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6-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2024

 

Commission File Number: 001-40401

 

 

Oatly Group AB

(Translation of registrant’s name into English)

 

 

Ångfärjekajen 8

211 19 Malmö

Sweden

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒

 

Form 40-F ☐

 

 

Results of Operations and Financial Condition

On November 7, 2024, the Company issued a press release announcing its financial results for the quarter ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Report on Form 6-K.

 

 

 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release of Oatly Group AB, dated November 7, 2024

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

Oatly Group AB

 

 

 

 

Date: November 7, 2024

 

By:

/s/ Marie-José David

 

 

Name:

Marie-José David

 

 

Title:

Chief Financial Officer

 

EX-99.1

Exhibit 99.1

 

https://cdn.kscope.io/f6fad487a1473c76001330ffefc92e2f-img191691763_0.jpg

 

Oatly Reports Third Quarter 2024 Financial Results

MALMÖ, Sweden, November 7, 2024 – Oatly Group AB (Nasdaq: OTLY) (“Oatly” or the “Company”), the world’s original and largest oat drink company, today announced financial results for the third quarter and nine months ended September 30, 2024.

Jean-Christophe Flatin, Oatly’s CEO, commented, “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. As we move forward, we will maintain our north star of driving the total business toward structural, consistent profitable growth, and we intend to continue to invest behind our unique brand voice to recruit more consumers to our brand and further stimulate demand.”

 

The tables below reconcile revenue as reported to revenue on a constant currency basis by segment for the three and nine months ended September 30, 2024.

 

 

 

Three months ended September 30,

 

 

$ Change

 

 

% Change

 

 

 

 

 

 

2024

 

 

2023

 

 

As reported

 

 

Foreign exchange impact

 

 

In constant currency

 

 

As reported

 

 

In constant currency

 

 

Volume

 

 

Constant currency price/mix

 

Europe & International

 

 

109,853

 

 

 

103,526

 

 

 

109,853

 

 

 

2,140

 

 

 

107,713

 

 

 

6.1

%

 

 

4.0

%

 

 

5.4

%

 

 

-1.4

%

North America

 

 

69,073

 

 

 

58,491

 

 

 

69,073

 

 

 

—

 

 

 

69,073

 

 

 

18.1

%

 

 

18.1

%

 

 

17.6

%

 

 

0.5

%

Greater China

 

 

29,074

 

 

 

25,578

 

 

 

29,074

 

 

 

327

 

 

 

28,747

 

 

 

13.7

%

 

 

12.4

%

 

 

35.3

%

 

 

-22.9

%

Total revenue

 

 

208,000

 

 

 

187,595

 

 

 

208,000

 

 

 

2,467

 

 

 

205,533

 

 

 

10.9

%

 

 

9.6

%

 

 

13.0

%

 

 

-3.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30,

 

 

$ Change

 

 

% Change

 

 

 

 

 

 

2024

 

 

2023

 

 

As reported

 

 

Foreign exchange impact

 

 

In constant currency

 

 

As reported

 

 

In constant currency

 

 

Volume

 

 

Constant currency price/mix

 

Europe & International

 

 

325,801

 

 

 

302,790

 

 

 

325,801

 

 

 

3,488

 

 

 

322,313

 

 

 

7.6

%

 

 

6.4

%

 

 

5.1

%

 

 

1.3

%

North America

 

 

203,859

 

 

 

184,364

 

 

 

203,859

 

 

 

—

 

 

 

203,859

 

 

 

10.6

%

 

 

10.6

%

 

 

11.9

%

 

 

-1.3

%

Greater China

 

 

79,690

 

 

 

92,073

 

 

 

79,690

 

 

 

(1,887

)

 

 

81,577

 

 

 

-13.4

%

 

 

-11.4

%

 

 

15.1

%

 

 

-26.5

%

Total revenue

 

 

609,350

 

 

 

579,227

 

 

 

609,350

 

 

 

1,601

 

 

 

607,749

 

 

 

5.2

%

 

 

4.9

%

 

 

8.4

%

 

 

-3.5

%

Highlights

•
Third quarter revenue of $208.0 million, a 10.9% increase compared to the prior year period, with a constant currency revenue increase of 9.6% compared to the prior year period, with solid volume growth in each operating segment.
•
Gross margin in the third quarter was 29.8%, which is a 12.4 percentage points increase compared to the prior year period.
•
Third quarter net loss attributable to shareholders of the parent was $34.6 million, which is a decline of $78.6 million compared to net profit attributable to shareholders of the parent of $44.1 million in the prior year period.
•
Third quarter Adjusted EBITDA loss was $5.0 million, which is an improvement of $31.0 million compared to the prior year period.
•
For the first time since the Company’s IPO, each operating segment reported positive Adjusted EBITDA for the full quarter.
•
With one quarter remaining in the year, the Company is refining its full year 2024 outlook. The Company now expects:
o
Constant currency revenue growth near, or slightly below, the low end of the previously-provided range of 6% to 10%,
o
Adjusted EBITDA near the favorable end of its previously-provided range of $(35) million to $(50) million, and
o
Capital expenditures below $55 million, compared to the prior expectation of below $70 million.

