News Half-year figures
Corona crisis can't get a grip on Arla's profit
Despite the corona crisis, Arla has been able to increase global sales volumes. Over the first half of the year, both the turnover and profit of the Scandinavian milk processor have increased.
The corona crisis is not making an extreme impact on Arla's result, as can be seen in the result of FrieslandCampina† Over the first half year, Arla's global sales volumes grew approximately 10,4%. Total revenue increased by 2,8% to €5,4 billion. The net profit share amounted to 3% of the turnover achieved, which is 0,7% higher than last year.
According to Arla, rapid action and the good geographical position of the company have resulted in growth. With this, the company says it has successfully continued its activities despite logistical challenges.
Different zones
Arla divides its activities into 2 commercial zones, a European and an international zone. Both zones have been hit hard by the corona pandemic and the resulting logistical challenges. Despite this, both zones managed to achieve strong financial results. Although less volume was sold to foodservice channels, sales to the retail trade compensated for this with a significant increase.
The turnover from the European zone grew by 0,9% to €3,178 million. The international zone even achieved the highest turnover growth of the past 5 years. Turnover increased by 22,1% to €1,024 million. Sales to the Middle East and North Africa are the main driver behind this growth.
Robust and agile
Peder Tuborgh, CEO of Arla, says he is proud of the results achieved. “The coronavirus crisis is one of the most severe crises I have experienced as CEO. We, like other food companies, saw a very rapid change in the eating habits of consumers worldwide. We have the milk that normally goes to foodservice channels, to retail At the same time, our Foodservice company came up with creative solutions to support customers. This shows how robust and agile our cooperative is."
The dairy cooperative also managed to save more costs than previously expected with its Calcium efficiency program. Cost savings of €69 million were mainly driven by efficiencies in indirect spending and optimization of the supply chain operations.
Expectation second half year
“Thanks to our position, both geographically and across all categories, we have delivered strong financial results, increased our profitability and realized continued savings through Calcium. However, the situation remains very volatile and we must remain vigilant to ensure our business continuity,” adds CFO Torben Dahl Nyholm added.
Despite the uncertain future, Arla still expects to meet its original financial guidance for the full year. This concerns a turnover forecast of €10,4 to €10,8 million and a net profit of approximately 2,8% to 3,2% of total turnover.
Chanti Oussoren
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