Oatly Group AB (OTLY) 14 Nov 222022 Q3 Earnings call transcript

Ladies and gentlemen, greetings, and welcome to the Oatly Third Quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator instruction] As a reminder, this conference is being recorded. It is now pleasure to introduce your host, Rachel Ulsh from Investor Relations. ahead. go Please

Hanke, thank will quarter and today's joining on Ordonez, and us are Global Jean-Christophe Good and be President earnings you available conference third Daniel Christian Officer; Executive XXXX Petersson, Operating On Financial call Oatly’s Officer. Toni Flatin, Officer morning, Chief Chief for Chief also and call questions. webcast. for

detailed financial certain from XXst, that constant Securities anticipated and those may to from during Litigation on Please and discussion note the to report today's expectations involve EBITADA, make including results the our forward-looking Commission XX, the SEC those of and in XXXX, growth in revenue. any refer please actual and a the X, statements business Form begin, positions, statements including materially risks of XX-F for course April on non-IFRS time uncertainties today. made from we on These that to reports management adjusted and expressed of XXXX, the differ currency in to could the Act industry cause these ended remember our meaning Reform Exchange the forward-looking with or refer XXXX, management's differ implied events actual that measures, Private call, cost EBITDA, could Form statements other of strategy will filed described statements. and materially period statements year forward-looking ended filed or XXXX the Securities X-K September and time future call, with on operations for for December Before within current company's based results are and the management Please and business beliefs, this report regarding trends, market of and annual savings. risks financial

the substitute IFRS. While isolation, presentation reconciliation, the measures to as non-IFRS Please financial measures with this to IFRS. comparable for a considered and information believes accordance accordance in in The in be non-IFRS information these or investors. presented measures not financial of will with presented is the for financial refer useful for release provide information intended most today's company

addition, presentation Petersson. like on reference. call supplemental turn now over for I'd to posted Toni the Oatly In its to has a website

Rachel. would appreciate to Today, we Christian Daniel, XXXX actions taken quarter and update I update it I you will Thanks an for We future strategic morning. the address review on questions. as Good results available financial third us provide business Jean-Christophe, discuss a and our joining opportunity. organization will Christian performance, be And results. growth and our an outlook. have

a our of As a leaders reminder, These take growth. well in Oakley over joining challenges have focused accomplished issue, faced global short our new and our expectations. quarter the June. industry technical Officer, mainly of join have FX Daniel the Global And August, growth activating multiple outlet in positioning President, driven to that on Operating brand, Since initiatives. of combined ups phase two for due In in experience, Jean-Christophe restrictions results they're at our last earnings years and as fast-growing COVID-XX third and next we ramp consumer call China, Ogden XX in as since Chief in headwinds. US by facility early Ordonez had

even saw shortcomings, our am opportunities. our category regions growth, operational disappointed translate velocities, with and improvement well global more Past a below of on all across as ability that growth quarter, believe resilient. us quarter which continue margin margin profit fell transitory the two consumer growth way underlying I to high sequential resources have current demands environment, goals. encouraged we we years are remains to shortly. complex However, made Yet, see our EBITDA unprecedented X.X% slide environment being allocation macro strong gross third this I our strategic items sharper an third we execution as the leading achieve year-over-year to touch and immediate on of demand and volatile In volume we action expectations. and will company to these decisions volume capital. the worsening why challenges and the gross sales well taught are growth with X, three in have by demand and future an The as This shown XX% hard is due

growth. for prepare of phase next First, the high continued

the pace drive organization and strategy. to to simplicity of more third the light Second and asset profitability with agility

positive walk to With these QX expect goals the and will adjusted XXXX. of with EBITDA exiting we profitability, shortly. path be through focus increased Christian growth on balancing profitability

X, slide forms chain supply the plan a strengths organizational two simplifying structure. network this strategy adjusting to chain fundamental of company's supply expertise with which the and strategy, involves network screens, one is our technology reset Starting proprietary product Turning of in portfolio. core a oat-based our our foundations

by which capital oat-based our capacity, in focusing and Going facilities. our also of our future forward, strategy chain reduce will simplify investment technology our will we the intensity supply

we're a such, hybrid to manufacturing network with and more As production discussions across actively in partners our create are pursuing geographies.

also cash us significantly transitioning capacity enable faster Peterborough expand a plants versus and our more We move to on facilities have This Fort a outlook. to the end our to with It provide are future positive us to Worth hybrid flexibility specifically support growth expected capital is and will hybrid towards network in expenditures flow effect future. and more looking reduce end. to the at

out the In improved project near laid facing cash the quarter, our which CapEx addition to medium flow to already we has old last to term.

