Studsvik — Interim / Quarterly Report 2017

Oct 20, 2017

Interim Report Third Quarter 2017

• Sales in the quarter were SEK 183.3 (164.6) million. In local currencies sales increased by 12 per cent.
• Operating profit for the quarter amounted to SEK 15.5 (–11.9) million. Items affecting comparability reduced earnings by SEK –0.1 (–3.7) million.
• Free cash flow excluding the effect of divested operations was SEK –10.4 (–23.1) million.

	July September	July September	January September	January September	Full year
	2017	2016	2017	2016	2016
Sales, SEK million	183.3	164.6	539.5	512.5	758.8
Operating profit, SEK million	15.5	–11.9	–5.9	–2.4	24.7
Profit after tax, SEK million	11.1	–1.3	–15.0	5.0	8.1
Free cash flow, SEK million*	–10.4	183.1	–53.5	151.8	129.6
Net debt, SEK million	71.2	–18.5	71.2	–18.5	2.9
Net debt/equity ratio, %	23.1	–5.4	23.1	–5.4	0.8
Profit per share after tax, SEK	1.35	–0.16	–1.83	0.61	0.99
Equity per share, SEK*	37.76	41.44	37.76	41.44	42.41

*Refers to total operations 2016

Sales

Sales increased during the quarter to SEK 183.3 (164.6) million and during the first three quarters of the year to SEK 539.5 (512.5) million. In local currencies the increase was 12 and 4 per cent respectively. Sales in the Consultancy Services business area increased during the quarter, while sales in Fuel and Materials Technology and Studsvik Scandpower were on a level with the previous year.

Profit

The operating profit for the quarter increased to SEK 15.5 (–11.9) million. During the year to date, however, earnings deteriorated somewhat, to SEK –5.9 (–2.4) million. Items affecting comparability referring to staff cutbacks, mainly in the consulting operations and in administration, reduced earnings for the quarter by SEK –0.1 (–3.7) million and for the year to date by SEK –6.2 (–8.7) million. Adjusted for items affecting comparability, the operating margin for the third quarter increased to 8.5 (–5.0) per cent. For the three first quarters of the year, however, the operating margin deteriorated to SE0.1 (1.2) per cent. The improvement for the quarter is mainly from license revenue from Consultancy Services. Loss after financial items was SEK –4.6 (–4.5) million and during the year to date SEK –13.4 (–16.2) million. Profit after tax was SEK 11.1 (–1.3) million for the quarter and SEK –15.0 (5.0) million for the first three quarters of the year.

Fuel and Materials Technology

Sales in the third quarter were unchanged at SEK 36.0 (36.6) million. In the first three quarters of the year sales increased to SEK 140.6 (134.2) million. In local currencies the change was –1 and 5 per cent respectively.

Operating profit for the quarter decreased to SEK –3.6 (0.6) million and during the year to date to SEK 7.1 (19.5) million. The operating margin for the quarter was –10 (1.6) per cent. Items affecting comparability referring to staff cutbacks had a negative impact on the first three quarters of the year of SEK –0.3 (0) million and the operating margin deteriorated to 5.3 (14.5) per cent. The operating margin for the quarter was adversely affected by a partial stoppage at the facility in September, which resulted in a revenue displacement of about SEK 5 million. Production is expected to return to normal from the middle of the fourth quarter.

Consultancy Services

Sales increased in the third quarter to SEK 120.7 (104.3) million and for the first three quarters of the year to SEK 322.9 (319.5) million. In local currencies the increase was 16 and 0 per cent respectively.

Operating profit for the quarter increased to SEK 26.2 (–5.6) million and during the year to date to SEK 16.2 (6.1) million. Items affecting comparability referring to staff cutbacks reduced profit for the third quarter by SEK –0.1 (–3.7) million and for the first three quarters of the year by SEK –2.6 (–7.4) million. Adjusted for these, the operating margin was 21.8 (–1.8) and 5.8 (4.2) per cent respectively. The improvement during the quarter is due to revenues from the cooperation agreement with Dynatech in China for FBSR technology and good capacity utilization in Industrial Services (Germany) and Waste Treatment (England). The first three quarters of the year include royalties of SEK 21.4 (18.6) million. Excluding these, earnings in the underlying operations for the year to date increased by SEK 2,5 million. The measures to improve profitability are having an effect, while evaluation of alternative strategies for operations in Germany are continuing.

