Oatly(OTLY) - 2023 Q2 - Quarterly Report

Administration Report Company Overview Oatly Group AB (publ) is a Nasdaq-listed, innovative company developing and selling oat-based dairy substitutes, aiming to lead plant-based consumption - Oatly Group AB (publ) is an innovative company operating within sustainable nutritional health, developing, producing, and selling oat-based dairy substitute products under its own brand, Oatly[4] - The company's goal is to be an international lifestyle company which is world-leading in its technological area and drives the change toward more plant-based consumption[4] - Nativus Company Limited owns 45.9% of Oatly Group AB (publ)'s ordinary shares; none of the remaining shareholders own more than 10%[6] - Oatly Group AB (publ) is listed on the Nasdaq Global Select Market, US[6] Significant Events During the Financial Year 2022 In 2022, revenue grew by 12.3% to $722.2 million despite macro challenges, while strategic actions led to an asset sale and $38.3 million impairment Revenue Growth (2022 vs 2021) | Metric | 2022 (USD Thousand) | 2021 (USD Thousand) | Change (USD Thousand) | Growth (%) | | :---------------- | :---------- | :---------- | :------------ | :--------- | | Revenue | 722,238 | 643,190 | 79,048 | 12.3% | - Revenue growth was primarily a result of additional supply from existing and new facilities and implemented price increases in EMEA and the Americas[7] - Revenue growth was negatively impacted by slower production capacity scale-up in Asia and the Americas (partially due to COVID-19), the complex macro environment in EMEA and the U.S., and lower than expected sales in Asia (primarily China) due to COVID-19 related foodservice closures[7] - Strategic actions were initiated to adapt the supply chain network strategy and simplify the organizational structure, aiming for increased agility and profitability with a more asset-light strategy[9] - Approximately $4.4 million in severance-related charges were incurred during 2022 due to strategic actions to simplify the organizational structure[8] - The company operates production facilities globally, with three additional facilities in Peterborough (U.K.), Fort Worth (U.S.), and China (Asia III) under construction or planning, expected to be completed between 2024 and 2026[12][13] - The Russian invasion of Ukraine in February 2022 caused a negative impact on the global economy, driving increases in transportation, energy, and material costs, and indirectly impacting ingredient supply and pricing[16] - Amendments to the revolving credit facility (SRCF Agreement) were implemented, including postponing the EBITDA financial covenant, lowering solvency minimums, and introducing dividend restrictions; a conditional incremental credit facility of SEK 850 million (equivalent to $81.3 million) was established[17] - On December 30, 2022, the Group entered into an asset purchase agreement to sell its Ogden, Utah, and Dallas-Fort Worth, Texas, facilities, classifying these assets as held for sale and recognizing a $38.3 million impairment as other operating expenses[19] Significant Events After the Financial Year 2022 Post-year-end, Oatly completed the sale of its Ogden and Dallas-Fort Worth manufacturing facilities for $102.6 million, establishing a strategic manufacturing alliance and co-pack agreement. The company also authorized and issued $300 million in 9.25% Convertible Senior PIK Notes due 2028, amended its SRCF Agreement, and entered a new $130 million Term Loan B Credit Agreement - On March 1, 2023, the Group completed the sale of its Ogden, Utah, and Dallas-Fort Worth, Texas, manufacturing facilities to Ya YA Foods USA LLC (YYF) for approximately $102.6 million, establishing a strategic manufacturing alliance[23][24] - Oatly continues to own all intellectual property related to oat base production and operates its own equipment at the facilities, while YYF will manufacture certain finished products under a co-pack agreement[23] - An extraordinary general meeting on March 6, 2023, authorized the board to resolve on new issues of shares, warrants, and/or convertible bonds up to a maximum of $300 million[25] - In March and April 2023, the company issued $300 million aggregate principal amount of 9.25% Convertible Senior PIK Notes due 2028, with an initial conversion price of $2.41 per Ordinary Share or ADS[27][28] - On April 18, 2023, the SRCF Agreement was amended and restated, resetting its term to three years and six months, reducing commitments to SEK 2,100 million (equivalent to $201.0 million), and resetting financial covenants[29][30] - On April 18, 2023, a Term Loan B Credit Agreement for $130 million was entered into, with a five-year term and an interest rate of Term SOFR plus 7.5% or Base Rate plus 6.5%[31] - An Intercreditor Agreement was also entered into on April 18, 2023, to govern the relationship and security ranking among the various creditor groups[32] Future Outlook and Risks Oatly anticipates continued strong growth in the plant-based category, focusing on capacity expansion, but expects ongoing negative impacts from COVID-19, cost inflation, and the Ukraine war, with 2023 net capital expenditures projected at $180-$200 million - The plant-based category is continuously growing strong globally, and the Group will continue efforts to establish and grow operations in major markets, focusing on expanding production capacity[33] - Negative impacts from the COVID-19 pandemic, including restrictions, absenteeism, supply chain delays, and inflationary pressures, are expected to continue throughout the first quarter of 2023 and beyond, particularly in China[34] - Cost inflation is expected to continue negatively impacting results for the remainder of 2023, affecting supply chain, operations, and capacity expansion projects[35] - Net capital expenditures for 2023 are expected to be in the range of $180 million to $200 million, primarily for investments in production facilities[38] - The company believes its sources of liquidity and capital will be sufficient to meet business needs for at least the next 12 months[38] Innovation and Sustainability Oatly is committed to innovation in oat-based dairy alternatives, establishing a Research and Innovation Center in Sweden, and prioritizes sustainability with a vision to halve human cow's milk consumption due to oat milk's lower climate impact - Oatly's innovation goal is to build the best possible form of milk and other dairy products for humans and the planet, focusing on creating a better nutritional profile[39] - The company has a global food innovation team with over 