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Studsvik Interim / Quarterly Report 2015

Feb 2, 2016

3208_10-k_2016-02-02_51bb533c-ade7-4f92-adee-0f54bc42643b.pdf

Interim / Quarterly Report

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Year-end Report January–December 2015

  • • Sales in the quarter decreased to SEK 241.9 (247.8) million. In local currencies sales decreased by 5 per cent
  • • Operating profit for the quarter decreased to SEK 1.3 (12.2) million
  • • Cash flow after investments was SEK 8.0 (27.7) million.
  • • The Board of Directors proposes that no dividend be distributed.
October
December
October
December
Full year Full year
2015 2014 2015 2014
Sales, SEK million 241.9 247.8 895.4 909.6
Operating profit, SEK million 1.3 12.2 24.4 30.5
Profit after tax, SEK million –7.2 5.5 2.4 5.2
Cash flow after investments, SEK million 8.0 27.7 –40.1 –54.8
Net debt, SEK million 134.3 105.7 134.3 105.7
Net debt/equity ratio, % 45.0 36.1 45.0 36.1
Profit per share after tax, SEK –0.88 0.66 0.29 0.63
Equity per share, SEK 36.30 35.64 36.30 35.64

Sales

Sales decreased to SEK 241.9 (247.8) million for the quarter and to SEK 895.4 (909.6) million for the year. In local currencies this was a decrease of 5 and 6 per cent respectively. For the full year the Consultancy Services and Fuel and Materials Technology business areas reported continued growth, while sales in Waste Treatment continued to be low.

Profit

Operating profit decreased during the quarter to SEK 1.3 (12.2) million and during the year to SEK 24.4 (30.5) million. Items affecting comparability impacted earnings for the previous year by SEK –4.9 million and SEK –12.1 million respectively. Adjusted for these, the operating margin for the quarter was 0.6 (6.9) per cent and 2.7 (4.7) per cent for the year.

Net financial income was SEK –5.9 (–3.3) million and SEK –17.7 (–18.9) million for the year. For the fourth quarter earnings after tax were SEK –7.2 (5.5) million and for the year SEK 2.4 (5.2) million.

Fuel and Materials Technology

Sales in the quarter decreased to SEK 79.4 (87.1) million. During the year sales increased to SEK 262.3 (239.5) million. In local currencies the decrease was 12 per cent for the quarter, while sales for the full year increased by 6 per cent. Demand for the business area's services continues to be strong and operations are developing positively in Europe and China.

Operating profit for the quarter decreased to SEK 16,4 (26.2) million. During the year the operating profit increased to SEK 39.8 (31.4) million. Items affecting comparability impacted earnings for the previous year by SEK –1.4 million. Adjusted for items affecting comparability the operating margin for the year increased to 15.2 (13.7) per cent. The deterioration in earnings in the quarter compared with the previous year is due to the postponement of some major deliveries for Scandpower until the first half of 2016.

Consultancy Services

Sales in the quarter increased to SEK 110.3 (90.6) million. During the year sales increased to SEK 431.8 (399.7) million. In local currencies this was an increase of 20 and 3 per cent respectively.

Operating profit decreased during the quarter to SEK 2.7 (4.9) million and for the year to SEK 22.3 (36.8) million. The year's earnings were negatively impacted by weak sales of ventilation services in England. Items affecting comparability impacted earnings for the previous year by SEK 5.6 million. Adjusted for items affecting comparability the operating margin for the year decreased to 5.2 (7.8) per cent.

Waste Treatment

Sales decreased to SEK 45.1 (60.3) million for the quarter and to SEK 175.3 (241.1) million for the year. In local currencies this was a decrease of 30 and 31 per cent respectively. Demand in Europe continues to be weak, as the number of nuclear power plants in operation or being upgraded is falling, while decommissioning projects have not yet started. The work of establishing a lower cost base continues at the same time as alternative strategies for the business area are being evaluated.

