Studsvik AB (publ)

Welcome to Studsvik Q1 2026 conference call. For the first part of the conference call, the 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 the speakers, President and CEO Carl Dedean and CFO Peter Tesk. Please go ahead.

Thank you very much and welcome to our Q2 earnings call for 2026. I'll typically start by just explaining the basis of the company. This is our financial figures for 2025. We are roughly 100 million dollars in revenue. We operate in 15 countries, meaning that we have customers in 15 plus countries. We are more than 500 people worldwide and we have offices in six countries. Our main markets are Nordics, continental Europe, UK, Canada and the US, Korea and Japan. Continue also to remind us about our key offerings and actually the key markets we operate in. If you start at the bottom right hand corner, you see life science. This is an emerging area for us. We have been in this area for quite some time now, but we see a lot of new developments in managing and handling highly radioactive isotopes for production purposes going into healthcare equipment, but also other industrial applications will require our competence and facilities. The main markets that we operate in are long-term operation and decommissioning. And long-term operation is all about serving the existing 440, or roughly there are 440 plants in the world, and we are actively supporting more than 200 of these. And that is both ongoing operation, but also securing lifetime extensions. In decommissioning, we are active mainly in Germany and then also in Switzerland, Benelux, and then in the Nordics. This is to safely both support outages and maintenance, but also tearing down nuclear power plants that are shut down. This is a process that typically takes 20 years or more. And a lot of our services comes into play there, including waste management, software to manage intermediate fuel, but also traditional decommissioning on-site services. The new area that we are exploring as Nubel is coming into play again into the nuclear sector is supporting Exister reactor developers to support to do the licensing and development of reactors. But also in the quarter, we have added a new company called Canformex or KNXT. That is a product development company focused on developing sites with nuclear here in Sweden. And that obviously gives us more into the center of those developments and enabling us to become a big player also in the new build area. Highlights of our financial figure for Q2. I'm very proud to say that we have grown more than 9% in the quarter after 247 million Swedish crowns. And that is driven by growth in all of the business areas as you see below. We have an adjusted operating margin of 5.8%. This is a bit on the low side, and that is due to the investments that we continue to do into the long-term scaling of this company, both into sales, product and service development. I'll come to that a bit later. If we then look into the three different business areas, I'm very proud to say that decommissioning and radiation protection services, DRPS, has a strong growth in the quarter, almost 9%, and also extremely important that we are finally turning the corner and making this business into a much more profitable business, reaching 7% in operating margin in the quarter. This is due to strategic changes in moving our business into more profitable areas and also change of leadership in this operation. Our business fuel materials and waste management technology is continuing to go very strong with strong demand for developing new fuels, material testing and other things that is required for lifetime extensions. We see growth of almost 9% and a very healthy operating margin of more than 18%. Sturtvik Scampower, which is predominantly our software business for core fuel software, is a very seasonal business and in the quarter we have not received any material license sales, which is obviously hampering then our profitability to low levels in the quarter. And we have growth and that is injected partly by the stronger development for Black Star Tech, the products and company we acquired a little bit more than a year back in 2025. All in all, strong growth from all business areas and a strong revamp from decommissioning. Key milestones, we talked about DRPS, we talked about FNWT, Canva Next, very important, and we continue not only to acquire that, they also integrated the two founders, Kristian Sjölander is now heading up the activity around new build, and John Albrecht is supporting that, but also taking on the position in the executive team as chief marketing officer. We have been very active in this space with handing in yet another application for a site, in this case our own site in Stuttgart, just north of Nyköping. and also handed in, very importantly, the state aid application, as Sweden has a very comprehensive support package from the state to enable new nuclear. If we then move over to the rest of the world, then our biggest and most important market for nuclear is the US, and we have taken advancement there in the advanced reactor sector with new software contract for an unnamed customer. We also took a contract for Lightbridge that are developing new types of fuel for the next generation reactors and that they have also selected our software. Very importantly, the US regulator NRC have approved the use of CMS5 for new reactor types, giving a clear indication that anyone that wants to go for licensing and approvals in the US, for them it's very good to use our software. We also received a follow-on order from IFA that is managing the old research reactors that are out of service in Norway. We see this kind of back-end fuel where we actually transform the spent fuel into a format that can be put in final repository as an important business not only from Norway but also from other research reactors throughout Europe. I wanted to take the opportunity in this call to talk a little bit about the investment case in Studsvik. It's basically one platform. We have two return profiles with slightly different time horizons. First of all, we have the cash generating core, which is the quality of today's business as we are reporting, for example, this quarter. That is built on the long heritage of our company. It's built on the huge customer base we have and the fact that we are an extremely well-known company in our business or in our sector. It's built on that we provide end-to-end service offering. But to that we have added over the last couple of years an asymmetric upside for the company with four structural growth drivers being the new investments that we see into extending life of existing plants. That's a real investment that is coming and we have not yet seen the biggest scale of this going into securing the extension of the 440 light water reactors we have in the world. At this parallel, in many countries, there is a launch of gigawatt-scale new build programs in many countries in Europe, Asia, and in the US. We also see the development of Gen 4 reactors, including fusion, where there's a lot of money poured in, being a big opportunity for us to also continue to drive and see upside on a lot of the services that we have. And as mentioned before, life science and industrial applications are also moving. So basically a core business that is very healthy, and then we add to that upside. And if you go into the upside with this picture, It's not only talking, this is actually for real. There is clear drivers and we have momentum in all these four areas. We have a strong momentum in long-term operation, lifetime extension as we have proven. And I want to highlight the two research programs that we do on an international scale with up to 15 organizations and companies coming together asking us to do material and fuel testing for them. We also have a lot of activities and contracts for our interim waste reduction technology being in place. In New Build, as I said, we are applying for sites and state aid applications, and we are supporting the advanced new generation reactors that also will be a very big part of the worldwide nuclear developments. And healthcare is also a business we have been in, and we see new contracts coming our way in that sector. This means that if you look on the investment case, we have big upside as this momentum will start into bigger and bigger opportunities as more and more reactors are built, existing fleet goes into big investment to secure the lifetime and advanced nuclear becomes a reality. With that said, I hand over to our CFO, Peter Teske, please.