100 employees in innovation management and R&D as of December 31, 2022[40] - A Research and Innovation Center is being established in Sweden, expected to be finished in 2023, to partner with leading scientists and industry experts[40] - Sustainability is at the core of the business, with a vision to lead a global movement to reduce human consumption of cow's milk by half, as oat milk generally has a significantly lower climate impact[51] - A separate sustainability report is published at www.oatly.com, detailing the company's work on transforming society towards plant-based food and drink[52] Group Financial Performance Summary In 2022, Oatly Group's revenue increased by 12.3% to $722.2 million, but reported a significant loss before tax of $(397.4) million, with total assets decreasing to $1,225.2 million and the equity/asset ratio declining to 64.6% Group Financial Highlights (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :-------------------- | :------- | :------- | :------------ | :--------- | | Revenue | 722,238 | 643,190 | 79,048 | 12.3% | | Loss before tax | (397,394) | (215,048) | (182,346) | 84.8% | | Total assets | 1,225,197 | 1,628,912 | (403,715) | (24.8%) | | Equity/asset ratio (%) | 64.6% | 76.4% | (11.8) pp | (15.4%) | | Average employees | 1,880 | 1,280 | 600 | 46.9% | Proposed Appropriation of Profits The Board of Directors proposes that the available profits of SEK 15,424,011,854 be carried forward - The Board of Directors proposes that profits available for disposal, totaling SEK 15,424,011,854, be carried forward[54] Consolidated Financial Statements Consolidated Statement of Operations In 2022, Oatly reported $722.2 million revenue, but gross profit decreased significantly to $80.0 million, and net loss widened to $(392.6) million, resulting in a basic and diluted loss per share of $(0.66) Consolidated Statement of Operations (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Revenue | 722,238 | 643,190 | 79,048 | 12.3% | | Cost of goods sold | (642,211) | (488,177) | (154,034) | 31.5% | | Gross profit | 80,027 | 155,013 | (74,986) | (48.4%) | | Research and development expenses | (22,262) | (16,771) | (5,491) | 32.7% | | Selling, general and administrative expenses | (412,799) | (353,929) | (58,870) | 16.6% | | Other operating (expenses) and income, net | (40,951) | 1,944 | (42,895) | (2206.5%) | | Operating loss | (395,985) | (213,743) | (182,242) | 85.3% | | Loss before tax | (397,394) | (215,048) | (182,346) | 84.8% | | Loss for the year, attributable to shareholders | (392,567) | (212,393) | (180,174) | 84.8% | | Loss per share, basic and diluted ($) | (0.66) | (0.39) | (0.27) | 69.2% | Consolidated Statement of Comprehensive Loss Oatly Group's total comprehensive loss significantly increased to $(489.6) million in 2022 from $(284.4) million in 2021, primarily due to a higher loss for the year and increased negative exchange differences Consolidated Statement of Comprehensive Loss (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Loss for the year | (392,567) | (212,393) | (180,174) | 84.8% | | Exchange differences from translation of foreign operations | (96,997) | (71,961) | (25,036) | 34.8% | | Total comprehensive loss for the year | (489,564) | (284,354) | (205,210) | 72.2% | Consolidated Statement of Financial Position As of December 31, 2022, total assets decreased to $1,225.2 million, driven by reduced cash and reclassified assets, while total equity declined to $791.1 million and total liabilities increased to $434.1 million Consolidated Statement of Financial Position Highlights (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Total non-current assets | 742,946 | 821,848 | (78,902) | (9.6%) | | Inventories | 114,475 | 95,661 | 18,814 | 19.7% | | Short-term investments | — | 249,937 | (249,937) | (100.0%) | | Cash and cash equivalents | 82,644 | 295,572 | (212,928) | (72.0%) | | Assets held for sale | 142,703 | — | 142,703 | N/A | | Total current assets | 482,251 | 807,064 | (324,813) | (40.2%) | | TOTAL ASSETS | 1,225,197 | 1,628,912 | (403,715) | (24.8%) | | Total equity attributable to shareholders | 791,143 | 1,245,299 | (454,156) | (36.5%) | | Total non-current liabilities | 92,147 | 140,226 | (48,079) | (34.3%) | | Liabilities to credit institutions (current) | 49,922 | 5,987 | 43,935 | 733.8% | | Liabilities directly associated with assets held for sale | 48,471 | — | 48,471 | N/A | | Total current liabilities | 341,907 | 243,387 | 98,520 | 40.5% | | Total liabilities | 434,054 | 383,613 | 50,441 | 13.2% | | TOTAL EQUITY AND LIABILITIES | 1,225,197 | 1,628,912 | (403,715) | (24.8%) | Consolidated Statement of Changes in Equity Total equity attributable to shareholders decreased significantly from $1,245.3 million in 2021 to $791.1 million in 2022, primarily due to a $(392.6) million loss for the year and $(97.0) million in other comprehensive loss Consolidated Statement of Changes in Equity (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Balance at January 1 | 1,245,299 | 326,086 | 919,213 | 281.9% | | Loss for the year | (392,567) | (212,393) | (180,174) | 84.8% | | Other comprehensive loss for the year | (96,997) | (71,961) | (25,036) | 34.8% | | Total comprehensive loss for the year | (489,564) | (284,354) | (205,210) | 72.2% | | Share-based payments | 35,466 | 23,632 | 11,834 | 50.1% | | Balance at December 31 | 791,143 | 1,245,299 | (454,156) | (36.5%) | Consolidated Statement of Cash Flows In 2022, net cash used in operating activities increased to $(268.9) million, while investing activities generated $34.8 million and financing activities generated $35.9 million, leading to a $198.2 million decrease in cash and cash equivalents Consolidated Statement of Cash Flows Highlights (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Net cash flows used in operating activities | (268,946) | (213,832) | (55,114) | 25.8% | | Net cash flows from/(used in) investing activities | 34,794 | (544,328) | 579,122 | (106.4%) | | Net cash flows from financing activities | 35,919 | 955,797 | (919,878) | (96.2%) | | Net (decrease)/increase in cash and cash equivalents | (198,233) | 197,637 | (395,870) | (200.3%) | | Cash and cash equivalents at December 31 | 82,644 | 295,572 | (212,928) | (72.0%) | Notes to the Consolidated Financial Statements General Information and Accounting Policies Oatly Group AB (publ) is a Swedish public limited company listed on Nasdaq, with consolidated financial statements prepared in USD under IFRS, while the Parent Company uses SEK and Swedish accounting standards, with key policies covering consolidation, segment reporting, foreign