Operating profit for the quarter amounted to SEK –10.1 (–10.2) million and SEK –11.7 (2.9) million for the year. Items affecting comparability impacted earnings for the previous year by SEK –5.1 million. Adjusted for items affecting comparability the operating margin for the year decreased to –6.6 (3.3) per cent.

Investments

Investments in the quarter amounted to SEK 8.8 (13.3) million and roughly unchanged during the year to SEK 33.5 (32.7) million.

Cash flow

The weaker operating profit for the quarter reduced the cash flow to 16,8 (41,0) Mkr. The cash flow for the year was –6,6 (–20,8) Mkr. .

Cash flow after investments in the fourth quarter amounted to SEK 8.0 (27.7) million and for the year to SEK –40.1 (–54.8) million.

Financial position and liquidity

Cash and cash equivalents including current investments, amounted to SEK 74.9 (120.1) million. Net interest-bearing debt was SEK 134.3 (105.7) million, which means that the net debt/ equity ratio was 45.0 (36.1) per cent. The bond loan matures in March 2016 and has therefore been recorded as current in the balance sheet. This bond loan will be refinanced in February.

Personnel

The average number of employees as at December 31 was 829 (895). The decrease is attributable to the Waste Treatment business area and administrative functions.

Transactions with related parties

During the quarter a dividend of SEK 1.4 (3.2) million was received from UK Nuclear Waste Management Ltd and SEK 1.7 (–) million from THOR Treatment Technologies LLC.

Parent company

Operations in the parent company consist of coordination of the Group. Parent company sales in the quarter amounted to SEK 2.6 (2.8) million and during the year to SEK 10.6 (11.9) million. Operating profit for the quarter amounted to SEK –8.9 (–9.8) million and SEK –28.9 (–43.9) million for the year. Items affecting comparability impacted earnings for the previous year by SEK –0.3 million for the quarter and SEK –5.6 million for the year. Profit after financial items in the second quarter was SEK 31.6 (32.4) million and for the year SEK 8.0 (–8.5) million.

Cash and cash equivalents including current investments, amounted to SEK 14.5 (35.6) million.

Dividend

The Board of Directors proposes that no dividend be distributed in 2016.

Annual General Meeting and Annual Report

The Annual General Meeting will be held on Monday, April 25, 2016 at 16:00 at the World Trade Center, Klarabergsviadukten 70/Kungsbron 1. The annual report will be available on the company's website in week 11 (March 14–20), 2016.

Risks and uncertainties

An overall analysis of the Group's risks and how they are dealt with is given in the Annual Report for 2014, which is available on the company's website. Apart from these risks, no further significant risks are estimated to have arisen.

Accounting policies

The consolidated accounts for the Studsvik Group have been prepared in accordance with the Annual Accounts Act, the Swedish Financial Reporting Board recommendation RFR 1, Supplementary accounting rules for groups, IAS 34, International Financial Reporting Standards (IFRS) and interpretations by the IFRS Interpretations Committee (IFRIC) as adopted by the EU. There is a description of these accounting policies in the annual report. The consolidated accounts have been prepared in accordance with the historical cost method except as regards financial assets and liabilities carried at fair value through profit or loss.

The interim report for the parent company was prepared in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board recommendation RFR 2 "Accounting for legal entities".

Stockholm, February 2, 2016 Michael Mononen President

This report has not been reviewed by the company's auditors.

Time schedule for financial information

Interim Report January-March 2016 April 25, 2016
Interim Report January-June 2016 July 22, 2016
Interim Report January-September 2016 Octoboer 21, 2016

For further information please contact

Michael Mononen, President and Chief Executive Officer, +46 155 22 10 86 or Pål Jarness, Chief Financial Officer, +46 155 22 10 09.

The Year-end Report will be presented at a telephone conference to be held in English, on February 2 at 9:30 am. Further information for those interested in participating is available at www.studsvik.com.

