Polestar releases fourth quarter and full year 2022 financial results
- Total revenue of
USD 2.5 billion in 2022, an increase of 84% year on year - 51,491 cars delivered in 2022, compared to 28,677 in 2021, an increase of 80%
- Cash and cash equivalents of
USD 974 million as ofDecember 31, 2022
GOTHENBURG, SWEDEN – 2 March 2023. Polestar Automotive Holding UK PLC (“Polestar” or the “Company,” Nasdaq: PSNY), the Swedish electric performance car brand, reports its preliminary unaudited financial and operational results for the year ended December 31, 2022.
Thomas Ingenlath, Polestar CEO, comments: “We left 2022 having exceeded our 50,000 delivery target, grown revenue over 80 percent and with strengthened liquidity. We are focused on business execution and have had a busy start to this year with a major update to Polestar 2, excellent reception for Polestar 3, and welcomed additional sustainability partners for our ambitious Polestar 0 project. Our business will continue to gain momentum through the year as we start producing Polestar 3 - and with Polestar 4 in the starting blocks.”
Key financial highlights
The below table summarises key financial results for the year ended
|
(in millions of |
|
|
% |
||||||
|
Revenue |
2,461.9 |
|
1,337.2 |
|
84 |
|
|||
|
Cost of sales |
(2,342.5 |
) |
(1,336.3 |
) |
75 |
|
|||
|
Gross profit |
119.4 |
|
0.9 |
|
n/m |
|
|||
|
Gross margin (%) |
4.9 |
|
0.1 |
|
n/m |
|
|||
|
Selling, general and administrative expenses |
(864.6 |
) |
(714.7 |
) |
21 |
|
|||
|
Research and development expenses |
(171.0 |
) |
(232.9 |
) |
(27 |
) |
|||
|
Other operating expenses and income, net |
2.2 |
|
(48.1 |
) |
(105 |
) |
|||
|
Listing expense(1) |
(372.3 |
) |
- |
|
100 |
|
|||
|
Operating loss |
(1,286.3 |
) |
(994.8 |
) |
29 |
|
|||
|
Adjusted operating loss(2) |
(914.0 |
) |
(994.8 |
) |
(8 |
) |
|||
|
(1) |
|
The listing expense represents a non-recurring, non-cash, share-based listing charge, incurred in connection with the business combination with |
|
(2) |
|
Non-GAAP measure. See Appendix B for details and a reconciliation of adjusted metrics to the nearest GAAP measure. |
- Revenue increased
USD 1,124.7 million , or 84%, mainly driven by higher Polestar 2 vehicle sales with continued commercial expansion across markets. - Gross profit increased
USD 118.5 million , as the result of higher Polestar 2 sales and lower fixed manufacturing costs. This growth was partially offset by foreign exchange rates which led to higher cost of sales, and product and market mix. - Selling, general and administrative expenses increased
USD 149.9 million , or 21%. This increase primarily reflects Polestar’s international business expansion partially offset by active cost management. - Research and development expenses decreased
USD 62.0 million , or 27% due to the absence of Polestar 1 amortisation. This decrease was partially offset by continued investments in future vehicles and technologies. - Operating loss increased
USD 291.5 million , or 29%, impacted by a Q2 2022 one-time share-based listing charge ofUSD 372.3 million . - Adjusted operating loss decreased
USD 80.8 million , or 8%, benefiting from higher gross profit and active cost management.
The below table summarises key financial results for the quarter ended
|
(in millions of |
|
|
% |
|||
|
Revenue |
985.2 |
589.5 |
67 |
|||
|
Cost of sales |
(923.2) |
(589.7) |
57 |
|||
|
Gross profit |
61.9 |
(0.2) |
n/m |
|||
|
Gross margin (%) |
6.3 |
-0.0 |
n/m |
|||
|
Selling, general and administrative expenses |
(239.2) |
(236.6) |
1 |
|||
|
Research and development expenses |
(47.6) |
(75.5) |
(37) |
|||
|
Other operating expenses and income, net |
20.1 |
(25.0) |
(181) |
|||
|
Operating loss |
(204.7) |
(337.3) |
(39) |
Variances for Q4 2022 versus Q4 2021 largely followed the trends outlined for 2022 versus 2021, with the following notable exceptions:
- Selling, general and administrative expenses were kept flat due to active cost management.
- Operating loss decreased
USD 132.6 million , or 39%, benefiting from higher gross profit and active cost management.
