Oatly Reports Fourth Quarter and Full Year 2023 Financial Results
- Revenue increased by 4.6% to $204.1 million in Q4 2023, with a constant currency increase of 2.5%.
- Gross margin improved to 23.4% in Q4 2023, a significant increase from the previous year.
- Net loss attributable to shareholders increased to $298.7 million in Q4 2023.
- EBITDA loss was $228.0 million in Q4 2023, with Adjusted EBITDA loss of $19.2 million.
- Full year 2024 outlook includes constant currency revenue growth of 5% to 10% and adjusted EBITDA loss of $(35) million to $(60) million.
- EMEA revenue increased by 16.9% in Q4 2023, Americas revenue increased by 2.4%, while Asia revenue decreased by 18.9%.
- Oatly's corporate expense decreased by $12.6 million in Q4 2023.
- As of December 31, 2023, the company had cash and cash equivalents of $249.3 million and total outstanding debt of $443.8 million.
- Net cash used in operating activities improved to $165.6 million for the twelve months ended December 31, 2023, driven by improved working capital.
- Free cash flow was an outflow of $234.7 million for the twelve months ended December 31, 2023, showing improvement from the prior year.
- Net loss increased in Q4 2023, impacting shareholder returns.
- EBITDA and Adjusted EBITDA remained in negative territory, despite improvements from the previous year.
- Asia segment revenue declined significantly in Q4 2023.
- The company's full year 2024 outlook includes a projected adjusted EBITDA loss, raising concerns about profitability.
- Free cash flow remained negative, indicating ongoing cash outflows.
Insights
The Q4 and annual financial results of Oatly Group AB reflect a dynamic operational environment with significant shifts in the company's performance metrics. The reported revenue increase of 4.6% in Q4 and 8.5% for the full year indicates a resilient top-line growth, despite a challenging economic climate. The gross margin improvement to 23.4% in Q4 from the prior year represents a substantial enhancement in profitability, likely due to efficiencies gained in supply chain operations.
However, the net loss widening to $298.7 million in Q4 from $125.2 million in the previous year and the substantial EBITDA loss reported are concerning. These losses are primarily attributed to non-cash asset impairment charges, suggesting a significant write-down of investments, particularly in discontinued construction of certain production facilities. This strategic pivot could be indicative of a reevaluation of capital expenditure priorities in response to a shifting market demand or operational challenges.
For investors, the full year 2024 outlook projecting constant currency revenue growth of 5% to 10% offers a glimpse into management's confidence in the company's growth trajectory. However, the anticipated adjusted EBITDA loss and the commitment to capex below $75 million suggest a continued focus on cost control and operational efficiency. The improvement in working capital and reduction in cash used in operating activities year-over-year is a positive sign of improved liquidity management.
Oatly's performance in different geographical segments reveals divergent market dynamics. The EMEA segment shows robust growth, with revenue increasing by 16.9% in Q4, driven by price increases and stable volume. This indicates a strong market presence and an ability to pass on cost increases to consumers without significant volume loss.
The Americas segment exhibited modest growth, with a 2.4% revenue increase and a notable 9.2% volume increase in Q4. This suggests effective market penetration and product acceptance, despite a negative price/mix impact that warrants further investigation into pricing strategies and product mix optimization.
Conversely, the Asia segment experienced an 18.9% revenue decline in Q4, with a strategic refocus towards the foodservice channel and discontinuation of certain products. This reflects a strategic shift that may aim to improve profitability by exiting lower-margin businesses, but also raises questions about the brand's long-term positioning and competitive landscape in the region.
The company's gross profit margin improvement, particularly in the EMEA and Americas segments, suggests successful cost management and operational efficiency gains. However, the negative constant currency price/mix in the Americas and Asia segments could indicate pricing pressure or changes in consumer preferences that may affect future revenue composition.
The financial statements of Oatly Group AB highlight the impact of significant non-cash asset impairment charges related to the discontinued construction of production facilities. These charges, while non-cash, have a material impact on the company's profitability and indicate a strategic reassessment of capital investments. Stakeholders should be aware of the potential legal and contractual ramifications associated with halting construction projects, including potential disputes with contractors or suppliers.
The legal settlement expenses related to US securities class action litigation also reflect the risks associated with public company operations and the importance of compliance with securities laws. Such settlements can have a one-time impact on financials but also serve as a reminder of the need for robust legal and compliance frameworks to mitigate litigation risks.
Oatly's disclosures around these financial and legal matters provide transparency, but investors should consider the implications of these non-operational costs on the company's financial health and the potential for future legal or regulatory challenges.
MALMÖ, Sweden, Feb. 15, 2024 (GLOBE NEWSWIRE) -- Oatly Group AB (Nasdaq: OTLY) (“Oatly” or the “Company”), the world’s original and largest oat drink company, today announced financial results for the fourth quarter and twelve months ended December 31, 2023.