related should costs the layers. starting from we to the to EMEA a reorganization up organizational a balanced the $XX functions To corporate start, been profitability QX, for doing overhead equation. and structure have impacting growth we more we of an our structure, executing are XXXX. headcount and globally reduction organizational effect savings which XX% to the regional just to annual base expect to up and fixed group take this, in By cost Moving redoing million

which $XX million up to we organization annual in in We incremental the savings have of of XXXX. additional half the opportunities first identified expect in rest the for

following As part of Supply of departure this chain our assumed supply the network of global has Officer. Chief review, Jean-Christophe oversight Chain the

Daniel oversight assume following evaluate global opportunities to EMEA of global our structure continue departure the President. next and EMEA to While our to recalibrate for We markets of organizational potential our to operations the of growth. phase has

driver we XXXX X As priority. growth. shown beverages. very to remains an the necessary The operating to a this on are taking base being is is prepare phase the that actions and beyond. important oat top we globally, is are slide plant-based still a our next strong, to be growth expected category of It's positioning and growth strengthen Plant remember growing reset we in for to are continues strategic entering

have supply price lower all the spent. not position. able demand, a are point And including in promotional when been leading even strong have we We we to and US, despite still higher have fulfill stable; we velocities the

X, slide dairy a opportunity we to to work Turning see as convert Oatly consumers we whitespace significant globally. users to

conversion new by pioneering drive innovation, expansion to product markets. production brand our new driving and capacity across expanding like expect through reach, to channels entering assets increasing our demand, We presence support

XX, prior increase was compared in business our Now moving $XXX year on $XXX.X the to slide million, to million X% third revenue a quarter period. performance,

the all We currencies XX.X% the the year-over-year we revenue dollar have the However, oat third key the across results In and of $XXX.X markets. versus million. RMB growth saw velocities FX and increased number a regions highest currency was revaluation still one SKU quarter. European to significant million our by impacted volume headwind, constant in and selling across $XX.X mix

and across successfully channel have geographies, new continued out rolled launches also product We expansion.

performance million Turning to with increased environment. to with velocities also ability in proving on Europe $XX.X starting different improving EMEA our impacting we're million. year-over-year volumes in steady drive strong million was approximately by business but In headwinds in and EMEA revenue across the currency Sales $XX.X the constant increased brand category resilience XX. slide We continued growth, quarter region revenue our expectations with market difficult revenue our shares EMEA third $XX.X XX% is the a reflects X% to and quarter. FX with across saw board. third macro the of model the markets line what's

markets store portfolio to which the product XX, DACH. And in activation. the distribution driving brand with and event our of result Turning one, of our slide execution in disruptive focus home existing Barista, through in Two, growth launch and retail distribution synchronization deployment brand, food both and activations. unique Three, Chilled is with of as cream new gain, development on ARAL four, the the ice as service. well

current expansion in the opportunity forward, have our UK, is the markets EMEA Nordics a and DACH, Going consists key The Netherlands. only significant still international we

Co-packer This expansion. to We quarter condition new highest channel in our market continue incurred one-time relate charges slowed and EMEA volume adjustments. macro scrap and

year-over-year elasticity XX.X% our Americas the plant-based expectations. strong the quarter Oatly of Americas Demand US which to to below million, one and milk in the XX. to pricing increased on our was number for minimal with slide $XX.X revenue categories. signs velocity dairy And of toll in action. brand third remains recent Turning

with was in been increase still in we have The progress only upside at XX% Our meet making. significant ACV is sales to by have limited demand. quarter once supply the supply we US driven third by

supply. by limited still are we However,

main production we'll Christian in of Turning impact sell Ogden be has production is fourth baseline for oat The inventory. being expectations. the volumes that touch September three It technical But impact start we'll oat down on is into it so of the a and ran into QX can end led will Ogden guidance weeks. on to at second this to driver quarter, on two ahead we track have been challenges August update did stabilizing We expansion on an in shortly. back also disrupted our rebuilding resolved; one Ogden and of With the XX. issue the have the production progress. since slide baselines of an can which we approximately and

with gap production drive we and improve XXXX. close market and gains expect fill into distribution velocities. more With to to the QX rate expect in our We leading share and volumes volumes

also and on We performance revenue accelerated improvements. based XXXX in margin production expect

Asia on to slide Turning XX.

