Oatly CEO unveils how oat milk giant will be spending its IPO billions

Oatly CEO unveils how oat milk giant will be spending its IPO billions

Oatly Group AB, a vegan food and drink maker from Sweden, just raised more than $ 1.4 billion in an initial public offering. American depositary shares of the company opened at $ 22.12, 30% above the IPO price of $ 17. The company has been on an upward trajectory over the past few years, as its oat-based, non-dairy milk percolated out of the hipster coffee-shop scene and into the mainstream American refrigerator.

The king of oat milk Oatly (OTLY) has big plans on how it will spend the $ 1.43 billion or so it raised from a well-received IPO on Thursday. Investors should expect an ambitious plan to expand manufacturing capacity to meet strong demand for Oatly oat milk, long-time CEO Toni Petersson said on Yahoo Finance Live.

“It’s to build supply, to build out our production capacity across the three continents,” Petersson said, referring to the use of its new capital infusion. Petersson – who has been CEO since 2012 – said Oatly has plans to build three new manufacturing sites up until 2023, including ones in Singapore and China.

Oatly priced its initial public offering Wednesday night at $ 17 a share, which was at the high end of estimates. The stock opened at $ 22.12 on Thursday, giving it a valuation of nearly $ 13 billion.

Provided demand stays strong, the new manufacturing capacity should help Oatly reach profitability due to economies of scale. The company’s net loss hit $ 60.4 million in 2020, up sharply from $ 35.6 million a year earlier. Sales surged to $ 421.4 million from $ 204 million in 2019.

Says Petersson on current demand trends, “We see demand across the channels, and if you look at specialty coffee shops it’s higher than pre-COVID [levels] now. It’s still recovering, but still higher than pre-COVID. “

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