After a strong fourth quarter, GE-owned, Sweden-based EBM 3D printer manufacturer Arcam closed fiscal year 2016 with net sales of 648.3 million Swedish Krona (MSEK) or about $US 72 million, a 12.5% growth. Operating losses amounted to 29.8 MSEK, however the underlying operating income amounted to 15.0 MSEK after adjustments for non-recurring costs.
During the year Arcam booked 48 new EBM orders, a decrease compared with the previous year when the company reached 58 orders. Arcam enters 2017 with an order book of 25 systems, not bad considering. GE’s tender confirmed that Arcam now becomes a major player in the additive manufacturing industry. The bidding process had an impact on operations since management had less time to act in the market. EBM customers took a somewhat cautious position.
Arcam continues to pursue and develop a long-term strategy to industrialize the EBM technology and simultaneously developing the metal powder manufacturing and contract manufacturing businesses. This is achieve through significant investments in technology, marketing and manufacturing capacity to meet our customers’ demands and growing expectations on productivity and reliability.
During the fourth quarter the company delivered 15 EBM systems to customers in the implant and the aerospace industry. In the period Arcam 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 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.
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. The parent company holding in DiSanto has been written down 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 metal powder manufacturing has grown significantly. Arcam continued to develop synergies between EBM systems, metal powders and contract manufacturing and now sees this broad offering has been well received by the market. Significant investments in capacity expansion were made to continue to meet the demand for our customers’ growing needs.
To meet the growing demand for AP&C’s high quality titanium powder for Additive Manufacturing, Arcam continue to add significant capacity by building a new powder manufacturing plant. By the end of 2016 there were 8 reactors in operation in the existing facility in Montreal.
In May a new powder manufacturing plant was built 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 to 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.
During the year Arcam strengthened its 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, Arcam strengthened the organization with local management. The office in Turin is responsible for sales and service and is working close to 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.
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 – concluded Magnus René, President & CEO – 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.”