Studsvik AB (publ)

Welcome to the interim report for Q1 2026 for Stödsvik. I'm Carl Thedin and next to me I have Peter Teske, my CFO. So let's start to go through the quarter. First, a summary of the Stödsvik Group. We are a worldwide service and product provider to the nuclear industry. Net sales last year amounted to 883 million SEK. We have offices in Asia, in Europe, and in the US. We're a little bit more than 500 employees in six offices around the world. Before we go to the result, just to remind everybody where we are in terms of what we do, because that is always important. And start with the top left-hand corner, new build, which is actually an area that we took significant steps to enter more broader in this quarter with the acquisition of Chanford Next. I will talk more about that later. But already before that, we are supplying our services and products into that market with fuel and materials testing for new reactor developments, supporting with waste planning for licensing, working with different fuel manufacturers for fuel that goes into these reactors, and obviously supporting the SMR project development. The other three business areas or operations that we are engaged in is decommissioning, which is predominantly a business that we do out of Germany, but also we are also engaged in Switzerland, Benelux and in the Nordics. In a secure and safe way, we are tearing down and decommissioning nuclear power plants. Typically, the process takes more than 20 years. Long-term operations is the majority of our business that's to serve There are more than 400 reactors in the world and we are active with at least half of that amount. With our testing services, supporting the ground outages, our software for fuel management, safety systems and so forth. And that will remain a very important part of our business as these nuclear power stations are not set to be extended in their lives from 60 years to 80 to 100 years. And we have also an additional business that also requires our competence to handle radioactive material within life science. And we see increasing demand for that specific, specifically for the unique facility we have in Sweden to handle that kind of materials. We run this business from three different business areas, decommission, reintegration, production, fuel materials and waste technology, instead of a scamper or software business. And fuel materials is the largest of these ones in terms of net sales. Let me come into the result of the quarter. We reported a stable quarter from a top-line point of view. It came in basically at the same levels as last year. The growth in in local currencies is around 4% and an operating profit of 12 versus 19. We should then be reminded of that we have some specific FX effects in last year in 2025, which has affected the results positively. And we ended up with a 5.4 operating margin. Free cash flow was low in the quarter. It was minus 12.5 million versus a positive 39.6 million. That is due to the large amount of prepayments that we received in Q4 from some of our customers and also that we had some late invoicing in the quarter. So key milestones for us in Q1 2026. And maybe the one that stands out is the acquisition of a company called Canful Next, which is a Swedish product developer for new small modular reactors in so-called SMRs. They have expertise and worked very closely with the Swedish government and other key players in the Swedish market to understand how to, in a new way, develop sites and projects for nuclear power in a new way that is already seen, for example, in the wind power industry. As a sign of that, just following the acquisition, they also handed in a pre-application for building an SMR park in the municipality of Valdemarsvik on the southeast coastline of Sweden. This is the first application of its kind for a totally new site or location in Sweden for over 50 years. They also plan to send in more of those over the coming years. Also in the SMR market, we expand our relationship with Rolls-Royce SMR. We already do business with them. We're now signed an MOU to explore a broader set of products and services from us to support them in the endeavors to build a fleet of Rolls-Royce SMRs in Europe. We also signed a very interesting MOU with Novartron Fusion Group. Fusion Energy is very interesting at this time. There has been some good progress in the technology development and there's a vast amount of investments put into various initiatives in Europe and in the US. And here we are supporting Novartron, company based in Stockholm, with their endeavors to do this. And we are now exploring various testing and so on that we can do with that, which is very similar to what we have done in the nuclear fission industry. And we continue to be active to show our competence and our brand. And in this quarter, we went to the Global Waste Management Symposium in Phoenix, U.S. So let me take a little bit through more on the Canful next. So it says for us, it's a strategic step to develop Studsvik's competence around Newville, moving Studsvik into the forefront of the SMR market segment in Sweden and overseas, basically benefiting from being in a market which has very good foundations and conditions financially and competence-wise to build new nuclear in Sweden. And by engaging early in these projects, by being part of the project, we will gain a lot of competence around how these are done that we can also scale worldwide. They bring obviously a vast experience of understanding this market and how you set up these projects. You have an extensive range of vendor relationships, not only with the reactor vendors, but also with all other vendors and suppliers required to build a nuclear power plant. To build this, you will need to invest in the projects. Investments come here, come from the state, but we're also looking here to obviously look for private investments. And they have built relationships and understand which of these investors actually have the right knowledge to invest in nuclear power. There is a lot of regulatory and policy expertise in this group as they have worked closely with the Swedish government to understand how to facilitate and change the regulatory environment to enable new players to build new nuclear. And they have access to land rights to develop new nuclear. The application for Valdemarsvik being one example. And here you see a picture when we actually handed in that application, we see the Minister for Environment, Mr. Johan Brits, getting the application from Canful Next. And this is a way for the government to, in an early stage, make sure that we as a product developer can understand if this site will be approved and we don't, and then to a situation where we invest a lot of money and then subsequently they will say no. So it's part of the regulatory changes and that we now benefiting from. We will hand in more of these in Sweden. I foresee maybe one to three more over the next 18 to 24 months. So let me then take you through the business areas, decommissioning, fuel materials, and specific scan power. Decommissioned radiation protection services, you know that we have struggled with our profitability in this market. We have done some changes in management and the way we operate this. We have set a new agenda for finding the right profitability. And I'm happy to say that that's now starting to pay off. We saw a doubling of the operating margin, and we see a good momentum in this business, specifically an area that we'll be struggling with around engineering services and dismantling. And there we now see a better order backlog, making sure that our utilization rate of this very people-oriented business is high. If we then go to fuel materials and waste technology, which is the biggest, both in terms of top line and in terms of margins, which is predominantly run out of our facility just south of Stockholm, we continue to have a high order backlog and high demand for our services. And this This business is very much subject to how you manage these labs that you see pictures on and making sure that you have the right flow of some complicated testing scenarios. And I think we did that very well in this quarter. We also assigned two important MOUs in the quarter to further strengthen our outlook for this business. Rolls-Royce SMR, which you mentioned, and also Novotron Fusion Group. taking steps into becoming broader and bigger and more strategic vendors into these two important companies. And waste is a part of this business and we have our Indram reduction of waste unique technology that we are building or planning to build on our site and also licenses to players outside Sweden. And to present that and further drive that business, we attended the waste management, I suppose, in Phoenix, where we had some important speeches and obviously met a lot of important customers. Stutvig Scampower, that is the world leader in development of software for reactor fuel analysis, independent of fuel suppliers, enabling our customers to to work with the four different fuel suppliers and put them under competitive offerings. Business developed positively thanks to high demand in our project and engineering services. This is a mix of licensing and also implementation and engineering services. And we have added last year a new business risk, which is Blackstar Tech, which are supporting hardware and software for safety system in nuclear power plants and also to other heavy industries. And we saw an increase in orders, an increase in revenue, and specifically interesting to see that those orders are not only coming from the nuclear industry. We actually have demand also for other industrial sectors, which is important to build scale over time with this important business. We also continue to strengthen our organization in the US. One key strategic initiative we have is to make sure that we get a better growth and higher volume out of the very important US market. And we are doing that by strengthening the organization for the group to drive business with key customers in the US. With that, I hand over to Peter Teske, our Chief Financial Officer. Please, Peter.

