most of those writing about 3DP , and even some analysts, are unaware that metal 3DP for high value items has a non relationship to most 3DP , especially plastic 3DP and hobby 3DP.
In the CC Arcam said they are getting orders about once weekly now so will stop announcing the new order flow.
I think the point is that it is flying below the radar in everything. There has been a ton of good news in PR about sales and such which made it clear that a good report was coming … but little reaction. I can only speculate that this comes from some combination of inappropriate discounting of the company based on people looking at the activity of AMAVF vs ARCM.ST or that many of the people interested in investing in 3DP really just don’t have much of clue about consumer, commercial, markets, different technologies, i.e., much of anything about the actual characteristics of companies in the space. And, considering some of what I see posted even on some of the 3DP boards on TMF, the latter may well be the case.
I committed to doing this at the beginning of the year but after February, ARCAM announced they were no longer issuing PR releases for every single order.
I am reporting the exceptional order counts when they are announced but am adjusting to keeping a quarterly tally based on results announcements. For additional consolidation and utility, I’m also tracking quarterly Revs, Net Inc & EPS (in MSEK), so here goes…
Recent 2015 Order Announcements:
5 units 23/Sep/2015 (Q10 system order from China for medical orthopedic implants)
http://finance.yahoo.com/news/order-five-arcam-q10-systems-0…
2 units 26/Jun/2015 (Q20 system order from Germany for titanium componentry)
http://finance.yahoo.com/news/order-two-arcam-q20-systems-13…
2 units 16/Mar/2015 (Q20 system order from UK in aerospace)
http://finance.yahoo.com/news/arcam-wins-order-2-arcam-09070…
Running Order Counts:
2015 Q1 10 (vs 6 in Q1’14)
2015 Q2 7 (vs 10 in Q2’14)
2015 Q3 5+ (vs 5 in Q3’14)
2015 Q4 TBA (vs 21 in Q4’14)
2015 Total 22 announced (vs 42 total order intake in 2014)
Running Delivery Counts:
2015 Q1 9 (vs 7 in Q1’14)
2015 Q2 14 (vs 4 in Q2’14)
2015 Total 23 delivered (vs 11 after H1 2014)
Revenues (MSEK):
2015 Q1 111.4 (vs 64.9 in Q1’14)
2015 Q2 150.6 (vs 46.1 in Q2’14)
Net Inc (MSEK):
2015 Q1 3.8 (vs 3.6 in Q1’14)
2015 Q2 12 (vs 0.4 in Q2’14)
EPS (MSEK):
2015 Q1 0.21 (vs 0.20 in Q1’14)
2015 Q2 0.57 (vs 0.01 in Q2’14)
Ant
Historical 2015 Order Announcements:
1 unit 7/Jan/2015 (A2X for Aerospace in the US)
1 unit 19/Jan/2015 (institute in China)
1 unit 21/Jan/2015 (Q10 system order for medical implants in China)
1 unit 05/Feb/2015 (Q20 system order for US for aerospace)
1 unit 05/Feb/2015 (Q10 system order for LatAm for medical implants)
2 units 16/Mar/2015 (Q20 system order to GKN for Aerospace)
2 units 26/Jun/2015 (Q20 system order from Germany for titanium componentry)
5 units 23/Sep/2015 (Q10 system order from China for medical orthopedic implants)
Separate to the hardware printer business they now have a vertically integrated business with 3 potential streams of revenues.
The printer business continues to dominate the announcements but they have made a lot of progress expanding the powdered metals business that they bought having added a third and now a fourth and fifth atomization reactors to the plant which will expand output dramatically taking them past 150 tons of powdered metal production.
http://finance.yahoo.com/news/arcam-ap-c-installs-4th-073800…
http://finance.yahoo.com/news/arcam-ap-c-completes-third-063…
They also have contract manufacturing in the medical implants business with the DiSanto. They don’t give much away about this in the reports and unfortunately they don’t break out revenues yet.
(http://finance.yahoo.com/news/arcam-interim-report-january-j…)
On the conference calls (which you can access via the website) they mention it somewhat and break matters out.
For H1 2015 they talk about:
EBM systems: 165 vs 79 in H1 2014 MSEK
Metal Powders: 49 vs 32 H1 2014 MSEK
Contract Manufacturing: 48 vs 0 MSEK
Overall YoY growth for H1 was 136%.
Apparently Gross Margin is higher in Systems vs others. Which is interesting given that the idea of razor and blade models was to make the margin on the consumables not the hardware.
Cheers
Ant
Ant, Exellent summary posts! But I am wondering how you put it all together and what conclusions have you drawn from it all. Is it just bouncing around or is there something concrete. What are their earnings in dollars? Is there a steady rate of growth or just bouncing around? What about the PE?
