Arla Foods Consolidated Annual Report 2021
44
Arla Foods Consolidated Annual Report 2021 / Performance Review / Performance overview
PERFORMANCE OVERVIEW/CONTINUED
Contents
III
Food
Strong financial position in 2021
Leverage measures our ability to generate profit
compared to our net-interest bearing debt. Leverage is
our most important indicator of our financial position
and our long-term target range is 2.8-3.4. In 2021,
leverage improved to 2.6 compared to 2.7 last year.
Net interest-bearing debt, excluding pension
liabilities, increased to EUR 2,221 million compared
to EUR 2,180 million last year.
Cash flow from operating activities increased by
6 per cent to EUR 780 million, compared to EUR
731 million last year, mainly due to higher EBITDA.
Net working capital increased by EUR 131 million to
EUR 810 million, representing an increase of 19.3 per
cent compared to last year. The increase was due to
deliberately reduced use of trade receivable finance
programmes, higher prices and inventory values.
Arla's overall financial position is strong and
provides us with flexibility to fund our strategy and
pursue our vision to create the future of dairy. Arla
does not hold a public rating; however, based on the
market pricing of our bond issues and feedback from
several external financial relations, Arla is considered
a solid investment grade company and is committed
to maintaining this status going forward.
Investments to enhance our new strategy
In 2021, our investments totalled EUR 566 million.
The main focus of our investments was the
execution of our key CAPEX projects. In Germany,
the construction of a new powder tower in
Pronsfeld proceeded well. In Bahrain, we extended
our production site to encompass the entire
production of Kraft® and PuckⓇ products. In
Denmark, we continued with the capacity increase
of the mozzarella production at Branderup dairy as
well as the construction of our new AFI Innovation
Centre which opened in November 2021.
Apart from these large constructions we also
invested significantly in improving and expanding
our IT and digital assets and competencies.
Financial leverage development
2.6
2.4
2.8
2.7
2.6
2017
2018
2019
2020
2021View entire presentation