Arla Foods posts strong results in a record year

Arla delivered a highly competitive full-year performance in 2025, and set new records across the business, achieving its highest ever milk intake, performance price and revenue

In 2025, Arla Group’s total revenue reached a record EUR 15.1 billion, driven by a record milk intake of 14.3 billion kg, high commodity prices in the first half of the year and exceptional growth in the ingredients business.

Arla achieved a net profit of EUR 415 million and a competitive performance price of 56.4 EUR-cent/kg. This combined with our robust financial position allows the Arla Board of Directors to propose a supplementary payment of 2.2 EUR-cent/kg milk to farmer owners.

“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”, says Peder Tuborgh, CEO of Arla Foods.

However, the result was achieved against a backdrop of two very different market realities. While the year began with a strong demand and a balanced supply , the landscape shifted dramatically in the second half. Exceptional weather conditions and strong feed harvests across Europe triggered a rapid surge in milk volumes.

“I am pleased we can propose a solid supplementary payment after a year that demanded immense agility from our owners. We shifted from tight supply of milk to a sudden abundance, which naturally creates pressure on the market. As a farmer, it gives me confidence to see our cooperative navigate this volatility and once again prove its worth as a strong, competitive home for our milk,” says Jan Toft Nørgaard, Chair of Arla Foods.

**A natural market correction **

Towards the second half of 2025, milk supply increased significantly across Europe including key Arla markets like the UK and Denmark (7.7 % and 3.6 % for 2025 compared to 2024, respectively). This sudden abundance, one of the sharpest uplifts in recent years, triggered a classic shift in market dynamics. The surplus supply forced global trading prices down, putting immediate pressure on the general value of milk across the industry.

Despite this pressure, Arla’s strong business mix ensured stability in the full-year performance. By leveraging a high-performing ingredients business, strong positions in retail and foodservice, and delivering higher than expected efficiency gains of 158 million, the cooperative successfully navigated the drop in global market prices.

“It is in volatile times like these that our strategy truly proves its worth. 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." says Peder Tuborgh, CEO of Arla Foods.

Ingredients engine drives value

A key factor in the year's strong result was the exceptional performance of Arla Foods Ingredients (AFI). The subsidiary delivered a revenue increase of 43.1 % EUR 1,452 million, driven by strong global demand for value-added protein and the successful integration of the newly acquired Whey Nutrition business from Volac (now AFI Felinfach).

Investing in future growth

Despite the challenging market end to the year, Arla continued to invest in transformative projects in 2025. The cooperative committed to a high investment level of EUR 731 million, directing capital towards expanding capacity in high-growth categories.

Key strategic decisions included the creation of a UHT Centre of Excellence in Lockerbie, Scotland, to meet rising demand for long-life milk, and a significant expansion of the Holstebro Dairy in Denmark to boost cream cheese production by an additional 16,000 tonnes.

Arla also greenlit expansions for its Puck® brand in Bahrain and a new Skyr line at Linköping Dairy in Sweden, reinforcing its commitment to broadening the portfolio across core markets.

“While we navigate the current market corrections, our eyes remain firmly on the long term. By investing in these key growth engines, we are sending a clear signal: We believe in the future of dairy. We are taking the responsibility to ensure that nutritious, sustainable dairy is available to the world, and we are building the capacity to lead that charge,” says Peder Tuborgh.

In parallel with its internal investments, Arla continues to progress the planned merger with DMK Group. Approved by the Boards of Representatives of both cooperatives in June 2025, the merger aims to unite two of Europe’s leading dairy cooperatives with highly complementary portfolios to enhance resilience and drive innovation. The merger is currently undergoing regulatory review, which is expected to conclude in the first half of 2026.

Strong value creation and returning momentum

Arla’s strategic brands delivered significant value in 2025. Total branded revenue increased by 6.9 % to EUR 7,029 million, driven by the cooperative's ability to maintain rightful price points during a period of inflation.

While these price levels impacted volumes in the first half of the year, the underlying demand remained intact. As purchasing power strengthened, consumers returned to the products they trust. Momentum built steadily throughout the year, delivering 1.8 % growth in the second half and securing a full-year volume growth of 0.2 %.

“Our brands proved their worth this year with impressive revenue numbers. The strong volume recovery we saw in the second half confirms that our brands remain highly relevant. To end the year with positive volume growth, alongside such strong revenue performance, is a testament to the robustness of our portfolio,” says Peder Tuborgh.

Sustainability efficiency improves

In operations, Arla reduced Scope 1 and 2 emissions by a further 5.6 percentage points, reaching a cumulative reduction of 43.6 % compared to the 2015 baseline. This milestone was driven by continued energy efficiency measures and the progressive shift to green power, culminating in Arla reaching 100 % renewable electricity at all European production sites by the end of the year.

On farm, the data shows that owners are farming more efficiently. The average FarmAhead™ incentive points rose from 53 to 55, and the emissions intensity per kilo of milk decreased by 0.4 %p. This result continues to build on the progress made over the last five years, meaning Arla has now achieved a total reduction of 9.9 % per kg of milk produced compared to the 2020 baseline.

While efficiency gains were achieved per kilo of milk, the significant surge in milk volumes received by the cooperative led to a small increase in scope 3 FLAG emissions of 4.4 %p.

Outlook 2026: Lower prices expected to drive brand growth

Looking ahead, Arla anticipates that the volatile market conditions from late 2025 will persist into the new year. The supply surge seen in the fourth quarter is expected to continue impacting the market in early 2026, putting pressure on global dairy price levels. However, Arla anticipates a partial normalisation later in the year as supply and demand dynamics adjust.

While lower price levels will impact total revenue, they are also expected to support consumer purchasing power. Consequently, Arla forecasts a return to stronger growth for its strategic brands, with branded volume-driven revenue growth expected in the range of 1.0 to 3.0 % . Group revenue for 2026 is expected to be in the range of EUR 13.3-14.1 billion, reflecting the lower market prices compared to the highs of early 2025. Net profit share is expected to remain within the target range of 2.8 to 3.2 %.

Arla will continue its disciplined focus on costs, targeting efficiency gains (Fund our Future) of EUR 90-110 million.

“We enter 2026 fully prepared for the market conditions ahead. The pressure from high milk volumes will characterise the first part of the year, but we also see the opportunities this brings. As prices adjust, we expect consumers to return to the dairy aisle with renewed strength, driving growth for our strategic brands. We are ready to capture that demand while maintaining a strict focus on efficiency to ensure we deliver on our targets,” says Peder Tuborgh.

Note: The full-year 2026 guidance does not include the potential merger with DMK Group. Updated guidance will be provided if the merger is approved.