Consolidated statement of profit or loss and other comprehensive income

Amounts in SEK million October
December
October
December
Full year Full year
2015 2014 2015 2014
Net sales 241.9 247.8 895.4 909.6
Cost of services sold –170.6 –183.6 –657.2 –660.5
Gross profit 71.3 64.2 238.2 249.1
Selling and marketing expenses –14.8 –16.0 –56.4 –47.6
Administrative expenses –37.6 –28.9 –133.3 –146.9
Research and development costs –8.2 –7.4 –25.4 –25.8
Share in earnings from associated companies 3.5 3.1 11.6 11.5
Other operating income –0.5 –3.1 10.9 5.4
Other operating expenses –12.4 0.3 –21.2 –15.2
Operating profit 1.3 12.2 24.4 30.5
Financial income –0.1 0.1 0.2 0.2
Financial expenses –3.1 –2.6 –13.6 –17.1
Fair value gain/loss (realized and unrealized) –2.7 –0.8 –4.3 –2.0
Profit/loss before tax –4.6 8.9 6.7 11.6
Income tax –2.6 –3.4 –4.3 –6.4
Profit/loss for the period from continuing operations –7.2 5.5 2.4 5.2
Operations held for sale
Profit/loss for the period from operations held for sale 0.0 –0.8 0.0 –17.2
NET PROFIT/LOSS FOR THE PERIOD –7.2 4.7 2.4 –12.0
Other comprehensive income
Items that may later be reversed in the income statement
Translation differences on foreign subsidiaries –6.0 1.9 2.6 19.1
Cash flow hedging 2.2 4.7 0.5 –0.6
Income tax on items recognized in other comprehensive income –0.5 –1.1 –0.1 0.1
Other comprehensive income for the period, net after tax –4.3 5.5 3.0 18.6
Total profit/loss and other comprehensive income for the
period –11.5 10.2 5.4 6.6
Income for the period attributable to
Parent company's shareholders –7.2 4.7 2.4 –12.0
Non-controlling interests
Total comprehensive income attributable to
Parent company's shareholders –11.6 10.2 5.3 6.6
Non-controlling interests 0.1 0.1
Earnings per share calculated on income attributable to
the parent company's shareholders during the period, SEK
Earnings per share (There is no dilution effect)
Profit/loss from continuing operations –0.88 0.66 0.29 0.63
Profit/loss from operations for sale –0.09 –2.09
NET PROFIT/LOSS FOR THE PERIOD –0.88 0.57 0.29 –1.46

Group statement of financial position

Amounts in SEK million December December
2015 2014
ASSETS
Intangible assets 181.4 177.2
Property, plant and equipment 344.8 350.0
Other non-current assets 127.7 128.4
Total non-current assets 653.9 655.6
Inventories 2.4 1.9
Trade receivables 196.6 183.3
Other current receivables 65.7 80.5
Cash and cash equivalents 74.9 120.1
Total current assets 339.6 385.8
TOTAL ASSETS 993.5 1,041.3
EQUITY AND LIABILITIES
Equity attributable to parent company's shareholders 297.9 292.6
Non-controlling interests 0.3 0.3
Borrowing 1.0 203.0
Provisions and other non-current liabilities 238.0 241.0
Total non-current liabilities 239.0 444.0
Trade and other payables 248.1 281.6
Borrowing 208.2 22.8
Total current liabilities 456.3 304.4
TOTAL EQUITY AND LIABILITIES 993.5 1,041.3
Pledged assets 148.9 157.9
Contingent liabilities 52.1 60.7

