- Retail sales totalled 12,548 cars in Q3 2024, down 8% versus Q3
2023
- Revenue USD 551 million in Q3 2024, down 10% versus Q3 2023 on
lower volume and competitive market conditions
- USD -323 million net loss and USD -180 million adjusted EBITDA;
an adjusted EBITDA improvement of 28%, versus Q3 2023, reflecting
continuous management actions reducing selling, administrative and
general expenses
- USD 501 million cash balance at end Q3 2024; secured over USD
800 million in bank facilities in December
- Updated FY 2024 guidance
Polestar (Nasdaq: PSNY) today presents selected preliminary
unaudited results for the third quarter and first nine months of
2024.
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Key financial highlights (in millions of U.S.
dollars)
For the nine months ended
September 30,
For the three months
ended September 30,
2024
2023 (restated)1
Change %
2024
2023 (restated)1
Change %
Revenue
1,456.5
1,846.3
(21)
550.7
608.6
(10)
Gross margin %
(2.4)
1.0
N/A
(1.4)
(0.6)
N/A
Adjusted EBITDA
(602.6)
(677.1)
(11)
(180.5)
(252.3)
(28)
Cash balance
500.9
951.1
(47)
500.9
951.1
(47)
1. “Restated” refers to the restated 2023
financial information contained within the Annual Report on Form
20-F, filed with the SEC on August 14, 2024. In connection with the
disclosure made below by Polestar that it has identified
misstatements in certain 2022 and 2023 balance sheet and cash flow
statements that it intends to correct by a subsequent restatement
of certain full and half-year financial statements relating to
those years, small adjustments to the 2023 income statements are
also expected to be made that will affect some of the figures
published above in the table. While the adjustments that would
impact certain of the figures in above table are not expected to be
material, you are hereby advised not to place undue reliance on
these figures. As more fully described in the Company's Current
Report on Form 6-K filed with the U.S. Securities and Exchange
Commission today, the Company expects to restate and re-issue
certain historical financial information including its audited
financial statements for full year 2023 and its interim financial
information for the six-month period ended June 30, 2023.
For the nine months ended September 30, 2024
- Revenue decreased by USD 389.8 million or 21%, mainly due to
lower global vehicle sales of Polestar 2, higher discounts in a
competitive market and a delay in sales ramp up of new
carlines.
- Gross margin decreased by 3.4 pts to a gross loss of 2.4% with
increased discounts for Polestar 2 and negative impact from IP
related to the Polestar 2 previously depreciated into Research and
Development and now capitalised into inventory and released into
cost of sales upon inventory sales.
- Adjusted EBITDA increased by USD 74.5 million or 11% reflecting
continuous management actions reducing selling, administrative and
general expenses, as well as impact of reclassification of IP
depreciation related to Polestar 2 (see above) offset by lower
gross margin.
- Cash balance reduced by USD 450 million to USD 501 million,
impacted by a negative operating cashflow and cashflow from
investing activities.
For the three months ended September 30, 2024
- Revenue decreased by USD 57.9 million or 10% mainly due to
lower global vehicle sales of Polestar 2, higher discounts in a
competitive market and a delay in sales ramp up of new
carlines.
- Gross margin decreased by 0.8 pt to a gross loss of 1.4% with
increased discounts for Polestar 2 and IP impact related to the
Polestar 2 (see above), slightly offset by the start of new carline
sales at the end of the quarter, improving margins.
- Adjusted EBITDA increased by USD 71.8 million reflecting
continuous management actions reducing selling, administrative and
general expenses in addition to positive margin impact of new car
lines sales.
Key Loan facilities / funding highlights
Given market conditions and the Company’s anticipated
performance in 2024, the Company, alongside Geely, has engaged in
constructive dialogue with its USD 950 million club loan lenders,
who remain supportive. The club-loan lenders have agreed to amend
the revenue covenant for 2024 to ensure its compliance and have
also agreed to waive testing of the year end 2024 and Q1 2025 debt
ratio covenant. The Company expects to continue having a
constructive dialogue with lenders regarding its future club loan
obligations.
In December, the Company secured over USD 800 million in
12-month term facilities, provided by several banks. The Company is
working on securing an additional 12-month loan facility of over
USD 400 million. This proposed new facility is approved by the
lender’s credit committee and is expected to be available to the
Company later this month.
Approximately one fourth of proceeds from the new secured
facilities are expected to be used to repay other loans, with
remaining proceeds being available to support the Company's working
capital needs going forward. The Company is still at a comfortable
debt level in relation to its loan covenants.
Non-Reliance on 2022 and 2023 previously issued financial
statements
The Company has announced on a Form 6-K filed with the SEC today
that it intends to restate its audited financial statements for the
years ended 2022 and 2023 as well as its unaudited interim
financial results for the six-month periods ended June 30, 2023 and
June 30, 2024.
