Q4 2026 Associated British Foods PLC Trading Update

September 10, 2026

Operator: Standing by. Welcome to the Associated British Foods trading update conference call hosted by George Weston, Group Chief Executive Officer, and Joana Edwards, Group Chief Financial Officer. At this time, all participants are in a listen-only mode. After the speaker's introductory remarks, there will be a question and answer session. To ask a question during the session, you will need to slowly press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to George Weston. Please go ahead.

Speaker #2: Standing by. Welcome to the Associated British Foods trading update conference call, hosted by George Weston, Group Chief Executive Officer, and Joana Edwards, Group Chief Financial Officer. At this time, all participants are in a listen-only mode.

Operator: Welcome to the Associated British Foods Trading Update Conference Call hosted by George Weston, Group Chief Executive Officer, and Joana Edwards, Group Chief Financial Officer. At this time, all participants are in a listen-only mode. After the speaker's introductory remarks, there will be a question-and-answer session. To ask a question during the session, you will need to slowly press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to George Weston. Please go ahead.

Speaker #2: After the speaker's introductory remarks, there will be a question-and-answer session. To ask a question during the session, you will need to slowly press star 11 on your telephone.

Speaker #2: You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to George Weston.

Speaker #2: Please go ahead.

Speaker #3: Good morning, everyone, and thank you for joining this call. This morning, we published a trading update for the fourth quarter of ABF's 2026 financial year.

George Weston: Good morning, everyone, and thank you for joining this call. This morning we published a trading update for Q4 of ABF's 2026 financial year. If I were to characterize it was a quarter where trading was okay, but one which we also took some important strategic steps, in both Primark and in our foods businesses. As a result, there is a lot to cover in this morning's update. I will take a few minutes now, if I may, to give you some color. While the financial year has not quite finished, we now have a good sense of how the results will land. Starting with Primark, sales in Q4 are expected to be up 2% and up 2% for the full year in 2026.

George Weston: Good morning, everyone, and thank you for joining this call. This morning we published a trading update for Q4 of ABF's 2026 financial year. If I were to characterize it was a quarter where trading was okay, but one which we also took some important strategic steps, in both Primark and in our Foods businesses. As a result, there is a lot to cover in this morning's update. I will take a few minutes now, if I may, to give you some color. While the financial year has not quite finished, we now have a good sense of how the results will land. Starting with Primark, sales in Q4 are expected to be up 2% and up 2% for the full year in 2026.

Speaker #3: If I were to characterize it, it was a quarter where trading was okay, but one in which we also took some important strategic steps in both Primark and in our Foods businesses.

Speaker #3: And as a result, there's a lot to cover in this morning's update. I'll take a few minutes now, if I may, to give you some colour.

Speaker #3: While the financial year hasn't quite finished, we now have a good sense of how the results will land. And starting with Primark, sales in the fourth quarter are expected to be up 2%, and up 2% for the full year in 2026.

Speaker #3: In the consumer environment, there remain challenges in most of our markets. Primark's like-for-like sales are expected to be down 3% in quarter four and down 2.6% for the full year.

George Weston: In a consumer environment that remains challenging in most of our markets, Primark's like-for-like sales are expected to be down 3% in Q4 and down 2.6% for the full year. The trends in Q4 were very similar to the previous three quarters this year. So we remain encouraged by good results in both the UK market and the womenswear category across all markets. This, as we have said in the past, is the area we have unapologetically prioritized both our focus and our investment. We have sharpened prices, we have improved our product offer, we have increased investments in marketing, strengthened our digital capabilities. We are seeing the benefits, and there is more to come. I am particularly pleased with the recent launch of our Iconic Value campaign. This is a strategic investment. It is an important investment to introduce new lower prices across hundreds of items. It is across all markets and categories.

George Weston: In a consumer environment that remains challenging in most of our markets, Primark's like-for-like sales are expected to be down 3% in Q4 and down 2.6% for the full year. The trends in Q4 were very similar to the previous three quarters this year. We remain encouraged by good results in both the UK market and the womenswear category across all markets. This, as we have said in the past, is the area we have unapologetically prioritized both our focus and our investment. We have sharpened prices, we have improved our product offer, we have increased investments in marketing, strengthened our digital capabilities. We are seeing the benefits, and there is more to come. I am particularly pleased with the recent launch of our Iconic Value campaign. This is a strategic investment. It is an important investment to introduce new lower prices across hundreds of items. It is across all markets and categories.

Speaker #3: The trends in Q4 were very similar to the previous three quarters this year, so we remain encouraged by good results in both the UK market and the women's wear category across all markets.

Speaker #3: This, as we've said in the past, is the area we've unapologetically prioritised both our focus and our investment. We've sharpened prices.

Speaker #3: We've improved our product offer. We've increased investments in marketing and strengthened our digital capabilities. We are seeing the benefits, and there's more to come. I'm particularly pleased with the recent launch of our Iconic Value campaign.

Speaker #3: This is a strategic investment. It is an important investment to introduce new, lower prices across hundreds of items. It's across all markets and categories.

George Weston: Primark is redefining value and not just through price, but also in our continuous improvements in quality, style, and the store experience. It's early days, but the initial volume reaction has been encouraging. Our good execution of new stores contributed around 5 percentage points to sales growth in Q4 and is expected to contribute around 4% for the full year. We're very pleased with the initial success of our franchise stores in the Middle East. Our first stores in Bahrain and Qatar are due to open shortly, and we've now expanded our franchise agreement to include Saudi Arabia. We've also signed a franchise agreement with a new partner to enter the large and important Mexican market in due course. In terms of profit, we continue to expect Primark to deliver an adjusted operating profit of approximately 10% for the 2026 financial year.

Speaker #3: Primark is redefining value, not just through price, but also in our continuous improvements in quality, style, and the store experience. It's early days, but the initial volume reaction has been encouraging.

Speaker #3: Good execution of new stores contributed around 5 percentage points to sales growth in Q4, and it's expected to contribute around 4% for the full year.

Speaker #3: We're very pleased with the initial success of our franchise stores in the Middle East. Our first stores in Bahrain and Qatar are due to open shortly.

Speaker #3: And now, we've expanded our franchise agreement to include Saudi Arabia. We've also signed a franchise agreement with a new partner to enter the large and important Mexican market in due course.

Speaker #3: In terms of profit, we continue to expect Primark to deliver an adjusted operating profit of approximately 10% for the 2026 financial year. Looking ahead, we're excited to announce that Primark will offer UK home delivery in the future.

George Weston: Looking ahead, we're excited to announce that Primark will offer UK home delivery in the future. Importantly, this will be a profitable channel for growth that complements, doesn't replace, that complements our store model. Let me say a bit more about why we want to move into home delivery and why now, particularly given our strong resistance to doing so in the past. We've always known that there's an incremental customer segment that Primark could reach by offering home delivery. Historically, though, there just wasn't a way for us to make money from providing that service. We've monitored and watched the online channel closely, and over time, we've seen the economics of the home delivery market evolve, including the introduction of returns policies and increased fees. As a result, there is now an opportunity to drive profitable incremental growth through this channel.

Speaker #3: Importantly, this will be a profitable channel for growth. The complements don't replace the complements or store model. Let me say a bit more about why we want to move into home delivery, and why now, particularly given our strong resistance to doing so in the past.

Speaker #3: We've always known that there's an incremental customer segment that Primark could reach by offering home delivery. Historically, though, there just wasn't a way for us to make money from providing that service.

Speaker #3: We've monitored and watched the online channel closely, and over time we've seen the economics of the home delivery market evolve, including the introduction of returns policies and increased fees.

Speaker #3: As a result, there is now an opportunity to drive profitable incremental growth through this channel. The other thing that's changed over time is that we've built strong digital capabilities in Primark, which maybe two or three years ago really didn't exist.

George Weston: The other thing that's changed over time is that we've built strong digital capabilities in Primark, which maybe 2 or 3 years ago really didn't exist, including in digital marketing and Click & Collect. This means we're well positioned to maximize the potential of home delivery and to use it to accelerate our digital flywheel, which complements our store model. That's why now is the right time to take this step. Having made that decision, we've acquired, and you will have seen the announcement this morning, a highly automated depot in Sheffield. It gives us the capability to offer UK home delivery, and it gives us the capacity to continue to grow Click & Collect. It's a good deal for us. We're not setting a timetable for home delivery today, and we're not providing any financial data at this stage, but this really is an attractive growth opportunity.

Speaker #3: Including in digital marketing and click and collect. This means we're well positioned to maximise the potential of home delivery, and to use it to accelerate our digital flywheel, which complements our store model.

Speaker #3: That's why now is the right time to take this step. And, having made that decision, we've acquired—and you will have seen the announcement this morning—a highly automated depot in Sheffield.

Speaker #3: It gives us the capability to offer UK home delivery, and it gives us the capacity to continue to grow click and collect. It's a good deal for us.

Speaker #3: We're not setting a timetable for home delivery today, and we're not providing any financial data at this stage. But this really is an attractive growth opportunity.

Speaker #3: Moving to our food businesses, grocery sales grew in the quarter. Overall trading, however, was below our expectations. The extended hot weather in the UK and Europe impacted hot tea consumption, particularly black tea.

George Weston: Moving to our Food businesses, grocery sales grew in the quarter. Overall trading in tea was below our expectations. The extended hot weather in the UK and Europe impacted hot tea consumption, particularly black tea. In Ovaltine, there was a phased impact from the change to a new distribution model in Thailand, which will save us money from next year but gives us an impact this year. As a result of all these short-term impacts, we now expect grocery adjusted operating profit to be slightly below our previous expectations for full year in 2026. We are very pleased that we've completed the Hovis acquisition and that we're well underway with the integration. We expect this transaction to deliver significant synergies in both production and distribution. This will give us the ability to create a sustainably profitable bakeries business, supported by investment in marketing and innovation.

