Freemelt Holding AB (publ) ($FREEM)

2:00, and we welcome viewers to this digital investor meeting where we are joined by Freemelt. If you viewers have any questions during this broadcast, you may ask them in the chart below, and they will be addressed during Q&A. But without further ado, it is time to introduce our speaker, and I turn now to CEO, Daniel Gidlund. Welcome.

Thank you. So good afternoon, everyone, and thank you for joining us today. With us today, we also have our CFO, Martin Granlund; and Head of Energy, Per Woxenius; and I'm especially pleased to welcome Goran Backlund from Saab as well. We have a lot of interest in material to share. So let's get into it. So let me start with the headlines. If we look into our last 12-month revenue, it's up 162% year-over-year if you take from end of March this year. We now have 42 machines deployed, but I think more important story is what's happening across our 4 verticals. In defense, we secured a follow-on order from a leading Swedish defense customer. We have also successfully wrapped up the copper project with Saab [indiscernible] Linchpin University, where Phase 2 is being discussed. In fusion, our Fusion for energy Tungsten tile work is progressing well, and we also received a follow-on order from UKAEA as well. Regarding machine sales, we have booked 2 new Freemelt ONE order so far, which is Series in Belgium and printed in Sweden. In MedTech, we have 2 orthopedic OEMs running proof of concepts on our industrial machine email. And here, we also had a successful upgrade of the machine at one of the clients. So I will say real progress across the board. I want to spend a moment on where Freemelt now is in its journey because we are entering a new chapter. And I think personally, I think this is the most exciting 1 yet for Freemelt as well. If we take a step back, Chapter 1 started back in 2017. Then we built an open source platform optimized for research, which was the Freemelt ONE machine. And we used those years to prove that our technology could handle extreme materials light Tungsten, for instance, but also copper titanium as well, which are core focus areas. On top of this, and I think this has been the let's say, the DNA from the start from Freemelt is also to collaborate with our customers that have purchased our machines, and they have also at least validated more than 35 materials as well on top of this. Chapter 2 did begin in 2024, and that was related to when we launched our industrial machine e-MELT. And then we moved, so to say, from the lab into more co-development with the industry. Saab is one of them that I mentioned before. I mean, the leading orthopedic manufacturers also Fusion Energy. We have UKAEA, we have Jiuli, IHI and also several undisclosed industrial collaborations. And I would say, since 2024, we have been managing a bit more than 30 paid customer projects, and all these projects are related to some sort of interest or intention of [indiscernible] producing of new type of applications. And now, as I said, we're entering a new chapter, Chapter 3. And this is the chapter where we, as a company, should scale. And now we're combining our 3D printing machines also with finishing, machining, quality control, so we actually can deliver the finished certified parts straight into our customers' assembly lines. This means it's the same playbook, but a much bigger market. And we estimate somewhere between EUR 41 billion and EUR 51 billion in total accessible market. So where will the next orders actually come from during Chapter 3. We had 3 demand pools, which are converging on our technology. And it starts with medtech. So I'll start with medtech then Par will continue on the other 2. So Medtech, as I mentioned before, we work with 2 top orthopedic OEMs and they are running proof of concepts on our industrial machine e-MELT. On top of the proof of concepts. These clients also as this is a regulatory industry, they must go through a certification phase as well, which typically takes another 12, 18 months. And the good part is that when you really pass the certification then you really also get in long term as well because when it's regulatory, you don't really want to change the technology. So medtech is the industry that with the highest adoption of serial production of AM. And they are expecting also to have a CAGR of 16% until 2032, reaching EUR 5.7 billion. So with that said, Per, I hand over to you.

