Earnings call transcript: Oatly Q2 2025 reveals revenue miss and stock dip

Oatly Group AB reported its second-quarter 2025 earnings, showing a significant earnings per share (EPS) miss and revenue shortfall against market expectations. The company posted an EPS of -$1.86, far below the forecast of -$0.0406, resulting in a surprise of over 4,481%. Revenue came in at $208.35 million, missing the expected $216.44 million by 3.74%. This led to a 1.05% drop in stock price during the market session, closing at $15.07. However, the stock showed resilience in aftermarket trading, rising 3.47% to $17.57. According to InvestingPro data, the stock has shown strong momentum with a 121% return over the past six months, despite trading near its Fair Value level. InvestingPro analysis reveals 11 additional key insights about Oatly’s financial health and market position.

Key Takeaways

• Oatly’s Q2 revenue was below expectations, with a 3.74% miss.
• EPS showed a significant negative surprise, deviating sharply from forecasts.
• Stock price dipped during market hours but rebounded in aftermarket trading.
• Gross margin improved by 330 basis points year-over-year.
• Adjusted EBITDA loss narrowed to $3.6 million, the best result since going public.

Company Performance

Oatly’s performance in Q2 2025 was a mix of challenges and improvements. While the company experienced a revenue miss, it reported a 3% growth in revenue compared to the previous year. However, on a constant currency basis, revenue declined by 0.2%. The gross margin expanded significantly, marking a 330 basis point increase to 32.5% year-over-year, indicating improved cost management. InvestingPro data shows the company maintains a concerning current ratio of 0.49, with short-term obligations exceeding liquid assets. The company’s total debt stands at $492.61 million, highlighting significant leverage in its capital structure.

Financial Highlights

• Revenue: $208.35 million, down from the forecast of $216.44 million.
• Earnings per share: -$1.86, a stark contrast to the forecasted -$0.0406.
• Gross Margin: 32.5%, up by 330 basis points year-over-year.
• Adjusted EBITDA: Loss of $3.6 million, the best quarterly result as a public company.

Earnings vs. Forecast

Oatly’s actual EPS was -$1.86, significantly below the forecast of -$0.0406, resulting in a 4,481% negative surprise. Revenue also fell short by 3.74%, coming in at $208.35 million against an expected $216.44 million. This substantial miss contrasts with previous quarters where the company had managed to align closer to market expectations.

Market Reaction

Following the earnings announcement, Oatly’s stock price fell by 1.05% during open market hours, closing at $15.07. However, in aftermarket trading, the stock rebounded by 3.47%, reaching $17.57. This movement reflects a mixed investor sentiment, potentially buoyed by positive aspects of the earnings report like improved gross margins and narrowed EBITDA losses. InvestingPro metrics indicate the company’s beta of 1.95, suggesting higher volatility than the broader market. Get access to the comprehensive Pro Research Report, available for Oatly and 1,400+ other US stocks, for deeper insights into the company’s market position and growth potential.

Outlook & Guidance

Oatly reaffirmed its full-year revenue outlook, projecting flat to +1% growth in constant currency terms. The company also maintained its adjusted EBITDA guidance, forecasting a range of $5 to $15 million. Strategic initiatives include a review of the Greater China business and a continued focus on operational efficiency.

Executive Commentary

Jean Christophe Platon, CEO, emphasized progress on 2025 priorities, stating, "We continue to make good progress on our 2025 priorities." Daniel Ordonez, Global President, highlighted challenges in consumer adoption, noting, "Taste remains the number one barrier to consumption for plant-based products."

Risks and Challenges

• Supply Chain Efficiency: Closure of the Singapore manufacturing facility could impact production.
• Market Saturation: North American market shows signs of plateauing.
• Macroeconomic Pressures: Soft consumer environment in Greater China.
• Competitive Pressure: Need to maintain leadership in expanding markets.
• Consumer Preferences: Taste remains a significant barrier to plant-based product adoption.

Q&A

During the earnings call, analysts questioned the strategic review of the Greater China business. Management indicated that multiple options are being considered to maximize shareholder value. Additionally, discussions focused on the North American market’s challenges and potential growth opportunities.

