Oatly (OTLY) IPO Opens Up 30%

Today's IPO for oakmilk maker Oatly Group AB (NASDAQ: OTLY) opened for trading at $22.12 after pricing 84,376,000 American Depositary Shares (ADSs), each representing one ordinary share, at $17 per share, the top end of the expected $15-$17 range.

The IPO prices suggests a valuation about $10 billion for the entire company. Last year, the company sold a 10% stake to a group of celebrities, including Oprah Winfrey and Natalie Portman, and private equity fund Blackstone for $200 million at a valuation of $2 billion.

The company claims a liter of Oatly product consumed in place of cow’s milk results in around 80% less greenhouse gas emissions, 79% less land usage and 60% less energy consumption.

In 2020, Oatly contributed the highest amount of sales growth to the dairy alternatives drinks category across each of our key markets - the United Kingdom, Germany and Sweden. In the company's home market of Sweden, they had a 53% market share of the total sales in the alternative dairy products non-milk based category as of 2020, according to Nielsen.

2020 year-over-year retail sales growth rates were 99% in the United Kingdom, according to IRI Infoscan, 199% in Germany and 182% in the United States, according to Nielsen.

They believe that global demand for Oatly products has far outpaced their supply. They also believe they are only at the beginning of the transformation of the overall global dairy market, which totals approximately $600 billion in retail value as of 2020, with a large foodservice footprint and burgeoning e-commerce opportunity.

In 2020, the company reported revenue of $421.4 million, a 106.5% increase from $204.0 million in 2019. This growth outpaces year-over-year growth in 2019 of 72.9%, representing accelerating momentum.

In 2020, the company generated gross profit of $129.2 million representing a margin of 30.7% and, as a result of continued focus on growth, a loss for the year of $60.4 million, reflecting its continued investment in production, brand awareness, new markets and product development. Going forward, the company intends to continue to invest in our innovation capabilities, build its manufacturing footprint and expand our consumer base, all supporting its growth trajectory.

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