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
Revenue and cost
1.1 REVENUE
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Adaption to changed consumer behaviour drove stronger sales and improved brand positions
Revenue increased by 1.1 per cent to EUR 10,644 million,
compared to EUR 10,527 million last year. The increase
reflects more retail sales of branded volumes both in
Europe and International, and a full year effect of M&A
activities from 2019. These were partly offset by lower
sales volumes in food service and global industry sales and
a negative effect from lower sales prices and currencies.
Strategic branded sales volumes grew by 7.7 per cent,
compared to 5.1 per cent last year, driven by LurpakⓇ,
PuckⓇ, Arla® and other supported brands. Price levels
decreased by 1.2 per cent compared to last year.
Development in revenue
(EURM)
55
The revenue in international increased by EUR 174 million
driven by the full year of effect of the acquisition of the
cheese business in MENA completed last year and
generally increased volumes due to the Covid-19 situation.
The increase was partly offset by adverse foreign exchange
movements in the US dollar.
11,000
65
10,750
270
10,527
-133
10,500
Europe is Arla's largest commercial segment, comprising
60.2 per cent of total revenue which was consistent with
last year. Revenue in Europe increased by EUR 66 million,
driven by higher volumes partly offset by lower prices and
adverse currency effects. The strategic branded revenue in
Europe grew 5.9 per cent despite volatility in the market.
Branded sales grew to 53.0 per cent of revenue compared
to 50.4 per cent last year.
The international segment accounted for 18,6 per cent
of total revenue, compared to 17.1 per cent last year.
The strategic branded revenue in international
represented 86.0 per cent of revenue compared to
82.7 per cent last year.
Arla Foods Ingredients comprised 6.7 per cent of total
revenue, which is consistent with last year. Revenue
increased due to sales of value-added products within
the ingredients segment.
Our Global Industry Sales and other segment represented
14.5 per cent of the total revenue and decreased by 1.3
per cent to EUR 1.541 million versus EUR 1,662 million
last year. The decrease was driven by lower volumes due
to high growth in the retail segments.
The full year effect of M&A activities in 2019 including
purchase of the Kraft branded cheese business in MENA
and the divestment of the remaining Allgäu-activities in
Germany, contributed to a revenue increase of EUR 65
million in 2020.
Revenue was negatively impacted by adverse foreign
exchange rate movements of EUR 85 million, driven
primarily by USD and GBP.
10,250
10,000
9,750
9,500
2019
Sales prices
Revenue split by commercial segment,
2020
10,644
MILLION EUR
Volume/mix
M&A
-85
10,644
Currency
2020
Revenue split by commercial segment,
2019
10,527
MILLION EUR
74 ARLA FOODS ANNUAL REPORT 2020
Europe 60%
International 19%
Arla Foods Ingredients 7%
Global industry sales and other sales 14%
Europe 60%
International 17%
Arla Foods Ingredients 7%
Global industry sales and other sales 16%View entire presentation