Hello, and welcome to FREYR Q3 2021 Earnings Release and Conference Call. Throughout the call, all participants will be in listening-only mode. And afterwards, there will be a question-and-answer session. Today, I am pleased to present our first speaker, Vice President of Investor Relations, Jeffrey Spittel, please begin your meeting.

Good day and welcome everyone to FREYR Battery's third quarter earnings conference call. With me today on the call are Tom Jensen, our Chief Executive Officer; and Steffen Føreid, our Chief Financial Officer. During today's call management may make statements related to our business that are forward-looking under Federal securities laws, and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to our filings with the Securities and Exchange Commission, which are available on the Investor Relations section of our website and the earnings press release issued earlier today. Additional information will be made available in our quarterly report on Form 10-Q for the quarter ended September 30, 2021 and other reports that we may file with the SEC. With that, I'll turn the call over to Tom.

Thank you, Jeff. And good morning, good afternoon and good evening, wherever you might be dialing in from. It's a pleasure for me to be having this second earnings call for third quarter results, and to give you important updates on the progress of our business. And to just sort of skip through to the most important part: we are experiencing tremendous commercial momentum in the rollout of clean battery solutions worldwide. I'm very happy to be speaking to you today to give you more insight into all the hard work that the passionate and dedicated people at FREYR have been working on since the last earnings call. FREYR is making significant progress toward our commercialization efforts. We are making commercial and strategic progress across the board. We're building out the operational foundation to deliver an increasing number of battery cells into an exponentially booming market. And we're developing and financing our expansions to scale to basically ensure that we can be relevant for the customers in time. So we are today announcing that we're negotiating offtake agreements in excess of 150 GWh in cumulative volumes between 2023 and 2030. This will start deliveries already in 2023 and increase on an annualized basis leading up to 2030. In addition to this we have a broad and expanding pipeline of opportunities across all market segments. I'll go into depth around our focus on the customer front. Earlier this year in October, we announced the joint venture that we have established with Koch Strategic Platforms. We're progressing in the development of that joint venture and we'll get back to how we are thinking about expanding capacity. We're also accelerating our capacity expansion in Finland, which we announced in the last earnings call. Both of these, coupled with our progress in Norway, give us a strong and diversified production base to deliver world-leading battery cell solutions. We are on track with the development of our Customer Qualification Plant, and we're all scheduled for starting that up in the second half of next year. We're also very pleased today to announce that we have entered into a supply agreement with Glencore for initial cobalt needs through 2028. We will then be making the concept selection—or we have made the concept selection, I should say—for our first commercial facility, with a target startup in the second half of 2023. We're now combining the development of Gigafactory 1 and 2, as has been alluded to in previous calls. We are accelerating the debt-based financing solutions to support the Final Investment Decision on that joint development, and we're going to make that Final Investment Decision during the first half of 2022, being on track for startup of production in the second half of 2023 as we previously communicated to the market. Let me then go into the overview of our commercial progress. We are basically seeing that the market short environment is accelerating. That gives us an opportunity generally speaking to secure high grades of customer portfolio, as we are preoccupied with driving value of the batteries that we produce, as opposed to just producing volumes for volume's sake. If I then take you through the funnel of opportunities that we have in the making, we are today announcing that we have two conditional offtake agreements in advanced stages of negotiations. These two are globally leading companies in the ESS space and in the energy space in general, and the total demand between 2023 and 2030 from these two customers alone exceeds 50 GWh of potential demand. On top of this, we have seven offtake agreement negotiations ongoing, which in total adds an additional 100 GWh of demand potential in the same period on top of the 50 GWh that we now have in final stages of negotiation. We also have a top-25 prospective customer list. These customers are increasing their demand projections with us every time we speak to them. We are now in technical review with all of them, all under NDA, and the total need for these customers on aggregate adds up to more than 3 terawatt hours of cumulative demand between 2024 and 2030. We don't anticipate, of course, being able to deliver all of that anticipated demand, but we are increasingly certain that we will be a relevant supplier into that customer base as well. On top of all of these developments, we have more than 60 prospective customers in addition, many of which are now also under NDA and starting technical review. They are European and U.S.