Financial Statements

Independent Auditor’s Report to the Shareholders of Almarai Company

To the Shareholders of Almarai Company (A Saudi Joint Stock Company)

Opinion

We have audited the consolidated financial statements of Almarai Company (“the Company”) (and its subsidiaries) (“the Group”), which comprise the consolidated statement of financial position as at 31 December 2025, the consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, comprising material accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards) that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (SOCPA).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing that are endorsed in the Kingdom of Saudi Arabia. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards), that is endorsed in the Kingdom of Saudi Arabia that are relevant to our audit of the consolidated financial statements, and we have fulfilled our other ethical responsibilities in accordance with the Code’s requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Carrying Value of Intangible Asset - Goodwill

Refer to Note 5.10 for the accounting policy relating to goodwill and Note 10.2 for the related disclosures in the accompanying consolidated financial statements.

The key audit matter	How the matter was addressed in our audit
As at 31 December 2025, the carrying amount of goodwill amounted to X 1,256 million (2024: X 927 million). The goodwill balance comprises the following components: (i) Goodwill arising from prior year acquisitions, amounting to X 928 million, relating to the acquisitions of: Western Bakeries Limited, Hail Agricultural Development Company, International Dairy and Juice Limited, and Bakemart. (ii) Goodwill arising from the acquisition of Pure Beverages Industry Company Limited during the year recognised based on provisional amounts, amounting to X 328 million. The management performed the annual goodwill impairment assessment as at 31 December 2025 for goodwill arising from prior year acquisitions by allocating the goodwill to the respective cash-generating units (“CGUs”) and comparing the carrying amount of each CGU, including allocated goodwill, with its recoverable amount. The recoverable amount of each identified CGU was determined based on Value-In-Use (“VIU”) calculations. These calculations employ a discounted cashflow (“DCF”) model, by using cashflow projections based on financial budgets approved by the management covering a five-year period. The Group’s VIU calculations for the CGUs includes significant judgement and assumptions relating to cashflow projections, and the discount rates, and is highly sensitive to the changes in these assumptions. We considered impairment of goodwill arising from prior year acquisitions as a key audit matter, as the estimation of future cash flows and the assumptions involved in calculating the discounted value of these cash flows involve judgement that impacts the determination of recoverable amount and consequently impacts the impairment assessment of goodwill.	We performed the following audit procedures in relation to the management’s assessment of impairment of goodwill arising from prior period acquisitions: Assessed the design and implementation, and tested the effectiveness of the Group’s controls relating to the goodwill impairment assessment process; Assessed the appropriateness of the Group's goodwill impairment assessment model against the requirements of the reporting framework; Involved our specialists for assessing the reasonableness of the VIU calculations and the underlying assumptions, including cash flow projections and discount rates used; Tested the accuracy and relevance of the input data used in the model by reference to supporting evidence, including approved budgets, and considered the reasonableness of these budgets by comparing the Group’s historical results and performance against budgets; Performed sensitivity analysis over the key assumptions, principally sales growth rates and discount rates, to assess whether any adverse reasonably possible changes, to the key assumptions, would not cause the carrying amount of goodwill to exceed the recoverable amount; and Assessed the adequacy of the disclosures in the consolidated financial statements, including disclosures of key assumptions, judgements and sensitivities.

The key audit matter

How the matter was addressed in our audit

As at 31 December 2025, the carrying amount of goodwill amounted to X 1,256 million (2024: X 927 million). The goodwill balance comprises the following components:

(i) Goodwill arising from prior year acquisitions, amounting to X 928 million, relating to the acquisitions of:

Western Bakeries Limited,
Hail Agricultural Development Company,
International Dairy and Juice Limited, and
Bakemart.

(ii) Goodwill arising from the acquisition of Pure Beverages Industry Company Limited during the year recognised based on provisional amounts, amounting to X 328 million.

The management performed the annual goodwill impairment assessment as at 31 December 2025 for goodwill arising from prior year acquisitions by allocating the goodwill to the respective cash-generating units (“CGUs”) and comparing the carrying amount of each CGU, including allocated goodwill, with its recoverable amount.

The recoverable amount of each identified CGU was determined based on Value-In-Use (“VIU”) calculations. These calculations employ a discounted cashflow (“DCF”) model, by using cashflow projections based on financial budgets approved by the management covering a five-year period. The Group’s VIU calculations for the CGUs includes significant judgement and assumptions relating to cashflow projections, and the discount rates, and is highly sensitive to the changes in these assumptions.

We considered impairment of goodwill arising from prior year acquisitions as a key audit matter, as the estimation of future cash flows and the assumptions involved in calculating the discounted value of these cash flows involve judgement that impacts the determination of recoverable amount and consequently impacts the impairment assessment of goodwill.

We performed the following audit procedures in relation to the management’s assessment of impairment of goodwill arising from prior period acquisitions:

Assessed the design and implementation, and tested the effectiveness of the Group’s controls relating to the goodwill impairment assessment process;
Assessed the appropriateness of the Group's goodwill impairment assessment model against the requirements of the reporting framework;
Involved our specialists for assessing the reasonableness of the VIU calculations and the underlying assumptions, including cash flow projections and discount rates used;
Tested the accuracy and relevance of the input data used in the model by reference to supporting evidence, including approved budgets, and considered the reasonableness of these budgets by comparing the Group’s historical results and performance against budgets;
Performed sensitivity analysis over the key assumptions, principally sales growth rates and discount rates, to assess whether any adverse reasonably possible changes, to the key assumptions, would not cause the carrying amount of goodwill to exceed the recoverable amount; and
Assessed the adequacy of the disclosures in the consolidated financial statements, including disclosures of key assumptions, judgements and sensitivities.

