Oatly Group AB Q1 FY2026 earnings call

Blake Mueller introduced the call with Jean-Christophe Rattan, Danielle Ordonez, and Marie-José David. Jean-Christophe highlighted solid quarter one performance, focus on executing the growth playbook, and reaffirmed 2026 guidance. Danielle discussed the Refresh Growth Playbook, focusing on taste leadership, beverage market developers, outdoors communications, and culture-creating experiences. She also talked about growth in Europe, North America, and future plans like leveraging fiber credentials and accelerating new portfolio introduction in the US retail. Marie-José provided financial details on revenue growth components, gross margin bridge, adjusted EBITDA, segment-level detail, and cash flow.

Europe and international grew net sales by 14.5% in constant currency. North America's revenue grew 3.8% in the quarter. Greater China, constant currency revenue declined by 6.4% in the quarter. Revenue grew by 15.6% and 8.1% in constant currency. Gross margin reached 33.4%, an improvement of 188 basis points. Adjusted EBITDA was positive 5 million, 2.2% of net sales. Free cash flow in the quarter was a negative 11.7 million, an 8.8 million improvement versus last year.

Expect constant currency revenue growth of 3% to 5%. Expect adjusted EBITDA towards the low end of the range of 25 to 35 million. Anticipate Q2 to be lower than first quarter with visible negative impact from Middle East conflict, but performance to improve meaningfully in the back half. CapEx remains unchanged in the range of 20 to 30 million for the full year.

Impact of conflict in the Middle East on costs, including fuel prices related to logistics and packaging. Uncertainty and volatility created by the conflict affecting the business. Volatility in the current environment related to the Middle East conflict and its impact on demand and costs.

Q: For MJ, touch on Europe EBITDA delivery in Q1 regarding beneficial timing shifts from reinvestment vs structural sustainability.

A: Q1 is weighted more on investment, branding, selling expenses. Initiatives for LP&A go more for the year.

Q: Danielle, thoughts on health component in brand communications and expansion opportunities.

A: Taste and health have been part of brand voice, focus on younger generations, overlap with non-plant beverages, incrementality from taste and health combined.

Q: Max, updated view on long-term top-line growth for North America and Europe.

A: Europe growth consolidating, new portfolio and channel expansion in established and new markets; North America seeing progress in coffee and food service, category softness in traditional retail but strengthening.

Q: Tom, walk through cost headwinds from Middle East conflict in Q1 and future impact.

A: Middle East conflict brought fuel price related costs like shipping and logistic, packaging costs, net COGS and logistic increase visible in March P&L, expected to be in Q2.

Q: Samu, timeline and measures for North America distribution economics and CAPEX.

A: No specific structural CAPEX required.

Q: Samu, Greater China strategic reviews impact on free cash flow and revenue gross margin for free cash flow.

A: Evaluating options, no allocation of corporate costs to segments.

Q: Andrew, on organic sales growth deceleration and EBITDA in 2Q.

A: Guidance is a balancing act, 2Q likely lower than 1Q, managing current situation with all levers