Freemelt Holding AB (publ)

Hello and welcome to today's webcast with Freemelt, where CEO Daniel Gidlund, CFO Martin Granlund and Darren Everett, regional president of Freemelt Americas, will present a report for the second quarter of 2024. After the presentation, there will be a Q&A. So if you have any questions to Freemelt, you can send them in via the form to the right. And with that said, I hand over the word to you guys.

Thank you. So once again, hi and welcome and thanks for investing the time with Freemelt. So agenda wise, this is, of course, focus on the Q2 performance, but also the key activities and achievements after the quarter. And at the end of the session as well, you have the opportunity to ask some questions that we hopefully can answer. So this may be a bit of a repetition for some of you that have participated before. But just a quick reminder and recap on the female journey. So company-wise, it started 2017. All the founders, they have extensive experience of the technology electron powder bed fusion from Arkem. This was also the reason why they managed to, within such a short period of time, develop a completely new machine, which actually was the first open source machine in the industry. The strategy was to first go to the academia side to really drive and enable more research on new materials, new applications that could be suitable from an additive manufacturing perspective. And the next part of the company's journey was to go public. So we were listed at Nasdaq First North since June 2021. And the purpose was to fund the industrial offering, which kicked off in 2022 and that has been worked on since then. Now we have a solid offering, I would say complete offering from research up to serial production. And this is also now the third phase of this company where we are ramping up the commercial side of it. So the focus now for the past 12 months has been much more on the commercial side. We have launched a third machine as well for application development, which is in the industrial offering of e-melt. We have built and also empowered a regional structure and team, both in the US and in Europe. And Darwin will come back a bit on the US one later on. And I think what you can see on the slide here as well is a bit of the result from that increased commercial activity with a few orders over the past 12 months. So if we then zoom in on the key achievements during the second quarter, I think what you can see here, it's a good mix of machine and feasibility orders. So let's start then from the top. And I'm extremely happy for our first e-melt, so the industrial machine into the US. If you remember, we had one in Europe already. So this is the second one, but the first one in the US. And as I mentioned, I think a couple of times before as well, when it comes to the US, then the universities are extremely important for us to enter into the industrial applications. Because in all the cases, at least in the majority of the cases, there is an industrial partner behind the investment of the university as well. In this specific case it's for fusion energy applications. Talking about fusion energy applications, the second order, which is then a project order, is UKAA. So this is the United Kingdom Atomic Energy Authorities. This is a phase two project, which means that we completed phase one during last year successfully. So this customer wanted to enter into the second phase, focus more on productivity, focus more on complex components. And this is also then for fusion. The third order and also a strategic agreement is with Sandvik, the Mid Sweden University and Fremont. So it's a three party collaboration. It also includes the Fremont One. Why this is so important for us is that Sandvik is a global company which is also providing tungsten powder. If you have followed Freemelt over the past years, you have noticed that we have really stepped into tungsten applications. We have a unique position in tungsten applications and unique capabilities. and this is why it's first of all important for us to to further secure supply of tungsten powder here we have secured supply chain for european supply chain secondly if you take also if you're printing parts To generalize you can say that roughly 50% of the cost is coming from the powder cost of printing a part. So of course to get down the cost per printed part is important and Sandvik they provide a chemical reduced powder which can substantially and also reduce the cost of printing tungsten parts which of course is crucial moving forward. The Mid Sweden University is one of the most experienced users of electron powder bed fusion technology over many years. So together I think here we have high expectations that we can develop a process in an efficient time that we can also then implement for industrial users. And then the fourth one is a Freemant 1 order. And as I said initially here as well, that in the US, it's critical to go through the academic side that will test the, first develop the material process, test the technology, and then also develop the applications for those industrial users. In this case, it's a customer that has acquired a Freemant 1, to develop material processes for defense applications. Okay, so let's then spend some time on the key events after the period. And as you can see here, we have had several ones. And I think this slide actually demonstrates well our increased commercial activity level over the past 12 months. If I start from the top here as well, we entered