In million increased revenue constant currency, quarter expectations. year-over-year which below $XX.X is was Asia third revenue our XX.X% Asia $XX.X. to

continued that but top businesses measures policy which with number preventative profitability zero shortened less is having have consumers on a presentation. seeing traveling later not on this Christian will are and expand behavior. resurgence performance, an tightened been The and health line impact changing had have are the business also in restrictions of A outbreaks. only tolerance We consumer impact COVID hours,

including be been continue forward. Asia an in the quarter adapt Asia ecommerce important and continue respectively, environment, sales to XX% XX% commerce. into this restrictive can and representative best retail to resilient this Our we going will sales to team driver Retail has accelerating e our expansion and growth of total and

XX. slide to Turning

E-magazine by for see been Oatly a named the nominated of to and the the continue leading leader pop several power in the being has industry a We outlets. Oatly as Asia. brand as brand food by across other star brand

XX% market have continue September. plant-based plant-based new the in the and number the year-to-date in We to share overall TMALL one plant-based market through on with category category share XX% brand

innovations forming stores Our the QX. of be end in well, to by is XX,XXX expected team the

and partnered recently Mart convenience Asia to With ready abate. to other to ecommerce localized [inaudible] be ramp September, plant-based to is at heavily as And production develop we JD.com. strong. production drinks these enable about will Langfang with continuing third turn across The like From in external including underlying have company would The Family Oatly we also in to today demand Jen call expand production. walk increase remains at drink continue as the the TMALL and the outlook year, on opportunities and the Singapore COVID-XX us through financials the to co-branded facility that pressures started capacity and our remainder markets platforms as and for to to results and to weighs producing standpoint We Christian the the the our two for food across fully to the stores quarter, excited our under Maanshan such brand, over I join of prepackaged international available guidance. products well. growth Asia

with speak good And Toni. It's morning, to everyone. today. you nice Thanks,

on $XXX an of XXXX. million, XX. revenue to of the of slide million, quarter was million $XX.X of to quarter compared $XXX.X XXXX the Revenue in Turning financials third for or increase third X%

increase the Excluding to XX.X% or $XXX.X headwind foreign $XX.X exchange compared revenue currency been an for constant a third period. quarter year have of million, currency would million, prior significant of in the

production to As and were mentioned, revenue third challenges our due due Toni in restrictions results to below quarter Asia COVID-XX. primarily continued Ogden in expectations, market

However, experienced and retail, we service across ecommerce growth food channel.

an compared and sales in growth Moving quarter Americas exchange XX, per third base slide Consolidated in last X% million offset in volume net EMEA, to third promotional increase the amounted was million mainly broad actions growth $X.XX growth XXXX XX% year, volume Asia, liters of Asia. in growth liters XXX volume sold in sales quarter the Americas, XX.X%. the in by $X.XX with compared of foreign XX% third activities to XXXX, and to experienced quarter for XXX in of liter driven to pricing by EMEA. and XXXX, the the of We

We achieve we as net typically quarter or issues compared in As the Ogden period, COVID-XX in well Asia, a decline points. continued facilities liter actions $X expectation. regional sequential point EMEA. our to below Asia. XX.X% to offset continued America the and of XX. is primarily margin did by inflation Gross at XX.X%, had margin gross The margin, had XXX basis highest third production basis gross X.X% the of per driven X,XXX XXXX, million mainly we cost not due anticipated, sales our profit $XX.X was higher the the prior profit of slide in points Compared our reminder, XXX to in followed shown improvement on quarter Americas second year was sequential in basis of decline mention by million, as restrictions margin to pricing and

short XXX COVID-XX of Ogden margin promotional our XXX activities, facilities, challenges our of in inventory impacting Continued production at points. higher Unexpected in co-packer facility underutilization Asia points. term basis restrictions by resulted our basis and positions Asian

And and net and impacted of of which cost channel EMEA basis in XXX scrap volume related in resulted points, which macro be expansion market expected are approximately headwinds charges production non-recurring. highest and basis our XX adjustments other new of co-packer slowed most of to points. items Continued to

macro XXXX We lasting these number improvement on. gross to us have related select well which into gross The ability margin profit in by seen confidence in transitory, margin by the QX XXXX be gives quarter. is driven our we higher as that already, and what gross margin improvement largely in executing actions fourth a key is in achieve expected as to challenges, of are October

inflation. actions pricing continued to First, combat

Second, and oat baseline. driving progress production Millville our Ogden, new steady at

improving Four, chain our a expanding footprint operational our the utilization navigate organizational channel optimizing execution and in network COVID-XX supply lastly, Third, cost our of and and driving with structure. Asia simplified portfolio to efficiencies. product the production uncertainty

at oat-based place. November. Asia, line Some improvements In in utilization are capacity, commercial runs ramped already and taking commenced expansion Millville’s in now Singapore has Americas, is fully in

the XXXX profit improved We our of expect facilities that continued of quarter a and the production pricing fourth as in result in actions And drive sales mix. margin of fixed absorption implementation improved ramp as will gross better should up cost the well expansion.

