Good morning. Thank you for standing by. Welcome to the Associated British Foods trading update conference call hosted by George Weston, CEO, and Joana Edwards, CFO. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to slowly press star one and 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. Morning, everyone. Thank you for joining this call. As you'll probably know, we've put back this reporting date, this trading update, having not had it for a couple of years. We've done that primarily because we can give you more certainty about sugar at this date. Just before I get into the meat of what I'm going to be saying, we've picked up that there's a bit of uncertainty about why we've chosen the dates for Primark reporting that we've done. I just wanted to head that one off straight away. The first thing is, if you go back to 2023, this trading update was earlier in June. We didn't have the June figures at that point for Primark. We do now have the June figures. We can report on them. Rather than give you a trading update to a period six weeks ago, we thought it would be more helpful to give you something that was bang up to date. We haven't done that because June was a better month and we are trying to flatter our figures, but because, as I say, our desire to give you up-to-date figures. If we take June out of the U.K. figures, though, we were -1.1 with June in, we are -0.5. That's U.K. Across the rest of our markets, it makes no difference through that period. I hope that kind of covers off that issue. It was a resilient quarter. Primark progress, we think has been solid, as has Grocery and Ingredients. Those businesses all remain on track. There's no change to the guidance. I'll share some more color on all those sectors in a moment. I do want to start about sugar. As I say, the reason for putting this reporting date back in is to give you a bit more certainty on sugar. In Europe, we've got visibility of the processing campaign. It finishes in spring. By now we know our volumes, the contract and selling prices are known, and our production and beet costs are known. Three months ago, we couldn't have said that. The profitability of next year's sugar campaign, which begins in September, we start processing beet, this is in Europe, can be difficult to assess at this stage. We have to be just a little bit careful of being too certain about next year in Europe. The contracting round is underway. It typically runs for a few more months, so we don't have certainty about pricing going into next year. It's difficult to assess production costs for next year, particularly hard at the moment given the volatility in gas prices as a result of the Middle Eastern conflict. I'll come back with some sensitivities around that. At this time of year in Africa, our annual campaign has only just begun. The southern hemisphere, things are upside down. It typically runs and crosses until December. It straddles, therefore, our year end. You get movement in profitability between the two years, depending on issues like when the campaign starts, how well it starts, how well it finishes. As I say, the phasing of production and sales in Illovo can be affected by weather and by operational issues at the factory. We don't have full visibility of the African number until closer to the financial year-end. We have in Africa this year two additional uncertainties. This is at the year for 2026. The first one is the pace of the ramp-up of the new Tanzanian sugar mill, so far so good, but early days. Secondly, it's quite an important issue as to whether there's to be a devaluation of the Malawian currency in this financial year or whether it falls into next financial year. There's quite a big swing in profitability in sugar this year, depending on the timing of that devaluation. We're providing a range of outcomes for the operating loss in sugar because of these uncertainties. It goes from GBP 25 million to GBP 60 million. GBP 60 million takes into account. Let me go through some of the uncertainties. First, gas prices into next year. This year in Europe, we paid about GBP 0.75 a therm for gas. It obviously spiked up to GBP 1.60. It's now selling at around about GBP 1.00. If it doesn't come down further, we will be recognizing more onerous contracts in this year's number. If it comes down, we will be recognizing less. To give you an idea into next year of the effect of gas costs is between GBP 600,000 and GBP 700,000 profit, either up or down, per GBP 0.01 a therm. As we are sitting at GBP 1.04. If it went up to GBP 1.14, that would be down GBP 6 million or GBP 7 million. If it went down to GBP 0.94, it would be up GBP 6 million or GBP 7 million. That obviously has an effect on next year's profit. It also has an effect on these onerous contracts into this year's figures. If there's a devaluation of the Malawian kwacha this year, the negative profit impact will be around GBP 25 million. That is included in that GBP 60 million bottom end number. Thirdly, if the initial ramp-up of the new mill in Tanzania is slower, this could impact profit, again, by kind of single-digit numbers of millions. You need to be aware of that. Looking ahead into 2027, our expectation is there will be a further deterioration in the sugar result from