Arrival (ARVLF) 13 Mar 232022 Q4 Earnings call transcript

Hello, everyone, and Welcome to Arrival's Fourth Quarter and Full Year 2022 Business Update Webinar. My name is Mike, and I'll be your operator today.

Before I hand the call over to the Arrival team, I'd just like to go over a few housekeeping items for the program.

So as a reminder, today's webinar is being recorded. [Operator Instructions]

attendance to I Arrival. your the now for over call you today, will and turn Thank

financial update. Thank America; of to Investor Igor quarter XXXX Torgov, discuss CFO. all Relations. and Arrival's and you for have Mike fourth John and joining And today, Arrival full Wozniak, with Director CEO; Annie North Wechter, I'm us we today results of business us year CEO Ableson,

today statements begin, forward-looking I'd remind made information current our like statements our on the subject statements. are us. certain assumptions available on beliefs, are and call we These Before uncertainties risks everyone this expectations to various to based currently and that reflect to and

to these our Although SEC full from after forward-looking on detail statements expectations of factors are call. to discussed occur are these we issued update Descriptions of any financial this obligation results quarter the other cause and believe more actual statements in could changes risks reflect fourth differ today XXth the that March. and undertake filings in year that and business we no reasonable, our materially to with results XXXX these revise and

considered certain not in call, refer the also should to our IFRS financial from as isolation addition to we This measures. be a During substitute or in and non-IFRS for results.

For further information, website please Investor investors.arrival.com. our refer to at Relations

I'll over Igor. to mind, it in turn that With

role The of the the share of role objectives company and business one do start me, know How today I idea Annie, of extremely with years, I've eight month, prototyping and for Thanks, our we I new important confident we accepted the three been have done. do XXXX hardware much in and for ensure will true a know IP and vehicles, CEO hurdles as well what tools; high-margin developed results needs the the to clear have with will not track. software, clear is components current have over to production I'm for years. CEO Over lightly. and rapid everyone. that framework on there this are advanced of a to and good last more but design we that? a solid evening, to of electric Arrival methods which It's in you vehicles. we but back and business vehicle pretty and integrates to vehicle flexibly QX be robotics and progressive new my them; just bit manufacture I than been the get portfolio

qualifies it to reducing technologies certified a has headcount fleet and believe are for our commonality designed steadily running and Antara, credit strong our while $XX,XXX, will recently a IRA $XX increasing the last-mile with million announced our business U.S. of contender product purpose-built ultimately European to liquidity shown reduction, a XX% further We debt our we reduce also We our due. commitment announcement recent and global have of which a our the plan as equity clear capital in business cost from bring of through compelling a level U.S. with market a by high-margin drivers. to It's specifically van, our Van, very up for high delivery L tax operators. adoption for making profile through

and portfolio to to allows Arrival improve we talent the technologies key program headcount our is milestones. plan most By refine reductions for goal deliver we work regards is managed we retain important be key as while and IP innovate, in the business of March, what achieving forecasted. end that successful But will of to that and continue to to with global our to vehicle

further development The the been These will advanced light for year purpose-built Mike public about And develop is also start accumulate kickoff efficiencies vans more road, factory accelerate U.S. lastly, testing XXX,XXX highly robotics. continue our this fund tell in has team kilometers. to automated the and to we efforts you proprietary will to activities us today. production to announcing improved a company integrate Microfactory of this the in this van with plan of XX Charlotte, green the help Bicester the already mobile and Our late. given to where production many building the processes U.S. minute. which fundraising in are purpose of

will complete of the support are in development with XXXX. the whose product We for and working interested to production U.S. belief at late in investors Charlotte be start financial necessary targeted factory

with programs, to and more remind the to remainder hand approximately received capital Arrival development I reduce of we Antara end to few forefront for the you the year-end, were agreement to talk our million commitment of of call in we debt at The Antara, our emphasize adapt of the management $XXX.X a bonds, is plan year convertible holder vehicle largest equity able about a million want our targets. due of Subsequent debt our is XXXX. at Through to XXXX. had of January key of same our another Before of by I new this million equity. cash to $XXX Mike transaction. over business cash that our $XX from through in

