Arrival (ARVLF) 15 May 232023 Q1 Earnings call transcript

Call starts abruptly…

…to discuss Arrival's first quarter 2023 business update. I'm Annie Wechter, Director of Investor Relations. And today, we have with us Igor Torgov, Arrival Group CEO; Mike Ableson, CEO of North America; and John Wozniak, CFO.

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

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

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

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

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

had other cost including supplier quarterly reduced our and you, excludes is legacy the plan, costs. obligations the for the deliver optimization good us we Thank have and settlement spend, in Annie, we significantly delivery for and evening, QX, for base of Van. regular through our In which target U.S. XL planned to everyone. X purpose-built vehicle the our business which afternoon a Class which organization the market These to focus call allowed XXXX, restructuring on initiatives actions nearing quarter, we

too last be commercial fleets. Van we designed a we automotive to in Class a mile for our a business that I and you are size Van. focused OEM. category Vehicles believe have by XL is would to delivery vehicle typically this XL like remind large X specifically manufactured traditional around plan clear The compelling

vehicles As finished manufacturing. is a an a result, chassis a OEM vast built that using second as complete then stage of through in this vehicle are majority class the

qualifies for by for a making a has shares to up high IRA of operators. and $XX,XXX, also strong fleet commonality Van tax L it high a adoption our contender margin U.S. certified van European profile credit level XL ultimately Our with very

a available the During senior quarter, to automotive experience, as with expertise well vehicle leadership in and access of and chain, Capital as combination supply running and Acquisition business five. and customers we leadership industrial a combination the capital. delivery the the Kensington's managing purpose-built Class adds announced to XL building Corp Arrival's decades last manufacturing a company and meaningful should facilities public capital of provide mile in and amount for The deploying program. bring validates U.S. vehicle X strategy to Kensington market

partnering to our with to Kensington goals. forward looking production are meet We

forward design. to testing, to XL executing planned it this XX Van All Van L the our Our Charlotte focus our with which and merger mileage Vans and next manufacturing the going accumulating year. road and year validate include milestones, operational design XL XXX,XXX inform continuing method when efforts manufacturing through for enters in closing and finalizing help is will Bicester, and approve in product these on kilometers producing in of our our Kensington production

are progressing we achieving it Mike toward how to hand elaborate milestones. to now these I'll on over

develop Thanks, several parts running assembly for both carry Igor. accumulate our everyone, remind AMRs completely assembly stages cell. vehicle. three process. we the building well. to with of are the van and vehicles In the and The vehicles vehicle we're automatically completed progressing test these a Bicester in To process five XX manufacturing our builds to We've Bicester vehicles integrate miles further build additional have to have further then our body processes and of now the integrated and

experience using manufacturing XL similar the in to assembly year. will we'll for throughput Bicester the design Bicester enormous next Because stages. for have nearing we're factory we're the process an use what Charlotte date, development in Charlotte very To our in of the XX% benefit is of Van some our

advanced mileage so with year. the our Van racking from XXX,XXX far goal fleet, road of of the L We've XX,XXX our kilometers kilometers up the by accumulation, end also accumulating over

vans hours program say roads the on driven operating the for multiple every specification. Arrival happy program. Due I'm and confidence to vans employees, solutions, almost the and public XL continuing improve mileage engineering this being that for day components common reliably to are Our to of reuse our are to by accumulation and is

vehicle On the quarter. for XL next our structural itself of release long preparation simulation and Van in of completed fourth analysis parts program we've round lead

better our future. commercially components As development especially we with more say available developing a and and may reduces high cost, commercially risk. that cost. available component components tooling evaluate further we've present strategy decided in-house material investment case, have program a the to We'll the around than systems in program business components, the those alternative XL program Using for specific

summary. I'll my John? our now turn John concludes That to to update. financial it over provide

required priorities capital market the operate our business this to funds are late on which sufficient our million $XX liquidity the this to bring and million for a raise Mike. Van $XX to from Thanks XL restructuring costs year. hand. initiatives million and receipt Antara from first I of cash in outlined would legacy into The position comment supplier March, with ended year, to In use change our cash $XX to cash to approximately year. related XXXX to next payments. the we improve raise $XXX for We million QX of of March on and of like included

transaction closing a business The approval. million entered Acquisition with of April, to subject business Corp. Capital the In combination V, Kensington remains to access redemptions. shareholder us combination into which to provides $XXX agreement up subject we upon of

annual addition, year Form working ended report the on XX, for we fiscal diligently XX-F complete are In to our December XXXX.

