Arla Foods Consolidated Annual Report 2021

39 Arla Foods Consolidated Annual Report 2021 / Performance Review / Performance overview PERFORMANCE OVERVIEW Competitive pre-paid milk price throughout the year Arla targets an annual net profit share in the range of 2.8 to 3.2 per cent of revenue, allowing us to actively balance the retained capital for future investments and provide a competitive supplemen- tary payment to our farmer owners. This also enabled us to pay out the largest possible share of our profit via the pre-paid milk price to our farmer owners during the year. In 2021, we achieved a net profit of EUR 332 million, equalling 3.0 per cent of revenue. Our excellent branded volume growth combined with our agility to promptly adapt to new price conditions with the main impact materialising in our industry sales segment resulted in a competitive milk price paid to our owners. The continued momentum to create efficiencies across our value chain also contributed to the milk price increases. We managed to increase the average standard pre-paid milk price to 37.0 EUR-cent/kg, which is an increase of 3.3 EUR-cent/kg compared to 2020. Our performance price was 39.7 EUR-cent/kg in 2021, up from 36.5 EUR-cent/kg in 2020 (an increase of 8 per cent). This performance price positions Arla among the market leaders in Europe and supports our farmer owners, who also face increasing production costs on their farms. Milk intake from our farmer owners decreased by 1.0 per cent compared to last year. The decrease effected all member countries but the UK. We saw the largest decrease in our Central European region, where cold weather, flooding and increased feed prices put a pressure on milk production. Milk intake from other sources decreased by 8.4 per cent compared to last year. However, total milk intake remained virtually unchanged compared to last year at 13.6 billion kg. Performance price (EUR-cent/kg) 39.7 37.7 36.0 36.3 36.5 2017 2018 2019 2020 2021 OUR PERFORMANCE PRICE POSITIONS ARLA AMONG THE MARKET LEADERS IN EUROPE AND SUPPORTS OUR FARMER OWNERS Standard pre-paid milk price (EUR-cent/kg) 40 42 I I IV LV LV Ô N Q1 Q2 Contents Q3 Q4 Q1. Q2 Q3 Q4 2020 2021 III

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