Studsvik Scandpower

Sales in the third quarter decreased somewhat to SEK 19.6 (19.8) million. In the first three quarters of the year sales increased to SEK 56.4 (54.9) million. In local currencies the increase was 1 per cent.

Operating profit for the quarter was SEK –2.7 (–2.9) million and during the year to date SEK –9.8 (–10.8) million.

During the quarter Scandpower signed an agreement with Fennovoima in Finland for further development of software for their reactor type.

The process of obtaining export licenses from the American authorities for software ordered for China is continuing, but it is still not clear when the American authorities may grant them.

Investments

Investments for the continuing operations in the third quarter were SEK 2.8 (2.8) million and during the first three quarters of the year were SEK 15.2 (9.8) million. The investments mainly refer to equipment for testing and maintenance of the Studsvik facility.

Cash flow

Cash flow from operating activities was SEK –8.9 (–21.2) million for the third quarter and SEK –46.8 (–50.7) million for the year to date. The free cash flow excluding cash flow effect of sale of subsidiaries was SEK –10.5 (–23.1) million for the third quarter and SEK –53.5 (–54.4) million for the year to date. USD 1.5 million of the royalties for the FBSR license to Dynatec was paid in September. The remaining USD 1 million is to be paid in December.

Financial position and liquidity

Cash and cash equivalents amounted to SEK 128.2 (316.4) million. In November 2016, SEK 100 million of the bond loan was amortized. Net interest-bearing debt was SEK 71.2 (–18.5) million, which means that the net debt/equity ratio was 23.1 (–5.4) per cent. At the close of 2016 the net debt/equity ratio was 0.8 per cent.

Personnel

The average number of employees as at September 30 was 668 (718). The decrease refers to fewer employees in the consulting operations in Germany and England. At the start of the year the number of employees was 687.

Transactions with related parties

During the quarter a dividend of SEK 1.2 (1.4) million was received from UK Nuclear Waste Management Ltd.

Parent company

Operations in the parent company consist of coordination of the Group. Parent company sales were SEK 4.6 (3.8) million for the quarter and SEK 14.7 (12.7) million for the three-month period. Operating profit for the quarter amounted to SEK –3.1 (–4.5) million and SEK –13.2 (–15.5) million for the three-month period. Profit after financial items in the quarter was SEK –9.7 (–6.1) million and for the three-month period SEK –29.4 (–21.3) million. The year's net financial income includes revaluation of intra-group loans of SEK –11.6 (3.3) million. Cash and cash equivalents including current investments amounted to SEK 8.2 (97.7) million and interest-bearing liabilities to SEK 200 (298) million.

Risks and uncertainties

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

Accounting policies

The interim report has been prepared in accordance with IAS 34 and the Annual Accounts Act. 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, 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 revaluation effect of intra-group loans in foreign currency is recognized as a translation difference on foreign subsidiaries under other comprehensive income. Comparison periods have been adjusted.

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.

The interim financial information on pages 4-14 forms an integral part of this financial report.

Time Schedule for Financial Information

Year-end Report January–December 2017	February 15, 2018
Interim Report January-March 2018	April 25, 2018
Interim Report January–June 2018	July 20, 2018
Interim Report January–September 2018	October 22, 2018

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 interim report will be presented at a telephone conference to be held in English on October 20, at 14.00 CET. If you are interested in participating please refer to www.studsvik.com for further information.

