Associated British Foods Plc - Interim Results Announcement

ABF delivers a robust set of results

 

Financial Headlines

 

 

Actual

Constant currency

·      Group revenue

£7,532m

+1%

+2%

·      Adjusted operating profit

£639m

-1%

-2%

·      Adjusted profit before tax

£627m

In line

 

·      Adjusted earnings per share

61.1p

In line

 

·      Dividend per share

12.05p

+3%

 

·      Gross investment

£433m

 

 

·      Net cash

£386m

 

 

·      Statutory operating profit down 14% to £534m, statutory profit before tax down 15% to £515m, and a reduction in basic earnings per share of 19% to 49.2p mainly as a result of an exceptional charge of £79m included in this year's income statement.

George Weston, Chief Executive of Associated British Foods, said:
 

"This is a robust set of results. Profit at AB Sugar was substantially reduced but, from this period, we expect our sugar profitability to improve. The strong underlying growth in Grocery profits demonstrates good momentum. Primark delivered excellent profit growth, driven by further development of our customer experience and selling space expansion."

 

Adjusted operating profit is stated before the amortisation of non-operating intangibles, profits less losses on disposal of non-current assets, transaction costs, amortisation of acquired inventory fair value adjustments and exceptional items. These items, together with profits less losses on the sale and closure of businesses, are excluded from adjusted profit before tax and adjusted earnings per share. References to operating profit in the Operating Review are based on this adjusted operating profit measure.

Constant currency figures are derived by translating the 2018 results at 2019 average exchange rates, except for countries where consumer price inflation has escalated to extreme levels, in which case actual exchange rates are used, applied to local currency data before the application of IAS 29.

Underlying profit for Grocery excludes a £12m charge in 2019 in respect of the closure of the Twinings tea factory in Jinqiao, China.

 

For further information please contact:

Until 15.00 only

Associated British Foods:

John Bason, Finance Director
Tel: 020 7638 9571

Citigate Dewe Rogerson:

Chris Barrie
Tel: 020 7638 9571

After 15.00

John Bason, Finance Director
Tel: 020 7399 6500

 

For release 24 April 2019

INTERIM RESULTS ANNOUNCEMENT

For the 24 weeks ended 2 March 2019

 

CHAIRMAN'S STATEMENT

 

Revenue for the group of £7.5bn in the first half was 1% ahead of last year and adjusted operating profit of £639m was 1% lower than last year, at actual exchange rates. There was a minimal effect on the translation of these results arising from changes in sterling exchange rates. Net financing costs reduced against the same period last year as a result of an increase in the surplus for our defined benefit pension schemes between the 2017 and 2018 year ends and favourable interest rate movements. As a result, adjusted earnings per share were in line with last year at 61.1 pence.

The statutory operating profit for the period was 14% down at £534m. This year the statutory operating profit includes exceptional items of £79m. Low bread prices and strong competition have been a feature of the trading environment for Allied Bakeries. Notice of the termination of its largest private label manufacturing contract has led to a non-cash impairment of £65m to the assets of that business. A pension service cost of £14m has also been taken for the equalisation of Guaranteed Minimum Pensions for members of the company's defined benefit pension scheme for the period between 1990 and 1997. As a result, the statutory profit before tax reduced by 15% to £515m and basic earnings per share reduced by 19% to 49.2 pence.

We continued to invest for the long term with a gross investment of £433m. Capital expenditure was £382m with over half of this spent on Primark's expansion, including our new store at Birmingham High Street which opened in April, becoming our largest Primark store. In our food businesses, investments were made to expand capacity, including a new state-of-the-art Ryvita bakery in Bardney, Lincolnshire and Westmill's new noodle line in Manchester. Cost reduction remained a focus for capital projects in our sugar, yeast and bakery ingredients businesses, while the expansion of Twinings' tea factory in Poland enabled the consolidation of production from, and closure of, its facility in China. In September 2018 we acquired Yumi's Quality Foods, an Australian manufacturer of premium chilled dips and snacks.

