Welcome and thank you for standing by. Welcome to the FREYR Battery Q1 2022 Earnings Call. [Operator Instructions] I will now turn the conference over to you speaker. Please go ahead.

Good morning, good afternoon and good evening. Welcome to FREYR Battery’s first quarter 2022 earnings conference call. With me today on the call are Tom Einar Jensen, our Chief Executive Officer, Jan Arve Haugan, our Chief Operating Officer; and Oscar Brown, our Chief Financial Officer. During today’s call, management may make forward-looking statements about our business. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations. Most of these factors are outside FREYR’s control and are difficult to predict. Additional information about risk factors that could materially affect our business are available in FREYR’s S-1 and annual report on Form 10-K filed with the Securities and Exchange Commission, which are available on the Investor Relations section of our website. With that, I will turn the call over to Tom.

Thank you, Jeff and again, good morning, good afternoon, good evening, everyone dialing in to this first quarterly result of 2022 FREYR’s fourth quarterly results report, since we are in public on the New York Stock Exchange back on July 8, 2021. Just repeating what Jeff has just been through and then moving to Slide 3 today’s agenda. What I am really proud of and find very compelling is that we are here showing you a picture of the dry room in the customer qualification class. Our Chief Operating Officer will come back to the status of our operational progress later today. But today, we will go through some of the commercial developments which continue at accelerating pace, general market backdrop, our augmented value proposition to deliver into an unprecedented decade, the decade of the battery. We will talk about our operations and supply chain. Our new Chief Financial Officer will take you through the financial status of the company. We will focus on the strategic priorities moving forward while we open up for Q&A. We find ourselves in quite challenging environments in difficult times. We obviously reach out to all the people in Ukraine that have a very tough time these days and that is obviously impacting markets all around us. But from a battery producers’ point of view, what this is underlining is the need for an accelerated energy transition. The energy transition requirement is now clearer than ever and batteries form as I have been underlining many times a critically important part of that, not only to decarbonize transportation, but also to decarbonize energy systems globally. And to basically eliminate the need for Russian gas into the European markets, we will need an unprecedented development in renewable energy in Europe, which again will be capitalized to a…

Thanks, Tom and hello to everyone listening to us today on our call. I will start with an update on our operations. And the key message that I have to share with you today is that our teams are making remarkable progress on both the CPP construction and the preconstruction activity on the combined Gigafactory 1 and 2 in Mo i Rana, Norway. As a lot of other industries, we too experienced disadvantages due to COVID-19 situation and of course supply chain disruptions. However, I am pleased to report that the construction of the customer qualification plant or the CQP as we abbreviate it is progressing very close to the schedule. As previously reported, we are expecting to complete the site acceptance test now for the first sample test in the facility in Mo i Rana near year end 2022. Hopefully, many of you have seen the materials we have posted on social media detailing the work that’s been done by our skilled project execution team. Thanks to their effort and the outstanding support they are receiving from our technical staff in Oslo. We are advancing steadily towards factory acceptance testing during the summer and into the fall. Our Gigafactory 1 and 2 team is also making excellent progress in advance of the start of the construction. Groundwork preparations on the site, detailed engineering is largely complete. Indicative roles from the different suppliers of production line equipment are now being analyzed and the structure of frame agreement contracts are being formalized. We intend to present the project plan for final investment decision to the FREYR board during next month. In the interim, the Board has approved additional capital spending to facilitate the long lead time orders on building and infrastructure materials. This is mainly to support and optimize the installation…

Thanks, Jan Arve and hello, everyone, listening today. Since this is the first time I’ve had the privilege of speaking to you at FREYR as the CFO, I thought I’d start by sharing some of my observation as a new joiner to the company. I am very excited to be here at FREYR because of the people, the opportunity and our unique competitive position in the sector was strong secular, not just cyclical tailwinds. After just 5 weeks with the company, I am incredibly impressed with the quality of the people we have in our organization. FREYR has attracted seasoned dynamic leaders and vibrant creative teams around them, driving our execution, our strategy and our business development. I personally believe FREYR is the best position new battery industry player in the market. Less than a year ago, the company brought together the best of Norway in the United States. From Norway, incredible people with both the strong entrepreneurial spirit and deep execution and operational experience and excellence from major projects around the world. The country has a very supportive government, vast natural resources, including abundant cost competitive renewable energy, and a global credibility that’s unmatchable around sustainability in the energy transition. From the U.S., the company enjoys a New York Stock Exchange listing, a substantial U.S. investor base, access to the U.S. capital markets, U.S. technology through MIT spin-off 24M, and its investment by and U.S. joint venture with affiliates of Koch Strategic Partners. When you couple our brilliant people with our growth trajectory and the growth trajectory of the battery market overall and FREYR’s opportunity to develop sustainable competitive advantages from our decarbonization commitment and our technological differentiation, you have a powerful story. FREYR is part of the solution for energy inflation, energy security, and climate change. As excited…

