ARLA FOODS ANNUALRESULTS. Press conference February 21st 2018

Size: px

Start display at page:

Download "ARLA FOODS ANNUALRESULTS. Press conference February 21st 2018"

Anabel Dinah Dixon
5 years ago
Views:

1 ARLA FOODS ANNUALRESULTS Press conference February 21st 2018

HIGHLIGHTS: External trends in Yellow cheese

commodity prices 4 3 2 Firm market development Fat

Average OPEC crude oil price USD/barrel +29.

6 Fat 47% -27% 4 Protein 0 2 Sources: IMF (GDP

2 HIGHLIGHTS: External trends in Yellow cheese commodity prices in EU teur/ton 5 Peak in dairy commodity prices Firm market development Fat shortage increased fat price Strong economic growth Average OPEC crude oil price USD/barrel +29.1% Fat and protein prices teur/ton 8 6 Fat 47% -27% 4 Protein 0 2 Sources: IMF (GDP growth); MSCI Gross domestic product in % growth vs 6.8% China 1.9% Denmark 2.0% 1.8% 0.8% Germany Nigeria Russia 3.1% 3.6% 1.7% 2.2% 2.2% 0.1% Saudi Arabia Sweden UK US Europe World

3 HIGHLIGHTS: Internal trends in Prepaid up 27% in Arla s prepaid milk price EURc/KG % Strong balance sheet GG2020 Strong branded growth Increased complexity drives costs Leverage NIBD incl. pensions / EBITDA Volume driven revenue growth % 2.1% 3.4% 5.2% 3.0% Conversion costs ix Opening of our Global Innovation Centre in Aarhus

Performance at a glance Performance price Milk volume BILLION KG 14.2 13.9 13.9 EURc/KG 38.1 33.7 30.9 38.1 Profit share 1 2.8% OF REVENUE Target 2.

4 Performance at a glance Performance price Milk volume BILLION KG EURc/KG Profit share 1 2.8% OF REVENUE Target % 2.8% 3.6% 2.8% Revenue 10.3 BILLION EUR Target EUR billion Based on profit allocated to owners of Arla Foods amba.

8% 1,855 Germany 1.0% 0.1% 1,759 Other owner milk 1-2.8% 2.0% 729 Other milk -10.2% 0.6% 1,564 Total -2.2% 0.5% 13,937 9.5 11.8 12.

5 milk inflow unchanged compared to, however very volatile year Inflow of raw milk bkg Inflow of raw milk by country Other milk Owner milk % % % mkg Denmark 0.5% 2.1% 4,827 UK -3.3% -0.2% 3,203 Sweden -4.3% -2.8% 1,855 Germany 1.0% 0.1% 1,759 Other owner milk 1-2.8% 2.0% 729 Other milk -10.2% 0.6% 1,564 Total -2.2% 0.5% 13, Note that development is impacted by mergers (UK and Central Europe) 1 Including Belgium, Luxembourg and Netherlands

6 Performance price improved 23% in and averaged 38.1 EURc/KG Performance price EURc/KG Prepaid milk price month by month in EURc/KG Performance price EURc/KG J F M A M J J A S O N D 6 6

7 Quality of business Strategic branded volume driven revenue growth 3.0% Brand share % International share % 3.4% 5.2% 3.0% 44.6% 44.5% 42.1% 20.2% 19.7% 18.1% Target 2020 > 45% Target 2020 > 20% Target 1-3% 7 1 Brand share calculated as share of total revenue; 2 International share calculated as share of total retail and foodservice revenue

8 Strong strategic branded revenue growth driven by both sales price and volume increases Revenue growth of 10% Strategic branded volume driven revenue growth 3.0% : 5.2% Brand share % 43.0% 42.0% 41.0% % brand share split 66% 12% 8% 4% Arla Lurpak Castello Puck 10% Oth. Sup. Revenue development by brands Supported brands % 8.3% 3.1% 6.8% 5.5% 3,026 meur 528 meur 181 meur 339 meur 476 meur 8 1 Adjusted from the effect of sale of Rynkeby

9 Revenue exceeded EUR 3 billion in with volumes up 3.4% ARLA BRAND Financial highlights Revenue, meur 3,026 Revenue development 10.1% Strategic branded volume driven revenue growth 3.4% Innovative products Increasing pipeline of innovative products Focusing on growth areas Protein, Skyr and Organic Highlights Arlagården Plus Launched in November 88% of member milk 9 : 4.5%

10 Revenue composition in the four commercial segments continues to shift towards AFI and International Revenue composition by business area in Revenue development beur Arla Foods Ingredients 651 millioneur Europe 6,568 millioneur International 1,616 million EUR Trading and other sales 1,503 millioneur AFI International Europe Trading and other 10 Annual Report

2% EU markets performance and highlights Revenue in meur 2,211 1,285 997 1,418 269 299 : 2,197 : 1,153 : 925 : 1,410 : 243 : 322 United Kingdom Germany

reduces profit for group Significant growth in Arla and Starbucks brands; Skyr won several awards Strong organic position in Arla Bio Significant price

Record positive reputation scores Reputation continued to improve in Key market for Lactofree products tapping into lifestyle dairy segment Highest market

