Oatly Announces Further Progress on its Asset-Light Supply Chain Strategy
Oatly Group AB (OTLY) announced the closure of its Singapore manufacturing facility as part of its asset-light supply chain strategy. The closure, affecting the Europe & International segment, aims to improve cost structure and reduce future capital expenditure needs. The company's growth in the Asia-Pacific region will be supported by existing European facilities, expected to increase capacity utilization.
The closure will result in non-cash impairment charges of $20-25 million in Q4 2024 and restructuring costs leading to $25-30 million in net cash outflows through 2027. The company reports improved service rates and gross margins from recent supply chain optimizations, particularly noting significant improvements in their Greater China segment following its separation from the Asian business.
Oatly Group AB (OTLY) ha annunciato la chiusura del suo stabilimento di produzione a Singapore nell'ambito della sua strategia di catena di approvvigionamento leggera. La chiusura, che interessa il segmento Europa e Internazionale, mira a migliorare la struttura dei costi e ridurre le esigenze di spesa capitale futura. La crescita dell'azienda nella regione Asia-Pacifico sarà supportata dagli stabilimenti europei esistenti, che si prevede aumenteranno il tasso di utilizzo della capacità.
La chiusura comporterà oneri di impairment non monetari di 20-25 milioni di dollari nel quarto trimestre del 2024 e costi di ristrutturazione che porteranno a 25-30 milioni di dollari in flussi di cassa netti fino al 2027. L'azienda segnala tassi di servizio e margini lordi migliorati grazie a recenti ottimizzazioni della catena di approvvigionamento, notando in particolare miglioramenti significativi nel segmento Grande Cina dopo la sua separazione dal business asiatico.
Oatly Group AB (OTLY) anunció el cierre de su planta de fabricación en Singapur como parte de su estrategia de cadena de suministro ligera. El cierre, que afecta al segmento de Europa e Internacional, tiene como objetivo mejorar la estructura de costos y reducir las necesidades de inversión futura. El crecimiento de la empresa en la región de Asia-Pacífico será respaldado por las instalaciones europeas existentes, que se espera aumenten la utilización de capacidad.
El cierre resultará en cargas por deterioro no monetarias de 20-25 millones de dólares en el cuarto trimestre de 2024 y costos de reestructuración que llevarán a 25-30 millones de dólares en flujos de efectivo netos hasta 2027. La empresa informa de tasas de servicio y márgenes brutos mejorados gracias a recientes optimizaciones en su cadena de suministro, notando en particular mejoras significativas en su segmento de Gran China tras su separación del negocio asiático.
Oatly Group AB (OTLY)는 자산 경량 공급망 전략의 일환으로 싱가포르 제조 시설의 폐쇄를 발표했습니다. 이 폐쇄는 유럽 및 국제 부문에 영향을 미치며, 비용 구조 개선과 미래 자본 지출 필요성 감소를 목표로 하고 있습니다. 아시아-태평양 지역에서의 회사 성장은 기존의 유럽 시설로 지원될 예정이며, 용량 활용도가 증가할 것으로 예상됩니다.
이번 폐쇄로 인해 2024년 4분기에 2천만에서 2천5백만 달러의 비현금 손배 비용가 발생하며, 재구성 비용으로 2027년까지 2천5백만에서 3천만 달러의 순 현금 유출이 예상됩니다. 회사는 최근 공급망 최적화로 인해 서비스 비율과 총 마진이 개선되었으며, 특히 아시아 사업에서 분리된 이후 중국 본토 부문에서 상당한 개선이 있었음을 보고하고 있습니다.
Oatly Group AB (OTLY) a annoncé la fermeture de son usine de fabrication à Singapour dans le cadre de sa stratégie de chaîne d'approvisionnement légère. La fermeture, qui affecte le segment Europe et International, vise à améliorer la structure des coûts et à réduire les besoins en dépenses d'investissement futures. La croissance de l'entreprise dans la région Asie-Pacifique sera soutenue par les installations européennes existantes, qui devraient augmenter leur taux d'utilisation de capacité.
