Swedish oat drinks maker Oatly narrowed its losses in the first quarter ended 31 March as it delivered a 'solid start' to its financial year.
Adjusted EBITDA losses narrowed to $49.9 million (€45.4 million), improving by $21.5 million (€19.6 million) compared to the first quarter of 2022 and $10.6 million (€9.7 million) compared to the fourth quarter of 2022.
Net loss attributable to shareholders was $75.6 million (€68.8 million), down from a net loss of $87.5 million (€79.7 million) in the same period last year.
Toni Petersson, CEO of Oatly commented, "We delivered a solid start to the year, with an acceleration of growth, sequential gross margin expansion, and an improvement in profitability. Importantly, the supply chain has continued to perform well.
"This strong supply chain performance has enabled us to make progress against our 2023 priorities and start playing offence again."
Quarterly Highlights
The company saw revenue growth of 17.7% year-on-year during the quarter, to $195.6 million (€178.1 million), while gross margin increased by 790 basis points to 17.4%.
The company attributed its performance to continued sold volume growth for products across the three segments, in addition to price increases implemented in the EMEA primarily during the first quarter of 2023 and the Americas in the third quarter of 2022.
Sold volume for the first quarter was 128 million litres, up from 118 million litres in the comparable period.
The company added that it saw revenue growth across the retail and foodservice channels in the first quarter of 2023.
Regional Performance
Oatly's EMEA division saw revenue up 8.5%, to $98.2 million (€89.4 million), in the first quarter, with the retail channel accounting for approximately 84% of the total.
EBITDA increased by $12.0 million (€10.9 million) to a profit of $4.6 million (€4.2 million) compared to a loss of $7.4 million (€6.7 million) in the same period last year.
This increase was driven by higher gross profit as well as lower operating expenses due to decreased branding and advertising expenses.
In the Americas, revenue increased by 36.2% year-on-year, to $64.0 million (€58.3 million), from $47.0 million (€42.8 million) last year, driven by price increases across all customers and channels.
Out of the total, approximately 52% of the revenue was generated by the retail channel.
The company's EBITDA loss narrowed to $11.8 million (€10.7 million) compared to a loss of $23.3 million (€21.2 million) in the comparable period.
In Asia, revenue increased by 16.4% year-on-year during the quarter to $33.4 million (€30.4 million), with the foodservice channel accounting for 65% of the total.
EBITDA loss in the region increased to $18.1 million (€16.5 million), from $16.9 million last year, as higher operating expenses and COVID-19 related factors in China impacted its gross profit margin.
Outlook
Oatly reiterated its guidance for the current financial year and expects revenue growth of 23% to 28% on a constant currency basis compared to full year 2022.
Petersson added, "Looking ahead, we remain focused on our 2023 priorities of accelerating top line growth, continuous improvement in the supply chain, and driving towards positive adjusted EBITDA in 2024.
"In the upcoming quarters, we plan to increase our investments in exciting demand-generating initiatives to ensure that we maintain our momentum in the marketplace."
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