Jean-Christophe Flatin, Oatly’s CEO, commented, “I am proud of the progress that we made throughout 2023. It was a pivotal year where we executed a significant re-calibration of the entire organization to stabilize our business and ensure we are properly positioned for long-term success. We did this while driving solid top-line growth and significant improvements in our gross profit, selling, general, and administrative expenses, and operating cash flow."
Flatin added, “As we enter 2024, our financial guidance calls for solid top-line growth while delivering significant profit improvement as we focus on our top priority of driving toward profitable growth. We plan to continue driving toward profitable growth by bringing the Oatly magic to more people and delivering on the expected benefits of our resource re-calibration while maintaining our focus on execution."
The tables below reconcile revenue as reported to revenue on a constant currency basis by segment for the three and twelve months ended December 31, 2023 and 2022.
| Three Months Ended December 31, | $ Change | % Change | ||||||||||||||||||||||||||||||
| (Unaudited) (in thousands of U.S. dollars) | 2023 | 2022 | As reported | Foreign exchange impact | In constant currency | As reported | In constant currency | Volume | Constant currency price/mix | |||||||||||||||||||||||
| EMEA | 105,201 | 89,974 | 105,201 | 4,571 | 100,630 | 16.9 | % | 11.8 | % | 0.5 | % | 11.3 | % | |||||||||||||||||||
| Americas | 65,900 | 64,386 | 65,900 | — | 65,900 | 2.4 | % | 2.4 | % | 9.2 | % | -6.8 | % | |||||||||||||||||||
| Asia | 33,020 | 40,708 | 33,020 | (371 | ) | 33,391 | -18.9 | % | -18.0 | % | -3.3 | % | -14.7 | % | ||||||||||||||||||
| Total revenue | 204,121 | 195,068 | 204,121 | 4,200 | 199,921 | 4.6 | % | 2.5 | % | 2.0 | % | 0.5 | % | |||||||||||||||||||
| Twelve Months Ended December 31, | $ Change | % Change | ||||||||||||||||||||||||||||||
| (Unaudited) (in thousands of U.S. dollars) | 2023 | 2022 | As reported | Foreign exchange impact | In constant currency | As reported | In constant currency | Volume | Constant currency price/mix | |||||||||||||||||||||||
| EMEA | 402,168 | 345,509 | 402,168 | 3,350 | 398,818 | 16.4 | % | 15.4 | % | 4.9 | % | 10.5 | % | |||||||||||||||||||
| Americas | 250,264 | 223,880 | 250,264 | — | 250,264 | 11.8 | % | 11.8 | % | 2.9 | % | 8.9 | % | |||||||||||||||||||
| Asia | 130,916 | 152,849 | 130,916 | (4,960 | ) | 135,876 | -14.3 | % | -11.1 | % | -1.9 | % | -9.2 | % | ||||||||||||||||||
| Total revenue | 783,348 | 722,238 | 783,348 | (1,610 | ) | 784,958 | 8.5 | % | 8.7 | % | 3.1 | % | 5.6 | % | ||||||||||||||||||
Highlights
- Fourth quarter revenue of
$204.1 million , a4.6% increase compared to the prior year period, and constant currency revenue increased2.5% . - Gross margin in the fourth quarter was
23.4% , which is a 7.5 percentage points increase compared to the prior year period and an increase of 6.0 percentage points compared to the third quarter. - Fourth quarter net loss attributable to shareholders of the parent was
$298.7 million compared to net loss of$125.2 million in the prior year period and net profit attributable to shareholders of the parent of$44.1 million in the third quarter. - Fourth quarter EBITDA loss was
$228.0 million ; fourth quarter Adjusted EBITDA loss was$19.2 million , which is an improvement of$41.2 million compared to the prior year period and an improvement of$16.8 million compared to the third quarter. - The Company is providing its full year 2024 outlook, which includes constant currency revenue growth in the range of
5% to10% , adjusted EBITDA loss in the range of$(35) million to$(60) million , and capital expenditures below$75 million .
Fourth Quarter 2023 Results
Revenue increased
The Company experienced revenue growth in both the retail channel and foodservice channel, partially offset by a decline in other channels in the fourth quarter of 2023 compared to the fourth quarter of 2022.
Gross profit was
Research and development expenses in the fourth quarter of 2023 decreased
Selling, general and administrative expenses in the fourth quarter of 2023 decreased
Other operating income and expenses, net for the fourth quarter of 2023 increased to an expense of
Finance income and expenses, net for the fourth quarter of 2023 increased to an expense of
Net loss attributable to shareholders of the parent was
EBITDA loss for the fourth quarter of 2023 was
Adjusted EBITDA loss for the fourth quarter of 2023 was
EBITDA, Adjusted EBITDA loss, and Constant Currency Revenue are non-IFRS financial measures defined under “Non-IFRS financial measures.” Please see above revenue at constant currency table and “Reconciliation of IFRS to Non-IFRS Financial measures” at the end of this press release.
