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2016-10-21

Arcam: Interim report January - September 2016

Hesitant market

Hesitant market

· Net sales increased by 10 % to 440.2 (400.1) MSEK
· Operating income amounted to -0.7 (36.2) MSEK
· Net income amounted to 6.7 (21.6) MSEK
· Earnings per share amounted to 0.32 (1.11) SEK
· 35 (34) systems were delivered in the period
· Order intake amounted to 24 (29) systems

For the third quarter:

· Net sales amounted to 132.6 (138.1) MSEK
· Operating income amounted to -4.8 (12.6) MSEK
· Net income amounted to -3.1 (4.9) MSEK
· Order intake amounted to 9 (12) systems
· 7 (11) EBM systems were delivered in the third quarter
· Public tender by GE to acquire all shares in Arcam

Significant events after the end of September:

· On October 18 GE Sweden extended the acceptance period of the
tender until November 1, 2016

Hesitant market

Sales for the period increased to 440.2 (400.1) MSEK and trailing
twelve month sales increased to 616.2 (537.3) MSEK. The Arcam Group
continues to grow and the growth in the period was 10%. Operating
income for the first 9 months was -0.7 (36.2) MSEK and trailing
twelve months, operating income amounts to 13.3 (51.5) MSEK.

In the first 9 months we delivered 35 (34) EBM systems and we received
24 (29) new EBM orders, whereof 9 (12) for the third quarter. The
order book by the end of the period was 16 EBM systems. Our metal
powder manufacturer AP&C more than doubled its order intake compared
to the same period 2015. In May we decided to add significant
capacity by building a new powder manufacturing plant in Montreal.
The ground breaking ceremony was held on October 17.

The market is currently slightly hesitant and as a result we see that
it takes longer to close new orders. This is partly a result of the
uncertainty over the company's future ownership structure.

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.

Public offer by GE

As announced on September 6, GE made a public tender to acquire all
shares in Arcam. The initial acceptance period of the Offer expired
on October 14. GE has extended the acceptance period until November
1, 2016.

For us at Arcam the tender from GE is a strong confirmation that the
company we have built, our team together with you and other partners,
is a major player in the additive manufacturing industry and an
attractive partner to GE.

We share with GE the belief that Additive Manufacturing is a fast
growing, strategically important industry. GE plans to retain and
expand Arcam's current customer base, in aerospace as well as in
orthopedics. GE also intends to keep current locations of Arcam's
operations and to retain current management and employees.

The Board of Arcam has unanimously recommended the shareholders to
accept the offer and the statement by the Board can be found as a
press release on the company website. Information about the public
tender from GE can be found on our website and can be ordered from GE
or from Handelsbanken.

Business status

During the third quarter we delivered 7 EBM systems to customers in
the implant or in the aerospace industry. 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. In the period we received 9
new orders and the order book by the end of the quarter amounts to 16
systems.

During the period Arcam Q10plus and Arcam Q20plus were launched. The
new systems are a significantly enhanced generation of the Arcam
Q-series EBM systems for Additive Manufacturing. Arcam Qplus offers
up to 25 % higher productivity with significantly 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.

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. In May we decided to
increase further the capacity 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.

Since February our contract manufacturer DiSanto has new management.
The business 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.

Strengthened organization

During the period we strengthened our sales and support organization
in Germany, Italy and in the USA with new sales people in the field
and a strengthened sales management.

A new sales office in Stuttgart will initially drive sales and in the
future also serve as a local support office.

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.

With 16 machines in order and a fast growing AM metal powder market we
are well positioned for a positive sales development in 2016.

Considering the hesitant market and our extensive investments in
technology and capacity, it will be a challenge to achieve a result
in line with last year.

Mölndal, October 21, 2016

Magnus René, President and CEO

This report contains information that Arcam AB is obliged to make
public pursuant to the EU Market Abuse Regulation. The information
was submitted for publication at 08.30 CEST on October 21, 2016.

Telephone conference

Telephone conference with CEO Magnus René and CFO Johan Brandt on
October 21, 2016 at 12.00 p.m. (CEST)

Phone number to the conference:

SE: +46 8 5664 2666
UK: +44 2030 0898 19

US: +1 8557 5322 35

Link to presentation:

Arcam Q3 conference call
(http://event.onlineseminarsolutions.com/r.htm?e=1282048&s=1&k=F3DB94FDC4...)

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

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

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