Cash flow before acquisitions and disposals improved compared to the corresponding period last year driven by a reduction in the usual seasonal working capital outflow in the first half. Capital expenditure was in line with last year and consideration paid for businesses acquired during the period amounted to £47m. Together with the payment of the final dividend, these resulted in a net cash balance for the group at the half year of £386m, up from £123m at this time last year, and compared to net cash of £614m at the beginning of the financial year.

Board

As noted in the Annual Report, in September 2018 we welcomed Graham Allan to the board as a non-executive director. We look forward to working with him.

After twelve years as a director on our board, Javier Ferrán stood down at our Annual General Meeting in December, and I reiterate my thanks to him for his time and commitment throughout these years. Ruth Cairnie took on the responsibilities of Senior Independent Director.

Dividends

The board has declared an interim dividend of 12.05 pence per share, an increase of 3% on last year. The dividend will be paid on 5 July 2019 to shareholders registered at the close of business on 7 June 2019.

Outlook

In the first half, excellent profit growth was delivered by Primark and, on an underlying basis, by Grocery. This growth was mainly offset by the decline in AB Sugar. In the second half we expect the underlying growth in Grocery to continue. Our full year outlook for Primark profit is unchanged and will reflect the expected margin reduction in the second half due to the effect of a stronger US dollar on purchases.

Our full year outlook for the group is unchanged, with adjusted earnings per share expected to be in line with last year.

 

Michael McLintock

Chairman

 

 

OPERATING REVIEW

 

Group revenue of £7.5bn was 2% ahead of last year, and adjusted operating profit was 2% behind last year, at constant currency. The group delivered a robust set of results in this period, with excellent profit growth achieved in Primark and Grocery, offset by the expected reduction in profit at AB Sugar.

Primark's profit growth of 25% was very strong, reflecting its continued selling space expansion and improved margins, which were driven not only by favourable exchange rates but also by better buying. It was pleasing to see the business trade well in most countries and gain substantial share in competitive European retail markets. In Germany we have strengthened the management team to address our difficult trading there. Of particular note is the strength of our performance in the UK, with superior sales growth and a strong increase in our share of the overall clothing market. We unveiled our new store in Birmingham this month, our largest Primark store to date, which was greeted enthusiastically by our customers. This store showcases the breadth of the Primark offer as it is today and is a clear demonstration of Primark's continuing development.

Strong progress was made in Grocery, with excellent growth in adjusted operating profit on an underlying basis. This growth was broadly based, driven by a combination of commercial developments, cost reduction and improvements in operating efficiency. The trading performance of our recently acquired premium balsamic vinegar business, Acetum, was very pleasing especially with its development in international markets. We are focused on, and committed to, further reducing the losses at Allied Bakeries and are developing options for measures to be taken as needed.

The reduction in profit reported by our UK and Spanish sugar businesses was, as previously explained, the result of significantly lower prices which affected the EU sugar industry. With our ongoing cost reduction focus, a later phasing of profit in this financial year for Illovo, and some recovery in EU sugar prices we expect, from this period, our sugar profitability to improve.

The consequences for the group of the UK leaving the EU should be seen in the context of the diversity of our operations and geographical footprint. Primark has discrete supply chains for the UK and Eurozone and our business model, wherever possible, aligns food production with the end markets for our products. In common with many other businesses, we share a concern about the risk of abrupt changes to the UK's customs procedures. We therefore welcome the recently agreed extension to the Article 50 process and Government's intention to have a transition period in which to implement the necessary systems and processes. While we continue to regard the possibility of the UK leaving the EU without any form of transition period as unlikely, those businesses that might expect to see some disruption in these circumstances have made the preparations necessary to ensure this disruption is minimised. We do not expect these preparations to materially impact the financial performance, or position, of the group.

