Arla reports a strong 2014
Arla achieved one of its best results ever in 2014 despite the volatile market. A strong first half of the year produced record-high earnings, but the global market shifted in the second half, reducing the farmer milk price significantly.
For 2014 as a whole, the performance price, which indicates the value Arla has generated from each kilogram of milk supplied by the owners, was €0.417 per kilo with a total volume of owner milk of 11.7 billion kilos in 2014 (compared to €0.41 per kilo with a total volume of owner milk of 9.5 billion kilos in 2013).
Arla’s profit in 2014 reached €0.3 billion, which corresponds to the set target of three per cent of the total revenue. The company’s board of representatives will decide how to appropriate profits in a meeting on 25-26 February.
“In a rollercoaster year for the global dairy industry, Arla’s strong brands and focus on efficiency and cost control enabled us to make the most of the upturn and to be competitive through the downturn. The record-high performance price of €0.417 in 2014 confirms this. However it does not fully reflect the fact that the year ended with much lower milk prices than it began. Market conditions and the Russian embargo are making the financial situation difficult for our owners, but we have worked hard to minimise the effects by sticking to our strategy of creating growth outside Europe and strengthening our business across our European core markets,” says CEO of Arla Foods, Peder Tuborgh.
Arla posted its highest-ever revenue of €10.6 billion, with much of it attributable to organic growth of 6.7%. Given the market situation, the strategic global brands – Arla, Lurpak and Castello – produced satisfactory results in 2014 with a total volume growth of 2.1%.
While Arla continues to move more milk into branded products, the company is also working hard to move those branded products into new markets. Arla’s international operations and ingredients business had yet another strong year with growing opportunities.
Although Denmark continues to be the country that supplies the most milk to Arla, the UK remains Arla’s biggest market by revenue followed by Sweden and Germany.
