Q1 2018 Presentation April 25, 2018
Our Focus and Offerings We develop, sell and deliver innovative technical solutions to create superior value by impro roving p perform rmance and reducing r risk . Focus o on products and s services w within: : Fuel and materials testing • Fuel and reactor management software • Life cycle management of nuclear and radioactive hazards • 2018-04-25 Interim Report First Quarter 2018 2
Financial performance January-March January-March Full year 2018 2017 2017 197.4 179.6 704.8 Sales, SEK million 32.6 28.5 23.5 Gross margin,% 22.2 -2.0 -41.6 Operating Profit, SEK million 11.2 -1.1 -5.9 Operating margin, % 18.6 -7.1 -58.7 Profit after net financial items, SEK million 1.55 -0.76 -5.47 Profit per share after tax, SEK 21.6 -4.2 -84.2 Free cash flow, SEK million 6.9 5.1 22.1 Investments, SEK million 25.5 2.5 35.1 Net debt/Equity ratio, % 630 633 662 Average number of employees 2018-04-25 Interim Report First Quarter 2018 3
Analysis of key ratio development Q1 • Sales SEK 197.4 (179.6) million – increase with 10 percent • Gross margin 33 (29) percent • Operating result SEK 22.2 (-2.0) million • Restructuring costs SEK 0 (4.2) million • Free cash flow SEK 21.6 (-4.2) million (includes SEK 20 million released from escrow) • Strong results in Scandpower following SEK 32 million TVEL-order with SEK 25 million delivered in Q1 • Full production in Fuel- and Materials Technology with catch up from Q4 plus high order intake • Consultancy Services weak in Sweden and UK • Germany continues to struggle with low capacity utilization and unfavorable pricing • Cost savings in head office with new organization from January 1 2018-04-25 Interim Report First Quarter 2018 4
Business Area Consultancy Services Fuel and Materials Technology Studsvik Scandpower Germany KEY OFFERINGS – CONSULTANCY SERVICES We manage Radioactive Hazards to keep our customers Safe Repository Engineering Radioactive Waste Optimization – Waste Mgmt Processes Management - Safety Analysis, Licensing and Planning Environmental Radiation Safety & Nuclear Services Protection Decommissioning - Norm - Radiological inventory, characterization & clearance 2018-04-25 Interim Report First Quarter 2018 5
Business Area Consultancy Services Fuel and Materials Technology Studsvik Scandpower Germany Financial performance January-March January-March Full year 2018 2017 2017 21.2 35.4 134.2 Sales, SEK million 0.0 1.6 11.3 Operating Profit, SEK million 0.0 4.5 8.4 Operating Profit margin, % 0 0.4 3.4 Investments, SEK million Average number of employees 57 64 57 2018-04-25 Interim Report First Quarter 2018 6
Business Area Consultancy Services Fuel and Materials Technology Studsvik Scandpower Germany Operational highlights • Sales SEK 21.2 (35.4) million • Operating profit SEK 0 (1.6) million • Restructuring costs SEK 0 (0) million • YTD operating profit SEK 0 (1.6) million. • Low demand and utilization ratio in Sweden, UK and USA • Drop in net sales also reflecting exit from not profitable business in the UK (HVAC, Implementation) • Continued focus on IP-technology and related engineering services • Japan - Kobe Steel joint venture • China - Dynatech license agreement • France – Areva • USA - Department of Energy 2018-04-25 Interim Report First Quarter 2018 7
Business Area Studsvik Scandpower Consultancy Services Germany Fuel and Materials Technology KEY OFFERINGS – FUEL & MATERIALS TECHNOLOGY Fuel & Materials Life Cycle Fuel Qualification Plant Life Hot Cell Management Technologies Engineering Final & Interim Transport of Storage Research Irradiated Materials 2018-04-25 Interim Report First Quarter 2018 8
Business Area Studsvik Scandpower Consultancy Services Germany Fuel and Materials Technology Financial performance January-march January-march Full year 2018 2017 2017 66.7 52.5 195.0 Sales, SEK million 10.3 5.8 5.3 Operating Profit, SEK million 15.4 11.0 2.7 Operating Profit margin, % 5.4 4.1 13.8 Investments, SEK million 99 98 101 Average number of employees 2018-04-25 Interim Report First Quarter 2018 9
Business Area Studsvik Scandpower Consultancy Services Germany Fuel and Materials Technology Operational highlights • Sales SEK 66.7 (52.5) million • Operating profit SEK 10.3 (5.8) million • Restructuring costs SEK 0 (0.3) million • YTD operating profit SEK 10.3 (5.8) million • Hot cell facility up and running as planned • Catch-up of delay from Q4 2017 combined with strong order intake gives solid performance • Part of Hot cell facility being rebuilt to accommodate production line for medical isotopes • Continued strong demand for services offered by business area 2018-04-25 Interim Report First Quarter 2018 10
