Studsvik AB (publ)

Welcome to Studsvik, Q3, 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 five on their telephone keypad. Now I will hand the conference over to the speakers, President and CEO Carl the Dan and CFO Peter Tesk. Please go ahead.

Thank you and a warm welcome to the Slutsvik Group interim report of Q3 of 2026. Starting with some pictures of who we are and what markets we serve. We have shown these slides many times before. We are operating mainly in Western Europe and North America, but also a big market for us is Japan and Korea and Asia. And we also work in a lot of international corporations and projects incorporating all the states that are having nuclear power except for Russia. We have global sales in 15 countries. We have more than 500 people and we have local offices in six countries. The markets we serve is New build, long-term operation, decommissioning and life science. And traditionally this company has been very active in decommissioning and long-term operation. Decommission is about in a very safe way dismantle and take care of nuclear power plants that are not in service anymore. That typically takes 20 years per plant and our main business there is in Germany and Switzerland. but we also work in other parts like the Nordics. Long-term operations is to support our customers to operate the plants safely and also prepare them for lifetime extensions to support them and analysis how they're going to keep the plants going for many years to come up to 80 and sometimes 100 years after the initial construction. Life science is a reasonably new marketplace that we entered eight, nine years back and we see increased demand and questions around life science where we can handle the isotopes for cancer treatments and other illnesses that are those kind of materials can can solve. And the latest that we are entering as a market is a new building. That was a market that this company started to support 80 years back and is now back in play. And we have announced in the quarter a project to build new reactors here in Sweden. I'll do more of that later. So the markets are basically fourfolded and we have entered into a new market during this year. Next slide, please. But then going to Q3, we are very proud of the growth that we show in the quarter, growing more than 10% compared to the same quarter last year at 227 million Swedish crowns. Very strong performance and this is mainly contributed from the Scanpower business area, but also from the others. The operating margin is in the lower range. That is not unusual for this quarter. Q3 is seasonally a weak quarter from a profitability point of view. And we do see that this is in line with what our expectations. If we go a little bit more into the detail of the different business area, I'm specifically proud of what we have achieved in decommissioning radiation protection services. We started a journey of change in that business area some 12 months back. And in Q2 and even more so in Q3, we now see the results with significantly improved profitability. Actually, over the sort of target that I've set internally of 8%, we're almost hitting 10% profitability. So very strong. That's driven both of utilization, more efficiency, but also a better market in general for the market we serve. In the fuel materials and waste management technology, FMWT, we have a solid quarter. And this business area is affected by the holiday seasons in Europe. And this is, I would say, a strong quarter for being Q3, but it's seasonally affected by the season. We have taken, we come to a significant new orders in this area. We have a very good outlook for this business area. Studsvik Scampower did a record quarter in terms of growth. We grew more than 40% in the quarter. And very interesting is that it's driven not only by the software sales and advisory and support services, but also by the Blackstar tech product that are almost 20% of the sales in the quarter. And we continue to report solid margins in that business act. This is what we call the cash generating core, the main part of the business that we operate with our business areas today. We also have, and this slide tries to do the cash and that's the base business that we drive today and try to improve step by step. And I will say I'm proud to say that we have three business areas that are now in a much better state than they were a year back. and that they are now coming up to the level of growth and profitability where they should be. The asymmetric upside which we have discussed from Q2 is to describe what investments and measures we take to really drive the company into substantially better growth and profitability riding on the wave of new investments in the nuclear sector. Here you can see doing more of existing fleet, the backend, which is basically what we do for Norway, how we engage in new build projects, how we come into new areas like the advanced modular reactors and fusion, and continue to drive life science. If we go back a little bit to Q3 and the key milestones of Q3, as I said, growth in all the three business areas, very important and a solid 10% growth for the group. DRPS, strong demand and profitability. Very interesting, we had an opportunity at our site north of Nyköping in Sweden to take over a hot cell, which is actually more modern and much bigger than the hot cells we have today, that we have rented for some while, but we took it over from Svaffo and that is now in our own capacity. This means that we can continue to grow the FMWT business area. As we see more demand, we need more capacity to deliver that. Very important for us. As I said, Scampower continues to grow strong and both on the software side and on Blackstar Tech. We launched a new build project, come to more of that later, 1.2 gigawatt to be built either at our site in Nyköping or at another site on the east coast of Sweden called Valdemarsvik. We have appointed a new board member in Mats Ladeborn and he also took over as an acting chairman from October 12th. After the quarter, we signed two very interesting deals. Norway, which is a backend where we take care of Norway's legacy fuel. I will describe that more in detail. And a much smaller, but a very interesting strategic order for Japan, where we will develop our in-drunk waste management technology to take care of waste coming out of the Fukushima plant. So let's go into the asymmetric upsides and some proof points of that. So here you see a consortium that we are very very proud of. This was launched on September 3rd in Stockholm and we are obviously aiming to form a consortium but that we as partners can develop new nuclear in Sweden. We will contribute with things that the site and competence on but we also look for partners that can contribute on a broad range to develop this together. In that selection, we found GE Vernova Hitachi that has a proven 300 megawatts SMR that is the only SMR in the Western world now under construction in Darlington, Canada. We also found