-based predominantly companies, but also select Asian companies that are coming into the U.S. and European markets across the EV segment, the ESS segment and the mobility segment. Being a provider of clean battery solutions with a diversified production footprint across Norway, Finland and the United States with a world-leading technology in 24M is providing a lot of interest in what we are delivering, and we're very happy today to be announcing that we've made substantial traction on the commercialization of our offering. Developing a sustainable supply chain is core to having a low-cost decarbonized supply of clean battery solutions. We are therefore extremely proud to be announcing the cobalt agreement that we've entered into with Glencore. We've contracted up to 1,500 metric tons of sustainably sourced cobalt metal cut cathodes. These will be produced at Glencore's Nikkelverk facility in Norway. We have a joint ambition to reach 100% decarbonization of cobalt and other battery materials, and we will now increase our efforts together with Glencore to look into other supply sources for our battery ambitions in Norway, the Nordics and the U.S. region. This underscores the importance of having a localized and decarbonized value chain for battery production. As mentioned many times before, we fundamentally believe that the success of battery production is a function of having access to low-cost decarbonized raw materials and then using world-leading technology to convert such raw materials in a low-carbon power environment to world-leading battery solutions. This is one important and initial step, which will be followed by many with Glencore and others to develop a fully localized and clean Nordic battery value chain and supply chain. Our roadmap to commercialization started, of course, when we had the honor and privilege of listing on the New York Stock Exchange on July 8th this year. Quite a lot has happened since, and it's not that long since we actually became known to the battery industry from a listed perspective. Since then, Koch Strategic Platforms and FREYR have announced the formation of our joint venture. We've also announced that we are investing into 24M Technologies, adding additional exclusivity protection around the technology for deployment in the U.S. We have now made the concept selection—what we refer to internally as Decision Gate 2—for our first commercial Gigafactory, and that is now a combination of what we previously labeled Gigafactory 1 and 2; we are developing that now in one go, with increased throughput capacity relative to what we stated earlier. We will then continue to add offtake agreements to the ones that we are indicating today, so that we fill up capacity in our Gigafactory 1 and 2, and also add capacity to further expansions. The visibility we have on offtake today makes us sold out on Gigafactory 1 and 2 up until 2030, which then triggers us to accelerate the development of additional capacity expansions beyond Gigafactory 1 and 2. We are making the Final Investment Decision on Gigafactory 1 and 2 sometime in the first half of next year. We are optimizing that facility still. We have made the concept selection, and we are still on track to start that up with commercial production of batteries in the second half of 2023. Growth in the U.S.: we announced earlier this year an initial ambition of establishing up to 50 GWh of annualized capacity in the United States for clean battery solutions together with Koch Strategic Platforms. This joint venture leverages the existing relationship with key potential U.S.-based customers and gives us access to one of the largest private enterprises in the U.S. They have a strong presence across the energy space with logistics, energy competence, building large facilities and their presence in and connections with core customers and different partners along the value chain for developing large-scale battery solutions in the U.S. We have, together with Koch Strategic Platforms, aligned strategically with 24M Technologies, the technology platform that we will be using to build batteries across all market segments—not only ESS and commercial vehicles but also across electric vehicle platforms. This is increasingly a platform we believe is very strong and deeply competitive relative to conventional lithium-ion battery technology and we're excited to accelerate deployment of capacity expansions in the United States together with Koch Strategic Platforms. On top of this, as also mentioned earlier this year, we have entered into initial agreements with the Finnish Minerals Group as well as the City of Vaasa. We have 90 hectares of developmental acreage just outside the City of Vaasa, which we're now going to accelerate in terms of developing viable value propositions and business concepts to expand capacity also in the Finnish region. This marries up very well with access to localized and regionalized raw materials, which are plentiful in the Finnish region in addition to a broad variety of other critical input factors for battery cell production in Norway and Sweden. We are excited about having an additional footprint in the Nordics and that will be another area where we can expand capacity feeding into an exponentially growing customer base. We are on schedule for the Customer Qualification Plant. The beauty of the 24M Technology is that we can establish capacity inside existing manufacturing facilities or inside already established large-scale buildings. This is a 13,000 square meter building which we secured earlier this year. We're on track to install Norway's first large-scale lithium-ion battery production facility which will be an actual industrial-scale production line of the 24M Technology. All