line an to up additional business. Westwood In to equity which addition, announcing the provide liquidity with Capital, today, of $XXX we million are will financing

hand reduce With to additional XXXX. cash late capital, to liquidity working sufficient we expect to business the initiatives and into on fund have

capital to we to will mentioned, I those launching are needs about John initiatives you more vehicle specific on. tell raise program. later capital U.S. As

for important on reverse its above with May a Arrival shares to that reduction. split proposed X stock approve is deadline. of $X enable today, Extraordinary a to lastly, action Meeting April calling the as trade reverse our voting deficit well a If passed, as shareholders And stock we split are of one to before X capital price the cure purpose also NASDAQ and will Arrival trading General

for Mike over updates to hand development on And it our with programs. vehicle that, I'll

Thanks, Igor.

and need paired headcount size vehicle, the higher and our commercial The average IRA with reduce an few U.S., up the about in while to cash credits commercial of margins spoken $XX,XXX last we significantly vehicles strategy. tax Over electric burn, U.S. create our for on the the for business months, Arrival publicly selling focus in larger the has product prices opportunity vehicles extremely U.S. per compelling to and market

decided market. Last that U.S. ramp production our quarter, that efforts facility we could announced on at not so we focus Bicester to our the UK we

that Our we purpose-built XL. first U.S. delivery will be van product designated a

the start Microfactory Charlotte in in current Van XXXX. is Our plan that production XL will the late

the haven't too until Van about now. XL up We many provided details

this back in XXXX. bit started to development the to program, which I'd take a So like about opportunity little tell you more

traditional IV The last-mile OEM. Class size typically XL is this specifically vehicle be a for category to are Van designed manufactured in by commercial delivery. large automotive too Vehicles

we solutions L from XL start higher on high As Because van of our Arrival The in of to a XL a complete class in complexity will vehicle The a vehicle of design. a manufacturer. Van, be as the the supplying as the in vehicle Bicester higher engineering vehicles head through Van using result, vast and majority factory. built OEM an components X-stage this finished for results then make we directly finished manufacturing prices are prices the had opportunity engineering from correspondingly second-stage and this carryover chassis high offer process to this the margin. is sizable a segment the that relatively

Bicester but L XL of obviously year. for long almost lead the L the well on systems Van. We've obviously made advanced, Van the based from system carried in for is of different design from of over. control solutions also over some parts and QX anticipate and Similarly, to we vehicles the electrical Van, the sizes, improvements were chassis concepts Although components structure, in interior, starting our and are learning all were closures the this release carried low-voltage engineering body some

in XL we've As capital and installation supplier to order tooling the specific will previously, program Charlotte to the in production the further complete and Van the of equipment factory. required invest said in procurement be

our up stage factory in However, will to the able volume. we we manufacturing be flexibility of with production ramp investment approach, the as the

well are have lessons layouts and advanced learned incorporated Our from Charlotte Bicester the the for factory. factory

production even significantly per continue competitive to method our believe to most volumes offers traditional maintaining that lower with than plan. a cost thereby CapEx efficient match capacity way assembly We unit at manufacturing the demand,

production by August more year to processes and vans AMRs. end on public further further for of work the XL investment we with Bicester additional develop components. the used then by XXX,XXX purpose vans this and designs to these The securing proprietary the in accumulate than validate to of kilometers road will factory, XX Arrival's our year. team the automated the launch, these engineering of integrate While mileage of be be These building will company's is assembly builds we

an mileage preproduction next well and XL Van the this Given of any the Van to van opportunity the in issues sharing identify road these months. coming validation on vehicles We're the commonality public between to provide Bicester, XL building tests additional builds built componentry forward more high updates and looking L in will year. before

over our the And call I'll to hand for and results that, John with financial outlook.