As noted in the Form 6-K filed earlier today, the primary reason
for this restatement decision relates to balance sheet errors
concerning the Company’s unique tooling, which have resulted in an
underreporting of assets and accrued liabilities in matching
amounts for the periods referenced above.
The correction of these balance sheet errors will have no impact
on previously reported revenue, operating loss, net loss, adjusted
EBITDA or net assets, nor do these corrections affect the Company’s
underlying business operations, cash position, or liquidity.
A reclassification of cash flows between operating and investing
activities and other smaller errors that have been identified will
also be corrected as part of this restatement process. Please see
the Form 6-K for further details.
Financial guidance
As a result of continued adverse market conditions, Polestar is
today updating its guidance for 2024 and the fourth quarter. Prior
expectations were for revenue in the year to be similar to that in
2023, and for a positive gross profit margin in the fourth quarter.
For full year 2024 the Company now expects a mid-teens percentage
decline in revenue and a negative gross margin around the same
level as full year 2023, as the fourth quarter product mix was
negatively impacted by fewer than expected Polestar 3 and Polestar
4 sales. Other one-time events also contributed to a difficult Q4,
including a market value adjustment of inventory as well as
continuing market pressure from discounting. A solid order intake
for new models in late Q4 signals an encouraging start to 2025.
To better position the Company for future fundraising and lower
transaction costs, Polestar is exploring the possibility of
conducting a change of the ratio of its American Depositary Shares
to its ordinary shares, which is currently 1:1.
Key recent developments
- Michael Lohscheller appointed President and CEO, effective from
October 2024
- Jean-François Mady appointed as Chief Financial Officer,
effective from October 2024
- Jonas Engstr�m appointed as Chief Operating Officer, effective
from December 2024
- Board strengthened through appointment of two new independent
directors, Christine Gorjanc (who also serves as chair of the audit
committee) and Xiaojie (Laura) Shen, as well as another director,
Francesca Gamboni, who also serves as Volvo Cars’ Chief
Manufacturing & Supply Chain Officer
Key business and operational highlights
- Polestar 3 long-range single motor starts production in USA,
with a certified WLTP range of 706 km
- Polestar drivers in North America now have access to Tesla
Superchargers
- Plug and Charge capability announced for Polestar 3
- New retail partners and active selling model implemented across
major markets
Preliminary key operational highlights6
The below table summarises key preliminary operational
highlights as of and for the nine and three months ended September
30, 2024:
For the nine months ended
September 30,
% Change
For the three months ended September
30,
% Change
2024
2023
2024
2023
Retail sales 1
32,596
41,156
(21)
12,548
13,666
(8)
- including external vehicles with
repurchase obligations
1,170
1,955
(40)
182
684
(73)
- including internal vehicles2
2,204
1,718
28
1,243
1,058
17
For the nine months ended
September 30,
Change
2024
2023
Markets3
27
27
0
Locations4
187
157
30
Service points5
1,170
1,135
35
(1)
Retail Sales figures, which
Polestar publishes quarterly from now on, are sales to end
customers. Retail Sales include new cars handed over via all sales
channels and all sale types, including but not restricted to
internal, fleet, retail, rental and leaseholders’ channels across
all markets irrespective of their market model and setup and may or
may not generate directly revenue for Polestar.
(2)
Internal sales are units that are
intended to be used by Polestar, Polestar Spaces, Polestar
Destinations, Polestar Test Drive Centers, for the purpose of
demonstration, press cars, company vehicles, courtesy cars, and
such like.
(3)
Represents the markets in which
Polestar operates.
(4)
Represents Polestar Spaces,
Polestar Destinations, and Polestar Test Drive Centers.
(5)
Represents Volvo Cars service
centers to provide access to customer service points worldwide in
support of Polestar’s international expansion.
(6)
These are preliminary estimates
and are subject to revision as part of the annual audit process
Unaudited Reconciliation of GAAP and Non-GAAP Results
In December 2024, the Company changed the calculation for
Adjusted EBITDA. Refer to the Non-GAAP financial measures section
of the press release for more details. Adjusted EBITDA for the
comparative period is recast for the new calculation and presented
alongside the historical calculation for comparability.
