Arla Foods Consolidated Annual Report 2021
79
Arla Foods Consolidated Annual Report 2021 / Consolidated Financial Statements / Notes
Revenue and costs
1.4 KEY PERFORMANCE INDICATORS
The alternative performance measures disclosed below are key performance indicators for the group.
They are not IFRS requirements.
Contents
III
1.4.1 Performance price
FINANCIAL COMMENTS
Arla's performance price is a key measure of the overall
performance, expressing the value added to each kg of
milk supplied by our farmer owners. The performance
price is calculated as the standardised prepaid milk price
included in production costs, plus Arla Foods amba's
share of profit attributable to farmer owners, divided by
the weighed-in milk volume in 2021. The performance
price was 39.7 EUR-cent/kg owner milk, compared to
36.5 EUR-cent/kg owner milk last year.
Table 1.4.2 Strategic branded volume-driven revenue growth
(EURM)
2021
2020
Strategic branded revenue last year
Strategic branded volume-driven revenue growth
Price and exchange rate adjustments
Strategic branded revenue
Strategic branded volume-driven revenue growth, %
5,156
4,867
230
378
86
-89
5,472
5,156
4.5%
7.7%
Strategic branded VDRG is calculated as the volume growth of EUR 230 million divided by EUR 5,156 million and equals
4.5 per cent in 2021.
Table 1.4.1 Performance price
2021
2020
EURM
Mkg EUR-cent/
EURM
kg
Mkg EUR-cent/
kg
Note 1.4.3 Profit share
Owner milk
Adjustment to standard milk
(4.2% fat, 3.4% protein)
Arla Foods amba's share of profit
for the year
332
Total
12,518
4,762
12,518*
38.0
4,364
12,638*
34.5
-1.0
-0.7
2.7
345
2.7
39.7
12,638
36.5
*The milk conversion factor from litre into kg was 1.02 for milk volumes until 30 June 2021. Effective from 1 July 2021,
the milk conversion factor is 1.03. Historical figures were restated throughout the report according to the new
conversion factor, thereby also restating the performance price for last year.
FINANCIAL COMMENTS
The profit share of Arla is targeted at 2.8-3.2 per cent of
revenue, calculated from the profit attributable to our
farmer owners.
For 2021, the profit attributable to our farmer owners
amounted to EUR 332 million compared to EUR 345
million last year. This corresponded to 3.0 per cent of
revenue, or 2.7 EUR-cent per kilo of milk delivered, and was
distributed to the supplementary payment and retainment
as disclosed in the statement of profit appropriation.
1.4.2 Strategic branded volume-driven revenue growth
FINANCIAL COMMENTS
Volume-driven revenue growth (VDRG) is defined as
revenue growth that is derived from growth in volumes
keeping prices constant.
VDRG of strategic brands is a performance measure
applied to support and understand the non-price
revenue growth and performance of our branded
business.
Strategic branded VDRG increased by 4.5 per cent
in 2021 on top of the significant increase last year
of 7.7 per cent. Continued high demand for branded
products in the retail business was the main driver of
the increase.
Table 1.4.3 Profit share
(EURM)
Revenue
Profit for the year
Profit relating to non-controlling interests
Profit attributable to farmer owners
Profit share
2021
2020
11,202
10,644
346
352
-14
-7
332
345
3.0%
3.2%
Profit share is calculated as EUR 332 million divided by EUR 11.202 million and equals 3.0 per cent in 2021.View entire presentation