Speaker #3: In Ovaltine, there was a phased impact from the change to a new distribution model in Thailand, which will save us money from next year but gives us an impact this year.

Speaker #3: As a result of all these short-term impacts, we now expect Grocery adjusted operating profit to be slightly below our previous expectation for the full year in 2026.

Speaker #3: We are very pleased that we've completed the Hobus acquisition and that we're well underway with the integration. We expect this transaction to deliver significant synergies in both production and distribution.

Speaker #3: This will give us the ability to create a sustainably profitable bakeries business, supported by investment in marketing and innovation. You will see Hovis is already back on air.

George Weston: You will see Hovis is already back on air. In 2027, we expect Grocery adjusted operating profit to be slightly ahead of 2026. While Hovis is significantly diluted to Grocery profits next year, it is expected to be accretive to profit in subsequent years. To Ingredients, both our yeast and bakery ingredients businesses and our specialty ingredients portfolio delivered good growth in Q4. Our full-year expectations for 2026 are therefore unchanged, and for 2027, overall Ingredients profit is expected to be broadly in line with this year due to start-up costs in our new yeast facility in India. In Agriculture, adjusted operating profit this year is expected to be in line with our previous expectations. We have taken a decision to focus on our higher growth segments and higher margin segments and to exit, I beg your pardon, our UK compound feed business.

Speaker #3: In 2027, we expect Grocery adjusted operating profit to be slightly ahead of 2026. While Hobus is significantly dilutive to Grocery profit next year, it's expected to be accretive to profit in subsequent years.

Speaker #3: And so, to Ingredients: both our Yeast and Bakery Ingredients businesses and our Specialty Ingredients portfolio delivered good growth in Q4. Full-year expectations for 2026 are therefore unchanged.

Speaker #3: And for 2027, overall Ingredients profit is expected to be broadly in line with this year due to start-up costs in our new yeast facility in India.

Speaker #3: In Agriculture, adjusted operating profit this year is expected to be in line with our previous expectations, reflecting a decision to focus on our higher-growth and higher-margin segments, and to exit a big part of the business.

Speaker #3: Our UK compound feed business—we've already invested in two of our ten mills during 2026, and we expect to finalise the future of the remaining mills by the end of 2027.

George Weston: We have already divested two of our 10 mills during 2026, and we expect to finalize the future of remaining mills by the end of 2027. These are now within our disclosed and closed operations. We expect Agricultural profits to grow next year. In Sugar, the adjusted operating profit loss in 2026 is expected to be towards the higher end of our previous guidance range of -25 million to -60 million GBP. Since July, we have increased the level of onerous contract provisions taken this year for two main reasons. One, we now expect a small UK crop, and this has a negative impact on overhead recoveries next year. Secondly, natural gas costs, as you well know, have risen significantly, and this increases production costs. We remain cautious on the outlook for Sugar for 2027.

Speaker #3: These are now within our disclosed and closed operations. We expect agricultural profits to grow next year. In Sugar, the adjusted operating profit loss in 2026 is expected to be towards the higher end of our previous guidance range of minus £25 million to minus £60 million.

Speaker #3: Since July, we've increased the level of onerous contract provisions taken this year for two main reasons. One, we now expect a small UK crop, and this has a negative impact on overhead recoveries.

Speaker #3: Next year. And then secondly, natural gas costs, as you will know, have risen significantly, and this increases production costs. We remain cautious on the outlook for sugar for 2027.

Speaker #3: We expect the operating loss to be below this year, or to be worse than this year, and to be in the range of minus £70 million to minus £170 million.

George Weston: We expect the operating loss to be below this year or to be worse than this year and to be in the range of -70 million to -170 million GBP. There are a number of factors that could materially influence the outcome within this range, either positively or negatively. In particular, significantly higher gas costs lasting for longer, production levels in Africa, which may well be affected by El Niño weather impacts, and currency movements, notably in the Malawi Kwacha. Looking ahead, we have seen a recent turn in European sugar prices, and there are two reasons why this trend should continue. First, European sugar production, which is starting now, is estimated to be significantly lower this year than for the previous few years.

Speaker #3: But there are a number of factors that could materially influence the outcome within this range, either positively or negatively. In particular, significantly high gas costs lasting for longer, production levels in Africa, which may be may well be affected by El Niño weather impacts, and then currency movements, notably in the Malawi and Kwacha.

Speaker #3: But looking ahead, we've seen a recent turn in European sugar prices, and there are two reasons why this trend should continue. First, European sugar production, which is starting now, is estimated to be significantly lower this year than for the previous few years.

Speaker #3: Back in June, as I said last time we were together, the European Commission estimated that European sugar consumption would drop nearly 15% in this year's harvest.

George Weston: Back in June, as I said last time we were together, the European Commission estimated that European sugar consumption would drop nearly 15% in this year's harvest, partly due to lower planted acreage. Since then, the very hot and dry summer that has affected us has affected many other European sugar producers. Northern Europe, in particular, has significantly reduced yield estimates. It is too early to put a hard number on that because the harvest is only just starting. I think the German number was to be down 24%. A more significant deficit in European production this year, after all these effects our overhead recoveries will allow the industry to work through the surplus inventories in the system much more quickly than we had previously feared. In summary, supply and demand has altered significantly in the European market, and the stock overhang will be worked through the system quicker.

Speaker #3: Partly due to lower planted acreage. And since then, the very hot and dry summer that's affected us has also affected many other European sugar producers.

Speaker #3: And Northern Europe, in particular, has significantly reduced yield estimates. It's too early to put a hard number on that because the harvest has only just started.

Speaker #3: But I think the German number was to be down 24%. A more significant deficit in European production this year, for all of the effects, our overhead recoveries will allow the industry to work through the surplus inventories in the system much more quickly than we previously feared.

Speaker #3: And then, secondly, so in summary, supply and demand has altered significantly in the European market, and the stock overhang will be worked through the system more quickly.

Speaker #3: Secondly, and also supportive, world market sugar prices have risen sharply in the last six weeks. And if they remain at these levels, it's less likely that cheap imports will fill the gap in the domestic supply.

George Weston: Secondly, also supportive world market, world sugar prices have risen sharply in the last only six weeks, and if they remain at these levels, it is less likely that cheap imports will fill the gap in domestic supply. In 2027, though, we will not see the benefit of these high European prices in our results, especially not in the UK, because we are already a long way through this year's customer contracting round. However, higher prices should benefit our future years. We have continued to look very seriously at our cost base, both in Spain and also in the UK. In the UK, this includes the announced closure of Cantley, which is one of our four production sites in the UK. This will enable us to meet existing customer demand more efficiently and will support sustainable profitability over the longer term.

Speaker #3: In 2027, though, we won't see the benefit of these higher European prices in our results. Especially not in the UK because we've already we are already a long way through this year's customer contracting round.

Speaker #3: However, higher prices should benefit future years. We've continued to look very seriously at our cost base, both in Spain and also in the UK.

Speaker #3: And in the UK, this includes the announced closure of Cantley, which is one of our four production sites in the UK. This will enable us to meet existing customer demands more efficiently and will support sustainable profitability over the longer term.

Speaker #3: And then finally—and sorry, I've gone on for quite a long time, but there's been a lot to say—finally, an update on the demerger of Primark from ABF's food businesses.

George Weston: Finally, an update on the demerger of Primark from ABF's Food businesses. We are making good progress towards being demerger ready, and we expect the demerger to take place in December 2027. This gives us time to build the systems and processes necessary to operate both businesses on a standalone business. This is important. It also gives us time to explain more about our businesses, particularly in food, to the market. We are not going to rush that. As well as separate capital market days, we will run a series of smaller investor education events for the different components of our food businesses, many of which I believe are less well understood. So thank you for your patience. With that, let me hand over to you for questions.

Speaker #3: We are making good progress towards being demerger-ready, and we expect the demerger to take place in December 2027. This gives us time to build the systems and processes necessary to operate both businesses as standard standalone businesses.

Speaker #3: And this is important. It also gives us time to explain more about our businesses, particularly in Food, to the market. We're not going to rush that.

Speaker #3: As well as separate Capital Market Days, we will run a series of smaller investor education events for the different components of our food businesses, many of which I believe are less well understood.

Speaker #3: So, thank you for your patience. And with that, let me hand over to you for questions.

Speaker #1: Thank you. I'll ask a question. You will need to slowly press star, one, and one on your telephone, and wait for your name to be announced.

Operator: Thank you. To ask a question, you will need to slowly press star 1 and 1 on your telephone and wait for your name to be announced. We will now go to our first question. One moment, please. Your first question today comes from the line of Clive Black from Shore Capital Markets. Please go ahead.

Speaker #1: Who will now go to our first question? One moment, please. And your first question today comes from the line of Clive Black from Shore Capital Markets.

Speaker #1: Please go ahead.

Speaker #2: Oh, good morning. Thank you for the run-through and the opportunity to ask questions. Just two from me. Could I get a little bit of colour on how the balance sheet may have looked at the year-end?

Clive Black: Good morning. Thank you for the run through and the opportunity to ask a question. Just two from me, if I may. First of all, can you just give a little bit of color how the balance sheet may have looked at the year-end? Secondly, a little bit of a left field question, but just in terms of ingredients, which is quite a profitable business, what is the magnitude of the investment in India? In that respect, how is that influencing the FY 2027 outlook? Thank you.

