The dairy cooperative reported revenues of €13.8 billion for the year, with a net profit of €401 million. Performance price increased to 50.9 EUR-cent/kg, leading Arla to propose a supplementary payment of 2.2 EUR-cent/kg milk delivered – the highest dividends paid to the farmer owners in the company’s history.
Branded products were a key driver of sales, with the likes of Arla, Lurpak, Puck, Starbucks and Castello achieving volume-driven revenue growth of 3.7% – compared to a decrease of -0.7% in 2023.
Commenting on the results, CEO Peder Tuborgh said: “I am delighted that Arla Foods is performing well, and we see a high demand for dairy and our products in particular across the globe. The highest ever supplementary payment, along with a competitive milk price, reflects Arla’s financial strength.”
UK branded growth
UK Branded revenue increased by €103 million (£89 million) with total branded growth at +7.6%. UK revenues saw a slight decrease (down 2.9% year-on-year), which Arla blamed on changes in the ‘external landscape’ such as lower prices and overall milk volume declines, plus adjustments to private label volumes.
Bas Padberg, managing director of Arla Foods UK, added: “2024 was clearly a year of strong branded growth, which really highlights the power of the portfolio and product mix we have, as shoppers look for quality, nutritious and tasty products.
“As a cooperative, everything we do is to drive the best possible returns for our owners, so through strong collaboration and the support of the farmers, our customers and the whole business, means we can give back to our farmers for the hard work they do in producing our food and investing for the future of the dairy industry.”
Despite expectation of geopolitical turbulence to persist into 2025, Arla anticipated consumer purchasing power to remain stable, following improvements in 2024 due to lower inflation and higher wages. However, dairy demand is expected to be influenced by consumer reactions to elevated dairy prices.
2025 outlook
Arla projected its 2025 revenue to range between €14.5-15.3 billion (5.07%-10.86% increase), driven by the high dairy price level, with profit share within the target of 2.8% to 3.2%.
Branded volume-driven revenue growth was projected to drop between 2-1% due to continued consumer uncertainty, subject to the balance of supply and demand dynamic throughout the year.
“Our commitment to resilience and adaptability remains unwavering,” Tuborgh concluded. “By harnessing the strength of our cooperative model and focusing on sustainable practices, we are well-positioned to navigate the uncertainties ahead and continue delivering value to our farmer owners and customers.”
Meanwhile, last month saw Arla Foods discontinue plant-based milk alternative brand Jörd in the UK. The Dairy co-operative has not stated the exact reason as to why it has discontinued the range.
Arla results at a glance:
- Group revenue: €13.8 billion (2023: €13.7)
- Performance price: 50.9 eurocent/kg (2023: 47.0)
- Milk volume: 13.7 billion kg (2023: 13.9)
- Net profit share of revenue: 2.9% (2023: 2.8%)
- Proposed supplementary payment: 2.2 EUR-cent/kg of milk delivered (2023: 2.1 EUR-cent/kg of milk delivered)
- Net efficiencies: €131 million (2023: 114)
- Leverage: 3.2 (2023: 2.6)
- Overall strategic branded volume driven revenue growth: 3.7% - Includes Lurpak, Arla, Puck, Castello, Starbucks (2023: -0.7%)