Full transcript - Oatly Group AB ADR (OTLY) Q2 2025:

Conference Operator: Good day, and welcome to the Oatly Second Quarter twenty twenty five Earnings Conference Call.

Conference Participant: All participants will be in a listen only mode. After

Conference Operator: today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Brian Kearney, VP of Investor Relations. Please go ahead.

Brian Kearney, VP of Investor Relations, Oatly: Good morning, and thanks for joining us today. On today’s call are our Chief Executive Officer, Jean Christophe Platon our Global President and Chief Operating Officer, Daniel Ordonez and our Chief Financial Officer, Maurice Jose W. Before we begin, please review the cautionary statement regarding forward looking statements and other disclaimers on slide three, which are integrated into this presentation and include the Q and A that follows. Please also refer to the documents we have filed with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward looking statements made today. Also, please note on today’s call, management will refer to certain non IFRS financial measures, including adjusted EBITDA, constant currency revenue, and free cash flow.

Please refer to today’s earnings release for reconciliation of non IFRS financial measures to the most comparable measures prepared in accordance with IFRS. In addition, OLE has posted a supplementary presentation on its website for reference. I’d now like to turn the call over to Jean Christophe.

Jean Christophe Platon, Chief Executive Officer, Oatly: Thank you, Brian, and good morning, everyone. Slide four has the key messages I want you to take away. First, we continue to make good progress on our 2025 priorities. Igniting top line momentum is our most important priority out of the three, and the actions are working. We are continuing to roll out our growth playbook more broadly, and we continue to see similar results.

While we are confident our playbook will continue to drive results, we are reducing our full year outlook on the top line. This reflects reduced slower than expected progress in our North America segment, as well as a soft macro environment in our Greater China business. Importantly, we plan to drive additional cost efficiencies and keep us on track on the bottom line, and we are reaffirming our adjusted EBITDA guidance. Therefore, we are refining our 2025 guidance. We now expect constant currency revenue growth of approximately flat to plus 1%, adjusted EBITDA in the range of $5,000,000 to $15,000,000 which represents no change compared to our prior outlook, and CapEx of approximately 20,000,000 Finally, we have decided to conduct a strategic review of our Greater China business with the goal of accelerating growth and maximizing value for this part of the business.

Slide five reminds you of our three priority areas. This year, we are focused on reducing costs, igniting top line momentum, and driving profitability. We fully expect our disciplined execution on these priorities areas will set us up for long term value creation. I will start with costs on slide six. We have made good progress in driving efficiencies this year.

In the first half of this year, we have driven down our cost of goods per liter by 10% compared to last year’s first half. And Q2 is our eighth straight quarter of year on year reductions. We believe we still have runway to push it lower. We also continued to reduce our SG and A overhead expenses, which provided us with additional fuel for branding investments. And we have identified additional SG and A efficiencies that will drive more impact later this year.

Overall, I’m pleased with our progress on cost discipline and we will continue to drive out inefficiencies. Slide seven shows the results of our deliberate and disciplined growth focused investments. As Daniel will elaborate further, our Europe and international sales performance is clear proof our refreshed growth playbook is working. When we launched our refreshed playbook late last year, the category growth wasn’t there. In the quarter, our business grew 4.7%, while the category grew 1.9%.

As you can see, the data is even stronger for the last four weeks, where we grew over 7%. And once again, igniting category growth and outgrowing both plant based milks and oat milk. Turning to our third priority, profitability on slide eight. We continue to make good progress on profitability in the quarter. Our adjusted EBITDA improved $7,000,000 year on year in the quarter to minus $3,600,000 which is in line with the guidance we provided on the last quarter’s call.

This continued progress and the actions we are taking to drive the business give us the confidence to reaffirm our full year profitability guidance. Slide nine shows our updated outlook. The biggest takeaway is that we are reaffirming our adjusted EBITDA guidance of $5,000,000 to 15,000,000 which I believe demonstrates that we have good flexibility within our business to deliver on our commitments. While we are adjusting our top line outlook to reflect both slower than expected progress in North America and the continued soft macro environment in Greater China, we continue to believe that our refreshed growth playbook is working and that we are on the right path. The progress we are seeing in the Europe and International segment is clear evidence of that.

