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February 23, 2012

SWEDEN: 2012 profits will be “on par” with last year, says Arla

Dairy giant Arla Foods said today (23 February) that 2012 profits would be "on par" with last year, when its consumer brands and ingredients divisions boosted earnings.

Dairy giant Arla Foods said today (23 February) that 2012 profits would be “on par” with last year, when its consumer brands and ingredients divisions boosted earnings.

In 2011, the company earned DKK1.31bn (US$234.2m), a 3.1% increase on 2010. Operating profit edged up 1.2% to reach DKK1.66bn.

Sales rose 11.9% to DKK54.89bn, with half of this from organic growth, in part driven by Arla’s three global brands, Arla, Lurpak and Castello. The Arla brand in particular, recorded growth of 8% in 2011.

“These are strong results in a difficult time,” Arla CEO Peter Tuborgh said. “Primarily because we have improved earnings for our owners to a level that is almost on par with the best we’ve ever delivered.”

Arla said it paid DKK1.6bn more to its co-operative owners in 2011 than in the previous year.

However, Tuborgh added: “While 2011 was a good year for Arla, the last quarter showed slight pressure on performance, reflecting a deteriorating business environment in Europe, which has continued into 2012. We expect significant revenue growth and for profits to be on par with 2011 albeit with fluctuations in the milk price for our co-operative owners over the year.”

Despite this, Tuborgh said Arla has been successful in new markets such as the Middle East and North Africa, and Russia it has expanded its position in the market by 27% and 33% respectively.

Arla said, as part of its group strategy, it aims to achieve annual revenues of DKK75bn by 2015.

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