Thank you, Oscar, and thank you Jan Arve. It’s of course easier to be the CEO of FREYR when I have such capable people helping and supporting the development of the company. So to summarize, FREYR’s strategy is built up around three core tenants. These tenants are speed, scale and sustainability. We are committed to deliver and we are delivering on our commitments. Our near-term priorities, is to fund the expansion of our growth trajectory. The capital formation plan is accelerating on multiple paths. Our intention is to prioritize speed and to optimize the cost of capital. Capital is available and it’s deeply supported by Norwegian EU and U.S. governmental support across the capital structure. We are continuing to expand and establish our operations and supply chain. We are starting to look like a battery company. We are raising – we are releasing additional CapEx for the preconstruction of Gigafactory 1 and 2. And we are reaching FID on Gigafactory 1 and 2 in parallel with the proposed LFP capital plans. All of which is going to happen later this year as previously announced. On the commercial side, we have very strong momentum which is continuing to grow on a daily basis. We are focusing on converting our initial conditional offtake agreements to definitive sales agreements and we expect them to exceed 100 gigawatt hours by 2030 and to have them converted later this year. We will secure additional conditional offtake agreements in the ESS and now also in the mobility space with an additional 100 gigawatt hours by 2030, supporting an accelerated development of additional capacity beyond Gigafactory 1 and 2. Finally, we are now seeing very strong traction based on an industrialization partner of choice approach vertically integrated up and downstream in a partnership based way, but also with diversification on technology that we are seeing very strong traction across all market segments, including mobility and EV commitments. We are in dialogue and commercial negotiations where we exceed 200 gigawatt hours spike in yearly offtake potential by 2030 and our ambition is to secure at least 100 gigawatt hours per year of that well before 2030 on an annualized basis, allowing us to unlock further capacity expansion in the geographical regions that we are currently located in and potential others. So with that, I am going to turn it over to Q&A. I thank everyone for your attention. Thank you for your trust and patience. With FREYR, we will continue to look over the horizon, commit to deliver and deliver on our commitments. Back to you, Jeff.

Thanks, operator. I think we can open up the line for questions now.

Thank you. [Operator Instructions] Your first question comes from the line of Jose Asumendi of JPMorgan. Please go ahead.

Hi, Tom. Jose of JPMorgan. Few questions, please. The first one I’d love to hear when we think about your ESS contracts, can you maybe lay out a little bit one of the unique selling points or the reasons why you are winning these contracts? What makes FREYR different to the competitors out there? And then second, second and third, maybe just put the questions together as we try to map a little bit revenues and CapEx on a 5-year perspective and thinking about Slide #5, how do we put together where the revenue projection 4, 5 years out, when do you start getting the revenues into the business? And the second, can you maybe give us a bit of a – notifies your CapEx projection but at 12 o 16 months CapEx projection, so we can model the company a bit better? Thank you.

Thank you, Jose. So, on the first question, why we are progressing and winning contracts? Ultimately, I think that question should be posed to the ones we are winning them with. But I think the way in which we are positioning this clean battery solutions, with localized production and over time decarbonize the localized supply chains is obviously something that is resonating and ultimately a critical component of ensuring decarbonization of the energy systems, 4-hour storage solutions, 2-hour storage solutions, maybe even 8-hour storage solutions are today’s solutions that can be delivered with lithium-ion battery solutions and the 24M technology, where we can produce larger and thicker electrodes, basically reducing the need for additional, let’s call it modules and packs and racks around them. Because we are just building larger energy carrying solutions, obviously allows us to drive down system level cost on the ultimate ESS solution as well. So, this means that it’s a cost competitive, localized solution, which is really driving the interest. In addition, as also mentioned, there is to a certain extent, the EV market is in a way vacuum cleaning the current supply chains of batteries from predominantly the Asian providers, and therefore they are being in a way pushed out a little bit and they want to try to secure additional supply sources. So, those are some of the key points around why we are winning these contracts. We do believe that we will continue to generate a lot of traction in the ESS space. We also do believe that the ESS space is much larger than most people have anticipated so far, for the exact purpose of decarbonizing energy systems. The sun shines when it shines and the wind blows when it blows, but we need to store that energy to basically have…

Thank you.