period. the fourth the the put we recap few U.S. of to Mike. I capital XXXX the we a and and to the to ensure this by late business during program Between initiatives the taken has Mike. liquidity company the place want have run many to quarter you, Thank need we vehicle raise that described now, in steps into fund XXXX first of

additional the business per than First, cost million fund we investment reduce to control company's the $XX the which more cost and significantly further size quarter, of launched burn to initiatives to required reduction year. no this cash reduces

a number will through of achieve initiatives. target We this

time, majority restructuring of reduction workforce Through than process by simplifying real less will into legal workforce and primarily structure XX% locations in the XXXX. the a At in the Charlotte are footprint. the now four XL entity our Van focused end and in the are that estate reducing our March. employees process, the of in We our result is we global production bringing same finalizing is on further late XXX of in of our

sites. number a exited leased already have We of

and cost headcount including commitments, in all new hiring restrictions addition to have purchase also which on implemented spending We control approval. all freeze, measures reductions, a require which include the stringent my freeze a

some We have half settled. restructuring costs this cash rate quarterly second burn expect been achieve to legacy by XXXX, of and commitments the once

bonds reducing to company of due convertible XX%. almost secured million from million by capital Antara agreed Antara. load in $XX for the has our our XXXX Second, equity, $XXX.X commitment debt also exchange a

will to an million debt announcing to Westwood We And today, additional and arise. provides $XXX as liquidity we they Management, with committed to consider of opportunities which finally, capital. reduce equity up line financing are continue raise Capital

There want today. I are two to discuss announcements additional

the Shareholders will a reduction company and The to a will more shares. announced EGM split and mid-April with $X. of notice par and reverse allow expected, A take a outcome trading General well an a EGM Markets calling of stock First, par stock given Extraordinary to begin place we compliance week. the in $X Meeting the trading $X.XX. with vote no Global above be X, our regain receiving Arrival of of split April a will the above NASDAQ proposed reverse on will satisfactory vote shares that of It shareholders begin value than on is by this value convening

the factory the $XXX on of we Charlotte provide our corporate the in an supplier XL general production fund we months. capital Secondly, purposes. exploring prototyping, details in will to million the for meet today start the target in million To investors start million late are of year Van in XL and $XXX in company factory, reaching out announcing potential the next will I coming and Charlotte working program to capital the $XXX in need more options an to investment. to production year. effort strategic The be fund raise process this in to investments to financial of include installation want fund approximately will activities of capital of launch, million procurement XXXX, and the U.S. of production effort to for raise a the raise to our equipment and following strategic range up date tooling, This $XXX

driving funding CapEx planned to no XL Charlotte The capital There raised. start-up is specific outlook. activities our next year. is are to until program Turning production to in dedicated this related

of of related the program half is We and running achieve million second facilities. quarterly cost cash Microfactory costs comprised The spend our burn the personnel and $XX processes functions will $XX million vehicle by and the to our support rate primarily of XXXX.

inflation the this the of working following required believe require over industry optimize to result, design $XXX,XXX vehicles. provides U.S. improve to which ASP and of high XL significant in we The complete tailwinds purchasers additional due of With resources sufficient incentives to And continue in XL meaningful position, commercial initiatives capital the the business Van expect Reduction and margins. fund capital expected an available to Van liquidity with a believe will as and to an of profile to flow the have the the We to L product and applying product for we In additional into is electric for and Act, is XXXX production. summary, has late There Charlotte in ramped. we the are capital, production the without reasons. cash we XL margin XXXX. from we Bicester, once attractive be development breakeven production XL in we our development while are the achieve to lessons liquidity Van able start the fully investments

call back Igor turn for comments. closing now will I to the

a an increase raising was deliver on the the to business promises and XL cash the which and driving provide attributes for upon funding a active focused to and our the know foundation priority including efficiency past, to quarter we perspective. milestones We had in focused penetration fourth on steps the has placing product, organization, closing, senior the attractive flow laser liquidity taking quarter Van program. while the very to failed team management market on are proactively run from in In and Board

through confidence are execution for committed steps this the that we'll XXX% confidence. already amount winning to of and are It's the up in back delivery. business back organization the we taking our achieved, the and believe plan are streamlined that set that We have that we we mean now build Arrival significant new

