Oatly(US:OTLY)2025-04-30 20:07Financial Performance - For the three months ended March 31, 2025, the company reported a loss of $12.4 million, compared to a loss of $45.8 million for the same period in 2024, indicating a significant improvement [131]. - The weighted average number of shares outstanding increased to 598,559,840 in Q1 2025 from 595,060,257 in Q1 2024, resulting in a basic loss per share of $0.02, compared to $0.08 in the prior year [131]. - Revenue for the three months ended March 31, 2025, decreased by $1.6 million, or 0.8%, to $197.5 million compared to $199.2 million for the same period in 2024 [163]. - Total revenue for the three months ended March 31, 2025, was $197.5 million, a slight increase of 0.7% compared to $199.2 million in the same period of 2024 [220]. - The company reported a loss for the period of $12.5 million for the three months ended March 31, 2025, compared to a loss of $45.8 million for the same period in 2024 [214]. - The company reported a loss before tax of $9.2 million for the three months ended March 31, 2025, compared to a loss of $45.8 million in the same period of 2024 [222]. - Adjusted EBITDA for the three months ended March 31, 2025, was a loss of $3.7 million, an improvement from a loss of $13.2 million for the same period in 2024 [214]. - Adjusted EBITDA for the total segments was a loss of $3.7 million in Q1 2025, compared to a loss of $13.2 million in Q1 2024 [222]. Cash Flow and Expenses - Net cash flows used in operating activities decreased by $25.5 million to $13.6 million compared to $39.1 million for the same period in 2024, driven by improved operating results and lower negative impact from changes in working capital [206]. - Net cash flows used in investing activities resulted in an outflow of $6.6 million for the three months ended March 31, 2025, compared to an inflow of $7.8 million for the same period in 2024, with investments in property, plant, and equipment amounting to $6.7 million [207]. - Net cash flows used in financing activities decreased by $3.7 million to an outflow of $5.1 million for the three months ended March 31, 2025, primarily due to lower payment of loan transaction costs [208]. - Free Cash Flow improved to an outflow of $20.5 million in Q1 2025, compared to an outflow of $45.3 million in Q1 2024, driven by decreased net cash flows used in operating activities [220]. - Selling, general and administrative expenses decreased by $1.2 million, or 1.6%, to $77.5 million for the three months ended March 31, 2025 [173]. - Research and development expenses decreased by $0.2 million, or 5.4%, to $4.4 million for the three months ended March 31, 2025 [172]. Revenue Breakdown - Oatmilk accounted for 92% of the company's revenue for the three months ended March 31, 2025, up from 89% in 2024 [149]. - Revenue from external customers in Europe & International was $107.7 million, down 2.5% from $110.4 million in the prior year [222]. - North America revenue decreased by 10.6% to $59.9 million from $67.0 million year-over-year [222]. - Greater China revenue increased significantly by 37.6% to $30.0 million, up from $21.8 million in the previous year [222]. - The foodservice channel experienced revenue growth of 5.8% for the three months ended March 31, 2025, while the retail channel accounted for 63.5% of total revenue [164]. Capital Structure and Financing - The company issued $300 million in Convertible Senior PIK Notes with a 9.25% interest rate, maturing in 2028, to strengthen its capital structure [112]. - The fair value of outstanding Convertible Notes to related parties was $152.6 million as of March 31, 2025, down from $174.0 million at issuance [128]. - The company issued $300 million aggregate principal amount of 9.25% Convertible Senior PIK Notes due 2028, with an original issue discount of 3% [190][191]. - The company entered into a new RMB 30 million (equivalent of $4.2 million) working capital credit facility with China Merchants Bank Co., Ltd. Shanghai Branch on March 19, 2025 [202]. - The company has entered into interest rate caps for the full amount of the term loan of $130 million, limiting the impact of interest rate fluctuations on its financial performance [108]. Operational Changes and Strategy - The company has decided to discontinue the construction of production facilities in Peterborough, UK, and Dallas-Fort Worth, Texas, and will close its production facility in Singapore [145]. - The company expects its cost of goods sold to increase in absolute dollars but decrease as a percentage of revenue over time due to scaling and optimizing production [152]. - The gross margin is expected to benefit from a focus on an asset-light supply chain strategy and an improved mix of higher-margin products [153]. - The company aims to expand household penetration and increase repeat purchase rates through advertising and marketing investments [151]. - The company relies heavily on co-manufacturing partners as part of its asset-light business model [138]. - The company maintains a global focus on controllable aspects of the business amid the current macroeconomic environment [146]. Market and Economic Conditions - The primary markets in Europe & International include the UK, Germany, and Sweden, while the US accounts for nearly all revenue in North America [149]. - The company is exposed to macroeconomic risks, including inflation, geopolitical tensions, and supply chain constraints [140]. - The effective tax rate for the three months ended March 31, 2025, was 36.5%, compared to 0.1% for the same period in 2024 [176]. Restructuring and Provisions - The company had cash outflows of $2.9 million related to organizational restructuring and $2.4 million for the closure of the production facility in Singapore during the three months ended March 31, 2025 [111]. - As of March 31, 2025, the company recorded restructuring provisions of $27.6 million, down from $33.1 million at the end of 2024, reflecting ongoing cost management efforts [109].