Arcam - Year-end Report 2016

MÖLNDAL, Sweden, Feb 07, 2017 /PRNewswire/ --

• Net sales increased by 12,5% to 648.3 (576.1) MSEK
• Operating income amounted to -29.8 (50.2) MSEK
• Net income amounted to -10.8 (24.3) MSEK 
  (the operating income and net sales for the period includes non-recurring costs of 44.8 (0) MSEK) 
• Earnings per share amounted to -0.52 (1.18) SEK
• 50 (50) EBM systems were delivered during the period
• Order intake amounted to 48 (58) EBM systems
• GE has acquired 76.1% of all shares in Arcam

For the fourth quarter:

• Sales increased by 18% to 208.1 (176.0) MSEK
• Operating income amounted to -29.1 (14.0) MSEK
• Net income amounted to -17.5 (2.7) MSEK
  (the operating income and net sales for the period includes non-recurring costs of 44.8 (0) MSEK) 
• Order intake amounted to 24 (29) systems
• 15 (16) EBM systems were delivered in the fourth quarter

Significant events after the end of the period:

• The company has called for an extraordinary general meeting on February 7, 2017 at 4 pm (CET).
• The company has received an unconditional shareholder contribution of 16.9 MSEK.

Major investments and challenging market situation

After a strong fourth quarter, we closed the year with net sales of 648.3 MSEK and an operating profit of -29.8 MSEK. The underlying operating income amounted to 15.0 MSEK  after adjustments for non-recurring costs.

During the year we booked 48 new EBM orders, a decrease compared with the previous year when we reached 58 orders. We enter 2017 with an order book of 25 systems.

The second half of the year was dominated by GE's tender which for us is a strong confirmation that the business that we have built together now becomes a major player in the additive manufacturing industry. The bidding process had an impact on our operations since management had less time to act in the market. Our EBM customers took a somewhat cautious position and we see that it takes longer to close new orders.

We continue to pursue and develop our long-term strategy to industrialize the EBM technology and simultaneously developing the metal powder manufacturing and contract manufacturing businesses. We invest significantly in technology, marketing and manufacturing capacity to meet our customers' demands and growing expectations on productivity and reliability.

Business status

During the fourth quarter we delivered 15 EBM systems to customers in the implant and the aerospace industry. In the period we received 24 new orders and the order book by the end of the quarter amounts to 25 systems. The demand for EBM systems is driven by how quickly our customers in the aerospace and implant industry are moving towards production, a process that is dependent on both technical and commercial factors. 

During the period Arcam Q10plus and Arcam Q20plus were launched. The new systems are anenhanced version of the Arcam Q-series EBM systems for Additive Manufacturing. Arcam Qplus offers up to 25 % higher productivity with improved surface finish and precision. With Qplus Arcam also introduces Arcam xQam™, an X-ray based function for high precision auto-calibration and improved beam control.

Our contract manufacturer DiSanto continues to be burdened by weak sales for implants made with traditional technology. In the period several new customer projects for EBM manufactured implants have been added. Revenues from this part of the business is increasing but is still not compensating for the weak sales within traditionally manufactured implants. Hence, we have in the period written down the parent company holding in DiSanto with 28 MSEK. This has no effect on the consolidated numbers for the group. 

The EBM business and contract manufacturing have been characterized by slow growth, while in metal powder manufacturing we have grown significantly.

We have continued to develop synergies between EBM® systems, metal powders and contract manufacturing and we now see that our broad offering is well received by the market. We have also made significant investments in capacity expansion to continue to meet the demand for our customers' growing needs.

AP&C expands

To meet the growing demand for AP&C's high quality titanium powder for Additive Manufacturing, we continue to add significant capacity by building a new powder manufacturing plant. By the end of 2016 we had 8 reactors in operation in the existing facility in Montreal.

In May we decided to increase further by building a new powder manufacturing plant outside Montreal, Canada. The new facility will provide manufacturing redundancy, short term capacity increase and long term expansion capability. With the present build-out AP&C will reach a capacity by the end of 2017 of at least 750 tons per year. The new plant will be built in modules and can be extended so that we reach a combined total capacity of over 1,200 tons per year in both production plants.
Arcam's strategy is to offer cost-effective production solutions that simplify and accelerate the transition from traditional manufacturing to additive manufacturing. A prerequisite for this is to offer the highest quality powder at a competitive price.

Strengthened organization

During the year we strengthened our sales and support organization in Germany, Italy and in the USA with new sales people and a strengthened sales management. A new sales office in Stuttgart will drive sales on the German market. On the important Italian market, we have strengthened the organization with local management. The office in Turin is responsible for sales and service and is working close to our important customers in Italy.

In the beginning of January 2016 Alain Dupont was appointed president of powder manufacturer AP&C in Canada. In February 2016 Tom Barrett was appointed president of contract manufacturer DiSanto in the USA.

Ownership structure

On 6 September GE made a public offer to acquire all shares of Arcam AB. GE's offer was completed on 29 November and GE currently owns 76.15% of all shares of Arcam.

For us at Arcam GE's interest in a strong confirmation that the company we have built together for many years is a major player in the additive manufacturing industry. In connection with the offer the fund Elliott acquired over 11% of the shares and thus became the second largest shareholder.

With some of the world's largest companies as customers, a strong cash position and, most important, a team of dedicated and driven employees, we are well positioned to take advantage of our opportunities in the fast growing market for Additive Manufacturing.

Magnus René,
President & CEO

The information has been made public in accordance with the Securities Market Act and/or the Financial Instruments Trading Act. The information was published on February 7, 2017 at 14:00 (CET).

Contact:

For further information:

Magnus René,
CEO and President, Arcam
Cell: +46 702-79-89-99 or +1 781-266-6957
E-mail: magnus.rene@arcam.com

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