Year-end report 2013 Strategic initiatives and

Strategic initiatives and substantially increased sales · Net sales increased by 43% to 199.4 (139.1) MSEK · Profit after financial items increased to 15.4 (15.0) MSEK (including non-recurring costs of 5 MSEK) · Earnings per share amounted to 3.85 (4.04) SEK (based on the number of shares before split 4:1 in January 2014) · 25 (15) EBM systems were delivered during the period · Order intake amounted to 27 (24) systems, and the order book contained 12 (10) systems by year-end · 450 MSEK raised through new share issues · Strategic alliance with DiSanto Technology, USA · Agreement for acquisition of metal powder manufacturer AP&C, Canada Whereof for the fourth quarter: · Sales increased to 66.9 (62.5) MSEK · Profit after financial items amounted to 7.6 (13.7) MSEK · Order intake amounted to 10 (12) systems · 9 (8) EBM systems were delivered in the fourth quarter Significant events after the end of 2013: · Split of shares 4:1 · Order from aerospace industry in the US · Order from a Chinese implant manufacturer Basic information about Arcam is found on page 12 of this report. Strategic initiatives and substantially increased sales 2013 was very eventful and the highlights were the strategic co-operation with DiSanto Technology, and the agreement to acquire the powder manufacturer AP&C. Through these strategic initiatives, we can maintain a fast pace of business development and thereby both increase our business with existing customers and reach new ones. After a strong fourth quarter, we closed the year with a turnover of almost 200 MSEK and a net profit of more than 15 MSEK. Sales increased by more than 40% while earnings were essentially unchanged. The unchanged earnings is due to the result being burdened by R&D expenses, costs in conjunction with introduction of new systems and non-recurring costs associated with the strategic initiatives with DiSanto and AP&C. We have also strengthened the organization during the year with several key recruitments. The growth in aftermarket revenue is due to an increase in the number of production applications among our customers. Through the agreement to acquire AP&C, we ensure that we can meet our customers' growing need for high quality metal powders. Strategic alliance with DiSanto Technology The orthopedics market is one of Arcam's two main markets and Arcam’s EBM technology is used for industrial manufacturing of orthopedic implants since 2007. Arcam works long term to further broaden the acceptance and usage of the Arcam EBM technology for the production of orthopedic implants. During the period several new orthopedic products have been launched by Arcam´s customers. In February, a strategic partnership was reached with the U.S. contract manufacturer DiSanto Technology Inc. (DTI). The partnership gives Arcam the ability to offer existing and new customers contract manufacturing of advanced orthopedic implants based on the Arcam EBM technology. The combination of DTI’s knowledge of traditional implant manufacturing and Arcam's cutting-edge Additive Manufacturing technology will accelerate the implant industry’s acceptance of the EBM technology for production of orthopedic implants. Two Arcam Q10 systems were installed at DTI during the period. The agreement with DTI gives Arcam the option to acquire DTI. Agreement to acquire metal powder manufacturer AP&C In December we reached an agreement to acquire the powder producer AP&C from Raymor Industries in Canada. AP&C is a leading manufacturer of high quality metal powder and supplier of titanium powder to Arcam since 2006. Titanium powder is an important part of our offering to our customers and with this acquisition we have secured access to the best technology for the production of high quality metal powder for our customers. The acquisition is fully in line with our growth strategy and complements our EBM technology and product portfolio. We are also pleased to welcome a new team to Arcam and look forward to working together to continue to develop the Additive Manufacturing market. Closing of the acquisition is subject to customary closing conditions and is expected to take place in the first quarter 2014. Introduction of a new generation of EBM systems, the Q series In March the Arcam Q10 was introduced, a new system developed for production of orthopedic implants in an industrial environment. Arcam Q10 replaces Arcam A1, which has become an industry standard for Additive Manufacturing of orthopedic implants. In December the Arcam Q20 was launched, an EBM system based on the same platform as Arcam Q10, but customized for production within the aerospace industry. Both systems are developed in close co-operation with strategic customers and offer higher productivity and resolution, improved ergonomics, and Arcam LayerQam™, a patented camera-based system for inline quality control of the manufactured parts. Of the orders signed in 2013 9 were for the new Q systems. The aerospace market - important new orders The aerospace industry, an important market for Arcam, has high technical requirements. During the period we continued to take important machine orders in this market, in particular an order for four systems from an existing customer, and an order from GKN Aerospace,. The potential within the aerospace industry is very large and intensive efforts are underway to make the company ready for the volumes and requirements in the aviation industry. An important part of this is a strict quality assurance and after extensive efforts our business is now certified to ISO 9001. Development work and increased patent activity Arcams´s success in the highly demanding aerospace and implant industries is a result of long-term business and development efforts. In 2011, we received two major research grants, each worth approximately 10 MSEK, from the European Union's Seventh Framework Program (FP7). The grants are intended for further development of essential functionality in the Arcam EBM technology. The FastEBM project has been completed and the results will be used in future product generations, with the opportunity for significantly higher productivity compared with the current EBM systems. The HiResEBM project has been extended until mid -2014. The funding from FP7 does not affect Arcam´s accounts. During the year the patent work has strengthened. We have applied for 10 new patents, and one new patent family has been approved. Private placement of new shares - strong financial position Arcam has high ambitions in two very demanding markets. Although both sales and aftermarket sales are increasing rapidly, with strong margins, significantly increased sales and requires increased working capital. We have therefore completed two private placements in the second and fourth quarters, which provided the company with 450 MSEK. Cash is thus at the end of the period about 500 MSEK, and this strong financial position will enable us to finance the acquisition of AP&C and also an acquisition of DiSanto Technology, without affecting our ability to further develop the company. A strong order book and a positive business situation give us a solid foundation for a continued growth in 2014. Mölndal, February 7, 2014 Magnus René, 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 februari 7, 2014 at 14.00 (CET) 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 provides a cost-efficient Additive Manufacturing solution for production of metal components. The technology offers freedom in design combined with excellent material properties and high productivity. Arcam’s market is global with customers mainly in the orthopedic and aerospace industries. The company was founded in 1997 and is listed on NASDAQ OMX Stockholm, Sweden. Head office and production facilities are located in Mölndal, Sweden. Support offices are located in the US, UK, Italy and China. ________________________________________________________________________________ _ _______ Arcam AB • Krokslätts Fabriker 27A • SE-431 37 Mölndal, Sweden • 46-31-710 32 00 • www.arcam.com