currency, and revenue recognition Corporate Information (Note 1) Oatly Group AB (publ) is a public limited company incorporated in Sweden and listed on the Nasdaq Global Select Market in the U.S., manufacturing and selling oat-based products - Oatly Group AB (publ) is a public limited company incorporated and domiciled in Malmö, Sweden, listed on the Nasdaq Global Select Market in the U.S. under the ticker 'OTLY'[61] - The Group manufactures, distributes, and sells oat-based products[61] Summary of Significant Accounting Policies (Note 2) Consolidated financial statements are presented in USD under IFRS, while the Parent Company uses SEK; key policies include segment reporting (EMEA, Americas, Asia) and point-in-time revenue recognition adjusted for variable consideration - The consolidated financial statements are presented in U.S. dollars (USD) and prepared in accordance with the Swedish Annual Accounts Act, RFR 1, and IFRS as endorsed by the European Union[63][65] - The functional currency of the Parent Company is SEK[64] - The CEO is the chief operating decision maker and monitors the Group's performance from a geographic perspective through reportable segments: EMEA, Asia, and the Americas[74] - Revenue from the sale of goods is recognized at the point in time when control of goods has transferred to the customer, adjusted for estimates of variable consideration such as trade promotions, discounts, and returns[82][84] - New and amended standards (IAS 37, IAS 16, IFRS 9) effective January 1, 2022, had no material impact on the Group's financial statements[67][68][69][70] Financial Risk Management and Capital Oatly manages market (currency, interest, commodity), credit, liquidity, and refinancing risks through Board-approved policies, with significant exposures to currency fluctuations, variable interest rates, and commodity price volatility, while maintaining sufficient liquidity Financial Risk Management (Note 3) The Group manages market (interest and currency), credit, liquidity, and refinancing risks through a central treasury department, with primary currency exposure to USD/SEK, EUR/SEK, GBP/SEK, and CNY/SEK exchange rates - The Group is exposed to market risk (interest and currency), credit risk, liquidity risk, and refinancing risk, managed by a central treasury department under Board-approved policies[171][172] - Primary currency risk exposure is to USD/SEK, EUR/SEK, GBP/SEK, and CNY/SEK exchange rates, with Group Treasury having the possibility to use foreign exchange instruments to manage risk[174][175] Currency Risk Sensitivity (Impact on Loss Before Tax, 2022) | For the year ending December 31 | Impact on loss before tax (USD Thousand) | | :------------------------------------ | :------------------------ | | USD/SEK exchange rate—increase/decrease 10 % | +/- 94 | | EUR/SEK exchange rate—increase/decrease 10 % | +/- 1,471 | | GBP/SEK exchange rate—increase/decrease 10 % | +/- 17 | | CNY/SEK exchange rate—increase/decrease 10 % | +/- 3,003 | - The main interest rate risk arises from long-term liabilities to credit institutions with variable rates, with a 100 basis point change impacting loss before tax by +/- $526 thousand in 2022[180][182] - Commodity price risk, particularly for oats and rapeseed oil, is significant; a 5% increase in commodity costs would have increased 2022 costs by $11.2 million[187][189] - Credit risk is managed through credit risk assessment and limits; one customer in the foodservice channel represented approximately 14% of total revenue in 2022[191] Trade Receivables Aging (2022) | Category | 2022 (USD Thousand) | | :------------------------ | :------- | | Current | 83,020 | | 1-30 days past due | 9,739 | | 31-60 days past due | 4,630 | | 61-90 days past due | 1,431 | | 91- days past due | 5,865 | | Gross carrying amount | 104,685 | | Allowance for expected credit losses | (3,730) | | Net carrying amount | 100,955 | - As of December 31, 2022, the Group held cash and cash equivalents of $82.6 million (2021: $295.6 million) and had access to undrawn bank overdraft facilities of $318.4 million (2021: $397.8 million)[197][206] - The average maturity of liabilities to credit institutions and available facilities decreased to 16 months in 2022 (from 27 months in 2021), indicating increased refinancing risk[208] Contractual Maturities of Financial Liabilities (December 31, 2022) | Category (USD Thousand) | Less than 3 months | 3 months and 1 year | 1 and 2 years | 2 and 5 years | After 5 years | Total contractual cash flows | Carrying amount | | :-------------------------- | :----------------- | :------------------ | :------------ | :------------ | :------------ | :--------------------------- | :-------------- | | Trade payables | 82,516 | — | — | — | — | 82,516 | 82,516 | | Liabilities to credit institutions | 49,327 | 1,127 | 1,443 | 1,376 | — | 53,273 | 52,590 | | Lease liabilities | 4,671 | 14,015 | 13,328 | 35,201 | 113,277 | 180,492 | 99,108 | | Total non-derivatives | 136,514 | 15,142 | 14,771 | 36,577 | 113,277 | 316,281 | 234,214 | Significant Accounting Judgments, Estimates and Assessments (Note 4) Management makes significant judgments in revenue recognition, lease term estimates, incremental borrowing rates, embedded lease assessments, and annual impairment tests for non-financial assets, including goodwill, using key assumptions like EBITDA margin and discount rates - Management makes judgments in revenue recognition regarding variable consideration (discounts, promotions) and classification of trade promotion activities[216][217] - Significant estimates are made in determining lease terms, especially for production plants where extension options are included due to planned large investments (10-40 year terms)[220][221] - The Group estimates the incremental borrowing rate (IBR) for leases using observable inputs and entity-specific estimates when the implicit interest rate is not readily determinable[223] - Judgments are involved in assessing if supplier contracts contain embedded leases, with three contracts identified as containing embedded leases as of December 31, 2022[224] - Impairment tests for non-financial assets, including goodwill, are performed annually or when indicators exist (e.g., market capitalization below book value, macroeconomic uncertainty), using key assumptions like long-term EBITDA margin, discount rate, and long-term growth rate[227][228][229] - Assets related to the Ogden and Dallas-Fort Worth facilities were classified as held for sale as of December 31, 2022, due to a signed asset purchase agreement, immediate availability for