The following tables set forth revenue, Adjusted EBITDA, EBITDA and loss before tax for the Company's three reportable segments for the periods presented.
| Revenue, Adjusted EBITDA and EBITDA Three months ended December 31, 2023 (Unaudited) (in thousands of U.S. dollars) | EMEA | Americas | Asia | Corporate* | Eliminations** | Total | ||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Revenue from external customers | 105,201 | 65,900 | 33,020 | — | — | 204,121 | ||||||||||||||||||
| Intersegment revenue | 203 | — | 1,852 | — | (2,055 | ) | — | |||||||||||||||||
| Total segment revenue | 105,404 | 65,900 | 34,872 | — | (2,055 | ) | 204,121 | |||||||||||||||||
| Adjusted EBITDA | 16,771 | (1,783 | ) | (8,045 | ) | (26,165 | ) | — | (19,222 | ) | ||||||||||||||
| Share-based compensation expense | (542 | ) | (930 | ) | (753 | ) | (2,462 | ) | — | (4,687 | ) | |||||||||||||
| Restructuring costs(1) | (95 | ) | (580 | ) | (497 | ) | (1,244 | ) | — | (2,416 | ) | |||||||||||||
| Asset impairment charges and other costs related to discontinued construction of production facilities(2) | (158,551 | ) | (43,009 | ) | — | — | — | (201,560 | ) | |||||||||||||||
| Non-controlling interests | — | — | (112 | ) | — | — | (112 | ) | ||||||||||||||||
| EBITDA | (142,417 | ) | (46,302 | ) | (9,407 | ) | (29,871 | ) | — | (227,997 | ) | |||||||||||||
| Finance income and (expenses), net | — | — | — | — | — | (50,486 | ) | |||||||||||||||||
| Depreciation and amortization | — | — | — | — | — | (14,618 | ) | |||||||||||||||||
| Loss before tax | — | — | — | — | — | (293,101 | ) | |||||||||||||||||
| Three months ended December 31, 2022 (Unaudited) (in thousands of U.S. dollars) | EMEA | Americas | Asia | Corporate* | Eliminations** | Total | ||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Revenue from external customers | 89,974 | 64,386 | 40,708 | — | — | 195,068 | ||||||||||||||||||
| Intersegment revenue | 4,165 | — | 2,187 | — | (6,352 | ) | — | |||||||||||||||||
| Total segment revenue | 94,139 | 64,386 | 42,895 | — | (6,352 | ) | 195,068 | |||||||||||||||||
| Adjusted EBITDA | 1,735 | (4,661 | ) | (21,004 | ) | (36,534 | ) | — | (60,464 | ) | ||||||||||||||
| Share-based compensation expense | (1,121 | ) | (763 | ) | (1,327 | ) | (4,530 | ) | — | (7,741 | ) | |||||||||||||
| Restructuring costs(1) | (918 | ) | (797 | ) | (309 | ) | (1,386 | ) | — | (3,410 | ) | |||||||||||||
| Asset impairment charge and other costs related to assets held for sale(3) | — | (39,581 | ) | — | — | — | (39,581 | ) | ||||||||||||||||
| EBITDA | (304 | ) | (45,802 | ) | (22,640 | ) | (42,450 | ) | — | (111,196 | ) | |||||||||||||
| Finance income and (expenses), net | — | — | — | — | — | 3,098 | ||||||||||||||||||
| Depreciation and amortization | — | — | — | — | — | (13,835 | ) | |||||||||||||||||
| Loss before tax | — | — | — | — | — | (121,933 | ) | |||||||||||||||||
| Twelve months ended December 31, 2023 (Unaudited) (in thousands of U.S. dollars) | EMEA | Americas | Asia | Corporate* | Eliminations** | Total | ||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Revenue from external customers | 402,168 | 250,264 | 130,916 | — | — | 783,348 | ||||||||||||||||||
| Intersegment revenue | 1,725 | — | 7,317 | — | (9,042 | ) | — | |||||||||||||||||
| Total segment revenue | 403,893 | 250,264 | 138,233 | — | (9,042 | ) | 783,348 | |||||||||||||||||
| Adjusted EBITDA | 42,951 | (28,137 | ) | (64,595 | ) | (107,780 | ) | — | (157,561 | ) | ||||||||||||||
| Share-based compensation expense | (1,781 | ) | (3,531 | ) | (4,704 | ) | (11,430 | ) | — | (21,446 | ) | |||||||||||||
| Restructuring costs(1) | (1,103 | ) | (3,062 | ) | (2,954 | ) | (7,641 | ) | — | (14,760 | ) | |||||||||||||
| Asset impairment charges and other costs related to discontinued construction of production facilities(2) | (158,551 | ) | (43,009 | ) | — | — | — | (201,560 | ) | |||||||||||||||
