Core Insights - Oatly has successfully transitioned from being "structurally unprofitable with slowing growth" to "structurally profitable with accelerating growth," driven by efficiency efforts and a refreshed growth strategy [2] Financial Performance - Oatly reported its first full year of profitable growth with an adjusted EBITDA of $6.8 million and a fourth-quarter adjusted EBITDA of $11 million, supported by margin expansion and a 23% reduction in cost of goods sold per liter [5][12] - Revenue for the full year increased by 4.7% (2.2% on a constant-currency basis), while fourth-quarter revenue grew by 9.1% (4.3% constant currency) [13][12] - Gross margin improved to over 32%, reflecting a 2,100 basis points increase compared to 2022 [5][1] Strategic Initiatives - The company is focusing on a three-pillar strategy that targets younger consumers and narrows its product offerings to beverages, emphasizing taste as a primary driver of adoption [6][4] - Oatly plans to expand its product lineup with flavored Barista options, including caramel and vanilla, and introduce a Barista Cold Foam product [9][10] Market Position and Growth - Oatly has seen rising household penetration for the first time in years and expanded its retail share in Europe, becoming the number one plant-based drink brand in Germany [7] - The company anticipates constant-currency revenue growth of 3% to 5% for 2026, with adjusted EBITDA expected to reach $25 million to $35 million [16] Future Outlook - Oatly expects to improve free cash flow, although it will remain negative in 2026, driven by higher adjusted EBITDA and working capital improvements [19] - A strategic review of the Greater China segment is planned for 2026, which may include a potential carve-out to maximize business value [21]

Financial Data and Key Metrics Changes - Oatly achieved its first full year of profitable growth, with revenue growth of 4.7% and positive Adjusted EBITDA of $6.8 million for the full year [24][25] - In Q4, revenue grew by 9.1%, with a constant currency growth of 4.3%, and gross margin improved to 34.5%, an increase of 580 basis points year-over-year [24][25] - Adjusted EBITDA for Q4 was positive $11 million, which is $17.1 million higher than the same quarter last year [24][25] Business Line Data and Key Metrics Changes - Volume growth in Europe and international segments was 13.9%, contributing to a $9.9 million increase in segment-adjusted EBITDA [26] - North America experienced an 8.8% revenue decline primarily due to a change in sourcing strategy at a large customer, but excluding this customer, the segment grew 10% in the quarter [26] - Greater China saw a slight decline in constant currency revenue, but the food service channel grew by 5% [26] Market Data and Key Metrics Changes - In established markets, Europe and international segments grew by 7%, while expansion markets saw fantastic growth of 54% [17] - North America also achieved solid growth of 7% in both retail and food service when excluding the largest food service customer [17] - Household penetration is increasing, particularly among younger consumers, indicating a positive trend for the brand [19] Company Strategy and Development Direction - Oatly is focused on executing a refreshed growth playbook that emphasizes increased relevance, attacking barriers to conversion, and increasing availability to consumers [13][20] - The company plans to continue investing in new product innovations, including flavored Barista products and matcha offerings, to attract a broader consumer base [21][23] - A strategic review of the Greater China segment is planned for 2026, with options including a potential carve-out to maximize growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stronger profitable growth in 2026, expecting constant currency revenue growth of 3%-5% and Adjusted EBITDA of $25 million-$35 million [12][28] - The company is committed to improving free cash flow, which is expected to be negative in 2026 but will show improvement from 2025 levels [27][28] - Management highlighted the importance of maintaining a culture of efficiency and continuous improvement to support growth [11] Other Important Information - Oatly has reduced its cost of goods sold per liter by 23% and total SG&A by nearly $100 million, reflecting significant restructuring efforts [9][10] - The company is focused on brand-building investments, particularly in the first half of 2026, to support its growth strategy [28] Q&A Session Summary Question: Expectations for North America food service in 2026 - Management noted that they have diversified their customer base and expect continued growth outside of the large customer that has been a drag on performance [33][35] Question: Enhancing protein content in response to competitors - Management emphasized their focus on fiber rather than protein, aligning with consumer trends towards fiber-rich diets [40][41] Question: Drivers of oat milk category declines in U.S. retail - Management acknowledged category softness but highlighted their strong performance and penetration growth, indicating a positive outlook for the brand [46][49] Question: Free Cash Flow expectations and improvements - Management explained that Free Cash Flow has not improved sequentially due to various factors, but they expect significant improvements in 2026 driven by higher Adjusted EBITDA and better working capital management [67][70]