Cash flow highlights
The below table summarises cash flow for the year ended
|
(in millions of |
|
||
|
|
756.7 |
|
|
|
Operating |
(1,088.3 |
) |
|
|
Investing |
(716.0 |
) |
|
|
Financing |
2,087.7 |
|
|
|
Foreign exchange effect on cash and cash equivalents |
(66.2 |
) |
|
|
|
973.9 |
|
|
- Operating cash outflow of
USD 1,088.3 million , mainly driven by operating loss, working capital increase in inventories and trade receivables as a result of higher production and sales, and interest expenses due to increased financial debt during 2022. - Investing cash outflow of
USD 716.0 million , predominantly driven by intellectual property investments for Polestar 2, Polestar 3 and Polestar 4. - Financing cash inflow mainly comprised of equity proceeds of
USD 1,418.0 million from the merger with GGI inJune 2022 and a net increase in short-term borrowings ofUSD 723.5 million to support the continued growth of the company.
Key operational highlights
The below table summarises key preliminary operational results as of and for the year ended
|
(unaudited)
|
|
|
% |
||
|
Global volumes (1) |
51,491 |
28,677 |
80 |
||
|
- including external vehicles with |
1,296 |
2,836 |
|
||
|
- including internal vehicles |
1,664 |
2,081 |
|
||
|
|
|
|
|
||
|
|
|
|
Change |
||
|
Markets (2) |
27 |
19 |
+8 |
||
|
Locations (3) |
158 |
103 |
+55 |
||
|
Service points (4) |
1,116 |
811 |
+305 |
|
(1) |
Represents total volumes of new vehicles delivered, including external sales with recognition of revenue at time of delivery, external sales with repurchase commitments and internal sales of vehicles transferred for demonstration and commercial purposes as well as vehicles transferred to Polestar employees at time of registration. Transferred vehicles for demonstration and commercial purposes are owned by Polestar and included in Inventory. |
|
|
(2) |
Represents the markets in which Polestar operates. |
|
|
(3) |
Represents Polestar retail and handover locations, including Polestar Spaces, Polestar Destinations and Polestar Test Drive Centers. |
|
|
(4) |
Represents Volvo Cars service centres which provide customers access to service points worldwide in support of Polestar’s international expansion. |
- Global volumes increased 22,814 to 51,491 cars in 2022, an increase of 80% year on year.
- Polestar has added eight new markets since the start of 2022:
United Arab Emirates ,Kuwait ,Hong Kong ,Ireland ,Israel ,Italy ,Spain andPortugal . - Polestar has 158 retail locations and 1,116 service points across its markets, up 55 and 305 respectively, since the end of 2021.
2023 outlook
- As previously announced, Polestar anticipates global volumes to increase by nearly 60% to approximately 80,000 cars, predominantly driven by Polestar 2 sales.
- For the year as a whole, the Company expects gross margin to be broadly in line with 2022, with volume and product mix supporting margin progression later in the year.
- While liquidity has strengthened, including a cash balance of approximately
USD 1 billion as ofDecember 31, 2022 , the Company continues to explore potential equity or debt offerings to raise additional capital to fund operations and business growth.
Recent developments – design, innovation, sustainability
- In early January, Polestar announced that its vehicles will benefit from the latest enhancements and developments by
Google . Developments include Google’s new HD map that will debut in Polestar 3, and the roll-out of remote actions for Polestar 2. The company also showcased Polestar 3 for the first time in the US at CES 2023 inLas Vegas , together with Smart Eye, supplier of premium driver monitoring technology which is included as standard. - In late January, Polestar announced a major update to Polestar 2. The 2024 model year will feature a new high-tech front end that reflects the design language premiered by Polestar 3, substantial performance increases with all-new electric motors, even more powerful batteries, longer range, sustainability improvements and, for the first time in a Polestar, rear-wheel drive.
- In February, Polestar signed up eight additional sustainability partners to the ambitious Polestar 0 project – to create a truly climate-neutral car by 2030 – bringing the total to 24, as well as initiated a collaboration with Rivian on the Pathway Report in response to the climate crisis. The Company also announced Polestar 3 with Luminar LiDAR is available to order, and an expanded partnership with Luminar to work on the integration of LiDAR in Polestar 5.
Upcoming reporting and other events
- Polestar’s Annual Report on Form 20-F is expected to be filed with the
U.S. Securities and Exchange Commission (the "SEC ") onMarch 30, 2023 . - Polestar’s 2022 Sustainability Report is expected to be published in
April 2023 . - Polestar expects to post its unaudited financial results for the quarter ended
March 31, 2023 onThursday, May 11, 2023 , before market opening in theUSA .
