Arrival Reports Second Quarter 2022 Financial Results

Reaffirms begin of manufacturing this quarter in Bicester
ATM platform established to entry extra capital
MOUs and Orders price over $6b in potential income

LUXEMBOURG, Aug. 11, 2022 (GLOBE NEWSWIRE) — Arrival (NASDAQ: ARVL), inventor of a novel new methodology of design and manufacturing of equitable electrical autos (EVs) by native Microfactories, right this moment reported monetary outcomes for the second quarter ended June 30, 2022.

“We have had big achievements in Q2 including the European certification of our Van and Bus products and successful internal trials of both Van and Bus on public roads. In addition, we’ve made recent strategic decisions that will allow us to start production this quarter in Bicester (UK), deliver our first vehicles to UPS this year, and start production in Charlotte (US) in 2023. We are excited to be drawing closer to producing vehicles in our first ever Microfactory in a few weeks – a moment that we believe will fundamentally change the automotive industry. The start of our first Microfactory is a big step towards achieving our vision, it is the move from 0 to 1,” stated Denis Sverdlov, Arrival founder and CEO.

Recent Business Highlights

Arrival ended Q2 with roughly $513 million of money and money equivalents, started restructuring the business to cut back prices, and right this moment is establishing a $300 million At The Market (“ATM”) platform. These actions will enable the Company to begin manufacturing this quarter in Bicester, ship its first autos to UPS this yr, and begin manufacturing in Charlotte in 2023 with an optimized manufacturing facility. The Company expects decrease manufacturing volumes in 2022 in comparison with earlier estimates. These modifications enable the Company to function the business by way of not less than 2023 without having to lift extra capital, aside from by way of the ATM, and put together the Company for progress. The Company will proceed to opportunistically take into account extra sources of capital.

Demand for merchandise grew with non-binding MOUs and Orders rising to c.149k¹ autos, which, if all accomplished, is over $6 billion in potential income.

Van

• Arrival Van achieved European Whole Vehicle Type Approval in May
• Vans are at the moment being examined on public roads; buyer trials scheduled to begin in Central London this quarter with autos built-in into buyer operations delivering packages by way of This autumn
• Trials in Europe and North America to begin in 2023
• Van manufacturing in Bicester anticipated to begin this quarter with deliveries to prospects anticipated this yr
• Charlotte Microfactory timeline moved to 2023, capitalizing on learnings and efficiencies from the Bicester Microfactory

Bus

• Achieved European certification in Q2
• The Arrival Bus has began working on public roads, taking staff from web site to web site
• Customer trials and funding within the Bus microfactory will proceed as soon as the Company secures extra capital

Second Quarter 2022 Financial Results

• Loss for the interval of $89.6 million, in comparison with a loss for the interval of $56.2 million within the second quarter of 2021
• Adjusted EBITDA loss for the interval of $76.2 million, in comparison with an adjusted EBITDA lack of $41.2 million within the second quarter of 2021
• Administrative bills have been $82.2 million and non-capitalized R&D bills have been $32.6 million, in comparison with administrative bills of $36.3 million and non-capitalized R&D bills of $11.6 million within the second quarter of 2021
• Capital expenditure for the interval, together with tangible and intangible purchases, of $95.2 million, in comparison with $79.1 million within the second quarter of 2021
• Cash and money equivalents of $512.6 million as of June 30, 2022
• Established an ATM platform to promote as much as $300 million of inventory once in a while which gives a further supply of capital wanted to ship business priorities by way of 2023
• Shares excellent totaled 638,237,901 and weighted common shares excellent in Q2 totaled 633,974,891 as of June 30, 2022

2022 Outlook

Vehicle Volumes and Revenue:

Arrival continues to anticipate to begin manufacturing in Bicester this quarter. The Company expects a sluggish and deliberate ramp in Bicester to make sure the autos it produces meet the Company’s high quality targets. Some of the vans produced this yr will go into an Arrival fleet for buyer demos and trials and roughly 20 autos are anticipated to be delivered to prospects in This autumn 2022. Given supply instances and buyer acceptance necessities, the Company doesn’t anticipate income this yr.

Adjusted EBITDA and Capex:

For the second half, Arrival expects Adjusted EBITDA loss within the vary of $175-195 million, and Capex of $40-60 million. Capex will primarily be for some preliminary manufacturing tooling and finalizing the commissioning of Bicester.

Arrival expects to finish the yr with roughly $300-350 million of money inclusive of anticipated proceeds from the ATM proceeds of roughly $90 million this yr and $210 million in 2023.

Webcast Information

Arrival will host a Zoom webinar at 8:00 A.M. Eastern Time right this moment, August 11, 2022, to debate its second quarter 2022 monetary outcomes. The stay webcast might be accessible on the Company’s web site at investors.arrival.com. A webcast replay might be obtainable roughly two hours after the conclusion of the stay occasion.

