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Arrival Reports First Quarter 2021 Financial Results

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LUXEMBOURG, June 30, 2021 (GLOBE NEWSWIRE) -- Arrival (NASDAQ: ARVL), the company creating electric vehicles (“EVs”) with its unique technologies, is pleased to report results for the first quarter ended March 31, 2021 having now finalised the accounting for the merger with CIIG in consultation with their advisors and external auditors.

“Our Q1 adjusted EBITDA and cash balance are unchanged from what was communicated in our Q1 update on the 13th of May, 2021,” said Denis Sverdlov, CEO and founder of Arrival. “Since this date, we have made substantial progress in vehicle design, testing, sales and Microfactory commissioning in both the UK and the USA. The breadth and quality of our customer engagement has continued to grow and we are excited to see our trials begin with UPS in short order mid-July in the UK. Our competitive advantage is built on our unique new method for the design and production of vehicles and high level of vertical integration. We believe these will enable us to develop and produce multiple vehicle types concurrently which will help accelerate the transition to zero-emission transportation around the world. We look forward to sharing further information on our progress in our Q2 report, and will announce our Q2 earnings date in the coming weeks.”

Recent Business Highlights:

  • Announced a collaboration with STMicroelectronics which is the culmination of several years of engagement; their products are expected to be featured across Arrival’s entire vehicle portfolio

  • Partnered with Hitachi Europe, a wholly owned subsidiary of Hitachi, Ltd. to deliver new bus and infrastructure solutions to the European Bus industry

  • Partnered with Ambarella to deliver advanced driver assistance systems (ADAS)

  • Issued a formal redemption notice for public warrants which are now exercisable until 5:00pm New York City time on July 19, 2021

First Quarter 2021 Financial Results:

  • Adjusted EBITDA loss of €27 million, compared to a loss of €14 million in the first quarter of 2020

  • Administrative expenses of €39 million and R&D expenses of €7 million

  • Capital expenditure of €41 million in the first quarter of 2021

  • Cash and cash equivalents of €516 million as of March 31, 2021

Non-IFRS Financial Measures
This press release includes Adjusted EBITDA which Arrival utilizes to assess the financial performance of its business that is not a measure recognized under International Financial Reporting Standards (“IFRS”). This non-IFRS measure should not be considered an alternative to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. For a reconciliation of Adjusted EBITDA to Operating loss, see the reconciliation table included later in this press release.

Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding the products offered by Arrival and the markets in which it operates and Arrival’s projected future results. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on management’s belief or interpretation of information currently available. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including, but not limited to: (i) the impact of COVID-19 on Arrival’s business; (ii) the risk of downturns and the possibility of rapid change in the highly competitive industry in which Arrival operates, (iii) the risk that Arrival and its current and future collaborators are unable to successfully develop and commercialize Arrival’s products or services, or experience significant delays in doing so, (iv) the risk that Arrival may never achieve or sustain profitability; (v) the risk that Arrival experiences difficulties in managing its growth and expanding operations, (vi) the risk that third-parties suppliers and manufacturers are not able to fully and timely meet their obligations; (vii) the risk that the utilization of Microfactories will not provide the expected benefits due to, among other things, the inability to locate appropriate buildings to use as Microfactories, Microfactories needing a larger than anticipated factory footprint, and the inability of Arrival to deploy Microfactories in the anticipated time frame; (viii) the risk that the orders that have been placed for vehicles, including the order from UPS, are cancelled or modified; (ix) the risk of product liability or regulatory lawsuits or proceedings relating to Arrival’s products and services; and (x) the risk that Arrival will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; and (xi) the risk that Arrival is unable to secure or protect its intellectual property. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of Arrival’s annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 30, 2021 and other documents filed by Arrival with the SEC from time to time. Readers are cautioned not to put undue reliance on forward-looking statements, and Arrival assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Arrival does not give any assurance that Arrival will achieve its expectations.

About Arrival
Arrival (NASDAQ: ARVL) is reinventing the automotive industry with its entirely new approach to the design and assembly of electric vehicles. Low capex, rapidly scalable Microfactories combined with proprietary in-house developed components, materials and software, enable the production of best in class vehicles competitively priced to fossil fuel variants and with a substantially lower total cost of ownership. This transformative approach provides cities globally with the solutions they need to create sustainable urban environments and exceptional experiences for their citizens. Arrival is a global business founded in 2015 with more than 1,900 global employees located in offices across the United Kingdom, United States, Germany, the Netherlands, Israel, Russia, and Luxembourg. The company is deploying its first four microfactories in North Carolina, USA, South Carolina, USA, Bicester, UK, and Madrid, Spain.

Media Contacts

For Arrival
Media
pr@arrival.com

Investors
ir@arrival.com

Unaudited consolidated statement of profit or loss and other comprehensive (loss)/income for the three months period ended March 31

In thousands of euro

2021

2020*

Administrative expenses

(39,267

)

(13,423

)

Research and development expenses

(7,083

)

(2,800

)

Impairment expense

(515

)

-

Listing expense**

(1,018,024

)

-

Other income

1,123

314

Other expenses

(65

)

(237

)

Operating loss

(1,063,831

)

(16,146

)

Finance income

82,507

729

Finance expense

(4,130

)

(1,122

)

Net Finance cost

78,377

(393

)

Loss before tax

(985,454

)

(16,539

)

Tax income

20

838

Loss for the period

(985,434

)

(15,701

)

Attributable to:

Owners of the Company

(985,434

)

(15,701

)

Consolidated Statement of other comprehensive (loss)/income

Loss for the period

(985,434

)

(15,701

)

Items that may be reclassified subsequently to profit or loss

Exchange differences on translating foreign operations

16,732

(5,948

)

