ANNUAL

Our report is our detailed annual  
account of the company’s financial and 
sustainability performance, risks, strat-
egy and governance. It includes our con-
solidated financial statements and our 
externally audited ESG figures. Also, it 
describes how we are working towards 
reaching our science-based and other 
environmental targets as well as our 
health and social ambitions. From 2022, 
we disclose our climate risks and oppor-
tunities according to TCFD’s recommen-
dation. This report serves as our annual 
communication on our progress to-
wards the UN Social Development Goals, 
and the statutory statement on CSR in 
accordance with section 99a and 99b of 
the Danish Financial Statements Act. 
See our statutory reporting on §99a on 
page 9 (business model), page 29-32 
(climate-related risks), page 33-65 (poli-
cies, actions, management systems and 
expectations for future), page 128-145 
(ESG key figures). See our statutory re-
porting on §99b on page 137 and 140. 
www.arla.com 
 
 
 
 VEJLSKOVGAARD FARM INODDER, DENMARK
 
Claus Fenger, one of our 8,492 farmer 
owners, is at the forefront of transform-
ing dairy production to be more sustain-
able and climate-friendly. His 500  
Holstein cows are closely monitored for 
all aspects of their health, well-being 
and efficiency. He milks them with milk-
ing robots, follows their feeding patterns 
with 3D cameras and measures their in-
dividual methane emissions with a spe-
cial hose. Together with researchers 
from Aarhus University, he uses all the 
data he collects to find the cows who 
are the most climate-efficient and breed 
them. In the future, all Arla owners will 
be able to benefit from the result of this 
research, as they work on becoming 
more and more sustainable. 
 
 HOW WE CREATE VALUEPERFORMANCE REVIEWRISKS & OPPORTUNITIESENVIRONMENTAL AMBITION AND PROGRESSSOCIAL AMBITION AND PROGRESSCORPORATE GOVERNANCECONSOLIDATED FINANCIAL STATEMENTSESG STATEMENTSANNUAL REPORT 2022
 
On the frontpage  
Claus Fenger

HOW WE CREATE THE FUTUREOF DAIRY
 
Message from the Chairman 
4 
Message from our CEO 
5 
2022 performance at a glance 
6 
Five-year overview 
7 
Highlights 2022 
8 
Business model 
9 
Future 26 – our strategy 
10 PERFORMANCE REVIEW
 
Executive summary 
12 
External market overview 
13 
Performance overview 
15 
2023 Outlook 
25 
Strategy outlook 
26 RISKS AND OPPORTUNITIES
 
Risk Governance 
28 
Arla’s risk position 
29 ENVIRONMENTAL AMBITION AND PROGRESS
 
Progress overview 
34 
Sustainable dairy farming 
36 
Sustainable production 
and logistics 
39 
Sustainable packaging 
42 
Responsible sourcing 
44 SOCIAL AMBITIONS ANDPROGRESS
 
Progress overview 
46 
Health and inspiration 
47 
Diversity and inclusion 
51 
Employee well-being 
52 
Human rights 
53 
International dairy development 
55 CORPORATE GOVERNANCE
 
Governance framework 
57 
Board of directors 
59 
Excutive management team 
61 
Management remuneration 
63 
Transparent tax practices 
64 
Internal controls and 
compliance 
65 CONSOLIDATED FINANCIAL STATEMENTS
 
Table of contents 
67 
Primary financial statements 
68 
Notes 
76 
Statement by Board of Directors 
and Executive Board 
125 
Independent auditor’s report 
126 ESG STATEMENTS
 
Environmental data 
129 
Social data 
136 
Governance data 
140 
Five-year overview 
142 
Climate related disclosures 
(TCFD) 
143 
UN Sustainable Development 
Goals 
144 
UN Global Compact 
145 
Independent auditor’s 
reasonable assurance report 
146 
Glossary 
147 
Corporate calendar 
149 
 
 
 TABLE OF CONTENTS

THE FUTURE             OF DAIRY
 
Arla® Skyr is a traditional Icelandic yoghurt that is 
thick, creamy and high in protein. Perfect for those 
looking for a healthier yoghurt option with lower 
sugar and fat content

or Arla and our 8,492 farmer 
owners, 2022 was a year domi-
nated by inflation and uncer-
tainty, yet despite this challeng-
ing environment, we delivered 
solid results while taking important 
strides forward on sustainability.  
As well as causing humanitarian tragedy, 
Russia’s invasion of Ukraine exacerbated 
the existing pressure on global markets 
and supply chains. This created a highly 
inflationary and volatile environment for 
both company and farmers. 
Thanks to strong execution by employ-
ees and management, Arla once again 
proved agile in navigating these difficult 
conditions. Coupled with a decline in 
global milk production which drove 
commodity prices upwards, this enabled 
a higher return to our farmer owners.  
The average prepaid milk price in 2022 
was 52.0 EUR-cent/kg, 40.5 per cent 
higher than the previous year. The finan-
cial performance allowed for supple-
mentary payment of EUR 269 million, 
corresponding to 2.2 EUR-cent per kg 
owner milk, above the level set in Arla’s 
retainment policy. As EUR 61 million 
was paid out in September, the remain-
ing amount of EUR 208 million will be 
paid out in March. 
The higher returns helped alleviate pres-
sure on farmers, who particularly in the 
first half of the year faced soaring pro-
duction cost as prices on feed, fertilizer 
and energy reached unprecedented  
levels. It also supported them in making 
investments required to continue their 
transition to more sustainable dairy pro-
duction and meet our on-farm target of 
reducing CO2e emissions by 30 per cent 
by 2030. 
As a cooperative, we took a historic step 
in this transition in 2022 with the deci-
sion to introduce a sustainability incen-
tive for our farmers. Showing our ambi-
tion to be at the forefront of sustainable 
dairy farming, it ties for the first time the 
individual farmers’ milk price to sustain-
ability activities and performance. When 
the incentive comes into effect in 2023, 
the point-based system will reward past 
sustainability actions as well as encour-
age future improvements.  
Arla’s Board of Directors was closely in-
volved in the development of the model, 
and the proposal was later discussed 
broadly in Arla’s farmer community. The 
engagement and support our owners 
have shown in financially incentivising 
sustainability action, even at a time of 
great uncertainty, is a testament to our 
commitment to set the standard in our 
sector.  
The incentive model builds on the same 
data-led and scientific approach to con-
tinuous improvements that is well  
established through our Climate Check 
programme. The 2022 results show  
average CO2e emissions on owner milk 
reduced to 1.12 per kg of milk from 1.15 
the year before – displaying the effec-
tiveness of our approach and determina-
tion to continue to be a leader in value 
creation and sustainability. 
 
 CONTINUING OUR SUSTAINABILITY TRANSITION IN A VOLATILEYEARFJAN TOFT NØRGAARD
Chairman of the 
Board of Directors

ajor global disruptions with 
widespread ramifications 
across societies and econ-
omies characterised  yet 
another year. Inflation, 
which was further fuelled by Russia’s in-
vasion of Ukraine and the ensuing en-
ergy crisis, made the year even more dif-
ficult for Arla to navigate than the previ-
ous two. However, with agile and firm ex-
ecution we managed the volatile envi-
ronment, securing consecutive price in-
creases across our four business seg-
ments throughout the year.  
Our performance price was 38.8 per 
cent above the 2021 level, up from 39.7 
EUR-cent to 55.1 EUR-cent per kg. Our 
revenue reached EUR 13.8 billion, up 
from EUR 11.2 billion in 2021, while the 
profit share was 2.8 per cent, within our 
target range. 
The extraordinarily high returns 
throughout the year supported our own-
ers in a year dominated by extraordinary 
feed, fertiliser and energy costs.  
As the cost-of-living crisis gained mo-
mentum, we saw a significant down-
wards trend in consumer spending, par-
ticularly in Europe and Africa. People 
continued to trade down to cheaper 
products and consume less. By the end 
of 2022, the European dairy category 
consumption in retail was down by 
around 4-5 per cent, compared to 2021. 
As a result, our branded volumes across 
our Europe and International segments 
declined by 4.2 and 1.2 per cent, respec-
tively. Still, volumes remained above 
2019 level as our brands were able to 
sustain parts of the exceptional strong 
growth created in two years of lock-
downs.  
Arla Foods Ingredients continued to de-
liver strong performance and Global In-
dustry Sales grew, strongly driven by 
high commodity prices. 
Even in volatile times, our commitment 
to lead sustainable dairy stands strong. A 
monumental proof point was our Board 
of Directors’ historic decision to intro-
duce a new Sustainability Incentive 
model. Up to 4 EUR-cent1 per kg milk, 
corresponding to an annual EUR 500 
million will be allocated to motivate and 
reward our members’ individual climate 
and biodiversity actions. 
We are very pleased to see that Arla 
farmers have resumed their reductions 
after a flat development in the past four 
years. With the launch of the Sustainabil-
ity Incentive in 2023, we aim to acceler-
ate our scope 3 reductions in the years 
to come, and look forward to working 
with our customers on offering more 
sustainable dairy products. 
In scope 1+2, we achieved further  
reductions, bringing us to 29 per cent 
on our 63 per cent reduction journey  
towards 2030. 
2023 will undoubtedly be another diffi-
cult year to navigate with the challeng-
ing economic environment globally and 
the ongoing effects of the war in 
Ukraine continuing to impact the energy 
market and supply chains.   
We expect the supply and demand bal-
ance to be restored on the dairy market 
over the course of 2023. Commodity 
prices, on the other hand, already to-
wards the end of 2022 started to sharply 
decline. Our expectation for 2023 is  
further decrease on the commodity 
markets. 
The cost-of-living crisis will continue to 
challenge brands across categories. We 
have therefore made a slight adjust-
ment to our expectations regarding the 
pace of our branded growth as well as 
our efficiency target.  
We remain committed to delivering 
within our profit target range of 2.8-
3.2 per cent, and the direction in 
our Future26 strategy and our 
appetite for leading sustaina-
ble dairy stand strong. 
 
 FIRM NAVIGATION THROUGH THE INFLATION TO SECURE A COMPETITIVE MILK PRICE M
1  Up to 3 EUR-cent/kg of milk is earmarked for distribu-
tion across the Sustainability Incentive Model levers, 
and farmers will receive 1 EUR-cent/kg of milk for sub-
mitting their Climate Check data. PEDER TUBORGH
CEO of Arla

2022 PERFORMANCE AT A GLANCEHOW WE CREATE VALUEPERFORMANCE REVIEWRISKS & OPPORTUNITIESENVIRONMENTAL AMBITION AND PROGRESSSOCIAL AMBITION AND PROGRESSCORPORATE GOVERNANCECONSOLIDATED FINANCIAL STATEMENTSESG STATEMENTSANNUAL REPORT 20226
 
Competitive milk price 
 
Scale to grow 
 
Lead sustainable dairy 
 
 
 -3.2% STRATEGIC BRANDED VOLUME DRIVEN REVENUE GROWTH
 
 
 4%pSCOPE 1+2 EMISSIONSREDUCTION IN 2022PERCENTAGE POINTS
 
 
 2%pSCOPE 3 EMISSIONS1REDUCTION IN 2022PERCENTAGE POINTS
 
 
36.5
39.7
2020
2021
2022
55.1
7.7%
4.5%
-3.2%
2020
2021
2022
2015
2022
2030-63% GOAL
2021
25% 29%
2015
2022
2030-30% GOAL
2021
7%
9%13.8 REVENUEBILLION EUR
 
Read more 
about our strategy 
on page 10 and 26. 
 Within guidance 
  Outside guidance 
 
1 Per kg of milk and whey. 
2 Based on profit allocated to owners of  
Arla Foods amba. 
3 Between 2021 and 2022 we altered the methods of 
creating efficiencies, due to the start of our new strat-
egy period. With the new strategy we launched our new 
efficiency programme, Fund our Future. 2022 numbers 
are therefore not fully comparable with historic num-
bers, related to our previous efficiency programme, 
Calcium.  
10.6
11.2
13.8
2020
2021
2022
3.2%
3.0%
2.8%
2020
2021
2022
143
155
101
2020
2021
2022
13.9
13.6
13.5
2020
2021
2022
2.7
2.6
3.0
2020
2021
2022

FIVE-YEAR OVERVIEW
Financial key figures  
  
  
  
  
  
(EURm) 
2022 
2021 
2020 
2019 
2018 
Performance price 
  
  
  
  
  
EUR-cent/kg owner milk 
 55.1  
 39.7  
 36.5  
 36.3  
 36.0  
 
 
 
 
 
 
Income statement 
  
  
  
  
  
Revenue 
 13,793  
 11,202  
 10,644  
 10,527  
 10,425  
EBITDA 
 1,001  
  948  
  909  
  837  
  767  
EBIT 
  529  
  468  
  458  
  406  
  404  
Net financials 
-80  
-61  
-72  
-59  
-62  
Profit for the year 
  400  
  346  
  352  
  323  
  301  
 
 
 
 
 
 
Profit appropriation for the year 
  
  
  
  
  
Individual capital 
  39  
  42  
  41  
  61  
 - 
Common capital 
  74  
  83  
  81  
  123  
 - 
Supplementary payment 
  269  
  207  
  223  
  127  
  290  
 
 
 
 
 
 
Balance sheet 
  
  
  
  
  
Total assets 
 8,746  
 7,813  
 7,331  
 7,106  
 6,635  
Non-current assets 
 4,611  
 4,668  
 4,413  
 4,243  
 3,697  
Current assets 
 4,135  
 3,145  
 2,918  
 2,863  
 2,938  
Equity 
 3,168  
 2,910  
 2,639  
 2,494  
 2,519  
Non-current liabilities 
 2,915  
 2,446  
 2,296  
 2,304  
 1,694  
Current liabilities 
 2,663  
 2,457  
 2,396  
 2,308  
 2,422  
Net interest-bearing debt including pension  
liabilities 
 2,986  
 2,466  
 2,427  
 2,362  
 1,867  
Net working capital 
 1,442  
  810  
  679  
  823  
  894  
 
 
 
 
 
 
Cash flows 
  
  
  
  
  
Cash flow from operating activities 
  184  
  780  
  731  
  773  
  649  
Cash flow from investing activities 
-443  
-482  
-488  
-571  
-432  
Free cash flow 
-259  
  298  
  243  
  202  
  217  
Cash flow from financing activities 
  269  
-330  
-293  
-136  
-191  
Investments in property, plant and equipment 
-373  
-452  
-478  
-425  
-383  
Purchase of enterprises 
 - 
 - 
 - 
-168  
-51  
Financial key figures  
  
  
  
  
  
(EURm) 
2022 
2021 
2020 
2019 
2018 
Financial ratios 
  
  
  
  
  
Profit share 
2.8% 
3.0% 
3.2% 
3.0% 
2.8% 
EBIT margin 
3.8% 
4.2% 
4.3% 
3.9% 
3.9% 
Leverage 
  3.0  
  2.6  
  2.7  
  2.8  
  2.4  
Interest cover 
19.6  
23.7  
16.8  
12.0  
14.9  
Equity ratio 
35% 
37% 
35% 
34% 
37% 
 
 
 
 
 
 
Inflow of raw milk (mkg) 
  
  
  
  
  
Inflow from owners in Denmark 
 4,945  
 4,952  
 5,011  
 4,988  
 4,986  
Inflow from owners in the UK 
 3,305  
 3,306  
 3,303  
 3,261  
 3,227  
Inflow from owners in Sweden 
 1,822  
 1,838  
 1,844  
 1,806  
 1,844  
Inflow from owners in Germany 
 1,663  
 1,681  
 1,731  
 1,717  
 1,779  
Inflow from owners in Netherlands, Belgium and 
Luxembourg 
 759  
 741  
 749  
 731  
 732  
Inflow from others 
 961  
 1,128  
 1,231  
 1,323  
 1,457  
Total inflow of raw milk 
 13,455  
 13,646  
 13,869  
 13,826  
 14,025  
 
 
 
 
 
 
Number of owners 
  
  
  
  
  
Owners in Sweden 
 2,108  
 2,236  
 2,374  
 2,497  
 2,630  
Owners in Denmark 
 2,105  
 2,274  
 2,357  
 2,436  
 2,593  
Owners in Germany 
 1,429  
 1,497  
 1,576  
 1,731  
 1,841  
Owners in the UK 
 2,053  
 2,127  
 2,241  
 2,190  
 2,289  
Owners in Netherlands, Belgium and Luxem-
bourg 
 797  
 822  
 858  
 905  
 966  
Total number of owners 
 8,492  
 8,956  
 9,406  
 9,759  
 10,319  
 
 
 
 
 
 
Environmental, social and governance 
  
  
  
  
  
Progress towards 2030 CO₂e reduction (scope 1 
and 2) market-based 
-29% 
-25% 
-24% 
-12% 
-4% 
CO₂e scope 3 from owner milk (kg) 
1.12 
1.15 
1.15 
1.15 
1.14 
CO₂e scope 3 per kg of milk and whey (kg) 
1.18 
1.20 
1.21 
1.21 
1.20 
Progress towards 2030 CO₂e reduction target 
(scope 3 per kg milk and whey) 
-9% 
-7% 
-7% 
-7% 
-7% 
Average number of full-time employees 
 20,907  
 20,617  
 20,020  
 19,174  
 19,190  
Gender diversity board 
25% 
13% 
13% 
13% 
12%

ARLA PROTEIN GROWTH IN CHALLENGING MARKET CONDITIONS 
Natural, high in protein and low in 
sugar and fat, Arla Protein is a success 
story in 2022. Arla Protein have not 
targeted the professional or hardcore 
gym goers but all consumers living an 
active lifestyle and championing all 
shapes, sizes and backgrounds. By  
focusing on the fuelling power of pro-
tein alongside delicious products, 
such as milk-based beverages and 
puddings, Arla Protein has resonated 
with consumers and delivered 48.9 
per cent volume growth in 2022. 
 
 
 
 HIGHLIGHTS 2022HOW WE CREATE VALUEPERFORMANCE REVIEWRISKS & OPPORTUNITIESENVIRONMENTAL AMBITION AND PROGRESSSOCIAL AMBITION AND PROGRESSCORPORATE GOVERNANCECONSOLIDATED FINANCIAL STATEMENTSESG STATEMENTSANNUAL REPORT 202282022 WAS DOMINATED BY INFLATION, UNCERTAINTY AND TRAGIC GEOPOLITICAL EVENTS, SUCH AS THE WAR IN UKRAINE. WE DID NOT STAND STILL IN THE STORM, BUT WORKED HARD TO ADJUST, AND TO KEEP UP THE PACE OF OUR SUSTAINABLE TRANSFORMATION.ARLA INCREASES THE MILK PRICE TO FARMERS THROUGHOUT 2022
In an exceptionally difficult year for 
dairy farming, we managed to increase 
the milk price paid for our farmer own-
ers for 10 months in 2022. The average 
prepaid milk price was 52.0 EUR-
cent/kg of milk in 2022 compared to 
37.0 EURcent/ kg in 2021. Our perfor-
mance price, which measures the value 
we add to our owners’ milk, increased 
to 55.1. EUR-cent/kg of milk compared 
to 39.7 EUR-cent/kg in 2021. The un-
precedented increases were primarily 
driven by price increases both in com-
modities and branded products. In the 
mean-time, production costs on farms 
also significantly increased, putting our 
farmers’ margins under pressure.  
52.0 
EUR-cent/kg 
We introduced a sustainability incentive 
to our farmer owners to help fund and 
motivate actions required to hit the 
2030 emission reduction target on 
farm. We earmarked up to 3 EUR-cent 
per kg of milk for present and future 
sustainability activities in addition to 
the existing 1 EUR-cent for submitting 
Climate Check data. Based on our cur-
rent milk volume, this corresponds to 
EUR 500 million annually. The model is 
a point-based system, in which the 
farmers can collect points based on 
their activities on the model’s 19 differ-
ent levers. 
 ARLA SIGNS 10-YEAR WIND POWER PURCHASE AGREEMENT 
In January, Arla presented an ambitious 
target of using 100 per cent green elec-
tricity in Europe by the end of 2025. By 
September, we secured to reach this 
target in Denmark with, amongst other 
things, a 10-year power purchase 
agreement signed. Over the course of 
the 10-year agreement, the green en-
ergy from the turbines will provide an 
annual saving of 58,000 tonnes of 
CO2e, which corresponds to 8 per cent 
of our total CO2e footprint for scope 
1+2.  
In 2022, we officially inaugurated a new 
production plant at Pronsfeld dairy in 
Germany. The expansion is our biggest 
dairy investment to date and a key 
driver to meet the growing internation-
al demand for sustainable, affordable 
and nutritious dairy products.  
Arla invested EUR 190 million in the 
expansion of the Pronsfeld dairy to in-
crease the production of primarily milk 
powder. The expansion will support the 
expected annual branded volume 
growth in Arla’s international business, 
in line with our five-year strategy called 
Future26.  
In the past few 
years, we have 
accelerated our 
sustainability  
action to reach 
our target of 
30%1 scope 3 
CO2e emissions 
reduction by 
2030. In 2022, we 
started to see the 
results as we 
managed to 
lower scope 3 
emissions by  
2 percentage 
points in the year 
and in total 9% 
compared to our 
2015 baseline. 
Average prepaid milk price 
Read more on page 15. 
Read more on page 35. 
Read more on page 41. 
Read more on page 16. 
1 Per kg of milk and whey

Farmers and cows 
We have 8,492 farmer owners, who are 
responsible for over 1.5 million cows, 
and who are thriving to produce dairy in 
a sustainable way while protecting the 
welfare of the cows and nature around 
them. Our farmers are now also finan-
cially incentivised to reduce their  
climate footprint. 
Read more on page 35. 
 
Milk collection 
We collect around 13.5 billion kg of raw 
milk each year, mainly from our owners 
in seven countries. We add value to our 
owners’ milk through innovation, brand-
ing and marketing. The profit is shared 
among the owners though the milk  
payment. 
Production & Packaging 
We process milk at our 60 sites. We pro-
duce 6.8 billion kg of nutritious dairy 
products each year. Our production and 
packaging sites also create jobs across 
several countries in the world. We pro-
vide our workers with safe working con-
ditions and fair pay. Our sites reduced 
their emissions each year since 2015, 
and our branded packaging is 93 per 
cent designed for recycling.  
Read more on page 43. 
Customers 
We sell our products in 144 countries to 
hundreds of different customers, mostly 
supermarket chains. Good cooperation 
and working towards the common goal 
of providing excellent service to the 
consumers while lowering the environ-
mental footprint of shopping is key to 
our success. 
Consumers 
We provide nutrition for millions of  
people. Our health strategy focuses on 
healthy innovations, inspiring good food 
habits and improving access to afforda-
ble nutrition for low-income consumers. 
 
 HOW WE CREATE VALUE OUR BUSINESS MODELFARMERS& COWSMILK COLLECTIONPRODUCTION & PACKAGING
Renewable Energy 
Protecting Nature 
Regenerative Agriculture 
Innovation 
Nutrients for Society

Creating the future of dairy  
Dairy is at a defining moment. Globally, 
the demand for dairy is increasing, but 
it’s also changing. Food choices are be-
ing shaped by the desire for sustainabil-
ity, while there also needs to be a step 
change to halt poor diets and malnutri-
tion. Our food system requires re-think-
ing and with our Future26 strategy we 
aim to secure our place as part of the  
solution. 
2026 Our new strategy aims at provid-
ing answers on how to ensure a healthy, 
sustainable growth for our business. In 
the first year of our Future26 strategy 
we made good progress on our aims. 
Significant steps on our sustainability 
journey included accelerating our transi-
tion to green electricity in our European 
production sites and the development 
of our Sustainability Incentive Model. On 
value creation, we delivered strong per-
formance in a number of our priority  
growth markets, as well as in our food 
service and ingredients businesses (AFI). 
Branded volumes, however, were im-
pacted, particularly in Europe, by the  
severity of the cost-of-living crisis. 
2030 Together with our 8,492 farmer 
owners, we committed ourselves to 
contribute to the Paris agreement’s tar-
get of limiting global warming to 1.5°C.  
Our 2030 emission reduction targets 
are approved by the Science Based  
Target initiative as aligned with climate 
science. Read more on page 34. 
2050 Our ambition is becoming  
carbon net zero across our value chain. 
 
 FUTURE 26–OUR STRATEGY BRINGING HEALTH AND INSPIRATION TO THE WORLD, NATURALLY
Peer group index 
Branded 
We aspire to have a 
competitive milk price 
compared to our peers. 
CO₂e reduction SBTiNET ZERO
volume growth 
We aim to create brands and 
products that bring value to 
our consumers’ life through 
health and nutrition. 
We commit to the 1.5°C 
ambition and to becoming 
the most ambitious global 
dairy cooperative. 
We fund our future by 
having an end-to-end focus 
on becoming both more 
eﬃcient and more eﬀective 
in the way we work. 
Eﬃciencies 
Investments 
Future26 steps up investments 
to support owners & value creation. STRONGER PLANET & STRONGER PEOPLE

ARLA®PROTEIN
 
Despite price increases, our sub-brand  
Arla® Protein experienced exceptional  
volume growth of 48.9 per cent in 2022. 
 
 
 
 
 
 
 PERFORMANCE          REVIEW

nflation and volatility throughout 
the dairy supply chain dominated 
2022. Stagnating global milk sup-
ply coupled with steady demand 
drove prices to record heights. The 
war in Ukraine accelerated the inflation-
ary pressures from the second quarter 
and added significant volatility and un-
certainty to the markets, fuelling further 
cost increases both on farm, in produc-
tion and in logistics. In the meantime, 
consumer habits returned to the pre-
pandemic normal, with less in-home 
consumption, suppressing our branded 
volumes in retail, but accelerating 
branded volume growth in food service.  
We navigated the challenges with firm 
execution and agile adaptation to 
changing market realities. As a result, 
our average pre-paid milk price 
increased by 40.5 per cent compared to 
2021, from 37.0 EUR-cent/kg to 52.0 
EUR-cent/kg – much needed support 
for our farmers in times of soaring feed, 
fertiliser and energy costs. Our revenue 
reached EUR 13.8 billion, up from  
EUR 11.2 billion in 2021. The increase 
was primarily driven by prices. 
In 2022, earnings were driven by un-
precedented high margins on commod-
ity products which, together with high 
production costs, put retail and food ser-
vice margins under pressure. 
In 2022, certain negative economic and 
societal changes started that will deter-
mine the development of our industry in 
the coming years. Economic slowdown, 
and especially decreased purchasing 
power could negatively impact category 
growth in retail 
and also commodity prices. Therefore, 
we expect 2023 and 2024 to be difficult 
years yet again.We are confident that 
the direction we set out in our Future26 
strategy is the right one for us, and we 
are pursuing our strategic aspirations 
with all our efforts. Nevertheless, to  
ensure the success of our strategy we 
need to be able to adapt flexibly to  
external trends. Therefore, we read-
justed our strategic expectations regard-
ing the pace of our branded volume 
growth and efficiencies; however, we  
expect the growth pace to pick back  
up again from 2024. Read more on  
page 25. 
 
 
 AGILE ADAPTION TO NAVIGATE IN A VOLATILE MARKETHOW WE CREATE VALUEPERFORMANCE REVIEWRISKS & OPPORTUNITIESENVIRONMENTAL AMBITION AND PROGRESSSOCIAL AMBITION AND PROGRESSCORPORATE GOVERNANCECONSOLIDATED FINANCIAL STATEMENTSESG STATEMENTSANNUAL REPORT 202212
55.1 PERFORMANCE PRICEEUR-CENT/KG
 
13.8 REVENUEEURb
 
-3.2% STRATEGIC BRANDED VOLUME-DRIVEN REVENUE GROWTH
 
 
4%p  SCOPE 1+2 EMISSIONSREDUCTION IN 2022
 
2%p  SCOPE 3 EMISSIONSREDUCTION IN 2022
 
36.4
36.3
36.5
39.7
55.1
2018
2019
2020
2021
2022
10.4
10.5
10.6
11.2
13.8
2018
2019
2020
2021
2022
3.1%
5.1%
7.7%
4.5%
-3.2%
2018
2019
2020
2021
2022
2015
2022
2030-63% GOAL
202125%29%
2015
2022
2030-30% GOAL
20217%9%TORBEN DAHLNYHOLM
CFO of Arla

Several trends and factors 
exacerbated inflation 
The war in Ukraine, rising energy and 
food prices, supply-demand imbalances 
on the back of Covid-19 resulted in the 
highest inflation rates in decades. Covid-
19 restrictions were lifted in most of the 
world; however, the Chinese economy 
still suffered under the country's strict 
"zero-Covid" policy, which was lifted in 
early 2023. 
Europe, where inflation was mostly 
driven by challenged supply chains and 
high energy prices due to the war in 
Ukraine, was hit hardest by raising 
prices. On markets outside Europe, infla-
tion was more driven by the still rising 
demand on the back of the economic 
rebound after Covid-19, and supply 
struggling to cover this increased de-
mand. The effect of these trends on 
prices was less dramatic. 
Europe was hit hardest  
by inflation 
In Europe, as the war was causing tragic 
suffering and destruction in Ukraine, it 
also had grave economic reverberations 
across the whole region. The EU is 
among the economies most exposed to 
the war due to its geographical 
proximity to Ukraine and heavy reliance 
on imports of fossil fuels from Russia 
and Ukrainian agricultural products. 
Sanctions to halt Russian aggression 
caused a sharp rise in energy prices, 
which exacerbated inflation, already on 
an upward trend due to heightened eco-
nomic activity after Covid-19 restrictions 
were lifted.  
Inflation in the euro zone increased by 
9.2 per cent in 2022. However, the in-
crease started to slow down towards the 
end of the year, as a result of energy 
markets calming down when gas re-
serves across Europe proved to be 
sufficient to keep production going. The 
increase in food and agricultural product 
prices was only somewhat slowed by the 
opening of the safe grain corridor in the 
Black Sea, and the record high yields 
over the summer. 
Production costs at European dairy  
sites were also affected by inflation and 
shortages, driving up prices for packag-
ing and ingredients, but especially  
energy (on average natural gas prices  
increased by 143 per cent compared  
to 2021). 
Economic slowdown on  
the horizon 
To slow down inflation, central banks 
across the globe raised interest rates 
during 2022. These developments led 
to a slowdown of economic activity, ac-
celerating towards the end of the year. 
Consequently, household purchasing 
power declined in economies globally. 
Global GDP growth contracted from  
6.0 per cent in 2021 to 3.4 per cent 
in 2022. 
Inflation impacted demand  
for premium food products 
Inflation hit consumers with a lag com-
pared to businesses directly exposed to 
the effect of inflation, therefore in the 
first three quarters of 2022 grocery 
shopping budgets did not shrink signifi-
cantly. However, more price-sensitive 
buyers started to change their shopping 
habits, and traded down to cheaper 
products from the second half of the 
year. This trend accelerated towards the 
end of the year.  
The slowly materialising effects of infla-
tion in the retail market were coupled 
with the normalisation of consumption 
in Europe after Covid-19, leading to a 
year-on-year decline of around 4-5 per 
cent in dairy consumption in retail. But-
ter and spreadables, which were in high 
demand during the home-cooking trend 
of the Covid-19 pandemic, were hit 
hardest and declined by 7.0 per cent 
compared to 2021. 
On the flip side, the food service seg-
ment bounced back as consumers once 
again started to spend on eating out. As 
a result, consumption approximated 
pre-pandemic levels in 2022, with a 
slight slowdown in the last quarter. 
 
 EXTERNAL MARKET OVERVIEWAS A GLOBAL BUSINESS, ARLA IS IMPACTED BY THE VOLATILITY OF THEEXTERNAL MARKET. BELOW WE SUMMARISE HOW EXTERNAL FORCES SHAPED THE MARKET WE OPERATE IN.
9.2% 
Average inflation 
in the euro zone  
2021: 5.0% 
Source: Eurostat

Stagnating supply drove up 
dairy commodity prices 
While demand for dairy products in gen-
eral remained firm globally throughout 
most of 2022, major dairy producing re-
gions across Europe, Oceania and South 
America were struggling with high input 
costs, poor weather and margin ero-
sions, resulting in stagnating milk sup-
ply. 
As supply did not grow as expected com-
pared to 2021, commodity prices 
steeply increased during the first half of 
2022, the trend slowly turning back dur-
ing the second half, as demand subdued 
and we saw the first signs of production 
uplift. In Europe, gouda prices increased  
by 47.2 per cent and SMP prices in-
creased by 37.5 per cent compared to 
2021. 
Significantly increased farm 
and production costs 
All key milk production inputs – feed, 
fertilizer, fuel and energy – saw record 
high prices in 2022, putting pressure on 
farmers' margins. Prices peaked during 
the third quarter and began to fall 
slightly as Russia granted safe passage 
to agricultural products from Ukraine 
through the Black Sea. However, uncer-
tainty around access to agricultural 
products and the risk of energy short-
ages or further price increases remained 
high. 
Dairy farmers across the globe are also 
facing growing uncertainty about poten-
tial climate-related regulations targeting 
emissions from agricultural activities. 
Many farmers, especially in Europe, have 
proactively already begun their sustaina-
ble transformation, which further adds 
to the growing cost base on farms, as 
sustainability initiatives, although creat-
ing financial efficiencies in the long run, 
come with investment costs. 
Farmgate milk prices 
compensated for higher costs 
Driven by the supply and demand imbal-
ance in dairy, farmgate milk prices in-
creased significantly across all major 
dairy producing regions during 2022. 
In the EU-27, average farmgate milk 
prices gained 40.2 per cent compared 
to 2021. Higher milk prices helped to 
offset cost increases for farmers, and led 
to a slow uplift in milk supply towards 
the end of the year.  
From an Arla point of view, total milk de-
creased, from 13.6 to 13.5 billion kg. 
The decrease came from both owner 
and contract milk. The largest decrease, 
14.8 per cent, was seen in non-owner 
milk volumes, driven by declining intake 
in the UK and the Netherlands. From our 
owner countries, milk volumes declined 
the most in Germany, by 1.1 per cent, 
and in Sweden, by 0.8 per cent.  
 
Natural gas and electricity prices 
EUR per MWh 
 
Source: Nord Pool Group 
Commodity prices 
(EUR-cent/kg, Milk Utilisation Equivalent) 
 
Source: GDT 
 -
 100
 200
 300
 400
2019
2020
2021
2022
Electricity
Natural Gas
20
30
40
50
60
70
2018
2019
2020
2021
2022
Gouda
SMP

Significant milk price increase 
driven by commodity prices and 
firm business execution 
Arla's average pre-paid milk price in-
creased to 52.0 EUR-cent/kg in 2022 
compared to 37.0 EUR-cent/kg last 
year, which constitutes a 40.5 per cent 
increase. Our average performance 
price, which measures the value Arla 
adds to each kg of our owner's milk, was 
55.1 EUR-cent/kg, a 38.8 per cent in-
crease compared to 2021 (from 39.7 
EUR-cent/kg).  
 
These unprecedented increases were 
mainly driven by the commodity price 
rallies and firm execution of price 
increases across channels to regain 
margins.  
Price increases were necessary to com-
pensate our farmer owners for their 
soaring production costs and ensure 
that they can invest in a sustainable 
transformation. 
 
Our operational costs excluding raw milk 
also increased, from EUR 5,599 million 
in 2021 to EUR 6,175 million, driven by 
inflation in energy prices, ingredients 
and packaging. 
 
Our transformation and efficiency pro-
gramme, Fund our Future, also contrib-
uted to the performance price, with EUR 
101 million net savings.  
 
Revenue growth driven by 
prices 
During 2022, revenue increased by 23 
per cent to EUR 13.8 billion compared 
to EUR 11.2 billion in 2021, with much 
of the increase occurring in the second 
half of the year. Revenue growth was al-
most exclusively driven by increased 
prices. Low supply and steady demand 
drove up commodity prices, while retail 
price increases were driven by inflation 
and increased production costs. 
  
Prices contributed positively to the reve-
nue increase by EUR 2,713 million. 
Slightly decreasing branded volumes 
impacted revenue negatively by EUR 
281 million, while the effect from cur-
rencies contributed positively by EUR 
159 million.  
 
Market conditions put pressure 
on retail margins 
In the past few years of nearly constant 
crisis management, Arla showed that 
our diverse and balanced portfolio 
makes us ready to navigate a volatile 
market. Whereas during the Covid-19 
pandemic consumption of branded 
products increased significantly fuelling 
our branded volume growth, in the cur-
rent market situation dairy commodity 
markets are putting pressure on retail 
margins and sales volumes due to 
higher retail prices. This was mainly 
driven by the increased costs related to 
milk, and general global inflation raising 
the cost of energy, ingredients and 
packaging.  
 
Our branded volumes sold through retail 
also came under pressure during 2022, 
declining by 3.2 per cent (see details on 
page 17). Retail volumes declined by 7.4 
per cent, while branded retail revenue 
increased by 11.4 per cent. 
 
2022 was a challenging year for grocery 
e-commerce across Europe; however, 
we managed to grow revenue by 1.5 per 
cent in line with expectations. In the 
meantime, volumes sold through 
e-commerce declined, driven by shop-
pers buying less and some penetration 
losses. 
 
 
 
 PERFORMANCE OVERVIEW
Average pre-paid milk price for our owners 
EUR-cent/kg milk 
  Strategic branded volume-driven revenue growth, indexed to 2018  
(Per cent) 
42.1
59.8
32.8
40.1
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2022
2021
100
105
113
118
115
2018
2019
2020
2021
2022
-3.2%
5.1%
7.7%
4.5%

Our food service channel 
bounced back after Covid-19 
After more than two years of the Covid-
19 pandemic restricting access to res-
taurants and cafes, our food service 
business was thriving again in the re-
opened eating-out scene. We captured 
business opportunities in a rising market 
through strong delivery, key account 
management and agility. Our food ser-
vice business delivered 9.2 per cent 
branded volume growth compared to 
8.0 per cent in 2021. Revenue grew by 
31.5 per cent. 
Fund our Future savings 
on target 
The volatility of the external environ-
ment, especially the swings in raw milk 
availability put pressure on our 
transformation and efficiency pro-
gramme, Fund our Future. However, we 
reached the expected net savings of 
EUR 101 million, primarily delivered by 
overperformance in commercial effi-
ciencies and international supply chain 
productivity, and a lower marketing 
spend. 
Emission reductions on track 
Our emission reduction programmes 
delivered the expected reductions  
in 2022.  
Our scope 1 and 2 emissions lowered by 
4 percentage points in 2022, and in  
total by 29 per cent compared to our 
2015 baseline. Our site sustainability 
programme offered our 60 sites and  
logistics centres a supplier-driven 
assessment to find out how to prioritise 
and execute some quick wins in 2022, 
such as insulating pipes, replacing and 
upgrading pumps and replacing light 
bulbs with LED lamps. These initiatives 
saved both CO2,e and contributed to 
more efficient energy usage. Read more 
on page 41. 
Our scope 3 emissions were reduced by 
2 percentage points per kg of milk and 
whey, and in total by 9 per cent com-
pared to our 2015 baseline. The reduc-
tion is a result of our farmers consist-
ently accelerating sustainability actions 
on farm. Read more about how our 
farmers reduce their emissions on page 
36. In 2022, we made a bold step to en-
courage even more tangible action on 
farm when we announced our Sustaina-
bility Incentive Model, which rewards 
farmers for their sustainability actions 
across 19 levers with up to 3 EUR-cent/ 
kg of milk. Read more on page 35. 
Net profit within target range 
In 2022, Arla achieved a net profit1 of 
EUR 382 million, or 2.8 per cent of reve-
nue, which is at the bottom end of our 
target range of 2.8-3.2 per cent. Profit 
was driven by unprecedented high mar-
gins on commodity products, which, to-
gether with high production costs, put 
retail and food service margins under 
pressure. 
Other comprehensive income 
impacted by interest rates and 
energy prices 
Other comprehensive income was  
EUR 156 million compared to EUR 171 
million last year. The income of EUR 156 
million consisted of positive value ad-
justments of hedge instruments 
amounting to EUR 225 million, partly 
offset by negative value adjustments on 
net assets measured in foreign curren-
cies (translation effect) amounting to 
EUR 48 million. The increased value of 
our hedge instruments, which secure 
our future interest and energy costs at a 
certain level, was due to significant in-
creases in the general interest level and 
in the market cost for energy. 
Robust financial position 
In 2022, Arla stood strong and we kept 
our robust financial position in a volatile 
market. Our leverage landed at 3.0. Alt-
hough higher than last year (2.6), it is 
still comfortably within our target range 
of 2.8-3.4. This was primarily due to a 
higher level of net interest-bearing debt 
driven by increased funds tied up in net 
working capital, while EBITDA was on the 
same level. 
The increased interest rate level re-
sulted in a higher value of interest swap 
instruments. It also led to lower calcu-
lated headroom for performed goodwill 
impairment tests. With lower headroom, 
our goodwill positions were carefully 
monitored and supporting business 
cases assessed throughout 2022 not 
leading to any impairment. Finally, the 
increased interest rate led to lower pre-
sent value of gross pension liabilities. As 
the majority of our pension liabilities are 
hedged by corresponding pensions as-
sets with similar risk profiles, our net 
pension liabilities landed at the same 
level as last year. 
Cash flow challenged due  
to high net working capital 
Net working capital increased from  
EUR 810 million last year to EUR 1,442 
million, representing an increase of 78 
per cent primarily due to higher milk 
prices for our farmer owners and in-
creased costs especially within produc-
tion (packaging, ingredients, energy), 
largely driven by inflation. 
This increase affected both our operat-
ing cash flow and our net interest-bear-
ing debt negatively. Cash flow from op-
erating activities decreased to EUR 184 
million compared to EUR 780 million in 
2021. Correspondingly, our net interest-
bearing debt increased to EUR 2,986 
million compared to EUR 2,466 million 
in 2021.  
Our biggest recent investment 
projects were finalised 
In 2022, some of our main CAPEX in-
vestment projects from the past years, 
such as the powder tower in Pronsfeld, 
Germany, investments in the production 
facilities in Bahrain and expansion of the 
mozzarella production in Denmark were 
finalised or came close to finalisation. 
Cash flow from investing activities 
amounted to EUR 443 million compared 
to EUR 482 million in 2021. 
We also entered significant agreements 
supporting our green transition. We 
signed several power purchase agree-
ments in our core markets. These 
agreements ensure that we reach our 
goal of running our production exclu-
sively on green energy in Europe  
from 2025.  
Divestment of our Russian 
business 
Due to Russia's invasion of Ukraine in 
February 2022 we decided to divest our 
Russian business, and sold it to local 
management who will continue to run 
the business completely unrelated from 
Arla. We also fully stopped exporting 
products to Russia. 
 
As exports were already much reduced 
to Russia since the 2014 embargo, our 
Russian business contributed EUR 56 
million, or 0.5 per cent, to our revenue 
in 2021. The divestment process led to 
a net loss of EUR 19 million recognised 
within other operating costs. 
 
Financial leverage development 
Target range: 2.8-3.4 
1 Excluding non-controlling interests' share of profit 
2.4
2.8
2.7
2.6
3.0
2018
2019
2020
2021
2022

ollowing two years of exceptional 
strategic branded volume growth in 
retail during the Covid-19 pandemic, our 
volumes declined by 3.2 per cent in 
2022. The key reason for the decline is 
the irregular pace of development in the 
past two years, price increases and gen-
eral inflation. Even in the current diffi-
cult market, where dairy categories de-
clined in general, our brands showed 
their power to generate value. Our 
branded revenue increased by 14.2 per 
cent to EUR 6,294 million in 2022. 
 
 
Arla® brand 
The Arla® brand, our umbrella brand 
with various successful sub-brands cov-
ering multiple categories such as milk, 
yoghurt, cream, powder and cheese was 
generally challenged in 2022. Consum-
ers reacted to higher retail prices by 
buying less and trading down; however, 
after the Covid-19 lockdowns were 
lifted, they started to eat out more, lift-
ing our food service volumes. Branded 
volumes declined by 4.3 per cent com-
pared to 2021; however, we retained 
our value market share in our core mar-
kets. Revenue increased by 10.2 per 
cent to EUR 3,702 million from EUR 
3,359 million in 2021. Some of our sub-
brands experienced exceptional volume 
growth despite price increases. Arla® 
Protein grew volumes by 48.9 per cent, 
and our food service brand, Arla® Pro, by 
20.4 per cent. From a market perspec-
tive, the Netherlands performed well, 
almost at 2021 volumes, with a slight 
decline of 0.8 per cent, despite market 
developments. 
 
 
 
Lurpak® 
Lurpak® experienced a volume decline 
of 7.6 per cent compared to 2021, but 
volumes sold were still higher than be-
fore Covid-19, successfully managing to 
keep consumer interest that peaked 
during the pandemic. The volume de-
cline was driven by price increases, and 
an overall category decline. Revenue 
grew by 16 per cent to EUR 750 million 
from EUR 646 million in 2021. Perfor-
mance was most heavily impacted by 
external market trends in the UK, where 
Lurpak® still kept its leading position in 
our branded business, but due to in-
creased prices, consumers started to 
trade down to private label products. 
Lurpak®'s position also strengthened in 
the Netherlands, with 21.2 per cent vol-
ume growth in 2022. Lurpak® also deliv-
ered strong branded volume growth in 
our international markets, most notably 
in MENA and Rest of the world, by 3.6 
and 9.0 per cent, respectively. 
 
 GLOBAL BRANDSFOUR STRATEGIC GLOBAL BRANDS ARE AT THE HEART OF OUR BUSINESS AND THEY DRIVE THE MAJORITY OF ARLA'S VALUE CREATION.
 OUR GLOBAL BRANDS
 
 
 
 
  
  Strategic branded volume-
driven revenue growth 
-3.2% 
2021: 4.5% 
  Strategic branded net 
revenue growth 
14.2%
2021: 5.7% 
2022: -4.3%
2021: 4.4%
2022: -7.6%
2021: 0.5%
2022: -6.9%
2021: 6.1%
2022: 4.7%
2021: 2.7%
2022: 12.4%
2021: 33.8%
2022: 10.2%
2021: 7.8%
2022: 16.0%
2021: 2.9%
2022: 24.6%
2021: 11.7%
2022: 31.8%
2021: -5.0%

11.3% 
Starbucks™ 
volume growth 
in the UK 
2021: 33.6% 
 
 
 
 
 
 
Castello® 
Our speciality cheese brand, Castello, 
lost 6.9 per cent in volumes compared 
to 2021, driven by consumers trading 
down to cheaper products and in gen-
eral buying less cheese due to inflation-
driven price increases. This also resulted 
in our market share being under pres-
sure. However, due to the heavy price in-
creases, revenue improved by 24.4 per 
cent to EUR 239 million from EUR 192 
million in 2021. To counter the trend of 
consumers dropping out of the category 
as they shop for fewer ingredients and 
simpler meals as a means of saving 
money, we worked in 2022 on a new 
creative toolkit to position Castello as an 
affordable delight.  
 
 
 
Puck® 
Puck®, our leading brand in MENA, over-
all grew volumes at 4.7 per cent, ahead 
of the 2021 growth of 3.2 per cent. 
Puck® managed to keep its leading posi-
tion as the number one spreadable 
cheese brand in the region during 2022, 
and gained further market share. Reve-
nue grew by 31.8 per cent to EUR 504 
million, from EUR 383 million in 2021. 
Performance was largely driven by our 
core products in the region, Puck 
processed cream cheese jars, which 
grew volume-driven revenue at 6.7 per 
cent. Puck shredded cheese also in-
creased volume-driven revenue by 13.3 
per cent, mostly due to the economic 
market recovery in Lebanon, a key mar-
ket for shredded cheese.  
 
 
 
Starbucks™ 
Our StarbucksTM ready-to-drink (RTD) 
coffee assortment, available in more 
than 50 countries in the EMEA region, 
delivered 12.4 per cent volume growth 
in 2022, despite price increases across 
the portfolio. All markets have contrib-
uted to the strong growth momentum 
with the largest absolute contribution 
coming from our biggest StarbucksTM 
RTD market, the UK, growing 11.3 per 
cent in volume and the highest percent-
age growth coming from the Nether-
lands with a volume growth of 30.4 per 
cent. The majority of this volume growth 
was driven by an increasing rate of sale 
in our portfolio in existing markets. On 
top of growing existing markets, we 
have opened several new markets, most 
notably South Africa. The most im-
portant innovation of the year was the 
launch of StarbucksTM Multiserve – a 
0.75 litre chilled coffee in a reclosable 
carton – successfully opening the  
StarbucksTM brand to in-home usage  
occasions. 
In the difficult market of 2022, our  
Starbucks™ ready-to-go coffee drinks 
managed to grow volumes on virtually all 
markets, and in total by 12.4 per cent.

istorically high inflation led to signif-
icant price increases across our  
Europe segment. Revenue increased by 
17.4 per cent to EUR 7,771 million com-
pared to EUR 6,621 million in 2021. 
Branded volumes declined by 4.2 per 
cent as consumers traded down to 
cheaper options. Some product catego-
ries and brands saw significant volume 
decreases in line with general market 
category decline. Such an example is 
Lurpak® and the whole butter and 
spreadable category, where volumes  
declined by 12.3 per cent.  
 
Despite the challenges, our  
Netherlands/France/Belgium cluster 
achieved 1.3 percent branded growth. 
StarbucksTM delivered growth of 12.5 
per cent, Arla® Protein grew by 48.9 per-
cent and our food service segment grew 
by 9.2 per cent.  
 
 EUROPE
Strategic branded volume-driven 
revenue growth 
-4.2% 
2021: 2.3% 
Revenue, EURm 
7,771 
2021: 6,621 
Revenue growth 
17.4% 
2021: 3.2% 
Share of total Arla revenue 
56% 
2021: 59% 
 ARLA®PRO
Arla Pro Slower Melt Soft Serve Mix is 
one of our many popular food service 
products. Arla Pro delivered 20.5 per 
cent volume growth in 2022.

Similar to other markets, the UK experi-
enced sustained exceptional inflationary 
pressure throughout 2022. Revenue 
grew by 18.3 per cent to EUR 2,989 mil-
lion compared to EUR 2,526 million in 
2021, driven largely by necessary price 
increases. At the same time, volumes in 
our branded business declined by 7.3 
per cent, as shoppers adjusted their con-
sumption behaviours in the face of un-
precedented inflation. Our butter brand 
Lurpak®, a key product in the UK, was  
hit especially hard by this trend, and  
reduced volumes at 15.5 per cent. Chal-
lenged growth in retail branded volumes 
was partially offset by continued positive 
momentum in our food service channel, 
which achieved 12 per cent branded 
volume growth. 
 
2022 was a year characterised by 
steeply increasing dairy commodity 
prices, price increases towards consum-
ers and a declining SEK. As a result, Arla 
Sweden grew revenue by 11.4 per cent 
to EUR 1,594 million from EUR 1,431 
million in 2021, slightly negatively af-
fected by the weakening SEK. However, 
volumes and market share declined, par-
ticularly in the milk and organic seg-
ments, as consumer behaviour re-
sponded to the pressure on household 
budgets. Branded volumes declined by 
3.9 per cent; however, StarbucksTM deliv-
ered growth of 3.8 per cent. 
 
 
In Denmark, revenue grew by 20.3 per 
cent to EUR 1,208 million from EUR 
1,004 million in 2021, driven by price 
increases. Price increases, however,  
impacted branded volumes negatively, 
as consumers preferred lower priced 
products. Thus, volumes declined by 1.1 
per cent. Despite this, our brands per-
formed relatively strong with market 
share roughly on the same level as in 
2021. Lurpak® did exceptionally well by 
maintaining 2021 volumes with a slight  
decline of 0.4 per cent, and was rated by 
consumers as the most trusted food 
brand. 
 
 
Unprecedented cost inflation triggered 
multiple price increases across our port-
folio in Germany in 2022. Total revenue 
increased by 20.9 per cent to EUR 1,198 
million from EUR 991 million in 2021, 
driven by price increases. Private label 
revenue increased, benefitting from 
milk scarcity in the first half as well as 
consumer shifts towards lower priced 
products. Branded volumes declined by 
7.7 per cent due to consumers shifting 
to cheaper offerings. However, the 
strong volume growth of StarbucksTM 
continued at 8.2 per cent, and our food 
service business rebounded with 19.4 
per cent volume growth after some diffi-
cult years during Covid-19.  
 
 
Our Netherlands, Belgium and France 
cluster put forward historical high price 
increases in 2022, as production costs 
and dairy commodity prices significantly 
increased. As a result, revenue increased 
to EUR 443 million from EUR 360 mil-
lion in 2021. Despite production chal-
lenges, we managed to continue to 
grow our brands and gain market share. 
Melkunie PROTEIN, StarbucksTM, 
Lurpak® and Arla® Pro continued to  
deliver impressive double-digit growth 
of 49.7, 30.4, 15.0 and 15.7 per cent, re-
spectively, in revenue to EUR 443 mil-
lion, from EUR 360 million in 2021. In 
2022, our retail customers again rated 
us the number one supplier in the dairy 
category. 
 
2022 was another year full of disrup-
tions with inflation significantly pushing 
up costs. Our revenue grew to EUR 339 
million compared to EUR 309 million in 
2021, driven by price increases. Our 
branded volumes in our retail segment 
declined by 1.8 per cent. Selected 
brands did very well despite the chal-
lenging market conditions. Starbucks 
and Arla Pro, for example, both grew vol-
umes in 2022 by 29.9 and 12.8 per cent, 
respectively. Our food service channel 
also delivered volume growth at 2.7 per 
cent after a few challenging years due to 
Covid-19. Again in 2022, we focused on 
delivering world-class innovations 
across our portfolio, such as launching a 
probiotic quark range in a sustainable 
fibre cup and using personalised lids 
from consumers in our Luonto+ yoghurt 
cup range.  
 
UK 
Strategic branded volume-driven  
revenue growth 2022 
-7.3% 
2021: 3.8% 
Revenue growth 
18.3% 
2021: 6.1% 
 
Sweden  
Strategic branded volume-driven  
revenue growth 2022 
-3.9% 
2021: 0.8% 
Revenue growth 
11.4% 
2021: 5.1% 
 
Denmark 
Strategic branded volume-driven  
revenue growth 2022 
-1.1% 
2021: 2.2% 
Revenue growth 
20.3% 
2021: 0.6% 
 
Germany  
Strategic branded volume-driven  
revenue growth 2022 
-7.7% 
2021: 1.7% 
Revenue growth 
20.9% 
2021: -3.2% 
  
  
 
The Netherlands, Belgium and 
France 
Strategic branded volume-driven  
revenue growth 2022 
1.3% 
2021: 8.4% 
Revenue growth 
23.1% 
2021: 7.1% 
 
Finland 
Strategic branded volume-driven  
revenue growth 2022 
-1.8% 
2021: 0.2% 
Revenue growth 
9.7% 
2021: -1.9%

ur international business grew reve-
nue by 17.2 per cent to EUR 2,463 
million from EUR 2,101 in 2021. The 
majority of the development is related 
to price increases, which were necessary 
to offset the increasing production 
costs. Branded volumes were under 
pressure as a result of price increases, 
and the divestment of our Russian busi-
ness due to the war in Ukraine also  
impacted overall volume growth nega-
tively, which landed at -1.2 per cent (or 
0.9 per cent, excluding Russia). 
 
Despite higher prices and declining de-
mand, we also achieved record branded 
volume growth in our largest regions, 
namely the Middle East and North Africa 
(MENA), Rest of the world and South-
East Asia (SEA), where volumes grew by 
4.3, 8.6 and 21.3 per cent, respectively. 
Our Chinese business, however, strug-
gled in 2022, as local raw milk prices 
slightly declined, whereas European 
milk prices significantly increased,  
resulting in reduced competitiveness for 
European products in China.  
 
