OTLY Q1 2026 Earnings Call Summary

Revenue Growth: Increased by 15.6% year-over-year; 8.1% growth in constant currency.
Gross Margin: Improved to 33.4%, up 188 basis points from the previous year.
Adjusted EBITDA: Positive $5 million, an improvement of $8.7 million year-over-year, representing 2.2% of net sales.
Free Cash Flow: Negative $11.7 million, but an $8.8 million improvement compared to last year.
Segment Performance:
- Europe and International: 14.5% growth in constant currency.
- North America: 3.8% growth, with adjusted EBITDA slightly down due to increased costs.
- Greater China: Revenue declined by 6.4%, with negative adjusted EBITDA of $0.8 million.

Oatly is executing a refreshed growth playbook, focusing on expanding its target market beyond lactose-intolerant and environmentally conscious consumers to younger generations.
New product innovations, particularly in the beverage segment, are driving growth, with successful launches of flavored Barista products and Cold Foam Barista.
The company is enhancing its marketing strategy to emphasize taste and health, aligning with consumer trends.
Oatly is actively reviewing its Greater China segment for potential strategic options, including a possible carve-out to maximize value.

Oatly reaffirmed its 2026 guidance, expecting constant currency revenue growth of 3% to 5%.
Anticipated adjusted EBITDA is projected towards the low end of the $25 million to $35 million range due to cost pressures from the Middle East conflict.
Q2 is expected to show lower EBITDA compared to Q1, but management remains optimistic about a stronger performance in the latter half of the year as volatility normalizes.

The ongoing conflict in the Middle East is creating cost pressures, particularly in logistics and packaging, which are expected to impact Q2 results.
Despite positive demand signals, the company is cautious about future growth due to potential volatility in the market and a stronger comparison base in H2 2026.
The North American segment continues to face challenges with warehousing and transportation costs, which could affect profitability.

Management emphasized that demand has not yet been impacted by the Middle East conflict, but they are closely monitoring cost dynamics.
Analysts questioned the sustainability of EBITDA growth in Europe, with management clarifying that Q1's performance was influenced by strategic investments and operational efficiencies.
There is optimism regarding the potential for long-term growth in both North America and Europe, driven by the successful execution of the growth playbook and the introduction of new products.
Management reiterated their commitment to maintaining a disciplined approach to investments while navigating the current economic landscape.

OTLY — Oatly Group AB