Li-Cycle Holdings Corp.

Good day. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to the first quarter 2023 Lifecycle Holdings earnings call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you should need operator assistance, please press star zero. Thank you. I will now turn the call over to Nala Azmi, Head of Investor Relations. Please go ahead.

Thank you. Good morning, and thank you, everyone, for joining us today for Lifecycles Review of our Business and Financial Results, ended March 31, 2023. We will start today with formal remarks from Ajay Kochhar, co-founder, president, and chief executive officer, Tim Johnston, co-founder and executive chairman, and Duddy Simpson, chief financial officer. We will then follow the Q&A session. Ahead of this call, Lifecycle issued a press release and a presentation, which can be found on the investor relations section of our website at investors.lifecycle.com. On this call, management will be making statements based on current expectations, plans, estimates, and assumptions, which are subject to significant risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of lifecycle. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect, including because of factors discussed in today's press release during this conference call, and in our past reports and filings with the U.S. Securities and Exchange Commission and the Ontario Securities Commission in Canada. These documents can be found on our website at investors.lifecycle.com. We do not undertake any duty to update any forward-looking statements, whether written or oral, made during this call or from time to time to reflect new information, future events or otherwise, except as required. With that, I'm pleased to turn the call to Ajay.

Thank you, Nala, and good morning, everyone. Aligning our reporting schedule with those of our peers and investors, we're excited to be reporting our first calendar quarter of 2023. This morning, we'll provide a review of our results and the ongoing progress on our Spoke and Hub network. Turning to slide three, we continue to execute on our strategic objectives as a leading solutions provider in the sustainable domestic EV battery supply chain in both North America and Europe. I would like to highlight some of the recent key achievements that we'll discuss in greater detail on this call. On the commercial front, we signed a definitive long-term agreement with Vinny S., a battery manufacturer. Beginning in 2024, Lifecycle will become their preferred recycling partner for Vietnamese-sourced battery materials. In the interim, manufacturing scrap from VDS's presence in Vietnam will be directed to Lifecycle's North American spokes. Over the longer term, we see the opportunity to establish a dedicated spoke near VDS's manufacturing site with a decision anticipated by 2025. From an operational perspective, we continue to grow our network strategically, mirroring customer demand. In North America, our four operational spokes are delivering solid performance, and we are progressing the plan to ensure ample availability of feedstock for our first commercial hub in Rochester, New York, which remains on track to commence commissioning in late 2023. We continue to achieve higher operating rates in our North American spoken network while also exploring a new site in Ontario. In Europe, we are replicating the modular approach to network growth that we've successfully deployed in North America. We have three spokes in development with our Germany spoke on track to commence operations in mid-2023. We're excited to announce a partnership with Glencore to co-develop our first European hub, expected to be the largest resource recovery facility on the continent, producing critical battery materials. Finally, on the financial front, we've progressed the work required to close the U.S. Department of Energy's $375 million loan commitment which we expect will occur in mid 2023. Turning to slide four for a recap of LifeCycle's positioning at the center of the battery material supply chain and an overview of our value proposition. It's important to note that we maintain our flexibility to service all types of customers in the battery supply chain with a pure plain recycling and resource recovery focus that complements and doesn't compete with their businesses. We are providing an integrated battery materials platform for global customers by closing the supply chain loop at a local level. With logistics and handling know-how, innovative and sustainable technology, and a growing network, Lifecycle is advancing as a global partner of choice with diversified customers across the battery value chain, including active material manufacturers, battery, and EV OEMs. Turn to slide five. for an update on the total addressable market, or TAM, for battery materials available for recycling. We continue to see robust demand and expanding market for recycling of all forms of lithium-ion batteries. Near-term growth is largely being driven by Gigafactory announcements through 2025 and supplemented by growth in end-of-life battery feedstock towards the end of the decade. Bolstering the outlook for lifecycle is a limited supply of alternative post-processing capacity coming online in the near term relative to lifecycle's timing and progress and general market development. This is likely to be even more pronounced towards the end of the decade. Turn to slide six to discuss the modular approach that we've implemented to pursue our spoken hub network growth strategy. As we discussed on our transition earnings call in March, our successful template in North America has solidified our position as the leading recycler in the region. To review, we seek to develop a spoke network strategically located near customers to secure sustainable long-term feedstock supply in a manner that reduces handling costs and operational risk. These investments are underpinned by both multi-year intake and offtake commercial contracts. To close the loop, we utilize centralized, large-scale refining hub facilities strategically located to leverage existing infrastructure. Lastly, we optimize our capital structure with strategic financing, similar to the recently announced DOE loan commitment. Notably, this is a replicable and scalable model. We are now extending this model into Europe. Let me now turn it over to Tim for an update on our SPOKE and HUB network.