| Costs related to the YYF Transaction(3) | — | (375 | ) | — | — | — | (375 | ) | ||||||||||||||||
| Legal settlement(4) | — | — | — | (9,250 | ) | — | (9,250 | ) | ||||||||||||||||
| Non-controlling interests | — | — | (186 | ) | — | — | (186 | ) | ||||||||||||||||
| EBITDA | (118,484 | ) | (78,114 | ) | (72,439 | ) | (136,101 | ) | — | (405,138 | ) | |||||||||||||
| Finance income and (expenses), net | — | — | — | — | — | 48,847 | ||||||||||||||||||
| Depreciation and amortization | — | — | — | — | — | (51,874 | ) | |||||||||||||||||
| Loss before tax | — | — | — | — | — | (408,165 | ) | |||||||||||||||||
| Twelve months ended December 31, 2022 (Unaudited) (in thousands of U.S. dollars) | EMEA | Americas | Asia | Corporate* | Eliminations** | Total | ||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Revenue from external customers | 345,509 | 223,880 | 152,849 | — | — | 722,238 | ||||||||||||||||||
| Intersegment revenue | 34,940 | 820 | 3,659 | — | (39,419 | ) | — | |||||||||||||||||
| Total segment revenue | 380,449 | 224,700 | 156,508 | — | (39,419 | ) | 722,238 | |||||||||||||||||
| Adjusted EBITDA | (10,298 | ) | (62,837 | ) | (75,183 | ) | (119,605 | ) | — | (267,923 | ) | |||||||||||||
| Share-based compensation expense | (4,314 | ) | (4,485 | ) | (6,973 | ) | (19,694 | ) | — | (35,466 | ) | |||||||||||||
| Restructuring costs(1) | (918 | ) | (797 | ) | (309 | ) | (2,391 | ) | — | (4,415 | ) | |||||||||||||
| Asset impairment charge and other costs related to assets held for sale(3) | — | (39,581 | ) | — | — | — | (39,581 | ) | ||||||||||||||||
| EBITDA | (15,530 | ) | (107,700 | ) | (82,465 | ) | (141,690 | ) | — | (347,385 | ) | |||||||||||||
| Finance income and (expenses), net | — | — | — | — | — | (1,409 | ) | |||||||||||||||||
| Depreciation and amortization | — | — | — | — | — | (48,600 | ) | |||||||||||||||||
| Loss before tax | — | — | — | — | — | (397,394 | ) | |||||||||||||||||
* Corporate consists of general overhead costs not allocated to the segments.
** Eliminations in 2023 refer to intersegment revenue for sales of products from EMEA to Asia and from Asia to EMEA. Eliminations in 2022 primarily refer to intersegment revenue for sales of products from EMEA to Asia.
(1) Relates primarily to severance payments as the Company continues to adjust its organizational structure to the macro environment, and inventory write-offs related to the Company’s strategy reset in the Asia segment.
(2) Following certain events during the fourth quarter, the Company decided to discontinue the construction of its new production facilities in the EMEA and Americas segments. The Company recorded
(3) Relates to the Ya Ya Foods USA LLC transaction (the “YYF Transaction”). See the Company's Form 6-K filed on January 3, 2023 and March 2, 2023 for further details.
(4) Relates to US securities class action litigation settlement expenses.
EMEA
EMEA revenue increased
EMEA EBITDA loss increased
Americas
Americas revenue increased
Americas EBITDA loss increased
Asia
Asia revenue decreased
Asia EBITDA improved
Corporate Overhead
Oatly’s corporate expense, which consists of general overhead costs not allocated to the segments, in the fourth quarter of 2023 was
Balance Sheet and Cash Flow
As of December 31, 2023, the Company had cash and cash equivalents of
Net cash flows from operating activities for the twelve months ended December 31, 2023 was
Free Cash Flow is a non-IFRS financial measure defined under “Non-IFRS financial measures.” Please see “Reconciliation of IFRS to Non-IFRS Financial measures” at the end of this press release.
Outlook
Based on the Company’s assessment of the current operating environment and the actions it is taking, the Company is issuing its outlook for 2024. The Company expects:
- Revenue growth for full year 2024 on a constant currency basis in the range of
5% to10% , - Adjusted EBITDA loss in the range of
$(35) t o$(60) million , and - Capital expenditures for full year 2024 below
$75 million .
