Arrival SA (ARVL) 2023 Q1 法說會逐字稿

Good afternoon. Thank you all for joining us today 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. These statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs, assumptions and the information currently available to us.

下午好。感謝大家今天加入我們，討論 Arrival 2023 年第一季度的業務更新。我是投資者關係總監 Annie Wechter。今天，我們有 Arrival Group 首席執行官 Igor Torgov；北美區首席執行官 Mike Ableson；和首席財務官 John Wozniak。在我們開始之前，我想提醒大家，今天在電話會議上發表的某些聲明是前瞻性聲明。這些陳述受各種風險和不確定性的影響，反映了我們基於我們的信念、假設和我們目前可獲得的信息的當前預期。

Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of these factors and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our filings with the SEC and our first quarter 2023 business update issued today on the 15th of May.

儘管我們認為這些預期是合理的，但我們沒有義務修改任何聲明以反映此次電話會議後發生的變化。在我們提交給美國證券交易委員會的文件和我們今天於 5 月 15 日發布的 2023 年第一季度業務更新中，對可能導致實際結果與這些前瞻性陳述產生重大差異的這些因素和其他風險的描述進行了更詳細的討論。

During the call, we also refer to certain non-IFRS financial measures. This should be considered in addition to and not as a substitute for or in isolation from our IFRS results. For further information, please refer to our Investor Relations website at investors.arrival.com. And with that in mind, I'll now turn it over to Igor.

在電話會議期間，我們還提到了某些非 IFRS 財務指標。這應該被認為是對我們 IFRS 結果的補充，而不是替代或孤立於我們的 IFRS 結果。如需更多信息，請訪問我們的投資者關係網站 investors.arrival.com。考慮到這一點，我現在將其交給 Igor。

Thank you, Annie, and good afternoon and evening, everyone. In Q1, we significantly reduced our cost base through the optimization initiatives we had planned for the quarter, including nearing our target for regular quarterly spend, which excludes settlement of legacy supplier obligations and other restructuring costs. These actions have allowed us to focus the organization on our business plan, which is to deliver a purpose-built Class 4 delivery vehicle for the U.S. market in 2024, which we call the XL Van.

謝謝你，安妮，大家下午好，晚上好。在第一季度，我們通過本季度計劃的優化舉措顯著降低了成本基礎，包括接近我們的定期季度支出目標，其中不包括清算遺留供應商義務和其他重組成本。這些行動使我們能夠將組織重點放在我們的業務計劃上，即在 2024 年為美國市場交付專用的 4 級運載工具，我們稱之為 XL Van。

I would like to remind you that we believe we have a clear and compelling business plan focused around our XL Van. The XL Van is a Class 4 commercial vehicle designed specifically for last-mile delivery fleets. Vehicles in this size category are typically too large to be manufactured by traditional automotive OEMs. As a result, the vast majority of vehicles in this class are built using an OEM chassis that is then finished as a complete vehicle through a second stage manufacturing. Our XL Van also shares a high level of commonality with our certified European L Van has a high-margin profile and qualifies for IRA tax credit up to $40,000, making it ultimately a very strong contender for adoption by U.S. fleet operators.

我想提醒您，我們相信我們有一個明確且令人信服的商業計劃，重點是我們的 XL Van。 XL Van 是專為最後一英里交付車隊設計的 4 級商用車。這種尺寸類別的車輛通常太大而無法由傳統的汽車原始設備製造商製造。因此，此類車輛中的絕大多數都是使用 OEM 底盤製造的，然後通過第二階段製造完成整車。我們的 XL Van 也與我們經過認證的歐洲 L Van 具有很高的共性，具有高利潤率並有資格獲得高達 40,000 美元的 IRA 稅收抵免，使其最終成為美國車隊運營商採用的非常有力的競爭者。

During the quarter, we announced a business combination with Kensington Capital Acquisition Corp. V. Kensington's senior leadership adds decades of automotive and industrial experience as well as access to available customers and supply chain, expertise in building and running vehicle manufacturing facilities and public company leadership in managing and deploying capital. The combination validates Arrival's strategy to bring a purpose-built Class 4 last-mile delivery vehicle to the U.S. market and should provide a meaningful amount of capital for the XL program.