Thank you. Your next question will come from the line of Maheep Mandloi of Credit Suisse. Please go ahead.

Hey, hi, everyone. Thanks for taking my questions. Just moving quickly, on the technology side, could hear a lot of emphasis on LFP on this call, could you just clarify on that and like on your mix of LFP and nickel manganese batteries like how should we think about that going forward? And in terms of your contracts, also with ESS and potentially that new auto OEM, what those technologies could be for those as well? Thanks.

Yes. Good morning, Maheep. Thank you for the question. So Gigafactory 1 and 2 will predominantly be if not entirely be an LFP-based solution. That is obviously supported by the off-take agreements, where all the ESS players are predominantly focusing on LFP solutions due to the lower cost of that – of that technology and also the inherent characteristics of LFP with lower energy density potentially than NMC, but obviously, with a very long cycle life, but typically you want these ESS solutions to last 20 years plus and therefore having lower energy density and longer cycle life is really, again, very suiting the 24M technology very well. I would like to sort of hurry to mention that our production platform is chemistry agnostic, which means that if we were to get traction, which we are already seeing that we have on NMC and higher nickel content batteries or other sort of capital solutions for that matter, we could rejig one of our production lines too, they basically produce a different capital material. But right now, we have more demand than what we can produce in Gigafactory 1 and 2. So, we will now be accelerating the efforts that we already have ongoing for Gigafactory 3 and 4, the Gigafactory development plants in Finland as well as our joint venture development in the U.S. with Koch Strategic Platforms, which by the way, is also progressing very well. There is very strong interest across the United States for establishing additional Gigafactories through the partnership with FREYR and Koch. And we got an initial 130 parties who were interested in attracting us as a producer. We are now going through a funneling and hydrating, let’s say process around that. And we will come up obviously back to our investors with updates on this when we have a little bit more free to offer. But the long story short, LFP is behind most of, if not all of the offtake agreements that we have announced so far.

Got it. That’s really helpful color. And just in terms of the value for the new 50 gigawatt hours supply agreement, does that click the dollar amount you could kind of talk about or should we expected something similar to the ones we saw with Honeywell in the previous years of this company?

So Maheep, I think, right now the price pressure on batteries is reasonably high and many of the Asian providers have increased their prices quite significantly driven in large part by the increase in lithium prices. Now, our commercial agreements with these players will have pass-through mechanisms in them. So depending on where you are and what sort of underlying prices you are getting for the raw materials that will ultimately impact the price on an ongoing basis of the products that we produce. Generally speaking, we are committing to reduced prices of these products over time as we are continuously increasing and improving the energy density and the general technical characteristics of the batteries we produce. We are also constantly focusing on increasing the overall equipment efficiency, which is a function of yield and uptime in the machinery. And again here, that conversion cost part of the picture is an area where FREYR’s operators and FREYR’s experienced personnel led by Jan Arve will be world leading in terms of reaching as high yield and uptime in our machinery as possible. We come from an industry, many of us in the aluminum industry, where very high OEE is always kind of targeted and the organizational structure and how we are sort of implementing this will basically support getting very high uptime and we believe higher uptime than what is common in the conventional lithium-ion battery space today and the 24M technology being a much simplified production process should also allow us over time to get better and better in producing this. So over time, you should expect the prices to come back to longer term trends of reduction, albeit at a slower reduction pace than what we have seen in the last 10 years. So this is a long way of sort of not answering your question so to speak. But I think you would have to think about long-term trends in pricing. And we are implementing a technology that has a significant cost advantage relative to marginal cost and marginal producer. And as these markets get larger and larger, you would start to see more normal, let’s say, behavior also on the pricing side for more and more standardized products across the different chemistries.

I really appreciate the answer. And I guess, yes, the cost structure just makes it somewhat difficult at this stage. But just like one last question for me, just on the conversion of these conditional agreements, could you just like walk us through like what is kind of required here or what should we look for over here in terms of the agreements with the customers like what could move the needle towards finalizing those agreements?