Sales and profit growth commentary in this Operating Review are based on results stated at constant currency. Constant currency figures are derived by translating the 2018 results at 2019 average exchange rates, except for countries where consumer price inflation has escalated to extreme levels, in which case actual exchange rates are used, applied to local currency data before the application of IAS 29.

Grocery

 

2019

2018

Actual fx

Constant fx

Revenue £m

1,721

1,672

+3%

+3%

Adjusted operating profit £m

167

159

+5%

+2%

Revenue in the first half was 3% ahead of last year at constant currency. We have adopted the new accounting standard IFRS 15 Revenue from Contracts with Customers from the start of this financial year. Revenue was reduced by £16m in the first half as certain payments to customers, which were previously expensed, are now deducted from revenue and so, on a comparable basis, Grocery revenue increased 4% on last year. The major contributors to this growth were George Weston Foods in Australia, including the first contribution from Yumi's, a full half year contribution from Acetum, Twinings Ovaltine and pricing at Allied Bakeries.

Operating profit in the first half was up 2% at constant currency. However, this includes a £12m one-time cost for the closure of the Twinings tea factory in Jinqiao, China. On an underlying basis Grocery profit increased 10% on last year and margin was well ahead. This margin improvement was driven by trading at Twinings Ovaltine, George Weston Foods, ACH in the US, and improved profitability at Acetum.

Twinings Ovaltine revenues were ahead of last year with especially strong growth in Twinings. Sales in Australia and the UK benefited from the success of the Cold Infuse teas range launched last summer leading to record market shares in both countries. In addition, good growth was achieved in the US, China and Italy. Ovaltine increased sales in the important market of Switzerland, through new product launches, and achieved good growth in Brazil, although sales in Thailand were lower than an exceptionally strong first half last year. We successfully completed the transfer of tea production from Jinqiao, China to our existing site in Swarzedz, Poland.

Jordans and Ryvita achieved good sales growth in a number of international markets, sales of Ryvita Thins grew in the UK, although profit declined due to increased raw materials costs. Strong progress was made in the period to deliver an improved manufacturing capability, with the commissioning of the new Ryvita bakery in Bardney, Lincolnshire and the closure of the production facility at Poundbury, Dorset. At AB World Foods sales of Blue Dragon increased in the UK, while strong market share gains were delivered in the US through expanded distribution and supported by the successful Patak's paste pots advertising campaign featuring Jamie Oliver. Westmill achieved further growth in sales of noodles, although rice sales declined in a highly competitive market.

At Allied Bakeries, recent customer discussions on pricing have had some success but have also led to the termination of our largest private label bread manufacturing contract by a major retailer. The effect of the volume loss is expected to be seen in our next financial year. Although our operating losses are forecast to be reduced this year, the carrying value of the assets in this business was no longer supported by our forecasts of its discounted future cash flows as a result of the termination of the private label contract. Consequently, a non-cash impairment charge of £65m has been recognised as an exceptional item in the income statement. We continue to reduce the cost base at Allied Bakeries with some actions planned in the second half. We are focused on, and committed to, further reducing these losses and are developing options for measures to be taken as needed.

We have benefited from a full period of ownership of Acetum, the leading Italian producer of Balsamic Vinegar of Modena, which was acquired in October 2017. Margins have improved with grape must prices lower than the exceptionally high level last year following a poor grape harvest in 2017. Sales increased in the important market of Germany, distribution was extended in Australia and the Mazzetti brand was introduced to the UK.

At ACH in the US sales of Mazola corn oil increased strongly, supported by successful television advertising, and delivered further volume and share growth in a competitive consumer oils market. This, coupled with lower oil commodity costs, resulted in increased operating profit and margins. Profit in Mexico benefited from improved margins for Capullo canola oil.

