Arla Foods (ARLA) H2 2024 earnings summary

Executive summary

• Achieved strong financial results in 2024 with revenue of EUR 13.8 billion, up 0.7% year-over-year, and net profit of EUR 401 million, representing 2.9% of revenue, within the target range.

• Performance price increased by 8.3% to 50.9 EUR-cent/kg, the second-highest in Arla's history, enabling the highest-ever supplementary payment to farmer owners of EUR 292 million.

• Strategic branded volume-driven revenue growth returned to 3.7% after a decline in 2023, driven by increased consumer purchasing power and strong brand performance.

• Significant progress in sustainability, with a 4 percentage point reduction in scope 1+2 emissions and a 1 percentage point reduction in scope 3 emissions per kg of milk and whey.

• Over EUR 1 billion invested in future growth, including acquisitions and capacity expansion, notably the Volac Whey Nutrition business.

Financial highlights

• Revenue: EUR 13,770 million (+0.7% year-over-year).

• Net profit: EUR 401 million (2.9% of revenue), up from EUR 380 million in 2023.

• EBITDA: EUR 1,109 million (+3% year-over-year).

• EBIT: EUR 598 million (flat year-over-year).

• Performance price: 50.9 EUR-cent/kg (+8.3% year-over-year).

• Supplementary payment: EUR 292 million (2.24 EUR-cent/kg), highest ever.

• Leverage: 3.2 (within target range 2.8–3.4), impacted by acquisitions.

• Cash flow from operating activities: EUR 652 million (down from EUR 1,151 million in 2023, due to higher working capital needs).

• Investments: EUR 1,053 million, including EUR 290 million in M&As.

Outlook and guidance

• 2025 expected to be more challenging, with branded volume-driven revenue growth forecasted at -2.0% to -1.0% due to high dairy prices and market volatility.

• Revenue guidance for 2025: EUR 14.5–15.3 billion, with profit share expected to remain within 2.8–3.2%.

• Efficiency savings targeted at EUR 90–110 million in 2025.

• Continued focus on sustainability, aiming for 63% reduction in scope 1+2 emissions and 30% reduction in scope 3 emissions per kg of milk and whey by 2030.