MENA Consumer Marketing Presentation

Research evidence excerpt

MENA Consumer Marketing Presentation

M O R G A N S T A N L E Y R E S E A R C H

Executive Summary MENA Consumer Marketing PresentationJuly 2026

We still see idiosyncratic opportunities at play, with Savola and Almarai high conviction Overweights

• Strong demographics and an affluent population driving a c.5.5% top-line CAGR over 2025-28e

Long-term growth vs • Growth expected to be c.150-200bps ahead of our European Staples coverage

near-term caution • Near-term, however, we expect consumption headwinds to persist

• Caution led by a widening array of spending priorities. driving an increasingly price sensitive consumer

• Exacerbated further by elevated geopolitical risks driving supply chain disruption, cost headwinds and potentially

broader consumption impacts over time

• Our EPS forecasts are below consensus for 2027 across most of our coverage as a result

• Amid a more muted consumption environment, we prefer resilient and defensive sub-sectors, with a focus on pricing

power and idiosyncratic transformation stories

Sub-sector preferences

• F&B and grocery retail screen most defensive in this environment

• While we see retail pharmacies as long-term structural winners, limited pricing power near-term means we likely face

a cycle of EPS downgrades over the coming quarters

• Discretionary retail our least preferred sub-sector, although could still benefit near-term from macro disruption

• Despite a relative re-rating since the conflict, at ~16.5x NTM P/E, Saudi Consumer remains ~10% below y/y levels,

Limited scope for sector offering a reasonable entry point

re-rating near-term • Macro uncertainty and fundamental indicators, however, point to limited scope for broad re-rating near-term

• We see idiosyncratic stock calls as key to outperformance, as a result