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Arla brands grow but revenue falls 5.3 per cent

Arla saw strong brand growth in the first half of the year and a 1.5 per cent increase in UK volume driven revenue


Alex   Black

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Alex   Black
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Arla brands grow but revenue falls 5.3 per cent #teamdairy

Arla Foods has seen strong growth in branded sales in the first half of the year but revenue was 5.3 per cent lower than the first half of 2015.

 

The co-operative attributed the drop in revenue to decreasing market prices across Europe.

 

In the UK, volume driven revenue increased 1.5 per cent year on year driven by investment in its branded product range.

 

Brands

 

This year, Arla has launched new products such as Best of Both, Skyr yoghurt drinks and Protein snack pots and cottage cheese.


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Arla’s UK yoghurt brands grew significantly with skyr growing by 42.9 per cent and Arla Protein growing by 72.8 per cent.

 

The co-operative has estimated total revenue for the year at between €9.5-9.8bn (£8.12-8.37bn) and the profit share to be within 2.8 - 3.2 per cent of revenue by the end of the year.

 

Brexit

 

Tomas Pietrangeli, managing director, said the UK remained a ‘hugely important’ market despite the Brexit result. The UK is currently Arla's biggest market.

 

"While we are uncertain of the implications, I hope to see our products continue to move freely to and from the UK across the markets in which we operate," he said.

 

"We are in a strong position to not only weather any storms that may arise, but also take advantage of any opportunities."

 

Key figures

  • Branded sales +6.1%
  • Group revenue €4.9bn (£3.93bn)
  • UK volume driven revenue +1.5%

Increase

Peder Tuborgh, Arla Foods CEO, predicted the European dairy market would continue to improve in the remainder of the year. On Wednesday (August 24), Arla announced a 1ppl increase to its September standard litre price.

"We have already announced our first increase in the on-account milk price to our farmers, with effect from September, and we expect an improving market situation as we move towards the end of the year," he said.

 

"Our success in the second half of 2016 is reliant on our ability to continue to deliver our Good Growth 2020 Strategy, and thereby improve the milk price to our hard-pressed farmers."

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