Swedish oat drinks maker Oatly has reported 2.5% year-on-year growth in revenue to $187.6 million (€175.3 million) in the third quarter of its financial year.
Net income attributable to shareholders of the parent company amounted to $44.0 million (€41.1 million) compared to a net loss of $107.9 million (€101 million) in the year-ago period.
Adjusted EBITDA loss was $36.0 million, which is an improvement of $46.7 million (€43.6 million) compared to the same period last year, the company noted.
Oatly chief executive, Jean-Christophe Flatin, commented, "I am pleased with the progress that we made in the third quarter. Our profitability exceeded our internal expectations and improved sequentially in each segment.
"We are clearly starting to see the positive impacts of the bold actions that we have been taking over the past year, and we remain on track to achieve profitable growth in 2024.”
'Asset-Light Production Strategy'
Oatly added that it has decided discontinue the construction of its new production facilities in the EMEA and Americas.
The decision is expected to increase operational focus, reduce complexity, and reduce the company's capital expenditure requirements.
Flatin commented, "As we move forward, we are doubling down on our asset-light production strategy. After a detailed review of our supply chain networks in EMEA and Americas, we have found ways to service the growing demand by expanding capacity at our existing facilities in a more gradual manner.
"As such, we have decided to discontinue construction on the third production facility in each of the two segments. We believe that this change in our approach will increase our focus by reducing the complexity of the supply chain, which increases our confidence in our longer-term margin targets. We also now expect to have lower capital expenditure requirements, and we expect to spend below $75 million in capital expenditures in each of 2023 and 2024."
Outlook
In the fourth quarter, the company expects to incur non-cash impairment charges in the range of $110 to $150 million and restructuring and other exit costs of approximately $40 to $50 million related to these production facilities.
These restructuring and other exit costs will result in no more than $20 million of net cash outflows over the next two fiscal years, after considering the anticipated proceeds from the sales of certain equipment.
He added, "We are also adjusting our 2023 outlook to reflect an acceleration of our strategic actions, including shifting the customer mix in Americas foodservice and incremental costs related to Asia's strategy reset.
"We now expect full year 2023 constant currency revenue growth to be near the low end of our 7-12% range and fourth quarter gross margin to be in the mid-20% [range]."