1

 

 

Third Quarter 2024 Results

Revenue increased $20.4 million, or 10.9% to $208.0 million for the third quarter ended September 30, 2024, compared to $187.6 million for the prior year period. Excluding a foreign currency exchange tailwind of $2.5 million, revenue for the third quarter was $205.5 million, or an increase of 9.6% compared to the prior year period. The growth in constant currency revenue was primarily driven by solid volume growth in each operating segment. Sold volume for the third quarter of 2024 increased 13.0% to 141.3 million liters compared to 125.0 million liters in the third quarter of 2023. Produced finished goods volume for the third quarter of 2024 was 148.0 million liters compared to 118.8 million liters for the third quarter of 2023.

The Company continued to drive revenue growth in both the retail channel and foodservice channel in the third quarter of 2024 compared to the third quarter of 2023.

 

Gross profit was $62.0 million for the third quarter of 2024 compared to $32.6 million for the third quarter of 2023. Gross profit margin was 29.8% in the third quarter of 2024, an increase of 1,240 basis points compared to the prior year period. The margin improvement compared to the third quarter of 2023 was primarily driven by improvements in supply chain efficiency across all segments, especially in the North America and Greater China segments, as well as improvements in product mix in the Greater China segment due to the strategic reset implemented in the third quarter of 2023.

Research and development expenses in the third quarter of 2024 increased $6.2 million to $10.9 million compared to $4.7 million in the prior year period. The increase was mainly driven by expenses related to the previously communicated new product launch in the North America segment.

Selling, general and administrative expenses in the third quarter of 2024 decreased $7.4 million to $79.7 million compared to $87.1 million in the prior year period. The decrease was primarily due to the various cost restructuring activities implemented since early 2023, including $3.9 million reduction in employee-related expenses, which were partially offset by foreign exchange headwinds.

Other operating income and (expenses), net for the third quarter of 2024 was an expense of $0.4 million compared to an expense of $8.1 million in the prior year period. The decrease was primarily due to the impact of the settlement of US securities class action lawsuits in the third quarter of 2023.

Finance income and (expenses), net for the third quarter of 2024 was an expense of $4.3 million comprised primarily of net interest expenses of $13.3 million, offset by fair value gains on Convertible Notes of $5.3 million and net foreign exchange gains of $4.5 million. The finance income and (expenses), net for the prior year period was an income of $112.8 million. The decrease was mainly driven by $121.2 million in lower fair value gains on Convertible Notes.

Net loss attributable to shareholders of the parent was $34.6 million for the third quarter of 2024 compared to a profit of $44.1 million in the prior year period. The decrease was primarily a result of decreased finance income and (expenses), net, offset by improved operating loss.

Adjusted EBITDA loss for the third quarter of 2024 was $5.0 million, compared to a loss of $36.0 million in the prior year period. The improvement in Adjusted EBITDA loss was primarily a result of higher gross profit and lower selling, general and administrative expenses.

EBITDA, Adjusted EBITDA loss, and Constant Currency Revenue are non-IFRS financial measures defined under “Non-IFRS financial measures”. Please see above revenue at constant currency table and “Reconciliation of IFRS to Non-IFRS Financial measures” at the end of this press release.

The following tables set forth revenue, Adjusted EBITDA, EBITDA and (loss)/profit before tax for the Company’s three reportable segments for the periods presented.

 

Revenue, Adjusted EBITDA and EBITDA

Segment information for the three and nine months ended September 30, 2023 presented below has been updated to reflect previously disclosed changes to our operating segments, which were effective as of January 1, 2024. Please see our press release, dated April 17, 2024, furnished on Form 6-K with the SEC for further information regarding these changes.

 

2

 

 

Revenue, Adjusted EBITDA and EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2024
(in thousands of U.S. dollars)

 

Europe & International

 

 

North America

 

 

Greater China

 

 

Corporate*

 

 

Eliminations**

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

 

109,853

 

 

 

69,073

 

 

 

29,074

 

 

 

—

 

 

 

—

 

 

 

208,000

 

Intersegment revenue

 

 

1,325

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,325

)

 

 

—

 

Total segment revenue

 

 

111,178

 

 

 

69,073

 

 

 

29,074

 

 

 

—

 

 

 

(1,325

)

 

 

208,000

 

Adjusted EBITDA

 

 

12,414

 

 

 

3,271

 

 

 

1,622

 

 

 

(22,352

)

 

 

—

 

 

 

(5,045

)

Share-based compensation expense

 

 

(800

)

 

 

(141

)

 

 

(411

)

 

 

(1,949

)

 

 

—

 

 

 

(3,301

)

Restructuring costs(1)

 

 

(35

)

 

 

(97

)

 

 

—

 

 

 

(808

)

 

 

—

 

 

 

(940

)

New product launch issue(2)

 

 

—

 

 

 

(6,888

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(6,888

)

Non-controlling interests

 

 

—

 

 

 

—

 

 

 

(70

)

 

 

—

 

 

 

—

 

 

 

(70

)

EBITDA

 

 

11,579

 

 

 

(3,855

)

 

 

1,141

 

 

 

(25,109

)

 

 

—

 

