FREYR Battery, Inc.

Hello everyone and thank you for joining the Frere Battery third quarter 2022 earnings conference call. My name is Daisy and I'll be coordinating your call today. If you would like to register a question ready for the Q&A session, please press star followed by one on your telephone keypad. I would now like to hand the call over to your host, Jeff Spatel, Vice President of Investor Relations to begin. So Jeff, please go ahead.

Good morning, good afternoon and good evening. Welcome to FerroBattery's third quarter 2022 earnings conference call. With me today on the call are Tom Leiner Jensen, our Chief Executive Officer, Jan Arve Haugen, our Chief Operating Officer, and Oscar Brown, our Chief Financial Officer. During today's call, management may make forward-looking statements about our business. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations. Most of these factors are outside Frayer's control and are difficult to predict. Additional information about risk factors that could materially affect our business are available in Frayer's S-1, an annual report on Form 10-K filed with the Securities and Exchange Commission, which are available on the Investor Relations section of our website. With that, I'll turn the call over to Tom.

Thank you, Jeff. And good morning, good evening, good afternoon, everyone. Pleasure, of course, as always, to be speaking to you in this, our sixth earnings call since we've been public on the New York Stock Exchange for our third quarter earnings report for 2022. During today, we will go through some refreshments, so to speak, on what we've been doing to date. We're going to refresh you on what we've done in terms of selecting technology. We'll give you an update on where we are, talk about the market dynamics, which is accelerating in front of our eyes. I had the pleasure, of course, of announcing our Giga America ambition to the world a couple of days ago. I just arrived back from Atlanta. We'll talk about that. We'll talk about our strategic partnerships. And I will take you through updates on the operational side. Oscar will take you through updates on the financial side. I'll sum up with strategic priorities before we turn to Q&A. So Thread is a company that went public on the New York Stock Exchange on the 8th of July last year. We built our company around three core tenets of speed, scale, and sustainability. And everything we do is linked to these three things. And the last quarter has fundamentally supported that ambition, as we have demonstrated through moving forward at pace, both on the commercial side, on the operational side, and on the strategic side. We offer differentiated exposure to the secular growth trends in the battery market, and we are an increasingly selected partner of choice in providing clean battery solutions. We're on track to becoming a global leader in this space. We have captured a large part of the nascent but rapidly growing ESS market, and we're now seeing increased interest and momentum building in the commercial vehicle space as well as the electric vehicle space. We are a partnership-based organization, and we value our partnerships, and we develop ourselves in combination with and in learning from our partners that we have now from Japan in the East all the way to the U.S. in the West. So, as mentioned, we started out in 2018. Basically, 2018, when the idea was formed, as I mentioned to many of you before, we were inspired by Nordvolt and impressed by their development. But as good Norwegians, we tend to think that we can do it a little bit better than the suite. Fast forward to July 8th last year, when we went public on the New York Stock Exchange, obviously a formative point in Dreyer's history. Since then, a broad variety of important partnerships have been established, both for joint venture development in the U.S., for downstream opportunities with NEDEC in module pack and DC block, basically containerized ESS solutions, important supply chain partnerships with Etortu and Alise on cattle manufacturing, and of course, the soon-to-be-completed customer qualification plant, or sanctioning of developing of GigaArctic and our announcement of GigaAmerica, all of which speak to our three core tenets in our strategy of speed, scale and sustainability, moving towards becoming a global champion at the global scale, targeting more than 200 gigawatt hours of capacity installed by 2030. I just want to take a moment to remind ourselves about our technology strategy. So, Freyr took 18 months in our technology selection process before we landed on our first technology partner, 24M Technologies, MIT spin-off out of Boston in the US. And we were looking for three things when we were selecting technology. We were looking for a technology that was commercially introduced, Because we wanted to get rapidly to the market with product in this exponentially growing demand for batteries in an increasingly market short environment. We wanted something that offers that change in performance and cost. Because ultimately this is a numbers game and we need to be on the left-hand side of the cost curve to basically be able to compete with the Asian business models in general and the Chinese business model in particular. So Interim Technologies offers dramatic reduction in