Consolidated statement of profit or loss and other comprehensive income

Amounts in SEK million	July September 2017	July September 2016	January September 2017	January September 2016	Full year 2016
Net sales	183.3	164.6	539.5	512.5	758.8
Cost of services sold2)	–126.8	–131.2	–404.1	–383.8	–535.3
Gross profit	56.5	33.4	135.4	128.7	223.5
Selling and marketing expenses	–10.2	–10.4	–33.5	–32.0	–44.4
Administrative expenses2)	–25.2	–26.9	–84.8	–79.0	–112.8
Research and development costs	–7.2	–6.5	–21.1	–19.8	–27.5
Share in earnings from associated companies	1.8	1.9	6.6	7.2	4.1
Other operating income	1.0	2.1	1.9	7.9	8.2
Other operating expenses	–1.1	–5.5	–10.3	–15.4	–26.4
Operating profit	15.5	–11.9	–5.9	–2.4	24.7
Financial income	–0.8	0.0	0.0	0.0	0.1
Financial expenses	–3.3	–5.9	–11.3	–16.3	–25.0
Fair value gain/loss (realized and unrealized)1)	–0.5	1.4	–2.1	0.1	–0.4
Profit/loss before tax	10.9	–16.4	–19.3	–18.6	–0.6
Income tax	0.2	15.1	4.3	23.6	8.7
Profit/loss for the period from continuing operations	11.1	–1.3	–15.0	5.0	8.1
Operations held for sale Note 2
Profit/loss for the period from operations held for sale	0.0	78.4	0.0	47.3	46.0
NET PROFIT/LOSS FOR THE PERIOD	11.1	77.1	–15.0	52.3	54.1
Other comprehensive income Items that may later be reversed in the income statement
Translation differences on foreign subsidiaries1)	–9.9	–4.1	–18.2	–11.3	–4.6
Cash flow hedging	1.0	–0.6	4.0	1.7	0.8
Income tax on items recognized in other comprehensive income	–0.2	0.1	–0.9	–0.4	–0.2
Other comprehensive income for the period, net after tax	–9.1	–4.6	–15.0	–10.0	–4.0
Total profit/loss and other comprehensive income for the	2.0	72.5	–30.0	42.3	50.1
period
Income for the period attributable to
Parent company's shareholders	11.1	77.1	–15.0	52.3	54.1
Non-controlling interests	0.0	0.0	0.0	0.0	0.0
Total comprehensive income attributable to
Parent company's shareholders	2.0	72.5	–29.9	42.3	50.0
Non-controlling interests	0.0	0.0	–0.1	0.0	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	1.35	–0.16	–1.83	0.61	0.99
Profit/loss from operations for sale	0.00	9.54	0.00	5.76	5.60
NET PROFIT/LOSS FOR THE PERIOD	1.35	9.38	–1.83	6.36	6.58

1) Net financial income and the translation difference in other comprehensive income have been adjusted in comparison with previous reports. The effect of this adjustment is presented in Note 1.

2) A reclassification has been made between types of expense in 2016 to achieve comparability for 2017. Administrative expenses for the quarter has been decreased by SEK 4.9 million, while costs of services sold haas been increased by SEK 4.9 million. Accumulated administrative expenses has been decreased by SEK 14.7 million, while costs of services sold has been increased by SEK 14.7 million.

Group statement of financial position

Amounts in SEK million	September 2017	September 2016	December 2016
ASSETS
Intangible assets	172.8	176.8	178.0
Property, plant and equipment	115.6	111.9	113.3
Other non-current assets	143.3	135.0	155.8
Total non-current assets	431.8	423.7	447.1
Inventories	1.6	2.3	2.0
Trade receivables	157.5	142.1	150.8
Other current receivables	132.0	118.7	105.7
Cash and cash equivalents	128.2	316.4	195.4
Total current assets	419.3	579.5	453.9
Assets in disposal group held for sale Note 2	0.0	0.0	0.0
TOTAL ASSETS	851.1	1,003.2	901.0
EQUITY AND LIABILITIES
Equity attributable to parent company's shareholders	309.9	340.2	348.1
Non-controlling interests	0.3	0.4	0.4
Total equity	310.2	340.6	348.5
Borrowing	199.5	297,9	198.2
Provisions and other non-current liabilities	159.2	161.0	161.7
Total non-current liabilities	358.7	458.9	359.9
Trade and other payables	182.2	203.7	192.6
Borrowing	0.0	0.0	0.0
Total current liabilities	182.2	203.7	192.6
Liabilities in disposal group held for sale Note 2	0.0	0.0	0.0
TOTAL EQUITY AND LIABILITIES	851.1	1,003.2	901.0
Pledged assets	238.4	238.9	238.4
Contingent liabilities	69.4	83.8	71.7