 

 

(16,244

)

Finance income and (expenses), net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4,284

)

Depreciation and amortization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12,713

)

Loss before tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(33,241

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2023
(in thousands of U.S. dollars)

 

Europe & International

 

 

North America

 

 

Greater China

 

 

Corporate*

 

 

Eliminations**

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

 

103,526

 

 

 

58,491

 

 

 

25,578

 

 

 

—

 

 

 

—

 

 

 

187,595

 

Intersegment revenue

 

 

3,717

 

 

 

—

 

 

 

59

 

 

 

—

 

 

 

(3,776

)

 

 

—

 

Total segment revenue

 

 

107,243

 

 

 

58,491

 

 

 

25,637

 

 

 

—

 

 

 

(3,776

)

 

 

187,595

 

Adjusted EBITDA

 

 

8,476

 

 

 

(8,035

)

 

 

(16,481

)

 

 

(19,958

)

 

 

—

 

 

 

(35,998

)

Share-based compensation expense

 

 

(580

)

 

 

(978

)

 

 

(1,205

)

 

 

(3,527

)

 

 

—

 

 

 

(6,290

)

Restructuring costs(1)

 

 

(29

)

 

 

112

 

 

 

(2,292

)

 

 

(968

)

 

 

—

 

 

 

(3,177

)

Legal settlement(3)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(9,250

)

 

 

—

 

 

 

(9,250

)

Non-controlling interests

 

 

—

 

 

 

—

 

 

 

(74

)

 

 

—

 

 

 

—

 

 

 

(74

)

EBITDA

 

 

7,867

 

 

 

(8,901

)

 

 

(20,052

)

 

 

(33,703

)

 

 

—

 

 

 

(54,789

)

Finance income and (expenses), net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

112,841

 

Depreciation and amortization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12,559

)

Profit before tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

45,493

 

 

 

 

3

 

 

Nine months ended September 30, 2024
(in thousands of U.S. dollars)

 

Europe & International

 

 

North America

 

 

Greater China

 

 

Corporate*

 

 

Eliminations**

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

 

325,801

 

 

 

203,859

 

 

 

79,690

 

 

 

—

 

 

 

—

 

 

 

609,350

 

Intersegment revenue

 

 

5,103

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(5,103

)

 

 

—

 

Total segment revenue

 

 

330,904

 

 

 

203,859

 

 

 

79,690

 

 

 

—

 

 

 

(5,103

)

 

 

609,350

 

Adjusted EBITDA

 

 

39,548

 

 

 

4,049

 

 

 

(2,234

)

 

 

(70,609

)

 

 

—

 

 

 

(29,246

)

Share-based compensation expense

 

 

(1,679

)

 

 

886

 

 

 

(1,590

)

 

 

(7,712

)

 

 

—

 

 

 

(10,095

)

Restructuring costs(1)

 

 

(890

)

 

 

(866

)

 

 

(1,940

)

 

 

(879

)

 

 

—

 

 

 

(4,575

)

Discontinued construction of production facilities(4)

 

 

(2,923

)

 

 

1,161

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,762

)

New product launch issue(2)

 

 

—

 

 

 

(12,565

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12,565

)

Non-controlling interests

 

 

—

 

 

 

—

 

 

 

(172

)

 

 

—

 

 

 

—

 

 

 

(172

)

EBITDA

 

 

34,056

 

 

 

(7,335

)

 

 

(5,936

)

 

 

(79,200

)

 

 

—

 

 

 

(58,415

)

Finance income and (expenses), net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(11,272

)

Depreciation and amortization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(38,034

)

Loss before tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(107,721

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2023
(in thousands of U.S. dollars)

 

Europe & International

 

 

North America

 

 

Greater China

 

 

Corporate*

 

 

Eliminations**

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from external customers

 

 

302,790

 

 

 

184,364

 

 

 

92,073

 

 

 

—

 

 

 

—

 

 

 

579,227

 

Intersegment revenue

 

 

23,268

 

 

 

—

 

 

 

181

 

 

 

—

 

 

 

(23,449

)

 

 

—

 

Total segment revenue

 

 

326,058

 

 

 

184,364

 

 

 

92,254

 

 

 

—

 

 

 

(23,449

)

 

 

579,227

 

Adjusted EBITDA

 

 

16,967

 

 

 

(29,221

)

 

 

(52,387

)

 

 

(73,698

)

 

 

—

 

 

 

(138,339

)

Share-based compensation expense

 

 

(1,699

)

 

 

(2,830

)

 

 

(3,984

)

 

 

(8,246

)

 

 

—

 

 

 

(16,759

)

Restructuring costs(1)

 

 

(1,063

)

 

 

(2,482

)

 

 

(2,402

)

 

 

(6,397

)

 

 

—

 

 

 

(12,344

)

Legal settlement(3)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(9,250

)

 

 

—

 

 

 

(9,250

)

Costs related to the YYF Transaction(5)

 

 

—

 

 

 

(375

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(375

)

Non-controlling interests

 

 

—

 

 

 

—

 

 

 

(74

)

 

 

—

 

 

 

—

 

 

 

(74

)

EBITDA

 

 

14,205

 

 

 

(34,908

)

 

 

(58,847

)

 

 

(97,591

)

 

 

—

 

 

 

(177,141

)

Finance income and (expenses), net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

99,333

 

Depreciation and amortization

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(37,256

)

Loss before tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(115,064

)

* Corporate consists of general costs not allocated to the segments.