This outlook is provided in the context of significant macroeconomic uncertainty and other geopolitical uncertainties.
The Company cannot provide a reconciliation of constant currency revenue growth or Adjusted EBITDA guidance to the nearest comparable corresponding IFRS metric without unreasonable efforts due to difficulty in predicting certain items excluded from these non-IFRS measures. The items necessary to reconcile are not within Oatly’s control, may vary greatly between periods and could significantly impact future financial results.
Conference Call, Webcast and Supplemental Presentation Details
Oatly will host a conference call and webcast at 8:30 a.m. ET today to discuss these results. The conference call, simultaneous, live webcast and supplemental presentation can be accessed on Oatly’s Investors website at https://investors.oatly.com under “Events.” The webcast will be archived for 30 days.
About Oatly
We are the world’s original and largest oat drink company. For over 25 years, we have exclusively focused on developing expertise around oats: a global power crop with inherent properties suited for sustainability and human health. Our commitment to oats has resulted in core technical advancements that enabled us to unlock the breadth of the dairy portfolio, including alternatives to milks, ice cream, yogurt, cooking creams, and spreads. Headquartered in Malmö, Sweden, the Oatly brand is available in more than 20 countries globally.
For more information, please visit www.oatly.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any express or implied statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding our financial outlook for 2024, profitability improvement, long-term growth strategy, expected capital expenditures, anticipated supply chain performance, anticipated impact of our improvement plans, anticipated impact of our decision to discontinue construction of certain production facilities, including additional expected impairment charges and associated additional cash expenditures, plans to achieve profitable growth and anticipated cost savings as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate,” “will,” “aim,” “potential,” “continue,” “is/are likely to” and similar statements of a future or forward-looking nature. Forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: our history of losses and inability to achieve or sustain profitability; including due to elevated inflation and increased costs for transportation, energy and materials; reduced or limited availability of oats or other raw materials and ingredients that meet our quality standards; failure to successfully achieve any or all of the benefits of the YYF Transaction; failure to obtain additional financing to achieve our goals or failure to obtain necessary capital when needed on acceptable terms, or at all; failure of the financial institutions in which we hold our deposits; damage or disruption to our production facilities; harm to our brand and reputation as a result of real or perceived quality or food safety issues with our products; food safety and food-borne illness incidents or other safety concerns which may lead to lawsuits, product recalls or regulatory enforcement actions; our ability to successfully compete in our highly competitive markets; reduction in the sales of our oatmilk varieties; failure to effectively navigate our shift to an asset-light business model; failure to meet our existing or new environmental metrics and other risks related to sustainability and corporate social responsibility; litigation, regulatory actions or other legal proceedings including environmental and securities class action lawsuits and settlements; changes to international trade policies, treaties and tariffs; global conflict, including the ongoing wars in Ukraine and Israel; changes in our tax rates or exposure to additional tax liabilities or assessments; supply chain delays, including delays in the receipt of product at factories and ports, and an increase in transportation costs; the impact of rising commodity prices, transportation and labor costs on our cost of goods sold; failure by our logistics providers to deliver our products on time, or at all; our ability to successfully execute our cost reduction activities in accordance with our expectations and the impact of such actions on our company; failure to develop and maintain our brand; our ability to introduce new products or successfully improve existing products; failure to retain our senior management or to attract, train and retain employees; cybersecurity incidents or other technology disruptions; failure to protect our intellectual property and other proprietary rights adequately; our ability to successfully remediate previously disclosed material weaknesses or other future control deficiencies, in our internal control over financial reporting; impairments of the value of our assets; potential delisting from Nasdaq; our status as a foreign private issuer; risks related to the significant influence of our largest shareholder, Nativus Company Limited, entities affiliated with China Resources Verlinvest Health Investment Ltd. has over us, including significant influence over decisions that require the approval of shareholders; and the other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (“SEC”) on April 19, 2023 and our Current Report on Form 6-K which was filed with the SEC on November 9, 2023, and our other filings with the SEC as such factors may be updated from time to time. Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. Oatly disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.
Non-IFRS Financial Measures
We use EBITDA, Adjusted EBITDA, Constant Currency Revenue and Free Cash Flow as non-IFRS financial measures in assessing our operating performance and in our financial communications:
“EBITDA” is defined as loss for the period adjusted to exclude, when applicable, income tax expense, finance expenses, finance income and depreciation and amortization expense.
“Adjusted EBITDA” is defined as loss for the period adjusted to exclude, when applicable, income tax expense, finance expenses, finance income, depreciation and amortization expense, share-based compensation expense, restructuring costs, asset impairment charges and other costs related to discontinued construction of production facilities, asset impairment charge and other costs related to assets held for sale, costs related to legal settlement, and non-controlling interests.