Speaker #2: And then secondly, a little bit of a left-field question, but just in terms of Ingredients, which is quite a profitable business, what is the magnitude of the investment in India?

Speaker #2: And in that respect, how has that influenced the FY27 outlook? Thank you.

Speaker #3: Okay. Let me—Clive, morning. Let me hand over to—We'll ask Joana to answer the first question, and then I'll come back on the cost of the yeast factory in India.

George Weston: Okay. Clive, morning. Let me hand over to ask Joana to answer the first question, then I will come back on the cost of the yeast factory in India.

Speaker #4: Morning, Clive. Thank you for the question. I always like those questions on balance sheet. We haven't yet closed the books. We've still got a little bit of trading to do in Primark.

Joana Edwards: Morning, Clive. Thank you for the question. I always like those questions on balance sheet. We have not yet closed the books. We still got a little bit of trading to do in Primark. As you have seen, we have done quite a lot of investment in these last few months, including the investment that we have made today on the Sheffield warehouse. What I can say at this point in time is that we will be around the leverage levels just above the 1x. Priority from a capital allocation has always been investment, and that is what we have been doing this last quarter.

Speaker #4: But as you've seen, we've done quite a lot of investment in these last few months, including the investments that we've made today on the Sheffield warehouse.

Speaker #4: What I can say at this point in time is that we will be around the leverage levels just above one times. So, the priority from a capital allocation perspective has always been investment, and that's what we've been doing this last quarter.

Clive Black: Can I just come back on that, Joana? George mentioned restructuring in agriculture, and also clearly the Cantley closure in the UK. Should in that respect we be anticipating elevated impairment or exceptional items or restructuring costs in the balance sheet in November?

Speaker #2: Can I just come back on that, Joanna? Just, George mentioned restructuring in Agriculture, and also, clearly, the Cantley closure in the UK. Should we, in that respect, be anticipating elevated impairment or exceptional items or restructuring costs in the balance sheet in November?

Speaker #4: Yes, there will be some. The same way as there will be below the line, you'll also see the start of the transaction costs. We have not got all of those into FY26.

Joana Edwards: Yes, there will be some, the same way as there will be below the line, you will see also the start of the transaction costs. We have not got all of those into FY26, bearing in mind that some of the announcements on restructuring have just taken place. Yes, we will be seeing some of those reflected in the balance sheets. There is also, as we mentioned, the Mills ABN restructuring. There will be a few puts and takes in the below the line.

Speaker #4: Bearing in mind that some of the announcements on restructuring have just taken place. But yes, we will be seeing some of those reflected in the balance sheet.

Speaker #4: There's also, as we mentioned, the Mills ABN restructuring. So there will be a few puts and takes in the below the line.

Speaker #2: Thank you very much.

Clive Black: Thank you very much.

Speaker #3: Clive, but just as a reminder, looking forward into '27, there will be a fairly significant working capital unwind as we sell the feed mills.

George Weston: Clive, but just as a reminder, looking forward into 2027, there will be a fairly significant working capital unwind as we sell the feed mills. So that will help

Speaker #3: So that will help next year's balance sheet, even if some of the restructuring charges hit this year. On to Ingredients. Well, yeast and bakers' ingredients investments in India.

Clive Black: Yeah

George Weston: next year's balance sheet, even if some of the restructuring charges hit this year. On to ingredients. Well, yeast and baker ingredients investments in India. About GBP 100 million between two different plants. The bigger number is the yeast plant in Pillukhedi, in the North of India, and then also the BI factory, which is now up and running. The yeast factory is commissioning. There are commissioning costs to these plants, I think we are getting on with it in the yeast factory in particular. But as we build volumes for the yeast plant, we will have some stranded overhead until we have built that new plant up. It is quite a big facility.

Speaker #3: About 100 million between two different plants. The bigger number is the yeast plant in the north of India, and then also the BI factory, which is now up and running.

Speaker #3: The yeast factory is commissioning. There are commissioning costs to these plants. I think we're getting on with it in the yeast factory in particular.

Speaker #3: And, as we build volumes for the yeast plant, we will have some stranded overhead until we've filled that new plant up. It's quite a big facility.

Clive Black: Underlying, George, are you anticipating that the ingredients business, excluding India, will make good profit progress then?

Speaker #2: Underline, George, are you anticipating that the Ingredients business, excluding India, will make good profit progress then?

Speaker #3: Yes, yes. It's early days, and the Specialty Ingredients businesses are feeling particularly well placed at the moment. Yeast is quite a big energy user.

George Weston: Yes. It is early days, and the specialty ingredients businesses are feeling particularly well-placed at the moment. Yeast is quite a big energy user, so we worry about some of the input costs in that part of the business.

Speaker #3: So we worry about some of the input costs in that part of the business.

Speaker #2: Okay, thanks very much for your time and for answering the questions.

Clive Black: Well, thanks very much for your time and the answers to the questions.

George Weston: Thanks, Liam.

Speaker #3: Thanks, Clive.

Speaker #1: Thank you. Your next question today comes from the line of Richard Chamberlain from RBC. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Richard Chamberlain from RBC. Please go ahead.

Speaker #5: Thank you. Morning, guys. Three from me, please, if that's all right. I just wondered if you could, in light of this acquisition then of the Sheffield DC from Boohoo, give an idea of sort of Primark capex expectations for the coming year.

Richard Chamberlain: Thank you. Morning, guys. Three from me, please, if that's all right. I just wondered if you could, in the light of this acquisition of the Sheffield DC from Boohoo, give an idea of Primark CapEx expectations for the coming year and whether you still need additional Click & Collect warehouse capability in addition to what's being provided on the home delivery side. Then again, on Primark, what sort of reaction are you seeing to marketing investments? Should we expect more of that impact to come through in the coming year in terms of brand halo and so on?

Speaker #5: And whether you still need additional click-and-collect warehouse capability in addition to what's been provided on the home delivery side. And then again, on Primark, what sort of reaction are you seeing to marketing investments?

Speaker #5: Should we expect more of that impact to come through in the coming year, in terms of sort of brand halo and so on? And then finally, just on the sugar side, I wonder if you can just give an update on energy costs—what you're assuming you're going to be paying for gas and so on, compared to what you have been paying in the last quarter or second half of this year.

Richard Chamberlain: Then finally, just on the sugar side, I wonder if you can just give an update on energy costs, what you're assuming you're going to be paying for gas and so on, compared to what you have been paying in the last quarter or H2 of this year. Thanks very much.

Speaker #5: Thanks very much.

Speaker #3: Yeah. So, the Sheffield DC will remove the need to do anything on click-and-collect warehouse investment. Part of the business case is to give click-and-collect all the growth space capability that it needs.

George Weston: Yeah. So the Sheffield DC will remove the need to do anything on Click & Collect warehouse investment. Part of the business case is to give Click & Collect all the growth space capability that it needs. We expect that Click & Collect will move into that Sheffield site first, and then followed on with home delivery thereafter. Marketing investment returns. Well, in the UK in particular, we think we've got the marketing mix about right. We are driving incremental sales. Now there's a lot more beyond simply above-the-line advertising going on. But the brand metrics, in particular, have benefited from the advertising and anything that we specifically advertise as selling well. We've seen a good reaction in Spain to the first full integrated marketing campaign that gives us confidence, and in France too, where we've started the marketing journey, again, a good reaction to that.

Speaker #3: We expect that click and collect will move into that Sheffield site first, and then be followed by home delivery thereafter. Marketing investment returns—well, in the UK in particular, we think we've got the marketing mix about right.

Speaker #3: We are driving incremental sales. Now, there's a lot more beyond simply above-the-line advertising going on. But the brand metrics, in particular, have benefited from the advertising, nailing that we specifically advertised as selling well.

Speaker #3: We've seen a good reaction in Spain to the first full, integrated marketing campaign—that gives us confidence. And in France, too, where we've started the marketing journey again, there's been a good reaction to that.

Speaker #3: Sugar energy costs—we are forecasting somewhere over a pound a firm into next year. Now, we do have, though, some uncovered energy needs. We won't know exactly how much until we know how much crop we've got to process.

George Weston: Sugar energy costs, we are forecasting somewhere over GBP 1 of firm into next year. Now we do have, though, some uncovered energy needs. We won't know exactly how much until we know how much crop we've got to process. But when I last looked, which was yesterday, spot gas prices were about GBP 1.90, so there is exposure there. We'll just have to see where that goes.

Speaker #3: But when I last looked, which was yesterday, spot gas prices were about £1.90. So there is exposure there. Obviously, we'll just have to see where that goes.

Joana Edwards: We are taking some of that exposure into the onerous contracts this year as we flagged as well.

Speaker #4: And we're taking some of that exposure into the owners' contracts this year, as we flagged as well. So, thanks very much.

Richard Chamberlain: Sure. Okay. Thanks very much for the clarity.

Speaker #5: for the call.

George Weston: The two big gas-saving projects are firstly Cantley. Closure of Cantley will save us on gas usage. Then we have, I think, it is the UK's largest energy reduction program, carbon reduction program, which is steam drying at Wissington, which will turn on with the new campaign. We are taking two big steps to reduce energy use, but we will remain large energy users despite that gas bridge users, despite those two steps.

Speaker #3: I mean, we had the two big gas-saving projects. So, firstly, Cantley—closure of Cantley will save us on gas usage. And then we have, I think it's the UK's largest onshore renewable—sorry, energy reduction program, carbon reduction program—which is steam drying at Wissington, which will turn on with the new campaign.

