Interim report January – September 2015 Continued strong growth · Net sales increased by 98 % to 400.1 (201.8) MSEK · Operating income increased to 36.2 (6.3) MSEK · Net income amounted to 21.6 (41.9) MSEK (2014 includes tax effects of approximately 23 MSEK) · Earnings per share amounted to 1.11 (2.29) SEK · 34 (20) systems were delivered in the period · Order intake increased to 29 (21) systems For the third quarter: · Net sales increased by 52% to 138.1 (90.8) MSEK · Operating income increased to 12.6 (10.2) MSEK · Net income amounted to 4.9 (38.0) MSEK · Order intake increased to 12 (5) systems · 11 (9) EBM systems were delivered in the third quarter Continued strong growth In the first 9 months we delivered 34 (20) EBM systems. Sales for the period amounts to 400.1 (201.8) MSEK and trailing twelve month sales amounts to 537.3 (268.8) MSEK. We continue to grow rapidly and in the first nine months growth was 98% of which 62% was organic growth. Operating income for the first 9 month of the year was 36.2 (6.3) MSEK and trailing twelve months, operating income amounts to 51.5 (13.2) MSEK. The order intake for the 9 months amounts to 29 (21) EBM systems orders, whereof 12 (5) orders were booked in the third quarter. Long-term, we see a continued strong demand, and we expect a continued strong order intake. The order book as of September 30 was 14 EBM systems. Business status In the period we received several significant orders for EBM systems. An important reference is the order from GKN Aerospace for two Arcam Q20 systems received in March. With GKN we collaborate closely to facilitate the introduction of the Arcam Q20 for manufacturing of aerospace components. Our customer Beijing AK Medical announced in August that they received formal approval from the Chinese State Food and Drug Administration (CFDA) for EBM manufactured implants. This was the first CFDA marketing approval for an additively manufactured orthopedic implant. In September Beijing AK Medical ordered 5 Arcam Q10 systems for manufacturing of these implants. In the third quarter our customer CalRAM ordered 2 EBM systems, in addition to the 5 systems they already have. Hence, we see that our EBM customers are now rapidly expanding their production applications for our EBM systems. 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 contract manufacturer DiSanto in the US. In the third quarter DiSanto received an order for 20 MSEK for contract manufacturing. 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 of sales and support engineers. In the UK, a new office was inaugurated in Warwick and in the US a new office was opened in Woburn, MA. 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. 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. In the third quarter we decided to, based on the strong demand, further expand our capacity at AP&C with two additional powder reactors. After the expansion AP&C has an atomization capacity of well over 150 tons of titanium alloys per year. In the third quarter, we strengthen our marketing organization by setting up a central marketing function for the Arcam Group, based in the United States. The new marketing organization will manage and coordinate Arcam´s global marketing, including branding and marketing communication, in order to fully utilize our strong position in the aerospace and medical implant industry. 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 US-based 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 452.9 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 14 EBM machines on order, a stable aftermarket and a positive business environment we are prepared for a strong closing of 2015 and continued growth in 2016. Mölndal, October 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 October 21, 2015 at 08.30 (CET). Telephone conference with CEO Magnus René and CFO Johan Brandt October 21, 2015 at 2.00 p.m. (CET) Phone number to the conference: SE: +46 8 566 427 00 UK: +44 203 428 14 10 US: +1 855 831 59 44 Link to presentation: Arcam Q3 conference call (http://event.onlineseminarsolutions.com/r.htm?e=1047225&s=1&k=CF38F1685729 2 8B1F3AF7EB43F98CA9D) 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. ________________________________________________________________________________ _ _______ Arcam AB • Krokslätts Fabriker 27A • SE-431 37 Mölndal, Sweden • 46-31-710 32 00 • www.arcam.com
Arcam AB Reg. no 556539-5356
| Source: Arcam AB
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