An Oatly IPO is filed with the SEC. Earlier this year, investors speculated whether or not the Oprah-backed company would go public. Now, it looks like Oatly stock is officially coming to market.
But is Oatly a good investment opportunity? Here’s what we know…
Oatly IPO: The Business
Oatly boasts it’s the original and largest oatmilk company. Rickard Öste founded the company in 1994, giving it a 25-year history. Headquartered in Malmö, Sweden, Oatly uses 1990s research from Lund University. It also has a patent for its enzyme technology. Oatly uses oats to produce milks, ice cream, yogurts and more.
The company’s Production & Development Center is in Landskrona. Oatly also recently built a new plant in New Jersey. Costing $15 million, the U.S. plant produces 750,000 gallons a day of oat base. Additionally, Oatly announced it’s going to build one of the world’s largest factories in Peterborough. The company plans to build factories across Europe, Asia and the U.S.
Lastly, Oatly has some big names to back it up. This includes celebrity Oprah Winfrey, a supporter of healthy and nutritious diets, as well as investors such as Blackstone Group (NYSE: BX). But nutrition isn’t the only thing Oatly is boasting in its IPO prospectus. The company is also taking an environmental approach to its stock offering.
Oatly Stock: Prospectus Highlights
One of the biggest highlights from the Oatly IPO prospectus is the environmental impact. Oatly states…
Traditional food production is one of the biggest drivers of environmental impact. Food production uses about half of all habitable land on earth, requires large amounts of resources, emits greenhouse gases and harms biodiversity. At the same time, today’s food system—and often our eating habits—does not meet our nutritional needs, driving the prevalence of non-communicable diseases like malnutrition, obesity and heart and vascular diseases. Through our products and actions as a company, we work to grow the plant-based movement and help people shift from traditional dairy to plant-based products and enact positive societal and industry change.
According to the prospectus, consuming a liter of Oatly product compared to traditional cow’s milk results in about 80% less greenhouse gas emissions, 79% less land use and 60% less energy.
Oatly already has a global presence. It offers its products across 20 markets. Oatly also uses multiple channels, including types of retail, foodservice and e-commerce. As of December 31, 2020, the company’s products were offered in about 60,000 retail stores and 32,200 coffee shops. Oatly has partnerships with companies such as Starbucks (Nasdaq: SBUX) and Target ((NYSE:TGT)).
The oat company plans to continue its expansion. It uses a foodservice-led strategy. This means Oatly will use places like coffee shops to build brand awareness through the specialty coffee market. Oatly found the strategy successful in the United Kingdom, U.S., Germany, and China.
Oatly goes on to give 2020 statistics about its global presence. Here are some highlights…
- Contributed the most sales growth to the dairy alternatives drinks category in the United Kingdom, Germany and Sweden
- 53% market share of total sales in the alternative dairy products non-milk in Sweden
- Was the highest selling brand by retail sales value in the U.S., United Kingdom, Germany and Sweden
- Year-over-year (YoY) retail sales growth rates were 99% in the United Kingdom, 199% in Germany and 182% in the U.S.
Oatly is undoubtedly a household name in the non-dairy market. And that can make Oatly stock look like a good opportunity. But that last bullet takes us to a very important part of understanding the Oatly IPO: finances.
The Financial Data
Oatly provided information for its 2019 and 2020 fiscal years. In Oatly’s statement of operations, the company’s revenue in 2019 was $204 million. This increased to about $421.4 million in 2020. That gives a YoY growth rate of 107%. However, Oatly ended with a gross profit of $66.6 million and $129.2 million in 2019 and 2020, respectively.
Some investors are concerned after seeing the prospectus. That’s because Oatly’s financial data doesn’t show the company is profitable. Instead, Oatly has losses for both years. In 2019, loss for the year totaled $35.6 million. And in 2020, it grew 70% to $60.4 million.
However, the IPO market in 2020 showed investors aren’t looking at profitability as much as they used to. As more startups go public earlier in the company’s life, more IPOs are companies without profit. Additionally, Oatly’s cash and equivalents increased from $10.6 million in 2019 to $105.4 million in 2020.
Oatly believes the world is turning more toward non-dairy products and global adoption is only beginning. To get better insight on the company’s finances and market opportunities, you can find it all in the Oatly IPO prospectus. And for those interested in Oatly stock, let’s look at the details.
Oatly IPO Details
On February 23, Oatly announced it confidentially filed with the SEC. The company didn’t give any information about pricing, share number or offering date at the time. But the filing is now public, so we have a little more information.
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Oatly stock is filed to trade on the Nasdaq under Fintech Zoom symbol OTLY. Unfortunately, the Oatly IPO price, date and share number are still unknown. However, the SEC states companies who filed confidentially must make the filing public no less than 15 days before. That means the Oatly IPO date could be sometime after May 4.