Thanks for anything you can add.
Saul
Hi Saul
The Revenues and Net Inc are in Millions of Swedish Krona and EPS are in Swedish Krona. I don’t think they are bouncing around.
If you look at their track record it has been a consistent growth story - there’s a 5 year trend until 2014 on their website found here:
http://www.arcamgroup.com/files/Multi-year-overview-2014.xls…
which has 2 slides showing 5 year installed base and revenue growth and 8 years P&L.
Sorry I didn’t run the P/E ratios and 1Year PEG etc. I’m already a holder so wasn’t thinking about the invest vs don’t invest decision.
I would need to look at F/X rates and think about the share circulations etc to run the conversion comparison with a the US listed stock.
Let me get round to it at some point.
Ant
The growth rate will accelerate. The machines are sold to make components ,primarily in the aerospace industry. These components have just been certified so production is just starting. As production increases it means more Arcam machines are needed to make these components .Being certified they can only be made by EBM,and since Arcram has a tight patent lock ,that means only Arcam.
Big EU trade shows come late in the Fall, so I expect the last quarter to be a record breaker in sales. Those are multi million machines so revenues can be lumpy ,something that will iron itself out over time as production increases.
As I have pointed out before Arcam shares little with other 3DP companies other than using a base bed of powder and adding one layer at a time. The power source, an electron beam is unique. The aerospace and medical products produced are high value and low production volume items, using expensive hard to machine alloys. 180 degrees different from plastic parts that can be injection molded by the millions once the dies are paid for.
One interesting piece about the last conference call which is available until October was surrounding a question from 1 analyst on 3DP industry growth rates.
The ARCAM response was - we don’t think we should be compared to the 3DP industry. ARCAM is metals ONLY. They are the only EBM player. They have been incorporated into the production process (which is their vision) and they have not seen any slowdown in growth from the historical 35% growth rate the 3DP industry was experiencing and cannot explain why the 3DP industry is claiming a slowdown as this is not their reality.
Mauser you are right about certification and not just in the aerospace industry but also in the medical device/implant industry. These 2 industries are the number 1 and number 2 most regulated on the planet. Certification for EBM would produce a significant moat in the same way as patents and FDA license indications represent.
Ant
Arcam has a humongous moat.
The only question is whether the castle amounts to much.
A careful look at patents reveals that the ones needed to make EBM work outside a lab are fairly recent. Plus I believe EU research patents go to Arcam .
Plus they have multiple trade secrets.
Only 3DP makes complexity free in metals.
No arguments from me I am violently agreeing with you.
Latest 2015 order announcements:
2 units 30/Sep/2015 (EBM systems order from CalRAM in the US for aerospace components)
http://finance.yahoo.com/news/arcam-order-two-ebm-systems-14…
Running Order Counts:
2015 Q1 10 (vs 6 in Q1’14)
2015 Q2 7 (vs 10 in Q2’14)
2015 Q3 7+ (vs 5 in Q3’14)
2015 Q4 TBA (vs 21 in Q4’14)
2015 Total 24 announced (vs 42 total order intake in 2014)
Running Delivery Counts:
2015 Q1 9 (vs 7 in Q1’14)
2015 Q2 14 (vs 4 in Q2’14)
2015 Total 23 delivered (vs 11 after H1 2014)
Revenues (MSEK):
2015 Q1 111.4 (vs 64.9 in Q1’14)
2015 Q2 150.6 (vs 46.1 in Q2’14)
Net Inc (MSEK):
2015 Q1 3.8 (vs 3.6 in Q1’14)
2015 Q2 12 (vs 0.4 in Q2’14)
EPS (SEK):
2015 Q1 0.21 (vs 0.20 in Q1’14)
2015 Q2 0.57 (vs 0.01 in Q2’14)
Ant
Historical 2015 Order Announcements:
1 unit 7/Jan/2015 (A2X for Aerospace in the US)
1 unit 19/Jan/2015 (institute in China)
1 unit 21/Jan/2015 (Q10 system order for medical implants in China)
1 unit 05/Feb/2015 (Q20 system order for US for aerospace)
1 unit 05/Feb/2015 (Q10 system order for LatAm for medical implants)