At George Weston Foods in Australia, sales increased and margins improved significantly. Tip Top achieved higher packaged bread volumes while the launch of Abbott's Bakery Thins was well received. Operating performance at the Don KRC meat business improved and additional improvements in factory efficiency, combined with lower procurement costs, delivered a further increase in margin. Sales grew strongly at Yumi's, the recently acquired premium chilled dips and snacks business, and resulted in significant market share gains.

Sugar

Ongoing businesses

2019

2018

Actual fx

Constant fx

Revenue £m

769

881

-13%

-11%

Adjusted operating profit £m

1

106

 

 

AB Sugar revenue was well down on last year in the first half, as expected, with lower EU contracted sugar prices impacting our UK and Spanish businesses. The decline in adjusted operating profit was the consequence of these lower prices, a poor crop in China and a later phasing of profit in Illovo this financial year. We expect the profit decline for the full year to be reflected in this first half and for second half profits to be in line with those achieved in the second half last year. Operating profit for the full year remains in line with our expectations.

EU stock levels have been tightening during 2018/19 as a consequence of the lower sugar production in the current campaign. A reduction in the total European crop area for the 2019/20 season is expected and the UK crop area will be 7% lower. Stocks are likely to remain low which should underpin spot EU sugar prices following their recent recovery.

In the UK, sugar production of 1.15 million tonnes compared to 1.37 million tonnes last year when beet yields reached record levels. The campaign benefited from good harvesting conditions, as a result of dry weather, and consistent factory throughputs. Looking ahead, there has been good take-up by growers of sugar beet contracts for the 2019/20 season. Early drilling, as a result of the mild, dry spring, should result in improved beet yields. However, the range of crop estimates is wider than usual due to the potential impact of the ban on neonicotinoids as a seed treatment from this year.

In Spain, production from beet is expected to be 270,000 tonnes, lower than last year due to adverse weather in the south. The beet sugar shortfall will be compensated by increased production from the refining of cane raws at Guadalete which has yielded 154,000 tonnes. Drilling for the 2019/20 campaign has commenced, reduced beet prices have been notified, and we have commenced the contracting of volumes with growers. The benefit of these reduced costs will be seen next financial year, although it is expected to be partially offset by a reduced crop area in the north.

In China, sugar production was 148,000 tonnes compared to 166,000 tonnes last year due to very poor quality beet following a period of adverse weather. As a result of the lower production and low domestic sugar prices the business will make a loss in this financial year.

Driven by further improvements in cane yields, sugar production at Illovo is expected to be 1.76 million tonnes in this financial year compared to 1.7 million tonnes last year. Wet weather delayed the start of the campaign and will result in a later phasing of profit during this financial year. Production at the Nakambala mill in Zambia exceeded 400,000 tonnes in the last campaign. Domestic sugar prices strengthened, particularly in South Africa. Cyclone Idai made landfall in March in central Mozambique and also affected Malawi and Zimbabwe. The impact to our operations was modest, with some flooding at our Nchalo sugar estate in southern Malawi. We have provided aid and support to those affected among our workforce.

Germains, our seed treatment and enhancement business, benefited from increased capacity in the US horticulture market following the completion of the expansion of the facility in Gilroy, California.

Agriculture

Ongoing businesses

2019

2018

Actual fx

Constant fx

Revenue £m

665

614

+8%

+8%

Adjusted operating profit £m

15

24

-38%

-40%

AB Agri revenue increased by 8% in the first half, driven by higher feed sales in the UK and China where higher feed prices reflected increased raw material costs, especially grain. Adjusted operating profit fell markedly, mainly as a result of reduced margins and later phasing in sales of UK animal feed, and lower profits at Speciality Nutrition which benefited from high vitamin prices last year.

In the UK, compound feed volumes were higher due to increased demand in the pig and poultry sectors but sales of sugar beet feed fell due to the mild winter, although are expected to recover in the second half. Margins were reduced with an adverse sales mix and an under-recovery of energy and distribution costs. The closure of the Vivergo bioethanol plant last autumn reduced the availability of co-products, of which Trident Feeds was the sole marketer, with a consequent reduction in operating profit.