Samsung that have actually recently built nuclear power plants in Korea and in UAE and have a strong partnership with GE. We also initially launched financing support from DS Investment Partners. So that consortium is really a dream team to drive this forward. As I said, 1.2 gigawatts, that's equivalent to four of these BWRX 300 reactors, two candidate sites, and we expect the first unit to be somewhere in the latter half of 2035. So we will now continue. The next part of this project will be to continue the state aid application to form a joint venture for a company and then continue with the financing and the permitting activities over the next couple of years. So a little bit more on the partners, and it's a true partnership here. We can maybe start from the top right hand corner. These investments, the South Korean investment firm, they have already worked in similar projects in Romania. So they are really keen to not only enter as an investment part, but also maybe more important to be part of an initial early phase investment into this, which could be in many cases the most difficult area to finance and we are very good for us to have them with us from day one. GE Varnova also not only bring reactor technology but also their financing arm is very strong and part of the consortium. We lead permitting, environmental impact assessment, site rights and so on and very important of course to drive this in the Swedish context. As I mentioned, Samsung is a very, very important part of this. They will also engage with local and Swedish suppliers to drive this, but they have the know-how to really lead and drive the construction of these power plants. And then Givanova Hitachi had already a very strong inroad into Sweden as they worked with the other project for many years. And they have then already also a lot of partnerships and knowledge about the Swedish market, but also obviously bring their strong technology from the US market and international market. The second big one, and this was actually signed after we ended the third quarter. This is a picture from the small village or city of Halden, just north of the Swedish border on the west coast. And actually in the mountain behind us there is actually where they host one of their research reactors that they've had. And actually very, very important for research in nuclear that was in operations for them. in the 60s, 70s, 80s and it was closed down in in 2010 or 2005 I think it was. What they are now been looking for they created something called Norsk Nuclear Decommissioning and they wanted a way to in a safe way decommission it. The first thing you need to do that is to take the spent fuel out of the site so you can start decommissioning the rest and they have been looking and evaluating this. We have been engaged with them in a smaller project already from 2018 And now they have decided that we are the best partners to actually help them to get rid of the spent fuel. Very, very important for us and actually for them to get going. It's the legacy fuel that we take care of. It's around 17 tons. It sounds a lot, but obviously this is very small compared to if you run operational reactors. It's a long-term contract but with committed volumes from day one. So it's not a frame agreement, it's a committed volume and purchase orders coming to our desk day one. It's not material for our revenue or profits in 2026 or 2027. But we will build volume in this contract over time as we go and get all the permits to actually import the fuel and store it intermediately at our site in Sweden. And we will utilize facilities that we already have at site. So this is not that we need to invest a lot of money to take us to do this job. There will be some new intermediate storage paid as part of the contract. But other than that, we use a lot of, specifically also, as I mentioned, the hotel that we have taken over will also be a good asset in this. This is also a very good reference for us. There are other similar research reactors that we also have discussions with. This would also prove that we are a site in Europe to help other countries to take care of their spent fuel. The second important, but significantly smaller, day one is the agreement we signed with Reno Industries of Japan. And this is actually very recent. It happened on 21st of October. Reno have applied for funding to start a development project to put our Indram on the site in Fukushima. to take care of contaminated liquids that have been used to clean water that was a big part of the waste and that came out of the Fukushima disaster. We see this very important sign that we have something very important or good technology design and to work with in that sense. So in DRUM, this is a picture from our demo facility at our site. What it basically does is take waste that can't be disposed in its current format to being disposable. It treats everything that is inside a contained environment, typically a DRUM, so you don't need manual handling. And most importantly, it reduces volume by up to 90%, so you actually have to store less of contaminated waste. Reino Industries want to bring this to Fukushima. They will work with us to develop it. And we will advise them, sell the technology licenses and get recurring revenue from that once this site is up and running. But they will run the facility in Fukushima and other parts of Japan and Asia. A very important first step to enter into a new market and also work with this business cycle of Indra. So continue a little bit on asymmetric upside. We have momentum in many areas. Existing fleet, we talked about the Norwegian agreement, which is very much building for the future, giving a strong foundation in high revenue and margin for the company for many years to come. We also have the sign that our Indram, which is a new technology that will also build recurring revenue, not only when we build it at our site in Nyköping, but also when we go into these kind of licensing agreements in the world. A new build, a big area for the asymmetric upside. We took a very important step in the quarter on that one. Advanced nuclear, here I highlight fusion. Fusion is enjoying a lot of investments in countries like the US, Germany, France, also Sweden. And here we highlight that we have a very strong competence in this and we are hosting or we are chairing one of the standardizations around from one of our German colleagues. And we also attended and was a strategic partner and had spokespeople at the Nordic Fusion Forum in Copenhagen last week. So fusion will continue to be an area we'll invest in business development as many of the services they ask for are the services we have provided to the fission or nuclear power market. And in life science, we continue with a lot of interest in business development. So the momentum in the asset metric upside is strong. And as I said, the cash generating core is in very good health. Next slide, please. With that, I hand over to Peter for the financial part.