 
 INTERNATIONAL OUR INTERNATIONAL COMMERCIAL ZONE ENCOMPASSES AROUND 140 COUNTRIES ON FIVE CONTINENTS. IN GENERAL, THESE ARE THE REGIONS WHERE WE EXPERIENCE THE STEEPEST VOLUME GROWTH. OUR KEY BRANDS IN THE ZONE INCLUDE PUCK®, ARLA®DANO, LURPAK®, CASTELLO®AND STARBUCKSTM.O
Strategic branded volume-driven 
revenue growth 
-1.2% 
2021: 9.4% 
Revenue, EURm 
2,463 
2021: 2,101 
Revenue growth 
17.2% 
2021: 6.4% 
Share of total Arla revenue 
18% 
2021: 19% 
 PUCK®CREAM CHEESE
Puck® is the number one spreadable 
cheese brand in MENA. In 2022, Puck 
delivered 4.7 per cent volume growth.

Our business in MENA delivered strong 
growth in 2022, with revenue increasing 
to EUR 964 million from EUR 734 mil-
lion in 2021, driven by price increases. 
Despite heightened prices, the MENA  
region delivered branded volume 
growth of 4.3 per cent. The positive  
momentum in winning retail market 
share continued; however, with some 
categories decreasing due to pressure 
on household budgets. Food service in 
the region had another strong year with 
significant branded volume growth of 
31.7 per cent.  
 
 
In North America, overall revenue in-
creased by 20.1 per cent to EUR 347 
million from EUR 289 million in 2021, 
driven by price increases and favourable 
foreign exchange rates. Where our US 
business was able to achieve minor 
branded growth of 1.4 per cent, Canada 
was able to maintain their strong market 
positions in an environment with declin-
ing categories and consumers trading 
down. Demand in the food service sec-
tor rebounded similarly to other mar-
kets; however, our business in North 
America is more focused on retail, there-
fore the food service rebound did not 
significantly impact our performance. 
 
In our SEA region we also delivered  
on our growth ambitions during a turbu-
lent year of inflation and currency  
challenges. We grew our revenue by 
49.4 per cent to EUR 269 million from 
EUR 180 million in 2021 through price 
increases and 21.3 per cent branded 
volume growth. Arla® Dano in Bangla-
desh continued to show strong branded 
growth of 18.0 per cent despite price in-
creases. The Philippines, and especially 
our food service segment in the Philip-
pines, performed exceptionally well, 
with branded volume growth of 41.7 per 
cent. Our food service business grew 
volumes by 29.9 per cent across SEA. 
 
In spite of a challenging macroeco-
nomic environment in the West African 
markets with declining dairy categories, 
high inflation and currency challenges, 
we delivered satisfying growth through 
agile price management. Revenue grew 
by 1.3 percent from EUR 155 million in 
2021 to EUR 157 million in 2022, driven 
by price increases across markets. How-
ever, the West African markets were 
challenged by a decline in consumption, 
which led to a branded volume decline 
of 17.8 per cent. To address the lower 
disposable incomes of our consumers, 
we launched a new affordable product – 
Dano Sabi in Nigeria and Hye Me Ma in 
Ghana. The establishment of a farm in 
Kaduna state in Nigeria is progressing 
well and is expected to be operational 
during the first half of 2023. 
 
Our branded volumes in China declined 
by 46 per cent, mainly due to increasing 
European milk prices, which challenged 
Arla's competitiveness in the Chinese 
market. The challenge mostly impacted 
our UHT and cheese businesses, 
whereas the early life nutrition segment 
was less impacted. Also, we successfully 
took control over the ELN business, 
which previously was operated by  
Yashili. Total revenue declined by  
44.3 per cent to EUR 131 million from 
EUR 235 million in 2021. In 2022, UHT 
milk continued to make up the biggest 
share of our business in China. 
 
We exited our Russia business and  
divested our Russian subsidiary, formerly 
part of the Rest of the world organisa-
tion. This in isolation reduced revenue 
by EUR 30 million compared to 2021. 
The remaining Rest of the world, now in-
cluding Australia, European subsidiaries 
and Distributor Sales, delivered volume-
driven growth of 8.6 per cent, and total 
revenue of EUR 569 million in 2022, sig-
nificantly driven by price increases. Key 
drivers of the branded volume growth 
were StarbucksTM, Lurpak® and Milex 
early life nutrition with 24, 9 and 16 per 
cent of growth, respectively. A contin-
ued focus and investments in the food 
service channel delivered branded vol-
ume growth of 29.2 per cent. Despite 
shoppers trading down and many cate-
gories declining due to inflation most 
markets contributed to the growth. 
 
Middle East and North Africa 
Strategic branded volume-driven  
revenue growth 2022 
4.3% 
2021: 5.2% 
Revenue growth 
31.3% 
2021: -1.9% 
 
North America 
Strategic branded volume-driven  
revenue growth 2022 
-0.6% 
2021: 8.3% 
Revenue growth 
20.1% 
2021: 7.0% 
 
South-East Asia 
Strategic branded volume-driven  
revenue growth 2022 
21.3% 
2021: 27.1% 
Revenue growth 
49.4% 
2021: 5.3% 
 
West Africa 
Strategic branded volume-driven  
revenue growth 2022 
-17.8% 
2021: 13.3% 
Revenue growth 
1.3% 
2021: 16.5% 
 
China 
Strategic branded volume-driven  
revenue growth 2022 
-44.1% 
2021: 12.4% 
Revenue growth 
-44.3% 
2021: 23.7% 
 
Rest of the world 
Strategic branded volume-driven  
revenue growth 2022 
-2.0% 
2021: 8.5% 
Revenue growth 
12.0% 
2021: 9.7%

n 2022, AFI faced a very dynamic  
market environment and was subject 
to record-high energy and raw material 
prices. However, strong demand for our 
specialised whey protein and lactose 
products allowed us to protect our - 
margins.  
 
AFI's 2022 performance was driven by a 
continuous effort to produce new inno-
vations and despite inflationary pressure 
on raw materials and energy, our highly 
specialised whey protein and lactose 
products kept the strong momentum 
during 2022. We continued to deliver 
improvements in our underlying prod-
uct mix and our pricing followed market 
developments. This resulted in revenue 
growth of 29.5 per cent to EUR 1,028 
million compared to EUR 794 million in 
the same period last year. ‘ 
The value-added protein volumes grew 
by 6.8 per cent to a total value-add 
share of 80.4 per cent compared to  
74.0 per cent in the same period last 
year. The Advanced Nutrition business, 
primarily producing early life nutrition 
products, was challenged during 2022 
following rising production costs and 
strategic customers facing difficult mar-
ket conditions in China. However, 
we also successfully secured 
new customers during 
2022 and our outlook  
for the business remains 
positive. 
 
 
 
 ARLA FOODS INGREDIENTS
Growth of the value-add segment 
6.8% 
2021: 14.5% 
Value-add share 
80.4% 
2021: 74.0% 
Revenue, EURm 
1,028 
2021: 794 
Share of total Arla revenue 
8% 
2021: 7% ARLA FOODS INGREDIENTS (AFI) IS A GLOBAL LEADER IN WHEY-BASED INGREDIENTS THAT ARE USED IN A WIDE RANGE OF CATEGORIES FROM INFANT, CLINICAL AND SPORTS NUTRITION TO DAIRY AND BAKERY. IN ADDITION, WE MANUFACTURE CHILD NUTRITION PRODUCTS FOR THIRD PARTIES. AFI IS A 100 PER CENT OWNED SUBSIDIARY OF ARLA.IVALUE-ADD PROTEINS
Specialised proteins produced 
by AFI are also used in a vari-
ety of Arla products. Our new 
Arla Protein Refresh car-
bonated soft drink contains 
10 grams of protein to aid re-
covery after a workout.

The flexibility of our Global Industry 
Sales (GIS) business model enabled us  
to shift milk volumes throughout the 
year, as the effects of inflation changed  
demand between retail and commodity 
markets. 
European and global dairy commodity 
market prices increased significantly 
during the year, with an unprecedented 
acceleration during the first half of the 
year. The price increases were driven 
globally by stagnating milk production 
due to higher production costs both on 
farm and in the dairies, combined with 
high demand in the industrial sector. 
The overall share of milk solids sold 
by our Global Industry Sales rose to  
23.6 per cent compared to 22.1 per 
cent last year. GIS revenue increased by 
50.1 per cent to EUR 2,531 million from 
EUR 1,686 million in 2021 as a result of 
commodity price increases. The strong 
results of our Industry Sales were a key 
driver behind the competitive milk price 
to our farmer owners. 
 
 
 
 
 
 GLOBAL INDUSTRY SALES IN ADDITION TO OUR RETAIL CHANNELS, WE CONDUCT BUSINESS-TO-BUSINESS SALES OF CHEESE, MILK POWDER AND BUTTER TO OTHER COMPANIES TO USE AS INGREDIENTS IN THEIR PRODUCTION. FURTHER, OUR GLOBAL INDUSTRY SALES BUSINESS MODEL ALLOWS US TO MANAGE SEASONAL AND REGIONAL VARIABILITY IN OWNER MILK PRODUCTION AND BALANCE OUR MILK THROUGHOUT THE YEAR.
Share of milk solids sold through 
Global Industry Sales 
23.6% 
2021 22.1% 
Revenue, EURm 
2,531 
2021: 1,686 
Revenue growth 
50.1% 
2021: 9.4 
Share of total Arla revenue 
18% 
2021: 15% 
Our newly inaugurated 
Pronsfeld powder tower 
significantly increased 
our capacity to serve the 
growing industrial de-
mand for milk powder.

Recession on the horizon  
2023 will undoubtedly be another diffi-
cult year with the challenging global 
economic environment and the ongoing 
effects of the war in Ukraine continuing 
to impact the energy market and supply 
chains. Global GDP growth is forecasted 
to be lower than in 2022 at 2.7 per cent. 
Towards the end of the year, we saw a 
downward turn in feed and fertilizer 
prices, and as a result of easing cost 
pressures on farmers a slight uptake in 
milk supply. We expect the supply and 
demand balance to be restored on the 
dairy market over the course of 2023. As 
a result, commodity prices began to 
sharply decline during the fourth quarter 
of 2022, and returned to 2022 January 
levels.  
 
We expect to see a continued slowdown 
in branded growth due to the reduced 
buying power of consumers and fear of 
recession. As we see it now, our branded 
volumes will decline by 3.5 to 1.5 per 
cent. We, however, expect the growth 
pace to pick back up again from 2024. 
See how we adjusted our strategic ex-
pectations to the changing external 
market on the next page. 
 
Our revenue is expected to be in the 
range of EUR 13.6-14.2 billion. The 
profit share is expected to be between 
2.8 and 3.2 per cent, and leverage  
between 2.4 and 2.8. We expect to save 
EUR 55-85 million through our effi-
ciency programme. 
 
Our target to further reduce our emis-
sions in our production and on farm  
remains unchanged. 
 
 2023 OUTLOOK 
Outlook
20221
Results 
2022 
Outlook
2023
 STRATEGIC BRANDED VOLUME-DRIVEN REVENUE GROWTHPER CENT-3.0~-2.0-3.2-3.5~-1.5
 
 
 
 EFFICIENCIESMILLION EUR70-10010155-85
 
 CO2eEMISSIONS SCOPES 1+2PERCENTAGE POINTSEMISSIONSREDUCTION-4EMISSIONSREDUCTION
 CO2eEMISSIONS SCOPE 3PER KG OF MILK AND WHEYPERCENTAGE POINTSEMISSIONSREDUCTION-2EMISSIONSREDUCTIONHOW WE CREATE VALUEPERFORMANCE REVIEWRISKS & OPPORTUNITIESENVIRONMENTAL AMBITION AND PROGRESSSOCIAL AMBITION AND PROGRESSCORPORATE GOVERNANCECONSOLIDATED FINANCIAL STATEMENTSESG STATEMENTSANNUAL REPORT 202225WE EXPECT 2023 TO BE ANOTHER CHALLENGING YEAR, WITH VOLATILE MARKET CONDITIONS, CONTINUED HIGH INFLATION, DECLINING COMMODITY PRICES AND A SLOWDOWN IN ECONOMIC ACTIVITY.
1 As announced in H1 2022

n the first year of our Future26 strat-
egy, we made progress on our targets 
of driving value creation in the global 
dairy category and being a leader in the 
transition to a more sustainable produc-
tion to help address the twin challenges 
of climate change and providing access 
to nutrition to a rapidly growing world 
population. 
Significant steps on our sustainability 
journey included accelerating our transi-
tion to green electricity at our European 
production sites and the development 
of our Sustainability Incentive Model 
(see page 35). 
In terms of value creation, we delivered 
strong performance in a number of our 
priority growth markets as well as in our 
food service and ingredients businesses 
(AFI), but were impacted, particularly in 
Europe, by the severity of the cost of liv-
ing crisis. 
The cost of living crisis, which is expect-
ed to continue to impact consumers 
throughout 2023, has led to downward 
revisions of two key economic indicators  
on which our Future 26 strategy was 
built – specifically GDP growth and 
global demand for dairy. As such, we  
undertook a review of our Future26 
strategy, which concluded that while the 
majority of Future26 remains relevant 
and therefore unchanged, our branded 
volume growth and yearly efficiency am-
bitions needed to be adjusted. 
The economic impact is most severe in 
2022 and 2023 and we expect a return 
to growth conditions from 2024.  Based 
on these assumptions, we expect a 
branded volume decline of 3.5-1.5 per 
cent 
for 2023 and then expect growth in the 
range of 1-4 per cent from 2024-2026. 
Our yearly efficiencies have been 
changed from a target of EUR 100 mil-
lion annually to a range of EUR 70-100 
million annually. 
Our peer group index ambition of 103-
107 across Future26 and our CO2e tar-
gets for scopes 1, 2 and 3 remain un-
changed, as does our ambition to be-
come carbon net zero across our value 
chain by 2050. 
 
 AGILE RESPONSE TO GLOBAL CHALLENGESI
Peer group index 
Branded 
Scopes 1+2 SBTiNET ZERO
volume growth 103-107
Stagnating demand for dairy 
Forecasted yearly growth 
Eﬃciencies 
Investments STRONGER PLANET & STRONGER PEOPLE2%1.5%
Economic slowdown 
Global GDP growth, 2020-2024 5%2%
Growing population  
2020-2030 750M750M
Growing urban population 
2020-2030 1-4%1-4%1-4%-63%-30%EUR 70-100 mANNUALLYEUR 600-800 mANNUALLY
Scope 3 per kg 
of milk and whey EXTERNAL TRENDS RESHAPING OUR STRATEGY

CASTELLO®PINEAPPLE
 
Our specialty cheese brand, Castello®, offers a wide va-
riety of exciting flavours, pineapple being one of them. 
This cheese is a unique blend of pineapple and soft 
cheese, which creates a sweet and tangy taste. 
 
 
 
 RISKSANDOPPORTUNITIES

Risk identification, assessment 
and mitigation 
In 2022, we further strengthened our 
risk management process by enhancing 
the approach across business units,  
ensuring a shared understanding and 
clear roles for risk identification, assess-
ment and mitigation. Our enterprise risk 
management framework, which will be 
further rolled out in 2023, improved 
our risk infrastructure, communication 
and documentation. 
Arla's risk management aims to effec-
tively identify, assess and reduce risks 
and uncertainties, mitigate adverse 
 internal and external impacts, and  
capture business opportunities to max-
imise value creation. To identify our key 
risks, risk owners across the organisa-
tion constantly monitor trends that 
could potentially have an impact on 
Arla in the future. These emerging risks 
are assessed according to a two-dimen-
sional heat map that estimates the 
impact of the risk on operating  
profit and the likelihood of the risk 
materialising.  
The most significant risks are regularly 
reviewed and assessed by the Executive 
Management Team (EMT) and the 
Board of Directors (BoD). While the BoD 
has the responsibility for maintaining 
robust risk and compliance manage-
ment as well as an internal control sys-
tem, the EMT is accountable for the 
risks, responsible for the effectiveness 
of the risk mitigation efforts and the 
identification of related opportunities. 
The EMT reviews our risk map and 
based on their review the top risks are 
presented to the BoD. Both the EMT 
and BoD take action to avoid unneces-
sary risks and mitigate others. The pro-
cess is flexible and allows for a quick as-
sessment of risks which might suddenly 
arise, as we have seen with Covid-19 
and the war in Ukraine. 
Climate-related risks 
In 2022, we included a detailed cli-
mate-related risk assessment in our 
yearly risk assessment process to un-
derstand the risks and opportunities 
Arla is facing due to climate change and 
what can we do to mitigate these risks. 
We followed the recommendations of 
the Task Force for Climate-related  
Financial Disclosures (TCFD) to map out 
and assess our key climate-related risks. 
Read the risk details on page 32. Our 
TCFD summary table is on page 143. 
 
 
 RISK GOVERNANCEAS A GLOBAL COMPANY WITH THE AMBITION TO LEAD SUSTAINABLE DAIRY, ARLA FACES MULTIPLE RISKS AND OPPORTUNITIES. MANAGING RISKS RIGOROUSLY AND SYSTEMATICALLY IS KEY TO CREATINGAND PROTECTINGVALUE FOR OUR OWNERS BY SECURING OUR CURRENT ACTIVITIES AND DELIVERING ON OUR STRATEGIC ASPIRATIONS.CORPORATE RISK MANAGEMENT
Understand 
Plan 
Act 
· Contingency measures 
· Business continuity measures 
· Communication measures RISK RESPONSE AND REPORTING
· Reporting to the EMT and BoD regularly 
· Mitigating actions put in place  
· Risk map or catalogue 
· Classification of risk types (peripheral, 
market-specific, company specific risks) 
· Estimates of the probability of occurrence 
· Assessment of risk impact 
· Risk in operative planning 
· Risk in strategic planning 
· Risk in investment valuation 
· Risk-return portfolio management

Key changes in Arla's risk 
position in 2022: 
 
· Global political and economic instabil-
ity increased, driven by Russia's inva-
sion of Ukraine, China's Covid-19 re-
sponse and political unrest in some of 
our international markets (see risk 2). 
 
· The risk of our competitiveness de-
creasing due to looming recession 
and the elevated input costs in 
Europe also increased in 2022 (see 
risks 4 and 5). 
· European governments became more 
interventionist on climate and sus-
tainability regulation. Some initiatives 
supported our strategy while others 
created risk (see risks 1 and A, B, C). 
 
 
 
 ARLA'S RISK POSITIONARLA, AS EVERY BUSINESS, IS SUBJECT TO RISKS, WHICH OFTEN CAN BE TURNED INTO OPPORTUNITIES. ON THE FOLLOWING PAGES WE PRESENT THE RISKS THAT WE SEE AS MOST MATERIAL TO ARLA'S PERFORMANCE IN THE MID-TERM AND DESCRIBE OUR MITIGATION EFFORTS. IN 2022, WE SAW MANY OF OUR KEY RISKS INCREASING IN LIKELIHOOD AND IMPACT, AS THE EXTERNAL WORLD SUCCUMBED TO UNCERTAINTY AND VOLATILITY.KEY RISKS
Peripheral risks 
1. Climate-related regulatory changes 
2. Political instability and economic turmoil 
Market-specific risks 
3. Transformation of consumer behaviour 
4. Loss of competitiveness in branded portfolio 
5. Loss of international competitiveness due to in-
creased production costs 
Company-specific risks 
6. Major cyber attack 
7. Major product quality and safety issues 
8. Currency volatility 
Transitional risks 
A. Regulations to reduce emissions in produc-
tion 
B. Regulations to reduce emissions from agri-
cultural activities 
C. Land use regulations 
D. Environmental footprint and origin labelling 
E. Change in dietary guidelines and trends 
Physical risks 
F. Extreme weather events 
Risk description 
Peripheral risks: 
These risks are 
outside of our 
management's  
direct control. 
Market-specific 
risks: These risks are 
considered managed 
within the strategic 
and business 
planning process.  
Company-specific 
risks: These are risks 
Arla can directly 
manage and 
mitigate. They serve 
as a starting point for 
the development of 
global policies and 
internal control 
procedures.  
Transitional risks:  
Risk stemming from 
societal and 
economic shifts 
towards a low-carbon 
and more climate-
friendly future.  
Physical risks: 
These risks relate  
to the physical 
consequences of  
the changing climate, 
such as rising 
temperatures, more 
frequent extreme 
weather events, 
floods etc. 
Critical
Major
Moderate 
Possible 
Likely 
Very likely 
 
Critical
Major
Moderate
Possible 
Likely 
Very likely

Risk category 
Year-on-year movement 
Year-on-year movement: We assess the year-on-year movement of each risk by evaluating shifts in the likelihood of 
their occurrence and their potential impact. The sum of these movements gives us the year-on-year position shift. 
 KEY RISKS OVERVIEW
 RISK DESCRIPTIONPOTENTIAL IMPACTMITIGATING ACTIONS
 
Climate-related 
regulatory changes  
Read more about climate-re-
lated risks on page 32 
A number of climate-related regulations that would have an 
impact on the dairy industry are being discussed both at EU 
level and in individual European countries. Denmark has 
proposed an emission tax on industry operations and is 
committed to introducing a carbon tax on methane and ni-
trous oxide emissions from agricultural activities.  
 Peripheral risk 
 Increased 
 
· Higher production costs on farm. 
· Lower milk volumes. 
· Reduced flexibility of operations. 
· We are actively reducing our own, and our farmers' CO2e 
emissions. In 2022, we introduced a Sustainability  
Incentive Model to drive even more climate action  
on farm. 
· We are staying alert in our supply chain for a potential 
reduction in milk intake. 
 
Political instability and 
economic turmoil 
 
As a global company, Arla is exposed to global political and 
economic instability or recession. We expect the next few 
years to be difficult ones in this respect. 
 Peripheral risk 
 Increased 
· Economic instability and recession affect demand for 
dairy, exchange rates and commodity prices. 
· Political unrest or wars can affect the global food value 
chain through, for example, a shortage of animal feed 
and disruption of logistics networks. These, in turn, 
could impact our milk volumes and profitability. 
· Balancing our growth between higher and lower risk 
markets in our International segment. 
· Increasing the agility of our supply chain. 
 
Transformation of 
consumer behaviour 
See more details in climate-re-
lated risks D and E on page 32 
Constant transformation of consumer preferences is a 
given in the food industry, but the fastening pace and the 
volatility of these trends could significantly affect our busi-
ness.  
 Market- 
specific risks 
 Stable 
· If Arla's sustainable transformation does not match the 
speed of changing consumer trends, we could lose  
market share and sales volumes. 
· Understanding and closely tracking consumer needs. 
· Providing a wide range of options to consumers seeking 
more sustainable meal choices. 
· Ensuring consumers understand the nutritional and 
health benefits of our products and brands. 
 
Loss of competitiveness 
in branded portfolio  
In the current high inflationary environment with an eco-
nomic recession on the horizon, consumers are expected 
to choose more low-cost alternatives. 
 
 Market- 
specific risks 
 Stable 
· Our brands are at the core of our value generation 
model. Slow development in branded revenue will 
impact profitability negatively. 
· Price pressure on our branded product could make our 
brands less competitive on the market. 
· Keeping our branded portfolio relevant and affordable 
to our consumers through innovation and strong sales 
execution. 
 
Loss of international 
competitiveness due to 
increased production 
costs 
In 2022, inflation was exceptionally high globally; however, 
Europe was hit harder by this trend, as it was exacerbated 
by Russia's war on Ukraine. 
 Market- 
specific risks 
 New,  
increased 
· On our key growth markets in International we are in 
many instances competing with dairy companies based 
outside of Europe. These companies have a competitive 
edge over Arla if the current level of input costs is  
maintained.  
· Maintaining a cost-efficient supply chain by evolving to 
be less dependent on our European sites by exploring 
possibilities in production and sourcing on our interna-
tional markets where we have strategic commercial  
interests. 12345

Risk category 
Year-on-year movement 
Year-on-year movement: We assess the year-on-year movement of each risk by evaluating shifts in the likelihood of 
their occurrence and their potential impact. The sum of these movements gives us the year-on-year position shift. 
 
Major cyber attack 
There is a growing trend in crimeware targeting manufac-
turing companies, which affects our industry as well. 
 Company- 
specific risks 
 Increased 
· Potential damage to our ability to manufacture, deliver 
and sell our products. 
· Strengthening our processes around mitigating  
IT security vulnerabilities. 
 
 
Major product quality and 
safety issues  
We have a complex and long value chain, with a large  
variety of products. Ensuring that our products are safe to 
consume and are appropriately labelled, and keeping our 
employees safe and healthy are key to the success of Arla. 
 Company- 
specific risks 
 Stable 
· Major product quality and/or food safety issues may 
lead to a loss of brand reputation and reduced trust in 
our products.  
· Downgrade of products may lead to financial losses. 
· We are constantly improving our quality and food safety 
management programmes. 
· Food safety and compliance with health and safety  
regulations is a top priority across our supply chain. 
 
Currency volatility 
As a significant part of Arla's revenue is generated in cur-
rencies other than EUR or DKK, our key financial risk relates 
to the fluctuation of currencies in our global markets. 
 Company- 
specific risks 
 Stable 
· Currency deterioration increases sales prices in the 
individual markets, affects Arla's competitiveness  
and potentially impacts revenue and profit. 
· Arla has owners in several countries, including the UK 
and Sweden. Purchase of owner milk and operations in 
countries outside the euro zone means that our perfor-
mance price measured in EUR is exposed to fluctuations 
in the GBP and SEK exchange rates. 
· Centralised currency exposure management. 
· Reducing short-term exposure through hedging  
activities. 
 
Read more in Note 4 to the financial statements. 
 
 
 
 678

Risk category 
Year-on-year movement 
Year-on-year movement: We assess the year-on-year movement of each risk by evaluating shifts in the likelihood of 
their occurrence and their potential impact. The sum of these movements gives us the year-on-year position. shift. 
 
 CLIMATE-RELATED RISK OVERVIEW
 RISK DESCRIPTIONPOTENTIAL IMPACTMITIGATING ACTIONS
 
Regulations to reduce 
emissions in production 
Denmark has proposed an emission tax on industry opera-
tions. Arla's operations will be impacted by this. There is the 
potential for other countries to follow Denmark and intro-
duce similar taxes or employ other regulatory tools to re-
duce emissions in the future. 
 Regulatory risk 
 Stable 
· Increased production costs in countries with CO2e regu-
lations, for example a CO2e tax 
· We are constantly lowering our CO2e emissions in our 
production. Our science-based target is to lower scope 
1 and 2 emissions by 63 per cent by 2030. 
· We are also aiming at running our European operations 
solely on green electricity by 2025. 
 
Regulations to reduce 
emissions from 
agricultural activities 
The Danish government has committed to introducing a 
carbon tax on methane and nitrous oxide emissions from 
agricultural activities. Our Danish farmer owners will be sub-
ject to this tax; however, currently the details regarding the 
level and the implementation of the tax are unclear. 
 Regulatory risk 
 Increased 
· Our Danish farmer owners' production costs would in-
crease significantly, which could have a negative impact 
on milk volumes, causing commodity sourcing issues. 
· Reducing our emissions on farm is part of our business 
strategy. Our target is to reduce scope 3 emissions by 
30 per cent per kg of milk and whey by 2030.  
 
Land use regulation 
EU-level proposals to reduce the emissions impact from 
land use includes peat soil restoration and increasing for-
estry. National initiatives to improve water and air quality 
such as in the Netherlands may also reduce livestock num-
bers in our core markets.  
 
 Regulatory risk 
 Stable 
· These regulations would mean less land for producing 
feed for cows, which could lead to herd size and milk 
volumes dropping. 
· Reducing livestock numbers would also negatively af-
fect milk volumes. 
· To understand the potential impact of such regulation 
better and to provide our farmers with solutions, we are 
aiming to measure land use, including the use of peat 
soils to our Climate Checks from 2023. 
 
Environmental footprint 
and origin product 
labelling 
Governments and the EU are increasingly looking at intro-
ducing mandatory sustainability-related labelling covering 
carbon footprint, country of origin and nutrition.  
 
 Regulatory risk 
 Increased 
· Mandatory origin labelling will increase the complexity 
of our operations and reduce our efficiency, as we col-
lect milk from seven European countries. 
· Carbon and nutrition labelling that oversimplifies the 
complexities of a sustainable and nutritious diet could 
mistakenly drive consumers away from dairy. 
· We are working on establishing methodologies, pro-
cesses and systems to calculate our products' environ-
mental footprint. 
 
Change in dietary 
guidelines and trends 
National dietary guidelines could reduce the amount of  
animal-based foods recommended based on concerns 
about their carbon footprint, ignoring their nutritional  
contribution. 
 Consumer risk 
 Increased 
· Schools and other institutions might change their offer-
ings for kids and young adults, which can have long-
term repercussions for their dietary preferences. 
· We are educating about the nutritional benefits of dairy 
in schools and inspire hundreds of thousands of people 
through our recipe sites and social media accounts. 
 
Extreme weather events 
Heat waves, draughts, floods and other extreme weather 
events are becoming more and more common due to  
climate change. New animal diseases and pests are also  
a consequence of climate change that the agricultural  
sector has to face. 
 Physical risk 
 Stable 
· Extreme weather events could have an adverse effect 
on crop yield and disrupt operations or the distribution 
infrastructure.  
· Heat waves are especially detrimental for the cows' 
productivity and could affect milk volumes.  
· Our core milk production countries are relatively resili-
ent to extreme weather events; however, we are,  
together with our farmer owners, working on better  
understanding and mitigating the impact of changing 
weather conditions. 
 ABCDEF

Arla is the world’s largest producer of  
organic dairy. Our organic milk is produced 
with a special care for animal well-being and 
the environment, including free grazing for 
the cows and avoiding the use of artificial 
pesticides and fertilisers. 
 
 ORGANICMILK
 
 
 
 
 
 
 
 
 STRONGER             PLANET

ENVIRONMENTAL AMBITION AND PROGRESSHOW WE CREATE VALUEPERFORMANCE REVIEWRISKS & OPPORTUNITIESENVIRONMENTAL AMBITION AND PROGRESSSOCIAL AMBITION AND PROGRESSCORPORATE GOVERNANCECONSOLIDATED FINANCIAL STATEMENTSESG STATEMENTSANNUAL REPORT 202234
Arla set Science Based Targets for 
2030, using 2015 as a baseline. Direct 
greenhouse gas emissions (scope 1) 
and emissions related to purchased 
energy (scope 2) should be reduced 
by 63 per cent in absolute terms. For 
scope 3 emissions, among other 
areas, we are focusing on reducing 
emissions from sourcing of raw milk. 
The target is to reduce the carbon 
footprint from scope 3 by 30 per cent 
per kg standardised milk and whey. 
Read more on page 130.  
For details about climate-related risks, 
go to page 32. 
. 
2022  2%p
2022  
 
 ONLY RENEWABLE ELECTRICITY
By 2025, we aim to use only renewable 
electricity at our production sites and 
offices in Europe. 
Read more on page 41. 
 
 FULL RECYCLABILITY
Our 2025 ambition is that 100 per cent of 
the packaging used for Arla’s own brands is 
recyclable. Read more on page 43. 
 
 2030 Ambitions   Our ambition is to remove the use of 
virgin fossil-based plastic in packaging used for Arla’s 
own brands by 2030. 
Read more on page 43. 
 2030 Ambitions   Our ambition is to cut food  
waste by 50 per cent by 2030 (vs. 2015).  
 
2021
20307%9%30%
2022SCOPE 3 EMISSIONREDUCTIONS PER KILO MILK AND WHEY 
2015
2021
202540%61%100%
2022DESIGNED FOR RECYCLING 
2025
202293%100%SCOPE 1 AND 2 EMISSION REDUCTIONS AND STRATEGIC LONG-TERM TARGETS29%63% REDUCTION TARGET SBTI 1.5ºC COMMITMENTCARBON NET ZERO AMBITION
2015 
2022 
2050 
2030 
2021 25%

rla made a bold step in 2022 when 
we announced our Sustainability  
Incentive model which ties the milk 
price farmers receive to sustainability 
actions on farm. After the Sustainability 
Incentive model will come into effect in 
2023, farmers can earn up to 2.4 EUR-
cent per kg of milk1 for their actions 
contributing to achieve our 2030 target 
of reducing scope 3 CO₂e emissions by 
30 per cent per kg of milk and whey, as 
well as other sustainability actions such 
as enhancing biodiversity. 
To reward past action and motivate  
further environmental improvements  
on farms, our Board of Directors are  
earmarking EUR 500 million2 annually to 
be re-distributed to farmer owners, 
based on their individual points col-
lected in the incentive model.  
From the start, the model will be funded 
from the raw milk value, and our aim is 
that over time, our tangible 
sustainability actions will raise the value 
of our raw milk and bring more returns 
to our owners through commercialisa-
tion. Rewarding farmer owners for taking 
sustainability action will send a clear 
message to customers and consumers 
that a share of the price they pay for 
more sustainable Arla products and con-
cepts is directed to the farmers who 
take the most action. 
Our farmers were heavily involved in cre-
ating the model to ensure it is fair to all 
farmers, easy to understand and enables 
the commercialisation of on-farm sus-
tainability activities. The model is a 
point-based system in which the farmer 
can collect points based on their activi-
ties on the model’s 19 different levers. 
Activities with bigger improvement  
potential for climate and nature will lead 
to the most points – and therefore also 
the biggest financial incentive. We iden-
tified these activities through our  
Climate Checks. For each point that a 
farmer is able to achieve, they will  
receive 0.03 EUR-cent per kg of milk. 
The first incentive payment will be paid 
out as part of the monthly milk price for 
July 2023, based on milk delivered in July 
and the data submitted in the Climate 
Check 2022 as well as new data and 
documentation submitted by the farm-
ers. Farmers also receive a 1.0 EUR-cent 
per kg of milk incentive to submit their 
climate date.  
For an average Arla farmer with an aver-
age annual milk production of 1.2 mil-
lion kg, it is estimated that at least 
26,000 euro of their milk price is 
achieved based on his or her sustainable 
actions in the first full year. 
The model is future-proof, as 20 of the 
maximum 100 points are reserved for 
future levers and new actions. When all 
the points are ready to be distributed 
farmers will be able to earn up to 3.0 
EUR-cent per kg of milk for their climate 
actions.  
 MAKING A BOLD STEP IN OUR TRANSITION TO SUSTAINABLE DAIRY A
1Over time, the model will include even more sustainability actions, and then farmers can earn up to 3.0 EUR-cent per kg of milk for their actions. 2Based on our current milk volume, and the assumption that the farmers achieve the maximum point, plus they receive the 1.0 EUR-cent for submitting their data.  
 
“The support from our 
members, even in a time  
of great uncertainty, is a 
testament to our 
commitment to be at the 
forefront of progressive dairy 
farming and set the standard 
for how to push our whole 
sector forward”
Jan Toft Nørgaard 
Chairman of the BoardOUR INCENTIVE MODEL

Climate checks and the Big5 
Our Climate Check tool helps Arla 
farmer owners identify farm greenhouse 
gas emissions (CO₂e) and suggests  
actions for reducing emissions further. 
Climate Checks measure six key areas: 
number of animals, feed composition, 
crop production, use of fertiliser, ma-
nure handling, and use of electricity, fuel 
and renewable energy. The farmers’ an-
swers are validated by external climate 
advisors, who also support farmers to 
create personalised emission reduction 
plans based on their results.  
In 2022, 95 per cent of Arla's active 
farmer owners participated in the  
Climate Checks, covering 99 per cent 
of Arla's owner milk pool. The average 
Arla owner produces milk with 1.12 kg 
of CO₂e per kg milk. 
Following the introduction of the  
Climate Check tool in 2020, we have 
conducted a further analysis of the first 
data set. This shows that 78 per cent  
of the variation in carbon footprint  
between farms stems from five areas, 
which we refer to as the Big 5 (see  
next page). 
Benchmarking and knowledge 
sharing drive Big5 performance 
In 2022, we further developed our  
on-farm emission reduction actions by 
introducing benchmarking and system-
atic knowledge sharing to support our 
owners. An important first step to  
increase awareness of how impactful 
the Big5 can be is to ensure that every 
farmer understands their current perfor-
mance on the five levers. Arla therefore 
introduced a new benchmarking model 
designed to give a clear picture of how 
the farm performs compared to similar 
farms as well as to indicate the potential 
within reach for each of the Big5 areas. 
The potential is defined by what the 
best-performing farms in the bench-
mark group have been able to accom-
plish by being very efficient on the lever 
in question. The benchmark groups are 
created based on geographical region, 
herd size and feed type.  
The results of the benchmarking are dis-
cussed on knowledge building events 
organised by Arla, where farmers can 
talk to their peers who are achieving 
very good results within one lever or the 
other, and learn what can be done to im-
prove. To motivate farmer participation, 
farmers can earn one point in the incen-
tive model for participating in sessions 
which Arla categorised as knowledge 
building events. 
 
 SUSTAINABLE DAIRY FARMING 
1.12 
CO2e per kg of owner milk 
Strategic ambition 
our science-based target is to reduce scope 3 
emissions per kg of milk and whey by 30 per cent 
by 2030.

The most effective climate 
actions – The Big5 
The big 5 represent the most effective 
climate action areas that all Arla farmers 
can work with to lower their farm’s car-
bon footprint, and they also play a key 
role in the sustainability incentive 
model. 49 points out of the possible 80 
that are available from the start come 
from big 5 activities. These actions are 
also excellent tools for farm manage-
ment, creating efficiencies for the farm-
ers as they progress. 
Large-scale on-farm pilot to 
reduce methane emissions 
To find new, more efficient ways of  
reducing emissions on farm, Arla has  
a programme for pilot and innovation 
farms. 
In one of the pilots, Arla, together with a 
global purpose-led science-based  
company, Royal DSM, in 2022 started  
a large-scale on-farm pilot with the  
methane reducing feed additive 
Bovaer®, which can potentially reduce 
methane emissions from cows who  
consume it by 30 per cent. 
Methane emissions are one of the dairy 
industry’s biggest climate challenges. 
From an Arla perspective, 40 per cent of 
total emissions from Arla farms are com-
ing from cows’ digestion of feed.  
To tackle this problem and speed up our 
emission reduction, our farmer owners 
are piloting the use of the new feed ad-
ditive Bovaer® with 10,000 dairy cows 
across more than 50 farms in Denmark, 
Sweden and Germany. 
Bovaer® works by suppressing the en-
zyme that triggers methane production 
in a cow’s digestive system. It takes ef-
fect immediately and is scientifically 
proven to not affect the milk quality. Just 
a quarter of a teaspoon of Bovaer® 
added daily to each cow’s feed will ena-
ble a consistent reduction in methane 
emissions of 30 per cent, on average. 
Arla and partners will transfer 
wind power into green fertiliser 
The four large farmer-owned Danish  
cooperatives Arla, DLG, Danish Agro, and 
Danish Crown joined forces in 2022 and 
founded a new company, Zero Emission 
Fertilizer Denmark, which will investi-
gate the possibility of producing a car-
bon-neutral fertiliser in Denmark.  
Today, chemical fertilisers are a 
prerequisite to cultivating high enough 
yields to meet the global demand for 
food. However, the use of chemical 
fertilisers accounts for a significant  
 
CO2e emissions in agriculture, as they 
are mainly produced by energy from 
natural gas and coal.  
With a carbon-neutral fertiliser based on 
green ammonia from wind turbine 
power, emissions from the use of 
chemical fertilisers can be reduced by 
up to 30 per cent. 
During the next 9-12 months, the newly 
established company will carry out a 
series of feasibility studies, which will 
form the basis for decision-making for a 
possible investment in the production.  
 
Where our emissions come from 
 
Peat soil: 9%
Feed purchased and home-grown: 33%
Manure storage : 10%
Cow's digestion of feed: 41%
Energy: 5%
Other emissions: 2%
1.  Feed efficiency 
If farmers manage to maximise 
the milk per feed ratio and  
minimise feed waste, the milk 
will be more climate efficient. 
2.  Protein efficiency 
Carefully measuring feed with 
the right protein levels means 
less nitrogen, a greenhouse 
gas, in the manure. 
3.  Animal robustness 
Cows that live a long and 
healthy life will produce more 
milk over their lifetime which 
improves climate efficiency. 
4.  Fertiliser use 
Matching precisely the amount 
of fertiliser with the plants’ 
needs and using different 
methods to spread the muck 
can improve the yield per car-
bon emission ratio. 
5.  Land use 
Feed yield on farms can 
also be optimised to 
increase climate  
efficiency.

The effort to improve animal welfare is 
constantly in focus. It is also critical for 
Arla to continue developing and 
strengthening our farming practices in 
relation to protecting and improving  
nature on farms, especially in the areas 
of soil health, water-holding capacity 
and to enhance ecosystem services. 
Animal welfare in Arla 
In Arla, we strongly believe that animals 
should be treated well, and the welfare 
of our herds is a key concern for our cus-
tomers and consumers too. We put 
great efforts in ensuring that Arla cows 
are well-cared for: our owners have to 
submit an extensive report on their 
herds’ well-being four times a year.  
Animal robustness is one of the Big5 lev-
ers in our incentive model. To gain evi-
dence on how to improve on this lever, 
in 2022 we launched a pilot with 19 
farms, where farmers, supported by vet-
erinarians, focus on how to prevent the 
most common cow diseases. 
However, we know that it is not good 
enough that cows live a long life. We 
also want to ensure that our farmers’ 
cows are healthy and happy. On our UK 
innovation farm, we are working on cre-
ating a ‘happiness’ measure based on 
automated animal behaviour monitor-
ing. This project aims to explore and 
identify positive behaviours that can be 
used as further welfare indicators for 
dairy cattle.  
In an audit process harmonised across 
all owner countries, farmers are also vis-
ited by external experts specialised in 
animal welfare at least once every three 
years, to have their herds checked-on. 
We report the result of these audits in 
our ESG section. Read more on page 
135. 
Biodiversity and soil  
health in focus 
Addressing climate change must go 
hand in hand with tackling biodiversity 
loss – both are crucial for our planet’s 
future survival. All Arla farmers are com-
mitted to maintaining and enhancing 
the nature and biodiversity on their 
farms, and to engage in farming prac-
tices that enhance carbon sequestration 
in the ground.  
 
 
 
In our new Sustainability Incentive 
model farmers can earn 8 points for 
their actions to conserve biodiversity 
and carbon farming. The levers for  
carbon farming were defined based on 
the fact that plants with bigger roots  
increases carbon capture, therefore we 
would like to encourage farmers to grow 
grass and keep permanent grasslands, 
as those have the most roots. As for bio-
diversity, farmers initially can collect 
points for submitting their Biodiversity 
and Soil Health Check data. 
 
 
 
 PROTECTING COWS AND NATUREMILK IS OUR KEY RAW MATERIAL, AND WE WANT IT TO BE PRODUCED RESPONSIBLY, WITH CARE FOR COWS AND NATURE. 
98.4% 
No major cleanliness issues 
99.8% 
No major body condition issues 
99.5% 
No major mobility issues 
100% 
No injury issues 
1 Share of audited farmers without major issues in animal welfare

In 2022, our scope 1 and 2 emissions 
decreased 4 percentage points and 
reached a total reduction of 29 per cent 
compared to our 2015 baseline.  
This year, we faced the short-term need 
to convert to oil from natural gas due to 
the war in Ukraine to ensure supply 
continuity. We were very conscious of 
the increased emission from this 
conversion as oil is approximately 30 per 
cent more polluting than natural gas 
measured on CO2e.  
Until the switch can be made from oil 
back to gas, we will offset the increased 
emissions with electricity certificates. 
Our long-term plans to accelerate our 
transition from fossil energy with a num-
ber of initiatives such as energy optimi-
sation, electrification, green electricity, 
alternative thermal energy are still  
on track. 
 
 SUSTAINABLE PRODUCTION AND LOGISTICS ACHIEVING CARBON NET ZERO OPERATIONS BY 2050 IS THE SUSTAINABILITY TARGET FOR OUR DAIRY PRODUCTION SITES AND OUR LOGISTICS NETWORK.OUR STRATEGY FOCUSES ON TWO KEY DIMENSIONS FOR BOTH: REDUCING ENERGY AND FUEL CON-SUMPTION THROUGH BETTER EFFICIENCY,AND TRANSITIONING TO RENEWABLES.
29% 
Scope 1 and 2 CO2e emission 
reductions 
Strategic ambition 
We aim for 63 per cent reduction in scope 1  
and 2 emissions by 2030 (baseline: 2015) .

Energy and fuel efficiency 
In 2022, we saw a need for accelerating 
our energy efficiency plans at our sites 
as energy prices skyrocketed, and we 
faced big risk of energy disruptions. We 
therefore launched two sustainability 
programmes to help accelerate the en-
ergy reductions, build clear investment 
roadmaps and start our transformation 
journey.  
Site sustainability programme 
Our site sustainability programme was 
rolled out to 6 of our biggest C02-emit-
ting sites in 2022. The sites sustainabil-
ity programme builds a tailored transfor-
mational plan for the sites and it  
spans from engagement initiatives,  
energy optimisation boost, external 
thermal system transformation study  
to energy competence mapping and  
focused energy performance manage-
ment.  
Site management and employees take 
an active role in defining a plan, as we 
believe a key enabler for success is that 
everyone at the sites takes ownership of 
the journey. When the programme is  
finalised on a site, the site will have a 
clear roadmap to reach their 2030 tar-
get including investment plans, KPI 
structure and capability upskilling as 
needed.  
Pronsfeld in Germany is one of the sites 
which completed the site sustainability 
programme. They identified 55 initia-
tives yielding 35,000 tons CO2e reduc-
tion (-67%) over 7-8 years, exceeding 
their 2030 target by 3,000 tons, but 
now the hard work starts in implement-
ing these initiatives.  
Quick wins in 2022 
We also offered the assessment of 
quick-win areas for our 60 sites and 
logistics centres. We identified three 
areas for 2022, through a supplier-lead 
screening and assessment process: 
· Insulating steam and hot water pipes 
and valves to minimise heat loss  
· Replacing and upgrading pumps to be 
more energy efficient 
· Replacing light bulbs with LED lamps 
for more efficient lighting. 
 
Collaborating with customers 
to optimise routes 
Route and delivery optimisation in 
Denmark, Sweden and the UK brought 
significant emissions savings during the 
year. We proactively engaged our key 
customers and logistics suppliers in all 
three countries, organised workshops 
with them, and as a result we decreased 
delivery frequency and reduced CO2e 
emissions.  
One of the most successful collabora-
tions of 2022 was with one of our key 
customers in the UK. For larger stores of 
this customer, we directly deliver milk 
from our warehouses, however smaller 
shops pose a challenge, as delivering 
there often requires multiple drops due 
to lack of storage capacity in the shop.   
Together with our customer, we came 
up with the solution of delivering to 
their depots instead. To make this possi-
ble, we started to box our milk bottles  
instead of delivering them on trollies as 
before – this way the depot could han-
dle the packages.  
The initiative significantly lowered the 
delivery frequency, saved CO2e, and  
improved service level and availability 
for the stores participating. 
 
 
Where our emissions come from 
 
Production: 89%
Logistics: 11%

Scaling up solar power 
To reach our ambitious green electricity 
target we entered into a 10-year power 
purchase agreement in Denmark with 
Better Energy for the usage of four new 
solar parks. The solar parks will cover ap-
proximately one third of Arla's electricity 
consumption in Denmark by 2024. It is 
the most extensive agreement on  
renewable electricity without public 
subsidies in Danish history. Besides  
Denmark, Arla also made a significant  
investment in solar power in Tychowo, 
Northwestern Poland, where we have a 
packaging, mixing and distributing site. 
The solar panels will cover 85 per cent 
of the site’s electricity demand. We also 
installed solar panels on the rooftop of 
our production site in Bahrain, which will 
cover 20 per cent of the site’s electricity 
needs. 
Wind power purchase 
agreement 
In the fall we entered into a 10-year 
power purchase agreement with  
Eurowind Energy, which, combined with 
the Better Energy contract, means that 
we secured 100 per cent green electric-
ity for all our production in Denmark – 
next step is to enter into similar setups 
in other markets where we operate. 
Over the course of the 10-year agree-
ment, which will come into effect in 
2025, the green energy from the tur-
bines will provide an annual saving of 58 
million kg of CO2e, which corresponds to 
8 per cent of Arla's total CO2e footprint 
for scope 1 and 2. 
Piloting new technologies  
with fossil free fuels 
To gather a better understanding of 
where we could scale up transitioning to 
fossil free fuels in our logistics fleet and 
production sites, we continued to test 
several new technologies in 2022. We 
continued our trials with biogas trucks, 
which are run by biogas produced pri-
marily from cow manure. We started a 
successful collaboration in Sweden with 
some of our gas suppliers to ensure bio-
gas circularity, and explored how we 
could scale the number of ‘poop trucks’ 
in the UK. Also, we extended our electric 
vehicle fleet in Sweden and looked at 
the potential in intermodal transporta-
tion in Germany, where we tried to use 
different types of vehicles to cover one 
of the key logistics routes. In production 
we have engaged with suppliers in  
Germany and Denmark with the aim to 
pilot hydrogen in our production facili-
ties in Pronsfeld and Hoco.  
Combatting food waste  
with digital sensors 
We continuously work on reducing our 
food waste to ensure proper utilisation 
of our milk, which increases the value 
we add to our owners’ milk, and also 
means more nutritious food for the 
growing population.  
In three of our UK production sites, we 
saved around 3 million litres of raw milk 
this year by installing real-time material 
loss sensors. These enable us to meas-
ure if there is milk in the water used for 
flushing and cleaning, and find patterns 
which can be used to reduce or elimi-
nate the wastage of milk. The sensors 
measure whether the liquid going 
through the pipes is water, a mix of wa-
ter and milk or milk. Based on the meas-
urement, the liquid is s either automati-
cally discarded as waste water or col-
lected to use for, e.g., animal feed or  
biogas. With this system, the amount  
of milk in waste water was reduced by 
10-14 per cent compared to last year. 
 SWITCHING FROM FOSSIL TO RENEWABLE ENERGY IS AN IMPORTANT LEVER TO FULFIL ARLA’S SCOPE 1 AND 2 REDUCTION AMBITION. OUR KEY FOCUS IS SECURING RENEWABLE ELECTRICITY FOR ALL OUR SITES, AND REPLACING NATURAL GAS WITH BIOGAS.
100% 
Green electricity  
In Denmark, it is fully 
secured that we will 
reach the electricity 
target. In coming 
years, we’ll focus on 
other European 
countries.

n Arla, we use more than 300,000 
tonnes of packaging each year. Pack-
aging solutions must ensure the safety 
and quality of food products, with the 
lowest possible environmental footprint 
while minimising food waste. We strive 
to ensure that no material goes to 
waste, that we keep packaging emis-
sions at a minimum and that we do not 
deplete any natural resources that can-
not be renewed. We also design our 
packaging so it can be sorted, collected 
and recycled. 
Strict legal requirements related to food 
safety and hygiene make packaging  
design complex. Additionally, packaging 
must safeguard our products during dis-
tribution, in the store and in our home.  
Packaging is also essential to securing 
access to our nutritious products around 
the world. We are selling our products in 
more than 144 different countries with 
very different collection and recycling 
infrastructure, and especially in our  
international markets some materials 
cannot yet be recycled. 
 
 PROGRESS TOWARDS FULLY SUSTAINABLE PACKAGING ARLA’S PACKAGING AMBITION ‘TOWARDS FULLY CIRCULAR PACKAGING 2030’ IS A STRONG COMMITMENT TO USE RESOURCES IN THE BEST POSSIBLE WAY TO REDUCE OUR CLIMATE AND ENVIRONMEN-TAL IMPACT. THE AMBITION INCLUDES IMPROVING THE RECYCLABILITY OF PACKAGING AND REDUCING THE USE OF VIRGIN FOSSIL-BASED PLASTIC.I

2022 progress 
 
  Designed for recycling 93% 
  Recyclable in market where sold 54% 
  Designed for recycling, but not in the 
 
market where sold 39% 
  Not recyclable 7% 
 
 
 
Towards 100% recyclability 
Arla’s overall long-term ambition is to 
reach full recyclability. As a first step, our 
2025 target is to ensure that 100 per 
cent of packaging used for Arla’s own 
brands is designed for recycling. 
Given these conditions, especially  
related to our international markets,  
we measure our packaging recyclability 
progress towards two criteria:  
1. Designed for recycling 
This means that a packaging or a spe-
cific part of the material is recyclable in 
at least one of Arla Europe’s markets. 
2. Recyclable in market where sold  
This means that a packaging or a spe-
cific part of the material is recyclable in 
the market where the product is sold.  
During 2022, we developed a thorough 
methodology and tool that enables us 
to measure recyclability more accu-
rately and use the data transparency to 
prioritise initiatives within recyclability. 
A comprehensive assessment is made 
for each material to determine whether 
it is recyclable in a given market, based 
on commonly acknowledged references 
for recyclable packaging design and re-
cycling systems in that market. Each as-
sessed product packaging unit is con-
verted into weights of different materi-
als used and multiplied by sales vol-
umes. The consolidated number is cal-
culated as the weight of sold recyclable 
packaging material compared to the to-
tal weight of packaging materials used. 
What is virgin fossil-based plastic? 
Virgin fossil-based plastic means plastic 
derived from fossilised material such as 
crude oil. In order to phase this out we 
use less plastic and better plastic, priori-
tising recycled plastic and renewable 
material (such as paper and cardboard). 
 
 
  SKYR IN RECYCLED PLASTIC CUPS
Our popular Arla Skyr Icelandic style  
yoghurt brand converted 7 per cent of 
its portfolio from virgin fossil-based plas-
tic to cups made with 100 per cent recy-
cled plastic. This has halved the CO2e 
emissions of the packaging. 
 
 ARLA’S FIRST-EVER RECYCLABLE CHEESE FOILS LAUNCHED IN UK
In 2022, we launched fully recyclable 
packaging for a selection of our cheeses 
in UK (such as Apetina white cheese and 
paneer). Cheese foils are traditionally 
not designed to be recycled so this is 
the start of a long journey for Arla and 
will continue towards 2025. 
 
 DANO SACHETS READY TO BE RECYCLED
Creating recyclable packaging to reduce 
littering for some of our markets has  
its own challenges. An example of this  
is our powdered milk sachets sold in 
Bangladesh. These sachets are tradition-
ally not recyclable due to a mix of plastic 
and aluminium. In 2022, we reached a 
breakthrough solution on our popular 
affordable nutrition product, Arla® Dano 
Daily Pushti. Through a partnership with 
our packaging supplier, Arla developed a 
simplified sachet and established a pilot 
recycling project with local collection 
stations to recycle these sachets into 
other uses such as plastic furniture.

ur suppliers from all over the world 
have a major impact on our sustain-
ability performance, and we expect 
them to sign our code of conduct for 
suppliers, which governs environmental, 
social, business ethical and human 
rights aspects. Our ways of working in 
our upstream supply chain is outlined in 
our Statement on Responsible Sourcing.  
Global purchasing policy  
Clear and consistent procurement prac-
tices are fundamental to minimising 
risks to food safety, the environment 
and human rights in our supply chain. 
Our policy sets out 11 principles for pur-
chasing in Arla to ensure a clear and uni-
form process when buying goods and 
services. Among other procedural re-
quirements, the policy also requires 
compliance with Arla Foods’ Code of 
Conduct for Suppliers. 
Our Code of Conduct for suppliers was 
revised and further strengthened in 
2022 in areas related to climate, health 
and safety and labour rights. As a result, 
we have now more firm requirements 
towards suppliers, for example regarding 
working hours and recruitment prac-
tices. 
Supplier audits  
During 2022, 58 physical, virtual and 
desktop supplier audits were conducted.  
Risk commodities  
Based on our thorough risk analyses, 
and in line with international practice, 
we identified some commodities we use 
that are linked to particular sustainability 
challenges. These are palm oil, soy,  
cocoa and forest fibre1. We have sourc-
ing position papers to mitigate the risks 
and contribute positively to more sus-
tainable and responsible practices. This 
includes reducing the risk of negative 
impact on human rights and the envi-
ronment.  
 