Changes in equity

Amounts in SEK million					Equity
					attributable
	Share	Other contributed		Retained	to the parent company's	Non controlling
	capital	capital	Reserves	earnings	shareholders	interest	Total equity
Equity at December 31, 2015	8.2	225.3	15.5	49.0	297.9	0.3	298.3
Changes January 1 – September 30, 2016
Comprehensive income for the period	0.0	0.0	–10.0	52.3	42.3	0.0	42.3
Equity at June 30, 2016	8.2	225.3	5.5	101.3	340.3	0.3	340.6
Changes October 1 – December 31, 2016
Comprehensive income for the period	0.0	0.0	5.9	1.9	7.8	0.1	7.9
Equity at December 31, 2016	8.2	225.3	11.4	103.2	348.1	0.4	348.5
Changes January 1 – September 30, 2017
Dividend				–8.2	–8.2		–8.2
Comprehensive income for the period	0.0	0.0	–15.0	–15.0	–30.0	–0.1	–30.1
Equity at June 30, 2017	8.2	225.3	–3.6	80.0	309.9	0.3	310.2

Group statement of cash flow

Amounts in SEK million	July September	July September	January September	January September	Full year 2016
Total operations	2017	2016	2017	2016
Cash flow from operating activities
Operating profit	15.5	66.0	–5.9	44.4	70.0
Adjustment for non-cash items	3.3	–69.9	5.1	–54.8	–43.7
Financial items, net	–3.2	–6.0	–9.9	–16.4	–25.4
Income tax paid	–3.8	–4.2	–10.4	–10.2	–8.3
Cash flow from operating activities before change in working capital	11.8	–14.1	–21.1	–37.0	–7.4
Change in working capital	–20.5	–7.1	–25.7	–13.7	–48.8
Cash flow from operating activities	–8.8	–21.2	–46.8	–50.7	–56.1
Investing activities
Acquisition of property, plant and equipment	–2.8	–3.0	–15.2	–13.0	–18.5
Acquisition in associated companies	0.0	0.0	0.0		–12.1
Divestment of subsidiaries	0.0	206.2	0.0	206.2	206.1
Dividend from associated companies	1.2	1.4	8.5	8.4	9.7
Other cash flow from investing activities	0.0	–0.3	0.0	0.9	0.5
Cash flow from investment activities	–1.6	204.3	–6.7	202.5	185.7
Free cash flow	–10.4	183.1	–53.5	151.8	129.6
Financing activities
Change in borrowing	0.0	–	0.0	89.3	–10.7
Dividend to shareholders	0.0	–	–8.2	–	–
Cash flow from financing activities	0.0	0.0	–8.2	89.3	–10.7
Changes in cash and cash equivalents	–10.4	183.1	–61,7	241.1	118.9
Cash and cash equivalents at the beginning of the period	140.8	133.4	195.4	74.9	74.9
Translation difference	–2.3	–0.1	–5.4	0.4	1.6
Cash and cash equivalents at the end of the period	128.2	316.4	128.2	316.4	195.4

Financial ratios for the Group

Amounts in SEK million	January	January	Full year
	September	September
	2017	2016	2016
Margins
Operating margin, %	–1.1	–0.5	3.2
Profit margin, %	–3.6	–3.6	–0.1
Return on investment
Return on capital employed, %	–1.0	0.2	7.3
Return on equity, %	–4.5	1.6	2.5
Capital structure
Capital employed	509.7	638.5	546.7
Equity	310.2	340.6	348.5
Net debt	71.2	–18.5	2.9
Net debt/equity ratio, %	23.1	–5.4	0.8
Equity/assets ratio, %	36.5	34.0	38.7
Employees
Average number of employees	668	699	687
Net sales per employee	1.6	1.0	1.1

Data per share	July September	July September	January September	January September	Full year
	2017	2016	2017	2016	2016
Number of shares at the end of the period	8,218,611	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	8,218,611
Earnings per share before and after dilution
Profit/loss from continuing operations	1.35	–0.16	–1.83	0.61	0.99
Profit/loss from operations held for sale	0.00	9.54	0.00	5.76	5.60
Profit/loss for the period	1.35	9.38	–1.83	6.36	6.58
Equity per share, SEK	37.76	41.44	37.76	41.44	42.41