sale, and management's commitment to the plan[231] Segment Performance and Revenue Oatly operates in EMEA, Americas, and Asia, with EMEA generating the highest external revenue in 2022, all segments reporting negative Adjusted EBITDA, and retail being the largest channel globally, with oatmilk accounting for approximately 89% of total revenue Segment Information (Note 5) Oatly's three operating segments are EMEA, Americas, and Asia, with EMEA generating the highest external revenue in 2022, all segments reporting negative Adjusted EBITDA, and oatmilk comprising approximately 89% of total revenue - The Group's three operating segments are EMEA, the Americas, and Asia, based on geographic perspective[232] Revenue from External Customers by Segment (2022 vs 2021) | Segment (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :--------------- | :------- | :------- | :------------ | :--------- | | EMEA | 345,509 | 336,452 | 9,057 | 2.7% | | Americas | 223,880 | 179,830 | 44,050 | 24.5% | | Asia | 152,849 | 126,908 | 25,941 | 20.4% | | Total | 722,238 | 643,190 | 79,048 | 12.3% | Adjusted EBITDA by Segment (2022 vs 2021) | Segment (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :--------------- | :--------- | :--------- | :------------ | :--------- | | EMEA | (10,298) | 21,959 | (32,257) | (146.9%) | | Americas | (62,837) | (44,560) | (18,277) | 41.0% | | Asia | (75,183) | (16,480) | (58,703) | 356.2% | | Corporate | (119,605) | (107,896) | (11,709) | 10.8% | | Total | (267,923) | (146,977) | (120,946) | 82.3% | Non-current Assets by Country (2022 vs 2021) | Country (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :--------------- | :------- | :------- | :------------ | :--------- | | UK | 186,759 | 119,973 | 66,786 | 55.7% | | US | 130,295 | 262,538 | (132,243) | (50.4%) | | China | 122,495 | 101,082 | 21,413 | 21.2% | | Sweden | 108,073 | 122,488 | (14,415) | (11.8%) | | Singapore | 29,944 | 36,182 | (6,238) | (17.2%) | | Other | 23,984 | 25,833 | (1,849) | (7.2%) | | Total | 601,550 | 668,096 | (66,546) | (10.0%) | Revenue from External Customers by Location (2022 vs 2021) | Location (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :---------------- | :------- | :------- | :------------ | :--------- | | US | 220,981 | 177,180 | 43,801 | 24.7% | | China | 134,001 | 111,830 | 22,171 | 19.8% | | UK | 124,948 | 120,278 | 4,670 | 3.9% | | Germany | 79,764 | 70,699 | 9,065 | 12.8% | | Sweden | 48,749 | 57,937 | (9,188) | (15.9%) | | The Netherlands | 25,582 | 24,047 | 1,535 | 6.4% | | Finland | 23,353 | 27,420 | (4,067) | (14.8%) | | Other | 64,860 | 53,799 | 11,061 | 20.6% | | Total | 722,238 | 643,190 | 79,048 | 12.3% | Revenue from External Customers by Channel and Segment (2022) | Channel (USD Thousand) | EMEA | Americas | Asia | Total | | :--------------- | :------- | :------- | :------- | :------- | | Retail | 285,797 | 118,870 | 17,454 | 422,121 | | Foodservice | 58,867 | 101,166 | 100,031 | 260,064 | | Other | 845 | 3,844 | 35,364 | 40,053 | | Total | 345,509 | 223,880 | 152,849 | 722,238 | - Oatmilk accounted for approximately 89% of total revenue in 2022 (91% in 2021)[245] Operating Expenses and Income In 2022, audit fees and employee benefits increased, while depreciation, amortization, and impairment expenses rose significantly, largely due to asset impairment and negative exchange rates, leading to a substantial income tax benefit despite unrecognized deferred tax assets Remuneration to Auditors (Note 6) Total auditor fees for EY and other auditors significantly increased in 2022, with EY audit services rising by 69.2% to $6.92 million Auditor Fees (2022 vs 2021) | Service (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :-------------------- | :------- | :------- | :------------ | :--------- | | EY Audit services | 6,920 | 4,090 | 2,830 | 69.2% | | EY Audit related | 75 | 55 | 20 | 36.4% | | EY Other services | 9 | 0 | 9 | N/A | | Total EY | 7,004 | 4,145 | 2,859 | 69.0% | | Other auditors (Total) | 255 | 65 | 190 | 292.3% | Depreciation, Amortization and Impairment by Function (Note 7) Total depreciation, amortization, and impairment expenses increased by 50.9% to $(48.6) million in 2022, with the majority allocated to cost of goods sold, which rose by 79.0% Total Depreciation/Amortization/Impairment by Function (2022 vs 2021) | Function (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Cost of goods sold | (39,799) | (22,231) | (17,568) | 79.0% | | Research and development expenses | (765) | (429) | (336) | 78.3% | | Selling, general and administrative expenses | (8,036) | (9,532) | 1,496 | (15.7%) | | Total | (48,600) | (32,192) | (16,408) | 50.9% | Employee and Personnel Costs (Note 8) Total employee benefits increased by 36.8% to $(220.4) million in 2022, driven by higher salaries and share-based payments, alongside a 46.9% increase in the average number of employees, particularly in China Total Employee Benefits (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Salaries and other remuneration | (151,444) | (109,847) | (41,597) | 37.9% | | Social security costs | (24,241) | (19,158) | (5,083) | 26.5% | | Share-based payments | (35,466) | (23,632) | (11,834) | 50.1% | | Pension costs—defined contribution plans | (9,208) | (8,390) | (818) | 9.7% | | Total employee benefits | (220,359) | (161,027) | (59,332) | 36.8% | Average Number of Employees by Geographical Breakdown (2022 vs 2021) | Location | 2022 | 2021 | Change | Growth (%) | | :--------- | :--- | :--- | :----- | :--------- | | Sweden | 708 | 583 | 125 | 21.4% | | Germany | 60 | 50 | 10 | 20.0% | | Netherlands | 61 | 44 | 17 | 38.6% | | UK | 48 | 37 | 11 | 29.7% | | US | 414 | 297 | 117 | 39.4% | | China | 512 | 215 | 297 | 138.1% | | Singapore | 48 | 28 | 20 | 71.4% | | Total | 1,880 | 1,280 | 600 | 46.9% | Share-based Payments (Note 9) In 2022, the company granted over 8 million Restricted Stock Units and 9 million stock options, resulting in a total share-based payments expense of $35.5 million, with fair value determined using the Black-Scholes model - During 2022, the company granted 8,024,889 Restricted Stock Units (RSUs) and 9,651,313 stock options under the 2021 Incentive Award Plan[260][262] - Total share-based payments expense was $35.5 million for the twelve months ended December 31, 2022, an increase from $23.6 million in 2021[266] - The fair value of stock options is determined using the Black-Scholes option-pricing model, considering factors like exercise price, expected term, share price, volatility, dividend yield, and risk-free interest rate[264] Black-Scholes Model Inputs for Employee Stock Options (May 2022 Grant) | Metric | May 2022 | | :------------------------------------ | :------- | | Exercise price ($) | 3.56 | | Expected term (years) | 6-8 | | Share price at grant date | 3.56 | | Expected price volatility of the Company's shares (%) | 35.00 | | Risk-free interest rate (%) | 2.82-2.81 | Other Operating (Expenses) and Income, Net (Note 10) Other operating expenses shifted to a significant net loss of $(41.0) million in 2022, primarily due to a $38.3 million impairment charge related to assets held for sale and negative exchange rate differences Other Operating (Expenses) and Income, Net (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Impairment charge related to assets held for sale | (38,292) | — | (38,292) | N/A | | Other costs related to assets held for sale | (1,289) | — | (1,289) | N/A | | Exchange rate differences | (3,776) | 662 | (4,438) | (670.4%) | | Other operating (expenses) and income, net | (40,951) | 1,944 | (42,895) | (2206.5%) | - The significant shift to a net expense in 2022 was primarily due to a $38.3 million impairment charge related to assets held for sale and negative exchange rate differences[268] Finance Income and Expenses (Note 11) Total finance expenses increased in 2022, primarily due to higher interest expenses on lease liabilities and fair value changes in derivatives and short-term investments, while finance income saw a slight increase from foreign exchange differences Finance Income and Expenses (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Total finance income | 15,256 | 14,435 | 821 | 5.7% | | Interest expenses—loan from credit institutions | (5,784) | (8,623) | 2,839 | (32.9%) | | Interest expenses—lease liabilities | (8,144) | (5,026) | (3,118) | 62.0% | | Interest expenses—shareholder loans | — | (5,256) | 5,256 | (100.0%) | | Fair value changes derivatives | (287) | (16) | (271) | 1693.8% | | Fair value changes short-term investments | (1,821) | (222) | (1,599) | 720.3% | | Total finance expenses | (16,665) | (15,740) | (925) | 5.9% | | Finance net | (1,409) | (1,305) | (104) | 8.0% | - Total finance income increased slightly due to net foreign exchange differences, while total finance expenses increased primarily due to higher interest expenses on lease liabilities and fair value changes in derivatives and short-term investments[268] - No borrowing costs were capitalized in 2022, compared to $3.9 million in 2021 for construction in progress[269] Net Exchange-rate Differences (Note 12) Net exchange-rate differences decreased by 29.9% to $9.3 million in 2022, primarily due to a significant negative shift in other operating expenses, partially offset by increased finance income Net Exchange-rate Differences (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Other operating (expenses) and income, net | (3,776) | 662 | (4,438) | (670.4%) | | Finance income and expenses | 13,112 | 12,661 | 451 | 3.6% | | Exchange-rate differences—net | 9,336 | 13,323 | (3,987) | (29.9%) | Income Tax (Note 13) Oatly reported an income tax benefit of $4.8 million in 2022, primarily from deferred tax relating to temporary differences, despite having substantial unrecognized deferred tax assets from $570.6 million in accumulated loss carry-forwards Income Tax Benefit/(Expense) (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Current tax | (1,526) | 1,767 | (3,293) | (186.4%) | | Deferred tax | 6,353 | 888 | 5,465 | 615.4% | | Income tax benefit/(expense) | 4,827 | 2,655 | 2,172 | 81.8% | - The income tax benefit in 2022 was primarily driven by deferred tax relating to the origination and reversal of temporary differences[271] Unrecognized Deferred Tax Assets (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Tax losses carried forward | 112,970 | 71,124 | 41,846 | 58.8% | | Total unrecognized deferred tax assets | 115,031 | 74,217 | 40,814 | 55.0% | - As of December 31, 2022, the Group's accumulated loss carry-forwards amounted to $570.6 million, with $548.4 million in Sweden available indefinitely but unrecognized due to uncertainty of utilization[277] Assets and Liabilities Details In 2022, intangible assets decreased due to exchange differences, while property, plant, and equipment were impacted by assets held for sale and impairment; cash and short-term investments declined sharply, and liabilities to credit institutions increased, with provisions for restructuring recognized Investments in Subsidiaries (Note 14) The Group wholly owns numerous principal subsidiaries globally, including key entities in Sweden, the UK, Germany, Netherlands, Singapore, the US, and China - The Group wholly owns numerous principal subsidiaries globally, including Oatly AB (Sweden), Oatly UK Ltd, Oatly Germany GmbH, Oatly Netherlands BV, Oatly Singapore Operations & Supply Pte Ltd, Oatly Inc. (US), and Oatly Shanghai Co. Ltd (China)[283][284] Intangible Assets (Note 15) Total intangible assets decreased by 12.5% to $127.7 million in 2022, primarily due to a decline in goodwill, which is entirely attributable to EMEA and tested annually using value-in-use calculations Total Intangible Assets (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Goodwill | 112,904 | 130,364 | (17,460) | (13.4%) | | Other intangible assets (net) | 14,670 | 12,486 | 2,184 | 17.5% | | Total | 127,688 | 145,925 | (18,237) | (12.5%) | - Goodwill is entirely related to the acquisition of Cereal Base CEBA AB in 2016 and is monitored at the operating segment level, entirely attributable to EMEA[285][286] - The annual goodwill impairment test for 2022 used value-in-use calculations with a pre-tax discount rate of 10.6% and a long-term growth rate of 2.0%[287][288] - Sensitivity analysis indicates the recoverable amount would equal the carrying amount if the pre-tax discount rate increased by 3.6% or the long-term EBITDA margin decreased by 5.9%[291] Property, Plant and Equipment (Note 16) Net property, plant, and equipment decreased by 3.3% to $493.0 million in 2022, significantly impacted by $148.6 million in assets reclassified as held for sale and a $26.6 million impairment charge related to the YYF Transaction Net Property, Plant and Equipment (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Total | 492,952 | 509,648 | (16,696) | (3.3%) | - Additions to construction in progress during 2022 amounted to $122.9 million, mainly related to investments in new and existing production facilities[292][294] - The decrease in total property, plant and equipment was significantly impacted by $148.6 million in assets reclassified as held for sale and a $26.6 million impairment charge related to the YYF