Oatly(US:OTLY)2025-07-23 13:02Financial Data and Key Metrics Changes - The company reported a revenue growth of 3% in the quarter, but a decline of 0.2% on a constant currency basis [35] - Adjusted EBITDA was a loss of $3,600,000, which is consistent with the previous quarter's guidance [35] - Gross margin expanded by 330 basis points year-over-year to 32.5%, marking the best quarterly results as a public company [35][36] Business Line Data and Key Metrics Changes - The Europe and International segment grew volume by 9.4%, indicating that the growth playbook is effective [39] - North America experienced a revenue decline of 6.8%, primarily due to changes in sourcing strategy and the largest customer [39] - Greater China saw a constant currency revenue decline of 6.6%, reflecting a challenging macro environment [39] Market Data and Key Metrics Changes - The foodservice side of the Greater China business grew revenue by 12% in the first half of the year [33] - In Europe, the company achieved strong volume-led double-digit revenue growth, with EBITDA margins improving to over 20% in Q2 [15] Company Strategy and Development Direction - The company is focused on three priority areas: reducing costs, igniting top-line momentum, and driving profitability [7] - A strategic review of the Greater China business has been initiated to accelerate growth and maximize value [6][12] - The company plans to continue executing its growth playbook, particularly in North America, despite current challenges [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged slower-than-expected progress in North America and a soft macro environment in Greater China [6] - The company remains confident in its growth playbook and expects to see improvements in the second half of the year [43] - Management emphasized the importance of taste as a barrier to consumption and plans to enhance product offerings accordingly [62] Other Important Information - The company has identified additional SG&A savings, primarily from corporate expenses, to drive efficiencies without harming the business [66][68] - The cash outflow of $5,000,000 in Q2 was the best quarterly performance as a public company, indicating progress in cash management [41] Q&A Session Summary Question: Why is now the right time for the strategic review of China? - Management believes the business is now leaner and stronger, making it a good time to evaluate how to accelerate growth and maximize value [48][49] Question: What is the optimal outcome of the strategic review? - The company is considering a range of options, including a potential carve-out, but will not speculate on the ultimate outcome at this time [49] Question: What are the challenges in North America, and how can they be turned around? - Management noted that while the market is soft, there are early signs of improvement, and they are confident that strategies successful in Europe can be applied in North America [53][55] Question: How are the incremental SG&A savings derived? - Most savings will come from corporate expenses, focusing on efficiency without hurting the business [66][68]