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Arla CFO: single biggest organic revenue increase inside one year

27 Feb 2018

Arla group revenue increased by 8.1% to €10.3 billion for 2017, driven by higher sales prices, increased branded share of sales, and a better geographical and product mix. Arla Foods Ingredients saw a 19.6% growth in revenues.

A strong performance by Arla Foods’ global brands, international markets, and Ingredients business ensured a year of high growth for the dairy cooperative in 2017, as it delivered a 27.4% increase in pre-paid milk price to its farmer owners, and a net profit of 2.8% of revenue within its target range. This was achieved in what the company said was another volatile year in the global dairy market characterised by significant shifts in market prices, which supported an increase in sales prices of €1 billion.

Group revenue increased by 8.1% to €10.3 billion driven by higher sales prices, increased branded share of sales, and a better geographical and product mix. Arla Foods Ingredients saw a 19.6% growth in revenues.

“In 2017, we delivered a strong performance built on the good balance of brands, categories, and geographies that we have in our business to drive growth,” said Arla Foods’ CEO Peder Tuborgh. “Most importantly, this enabled us to pay out significantly higher milk prices to our farmer owners and utilize our balance sheet to enable the substantial capital investments we are making in 2018.”

“This is the single biggest organic revenue increase inside one year in company history when you don’t count mergers,” said Arla Foods’ CFO Natalie Knight. “It was driven by our continued drive into international markets as well as our focus on growing and developing our strategic brands on all markets.”

For Arla Foods Ingredients, a 100% owned subsidiary of Arla Group, 2017 was another strong year, showing significant top and bottom line growth driven by innovation in its specialty protein range. Arla Foods Ingredients supports a wide range of categories from bakery, beverages, dairy, and ice cream to clinical, infant and sports nutrition. Sold in more than 90 countries, revenue grew 19.6% to €651 million driven by the sale of higher volumes in Arla Infant Milk Formula Business to Business as well as strong price and volume growth in the value-added protein segment.

“We welcome an even more consumer-driven dairy market, where inclusiveness with the whole value chain and holistic responsibility will be more important than ever. As a farmer-owned dairy company we must meet these demands by being transparent and using the tools we have in our quality assurance programme Arlagården, to bring consumers and customers closer to Arla,” said Tuborgh.