 
 RESPONSIBLE SOURCING 
Cocoa 
Share of certified cocoa 
100% 
2021: 100% 
Our policy is to use 100 per cent 
UTZ/Rainforest Alliance-certified cocoa 
for our branded products, and we con-
tinue to comply with this goal.  
Soy 
Share of certified soy 
100% 
2021: 100% 
In Arla, soy is used .as an ingredient, pri-
marily in dairy cow protein feed, and to a 
smaller extent in some Arla products. 
Our ambition is that all soy is responsibly 
sourced, defined as certified according 
to internationally recognised third party 
certifications systems. In Arla, soy in ani-
mal feed must be certified according to 
the ProTerra or Round Table of Respon-
sible Soy (RTRS), or covered with RTRS 
credits. 
Palm oil 
Share of certified palm oil1 
86% 
2021: 86% 
Arla’s ambition is to buy only segre-
gated, certified, and traceable palm oil 
ingredients. When this is not possible, 
we use mass-balance or cover the use 
by Round Table of Sustainable Palm Oil 
(RSPO) credits.  
Forest fibre 
Share of certified forest fibre in Europe 
83% 
2021: 83% 
Although we use recycled fibres wher-
ever possible, some packaging requires 
virgin forest fibre to comply with food 
safety regulations. Our ambition is to 
use only FSC®-certified forest fibre  
materials in Europe. Where FSC®-certi-
fied forest fibre is not available, we  
accept forest fibre from national certifi-
cation schemes if a PEFC due diligence 
process has proven it comes from a  
reputable source. 
1Vanilla is also a key flavouring ingredient in many Arla products, however, due to the low volumes used in total we do not have a 
specific target related to vanilla. In 2021, we joined the Sustainable Vanilla Initiative (SVI), which aims to secure a stable supply of 
high-quality vanilla that is produced in a socially, environmentally and economically sustainable way. A TRANSPARENT AND WELL-MANAGED SUPPLY CHAIN IS FUNDAMENTAL TO THE RESPONSIBLE OPERATION AND GROWTH OF OUR BUSINESS WITH MINIMAL RISKS. WE WORK CLOSELY WITH SUPPLIERS TO ENSURE ALL ENVIRONMENTAL, SOCIAL AND ETHICAL REQUIREMENTS ARE MET.O

Arla®'s gut health range is on a mission to 
make it easy and enjoyable to nourish your 
gut with fermented bases that are diverse in 
good bacteria cultures and added vitamins, 
minerals and fibre. 
 ARLA®CULTURA

SOCIALAMBITION AND PROGRESSHOW WE CREATE VALUEPERFORMANCE REVIEWRISKS & OPPORTUNITIESENVIRONMENTAL AMBITION AND PROGRESSSOCIAL AMBITION AND PROGRESSCORPORATE GOVERNANCECONSOLIDATED FINANCIAL STATEMENTSESG STATEMENTSANNUAL REPORT 202246
A core responsibility for Arla is to ensure 
that our products are safe for consumers 
to eat and drink. The target for recalls is by 
default defined as zero. 
Read more on page 47. 
 
 
 INCREASE ACCESS TO AFFORDABLENUTRITION
 2030 ambitions  Access to 
adequate, affordable and healthy 
food is a basic human right, and we 
want to provide high-quality 
products that meet consumers' 
nutritional 
needs around the world. Our 
ambition is to reach more and 
more non-European consumers 
with affordable food. 
Read more on page 48. 
 
 INCREASE GENDERDIVERSITY
Our long-term 2026 target to increase 
gender diversity is to ensure that there is 
no more than 60 per cent of the same 
gender in any team in Arla. We are also 
aiming to achieve this in our top 
management teams.  
Read more on page 51. 
 
Our safety vision for our colleagues aims at 
having zero lost-time accidents per million 
working hours. 
Read more on page 52. 
 
2
4
1
0
1
2018
2019
2020
2021
2022
ZERO PRODUCT RECALLS
2023 TARGET
Women
Women
Men
MenALL EMPLOYEESMANAGEMENT27%
40-60%28%
2022
2022
2026
8
6
5
4
4
2018
2019
2020
2021
2022
ZERO ACCIDENTS 
2023 TARGET

Our health strategy  
In 2022, we laid the groundwork for up-
dating our 2026 health strategy. Striking 
a balance between protecting planetary 
boundaries and providing the growing 
world population with nutritious food is 
a key challenge for Arla and the food in-
dustry in general. Solving this challenge 
is our licence to operate. Therefore, 
stepping up our healthy innovations is a 
core element of our new strategy. We 
aim at reaching more people to inspire 
healthy food preparation and help peo-
ple eat well. Improved access to nutri-
tion and affordable foods are also part of 
our strategic ambitions.  
Our guiding star – Arla® 
Nutrition Criteria 
When we are developing new, more sus-
tainable and healthier products, our 
guiding star is the publicly available 
Arla® Nutrition Criteria, a set of internal 
standards that reflect current scientific 
evidence and guidance from key global 
health authorities. The criteria set re-
quirements for protein and calcium con-
tent and limit the amount of added sug-
ars, salt and fat. Following the criteria, 
we have been making significant 
improvements to the health value of our 
products.  
Food safety first 
Helping people to eat a healthy diet is 
important, but first and foremost we 
must make sure that our products are 
safe to eat and drink. By following the 
principles set out in the global Arla 
quality and product safety policy, we 
continue to strengthen our quality cul-
ture resulting in one recall in 2022. Our 
Quality, Environment, Health and Safety 
(QEHS) manual is updated yearly since 
its launch in 2020. Aimed at reducing 
complexity and aligning ways of work-
ing, the manual covers all the QEHS  
requirements included in international 
standards, our internal requirements 
and the requirements of several  
customers.  
Labelling checks on our branded prod-
ucts were performed on our European 
and International markets in 2022. Both 
mandatory and voluntary information 
for consumers was evaluated on ran-
domly selected products. The checks 
showed that with strong collaboration 
between local and global teams we were 
able to ensure regulatory compliance on 
all markets. There were no findings at 
any authority inspection that resulted in 
a fine. In cases of incompliance or incon-
sistency, the markets were informed 
about measures to improve.  
1 
Product recall in 2022 
One of Arla's core responsibilities is to ensure 
that products are safe for consumers to eat and 
drink. The target for recalls is by default defined 
as zero.

Research partnerships to  
shape the future of nutrition  
To be at the forefront of dairy nutrition 
and keep discovering the health effects 
of dairy, Arla takes part in a research 
partnership with the two largest Danish 
universities under the name Arla Foods 
for Health (AFH). Three new research 
projects were selected to receive financ-
ing for 2022 in the total amount of  
EUR 1.8 million. The private-public part-
nership consists of Arla Foods, Arla 
Foods Ingredients, University of  
Copenhagen and Aarhus University. 
The ambition of this partnership is to 
push boundaries and foster world-class 
dairy science. Subsequently results can 
be applied in food design and new nutri-
tional solutions with a potentially posi-
tive impact on global nutritional status 
and public health. AFH and its partners 
are also committed to creating impact 
by disseminating scientific insight. The 
collaboration between the partners in-
cludes a targeted and coordinated 
public outreach that can serve as a basis 
for a science-based nutrition and health 
dialogue with external stakeholders – in-
cluding authorities, NGOs, universities 
and other industries. 
The three projects awarded in 2022 will 
investigate: 
· The link between fermented dairy 
products and metabolic health 
· How caseins effect gut comfort in  
infants 
· The effect of a conventional diabetes 
diet versus a carbohydrate-reduced 
high-protein diet on type 2 diabetes 
patients.  
Of the ten current projects two were fi-
nalised during 2022. A total of 41 papers 
have now been published based on sup-
ported projects. 
Improving access to  
healthy nutrition 
Malnutrition exists in nearly every coun-
try of the world, putting people at risk of 
diet-related diseases and leading to mil-
lions of deaths. Arla is committed to im-
proving access to affordable dairy nutri-
tion for lower income consumers in de-
veloping countries. We are focusing on 
addressing the needs of groups experi-
encing or at high risk of undernutrition 
and micronutrient deficiencies through 
affordably priced dairy products; for  
example, in Bangladesh with Dano Daily 
Pushti, and in Nigeria, Senegal and 
Ghana with Dano Cool Cow. Before 
launching these products, we con-
ducted thorough analyses of the mar-
kets to create a price point that works 
for low-income consumers there. 
All-time high inflation rates in food 
prices led to a severe decrease in pur-
chasing power among low-income con-
sumers during 2022; however, we man-
aged to reach over 87 million consum-
ers with our affordable nutrition prod-
ucts. To address the challenge of lower 
budgets, Arla came out with a new, more 
affordable milk-based powder named 
"Dano Sabi" in Nigeria and "Hye me ma" 
in Ghana.  
In Bangladesh, we also addressed the 
growing inflation by reaching out to 
more people in need of affordable dairy 
nutrition. However, 2022 was particu-
larly challenging for the Pushti Ambas-
sadors Programme1 in Bangladesh, 
which aims at bringing affordable nutri-
tion to the doorsteps of rural house-
holds through a sales force of female 
entrepreneurs. Poor recruitment and 
retention during 2022 led to limited  
rural reach. Therefore, a revised model 
and other partner agencies to expand 
Arla's reach to rural communities is be-
ing negotiated. 
1.8 
EUR million for health research projects 
Three new health nutrition research projects 
received funding of EUR 1.8 million from the Arla 
Food for Health partnership this year. 
1  The programme is in its third year and is supported by the Danish Ministry of Foreign Affairs, and implemented by Dutch NGO, bopinc, and local social enterprise, iSocial.

Reducing salt in cheese 
products 
Salt is one of the essential elements that 
cause differences in food taste. How-
ever, too much salt in food is not good 
for our health, so we work hard at im-
proving our recipes to provide the same 
taste experience with less salt. One of 
our key focus areas for this is our cheese 
products in MENA. In 2022, we man-
aged to lower the salt content of the 
popular Puck® cream cheese jars and 
our feta cream cheese by 14 per cent 
and 26 per cent, respectively.  
 
Arla Protein skyrocketed 
growth 
Natural, high in protein and low in sugar 
and fat, Arla Protein is a success story. 
Arla Protein has not targeted profes-
sional or hardcore gym goers but all 
consumers living an active lifestyle and 
championing all shapes, sizes and back-
grounds. By focusing on the fuelling 
power of protein alongside delicious 
products, such as milk-based beverages, 
quarks and puddings, Arla Protein has 
resonated with consumers and deliv-
ered 48.9 per cent volume growth 
in 2022. 
Milk-based powder launched 
in Africa  
The increasing food insecurity due to 
global inflation in 2022 posed an urgent 
task of increasing access to affordable 
nutrition products. To address this chal-
lenge, our global nutrition and innova-
tion team created a new milk-based 
powder named "Dano Sabi" in  
Nigeria and "Hye me ma" in Ghana.  
To make it even more affordable, we  
reduced the protein content compared 
to milk powder, but ensured it is a 
healthier, more nutritious alternative  
to other creamers. 
 
From papaya waste to dried 
fruit snack with whey protein 
Papaya is the fourth most popular fruit 
crop in Ethiopia, and yet around 30 per 
cent of the annual harvest is lost 
through spoilage. As a product innova-
tion partner in a public-private project 
led by GAIN, AFI has developed proto-
type recipes for a snack bar made with 
papaya pulp and milk and whey-based 
ingredients. The objective is to reduce 
post-harvest loss and provide easily  
accessible nutrition for low-income con-
sumers. In 2022, AFI organised technical 
training for the staff of the Ethiopian 
company that will produce the bar. 
Building up the dairy supply 
chain in Ethiopia 
Ethiopia has 12 million dairy cows, but 
much of their milk never reaches con-
sumers. Our subsidiary, Arla Foods Ingre-
dients (AFI), is lead business partner in a 
Global Alliance for Improved Nutrition 
(GAIN) project to build a sustainable 
dairy supply chain in the country. As part 
of that, the project partners equipped a 
local dairy to produce an affordable 
yoghurt. The yoghurt recipe contains 
our whey permeate – an ingredient rich 
in milk minerals and lactose – to opti-
mise yoghurt production. Following  
acceptability testing with consumers 
market launch was delayed by ongoing 
geopolitical challenges. 
 
 WHAT WE BRING TO THE TABLEHOW WE CREATE VALUEPERFORMANCE REVIEWRISKS & OPPORTUNITIESENVIRONMENTAL AMBITION AND PROGRESSSOCIAL AMBITION AND PROGRESSCORPORATE GOVERNANCECONSOLIDATED FINANCIAL STATEMENTSESG STATEMENTSANNUAL REPORT 202249WE BELIEVE THAT DAIRY PRODUCTS PLAY A POSITIVE ROLE IN A SUSTAINABLE DIET,BALANCING THE ENVIRONMENTAL IMPACT OF PRODUCTION WITH THE NUTRITIONALVALUE OF THE FOOD. OUR HEALTH STRATEGY COMES ALIVE THROUGH OUR BRANDS,PRODUCTS AND INNOVATIVE PROJECTS AIMED AT CREATING AFFORDABLEQUALITY NUTRITION.

Reaching millions through 
recipe inspiration 
We believe inspiration and knowledge 
about cooking is the best way to de-
velop good food habits, and we provide 
cooking inspiration around the world on 
our national websites and in brochures. 
We are also increasingly using social me-
dia platforms to more actively engage 
consumers and spread the word about 
sustainable and healthy eating.  
 
Our Instagram account, @arladk, target-
ing the Danish market with recipes and 
cooking hacks, shows how effective this 
tool can be. The follower count of  
@arladk grew from 60,000 to over 
171,000 during 2022, and the content 
had over 40 million views.  
The engagement rate is one of the best 
among similar big brands, and it proved 
to be also significantly more cost effec-
tive to reach consumers via this plat-
form. 
Habits, nonsense and friends 
Our popular educational programme  
for primary school children, Food mov-
ers, reached over 56,000 students in 
Denmark. This year, the teaching mate-
rial, divided into three different levels, 
focused on how to change habits 
around food, how to learn to be critical 
about information circling on social  
media, but first and foremost how food 
is best enjoyed together. The pro-
gramme has been running since 2016 
with yearly changing topics, this year  
being "Habits, nonsense and friends." 
Making sure kids do not  
skip breakfast 
As a supplier to school canteens, we 
have an important role in helping  
students get a nutrient-rich diet that  
enables them to feel good during the 
school day and to lay the foundation for 
good eating habits throughout life.  
Regular breakfast is one of the most  
important parts of healthy eating habits, 
and for that reason Arla Sweden started 
a free breakfast – skolfrukost – pilot in 
2018. The results, with students arriving 
on time, calmer classrooms, and better 
self-perceived school performance, 
have created a lot of attention and in-
spired more schools and municipalities. 
In 2022 Arla cooperated with five 
different schools that served free school 
breakfast and shared the learnings to 
schools and municipality from all over 
the country.  
Ensuring that school children have  
access to nutritious breakfast is also a 
focus area for Arla UK. We have been 
working with Magic Breakfast1, a charity 
aiming to end hunger as a barrier to  
education in UK schools, to provide over 
950,000 milk donations (enough to fill 
almost 9.5 million bowls of cereal) to 
schools across the UK since 2020.  
As well as providing milk for partner 
schools, Arla and Magic Breakfast are on 
a mission to help children better under-
stand where the milk comes from. In 
2022, for the first time during the part-
nership we invited primary school chil-
dren down to a farm in Yorkshire to see 
the action unravel and help them under-
stand nature and how food is produced. 
The best lunchbox comes  
back empty 
Our cheese brand in MENA, Puck®,  
has always been an important source of 
cooking inspiration in the region. In 
2022, Puck® ran a campaign targeted at 
mothers who are searching for ways to 
make their kids' lunch boxes healthier 
and more nutritious. In Middle Eastern 
schools, the first lunch box is served 
early in the day, almost as an extension 
of breakfast, therefore it is a key occa-
sion to form healthy eating habits.  
Recipes and packing inspiration were 
developed together with our Global  
Nutrition team to make sure the lunch-
boxes contain everything necessary for 
a balanced meal. The lunchbox cam-
paign was designed and executed by the 
MENA branch of our in-house agency, 
The Barn, and consisted of search en-
gine-friendly articles and promotions 
through local social influencers. The 
content was well received by mothers, 
as evidenced by the increased engage-
ment metrics across Puck®'s channels. INSPIRING GOOD FOOD HABITSWE WANT TO INSPIRE CONSUMERS BY OFFERING PRODUCTS THAT MEET THEIR VARYING NEEDS AND INVITE THEM TO PARTICIPATE IN ACTIVITIES THAT GIVE INSIGHTS INTO THE ORIGINS OF OUR PRODUCTS, AND SUPPORT HEALTHY HABITS AND COOKING WITH LESS WASTE.
1 Arla donates EUR 1.3 million to the foundation annually.

ur new strategy is part of our Business 
Strategy, Future26. We strongly  
believe that diversity enables innova-
tion, better decision-making and higher 
performance. 
Our targets and progress 
To ensure tangible progress, our new 
strategy measures diversity and inclu-
sion using three key performance indi-
cators: inclusion favourability, gender 
equality and ethnic diversity in the  
workforce.  
Inclusion favourability is measured using 
an index based on answers from our 
yearly employee engagement survey.  
In 2022, the average score across the  
index was 86 per cent, and one of the 
aspects, belonging, increased by six 
points compared to 2021. 
For gender diversity we have a short-
term (2023) target of no more than  
70 per cent of one gender in the work-
force, and our long-term 2026 target 
aims at having no more than 60 per cent 
of one gender in a team across the top 
three organisational levels in Arla. In 
2022, 42 per cent of our office workers 
were women.  
Leadership training to build  
an inclusive culture 
To roll out our strategy and make it 
come alive, we needed to onboard and 
align the leadership layer first-hand, so 
we organised onboarding sessions and 
leadership trainings for top-and mid-
managers across the organisation in 
2022. More than 500 leaders and col-
leagues across 50 teams spent four 
hours on what diversity and inclusion 
means, how our subconscious biases  
influence our everyday decision-making 
and how to fight these biases. 
Diversity and inclusion 
dashboard 
We also educated people leaders in how 
to use our newly established D&I Dash-
board in Power BI based on our global 
gender equality target. Each people 
leader has data on their own team 
across data points such as Employee 
Lifecycle, Performance, Promotions  
and Equal Pay. Data transparency and 
accountability are important to reveal 
potential subconscious biases. 
Competitive and equal  
pay across all job bands 
We strive to offer fair and competitive 
remuneration at market level and in line 
with local legislation and have a struc-
tured approach to remuneration, ensur-
ing that salaries are unbiased towards 
gender, age, seniority, tenure, national-
ity or any other factors. 
28% 
Share of women in management 
Our target for gender balance in management – 
defined as one level below our Executive 
Management Team – is no more than 60 per 
cent of one gender by 2026.

ustainability is not just about reduc-
ing our climate impact. Sustainability 
is also about the people working for us 
in the entire value chain. We listen, we 
act and we try to lead by example in our 
industry. 
Employee engagement survey 
points out focus areas 
Our annual engagement survey is an  
important tool for ensuring our global 
organisation is a good place to work. 
This year's response rate was 86 per 
cent, on a par with last year. This means 
that more than 17,000 colleagues took 
the time to complete the survey. The 
53,061 individual comments set a new 
record, providing a rich dataset for iden-
tifying areas in need of improvement. 
Based on this feedback, our Executive 
Management Team (EMT) identified 
three focus areas for 2023. One is unac-
ceptable behaviour, which will remain a 
top priority for the third year running.  
The number of reported unacceptable 
behaviours dropped significantly since it 
became a focus area; however, as we 
have a target of zero tolerance this will 
continue to be a key priority. 
The second priority area is eradicating 
unnecessary bureaucracy. Specifically, 
we need to look at the tools we use, how 
we collaborate and our decision-making 
processes. These are the areas the EMT 
and other leaders will analyse in greater 
detail in 2023. 
 
86% 
Response rate in our yearly employee 
engagement survey 
The result is on a par with last year and shows 
strong engagement. 
The third area is strengthening our capa-
bilities to deliver our Future26 strategy. 
Enablement is a key theme for the com-
ing year, which will be reflected in local 
business plans as well.  
Keeping our employees safe 
across the value chain 
Arla has a comprehensive and long 
value chain and offers a large variety of 
jobs across geographies. Our employees 
are key to the success of Arla, and it is 
our ambition to provide all employees 
with safe and healthy working condi-
tions. 
Our vision is called "Zero Loss", towards 
which we made significant progress in 
the last five years. However, during 
2022 we saw a slight increase in our  
accident frequency rate, from 4.3 in 
2021 to 4.4 in 2022. Sadly, one fatality 
occurred at one of our Danish logistics 
centres in 2022. Our first priority is to 
support family and team members as 
well as investigating root cause of the 
accident to prevent it from happening 
again. Read more in our ESG section  
on page 128.  
In 2022, we continued the roll-out  
of our behaviour safety programme  
CornerStones. The programme includes 
trainings, self-assessments and process 
confirmations. Thoroughly investigating 
accidents and incidents, with shared 
learnings across markets and a trend 
analysis based on safety observations 
captured in our reporting system LIA  
resulted in a dynamic risk register, which 
allow us always to focus on the critical 
areas. 
We are also making sure that our basic 
rules are observed via a systematic  
approach by checking and validating 
compliance with key internal and exter-
nal procedures called Critical12. 
We are also protecting our employees 
through our partnership with SOS Inter-
national, where the key focus is risk miti-
gation when operating across borders 
and managing supply and distribution 
chains. 
Training colleagues is  
key to our growth 
Colleague development is essential to 
maintaining a high level of motivation 
and engagement and enabling the con-
tinued growth of our business. 
During the past two years, Covid-19 has 
accelerated the trend towards more 
online training, including the introduc-
tion of digital training technologies such 
as HoloLens and virtual reality. Even 
though we can now again sit together in 
"classrooms", online training proved to 
be so effective that we are aiming at 
conducting 80 per cent of training activ-
ities virtually. At our production sites, 
virtual technologies enable fast and 
easy upskilling.  
In 2022, there were 359 enrolments in 
leadership and people management  
development trainings.  COLLEAGUES IN FOCUSS
4.4 
Lost-time accidents per million working 
hours 
Our ambition is to have zero accidents per year.

Human rights governance  
Arla is committed to respecting human 
rights across our entire value chain. We 
adhere to the United Nations Guiding 
Principles on Business and Human 
Rights (UNGP) and the OECD Guidelines 
for Multinational Enterprises. Our work is 
guided by our Code of Conduct "Our  
Responsibility" and our human rights 
policy, in which we have elaborated our 
commitment and expectations to stake-
holders. Arla's human rights work is gov-
erned by our EMT and managed in vari-
ous business functions. We engage with 
stakeholders, including experts, unions, 
right-holders and NGOs, on our human 
rights management.  
Human rights due diligence 
Based on our analyses, Arla has the high-
est risk of causing, contributing or being 
linked to negative human rights impacts 
when operating in our non-European 
growth markets due to national contexts 
and the complexity of business opera-
tions. Therefore, we prioritise 
conducting human rights impact assess-
ments in these markets and also to carry 
out a due diligence process whenever 
we enter a new joint venture or receive 
an allegation. We continue to improve 
and implement our systematic human 
rights due diligence process in compli-
ance with UNGP and OECD, as illustrated 
below.  
Salient human rights issues 
Arla's salient human rights issues are 
identified based on our due diligence 
processes, risk assessments and regular 
stakeholder dialogues. Salient human 
rights are defined as the rights at risk of 
the most severe negative impact on 
people through business activities and 
relationships. The issues identified as 
most salient across Arla's value chain are 
working conditions, living standard, 
modern slavery, health and access to a 
grievance mechanism. 
Human rights risk assessments  
In 2022, Arla continued to identify and 
address potential and actual human 
rights risks and impacts in our value 
chain, with a focus on our business oper-
ations in the Middle East. Together with 
local teams, our global human rights 
team completed on-location human 
rights risk assessments in Qatar, Saudi 
Arabia and Bahrain. The purpose of the 
assessments was to follow up on human 
rights risks in our own operations and to 
include third-party employees at our 
sites, key suppliers and service providers 
in the assessments.  
Arla's salient human rights issues 
formed the basis for the assessments, 
with focus on particular risks in the  
region, including employer-provided 
housing standard, fair recruitment and 
passport withholding, working condi-
tions, health and safety, and wages. On 
all three markets, Arla's own operations 
showed solid performances and did not 
reveal critical risks in relation to Arla's 
salient human rights issues. Findings  
indicated a need for Arla to strengthen 
processes in relation to assessments of 
local suppliers and service providers. 
Further, the assessments identified  
actual risks in relation to third-party  
employees, key suppliers and service 
providers. Arla has initiated a dialogue 
with relevant external parties to address 
these risks, and we continue to follow  
up on action plans to resolve the identi-
fied issues.  
International dairy 
development 
We also continued our work on human 
rights risks related to our international 
dairy development programmes in  
Nigeria, Indonesia and Bangladesh. This 
includes addressing issues related to 
gender, land rights, security, food safety, 
health and safety in farming and  
processing as well as distribution.  
Code of Conduct for Suppliers 
and Business Partners 
It is essential for Arla to operate in a  
responsible manner, and we expect our 
suppliers and business partners to live 
up to the same standards. At the end of 
the year, we launched an updated Code 
of Conduct for Suppliers and Business 
Partners. The aim is to strengthen our 
human rights efforts to support suppli-
ers and business partners in understand-
ing our expectations and to prepare Arla 
for continued compliance with increas-
ing regulatory measures and documen-
tation requirements in relation to man-
datory due diligence in value chains. The 
ultimate goal is to minimise risk to peo-
ple and safeguard our business.  
Arla is a member of AIM Progress, which 
is a forum assembled to enable and pro-
mote responsible sourcing practices. 
The update is inspired by AIM Progress' 
work. 
 
 RESPECTING HUMAN RIGHTSWE ARE COMMITTED TO RESPECTING AND SUPPORTING INTERNATIONALLY RECOGNISED HUMAN RIGHTS AND TO PROMOTING MUTUAL RESPECT AND UNDERSTANDING IN OUR RELATIONSHIPS AROUND THE WORLD.HUMAN RIGHTS DUE DILIGENCE PROCESS

rla's salient human rights issues 
form the basis for our reporting 
structure. We report on findings from 
our global human rights work, including 
findings from risk assessments con-
ducted in 2022 in the Middle East. 
Right to enjoy just and 
favourable conditions at work 
Safe and healthy working conditions 
Over the year, we continued the imple-
mentation of Arla's global behavioural 
safety programme Arla CornerStones. 
The focus continues to be on increasing 
the maturity level in the health and 
safety work in production facilities glob-
ally. We see very strong performance in 
both our European and non-European 
markets. See page 52 for more about Ar-
la's health and safety efforts. 
Living wage 
Aligned with international frameworks, 
Arla understands and appreciates that 
paying living wages is one of the most 
important ways to support people to get 
out of poverty, realise human rights and 
achieve the sustainable development 
goals. We participate in the AIM Working 
Group on Living Wage to gain insights 
and share knowledge. 
 In 2022, we collaborated with the Fair 
Wage Network to finalise our pilot pro-
ject on three different markets (Poland, 
Senegal and the US), investigating the 
wages for our own as well as for third-
party employees working at our sites. 
Findings from the pilot project show that 
the employees most at risk of not re-
ceiving a living wage are the third-party 
employees. We have similar findings 
from employee interviews conducted in 
the Middle East. 
We will continue our work in 2023, in-
cluding more markets to get a more 
complete overview of Arla's living wage 
status and to evaluate and decide next 
steps.  
Right to adequate standard  
of living 
Employer-provided housing 
We continuously work to ensure ade-
quate accommodation for our migrant 
colleagues in Saudi Arabia, the United 
Arab Emirates, Oman and Qatar. In 2022, 
we were able to visit many of these 
housing facilities to follow up on im-
provement projects. During the visits, 
we identified that Arla-provided accom-
modation meets or exceeds ILO stand-
ards for employer-provided housing as 
well as local standards, leaving only mi-
nor improvement areas, such as availa-
bility of common recreational facilities.   
Land rights 
Involuntary resettlement may result in 
long-term hardship, impoverishment 
and conflicts for the affected communi-
ties and persons. When establishing the 
6,000-hectare Kaduna State-managed 
Damau Household Milk Farm, where Arla 
Foods Nigeria plays a pivotal role as an 
advisor, concerns were raised about how 
to mitigate potential adverse impacts on 
the settlers who are unable to continue 
farming in the project area. A plan for 
the inclusion of settlers was made, lead-
ing to the enrolment of 500 household 
members of existing settlers in the pro-
ject (equal to 50 per cent of the project 
beneficiaries), a grievance mechanism 
committee was established to handle 
reports of concerns and finally compen-
sation payment for landed properties 
was commenced.  
Right to health 
Nutrition 
All over the world, inflation and increas-
ing prices, also on food, put access to 
nutrition at risk. Arla seeks to improve 
access to nutrition where we operate,  
including at our sites. As an example of 
our efforts in 2022, we decided to run a 
pilot project on workforce nutrition in 
the United Arab Emirates.  
The objective of this pilot project was to 
assess our workforce nutrition pro-
gramme and identify opportunity areas 
for enhancement. The pilot revealed 
that we make health checks available 
and have a breastfeeding programme. 
However, we found gaps in workforce 
nutrition education and providing 
healthy food at work.  
Health insurance in non-European 
markets 
All Arla colleagues should have access 
to health services on fair terms. Findings 
from employee interviews in the Middle 
East show that health insurance is in 
place for all Arla and third-party employ-
ees. However, findings indicate that the 
insurance agreement varies for third-
party employees. We will address this 
with suppliers.  
Right not to be subjected  
to slavery, servitude or  
forced labour  
The risk of modern slavery remains a 
challenge in our value chain, and we 
continue our efforts to mitigate the 
risks. Examples of this include the 
launch of a revised purchasing policy, 
supported by training for new col-
leagues and cost owners, and ensuring 
that migrant worker colleagues keep 
their passports and identity documents, 
unless they require otherwise, and sign a 
letter of consent. Interviews conducted 
with third-party employees in the Middle 
East revealed indications of "hidden" 
fees being paid to recruitment agencies 
in the country of origin. We have ad-
dressed this directly and we are in dia-
logue with the third-party suppliers to 
end this practice.  
In Europe, we continue our work on 
awareness raising, including self-assess-
ment checkpoints on farms, and we will 
continue to explore opportunities for 
collaboration with our European Works 
Council for further collaboration and 
awareness raising. We have not received 
any modern slavery reports in 2022. 
Access to grievance 
mechanism 
In 2022, Arla continued to communi-
cate the recently improved whistle-
blower service "EthicsLine". During the 
year, we carried out a compliance check 
of 38 non-European entities, which 
shows an increase in EthicsLine aware-
ness of 40 per cent compared to 2020.  SALIENT HUMAN RIGHTSA

s a global, farmer owned dairy com-
pany we are committed to support-
ing local dairy farmer communities 
across the world. Arla's international 
dairy development programmes con-
tribute to building climate-resilient and 
commercially viable dairy value chains in 
strategic growth markets to improve 
farmer capacity and provide nutritious 
food to a growing population. 
Sustainable dairy value chains 
Dairy farmers in developing countries 
are hit the hardest by climate change, 
which is a critical challenge to food se-
curity, nutrition and livelihoods. Arla is 
committed to utilising its expertise to 
enhance resilience among dairy farmer 
communities to aid the transition to-
wards more robust and sustainable food 
systems. This includes promoting re-
source-efficient dairy farm production, 
improving animal welfare, enhancing 
food safety and quality, energy-optimi-
sation, reducing food waste and provid-
ing access to affordable nutrition. 
Strong dairy partnerships 
Arla's dairy development programmes 
build on strong partnerships between 
commercial and non-commercial part-
ners, including governments, local and 
international NGOs, funding institutions, 
research and knowledge institutions, 
farmer associations, farmer coopera-
tives and businesses. By combining 
knowledge, resources and networks, 
dairy development partnerships en-
hance the implementation of effective 
capacity building programmes and via-
ble business models to create a deeper 
sustainability impact. 
Resilient dairy farming  
in Nigeria 
We continued to scale up activities in  
Nigeria. Construction of the Arla Farm is 
progressing and is expected to be com-
pleted in March 2023. Plans for the  
import of heifers to the farm are being  
finalised, and we expect them to arrive 
in the first half of 2023, while milk sup-
ply is expected to begin in the third 
quarter. 
The Damau Household Milk Farm took 
off during 2022. Construction of infra-
structure and the selection of dairy 
farmers to be enrolled is progressing. 
The first farmer cooperatives have been 
registered with 20 per cent of women in 
leading positions. Arla will offtake the 
milk from the expected 1,000 farmers to 
create a stable income and to process 
the milk into nutritious dairy products 
meeting the growing needs and  
demands in Nigeria.  
The Milky Way Partnership continued its 
capacity building programmes in collab-
oration with the Advancing Local Dairy 
Development in Nigeria project 
(ALDDN), targeting pastoralist farmer 
clusters in Kaduna State. The delivery  
of sufficient milk volumes to Arla's dairy 
plant in Kaduna is still a challenge to  
be addressed. 
 
Going forward, the partnership between 
CORET, the Milk Value Chain Founda-
tion, SEGES Innovation and the Danish 
Agricultural and Food Council will focus 
on enhancing a climate-resilient, sus-
tainable and productive dairy value 
chain in Nigeria to reduce CO2e emis-
sions at local farm level by 50 per cent 
while improving farmer income from 
dairy significantly through stable sup-
plies to Arla. The new programme is sup-
ported by the Danish Ministry of Foreign 
Affairs and will kick off in 2023. 
Pilot organic dairy farming  
in Indonesia 
Arla is lead commercial partner in a  
partnership project managed by  
SEGES Innovation to support Indonesian 
cooperative farmers at Setia Kawan 
Nongkojajar Dairy Farm Cooperative 
(KPSP) in East Java in converting to or-
ganic dairy farming. During 2022, four 
organic demo-farms were established to 
become the first certified organic dairy 
farms in Indonesia. The first organic 
calves were already born in 2022, and 
the cows started to produce the first 
ever certified organic milk in Indonesia. 
Mazaraat Artisan Cheese has now be-
come a full member of the consortium, 
and will offtake, process and launch 
high-end organic cheese from 2023 
with support from Arla and Indolakto. 
The Indonesian NGO, Bina Swadaya, 
KPSP and The Danish Centre for organic 
farming have conducted training in or-
ganic cow management, barn design, 
organic feed, use of herbal medicine, 
conversion costs etc. KPSP has man-
aged to develop and produce the first 
organic feed. 
Transition to a greener dairy 
production in Bangladesh 
Arla is committed to supporting the de-
velopment and greenifying of the dairy 
industry in Bangladesh and helping to 
improve the livelihood of local farmers.  
In 2022, together with local business 
partner PRAN Dairy, and the Department 
of Agriculture, Dhaka University, Arla 
completed the first phase of the dairy 
development programme. This included 
a series of expert seminars on cow man-
agement, a training-of-trainers field visit 
focusing on capacity development and 
sustainable dairy farming practices, and 
recruitment and training of new farmers 
under the programme. 
 ENHANCING DAIRY FARMER COMMUNITIES IN DEVELOPING COUNTRIESA
Impact of Arla's international dairy development programmes 
3,291 
Farmers enrolled in Arla's international dairy development programmes (accumulated since 2017). 
24,350 
Farmer participants in capacity building activities (accumulated since 2017).

Arla® B.O.B milk, sold on our UK market, is a 
fat-free skimmed milk that tastes as full-fla-
voured semi-skimmed. It is free of artificial in-
gredients and additives, and is enriched with 
naturally occurring milk protein to deliver a 
taste as good as semi-skimmed. 
 B.O.BMILK
 
 
 
 
 
 
 
               CORPORATEGOVERNANCE

Arla is a cooperative owned by 8,492 
dairy farmers in seven countries. Ensur-
ing that all of our owners are able to 
raise their voice and seek representation 
for their opinions is essential in a trust-
worthy and successful cooperative. 
Therefore, Arla’s management is shared 
between elected owner representatives 
– our Board of Directors – and the cor-
porate executives of the company. The 
details of our governance are regulated 
by our Articles of Association. 
 
 
 
Cooperative Governance 
The two main farmer owner representa-
tion and decision-making bodies of Arla 
are the 19-member Board of Directors 
(BoD) and the 187-member Board of 
Representatives (BoR).  
Owners  
In 2022, 8,492 milk-producing farmers 
in Denmark, Sweden, Germany, the UK, 
Belgium, the Netherlands and Luxem-
bourg were the joint owners of Arla. The 
cooperative is divided into four geo-
graphical areas (Denmark, Sweden, the 
UK and Central Europe), which are fur-
ther divided into regions and member 
districts. All cooperative owners have 
the opportunity to influence significant 
decisions. In 2021, the cooperative had 
8,956 joint owners. The decline in the 
number of owners is partly due to farm-
ers who stopped producing milk or sold 
their business to another owner, and to 
a lesser extent due to owners resigning 
to supply another dairy company. This 
decline is in line with the trend seen in 
the whole dairy sector over a number  
of years.  
Board of Representatives  
The BoR is the supreme decision-mak-
ing body of our cooperative governance. 
It comprises 187 members, of whom 
175 are cooperative owners and 12 are 
employee representatives. Owner repre-
sentatives are elected every other year.  
 
 GOVERNANCE FRAMEWORKCOOPERATIVE GOVERNANCEBOARD OF DIRECTORS
14 owners, 2 external members and 3 em-
ployee representatives BOARD OF REPRESENTATIVES
175 farmer owners 
12 employee representatives REGIONSDISTRICTSOWNER NATIONALITIES
8,492 dairy farmers 
CEO and COO EXECUTIVE MANAGEMENT TEAM
Executive Board and  
6 officers EMPLOYEES
20,907 
 
DK 
 
SE 
 
CE 
 
UK 
DK SE CE UK 
DK 74 
SE 47 
CE 25 
UK 29 
· Europe 
· International 
· Global Industry 
Sales and Plan-
ning 
· Supply Chain 
· Agriculture,  
Sustainability and 
Communication 
· Marketing &  
Innovation 
· Human  
Resources 
· Finance, Legal,  
IT & Strategy

The next election is scheduled for May 
2024. The BoR makes decisions, includ-
ing appropriation of profit for the year, 
and elects the BoD. The BoR meets at 
least twice a year. 
District meetings  
Every owner of Arla is part of the mem-
ber district where their farm is located. 
Each year in March, owners convene for 
a local annual assembly in their respec-
tive districts to ensure their democratic 
influence on Arla’s decision-making. The 
members in the district elect members 
to represent their district on the BoR. 
The districts also have their own elected 
district councils. 
Regional boards 
In the Danish and Swedish area, the re-
gional board consists of the members of 
the Board of Representatives elected in 
the region. In the Central European and 
United Kingdom area, the regional board 
consists of all district council chairmen 
and vice-chairmen in the region. Re-
gional boards meet as soon as possible 
after the yearly district meetings to dis-
cuss owner matters relevant for the re-
gion. 
Board of Directors  
Elected by the BoR, the BoD is responsi-
ble for ensuring that Arla is managed in 
the best interest of the farmer owners. 
This responsibility involves strategic  
direction setting, monitoring the com-
pany’s activities and asset management, 
maintaining the accounts satisfactorily 
and appointing the Executive Board.  
They also take care of other stakeholder 
interests in the company: lenders, inves-
tors in bond instruments and employ-
ees, among others. The BoD consists of 
14 farmer owners and two external 
members elected by the BoR, and three 
employee representatives elected by 
the cooperative’s employees. The com-
position of the elected members of the 
BoD reflects Arla’s ownership structure 
across the member areas.  
Area forums and Joint Area Council 
Arla has four area forums, corresponding 
to the four member areas, The forums 
serve as an interface with the Board of 
Directors and the management of Arla. 
Members of the forum serve as ambas-
sadors representing Arla among all 
members. The forums hold two meet-
ings a year. 
The joint Area Council consists of four 
members of BoR from each of the re-
spective areas, elected to the council by 
ballot. The BoD appoints the chairman 
and additional members to the council.  
The council focuses on cross-area 
owner matters, including general mem-
bership terms and the global milk supply 
agreement. 
 
 
 
 
Corporate governance 
Corporate governance in Arla is shared 
between the Executive Board and the 
BoD. Together they define and ensure 
adherence to the company’s strategic 
direction, organise and manage the 
company, supervise management and 
ensure compliance. 
Executive Board  
The Executive Board, appointed by the 
BoD, is responsible for managing the 
company, ensuring the proper long-
term growth, setting the strategic direc-
tion, following up on targets and defin-
ing company policies, while striving for a 
sustainable increase in company value. 
Furthermore, the Executive Board en-
sures appropriate risk management and 
risk controlling, as well as compliance 
with statutory regulations and internal 
guidelines. The Executive Board is com-
prised of the CEO and another member 
of the Executive Management Team, 
currently the Executive Vice President of 
our Europe segment.  
 
Executive Management Team  
The Executive Management Team (EMT) 
is appointed by the Executive Board. The 
EMT is responsible for Arla’s day-to-day 
business operations, preparing strate-
gies and planning the future operating 
structure. The EMT consists of the Exec-
utive Board, a leader of the international 
commercial segment and five functional 
experts. The functional experts cover 
the management areas of Supply Chain 
(CSO), Agriculture, Sustainability and 
Communications (CASO), Marketing and 
Innovation (CMO), Human Resources 
(CHRO) and Finance, IT, Legal and Strat-
egy (CFO). The members of the EMT 
keep each other informed of all signifi-
cant developments in their business ar-
eas and align on all cross-functional 
measures.  
Employees  
Arla has 20,907 full-time equivalents 
(FTE) globally, compared to 20,617 last 
year. Our employees are represented  
by three elected members on the BoD 
and 12 elected members on the BoR. 
Besides being represented in the higher 
decision-making bodies of Arla, our  
employees also have work councils. All 
councils comprise employee and em-
ployer representatives. The European 
Works Council (EWC) is our high-level  
forum for dialogue between manage-
ment and employees, and discussions 
about corporate matters. In 2022, sus-
tainability and digitalisation were major 
items on the agenda of the two annual 
EWC meetings.

In 2022, the two former external advi-
sors, Nana Bule and Florence Rollet, 
were elected as ordinary BoD members 
by the BoR. As the result of the elections 
during the spring, three new members 
joined the BoD: Daniel Halmsjö as Swe-
dish farmer representative and Anders 
Olsson and Grant Cathcart as employee 
representatives. Walter Lausen (DE),  
Jonas Carlgren (SE), Harry Shaw (UK) and 
Håkan Gillström (SE) stepped down from 
their roles. 
Competencies and  
diversity of the BoD 
Despite their mostly similar background 
in agriculture and dairy, our BoD is 
equipped with a wide range of skills and 
expertise, enabling them to conduct 
first-class global governance. The com-
petencies of the BoD are evaluated 
every other year in a transparent pro-
cess approved by the BoR. Based on the 
results of the evaluation, board mem-
bers can enrol in different trainings to 
further strengthen their skillset. 
Key topics and decisions  
in 2022 
Our BoD had 12 ordinary and 4 extraor-
dinary meetings. Five of the meetings 
were one and a half day physical meet-
ings, and the rest were held online. Key 
topics the BoD addressed this year were: 
· The increasingly uncertain and volatile 
external market was on top of the 
BoD’s agenda in 2022. In light of the 
market realities, the BoD revised our 
strategic aspirations towards 2026. 
Read more on page 26. 
 
· The war in Ukraine and its conse-
quences for Arla. The BoD was part  
of the decision to divest our Russian 
business. Read more on page 16. 
· The development and announcement 
of the Sustainability Incentive model, 
which is going to reward farmer own-
ers for sustainability actions on their 
farms. Read more on page 35. 
 
 
 BOARD OF DIRECTORSOUR BOARD OF DIRECTORS (BOD) HAS A WEALTH OF KNOWLEDGE, CONSISTING OF 14 ELECTED FARMER OWNERS, THREE EMPLOYEE REPRESENTATIVES AND TWO EXTERNAL MEMBERS. 
1 According to the Danish Company Act, §99b, only members elected at the company’s general meeting are included. 
Gender composition of the BoD1 
Tenure of the BoD 
Nationalities of the BoD 
 
75% 
Male
25% 
Female
52%
0-3 years
16%
4-7 years
32%
8+ years
DK
8
SE
5
UK
3
DE
1
BE
1
FR
1
1 
4 
5 
11 
2 
3 
9 
12 
6 
13 
15 
14 
17 
18 
19 
16 
8 
10

MEMBER BIOGRAPHIES 
 
 
 
 
Jan Toft Nørgaard (DK)   
 
Born: 1960 
Member since: 1998 
Occupation: Dairy farmer  
Internal positions: Chairman of the Board, 
the Learning and Development Committee 
and the Remuneration Committee 
External positions: Member of the 
Company Board of the Danish Agriculture 
and Food Council (2009) 
 
Manfred Graff (DE)   
 
Born: 1959 
Member since 2012 
Occupation: Dairy farmer  
Internal positions: Vice Chairman of the 
Board, Area Chairman of Central Europe, 
Chairman of the Joint Area Council and the 
Member Relation Group, member of the 
Learning and Development Committee 
and the Remuneration Committee  
External positions: Member of the Board 
of German Milch NRW (2007) and the 
Board of the German Federation of 
Cooperatives (2015).  
 
Anders Olsson (SE)   
 
Born: 1966 
Member since 2022 
Occupation: Technical Coordinator at 
Götene Dairy. 
 
Arthur Fearnall (UK)   
 
Born: 1963 
Member since: 2018 
Occupation: Dairy farmer  
Internal positions: Area Chairman of UK, 
Chairman of the Farmer Sustainability 
Working Group, member of the Joint Area 
Council, the Member Relation Group and 
the Global Appeals Committee. 
 
Bjørn Jepsen (DK)   
 
Born: 1963 
Member since: 2011 
Occupation: Dairy farmer  
Internal positions: Chairman of the 
Organic Committee.  
External positions: Vice Chairman of 
Skjern Bank (2012) and the Danish Dairy 
Board (2019), member of the cattle 
section of the Danish Agriculture and Food 
Council (2009), the Board of the Danish 
Cattle Levy Fund (2009) and the Board of 
the Danish Milk Levy Fund (2019). 
 
Daniel Halmsjö (SE)   
 
Born: 1982 
Member since: 2022 
Occupation:  Dairy farmer  
Internal positions: Member of the Global 
Appeals Committee. 
 
Florence Rollet (FR)1   
 
Born: 1966 
Member since: 2019 
Occupation: Head of the MSC in luxury 
marketing and management, EMLyon, 
France. 
 
Grant Cathcart (UK)   
 
Born: 1970 
Member since: 2022 
Occupation: Quality Controller, QEHS, at 
Oswestry Packaging Plant. 
External positions: Member of the 
National Cheese Forum, UK (1999), and 
the National Works Council, UK (2012). 
  
Gustav Kämpe (SE)   
 
Born: 1977 
Member since: 2021 
Occupation: Dairy farmer 
Internal positions: Member of the 
Remuneration Committee and the Farmer 
Sustainability Working Group. 
External positions: Member of the 
Swedish Dairy Association (2021). 
 
Ib Bjerglund Nielsen (DK)   
 
Born: 1960 
Member since: 2013 
Occupation: Dairy production worker  
External positions: Member of the Dairy 
Workers’ Union, DK  (2005) 
 
Inger-Lise Sjöström (SE)   
 
Born: 1973 
Member since: 2017 
Occupation: Dairy farmer  
Internal positions: Area Chairman of 
Sweden, member of the Joint Area Council, 
the Member Relation Group and the 
Learning and Development Committee.  
External positions: Chairman of the Board 
of the Swedish Dairy Association (2022), 
Board member of Tillväxtbolaget (2022), 
Dairy Ambassador for the UN High-Level 
Political Forum (2022),  
 
Johnnie Russell (UK)   
 
Born: 1950 
Member since: 2012 
Occupation: Dairy farmer, chartered 
accountant  
Internal positions: Member of the 
Learning and Development Committee, 
the Remuneration Committee and the 
Organic Committee 
External positions: Chairman of the ING 
Bank UK Pension Fund (2010) and two 
other entities (2013 and 2015 
respectively). 
 
Jørn Kjær Madsen (DK)   
 
Born: 1967 
Member since: 2019 
Occupation: Dairy farmer  
Internal positions: Member of the 
Learning and Development Committee, 
Member of the Board of Andelssmør 
A.M.B.A (2020) 
External positions: Member of the Board 
of GLS-A (2018). 
 
Marcel Goffinet (BE)   
 
Born: 1988 
Member since: 2019 
Occupation: Dairy farmer  
Internal positions: Member of the Global 
Appeals Committee, the Learning and 
Development Committee, the Organic 
Committee and the Preparatory Working 
Group. 
External positions: Chairman of the Board 
of Agra Ost Agriculture Research (2016), 
member of the municipal government of 
St.Vith (2018) and the Bauernbund Farmer 
Association (2012). 
 
Marita Wolf (SE)   
 
Born: 1959 
Member since: 2021 
Occupation: Dairy farmer  
Internal positions: Chairman of the Global 
Training Committee, member of the 
Organic Committee.  
External positions: Member of the Board 
of the Swedish Dairy Association (2003), 
member of the Board of the Swedish 
Farmers Foundation for Agriculture (2022). 
 
Nana Bule (DK)   
 
Born: 1978 
Member since: 2019 
Occupation: Operating Advisor, Goldman 
Sachs Asset Management   
External positions: Member of the Board 
of Energinet (2018) and Chair of the 
Danish Government Digital Council (2022). 
 
René Lund Hansen (DK)   
 
Born: 1967 
Member since: 2019 
Occupation: Dairy farmer  
External positions: Member of the cattle 
section and the Company Board of the 
Danish Agriculture and Food Council 
(2019) and the Board of Agri Nord (2012). 
 
Simon Simonsen (DK)   
 
Born: 1970 
Member since: 2017 
Occupation: Dairy farmer, Valuation 
Consultant DLR Kredit A/S  
Internal positions: Member of the 
Remuneration Committee. 
External positions: Dairy Ambassador for 
the UN High-Level Political Forum (2017). 
 
Steen Nørgaard Madsen (DK)   
 
Born: 1956 
Member since: 2005 
Occupation: Dairy farmer 
Internal positions: Area Chairman of 
Denmark, Chairman of the Global Appeals 
Committee and the Preparatory Working 
Group, member of the Joint Area Council 
and the Member Relation Group.  
External positions: Chairman of Danish 
Dairy Board (2012), Deputy Chairman of 
the Company Board of the Danish 
Agriculture and Food Council (2014), 
Chairman of the Agro Food Park Steering 
Committee (2016), the Danish Milk Levy 
Fund (2012). 
 
 
Reading key 
Owner 
Employee 
External 
1-19 Link to the  
group photo 
 1 Florence Rollet not present for the group photo 
1 
2 
3 
4 
5 
6 
- 
8 
9 
10 
11 
12 
13 
14
15 
16 
17 
18 
19

EXECUTIVE MANAGEMENT TEAM OUR EXECUTIVE MANAGEMENT TEAM CONSISTS OF THE CEO, ONE COMMERCIAL LEADER OF THE EUROPEAN AND INTERNATIONAL COMMERCIAL SEGMENTS AND FIVE FUNCTIONAL EXPERTS. THE EXECUTIVE MANAGEMENT TEAM IS RESPONSIBLE FOR ARLA’S DAY-TO-DAY BUSINESS OPERATIONS AND FOR DEVELOPING AND DELIVERING GROUP STRATEGIES.
Gender composition of the EMT 
 
Tenure of the EMT 
Nationalities of the EMT 
 
87% 
Male
13%
Female
37%
0-3 years
38%
4-7 years
25%
8+ years
DK
4
SE
2
UK
1
FR
1
 
1 
6 
2 
3 
4 
5 
7 
8

MEMBER BIOGRAPHIES
 
 
 
 
Peder Tuborgh (DK)   
 
Born: 1963 
Position:  CEO, member of the Executive 
Board, Head of Milk and Trading, Chairman 
of Arla Foods Ingredients.  
Experience: Peder has been with Arla 
since 1987, formerly under MD Foods, and 
has held various senior management and 
executive positions, including Marketing 
Director, Divisional Director and Executive 
Group Director. Peder has worked in 
Germany, Saudi Arabia and Denmark as 
part of his longstanding career with Arla  
Education: Master’s degree in Economics 
and Business Administration from the 
University of Odense.  
External positions: Member of the Global 
Dairy Platform (2006), Chairman of 
AgriFoodTure (2022). 
 
Born: 1973 
Position:  COO, Executive Vice President of 
Europe, member of the Executive Board.  
Experience: Peter joined Arla in 2003 as 
Vice President of Corporate Strategy and 
has held various senior positions in Arla, 
including Executive Vice President of 
Consumer DK and UK, before he became 
Executive Vice President of Europe in 
2016. 
Education: Master’s degree in Business 
Administration, Organisation and 
Management from the Aarhus University. 
School of Business and Social Sciences.  
External positions: Board member in AIM, 
the European Brands Association (2018), 
member of the Policy and Issues Council 
(PIC) of the UK’s Institute of Grocery 
Distribution (IGD) (2016), Vice Chairman of 
the Board of the European Dairy 
Association (EDA) (2020), member of the 
Board of the Toms group (2022). 
Position:  CFO, Executive Vice President, 
Finance, Legal, IT, and Strategy.  
Experience: Torben joined Arla in 2012 
after working several years in the M&A 
consultancy industry. Starting out in Arla 
as a Business Controller in Corporate Fi-
nance, he has subsequently held a num-
ber of significant project and leadership 
roles across the finance organisation fo-
cusing mainly on the interface between 
finance and strategy, latest as Head of 
Performance Management. 
Education: M.Sc. in Finance and Inter-
national Business from Aarhus Univer-
sity. 
Born: 1965 
Position:  Executive Vice President, In-
ternational.  
Experience: Simon joined Arla in 2002 
as UK Sales Director before becoming 
Senior Vice President of Sales and Mar-
keting, where he played a major role in 
the significant transformation of the UK 
business. In 2016, Simon became SVP 
Commercial Ops Europe and in 2020 
Head of MENA region based in Dubai. 
Prior to Arla, Simon worked 14 years for 
Unilever in various Sales and Marketing 
Director roles in the UK, the Netherlands 
and Italy.  
Education: 1st class BSc Hons degree in 
Management Sciences from Loughbor-
ough University. 
External positions: Member of the 
Board of Mengniu (2021). 
 
Ola Arvidsson (SE)   
 
Born: 1968 
Position: CHRO, Executive Vice President, 
HR.  
Experience: Ola joined Arla in 2006 as 
Corporate HR Director, and has been Chief 
HR Officer of Arla since 2007. He came to 
Arla from Unilever, where he held various 
director positions across Europe and the 
Nordics, with his last position as Vice 
President of HR. Prior to Unilever, Ola 
served as an Officer in the Royal Combat 
Engineering Corps in the Swedish Army.  
Education: Master’s degree in HR 
Management from Lund University. 
External positions: Member of the Board 
of AP Pension (2014), Central Board 
member of the Confederation of Danish 
Industry (2018). 
 
Born:  1970 
Position: CSO, Executive Vice President, 
Supply Chain.  
Experience: David joined Arla in October 
2020. He has 26 years of experience in 
Supply Chain & Operations and held 
several senior leadership positions in the 
food industry within Mars, Mondelez & 
Danone in various geographies. Most 
recently, before joining Arla as Chief 
Supply Chain Officer, he was Senior Vice 
President Operations of Danone’s 
Specialized Nutrition Division, operating 
globally in the Early Life & Medical 
Nutrition fields.  
Education: Engineering degree from the 
Ecole Civil des Mines de Paris in France and 
Master’s degree in Mathematics. 
External positions: Member of the board 
of Global Baby SAS (2021). 
 
