Oatly sees path to profitability after narrowing losses in first quarter

Oatly’s first quarter sales grew 1.8% year-on-year to reach $199.2m | Photo credit: Oatly

Oatly has reported an ‘encouraging’ first quarter after actions taken last year to streamline its global production and supply chains contributed to narrower losses.  
 

The Swedish oatmilk manufacturer posted a net loss of $45.8m in the three months ending 31 March 2024, compared to a $75.6m loss in the same period last year. Oatly’s total losses exceeded $400m in 2023. 

In a bid to drive down costs and improve efficiency, Oatly abandoned production facility expansion plans in the UK and the US in November 2023 and is currently ‘evaluating’ its options to streamline its supply chain in Asia – where it has struggled with high costs and slowing sales since the pandemic. 

Oatly’s first quarter sales grew 1.8% year-on-year to reach $199.2m – 2% lower than the fourth quarter of 2023.  

Revenue growth in Oatly’s Europe and International segment – inclusive of Europe, the Middle East and Africa, Asia Pacific (excluding Greater China) and Latin America – grew 10% to $110.4m, driven by higher volumes and price increases. Adjusted EBITDA in the segment increased $7.3m to $14.5m. 

Sales in North America grew 4.6% to $67m, which Oatly attributed to new product launches and new hospitality distribution partnerships. Oatly also drastically reduced its losses in the region to $0.4m during the quarter, compared to $46.3m in the previous quarter. 

Oatly’s oatmilk products are currently served at more than 2,200 US coffee shops, including prominent chains such as The Coffee Bean & Tea Leaf, Blue Bottle Coffee and Bluestone Lane, as well as select Intelligentsia Coffee, La Colombe Coffee Roasters, George Howell, Gregorys Coffee and Café Grumpy stores.   
 

The foodservice channel accounts for 43% of sales in North America, compared to just 18% in Oatly’s Europe and International segment but considerably lower than the 70% share the channel holds in Greater China. 

First quarter revenues in Greater China fell 30% to $21.8m following Oatly’s decision in the third quarter of 2023 to discontinue lower-margin products and certain retail and e-commerce partnerships. Adjusted EBITDA losses in the region fell to $3.4m from $9.4m in the previous quarter. 

“While we are pleased with this progress to date, we recognise we are only one quarter into our year, and we know we need to continue driving results and gaining traction on our strategic actions as we drive toward structural, consistent profitable growth,” said CEO Jean-Christophe Flatin. 

Alongside a global network of hospitality operators, Oatly’s global out-of-home distribution also includes deals with US cruise line Virgin Voyages, Germany’s national railway company Deutsche Bahn, Switzerland’s largest airline SWISS and US hospitality group Graduate Hotels.