Polestar management will hold a live audio webcast today,
Following the completion of the call, a replay will be available shortly at https://investors.polestar.com/.
Statement Regarding Preliminary Unaudited Financial and Operational Results
The unaudited financial and operational information published in this press release is preliminary and subject to potential adjustments. Potential adjustments to operational and consolidated financial information may be identified from work performed during Polestar’s year-end audit. This could result in differences from the unaudited operational and financial information published herein. For the avoidance of doubt, the preliminary unaudited operational and financial information published in this press release should not be considered a substitute for the financial information to be filed with the
About Polestar
Polestar (Nasdaq: PSNY) is the Swedish electric performance car brand determined to improve society by using design and technology to accelerate the shift to sustainable mobility. Headquartered in
Polestar 2 launched in 2019 as the electric performance fastback with avant-garde Scandinavian design and up to 350 kW. Polestar 3 launched in late 2022 as the SUV for the electric age – a large high-performance SUV that delivers sports car dynamics with a low stance and spacious interior. Polestar plans to release three more electric performance vehicles through to 2026.
Forward-Looking Statements
Certain statements in this press release (“Press Release”) may be considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or the future financial or operating performance of Polestar. Guidance on revenue, volumes, gross margin and other financial or operating metrics, such as the ones included in the 2023 outlook described in this press release, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential”, “forecast”, "outlook," "guidance", “plan”, “seek”, “future”, “propose” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.
These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Polestar and its management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) Polestar’s ability to maintain agreements or partnerships with its strategic partners, Volvo Cars and
Nothing in this Press Release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Polestar assumes no obligation to update these forward-looking statements, even if new information becomes available in the future.
|
Appendix A |
|||||||||||
|
|
|||||||||||
|
Preliminary Unaudited Condensed Consolidated Statement of Loss |
|||||||||||
|
(in thousands of |
|||||||||||
|
|
For the three months ended |
|
For the year ended |
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
Revenue |
985,151 |
|
|
589,507 |
|
|
2,461,897 |
|
|
1,337,181 |
|
|
Cost of sales |
(923,183 |
) |
|
(589,707 |
) |
|
(2,342,454 |
) |
|
(1,336,321 |
) |
|
Gross profit (loss) |
61,968 |
|
|
(200 |
) |
|
119,443 |
|
|
860 |
|
|
Selling, general, and administrative |
(239,174 |
) |
|
(236,580 |
) |
|
(864,598 |
) |
|
(714,724 |
) |
|
Research and development |
(47,634 |
) |
|
(75,522 |
) |
|
(170,987 |
) |
|
(232,922 |
) |
|
Other operating income (expense), |
20,143 |
|
|
(24,993 |
) |
|
2,182 |
|
|
(48,053 |
) |
|
Listing expense |
— |
|
|
— |
|
|
(372,318 |
) |
|
— |
|
|
Operating loss |
(204,697 |
) |
|
(337,295 |
) |
|
(1,286,278 |
) |
|
(994,839 |
) |
|
Finance income |
7,066 |
|
|
8,169 |
|
|
8,551 |
|
|
32,970 |
|
|
Finance expense |
3,531 |
|
|
(16,738 |
) |
|
(108,435 |
) |
|
(45,249 |
) |
|
Fair value change – Earn-out |
(63,600 |
) |
|
— |
|
|
902,068 |
|
|
— |
|
|
Fair value change - Class C |
(500 |
) |
|
— |
|
|
35,090 |
|
|
— |
|
|
Loss before income taxes |
(258,200 |
) |
|
(345,864 |
) |
|
(449,005 |
) |
|
(1,007,118 |
) |
|
Income tax expense |
(4,240 |
) |
|
9,078 |
|
|
(16,783 |
) |
|
(336 |
) |
|
Net loss |
(262,440 |
) |
|
(336,786 |
) |
|
(465,789 |
) |
|
(1,007,454 |
) |
|
|
|||||
|
Preliminary Unaudited Condensed Consolidated Statement of Financial Position |
|||||
|
(in thousands of |
|||||
|
|
|
|
|
||
|
Assets |
|
|
|
||
|
Non-current assets |
|
|
|
||
|
Intangible assets and goodwill |
1,391,828 |
|
|
1,368,356 |
|
|
Property, plant and equipment |
262,593 |
|
|
208,193 |
|
|
