Arla scores with whey and promises merger bonus

In terms of growth, things seem to be going well for Arla. Compared to FrieslandCampina's 6,4% increase in revenue, almost 14% is certainly not a bad figure. The Dutch competition, however, did report a much better net profit: €230 million on revenue of €6,8 billion. And a year earlier, RFC's profit was €183 million on revenue of €6,4 billion.

The half-year figures are an interim figure. A more accurate comparison can only be made when looking at the full year, but each company has its own strengths and weaknesses. Arla's half-year profit is lower than FrieslandCampina's, but comes with fewer caveats. FrieslandCampina still has some reservations. Arla is also already paying a partial back payment of €1,00 per 100 kilos, while FrieslandCampina is promising a higher return (provisionally €2,24) but is still holding out for now.

It's notable that both companies have struggled more so far this year in the regular dairy markets (retail, food service, sales to industrial customers). At Arla, brand sales are also under greater pressure.
However, neither company's real profit comes from these activities. It's important, however, that they remain profitable and not, as FrieslandCampina did in recent years, be allowed to cost money.

Success with protein drinks
Arla's biggest success story is its ingredients business. With a turnover of €726 million, it accounts for 9,7% of revenue in the first half of this year, but is responsible for a significantly above-average share of profit. The whey business, which is booming globally, is performing particularly well, thanks to the protein drinks.

The division's revenue grew by almost 54% in the first half of this year (compared to the 2024 annual report's projection of around 20%). A return figure is not provided. However, the high revenue is not entirely due to "organic growth," as it's called. The acquisition of British company Volac in 2024 is also contributing, according to Arla, for at least €137 million. The amount paid for Volac is still unclear, but it could be around €250 million.

infant food
However, Arla's success isn't limited to its high-quality products. For example, the company is withdrawing from its infant nutrition operations in China. This was announced last year, but it is now being finalized. The factory in Videbaeck, which was previously used for this purpose, is also switching over to ingredients.

Better than RFC?
Arla is performing strongly with ingredients, but is it doing better than FrieslandCampina? FrieslandCampina's ingredients division, with a turnover of €758 million, is slightly larger than Arla's, but is growing much slower, with a 5% increase in turnover. However, an operating profit of €130 million (+35,4%) is commendable. FrieslandCampina also has a successful infant nutrition division, with a turnover of €718 million and an operating profit of €219 million, which is also 61% higher than the result in the first half of 2024. You might think that this division alone almost accounts for all of FrieslandCampina's net profit for the first half of 2025, but that's not how it works.

Things have been different at times, for both companies. All activities experience cycles with highs and lows. It's a given, however, that the ingredients business is currently exceptionally profitable. Even more so than it already was, and Arla is well-positioned to go even further.

Fusion bonus
The proposed merger with DMK will provide Arla with even more opportunities to advance its whey processing business. However, the acquisition of DMK also presents challenges, but Arla is strongly committed to ensuring this merger goes ahead. For example, the group has already promised Arla members a merger bonus of €260 million if the merger is approved. This money will be drawn from Arla's equity and paid out in 2027 and 2028, subject to a final approval by the competition authorities. This amount represents a premium of €1,00 per 100 kilos of milk.