related lesser quarter million was primarily EBITDA EBITDA gross of to XXXX compared million The quarter EBITDA quarter loss $XX.X $XX.X loss of employee to by third $XX.X total and exchange branding from expense third offset XXXX revenue. consultant expenses to higher XX.X%, to increased extent, of revenue as quarter, the foreign expenses by impact customer of percent quarter to lower-than-expected and driven distribution EBITDA Moving XX, an third was to third million adjusted quarter, ‘XX. loss of a million. the operating lower Adjusted for the profit second of to positive was in In the of rates. $XX.X slide the lower in XXXX loss and XX.X% due compared a the

to as operating improve manage we in We percent with the the actions as expect mentioned costs of closely expenses earlier. quarter, a Toni revenue fourth

However, the benefit not see XXXX. we full will until

of XXXX, flow; balance as $X.X million credit our sheet investments September of and equivalents debt cash short-term million. total $XXX.X to Now cash XX, had and institutions outstanding we focusing and and of cash on

in We facility $XX the any expenditures from million for activities XX, have period. revolving $XXX.X was facility loans excluding September prior during of million, primarily our increased $XXX.X our million higher expend operating period, compare $XXX.X than not months our due driven the to $XX repayment XXXX, approximately to Net to operations. in million XXXX, million credit prior for accordion facing and loss to $XXX.X cash of $XXX XX, September by the institution. an Net to Cap lease Capital ended nine availabilities on activities the year ended used last in used for additional lower the XXXX months reflecting the drawn September million nine liabilities the of year were ended million. compared $XX.X financing was XX, cash million the repayment investment. months credit of nine by to year

increase based guidance million of for to rates revenue and currency, the slide XXXX our to to XX% FX XX% compared Turning XXXX. $XXX this on million exchange compared fiscal updating we of outlook implies expect $XXX or At fiscal X% fiscal of to to $XXX on year XXXX, $XXX constant XX, million year to million, ‘XX. the to of increase now revenue an rates, are guidance XX% year prevailing an revenue

by we revenue in we $XX have and our revenue primarily for Asia, accelerate outlook ability Asia. have guidance previous the we $XX ease limits Our the is as COVID-XX are pressures, have the COVID-XX sales QX $XX $XX our significant transitory, driven million We is current by accelerated momentum, QX challenges believe given of more and million growth. impacting negatively coming in to production in these operational to Americas, in to forecasts, stable QX, challenges opportunities Asia, which and in from sales and our Americas implied in reduction lower-than-expected restrictions million million reduced Americas, for QX, and driven growth

volatile rates currency to difficult and know, are predict. you As exchange

previous the exchange the earnings refer the based September accounting the guidance. presentations spot $XX now details in for for revenue slide on rates. appendix approximately as versus XXXX, change XX, of last is of guidance updated to the of rate Our million on Please

of to the quarter stated improvement compared share fourth ago, we net I XXXX, margin expect sequentially revenue to operating quarter. expenses and a improve in as a the the moments gross few third of As

expect expenditures million expect XXX liters slide finished to fiscal of to run to the XXXX XX, given of capacity goods continue range continue be be fiscal we Moving capital the end we certain of million rate to to $XXX of projects, phasing $XXX to approximately million by in the for production XXXX.

of and the believe of current phasing meet to projects, sources our we needs the of liquidity CapEx sufficient business through that existing capital be XXXX. will our With end

structure, we million. first, $XX to organizational plan, funding which annual expected total our of of terms to in are up savings simplifying our In result is

have projects, to light model. significantly to are Second, network future to CapEx measures supply and reshaped profitability working we our our more and needs. our reduce growth asset actions adjust support chain achieve These capital and will

lowered $XXX extended our until the XX With the raise in these and multiple this We needs, capital RCF capital have amendments reflect million raise actions. requirements tracks. we working XXXX actively clarity our period on capital refined are financing on June to

are in earnings to we quarter Turning position a XXXX not call in to guidance XX, slide until fourth March. our provide

