Freemelt Holding AB (publ)

Welcome to Freemelt's Q2 presentation 2025. With us to present, we have CEO Daniel Gidlund and CFO Martin Granlund. If you have any questions for the company, you can send them in the form to the right. And with that said, I give the word to you, Daniel.

Thank you. Welcome everyone to our Q2 forecast. So as we have received many new shareholders since the start of 2025 and continue to do so, we will just make a brief introduction about Fremont first. So Fremont, we were founded in 2017 by engineers coming from another successful Swedish 3D printing company called Arcam. So what we do, we develop and we sell advanced 3D printers for metal applications. And our ambition is to become a leading supplier in additive manufacturing. Our focus is where additive manufacturing, of course, can add value. And for our technology, and you can actually see on the screen as well, the green dots is what we call electron beam powder bed fusion, an extremely fast melting process. So here, this is not a lot of lasers. This is an electron beam moving four kilometers per second or melting more than 3000 particles. dots per per second so this technology typically is used where you need complex and high performance materials and also components which is typically needed and demanded by the defense industry energy like in in nuclear or fission and also fusion energy and also in medtech application Our technology is not limited to any kind of material, but our focus for the past couple of years has been in tungsten, titanium, and then copper. If you look into Fremont from a design perspective of our printers, we are unique. And why we are unique is that we have a modular printer. And the reason for this, and I think this is also where 3D printing for many has struggled a bit, is really to increase the productivity and really get short cycle times, which means that you get higher availability for producing, which means you get up your productivity and then get the cost done per printed part. Our customers so far has been a lot into research. So typically universities, research institutes. But since we launched our industrial machine mid of last year, we have also now been exposed to industrial clients more and more. The three focus areas and business verticals that we are having is all under substantial growth. If you look into the defense side, and I think the numbers actually is outdated now. I mean, now NATO has increased their budget. The European Union is also rapidly increasing their defense budgets as well. And here you can see a couple of examples of organizations, companies and so forth that we have disclosed. So far, we still have a few undisclosed that we can't mention as well. But just to mention one, Saab is one of the Swedish clients that we have worked with since last year. If we don't zoom in on energy, this is mainly fusion energy where we have a really strong position. This is also an energy source that is rapidly increasing. It's substantial investments happening here as well globally. And we have a very strong position here. And then last but not least, Medtech. So Medtech, and in this context, it's mainly referring to orthopedic implants, which actually is the industry which has the highest adoption rate of serial production through additive manufacturing. And here we have also two global OEMs that we have as clients. So let's zoom in then on Q2, which has been a record quarter regarding sales. So sales for this single quarter is actually in par with the full year 2024. Our ambition is to be a leader in Electron being part of a fusion solutions global, as I mentioned, and China is the fastest growing additive manufacturing market globally. why it of course was a breakthrough in the quarter when we also signed up a partnership with GeoLi to represent Freemant in China, Taiwan and then Hong Kong. And then lastly, the strategic agreement with Scanfil to manufacture our machines moving forward has also enhanced our supply chain scalability while we continue to grow our business globally. So, of course, I'm very happy with the sales numbers for Q2. This is a result of four machines that were delivered during the quarter and installed at customer sites. We also had great order intake in Q2. So we had 20 million SEK in order intake, which represents six new machines and also two paid customer projects. And one of them was a real prestige order from fusion for energy. So within the energy sector. Additive manufacturing is a technology that is being more adopted now for serial production. And the industry that already started this transformation, as I mentioned previously, is Medtech, so orthopedic implants. So here, big volumes of implants are already being produced through additive manufacturing. And therefore, it's a critical milestone also during the quarter when we had a delivery of our industrial machine email to one of the global implant events. So if we look at our total installed base, I must say that, I mean, we have an impressive number of 39 machines now, which means that we are definitely taking clear steps towards our ambition to being a leader in EPVF solutions globally. I think many people have maybe a perception about China as a labor-intensive, low-cost production country. But when it comes to manufacturing, China actually today is becoming one of the most advanced manufacturing countries globally, which means that they can produce really advanced and high-quality product in a very efficient way. Jone Peter Reistadt, Ph.D.: : China is also the fastest growing additive manufacturing market globally and it's also a country which rapidly adopt additive manufacturing procedure production, so this is why China is a key market for female to enter into as well. China is has also a rapidly increasing demand of orthopedic implants. Why the medical business is growing fast and then China has also stated that it wants to become a leader in renewable energy, such as fusion energy as well. All these focus areas and positive areas are actually also key focus areas for Freemant, why it's a great fit for us as well. And usually they are not a typical sales agent with several additive brands in their portfolio. They are an international industrial player with an extensive business success in areas such as energy. So for me, this is one of the most important strategic milestones for Fremont since it starts, actually. Another major milestone for Fremont, which also happened during this quarter, is our strategic agreement with Scunfield. And this is to outsource the manufacturing of our machines. This will substantially improve our production scalability. It will optimize our networking capital, and it will also free up resources to focus more on R&D, aftermarket development, and customer support. So this is also a critical step in our industrialization journey. And the transition of the manufacturing is progressing according to the plan and it shall be transferred prior to end of September. So with that said, I hand over to our CFO Martin.

