Arla: total revenue reaching EUR 13.7 billion
Source: The DairyNews
In 2023, Arla Group maintained a robust financial stance, with total revenue reaching EUR 13.7 billion, nearly on par with the 2022 figure of EUR 13.8 billion. Negative currency impacts, particularly on SEK, GBP, and USD, coupled with the cost of goods and general inflation, contributed to a performance price decrease to 47.0 EUR-cent/kg, down 8.1 EUR-cent/kg from the all-time high in 2022. Despite this dip, the 2023 result stood 15% above the last 5-year average.
Arla Foods Chairman, Jan Toft Nørgaard, attributed this resilience to the collective efforts of farmer owners, employees, and management, showcasing the company's adaptability to challenging market conditions. Nørgaard expressed pride in the solid results, emphasizing the competitive milk price and noteworthy sustainability achievements. He highlighted Arla's commitment to CO2e reduction targets for 2030, showcasing proactive innovation and action by farmer owners.
In 2023, Arla achieved a net profit of EUR 380 million, equivalent to 2.8% of revenue, aligning with the lower end of the target range of 2.8-3.2%. This strong financial performance enabled the Arla Board of Directors to propose a supplementary payment of 2.07 EUR-cent per kg of milk delivered, totaling 270 million EUR. Peder Tuborgh, CEO of Arla Foods, noted that the proposed payment and a competitive on-account milk price in 2023 reflected Arla's financial resilience amid challenges in the global dairy market and adverse currency trends. Notably, Arla's investments reached an all-time high of EUR 601 million, surpassing the 2022 figure of EUR 521 million.
On the sustainability front, Arla's farmer owners showcased their commitment to carbon emissions reduction in 2023. With an average cut of 3.6% in CO2e compared to 2022, on-farm emissions decreased from 1.12 to 1.08 kg CO2e per kg of owner milk. Scope 3 emissions, constituting 96% of Arla's total carbon footprint, saw a reduction of 3 percentage points per kg of milk and whey, amounting to a total decrease of 12% from the company's 2015 baseline.
Arla also made strides in Scope 1 and 2 emissions, lowering them by 4 percentage points in 2023 and achieving a total reduction of 33% compared to the 2015 baseline. This success was attributed to energy optimization at sites and the impact of power purchase agreements. Over the two years from 2021 to 2023, Arla, alongside its farmer owners, collectively cut nearly 1 million tonnes of CO2e, putting the company on track to meet its 2030 reduction targets of -63% on Scope 1+2 and -30% on Scope 3.
In a historic move, Arla accelerated its efforts to reduce scope 3 emissions with the launch of the Sustainability Incentive Model, tying a portion of the milk price to on-farm sustainability actions. The Customer Sustainability Programme (CSP) was also introduced, fostering deeper collaboration between farmers and customers in pursuit of shared climate targets.
In 2023, Arla achieved a net profit of EUR 380 million, equivalent to 2.8% of revenue, aligning with the lower end of the target range of 2.8-3.2%. This strong financial performance enabled the Arla Board of Directors to propose a supplementary payment of 2.07 EUR-cent per kg of milk delivered, totaling 270 million EUR. Peder Tuborgh, CEO of Arla Foods, noted that the proposed payment and a competitive on-account milk price in 2023 reflected Arla's financial resilience amid challenges in the global dairy market and adverse currency trends. Notably, Arla's investments reached an all-time high of EUR 601 million, surpassing the 2022 figure of EUR 521 million.
On the sustainability front, Arla's farmer owners showcased their commitment to carbon emissions reduction in 2023. With an average cut of 3.6% in CO2e compared to 2022, on-farm emissions decreased from 1.12 to 1.08 kg CO2e per kg of owner milk. Scope 3 emissions, constituting 96% of Arla's total carbon footprint, saw a reduction of 3 percentage points per kg of milk and whey, amounting to a total decrease of 12% from the company's 2015 baseline.
Arla also made strides in Scope 1 and 2 emissions, lowering them by 4 percentage points in 2023 and achieving a total reduction of 33% compared to the 2015 baseline. This success was attributed to energy optimization at sites and the impact of power purchase agreements. Over the two years from 2021 to 2023, Arla, alongside its farmer owners, collectively cut nearly 1 million tonnes of CO2e, putting the company on track to meet its 2030 reduction targets of -63% on Scope 1+2 and -30% on Scope 3.
In a historic move, Arla accelerated its efforts to reduce scope 3 emissions with the launch of the Sustainability Incentive Model, tying a portion of the milk price to on-farm sustainability actions. The Customer Sustainability Programme (CSP) was also introduced, fostering deeper collaboration between farmers and customers in pursuit of shared climate targets.
