply

chainfunctions.

Due to the fast-paced growth of AI and its potential uses in our

organisation, we created an AI policy and guidelines to support

the adoption of this technology in a safe and secure manner.

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:

• transparency of the source of raw materials and

manufacturing locations in our supply chains;

• the vulnerability of workers; and

• ensuring we have the leverage and consistency in our

approach to due diligence to prevent, avoid or mitigate

negative social and environmental impacts that may arise.

Mitigation

ABF’s Supplier Code of Conduct, which all businesses are

required to implement, 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 also

recognised for its Ethical Trade and Environmental Sustainability

programme. Its approach to due diligence is explained in its

Supply Chain Human Rights Policy.

Our UK Grocery businesses monitor their supply chains and

engage suppliers through the use of the Sedex (Supplier Ethical

Data Exchange) online database.

Many of our businesses monitor their risks through social audits

carried out by internal teams or third parties. For example,

Primark’s Ethical Trade auditing and monitoring programme

isone of the most important resources for identifying risks.

Our businesses work to understand the issues specific to the

workers within their respective supply chains and where

appropriate the communities in which they reside. For example,

Twinings uses a comprehensive Community Needs

Assessment Framework, developed in consultation with expert

external stakeholders. In addition to labour rights, this

framework covers housing, water and sanitation, health and

nutrition, land, gender and children’s rights, farming practices

and more.

Some of our businesses – including Primark, Twinings and ABF

Sugar – 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.

73Associated British Foods plc Annual Report 2023

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Increased

Unchanged

Decreased

Our use of natural resources and managing our environmental impact

Context and potential impact

We are reliant on a range of natural resources to deliver our

products, and new processes and technologies have enabled us

to become highly efficient at maximising the value that we can

derive from them. Overall, 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

wastewater especially in water-stressed areas; and waste

which is not yet eliminated at source, reused or recycled,

including single-use plastics.

In addition to GHG emissions, our operations generate a range

of other environmental impacts related to wastewater and

waste which, if not controlled, could pose a risk to the

environment and local communities, potentially creating risk to

our licence to operate and resulting in additional costs.

Across countries where ABF businesses operate, there is

increased regulatory scrutiny and ESG reporting requirements

that we must meet. Remaining compliant with these

requirements and being able to report accurate and robust data

on our environmental impact, is a priority for the Group and to

our businesses.

Mitigation

We recognise our role in transitioning to a low-carbon economy.

We are targeting reductions in our GHG emissions through

carbon reduction plans, energy efficiency and growing our use

of renewable energy.

We continuously seek ways to improve the efficiency of our

operations, using technologies and techniques to reduce our

use of natural resources and minimise waste and the

subsequent impact on the environment. We are also increasing

our focus on capturing this data and being able to report in line

with regulatory requirements.

We support the adoption of integrated farm management

techniques and the responsible use of precision science and

technology to maximise efficiency, reduce GHG emissions and

limit biodiversity losses while maintaining commercially

productive agricultural outputs.

Water is an essential input for clothing and food production.

Weremain aware that it is a valuable resource and our

businesses aim to reduce the amount of water they abstract, to

reuse process water as much as possible and to return treated

wastewater to nature, having ensured it meets or exceeds local

and national water standards, and protect aquatic ecosystems.

Changes since 2022

The environmental performance of the Group is reported

inthe2023 Responsibility Report and in our CDP

submissionswhich can be found on the ABF website at

www.abf.co.uk/responsibility.

Our supply chain and ethical business practices continued

In line with our Group 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 2023.

Changes since 2022

Our Modern Slavery Statement 2023, together with the

businesses’ due diligence activities across our supply chains,

are reported on our website and in the 2023 Responsibility

Report at www.abf.co.uk/responsibility.

In November 2022, the EU formally adopted the Corporate

Sustainability Reporting Directive (CSRD) requiring companies

operating in the EU to publicly disclose and report on

environmental, social affairs and governance issues. Through

the established ESG Steering Committee, the Group has a

number of activities to prepare for the inception of the CSRD

reporting requirements, including the European Sustainability

Reporting Standards (ESRSs) and the EU Taxonomy.

As result of the Directive certain EU companies within the

Group will be required to publish mandatory sustainability

information from 2025/26 onwards. From 2028/29 reporting

under the CSRD will also need to cover the rest of the Group.

The exact format and scope of reporting will depend upon

transposition of EU law into the national laws of EU member

states (which is due by July 2024) and on any equivalence

arrangements put in place with the UK

Our UK Grocery division has established a central capability

formonitoring and reporting upon supplier Self-Assessment

Questionnaire (SAQ) completion, as well as the status of

non-conformances identified within supplier audit reports.

Inaddition, we have appointed an India-based corporate

responsibility specialist to support Westmill Foods and AB

World Foods to engage and support third-party businesses

intheir supply chains.

74 Associated British Foods plc Annual Report 2023

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. Many of our businesses rely on agricultural

crops with complex supply chains. Long-term climate change

will impact agricultural crops and workers while extreme

weather events have the potential to cause disruption to supply

chains and operations.

For example, extreme adverse weather conditions in the UK

resulted in significantly lower beet yields from the 2022/23 crop;

British Sugar therefore moved swiftly to secure alternative

sources of supply.

Also, our Mozambique operation was seriously impacted by

severe flooding which resulted in the destruction of over 98%

of the sugar cane crop.

In our assessment of climate-related business risks we

recognise that the cumulative impacts of changes in weather

and water availability could affect our operations at a Group

level. However, the diversified and devolved nature of the

Group means that mitigation or adaptation strategies are

considered and implemented by the individual businesses.

Some of our businesses have continued to work with third-party

experts to understand climate-related risks and opportunities.

The most significant and material risks are incorporated into

thebusiness risk registers.

Mitigation

Determining the potential medium- to long-term impact

ofclimate risks and opportunities is challenging as the impacts

of climate change and governments’ responses to its threats

are uncertain.

Our climate-related scenario analysis has identified business-

specific actions which are being overseen by the relevant

businesses. Further information on our material climate-related

risk mitigation activities is provided in the TCFD report on pages

56 to 67.

Changes since 2022

Last year we met the requirements of Listing Rule 9.8.6R

withTCFD disclosures in line with the 2017 TCFD framework.

Thisyear this has been expanded to include the 2021

implementation guidance by including the transition plans for

ABF Sugar and Primark as they contribute most significantly

toadjusted operating profit and total reported GHG emissions.

Over the past year, our businesses have continued to

implement specific projects which aim to reduce the impact of

climate change and natural disasters on our businesses including:

• Illovo Sugar is implementing a variety of irrigation and

drainage projects across its African businesses; and

• Primark is mobilising a specialist engineering team to support

the development of a pilot approach in Bangladesh to support

supplier factories to assess and mitigate flood risk.

For details on the scenario analysis, transition plans, and our risk

management and materiality assessment approach, refer to the

2023 TCFD report and 2023 Responsibility Report.

75Associated British Foods plc Annual Report 2023

VIABILITY STATEMENT AND GOING CONCERN

Viability statement and going concern

Viability statement

The directors have 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.

This is consistent with the Group’s business model which

devolves operational decision making to the businesses.

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 68 to

75 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. Specificconsideration has been given to the potential

ongoing risks associated with the outlook for a potential global

recession, reducing demand for goods in both the food

businesses and Primark, and continuing inflationary cost

pressures. The impact of potential mitigating actions under the

Group’s control were also considered in this analysis.

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

1.0x and the Group had total cash of £1.5bn and an undrawn

committed Revolving Credit Facility of £1.5bn.

In March 2023, S&P Global Ratings reaffirmed their assignment

to the Group of an ‘A’ grade long-term issuer credit rating.

TheGroup’s funding basis is supported by the existing £400m

public bond due in 2034. Furthermore the Group’s committed

Revolving Credit Facility is free of performance covenants and

matures in 2028, with one 1-year extension option remaining

(after the first was utilised during the year).

The Group is highly diversified operating in 55 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,

with in excess of £1bn of operating cash being generated in

each of the last ten years. This has been more than sufficient to

meet not only our ongoing financing obligations but also to fund

the Group’s expansionary capital investment.

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 12 September 2026.

Going concern

After making enquiries, the directors have 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

1 March 2025 has been updated for the business’s latest

trading in October and is the best estimate of cashflow in the

period. Having reviewed this forecast and having applied a

downside sensitivity analysis and performed a reverse stress

test, the directors consider it a remote possibility that the

financial headroom could be exhausted.

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 1.0x

and the Group had total cash of £1.5bn and an undrawn

committed Revolving Credit Facility of £1.5bn.

In March 2023, S&P Global Ratings reaffirmed their assignment

to the Group of an ‘A’ grade long-term issuer credit rating. The

Group’s funding basis is supported by the existing £400m public

bond due in 2034. Furthermore the Group’s committed

Revolving Credit Facility is free of performance covenants and

matures in 2028, with one 1-year extension option remaining

(after the first was utilised during the year). The $100m of

outstanding private placement notes are due in March 2024

after which point Group funding will not be subject to financial

performance covenants.

76 Associated British Foods plc Annual Report 2023

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,

thereare adverse foreign exchange impacts and there is a

global recession, reducing demand for goods further than the

base levels forecast. 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,

cost inflation would need to exceed £1.9bn 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

77Associated British Foods plc Annual Report 2023

Our devolved decision-making model

isadistinctive characteristic of ABF.

Thisempowers management of our

businesses to take decisions at the level we

consider to be the most effective – in other

words, closest to the markets, customers

andstakeholders relevant to each business.

theexecutive directors and through annual updates by senior

management of the businesses. This gives the Board the

opportunity to provide effective guidance and

constructivechallenge.

On succession planning at Board level, earlier this year we

announced thatRuth Cairnie would be relinquishing her roles as

Senior Independent Director and as Chair of the Remuneration

Committee and would not be standing for re-election at the next

annual general meeting, having served on the Board since May

2014. Dame Heather Rabbatts became Senior Independent

Director and Graham Allan became Chair of the Remuneration

Committee, both with effect from 1 May 2023. Ruth stepped

down from the Board with effect from 31 August 2023. Ruth

made a terrific contribution to our Board deliberations and she

leaves with our grateful thanks.

In February 2023, the Board was also pleased to welcome

EoinTonge as a director, taking upthe role of Finance Director

with effect from 29 April 2023 after John Bason retired from the

Board on 28 April 2023. Inaddition, Annie Murphy was appointed

as a Non-Executive Director and as a member of the Audit and

Remuneration Committees with effect from 6 September 2023.

As announced in August 2023, Kumsal Bayazit will be appointed

as a Non-Executive Director andas a member of the same

Committees with effect from 1 December 2023. All directors

will be standing for election orre-election at the annual general

meeting. We look forward toworking with our newest Board

members and benefiting from the additional skills, insights and

experience that they will undoubtedly bring.

We published our Board Diversity Policy in November 2022. Iam

pleased to report that, by the time of our annual general meeting,

we will have met the commitments and aspirations around

Board composition as set out in that policy, which reflectthe

new targets on gender and ethnic diversity in the Listing Rules.

Further details are set out in the Nomination CommitteeReport.

Richard Reid continues in his role as our Non-Executive Director

designated for engagement with the workforce and an update

isprovided in Richard’s letter on pages 84 and 85. Richard’s

activities are a key way that we continue to assess and monitor

culture, alongside directors’ visits to sites, business divisions’

updates to the Board 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.

Our four values, namely respecting everyone’s dignity, acting

with integrity, progressing through collaboration and delivering

with rigour, are illustrated through the various case studies

inthis Annual Report, through our Section 172 Statement

onpages 40 to 45 and through the Responsibility section on

pages 46 to 55. Further examples can be found in our 2023

Responsibility Report, which is available on the Company’s

website at: www.abf.co.uk/responsibility.

We will again hold a physical AGM in December 2023. 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 2023. We look forward to

seeing as many of you as possible on the day.

Michael McLintock

Chairman

CORPORATE GOVERNANCE

Chairman’s introduction

Michael McLintock

Chairman

Dear fellow shareholders

I am pleased to present the Associated British Foods plc

Corporate Governance Report for the year ended

16 September2023.

Your Company’s clear sense of purpose – to provide safe,

nutritious and affordable food, and clothing that is great value

formoney – continues to stand us in good stead. Our conviction

that businesses do well when they act well is ingrained

throughout the Group and management continue to be

encouraged to take a long-term view and to invest in the future.

We give various examples throughout the Strategic Report

ofhow we have invested in our food businesses and in the

Primark retail estate.

We continue to operate a devolved decision-making model.

Thisis a distinctive characteristic of ABF, and one which we

believe empowers management of our businesses to take

decisions at the level we consider to be the most effective.

Thesenior management of the businesses are supported with

resources and expertise from throughout the Group.

The Board continues to be kept informed about, and engages

with, the individual businesses through regular updates by

78 Associated British Foods plc Annual Report 2023

As a premium listed company on the London Stock

Exchange, 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 16 September 2023, applied

the principles and complied with the provisions set out in

the 2018 Code except provision 38 in relation to alignment

of executive director pension contributions with the

workforce. In this regard, please see the explanation on

page 106 of the Directors’ Remuneration Report, which

explains our plans to bring the Company into line with the

2018 Code by December 2023.

The Company’s disclosures on its application of the principles of the 2018 Code can be found on the following pages:

Compliance with the

UK Corporate Governance Code

Board leadership and company purpose

See pages 82 to 86

Chairman’s introduction

See page 78

Leadership, values, culture and purpose

See pages 9 to 13; 46 to 55; 82 to 86

Strategy

See pages 9 to 13; 82 to 83

Stakeholder and shareholder engagement

See pages 40 to 45; 46 to 55; 82; 84 to 86

Division of responsibilities

See pages 87 to 88

Commitment, development and information flow

See pages 84 to 85 and 87 to 88

Composition, succession and evaluation

See pages 87; 89 to 92

Board evaluation

See page 89

Nomination Committee Report

See pages 90 to 92

Audit, risk and internal control

See pages 93 to 99

Risks, viability and going concern

See pages 68 to 77; 94 to 99

Audit Committee Report

See pages 93 to 99

Remuneration

Directors’ Remuneration Report

See pages 100 to 115

79Associated British Foods plc Annual Report 2023

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

Eoin Tonge

Finance Director

Eoin was appointed a director

in February 2023 and as

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.

Other appointments:

• None

CORPORATE GOVERNANCE CONTINUED

Board of Directors

Dame Heather Rabbatts

Independent Non-Executive

Director

Dame Heather Rabbatts

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:

• 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

George Weston

Chief Executive

George was appointed to

theBoard in 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

80 Associated British Foods plc Annual Report 2023

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

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

Wolfhart Hauser

Independent Non-Executive

Director

Wolfhart was appointed

adirector in January 2015.

Starting his career with

various research activities, he

went on to establish and lead

a broad range of successful

international service industry

businesses. He was Chief Executive of Intertek Group plc for

10years until he retired from that role and the board in May

2015. He was previously Chief Executive Officer and President

of TÜV Süddeutschland AG for four years and Chief Executive

Officer of TÜV Product Services for 10 years. He has also held

other directorship roles, including as a Non-Executive Director

ofLogica plc from 2007 to 2012, as a Non-Executive Director

ofRELX plc from 2013 to 2023 and Chair of FirstGroup plc for

four years from 2015 to July 2019.

Other appointments:

• Board member in the Trescal Group

Richard Reid

Independent Non-Executive

Director

Richard was appointed a

director 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 firm’s 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

Key to Board Committees

Nomination Committee

Audit Committee

Remuneration Committee

Committee Chair

At the date of this report, Kumsal Bayazit is not yet a director

but the Board approved her appointment as a Non-Executive

Director with effect from 1 December 2023.

81Associated British Foods plc Annual Report 2023

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, sometimes with

individual members attending virtually, 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 9 to 13. This section

provides an explanation of the basis on which the Group

generates value and preserves it over the long term and its

strategy for delivering its objectives. Our ‘Managing our risks’

section starting on page 68 provides details on how opportunities

and risks tothe future of the business have been considered.

Culture and values

At its 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 risks to make the right judgements

tomitigate those 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,

is a key approach (and Richard’s letter on pages 84 and 85 sets

out further detail on how Richard 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 84 and 85.

In addition, directors have carried out other site visits and other

engagement events, further details ofwhich can be found

onpage 88.

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 31 May 2023 are provided on page 52.

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 133,000 people and

withoperations in 55 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 40 to 45

(which contain our Section 172 Statement on engaging with

ourstakeholders), pages 46 to 55 (on responsibility) and in the

letter on pages 84 and 85 from Richard Reid, our Non-Executive

Director for engagement with the workforce.

CORPORATE GOVERNANCE CONTINUED

Board leadership and company purpose

82 Associated British Foods plc Annual Report 2023

The work of the Board during the year

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: Vital Solutions,

active in polyphenol-based botanical ingredients for human dietary supplements,

KiteConsulting, active in dairy consulting and performance products, and National Milk

Records plc, which provides an integrated service provider working for both farmers

and milk buyers as well as an independent source of data from advisers such as vets,

farm consultants and breed societies;

• considering and approving capital investment including in relation to the opening of

new Primark stores and upgrades to existing stores, the expansion of yeast production

and introduction of spray drying capability for Ohly in Germany, the establishment

ofamanufacturing facility for Ovaltine in Nigeria, expansion and upgrades inour African

sugar businesses and various ERP projects across the Group; and

• receiving regular updates on proposed acquisitions and disposals.

Financial and operational

performance

• receiving regular reports to the Board from the Chief Executive;

• receiving, on a rolling basis, senior management presentations from Group business

segments;

• considering the Group budget for the 2023/24 financial year;

• approving the Company’s full year and interim results;

• deciding to recommend payment of a 2022 final dividend (paid in January 2023) and

deciding to pay an interim dividend (paid in July 2023); 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 review and discussion of recommendations from,

theinternal 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 including considering

and approving an ‘outlook’ statement and, subsequently, discussing any issues arising

from the AGM.

Corporate responsibility

• continuing to support the enhanced activity on ESG matters;

• receiving regular management reports as well as annual presentations on health

andsafety and on environmental issues; and

• receiving an update on ESG matters including priorities, commitments, risks and

opportunities, and the requirements in relation to climate-related financial disclosures.

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 Annie Murphy and Kumsal Bayazit as Non-Executive

Directors of the Company with effect from 6 September 2023 and 1 December

2023respectively;

• Richard Reid, Non-Executive Director for engagement with the workforce, continuing

to work with the businesses to ensure that the voice of the workforce is heard and

acted upon – see further details on pages 84 and 85;

• 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.

During the financial year, key activities of the Board included:

83Associated British Foods plc Annual Report 2023

CORPORATE GOVERNANCE CONTINUED

• operations, commercial and management teams from

Twinings Ovaltine in Andover and New Jersey;

• employees from the Argo factory and the Chicago Head

Office in ACH;

• retail assistants, store supervisors, managers, and regional

HR business partners at Primark’s Chicago store and at two

different Primark stores in New Jersey;

• employees across a range of teams and departments at SPI

Pharma in Grand Haven, Michigan;

• participants of the Thrive development programme at George

Weston Foods businesses in Australia;

• employees from operations and product merchandising from

Tip Top in New South Wales, Australia;

• a wide variety of employees from our Don business

inregional Victoria, Australia; and

• the team in our Yumi’s business based in Port Melbourne,

Australia.

My visits also enable me to connect with our people through

unions or other local collective arrangements, for example with

the union representative for our Don business.

I am also grateful for the input from fellow Board members

whohave visited our businesses including Acetum, Illovo and

Primark during the year.

I am struck by the openness and honesty I experience in all

these discussions and the willingness of our people to actively

participate in sharing views on what is going well and where

there could be improvement. This is a testament to the cultures

that our leaders have developed across the Group. Overarching

themes from these discussions include that:

• people enjoy their work, feel respected and deeply appreciate

the accountability and empowerment that they have,

consistent with the ABF devolved operating model;

• people care about the work they do and feel cared for

byourbusinesses;

• people appreciate the culture and values, which are seen

asbeing different from other organisations they have

workedwith;

• people are appreciative of clear and consistent

communications and that there is no such thing as too

muchcommunication;

• the leaders of our businesses have increased the breadth

anddepth of communications in recent years, as our people

value being kept informed on business progress and the

opportunity for discussion; and

• people value career development and progression, and there

is real interest in understanding and pursuing career and

development opportunities across the broader Group.

Further areas are beginning to emerge in discussions, for

example, our people seeing the opportunity for greater use

oftechnology to increase efficiency and effectiveness in the

work environment.

In my visits and discussions, I specifically take the opportunity

to understand if our people are aware of Speak Up, our policy to

ensure there is a route beyond local management and leadership

to raise concerns and issues. Speak Up is an important

mechanism to ensure employees will always feel comfortable

to raise concerns even in the most sensitive of situations.

Formore information on Speak Up, see page 52.

Richard Reid

Non-Executive Director

The breadth and complexity of our Group, with our devolved

operating model, requires all our leaders to connect with their

people and teams, actively and attentively listening and

responding to views or suggestions considering the local

culture, workplace and style of operation. The Chief Executive

sets the tone and expectations for this ongoing engagement

with all our divisional chief executives and business leaders.

Myrole as Non-Executive Director for engagement with the

workforce is primarily to ensure processes are in place giving

employees the opportunity to raise views, opinions, and

concerns, and that the workforce understand how to access

these channels and they are listened to when they do. It is also

to interact with our leaders and businesses to test culture and

engagement and bring back perspectives to the boardroom.

While local cultures clearly vary across the world and we need

to be sensitive to those, divisional chief executive officers also

have responsibility to embed group-wide cultures across our

businesses and this is an area of focus for the Board.

Since my last report I have spent face-to-face time with our

people in their offices, factories, stores, and out in the field.

Inthese discussions I have been able to understand how

theyview our Group and their specific business and location.

Ihavespoken with:

Non-Executive Director for engagement with the workforce

Board leadership and company purpose continued

The success of our Group has people at its

heart. The culture and processes across all our

businesses ensure that employee voices, at all

levels of the organisation, are encouraged and

welcomed in their local teams through to Board

discussions, and that their views and opinions

are heard and acted upon.

84 Associated British Foods plc Annual Report 2023

The visits are only one part of the ABF approach to workforce

engagement. In addition:

• workforce engagement across the Group is discussed in

depth at two of the Board meetings, with the Chief People

and Performance Officer presenting a groupwide view of

progress, including metrics, process enhancements, and

highlighting the ‘we asked, you said, we listened, we did’

feedback loop case studies from across the Group. During

these discussions we identify areas of ongoing enhancement

which are taken back to the businesses. This year for example,

we identified a further focus on colleagues who work in

factories and stores, including relationships with unions;

• every Board meeting also includes divisional chief executive

presentations covering workforce engagement within

theirbusinesses; this ensures all areas of the Group are

reviewedin depth during the year. I continue to be in regular

discussionwith our divisional chief executives and people and

performance/HR directors across all segments for the Group.

I speak with them after their formal presentations to discuss

areas of interest or concern and to share insights for my

discussions with their people;

• we have an annual Board session focused on talent,

succession and progress on inclusion;

• twice a year the Chief Executive and Chief People and

Performance Officer have in-depth discussions on

organisation and talent that include workforce engagement

with each divisional chief executive and people and

performance/HR director; and

• the divisional people and performance/HR directors, facilitated

by the Chief People and Performance Officer, also come

together regularly to learn and share with each other across

avariety of topics, including workforce engagement.

A vast number of our businesses use engagement surveys to

gather feedback from their people, through a variety of global

partners such as Willis Towers Watson, Workday Peakon and

Gallup. Close to 90% of our businesses use engagement

surveys regularly, often annually or more frequently. In the

businesses that have run their surveys this year, 85% of our

people were invited to participate with response rates at almost

70%. The insights and actions that flow from these surveys are

part of the data presented to the Board on a regular basis. I was

pleased to see that, of the businesses running their engagement

surveys this year, almost 90% showed favourable engagement

scores at or above 70%.

In line with our focus areas shared in last year’s report, we have

widened our understanding of workforce engagement, through

introducing engagement surveys to new parts of the Group

orthrough expanding the reach of existing surveys to more

employees. Local technological, legal and cultural norms do still

present challenges for a full rollout of engagement surveys in all

countries, but we expect our leaders to find appropriate ways to

understand workforce engagement and take action to enhance

it further for all our employees in the year ahead.

I am pleased to see the feedback loop in action, with

businesses acting on the voice of their employees through

theiremployee engagement surveys, listening groups or

through the insights I can share from my visits and discussions.

Examplesinclude:

• the ABF Centre leadership held a ‘Strength through

Difference’ workshop to explore ways to ensure even greater

inclusion among the corporate centre teams;

• the Managing Director of our ABF Sugar business in Eswatini

invited colleagues from operations teams to day visits in

thehead office to learn more about the wider business.

Thisfollowed on from discussions I had with them when

Ivisited them at the end of the last financial year;

• in response to employee feedback, that was shared in

discussion sessions with me, Twinings Ovaltine held global

town hall sessions, to provide its employees with greater

understanding and clarity of areas of the business beyond

their own;

• our grocery business Acetum has enhanced its benefits for

shift workers and provided a communal lunchroom and

subsidised meals for all their employees based on feedback

and requests from their employees and union discussions;

• to promote an open workplace, AB Mauri’s Global Baking

Ingredients business has introduced a number of

mechanisms to support communication and connections

across their teams, including suggestion boxes, town halls,

team-building games, appreciation workshops, family days,

newsletters and lunch with leaders;

• AB Agri has further developed its wellbeing offering including

using Nudge to support financial education and wellbeing,

creating spaces for social wellbeing, plus raising awareness

through recognising World WellBeing Week; and

• Primark has developed a new approach to ensure it is

responding promptly to employee feedback. Themes from

itsregular engagement surveys are fed into the centres

ofexcellence or its global teams, where local managers and

people and culture business partners develop and implement

local action plans at a store or team level.

In summary, from my work over the last 12 months, I have seen

significant evidence that the necessary policies and practices

within the businesses are in place and that our people are of

aware how to raise views, ideas and concerns. This perspective

comes from my direct interactions with the Chief Executive,

Chief People and Performance Officer, division chief executives,

business leaders and managers, the observations and insights

shared with me by our people on my visits, information shared

in Board presentations and papers, and the results of the

engagement surveys across the Group.

Culture and tone are set from the top of an organisation,

echoedthrough leaders and managers to every level of a

business; across ABF I see an open culture that enables issues

and ideas to be raised and acted on constructively. It is clear

that our chief executives and business leaders take seriously

the voices of all our people.

I and the Board remain steadfast to holding divisional chief

executives and business leaders to account, and in turn

ensuring that all our employees have the opportunity for their

voice to be heard in every part of ABF, so they can be part

ofcreating a successful business where people thrive.

Richard Reid

Non-Executive Director

85Associated British Foods plc Annual Report 2023

Engagement with shareholders

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

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, 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,

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

Executive team 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 it 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 8 December 2023

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 2022, 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

We publish a Responsibility Report on the issues most

materialto the businesses within our Group. 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 or 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.

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.

CORPORATE GOVERNANCE CONTINUED

Board leadership and company purpose continued

86 Associated British Foods plc Annual Report 2023

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) – appointed 6 February 2023

Non-Executive Directors

Dame Heather Rabbatts (Senior Independent Director)

Emma Adamo

Graham Allan

Wolfhart Hauser

Annie Murphy – appointed 6 September 2023

Richard Reid

The Board has approved the appointment of Kumsal Bayazit

asaNon-Executive Director with effect from 1 December 2023.

John Bason retired from the Board with effect from 28 April

2023 and Ruth Cairnie retired from the Board with effect from

31 August 2023.

Biographical and related information about the directors as at the

date of this Annual Report is set out on pages 80 and 81.

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 external Board evaluation in 2021, as well as

the internal Board evaluations carried out in 2022 and 2023,

further details of which are set out on page 89.

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.

In addition to meeting with non-executive directors without

theChairman present to appraise the Chairman’s performance

(forwhich, see further details on page 89), the Senior

Independent Director meets with the non-executive directors

onother occasions 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

87Associated British Foods plc Annual Report 2023

CORPORATE GOVERNANCE CONTINUED

Dame Heather Rabbatts stepped down from the board of Kier

Group plc with effect from 30 March 2023. Wolfhart Hauser

stepped down from the board of RELX plc in April 2023 and

subsequently took up a position as a board member in the

(non-listed) Trescal group. Graham Allan was already a director

on an Americana Restaurants entity which subsequently listed

its shares for trading on the Abu Dhabi Securities Exchange and

the Saudi Stock Exchange in December 2022 as Americana

Restaurants International PLC. The Board considered that these

appointments did not impact the relevant directors’ ability to

discharge their responsibilities to the Company.

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. 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.

All of the directors attended those meetings that they were

eligible to attend.

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 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.

Eoin Tonge, the newest executive director appointed to the

Board, has visited many businesses since his appointment in

February 2023. These visits have included: Illovo in South Africa,

Zambia and Malawi; AB World Foods and Twinings Ovaltine in

Poland; Primark in Ireland, the USA and Germany; Azucarera and

AB Agri in Spain; George Weston Foods in Australia and New

Zealand; and various grocery businesses in the UK.

Annie Murphy joined the Board with effect from 6 September

2023. Since the end of the financial year to which this Annual

Report relates, in addition to meeting with executives at the

corporate centre in late September 2023, Annie has also visited

India with Dame Heather Rabbatts and the Group Corporate

Responsibility Director as part of Annie’s induction. This has

enabled them to understand more about Primark’s activities in

India following meetings with Primark’s Ethical Trade and

Environmental Sustainability team and visits to a community

centre, farmer village and a supplier factory.