Adjusted EBITDA should not be considered as an alternative to loss for the period or any other measure of financial performance calculated and presented in accordance with IFRS. There are a number of limitations related to the use of Adjusted EBITDA rather than loss for the period, which is the most directly comparable IFRS measure. Some of these limitations are:
- Adjusted EBITDA excludes depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future increasing our cash requirements;
- Adjusted EBITDA does not reflect interest expense, or the cash required to service our debt, which reduces cash available to us;
- Adjusted EBITDA does not reflect income tax payments that reduce cash available to us;
- Adjusted EBITDA does not reflect recurring share-based compensation expense and, therefore, does not include all of our compensation costs;
- Adjusted EBITDA does not reflect restructuring costs that reduce cash available to us in future periods;
- Adjusted EBITDA excludes asset impairment charges and other costs related to discontinued construction of production facilities, although these are non-cash expenses, the assets being impaired may have to be replaced in the future or require certain disposal or remediation costs, increasing our cash requirement;
- Adjusted EBITDA does not reflect costs related to legal settlement that reduce cash available to us in future periods;
- Adjusted EBITDA excludes asset impairment charge and other costs related to assets held for sale, although these are non-cash expenses, the assets being impaired may have to be replaced in the future or require certain disposal or remediation costs, increasing our cash requirements; and
- Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Adjusted EBITDA should not be considered in isolation or as a substitute for financial information provided in accordance with IFRS. Below we have provided a reconciliation of EBITDA and Adjusted EBITDA to loss for the period, the most directly comparable financial measure calculated and presented in accordance with IFRS, for the periods presented.
“Constant Currency Revenue” is calculated by translating the current year reported revenue amounts into comparable amounts using the prior year reporting period’s average foreign exchange rates which have been provided by a third party.
Constant currency revenue is used to provide a framework in assessing how our business and geographic segments performed excluding the effects of foreign currency exchange rate fluctuations and believe this information is useful to investors to facilitate comparisons and better identify trends in our business. Above we have provided a reconciliation of revenue as reported to revenue on a constant currency basis for the periods presented.
“Free Cash Flow” is defined as net cash flows from operating activities less capital expenditures. We believe Free Cash Flow is a useful supplemental financial measure for us and investors in assessing our ability to pursue business opportunities and investments. Free Cash Flow is not a measure of our liquidity under IFRS and should not be considered as an alternative to net cash flows from operating activities.
Free Cash Flow is a non-IFRS measure and is not a substitute for IFRS measures in assessing our overall financial performance. Because Free Cash Flow is not a measurement determined in accordance with IFRS, and is susceptible to varying calculations, it may not be comparable to other similarly titled measures presented by other companies. Free Cash Flow should not be considered in isolation, or as a substitute for an analysis of our results as reported on our financial statements appearing elsewhere in this document. Below we have provided a reconciliation of Free Cash Flow to net cash flows from operating activities for the periods presented.
| Financial Statements Consolidated statement of operations | ||||||||||||||||
| (unaudited) | Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (in thousands of U.S. dollars, except share and per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | 204,121 | 195,068 | 783,348 | 722,238 | ||||||||||||
| Cost of goods sold | (156,343 | ) | (164,015 | ) | (631,265 | ) | (642,211 | ) | ||||||||
| Gross profit | 47,778 | 31,053 | 152,083 | 80,027 | ||||||||||||
| Research and development expenses | (5,328 | ) | (7,035 | ) | (21,047 | ) | (22,262 | ) | ||||||||
| Selling, general and administrative expenses | (80,721 | ) | (107,901 | ) | (373,396 | ) | (412,799 | ) | ||||||||