Acquisition Accounting of Pure Beverages Industry Company Limited

Refer to Note 5.16 for the accounting policy relating to business combination and Note 13 for the related disclosures in the accompanying consolidated financial statements.

The key audit matter	How the matter was addressed in our audit
On 31 July 2025, the Group acquired 100% of the issued share capital of Pure Beverages Industry Company Limited for a total cash consideration of X 1,012 million. The Group has provisionally accounted for the transaction as of the reporting date. As part of the purchase price allocation, X 528 million was provisionally attributed to the recognition of fair value of net assets acquired, X 156 million was attributed to the recognition of customer relationships and brands, with a useful life of 10 years, with the remaining X 328 million recognised as provisional goodwill. The accounting for this transaction is complex due to the significant judgements and estimates that are required in the identification and measurement of the fair value of the assets acquired and liabilities assumed. Management engaged external valuation specialists to assist with these judgement and estimates. In particular, the valuation of the customer relationships and brand intangible assets involved a high degree of judgement, complexity, and estimation uncertainty, given the significance of the transaction, and was therefore considered a key audit matter.	We performed the following audit procedures in relation to the management’s accounting of this acquisition: Obtained and analysed the corresponding underlying documents including share purchase agreement to corroborate the overall deal structure and transaction price, and agreed the value of the total consideration to supporting documentation; Understood the business of the investee and other factors relevant for the control assessment such as terms of the sale and purchase agreements, condition precedents, purpose and design of investee, relevant activities that significantly affect the investee’s returns, and the decision-making process of the investee; We obtained the control assessment document prepared by management for the acquisition and evaluated management’s conclusion against the criteria set out in IFRS 10; We obtained the acquisition accounting/ provisional purchase price allocation document prepared by the management Assessed the competence, capability, and objectivity of management’s experts engaged in the acquisition accounting; Involved our valuation specialist to assess the appropriateness of the valuation methods and the reasonableness of the key assumptions applied in measuring the customer relationships and brand-related intangible assets acquired, including independently developing an appropriate discount rate, assessing the completeness of identified intangible assets, and evaluating the reasonableness of the useful economic lives; Tested the completeness and accuracy of the data inputs used in the underlying models for determining the fair value of customer relationship and brands intangible assets; Evaluated management’s assessment of whether any impairment indicators exist , including consideration of financial performance, strategic plans, and observable market or business changes that could indicate impairment; and Assessed the adequacy of disclosures included in the financial statements.

The key audit matter

How the matter was addressed in our audit

On 31 July 2025, the Group acquired 100% of the issued share capital of Pure Beverages Industry Company Limited for a total cash consideration of X 1,012 million.

The Group has provisionally accounted for the transaction as of the reporting date.

As part of the purchase price allocation, X 528 million was provisionally attributed to the recognition of fair value of net assets acquired, X 156 million was attributed to the recognition of customer relationships and brands, with a useful life of 10 years, with the remaining X 328 million recognised as provisional goodwill.

The accounting for this transaction is complex due to the significant judgements and estimates that are required in the identification and measurement of the fair value of the assets acquired and liabilities assumed.

Management engaged external valuation specialists to assist with these judgement and estimates. In particular, the valuation of the customer relationships and brand intangible assets involved a high degree of judgement, complexity, and estimation uncertainty, given the significance of the transaction, and was therefore considered a key audit matter.

We performed the following audit procedures in relation to the management’s accounting of this acquisition:

Obtained and analysed the corresponding underlying documents including share purchase agreement to corroborate the overall deal structure and transaction price, and agreed the value of the total consideration to supporting documentation;
Understood the business of the investee and other factors relevant for the control assessment such as terms of the sale and purchase agreements, condition precedents, purpose and design of investee, relevant activities that significantly affect the investee’s returns, and the decision-making process of the investee;
We obtained the control assessment document prepared by management for the acquisition and evaluated management’s conclusion against the criteria set out in IFRS 10;
We obtained the acquisition accounting/ provisional purchase price allocation document prepared by the management
Assessed the competence, capability, and objectivity of management’s experts engaged in the acquisition accounting;
Involved our valuation specialist to assess the appropriateness of the valuation methods and the reasonableness of the key assumptions applied in measuring the customer relationships and brand-related intangible assets acquired, including independently developing an appropriate discount rate, assessing the completeness of identified intangible assets, and evaluating the reasonableness of the useful economic lives;
Tested the completeness and accuracy of the data inputs used in the underlying models for determining the fair value of customer relationship and brands intangible assets;
Evaluated management’s assessment of whether any impairment indicators exist , including consideration of financial performance, strategic plans, and observable market or business changes that could indicate impairment; and
Assessed the adequacy of disclosures included in the financial statements.

Other Information

Management is responsible for the other information. The other information comprises the information included in the annual report but does not include the consolidated financial statements and our auditor’s report thereon. The annual report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the annual report, when made available to us, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by SOCPA, the applicable requirements of the Regulations for Companies and Company’s By-laws and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, the Board of directors, are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. ‘Reasonable assurance’ is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing that are endorsed in the Kingdom of Saudi Arabia, will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with International Standards on Auditing that are endorsed in the Kingdom of Saudi Arabia, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, then we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming express an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit of Almarai Company (“the Company”) (and its subsidiaries) (“the Group”).

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

KPMG Professional Services Company

Fahad Mubark Aldossari

License No.: 469

Riyadh on 19 January 2026G

Corresponding to: 30 Rajab 1447H

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