Changes in equity

Amounts in SEK million Equity
attributable
Share
capital
Other
contributed
capital
Reserves Retained
earnings
to the parent
company's
shareholders
Non
controlling
interest
Total equity
Equity at December 31, 2013 8.2 225.3 –6.0 58.5 286.0 0.3 286.3
Changes January 1 – September 30, 2014
Comprehensive income for the period 13.1 –16.6 –3.5 0.0 –3.5
Equity at September 30, 2014 8.2 225.3 7.1 41.9 282.5 0.3 282.8
Changes Ocotber 1 – December 31, 2014
Comprehensive income for the period 5.5 4.7 10.1 0.0 10.1
Equity at December 31, 2014 8.2 225.3 12.6 46.5 292.6 0.3 292.9
Changes January 1 – September 30, 2015
Comprehensive income for the period 7,2 9.7 16.9 0.0 16.9
Equity at September 30, 2015 8.2 225.3 19.8 56.2 309.5 0.3 309.8
Changes Ocotber 1 – December 31, 2015
Comprehensive income for the period –4.3 –7.2 –11.5 0.0 –11.5
Equity at December 31, 2015 8.2 225.3 15.5 49.0 297.9 0.3 298.3

Group statement of cash flow

Amounts in SEK million October– October– Full year Full year
December December
2015 2014 2015 2014
Cash flow from operating activities
Operating profit 1.4 11.2 24.4 17.9
Adjustment for non-cash items 7.9 5.7 28.7 17.3
Financial items, net –1.5 –2.5 –11.5 –17.6
Income tax paid 6.4 9.9 –6.9 1.1
Cash flow from operating activities before change in 14.2 24.3 34.7
working capital 18.7
Change in working capital 2.6 16.7 –41.3 –39.5
Cash flow from operating activities 16.8 41.0 –6.6 –20.8
Investing activities
Acquisition of property, plant and equipment –8.8 –13.3 –33.5 –34.0
Divestment of subsidiaries 93.9
Dividend from associated companies 3.0 2.1 12.7 10.4
Other cash flow from investing activities –2.6 14.5 –2.4 0.4
Cash flow from investment activities –8.3 3.3 –23.2 70.7
Financing activities
Change in borrowing –15.2 –4.0 –16.7 –92.6
Dividend to shareholders
Cash flow from financing activities –15.2 –4.0 –16.7 –92.6
Changes in cash and cash equivalents –6.6 40.3 –46.5 –42.6
Cash and cash equivalents at the beginning of the period 83.3 75.2 120.1 151.4
Translation difference –1.7 4.6 1.3 11.3
Cash and cash equivalents at the end of the period 74.9 120.1 74.9 120.1

Financial ratios for the Group

Amounts in SEK million Full year Full year
2015 2014
Margins
Operating margin, % 2.7 3.3
Profit margin, % 0.7 1.3
Return on investment
Return on capital employed, % 6.6 5.5
Return on equity, % 0.8 1.8
Capital structure
Capital employed 507.5 518.7
Equity 298.3 292.9
Net debt 134.3 105.7
Net debt/equity ratio, % 45.0 36.1
Equity/assets ratio, % 30.0 28.1
Employees
Average number of employees 829 895
Net sales per employee 1.1 1.0
Data per share October
December
October
December
Full year Full year
2015 2104 2015 2014
Number of shares at the end of the period 8,218,611 8,218,611 8,218,611 8,218,611
Average number of shares 8,218,611 8,218,611 8,218,611 8,218,611
Earnings per share before and after dilution
Profit/loss from continuing operations –0.88 0.66 0.29 0.63
Profit/loss from operations held for sale –0.09 –2.09
Profit/loss for the period –0.88 0.57 0.29 –1.46
Equity per share, SEK 36.30 35.64 36.30 35.64

Net sales per geographical area

Amounts in SEK million October– October– Full year Full year
December December
2015 2014 2015 2014
Sweden 54.7 52.6 178.0 182.9
Europe, excluding Sweden 149.9 147.5 579.4 616.0
North America – from continuing operations 28.3 36.3 105.0 84.9
Asia 2.8 5.8 26.8 20.3
Other 6.1 5.6 6.1 5.6
Total 241.9 247.8 895.4 909.6

