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Associated British Foods Q3 Group Revenue Down 39% At Constant Currency

Associated British Foods plc. (ASBFY.PK,ABF.L) reported that its group revenue from continuing businesses for the third-quarter dropped 39 percent to 2.61 billion pounds at constant currency.

Group revenue from continuing businesses for the 40 weeks ended 20 June 2020 was 13% lower than the same period last year at constant currency and 14% lower at actual exchange rates.

In grocery, third quarter revenues were 9% ahead of last year, with increased retail volumes, and margin and operating profit were strongly ahead. Grocery benefited in the third quarter from increased sales volumes through the retail channel which more than offset weaker foodservice demand.

AB Sugar adjusted operating profit was well ahead of last year in the third quarter, driven by British Sugar and our Spanish sugar business which both benefited from higher EU sugar prices compared to last year's levels. However, revenue was held back by lower Illovo export volumes. Full year operating profit will be materially ahead of last year.

In Ingredients, revenue in the third quarter was 3% ahead of last year, driven by both AB Mauri and ABF Ingredients.

AB Agri revenues were in line with last year in the third quarter with higher sales of feed enzymes offsetting lower poultry feed volumes affected by lower foodservice demand for chicken.

In retail, quarterly revenues were 582 million pounds, down 75% from the prior year at constant currency.

As a result of the rapid spread of COVID-19 in itsmarkets, all of its 375 Primark stores closed in a 12-day period to 22 March. This resulted in a loss of sales of some 650 million pounds per month, the company said.

For the full year, the company continues to expect strong progress in the aggregate adjusted operating profit of Sugar, Grocery, Agriculture and Ingredients businesses. This will be mainly driven by a material increase in profit at AB Sugar and another year of good margin and profit growth in Grocery.

The company estimates that, absent a significant number of further store closures, adjusted operating profit for Primark, excluding exceptional charges, will be in the range 300 million pounds - 350 million pounds for the full year compared to 913 million pounds reported for the last financial year.

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