Oatly Group AB

Good day and thank you for standing by. Welcome to the Oatly Group third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today, John Baumgardner, Vice President of Investor Relations.

Good morning and thank you for joining us today. On today's call are our Chief Executive Officer, Jean-Christophe Flatin, our Global President and Chief Operating Officer, Daniel Ordonez, and our Chief Financial Officer, Marie-Jose David. 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&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 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 release for a reconciliation of non-IFRS financial measures to the most comparable measures prepared in accordance with IFRS. In addition, OLE has posted a supplemental presentation on its website for reference. I'd now like to turn the call over to Jean-Christophe.

Thank you, John, and good morning, everyone. Slide five features our key messages. First, our third quarter tells the story of business resilience. Not only did we deliver strong top-line growth, but we also delivered substantial growth in total adjusted EBITDA, both year-on-year and sequentially, despite another quarter of elevated and tightening cost inflation. Our results exceeded consensus expectations despite this pressure. Second, in Europe and international, volume momentum remains robust. On-trend innovation drives growth, and we believe that our new products are capturing incremental demand both for Oatly and the plant-based category, while attracting younger consumers. In North America, where the macro backdrop remains challenging, We are activating on the control levels as we accelerate retail distribution growth, now at a record high number of distribution points, and we continue to narrow the market share gap in pursuit of category leadership. Third, I'm excited to announce our entry into the wellness space through our new platform of fiber beverages. Our first platform launch planned across both Europe and North America. One of the reasons that our founders chose oats is for its nutritional power, including the fiber naturally present in oats. As many populations consume less fiber than recommended by dietary guidelines, creating what we refer to as being the fiber gap, our fiber platform is designed to offer consumers a convenient and delicious way to incorporate more fiber into their everyday diets. Our fiber line has launched in Europe and arrives in North America in January, 2027. Fourth, our cost structure maintains strong resilience through the third quarter, including absorption of higher costs related to the Middle East conflict, both in Europe and international and North America, which allowed us to deliver our strong quarter three performance. However, the latest wave of logistics and fuel inflation in North America has finally exceeded our capacity to offset. From perspective in the US, These all prices have increased approximately 70% since the beginning of the conflict in the Middle East in February and approximately 40% since early July. This unexpected and sharp acceleration during quarter three combined with broader logistics pressure drives the downward revision to our full year adjusted EBITDA outlook. In response, We continue to engage key mitigation levers, including continued cost efficiencies and product mix, and we will implement incremental pricing effective in the first quarter of 2027. Amid these volatile and challenging macro headwinds, we choose to protect our profit margins and resources to reinvest and fuel our growth. Despite these profit headwinds, We remain on a positive structural trajectory of profitable growth. Our reiteration of 2026 constant currency revenue, despite more difficulty on your comparisons and macro consumer pressure, reinforces our confidence and visibility into our demand generating growth strategy. Turning now to slide six. Here you can see our solid third quarter scorecard for important key performance indicators. Our revenue grew by 9.1% and 8.9% in constant currency. Our gross profit margin reached 34.1%, an improvement of 436 basis points compared to last year. Our adjusted EBITDA was positive 9.4 million and 3.9% of net sales, an improvement of 6.3 million versus last year despite reinvestment and cost inflation. Finally, our free cash flow in the quarter was a negative 18.4 million, a decline from last year outflow of 5.4 million, and attributable to timing elements that NJ will detail in the finance section. Our year-to-date cash flow is evolving consistent with our expectations and our business plan remains fully funded. We maintain focus on achieving positive free cash flow through continued improvement in the P&L, growth in adjusted EBITDA and working capital efficiency. Slide 7 reiterates our focus areas for the rest of 2026. As Daniel will soon outline, not only do we maintain high conviction in the traction of our growth playbook and existing portfolio, but our combined taste and fiber products strongly position us to participate in more consumption occasions across more consumer segments as a full beverage company. In addition, we remain fully mobilized across all parts of the company to mitigate the continued macro volatility and cost headwinds to protect our profit margin and our ability to further fuel our growth momentum. Finally, as it pertains to Greater China, we expect to complete our strategic review by the end of this year as we evaluate a range of options including a potential carve-out. Our goal is to accelerate growth, enhance operational focus and improve our consolidated cash returns whilst maximizing the value of this business. We view North America and other international expansion markets as our priorities for growth and we commend and our management team in Greater China for navigating challenging local headwinds in recent years. We will of course update the market on our progress as necessary. Slide eight summarizes our guidance. For full year 2026, continued execution of our growth playbook underpinned our unchanged outlook for constant revenue growth of 8% to 10%. As discussed, the reduction of our adjusted EBITDA outlook from the prior lower end of 25 million to 35 million to a new range of 16 million to 20 million reflects incremental pressure from fuel and logistics in North America since the end of July. With that, Daniel, over to you.