Studsvik AB (publ)

Welcome to Studsvick Q4 2025 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Carl Tadeen and CFO Peter Teske. Please go ahead.

Thank you and welcome to this Q4 report for 2025 and also the full year report for 2025. Just a short reminder of Studsvik. We are a services and product company serving the worldwide nuclear market. This year we did roughly 900 million Swedish crowns in revenue. We are active in 15-plus countries, and we have more than 500 employees, with the key markets being Europe, U.S., Korea, Japan. So we'll go to the next slide. Just also before we get into the results, what are we doing and what is the market we are addressing? So we are addressing a market to the left. We have the nuclear power market, which is dividing a new build, operating plants, and decommissioning. And in there, we have various services. And obviously, the new things over the last couple of years is the big focus on new build, which is drawing a lot of attention. But also, a lot of investments are going into the operating plans. to extend the life of those to 80 to 100 years. They were already planned for 40 to 60 years, so a lot of investment going to that. Also, nuclear is a lifecycle market, so decommissioning is also constantly a market that needs to be invested in, and we are very active in that market as well. There are also other markets outside the nuclear power market that requires our infrastructure and our competence, and mainly that is in life science. A little high level on how we divide our revenue, and this is the 2025 numbers, and we have seen a bit of a shift here where fuel, materials, and waste technology is now the largest by revenue and also by profit business area of Studsvik. The second largest is decommissioning and radiation protection, mainly driven out of the market in Germany, Switzerland, Belgium, and Holland. And then specific scan for our software business, which is 18% of our business selling software to worldwide clients in the nuclear power market. So into the quarter four of 2025. And the quarter has shown a lot of positive signs in terms of very strong cash flow. This is a continuation of the strong cash flow that we have had throughout the year, but we ended extremely strong. We also have continued our journey with a very successful development of our fuel materials and waste technology business area, whilst we have continued to see a more challenging market for our radio protection or decommissioned radio protection business area and a comparable bit of a weaker quarter for our scan power business compared to last year. We delivered significantly stronger margins than Q4 of last year and also significantly better margins than we did in 2024. So this year has truly been a turnaround year for our profitability and setting up the company for growth. I also want to mention that the Board of Directors proposes to the annual general meeting a change in the capital allocation to support the pro-growth agenda. And as a result of that, no dividend is proposed to be distributed to the shareholders for the fiscal year of 2025. Looking to some of the key milestones for Q4 of 2025. So we continue with the financial discipline, leading to a strong cash flow in Q4 and full year. And that is obviously basic for any company, but we have done significant efforts and improvement in this area throughout 2025. We end the year with a strong quarter and full year for the business area of fuel, material and waste technology, leading to one of the strongest results to date in the company's history for this business area. And this business area is obviously predominantly serving the lifetime extension market, but also to some extent testing for the SMR market. So good proof that we're getting a good share of the new investment into that area. We have received new investments or a new large shareholder in Segra Capital that invested close to 10% of the company's shares. It's now owned by Segra. Segra is a well-known fund in the U.S., specifically focused on the new care market. Adam Rodman, who is one of the founders there, is also now part of our board. We see that as a good sign that there is a trust in what we're doing and also a lot of focus to support our growth journey, not to say the least, in the U.S. market. We have also seen an appointment of Julia Pike, who has a long career. background from the UK nuclear market, most recently as MD for the Sellafield nuclear power plant. We see this as very, very important with her broad knowledge, but also specifically that we can grow and get support from her to get more in the UK market. And Anders Bergdahl with a strong background from Uniper joined us already in Q4. We have received a new order from Rho Power, which is the Romanian power utility for our core fuel software, and they are working with a new scale and SMR vendor to build out SMRs in the Romanian market. And last but not least, we secured a very large order for fuel testing with the South Korean Kepco Nuclear Fuel, KNF, which is one of the four dominant nuclear companies. fuel manufacturers or vendors in the world. This test is focused on ramp testing to enable nuclear power plants to be more flexible so you can take the power up and down in a much more efficient way. That is very important if you're going to have a mix of wind, solar, power, and hydro, as we have in many of our grids that we support. And the deliveries of this order will start this year, but will continue for three years from now. So a very important order and also another sign of their investment to modernize and make the nuclear power plants more effective going forward. If I go a little bit into our three business areas, as I mentioned, decommissioning, radiation protection, we see a competitive market situation that remains. We have taken measures to change some of how we run that business. We see a better sign going into 2026, specifically in the area that's been most challenging in dismantling, which is cutting of steel and concrete structures. We are also moving more of our efforts into radio protection and moving away from decontamination. And by those measures, we hope and believe that our profitability will be significantly better in 2026. It's been a challenging year in 25 and also in Q4. If we go into fuel, materials, and waste technology, once again, a very strong year. We also see a continuous momentum in this business with strong order backlog. and continue a high level of customer engagement. And the KEPCO order from Korea is a very good sign of that. We also have increased interest from companies delivering SMRs for material fuel testing. So this is with our unique competence and facilities, we see that this market has a very solid journey ahead. If we then go to Stuttvik Scandpar, where we deliver predominantly our core fuel software, which is used by more than 50% of the light water reactors in the world. We reported weaker sales in this quarter compared to the same period last year. We should then know that last year was a very strong quarter for this business area. And it also is a very seasonal business. So when the license sales hits us, we are having strong quarters and we have less of license sales, we have less strong quarters. However, I'm happy to see and say that we maintained our profitability almost for the full year. But obviously this quarter was weaker than the very strong year of 2024. On Blackstar Tech, which is the safety system solution that we acquired out of Constellation Energy a year back, we have taken more orders in Q4. Many of these orders are with important customers, i.e. large potential customers, but the initial orders are of small scale. And we are now also building a new organization to handle Blackstar Tech going into 2026. So we are still positive about that. forecast for Flagstaff Tech to support both SMRs and new builds, but also modernize the existing fleet. With that, I will hand over to my CFO, Peter, please.