the critical path equipment is scheduled for delivery in the first half of 2022 and we're on track for combining all of those pieces together and starting up production of the 24M-based batteries in the second half of 2022. As mentioned, based on the learnings and insights that we're getting through the Customer Qualification Plant development, we have decided to combine the development of Gigafactory 1 and 2 into one larger development. We have an 18,000 square meter site a little bit north of where this building is located. We are targeting to build out at least eight production lines of the similar size equipment that we're installing into the Customer Qualification Plant. In our communication to investors earlier, we believed that Gigafactory 1 and 2 would have a combined capacity of 13 GWh in actual throughput production annually. We now see, based on the knowledge we have on the production facilities, that we are increasing that throughput capacity quite substantially over and above the 13 GWh that we mentioned before. We're proceeding toward the Final Investment Decision. We made the concept selection last week and we are really excited about moving forward toward the Final Investment Decision of Norway's first commercial Gigafactory of double-digit gigawatt-hour output. Now, on raw material supply, I've already mentioned the agreement with Glencore, which beyond securing a critically important input through the 1,500 tons of cobalt also points to collaborating with Glencore on other metals and metal sulfates that we need for our production. In addition, we have already secured five out of the 13 inputs we require to the Customer Qualification Plant through our partner ITOCHU and the sub-suppliers that are already approved suppliers into the 24M process. The remaining eight are well advanced and we are on track to ensure that we have sufficient and relevant qualified material to produce the initial batteries in the Customer Qualification Plant. We will be speeding up and accelerating our efforts to localize and regionalize battery cell raw materials suppliers into our Gigafactories. The Glencore announcement is an important step in that regard. We will be gradually announcing additional partnerships to ensure localized and regionalized qualified raw materials for our commercial facilities. We're also well advanced in examining downstream integration. Both module and pack partnerships are now in advanced stages of negotiation and discussion. We will also be adding a module facility coupled with our cell manufacturing facility in Gigafactory 1 and 2. In all, we are expanding our presence up and downstream from the cell manufacturing footprint. We're seeing that the attractiveness of FREYR as a partner—being both a customer and supplier of clean battery solutions and clean battery raw materials into cell production—is resonating with the major players in this space. Let me remind our investors why we are so excited about the 24M Technology. 24M is an MIT spin-off, more than 12 years in the making, and it has fundamentally revolutionized not only how battery cells are designed, but more importantly how they are produced. The innovative design provides an opportunity to build thicker electrodes, which will dramatically reduce material costs and allow us to put more energy-carrying material into the same volumetric unit of final battery solution. It is highly flexible and can be deployed at multiple different scales across not only the ESS market and commercial mobility markets but also in the EV market applications. We are excited about the development of the technology pertaining to the EV space. We see increasing interest and attention from large automotive OEMs around the 24M Technology. As mentioned before, this is a chemistry-agnostic or chemistry-flexible platform that can feed into the existing supply chain. We can produce NMC batteries, LFP batteries, any known chemistry being used in conventional lithium-ion battery cell production today, while also offering a bridge into future metal anode solutions or solid-state solutions over time. The important innovation in this production platform is that it fundamentally reduces the footprint and the complexity of producing lithium-ion battery cells. We're going from 15 to 5 production steps. With that dramatic reduction in footprint—more than an 80% reduction in footprint, 50% reduction in CapEx, substantial reduction in energy consumption and labor costs—it provides us with an opportunity to provide more cost-effective solutions to our customers and allows us to optimize battery production further as we move into the future, where improved energy densities, improved cycle time, improved charge rates and reduced costs will be required to deliver the energy transition that is upon us. Finally, this is a more sustainable solution as we will have limited waste in the production, if any, and the ability to recycle any production waste is dramatically better than conventional production. Because we're not using solvents and binders but using the electrolyte as the solvent and binder, we have a much less chemically challenged final product, which allows for ultimate recycling to be done in a much better way. We're very happy with our relationship with 24M. This is a step into the future. It offers a step-change in performance and cost improvements relative to conventional production, and we are excited about being the company to take it to multiple gigawatt-hour scale in Europe and the United States. Let me now hand it over to our CFO to take you through the third quarter financial aspects before I conclude with some closing remarks. Steffen?

