DAVY VIEW

We hosted an institutional briefing with John Bason, Associated British Foods Group Finance Director in London on January 17th. Bason struck a confident tone on the long-term potential of Primark and Grocery, with a positive near-term outlook for Sugar. Future growth of Primark will be driven by new market expansion (Eastern Europe) and disciplined store rollout in Spain and the US. The franchise rebuild in Germany is underway with improving economics. Primark is a unique retail model embracing sustainability in the face of growing eco-consumerism. The market continues to unfairly discount its long-term potential. We reiterate our ‘Outperform’ rating.