Arla CEO Peder Tuborgh has hailed a “historic performance” in 2025, as the company navigated a wild swing between tight supply and a flooded market to deliver record revenues.
Turnover grew 9.4% to hit a record high of €15.1bn, as high commodity prices in the first half of the year were followed by a record milk intake of 14.3 billion kg.
Exceptional growth in the dairy co-op’s ingredients business, powered by a 29.3% jump in whey protein sales, also helped drive sales. And despite volume falling 1% for Arla branded products, and a 3.3% decline in Lurpak volumes, Arla recorded strong volume gains in its Puck and Starbucks products, up 6.7% and 13.9% respectively.
Arla’s net profits improved slightly to €415m despite a reduction in its share of revenue from 2.9% to 2.8%.
“Our historic performance demonstrates that our strategy is working. We have strengthened our market position, delivered record value for our farmer owners, and taken important steps toward a more sustainable future,” said Tuborgh.
The sudden increase in milk abundance in the second half of the year put immediate pressure on prices, creating a real challenge on profitability.
The group’s diversified portfolio helped maintain a stable performance, however, and Arla delivered higher-than-expected efficiency gains of €158m.
Arla has predicted the supply surge will continue well into early 2026, before normalising later in the year. Group revenue for 2026 is expected to be between €13.3bn–€14.1bn, “reflecting lower market prices” compared to the highs of early 2025, Arla said. Net profit share is expected to remain in the target range of 2.8% to 3.2%.
“It is in volatile times like these that our strategy truly proves its worth,” said Tuborgh.
“We are seeing a natural market cycle where high milk production brings prices down across the sector. While the abrupt increase creates challenges, our business stands on strong pillars. The combination of our brands, our efficiency, and a standout year for our ingredients business has allowed us to deliver a competitive result for our owners.”
Arla reported “solid” revenue growth in the UK, with net revenues up 5% to €152m despite a drop in branded volumes of 3.2%.
The co-op has made significant investments in the UK over the past year, and has committed £144m to its Lockerbie dairy site in Scotland. Work will also start on its new mozzarella production facility in Taw Valley in 2027.
Arla also made continued progress against its sustainability goals, cutting Scope 1 and 2 emissions by a further 5.6 percentage points, and reaching a cumulative reduction of 43.6% compared to its 2015 baseline. Arla has now shifted all of its European production sites to renewable power sources or tariffs.
No comments yet