11 EU delivered significant price increases, and grew branded MYPC in adverse conditions Revenue development Brand share Strategic branded volume driven revenue growth 3.9% 48.3% -0.1% : -6.9% : 47.6% : 3.2% EU markets performance and highlights Revenue in meur 2,211 1, , : 2,197 : 1,153 : 925 : 1,410 : 243 : 322 United Kingdom Germany Denmark Sweden Netherlands & Belgium Finland Arla fastest growing brand among large manufacturers in the UK BoB white milk voted product of the year Weak GBP reduces profit for group Significant growth in Arla and Starbucks brands; Skyr won several awards Strong organic position in Arla Bio Significant price increases, however profitability still challenged Positive year in a challenging market Innovations included non-gmo white milk and new Baby and Me products Record positive reputation scores Reputation continued to improve in Key market for Lactofree products tapping into lifestyle dairy segment Highest market share to date in fresh dairy at >10% Market leader in organic Close collaboration with customers Key focus brands Arla Luonto+ and Lempi continued to grow Arla Family cheeses gaining market shares Castello launch exceeded expectations Market challenged by decreasing dairy consumption 11

INT delivered profitable growth, and our footprint expanded in a challenging macro-environment Revenue

strategic MENA agenda Launched Arla Organic in UAE, and locally produced White Cheese in Egypt Challenging

Continued to develop cooperation with DFA Canada driving profits Vigor share divested Russia & others

Castello, MBB (Arla Protein & Starbucks) across the markets China Revenue almost doubled; profitability

12 INT delivered profitable growth, and our footprint expanded in a challenging macro-environment Revenue development 13.2% : 5.9% Brand share 83.9% : 81.4% Strategic branded volume driven revenue growth 10.5% : 10.7% INT markets performance and highlights Revenue in meur : 85 : 519 : 323 : 336 : 56 : 102 SSA Revenue almost doubled driven by Dano brand Footprint expanded with new presence in Ghana NextGen product portfolio pipeline for West Africa Challenging currency environment MENA Good progress on strategic MENA agenda Launched Arla Organic in UAE, and locally produced White Cheese in Egypt Challenging economic environment and political uncertainty Americas Big natural cheese bet in US driven by Arla brand Continued to develop cooperation with DFA Canada driving profits Vigor share divested Russia & others Strong turnaround in Russia business; profitable growth despite embargo Significant growth on Lurpak, Castello, MBB (Arla Protein & Starbucks) across the markets China Revenue almost doubled; profitability improved Branded position strengthened with Infant Formula and Organic UHT prices challenged SEA Strong Dano brand growth in Bangladesh Singapore, Japan, Korea delivered profitable growth Partnership agreement signed with Indofood in Indonesia 12

AFI increased the value-added share of products Trading revenue increased due to higher commodity prices Share of value products 74% : 60% 1 Revenue share of Arla Group total 6.3% : 5.

13 AFI increased the value-added share of products Trading revenue increased due to higher commodity prices Share of value products 74% : 60% 1 Revenue share of Arla Group total 6.3% : 5.7% Revenue development 19.6% : 5.0% Trading share of Group revenue 14.5% : 13.3% Volume of standard & value-add products Index 140 Index % 74% 2012 Standard products Value products Mission statement officially launched: To discover and deliver all the wonders whey can bring to people s lives. Revenue split by regions Europe and MEA 651 MILLIONEUR 49% 47% Asia 41% 40% Americas 10% 13% Revenue development 18.0% : -20.5% Trading share of milk volume 20.2% : 20.1% 13 1 Share of value products in impacted by stock reduction exercise

14 Cost, cash and efficiency Conversion cost Leverage Target <100 Target

2018 outlook Expectations for 2018 Revenue

15 2018 outlook Expectations for 2018 Revenue BILLION EUR Brand share >45% Profit share % OF REVENUE International share >20% Approved CAPEX Investments 527 MILLION EUR Strategic branded volume driven revenuegrowth 1-3.5% Leverage

16 BoD proposal on profit appropriation provides a supplementary payment equal to 1 EURc, and retainment of Vigor proceeds as common capital Profit appropriation for with proceeds from Vigor retained as common capital Supplementary Payment: 1 EURc/kg owner milk Consolidation principles: Common Capital 2/3 Individual Capital 1/3 Performance Price 38.1 EURc/kg Prepaid Milk Price 35.8 EURc/kg Profit for the year EURm 2.3 EURc/kg Supplementary Payment 124 EURm 3 2 EURm 127 EURm Consolidation 114 EURm 44 3 EURm 158 EURm Common Capital 76 EURm 44 3 EURm 120 EURm Individual Capital 38 EURm 16 1 Based on profit allocated to owners of Arla Foods amba; 2 Interest on contributed capital: 0.04 EURc/kg 3 Gain on the divestment of associated company Vigor

17 ARLA FOODS ANNUALRESULTS Press conference February 21st 2018

FINANCIAL HIGHLIGHTS. Creating the future of dairy

FINANCIAL HIGHLIGHTS. Creating the future of dairy FINANCIAL HIGHLIGHTS Creating the future of dairy in short Peer group index * We evaluate our performance and the success of our strategy and business model by utilising key performance indicators. We