Q3 2017 Presentation October 20, 2017 Challenges & - - PowerPoint PPT Presentation

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Q3 2017 Presentation October 20, 2017 Challenges & - - PowerPoint PPT Presentation

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Q3 2017 Presentation October 20, 2017 Challenges & Opportunities Across the Globe Mixed picture Europe Strong growth in Asia Cost focus in North America Profitability issues New reactors Profitability issues Cost

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SLIDE 1

Q3 2017 Presentation

October 20, 2017

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SLIDE 2

Challenges & Opportunities Across the Globe

Mixed picture Europe

  • Profitability issues
  • Cost reduction initiatives
  • Germany phasing out
  • Finland & UK invest
  • Decommissioning of several units
  • Life time extension

Cost focus in North America

  • Profitability issues
  • Nuclear promise – reduce cost 30 %
  • Decommissioning
  • Life time extension
  • R&D new fuel and reactor types

Strong growth in Asia

  • New reactors
  • China, Russia and Korea investing
  • Japan to start a limited number
  • R&D new fuel and reactor types

2017-10-20 Q3 2017 Presentation 2

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SLIDE 3

Focus o

  • n products and s

services w within: :

  • Fuel and materials testing
  • Fuel and reactor management software
  • Life cycle management of nuclear and radioactive hazards

We develop, sell and deliver innovative technical solutions to create superior value by impro roving p perform rmance and reducing r risk.

Our Focus and Offerings

October 11, 2017 3

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SLIDE 4

July-September 2017 July-September 2016 January- September 2017 January- September 2016 Full year 2016 Sales, SEK million

183.3 164.6 539.5 512.5 758.8

Gross margin,%

30.8 20.3 25.1 25.1 29.5

Operating Profit, SEK million

15.5

  • 11.9
  • 5.9
  • 2.4

24.7

Operating margin, %

8.5

  • 7.2
  • 1.1
  • 0.5

3.3

Profit after net financial items, SEK million

10.9

  • 16.4
  • 19.3
  • 18.6
  • 0.6

Profit per share after tax, SEK

1.35 9.38

  • 1.83

6.36 6.58

Free cash flow, SEK million*

  • 10.4

183.1

  • 53.5

151.8 129.6

Investments, SEK million

2.8 2.7 15.2 9.8 15.3

Net debt/Equity ratio, %

23.0

  • 5.4

23.0

  • 5.4

0.8

Average number of employees

664 702 668 699 687

Financial performance

2017-10-20 Q3 2017 Presentation 4 * Includes Waste Treatment which was divested 2016

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SLIDE 5
  • Sales SEK 183 (165) million – increase with 11 percent
  • Gross margin 31 (20) percent
  • Operating result SEK 16 (-12) million
  • Restructuring costs SEK 0 (-4) million
  • Free cash flow (excl. effects of divestment of Waste Treatment, 2016) SEK -11 (-23) million
  • YTD operating result SEK -6 (-2) million (includes restructuring costs SEK -6 (-9) million)
  • Consultancy Services behind the positive development – primarily royalty fees FBSR China
  • Fuel & Materials Technology weak Q3 following the unplanned stop in the Hot Cell facility
  • Studsvik Scandpower impacted by customers longer procurement processes
  • A better commercial platform to grow from established in all operations
  • Increased commercial activities opens up more and more opportunities – cautiously positive

Analysis of key ratio development Q3

2017-10-20 Q3 2017 Presentation 5

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SLIDE 6

Consultancy Services

Business Area

Fuel and Materials Technology Studsvik Scandpower

July- September 2017 July- September 2016 January- September 2017 January- September 2016 Full year 2016 Sales, SEK million

120.7 104.3 322.9 319.5 448.4

Operating Profit, SEK million

26.2

  • 5.6

16.2 6.1 14.0

Operating Profit margin, %

21.7

  • 5.4

5.0 1.9 3.1

Investments, SEK million

0.2 0.8 1.7 2.1 2.4

Average number of employees

492 525 497 527 523

Financial performance

2017-10-20 Q3 2017 Presentation 6

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SLIDE 7

Consultancy Services

Business Area

Fuel and Materials Technology Studsvik Scandpower

  • Sales SEK 121 (104) million
  • Operating profit SEK 26 (-6) million
  • Restructuring costs SEK 0 (-4) million
  • YTD operating profit SEK 16 (6) million. Restructuring costs SEK -3 (-7) millon
  • Improved performance in Germany, UK and USA. Demand in Sweden is weak
  • Royalty of SEK 22 million from Dynatech, China for FBSR (LY royalty of SEK 19 million)
  • Good order book in Germany, USA and UK
  • Fewer and more distinct focus areas where we believe we have a leading edge
  • Beginning to get a good commercial platform to grow from

Operational highlights

2017-10-20 Q3 2017 Presentation 7

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SLIDE 8

Consultancy Services

Business Area

Fuel and Materials Technology Studsvik Scandpower

2017-10-20 8

KEY OFFERINGS – CONSULTANCY SERVICES We manage Radioactive Hazards to keep our customers Safe