that GBP 60 million potential operating loss this year. That number assumes gas prices remain at their current year for the entirety of next year. Average sugar prices in Europe are not yet sufficiently known. Energy fuel, fertilizer costs, not really known. Production levels in Africa, not really known. The split between 2026 and 2027, not really known. There is one other effect that we haven't seen having an impact yet, but we have seen in previous years, which is the El Niño weather impact, which typically reduces sugar production in Tanzania because it gets too wet and South Africa because it gets too dry. As I say, we're not seeing that yet, but in the past, it's had a reasonably significant impact on sugar production and therefore profitability. On to European sugar prices. We expect that there will be a significant reduction in European sugar production in the harvest that'll start in about September. The European sugar data, which was published by the commission following its June management committee meeting, estimated a production drop of nearly 15% in this year's harvest. That's a combination of acreage, which will be well known, and yield, which is estimated at this stage. They've essentially said, "Look, last year had a great yield. Let's just assume that the yield returns to its long-term average," which is 5% down on last year's yield. This hot weather has had some impact on plant health, both in this country and across Northern Europe. We think that that yield reduction is possible, but the crop has a long way to run. Big reduction, we think, in sugar production. That's great in a couple of ways. Firstly, in the supply-demand balance, there is a stock overhang that will mitigate against bigger price changes because of that on the back of production reductions and sugar output reductions. I think in the longer run, it should give all of us confidence that there has been a supply-side response and quite a big one to prices going down. I think there's been some skepticism about whether we'd ever see that, and we have, so that's good. The performance of the sugar business continues to be one of our big priorities. We continue to look very seriously at how to lower our cost base going forward, particularly, but not just in Europe. Let's look then at the quarter performance, three performance in our other businesses. In Primark, total sales were up 3%. In the context of challenging consumer environments in most of our markets, that's okay. We've continued to make good progress to strengthen our consumer customer proposition everywhere. As you know, the focus so far has largely been on the U.K. market and on womenswear. In the U.K., sales grew 1%, like-for-like sales were broadly flat in the quarter. We continued to gain market share and do so quite strongly. The outbreak of the Iran conflict had a negative impact on consumer sentiment. April and May weather was up against really good trading weather the year before, and so not surprisingly, April and May were a bit soft. I've given you the number in the U.K. Trading bounced back very well in June. We are seeing the benefit of our sharper focus on price And from the improved product offer, as I say, starting in womenswear. We are seeing the launch of some exciting new ranges. Our increased marketing is working well; w e are really starting to see the impact of the digital investment, including click-and-collect, which has had a strong period. Like-for-like sales in Europe remain weak. We know what the challenges are, and we're beginning to take the required actions. It's still early days. We are seeing some green shoots from certain initiatives. We're investing more in our marketing and digital capabilities. We're more targeted on our core customer base. Other campaigns are still to come in Europe this summer. We've seen the first of an integrated marketing campaign, including a full advertising campaign in Spain. We've seen other good work, too. Overall, I really am encouraged by what's already been achieved to improve Primark's customer proposition. I'm excited about what else we have to come over the coming weeks. New store openings contributed 5 percentage points to sales growth in quarter three. The 10 new stores opened in the quarter included our first store in Manhattan, which has got off to a very strong start. The starting couple of weeks were great, and it's been strong since. We expect the halo effect to be very positive for the brand, in the U.S. generally and in New York State and greater New York in particular. The franchise stores in the Middle East have traded exceptionally well, despite the circumstances in that part of the world. We're now up to four stores in the region. We've got a good pipeline. There's no change to our guidance for the 2026 financial year for Primark. It's a challenging consumer environment, and we still expect Primark to deliver an adjusted operating profit margin for the full year of approximately 10%. This expectation includes increased investment in initiatives to drive like-for-like sales and also increased investment in our technology capabilities. In grocery, sales were up 1% with good growth across a number of our brands and businesses, including Twinings. U.K. oils remains a drag on growth