Arla Foods Half-Year Report 2023

Revenue growth driven by prices

In the first half of 2023, revenue increased by 10.7 per cent to EUR 7,067 million compared to EUR 6,382 million
in the same period last year, primarily driven by earlier implemented price increases. Prices contributed positively to the revenue increase by EUR 700 million and volume and product mix hanges contributed by EUR 133 million, while unfavourable currency developments impacted revenue negatively by EUR 148 million. The SEK weakened by 7.5 per cent and the GBP by 3.9 per cent.

Net profit below full-year outlook

In the first half of 2023, Arla achieved a net profit of EUR 103 million, or 1.5 per cent of revenue compared to 3.0
per cent in the same period last year. WLower global commodity prices and increased sales volumes in our commodity business put pressure on our profitability in the first half of 2023.

However, due to an unwavering focus in all markets on the extraordinary dynamics and Arla’s general efficiency and robustness, we were able to soften the negative impact of the market dynamics and pay a competitive milk price in the first half-year and deliver a half-year supplementary payment to our owners of 1 EUR-cent per kilo milk as planned.

Branded volumes declining, but market shares maintained Branded revenue grew by 6.9 per cent, driven by Lurpak® at 7.2 per cent and the Arla® brand at 3.6 per cent. As anticipated, our total strategic branded volume growth decreased by 6.01 per cent in the first half of 2023 compared to a decrease of 0.1 per cent in the first half of 2022. This was primarily due to decreasing volumes in Europe of 5.7 per cent and in International of 4.0 per cent, following the general market trend, as well as an increase in volumes sold by trading of 33.1 per cent.

In retail, branded volumes declined by 6.9 per cent, but a few brands maintained solid volume growth in the volatile market.

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