Arla Foods Full-Year Report 2023

After a challenging first half of 2023, Arla Foods recovered fast delivering strong growth rates for all markets and brands in the second half. For the full year, the company’s efficiency programme exceeded the ambitions and Arla’s leverage was improved.

Total Arla Group revenue ended at EUR 13.7 billion, roughly the same level as its 2022 revenue of EUR 13.8 billion. The revenue was impacted by negative currency effects, primarily on SEK, GBP and USD. The cost of goods and general inflation led to a performance price decrease of 8.1 EUR-cent/kg to 47.0 EUR-cent/kg against the all-time high performance price in 2022. Although lower than 2022, the 2023 result is 15% above the last 5-year average.

In 2023, Arla achieved a net profit of EUR 380 million, or 2.8% of revenue, which is at the bottom end of its target range of 2.8-3.2%. The solid financial performance and robustness allowed the Arla Board of Directors to propose a supplementary payment, including interest on contributed capital, to farmers of 2.07 EUR-cent per kg of milk delivered equaling 270 MEUR in total, well-above the level set in Arla’s Retainment Policy.

The high inflation and cost of living in 2022 continued into the beginning of 2023, resulting in consumers in especially Europe trading down to discounters, cheaper products and in general buying less dairy products, resulting in a flat development in retail dairy consumption across the region.