Oatly(US:OTLY)2025-07-23 20:02PART I – FINANCIAL INFORMATION Financial Statements The company reported revenue growth and a net loss for Q2 and H1 2025, with a slight decrease in total assets and cash as of June 30, 2025 Consolidated Statement of Operations Oatly's Q2 2025 revenue increased 3.0% with improved gross profit and narrowed operating loss, but higher finance expenses led to an increased net loss Statement of Operations Highlights (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 208,354 | 202,195 | +3.0% | 405,884 | 401,350 | +1.1% | | Gross Profit | 67,625 | 58,956 | +14.7% | 129,955 | 112,854 | +15.2% | | Operating Loss | (22,116) | (39,079) | -43.4% | (40,707) | (67,492) | -39.7% | | Loss for the period | (55,946) | (30,441) | +83.8% | (68,477) | (76,285) | -10.2% | | Basic and diluted EPS ($) | (0.09) | (0.05) | - | (0.11) | (0.13) | - | Consolidated Statement of Financial Position As of June 30, 2025, Oatly's total assets slightly decreased, cash and cash equivalents declined, while total liabilities increased primarily due to Convertible Notes, leading to a decline in total equity Financial Position Summary (in thousands of U.S. dollars) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | 803,055 | 803,980 | | Cash and cash equivalents | 67,931 | 98,923 | | Total Liabilities | 706,336 | 697,857 | | Convertible Notes | 328,981 | 324,395 | | Total Equity | 96,719 | 106,123 | Consolidated Statement of Cash Flows For H1 2025, net cash used in operating activities significantly decreased, while investing activities shifted to an outflow, resulting in an overall decrease in cash and cash equivalents Cash Flow Summary for Six Months Ended June 30 (in thousands of U.S. dollars) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash flows used in operating activities | (15,005) | (86,013) | | Net cash flows (used in)/from investing activities | (10,220) | 858 | | Cash flows used in financing activities | (8,151) | (20,213) | | Net decrease in cash and cash equivalents | (33,376) | (105,368) | Notes to Financial Statements Key notes detail segment performance, financing arrangements including significant debt from Convertible Notes and a Term Loan, and commitments such as minimum purchase obligations Revenue by Segment - Six Months Ended June 30 (in thousands of U.S. dollars) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Europe & International | 225,858 | 215,948 | | North America | 123,071 | 134,786 | | Greater China | 56,955 | 50,616 | | Total | 405,884 | 401,350 | Revenue by Channel - Six Months Ended June 30 (in thousands of U.S. dollars) | Channel | 2025 | 2024 | | :--- | :--- | :--- | | Retail | 262,567 | 251,371 | | Foodservice | 133,823 | 135,829 | | Other | 9,494 | 14,150 | | Total | 405,884 | 401,350 | - Oatmilk accounted for 91% of the Group's revenue in the six months ended June 30, 2025, up from 89% in the same period in 202437 - The company has minimum purchase commitments with suppliers, which led to volume shortfall expenses of $5.6 million in H1 2025, included in cost of goods sold122 - On March 23, 2023 and April 18, 2023, the Company issued $300 million in 9.25% Convertible Senior PIK Notes due 2028, with an additional $35 million issued to Hillhouse in May 2023105112 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes Q2 2025 revenue growth to Europe & International, with improved gross margin from supply chain efficiencies, while executing strategic actions and maintaining liquidity Recent Developments and Trends The company is executing strategic priorities for profitable growth, including organizational simplification, an asset-light supply chain strategy, and a strategic review of its Greater China business - The company is executing strategic actions to achieve profitable growth, focusing on reducing complexity and implementing an asset-light supply chain strategy132 - The company has initiated a strategic review of its Greater China business, considering options up to a potential carve-out to accelerate growth and maximize value135 - As part of its asset-light strategy, the company discontinued construction of facilities in Peterborough, UK, and Dallas-Fort Worth, Texas, and closed its production facility in Singapore134 Results of Operations Q2 2025 revenue increased 3.0% (down 0.2% constant currency) driven by Europe & International, with gross margin expanding due to supply chain efficiencies and reduced operating expenses contributing to a narrowed operating loss Revenue by Segment - Constant Currency Change (Q2 2025 vs Q2 2024) | Segment | Revenue (As Reported) | % Change (Constant Currency) | | :--- | :--- | :--- | | Europe & International | $118.2M | +5.7% | | North America | $63.2M | -6.8% | | Greater China | $27.0M | -6.6% | | Total | $208.4M | -0.2% | - Gross profit margin increased by 3.3 percentage points to 32.5% for Q2 2025, and by 3.9 percentage points to 32.0% for H1 2025, primarily driven by supply chain efficiencies in Europe & International164165166 - R&D expenses decreased by 57.7% in Q2 2025, mainly because the prior year period included expenses related to a new product launch issue in North America168169 - SG&A expenses decreased slightly by 0.2% in Q2 2025 due to continued cost savings initiatives170 Liquidity and Capital Resources The company's liquidity is supported by cash reserves and undrawn credit facilities, with key debt instruments including a Term Loan B and Convertible Notes, and management believes current liquidity is sufficient for the next 12 months Liquidity Position as of June 30, 2025 (in millions of U.S. dollars) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $67.9 | | Undrawn bank facilities | $221.0 | - The company has a $130 million Term Loan B Credit Agreement, maturing in five years from April 2023, with an interest rate of Term SOFR + 7.5% (with a 2.50% floor)183 - The company has issued over $335 million in aggregate principal of 9.25% Convertible Senior PIK Notes due 2028191199 - Net cash used in operating activities for H1 2025 improved to $15.0 million from $86.0 million in H1 2024, driven by better operating results and working capital improvements207 Non-IFRS Financial Measures The company uses Adjusted EBITDA and Free Cash Flow as key non-IFRS measures, both showing significant improvement in Q2 and H1 2025 due to better operating results and lower capital expenditures Adjusted EBITDA Reconciliation (in thousands of U.S. dollars) | Period | Loss for the period | Adjusted EBITDA | | :--- | :--- | :--- | | Q2 2025 | (55,946) | (3,563) | | Q2 2024 | (30,441) | (10,997) | | H1 2025 | (68,477) | (7,294) | | H1 2024 | (76,285) | (24,201) | Free Cash Flow Reconciliation (in thousands of U.S. dollars) | Period | Net cash used in operating activities | Capital expenditures | Free Cash Flow | | :--- | :--- | :--- | :--- | | H1 2025 | (15,005) | (10,699) | (25,704) | | H1 2024 | (86,013) | (20,420) | (106,433) | Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks including foreign exchange, interest rate, credit, liquidity, and commodity price risk, with detailed disclosures available in the 2024 Annual Report - The company's primary market risks are foreign exchange, interest rate, credit, liquidity, and commodity price risk, with detailed disclosures available in the 2024 Annual Report233 PART II – OTHER INFORMATION Legal Proceedings The company states that it is not currently a party to any material legal proceedings - As of the report date, Oatly is not a party to any material legal proceedings234 Risk Factors A new material risk factor concerns the strategic review of the Greater China business, with no guarantee of success or value enhancement, and potential negative impacts if unsuccessful - A new risk factor has been added regarding the strategic review of the Greater China business, noting that the process may not be successful or enhance shareholder value and could have a negative impact on the business235