Abandoning production facility expansion plans in Europe and North America led to a significant fourth quarter loss, although strong EMEA sales bolstered full-year revenues
Oatly has indicated it will press ahead with plans to streamline its global production and supply chains after posting a $405m loss last year.
The group’s total 2023 sales increased 8.5% year-on-year to $783m, driven by respective 16% and 12% sales growth in the EMEA and Americas regions.
However, the Swedish oatmilk manufacturer recorded four consecutive quarterly losses last year, culminating in a $228m deficit in the fourth quarter.
Oatly’s performance was significantly impacted by its decision to abandon production facility expansion plans in Europe and North America in November 2023, which incurred non-cash asset impairment charges of $172.6m and restructuring costs of $29m.
The move forms part of Oatly’s efforts to ‘double down’ on its asset-light production strategy, which involves increasing operational focus while reducing ‘complexity’ and capital expenditure requirements from its supply chain.
“As we enter 2024, our financial guidance calls for solid top-line growth while delivering significant profit improvement. We plan to continue driving toward profitable growth by bringing Oatly to more people and delivering on the expected benefits of our resource re-calibration while maintaining our focus on execution,” said Jean-Christophe Flatin, CEO, Oatly.
In an investor presentation, Oatly highlighted its retail presence in Europe’s emerging specialty coffee markets as key to its sales growth, with the brand now available in 700 specialty cafés across Spain, 292 in Belgium and 240 in France.
The brand expanded its direct-to-consumer partnership with e-commerce giant Amazon in August 2023 to cover Germany, France, Italy, Spain, the Netherlands and Belgium. Oatly also struck a new agreement with Coffee Fellows in October which sees its Oatly Barista Edition served across the Munich-based coffee chain’s 275 stores in Germany, Austria, Belgium, Luxembourg and the Netherlands.
However, revenues in Asia fell for a third consecutive quarter, declining 14% to $131m.
In July 2023, Flatin said Oatly had initiated a ‘comprehensive improvement plan’ to reverse slowing sales across Asia, which included simplifying its product portfolio to focus on its foodservice channel and introducing new measures to reduce operating costs.
Oatly forecasts revenue growth reaching 5-10% in 2024, alongside a full year adjusted EBITDA loss between $35m and $60m.
