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 Net working capital 2.1 NET WORKING CAPITAL, OTHER RECEIVABLES AND CURRENT LIABILITIES Net working capital (EURM) 1,500 1,000 500 0 2016 1,175 1,103 Table 2.1.b Inventory (EURM) Inventory before write-downs Write-downs Total inventory 1,004 1,000 867 970 894 823 831 Raw materials and consumables Work in progress 679 Finished goods and goods for resale Total inventory 2017 Net working capital excluding payables related to owner milk Table 2.1.a Net working capital (EURM) 2018 Net working capital 2019 2020 Table 2.1.c Trade receivables (EURM) Trade receivables before provision for expected losses Provision for expected losses Total trade receivables 2020 2019 1,119 -39 1.112 -20 1,080 1.092 174 223 324 346 582 523 1,080 1.092 2020 2019 825 904 -14 -15 811 889 Cash flow Non-cash changes Included in 1 January operating cash flow Acqui- sitions Write- downs Currency 31 Reclasses December Table 2.1.d Trade receivables age profile (EURM) 2020 Inventory 1,092 113 -23 -44 -58 1,080 Trade receivables 889 -51 1 -24 -4 811 Trade and Not overdue other payables -1,158 -66 11 1 -1,212 Overdue less than 30 days Total net Overdue between 30 & 89 days working capital 823 -4 -22 -57 -61 679 Overdue more than 90 days Total trade receivables 2020 2019 Gross Gross carrying amount Expected loss rate carrying Expected amount loss rate 682 0% 703 0% 93 0% 130 0% 26 4% 39 5% 24 54% 32 41% 825 904 2019 Inventory 1,074 -13 18 4 Trade receivables 989 -96 2 Trade and other payables -1,169 30 Total net working capital 894 -79 18 6 20 14 15 -5 1,092 -21 12 Historically, experienced loss rates on balances not due or less than 30 days are below 1 per cent. 889 -9 -10 -1,158 20 -36 823 81 ARLA FOODS ANNUAL REPORT 2020

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