Oatly Group's Revenue Increases, but Faces Significant Losses in Mid-2025

Oatly Group AB reported mixed Q2 earnings, highlighting cost efficiency improvements, robust Europe and International growth, and improved gross margin and EBITDA. However, the North America segment declined, and the company reduced its full-year outlook due to slower progress and a challenging consumer environment in Greater China. Oatly is implementing strategic actions to address these issues and maintain financial stability.

Oatly Group AB (OTLY) reported its second-quarter 2025 financial results, showcasing mixed performance with notable improvements in cost efficiency and gross margin, but also facing challenges in the North America and Greater China segments. The company's CEO, Jean-Christophe Flatin, commented on the company's progress and future outlook.

Key Financial Highlights

- Revenue: Revenue increased by 3.0% to $208.4 million compared to the prior year period. However, excluding a foreign currency exchange tailwind of $6.6 million, revenue decreased by 0.2% to $201.7 million.
- Gross Margin: Gross margin improved to 32.5%, up by 3.3 percentage points from the prior year period, primarily driven by improvements in supply chain efficiency in the Europe & International segment.
- Net Loss: Net loss attributable to shareholders of the parent increased to $55.9 million, up from $30.4 million in the prior year period.
- Adjusted EBITDA: Adjusted EBITDA loss improved to $3.6 million, an improvement of $7.4 million from the prior year period.

Segment Performance

- Europe & International: Revenue increased by 12.0% in constant currency, driven by strong top-line momentum. Sold volume increased by 2.8% to 140.4 million liters.
- North America: Revenue declined by 6.8% to $63.1 million, primarily due to slower-than-expected top-line progress.
- Greater China: Revenue decreased by 6.4% to $26.9 million, reflecting a softer-than-expected macro-environment.

Strategic Actions

Oatly is conducting a strategic review of its Greater China business, aiming to accelerate growth and maximize the value of the business. The company also reaffirmed its adjusted EBITDA guidance, expecting it to be in the range of positive $5 million to $15 million.

Full-Year Outlook

The company has revised its full-year outlook due to slower progress in the North America segment and a challenging consumer environment in Greater China. Constant currency revenue growth is now expected to be in the range of approximately flat to +1%, down from the prior expectation of +2% to +4%. Capital expenditures are now expected to be approximately $20 million, compared to the prior expectation of $30 to $35 million.

Conclusion

Oatly Group AB's Q2 results demonstrate a mix of positive and negative trends. While cost efficiency improvements and robust growth in Europe and International segments are notable, the decline in the North America segment and the challenging environment in Greater China necessitate strategic actions. The company's focus on maintaining financial stability through strategic reviews and adjusted guidance reflects its commitment to long-term success.

References

[1] https://investors.oatly.com/news-releases/news-release-details/oatly-reports-second-quarter-2025-financial-results