• Associated British Foods is a diversified international food, ingredients and retail group with sales of £13.9bn, 128,000 employees and operations in 53 countries across Europe, Africa, the Americas, Asia and Australia.
  • From a bakery founded in 1935, to grocery stores and a clothing brand, from bread to sugar and cereals, to enzymes, yeast, animal feed and more.
  • The company's grocery brands occupy leading positions in markets across the globe. In the UK, 9 out of 10 households use its brands.
  • The company's Primark is one of the largest fashion retailers in Europe and the largest clothing, footwear and accessories retailer by volume in the UK.


Company Overview

Associated British Foods (LSE:ABF, OTC:ASBFF) is a diversified international food, ingredients and retail group with sales of £13.9bn, 128,000 employees and operations in 53 countries across Europe, Africa, the Americas, Asia and Australia. The company's purpose is to provide safe, nutritious, affordable food, and clothing that is great value for money. With the breadth of its business, its brands and global reach, ABF aims to consistently deliver value to its stakeholders.1

Business Model


Company History

From a bakery founded in 1935, to grocery stores and a clothing brand, from bread to sugar and cereals, to enzymes, yeast, animal feed and more. The evolution of Associated British Foods (ABF) is one of considered expansion, growing popular brands and making acquisitions in adjacent businesses and markets for over 85 years. The result is a group of food and clothing businesses, many of which are market-leading, that are loved by consumers the world over.2

1935Allied Bakeries, the forerunner to ABF, is established by Garfield Weston
1949Allied Bakeries acquires Ryvita
1950First investments into Australia and New Zealand
1958Garfield Weston establishes the Garfield Weston Foundation
1960Associated British Foods is created
1963Acquisition of Fine Fare
1964Acquisition of Twinings
1969Founding of Primark
1980ABF begins to invest in bakery ingredients
1990ABF expands into the US
1991Acquisition of British Sugar
1993Formation of AB Agri
1999Acquisition of AB Enzymes
2000ABF expands its US footprint
2002Acquisition of Ovaltine
2004Primark acquires Littlewoods' stores
2006ABF acquires controlling stake in Illovo
2006Primark begins its international expansion with the opening of its first store in Spain
2007Formation of AB World Foods
2008Acquisition of Jordans and Dorset cereal brands
2012Acquisition of Elephant Atta
2015Primark opens its first store in the US
2017Acquisition of specialist consumer brands Acetum, Yumi’s and Anthony’s Goods
2019Primark celebrates 50th anniversary
2020Supporting the nation during the COVID-19 pandemic
2021Primark launches the Primark Cares sustainability strategy


Business Segments

The company have five diverse segments


The company's grocery brands occupy leading positions in markets across the globe. In the UK, 9 out of 10 households use its brands.3

Grocery comprises consumer-facing businesses that manufacture and market a variety of well-known household brands both nationally and internationally, including Twinings, Ovaltine, Patak’s, Kingsmill, Jordans, Tip Top, Yumi’s and Mazola.

Each of its grocery businesses pursues an independent strategy appropriate to its particular market position and stage of development. Twinings Ovaltine, Acetum, Jordans Dorset Ryvita and AB World Foods have had considerable success extending their reach into new and emerging markets, whilst some are focused on developing brands in their core domestic markets.




AB Sugar is a leading producer of sugar and sugar-derived co-products in Africa, the UK, Spain and north China.4

The company operate 27 plants in 10 countries and have 32,000 employees. Associated British Foods has the capacity to produce some 4.5 million tonnes of sugar annually. The company's products are sold into industry sectors including food and drink, pharmaceutical, industrial, agricultural and horticultural, power and energy.

In Europe, Azucarera is the largest producer in Iberia and British Sugar is the sole processor of the UK beet sugar crop. Illovo Sugar Africa is the biggest sugar processor in Africa and has operations in Eswatini, Malawi, Mozambique. South Africa, Tanzania and Zambia.

