Valio net sales up 1.2%
Domestic net sales decreased by 0.9 percent, and international net sales rose 4.3 percent. The coronavirus pandemic affected domestic consumption and was visible in the growth in retail sales and the decrease in HoReCa sales. However, in the challenging year Valio was able to slightly improve the milk return.
Net sales from international operations totalled EUR 746 million (EUR 715 million). The growth was strongest in China, where demand recovered quickly after the coronavirus shock in early 2020, and net sales increased by more than 40 percent on the previous year.
Growth in net sales in the nearby markets of Sweden, Estonia, and Russia was moderate. In the US, the pandemic caused steep price fluctuations, which weakened financial performance, but net sales remained at a reasonably level. After a slump early in the year, the global market price of milk powders began to rise towards the end of the year.
Valio is owned by 4,300 Finnish milk producers, and Valio pays its operating profit to the dairy farms through the co-operatives. Valio’s financial success is measured with a milk margin* and a milk return.
The milk margin amounted to EUR 861 million (EUR 838 million), and the milk return was 41.5 cents per litre (41.2 c/l).
Valio’s Board of Directors, which is comprised of milk producers, determines the raw milk price based on the market situation and Valio’s financial standing. In 2020, the average price Valio paid for milk was 40.9 cents per litre (39.9 c/l). The price included after payments of 1.5 cents per litre paid to the co-operatives. The sustainability bonus to encourage the continuous improvement of animal welfare remained at two cents per litre.
Throughout the 2000s, Valio has been able to pay Finnish milk producers a higher price for milk than the European average. ■