Okay. Again, my name is Per Woxenius. I'm Head of Energy and work primarily with Fusion Power. I'm going to tell you what we do. But before that, I want to say why we do it and why does the customers want our technology. First is that the material quality that we can do parts of the quality, material quality in times [ tan ], but that's not been possible before. When it comes to density, when it comes to control of microstructure, et cetera. So that is what a material scientists love at Fusion by Energy. We can do parts with a longer life because if we make part of a more complex shapes, we can design them for a longer life, and that is what we engineers like at Fusion for Energy. Resilience has become much more important, both in defense but also in energy. And the director at Fusion for Energy, that is one of the main points for him when he wants to use our technology. And finally, all of this is only of interest if this is cost competitive, and it is compared to traditional methods. ITER. ITER is the world's largest research project. In the world, it's about a EUR 30 billion project. Europe stands for 40% of it and its Fusion for energy that lead is. And one example of this is what is called the first wall panels. In total, we are 440 panels which will be sort of inside of ITER covering 800 square meters and 60 of those has already been ordered. So there are 60 [ panapanics ] already in production. It's an order of about in total, EUR 200 million, which is 2 different companies share. And what happened about 2 years back is that the switch from material called brilliant earth tungsten. So now they will put tungsten tiles on all of these. And this is about 185,000 tiles that needs to be placed on these panels. And now we have issue with China. It's not sort of a China can deliver or the opposite is probably that they cannot deliver types they need someone else doing it. And we are 1 of the possible options. And [indiscernible] would be around probably about EUR 20 million if this translates. On top of that, there are at least 45 private companies working on this. In Europe, we have a Proxima Fusion. We have focused energy and quite a bit more, and we are talking to many of them, and all of them look at ITER and see what they do and see which technology is used and plan to use similar technologies. And what is the status now? We are currently qualifying tungsten together with Fusion for energy. Investigate material quality, but also joining technologies between us and heat exchangers. And when it comes to UKAEA, the United Kingdom Atomic Energy Authority, we have had one more order coming in, and that is follow-up order on meter science. So we work closely with them as well. We should have got forget big science because there are a lot of connections with Fusion, which is the big science technology and other experiments. This morning, I was in meetings with [ Serne ] that they are looking at the new science experiments coming up further. We also, of course, are in discussion with ESS and other accelerators. And the benefit with this technology, what is needed in big science, they have the same requirements as Fusion. So we don't have to sort of invent again or reinvent the wheel. We can just piggyback on what's happening in Fusion. And again, these are also quite cost experiments in the next 10 years in Europe alone, about EUR 32 billion to EUR 42 billion reduced for exporting these facilities. And again, we are working on different tendering processes and for different accelerators at the moment.

Excellent. Thank you, Per. So let me just make a quick introduction and update also regarding defense. And then I'll let Joan introduce you more specifically to Saab. So the reason additive manufacturing matter in defense comes down to a few things. First, supply resilience countries these days want to print critical parts at home speed. Additive manufacturing can make -- you go from CAD to fly test in weeks. Cost roughly for some applications like in missile components, 1/10 of the legacy component at scale. And also, I think, unfortunately, maybe to say, but if you look into replenishment the global complex are depleting stockpiles faster than traditional supply chains can keep up. And if you look into our technology, it fits in components where conventional methods and other, let's say, AM methods fall short as well. And typically, this is like hypersonic missile parts, that can survive extreme heat. It can be complex munitions and also propulsion components. So with that said, I'd like to hand over to Goran Backlund from Saab, who will take you through a deep dive regarding the additive manufacturing within Saab. So please, Goran.

