Oatly Reviews China Operations

Cartons of Oatly dairy-alternative drinks connected waste successful Holetown, Barbados, 15 January 2025. Credit: Jenari / Shutterstock.com

Dairy-alternatives group Oatly is weighing up nan early of its business successful China.

The Sweden-based group said coming (23 July) it would research “a scope of options” for its operations successful China, which see a mill successful nan eastbound of nan country.

“The reappraisal will see a scope of options, including a imaginable carve-out of nan Greater China segment, pinch nan extremity of accelerating maturation and maximising nan worth of nan business,” Oatly said successful a statement. “There is nary definitive timetable for completing nan strategical review.”

In February, Oatly announced it would “discontinue” nan building of its 2nd mill successful China aft deciding it had capable capacity astatine its tract successful Ma’anshan, which opened successful 2021.

Last year, Oatly generated gross of $114.9m from its Greater China business unit, down from $124.7m successful 2023. Group gross was $823.7m successful 2024.

Oatly’s Greater China limb made an EBITDA nonaccomplishment of $31.1m past year, compared to 1 of $65m successful 2023.

The institution announced nan China reappraisal alongside its first-half results, which besides included a trim to its group income forecast.

Oatly is projecting its constant-currency gross will beryllium successful a scope of level to up 1% successful 2025, compared to its erstwhile forecast of maturation of 2-4%.

The institution said nan caller forecast “reflected reduced expectations” for its business successful North America and a “softer-than-expected macro-environment” successful Greater China.

It still expects its group adjusted EBITDA continues to beryllium $5-15m. Last year, Oatly booked a group adjusted EBITDA nonaccomplishment of $35.3m.

Oatly CEO Jean-Christophe Flatin said nan institution “made bully advancement connected our 2025 priorities” successful nan first half of nan year.

“We proceed to thrust costs efficiencies successful our proviso concatenation and overhead structure, and our disciplined execution of our maturation playbook has seen occurrence successful our Europe & International segment, wherever we are seeing apical statement momentum,” Flatin said. “All of these steps are aimed toward our extremity of consistently improved profitability.”

Oatly booked a 1.1% emergence successful first-half gross to $405.9m. Revenues successful North America fell 8.7% but roseate 12.5% successful Greater China. The company’s Europe & International section saw its revenues turn 4.6%.

The group recorded an EBITDA nonaccomplishment of $17.2m, down from 1 of $42.2m successful nan first half of 2023.

Oatly posted a nett nonaccomplishment attributable to shareholders of nan genitor of $68.3m, compared to 1 of $76.2m successful nan corresponding play a twelvemonth earlier.