2 units 16/Mar/2015 (Q20 system order to GKN for Aerospace)
2 units 26/Jun/2015 (Q20 system order from Germany for titanium componentry)
5 units 23/Sep/2015 (Q10 system order from China for medical orthopedic implants)
2 units 30/Sep/2015 (EBM system order from CalRAM in the US for aerospace components)
Latest 2015 results announcements:
2 units 30/Sep/2015 (EBM systems order from CalRAM in the US for aerospace components)
http://finance.yahoo.com/news/arcam-ab-reg-no-556539-0639006…
Running Order Intake Counts:
2015 Q1 10 (vs 6 in Q1’14)
2015 Q2 7 (vs 10 in Q2’14)
2015 Q3 12 (vs 5 in Q3’14)
2015 Q4 TBA (vs 21 in Q4’14)
2015 Total 29 announced (vs 42 total order intake in 2014)
Running Delivery Counts:
2015 Q1 9 (vs 7 in Q1’14)
2015 Q2 14 (vs 4 in Q2’14)
2015 Q3 11 (vs 9 in Q3’14)
2015 Total 34 delivered (vs 20 at Q3 2014)
Order book = 14 @ Q3’15
Revenues (MSEK):
2015 Q1 111.4 (vs 64.9 in Q1’14)
2015 Q2 150.6 (vs 46.1 in Q2’14)
2015 Q3 138.1 (vs 90.8 in Q3’14)
TTM Revenues Q3’15: 537.3
TTM Revenues Q3’14: 268.8
Net Inc (MSEK):
2015 Q1 3.8 (vs 3.6 in Q1’14)
2015 Q2 12 (vs 0.4 in Q2’14)
2015 Q3 4.9 (vs 38 in Q3’14)
TTM Op Inc Q3’15: 51.5
TTM Op Inc Q3’14: 13.2
EPS (SEK):
2015 Q1 0.21 (vs 0.20 in Q1’14)
2015 Q2 0.57 (vs 0.01 in Q2’14)
2015 Q3 0.33 (vs 2.00 in Q3’14)
Ant
Historical 2015 Order Announcements:
1 unit 7/Jan/2015 (A2X for Aerospace in the US)
1 unit 19/Jan/2015 (institute in China)
1 unit 21/Jan/2015 (Q10 system order for medical implants in China)
1 unit 05/Feb/2015 (Q20 system order for US for aerospace)
1 unit 05/Feb/2015 (Q10 system order for LatAm for medical implants)
2 units 16/Mar/2015 (Q20 system order to GKN for Aerospace)
2 units 26/Jun/2015 (Q20 system order from Germany for titanium componentry)
5 units 23/Sep/2015 (Q10 system order from China for medical orthopedic implants)
2 units 30/Sep/2015 (EBM system order from CalRAM in the US for aerospace components)
Latest 2015 order announcement:
10 units 22/Dec/2015 (EBM systems order from Avio Aero - GE Aviation in Italy for aerospace engine turbine blade manufacturing - doubling capacity)
http://finance.yahoo.com/news/order-10-arcam-ebm-systems-075…
Running Order Intake Counts:
2015 Q1 10 (vs 6 in Q1’14)
2015 Q2 7 (vs 10 in Q2’14)
2015 Q3 12 (vs 5 in Q3’14)
2015 Q4 10 announced to date (vs 21 in Q4’14)
2015 Total 39 announced (vs 42 total order intake in 2014)
Running Delivery Counts:
2015 Q1 9 (vs 7 in Q1’14)
2015 Q2 14 (vs 4 in Q2’14)
2015 Q3 11 (vs 9 in Q3’14)
2015 Total 34 delivered (vs 20 at Q3 2014)
Order book = 14 @ Q3’15
Revenues (MSEK):
2015 Q1 111.4 (vs 64.9 in Q1’14)
2015 Q2 150.6 (vs 46.1 in Q2’14)
2015 Q3 138.1 (vs 90.8 in Q3’14)
TTM Revenues Q3’15: 537.3
TTM Revenues Q3’14: 268.8
Net Inc (MSEK):
2015 Q1 3.8 (vs 3.6 in Q1’14)
2015 Q2 12 (vs 0.4 in Q2’14)
2015 Q3 4.9 (vs 38 in Q3’14)
TTM Op Inc Q3’15: 51.5
TTM Op Inc Q3’14: 13.2
EPS (SEK):
2015 Q1 0.21 (vs 0.20 in Q1’14)
2015 Q2 0.57 (vs 0.01 in Q2’14)
2015 Q3 0.33 (vs 2.00 in Q3’14)
Ant
Historical 2015 Order Announcements:
1 unit 7/Jan/2015 (A2X for Aerospace in the US)
1 unit 19/Jan/2015 (institute in China)
1 unit 21/Jan/2015 (Q10 system order for medical implants in China)
1 unit 05/Feb/2015 (Q20 system order for US for aerospace)
1 unit 05/Feb/2015 (Q10 system order for LatAm for medical implants)
2 units 16/Mar/2015 (Q20 system order to GKN for Aerospace)
2 units 26/Jun/2015 (Q20 system order from Germany for titanium componentry)
5 units 23/Sep/2015 (Q10 system order from China for medical orthopedic implants)
2 units 30/Sep/2015 (EBM system order from CalRAM in the US for aerospace components)
10 units 22/Dec/2015 (EBM systems order from Avio Aero in Italy for aerospace manufacturing)
Ok final wrap for the year (2015). Q4 order intake, year end order book and Q4 + 2015 full year results…
Overall order intake (58 for 2015) beat my aspirations of 1 unit per week for the full year. ARCAM even managed to improve its Q4 order count and finished with an excellent order book (27). I have had to interpolate some of the numbers which I will verify in the conf call if I can see the presentation details.