Kumsal Bayazit will join the Board with effect from 1 December

2023 and an induction will be 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 encourages other Board members to visit

operations either with him, with other directors, or on their

own.The Board meeting in May 2023 was held at Primark’s

headquarters at Arthur Ryan House in Dublin and also included

avisit to the Mary Street store.

Dame Heather Rabbatts had also separately visited Primark’s

head office and its first store in Mary Street in Dublin in January

2023 and met with Paul Marchant, Primark CEO, together with

members of the Primark leadership team.

In addition to the visits by Eoin as part of his induction, as

mentioned above, the senior executives of several businesses

also met with Eoin to provide ‘deep dives’ into their businesses.

For details of visits by Richard Reid to a variety of businesses

across the Group, please see pages 84 and 85.

Attendance of directors at Board and Committee

meetings

Board

Audit

Committee

Nomination

Committee

Remuneration

Committee

Michael

McLintock 8/8 4/4 4/4

George Weston 8/8

Eoin Tonge 5/5

Dame Heather

Rabbatts 8/8 4/4 3/3 4/4

Emma Adamo 8/8

Graham Allan 8/8 4/4 4/4 4/4

Wolfhart Hauser 8/8 4/4 4/4 4/4

Annie Murphy 1/1 1/1

Richard Reid 8/8 4/4 4/4 4/4

John Bason 5/5

Ruth Cairnie 7/7 4/4 4/4 3/3

Division of responsibilities continued

88 Associated British Foods plc Annual Report 2023

Board composition and succession

Details of the composition of the Board are on page 87. 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 90 to 92 which also provides details ofthe

Committee’s activities, including theapproval of the appointment of Annie Murphy and Kumsal Bayazit as Independent Non-Executive

Directors 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 2023 AGM to be held in December, all directors currently in office

willbeproposed for election/re-election. Kumsal Bayazit is to be appointed with effect from 1 December 2023 and will also be

proposed for election at the AGM.

Board evaluation

2022 internal Board evaluation

As reported in our last Annual Report, an internal Board evaluation was carried out in May to August 2022. A summary of the actions

arising from the 2022 Board evaluation and their outcomes are set out below.

Composition, succession and evaluation

2023 internal Board evaluation

An internal Board evaluation was carried out in July and August

2023. The objective of the review was to assess all aspects of

the effectiveness of the Board, its Committees, the Chairman

and the individual directors, also measuring progress against

recommendations from the previous Boardevaluation.

The Board evaluation was carried out at the request of the

Chairman by the Director of Corporate Governance.

How the Board evaluation was conducted

The main strands of work were as follows:

• each Board member, the Company Secretary and the Group

Statutory Auditor was requested to complete a questionnaire

and provide comments in response to a range of questions

and observations relating to the Board. Each respondent was

also given the opportunity to have a follow-up meeting with

the Chairman to discuss any particular issues; and

• a report was prepared including overall observations and

highlighting key recommendations for consideration.

The report was then included in the Board pack for the Board

meeting in September 2023 and discussed by the Board at

thatmeeting. The headline outcomes of the review were that

the Board felt that it had the right mix of skills and expertise

inthe context ofdeveloping and delivering the strategy and

assessing the challenges and opportunities facing the Group

(particularly in light of the skillset that the newest directors will

bring) and that the Board and its Committees continue to be

well-functioning and effective in providing oversight of the

Company and its governance.

Actions from 2022 internal evaluation Outcome

Chief Executive to discuss with the Director of Business Performance

and the Chief People and Performance Officer and agree approach with

regard to increasing the provision of feedback to executives on their

presentations to the Board and to encourage business divisions to focus

on a few specific issues in their presentations such that the Board can

provide input of most value to the business divisions.

Businesses have improved in giving further specific

insight into their business during Board presentations.

Feedback provided to executives following their

presentations to the Board has increased.

Chairman, Chief Executive and Finance Director to consider the most

appropriate model to meet requirements, including looking beyond usual

corporate governance structures in order to consider the interface

between the Primark Strategic Advisory Board and the main Board.

The Chair of the Primark Strategic Advisory Board

(‘PSAB’) meets regularly with the Chairman and

ChiefExecutive to update them on the PSAB’s work.

This input then informs main Board discussions.

Chairman to consider in conjunction with the Chief People and

Performance Officer how the Nomination Committee/Board can most

effectively carry out their roles in respect of the diversity pipeline and

succession planning.

During the financial year, two new non-executive

directors were approved to join the Board, strengthening

the Board’s expertise, particularly in respect of retail/

brand and technology/analytics experience.

Key recommendations and actions from the 2023 internal Board

evaluation are to:

• increase the businesses’ discussion with the Board on the

competitive environment and growth areas so as to improve

the Board’s understanding of their strategies and ability to

continue to provide valued input;

• consider how to facilitate more business visits by non-

executive directors, in recognition of the importance of such

visits in monitoring culture;

• continue to consider how ESG risks and opportunities are

addressed most effectively; and

• consider aligning the Board’s ‘deep dives’ on businesses with

the Audit Committee’s ‘deep dives’ on the audit.

The outcome of the evaluation will not have any impact on

Board composition, taking into account that the composition of

the Board has only recently changed with the appointment of

Annie Murphy as a director in September 2023 and with Kumsal

Bayazit joining the Board in December 2023.

The Board (apart from the Chairman) also reviewed the

performance of the Chairman during the year. This concluded

that the Chairman is highly effective, ensuring that the Board

considers the individual strategies of the businesses within the

Group, whilst also maintaining a focus on priorities. It was

further noted that the Chairman successfully enables open and

purposeful discussions and is very inclusive, working well with

all the non-executive directors and ensuring that the Board

retains appropriate independence whilst forging strong

relationships with the key executives.

89Associated British Foods plc Annual Report 2023

• 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, 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 in July 2023. This

included a focus on: overall principles for succession (including

an aim to have an increasingly diverse potential internal

successor pool for all our leadership roles); potential succession

candidates for the corporate centre roles; potential succession

candidates for divisional CEO and CFO roles; diverse succession

talent planning, including specifically identifying, developing and

sponsoring emerging talent; group-wide learning and

development initiatives to support diverse talent (e.g. the

Executive Leadership Programme; the Senior Executive

Induction Programme; the Finance Excellence Programme; and

the Business Acumen Programme); and inclusion and diversity

networks throughout the Group (e.g. Women in ABF; Early

Careers Network; and the DEI Network).

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

• Wolfhart Hauser

• Dame Heather Rabbatts

• Richard Reid

All members served on the Committee throughout the year,

with the exception of Dame Heather Rabbatts who was

appointed on 2 November 2022. Ruth Cairnie served on the

Committee until she stepped down from the Board on

31 August 2023.

Meetings

The Committee met four 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;

CORPORATE GOVERNANCE CONTINUED

Nomination Committee Report

90 Associated British Foods plc Annual Report 2023

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 new non-executive directors. 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 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 recommendations of the Nomination

Committee, in May 2023 the Board approved the appointment

of Annie Murphy as a Non-Executive Director with effect from

6 September 2023. Following a similar process, in August 2023

theBoard approved the appointment of Kumsal Bayazit as a

Non-Executive Director with effect from 1 December2023.

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 evaluation

The performance of the Nomination Committee was considered

as part of the internal Board evaluation. The overall view was

that it appeared to be working well and it was noted that the

work of the Nomination Committee had led to securing good

new non-executive director appointments.

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 is available online at: www.abf.co.uk. This was taken

intoaccount in the appointments 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 its importance in

supporting the Group’s strategy.

By way of update, with the appointment of Annie Murphy on

6 September 2023 and with the forthcoming appointment of

Kumsal Bayazit on 1 December 2023 (including the appointment

of both to the Audit and Remuneration Committees), the Board

will have met its aspiration as set out inthe Board Diversity

Policy to increase female representation to at least 40%,

asrecommended by the FTSE Women Leaders Review.

We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 taking up the position of Senior

Independent Director from Ruth Cairnie 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 page 51,

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

91Associated British Foods plc Annual Report 2023

CORPORATE GOVERNANCE CONTINUED

Director skill sets

Director

Food/

Retail

Financial/

Audit/

Risk

Legal/

Public

Policy

Senior

Executive

Cybersecurity/

Comms/

Marketing/

Customer

Service

Environmental/

Social

International

Markets

Technical/

Engineering

Health

and

Safety

Manufacturing/

Supply Chain

Michael McLintock

George Weston

Eoin Tonge

Dame Heather Rabbatts

Emma Adamo

Graham Allan

Wolfhart Hauser

Annie Murphy

Richard Reid

Board and executive management gender andethnicity metrics

New Listing Rules targets for gender and ethnic diversity apply to the Company for the first time this financial year. As at

16 September 2023, the Company had met the new Listing Rules targets for gender and ethnic Board diversity with the exception

ofthe target for 40% female representation on the Board. This remains the case as at the date of this Annual Report. However,

following the appointment of Kumsal Bayazit as a director with effect from 1 December 2023 (subject to Kumsal’s election by

shareholders at the upcoming AGM), the Company will then meet all of the Listing Rules Board diversity targets as it will increase

female representation on the Board to 40%.

The following metrics set out the range of gender and ethnicity as they relate to our Board and executive management as at

16 September 2023. 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 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 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

Number of

Board members % of the Board

Number of

senior Board

positions (CEO,

CFO, SID, Chair)

Number in

executive

management

% of executive

management

Men 6 66.7% 3 10 71.4%

Women 3 33.3% 1 3 21.4%

Not specified/prefer not to say – – – 1 7.2%

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) 8 88.9% 3 10 71.4%

Mixed/Multiple Ethnic Groups 1 11.1% 1 – –

Asian/Asian British – – – – –

Black/African/Caribbean/Black British – – – – –

Other ethnic group, including Arab – – – 1 7.2%

Not specified/prefer not to say* – – – 3 21.4%

* This includes, as permitted by Listing Rule 9.8.6G, 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.

92 Associated British Foods plc Annual Report 2023

Audit Committee Report

Members

At the date of this report, the members and ChairoftheAudit

Committee are as follows:

Richard Reid (Chair)

Graham Allan

Wolfhart Hauser

Annie Murphy (appointed 6 September 2023)

Dame Heather Rabbatts

All members served on the Committee throughout the year

withthe exception of Annie Murphy, who was appointed

on6 September 2023. Ruth Cairnie served on the Committee

throughout the year until stepping down from the Board

on31 August 2023.

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), including the policies and overall process

forassessing established systems and the timeliness and

effectiveness of corrective action taken by management;

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.

Richard Reid

Audit Committee Chair

93Associated British Foods plc Annual Report 2023

CORPORATE GOVERNANCE CONTINUED

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 benefited

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 recognise that they are responsible

for providing a return to shareholders, which isconsistent with

the responsible assessment and mitigation ofrisks.

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. They 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.

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

intheexternal Board evaluation in 2021, which found that the

Committee was universally well-regarded as being strong and

effective. It was noted that members came to the meetings

well prepared and offered robust challenge and that the agenda

of meetings was broad-ranging, well-structured and covered

allthe matters in the Audit Committee’s remit. This view was

reiterated in both the 2022 and 2023 internal Board evaluation.

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.

94 Associated British Foods plc Annual Report 2023

• 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 76 and 77.

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;

• tax contingencies, compliance with statutory tax obligations

and the Group’s tax policy;

• ongoing consideration of the potential implications of the

Government White Paper: Restoring Trust in Audit and

Corporate Governance, including the preparatory work for

additional control reviews, the Group’s Assessment

ofControls Effectiveness (ACE) programme;

• reporting in line with the recommendations and recommended

disclosures of the Task Force on Climate-related Financial

Disclosures (TCFD) and the new Companies Act 2006

climate-related disclosure requirements; and

• treasury policies.

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, operational,

environmental and people 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

that our businesses are effectively managing their key control

risks and agreed action plans with business leaders where

controls require improvement.

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

68to75.

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 16 September

2023 and the period 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 94 to 95 for details of the

process undertaken); and

95Associated British Foods plc Annual Report 2023

CORPORATE GOVERNANCE CONTINUED

Areas of significant accounting judgement and

estimation material to the Group financial

statements Audit Committee assurance

Impairment of goodwill, intangibles, property,

plant and equipment 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 China Sugar, Don, Illovo Mozambique, Jordans

Dorset Ryvita 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 and 10 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 £109m, comprising £41m in the Don

business, £15m in north China Sugar, £35m in Illovo Mozambique and £18m

in Primark was appropriately recognised and included within exceptional

items as detailed in notes 8, 9 and 10.

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 and 10 were appropriately recognised.

Impact of inflationary pressures on the viability

statement and going concern

The Group has continued to experience inflationary

pressures in raw material, supply chains and energy.

These inflationary pressures have been exacerbated

by the war in Ukraine.

The Board considered future performance and cash

flows in its going concern assessment, through to

February 2025, 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

assumptions to confirm the viability of the Group.

The Committee has been kept informed of the impacts of inflationary

pressures on the Group, 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.

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.

96 Associated British Foods plc Annual Report 2023

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 12 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 reports 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;

• an assessment 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;

• reports on significant systems implementations; and

• inflationary pressure 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.

97Associated British Foods plc Annual Report 2023

CORPORATE GOVERNANCE CONTINUED

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.

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 for reporting to the

Audit Committee as appropriate. Further details on the Policy

can be found on page 52. 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 has been communicated to all

employees 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 16 September

2023 were £11.2m, of which £1.0m 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.

98 Associated British Foods plc Annual Report 2023

Minimum Standard

The FRC’s ‘Audit Committees and the External Audit: Minimum

Standard’ (the ‘Minimum Standard’) was published in May 2023,

eight months into the financial year. Between its publication

andthe end of the financial year on 16 September 2023,

oneAudit Committee meeting has taken place, at which the

Minimum Standard was considered. The Audit Committee’s

initial assessment is that there is nothing of note in the

Minimum Standard that differs from how the ABF Audit

Committee currently operates. However, this is being reviewed

further, including to the extent that there may be useful points

to consider in relation to the assessment of the effectiveness

ofthe audit process and to the audit tender process.

Richard Reid

Audit Committee Chair

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.

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

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. Any decision to open the external audit to tender

istaken on the recommendation of the Audit Committee.

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 2023/24. The Board accepted such recommendation. In

accordance with applicable law and regulation, the Company is

required to conduct a competitive audit tenderduring 2025.

The Audit Committee has discussed the most appropriate time

to carry out the external audit tender process, taking into account

the independence, objectivity and quality of EY’s external audit

and has concluded that, based on current performance, it is

anticipated that a competitive tender process will commence in

2024. The Audit Committee considers that a competitive tender

is in the best interests of the Company’s shareholders as it will

allow the Company to appoint the audit firm that will provide

thehighest quality, most effective and efficient audit.

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.

99Associated British Foods plc Annual Report 2023

DIRECTORS’ REMUNERATION REPORT

Annual statement by the Remuneration

Committee Chair

Dear shareholders

In this first letter as the new Remuneration Committee Chair,

Iam pleased to present the Directors’ Remuneration Report for

the year to 16 September 2023. I would like to acknowledge

Ruth Cairnie’s extensive work as the previous Committee Chair

and to thank her for her support with the transition.

Work of the Committee in 2022/23

The role of the Committee includes incentivising strong

business performance and appropriately rewarding contributions

to the Company’s long-term success. We are pleased that the

2022 Remuneration Policy, which was based on these

principles, received support from more than 92% of

shareholders at the 2022AGM.

The Committee has, as part of its regular work, reviewed the

policy based outcomes under the annual short-term incentive

plan (STIP) and the long-term incentive plan (LTIP), as well as

consulting with shareholders on the proposed restricted

shareplan (RSP) award level for the Chief Executive for

2023-26onwards.

Graham Allan

Remuneration Committee Chair

In this section

Committee Chair letter pages 100 to 101

Remuneration at a glance pages 102 to 103

Remuneration Report pages 100 to 115

Wider workforce remuneration pages 107 to 108

Additional required disclosures pages 111 to 115

The Annual Remuneration Report is subject toanadvisory

vote at the 2023 AGM.

Incentive Plan Outcomes for 2022/23

At the beginning of the year, the Company was facing extreme

market volatility, as well as significant cost inflation at Primark

and inmost of the food businesses. Given the challenging

trading environment, adjusted operating profit and adjusted

earnings per share were, at that time, expected to be lower

than in2021/22. During the course of the year, however,

theCompany successfully navigated these headwinds and

outperformed against both expectations and the prior year.

AtPrimark, well-received ranges, good results from new stores,

and selective price increases generated a solid sales and profit

outcome. Several other businesses had impressive sales

growth, particularly in Grocery and Ingredients, and international

brands performed well. In Sugar, performance was slightly

better than expected and adjusted operating profit was

moderately above last year. For the Group overall, this strong

all-round performance resulted in adjusted operating profit

finishing ahead of last year. The remuneration outcomes for

2022/23 reflect these results.

Short-Term Incentive Plan (STIP) 2022/23

Underpinned by year-on-year sales growth, operating profit

exceeded the maximum target established under the STIP.

However, working capital levels were impacted by supply chain

challenges and inflationary pressures and the threshold for the

working capital modifier was not met. Accordingly, the overall

outcome under the financial performance measures for this year

is 66.67% of maximum.

Last year, as part of our review, the personal element of

theSTIP was replaced with strategic KPIs, with a weighting

of15%.This year our strategic KPIs were all related to ESG.

Thediversified nature of ABF means that ESG targets

aredeveloped by division, with the centre having a key role

ingovernance, overseeing progress and ensuring accountability

for performance. Our scorecard of measures for the year

incorporated both the key ESG priorities within the divisions and

the evolution of our governance model. For the 2022/23 STIP,

against a broad scorecard of measures, the Committee

assessed the overall score at 21/30.

Combining these measures, the overall formulaic outcome

forthe 2022/23 STIP was 67.17% of maximum.

Long-Term Incentive Plan 2020-23

Reflecting the Group’s strong post-COVID recovery, EPS

performance for the 2020-23 LTIP wasbroadly in line with the

target set back in 2020. The Group three-year average ROACE

without Sugar exceeded the maximum level. The four-year

average Sugar ROACE outcome was just below the maximum

level. Note that the Group ROACE without Sugar modifier

andthe Sugar ROACE modifier act only as downward modifiers

to the calculated incentive outcomes.

Based on these results, the overall formulaic outcome for the

2020-23 LTIP was 58.46% of maximum.

The Committee believes that the STIP and LTIP outcomes

areappropriate, taking into account the performance ofthe

Company in the year and the strong recovery of the business

over the three-year LTIP performance period.

100 Associated British Foods plc Annual Report 2023

Appointment of Eoin Tonge

In the year, the Committee finalised the terms ofbuy-out

awards in place of awards forfeited by Eoin Tonge athis

previous employer, Marks and Spencer (‘M&S’), upon his

appointment as Finance Director of ABF. These awards,

alongwith their terms, were disclosed in last year’s Directors’

Remuneration Report. Three of these awards vested in July

2023. Details ofthese can be found on page 111.

Remuneration decisions for 2023/24

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. We assess that our

average UK salary increases will be 9.2% including hourly-paid

Primark staff, and 4.7% if hourly-paid Primark staff are excluded.

In this context, the Committee has determined that for 2023/24,

the executive directors will receive salary increases of 4.5%,

below the average increase for the wider employee population.

STIP 2023/24

For 2023/24, the financial measures under the STIP remain

thesame as those used in 2022/23, with a modest rebalancing

towards EBIT performance versus workingcapital. Strategic

measures, focused on ESG, will continue to represent 15%

ofthe total measures.

Restricted Share Plan (RSP) 2023-26

The shareholder-approved 2022 Remuneration Policy included a

move from LTIP awards to RSP awards for those in Group roles.

In line with shareholder expectations, the RSP awards represent

a 50% reduction in award opportunity compared to the previous

LTIP awards.

ABF has operated a conservative overall incentive quantum for

many years, with the maximum LTIP award level having been

set at200% of salary since 2010. Recognising the modest level

of our incentive packages, the 2016 and 2019 remuneration

policies included headroom for LTIP awards to be increased up

to 300%ofsalary for new hires.

As disclosed last year, the recruitment of Eoin Tonge as Finance

Director afforded an opportunity to test the competitiveness

ofsenior level remuneration at ABF. As anticipated, use of the

policy headroom was required and an LTIP opportunity of 250%

of salary was needed to secure Eoin in the role. Under the

2022Remuneration Policy, this translated to an RSP award

of125%of salary.

Reliance on this policy headroom to successfully recruit a new

Finance Director caused the Committee last year to consider

anincrease in the maximum opportunity for the Chief Executive

to an LTIP of 250% or an RSP award of 125% ofsalary. At that

time, the Chief Executive requested that this increase be

deferred. As a result, his RSP opportunity for 2022-25 was

100% of salary.

This year, the Committee again reviewed market data and

internal relativities, and concluded that it would be inappropriate

to continue awarding RSP awards to the Chief Executive at a

lowerlevel than those awarded to the Finance Director. Recent

market data reveals that an RSP award of 100% of salary is not

competitive, with ABF having the joint lowest opportunity within

a comparator group of similar sized UK listed companies.

The chart below shows the LTIP opportunities in the FTSE

15–45 (excluding Financial Services) with awards subject to

performance conditions discounted by 50% to allow for ready

comparison to the RSP, alongside the current and proposed

opportunities at ABF:

250

(%)

200

150

100

LTIP opportunity (% of salary)

– 50% discount applied

for performance decisions

From 2023/24 onwards, we plan to make RSP awards at125%

of salary to both executive directors. This remains modest

compared to other companies of our scale.

As part of the normal consultation process we engaged with

22of our largest shareholders on this proposal. No significant

concerns have been raised with the Committee in the course

ofthese consultations.

Consideration of wider workforce views and

remuneration approaches

The Group is geographically dispersed and subject to quite

different employment market conditions, both of which

complicate meaningful comparisons against wider workforce

compensation. However, 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 Committee. We have also

created 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.

2023 AGM

This year the Committee has maintained its approach of aligning

compensation with business performance and the shareholder

experience. I hope that you will feel able to support our

Directors’ Remuneration Report at the 2023 AGM.

Graham Allan

Remuneration Committee Chair

101Associated British Foods plc Annual Report 2023

DIRECTORS’ REMUNERATION REPORT CONTINUED

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 & 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 summary/at a glance

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. We believe that pay should be:

Remuneration approach

The Remuneration Policy for the executive directors, approved by shareholders last year, 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 ABF’s

size and scale

The Chief Executive will

optout of his current

EFRBS and will not

receive a cash allowance

thereafter

The Finance Director

receives a cash allowance

of 10% ofsalary aligned

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 2 years after

leaving employment

The policy worked as intended this year and outcomes are in line with performance. The full Remuneration Policy wording is set out

inthe 2022 Annual Report and Accounts which is available on the Company’s website https://www.abf.co.uk

Time horizons for STIP and RSP awards

2022/23 2023/24 2024/25 2025/26 2026/27

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 working capital)

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 (ROACE), alignment with shareholders (dividends), 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.

102 Associated British Foods plc Annual Report 2023

Shareholder voting and engagement

We were pleased last year that 92.37% of those voting supported our new remuneration policy and that 99.11% 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 2022 December 2022 99.11% 0.89% 928,042

During the year, the Committee engaged with its major shareholders on the proposed increase to the Chief Executive’s RSP award

level. See page 101 for more information on this consultation.

Annual remuneration report

Single total figure of remuneration for the executive directors (audited)

George Weston Eoin Tonge John Bason

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

Fixed pay Salary 1,118 1,084 446 – 478 748

Benefits 18 17 17 – 11 17

Pension 0 101 45 – 81 187

Total fixed remuneration 1,136 1,202 508 – 570 952

Variable pay STIP cash 1,167 1,084 449 – 484 745

STIP deferred shares 469 253 194

LTIP 1,328 0 - – 756 0

Other – – 2,372 – – –

Total variable remuneration 2,964 1,084 3,074 – 1,434 745

Single total figure 4,100 2,286 3,582 – 2,004 1,697

Notes to single total figure of remuneration for the executive directors

Salary

For George Weston, the salary paid is reduced for pension-related salary sacrifices. The benefit of these salary sacrifices is captured

inthe increase in pension entitlements for which a remuneration value is shown in the pensions row.

Benefits

The value of benefits for George Weston comprised £15,656 taken in cash and £2,114 taxed as benefits-in-kind; for Eoin Tonge

comprised £15,197 taken in cash and £1,363 taxed as benefits-in-kind; and for John Bason benefits comprised £9,725 taken in cash

and £1,001 taxed as benefits-in-kind.

Pension

In 2022/23 George Weston had an overall benefit promise of 1/45

of final pensionable pay for each year of pensionable service up

to5 April 2016 and 1/50

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 is provided under an 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 16 September

2023 was £754,991 per annum. George Weston will opt out of the EFRBS on 31 December 2023.

While the nature of George Weston’s pension benefits has not changed during the year, 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. Between 24 April 2019 and 31 December 2022, John Bason received a cash supplement of 25% of salary

inlieu of pension contributions. This reduced to 10% of salary from 1 January 2023.

George Weston total remuneration Eoin Tonge total remuneration

(£000)

‘19 ‘20 ‘21 ‘22 ‘23

3,582

2,000

1,000

3,000

4,000

5,000

(£000)

‘19 ‘20 ‘21 ‘22 ‘23

1,138

4,204

3,329

2,286

4,100

1,000

2,000

3,000

4,000

5,000

103Associated British Foods plc Annual Report 2023

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Remuneration Report

STIP 2022/23

Achievement against financial targets

This table details the financial performance ranges for STIP 2022/23 and the calculated outcome for the cash element ofthe STIP.

Cash element

Cut In Target Maximum

2022/23 STIP

outcome

Adjusted operating profit £m 1,130 1,255 1,380 1,513.19

STIP based on profit (as % of salary) 15.94% 63.75% 106.25% 106.25%

Working capital as % of 3

party sales 15.40% 14.39% 13.38% 15.88%

% modifier to Profit element 80% 100% 120% 80%

Total STIP cash financial element (as % of salary) 12.75% 63.75% 127.5% 85%

At the start of the year, the Company was facing extreme market volatility and significant cost inflation. Given the challenging

tradingenvironment, adjusted operating profit was expected to be lower than in2021/22. As explained on page 100, the Company

successfully navigated these headwinds. For the Group overall, this strong all-round performance resulted in adjusted operating profit

finishing ahead of last year and ahead of the maximum of the STIP performance range. However, working capital levels were impacted

by supply chain challenges and inflationary pressures and the threshold for the working capital modifier was not met. Accordingly,

theoverall outcome under the financial performance measures for this year is 66.67% of maximum.

Achievement against ESG strategic KPIs

This year our STIP strategic KPIs were all related to ESG. In our diversified Group, ESG-related targets are set by the businesses based

on their material risks and what is relevant and achievable for them. As detailed in our TCFD report, our most material businesses

each have their own emissions reduction targets.

We are committed to a range of sustainability goals, including reaching net zero by 2050, and believe that the best way to incentivise

management to deliver this is by setting targets in their short-term incentive plans linked to the delivery of key projects. In our TCFD

report we have included transition plans for ABF Sugar and Primark as they contribute most significantly to adjusted operating profit

and total GHG emissions.

In line with our governance model, we have assessed the STIP outcome taking into account progress in four key areas, as set out

inthe table below. The targets set were demanding and tightly-aligned with our approach to ESG. Against a scorecard of measures,

the overall score achieved was 21/30, 70% of the maximum for this element.

The Committee also considered our progress on ESG in the round, ensuring that our ESG governance approach is robust, that each

operating division has its own ESG framework and increasing understanding of future legislation and implications for reporting.

TheCommittee concluded that progress had been good and was therefore satisfied that 21/30 (70%) was a fair outcome.

Score Commentary and performance outcome

Primark

sustainability

5/6

• 55% of clothing made from recycled/more sustainably sourced material, up from 45% in 2022.

• 46% of cotton clothing units sold contained organic, recycled or Sustainable Cotton Programme

(PSCP) cotton, up from 40% in 2022.

• Over 299,000 farmers trained or currently in PSCP.

People and

community

6/9

• Primark Phase 2 pilot completed using Fair Labour Association (FLA) tool to assess wage data

in30factories compared with the Global Living Wage Coalition benchmark.

• Social and supply chain risks documented to same level as environmental risks – significant

progressmade.

• Further review of the human rights risks across 15 key commodities is underway.

• Board Diversity Policy introduced with principles applied across the Group.

• Health, Safety and Wellbeing Policy updated to reflect focus on mental health and wellbeing.

Carbon

6/8

• Progress on key Sugar projects in the UK designed to reduce carbon emissions including:

• modifications to driers to enable them to run on natural gas rather than coal; and

• removing calcium from juice to enable evaporators to operate more efficiently.

• For further information please refer to page 65.

Water

4/7

• Around half of Illovo abstraction sites have >95% instrumentation accuracy and capital plans are

inplace to ensure remaining sites are at this level by the end of 2024.

• Carried out annual water risk assessments for our operations using internationally recognised

methodologies to identify sites in water-stressed areas.

• 25% of water abstracted was reused before being returned to watercourses.

104 Associated British Foods plc Annual Report 2023

Overall achievement

The overall outcome for the STIP cash element was 100.75% of salary (67.17% of maximum) as shown in the table below.

Cut In Target Maximum Actual

STIP financial element 12.75% 63.75% 127.5% 85%

STIP ESG/KPI element 2.25% 15% 22.5% 15.75%

STIP cash total 100.75%

The 2022-25 STIP shares element was subject to the same performance conditions as the cash element. 67.17% 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 111.