** Eliminations in 2024 and 2023 primarily refer to intersegment revenue for sales of products from Europe & International to Greater China.

(1)
Relates primarily to severance payments as the Group continues to adjust its organizational structure to the macro environment.
(2)
Expenses related to a new product launch issue.
(3)
Relates to US securities class action litigation settlement expenses.
(4)
Relates primarily to non-cash impairments related to discontinued construction of the Group’s production facility in Peterborough, UK, and reversal of previously recognized non-cash impairments related to discontinued construction of the Group’s production facility in Dallas-Fort Worth, Texas.
(5)
Relates to the Ya YA Foods USA LLC transaction (the “YYF Transaction”). See the Company’s Forms 6-K filed on January 3, 2023 and March 2, 2023 for further details.

Europe & International

Europe & International revenue increased $6.3 million, or 6.1%, to $109.9 million for the third quarter of 2024, compared to $103.5 million in the prior year period. Excluding a foreign currency exchange tailwind of $2.1 million, Europe & International revenue for the third quarter was $107.7 million, or an increase of 4.0%. The increase in revenue was primarily driven by volume growth from increased Barista and ambient oatmilk sales in established markets, as well as continued expansion in the new European markets. Approximately 82% of Europe & International revenue was from the retail channel for the third quarter of 2024 and 2023, respectively. The sold finished goods volume for the three months ended September 30, 2024 and 2023 amounted to 77.2 and 73.2 million liters, respectively.

Europe & International Adjusted EBITDA increased $3.9 million to $12.4 million for the third quarter of 2024 compared to $8.5 million in the prior year period. The improvement in Adjusted EBITDA was primarily driven by higher gross profit, partially offset by higher selling, general and administrative expenses due to increased brand building investments during the quarter.

4

 

 

North America

North America revenue increased $10.6 million, or 18.1%, to $69.1 million for the third quarter of 2024, compared to $58.5 million in the prior year period. The sold finished goods volume for the three months ended September 30, 2024 and 2023 amounted to 39.5 million and 33.6 million liters, respectively. The 17.6% volume increase was due to higher volumes across the retail and foodservice channels as the Company continued to expand distribution and launch new products. Approximately 52% of North America revenue was from the retail channel in the third quarter of 2024 compared to 53% in the prior year period.

North America Adjusted EBITDA improved $11.3 million to $3.3 million compared to a loss of $8.0 million in the prior year period. The improvement in Adjusted EBITDA was primarily due to higher gross profit and lower selling, general and administrative expenses through stronger cost control to drive profitability.

Greater China

Greater China revenue increased $3.5 million, or 13.7%, to $29.1 million for the third quarter of 2024, compared to $25.6 million in the prior year period. Excluding a foreign currency exchange tailwind of $0.3 million, Greater China revenue for the third quarter was $28.7 million, or an increase of 12.4%. The Greater China segment growth was primarily driven by sales to a new foodservice customer. Approximately 72% of Greater China revenue was from the foodservice channel for the third quarter of 2024 compared to 68% in the prior year period. The sold finished goods volume for the three months ended September 30, 2024 and 2023 amounted to 24.6 million and 18.1 million liters, respectively.

Greater China Adjusted EBITDA improved $18.1 million to $1.6 million compared to a loss of $16.5 million in the prior year period. The improvement in Adjusted EBITDA was primarily due to higher gross profit and reduction in selling, general and administrative expenses, as the segment executed on its previously-communicated strategic reset.

Corporate

Oatly’s corporate expense, which consists of general costs not allocated to the segments, in the third quarter of 2024 was $25.1 million, a decrease of $8.6 million compared to the prior year period. Adjusted EBITDA in the third quarter of 2024 was a loss of $22.4 million compared to a loss of $20.0 million in the prior year period. The increase in Adjusted EBITDA loss was primarily driven by the addition of global branding and advertising expenses as well as foreign exchange headwinds, which were partially offset by reductions in personnel-related expenses.

Balance Sheet and Cash Flows

As of September 30, 2024, the Company had cash and cash equivalents of $119.3 million and total outstanding debt of $441.3 million consisting of Convertible Notes and liabilities to credit institutions. Net cash used in operating activities was $104.2 million for the nine months ended September 30, 2024, compared to $151.5 million during the prior year period, which was primarily driven by improved operating results, partly offset by cash outflow of $26.3 million related to discontinued construction of the Group’s production facilities in Peterborough, UK and Dallas-Fort Worth, Texas, and a cash outflow of $9.3 million related to the settlement of US securities class action litigation.

Capital expenditures were $28.9 million for the nine months ended September 30, 2024, compared to $52.0 million in the prior year period and, in addition, proceeds from the sale of property, plant and equipment was $24.4 million for the nine months ended September 30, 2024.

