Luckin Coffee supply partnership yields strong third quarter for Oatly in China

A promotional press image for Luckin Coffee’s partnership with Oatly | Photo credit: Luckin Coffee

Oatly has reported strong year-on-year sales growth across all markets globally in the third quarter, including higher Greater China revenues driven by its Luckin Coffee supply deal. 
 

The Swedish oatmilk manufacturer achieved 11% year-on-year group revenue growth in the three months ended 30 September 2024 to reach $208m.  

Sales in Greater China increased 14% year-on-year to $29m – the highest figures reported since Oatly began reporting on the segment in the first quarter of 2024. 

In an investor presentation, Oatly highlighted its partnership with China’s largest coffee chain Luckin Coffee, which included a promotional RMB 9.9 Oat Milk Series range, as driving foodservice segment sales and greater brand recognition in the country. The Malmö-based brand also supplies oatmilk to Cotti Coffee, Starbucks and Tims China in the world’s largest branded coffee shop market.
 

Approximately 72% of Oatly’s Greater China revenues are generated from its foodservice channel, compared to 48% in North America and just 18% in its Europe & International segment. 

Oatly’s Greater China segment currently contributes 14% of group revenues, compared to 53% from Europe & International and 33% from North America. 

Its Europe & International segment – inclusive of Europe, the Middle East, Africa, Asia Pacific (excluding Greater China) and Latin America – achieved 6% year-on-year sales growth to $110m, while revenues in North America grew 18% year-on-year to $69m. 
 

Oatly’s sustained sales growth since making the costly decision to halt production facility expansion plans in Europe and North America in November 2023 will be welcome news to CEO Jean-Christophe Flatin, who is credited with improving organisational structure and driving cost efficiencies across the brand’s global operations. 

“I am pleased to report another quarter of solid progress in strengthening our business. Our team’s continued focus on solid execution has enabled us to drive profitable growth in each of our three operating segments,” Flatin said. 

For the first time since its $1.4bn IPO in May 2021, each of Oatly’s operating segments reported positive adjusted EBITDA for the full quarter – $12.4m in Europe & International, $3.2m in North America and $1.6m in Greater China.  
 

Oatly’s total third quarter adjusted EBITDA loss was $5.0m, compared to a $36m loss in the same period of 2023, while net loss during the period reached $34.6m. However, Oatly’s total profit before tax for the first nine months of 2024 sits at $45.5m.