STIP amounts included in the single total figure table

For 2022/23, 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 2022/23 financial year, calculated

based on the average mid-market closing price over the last quarter of the financial year of 2,008.02p. These shares are subject to

atwo-year deferral period. 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. No value is included in respect of the STIP deferred shares based on

performance in 2020/21 and vesting in November 2023 as these values were required to be reported in the 2020/21 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 2021/22, this figure comprises the annual cash bonus, which was paid in December 2022 in respect of the preceding financial

year, and the value of deferred share awards, earned for performance in the 2021/22 financial year, calculated based on the average

mid-market closing price over the last quarter of the 2021/22 financial year of 1,580.52p. 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. None of this value is

attributable to share price appreciation as the share price decreased in the 2021/22 financial year. 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 2020–23

Boosted by a strong post-COVID recovery, the EPS performance for the 2020-23 LTIP wasjust ahead of target. The Group three-year

average ROACE without Sugar exceeded the maximum level. The four-year average Sugar ROACE outcome was just below the

maximum level. Note that the Group ROACE without Sugar modifier and the Sugar ROACE modifier act only as downward modifiers

to the calculated incentive outcomes. The overall formulaic outcome for the 2020-23 LTIP was 58.46% of maximum, as shown in the

table below.

Threshold Target Maximum Performance

Calculated

outcome

100% of award Group adjusted earnings per share

inthe non-Sugar businesses 125p 132p 142p 133.7p 58.5%

3-yr ROACE in the non-Sugar

businesses downward modifier 10% 12% 13.07% 100%

4-yr Sugar ROACE downward modifier 5% 8% 7.99% 99.93%

Vesting as % of maximum 58.46%

LTIP amounts included in the single total figure table

The numbers in the single total figure table reflect the number of shares vesting. George Weston will receive 63,063 shares and John

Bason willreceive 35,870 shares. As required by UK regulations, the vesting value for 2020–23 has been estimated using the

mid-market closing price over the last quarter of 2022/23 of 2,008.02p. Vesting will be on 20 November 2023 and a figure recalculated

for the share price on that date will be presented in the 2023/24 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 £62,054 and for John Bason is £35,296. None of the amount shown is in respect of an increase in share price as the price

used in the calculation is below the allocation price.

None of the shares under the LTIP for 2019–22 vested in November 2022.

Other

The values shown for other remuneration in the single total figure table for Eoin Tonge are:

• the buyout awards made to replace awards that he held in M&S of 96,210 shares, which vested on 3 July 2023 ataprice of

2,006.7p; and

• £440,605 in cash made as a buyout award in respect of the M&S STIP heforfeited on joining ABF.

105Associated British Foods plc Annual Report 2023

DIRECTORS’ REMUNERATION REPORT CONTINUED

Implementation of policy in 2023/24

Base salary

Salaries for the executive directors will increase as shown below in December 2023. Estimated average UK

salary increases are expected to be 9.23% including hourly-paid Primark staff, and 4.68% excluding them.

Increase

Salary from

1 December 2023

George Weston 4.5% £1,210,000

Eoin Tonge 4.5% £757,500

Pension

The Group has a wide variety of pension arrangements in place and a history of honouring the

commitments we make to individuals at appointment. Our UK defined benefit pension scheme remains

open to future accrual for members who joined the Group before it closed to new members.

George Weston participates in an EFRBS designed to replicate benefits under the UK defined benefit

scheme. Whilst this is consistent with others who joined the Group at a similar time, it is different from the

wider workforce of more recent recruits who participate in a defined contribution scheme.

In 2021/22 George Weston agreed that his EFRBS participation would end on 31 December 2023. Hewill

then opt out of the EFRBS and become a deferred member of the Scheme. Thereafter he will receive no

further EFRBS accruals from the Group, nor will he receive a cash allowance in lieu of pension contributions.

Eoin Tonge will receive a cash supplement of 10% of salary in lieu of pension contributions, in line with the

approach for the wider ABF UK workforce.

STIP 2023/24

150% of salary

incash

50% of salary

inshares

EBIT

(% of salary)

Modification

basedon

average

workingcapital

Total financial

element

(% of salary)

ESG and

strategic

measures

(% of salary)

Total STIP

(% of salary)

Maximum 147.83% x1.15 170% 30% 200%

On-target 85% X1 85% 20% 105%

Threshold 20% x0.85 17% 3% 20%

Below threshold 0% x0.85 0% 0% 0%

The financial measures remain the same as in 2022/23, with a modest rebalancing in weighting towards

EBIT performance.

STIP share awards will be granted in November 2023 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 2023-26

125% of salary

inshares

Restricted share awards will be granted in November 2023. 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 ABF’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 £78,250 to £81,750 in December 2023.

The fee for the Senior Independent Director will increase from £24,500 to £25,000 in December 2023.

The fee for responsibility for workforce engagement will increase from £23,500 to £25,000 in December 2023.

The Chairman’s fee will increase from £440,000 to £459,800 in December 2023.

106 Associated British Foods plc Annual Report 2023

Wider Workforce Remuneration

Fair pay

Associated British Foods is a diversified business that currently operates in 55 countries and employs 133,000 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.

Workforce engagement on remuneration

Please see the Remuneration Committee Chair’s letter on pages 100 and 101 for more information on how the Committee

communicates with the wider workforce.

Inflation and wider workforce remuneration

This year has seen exceptionally high inflation in the UK, with the lowest paid workers disproportionately impacted. In our

decentralised model, the salary management approach varies from business to business but all have targeted higher rates of salary

increase to our more junior employees. Many have also paid temporary allowances or made specific additional payments to lower paid

colleagues to assist them with the additional costs they are facing.

This year we have updated our Health, Safety and Wellbeing Policy to include a greater focus on mental health and wellbeing.

Inaddition, many of our businesses have reviewed their financial wellness activities to help protect employees from financial shocks.

96% of our people have access to an EAP to support their wellbeing. More information on the actions our businesses take to support

employees’ wellbeing can be found in our Responsibility Report.

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

Pay should be…

Appropriate Market competitiveExplainableFree from

discrimination

Intuitive

107Associated British Foods plc Annual Report 2023

DIRECTORS’ REMUNERATION REPORT CONTINUED

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 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 109

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 Company.

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 a third 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 that is half the

amount of an equivalent LTIP award

and which vest provided 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 all 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.

Newly appointed 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 the 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.

108 Associated British Foods plc Annual Report 2023

CEO Pay Ratio

Year Methodology used Lower quartile Median Upper quartile

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

Lower quartile Median Upper quartile

Salary for GB-based employees £19,898 £23,031 £29,406

Single figure of total remuneration for GB-based employees £20,957 £24,655 £31,390

Annual percentage change in remuneration of directors and employees

% change in salary/fees % change in benefits

% change in cash STIP

2023 2022 2021 2020 2023 2022 2021 2020 2023 2022 2021 2020

George Weston

3.14% 0.15% 33.09% (23.52)% 5.88% 5.45% 0% 0% 33.8% 0.04% 100% (100)%

Eoin Tonge – – –

John Bason

(36.10)% 0.60% 34.30% (21.19)% (35.29)% 4.91% 0% (23.81)% (19.7)% 1.35% 100% (100)%

Michael

McLintock

3.56% 0.96% 15.19% (11.49)% n/a n/a n/a n/a n/a n/a n/a n/a

Ruth Cairnie

2,4

(11.67)% 0% 17.65% (8.11)% n/a n/a n/a n/a n/a n/a n/a n/a

Richard Reid²

3.52% (2.07)% 42.16% (8.11)% n/a n/a n/a n/a n/a n/a n/a n/a

Graham Allan

15.79% 1.33% 15.38% (12.16)% n/a n/a n/a n/a n/a n/a n/a n/a

Heather Rabbatts

14.47% 1.33% - – n/a n/a n/a – n/a n/a n/a –

Emma Adamo

2.63% 1.33% 15.38% (12.16)% n/a n/a n/a n/a n/a n/a n/a n/a

Wolfhart Hauser

2.63% 1.33% 15.38% (12.16)% n/a n/a n/a n/a n/a n/a n/a n/a

Annie Murphy – – – – – – – – – – – –

Average ABF plc

UK employee

2.1% 9.5% 4.70% (0.70)% (1.5)% 15.1% 3.90% 2.90% 9.3% 13.5% 167% (63)%

1. George Weston and John Bason’s salary rates increased by 3.5%, a lower increase rate than for other head office employees, whose standard increase was 6%.

The lower increase shown in the table reflects an increase in the number of more junior roles in the head office.

2. The NED fee increased from £76,000 to £78,250 in December 2022.

3. Michael McLintock’s fee increased to £440,000 in December 2022.

4. The Committee Chair fee increased from £23,500 to £27,000 in December 2022 and the Senior Independent Director fee increased from £21,000 to £24,500 in

December 2022. Therewas no change to other additional responsibility fees in the period, but the change in base NED fee detailed in note 2 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 103 and includes benefits in kind and benefits taken

incashbut excludes any pension allowances. The reduction in benefits for the average employee reflects a reduction of the number of employees eligible

foracompany car.

6. Includes cash STIP payments only.

7. The numbers for 2022 have been restated to correct an error in the 2022 disclosure, which led to the salary and benefits increases being understated and

theSTIP increase overstated for the average employee.

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

2023 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.

Those at the lower quartile data point are Primark and Allied

Bakeries employees, at median they are from Primark,

Speedibake and Vivergo and at upper quartile they are from

Speedibake, Primark, Allied Bakeries, Westmill and SilverSpoon.

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 11.7% 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.

109Associated British Foods plc Annual Report 2023

2023 Gender pay gap reporting

Women comprise 55% 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2023. However, more than half ofour workforce is employed outside Great Britain and is

not included in this analysis. Consistent with last year we have presented data for the whole Group and for the Group without Primark.

ABF Group businesses in GB ABF Group businesses in GB (excluding Primark)

2023 2022 2023 2022

Women’s mean hourly pay rate

isbelowthat of men by 28.2% 31.6%

Women’s mean hourly pay rate

isabovethat of men by 3.6% 4.0%

Women’s median hourly pay rate

isbelow that of men by 18.9% 22.6%

Women’s median hourly pay rate

isabove that of men by 10.2% 9.0%

Women’s mean bonus pay rate

isbelowthat of men by 27.0% 34.1%

Women’s mean bonus pay rate

isbelowthat of men by 24.1% 34.0%

Women’s median bonus pay rate

isabove that of men by 21.8% 25.9%

Women’s median bonus pay rate

isabove that of men by 29.8% 30.0%

Percentage of men who

receivedabonus 26.6% 26.5%

Percentage of men who

receivedabonus 50.8% 48.0%

Percentage of women who

receivedabonus 7.9% 7.2%

Percentage of women who

receivedabonus 66.5% 61.3%

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 pay gap has improved, though it remains in favour

ofmen. A significant number of female employees work as

retail assistants, with 77.2% of roles in the lower pay quartile

taken by women. Whilst men take up more of the highest

paid roles, we are pleased that the proportion of women in the

upper quartile is increasing, reducing the pay gap.

One of the Company’s strengths is that business leaders have

detailed knowledge of every aspect of their organisation. That

knowledge often comes from many years in role. Institutional

memory is critical in our decentralised operating model.

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.

Non-retail businesses

In the non-retail businesses the pay gap remains in favour of

women as we have a significant majority of male employees in

the food businesses 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 1.4% pay gap in Primark.

For more information on our approach to DEI, please refer to our

Responsibility Report.

Upper Upper middle Lower middle Lower

(%)

35.5

68.0

32.0

100

64.5

Group

businesses

in GB

Group

businesses in

GB without

Primark

Male

Female

(%)

57.1

71.0

29.0

100

42.9

Group

businesses

in GB

Group

businesses in

GB without

Primark

(%)

76.5

79.0

21.0

100

23.5

Group

businesses

in GB

Group

businesses in

GB without

Primark

(%)

77.2

71.3

28.7

100

22.8

Group

businesses

in GB

Group

businesses in

GB without

Primark

Proportion of men and women in each pay quartile

DIRECTORS’ REMUNERATION REPORT CONTINUED

110 Associated British Foods plc Annual Report 2023

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 16 September 2023. 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. A further two-year post-vesting

holding period applies to net of tax shares. TheRSPis expected to vest in full, subject to meeting performance underpins.

Scheme

Award

date

Maximum award

Market

price at

grant

End of

performance

period

Shares vesting

Release

date

of salary

Face value

atgrant

£000 Maximum

Target

(50% of

maximum)

Threshold

(10% of

maximum)

George

Weston

LTIP

20/11/20 200% 2,180 2,020.9p 16/09/23 107,873 53,937 10,787 20/11/23

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

John

Bason

LTIP

20/11/20 200% 1,440 2,020.9p 16/09/23 71,255 35,628 7,126 20/11/23

19/11/21 200% 1,440 1,974.7p 14/09/24 74,381 37,191 7,438 19/11/24

RSP 09/12/22 100% 152 1,665.3p 13/09/25 9,113 N/A N/A 17/11/25

Eoin

Tonge

RSP 03/03/23 125% 906 1,665.3p 13/09/25 54,420 N/A N/A 17/11/25

Vested M&S

buyoutawards

STIP 22/23 buyout

03/07/23 – 441 1,604.6p N/A 27,459 N/A N/A 03/07/23

RSP buy out

03/03/23 – 364 1,604.6p N/A 22,656 N/A N/A 03/07/23

PSP 20-23 buy out

03/03/23 – 1,450 1,604.6p 16/09/23 90,383 – 18,077 03/07/23

Unvested M&S

buyout awards

DSBP buyout

03/03/23 – 570 1,604.6p N/A 35,511 N/A N/A 01/07/25

PSP 21-24 buy out

03/03/23 – 1,358 1,604.6p 14/09/24 84,611 42,306 8,461 01/11/24

PSP 22-25 buy out

03/03/23 – 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. None of the buyout awards

ispensionable.

2. These awards were allocated and vested this financial year. The beneficial ownership shown on page 112 is the amount of shares retained from those that

vested in July 2023 after selling sufficient to cover tax and National Insurance due.

3. All of these shares vested in July 2023 and are to be retained until 01/07/26.

4. All of these shares vested in July 2023 and are to be retained until 06/07/25.

5. 46,095 of these shares vested in July 2023 after applying the performance conditions that applied to the M&S 20-23 PSP award. Net vested shares to be

retained until 01/07/25.

6. Performance will be assessed 30% against ABF 21-24 EPS targets, 30% against ABF strategic KPIs and 40% against ABF average STIP as a percentage

ofmaximum for 2022/23 and 2023/24.

7. Net vested shares to be retained until 01/07/27, underpins apply in line with those on the 22-25 RSP award.

STIP – shares

The value 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

grant

End of

performance

period

Maximum

lapsed for

performance

subject to

service

condition

Release

date

George Weston Deferred

awards

20/11/20 50% 545 2,020.9p 18/09/21 26,968 13,484 13,484 20/11/23

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

Eoin Tonge Deferred

awards 03/03/23 50% 312 1,665.3p 16/09/23 18,745 6,154 12,591 17/11/25

John Bason Deferred

awards

20/11/20 50% 360 2,020.9p 18/09/21 17,814 8,907 8,907 20/11/23

19/11/21 50% 360 1,974.7p 17/09/22 18,595 9,589 9,006 19/11/24

09/12/22 50% 240 1,665.3p 16/09/23 14,421 4,734 9,687 17/11/25

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 were made at the same share price as those for the main award.

111Associated British Foods plc Annual Report 2023

Executive Directors’ shareholding requirements (audited information)

The interests below as at 16 September 2023 remained the same at 7 November 2023. George Weston has met our shareholding

requirement. Since joining the business this year, 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

16 September

2023

Total

17 September

2022

George Weston

Wittington Investments Limited,

ordinary shares of 50p n/a 15,060.5 n/a n/a n/a 15,060.5 6,328

Associated British Foods plc,

ordinary shares of 5

p 250% of salary 3,795,585 6,821% 287,807 50,204 4,133,596 4,127,648

Eoin Tonge

Associated British Foods plc,

ordinary shares of 5

p 250% of salary 50,855 146% 146,099 48,102 245,056 –

John Bason

Associated British Foods plc,

ordinary shares of 5

p 250% of salary 229,369

612% 154,749 27,600 411,718 446,758

1. Calculated using share price as at close of business on 15 September 2023 of 2,081p and rate of base salary as at 16 September 2023.

2. George Weston is a director of Wittington Investments Limited which, together with its subsidiary Howard Investments Limited, held 431,515,108 ordinary

shares in Associated British Foods plc as at 16 September 2023.

3. Beneficially owned shares are shown as at retirement date.

4. Prior year restated to reflect revised approach of including only the element of STIP shares that is subject to a holding condition. Adjustment for George Weston

is 4,177,101 shares minus 76,303 (the full amount of STIP shares shown on page 143 of the 2022 Annual Report) plus 26,850 (the number of STIP shares

subject to a service condition). Adjustment for John Bason is 479,612 shares minus 50,767 plus 17,913. This methodology is then consistent with the numbers

shown for unvested deferred awards and total shares for 2023.

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

Wolfhart Hauser 14/01/15 14/01/15 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

Copies of service contracts are available for inspection at the Company’s head office.

DIRECTORS’ REMUNERATION REPORT CONTINUED

112 Associated British Foods plc Annual Report 2023

Executive Director departures and appointments

Appointment of Eoin Tonge as Finance Director

Our approach to remuneration for Eoin Tonge was set out in detail on page 146 of the 2022 annual report. The details of RSP and

buyout awards made to him can be found in the share allocation tables on page 111.

Retirement of John Bason as Finance Director

John Bason retired on 28 April 2023 and was determined to be a good leaver. He remains subject to the following shareholding

requirements:

• any shares vesting under the LTIP need to be retained, net of tax, for a further two years from the vesting date; and

• a personal holding of ABF shares to the value of 250% of salary must be maintained until 28 April 2025. Shares that are subject

toaholding period post-vesting count towards this 250% shareholding requirement.

Details of the approach applied for incentive awards can be found on page 147 of our 2022 Annual Report.

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 noted above

inrespect of his participation in incentive schemes up to his leaving date.

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.

Non-Executive Directors’ remuneration (audited information)

Fees Fixed pay Variable pay

Single total figure

of remuneration

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

Michael McLintock 436 421 436 421 – – 436 421

Ruth Cairnie

106 120 106 120 – – 106 120

Richard Reid 147 142 147 142 – – 147 142

Emma Adamo 78 76 78 76 – – 78 76

Wolfhart Hauser 78 76 78 76 – – 78 76

Graham Allan

88 76 88 76 – – 88 76

Heather Rabbatts

87 76 87 76 – – 87 76

Annie Murphy

6 0 6 0 – – 6 0

1. Ruth Cairnie stepped down as Senior Independent Director and Remuneration Committee Chair on 1 May 2023 and left the Board on 31 August 2023.

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.

Non-executive directors’ remuneration

Non-executive directors’ fees were reviewed during 2023 and it was determined that increases should be made as shown below.

Fees effective

1 Dec 2023

Fees effective

1 Dec 2022

Chairman £460,000 £440,000

Additional fee for Senior Independent Director responsibilities £25,000 £24,500

Additional fee for Committee Chair (Audit/Remuneration only) £27,000 £27,000

Additional fee for responsibility for workforce engagement £25,000 £23,500

Additional fee for chairing Primark Finance and Risk Committee £19,000 £19,000

Director £81,750 £78,250

113Associated British Foods plc Annual Report 2023

NED 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 7 November 2023.

Total

16 September

2023

Total

17 September

2022

2023 total

holding as % of

annual fee

Michael McLintock 24,000 24,000 114%

Ruth Cairnie

5,223 5,223 84%

Richard Reid 3,347 3,347 47%

Emma Adamo

Wittington Investments Limited, ordinary shares of 50p 1,011 1,322 –

Associated British Foods plc, ordinary shares of 5

p 511,234 511,234 13,596%

Wolfhart Hauser 7,161 7,161 190%

Graham Allan 10,000 10,000 198%

Heather Rabbatts – – 0%

Annie Murphy – – 0%

1. Shareholding at 31 August 2023 when Ruth Cairnie’s appointment ended

2. Emma Adamo is a director of Wittington Investments Limited which, together with its subsidiary, Howard Investments Limited, held 431,515,108 ordinary

shares in Associated British Foods plc as at 16 September 2023.

3. Calculated using share price as at close of business on 15 September 2023 of 2,081p and fee rate as at 16 September 2023.

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 2013 to September

2023 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.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Source: DataStream Return Index

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Single total figure

remuneration (£’000) 7,470 3,056 3,133 4,849 3,843 4,204 1,138 3,329 2,286 4,100

Annual variable element

– STIP (% of maximum

before share price

impacts) 59.49% 44.46% 86.75% 97.47% 50.34% 73.37% 0% 52.50% 51.09% 67.17%

Long-term variable

element – LTIP

(% of maximum) 100% 18.54% 0% 51.02% 100% 57.13% 0% 40.00% 0% 58.46%

100

125

150

175

200

ABF

FTSE 100

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of a hypothetical £100 investment

114 Associated British Foods plc Annual Report 2023

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.

2023

£m

2022

£m

Change

Pay spend for Group 3,156 2,812 12%

Dividends relating to period 459 345 33%

Taxes paid 341 304 12%

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

Ruth Cairnie Chair (until May 2023) then member Senior (until May 2023) Independent Director 2014 3/3

Wolfhart Hauser Member Independent Director 2015 4/4

Richard Reid Member Independent Director 2016 4/4

Michael McLintock Member Chairman 2017 4/4

Graham Allan Member then Chair (from May 2023) Independent Director 2018 4/4

Heather Rabbatts Member Senior Independent Director (from May 2023) 2021 4/4

Annie Murphy Member Independent Director 2023 1/1

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. 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 £76,500.

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 UKLA Listing Rules.

The Directors’ Remuneration Report was approved by the Board and signed on its behalf by

Paul Lister

Company Secretary

7 November 2023

115Associated British Foods plc Annual Report 2023

DIRECTORS’ REPORT

Directors’ Report

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 149.

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 benefited 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 112 to 114.

Disclosures required under Listing Rule 9.8.4R

The following table is included to meet the requirements of

Listing Rule 9.8.4R. The information required to be disclosed

byListing Rule 9.8.4R, where applicable to the Company, can

be located in the Annual Report at the references set out below.

Information required Location in Annual Report

(4) Long term incentive

scheme See page 111

(12) Shareholder waiver

ofdividends Note 24 on page 164

(13) Shareholder waiver

offuture dividends Note 24 on page 164

(14) Board statement on

relationship agreement with

controlling shareholder

Directors’ Report on page 116

(below)

Paragraphs (1), (2), (5), (6), (7), (8), (9), (10) and (11) of Listing Rule 9.8.4R

arenot applicable.

Relationship agreement 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Listing Rules. The Listing Rules require companies with

controlling shareholders to enter into an agreement which

isintended to ensure that the controlling shareholders comply

with certain independence provisions in the Listing Rules and

which must contain undertakings that:

• transactions and arrangements with the controlling

shareholder (and/or any of its associates) will be conducted

atarm’s length and on normal commercial terms;

The directors of Associated British Foods plc present their

report for the 52 weeks ended 16 September 2023, in

accordance with section 415 of the Companies Act 2006.

TheFinancial Conduct Authority’s Disclosure Guidance and

Transparency Rules and 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 119 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 39);

• greenhouse gas emissions and energy consumption

(page 52 to 54);

• the Board of Directors (pages 80 and 81);

• information on our employees including disabled persons

(pages 50 and 51; 110);

• information on how the directors keep employees informed

on and involved with the Company’s performance (pages 40;

84 to 85);

• 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 40 to 45; 50 and 51;

84to 85);

• 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 40 to 55); and

• the Corporate Governance Statement (pages 78 to 115).

Results and dividends

The consolidated income statement is on page 128. Proﬁt for

the ﬁnancial year attributable to equity shareholders amounted

to £1,044m.

The directors recommend a final dividend of 33.1p per ordinary

share to be paid, subject to shareholder approval, on 12 January

2024. Together with the interim dividend of 14.2p per share paid

on 7 July 2023, this amounts to 47.3p for the year. See page

147 for the note on dividends. In addition, a special dividend

of12.7p is proposed by the directors as an interim dividend

which will also be paid on 12 January 2024 to holders of

ordinary shares on the register at the close of business on

15 December 2023. 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 7 November 2023 appear

onpage 87.

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.

116 Associated British Foods plc Annual Report 2023

• neither the controlling shareholder nor any of its associates

will take any action that would have the effect of preventing

the listed company from complying with its obligations under

the Listing Rules; and

• neither the controlling shareholder nor any of its associates

will propose or procure the proposal of a shareholder

resolution which is intended or appears to be intended to

circumvent the proper application of the Listing Rules.

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 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 16 September 2023, had a combined

interest in approximately 59.8% of the Company’s voting rights.

The Board conﬁrms that, in accordance with the Listing Rules,

on 14 November 2014 the Company entered into a relationship

agreement with Wittington and the trustees of the Foundation

containing the required undertakings (the ‘Relationship

Agreement’ as most recently amended and restated on

3 November 2022).

Under the terms of the Relationship Agreement, Wittington

hasagreed to procure compliance with the undertakings by the

other individuals who are treated as controlling shareholders

(the ‘Non-signing Controlling Shareholders’). The Board conﬁrms

that, during the period under review:

• the Company has complied with the independence provisions

included in the Relationship Agreement;

• so far as the Company is aware, the independence provisions

included in the Relationship Agreement have been complied

with by the controlling shareholders and their associates; and

• so far as the Company is aware, the procurement obligation

included in the Relationship Agreement as regards

compliance with the independence provisions by the

Non-signing Controlling Shareholders and their associates,

has been complied with by Wittington.

The Company is a premium listed company on the London

Stock Exchange and, under the Listing Rules, is required to

carryon an independent business as its main activity.

Major interests in shares

During the period under review, and up until 3 November 2023,

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 431,515,108 56.1 4 September 2023

Further details of the Company’s controlling shareholders for

the purpose of the Listing Rules who, as at 16 September 2023,

had a combined interest in approximately 59.8% 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 162.

The Company has one class of share capital: ordinary shares

of5

p. 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 9 December 2022, 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 8 December 2023. No such shares have been issued.

Thedirectors propose to renew this authority at the 2023 AGM

for the forthcoming year.

A further special resolution passed at the 2022 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 2023 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 2023 AGM for the forthcoming year.

On 9 November 2022, the Company commenced a share

buyback programme in order to reduce the capital of the

Company. That buyback programme completed on 27 October

2023, the Company having purchased 26,478,215 of its ordinary

shares of 5

p (being 3.3% ofcalled-up share capital) for a

total consideration of £499,999,929. Allsuch shares were

subsequently cancelled. Further details ofthe Company’s share

capital are set out on page 162.

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.

117Associated British Foods plc Annual Report 2023

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 2028, 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;

• on 16 February 2022, the Company issued £400m 2.5 per

cent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;

• £81m (approximate sterling equivalent) of private placement

notes are in issue to institutional investors. In the event of

achange of control of the Company, the Company is obliged

to make an offer of immediate repayment to the remaining

note holders; and

• cross-currency swaps totalling $100m are in place to swap

allof the private placement debt denominated in US dollars

toeuros. In the event of a change of control of the Company,

the agreement contains a typical ‘Credit Event Upon Merger’

termination event which permits the counterparty

toterminate the agreement and all transactions under it.

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 a subsidiary of the Company paid costs totalling

approximately £3,150 during the year for attendance of

employees 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.

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 166.

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 Roal joint venture

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 (see further details on page 25) 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 120 to 127.

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 8 December 2023 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

7 November 2023

Associated British Foods plc

Registered ofﬁce:

Weston Centre

10 Grosvenor Street

London W1K 4QY

Company No. 293262

DIRECTORS’ REPORT CONTINUED

118 Associated British Foods plc Annual Report 2023

Statement of directors’ responsibilities

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 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

7 November 2023

119Associated British Foods plc Annual Report 2023

INDEPENDENT AUDITOR’S REPORT

Independent Auditor’s Report to the

members of Associated British Foods plc

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16 September 2023 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 16 September 2023 which comprise:

Group Parent company

Consolidated balance sheet as

at16 September 2023

Balance sheet as at

16 September 2023

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 a

summary of significant

accounting policies

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

asummary of significant

accountingpolicies

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 rising costs on the Group

and to reflect these in the Group’s forecasts for the going

concern period until 1 March 2025;

• Analysing the historical accuracy of forecasting by comparing

management’s forecasts to actual results, both for 2023

and2022 and through the subsequent events 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 77, assessing whether there are

any other scenarios, which should be considered through

reference to the Groups principal risks, and assessing

whether the quantum of the impact of the downside scenario

in the going concern period was sufficiently severe whilst

remaining plausible;

• Evaluating the Group’s ability to undertake mitigating actions

should it experience a severe downside scenario, considering

likely achievability of both timing and quantum;

• Testing the clerical accuracy of the model used to prepare

theGroup’s going concern assessment;

• Reperforming the reverse stress test to establish the

increases in input costs and the related impact on the cash

flows that could lead to a loss of liquidity 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.

120 Associated British Foods plc Annual Report 2023

We observed that the Group achieved the forecasts that it

wastargeting in 2023. 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.

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 until 1 March 2025.

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 101 components

andaudit procedures on specific balances

fora further 19 components

• The components where we performed full

orspecific audit procedures accounted for

88% of adjusted profit before taxation,

87%of revenue and 86% of total assets

Key audit

matters

• Assessment of the carrying value of goodwill,

other intangible assets, property, plant and

equipment and right-of-use assets

• Taxation provisions

• Revenue recognition, including the risk

ofmanagement override

Materiality • We used a Group materiality of £66m

whichrepresents 4.5% 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

consolidated financial statements, and to ensure we had

adequate quantitative coverage of significant accounts in the

financial statements, ofthe 517 reporting components of the

Group, we selected 120components, which represent the

principal business units within the Group.