Thanks to Carl. And I will present the financial performance of our three business areas for the quarter and then followed up by the financial results for the group, including the cash flow. And we start with our first business area, the commissioning and radiation protection services. And we see in the quarter, the sales amounted to 84.1 million. and that's an increase of 1.9% in local currency compared to the same quarter last year. We see that we have, as Karl mentioned, focused on the higher margin business now and also reduced our headcount in our lower margin services. This has improved our profitability and we now see a clear increase in our KPI sales per employee. The operating profit improved to 3.7 million, corresponding operating margin of 4.4%. The margin improved is primarily driven then by the high utilization, cost efficiency, and the shift towards the higher margin service area, as we mentioned. If we then move to the fuel, materials and waste technology, We see that the sales in the quarter amounted to 96.7 million and that's a decrease of 0.8 in local currency. So basically we are flat compared to last year and that reflects a continuous solid progress in our project and the overall activity remains stable compared to last year. We see a slight decrease in the operating profits It decreased from 14.3 to 12.3 and operating margin is 12.8%. The decrease is explained by a slight change in our product mix during the quarter, as well that we had a positive one-off effect in the first quarter 2025. So with that said, we see that we have a profitability remains in a solid level. And we are continuing to focus on the utilization and focus on the cost control and our financial discipline within the business area. If we then move to strategic scam power and the sales in the quarter amounted to 49.5 million compared to 46.2 million last year. And here we have an impact of our FX. And we see in the local currency, it's an increase of 16.6%. And that's reflect a strong demand in the core business. We see also that the sales within Blackstar Tech products increased to 7.7 million. And that's up from 3 million the same quarter last year. The operating profit amounted to 8.5 million compared to 11.3 million last year, and the margin is 17.3%. The degrees is primarily explained by the positive FX contribution we had during Q1 2025. So overall, the underlying business remains stable, and we also have a continued focus on the profitability and execution. If we then move to, for the group, look on the group numbers, we see for the total, the sales in the group amounted to 226.4 million, and that's in local currency an increase of 4.1% compared to last year. And as I said, the increase is basically from the decommissioning radiation protection services and from strategic scam power. And the fuel, materials and waste technology is basically flat compared to last year. So overall, I would say it remains solid and we have an underlying growth in the local currencies. The operating profit for the group is then 12.3 million in the quarter, and that's operating margin of 5.4%. We have a decrease in operating profit compared to last year, and that is that we have some one-off effects during Q1 2025. And also, we have done some investments in some strategic investments, and also we have some one-off acquisition costs during this quarter, 2026. We see then also it's positive that this quarter that all our three business area are performing well. So that's really positive. And also I think it's worth mentioning because we talked a lot about the FX effects and in the operating profits, we have limited impact on the foreign exchange effects. And that's because our revenues and expenses are largely matched in local currency. So therefore, we don't have any bigger effects on operating profits. Finally, we're going to look a little bit on the free cash flow, on the cash flow for the quarter. And we have a negative free cash flow of 12.5 million compared to the positive cash 39.6 million last year. And the decrease is primarily reflecting the timing effects in our working capital, that we had big advance payments received in the fourth quarter 2025, and that we had invoices a lot late in the quarter. During the quarter, The group amortized 7.1 million of our bank debt and our net decreased to 78.1 million. So overall, the group maintains a solid financial position with continued focus on our cash flow discipline and our working capital management. With that said, I will hand over to Carl-Trier.