Thank you, Daniel. I'm chairing the Saab AM Board. We have a collaborative effort on additive manufacturing for Saab. So we can take the next one here. And this is so. I mean, just a glimpse of the different areas that we operate in from jet fighters with aeronautics, underwater systems like submarines but also surface vessels. We have command and control and sensors that is radar systems for airline and sea. And to the left, you have advanced weapon systems, and I'm representing advanced weapon systems. But since additive is a relevant technology for all these different business areas within Saab. Our management team decided many years ago now to let us collaborate on this area because these 3 different -- these different business areas are very independent, and we don't usually collaborate that much. But on a technology basis, there is a good reason to do so. So we don't duplicate work. So we can take the next slide. And we have very good management support for additive. And this is Micael Johansson, the Saab Group CEO, and it has to remain relevant. Each and every one of us must stay curious and embrace new technology. Now that we need to increase volumes, AM is a strategic technology that Saab is truly committed to. And that's true because this slide is taken from a video and it's an internal campaign that we have been running for about a year now that we call AM first. which is the call for the organization to really consider AM first as a means of production. We can move on. The Saab AM Group. To the left, you can see we have representatives from all the different parts of Saab that I just mentioned. And we meet on a regular basis. And what we do, you see to the right, we have derived the Saab AM strategy. We're currently running the Saab AM-first campaign. We have also developed what additive means to our way of working. So we have now an AM handbook for people to use. This is how you go about additive. And if we click once, you can see we have also derived a Saab AM learning path package, training package for our engineers available on our Internet. We have also together, which is pretty uncommon, run projects together, qualify materials, a materials. So we now have about 3 different alloys available to our designers. They don't have to worry about the material properties. They have been proven, so they're ready to use. We also work on this common Saab-approved AM supplier list. We don't produce the components ourselves. We rely on our supply chain. And as Dennis pointed out, the security of supply is pretty important these days. To the right, you have operated picture from the annual Saab AM Day that we run digitally once a year to spread knowledge within the Saab Group on what happens on additive. And we usually have 700 attendees during that day. And the way we do this now, we keep each other informed between the different business areas. We all know what the colleague in the other business area is doing and we try as much as possible to find the Saab common solutions and work together. I can take the next one. Now I'll just show just a few AM applications coming from these different parts of Saab. So we can take the first one. And this is now 12 years ago. And what you see in front of you is the Carl Gustaf antitank weapon on a test stand during the qualification tests 2 years ago. And this is a titanium weapon, lightweight titanium weapon to be fired from a shoulder. And against a tank or some other target. To the left, you can see the bridge or the venture. It's a regardless rifle. So the venture sustains a lot of mechanical pressure thermal load and gas flow, supersonic gas flow. So it's -- we chose that part as a test article to prove to colleagues that additive is good as any other metal. So to the right, you can see the bridge, it was printed in with electron be melting and was put on the test end and we fired 3 1st rounds. And that performed just as well as any other of the breaches even though some colleagues didn't believe that the bridge could take the load, but it did. So what we proved was that printed titanium is just as good as any other titanium. Next, this is another titanium part printed with IBM. That's a missile rather. You can see the missile to the right. And in the little red ring, you can see the rather. And it's about 10 to 12 centimeters big. And the challenge here is actually production. Today, it's milled. And it's pretty hard to mill because it's so thin. But we proved here that you can print it just as well, and you can put a lot of others on one plate and produce a lot of them. You see a little pin on the top of the fin. It's not part of the Fin and that is only for post processing. So you can fixate the rather after it's printed in a milling machine and finish the part. And then it's taken off. So it's not part of the rather itself. It's just for a fixture. Next one. This is actually the first component that went into serial production and it's a cool plate in part of an airborne cooling system. To the upper left, you see the cool plate, it's 4-millimeter stick, but it's hollow. And high-power electronics sits on both sides of this cool plate. And the coolant runs, you see the inlets and exit with the red plugs, runs in the plate picks up the heat and the complexity actually sits inside this plate. And we have used additive to boost the heat transfer of this plate. So you can see some of the results at the bottom. It's now printed as 1 part. It was originally intended to be assembled from several different parts. And since it's 1 part, it's leakproof. We reduced the weight of the cooling circuit by 50%, and that includes a flow distributor to the right where you put 4 of these different cooling plates. You see the assembly to the far right. People also started to innovate using additive because of the greater design of lope and that rendered on patent. And this is in serial production, and it's an air boring system. So it's been qualified for its use. Next one. Here, you have our antiship missile, Robot 15. And we did part screening some years ago to find which parts could we print that is a good business case for the product. And we started with a low criticality component like the front cover skin. It's on the leading edge of each wing on the missile. You have 4 wings per missile. And under the missile, you can see to the left, the original design, it was 2 stamped parts that were manual welded together and riveted bottom on that. Now we employed the topology optimization and used all these parts and made it as 1 part now printed where we save cost and lead time and weight and part reduction. So it was a pretty good case to start with, especially since it's low criticality. And I think we have another case on the same product. Next one, Yes. This is my last example. This is the air intake to the same missile, but the next generation mark for robot 15 under development. And you see their intake there to the gas turbine that sits at the end of the missile. And it was originally designed for carbon fiber to be produced in carbon fiber. But we had some challenges there. So we had to look at other alternatives and it's now a very thin double-walled titanium solution in let there. I think if we once more, we can see some figures yet, yes. We reduced the cost substantially for this 1 and lead time. and even wait even though that original part was carbon fiber, and we reduced the number of parts. And the last 2, I've shown you now the air intake and the front cover skin for the robot 15, there are in the phase of actually going into production right now as we speak. So that's intended to be a production. And I just wanted to conclude to say what I showed you is what I'm at liberty to show you. The absolutely coolest cases, I cannot talk about. But it's -- sometimes it's pretty breathtaking what we can do with additive when we get round to be innovative about it. So I see a lot of promise for the future with additive for Saab. Thank you very much.