Well, I mean it’s a normal process, nothing sort of sinister or very complicated about it. It is basically ironing out the specific technical and commercial details and negotiating that in, let’s call it the environment we find ourselves in. These are advancing and getting into closing mode for Honeywell and the global ESS player as mentioned. We will be announcing the conversion of those imminently. And we will start the similar process with the three additional ones immediately. We are already in that process. So, you should expect us to continuously announce additional, let’s call it initial agreements, and then over time, converting them to firm agreements, and then we convert them to firm agreements, of course, more commercial details around the agreements will be communicated. And this is also as mentioned, important, from a project finance point of view. So, of course, our lenders will require this ability on the commercial terms of the agreements that will underpin the development of capacity. And clearly, that is going to be required for that to be unlocked. And we have no reason to believe that we are not going to get there in time for the FID that we have previously communicated.

Really appreciate taking our questions and congratulations on the strong pipeline. Thank you.

Your next question comes from the line of [indiscernible] of Clarkson Securities. Please go ahead.

Good afternoon, guys and first of all, congratulations with the wrapping up the quarter, and, of course, the latest conditional off-take agreements. It was nice to see that you also started touching up on supplies from future Gigafactories. And yes, and I know you have touched upon this on the last question, but could you provide any color on your progress there and what we could expect in the near future and any timeline details that will be great? And my second question is regarding your cash flow guidance from Slide 12 you mentioned that there will be some slight increase in the coming quarter related to ramp up and construction activity. And is there any possibility to get a range there and if not, or if so, with others could be fixed at least in the coming quarters as well. I mean you have it all ramped up in your pipeline, if everything goes as planned. Thanks.

Thanks for that question. And let me take the first one, and then I will have Oscar, take the second one. So, as previously mentioned, 43 gigawatt-hours installed by 2025, 83 gigawatt-hours by 2028 and more than 100 gigawatt-hours by 2030, is what we have previously communicated. We are looking into whether we have an opportunity to accelerate some of that. And once we have sort of done all the math on that, we will obviously update the market accordingly. When it comes to Gigafactory 1 and 2, that’s an 18 gigawatt-hour LFP capacity 8 production lines up at what we labeled the Central [indiscernible], the central sort of area of more industrial parks. As our Chief Operating Officer indicated, we are getting very close to having the technical basis to make the final investment decision. And we will be recommending that to the Board of Directors later this summer. These eight production lines and the all sort of setup, we have also created what we label an idealized eight production lines system, which then forms as a blueprint for additional Gigafactories to be developed. We have also now come quite far in doing the detailed investigation of what we label Gigafactory 3 and 4, which we are targeting to locate right next to the customer qualification plant. So, the idealized footprint can then be localized there. Constantly over time, we will obviously also be improving the production process and implementing new generations of the 24M technology, which basically means increasing the speed of production. So, going from 20 meters to 30 meters to 40 meters per minute, and sort of how we are pushing the raw materials through the system. That of course increases the capacity that we can produce with a given system. If we were on top of that to sort of move from LFP to NMC, the energy density and NMC of course, means that you are getting more watt-hours per kilogram and therefore more kilowatt-hours per production line. So, to actually sort of give very precise guidance on where this is going to be, is a moving target, let’s say. It is not difficult for me to imagine much higher numbers much faster than what we have previously indicated. But that needs to be supported by commercial traction. And it also needs to be supported by of course, getting bankable agreements in place so that we can project finance a large part of that CapEx spend. So, on that note, I am going to hand it over to Oscar to talk about the other question.

Yes. So, I will just point you on the longer out quarters, of course, similarly. But a lot of this has to do with what Tom just mentioned in terms of the timing of some of these decisions and so forth for the out quarters, but for next quarter – for this quarter we are in now. So, in the first quarter, we spent from the balance sheet, $41 million net. And so this quarter, as I mentioned, it will be a bit higher so directionally, again, very hard to target because what changes in working capital, we have some small grants that we expect to come in, and things like that, but focus just on our change in cash, to actually more towards $50 million and $40 million last quarter, I think is the way to think about it. But some of that could move around a bit dramatically. And the breakdown is also going to be moving right. Whereas last quarter, we had OpEx, many OpEx items that will be in the future, become CapEx as we get closer to taking FID and complete some of the engineering and so forth. So, hopefully it’s directionally helpful. But that’s kind of where we were getting to.

Yes. That’s great. And can I just follow-up with one more question, actually related to my first question. So, my question is now that you are targeting potential, I know everything is moving target. But if I could expand for prior to any factories in U.S. and or Finland, is that the case, or have I misunderstood?

