Freemelt Holding AB (publ)

Hello and welcome to today's webcast with Freemelt, where CEO Donald Gidlund and CFO Martin Granlund will present the Q3 report for 2025. If you have any questions, please feel free to use the form located at the right and we'll take that up after the presentation. And with that said, please go ahead.

Thank you and welcome everyone to our Q3 webcast. Okay, let's make a short recap about who we are and what we do. So again, Freemelt, we were founded 2017. What we do, we develop, we sell and we service advanced 3D printers for metal application. We work with a technology called Electron Beam Powder Bed Fusion, which is highly suitable for productivity because it's really efficient technology you can see on the screen here as well a lot of people think this is lasers different kind of lasers pointing this is an electron beam moving four kilometers per second melting more than 3,000 spots per second was extremely suitable for high volume It's also a clean environment. It's a vacuum, which is optimal as well when you really have high needs of strong and complex materials. And it's also a hot process, which also avoids that you get swings from room temperature up to, let's say, tungsten, where you need to get to over 3,400 degrees. So all in all, it's extremely efficient and also suitable for complex applications and materials, which is typically suitable and demanded in areas like defense, energy, and also medtech. If we then zoom in on our three industrial verticals, they are all growing. And I will say both defence and fusion are currently positively impacted from the current geopolitical situation that we are having. Defence, there you can see they are really ramping up volume demand. And also here I think the importance for if you put it like local or national manufacturing, regional manufacturing to really keep control and take control of your manufacturing process. Like in the past when you have outsourced sub-components. Now you would like to take full control from the material to the end product. Infusion energy. we can also see a substantial commitment now from investors globally. And just to name drop a few, I mean, Bill Gates, for instance, and his fund is investing heavily now in fusion. You can also see that end users, although the technology is not commercialized, but end users like, for instance, Google are committing to buy fusion energy in the grid when it will be available as well. Limitless and also clean energy which you typically call fusion energy have been a key resource now as well for AI and cloud giants. If we look into more on a national level I mean both US who recently announced their top three technology focus areas and where fusion energy was number two at AI and quantum and also China just I think last week announced their five-year investment plan and focus plan and where also fusion energy was included as well so it really has become a top technology priority for the coming years. And I think you even can say that fusion energy now has become the new strategic technology race globally, where you have seen AI in the past and also space. And then lastly, medtech, where the majority of the orthopedic implant OEMs, they are already transitioning to AM for the new applications. So all three of the areas have a structural and good growth underlying. Okay, let's zoom in then on Q3, which was another strong quarter for Fremont. We had a strong order intake and also sales, and where we ended up with a record or the backlog in this quarter. If we would summarize year to date, we are up 228% versus last year. And we have sold 12 machines this year, and I think we have an impressive installed base now of 40 machines. I think it's good to just recap and keep in mind that the first machine was launched in 2019, and then we had a pandemic in between. So 40 machines now, which is really encouraging to see. It was also encouraging that we... almost had a break even operating cash flow, which I think also proves that we have an underlying good operation efficiency and good cost control in the company as well. And then lastly, we had two strategic milestones in this quarter as well. The first one is to scaling for growth, which is we enter into China, the fastest growing market for additive manufacturing. And we also did hand over our assembly or production of machines to Scanfil, which also now has led us to have a more agile supply chain as well when we are continuing on growing our business moving forward. So, projects, I think this was talked about many times as well. One of the key, let's say indicators as well that the industrial side is really the demand and interest is ramping up is our commercial products. So, these are products we charge to customers. Again, we can only share the products that we have shared externally, so these are a few of them. Let's start with Saab Dynamics, where we have two ongoing projects. One that is directly between the two companies. and then one which is also a Vinnova product together with Linköping University. The focus is on pure copper and the direct product is in phase two and is running according to plan. The Vinnova project will be ongoing until early 2026. Regarding one of our other prestige projects in fusion energy, and that's Fusion4Energy. Fusion4Energy is the European part of the largest R&D fusion product, Global Ether. And here we're making great progress. This is about tongues and tiles for plasma phasing wall. And here, I think it's a really great example where additive manufacturing, in this case now electron being part of a fusion, adds its maximized value. So where you can even create material properties that are excellent because we will talk about hundreds of millions of degrees Celsius. It's really a hot environment, harsh environment, but also where you can you need to grade different kind of materials as well here. So you have tungsten first and then you have other materials to really, let's say, efficiently cool down the high temperatures as well. And to get those materials together here additive is adding really great value. Regarding the implant OEMs, which is more in production scalability kind of phase, more in proof of concept. Here, one of the clients do have an email at their production site. One is renting one machine here in Gothenburg at Fremont site. The proof of concepts I would say is on track and here I think we can expect some more tangible updates during mid or second half of 2026. As we have the ambition to become the global leader of electron beam powder bed fusion solutions, then of course we must be present in the fastest growing market for additive manufacturing in China as well. And I think there is still a lot of perception of China being a high labor intensive manufacturing country. And then maybe it is in some industries. But as I said before, China is the world's fastest growing market in additive manufacturing as well. So it's just a must to be here. Actually, yesterday morning, I heard on one of the morning shows on Swedish TV that the former minister of foreign affairs called Bildt, he mentioned as well that China is expected to represent around 45 percent of the world's industry by 2030. And I think you can also see when you go to China and you see their manufacturing facilities, it's highly advanced, it's efficient manufacturing that they already have in place. So they are becoming really, really more efficient from a manufacturing perspective as well. And when it comes to fusion energy, Where, I mean, Freeman, we have a strong position. We have worked now a couple of years, first with the UKEA, now Fusion for Energy and so forth. I mean, China, as I mentioned before, they're also investing a lot of money in Fusion as we speak. And it's included in the five-year plan. So we also see a great potential and value of the collaboration that we have with Yuli that is highly experienced and exposed to energy applications as such in China and outside of China as well. Lastly, the Chinese population is getting more wealthy, which also means that they request more and more orthopedic implant surgeries as well. So why there is also an underlying strong increased demand for additive manufacturing implants. So with that said I hand over to our CFO Martin.