earlier. to our taking, to higher especially guidance, we are we to relates a more I with structure the currently see exiting operating distribution profit geographies and Toni strategic cost actions XXXX. model. the changes than improve long-term improved However, the footprint expect organizational within asset gross QX, to We our as EBITDA And XXXX new a it evaluating to like order discussed we impact less outlined. margin and revenue In capital-intensive get with are improving gross margin path positive we our In be the expand of regards actions to plan XXXX. growth there, in adjusted leverage existing channels, with

closing call Toni Now back turn the for I'll comments. to

demonstrate to the for address we’ve generate grow our and our of issues of disappointed the that confident action continued same to prepare are in quarterly take At your ability the to decisive are revenue. the in results. remain taken to next strength In and now I phase we ready Operator? growth. questions. which With the time, operational review, demand conclusion, we the have brand, to uniqueness and strategy

from Andrew of [Operator line first Barclays. question comes the Instructions] Lazar Our from

like of think longer-term actions off, thanks more around you self-manufacturing I self-manufacturing initial for a story. in to the move a the longer-term some have then targeted asset you're shift to is that, of an I what taking? to self-manufacturing new think, target part Do And key to this start region? light obviously, And given very Great, for margin specific was XX% basically improvement Maybe the of model a was XX%. factor, much. as your look would more geographic target

already construction does improvement of So have sort this margin how completion? under of facilities some aren’t I come And states guess now? these about of or various self-manufacturing kind

Hi, here. is your this Toni Thanks Andrew, question. for

will -- Christian, rest with of margin, double click the me the start off let gross just here. let on I the Just questions

as small concession, will are parties. Now, hybrid to gross -- not concession supply of we into The in terms chain and have by will provide margins. at discussing operations But we this on is small are modest our potentially a margin, a though, transitioning outweighed ready with time various guidance, simplifying execution.

So I can't any on clear give the updates margin. you

whilst finalizing come all back that discussions. the Let's we're to

don't I there's think to there, anything more Toni. add

will back. come We

-- No, of maybe, but the Christian, settlement in terms

obviously will as compared have of a piece I back capacity share Factoring before. will to on to our point. that total come slightly different have

shifts? would focused it. Yes. know the know just magnitude And you specific Got as of that that change yet and Or not how that's make these on do be. region geographic that we didn't any either? then significant I

various Well, facility the at and all specifically the in Fort we're I U.K. looking we're regions. across one U.S., Dallas work working mean,

then and it, just quick clarification. a Got

Christian, I remarks, think earlier then the XQ in improve expansion. you had gross sequentially. mentioned to margins expect And mentioned XQ, margin gross you you prepared

or didn't was that expansion So that. I you. know just Thank hoping if clarify could I you not. made year-over-year

third quarter to improvement what compared is we Sequential meant. the

small Andrew concession much. you What see is the clarify can I of a because just not mentioned margins magnitude. we again potentially

comes Ken of JPMorgan. line next Goldman the Our from from question

pivot some questioning tailwinds, towards right, out were process. his I more the others, point had had of some the having your other there on point, in of terms to build Hi, But a strategy. you talked over laid about about thank you. control Obviously, NTN hybrid more manufacturing. for you economics wanted in line also better to Andrew's that the

some had you supply think I you chain. to entire maybe the control processes build mentioned some flexibility value-added when

understand appreciate choices choices do now. cash word you but have don't some with basis. that you kind sacrifices, I away a I'm comfortable you how right make. end use can as I But do to of to companies pivot. end So the of I just the more need curious veer the want conserve from permanent to to are on

Thanks, No. Ken.

I a question here. think that's great

little So let me elaborate just here. a bit

we our one And are capacity why allow to So faster. number continuously that. growth. me, this this is a There support just of to you three of forward we're we Fundamentally, environment. add me example This adapting of flexibility them. bring will let need just to capacity if more us reasons course. are gives the And taking

first them resource is allocation So decision. of

Now now building heavy cetera. more focus on base us innovation, hybrid a et especially on sales, items is to lift, production branding, our as multiple and just factories end-to-end enables proprietary value-driving put other such

simplify complexity. remove we and So

to easier is we now than co-packers both scale growth. strategic since before have of availability find and the Second,

partners have safety, we more with in security supply. quality of to So work that meaning food qualified and of terms

the to and are Now here, liquidity This does be macro considering want have business We the focused because capital are in our But raise finance this about innovation decision. decision drive and strategic it. not the a hitting going to aggressively want you to we and is sales forward. on ability confident environment. the drive

it's before, and this as hard So now everything you was with it know. even to do difficult

easier to want So ourselves we simplify to execution. things just on make

answer, a just give but want I it long know I So the was to color.