Cette fermeture entraînera des charges de dépréciation non monétaires de 20 à 25 millions de dollars au quatrième trimestre 2024 et des coûts de restructuration conduisant à 25 à 30 millions de dollars de sorties de trésorerie nettes jusqu'en 2027. L'entreprise indique un taux de service et une marge brute améliorés grâce à des optimisations récentes de sa chaîne d'approvisionnement, notant en particulier des améliorations significatives dans son segment Grande Chine suite à sa séparation de l'activité asiatique.
Oatly Group AB (OTLY) hat die Schließung seiner Produktionsstätte in Singapur im Rahmen seiner kapitalleichten Lieferkettenstrategie bekannt gegeben. Die Schließung, die den Bereich Europa und International betrifft, zielt darauf ab, die Kostenstruktur zu verbessern und künftige Investitionsbedarfe zu reduzieren. Das Wachstum des Unternehmens in der Region Asien-Pazifik wird durch bestehende europäische Anlagen unterstützt, von denen erwartet wird, dass sie die Kapazitätsauslastung erhöhen.
Die Schließung wird nicht zahlungswirksame Wertminderungskosten von 20-25 Millionen Dollar im vierten Quartal 2024 und Umstrukturierungskosten mit sich bringen, die zu 25-30 Millionen Dollar an Nettocash-Abflüssen bis 2027 führen werden. Das Unternehmen berichtet über verbesserte Servicewerte und Bruttomargen durch jüngste Optimierungen in der Lieferkette, wobei besonders signifikante Verbesserungen im Segment Großchina nach der Trennung vom asiatischen Geschäft festgestellt wurden.
- Supply chain optimization leading to improved service rates and gross margins
- Expected improvement in future cost structure
- Reduction in future capital expenditure needs
- Increased capacity utilization in European factories
- Significant improvements reported in Greater China segment performance
- Non-cash impairment charges of $20-25 million in Q4 2024
- $25-30 million in net cash outflows for restructuring through 2027
- Loss of manufacturing presence in Singapore
Insights
The closure of Oatly's Singapore facility represents a significant strategic shift with notable financial implications. The move will result in a
The strategic consolidation of Oatly's manufacturing footprint demonstrates a mature approach to supply chain optimization. By shifting Asia-Pacific production to existing European facilities, the company can leverage economies of scale and improved capacity utilization. This move suggests their European facilities have sufficient excess capacity to absorb the additional volume, indicating previous inefficiencies in the network. The decision to maintain regional focus through the Greater China separation while consolidating production shows a balanced approach between local market responsiveness and operational efficiency. The improved service rates mentioned suggest robust supply chain planning capabilities that can support this consolidation without disrupting product availability.
MALMÖ, Sweden, Dec. 18, 2024 (GLOBE NEWSWIRE) -- Oatly Group AB (Nasdaq: OTLY) (“Oatly” or the “Company”), the world’s original and largest oat drink company, today announced the closure of its Singapore facility in the Europe & International segment. This action aligns with the Company’s asset-light supply chain strategy and is expected to improve the Company’s future cost structure and reduce future capital expenditure needs.
Jean-Christophe Flatin, Oatly’s CEO, commented: “Over the past two years, our supply chain teams have done a good job at improving utilization, efficiency, and reliability while also finding solutions to enable us to gradually expand capacity when needed to support our growing business. These actions have led to strong service rates and improved gross margins. Additionally, our prior decision to separate our Greater China business from the rest of the Asian business has enabled us to increase our local focus and competitiveness, which has led to significant improvements in the health of our Greater China segment.”
He continued, “We expect that the action we are announcing today will capitalize on those collective improvements and further strengthen our ability to ensure that we have the right amount of capacity, when we need it, while being efficient with our capital and costs. We also expect the continued simplification of our operations to enable us to sharpen our focus on execution as we drive toward consistent, structural profitable growth and ultimately deliver on our Company’s mission. On behalf of the entire Oatly team, I want to express my deep gratitude to the team at the Singapore plant for the work they have done over the years.”