Net sales per geographical area

Amounts in SEK million	July	July	January	January	Full year
	September	September	September	September
	2017	2016	2017	2016	2016
Sweden - from continuing operations	28.8	26.7	120.7	102.7	180.4
Europe, excluding Sweden - from continuing operations	111.4	107.7	326.6	314.9	424.9
North America	15.6	19.7	51.3	76.4	101.5
Asia	27.7	10.0	41.0	18.0	30.6
Other	–0.2	0.5	0.0	0.5	21.4
Total	183.3	164.6	539.5	512.5	758.8
Sweden - operations held for sale	0.0	1.0	0.0	18.3	18.3
Europe - excluding Sweden – from operations to sale	0.0	4.3	0.0	53.3	53.1
Total operations	183.3	169.9	539.5	584.1	830.2

Quarterly review

Amounts in SEK million	2015				2016				2017
Continuing operations	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Net sales	156.8	177.7	189.8	197.0	171.6	176.3	164.6	246.3	179.6	176.6	183.3
Operating expenses	–158.5	–176.9	–163.7	–185.7	–160.9	–177.5	–176.5	–219.3	–181.6	–196.0	–167.8
Operating profit	–1.7	0.8	26.1	11.3	10.7	–1.2	–11.9	27.0	–2.0	–19.4	15.5
Financial items, net	–1.8	–4.4	–4.0	–1.9	–5.1	–6.6	–4.5	–9.0	–5.1	–3.7	–4.6
Profit/loss after financial	–3.5	–3.6	22.1	9.4	5.6	–7.8	–16.4	18.0	–7.1	–23.1	10.9
items

8

Financial data per segment

Amounts in SEK million Total operations	Waste	Consultancy	Fuel and Materials	Studsvik
January-September 2017	Treatment*	Services	Technology	Scandpower	Other	Elimination	Group
External sales revenue	–	118.0	36.0	18.3	11.0	0.0	183.3
Revenue from segment	–	2.7	0.0	1.3	6.0	–10.0	0.0
Operating profit	–	26.2	–3.6	–2.7	–4.4	0.0	15.5
Items affecting comparability	–	0.1	0.0	0.0	0.0	0.0	0.1
Adjusted operating profit	–	26.3	–3.6	–2.7	–4.4	0.0	15.6
Assets	–	398.2	183.9	93.6	430.4	–254.9	851.2
Liabilities	–	331.5	151.6	20.6	291.1	–254.9	540.9
Investments	–	0.2	1.9	0.1	0.6	0.0	2.8
Depreciation/amortization	–	0.2	2.4	0.2	0.9	0.0	3.7
Average number of employees	–	492	100	34	38	0.0	664
	Waste	Consultancy	Fuel and Materials	Studsvik
January-September 2016	Treatment*	Services	Technology	Scandpower	Other	Elimination	Group
External sales revenue	–	100.5	32.8	16.7	14.6	0.0	164.6
Revenue from segment	–	3.8	3.8	3.1	1.9	–12.6	0.0
Operating profit	–	–5.6	0.6	–2.9	–4.0	0.0	–11.9
Items affecting comparability	–	3.7	0.0	0.0	0.0	0.0	3.7
Adjusted operating profit	–	–1.9	0.6	–2.9	–3.9	0.0	–8.1
Assets	–	415.0	129.8	105.3	622.5	–269.4	1,003.2
Liabilities	–	347.0	139.2	20.1	425.7	–269.4	662.6
Investments	–	0.8	1.8	0.0	0.2	0.0	2.8
Depreciation/amortization	–	0.8	1.9	0.1	1.4	0.0	4.2
Average number of employees	–	525	93	32	52	0	702
			Fuel and
	Waste	Consultancy	Materials	Studsvik
July-September 2017	Treatment*	Services	Technology	Scandpower	Other	Elimination	Group
External sales revenue	–	316.9	137.7	51.2	33.7	0.0	539.5
Revenue from segment	–	6.0	2.9	5.2	19.2	–33.3	0.0
Operating profit	–	16.2	7.1	–9.8	–19.4	0.0	–5.9
Items affecting comparability	–	2.6	0.3	0.0	3.3	0.0	6.2
Adjusted operating profit	–	18.8	7.4	–9.8	–16.1	0.0	0.3
Assets	–	398.2	183.9	93.6	430.4	–254.9	851.2
Liabilities	–	331.5	151.6	20.6	292.1	–254.9	540.9
Investments	–	1.7	10.9	0.2	2.4	0.0	15.2
Depreciation/amortization	–	1.3	7.2	0.6	2.9	0.0	12.0
Average number of employees	–	497	100	34	37	0	668
			Fuel and
	Waste	Consultancy	Materials	Studsvik
July-September 2016	Treatment*	Services	Technology	Scandpower	Other	Elimination	Group
External sales revenue	–	308.1	127.7	48.7	28.0	0.0	512,5
Revenue from segment	–	11.4	6.5	6.2	16.8	–40.9	0,0
Operating profit	–	6.1	19.5	–10.8	–17.2	0.0	–2,4
Items affecting comparability	–	7.4	0.0	0.0	1.3		8,7
Adjusted operating profit	–	13.5	19.5	–10.8	–15.8	0.0	6,4
Assets	–	415.0	129.8	105.3	622.5	–269.4	1 003,2
Liabilities	–	347.0	139.2	20.1	425.7	–269.4	662,6
Investments	–	2.1	6.8	0.0	0.9	0.0	9,8
Depreciation/amortization	–	2.1	5.4	0.5	4.9	0.0	12,9
Average number of employees		527	91	34	47	0	699
	Waste	Consultancy	Fuel and Materials	Studsvik
Full Year 2016	Treatment*	Services	Technology	Scandpower	Other	Elimination	Group
External sales revenue	–	435.1	193.7	86.2	43.8	0.0	758.8
Revenue from segment	–	13.3	2.6	10.1	28.1	–54.1	0.0
Operating profit	–	14.0	29.7	2.8	–21.9	0.0	24.7
Items affecting comparability	–	13.4	0.8	0.0	2.9	–	17.0
Adjusted operating profit	–	27.4	30.5	2.8	–19.0	–	41.7
Assets	–	425.1	167.8	110.1	487.4	–289.4	901.0
Liabilities	–	353.1	142.8	28.3	317.7	–289.4	552.6
Investments
	–	2.4	11.7	0.1	1.1	0.0	15.3
Depreciation/amortization	–	2.9	7.5	0.8	6.4	0.0	17.6
Average number of employees	–	523	93	34	37	0	687
*Operations held for sale. For more information, please see Note 2.