Overall top line looks good, op inc level looks ok but net inc and eps has really contracted. They have made great progress on system sales, forward order book building and penetrating the production arena.
http://finance.yahoo.com/news/arcam-end-report-2015-07380051…
Running Order Intake Counts:
2015 Q1 10 (vs 6 in Q1’14)
2015 Q2 7 (vs 10 in Q2’14)
2015 Q3 12 (vs 5 in Q3’14)
2015 Q4 29 announced to date (vs 21 in Q4’14)
2015 Total 58 (vs 42 total order intake in 2014)
Running Delivery Counts:
2015 Q1 9 (vs 7 in Q1’14)
2015 Q2 14 (vs 4 in Q2’14)
2015 Q3 11 (vs 9 in Q3’14)
2015 Q4 16 (vs 15 in Q4’14)
2015 Total 50 delivered (vs 35 for 2014)
Order book = 27 @ Q4’15
Revenues (MSEK):
2015 Q1 111.4 (vs 64.9 in Q1’14)
2015 Q2 150.6 (vs 46.1 in Q2’14)
2015 Q3 138.1 (vs 90.8 in Q3’14)
2015 Q4 176.0 (vs 137.1 in Q4’14)
TTM Revenues Q4’15: 576.1
TTM Revenues Q4’14: 339.0
TTM Revenues Q3’15: 537.3
TTM Revenues Q3’14: 268.8
Net Inc (MSEK):
2015 Q1 3.8 (vs 3.6 in Q1’14)
2015 Q2 12 (vs 0.4 in Q2’14)
2015 Q3 4.9 (vs 38 in Q3’14)
2015 Q4 2.7 (vs 15.8 in Q4’14)
TTM NetInc Q4’15 24.3
TTM NetInc Q4’14 57.7
TTM Op Inc Q4’15 50.2
TTM Op Inc Q4’14 21.7
TTM Op Inc Q3’15: 51.5
TTM Op Inc Q3’14: 13.2
EPS (SEK):
2015 Q1 0.21 (vs 0.20 in Q1’14)
2015 Q2 0.57 (vs 0.01 in Q2’14)
2015 Q3 0.33 (vs 2.00 in Q3’14)
2015 Q4 0.07 (vs 0.89 in Q4’14)
Total '15 1.18 (vs 3.10 in '14)
Ant
Historical 2015 Order Announcements:
1 unit 7/Jan/2015 (A2X for Aerospace in the US)
1 unit 19/Jan/2015 (institute in China)
1 unit 21/Jan/2015 (Q10 system order for medical implants in China)
1 unit 05/Feb/2015 (Q20 system order for US for aerospace)
1 unit 05/Feb/2015 (Q10 system order for LatAm for medical implants)
2 units 16/Mar/2015 (Q20 system order to GKN for Aerospace)
2 units 26/Jun/2015 (Q20 system order from Germany for titanium componentry)
5 units 23/Sep/2015 (Q10 system order from China for medical orthopedic implants)
2 units 30/Sep/2015 (EBM system order from CalRAM in the US for aerospace components)
10 units 22/Dec/2015 (EBM systems order from Avio Aero in Italy for aerospace manufacturing)
The conf call is/was available at these points…
http://event.onlineseminarsolutions.com/eventRegistration/Ev…
http://www.arcamgroup.com/investor-relations/report-fourth-q…
Whilst the share price has been knocked by 10% in Europe the analysts seemed to be in a congratulatory mood.
Some of the more interesting points from the Q&A involved comments on:
Pricing - no more price cuts on powder and no price pressure on machines
Investment - will continue to invest and open new offices, invest in R&D and expand capacity/productivity and not move into harvesting mode
Systems, powders, services mix - Q4 service mix higher
Machine performance - throughput speed increased 15-30% but the AM focus is more on improving the industrialisation of 3DP rather than simply speed and size
Op margin - more looking to grow than optimize margin
Aero vs ortho - mix likely to change going forwards
Ortho - they work with virtually every orthopedic implant manufacturer
Cheers
Ant
Total '15 1.18 SEK (vs 3.10 in '14)
Hi Ant, The trouble is that that only comes to earnings of about 14 cents US for the year, and they are selling at $18.50 right now, which gives them a PE well over 100, even after the fall in price today.
Saul