Thank you, Peter. Just some outlook on the external markets in this emerging industry of nuclear. If you look on the world, the nuclear is still positioned very much as a critical for stable fossil-free baseload in high-demand future grids. The SMR part of this, the new way of building more scalable, modular products that can be manufactured in normal factories and then shipped to the sites, are gaining traction in the world. And there's a global resurgent for nuclear led by state backed investment models. And reiterate that the IEA, 40 countries signed up to triple the nuclear power of the next 30 years. And we see the same in Europe with a major push in the UK. France is obviously the biggest country for this. Finland, Poland and Eastern Europe. Poland is a new country for new nuclear. So that's happening also in those kind of countries. Sweden, we're moving into execution phase. We have the Widerberg Kraft application in from the Vattenfall Group. And the state is also taking a key role here, not only the finance and the CFD schemes, the offtake of the electricity, but also going in with equity in the different companies that would apply for building new nuclear. For the industry, nuclear power is becoming a strategic industrial solution. It drives the electrification and notably, initially, it's very much driven by the AI industry, but we also see large-scale other industrial sites that will require stable base load that can be delivered from nuclear. In terms of the SMR, we have seen a very interesting launch of a strategy, including financial support to develop the European Union's SMRs fleet and also technologies. This is very important as this needs to be something that we in Europe also can develop and maintain ourselves. In the UK, there has been major funding of specifically their incumbent developer of Rolls-Royce and it was announced uh in april that they will now have financing to build three new smrs in uk maybe most important to point out and why i think this the nuclear wave is here to stay is obviously that there's a key role in energy security and also combining that but also providing a net zero uh contribution because we obviously not uh sending out any co2 emissions from the nuclear power plant This is becoming increasingly important in the geopolitical situation that we unfortunately are seeing as we speak now in Iran and Ukraine and other places. So I think that's also why we have a very strong political backing, not only in Sweden, but also in the EU and worldwide. We are ready to support this. We are one of the few companies that have a base inherent competence and customer relationships and products and services. And we will use that to invest and grow with SMR growth in the world. And here is a continuation of some of the news that have coming out recently over the last couple of quarters. And you see to the top right hand corner, where Canfor Next Team hands in the application for the site of Valdemarsvik. And so a lot of things happening and that will continue to happen a lot of things in our industry. Final remarks, a stable quarter with continued investments for the future. I think it's very interesting and very good to see that all three business areas are now delivering a solid quarter. And if you remember, we didn't see that in 24 when we had difficulties in the F&T business and in 25 when DRPS had a difficult year. Now I see a stable situation for all three, which is very important for our year. We have taken a big step to expand into new nuclear product development and being part of new build with the acquisition of Campo Next. At the Nuclear Energy Summit in Paris, it was reiterated by politicians and European leaders that nuclear is very important for EU to strengthen energy security and regional energy supply. We've seen the legislation initiated from the Swedish government continues. And in this quarter, we saw the lift of the ban for Swedish nuclear along coastlines, not only being able to build on the existing site, but actually opening up for other sites to be explored. That is obviously very important for our new business together with Canful Next. We also see that the company, how now expanding and notably we have already business in the fusion industry, but with this MOU, we're looking to expand it. And once again, taking advantage of having a strong local driver of our initiatives in the Novartron Fusion Group. And we also continue to expand our business in the SMR business by expanding our business opportunity with Rolls-Royce SMR. We have a strategy which is basically having the foundation of our very competent people, our three business areas, and then expansion in the areas of markets, products, and M&A. And we will continue to do, and it's a good sign this quarter that we have an M&A case. We have market expansion with new hires and new expansions in the U.S. market. And we are continuing to drive innovation in our product areas. Last but not least, I have used this picture to, in a good way, exemplify what we are doing and what is happening at this end. And you do that physically at the beautiful site of Stuttsvik. You can see different initiatives happening on our site and in the world. The small modular reactors, there is interest and we are exploring the possibility to build SMRs at our site. We have discussion with SMR vendors around that and also that is strengthened by the California acquisition. There is an initiative in Sweden to see if we can find funding and a general consensus in industry and state to once again have a research reactor at the Stödsfjord site to support both the nuclear and life science industry. Our hot cells is key to what we do. We are working with Novartron to see if we can explore having a test facility for fusion. And we are continuing to build and invest in our Indram facility on site. So I think it's a good picture to showcase what is happening at Slitsvik in the world with this image. And with that, I will say thank you and hand over for questions.

