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    OTLY
    Earnings call· Jun 2026(Q2 FY26)

    Oatly Group AB OTLY

    Jul 22, 2026 Source

    Executive summary

    Oatly Group AB Q2 FY26 — Strong Revenue Growth and Maintained EBITDA Outlook

    Oatly delivered strong Q2 FY26 results, driven by volume growth and positive mix, leading to an upgraded revenue guidance. Despite absorbing Middle East conflict-related cost pressures and increased brand investments, the company maintained its adjusted EBITDA outlook, reflecting confidence in its growth playbook and structural profitability improvements. The strategic review of the China business is ongoing.

    Highlights

    5

    • Revenue grew by 15.2% (12.7% constant currency) in Q2 FY26.

    • Gross margin reached 33.9%, an improvement of 140 basis points compared to last year.

    • Adjusted EBITDA was positive $0.4 million, an improvement of $4 million versus last year.

    • Free cash flow was a negative $0.6 million, an improvement of $4.6 million versus last year.

    • North America constant currency revenue grew 5.9% year-on-year, driven by nearly 2% positive volume growth.

    Concerns

    3

    • The second quarter included headwinds from cost pressure due to the conflict in the Middle East, impacting logistics and packaging.

    • Greater China segment reported a negative $15 million in adjusted EBITDA.

    • Full year 2026 free cash flow is not anticipated to be positive due to phasing factors, including larger inventories and capital expenditures.

    Guidance & targets

    4
    CategoryTargetConfidence
    Constant currency revenue growth
    8% to 10%
    high materiality
    High
    Adjusted EBITDA
    towards the low end of the range of $25 million to $35 million
    high materiality
    High
    FX tailwind to net sales
    approximately 200 to 250 basis points
    medium materiality
    Medium
    Capital expenditures
    $20 million to $30 million
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Europe and International
    Very strong volume-driven growth, outperforming the plant-based beverage market. Contributions balanced from established and expansion markets, with new markets accelerating. Brand reinvestment and cost inflation limited year-on-year adjusted EBITDA growth.
    Constant currency revenue growth: 18%Volume growth: 18%Volume growth (last year Q2): 9.4%Adjusted EBITDA margin: 17.5%New markets growth YoY: 82%Household penetration: increasing
    		—18%—$0.7 million
    North America
    Accelerating growth despite a challenged macro backdrop in retail. Strong out-of-home performance. Significant progress in diversifying customer base, eliminating prior headwind. Proactively managed brand investments and Middle East conflict costs.
    Constant currency revenue growth: 5.9%Volume growth: nearly 2%Adjusted EBITDA increase YoY: $3.1 millionOut-of-home revenue share: 25%Oat milk market share: near-record highPlant-based beverages market share: near-record highOat milk PDP share: 22% (up from 17% last year)Oat milk category sales generated: 30%
    		—5.9%—$7.7 million
    Greater China
    Growth driven by the retail channel, which more than offset strong competition and weak macros in the out-of-home channel. Strategic review is ongoing to accelerate growth and maximize value.
    Constant currency revenue growth: 5.6%Volume growth: 5.5%Sales recovery from last year's decline: 6.6%
    		—5.6%—negative $15 million

    Operational metrics

    15
    Gross margin
    33.9140 bps improvement YoY
    Q2 FY26

    Result of efficiencies, including facility optimization, volume absorption, productivity improvements and favorable mix.

    Adjusted EBITDA
    0.4$4 million improvement YoY
    Q2 FY26

    Improvement despite reinvestments and absorption of headwinds, including from the Middle East conflict. The magnitude of year-on-year improvement was smaller than $8.7 million due to incremental headwinds from the Middle East conflict and anticipated brand reinvestment phasing.

    Volume growth
    11.2
    Q2 FY26

    Overall volume growth contributing to revenue.

    Price/mix
    1.5
    Q2 FY26

    Contribution to revenue growth.

    FX tailwind (revenue)
    2.5compared to 7.5% last quarter
    Q2 FY26

    Foreign exchange tailwind on revenue growth.

    Gross profit increase
    13.7YoY
    Q2 FY26

    Driver of adjusted EBITDA improvement.

    SG&A increase
    9.7YoY
    Q2 FY26

    Partially offset gross profit increase in adjusted EBITDA bridge.

    Corporate expenses
    1lower YoY
    Q2 FY26

    Continuous focus on increasing efficiencies more than offset foreign exchange headwinds.

    Europe & International volume growth
    9.4
    Q2 FY25

    Volume growth in the prior year's second quarter, which Q2 FY26 is now lapping.

    Greater China sales decline
    6.6
    last year

    Segment sales largely recovered from this decline in the current quarter.

    Europe & International penetration growth ahead
    70
    future

    Refers to the percentage of users that still haven't adopted the category, indicating significant growth potential.

    North America portfolio cleaning beverages
    97-98
    Q2 FY26

    Percentage of the portfolio in North America that consists of cleaning beverages with strong velocities.

    North America HCV (historical)
    32
    past

    Historical All-Commodity Volume (ACV) number, now closing into 50s.

