Q3 2016 Presentation October 21, 2016
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Q3 2016 PresentationOctober 21, 2016
• Our home markets in Europe and North America are stable but we see no major growth in demand as the market is dominated by low energy prices and unprofitable utilities. But, it opens up other opportunities where customers seek support. We are actively pursuing those.
• Utilities in Europe and North America are generally focusing on safely extending life time and improving efficiency. We are increasing our efforts to provide relevant support.
• At the same time preparations for decommissioning and dismantling are being considered for the aging nuclear fleet in many countries in Europe and North America. Specifically, we see movements in Germany and Sweden. We are involved in an increasing number of discussions.
• China, India, Russia, Middle East, Korea, UK, Finland and a number of other nations across the world invest or are considering to invest in more nuclear power. We are focusing on China, Middle East, Korea and UK.
• The oil, gas and mining industries are becoming increasingly aware of the health hazards posed with concentration of radioactive residues in conjunction with extraction. Demand is slightly impacted from low energy prices. Increased efforts to expand our services in Europe and Middle East.
• Climate change is increasingly coming into focus with challenges for all fossil fuels whilst investments in renewable sources including nuclear power continues in many countries. We are pursuing opportunities with new fuel and reactor types.
2016-10-21 Q3 2016 Presentation 2
Market conditions – mixed picture
July-September2016
July-September2015
January-September
2016
January-September
2015Full year
2015
Sales, SEK million* 164.6 189.8 512.5 524.3 721.2
Gross margin,%* 23.3 34.8 28.0 28.5 27.9Operating Profit, SEK*
million -11.9 26.1 -2.4 25.2 36.6
Operating margin, %* -7.2 13.8 -0.5 4.8 5.1Profit after net financial*
items, SEK million -14.4 20.7 -15.3 13.5 18.9
Profit per share after tax,SEK* 0.08 2.34 1.01 1.45 1.78
Free cash flow, SEK million 183.1 5.5 151.8 -38.3 -29.8
Investments, SEK million* 2.7 4.9 9.8 10.6 14.6
Net debt/Equity ratio, % -5.4 47.0 -5.4 47.0 45.0Average number of
employees* 701 698 699 717 708
Financial performance
2016-10-21 Q3 2016 Presentation 3* Refers to operations excluding divested Waste Treatment
• Sales decreased with 13 percent to SEK 165 (190) million
• Gross margin decreased to 23 (35) percent
• Operating profit decreased to SEK -12 (26) million
• Operating margin was -7 (14) percent
• Redundancy costs of SEK 3 million impacted the result in Q3
• Operating margin excluding manning reduction costs was -5 (14) percent in Q3 and 1 (5) percent for the period
• Delayed software sales for Studsvik Scandpower and lower utilization within Consultancy Services, primarily in Germany and USA, impacted gross profit and result in the period
• Result excluding redundancy costs was SEK 5 (25) million in the period
Analysis of key ratio development Q3
2016-10-21 Q3 2016 Presentation 4
Consultancy ServicesBusiness Area Fuel and Materials Technology
July-September
2016
July-September
2015
January-September
2016
January-September
2015Full year
2015
Sales, SEK million 104.3 117.5 319.5 311.5 417.5
Operating Profit, SEK million -5.5 13.2 6.1 19.7 23.8
Operating Profitmargin, % -5.3 11.2 1.9 6.3 5.7
Investments, SEK million 0.8 0.2 2.1 0.7 1.2
Average number of employees 526 512 527 493 522
Financial performance
2016-10-21 Q3 2016 Presentation 5
Consultancy ServicesBusiness Area Fuel and Materials Technology
• Sales decreased with 11 percent to SEK 104 (117) million
• Operating profit decreased to SEK -5 (13) million – primarily due to lower demand in Germany
• Operating margin decreased to -5 (11) percent
• Redundancies in Germany and England impacted the result with SEK minus 3 (0) million in Q3 and 6 (0) for the period.
• Operating margin excluding redundancies was -2 (11) percent in Q3 and 4 (6) for the period
• Result excluding redundancy costs was SEK 12 (20) million in the period
• The lower result in the period comes from less work for the German organization whilst other entities report a positive development. Thor engineering develops positively, especially Japan.
• Actions to further reduce administration and intensified efforts to develop our target markets as defined in our revised business plan is ongoing. Also, special focus improving margins in Germany.