 
Hanne Søndergaard (DK)   
 
Born: 1965 
Position: CASO, Executive Vice President, 
Agriculture, Sustainability & 
Communication.  
Experience: Hanne has been with Arla for 
33 years, first joining under MD Foods and 
then moving to the UK where she played a 
leading role in developing the Arla UK 
business. She became Vice CEO of Arla UK 
before she in 2010 moved into a global 
marketing role as Senior Vice President of 
Brands and Categories. In 2016, she 
became CMO and Executive Vice President 
and joined Arla’s Executive Management 
Team. In January 2021, Hanne became 
Executive Vice President of Agriculture, 
Sustainability and Communication. 
Education: Business degrees from the 
Aarhus University School of Business and 
Social Sciences and Harvard Business 
School.  
External positions: Member of the Board 
of Arla Fonden (2012), member of the 
Technical University of Denmark (2016), 
member of the Danish Climate Forest 
Foundation (Klimaskovfonden) established 
by the Ministry of Environment of Denmark 
(2021), Board member of the Danish 
Agriculture & Food Council (2022). 
 
 
Patrik Hansson (SE)   
 
Born: 1967 
Position: CMO, Executive Vice President 
Marketing and Innovation. 
Experience: Patrik has many years of 
experience from working in international 
consumer goods companies within 
finance, marketing, sales and general 
management. Patrik worked for 13 years in 
Procter and Gamble, mainly in marketing, 
before he joined Arla in October 2011 as 
VP Marketing and Sales in Sweden. In 
2015, he moved to Malaysia to start up 
Arla’s regional headquarter in South East 
Asia. In 2016, he returned to Europe where 
he held the roles of Group Vice President in 
Sweden, and later in Germany, before 
taking up the current role as CMO in 2022. 
Education: Master’s degree in Engineering 
Physics from Chalmers and a master’s 
degree from Gothenburg University. 
 
Peter Giørtz-Carlsen (DK)   
 
Torben Dahl Nyholm (DK)   
 
Born: 1981 
Simon Stevens (UK)   
 
David Boulanger (FR)   
 
1 
2 
3 
4 
5 
6 
7 
8

e have a structured approach to  
remuneration, ensuring that sala-
ries are unbiased towards gender,  
nationality and age. 
Remuneration governance  
Arla’s remuneration practice is governed 
by the remuneration guidance set by 
the Board of Directors (BoD) and  
reviewed regularly. The BoD is guided by 
the recommendations of the Remunera-
tion Committee (RemCo), consisting of 
six board members, including the chair-
manship. The RemCo works as a prepar-
atory committee for the BoD as well as 
the Board of Representatives (BoR), with 
a special focus on the BoD, BoR and the 
Executive Board. It is also the Commit-
tee’s responsibility to ensure that the  
remuneration guidance, practices and 
incentive programmes support the 
strategy of Arla and create value for the 
owners by enabling Arla to attract and 
retain the best qualified elected repre-
sentatives, executives, directors and key 
employees. The RemCo meets four 
times a year.  
Our remuneration practices  
Remuneration packages are con-
structed to ensure attraction, engage-
ment and retention of the best senior 
managers, and at the same time should 
drive strong performance in both short 
and long-term business results. In line 
with Scandinavian practice, the majority 
of the remuneration is fixed. However, in 
recent years, the variable part of the  
remuneration has increased to ensure 
that total remuneration is also depend-
ent on achieving Arla’s short and long-
term financial targets. All executives and 
members of senior management are 
employed on terms according to inter-
national standards, including adequate 
non-compete restrictions, as well as 
confidentiality and loyalty restrictions.  
Our performance measures  
Board of Directors (BoD)  
The remuneration of the BoD comprises 
a fixed fee and is not incentive-based. 
We believe this ensures that the Board is 
primarily focused on the cooperative’s 
long-term interests. Beyond a minimal 
travel per diem, no additional compen-
sation is paid for meeting attendance or 
committee service. The BoD’s remuner-
ation is assessed and adjusted on a  
bi-annual basis and approved by the 
BoR. The most recent adjustment made 
was in 2022. For more details on specific 
amounts, refer to page 119. 
Executive Board and Executive 
Management Team (EMT)  
The compensation elements and  
approach for the Executive Board and 
the Executive Management Team  
(together: executives) are identical.  
Remuneration paid to the Executive 
Board is assessed annually by the BoD 
based on recommendations from 
RemCo. The EMT’s remuneration is set 
by the CEO. For more details on specific 
amount, go to page 119. 
The remuneration package for the exec-
utives is based on external benchmarks 
against European and international 
FMCG companies, providing a competi-
tive and sustainable mix of fixed and 
variable pay. Pension contributions  
and non-monetary benefits such as 
company car, telephone etc. are also 
part of the package.  
Levels of fixed remuneration are set 
based on individual experience, contri-
bution and function, while variable pay 
reflects performance against annual 
business targets. The variable pay com-
ponent consists of an annual short-term 
incentive (STI) plan and a long-term 
(three-year) incentive (LTI) plan. The STI 
is composed of the same elements for 
all executives. From 2023 onwards, 
scope 1 and 2 C02e reduction will be 
part of the STI scheme. The main com-
ponents of the LTI are branded volume 
growth, and the group’s performance 
versus a peer group (see graphs). 
 
 
 
 
 
 
 MANAGEMENT REMUNERATION
Short-term components 
  Branded volume growth 
  Profit 
  Efficiencies 
  Leadership 
 
Long-term components 
  Branded volume growth 
  Performance versus peer group

n Arla, we acknowledge that tax is vital 
for the economic and social develop-
ment. We are strongly committed to 
paying our taxes legally due and report-
ing transparently on our tax practices. 
Taking a responsible and transparent ap-
proach to tax matters supports the strat-
egy of growing our company on a solid 
foundation, and is in line with our com-
mitment to the UN Sustainable Develop-
ment Goals (SDGs). Our tax payments 
contribute directly and indirectly to the 
majority of the SDGs, but in particular to 
SDG number 16 – development of  
effective, accountable and transparent 
institutions.  
We are committed to paying taxes in the 
countries where we operate and gener-
ate value as well as ensuring that re-
quirements on tax reporting and tax 
transparency are met. We strive for an 
open dialogue with tax authorities and 
the general public around the world re-
garding our business and our tax affairs.  
In order to always adhere to our key tax 
principles, our global tax function is or-
ganised to ensure that we have the right 
policies, people, tax controls and proce-
dures in place to promote strong tax 
governance. Part of this work is the con-
tinuous evaluation of available tax  
incentives and reliefs to ensure that the 
use of such are always to be anchored in 
commercial substance. 
Our key tax principles 
Our approach to tax matters conforms 
with Arla’s global Code of Conduct and is 
founded on a set of key tax principles 
approved by the Board of Directors: 
· Arla aims to report the right and proper 
amount of tax according to where 
value is created 
· Arla is committed to paying taxes  
legally due and to ensure compliance 
with legislative requirements in all 
jurisdictions in which the business  
operates 
· Arla does not use tax havens to reduce 
the group’s tax liabilities 
· Arla will not set up tax structures in-
tended for tax avoidance which have 
no commercial substance and do not 
meet the spirit of the law 
· Arla is transparent about our approach 
to tax and our tax position 
· Disclosures are made in accordance 
with relevant regulations and applica-
ble reporting standards such as (IFRS) 
· Arla builds on good relations with tax 
authorities and trusts that transpar-
ency, collaboration and proactiveness 
minimise the extent of disputes 
Cooperative and corporate tax  
As a cooperative, Arla’s farmer owners 
are also our suppliers, and earnings are 
not accumulated in the company, but 
paid to the owners in the form of the 
highest possible milk price. Based in 
Denmark, Arla Foods amba is governed 
by the Danish tax rules for cooperatives 
paying income tax in Denmark based on 
the value of its equity.  
Arla operates several subsidiaries glob-
ally. Our subsidiaries are primarily lim-
ited liability and private limited compa-
nies subject to regular corporate taxa-
tion. Transactions between Arla compa-
nies are determined and documented in 
accordance with OECD’s Transfer Pricing 
Guidelines to ensure we operate on 
market terms.  
Value generation and tax 
contribution 
In 2022, Arla generated a total value of a 
EUR 7,043 million from the milk sup-
plied. Milk from our farmer owners gen-
erated EUR 6.7 billion in milk payments, 
while other farmers received milk pay-
ments of EUR 519 million. As a result, 
the majority of the taxes are paid at farm 
level subject to local tax rules. 
The value generated by our activities 
cascades further into societies via vari-
ous types of tax payments that are either 
born or collected by the Arla group. 
In line with our ambition to continuously 
increase transparency by disclosing de-
tails on our taxes, selected value drivers 
for tax and economic contribution are 
presented for the countries in which our 
farmers are based and collectively for 
the rest of the world. 
Arla will continue to increase transpar-
ency on our tax reporting and imple-
ment the EU Directive on public coun-
try-by-country reporting by 2024 at the 
latest. 
 TRANSPARENT TAX PRACTICES
Taxes recognised in income statement, 
20221 
  DE,NL,BE,LUX, 14% 
  DK, 13% 
  UK, 25% 
  SE, FI, 10% 
  International & Other, 37% 
 
Taxes recognised in income statement, 
20211 
  DE,NL,BE,LUX, 12% 
  DK, 16% 
  UK, 34% 
  SE,FI, 9% 
  International & Other, 29% 
 
1 Current and deferred taxes

Policy framework 
We continuously work on improving our 
corporate policies to reflect local legisla-
tions and our values and commitments 
as stated in our Code of Conduct.  
Our policies govern general employee 
behaviour in key areas of good business 
conduct, guide us to act responsibly  
and with integrity, and govern our  
ways of working as one aligned and  
efficient Arla. 
Whistle-blower system 
Arla’s whistle-blower function provides 
employees and other stakeholders a 
channel, where they can anonymously 
report suspected non-compliance with 
Arla’s Code of Conduct or criminal acts. 
The reports are made through an exter-
nally hosted function, and strict princi-
ples of confidentiality and non-retalia-
tion applies. In 2022, Arla received 25 
reports from its whistleblowing function. 
All reports qualifying as whistle-blower 
reports were further investigated, and 
appropriate measures have been taken 
for all substantiated reports. 
Fraud investigations  
Openness and trust are among our core 
values and incorporated into our Code 
of Conduct. If employees or our stake-
holders believe that our Code of Con-
duct has been violated, we encourage 
them to report these violations. 
In 2022, we saw an increase in the num-
ber of reported fraud allegations com-
pared to 2021, from 14 to 18, which 
shows the increased trust in our anony-
mous reporting system. None of the 
investigations resulted in material finan-
cial losses to the group, but they pro-
vided us with valuable knowledge about 
the state of our control environment. 
Data ethics policy 
In 2022, Arla’s data ethics policy was 
published on our internal policy portal. 
During the year, we carried out pilot 
testing of the policy principles in existing 
and new projects in some of our func-
tional areas. We focused on including 
relevant employees in understanding 
how to evolve best practices and embed 
data ethics further in the business. The 
work will continue in 2023 with an 
awareness campaign and training of  
relevant employees. 
Internal controls  
We maintain a coherent system of inter-
nal controls, which are regularly as-
sessed for effectiveness and adequacy. 
In 2022, we expanded our control envi-
ronment and reporting with climate- 
related financial disclosures in line with 
our strategic focus on sustainability and 
new external reporting requirements. 
 
 INTERNAL CONTROLS AND COMPLIANCETO BE A COMPLIANT COMPANY AND PREVENT FRAUD ARE KEY BUSINESS PRIORITIESFOR ARLA. WE ARE COMMITTED TO ACTING WITH INTEGRITY, RESPECT AND IN A TRANSPARENT WAY ACCORDING TO PRINCIPLES SET IN OUR CODE OF CONDUCT. WE RECOGNISE THAT OUR REPUTATION AND SUCCESS ARE DEPENDENT ON THE BEHAVIOUR OF OUR EMPLOYEES, SO WE TAKE VIOLATIONS OF THE CODE OF CONDUCT SERIOUSLY.
 
 
 
 
 
 
 
 
 PROCESSES, PROCEDURES ANDSTANDARDSPOLICIESGUIDELINES AND INSTRUCTIONS
 
 CODE OF CONDUCT

c LURPAK®BUTTER
 
Lurpak® is our premium butter brand that has been 
crafted by Danish dairy farmers for over 100 years. 
Lurpak has a unique, rich and creamy taste due 
 to the high-quality milk used, and craftsmanship  
applied in the production. 
 
 
 
 
 
 CONSOLIDATED

Income statement .................................................................................... 68 
Comprehensive income ......................................................................... 68 
Profit appropriation .................................................................................. 69 
Balance sheet ............................................................................................. 70 
Equity.............................................................................................................. 71 
Cash flow ....................................................................................................... 74 INTRODUCTION TO NOTES
 REVENUE AND COSTS
 
1.1 Revenue ................................................................................................ 78 
1.2 Operational costs .............................................................................. 80 
1.3 Other operating income and costs ............................................ 83 
1.4 Key performance indicators .......................................................... 83 NET WORKING CAPITAL
 
2.1 Net working capital, other receivables and current 
liabilities ........................................................................................................ 85 CAPITAL EMPLOYED
 
3.1 Intangible assets and goodwill .................................................... 88 
3.2 Property, plant and equipment ................................................... 91 
3.3 Associates and joint ventures ...................................................... 94 FUNDING
 
4.1 Financial risks ...................................................................................... 96 
4.2 Financial items ................................................................................. 103 
4.3 Net interest-bearing debt ........................................................... 105 
4.4 Derivatives ......................................................................................... 109 
4.5 Financial instruments ................................................................... 110 
4.6 Sale and repurchase arrangements ....................................... 111 
4.7 Pension liabilities ............................................................................ 112 OTHER AREAS
 
5.1 Tax ......................................................................................................... 116 
5.2 Provisions .......................................................................................... 118 
5.3 Fees to auditors appointed  by the board of 
representatives ....................................................................................... 118 
5.4 Management remuneration and transactions with 
related parties ......................................................................................... 119 
5.5 Contractual commitments, contingent assets and 
liabilities ..................................................................................................... 120 
5.6 Events after the balance sheet date....................................... 120 
5.7 General accounting policies ...................................................... 121 
5.8 Group chart ....................................................................................... 122 
Statement by the board of directors and the executive 
board ........................................................................................................... 125 
Independent auditor's report ............................................................ 126 
 TABLE OF CONTENTS REPORTS

Comprehensive income 
Comprehensive income consists of realised profit for the year 
and other value adjustments that have yet to be realised and 
are recognised directly in equity. Profit for the year amounted 
to EUR 400 million and other comprehensive 
 
 
income amounted to EUR 156 million. Other comprehensive 
income was primarily unrealised value adjustments on hedg-
ing instruments of EUR 225 million and adjustments related to 
foreign currency translation of EUR -48 million. 
(EURm) 
Note 
2022 
2021 
Development 
Revenue 
1.1 
13,793  
11,202  
23% 
Production costs 
1.2 
 -11,145  
 -8,822  
26% 
Gross profit 
  
2,648  
2,380  
11% 
 
 
 
 
 
Sales and distribution costs 
1.2 
 -1,771  
 -1,573  
13% 
Administration costs 
1.2 
  -439  
  -427  
3% 
Other operating income 
1.3 
 162  
 110  
47% 
Other operating costs 
1.3 
  -131  
  -75  
75% 
Share of results after tax in joint ventures and associates 
3.3 
 60  
 53  
13% 
Earnings before interest and tax (EBIT) 
  
 529  
 468  
13% 
 
 
 
 
 
Specification: 
  
  
  
  
EBITDA  
  
1,001  
 948  
6% 
Depreciation, amortisation and impairment losses 
1.2 
  -472  
  -480  
-2% 
Earnings before interest and tax (EBIT) 
  
 529  
 468  
13% 
 
 
 
 
 
Financial income 
4.2 
 37  
 14  
164% 
Financial costs 
4.2 
  -117  
  -75  
56% 
Profit before tax 
  
 449  
 407  
10% 
 
 
 
 
 
Tax 
5.1 
  -49  
  -61  
-20% 
Profit for the year 
  
 400  
 346  
16% 
 
 
 
 
 
Allocated as follows: 
  
  
  
  
Arla Foods amba's share of profit for the year 
  
 382  
 332  
15% 
Non-controlling interests 
  
 18  
 14  
29% 
Total 
  
 400  
 346  
16% 
(EURm) 
Note 
2022 
2021 
 
 
 
 
Profit for the year 
  
 400  
 346  
 
 
 
 
Other comprehensive income 
  
  
  
Items that will not be reclassified to the income statement: 
  
  
  
Remeasurements of defined benefit schemes 
4.7 
  -1  
  -3  
Tax on remeasurements of defined benefit schemes 
  
 2  
 10  
 
 
 
 
Items that may be reclassified subsequently to the income statement: 
  
  
  
Value adjustments of hedging instruments 
4.4 
 225  
 39  
Fair value adjustment of certain financial assets 
  
  -3  
  -1  
Adjustments related to foreign currency translation 
  
  -48  
 127  
Tax on items that may be reclassified to the income statement 
  
  -19  
  -1  
Other comprehensive income, net of tax 
  
 156  
 171  
 
 
 
 
Total comprehensive income 
  
 556  
 517  
 
 
 
 
Allocated as follows: 
  
  
  
Arla Foods amba's share 
  
 538  
 503  
Non-controlling interests 
  
 18  
 14  
Total 
  
 556  
 517

EUR-cent/kg 
 
 382
EURm 
 
 52.0
EUR-cent/kg
 
 
 0.9
EUR-cent/kg 
 113
EURm
Individual capital 
0.3
39
Common capital 
0.6
74
 
EUR-cent/kg 
 269
EURm
Supplementary 
payment, excluding 
interest 
2.1
260
Interest 
0.1
9
 
 PERFORMANCE PRICE*55.1
EUR-cent/kg 
 PROFIT APPROPRIATION
 
 
Profit appropriation 
The supplementary payment for 2022 was EUR 269 million 
including interest. This corresponded to 2.2 EUR-cent/kg of 
owner milk. Contributed individual capital carried interest of 
2.9 per cent in 2022, corresponding to EUR 9 million. The 
Board of Directors approved an half-year supplementary 
payment of EUR 61 million based on the first six months of 
owner milk deliveries. The remaining amount corresponding 
to EUR 208 million will be paid out in March 2023 subject to 
approval of the annual report by the Board of Representatives. 
 
 
Arla's retainment policy prescribes a maximum of 1.0 EUR 
cent/kg of owner milk minus interest on individual contrib-
uted capital to be retained. In 2022, this equalled a retainment 
of 0.9 EUR cent/kg of owner milk, corresponding to EUR 113 
million. According to the retainment policy, the retained earn-
ings must be split 1/3 on individual capital (individual contrib-
uted capital) and 2/3 on common capital (reserve for special 
purposes). The amount allocated to common capital is re-
duced by EUR 9 million corresponding to the interest paid out 
in connection with the supplementary payment. In addition, 
the individual contributed capital was adjusted for amounts 
paid out to members who reached a ceiling of 7.5 EUR-cent of 
individual capital per kg of owner milk. 
 
 
Cash flow of supplementary payment for 2022 
(EURcent/kg) 
Supplementary 
payment 
Half-year supple-
mentary payment, 
September 2022 
Interest 
Final supple-
mentary  
payment, 
March 2023 
* Please refer to Note 1.4.1 for further information 
on the performance price. 
(EURm) 
2022 
2021 
 
 
 
Profit for the year 
  400  
  346  
Non-controlling interests 
-18  
-14  
Arla Foods amba's share of profit for the year 
  382  
  332  
 
 
 
Profit appropriation: 
  
  
Supplementary payment for milk 
  260  
  203  
Interest on contributed individual capital 
  9  
  4  
Total supplementary payment 
  269  
  207  
 
 
 
Transferred to equity: 
  
  
Common capital (reserve for special purposes) 
  74  
  83  
Individual capital (contributed individual capital) 
  39  
  42  
Total transferred to equity 
  113  
  125  
Appropriated profit 
  382  
  332

(EURm) 
Note 
2022 
2021 
Development 
Equity and liabilities 
  
  
  
  
Equity 
  
  
  
  
Common capital  
  
2,150  
2,062  
4% 
Individual capital  
  
 540  
 542  
0% 
Other equity accounts 
  
 203  
 46  
341% 
Supplementary payment to owners 
  
 208  
 207  
0% 
Equity attributable to the owners of Arla Foods amba 
  
3,101  
2,857  
9% 
Non-controlling interests 
  
 67  
 53  
26% 
Total equity 
  
3,168  
2,910  
9% 
 
 
 
 
 
Liabilities 
  
  
  
  
Non-current liabilities 
  
  
  
  
Pension liabilities 
4.7 
 161  
 245  
-34% 
Provisions 
5.2 
 28  
 24  
17% 
Deferred tax 
5.1 
 86  
 64  
34% 
Loans 
4.3 
2,640  
2,113  
25% 
Total non-current liabilities 
  
2,915  
2,446  
19% 
 
 
 
 
 
Current liabilities 
  
  
  
  
Loans 
4.3 
 709  
 628  
13% 
Trade payables and other payables 
2.1 
1,597  
1,445  
11% 
Provisions 
5.2 
 20  
 18  
11% 
Derivatives 
4.5 
 36  
 86  
-58% 
Other current liabilities 
2.1 
 301  
 280  
8% 
Total current liabilities 
  
2,663  
2,457  
8% 
 
 
 
 
 
Total liabilities 
  
5,578  
4,903  
14% 
 
 
 
 
 
Total equity and liabilities 
  
8,746  
7,813  
12% 
(EURm) 
Note 
2022 
2021 
Development 
Assets 
  
  
  
  
Non-current assets 
  
  
  
  
Intangible assets and goodwill 
3.1 
 954  
 946  
1% 
Property, plant, equipment and right-of-use assets 
3.2 
3,031  
3,072  
-1% 
Investments in associates and joint ventures 
3.3 
 565  
 530  
7% 
Deferred tax 
5.1 
 22  
 21  
5% 
Pension assets 
4.7 
 16  
 69  
-77% 
Other non-current assets 
  
 23  
 30  
-23% 
Total non-current assets 
  
4,611  
4,668  
-1% 
 
 
 
 
 
Current assets 
  
  
  
  
Inventory 
2.1 
1,772  
1,248  
42% 
Trade receivables 
2.1 
1,267  
1,007  
26% 
Derivatives 
4.5 
 239  
 74  
223% 
Other receivables 
2.1 
 319  
 285  
12% 
Securities 
4.5 
 432  
 434  
0% 
Cash and cash equivalents 
  
 106  
 97  
9% 
Total current assets 
  
4,135  
3,145  
31% 
 
 
 
 
 
Total assets 
  
8,746  
7,813  
12%

Common capital 
 
Individual capital 
 
Other equity accounts 
 
Supplementary 
payment 
 
 
 
(EURm) 
Capital  
account 
Reserve for  
special  
purposes 
Total   
Contributed  
individual 
capital 
Delivery-
based  
owner  
certificates 
Injected  
individual  
capital 
Total   
Reserve  
for value  
adjustment 
of hedging  
instruments 
Reserve  
for fair  
value 
through 
OCI 
Reserve for  
foreign 
exchange   
adjustments 
Total   
Total 
Equity 
attributable to 
the owners of 
Arla Foods 
amba 
Non- 
controlling 
interests 
Total  
equity 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Equity at 1 January 2022 
889  
  1,173  
  2,062   
 334  
61  
147  
542   
  -14  
8  
 52  
46   
207  
 2,857  
53  
  2,910  
Profit for the year 
  - 
74  
74   
 39  
  - 
  - 
39   
- 
  - 
- 
  -  
269  
  382  
18  
400  
Other comprehensive income 
 -1  
  - 
 -1   
- 
  - 
  - 
  -  
 225  
 -3  
  -65  
157   
  - 
  156  
  - 
156  
Total comprehensive income 
 -1  
74  
73   
 39  
  - 
  - 
39   
 225  
 -3  
  -65  
157   
269  
  538  
18  
556  
Transactions with owners 
2  
  - 
2   
  -15  
 -5  
 -4  
 -24   
- 
  - 
- 
  -  
  - 
-22  
  - 
 -22  
Transactions with non-controlling interests 
  - 
  - 
  -  
- 
  - 
  - 
  -  
- 
  - 
- 
  -  
  - 
 - 
 -11  
 -11  
half-year supplementary payment 
  - 
  - 
  -  
- 
  - 
  - 
  -  
- 
  - 
- 
  -  
 -61  
-61  
  - 
 -61  
Supplementary payment regarding 2021 
  - 
  - 
  -  
- 
  - 
  - 
  -  
- 
  - 
- 
  -  
 -211  
-211  
  - 
 -211  
Foreign currency translation adjustments 
13  
  - 
13   
  -10  
 -1  
 -6  
 -17   
- 
  - 
- 
  -  
4  
 - 
7  
7  
Total transactions with owners 
15  
  - 
15   
  -25  
 -6  
 -10  
 -41   
- 
  - 
- 
  -  
 -268  
-294  
 -4  
 -298  
Equity at 31 December 2022 
903  
  1,247  
  2,150   
 348  
55  
137  
540   
 211  
5  
  -13  
203   
208  
 3,101  
67  
  3,168  
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
  
  
   
  
  
  
   
  
  
  
   
  
  
  
  
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Equity at 1 January 2021 
878  
  1,090  
  1,968   
 302  
65  
146  
513   
  -53  
9  
  -74  
 -118   
223  
 2,586  
53  
  2,639  
Profit for the year 
  - 
83  
83   
 42  
  - 
  - 
42   
- 
  - 
- 
  -  
207  
  332  
14  
346  
Other comprehensive income 
7  
  - 
7   
- 
  - 
  - 
  -  
 39  
 -1  
 126  
164   
  - 
  171  
  - 
171  
Total comprehensive income 
7  
83  
90   
 42  
  - 
  - 
42   
 39  
 -1  
 126  
164   
207  
  503  
14  
517  
Transactions with owners 
1  
  - 
1   
  -11  
 -4  
 -4  
 -19   
- 
  - 
- 
  -  
  - 
-18  
  - 
 -18  
Transactions with non-controlling interests 
  
  - 
  -  
- 
  - 
  - 
  -  
- 
  - 
- 
  -  
  - 
 - 
 -6  
 -6  
Supplementary payment regarding 2020 
  - 
  - 
  -  
- 
  - 
  - 
  -  
- 
  - 
- 
  -  
 -227  
-227  
  - 
 -227  
Foreign currency translation adjustments 
3  
  - 
3   
 1  
  - 
5  
6   
- 
  - 
- 
  -  
4  
  13  
 -8  
5  
Total transactions with owners 
4  
  - 
4   
  -10  
 -4  
1  
 -13   
- 
  - 
- 
  -  
 -223  
-232  
 -14  
 -246  
Equity at 31 December 2021 
889  
  1,173  
  2,062   
 334  
61  
147  
542   
  -14  
8  
 52  
46   
207  
 2,857  
53  
  2,910

Understanding equity 
Equity accounts regulated by the Articles of Association can 
be divided into three main categories: common capital, indi-
vidual capital and other equity accounts. The characteristics of 
each equity category are explained below.  
Common capital 
Common capital is by nature unallocated to individual mem-
bers and consists of the capital account and the reserve for 
special purposes. The capital account represents a strong 
foundation for the cooperative's equity, as the non-impair-
ment clause, described on the next page, ensures that the ac-
count cannot be used for payments to owners. The reserve for 
special purposes is an account that in extraordinary situations 
can be used to compensate owners for losses or impairment 
affecting the profit for appropriation. Amounts transferred 
from the annual profit appropriation to common capital are 
recognised in this account.  
Individual capital 
Individual capital is capital allocated to each owner based on 
their delivered milk volumes. Individual capital consists of con-
tributed individual capital, delivery-based owner certificates 
and injected individual capital. Amounts registered in these ac-
counts will, subject to approval by the Board of Representa-
tives, be paid out if owners leave the cooperative. Amounts al-
located to contributed individual capital as part of the annual 
profit appropriation are interest-bearing.  
Other equity accounts 
Other equity accounts include accounts prescribed by IFRS. 
These include reserves for value adjustments of hedging 
instruments, the reserve for fair value adjustments of certain 
financial assets and the reserve for foreign currency transla-
tion adjustments. 
Supplementary payment 
The account for proposed supplementary payment represents 
the transactions of supplementary payments in the year, and 
the balance represents the amount to be paid out following 
the approval of the annual report.  
Non-controlling interests 
Non-controlling interests represent the share of group equity 
attributable to holders of non-controlling interests in group 
companies. 
 
Development in equity 
Equity increased by EUR 258 million in 2022, totalling EUR 
3,168 million at 31 December 2022. The equity share was 35 
per cent, calculated as equity excluding non-controlling inter-
ests of EUR 3,101 million divided by total assets of EUR 8,746 
million. 
Comprehensive income 
Profit for the year amounted to EUR 400 million compared to 
EUR 346 million last year, and other comprehensive income 
amounted to EUR 156 million compared to EUR 171 million 
last year. Other comprehensive income included income and 
expenses as well as gains and losses that are excluded from 
the income statement and not realised at the balance sheet 
date. Other comprehensive income of EUR 156 million was 
due to positive value adjustments on hedging instruments, 
negative value adjustments on net assets measured in foreign 
currencies, and remeasurement of pension assets and liabili-
ties. 
 
Transactions with farmer owners 
The Board of Directors decided to pay out an half-year supple-
mentary payment of EUR 61 million for milk deliveries in the 
first six months of the year. An additional supplementary pay-
ment of EUR 208 million was proposed to be paid out subject 
to the Board of Representatives' approval of the annual report. 
This adds up to a total supplementary payment of EUR 269 
million for the year, which includes interest on individual con-
tributed capital. 
A supplementary payment related to 2021 totalling EUR 211 
million was paid out in March 2022. Other transactions with 
farmer owners amounted to EUR 22 million net. They con-
sisted of EUR 24 million paid out to owners resigning or retir-
ing from the cooperative and an amount of EUR 2 million re-
lating to payments from new members. 
In 2023, it is expected that EUR 25 million will be paid out to 
owners resigning or retiring, subject to approval by the Board 
of Representatives.  
Other equity adjustments 
Other equity adjustments amounted to EUR -4 million com-
pared to EUR -14 million last year. Other equity adjustments 
related to transactions with non-controlling interests of  
EUR -11 million and foreign exchange rate adjustments of  
EUR 7 million. 
 
 
 EQUITY
Development in equity 
(EURm) 
 
Total equity 
1 January 
2022 
Profit for  
the year 
Other 
comprehensive 
income 
Supplementary 
 payment 
related to 2021 
Other 
transactions 
with owners 
half-year supple-
mentary payment 
Other 
equity  
adjustments 
Total equity 
31 December 
2022

Accounting policies and regulations according 
to the Articles of Association and IFRS 
 
Common capital 
Technical items such as remeasurement of defined benefit 
pension schemes, effects of disposals and acquisitions of non-
controlling interests in subsidiaries and exchange rate differ-
ences in equity instruments issued to owners are recognised 
in the capital account. Furthermore, the capital account is im-
pacted by agreed contributions from new owners of the coop-
erative. 
The annual profit appropriation to common capital is recog-
nised in the reserve for special purposes. It may, upon the 
Board of Director's proposal, be applied by the Board of Repre-
sentatives for the full or partial offsetting of material extraordi-
nary losses or impairment in accordance with article 20.1(iii) of 
the Articles of Association. 
Individual capital 
Individual capital instruments are regulated in article 20 of the 
Articles of Association and the general membership terms. 
Equity instruments issued as contributed individual capital re-
late to amounts transferred as part of the annual profit appro-
priation. The individual balances carry interest at 12 months 
CIBOR + 1.5 per cent which are approved and paid out to-
gether with the supplementary payment in connection with 
the annual profit appropriation. 
Delivery-based owner certificates are equity instruments is-
sued to the original Danish and Swedish owners. Issue of these 
instruments ceased in 2010. 
Injected individual capital is equity instruments issued in con-
nection with cooperative mergers and when new owners enter 
the cooperative. 
Balances on delivery-based owner certificates and injected in-
dividual capital instruments carry no interest. 
Balances on contributed individual capital, delivery-based 
owner certificates and injected individual capital can be paid 
out over three years upon termination of membership of Arla 
Foods amba in accordance with the Articles of Association, 
subject to approval by the Board of Representatives. Balances 
are denominated in the currency relevant to the country in 
which owners are registered. Foreign currency translation ad-
justments are calculated annually and the effect is transferred 
to the capital account. 
Proposed supplementary payment to owners is recognised 
separately in equity until approved by the Board of Represent-
atives. 
Other equity accounts 
Reserve for value adjustments of hedging instruments com-
prises the fair value adjustment of derivatives classified as and 
meeting the conditions for hedging of future cash flows where 
the hedged transaction has not yet been realised. 
Reserve for fair value adjustments through OCI comprises the 
fair value adjustments of mortgage credit bonds classified as 
financial assets measured at fair value through other compre-
hensive income. 
Reserve for foreign currency translation adjustments com-
prises foreign currency translation differences arising during 
the translation of the financial statements of foreign compa-
nies, including value adjustments relating to assets and liabili-
ties that constitute part of the group's net investment and 
value adjustments relating to hedging transactions securing 
the group's net investment. 
Non-impairment clause 
Under the Articles of Association, no payment may be made by 
Arla Foods amba to owners which impairs the sum of the capi-
tal account and equity accounts prescribed by law and IFRS. 
The non-impairment clause is assessed on the basis of the 
most recent annual report presented under IFRS. Individual 
capital accounts and the reserve for special purposes are not 
covered by the non-impairment clause. 
No pay-out of individual capital can be made without retain-
ment of a corresponding amount in either the cooperative's 
unallocated equity, the individual capital accounts or the re-
serve for special purposes as specified in article 20.1.(i), (ii) and 
(iii) of the Articles of Association. 
Non-controlling interests 
Subsidiaries are fully recognised in the consolidated financial 
statements. Non-controlling interests' share of the profit for 
the year and of the equity in subsidiaries is recognised as part 
of the consolidated profit and equity, respectively, but is listed 
separately. 
On initial recognition, non-controlling interests are measured 
at either the fair value of the equity interest or the propor-
tional share of the fair value of the acquired companies' identi-
fied assets, liabilities and contingent liabilities. The measure-
ment of non-controlling interests is selected on a transac-
tional basis. 
Milk payment to owners 
The on-account settlement of owner milk is recognised as a 
production cost in the income statement. 
The supplementary payment is based on the profit for the year 
as part of the profit appropriation. The supplementary pay-
ment is recognised as a reserve in the equity statement until 
approved by the Board of Representatives, based on a recom-
mendation by the Board of Directors. 
The supplementary payment is settled as an half-year supple-
mentary payment based on the first six months of milk deliver-
ies, and a final supplementary payment at year-end. The half-
year supplementary payment for the year was recognised in 
equity. 
 
 EQUITY

(EURm) 
Note 
2022 
2021 
EBITDA 
  
1,001  
 948  
Reversal of share of profit in joint ventures and associates 
3.3 
  -60  
  -53  
Reversal of other operating items without cash impact 
  
 21  
  -80  
Change in net working capital 
2.1 
  -707  
  -90  
Change in other receivables and other current liabilities 
  
 11  
 103  
Dividends received, joint ventures and associates 
  
 15  
 24  
Interest paid 
  
  -67  
  -45  
Interest received 
  
 23  
 8  
Taxes paid 
  
  -53  
  -35  
Cash flow from operating activities 
  
 184  
 780  
 
 
 
 
Investment in intangible assets 
3.1 
  -92  
  -45  
Investment in property, plant and equipment 
3.2 
  -373  
  -452  
Sale of property, plant and equipment 
3.2 
 13  
 13  
Operating investing activities 
  
  -452  
  -484  
 
 
 
 
Acquisition of financial assets 
  
  -16  
  -26  
Sale of financial assets 
  
 17  
 14  
Sale of enterprises 
  
 8  
 14  
Financial investing activities 
  
 9  
 2  
 
 
 
 
Cash flow from investing activities 
  
  -443  
  -482  
 
 
(EURm) 
Note 
2022 
2021 
 
 
 
 
half-year supplementary payment 
  
  -61  
- 
Supplementary payment regarding 2021 
  
  -211  
  -227  
Transactions with owners 
  
  -22  
  -18  
Transactions with non-controlling interests 
  
  -11  
  -6  
New loans obtained 
4.3.c 
810  
 172  
Other changes in loans 
4.3.c 
  -143  
  -147  
Payment of lease debt 
4.3.c 
  -71  
  -73  
Payment to pension plans 
4.3.c 
  -22  
  -31  
Cash flow from financing activities  
  
 269  
  -330  
 
 
 
 
Net cash flow 
  
 10  
  -32  
 
 
 
 
Cash and cash equivalents at 1 January 
  
 97  
 126  
Net cash flow for the year 
  
 10  
  -32  
Exchange rate adjustment of cash funds 
  
  -1  
 3  
Cash and cash equivalents at 31 December 
  
 106  
 97  
 
  
  
  
 
  
  
  
(EURm) 
Note 
2022 
2021 
 
  
  
  
Free operating cash flow 
  
  
  
Cash flow from operating activities 
  
 184  
 780  
Cash flow from operating investing activities 
  
  -452  
  -484  
Free operating cash flow 
  
  -268  
 296  
 
 
 
 
 
 
 
 
Free cash flow 
  
  
  
Cash flow from operating activities 
  
 184  
 780  
Cash flow from investing activities 
  
  -443  
  -482  
Free cash flow 
  
  -259  
 298

Cash flow development 
Cash flow from operating activities decreased by 76.4 per cent 
to EUR 184 million compared to EUR 780 million last year, pri-
marily driven by cash tied up in increased net working capital 
positions. Higher milk prices and inflation in production costs 
in general drove up the net working capital positions and re-
sulted in a negative cash flow effect from net working capital 
of EUR 707 million. 
Cash flow from investing activities amounted to EUR 443 mil-
lion compared to EUR 482 million last year. CAPEX invest-
ments amounted to EUR 373 million compared to EUR 452 
million last year. Several of prior years' significant investment 
projects were finalised, and new investments included invest-
ments in a capacity increase for milk-based beverages in 
Esbjerg, Denmark, a packaging equipment upgrade in Oak-
thorpe, UK, and growth investments in Arla Foods Ingredients. 
Investments in intangible assets amounted to EUR 92 million 
compared to EUR 45 million last year. The increase was 
primarily due to investments in a general upgrade of our  
SAP platform. 
The effect of financial investing activities was EUR 9 million 
net and related to proceeds paid and received from various 
minor activities. 
Cash flow from financing activities was positive at EUR 269 
million compared to a negative cash flow of EUR 330 million 
last year, comprising transactions with owners and the effect 
of funding activities inclusive cash management. Transactions 
with owners constituted a negative cash flow of EUR 294 mil-
lion, specified as an half-year supplementary payment of E 
UR 61 million, a supplementary payment regarding 2021 of 
EUR 211 million and a net payment of individual capital of  
EUR 22 million. 
The net cash flow from other financing activities was EUR 563 
million, consisting of new loans obtained amounting to  
EUR 810 million and repayments of EUR 236 million. Please 
refer to Note 4.3 for more details. 
Cash and cash equivalents at 31 December 2022 amounted 
to EUR 106 million compared to EUR 97 million last year.  
An insignificant amount of cash and cash equivalents at  
31 December 2022 was deposited in restricted accounts. 
 
Accounting policies 
The consolidated cash flow statement is presented according 
to the indirect method, with cash flow from operating activi-
ties determined by adjusting EBITDA for the effects of non-
cash items such as undistributed profit in joint ventures and 
associates, changes in working capital items and other non-
cash items. 
 
 
 CASH FLOW
Illustration of cash flow 
(EURm) 
  
EBITDA 
 
Net working capital 
Other payments and  
adjustments with an im-
pact on operating cash 
flow 
Cash flow from  
operating activities 
Investing activities 
Free cash flow 
Supplementary  
payments and  
 leaving members 
Other financing  
activities 
Increase in cash

Basis for preparation 
The consolidated financial statements are based on the 
group's monthly reporting procedures. Group entities are  
required to report using standard accounting principles in  
accordance with International Financial Reporting Standards 
as adopted by the EU (IFRS). 
The consolidated financial statements are prepared on a going 
concern basis. Please refer to Note 5.7 for the group's general 
accounting principles and applied accounting policies. 
In response to the Guidelines on Alternative Performance 
Measures (APMs) issued by the European Securities and Mar-
kets Authority (ESMA), we have provided additional infor-
mation on the APMs used by the group. These APMs, and in 
particular the performance price, are deemed critical to under-
standing the financial performance and financial position of 
the group. As they are not defined by IFRS, they may not be  
directly comparable with those of other companies that use 
similar measures. Definitions are provided in the glossary and 
supported by the calculations in Note 1.4. The group's general 
accounting principles are disclosed in Note 5.7, while account-
ing policies for the respective areas are explained in the rele-
vant note sections. 
Applying materiality  
Our focus is to present information that is considered of  
material importance to our stakeholders in a simple and 
structured way.  
Considering the potential future impact of strategic risks 
When preparing the consolidated financial statements, identi-
fied strategic risks were considered. In addition to the going 
concern assumption applied, market and regulatory risks –  
including sustainability-related risks – were considered. In  
addition to the potential direct impact on Arla's performance, 
these risks could potentially also negatively impact future milk 
volumes delivered by the owners of Arla Foods amba and 
thereby indirectly the future value in use of certain parts of the 
asset base. These risks are monitored closely and no material 
impairments were identified. An assessment of the  
impact of risk on future performance is by nature subject to 
judgement, and different conclusions could materialise in  
the future. Please refer to pages 27-32 for more details on 
strategic risks. 
Currency exposure 
The group's financial position is significantly exposed to cur-
rencies, both due to transactions conducted in currencies 
other than the EUR and due to the translation of financial re-
porting from entities not part of the euro zone. The most sig-
nificant exposure relates to financial reporting from entities 
operating in GBP and SEK, and to transactions involving sales 
in USD or USD-related currencies. Please refer to page 29 for 
more details on currencies as part of the strategic risks and to  
Note 4.1. 
 
Special focus areas for 2022 
Comparability 
The group's activity level is normally determined by the vol-
ume of milk delivered by the owners and by the success of 
moving milk volumes into branded positions and to interna-
tional markets. 2022 was yet another very unusual year with 
general macroeconomic uncertainty leading to unexpectedly 
high inflation and record high commodity prices, especially in 
the dairy sector. This resulted in record high revenue based on 
stable milk volumes delivered. Arla's performance was nega-
tively impacted by a historical increase in our cost base which 
was only partly mitigated by the short-term effects of hedging.  
Although this on a net basis led to a correspondingly historical 
high performance price, our owners – based on the  
increased costs on their farms – hesitated and only late in 
2022 started to increase milk volumes. 
Funds tied up in net working capital positions increased dra-
matically, leading to a corresponding increase in net-interest 
bearing debt. Despite this Arla succeeded in keeping leverage 
at 3.0, comfortably within our target range of 2.8 to 3.4. 
The unexpected development in 2022 makes comparison 
with previous years difficult – both from a performance per-
spective and from a financial position perspective. As the vola-
tility and uncertainty continues into 2023, predictions are diffi-
cult and stakeholders should not expect the reported results 
to be representative of the coming years. 
  INTRODUCTION TO NOTES THENOTES ARE STRUCTURED IN FIVESECTIONS WITH ADDITIONAL DISCLOSURES TO SUPPLEMENT THE PRIMARY FINANCIAL STATEMENTS.NOTE 1REVENUE AND COSTS
with details on the group's performance and 
rentability.  NOTE 2NET WORKING CAPITAL
with development and composition of the 
group's inventory and trade balances.  NOTE 3CAPITAL EMPLOYED
providing details on production capacity, intangi-
ble assets and financial investments. NOTE 4FUNDING
with details on funding of the group's activities. NOTE 5OTHER AREAS
providing additional disclosures including tax 
cost and management remuneration, general 
accounting principles and accounting policies 
are described in Note 5.

Valuation of inventory  
Due to the macroeconomic volatility and the related effect  
on commodity prices, the valuations of individual cost compo-
nents (such as milk-based components, additives, packaging, 
energy etc.) in our standard cost models were frequently  
updated throughout 2022 and thoroughly reviewed at  
31 December 2022. 
The conversion from standard cost to reflect cost at the time 
of production for the individual inventory categories was also 
carefully assessed. 
Furthermore, net realisable value was assessed based on the 
price development in milk commodity products in particular at 
the end of the year. Please refer to Note 2.1 Inventory for 
more details. 
Valuation of certain assets and liabilities based on 
projection of expected future cash flow  
Due to the significant increases in interest rates, the valuation 
of goodwill, gross pension liabilities and interest hedging in-
struments was carefully considered. The increased interest 
rates negatively impacted the headroom for certain goodwill 
positions, reduced the gross pension liability and significantly 
increased the value of fixed rate interest hedging contracts. 
Please refer to Note 3.1 Goodwill, Note 4.4 Hedging instru-
ments and Note 4.7 Pension liabilities for more details.  
Classification of power purchase agreements 
Arla has set ambitious targets for CO2e emission reductions, 
both on farm (scope 3) and within Arla's dairy production 
(scopes 1 and 2).  
A new incentive model for owners will be introduced during 
the summer of 2023, allowing up to 3 EUR-cent per kg of de-
livered milk to be paid if certain sustainability initiatives on the 
farm are realised. This is one of the key levers to achieve CO2e 
savings on farm and is expected to have a positive effect on 
sales and the value of our brands.  
To support the reduction of scope 1 and 2 CO2e emissions, 
Arla signed a ten-year power purchase agreement (PPA) in 
2022 providing annual savings of 58,000 tonnes of CO2e. The 
PPA is structured as a supplier contract which is not classified 
as a lease or derivative, and thus will not have any significant 
impact on Arla's financial position or income statement going 
forward. Please refer to page 41 for further information on  
the PPA. 
Climate-related risks in the financial statements 
Climate related risks are high on the agenda at Arla. The man-
agement has assessed the impact on the consolidated finan-
cial statements from such risks and the initiatives that have 
been implemented or will be implemented in order to mitigate 
these risks. There was no material impact on the consolidated 
financial statements 2022 from climate changes or the action 
taken to address climate-related risks. Potential future im-
pacts were also evaluated. 
Please refer to the Risks and opportunities section on pages 
27-32 and the Environmental ambition and progress section 
on pages 33-44 in the management review for descriptions of 
the risks and progress on sustainability. 
Points of consideration are described below. 
Risk of decline in milk volumes 
The milk supply from farmer owners declined slightly during 
2022. Climate-related risks that can potentially accelerate this 
development in the future are: 
· Regulations to reduce emissions from agricultural activities. 
The Danish government has committed to introducing a car-
bon tax on methane and nitrous oxide emissions from 
agricultural activities. Our Danish farmer owners will be sub-
ject to this tax; however, the details regarding the level and 
the implementation of the tax are currently unclear. The tax 
would increase production costs and could potentially force 
farmers to reduce production or leave the business. Initia-
tives implemented and backed by our Future26 strategy are 
targets for the reduction of scope 3 CO2e emissions sup-
ported by an incentive model rewarding sustainability ac-
tions on farms. 
· Extreme weather events like heat waves, draughts or floods 
which can have a negative impact on crop yields and cows' 
productivity. 
· Land use regulations to reach EU climate targets of convert-
ing agricultural land to woodlands which could potentially re-
duce the production of cow feed and shrink herd numbers 
on farms. 
Risk of increased production cost 
Climate-related risks that could potentially affect the future of 
dairy operations are: 
· Regulations to reduce emissions from production. Denmark 
has proposed an emission tax on industry operations. Arla's 
operations will be impacted by this. There is the potential for 
other countries to follow Denmark and introduce similar 
taxes or employ other regulatory tools to reduce emissions 
in the future. This would make dairy production more expen-
sive compared to countries where such initiatives are not im-
plemented, which would harm Arla's competitiveness. We 
are constantly lowering CO2e emissions from operations 
which is supported by the Future26 strategy's science-based 
target of lowering scope 1 and 2 CO2e emissions by 63 per 
cent by 2030. 
· The transformation of consumer behaviour driven by con-
sumers pushing for more sustainable products increases the 
need for sustainable dairy production to stay competitive. 
Risk of impairment of production capacity 
As a consequence of the above climate-related risks, Arla 
could face impairment of its production capacity due to: 
· Equipment becoming outdated in the sustainability  
transformation  
· Excess production capacity if milk volumes and operations 
decline. 
The potential consequences of the above were considered as 
part of our impairment test conducted during 2022 and our 
assessment of the value in use of property, plant and equip-
ment. Non-current assets in the balance sheet were not af-
fected by such impairment in 2022. Sustainability is now an in-
tegral part of all CAPEX investments which ensures future in-
vestments to address the risks identified.  
Significant accounting estimates  
and judgements 
Preparing the group's consolidated financial statements re-
quires management to apply accounting estimates and judge-
ments that affect the recognition and measurement of the 
group's assets, liabilities, income and expenses. The estimates 
and judgements are based on historical experience and other 
factors. By nature, these are associated with uncertainty and 
unpredictability which can have a significant effect on the INTRODUCTION TO NOTES
Note 
Significant accounting estimates 
and judgements 
Estimate/ 
Judgement 
1.1 
Measurement of revenue and rebates 
Estimate 
2.1 
Valuation of inventory 
Estimate 
2.1 
Measurement of trade receivables 
Estimate 
3.1 
Valuation of goodwill 
Estimate 
3.3 
Classification of investments 
Judgement 
4.7 
Valuation of pension plans 
Estimate 
5.1 
Tax 
Estimate

amounts recognised in the consolidated financial statements. 
The most significant accounting estimates are listed below 
with reference to further comments in the notes. 
 
 
Revenue development 
Revenue increased by 23.1 per cent to EUR 13,793 million 
compared to EUR 11,202 million last year. The increase was 
driven by price increases both in commodities and retail due 
to stagnating global milk supply and general inflation. 
Strategic branded sales volumes declined by 3.2 per cent 
compared to an increase of 4.5 per cent last year. The price in-
creases negatively impacted volumes sold within our branded 
positions as some consumers started buying cheaper prod-
ucts. The negative volume development was also due to a 
shift back to less home cooking and more food service after a 
couple of years of strong volume growth during the Covid-19 
pandemic. 
Europe is Arla's largest commercial segment, accounting for 
56.3 per cent of total revenue, compared to 59.1 per cent last 
year. Revenue in Europe increased to EUR 7,771 million com-
pared to EUR 6,621 million last year. The increase was driven 
by higher prices. Strategic branded revenue in Europe de-
clined by 4.2 per cent primarily driven by Lurpak®.  
The International segment accounted for 17.9 per cent of to-
tal revenue compared to 18.8 per cent last year. Revenue in 
International increased to EUR 2,463 million compared to  
EUR 2,101 million last year, driven by prices and positive for-
eign exchange rate effects from USD.  
Arla Foods Ingredients accounted for 7.5 per cent of total rev-
enue compared to 7.1 per cent last year. Revenue increased to 
EUR 1,028 million compared to EUR 793 million last year, 
mainly driven by price increases. 
Global Industry Sales and other segments represented 18.3 
per cent of total revenue, growing by 50.1 per cent to EUR 
2,531 million compared to EUR 1,686 million last year. The 
significant increase was due to commodity price increases, pri-
marily driven by stagnating global milk supply. 
Revenue was positively impacted by foreign exchange rate 
movements of EUR 159 million, primarily driven by USD. 
 
 
 REVENUE AND COSTS1.1 REVENUE
Revenue split by commercial segment 
  Europe 56% (59%) 
  Arla Foods Ingredients 8% (7%) 
  International 18% (19%) 
  Global Industry Sales and other sales 18% (15%) 
 
 
Development in revenue 
(EURm) 
 
13,793
(EURm)
2022
11,202
(EURm)
2021

Table 1.1.a shows total revenue by country and includes all 
sales that occur in the countries, irrespective of organisational 
structure. Therefore, the figures cannot be compared to our 
commercial segment review on pages 19-24. 
 
Accounting policies 
Revenue is recognised when a contract exists with a customer 
for the production and transfer of dairy products across vari-
ous product categories and geographical regions. Revenue by 
commercial segment or market is based on the group's inter-
nal financial reporting practices. 
Revenue is recognised in the income statement when a per-
formance obligation is satisfied at the price allocated to that 
performance obligation. This is defined as the point in time 
when control of the products has been transferred to the 
buyer, the amount of revenue can be measured reliably and 
collection is probable. The transfer of control to customers 
takes place according to trade agreement terms, i.e. Inco-
terms, and may vary depending on the customer or the spe-
cific trade. 
Revenue comprises invoiced sales for the year less customer-
specific payments, such as sales rebates, cash discounts, list-
ing fees, promotions, VAT and duties. Contracts with custom-
ers may contain various types of discounts. Historical experi-
ence is used to estimate discounts in order to correctly recog-
nise revenue. 
Furthermore, revenue is only recognised when it is highly 
probable that a material reversal in the amount of revenue will 
not occur. This is generally the case when control of the prod-
uct is transferred to the customer, also taking into considera-
tion the level of rebates. 
The vast majority of all contracts have short payment terms. 
Therefore, an adjustment of the transaction price with regard 
to a financing component in the contracts with customers is 
not required. 
 
Uncertainties and estimates 
Revenue, net of rebates, is recognised when the goods are 
transferred to the customer. Estimates are applied when 
measuring accruals for rebates and other sales incentives. The 
majority of rebates are calculated based on terms agreed with 
the customer. For some customer relationships, the final set-
tlement of the rebate depends on future sales volumes, prices 
and other incentives. As a result, there is an element of esti-
mation and judgement in determining whether performance 
obligations are achieved. Estimates are based on historical ex-
perience and forecasted future sales. 
The increased selling prices in 2022 led to increased rebates. 
Final settlement of these is not expected to be subject to 
greater uncertainty than in previous years. 
Since Arla's main line of business is the sale of fresh dairy prod-
ucts, returns are rare and therefore do not require specific  
accounting disclosures. 
 