Finally, we have initiated a strategic review of our Greater China business. We will consider a range of options, including a potential carve out, with the goal of accelerating the growth and maximizing the value of the business. Our Greater China business has improved over the past few years, and it is much stronger now. It has been a strong contributor, delivered better results, established market leadership, and is now well positioned for the future. We believe in the future potential of this business.

Therefore, we believe now is the right time to conduct this review to help the business reach its future potential. As we conduct this strategic review, we will continue to operate in the region, including our Manchan facility, and we remain committed to our customers, our consumers, and our employees, whilst maintaining the safety and continuity of our operation. I must note, though, there are no assurances that the process will result in any transaction or strategic change. We will update the market on our progress as is necessary and appropriate. Daniel, over to you.

Thank you, JC. Good morning, everyone.

Daniel Ordonez, Global President and Chief Operating Officer, Oatly: Slide 12 shows how the Europe and International segment has been performing. Strong volume led double digit revenue growth in the quarter. This steady volume led growth coupled with reliable operational efficiency pushed the segment’s EBITDA margin from the low double digits in early twenty twenty four to the mid teens in Q4 and Q1 and now north of 20% for quarter two. This segment is now focused on generating incremental consumers demand, which we expect will drive continued profit improvement. Today, I will discuss how we’re driving demands and our plans for the future.

Slide 13 reminds you of the three pillars of our growth playbook. The first is to increase our relevance to consumer. As you saw on my first slide, we have significantly expanded our portfolio from a position of strength and uniqueness out of our iconic Barista Regional Edition. We’re doing so by leveraging new usage occasions and the emerging taste and flavor bonanza that Gen Z is driving and that is evolving coffee into a much broader beverages space. At the same time, our advertising has become simpler, equally arresting and with messaging focused on the barriers to conversion.

The second pillar is to attack those barriers conversion, most notably preconceptions on taste. Anywhere we test blind, we see that around one in two people prefer oatly to cow’s milk in their coffee. This is a very persuasive tool that we expect to intensify in our communication. We add to these our elevated signature drinks experience, so relevant in these new beverages space. And the final pillar is to increase the availability of our products to consumers.

We continue to add new customers and new distribution points every day. We know there is still a tremendous amount of runway ahead of us and we’re relentlessly pursuing it. Slide 14 shows the early results of executing this growth playbook. We started rolling this out in Germany and The UK late last year. Given the cultural relevance of our brand in foodservice channels, the impact of these strategies hitting foodservice first, while retail following.

We drove a strong growth acceleration in the German foodservice channel when we started our refresh strategy. Encouragingly, these strong growth rates have been sustained for several quarters now. Retail is a much larger portion of the German business, and we’re seeing strong results there as well. We grew 5% in the last twelve weeks and a very strong 14% in the last four weeks. On this slide, you can see an in store retail example of how we’re maximizing expanded Barista portfolio to gain incremental distribution and space in store.

This retailer is showing our entire lineup, 1.5 liters, lighter taste, a scannable six pack, organic Barista and original Barista. With this new enhanced portfolio, our distribution has grown over 35% and we’re bringing new consumers into the category. After seeing traction in the first markets, we rolled out this strategy to our third largest European market, Sweden. Sweden is the company’s original market, where we have been operating the longest and where penetration is the highest. Given our long history there, we thought it might be more difficult to drive improvements.

But after deploying the playbook earlier this year, I’m pleased to report that we have started to see solid positive growth in our retail sales. Not only we’re driving growth, but the velocities on our new Barista product are outperforming our own expectations. These results give us confidence to say that there is still much more runway for expansion everywhere, given the significant headspace we have in front of us to gain more penetration and drive further category growth. And this strategy is not only working in countries where we already have a strong presence, it is also working in our expansion markets, where we grew 40% year on year in quarter two as we continue to create the category. From Madrid to Melbourne to Mexico City and everywhere in between, the teams are doing an amazing job connecting with customers and consumers, driving distribution gains and dominating the coffee and beverage culture around the world.