在本季度，我們宣布與 Kensington Capital Acquisition Corp. V. 進行業務合併。Kensington 的高級領導層增加了數十年的汽車和工業經驗，以及接觸現有客戶和供應鏈的機會、在建設和運營汽車製造設施方面的專業知識以及上市公司領導層在管理和部署資本方面。該組合驗證了 Arrival 將專用 4 級最後一英里運載工具引入美國市場的戰略，並應為 XL 計劃提供大量資金。

We are looking forward to partnering with Kensington to meet our production goals. Our focus going forward this year is on closing the merger with Kensington and executing our operational milestones, which include: continuing to validate our product and manufacturing method through producing 10 L Vans in Bicester, accumulating 250,000 kilometers in road mileage testing and finalizing our XL Van design. All these efforts will help to inform and approve the design and manufacturing of our XL Van when it enters production in Charlotte planned for next year. I will now hand it over to Mike to elaborate on how we are progressing towards achieving these milestones.

我們期待與 Kensington 合作以實現我們的生產目標。我們今年的重點是完成與 Kensington 的合併並執行我們的運營里程碑，其中包括：通過在比斯特生產 10 L 貨車繼續驗證我們的產品和製造方法，累積 250,000 公里的公路里程測試並完成我們的 XL 貨車設計。當 XL Van 計劃於明年在夏洛特投入生產時，所有這些努力都將有助於告知和批准我們的 XL Van 的設計和製造。我現在將把它交給邁克，詳細說明我們在實現這些里程碑方面取得的進展。

Thanks, Igor. The 10 Bicester van builds are progressing well. We've completed the build of 3 vehicles and have a further 5 vehicles in process. To remind everyone, we're building these vehicles to further develop and integrate our manufacturing processes and to then accumulate additional test miles for the vehicle. In Bicester, we now have several stages of our body assembly process running completely automatically with our AMRs integrated to carry both parts and the vehicle to the assembly cell. To date, we're nearing 50% of our design throughput in some of the assembly stages. Because the manufacturing process we're using in Bicester is very similar to what we use in Charlotte, the XL Van, our Bicester development experience will have an enormous benefit for the Charlotte factory next year.

謝謝，伊戈爾。 10 輛比斯特麵包車的建造進展順利。我們已經完成了 3 輛車的建造，還有 5 輛車正在製作中。提醒大家，我們製造這些車輛是為了進一步開發和整合我們的製造流程，然後為車輛積累額外的測試里程。在比斯特，我們現在有幾個階段的車身裝配過程是完全自動運行的，我們的 AMR 集成在一起，可以將零件和車輛運送到裝配單元。迄今為止，我們在某些裝配階段的設計吞吐量已接近 50%。因為我們在比斯特使用的製造過程與我們在夏洛特 XL 貨車中使用的製造過程非常相似，我們在比斯特的開發經驗將在明年為夏洛特工廠帶來巨大的好處。

We've also advanced our road mileage accumulation, racking up 90,000 kilometers so far from our L Van fleet. With the goal of accumulating over 250,000 kilometers by the end of the year. Our vans are being driven for multiple hours for almost every day on public roads by Arrival employees and I'm happy to say that the vans are operating reliably and to specification. Due to the reuse of common components and engineering solutions, this mileage accumulation program is continuing to improve our confidence for the XL program. On the XL Van program itself, we completed our fourth round of vehicle simulation and analysis in preparation for release of long-lead structural parts next quarter.

我們還提高了道路里程積累，到目前為止，我們的 L Van 車隊已累計行駛了 90,000 公里。目標是到年底累計超25萬公里。 Arrival 員工幾乎每天都在公共道路上駕駛我們的麵包車數小時，我很高興地說這些麵包車運行可靠且符合規格。由於通用部件和工程解決方案的重複使用，這個里程積累計劃正在繼續提高我們對 XL 計劃的信心。在 XL Van 計劃本身，我們完成了第四輪車輛模擬和分析，為下個季度發布長周期結構件做準備。

As we further evaluate the XL program business case, we've decided that commercially available systems may present a better alternative than developing and tooling in-house components, especially for those components with a high material cost. Using commercially available components reduces our development cost, program investment and program risk. We'll have more to say around the specific component strategy in the future. That concludes my summary. I'll now turn it over to John to provide our financial update. John?