Vehicles held under operating lease |
92,198 |
|
|
120,626 |
|
|
Other non-current assets |
15,395 |
|
|
5,532 |
|
|
Total non-current assets |
1,762,014 |
|
|
1,702,707 |
|
|
Current assets |
|
|
|
||
|
Cash and cash equivalents |
973,877 |
|
|
756,677 |
|
|
Marketable securities |
— |
|
|
1,258 |
|
|
Trade receivables external and trade receivables and |
370,164 |
|
|
177,544 |
|
|
Inventories |
657,882 |
|
|
545,743 |
|
|
Other current assets |
178,516 |
|
|
125,764 |
|
|
Total current assets |
2,180,439 |
|
|
1,606,986 |
|
|
Total assets |
3,942,453 |
|
|
3,309,693 |
|
|
|
|
|
|
||
|
Equity |
|
|
|
||
|
Share capital |
(21,156 |
) |
|
(1,865,909 |
) |
|
Other contributed capital |
(3,582,589 |
) |
|
(35,231 |
) |
|
Accumulated deficit & Foreign currency translation |
3,737,089 |
|
|
1,778,644 |
|
|
Total equity |
133,344 |
|
|
(122,496 |
) |
|
|
|
|
|
||
|
Liabilities |
|
|
|
||
|
Non-current liabilities |
|
|
|
||
|
Other non-current provisions and liabilities |
(139,428 |
) |
|
(79,906 |
) |
|
Earn-out liability |
(598,570 |
) |
|
— |
|
|
Other non-current interest-bearing liabilities |
(85,556 |
) |
|
(66,575 |
) |
|
Total non-current liabilities |
(823,554 |
) |
|
(146,481 |
) |
|
Current liabilities |
|
|
|
||
|
Trade payables external and trade payables and |
(1,184,142 |
) |
|
(1,857,730 |
) |
|
Advance payments from customers |
(40,868 |
) |
|
(36,415 |
) |
|
Liabilities to credit institutions |
(1,328,752 |
) |
|
(642,338 |
) |
|
Interest-bearing current liabilities |
(38,235 |
) |
|
(24,072 |
) |
|
Class |
(28,000 |
) |
|
— |
|
|
Other current provisions and liabilities |
(632,246 |
) |
|
(480,161 |
) |
|
Total current liabilities |
(3,252,243 |
) |
|
(3,040,716 |
) |
|
Total liabilities |
(4,075,797 |
) |
|
(3,187,197 |
) |
|
Total equity and liabilities |
(3,942,453 |
) |
|
(3,309,693 |
) |
|
|
|||||
|
Preliminary Unaudited Condensed Consolidated Statement of Cash Flows |
|||||
|
(in thousands of |
|||||
|
|
For the year ended |
||||
|
|
2022 |
|
2021 |
||
|
Cash flows from operating activities |
|
|
|
||
|
Net loss |
(465,789 |
) |
|
(1,007,454 |
) |
|
Adjustments to reconcile Net loss to net cash flows |
|
|
|
||
|
Depreciation and amortization |
185,057 |
|
|
239,164 |
|
|
Finance income and expense |
99,884 |
|
|
12,280 |
|
|
Listing expense |
372,318 |
|
|
— |
|
|
Income tax expense |
16,783 |
|
|
336 |
|
|
Other non-cash expense and income |
(839,595 |
) |
|
106,658 |
|
|
Change in operating assets and liabilities |
(378,526 |
) |
|
357,505 |
|
|
Interest net paid & tax paid |
(78,481 |
) |
|
(20,645 |
) |
|
Cash used for operating activities |
(1,088,349 |
) |
|
(312,156 |
) |
|
|
|
|
|
||
|
Cash flows from investing activities |
|
|
|
||
|
Additions to property, plant and equipment |
(32,269 |
) |
|
(24,701 |
) |
|
Additions to intangible assets |
(681,204 |
) |
|
(104,971 |
) |
|
Other |
(2,500 |
) |
|
— |
|
|
Cash used for investing activities |
(715,973 |
) |
|
(129,672 |
) |
|
|
|
|
|
||
|
Cash flows from financing activities |
|
|
|
||
|
Change in restricted cash |
— |
|
|
48,830 |
|
|
Proceeds from short-term borrowings |
2,146,396 |
|
|
698,882 |
|
|
Principal repayments of short-term borrowings |
(1,422,862 |
) |
|
(411,950 |
) |
|
Principal repayments of lease liabilities |
(14,905 |
) |
|
(8,578 |
) |
|
Proceeds from the issuance of share capital and |
1,417,973 |
|
|
582,388 |
|
|
Transaction costs |
(38,903 |
) |
|
— |
|
|
Cash provided by financing activities |
2,087,699 |
|
|
909,572 |
|
|
Effect of foreign exchange rate changes on cash and |
(66,177 |
) |
|
(27,491 |
) |
|
Net increase in cash and cash equivalents |
217,200 |
|
|
440,253 |
|
|
Cash and cash equivalents at beginning of |
756,677 |
|
|
316,424 |
|
|
Cash and cash equivalents at end of period |
973,877 |
|
|
756,677 |
|
Appendix B
Non-GAAP Financial Measures
Polestar uses both generally accepted accounting principles ("GAAP," i.e., IFRS) and non-GAAP (i.e., non-IFRS) financial measures to evaluate operating performance, for internal comparisons to historical performance, and for financial decision-making purposes. Polestar believes non-GAAP financial measures are helpful to investors as they provide useful perspective on underlying business trends and assist in period on period comparisons.