Of the 120 components selected, we performed an audit

ofthecomplete financial information of 101 components

(‘fullscope components’) which were selected based on their

size or risk characteristics. For the remaining 19 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 88% (2022 – 90%) of the Group’s

adjusted profit before taxation, 87% (2022 – 88%) of the

Group’s revenue and 86% (2022 – 87%) of the Group’s total

assets. Forthe current period, the full scope components

contributed 79% (2022 – 80%) of the Group’s adjusted profit

before taxation, 84% (2022 – 84%) of the Group’s revenue

and83% (2022 – 83%) of the Group’s total assets. The specific

scope components contributed 9% (2022 – 10%) of the Group’s

adjusted profit before taxation, 3% (2022 – 4%) of the Group’s

revenue and 3%(2022 – 4%) 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 397 components that together represent

12%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.

121Associated British Foods plc Annual Report 2023

INDEPENDENT AUDITOR’S REPORT CONTINUED

The charts below illustrate the coverage obtained from the work performed by our audit teams.

These are explained on pages 56 to 57 in the Task Force for

Climate related Financial Disclosures and on pages 74 to 75

inthe principal risks and uncertainties, which form part

ofthe‘Other information’, ratherthan the audited financial

statements. Our procedures on these 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.

As explained in these disclosures, governmental and societal

responses to climate change risks are still developing, and are

interdependent upon each other, and consequently financial

statements cannot capture all possible future outcomes as

these are not yet known. The degree of certainty of these

changes may also mean that they cannot be taken into account

when determining asset and liability valuations and the timing

offuture cash flows under the requirements of UK adopted

international accounting standards. The scenarios assessed

byAssociated British Foods plc do not lead toa need

forreasonably possible change disclosures related

toclimatechange.

Our audit effort in considering climate change was focused on

evaluating management’s assessment of the impact of climate

risk, physical and transition, and ensuring that the effects

ofmaterial climate risks disclosed on pages 74 to 75 have been

appropriately reflected in asset values and associated

disclosures where values are determined through or assessed

by modelling future cashflows, being goodwill, other intangible

assets, property, plantand equipment and right-of-use assets.

Details ofour procedures and findings on the carrying value of

goodwill, other intangible assets, property, plant and equipment

and right-of-use assets are included in our key audit matters

below. We also challenged the Directors’ considerations of

climate change intheir assessment of going concern and

viability and associated disclosures.

Whilst the Group has stated its commitment to the aspirations

of the Paris Agreement to achieve net zero emissions by

2050,the Group is currently unable to determine the full future

economic impact on its business model, operational plans

andcustomers to achieve this and therefore, thepotential

impacts are not fully incorporated in these financialstatements.

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 101 full scope

components, audit procedures were performed on 32 of these

directly by the Group audit team and 69 by component audit

teams. For the 19 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our components. Our physical visits included the senior

statutory auditor visiting Ireland and Australia and other senior

members of the Group audit team visiting South Africa, India,

Italy and Poland. For the alternative oversight procedures, we

used video technology to meet with our component team to

discuss and direct their audit approach, reviewed key working

papers using our global audit software and understood the

significant audit findings in response to the risk areas including

asset impairment, tax provisions and revenue recognition.

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Grouplevel, gave us appropriate

evidence for our opinion ontheconsolidatedfinancial

statements.

Climate change

There has been increasing interest from stakeholders as to

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the 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.

Full scope components

Specific scope components

Other procedures

79%

12%

Full scope components

Specific scope components

Other procedures

84%

13%

Full scope components

Specific scope components

Other procedures

83%

14%

Adjusted profit before taxation Revenue Total assets

122 Associated British Foods plc Annual Report 2023

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.

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,

right-of-use assets and assets held

for sale (2023 – £9,986m;

2022–£9,968m)

The Group has significant carrying

amounts of goodwill, other intangible

assets, property, plant and equipment

and right-of-use assets. The impairment

tests covered the Don business

(carryingvalue £154m), Jordans Dorset

Ryvita (‘JDR’) (£137m) andAB Mauri

(£937m).

During the year, impairments have been

recognised against the Don business

(£41m).

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.

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 or loss

ondisposal that has not been recognised

by management.

The significant improvement in

performance in AB Mauri in 2023 has

resulted in the risk of impairment of the

carrying value of that CGU reducing.

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.

We understood the methodology applied by management

inperforming its impairment test for each of the relevant

CGUs, groups of CGUs or disposal groups and walked

through the controls over the process, but did not test the

operating effectiveness of them.

For CGUs where there were indicators of impairment,

including the three CGUs or groups of 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 Don, we challenged management’s key assumptions

within the impairment model for optimism, benchmarking

against historical trends and external market data. We

tested management’s methodology over the remaining

impairment allocation basis and concur that the allocation

is in line with IAS 36;

• For JDR, we critically challenged and evaluated, the

keyassumptions adopted in management's forecasts.

Whereassumptions in our opinion could not be supported

or appeared, in our view, optimistic, these were risk

adjusted and/or removed. We calculated the breakeven

level of operating profit required in the perpetuity cash

flows and assessed this in the context of the historical

performance of JDR;

• For AB Mauri, we challenged the assumptions in the

model, focusing on the cash flow forecasts for the largest

regions. Analysing the non-key and the negative business

units, along with reviewing the contingencies included

inthe model. We have assessed the overall adjusted

operating profit growth in the key business units and

compared to third party market rates. We have assessed

the overall division growth against the global growth

rates;

• In conjunction with our valuation specialists, assessing

the discount rates used by determining independently

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.

We concluded that it was

appropriate to record an

impairment for Don, that

the impairment recorded

was not materially

misstated and that the

impairment was

appropriately disclosed as

an exceptional item.

For JDR and AB

Mauri,weagreed with

management's conclusion

that noimpairments

wererequired.

Assets relating to Don and

JDR 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.

123Associated British Foods plc Annual Report 2023

INDEPENDENT AUDITOR’S REPORT CONTINUED

Risk Our response to the risk

Key observations

communicated to the

Audit Committee

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

(pages 93 to 99); accounting policies

(pages 133 to 138); accounting estimates

and judgements (page 139); and notes 8,

9 and 10 to the consolidated financial

statements (pages 148 to 153).

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 and 10 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.

For AB Mauri, the audit procedures performed to address

this risk were performed by the Group audit team. The JDR

and Don CGUs were subject to full scope audit procedures

by the respective component teams and reviewed by the

Group team.

Tax provisions for uncertain tax

positions £55m (2022 – £102m)

included within the income tax

liability of £109m (2022 – £160m)

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

(pages 93 to 99); accounting policies

(pages 133 to 138); accounting estimates

and judgements (page 139); and note 5

to the consolidated financial statements

(pages 146 and 147).

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.

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.

124 Associated British Foods plc Annual Report 2023

Risk Our response to the risk

Key observations

communicated to the

Audit Committee

Revenue recognition, including

therisk of management override

(2023 – £19,750m; 2022–£16,997m)

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. Approximately 3% (2022

– 3%) of the Group’s gross revenue is

subject to such arrangements.

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

134) and note 1 to the consolidated

financial statements (pages 140 to 143).

We understood the revenue recognition policies and how

they are applied, including the relevant controls, but 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 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 £17.1bn (87%) (2022 – £14.8bn

(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 82 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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 £66m

(2022–£65m), which is 4.5% (2022 – 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

materiality based on this number.

We determined materiality for the parent company to be £49m

(2022 – £46m), which is 2% (2022 – 2%) of equity.

Performance materiality

The application of materiality is 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%

(2022 – 75%) of our planning materiality, namely £50m

(2022–£49m).

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£1m to £20m (2022 – £1m to £20m).

125Associated British Foods plc Annual Report 2023

INDEPENDENT AUDITOR’S REPORT CONTINUED

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

(2022– £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 119, 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 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 pages 76 and 77;

• 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 76 and 77;

• Directors’ 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 76 and 77;

• Directors’ statement on fair, balanced and understandable

setout on page 94;

• Board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out

onpage 95;

• The section of the Annual Report that describes the review

ofeffectiveness of risk management and internal control

systems set out on page 95; and

• The section describing the work of the Audit Committee set

out on pages 93 to 99.

Responsibilities of directors

As explained more fully in the Directors’ Responsibilities

Statement set out on pages 100 to 115, 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.

126 Associated British Foods plc Annual Report 2023

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 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 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. 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 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 https://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 eight years, covering the 52

weeks ending 17 September 2016 until the 52 weeks ending

16 September 2023. 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

7 November 2023

127Associated British Foods plc Annual Report 2023

Consolidated income statement

for the 52 weeks ended 16 September 2023

Continuing operations Note

		2023	2022
		£m	£m
Revenue	1	19,750	16,997
Operating costs before exceptional items	2	(18,410)	(15,729)
Exceptional items	2	(109)	(206)
		1,231	1,062
Share of profit after tax from joint ventures and associates	11	124	109
Profits less losses on disposal of non-current assets		28	7
Operating profit		1,383	1,178
Adjusted operating profit	1	1,513	1,435
Profits less losses on disposal of non-current assets		28	7
Amortisation of non-operating intangibles	8	(41)	(47)
Acquired inventory fair value adjustments	2	(3)	(5)
Transaction costs	2	(5)	(6)
Exceptional items	2	(109)	(206)
Profits less losses on sale and closure of businesses	23	(3)	(23)
Profit before interest		1,380	1,155
Finance income	4	48	19
Finance expense	4	(128)	(111)
Other financial income	4	40	13
Profit before taxation		1,340	1,076
Adjusted profit before taxation		1,473	1,356
Profits less losses on disposal of non-current assets		28	7
Amortisation of non-operating intangibles	8	(41)	(47)
Acquired inventory fair value adjustments	2	(3)	(5)
Transaction costs	2	(5)	(6)
Exceptional items	2	(109)	(206)
Profits less losses on sale and closure of businesses	23	(3)	(23)
Taxation – UK (excluding tax on exceptional items)		(40)	(50)
– UK (on exceptional items)		–	3
– Overseas (excluding tax on exceptional items)		(300)	(243)
– Overseas (on exceptional items)		68	(66)
	5	(272)	(356)
Profit for the period		1,068	720
Attributable to Equity shareholders		1,044	700
Non-controlling interests		24	20
Profit for the period		1,068	720
Basic and diluted earnings per ordinary share (pence)	7	134.2	88.6
Dividends per share paid and proposed for the period (pence)	6	47.3	43.7
Special dividend per share proposed for the period (pence)	6	12.7	nil

FINANCIAL STATEMENTS

128 Associated British Foods plc Annual Report 2023

Note

		2023	2022
		£m	£m
Profit for the period recognised in the income statement		1,068	720
Other comprehensive income
Remeasurements of defined benefit schemes	12	(7)	821
Deferred tax associated with defined benefit schemes		4	(198)
Items that will not be reclassified to profit or loss		(3)	623
Effect of movements in foreign exchange		(470)	440
Net gain/(loss) on hedge of net investment in foreign subsidiaries		1	(1)
Net gain on other investments held at fair value through other comprehensive income		–	4
Deferred tax associated with movements in foreign exchange		(5)	–
Current tax associated with movements in foreign exchange		6	–
Movement in cash flow hedging position		(260)	419
Deferred tax associated with movement in cash flow hedging position		40	(28)
Deferred tax associated with movement in other investments		–	(1)
Share of other comprehensive (loss)/income of joint ventures and associates		(18)	28
Effect of hyperinflationary economies		40	46
Items that are or may be subsequently reclassified to profit or loss		(666)	907
Other comprehensive (loss)/income for the period		(669)	1,530
Total comprehensive income for the period		399	2,250
Attributable to Equity shareholders		397	2,219
Non-controlling interests		2	31
Total comprehensive income for the period		399	2,250

Consolidated statement of comprehensive income

for the 52 weeks ended 16 September 2023

129Associated British Foods plc Annual Report 2023

Consolidated balance sheet

at 16 September 2023

Note

		2023	2022
		£m	£m
Non-current assets
Intangible assets	8	1,870	1,868
Property, plant and equipment	9	5,766	5,599
Right-of-use assets	10	2,350	2,456
Investments in joint ventures	11	303	301
Investments in associates	11	91	85
Employee benefits assets	12	1,446	1,393
Income tax	5	23	23
Deferred tax assets	13	193	158
Other receivables	14	63	58
Total non-current assets		12,105	11,941
Current assets
Assets classified as held for sale	15	–	45
Inventories	16	3,207	3,259
Biological assets	17	99	105
Trade and other receivables	14	1,778	1,758
Derivative assets	26	96	475
Current asset investments	25	–	4
Income tax		102	67
Cash and cash equivalents	18	1,457	2,121
Total current assets		6,739	7,834
Total assets		18,844	19,775
Current liabilities
Liabilities classified as held for sale	15	–	(14)
Lease liabilities	10	(335)	(316)
Loans and overdrafts	19	(168)	(157)
Trade and other payables	20	(2,953)	(3,114)
Derivative liabilities	26	(69)	(205)
Income tax		(109)	(160)
Provisions	21	(55)	(87)
Total current liabilities		(3,689)	(4,053)
Non-current liabilities
Lease liabilities	10	(2,825)	(2,936)
Loans	19	(394)	(480)
Provisions	21	(48)	(26)
Deferred tax liabilities	13	(626)	(647)
Employee benefits liabilities	12	(69)	(79)
Total non-current liabilities		(3,962)	(4,168)
Total liabilities		(7,651)	(8,221)
Net assets		11,193	11,554
Equity
Issued capital	22	44	45
Other reserves	22	179	178
Translation reserve	22	(42)	422
Hedging reserve	22	2	154
Retained earnings		10,910	10,649
Total equity attributable to equity shareholders		11,093	11,448
Non-controlling interests		100	106
Total equity		11,193	11,554

The financial statements on pages 128 to 193 were approved by the Board of Directors on 7 November 2023 and were signed

onitsbehalf by:

Michael McLintock Eoin Tonge

Chairman Finance Director

FINANCIAL STATEMENTS

130 Associated British Foods plc Annual Report 2023

Consolidated cash flow statement

for the 52 weeks ended 16 September 2023

Note

		2023	2022
		£m	£m
Cash flow from operating activities
Profit before taxation		1,340	1,076
Profits less losses on disposal of non-current assets		(28)	(7)
Profits less losses on sale and closure of businesses		3	23
Transaction costs	2	5	6
Finance income	4	(48)	(19)
Finance expense	4	128	111
Other financial income	4	(40)	(13)
Share of profit after tax from joint ventures and associates	11	(124)	(109)
Amortisation		82	68
Depreciation (including of right-of-use assets)		804	802
Exceptional items	2	109	206
Acquired inventory fair value adjustments		3	5
Effect of hyperinflationary economies		14	16
Net change in the fair value of current biological assets		(11)	(8)
Share-based payment expense	24	18	19
Pension costs less contributions		(8)	7
Increase in inventories		(94)	(953)
Increase in receivables		(107)	(288)
(Decrease)/increase in payables		(15)	512
Purchases less sales of current biological assets		(9)	(4)
(Decrease)/increase in provisions		(27)	7
Cash generated from operations		1,995	1,457
Income taxes paid		(341)	(304)
Net cash generated from operating activities		1,654	1,153
Cash flow from investing activities
Dividends received from joint ventures and associates	11	107	93
Purchase of property, plant and equipment		(997)	(680)
Purchase of intangibles		(76)	(89)
Lease incentives received		62	46
Sale of property, plant and equipment		48	30
Purchase of subsidiaries, joint ventures and associates	23	(94)	(154)
Sale of subsidiaries, joint ventures and associates		4	–
Purchase of other investments		(4)	(7)
Interest received		44	17
Net cash used in investing activities		(906)	(744)
Cash flow from financing activities
Dividends paid to non-controlling interests		(7)	(8)
Dividends paid to equity shareholders	6	(345)	(380)
Interest paid		(118)	(114)
Repayment of lease liabilities	25	(308)	(321)
Decrease in short-term loans	25	(13)	(12)
Increase in long-term loans	25	–	178
Decrease in current asset investments	25	3	30
Share buyback		(448)	–
Movement from changes in own shares held		(46)	(50)
Net cash used in financing activities		(1,282)	(677)
Net decrease in cash and cash equivalents	25	(534)	(268)
Cash and cash equivalents at the beginning of the period		1,995	2,189
Effect of movements in foreign exchange		(73)	74
Cash and cash equivalents at the end of the period	25	1,388	1,995

131Associated British Foods plc Annual Report 2023

Consolidated statement of changes in equity

for the 52 weeks ended 16 September 2023

			Attributable to equity shareholders
								Non-
		Issued	Other	Translation	Hedging	Retained		controlling	Total
		capital	reserves	reserve	reserve	earnings	Total	interests	equity
	Note	£m	£m	£m	£m	£m	£m	£m	£m
Balance as at 18 September 2021		45	175	(34)	43	9,692	9,921	83	10,004
Total comprehensive income
Profit for the period recognised in the income statement		–	–	–	–	700	700	20	720
Remeasurements of defined benefit schemes	12	–	–	–	–	821	821	–	821
Deferred tax associated with defined benefit schemes		–	–	–	–	(198)	(198)	–	(198)
Items that will not be reclassified to profit or loss		–	–	–	–	623	623	–	623
Effect of movements in foreign exchange		–	–	429	–	–	429	11	440
Net loss on hedge of net investment in foreign subsidiaries		–	–	(1)	–	–	(1)	–	(1)
Net gain on other investments held at fair value through other comprehensive income		–	4	–	–	–	4	–	4
Movement in cash flow hedging position		–	–	–	419	–	419	–	419
Deferred tax associated with movement in cash flow
hedging position		–	–	–	(28)	–	(28)	–	(28)
Deferred tax associated with movement in other investments		–	(1)	–	–	–	(1)	–	(1)
Share of other comprehensive income of joint ventures
and associates		–	–	28	–	–	28	–	28
Effect of hyperinflationary economies		–	–	–	–	46	46	–	46
Items that are or may be subsequently reclassified to profit or loss		–	3	456	391	46	896	11	907
Other comprehensive income		–	3	456	391	669	1,519	11	1,530
Total comprehensive income		–	3	456	391	1,369	2,219	31	2,250
Inventory cash flow hedge movements
Amounts transferred to cost of inventory		–	–	–	(280)	–	(280)	–	(280)
Total inventory cash flow hedge movements		–	–	–	(280)	–	(280)	–	(280)
Transactions with owners
Dividends paid to equity shareholders	6	–	–	–	–	(380)	(380)	–	(380)
Net movement in own shares held		–	–	–	–	(31)	(31)	–	(31)
Deferred tax associated with share-based payments		–	–	–	–	(1)	(1)	–	(1)
Dividends paid to non-controlling interests		–	–	–	–	–	–	(8)	(8)
Total transactions with owners		–	–	–	–	(412)	(412)	(8)	(420)
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	12	–	–	–	–	(7)	(7)	–	(7)
Deferred tax associated with defined benefit schemes		–	–	–	–	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		–	–	–	–	(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

132 Associated British Foods plc Annual Report 2023

Associated British Foods plc is domiciled in the United Kingdom.

The Company’s consolidated financial statements for the

52weeks ended 16 September 2023 comprise those of the 52 weeks ended 16 September 2023 comprise those of the

Company, its subsidiaries and its interest in joint ventures

andassociates.and associates.

The directors authorised the consolidated financial statements

for issue on 7 November 2023. 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 194 to 200.on pages 194 to 200.

Basis of preparation

The Company presents its consolidated financial statements

insterling, rounded to the nearest million, prepared on the 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 are based on experience. Actual results may differ from

theseestimates.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 139.

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 16 September 2023

(2022 – 52 weeks ended 17 September 2022).

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

16September.16 September.

The Group’s business activities, together with factors likely

toaffect its future development, performance and position are to affect its future development, performance and position are

setout in the Strategic Report on pages 1 to 77. The financial set out in the Strategic Report on pages 1 to 77. The financial

position of the Group, its cash flows, liquidity position and

borrowing facilities are described in the Financial review

onpages 36 to 39.on pages 36 to 39.

In addition, the Principal risks and uncertainties on pages 68 to

77 and note 26 on pages 166 to 177 provide details of the

Group’s policy on managing its financial and commodity risks.

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 56 to 67 the context of the TCFD disclosures set out on pages 56 to 67

andour sustainability targets. These considerations did not have and our 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 1 March 2025 nor the viability

ofthe Group over the next three years.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, 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 as the future impacts depend on factors outside of the Group’s

control, which are not all currently known.

Going concern

After making enquiries, the directors have 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. in preparing the consolidated financial statements.

The forecast for the going concern assessment period to

1 March 2025 has been updated for the business’s latest

trading in October and is the best estimate of cashflow in the

period. Having reviewed this forecast and having applied a

downside sensitivity analysis and performed a reverse stress

test, the directors consider it a remote possibility that the

financial headroom could be exhausted.

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 1.0x

and the Group had total cash of £1.5bn and an undrawn

committed Revolving Credit Facility of £1.5bn.

In March 2023, S&P Global Ratings reaffirmed their assignment

to the Group of an ‘A’ grade long-term issuer credit rating. The

Group’s funding basis is supported by the existing £400m public

bond due in 2034 furthermore the Group’s committed Revolving

Credit Facility is free of performance covenants and matures in

2028, with one 1-year extension option remaining (after the first

was utilised during the year). The $100m of outstanding private

placement notes are due in March 2024 after which point Group

funding will not be 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.

Significant accounting policies

for the 52 weeks ended 16 September 2023

133Associated British Foods plc Annual Report 2023

As a downside scenario the directors considered the adverse

scenario in which inflationary costs are not fully recovered, there

are adverse foreign exchange impacts and there is a global

recession, reducing demand for goods further than the base levels

forecast. This downside scenario was modelled without taking

any mitigating actions within their control. Under this downside

scenario the Group forecasts liquidity throughout theperiod.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, cost

inflation would need to exceed £1.9bn 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 long is considered remote for two reasons. Firstly, over such a long

period, management could take substantial mitigating actions,

such as reviewing pricing, 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.

Basis of consolidation

These consolidated financial statements include the results

ofthe Company and its subsidiaries from the date that control 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.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, 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 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 a joint venture or associate, the carrying amount is reduced

tozero and recognition of further losses is discontinued except 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.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 of the date of acquisition and, where significant, reflects them

by restatement of the comparative period in which the

acquisitionoccurred.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 to fair value at the date of acquisition, with any resulting gain

orloss taken to the income statement.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 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.expenses as incurred.

The Group measures contingent consideration at fair value

atthe date of acquisition, classified as a liability or equity at the date of acquisition, classified as a liability or equity

(usuallyas a liability).(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.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 qualifying items of property, plant and equipment as part

oftheircost.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.

Significant accounting policies

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

134 Associated British Foods plc Annual Report 2023

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 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 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 of scheme assets and the present value of scheme liabilities

ona scheme-by-scheme basis as net pension assets (to the 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.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.is as a result of not meeting a market condition.

Income tax

Income tax on profit or loss for the period 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

for the year, using tax rates enacted or substantively enacted

during the period, 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; initial recognition

ofassets or liabilities affecting neither accounting nor taxable of assets or liabilities affecting neither accounting nor taxable

profit other than those acquired in a business combination; 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 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, 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, we have 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.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 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 finance lease

receivables due from a joint venture and minority shareholdings

in private companies. The Group accounts for finance lease

receivables in the same way as for trade and other receivables.

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 or loss previously recognised in other comprehensive income

isincluded directly in retained earnings, without recycling it to 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.

135Associated British Foods plc Annual Report 2023

Cash and cash equivalents

Cash and cash equivalents comprise bank and cash balances,

deposits and short-term investments with original maturities

ofthree months or less.of three months or less.

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 and commodity

contracts, futures, swaps and options. The Group does not

usederivatives for speculative purposes.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 the income statement unless the derivative is designated

inahedging relationship, when recognition of the change in in a hedging relationship, when recognition of the change in

fairvalue depends on the nature of the item being hedged.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 of 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 income in either the cost of hedging reserve (for the element

ofthe change in fair value relating to the currency spread) or of the change in fair value relating to the currency spread) or

inthe hedging reserve (for the remaining change in fair value). in the hedging reserve (for the remaining change in fair value).

Anyineffective portion is recognised immediately in the Any ineffective portion is recognised immediately in the

incomestatement.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 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 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.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 the cumulative associated gain or loss recognised in the hedging

reserve until the forecast transaction occurs. Gainsor losses reserve until the forecast transaction occurs. Gains or losses

onhedging instruments relating to an underlying exposure that on hedging instruments relating to an underlying exposure that

no longer exists are taken to theincome statement.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 agreements. The Group acquires operating intangible assets in

the ordinary course of business, typically including computer

software, landuse rights and emissions trading licences.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 134.

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 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 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 amounts 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 indicated 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.

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.of the other assets in the CGU on a pro rata basis.

Significant accounting policies

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

136 Associated British Foods plc Annual Report 2023

Calculation of 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 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 lives 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

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.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 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 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.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 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 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.

Lessor accounting

When subleasing assets, the Group assesses the sublease

classification with reference to the head lease right-of-use asset,

which considers, among other factors, whether the sublease

represents a majority of the remaining life of the headlease.represents a majority of the remaining life of the head lease.

The ratio of rental income to head lease rental payments is used

to determine how much of the right-of-use asset should be

derecognised, taking into account whether the sublease/head

lease are above or below market rate.

The Group records amounts due from lessees under finance

leases as a receivable at an amount equal to the net investment

in the lease, calculated using the incremental borrowing rate

atthe date of recognition. The Group recognises any difference at the date of recognition. The Group recognises any difference

between the derecognised right-of-use asset and the newly

recognised amounts due from lessees under finance leases

inthe income statement.in the income statement.

The Group recognises finance income over the lease term,

reflecting a constant periodic rate of return on the net

investment in the lease.

The Group recognises operating lease income as earned

onastraight-line basis over the lease term.on a straight-line basis over the lease term.

137Associated British Foods plc Annual Report 2023

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 for 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. For the

Group’s Argentinian operations this was 1 September 2018, and

for the Group’s Turkish operations this was 1 September 2021.

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 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 of inflation on holding monetary assets and liabilities

inlocalcurrency;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 16 September 2023 (ARS 433.88:£1;

TRL 33.45:£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 911.1316 at 31 August

2022 and 2044.2832 at 31 August 2023. The inflation index for

the year is therefore 2.244.

In Turkey, the TUIK index was 80.21 at 31 August 2022 and

58.94 at 31 August 2023. The inflation index for the year is

therefore 0.735.

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:

• Reference to the Conceptual Framework (Amendments

toIFRS 3)to IFRS 3)

• Property, Plant and Equipment: Proceeds before Intended

Use (Amendments to IAS 16)

• Onerous Contracts – Cost of Fulfilling a Contract

(Amendments to IAS 37)

• Annual Improvements to IFRS 2018–2020

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:

• IFRS 17 Insurance Contracts, Amendments to IFRS 17, Initial

Application of IFRS 17 and IFRS 9 – Comparative Information,

effective 2024 financial year

• Disclosure of Accounting policies (Amendments to IAS 1 and

IFRS Practice Statement 2), effective 2024 financial year

• Definition of Accounting Estimates (Amendments to IAS 8),

effective 2024 financial year

• Deferred Tax related to Assets and Liabilities arising from

aSingle Transaction (Amendments to IAS 12), effective 2024 a Single Transaction (Amendments to IAS 12), effective 2024

financial year

• Lease Liability in a Sale and Leaseback (Amendments to IFRS

16), effective 2024 financial year

• International Tax Reform – Pillar Two Model Rules

(Amendments to IAS 12), effective 2024 financial year

• Amendments to IAS 1 Presentation of Financial Statements,

effective 2024 financial year

• Supplier Finance Arrangements (Amendments to IAS 7 and

IFRS 7), effective 2025 financial year (not yet endorsed by

theUKEB)the UKEB)

• Amendments to IAS 21 The Effects of Changes in Foreign

Exchange Rates: Lack of Exchangeability, effective 2026

financial year (not yet endorsed by the UKEB)

Significant accounting policies

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

138 Associated British Foods plc Annual Report 2023

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 considered probable that sufficient taxable profits will be

available in the future. This involves a significant degree

ofestimation uncertainty.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 13.

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 16 September 2023,

principally relating to the UK defined benefit scheme, which

isseparately disclosed.is separately disclosed.

Accounting estimates and judgements

for the 52 weeks ended 16 September 2023

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 12, including associated

sensitivities.

Other areas of judgement and

accountingestimatesaccounting 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 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 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 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 was

2023 – £55m (2022 – £102m). The reduction in the provision

isdue to the conclusion of UK tax audits covering several is due to the conclusion of UK tax audits covering several

businesses and years. The majority of the remaining provisions

relate to transfer pricing risks across a number of jurisdictions

inwhich the Group has operations. Transfer pricing is a complex 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 applies 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 to any amounts provided, but the Group has concluded that this

is unlikely to have a material impact.

139Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

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.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:

Grocery

The manufacture of grocery products, including hot beverages, sugar and sweeteners, vegetable oils, balsamic vinegars, bread

andbaked goods, cereals, ethnic foods and meat products, which are sold to retail, wholesale and foodservice businesses.and baked goods, cereals, ethnic foods and meat products, which are sold to retail, wholesale and foodservice businesses.

Ingredients

The manufacture of bakers’ yeast, bakery ingredients, enzymes, lipids, yeast extracts and cereal specialities.

Agriculture

The manufacture of animal feeds and the provision of other products and services for the agriculture sector.

Sugar

The growing and processing of sugar beet and sugar cane for sale to industrial users and to Silver Spoon, which is included

intheGrocery segment.in the Grocery segment.

Retail

Buying and merchandising value clothing and accessories through the Primark and Penneys retail chains.