Thank you, Daniel. If we first zoom in on the order intake order book and the receivables of the company. So in the second quarter, as mentioned, the order intake was 20 million. And in the first half of this year, 42 million. This is a number we started tracking this year and will continue to track going forward. And the order intake is, of course, the orders received in the period. We also track the order book. The order book is what the orders received, which have not yet been invoiced. So they haven't entered the financial books in any way. The order book total at quarter end was 14 million, which is 47% up year on year. Slightly down since the first quarter, but that's an effect of those orders turning into receivables, prepaid income and eventually sales as the deliveries are being finalized. So looking at the sales number for the second quarter, we only book revenues to the sales where we have completed deliveries. So uncompleted deliveries are still in the order book, in the account receivables or as prepaid income. So to summarize, we have a very strong order intake. We have a healthy order book. We have receivables growing very quickly, up to 20 million. And we have record quarterly sales, as we see on the next slide. 19 million is a record. We've never seen anywhere close to these sales numbers in a previous quarter. It contains four machine deliveries, and that's, of course, the majority of the net sales recorded, 86%. We have an aftermarket, which is 13%, but in actual terms, as you can see on the bottom graph, the green line, it ticks up quite a lot. We shouldn't expect this exponential growth going forward, although the aftermarket business will continue to grow as an effect of the installed base increasing. On the gray line on the bottom, we see customer projects and other. It's 1% of net sales. It's a very low number for the quarter, but I don't think it's in any way significant going forward, as we should see these project orders continue to come in and to see an uptick in customer projects going forward as well. Then if we finally look at the operating cash flow. So, Fremelt has a positive network in capital, which is good in the way that we can cover our short-term debts, but we also tie up cash as we grow. One of the things we've done to limit this effect is to outsource our assembly and manufacturing to a third party. This will limit the effect, but it will not completely remove the effect of more capital being tied up as we grow. So in the quarter, we had operating cash flow of minus 14 million. The main contributors are an increase in inventory and an increase in receivables. And all those are of course going to be cash in for the company in the future. So these are cash generating assets, but for the future. What we've done in the graph is to plot the operating cash flow versus the receivables, just to give everyone an idea of the sort of inverse relationship that we see, which is reflective of the growth stage that the company is in. So the negative cash flow has an inverse relationship with the increasing receivables that we see, which will be generating cash in the future. Thank you.

Thank you, Martin. So let's wrap up. So once again, I mean, Q2 was a record quarter regarding sales of 19 million. Once again, just to give some sort of comparison, it's on par with the full year of 2024, and we had a very strong quarter regarding order intake. Just to highlight a few orders as well. Germany has been an important market for us on the academia side. Germany is a big industrial market as well. So that's why it was pleasing to get the first industrial machine order from Germany. As well, we had a couple of new businesses, both within energy and also in defense sector, and including the prestige order, as I mentioned before as well, from Fusion for Energy, which is the European part of the largest R&D fusion product globally, ITER. We also achieved two major strategic milestones. So again, we established a presence in China, which is a very important market as it's adopting quickly to additive manufacturing. And the fact that we also signed a strategic agreement with Scanfield to outsource our machine manufacturing as well. Lastly, I would say that it's really fun at the moment to be the CEO at Freeman. We are well positioned and we continue now to turn our technology edge into commercial growth. And also the fact that external factors now as well is really accelerating the adoption for additive manufacturing. So with that said, thanks for listening. And now we open up for some questions.