Speaker #3: So we are taking two big steps to reduce energy use, but we will remain large energy users, despite those two steps.

Speaker #4: The benefit of Camply will be in FY28 rather than this campaign, most likely. We'll see on the size of it.

Joana Edwards: The benefit of Cantley will be in FY28 rather than this campaign, most likely. We will see on the size of the catalog after.

Speaker #3: Yeah.

George Weston: Yeah.

Joana Edwards: Of course.

Richard Chamberlain: Great. Thanks very much.

Speaker #5: Great. Thanks very much.

Speaker #3: Thanks. Thanks, Richard.

George Weston: Thanks, Richard.

Speaker #1: Thank you. Your next question today comes from the line of John Cox from Kepler. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Jon Cox from Kepler Cheuvreux. Please go ahead.

Speaker #3: Yeah. Good morning, guys. A couple of questions from my side. Just in terms of Primark—looking ahead to FY 2027, you talk about aiming for like-for-like growth.

Jon Cox: Yeah. Good morning, guys. A couple of questions from my side. Just in terms of Primark and looking ahead to FY27, you talk about aiming for like-for-like growth. Just any initial thoughts? I think today's figures in Europe look a bit worse than people are anticipating, maybe hoping for some improvement there. Just wondering how long do you think Europe will take? You have said, obviously, clearly the focus is on the UK, but I thought some of the practices in the UK were already being rolled into Europe, and clearly Q4 was worse than it was in Q3. Second question, just on the home delivery, you talk about profitable growth. Just bearing in mind what you said historically about the cost of delivery and your average ticket size, do you think the profitability of that business will be below your high street business?

Speaker #3: Just any initial thoughts? I think most of today's figures in Europe look a bit worse than people were anticipating. Maybe hoping for some improvement there.

Speaker #3: Just wondering, how long do you think Europe will take? You've said, obviously, the focus is on the UK. But I thought some are already being rolled into Europe.

Speaker #3: And clearly, Q4 was worse than it was in Q3. Second question, just on the home delivery: you talk about profitable growth, but just bearing in mind what you said historically about the cost of delivery and your average ticket size, do you think the profitability of that business will be below your high street business?

Speaker #3: And then the last question, just on sugar—you seem to indicate in the last statement that all options are open. With regards to that sugar business, the losses seem pretty dramatic now in the next financial year.

Jon Cox: And then the last question, just on sugar. You seemed to indicate in the last statement all options are open with regards to that sugar business. The losses seem pretty dramatic now in the next financial year. Is that really because you decided the shape of the sugar business you want to maintain and it is really getting to grips with all the various issues? Really just on the size of that loss you are talking about for FY27, you seem to allude it is the UK crop which is the issue, like the bad weather. Well, the hot weather means that your production is low and as a result, that is the main drainer you think in FY27? Or is it part of the African business you mentioned El Niño in Malawi and currency movements?

Speaker #3: Is that really because you've decided, look, the shape of the sugar business you want to maintain, and it's really getting to grips with the various issues?

Speaker #3: And really, just on the size of that loss you're talking about for FY27, you seem to allude it's the UK crop which is the issue—like the bad weather, whether the hot weather—means that your production is low.

Speaker #3: And as a result, that's the main drainer, you think, in FY27? Or is it part of that Europe—sorry, part of the African business? You mentioned El Niño and Malawi and currency movements.

Speaker #3: If you could talk a little bit more about that, because the headline size of that loss looks pretty dramatic. Thank you.

Jon Cox: If you could talk a little bit more about that because the headline size of that loss looks pretty dramatic. Thank you.

Speaker #2: Yeah, no, thank you. Why don't I handle sugar first, and then you do Primark like-for-likes? So, yeah, the increase in owners' contracts into this year is a UK issue, and it is a combination of our current best assessment of the likely size of the UK crop, and therefore the likely overhead recoveries.

George Weston: Yeah. No, thank you. Why do not I handle sugar first, and then you do Primark like for likes.

Joana Edwards: Okay.

George Weston: The increase in onerous contracts into this year is a UK issue, and it is a combination of our current best assessment of the likely size of the UK crop and therefore the likely overhead recoveries. It also has some fairly, well, realistic/measurable assumptions about the cost of processing that sugar. Looking into next year, within that range, we have taken some account of possible volume impacts from El Niño, but we just do not know. You learn about El Niño really after the event. I think it would be irresponsible of us not to include the likelihood of some weather effects. In the past, El Niño has often led to early and heavy rainfall in Tanzania, but dry weather in South Africa. The hot weather. Spanish beet is irrigated, so there is not a crop risk in Spain. Obviously, I mentioned the UK one.

Speaker #2: And then it also has some fairly well, realistic slash miserable assumptions about the cost of processing that sugar. Looking into next year, we have taken within that range, we have taken some account of possible volume impacts from El Niño, but we just don't know.

Speaker #2: You learn about El Niño really after the event. But I think it would be irresponsible of us not to include the likelihood of some weather effects. In the past, El Niño has often led to early and heavy rainfall in Tanzania.

Speaker #2: And then, dry weather in South Africa. The hot weather—sorry, Spanish beet is irrigated, so there isn’t a crop risk in Spain. Obviously, I mentioned the UK one.

Speaker #2: I think the issues in European sugar really are limited to two: energy prices—gas prices in the UK—and sugar prices across all of Europe.

George Weston: I think the issues in European sugar really are limited to two, energy prices, gas prices in the UK, and then sugar prices across all Europe. I think this end, we are feeling more optimistic about the direction of sugar prices than we have for two or three years. Europe, we think will be. We are fairly sure there will be a significant deficit of sugar production in Europe. Significantly, because it will be significant, I think Europe will get through the stock overhang quickly, as I said before. Looking forward into 2027, 2028, I think there are reasons for optimism both in pricing and then you wonder how long we can all sustain well-nigh GBP 2 a therm gas prices. I think at some point those will come down. Africa, lots of reasons for optimism looking through weather events.

Speaker #2: I think there is—I think this end, we're feeling more optimistic about the direction of sugar prices than we have for two or three years.

Speaker #2: If the Europe we think will be well, we're fairly sure there will be a significant deficit of sugar production in Europe. And significantly, because it will be significant, I think Europe will get through the stock overhang quickly, as I said before.

Speaker #2: So, looking forward into 2027–28, I think there are reasons for optimism, both in pricing, and then you wonder how long we can all sustain well-nigh two-pound firm gas prices.

Speaker #2: So I think at some point that those will come down. Africa, lots of reason for optimism looking through weather events. So in Tanzania, the factory is the new factory as well on the way to commissioning.

George Weston: In Tanzania, the new factory is well on the way to commissioning. Malawi, good. Zambia, good. There has been a problem on pricing, too much imported sugar coming into South Africa, which has affected pricing in South Africa and Eswatini. Those though remain well-placed businesses. Africa, yeah, weather threat, and Europe, I think looking rather better in the medium term.

Speaker #2: Malawi, good. Zambia, good. There's been a problem on pricing—too much imported sugar coming into South Africa—which has affected pricing in South Africa and Eswatini.

Speaker #2: Those, though, remain well-placed businesses. So, Africa—yeah, weather threat. And Europe, I think, looking rather better in the medium term.

Speaker #4: Yeah, like-for-likes. Morning, John. So for Primark, we have been saying that the focus is driving that top-line growth. But as we noted in the statement, you picked out the 4.3% down on continental Europe for like-for-likes for the quarter.

Joana Edwards: Like for likes. Morning, Jon Cox. For Primark, you have been saying that the focus is driving that top-line growth. As we noted in the statement, and you picked up the 4.3% down in continental Europe for the like for likes for the quarter, we do note that the consumer confidence remains weak. Thinking that we go from that base into positive like for likes is quite a leap. We are very wary as well that we need to manage stock and inventory. Yes, we are continuing to focus on gaining market share, but we are aware that the consumer sentiment has still not quite turned, and certainly that is impacting us in quite a few of our markets. You had asked about home delivery profitability as well, and whether that was.

Speaker #4: We do note that consumer confidence remains weak. So, thinking that we go from that phase into positive like-for-likes is quite a leap. And we are very wary as well that we need to manage stock and inventory.

Speaker #4: So, yes, we are continuing to focus on gaining market share, but we are aware that consumer sentiment has still not quite turned, and that's certainly impacting us in quite a few of our markets.

Speaker #4: You had asked about the possibility of home delivery as well, and whether that was—do you want to take that one, or?

Joana Edwards: Do you want to take that one or?

Speaker #3: Yeah. I mean, what we think we can do is, firstly, offset some of the cost of home delivery. The market really has come towards us in terms of pricing for delivery to people's homes.

George Weston: Yeah. What we think we can do is firstly, offset some of the cost of home delivery. The market really has come towards us in terms of pricing for delivery to people's homes. The depot will give us a good Pack and dispatch base, cost base. Then the trick is to make sure that the bulk of the home delivery sales are incremental, not substitutional. We think that we have got the tools to help us along to achieving that.

Speaker #3: The depot gives us—or will give us—a good pack and dispatch base cost base. And then the trick is to make sure that the bulk of the home delivery sales are incremental, not substitutional.

Speaker #3: And we think that we've got the tools to help us along in achieving that.

Speaker #1: Okay. If I could just come back to the like-for-likes for FY27 in Primark. So, we shouldn't necessarily expect Europe to go positive in the current year, but maybe the UK will be slightly better.

