Interim report January – June 2015

High delivery pace
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).
For further information please contact:
Magnus René, CEO Arcam AB
Tel: 46 31 710 32 00, alt. cell: 46 702 79 89 99, or e-mail:
magnus.rene@arcam.com
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.

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