Thank you, Tom. And good day, everyone. It's a pleasure to be here today. At the end of the third quarter FREYR had $623 million in cash and cash equivalents on its balance sheet. This is up substantially from the previous quarter, mainly due to the $644 million in net proceeds received from the business combination of Alussa Energy in July. The increase is partly offset by an operating cash outflow, investments in the Customer Qualification Plant, and demerger payments, totaling approximately $33 million in the quarter. Our main financial priority short-term is to minimize the use of cash while we build the organization and secure customer offtake. We recruit selectively and manage external costs closely and expect the fourth quarter SG&A expense to be roughly in line with third quarter. Medium term, our financial priority is to secure funding solutions that support the Final Investment Decision for Gigafactory 1 and 2. The plan is to raise financing in the debt capital markets from our commercial banks and export credit agencies. We have engaged banks and have constructive dialogues with several potential lenders. As we accelerate our efforts to secure financing for the first commercial plant, we will seek a flexible, cost-efficient and sustainably-linked financing solution, allowing for speed of execution and supporting our timeline. Longer term, we will seek to diversify sources of funding and optimize our capital structure as we execute on this strategy. On that note, I'll turn the call over to Tom for closing remarks. Tom?

Thank you, Steffen. So to summarize and to take you through our current priorities, we are on track to establish 83 GWh of annualized capacity of clean battery cell solutions by 2028. We can now deploy opportunities not only in Norway, where we’re well advanced, but also in Finland and the United States. We will be looking into acceleration options for establishing that capacity, building on the knowledge and footprint that we are establishing in Norway. We see very strong customer traction building and we are pleased today to announce initial insights into our customer funnel which now already has nine customer engagements in offtake agreement discussions, two of which are in very advanced stages. In combination, these nine agreements add up to more capacity than we are developing in Gigafactory 1 and 2. We will keep adding momentum to that across the ESS and commercial mobility segments and expand into the EV market as we're moving toward the Final Investment Decision for Gigafactory 1 and 2 in Norway. It's important for us to diversify our production footprint and this is something our customers value greatly. Having a localized production footprint gives security of supply in local markets which will be increasingly important for many large companies that we are in dialogue with across the ESS, commercial mobility and EV spectrum. Finally, we are extremely preoccupied with driving capital efficiency. As our CFO alluded to, we will be pursuing sustainably-linked financing options and have a diversified capital base over time. We will optimize plant configurations and supply chain to generate strong returns. Having a localized and decarbonized supply chain is fundamentally important to drive down costs but also to reduce the CO2 footprint on a lifecycle basis of the batteries we produce, which ultimately is core to the decarbonization of transportation and energy systems globally. With that, I open up for any questions or comments that any of our investors might have. We are excited about the progress to date and look forward to keeping you up to speed on a running basis as we move forward. Thank you for your attention.

Our first question comes from Evan Silverberg with Morgan Stanley.

Hi, all. Evan Silverberg on behalf of Adam Jonas. I'm curious if you guys could give some commentary on global supply chains and what you guys are seeing. Obviously, it’s been headlines a lot lately. Curious if there's any risk to that to a 2022 start for the Customer Qualification Plant? And then Gigafactories 1 and 2?

Thank you, Evan. Great to hear your voice again. Good question, of course. Not surprised that you're posing it. As I tried to allude to in the presentation, we will be having 13 different suppliers into our Customer Qualification Plant. All the volumes that we require are secured for five of them, and we are in closing stages with the remaining eight. So we don't see any risk of supply shortage of materials going into the Customer Qualification Plant, which, as you know, is scheduled to come on stream in the second half of next year. That total is a smaller volumetric requirement of raw materials; when we move to Gigafactory 1 and 2, scheduled to start production in the second half of 2023, we will need to scale up that supply chain. That is something we've already started on quite a long time ago, both looking into existing qualified suppliers and how we can debottleneck and scale up their supply into our facilities. Coupled with that, we are in advanced stages with multiple parties on the cathode active material side, anode active material side, electrolytes, copper foil, lithium hydroxide, lithium carbonate—anything and everything we need for LFP and NMC batteries for a localized production footprint over time. So far, we are confident that we're going to be able to either scale up existing approved suppliers, get the ones we're in process with qualified, and/or combine that with localized developments, whether with existing cathode or anode material providers that are already present in Europe or Asian suppliers that want to establish presence in Finland or Norway. All in all, we are confident that we're going to be able to unlock the raw material supply chain. As has been pointed out by many stakeholders in the battery industry, this is a fundamentally important area for the whole industry to focus on. We are collaborating with other cell providers and stakeholders to ensure that timely and sufficient raw material capacity is added in time for the battery cells to come online.