after the quarter into a strategic collaboration with 3DMZ. This is a Dutch company. I would refer them as an application center, which means that they work closely with industrial companies already. They have been into additive manufacturing for many years. But this is the first metal additive manufacturing that they're stepping into. So it's a new material that they're entering. And we are very pleased that they selected Freeman as a partner as well. So together now, we will further engage with Dutch, especially Dutch industrial companies moving forward. The second one is a feasibility order. This is from the US. This is, unfortunately at this moment, it's a confidential, we can't expose the name here, but this is regarding a defense application. So it's a company in the defense industry. And the focus here is refractory metals. So actually here, we have already kicked off this project and it's progressing really well. The third one is also a US customer. And this is we can't expose this name either. In this case, it's not defense, but it's actually a fusion. So here the the project is about to to have a feasibility study for the material properties and the potential application. And the same comment as I did just on the one before, we have kicked off the project and I would say we are progressing really well here as well. The fourth one, and Darwin will actually come back and give you some further details on some of them later as well. The fourth one is also from the US. This is a consortium called Georgia Tech 4.0 Manufacturing Consortium. And this is a membership-based organization that is connecting manufacturers, academia, government institutions at the Jorda Tech University's advanced manufacturing facility. So here members have unique opportunities to conduct research, develop and pilot new manufacturing systems and also collaborate with both students and also other consortium members. So very important for Frima to start to be part of this and to engage within that consortium. We have also attended EWI's additive manufacturing consortium. EWI established an advanced manufacturing center already back in 2010. Their purpose is to accelerate and advance the manufacturing readiness of metal additive manufacturing technology. and they try to bring together then diverse groups of additive manufacturing both end users, suppliers, researchers and stakeholders from the US to positively then impact the additive manufacturing landscape through organized and focused activities. So again very important for us as a company to be a part of this moving forward in our commercialization and industrialization of our offering. And then last, but definitely not least, I would even claim that this most probably is one of the biggest achievements in this company's history as well, that we have managed to develop this industrial machine EMELT. It's a complex technology, a complex machine. To manage to do it in such a short period of time that the team has since they started. And to install it on schedule. And when I say on schedule, which was agreed on with this end user. So it took them only two weeks. to do the installation, to do the training and to do the test build and to hand over the machine for the end user to start to operate the machine. So very proud of what the team has accomplished here. So with that said, I would like to hand over to our regional manager for North America, Darren Everett. And as I said, he will deep dive a bit into the intensified commercial activities and also some of the achievements so far. So please, Darren.

Thank you, Daniel. Thank you, Ludwig. It's been an exciting time. The last year has been a lot of fun and seriously kudos to HQ for the release and delivery of the email ID on time. It was an incredible experience to watch. And it shows a testament of our experience, like Daniel said. But as my counterpart said along the last webcast, the U.S. Department of Defense is planning to invest $414 million in 2025, only just in advanced materials research. And this advanced materials research is new, I would say accelerated, there's such a high urgency due to the geopolitical and cybersecurity threats that critical applications are a priority. And when I say critical applications, just a step back, that means if that part that fails, that's the part that we made on our machine, if it fails in operation on another system like an airplane or a tank or a missile, then then the failure is catastrophic, meaning to other people. So these parts off of our system have to be right. And when I talk about refractory metals, you can look over on the right and see the five squares. Those are the refractory metals that are our sweet spot. You can tell that other... Types of additive metal technology, they can process the other metals. We are focused on refractories, and that is key to the defense industry because those refractory metals are used on weapons systems. And you can read about the news. There's a heightened sense of security in the U.S., and we wish for peace, but we have to prepare, and sometimes weapons keeps peace. So we are currently working and involved in communicating with the upper channels of the Department of Defense on these applications. And I can say it's been an amazing experience. The United States Metal AM very welcoming to us and are trying to find these applications with us that we can solve for everybody's benefit. And Fremelt America's team, our products, and this timeline matches so well that I can say since