Van road we now investment another our optimistic for we liquidity run the put to business Since in the are strengthen are hand the have we to the UK, XL we case and that vans demonstrate on can the operations on XX efforts. able

appreciative and suppliers, establish on We in And also support shareholders a from our I'm and responsibility from employees for I've and Arrival's support the of have great as taken as bondholders I've time and continued Board patients trust foundation Arrival history. appreciated personally the year. received we the critical at the the market, XXXX the many this

we move Thank to you. And with that, Q&A. will

Osborne question And Instructions] Jeff Cowen. first from at [Operator our comes TD

about moving Westwood A couple to established that wondering sit $XXX and on to that's up to you my here of the only end, liquidity business, get late a which million But was through. proceeds should the stated lot the run on with pieces Antara see. I financing great you equity to also into the is 'XX.

those you Westwood So sort timing I could flows, cash the of was be of walk wondering if would particular, the component in through helpful?

Yes.

So commitment. June expect of million is second XX. so executed $XX half and $XX the first transaction, the this Antara before of million do first year. that already we disclosed half the hit We Antara of of this -- of in we million that That previously upon the year, the $XX end capital or second on signing to committed before

about But of access think type the capital that for the going share we month because it have is, of does to to liquidity raise that's is it be you us can the us to markets, good does where way determined provide product business. by market Westwood any very and the in provide Jeff, Westwood, the product the volumes to amount price. On capital the it's a and given

on product how milestones this we our that. I certainly on as what that the as provided vans, will to is rather, to don't more would get time, capital expect we've It's laid fulsome And the of hope to say over we've ELOC It's capital a of honestly raise it capital us. some we and why raising want year very program, we building that start now can we've more have. guidance course, conservative so around a we for product. getting on taken meaningful but much we will a And initiatives as vehicle that become out we backstop, miles right start specific product well. more What have. for view meaningful under the rely the a good execute a become of That's particularly that our is, we the that

it. Got

if about smaller Mike it XX market, of versus you maybe Just U.S. might end. U.S. maybe market fit Bicester for to produce to whereas a help on the selected -- XL details wondering XX Van U.S. that can L five the in in or is Europe? my you maybe there the something have timeline. unique XL on why Van the couple for was the but a been Is accelerate provide van others not more why and I more right to the number you was the conducive production great

Yes, XL common here that absolutely, in in primary the of Jeff. Van it's America. It's The is common And North you all not hit reasons. size on very a very of one at Europe.

similar So is or around you your vans of size might Van rolling FedEx UPS in in large neighborhood. to the XL see sort the

in on but with the especially so and smaller one they're covered we'll competition, talked Van, the that opportunity little product is on not we at van, as that America. vans to important the And And XL in about with we saw become segment L continuing did that Van higher bring those. process which vehicle with North pictures background to given similar very the behind prices similar in first have like that's are development. you side, with the the segment UK can in the us, is when the Van XL and And look the Van us honestly, the the the that with the I relatively the and the all we rationale where and mean, the the builds the advantages, and just we the bring side. the behind the IRA we development we XX L we process on feel of

takes Bicester, with builds, be So types, can Charlotte of integration because in But can takes with of I'm when the do the because all to lot which work. we high once we validation vans and some and development processes these time the builds the proprietary And it we'll then in And the those getting use are use it's that at side, of end to it's the months it mileage the commonality getting Arrival. of mileage, using in fleet information. valuable that far start AMRs, interested further production develop van extremely of we have of number Van. completing product a accumulate vehicles there, that the some on our next the valuable including between year of two start durability production but sort so ahead we especially to XL a of in