head. color I color places made Chief the then And the wanted hear we'll little circumstances of you. to just you Thank these part give around EMEA by more company. the helpful. about the Typically, that, departures us than a ask individuals. a Can and the Supply Chain That's little more of

Well, we set. are skill continuously evaluating the

complete And on want company. supply combined high-growth also, very on organization As innovation the adding of is businesses focusing we a Daniel both background to leading that that the supporting we people and good continuously a across here. network your of science, JC and global rapidly, in is, grow, regional an really capabilities seeing especially point, chain just is scale. The we functions. transformation benefit And from. Jean-Christophe and sets Jean-Christophe lot that other is solid is to a course, value that, [inaudible] besides building including really, we're the chain, in food has Daniel companies But evaluating are company. various supply organization. we're a something of And the to

next comes question line Our the Parikh from from Rupesh of Oppenheimer.

This morning. Eiler Rupesh. Erica actually on Thanks our Good for questions. is taking for

guess I wanted cost pressures really So I hit quickly. to on just

provide If of some the be there, remains this terms of and those sort where curious what to CPG also you given biggest year. there's that you're at here, latest the And point seeing then color peers Just see helpful. some have would ease? pressure along early maybe reads any starting things can your you next what some lines, in of they're expecting

inflationary across around converting in in what COGS electricity, of pressure, Yes. increase quarter quarter labor. X% third compared direct materials, X% terms the is costs, mean expecting inflation I in terms fourth the of we're to of to

will it's digits. in double at range have And Currently, actions. experienced so the what think the high the is we X% not year, do of that's we're also of seeing to I in going is combat XXXX, And I this continuously into far a So that on add levels to consolidated with pricing which want inflation we to in XXXX. X% same then we're in terms what level what seeing. is

recent on macro slower in the mean seen just there what then about how Great. the maybe looks that seeing of that some in us kind been the your you've and just of slower of behavior that I talked can quarters. lately? conversion you've mean give you're And you an kind and terms seeing conversion update of terms consumer given you've I business, Okay. base impacts in to plant of

is Erica. Thanks, This Toni.

growth still in of stronger in and just So U.S., product Asia, the that has that are our We and on. doors cost is highest dairy Europe that. -- we demand sure some building channels. terms the the or universe. maybe start demand Daniel in still can with that despite our to to clear to it's down have in will positioning velocities underlying can we want double-click partnerships put COVID-XX make in the And of see in strong. foodservice guiding the for to In signs brand adding And Daniel, you retail do nothing

are course. Of the environment experiencing. me and and a that indeed, is extraordinary we is you for thank question. Thank Toni, why this acknowledge It you, pretty let

However, to what the continue we be levels observed remain very and is that very our penetration strong, stable. velocities

don't we see on any that And last call related in the wavering the execution changing improved that. see see the to the we to that we and we also ability category. part, of dynamics our So earnings specifically start

have label restoring in The seen Germany, we growing volume Netherlands, EMEA, growth countries ahead where some of are and the we private in the So also U.K.

is execution, converting based, path consumers into that plant see So improved the and dairy intact. we to with

very are better it's capacity, meet U.S., than know service you me levels, the well, As which supply in the all improving. about

from line comes from the of Brian next Cowen Company. & Our Holland question

on good at thanks, I Lazar's question Andrew to up morning. wanted Yes, follow the top.

around wanted hybrid particular, in to prepared production little mentioned, remarks, Texas, when discussing a try during network. you you just I color to a to called Toni, your get I more out the more pivot think that.

could given like? some of is sort Would think Texas was about Andrew what construction. under are that asking under look facility how leaseback? I these the So of And be evolves facilities a yet? partnership construction this manufacturing a

plants in from get situation sense taking building shifts with of of if still the capacity partners working sort Oatly a from just capacity to to trying or or, and you're out co-manufacturers maybe these there? all essence, just So

Hi, there.

a question. Thank good you. that's So

is here what here. it we all, forward. first growth balancing and of volumes all, or will to the an not of and on calibrating protect we're do and And going growth, cost going First growth have forward rate impact

actively In terms Worth we we or goes listing like and about that But what now model, in building very to in also of had hybrid into we and Texas, is thinking yes, Singapore, as there. are Peterborough. pursuing had are turn Fort to for we -- is

bit? Now JC, add a you maybe little want

Hi, Toni. you, Thank Brian.