Closure of Singapore Facility
As part of the Company’s ongoing evaluation of its Asian supply chain network, the Company has decided to close its manufacturing facility in Singapore, subject to any applicable lender approvals. The facility is part of the Europe & International segment. Following the closure of the facility, the expected growth in the segment’s Asia-Pacific region will be supported by the segment’s existing facilities in Europe. These actions are expected to further increase capacity utilization of the European factories within the Europe & International segment.
As part of the closure of the Singapore facility, the Company expects to incur non-cash impairment charges of approximately
The closure of the facility is expected to improve the Company’s future cost structure and reduce future capital expenditure needs. The Company will discuss additional details on its fourth quarter earnings call in early 2025.
About Oatly
We are the world’s original and largest oat drink company. For over 25 years, we have exclusively focused on developing expertise around oats: a global power crop with inherent properties suited for sustainability and human health. Our commitment to oats has resulted in core technical advancements that enabled us to unlock the breadth of the dairy portfolio, including alternatives to milks, ice cream, yogurt, cooking creams, and spreads. Headquartered in Malmö, Sweden, the Oatly brand is available in more than 20 countries globally.
For more information, please visit www.oatly.com.
Contacts
Oatly Group AB
+46 418 47 55 00
investors@oatly.com
info@oatly.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any express or implied statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding our financial outlook for 2024, profitability improvement, long-term growth strategy, expected capital expenditures, anticipated returns on our investments, anticipated supply chain performance, anticipated impact of our improvement plans, anticipated impact of our decision to discontinue construction of certain production facilities, plans to achieve profitable growth and anticipated cost savings as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate,” “will,” “aim,” “potential,” “continue,” “is/are likely to” and similar statements of a future or forward-looking nature. Forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: successful exit and closure of the Singapore facility and receipt of any applicable lender approvals, our history of losses and inability to achieve or sustain profitability; including due to elevated inflation and increased costs for transportation, energy and materials; reduced or limited availability of oats or other raw materials and ingredients that meet our quality standards; failure to obtain additional financing to achieve our goals or failure to obtain necessary capital when needed on acceptable terms, or at all; failure of the financial institutions in which we hold our deposits; damage or disruption to our production facilities; harm to our brand and reputation as a result of real or perceived quality or food safety issues with our products; food safety and food-borne illness incidents or other safety concerns which may lead to lawsuits, product recalls or regulatory enforcement actions; our ability to successfully compete in our highly competitive markets; reduction in the sales of our oat drink varieties; failure to effectively navigate our shift to an asset-light business model; failure to meet our existing or new environmental metrics and other risks related to sustainability and corporate social responsibility; litigation, regulatory actions or other legal proceedings including environmental and securities class action lawsuits and settlements; changes to international trade policies, treaties and tariffs; global conflict, including the ongoing wars in Ukraine and Israel; changes in our tax rates or exposure to additional tax liabilities or assessments; supply chain delays, including delays in the receipt of product at factories and ports, and an increase in transportation costs; the impact of rising commodity prices, transportation and labor costs on our cost of goods sold; failure by our logistics providers to deliver our products on time, or at all; our ability to successfully execute our cost reduction activities in accordance with our expectations and the impact of such actions on our company; failure to develop and maintain our brand; our ability to introduce new products or successfully improve existing products; failure to retain our senior management or to attract, train and retain employees; cybersecurity incidents or other technology disruptions; risks associated with our operations in the People’s Republic of China; the success of our strategic reset in Asia; failure to protect our intellectual property and other proprietary rights adequately; our ability to successfully remediate previously disclosed material weaknesses or other future control deficiencies, in our internal control over financial reporting; impairments of the value of our assets; potential delisting from Nasdaq; our status as a foreign private issuer; risks related to the significant influence of our largest shareholder, Nativus Company Limited, entities affiliated with China Resources Verlinvest Health Investment Ltd. has over us, including significant influence over decisions that require the approval of shareholders; and the other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 22, 2024 and our other filings with the SEC as such factors may be updated from time to time. Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. Oatly disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.
FAQ
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