Profit at Speciality Nutrition, our premix and starter feed business, reduced in the half year but this compared to a strong first half last year when vitamin prices and margins were unusually high. Sales grew strongly from our new mill in Spain and we acquired a small starter feed business in Poland.

This year, Frontier is expected to benefit from an improvement in grain trading in the UK and higher crop input sales to farmers following the mild winter. AB Vista maintained its position as a leader in phytase in the global feed enzyme market and, although sales were impacted by increased competition in the Americas, good sales growth was achieved in south east Asia.

Ingredients

Ongoing businesses

2019

2018

Actual fx

Constant fx

Revenue £m

744

716

+4%

+5%

Adjusted operating profit £m

64

63

+2%

+2%

Revenue in the first half was 5% ahead of last year and operating profit was 2% ahead at constant currency.

AB Mauri delivered sales growth in all regions, with a consequent increase in operating profit, and continued to invest in the operating performance of its plants. In North America higher input costs, especially freight, impacted margins in the first half although price increases have now been secured to offset this. Our businesses in South America performed well in challenging economic conditions. In Argentina selling prices and raw materials costs were well-managed in that inflationary economy. Following a sustained period of high price inflation, we have applied hyperinflationary accounting under IAS 29 for Argentina from the beginning of this financial year.

Trading performance in Europe benefited from the integration of Holgran and Fleming Howden which were acquired last year. In China, the construction of a new state-of-the-art bakery ingredients factory in Dongguan was completed, and increased customer coverage for yeast resulted in higher sales volumes.

ABF Ingredients also delivered sales growth but margin was slightly reduced with adverse sales mix in enzymes and investment in sales and business development capability. Our enzymes business achieved significant growth in the bakery, food and detergent markets through new product development and international expansion. SPI Pharma delivered strong growth in pharmaceutical excipients and PGPI, our US protein extrusion business, increased sales of plant protein crisps and took further share in the expanding US health and nutrition bar market. Ohly, our yeast extracts and seasoning powders business, simplified its operation in the US with the sale of its underutilised torula yeast fermentation facility at Hutchinson combined with a long-term supply agreement with the purchaser. Details of this disposal are set out in note 6.

Retail

 

2019

2018

Actual fx

Constant fx

Revenue £m

3,630

3,477

+4%

+4%

Adjusted operating profit £m

426

341

+25%

+25%

Sales at Primark were 4.4% ahead of last year, driven by increased retail selling space partially offset by a 1.5% decline in like-for-like sales. With a much higher margin, profit was 25% ahead of last year. Early customer reaction to the new spring/summer range has been encouraging.

The UK continued to perform well. Sales were 2.3% ahead of last year, like-for-like sales grew by 0.6% and our share of the total clothing, footwear and accessories market increased substantially. The effect of low footfall in November was offset by good trading in all other months of the first half, with strong growth in the last two weeks of the period compared to a spell of very cold weather last year.

Sales in the Eurozone were 5.3% ahead of last year at constant currency. Like-for-like sales fell by 3.2% driven by the decline in the German market and also footfall in November across all markets. Particularly strong sales growth was seen in Spain, France, Italy and Belgium. In Germany we have strengthened the management team to address the trading which continues to be difficult. Preparations are underway to reduce selling space at a small number of German stores in order to optimise their cost base.

Our business in the US continued to perform strongly, driven by excellent trading at our recently opened Brooklyn store combined with like-for-like sales growth. This, coupled with the benefit to store profitability arising from the reduction in selling space at Freehold and Danbury last year, resulted in a much-reduced US operating loss.

Operating margin in the first half was 11.7%, well ahead of the same period last year when margin was 9.8%. The effect of a weaker US dollar on purchases contracted for the first half benefited input costs, while better buying, tight stock management and reduced markdowns also drove the margin improvement. Foreign exchange contracts are in place for all of the remaining purchases for the year and the strengthening of the US dollar reflected in those contracts will result in a lower operating margin in the second half. For the full year our expectation for operating profit is unchanged, with margin a little ahead of last year.

