Wallbox N.V.(WBX) - 2022 Q4 - Annual Report

Introductory Sections Presentation of Financial and Other Information The company reports in Euros under IFRS and utilizes non-IFRS measures like EBITDA for performance analysis - The company utilizes non-IFRS measures, including EBITDA and Adjusted EBITDA, to supplement its IFRS financial statements for performance analysis[35][36] - EBITDA is defined as loss for the year before income tax credit, financial income, interest expenses, amortization, and depreciation[40] - Adjusted EBITDA further excludes non-cash and other items such as changes in fair value of convertible bonds and warrants, share listing expenses, foreign exchange gains/losses, and share-based payment expenses[42] Risk Factor Summary The company faces significant risks from a history of operating losses, dependency on EV adoption, intense competition, and material weaknesses in internal controls - The company is an early-stage entity with a history of operating losses and expects to incur significant expenses and continued losses in the near to medium term[55] - Business growth is highly dependent on the rapid adoption of EVs, which is influenced by government incentives, fuel prices, and the availability of EV components[55] - Identified material weaknesses in internal control over financial reporting pose a significant risk to the company's financial statement reliability[57] - The business is exposed to macroeconomic risks, including increased component and shipping costs, supply shortages, inflation, and rising interest rates[57] PART I Item 3. Key Information This section details significant investment risks related to business operations, technology, public company status, and Dutch incorporation Risk Factors Key risks include historical operating losses, reliance on the volatile EV market, supply chain vulnerabilities, and concentrated voting power - The company has a history of operating losses, incurring a net loss of €62.8 million in 2022 and €223.8 million in 2021, and expects to continue incurring losses in the near term[61] - Growth is highly dependent on the continued adoption of EVs, which is subject to various factors like government incentives, competition from other fuel technologies, and consumer perceptions[63][64] - The company has identified material weaknesses in its internal control over financial reporting related to insufficient IFRS expertise, ineffective IT general controls, and inadequate monitoring of accounting functions[195] - The dual-class share structure concentrates approximately 61% of voting power with the company's co-founders, limiting the influence of other shareholders on corporate matters[211] - As a Dutch public company, shareholder rights may differ from those in U.S. jurisdictions, and Dutch law includes provisions that could delay or prevent an acquisition[223][224][225] Information on the Company Wallbox is a global, vertically integrated smart EV charging company that went public in 2021 and operates across three geographical segments - Wallbox became a publicly traded company on the NYSE under the symbol "WBX" on October 1, 2021, following a business combination with the SPAC Kensington Capital Acquisition Corp. II[253] - The company has a global presence, selling over 420,000 units across 113 countries as of December 31, 2022, with manufacturing facilities in Spain, China, and a new facility in Arlington, Texas[262][291] - Wallbox has expanded its capabilities through strategic acquisitions, including Electromaps (public charging platform), ARES (PCB manufacturing), and COIL (U.S. installation services)[260][261] FY2022 Revenue Breakdown by Customer Channel | Customer Channel | % of Revenue | | :--- | :--- | | Distributors, Resellers, and Installers | ~57% | | Automotive Manufacturers and Utility Companies | ~37.5% | | Direct Sales (Enterprise & E-commerce) | ~5.5% | Business Overview The company offers a comprehensive ecosystem of smart EV charging hardware and software solutions with a multi-channel go-to-market strategy - The product portfolio covers residential, business, and public charging needs, featuring AC chargers (Pulsar Plus, Commander 2), DC fast chargers (Supernova, Hypernova), and the world's first bi-directional DC home charger, Quasar[261] - Proprietary software platforms are central to the user experience: 'myWallbox' for private energy management and 'Electromaps' for accessing a network of over 244,000 public charge points[261][286] - The company's go-to-market strategy is consumer-focused, selling through automotive OEMs, utility companies, a partner ecosystem of installers and distributors, and direct e-commerce channels[297][298] - The competitive landscape varies by region: Europe and APAC are highly fragmented, while North America has higher barriers to entry and fewer, larger players[304][305][306] Operating and Financial Review and Prospects Revenue doubled in 2022, but operating losses widened due to higher expenses, while net loss narrowed significantly due to financial items Consolidated Results of Operations (2022 vs. 2021) | Metric (€ in thousands) | FY 2022 | FY 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 144,185 | 71,579 | 101% | | Operating Loss | (138,835) | (53,572) | 159% | | Net Financial Result | 71,439 | (172,012) | (142)% | | Loss for the year | (62,800) | (223,777) | (72)% | Adjusted EBITDA Reconciliation (Non-IFRS) | Metric (€ in thousands) | FY 2022 | FY 2021 | FY 2020 | | :--- | :--- | :--- | :--- | | Loss for the year | (62,800) | (223,777) | (11,402) | | EBITDA | (43,145) | (210,680) | (8,928) | | Adjusted EBITDA | (89,494) | (35,245) | (6,363) | - As of December 31, 2022, the company had cash and cash equivalents of €83.3 million, supplemented by subsequent financing events[444][447][448] - Net cash used in operating activities increased to €136.3 million in 2022 from €69.6 million in 2021, largely due to a significant increase in inventory to mitigate supply chain disruptions[460][462] Directors, Senior Management and Employees The company is led by its co-founder and CEO, with executive compensation heavily weighted towards share-based payments and significant employee growth in 2022 - The company is led by its co-founder and CEO, Enric Asunción Escorsa, with a board comprised of one executive and six non-executive members[483][485] Executive Officer Compensation (FY 2022) | Compensation Type | Amount (€ thousands) | | :--- | :--- | | Periodically-paid remuneration | 886 | | Bonuses | 526 | | Share based payments | 9,769 | | Total compensation | 11,181 | - The company maintains multiple equity incentive plans, including legacy stock option programs and a 2021 Equity Incentive Plan[506][512][514] Average Number of Employees | Year | Average Employees | | :--- | :--- | | 2022 | 1,182 | | 2021 | 600 | | 2020 | 272 | Major Shareholders and Related Party Transactions The company's co-founders maintain majority voting control through a dual-class share structure, with Iberdrola being a key shareholder and commercial partner - The company has a dual-class share structure, with co-founders Enric Asunción Escorsa and Eduard Castañeda holding all Class B shares, giving them a combined voting power of 62.1%[562] - Significant shareholders with over 5% beneficial ownership include Inversiones Financieras Perseo, S.L.U. (Iberdrola affiliate), Mingkiri, S.L., and Seaya Ventures[562] - Related party transactions in 2022 included €4.3 million in charger sales to Iberdrola affiliates and €609 thousand in lease payments to an Iberdrola subsidiary[572][573] Financial Information The company has not paid cash dividends and intends to retain future earnings to fund business growth and expansion - The company has never paid cash dividends and does not anticipate paying any in the foreseeable future, intending to retain all available funds for business growth[583][584] Additional Information This section covers supplementary details on securities, contracts, and material U.S. federal income tax consequences for shareholders - The company does not expect to be treated as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, but this status is determined annually and is subject to change[249][618] Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from fluctuating interest rates, foreign currency exchange rates, and the fair value of its derivative warrant liabilities - The company is exposed to interest rate risk, with a hypothetical 100 basis point change in rates estimated to impact profit or loss by €1.3 million[641][1127] - Significant foreign currency risk exists, particularly from transactions denominated in U.S. dollars; a 10% strengthening of the Euro against the USD would result in a €565 thousand loss[642][1132] - The company faces market price risk from its derivative warrant liabilities, which are measured at fair value and resulted in a fair value gain of €80.7 million in 2022[645][1133] Controls and Procedures Management concluded that disclosure controls were ineffective as of year-end 2022 due to several material weaknesses in internal financial reporting controls - The CEO and CFO concluded that disclosure controls and procedures were not effective as of December 31, 2022, due to material weaknesses in internal control over financial reporting[650] - Identified material weaknesses include insufficient finance personnel with IFRS knowledge, inadequately designed IT general controls, and ineffective policies for review and supervision of accounting functions[651][653] - Remediation efforts are underway, including hiring more finance staff, engaging external advisors, and acquiring a new SaaS tool to improve monitoring[652][653] Corporate Governance As a foreign private issuer, the company follows Dutch corporate governance practices, which differ from certain NYSE requirements for domestic issuers - Wallbox is a foreign private issuer and follows certain Dutch corporate governance practices in lieu of NYSE listing standards[668] - The company intends to follow Dutch law regarding shareholder approval for equity compensation plans, which may differ from NYSE rules for a domestic company[671] PART III Financial Statements This section presents the company's audited consolidated financial statements and cash flows for the fiscal years 2020 through 2022 Consolidated Statement of Financial Position (Assets) | (In thousand Euros) | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Non-Current Assets | 166,429 | 91,122 | | Total Current Assets | 255,171 | 251,491 | | Total Assets | 421,984 | 342,613 | Consolidated Statement of Financial Position (Equity & Liabilities) | (In thousand Euros) | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Equity | 169,150 | 131,072 | | Total Non-Current Liabilities | 74,041 | 41,173 | | Total Current Liabilities | 178,793 | 170,368 | | Total Equity and Liabilities | 421,984 | 342,613 | Consolidated Statement of Cash Flows | (In thousand Euros) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | (136,292) | (69,631) | | Net cash used in investing activities | (13,959) | (88,297) | | Net cash from financing activities | 111,747 | 246,925 |