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 six on your telephone keypad. The next question comes from Lara Motadi from ABG Sundal Collier. Please go ahead.

Hi, first one here. The operating profits from group functions and elimination, they dragged down quite a lot this quarter. And you mentioned both in your presentation and in the report that you've taken some costs related to acquisitions. I'm guessing that they are related to the pending for the next acquisition. So firstly, with these under group functions and eliminations Maybe could you quantify the magnitude of these costs?

I think you have correctly analyzed because if you look on the group functions, we see an increase in our cost and we see that some of the cost is related to the one-off effects compared to the acquisitions. And for the year, yeah, we have a strategic development and we will So it will perhaps be a little bit slightly higher during the year, the cost.

Okay. Thank you.

Maybe I can add that this was specifically high in the quarter, but Pete is absolutely correct that we are continuing to invest in long-term business opportunities that will require us to take costs in terms of advice on the drive, but they were abnormally large in quarter one.

Okay, thank you. Fuel, materials and waste management. had slightly lower margins year-on-year and sequentially. How should we think about the margins in this segment? Should we expect some lumpiness generally between the quarters? Because you mentioned that this was due to product mix. So how should we think when we model maybe the annual margins here?

I think my view is that this is a low margin quarter for FMWG. We should be higher, and I mentioned before that we should be north of 15%. The reason for this is a project mix. So we are executing our different testing projects, and some of those will require more utilization that may be planned, and then the margins go down a bit in those projects, and some we are performing better, and then hence we get better margins. This is combined that we are constantly trying also to increase our prices on outgoing offers. But obviously a lot of this what we do now is to work on our backlog as well. So it is a week or a quarter in terms of breaking profit for that business unit. But I have no sort of big concerns around that as it's a sort of normal variation of projects.

Okay, thank you. Very interesting. Well, it's positive to see that Scanned Power is contributing to sales. Can you say anything about maybe the margin profile of this business compared to the legacy Scanned Power business?

Oh, you meant the Black Star Tech or?

Oh, sorry, Black Star Tech.