One more follow-up if you don't mind. Specifically within the United States, labor has been a big topic lately. Can you give a little commentary on how the hiring has been going and any overall color on the Norwegian labor market right now?

Clearly, competence is critical for any business scaling as rapidly as ours. FREYR was a startup at the beginning of the year; we're still a startup, but we’ve grown significantly in the last ten months. That has required a lot of effort, but it shows we've been able to scale with relevant competence across project execution, operational excellence, battery cell and product engineering. We're continuing to expand our capacity base. Regarding the U.S., it's a bit early for very specific news beyond the fact that we've started our joint venture together with Koch Strategic Platforms. We've populated the initial work leading up to concept selection and the Final Investment Decision for the joint venture's first Gigafactory in the U.S. sometime next year. We are leveraging Koch Strategic Platforms' network as much as we can, and we have started outreach to various locations and jurisdictions where we are investigating potential establishment of capacity. So far, interest is very strong. We don't underestimate the challenge of attracting the appropriate competence, nor do we underestimate the need to educate operators from other industries. So far, so good, but this is a topic to pay attention to because we are paying attention to it and will not underestimate the challenge.

Our next question comes from Greg Lewis with BTIG. Please go ahead.

Greg?

We will move on to the next question for now, which is from Maheep Mandloi from Credit Suisse. Please go ahead.

Maybe we can just start on the customers. Thanks for the clarifications on those two in the ESS and energy industry. Can you just talk about the other seven in the early stages: which end markets do they serve and how do you think about their customer qualification process, their supply qualification process, timelines? Thanks.

Great. Let me generally speak about the nine. Two of them are more advanced and they are in the ESS realm. Among the nine there are both ESS and commercial mobility customers; predominantly LFP but also NMC-based batteries. That's why we're excited about the cobalt agreement with Glencore. Generally speaking, the process is as in conventional batteries: you go through the ABCD cycle. We already have the opportunity to provide sample cells based on the 24M process, and also samples from select licensees we have in Asia. We have strengthened our relationships with them. As the Customer Qualification Plant comes online, we will go further into the ABCD, SOP-type qualification process with batteries produced on site. The nature of the qualification process in ESS and commercial mobility is generally shorter and quicker than automotive, even though there are initiatives in the EV space to shorten timelines through materials choices and advanced algorithmic data modeling, early monitoring of cycle life and performance metrics. The 24M production platform is a faster production platform, which allows us to iterate faster and generate data more quickly. Over time we believe this technology could enable us to shorten qualification timelines by providing data and comfort around solutions earlier than the norm in conventional technology today. So again: nine customers, ESS and commercial mobility, and the top-25 prospects are all under NDA and in technical review and include the EV industry. We are excited about the development and will keep investors updated about progress on the customer side as we move toward the end of the year.

And if I may just move on to the big giga line on Giga 2: can you talk about what's driving that higher throughput? It was interesting you talked about more than 13 GWh. Can you quantify how much that is and what's driving it? And just to also understand the CapEx needs for the two Gigafactories combined now?

We are moving toward the Final Investment Decision and will make it in the first half of next year or sooner, but we need to go through a number of steps to optimize total cost in an inflationary environment. We're trying to avoid the worst impacts of inflation; some input costs are starting to normalize and we're optimizing the cost structure. We're not going to provide updated CapEx numbers at this time. Regarding the configuration, we made the concept selection and have learned a lot from the Customer Qualification Plant development and the design phase of the casting unit cell assembly machine, which is the heart of the process, along with relevant upstream and downstream developments. That has allowed us, in iterative dialogues with our customers, to optimize the cell sizes we intend to produce. The increase in size of cells, coupled with increased speed of the 24M Technology, allows us to increase throughput of the combined facility. In addition, we are adding a module facility—modules and packs—which is increasingly important for many ESS customers. That module facility is CapEx-light relative to cell facilities but adds roughly 30% in revenue on top of the cell revenue, improving the margin picture for the total equation. Regarding the excess throughput capacity, we are not ready to quantify it specifically yet, but it is a double-digit percent increase over prior estimates. How much up we end up at is a macro optimization; we'll come back to the market when we have more precision, which will be announced leading up to and concluding with the Final Investment Decision in the first half of next year.