隨著我們進一步評估 XL 計劃業務案例，我們認為商用系統可能是比開發和加工內部組件更好的選擇，尤其是對於那些材料成本高的組件。使用市售組件可降低我們的開發成本、程序投資和程序風險。我們將在未來圍繞具體的組件策略有更多的話要說。我的總結到此結束。我現在將其轉交給 John 以提供我們的財務更新。約翰？

Thanks, Mike. In March, we outlined our priorities for this year, which are to raise the capital required to operate the business into late 2023 and to raise sufficient funds to bring the XL Van to market next year. I would first like to comment on our initiatives to improve our liquidity position this year. We ended March with $130 million of cash on hand. The change in cash of $75 million from Q4 included a $25 million receipt from Antara and use of cash of approximately $60 million for restructuring-related costs and legacy supplier payments.

謝謝，邁克。 3 月，我們概述了今年的優先事項，即籌集到 2023 年底運營業務所需的資金，並籌集足夠的資金以在明年將 XL Van 推向市場。我首先想評論一下我們今年改善流動性狀況的舉措。截至 3 月底，我們手頭有 1.3 億美元現金。與第四季度相比 7500 萬美元的現金變化包括來自 Antara 的 2500 萬美元收據以及約 6000 萬美元的現金用於重組相關成本和遺留供應商付款。

In April, we entered into a business combination agreement with Kensington Capital Acquisition Corp. V, which provides us access of up to $283 million upon closing of the transaction, subject to redemptions. The business combination remains subject to shareholder approval. In addition, we are working diligently to complete our annual report on Form 20-F for the fiscal year ended December 31, 2022. In summary, we believe our business plan is sound, and we are working diligently to bring the necessary capital to meet our 2024 production goals.

4 月，我們與 Kensington Capital Acquisition Corp. V 簽訂了一項業務合併協議，該協議在交易結束後為我們提供了高達 2.83 億美元的資金，但需贖回。企業合併仍有待股東批准。此外，我們正在努力完成截至 2022 年 12 月 31 日止財政年度的 20-F 表格年度報告。總而言之，我們相信我們的業務計劃是合理的，我們正在努力工作以提供必要的資金以滿足我們的 2024 年生產目標。

Our top priority remains closing our transaction with Kensington and the entire leadership team is focused on making that happen. We are still very optimistic that we have the IP, the talent and the know-how to bring Arrival's purpose-built vans to market, and we believe we will succeed improving our revolutionary new method of production. In these challenging market conditions, it will require a great deal of discipline, perseverance and support from our partners but we are confident that we will meet those challenges head on and emerge as one of the leaders in the rapidly growing commercial EV market.

我們的首要任務仍然是完成與 Kensington 的交易，整個領導團隊都致力於實現這一目標。我們仍然非常樂觀地認為，我們擁有將 Arrival 的專用貨車推向市場的知識產權、人才和專業知識，我們相信我們將成功改進我們革命性的新生產方法。在這些充滿挑戰的市場條件下，需要我們合作夥伴的高度紀律、毅力和支持，但我們相信我們將迎接這些挑戰，並成為快速增長的商用電動汽車市場的領導者之一。

We want to thank our shareholders, investment partners, customers, suppliers and most importantly, our employees who have stayed loyal to Arrival over the years and continue to root for us every step of the way. And with that, we can move now to Q&A.

我們要感謝我們的股東、投資夥伴、客戶、供應商，最重要的是感謝多年來一直忠於 Arrival 並繼續支持我們的每一步的員工。有了這些，我們現在可以進入問答環節。

So we have 2 questions here from Jeff Osborne from Cowen. The first question, Can you expand on the design readiness of the XL program? What technical progress has been made thus far and what is left to do? Mike or Igor, do you want to take that question?

所以我們有來自 Cowen 的 Jeff Osborne 的 2 個問題。第一個問題，您能否擴展 XL 程序的設計準備情況？迄今為止取得了哪些技術進步，還有哪些工作要做？邁克或伊戈爾，你想回答這個問題嗎？

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

是的，約翰，我認為邁克，可以更好地回答這個問題。

All right. Thanks very much. As I said in my comments, we've just completed our fourth analysis iteration on the XL Van. These are simulations that are done based on the digital design of the product, which is well along and as I mentioned, we're getting ready to release our production intent designs for long lead parts next quarter.

好的。非常感謝。正如我在評論中所說，我們剛剛完成了對 XL Van 的第四次分析迭代。這些是根據產品的數字設計完成的模擬，這很好，正如我提到的，我們正準備在下個季度發布我們的長鉛零件的生產意圖設計。

Long lead refers to the fact these are parts where the tooling times are some of the longest in the program. And then we will stagger the release of the remaining parts through the rest of the year, shortly and medium lead parts will be later in the year. We expect to be doing physical testing early next year in preparation for building preproduction vehicles in Charlotte around the middle of next year, leading, of course, to start our production at the end of next year in Charlotte. So we're on schedule. We're making good progress. And again, because of all the testing that we're doing around the L Van that we -- the L Vans we built in Bicester we have a lot of confidence that what we're doing with XL Van is going to be successful.