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.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

2023

£m

2022

£m

2023

£m

2022

£m

Operating segments

Grocery 4,198 3,735 448 399

Ingredients 2,157 1,827 214 159

Agriculture 1,840 1,722 41 47

Sugar 2,547 2,016 169 162

Retail 9,008 7,697 735 756

Central – – (94) (88)

19,750 16,997 1,513 1,435

Geographical information

United Kingdom 7,271 6,378 488 533

Europe & Africa 7,552 6,291 559 482

The Americas 2,420 2,028 353 279

Asia Pacific 2,507 2,300 113 141

19,750 16,997 1,513 1,435

FINANCIAL STATEMENTS

140 Associated British Foods plc Annual Report 2023

2023

Grocery

£m

Ingredients

£m

Agriculture

£m

Sugar

£m

Retail

£m

Central

£m

Total

£m

Revenue from continuing businesses 4,222 2,366 1,849 2,680 9,008 (375) 19,750

Internal revenue (24) (209) (9) (133) – 375 –

Revenue from external customers 4,198 2,157 1,840 2,547 9,008 – 19,750

Operating profit 402 201 32 119 717 (88) 1,383

Adjusted operating profit before joint ventures and associates 368 190 25 162 735 (94) 1,386

Share of adjusted profit after tax from joint ventures

andassociatesand associates 80 24 16 7 – – 127

Adjusted operating profit 448 214 41 169 735 (94) 1,513

Finance income 48 48

Finance expense (1) (1) – (3) (86) (37) (128)

Other financial income 40 40

Adjusted profit before taxation 447 213 41 166 649 (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 (41) – – (50) (18) – (109)

Profits less losses on sale and closure of businesses – 3 – (6) – – (3)

Profit before taxation 401 203 32 110 631 (37) 1,340

Taxation (272) (272)

Profit for the period 401 203 32 110 631 (309) 1,068

Segment assets (excluding joint ventures and associates) 2,759 2,011 640 2,179 7,530 110 15,229

Investments in joint ventures and associates 58 133 155 48 – – 394

Segment assets 2,817 2,144 795 2,227 7,530 110 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 (689) (407) (196) (501) (4,326) (166) (6,285)

Loans and overdrafts (562) (562)

Income tax (109) (109)

Deferred tax liabilities (626) (626)

Employee benefits liabilities (69) (69)

Net assets 2,128 1,737 599 1,726 3,204 1,799 11,193

Non-current asset additions 154 174 20 289 711 4 1,352

Depreciation (including of right-of-use assets) (114) (62) (19) (75) (526) (8) (804)

Amortisation (26) (15) (7) (3) (31) – (82)

141Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

1. Operating segments continued

2022

Grocery

£m

Ingredients

£m

Agriculture

£m

Sugar

£m

Retail

£m

Central

£m

Total

£m

Revenue from continuing businesses 3,736 1,996 1,728 2,097 7,697 (257) 16,997

Internal revenue (1) (169) (6) (81) – 257 –

Revenue from external customers 3,735 1,827 1,722 2,016 7,697 – 16,997

Operating profit 369 141 41 164 550 (87) 1,178

Adjusted operating profit before joint ventures and associates 328 142 31 154 756 (88) 1,323

Share of adjusted profit after tax from joint ventures

andassociatesand associates 71 17 16 8 – – 112

Adjusted operating profit 399 159 47 162 756 (88) 1,435

Finance income 19 19

Finance expense (1) (1) – (2) (76) (31) (111)

Other financial income 13 13

Adjusted profit before taxation 398 158 47 160 680 (87) 1,356

Profits less losses on disposal of non-current assets 4 – – 2 – 1 7

Amortisation of non-operating intangibles (32) (13) (2) – – – (47)

Acquired inventory fair value adjustments (1) (2) (2) – – – (5)

Transaction costs (1) (3) (2) – – – (6)

Exceptional items – – – – (206) – (206)

Profits less losses on sale and closure of businesses – (7) – (16) – – (23)

Profit before taxation 368 133 41 146 474 (86) 1,076

Taxation (356) (356)

Profit for the period 368 133 41 146 474 (442) 720

Segment assets (excluding joint ventures and associates) 2,876 2,017 597 2,422 7,570 136 15,618

Investments in joint ventures and associates 62 136 143 45 – – 386

Segment assets 2,938 2,153 740 2,467 7,570 136 16,004

Cash and cash equivalents 2,121 2,121

Current asset investments 4 4

Income tax 90 90

Deferred tax assets 163 163

Employee benefits assets 1,393 1,393

Segment liabilities (703) (450) (196) (616) (4,545) (188) (6,698)

Loans and overdrafts (637) (637)

Income tax (160) (160)

Deferred tax liabilities (647) (647)

Employee benefits liabilities (79) (79)

Net assets 2,235 1,703 544 1,851 3,025 2,196 11,554

Non-current asset additions 128 183 26 223 489 3 1,052

Depreciation (including of right-of-use assets) (109) (57) (17) (75) (532) (12) (802)

Amortisation (37) (14) (3) (3) (11) – (68)

Impairment of property, plant and equipment on sale and

closure of business – (11) – (19) – – (30)

FINANCIAL STATEMENTS

142 Associated British Foods plc Annual Report 2023

2023

United Kingdom

£m

Europe & Africa

£m

The Americas

£m

Asia Pacific

£m

Total

£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)

2022

United Kingdom

£m

Europe & Africa

£m

The Americas

£m

Asia Pacific

£m

Total

£m

Revenue from external customers 6,378 6,291 2,028 2,300 16,997

Segment assets 5,972 6,519 1,840 1,673 16,004

Non-current asset additions 285 487 177 103 1,052

Depreciation (including of right-of-use assets) (277) (392) (69) (64) (802)

Amortisation (25) (32) (5) (6) (68)

Impairment of property, plant and equipment on sale

andclosure of businessesand closure of businesses – – – (30) (30)

Acquired inventory fair value adjustments (2) (3) – – (5)

Transaction costs (2) (3) – (1) (6)

Exceptional items – (206) – – (206)

The Group’s operations in the following countries met the criteria for separate disclosure:

Revenue Non-current assets

2023

£m

2022

£m

2023

£m

2022

£m

Australia 1,407 1,232 541 623

Spain 1,836 1,545 651 650

United States 1,580 1,315 887 866

All segment disclosures are stated before reclassification of assets and liabilities classified as held for sale (see note 15).

143Associated British Foods plc Annual Report 2023

2. Operating costs

Note

2023

£m

2022

£m

Operating costs

Cost of sales (including amortisation of intangibles) 15,587 13,219

Distribution costs 1,603 1,465

Administration expenses 1,220 1,045

Exceptional items 109 206

18,519 15,935

Operating costs are stated after charging/(crediting):

Employee benefits expense 3 3,158 2,812

Amortisation of non-operating intangibles 8 38 44

Amortisation of operating intangibles 8 44 24

Acquired inventory fair value adjustments 3 5

Depreciation of property, plant and equipment 9 531 521

Depreciation of right-of-use assets and non-cash lease adjustments 10 273 281

Transaction costs 5 6

Effect of hyperinflationary economies 14 16

Other operating income (35) (25)

Research and development expenditure 42 37

Fair value gains on financial assets and liabilities held for trading (19) (23)

Fair value losses on financial assets and liabilities held for trading 22 17

Foreign exchange gains on operating activities (48) (36)

Foreign exchange losses on operating activities 62 37

Amortisation of non-operating intangibles of £41m (2022 – £47m) shown as adjusting item inthe income statement, include £3m Amortisation of non-operating intangibles of £41m (2022 – £47m) shown as adjusting item in the income statement, include £3m

(2022 – £3m) incurred by joint ventures, in addition tothe amounts shown above.(2022 – £3m) incurred by joint ventures, in addition to the amounts shown above.

Exceptional items

2023

The income statement this year included a non-cash exceptional impairment charge of £109m. In Grocery, the Don business has

beenadversely affected by inflationary pressures, a surplus supply of fresh pork in the market, labour constraints and equipment been adversely affected by inflationary pressures, a surplus supply of fresh pork in the market, labour constraints and equipment

reliability causing production shortfalls and additional transportation costs following the unforeseen liquidation of its distribution

partner. As a result, the Group has recognised impairment write-downs of £39m against property, plant and equipment, £1m against

right-of-use assets and £1m against intangible assets.

In the Sugar segment, north China recognised a £15m impairment write down against property, plant and equipment. This business

was classified as held for sale in the previous year, but the potential buyer withdrew their offer in the second half of the year. Due to

the severe flooding in Mozambique, the related damage to the sugar crop fields and the inability to plant for the foreseeable future,

Illovo Mozambique recognised a £25m impairment write-down against property, plant and equipment, £7m against current biological

assets, provided £2m for personnel costs and wrote down inventory by £1m.

In the Retail segment, the Group recognised £13m of exceptional impairment charges relating to the German store portfolio.

Thisprimarily relatedto stores impaired in the previous year after additional right-of-use assets were recognised due to rent indexation This primarily related to stores impaired in the previous year after additional right-of-use assets were recognised due to rent indexation

adjustments. TheGroup also recognised a £4m charge including a £3m exceptional impairment for the write-down of property, plant adjustments. The Group also recognised a £4m charge including a £3m exceptional impairment for the write-down of property, plant

and equipment for the right-sizing of four further German stores and £1m to write down afreehold store. and equipment for the right-sizing of four further German stores and £1m to write down a freehold store.

2022

The income statement included an exceptional impairment charge of £206m comprising non-cash writedowns of £72m against

property, plant andequipment and a write-down of £134m of right-of-use assets relating to the capitalisation of store leases property, plant and equipment and a write-down of £134m of right-of-use assets relating to the capitalisation of store leases

forPrimark. Also £49m of the £63m exceptional charge included in the Group's total tax charge for this financial year was the for Primark. Also £49m of the £63m exceptional charge included in the Group's total tax charge for this financial year was the

de-recognition of the deferred tax assets relating to Germany.

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

144 Associated British Foods plc Annual Report 2023

Auditor’s remuneration

2023

£m

2022

£m

Fees payable to the Company’s auditor and its associates in respect of the audit

Group audit of these financial statements 1.7 1.6

Audit of the Company’s subsidiaries’ financial statements 8.5 7.6

Total audit remuneration 10.2 9.2

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 0.6 0.5

Total non-audit remuneration 1.0 0.9

3. Employees

2023 2022

Average number of employees

United Kingdom 42,071 41,526

Europe & Africa 73,411 73,155

The Americas 6,769 6,102

Asia Pacific 11,236 11,490

133,487 132,273

Note

2023

£m

2022

£m

Employee benefits expense

Wages and salaries 2,657 2,350

Social security contributions 355 311

Contributions to defined contribution schemes 12 95 87

Charge for defined benefit schemes 12 33 45

Equity-settled share-based payment schemes 24 18 19

3,158 2,812

Details of directors’ remuneration, share incentives and pension entitlements are shown in the Remuneration Report on pages

100to115.100 to 115.

4. Interest and other financial income and expense

Note

2023

£m

2022

£m

Finance income

Cash and cash equivalents and current asset investments 48 19

48 19

Finance expense

Bank loans and overdrafts (23) (20)

All other borrowings (11) (8)

Lease liabilities 10 (91) (81)

Other payables (3) (2)

(128) (111)

Other financial income

Interest income on employee benefit scheme assets 12 185 84

Interest charge on employee benefit scheme liabilities 12 (123) (74)

Interest charge on irrecoverable surplus 12 (2) (1)

Net financial income from employee benefit schemes 60 9

Net foreign exchange (losses)/gains on financing activities (20) 4

Total other financial income 40 13

145Associated British Foods plc Annual Report 2023

5. Income tax expense

2023

£m

2022

£m

Current tax expense

UK – corporation tax at 21.8% (2022 – 19%) 26 44

Overseas – corporation tax 249 244

UK – over provided in prior periods (14) (12)

Overseas – under provided in prior periods 18 1

279 277

Deferred tax expense

UK deferred tax 54 18

Overseas deferred tax 28 72

UK – over provided in prior periods (26) (3)

Overseas – over provided in prior periods (63) (8)

(7) 79

Total income tax expense in the income statement 272 356

Reconciliation of effective tax rate

Profit before taxation 1,340 1,076

Less share of profit after tax from joint ventures and associates (124) (109)

Profit before taxation excluding share of profit after tax from joint ventures and associates 1,216 967

Nominal tax charge at UK corporation tax rate of 21.8% (2022 – 19%) 265 184

Effect of higher and lower tax rates on overseas earnings (16) 4

Effect of changes in tax rates on the income statement 5 2

Expenses not deductible for tax purposes 66 63

Disposal of assets covered by tax exemptions or unrecognised capital losses (2) 6

Deferred tax not recognised 39 120

Adjustments in respect of prior periods (85) (23)

272 356

Income tax recognised in equity

Deferred tax associated with defined benefit schemes (4) 198

Deferred tax associated with share-based payments (1) 1

Deferred tax associated with movement in cash flow hedging position (40) 28

Deferred tax associated with movements in foreign exchange 5 –

Current tax associated with movements in foreign exchange (6) –

Deferred tax associated with movement in other investments – 1

(46) 228

The UK corporation tax rate of 19% increased to 25% from 1 April 2023. The legislation to effect these changes was enacted before

the balance sheet date and UK deferred tax has been calculated accordingly.

In April 2019 the European Commission published its decision on the Group Financing Exemption in the UK’s controlled foreign

company legislation. The Commission found that the UK law did not comply with EU State Aid rules in certain circumstances.

TheGroup has arrangements that may be impacted by this decision as might other UK-based multinational groups that had financing The Group has arrangements that may be impacted by this decision as might other UK-based multinational groups that had financing

arrangements in line with the UK’s legislation in force at the time. The UK Government, the Group and a number of other UK

companies appealed against this decision to the General Court of the European Union (‘GCEU’). On 8 June 2022, the GCEU found

infavour of the Commission's original decision. As a result of this, in August 2022, the UK Government, the Group and various other in favour of the Commission's original decision. As a result of this, in August 2022, the UK Government, the Group and various other

UK companies appealed GCEU’s decision to the Court of Justice of the European Union. We have calculated our maximum potential

liability to be £26m (2022 – £26m), however we do not consider that any provision is required in respect of this amount based on our

current assessment of the issue. Following receipt of charging notices from HM Revenue & Customs (‘HMRC’), we made payments

to HMRC in 2021. Our assessment remains that no provision is required in respect of this amount. We will continue to consider the

impact of the Commission’s decision on the Group and the potential requirement to record a provision.

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

146 Associated British Foods plc Annual Report 2023

In the second half of last year a deferred tax asset arose mainly in relation to the charge taken for the impairment of property, plant

and equipment and store leases in Primark Germany. A significant proportion of this asset was deemed not to be recoverable and was

written off as an exceptional tax charge. Since then, further work has been undertaken to assess the amount of the deferred tax asset

that is expected to be recoverable. This work determined that the deferred tax asset at last year end was understated in error.

The directors believe that this understatement of the deferred tax asset was not material to the prior period financial statements.

Accordingly, an exceptional tax credit of £58m has been recognised in this year.

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 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.of the Group’s website.

Deferred taxation balances are analysed in note 13.

6. Dividends

2023

pence per share

2022

pence per share

2023

£m

2022

£m

2021 final and special – 34.3 – 271

2022 interim – 13.8 – 109

2022 final 29.9 – 235 –

2023 interim 14.2 – 110 –

44.1 48.1 345 380

The 2023 interim dividend was declared on 25 April 2023 and paid on 7 July 2023. 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 12.7p per share at an estimated cost of £97m.

The Board has proposed a final dividend of 33.1p per share at an estimated cost of £252m. The combined 2023 final and special

dividend of 45.8p, with an estimated value of £349m, will be paid on 12 January 2024 to shareholders on the register on

15 December2023.15 December 2023.

Dividends relating to the period including the special dividend were 60.0p per share totalling £459m (2022 – 43.7p per share

totalling£345m).totalling £345m).

7. Earnings per share

The calculation of basic earnings per share at 16 September 2023 was based on the net profit attributable to equity shareholders

of£1,044m (2022 – £700m), and a weighted average number of shares outstanding during the year of 778 million (2022 – 789 million). of £1,044m (2022 – £700m), and a weighted average number of shares outstanding during the year of 778 million (2022 – 789 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 share buyback on which the dividends are being waived. The weighted average number of shares has reduced as a result of our first share buyback

programme. In the year, we repurchased 23.7 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 £41m (2022 – £47m) shown as adjusting item below include £3m (2022 – £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 778 million (2022 – 789 million). There is no difference between basic and diluted earnings.

2023

£m

2022

£m

Adjusted profit for the period 1,103 1,034

Disposal of non-current assets 28 7

Sale and closure of businesses (3) (23)

Acquired inventory fair value adjustments (3) (5)

Transaction costs (5) (6)

Exceptional items (109) (206)

Tax effect on above adjustments 64 (63)

Amortisation of non-operating intangibles (41) (47)

Tax credit on non-operating intangibles amortisation and goodwill 10 9

Profit for the period attributable to equity shareholders 1,044 700

147Associated British Foods plc Annual Report 2023

7. Earnings per share continued

2023

pence

2022

pence

Adjusted earnings per share 141.8 131.1

Disposal of non-current assets 3.6 0.9

Sale and closure of businesses (0.4) (2.9)

Acquired inventory fair value adjustments (0.4) (0.6)

Transaction costs (0.6) (0.8)

Exceptional items (14.0) (26.1)

Tax effect on above adjustments 8.2 (8.0)

Amortisation of non-operating intangibles (5.3) (6.0)

Tax credit on non-operating intangibles amortisation and goodwill 1.3 1.0

Earnings per ordinary share 134.2 88.6

8. Intangible assets

Non-operating Operating

Goodwill

£m

Technology

£m

Brands

£m

Customer

relationships

£m

Grower

agreements

£m

Other

£m

Other

£m

Total

£m

Cost

At 18 September 2021 1,236 214 429 271 109 5 591 2,855

Acquisitions – externally purchased – – – – – – 138 138

Acquired through business combinations 85 49 33 6 – – – 173

Other disposals – – – – – – (49) (49)

Transfer to assets classified as held for sale – – – – – – (16) (16)

Effect of hyperinflationary economies 9 – – – – – – 9

Effect of movements in foreign exchange 84 22 26 13 1 – 33 179

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 from 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

Amortisation and impairment

At 18 September 2021 112 195 372 200 109 5 281 1,274

Amortisation for the year – 7 22 15 – – 24 68

Other disposals – – – – – – (1) (1)

Transfer to assets classified as held for sale – – – – – – (4) (4)

Effect of movements in foreign exchange 10 19 21 11 1 – 22 84

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 from 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

Net book value

At 18 September 2021 1,124 19 57 71 – – 310 1,581

At 17 September 2022 1,292 64 73 64 – – 375 1,868

At 16 September 2023 1,266 55 67 68 – – 414 1,870

In addition to the amounts disclosed above, there are £nil (2022 – £12m) intangible assets classified as assets held for sale (see note 15).

Amortisation of non-operating intangibles of £41m (2022 – £47m) shown as an adjusting item in the income statement includes

£3m(2022 – £3m) incurred by joint ventures in addition to the amounts shown above.£3m (2022 – £3m) incurred by joint ventures in addition to the amounts shown above.

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

148 Associated British Foods plc Annual Report 2023

Impairment

As at 16 September 2023, the consolidated balance sheet included goodwill of £1,266m (2022 – £1,292m). 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 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:

CGU or group of CGUs

Primary reporting

segment

Discount

rate

2023

£m

2022

£m

Acetum Grocery 13.5% 91 93

ACH Grocery 13.4% 193 208

AB Mauri Ingredients 12.8% 267 289

Twinings Ovaltine Grocery 13.6% 119 119

Illovo Sugar 23.7% 89 105

AB World Foods Grocery 12.5% 78 79

Other (not individually significant) Various Various 429 399

1,266 1,292

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 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.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 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.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 10.2% and 23.7% (2022 – between 9.8% and 23.4%).

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 0% to each of the CGUs or groups of CGUs that are significant to the total carrying amount of goodwill, were in a range between 0%

and6.0%, consistent with the inflation factors included in the discount rates applied (2022 – between 0% and 6.7%).and 6.0%, consistent with the inflation factors included in the discount rates applied (2022 – between 0% and 6.7%).

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 annualisation of price increases, completion of a number of margin Key drivers of the forecast improvement in performance include annualisation of price increases, completion of a number of margin

improvement initiatives, implementation of planned strategic initiatives and the completion of ongoing new product development.

Headroom was £59m on a CGU carrying value of £137m (2022 – headroom of £26m on a CGU carrying value at£147m). Headroom was £59m on a CGU carrying value of £137m (2022 – headroom of £26m on a CGU carrying value at £147m).

Thediscountrate used was 12.2% and would have to increase to more than 15.7% before value in use fell below the CGU carrying The discount rate used was 12.2% and would have to increase to more than 15.7% before value in use fell below the CGU carrying

value. Thelong-term growth rate applied into perpetuity was 2.8%, based on forecast industry growth of 2.5% for breakfast cereals value. The long-term growth rate applied into perpetuity was 2.8%, based on forecast industry growth of 2.5% for breakfast cereals

and3.3% for biscuits.and 3.3% for biscuits.

149Associated British Foods plc Annual Report 2023

9. Property, plant and equipment

Land and

buildings

£m

Plant and

machinery

£m

Fixtures and

fittings

£m

Assets under

construction

£m

Sugar cane

roots

£m

Total

£m

Cost

At 18 September 2021 2,707 4,008 4,019 440 92 11,266

Acquisitions – externally purchased 32 76 203 421 11 743

Acquired through business combinations 1 4 1 – – 6

Other disposals (14) (3) (17) – (4) (38)

Transfers from assets under construction 33 164 96 (293) – –

Transfer to assets classified as held for sale (32) (53) (2) – – (87)

Effect of movements in foreign exchange 98 223 119 37 6 483

At 17 September 2022 2,825 4,419 4,419 605 105 12,373

Acquisitions – externally purchased 20 86 431 452 16 1,005

Acquired through business combinations – 4 – – – 4

Other disposals (34) (57) (3) – (1) (95)

Transfers from assets under construction 35 191 87 (313) – –

Transfer from assets classified as held for sale 37 75 2 – – 114

Effect of movements in hyperinflation – 78 19 – – 97

Effect of movements in foreign exchange (99) (257) (84) (34) (19) (493)

At 16 September 2023 2,784 4,539 4,871 710 101 13,005

Depreciation and impairment

At 18 September 2021 759 2,827 2,343 – 51 5,980

Depreciation for the year 47 174 290 – 10 521

Impairment – – 72 – – 72

Impairment on sale and closure of business 11 19 – – – 30

Other disposals (1) – (17) – (4) (22)

Transfer to assets classified as held for sale (17) (60) (2) – – (79)

Effect of movements in foreign exchange 35 160 74 – 3 272

At 17 September 2022 834 3,120 2,760 – 60 6,774

Depreciation for the year 52 183 287 – 9 531

Impairment 22 56 3 – 2 83

Other disposals (22) (46) (3) – (1) (72)

Transfer from assets classified as held for sale 20 75 2 – – 97

Effect of movements in hyperinflation – 64 17 – – 81

Effect of movements in foreign exchange (37) (158) (50) – (10) (255)

At 16 September 2023 869 3,294 3,016 – 60 7,239

Net book value

At 18 September 2021 1,948 1,181 1,676 440 41 5,286

At 17 September 2022 1,991 1,299 1,659 605 45 5,599

At 16 September 2023 1,915 1,245 1,855 710 41 5,766

2023

£m

2022

£m

Capital expenditure commitments – contracted but not provided for 493 364

In addition to the amounts disclosed above, there are £nil (2022 – £18m) of property, plant and equipment classified as assets held for

sale (see note 15). Of this, £nil (2022 – £18m) is freehold land and buildings.

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

150 Associated British Foods plc Annual Report 2023

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, 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 using the best information available in the circumstances for valuing the CGU, and therefore falls into the Level 3 category of fair

valuemeasurement.value measurement.

In Grocery, the Australian Don business has been adversely affected by inflationary pressures, a surplus supply of fresh pork in

themarket, labour constraints and equipment reliability causing production shortfalls and additional transportation costs following the market, labour constraints and equipment reliability causing production shortfalls and additional transportation costs following

theunforeseen liquidation of its distribution partner. Management therefore performed a detailed impairment review and concluded the unforeseen liquidation of its distribution partner. Management therefore performed a detailed impairment review and concluded

thatan impairment of A$72m (£39m) should be recognised, A$62m (£34m) against plant and equipment and A$10m (£5m) against that an impairment of A$72m (£39m) should be recognised, A$62m (£34m) against plant and equipment and A$10m (£5m) against

buildings. The impairment model assumed long-term growth rates beyond the forecast period of 2.0% (2022 – 2.0%) and a discount

rate of 12.6% (2022 – 11.9%).

The sugar business in north China recognised a £15m write down against property, plant and equipment. This business was classified

as held for sale in the previous year, but the potential buyer withdrew their offer in the second half of the year.

Due to severe flooding in Mozambique, the related damage to the sugar crop fields and the inability to plant for the foreseeable future,

Illovo Mozambique recognised a £25m write-down against property, plant and equipment. Primark recognised a £3m write down

against fixtures and fittings for the right-sizing of four German stores and £1m to write down a freehold store.

10. 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

£m

Plant and machinery

£m

Fixtures and fittings

£m

Total

£m

Cost

At 18 September 2021 3,261 63 2 3,326

Additions 161 10 – 171

Lease incentives (46) – – (46)

Acquired through business combinations 8 – – 8

Other disposals (1) (1) (1) (3)

Other movements 12 2 – 14

Effect of movements in foreign exchange 107 2 – 109

At 17 September 2022 3,502 76 1 3,579

Additions 183 17 – 200

Lease incentives (53) – – (53)

Acquired through business combinations 1 – – 1

Other disposals (2) (4) – (6)

Other movements 80 5 – 85

Effect of movements in foreign exchange (72) (6) – (78)

At 16 September 2023 3,639 88 1 3,728

151Associated British Foods plc Annual Report 2023

10. Leases continued

Land and buildings

£m

Plant and machinery

£m

Fixtures and fittings

£m

Total

£m

Depreciation and impairment

At 18 September 2021 644 32 1 677

Depreciation for the year 263 18 – 281

Impairment 134 – – 134

Other disposals (1) (1) (1) (3)

Effect of movements in foreign exchange 33 1 – 34

At 17 September 2022 1,073 50 – 1,123

Depreciation for the year 257 16 – 273

Impairment 13 1 – 14

Other disposals (1) (4) – (5)

Effect of movements in foreign exchange (23) (4) – (27)

At 16 September 2023 1,319 59 – 1,378

Net book value

At 18 September 2021 2,617 31 1 2,649

At 17 September 2022 2,429 26 1 2,456

At 16 September 2023 2,320 29 1 2,350

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.of goodwill. See note 8 for further details.

In the year there was a £14m (2022 – £134m) impairment of right-of-use assets related to Primark and the Don business

(includedwithin exceptional items).(included within exceptional items).

Lease liabilities

Land and buildings

£m

Plant and machinery

£m

Fixtures and fittings

£m

Total

£m

Cost

At 18 September 2021 3,262 34 – 3,296

Additions 161 9 – 170

Interest expense relating to lease liabilities 80 1 – 81

Repayment of lease liabilities (385) (18) – (403)

Acquisition of businesses 8 – – 8

Other movements 14 2 – 16

Effect of movements in foreign exchange 97 1 – 98

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

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

152 Associated British Foods plc Annual Report 2023

2023

£m

2022

£m

Current 356 330

Non-current 2,825 2,936

3,181 3,266

Lease liabilities comprise £3,160m (2022 – £3,252m) capital payable and £21m (2022 – £14m) interest payable. The interest payable

isall current and disclosed within trade and other payables. Repayments comprise £308m (2022 – £321m) capital and £83m is all current and disclosed within trade and other payables. Repayments comprise £308m (2022 – £321m) capital and £83m

(2022–£82m) interest.(2022 – £82m) interest.

Other information relating to leases

The Group had the following expense relating to short-term leases and low-value leases:

2023

£m

2022

£m

Land and buildings 2 –

Plant and machinery 1 2

Fixtures and fittings – 1

3 3

The Group expensed £1m (2022 – £1m) of variable lease payments that do not form part of the lease liability. Cash outflows of £2m

(2022 – £4m) that do not form part of the lease liability are expected to be made in the next 12 months.

Rental receipts of £3m (2022 – £4m) were recognised relating to operating leases. The total of future minimum rental receipts expected

to be received is £43m (2022 – £36m). £10m (2022 – £11m) is due to be received in respect of sub-leasing right-of-use assets.

11. Investments in joint ventures and associates

Joint ventures

£m

Associates

£m

At 18 September 2021 278 60

Acquisitions 4 –

Profit for the period 90 19

Dividends received (88) (5)

Effect of movements in foreign exchange 17 11

At 17 September 2022 301 85

Acquisitions 9 –

Profit for the period 106 18

Dividends received (102) (5)

Effect of movements in foreign exchange (11) (7)

At 16 September 2023 303 91

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:and profit of joint ventures and associates:

Joint ventures Associates

2023

£m

2022

£m

2023

£m

2022

£m

Non-current assets 222 202 47 46

Current assets 541 641 500 427

Current liabilities (414) (475) (454) (386)

Non-current liabilities (67) (87) (3) (3)

Goodwill 25 20 1 1

Non-controlling interest (4) – – –

Net assets 303 301 91 85

Revenue 2,539 2,165 1,605 1,313

Profit for the period 106 90 18 19

153Associated British Foods plc Annual Report 2023

12. 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% (2022 – 90%) of the Group’s defined benefit scheme assets and 85% (2022 – 86%)

ofdefined benefit scheme liabilities. The Scheme is governed by a trustee board which is independent of the Group and which 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.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, 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 75% of inflation sensitivity and 76% of interest rate risk. It is intended to hedge 80% of total To date, the Scheme is fully hedged for 75% of inflation sensitivity and 76% of interest rate risk. It is intended to hedge 80% of total

exposure.

