Studsvik AB (publ)

Thank you. Ladies and gentlemen, welcome to the Studsvik Interim Report for the second quarter and half year 2024. My name is Camilla Hovlund, the CEO of Studsvik, and today I'm very happy to introduce our new CFO, Peter Teske, that is with me on the call. We will present the results and focus areas for the Studsvik Group, and as the operator mentioned, you are welcome to ask questions at the end of the session. Please note that you can either call in or use the chat function. TUSIG are providing technology services on the international market for the nuclear industry. We support our expertise, experience, and valuable offerings throughout the whole reactor lifecycle, from new build to operation, decommissioning, and final storage. We offer Stuttvik specialized solutions based on our knowledge for decades. The nuclear power is on the global agenda. There are strong drivers for nuclear energy, such as the climate change, geopolitical situation, and future increased capacity needs for energy. It has never been so obvious that nuclear is needed to enable the transition to a sustainable future. Many countries plan to expand or build a first-of-a-kind nuclear power plant. Time is of essence and the supply chain capacity will be a critical factor. Also in Sweden and recently in Almedalen, it was a high focus on the nuclear industry collaborations and the consensus of the need to clarify nuclear power industry's economic conditions for investments. Some of my CEO comments. Stuttvik hosted a visit of Ebba Busch, the Sweden's Minister of Energy, Business and Industry. The government's roadmap for new nuclear power in Sweden was on the agenda and how Stuttvik can contribute. The visit of Ebba Busch strengthens our feeling that the government wants to actively drive the development towards new nuclear power. and that Stusvik will once again be important for national program to expand nuclear power. In Almedalen, a meeting place for political dialogue, many players from the nuclear power industry were represented, and many debates focused on expanding nuclear power to achieve a future fossil-free and stable energy mix. There is a consensus both politically and within the industry that decisions need to be taken to achieve the government's goal of increasing nuclear power capacity. One main question is how the nuclear power industry's economic conditions for investment will be handled. A government investigation is on the way to find a model for financing and risk sharing. In addition, there are other parallel efforts like exploring how the permit and licensing process can be streamlined. The progress of nuclear power in Sweden is progressing, but the time is critical. When I was attending the panel discussion, Nuclear Communications on the Global Stage, COPE and Beyond, at the 2024 American Nuclear Society Annual Conference in US, the same question was addressed. How can the pace of new nuclear power be increased in order to succeed in the green transition? In summary, The participation in these kind of forums is a strategy to support the positions of Studsvik and our offerings for new nuclear initiatives. And now I will hand over to Peter.

Thank you, Camilla. As you can see, our sales, operation profit and margins are slightly higher than in 2023, both when you compare to the second quarter and the half year. The property sale from 2023, recorded in the first quarter, contributed with 2.3 million to our half-year result. The operation profit margin, excluding the property sale, was 5.3%. Studsvik has signed an agreement to acquire Extrembor and Sorgteknik, effective from 1 July 2024. The company has an annual turnover of approximately 30 million SEK and eight employees at the time of the acquisition. One of our biggest investments during the half year is the Indram demonstration facility. And that's one of the reasons why we have been able to sign a partnership agreement with Uniper. Camilla will come back and talk about this acquisition and agreement later on. If we look further on the next slide, we can see how our cash flow has developed during the quarter and half year. Our free cash flow for the half year is negative at 40.9 million SEK. The main reason behind the negative cash flow are our higher investment levels with the Indram projects, which is approximately is around 25% of our total investment. There are also higher replacement investments compared to last year in the business area of fuse and material technology. Another reason for the negative cash flow is the higher capital tied up in customer projects and combined with increased complexity of the trade in China. This has affected our cash flow in the short run. We have to continue focus on the cash management within the group.