During the second half Primark's buying, merchandising, design, sourcing and quality functions, currently located in Reading and Dublin, will be consolidated in Dublin. This will further enable one global product range for our customers, the delivery of efficiencies and support our expansion into international markets.

Retail selling space increased by 0.3 million sq ft since the financial year end and, at 2 March 2019, 364 stores were trading from 15.1 million sq ft compared to 14.3 million sq ft a year ago. Four new stores were opened in the period: Seville and Almeria in Spain, Toulouse in France and a city centre store in Berlin, Germany. In the UK we relocated to larger premises in Harrow and the Merry Hill and Peckham stores were extended.

We expect to add 950,000 square feet of new selling space in this financial year, comprising stores in new locations and additional space from relocations. In the third quarter a net 0.4 million sq ft of additional selling space is planned with six stores opening over six days. We have already opened new stores in Brussels in Belgium, Bordeaux in France, Wuppertal in Germany, Hastings, Bluewater, Milton Keynes and Belfast in the UK and we have relocated to new premises in Birmingham High Street which, at 160,000 sq ft, became our largest store. For the remainder of the year, new stores are planned for Utrecht in the Netherlands, Bonn in Germany and our first store in Slovenia, in Ljubljana.

There will be a reduction of some 150,000 sq ft this year. Our smaller store in Oviedo, Spain has been closed, our store in the King of Prussia mall in Pennsylvania has been downsized, and we are working to reduce selling space at a small number of German stores.

Ljubljana will be our first store in central Europe and we have now signed leases for our first stores in Poland and the Czech Republic.

 

 

 

New store openings to date

UK

Spain

Germany

France

Belgium

Hastings

Seville

Berlin Zoom

Toulouse

Brussels Chaussee D'Ixelles

Bluewater

Almeria

Wuppertal

Bordeaux

 

Belfast Donegall Place

 

 

 

 

Milton Keynes

 

 

 

 

 

 

 

 

 

Relocations

 

 

 

 

Harrow, Birmingham High Street

 

 

 

 

 

 

New stores planned for the second half

Netherlands

Germany

Slovenia

Utrecht

Bonn

Ljubljana

 

 

 

 

 

 

 

 

George Weston

Chief Executive

 

 

CONDENSED CONSOLIDATED INCOME STATEMENT

For the 24 weeks ended 2 March 2019

 

 

Continuing operations

Note

24 weeks
ended
2 March
2019
£m

24 weeks
ended
3 March
2018
£m

52 weeks
ended
15 September
2018
£m

 

 

Revenue

1

7,532

7,422

15,574

 

 

Operating costs before exceptional items

 

(6,945)

(6,830)

(14,290)

 

 

Exceptional items

2

(79)

-

-

 

 

 

 

508

592

1,284

 

 

Share of profit after tax from joint ventures and associates

 

24

24

54

 

 

Profits less losses on disposal of non-current assets

 

2

2

6

 

 

Operating profit

 

534

618

1,344

 

 

 

 

 

 

 

 

 

Adjusted operating profit

1

639

648

1,404

 

 

Profits less losses on disposal of non-current assets

 

2

2

6

 

 

Amortisation of non-operating intangibles

 

(20)

(17)

(41)

 

 

Acquired inventory fair value adjustments

 

(7)

(15)

(23)

 

 

Transaction costs

 

(1)

-

(2)

 

 

Exceptional items

 

(79)

-

-

 

 

 

 

 

 

 

 

 

Profits less losses on sale and closure of businesses

6

(7)

5

(34)

 

 

Profit before interest

 

527

623

1,310

 

 

Finance income

 

8

7

15

 

 

Finance expense

 

(23)

(25)

(50)

 

 

Other financial income/(expense)

 