Transaction[292][293] - Impairment tests for the Americas and Asia cash-generating units (CGUs) showed that the recoverable amount exceeded the carrying amount of non-financial assets[298] - For the Americas, there are no reasonably possible changes in key assumptions that would have resulted in an impairment[300] Leases (Note 17) Right-of-use assets and lease liabilities decreased significantly in 2022, primarily due to the transfer of Ogden and Dallas-Fort Worth facility lease agreements to Ya YA Foods as part of the YYF Transaction, with new lease agreements commenced for other facilities Right-of-Use Assets (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Total | 108,598 | 158,448 | (49,850) | (31.5%) | Lease Liabilities (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Total | 99,108 | 143,219 | (44,111) | (30.8%) | - The decrease in right-of-use assets and lease liabilities is largely due to the transfer of Ogden and Dallas-Fort Worth facility lease agreements to Ya YA Foods as part of the YYF Transaction, included in assets held for sale[306][308] - An impairment charge of $12.0 million related to the YYF Transaction was included in depreciation of right-of-use assets[309] - New lease agreements commenced in 2022 for an additional building at the Ogden production facility (40-year term) and a production line in Ma'anshan (6-year term)[303][304] - Total cash outflow for leases in 2022 was $20.7 million[311] Other Non-current Receivables (Note 18) Total other non-current receivables increased by 41.8% to $7.8 million in 2022, primarily driven by a significant rise in other receivables, partially offset by decreases in deposits and long-term prepaid expenses Other Non-current Receivables (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :-------------------- | :------- | :------- | :------------ | :--------- | | Deposits | 841 | 941 | (100) | (10.6%) | | Long term prepaid expenses | 3,070 | 3,411 | (341) | (10.0%) | | Other receivables | 3,937 | 1,182 | 2,755 | 233.1% | | Total | 7,848 | 5,534 | 2,314 | 41.8% | Financial Instruments per Category (Note 19) In 2022, total financial assets at amortized cost decreased by 52.2% to $197.5 million due to the absence of short-term investments, while financial liabilities increased by 22.1% to $226.0 million, driven by higher liabilities to credit institutions and new derivatives Financial Assets (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Short-term investments | — | 249,937 | (249,937) | (100.0%) | | Cash and cash equivalents | 82,644 | 295,572 | (212,928) | (72.0%) | | Total financial assets (amortized cost) | 197,510 | 413,607 | (216,097) | (52.2%) | Financial Liabilities (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Liabilities to credit institutions | 52,590 | 5,987 | 46,603 | 778.4% | | Derivatives | 316 | — | 316 | N/A | | Total financial liabilities (amortized cost) | 225,975 | 185,017 | 40,958 | 22.1% | - As of December 31, 2022, the Group had no short-term investments, compared to $249.9 million in 2021[315] - The change in fair value recorded in profit and loss for short-term investments was a loss of $1.8 million in 2022 (2021: loss of $0.2 million)[316] - Derivatives are classified as Level 2 in the fair value hierarchy, with a fair value of $0.3 million in 2022[321] Inventories (Note 20) Total inventories increased by 19.7% to $114.5 million in 2022, with raw materials and finished goods both rising, while write-downs of inventories to net realizable value significantly increased to $28.8 million Inventories (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Raw materials and consumables | 20,638 | 17,296 | 3,342 | 19.3% | | Finished goods | 93,837 | 78,365 | 15,472 | 19.7% | | Total | 114,475 | 95,661 | 18,814 | 19.7% | - Inventories recognized as an expense in cost of goods sold amounted to $608.8 million in 2022 ($459.7 million in 2021)[323] - Write-downs of inventories to net realizable value significantly increased to $28.8 million in 2022 from $5.1 million in 2021[324] Trade Receivables (Note 21) Net trade receivables decreased by 4.3% to $101.0 million in 2022, primarily due to a significant increase in the allowance for expected credit losses, with major currency exposures in EUR, USD, GBP, and CNY Net Trade Receivables (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Trade receivables (gross) | 104,685 | 106,402 | (1,717) | (1.6%) | | Less: allowance for expected credit losses | (3,730) | (883) | (2,847) | 322.4% | | Trade receivables—net | 100,955 | 105,519 | (4,564) | (4.3%) | - The largest currency exposures for trade receivables in 2022 were EUR ($26.7 million), USD ($23.2 million), GBP ($22.0 million), and CNY ($17.4 million)[325] Other Current Receivables (Note 22) Total other current receivables decreased by 44.7% to $17.8 million in 2022, driven by significant reductions in value-added tax and other receivables Other Current Receivables (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :-------------------- | :------- | :------- | :------------ | :--------- | | Value added tax | 11,109 | 20,801 | (9,692) | (46.6%) | | Advance payments to vendors | 3,078 | 3,915 | (837) | (21.4%) | | Other | 3,631 | 7,513 | (3,882) | (51.7%) | | Total | 17,818 | 32,229 | (14,411) | (44.7%) | Prepaid Expenses (Note 23) Total prepaid expenses decreased by 15.5% to $23.4 million in 2022, primarily due to a significant reduction in prepaid selling and marketing expenses, partially offset by increases in prepaid production and other expenses Prepaid Expenses (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :-------------------- | :------- | :------- | :------------ | :--------- | | Prepaid production and warehouse expenses | 407 | 309 | 98 | 31.7% | | Prepaid selling and marketing expenses | 229 | 5,215 | (4,986) | (95.6%) | | Prepaid insurance expenses | 9,090 | 8,894 | 196 | 2.2% | | Prepaid financing expenses | 3,399 | 3,537 | (138) | (3.9%) | | Other | 10,288 | 9,756 | 532 | 5.5% | | Total | 23,413 | 27,711 | (4,298) | (15.5%) | Cash and Cash Equivalents (Note 24) Total cash and cash equivalents decreased by 72.0% to $82.6 million in 2022, primarily due to a significant reduction in short-term deposits and cash at bank Cash and Cash Equivalents (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Short-term deposits | 13,894 | 180,458 | (166,564) | (92.3%) | | Cash at bank and on hand | 68,750 | 115,114 | (46,364) | (40.3%) | | Total | 82,644 | 295,572 | (212,928) | (72.0%) | - Short-term deposits, with maturities of 1 to 3 months, can be withdrawn at any time before maturity[330] Share Capital and Other