So, I don’t – that might be the case, or we might move faster in Finland or in the United States. So, I think we are contemplating making additional investment decisions in all three of these locations quite rapidly after making the FID of Gigafactory 1 and 2. But we need to sort of get all the ducks in a row so to speak, and I am sure that, raw materials supplies secured, of course, the off-take agreements are there and that they are bankable and then that we have funding in place for it, etcetera. And then we need to marry that up with whether we are going to produce all of the cathode material ourselves. So, whether we sort of in the interim, source it from an additional qualified supplier, etcetera, etcetera. So, this is a fairly complicated puzzle. But the good news is that’s also alluded to by Jan Arve. We have a very capable team who have done this many times in other industries, built multiple projects in parallel, secured supply chains, etcetera, etcetera. And this is now what we are doing albeit for the first time in Norway, but we are doing it at lightning speed, in my opinion, and moving quite forcefully forward. So, we will come back to the market and our investors with updates on all of this as we have a little bit more definition around it.

Alright. Thank you, guys. Thank you for clarification.

So, our next question comes from the line of Evan Silverberg of Morgan Stanley. Please go ahead.

Good morning guys, Evan Silverberg on for Adam Jonas. As you guys are having your early discussions with government entities, what exactly do they need to see from FREYR prior to providing funding? Thanks.

Good morning, Evan. Great to hear from you. So, let me talk about Norway first and then maybe Oscar you can talk a little bit about DoE as two examples. We are obviously also in dialogue with EU based institutions and the European Investment Bank and other institutions. But from the Norwegian government standpoint, in June the Norwegian government will launch a national battery strategy. And it’s quite rare that they actually established battery strategies for or strategies for a particular industry. But they are increasingly recognizing that the battery value chain is a very suitable, let’s call it energy transition industry for Norway to be a leading part of. That has been a rapidly working, I would say, five-month to six-month process where we have obviously been quite integral into it, since we are the leading and largest initiative on battery production in Norway. So, we have had multiple iterations with them, where we have provided them with our inputs, not only on what such a strategy should include, but also of course, what commercial stakeholders like us would require. What we have submitted to them is that there needs to be level playing fields, basically meaning that grants, such as other battery initiatives in Europe are receiving under EU competition law needs to be similar in Norway. We have said that guarantees leveraging basically the Norwegian government’s balance sheet, which as we all know, is fairly significant needs to be leveraged to ensure that we can get as high fraction of a project finance based structure guaranteed through internationalization guarantees to basically promote and accelerate the development of green solutions in Norway. And different sorts of bridge mechanisms until the project finance solution is in place, etcetera. So, all of this is resonating very well. And we will know a lot more about this when the national battery strategy is launched in the not too distant future. So, it’s weeks out really. So, stay tuned, Evan, and then you will get more visibility on this. This is obviously key for us to basically provide risk mitigation for building gigawatt-hour scale facilities of a new industry that is inherently of course, risky, but they are increasingly understanding it and supporting it greatly. So, Oscar, maybe some thoughts on DoE.

Thanks. And just one follow-up, obviously, FREYR has a goal of creating local supply chain. So, specifically for battery grade lithium carbonate and hydroxide how and where are you guys thinking of potential sourcing? Thanks.

And as we have indicated, we have – we are looking at this, together with the pre-approved supplier Aleees for Taiwan. And we are looking at different locations predominantly now, first of all, in the Nordic Region. And as we also commented during the presentation earlier today that this – we would try to do in parallel with the final investment decision for the Gigafactory 1 and 2. So, obviously, it’s mainly in the Nordic Region, which is the first step.

And in terms of raw material supply into that as per the sort of deeper part of the question Evan, so lithium hydroxide and lithium carbonate, we are already in discussions with various suppliers of that into that put through, essentially, the capital producer, and whether that becomes, a joint venture or licensing arrangement is something that we will get back to. But obviously, securing the raw material and lithium hydroxide and carbonate and both of them actually was needed is progressing well. We don’t have any sort of real concerns around it even though of course, we are monitoring also the challenges and volatility in the market. But longer term there is and tied to when we are starting up commercial production. We are – we have a plan that sort of matches up with that and the initial ongoing, deep discussions really support having this online in time for ramping up the commercial facility.

Great. Thank you very much guys.

There are no further questions at this time. I will turn the call back to Mr. Jeff Spittel.

Great. Thank you, operator. Thank you everybody for your interest this quarter. We will talk to you soon on the road and look forward to catching up in person or virtually. Thanks again. That will conclude the call.