| Other operating income and (expenses), net | (204,344 | ) | (41,148 | ) | (214,652 | ) | (40,951 | ) | ||||||||
| Operating loss | (242,615 | ) | (125,031 | ) | (457,012 | ) | (395,985 | ) | ||||||||
| Finance income and (expenses), net | (50,486 | ) | 3,098 | 48,847 | (1,409 | ) | ||||||||||
| Loss before tax | (293,101 | ) | (121,933 | ) | (408,165 | ) | (397,394 | ) | ||||||||
| Income tax (expense)/benefit | (5,674 | ) | (3,236 | ) | (8,895 | ) | 4,827 | |||||||||
| Loss for the period | (298,775 | ) | (125,169 | ) | (417,060 | ) | (392,567 | ) | ||||||||
| Attributable to: | ||||||||||||||||
| Shareholders of the parent | (298,663 | ) | (125,169 | ) | (416,874 | ) | (392,567 | ) | ||||||||
| Non-controlling interests | (112 | ) | — | (186 | ) | — | ||||||||||
| Loss per share, attributable to shareholders of the parent: | ||||||||||||||||
| Basic and diluted | (0.50 | ) | (0.21 | ) | (0.70 | ) | (0.66 | ) | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic and diluted | 594,606,465 | 592,234,975 | 593,600,863 | 592,031,935 | ||||||||||||
| Consolidated statement of financial position (unaudited) | December 31, 2023 | December 31, 2022 | ||||||
| (in thousands of U.S. dollars) | ||||||||
| ASSETS | ||||||||
| Non-current assets | ||||||||
| Intangible assets | 130,326 | 127,688 | ||||||
| Property, plant and equipment | 360,286 | 492,952 | ||||||
| Right-of-use assets | 88,393 | 108,598 | ||||||
| Other non-current receivables | 44,378 | 7,848 | ||||||
| Deferred tax assets | 10,203 | 5,860 | ||||||
| Total non-current assets | 633,586 | 742,946 | ||||||
| Current assets | ||||||||
| Inventories | 67,882 | 114,475 | ||||||
| Trade receivables | 112,951 | 100,955 | ||||||
| Current tax assets | 2,505 | 243 | ||||||
| Other current receivables | 33,820 | 17,818 | ||||||
| Prepaid expenses | 16,928 | 23,413 | ||||||
| Cash and cash equivalents | 249,299 | 82,644 | ||||||
| 483,385 | 339,548 | |||||||
| Assets held for sale | — | 142,703 | ||||||
| Total current assets | 483,385 | 482,251 | ||||||
| TOTAL ASSETS | 1,116,971 | 1,225,197 | ||||||
| EQUITY AND LIABILITIES | ||||||||
| Equity | ||||||||
| Share capital | 105 | 105 | ||||||
| Treasury shares | (0 | ) | (0 | ) | ||||
| Other contributed capital | 1,628,045 | 1,628,045 | ||||||
| Other reserves | (233,204 | ) | (171,483 | ) | ||||
| Accumulated deficit | (1,060,952 | ) | (665,524 | ) | ||||
| Equity attributable to shareholders of the parent | 333,994 | 791,143 | ||||||
| Non-controlling interests | 1,787 | — | ||||||
| Total equity | 335,781 | 791,143 | ||||||
| Liabilities | ||||||||
| Non-current liabilities | ||||||||
| Lease liabilities | 72,570 | 82,285 | ||||||
| Liabilities to credit institutions | 114,249 | 2,668 | ||||||
| Provisions | 10,716 | 7,194 | ||||||
| Total non-current liabilities | 197,535 | 92,147 | ||||||
| Current liabilities | ||||||||
| Lease liabilities | 16,432 | 16,823 | ||||||
| Convertible Notes | 323,528 | — | ||||||
| Liabilities to credit institutions | 6,056 | 49,922 | ||||||
| Trade payables | 64,368 | 82,516 | ||||||
| Current tax liabilities | 2,732 | 5,515 | ||||||
| Other current liabilities | 13,873 | 11,823 | ||||||
| Accrued expenses | 121,338 | 123,037 | ||||||
| Provisions | 35,328 | 3,800 | ||||||
| 583,655 | 293,436 | |||||||
| Liabilities directly associated with the assets held for sale | — | 48,471 | ||||||
| Total current liabilities | 583,655 | 341,907 | ||||||
| Total liabilities | 781,190 | 434,054 | ||||||
| TOTAL EQUITY AND LIABILITIES | 1,116,971 | 1,225,197 | ||||||
| Consolidated statement of cash flows | ||||||||
| (unaudited) | For the year ended December 31 | |||||||
| (in thousands of U.S. dollars) | 2023 | 2022 | ||||||
| Operating activities | ||||||||
| Net loss | (417,060 | ) | (392,567 | ) | ||||
| Adjustments to reconcile net loss to net cash flows | ||||||||
| —Depreciation of property, plant and equipment and right-of-use assets and amortization of intangible assets | 51,702 | 48,315 | ||||||
| —Impairment of property, plant and equipment and right-of-use assets and intangible assets | 1,828 | 285 | ||||||
| —Impairment loss on trade receivables | 611 | 3,088 | ||||||
| —Write-down of inventories | 16,981 | 28,839 | ||||||
| —Share-based payments expense | 21,446 | 35,466 | ||||||
| —Movements in provisions, pensions and government grants | 36,341 | 3,800 | ||||||
| —Finance expenses and (income), net | (48,847 | ) | 1,409 | |||||
| —Income tax expense/(benefit) | 8,895 | (4,827 | ) | |||||
| —Loss/(gain) on disposal of property, plant and equipment | 675 | (932 | ) | |||||