Whilst sugar is at the heart of what the company do, the sugar production process provides opportunities to do more than simply manufacture an ingredient. Associated British Foods is an innovative and advanced manufacturer, producing a wide range of sugar and co-products. Additionally, Associated British Foods is an energy and power supplier and, as part of the wider agri-business value chain, Associated British Foods is an important contributor to the economy across all its locations.


  • Azucarera
  • Bwana Sukari
  • Illovo "Trusted Quality"
  • Whitespoon


AB Agri is a leading international agri-food business operating across the supply chain, producing and marketing animal feed, nutrition and technology-based products.5

With an expert understanding of agriculture and animal nutrition, its philosophy is to improve feed production, so that nutritious and affordable food is produced safely and responsibly.

Across the agricultural supply chain, its products, data insight and technological innovation enable its customers to produce and process high-yielding, safe and nutritious food in a responsible way, using fewer chemicals and antibiotics, safeguarding natural resources and creating less waste and lower emissions. Employing over 3,000 people around the world, the company sell products into 85 countries and continue to grow its global operations.


  • AB Agri
  • AB Neo
  • ABN
  • AB Vista
  • Amur
  • Bodit
  • Frontier
  • Intellync
  • KW Alternative Feeds
  • Livalta
  • Premier Nutrition
  • Sportsman Game Feeds
  • Trident


The company's Ingredients businesses are leaders in yeast and bakery ingredients and supply specialty ingredients to the food, nutrition, feed and pharmaceutical industries.6

Ingredients is comprised of its two specialty Ingredients businesses, AB Mauri and ABF Ingredients.

AB Mauri has a global presence in bakers’ yeast with significant market positions in the Americas, Europe and Asia. Associated British Foods is a technology leader in bakery ingredients, supplying bread improvers, dough conditioners and bakery mixes to industrial and craft bakers across the globe.

ABF Ingredients is a global leader in specialty ingredients, offering innovative, differentiated and value-added products to the food, nutrition, pharmaceutical, animal feed and industrial sectors. The company's ingredients are an essential part of products that are equally likely to be found in the kitchen and medicine cabinet as in production units and research laboratories.


  • AB Mauri
  • ABF Ingredients
  • AB Enzymes
  • Ohly
  • PGP International
  • SPI Pharma


Primark is one of the largest fashion retailers in Europe and the largest clothing, footwear and accessories retailer by volume in the UK.7

Primark is an international fashion retail group with 16.8 million sq ft of selling space across 398 stores in 14 countries and has more than 70,000 employees, serviced by a network of nine depots covering 7.1 million sq ft. Associated British Foods is famous for offering great value for customers and the company pride itself  on its wide selection of products, from everyday essentials to the latest trends, all at prices everyone can afford.

Primark’s business model is based on doing things differently, allowing it to keep prices low and offer the best value on the high street. The company achieve this by doing very little advertising, focusing instead on marketing through its website and popular social media channels and store windows; only selling its products in-store; and making savings on things like simple packaging. Primark delivers a vision of making high-quality affordable fashion accessible to everyone, put simply: Amazing Fashion, Amazing Prices. Although a bricks-and-mortar retailer, Associated British Foods has a strong digital presence and a high level of customer engagement with over 24 million followers across its social media channels.


  • Primark


Year ended 18 September 2021# of storessq ft 000
Republic of Ireland361,076


Financial Highlights

Group revenue for the year ended 18 September 2021,was in line with last year on a reported basis at £13.9bn. On a reported basis adjusted operating profit of £1,011m was 1% lower than last financial year. In calculating adjusted operating profit, the amortisation charge on non-operating intangibles, profits less losses on disposal of non-current assets, transaction costs, amortisation of acquired inventory fair value adjustments and exceptional items are excluded from statutory operating profit.8