 

Free cash flow was an outflow of $133.1 million for the nine months ended September 30, 2024 compared to an outflow of $203.5 million during the prior year period. The improvement in free cash flow was driven both by decreased net cash flows used in operating activities and lower capital expenditures, partly offset by the above-mentioned cash outflows relating to discontinued construction of the Group’s production facilities in Peterborough, UK and Dallas-Fort Worth, Texas and settlement of the US securities class action litigation.

 

Free Cash Flow is a non-IFRS liquidity measure defined under “Non-IFRS financial measures.” Please see “Reconciliation of IFRS to Non-IFRS Financial measures” at the end of this press release.

Outlook

Based on the Company’s assessment of the current operating environment and the actions it is taking, the Company is refining its full year 2024 outlook. The Company now expects:

o
Constant currency revenue growth near, or slightly below, the low end of the previously-provided range of 6% to 10%,
o
Adjusted EBITDA near the favorable end of its previously-provided range of $(35) million to $(50) million, and

5

 

 

o
Capital expenditures below $55 million, compared to the prior expectation of below $70 million.

 

 

This outlook is provided in the context of significant macroeconomic uncertainty and other geopolitical uncertainties.

The Company cannot provide a reconciliation of constant currency revenue growth or Adjusted EBITDA guidance to the nearest comparable corresponding IFRS metric without unreasonable efforts due to difficulty in predicting certain items excluded from these non-IFRS measures. The items necessary to reconcile are not within Oatly’s control, may vary greatly between periods and could significantly impact future financial results.

Conference Call, Webcast and Supplemental Presentation Details

Oatly will host a conference call and webcast at 8:30 a.m. ET today to discuss these results. The conference call, simultaneous, live webcast and supplemental presentation can be accessed on Oatly’s Investors website at https://investors.oatly.com under “Events.” The webcast will be archived for 30 days.

 

About Oatly

We are the world’s original and largest oat drink company. For over 25 years, we have exclusively focused on developing expertise around oats: a global power crop with inherent properties suited for sustainability and human health. Our commitment to oats has resulted in core technical advancements that enabled us to unlock the breadth of the dairy portfolio, including alternatives to milks, ice cream, yogurt, cooking creams, and spreads. Headquartered in Malmö, Sweden, the Oatly brand is available in more than 20 countries globally.

For more information, please visit www.oatly.com.

6

 

 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any express or implied statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding our financial outlook for 2024, profitability improvement, long-term growth strategy, expected capital expenditures, anticipated returns on our investments, anticipated supply chain performance, anticipated impact of our improvement plans, anticipated impact of our decision to discontinue construction of certain production facilities, plans to achieve profitable growth and anticipated cost savings as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate,” “will,” “aim,” “potential,” “continue,” “is/are likely to” and similar statements of a future or forward-looking nature. Forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: our history of losses and inability to achieve or sustain profitability; including due to elevated inflation and increased costs for transportation, energy and materials; reduced or limited availability of oats or other raw materials and ingredients that meet our quality standards; failure to obtain additional financing to achieve our goals or failure to obtain necessary capital when needed on acceptable terms, or at all; failure of the financial institutions in which we hold our deposits; damage or disruption to our production facilities; harm to our brand and reputation as a result of real or perceived quality or food safety issues with our products; food safety and food-borne illness incidents or other safety concerns which may lead to lawsuits, product recalls or regulatory enforcement actions; our ability to successfully compete in our highly competitive markets; reduction in the sales of our oatmilk varieties; failure to effectively navigate our shift to an asset-light business model; failure to successfully achieve any or all of the benefits of the YYF Transaction; failure to meet our existing or new environmental metrics and other risks related to sustainability and corporate social responsibility; litigation, regulatory actions or other legal proceedings including environmental and securities class action lawsuits and settlements; changes to international trade policies, treaties and tariffs; global conflict, including the ongoing wars in Ukraine and Israel; changes in our tax rates or exposure to additional tax liabilities or assessments; supply chain delays, including delays in the receipt of product at factories and ports, and an increase in transportation costs; the impact of rising commodity prices, transportation and labor costs on our cost of goods sold; failure by our logistics providers to deliver our products on time, or at all; our ability to successfully execute our cost reduction activities in accordance with our expectations and the impact of such actions on our company; failure to develop and maintain our brand; our ability to introduce new products or successfully improve existing products; failure to retain our senior management or to attract, train and retain employees; cybersecurity incidents or other technology disruptions; risks associated with our operations in the People’s Republic of China; the success of our strategic reset in Asia; failure to protect our intellectual property and other proprietary rights adequately; our ability to successfully remediate previously disclosed material weaknesses or other future control deficiencies, in our internal control over financial reporting; impairments of the value of our assets; potential delisting from Nasdaq; our status as a foreign private issuer; risks related to the significant influence of our largest shareholder, Nativus Company Limited, entities affiliated with China Resources Verlinvest Health Investment Ltd. has over us, including significant influence over decisions that require the approval of shareholders; and the other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 22, 2024 and our other filings with the SEC as such factors may be updated from time to time. Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. Oatly disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.

