The Arla Group’s turnover in the first half of 2024 was DKK 6.6 billion euros on the basis of 7.0 billion kg of milk. It is satisfactory, says CEO Peder Tuborgh, who expects the volatile market conditions driven by geopolitical tensions and uncertainty to continue.
Wednesday Arla presented a solid half-year result with a competitive milk price that paves the way for improved sustainability efforts in the future, says Peder Tuborgh, CEO, Arla Foods. The rising milk price and the half-yearly supplementary payments are primarily driven by rising raw material prices, Arla’s transformation and efficiency program Fund Our Future and recurring growth in strategic branded products. The company states this in a press release about the dairy company’s half-year results 2024.
Arla’s strategic brands had a volume driven revenue growth of 4.1% in the first half of 2024 compared to a decrease of 6.0% the first half of 2023. The growth was spearheaded by the Lurpak®, Puck® and Arla® brands which respectively grew volumes by 7.9%, 4.4% and 3.8% in the first half of 2024.
The performance price for the first six months of 2024 was 47.5 EUR-cent/kg and the total Arla Group revenue ended at EUR 6.6 billion. In the first half of 2024, Arla achieved a net profit of EUR 167 million.
Rise in sustainability initiatives on farms
In the first half of 2024 Arla consolidated its various elements of sustainability work under the name FarmAhead™ Technology. It is Arla’s ambition to reduce its emissions on farm by 30 % in 2030. Over the past 2 years, Arla has reduced nearly 1 million tons of CO2e.
An integral part of FarmAhead™ Technology is FarmAhead™ Incentive, Arla’s groundbreaking point-based system, that rewards past and future climate and environmental sustainability activities on farm directly in the milk price. Each point that the farmer achieves will trigger 0,03 eurocent per kilo of milk they deliver to Arla. Activities with the biggest improvement potential trigger the most points, and a maximum of 80 points is currently available.
Outlook for 2024
Looking ahead into the second half of 2024, Arla anticipates the volatile market conditions driven by geopolitical tension and uncertainty to continue. However, the positive trend on consumer purchasing power from the first half of 2024 should prolong into the second half, especially in Europe as inflationary pressure continues to subside and wages increase. This is anticipated to translate into a continued upturn in the demand for dairy, although it is uncertain how consumers will react to the expected higher retail price levels following the commodity price increases. The uncertainty is also underlined by a lesser volume of available milk on a global level.