Today, in Paris, two out of three cafes have adopted Oatly driving a headline making category explosion. In Spain, for instance, which is already one of the third largest plant based beverage markets in Europe, our track channel data is growing over 70%, which is pushing the overall category upwards. And in Mexico City, we have taken the massive coffee space by storm and have become the fastest turning retail item in less than two years. We believe these markets have a long runway for growth, and we’re excited to continue bringing the Oatly Magic to more people in more places around the world. To be clear though, while we are pleased with our performance in both established and expansion markets, we’re not satisfied.

We have much bigger expectations on where our business can go. That is why we’re taking this strategy to the next stage. We’re doubling down on taste with the rollout of the Oatly Lookbook as shown on Slide 17. We know one of the biggest barriers to conversion is consumers’ preconceptions on the taste of a plant based product. The Lookbook is helping us breaking down those barriers and drive incremental demands, generating excitement with coats reminiscence to fashion and unexpected recipes that totally changed the way in which consumers view oat milk.

Not anymore an alternative tool, but an exciting campus to enjoy their beverage. There is a taste and flavor bonanza going on in coffee shops around the world with Gen Z leading the way. And our unique barista market developers team who are intimately woven into this space are working hand in hand with our food service customers to revitalize their offering, a win win that builds traffic and ticket growth with provocative, exciting and most importantly, oatly based items on their menus. These are not your grandparents’ cappuccinos. These are premium signature drinks that tap into Gen Z’s obsession with flavor and cold drinks.

Can you imagine any of these drinks with cow’s milk? We don’t think so. Then as these flavors gain popularity, we are launching new products to increase their convenience. This makes the flavor profiles accessible for at home consumption, while also helping us to become the vendor of choice in food service. For example, in Sweden, we have partnered with movie theaters to develop sweet and salty popcorn lattes that consumers can enjoy while there.

These drinks rapidly gained in popularity, and so we launched a popcorn flavored product in no time. As we have moved from food service to retail, the velocities have outperformed our expectations, and now this item will be rolled out across Europe. These new products uses our already amazing Arista products as the chassis and then adds the flavoring near the end of the production process. So our supply chain can execute this customization quickly and efficiently. Slide 19 shows that we don’t stop there.

If you look at the current version of our Lookbook, which is in our company website, you will see many matcha based drinks. And you know, there’s currently an explosion of matcha around the world and we have decided to capitalize upon it. Here you can see the new matcha portfolio that we’re rolling out across Europe as we speak. Not only you will be able to go to your favorite cafe to get an Bosley Rosemary Matcha Latte or a Smoky Matcha, but you will be able to go to your local retailer and get a carton for home use or the small CuteBrick while you’re on the go. Turning now to North America on Slide 21, where we are still in the early stages of implementing our refreshed growth playbook.

While we continue to face the discrete headwinds we mentioned last quarter, including a large customer sourcing strategy shifts and the frozen SKU rationalization that were both greater than planned, we remain confident in the underlying strength of our approach. In fact, excluding these headwinds, the rest of the North America business has grown. We achieved record quarterly retail sales and the highest ever foodservice revenue outside our largest customer. Let me say this straight though, our overall results in North America were below our own expectations. Yes, we made progress, but we had higher expectations.

Given the success we’ve seen in Europe and internationally using the same playbook, we know what’s possible and we remain committed to applying these lessons to drive the consistent performance that we expect from our North American business. We’re being even more thoughtful, more deliberate and more disciplined in executing our strategy to accelerate demand. At the same time, we continue to solidify the operational fundamentals that will generate the muscle to increase investment while we step up execution. Slide 21 shows how we started to roll out this playbook. We began to attack the barrier to conversion that is faced.

Same as in Europe, we have been running these campaigns in high impact areas to capture the opportunity in people’s dormant ultimate preference or don’t, as our U. S. Team calls it. We have also started to roll out the Lookbook with provocative flavors to enhance menus. And over the balance of the year, we will be focused on a continued disciplined rollout of our playbook.

We are confident that with proper execution and future steady investments, this strategy can drive incremental demand. We continue to believe there is a significant opportunity to expand distribution in The U. S. In all channels, and we have exciting upcoming tests with new customers. However, we remain vigilant of the consumer environment and the category dynamics, and we do not expect an immediate infection to growth until the full playbook has been deployed steadily and with sufficient resources for a good period of time.