Non-IFRS Financial Measures

We use EBITDA, Adjusted EBITDA, Constant Currency Revenue as non-IFRS financial measures in assessing our operating performance and Free Cash Flow as a liquidity measure, and each in our financial communications:

 

“EBITDA” is defined as (loss)/profit for the period adjusted to exclude, when applicable, income tax expense, finance expenses, finance income and depreciation and amortization expense.

 

“Adjusted EBITDA” is defined as (loss)/profit for the period adjusted to exclude, when applicable, income tax expense, finance expenses, finance income, depreciation and amortization expense, share-based compensation expense, restructuring costs, expenses related to a new product launch issue, costs related to legal settlement, impacts related to discontinued construction of production facilities, costs related to the YYF Transaction, and non-controlling interests.

 

Adjusted EBITDA should not be considered as an alternative to (loss)/profit for the period or any other measure of financial performance calculated and presented in accordance with IFRS. There are a number of limitations related to the use of Adjusted EBITDA rather than (loss)/profit for the period, which is the most directly comparable IFRS measure. Some of these limitations are:

 

•
Adjusted EBITDA excludes depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future increasing our cash requirements;
•
Adjusted EBITDA does not reflect interest expense, or the cash required to service our debt, which reduces cash available to us;

7

 

 

•
Adjusted EBITDA does not reflect income tax payments that reduce cash available to us;
•
Adjusted EBITDA does not reflect recurring share-based compensation expense and, therefore, does not include all of our compensation costs;
•
Adjusted EBITDA does not reflect restructuring costs that reduce cash available to us in future periods;
•
Adjusted EBITDA does not reflect expenses related to a new product launch issue that reduce cash available to us;
•
Adjusted EBITDA does not reflect costs related to legal settlement that reduce cash available to us in future periods;
•
Adjusted EBITDA excludes impacts related to discontinued construction of production facilities, although some of these may reduce cash available to us in future periods;
•
Adjusted EBITDA does not reflect costs related to the YYF Transaction that reduced cash available to us;
•
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

 

Adjusted EBITDA should not be considered in isolation or as a substitute for financial information provided in accordance with IFRS. Below we have provided a reconciliation of EBITDA and Adjusted EBITDA to (loss)/profit for the period, the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods presented.

 

“Constant Currency Revenue” is calculated by translating the current year reported revenue amounts into comparable amounts using the prior year reporting period’s average foreign exchange rates which have been provided by a third party. Constant Currency Revenue is a non-IFRS measure and is not a substitute for IFRS measures in assessing our overall financial performance.

 

Constant currency revenue is used to provide a framework in assessing how our business and geographic segments performed excluding the effects of foreign currency exchange rate fluctuations and believe this information is useful to investors to facilitate comparisons and better identify trends in our business. Above we have provided a reconciliation of revenue as reported to revenue on a constant currency basis for the periods presented.

“Free Cash Flow” is defined as net cash flows used in operating activities less capital expenditures. We believe Free Cash Flow is a useful supplemental financial measure for us and investors in assessing our ability to pursue business opportunities and investments. Free Cash Flow is not a measure of our liquidity under IFRS and should not be considered as an alternative to net cash flows from operating activities.

 

Free Cash Flow is a non-IFRS measure and is not a substitute for IFRS measures in assessing our overall financial liquidity. Because Free Cash Flow is not a measurement determined in accordance with IFRS, and is susceptible to varying calculations, it may not be comparable to other similarly titled measures presented by other companies. Free Cash Flow should not be considered in isolation, or as a substitute for an analysis of our results as reported on our interim condensed consolidated financial statements appearing elsewhere in this document. Below we have provided a reconciliation of Free Cash Flow to net cash flows used in operating activities for the periods presented.

 

Contacts

Oatly Group AB

+1 866-704-0391

investors@oatly.com

press.us@oatly.com

 

8

 

 

Financial Statements

Interim condensed consolidated statement of operations

(Unaudited)

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

(in thousands of U.S. dollars, except share and per share data)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue

 

 

208,000

 

 

 

187,595

 

 

 

609,350

 

 

 

579,227

 

Cost of goods sold

 

 

(145,979

)

 

 

(155,034

)

 

 

(434,475

)

 

 

(474,922

)

Gross profit

 

 

62,021

 

 

 

32,561

 

 

 

174,875

 

 

 

104,305

 

Research and development expenses

 

 

(10,867

)

 

 

(4,684

)

 

 

(26,407

)

 

 

(15,719

)

Selling, general and administrative expenses

 

 

(79,743

)

 

 

(87,125

)

 

 

(242,746

)

 

 

(292,675

)

Other operating income and (expenses), net

 

 

(368

)

 

 

(8,100

)

 

 

(2,171

)

 

 

(10,308

)

Operating loss

 

 

(28,957

)

 

 

(67,348

)

 

 

(96,449

)

 

 

(214,397

)

Finance income and (expenses), net

 

 

(4,284

)

 

 

112,841

 

 

 

(11,272

)

 

 

99,333

 

(Loss)/profit before tax

 

 

(33,241

)

 

 

45,493

 

 

 

(107,721

)

 

 

(115,064

)

Income tax expense

 

 

(1,389

)

 

 

(1,482

)

 

 

(3,194

)

 

 

(3,221

)