this year. That is not new news. That's what we've been seeing for a while. We welcomed the recent decision by the U.K. Competition and Markets Authority to approve our acquisition of Hovis. The combination of production and distribution activities of Allied Bakeries and Hovis, we expect to drive significant cost synergies that we can use to invest in product innovation and the creation of a sustainably profitable bakery business. We're working on next steps towards the completion of that acquisition. The ingredients quarter- three performance was broadly as expected, with sales up 3%. Growth came from both our yeast and our bakery ingredients businesses and from our specialty ingredients portfolio. We continue to support future growth with small acquisitions in the period. Agriculture sales were down as we'd expected. Following a customer loss earlier this year in our U.K. compound feed business, which has always been a low- margin business, we are adjusting our cost base. We sold one of our nine compound feed mills during the period as part of the process of adjusting that cost base. Across the group, we continued to take targeted actions and make investments to drive performance. Several long-running projects have either recently been completed or are nearing completion. The biggest of course is that Tanzanian factory. These investments underpin our confidence in the long-term growth prospects for the group. With that, let me hand over to you for questions. As a reminder, to ask a question, you will need to slowly press star one one on your telephone and wait for your name to be announced. Thank you. We will now go to our first question. One moment, please. Your first question today comes from the line of Monique Pollard from Citi. Please go ahead. Oh, hello. Morning. Thank you for taking my questions. Two if I can, please. The first was just on the Ingredient sales. They were quite a bit better in the third quarter, as you mentioned, George, versus the first half. Just trying to understand whether the profit could also come in better, just given the profit guidance for the year is unchanged in that segment. The second question I had was just on if I look at Primark, the like-for-likes maybe have come in slightly better than maybe people were expecting. Just wondering if the like-for-likes are coming in better or worse than what you had planned and budgeted, and whether given that and given your reiteration of the 10% EBIT margin target, whether that's an indication that you feel that your price proposition is roughly in the right place, please? Yes. Thank you. Two good questions. The ingredient sales, they've been more or less in line with where we had expected. There are a lot of different geographies and different sectors across our ingredients division, and different companies across the ingredients. The profit expectation, we've reiterated with a degree of, I think, relative certainty of where we're going to end up now. I wouldn't write the profits up this year. In the longer run, we think we're well-placed in the ingredients sectors for future growth. This year, I think the profit guidance is pretty well-placed. For Primark like-for-likes sales, we're certainly pleased with the U.K., and we are pleased with womenswear. We are pleased with the beginnings of the repositioning of the resetting of value expectations. The "Major Finds" initiative is important. Reflagging price points in stores, that's done well. Some of the new products, particularly Performance, really, really good. Primark at its best, I think with startlingly lower prices for good relevant product in a growing sector. That's Primark at its best. I think if I were being honest, I would say that we're more disappointed that Europe hasn't improved faster because we are working at price perception. We have started the full integrated marketing work in some of the markets. We remain convinced it's going to come, it's maybe just a bit slower than we would have hoped. The U.K. is good. The European consumer environment is quite subdued as well. Yes, we are in a context which is difficult, too. Yeah. Understood. I think when we last spoke, we were very concerned about the consumer response in the U.K. to the situation, to the war in Ukraine, we are, I think now, a little bit more relaxed about that. We haven't, for example, seen a collapse in holiday bookings and beach holidays driving sales in the back half of the financial year in Primark. We were worried specifically about that, but I think we're okay. Great. Thank you. Thank you. Our next question today comes from the line of Frederick Wild from Jefferies. Please go ahead. Good morning, George and Joana. Thank you so much for taking my questions. The first one is all about just decomposing what's happening in trading right now. I don't suppose you could give us an update in how you see overall consumer- Frederick, sorry, we're having a bit of trouble understanding your question. Sorry. We are just hearing it. Could you speak up a little? Is this any better? Yeah, that's overcompensating. Fabulous. Sorry about that. I have no doubt, though, that we can hear you. I will talk very softly. The first question is just about understanding the current dynamics in the market and your