Business Area Fuel- and Materials Technology Consultancy Services Germany Studsvik Scandpower KEY OFFERINGS - STUDSVIK SCANDPOWER Nuclear Analysis Software & Services Used Fuel Analysis & Fuel Design, Core Design, Core Management (Interim and Monitoring & Plant Performance Permanent Storage) Optimization New and Advanced Operator Training Consulting, Reactor Design & Simulation Engineering Services Licensing & Knowledge Transfer 11 2018-04-25 Interim Report First Quarter 2018
Business Area Fuel- and Materials Technology Consultancy Services Germany Studsvik Scandpower Financial Performance January- January- Full year March 2018 March 2017 2017 42.8 19.7 81.0 Sales, SEK million 20.7 -3.6 -11.8 Operating Profit, SEK million 48.4 -18.3 -14.6 Operating Profit margin, % 0 0 0.7 Investments, SEK million 34 34 34 Average number of employees 12 2018-04-25 Interim Report First Quarter 2018
Business Area Fuel- and Materials Technology Consultancy Services Germany Studsvik Scandpower Operational highlights • Sales SEK 42.8 (19.7) million • Operating profit SEK 20.7 (-3.6) million • Restructuring costs SEK 0 (0) million • YTD operating profit SEK 20.7 (-3.6) million • Order signed with TVEL for 38 MSEK of which 25 MSEK delivered in Q1 • Software and documentation delivered in Q1 • Engineering, consulting and further documentation to be delivered mainly in remaining 2018 • Still market demand for Software and services but procurement processes remain longer • No change or positive news on export approval for China, we continue to make our case • Continued efforts to add application for spent fuel and additional consultancy services • Focus on increasing and expanding commercial activities and reach 2018-04-25 Interim Report First Quarter 2018 13
Business Area Fuel- and Materials Technology Consultancy Services Germany Studsvik Scandpower KEY OFFERINGS - Germany Decommissioning and Radiation Safety Nuclear Radiation Safety & Decommissioning Protection - Radiological inventory, characterization & clearance 14 2018-04-25 Interim Report First Quarter 2018
Business Area Fuel- and Materials Technology Consultancy Services Germany Studsvik Scandpower Financial Performance January- January- Full year March 2018 March 2017 2017 63.9 70.5 291.1 Sales, SEK million -4.8 0 -8.4 Operating Profit, SEK million -7.5 0 -2.9 Operating Profit margin, % 0.3 0.5 0.7 Investments, SEK million 419 397 435 Average number of employees 15 2018-04-25 Interim Report First Quarter 2018
Business Area Fuel- and Materials Technology Consultancy Services Germany Studsvik Scandpower Operational highlights • Sales SEK 63.9 (70.5) million • Operating profit SEK -4.8 (0) million • Restructuring costs SEK 0 (1.4) million • YTD operating profit SEK -4.8 (0) million • Weak start of the year with lower than planned utilization ratio • Pricing still insufficient in several agreements • Market for decommissioning remains hesitant but will develop positively over time • Focus on increasing utilization ratio and price 16 2018-04-25 Interim Report First Quarter 2018
Challenges & Opportunities Across the Globe Mixed picture Europe Growth in Asia and Middle East Cost focus in North America Profitability issues New reactors Profitability issues • • • Cost reduction initiatives China, Russia and Korea investing Nuclear promise – reduce cost 30 % • • • Germany phasing out Japan to start a limited number Decommissioning • • • Finland & UK invest R&D new fuel and reactor types Life time extension • • • Decommissioning of several units Middle East, mainly UAE investing R&D new fuel and reactor types • • • Life time extension National waste programs • • 2018-04-25 Interim Report First Quarter 2018 17
Nuclear Power Market • Western Europe, the USA and Japan are facing life extension programs and preparations for decommissioning • Asia, mainly China, are building new nuclear plants • The Middle East, mainly UAE, are in the phase of planning and constructing new nuclear plants • Requirements for national waste programs are increasing, mainly in Asia • Increasing demands on electricity and still low price pressure
Other markets • Isotopes for medicine purpose, one of the larger producers of isotopes has shut down its reactor. In total there are 2-3 reactors in the world that irradiates isotopes • Oil and mining industry generates naturally occurring radioactive material (NORM)
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