bring our and are summary, necessary goals. plan believe production In capital to to business our meet the we is sound working XXXX diligently we

closing is remains priority focused and Kensington, the on leadership top with happen. entire that transaction Our making our team

confident the we we market. succeed will and IP, have revolutionary that our of these challenging from partners. are emerge those improving in But leaders the discipline, one the our In we will rapidly on it will as of production. and the and head know-how great new perseverance, conditions growing a are purpose-built that to Arrival's we bring challenges the require talent, market. We believe still commercial And deal method market to we optimistic support meet vans very EV of

us to and investment most partners, customers, years over We our to who want of every Arrival employees thank root our step shareholders, suppliers, have loyal the the importantly way. to stayed continue for and

And now Q&A. can with that, move we to

two questions here have from Cowen. we So Jeff from Osborne

thus has you take or readiness to design expand and the first the What been Excel is left Mike far do what you question? that can made The want of program? Igor, do? on technical question, progress to

I think position John, to this answer better a Yes, question. Mike in

as on of said in completed lead through then where next fourth lead fact some getting lead which parts the medium well longest the in release Hey, we've parts the analysis lead release Short much. of will design remaining production very the long parts be the tooling program. thanks parts quarter. the the mentioned, that our the is right, to the are my in of later our on digital Long will and rest of And the the stagger year. we And iteration done simulations refers year. these are intent just for designs times ready to are are I comments, the These based we're XL All along. Van. I product, as

next We around of to be pre-production at year in early end expect Charlotte year the production to testing doing leading next building course year preparation middle vehicles Charlotte. next start physical for of in the of in

testing we're that going lot we're progress. that with what L on we're We're confidence the the Van Van doing be in L And a have we good doing all Vans Bicester, XL the around So schedule. because of that successful. we we, of is to built making again,

Okay, thank you Mike.

the this Can thoughts to give XL answer another Jeff should And Osborn elevated might the on you close? about forward move ability redemptions Cowen. we risk should please Charlotte? you your transaction think think from on John your we and have think I when question. from ball program of How you question and the Kensington the us

we that Thank structured Class, incentives rate North the the what transaction want believe to this that would you for thanks not premium redemption is Investment shareholders, Obviously, I have Arrival the to I the we've to under risk. also carries and the is second for XL Igor, to significant redemption building business the Sure. I'm mentioned case, which provide first but the in part say for Reduction the we predict don't Kensington the a only the which question question. as vehicle going transaction, significant of Jeff purpose-built America take Act. a around market

case compelling. we So that business is believe

months of a our amount capital investor the investment we'll business, we will the is on transaction We believe to allow team believe a this that able compelling And significant to investing the we'll to the Kensington have number bring with which XL to to and in us be to sell start our base. program. that of return to,

within close number SEC respect With this possible a process, as like that and as Kensington the get going team that there's the review Jeff, with impact as we're of as you transaction can. control, factors the moving we work obviously know, quickly quickly our timing as done to but timing, to aren't the to diligently we're to

couple of As SEC you take the can know, a review process months.

XX to well days vote and We when the schedule process typically complete. SEC also which have from is have shareholder that's about review we the as

to So as months going question. we as anywhere can And can. a does call I closed normal we as get hard Thanks we're it quickly would or three to for merger this the work more. take from, just as process

Yes.

Okay, have any Annie other do we questions?

looks further questions. like have we It no Okay.

we any like have questions. other looks it Yes, not do

thank you So and call attending for this Goodbye. thank you. earnings yes, all