Total comprehensive profit/(loss)

16,732

(5,948

)

Total comprehensive loss for the period

(968,702

)

(21,649

)

*Comparative figures are of Arrival Luxembourg S.à r.l.
**As a result of the conclusion of the merger with CIIG, Arrival issued shares and warrants to CIIG shareholders, comprised of the fair value of the Company’s shares that were issued to CIIG shareholders of €1,347 million as well as the fair value of the Company’s warrants of €189 million. In exchange, the Company received the identifiable net assets held by CIIG, which had a fair value upon closing of €534 million. The excess of the fair value of the equity instruments issued over the fair value of the identified net assets received, represents a non-cash expense in accordance with IFRS 2. This one-time expense as a result of the transaction, in the amount of €1,002 million, is recognised as a share listing expense presented as part of the operating results within the Consolidated Statement of Profit or Loss. Listing expense also includes €16 million of other related transaction expenses.

Condensed unaudited consolidated statement of financial position

In thousands of euro

March 31, 2021

December 31, 2020*



ASSETS

Non-Current Assets

Property, plant and equipment

137,308

112,719

Intangible assets and goodwill

213,240

171,726

Deferred tax asset

1,180

1,134

Trade and other receivables

32,267

10,786

Total Non-Current Assets

383,995

296,365

Current Assets

Inventory

12,175

11,820

Loans to executives

-

4,244

Trade and other receivables

43,812

51,424

Prepayments

24,291

18,956

Cash and cash equivalents

515,841

67,080

Total Current Assets

596,119

153,524

TOTAL ASSETS

980,114

449,889

EQUITY AND LIABILITIES

Capital and reserves

Share capital

60,616

239,103

Share premium

4,779,545

288,539

Other reserves

(2,894,032

)

51,425

Accumulated deficit

(1,244,190

)

(258,756

)

Total Equity

701,939

320,311

Non-Current Liabilities

Loans and borrowings

110,174

87,907

Warrants

113,501

-

Deferred tax liability

2,406

2,750

Total Non-Current Liabilities

226,081

90,657

Current Liabilities

Current tax liabilities

385

501

Loans and borrowings

3,545

4,255

Trade and other payables

48,164

34,165

Total Current Liabilities

52,094

38,921

TOTAL EQUITY AND LIABILITIES

980,114

449,889

*Comparative figures are of Arrival Luxembourg S.à r.l

Unaudited consolidated Statement of Cash Flows
For the three months period ended March 31

In thousands of euro

2021

2020*

Cash flows used in operating activities

(Loss)/Profit for the period

(985,434

)

(15,700

)

Adjustments for:

- Depreciation/Amortization

4,184

2,403

- Impairment losses

547

-

- Net unrealised foreign exchange differences

4,110

(97

)

- Net finance interest

(1,293

)

1,060

- Fair value of employee share scheme

1,199

-

- Fair value of warrants

(77,921

)

-

- Listing cost

1,002,609

-

- Fair value reversal of loans that have been repaid

(1,454

)

-

- (Loss)/Profit from the modification of lease

(969

)

37

- Deferred taxes

(642

)

(533

)

- Tax income/(expense)

621

(305

)

Cash flows used in operations before working capital changes

(54,443

)

(13,135

)

(Increase) in trade and other receivables

(14,232

)

(2,508

)

Increase/ (Decrease) in trade and other payables

21,701

(10,965

)

(Increase) of inventory

(382

)

(3,198

)

Cash flows used in operations

(47,356

)

(29,806

)

Income tax and other taxes received

3,921

581

Interest received

114

(33

)

Net cash used in operating activities

(43,321

)

(29,258

)



Cash flows from investing activities

Acquisition of intangible assets and goodwill

(30,237

)

(17,210

)

Acquisition of property, plant and equipment

(4,919

)

(1,284

)

Grants received

118

314

Prepayments for tangible and intangible assets

(6,416

)

(1,077

)

Cash received on acquisition of entities, net of consideration paid

-

59

Net cash used in investing activities

(41,454

)

(19,198

)



Cash flows from financing activities

Cash received from merger with CIIG

534,413

-

Increase of Preferred A shares

-

10,000

Repayment of interest

(41

)

(24

)

Repayment of lease liabilities

(2,305

)

(1,963

)

Net cash from financing activities

532,067

8,013



Net increase/(decrease) in cash and cash equivalents



447,292



(40,443



)

Cash and cash equivalents at January 1

67,080

96,644

Effects of movements in exchange rates on cash held

1,469

(155

)

Cash and cash equivalents at March 31

515,841

56,046

*Comparative figures are of Arrival Luxembourg S.à r.l.

Reconciliation of GAAP to Non-GAAP financial measures for the three months period ended March 31

In thousands of euro

2021

2020*

Operating loss

(1,063,831

)

(16,146

)

Adjustment for cost of reverse merger transaction

Listing expense

1,018,024

-

Transaction bonuses***

13,392

-

Operating loss before transaction

(32,415

)

(16,146

)

Adjusted for:

Depreciation

4,184

2,384

Share option expense

1,199

-

Adjusted EBITDA

(27,032

)

(13,762

)

***Following the successful merger with CIIG certain executive officers of the Group received a onetime bonus. This is included in administrative expenses in the Income Statement

Notes:

During the period, the shareholders of Arrival Luxembourg S.à r.l. contributed their shares in the company for shares of Arrival. As a result of this transaction, Arrival has become the parent company of the Arrival group of companies.

For the purpose of the above financial statements, comparative financial statements for year ended 31 December 2020 and quarter ended March 31, 2020 consist of consolidated financial statements of Arrival Luxembourg S.à r.l. pre-merger



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