Jon Cox: Okay. If I could just come back to the like-for-likes for FY27 in Primark. We should not expect necessarily to go positive in Europe in the current year, but maybe the UK will be slightly better. So we would get somewhere close to flat like-for-likes. Is that the plan?

Speaker #1: So we'd get somewhere close to flat like-for-likes. Is that the plan?

Speaker #4: Yes, I think that we will hopefully see the like-for-likes starting to improve, but we need to put that in the context of the consumer.

Joana Edwards: Yes. I think that we will hopefully see the like-for-like starting to improve, but we need to put that in the context of the consumer. It would be unwise to do so, as I said, particularly in terms of stock management.

Speaker #4: It would be unwise to do so, as I said, particularly in terms of stock management.

Speaker #1: No, but just in terms of all the initiatives you're doing and you're talking about, the new range and the volumes look good, and it just gives us something to hold on to in terms of an improvement at Primark.

Jon Cox: No, but just in terms of all the initiatives you are doing and you are talking about, the new range and the volumes look good and just something for us to hold on to in terms of an improvement at Primark.

Speaker #4: Yes, and we should continue to see improvement. And George talked about the iconic value campaign, which started very well, and we've rolled it out in all the markets.

Joana Edwards: Yes. We should continue to see the improvement. George talked about the Iconic Value campaign, which started very well, and which we have rolled out in all the markets. So we should be seeing an improvement. But it is going to take time. As I say, we do have to take a view on what the markets will do and market performance overall.

Speaker #4: So, we should be seeing an improvement, but it's going to take time. And, as I say, we do have to take a view on what the markets will do.

Speaker #4: And market performance. Overall.

Speaker #1: All right. Thank you.

Jon Cox: All right. Thank you.

Speaker #4: Thanks, John.

Joana Edwards: Thanks, Jon.

Speaker #5: Thank you. Your next question today comes from the line of Frederick Wild from Jefferies. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Frederick Wild from Jefferies. Please go ahead.

Speaker #6: Oh, good morning. Thank you so much for taking my questions. So my first is just about the—they're both really about the external environment, I'm afraid.

Frederick Wild: Oh, good morning. Thank you so much for taking my questions. My first is just about the external environment, I am afraid. The first is on whether you are seeing any extra cost pressures emerge within Primark from the macro environment, whether they be from freight or COGS, and whether there are any offsets to that from, say, sourcing availability in Asia and how that has impacted your FY27 margin guidance for Primark. The second question is, there have obviously been a lot of changes in the last few months in terms of the de minimis exemptions ending in Europe. I just want to see whether you have seen any change in the competitive landscape emerging from that. Thank you.

Speaker #6: The first is on whether you are seeing any extra cost pressures emerge within Primark from the macro environment, whether they be from freight or COGS.

Speaker #6: And whether there are any offsets to that from, say, sourcing availability in Asia and how that's impacted your FY27 margin guidance for Primark. And the second question is, there have obviously been a lot of changes in the last few months in terms of de minimis exemptions ending in Europe.

Speaker #6: I just want to see whether you've seen any change in the competitive landscape emerging from that. Thank you.

George Weston: Primark costs, lots of puts and takes, really. Dollar helps us. Freight is sort of okay. We have had some material cost, so fabric cost increases, but we do not really see those until the second half. Taken all together, there is some cost inflation in the Primark supply chain, but not much.

Speaker #2: Primark costs have lots of puts and takes, really. So, the dollar helps us—freight is sort of okay. We've had some material cost, so fabric cost increases, but we don't really see those until the second half.

Speaker #2: So, taken all together, there is some cost inflation in the Primark supply chain, but not much.

Speaker #4: And the team is continuing to work on driving efficiencies, because there is also inflation, salaries, etc., but this is being compensated by working through the cost base.

Joana Edwards: The team is continuing to work on driving efficiencies because there is also inflation in salaries, et cetera, but compensated by-

George Weston: Yeah

Joana Edwards: working through the cost base.

Speaker #2: We're still—I have to say this, as it's not answering your question on de minimis—but we're still grinding our teeth that everyone else can get steps in place on de minimis to remove the tax advantage, apart from the UK.

George Weston: We are still, I have to say this, it is not answering your question on de minimis, but we are still grinding our teeth rather that everyone else can get steps in place on de minimis to remove the tax advantage, apart from the UK. I have not had any conversations with the Primark team where they have suggested that they are seeing change in consumer behavior because of the de minimis exemption. I do not know, Joana, have you?

Speaker #2: I haven't had any conversations with the Primark team where they've suggested that they're seeing change in consumer behavior because of the de minimis exemption.

Speaker #2: I didn't join a review.

Speaker #4: No, I think—I mean, it comes out in the media, and I think that there's been quite a lot of talk about it. But it's going to take a bit of time for customers to go, like, "Oh, I wanted to use Shein. Oh, it's going to cost me a lot of money, so I'm going to go to Primark instead."

Joana Edwards: No, I think.

George Weston: It has not come up.

Joana Edwards: I mean, it comes out in the media, and I think that there's been quite a lot of talk about it.

George Weston: Yeah

Joana Edwards: It's going to take a bit of time for customers to go like, "Oh, I wanted to use Shein, oh, it's going to cost me a lot of money, so I'm going to go to Primark instead.

George Weston: Yes.

Joana Edwards: It's hopefully something that will filter through.

Speaker #4: Hopefully, it's something that will filter through.

Speaker #6: Thank you. And could I just—sorry—ask a quick follow-up? Based on your comments on cost, does that imply maybe some more cost headwinds in FY28 emerging from this?

Frederick Wild: Thank you. Could I just, sorry, ask a quick follow-up? Based on your comments on cost, does that imply maybe some more cost headwinds in FY28 emerging from this?

Speaker #2: Well, I think we just have to see where these energy costs go, because it's too early to talk about '28 on fabric costs.

George Weston: Well, I think we just have to see where these energy costs go, because it is too early to talk about 2028 on fabric costs.

Speaker #6: Perfect. Thank you so much.

Frederick Wild: Okay. Thank you so much.

Speaker #2: Okay.

George Weston: Okay.

Speaker #5: Thank you. Your next question today comes from the line of Adam Cochrane from Deutsche Bank. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Adam Cochrane from Deutsche Bank. Please go ahead.

Speaker #7: Good morning. A couple of questions on Primark, if I can. When you're thinking about your flat EBIT margin for FY27, you sort of mentioned briefly about the limited like-for-like, maybe, expectations.

Adam Cochrane: Good morning. A couple of questions on Primark, if I can. When you are thinking about your flat EBIT margin for FY27, you sort of mentioned briefly about the limited like-for-like maybe expectations within gross margin. You are doing some investments into pricing, but you have got some benefits from FX, et cetera. What are the moving parts to get to a sort of flat EBIT margin? If you do not have much in the way of like-for-like, you have probably got some cost inflation just naturally coming through. You have got a large cost efficiency plan. Can you just explain how you get to a sort of flat EBIT margin? It seems quite a good performance on a flattish like-for-like. Then secondly-

Speaker #7: Within gross margin, you’re making some investments into pricing, but you’ve also got some benefits from FX, etc. What are the moving parts to get to a sort of flat EBIT margin?

Speaker #7: If you don't have much in the way of like-for-like, you've probably got some cost inflation just naturally coming through. You've got a large cost-efficiency plan.

Speaker #7: Can you just explain how you get to a sort of flat EBIT margin? It seems quite a good performance on a flattish like-for-like. And then, secondly, sorry.

George Weston: Sorry, Adam. Keep going. No, yeah, sorry, you said you had two.

Speaker #2: Sorry, Adam. Thank you.

Speaker #6: Keep going. No, yeah, sorry. You said you had to.

Speaker #7: Yeah, yeah. So, in terms of the volume uplift that we're seeing from the iconic value ranges, are you also seeing a halo effect—that customers coming in to buy those products are also buying some of your other products as well?

Adam Cochrane: Yeah. So in terms of the volume uplift that we are seeing from the Iconic Value ranges, are you also seeing a halo effect that customers coming in to buy those products are also buying some of your other products as well? Or if they are primarily just coming in to buy the Iconic Value ranges, is there a chance that you have to broaden that investment to more of your categories? Then final one is really quickly on the online home delivery, I am assuming the answer is going to be no, but does it have any change in your view of the long-term store expansion potential in Europe, given that you can access some of those customers via a different channel, potentially as you roll out into Europe in the future? Thanks.

Speaker #7: Or are customers primarily just coming in to buy the iconic value ranges? Is there a chance that you have to broaden that investment to more of your categories?

Speaker #7: And then the final one is, really quickly, on online home delivery. I'm assuming the answer is going to be no, but does it have any change in your view of the long-term store expansion potential in Europe, given that you can access some of those customers via a different channel, potentially, as you roll out into Europe in the future?

Speaker #7: Thanks.

Speaker #2: Yeah, good question. The flat EBIT margin has several parts within it. We've talked about the cost base, where I said— as I said, there's not, sorry, kind of commodity costs and labor costs.

George Weston: Yeah, good question. The flat EBIT margin has several parts within it. We have talked about the cost base, where as I said, there is not Sorry, the kind of commodity costs and labor costs, there is not much net news in there. Some of the cost-saving initiatives are quite large, and we will start to see them coming through. The one that we have not really mentioned is, except tangentially, the markdown percentage this year will be higher than last year. Going into next year, well, we have taken steps to address that, and if we successfully do so as we think we will, that will contribute to margin maintenance as well. So offsetting, I think the cost savings there, we have got significant investment in price going on, and I suspect that leads me to the second point about Halo.