3

(2)

4

 

 

Profit before taxation

 

515

603

1,279

 

 

 

 

 

 

 

 

 

Adjusted profit before taxation

 

627

628

1,373

 

 

Profits less losses on disposal of non-current assets

 

2

2

6

 

 

Amortisation of non-operating intangibles

 

(20)

(17)

(41)

 

 

Acquired inventory fair value adjustments

 

(7)

(15)

(23)

 

 

Transaction costs

 

(1)

-

(2)

 

 

Exceptional items

 

(79)

-

-

 

 

Profits less losses on sale and closure of businesses

 

(7)

5

(34)

 

 

 

 

 

 

 

 

 

Taxation     - UK

 

(27)

(32)

(105)

 

 

                        - Overseas

 

(91)

(80)

(152)

 

 

 

3

(118)

(112)

(257)

 

 

Profit for the period

 

397

491

1,022

 

 

 

 

 

 

 

 

 

Attributable to

 

 

 

 

 

 

Equity shareholders

 

389

481

1,007

 

 

Non-controlling interests

 

8

10

15

 

 

Profit for the period

 

397

491

1,022

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per ordinary share (pence)

4

49.2

60.9

127.5

 

 

Dividends per share paid and proposed for the period (pence)

5

12.05

11.70

45.00

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the 24 weeks ended 2 March 2019

 

 

24 weeks
ended
2 March
2019
£m

24 weeks
ended
3 March
2018
£m

52 weeks
ended
15 September
2018
£m

Profit for the period recognised in the income statement

397

491

1,022

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

Remeasurements of defined benefit schemes

(178)

224

310

Deferred tax associated with defined benefit schemes

30

(42)

(53)

Items that will not be reclassified to profit or loss

(148)

182

257

 

 

 

 

Effect of movements in foreign exchange

(134)

(7)

(85)

Net gain/(loss) on hedge of net investment in foreign subsidiaries

8

(7)

(10)

Deferred tax associated with movements in foreign exchange

-

1

1

Reclassification adjustment for movements in foreign exchange on subsidiaries disposed

(3)

-

-

Movement in cash flow hedging position

(33)

20

55

Deferred tax associated with movement in cash flow hedging position

8

(4)

(12)

Effect of hyperinflationary economies

46

-

-

Deferred tax associated with hyperinflationary economies

(6)

-

-

Items that are or may be subsequently reclassified to profit or loss

(114)

3

(51)

 

 

 

 

Other comprehensive income for the period

(262)

185

206

 

 

 

 

Total comprehensive income for the period

135

676

1,228

 

 

 

 

Attributable to

 

 

 

Equity shareholders

131

666

1,215

Non-controlling interests

4

10

13

Total comprehensive income for the period

135

676

1,228

 

 

CONDENSED CONSOLIDATED BALANCE SHEET

At 2 March 2019

 

 

2 March
2019
£m

3 March
2018
£m


15 September
2018
£m

Non-current assets

 

 

 

Intangible assets

1,658

1,627

1,632

Property, plant and equipment

5,663

5,611

5,747

Investments in joint ventures

215

204

219

Investments in associates

49

48

47

Employee benefits assets

403

504

579

Deferred tax assets

131

149

133

Other receivables

47

54

50

Total non-current assets

8,166

8,197

8,407

 

 

 

 

Current assets

 

 

 

Inventories

2,282

2,314

2,187

Biological assets

106

103

84

Trade and other receivables

1,435

1,346

1,436

Derivative assets

91

74

132

Current asset investments

26

-

30

Income tax

-

-

54

Cash and cash equivalents

1,149

887

1,362

Total current assets

5,089

4,724

5,285

Total assets

13,255

12,921

13,692

 

 

 

 

Current liabilities

 

 

 

Loans and overdrafts

(439)

(183)

(419)

Trade and other payables

(2,298)

(2,223)

(2,529)

Derivative liabilities

(58)

(78)

