Arla Foods’ robust half-year performance in 2024 continues the positive momentum from late 2023, enabling a 5 EUR-cent/kg increase in milk prices compared to the second half of 2023, a half-year supplementary payment to farmer owners of 1 EUR-cent/kg milk and advancing sustainability initiatives through FarmAhead Technology.
Arla Foods has delivered a robust half-year performance in 2024 where the positive trajectory from the later part of 2023 has continued. The performance has made it possible for Arla to increase the milk price by 5 EUR-cent/kg milk compared to the second half of 2023, and as expected, it is also possible to pay a half-year supplementary payment to farmer owners of 1 EUR-cent/kg milk based on the half-year volumes. The rising milk price and the half-year supplementary payments are mainly driven by rising commodity prices, Arla’s Fund Our Future transformation & efficiency programme and a return to branded volume growth.
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 milk 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.
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.
The milk price and revenue for the first half of 2024 is slightly lower than in the 2023 half year report. However, with the expectation that the strong market momentum from the first half of 2024 continues into the second half of 2024, Arla has adjusted its full-year expectations for revenue from EUR 13.2-13.7 billion to EUR 13.4-13.9 billion and still expects to deliver a profit within the range of 2.8-3.2% of Arla has also adjusted its full-year expectations for strategic branded volume-driven revenue growth from 1.0-3.0 % to 3.0-4.0 %.