Speaker #2: There's not much net news in there. Some of the cost-saving initiatives are quite large, and we'll start to see them coming through. The one that we haven't really mentioned, except some tangentially, is the markdown percentage—this year it will be higher than last year.

Speaker #2: And going into next year, we well, we've taken steps to address that. And that's a and if we successfully do so, as we think we will, that will contribute to margin maintenance as well.

Speaker #2: So offsetting, I think, the cost savings there, we've got significant investment in price going on. And I suspect—I think that that leads me to the second point about halo.

Speaker #2: We know that we're doing this because we know that our reputation for unbeatable value was fraying, and we're putting that right at pace. We are a volume retailer, and therefore the right thing to do is to invest in price wherever there's an opportunity to do that in order to drive volume.

George Weston: We are doing this because we know that our reputation for unbeatable value was fraying, and we are putting that right at pace. We are a volume retailer and the right thing to do is to invest in price wherever there is an opportunity to do that in order to drive volume. The volume uplifts and the promoted prices have been good. We are watching the overall brand reputation around value for money closely. But it is important to repeat what I said in my opening statement, that this repositioning or this kind of sharpening of value goes beyond simply price and also goes into range and fabric and fit. In a number of categories, starting with womenswear, the quality of what we are selling, the durability, the fashionability, the sizing accuracy has all taken a step forward and will continue to do so. So it is more than just price.

Speaker #2: The volume uplifts and the promoted prices have been good, and we're watching the overall brand reputation around value for money closely. But it's important to repeat what I said in my opening statement, that this repositioning, or this kind of sharpening of value, goes beyond simply price and also goes into range and fabric and fit.

Speaker #2: In a number of categories, starting with women's wear, the quality of what we're selling—the durability, the fashionability, the sizing accuracy—has all taken a step forward and will continue to do so.

Speaker #2: So it's more than just price. It's also the other components of value. Home delivery, across Europe, no. We expect and intend that the introduction of home delivery in the UK will actually drive same-store sales.

George Weston: It is also the other components of value. Home delivery across Europe. No, we expect, we intend that the introduction of home delivery in the UK will actually drive same-store sales as we attract more people into the brand. We would expect, if and when we get onto home delivery in Europe, the same thing to happen.

Speaker #2: As we attract more people into the brand, we would expect the same thing to happen if and when we get onto home delivery in Europe.

Speaker #7: Yeah.

Adam Cochrane: Yeah.

George Weston: One of the things that we are interested in Europe is getting the brand better known outside areas where there is a store. No, I do not think it does affect long-term store expansion plans in Europe.

Speaker #2: One of the things that we are interested in, in Europe, is getting the brand better known outside areas where there's a store. So no, I don't think it does affect long-term store expansion plans.

Speaker #7: In Europe. Thank you.

Adam Cochrane: Thank you.

Speaker #6: Okay.

George Weston: Okay.

Speaker #5: Thank you. Your next question today comes from the line of Sridhar Mahankali from UBS. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Sreedhar Mahamkali from UBS. Please go ahead.

Speaker #8: Hi, good morning, team. Thanks for taking my questions. I have a couple of them—most have already been asked. So, perhaps on grocery, George, I think you’re talking about an improved performance in FY27, including harvest losses being consolidated.

Sreedhar Mahamkali: Hi, good morning, team. Thanks for taking my questions. A couple of them, please, most have been already asked. Perhaps on grocery, George, I think you are talking to an improved performance in FY27, including harvest losses being consolidated. You could tell us how you see what the drivers are of an improved performance in grocery, and also what should we be thinking in terms of that harvest losses total, like bakeries losses and expected to improve sharply with the synergies? That is the first one. Secondly, on Primark and home delivery, can you talk a little bit more about how you are preparing for it? What are the milestones? When might we possibly see the launch? Thank you.

Speaker #8: Could you tell us how you see the drivers of improved performance in Grocery? And also, what should we be thinking in terms of that harvested losses total—like bakeries losses—and the ability to improve sharply with the synergies?

Speaker #8: That's the first one. Secondly, on Primark and home delivery, can you talk a little bit more about how you're preparing for it? What are the milestones?

Speaker #8: When might we actually see the launch?

Speaker #2: Yeah, so home delivery, and I think I'll be allowed to not so much apologize but to explain why yesterday's conversation was incomplete. We hadn't at the time actually signed the agreements to buy the Sheffield distribution center, which is quite a big piece of the home delivery story because it allows us to get into home delivery significantly faster than if we had to build a greenfield distribution depot for single pick.

George Weston: Yes.

Sreedhar Mahamkali: Or in Italy and-

George Weston: To home delivery, I think I will be allowed to, not so much apologize, but to explain why yesterday's conversation was incomplete. We had not at the time actually signed the agreements to buy the Sheffield distribution center, which is quite a big piece of the home delivery story because it allows us to get into home delivery significantly faster than had we had to build a greenfield distribution depot for single pick. We could not tell you. As I say, Click & Collect will be in that facility in the first half of next year, and we are not saying anything about the date of starting home delivery because that is pretty sensitive commercial information.

Speaker #2: But we couldn't tell you. As I say, click and collect will be in that facility in the first half of next year. And we're not saying anything about the date of starting home delivery, because that's pretty sensitive commercial information.

Speaker #7: So we're moving at pace.

George Weston: Well, moving at pace is-

Joana Edwards: Well, moving at pace is-

George Weston: Well, we are moving at pace. Bakery losses will be greater than they have been prior to the Hovis acquisition for a couple of reasons. The first one is that a number of energy-related costs, but also wheat, have increased in price, and we need to recover that still from the marketplace. Secondly, there are reorganization costs to be borne through the year, which will increase the losses as well. We do not get the benefits of the synergies until probably we start to see them in the H2 of next year. So the H1 is going to look pretty challenging. That is the largest negative contributor to next year's grocery profitability. We expect to see good growth in Twinings, not least because, I think I mentioned this in July, the cocoa price has come down somewhat.

Speaker #2: We're obviously moving at pace, and the bakery losses will be greater than they have been prior to the Hobus acquisition for a couple of reasons.

Speaker #2: The first one is that a number of costs, energy-related costs but also wheat, have increased in price. And we need to recover that still from the marketplace.

Speaker #2: Secondly, there are reorganization costs to be borne through the year, which will increase the losses as well. We don't get the benefits of the synergies until, probably, we start to see them in the second half of next year.

Speaker #2: So the first half is going to look pretty challenging. That is the largest contributor to next year—well, that's the largest negative contributor to next year's grocery profitability.

Speaker #2: We expect to see good growth in Twinings, not least because—I think I mentioned this in July—the cocoa prices have come down somewhat.

Speaker #2: And secondly, within Twinings' overall team, we're beginning to see some of the benefits of the investment in digital infrastructure and ERP. Australia should give us decent growth.

George Weston: Secondly, within Twinings local team, we are beginning to see some of the benefits of the investment in digital infrastructure and ERP. Australia should give us decent growth. We are worried about the Australian consumer. The United States, I am afraid there is still more volume to be lost in our oils business, so that is a drag. The rest of UK grocery, I think, will be good.

Speaker #2: We're worried about the Australian consumer. In the United States, I'm afraid there's still more volume to be lost in our oils business, so that's a drag.

Speaker #2: The rest of UK Grocery, I think, will be good.

Speaker #6: Thank you.

Georgina Johanan: Thank you.

Sreedhar Mahamkali: Thank you.

Speaker #2: Okay. Thank you.

George Weston: Okay. Thank you.

Speaker #5: Thank you. Your next question today comes from the line of Anupav Malhotra from Pamo Librum. Please go ahead.

Operator: Thank you. Your next question today comes from the line of Anubhav Malhotra from Panmure Liberum. Please go ahead.

Speaker #8: Hi, Dean. Thank you for taking my questions. I have two on sugar, really. There has been some recent news in the African press on acquisition interest in Illovo.

Anubhav Malhotra: Hi, team. Thank you for taking my questions. I have two on sugar, really. There have been some recent news in the African press on acquisition interest in Illovo. In that context, maybe can you share your views on the strategic value of that business and if you would be open to any options for the asset if there is an attractive enough offer? Secondly, there is also some recent news on sugar import tariff regime in South Africa. They have increased the prices on those imported sugar. Does that have any impact on your view on the profitability of the South African sugar business for next year? I know that has been a drag, or not yet. Thank you.

Speaker #8: So, just in that context, maybe can you share your views on the strategic value of that business, and if you would be open to any options for the asset if dates and an attractive enough offer? Secondly, there's also some recent news on the sugar import tariff regime in South Africa.

Speaker #8: They've increased the prices on those imported sugars. Does that have any impact on your view of the profitability of the South African sugar business for next year?

Speaker #8: I know that has been a drag, or not yet. Thank you.

Speaker #2: Yeah, two good questions. Look, the commentary in the South African press about acquisition interest in local is just gossip. And we're not going to say any more than that, because we just don't discuss either gossip or anything to do with sort of corporate-level activity.

George Weston: Yeah, two good questions. Look, the commentary in the South African press about acquisition interest in Illovo is just gossip. We are not going to say any more than that because we just do not discuss either gossip or anything to do with corporate level activity. The tariff regime, I do not think the changes will help 2027 because there is a lot of stock in the country that is coming very cheaply. There is a market overhang there. We do not think the tariff regime changes go far enough, and we are making that point to the authorities. The situation with the new suggested prices is less bad, but it is not good. I do not think they have done the job that they need to do in order to support growers and millers in South Africa. Yeah. I would not believe everything you read in the South African press.