Quarterly review

Amounts in SEK million 2013 2014 2015
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Net sales 250.9 266.5 216.9 266.9 219.7 217.0 225.1 247.8 201.1 234.8 217.6 241.9
Operating expenses –243.6 –253.4 –211.2 –277.0 –214.4 –216.9 –212.2 –235.6 –206.1 –223.4 –201.0 –240.6
Operating profit 7.3 13.1 5.7 –10.1 5.3 0.1 12.9 12.2 –5.0 11.4 16.6 1.3
Financial items, net –4.9 –9.5 –0.3 –4.1 –6.6 –4.1 –4.9 –3.3 –1.9 –4.4 –5.4 –5.9
Profit/loss after financial
items
2.4 3.6 5.4 –14.2 –1.3 –4.0 8.0 8.9 –6.9 7.0 11.2 –4.6

Financial data per segment

Amounts in SEK million

Amounts in SEK million Fuel and
Waste Consultancy Materials
October–December 2015 Treatment Services Technology Other Elimination Group
External sales revenue 44.9 109.9 79.4 7.7 241.9
Revenue from segment 0.2 0.4 0.0 2.7 –3.2 0.0
Operating profit –10.1 2.7 16.4 –7.6 1.3
Assets 320.9 394.8 234.1 344.2 –300.5 993.5
Liabilities 226.8 319.3 98.3 351.2 –300.5 695.2
Investments 4.8 0.5 1.0 2.5 8.8
Depreciation/amortization 3.7 0.5 2.3 2.1 8.6
Average number of employees 108 507 117 95 827
October–December 2014 Waste
Treatment
Consultancy
Services
Fuel and
Materials
Technology
Other Elimination Group
External sales revenue 60.0 91.8 87.2 8.8 247.8
Revenue from segment 0.3 –1.2 –0.1 3.5 –2.5 0.0
Operating profit –10.2 4.9 26.2 –8.7 12.2
Assets 320.8 359.5 227.4 414.6 –281.0 1,041.3
Liabilities 255.3 305.3 108.5 360.5 –281.0 748.4
Investments 9.1 0.1 1.4 2.7 13.3
Depreciation/amortization 3.9 –1.9 2.3 1.8 6.1
Average number of employees * 145 519 118 95 877
Full year 2015 Waste
Treatment
Consultancy
Services
Fuel and
Materials
Technology
Other Elimination Group
External sales revenue 174.2 430.0 262.3 29.0 895.4
Revenue from segment 1.2 1.8 0.0 11.0 –14.0 0.0
Operating profit –11.7 22.3 39.8 –26.1 24.4
Assets 320.9 394.8 234.1 344.2 –300.5 993.5
Liabilities 226.8 319.3 98.3 351.2 –300.5 695.2
Investments 18.9 1.2 5.9 7.5 33.5
Depreciation/amortization 14.7 1.8 9.0 8.0 33.6
Average number of employees 109 508 117 95 829
Full year 2014 Waste
Treatment
Consultancy
Services
Fuel and
Materials
Technology
Other Elimination Group
External sales revenue 240.3 397.7 239.5 32.1 909.6
Revenue from segment 0.8 2.0 0.0 14.7 –17.5 0.0
Operating profit 2.9 36.8 31.4 –40.6 30.5
Assets 320.8 359.5 227.4 414.6 –281.0 1,041.3
Liabilities 255.3 305.3 108.5 360.5 –281.0 748.4
Investments 21.7 0.3 5.3 5.4 32.7
Depreciation/amortization 16.0 2.2 8.5 7.2 33.9
Average number of employees* 148 527 120 100 895

*A reclassification of employees between segments has been made for 2014.

