FINLAND: Russia propels sales at Finnish dairy co-op Valio
Valio saw sales and profits rise in 2013
Finnish dairy co-operative Valio Group has booked an increase in sales for 2013, with dynamic growth in Russia accelerating the top line.
Comparable net sales increased 2.6% year-on-year, rising to EUR2.03bn (US$2.79bn). Domestic sales edged up 0.1% while international sales rose 3.9%, Valio said today (27 March). During 2013 the company generated 37% of sales overseas.
The growth in international can largely be attributed to continued expansion in Valio's largest overseas market - Russia. Net sales in the country rose 11%, totalling EUR378m in the period. Russia accounted for 49% of exports, the Finnish group said.
The company returned profits of EUR907m to its dairy farmer-owners, an increase of EUR24m on 2012.
Valio performance 2013 sets record highs on all indicators
Valio Group net sales for 2013 stood at 2 029 million euros. Comparable net sales increased by 2.6% on the previous year. All market profits generated by Valio are paid through the dairy co-operatives to Valio milk producers who numbered around 7 500 at the end of 2013. The milk return rose to 48.0 cents/litre in 2013 and was the highest ever recorded by Valio. The price paid for raw milk including after payment stood at 47.5 cents/litre, also a record high for the company. The after payment accounted for 2.5 cents/litre.
Valio is a company owned by Finnish milk producer co-operatives, whose mission is to process all the milk produced by its owners as profitably as possible and pay the return on operations to the milk producers. Valio’s most significant key figure is the milk return generated by the company, on the basis of which the price paid for raw milk is determined. Valio does not strive to make a profit for the company per se. In 2013, Valio paid Finnish milk producers a total of 907 million euros (45% of net sales), up 24 million euros on the previous year.
Dairy farming is the most important source of agricultural income in Finland and milk production maintains a number of related businesses and professions. Valio’s 15 production plants in Finland, milk collection, product distribution, and Valio Group milk producers, employ a total of some 30 000 people in Finland.
Around 37% of Valio’s net sales were generated from exports and by the subsidiaries. Valio’s share of Finland’s food exports rose to around 40% and the share of the country’s dairy product exports was nearly 95%.
Russia is Valio’s biggest export market and in 2013 Valio Russia’s net sales increased by around 11% to stand at 378 million euros. Russia also accounted for 49% of Valio’s exports* in 2013. (*Valio’s exports = products manufactured in Finland and exported.)
Valio key figures 2013
Valio Group net sales for 2013 stood at 2 029 million euros. Net sales increased by 3.9% in international markets and 0.1% in Finland. The Valio Group milk margin** exceeded the one billion euro mark for the first time to stand at 1 026 million euros (2012: MEUR 991). The milk return* was the best in the company’s history at 48.0 cents/litre (2012: 44.9 c/l).
Loans from financial institutions at the end of 2013 totalled 194 million euros (2012: MEUR 171). Valio Group’s equity/assets ratio was 47% (2012: 47%). Investments totalled 118 million euros (2012: MEUR 105).
The milk volume taken in by Valio from its owners amounted to 1 888 million litres (2012: 1 865 million litres).
*Milk return = (Milk margin less the requirement for depreciation of fixed assets i.e. financing requirement for investments) / milk volume supplied by the owners.
**Milk margin = Net sales less other costs excluding depreciation and the price paid for raw milk and interest on shareholder loan paid to owners.
Original source: Valio Group
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