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 £47m in the UK and £48m overseas,

totalling £95m (2022 – UK £42m, overseas £45m, totalling £87m).

Actuarial assumptions

The principal actuarial assumptions for the Group’s defined benefit schemes at the year end were:

2023

Overseas

2022

Overseas

Discount rate 5.5 1-15.8 4.6 0.9-13.5

Inflation 2.7-3.4 0-17.4 2.6-3.4 0-55.0

Rate of increase in salaries 3.7-4.3 0-150.0 3.7-4.3 0-40.0

Rate of increase for pensions in payment 1.9-3.1 0-49.0 1.9-3.2 0-40.0

Rate of increase for pensions in deferment (where provided) 2.5-2.8 0-3.9 2.5-2.8 0-2.3

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.on the basis that the gap between the two measures is expected to remain stable in the long term.

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

154 Associated British Foods plc Annual Report 2023

The mortality assumptions used to value the UK defined benefit schemes in 2023 are derived from the S3 mortality tables with

improvements in line with the 2022 projection model prepared by the Continuous Mortality Investigation of the UK actuarial profession

(2022 – S3 mortality tables with improvements in line with the 2020 projection model), with a 0-year rating movement for males and

females (2022 – 0-year rating movement for males and females), both with a long-term trend of 1.75% (2022 – 1.5%). 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:

2023 2022

Life expectancy from age 65 (in years) Male Female Male Female

Member aged 65 in 2023 (2022) 21.8 24.2 22.1 24.3

Member aged 65 in 2043 (2042) 23.7 26.2 23.7 26.1

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.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 16 September 2023 is:

Change in assumption Impact on scheme liabilities

Discount rate decrease/increase by 0.1% increase/decrease by 1.2%

Inflation increase/decrease by 0.1% increase by 0.6%/decrease by 0.9%

Rate of real increase in salaries increase/decrease by 0.1% increase/decrease by 0.9%

Rate of mortality

members assumed to be one

year younger/older increase/decrease by 2.9%

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.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 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.

Balance sheet

2023 2022

£m

Overseas

£m

Total

£m

Overseas

£m

Total

£m

Equities 1,020 172 1,192 1,135 188 1,323

Government bonds 455 89 544 308 92 400

Corporate and other bonds 619 55 674 767 47 814

Property 314 36 350 398 37 435

Cash and other assets 1,145 57 1,202 1,126 53 1,179

Scheme assets 3,553 409 3,962 3,734 417 4,151

Scheme liabilities (2,176) (373) (2,549) (2,390) (405) (2,795)

Aggregate net surplus 1,377 36 1,413 1,344 12 1,356

Irrecoverable surplus* – (36) (36) – (42) (42)

Net pension asset/(liability) 1,377 – 1,377 1,344 (30) 1,314

Analysed as

Schemes in surplus 1,397 49 1,446 1,366 27 1,393

Schemes in deficit (20) (49) (69) (22) (57) (79)

1,377 – 1,377 1,344 (30) 1,314

Unfunded liability included in the present value of scheme

liabilities above (20) (32) (52) (22) (52) (74)

* 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.

155Associated British Foods plc Annual Report 2023

12. Employee entitlements continued

UK Scheme

Scheme assets include £64m (2022 – £50m) of derivative instruments, £409m (2022 – £441m) of corporate debt instruments and

£1,119m (2022 – £861m) of government debt.

Corporate and other bonds assets of £619m (2022 – £767m) include £235m (2022 – £248m) 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 £888m (2022 – £820m)

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 18% (2022 – 24%) in respect of active participants, 21% (2022 – 20%) for deferred

participants and 61% (2022 – 56%) 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 (2022 – 15 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.

Income statement

The charge to the income statement for employee benefit schemes comprises:

Note

2023

£m

2022

£m

Charged to operating profit:

Defined benefit schemes

Current service cost 3 (31) (45)

Past service cost 3 (2) –

Defined contribution schemes 3 (95) (87)

Total operating cost (128) (132)

Reported in other financial income:

Net interest income on the net pension asset 62 10

Interest charge on irrecoverable surplus (2) (1)

Net impact on profit before tax (68) (123)

Cash flow

Group cash flow in respect of employee benefits schemes comprises contributions paid to funded schemes of £36m (2022 – £36m)

and benefits paid in respect of unfunded schemes of £5m (2022 – £2m). Contributions to funded defined benefit schemes are subject

to periodic review. Contributions to defined contribution schemes amounted to £95m (2022 – £87m).

Total contributions to funded schemes and benefit payments by the Group in respect of unfunded schemes in 2024 are currently

expected to be approximately £3m in the UK and £10m overseas, totalling £13m (2022 – UK £29m, overseas £10m, totalling £39m).

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 has 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 new financial year. The employer contributions will instead be

met from the surplus in the UK Scheme. This is subject to a solvency check, assessed annually by the Scheme Actuary. This is

expected to result in approximately £70m cash flow benefit for the Group in the new financial year.

Other comprehensive income

Remeasurements of the net pension asset recognised in other comprehensive income are as follows:

2023

£m

2022

£m

Return on scheme assets excluding amounts included in net interest in the income statement (238) (582)

Actuarial gains arising from changes in financial assumptions 264 1,440

Actuarial gains arising from changes in demographic assumptions 18 11

Experience losses on scheme liabilities (57) (38)

Change in unrecognised surplus 6 (10)

Remeasurements of the net pension (liability)/asset (7) 821

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

156 Associated British Foods plc Annual Report 2023

Reconciliation of change in assets and liabilities

2023

assets

£m

2022

assets

£m

2023

liabilities

£m

2022

liabilities

£m

2023

net

£m

2022

net

£m

At beginning of year 4,151 4,728 (2,795) (4,209) 1,356 519

Current service cost – – (31) (45) (31) (45)

Employee contributions 7 8 (7) (8) – –

Employer contributions 36 36 – – 36 36

Benefit payments (161) (154) 166 156 5 2

Past service cost – – (2) – (2) –

Interest income/(expense) 185 84 (123) (74) 62 10

Loss on scheme assets less interest income (238) (582) – – (238) (582)

Actuarial gains arising from changes in financial assumptions – – 264 1,440 264 1,440

Actuarial gains arising from changes

indemographicassumptionsin demographic assumptions – – 18 11 18 11

Experience losses on scheme liabilities – – (57) (38) (57) (38)

Effect of movements in foreign exchange (18) 31 18 (28) – 3

At end of year 3,962 4,151 (2,549) (2,795) 1,413 1,356

Reconciliation of change in irrecoverable surplus

Note

2023

£m

2022

£m

At beginning of year (42) (26)

Change recognised in other comprehensive income 6 (10)

Interest charge on irrecoverable surplus 4 (2) (1)

Effect of movements in foreign exchange 2 (5)

At end of year (36) (42)

13. Deferred tax assets and liabilities

Property,

plant and

equipment

£m

Intangible

assets

£m

Leases

£m

Employee

benefits

£m

Financial

assets and

liabilities

£m

Provisions

and other

temporary

differences

£m

Tax value of

carry-forward

losses

£m

Total

£m

At 18 September 2021 137 90 (101) 125 12 (84) (34) 145

Amount credited to the income statement 34 (5) 27 1 – 13 8 78

Amount credited to equity – – – 154 28 2 – 184

Acquired through business combinations – 22 – – – 2 – 24

Effect of changes in tax rates on the

incomestatementincome statement 2 – – – – – – 2

Effect of changes in tax rates on equity – – – 44 – – – 44

Effect of hyperinflationary economies taken

to operating profit 3 – – – – – – 3

Transfer to assets/liabilities held for sale 5 – – – – – – 5

Effect of movements in foreign exchange 6 10 (4) – – (8) – 4

At 17 September 2022 187 117 (78) 324 40 (75) (26) 489

Amount credited to the income statement 73 (3) (30) 12 – (11) (53) (12)

Amount credited to equity – – – (5) (40) 5 – (40)

Acquired through business combinations – 7 – 1 – (1) (1) 6

Effect of changes in tax rates on the

incomestatementincome statement 3 – – 2 – – – 5

Effect of hyperinflationary economies taken

to operating profit 4 – – – – – – 4

Transfer from assets/liabilities held for sale (5) – – – – – – (5)

Effect of movements in foreign exchange (19) (3) 3 – – 3 2 (14)

At 16 September 2023 243 118 (105) 334 – (79) (78) 433

157Associated British Foods plc Annual Report 2023

13. Deferred tax assets and liabilities continued

Provisions and other temporary differences include provisions of £(103)m (2022 – £(93)m), biological assets of £33m (2022 – £32m),

tax credits of £(9)m (2022 – £(16)m) and other temporary differences of £nil (2022 – £2m).

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:

2023

£m

2022

£m

Deferred tax assets (193) (158)

Deferred tax liabilities 626 647

433 489

In addition to the amounts disclosed above, there are £nil (2022 – £5m) deferred tax assets classified as assets held for sale (see note 15).

Deferred tax assets have not been recognised in respect of tax losses of £358m (2022 – £348m). Of these tax losses, £186m

(2022– £188m) will expire at various dates between 2023 and 2028 (2022: 2022 and 2027). Deferred tax assets have also not been (2022 – £188m) will expire at various dates between 2023 and 2028 (2022: 2022 and 2027). Deferred tax assets have also not been

recognised in respect of other temporary differences of £353m (2022 – £516m). This includes £160m (2022 – £378m) relating to

property, plant and equipment and leases in Germany which were derecognised following the impairment in 2022 (see notes 9 and 10

for further details). 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 £2,527m (2022 – £2,029m), resulting in temporary

differences of £1,426m (2022 – £1,495m). 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.

14. Trade and other receivables

2023

£m

2022

£m

Non-current – other receivables

Loans and receivables 31 29

Other non-current investments 32 29

63 58

Current – trade and other receivables

Trade receivables 1,319 1,311

Other receivables 223 218

Accrued income 26 35

1,568 1,564

Prepayments and other non-financial receivables 210 194

1,778 1,758

In addition to the amounts disclosed above, there are £nil (2022 – £3m) trade and other receivables classified as assets held for sale

(see note 15).

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.

Trade and other receivables include £32m (2022 – £29m) in respect of finance lease receivables, with £28m in non-current loans

andreceivables and £4m in current other receivables (2022 – £25m in non-current loans and receivables and £4m in current other and receivables and £4m in current other receivables (2022 – £25m in non-current loans and receivables and £4m in current other

receivables). Minimum lease payments receivable are £4m within one year, £11m between one and five years and £17m in more than

five years (2022 – £4m within one year, £16m between one and five years and £9m in more than five years).

The finance lease receivables relate to property, plant and equipment leased to a joint venture of the Group (see note 28).

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

158 Associated British Foods plc Annual Report 2023

15. Assets and liabilities classified as held for sale

The Group has no assets and liabilities classified as held for sale at year end. In the prior year, the Group’s north China sugar business

was classified as held for sale. The proposed buyer withdrew their offer in the second half of this year and the Group has since

recognised a £15m non-cash exceptional impairment charge to write down the property, plant and equipment in that business.

16. Inventories

2023

£m

2022

£m

Raw materials and consumables 599 607

Work in progress 78 70

Finished goods and goods held for resale 2,530 2,582

3,207 3,259

Write-down of inventories (123) (115)

In addition to the amounts disclosed above, there are £nil (2022 – £7m) of inventories classified as assets held for sale (see note 15).

17. Biological assets

Growing

cane

£m

Other

£m

Total

£m

At 18 September 2021 79 6 85

Transferred to inventory (113) (13) (126)

Purchases – 5 5

Other disposals – (1) (1)

Changes in fair value 124 10 134

Effects of movements in foreign exchange 7 1 8

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

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.of goodwill. See note 8 for further details.

In the year there was a £7m (2022 – £nil) impairment of current biological assets in Illovo Mozambique due to the severe flooding

anddamage to the sugar crop fields (included within exceptional items).and damage to the sugar crop fields (included within exceptional items).

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 16 September 2023:

South Africa Malawi Zambia Eswatini Tanzania Mozambique

Expected area 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% –

159Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

17. Biological assets continued

The following assumptions were used in the determination of the estimated sucrose tonnage at 17 September 2022:

South Africa Malawi Zambia Eswatini Tanzania Mozambique

Expected area to harvest (hectares) 6,028 19,207 16,163 8,419 9,612 5,802

Estimated yield (tonnes cane/hectare) 67.9 103.7 115.9 99.5 72.6 71.0

Average maturity of growing cane 47.6% 67.4% 65.7% 67.7% 46.2% 72.4%

A 1% change in the unobservable inputs could increase or decrease the fair value of growing cane as follows:

2023 2022

+1%

£m

-1%

£m

+1%

£m

-1%

£m

Estimated sucrose content 1.6 (1.6) 1.2 (1.2)

Estimated sucrose price 1.9 (1.9) 1.4 (1.4)

18. Cash and cash equivalents

Note

2023

£m

2022

£m

Cash

Cash at bank and in hand 481 674

Cash equivalents 976 1,447

Cash and cash equivalents 26 1,457 2,121

Reconciliation to the cash flow statement

Bank overdrafts 19 (69) (126)

Cash and cash equivalents in the cash flow statement 1,388 1,995

Cash and cash equivalents on the face of the balance sheet 1,457 2,121

1,457 2,121

Cash at bank and in hand generally earns interest at rates based on the applicable daily bank deposit rate.

Cash equivalents generally comprise deposits placed on money markets for periods of up to three months and money market funds

which earn interest atashort-term deposit rate.which earn interest at a short-term deposit rate.

The carrying amount of cash and cash equivalents approximates fair value.

19. Loans and overdrafts

Note

2023

£m

2022

£m

Current loans and overdrafts

Secured loans – 1

Unsecured loans and overdrafts 168 156

168 157

Non-current loans

Unsecured loans 394 480

394 480

26 562 637

FINANCIAL STATEMENTS

160 Associated British Foods plc Annual Report 2023

Note

2023

£m

2022

£m

Secured loans

• Other floating rate – 1

Unsecured loans and overdrafts

• Bank overdrafts 18 69 126

• GBP fixed rate 392 390

• USD floating rate 8 8

• USD fixed rate 81 87

• EUR floating rate 1 2

• Other floating rate 9 13

• Other fixed rate 2 10

26 562 637

Secured loans comprise amounts borrowed from commercial banks and are secured by floating charges over the assets ofsubsidiaries. Secured loans comprise amounts borrowed from commercial banks and are secured by floating charges over the assets of subsidiaries.

Bank overdrafts generally bear interest at floating rates.

20. Trade and other payables

2023

£m

2022

£m

Trade payables 1,177 1,362

Accruals 1,271 1,275

2,448 2,637

Deferred income and other non-financial payables 505 477

2,953 3,114

In addition to the amounts disclosed above, there are no trade and other payables (2022 – £14m) classified as liabilities held for sale

(see note 15).

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. The Group receives no benefit from these arrangements. 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 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.of the Group’s normal operating cycle.

At year end, the value of invoices sold by suppliers under supply chain financing arrangements was £75m (2022 – £45m).

21. Provisions

Restructuring

£m

Deferred

consideration

£m

Other

£m

Total

£m

At 17 September 2022 55 20 38 113

Created 21 2 67 90

Utilised (39) (16) (9) (64)

Released (18) – (13) (31)

Effect of movements in foreign exchange (1) – (4) (5)

At 16 September 2023 18 6 79 103

Current 18 3 34 55

Non-current – 3 45 48

18 6 79 103

Financial liabilities within provisions comprised deferred consideration in both years (see note 26).

161Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

21. Provisions continued

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.

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.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 16 September 2023, the Company’s issued and fully paid share capital comprised 767,953,088 ordinary shares of 5

⁄

p, each

carrying one vote per share (2022 – 791,674,183). Total nominal value was £44m (2022 – £45m).

Other reserves

£173m of other reserves arose from the cancellation of share premium account by the Company in 1993. £2m arose in 2010 as a

transfer to capital redemption reserve following redemption of two million £1 deferred shares at par. £1m arose in 2023 as a transfer

to capital redemption reserve following the purchase and subsequent cancellation of shares (2022 – nil).

The remaining £3m comprises a £4m unrealised gain on investments held at fair value through other comprehensive income,

netof£1m deferred tax (2022 – £3m, £4m and £1m, respectively).net of £1m deferred tax (2022 – £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 of amounts recycled from the hedging reserve on occurrence of the hedged transaction or when the hedged transaction is no longer

expected to occur.

23. Acquisitions and disposals

Acquisitions

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 consultant and Advance Sourcing provides specialist products to create value by improving herd performance and supports dairy

farmers to improve herd efficiency and build resilience across theagri-food supply chain. Progres in Finland uses a patented additive farmers to improve herd efficiency and build resilience across the agri-food supply chain. Progres in Finland uses a patented additive

to support good health, reduce inflammation and stimulate recovery, which improves gut integrity and the performance of animals.

In April, the Ingredients division acquired Vital Solutions, a German company specialising in natural science-based ingredients for

application in dietary supplements and functional foods.

The Agriculture division acquired IFCN AG, a dairy research and consulting company in June and in August acquired 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, developing technology used to inform farming efficiency and animal welfare, and quantify food provenance.

FINANCIAL STATEMENTS

162 Associated British Foods plc Annual Report 2023

Pre-acquisition

carrying values

£m

Recognised values on acquisition

National Milk

Records

£m

Other

£m

Total

£m

Net assets

Intangible assets 3 23 12 35

Property, plant and equipment and right-of-use assets 5 4 1 5

Investment in joint ventures 3 9 – 9

Cash and overdrafts 1 – 1 1

Working capital (1) – (1) (1)

Loans (2) (2) – (2)

Taxation 1 (4) (2) (6)

Net identifiable assets and liabilities 10 30 11 41

Goodwill 18 21 39

Total consideration 48 32 80

Recognised

values on

acquisition

£m

Satisfied by

Cash consideration 78

Deferred consideration 2

Net cash

Cash consideration 78

Cash and cash equivalents acquired (1)

Pre-acquisition carrying amounts were the same as recognised values on acquisition apart from £32m of non-operating intangibles in

respect of brands, technology and customer relationships, a £7m related deferred tax liability, a £6m uplift to the investment in joint

ventures and goodwill of £39m. Cash flow on acquisition of subsidiaries, joint ventures and associates of £94m comprised £78m cash

consideration less £1m cash and overdrafts acquired, £16m of deferred consideration relating to previous acquisitions and a £1m

contribution to an existing joint venture in China.

2022

In January, the Group acquired 100% of Fytexia, a B2B specialty ingredients business in France and Italy producing and formulating

polyphenols-based active ingredients for the dietary supplements industry. In July, the Group acquired Greencoat, a UK-based animal

supplement and care business. During the year, the Group also acquired a small grocery company in New Zealand, a small agriculture

business in Finland and a small ingredients business in Australia.

Pre-acquisition carrying amounts were the same as recognised values on acquisition apart from £88m of non-operating intangibles in

respect of brands, technology and customer relationships, an £8m uplift to inventory, a £16m related deferred tax liability and goodwill

of £85m. Cash flow on acquisition of subsidiaries, joint ventures and associates of £154m comprised £153m cash consideration less

£10m cash and overdrafts acquired, £7m of deferred consideration relating to previous acquisitions and a £4m contribution to an

existing joint venture in China.

Disposals

2023

The Group agreed to sell property, plant and equipment to its Chinese joint venture partner. Profit on sale was £3m. In March

Gledhow, the Group’s 30% equity-accounted associate in Illovo South Africa, formally went into business rescue. A non-cash

provision of £6m was booked on the financial guarantee held on this business' liabilities.

2022

The proposed sale of a yeast company to the joint venture with Wilmar International in China (classified as held for sale at the 2021

year end) is not going ahead. The £10m non-cash impairment reversed in 2021 through profit/(loss) on sale and closure of business

has been reinstated at a cost of £11m.

The Group’s investment in north China Sugar is classified as held-for-sale at year end and an associated £19m non-cash write-down

has been charged to loss on sale and closure of business.

The Group also released £3m of closure provisions in Vivergo in the UK and £4m of warranty provisions no longer required for a disposed

Ingredients business in the United States.

163Associated British Foods plc Annual Report 2023

24. Share-based payments

The annual charge in the income statement for equity-settled share-based payments schemes was £18m (2022 – £19m).

TheGrouphad the following principal equity-settled share-based payment plans in operation during the period: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-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 100 to 115.

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

2023 6,090,005 3,113,056 (607,140) (1,618,739) 6,977,182

2022 5,419,237 2,445,814 (718,185) (1,056,861) 6,090,005

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 16 September 2023 the Trust held 4,734,992

(2022 – 3,042,132) ordinary shares of the Company. The market value of these shares at the year end was £99m (2022 – £40m).

TheTrust has waived its right to dividends. Movements in the year were a release of 607,140 shares and the purchase of 2,300,000 The Trust has waived its right to dividends. Movements in the year were a release of 607,140 shares and the purchase of 2,300,000

shares (2022 – release of 718,185 shares and the purchase of 2,413,228 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 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 1,544p (2022 – 1,660p) and the weighted average share price was 1,925p (2022

– 1,975p). The dividend yield used was 2.5% (2022 – 2.5%).

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

164 Associated British Foods plc Annual Report 2023

25. Analysis of net debt

17 September

2022

£m

Cash flow

£m

Acquisitions

and disposals

£m

New leases,

non-cash

items and

transfers

£m

Exchange

adjustments

£m

16 September

2023

£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overdraftsand 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)

18 September

2021

£m

Cash flow

£m

Acquisitions

and disposals

£m

New leases,

non-cash

items and

transfers

£m

Exchange

adjustments

£m

17 September

2022

£m

Short-term loans (244) 12 (23) 224 – (31)

Long-term loans (76) (178) – (224) (2) (480)

Lease liabilities (3,281) 321 (8) (186) (98) (3,252)

Total liabilities from financing activities (3,601) 155 (31) (186) (100) (3,763)

Cash at bank and in hand, cash equivalents

andoverdraftsand overdrafts 2,189 (268) – – 74 1,995

Current asset investments 32 (30) – – 2 4

Net debt including lease liabilities (1,380) (143) (31) (186) (24) (1,764)

Cash and cash equivalents comprise bank and cash balances, deposits and short-term investments with original maturities

ofthreemonths or less. £69m (2022 – £126m) of bank overdrafts that are repayable on demand form part of the Group’s cash of three months or less. £69m (2022 – £126m) of bank overdrafts that are repayable on demand form part of the Group’s cash

management and are included as a component of cash and cash equivalents for the purpose of the cash flow statement

(seenote18forareconciliation).(see note 18 for a reconciliation).

Net cash before lease liabilities is £895m, comprising cash at bank and in hand, cash equivalents and overdrafts of £1,388m,

short-term loans of £99m, long-term loans of £394m and current asset investments of £nil (2022 – £1,488m, £1,995m, £31m,

£480mand £4m,respectively).£480m and £4m,respectively).

£69m (2022 – £126m) of bank overdrafts plus the £99m (2022 – £31m) of short-term loans shown above comprise the £168m

(2022– £157m) of current loans and overdrafts shown on the face of the balance sheet.(2022 – £157m) of current loans and overdrafts shown on the face of the balance sheet.

Current and non-current lease liabilities shown on the face of the balance sheet of £335m and £2,825m respectively (2022 – £316m

and £2,936m respectively) comprise the £3,160m (2022 – £3,252m) of lease liabilities shown above.

Current asset investments comprise term deposits and short-term investments with original maturities of greater than three months.

Interest paid is included within financing activities. The roll-forward of the liabilities associated with interest paid is an opening balance

of £(18)m, expense of £(128)m, payments of £118m, effect of hyperinflationary economies of £3m and a closing balance of £(25)m

(2022 – opening balance of £(20)m, expense of £(111)m, payments of £114m, fx of £(1)m and a closing balance of £(18)m).

165Associated British Foods plc Annual Report 2023

26. Financial instruments

Financial instruments include £nil (2022 – £3m) of trade and other receivables and £nil (2022 – £14m) of trade and other

payableswhich are classified as held for sale (see note 15). All disclosures in this note are given gross, before the held-for-sale payables which are classified as held for sale (see note 15). All disclosures in this note are given gross, before the held-for-sale

reclassification is made.

a) Carrying amount and fair values of financial assets and liabilities

2023

£m

2022

£m

Financial assets

Financial assets at amortised cost

Cash and cash equivalents 1,457 2,121

Current asset investments – 4

Trade and other receivables 1,568 1,567

Other non-current receivables 31 29

At fair value through other comprehensive income

Investments 32 29

At fair value through profit or loss

Derivative assets not designated in a cash flow hedging relationship:

• currency derivatives (excluding cross-currency swaps) 11 50

• commodity derivatives – 3

Designated cash flow hedging relationships

Derivative assets designated and effective as cash flow hedging instruments:

• currency derivatives (excluding cross-currency swaps) 40 70

• cross-currency swaps 24 29

• interest rate derivatives 4 –

• commodity derivatives 17 323

Total financial assets 3,184 4,225

Financial liabilities

Financial liabilities at amortised cost

Trade and other payables (2,448) (2,651)

Secured loans – (1)

Unsecured loans and overdrafts (fair value 2023 – £470m; 2022 – £571m) (562) (636)

Lease liabilities (fair value 2023 – £3,178m; 2022 – £3,471m) (3,160) (3,252)

Deferred consideration (6) (20)

At fair value through profit or loss

Derivative liabilities not designated in a cash flow hedging relationship:

• currency derivatives (excluding cross-currency swaps) (6) (5)

• commodity derivatives – (3)

Designated net investment hedging relationships

Derivative liabilities designated as net investment hedging instruments:

• cross-currency swaps (7) (7)

Designated cash flow hedging relationships

Derivative liabilities designated and effective as cash flow hedging instruments:

• currency derivatives (excluding cross-currency swaps) (4) (17)

• interest rate derivatives – (3)

• commodity derivatives (52) (170)

Total financial liabilities (6,245) (6,765)

Net financial liabilities (3,061) (2,540)

Except where stated, carrying amount is equal to fair value.

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

166 Associated British Foods plc Annual Report 2023

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.

2023 2022

Contractual/

notional

amounts

£m

Level 1

£m

Level 2

£m

Total

£m

Contractual/

notional

amounts

£m

Level 1

£m

Level 2

£m

Total

£m

Financial assets

Currency derivatives

(excluding cross-currency swaps) 2,402 – 51 51 2,193 – 120 120

Cross-currency swaps 84 – 24 24 94 – 29 29

Interest rate derivatives 400 – 4 4

Commodity derivatives 163 5 12 17 439 3 323 326

3,049 5 91 96 2,726 3 472 475

Financial liabilities

Currency derivatives

(excluding cross-currency swaps) 626 – (10) (10) 921 – (22) (22)

Cross-currency swaps 65 – (7) (7) 68 – (7) (7)

Interest rate derivatives – – – – 400 – (3) (3)

Commodity derivatives 275 (2) (50) (52) 366 – (173) (173)

966 (2) (67) (69) 1,755 – (205) (205)

167Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

26. Financial instruments continued

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.

2023 2022

Currency

derivatives

(excluding

cross-

currency)

£m

Cross-

currency

swaps

£m

Interest rate

derivatives

£m

Commodity

derivatives

£m

Total

£m

Currency

derivatives

(excluding

cross-

currency)

£m

Cross-

currency

swaps

£m

Interest rate

derivatives

£m

Commodity

derivatives

£m

Total

£m

Opening balance (41) – 2 (115) (154) (14) (1) – (28) (43)

Losses/(gains) recognised

in the hedging reserve 73 5 (5) 339 412 (295) (20) 3 (234) (546)

Amount removed from

the hedging reserve and

included in the income

statement:

• revenue (6) – – (7) (13) 5 – – (4) 1

• cost of sales – – – (132) (132) – – – 105 105

• other financial

(income)/expense – (7) – – (7) – 21 – – 21

Amount removed from

the hedging reserve and

included in a non-financial

asset:

• inventory (52) – – (16) (68) 258 – – 22 280

Deferred tax (2) – 1 (39) (40) 5 – (1) 24 28

Closing balance (28) (2) (2) 30 (2) (41) – 2 (115) (154)

Cash flows are expected

to occur:

• within six months (15) – – 25 10 (36) – 2 (105) (139)

• between six months

and one year (13) (2) (2) 4 (13) (6) – – (10) (16)

• between one and two

years – – – 1 1 1 – – – 1

(28) (2) (2) 30 (2) (41) – 2 (115) (154)

Of the closing balance of £(2)m, £(2)m is attributable to equity shareholders and £nil to non-controlling interests (2022 – £(154)m,

£(154)m attributable to equity shareholders and £nil to non-controlling interests). Of the net movement in the year of £(152)m, £(152m

isattributable to equity shareholders and £nil to non-controlling interests (2022 – £(111)m, £(111)m attributable to equity shareholders is attributable to equity shareholders and £nil to non-controlling interests (2022 – £(111)m, £(111)m 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 £3m (2022 – £1m).

The balance in the cost of hedging reserve was not significant at 17 September 2022 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 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.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.