footprint of the facility, dramatic reduction in capex, strong reduction in energy consumption, and much more production per employee, and differentiates basically the ones who are able to take this to the gigawatt-hour scale. And FedEye is the first company to take this technology to the gigawatt-hour scale, and we're on track in pushing towards becoming that differentiated clean battery solution partner of choice. But equally important, our third criteria was to be able to improve this technology further over time. And we're very happy to have established very deep iterative discussions and partnerships with the other licensees in the 24M family to basically ensure that we can continue to push the boundaries of what is possible to achieve within the existing raw material paradigm for lithium ion batteries, but staying within a disruptive technology process, which we're now advancing further as we speak. So we are hard at work in ensuring that we can meet the industrial and financial milestones that we need to get to that gigawatt-hour level scale. We are acutely aware of the integrated nature of building and financing and operating multiple facilities over time, and I'm proud to announce that we are making good progress on all of our core verticals. We are intensifying and broadening our financing efforts to support this parallel development that we're now on with GigaArctic and GigaAmerica. The good news is that we already have detailed blueprints established for GigaArctic, which will be reasonably easy for us to replicate in specific detailed engineering blueprints when we now move into that detailed engineering phase for GigaAmerica. This will allow us to brief the learnings from GigaArctic into our next generation development in Georgia. And we're really looking forward to leveraging our learnings from Norway and exporting them to our new partners in Georgia. The GigaArctic project financing process is in its second stage and also we'll come back to that and be targeting additional credit approvals for that in first quarter of 2023. The customer qualification plan is on track to produce its first sales in the next quarter in 2023, and that will enable us to unlock competitive project financing and accelerate further customer acceptance tests, etc., as we are seeing today. There is deep increasing interest from strategic and industrial partners to enable what we label accelerated capital formation, and Oskar will take you through a deeper status on that in his front group. We've also tested 24M cells with one of the leading agencies in Europe linked to our customers, and we're very happy to see that we are exhibiting top quartile energy density and very strong safety performance in our cells. So seeing the performance of 24M cells relative to the energy storage market is something that obviously is generating a lot of traction with our customers. And we're really looking forward to documenting that we can produce these cells also in the customer qualification. We are continuing to accelerate on the commercial front with more conditional offtake agreements in process of being converted to term offtake agreements. From a project finance point of view, we're targeting 60% or more firm offtake capacity through 2032 to basically unlock as bankable project financing solutions as possible. Furthermore, I'm really happy to say that we're seeing now an acceleration in the interest for our solutions also from the commercial mobility sector as well as the electric vehicle sector. We are in advanced discussions with a broad variety of stakeholders across the entire mobility and EV spectrum, and we will be continuing to mature long-term strategic partnerships in this regard with some of the leading firms on the planet. Obviously, all of this will not happen unless we have a very strong focus on securing relevant materials, and we are making good progress in this regard as well. So we have secured most of the materials we need for the immediate future, both from a customer qualification plan point of view and also from a giga-architecture point of view. We have also announced efforts to establish localized and decarbonized supply of, for instance, cathode materials into our giga-facilities. And our licensing partnership with the lease, which I'll come back to in a second, is a good example in this regard, which will allow us to drive down costs. maintain our position on the left-hand side of the cost curve, and also ensure that we can drive down the carbon footprint of the facilities that we build. Let me just take a moment to remind everyone of the exponential nature of the growth in the ESS segment. We have always been of the opinion that the decarbonization of society is in large part driven by the decarbonization of the transportation sector, but also the decarbonization of the energy sector. And it's evident that the batteries that go into electric vehicles eliminate the point of combustion from the tailpipe. But if you charge these batteries with non-renewable energy, and if you build these batteries also with non-renewable energy, you will not enable the decarbonization required. So therefore, we have always been of the opinion that the market opportunity in the energy storage segment is as large as it is in the electric vehicle segment. And it's