Arla Foods Annual Report 2020
Management Review
Our Strategy
Our Brands and Commercial Segments Our Responsibility Our Governance
Our Performance Review
Our Consolidated Financial Statements
Our Consolidated Environmental, Social and Governance Data
GLOSSARY
ArlagårdenⓇ is the name of our quality
assurance programme.
BEPS is an acronym referring to base erosion and
profit shifting. These are tax avoidance strategies
that exploit gaps and mismatches in tax rules to
artificially shift profits to low or no-tax locations.
Biogas is the mixture of gases produced by the
breakdown of organic matter in the absence of
oxygen, primarily consisting of methane and
carbon dioxide. At Arla, biogas is primarily produced
from cow manure.
Biomass is plant or animal material used for
energy production. It can be purposely grown
energy crops, wood or forest residues, waste from
food crops, horticulture, food processing, animal
farming, or human waste from sewage plants.
Brand share measures revenue from strategic
brands as a proportion of total revenue, and is
defined as the ratio of revenue from strategic
branded products to total revenue.
CAPEX is an abbreviation of capital expenditure.
Capacity cost is defined as the cost of running
the general business, and includes staff costs,
maintenance, energy, cleaning, IT, travel and
consultancy etc.
Carbon sequestration refers to a natural or
artificial process by which carbon dioxide is
removed from the atmosphere and held in solid
or liquid form.
CPI is an abbreviation of Consumer Price Index.
Digital engagement is defined as the number
of interactions consumers have across digital
channels. The interaction is measured in a number
of different ways, for example, by viewing a video
on all media channels for more than 10 seconds,
visiting a webpage, commenting, liking or sharing
on our social media channels.
Digital reach is defined as engagement with Arla's
digitial content, i.e. spending more than 2 minutes
on our website, watching our videos to the end on
YouTube, and liking or commenting on content on
our social media platforms.
EBIT is an abbreviation of earnings before interest
and tax, and is a measure of earnings from
operations.
EBITDA is an abbreviation of earnings before
interest, tax, depreciation and amortisation from
ordinary operations.
EBIT margin measures EBIT as a percentage of
total revenue.
EMEA is an acronym referring to Europe,
the Middle East and Africa.
Equity ratio is the ratio of equity, excluding
minority interests, to total assets, and is a measure
of the financial strength of Arla.
FMCG is an acronym for fast-moving consumer
goods.
Free cash flow is defined as cash flow from
operating activities after deducting cash flow from
investing activities.
FTE is an acronym for full-time equivalents. FTEs
are defined as the contractual working hours of an
employee compared to a full-time contract in the
same position and country. The FTE figure is used
to measure the active workforce counted in
full-time positions. An FTE of 1.0 is equivalent to a
full-time worker, while an FTE of 0.5 equals half of
the full workload.
GDPR is an acronym for the General Data
Protection Regulation, which regulates data
protection and privacy in the European Union (EU)
and the European Economic Area (EEA). It also
addresses the transfer of personal data outside the
EU and EEA areas. The GDPR aims primarily to give
control to individuals over their personal data and
to simplify the regulatory environment for
international business by unifying the regulation
within the EU.
Global industry share is a measure of the total
milk consumption for producing commodity
products relative to the total milk consumption, i.e.
based on volumes. Commodity products are sold
with lower or no value added, typically via business-
to-business sales for other companies to use in
their production as well as via industry sales of
cheese, butter or milk powder.
Greenhouse Gas Protocol (GHGP) provides
accounting and reporting standards, sector
guidance, calculation tools to account for
greenhouse gas emissions. It establishes a
comprehensive, global, standardised framework for
measuring and managing emissions from private
and public sector operations, value chains,
products, cities, and policies.
Incoterms refer to International Commercial
Terms. These are a series of pre-defined commercial
terms published by the International Chamber of
Commerce (ICC) relating to international commercial
law. They are widely used in international commercial
transactions or procurement processes and their
use is encouraged by trade councils, courts and
international lawyers.
Innovation pipeline is defined as the net
incremental revenue generated from innovation
projects up to 36 months from their launch.
Interest cover is the ratio of EBITDA to net
interest costs.
International share of business is defined as the
revenue from the International zone as a percentage
of of revenue from the International and Europe
zones.
Lactalbumin, also known as 'whey protein', is the
albumin contained in milk and obtained from
whey.
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