(Loss)/profit for the period

 

 

(34,630

)

 

 

44,011

 

 

 

(110,915

)

 

 

(118,285

)

Attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders of the parent

 

 

(34,560

)

 

 

44,085

 

 

 

(110,743

)

 

 

(118,211

)

Non-controlling interests

 

 

(70

)

 

 

(74

)

 

 

(172

)

 

 

(74

)

(Loss)/profit per share, attributable to shareholders of the parent:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

(0.06

)

 

 

0.07

 

 

 

(0.19

)

 

 

(0.20

)

Diluted

 

 

(0.06

)

 

 

(0.07

)

 

 

(0.19

)

 

 

(0.26

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

597,968,449

 

 

 

594,255,240

 

 

 

596,434,390

 

 

 

593,261,979

 

Diluted

 

 

597,968,449

 

 

 

994,871,584

 

 

 

596,434,390

 

 

 

832,310,554

 

 

9

 

 

Interim condensed consolidated statement of financial position

(Unaudited)

 

September 30, 2024

 

 

December 31, 2023

 

(in thousands of U.S. dollars)

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Intangible assets

 

 

127,135

 

 

 

130,326

 

Property, plant and equipment

 

 

352,138

 

 

 

360,286

 

Right-of-use assets

 

 

56,270

 

 

 

88,393

 

Other non-current receivables

 

 

44,450

 

 

 

44,378

 

Deferred tax assets

 

 

8,428

 

 

 

10,203

 

Total non-current assets

 

 

588,421

 

 

 

633,586

 

Current assets

 

 

 

 

 

 

Inventories

 

 

81,793

 

 

 

67,882

 

Trade receivables

 

 

102,177

 

 

 

112,951

 

Current tax assets

 

 

3,742

 

 

 

2,505

 

Other current receivables

 

 

13,068

 

 

 

33,820

 

Prepaid expenses

 

 

12,260

 

 

 

16,928

 

Cash and cash equivalents

 

 

119,333

 

 

 

249,299

 

Total current assets

 

 

332,373

 

 

 

483,385

 

TOTAL ASSETS

 

 

920,794

 

 

 

1,116,971

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Share capital

 

 

106

 

 

 

105

 

Treasury shares

 

 

(0

)

 

 

(0

)

Other contributed capital

 

 

1,628,045

 

 

 

1,628,045

 

Other reserves

 

 

(236,972

)

 

 

(233,204

)

Accumulated deficit

 

 

(1,161,600

)

 

 

(1,060,952

)

Equity attributable to shareholders of the parent

 

 

229,579

 

 

 

333,994

 

Non-controlling interests

 

 

1,629

 

 

 

1,787

 

Total equity

 

 

231,208

 

 

 

335,781

 

Liabilities

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Lease liabilities

 

 

36,189

 

 

 

72,570

 

Liabilities to credit institutions

 

 

115,056

 

 

 

114,249

 

Provisions

 

 

1,667

 

 

 

10,716

 

Total non-current liabilities

 

 

152,912

 

 

 

197,535

 

Current liabilities

 

 

 

 

 

 

Lease liabilities

 

 

13,990

 

 

 

16,432

 

Convertible Notes

 

 

320,191

 

 

 

323,528

 

Liabilities to credit institutions

 

 

6,020

 

 

 

6,056

 

Trade payables

 

 

57,303

 

 

 

64,368

 

Current tax liabilities

 

 

762

 

 

 

2,732

 

Other current liabilities

 

 

7,666

 

 

 

13,873

 

Accrued expenses

 

 

123,859

 

 

 

121,338

 

Provisions

 

 

6,883

 

 

 

35,328

 

Total current liabilities

 

 

536,674

 

 

 

583,655

 

Total liabilities

 

 

689,586

 

 

 

781,190

 

TOTAL EQUITY AND LIABILITIES

 

 

920,794

 

 

 

1,116,971

 

 

10

 

 

Interim condensed consolidated statement of cash flows

(Unaudited)

 

Nine months ended September 30,

 

(in thousands of U.S. dollars)

 

2024

 

 

2023

 

Operating activities

 

 

 

 

 

 

Net loss

 

 

(110,915

)

 

 

(118,285

)

Adjustments to reconcile net loss to net cash flows

 

 

 

 

 

 

—Depreciation of property, plant and equipment and right-of-use assets and
   amortization of intangible assets

 

 

38,034

 

 

 

37,256

 

—Write-downs of inventories

 

 

1,558

 

 

 

14,258

 

—Impairment loss on trade receivables

 

 

94

 

 

 

461

 

—Share-based compensation

 

 

10,095

 

 

 

16,759

 

—Movements in provisions

 

 

(37,520

)

 

 

10,447

 

—Finance (income) and expenses, net

 

 

11,272

 

 

 

(99,333

)

—Income tax expense

 

 

3,194

 

 

 

3,221

 

—Loss on disposal of property, plant and equipment

 

 

—

 

 

 

317

 

—Impairment related to discontinued construction of production facilities

 

 

1,747

 

 

 

—

 

—Other

 

 

1,307

 

 

 

—

 

Interest received

 

 

6,791

 

 

 

5,028

 