Thank you, Goran. I think it's really impressive. I know the let's say, how much you've been fighting for this and leading this as well? And just the fact to establish also culture in the organization in regards to new technology. I think that's really a big step. So it's really well done. So as I mentioned before, I mean, Chapter 3 has started now for 3 months. And 1 of the first and key components of this chapter as well is also then the warrant now where the subscription actual starts today. So with that said, Martin, can you please share some further insights about this as well?

Absolutely. Thank you, Daniel. So the warrant is a tail financing from the share issue, which was done in the first quarter of 2025. The subscription period starts today, the price is set to SEK 0.9, which will provide the company with up to SEK 36 million in total. And the proceeds will be used to commercialize the company. build the pipeline for the coming years, convert the pipeline to sales, identify additional use cases or the commercialization is the first important part of this. The second is the industrialization, which also includes the parts production, the defense and medtech qualification ongoing and to prove the machine in production environment. We have already communicated that the 3 largest shareholders, management and the Board intend to subscribe in the share issue. So we have -- we're confident that the outcome is going to be good.

Excellent. Thanks, Martin. So let me bring this back to where we started and highlight Three things to remember from this session, hopefully more, but at least these 3 things. I mean, first, we are scaling parts production. Tungsten volumes for Fusion and big science like Per showed before, is happening now, not in 5 years now. Two, we are converting the pipeline. Our aim is, of course, that the proof of concepts now both with Saab, with our orthopedic OEMs are progressing towards in cases of multi-machine orders and also recurring revenue as well. Three, we are now indeed Chapter 3 also unlocking EUR 41 billion to EUR 51 billion addressable market. So this comes by not just selling machines, but also selling qualified parts as well. So finally, I'm really thrilled about what Chapter 3 will bring. And of course, I would love to have you with us and supporting us during this chapter as well. So with that said, thanks for your attention. And yes, let's open up for questions.

[Operator Instructions] Yes. Thank you very much, Daniel, and also thank you, Martin, Per and Goran. Goran, I have some questions specifically for you as well. But before we do that, I would also like to remind of you or that to continue to ask questions in the live chat. So Daniel, I think I'll finish off where the slides ended to your subscriptions. At full subscriptions, Freemelt will receive SEK 36 million before issuing costs. the subscription period, as you mentioned, begins today. From the company internally, will you all subscribe to your share of this the rights?

So I can I can jump in and respond to this one. So as I mentioned, we have intent from the management team. We have intent from the Board. we have intent to describe from the 3 largest shareholders. We have a number of colleagues who are also shareholders. But we haven't done the exercise to ask each and everyone. But I'm pretty confident most of them or all of them will subscribe, but we haven't asked specifically.

You mentioned that you will increase focus on part production once you compete with your machine customers?