So production going to builds, L to a benefit huge as think, us I of forward next XL we are these be the start year. vans look to

a I'd Jeff, And comments just couple to on make to that. follow of

part XL down, of in reason in of as little on looked pre-recorded the for comments need invest $XXX hard into tool I But prototyping as than program. needed for we $XXX have to if it investment the it for we bit XL break First that for Microfactory all, invest required talked raise start I and well is we what the that get about program. lower complete of our to needed million the that as product, bit we a to about think million actually product the of the would production L a the Van. at today the really

able install we in ship we'll the So U.S. to to of CapEx to and have that we're in over Bicester, that be the it Charlotte. reuse some going

had bit different. than of lower the to the about minimizes that investment we volumes for some this the due L talked that's impact The that there. previously a the what tooling be and for Van, product fact So is will

it's volume product, has it very but So a lower high margin. a very,

just of at next-generation much van capital dynamics think a in and looked this It a up, bring it giving in smaller it that the we investment, gives as is the very so required of less us factors. first product attractive delivery investment the the product, was to it margin the case example, and carries And on attractive for a the that's given for U.S. opportunity. lower not size, XL a combination We're to at volumes, market most we market U.S., the

you Got for to it. here role Look last one your in Maybe Igor. new one with here. forward working

employees the mentioned left, X,XXX at if software to I'm what end XXX the from do to pitch bucket great sub-XXX what around here which think peak you hitting curious I'm their away that you are the of hitting ago years the by locations. that X.X like was think that what were is? relates XXX Are how about just of to see Microfactory so or I to March, that so burn itself? the cash you be in employees migrating they're main think a with is size used on? as year, remaining, And mentioned curious, that the day-to-day four sort of I they're how And focused employees. You it function just are target, also the John

could you are, would helpful? where share If that be those

Jeff, for this Yes, you question. thank

-- biggest about I So five split internally key is talent. programs. we the buckets we the of the this have The majority XX% vast one here, And and mean, vehicle our into basically on majority And is thinking team small right future a also Van. for is Arrival, products that very but this team. XL we small now are about very, right a now focusing have very

I the improve our as components, components. choose our third-party but on group of optimize second software mean that -- is that strategy to who I largest, integrate integrate together assumes this components. the provides referred the will some we allow new and technology only in-house on not of may we and a when those have vehicles. software that us continuous the continuous and development The integration we developing to components And of cost our our components also That mean are to provide that kind continuous team elements. hardware or integration actually we previously

This sales XX% And entire robotics of focus equipment. with have will about continue call we to technology our and assembly for on other of new factoring. or also integration the we team talent. development This of and third, method robo software the is software what

We requirements and have proper a need talent run and legal, a finance, perspectives. we XX% because continue company, also to other a about of support the public from function we in central be and all business

in we have about finally, XX% digital IT. And

Here, we to would for optimization. got some a updated I also, mean not a them strategic say, decision I put hold, several to mean, business we on And additional have from plan. perspective, strategy products our but on put made a stop completely, while and reflect I hold them on to

mean, I current basically, current allocated. that XXX the almost So -- how people are

Jeff, large locations, continues a team location. we our the on the XL And to UK Obviously, the significant product. U.S., working have largest it's be development the

is Georgia. and technology based in UK Our team the primarily

for robotics as talent we is in a location So And very good us Germany. well. Georgia have

So are when of locations, kind the we focus locations four those reference on. four I you to primary want

obviously given to that, we've not In would up. say, I addition

you referenced method. our production think I

manufacturing the largely unique flexible And factory low is of will -- method the itself is on advantage is in in method using prior and what's Charlotte our that's driven. we've be referenced production as the many software-defined to as that the still really that this. fact, our software method factory a and calls about In manufacturing that core is we method CapEx Arrival,

that say I we in I the And a and like last are managed we we've to we to will in redundancy also success. despite Yes. that likely pretty Arrival’s and two that I keep add vehicle IT. all programs managed significant keep key mean would went in crucial to that for would components areas talent robofacturing months, and and talented digital key through

to everyone call. to may for conclude All right. want This that, disconnect. And you attending. we now conference with is And today's going thank