Operational highlights
2016-10-21 Q3 2016 Presentation. 6
Consultancy ServicesBusiness Area Fuel and Materials Technology
• Nuclear plants
• Hospitals
• Universities
• Process industry
• Oil installations
• Gas installations
• Commercial
Customers
US
Canada
FinlandSweden
UK
Spain
UAE
NetherlandsGermany
SwitzerlandFrance
Belgium
ItalyChina
Japan
South Korea
Main markets:
2016-10-21 Q3 2016 Presentation 7
Mexico
Slovenia
Norway
Consultancy ServicesBusiness Area Fuel and Materials Technology
Key offerings
• Facility Decommissioning
• Facility Operations
• Facility Planning & Licensing
• Waste Treatment Technologies
• Environmental to Non-Nuclear Customers
2016-10-21 Q3 2016 Presentation 8
Consultancy ServicesBusiness Area Fuel and Materials Technology
July-September
2016
July-September
2015
January-September
2016
January-September
2015Full year
2015
Sales, SEK million 50.3 66.3 178.7 192.8 276.5
Operating Profit,SEK million -2.3 14.6 8.7 24.2 40.9
Operating Profitmargin, % -4.6 22.0 4.9 12.6 14.8
Investments, SEK million 1.7 1.5 6.8 4.9 5.9
Average number of employees 125 129 125 129 128
Financial performance
2016-10-21 Q3 2016 Presentation 9
Consultancy ServicesBusiness Area Fuel and Materials Technology
• Decreased sales with 24 percent to SEK 50 (66) million
• Operating profit amounted to SEK -2 (15) million.
• Materials Technology and Studsvik Scandpower weak performance in the quarter
• Operating margin decreased to -5 (22) percent in Q3 and was 5 (13) percent in the period
• Materials Technology develops positively and is in line versus last year in the period
• Studsvik Scandpower is impacted from delays with export licenses amounting to a sales value of SEK 26 million as well as longer procurement processes with other customers
• A new CEO employed for Studsvik Scandpower to drive business and commercial development
Operational highlights
2016-10-21 Q3 2016 Presentation 10
Consultancy ServicesBusiness Area Fuel and Materials Technology
• Utilities operating and constructing commercial Nuclear Power plants
• Engineering Design organizations
• Safety Authorities / Regulators
• Fuel Vendors
• Research Institutes
• Universities
CustomersMain markets:
SpainUS
Belgium
UK
Germany
Switzerland
Netherlands
Sweden
Finland
Russia
France
ChinaJapan
2016-10-21 Q3 2016 Presentation 11
Norway
Mexico
Ukraine
Armenia
Czech Rep.
Slovakia
Canada
Bulgaria
Hungary
Consultancy ServicesBusiness Area Fuel and Materials Technology
Key offerings• Fuel Qualification
• New Fuel & Reactor Concepts
• Optimization Fuel Performance
• Optimization of Plant Reliability & Lifetime
• Failed Fuel Management
• Spent Fuel Pool Interim & Final Storage
• Nuclear fuel analysis software & services
• Hot Cell Technology
• Radioactivity & Dose Rate Management
• Transport and logistics
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• FMT – growth covering the whole life cycle of a nuclear plant• Fuel qualification programs
• Life time extension and efficiency improvements
• Back end fuel management including failed fuel
• New fuel and reactor types
• Global pursuit of business opportunities
• CS – growth in nuclear and non nuclear• Increase market shares in advanced engineering and consultancy in home markets
such as Sweden, UK, USA and Germany
• Focus on decommissioning, repositories, waste treatment technologies and waste management and environmental services
• Increase presence in primarily Japan, China, Korea, Middle East
• CS – Improve performance in facility operations in Germany and UK
• Continue developing Studsvik Technology Park2016-10-21 Q3 2016 Presentation 13
Studsvik’s focus and actions going forward
Appendix
Balance sheetSeptember 2016 September 2015 December 2015
Assets
Non-current assets 423.7 674.1 653.9
Current assets 579.5 352.3 339.6
Total assets 1,003.2 1,026.4 993.5
Equity and liabilities
Equity 340.2 309.5 297.9
Non-controlling interest 0.4 0.3 0.3
Non-current liabilities 458.9 248.1 239.0
Current liabilities 203.7 468.5 456.3
Total equity and liabilities 1,003.2 1,026.4 993.5
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2016-10-21 Q3 2016 Presentation 16
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