trading. I don't suppose you could give us your sense of underlying consumer health outside of things like weather swings and calendar shifts and all that sort of thing. I guess beyond that, how trading in July has proceeded and whether we should think about maybe a few more products going into sale. The second question is, I know you talked previously about really expecting to start to see some of the impact of the actions you're taking in Primark coming through in either the spring-summer 2027 collection or even into autumn-winter 2027. Is that still the right way to think about the cadence of improvement in Primark like-for-like? Thank you. We've been managing stock levels very tightly through spring-summer because, well, we just have to in this environment. I think we saw in the first half a higher markdown percentage than we would have seen in prior years, and I think you assume in the second half, we'll have something similar. We think it gives us an opportunity into next year, the high levels of markdowns we will have seen throughout this year. As to trading, I don't want to get into week-to-week commentary. We've got you up to date to the end of June, and we'll see how things go through July, August. The second question, what are we doing for autumn-winter? Come back if I haven't answered the question, but the product improvement will continue and broaden beyond womenswear, which I've been saying for a while, is where we started. Similarly, the focus on price perception will broaden beyond womenswear too. For example, we haven't done a Major Finds outside womenswear yet, and I think we will begin to see that sort of activity either combined with womenswear or taking its turn with womenswear. Relentless focus on price perception, relentless focus on value, and I think a relentless search for just fantastic product like the Performance ranges. Anything you want to add to that, Joana? No, as you said, Frederick, the focus into next spring will be improvement, and George mentioned it. It's unashamedly been womenswear. It will expand. Kids is massive for us, but we need to get that moving in the same way as we have womenswear. That's something to be expected going into spring/summer next year, and for that matter, autumn/winter 2027, as you said, men's likewise. The investment behind it, which I don't know if it was where your question was going to, will continue because the focus is on driving that like-for-like growth and continuing that improvement that we are definitely seeing now in the U.K. and we want to get moving into Europe. That's very clear and very helpful. Thank you so much. Thanks, Frederick. Thank you. Your next question today comes from the line of Richard Chamberlain from RBC. Please go ahead. Thanks. Morning, everybody. Couple from me on Primark, please. Just in the statement, you make reference to sharpening the focus on the key target customer base in Europe, ex-U.K., I just wonder what you mean by that comment. Second, in the U.S., wondered if you can just give a bit more color on trading performance by region, and maybe update as well, if that's okay, on number of openings for the rest of this year and next year, please. Thank you. Both in the U.K. and in Europe, we have some tremendously loyal customers that spend the bulk of their clothing purchases with us. We're refocusing down on them, what they need, what they expect of us. That I think is where some of our U.K. performance is coming from, re-engagement with our core customer base of loyalists. Across Europe, we've got the same characteristics. We've just got fewer of them. We think that what will inspire our loyalists in Europe is what will inspire, should be, could be loyalists in Europe as well. People who share many of the same characteristics with our loyalists who are nonetheless not yet shopping with us to anything like the same extent. They may already be coming into our shops. They're just not buying into the whole portfolio, the whole offer. U.S. trading has bounced around a bit. As I say, New York has got off to, or Manhattan's got off to an absolute flyer, and that's great. Elsewhere in the States where the brand is still much less well known, so we opened a store in Memphis and one in Nashville. They have been, quite frankly, disappointing, and we shouldn't be too surprised by that. We have a good customer franchise with particularly the Hispanic populations in the U.S., starting in New York, with Florida and Texas coming through. Those populations are really struggling. Their consumer expenditure is well down, and even where we are well known to them, their purchasing power is just really squeezed. That I think is driving some of the softness in like-for-like sales where we are known. Yes, some of the store openings are good where we're opening into brand knowledge. Where we're not, it's been not so strong. I can't remember. Do we have a number for new store openings? Yeah. Actually, Herald Square Manhattan that you just mentioned, George, is our 43rd store. We are hoping to have 47 by the end of this year, definitely a year of s trong store openings, and we are benefiting from that halo effect that the marketing in New York should be bringing. I think now got up to six stores around that region, which