These non-GAAP measures are presented for supplemental information purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. The measures are not presented under a comprehensive set of accounting rules and, therefore, should only be read in conjunction with financial information reported under GAAP when understanding Polestar's operating performance.
The measures may not be the same as similarly titled measures used by other companies due to possible differences in calculation methods and items or events being adjusted. A reconciliation between non-GAAP financial measures and the most comparable GAAP performance measures is provided below.
Non-GAAP financial measures include adjusted operating loss, adjusted EBITDA, adjusted net loss, and free cash flow.
Adjusted Operating Loss
Polestar defines adjusted operating loss as operating loss, adjusted to exclude listing expense. This measure is reviewed by management and provides a relevant measure for understanding the ongoing operating performance of the business prior to the impact of the non-recurring adjusting item.
Adjusted EBITDA
Adjusted EBITDA is calculated as listing expense, fair value change of earn-out rights, fair value change of Class
Adjusted Net Loss
Adjusted net loss is calculated as net loss, adjusted to exclude listing expense, fair value change of earn-out rights, and fair value change of Class
Free Cash Flow
Free cash flow is calculated by subtracting cash flows used for tangible assets and intangible assets from cash used for operating activities. This measure is reviewed by management and is a relevant measure for understanding cash sourced from operating activities that is available to repay debts, fund capital expenditures, and spend on other strategic initiatives.
|
Unaudited Reconciliation of GAAP and Non-GAAP Results |
||||||
|
Adjusted Operating Loss |
||||||
|
(in millions of |
|
For the year ended |
||||
|
|
|
2022 |
|
|
2021 |
|
|
Operating loss |
|
(1,286.3 |
) |
|
(994.8 |
) |
|
Listing expense |
|
372.3 |
|
— |
|
|
|
Adjusted operating loss (non-GAAP) |
|
(914.0 |
) |
|
(994.8 |
) |
|
Adjusted EBITDA |
|||||
|
(in millions of |
For the year ended |
||||
|
|
2022 |
|
2021 |
|
|
|
Net loss |
(465.8 |
) |
(1,007.5 |
) |
|
|
Listing expense |
372.3 |
|
— |
|
|
|
Fair value change - Earn-out rights |
(902.1 |
) |
— |
|
|
|
Fair value change - Class |
(35.1 |
) |
— |
|
|
|
Interest income |
(7.7 |
) |
(1.4 |
) |
|
|
Interest expenses |
77.5 |
|
44.9 |
|
|
|
Income tax expense |
16.8 |
|
0.3 |
|
|
|
Depreciation and amortization |
185.1 |
|
239.2 |
|
|
|
Adjusted EBITDA (non-GAAP) |
(759.0 |
) |
(724.5 |
) |
|
|
Adjusted Net Loss |
|||||
|
(in millions of |
For the year ended |
||||
|
|
2022 |
|
|
2021 |
|
|
Net loss |
(465.8 |
) |
|
(1,007.5 |
) |
|
Listing expense |
372.3 |
|
|
— |
|
|
Fair value change - Earn-out rights |
(902.1 |
) |
|
— |
|
|
Fair value change - Class |
(35.1 |
) |
|
— |
|
|
Adjusted net loss (non-GAAP) |
(1,030.7 |
) |
|
(1,007.5 |
) |
|
Free Cash Flow |
|||||
|
(in millions of |
For the year ended |
||||
|
|
2022 |
|
|
2021 |
|
|
Net cash used for operating activities |
(1,088.3 |
) |
|
(312.2 |
) |
|
Investing cash flows used for tangible assets |
(32.3 |
) |
|
(24.7 |
) |
|
Investing cash flows used for intangible assets |
(681.2 |
) |
|
(105.0 |
) |
|
Free cash flow (non-GAAP) |
(1,801.8 |
) |
|
(441.8 |
) |