Yes. But I think that's also, of course, I mean, we've been careful as well in this hybrid, let's say, approach. I mean the I think Goran also described it well. I mean, some of the industries has always started to adopt to additive, which means also started to design for additive manufacturing well [indiscernible] clients for them, we don't need to educate them. We don't need to push them to understand the value. They have operators. They have processes. They have factors already set up. So they need front from a machine point of view. So that's how we deliver to them. If you go to industries like Per mentioned, for instance, or let's say, less mature from additive, then there is pretty much no supply chain establishes well, which means that we can be a part of building the supply chain. So there is not too much of competition. So that's how we really has differentiated the go-to-market.

Production of the tungsten parts. Sorry, where will you do the production of the tungsten parts?

Okay. So yes, so at the start, so we have our head office here in Gothenburg, where we also have machines in-house as well. So the starting phase will be here in Gothenburg. And then, of course, in expansion that might be also depending on the region, as we all talked about before about the let's say, resilience, by resilience. So -- but starting point will be here in Gothenburg, Sweden.

I will -- before I hand to Goran, I will ask some questions that came in during the broadcast. How much has free milk put on development and research so far.

Was that for me?

No, no, Goran. I'll get to you in just a moment. But this is for Freemelt. How much is Freemelt put on research and development through the years?

So thank you for the question. So the company has since inception had investments of around SEK 350 million. The vast majority of this has gone into research and development of the product suite that the company has today. So I can't give an exact number, but the overwhelming majority of this has gone into product development.

Other questions asked the following. How durable are the printers, how many items can be printed before maintenance is required on the machines.

That's also a difficult question to answer because there are so many ifs and buts and so forth. But I mean, typically, what you have, depending on the application and the material, you have then a scheduled maintenance that needs to happen. But yes, it's very difficult to say the number of hours, et cetera. But these machines, I mean, in general, they are located in very nice clean environment and good temperature control, et cetera, as well. So the lifetime of a machine is fairly, let's say, long [indiscernible].

I now turn to you, Goran. From SAP's perspective, what makes metal additive manufacturing strategically interesting for the defense industry.

A couple of things, actually. As I mentioned, first, security of supply. And what we talk about in defense is these days is combat mass, and that is to produce higher volumes at lower cost. And that means we cannot produce the way we produce today. We need to automate. And I see additive as a first step towards automation. We build a part in a machine. And if 1 machine is not enough, you can put another 1 next to it and then another one, and it scales very good. So security of supply is one driver. But also the -- if you take a look at the Saab product portfolio, we build very complex products with sometimes pretty exotic alloys and our volumes are not that big, at least they used to be low-volume products. And for that additive is great. And additive with its greater design space also allows for us to optimize for functionality in a way that we haven't been able to before. That's one of some of the reasons.

And with the collaboration with Freemelt, where are you today?

We have, as Daniel pointed out in the beginning, we have had a research program together on oxygen-free copper which, from our perspective, is interesting if we can print copper parts fast, it can reduce our research and development cycles. We get faster in developing and arrive at the final design for a specific part. And then after that research project, we continue our collaboration on the same halo in the copper. And around the corner, we have some possible tonnes on applications that are interesting to pursue.

Yes, there are 2 questions in the chat. The first one asks you the following. Are all the examples given from Saab made with free males machines?

No. These are taken from history. And no, the short answer is no. But we have used the same technology when Freemelt milk was not around. As I -- the first example 12 years ago with the Cargotoenturi, but also the missile fin was printed with electrum-melting [indiscernible] fusion.

The other question is the following. You mentioned that you are typically sourcing components? What would it take for Freemelt to qualify as a contract manufacturing partner.

That we can see a good business case. It's not harder than that. I mean we don't have machines in-house itself. We have polymer machines. A lot of them but no metal machines. For metal, we rely on the supply chain. So I see a possibility for Prime to become one selected supplier in our approach suppliers list.

And I move back now to Freemelt melt as we have another viewer question here. Which categories of defense components do you expect to experience the highest demand growth over the next 3 to 5 years.

Sorry, which -- can you repeat that?