(52)

Income tax

(94)

(138)

(160)

Provisions

(61)

(82)

(88)

Total current liabilities

(2,950)

(2,704)

(3,248)

 

 

 

 

Non-current liabilities

 

 

 

Loans

(350)

(581)

(359)

Other payables

(267)

(246)

(269)

Provisions

(54)

(48)

(52)

Deferred tax liabilities

(305)

(330)

(324)

Employee benefits liabilities

(154)

(154)

(144)

Total non-current liabilities

(1,130)

(1,359)

(1,148)

Total liabilities

(4,080)

(4,063)

(4,396)

Net assets

9,175

8,858

9,296

 

 

 

 

Equity

 

 

 

Issued capital

45

45

45

Other reserves

175

175

175

Translation reserve

238

443

363

Hedging reserve

(12)

(15)

13

Retained earnings

8,643

8,126

8,615

Total equity attributable to equity shareholders

9,089

8,774

9,211

Non-controlling interests

86

84

85

Total equity

9,175

8,858

9,296

 

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the 24 weeks ended 2 March 2019

 

 

24 weeks
ended
2 March
2019
£m

24 weeks
ended
3 March
2018
£m

52 weeks
ended
15 September
2018
£m

Cash flow from operating activities

 

 

 

Profit before taxation

515

603

1,279

Profits less losses on disposal of non-current assets

(2)

(2)

(6)

Profits less losses on sale and closure of businesses

7

(5)

34

Transaction costs

1

-

2

Finance income

(8)

(7)

(15)

Finance expense

23

25

50

Other financial (income)/expense

(3)

2

(4)

Share of profit after tax from joint ventures and associates

(24)

(24)

(54)

Amortisation

32

28

65

Depreciation

265

233

509

Exceptional items

79

-

-

Acquired inventory fair value adjustments

7

15

23

Net change in the fair value of current biological assets

(26)

(14)

5

Share-based payment expense

9

7

19

Pension costs less contributions

2

1

4

Increase in inventories

(139)

(128)

(35)

(Increase)/decrease in receivables

(12)

11

(99)

Decrease in payables

(138)

(284)

(19)

Purchases less sales of current biological assets

-

-

(1)

Decrease in provisions

(24)

(25)

(30)

Cash generated from operations

564

436

1,727

Income taxes paid

(122)

(111)

(297)

Net cash from operating activities

442

325

1,430

 

 

 

 

Cash flows from investing activities

 

 

 

Dividends received from joint ventures and associates

25

25

42

Purchase of property, plant and equipment

(348)

(351)

(787)

Purchase of intangibles

(34)

(37)

(81)

Sale of property, plant and equipment

6

10

23

Purchase of subsidiaries, joint ventures and associates

(47)

(195)

(208)

Sale of subsidiaries, joint ventures and associates

5

-

1

Interest received

10

4

10

Net cash from investing activities

(383)

(544)

(1,000)

 

 

 

 

Cash flows from financing activities

 

 

 

Dividends paid to non-controlling interests

(1)

(2)

(4)

Dividends paid to equity shareholders

(263)

(234)

(327)

Interest paid

(20)

(22)

(50)

Decrease in short-term loans

(11)

(115)

(111)

(Decrease)/increase in long-term loans

(7)

(5)

19

Decrease/(increase) in current asset investments

3

-

(30)

Purchase of shares in subsidiary undertaking from non-controlling interests

(1)

(1)

(1)

Sale of shares in subsidiary undertakings to non-controlling interests

-

1

1

Movements from changes in own shares held

-

-

(30)

Net cash from financing activities

(300)

(378)

(533)

 

 

 

 

Net decrease in cash and cash equivalents

(241)

(597)

(103)

Cash and cash equivalents at the beginning of the period

1,271

1,386

1,386

Effect of movements in foreign exchange

1

(6)

(12)

Cash and cash equivalents at the end of the period

1,031

783

1,271