Parent company income statement	July September	July September	January September	January September	Full year
Amounts in SEK million	2017	2016	2017	20156	2016
Net sales	4.6	3.8	14.7	12.7	22.5
Cost of services sold	0.0	–0.8	–0.9	–2.2	–2.8
Gross profit	4.6	3.0	13.8	10.5	19.7
Other operating income and costs	–7.7	–7.5	–27.0	–26.0	–36.0
Operating profit	–3.1	–4.5	–13.2	–15.5	–16.3
Result from participations in Group companies	0.0	0.0	0.0	0.0	14.3
Net financial items	–6.6	–1.6	–16.1	–5.8	–6.2
Profit/loss before tax	–9.7	–6.1	–29.4	–21.3	–8.2
Income tax	2.0	1.5	6.3	4.8	4.1
NET PROFIT/LOSS FOR THE PERIOD	–7.7	–4.6	–23.0	–16.5	–4.1

Parent company balance sheet

Amounts in SEK million	September	September	Decemberr
	2017	2016	2016
ASSETS
Intangible assets	2.0	2.7	2.6
Property, plant and equipment	0.0	-	0.0
Financial non-current assets	635.6	626.4	652.9
Total non-current assets	637.6	629.1	655.5
Current assets	21.7	12.2	24.1
Cash and cash equivalents	8.2	97.7	43.9
Total current assets	29.9	109.9	68.0
TOTAL ASSETS	667.5	739.0	723.5
EQUITY AND LIABILITIES
Equity	255.5	274.4	286.8
Provisions	–	–	–
Non-current liabilities	241.9	366.4	267.0
Current liabilities	170.1	98.2	169.7
Total liabilities	412.0	464.6	436.7
TOTAL EQUITY AND LIABILITIES	667.5	739.0	723.5
Pledged assets	223.4	223.4	223.4
Contingent liabilities	3.5	4.6	5.3