responsibility cases, one working the strategic second other other And we the where Peterborough process. Talaris really the take in course, question, our of U.K. that that and find we for we part model, U.S. put in Brian, we in is the parts. answer currently scope at looking are proprietary ownership what then we for to scope-wise, your right both we In so filling building is are the are to And partner And partners. partners the with oat-based hybrid actively also of call strategic

as a way is we -- to intent see [inaudible] nurture well, to served exactly same model. and think I It follow has great that the So for the us we

Maybe How to recent Great. that fair said several talk simultaneously. accelerated I customers the fill U.S. then your just appear getting to at to we're are competitors with mill this the resets, a a in is now shelf the better space meaningfully way, decelerate tracked you to points customers for term? about this by to are another And color I of shelf channels better point versus there. dynamic space? seeing position maybe that it distribution opting point to give supply much lack punished to commensurate at say appreciate in of your is today, oat wanted total the who of inability that peers

I take here Daniel that, again. Brian,

don't very market level that on and that XX velocities we X add any some you're the of development, me the we the issues. is share and rightfully. that. impact weeks, last where effects, the any share Demand we in gaining we're best see Let of And see the service asking details and resilient proof the U.S. see recent in despite remain

exactly, already. we are with do service levels, said, exactly of and see we there. The the forward you the you're call. more to to on what which next that's you that's some have earnings as look the seeing improving impact sharing TDPs with So in

Brian, just to very be clear.

supply and that related to balancing is remember channel. it are Now supply between food service still we also retail and

comes Our Dickerson from of next Rob Jefferies. question the from line

Great, thanks so much.

remarks helpful. willing needed be prepared Christian. incremental capital, if other just I thought in would the tracks whatever kind also over Just a of you of or, kind question briefly for for on to say, that, you're say I heard expound multiple actually time financing let's say if looking you into maybe could you,

have to are been mean more tracks, working actively mean, we I will multiple and financing one on share. I think clarity No. provide we when more which saying we I've is I example recently is we're we $XX just in working million, there. remarks very that for But providing -- facility our credit actively in signed confident. credit a flexibility local Asia we're more prepared and on

We also shareholders well. our have as the support from

prior really that hybrid some two point, sounded required of capital in we the all shifting of that previously out kind to the terms I projects thrown had facilities approximately, say, mean, more CapEx. the When number end-to-end. the $XXX complete enough. at Fair to think a so like I Okay. think million you are or of needs in it versus development about the for let's just kind plan, of, then And it's the sounds full

at P&L that talk Now of all about hear and savings kind would I side. the from I then know look the facilities. coming be you the the shifting two I more

that on somewhat of a Or side? related material little the some in obviously P&L a In And with reduction would more probably savings savings you longer-term like piece Thanks. it. capital CapEx terms of bit that's piece, argue is CapEx? this it's

call, the of terms that is a of big turning capital the in part in out more direction we related model. into -- the asset-light strategic terms laid requirement, to capital the that a in of lower No,

million our XXXX. our We $XXX call also talked about actually CapEx when the by CapEx in reduced previous phasing earnings annual in we

reduced million. So that we combined capital sort $XXX of have that by funding the

Right.

what was in discussing Is Okay. we the today reduction that we're doesn't sound it on was lion But mean share. kind that lion's of this the The next were talking about I that fair? the QX share call. phase like

looking if that more well. also an Yes. as lower going But also need a -- asset-light forward you're moving drive towards capital model, ahead, will looking

Our next question comes from the of line America. of from Bryan Spillane Bank

morning, Thanks Good operator. everyone.

Just two my questions on end.

Ogden, are? the what training? of technical Is color technical described really Can doesn't some lack Just issues. technical in you work? it the -- provide a actually working. on one, Is isn't like it first equipment more issues you what The trying to understand

Brian. this will take you, one. I Thank Jean-Christophe.