Non-IFRS Financial Measures

This press launch contains Adjusted EBITDA which Arrival makes use of to evaluate the monetary efficiency of its business that isn’t a measure acknowledged beneath IFRS. This non-IFRS measure shouldn’t be thought of a substitute for efficiency measures decided in accordance with IFRS and will not be corresponding to comparable measures offered by different issuers. “Adjusted EBITDA” represents earnings earlier than curiosity, tax, depreciation and amortization, adjusted for impairment of intangible property and monetary property, share possibility bills, itemizing bills, truthful worth changes on Warrants, reversal of distinction between truthful worth and nominal worth of loans that obtained settled in the course of the interval, truthful worth motion of embedded by-product, realized and unrealized international change good points/losses and transaction bonuses. For a reconciliation of Adjusted EBITDA to Operating loss, see the reconciliation desk included later on this press launch.

About Arrival

Arrival was based in 2015 with a mission to make air clear by changing all autos with inexpensive electrical options – produced by native Microfactories. Arrival is driving the transition to EVs globally by creating merchandise which might be zero-emission, extra fascinating, extra sustainable and extra equitable than ever earlier than. Their in-house applied sciences allow their distinctive new methodology of design and manufacturing utilizing rapidly-scalable, native Microfactories all over the world. This methodology facilitates cities and governments in attaining their sustainability objectives while additionally supercharging their communities. This vertically built-in business mannequin is how Arrival can have the unconventional impression our world wants right this moment. Arrival (NASDAQ: ARVL) is a joint inventory firm ruled by Luxembourg legislation.

Forward-looking statements

This press launch comprises sure forward-looking statements throughout the that means of the federal securities legal guidelines, together with statements relating to the merchandise provided by Arrival and the markets during which it operates and Arrival’s projected future outcomes. These forward-looking statements usually are recognized by the phrases “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “positioned,” “strategy,” “outlook,” “future,” “opportunity,” “plan,” “potential,” “predict,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and comparable expressions and embody, amongst different issues, their 2022 outlook. Such statements are made pursuant to the secure harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based mostly on administration’s perception or interpretation of knowledge at the moment obtainable. Forward-looking statements are predictions, projections and different statements about future occasions which might be based mostly on present expectations and assumptions and, in consequence, are topic to dangers and uncertainties. Many components may trigger precise future outcomes and occasions to vary materially from the outcomes expressed within the forward-looking statements on this doc. Among the important thing components that would trigger precise outcomes to vary materially from these projected within the forward-looking statements embody, however should not restricted to: (i) the impression of COVID-19 on Arrival’s business; (ii) financial disruptions from battle and different geopolitical tensions (resembling the continued army battle between Russia and Ukraine); (iii) the danger of downturns and the potential for fast change within the extremely aggressive business during which Arrival operates, (iv) the danger that Arrival and its present and future collaborators are unable to efficiently develop and commercialize Arrival’s services or products, or expertise vital delays in doing so; (v) the danger that Arrival could by no means obtain or maintain profitability; (vi) the danger that Arrival experiences difficulties in managing its progress and increasing operations, (vii) the danger that third-parties suppliers and producers should not capable of absolutely and well timed meet their obligations; (viii) the danger that the utilization of Microfactories won’t present the anticipated advantages as a consequence of, amongst different issues, the shortcoming to find acceptable buildings to make use of as Microfactories, Microfactories needing a bigger than anticipated manufacturing facility footprint, and the shortcoming of Arrival to deploy Microfactories within the anticipated time-frame; (ix) the danger that the orders which were positioned for autos, together with the order from UPS, are cancelled or modified; (x) the danger of product legal responsibility or regulatory lawsuits or proceedings referring to Arrival’s services; and (xi) the danger that Arrival might want to increase extra capital to execute its business plan, which will not be obtainable on acceptable phrases or in any respect; and (xii) the danger that Arrival is unable to safe or shield its mental property.