Yeah, no. Yeah, so Blackstar Tech should, it's a combination of a hardware and software business. So I think in general, it should be coming in slightly lower. I should also say that we are learning this business as we speak. It's new to us. And we have been sort of positively surprised so far with the deals that we have done. But I think it's, I'm a little bit early to say exactly where we end up on the sort of average margin over time in this business. My guess, it will be a bit lower than the normal scan power business.

Okay, great. That was all from mine, and thank you very much.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Caleb Solomon from SEB. Please go ahead.

Hi, thank you for taking my questions. How much, if any, of the sort of profitability improvement in decommissioning is purely seasonal? versus sort of due to the cost measures you described? And as a follow-up to that, you mentioned there was a few, or there was a reduction in the number of employees. So was or will there be any negative one-offs related to that?

The first question is if the business is typically have lower margin profile in Q1 based on the holiday season around New Year and so on. So it's a seasonal, but all the improvements here are from increased utilization and higher sales per employee as Peter alluded to. And I'm not foreseeing any more, any restructuring costs coming out of that business.

Okay, that's clear. Thank you. And then fuel materials, can you remind us how much of the sort of decrease year-over-year that was due to the one-off related to invoicing effect in 2025? And sort of building on Laura's question earlier, do you expect mix to stay the same in Q2 or sort of be back to normal?

Can you take the first question once again, please?

In fuel materials if you can remind us how much of the decrease year over year that was due to the sort of one offs related to the invoicing effects in 25?

Yeah and the decrease was around two million. So the one off effect was around two million.

So it's obviously not material I would say. yeah and then then yeah the project mix it is actually a tricky question to answer we are striving to do a super good forecast on this because we run our projects and then sometimes we go we get a slight problem and then we start another project and so on so this is a lot of work in progress throughout the quarter but my my answer to lara's question which is the same to you is that i see q1 profitability on this museum to be on the low level it's not bad but it's not on the high level

and we should in average strive to be north of 15 percent okay that's helpful thank you and uh just on the sharon full next acquisition can you maybe give us some color on the sort of strategic rationale behind that how much was wanting to sort of monetize on the actual projects versus sort of using it as a platform to develop products for new builds and and the On which side of that can we expect to see a contribution first, and when can that be? That was a lot of questions in one.

That was a very good question. I think that being in these projects is very important, otherwise you stand outside, you don't really understand. If you don't understand, you don't know what services you can develop and what you offerings you should have for other similar projects. So to really be in these projects, and I can take an example to the other ongoing project in Sweden, where we are working closely with these different vendors, but we're not in the project as of now. And then you miss out on things, I think. So by being in the project to an extent together with others, we will be very close and I think strategically that is very important to us. In terms of how much this business actually will need in itself to be a product developer, we obviously have good hopes for that as well. It is a bit, and we need to come back to that, to the market a little bit, when we what we invest when we exit from this project and so on. And that is yet something we need to come back to when we start forming these SPVs and start seeing the full scale of the investments and time plans. But that is also important. But I think actually the strategic importance of us now being able to say that we are very active and investing in new build as that over time will be the biggest business that we will enter into 10, 15, 20 years from now. That's what's going to happen when you triple nuclear power in the world.

Okay, that's helpful. Thank you. And last quarter, you said that you expect Black Star Tech to sort of reach 10 to 15% of scant power sales during 26. And it was almost 16% of sales this quarter. So is it fair to say you already achieved that sort of run rate in Q1? And is this the sort of contribution we should continue to expect for the next couple of quarters.

and so it was a good quarter and this is a as all equipment business a bit volatile type business so i i aim you know i remain with my with my hope and belief and strategy to drive this into a significant part of scan power uh if it's going to be that exactly every quarter and that is that is something that we need to get back to but i think it's we're off to a good start i think yeah we are now having a sales organization that is driving this business we have Better control of what the market is wanting, how to pitch it to different industries. That's important. But if it would be exactly this every quarter, that's maybe too early to say.

Okay, and just one sort of last housekeeping question. You mentioned that the slightly weaker cash flow is due to prepayments during last quarter. Can you quantify exactly how much that is, that effect?

You know how much effect of the prepayment?

Yeah, how much is explained by the prepayment exactly in absolute figures?

Yeah, I would say it's around 20-25 million of those prepayments that we received in Q4 last year. That was a prepayment for this quarter, yeah? Yeah.

Okay, that's clear. Thank you. That's all for me.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thanks for listening. We are still in a very, very interesting market. A lot of things ongoing in the company, and we look forward to a report back on our Q2 results July 17th in roughly three months.