Oat drink firm Oatly has said that it plans to 'simplify [its] organisational structures' following what it said were third-quarter results that fell below its expectations.
The group reported revenue of $183 million (€176 million) in the third quarter, a 7.0% increase (or +16.7% at constant currency levels), with its EMEA business seeing a 5.5% decline in revenue, Americas up 22.7% and Asia up 16.3%.
The company posted an EBITDA loss of $92.2 million (€88.7 million) in the quarter, compared to an EBITDA loss of $36.5 million (€35.1 million) in the prior year period.
“Third quarter financial results were below our expectations, largely driven by COVID-19 restrictions in Asia, production challenges in the Americas, and continued foreign exchange headwinds," commented Toni Petersson, Oatly CEO. "However, we continue to see strong velocities, year-over-year sales volume growth, and minimal price elasticity globally, which we believe demonstrates the power and resilience of the brand."
The Sweden-based company plans to focus on improving its supply chain network, focusing on its proprietary oat-based technology and capacity, which is expected to reduce the capital intensity of its facilities and have a 'positive effect' on its cash-flow outlook.
It is also seeking manufacturing partners, as it seeks to create a more 'hybrid production network' across select geographies.
In terms of simplifying its organisational structure, Oatly is implementing an overhead and headcount reduction strategy, which will impact up to 25% of the costs relating to the group's corporate functions.
In doing so, it expects annual savings up to $25 million, which will take effect starting in the first quarter 2023.
"To position Oatly for our next phase of growth, we have taken decisive and strategic actions to improve our operational efficiencies in a volatile macroeconomic environment with an even more focused allocation of resources and capital," commented Petersson.
"These initial actions will simplify our organisational structures and the execution of our supply chain network expansion, and we expect more profitable growth going forward with a more asset-light strategy."
© 2022 European Supermarket Magazine – your source for the latest drinks news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.