very good to see that more and more stakeholders are changing and revising their estimates in the right direction. The only thing I know about these predictions is that they are most likely wrong. But the other thing I know is that they continuously be revised upwards. So we are of the opinion that the ESS opportunity is much larger than most people think. And this is also in part one of the reasons why we think the 24M Technologies production platform is particularly suitable for these applications. These represent very large and thick electrodes that we can apply into containerized solutions for storing sunlight and wind, and provide stress relief to grids as they move to more and more intermittent power supply when they move away from baseload coal and baseload natural gas as their main sources of energy. Therefore, this movement is fundamentally supporting Friar's accelerated development, and our GigaArchitect and GigaAmerica announcements should be seen very much in this regard. We will, however, also be producing batteries for commercial vehicles and electric vehicle applications, most likely from both facilities. But the flexibility that our technology platform provides us with is also a differentiating feature that we're very happy and proud to take to GigaWatt Hourscape. Let me then briefly mention, and many of you probably witnessed our announcement late last week when we announced the development of Giga America. We are now committing to developing clean next-generation batteries in the U.S. at gigawatt-hour scale, and it was a pleasure for me to take part with the great people of Coweta County alongside representatives from the state of Georgia in announcing our Giga America plans. Our initial phase development here will be 34 gigawatt hours, roughly costing the same as GigaArctic. We have received strong financial support from the county and the state of Georgia, a core pillar, of course, alongside talent, logistics, and infrastructure as our key features in selecting this site. We did a very rigorous selection process looking at more than 130 sites across 25 states and we landed in coeta county in georgia and we have 368 acres of prime industrial acreage which we now aim to move into development phase up as we move into detailed engineering over the next couple of weeks and months so this Industrial acreage is ideal for not only multiple phases of battery cell manufacturing projects, but we could also add both upstream and downstream facilities into the mix. We here have a site which is already 15 times larger than the site we have in Norway. So we have an opportunity to really expand as and when we see the commercial momentum growing in the U.S. We will over time invest more than $2.6 billion on this facility in line with the agreement we have with the state and local municipalities and employ over 700 people in the process. We will be leveraging the American technology based again on the 24M technology platform, which again is a very simplified process that enables us to really sort of differentiate ourselves both from an ESS point of view, but also, as I mentioned, commercial vehicles and electric vehicle applications. And the final thing I'd like to say on this one is it is very important for us to be a geographically diversified provider of clean battery solutions. This is something that our customers really value. They see regional security of supply as a core part of large off-take agreements, and this is something that you should expect more and more customers to be focused on in the coming weeks and months as we are firming up and converting many of our off-take agreements to long-term sales agreements. We've also in the quarter forged new strategic partnerships and I'd like to mention two of them. The one we did with Alice, the largest producer and developer of LSP technology outside of mainland China. And we are now evaluating how we are going to establish our own cattle manufacturing facilities in northern Europe, in Scandinavia in particular. And we're also looking at how we can leverage this worldwide license that we have for producing LSP cattle material to our facilities both in Norway and in the United States. This, again, fundamentally secures the core cost component, but also the core carbon content component in the raw materials we use when we produce battery cells. And having a world-leading technology like the one of Elise secured through a very competitive licensing agreement is something that will enable us to stay, as mentioned, on the left-hand side of both the cost curve and the carbon curve over time. Equally important for us, and of course with deep pride, is that we have established a broader supply chain partnership with Itochu. Itochu is one of the leading trading houses in Japan, also an investor and core supporter of the French brand technology, and they will serve as a direct material supplier for us in our procurement and supply chain operations. We obviously intend to leverage Itochu's broad global network and expertise across the entire spectrum of securing, transporting, and leveraging world-leading materials for our battery cell ambitions. With that, I'm going to hand it over to Jan-Arve, who's going to take you through the operational updates from the customer qualification plan in GigaArctic.