 
 REVENUE AND COSTS1.1 REVENUE
Table 1.1.a Revenue split by country 
  
  
Share of 
 
  
  
revenue 
(EURm) 
2022 
2021 
in 2022 
 
 
 
 
United Kingdom 
 3,474  
 2,891  
25% 
Germany 
 1,737  
 1,301  
13% 
Sweden 
 1,717  
 1,546  
12% 
Denmark 
 1,306  
 1,082  
9% 
Netherlands 
  775  
  598  
6% 
Saudi Arabia 
  468  
  342  
3% 
Finland 
  337  
  309  
2% 
China 
  328  
  419  
2% 
Oman 
  302  
  158  
2% 
USA 
  278  
  215  
2% 
Other* 
 3,071  
 2,341  
22% 
Total 
 13,793  
 11,202  
100% 
*Other countries include, among others, Belgium, Canada, UAE, Spain, France, Australia 
Table 1.1.b - Revenue split by brand 
 
 
(EURm) 
2022 
2021 
Arla 
 3,702  
 3,359  
Lurpak 
  750  
  646  
Puck 
  504  
  383  
Castello 
  239  
  192  
Milk-based beverage 
  353  
  293  
Other supported brands 
  746  
  599  
Strategic branded revenue 
 6,294  
 5,472  
 
 
 
Arla Foods Ingredients 
 1,028  
  794  
Global Industry Sales, private label and other 
 6,471  
 4,936  
Total 
 13,793  
 11,202

Operational cost development 
Operational costs amounted to EUR 13,355 million, up 19.0 
per cent compared to last year. The increase was mainly driven 
by higher milk prices paid to farmer owners and by inflation in 
production costs and other operational costs. 
Production costs increased by 26.3 per cent to EUR 11,145 
million compared to EUR 8,822 million last year. Excluding 
costs of raw milk, production costs increased to EUR 3,965 
million compared to EUR 3,599 million last year, representing 
an increase of 10.2 per cent. The increase was driven by higher 
energy prices and inflation in other production materials such 
as packaging, consumables and utilities. 
Sales and distribution costs increased by 12.6 per cent to  
EUR 1,771 million compared to EUR 1,573 million last year. 
The increase was mainly driven by higher transport costs.  
Research and development costs amounted to EUR 86 million 
compared to EUR 89 million last year.  
Administration costs rose by 2.8 per cent to EUR 439 million 
compared to EUR 427 million last year.  
The volatility of the external environment, especially the 
swings in raw milk availability, put pressure on our transfor-
mation and efficiency programme, Fund our Future. However, 
we reached the expected net savings target of EUR 101 mil-
lion, primarily delivered by overperformance in net revenue 
management, International net productivity and a lower mar-
keting spend. EUR 26 million related to improved revenue and 
EUR 75 million related to cost efficiencies. 
Cost of raw milk 
The cost of raw milk increased by 37.5 per cent to EUR 7,180 
million compared to EUR 5,223 million last year.  
Owner milk 
Costs related to owner milk increased by EUR 1,899 million 
due to a higher average pre-paid milk price. Arla's average pre-
paid milk price increased to 52.0 EUR-cent/kg in 2022 com-
pared to 37.0 EUR-cent/kg last year, which constitutes a 40.5 
per cent increase.  
Other milk 
The cost of other milk increased by EUR 58 million due to 
higher prices, partly offset by lower volumes in the UK and the 
Netherlands. Other milk consists of speciality milk and other 
contract milk acquired to meet local market demand. 
Staff costs and number of FTEs  
Staff costs increased by 4.9 per cent to EUR 1,427 million 
compared to EUR 1,360 million last year. Staff costs increased 
due to additional FTEs in Arla Foods Ingredients, continued in-
sourcing of IT activities and regular salary increases.  
The total number of FTEs increased to 20,907 compared to 
20,617 last year. Please refer to the ESG section, Note 1.2, for 
further details. 
Marketing spend  
The marketing spend was consistent with last year and 
amounted to EUR 240 million.  
Depreciation, amortisation and impairment 
Depreciation, amortisation and impairment were consistent 
with last year and amounted to EUR 472 million. 
 
 
 
 REVENUE AND COSTS1.2 OPERATIONAL COSTS
Development in operational costs 
(EURm) 
 
 
2021 
Milk cost 
Inflation 
Efficiency 
cost impact 
Other changes  
including 
volume/mix 
Currency 
2022

REVENUE AND COSTS1.2 OPERATIONAL COSTS
Cost split by type 
  Weighed-in raw milk  49% (48%) 
  Marketing costs  2% (2%) 
  Other production materials*  17% (18%) 
  Depreciation, amortisation and impairment  4% (4%) 
  Staff costs  13% (13%) 
  Other costs**  8% (8%) 
  Transport costs  7% (7%) 
   
 
13,355
(EURm)
2022
10,822
(EURm)
2021
Table 1.2.a Operational costs split by function and type 
 
 
(EURm) 
2022 
2021 
Production costs 
 11,145  
 8,822  
Sales and distribution costs 
 1,771  
 1,573  
Administration costs 
  439  
  427  
Total 
 13,355  
 10,822  
 
 
 
Specification: 
  
  
Weighed-in raw milk 
 7,180  
 5,223  
Other production materials* 
 2,181  
 1,959  
Staff costs 
 1,427  
 1,360  
Transport costs 
  820  
  718  
Marketing costs 
  240  
  238  
Depreciation, amortisation and impairment 
  472  
  480  
Other costs** 
 1,035  
  844  
Total 
 13,355  
 10,822  
*Other production materials include packaging, additives, consumables, variable energy and changes in inventory 
**Other costs mainly include maintenance, utilities and IT 
Table 1.2.b Weighed-in raw milk 
2022 
2021 
 
Mkg  
EURm 
Mkg 
EURm 
Owner milk 
  12,494  
  6,661  
  12,518  
  4,762  
Other milk 
961  
519  
  1,128  
461  
Total 
  13,455  
  7,180  
  13,646  
  5,223

Accounting policies 
Production costs  
Production costs cover direct and indirect costs related to pro-
duction, including volume movements in inventories and  
related inventory revaluation. Direct costs comprise purchase 
of milk from owners, inbound transport costs, packaging,  
additives, consumables, energy and variable salaries directly 
related to production. Indirect costs comprise other costs  
related to the production of goods, including depreciation and 
impairment losses on production-related materials and other 
supply chain-related costs. The purchase of milk from cooper-
ative owners is recognised at pre-paid prices for the account-
ing period and therefore does not include the supplementary 
payment, which is classified as distributions to owners and rec-
ognised directly in equity. 
 
 
 
Sales and distribution costs  
Costs relating to sales staff, write-downs on receivables, spon-
sorships, research and development, depreciation and impair-
ment losses are recognised as sales and distribution costs. 
Sales and distribution costs also include marketing  
expenses relating to investments in the group's brands, such 
as the development of marketing campaigns, advertising, ex-
hibits etc.  
Administration costs  
Administration costs relate to management and administra-
tion, including administrative staff, office premises and office 
costs as well as depreciation and impairment. 
 
 
 
 
 REVENUE AND COSTS1.2 OPERATIONAL COSTS
Table 1.2.d Depreciation, amortisation and impairment 
 
 
(EURm) 
2022 
2021 
 
 
 
Intangible assets, amortisation 
  61  
  74  
Property, plant and equipment and RoU, depreciation 
  411  
  406  
Total 
  472  
  480  
 
 
 
Depreciation, amortisation and impairment relate to:  
  
  
Production costs 
  336  
  329  
Sales and distribution costs 
  67  
  75  
Administration costs 
  69  
  76  
Total 
  472  
  480  
Table 1.2.c Staff costs 
 
 
(EURm) 
2022 
2021 
 
 
 
Wages, salaries and remuneration  
 1,239  
 1,177  
Pensions – defined contribution plans  
  90  
  83  
Pensions – defined benefit plans  
  1  
  5  
Other social security costs 
  97  
  95  
Total 
 1,427  
 1,360  
 
 
 
Staff costs relate to:  
  
  
Production costs 
  800  
  756  
Sales and distribution costs 
  412  
  394  
Administration costs 
  215  
  210  
Total 
 1,427  
 1,360  
 
 
 
Average number of full-time employees 
 20,907  
 20,617

Other income and costs 
Other operating income and costs, net, amounted to EUR 31 
million compared to EUR 35 million last year.  
The net income of EUR 31 million was primarily attributable to 
commodity hedging of EUR 72 million, sales of surplus elec-
tricity of EUR 26 million and positive currency hedging of EUR 
8 million. This was offset by negative currency hedging of EUR 
76 million and a loss due to the divestment of the Russian ac-
tivities of EUR 19 million. 
 
 
Accounting policies 
Other operating income and costs consist of items outside the 
regular course of dairy business activities, including items 
such as gains and losses relating to the settlement of disputes, 
revaluation gains from the step acquisition of entities, the net 
result of financial hedging activities and the net result of the 
production and sale of energy from our biogas plants. Further-
more, this item includes gains and losses from disposal of non-
current assets and divestment of entities. 
 1.4.1 PERFORMANCE PRICE
 
Financial comments 
Arla's performance price is a key measure of our overall perfor-
mance, expressing the value added to each kg of milk supplied 
by our farmer owners. The performance price is calculated as 
the standardised pre-paid milk price included in production 
costs, plus Arla Foods amba's share of the profit attributable to 
farmer owners, divided by the weighed-in milk volume in 
2022. The performance price was 55.1 EUR-cent/kg of owner 
milk compared to 39.7 EUR-cent/kg of owner milk last year. 
The alternative performance measures disclosed in Note 1.4 
are key performance indicators for the group. They are not an 
IFRS requirement. 
 
 
 
 REVENUE AND COSTS1.3 OTHER OPERATING INCOME AND COSTSREVENUE AND COSTS1.4 KEY PERFORMANCE INDICATORS
Table 1.3 Other operating income, net 
  
  
(EURm) 
2022 
2021 
 
 
 
Sale of electricity 
  58  
  28  
Income from hedging instruments transferred from equity 
  80  
  36  
Gains on disposal of intangible assets and PP&E 
  11  
  17  
Other items 
  13  
  29  
Other operating income 
  162  
  110  
 
 
 
Costs related to sale of electricity 
-32  
-24  
Costs of hedging instruments transferred from equity 
-76  
-38  
Other items 
-23  
-13  
Other operating costs 
-131  
-75  
Table 1.4.1 Performance price 
2022 
2021 
 
 
 
 
 
 
 
 
EURm 
Mkg EUR-cent/kg 
EURm 
Mkg EUR-cent/kg 
Owner milk 
6,661  
12,494  
53.3  
4,762  
12,518  
38.0  
Adjustment to standard milk (4.2% fat, 3.4% 
protein) 
  
  
 -1.3  
  
  
 -1.0  
Arla Foods amba's share of profit for the year 
 382  
  
3.1  
 332  
  
2.7  
Total 
  
12,494  
55.1  
  
12,518  
39.7

1.4.2 STRATEGIC BRANDED VOLUME-DRIVEN REVENUE GROWTH
 
Financial comments 
Volume-driven revenue growth (VDRG) is defined as revenue 
growth derived from growth in volumes keeping prices  
constant.  
VDRG of strategic brands is a performance measure applied to 
support and understand the non-price revenue growth and 
performance of our branded business. 
Strategic branded VDRG decreased by 3.2 per cent in 2022 af-
ter significant increases in the last two years. Although the de-
mand for branded products remains high in the retail sector, 
the inflationary price increases meant that some customers 
turned to cheaper non-branded products.
 
Accounting policies 
Strategic branded volume-driven revenue growth (strategic 
branded VDRG) is a measure of the share of revenue growth 
relative to volumes. 
Volume-driven revenue is calculated by keeping prices fixed 
year on year. 
Strategic branded VDRG is calculated as the volume growth of 
EUR -176 million divided by total strategic branded revenue 
last year of EUR 5,472 million and amounted to -3.2 per cent 
in 2022. 
 
 1.4.3 PROFIT SHARE
 
Financial comments 
Arla's profit share is targeted at 2.8-3.2 per cent of revenue, 
calculated on the basis of the profit attributable to our farmer 
owners.  
In 2022, the profit attributable to our farmer owners 
amounted to EUR 382 million compared to EUR 332 million 
last year. This corresponded to 2.8 per cent of revenue, or  
3.1 EUR-cent/kg of milk delivered, and was distributed to the 
supplementary payment and retainment as disclosed in the 
statement of profit appropriation. 
 
Accounting policies 
The profit share is a measure of profit relative to revenue,  
calculated as Arla Foods amba's share of profit for the year  
divided by total revenue. 
The profit share is calculated as EUR 382 million divided by 
EUR 13,793 million and came to 2.8 per cent in 2022. 
 
 REVENUE AND COSTS1.4 KEY PERFORMANCE INDICATORS
Table 1.4.2 Strategic branded volume-driven revenue growth 
  
  
(EURm) 
2022 
2021 
Strategic branded revenue last year 
 5,472  
 5,156  
Strategic branded VDRG 
-176  
  230  
Price and exchange rate adjustments 
  998  
  86  
Strategic branded revenue 
 6,294  
 5,472  
 
 
 
Strategic branded volume-driven revenue growth, % 
-3.2% 
4.5% 
Table 1.4.3 Profit share 
  
  
(EURm) 
2022 
2021 
Revenue 
 13,793  
 11,202  
Profit for the year 
  400  
  346  
Profit relating to non-controlling interests 
-18  
-14  
Profit attributable to farmer owners 
  382  
  332  
 
 
 
Profit share 
2.8% 
3.0%

Net working capital development 
Net working capital increased by EUR 632 million to EUR 
1,442 million compared to EUR 810 million last year, repre-
senting an increase of 78 per cent on last year. The increase 
was driven by higher inventory and trade receivables positions 
partly offset by trade payables and other payables. 
Inventory 
Inventory increased by 42 per cent to EUR 1,772 million com-
pared to EUR 1,248 million last year. The increase was driven 
by higher milk prices to our farmer owners, higher energy 
prices and inflation in other production materials such as 
packaging, consumables and utilities. To a lesser extent, the 
increase was due to higher stock volumes and a changed 
composition of inventory compared to last year. Excluding cur-
rency effects, the carrying amount of inventory increased by 
EUR 558 million. 
Trade receivables 
Trade receivables increased by 26 per cent to EUR 1,267 mil-
lion compared to EUR 1,007 million last year. The develop-
ment was driven by increased selling prices and partly offset 
by higher utilisation of trade receivables finance programmes. 
The group utilises these programmes to manage liquidity and 
reduce credit risk on trade receivables.  
 
 
Managing credit risk exposure on trade receivables is guided 
by group-wide policies. Credit limits are set based on the cus-
tomer's financial position and current market conditions. The 
customer portfolio is diversified in terms of geography, indus-
try sector and customer size. In 2022, the group was not ex-
traordinarily exposed to credit risk related to significant indi-
vidual customers, but to the general credit risk in the retail 
sector. Read more about credit risk in Note 4.1.5. 
Overdues above 30 days amounted to 8.8 per cent of the 
trade receivables position compared to 6.5 per cent last year. 
Provision for expected losses was EUR 19 million compared to  
EUR 15 million last year. 
Excluding currency effects, the carrying amount of trade  
receivables increased by EUR 290 million. 
Trade payables and other payables 
Trade payables and other payables increased by 11 per cent to 
EUR 1,597 million compared to EUR 1,445 million last year.  
Inflation was the main reason for the development. 
A number of Arla's strategic suppliers participate in supply 
chain finance programmes, where the supply chain finance 
provider and related financial institutions act as a funding part-
ner. When suppliers participate in these programmes, the sup-
plier has the option, at their own discretion and flexibility, to 
receive early payment from the funding partner based on in-
voices sent to Arla. This is conditioned by Arla's recognition 
and approval of received goods or services and an irrevocable 
acceptance to pay the invoice at the due date via the funding 
partner. The arrangement of early payment is an exclusive 
transaction between the supplier and the supply chain finance 
provider. 
Extended payment terms are not embedded in the pro-
grammes themselves, but agreed with vendors directly. 
 
The liquidity risk for Arla on termination of the programmes is 
limited. The payment terms for suppliers participating in the 
programmes are no more than 180 days. Utilisation of supply 
chain finance programmes was on the same level as last year. 
Excluding currency effects, the carrying amount of trade paya-
bles and other payables including owner milk increased by 
EUR 176 million. 
Other receivables and other current liabilities  
Other receivables increased by EUR 34 million to EUR 319 mil-
lion compared to EUR 285 million last year, and mainly consist 
of VAT and duty receivables. Other current liabilities increased 
by EUR 21 million to EUR 301 million compared to EUR 280 
million last year. Other current liabilities mainly consist of  
HR-related accruals. NET WORKING CAPITAL2.1 NET WORKING CAPITAL, OTHER RECEIVABLES AND CURRENT LIABILITIES
Development in net working capital 
(EURm) 
 
 
1 January 
2022 
Inventory 
Trade 
receivables 
Trade payables and 
other payables 
excluding owner milk 
Owner milk 
Currency 
31 December 
2022

Net working capital 
(EURm) 
 
894
823
679
810
1,442
1,103
1,000
867
1,022
1,740
2018
2019
2020
2021
2022
Net working capital
Net working capital excluding owner milk
Historically, experienced loss rates on balances not overdue or overdue by less than 30 days are below 1 per cent. 
Table 2.1.a Net working capital 
  
Cash flow 
  
Non-cash flow 
  
  
(EURm) 
1 January 
Included in  
operating 
cash flow   
Write-
downs 
Currency   
31 December  
 
 
 
  
 
  
2022 
  
    
  
    
  
Inventory 
1,248  
569    
 -11  
 -34    
 1,772  
Trade receivables 
1,007  
318    
 -4  
 -54    
 1,267  
Trade payables and other payables 
  -1,445  
  -180    
 - 
28    
  -1,597  
Total net working capital 
810  
707    
 -15  
 -60    
 1,442  
 
 
 
  
 
  
2021 
  
    
  
    
  
Inventory 
1,080  
135    
 -3  
36    
 1,248  
Trade receivables 
811  
171    
 -1  
26    
 1,007  
Trade payables and other payables 
  -1,212  
  -216    
 - 
 -17    
  -1,445  
Total net working capital 
679  
90    
 -4  
45    
 810  
Table 2.1.b Inventory 
 
 
(EURm) 
2022 
2021 
Inventory before the write-downs 
 1,801  
 1,269  
Write-downs 
  -29  
  -21  
Total inventory 
 1,772  
 1,248  
 
 
 
Raw materials and consumables 
 401  
 274  
Work in progress 
 622  
 382  
Finished goods and goods for resale 
 749  
 592  
Total inventory 
 1,772  
 1,248  
Table 2.1.d Trade receivables age profile 
2022 
2021 
(EURm) 
Gross carrying 
amount 
Expected loss rate 
Gross carrying 
amount 
Expected loss rate 
 
 
 
 
 
Not overdue 
  1,013  
0% 
837  
0% 
Overdue by less than 30 days 
160  
0% 
119  
0% 
Overdue by between 30 and 89 days 
72  
1% 
38  
3% 
Overdue by more than 90 days 
41  
44% 
28  
50% 
Total trade receivables 
  1,286  
  
  1,022  
  
Table 2.1.c Trade receivables 
 
 
(EURm) 
2022 
2021 
Trade receivables before provision for expected losses 
  1,286  
  1,022  
Provision for expected losses 
 -19  
 -15  
Total trade receivables 
  1,267  
  1,007

Accounting policies 
Inventory 
Inventories are measured at the lower of cost or net realisable 
value, calculated on a first-in, first-out basis. The net realisable 
value is established taking into account inventory marketabil-
ity and an estimate of the selling price, less completion costs 
and costs incurred to execute the sale. 
The cost of raw materials, consumables and commercial 
goods includes the purchase price plus delivery costs. The pre-
paid milk price to Arla's owners is used as the purchase price 
for owner milk. 
The cost of work in progress and manufactured goods also  
includes an appropriate share of production overheads, includ-
ing depreciation, based on the normal operating capacity of 
the production facilities. 
Trade receivables 
Trade receivables are recognised at the invoiced amount less 
expected losses in accordance with the simplified approach 
for amounts considered irrecoverable (amortised cost).  
Expected losses are measured as the difference between 
the carrying amount and the present value of anticipated  
cash flows. 
Expected losses are assessed for major individual receivables 
or in groups at portfolio level based on the receivables' age 
and maturity profile as well as historical records of losses. Cal-
culated expected losses are adjusted for specific significant 
negative developments in geographical areas. 
Trade receivables subject to trade receivables finance pro-
grammes are derecognised once the criteria for derecognition 
have been met and all substantial risks and rewards have been 
transferred. 
Trade payables and other payables 
Trade payables are measured at amortised cost, which usually 
corresponds to the invoiced amounts. 
The amounts payable to suppliers included in supply chain fi-
nance programmes are classified as trade payables in the bal-
ance sheet and in the cash flow statement as cash flow from 
working capital. 
Other receivables and other current liabilities  
Other receivables and other current liabilities are measured at 
amortised cost usually corresponding to the nominal amount. 
 
Uncertainties and estimates 
Inventory 
The group uses monthly standard costs to calculate inventory 
and revises all indirect production costs at least once a year. 
Standard costs are also revised if they deviate materially from 
the actual cost of the individual product. A key component in 
the standard cost calculation is the cost of raw milk from farm-
ers. This is determined using the average pre-paid milk price 
that matches the production date of inventory.  
Due to the macroeconomic volatility and the related effect on 
commodity prices, valuations of individual cost components, 
such as milk-based components, energy, packaging, consuma-
bles and utilities etc. in our standard cost models were fre-
quently updated throughout 2022 and carefully assessed at 
31 December 2022. 
Conversion from standard cost to reflect cost at the time of 
production for the individual inventory categories was corre-
spondingly carefully assessed. 
Indirect production costs are calculated based on relevant as-
sumptions with respect to capacity utilisation, production time 
and other factors characterising the individual product.  
The assessment of the net realisable value requires judge-
ment, particularly in relation to the estimate of  the selling 
price of certain cheese stock with long maturities and bulk 
products to be sold on European or global commodity mar-
kets. 
Receivables 
Expected losses are based on a calculation, including several 
parameters, for example the number of days overdue adjusted 
for significant negative developments in certain geographical 
areas.  
The financial uncertainty associated with the provision for  
expected losses is usually considered to be limited. However, if 
a customer's ability to pay were to deteriorate in the future, 
further write-downs may be necessary.  
Based on the macroeconomic volatility and the increased sell-
ing prices in 2022, expected losses were carefully assessed. 
Customer-specific bonuses are calculated based on actual 
agreements with retailers; however, some uncertainty exists 
when estimating the exact amounts to be settled and the tim-
ing of these settlements. 
Finance programmes 
The classification of trade receivables finance programmes 
and supply chain finance programmes is subject to judge-
ment. The utilisation of these programmes is recognised in 
net working capital. 
 
 
 NET WORKING CAPITAL2.1 NET WORKING CAPITAL,OTHER RECEIVABLES ANDCURRENT LIABILITIES

Intangible assets and goodwill 
Intangible assets and goodwill amounted to EUR 954 million, 
unchanged from last year.  
Goodwill 
The carrying amount of goodwill amounted to EUR 702 mil-
lion compared to EUR 710 million last year. Addition for the 
year amounting to EUR 16 million related to an acquisition in 
our Chinese business unit. Of the carrying amount of goodwill, 
EUR 473 million related to activities in the UK compared to 
EUR 498 million last year. Please refer to table 3.1.b for a spec-
ification of goodwill. 
Licences and trademarks 
The carrying amount of licences and trademarks amounted to 
EUR 66 million compared to EUR 76 million last year. The car-
rying amount primarily related to the recognition of trade-
marks in connection with business combinations and includes 
brands such as Yeo Valley® and Svensk Mjölk®. The decrease 
in value compared to last year was due to amortisation.  
The strategic brands, Arla®, Lurpak®, Castello® and Puck® are 
internally generated trademarks and consequently no carrying 
amounts are recognised for these. Arla has the licence to man-
ufacture, distribute and market StarbucksTM premium ready-
to-drink coffee beverages under a long-term strategic licence 
agreement. Additionally, Arla holds a long-term licence agree-
ment to manufacture, distribute and market KraftTM branded 
cheese products in the MENA region. No values are recog-
nised for these licence agreements. 
IT and other development projects 
The carrying amount of IT and other development projects 
was EUR 186 million compared to EUR 160 million last year. 
The group continued to invest in IT projects with an addition of 
EUR 76 million. One of the key projects in 2022 was a general 
upgrade of our SAP platform.  
 
 CAPITAL EMPLOYED3.1 INTANGIBLE ASSETS AND GOODWILL
Intangible assets and goodwill  
  Goodwill 74% (75%) 
  IT and other development 
projects 19% (17%) 
  Licences and trademarks 7% (8%) 
   
954
(EURm)
2022
946
(EURm)
2021
Table 3.1.a Intangible assets and goodwill 
 
 
 
 
(EURm) 
Goodwill  
Licences and 
trademarks  
IT and other  
development 
projects  
Total 
 
 
 
 
 
2022 
  
  
  
  
Cost at 1 January  
  710  
  166  
  558  
 1,434  
Exchange rate adjustments 
-22  
-6  
-1  
-29  
Additions  
  16  
 - 
  76  
  92  
Impairment 
-2  
 - 
 - 
-2  
Disposals 
 - 
 - 
-2  
-2  
Cost at 31 December 
  702  
  160  
  631  
 1,493  
Amortisation and impairment at 1 January 
 - 
-90  
-398  
-488  
Exchange rate adjustments 
 - 
  3  
  5  
  8  
Amortisation and impairment for the year 
 - 
-7  
-54  
-61  
Amortisation on disposals 
 - 
 - 
  2  
  2  
Amortisation and impairment at 31 December 
 - 
-94  
-445  
-539  
Carrying amount at 31 December 
  702  
  66  
  186  
  954  
 
 
 
 
 
2021 
  
  
  
  
Cost at 1 January  
  667  
  163  
  513  
 1,343  
Exchange rate adjustments 
  43  
  3  
  2  
  48  
Additions  
 - 
 - 
  45  
  45  
Disposals 
 - 
 - 
-2  
-2  
Cost at 31 December 
  710  
  166  
  558  
 1,434  
Amortisation and impairment at 1 January 
 - 
-82  
-330  
-412  
Exchange rate adjustments 
 - 
-1  
-3  
-4  
Amortisation and impairment for the year 
 - 
-7  
-67  
-74  
Amortisation on disposals 
 - 
 - 
  2  
  2  
Amortisation and impairment at 31 December 
 - 
-90  
-398  
-488  
Carrying amount at 31 December 
  710  
  76  
  160  
  946

Accounting policies 
Goodwill 
Goodwill represents the premium paid by Arla above the fair 
value of the net assets of an acquired company. On initial 
recognition, goodwill is recognised at cost. Goodwill is not 
amortised, but is subsequently measured at cost less any ac-
cumulated impairment. The carrying amount of goodwill is al-
located to the group's cash-generating units which follow the 
management structure and internal financial reporting. Cash-
generating units are the smallest group of assets which can 
generate independent cash inflows. 
 
Licences and trademarks 
Licences and trademarks are initially recognised at cost. The 
cost is subsequently amortised on a straight-line basis over 
their expected useful lives, with a maximum of 20 years. 
IT and other development projects 
Costs incurred during the research or exploration phase when 
carrying out general assessments of requirements and availa-
ble technologies are expensed as incurred. Directly attributa-
ble costs incurred during the development stage for IT and 
other development projects relating to the design, program-
ming, installation and testing of projects before they are ready 
for commercial use are capitalised as intangible assets. Such 
costs are only capitalised provided the expenditure can be 
measured reliably, the project is technically and commercially 
viable, future economic benefits are probable and the group 
intends to and has sufficient resources to complete and use 
the asset. IT and other development projects are amortised on 
a straight-line basis over five to eight years. 3.1.1 IMPAIRMENT TEST OF GOODWILL
 
Impairment test 
Goodwill is allocated to relevant cash-generating units, primar-
ily to our activities in the UK within the commercial segment 
Europe.  
Basis for impairment test and applied estimates 
Impairment tests are based on expected future cash flows de-
rived from forecasts and long-term strategic targets. Future 
cash flows and earnings targets are projected for individual 
cash-generating units based on expected developments iden-
tified in the Future26 strategy process as well as past experi-
ence. The impairment tests do not include revenue growth in 
the terminal value.  
Procedure for impairment tests  
Impairment tests of goodwill are based on an assessment of 
their value in use. Milk costs in the forecast are recognised at a 
milk price that corresponds to the price at the time the test 
was performed and longer-term. The key operational 
assumption is future profitability based on a combination of 
the impact from moving milk intake into value-add products, 
more profitable markets and operational efficiency initiatives. 
 
Test results 
An increased interest rate level led to a higher discount rate, 
resulting in lower calculated headroom. With lower headroom, 
our goodwill positions were carefully monitored and support-
ing business cases assessed throughout the year.  
With the applied discount rates, sensitivity analyses showed 
that margins in the UK could decline by 1 per centage point 
without risk of impairment. For goodwill related to Finland, a 
similar reduction in margins could lead to an impairment of 
the carrying amount. Subsequently, after the detailed calcula-
tions were performed, the market situation in Finland im-
proved. 
 
 CAPITAL EMPLOYED3.1 INTANGIBLE ASSETS AND GOODWILL
Table 3.1.b Goodwill split by commercial segment and country 
 
 
(EURm) 
2022 
2021 
 
 
 
UK 
  473  
  498  
Finland 
  40  
  40  
Sweden 
  20  
  22  
Other 
  60  
  63  
Europe total 
  593  
  623  
 
 
 
MENA 
  83  
  78  
China 
  16  
 - 
International 
  99  
  78  
 
 
 
Argentina 
  10  
  9  
Arla Foods Ingredients 
  10  
  9  
Total 
  702  
  710  
Table 3.1.1 Applied key assumptions 
2022 
  
2021 
(EURm) 
Discount 
rate,  
net of tax 
Discount 
rate,  
before tax   
Discount 
rate,  
net of tax 
Discount 
rate,  
before tax 
 
 
 
  
 
UK 
8.6% 
9.5%   
6.5% 
7.2% 
Finland 
7.6% 
8.2%   
5.6% 
6.0% 
Sweden 
7.6% 
8.4%   
6.1% 
6.7% 
Europe, other 
7.4% 
8.3%   
5.7% 
6.3% 
MENA 
13.0% 
14.4%   
12.0% 
13.7% 
Arla Foods Ingredients 
8.1% 
9.1%   
6.3% 
7.0%

Accounting policies 
Impairment occurs when the carrying amount of an asset is 
greater than its recoverable amount through either use or 
sale. For impairment testing, assets are grouped together into 
the smallest group of assets that generates cash inflows from 
continuing use (a cash-generating unit) which are largely inde-
pendent of the cash inflows of other assets or cash-generating 
units. For goodwill which does not generate largely independ-
ent cash inflows, impairment tests are prepared at the level 
where cash flows are considered to be generated largely  
independently.  
The group of cash-generating units is determined based on 
the management structure and internal financial reporting. 
The structure and groups of cash-generating units are as-
sessed on an annual basis. The carrying amount of goodwill is 
tested for impairment together with other non-current assets 
in the cash-generating unit to which the goodwill is allocated. 
The recoverable amount of goodwill is recognised as the pre-
sent value of the expected future net cash flows from the 
group of cash-generating units to which the goodwill is allo-
cated, discounted using a pre-tax discount rate that reflects 
the current market assessment of the time value of money 
and risks specific to the asset or cash-generating unit. 
The carrying amount of other non-current assets is assessed 
annually against its recoverable amount to determine whether 
there is any indication of impairment. Any impairment of 
goodwill is recognised as a separate item in the income state-
ment and cannot be reversed. 
The recoverable amount of other non-current assets is the 
higher value of the asset's value in use and its market value, i.e. 
fair value, less expected disposal costs. The value in use is cal-
culated as the present value of the estimated future net cash 
flows from the use of the asset or the group of cash-generat-
ing units to which the asset belongs. 
An impairment loss on other non-current assets is recognised 
in the income statement under production costs, selling and 
distribution costs or administration costs, respectively. Impair-
ment recognised can only be reversed to the extent that the 
assumptions and estimates that led to the impairment have 
changed. An impairment loss is reversed only to the extent 
that the asset's carrying amount does not exceed the carrying 
amount that would have been determined, net of depreciation 
or amortisation, had no impairment loss been recognised. 
 
Uncertainties and estimates 
Goodwill impairment tests are performed for the group of 
cash-generating units to which goodwill is allocated. The 
group of cash-generating units is defined based on the man-
agement structure for commercial segments and is linked to 
individual markets. The structure and groups of cash-generat-
ing units are assessed on an annual basis.  
The impairment test of goodwill is performed at least annually 
for each group of cash-generating units to which goodwill is 
allocated. In 2022, we assessed the validity of our 2026 tar-
gets in the light of both macroeconomic volatility and volatility 
within the dairy sector, and we have more thoroughly analysed 
and tested our goodwill positions compared to normal proce-
dures. 
To determine the value in use, the expected cash flow ap-
proach is applied. The most important parameters in the im-
pairment test include anticipations of future free cash flows 
and assumptions of discount rates.  
Anticipated future free cash flows 
The anticipated future free cash flows are based on current 
forecasts and long-term 2026 targets derived from the  
Future26 process. These are determined at cash-generating 
unit level in the forecast and target planning process and are 
based on external sources of information and industry-rele-
vant observations such as macroeconomic and market  
conditions.  
All applied assumptions are challenged through the forecast 
and target planning process based on management's best  
estimates and expectations, which are subject to judgement 
by nature. They include expectations regarding revenue 
growth, EBIT margins and capital expenditure. The assump-
tions include moving milk intake into value-add products and 
more profitable markets and operational efficiency initiatives. 
The growth rate beyond the strategy period has been set to 
the expected inflation rate in the terminal period and assumes 
no nominal growth. 
Discount rates 
A discount rate, namely weighted average cost of capital 
(WACC), is applied for specific cash-generating units based on 
assumptions regarding interest rates and risk premiums. The 
WACC is recalculated to a before-tax rate. Changes in the  
future cash flow or discount rate estimates used may result 
in materially different values. 
 
 CAPITAL EMPLOYED3.1 INTANGIBLE ASSETS AND GOODWILL

Property, plant and equipment 
Arla's main property, plant and equipment are located in  
Denmark, the UK, Germany and Sweden. The carrying amount 
was EUR 3,031 million compared to EUR 3,072 million  
last year.  
Additions amounted to EUR 429 million compared to EUR 521 
million last year. 
 
Additions included the finalisation of the powder tower in 
Pronsfeld, Germany, investments in the production facilities 
in Bahrain and expansion of the mozzarella production in  
Denmark.  
 
New projects included investments in a capacity increase for 
milk-based beverages in Esbjerg, Denmark, a packaging equip-
ment upgrade in Oakthorpe, UK, and growth investments in 
Arla Foods Ingredients. 
 
Depreciation amounted to EUR 411 million, unchanged from 
last year. CAPITAL EMPLOYED3.2 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment by country 
  Denmark 47% (45%) 
  Germany 14% (15%) 
  Sweden 10% (10%) 
  Other 11% (11%) 
  UK 18% (19%) 
 
3,031
(EURm)
2022
3,072
(EURm)
2021
Table 3.2.a Property, plant and equipment 
 
 
 
 
 
(EURm) 
Land and 
building 
Plant and 
machinery 
Fixture and fit-
ting, tools and 
equipment 
Asset in 
course of 
construction 
Total 
 
 
 
 
 
 
2022 
  
  
  
  
  
Cost at 1 January  
  1,987  
  3,800  
  782  
 413  
  6,982  
Exchange rate adjustments 
 -43  
 -73  
-19  
  -3  
 -138  
Additions  
58  
114  
  58  
 199  
429  
Transferred from assets in the course of construction 
62  
189  
  21  
  -272  
  - 
Disposals 
 -17  
 -46  
-37  
  -4  
 -104  
Cost at 31 December 
  2,047  
  3,984  
  805  
 333  
  7,169  
Depreciation and impairment at 1 January 
 -838  
-2,489  
-583  
- 
-3,910  
Exchange rate adjustments 
22  
57  
  17  
- 
96  
Depreciation and impairment for the year 
 -86  
 -247  
-78  
- 
 -411  
Depreciation on disposals 
14  
38  
  35  
- 
87  
Depreciation and impairment at 31 December 
 -888  
-2,641  
-609  
- 
-4,138  
Carrying amount at 31 December 
  1,159  
  1,343  
  196  
 333  
  3,031  
Right-of-use assets in the carrying amount at 31 December 
124  
11  
  74  
  
209  
2021 
  
  
  
  
  
Cost at 1 January  
  1,770  
  3,471  
  724  
 453  
  6,418  
Exchange rate adjustments 
38  
45  
  20  
 11  
114  
Additions  
104  
133  
  53  
 231  
521  
Transferred from assets in the course of construction 
100  
169  
  12  
  -281  
  - 
Disposals 
 -27  
 -46  
-32  
  -1  
 -106  
Reclassification 
2  
28  
  5  
- 
35  
Cost at 31 December 
  1,987  
  3,800  
  782  
 413  
  6,982  
Depreciation and impairment at 1 January 
 -764  
-2,219  
-520  
- 
-3,503  
Exchange rate adjustments 
 -9  
 -29  
-11  
- 
 -49  
Depreciation and impairment for the year 
 -78  
 -251  
-77  
- 
 -406  
Depreciation on disposals 
15  
38  
  30  
- 
83  
Reclassification 
 -2  
 -28  
-5  
- 
 -35  
Depreciation and impairment at 31 December 
 -838  
-2,489  
-583  
- 
-3,910  
Carrying amount at 31 December 
  1,149  
  1,311  
  199  
 413  
  3,072  
Right-of-use assets in the carrying amount at 31 December 
141  
8  
  81  
  
230

Accounting policies 
Property, plant and equipment are measured at cost less  
accumulated depreciation and accumulated impairment 
losses. Assets under construction, land and decommissioned 
plants are not depreciated. 
Cost 
Cost comprises the acquisition price as well as costs directly 
associated with an asset until the asset is ready for its intended 
use. For self-constructed assets, cost comprises direct and in-
direct costs relating to materials, components, payroll and the 
borrowing costs from specific and general borrowing that di-
rectly concerns the construction of assets. If significant parts 
of an item of property, plant and equipment have different 
useful lives, they are recognised as separate items (major 
components) and depreciated separately. When component 
parts are replaced, any remaining carrying amount of replaced 
parts is removed from the balance sheet and recognised as an 
accelerated depreciation charge in the income statement. 
Subsequent expenditures of property, plant and equipment 
are only recognised as an addition to the carrying amount of 
the item, when it is likely that incurring the cost will result in fi-
nancial benefits for the group. Other costs such as general re-
pair and maintenance are recognised in the income statement 
when incurred. 
Depreciation 
Depreciation aims to allocate the cost of the asset, less any 
amounts estimated to be recoverable at the end of its ex-
pected use, to the periods in which the group obtains benefits 
from its use. Property, plant and equipment are depreciated 
on a straight-line basis from the time of acquisition, or when 
the asset is available for use based on an assessment of the es-
timated useful life. 
The depreciation base is measured taking into account the re-
sidual value of the asset, being the estimated value the asset 
can generate through sale or scrappage at the balance sheet 
date if the asset was of the age and in the condition expected 
at the end of its useful life, and reduced by any impairment 
made. The residual value is determined at the date of acquisi-
tion and is reviewed annually. Depreciation ceases when the 
carrying amount of an item is lower than the residual value, or 
when an item is decommissioned. Changes during the depre-
ciation period or in the residual value are treated as changes 
to accounting estimates, the effect of which is adjusted only in 
current and future periods. Depreciation is recognised in the 
income statement in production costs, sales and distribution 
costs or administration costs. 
 
Uncertainties and estimates 
Estimates are made in assessing the useful lives of items of 
property, plant and equipment that determine the period over 
which the depreciable amount of the asset is expensed in the 
income statement. The depreciable amount of an item of 
property, plant and equipment is a function of the asset's cost 
or carrying amount and its residual value. Estimates are made 
in assessing the amount that the group can recover at the end 
of the useful life of an asset. An annual review is performed  
to assess the appropriateness of the depreciation method, 
useful life and residual values of items of property, plant  
and equipment. 
As a consequence of climate-related risks, Arla could face  
future impairment of its production capacity due to equip-
ment becoming outdated in the sustainability transformation 
or from excess production capacity if milk volumes and opera-
tions decline.  
Non-current assets in the balance sheet were not affected by 
such impairment in 2022. Sustainability is now an integral part 
of all CAPEX investments which ensures future investments to 
address the risks identified. 
 CAPITAL EMPLOYED3.2 PROPERTY, PLANT AND EQUIPMENT
Investments in and depreciation of property, plant and equipment and right-of-use assets 
(EURm) 
 
383
506
580
521
429
306
367
381
406
411
425
478
452
373
297
314
332
340
0
200
400
600
2018
2019
2020
2021
2022
102
69
56
74
67
74
Right-of-use assets
Depreciation of property, plant and equipment
Investments in property, plant and equipment
81
70
Table 3.2.b Estimated useful life in years 
 
 
(EURm) 
2022 
2021 
 
 
 
Office buildings 
 50  
 50  
Production buildings 
20-30 
20-30 
Technical facilities 
5-20 
5-20 
Other fixtures and fittings, tools and equipment 
3-7 
3-7

3.2.1 RIGHT-OF-USE ASSETS
 
Right-of-use assets 
Arla leases various offices, warehouses, vehicles and other 
equipment. Leases are typically agreed for a fixed duration,  
but may include an extension option. Significant right-of-use 
assets include office buildings and warehouses in Denmark, 
Germany, Sweden and the UK with remaining useful lives be-
tween 10 and 20 years.  
Filling machinery and other technical plants represent another 
major right-of-use asset category. Filling machines typically 
have useful lives of seven years, whereas other technical 
plants are depreciated between one and seven years. Cars and 
trucks have on average useful lives of four and five years, re-
spectively. In total, the group has approximately 4,000 leases. 
Additions to right-of-use assets during the year amounted to 
EUR 56 million compared to EUR 69 million last year. The total 
carrying amount of right-of-use assets was EUR 209 million 
compared to EUR 230 million last year as specified in table 
3.2.1.a. Lease liabilities are specified in Note 4.3. 
 
 
Accounting policies 
All leases are recognised as a right-of-use asset and a corre-
sponding liability at the date at which the leased asset is avail-
able for use by the group. A lease liability is initially measured 
on a present value basis, which comprises the net present 
value of fixed lease payments less any lease incentives receiv-
able, variable lease payments based on an index or a rate and a 
potential exercise price if a purchase option exists. 
The lease payments are discounted using an incremental bor-
rowing rate. 
The corresponding right-of-use asset is measured at cost com-
prising initial measurement of the lease liability, any lease pay-
ments made at or before the commencement date less any 
lease incentives received and any initial direct costs, and  
restoration costs. 
The right-of-use asset is subsequently depreciated over the 
shorter of the asset's useful life and the lease term on a 
straight-line basis. 
Each lease payment comprises a reduction of the lease liability 
and a finance cost. The finance cost is charged to profit or loss 
over the lease period as a constant periodic rate of interest on 
the remaining balance of the liability. 
Short-term leases and leases of low-value assets are recog-
nised as an expense in the income statement. 
 
Uncertainties and estimates 
The group has applied estimates and judgements with an  
impact on the recognition and measurement of right-of-use 
assets and lease liabilities. This includes an assessment of the 
incremental borrowing rate, service components and facts 
and circumstances that could create an economic incentive to 
utilise the extension options of lease arrangements. 
 CAPITAL EMPLOYED3.2 PROPERTY, PLANT AND EQUIPMENT
Table 3.2.1.a Right-of-use assets 
  
  
  
  
(EURm) 
RoU 
 land and  
buildings 
RoU  
plant and  
machinery 
RoU  
fixtures and 
fittings, tools 
and equipment 
Total RoU  
assets 
 
 
 
 
 
2022 
  
  
  
  
Carrying amount at 1 January 
  141  
  8  
  81  
  230  
Additions  
  17  
  9  
  30  
  56  
Disposals 
-7  
-12  
-32  
-51  
Depreciation and impairment for the year 
-30  
-6  
-35  
-71  
Depreciation on disposals  
  7  
  12  
  31  
  50  
Exchange rate adjustments  
-4  
 - 
-1  
-5  
Carrying amount at 31 December 
  124  
  11  
  74  
  209  
 
 
 
 
 
2021 
  
  
  
  
Carrying amount at 1 January 
  136  
  13  
  80  
  229  
Additions  
  30  
  4  
  35  
  69  
Disposals 
-5  
-7  
-18  
-30  
Depreciation and impairment for the year 
-31  
-9  
-34  
-74  
Depreciation on disposals  
  5  
  6  
  16  
  27  
Exchange rate adjustments  
  6  
  1  
  2  
  9  
Carrying amount at 31 December 
  141  
  8  
  81  
  230  
Table 3.2.1.b Amounts recognised in the income statement 
 
 
(EURm) 
2022 
2021 
 
 
 
Expenses related to short-term and low-value leases 
  40  
  38  
Interest expenses on lease liabilities 
  7  
  7  
Total amounts recognised in the income statement 
  47  
  45  
 
 
 
Payment of lease debt 
  71  
  73  
Total cash outflow from right-of-use assets 
  118  
  118

Associates and joint ventures  
The share of profit in associates and joint ventures increased 
by 13 per cent to EUR 60 million compared to EUR 53 million 
last year and related primarily to the profit from our invest-
ment in Mengniu. 
COFCO Dairy Holdings Limited (CDH) and China Mengniu 
Dairy Company Limited (Mengniu)  
The group's proportionate share of the net asset value of CDH 
including the investment in Mengniu was EUR 448 million 
compared to EUR 416 million last year. The carrying amount 
of the investment in CDH included goodwill amounting to  
EUR 149 million compared to EUR 158 million last year driven 
by currency adjustments. 
The fair value of the indirect share in Mengniu amounted to 
EUR 888 million compared to EUR 1,043 million last year, 
based on the official listed share price at 31 December 2022.  
Impairment risks include substantial and long-term reductions 
in leading stock indexes in Asia or an adverse and permanent 
reduction in the expected performance of Mengniu. As the fair 
value exceeded the carrying amount of the investment, there 
was no indication of impairment.  
Mengniu reported group revenue of EUR 12,214 million and a 
profit of EUR 696 million in 2021. Consolidated figures are not 
available for the CDH group. CDH holds no other significant in-
vestment than the investment in Mengniu and reported reve-
nue relates to received dividend payments from Mengniu. 
Through the investment in CDH, Arla holds a 5.3 per cent indi-
rect investment in Mengniu. See table 3.3.b for more details 
on CDH.  
The carrying amount of the investment concerning the mem-
bership of Lantbrukarnas Riksförbund in Sweden amounted to 
EUR 93 million and was unchanged from last year. 
Joint ventures 
The carrying amount of joint ventures increased to EUR 24 
million compared to EUR 20 million last year. The value pri-
marily related to the German joint venture ArNoCo. 
 
 
 
 CAPITAL EMPLOYED3.3 ASSOCIATES AND JOINT VENTURES
Table 3.3.a Associates and joint ventures 
 
 
(EURm) 
2022 
2021 
 
 
 
Value of associates and joint ventures 
  
  
Share of equity in COFCO Dairy Holdings Ltd. (Mengniu) 
290  
267  
Goodwill in COFCO Dairy Holdings Ltd. (Mengniu) 
158  
149  
Share of equity in immaterial associates 
93  
94  
Recognised value of associates 
541  
510  
Share of equity in immaterial joint ventures 
24  
20  
Recognised value of associates and joint ventures 
565  
530  
Table 3.3.b COFCO Dairy Holdings Ltd. Disclosures of financial information* 
  
  
(EURm) 
2022 
2021 
 
 
 
Revenue 
44  
- 
Net profit 
44  
- 
Non-current assets 
742  
729  
Dividends received 
12  
12  
Ownership share 
30% 
30% 
Group share of net profit 
44  
36  
Recognised value 
448  
416  
 
 
 
COFCO Dairy Holdings Ltd. has no other significant assets or liabilities 
 
 
*Based on the latest available financial reporting 
 
 
 
 
 
Fair value based on listed share price 
888  
  1,043  
 
 
 
Table 3.3.c Transactions with associates and joint ventures 
 
 
(EURm) 
2022 
2021 
 
 
 
Sales of goods 
31  
56  
Purchase of goods 
48  
68  
Trade receivables* 
3  
13  
Trade payables* 
 -21  
 -5  
*Included in other receivables and other payables

Accounting policies 
Investments in which Arla has a significant but not controlling 
influence are classified as associates. Investments in which 
Arla has joint control are classified as joint ventures. 
The proportionate share of the net profit or loss in associates 
and joint ventures is recognised in the consolidated income 
statement after elimination of the proportionate share of un-
realised intercompany profits or losses. 
Investments in associates and joint ventures are recognised 
according to the equity method and measured at the propor-
tionate share of the entities' net asset values, calculated in ac-
cordance with Arla's accounting policies. The proportionate 
share of unrealised intercompany profits and the carrying 
amount of goodwill is added, whereas the proportionate share 
of unrealised intercompany losses is deducted. Dividends re-
ceived from associates and joint ventures reduce the value of 
the investment. 
For investments held in listed companies, computation of Ar-
la's share of profit and equity is based on the latest published 
financial information of the company, other publicly available 
information on the company's financial development and the 
effect of revalued net assets. 
Investments in associates and joint ventures with negative net 
asset values are measured at zero. If Arla has a legal or con-
structive obligation to cover a loss in the associate or joint 
venture, the loss is recognised under provisions. Any amounts 
owed by associates and joint ventures are written down to the 
extent that the amount owed is deemed irrecoverable. 
An impairment test is performed when there are indications of 
impairment, such as significant adverse changes in the envi-
ronment in which the equity-accounted investee operates, or 
a significant or prolonged decline in the fair value of the in-
vestment below its carrying amount. 
Where the equity-accounted investment is considered to be 
an integral part of a cash-generating unit (CGU), the impair-
ment test is performed at the CGU level using the expected 
future net cash flows of the CGU. An impairment loss is recog-
nised when the recoverable amount of the equity-accounted 
investment (or CGU) becomes lower than the carrying amount. 
The recoverable amount is defined as the higher of value in 
use and fair value less costs to sell of the equity-accounted  
investment (or CGU). 
 
Uncertainties and estimates 
Significant influence is defined as the power to participate in 
financial and operating policy decisions of the investee but 
does not constitute control or joint control over those policies. 
Judgement is necessary in determining when a significant in-
fluence exists. When determining significant influence, factors 
such as representation on the Board of Directors, participation 
in policymaking, material transactions between the entities 
and interchange of managerial personnel are considered. 
CDH and Mengniu 
The group has a 30 per cent investment in CDH, which is  
considered an associate based on a cooperation agreement 
extending significant influence, including the right to repre-
sentation on the Board. The cooperation agreement with CDH 
also entitles Arla to representation on the Board of Mengniu,  
a Hong Kong-listed dairy company in which CDH is a signifi-
cant shareholder.  
Based on these underlying agreements, it is our assessment 
that Arla exercises a significant influence in Mengniu. 
Lantbrukarnas Riksforbund, Sweden (LRF) 
Arla has an ownership interest of 24 per cent in LRF, which is  
a politically independent professional organisation for  
Swedish entrepreneurs involved in agriculture, forestry  
and horticulture.  
Based on a detailed analysis of the LRF arrangement, Arla's ac-
tive ownership interest constitutes a significant influence in 
LRF. This includes, but is not limited to, owner representation 
on the Board of Directors. Furthermore, Arla's owners have 
represented the Swedish dairy industry on the Board of Direc-
tors of LRF, and both Arla and our Swedish owners are individ-
ual members of LRF. 
Based on this, it is our assessment that Arla exercises a signifi-
cant influence in LRF and the investment is therefore classi-
fied as an associate. 
 
 
 
 
 CAPITAL EMPLOYED3.3 ASSOCIATESAND JOINT VENTURES
Recognised value of associates and joint ventures 
  Share of equity in COFCO Dairy Holdings Ltd. (Mengniu) 
  Share of equity in immaterial associates 
  Goodwill in COFCO Dairy Holdings Ltd. (Mengniu) 
  Share of equity in immaterial joint ventures 
565
(EURm)
2022
530
(EURm)
2021

Financial risk management 
Financial risks are an inherent part of the group's operating  
activities and as a result, the group's profit is impacted by the 
development in currencies, interest rates and certain types of 
commodities. The global financial markets are volatile and 
thus it is critical for the group to have an appropriate financial 
risk management approach in place to mitigate short-term 
market volatility, while simultaneously achieving the highest 
possible milk price.  
The group's comprehensive financial risk management strat-
egy and system builds on a thorough understanding of the in-
teraction between the group's operating activities and under-
lying financial risks. The overall framework for managing finan-
cial risks, the treasury and funding policy, is approved by the 
Board of Directors and managed centrally. The policy outlines 
risk limits for each type of financial risk, permitted financial in-
struments and counterparties.  
The Board of Directors receives a report on the group's finan-
cial risk exposure on a monthly basis. Hedging the volatility of 
milk prices is not within the scope of financial risk manage-
ment but is an inherent component of the group's business 
model. 4.1.1 LIQUIDITY RESERVES
 
Adequate liquidity reserves 
Liquidity reserves increased by EUR 91 million to EUR 1,056 
million in 2022. Looking at the maturity profile of the group's 
debt and the forecasted cash flow, the liquidity reserves are 
considered adequate and expected to be maintained at the 
same level during 2023.  
Ensuring the availability of sufficient operating liquidity and 
credit facilities for operations is the primary goal of managing 
liquidity risk. Based on the liquidity models suggested by the 
rating agencies, Arla's liquidity reserves are assessed as ade-
quate for the coming 12 months.  
Supply chain finance programmes and trade receivables  
financing relating to customers form part of the group's  
liquidity management. Selected suppliers have access to the 
group's supply chain finance facilities, which allow those sup-
pliers to benefit from the group's credit profile. 
More than 95 per cent of the day-to-day liquidity flow of the 
group is managed via cash pooling arrangements. This secures 
a scalable and efficient operating model. As a result, the group 
is able to achieve a cost-efficient utilisation of credit facilities.  
Arla operates in several countries where restrictions on the 
transferability of cash exist. Cash and securities in Argentina of 
54 million EUR generated from the local profit are assessed as 
restricted and thus not included in the liquidity reserve. Other 
balances of cash deemed to be restricted are insignificant. 
 
 
 
 FUNDING4.1 FINANCIAL RISKS
Liquidity reserves 
  Cash and cash equivalents 10% (9%) 
  Unutilised committed loan facilities 45% (64%) 
  Securities (free cash flow) 3% (1%) 
  Unutilised other loan facilities 42% (16%) 
 
1,056
(EURm)
2022
965
(EURm)
2021
Table 4.1.1.a Liquidity reserves 
 
 
(EURm) 
2022 
2021 
Cash and cash equivalents  
  106  
  97  
Securities (free cash flow) 
  28  
  12  
Unutilised committed loan facilities > 1 year 
  475  
  689  
Other unutilised loan facilities 
  447  
  167  
Total 
 1,056  
  965  
 
 
 
Interest-bearing debt maturing < 1 year  
  401  
  293

FUNDING4.1 FINANCIAL RISKS
Table 4.1.1.b Expected non-discounted contractual cash flow on gross financial liabilities 
 
 
 
 
 
 
 
 
 
 
 
  
  
Non-discounted contractual cash flow 
(EURm) 
Carrying amount 
Total 
2023 
2024 
2025 
2026 
2027 
2028 
2029 
2030-2032 
After 2032 
 
 
 
 
 
 
 
 
 
 
 
 
2022 
  
  
  
  
  
  
  
  
  
  
  
Issued bonds  
 490  
493  
134  
135  
- 
179  
- 
45  
- 
- 
- 
Mortgage credit institutions 
1,221  
  1,229  
11  
11  
86  
50  
54  
61  
68  
273  
615  
Credit institutions 
1,424  
  1,425  
507  
517  
47  
1  
251  
1  
101  
- 
- 
Lease liabilities 
 214  
218  
59  
47  
38  
25  
17  
23  
1  
4  
4  
Other non-current liabilities 
 18  
18  
18  
- 
- 
- 
- 
- 
- 
- 
- 
Interest expense – interest-bearing debt 
- 
359  
53  
41  
38  
30  
22  
17  
17  
51  
90  
Trade payables and other payables 
1,597  
  1,597  
  1,597  
- 
- 
- 
- 
- 
- 
- 
- 
Derivative instruments 
 36  
36  
30  
5  
1  
- 
- 
- 
- 
- 
- 
Total 
5,000  
  5,375  
  2,409  
756  
210  
285  
344  
147  
187  
328  
709  
  
  
Non-discounted contractual cash flow 
 
Carrying amount 
Total 
2022 
2023 
2024 
2025 
2026 
2027 
2028 
2029-2031 
After 2031 
 
 
 
 
 
 
 
 
 
 
 
 
2021 
  
  
  
  
  
  
  
  
  
  
  
Issued bonds 
 440  
444  
- 
149  
149  
- 
146  
- 
- 
- 
- 
Mortgage credit institutions 
1,033  
  1,040  
11  
11  
12  
87  
50  
55  
61  
249  
504  
Credit institutions 
1,036  
  1,038  
599  
194  
243  
1  
1  
- 
- 
- 
- 
Lease liabilities 
 233  
233  
60  
50  
35  
27  
19  
16  
7  
14  
5  
Other non-current liabilities 
 15  
15  
15  
- 
- 
- 
- 
- 
- 
- 
- 
Interest expense – interest-bearing debt 
- 
65  
14  
11  
6  
5  
3  
3  
2  
7  
14  
Trade payables and other payables 
1,445  
  1,445  
  1,445  
- 
- 
- 
- 
- 
- 
- 
- 
Derivative instruments 
 86  
86  
47  
13  
7  
5  
2  
1  
1  
4  
6  
Total 
4,288  
  4,366  
  2,191  
428  
452  
125  
221  
75  
71  
274  
529  
Assumptions 
The contractual cash flows are based on the following assumptions: 
· The cash flows are based on the earliest possible date at which the group can be required to settle the financial liability. 
· The forecasted interest expense cash flows are based on the contractual interest rate. Floating interest payments have been determined using the current floating rate for each item at the reporting date.