Speaker #2: The tariff regime—I don't think the changes will help '27 because there's a lot of stock in the country that's come in very cheaply and remains. There's a market overhang there.

Speaker #2: We don't think the tariff regime changes go far enough. And we're making that point, too. The suggested prices are less bad, but it's not good.

Speaker #2: I don't think they've done the job that they need to do in order to support growers and millers in South Africa. Yeah, I wouldn't believe everything you read in the South African press.

Anubhav Malhotra: Can you just clarify if you would be open to strategic options for that asset? Not particularly with this offer, but in general.

Speaker #8: But can you just clarify if you would be open to strategic options for that asset? Not particularly with this offer, but in general.

Anubhav Malhotra: Can you just clarify if you would be open to strategic options for that asset? Not particularly with this offer, but in general.

George Weston: I am not going to speculate.

Speaker #2: I'm not going to speculate. I'll give you the other part of the business, but I'm not going to do it on this one.

Anubhav Malhotra: Okay. Thank you.

George Weston: I would not on any other part of the business, I am not going to do it on this one.

Speaker #5: Thank you. We will now go to the next question. The next question today comes from the line of Georgina Johannen from JP Morgan.

Operator: Thank you. We will now go to the next question. The next question today comes from the line of Georgina Johanan from J.P. Morgan. Please go ahead.

Speaker #5: Please go ahead.

Georgina Johanan: Oh, hi. Three questions from me, please. The first two just being clarification, if that's okay. First of all, on the freight point, I am a little confused because obviously we have already seen material freight inflation. We have had retailers such as Inditex referencing the pressure on gross margin as a result. So when you say freight is expected to be okay next year, do you mean you have offsets or are you actually not expecting to see any pressure from freight next year and therefore instead it could perhaps be a FY28 issue? That is the first one, please. The second one was just on home delivery. I understand your point around attracting more people to the brand in Europe and therefore perhaps increasing store like-for-likes in Europe.

Speaker #7: Oh, hi. Three questions from me, please. The first two just being clarifications, if that's okay. Just first of all, on the freight point, I'm a little confused because obviously we've already seen material freight inflation.

Speaker #7: We've had retailers such as Inditex referencing the pressure on gross margin as a result. So when you say freight is expected to be okay next year, do you mean you have offsets, or are you actually not expecting to see any pressure from freight next year and therefore instead it could perhaps be a fiscal '28 issue?

Speaker #7: That's the first one, please. The second one was just on home delivery. I understand your point around attracting more people to the brand in Europe and therefore perhaps increasing store like-for-likes in Europe.

Speaker #7: But just to be clear, in the UK, have you factored in a portion of cannibalization or are you actually expecting it to drive higher in-store like-for-like sales in the UK as well, please?

Georgina Johanan: But just to be clear, in the UK, have you factored in a portion of cannibalization, or are you actually expecting it to drive higher in-store like-for-like sales in the UK as well, please? Then just finally, given some of the moving parts on the balance sheet and the warehouse acquisition and so on, could you just perhaps give some color on how you are thinking about share buybacks into next year, please? Thank you so much.

Speaker #7: And then just finally, given some of the moving parts on the balance sheet and the warehouse acquisition and so on, could you just perhaps give some color on how you're thinking about share buybacks into next year, please?

Speaker #7: Thank you so much.

Speaker #2: Thanks, Georgina. Freight, we are pretty well hedged out through next year. So on sea freight, we use very little air freight, where I think rates have increased very significantly, but really aren't having an impact on us.

George Weston: Thanks, Georgina Johanan. Freight, we are pretty well hedged out through next year. On sea freight, and we use very little air freight, where I think rates have increased very significantly but really are not having an impact on us. So that is freight. It is not a question of offsets. Home delivery in the medium term, we think will drive same-store like-for-likes. So it is not an overall like-for-like figure. We think it will support stores on top of being incremental volume in its own channel.

Speaker #2: So that's freight. So it's not a question of offsets. Home delivery, in the medium term, we think will drive same-store like-for-likes. So it's not an overall like-for-like figure.

Speaker #2: We think it'll support stores on top of being incremental volume in its own channel.

Speaker #7: If I may, we haven't decided on how we're going to report, if that was the question—whether we report it separately or not.

Joana Edwards: If I may just-

George Weston: Yeah.

Joana Edwards: We haven't decided on how we're going to report if that was the question, if we'll report it separately or not.

Speaker #2: Yeah.

Speaker #7: Yeah.

George Weston: Yeah.

Speaker #2: And then share buybacks. Well, surplus cash firstly goes back into the business where there’s a demand. And Joana, you were saying?

Joana Edwards: Yeah.

George Weston: And then share buybacks. Well, surplus cash firstly goes back into the business where there's a demand. Joana, you were saying before?

Speaker #7: Well, I think it's a bit like what I've already said to Clay, which is that now, capital allocation, to your point, is about investment. Yes, we've just spent significant amounts of money.

Joana Edwards: Well, I think it's a bit what I've already said to Clive Black, which is our capital allocation, to your point, is about investment. Yes, we've just spent significant amount of money. I think Debenhams put it out there, 90 million on the distribution center. We've made some good investments. Leverage will be within what we feel is the right level. So the decision will be made by the board in October, and at that point in time, we'll communicate, but priority on investment in the business.

Speaker #7: I think dividends put it out there—£90 million on the distribution center. We've made some good investments. Leverage will be within what we feel is the right level.

Speaker #7: So the decision will be made by the Board in October. At that point in time, we'll communicate. But priority is on investment in the business.

Georgina Johanan: Thank you very much. May I just follow up on the freight point, because I understand about the hedging, but my understanding, but perhaps I'm incorrect, is that there does tend to be fuel surcharges that come in over and above your hedged levels. Is that not the case for Primark then?

Speaker #7: Thank you very much. May I just follow up on the freight point? Because I understand about the hedging, but my understanding—perhaps I'm incorrect—is that there do tend to be fuel surcharges that come in over and above your hedged levels.

Speaker #7: Is that not the case for Primark, then?

Joana Edwards: I think we'd probably rather stay away from our commercial arrangements.

Speaker #3: I think we'd probably rather stay away from our arrangements, our commercial arrangements.

Speaker #7: So, just to be absolutely clear, you’d expect freight costs, from a margin perspective, to be flat year-on-year into fiscal '27?

Georgina Johanan: Just to be absolutely clear, you'd expect freight costs from a margin perspective to be flat year-on-year into FY27?

Speaker #3: We don't see freight as a headwind going into FY27.

Joana Edwards: We don't see freight as a headwind going into FY27.

Speaker #7: Okay, very clear. Thank you very much.

Georgina Johanan: Okay. Very clear. Thank you very much.

Speaker #5: Thank you. The next question comes from the line of Warwick Oaklands from BNP Paribas. Please go ahead.

Operator: Thank you. The next question comes from the line of Warwick Okines from BNP Paribas. Please go ahead.

Speaker #8: Morning, everyone. I have three questions as well, all on Primark, just building on what you've said. Firstly, could you reassure us about how much tighter your Primark inventory is heading into winter, just to reassure us about the margin recovery?

Warwick Okines: Morning, everyone. Yeah, three questions actually from me as well, all on Primark, just building on what you've said. Firstly, could you reassure us about how much tighter your Primark inventory is heading into winter just to reassure us about the margin recovery? So maybe something around cover or inventory per store. Secondly, George, you mentioned the price investment in Iconic Value, and I think Eoin a few months ago was talking about, for example, in kidswear, reducing a third of new lines on a like-for-like basis. So what sort of overall pricing like for like do you see in autumn winter and maybe heading into next year? Thirdly, on home delivery, could you remind me where you are on RFID and whether you need this for home delivery or if that's a separate consideration? Thank you.

Speaker #8: So maybe something around cover or inventory per store. Secondly, George, you mentioned the price investment in iconic value. And I think Eoin, a few months ago, was talking about, for example, in Kidswear, reducing a third of new lines on a like-for-like basis.

Speaker #8: So what sort of overall like-for-like pricing do you see in autumn and winter, and maybe heading into next year? And thirdly, on home delivery, could you remind me where you are on RFID and whether you need this for home delivery, or if that's a separate consideration?

Speaker #8: Thank you.

Speaker #2: Yeah. There is a lot of work going on in the supply chain which will, taken together, improve stock accuracy and reduce cost. In improving stock accuracy, it’ll also improve availability.

George Weston: Yeah. There is a lot of work going on in the supply chain, which will, taken together, improve stock accuracy and reduce cost. In improving stock accuracy, it'll also improve availability. So those are really important projects for us. How much tighter? I think there are a couple of things. I think we, like many others, are looking at these transition ranges. We got caught, quite frankly, last year with far too many heavyweight garments post-Christmas, and we sold them at very significant discounts. We won't be doing that again. So there's a sort of tightening up on autumn-winter heavyweight. At the same time, a development, again, like many others doing, of transition products. We have seen great response to workout gear. That is a very strong transition product for us already, and we'll be doing more of it.

Speaker #2: So we're those are really important projects. For us. How much tighter I think there are I think there are a couple of things. I think that I think we like many others are looking at these transition ranges.

Speaker #2: We got caught, quite frankly, last year with far too many heavyweight garments post-Christmas, and we sold them at very significant discounts.

Speaker #2: We won't be doing that again. So there's a sort of tightening up on autumn/winter heavyweights. And at the same time, a development—again, like many others are doing—of transition products.

Speaker #2: We have seen a great response to workout gear. That is a very strong transition product for us already, and we'll be doing more of it.