I've been involved in the industry since 1999, and this culmination of the need And the solution is coming perfectly for Fremelt and our EBM technology. So what we're seeing is the growing activity for Fremelt in defense energy and med tech. And what I can say is these applications come with NDAs because they're confidential. So that's why we can't release a lot of names because every email customer or every feasibility study starts with an NDA. We can't announce their name, but we will when the When they're successful, I'll say. And so with a sign of the activity increase now is the increased number of non-disposures, quotes, agreements, requests. uh we support each transition so our technology if you read through the uh the systems how we fit in the systems world is with these applications they're currently being produced by traditional manufacturing so to convert to additive manufacturing it takes research that particular part. And we have the systems for that. And we have the customer base at the universities who are currently doing the research for our systems. So the research that needs to be done and the development If there's any remaining after feasibility studies can be easily accomplished through our other sources in the country, right? We have universities now, and that is their focus. And they're working with the same government and industry prospects that now we are involved with. in the development phase with the e-melt ID. And that's taking an application from research and producing a real part to solve a real application. That is what the e-melt ID is for. And then when these parts get certified and qualified for production, then next year our e-melt IM will be ready to take it into production. So all of our systems will see equal growth throughout the entirety of our process. They will all grow together. And we have the best materials as well. Just to step back on materials, we have the key materials and we have headquarters support. And you can see that based on the email ID, we rarely miss a deadline and we're on time and we produce quality and we are only ready for evaluation. That's what we want from the government is to evaluate our products because we are competent where we're at. And we have the right team here. I haven't worked with such an experienced, dedicated team who has experience at exactly what they're doing in my career. And it's an extreme pleasure. And the momentum is huge. And we have a great opportunity in front of us. And so as far as the activity that we're seeing, it's been quite a journey. And you can see that every event that we attend that we're invited to gets better and better. Rapid TCT was the biggest AM event in the world, dedicated to AM, I should say, in North America at least. And it had all the major competitors there in laser part of it, fusion and electron beam too. And I can tell you, we remain confident in our products and our materials and our focus on just a few select areas of refractory metals that we still are very confident in the excitement over technology's matching. So what we see is at Georgia Tech, if we want to go back to that, and why this is important is our customers, like I said, our university customers do research. And they're doing research for the government on critical applications. That's what they do. And they have been doing that for years. So really, Fremont is just entering the standard process of evaluation and R&D and production processes. later that have been going on in this market for forever. You know, it's a standard qualification process if you want to get your part on an airplane, for example. And so the important thing to watch is, are we being invited to participate in these valuations? And we are. And Georgia Tech is just one example of a consortium where All the suppliers of machines and materials and the users who have the needs, Department of Defense, the Defense Industrial Base, Department of Energy, they all culminate here in a consortium environment because that's where the solutions can be found. can be made real. Because the collaboration that exists by bringing everybody together in one room is just phenomenal. And the same thing happened at EWI two weeks ago in Buffalo, New York. It's an incredible experience. And they are... heavy, heavy in the research R&D. So that's a key point in industry and government and universities. They will all need Fremont ones. They do research all of them. And the North American feasibility studies that are coming up, They're confidential, of course, but they are all related to exactly what we're doing in defense and med tech and energy applications and defense applications. We got two of those, and those are just the beginning. We have requests for more feasibility studies coming up. And the Texas A&M Collaboration Project, which is an America makes project, is underway. It's ramping up. It's going well. We're supporting them. The collaboration also includes a tungsten project, which we're ramping up for. And overall though, the activity that's ramping up for this quarter is amazing. We're joining American Makes and attending key events at Harrisburg University, who's into workforce development after production. So we're getting involved all the way downstream in workforce development, supporting that, and all the way upstream into research, and our products suit that. We have the advanced materials show in the SSF, so some great events coming up and a lot of invitations to participate and get evaluated. Thank you.