Associated British Foods Plc–Risk Profile
- As per GlobalData's proprietary risk methodology, ABF’s overall risk score is 3.38, signifying medium risk
- Financial and operational risk pillars have boosted the overall risk profile of the company
- Exposure to developing and under developed countries have impacted the country risk profile
Associated British Foods Plc has a strong risk profile and is one of the top twenty-five companies based on our proprietary risk assessment of the food sector in the consumer industry. Financial and operational risk pillars boosted the overall risk score for Associated British Foods Plc. Supply chain management, strong operational capabilities, and wide geographic presence are the company's major strengths, whereas liquidity remains a concern for the company.
About the Company
Associated British Foods Plc (ABF) is a diversified food processing and retail group. The company's major businesses include sugar, ingredients, grocery, agriculture, and retail. It also offers hot beverages, sugar and sweeteners, vegetable oils, bread and baked goods, cereals, herbs and spices, ethnic foods, and meat products. ABF also processes sugar beet and sugarcane for sale to industrial users. The group manufactures animal feeds and other related products and services for the agriculture sector, bakers' yeast, bakery ingredients, enzymes, lipids, yeast extracts, and cereal specialties.
ABF is one of the leaders in the food industry, with a market cap of $20.46 billion. It reported revenue of $17.8 billion in financial year (FY) 2021, which increased 0.11% over that in FY2020. The company's net income also increased 12.67% in FY2021 compared to that in FY2020.
Risk Pillars
Our proprietary risk assessment uses a combination of four risk pillars – Country, Industry, Operational, and Financial. Scores are based on a scale of 1 to 5, 1 being the lowest risk and 5 being the highest.
ABF has an average risk profile in the food sector, while companies like Dali Foods Group Co Ltd, Calbee Inc, and Foshan Haitian Flavoring Food Co., Ltd. lead the sector. The company's operational and financial risk pillars fare better than the other risk pillars.
Country Risk: ABF has a presence in diverse territories, with most of its revenue derived from the UK (36.32%). This is followed by Europe and Africa (36.28%), Asia-Pacific (15.77%), and the Americas (11.63%). Diverse operations insulate the company from the risk of operating in a single country. The company has a country risk score of 3.42.
Industry Risk: The company's primary exposure is to the food sector. It generates 47.61% of the revenue from the food sector, which is characterized by low-profit margins and weak growth projections compared to other sectors.
Operational Risk: Our operational risk score is based on four pillars – business positioning, scale, operational efficiency, and profitability. The operational score of ABF is supported by favorable business positioning and scale of operations. However, the high cost of goods sold and lower EBIT margins have affected the operational efficiency and profitability of the company.
Financial Risk: Associated British Foods Plc's cash flow, interest coverage, and leverage ratios strengthened the overall financial score. High inventory days affected the liquidity ratio. The company's low debt-to-equity ratio compared to that of its peers boosted its leverage ratio.
About our Methodology:
GlobalData risk scorecard for a sector provides the analysis of various risks a company is vulnerable to. Our risk framework comprises four pillars – country, industry, operational and financial. The country risk for an entity signifies the risk of operating in a particular country. GlobalData's proprietary country risk assessment framework is used to calculate the risk for individual countries. Industry risk is an integral part of risk analysis, and it implies the riskiness and stability of the industries in which a company operates. The operational and financial risk profile comprises a company's risk and return potential based on its key operational and financial metrics. The operational and financial risk profile comprises a company's risk and returns potential based on its critical operational and financial metrics. Our scores are based on an average of the latest three fiscal year data.
Related Data & Insights
Related Companies
Switzerland
United States of America
Netherlands
United States of America
China
United Kingdom
United States of America
United States of America
United States of America
United States of America
Still looking?
Don’t wait - discover a universe of connected data & insights with your next search. Browse over 28M data points across 22 industries.
Explorer
Access more premium companies when you subscribe to Explorer