Speaker #2: So it's just an example where we're rethinking, if you like, August through September, October, and we're rethinking post-Christmas in the ranges, both in quantity and also in the offer.

George Weston: It's just an example that we're rethinking, if you like, August through September, October, and we're rethinking post-Christmas in the ranges, both in quantity and also in the offer.

Speaker #7: Just from a balance sheet perspective, if that was part of the question, we should be seeing a working capital that is not increasing going forward.

Joana Edwards: Just from a balance sheet perspective, if that was part of that question, we should be seeing a working capital that is not increasing. We will have less weeks cover going into the end of this financial year.

Speaker #7: We will have fewer weeks' cover going into the end of this financial year.

Speaker #2: Yeah. And then, sorry, kidswear price investment. I think I'm just going to take the Fifth on that one.

George Weston: Yeah. Then, sorry, kidswear price investment. I think I am just going to take the fifth on that one.

Speaker #8: But, I mean, I was really thinking about across all of Primark. I think you've said that your like-for-like prices are lower on average.

Warwick Okines: But I was really thinking about across all of Primark. I think you have said that your like-for-like prices are lower on average. Is that a fair reflection of Autumn/Winter?

Speaker #8: Is that a fair reflection of autumn and winter?

George Weston: That is a fair reflection of Autumn/Winter.

Speaker #2: That's a fair reflection of autumn and winter.

Speaker #8: Yeah.

Warwick Okines: Yeah.

Speaker #2: And kidswear is an important part of that pricing initiative—pricing strategy.

George Weston: Kids' wear is an important part of that pricing initiative, pricing strategy.

Speaker #8: Yeah. And RFID home delivery?

Warwick Okines: Yep. RFID home delivery?

Speaker #2: I'm also going to help you out on that one.

George Weston: I am also going to decline to help you out on that one.

Speaker #8: Okay, fair enough. In which case, I'll ask number four. Perhaps you can—I mean, I think Georgina already asked this in many ways—but I suppose I don't understand why you would expect home delivery to drive incremental store like-for-likes, unless you've seen that happen in click and collect.

Warwick Okines: Okay, fair enough. In which case, I will ask number four. Perhaps you can. I think Georgina Johanan already asked this in many ways, but I suppose I do not understand why you would expect home delivery to drive incremental store like-for-likes, unless you have seen that happen in Click & Collect. Have you seen that within obviously

Speaker #8: Have you seen that within, obviously, what have been negative like-for-likes in the last couple of years?

George Weston: Yes

Warwick Okines: What have been negative like-for-likes in the last couple of years?

Speaker #2: We've seen the attachment rate in stores be significant, and we have seen footfall improvements in stores too. We're also seeing a new shopper coming in because we have Click and Collect.

George Weston: We have seen the attachment rate in stores be significant. We have seen footfall improvements in stores, too. We are seeing a new shopper coming because we have Click & Collect.

Speaker #8: Got it. Okay, thank you very much.

Warwick Okines: Got it. Okay. Thank you very much.

George Weston: Okay. Thanks, Rory.

Speaker #2: Okay. Thanks, Warwick.

Speaker #5: Thank you. The next question today comes from the line of Vandita Sood from Citi. Please go ahead.

Operator: Thank you. Next question today comes from the line of Vandita Sood from Citi. Please go ahead.

Speaker #7: Hi, morning. Thank you for taking my questions. Just a really quick one on Sugar, if I can clarify, and CapEx. So on Sugar, I think you've previously spoken about a £25 million adjustment from the Malawian currency.

Vandita Sood: Hi. Morning. Thank you for taking my questions. Just a really quick one on Sugar, if I can clarify, and then I have one on Primark CapEx. On Sugar, I think you have previously spoken about the GBP 25 million adjustment from the Malawian currency, and I think previously this was in this year's guidance. Just wondering, you are closer to the GBP 60 million losses this year, even though you have not taken into account the GBP 25 million from the currency, and is that also now in your assumption for FY27? Then just building on couple of other questions on Primark home delivery, just wondering what else we need to think about in terms of CapEx other than the fulfillment center that you require. Presumably you need things like a CRM functionality, payment functionality, merchandising.

Speaker #7: And I think previously, this was in this year's guidance. Just wondering—so you're sort of closer to the £60 million losses this year, even though you've not taken into account the £25 million from the currency?

Speaker #7: And is that also now in your assumption for FY27? And then, just building on a couple of other questions on Primark home delivery, I’m just wondering what else we need to think about in terms of CapEx, other than the fulfillment center that you require.

Speaker #7: I mean, presumably you need things like CRM functionality, payment functionality, and merchandising. How incremental, how much more incremental CapEx do you need versus just setting up click-and-collect, versus when you set up home delivery?

Vandita Sood: How much more incremental CapEx do you need versus just setting up click and collect versus when you set up home delivery? Thank you.

Speaker #7: Thank you.

Speaker #2: So the numbers we're talking about for FY26 Sugar, I think, have two partially offsetting big elements to them. The first is the increase in the onerous contracts, driven by overhead recoveries next year and gas prices next year.

George Weston: The numbers we are talking about for FY26 Sugar, I think have two partially offsetting big elements to them. The first is the increase in the onerous contracts driven by overhead recoveries next year and gas prices next year. That is a significant negative. The positive is that Malawi has not devalued. The effects of devaluation on profitability are more complicated because we are into hyperinflation accounting. We are not through this year yet, so there remains some residual risk the Malawians decide to devalue. We know the devaluation is coming. We will have to offset the price devaluation with pricing, if and when it comes. Yeah, it is an assessment of it, an estimate of it, and the timing of it is in the range I have given you, the -70 to -170. We are quite sure that it will come. It has to come.

Speaker #2: That's a significant negative. The positive is that Malawi hasn't devalued. Now, the effects of devaluation on profitability are more complicated because we're into hyperinflation accounting.

Speaker #2: And I mean, we're not through this year yet, so there remains some residual risk that Malawi decides to devalue. We know the devaluation is coming.

Speaker #2: We will have to we will have to offset the price devaluation with pricing if and when it comes. So yeah, it's an assessment of it, an estimate of it, and a timing of it is in the range I've given you the minus 70 to minus 170.

Speaker #2: And we're quite sure that it will come, but it has to come. Home delivery and other functionality are, sort of, slightly caught up in my point about our own digital journey.

George Weston: Home delivery, other functionality is slightly caught up in my point about our own digital journey. We have built a lot of capability that supports home delivery. Now, there will be some extra we need, but we do have quite a lot of the infrastructure already that we will need. This is currently supporting both the digital communication, but also Click & Collect. So the extra CapEx is not huge.

Speaker #2: We have built a lot of capability that supports home delivery. Now, there will be some extra we need, but we do have quite a lot of the infrastructure already that we will need.

Speaker #2: This is currently supporting both additional communication, but also click and collect, so the extra capex is not huge.

Speaker #7: Thank you. And sorry, just a quick follow-up on the offsetting sugar with the pricing point. What is the earliest you can start to benefit from the sort of higher sugar prices in the market, given where you are in your contracting cycle?

Vandita Sood: Thank you. Sorry, just a quick follow-up on the offsetting Sugar with the pricing point. What is the earliest you can start to benefit from the higher Sugar prices in the market, given where you are in your contracting cycle?

Speaker #2: Well, I think Spain has more spot trade than the UK. The UK, I think we shouldn't be estimating any pricing improvement in ’27. So, this time next year, we'll be through the contracting round for ’28.

George Weston: Well, I think Spain has more spot trade than the UK. The UK, I think we shouldn't be estimating any pricing improvement in 2027. So this time next year we will be through the contracting round for 2028. We will be looking into, I think, significant higher prices. But we won't benefit from it in the UK until 2028. In Spain, there may be some earlier improvement.

Speaker #2: And we'll be looking into, I think, significantly, well, higher prices. But we won't benefit from it in the UK until 2028. In Spain, there may be some earlier improvement.

Speaker #7: Very clear. Thank you.

Vandita Sood: Very clear. Thank you.

Speaker #5: Thank you. That was our final question for today. I will now hand back to George for final remarks.

Operator: Thank you. That was our final question for today. I will now hand back to George for final remarks.

Speaker #2: No, I really just want to thank you all for coming on this call. It's been an important one, and I think it's one where I hope you begin to understand our confidence. Well, there's a lot of work going on, and there's a lot of good work going on, which sets us up well for the future. Home delivery is obviously important.

George Weston: No, I really just to thank you all for coming on this call. It has been an important one, and I think it is one where I hope you begin to understand our confidence. There is a lot of good work going on which sets us up well for the future. Home delivery, obviously important. The two franchises, Saudi and Mexico, do not underestimate their importance in the medium term. The sugar production levels in Europe, do not underestimate the importance of them looking into 2028. That is on top of a lot of other good work that is going on, both in the digital space, but also now we are getting into completion of some of the CapEx projects that have been going on for two or three years. So it is actually a very busy time. It is a very exciting time.

Speaker #2: The two franchises, Saudi and Mexico—don't underestimate their importance in the medium term. The sugar production levels in Europe—don't underestimate the importance of them, looking into '28.

Speaker #2: And then that's on top of a lot of other good work that is going on both in the digital space, but also now we're getting into the completion of some of the CapEx projects that have been going on for two or three years.

Speaker #2: So, actually, it's a very busy time. It's a very exciting time. I think the numbers don't reflect the optimism that we all have for both sides of the business.

George Weston: I think the numbers do not reflect the optimism that we all have for really both sides of the business. Lots to be done on the demerger still. So thank you very much.

Speaker #2: And there's still lots to be done on the demerger. So, thank you very much.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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