Risk mitigation 
Risk 
Liquidity and funding are vital for the group to be able to pay 
its financial liabilities as they become due. Risk management 
impacts our ability to attract new funding in the longer term 
and is crucial to fulfilling the group's strategic ambitions. 
Policy  
The treasury and funding policy states the minimum average 
maturity threshold for net interest-bearing debt and sets limi-
tations on debt maturing within the next 12- and 24-month 
periods. Unused committed facilities are taken into account 
when calculating average maturity. 
 
How we act and operate 
In addition to the treasury and funding policy, the Board of  
Directors has approved a long-term financing strategy, which 
defines the direction for financing of the group. This includes 
counterparties, instruments and risk appetite and describes 
future funding opportunities to be explored and implemented. 
The funding strategy is supported by farmer owners' long-term 
commitment to investing in the business. It is the group's ob-
jective to maintain its credit quality at a robust  
investment grade level. 4.1.2 CURRENCY RISK
 
 
Currency exposure 
The group is exposed to both transaction and translation ef-
fects from foreign exchange rates.  
Transaction effects are due to sales in currencies other than 
the functional currencies of the individual entities. The group 
is mainly exposed to USD and USD-pegged currencies as well 
as GBP. Revenue increased by EUR 108 million compared to 
last year due to positive transaction effects. Part of this expo-
sure was hedged by costs in the same currency. Financial 
instruments such as trade receivables, trade payables and 
other items denominated in currencies other than the individ-
ual entities' functional currencies are also exposed to currency 
risks. The net effect from the revaluation of these financial in-
struments is recognised in financial income or financial costs. 
A net loss of EUR 46 million was recognised in financial costs 
compared to a loss of EUR 28 million last year. Exchange rate 
losses related primarily to the devaluations of the Argentine, 
Bangladeshi and Nigerian currencies and totalled EUR 38 mil-
lion.  FUNDING4.1 FINANCIAL RISKS
Revenue split by currency 
  EUR 32% (31%) 
  USD 11% (10%) 
  GBP 25% (25%) 
  SAR 3% (3%) 
  SEK 12% (13%) 
  Other 7% (8%) 
  DKK 10% (11%) 
 
13,793
(EURm)
2022
11,202
(EURm)
2021
Average maturity 
  
  
Policy 
 
2022 
2021 
Minimum 
Maximum 
Average maturity, gross debt 
5.2 years 
5.8 years 
2 years 
- 
Maturity < 1 year, net debt 
0% 
0% 
- 
25% 
Maturity > 2 year, net debt 
78% 
100% 
50% 
-

To manage short-term volatility from currency fluctuations, 
derivatives are used to hedge the currency exposure. When 
settling the hedging instrument, a positive or negative amount 
is recognised in other income or other costs,  
 
respectively. A net loss of EUR 68 million was recognised in 
other costs compared to a loss of EUR 31 million last year. A 
loss from hedges should be expected in years where export 
currencies strengthen during the year and vice versa.  
The group is exposed to translation effects from entities 
reporting in currencies other than EUR. The group is mainly ex-
posed to translation of entities reporting in GBP, DKK, SEK, and 
USD. Due to translation effects, revenue increased by EUR 51 
million compared to the revenue reported last year. 
Simultaneously, costs increased by EUR 69 million compared 
to last year's reported costs. The group's financial position is 
similarly exposed, impacting the value of assets and liabilities 
reported in currencies other than EUR. The translation effect 
on net assets is recognised in other comprehensive 
income as foreign currency translation adjustments. In 2022, a 
net loss of EUR 46 million was recognised in other compre-
hensive income compared to a net gain of EUR 127 million 
last year.  
Indirectly the pre-paid milk price absorbs both transaction and 
translation effects, and the net profit or loss therefore has lim-
ited exposure to currency risks. The pre-paid milk price is set 
based on achieving an annual profit of 2.8 to 3.2 per cent. The 
pre-paid milk price is initially measured and paid out based on 
an EUR amount and is consequently exposed to EUR fluctua-
tions against GBP, SEK and DKK.  
Compared to last year, the average rate of the USD strength-
ened by 12 per cent, GBP strengthened by 1 per cent whereas 
the SEK weakened by 5 per cent.  
The group is increasingly involved in emerging markets where 
efficient hedging is often not feasible due to currency regula-
tions, illiquid financial markets or expensive hedging costs. 
Among the most important markets are Nigeria, the Domini-
can Republic, Bangladesh, Lebanon and Argentina. Countries 
with less efficient currency markets represented 4 per cent of 
the group's revenue in 2022. 
 
Risk mitigation 
The group's external exposure is calculated as external finan-
cial assets and liabilities denominated in currencies other than 
the functional currency of each legal entity, plus any external 
derivatives converted at group level into currency risk against 
DKK, i.e. EUR/DKK, USD/ DKK etc. The same also applies to the 
group's net internal exposure. The aggregate of the group's ex-
ternal and internal currency exposure is the net exposure, 
which is outlined in Table 4.1.2.b.  
Net foreign currency investments in subsidiaries, as well as in-
struments hedging those investments, are excluded.  
Risk 
According to the treasury and funding policy, the Treasury de-
partment can hedge: 
· Up to 15 months of the net forecasted cash receipts and 
payables 
· Up to 100 per cent of net recognised trade receivables and 
trade payables. 
The currency exposure is continuously managed by the Treas-
ury department. Individual currency exposures are hedged in 
accordance with the treasury and funding policy. 
Financial instruments used to hedge the currency exposure do 
not necessarily need to qualify for hedge accounting, and 
hence some of the applied financial instruments, i.e. some op-
tion strategies, are accounted for as fair value through the in-
come statement.  
Arla Foods amba's functional currency is DKK. However, the 
risk in relation to the EUR currency is assessed in the same 
manner as for DKK. The Executive Management Team has the 
discretion to decide if and when investments in foreign opera-
tions should be hedged  (translation risks) with an obligation to 
inform the Board of Directors at the next meeting. 
Table 4.1.2.a Exchange rates 
 
Closing rate 
  
Average rate 
 
2022 
2021 
Change   
2022 
2021 
Change 
 
 
 
 
  
 
 
EUR/GBP 
 0.884  
 0.839  
-5.1%   
 0.852  
 0.860  
0.8% 
EUR/SEK 
 11.156  
 10.241  
-8.2%   
 10.629  
 10.145  
-4.5% 
EUR/DKK 
 7.436  
 7.437  
0.0%   
 7.439  
 7.437  
0.0% 
EUR/USD 
 1.066  
 1.133  
6.2%   
 1.051  
 1.182  
12.5% 
EUR/SAR 
 3.982  
 4.253  
6.8%   
 3.947  
 4.434  
12.4% 
Table 4.1.2.b Currency exposure 
 
  
 
 
 
Balance sheet exposure 
  
Potential accounting impact 
(EURm) 
Open positions 
Hedging of fu-
ture cash flows 
External  
exposure   
Sensitivity 
Income  
statement 
Other  
comprehensive 
income 
 
 
 
 
  
 
 
2022 
  
  
    
  
  
  
EUR/DKK 
  270  
  11  
  281    
1.0% 
  3  
 - 
USD/DKK* 
-62  
-544  
-606    
5.0% 
-3  
-27  
GBP/DKK 
  10  
-345  
-335    
5.0% 
 - 
-17  
SEK/DKK 
  45  
-65  
-20    
5.0% 
  2  
-3  
SAR/DKK 
  47  
-103  
-56    
5.0% 
  2  
-5  
 
 
 
 
  
 
 
2021 
  
  
    
  
  
  
EUR/DKK 
-86  
  278  
  192    
1.0% 
-1  
  3  
USD/DKK* 
  44  
-252  
-207    
5.0% 
  2  
-13  
GBP/DKK 
  25  
-418  
-393    
5.0% 
  1  
-21  
SEK/DKK 
  12  
-49  
-37    
5.0% 
  1  
-2  
SAR/DKK 
  9  
-176  
-167    
5.0% 
 - 
-9  
*Incl. AED

4.1.3 INTEREST RATE RISK
 
Interest rate risk 
The average duration of the group's interest hedging of inter-
est-bearing debt, including derivatives but excluding pension 
liabilities, has decreased by 0.5 to 3.1. 
The duration decreased due to higher net interest-bearing 
debt, a reduction in time to maturity which was only partly off-
set by new interest rate hedges. 
The value of hedged future interest cash flows amounted to 
EUR 132 million. See more in Note 4.4. 
 
Risk mitigation 
Risk 
The group is exposed to interest rate risk on interest-bearing 
borrowings, pension liabilities, interest-bearing assets and on 
the value of non-current assets where an impairment test is 
performed. The risk is divided between profit exposure and  
exposure in other comprehensive income. Profit exposure re-
lates to net potential impairment of non-current assets. Other 
comprehensive income exposure relates to revaluation of net 
pension liabilities and interest hedging of future cash flows. 
Fair value sensitivity 
A change in interest rates will impact the fair value of the 
group's interest-bearing assets, interest rate derivative instru-
ments and debt instruments measured on a 1 per cent in-
crease in interest rates. A decrease in the interest rate would 
have the opposite effect. 
Cash flow sensitivity 
A change in interest rates will impact interest rate payments 
on the group's unhedged floating rate debt. Table 4.1.3 shows 
the one-year cash flow sensitivity, depicting a 1 per cent in-
crease in interest rates at 31 December 2022. A decrease in 
the interest rate would have the opposite effect. 
Policy 
Interest rate risk must be managed according to the treasury 
and funding policy. Interest rate risk is measured as the dura-
tion of the debt portfolio, including hedging instruments, but 
excluding pension liabilities. 
How we act and operate 
The purpose of interest rate hedging is to mitigate risk and se-
cure relatively stable and predictable financing costs. The in-
terest rate risk from net borrowing is managed by having an 
appropriate split between fixed and floating interest rates.  
The group actively uses derivatives to reduce risks related to 
fluctuations in the interest rate, and to manage the interest 
profile of the interest-bearing debt. By having a portfolio ap-
proach and using derivatives, the group can independently 
manage and optimise interest rate risk, as the interest rate 
profile can be changed without having to change the funding 
itself. This allows the group to operate in a fast, flexible and 
cost-efficient manner without changing underlying loan 
agreements.  
The mandate from the Board of Directors provides the group 
with the opportunity to use derivatives, such as interest rate 
swaps and options, in addition to interest conditions embed-
ded in the loan agreements.  
 
 
 FUNDING4.1 FINANCIAL RISKS
Table 4.1.3 Interest rate risk 
 
 
 
 
 
  
  
Potential accounting impact 
(EURm) 
Carrying 
amount 
Sensitivity 
Income 
 statement 
 
Other compre-
hensive in-
come 
 
 
 
 
 
2022 
  
  
  
  
Financial assets 
-542  
1.0% 
  5  
-1  
Derivatives 
 - 
1.0% 
  6  
  42  
Financial liabilities 
 3,367  
1.0% 
-19  
 - 
Net interest-bearing debt excluding pension liabilities 
 2,825  
  
-8  
  41  
 
 
 
 
 
2021 
  
  
  
  
Financial assets 
-536  
1.0% 
  5  
-1  
Derivatives 
 - 
1.0% 
  6  
  56  
Financial liabilities 
 2,757  
1.0% 
-12  
 - 
Net interest-bearing debt excluding pension liabilities 
 2,221  
  
-1  
  55  
Table 4.1.4 Duration 
 
 
 
 
 
  
  
Policy 
 
2022 
2021 
Minimum 
Maximum 
 
 
 
 
 
Duration 
 3.1  
 3.6  
  1  
  7

4.1.4 COMMODITY PRICE RISK
 
Commodity price risk 
Supply contracts are predominately related to a floating offi-
cial price index. The Treasury department uses financial deriva-
tives to hedge commodity price risk. This secures full flexibility 
to change suppliers without having to take future hedging into 
consideration.  
Hedging activities focus on the most significant risks, includ-
ing electricity, natural gas and diesel. The total forecasted  
energy commodity spend, excluding taxes and distribution 
costs, amounted to EUR 250 million with the prices at  
31 December 2022.  
 
The purpose of hedging is to reduce volatility in energy- 
related costs. In 2022, hedging activities resulted in a gain of 
EUR 72 million compared to a gain of EUR 29 million last year. 
However, the gain in 2022 was more than offset by signifi-
cantly higher physical energy costs. The result of hedging  
activities, classified as hedge accounting, is recognised in 
other income and costs.  
At the end of 2022, 81 per cent of the forecasted energy 
spend for 2023 was hedged. A 50 per cent increase in com-
modity prices would negatively impact the forecasted un-
hedged energy spend by approximately EUR 24 million.  
If the forecasted energy prices were 50 per cent higher at  
31 December 2022, a gain of EUR 109 million would positively 
impact other comprehensive income.  
 
Risk mitigation 
Risk 
The group is exposed to commodity risks related to the pro-
duction and distribution of dairy products. Increased commod-
ity prices negatively impact production and distribution costs. 
Fair value sensitivity 
A change in commodity prices will impact the fair value of the 
group's hedged commodity derivative instruments, measured 
through other comprehensive income and the unhedged  
energy consumption through the income statement. The  
table shows the sensitivity of a 50 per cent increase in com-
modity prices for both hedged and unhedged commodity  
purchases. A decrease in commodity prices would have the 
opposite effect. 
Policy 
According to the treasury and funding policy, the forecasted 
consumption of electricity, natural gas and diesel can be 
hedged for up to 36 months, of which 100 per cent can be 
hedged for the first 18 months, with a limited proportion 
thereafter. 
How we act and operate 
Energy commodity price risks are managed by the Treasury 
department. Commodity price risks are mainly hedged by en-
tering into financial derivative contracts, which are independ-
ent of the physical supplier contracts. Arla is also exploring 
other commodities relevant for financial risk management.  
Arla's energy exposure and hedging are managed as a portfo-
lio across energy type and country. Not all energy commodi-
ties can be effectively hedged by matching the underlying 
costs, but Arla aims to minimise the basic risk.  
Dairy derivative markets in the EU, the US and New Zealand 
remain small, but are evolving. The group has engaged in 
hedging activities for a small part of the group's dairy com-
modity trading volume. As the dairy derivative market devel-
ops, we expect this to play a role in managing fixed price  
contracts with customers in the coming years. 
 
 FUNDING4.1 FINANCIAL RISKS
Table 4.1.5 Hedged commodities 
 
 
 
 
 
  
  
Potential accounting impact  
 
Sensitivity 
Carrying 
amount 
Income 
 statement 
Other  
comprehensive  
income 
 
 
 
 
 
2022 
  
  
  
  
Diesel/natural gas 
50% 
  6  
-10  
  80  
Electricity 
50% 
  31  
-14  
  29  
 
  
  37  
-24  
  109  
2021 
  
 
 
 
Diesel/natural gas 
50% 
  15  
-85  
  14  
Electricity 
50% 
  12  
-46  
  14  
 
  
  27  
-131  
  28

4.1.5 CREDIT RISK
 
Credit risk 
In 2022, the group continued to experience very limited losses 
from defaulting counterparties such as customers, suppliers 
and financial counterparties.  
All major financial counterparties had satisfactory credit rat-
ings at year-end. The Arla requirement is a credit rating of at 
least A-/A-/A3 from either S&P, Fitch or Moody's either for the 
financial counterparty or its parent company. In a small num-
ber of geographical locations which are not served by our rela-
tionship banks and where financial counterparties with a satis-
fying credit rating do not operate, the group deviated from the 
rating requirement.  
Further information on trade receivables is provided in  
Table 2.1.c. 
The maximum exposure to credit risk is approximately equal to 
the carrying amount.  
As in previous years, the group continuously worked with 
credit exposure and experienced a very low level of losses aris-
ing from customers.  
To manage the financial counterparty risk, the group uses 
master netting agreements when entering into derivative con-
tracts. Table 4.1.6 shows the counterparty exposure for those 
agreements covered by entering into netting agreements that 
qualify for netting in case of default. 
 
Risk mitigation 
Risk 
Credit risks arise from operating activities and engagement 
with financial counterparties. Furthermore, a weak counter-
party credit quality can reduce their ability to support the 
group going forward, thereby jeopardising the fulfilment of  
our group strategy. 
Policy 
Counterparties are selected based on a relationship bank 
strategy. Financial counterparties must be approved by the  
Executive Board and the CFO upon recommendation from the 
Treasury team. A counterparty (or its parent) to financial con-
tracts and deposits must as a minimum have a long-term rat-
ing corresponding to A3 from Moody's, A- from S&P or A- from 
Fitch. If the group has only obtained credit from the counter-
party, no rating is required. If the counterparty is rated by sev-
eral credit rating agencies, an average is used, rounded up to 
the nearest notch. 
In geographies which are not properly served by our relation-
ship banks, the Treasury team may deviate from the counter-
party requirement in this section. 
How we act and operate 
The group has an extensive credit risk policy and uses credit 
insurance and other trade financing products extensively in 
connection with exports. In certain emerging markets, it is not 
always possible to obtain credit coverage with the required 
rating; however, the group then seeks the best coverage avail-
able. The group has determined that this is an acceptable risk 
given the levels of investment in emerging markets.  
If a customer payment is late, internal procedures are followed 
to mitigate losses. The group uses a limited number of finan-
cial counterparties where credit ratings are monitored on an 
ongoing basis. 
 
 FUNDING4.1 FINANCIAL RISKS
External rating of financial counterparties 
  AAA 49% (67%) 
  BBB+ 3% (4%) 
  AA- 4% (3%) 
  Stronger speculative grade 4% (5%) 
  A+ 25% (8%) 
  Weaker speculative grade 7% (6%) 
  A 8% (7%) 
 
777
(EURm)
2022
605
(EURm)
2021
Table 4.1.6 External rating of financial counterparties  
(EURm) 
Counterparty rating 
  
 
AAA 
AA- 
A+ 
A 
BBB+ 
Stronger 
specula-
tive grade* 
Weaker 
specula-
tive grade* 
Total 
2022 
  
  
  
  
  
  
  
  
Securities 
383  
  - 
  - 
  - 
  - 
  - 
49  
432  
Cash 
  - 
15  
5  
33  
20  
28  
5  
106  
Derivatives 
  - 
13  
189  
33  
4  
  - 
  - 
239  
Total 
383  
28  
194  
66  
24  
28  
54  
777  
 
 
 
 
 
 
 
 
 
2021 
  
  
  
  
  
  
  
  
Securities 
402  
  - 
  - 
  - 
  - 
  - 
32  
434  
Cash 
5  
17  
9  
7  
24  
29  
6  
97  
Derivatives 
  - 
1  
39  
33  
  - 
1  
  - 
74  
Total 
407  
18  
48  
40  
24  
30  
38  
605  
*Definition based on S&P rating scale. Stronger speculative grade: BB+ to B- and weaker speculative grade: CCC+ to D.

Financial income and financial cost 
Net financial costs increased by EUR 19 million to EUR 80 mil-
lion, mainly due to higher exchange rate losses.  
Net interest expenses amounted to EUR 51 million, represent-
ing an increase of EUR 11 million compared to last year due to 
higher interest-bearing debt and interest rates compared to 
last year. 
Average interest expenses, excluding interest related to pen-
sion assets and liabilities, were 2.3 per cent compared to 1.8 
per cent last year. Interest cover decreased to 19.6 compared 
to 23.7 last year.  
Exchange rate losses relate primarily to the devaluation of the 
Argentine, Bangladeshi and Nigerian currencies and 
amounted to EUR 39 million, of which EUR 19 million was off-
set by interest income on the restricted cash and securities. 
 
 
Accounting policies 
Financial income and financial costs as well as capital gains 
and losses are recognised in the income statement at 
amounts that can be attributed to the year. Financial items 
comprise realised and unrealised value adjustments of securi-
ties and currency adjustments of financial assets and financial 
liabilities as well as the interest portion of financial lease pay-
ments. Additionally, realised and unrealised gains and losses 
on derivatives not classified as hedging contracts are included. 
Borrowing costs from general borrowing, or loans that directly 
relate to the acquisition, construction or development of qual-
ified assets are attributed to the costs of such assets and are 
therefore not included in financial costs. 
Capitalisation of interest was performed by using an interest 
rate matching the group's average external interest rate in 
2022. Financial income and financial costs relating to financial 
assets and financial liabilities were recognised using the effec-
tive interest method. 
 
 FUNDING4.2 FINANCIAL ITEMS
Table 4.2 Financial income and financial costs 
 
 
(EURm) 
2022 
2021 
 
 
 
Financial income:  
  
  
Interest securities, cash and cash equivalents 
22  
7  
Fair value adjustments and other financial income 
15  
7  
Total financial income 
37  
14  
 
 
 
Financial costs: 
  
  
Interest on financial instruments measured at amortised cost 
 -71  
 -45  
Net exchange rate losses 
 -46  
 -28  
Interest on pension liabilities 
 -2  
 -2  
Interest transferred to property, plant and equipment 
7  
7  
Fair value adjustments and other financial costs 
 -5  
 -7  
Total financial costs 
 -117  
 -75  
 
 
 
Net financial costs 
 -80  
 -61

Increased net interest-bearing debt 
Net interest-bearing debt, excluding pension liabilities, in-
creased to EUR 2,825 million compared to EUR 2,221 million 
last year. The increase in net interest-bearing debt was mainly 
driven by the increase in net working capital. 
Pension liabilities decreased by EUR 84 million to EUR 161 
million. Net interest-bearing debt, including pension liabilities, 
amounted to EUR 2,986 million compared to EUR 2,466 mil-
lion last year. The UK pension scheme net assets were EUR 16 
million compared to EUR 69 million last year. These assets are 
excluded from the calculation of pension liabilities, net inter-
est-bearing debt and leverage.  
Arla's leverage ratio was 3.0, an increase of 0.4 compared to 
last year. This is within the long-term target range of 2.8 to 3.4.  
The average maturity of interest-bearing borrowings  
decreased by 0.6 years to 5.2 years. Average maturity is  
impacted by new facilities and offset by a lapse of time to 
maturity and the level of net interest-bearing debt.  
The equity ratio decreased to 35 per cent compared to 37 per 
cent last year.  
Funding 
The group applies a diversified funding strategy to balance the 
liquidity and refinancing risk with the aim of achieving low fi-
nancing costs. Major acquisitions or investments are funded 
separately.  
A diverse funding strategy includes diversification of markets, 
currencies, instruments, banks, lenders and maturities to  
secure broad access to funding and to ensure that the group is 
independent of one single funding partner or one single mar-
ket. All funding opportunities are benchmarked against the 
three-month EURIBOR rate, and derivatives are applied to 
match the currency of our funding needs. The interest profile 
is managed with interest rate swaps independently of the indi-
vidual loans.  
The credit facilities contain financial covenants on equity/total 
assets and minimum equity as well as standard non-financial 
covenants. The group did not default on or fail to fulfil any loan 
agreements in 2022.  
During 2022, the group's most significant funding activities 
were: 
· Extension of a EUR 400 million ESG-linked revolving credit 
multi-bank facility to 2028  
· Five-year bond issue of SEK 1,000 million  
· 20-year EUR 200 million mortgage 
· Two-year bridge loan, EUR 200 million 
· Arla has a commercial paper programme in Sweden denomi-
nated in SEK and EUR. The average utilisation in 2022 was 
EUR 139 million  
· During the year, Arla entered into sale and repurchase  
arrangements based on its holdings in listed AAA-rated Dan-
ish mortgage bonds. Refer to Note 4.6 for more  
details. 
 
 
 
 
 
 
 
 
 FUNDING4.2 FINANCIAL ITEMS
Net interest-bearing debt 
(EURm) 
Leverage 
3.0 
(2021:2.6) 
Net interest-bearing debt consists of current and non-current liabilities, less 
interest-bearing assets. The definition of leverage is the ratio between net 
interest-bearing debt including pension liabilities and EBITDA and expresses 
the group's capacity to service its debt. The group's long-term target range 
for leverage is between 2.8 and 3.4. 
1,647
2,113
2,180
2,221
2,825
220
249
247
245
161
0
1
2
3
4
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2018
2019
2020
2021
2022
Target range leverage 2.8 - 3.4
Pension liabilities
Net interests-bearing debt excluding pension liabilities
Leverage

FUNDING4.3 NET INTEREST-BEARING DEBT
Table 4.3.a Net interest-bearing debt 
 
 
(EURm) 
2022 
2021 
 
 
 
Long-term borrowings 
  2,640  
  2,113  
Short-term borrowings 
727  
644  
Securities, cash and cash equivalents 
 -538  
 -531  
Other interest-bearing assets 
 -4  
 -5  
Net interest-bearing debt excluding pension liabilities 
  2,825  
  2,221  
Pension liabilities 
161  
245  
Net interest-bearing debt including pension liabilities 
  2,986  
  2,466  
Table 4.3.b Borrowings 
  
  
(EURm) 
2022 
2021 
 
 
 
Long-term borrowings:  
  
  
Issued bonds 
357  
440  
Mortgage credit institutions 
  1,210  
  1,021  
Bank borrowings 
918  
478  
Lease liabilities 
155  
174  
Total long-term borrowings 
  2,640  
  2,113  
 
 
 
Short-term borrowings: 
  
  
Issued bonds 
133  
  - 
Commercial papers 
88  
102  
Mortgage credit institutions 
11  
11  
Bank borrowings 
418  
456  
Lease liabilities 
59  
59  
Other current liabilities 
18  
16  
Total short-term borrowings 
727  
644  
 
 
 
Total interest-bearing borrowings 
  3,367  
  2,757  
Table 4.3.c Cash flow, net interest-bearing debt 
  
 
 
 
  
 
  
Cash flow 
  
Non-cash changes 
  
  
(EURm) 
1 January 
Included 
in financing 
activities   
Additions 
Reclassi-
fications 
Foreign  
exchange  
movements 
Fair value 
changes   
31 Decem-
ber  
 
 
 
  
 
 
 
  
2022 
 
 
  
 
 
 
  
Pension liabilities 
245  
  -22    
  - 
  
  -14  
 -48    
161  
Long-term borrowings 
  2,113  
 696    
  49 
 -190  
  -32  
4    
  2,640  
Short-term borrowings 
644  
  -100    
  - 
190  
  -7  
 -    
727  
Total interest-bearing debt 
  3,002  
 574    
  49 
  - 
  -53  
 -44    
  3,528  
 
 
 
  
 
 
 
  
Pension assets 
  - 
-   
  - 
  - 
- 
  -   
  - 
Securities and other interest-bearing 
assets 
 -439  
 1    
  - 
  - 
- 
2    
 -436  
Cash 
 -97  
  -9    
  - 
  - 
- 
  -   
 -106  
Net interest-bearing debt 
  2,466  
 566    
  49 
  - 
  -53  
 -42    
  2,986  
Long- and short-term borrowings payments of EUR 596 million (EUR 696 million and EUR -100 million, respectively) 
can be reconciled to the cash flow statement as new loans obtained (EUR 810 million), other changes in loans (EUR -143 million) and 
lease payments (EUR -71 million). 
 
 
 
  
 
 
 
  
2021 
 
 
  
 
 
 
  
Pension liabilities 
247  
  -14    
  - 
  
  -4  
16    
245  
Long-term borrowings 
  1,964  
-   
46  
62  
 24  
17    
  2,113  
Short-term borrowings 
766  
  -48    
  - 
 -62  
  -12  
  -   
644  
Total interest-bearing debt 
  2,977  
  -62    
46  
  - 
 8  
33    
  3,002  
 
 
 
  
 
 
 
  
Pension assets 
  - 
  -17    
  - 
14  
 4  
 -1    
  - 
Securities and other interest-bearing 
assets 
 -424  
  -12    
  - 
  - 
  -3  
  -   
 -439  
Cash 
 -126  
 32    
  - 
  - 
  -3  
  -   
 -97  
Net interest-bearing debt 
  2,427  
  -59    
46  
14  
 6  
33    
  2,466  
Long- and short-term borrowings payments of EUR -48 million (EUR 0 million and EUR -48 million, respectively) 
can be reconciled to the cash flow statement as loans obtained, net, (EUR 172 million), other changes in loans (EUR -147 million) and 
lease payments (EUR -73 million).

FUNDING4.3 NET INTEREST-BEARING DEBT
Maturity of net interest-bearing debt excluding pension  
liabilities, 31 December 2022 
(EURm) 
Maturity of net interest-bearing debt excluding pension  
liabilities, 31 December 2021 
(EURm) 
Interest proﬁle for net interest-bearing debt excluding  
pension liabilities at 31 December 2022 
(EURm) 
Interest proﬁle for net interest-bearing debt excluding 
pension liabilities at 31 December 2021 
(EURm) 
0
200
400
600
800
1,000
0-1Y
1-2Y
2-3Y
3-4Y
4-5Y
5-6Y
6-7Y 7-10Y >10Y
Debt
Unused committed facilities
0
200
400
600
800
1,000
0-1Y
1-2Y
2-3Y
3-4Y
4-5Y
5-6Y
6-7Y 7-10Y >10Y
Debt
Unused committed facilities
0
500
1,000
1,500
2,000
2,500
3,000
1Y
2Y
3Y
4Y
5Y
6Y
7Y
10Y
Fixed debt
Fixed via swap
Floating
0
500
1,000
1,500
2,000
2,500
3,000
1Y
2Y
3Y
4Y
5Y
6Y
7Y
10Y
Fixed debt
Fixed via swap
Floating
Table 4.3.d Net interest-bearing debt excluding pension liabilities and the effect of hedging, maturity 
(EURm) 
Total 
2023 
2024 
2025 
2026 
2027 
2028 
2029 
2030-
2032 
After 
2032 
 
 
 
 
 
 
 
 
 
 
 
2022 
  
  
  
  
  
  
  
  
  
  
DKK 
 1,046  
  30  
  36  
  97  
  57  
  58  
  61  
  67  
  201  
  439  
SEK 
  606  
  228  
  139  
  5  
  183  
  3  
  48  
 - 
 - 
 - 
EUR 
 1,014  
-10  
  390  
  163  
  5  
  105  
  7  
  102  
  76  
  176  
GBP 
  39  
  8  
  7  
  6  
  5  
  5  
  8  
 - 
 - 
 - 
Other 
  120  
-71  
  135  
  6  
  46  
  1  
  3  
 - 
 - 
 - 
Total 
 2,825  
  185  
  707  
  277  
  296  
  172  
  127  
  169  
  277  
  615  
 
 
 
 
 
 
 
 
 
 
 
 
Total 
2022 
2023 
2024 
2025 
2026 
2027 
2028 
2029-
2031 
After 
2031 
 
 
 
 
 
 
 
 
 
 
 
2021 
  
  
  
  
  
  
  
  
  
  
DKK 
  873  
  20  
  26  
  55  
  94  
  56  
  55  
  61  
  202  
  304  
SEK 
  572  
  109  
  153  
  152  
  4  
  150  
  4  
 - 
 - 
 - 
EUR 
  592  
  5  
  207  
  108  
  4  
  3  
  4  
  4  
  55  
  202  
GBP 
  43  
  7  
  8  
  6  
  5  
  4  
  4  
  3  
  4  
  2  
Other 
  141  
-37  
  48  
  116  
  7  
  3  
  4  
 - 
 - 
 - 
Total 
 2,221  
  104  
  442  
  437  
  114  
  216  
  71  
  68  
  261  
  508  
Table 4.3.e Currency profile of net interest-bearing debt excluding pension liabilities 
(EURm) 
 
 
 
Currency profile of net interest-bearing debt excluding pension liabilities before 
and after derivative financial instruments 
Original  
principal 
Effect  
of swap 
After swap 
 
 
 
 
2022 
  
  
  
DKK 
 1,046  
 - 
 1,046  
SEK 
  606  
-538  
  68  
EUR 
 1,014  
  183  
 1,197  
GBP 
  39  
  355  
  394  
Other 
  120  
 - 
  120  
Total 
 2,825  
 - 
 2,825  
 
 
 
 
2021 
  
  
  
DKK 
  873  
 - 
  873  
SEK 
  572  
-586  
-14  
EUR 
  592  
  64  
  656  
GBP 
  43  
  522  
  565  
Other 
  141  
 - 
  141  
Total 
 2,221  
 - 
 2,221

FUNDING4.3 NET INTEREST-BEARING DEBT
Table 4.3.f Interest rate risk excluding effect of hedging 
(EURm) 
Interest  
rate 
Average 
 interest rate 
Fixed for 
Carrying  
amount 
Interest  
rate risk 
 
 
 
 
 
 
2022 
  
  
  
  
  
Issued bonds: 
  
  
  
  
  
Commercial papers 
Fixed 
2.5% 
0-1 year 
  88  
Fair value 
SEK 750m maturing 03.07.2023 
Floating 
3.7% 
0-1 year 
  67  
Cash flow 
SEK 750m maturing 03.07.2023 
Fixed 
1.5% 
0-1 year 
  66  
Fair value 
SEK 750m maturing 03.04.2024 
Fixed 
1.6% 
2-3 years 
  66  
Fair value 
SEK 750m maturing 03.04.2024 
Floating 
3.9% 
2-3 years 
  67  
Cash flow 
SEK 500m maturing 14.01.2026 
Floating 
4.0% 
3-4 years 
  45  
Cash flow 
SEK 1,500m maturing 17.07.2026 
Floating 
2.4% 
3-4 years 
  134  
Cash flow 
SEK 500m maturing 14.01.2028 
Floating 
4.2% 
5-6 years 
  45  
Cash flow 
Total issued bonds 
  
2.8% 
  
  578  
  
 
 
 
 
 
 
Mortgage credit institutions: 
  
  
  
  
  
Fixed-rate 
Fixed 
1.9% 
1-2 years 
  125  
Fair value 
Floating-rate 
Floating 
3.0% 
0-1 year 
 1,096  
Cash flow 
Total mortgage credit institutions 
  
2.9% 
  
 1,221  
  
 
 
 
 
 
 
Bank borrowings: 
  
  
  
  
  
Fixed-rate 
Fixed 
1.9% 
0-1 year 
  377  
Fair value 
Floating-rate 
Floating 
2.9% 
0-1 year 
  959  
Cash flow 
Total bank borrowings 
  
2.6% 
  
 1,336  
  
 
 
 
 
 
 
Other borrowings: 
  
  
  
  
  
Finance leases 
Fixed 
3.1% 
0-20 years 
  214  
Cash flow 
Other borrowings 
Floating 
3.7% 
0-1 year 
  18  
Cash flow 
Total other borrowings 
  
3.2% 
  
  232  
  
 
 
 
 
 
 
 
Interest  
rate 
Average 
 interest rate 
Fixed for 
Carrying  
amount 
Interest  
rate risk 
 
 
 
 
 
 
2021 
  
  
  
  
  
Issued bonds: 
  
  
  
  
  
Commercial papers 
Fixed 
0.2% 
0-1 year 
  102  
Fair value 
SEK 750m maturing 03.07.2023 
Floating 
1.1% 
1-2 years 
  74  
Cash flow 
SEK 750m maturing 03.07.2023 
Fixed 
1.5% 
1-2 years 
  73  
Fair value 
SEK 750m maturing 03.04.2024 
Fixed 
1.6% 
2-3 years 
  73  
Fair value 
SEK 750m maturing 03.04.2024 
Floating 
0.9% 
2-3 years 
  74  
Cash flow 
SEK 1,500m maturing 17.07.2026 
Floating 
0.6% 
4-5 years 
  146  
Cash flow 
Total issued bonds 
  
0.9% 
  
  542  
  
 
 
 
 
 
 
Mortgage credit institutions: 
  
  
  
  
  
Fixed-rate 
Fixed 
0.2% 
1-2 years 
  97  
Fair value 
Floating-rate 
Floating 
0.3% 
0-1 year 
  935  
Cash flow 
Total mortgage credit institutions 
  
0.3% 
  
 1,032  
  
 
 
 
 
 
 
Bank borrowings: 
  
  
  
  
  
Fixed-rate 
Fixed 
0.0% 
0-1 year 
  390  
Fair value 
Floating-rate 
Floating 
0.6% 
0-1 year 
  544  
Cash flow 
Total bank borrowings 
  
0.4% 
  
  934  
  
 
 
 
 
 
 
Other borrowings: 
  
  
  
  
  
Finance leases 
Fixed 
3.2% 
0-20 years 
  233  
Cash flow 
Other borrowings 
Floating 
3.4% 
0-1 year 
  16  
Cash flow 
Total other borrowings 
  
3.2% 
  
  249

Accounting policies 
Financial instruments 
Financial instruments are recognised at the date of trade. The 
group ceases to recognise financial assets when the contrac-
tual rights to the underlying cash flows either cease to exist or 
are transferred to the purchaser of the financial asset, and sub-
stantially all risks and rewards related to ownership are also 
transferred to the purchaser. 
Financial assets and liabilities are offset, and the net amount is 
presented in the balance sheet when, and only when, the 
group has a legal right of offsetting and either intends to offset 
or settle the financial asset and the liability simultaneously. 
Financial assets 
Financial assets are classified on initial recognition and subse-
quently measured at amortised cost, fair value through other 
comprehensive income or fair value through the income 
statement. 
The classification of financial assets on initial recognition de-
pends on the financial asset's contractual cash flow character-
istics and how these are managed. 
 
Financial assets where the group intends to collect the con-
tractual cash flow are classified and measured at amortised 
cost. 
Financial assets that are part of liquidity management are clas-
sified and measured at fair value through other comprehen-
sive income. All other financial assets are classified and meas-
ured at fair value through the income statement. 
Financial assets measured at amortised cost  
Financial assets measured at amortised cost consist of readily 
available cash at bank and deposits, together with exchange-
listed debt securities with an original maturity of three months 
or less, which have an insignificant risk of change in value and 
can be readily converted to cash or cash equivalents. 
Financial assets measured at fair value   
through other comprehensive income 
Financial assets measured at fair value through other compre-
hensive income consist of mortgage credit bonds, which cor-
respond in part to raised mortgage debt. 
Financial assets are measured on initial recognition at fair 
value plus transaction costs. The financial assets are subse-
quently measured at fair value with adjustments made in other 
comprehensive income and accumulated in the fair value  
reserve in equity. 
Interest income, impairment and foreign currency translation 
adjustments of debt instruments are recognised in the income 
statement on a continuous basis under financial income and 
financial costs. In connection with the sale of financial assets 
classified at fair value through other comprehensive income, 
accumulated gains or losses, previously recognised in the fair 
value reserve, are recycled to financial income and financial 
costs. 
Financial assets measured at fair 
value through profit or loss  
Securities classified at fair value through the income state-
ment consist primarily of listed securities which  are moni-
tored, measured and reported continuously  in accordance 
with the group's treasury and funding policy. Changes in fair 
value are recognised in the income statement under financial 
income and financial costs. 
Liabilities 
Debt to mortgage credit and credit institutions as well as is-
sued bonds are measured at the trade date on first recognition 
at fair value plus transaction costs. Subsequently, liabilities are 
measured at amortised cost with the difference between the 
loan proceeds and the nominal value recognised in the in-
come statement over the expected life of the loan. 
Capitalised residual lease obligations related to leases are rec-
ognised under liabilities and measured at amortised cost. 
Other financial liabilities are measured at amortised cost. 
Please refer to Note 4.7 for details on pension liabilities. 
 
 FUNDING4.3 NET INTEREST-BEARING DEBT

Derivatives 
The group has entered into derivative contracts to secure a 
stable cash flow in future years. The total value increased by 
EUR 225 million to EUR 211 million. The increase was driven 
by higher interest rates in 2022 which increase the future 
gains on interest rate swaps. Additionally, currency sales in 
2023 were hedged at a higher rate than the market rate at the 
end of 2022.  
Hedging of future cash flows  
The group uses currency forwards to hedge currency risks on 
expected future net revenue and costs. Interest rate swaps are 
used to hedge risks against movements in expected future in-
terest payments, and commodity swaps are used for energy 
hedging. 
Fair value of hedging instruments not qualifying for 
hedge accounting (financial hedge)  
The group uses currency options which hedge forecasted 
sales and purchases. Some of these options do not qualify for 
hedge accounting, and the fair value adjustment is therefore 
recognised directly in the income statement.  
Currency swaps are used as part of the daily liquidity manage-
ment. The objective of the currency swaps is to match the tim-
ing of in- and outflow of foreign currency cash flows. 
 
Accounting policies 
Derivatives are recognised from the trade date and measured 
in the financial statements at fair value. Positive and negative 
fair values of derivatives are recognised as separate items in 
the balance sheet. 
Fair value hedging 
Changes in the fair value of derivatives which meet the criteria 
for hedging of the fair value of recognised assets and liabilities 
are recognised alongside changes in the value of the hedged 
asset or the hedged liability for the portion that is hedged. 
Cash flow hedging 
Changes in the fair value of derivatives that are classified as 
hedges of future cash flows and effectively hedge changes in 
future cash flows are recognised in other comprehensive in-
come as a reserve for hedging transactions under equity until 
the hedged cash flows impact the income statement. The re-
serve for hedging instruments is presented net of tax under 
equity. The cumulative gains or losses from hedging transac-
tions recognised in equity are reclassified and recognised un-
der the same item as the basic adjustment for the hedged 
item.  
The accumulated change in value recognised in other com-
prehensive income is recycled to the income statement once 
the hedged cash flows affect the income statement or are no 
longer likely to be realised. For derivatives that do not meet 
the criteria for classification as hedging instruments, changes 
in fair value are recognised as they occur in the income state-
ment, under financial income and costs. 
 
 
 
 FUNDING4.4 DERIVATIVES
Table 4.4.a Hedging of future cash flows from highly probable forecast transactions 
 
  
  
Expected recognition 
(EURm) 
Carrying 
amount 
Fair value 
recognised 
in OCI 
2023 
2024 
2025 
2026 
After 2026 
 
 
 
 
 
 
 
 
2022 
  
  
  
  
  
  
  
Currency contracts 
 42  
 42  
 42  
- 
- 
- 
- 
Interest rate contracts 
 132  
 132  
 30  
 27  
 25  
 15  
 35  
Commodity contracts 
 37  
 37  
 28  
 8  
 1  
- 
- 
Hedging of future cash flows 
 211  
 211  
 100  
 35  
 26  
 15  
 35  
 
 
 
 
 
 
 
 
  
  
  
Expected recognition 
(EURm) 
Carrying 
amount 
Fair value 
recognised 
in OCI 
2022 
2023 
2024 
2025 
After 2025 
 
 
 
 
 
 
 
 
2021 
  
  
  
  
  
  
  
Currency contracts 
  -17  
  -17  
  -17  
- 
- 
- 
- 
Interest rate contracts 
  -24  
  -24  
  -8  
  -6  
- 
 1  
  -11  
Commodity contracts 
 27  
 27  
 26  
 1  
- 
- 
- 
Hedging of future cash flows 
  -14  
  -14  
 1  
  -5  
- 
 1  
  -11  
Table 4.4.b Value adjustment of hedging instruments 
 
 
(EURm) 
2022 
2021 
 
 
 
Deferred gains and losses on cash flow hedges arising during the year 
254  
12  
Value adjustments of hedging instruments reclassified to other operating income and costs 
3  
3  
Value adjustments of hedging instruments reclassified to financial items 
 -32  
24  
Total value adjustment of hedging instruments recognised in other  
comprehensive income during the year 
225  
39

FUNDING4.5 FINANCIAL INSTRUMENTS
Table 4.5.a Categories of financial instruments 
 
 
(EURm) 
2022 
2021 
 
 
 
Derivatives 
47  
22  
Shares 
7  
9  
Financial assets measured at fair value through the income statement 
54  
31  
 
 
 
Securities 
432  
434  
Financial assets measured at fair value through other comprehensive income 
432  
434  
 
 
 
Currency instruments 
43  
2  
Interest rate instruments 
96  
22  
Commodity instruments 
53  
28  
Derivative assets used as hedging instruments 
192  
52  
 
 
 
Trade receivables 
  1,267  
  1,007  
Other receivables 
319  
285  
Cash 
106  
97  
Financial assets measured at amortised cost 
  1,692  
  1,389  
 
 
 
Derivatives 
19  
44  
Financial liabilities measured at fair value through the income statement 
19  
44  
 
 
 
Currency instruments 
1  
19  
Interest rate instruments 
  - 
22  
Commodity instruments 
16  
1  
Derivative liabilities used as hedging instruments 
17  
42  
 
 
 
Long-term borrowings 
  2,640  
  2,113  
Short-term borrowings 
727  
644  
Trade payables and other payables 
  1,597  
  1,445  
Financial liabilities measured at amortised cost 
  4,964  
  4,202  
Table 4.5.b Fair value hierarchy – carrying amount 
 
 
 
 
(EURm) 
Level 1 
Level 2 
Level 3 
Total 
 
 
 
 
 
2022 
  
  
  
  
Financial assets: 
  
  
  
  
Bonds 
  432  
 - 
 - 
  432  
Shares 
  7  
 - 
 - 
  7  
Derivatives 
 - 
  239  
 - 
  239  
Total financial assets 
  439  
  239  
 - 
  678  
 
 
 
 
 
Financial liabilities: 
  
  
  
  
Issued bonds 
 - 
  490  
 - 
  490  
Mortgage credit institutions 
 1,221  
 - 
 - 
 1,221  
Derivatives 
 - 
  36  
 - 
  36  
Total financial liabilities 
 1,221  
  526  
 - 
 1,747  
 
 
 
 
 
2021 
  
  
  
  
Financial assets: 
  
  
  
  
Bonds 
  434  
 - 
 - 
  434  
Shares 
  9  
 - 
 - 
  9  
Derivatives 
 - 
  74  
 - 
  74  
Total financial assets 
  443  
  74  
 - 
  517  
 
 
 
 
 
Financial liabilities: 
  
  
  
  
Issued bonds 
 - 
  440  
 - 
  440  
Mortgage credit institutions 
 1,032  
 - 
 - 
 1,032  
Derivatives 
 - 
  86  
 - 
  86  
Total financial liabilities 
 1,032  
  526  
 - 
 1,558

Risk mitigation 
Methods and assumptions applied when measuring fair values 
of financial instruments:  
Bonds and shares 
The fair value is determined using the quoted prices in an ac-
tive market.  
Non-option derivatives 
The fair value is calculated using discounted cash flow models 
and observable market data. The fair value is determined as a 
termination price and, consequently, the value is not adjusted 
for credit risks. 
 
 
Option instruments 
The fair value is calculated using option models and observa-
ble market data, such as option volatilities. The fair value is de-
termined as a termination price and, consequently, the value 
is not adjusted for credit risks.  
Fair value hierarchy 
Level 1: Fair values measured using unadjusted quoted prices 
in an active market.  
Level 2: Fair values measured using valuation techniques and 
observable market data.  
Level 3: Fair values measured using valuation techniques and 
observable as well as significant non-observable market data. 
 
 
Sale and repurchase arrangements 
The group has invested in listed Danish mortgage bonds un-
derlying its mortgage debt. By entering into a sale and repur-
chase arrangement on the mortgage bonds, the group is able 
to achieve a lower interest rate compared to current market 
interest rates on mortgage debt. The mortgage bonds are 
measured at fair value through other comprehensive income. 
 
 
 
 
The proceeds from these bonds create a repurchase obliga-
tion which is recognised in short-term borrowings.  
In addition to mortgage bonds, the group holds other securi-
ties with a carrying amount of EUR 43 million. 
 
 FUNDING4.5 FINANCIAL INSTRUMENTSFUNDING4.6 SALE AND REPURCHASE ARRANGEMENTS
Table 4.6 Transfer of financial assets 
 
 
 
(EURm) 
Carrying  
value 
Notional  
amount 
Fair value 
 
 
 
 
2022 
  
  
  
Mortgage bonds 
379  
377  
379  
Repurchase liability 
 -370  
 -369  
 -370  
Net position 
9  
8  
9  
 
 
 
 
2021 
  
  
  
Mortgage bonds 
398  
394  
398  
Repurchase liability 
 -385  
 -387  
 -385  
Net position 
13  
7  
13

Pension liabilities 
The group's pension assets and liabilities consist primarily of 
defined benefit plans in Sweden and the UK.  
The group also operates defined contribution plans for em-
ployees. For these defined contribution plans, the group is not 
subject to the same investment, interest rate, inflation or lon-
gevity risks as it is for the defined benefit plans. The benefits 
that employees receive are dependent on the contribution 
paid, investment returns and the form of benefit chosen at  
retirement. 
Pension plans in Sweden 
The recognised net pension liability in Sweden was EUR 144 
million at 31 December 2022, a decrease of EUR 81 million 
(36.0 per cent) compared to the previous year. The decrease is 
reflective of the current economic environment in Sweden 
with the main driver being discount rates increasing signifi-
cantly over the past 12 months. 
These pension plans are contribution-based plans, guarantee-
ing a defined benefit pension at retirement. The plan assets 
are legally structured as a trust, and the group has control over 
the operation of the plan and the associated investments. 
These pension plans do not include a risk-sharing element be-
tween the group and the plan participants. 
Pension plans in the UK 
The recognised net pension asset in the UK was EUR 16 mil-
lion at 31 December 2022, a decrease of EUR 53 million (76.8 
per cent) compared to the previous year.  
Similarly to Sweden, the current economic environment in the 
UK has significantly driven up discount rates which is the main 
factor causing pension liabilities to fall by EUR 530 million 
(36.0 per cent) from 31 December 2021 to 31 December 
2022. Inflation assumptions remained steady despite develop-
ments over the past 12 months due to the longevity of the in-
flation assumptions and the subsequent impact that it has on 
the present value of liabilities. The decrease in liabilities can 
mainly be attributed to actuarial losses for the year of EUR 441 
million as well as negative currency effects of EUR 61 million. 
At the same time, difficult market conditions led to a decrease 
in the fair value of plan assets of EUR 583 million (37.8 per 
cent). The decrease can mainly be attributed to a negative re-
turn on plan assets for the year of EUR 503 million as well as 
negative currency effects of EUR 65 million, marginally offset 
by contributions to the plan of EUR 12 million. 
Despite the volatile year, the UK managed to remain in a net 
pension asset position due to the investment strategy 
adopted by the trustees. The strategy aims to mitigate any ma-
jor fluctuations in asset values due to external factors by incor-
porating matching assets into the asset portfolio. This mini-
mises movements in the net pension asset position and in-
creases stability in the pension position. The higher interest 
rate in 2022 led to a lower present value of gross pension lia-
bilities. Net pension liabilities were on a par with last year due 
to a corresponding value adjustment of the pension asset 
portfolio. 
More details of the investment strategy can be found in the 
Plan asset investment in the UK section. 
The defined benefit plan in the UK is a defined benefit final sal-
ary scheme. The plan is closed to both new entrants and fu-
ture accruals. The plan is a registered pension scheme, and FUNDING4.7 PENSION LIABILITIES
Table 4.7.a Pension liabilities recognised in the balance sheet  
 
 
 
(EURm) 
Sweden 
UK 
Other 
Total 
 
 
 
 
 
2022 
  
  
  
  
Present value of funded liabilities 
  153  
  943  
  35  
 1,131  
Fair value of plan assets  
-11  
-959  
-20  
-990  
Deficit of funded plans 
  142  
-16  
  15  
  141  
Present value of unfunded liabilities 
  2  
 - 
  2  
  4  
Net pension liabilities recognised in the balance sheet 
  144  
-16  
  17  
  145  
 
 
 
 
 
Specification of total liabilities: 
  
  
  
  
Present value of funded liabilities 
  153  
  943  
  35  
 1,131  
Present value of unfunded liabilities 
  2  
 - 
  2  
  4  
Total liabilities 
  155  
  943  
  37  
 1,135  
 
 
 
 
 
Presented as:  
  
  
  
  
Pension assets 
 - 
-16  
 - 
-16  
Pension liabilities 
  144  
 - 
  17  
  161  
Net pension liabilities 
  144  
-16  
  17  
  145  
 
 
 
 
 
2021 
  
  
  
  
Present value of funded liabilities 
  235  
 1,473  
  44  
 1,752  
Fair value of plan assets  
-13  
  -1,542  
-26  
  -1,581  
Deficit of funded plans 
  222  
-69  
  18  
  171  
Present value of unfunded liabilities 
  3  
 - 
  2  
  5  
Net pension liabilities recognised in the balance sheet 
  225  
-69  
  20  
  176  
 
 
 
 
 
Specification of total liabilities: 
  
  
  
  
Present value of funded liabilities 
  235  
 1,473  
  44  
 1,752  
Present value of unfunded liabilities 
  3  
 - 
  2  
  5  
Total liabilities 
  238  
 1,473  
  46  
 1,757  
 
 
 
 
 
Presented as:  
  
  
  
  
Pension assets 
 - 
-69  
 - 
-69  
Pension liabilities 
  225  
 - 
  20  
  245  
Net pension liabilities 
  225  
-69  
  20  
  176

the assets are held in legally separate, trustee-administered 
funds. The trustees of the plan are required by law to act in the 
best interests of the plan participants while at the same time 
administering the plan in accordance with the purpose for 
which the trust was created, and is responsible for drawing up 
the investment, funding and governance policies. A repre-
sentative of the group attends trustee meetings to provide the 
group's view on the investment strategy, but the ultimate 
power lies with the trustees. 
Employer contributions are determined based on the advice of 
an independent qualified actuary on the basis of triennial valu-
ation negotiations between the plan and Arla and are ulti-
mately approved by HRM Pensions Regulator. The most recent 
full actuarial valuation of the plan was carried out at 31 De-
cember 2019. The valuation indicated that, on the agreed 
funding basis, the plan had a deficit of EUR 25 million. 
The results of the 2019 actuarial valuation have been used 
and updated for IAS19 "Employee benefits" purposes by a 
qualified independent actuary. The plan exposes the group to 
inflation risk, interest rate risk and market investment risk as 
well as longevity risk. 
Defined contribution plans are in place for other employees. 
Contributions are made both by Arla and the employee at a 
rate determined by Arla. 
 FUNDING4.7 PENSION LIABILITIES
Maturity of pension liabilities at 31 December 2022 
(EURm) 
 
Maturity of pension liabilities at 31 December 2021 
(EURm) 
 
0
100
200
300
400
500
600
0-1Y
1-5Y
5-10Y
10-20Y
20-30Y
30-40Y
>40Y
UK 943
Sweden 155
Other 37
0
100
200
300
400
500
600
0-1Y
1-5Y
5-10Y
10-20Y
20-30Y
30-40Y
>40Y
UK 1,473
Sweden 238
Other 46
Table 4.7.b Development in pension liabilities 
 
 
(EURm) 
2022 
2021 
 
 
 
Present value of liabilities at 1 January 
 1,757  
 1,745  
Current service costs 
3  
5  
Interest costs 
31  
23  
Actuarial gains and losses from changes in financial assumptions (OCI) 
-505  
  -44  
Actuarial gains and losses from changes in demographic assumptions (OCI) 
 -6  
  - 
Benefits paid 
  -64  
  -74  
Exchange rate adjustment 
  -81  
 102  
Present value of pension liabilities at 31 December 
 1,135  
 1,757  
Table 4.7.c Development in fair value of plan assets 
 
 
(EURm) 
2022 
2021 
 
 
 
Fair value of plan assets at 1 January  
 1,581  
 1,538  
Reclassification 
  - 
  - 
Interest income 
29  
21  
Return on plan assets excluding amounts included in net interest on the net defined benefit liability 
(OCI) 
-512  
  -47  
Contributions to plans 
12  
17  
Benefits paid 
  -54  
  -60  
Administration costs 
  - 
  - 
Exchange rate adjustments 
  -66  
 112  
Fair value of plan assets at 31 December 
 990  
 1,581  
 
 
 
Actual return on plan assets: 
  
  
Calculated interest income 
29  
21  
Return excluding calculated interest 
-512  
  -47  
Actual return 
-483  
  -26  
The group expects to contribute EUR 21 million to the plan assets in 2023 and EUR 78 million in 2024-2027.