    North America oat milk market share
    31highest ever
    Q2 FY26

    Near-record high market share in oat milk, close to being #1.

    North America oat milk penetration
    22
    Q2 FY26

    Penetration of oat milk in the U.S., indicating a large opportunity for category growth.

    Industry KPIs

    7
    MetricValueDetails
    Gross margin33.9%
    Brand platform growthaccelerating
    Organic net revenue growth12.7%
    Retailer trade negotiation statusoff-cycle product uptakes
    Volume mix vs pricing decomposition11.2% volume / 1.5% price/mix%
    Elasticity consumer response commentaryresilient
    Category growth benchmark channel shift datahigh single digits%

    Product announcements

    3
    ProductTypeDetails
    Cold Foamlaunch
    Popcorn, Churros and Coconut flavor Baristalaunch
    Matcha Jell-Oat Shot, Coconut Matcha Cloud, Salty Banana Splitlaunch

    Deals & partnerships

    1
    NespressoSecond iteration of partnership, present in boutiques across multiple markets.coming months

    Second iteration of partnership with Nespresso, present in over 220 boutiques across 26 markets during the coming months.

    Risks & headwinds

    4
    Cost pressure from Middle East conflictQ2 FY26 and H2 FY26

    Consistent with expectations from April; largely fuel-related, impacting logistics and packaging.

    Mitigation: Proactive approach to manage impact, utilizing disruption to evaluate and improve supply chain flexibility.

    Macro headwinds in Greater China foodservice channelQ2 FY26

    Persist, leading to weak macros and strong competition.

    Mitigation: Strategic review ongoing, including potential carve-out, to accelerate growth and maximize value.

    Challenged macro backdrop in North America retailQ2 FY26

    Tight household financial conditions and saturation of protein-fortified products.

    Mitigation: Accelerating growth through portfolio relevance, steady distribution gains, and improved execution; focusing on out-of-home and Gen Z penetration.

    Elevated macro volatilityFY26

    General context for outlook.

    Mitigation: Maintaining strong fundamentals and executing growth playbook while adapting to external factors.

    What to watch in Q3 FY26

    5

    China Strategic Review Completion

    prior to the end of the year
    Currentongoing
    Targetcompletion

    Why it matters

    Will clarify the future structure and value maximization strategy for the Greater China business.

    As it pertains to China, our strategic review is ongoing, and we intend to complete this review prior to the end of the year.

    Q&A highlights

    5

    What is driving the acceleration in revenue growth, specifically whether it's new users, existing users consuming more, or pricing?

    The growth is driven by both existing and new users, customers, and countries across Europe & International and North America. Europe is seeing strong volume-driven growth (18% CCY) outperforming the plant-based market, while North America's accelerating growth (5.9% CCY) is fueled by strong out-of-home performance (25% of segment revenue) and increasing Gen Z penetration in retail, leading to significant share gains in oat milk.

    “We see momentum getting stronger. The specific answer to your question, is it existing or new? It is certainly both -- in both regions, if I focus in North America and in Europe and international is existing and new, with existing consumers and new consumers, its existing customers and new customers, and its existing, I would say, countries and new countries.”

    asked by Kaumil Gajrawala · answered by Daniel Ordonez

    1 min read5 chapters

    Detailed Narrative

    01

    Growth Playbook Success and Innovation

    Oatly's growth playbook has driven strong volume growth and positive mix, reinforcing its identity as a full beverage company. Innovation, including new flavors and formats like Cold Foam, Popcorn, Churros, and Coconut Barista, is expanding relevance in both foodservice and retail. This strategy is successfully attracting younger consumers and driving household penetration, particularly in Europe and International markets.

    02

    Strategic Focus and Profitability Improvement

    The company is actively enhancing its strategic channels, customer relationships, and product portfolio to improve underlying profit margins. Despite absorbing cost pressures from the Middle East conflict, Oatly is consciously investing for growth while maintaining its focus on structural profitability. This approach has yielded positive adjusted EBITDA and significant free cash flow improvement year-over-year.

    03

    Brand Building and Market Engagement

    Oatly is leveraging iconic live events and digital presence to build brand relevance and thought leadership in the beverage industry. Events like 'aftertaste' in New York and 'Oatly on the rocks' in Berlin generated millions of media impressions and reached a broad global audience. These initiatives aim to engage new generations and influence coffee culture and beverage development.

    04

    North America Acceleration and Retailer Engagement

    North America is experiencing accelerating growth, outperforming the broader alternative category, driven by strong out-of-home performance and increasing penetration with Gen Z. The company's growing appeal to retailers is evident in off-cycle product uptakes, where new distribution is being secured outside traditional category reset windows, signaling strong brand momentum and velocity expectations.

    05

    Greater China Strategic Review

    A strategic review of the Greater China business is currently underway, with the goal of completion before the end of 2026. The review is evaluating various options, including a potential carve-out, to accelerate growth and maximize the value of this segment, which continues to face macro headwinds🌐 in the foodservice channel.

    AI-generated summary of the company’s earnings call. Not investment advice.