| —Impairment related to assets held for sale | — | 38,293 | ||||||
| —Impairment related to discontinued construction of production facilities | 172,588 | — | ||||||
| —Other | — | (226 | ) | |||||
| Interest received | 9,630 | 2,145 | ||||||
| Interest paid | (20,504 | ) | (12,875 | ) | ||||
| Income tax paid | (18,098 | ) | (2,960 | ) | ||||
| Changes in working capital: | ||||||||
| —Decrease/(increase) in inventories | 30,543 | (55,018 | ) | |||||
| —(Increase)/decrease in trade receivables, other current receivables, prepaid expenses | (2,502 | ) | 6,991 | |||||
| —(Decrease)/increase in trade payables, other current liabilities, accrued expenses | (9,855 | ) | 31,828 | |||||
| Net cash flows used in operating activities | (165,626 | ) | (268,946 | ) | ||||
| Investing activities | ||||||||
| Purchase of intangible assets | (2,950 | ) | (4,510 | ) | ||||
| Purchase of property, plant and equipment | (66,095 | ) | (201,655 | ) | ||||
| Investments in financial assets | (1,651 | ) | — | |||||
| Proceeds from short-term investments | — | 240,959 | ||||||
| Proceeds from sale of assets held for sale | 43,998 | — | ||||||
| Net cash flows (used in)/from investing activities | (26,698 | ) | 34,794 | |||||
| Financing activities | ||||||||
| Proceeds from Convertible Notes | 324,950 | — | ||||||
| Proceeds from liabilities to credit institutions | 176,854 | 47,850 | ||||||
| Repayment of liabilities to credit institutions | (102,848 | ) | (1,032 | ) | ||||
| Repayment of lease liabilities | (11,411 | ) | (10,899 | ) | ||||
| Payment of loan transaction costs | (32,550 | ) | — | |||||
| Cash flows from financing activities | 354,995 | 35,919 | ||||||
| Net increase/(decrease) in cash and cash equivalents | 162,671 | (198,233 | ) | |||||
| Cash and cash equivalents at January 1 | 82,644 | 295,572 | ||||||
| Exchange rate differences in cash and cash equivalents | 3,984 | (14,695 | ) | |||||
| Cash and cash equivalents at December 31 | 249,299 | 82,644 | ||||||
Reconciliation of IFRS to Non-IFRS Financial measures
Reconciliation of EBITDA and Adjusted EBITDA to loss for the period
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| (unaudited) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (in thousands of U.S. dollars) | ||||||||||||||||
| Loss for the period | (298,775 | ) | (125,169 | ) | (417,060 | ) | (392,567 | ) | ||||||||
| Income tax expense/(benefit) | 5,674 | 3,236 | 8,895 | (4,827 | ) | |||||||||||
| Finance (income) and expenses, net | 50,486 | (3,098 | ) | (48,847 | ) | 1,409 | ||||||||||
| Depreciation and amortization expense | 14,618 | 13,835 | 51,874 | 48,600 | ||||||||||||
| EBITDA | (227,997 | ) | (111,196 | ) | (405,138 | ) | (347,385 | ) | ||||||||
| Share-based compensation expense | 4,687 | 7,741 | 21,446 | 35,466 | ||||||||||||
| Restructuring costs(1) | 2,416 | 3,410 | 14,760 | 4,415 | ||||||||||||
| Asset impairment charges and other costs related to discontinued construction of production facilities(2) | 201,560 | — | 201,560 | — | ||||||||||||
| Legal settlement(3) | — | — | 9,250 | — | ||||||||||||
| Asset impairment charge and other costs related to assets held for sale (4) | — | 39,581 | 375 | 39,581 | ||||||||||||
| Non-controlling interests | 112 | — | 186 | — | ||||||||||||
| Adjusted EBITDA | (19,222 | ) | (60,464 | ) | (157,561 | ) | (267,923 | ) | ||||||||
(1) Relates primarily to severance payments as the Company continues to adjust its organizational structure to the macro environment, and inventory write-offs related to the Company’s strategy reset in the Asia segment.
(2) Following certain events during the fourth quarter, the Company decided to discontinue the construction of its new production facilities in the EMEA and Americas segments. The Company recorded
(3) Relates to US securities class action litigation settlement expenses.
(4) Relates to the YYF Transaction. See the Company's Form 6-K filed on January 3, 2023 and March 2, 2023 for further details.
Reconciliation of Free Cash Flow to Net Cash Flows used in Operating Activities
| (unaudited) | Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (in thousands of U.S. dollars) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net cash flows used in operating activities | (14,147 | ) | (53,722 | ) | (165,626 | ) | (268,946 | ) | ||||||||
| Capital expenditures | (17,062 | ) | (31,813 | ) | (69,045 | ) | (206,165 | ) | ||||||||
| Free Cash Flow | (31,209 | ) | (85,535 | ) | (234,671 | ) | (475,111 | ) | ||||||||
FAQ
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