Contributed Capital (Note 25) As of December 31, 2022, 592.3 million ordinary shares were outstanding, with an increased accumulated deficit of $(665.5) million and a foreign currency translation reserve of $(171.5) million - As of December 31, 2022, 592,320 thousand ordinary shares were outstanding (2021: 591,777 thousand), with a par value of $0.00018 per share[333] - The company exercised 650 thousand warrants in May 2022, leading to the allotment and issuance of ordinary shares, some converted to American Depositary Shares (ADSs) and some held as treasury shares (107 thousand as of December 31, 2022)[331][332][333] - Accumulated deficit increased to $(665.5) million in 2022 from $(308.4) million in 2021, and the foreign currency translation reserve was $(171.5) million in 2022 (2021: $(74.5) million)[336][337] Liabilities to Credit Institutions (Note 26) Total liabilities to credit institutions significantly increased by 778.4% to $52.6 million in 2022, primarily due to the utilization of the SRCF Agreement and an amended EIF Facility, with shares in subsidiaries pledged as collateral Total Liabilities to Credit Institutions (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Total | 52,590 | 5,987 | 46,603 | 778.4% | - As of December 31, 2022, the Group had utilized SEK 500 million (equivalent to $47.9 million) under the SRCF Agreement[342] - The European Investment Fund Facility (EIF Facility) was amended in October 2022 to extend its term to October 2025, with €3.8 million (equivalent to $4.0 million) outstanding[339][342] - No outstanding borrowings were present under the China Merchants Bank (CMB) Credit Facility as of December 31, 2022[343] - The Company has pledged shares in its subsidiaries Oatly AB and Cereal Base CEBA AB as collateral for liabilities to credit institutions[345] Provisions (Note 27) Total provisions remained stable at $11.0 million in 2022, including a $4.415 million restructuring provision recorded in the fourth quarter and a provision for decommissioning costs related to leased production facilities Total Provisions (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :-------------------- | :------- | :------- | :------------ | :--------- | | Total | 10,994 | 11,033 | (39) | (0.4%) | - A restructuring provision of $4.415 million was recorded in the fourth quarter of 2022, related to organizational restructuring expected to be completed in 2023[347][348] - A provision for decommissioning costs related to restoration costs for leased production facilities has been recognized[349] Shareholder Loans (Note 28) Shareholder loans received during 2020 were completely settled in connection with the Company's IPO in May 2021, with $10.9 million repaid in cash and the remainder converted into ordinary shares - Shareholder loans received during 2020 were completely settled in connection with the Company's IPO in May 2021, with $10.9 million repaid in cash and the remainder converted into ordinary shares[350][359] Other Current Liabilities (Note 29) Total other current liabilities increased by 23.0% to $11.8 million in 2022, driven by the recognition of derivatives and a significant rise in other liabilities Other Current Liabilities (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :-------------------- | :------- | :------- | :------------ | :--------- | | Derivatives | 316 | — | 316 | N/A | | Employee withholding taxes | 1,830 | 1,694 | 136 | 8.0% | | Value added tax | 7,617 | 7,267 | 350 | 4.8% | | Other | 2,060 | 653 | 1,407 | 215.5% | | Total | 11,823 | 9,614 | 2,209 | 23.0% | Accrued Expenses (Note 30) Total accrued expenses increased by 4.7% to $123.0 million in 2022, primarily due to higher accrued logistics costs and variable consideration, partially offset by decreases in accrued production and marketing expenses Accrued Expenses (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :-------------------- | :------- | :------- | :------------ | :--------- | | Accrued production expenses | 28,286 | 30,904 | (2,618) | (8.5%) | | Accrued personnel expenses | 32,169 | 31,487 | 682 | 2.2% | | Accrued logistics costs | 19,699 | 13,190 | 6,509 | 49.3% | | Accrued variable consideration | 15,575 | 12,314 | 3,261 | 26.5% | | Accrued marketing and sales expenses | 6,279 | 7,678 | (1,399) | (18.2%) | | Other accrued expenses | 21,029 | 21,900 | (871) | (4.0%) | | Total | 123,037 | 117,473 | 5,564 | 4.7% | Other Disclosures Oatly's other disclosures cover related party transactions, changes in financing liabilities, loss per share, commitments, contingencies, assets held for sale, and significant post-period events including the sale of manufacturing facilities and new financing arrangements Related Party Disclosures (Note 31) Related party disclosures highlight China Resources Verlinvest Health Investment Limited as a significant shareholder, detail compensation to the Board, and transactions with a board member's distribution company, with shareholder loans fully settled in 2021 - China Resources Verlinvest Health Investment Limited owns 45.9% of Oatly Group AB (publ)'s ordinary shares[353] - Compensation to the Board of Directors amounted to $1.0 million in 2022 (2021: $0.9 million)[355] - Oatly expensed $0.9 million in 2022 (2021: $0.3 million) under a Distribution Agreement with Chef Sam, a company in which a board member holds a 33% ownership[357] - Shareholder loans from related parties were completely settled in connection with the Company's IPO in May 2021[359] Changes in Liabilities Attributable to Financing Activities (Note 32) Total liabilities attributable to financing activities remained stable at $151.7 million in 2022, but cash flows from financing significantly decreased due to the absence of large share issuance proceeds seen in 2021 Changes in Liabilities Attributable to Financing Activities (2022 vs 2021) | Metric (USD Thousand) | 2022 | 2021 | Change (USD Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Liabilities to credit institutions (balance at Dec 31) | 52,590 | 5,987 | 46,603 | 778.4% | | Leases (balance at Dec 31) | 99,108 | 143,219 | (44,111) | (30.8%) | | Total (balance at Dec 31) | 151,698 | 149,206 | 2,492 | 1.7% | | Cash flows | 35,919 | 955,797 | (919,878) | (96.2%) | - Cash flows from financing activities significantly decreased in 2022 due to the absence of large share issuance proceeds seen in 2021[360] Loss per Share (Note 33) Basic and diluted loss per share increased to $(0.66) in 2022 from $(0.39) in 2021, with potential dilutive securities being anti-dilutive and thus excluded from calculations Basic and Diluted Loss per Share (2022 vs 