FINANCIAL STATEMENTS

168 Associated British Foods plc Annual Report 2023

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 also holds cross-currency interest rate swaps to hedge its fixed rate non-sterling debt. These are 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 and recognised in other comprehensive income – cost of hedging. The value of the currency basis is not significant. Effectiveness

ismeasured using the hypothetical derivative approach. The hypothetical derivative is based on the critical terms of the debt and is measured using the hypothetical derivative approach. The hypothetical derivative is based on the critical terms of the debt and

therefore the only ineffectiveness that might arise is in relation to credit risk. Credit risk is monitored regularly and is 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 £2m (2022 – £nil) on retranslation of these loans has been taken to the translation reserve on

consolidation, allof which was attributable to equity shareholders. The Group also held cross-currency swaps that have been consolidation, all of which was attributable to equity shareholders. The Group also held cross-currency swaps that have been

designated as hedges of its net investments in euros, whose change in fair value of £nil to the translation reserve, all of which was

attributable to equity shareholders (2022 – £1m has been 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.with the Group’s overall pricing strategy.

169Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

26. Financial instruments continued

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 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.

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 £16m

(2022 – £62m) and £(13)m (2022 – £(57)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 16 September 2023, £475m (85%) (2022 – £487m and 76%) 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 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 and cash equivalents and current asset investments are subject to floating rates of interest, typically fixed for

periods up to 3 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 13-month period to September 2024.of the Group’s cash and cash equivalents is fixed for the 13-month period to September 2024.

(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 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 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 169.

Transaction risk

Currency transaction exposure occurs where a business makes sales and purchases in 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 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.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 typically on a rolling 12-month basis. 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 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.

FINANCIAL STATEMENTS

170 Associated British Foods plc Annual Report 2023

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.

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.by disclosing separately by risk category, and each type of hedge, the details of the associated hedging instrument and hedged item.

2023

Contract

notional

£m

Carrying

amount

assets/

(liabilities)

£m

Furthest

maturity

date

£m

Hedge

ratio

Change in fair

value of hedging

instrument used to

determine hedge

ineffectiveness

£m

Change in fair value

of hedged item used

to determine hedge

effectiveness

£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 (7) Mar 24 100% – –

Non-current

Designated cash flow hedging relationships:

• currency derivatives (excluding cross-currency

swaps) 21 – Apr 25 100% – –

• commodity derivatives 11 – Feb 25 100% – –

2022

Contract

notional £m

Carrying

amount

assets/

(liabilities)

£m

Furthest

maturity

date

£m

Hedge

ratio

Change in fair

value of hedging instrument

used to determine hedge

ineffectiveness

£m

Change in fair value of

hedged item used to

determine hedge

effectiveness

£m

Current

Designated cash flow hedging relationships:

• currency derivatives (excluding cross-currency

swaps) 2,102 54 Sep 23 100% 54 (54)

• commodity derivatives 739 152 Aug 23 100% 152 (152)

• interest rate derivatives 400 (3) Aug 23 100% (3) 3

Non-current

Designated cash flow hedging relationships:

• currency derivatives (excluding cross-currency

swaps) 32 (1) Sep 24 100% (1) 1

• cross-currency swaps 94 29 Mar 24 100% 14 (14)

• commodity derivatives 20 1 Jan 24 100% 1 (1)

Designated net investment hedging relationships:

• currency derivatives (cross-currency swaps) 68 (7) Mar 24 100% (3) 3

171Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

26. Financial instruments continued

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 16 September

2023, £2,045m of forward foreign currency contracts designated as cash flow hedges were outstanding (2022–£2,134m), largely 2023, £2,045m of forward foreign currency contracts designated as cash flow hedges were outstanding (2022 – £2,134m), largely

inrelation to purchases of USD (£1,702m) and sales of EUR (£203m) with varying maturities up to April 2025. Weighted average in relation to purchases of USD (£1,702m) and sales of EUR (£203m) with varying maturities up to April 2025. Weighted average

hedge rates for these contracts are GBPUSD: 1.264, EURUSD: 1.098 and GBPEUR: 1.145. Weighted average hedge rates for the

cross-currency swaps are 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 February 2025.a range of underlying hedged items, with varying maturities up to February 2025.

The analysis of the Group’s foreign currency exposure to financial assets and liabilities by currency of denomination is as follows:

2023

Sterling

£m

US dollar

£m

Euro

£m

Other

£m

Total

£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

2022

Sterling

£m

US dollar

£m

Euro

£m

Other

£m

Total

£m

Financial assets

Cash and cash equivalents 1 78 10 38 127

Trade and other receivables – 55 54 24 133

1 133 64 62 260

Financial liabilities

Trade and other payables (29) (512) (38) (17) (596)

Unsecured loans and overdrafts – (90) – – (90)

(29) (602) (38) (17) (686)

Currency derivatives

Gross amounts receivable 93 2,143 98 256 2,590

Gross amounts payable (2) (202) (428) (57) (689)

91 1,941 (330) 199 1,901

63 1,472 (304) 244 1,475

The following major exchange rates applied during the year:

Average rate Closing rate

2023 2022 2023 2022

US dollar 1.22 1.29 1.24 1.14

Euro 1.15 1.18 1.16 1.14

FINANCIAL STATEMENTS

172 Associated British Foods plc Annual Report 2023

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 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.

10% strengthening against other currencies of

2023

impact on

profit for

the period

£m

2023

impact on

total

equity

£m

2022

impact on

profit for

the period

£m

2022

impact on

total

equity

£m

Sterling 1 6 – 6

US dollar 21 164 19 172

Euro (2) (19) (19) (41)

Other 29 32 16 22

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 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.

10% strengthening of sterling against

2023

impact on

profit for

the period

£m

2022

impact on

profit for

the period

£m

US dollar (24) (18)

Euro (22) (3)

Other (27) (30)

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 16 September 2023. The Group considers its maximum exposure to credit risk to be:

2023

£m

2022

£m

Cash and cash equivalents 1,457 2,121

Current asset investments – 4

Trade and other receivables 1,568 1,567

Other non-current receivables 31 29

Investments 32 29

Derivative assets at fair value through profit and loss 11 53

Derivative assets in designated cash flow hedging relationships 78 415

3,177 4,218

The Group uses changes in credit ratings and other metrics to identify significant changes to the financial profile of its counterparties.

173Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

26. Financial instruments continued

Counterparty risk profile and management

The table below analyses the Group’s current asset investments, cash equivalents and derivative assets by credit exposure:

2023

Long-term issuer rating

Current asset

investments

£m

Cash

equivalents

£m

Derivatives

Total

£m

Currency

derivatives

£m

Cross-currency

swaps

£m

Interest rate

swaps

Commodities

£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

2022

Long-term issuer rating

Current asset

investments

£m

Cash

equivalents

£m

Derivatives

Total

£m

Currency

derivatives

£m

Cross-currency

swaps

£m

Interest rate

swaps

Commodities

£m

AA – 299 2 – – 10 311

A 4 955 103 22 – – 1,084

BBB – 157 – – – – 157

BB – 9 – – – – 9

B – 16 – – – – 16

Not rated – 11 – – – 315 326

Total 4 1,447 105 22 – 325 1,903

In the current year, we have included cash equivalents in the above disclosure and have re-presented the prior year comparatives

onaconsistent basis.on a consistent basis.

Cash of £481m (2022 – £674m) 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 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 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 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.

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.of the debtor to engage in a payment plan, and failure to make contractual payments within 180 days past due.

FINANCIAL STATEMENTS

174 Associated British Foods plc Annual Report 2023

The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region of origin was:

2023

£m

2022

£m

UK 584 579

Europe & Africa 398 385

The Americas 216 230

Asia Pacific 370 373

1,568 1,567

Trade receivables can be analysed as follows:

2023

£m

2022

£m

Not overdue 1,157 1,129

Up to one month past due 121 137

Between one and two months past due 29 31

Between two and three months past due 10 10

More than three months past due 30 31

Expected loss provision (28) (27)

1,319 1,311

Trade receivables are stated net of the following expected loss provision:

2023

£m

2022

£m

Opening balance 27 24

Increase charged to the income statement 7 6

Amounts released (2) (4)

Amounts written off (2) (1)

Effect of movements in foreign exchange (2) 2

Closing balance 28 27

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 associated with its financial liabilities as they

fall due. Group Treasury is responsible for monitoring and managing liquidity and ensures that the Group has sufficient headroom

initscommitted facilities to meet unforeseen or abnormal requirements. The Group also has access to uncommitted facilities to in its committed facilities to meet unforeseen or abnormal requirements. The Group also has access to uncommitted facilities to

assist with short-term funding requirements.

Available 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.

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 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 176.

175Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

26. Financial instruments continued

The following table analyses the contractual undiscounted cash flows relating to financial liabilities at the balance sheet date and

compares them to carrying amounts:

2023

Note

Due within

6 months

£m

Due

between

6 months

and 1 year

£m

Due

between

1 and 2

years

£m

Due

between

2 and 5

years

£m

Due after

5 years

£m

Contracted

amount

£m

Carrying

amount

£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 10 (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)

2022

Note

Due within

6 months

£m

Due

between

6 months

and 1 year

£m

Due

between

1 and 2

years

£m

Due

between

2 and 5

years

£m

Due after

5 years

£m

Contracted

amount

£m

Carrying

amount

£m

Non-derivative financial liabilities

Trade and other payables 20 (2,623) (28) – – – (2,651) (2,651)

Secured loans 19 – (1) – – – (1) (1)

Unsecured loans and overdrafts 19 (153) (17) (103) (31) (470) (774) (636)

Lease liabilities 10 (197) (214) (409) (1,115) (2,400) (4,335) (3,252)

Deferred consideration 21 (4) (12) (1) (3) – (20) (20)

Derivative financial liabilities

• Currency derivatives (excluding cross-

currency swaps) (net payments) (15) (2) (1) – – (18) (22)

• Commodity derivatives (net payments) (170) (1) (2) – – (173) (173)

• Interest rate derivatives (net payments) (3) – – – – (3) (3)

Total financial liabilities (3,165) (275) (516) (1,149) (2,870) (7,975) (6,758)

The above tables do not include forecast data for liabilities which may be incurred in the future but which were not contracted

at16 September 2023.at 16 September 2023.

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 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.

i) Borrowing facilities

The Group has substantial borrowing facilities available to it. The undrawn committed facilities at 16 September 2023 amounted to

£1,516m (2022 – £1,567m):

2023 2022

Facility

£m

Drawn

£m

Undrawn

£m

Facility

£m

Drawn

£m

Undrawn

£m

Committed Revolving Credit Facility 1,500 – 1,500 1,500 – 1,500

Public Bond due in 2034 390 390 – 390 390 –

US private placement 81 81 – 87 87 –

Illovo 29 15 14 77 12 65

Other 2 – 2 9 7 2

2,002 486 1,516 2,063 496 1,567

FINANCIAL STATEMENTS

176 Associated British Foods plc Annual Report 2023

Uncommitted facilities available at 16 September 2023 were:

2023 2022

Facility

£m

Drawn

£m

Undrawn

£m

Facility

£m

Drawn

£m

Undrawn

£m

Illovo 115 50 65 188 99 89

Azucarera 33 1 32 36 2 34

China 35 – 35 39 – 39

Moneymarket lines – – – 100 – 100

Other 180 25 155 162 40 122

363 76 287 525 141 384

In addition to the above facilities there are also £149m (2022 – £114m) 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 £10m 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.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 pages 36 to 39.An assessment of the Group’s current liquidity position is given in the Financial Review on pages 36 to 39.

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 £11,093m (2022 – £11,448m).

Theconsolidated statement of changes in equity provides details on equity and note 19 provides details of loans and overdrafts. 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 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 buy-back plan.a defined share buy-back 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.

Where Group companies enter into financial guarantee contracts to guarantee the indebtedness of other Group companies, the Group

considers these to be insurance arrangements and has elected to account for them as such in accordance with IFRS 4. In this respect,

the guarantee contract is treated as a contingent liability until such time as it becomes probable that the relevant Group company

issuing the guarantee will be required to make a payment under the guarantee.

As at 16 September 2023, Group companies have provided guarantees in the ordinary course of business amounting to £1,724m

(2022 – £1,754m).

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; 2022 – £52m). The relevant contractual relationship between the Group

and its supplier terminated at the end of 2019. The Group has not yet recorded an asset in respect of this matter as the defendant

isappealing the judgment. Since the balance sheet date, a proclamation from the appeal court in Thailand has been made regarding is appealing the judgment. Since the balance sheet date, a proclamation from the appeal court in Thailand has been made regarding

the appeal by the defendant that reverses the previous judgement that was given in 2021. We are currently reviewing next steps

withlegal counsel.with legal counsel.

177Associated British Foods plc Annual Report 2023

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 (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.

Material transactions and year end balances with related parties were as follows:

Sub

note

2023

£000

2022

£000

Charges to Wittington Investments Limited in respect of services provided by the Company

and its subsidiary undertakings 985 930

Dividends paid by Associated British Foods plc and received in a beneficial capacity by:

(i) trustees of the Garfield Weston Foundation and their close family 1 11,219 12,361

(ii) directors of Wittington Investments Limited who are not trustees of the Foundation and

their close family 2,159 2,322

(iii) directors of the Company who are not trustees of the Foundation and are not directors

of Wittington Investments Limited 2 89 128

Sales to fellow subsidiary undertakings on normal trading terms 3 18 48

Sales to companies with common key management personnel on normal trading terms 4 9,912 16,891

Amounts due from companies with common key management personnel 4 1,028 2,898

Sales to joint ventures on normal trading terms 40,645 54,111

Sales to associates on normal trading terms 88,753 73,360

Purchases from joint ventures on normal trading terms 482,267 436,467

Purchases from associates on normal trading terms 97,844 13,879

Amounts due from joint ventures 36,986 37,865

Amounts due from associates 8,745 9,151

Amounts due to joint ventures 17,609 30,214

Amounts due to associates 7,161 594

1. 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 as at 16 September 2023 was the beneficial owner of 683,073 shares (2022 – 683,073 shares) in Wittington Investments

Limited representing 79.2% (2022 – 79.2%) of that company’s issued share capital and is, therefore, the Company’s ultimate controlling party. At 16 September

2023, 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.2023, 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.

2. Details of the directors are given on pages 80 and 81. Their interests, including family interests, in the Company and its subsidiary undertakings are

givenonpage 112 and 114. Key management personnel are considered to be the directors, and their remuneration is disclosed within the Remuneration Report given on page 112 and 114. Key management personnel are considered to be the directors, and their remuneration is disclosed within the Remuneration Report

onpages100 to 115.on pages 100 to 115.

3. The fellow subsidiary undertaking is Fortnum and Mason plc.

4. The company with common key management personnel is the George Weston Limited group, in Canada.

Amounts due from joint ventures include £32m (2022 – £29m) of finance lease receivables (see note 14). The remainder of the balance

is trading balances. All but £4m (2022 – £4m) of the finance lease receivables are non-current.

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

178 Associated British Foods plc Annual Report 2023

29. Group entities

Control of the Group

The largest group in which the results of the Company are consolidated is that headed by Wittington Investments Limited

(‘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 16 September 2023 Wittington, together with its subsidiary, Howard Investments Limited, held 431,515,108 ordinary shares (2022

– 431,515,108) representing in aggregate 56.2% (2022 – 54.5%) of the total issued ordinary share capital of Associated British Foods plc.

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 Listing Rules, treated

asacting in concert with Wittington and the trustees of the Foundation and are therefore also treated as controlling shareholders 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. Wittington, the trustees of the Foundation and these individuals together comprise the controlling shareholders

ofthe Company and, at 16 September 2023, have a combined interest in approximately 59.8% (2022 – 58.4%) of the Company’s of the Company and, at 16 September 2023, have a combined interest in approximately 59.8% (2022 – 58.4%) of the Company’s

voting rights. Information on the relationship agreement between the Company and its controlling shareholders is set out on pages

116 and 117 of the Directors’ Report.

Subsidiary undertakings

A list of the Group’s subsidiaries as at 16 September 2023 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 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.in the Group’s financial statements.

United Kingdom

England & Wales

Weston Centre, 10 Grosvenor Street, London,

W1K 4QY, United Kingdom

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

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

AB Sugar Limited

AB Technology Limited

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

Subsidiary undertakings

% effective holding

if not 100% Subsidiary undertakings

% effective holding

if not 100%

ABF Investments plc

ABF Investments (No.2) Limited

ABF Japan Limited

ABF MXN Finance Limited

ABF Overseas Limited

ABF PM Limited

ABF UK Finance Limited

ABF US Holdings Limited

ABF ZMW Finance Limited

ABN (Overseas) Limited

ABNA Feed Company Limited

ABNA Limited

Acetum (UK) Limited (previously Allied Technical

Centre Limited)

Agrilines Limited

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

Cereal Industries Limited

Cereform Limited

Dairy Consulting Limited

Davjon Food Limited

179Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

29. Group entities continued

Subsidiary undertakings

% effective holding

if not 100% Subsidiary undertakings

% effective holding

if not 100%

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 Limited

Greencoat Farm 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

Premier Nutrition Products Limited

Pride Oils Public Limited Company

Primark (U.K.) Limited

Primark Austria Limited

Primark Mode Limited

Primark Pension Administration Services Limited

(dissolved 24 October 2023)

Primark Stores Limited

Primary Diets Limited

Primary Nutrition Limited

Pro-Active Nutrition Limited

R. Twining and Company Limited

Reflex Nutrition Limited

Roses Nutrition Ltd

Seedcote Systems Limited

Serpentine Securities Limited (dissolved

26 September 2023)

Shep-Fair Products Limited

Spectrum Aviation Limited

Speedibake Limited

Sunblest Bakeries Limited

The Bakery School Limited (dissolved

3 October2023)3 October 2023)

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

Vernon House, 40 New North Road, Huddersfield,

West Yorkshire HD1 5LS, United Kingdom

Proper Nutty Limited

Fox Talbot House, Unit 4 Greenways Business Park,

Bellinger Close, Chippenham, Wiltshire, SN15 1BN

United Kingdom

National Milk Records Limited

National Livestock Records Limited

National Milk Records Trustee Company Limited

Nordic Star Ltd

Northern Ireland

1 College Place North, Belfast, BT1 6BG,

United Kingdom

James Neill, Limited

Unit 4, 211 Castle Road, Randalstown, Co. Antrim,

BT41 2EB, United Kingdom

Jordan Bros. (N.I.) Limited

Nutrition Services (International) Limited

Vistavet Limited

Scotland

32 Kelvin Avenue, Hillington Park, Glasgow,

G52 4LT, United Kingdom

National Milk Laboratories Limited

180 Glentanar Road, Glasgow, G22 7UP,

United Kingdom

ABN (Scotland) Limited

Miller Samuel LLP, RWF House,

5 Renfield Street, Glasgow, G2 5EZ,

United Kingdom

Korway Foods Limited

Korway Holdings Limited

Patak’s Chilled Foods Limited

Patak’s Frozen Foods Limited

Argentina

Mariscal Antonio José de Sucre 632 – 2

Floor,

Buenos Aires 1428, Argentina

AB Mauri Hispanoamerica S.A.

Surgras S.A. (in liquidation)

Compañía Argentina De Levaduras S.A.I.C.

Australia

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

AusPac Ingredients Pty Ltd

CCD Animal Health Pty Ltd

Dagan Trading Pty. Ltd

FINANCIAL STATEMENTS

180 Associated British Foods plc Annual Report 2023

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

Serrol Ingredients Pty Limited

The Jordans and Ryvita Company Australia Pty Ltd

Yumi’s Quality Foods Pty Ltd

35-37 South Corporate Avenue, Rowville,

VIC 3178, Australia

AB Food & Beverages Australia Pty. Limited

170 South Gippsland Highway, Dandenong,

VIC 3175, Australia

ABF Wynyard Park Limited Partnership

Austria

Wollzeile 11/2. 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

Industriepark 2d, 9820 Merelbeke, Belgium

AB Mauri Belgium NV

Chaussée de la Hulpe 177/20, 1170 Bruxelles, Belgium

Primark SA

Brazil

Avenida Tietê, L-233 Barranca do Rio Tietê,

City of Pederneiras, State of Sao Paulo,

CEP 17.280-000, Brazil

AB Brasil Indústria e Comércio de Alimentos Ltda

Alameda Madeira 328, 20

Floor, Room 2005,

Alphaville – Barueri, Sao Paulo 06454-010, Brazil

AB Enzimas Brasil Comercial Ltda

Avenida Dra. Ruth Cardoso, n.º 7.221, 11º Floor, Room

1.101 (parte), Condomínio Edifício Birmann 21,

Pinheiros, CEP 05425-902, City of São Paulo, State of

São Paulo, Brazil

AB Vista Brasil Comércio De Alimentação

Animal 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, 28 Floor, Santiago, Chile

Calsa Chile Inversiones Limitada

Subsidiary undertakings

% effective holding

if not 100% Subsidiary undertakings

% effective holding

if not 100%

China

No.1 Tongcheng Street, A Cheng District, Harbin,

Heilongjiang Province, China

AB (Harbin) Food Ingredients Co., Ltd. (in liquidation)

North Huang He Road, Rudong

New Economic Development Zone,

Nantong City, Jiangsu Province, China

AB Agri Animal Nutrition (Nantong) Co., Ltd.

AB Agri Animal Nutrition (Rudong) Co., Ltd.

No 28. South Shunjin Road, Yintai District, Tongchuan,

Shaanxi Province, China

AB Agri Animal Nutrition (Shaanxi) 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.

Chuangxin Road, Tonggu Industry Zone,

Sandu Town, Tonggu County,

Jiangxi Province, China

AB Agri Pumeixin Tech (Jiangxi) Co., Ltd.

Room 2802, Raffles City Changning,

No.1189 Changning Road, Changning District,

Shanghai, 200051, China

AB Enzymes Trading (Shanghai) Co., Ltd.

Room 2803, Raffles City Changning,

No.1189 Changning Road, Changning District,

Shanghai, 200051, 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.

Unit 006, Room 401, Floor 4, Building 1, No.15

Guanghua Road, Chaoyang District, Beijing, China

AB Mauri (Beijing) Food Sales and

Marketing Company Limited

Building 1, 35 Chi Feng Road, Yangpu District,

Shanghai 200092, China

AB Mauri Foods (Shanghai) Company Limited 90%

868 Yongpu Road, Pujiang Town,

Minhang District, Shanghai 201112, China

ABNA (Shanghai) Feed Co., Ltd.

14 Juhai Road, Jinghai Development Zone,

Tianjin, China

ABNA (Tianjin) Feed Co., Ltd.

Shu Shan Modern Industrial Zone of Shou County,

Huainan City, Anhui Province, China

ABNA Feed (Anhui) Co., Ltd.

145 Xincheng Road, Tengao Economic Development

Zone, Anshan, Liaoning 114225, China

ABNA Feed (Liaoning) Co., Ltd.

17 Xiangyang Street, Tu Township, Chayou Qianqi,

Inner Mongolia, China

Botian Sugar Industry (Chayou Qianqi) Co., Ltd.

No.1 Botian Road, Economic Development Zone,

Zhangbei County, Zhangjiakou City,

Hebei Province, China

Botian Sugar Industry (Zhangbei) Co., Ltd.

Room 1110, No.368, Changjiang Road, Nangang

Concentrated District, Economic Development Zone,

Harbin, China

Botian Sugar Industry Co., Ltd.

1 Industrial North Street, Zhangjiakou, Zhangbei County,

Hebei Province, China

Hebei Mauri Food Co., Ltd.

181Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

29. Group entities continued

Subsidiary undertakings

% effective holding

if not 100% Subsidiary undertakings

% effective holding

if not 100%

8 Lancun Road, Economic and Technical Development

Zone, Minhang, Shanghai 200245, China

Shanghai AB Food & Beverages Co., Ltd.

No.68-1, Shuanglong Road, Fushan District,

Yantai City, Shandong Province, China

Yantai Mauri Yeast Co., Ltd. 92%

Colombia

Cra 35# 34A-64, Palmira, Valle, Colombia

Fleischmann Foods S.A.

Czech Republic

Nádražní 523, 349 01 Stříbro, Czech Republic

Bodit Tachov s.r.o.

Palladium, Na Porici 1079/3a, Prague 1, 110 00, Czech

Republic

Primark Prodejny s.r.o.

Denmark

Skjernvej 42, Troestup, 6920 Videbæk, Denmark

AB Neo A/S

Middelfartvej 77, Baaring, 5466 Asperup, Denmark

Cowconnect ApS

Ecuador

Medardo Ángel Silva 13 y Panamá, Manzana 12,

El Recreo, Eloy Alfaro, Durán, Guayas, Ecuador

ABCALSA S.A.

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

Tykkimäentie 15b (PO Box 26), Rajamäki,

FI-05200, Finland

AB Enzymes Oy

Tykkimäentie 15b (PO Box 57), Rajamäki,

FI-05201, Finland

Enzymes Leasing Finland Oy

Koskelontie 19 B, Espoo, FI-02920, Finland

Alimetrics Research Oy

AB Vista Finland Oy

France

40/42, avenue Georges Pompidou, 69003,

à Lyon, France

AB Mauri France

25 Rue Anatole France, 92300 Levallois-Perret, France

Twinings & Co SAS

11 Rue de Milan, 75009, Paris, France

ABFI France SAS

Centre Commercial Régional Créteil Soleil, Niveau 3,

101 Avenue du Général de Gaulle, 94000, Créteil,,

France

Primark France SAS

845 Chemin du Vallon du maire, 13240,

Septemes les Vallons, France

SPI Pharma SAS

ZAE Via Europa, 3 rue d’Athènes, 34350 Vendres,

France

Fytexia Group

Fytexia

Germany

Feldbergstrasse 78, 64293, Darmstadt, Germany

AB Enzymes GmbH

Schauenburgerstrasse 116, 24118, Kiel, Germany

ICFN AG

Wandsbeker Zollstrasse 59, 22041,

Hamburg, Germany

ABF Deutschland Holdings GmbH

Ohly GmbH

Ohly Grundbesitz GmbH

Rheinische Presshefe- und Spritwerke GmbH

Kennedyplatz 2, 45127, Essen, Germany

Primark Mode Ltd. & Co. KG

Primark Property GmbH

Hausinger Strasse 4-8, 40764, Langenfeld, Germany

Vital Solutions GmbH

Westendstrasse 28, 60325, Frankfurt am Main, Germany

Wander GmbH

Marie-Kahle-Allee 2, D-53113, Bonn, Germany

Westmill Foods Europe 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 4AT,

Guernsey

Talisman Guernsey Limited

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 Felelösségu" Társaság

(Primark Üzletek Kft.)

India

#218 & #219, Bommasandra – Jigani Link Road, Anekal

Taluk, Bangalore, 560105, India

AB Mauri India Private Limited

First Floor, Regent Sunny Side, 80 Ft Road, 8

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

47 Mary Street, Dublin 1, Ireland

Abdale Finance Limited

Primark Holdings Unlimited Company

Primark Pension Trustees Limited

1 Stokes Place, St. Stephen’s Green,

Dublin 2, Ireland

Allied Mills Ireland Limited

Unit 5, Hebron House, Macdonagh Junction, Kilkenny,

R95 T91Y, Ireland

FINANCIAL STATEMENTS

182 Associated British Foods plc Annual Report 2023

Intellync Technology Limited

Arthur Ryan House, 22-24 Parnell Street,

Dublin 1, Ireland

Primark Limited

Primark Austria Limited

Primark Mode Limited

13 Classon House, Dundrum Business Park, Dundrum,

Dublin 14, D14 W9Y3, Ireland

Nutritional Advanced Formulas (Ireland) Limited

Italy

Viale Monte Nero, 84, 20135, Milan, Italy

AB Agri Italy S.r.l

Via Milano 42, 27045, Casteggio, (Pavia), Italy

AB Mauri Italy S.p.A.

ABF Italy Holdings S.r.l.

Largo Francesco Richini 2/A, 20122, Milan, Italy

Primark Italy S.r.l.

Via Rizzotto 46, 41126, Modena (MO), Italy

Acetaia Fini Modena S.r.l.

Via Sandro Pertini 440, 401314, Cavezzo (MO), Italy

Acetum S.p.A. Società Benefit

Via Garibaldi 84, Magenta, 20013, Milan, Italy

ALP Immobiliare S.r.l.

Via Gran Sasso, 33, Corbetta, 20011, Milan, Italy

B Natural S.r.l.

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

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

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.

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.

Mozambique

KM75 EN1, Maçiana, Distrito de Manhiça,

Provincia de Maputo, Mozambique

Maragra Açucar, S.A.

Subsidiary undertakings

% effective holding

if not 100% Subsidiary undertakings

% effective holding

if not 100%

Netherlands

Mijlweg 77, 3316 BE, Dordrecht, Netherlands

AB Mauri Netherlands B.V.

AB Mauri Netherlands European Holdings B.V.

Foods International Holding 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.

7122 JS Aalten, Dinxperlosestraatweg 122, Netherlands

Germains Seed Technology B.V.

Oude Kerkstraat 55 4878 AK, Etten-Leur, Netherlands

Mauri Technology B.V.

Laarderhoogtweg 25, 1101 EB Amsterdam,

Netherlands

Westmill Foods Europe B.V.

New Zealand

Building 3, Level 2, Central Business Park, 666 Great

South Road, Ellerslie, Auckland 1051, New Zealand

Allied Foods (NZ) Ltd

AusPac Ingredients NZ Limited

George Weston Foods (NZ) Limited

57 Forge Road, Silverdale 0932 New Zealand

Dad’s Pies 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

86 E Rodriguez Jr. Ave., Ugong Norte, QC,1604, Pasig

City, Metro Manila, Philippines

AB Food & Beverages Philippines, Inc. 99%

1201-1202 Prime Land Building, Market Street,

Madrigal Business Park, Ayala Alabang,

Muntinlupa,1770, Philippines

AB Mauri Philippines, Inc.

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 spolka z ograniczona

odpowiedzialnoscia (Primark Sklepy Sp. z.o.o)

183Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

29. Group entities continued

Subsidiary undertakings

% effective holding

if not 100% Subsidiary undertakings

% effective holding

if not 100%

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.)

ul. Główna 3A, Bruszczewo, 64-030, Śmigiel, Poland

AB Neo Polska spolka z ograniczona

odpowiedzialnoscia (AB Neo Polska Sp. z.o.o)

(previously AB Agri Polska Sp. z.o.o.)