Plan asset investment 
Plan assets generate returns that are used to satisfy the plan 
liabilities. They are not necessarily intended to be realised in 
the short term. The trustees invest in different categories of 
assets and with different allocations among those categories 
according to the plan investment principles. 
Currently, the plan investment strategy is to maintain a bal-
ance of growth assets (property and infrastructure), income 
assets (comprising credit investments and corporate bonds) 
and matching assets (comprising a liability hedge portfolio and 
a buy-in annuity policy), with a weighting towards matching as-
sets. There are no direct investments in the group. 
Part of the investment objective is to minimise fluctuations in 
the plan's funding levels due to changes in the value of the lia-
bilities. This is primarily achieved using a Liability Driven Invest-
ment (LDI) portfolio, the main goal of which is to align move-
ments in the value of the assets with movements in the liabili-
ties caused by changes in market conditions. The plan has 
hedging that covers the majority of interest rate and inflation 
movements, as measured based on the trustees' funding as-
sumptions which use a discount rate derived from gilt yields.  
LDI primarily involves the use of government bonds. Deriva-
tives such as interest rate and inflation swaps are also used. 
There are no annuities or longevity swaps in the LDI portfolios. 
The value of the LDI assets is determined based on the latest 
market bid price for the underlying investments, which are 
traded daily on liquid markets. 
 
 
 FUNDING4.7 PENSION LIABILITIES
Table 4.7.d Specification of plan assets 
 
 
 
 
(EURm) 
2022 
% 
2021 
% 
 
 
 
 
 
Liability hedge portfolio 
 269  
27  
 289  
18  
Annuity policies 
 221  
22  
 321  
20  
Debt vehicles 
 216  
22  
 440  
28  
Properties  
 117  
12  
 134  
8  
Infrastructure 
81  
8  
74  
5  
Other assets 
75  
8  
 103  
7  
Bonds 
9  
1  
 168  
11  
Equity instruments 
1  
0  
52  
3  
Fair value of plan assets at 31 December 
 989  
 100  
 1,581  
 100  
Table 4.7.e Assumptions for the actuarial calculations 
 
 
% 
2022 
2021 
 
 
 
Discount rate assumptions 
  
  
Discount rate, Sweden 
  4.0  
  1.7  
Discount rate, UK 
  4.9  
  1.9  
 
 
 
Inflation assumptions 
  
  
Inflation (CPI), Sweden 
  2.0  
  2.1  
Inflation (CPI), UK 
  2.6  
  2.7  
 
 
 
Mortality assumptions 
  
  
Life expectancy in years at age 65: 
  
  
Males in the UK 
21.0  
21.0  
Females in the UK 
23.0  
23.0  
Males in Sweden 
22.0  
22.0  
Females in Sweden 
24.0  
24.0  
Table 4.7.f Sensitivity of pension liabilities to key assumptions  
 
 
 
(EURm) 
2022 
2022 
2021 
2021 
 
 
 
 
 
Impact on pension liabilities at 31 December 
+ 
- 
+ 
- 
Discount rate +/- 10 bps 
  -14  
14  
  -26  
26  
Expected salary increases +/- 10 bps 
1  
 -1  
2  
 -2  
Life expectancy +/- 1 year 
36  
  -36  
82  
  -82  
Inflation +/- 10 bps 
8  
 -8  
16  
  -16

Accounting policies 
Pension liabilities and similar non-current liabilities  
The group has post-employment pension plan arrangements 
with a significant number of current and former employees. 
The post-employment pension plan agreements take the form 
of defined contribution plans and defined benefit plans. 
Defined contribution plans 
For defined contribution plans, the group pays fixed contribu-
tions to independent pension companies. The group has no 
obligation to make supplementary payments beyond those 
fixed payments, and the risk and reward of the value of the 
pension plan therefore rests with plan members and not the 
group. Contributions to defined contribution plans are  
expensed in the income statement as incurred. 
Defined benefit plans 
Defined benefit plans are characterised by the group's obliga-
tion to make specific payments from the date the plan mem-
ber is retired, depending on, for example, the member's sen-
iority and final salary. The group is subject to the risks and re-
wards associated with the uncertainty of whether the return 
generated by the assets will meet the pension liability, which is 
affected by assumptions concerning mortality and inflation. 
The group's net liability is the amount presented in the bal-
ance sheet as a pension liability. 
The net liability is calculated separately for each defined bene-
fit plan. The net liability is the amount of future pension bene-
fits that employees have earned in current and prior periods 
(i.e. the liability for pension payments for the portion of the 
employee's estimated final salary earned at the balance sheet 
date) discounted to a present value (the defined benefit liabil-
ity), less the fair value of assets held separately from the group 
in a plan fund. 
The group uses qualified actuaries to annually calculate the 
defined benefit liability using the projected unit credit 
method. 
The balance sheet amount of the net liability is impacted by 
remeasurement, which includes the effect of changes in as-
sumptions used to calculate the future liability (actuarial gain 
and losses) and the return generated on plan assets (excluding 
interest). Remeasurements are recognised in other compre-
hensive income. 
Interest costs for the period are calculated using the dis-
counted rate used to measure the defined benefit liability at 
the start of the reporting period applied to the carrying 
amount of the net liability, taking into account changes arising 
from contributions and benefit payments. The net interest 
costs and other costs relating to defined benefit plans are rec-
ognised in the income statement. The net liability primarily co-
vers defined benefit plans in the UK and Sweden. 
 
 
Uncertainties and estimates 
The defined benefit liability is assessed based on a number of 
assumptions, including discount rates, inflation rates, salary 
growth and mortality. A small difference in actual variables 
compared to assumptions and any changes in assumptions 
can have a significant impact on the net position. 
 
 FUNDING4.7 PENSION LIABILITIES
Table 4.7.g Recognised in the income statement 
 
 
(EURm) 
2022 
2021 
 
 
 
Current service costs 
3  
5  
Administration costs 
  - 
  - 
Curtailments and settlements 
  - 
  - 
Recognised as staff costs 
3  
5  
 
 
 
Interest costs on pension liabilities 
31  
23  
Interest income on plan assets 
  -29  
  -21  
Recognised as financial costs 
2  
2  
 
 
 
Total amount recognised in the income statement 
5  
7  
Table 4.7.h Recognised in other comprehensive income  
 
 
(EURm) 
2022 
2021 
 
 
 
Actuarial gains and losses on liabilities from changes in financial assumptions (OCI) 
 505  
44  
Actuarial gains and losses on liabilities from changes in demographic assumptions (OCI) 
6  
  - 
Return on plan assets excluding amounts included in net interest on the net defined benefit liability 
-512  
  -47  
Total amount recognised in other comprehensive income 
 -1  
 -3

Current and deferred tax 
Tax in the income statement  
Tax costs decreased to EUR 49 million compared to EUR 61 
million last year, primarily due to a reduction in total deferred 
tax costs. 
The effective tax rate decreased to 10.9 per cent compared to 
15.0 per cent last year, primarily due to a higher share of the 
result realised by companies being subject to cooperative  
taxation. 
Current income tax 
Costs related to current income taxes decreased to EUR 42 
million compared to EUR 44 million last year, mainly due to 
adjustments to current taxes of previous years, partially offset 
by higher corporate income tax costs for the year. 
Deferred tax 
Costs recognised in the income statement related to adjust-
ments to deferred taxes amounting to EUR 7 million, repre-
senting a decrease of EUR 10 million compared to last year. 
Last year was negatively impacted by an adjustment of the tax 
rate in the UK. 
Net deferred tax liabilities amounted to EUR 64 million, repre-
senting an increase of EUR 21 million compared to last year. 
The increase was mainly driven by deferred tax costs from 
financial instruments recognised in other comprehensive  
income. 
 
The gross deferred tax liabilities of EUR 86 million mainly  
related to temporary differences in provisions, pension liabili-
ties and other liabilities, financial assets and other items. 
These were in part offset by deferred tax assets relating to 
property, plant and equipment and tax losses carried forward 
of EUR 22 million. 
The group recognises deferred tax assets, including the value 
of tax losses carried forward, where management assesses 
that the tax assets may be utilised in the foreseeable future by 
offsetting against taxable income. The assessment is per-
formed on an ongoing basis and is based on the budgets and 
business plans for future years. 
The group recognised deferred tax assets in respect of  
tax losses carried forward in the amount of EUR 9 million.  
Deferred tax assets not recognised totalled EUR 32 million, 
which is on a par with last year. Unrecognised deferred tax  
assets related to tax losses carried forward. 
 
 
 
 OTHER AREAS5.1 TAX
Table 5.1.a Tax recognised in the income statement 
 
 
(EURm) 
2022 
2021 
 
 
 
Current income tax 
  
  
Current income tax on profit for the year relating to: 
  
  
Cooperative tax 
 10  
 10  
Corporate income tax 
 31  
 28  
Adjustments to current taxes of previous years 
 1  
 6  
Total current income tax costs 
 42  
 44  
 
 
 
Deferred tax 
  
  
Change in deferred tax for the year 
 16  
 10  
Adjustment to deferred taxes of previous years 
  -9  
  -4  
Impact of changes in tax rates and laws 
- 
 11  
Total deferred tax costs 
 7  
 17  
 
 
 
Total tax costs in the income statement 
 49  
 61  
Table 5.1.b Calculation of effective tax rate  
 
 
 
 
(EURm) 
2022 
2021 
 
 
 
 
 
Profit before tax 
  
 449  
  
 407  
Tax applying the statutory Danish corporate income tax rate 
22.0% 
 99  
22.0% 
 89  
Effect of tax rates in other jurisdictions 
-2.8% 
  -13  
-2.0% 
  -8  
Effect of companies subject to cooperative taxation 
-7.7% 
  -34  
-4.9% 
  -20  
Tax-exempt income, less non-deductible expenses 
-0.6% 
  -3  
-1.5% 
  -6  
Impact of changes in tax rates and laws 
0.0% 
- 
2.7% 
 11  
Adjustment for tax costs of previous years 
-0.8% 
  -4  
0.5% 
 2  
Recognition of previously unrecognised tax losses 
-1.0% 
  -4  
0.0% 
- 
Current year losses for which no deferred tax asset is recognised 
0.3% 
 1  
0.0% 
- 
Other adjustments 
1.5% 
 7  
-1.8% 
  -7  
Total 
10.9% 
 49  
15.0% 
 61

Accounting policies 
Tax in the income statement  
Tax in the income statement comprises current tax and adjust-
ments to deferred tax. Tax is recognised in the income state-
ment, except to the extent that it relates to a business combi-
nation or items (income or costs) recognised directly in other 
comprehensive income. 
Current tax 
Current tax is assessed based on tax legislation for entities in 
the group subject to cooperative or corporate income taxa-
tion. Cooperative taxation is based on the capital of the coop-
erative, while corporate income tax is assessed based on the 
company's taxable income for the year. Current tax liabilities 
comprise the expected tax payable/receivable on the taxable 
profit or loss for the year, any adjustments to the tax payable 
or receivable in respect of previous years and tax paid on ac-
count. Current tax liabilities are disclosed as part of other cur-
rent liabilities. 
Deferred tax 
Deferred tax is measured in accordance with the balance 
sheet liability method for all temporary differences between 
the tax base of assets and liabilities and their carrying amounts 
in the consolidated financial statements. However, deferred 
tax is not recognised on temporary differences on initial 
recognition of goodwill or arising at the acquisition date of an 
asset or a liability without affecting either the profit or loss for 
the year or taxable income, except for those arising from M&A 
activities. 
 
Deferred tax is determined by applying tax rates (and laws) that 
have been enacted or substantially enacted by the end of the 
reporting period and that are expected to apply when the re-
lated deferred tax asset is realised or the deferred tax liability is 
settled. Changes in deferred tax assets and liabilities due to 
changes in the tax rate are recognised in the income state-
ment except for items recognised in other comprehensive  
income. 
Deferred tax assets, including the value of tax losses carried 
forward, are recognised under other non-current assets at the 
value at which they are expected to be used, either by elimina-
tion in the tax of future earnings or by offsetting against  
deferred tax payable in companies within the same legal tax 
entity or jurisdiction. 
 
Uncertainties and estimates 
Deferred tax 
Deferred tax reflects assessments of actual future tax due on 
items in the financial statements, considering timing and 
probability. These estimates also reflect expectations about 
future taxable profits. Actual future taxes may deviate from 
these estimates due to changes in expectations relating to  
future taxable income, future statutory changes in income  
taxation or the outcome of tax authorities' final review of the 
group's tax returns. Recognition of a deferred tax asset also 
depends on an assessment of the future use of the asset. 
 
 OTHER AREAS5.1 TAX
Table 5.1.c. Deferred tax assets and liabilities 
 
 
(EURm) 
2022 
2021 
 
 
 
Net deferred tax liability at 1 January 
-43  
-35  
Deferred tax recognised in the income statement 
-7  
-6  
Deferred tax recognised in other comprehensive income 
-17  
  9  
Impact of change in tax rates 
 - 
-11  
Exchange rate adjustments 
  3  
 - 
Net deferred tax liability at 31 December 
-64  
-43  
 
 
 
Deferred tax, by gross temporary difference 
  
  
Intangible assets 
-6  
-7  
Property, plant and equipment 
  22  
  29  
Provisions, pension liabilities and other assets 
-51  
-33  
Tax losses carried forward 
  9  
  7  
Other 
-38  
-39  
Total deferred tax, by gross temporary difference 
-64  
-43  
 
 
 
Recognised in the balance sheet as: 
  
  
Deferred tax assets 
  22  
  21  
Deferred tax liabilities 
-86  
-64  
Total 
-64  
-43

Provisions 
Provisions amounted to EUR 48 million in 2022 compared to 
EUR 42 million last year. Provisions primarily related to provi-
sions for insurance incidents that have occurred, but have not 
yet been settled. 
 
 
 
 
Uncertainties and estimates 
Provisions are particularly associated with estimates of insur-
ance provisions. Insurance provisions are assessed based on 
historical records of, among other things, the number of insur-
ance events and related costs considered. The scope and ex-
tent of onerous contracts are also estimated. 
 
 
Fees paid to EY 
 
 
 OTHER AREAS5.2 PROVISIONSOTHER AREAS5.3 FEES TO AUDITORS APPOINTED BY THE BOARD OF REPRESENTATIVES
Table 5.2 Provisions 
 
 
 
 
 
(EURm) 
Insurance  
provisions 
Restructuring  
provisions 
Other  
provisions  
Total 
2022 
Total  
2021 
 
 
 
 
 
 
Provisions at 1 January 
  14  
  3  
  25  
  42  
  46  
New provisions during the year 
  7  
  1  
 - 
  8  
  10  
Reversals  
 - 
 - 
-1  
-1  
 - 
Used during the year 
 - 
 - 
-1  
-1  
-14  
Provisions at 31 December 
  21  
  4  
  23  
  48  
  42  
Non-current provisions  
  7  
 - 
  21  
  28  
  24  
Current provisions  
  14  
  4  
  2  
  20  
  18  
Provisions at 31 December 
  21  
  4  
  23  
  48  
  42  
Table 5.3 Fees to auditors appointed by the Board of Representatives 
 
 
(EURm) 
2022 
2021 
 
 
 
Statutory audit 
 1.7  
 1.6  
Other assurance engagements 
 0.4  
 0.3  
Tax assistance 
 0.3  
 0.4  
Other services 
 0.3  
 0.5  
Total fees to auditors 
 2.7  
 2.8

Remuneration paid to management 
The remuneration to the 19 registered members of the Board 
of Directors (BoD) is assessed and adjusted on a bi-annual  
basis and approved by the Board of Representatives. The BoD's 
remuneration was most recently adjusted in 2022. The princi-
ples applied to the remuneration of the BoD are described on 
page 63. Members of the BoD are paid for their milk supplies 
to Arla Foods amba on the same terms as apply to other own-
ers. Similarly, individual capital instruments are issued to the 
BoD on the same terms as apply to other owners. 
The Executive Board consists of Chief Executive Officer Peder 
Tuborgh and Chief Commercial Officer, Europe, Peter Giørtz-
Carlsen. The principles applied to the remuneration of the  
Executive Board are described on page 63. 
 
 
 
 OTHER AREAS5.4 MANAGEMENT REMUNERATION AND TRANSACTIONS WITH RELATED PARTIES
Table 5.4.a Management remuneration 
 
 
(EURm) 
2022 
2021 
 
 
 
Board of Directors 
  
  
Wages, salaries and remuneration 
 1.6  
 1.3  
Total 
 1.6  
 1.3  
 
 
 
Executive Board 
  
  
Fixed compensation 
 2.5  
 2.4  
Pension 
 0.4  
 0.3  
Short-term variable incentives 
 0.5  
 0.8  
Long-term variable incentives 
 0.8  
 2.9  
Total  
 4.2  
 6.4  
The above table includes accrued amounts related to the respective reporting period. The amounts are based on reported key 
figures together with estimates of performance compared to peers and, consequently, the final future pay-out may differ. 
Table 5.4.b Transactions with the Board of Directors 
 
 
(EURm) 
2022 
2021 
 
 
 
Purchase of raw milk 
 36.2  
 27.4  
half-year supplementary payment 
 0.3  
 - 
Supplementary payment regarding previous years 
 1.1  
 1.4  
Total 
 37.6  
 28.8  
 
 
 
Unsettled milk deliveries in trade payables and other payables 
 1.4  
 2.6  
Individual capital instruments 
 2.6  
 2.9  
Total 
 4.0  
 5.5

Contractual obligations and commitments 
Arla's contractual obligations and commitments amounted to 
EUR 293 million compared to EUR 370 million last year. The 
development was due to reduced surety and guarantee obli-
gations and increased commitments relating to property, 
plant and equipment purchase agreements. 
Contractual obligations and commitments consisted of surety 
and guarantee obligations, IT licences, short-term and low-
value leases and commitments relating to property, plant and 
equipment purchase agreements. 
 
 
The group provided security upon property for mortgage debt 
based on the Danish Mortgage Act with a nominal value of 
EUR 1,229 million compared to EUR 1,040 million last year. 
The group is party to a small number of lawsuits, disputes and 
other claims. The management assesses that the outcome of 
these will not have a material impact on the group's financial 
position beyond what has already been recognised in the fi-
nancial statements.  
 
 
Subsequent events 
No subsequent events with a material impact on the financial 
statements have occurred after the balance sheet date. 
 
 
 OTHER AREAS5.5 CONTRACTUAL COMMITMENTS, CONTINGENT ASSETS AND LIABILITIESOTHER AREAS5.6 EVENTS AFTER THE BALANCE SHEET DATE

Basis for preparation 
The consolidated financial statements included in this annual 
report are prepared in accordance with International Financial 
Reporting Standards (IFRS) as adopted by the EU and addi-
tional disclosure requirements in the Danish Financial State-
ments Act for large class C companies. Arla is not an EU public 
interest entity as the group has no debt instruments traded in 
a regulated EU market place. The consolidated financial state-
ments were authorised for issue by the company's Board of Di-
rectors on 8 February 2023 and presented for approval by the 
Board of Representatives on 22 February 2023. 
The functional currency of the parent company is DKK. The 
presentation currency of the parent company and the group 
is EUR. 
These financial statements are prepared in million EUR with 
rounding. 
Consolidated financial statements 
The consolidated financial statements are prepared as a com-
pilation of the parent company's and the individual subsidiar-
ies' financial statements in line with the group's accounting 
policies. Revenue, costs, assets and liabilities, along with items 
included in the equity of subsidiaries, are aggregated and pre-
sented on a line-by-line basis. Inter-company shareholdings, 
balances and transactions as well as unrealised income and 
expenses arising from inter-company transactions are elimi-
nated. 
The consolidated financial statements comprise Arla Foods 
amba (parent company) and the subsidiaries in which the par-
ent company directly or indirectly holds more than 50 per 
cent of the voting rights or otherwise maintains control to  
obtain benefits from its activities. Entities in which the group 
exercises joint control through a contractual arrangement are 
considered to be joint ventures. Entities in which the group  
exercises a significant but not a controlling influence are con-
sidered to be associates. A significant influence is typically  
obtained by holding or having at the group's disposal, directly 
or indirectly, more than 20 per cent, but less than 50 per cent, 
of the voting rights in an entity. 
Unrealised gains arising from transactions with joint ventures 
and associates, i.e. profits from sales to joint ventures or asso-
ciates and whereby the customer pays with funds partly 
owned by the group, are eliminated against the carrying 
amount of the investment in proportion to the group's interest 
in the company. Unrealised losses are eliminated in the same 
manner, but only to the extent that there is no evidence of 
impairment. 
The consolidated financial statements are prepared on a his-
torical cost basis, except for certain items with alternative 
measurement bases, which are identified in these accounting 
policies.  
Translation of transactions and monetary  
items in foreign currencies 
For each reporting entity in the group, a functional currency is 
determined, being the currency used in the primary economic 
environment where the entity operates. Where a reporting  
entity has transactions in a foreign currency, it will record the 
transaction in its functional currency using the transaction 
date rate. Monetary assets and liabilities denominated in for-
eign currencies are translated into the functional currency  
using the exchange rate applicable at the reporting date. Ex-
change rate differences are recognised in the income state-
ment under financial items. Non-monetary items, for example 
property, plant and equipment, which are measured based on 
historical cost in a foreign currency, are translated into the 
functional currency on initial recognition. 
Translation of foreign operations  
The assets and liabilities of consolidated entities, including the 
share of net assets and goodwill of joint ventures and associ-
ates with a functional currency other than EUR, are translated 
into EUR using the year-end exchange rate. The revenue, costs 
and share of the net profit or loss for the year are translated 
into EUR using the average monthly exchange rate if this does 
not differ materially from the transaction date rate. Exchange 
rate differences are recognised in other comprehensive  
income and accumulated in the translation reserve. 
On partial divestment of associates and joint ventures, the rel-
evant proportional amount of the cumulative foreign currency 
translation adjustment reserve is transferred to the net profit 
or loss for the year, along with any gains or losses related to 
the divestment. Any repayment of outstanding balances con-
sidered part of the net investment is not in itself considered to 
be a partial divestment of the subsidiary. 
Adoption of new or amended IFRS  
The group has implemented all new standards and interpreta-
tions effective in the EU from 2022. 
Future implementations 
The IASB has issued a number of new or amended and revised 
accounting standards and interpretations which are not yet 
applicable. Arla will adopt these new standards when they be-
come mandatory. No material impact is expected from that. 
 
 OTHER AREAS5.7 GENERAL ACCOUNTING POLICIES

Country 
Currency 
Group equity 
interest 
 
 
 
 
Arla Foods amba   
Denmark 
DKK 
% 
Arla Foods Finance Limited  
UK 
GBP 
 33  
Arla Foods Limited   
UK 
GBP 
 100  
Arla Foods Hatfield Limited  
UK 
GBP 
 100  
Yeo Valley Dairies Limited  
UK 
GBP 
 100  
Arla Foods Cheese Company Limited 
UK 
GBP 
 100  
Arla Foods Ingredients UK Limited 
UK 
GBP 
 100  
MV Ingredients Limited*  
UK 
GBP 
 50  
Arla Foods UK Property Co. Limited   
UK 
GBP 
 100  
Arla Foods B.V.   
Netherlands 
EUR 
 100  
Arla Foods Comércio, Importacâo e Exportacão  
de Productos Alimenticios Ltda. 
Brazil 
BRL 
 100  
Arla Foods Ltd.   
Kingdom of Saudi Arabia SAR 
 75  
AF A/S 
Denmark 
DKK 
 100  
Arla Foods Finance A/S  
Denmark 
DKK 
 100  
Kingdom Food Products ApS  
Denmark 
DKK 
 100  
Ejendomsanpartsselskabet St. Ravnsbjerg   
Denmark 
DKK 
 100  
Arla Insurance Company (Guernsey) Limited 
Guernsey 
EUR 
 100  
Arla Foods Energy A/S  
Denmark 
DKK 
 100  
Arla Foods Trading A/S  
Denmark 
DKK 
 100  
Arla DP Holding A/S  
Denmark 
DKK 
 100  
Arla Foods Investment A/S  
Denmark 
DKK 
 100  
Arla Senegal SA.   
Senegal 
XOF 
 100  
Tholstrup Cheese A/S   
Denmark 
DKK 
 100  
Arla Foods Belgien AG  
Belgium 
EUR 
 100  
  
 OTHER AREAS5.8 GROUP CHART
 
Country 
Currency 
Group equity 
interest 
 
 
 
 
Arla Foods amba   
Denmark 
DKK 
% 
Arla Foods Ingredients Group P/S 
Denmark 
DKK 
 100  
Arla Foods Ingredients Energy A/S 
Denmark 
DKK 
 100  
Arla Foods Ingredients Japan K.K. 
Japan 
JPY 
 100  
Arla Foods Ingredients Inc. 
USA 
USD 
 100  
Arla Foods Ingredients Korea, Co. Ltd.   
Korea 
KRW 
 100  
Arla Foods Ingredients Trading (Beijing) Co. Ltd.  
China 
CNY 
 100  
Arla Foods Ingredients S.A.  
Argentina 
USD 
 100  
Arla Foods Ingredients Comércio de Produtos Alimentícios Ltda. 
Brazil 
BRL 
 100  
Arla Foods Ingredients Singapore Pte. Ltd.   
Singapore 
SGD 
 100  
Arla Foods Ingredients S.A. de C.V. 
Mexico 
MXN 
 100  
Arla Foods Holding A/S  
Denmark 
DKK 
 100  
Arla Foods W.L.L.   
Bahrain 
BHD 
 100  
Arla Oy 
Finland 
EUR 
 100  
Massby Facility & Services Ltd. Oy   
Finland 
EUR 
 60  
Osuuskunta MS tuottajapalvelu**  
Finland 
EUR 
 37  
Arla Foods Distribution A/S  
Denmark 
DKK 
 100  
Cocio Chokolademælk A/S   
Denmark 
DKK 
 50  
Arla Foods International A/S  
Denmark 
DKK 
 100  
Arla Foods UK Holding Limited 
UK 
GBP 
 100  
Arla Foods UK Farmers Joint Venture Co. Limited 
UK 
GBP 
 100  
Arla Foods UK plc  
UK 
GBP 
 100  
Arla Foods GP Limited  
UK 
GBP 
 100  
Arla Foods Limited Partnership  
UK 
GBP 
 100

Country 
Currency 
Group equity 
interest 
 
 
 
 
Arla Foods amba   
Denmark 
DKK 
% 
Arla Foods Ingredients (Deutschland) GmbH 
Germany 
EUR 
 100  
Arla CoAr Holding GmbH  
Germany 
EUR 
 100  
ArNoCo GmbH & Co. KG* 
Germany 
EUR 
 50  
       Arla Biolac Holding GmbH  
Germany 
EUR 
 100  
Arla Foods Kuwait Company WLL 
Kuwait 
KWD 
 49  
Arla Kallassi Foods Lebanon S.A.L. 
Lebanon 
LBP 
 50  
Arla Foods Qatar WLL  
Qatar 
QAR 
 40  
Arla Foods Trading and Procurement Limited 
Hong Kong 
HKD 
 100  
Arla Foods Sdn. Bhd.  
Malaysia 
MYR 
 100  
Arla Foods Corporation   
Philippines 
PHP 
 100  
Arla Foods Limited   
Ghana 
GHS 
 100  
Arla Global Dairy Products Ltd. 
Nigeria 
NGN 
 100  
Arla Global Development Company Ltd. 
Nigeria 
NGN 
 99  
TG Arla Dairy Products LFTZ Enterprise 
Nigeria 
NGN 
 50  
TG Arla Dairy Products Ltd. 
Nigeria 
NGN 
 100  
Arla For General Trading Ltd. 
Iraq 
USD 
 51  
Arla Foods AB 
Sweden 
SEK 
 100  
Arla Gelfeortens AB 
Sweden 
SEK 
 100  
Årets Kock Aktiebolag 
Sweden 
SEK 
 67  
Arla Foods Russia Holding AB  
Sweden 
SEK 
 100  
 
 
 
Country 
Currency 
Group equity 
interest 
 
 
 
 
Arla Foods amba   
Denmark 
DKK 
% 
Arla Foods Inc. 
USA 
USD 
  100  
Arla Foods Production LLC   
USA 
USD 
  100  
Arla Foods Transport LLC   
USA 
USD 
  100  
Arla Foods Deutschland GmbH   
Germany 
EUR 
  100  
Arla Foods Verwaltungs GmbH   
Germany 
EUR 
  100  
Dofo Cheese Eksport K/S°  
Denmark 
DKK 
  100  
Dofo Inc.  
USA 
USD 
100 
Aktieselskabet J. Hansen 
Denmark 
DKK 
  100  
J.P. Hansen USA Incorporated   
USA 
USD 
  100  
AFI Partner ApS 
Denmark 
DKK 
  100  
Andelssmør A.m.b.a.  
Denmark 
DKK 
98 
Arla Foods AS 
Norway 
NOK 
  100  
Arla Foods Bangladesh Ltd.   
Bangladesh 
BDT 
51  
Arla Foods Dairy Products Technical Service (Beijing) Co. Ltd. 
China 
CNY 
  100  
Arla Foods FZE 
UAE 
AED 
  100  
Arla Foods Hellas S.A.   
Greece 
EUR 
  100  
Arla Foods Inc. 
Canada 
CAD 
  100  
Arla Foods Logistics GmbH 
Germany 
EUR 
  100  
Arla Foods Mayer Australia Pty, Ltd.  
Australia 
AUD 
51  
Arla Foods Mexico S.A. de C.V.  
Mexico 
MXN 
  100  
Arla Foods S.A.  
Spain 
EUR 
  100  
 
 OTHER AREAS5.8 GROUP CHART

Financial statements of the parent company 
Under section 149 of the Danish Financial Statements Act, 
these consolidated financial statements represent an extract 
of Arla's complete annual report. In order to make this report 
more manageable and user-friendly, we publish consolidated 
financial statements that do not include the financial state-
ments of the parent company, Arla Foods amba. The annual 
report of the parent company is an integral part of the full an-
nual report and is available at www.arlafoods.com. Profit shar-
ing and supplementary payments from the parent company 
are set out in the equity section of the consolidated financial 
statements. The full annual report contains the statement by 
the Board of Directors and the Executive Board as well as the 
independent auditor's report. 
 OTHER AREAS5.8 GROUP CHART
 
Country 
Currency 
Group equity 
interest 
 
 
 
 
Arla Foods amba   
Denmark 
DKK 
% 
Arla Foods France S.a.r.l. 
France 
EUR 
 100  
Arla Foods S.R.L.  
Dominican Republic 
DOP 
 100  
Arla Foods SA  
Poland 
PLN 
 100  
Arla Global Shared Services Sp. Z.o.o.  
Poland 
PLN 
 100  
Arla Foods LLC   
UAE 
AED 
 49  
Arla National Food Products Company LLC  
Oman 
OMR 
 67  
Cocio Chokolademælk A/S  
Denmark 
DKK 
 50  
Marygold Trading K/S° 
Denmark 
DKK 
 100  
Mejeriforeningen 
Denmark 
DKK 
 89  
COFCO Dairy Holdings Limited**   
British Virgin Islands 
HKD 
 30  
Svensk Mjölk Ekonomisk förening 
Sweden 
SEK 
 75  
Svensk Mjölk AB 
Sweden 
SEK 
 100  
Lantbrukarnas Riksförbund upa** 
Sweden 
SEK 
 24  
Jörd International A/S  
Denmark 
DKK 
 100  
Ejendomsselskabet Gjellerupvej 105 P/S 
Denmark 
DKK 
 100  
Svenska Ostklassiker AB  
Sweden 
SEK 
 68  
Komplementarselskabet Gjellerupvej 105 ApS 
Denmark 
DKK 
 100  
PT Arla Foods Indonesia 
Indonesia 
IDR 
 100  
Arla Foods Arinco A/S 
Denmark 
DKK 
 80  
Green Fertilizer Denmark ApS** 
Denmark 
DKK 
 25  
*Joint ventures 
**Associates 
°According to section 5 of the Danish Financial Statements Act, the company does not prepare a statutory report. 
In addition, the group owns a number of entities without material commercial activities.

STATEMENT BY THE BOARD OF DIRECTORS AND THE EXECUTIVE BOARD
Today, the Board of Directors and the Executive Board have 
discussed and approved the annual report of Arla Foods amba 
for the financial year 2022. The annual report has been pre-
pared in accordance with International Financial Reporting 
Standards as adopted by the EU and additional disclosure  
requirements of the Danish Financial Statements Act. 
It is our opinion that the consolidated financial statements and 
the parent company financial statements give a true and fair 
view of the group's and the parent company's financial posi-
tion at 31 December 2022 and of the results of the group's 
and the parent company's activities and cash flows for the fi-
nancial year 1 January to 31 December 2022.  
In our opinion, the management's review of the annual report 
(pages 4-65) includes a true and fair view of the development 
in the group's and the parent company's financial position,  
activities, financial matters, results for the year and cash flows 
as well as a description of the most significant risks and uncer-
tainties which may affect the group and the parent company. 
Arla's consolidated environmental, social and governance 
statements have been prepared in accordance with Arla's ESG 
accounting principles. In our opinion, they give a true and fair 
view and a balanced and reasonable presentation of the 
groups environmental, social and governance performance  
in accordance with these principles. 
We hereby recommend the annual report for adoption by  
the Board of Representatives. 
Aarhus, 8 February 2023 
 
 
Peder Tuborgh 
CEO 
Peter Giørtz-Carlsen  
COO 
Jan Toft Nørgaard 
Chairman 
Manfred Graff 
Vice Chairman 
Anders Olsson 
Arthur Fearnall 
Bjørn Jepsen 
Daniel Halmsjö 
Florence Rollet 
Grant Cathcart  
Gustav Kämpe 
Ib Bjerglund Nielsen  
Inger-Lise Sjöström 
Johnnie Russell 
Jørn Kjær Madsen 
Marcel Goffinet 
Marita Wolf 
Nana Bule 
René Lund Hansen 
Simon Simonsen 
Steen Nørgaard Madsen

Opinion 
We have audited the consolidated financial statements and 
the parent company financial statements of Arla Foods amba 
for the financial year 1 January to 31 December 2022, which 
comprise the income statement, statement of comprehensive 
income, balance sheet, statement of changes in equity, cash 
flow statement and notes, including accounting policies, for 
the group and the parent company. The consolidated financial 
statements and the parent company financial statements 
have been prepared in accordance with International Financial 
Reporting Standards as adopted by the EU and additional re-
quirements of the Danish Financial Statements Act.  
In our opinion, the consolidated financial statements and the 
parent company financial statements give a true and fair view 
of the financial position of the group and the parent company 
at 31 December 2022 and of the results of the group's and the 
parent company's operations and cash flows for the financial 
year 1 January to 31 December 2022 in accordance with Inter-
national Financial Reporting Standards as adopted by the EU 
and additional requirements of the Danish Financial State-
ments Act. 
Basis for opinion 
We conducted our audit in accordance with International 
Standards on Auditing (ISAs) and additional requirements ap-
plicable in Denmark. Our responsibilities under those stand-
ards and requirements are further described in the "Auditor's 
responsibilities for the audit of the consolidated financial 
statements and the parent company financial statements" 
(hereinafter collectively referred to as "the financial state-
ments") section of our report. We believe that the audit evi-
dence we have obtained is sufficient and appropriate to pro-
vide a basis for our opinion. 
Independence 
We are independent of the group in accordance with the Inter-
national Ethics Standards Board for Accountants' International 
Code of Ethics for Professional Accountants (IESBA Code) and 
the additional ethical requirements applicable in Denmark, 
and we have fulfilled our other ethical responsibilities in  
accordance with these requirements and the IESBA Code.  
Statement on the Management's review 
Management is responsible for the Management's review. 
Our opinion on the financial statements does not cover the 
Management's review, and we do not express any assurance 
conclusion thereon. 
In connection with our audit of the financial statements, our 
responsibility is to read the Management's review and, in doing 
so, consider whether the Management's review is materially 
inconsistent with the financial  statements or our knowledge 
obtained during the audit, or otherwise appears to be materi-
ally misstated.  
Moreover, it is our responsibility to consider whether the Man-
agement's review provides the information required under the 
Danish Financial Statements Act. 
Based on our procedures, we conclude that the  Manage-
ment's review is in accordance with the financial statements 
and has been prepared in accordance with the requirements 
of the Danish Financial Statements Act. We did not identify any 
material misstatement of the Management's review.  
Management's responsibilities for 
the financial statements 
Management is responsible for the preparation of consoli-
dated financial statements and parent company financial 
statements that give a true and fair view in accordance with 
International Financial Reporting Standards as adopted by the 
EU and additional requirements of the Danish Financial State-
ments Act and for such internal control as Management deter-
mines is necessary to enable the preparation of financial state-
ments that are free from material misstatement, whether due 
to fraud or error. 
In preparing the financial statements, Management is  respon-
sible for assessing the group's and the parent company's abil-
ity to continue as a going concern, disclosing, as applicable, 
matters related to going concern and using the going concern 
basis of accounting in preparing the financial statements  
unless Management either intends to liquidate the group or 
the parent company or to cease operations, or has no realistic 
alternative but to do so. 
Auditor's responsibilities for the audit 
of the financial statements 
Our objectives are to obtain reasonable assurance as to 
whether the financial statements as a whole are free from  
material misstatement, whether due to fraud or error, and to 
issue an auditor's report that includes our opinion. Reasonable 
assurance is a high level of assurance, but is not a guarantee 
that an audit conducted in accordance with ISAs and addi-
tional requirements applicable in Denmark will always detect a 
material misstatement when it exists. Misstatements can arise 
from fraud or error and are considered material if, individually 
or in the aggregate, they could reasonably be expected to in-
fluence the economic decisions of users taken on the basis of 
the financial statements. 
As part of an audit conducted in accordance with ISAs and  
additional requirements applicable in Denmark, we exercise 
professional judgement and maintain  professional scepticism 
throughout the audit. We also: 
· Identify and assess the risks of material misstatement of the 
financial statements, whether due to fraud or error, design 
and perform audit procedures responsive to those risks and 
obtain audit evidence that is sufficient and appropriate to 
provide a basis for our opinion. The risk of not detecting a 
material misstatement resulting from fraud is higher than for 
one resulting from error, as fraud may involve collusion, for-
gery, intentional omissions, misrepresentations or the over-
ride of internal control. 
· Obtain an understanding of internal control relevant to the 
audit in order to design audit procedures that are appropri-
ate in the circumstances, but not for the purpose of express-
ing an opinion on the effectiveness of the group's and the 
parent company's internal control. 
· Evaluate the appropriateness of accounting policies used 
and the reasonableness of accounting estimates and related 
disclosures made by Management. 
· Conclude on the appropriateness of Management's use of 
the going concern basis of accounting in preparing the finan-
cial statements and, based on the audit evidence obtained, 
whether a material uncertainty exists related to events or 
conditions that may cast significant doubt on the group's 
and the parent company's ability to continue as a going con-
cern. If we conclude that a material uncertainty exists, we are 
required to draw attention in our auditor's report to the re-
lated disclosures in the financial statements or, if such dis-
closures are inadequate, to modify our opinion. Our conclu-
sions are based on the audit evidence obtained up to the 
date of our auditor's report. However, future events or condi-
tions may cause the group and the parent company to cease 
to continue as a going concern.

· Evaluate the overall presentation, structure and contents of 
the financial statements, including the note disclosures, and 
whether the financial statements represent the underlying 
transactions and events in a manner that gives a true and  
fair view. 
· Obtain sufficient appropriate audit evidence regarding the  
financial information of the entities or business activities 
within the group to express an opinion on the consolidated 
financial statements. We are responsible for the direction, 
supervision and performance of the group audit. We remain 
solely responsible for our audit opinion. 
We communicate with those charged with governance regard-
ing, among other matters, the planned scope and timing of 
the audit and significant audit findings, including any signifi-
cant deficiencies in internal control that we identify during  
our audit. 
Aarhus, 8 February 2023  
EY Godkendt Revisionspartnerselskab 
CVR no. 30 70 02 28 
 
Henrik Kronborg Iversen 
State Authorised Public  
Accountant 
MNE no. 24687 
Jes Lauritzen 
State Authorised Public  
Accountant 
MNE no. 10121

ARLA BABY AND ME®
 
Arla has been making infant formula for 30 years,  
going the extra mile to provide the next genera-
tions with organic, natural goodness. 
 
 
 
 
 
 
 ESGSTATEMENTS

ENVIRONMENTAL FIGURES1.1 GREENHOUSE GAS EMISSIONS (CO2e)
 
 
 
 
 INTRODUCTION TO GREENHOUSE GAS EMISSIONS IN ARLA
In Arla, we believe that being science-based and-data driven is 
key to reducing our carbon footprint. Science is developing 
rapidly and we strive to use best available data and methodol-
ogy at all times. The effects on updates in methodologies and 
data sources are included in the reported numbers. We receive 
reasonable assurance on our complete ESG data set, including 
scope 1, 2, and 3 greenhouse gas emissions.  
According to the 2022 quantification of Arla’s climate impact, 
scope 1 and 2 emissions accounted for 3 and 1 per cent of to-
tal emissions, respectively. Scope 3 emissions accounted for 
96 per cent of Arla’s climate impact. Milk production on farms 
(including, among many other factors, methane emitted by 
cows, and emissions related to feed and transport of feed)  
accounted for 81 per cent of total emissions. 
 
 
 
Farm emissions (81%) 
Externally sourced whey (10%) 
Packaging (2%) 
Transport (service) 
Waste and other (3%) 
Purchased energy 
 3%SCOPE 1
Transport 
(own fleet) 
Production

ENVIRONMENTAL DATA1.1 GREENHOUSE GAS EMISSIONS (CO2e)
Greenhouse gas emission development 
To follow up on the progress towards emission reduction tar-
gets, greenhouse gas emissions (expressed as CO₂ equiva-
lents, CO₂e) are reported annually. CO₂e is categorised into 
three scopes according to the methodology of the Green-
house Gas Protocol Corporate Standard (GHG protocol). In line 
with Arla’s Science Based Targets, the group does not reduce 
the CO₂e emissions with carbon credits. 
In 2022, our scope 1+2 CO₂e emissions decreased 4 percent-
age points, leading to a total reduction of 29 per cent com-
pared to 2015. The reduction was a result of energy optimisa-
tions at sites, slightly lower milk volumes, partly offset by 
changes to our production mix to more energy intensive prod-
ucts such as milk powder. You can read more about energy 
optimisation activities in 2022 on page 36 and about our pro-
gress towards our renewable electricity target on page 41. 
Scope 3 emissions per kg milk and whey were reduced 2 per 
centage points in 2022, leading to a total decrease towards 
our 2030 target of 9 per cent compared to the 2015 baseline. 
Scope 3 emissions per kg milk and whey amounted to 1.18 kg. 
Emissions specifically from Arla’s owners amounted to 1.12 kg 
CO₂e per kg of owner milk. For more information on initiatives 
to reach the target, refer to page 36.  
Emissions related to packaging and transport increased due to 
changes in emission factors, partly offset by lower packaging 
volumes due to a shift in sales from retail to trading.  
In 2022, total CO₂e emissions decreased to 19,102 million kg 
compared to 19,783 million kg last year. The development is 
explained by emission reduction on farm, lower milk volumes 
and decreased scope 2 emissions, partly offset by increased 
purchase of external whey for the Arla Foods Ingredients  
business. 
CO2e emission development 
(MKG) 
 
 
2021 
Scope 1 
Scope 2 
Scope 3 
Milk 
Scope 3 
Whey 
Scope 3  
Other 
2022 
 
 
 
 
 
 
 
 
19,783
30
-68
-815
108
63
19,102
-3.4%
ESG Table 1.1.a Greenhouse gas emissions 
progress 
  
  
  
  
  
 
 
 
 
 
 
(mkg) 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
CO₂e scope 1+2 market-based 
695  
733  
751  
862  
946  
CO₂e reduction scope 1+2 (baseline: 2015) 
-29% 
-25% 
-24% 
-12% 
-4% 
CO₂e scope 3 from owner milk (kg) 
  1.12  
  1.15  
  1.15  
  1.15  
  1.14  
CO₂e scope 3 per kg of milk and whey (kg) 
  1.18  
  1.20  
  1.21  
  1.21  
  1.20  
CO₂e reduction scope 3 per kg milk and whey 
(baseline: 2015)¹ 
-9% 
-7% 
-7% 
-7% 
-7% 
¹ The calculation of CO₂e emissions in 2015 was based on national statistical data, the best available source at that time. In 2016, we 
started to do climate measurements on Arla farms and gradually replaced the national statistical data with Arla-specific data in the CO₂e 
calculation model. Read more on page 131. 
ESG Table 1.1.b Greenhouse gas emissions 
  
  
  
  
  
 
 
 
 
 
 
(mkg) 
2022² 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Production 
399  
368  
381  
366  
400  
Transport 
78  
79  
93  
97  
90  
CO₂e scope 1 
477  
447  
474  
463  
490  
 
 
 
 
 
 
CO₂e scope 2 – market-based 
218  
286  
277  
399  
456  
 
 
 
 
 
 
Milk 
  15,571  
  16,386  
  16,645  
  16,524  
  16,548  
Externally sourced whey 
  1,859  
  1,751  
  1,133  
  1,032  
  1,162  
Packaging 
444  
417  
396  
384  
383  
Purchased goods and services (category 1) 
  17,874  
  18,554  
  18,174  
  17,940  
  18,093  
Fuel and energy-related activities (category 3) 
177  
125  
120  
110  
108  
Upstream transport and distribution (category 4) 
346  
347  
306  
312  
326  
Waste generated in operations (category 5) 
10  
24  
25  
25  
26  
CO₂e scope 3³ 
  18,407  
  19,050  
  18,625  
  18,387  
  18,553  
Total CO₂e 
  19,102  
  19,783  
  19,376  
  19,249  
  19,499  
CO₂e Scope 2 – location-based 
165  
243  
237  
274  
263  
Total CO₂e – location-based 
  19,049  
  19,740  
  19,336  
  19,124  
  19,306  
²In 2022, the supplier of Arla’s emission factors was changed from Sphera to Quantis due to a supplier-initiated termination of emission 
factor services. Historical figures 2015-2021 were not adjusted. The impacts on CO₂e for 2021 using 2022 emission factors were: Pack-
aging (part of category 1): +43mkg, category 3: +16 mkg, category 4: +7mkg, category 5: -15mkg. 
³ Scope 3 emissions from categories 2, 6, 7, 8, 9, 12, 13 and 15 are immaterial to Arla’s scope 3 emissions and are therefore not included 
in the emission figures in ESG Table 1.1. The categories mentioned individually account for less than 0.6 per cent of the Arla’s scope 3 
emissions. Categories 10, 11 and 14 are not applicable to Arla due to the nature of the products and the Arla business model.

ENVIRONMENTAL DATA1.1 GREENHOUSE GAS EMISSIONS (CO2e)
 
 
Accounting policies 
Calculating CO₂ equivalents 
Greenhouse gases are gases that contribute to the warming of 
the climate by absorbing infrared radiation. Besides the widely 
known carbon dioxide (CO₂), there are two other major green-
house gases associated with dairy production: Methane (CH₄) 
and nitrous oxide (N₂O). In order to calculate Arla’s total green-
house gas emissions (the carbon footprint), different green-
house gas emissions are converted into carbon dioxide equiv-
alents (CO₂e). The conversion of different gases reflects their 
global warming potential.  
The potency of the different gases is taken into consideration 
according to the following calculations (based on the IPCC1 
Fifth Assessment Report, Climate Change 2013): 
1 kg of carbon dioxide (CO₂) = 1 kg of CO₂e 
1 kg of methane (CH₄) = 28 kg of CO₂e 
1 kg of nitrous oxide (N₂O) = 265 kg of CO₂e 
 
The majority of Arla’s emissions are methane from digestion 
and manure storage, nitrous oxide from fertiliser and manure 
usage. Greenhouse gas emissions are categorised into three 
scopes according to where they appear across the value chain, 
and what control the company has over them. 
 
 
Scope 1 – All direct emissions 
Scope 1 emissions relate to activities under the group’s con-
trol. This includes transport using Arla’s vehicles and direct 
emissions from Arla’s production facilities. Scope 1 emissions 
are calculated in accordance with the methodology set out in 
the GHG protocol by applying emission factors to Arla-specific 
activity data. 
 
 
 
Scope 2 – Indirect emissions 
Scope 2 emissions relate to the indirect emissions caused by 
Arla’s energy purchases, i.e. electricity or heat. Scope 2 emis-
sions are calculated in accordance with the methodology set 
out in the GHG protocol by applying emission factors to Arla-
specific activity data. 
In 2020, Arla switched from location-based scope 2 reporting 
to market-based reporting and updated the 2015 baseline. 
The market-based allocation approach reflects emissions from 
the specific electricity and other contractual instruments that 
Arla purchases, which may differ from the average electricity 
and other energy sources generated in a specific country. This 
gives Arla the chance to purchase electricity and other con-
tractual instruments that emit less greenhouse gases than the 
country average. In accordance with the GHG protocol, Arla 
discloses scope 2 emissions according to both the market and 
location-based method (also known as dual reporting). 
 
 
Scope 3 – Other indirect emissions 
Scope 3 emissions relate to emissions from sources that Arla 
does not directly own or control. They cover emissions from 
purchased goods and services (e.g. raw milk purchased from 
owners and contract farmers, whey, packaging and transport 
purchased from suppliers), but also waste processing from 
production sites. Scope 3 emissions are, in line with the GHG 
protocol, calculated by applying emission factors to Arla-spe-
cific activity data. 
Emissions from whey relates to externally purchased whey for 
Arla Foods Ingredients. Included whey is standardised and re-
calculated based on the milk solid content to consider the dif-
ference in quality and fractions purchased at Arla. The emis-
sion factor related to externally purchased whey was un-
changed at 1.0, a conservative estimate (Flysjö, 2012).  
Arla collects data from transport and packaging suppliers cov-
ering a minimum of 95 per cent of the spend, and based on 
the collected data, emissions are scaled up to cover 100 per 
cent. Biogenic emissions are not currently disclosed in the ESG 
section, but will be disclosed from 2023. For transport, pro-
duction and packaging emission factors are provided by  
Quantis, an industry-leading consultancy firm. The emission 
factors are updated annually to the most recent. Farm-level 
emission factors are obtained from 2.-0 LCA Consultants. For 
non-owner milk, emission factors were unchanged at 2015 
levels. 
 
 
 
1 The IPCC (Intergovernmental Panel on Climate Change) is the United Nations’ body 
for assessing the science related to climate change.

Scope 3 – Emissions on farm 
Scope 3 emissions from raw milk are calculated in accordance 
with the International Dairy Federation’s guideline for the car-
bon footprint of dairy products (IDF 2015). The tool used for 
calculating the carbon footprint from milk is based on an at-
tributional life-cycle assessment (LCA) that has been devel-
oped during the last decade in collaboration with 2.-0 LCA 
Consultants, a Danish consultancy firm formed by academics. 
For detailed descriptions of methodology, please refer to 
Schmidt and Dalgaard (2021). Farm-level emission factors are 
also obtained from 2.-0 LCA Consultants. Non-owner milk 
emissions are calculated by multiplying milk volume with 
emission factors based on national inventory data and not Arla 
specific data. The calculations are based on an earlier version 
of the farm tool following IDF 2010 (Dalgaard R, Schmidt J, Ce-
nian K, 2016). 
Emissions related to raw milk include emissions both on and 
off farm. The emissions relate to the cow’s digestion, feed pro-
duction and purchase, manure storage, energy usage, capital 
goods and peat soils. Emissions related to feed include ferti-
liser for home-grown feed and purchased feed, and transport 
of purchased feed. Manure storage can result in methane and 
nitrous oxide emissions. The amount of emissions varies de-
pending on how manure is covered and whether it is used for 
biogas production. Peat soils are wetland with a high CO₂e 
content. When soils are drained and used in crop production 
CO₂ and N₂O are released. The emission figure related to raw 
milk presented in this report is a weighted average emission 
per kg of milk, calculated based on validated climate data from 
farms where the data has been validated by external climate 
experts, multiplied by the fat and protein-adjusted milk intake. 
Farm data validated by external climate experts are statistically 
representative of all Arla farms.  
 
 
Uncertainties and estimates 
In 2022, 95 per cent of Arla’s active farmer owners, covering 
99 per cent of Arla’s owner milk volume, submitted a detailed 
Climate Check questionnaire (farmers receive an incentive of 
1.0 EUR-cent/kg of milk to complete the survey). Their an-
swers were validated by external climate experts. This report 
includes only externally validated data which in 2022 covered 
all farms who submitted a climate check. 
Farmer owners complete the Climate Check once a year based 
on data from their most recent financial year. This could vary 
from farm to farm, as some have financial years running from 
January to December, while others run from July to June. 
Therefore, the figures presented are not necessarily based on 
farm data covering the same period. The majority of data, 61 
per cent, relates to the period 1 January 2021 to 31 December 
2021 while 11 per cent relates to earlier periods.  
An uncertainty analysis has been carried out to understand the 
biggest areas of uncertainty related to self-reported farm 
emission data. The analysis was centred around four key lev-
ers: herd, feed, crops and manure handling, and addressed the 
parameters with the highest impact on the emissions on farm. 
The analysis concluded that data could be misstated, in worst 
case up to 10-12 per cent, but only if the farmer had a starting 
point of high emissions and claimed to change from no biogas 
treatment to full biogas treatment of slurry.  
Smaller farmers and farmers using extensive grazing systems 
are not always measuring the amount of feed that the cows 
eat or the dry matter content of the grass on the fields. To en-
able these farmers to report, the system contains a model 
which calculates feed consumption based on herd size and 
milk yield. 
Reporting on peat soils is a developing field and still subject to 
higher uncertainty than other areas. Due to its relatively high 
climate impact uncertainties related to peat soils could have 
significant impact on the total reported greenhouse gas 
figure. The risk of errors is minimised by external climate advi-
sors validating the data supported by automated statistical 
outlier controls. All outliers are flagged and need to be 
checked by the advisor before the result of the Climate Check 
is available. Numbers are only released for reporting after thor-
ough investigation. 
The methodology used to calculate emissions on farm is  
developing over time. Currently, factors that potentially could 
lower total net emissions, such as carbon sequestration on 
farm and direct land use change, are not included. IDF 2015 
suggests that direct land use change should be included in the  
calculations. 
The baseline year for our scope 3 Science Based Target is 
2015. To calculate the baseline as well as follow up on the re-
duction target, the same method and tool were used, but the 
type of data used differed. For the 2015 baseline, national sta-
tistical data for 2012 was used, which was the best available 
data at the time. From 2016, national statistics were gradually 
replaced by data from climate measurements at Arla farms. 
The change happened for Denmark, the UK and Sweden in 
2016, Germany in 2019 and the rest of the owner countries in 
2020. The reporting year 2020 was the first time when most 
Arla farms were included. The farm-specific data is always one 
to two years behind, which is why the 2022 reporting was 
based on farm data primarily from 2021. 
Other uncertainty relates to data collection regarding packag-
ing and transport from suppliers. Each quarter, Arla sends its 
suppliers detailed requests to provide the necessary data,  
accompanied by a manual on how to complete the related 
documentation. Manual data entries from different sources 
are clear risks to data quality. To minimise the risk of reporting 
errors, a rigorous two-step internal validation process is in 
place.  
 
