Arla Foods Consolidated Annual Report 2021
75
Arla Foods Consolidated Annual Report 2021 / Consolidated Financial Statements / Notes
Revenue and costs
1.1 REVENUE
Contents
III
Table 1.1.a Revenue split by country
2021
2020
Share of revenue in 2021
(EURM)
United Kingdom
2,891
2,740
26%
Sweden
1,546
1,478
14%
Germany
1,301
1,267
12%
Denmark
1,082
1,031
10%
Netherlands
598
526
5%
China
419
368
4%
Saudi Arabia
342
352
3%
Finland
309
316
3%
USA
215
177
2%
UAE
206
201
2%
Other*
2,293
2,188
19%
Total
11,202
10,644
*Other countries include, among others, Belgium, Canada, Oman, Spain, Nigeria, France, Australia.
Table 1.1.a represents total revenue by country and includes all sales that occur in the countries, irrespective of
organisational structure. Therefore, the figures cannot be compared to our commercial segment review on page 28
to 35.
Table 1.1.b Revenue split by brand
(EURM)
Arla®
Lurpak®
Puck®
CastelloⓇ
Milk-based beverage brands
2021
2020
3,359
3,116
646
638
383
427
192
177
293
232
599
566
5,472
5,156
AFI
794
716
Non-strategic brands and other
4,936
4,772
Total
11,202
10,644
Other supported brands
Strategic branded revenue
Accounting policies
Revenue is recognised when a contract exists with
a customer for the production and transfer of dairy
products across various product categories and
geographical regions. Revenue per commercial
segment or market is based on the group's internal
financial reporting practices.
Revenue is recognised in the income statement when
a performance obligation is satisfied, at the price
allocated to that performance obligation. This is defined
as the point in time when control of the products has
been transferred to the buyer, the amount of revenue
can be measured reliably and collection is probable.
The transfer of control to customers takes place
according to trade agreement terms, i.e. the Incoterms,
and can vary depending on the customer or specific
trade.
Revenue comprises invoiced sales for the year less
customer-specific payments, such as sales rebates, cash
discounts, listing fees, promotions, VAT and duties.
Contracts with customers can contain various types of
discounts. Historical experience is used to estimate
discounts, in order to correctly recognise revenue.
Furthermore, revenue is only recognised when it is
highly probable that a material reversal in the amount
of revenue will not occur. This is generally the case
when control of the product is transferred to the
customer, also taking into consideration the level of
rebates.
The vast majority of all contracts have short payment
terms with an average of 35 days. Therefore, an
adjustment of the transaction price with regard to
a financing component in the contracts with customers
is not required.
Uncertainties and estimates
Revenue, net of rebates, is recognised when goods are
transferred to customers. Estimates are applied when
measuring accruals for rebates and other sales
incentives. The majority of rebates are calculated based
on terms agreed with the customer. For some customer
relationships, the final settlement of the rebate depends
on future sales volumes and prices, as well as other
incentives. Thus, there is an element of uncertainty in
estimating the exact value.
Since Arla's main line of business is the sale of
fresh dairy products, returns of goods rarely occur
and therefore do not require specific accounting
disclosures.View entire presentation