Turning to the Greater China segment on Slide 22. Our Greater China team continued to execute well in a challenging consumer environment. The foodservice side of the business, which is the largest part of this segment, grew revenue by 12% in the first half and we maintained strong relationship with the market’s largest coffee chains. We have also continued to develop the retail channel with our entrance into club stores. In the quarter, the segment’s retail volume reached an all time high.

I will now turn the call over to Marie Jose. MJ, please.

Conference Participant: Thank you, Daniel. Good morning, everyone. Slide 24 shows an overview of the quarterly P and L. In the quarter, we grew revenue 3%, but declined 0.2% on a constant currency basis. We continued to drive strong margin expansion with Q2 gross margin expanding three thirty basis points year over year to 32.5%.

Our adjusted EBITA was a loss of $3,600,000 in the quarter, which was approximately in line with the first quarter’s level and what we guided to on last quarter’s call. Both our gross margin and adjusted EBITDA are our best quarterly results as a public company. Slide 25 shows the bridging items of our revenue growth. We grew volume by 2.8% in the quarter, which was offset by a 3% decline in pricemix. Foreign exchange was a 3.2% selling.

Slide 26 shows the driver of our year over year gross margin expansion. The benefits of absorption and supply chain efficiencies improved margins by two seventy basis points. This reflects the benefit of closure of our Singapore manufacturing facility in December, as well as volume absorption, productivity efficiencies and improved sourcing. Pricing and product mix added 110 basis points to our gross margin in the quarter. While our revenue bridge that I discussed on the prior slide shows a headwind from pricemix, which drove margin mix benefits in the quarter as we reduced sales in lower margin products and customers and increased sales in higher margin ones.

For example, some of the newer products in large part sizes are dilutive to price mix in the sales bridge but are margin accretive. We experienced a 90 basis point headwind from inflation in the quarter, which was mainly driven by higher labor costs in our European supply chain and certain inputs in North America. Finally, the impact of foreign exchange movements added 40 basis points to gross margin. Slide 27 shows the year over year improvement in our adjusted EBITDA. The $7,400,000 improvement compared to last year’s second quarter was mainly driven by an $8,600,000 increase in gross profit.

The CHF 1,200,000.0 increase in SG and A and over mainly reflects foreign exchange movements, which were the CHF 3,500,000.0 headwind in the quarter. Excluding those FX headwinds, LG and A would have decreased as we continue to reduce our overhead expenses. Slide 28 shows segment level detail. Europe and international grew volume by 9.4%, which highlights that our growth playbook is working. The second quarter was the segment’s all time highest volume quarter.

North America’s 6.8% decline in revenue was driven mainly by the change in sourcing strategy and the segment’s largest customer. The segment’s adjusted EBITDA declined $3,500,000 compared to the prior year, which was almost entirely driven by an increase in branding and advertising. Greater China saw a 6.6% constant currency revenue decline, which mainly reflects the difficult macro environment impact on the consumer. Turning to our balance sheet and cash flow on Slide 29. Our business plan remains fully funded.

As of the end of the quarter, we had CHF 68,000,000 of cash and $221,000,000 of credit facilities. The middle of the slide shows our free cash flow improvement. The Q2 cash outflow of $5,000,000 was our best quarterly performance as a public company and confirms our progress in developing a cash culture mindset in the company. In the quarter, our total trade working capital balance was the lowest since 2021 when our business was much smaller. And our quarterly cash conversion cycle was the best since our IPO, driven by strong processes to manage inventory, collections and payment terms.

I am seeing good progress throughout the company, and we continue to believe there is still room to improve. Slide 30 shows our redesigned outlook, which continues to include the Greater China segment. We now expect constant currency revenue growth in the range of approximately flat to plus 1%. We have reduced our outlook to reflect slower than expected progress in North America execution, as well as softer macroeconomic conditions in the Greater China region. In addition, our prior outlook assumes that foreign exchange would be a 100 basis point headwind to net debt.

