MALMO, SWEDEN — With its supply chain and capacity issues, particularly in North America, mostly resolved, Oatly Group AB is going on offense. New capacity to meet consumer demand means the company will be seeking to get more products on supermarket shelves and foodservice menus around the world in the year ahead.

This past January, Oatly Group divested some manufacturing assets in North America to Ya YA Foods, Etobicoke, Ont., a contract manufacturer of aseptic food and beverage products.

“Now that the supply chain is back on firmer footing and we have the capacity to meet our estimated demand in the near to medium term, we can focus more on building awareness, trial, repeat and ultimately brand loyalty,” said Toni Petersson, chief executive officer, during a March 15 conference call with analysts to discuss fiscal 2022 results.

The company also announced March 15 it had entered privately negotiated agreements with certain investors to raise $300 million. In addition, the company said it had entered a revolving credit facility worth $125 million.

“When we combine the proceeds from this financing event with the proceeds from the Ya YA Foods transaction, we have raised over $450 million,” said Christian Hanke, chief financial officer. “We intend to use these funds as fuel to drive our growth. The funds will be used for activities such as completing our supply chain network build-out, efficiency programs and entering new markets.”

Daniel Ordonez, chief operating officer, said the capacity issues forced Oatly to be silent in the market for nearly 18 months.

“So, we are coming back,” he said. “… We have a lot of distribution to be gotten out of existing doors — new items in existing doors. Imagine, we average two items per door, at the moment, with a range of four. Imagine now, with (the) available capacity, what we can achieve.”

Petersson added that Oatly will be accelerating in-store promotions in the first quarter and plans to gain “significant visibility and competitiveness.”

While management sees better days ahead, the company struggled in fiscal 2022, ended Dec. 31. Oatly incurred a loss of $393 million, greater than the loss of $212 million the year before.

Annual sales rose to $722 million in 2022, up from $643 million the year before.

Items affecting profitability included supply chain issues that limited production, particularly in North America, COVID restrictions around the world, and an asset impairment charge of $40 million related to the agreement with Ya YA Foods.

In fiscal 2023, Oatly is guiding sales growth of 23% to 28% over fiscal 2022 on a constant currency basis.

“… We believe that our progress in 2023 will set us up for fiscal year 2024 to deliver positive adjusted EBITDA on a full year basis,” Hanke said.

The company also is guiding gross margin expansion throughout fiscal 2023.

“Walking from fourth quarter 2022 to the fourth quarter of 2023, we expect improvement to come from four key buckets,” Hanke said. “Fewer COVID-19-related one-offs in Asia, which we expect to more fully flow through starting in the second quarter as the first quarter is expected to still have some lingering COVID-19 impacts. EMEA price increases, which have already been implemented. Third, improving America's channel mix as we expand distribution. And finally, and an improvement in our cost per liter, driven by improving utilization and co-packer consolidation, net of mid-single-digit inflation. With this, we expect to have the gross margin in the high 20s in the fourth quarter of 2023.”