Ogden, different we on at So the two One ramp-up the of deal continued is things. to factory. need

last are still said improvement and is mile we improving the And we were last the up that we ramp stabilizing production. think reality I production. to in quarter,

times So been Daniel the three to and have site. myself

we analysis X We ramp-up I'm and have of X driving now, clear the plan. now action now what's a happy cause have this very clear to weeks stable root are to long there. seeing a production report we that over last

oat hole. device us the is and pipe tank systems, to our of we replaced the the in has through still incident, line you connected the On tight get And go between the into specificity, with onetime what cannot safety it end our of week August where oat oat-based from a one oat, which because that suppression had two line air we a it we of in the means happened work we into to what the to time at it has is up incident which kept our Toni an of the safety technical mid-September. to lot other one it, a simply took is didn't process. is a anymore it device that received fire third that asked referred side, device It's because incidents anti-explosive had for of an that, and

But good up happened. our of production, in the what we stability is see and exactly past topic continue ramp main the that's So the we weeks.

question sort at a you growth. just guess the the who's explored multiple up scaling I of helpful. scale? And mean, merging time that of then the has maybe on with like thought the here, really follow there's like service someone potential you've has caught Okay. all? of Toni, detail. difficult got bit Thank but a No, having dog Have for all larger the financing more Oatly tracks. car at -- little I growth up that's to you very have the around to earlier you

So in considered? is the range you've that And it something why? if of not, possibilities,

answer No, not it's exploring that question, is and path. good a the We're no.

why? And

the remember we that experienced Well, our with thing, high is why the combined runway one that are absolutely the massive. had have. growth macro supporting very much the And related hurdles is to that we have we

taking we so have regions. that gains. see have confidence so much see prepare share we're this see to we market do, demand. We for velocity company the opposite. see we demand issues underlying no again, there's strategic more actions We And in So expanding We to and decisive very us Again, this strength. now these organization much growth. across

improve, and high. executional is has action. confidence the much we to we taking level that are been very So an This decisive exercise need

the So that is reason.

of Baumgartner Our next John line Mizuho. from the question from comes

that reductions morning, And with to for is Wanted thanks big support time question. back your levels the to Relative geographic multiple and reorganization OpEx come can I your over expenses. your to infrastructure your revenue. a guess similar Good the of the to be explained operating sales, for part of of breadth, gap a by with that leveraged gets and peers sales.

think relative more as a So about in you. previously how here, excessively least do as what you've discretionary more costs reducing at your become view you're or the in prematurely. maybe And have to second we business costs given Thank was nature? what viewed the look structural that risk

Jean-Christophe John, speaking. all, of first So

within customer costs, distribution costs. technically, our we SG&A I think our have

which of factor think is compare when I rightly. that's at the job your So you know important an I heart benchmark or

as bottom-up reset taking So was, we then Are question, think any to which cost we we there? approach. next had risk I base. a very your have our very,

entire three the the analysis and exercise reset done exist that have listed leveraging ourselves, guide teams really people that the Toni the have the intents we various We initially. with in has done in

the need growth. we So towards do the in we to order next question what asked step capability-wise into us was, propel

scalable So looking model. a were for really we

given clarity. that The has second is us simplicity thing and

accelerate we by fixed has our profitability, organization. cost and some have Christian we what have fast there, opportunities have your to and so the and The some to bring we As path and very the to to coming was is to and is of finally, the any fast player at I company, the clarity. we And need to. player. back see parts opportunity had expected referred intersection, our specific the regional first And that And grown really resources both is intersection global of have therefore, which done. this diminishing we of growth Daniel European looked outcome structure simplicity Toni with and the in the corporate June,

has you invest one to really that and number want the remain been priority, to leave main the to because position for our thing will in the I ourselves priority. focus with main So us that those is

digits was environment? of demand the for on And macro the the due and just looks for the sequentially of from versus much was And just you. confidence the velocities was sort like Thank the velocity slide to high that Thanks just Germany down that. a than that bottoming to single level in given in Europe? the U.K. QX, European category. uncertainty which environment. your about better It follow-up and macro curious, how I'm what's seeing overall seasonality deck relative

I referring Thanks for means the it here. in Daniel And Toni was call. taking the question. previous well you're what very think the mentioning And that It's following. earnings is to with

signs of -- and have growth execution distribution synchronization It's we seen of markets points, We Europe. now that improved share stable volume the in on reflected see And months we two, seen reflected market early seen allocation across gains. innovation three we with better our the in days, growth. resource have but of early have and restoration

As growing of colleagues Germany. one we're private even before, your ahead of I to labels said in

So the dots. we are starting to connect Thank you.

the Petersen, the reached closing session. like we And and to CEO, would you. gentlemen, end for have conference comments. now turn the Thank of I to Ladies question-and-answer Toni

speaking our us March. So everybody. Thank with We for and in happy thanks, earnings joining many holiday coming look today. safe and to a the forward on over next everybody, you weeks you, call Have season. of

has conference Thank your The participation. you you. Thank concluded. for now

lines. may your disconnect now You