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 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 R&D new fuel and reactor types • • Life time extension • 2017-10-20 Q3 2017 Presentation 2
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 • October 11, 2017 3
Financial performance January- January- July-September July-September September September Full year 2017 2016 2017 2016 2016 Sales, SEK million 183.3 164.6 539.5 512.5 758.8 30.8 20.3 25.1 25.1 29.5 Gross margin,% 15.5 -11.9 -5.9 -2.4 24.7 Operating Profit, SEK million 8.5 -7.2 -1.1 -0.5 3.3 Operating margin, % Profit after net financial items, SEK million 10.9 -16.4 -19.3 -18.6 -0.6 1.35 9.38 -1.83 6.36 6.58 Profit per share after tax, SEK -10.4 183.1 -53.5 151.8 129.6 Free cash flow, SEK million* Investments, SEK million 2.8 2.7 15.2 9.8 15.3 23.0 -5.4 23.0 -5.4 0.8 Net debt/Equity ratio, % 664 702 668 699 687 Average number of employees * Includes Waste Treatment which was divested 2016 2017-10-20 Q3 2017 Presentation 4
Analysis of key ratio development Q3 • 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 2017-10-20 Q3 2017 Presentation 5
Business Area Consultancy Services Fuel and Materials Technology Studsvik Scandpower Financial performance July- July- January- January- September September September September Full year 2017 2016 2017 2016 2016 120.7 104.3 322.9 319.5 448.4 Sales, SEK million 26.2 -5.6 16.2 6.1 14.0 Operating Profit, SEK million Operating Profit margin, % 21.7 -5.4 5.0 1.9 3.1 0.2 0.8 1.7 2.1 2.4 Investments, SEK million 492 525 497 527 523 Average number of employees 2017-10-20 Q3 2017 Presentation 6
Business Area Consultancy Services Fuel and Materials Technology Studsvik Scandpower Operational highlights • 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 2017-10-20 Q3 2017 Presentation 7
Business Area Consultancy Services Fuel and Materials Technology Studsvik Scandpower 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 Nuclear Environmental Radiation Safety & Decommissioning Services Protection - Radiological inventory, - Norm characterization & clearance 2017-10-20 Q3 2017 Presentation 8
Business Area Studsvik Scandpower Consultancy Services Fuel and Materials Technology Financial performance July- July- January- January- September September September September Full year 2017 2016 2017 2016 2016 Sales, SEK million 36.0 36.6 140.6 134,2 196.3 -3.6 0.6 7.1 19.5 29.7 Operating Profit, SEK million Operating Profit margin, % -10.0 1,6 5.0 14.5 15.1 1.9 1.8 10.9 6.8 11.7 Investments, SEK million 100 93 100 91 93 Average number of employees 2017-10-20 Q3 2017 Presentation 9
Business Area Studsvik Scandpower Consultancy Services Fuel and Materials Technology Operational highlights • 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 2017-10-20 Q3 2017 Presentation 10
Business Area Studsvik Scandpower Consultancy Services 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 2017-10-20 Q3 2017 Presentation 11
Business Area Fuel- and Materials Technology Consultancy Services Studsvik Scandpower Financial Performance July- July- January- January- September September September September Full year 2017 2016 2017 2016 2016 19.6 19.8 56.4 54.9 96.3 Sales, SEK million -2.7 -2.9 -9.8 -10.8 2.8 Operating Profit, SEK million -13.8 -14.6 -17.4 -19.7 2.9 Operating Profit margin, % 0.1 0 0.2 0 0.1 Investments, SEK million 34 32 34 34 34 Average number of employees 12 2017-10-20 Q3 2017 Presentation
Business Area Fuel- and Materials Technology Consultancy Services Studsvik Scandpower Operational highlights • 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 o Contract with Fennovoima, Finland to develop software codes for Russian design reactors o Generic licensing for specific software with US NRC facilitate sales and implementation in US market o Increased focus on back-end market with existing software o Office in China to increase sales of software and services • Beginning to get a good platform to grow from 2017-10-20 Q3 2017 Presentation 13
Business Area Fuel- and Materials Technology Consultancy Services 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 14 2017-10-20 Q3 2017 Presentation
Well positioned with a more commercially focused organization FOCUS – Sales & Business Development Business Grow Fuel & Materials Technology • Areas Improve Profitability & Grow Studsvik Scandpower • Grow Consultancy Services in Core Areas • Fuel Performance and Qualification • Focus Areas Reactor & Plant Performance • Life Time Extension • Back End Fuel Management • Life Cycle Waste Management • New Fuel and Reactor Types • Geography Asia - China, Korea, Japan, Middle East • North America – USA • Europe - Sweden, UK, Germany • Leading i innovati tion d driving s sustainable e nuclea ear s soluti tions October 11, 2017 15
Appendix
Balance sheet September September 2017 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
2017-10-20 Q3 2017 Presentation 18
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