Thanks to Carl and I will start with the group numbers and the sales in the quarter amounted to 227.4 million that's up 10.7 percent in local currency and as Carl mentioned we are so proud that all our three business area grew within the quarter with such scam power showing in the strongest increase And for the first nine months, the sales amounted to 700.8 million, up 7.9% in local currency. And that's above our financial target of 6%. Operating profit was 7.2 million in the quarter compared to 13.2 million last year, giving an operating margin of 3.2%. When we talk about the results, we need to take into account that Q3 last year, we had a one-off effect of 6 million. So exclude that effect, the profits in the quarter are in line with the Q3 result last year. During the quarter, we have continued to invest in our re-firm program within Blackstar Tech, SMR and AMR development, as well as in in-drum waste technology. These initiatives carry costs today and are intended to support the future growth of the company. And when we talk about operating profit, even on the group level, we want to highlight the increased profitability we had within DRPS. The margin increased to 9.9%. If you look on the free cash flow, as we expected, it was negative in the quarter. It was negative with 35.3 million. The main reason behind this is the changes in working capital, where the customer advances reduced as the prepaid project progressed within our company. And year to date, our free cash flow, when you look at those numbers, you should take into account that they are including the 34.1 million cost of the acquisition of KNXT. If we go into and look a little bit more in the detail of our business areas, we start with the commissioning and radiation protection services. And the sales in the quarter amounted to 92.8 million, and that's up 2.6% in local currency. And for the first nine months, the growth was 4.5%. But the main point we want to highlight here is the improvement of the profitability. The operating profit more than doubled to 9.2 million from 4.4 million last year, and also the increased operating margin. And we see now that the changes we did during the past year now translates into results. We have a clear focus on higher margin services, we have better capacity utilization and we continue our work with the cost discipline. So this combined of a stronger market contributes to the strong result. And then we go to fuel materials and waste technology, FMWT. The sales increased to 83.1 million from 79.5 million, and that's up 4.4% in local currency. And the operating profit was 4.4 million. And we see that it's a slightly lower profit compared to last year. And there's mainly two main reasons behind the lower profit. One is the seasonality that we have within the business. And also during the quarter we had a little bit less favorable product mix. But we are still focusing on improving our productivity and the high utilization. And that will of course continue even into Q4 and ongoing in the next years. With that said, we have a strong order backlog within the business area now when we enter Q4. During quarter, we also took over the operation of the hot cell facility from SVAFO at the Stuttgart site. This expands the capacity and improves the logistics for the future projects. From a financial point of view, this also increased our financial assets and our provisions, and that reflects that the commissioning found of the future obligation of the commissioning of this facility. And also, we signed the NND agreement with Norway. And this is a long-term agreement and runs until 2055. And the agreement includes a fixed annual fee and that's covering the project management, regulatory work, security and also reservation of storage capacity of Studsvik. The pre-study begins immediately and will define in detail how the fuel is collected, transported, handed into Sweden and also returned to Norway. And in these On that basis, the parties, we and Norway, will then finalize the project plan and the budget. And the NMD will place order for each stage. And all these are subject for required regulatory approvals and permits for both countries. And this will not affect our financial material during 2026 or 2027. And then we move to Stusvik Scampower and the sales reached 54.8 million compared to 38.7 million last year. That's a growth of 42.3% in local currency. And that's supported by the software deliveries we've done during the quarter and also signing new customer agreements. But it's also encouraging to see that a Blackstars tech business contributes by near 20% of the business sales in the quarter. The operating profit increased to 9.2 million from 7.8 million Q3 2025. But also we need to take into account that last year we had a one-off in the quarter, so therefore it's a little bit tricky to do the comparison when you compare it between this quarter and also the full year. For the first nine months, sales grew with 21.5% in local currencies, while operating profit was 12.4 million compared to 21.4 million last year. and as I said last year we had one half of 6 million as well as we had some FX gains. And then I will my final slide we'll talk a little bit about our cash flow. The cash flow was as I said in the beginning negative with 35.3 million and that's compared with a lot quarter same quarter last year where we have a positive cash flow but if you look on the bridge I've done to the and start to go from left to right you see that the operating cash flow before working capital was positive with 16.4 million then as expected our working capital was negative with 41.5 million and that's due to that we continue to deliver on our prepaid project and that means that our customer advances has reduced but i also want to highlight that our trade receivables now are almost 19 million higher compared to end of q3 last year and this will of course have a positive effect in our cash collection in the coming month We have also done some investments onsite in New Shopping and they amounted to 10.1 million. And in this case, there's also some minor acquisition investments. For the first nine months, free cash flow was negative with 107.3 million. And also that includes 34.1 million from the KNXT acquisition. And we're still focusing a lot on monitoring the cash flow, and we work with the change... We monitor the cash flow and the change working capital very closely. And to sum up the financial, I will say that it's positive that we have grown in sales in all three business areas. and especially clear improvements in DRPS. And we have an underlying group of ability that was in line with Q3 last year. So we continue to build for future growth while keeping focus on the earnings and cash flow. With that, I will hand it over to you Carl.