Arcam: Interim report January – June 2015

MÖLNDAL,, Sweden--()--Regulatory News:

Arcam (STO:ARCM):

High delivery pace

· Net sales increased by 136 % to 262.0 (111.0) MSEK

· Operating income increased to 20.4 (-3.8) MSEK

· Net income increased to 15.9 (3.9) MSEK

· Earnings per share increased to 0.78 (0.21) SEK

· 23 (11) systems were delivered in the period

· Order intake amounted to 17 (16) systems

For the second quarter:

· Net sales increased by 227% to 150.6 (46.1) MSEK

· Operating income increased to 18.2 (-6.1) MSEK

· Net income increased to 12.0 (0.4) MSEK

· Order intake amounted to 7 (10) systems

· 14 (4) EBM systems were delivered in the second quarter

· A stock issue brought in about 250 MSEK

High delivery pace

In the first 6 months we increased our delivery pace and we delivered 23 EBM systems. The last twelve months we thus delivered 47 systems. Sales for the first six months amounts to 262.0 (111.0) MSEK and trailing twelve month sales amounts to 490.0 (218.3) MSEK.

We continue to grow rapidly and the second quarter was our best quarter ever in revenue and operating income. In the first six month growth was over 136% of which 90% was organic growth. Operating income for the half year was 20.4 (-3.8) MSEK and trailing twelve months, operating income amounts to 43.8 (3.7) MSEK.

While we had a strong growth in deliveries, turnover and operating income, the order intake for the 6 months increased more slowly with 17 (16) EBM systems orders. Long-term, we see a continued strong demand, and we expect a stronger order intake in the second half of the year. The order book as at June 30 was 13 EBM systems.

Business status

In the period we received two significant orders for EBM systems. An important reference is the order from GKN Aerospace for two Arcam Q20 systems received in March. The order is part of a Joint Technology Development Partnership between Arcam and GKN Aerospace where we collaborate closely to facilitate the introduction of the Arcam Q20 for manufacturing of aerospace components. Another important deal is the order from FIT Technology Group in Germany for two Arcam Q20 systems received in June. FIT, a customer of Arcam since 2004, is one of the major European contract manufacturers within Additive Manufacturing. FIT today operates two Arcam systems and these two new Arcam Q20 systems represent a major increase of capacity.

While sales of our EBM systems continue to grow, so do the sales of our subsidiaries, the metal powder manufacturer AP&C in Canada and, after a weaker period at the turn of the year, contract manufacturer DiSanto in the US. We now have an offering to our clients with our EBM systems as the hub and metal powders and contract manufacturing being important supplementary products which broaden our offer to the market and provide recurring sales.

Strengthened organization and infrastructure

During the period, we strengthened our sales and support organizations in the US, China and in the UK through recruitment. In the UK, a new office was inaugurated in Warwick.

With our new branch offices, we move management, customer service and logistics closer to our customers.

In the first quarter we started a major expansion of our production facilities in Mölndal. With the expansion we more than doubled our production area and we opened a new demo and customer training center. Part of the new facilities are already in use and the expansion will be finalized during the third quarter.

Earlier this year AP&C completed the start-up of its third atomization reactor. The new reactor gives a significant increase in capacity. AP&C now has two production lines, encompassing reactors and related sieving and mixing equipment, fully dedicated to titanium products. A third reactor is dedicated to Inconel and other alloys. After the expansion AP&C has an atomization capacity of over 150 tons of titanium alloys per year.

The strong growth, expansion into new markets and the development of our acquisitions will require further development of the organization, both within the core business and at the subsidiaries. To continue to develop our technology and take advantages of the business environment, we have a very ambitious recruitment and growth plan.

Financial position and ownership structure

In May, Industrifonden sold its entire position in Arcam, corresponding to approximately 10.4 percent of capital and votes. The buyer was American Oppenheimer Funds. After the deal Industrifonden has no ownership in Arcam. Industrifonden has been involved in the company since 1999, first as a lender and, since 2002, as an owner. Oppenheimer has been a shareholder of Arcam since 2014 and, with the new deal, became the largest owner with more than 15% of the outstanding shares.

On May 27 we completed a share issue of 1.8 million new shares directed to Första AP-fonden, providing the company with approximately MSEK 250 before transaction costs. Första AP-fonden represents an engaged, long term ownership which the board expects will contribute to the development of the company.

After those transactions we have a new ownership structure and a very strong cash position. At the end of the second quarter we had approximately 465 MSEK in cash. The strong balance sheet provides financial stability that is much appreciated by the large clients we work with in long term projects.

With 13 EBM machines on order, a stable aftermarket and a positive business environment we are prepared for continued strong growth in 2015.

Mölndal, July 21, 2015

Magnus René, President and CEO

The above information has been made public in accordance with the Securities Market Act and/or the Financial Instruments Trading Act. The information was published on July 21, 2015 at 08.30 (CET).

Arcam Group provides cost-efficient Additive Manufacturing solutions for production of metal components. Arcam’s Electron Beam Melting (EBM®) technology offers design freedom combined with excellent material properties and high productivity. Arcam is, through its solution orientation and comprehensive product offering, an innovative partner for advanced manufacturing, primarily for the aerospace and medical industries. Arcam offers EBM systems through Arcam AB in Sweden, powder metals through AP&C in Canada and implant contract manufacturing through DiSanto in the U.S.The company is listed on Nasdaq Stockholm and the Head Office is located in Mölndal, Sweden.


Arcam AB • Krokslätts Fabriker 27A • SE-431 37 Mölndal, Sweden • 46-31-710 32 00 •

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Arcam AB
Magnus René, CEO
Tel: 46 31 710 32 00
alt. cell: 46 702 79 89 99


Arcam AB
Magnus René, CEO
Tel: 46 31 710 32 00
alt. cell: 46 702 79 89 99