Which categories of defense components do you expect to experience the highest demand growth over the next 3 to 5 years?

Of course, I mean, it really comes to the point that we need to succeed in those different application development products that we are running. But as I mentioned before, it's components within type of hypersonic missiles, in munitions or really high heat resistance type of applications.

Another question, what type of tongs and components in the ordinance industry are best suited for 3D printing? And could you give us the reasons why?

I think Per maybe you can answer that.

Absolutely, which part of tungsten is really a sustaining that has a high density. So you find it's a in penetrators. You can find it also maybe [indiscernible], et cetera. But you will also find it where you have solid [indiscernible]. If you have like some sort of weapon but kind of, but it has to be stored for years and years. then you cannot have a cooling in the rocket engine, so to say, over for you, we need high-temperature materials. So I would say in the top part of the hypersonics or the base part of it.

Per, I think I'll continue with you. You mentioned that the tile production demand is now and that ITER is in need of 1.5 million tiles. When does that convert?

It's a very good question because if you mention the numbers, people think it's a long time ahead. But we talked about the 60 blankets being built right now. That is happening now. First stage now is qualified bonding methods. The second stage is to do the heat testing, the third step is to test the blankets and body is happening now in the next say, 2 years, you do all of this. And so that is happening now. What we didn't mention is that there will be a temporary wall, which will be built in 2032. That will also be in tungsten and that's also have discussions. And finally, I would like to emphasize it is not the only place where we act. It is not the only place where we fit fusion power plants. The quickest traction we find in commercial companies. And they look to eat well look the U.K., but which technology has been developed. So we shouldn't forget everything that is happening in parallel.

Could you give us a little bit of a description on the competition -- competitive landscape in Fusion tiles production?

It all comes down to what quality is needed because there are quite a lot of higher requirements on it. And what I see so for electron melting is superior to many applications, and it's also cost competitive. But that will translate that also our competitors will be interested and want to move into this market. And we cannot expect that we get 100% market doesn't look like that. We will have competition. But what we do much better than competition is to hand the low-cost powder we can you use power which is much less expensive than the competition.

I read now from the chat. Do you know if the 2 companies that won the contracting of the tungsten tiles started their production? Or are they planning on how to do it? Is there a chance that they will use you as a contractor?

I would say just always the parts has a -- first walls have been produced. They have been qualified, but they have not fitted with tungsten because of that decision waits -- but I cannot go into more details where we are right now. But of course, we know them and of course, they know what we do. I think I'm not going to say more.

There's one other question. On Fusion Energy, what is the time frame for delivering the first 60 wells to it is the project with a UKAEA coordinated with the F4 and ITER? If so, how?

I will say the opposite. Since the U.K. left European Union, they do not work together but sometimes they speak through us, and of course, the share information. But there are no direct cooperation. But all of them -- everyone is [indiscernible] would love it to happen.

If the Jiuli partnership develops according to plan, how significantly could the Chinese market become for Freemelt revenue within the next 5 years.

I mean I can answer that. So as we mentioned before as well, I mean, we did a thorough, let's say, assessment before we enter into the Chinese market and I mean the Chinese market is the fastest growing from adopting to additive manufacturing as well. So that was, let's say, the decision while we enter there and also to find the right partner. And Jiuli, I think, is really an impressive partner. They're not a typical reseller of additive equipment. They are a leading global company, especially in energy components. So I think if you look into typically Chinese, when they invest was 1 they invest for long term, and they also do the homework pretty good prior. So yes, I would say the Chinese market as such is huge. And I think with that said, of course, I mean it hopefully becomes really a big success also from a female perspective.

Then I believe we have the last question here. How far have you come in the 12 to 18 month time frame of the certification implant process?

As I tried to explain, when it comes to the certification part Freemelt is not a part of that. So that is completely in the hands of the orthopedic OEMs. So at this moment now, we are in the proof of concept that one started end of 2024 and then one in mid 2025. So that's where [indiscernible].

Thank you very much, Daniel Gidlund, Freemelt and of course, Goran Backlund.

Thank you all.