After first submitting for its IPO confidentially in February, plant-based meals firm Oatly Group AB is about to go public Thursday.
On Wednesday, Oatly
priced its preliminary public providing at $17 a share, on the excessive finish of its anticipated vary, providing 84.4 million American Depository Shares. Promoting stockholders will provide 19.7 million of these shares.
The pricing valued the corporate at about $10 billion, and can elevate about $1.43 billion. The corporate will commerce on the Nasdaq beneath the ticker “OTLY.”
Oatly Group modified its title from Havre International AB on March 1.
There are 9 lead underwriters for the submitting: Morgan Stanley, JPMorgan, Credit score Suisse, Barclays, Jeffries, BNP Paribas, BofA Securities, Piper Sandler and RBC Capital Markets.
Oatly is backed by private-equity group Blackstone Group, in addition to movie star names like Oprah Winfrey and Jay Z who invested $200 million within the firm final summer season. That funding valued the corporate at $2 billion on the time, in keeping with The Wall Road Journal.
Primarily based in Malmö, Sweden, Oatly has been within the oat milk enterprise for 25 years. The corporate’s product lineup now additionally contains frozen desserts and “oatgurt,” another yogurt.
Toni Petersson has been Oatly’s chief govt since 2012, and can be part of the board as soon as the corporate is publicly-traded.
Christian Hanke, a former Nasdaq Stockholm govt, has served as Oatly’s chief monetary officer since March 2020.
The corporate goes public at a time when local weather change and sustainability points are prime of thoughts for a lot of customers, significantly youthful ones.
“Technology Z and Millennials will develop into the dominant international generations within the coming years, bringing to the market a brand new set of values and expectations,” the corporate stated in its prospectus.
“These mixed components are driving a transparent fast, accelerating development and inflow of recent customers to the plant-based dairy market.”
In response to the Plant Primarily based Meals Affiliation and Good Meals Institute, plant-based-food gross sales reached $7 billion in 2020.
Client Insights information quoted within the prospectus says the plant-based milk class will develop 20% to 25% over the following three years.
Oatly is concentrated on its function in serving to to rework the meals business as a way to be higher for the atmosphere and meet the well being wants of its prospects. The corporate factors out that substituting a cup of Oatly for a cup of cow’s milk reduces greenhouse gasoline emissions, land use and vitality consumption.
Tastewise, which supplies meals and beverage information and intelligence, stated in a December 2020 report that “plant-based every thing” will likely be one of many prime 10 U.S. traits for this yr.
“The primary motive customers flip to plant-based meals and beverage? Well being,” the report stated.
“Plant-based is now not simply an ‘various’ to meat, however fairly a major
class in itself.”
Oatly’s key markets are Sweden, Germany and the U.Okay., although its merchandise had been accessible in 60,000 retail shops and 32,200 espresso retailers around the globe as of December 31, 2020. Among the many locations the place prospects can discover Oatly is Starbucks
the place demand was so excessive there was a scarcity quickly after the espresso chain launched drinks made with the merchandise.
COVID-19 has impacted Oatly’s enterprise as lockdowns around the globe restricted entry to eating places, bars and different eating institutions.
In 2020, Oatly had income of $421.4 million, up from $204.0 million the yr earlier than. Nevertheless, the corporate reported a lack of $60.4 million “reflecting our continued funding in manufacturing, model consciousness, new markets and product growth,” the prospectus stated.
Oatly is classed as an “rising development firm,” which suggests it doesn’t should make the identical disclosures required of larger public firms. A enterprise stays an rising development firm till it reaches quite a few milestones, together with annual income of greater than $1.07 billion.
Oatly warns that it has reported losses during the last “a number of” years and expects working and capital bills to rise “considerably.”
“Our enlargement efforts might take longer or show dearer than we anticipate, significantly in gentle of the COVID-19 pandemic, and we might not achieve growing our income and margins sufficiently to offset the anticipated larger bills,” the corporate stated in its prospectus.
“We incur important bills in researching and creating our progressive merchandise, constructing out our manufacturing and manufacturing services, acquiring and storing substances and different merchandise and advertising the merchandise we provide.”
Listed below are 5 extra issues to find out about Oatly forward of its public debut:
Oatly won’t pay a dividend for the “foreseeable future.” The corporate plans to make use of the proceeds from the providing as working capital, for incremental development, together with enlargement, and different basic functions.
Espresso offered a gateway for Oatly within the U.S. Oatly arrived within the U.S. in 2017. The corporate says it “centered on focusing on espresso’s tastemakers, skilled baristas at impartial espresso retailers” as a approach to enter the market.”
By December 31, 2020, Oatly was in additional than 7,500 retail retailers and 10,000 espresso retailers within the U.S. Income in 2020 totaled $100 million within the U.S.
Oatly may also be present in 11,000 espresso and tea retailers in China, and at greater than 6,000 retail and specialty retailers throughout the nation, together with 1000’s of Starbucks places.
Restricted oat provide may have a monetary affect. Oatly will depend on 5 suppliers for the oats it makes use of, buying this ingredient by millers in Sweden, Denmark, the U.S. and Belgium.
“Now we have prior to now skilled interruptions within the provide of oats from one provider that resulted in delays in supply to us,” the corporate stated, noting that its oat provide can also be susceptible to pure disasters equivalent to drought or floods.
“We may expertise related delays sooner or later from any of those suppliers.”
The corporate additionally will depend on choose suppliers for enzymes, together with one provider that gives an enzyme for a few of Oatly’s merchandise, together with Barista Version oat milk.
The principle elements of the corporate’s merchandise are manufactured in 4 major services as of March 2021, which may be an issue if one thing important occurs at anybody facility.
The dairy market is extremely aggressive. Oatly identifies standard dairy firms, together with Dean Meals Inc.
and Lactalis as opponents, in addition to the rising array of plant-based dairy various firms which are coming into the market, together with soy, almond, hemp and cashew milk manufacturers.
All of those firms are competing for a finite variety of retail shops, espresso retailers, foodservice purchasers and customers.
“To ensure that us to not solely preserve our market place, but additionally to proceed to develop and purchase extra customers, a few of which can be switching from conventional dairy to plant-based alternate options, we should proceed to offer scrumptious, high-quality merchandise, and customers should consider in our imaginative and prescient for a meals system that’s higher for folks and the planet,” the corporate stated.
Oatly’s advertising and COVID-19 could be a hurdle to development. Oatly says that its historical past of “provocative and unconventional advertising and promoting campaigns” has gotten them into sizzling water, together with a 2014 lawsuit filed by the Swedish dairy foyer wherein the courts discovered Oatly was “disparaging to dairy merchandise.”
“The choice resulted in a ban on our additional use of quite a few expressions advertising our merchandise in Sweden, beneath the penalty of liquidated damages of SEK 2 million per expression,” the prospectus stated.
The corporate cautions that future advertising may drive different authorized motion.
Extra just lately, Oatly’s Tremendous Bowl advert made headlines, however largely for scary laughter.