Thank you, Daniel. I'm very happy to present another strong quarter by the Freemail team. In Q3, we had an order intake of 18.5 million SEK. So these are the accumulated value of the orders received in the period. We have an order book at an all-time high, 23.4 million. The order book represents the orders we've received, but that we haven't yet invoiced. So this order book is going to be future receivables, then turning into future cash flows, and finally turning into net sales in our P&L. So this is an indication of what we'll report for the coming quarters. Strong net sales in the period, 17 million. That's up 96% compared to the same period last year. For the year-to-date period, it's even stronger, up 228% compared to the same period last year. We see that the main part of sales, as you can see in the figure on the bottom right, the light green, 81% is from machine sales. We have 12% coming from aftermarket sales and then a small portion from customer projects and others. What's important to note is the margins. So the direct margins in the P&L are a little bit worse compared to same periods last year. And this is for two main reasons. One is the sales mix. Depends very much which machine we sell, what the margin for each sale of the machine is, and also the outsourcing activity that has been ongoing since the spring. Where we see that the initial bills of machines are slightly more expensive, but it's going to go down over time as the efficiency improves with our third party outsourcing partner. Cash flow. Cash flow was also impressive, operating cash flow of almost break even in the third quarter. This is, of course, the result of sales. So sales do come down as cash flow at some point. And we have seen the improvement is big. Mainly due to reduction in receivables, meaning customers paying their invoices, and also a reduction in overall inventory of trade goods. This is also a great improvement from last year. And as you can see from the graph, we've had a great improvement in the operating cash flow. The cash at bank at the end of period was 45.1 million SEK. And for the funding strategy going forward, an important part is the listed warrant, which was part of the capital raise in February 2025. It's going to expire in June. It has the potential to provide the company with 50 million SEK in additional funding. But it does require every warrant holder to take action and subscribe. And I just want to reiterate the favorable terms of the warrant, where the price paid is going to be a discount towards a volume weight price, which is measured in the second half of May 2026. Subscription is in June, and the maximum price for the warrant is going to be 1,33 kroner, or 1.33 SEK. So just as a reminder for those of you who have this in your holdings, that you have to take action if you are interested in being part of the future free milk journey. Thanks a lot.