The income statement this year included a net charge for exceptional items of £151m. This mainly comprised the impairment of certain plant and equipment in its sugar business. In Spain, its current view for yield and sugar content from beet sugar and lower margins due to the expected increase in future raw refining volumes, resulted in a non-cash exceptional charge of €136m to write-down the net asset value of this business. Given the ongoing trading challenges in some of its smaller sugar businesses, following a review of its projections for the forecast evolution of beet area and yields, Associated British Foods has made a non-cash adjustment of £21m to the relevant net asset values as an exceptional charge this year. An inventory charge of £21m in Primark was taken at the half year which related to the clearance from its stores before reopening after lockdown of certain seasonal items on display and which could not be sold before the end of the season. This provision was used during the second half of the year. Prior year exceptional items included a mark-down provision of £22m for potential damage to Primark inventory stored on its behalf by suppliers for longer than usual as a result of the pandemic. Minimal damage was found and the majority of the provision was released this year.

On an unadjusted basis, statutory operating profit was in line with last year at £808m.The strengthening of sterling this year against some of its trading currencies resulted in a loss on translation of £36m

Net finance expense decreased this year due to the repayment of £25m of private placement debt and no RCF interest charges following the repayment of the facility at the end of the last financial year. Profits on the sale and closure of businesses amounted to £20m and profits less losses on sale of non-current assets were £4m.

Statutory profit before tax on a reported basis was up 6% to £725m. On its adjusted basis profit before tax was down by 1% to £908m.

The total tax charge for the year of £227m benefited from a credit of £27m (2020 - £42m) for tax relief on the amortisation of non-operating intangible assets, amortisation of acquired inventory fair value adjustments, profits on disposal of non-current assets, losses on disposal of businesses and exceptional items.

Earnings attributable to equity shareholders in the current year were £478m and the weighted average number of shares in issue during the year, which is used to calculate earnings per share, was 790 million (2020 – 790 million). Given the marginal decline in operating profits and the reduction in the adjusted effective tax rate from 28.8% to 28.1%, earnings per ordinary share were 5% higher than last year at 60.5p. Adjusted earnings per share, which provides a more consistent measure of trading performance, declined by 1% from 81.1p to 80.1p.

Acquisitions and Disposals

In May 2021, the Group’s Ingredients business acquired DR Healthcare España, a Spanish enzymes producer for a total consideration of £14m.

During the period the Group contributed £43m to the bakery ingredients joint venture in China with Wilmar International. These businesses were classified as a disposal group and held for sale at the previous year end. In August 2021, the Group agreed the sale, subject to regulatory approval, of a further factory in China to this joint venture and a non-cash reversal of £10m for the impairment of these assets has been included in profit on sale and closure of business.

Closure provisions of £3m relating to disposals made in previous years which are no longer required were released to sale and closure of business in Ingredients and Grocery, both in Asia Pacific.

Balance sheet

Non-current assets of £10.8bn were £0.1bn lower than last year. This was driven by a decrease in the investment in property, plant and equipment and right-of-use assets with depreciation, amortisation and impairments higher than capital expenditure and acquisitions made in the year. This was mostly offset by an increase in employee benefits assets as the surplus in the UK defined benefit pension scheme improved significantly.

Net cash at the year end excluding lease liabilities was £1.9bn compared with net cash at the end of last year of £1.6bn reflecting the strong operating cash flow in the year. Net debt including lease liabilities was £1.4bn compared with £2.1bn last year.

The Group’s net assets of £10bn were £0.6bn higher than last year. Return on capital employed for the Group which is calculated by expressing adjusted operating profit as a percentage of the average capital employed for the year, was higher this year at 9.8% compared with 9.5% last year.

Cash flow

Net cash inflow from operating activities decreased from £1,753m last year to £1,413m this year mainly as a result of the increase in the change in working capital compared to the prior year. Capital expenditure increased by £5m compared to the prior year and £21m was realised from the sale of property, plant and equipment. The net cash outlay on acquisitions and disposals was £23m.

Tax paid in the year amounted to £298m (2020 - £254m). The increase in tax paid was primarily due to the state aid payment of £23m and tax top up payments made due to strong final quarter results at the end of 2020.


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Created by Asif Farooqui on 2022/01/04 06:46

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