is very encouraging. We have seen an uplift in trading linked to the tax refunds in March and April. It is volatile, and it does not speak to what George just mentioned, which is our reaching into that population that is still quite impacted by the general economic context. Is that helpful, Richard? Yeah, that's very helpful. Thanks for the color. Thank you. Thank you. We will now go to the next question. The question comes from the line of Warwick Okines from BNP Paribas. Please go ahead. Thanks. Good morning, everyone. Two questions, please. The first is a bit of a multi-part one. I just wanted to pick up on your comments about markdown in Primark, George. You said that might be an opportunity for margin recovery in 2027. My question is, could you actually decide to put that into price reality rather than price perception? In other words, sort of swap markdown this year for lower prices next year. What other puts and takes are there, like raw- material pressure? Should we think of you having an ambition to improve operating margins in Primark next year? My second and I think shorter question, although it's probably a complicated answer, is how are you thinking about the prospects and possibilities for home delivery in your online channel? Thank you. Right. Look, this is a trading update rather than a kind of competitive or strategy session. To your first question, as we've been saying for a long time, the net margin is something that we arrive at after having traded well or badly throughout the year. We don't target it. We're comfortable with where it is at the moment. Historically, it's been significantly higher. Other than during COVID times, it's rarely been much lower. There are some tailwinds following winds next year. The markdown is an opportunity. Currency is a tail wind. Having said that, raw material costs are higher. Freight is under control, but you never quite know where that's going to go next. On what we're going to do with price, well, I'm not going to flag anything about price other than to say, we know what our key customer wants us to be, and we've delivered on those expectations in the first half much better than we have the previous few years. It shows that we've rediscovered who we are. Then I don't have any update on home delivery to share. I think we've said this on-- We'd love to have click and collect across Continental Europe. It's going to take longer because whereas in the U.K. we could repurpose the customer service desks, we never built them in the first place in Europe, and we'd need a supply chain solution in Continental Europe as well. As you know, we've been looking for better supply chain solutions for click and collect in the U.K. as well. That's very useful. Thanks, George. Okay. Thank you. Your next question today comes from the line of Adam Cochrane from Deutsche Bank. Please go ahead. Morning, guys. Thanks for the geography lesson on the sugar business. I think there's not much I can add to what you've already said, but I just wanted to clarify, when you're talking about the EBIT in 2026 coming in between GBP -25 million and GBP -60 million, you said that FY 2027 would be worse than the GBP -60 million. Is that GBP -60 million or worse in 2027 irrespective of what you do in 2026 within that range, it will be worse than GBP 60 million loss? Yeah, that's our central assumption. The biggest part of it is an assumption that whereas we were paying GBP 0.75 a therm for gas, next year we'll be paying GBP 1.05. Now, we just picked that number because it's what it is today. I think there's also a possibility, but it depends on where the African sugar profitability ends up this year. The flip side of this year's under or over performance will be in next year. That we don't know. At the moment, we don't know about the impact of El Niño, but we fear it. Although the pricing round in Europe has started with, and again, I have to be careful that I don't give away commercially sensitive information. We are really encouraged by that reduction in sugar output that we think is going to be a reality into next year and the year after. If I may just give the last one, which George already mentioned before, is the starting point on the GBP 60 million is also because even if the Malawian kwacha doesn't devalue this year, which would bring us, if it does not, then it would be closer to the GBP 25 million. The assumption is it will next year. You already got GBP 25 million in there. For that matter, the onerous contracts, which is the other big piece into the GBP 60 million, even if we don't materialize some of that, they will materialize next year. The onerous contracts are a shift between the two years. The two biggest pieces that take us from the GBP 25 million loss to the GBP 60 million loss are going to happen. It's just more a matter of timing. I would like to point out that those are not cash items into this year, both of those. Hopefully, that's helpful. Great. Then on Primark, two bits. You've talked increasingly about womenswear and the U.K. Would you be able to give an overview of the outperformance of womenswear versus the overall U.K. performance that you've seen? Then secondly, in terms of the geography, across Europe, you called out Spain briefly there. Are