長周期指的是這些部分的加工時間在程序中是最長的。然後我們將在今年剩餘時間錯開發布剩餘部分，短期和中期領先部分將在今年晚些時候發布。我們預計明年初進行物理測試，為明年年中左右在夏洛特製造試生產車輛做準備，當然，我們會在明年年底在夏洛特開始生產。所以我們如期而至。我們正在取得良好進展。再一次，由於我們圍繞 L Van 所做的所有測試——我們在比斯特建造的 L Vans，我們非常有信心我們對 XL Van 所做的事情將會成功。

Okay. Thank you, Mike. And we have another question from Jeff Osborne from Cowen. Can you please give us your thoughts on when you think the Kensington transaction might close? How should we think about the risk of elevated redemptions and your ability to move the ball forward on the XL program and (inaudible) Charlotte.

好的。謝謝你，邁克。我們還有來自 Cowen 的 Jeff Osborne 提出的另一個問題。您能否告訴我們您認為 Kensington 交易何時可能完成的想法？我們應該如何考慮提高贖回的風險以及您在 XL 計劃和（聽不清）夏洛特上推動球前進的能力。

I think, John, you should answer this question.

我認為，約翰，你應該回答這個問題。

Sure. Thank you, Igor, and thanks, Jeff, for the question. I'm going to take the second part of that question first. around the redemption risk. Obviously, I don't want to predict the redemption rate for this transaction. But what I would say is -- not only have we structured the transaction to provide a significant premium to the Kensington shareholders. We also believe that the Arrival business case, which is building a purpose-built vehicle for the North America market in the XL class, which as we've mentioned, carries significant incentives under the Investment Reduction Act. So we believe that business case is compelling. We believe that the return on investment is compelling. And with the Kensington team, we'll have a number of months to sell this transaction to our investor base, and we believe that we will be able to bring a significant amount of capital to the business.

當然。謝謝 Igor，也謝謝 Jeff 提出的問題。我將首先回答該問題的第二部分。圍繞贖回風險。顯然，我不想預測這筆交易的贖回率。但我要說的是——我們不僅將交易結構化為 Kensington 股東提供可觀的溢價。我們還認為，正如我們所提到的，Arrival 商業案例正在為北美市場製造 XL 級專用車輛，根據《投資減少法案》，該案例具有重大激勵措施。因此，我們認為商業案例很有說服力。我們相信投資回報是令人信服的。與 Kensington 團隊一起，我們將有幾個月的時間將這筆交易出售給我們的投資者群，我們相信我們將能夠為這項業務帶來大量資金。

Which will allow us to start investing in the XL program. With respect to the timing, obviously, Jeff, as you know, there's a number of factors that impact timing that aren't within our control. Like the SEC review process. But we're moving as quickly as possible to close the transaction, and we're going to work diligently with the Kensington team to get this done as quickly as we can. As you know, the SEC review process can take a couple of months. We also have the shareholder vote, which we have to schedule as well, and that's typically about 30 days from when the SEC review process is complete.

這將使我們能夠開始投資 XL 計劃。關於時間安排，顯然，Jeff，如你所知，有許多影響時間安排的因素不在我們的控制範圍內。就像美國證券交易委員會的審查程序一樣。但我們正在盡快完成交易，我們將與 Kensington 團隊一起努力工作，盡快完成這項工作。如您所知，SEC 審查過程可能需要幾個月的時間。我們還有股東投票，我們也必須安排時間，這通常是 SEC 審查過程完成後大約 30 天。

So a normal merger process does take anywhere from, I would call it, 3 months or more. And we're just going to work as hard as we can to get this closed as quickly as we can. Thanks for the question.

因此，正常的合併過程確實需要 3 個月或更長時間。我們將盡我們所能盡快關閉它。謝謝你的問題。

Okay. And, do we have any other questions?

好的。還有，我們還有其他問題嗎？

Okay. It looks like we have no further questions.

好的。看來我們沒有其他問題了。

Yes. It looks like we do not have any other questions. So thank you all for attending this earnings call and thank you. Goodbye.

是的。看起來我們沒有任何其他問題。因此，感謝大家參加本次財報電話會議，謝謝。再見。