Thank you so much for that presentation. Now we'll move over to the Q&A. First question here is, you write in your CEO statement that you have made a breakthrough in the second quarter. What do you mean by that?

Sure. So, I mean, we are experiencing constant increased traction now in the market, which also is reflected, I would say, in the increasing order intake. We have record sales number and also the number of successful projects. I think this combined with us having entered into now strategic partnerships with international players like ULE and also Scunfield, I think this is a clear confirmation that we have reached a new level and also a new establishment in the market.

Thanks. How do you view the industrialization of AM given that you mostly sell Fremelt 1?

A good question. I mean, we see that the willingness now to invest in AM is increasing as companies and actually also governments are now increasingly reviewing their supply chains and also how to increase productivity in different kind of ways, not least in defense and energy. And Freeman One actually plays a major role in the development of additive manufacturing. And therefore, we see it as a strength that we can deliver this type of development machine like Vimit One as part of large and important industrial products. So this will actually validate our technology and also then lay a good foundation for sale of future industrial machines.

Thanks. Next question here. Can you comment on the prospects for China and what we can expect from the collaboration with Julie?

Yes, absolutely. I mean, China, as I said before, I mean, it's the fastest growing additive manufacturing market. China is leading also investments now in fusion energy in particular. And this is an era where we have a very strong position. We've worked with the United Kingdom, atomic energy authorities for many years. Now we have fusion for energy. So that's an important area. Yuli is also an established player. And I must say, I'm really impressed about their structured and proactive way of working, which, I mean, really increased the potential of a successful establishment in China as well. So we definitely have high hopes and expectations for the cooperation with Yuli. and also the upcoming business opportunities in China.

Thanks. What is the difference in capability between Fremelt 1, ID and IM?

So I would say there are three different kind of stages you have. Freeman one is when you start to do the material development to really develop the material that's going to be used for this specific application. So Freemint 1 is an open source machine, really open architecture and where you can add a lot of tools for more research purpose. It's a smaller build chamber so you can work with a bit smaller kind of products, but really efficient research. The Emelt ID is the next step when you develop the material and you're going to develop the application. Then E-Melt ID is the perfect fit. So you can still transfer your work from Freemelt 1, but then focus more on the application development. Maybe also start more from a low scale kind of production. And then E-Melt IM, is when you're stepping up to serial production. So this is designed really to, as I mentioned initially, to have short cycle times and turnaround times to really increase your availability for production.

Thanks. Now we move on to the last question here. Can we expect higher revenue per machine sold as you scale up the business and what is driving that development?

Maybe you can answer that, Martin. Yes, good question. So the focus right now is to expand the install base and get as many machines as possible out there to build a foundation for the scale up. When it comes to products, so the Fremelt one is a bit more mature. The Emelt is a new product. We always see better margins for mature products than for new products. So I think this will improve over time, but we also see potential for Fremelt 1 to have somewhat better profitability in the future. What's also relevant here is the partnership that we have with Scanfil, which we're entering into. I think this will also support us in our strive to improve profitability for the machines sold in the longer term. They will be a good partner to improve this going forward.

Thanks. That was the end of the presentation. We got one last question here. Do you see an effect that customer buy machine directly instead of starting a pre-study?

I think that's also a bit depending on the majority of the customers. So if you go to orthopedic implants again, They have worked for a longer period of time with additive manufacturing. They have also worked with materials that have been developed over many years as well. So in these cases then it's a shorter step. They don't need to go into a feasibility study in most of the cases. most probably they can purchase a machine shorter if you go to new materials like tungsten for instance or if you talk about copper or some other materials then any customer that has never manufactured with additive manufacturing before then the typical step is that you start with the feasibility study and then develop from there into application development. So it's difficult to say. So it's really dependent on the maturity of the customer when it comes to additive manufacturing and the type of application, I would say. I hope that answered your question.

Thanks. Once again, thanks for the presentation. I'll give the word to you, Daniel.

Okay. Yeah. No, thanks to everyone that invested your time and interest with Freeman today. So with that said, we wish you all a great day and bye for now. Thank you. Thank you very much. Bye-bye.