Based on recent FX rates and assuming they hold for the balance of the year, we now estimate FX to be an approximately 150 basis point tailwind to full year net sales. For adjusted EBITDA, we are reaffirming the range of positive 5,000,000 to $15,000,000 We continue to expect gross profit dollars to improve in the second half compared to the first half, benefiting from best in class supply chain processes combined with our higher sales. We have also identified additional SG and A savings. We plan to drive these savings by accelerating our work of eliminating inefficient spend in areas such as indirect procurement, which we expect primarily hit the corporate segment, with the impact starting to hit into Q3 and then growing into Q4. While some of these savings are one time in nature, such as incentive pay, we expect a large portion to benefit us beyond this six figure.

Our guidance assumes no direct impact from tariffs since we expect the products that we import to The U. S. To be exempt to The U. S. MTA.

We also assume that the current economic conditions and consumer behavior will remain largely consistent for the rest of the year. Finally, we now expect CapEx to be approximately CHF 20,000,000 for the full year. We have continued to drive efficiencies in our supply chain and we believe this is an appropriate level of investment where we are continuing to invest in our business while being disciplined in our capital. This concludes our prepared remarks. Operator, we are now prepared to take questions.

We will now begin the question and answer session. If you are using

Conference Operator: a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press then 2. The first question today comes from Kamil Gajawala with Jefferies. Please go ahead.

Kamil Gajawala, Analyst, Jefferies: Hey, everybody. Good morning or good afternoon. I guess a couple of things on the decision on the strategic review of China. The first maybe is why is now the right time? But maybe more importantly, what is an optimal outcome look like?

And to give you maybe make it a multiple choice question is, is the preference to sell it, is the preference to raise some capital through a JV, Is the preference to find a strategic that helps improve the condition of the business? If you can maybe just help us out with where you hope to get to with this review.

Jean Christophe Platon, Chief Executive Officer, Oatly: Hi, Camille, Jean Christophe. Thank you so much for the multifaceted question on the same topic. So let me address them one by one. First, why? The why we’re doing that is because we believe in the future potential of this business, and we are looking to maximize shareholder value.

Your second question was, why now? And the why now is that after the reset that we conducted in this business in 2023 and 2024, we believe this business is now leaner and stronger, and therefore it’s a good time to step back and evaluate how to accelerate its growth and maximize its value. The next thing I want to tackle is your question what are we looking for. As we said, we are considering a range of options, including a potential carve out. Of course, we are not going to speculate today on the ultimate outcome of this strategic review, and we will provide updates on this strategic process as appropriate and when relevant.

The final thing I want to insist on is that as we conduct this review, we remain fully committed to our team, to our customers and suppliers in Greater China.

Kamil Gajawala, Analyst, Jefferies: Okay. Great. Got it. So looking forward to hearing about progress. On North America, I think the business was flat excluding business losses or discontinuations.

Flat still sounds like a challenged market to some degree. So why do you think that is? And what do you think you can do turn that around? Again, excluding any of the sort of discontinuations or business losses.

Daniel Ordonez, Global President and Chief Operating Officer, Oatly: Thank you, Camille. Daniel here. Good to speak to you again. Listen, it’s important to accentuate what you said, right? So when we exclude these two one offs that we are going through this year and that we expect to affect us for the year to go on a full year basis, we see a solid performance in a challenged market, as you say.

The market continues to show softness, Camille. But as we discussed, it’s plateauing. The underperformance of the market is plateauing and slightly inflecting that curve, right? So for the future, while in the short term performance is below our expectations and our expectations, as we discussed before, is for the North American segments to be our largest and fastest growing, the opportunity remains intact for two reasons. In one hand, the mechanical growth, be it distribution, be it category growth, and be it operational excellence, it’s still to be deployed, if I’m brutally honest.

On the second hand, we have every confidence that the early signs of significant improvement we’re seeing in Europe can be fully deployed in North America. If you want, I can elaborate why, but the consumer and the demand situation in Europe compared to North America is similar. Beyond the most vegan and climate focused consumers, The barrier beyond those taste continues to be the number one barrier to consumption. North America and Europe are identical. Whether we taste in Germany or The UK or in The US, one out of two Americans prefer oatly to cow’s milk in their coffee.