2021) | Metric | 2022 | 2021 | Change ($) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Loss per share, U.S. $ | (0.66) | (0.39) | (0.27) | 69.2% | - Potential dilutive securities, including 8,147,594 restricted stock units and 14,339,052 stock options in 2022, were anti-dilutive and thus not included in the diluted loss per share calculations[362] Commitments and Contingencies (Note 34) Oatly has minimum purchase commitments resulting in $8.7 million in shortfall expenses in 2022, significant commitments for production equipment in the UK and US, and is involved in securities class action complaints which it intends to vigorously defend - Minimum purchase commitments for production and packaging services resulted in $8.7 million in shortfall expenses in 2022, recognized in cost of goods sold[364] - The Group is committed to $32.8 million for production equipment in Peterborough, U.K., and $22.7 million in Dallas-Fort Worth, U.S. ($19.3 million of the DFW commitment will be transferred to YYF)[366] - The company is involved in securities class action complaints in the U.S. District Court for the Southern District of New York and New York County Supreme Court, which it disputes and intends to vigorously defend[367] Non-current Assets Held for Sale (Note 35) As of December 31, 2022, assets related to the Ogden and Dallas-Fort Worth manufacturing facilities, totaling $142.7 million, were classified as held for sale, with a $38.3 million impairment recognized, and the transaction completed post-period - As of December 31, 2022, assets related to the Ogden, Utah, and Dallas-Fort Worth, Texas, manufacturing facilities were classified as held for sale, totaling $142.7 million[368][369] - An impairment of $38.3 million was recognized to reduce the carrying amount of these assets to their fair value less costs of disposal[368] - Liabilities directly associated with these assets held for sale amounted to $48.5 million[369] - The transaction for the sale of these facilities closed on March 1, 2023[369][371] Events After the End of the Reporting Period (Note 36) Significant post-period events include the March 2023 sale of Ogden and DFW facilities for $102.6 million, authorization and issuance of $300 million in Convertible Senior PIK Notes, and April 2023 amendments to the SRCF Agreement and a new $130 million Term Loan B Credit Agreement - On March 1, 2023, the sale of Ogden and Dallas-Fort Worth manufacturing facilities to Ya YA Foods USA LLC (YYF) was completed for approximately $102.6 million, establishing a strategic manufacturing alliance[371][372] - An extraordinary general meeting on March 6, 2023, authorized the board to issue new shares, warrants, and/or convertible bonds up to $300 million[373] - In March and April 2023, $300 million aggregate principal amount of 9.25% Convertible Senior PIK Notes due 2028 were issued[375] - On April 18, 2023, the SRCF Agreement was amended and restated, reducing commitments to SEK 2,100 million ($201.0 million) and resetting financial covenants[377] - A $130 million Term Loan B Credit Agreement was entered into on April 18, 2023, with a five-year term[378] - An Intercreditor Agreement was established on April 18, 2023, to govern the ranking and security among the SRCF, EIF Facility, Term Loan B, and Convertible Notes[379] Parent Company Financial Statements Parent Company Income Statement The Parent Company's net revenues decreased to SEK 341.5 million in 2022, but profit before tax significantly increased to SEK 2,079.7 million, primarily due to higher other interest income from exchange rate differences, resulting in a loss for the year of SEK 219.7 million after appropriations Parent Company Income Statement (2022 vs 2021) | Metric (SEK Thousand) | 2022 | 2021 | Change (SEK Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Revenue | 341,529 | 395,040 | (53,511) | (13.5%) | | Operating loss | (147,702) | (8,913) | (138,789) | 1557.1% | | Other interest income and similar items | 2,330,607 | 1,328,970 | 1,001,637 | 75.4% | | Interest expenses and similar income items | (103,216) | (150,469) | 47,253 | (31.4%) | | Profit before tax and year-end appropriations | 2,079,689 | 1,169,588 | 910,101 | 77.8% | | Year-end appropriations | (1,860,023) | (238,156) | (1,621,867) | 681.0% | | Loss for the year | 219,666 | 931,432 | (711,766) | (76.4%) | Parent Company Statement of Financial Position As of December 31, 2022, the Parent Company's total assets increased to SEK 17,381.5 million, driven by higher shares in group companies, while total equity rose to SEK 15,424.9 million and total liabilities significantly increased to SEK 1,956.6 million due to new non-current liabilities Parent Company Statement of Financial Position Highlights (2022 vs 2021) | Metric (SEK Thousand) | 2022 | 2021 | Change (SEK Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Shares in group companies | 8,936,466 | 4,956,771 | 3,979,695 | 80.3% | | Receivables from group companies (non-current) | 8,277,759 | 9,847,706 | (1,569,947) | (15.9%) | | Total fixed assets | 17,214,225 | 14,805,099 | 2,409,126 | 16.3% | | Cash and cash equivalents | 46,490 | 13,716 | 32,774 | 238.9% | | Total current assets | 167,255 | 130,283 | 36,972 | 28.4% | | TOTAL ASSETS | 17,381,481 | 14,935,383 | 2,446,098 | 16.4% | | Total equity | 15,424,899 | 14,836,541 | 588,358 | 4.0% | | Liabilities to group companies (non-current) | 1,698,611 | — | 1,698,611 | N/A | | Total non-current liabilities | 1,698,611 | 0 | 1,698,611 | N/A | | Total current liabilities | 257,971 | 98,842 | 159,129 | 161.0% | | TOTAL EQUITY AND LIABILITIES | 17,381,481 | 14,935,383 | 2,446,098 | 16.4% | Parent Company Statement of Changes in Equity The Parent Company's total equity increased to SEK 15,424.9 million in 2022, primarily due to share-based payments and the transfer of last year's profit, partially offset by warrant redemptions Parent Company Statement of Changes in Equity (2022 vs 2021) | Metric (SEK Thousand) | 2022 | 2021 | Change (SEK Thousand) | Change (%) | | :------------------------------------ | :--------- | :--------- | :------------ | :--------- | | Opening equity, January 1 | 14,836,541 | 3,889,336 | 10,947,205 | 281.5% | | Share-based payments | 369,315 | 197,523 | 171,792 | 87.0% | | Transfer of last year's profit or loss | — | — | — | N/A | | Net loss for the year | 219,666 | 931,432 | (711,766) | (76.4%) | | Closing equity, December 31 | 15,424,899 | 14,836,541 | 588,358 | 4.0% | Parent Company Statement of Cash Flows The Parent Company's cash flow from operating activities improved to SEK 158.0 million in 2022, while investing a