Thank you, Carl. I will walk you through the financial performance of our three business areas, and after that, I will talk about the group results and our cash flow. And we start with our business area, decommissioning and radiation protection services. And we see that the sales in both the quarter and the full year is lower compared to last year. In local currency, it's a decrease in the quarter of 13.8% and 5.5% for the full year. And as well, we see the decrease in sales has a negative impact on the margins and operating profits. We see that the profit for the full year is 18.1 million less compared to 2024. The quarter and the full year were characterized by continued tough competition and a strong cost focus among our customers, and that continued to limit our opportunities for additional sales. And a consequence of that is that our margins and profits are lower than compared to last year. With that said, we have a clear focus on turning this business around. For example, during 2025, we have adopted a new internal organization to match the current market conditions. We have done changes in the management and also in the organizational structure. We have recruited new people, as well as reduction of headcount in the unprofitable areas. Therefore, we have also a restructuring cost for about 1 million during the Q4 2025. On average, the business area during 2025 has approximately 24 less employees compared to 2024. If we then move on to fuel, materials and waste technology, we see that the sales for the quarter amounted to 106.1 million and for the full year 319.7 million, which in local currency is an increase in the quarter of 13.2% and the full year of 9.6%. The sales growth in both the quarter and the full year was driven by continued work without productivity. For example, we implemented two shift operations in part of the production and we had a favorable product mix. The operating profit for the quarter amounted to 20 million SEK and for the full year 62.9 million SEK. Worth mentioning here is that in Q4 last year, we had 11.9 million SEC of items affecting the comparability. And we see the improvements in the margin compared to 2024 reflects our implemented cost efficiency program. We have improved our purchase routines. And also we have the high utilization rate within the organization. So overall, this business area has done a really good turnaround. And as Karl mentioned, shown one of the best results ever. Then if we go to StuttX Scampower. The sales at Social Security Scam Power didn't reach a high level compared to previous years, with lower sales and lower earnings in the quarter. This underlines the seasonal variation that characterized the business area. In local currency, it's a decrease of 18.9% for the quarter and a decrease of 4.3% for the full year. We see that sales of Blackstar Tech products remain low during the quarter as well as full year. However, the negative impact on the overall profitability of the business area is limited. We see that the underlying core business remains stable and we are continuing focusing on the profitability while managing the seasonal revenue patterns. So that was our three business area. If we then move on to the group results and looking first at the group net sales, we see that the fourth quarter, the sales in the fourth quarter amounted to 222.9 million compared to 247.4 million last year. So, in local currency, that corresponds to a decrease of 4.4%. And as you've seen before, the decline is mainly driven by lower sales within decommissioning and radiation protection services, as well within strategic scam power. But this was partly offset by the strong performance in fuel, materials and waste technology. If you then look on the full year sales, We see that the sales amounted to 883.3 million, which is less than last year. But there on the top line, we have FX effect. So in local currency, it corresponds to an increase in 1.1%. And the full-year sales growth is primarily driven by the strong development within fuel, materials, and waste technology, which increases sales by 9.6% compared to 2024. And we see also that in 2025, it's the biggest business error within the group, both in terms of net sales and operating profits. If we then move on to look at our profits for the Q4 and the full year 2025, we see that the operating profit increased in the fourth quarter to 18.4 million compared to 1.6 million last year. This corresponds to an operating margin of 8.2% compared with 0.7% in the prior year. Improvement in the quarter is mainly driven by fuel materials and waste technology. For the full year, the operating profit amounted to 68.6 million compared to 26.8 million last year. We see also the increase in the operating margin. It goes from 3% up to 7.8%. The improvement profitability is driven, as we said before, by the strong performance in fuel, materials and waste technology. We have strengthened our financial discipline. We have increased the cost awareness within the full organization. And then we have some one-off positive items, for example, the exchange rate affected by some remeasurements of the balance sheet items. And we see also that the efficient tax rate is 28.6%. And that's because we have some companies within the group that reported losses without deferred tax can be capitalized. Finally then, if we look on the free cash flow for the Q4 and 2025 full year, We see a strong development in the free cash flow because it's amounted to 42.7 million compared to 18.8 million the Q4 last year. And for the full year, it's amounted to 98.3 million. compared to minus 78.1 million last year. This significant year-on-year improvement reflects a stronger earnings, better control over investments, and also that we did an acquisition during 2024. We have also increased our focus on the working capital, particularly on accounts receivable. That has really contributed to our improved cash flow. We see also that during the year we have amortized 23.5 millions of our bank debt. And as a result of the strong cash flow, the net debt was reduced to 65.1 million. As Carl mentioned, the board of directors proposes to the general meeting a change in the capital allocation to support a pro-growth agenda. As a result, no dividend is proposed to be distributed to the shareholders for the fiscal year of 2025. And if we look on the financial targets, so we have the three financial targets. And you see our performance 2025 and 2024. Yeah, with that said, I will hand over to Carl.