OTLY

Oatly Group AB (publ) - Q1 2026 Financial Summary

Business Context and Reporting Period

This Form 6-K filing presents the unaudited interim condensed consolidated financial statements for Oatly Group AB (publ) for the three months ended March 31, 2026. Oatly is a global manufacturer and distributor of oat-based products, operating primarily through three segments: Europe & International, North America, and Greater China. The company continues to execute a strategy focused on profitable growth, organizational simplification, and an asset-light supply chain model.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 15.6% year-over-year to $228.3 million. On a constant currency basis, revenue grew 8.1%, driven by volume growth in Europe & International and North America retail, partially offset by a decline in Greater China foodservice.
• Margin Expansion: Gross margin improved by 188 basis points to 33.4%, attributed to positive price/mix impacts and supply chain efficiencies in Europe & International.
• Operating Performance: Operating loss narrowed significantly to $11.3 million from $18.6 million in the prior year, reflecting improved gross margins and cost-saving initiatives.
• Segment Performance:
  • Europe & International: Revenue grew 27.1% (reported) to $136.8 million; Adjusted EBITDA was $31.6 million.
  • North America: Revenue grew 3.8% to $62.2 million; Adjusted EBITDA was $0.7 million.
  • Greater China: Revenue declined 2.1% to $29.3 million; Adjusted EBITDA was negative $0.8 million due to foodservice competition and strategic review costs.
• Finance Items: Net finance expenses were $0.9 million, a shift from $9.4 million income in Q1 2025. This change was driven by a reduction in fair value gains on Convertible Notes ($12.3 million gain in Q1 2026 vs. $22.1 million in Q1 2025).

Guidance, Outlook, and Risks

• Strategic Review: The company is conducting a strategic review of its Greater China business, considering options including a potential carve-out. Completion is expected within 2026, though no definitive timetable or outcome is guaranteed.
• Capital Expenditures: Management expects 2026 capital expenditures to range between $20 million and $30 million, primarily for production facility investments.
• Liquidity: As of March 31, 2026, the company held $49.4 million in cash and had $75.2 million in undrawn commitments under its Super Senior Revolving Credit Facility (SSRCF). Management believes liquidity is sufficient for the next 12 months.
• Debt Structure: The company carries significant debt, including $329.6 million in Convertible Notes (fair value) and $179.2 million in Nordic Bonds. The Nordic Bonds include covenants requiring a total net leverage ratio of 2.75:1 for distributions.
• Risks: Key risks include the outcome of the Greater China strategic review, exposure to foreign exchange fluctuations (USD/SEK), rising input costs (oats, packaging), and the ability to achieve sustained profitability.

Investor Verification Checklist

• Greater China Strategy: Verify the timeline and potential outcomes of the strategic review for the Greater China segment, as this impacts future revenue mix and profitability.
• Convertible Note Valuation: Review the fair value adjustments on Convertible Notes, which significantly impact reported net income and diluted loss per share calculations.
• Debt Covenants: Monitor compliance with Nordic Bond and SSRCF covenants, specifically the total net leverage ratio and minimum EBITDA requirements.
• Constant Currency Trends: Analyze constant currency revenue growth (8.1%) versus reported growth (15.6%) to understand the underlying organic performance versus foreign exchange tailwinds.
• Free Cash Flow: Track the improvement in Free Cash Flow (outflow reduced to $11.7 million) to assess the effectiveness of working capital management and cost reduction initiatives.