Environmental Services

  • Norm

Engineering

– Waste Mgmt Processes

Nuclear Decommissioning

  • Radiological inventory,

characterization & clearance

Repository Optimization

  • Safety Analysis, Licensing

and Planning

Radiation Safety & Protection Radioactive Waste Management

Q3 2017 Presentation

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SLIDE 9

Consultancy Services

Business Area

Fuel and Materials Technology Studsvik Scandpower

Financial performance

2017-10-20 Q3 2017 Presentation 9

July- September 2017 July- September 2016 January- September 2017 January- September 2016 Full year 2016 Sales, SEK million

36.0 36.6 140.6 134,2 196.3

Operating Profit, SEK million

  • 3.6

0.6 7.1 19.5 29.7

Operating Profit margin, %

  • 10.0

1,6 5.0 14.5 15.1

Investments, SEK million

1.9 1.8 10.9 6.8 11.7

Average number of employees

100 93 100 91 93

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SLIDE 10

Consultancy Services

Business Area

Fuel and Materials Technology Studsvik Scandpower

  • Sales SEK 36 (37) million
  • Operating profit SEK -4 (1) million
  • YTD operating profit SEK 7 (20) million
  • Incident in Hot cell facility in September reduced revenue with SEK 5 million
  • Other customer delays behind poorer performance YTD
  • Expect Hot cell facility to be in full operation from mid Q4
  • Good order book
  • Increased commercial activities leading to a growing number of potential opportunities
  • Defined clear focus areas
  • Good commercial platform to grow from

Operational highlights

2017-10-20 Q3 2017 Presentation 10

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SLIDE 11

Consultancy Services

Business Area

Fuel and Materials Technology Studsvik Scandpower

2017-10-20 Q3 2017 Presentation 11

KEY OFFERINGS – FUEL & MATERIALS TECHNOLOGY

Fuel & Materials Life Cycle

Transport of Irradiated Materials Final & Interim Storage Research Engineering Fuel Qualification Hot Cell Technologies Plant Life Management

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SLIDE 12

Consultancy Services

Business Area

Studsvik Scandpower Fuel- and Materials Technology

Financial Performance

12 2017-10-20 Q3 2017 Presentation

July- September 2017 July- September 2016 January- September 2017 January- September 2016 Full year 2016 Sales, SEK million

19.6 19.8 56.4 54.9 96.3

Operating Profit, SEK million

  • 2.7
  • 2.9
  • 9.8
  • 10.8

2.8

Operating Profit margin, %

  • 13.8
  • 14.6
  • 17.4
  • 19.7

2.9

Investments, SEK million

0.1 0.2 0.1

Average number of employees

34 32 34 34 34

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SLIDE 13

Consultancy Services

Business Area

Studsvik Scandpower Fuel- and Materials Technology

Operational highlights

13 2017-10-20 Q3 2017 Presentation

  • Sales SEK 20 (20) million
  • Operating profit SEK -3 (-3) million
  • YTD operating profit SEK -10 (-11) million
  • Export approval for China being processed but uncertain when approval will be granted
  • Continued demand for Software but procurement processes are longer
  • Focus on increasing and expanding commercial activities and reach
  • Contract with Fennovoima, Finland to develop software codes for Russian design reactors
  • Generic licensing for specific software with US NRC facilitate sales and implementation in US market
  • Increased focus on back-end market with existing software
  • Office in China to increase sales of software and services
  • Beginning to get a good platform to grow from
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SLIDE 14

Consultancy Services

Business Area

Studsvik Scandpower Fuel- and Materials Technology

14 2017-10-20 Q3 2017 Presentation

KEY OFFERINGS - STUDSVIK SCANDPOWER Nuclear Analysis Software & Services

Fuel Design, Core Design, Core Monitoring & Plant Performance Optimization Consulting, Engineering Services & Knowledge Transfer Operator Training Simulation Used Fuel Analysis & Management (Interim and Permanent Storage) New and Advanced Reactor Design & Licensing

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Well positioned with a more commercially focused organization

FOCUS – Sales & Business Development

  • Grow Fuel & Materials Technology
  • Improve Profitability & Grow Studsvik Scandpower
  • Grow Consultancy Services in Core Areas
  • Fuel Performance and Qualification
  • Reactor & Plant Performance
  • Life Time Extension
  • Back End Fuel Management
  • Life Cycle Waste Management
  • New Fuel and Reactor Types
  • Asia - China, Korea, Japan, Middle East
  • North America – USA
  • Europe - Sweden, UK, Germany

October 11, 2017 15

Leading i innovati tion d driving s sustainable e nuclea ear s soluti tions

Business Areas Focus Areas Geography

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SLIDE 16

Appendix

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SLIDE 17

Balance sheet

September 2017 September 2016 December 2016 Assets Non-current assets 431.8 423.7 447.1 Current assets 419.3 579.5 453.9 Total assets 851.1 1,003.2 901.0 Equity and liabilities Equity 309.9 340.2 348.1 Non-controlling interest 0.3 0.4 0.4 Non-current liabilities 358.7 458.9 359.9 Current liabilities 182.2 203.7 192.6 Total equity and liabilities 851.1 1,003.2 901.0

2017-10-20 Q3 2017 Presentation 17

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2017-10-20 18 Q3 2017 Presentation