Adjusted EBITDA
(in millions of U.S. dollars)
For the nine months ended
September 30,
For the three months ended
September 30
2024
2023
2024
2023
Net loss
(862.6)
(516.3)
(323.1)
(175.4)
Fair value change - Earn-out rights
(76.7)
(388.6)
62.9
(155.6)
Fair value change - Class C Shares
1.5
(18.0)
4.0
(7.2)
Finance income
(8.1)
(21.5)
(28.0)
(9.0)
Finance expense
261.4
157.4
85.5
64.8
Income tax expense
6.0
14.0
(11.0)
7.0
Depreciation and amortization
75.9
112.2
29.2
39.4
Gain on asset grouping sold to a related
party
-
(16.3)
-
(16.3)
Adjusted EBITDA (non-GAAP)
(602.6)
(677.1)
(180.5)
(252.3)
Adjusted EBITDA (Company’s historical
calculation)
(in millions of U.S. dollars)
For the nine months ended September 30,
2023
For the three months ended September
30, 2023
Net loss
(516.3)
(175.4)
Fair value change - Earn-out rights
(388.6)
(155.6)
Fair value change - Class C Shares
(18.0)
(7.2)
Interest income
(21.5)
(9.0)
Interest expense
134.3
60.4
Income tax expense
14.0
7.0
Depreciation and amortization
98.8
36.8
Adjusted EBITDA (historical calculation
non-GAAP)
(697.3)
(243.0)
Conference call
A conference call with management will follow today’s strategy
and business update, which begins at 2pm CET. The update will be
streamed online, with the conference call to follow immediately
thereafter. Access details can be found under Events on the
Polestar Investor Relations website.
Calendar
Polestar intends to publish preliminary unaudited condensed
full-year and fourth quarter results on 6 March 2025.
Notes
All financial figures are in millions of U.S. dollars (USD).
Unless stated otherwise, the performance shown in this press
release covers the nine-month period to 30 September 2024 (9M YTD
2024) and the three-month period to 30 September 2024 (Q3 2024),
compared to the nine-month period to 30 September 2023 (9M YTD
2023) and the three-month period to 30 September 2023 (Q3 2023),
respectively.
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 certain non-GAAP
financial measures are helpful to investors as they provide a
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 alternative 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 above.
The non-GAAP financial measure used in this press release is
Adjusted EBITDA:
Adjusted EBITDA is calculated as net loss, adjusted to exclude
listing expense, fair value change - Earn-out rights, fair value
change - Class C Shares, finance expense, finance income, income
tax benefit (expense), depreciation and amortization, and
impairment of property, plant and equipment, vehicles under
operating leases, and intangibles assets, restructuring costs,
disposals of investments, and unusual operating income and expenses
that are considered rare or discrete events and are infrequent in
nature. Depreciation and amortization includes (1) depreciation and
amortization capitalized into the carrying value of inventory sold
(i.e., part of inventory costs) and (2) depreciation and
amortization expense. Restructuring costs include expenses
associated with programs that were planned and controlled by
management, and materially changed either (1) the scope of a
business undertaken by the Group or (2) the manner in which
business is conducted. Disposals of investments include disposals
of, by sales or otherwise, (1) debt or equity financial instruments
issued by another entity that are held as investments, (2)
intangible assets, (3) property, plant, and equipment, and (4)
groups of assets and liabilities representing disposal groups that
were transferred together as part of individual transactions. This
measure is reviewed by management and is a relevant measure for
understanding the underlying operating results and trends of the
core business prior to the impact of any adjusting items.
Prior to December 2024, adjusted EBITDA was calculated as net
loss, adjusted for listing expense, fair value change - Earn-out
rights, fair value change - Class C Shares, interest income,
interest expense, income tax benefit (expense), depreciation and
amortization, and the impairment of property, plant and equipment,
vehicles under operating leases, and intangibles assets. The
calculation was refined in December 2024 to change interest income
and interest expense to finance income and finance expense,
respectively, in order to exclude the effects of all items
associated with financing activities of the Group instead of only
interest related items. Additionally, exclusions for restructuring
costs, disposals of investments, and unusual operating income and
expenses that are considered rare or discrete events and are
infrequent in nature were added to the calculation to further
refine management's view of earnings from core operations. The
definition of depreciation and amortization was also changed to
include depreciation and amortization capitalized into the carrying
value of inventory sold (i.e., part of inventory costs) to account
for the Group's change in the pattern of consumption of the future
economic benefits embodied in internally developed and acquired
intellectual property for the Polestar 2 from the straight-line
method to units of production method in the fourth quarter of the
year ended December 31, 2023. This method is also applicable to
internally developed and acquired intellectual property for the
Polestar 3 which entered production in the fourth quarter of the
year ended December 31, 2023 and the Polestar 4 which entered
production in the first quarter of the year ended December 31,
2024. The change to the definition of depreciation and amortization
clarifies that the impact of all depreciation and amortization,
irrespective of methodology and expense nature, is excluded from
net loss for this measure. These changes provide a clearer view of
earnings from core operations from management's perspective and
improve comparability of earnings from core operations across
reporting periods. Accordingly, Adjusted EBITDA for the comparative
period is recast for the new calculation and presented alongside
the historical calculation for comparability.
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 filed with the SEC in Polestar’s Annual Reports on Form
20-F.