The foregoing checklist of things isn’t exhaustive. You ought to fastidiously take into account the foregoing components and the opposite dangers and uncertainties described within the “Risk Factors” part of Arrival’s annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 27, 2022, and different paperwork filed by Arrival with the SEC once in a while. In addition, forecasts about future prices and different monetary metrics and our expectations as to our potential to execute on our present business plan within the close to time period and the long term are based mostly on quite a few assumptions we make, together with the next assumptions that Arrival’s administration believed to be materials:

• Operational assumptions, together with, the event and commercialization of Arrival’s autos, the roll out of Arrival’s Microfactory manufacturing places, the manufacturing capability of Arrival’s Microfactories, the choice of Arrival’s merchandise by prospects within the business Van and Bus business, progress within the numerous markets Arrival is focusing on, common promoting costs and ensuing gross sales of autos.
• The mixture of merchandise produced and offered together with corresponding prices, together with materials and element prices, meeting prices, manufacturing prices, and prices associated to product warranties. Many of those prices are forecasted to fluctuate considerably as Arrival commences manufacturing in its Microfactories.
• Our potential to lift capital essential to execute on our present business plan and manufacturing timeline, together with the roll-out of our Microfactories, in addition to to keep up our ongoing operations, proceed analysis, improvement and design efforts and enhance infrastructure.
• Capital expenditure relies on quite a few assumptions relating to the expenditure required to construct Arrival’s Microfactories, together with the price of preliminary arrange of manufacturing facility services and the price of manufacturing and meeting tools.

In making the foregoing assumptions, Arrival’s administration relied on quite a few components, together with: its expertise within the automotive business, its expertise within the interval because the inception of the corporate and present pricing estimates for prototype autos and car parts in addition to the projected prices for first manufacturing facility places which might be already in improvement; its finest estimates of the timing for the event and commercialization of its autos and total car improvement course of; its finest estimates of present and future prospects buying Arrival’s autos; and third-party forecasts for business progress. Forecasts of future monetary metrics are inherently unsure, and precise outcomes could differ considerably from forecasts based mostly on our assumptions underlying these forecasts at the moment.

Readers are cautioned to not put undue reliance on forward-looking statements as they’re topic to quite a few uncertainties and components referring to Arrival’s operations and business surroundings, all of that are tough to foretell and lots of of that are past Arrival’s management. Except as required by relevant legislation, Arrival assumes no obligation to and doesn’t intend to replace or revise these forward-looking statements after the date of this press launch, whether or not on account of new data, future occasions, or in any other case. In mild of those dangers and uncertainties, you must remember that any occasion described in a forward-looking assertion made on this press launch or elsewhere may not happen. Arrival doesn’t give any assurance that Arrival will obtain its expectations.

Media Contacts For Arrival

Media
[email protected]
Investors
[email protected]

¹Company estimates as of July 2022: Total contains 10k order and 10k possibility from UPS. All MOUs are non-binding and topic to termination at any time. Orders are non-binding and topic to termination by the shoppers.

Reconciliation of Net Loss to EBITDA and Adjusted EBITDA in USD (Thousands)

Note: The outcomes for the six months to June 30, 2022 displays the evaluation of change in presentational forex. Prior yr figures have additionally been restated into USD (hundreds).

(1)   During the prior interval ended June 30, 2021, on account of the conclusion of the merger with CIIG, Arrival issued shares and warrants to CIIG shareholders, comprised of the truthful worth of the Company’s shares that have been issued to CIIG shareholders, and in change, the Company acquired the identifiable internet property held by CIIG. The extra of the truthful worth of the fairness devices issued over the truthful worth of the recognized internet property acquired, represents a non-cash expense in accordance with IFRS 2. This one-time expense on account of the transaction, within the quantity of USD $1,888.3 million, is recognised as a share itemizing expense offered as a part of the working outcomes throughout the consolidated assertion of revenue or loss. Listing expense additionally contains USD $19.8 million of different associated transaction bills.
(2)   Warrants are truthful valued as of the steadiness sheet date. The change in worth is recorded within the consolidated assertion of revenue or loss.
(3)   Employee loans initially recognised at their truthful worth are amortized over the interval which they’re anticipated to be repaid. Employee loans, which get repaid/settled at an earlier date than what was initially anticipated leads to acquire within the consolidated assertion of revenue or loss.
(4)   The Group has re-financed some loans given to staff in April 2022. As per IFRS 9 the distinction between the truthful worth of the brand new loans and the carrying quantity has been recognised within the consolidated assertion of revenue or loss.
(5)   An embedded by-product is a element of a hybrid contract that additionally features a non-derivative host. The Company has recognised the embedded by-product as a part of the convertible notes issued in November 2021 which is truthful valued as at steadiness sheet date for the six months to June 30, 2022. There was no such motion within the prior interval of six months to June 30, 2021.
(6)   Following the profitable merger with CIIG sure govt officers of the Group acquired a one time bonus. This is included in administrative bills within the consolidated assertion of revenue or loss within the prior interval of six months to June 30, 2021.
(7)   Impairment losses and write-offs embody impairment for lease places now not utilized by the Group, impairment on property on account of stopping operations in Russia, internally developed intangible property impaired on account of business reorganization and write-offs of aged batteries cells.

The above desk displays approximate USD values in hundreds, with prior interval numbers being restated to USD (hundreds).