Arrival Reports First Quarter 2021 Financial Results
Arrival (NASDAQ: ARVL) reported its Q1 2021 results, maintaining an adjusted EBITDA loss of €27 million, an increase from €14 million in Q1 2020. Administrative expenses totaled €39 million, while R&D expenses stood at €7 million. Capital expenditures reached €41 million, and cash and cash equivalents were €516 million as of March 31, 2021. The company highlighted progress in vehicle design, testing, and Microfactory commissioning, with trials set to begin with UPS in July. Collaborations with STMicroelectronics, Hitachi, and Ambarella were also announced.
- Collaboration with STMicroelectronics to enhance vehicle portfolio.
- Partnership with Hitachi Europe for new bus and infrastructure solutions.
- Engagement with Ambarella for advanced driver assistance systems.
- Cash and cash equivalents of €516 million as of March 31, 2021.
- Adjusted EBITDA loss increased from €14 million in Q1 2020 to €27 million in Q1 2021.
- Administrative expenses of €39 million may indicate rising operational costs.
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
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Investors
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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
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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