 ENVIRONMENTAL DATA1.1 GREENHOUSE GAS EMISSIONS (CO2e)9%PEAT SOIL33%FEED PURCHASEDAND HOME-GROWN
Other emissions, 1%, include capital goods and destruction of animal remains. CH4CO2

Renewable electricity development 
In 2022, Arla set a target of using 100 per cent green electric-
ity in Europe by the end of 2025. Switching from fossil-based 
to renewable electricity is an important lever to fulfil Arla’s cli-
mate ambition and to reduce the carbon footprint from scope 
1 and 2 emissions by 63 per cent before 2030. 
A solid plan for reaching the 2025 target is in place. It includes 
a number of already entered power purchase agreements re-
lated to electricity produced from solar and wind energy 
across core markets in EU. Read more about the account 
treatment of power purchase agreement on page 77. 
The renewable electricity share increased to 62 per cent in 
2022 compared to 42 per cent last year. The increase was a 
result of a deliberate choice to purchase more renewable elec-
tricity certificates to cover negative CO₂ impact related to tem-
porary shift from natural gas to oil. The conversion from natu-
ral gas to oil was done as an emergency measure to ensure 
food delivery continuity and to lower dependency on natural 
gas in Europe. The company’s long-term ambition to transition 
from fossil-based energy to renewable energy was unaffected 
by the shift. Arla plans to revert back to using natural gas as 
soon as the situation allows. 
The renewable electricity included certificates related to self-
produced electricity from biogas, electricity certificates pur-
chased from farmer owners and open market certificates. 
 
Accounting policies 
Electricity used at Arla’s production sites and warehouses orig-
inates from different sources. At some sites, it is self-produced 
from biogas, biomass or natural gas while the majority of sites 
buy electricity from the grid. 
The renewable electricity share is calculated as the share of 
consumed electricity, both purchased and self-produced, that 
originates from renewable energy sources or renewable elec-
tricity certificates. 
The renewable electricity share follows the RE100 guidelines 
2022. Arla follows market-based accounting and account for 
the purchase of green electricity by contractual agreement, 
i.e. certificates. The renewable mix in the electricity not cov-
ered by certificates is calculated using a residual mix factor 
supplied by Quantis. 
Some Arla sites produce and sell excess electricity. The elec-
tricity sold was excluded from the calculation. The data pre-
sented in ESG Table 1.2 is registered monthly and primarily 
based on invoice information and automated meter readings 
at each site, and therefore there is very little uncertainty asso-
ciated with these figures.  
 
 
 
 
 
 ENVIRONMENTAL DATA1.2 RENEWABLE ELECTRICITY SHARE
ESG Table 1.2 Electricity consumption in Europe 
 
 
 
 
 
 
(thousand MWh) 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Non-renewable sources 
 401  
 613  
 605  
  
  
Renewable sources 
 638  
 416  
 428  
  
  
Total electricity consumed 
 1,039  
 1,029  
 1,033  
  
  
Renewable electricity share 
61% 
40% 
41% 
  
  
 
One way of securing green electricity for our operations is by 
buying Guarantees of Origin (GoO) certificates directly from our 
farmer owners. This will secure our farmers a better price for their
power and provide Arla access to additional certificates.

Solid waste development 
Waste that cannot be recovered through recycling, reuse or 
composting impacts the environment. Arla continuously seeks 
to increase production efficiency at sites, reduce waste 
throughout the production and transport process, as well as 
working with waste management suppliers to reduce waste 
and improve waste handling. 
In 2022, solid waste decreased to 31,460 tonnes compared to 
33,500 tonnes last year, mainly driven by lower volumes of 
waste for recycling in our sites in Germany and UK partly offset 
by increased waste for recycling and landfill at our production 
facility in Bahrain. Hazardous waste decreased to pre-COVID-
19 pandemic levels. 
Currently, Arla discloses only solid waste in ESG Table 1.3. 
which is only a small part of Arla’s total waste. Other waste 
types are product waste and sludge. Arla is working to further 
improve the food waste reporting accuracy and efficiency with 
the aim of including food waste in the ESG reporting. 
 
Accounting policies 
Solid waste is defined as materials from production which are 
no longer intended for their original use and which must be re-
covered (e.g. recycled, reused or composted) or not recovered 
(e.g. landfilled). This includes packaging waste, hazardous 
waste and other non-hazardous waste. 
 
Uncertainties and estimates 
Solid waste information is retrieved from external waste han-
dlers monthly. For Denmark and Sweden data collection is au-
tomated. For the other countries data is based on manual en-
tries by sites which increases the risk of errors. Relevant con-
trols are in place to mitigate the risk of errors. 
Water consumption development 
Providing access to clean water is an important part of Arla’s 
environmental ambition, and, as such, reducing water usage 
and enhancing water cleansing technologies at production 
sites is a key focus area. 
In 2022, water consumption in Arla decreased by 1 per cent 
compared to last year. The decreases were seen across the 
majority European sites partly offset by increases among the 
sites in International. The decrease can be explained partly by 
slightly lower production and also a shift in production mix. 
 
Accounting policies 
The water consumption covers all water purchased from exter-
nal suppliers and water from internal boreholes at production 
sites, warehouses and logistics terminals. External borehole 
water includes water purchased from external suppliers before 
internal treatment. Internal borehole water relates to bore-
holes on sites measured before internal treatment. 
 
Uncertainties and estimates 
Water consumption data is based on monthly manual input 
from sites. The externally purchased water is checked against 
supplier data, while internal borehole water is retrieved from 
manual meter readings. To mitigate the risk of manual errors, 
data goes through thorough internal validation at the site and 
centrally. 
 
 ENVIRONMENTAL DATA1.3 WASTEENVIRONMENTAL DATA1.4 WATER
ESG Table 1.4 water consumption 
  
  
  
  
  
 
 
 
 
 
 
(thousand m³) 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Water purchased externally 
  10,935  
  11,057  
  10,918  
  10,589  
  10,484  
Water from internal boreholes 
  7,829  
  7,803  
  7,745  
  7,470  
  7,600  
Total 
  18,764  
  18,860  
  18,663  
  18,059  
  18,084  
ESG Table 1.3 Solid waste 
  
  
  
  
  
 
 
 
 
 
 
(tonnes) 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Recycled waste 
  19,442  
  21,640  
  21,402  
  21,651  
  20,233  
Waste for incineration with energy recovery 
  8,358  
  8,679  
  8,991  
  10,011  
  12,546  
Waste for landfill 
  2,616  
  1,921  
  1,204  
988  
933  
Hazardous waste 
  1,034  
  1,260  
  1,378  
  1,063  
888  
Total 
  31,450  
  33,500  
  32,975  
  33,713  
  34,600

Animal welfare development 
Animal welfare is a key priority for Arla’s farmer owners, and for 
Arla as a company. Arla is committed to reporting on the most 
important measures to describe and improve animal welfare. 
The animal welfare KPIs include somatic cell count, which is a 
good indicator of disease and stress in cows, and four indica-
tors associated with the physical appearance and well-being of 
cows. The indicators are body condition, cleanliness, mobility 
and injuries. These indicators were developed based on scien-
tific research into the most common dairy cattle issues. 
Animal welfare on farm is externally audited at least once 
every three years by a world-leading quality assurance and au-
dit firm, SGS, specialising in animal welfare. The percentage of 
audited farms was 38 per cent in 2022, corresponding to 
3,170 audits. The results of the audit can trigger a follow-up 
audit either if there are major issues or if there are several mi-
nor issues. In case of repeated animal welfare breaches, Arla 
stops milk collection from the non-compliant farm, and, in 
rare, extreme cases, terminates the membership. During 
2020, the audit process was upgraded and harmonised across 
all owner countries to ensure that auditors follow the same 
procedures and standards everywhere. Therefore, only 2021-
2022 data is reported. 
The average somatic cell count across Arla geographies fell by 
4 per cent to 184 thousand cells/ml, the lowest level for more 
than six years. 
 
 
Accounting policies 
Somatic cell count (average): 
Somatic cells in milk are primarily white blood cells. An ele-
vated level of somatic cells can indicate inflammation (masti-
tis) of the cow’s udder, which causes the animal pain and 
stress, and also lowers milk quality. Arla monitors the somatic 
cell count (SCC) by analysing milk at bulk tank level each time 
milk is collected from the farms. Levels are continuously re-
ported to safeguard milk quality. The figure reported is a 
weighted average of Arla’s entire milk intake in a given year. 
The SCC count is received from several laboratories across 
owner countries. SCC above 300 reduces the milk price to the 
farmer, while an addition is given for SCC below 300. 
Audit on farms and animal-based indicators 
Animal welfare conditions on all Arla farms are regularly au-
dited. An audit entails a thorough check-up of the herd and 
the farm from all relevant animal welfare perspectives. Audits 
include basic audits (performed every three years), spot 
checks, start-up visits, attention and special attention audits. 
Audited farmers are defined as the percentage of owners who 
received at least one audit in 2022. One owner could poten-
tially receive more than one audit per year if the farmer owns 
more than one farm or if the farmer receives both a basic audit 
and a spot check audit. Follow-up audits are not included in 
the figure. 
Animal-based indicators evaluated by auditors 
The KPIs reported in Table 1.5 relate to the share of audited 
farmers with no major issues reported within each category. 
When an auditor visits the farm, a sample of the herd is se-
lected. The sample size varies with the herd size. The auditor 
scores the cows in the sample for the four core welfare indica-
tors on a scale of 0-2, where 0 means no issues identified, 1 
means minor issues and 2 means major issues. The results are 
reported to Arla. If the auditors find more than 5 per cent of 
the sampled cows too thin, more than 25 per cent too dirty, 
more than 15 per cent lame or more than 10 per cent injured, 
they report it as a major animal welfare incident to Arla. 
 
Uncertainties and estimates 
The UK somatic cell count includes the somatic cell count for 
contract farmers as well as owners, however this has no signifi-
cant impact on the total somatic cell count. 
Farms are audited every three years. A year-on-year compari-
son may therefore be affected due to the fact that it is not the 
same farms being audited every year. 
 
 
We measure the general well-being of the cows using four in-
dicators developed based on scientific research into the most 
common dairy cattle issues. 
 
 
 
 ENVIRONMENTAL DATA1.5 ANIMAL WELFARE
ESG Table 1.5 Animal welfare indicators 
 
 
 
 
 
 
 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Somatic cell count (thousand cells/ml) 
184  
 191  
 194  
 196  
 198  
Share of audited farmers with no major cleanliness issues 
98.6% 
98.4% 
- 
- 
- 
Share of audited farmers with no major mobility issues 
99.8% 
99.5% 
- 
- 
- 
Share of audited farmers with no major injury issues 
100.0% 
100.0% 
- 
- 
- 
Share of audited farmers with no major issues related to 
body condition 
99.9% 
99.8% 
- 
- 
- 
Ratios calculated based on 3,170 Arlagården® audits performed in 2022. 
Clean cows
Clean cows have
a lower risk of
being infected
by disease.
 
Mobile cows 
They walk 
without any 
problems and 
have no pain 
in their legs 
and hooves. 
 
Cows without injuries
An injury on a cow
can be a lump, bump,
ulcer or sore.
Cows with good 
body conditions 
Fit cows have the 
perfect amount of fat 
reserve on their bod-
ies: not too little and 
not too much

FTE development 
People are crucial to Arla’s success, so it is imperative to know 
how the group deploys these resources across geographies 
and time. The total number of full-time equivalents (FTEs) in-
creased by 1.4 per cent compared to last year. The increase 
was due to investments in Arla Foods Ingredients, continued 
insourcing of IT activities and ramp-up in the agriculture ser-
vice and sustainability area. 
Over the last five years, the FTE level increased on average  
2 per cent per year. The numbers show a shift from core  
European markets to Poland and international markets (in-
cluded in “other countries” in Table 2.1), especially to MENA. 
This supports Arla’s strategic plan to expand the share of busi-
ness outside Europe, where the outlook for growth is more 
promising. 
The share of blue-collar FTEs amounted to 63 per cent of the 
total FTEs as at 31 December 2022. 
 
Accounting policies 
FTEs are defined as the contractual working hours of an em-
ployee compared to a full-time contract in the same position 
and country. The full-time equivalent figure is used to meas-
ure the active workforce counted in full-time positions. An FTE 
of 1.0 is equivalent to a full-time worker, while an FTE of 0.5 
equals half of the full workload. 
The average FTE figure reported in Note 1.2 in the consoli-
dated financial statements, and in ESG Note 2.1 is calculated 
as an average figure for each legal entity during the year based 
on quarterly measurements taken at the end of each quarter. 
All employees are included in the FTE figure, including em-
ployees who are on permanent and temporary contracts. 
Employees on long-term leave, e.g. maternity leave or long-
term sick leave, are excluded. 
The majority of employees in production and logistics are clas-
sified as blue-collar employees, while employees in sales and 
administrative functions are classified as white-collar employ-
ees. The ratio of white-collar to blue-collar employees is calcu-
lated based on FTEs as at 31 December. 
Employee data is handled centrally in accordance with GDPR. 
The FTE figure is reported internally on a monthly basis. To  
improve data quality, data is validated by each legal entity on  
a quarterly basis. 
 
 
 SOCIAL DATA2.1 FULL-TIME EQUIVALENTS
ESG Table 2.1 Full-time equivalents 
  
  
  
  
  
 
 
 
 
 
 
 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Denmark 
 7,763  
 7,565  
 7,350  
 7,258  
 7,264  
UK 
 3,605  
 3,616  
 3,761  
 3,407  
 3,387  
Sweden 
 3,038  
 3,076  
 3,114  
 2,977  
 3,001  
Germany 
 1,570  
 1,590  
 1,632  
 1,681  
 1,759  
Saudi Arabia 
 975  
 974  
 970  
 952  
 965  
Poland 
 617  
 582  
 529  
 511  
 463  
North America 
 536  
 501  
 479  
 477  
 502  
UAE 
 437  
 421  
 300  
 207  
 192  
Finland 
 373  
 364  
 336  
 319  
 325  
The Netherlands 
 370  
 349  
 351  
 339  
 327  
Bahrain 
 315  
 252  
 126  
70  
  - 
Other countries¹ 
 1,308  
 1,327  
 1,072  
 976  
 1,005  
Full-time equivalents 
 20,907  
 20,617  
 20,020  
 19,174  
 19,190  
¹ Other countries include, among others, Belgium, Oman, Spain, Nigeria, France, Australia.

Gender diversity development 
A diverse workforce is key to Arla’s success. Arla’s policies do 
not distinguish between men and women when it comes to 
promotion opportunities or remuneration, however women 
are underrepresented in Arla’s blue-collar workforce and, to a 
lesser extent, in the white-collar workforce as well. 
Arla’s goal is to create a workplace with a diverse workforce in 
all managerial levels promoting equal opportunities regardless 
of background, culture, religion, gender etc. Diversity, inclu-
sion and anti-harassment policies are in place to handle issues 
in a structured manner and a whistle-blower platform enables 
employees to report any kind of harassment. Work councils at 
both local and global levels also help to ensure that workplace 
decisions are made in the best interests of all colleagues and 
Arla. Read more about diversity and inclusion in Arla on  
page 51. 
Gender diversity for the Board of Directors is disclosed in ESG 
Note 3.1. 
Gender diversity (all employees) 
In 2022, the share of women among all FTEs remained un-
changed from last year at 27 per cent. Read more about how 
Arla works with diversity on page 51. 
Gender diversity  
(Level below Executive Management Team) 
In 2022, 28 per cent of positions at the level below the Execu-
tive Management Team were held by women. The number  
increased slightly compared to 26 per cent in 2021, but more 
significantly compared to 17 per cent in 2018. 
Gender diversity (in Executive Management Team)  
In 2022, 13 per cent of the Executive Management Team 
members were women. The number of women remained  
unchanged compared to last year, however an additional 
member, Executive Vice president Marketing and Innovation, 
was added to the EMT during 2022. Since the position was 
filled by a man, the share of women was slightly lower in 2022 
compared to 2021. Read about gender diversity in Board of 
Directors on page 140. 
 
Accounting policies 
Gender diversity (all employees) 
Gender diversity is defined as the share of women compared 
to total FTEs. Gender diversity is based on FTEs as at  
31 December 2022. It covers all white-collar and blue-collar 
employees. 
Gender diversity 
(Level below Executive Management Team) 
Arla’s gender diversity in management is defined as the share 
of women measured as FTEs in the level below the executive 
management team at 31 December 2022. 
Gender diversity (in Executive Management Team)  
Gender diversity in management is defined as the share of 
women in the Executive Management Team (EMT) as at  
31 December 2022. 
 
 SOCIAL DATA2.2 GENDER DIVERSITY
ESG Table 2.2.a Gender diversity for all employees 
 
 
 
 
 
 
 
 
 
 
 
(All employees) 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Total share of women 
27% 
27% 
27% 
27% 
27% 
 
 
 
 
 
 
 
 
 
 
 
 
ESG Table 2.2.b Gender diversity in management 
 
 
 
 
 
(Diversity in management) 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Share of women at level below Executive Management Team 
28% 
26% 
15% 
13% 
17% 
 
 
 
 
 
 
 
 
 
 
 
 
ESG Table 2.2.c Gender diversity in Executive Management Team 
(Diversity in executive management) 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Share of women in Executive Management Team (EMT) 
13% 
14% 
14% 
29% 
29%

Gender pay ratio development 
Paying equal salaries for the same job regardless of gender is a 
basic requirement for an ethical and responsible company. At 
Arla, men and women in the same or equivalent jobs receive 
the same level of pay. This is ensured through well-defined 
and fixed salary bands across all job categories. Comparability 
between salary levels for men and women are monitored 
quarterly within the comparable job bands. 
Gender pay ratio disclosed in Table 2.3 indicates where 
women are placed in the company hierarchy. Arla targets com-
plete equitable treatment between genders, which would be 
represented by a gender pay ratio of 1.0. In 2022, the median 
salary for men at Arla was 3 per cent higher than the median 
salary for women, unchanged compared to last year. 
 
Accounting policies 
The gender pay ratio is defined as the median salary for men 
divided by the median salary for women. The salary used in the 
calculation includes contractual base salaries, while pensions 
and other benefits are not included. 
 
Uncertainties and estimates 
The ESG reporting guidelines issued by CFA Society Denmark 
and Nasdaq recommend including the total workforce as well 
as bonus and pension in the equation. However, due to data 
limitations only, the gender pay ratio for the white-collar work-
force is included. It is estimated that including blue-collar em-
ployees in the gender pay ratio would reduce the gap, as 
males are overrepresented in the blue-collar workforce. The 
pay data used relates to contractual salary amounts end of 
March 2022 after 2022 salary adjustment. 
 
 
 
Employee turnover development 
Attracting and retaining the right people is imperative to the 
success of Arla’s business. Employee turnover shows the fluc-
tuation in the workforce. Arla aims for a stable turnover and 
recognises that some turnover is needed to remain competi-
tive and innovative. 
Employee turnover was largely unchanged compared to last 
year with a total turnover of 14 per cent compared to 13 per 
cent last year. The voluntary turnover was stable at 10 per 
cent, while involuntary turnover was slightly up, ending at 4 
per cent compared to 3 per cent last year. Looking at a five-
year period the levels in 2022 and 2021 was higher than prior 
years, likely impacted by labour shortage in some areas of Eu-
rope. 
 
Accounting policies 
Turnover is broken down by voluntary turnover (i.e. the em-
ployee decides to leave the company) and involuntary turno-
ver (i.e. the employee is dismissed). With such differentiation, 
turnover is an indicator of talent retention at Arla and also  
indicates the efficiency of operations. 
Employee turnover is calculated as the ratio of total employ-
ees leaving to the total number of employees in the same  
period. The figure refers to the number of employees and  
not to FTE. 
Turnover is calculated for all employees on a permanent con-
tract and includes several reasons for their departure, such as 
retirement, dismissal and resignation. Departures are only in-
cluded in the calculation from the month when remuneration 
is no longer paid (e.g. some tenured employees may be enti-
tled to remuneration for a few months after their dismissal). 
 
 SOCIAL DATA2.3 GENDER PAY RATIOSOCIAL DATA2.4 EMPLOYEE TURNOVER
ESG Table 2.4 Employee turnover 
 
 
 
 
 
 
 
 
 
 
 
 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Voluntary turnover 
10% 
10% 
6% 
8% 
8% 
Involuntary turnover 
4% 
3% 
4% 
4% 
4% 
Total 
14% 
13% 
10% 
12% 
12% 
ESG Table 2.3 Gender pay ratio 
 
 
 
 
 
 
 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Gender pay ratio (hierarchy variances) 
  1.03  
1.03 
1.05 
1.05 
1.06

Product recalls 
As a global food company, food safety is key to Arla.  
A core responsibility for Arla is to ensure that products are safe 
for consumers to eat and drink, and that the content of the 
product is clearly and appropriately labelled on the packaging. 
Food safety is also one of the most important indicators to-
wards consumers, signalling that Arla’s products are produced 
and labelled according to the highest quality standards. 
In 2022, one public recall occurred. The recall related to qual-
ity and sensory issues in one batch of UHT baby milk. The issue 
was assessed to not cause any food safety risk, however due to 
the sensitivity of the consumer group, the batch was recalled.  
Arla is dedicated to ensuring that its products are safe to con-
sume and works continuously across the value chain, includ-
ing with suppliers, to reduce the number of recalls to as close 
to zero as possible. All product incidents must be dealt with in 
a timely manner to ensure the safety of consumers as well as 
the legality and quality of products. The handling of all public 
recall incidents follows a detailed and standardised process. 
Product incident management is also tested annually. 
 
Accounting policies 
In accordance with ESG reporting standards, product recalls 
are defined as public recalls. A public recall is the action taken 
when products pose a material food safety, legal or brand  
integrity risk. Public recall is only relevant if products are avail-
able to the consumers in the marketplace. 
Public recalls are reported as soon as they happen, and an  
incident report must be completed about each incident within 
two weekdays from the first notice of the problem.  
The total number of public recalls is reported externally on  
an annual basis. 
 
 
 
Accident frequency rate development 
Arla has a comprehensive and complex value chain and offers 
a large variety of jobs across geographies. Employees are key 
to the success of Arla, and it is key to provide all employees 
with safe and healthy working conditions. Arla is committed to 
preventing accidents, injuries and work-related illnesses.  
A systematic approach to target-setting and tracking is applied 
to mitigate risks and reduce problems in an ongoing close col-
laboration with employees across the organisation. Accidents 
resulting in injuries can be lost-time accidents (LTAs) as well as 
non-lost-time accidents (minor). The number of LTAs per 1 
million working hours increased slightly to 4.4 compared to 
4.3 last year. An increase in the accident frequency rate is 
seen across production sites in Denmark, UK and Germany off-
set by a decrease in the transport area in Germany and Swe-
den. 
Sadly, one fatality occurred at one of our Danish transport cen-
tres in 2022. The incident was investigated by Arla and author-
ities, and measures were taken to prevent it from happening 
again. 
 
Accounting policies 
An LTA is a workplace injury sustained by an employee while 
completing work activities that result in the loss of one or 
more days off from work on scheduled working days/shifts. An 
accident is considered a lost-time accident only when the em-
ployee is unable to perform the regular duties of the job, takes 
time off for recovery, or is assigned modified work duties for 
the recovery period. 
All employees – both Arla employees and external agency 
workers undertaking an Arla job – sustaining injury or illness 
related to the workplace are required to report it to their team 
leader or manager as soon as reasonably practical, regardless 
of severity. Accidents related to contractors, e.g., construction 
workers are not included. 
Most site employees have access to a mobile application 
where they can quickly and easily report any accidents. Notifi-
cation must be done prior to the injured party leaving work. 
Working hours, used to calculate the accident frequency ratio, 
origin partly from payroll information and partly from esti-
mates using FTE numbers. 
 
 SOCIAL DATA2.5 FOOD SAFETY –NUMBER OF PRODUCT RECALLSSOCIAL DATA2.6 ACCIDENTS
ESG Table 2.5 Recalls 
 
 
 
 
 
 
 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Number of recalls 
1  
- 
1  
4  
2  
ESG Table 2.6 Accidents 
 
 
 
 
 
 
(Per 1 million working hours) 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Accident frequency 
  4.4  
  4.3  
  5.2  
  6.0  
  7.9

BoD diversity development 
Gender diversity on the Board of Directors is important, partly 
to ensure that both genders are represented at a high level, 
and partly to bring a variety of perspectives to the business. 
Ensuring gender diversity on the Board of Directors is also a 
legal requirement in Denmark. The current Board of Directors 
consists of 19 members, including 14 farmer owners, three 
employee representatives and two external members.  
In accordance with section 99.b of the Danish Financial State-
ments Act, only members elected by the Board of Representa-
tives at the general assembly count in the Board of Directors 
gender diversity figure. The members elected by the Board of 
Representatives are the 14 owner representatives and two  
external members. Four of these 16 Board of Representatives 
elected board members are women, reflecting a ratio in  
2022 of 25 per cent women and 75 per cent men. The ratio 
changed significantly compared to last year as a result of the 
external members becoming elected members during 2022 
and also by reducing the number of owner representatives 
from 15 to 14. 
In 2022, Arla reached the target of achieving at least 20 per 
cent women in the Board of Directors. A new target for the 
2026 strategy will be set during 2023. 
 
Accounting policies 
The gender diversity ratio is calculated as the share of women 
on the board as at 31 December. It includes only members of 
the Board of Directors elected by the general meeting and  
excludes employee representatives and advisors to the Board 
of Directors. 
 
 
 
 
Meeting attendance development 
Attendance at the board meetings by the members of the 
Board of Directors ensures that all Arla’s owners and employ-
ees are represented when important strategic decisions are 
made. Arla’s board members are very dedicated, and as a gen-
eral rule all board members attend all meetings unless they 
are prevented from doing so due to health reasons. 
In 2022, there were 12 ordinary board meetings and four extra 
ordinary meetings. The board attendance remained at the 
same level as last year. Information on board members can be 
found on page 59-60. 
 
Accounting policies 
The board meeting attendance ratio is calculated as the sum 
of regular board meetings attended per board member and 
the total possible attendance. 
The current Board of Directors consists of 14 owners, three 
employee representatives and two external members. When 
calculating board meeting attendance, all 19 board members 
are included. 
 
 
 
 GOVERNANCE DATA3.1 GENDER DIVERSITY –BOARD OF DIRECTORSGOVERNANCE DATA3.2 BOARD MEETING ATTENDANCE
ESG Table 3.2 Board meeting attendance 
 
 
 
 
 
 
 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Number of meetings 
12  
12  
10  
10  
13  
Attendance 
98% 
98% 
99% 
96% 
99% 
ESG Table 3.1 Gender diversity on Board of Directors 
 
 
 
 
 
 
 
2022 
2021 
2020 
2019 
2018 
 
 
 
 
 
 
Share of women on the Board of Directors 
25% 
13% 
13% 
13% 
13%

Basis for preparation 
The environmental, social and governance (ESG) statement is 
based on ongoing monthly and annual reporting procedures. 
The consolidation principles are based on operational control 
unless described separately in the definition section of each 
ESG note. All reported data follows the same reporting period 
as the consolidated financial statements. 
Materiality 
When presenting the ESG report, management focuses  
on presenting information that is considered of material  
importance to Arla’s stakeholders, or which is recommended 
to be reported by relevant professional groups or authorities. 
Arla’s materiality assessment was last updated in 2021 and  is 
based on the concept of double materiality. This means that 
both impact materiality and financial materiality is being evalu-
ated. The materiality assessment will be updated in the com-
ing years to comply with Corporate Sustainability Reporting Di-
rective (CSRD) in 2025. 
Each topic in the materiality matrix (see graphic) represents a 
wider agenda and underlying issues, which are identified from 
relevant ESG/sustainability frameworks, and qualified through 
insights from Arla’s strategy process. Based on input from dif-
ferent expert groups within the Arla value chain, a draft matrix 
was prepared and sent out to a wider group of selected exter-
nal and internal stakeholders for further comments and dia-
logue. The external stakeholders include top 20 customers, 
elected farmer owners, NGOs and financial institutions in  
Denmark, Sweden, the UK and Central Europe.  
The 2021 update showed that food safety is still the top prior-
ity for both external and internal stakeholders. Other areas, 
which are still highly prioritised are animal care and green-
house gas emissions. 
The topics highlighted as material according to the materiality 
assessments are widely addressed throughout the annual re-
port. The figures disclosed in the consolidated ESG data sec-
tion were chosen based on the materiality analysis, but also 
consider the maturity of data to ensure high data quality on 
each KPI. In some cases, it was concluded that current data 
tracking or collection capabilities do not provide sufficient 
data quality to satisfy disclosure to the highest standards, de-
spite the fact that the figures could be of material importance 
to stakeholders. In these cases, e.g. recyclability in packaging, 
the necessary steps to improve data tracking and collection 
have been initiated. In the coming years, plans are to widen 
the scope of reporting to fully comply with best practice in 
ESG reporting. 
Reporting scope 
Environmental KPIs (Notes 1.1-1.4) included data from all pro-
duction and logistical sites. This, together with milk, external 
waste handling, external transport and packaging cover all ma-
terial activities in Arla’s value chain. The environmental 
impact related to offices, business travel and other less mate-
rial activities was not included in the total emission figure. This 
scope also applies to the accident KPI, Note 2.6, however  
accidents at head offices in Denmark, the UK, Sweden and 
Germany were also included. 
Restatement principles 
In line with ESG reporting guidelines, environmental data is 
presented in absolute figures to ensure comparability. Where 
relevant, a measure for progress towards Arla’s previously 
communicated internal targets is included. Baselines and 
comparison figures are restated according to Arla’s restate-
ment policy. By default, Arla’s baseline emissions are reviewed 
every five years from the target base year (2020, 2025, 2030), 
if no significant structural or methodological changes trigger a 
recalculation before. Every five years, Arla assesses if the 
structural changes (e.g. acquisitions or divestments) in the 
past years reach the significance threshold when added to-
gether in a cumulative manner. Each year, Arla assesses if the 
structural changes that year reach the significance threshold 
(see below) by themselves or when added together. 
A threshold is defined for each Science Based Target: 
· Scope 1 and 2: 5 per cent change compared to the  
base year 
· Scope 3 per kg of raw milk: 3 per cent change compared to 
the base year 
 
When the baseline emissions are recalculated due to signifi-
cant structural changes in the company (as defined above), 
historic figures are also recalculated and reported alongside 
the non-recalculated (actual) historic emission figures. This 
provides the reader with more clarity to understand Arla’s ac-
tual emissions each year. Other externally reported ESG KPIs 
are only restated if material mistakes in the previous years’  
reporting are discovered. The materiality of mistakes is deter-
mined on a case-by-case basis. 
 
 GOVERNANCE DATA3.3 GENERAL ACCOUNTING POLICIES
Essential 
 
 
 
 
High 
 
 
 
 
Medium 
 
 
 
 
Low 
 
 
 
 
 Low 
Medium 
High 
Essential 
 IMPORTANCE TO ARLA
 
Food 
Safety 
Animal Care 
Greenhouse 
gas emissions 
Biodiversity & nature 
Product 
innovation 
Healthy Foods 
Transparent & accountable 
business 
Respect Human rights 
Farmer development 
Safe & Healthy 
work 
Digitalisation 
Attractive employer 
Supply chain efficiency 

Affordable 
Food 
Natural products 
incl. organic 

Packaging 
Air pollution 
Responsible sourcing 
Healthy soils 
Waste 
Diversity  
& Inclusion 
Water availability 
and quality on farms 
Water availability and 
quality on diary sites 
Innovation 
Local community 
engagement 
Product information 
supp. Informed 
choices MATERIALITY ANALYSIS

FIVE-YEAR OVERVIEW
 
 
 
 
 
 
ESG note 
2022 
2021 
2020 
2019 
2018 
Environmental data 
  
  
  
  
  
  
CO₂e emissions 
  
  
  
  
  
  
CO₂e scope 1 and 2 market-based 
  
695  
733  
751  
862  
946  
CO₂e reduction scope 1 and 2 (baseline: 
2015) 
  
-29% 
-25% 
-24% 
-12% 
-4% 
CO₂e scope 3 owner milk (kg) 
  
  1.12  
  1.15  
  1.15  
  1.15  
  1.14  
CO₂e scope 3 per kg of milk and whey (kg) 
  
  1.18  
  1.20  
  1.21  
  1.21  
  1.20  
CO₂e reduction scope 3 per kg of milk and 
whey (baseline: 2015)¹ 
  
-9% 
-7% 
-7% 
-7% 
-7% 
 
  
  
  
  
  
  
CO₂e scope 1 (mkg) 
  
477  
447  
474  
463  
490  
CO₂e Scope 2 – market-based (mkg) 
  
218  
286  
277  
399  
456  
CO₂e scope 3 (mkg) 
  
  18,407  
  19,050  
  18,625  
  18,387  
  18,553  
Total CO₂e (mkg) 
1.1 
  19,102  
  19,783  
  19,376  
  19,249  
  19,499  
CO₂e scope 2 – location-based (mkg) 
  
165  
243  
237  
274  
263  
Total CO₂e – location-based (mkg) 
  
  19,049  
  19,740  
  19,336  
  19,124  
  19,306  
Energy mix 
  
  
  
  
  
  
Renewable electricity share EU (%) 
1.2 
61% 
40% 
41% 
  
  
Waste and water 
  
  
  
  
  
  
Solid waste (tonnes) 
1.3 
  31,450  
  33,500  
  32,975  
  33,713  
  34,600  
Water consumption (thousand m3) 
1.4 
  18,764  
  18,860  
  18,663  
  18,059  
  18,084  
Animal welfare 
  
  
  
  
  
  
Somatic cell count (thousand cells/ml) 
1.5 
184  
191  
194  
196  
198  
Share of audited farmers with no major cleanli-
ness issues 
1.5 
98.6% 
98.4% 
- 
- 
- 
Share of audited farmers with no major mobility 
issues 
1.5 
99.8% 
99.5% 
- 
- 
- 
Share of audited farmers with no major 
injury issues 
1.5 
100.0% 
100.0% 
- 
- 
- 
Share of audited farmers with no major body 
condition issues 
1.5 
99.9% 
99.8% 
- 
- 
- 
 
ESG note 
2022 
2021 
2020 
2019 
2018 
Social data 
  
  
  
  
  
  
Full-time equivalents (average) 
2.1 
  20,907  
  20,617  
  20,020  
  19,174  
  19,190  
Total share of women (%) 
2.2 
27% 
27% 
27% 
27% 
27% 
Share of women at level below Executive Man-
agement Team (%) 
2.2 
28% 
26% 
15% 
13% 
17% 
Share of women in Executive Management 
Team (%) 
2.2 
13% 
14% 
14% 
29% 
29% 
Gender pay ratio (hierarchy variances) 
2.3 
  1.03  
1.03 
1.05 
1.05 
1.06 
Employee turnover (%) 
2.4 
14% 
13% 
10% 
12% 
12% 
Food safety – number of recalls 
2.5 
1  
  - 
1  
4  
2  
Accident frequency (per 1 million working hours) 
2.6 
  4.4  
  4.3  
  5.2  
  6.0  
  7.9  
Governance data 
  
  
  
  
  
  
Share of women, Board of Directors (%)² 
3.1 
25% 
13% 
13% 
13% 
13% 
Board meeting attendance (%) 
3.2 
98% 
98% 
99% 
96% 
99% 
¹ The calculation of CO₂e emissions in 2015 was based on national statistical data, the best available source at that time. In 2016 we 
started to do climate measurements on Arla farms and gradually replaced the national statistical data with Arla specific data in the CO₂e 
calculation model. Read more on page 131.

In 2022, Arla started to implement TCFD into its reporting and 
risk assessment practices. In the first phase of implementation 
Arla focused on integrating climate-related risk assessment 
and management into the company’s existing enterprise risk 
management framework, and report on the results of the risk 
assessment. Arla also conducted a high-level analyses of the 
potential financial impact of climate-related risks. Read more 
in Introduction to notes on page 77. 
 
 
 
 
 
 TASK FORCE FOR CLIMATE-RELATED DISCLOSURES (TCFD) 
Table TCFD overview 
 
Section and page reference 
Governance - TCFD recommendations 
 
Describe the organisation’s governance around climate-related 
risks and opportunities 
Risks and Opportunities, page 27; Governance, page 56 
Describe management’s role in assessing and managing climate-
related risks and opportunities 
Risks and Opportunities, page 27; Governance, page 56 
 
 
Strategy - TCFD recommendations 
 
Describe the climate-related risks and opportunities the organi-
sation has identified over the short, medium and long term 
Risks and Opportunities, page 27 
Describe the impact of climate-related risks and opportunities on 
the organisation’s businesses, strategy and financial planning 
Risks and Opportunities, Page 27; Financial Statements, page 77 
Describe the resilience of the organisation’s strategy, taking into 
consideration different climate-related scenarios, including a 
2°C or lower scenario 
Scenario analyses to be added in the next phase of TCFD  
implementation. 
 
 
Risk management - TCFD recommendations 
 
Describe the organisation’s processes for identifying and as-
sessing climate-related risks 
Risks and Opportunities, page 27 
Describe the organisation’s processes for managing climate-re-
lated risks 
Risks and Opportunities, page 27 
Describe how processes for identifying, assessing, and managing 
climate-related risks are integrated into the organisation’s over-
all risk management 
Risks and Opportunities, page 27 
 
 
Metrics and targets - TCFD recommendations 
 
Disclose the metrics used by the organisation to assess climate-
related risks and opportunities in line with its strategy and risk 
management process 
ESG statements, page 130 
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 green-
house gas (GHG) emissions and related risks 
ESG statements, page 130 
Describe the targets used by the organisation to manage  
climate-related risks and opportunities and performance against 
targets 
ESG statements, page 129

OUR PROGRESS TOWARDS THE UN SUSTAINABLE DEVELOPMENTGOALS
 
 
 
Reference 
UN SDGs 
Environmental data 
  
 
CO₂e emissions 
  
2.3, 2.4, 12.2, 12.3,  
12.5, 13.1 
CO₂e reduction scope 1 and 2 (baseline: 2015) 
  
 
CO₂e reduction scope 3 per kg of milk and whey (baseline: 2015)1 
  
 
Total CO₂e (mkg) 
ESG note 1.1 
 
Energy mix 
  
 
Renewable electricity share EU (%) 
ESG note 1.2 
7.2, 7.3  
Waste and water 
  
6.3, 6.4 
Solid waste (tonnes) 
ESG note 1.3 
 
Water consumption (thousand m3) 
ESG note 1.4 
 
Animal welfare 
  
15.1 
Somatic cell count (thousand cells/ml) 
ESG note 1.5 
 
Share of audited farmers with no major cleanliness issues 
ESG note 1.5 
 
Share of audited farmers with no major mobility issues 
ESG note 1.5 
 
Share of audited farmers with no major injury issues 
ESG note 1.5 
 
Share of audited farmers with no major body condition issues 
ESG note 1.5 
 
 
Reference 
UN SDGs 
Social data 
  
 
Total share of women (%) 
ESG note 2.2 
5.1, 5.5 
Share of women at level below Executive Management Team (%) 
ESG note 2.2 
5.1, 5.5 
Share of women in Executive Management Team (%) 
ESG note 2.2 
5.1, 5.5 
Gender pay ratio, white-collar (man to woman) 
ESG note 2.3 
5.1, 5.5, 8.5, 8.7 
Employee turnover (%) 
ESG note 2.4 
8.5, 8.7 
Food safety – number of recalls 
ESG note 2.5 
2.1 
Accident frequency (per 1 million working hours) 
ESG note 2.6 
8.8 
Governance data 
  
 
Share of women, Board of Directors (%)* 
ESG note 3.1 
5.1, 5.5 
 
 
Non-audited targets and ambitions 
 
 
Nutrition and affordability 
Page 48 
2.1, 3.4 
Supporting communities – International dairy development 
Page 55 
23., 2.A, 5A, 8.2, 8.3,  
12.2, 17.B 
Responsible sourcing 
Page 44 
2.3, 2.4, 6.3, 6.4, 8.7, 8.8, 
12.2, 12.4, 13.1, 15.1, 15.2 
Anti-corruption and bribery 
Page 65 
16.5

UN GLOBAL COMPACT
 
 
 
 
 
 
 
 
 
 
 
Since 2008, Arla has been a participant of the Global Com-
pact’s Nordic Network. In May 2009, Arla signed up to Caring 
for Climate, a voluntary and complementary action platform 
seeking to demonstrate leadership around the issue of climate 
change. In 2010, Arla’s CEO signed a CEO Statement of Sup-
port for the Women’s Empowerment Principles, an initiative 
from the Global Compact and UNIFEM (the UN Development 
Fund for Women). Read more about the Global Compact and 
its principles at www.unglobalcompact.org and more about 
Arla’s Code of Conduct at arla.com. 
 
 IN EARLY 2008, ARLA SIGNED UP TO THE GLOBAL COMPACT, THE UN INITIATIVE TO PROMOTE ETHICAL BUSINESS PRACTICES. AS A PARTICIPANT, WE ARE COMMITTED TO OBSERVING THE GLOBAL COMPACT’S 10 FUNDAMENTAL PRINCIPLES. 
Human rights 
1. 
Support and respect the protection of internationally proclaimed human rights 
2. 
Make sure that they are not complicit in human rights abuses 
Labour 
3. 
Uphold the freedom of association and the effective recognition of the right to collective bargaining 
4. 
The elimination of all forms of forced and compulsory labour 
5. 
The effective abolition of child labour 
6. 
The elimination of discrimination in respect of employment and occupation 
Environment 
7. 
Support a precautionary approach to environmental challenges 
8. 
Undertake initiatives to promote greater environmental responsibility 
9. 
Encourage the development and diffusion of environmentally friendly technologies 
Anti-corruption 
10. Work against corruption in all its forms, including extortion and bribery

INDEPENDENT AUDITOR’S REASONABLE ASSURANCE REPORT ON ESG DATA CONTAINED IN ARLA FOODS AMBA’S ANNUAL REPORT
 TO THE STAKEHOLDERS OF ARLA FOODS AMBA
As agreed, we have performed a reasonable assurance  
engagement, as defined by the International Standards on  
Assurance Engagements, on the environmental, social and 
governance (ESG) data, contained in Arla Foods Amba’s Annual 
Report on pages 128-145 for the period from 1 January 2022 
to 31 December 2022. 
In preparing the environmental, social and governance (ESG) 
data, Arla Foods Amba’s applied the Accounting Policies  
described on pages 131-141. The environmental, social and 
governance (ESG) data needs to be read and understood to-
gether with the Accounting Policies, which management is 
solely responsible for selecting and applying. The absence of 
an established practice on which to derive, evaluate and meas-
ure the environmental, social and governance (ESG) data al-
lows for different, but acceptable, measurement techniques 
and can affect comparability between entities and over time. 
Other than as described in the preceding paragraph, which 
sets out the scope of our engagement, we did not perform as-
surance procedures on the remaining information included in 
the Annual Report, and, accordingly, we do not express an 
opinion on this information.  
Management’s responsibilities  
Arla Foods Amba’s Management is responsible for selecting 
the Accounting Policies, and for presenting the environmen-
tal, social and governance (ESG) data in accordance with the 
Accounting Policies, in all material respects. This responsibility 
includes establishing and maintaining internal controls, main-
taining adequate records and making estimates that are rele-
vant to the preparation of the environmental, social and gov-
ernance (ESG) data, such that it is free from material misstate-
ment, whether due to fraud or error. 
Auditor’s responsibilities 
Our responsibility is to express a conclusion based on our ex-
aminations on the presentation of the environmental, social 
and governance (ESG) data in accordance with the scope de-
fined above. 
We conducted our examinations in accordance with ISAE 
3000 Assurance Engagements Other than Audits or Reviews 
of Historical Financial Information and additional requirements 
under Danish audit regulation to obtain reasonable assurance 
for the purposes of our conclusion.  
EY Godkendt Revisionspartnerselskab is subject to Interna-
tional Standard on Quality Control (ISQC) 1 and thus uses a 
comprehensive quality control system, documented policies 
and procedures regarding compliance with ethical require-
ments, professional standards, applicable requirements in 
Danish law and other regulations. 
We have complied with the independence and other ethical 
requirements of the International Ethics Standards Board for 
Accountants’ International Code of Ethics for Professional  
Accountants issued by the International Ethics Standards 
Board for Accountants (IESBA Code), which is founded on fun-
damental principles of integrity, objectivity, professional com-
petence and due care, confidentiality and professional behav-
iour as well as ethical requirements applicable in Denmark. 
Description of procedures performed 
In obtaining reasonable assurance over the environmental, so-
cial and governance (ESG) data identified on pages 128-145, 
our objective was to perform such procedures as to obtain in-
formation and explanations which we consider necessary in 
order to provide us with sufficient appropriate evidence to  
express an opinion with reasonable assurance. 
As part of our examination, we have performed the below pro-
cedures: 
· Interviewed relevant personnel in relation to environmental, 
social and governance (ESG) data to develop an understand-
ing of the process for the preparation of the environmental, 
social and governance (ESG) data and for carrying out inter-
nal control procedures. 
· Interviewed external specialists responsible for providing  
input to the calculations of the animal welfare and farmer  
climate data to evaluate the competence, capabilities and 
objectivity and as well as evaluate whether the results of the 
external specialists’ work are adequate for our purposes 
· Performed analytical review of the data and trends to identify 
areas of the environmental, social and governance (ESG) 
data with a higher risk of misleading or unbalanced infor-
mation or material misstatements and obtained an under-
standing of any explanations provided for significant  
variances.  
· Based on inquiries, we evaluated the appropriateness of the 
Accounting Policies used, their consistent application and 
related disclosures in the environmental, social and govern-
ance (ESG) data. This includes the reasonableness of esti-
mates made by management.  
· Designed and performed further procedures responsive to 
those risks and obtained evidence that is sufficient and  
appropriate to provide a basis for our conclusion.  
· Site visits to conduct walkthroughs of data gathering, calcu-
lation and consolidation processes related to the reasonable 
assurance of metrics.  
· Agreed key items and representative samples based on gen-
erally accepted sampling methodology to source infor-
mation to check accuracy and completeness of the data. 
· In connection with our procedures, we read the other sus-
tainability information in the Annual Report of Arla Foods 
Amba’s and, in doing so, considered whether the other sus-
tainability information is materially inconsistent with the  
environmental, social and governance (ESG) or our 
knowledge obtained in the review or otherwise appear to  
be materially misstated. 
 
In our opinion, the evidence and procedures performed pro-
vide a sufficient basis for our conclusion. 
Conclusion 
In our opinion the environmental, social and governance (ESG) 
data, contained in Arla Foods Amba’s Annual Report on pages 
128-145 for the period from 1 January 2022 to 31 December 
2022 which has been subject to our reasonable assurance 
procedures have, in all material respects, been prepared in  
accordance with the Accounting Policies described on 
pages 131-141. 
Aarhus, 8 February 2023 
EY Godkendt Revisionspartnerselskab  
CVR no. 30 70 02 28 
 
Henrik Kronborg Iversen 
State Authorised Public  
Accountant 
MNE no. 24687 
Carina Ohm 
Partner 
Head of Climate Change and 
Sustainability Services

Arlagården® is the name of our quality assurance pro-
gramme.  
BEPS is an acronym referring to base erosion and profit shift-
ing. These are tax avoidance strategies that exploit gaps and 
mismatches in tax rules to artificially shift profits to low or  
no-tax locations.  
Biogas is the mixture of gases produced by the breakdown of 
organic matter in the absence of oxygen. primarily consisting 
of methane and carbon dioxide. At Arla, biogas is primarily  
produced from cow manure.  
Biomass is plant or animal material used for energy produc-
tion. It can be purposely grown energy crops, wood or forest 
residues, waste from food crops, Horticulture, food processing, 
animal farming or human waste from sewage plants.  
Brand share measures revenue from strategic brands as a 
proportion of total revenue and is defined as the ratio of reve-
nue from strategic branded products to total revenue.  
CAPEX is an abbreviation of capital expenditure.  
Capacity cost is defined as the cost of running the general 
business, and includes staff costs, maintenance, energy, clean-
ing, IT, travel and consultancy etc.  
Carbon sequestration refers to a natural or artificial process 
by which carbon dioxide is removed from the atmosphere and 
held in solid or liquid form. 
CPI is an abbreviation of Consumer Price Index.  
Digital engagement is defined as the number of interactions 
consumers have across digital channels. The interaction is 
measured in a number of different ways, for example by view-
ing a video on all media channels for more than 10 seconds, 
visiting a webpage, Commenting, liking or sharing on our so-
cial media channels.  
Digital reach is defined as engagement with Arla's digitil con-
tent, i.e. spending more than 2 minutes on our website, watch-
ing our videos to the end on YouTube and liking or comment-
ing on content on our social media platforms.  
EBIT is an abbreviation of earnings before interest and tax. and 
is a measure of earnings from operations.  
EBITDA is an abbreviation of earnings before interest, Tax, de-
preciation and amortisation from ordinary operations.  
EBIT margin measures EBIT as a percentage of total revenue.  
EMEA is an acronym referring to Europe, the Middle East and 
Africa.  
Equity ratio is the ratio of equity, excluding minority interests, 
to total assets, and is a measure of the financial strength  
of Arla. 
FMCG is an acronym for fast-moving consumer goods.  
Free cash flow is defined as cash flow from operating activi-
ties after deducting cash flow from investing activities.  
FTE is an acronym for full-time equivalents. FTEs are defined 
as the contractual working hours of an employee compared to 
a full-time contract in the same position and country. The FTE 
figure is used to measure the active workforce counted in full-
time positions. An FTE of 1.0 is equivalent to a full-time worker, 
while an FTE of 0.5 equals half of the full workload.  
GDPR is an acronym for the General Data Protection Regula-
tion which regulates data protection and privacy in the Euro-
pean Union (EU) and the European Economic Area (EEA). It 
also addresses the transfer of personal data outside the EU 
and EEA areas. The GDPR aims primarily to give control to indi-
viduals over their personal data and to simplify the regulatory 
environment for international business by unifying the regula-
tion within the EU.  
Global industry share is a measure of the total milk con-
sumption for producing commodity products relative to the 
total milk consumption, i.e. based on volumes. Commodity 
products are sold with lower or no value added, typically via 
business-to-business sales for other companies to use in their 
production as well as via industry sales of cheese, butter or 
milk powder. 
Greenhouse Gas Protocol (GHGP) provides accounting and 
reporting standards, sector guidance, calculation tools to ac-
count for greenhouse gas emissions. It establishes a compre-
hensive, global, standardised framework for measuring and 
managing emissions from private and public sector opera-
tions, value chains, products, cities and policies.  
lncoterms refer to International Commercial Terms. These 
are a series of pre-defined commercial terms published by the 
International Chamber of Commerce (ICC) relating to interna-
tional commercial law. They are widely used in international 
commercial transactions or procurement processes and their 
use is encouraged by trade councils, courts and international 
lawyers.  
Innovation pipeline is defined as the net incremental reve-
nue generated from innovation projects up to 36 months from 
their launch.  
Interest cover is the ratio of EBITDA to net interest costs.  
International share of business is defined as the revenue 
from the International zone as a percentage of revenue from 
the International and Europe zones.  
Lactalbumin, also known as ‘whey protein’, is the albumin 
contained in milk and obtained from whey. 
Leverage is the ratio of net interest-bearing debt, inclusive of 
pension liabilities, to EBITDA. It enables evaluation of the abil-
ity to support future debt and obligations: the long-term target 
range for leverage is between 2.8 and 3.4.  
MENA is an acronym referring to the Middle East and  
North Africa.  GLOSSARY

Meal kits are a subscription service-food business model 
where a company sends customers pre-portioned and some-
times partially prepared food ingredients and recipes to pre-
pare homecooked meals.  
Milk volume is defined as total intake of raw milk in kg from 
owners and contractors.  
M&A is an abbreviation of mergers and acquisitions.  
Net interest-bearing debt is defined as current and non-cur-
rent interest-bearing liabilities less securities. cash and cash 
equivalents. and other interest-bearing assets.  
Net interest-bearing debt inclusive of pension liabilities is 
defined as current and non-current interest-bearing liabilities 
less securities, cash and cash equivalents, and other interest-
bearing assets plus pension liabilities.  
Net working capital is the capital tied up in inventories.  
receivables and payables including payables for owner milk. 
Net working capital excluding owner milk is defined as cap-
ital that is tied up in inventories, receivables and payables ex-
cluding payables for owner milk.  
Non-GMO means non-genetically modified organisms, for ex-
ample non-genetically modified feed crops for cows.  
OCI is an acronym for other comprehensive income. OCI in-
cludes revenue, Expenses, gains and losses that have yet to be 
realised.  
OECD refers to the Organisation for Economic Cooperation 
and Development.  
On-the-go refers to food consumed while on the go, and also 
to packaging solutions supporting this food consumption 
trend.  
Other supported brands are brands other than Arla®. 
Lurpak®. Puck®, Castello® and milk-based branded beverages 
that contribute to strategic branded volume-driven revenue 
growth.  
Performance price for Arla Foods is defined as the prepaid 
milk price plus net profit divided by total member milk volume 
intake. It measures the value creation per kg of owner milk  
including retained earnings and supplementary payments.  
Prepaid milk price describes the cash payment farmers re-
ceive per kg of milk delivered during the settlement period. 
Private label refers to retail brands which are owned by retail-
ers, but produced by Arla based on contract manufacturing 
agreements.  
Profit margin is a measure of profitability. It is the amount by 
which revenue from sales exceeds costs in a business.  
Profit share is defined as the ratio of profit for the period allo-
cated to owners of Arla Foods. to total revenue.  
QEHS stands for Quality, Environmental. Health. and Safety. It 
is a department within Arla's supply chain safeguarding the 
quality and safety of production.  
SEA is an acronym referring to South-East Asia.  
SMP is an abbreviation of skimmed milk powder.  
Strategic brands are defined as products sold under branded 
products such as Arla®, Lurpak®, Castello® and Puck®.  
Strategic branded volume-driven revenue growth is  
defined as revenue growth associated with growth in volumes 
from strategic branded products while keeping prices con-
stant. It is also referred to in the report as branded volume 
growth. 
USD-related currencies are currencies which move in the 
same direction as the USD (i.e. when the USD depreciates 
against the EUR, it also depreciate against the EUR). Curren-
cies in the MENA region are typical examples. 
Value-added protein segment contains products with spe-
cial functionality and compounds, compared to standard pro-
tein concentrates with a protein content of approximately  
80 per cent.  
Volume-driven revenue growth is defined as revenue 
growth associated with growth in volumes while keeping 
prices constant.  
Whey protein hydrolysate is a concentrate or isolate  
in which some of the amino bonds have been broken by  
exposure of the proteins to heat, acids or enzymes. This pre- 
digestion means that hydrolysed proteins are more rapidly  
absorbed in the gut than either whey concentrates or isolates.  
WMP is an abbreviation referring to whole milk powder. 
 
 
 GLOSSARY CONTINUED

CORPORATE CALENDAR
22-23 
February 
Board of Representatives 
meeting 
23 
February 
Publication of the consolidated 
annual report for 2022 
17 
May 
Extraordinary Board of  
Representatives meeting 
29 
August 
Publication of the consolidated 
half-year results for 2023 
4-5 
October 
Board of Representatives 
meeting 
 
www.arla.com

Arla Foods amba Sønderhøj 14 
DK-8260 Viby J. 
Denmark 
CVR no.: 25 31 37 63  
Phone +45 89 38 10 00  
E-mail arla@arlafoods.com 
www.arla.com 
Arla Foods UK plc 
4 Savannah Way 
Leeds Valley Park 
Leeds, LS10 1 AB  
England 
Phone +44 113 382 7000  
E-mail arla@arlafoods.com 
www.arlafoods.co.uk