Oatly posts positive first quarter but supply chain issues hinder performance

Oatly has reported lower than expected production output, but revenue and demand continue to rise | Photo credit: Oatly

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Oatly has announced its financial results for the first quarter of 2022, with an overall revenue increase of $26.1m and encouraging growth in the Americas.

The Malmo-based company’s total revenue rose to $166.2m for the first quarter, compared to $140.1m for the first quarter of 2021. Oatly states that the revenue increase was the result of additional supply from the company’s new and existing facilities to meet growing global demand.

However, as was the case with the full 2021 fiscal results, Oatly reported lower than expected production output, as well as lower than expected sales in Asia as a result of Covid-19 closures. 

Additionally, the ramp-up of new facilities, following recent new production sites in the Netherlands and Utah, continued to be impacted by disruption of global supply chain flows and travel restrictions, despite the relaxation of pandemic-related restrictions in Europe and the US.

Oatly’s foodservice channel rebounded positively with the continued reopening of on-premise outlets in the company’s key Western markets. In the first quarter of 2022, the foodservice channel accounted for 33.8% of revenue, whilst the retail channel accounted for 62.9%.

The Oatly release shows that gross profit was $15.8m for the first quarter of 2022 compared to $41.9m for the first quarter of 2021. The gross profit margin decline is being attributed to the short-term underutilisation of new facilities and higher raw materials, increased logistics and electricity expenses. First quarter of 2022 EBITDA loss was $81.4m compared to an EBITDA loss of $24.7m the year before.

Americas revenue increased $13.5m, or 40.3%, to $47m for the first quarter of 2022, with revenue growth sitting at 10.9% in EMEA to $90.5m), and 15.3% in Asia (to $28.7m).

Oatly’s future outlook for the full year ending 31 December 2022 is for revenue of $880m to $920m, an increase of 37% to 43% compared to full year 2021 with strong growth across all regions, particularly given the anticipated easing of Covid-19 restrictions in Asia in the beginning of the third quarter of 2022.

The company is also targeting capital expenditures of up to $500m and run-rate production capacity to be approximately 900m litres of finished goods at the end of 2022.

“Given the challenging operating environment, we are pleased with our first quarter revenue results which exceeded our expectations. In March, we saw significant improvements in EMEA and Americas, with record revenue in EMEA and the largest production month ever for the Americas as the manufacturing challenges we experienced at the start of the year due to Omicron began to abate,” said Toni Petersson, CEO, Oatly.

“In Asia, our business was impacted by zero-Covid policy restrictions and subsequent lockdowns, yet what remains consistent in 2022 is the global demand across sales channels and geographies for our products as we add production capacity to drive consumer conversion from dairy to plant-based products,” he added.

Last month, Oatly expanded its senior leadership team to prepare for further growth over the next 12 months, with the new team set to enable the company to grow its international footprint, sharpen its supply chain and manufacturing practices and leverage its new production plants for product innovation.