Arla Foods reports 16.6% revenue rise

Arla Foods has reported a 16.6% rise in turnover and a 20.8% jump in net profit in 2013.

The European dairy co-op grew its revenue to £8.4bn, with profit increasing from £207m to £250m on the year to hit its target of 3% of turnover.

Arla’s UK revenue rose 22% to £2.2bn, after the merger with Milk Link in 2012 and the number of British farmer-owners growing to 2,800 in the past year.

The performance price – how much value Arla generates from each kilogramme of its farmers’ milk – was 33.91p/kg in 2013, compared with 30.21p/kg in the previous year.

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Arla’s members supplied 9.5bn kg of milk in 2013, 2bn more than the year before.

The co-op’s head of milk and member services, Ash Amirahmadi, said the growth was due to mergers, inviting more farmers to become owners and underlying business growth from its brands like Anchor and Lurpak.

“We have had the best year in our history and because we are the farmers that is the best milk price we have had,” he said.

“The UK commodity market has started to turn, however global prices have stayed quite strong. Because Arla has got access to these global markets and Arla is one in four UK farmers, that is good for the UK.”

The co-op has more modest growth targets for 2014 and is forecasting a 4% rise in turnover to £8.7bn and a 6% rise in net profit to £265m.

“I think that underlines more true like-for-like growth of the business,” Mr Amirahmadi said.

“We are consolidating what we are doing in the home markets of northern Europe, but we are incredibly ambitious.

“We absolutely want to expand. Everyone talks about China. It’s not just China but Russia and the Middle East.”