Financial Data and Key Metrics Changes - Oatly achieved its first full year of profitable growth, with revenue growth of 4.7% and adjusted EBITDA of $6.8 million for the full year [24][25] - In Q4, revenue grew by 9.1%, with a gross margin of 34.5%, an increase of 580 basis points compared to the previous year [24][25] - Adjusted EBITDA for Q4 was $11 million, which is $17.1 million higher than the same quarter last year [24][25] Business Line Data and Key Metrics Changes - Volume growth in Europe and International was 13.9%, contributing to a $9.9 million increase in segment-adjusted EBITDA [26] - North America experienced an 8.8% revenue decline primarily due to a change in sourcing strategy at a large customer, but excluding this customer, the segment grew 10% [26] - Greater China saw a slight decline in constant currency revenue, but adjusted EBITDA improved to $1.1 million [26] Market Data and Key Metrics Changes - In Europe and International, constant currency revenue growth accelerated to 14% in Q4 [18] - North America revenue growth accelerated to 10% in Q4 when excluding the largest food service customer [18] - Oatly became the number one plant-based drink brand in Germany, marking significant market share growth [19] Company Strategy and Development Direction - Oatly is focused on executing a refreshed growth playbook aimed at increasing relevance, attacking barriers to conversion, and enhancing availability to consumers [13][20] - The company plans to continue investing in brand-building and product innovation, particularly in the Barista lineup and new flavors [20][21] - A strategic review of the Greater China segment is planned for 2026, with options including a potential carve-out to maximize value [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stronger profitable growth in 2026, expecting constant currency revenue growth of 3%-5% and adjusted EBITDA of $25 million-$35 million [12][29] - The management highlighted the importance of improving free cash flow and maintaining a disciplined approach to investments [8][27] - There is a focus on addressing the fiber deficit in diets, leveraging Oatly's fiber credentials to attract health-conscious consumers [22][42] Other Important Information - The company has reduced its cost of goods sold per liter by 23% and total SG&A by nearly $100 million [9][10] - Oatly's business plan remains fully funded, with expectations for continued improvement in free cash flow despite not achieving positive free cash flow in 2026 [27][28] Q&A Session Summary Question: Expectations for North America food service in 2026 - Management noted that the food service segment outside the large customer now represents 30% of total segment revenue and is expected to continue growing strongly [35][36] Question: Enhancing protein content in response to competitors - Management emphasized their focus on fiber rather than protein, citing a fiber deficit in the Western diet and a growing trend towards fiber-rich products [41][42] Question: Drivers of oat milk category declines in U.S. retail - Management acknowledged category softness in traditional retail but highlighted strong performance in food service and club channels, with a focus on brand investment to drive demand [46][48] Question: Free cash flow improvement expectations - Management explained that free cash flow improvements are expected in 2026 due to higher adjusted EBITDA and better working capital management [52][70] Question: Increasing household penetration among younger consumers - Management attributed the increase in household penetration to the new growth playbook and a focus on making signature drinks available at home [60][61]

Financial Data and Key Metrics Changes - The company achieved its first full year of profitable growth, with revenue growth of 4.7% and 2.2% on a constant currency basis for the full year [23] - Adjusted EBITDA was positive at $6.8 million for the full year, marking a significant improvement [23] - In Q4, revenue grew by 9.1% and 4.3% on a constant currency basis, with a gross margin of 34.5%, an increase of 580 basis points compared to last year's Q4 [23][24] Business Line Data and Key Metrics Changes - Volume growth in Europe and international segments was 13.9%, contributing to a $9.9 million increase in segment-adjusted EBITDA [25] - North America experienced an 8.8% revenue decline primarily due to a change in sourcing strategy at a large customer, but excluding this customer, the segment grew 10% in the quarter [25] - Greater China saw a slight decline in constant currency revenue, but the food service channel grew by 5% [25] Market Data and Key Metrics Changes - The Europe and international segment saw solid growth of 7% in established markets and 54% in expansion markets [16] - North America also achieved 7% growth in both retail and food service when excluding the largest food service customer [16] - Household penetration is increasing, particularly among younger consumers, indicating a positive trend for the brand [18] Company Strategy and Development Direction - The company is focused on executing a refreshed growth playbook that emphasizes increased relevance, attacking barriers to conversion, and increasing availability to consumers [12][19] - Plans for 2026 include completing a strategic review of the Greater China segment and potentially accelerating growth through various options [11] - The company aims to maintain a culture of efficiency while driving growth and impact in a disciplined manner [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stronger profitable growth in 2026, expecting constant currency revenue growth of 3%-5% and adjusted EBITDA of $25 million-$35 million [11][27] - The management highlighted the importance of driving efficiencies and improving free cash flow, which is expected to improve from 2025 levels [26] - The company is optimistic about the potential for growth in the oat milk category, despite current market pressures [45] Other Important Information - The company has reduced its cost of goods sold per liter by 23% and total SG&A by nearly $100 million, reflecting significant restructuring efforts [8][9] - The company plans to increase CAPEX to support growth, particularly in the Europe and International segment [29] Q&A Session Summary Question: Expectations for North America food service in 2026 - Management noted that they have diversified their customer base and expect continued growth outside the large customer that has been a drag on performance [32][34] Question: Enhancing protein content in response to competitor products - Management emphasized their focus on fiber rather than protein, aligning with consumer trends towards fiber-rich diets [39][41] Question: Drivers of oat milk category declines in U.S. retail - Management acknowledged category softness but highlighted their outperformance and increasing household penetration as positive indicators [45][49] Question: Free Cash Flow expectations and improvements - Management explained that improvements in free cash flow are expected in 2026, driven by higher adjusted EBITDA and better working capital management [52][70] Question: Increasing household penetration and its drivers - Management attributed the increase in household penetration to the new growth playbook and a focus on making products relevant to younger consumers [58][60]