Parent company income statement October–
December
October–
December
Full year Full year
Amounts in SEK million 2015 2014 2015 2014
Net sales 2.6 2.8 10.6 11.9
Cost of services sold –0.5 –0.4 –2.9 –2.2
Gross profit 2.1 2.4 7.7 9.7
Other operating income and costs –11.0 –12.2 –36.6 –53.6
Operating profit –8.9 –9.8 –28.9 –43.9
Result from participations in Group companies 45.1 42.8 45.1 42.8
Net financial items –4.6 –0.6 –8.2 –7.4
Profit/loss before tax 31.6 32.4 8.0 –8.5
Income tax –6.5 –4.6 –1.2 2.4
NET PROFIT/LOSS FOR THE PERIOD 25.1 27.8 6.8 –6.1

Parent company balance sheet

Amounts in SEK million December
2015
December
2014
ASSETS
Intangible assets 3.3
Property, plant and equipment 0.0 0.0
Financial non-current assets 607.3 612.1
Total non-current assets 610.6 612.1
Current assets 51.8 53.3
Cash and cash equivalents 14.5 35.6
Total current assets 66.3 88.9
TOTAL ASSETS 676.9 701.0
EQUITY AND LIABILITIES
Equity 290.9 284.1
Provisions
Non-current liabilities 106.7 282.6
Current liabilities 279.3 134.3
Total liabilities 386.0 416.9
TOTAL EQUITY AND LIABILITIES 676.9 701.0
Pledged assets 133.9 133.9
Contingent liabilities 5.3 5.4

Note 1 Fair value estimation

The tables below show financial instruments at fair value on the basis of their classification in the fair value hierarchy. The definition of the various levels can be found in the Annual Report, Note 2.3.

The Group's assets and liabilities measured at fair value as at December 31, 2015 (MSEK) Level 1 Level 2 Level 3
Assets
Financial assets at fair value through profit or loss 22.5 11.3
Derivatives used for hedging 2.5
Liabilities
Derivatives used for hedging 6.8
The Group's assets and liabilities measured at fair value as at December 31, 2014 (MSEK) Level 1 Level 2 Level 3
Assets
Financial assets at fair value through profit or loss 24.1 11.2
Derivatives used for hedging 2.1
Liabilities
Derivatives used for hedging 16.5
Fair value of the Group's borrowings (MSEK) December 31, 2015 December 31, 2014
Non-current loans 1.0 203.0
Current loans 208.2 22.8
Total loans 209.2 225.8
Major shareholders, December 31, 2015
Number of shares Share, %
The Karinen Family 1,769,552 21.5
Briban Invest AB 1,283,492 15.6
Credit Agricole Suisse SA 363,879 4.4
Avanza Pensionsförsäkring AB 347,163 4.2
Nordnet Pensionsförsäkring AB 327,551 4.0
Invus Investment AB 276,594 3.4
Malte Edenius 250,000 3.0
Eikos AB 201,950 2.5
Leif Lundin 186,000 2.3
Unionen 152,709 1.9
Total ten largest shareholders – holdings 5,158,890 62.8
Other shareholders 3,059,721 37.2
Total 8,218,611 100.0

The Studsvik share

In the fourth quarter the share price varied between a high of SEK 34.30 on November 20 and 23, and a low of SEK 28.50 on October 21, 2015. The opening price was SEK 32.80 at the beginning of the year and the closing price on December 31 was 32.70. In the fourth quarter 1.3 millions shares were traded.

Facts about Studsvik

Studsvik offers a range of advanced technical services to the international nuclear power industry in such areas as waste treatment, consultancy services and fuel and materials technology. The company has over 65 years' experience of nuclear technology and radiological services. Studsvik has 800 employees in 7 countries and the company's shares are listed on the Nasdaq Stockholm.

This report is a translation of the Swedish statutory report. In the event of any discrepancies between this document and the Swedish original, the latter shall govern. The content of this interim report may not, in whole or part, be reproduced or stored in a machine-readable medium without the previous permission of Studsvik AB (publ).

Production/Graphic design: Studsvik AB Photo: Studsvik

Studsvik AB

SE-611 82 Nyköping, SWEDEN Telephone +46 155 22 10 00 Fax +46 155 26 30 70 E-mail [email protected] www.studsvik.com