Portugal

Avenida Salvador Allende, n.º 99, Oeiras, Julião da

Barra, Paço de Arcos e Caxias, 2770-157,

Paco de Arcos, Portugal

AB Mauri Portugal, S.A. 96%

Rua Castilho 50, 1250-071, Lisbon, Portugal

Lojas Primark Portugal – Exploracao, Gestao e

Administracao de Espacos Comerciais S.A.

Romania

District 1, 165 Calea Floreasca, One Tower, 12

Floor,

Bucharest, Romania

Primark Magazine S.R.L. (previously P.S.R. Indigo)

Rwanda

Nyarugenge District, Nyarugenge Sector,

Kigali City, Rwanda

Illovo Sugar (Kigali) Limited

Singapore

80 Robinson Road, #02-00, 068898 Singapore

AB Mauri Investments (Asia) Pte Ltd

112 Robinson Road #05-01, 068902 Singapore

AB Vista Asia Pte. Limited

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

Calle Cardenal Marcelo Spínola, 42, 28016,

Madrid, Spain

AB Azucarera Iberia, S.L. Sociedad Unipersonal

AB Vista Iberia, S.L.

Calle Levadura, 5 14710, Villarrubia, Córdoba, Spain

AB Mauri Food, S.A

AB Mauri Spain, S.L.U.

ABF Iberia Holding S.L.

C/Escultor Coomonte nº. 2, Entreplanta, Benavente,

Zamora, Spain

Agroteo S.A. 53%

Calle Comunidad de Murcia, Parcela LIE-1-03,

Plataforma Logistica 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.

Avienda Virgen de Montserrat, 44 Castelloli, 08719,

Barcelona, Spain

Germains Seed Technology, S.A.

Plaza Pablo Ruiz Picasso S/N, Torre Picasso,

Planta 37, Madrid, Spain

Illovo Sugar Espana, S.L.

Gran Via, 32 5o 28013, Madrid, Spain

Primark Tiendas, S.L.U.

8, 2 Calle Via Servicio I, 2 CP, 19190 Torija,

Guadalajara, Spain

Primark Logistica, S.L. Sociedad Unipersonal

Sri Lanka

124 Templers Road, Mount Lavinia, Sri Lanka

AB Mauri Lanka (Private) Limited

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 (Province of China)

AB Food and Beverages Taiwan, Inc.

Tanzania

Msolwa Mill Office, Kidatau, Kilombero District,

Tanzania

Illovo Distillers (Tanzania) Limited

Illovo Tanzania Limited

Kilombero Sugar Company Limited

75%

Thailand

Floor, 2535 Sukhumvit Road, Kwaeng Bangchak,

Khet Prakhanong, Bangkok, 10260, Thailand

AB Food & Beverages (Thailand) Ltd.

ABF Holdings (Thailand) Ltd.

1 Empire Tower, 24

Floor, Unit 2412-2413,

South Sathorn Road, Yannawa, Sathorn, Bangkok,

10120, Thailand

AB World Foods Asia Ltd

229/110 Moo 1, Teparak Road, T. Bangsaothong,

A. Bangsaothong, Samutprakarn, 10540, Thailand

Jasol Asia Pacific Limited (in liquidation)

Turkey

Aksakal Mahallesi, Kavakpinari, Kume Evleri

No.5, Bandirma- Balikesir, 10245, Turkey

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

FINANCIAL STATEMENTS

184 Associated British Foods plc Annual Report 2023

United States

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.

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.

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,

California 91203, United States

PennyPacker, LLC

158 River Road, Unit B, Clifton, NJ 07014,

United States

Balsamic Express LLC

Subsidiary undertakings

% effective holding

if not 100% Subsidiary undertakings

% effective holding

if not 100%

158 River Road, Unit A, Clifton, NJ 07014,

United States

Modena Fine Foods, Inc.

251 Little Falls Drive, Wilmington, DE 19808, United

States

Fytexia Corp.

Uruguay

CNo.Carlos Antonio Lopez 7547,

Montevideo, Uruguay

Levadura Uruguaya S.A.

Venezuela

Oficinas Once 3 (N° 11-3) y Once 4 (N° 11-4), Torre

Mayupan, Centro Comercial San Luis, Av.Principal

Urbanización San Luis, cruce con Calle Comercio,

Caracas, Bolivarian Republic of Venezuela

Alimentos Fleischmann, C.A.,

Compañía de Alimentos Latinoamericana

de Venezuela (CALSA) S.A.

Vietnam

Unit 2, 100 Nguyen Thi Minh Khai Street,

Ward 6, District 3, Ho Chi Minh City, Vietnam

AB Agri Vietnam Company Limited

La Nga Commune, Dinh Quan District, Dong Nai

Province, Vietnam

AB Mauri Vietnam Limited 66%

Zambia

Nakambala Estates, Plot No.118a Lubombo Road,

Off Great North Road, Zambia

Illovo Sugar (Zambia) Limited

Nanga Farms PLC

75%

Tukunka Agricultural Limited 75%

Zambia Sugar plc 75%

185Associated British Foods plc Annual Report 2023

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

29. Group entities continued

Joint ventures

A list of the Group’s joint ventures as at 16 September 2023 is given below. All joint ventures are included in the Group’s financial

statements using the equity method of accounting.

Joint ventures % holdingJoint ventures % holding

United Kingdom

England

Weston Centre, 10 Grosvenor Street, London,

W1K 4QY, United Kingdom

Frontier Agriculture Limited 50%

Boothmans (Agriculture) Limited 50%

Forward Agronomy Limited 50%

G F P (Agriculture) Limited 50%

GH Grain Limited 50%

GH Grain (No.2) 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, United Kingdom

Southampton Grain Terminal Limited 50%

Riverside, Wissington Road, Nayland, Colchester,

Essex, CO6 4LT, United Kingdom

Anglia Grain Holdings Limited 50%

Anglia Grain Services Limited 50%

Northants Apc, Rushton Road, Kettering, NN14 1FL

England, United Kingdom

Navara Oat Milling Limited 38%

Unit 8, Burnside Business Park, Burnside Road, Market

Brayton, TF9 3UX, United Kingdom

B.C.W (Agriculture) Limited 50%

Witham St Hughs, Lincoln, LN6 9TN, United Kingdom

Nomix Enviro Limited 50%

Eagle Labs Incubator, 28 Chesterton Road, Cambridge,

CB4 3AZ, United Kingdom

Yagro Ltd 50%

Scotland

Kingseat, Newmacher, Aberdeenshire, AB21 0UE,

United Kingdom

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

1828 Tiejueshan Road, Huangdao District, Qingdao,

Shandong Province, China

Qingdao Xinghua Cereal Oil and Foodstuff Co., Ltd 25%

1 East Ren Min Road, Regiment 66, Cocodala, Xinjiang,

China

AB Mauri Yihai Kerry (Cocodala) Food Co., Ltd.

(previously Xinjiang Mauri Food., Ltd) 50%

Room 607, 6

Floor, 1379, Bocheng Road, Pudong New

District, Shanghai, China

AB Mauri Yihai Kerry Investment Company Limited 50%

Room 608, 6

Floor, 1379, Bocheng Road, Pudong New

District, Shanghai, China

AB Mauri Yihai Kerry Food Marketing (Shanghai)

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%

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%

Xinsha Industrial Zone, Machong Town, Dongguan,

Guangdong Province, China

AB Mauri Yihai Kerry (Dongguan) Food Co., Ltd 50%

Finland

Tykkimäentie 15b (PO Box 57), Rajamäki,

FI-05201, Finland

Roal Oy 50%

France

59, Chemin du Moulin, 695701, Carron, Dardilly, France

Synchronis 50%

Germany

Brede 4, 59368, Werne, Germany

UNIFERM GmbH & Co. KG 50%

INA Nahrmittel GmbH 50%

UNIFERM Verwaltungs GmbH 50%

Brede 8, 59368, Werne, Germany

UNILOG GmbH 50%

Ireland

Rathcore Golf & Country Club, Rathcore, Co. Meath,

A83KP98, Ireland

Independent Milk Laboratories Ltd 50%

Japan

36F Atago Green Hills Mori Tower, 2-5-1 Atago,

Minato-ku, Tokyo 105-6236, Japan

Twinings Japan Co Ltd 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

C/Raimundo Fernández, Villaverde 28, Madrid, Spain

Compañía de Melazas, S.A. (in liquidation) 50%

United States

The Corporation Trust Company, Corporation Trust

Center, 1209 Orange Street, Wilmington DE 19801,

United States

Stratas Foods LLC 50%

Stratas Receivables I LLC 50%

FINANCIAL STATEMENTS

186 Associated British Foods plc Annual Report 2023

Associates % holding Associates % holding

United Kingdom

Pacioli House, Duncan Close, Moulton Park Industrial

Estate, Northampton, NN3 6WL, United Kingdom

Bakers Basco Limited 20%

Paternoster House, 65 St. Paul’s Churchyard,

London, EC4M 8AB, United Kingdom

C. Czarnikow Limited 43%

Czarnikow Group Limited 43%

C. Czarnikow Sugar Futures Limited 43%

C. Czarnikow Sugar Limited 43%

Sugarworld Limited 43%

Australia

283 Flagstaff Road, 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, n.º 2.041, 11º

andar- Vila Olímpia, CEP 04.543-011, São Paulo, Brazil

Czarnikow Brasil Ltda 43%

Av Pres Juscelino Kubitschek, 2041, floor 11, São

Paulo, Brazil

Cz Energy Comercializado Ra De Etanol S.A 21%

China

Room 17A01, 232 Zhong Shan 6

Road, Guangzhou

City, Guangdong Province, 510180, China

C. Czarnikow Sugar (Guangzhou) Company Ltd 43%

Colombia

Cl. 16 Sur #43a-49, El Poblado, Medellín, El Poblado,

Medellín, Antioquia, Colombia

Czarnikow Colombia S.A.S. 43%

India

Plot No N46, House No 4-9-10, Hmt Nagar, Hyderabad

TG, 500076, India

Huoban Energy 9 Private Limited 34%

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

PT Indo Fermex 49%

P.T. Jaya 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 Srl 43%

Kenya

I & M Bank House, Second Ngong Avenue,

P.O. Box 10517, Nairobi 00100, Kenya

Czarnikow East Africa Limited 43%

Mauritius

No 5 President John Kennedy Street,

Port Louis, Mauritius

Sukpak Limited 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

c/o KPMG, 18 Viaduct Harbour Avenue, Maritime

Square, Auckland, New Zealand

New Food Coatings (New Zealand) Limited 50%

Philippines

Unit A, 103 Excellence Avenue, Carmelray

Industrial Park 1, Canlubang, Calamba,

Laguna, Philippines

New Food Coatings (Philippines) Inc. 50%

5F Don Jacinto Building, Dela Rosa cor. Salcedo

Streets, Legaspi Village, 1229 Makati City, Philippines

CZ Philippines, Inc. 43%

Singapore

3 Phillip Street, #14-01 Royal Group Building,

Singapore 048693

C. Czarnikow Sugar Pte. Limited 43%

South Africa

1 Gledhow Mill Road, Gledhow, Kwadukuza, 4450,

South Africa

Gledhow Sugar Company (Pty) Limited 30%

Tanzania

Floor Amani Place, Ohio Street, PO Box 38568,

Dar-es-Salaam, Tanzania

Czarnikow Tanzania Limited 43%

Msolwa Mill Office, Kidatu, Tanzania

Kilombero Sugar Distributors Limited 20%

Thailand

909 Moo 15, Teparak Road, Tambol Bangsaothong,

King Amphur Bangsaothong, Samutprakarn, Thailand

Newly Weds Foods (Thailand) Ltd 50%

1203, 12

Floor, Metropolis Building,

725 Sukhumvit Road, North Klongton, Wattana,

Bangkok, 10110, Thailand

Czarnikow (Thailand) Limited 43%

United States

333 SE 2

Avenue, Suite 2860, Miami,

FL 33131, USA

C. Czarnikow Sugar Inc. 43%

Vietnam

Floor, IMC Tower, 62 Tan Quang Khai, Tan Dinh

Ward, District 1, Ho Chi Minh City, Vietnam

Czarnikow (Vietnam) Limited 43%

Associates

A list of the Group’s associates as at 16 September 2023 is given below. All associates are included in the Group’s financial

statements using the equity method of accounting.

187Associated British Foods plc Annual Report 2023

29. Group entities continued

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 16 September 2023:

Company name Company numberCompany name Company number

A.B. Exploration Limited 00487323

AB Mauri China Limited 12109070

AB Mauri Europe Limited 02883738

AB Sugar China Holdings Limited 09468366

AB Sugar China Limited 09469163

ABF (No.1) Limited 04668120

ABF (No.2) Limited 03369799

ABF (No.3) Limited 00155305

ABF BRL Finance Ltd 11001902

ABF Finance Limited 04659735

ABF Food Tech Investments Limited 00172141

ABF Funding 05380813

ABF HK Finance Limited 07761084

ABF Japan Limited 00492278

ABF PM Limited 00486887

A.B.F. Properties Limited 00683361

ABF UK Finance Limited 07267422

ABF US Holdings Limited 05659249

ABF ZMW Finance Limited 13485724

ABN (Overseas) Limited 00145374

Atrium 100 Properties Limited 04502487

Atrium 100 Stores Holdings Limited 04660969

Atrium 100 Stores Limited 05007953

British Sugar (Overseas) Limited 02400085

BSO (China) Limited 03799608

G. Costa (Holdings) Limited 03679738

Mountsfield Park Finance Limited 07882348

Twining Crosfield & Co Limited 00144900

Worldwing Investments Limited 02778854

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

188 Associated British Foods plc Annual Report 2023

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, exceptional items and profits less

losses on sale and closure of businesses.

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

Earnings and

earnings per

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, exceptional

items and profits less losses on sale and closure of businesses,

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

189Associated British Foods plc Annual Report 2023

30. Alternative performance measures continued

APM

Closest equivalent

IFRS measure Definition/purpose Reconciliation/calculation

Exceptional

items

No direct

equivalent

Exceptional items are items of income and expenditure which are

material 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

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

Income tax

expense

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, and net debt assumed in acquisitions.

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

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

190 Associated British Foods plc Annual Report 2023

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.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 in investing activities and interest paid within net cash used in

financingactivities.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 is the amount on the face of the cash flow statement, plus the £3m

(2022– £3m) non-operating intangible amortisation which is not included (2022 – £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 at bank and in hand and cash equivalents

less current loans and overdrafts, and an estimate of inaccessible cash,

plus the undrawn RCF.

Cash at bank and in hand and cash equivalents are set out in note 18.

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 at bank and in hand and cash equivalents.

The RCF is long-term, legally committed and contains no

performancecovenants.performance covenants.

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 capital as a

percentage

ofrevenueof revenue

No direct

equivalent

This measure expresses (Average) working capital as a percentage of

revenue.

Consistent with the

definition given

191Associated British Foods plc Annual Report 2023

30. Alternative performance measures continued

Note A

Grocery

£m

Ingredients

£m

Agriculture

£m

Sugar

£m

Retail

£m

Central and

disposed

businesses

£m

Total

£m

2023

External revenue from continuing businesses 4,198 2,157 1,840 2,547 9,008 – 19,750

Adjusted operating profit 448 214 41 169 735 (94) 1,513

Adjusted operating margin % 10.7% 9.9% 2.2% 6.6% 8.2% 7.7%

2022

External revenue from continuing businesses 3,735 1,827 1,722 2,016 7,697 – 16,997

Adjusted operating profitAdjusted operating profit 399 159 47 162 756 (88) 1,435

Adjusted operating margin % 10.7% 8.7% 2.7% 8.0% 9.8% 8.4%

Note B

Grocery

£m

Ingredients

£m

Agriculture

£m

Sugar

£m

Retail

£m

Central and

disposed

businesses

£m

Total

£m

2023

External revenue from continuing businesses

atactual ratesat actual rates 4,198 2,157 1,840 2,547 9,008 – 19,750

2022

External revenue from continuing businesses

atactual ratesat actual rates 3,735 1,827 1,722 2,016 7,697 – 16,997

Impact of foreign exchange 51 46 3 (40) 137 – 197

External revenue from continuing businesses

atconstant currency at constant currency 3,786 1,873 1,725 1,976 7,834 – 17,194

% change at constant currency +11% +15% +7% +29% +15% +15%

Grocery

£m

Ingredients

£m

Agriculture

£m

Sugar

£m

Retail

£m

Central and

disposed

businesses

£m

Total

£m

2023

Adjusted operating profit at actual rates 448 214 41 169 735 (94) 1,513

2022

Adjusted operating profit at actual rates 399 159 47 162 756 (88) 1,435

Impact of foreign exchange 16 8 1 (5) 4 – 24

Adjusted operating profit at constant currency 415 167 48 157 760 (88) 1,459

% change at constant currency +8% +28% -15% +8% -3% +4%

Note C

2023 2022

Adjusted earnings per share (pence) 141.8 131.1

Dividends relating to the year (pence) – excluding special dividend proposed 47.3 43.7

Dividend cover 3 3

Notes forming part of the financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

192 Associated British Foods plc Annual Report 2023

Note D

From the cash flow statement

2023

£m

2022

£m

Purchase of property, plant and equipment 997 680

Purchase of intangibles 76 89

Capital expenditure 1,073 769

Note E

From the cash flow statement

2023

£m

2022

£m

Purchase of property, plant and equipment 997 680

Purchase of intangibles

76 89

Purchase of subsidiaries, joint ventures and associates

94 154

Purchase of other investments 4 7

Gross investment 1,171 930

Note F

2023

£m

2022

£m

Adjusted operating profit 1,513 1,435

Charged to adjusted operating profit:

Depreciation of property, plant and equipment 531 521

Amortisation of operating intangibles 44 24

Depreciation of right-of-use assets and non-cash lease adjustments 273 281

Adjusted EBITDA 2,361 2,261

Net debt including lease liabilities (2,265) (1,764)

Financial leverage ratio 1.0 0.8

Note G

2023

£m

2022

£m

Adjusted EBITDA (see note F) 2,361 2,261

Repayment of lease liabilities net of incentives received

(246) (275)

Working capital

(216) (729)

Capital expenditure (see note D)

(1,073) (769)

Purchase of subsidiaries, joint ventures and associates

(94) (154)

Sale of subsidiaries, joint ventures and associates

4 –

Net interest paid

(74) (97)

Income taxes paid

(341) (304)

Share of adjusted profit after tax from joint ventures and associates

(127) (112)

Dividends received from joint ventures and associates

107 93

Other (32) 2

Free cash flow 269 (84)

Note H

2023

£m

2022

£m

Cash at bank and in hand and cash equivalents 1,457 2,121

Current loans and overdrafts

(168) (157)

Estimated inaccessible cash (73) (106)

RCF 1,500 1,500

Total liquidity 2,716 3,358

193Associated British Foods plc Annual Report 2023

FINANCIAL STATEMENTS

Company balance sheet

at 16 September 2023

Note

2023

£m

2022

£m

Fixed assets

Intangible assets 1 – –

Right-of-use assets 2 6 9

Investments in subsidiaries 3 1,296 1,287

1,302 1,296

Current assets

Debtors:

• due within one year 4 4,165 3,163

• due after one year 4 129 98

Employee benefits assets – due after one year 5 1,397 1,366

Derivative assets 31 30

Cash and cash equivalents 924 1,408

6,646 6,065

Creditors: amounts falling due within one year

Bank loans and overdrafts – unsecured (81) (2)

Lease liabilities 2 (3) (3)

Other creditors 7 (4,411) (4,013)

Derivative liabilities – (3)

(4,495) (4,021)

Net current assets 2,151 2,044

Total assets less current liabilities 3,453 3,340

Creditors: amounts falling due after one year

Bank loans – unsecured (394) (481)

Lease liabilities 2 (3) (7)

Amounts owed to subsidiaries (200) (196)

Employee benefits liabilities 5 (20) (22)

Deferred tax liabilities 6 (325) (324)

(942) (1,030)

Net assets 2,511 2,310

Capital and reserves

Issued capital 8 44 45

Capital redemption reserve 8 3 2

Hedging reserve 8 2 –

Profit and loss reserve 8 2,462 2,263

Equity shareholders’ funds 2,511 2,310

The Company’s profit for the 52 weeks ended 16 September 2023 was £1,043m (52 weeks ended 17 September 2022 – £426m).

The financial statements on pages 194 to 200 were approved by the Board of Directors on 7 November 2023 and were signed on its

behalf by:

Michael McLintock Eoin Tonge

Chairman Finance Director

194 Associated British Foods plc Annual Report 2023

Company statement of changes in equity

for the 52 weeks ended 16 September 2023

capital

£m

Capital

redemption

reserve

£m

Hedging

reserve

£m

Profit

and loss

reserve

£m

Total

£m

Balance as at 18 September 2021 45 2 4 1,692 1,743

Total comprehensive income

Profit for the period recognised in the income statement – – – 426 426

Remeasurement of defined benefit schemes – – – 742 742

Deferred tax associated with defined benefit schemes – – – (186) (186)

Items that will not be reclassified to profit or loss – – – 556 556

Movements in cash flow hedging position – – (5) – (5)

Deferred tax associated with movements in cash flow hedging position – – 1 – 1

Items that are or may be subsequently reclassified to profit or loss – – (4) – (4)

Other comprehensive income – – (4) 556 552

Total comprehensive income – – (4) 982 978

Transactions with owners

Dividends paid to equity shareholders – – – (380) (380)

Net movement in own shares held – – – (31) (31)

Total transactions with owners – – – (411) (411)

Balance as at 17 September 2022 45 2 – 2,263 2,310

Total comprehensive income

Profit for the 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 movements 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

195Associated British Foods plc Annual Report 2023

FINANCIAL STATEMENTS

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 goodwill arising on business

combinations and operating intangibles. Goodwill is defined

under ‘Business acquisitions’ on page 134 of the consolidated

financial statements. The Companies Act 2006 requires goodwill

to be amortised on a systematic basis over its useful economic

life. Under FRS 101, goodwill is not amortised but is instead

reviewed for impairment annually or whenever there are

indicators of impairment. The Company previously invoked a

‘true and fair view override’ to overcome the requirement to

amortise goodwill in the Companies Act 2006.

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.

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 135.

Income tax

The accounting policy for income tax is the same as for the

Group, which is set out on page 135.

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 and cash equivalents

Cash and cash equivalents comprise bank and cash balances,

deposits and short-term investments with original maturities

ofthree months or less.

Leases

The accounting policy for leases is the same as for the Group,

which is set out on page 137.

Accounting policies

for the 52 weeks ended 16 September 2023

196 Associated British Foods plc Annual Report 2023

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 139.

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.

Accounting estimates and judgements

for the 52 weeks ended 16 September 2023

197Associated British Foods plc Annual Report 2023

Notes to the Company financial statements

for the 52 weeks ended 16 September 2023

FINANCIAL STATEMENTS

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

2023

£m

2022

£m

Cost

At beginning and end of year 18 18

Depreciation

At beginning of year 9 6

Depreciation for the year 3 3

At end of year 12 9

Net book value

At beginning of year 9 12

At end of year 6 9

Lease liabilities

2023

£m

2022

£m

Cost

At beginning of year 10 14

Repayment of lease liabilities (4) (4)

At end of year 6 10

Current 3 3

Non-current 3 7

6 10

Leases relate to land and buildings.

3. Investments in subsidiaries

2023

£m

2022

£m

At beginning of year 1,287 720

Additions 9 567

At end of year 1,296 1,287

Additions in the year comprise £9m relating to the allocation of shares under equity-settled share-based payment plans to employees

of the Company’s subsidiaries (2022 – £556m in the existing investment in ABF Investments plc, a wholly owned subsidiary, and

£11m relating to the allocation of shares under equity-settled share-based payment plans to employees of the Company’s subsidiaries).

198 Associated British Foods plc Annual Report 2023

4. Debtors

2023

£m

2022

£m

Amounts falling due within one year

Amounts owed by subsidiaries 4,079 3,104

Other debtors 16 18

Corporation tax recoverable 70 41

4,165 3,163

Amounts falling due after one year

Amounts owed by subsidiaries 129 98

5. Employee entitlements

2023

assets

£m

2022

assets

£m

2023

liabilities

£m

2022

liabilities

£m

2023

net

£m

2022

net

£m

Reconciliation of changes in assets and liabilities

At beginning of year 3,735 4,315 (2,391) (3,719) 1,344 596

Current service cost – – (23) (34) (23) (34)

Employee contributions 5 6 (5) (6) – –

Employer contributions 28 27 – – 28 27

Benefit payments (140) (136) 139 138 (1) 2

Interest income/(expense) 169 75 (107) (64) 62 11

Return on scheme assets less interest income (244) (552) – – (244) (552)

Actuarial gains arising from changes infinancialassumptions – – 252 1,325 252 1,325

Actuarial gains arising from changes indemographicassumptions – – 19 11 19 11

Experience losses on scheme liabilities – – (60) (42) (60) (42)

At end of year 3,553 3,735 (2,176) (2,391) 1,377 1,344

The net pension asset of £1,377m comprises a funded scheme with a surplus of £1,397m and an unfunded scheme with

adeficitof£20m.

Further details of the Associated British Foods Pension Scheme are contained in note 12 of the consolidated financial statements.

6. Deferred tax assets and liabilities

Employee

benefits

£m

Share-based

payments

£m

Other

£m

Total

£m

At 18 September 2021 (149) 3 9 (137)

Amount charged to the income statement (1) – 1 –

Amount charged to equity (186) – 1 (185)

Disposals – – (2) (2)

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

Effect of changes in tax rates on the income statement (2) – – (2)

At 16 September 2023 (344) 6 13 (325)

7. Other creditors

2023

£m

2022

£m

Amounts falling due within one year

Accruals and deferred income 69 67

Amounts owed to subsidiaries 4,342 3,946

4,411 4,013

199Associated British Foods plc Annual Report 2023

FINANCIAL STATEMENTS

8. Capital and reserves

Share capital

At 16 September 2023, the Company’s issued and fully paid share capital comprised 767,953,088 ordinary shares of 5

⁄

p, each

carrying one vote per share (2022 – 791,674,183). Total nominal value was £44m (2022 – £45m).

Capital redemption reserve

£2m arose in 2010 following redemption of two million £1 deferred shares at par. £1m arose in 2023 following the purchase

andsubsequent cancellation of shares (2022 – nil). 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Company considers these to be insurance arrangements and accounts for them as such. 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 £480m of guarantees in the ordinary course of business (2022 – £484m).

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:

Sub note

2023

£000

2022

£000

Charges to Wittington Investments Limited for services provided by the Company 985 930

Dividends paid by the Company and received in a beneficial capacity by:

i. trustees of the Garfield Weston Foundation and their close family 1 11,219 12,361

ii. directors of Wittington Investments Limited who are not trustees of the Foundation

and their close family 1 2,159 2,322

iii. directors of the Company who are not trustees of the Foundation and are not

directors of Wittington Investments Limited 1 89 128

Interest income earned from non-wholly owned subsidiaries 2 1,647 743

Amounts due from non-wholly owned subsidiaries 2 14,780 10,008

1. Details of the nature of the relationships with these bodies are set out in note 28 of the consolidated financial statements.

2. 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 100 to 115.

Employees

The Company had an average of 229 employees (2022 – 208). Remuneration was £35m (2022 – £34m).

Audit fees

Note 2 to the consolidated financial statements of the Group provides details of the remuneration of the Company’s auditors.

200 Associated British Foods plc Annual Report 2023

Progress report

Saturday nearest to 15 September

2019

£m

2020

£m

2021

£m

2022

£m

2023

£m

Revenue 15,824 13,937 13,884 16,997 19,750

Adjusted operating profit 1,421 1,024 1,011 1,435 1,513

Exceptional items (79) (156) (151) (206) (109)

Transaction costs (2) (2) (3) (6) (5)

Amortisation of non-operating intangibles (47) (59) (50) (47) (41)

Acquired inventory fair value adjustments (15) (15) (3) (5) (3)

Profits less losses on disposal of non-current assets 4 18 4 7 28

Profits less losses on sale and closure of businesses (94) (14) 20 (23) (3)

Finance income 15 11 9 19 48

Finance expense (42) (124) (111) (111) (128)

Other financial income/(expense) 12 3 (1) 13 40

Profit before taxation 1,173 686 725 1,076 1,340

Taxation (277) (221) (227) (356) (272)

Profit for the period 896 465 498 720 1,068

Basic and diluted earnings per ordinary share (pence) 111.1 57.6 60.5 88.6 134.2

Adjusted earnings per share (pence) 137.5 81.1 80.1 131.1 141.8

Dividends per share (pence) 46.35 nil 26.7 43.7 47.3

201Associated British Foods plc Annual Report 2023

FINANCIAL STATEMENTS

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

EY Ernst & Young LLP, the Company’s statutory auditor (also refers

to associated firms of Ernst & Young LLP worldwide who work

on the audit of the consolidated financial statements)

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 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 for Climate-related Financial Disclosures

UKEB UK Endorsement Board

UK MCD UK Mandatory Climate Disclosures

Glossary

202 Associated British Foods plc Annual Report 2023

Company directory

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

8 December 2023

Interim results to be announced

25 April 2024

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 https://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

This report contains forward-looking statements. These have been made by the directors in good faith based on the information

available to them up to the time of their approval of this report. The directors can give no assurance that these expectations will

proveto have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such

forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements.

The directors undertake no obligation to update any forward-looking statements whether as a result of new information, future

eventsor otherwise.

203Associated British Foods plc Annual Report 2023