Thank you, Carl. And I will start with the group financial performance. And as you see, the sales in the quarter amounted to 247 million representing a growth of 9.2% in local currencies. And as is seen in the previous slides that we have all the three business areas that they are increasing the sales during the quarter. Now we'll come back to the main reasons behind that later on in this presentation. We reported an operating profit of 9.2 million. However, these include the acquisition-related cost and cost for the implementation of the group's long-term incentive program, the LTIP program. Adjusted for these one-off items, the operating profit is 14.3 million, corresponding to an adjustment operating margin of 5.8%. During the quarter, we have continued to build for the future. We have completed the acquisition of Canful Next, continued the integration and development of our recent acquisitions, including Extreme Bar and Soak Technique and Black Star Tech, and continued our investments in strategic growth initiatives. This action has a short-term negative impact on the earning and cash flow, but our intent is to strengthen the group's long-term position. And the free cash flow for the quarter was impacted by the acquisition of KNXT and changes in working capital. But I will come back to that later on. But then if we go into our three business segments, we start with the decommissioning and radiation protection services. and this business area delivered a strong quarter. The sales increased to 96.8 million, corresponding to a growth of 8.9% in local currencies. The increase was supported by good progress in our planned outages projects in Belgium, Switzerland and Netherlands, together with a higher capacity utilization across the whole business area. And more importantly, the sales growth also translated into improved profitability. So the operating profit increased from 4.4 million to 6.8 million. And the operating margin improved from 4.9% to 7%. So we are now beginning to see the effect of the strategic changes we made during the past year. And the improvement is a result of high utilization, strong focus on the higher margin services, cost control and more efficient organization. And we also see during the quarter that we have seen more improved market conditions. And then we move to fuel materials and waste technology. and also delivered a high and stable level of profitability. We see the increased sales to 116.3 million and an increased operating profit to 21 million SEK and we see an operating margin of 18.1%. And the development was supported by good progress in our customer project, improved productivity, higher capacity utilization, and a favorable product mix. And what's particularly positive is that increased sales were converted into earnings where the margins remain above 18%. And this demonstrates a strength in the underlying business model and our capability to maintain disciplined project execution. And if we move to Stuttgart Scampower, we see an increase of sales to 37.1 million compared to 35.5 million last year. And Blackstar Tech that we did acquire last year in Q1 had a positive effect on the revenues during Q2. And at the same time, we see that operating profit amounted to a negative of 5.4 million. And that's two important factors behind the results. First, the business is seasonal with a larger share of sales normally generated during the second half of the year. And a single quarter therefore does not necessarily reflect expected full year performance. Second, we are currently investing in long-term initiatives to drive future sales growth and product development. For example, within the SMR and AMR market. And also we're building a pipeline and opportunities, particularly within Blackstar Tech. And we should also notice that during last year, we had a positive exchange rate effect. And then if we then look on our cash flow, finally, and we have during the quarter negative free cash flow of 59.6 million. compared to a negative of 1.3 million last year. And we see in the quarter, 34.1 million of the cash outflow was related to the completion acquisition of KNXT. The remaining is partly driven by the changes in working capital, where including a reduction in customer advances as ongoing projects progress during the quarter. So this should mainly be seen as timing and acquisition related effects. And as you see, and as is illustrated in the graph, statistics cash flow can vary significantly between the quarters. And this reflects the different business models across the three business areas, as well how important this with timing of project execution, timing of invoicing and timer of customer payments. And as a consequence of the acquisition and the changes to working capital, we have an increase of the net debits during the quarter. But we see that the group has a solid capital structure with an equity to asset ratio of 39.1%. And looking ahead, cash flow and working capital will remain a key priorities. and we will continue to focus on our discipline project execution, timing of the invoicing, customer collection and overall financial control across the group. And to summarize, this was a quarter of continued growth and continued investments of the future of Studsvik We delivered sales growth across all three business areas. We completed the acquisition of KNXT and continue to build capabilities in important growth areas. So with that said, I will hand over to Katrin.