you seeing big divergences in the European performance between countries? Where you've taken some of these integrated marketing actions, et cetera, are you seeing a sales uplift on those actions that you're taking? Thanks. Yeah, good question. I'm not quite sure how much I'm allowed to give away on U.K. womenswear performance, but it is good. W e are at minus 0.5%. Plus one. minus 0.1. I think. Of the 16. Yeah. It's mid-single digit positives in the U.K. Yes, there is a divergence in performance across Europe. Iberia is better than France and Italy, which have been two difficult markets. Eastern Europe remains good. As I say, the Middle East isn't in the like-for-likes, but is really good. Northern Europe, we've seen this before when consumers get nervous, shopping grinds to a bit of a halt. Germany, Austria, Netherlands, soft. Yeah. I mean, womenswear is definitely very strong in the U.K. Actually, womenswear positive overall for the quarter for Primark. As George said before, unashamedly so. It is our core. With regards when you've done some actions in some of the European markets that you obviously haven't done in all of them, are you seeing a positive reaction to the actions that you're taking? Yes, we are. Yes, we are. Okay. As I said earlier, would I like to have seen it go further? Yeah. No, it's certainly having a positive impact. Great. Thank you. Thank you. Our next question today comes from the line of Georgina Johanan from JPMorgan. Please go ahead. Hi. Good morning. Thank you for taking my questions. I've got two questions, please. The first one was just if you could give any color in terms of the full -price sales mix at Primark in the quarter and how that's changed year-on-year, or perhaps the full- price level of like-for-like growth. I guess where I'm coming at it from is just thinking about, you mentioned the markdown opportunity for recovery into next year, George, but I'm just wondering actually if it's going to be quite difficult to get back into a positive like-for-like territory, given that there'll be a large proportion of markdown sales that you're comping against and just how we should be thinking about that and how you're thinking about that in your buying, please. My second question was just a very simple one. In terms of the current OpEx base at Primark, is it possible to just give us a high- level rule of thumb, I guess, in terms of what percentage is fixed and what percentage is variable with sales at the moment, please? Thank you. God, you're making us work hard. We don't track full- price sales. I've got no data set to share with you. The markdowns, yeah, are at 2% greater expenditure on it. Look, if your question is, are we only getting good sales performance because of markdowns? The answer is no. No. Most of the womenswear outperformance is not marked down. They were, sorry. They were good to make sure we managed the inventory levels, but they were at a much lower price. Yes, higher volumes, but lower price. The impact on the actual like-for-like is more marginal than the actual performance in some of the big categories, which is womens wear. Don't forget, we did a lot of markdowns on seasonal items, particularly in January, and those needed to go at the price that is right. OpEx versus. Shall I take that one? Yes, please. OpEx fixed versus variable. I think this is going to be an interesting part of going into the demerger where we'll be giving more details around the P&L. Of course, we have got staff in stores. Then we will have all the cost of running stores. We have not given the breakdown of those two. The majority of the costs are fixed as it would be in a retail business, hence the importance of getting that leverage with the like-for-like sales. Sorry, I'm not trying to avoid the question, Georgina, I think we will be coming back to it in the next few months. No, thank you. That's really helpful. I look forward to that extra detail. Maybe just in terms of thinking about the buying for next year, in terms of buying for positive like-for-like next year, should that be our assumption? Yes. Thank you very much. Thank you. Sorry, Georgina, just a little bit of color on that. I think we've got to be more cautious around heavyweight outerwear. The autumn-winter season seems to be starting later and later, and it's a bit of a mug's game to be providing people with coats 70% off in January. Thank you. Our next question today comes from the line of Sreedhar Mahamkali from UBS. Please go ahead. Hi, good morning, George and Joana. Thank you for taking my questions. Hi, Sreedhar. A couple of questions a t least. I think you referred to Iberia, and Iberia clearly has been a strong market for you for a long while. Do you put that down to the market or something Primark is doing there that's different to what you're doing in France and Italy? Sorry, which part? Iberia. Iberia. Yeah, exactly. I think then on France, you have in the past flagged some strong competitors in the value segment. Is that still? Yeah A main driver of your challenge in the market? That's the first question. Secondly, on Primark margin, I think, George, you referred to markdown opportunity. I think this year we're down 160 or 170 basis points, much of which we are assuming to be markdowns as