Interest paid

 

 

(18,767

)

 

 

(13,912

)

Income tax paid

 

 

(5,325

)

 

 

(15,001

)

Changes in working capital:

 

 

 

 

 

 

—(Increase)/decrease in inventories

 

 

(15,110

)

 

 

15,059

 

—Decrease in trade receivables, other current receivables, prepaid expenses

 

 

23,164

 

 

 

6,967

 

—Decrease in trade payables, other current liabilities, accrued expenses

 

 

(13,811

)

 

 

(14,721

)

Net cash flows used in operating activities

 

 

(104,192

)

 

 

(151,479

)

Investing activities

 

 

 

 

 

 

Purchase of intangible assets

 

 

(1,439

)

 

 

(2,392

)

Purchase of property, plant and equipment

 

 

(27,483

)

 

 

(49,591

)

Investments in financial assets

 

 

—

 

 

 

(1,651

)

Proceeds from sale of property, plant and equipment

 

 

24,405

 

 

 

—

 

Proceeds from sale of assets held for sale

 

 

—

 

 

 

43,998

 

Other

 

 

774

 

 

 

—

 

Net cash flows used in investing activities

 

 

(3,743

)

 

 

(9,636

)

Financing activities

 

 

 

 

 

 

Proceeds from Convertible Notes

 

 

—

 

 

 

324,950

 

Proceeds from liabilities to credit institutions

 

 

—

 

 

 

176,854

 

Repayment of liabilities to credit institutions

 

 

(2,012

)

 

 

(98,088

)

Payment of loan transaction costs

 

 

(4,965

)

 

 

(32,550

)

Repayment of lease liabilities

 

 

(17,246

)

 

 

(9,133

)

Cash flows (used in)/from financing activities

 

 

(24,223

)

 

 

362,033

 

Net (decrease)/increase in cash and cash equivalents

 

 

(132,158

)

 

 

200,918

 

Cash and cash equivalents at the beginning of the period

 

 

249,299

 

 

 

82,644

 

Exchange rate differences in cash and cash equivalents

 

 

2,192

 

 

 

(378

)

Cash and cash equivalents at the end of the period

 

 

119,333

 

 

 

283,184

 

 

 

 

11

 

 

Reconciliation of IFRS to Non-IFRS Financial measures

 

 

Reconciliation of EBITDA and Adjusted EBITDA to (loss)/profit for the period

(Unaudited)

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

(in thousands of U.S. dollars)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(Loss)/profit for the period

 

 

(34,630

)

 

 

44,011

 

 

 

(110,915

)

 

 

(118,285

)

Income tax expense

 

 

1,389

 

 

 

1,482

 

 

 

3,194

 

 

 

3,221

 

Finance (income) and expenses, net

 

 

4,284

 

 

 

(112,841

)

 

 

11,272

 

 

 

(99,333

)

Depreciation and amortization expense

 

 

12,713

 

 

 

12,559

 

 

 

38,034

 

 

 

37,256

 

EBITDA

 

 

(16,244

)

 

 

(54,789

)

 

 

(58,415

)

 

 

(177,141

)

Share-based compensation expense

 

 

3,301

 

 

 

6,290

 

 

 

10,095

 

 

 

16,759

 

Restructuring costs(1)

 

 

940

 

 

 

3,177

 

 

 

4,575

 

 

 

12,344

 

Discontinued construction of production facilities(2)

 

 

—

 

 

 

—

 

 

 

1,762

 

 

 

—

 

New product launch issue(3)

 

 

6,888

 

 

 

—

 

 

 

12,565

 

 

 

—

 

Legal settlement(4)

 

 

—

 

 

 

9,250

 

 

 

—

 

 

 

9,250

 

Costs related to the YYF Transaction(5)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

375

 

Non-controlling interests

 

 

70

 

 

 

74

 

 

 

172

 

 

 

74

 

Adjusted EBITDA

 

 

(5,045

)

 

 

(35,998

)

 

 

(29,246

)

 

 

(138,339

)
(1)
Relates primarily to severance payments as the Group continues to adjust its organizational structure to the macro environment.
(2)
Relates primarily to non-cash impairments related to discontinued construction of the Group’s production facility in Peterborough, UK, and reversal of previously recognized non-cash impairments related to discontinued construction of the Group’s production facility in Dallas-Fort Worth, Texas.
(3)
Expenses related to a new product launch issue.
(4)
Relates to US securities class action litigation settlement expenses.
(5)
Relates to the YYF Transaction. See the Company’s Forms 6-K filed on January 3, 2023 and March 2, 2023 for further details.

 

 

 

Reconciliation of Free Cash Flow to Net Cash Flows used in Operating Activities

(Unaudited)

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

(in thousands of U.S. dollars)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net cash flows used in operating activities

 

 

(18,179

)

 

 

(38,389

)

 

 

(104,192

)

 

 

(151,479

)

Capital expenditures

 

 

(8,502

)

 

 

(10,949

)

 

 

(28,922

)

 

 

(51,983

)

Free Cash Flow

 

 

(26,681

)

 

 

(49,338

)

 

 

(133,114

)

 

 

(203,462

)

 

12