About Polestar
Polestar (Nasdaq: PSNY) is the Swedish electric performance car
brand with a focus on uncompromised design and innovation, and the
ambition to accelerate the change towards a sustainable future.
Headquartered in Gothenburg, Sweden, its cars are available in 27
markets globally across North America, Europe and Asia Pacific.
Polestar has three models in its line-up: Polestar 2, Polestar
3, and Polestar 4. Planned models include the Polestar 5 four-door
GT (to be introduced in 2025), the Polestar 6 roadster and the
Polestar 7 compact SUV. With its vehicles currently manufactured on
two continents, North America and Asia, Polestar plans to diversify
its manufacturing footprint further, with production of Polestar 7
planned in Europe.
Polestar has an unwavering commitment to sustainability and has
set an ambitious roadmap to reach its climate targets: halve
greenhouse gas emissions by 2030 per-vehicle-sold and become
climate-neutral across its value chain by 2040. Polestar’s
comprehensive sustainability strategy covers the four areas of
Climate, Transparency, Circularity, and Inclusion.
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 including the number
of vehicle deliveries and gross margin. For example, projections of
revenue, volumes, margins, cash flow break-even and other financial
or operating metrics and statements regarding expectations of
future needs for funding and plans related thereto 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’, ‘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 enter into or maintain agreements or partnerships with
its strategic partners, including Volvo Cars, Geely and Xingji Mezu
Group, original equipment manufacturers, vendors and technology
providers; (2) Polestar’s ability to maintain relationships with
its existing suppliers, source new suppliers for its critical
components and enter into longer term supply contracts and complete
building out its supply chain; (3) Polestar’s ability to raise
additional funding; (4) Polestar’s ability to successfully execute
cost-cutting activities and strategic efficiency initiatives; (5)
Polestar’s estimates of expenses, profitability, gross margin, cash
flow, and cash reserves; (6) the identification and remediation of
accounting errors and/or a final assessment of errors already
identified that differs significantly from Polestar’s preliminary
view of such errors and the successful filing of restatements of
any SEC reports; (7) Polestar’s ability to continue to meet stock
exchange listing standards; (8) changes in domestic and foreign
business, market, financial, political and legal conditions; (9)
demand for Polestar’s vehicles or car sale volumes, revenue and
margin development based on pricing, variant and market mix, cost
reduction efficiencies, logistics and growing aftersales; (10)
delays in the expected timelines for the development, design,
manufacture, launch and financing of Polestar’s vehicles and
Polestar’s reliance on a limited number of vehicle models to
generate revenues; (11) increases in costs, disruption of supply or
shortage of materials, in particular for lithium-ion cells or
semiconductors; (12) risks related to product recalls, regulatory
fines and/or an unexpectedly high volume of warranty claims; (13)
Polestar’s reliance on its partners to manufacture vehicles at a
high volume, some of which have limited experience in producing
electric vehicles, and on the allocation of sufficient production
capacity to Polestar by its partners in order for Polestar to be
able to increase its vehicle production volumes; (14) the ability
of Polestar to grow and manage growth profitably, maintain
relationships with customers and suppliers and retain its
management and key employees; (15) risks related to future market
adoption of Polestar’s offerings; (16) risks related to Polestar’s
current distribution model and the evolution of its distribution
model in the future; (17) the effects of competition and the high
barriers to entry in the automotive industry and the pace and depth
of electric vehicle adoption generally on Polestar’s future
business; (18) changes in regulatory requirements (including
environmental laws and regulations and regulations related to
connected vehicles), governmental incentives, tariffs and fuel and
energy prices; (19) Polestar’s reliance on the development of
vehicle charging networks to provide charging solutions for its
vehicles and its strategic partners for servicing its vehicles and
their integrated software; (20) Polestar’s ability to establish its
brand and capture additional market share, and the risks associated
with negative press or reputational harm, including from electric
vehicle fires; (21) the outcome of any potential litigation,
including litigation involving Polestar and Polestar Automotive US
Investment Inc. (formerly known as Gores Guggenheim, Inc.),
government and regulatory proceedings, tax audits, investigations
and inquiries; (22) Polestar’s ability to continuously and rapidly
innovate, develop and market new products; (23) the impact of the
ongoing conflict between Ukraine and Russia and in Israel, the Gaza
Strip and the Red Sea; and (24) other risks and uncertainties set
forth in the sections entitled “Risk Factors” and “Cautionary Note
Regarding Forward-Looking Statements” in Polestar’s Form 20-F, and
other documents filed, or to be filed, with the SEC by Polestar.
There may be additional risks that Polestar presently does not know
or that Polestar currently believes are immaterial that could also
cause actual results to differ from those contained in the
forward-looking statements.
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, except as may be
required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250116104558/en/
Investor Relations ir@polestar.com
Theo Kjellberg Head of Corporate Communications
theo.kjellberg@polestar.com
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