you've signaled in the past. You were previously also signaling that headroom was to be used for driving like-for-like growth when you head into next year, rather than seeing it as a margin recovery opportunity. Is that not necessarily the same case anymore? Really the only differences in the competitor set, Spain versus France, are that in Spain, we've had Lefties to compete with for quite a long time. In France, we've got more Action stores, but they are just in little bits of the clothing sector, and then more Kiabi. Yes. It's Kiabi who I think have upped their game really significantly in the last few years. I think we understand Kiabi and their capabilities much better than we did previously. Those, I think, are the differences. I think the Spanish consumer is in a better place than the French consumer. I suspect that that's the biggest driver of the differential performances across those two markets. Markdowns. Look, I'm just reluctant to flag too much about how we are going to trade next year. Yes, you have seen a greater emphasis on price perception and demand creation, and price investment this year on top of the markdowns. You're going to see a lot more of the same next year. Sreedhar, on the markdowns, I think that we talked about this a little bit before. Yes, there's that tailwind going into next year, George mentioned it, the same as we got FX. The principle still remains that we will continue to invest to drive that top-line growth. The different initiatives that we continue to do, which George just mentioned, will continue. We have that as one of the levers that we can use to support that investment as well. Thank you. Thank you. Your next question today comes from the line of Matt Clements from Barclays. Please go ahead. Hi. Good morning, George and Joana. Hope you can hear me. Yes On the U.S., if that's okay, brand awareness has been a long-standing issue. How certain are you that new space is the answer? Are you thinking about changes to your location strategy at all, or are there less capital-intense levers you can use in the U.S. to raise brand awareness, maybe targeted marketing, or even if it's new space, maybe franchising? The great thing about marketing in the U.S. is that you can target it really to individuals. It's amazing how much targetable detail is available on the bulk of consumers in the U.S. We use that reality across the U.S. grocery businesses. We use it in Primark, too. Advertising or marketing can be very efficient in the U.S. We invested heavily in brand awareness around the opening of the Manhattan store, and I think that's been absolutely the right thing to do because we have a strong cluster of stores within range of people who are now walking through Penn Station past our store. They can get to our stores in many of the other suburbs of New York. I think some of the learnings are from store openings in good locations, but locations where there's no reason for us to be known, I think we are going to pull back on that to some extent in the future. We're also having a good, hard look at the offer. In places, it's really attractive for our core customer. In other places, we're very much a kind of "me-too" player. I think we can sharpen the offer up, too. Franchising in the U.S., no, thanks. Okay. Thank you very much. Thanks, Matt. Thank you. Your next question today comes from the line of Darren Shirley from Shore Capital. Please go ahead. Yeah, morning, all. Morning, Darren. Couple of questions on the food side, if you don't mind. Yeah. First of all, on the grocery, you're talking positively about sort of momentum across a number of brands, but U.S. oils, which has been a headwind for some time now around margin and looks more like sales at the moment, how is that trending, that sort of headwind from U.S. oils? How are we looking- Yeah how would you anticipate entering 2027? Yeah. Is this going to be something that's hanging around for a while? Yep. Yeah. Okay. We are a bit miserable about retail oil sales in the U.S., I think there are two or three things in play. The first one is that our predominant consumer, again, is, and our heavy- use consumer, is that Hispanic population in the Smile States who are under financial pressure, who are under pressure from ICE and are feeling a bit miserable. If you are not entertaining with food, then you tend to reuse oil one more time. Typically, that population would be using oil maybe three times before they throw it out. We think it has gone to four in many cases. We don't think that that's going to change into 2027. We think also that we've got a very good joint venture in Stratas which supplies a lot of food service oil. We are undoubtedly seeing the consequences of GLP-1s on food service demand, particularly for fried food. Again, oils, lovely businesses, very strongly branded in the Mazola case, but with significant headwinds. As you pointed out, Darren, there are some of the other brands in the Grocery- Yeah The segment that are doing well, and where we're seeing some of the headwinds from GLP-1, we're also seeing tailwinds within that segment, which is the beauty of having so many different businesses. Twinings we've highlighted. George, you talked about Fleischmann's. I talked about it at the half year. The