I will guide you through the commissioning and radiation protection services, the business area that provides expertise and experience mainly for the German, Swiss, Belgium and the Netherlands market. Within the business area, Revisions and maintenance work in Switzerland and the Banalex countries contributed positively to the results, although we are not quite reaching the same level as the same quarter last year. As mentioned earlier by Peter, the acquisition of Extrembor and Sockteknik supplements the business area very well. Specialized in various types of segmentation, mainly within the nuclear power industry, like cutting, sewing, drilling, etc. The company has, as Peter mentioned, eight employees that act as project managers and problem solvers in various types of dismantling projects, mainly for nuclear facilities. The acquisition is expected to have a positive impact on the earnings already into 2024. If we then move on to what is in the focus right now, the EBS is a well-established high-tech segmentation company in the Swedish nuclear power industry. And as mentioned, complements the SICK very well. And we expect to see synergies benefits both in the short and mid-term. Together, we can offer customers a complete service in decommissioning both in and outside Sweden. As there is a lack of resources on the German market, Studsik need to onboard new personnel to keep up and support growth within the decommissioning area in Germany, Switzerland and other countries. And also the partnership approach is progressing and we are performing some bids together with partners to offer a more complete and competitive service to our customers. So now I will move on to the fuel and materials technology. A business area with a position as the international laboratory supporting the global industry with world-leading testing and analysis. The production output improved compared to last year. However, last year we had disruptions at the site and delayed regulatory permits for transport. Work is on the way to speed up the delayed regulatory permits for fuel transport in Europe. It is a little bit too early to speculate when the permits might be in place. Studsvik Nuclear AB has received an injunction from the Swedish Radiation Safety Authority regarding the retrieval of radioactive waste from Forsmark. The injunction has been appealed to the administrative court. And if we look into some focus areas for the business, We are continuing to improve the production in the facilities and are adjusting the organization accordingly. It has so far shown good results. Another key area for us is material transport and to secure the deliveries to the site. And as mentioned, we start to see some progress in the approval process. The OFD, Nuclear Energy Agency's projects, which is run by Halden Reactor Project and Stuttwick, has been highlighted during the spring for its international collaboration in the development of reactor technology and safety. The Stuttwick Cladding Integrity Project, SCIP, recently celebrated 20 years, and a new five-year program has started that covers both reactor operations and back-end fuel handling, including storage. The project has today members represented in 15 countries and by 40 organizations. Another OCDINIA project is SMILE, the Stuttgart Material Lifetime Extension Project, that is based on PWRs and BWR materials from decommissioned nuclear power plants. The interest in lifetime extension increases, and France has recently joined as a member. and is widely represented by government, fuel manufacturers and nuclear power producers. Today the project has members from 10 countries and 19 organizations. And now I will move on to Scampower, the software business that is leading in fuel optimization, from design of fuel cores to operation and disposal. The SIC software is installed in about 50% of the worldwide light water reactors that are in operation today. In 2023, we had more sales from licensed business in the beginning of the year compared to this year. We expect to have a positive impact of license sales later this year. The license agreement signed at the beginning of the year with one of the leading energy companies in the U.S. will have a positive impact when we are reaching the milestones for the installations of the Gardell core monitoring system. Focus area. There is an interesting sign on the U.S. market where there has been reconsideration regarding earlier decided close downs of reactors. As example, Holtec has taken steps towards restarting one U.S. nuclear power plant. We are following this closely, and it opens new opportunities for Scampower software for the U.S. market. Scampower will host the user group meeting in U.S. end of July, and we expect global customer presence. This is a several days broad marketing for our software and knowledge sharing among the customers of best practice and experience of using our software. One of the key events will be the early launch of our new developed code, a commercial Monte Carlo tool to support advanced modular reactors, medical shielding, criticality and fusion. The code applies civil electronics modeling and simulation, and as a first version is expected at the end of this year. Now I will move on to waste management technology, the business area that support efficient and safe handling of radioactive waste with our technology, technical solutions and advisory support. We are still having some customer delays connected to our license agreements that also postpones our engineering services. The business area is in the process of establishing the Stutsviks patented in-rum demonstration facility at our plant outside Nyköping. After commissioning in September, we plan to start with customer projects to test non-radioactive materials during the rest of this year. These projects are worth a few million SEK. As Peter mentioned, Stuttvik has signed a partnership agreement with Uniper covering waste consulting and in-run technology. By combining our respective strengths, we can provide a complete value chain for the decommissioning of nuclear facilities with the focus on safety, efficiency and quality. And then on focus areas. InDrum is comparable with a typical startup initiative. We have cost-efficient solutions for customer radioactive waste problems, and everything takes more effort and time than expected. Our customers show a great interest to the conceptual design and university tests that have been performed, but they have asked for a reference facility to be able to test larger volumes during real operational conditions. And this is the reason why we have the demonstration facility at Studsvik. and it is a strategic investment to support the market and sales efforts for Indram licensed business. Now we are waiting for the last critical component to be delivered to the demonstration installation before we can perform a complete site acceptance test, and that is scheduled for September. Several potential customers are booked in for visits during the year to see the facility in operation. The business area will also continue to explore strategic partnerships to offer a more complete solution to our customers and to be able to enter new markets on a broader scale. So if we look into the new initiatives, the initiatives to explore new nuclear power at Stusvik site, including small modular reactors, SMRs, and conventional large reactors, and research factors are progressing. The studies and modeling analysis take some time and effort. An example of things that has and is assessed is safety from hydro-seismic geological perspective, as well as construction and operation when it comes to cooling and transmissions. As mentioned in the beginning of the call, a key condition will always be the financing and the political position to support financing of new nuclear power. The Stuttvik site is a classic Swedish nuclear territory, and the site has infrastructure and holds a license to operate nuclear facilities. This has initiated early interest also in other areas than nuclear power, such as waste conditioning and services, an area where Stuttvik has expertise and nuclear knowledge. In summary, as part of the strategy, we need to be present in different forums to strengthen our position and role both nationally and internationally for new nuclear initiatives. These efforts will support our business opportunities. I guess also a trend on the nuclear market to engage in partnerships, and this is something we also look into. We are looking for the partners that are complementary to our strengths to be able to offer more value to the customers by having competitive offerings to the market. The collaboration platform suits our organization well, especially with our experience to lead worldwide programs with highly specialized experts. The Stuttgart Research Hub and Center of Excellence are supporting our customers with pragmatic solutions to their complex problems. And in addition, this is the perfect hub for creating network and meet other professionals in the industry. So now we will handle over to Q&A session.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key. 6 on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Thank you so much, operator, and we want to say thank you to all of you that has been listening. And on behalf of Peter, me and the whole Stutzit group, we wish you a very nice summer and hope to speak to you soon again. Thank you.