And just one last one from me on the cash usage near-term: Q4, should we expect the same $30 million range for cash burn and a similar run rate until the Gigafactories start on a quarterly basis?

Yes. Generally speaking, as our CFO alluded to in the call, we will roughly have the same SG&A burn in the fourth quarter as in the third quarter. But maybe it's Steffen you want to add some color to this, so the CFO can comment additionally on this.

Yes, I can do that. Thank you. That's correct: approximately the same G&A in the fourth quarter. I'd like to make the point that in the roughly $30 million, that includes about almost $10 million in share-based compensation, so the cash effect is less. But approximately the same level.

Our next question comes from Jacob Green with BTIG.

Hi, guys. Sorry, I was having some technical issues, but just a quick one for me. So looking at your offtake agreements and your prospective offtake agreements for 150 GWh, is there any way to think about the cumulative demands over a time period? Any way to think about that?

Yes. To be clear, the 150 GWh is a cumulative demand from these nine customer engagements between 2023 and 2030. By 2030, or leading up to 2030, the total demand actually exceeds the capacity we aim to produce from Gigafactory 1 and 2 as we see it today. When we couple that with the accelerating momentum from the top-25 customer list, that triggers us to develop more Gigafactories as soon as we can in Norway, Finland and the United States. The market shortfall, as we've discussed, is increasingly being manifested, in particular in ESS and commercial mobility, and our customers are increasingly worried about securing supply quickly, also from localized sources of production. That is a good situation for a battery cell producer, but it also underscores the challenge the industry will have moving forward: battery shortages can be a function of raw material shortages. We will accelerate across the board. Our value chain approach is now bearing fruit in partnerships upstream from cell production and in module and pack partnerships. Adding module production increases our ability to develop tailor-made solutions for customers. Diversifying geographically and getting closer to customers while having a diversified supply base increases the opportunity to accelerate development of new capacity. We will come back to the market with more specifics around Gigafactory 1 and 2 and subsequent Gigafactories in Norway, Finland and the U.S. when we have more definition. For now, we are excited about the traction we have around Gigafactory 1 and 2 and the commercial ramifications of the 150 GWh under advanced and final stages of negotiation, which more than fills that capacity until 2030 and triggers development of additional capacity.

Great. Thank you. As far as the cobalt supplier, Glencore, for the 1,500 metric tons, is there any way to think about that and the gigawatt hours of battery produced?

There are basic rules of thumb on how much cobalt you need into NMC811-type solutions. It's probably the NMC811 solution we'll be producing for certain customer segments. We don't want to be very specific on this just yet, but I can say that the cobalt we've secured is currently sufficient to provide the cobalt needs for the NMC volumes we aim to produce in Gigafactory 1 and 2 as we see it today. But it's not that it's an unlimited amount. This is a good starting point. We also see a lot of LFP demand, and the 24M Technology is chemistry-flexible so we can produce both LFP and NMC. We will tailor-make production lines to LFP and to NMC. While we can't swap flexibly between them without downtime, we want to avoid that to ensure the highest uptime in each production line. The cobalt supply is sufficient for the NMC-based volumes in our current offtake definition, but that picture will evolve. We believe we will have a role in ESS, mobility and EV solutions, even though LFP is increasingly important across many market verticals. All in all, a good step forward on the commercial front, operational front and raw material supply front.

We have no further questions. I hand it back to our speakers.

Thank you, operator and thank you everyone for your interest today. We look forward to catching up with you over the remainder of the year, both virtually and now in-person on the conference circuit. We'll see you all soon. Please feel free to reach out to us with additional questions and feedback. Thank you very much. This will conclude the call.