home baking trend continues. There is a good volume and value sales increase in home baking. The reality though is that the oils business is very big. Negative like-for-like sales, volume sales in that sector flow through to the bottom line in quite a big way. I sense from what you're saying, this isn't an issue that you're going to annualize and then stabilize. It's likely to be a feature for some time, a headwind for some time. Am I reading that correctly? Yeah. We haven't seen a slowdown in the market decline in oils yet. Okay. In the old days, you'd have said oil volumes kind of tracked population and population growth, and now we're running at or have been running this year at mid-single digit volume declines in the category. Okay. On a more positive tack, when's on the Hovis, getting that through? I've been looking at that potential merger with someone for 25 years. Yeah. How do you see the timeline of that? I understand you haven't got hold of it yet. Yeah What do you think the length of the integration process will be? When do you think you'll get that very positive inflection point from a process perspective? Yeah 12 to 18 months then? We've done a lot of planning around the integration process. A year, inside a year. Okay. Well, we haven't been inside a Hovis bakery, so we're not quite sure what we're getting. I have to just leave a little bit of uncertainty about that integration program because there may be things that take us more time. There could be some that we can go quicker with, but we have a target date for when we can process one order for all the business and put it on one truck. That's in the first half of next year. Okay. We're hoping to give you some more detail. Sorry. Yeah. We didn't really want to divert too much attention today onto a business we haven't bought yet. We will share more if and when we complete. Okay. Understood. I won't push you for anymore. I'll wait for the results. Thank you. Thanks, Darren. Thank you. We will now take our final question for today. The final question comes from the line of Anubhav Malhotra from Panmure Liberum. Please go ahead. Hi, team. Thanks for taking my question as well. Just two from me. The pound has weakened a lot recently, and given the ongoing changes in the U.K. politics, there's risk of further deterioration. Maybe if you could give us where you stand currently on FX hedging for Primark into next year and at what sort of rate have you hedged compared to this year. Then secondly, on the click and collect performance in the U.K., it's been more than a year since you extended the rollout to all U.K. stores. Are you happy with the performance of the stores that you did in the second wave of completing the rollout, and has that performance been tracking in line with what you had been seeing in the testing phase? Thank you. Yeah. Let me answer the second one and then give Joana the first. click and collect is going well, and we measure it in a number of ways. Through the sales through that channel, sales which we believe are new sales or new customers through that channel, and then attachment rate, size of basket, which drives economics. Against all those measures, click and collect is outperforming our business case. It's still growing. When did the final store get it? May. May. Yes. it's growing quickly. We're really pleased with it. Pound levels. You are right to talk about our hedging strategy because we are already hedging for next year. As we sit here, I don't think we tends to give you our average hedging rate, but we still see FX as a favorable effect for next year. We'll see what happens to the pound with all the uncertainty and turmoil on U.K. politics, but we still see that as we stand here with the level of hedging as a positive. Thank you. That's helpful. Thank you. That was our final question for today. George, would you like to say any final words? Thank you. Just very briefly, we do think that momentum is building in Primark with lots left to do. Important new leaders are coming into the business over the next few months that will accelerate both the commercial progress that's already started. It'll also reinforce the capability to undertake the demerger work, which is a lot of work. The demerger work so far is not distracting us from the day job at Primark. That's quite important, but it is a busy period. What else? Sugar, we think we've got another difficult year coming our way, but there's just a lot of uncertainty around the cost base. I take quite a lot of comfort from these commission production estimates that we've seen recently. They bode well for the future. Anything else, a big one that I've left out? No, I think we have started doing this Q3 trading update again. Yeah. Hopefully, it's not a teaching, but the more in-depth level of granularity around sugar particularly, but which will extend to the other businesses, is something that is beneficial. Certainly, as we go into the demerger- I think those of us who continue to cover food after the demerger, this trading update is going to be a really important one for sugar. Okay, thank you. Thank you all for joining this call. See you in a few months' time. Have a good summer. Have a good summer. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.