The brand is equally strong and equally hot in both markets. And also the the way coffee is developing in Europe and in North America is identical. It’s going from the old latte cappuccino, warm, mostly in winter, to a raft of choices and signature drinks, mostly cold. So all of that combined proves that when we are able to execute the playbook and invest accordingly in full Camille, the same dynamics will provide.

Kamil Gajawala, Analyst, Jefferies: Great. Thank you.

Daniel Ordonez, Global President and Chief Operating Officer, Oatly: Thank you.

Conference Operator: The next question comes from John Baumgartner with Mizuho. Please go ahead.

John Baumgartner, Analyst, Mizuho: Good morning. Thanks for the question. Maybe first off, Daniel, if I could come back to North America and just keep on this topic. I think just given the magnitude and duration of the volume declines at this point for the category, we’re four or five years into this. It seems like it’s become less of an issue of maybe reduced frequency by existing households and more just folks leaving the category.

I appreciate the growth playbook and flavor innovation, but to the extent, I I guess to what extent is this weakness just simply the protein content in The US relative to traditional dairy, whether it’s protein and trans GLP-1s, whatever it may be, which might limit the ability or ease of duplicating some of the turnarounds that you’ve highlighted in Europe?

Daniel Ordonez, Global President and Chief Operating Officer, Oatly: That’s a very provocative question. You you made the point as you have done in the past about, you know, frequency and penetration, John, and I totally get it. If we go through some facts, the reality of the penetration numbers is not necessarily showing that. Penetration for oat milk in The US is stable. And in the case of oatly has shown consistent decimals of growth in yearly and monthly penetration.

So there is a relevance and there is a frequency topic that we are addressing and points taken about protein. The reality, as we have discussed in previous calls and one on one, the protein topic is more of a value phenomenon in North America less than a volume phenomenon when you look at the dairy category. We will be hand in hand focused on driving relevance. We don’t make a choice between health, protein, fibers, and we strongly believe that we are focused on driving both penetration and frequency in that order. Taste remains the number one barrier to consumption for plant based products and certainly for oatmeal and plant based meals.

So you will see us without ignoring the point about protein, a lot of focus on the health topic via enhanced fiber content, wholeheartedly driving the taste strategy, which is proven it’s starting to prove to work in in Europe, John.

John Baumgartner, Analyst, Mizuho: Okay. Thanks for that. And then a follow-up on the P and L. You identified these incremental SG and A savings for this year and moving forward as well. Can you detail a bit more where these savings are derived?

I think you mentioned some procurement. But I mean, I guess what prompted these reductions right now? Can you isolate the savings between corporate expenses relative to the individual segments? And then I guess, to what extent should investors feel confident that you’re not cutting too close or begin to sacrifice resources for growth?

Conference Participant: Hey, John. This is Marie Jose. I expected this question, to be honest. But first, as you know, over the past two years, we’ve gone through two big savings programs, which allow us to look at all the details and understanding in a very deep detail our cost structure. So what does this mean?

It means that this approach led us to be in a place where either we want to be aggressive at all costs, which is absolutely not the way that we are looking at it. We are looking at it with the approach where we want to be aggressive, but with the right level of efficiencies and refueling as well the supply. So the way that I want you to think about this is it’s about efficiency without hurting the business, and it’s about what we had identified as additional SG and A savings. With that said, let me double click on this additional SG and A savings. Most of it will come from corporate, just to answer your question.

Yes, it’s a part of the indirect savings, which will come from initiatives, right? I mean, I’m not going to tell you all the initiatives, but it could be just like centralizing some contracts. It could be like professionalizing our way of negotiating. So that’s one thing. The other things are coming from the efficiencies that we have been looking at, analyzing and making sure that they will come through as we go into the year.

So clearly, corporate segment, aggressive as we can without hurting the business on both sides, efficiencies and incremental from indirect. Hope this answer.

Daniel Ordonez, Global President and Chief Operating Officer, Oatly: Great. Thank you very much. This

Conference Operator: concludes our question and answer session. I would like to turn the conference back over for any closing remarks.

Brian Kearney, VP of Investor Relations, Oatly: Great. Thank you, everyone. If you have any follow-up questions, feel free to reach out to me in Investor Relations. Have a great day.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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