	July	July	January	January
Note 1 Adjustment of translation difference and net financial income	September 2017	September 2016	September 2017	September 2016	Full year 2016
	–5.7	3.4	–13.7	3.4	8.5
Fair value gain/loss befor adjustment (realized and unrealized) Adjustment	5.2	–2.0	11.6	–3.3	–8.9
Fair value gain/loss after adjustments (realized and	–0.5	1.4	–2.1	0.1	–0.4
unrealized)
Translation difference before adjustment	–4.7	–6.1	–6.5	–14.6	–13.5
Adjustment	–5.2	2.0	–11.6	3.3	8.9
Translation difference after adjustment	–9.9	–4.1	–18.2	–11.3	–4.6
Note 2 Operations held for sale Assets and liabilities referring to the Waste Treatment business area have been accounted for as held for sale.
Amounts in SEK million
Cash flow from operating activities	–	–36.1	–	–46.0	–47.3
Cash flow from investing activities	–	0.0	–	–3.0	–3.0
Cash flow from financing activities	–	–0.5	–	–1.6	–1.6
Total cash flow	–	–36.6	–	–50.6	–51.9
Assets in operations held for sale
Property, plant and equipment	–	–	–	0.0	–
Intangible assets	–	–	–	0.0	–
Financial assets	–	–	–	0.0	–
Current assets	–	–	–	0.0	–
Total assets	–	0.0	–	0.0	–
Liabilities in operations held for sale
Trade and other payables	–	–	–	0.0	–
Non-current liabilities	–	–	–	0.0	–
Provisions	–	–	–	0.0	–
Total liabilities	–	0.0	–	0.0	–
Analysis of profit/loss from operations held for sale
Income	–	5.3	–	71.6	71.6
Costs	–	–35.4	–	–132.7	–134.0
Profit/loss from operations held for sale – before tax	–	–30.0	–	–61.1	–62.4
Profit from operations held for sale	–	107.1	–	107.1	107.1
Income tax	–	1.3	–	1.3	1.3
Profit/loss from operations held for sale – after tax	–	78.4	–	47.3	46.0

Note 3 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 tables below refer to total operations.

The Group's assets and liabilities measured at fair value as at September 30, 2017 (MSEK)	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profit or loss		16.5
Derivatives used for hedging		3.7
Liabilities
Derivatives used for hedging		3.6
The Group's assets and liabilities measured at fair value as at December 31, 2016 (MSEK)	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profit or loss		17.7	12.3
Derivatives used for hedging		2.2
Liabilities
Derivatives used for hedging		5.9
Fair value of the Group's borrowings (MSEK)	September 30, 2017		December 31, 2016
Non-current loans	199.5		198.2
Current loans	0		0.0
Total loans	199.5		198.2

Reconciliations of key ratio

Return on capital employed Amounts in SEK million	September 2017	September 2016	Full year 2016
Profit/loss after financial items	–19.3	–15.3	8.3
Financial costs according to the income statement	11.3	16.3	25.0
Fair value - foreign exchange losses	2.7	0.0	0.5
Total	–5.3	1.0	33.8
Balance sheet total	901.0	711.6	686.6
Provisions and other long-term liabilities	–161.7	–84.0	–80.6
Trade and other payables	–192.6	–221.9	–224.3
Opening capital employed	546.7	405.7	381.7
Balance sheet total	851.2	1,003.2	901.0
Provisions and other long-term liabilities	–159.3	–161.0	–161.7
Trade and other payables	–182.2	–203.7	–192.6
Closing capital employed	509.7	638.5	546.7
Average capital employed	528.2	522.1	464.2
Return on capital employed	–1.0	0.2	7.3

Return on equity	September	September	Fyll year
Amounts in SEK million	2017	2016	2016
Net profit/loss for the year	–15.0	5.0	8.1
Total	–15.0	5.0	8.1
Opening equity	348.5	298.3	298.3
Closing equity	310.2	268.0	348.5
Return on equity	–4.5	1.6	2.5

Net debt	September	September	Full year
Amounts in SEK million	2017	2016	2016
Current borrowing	0.0	0.0	0.0
Non-current borrowing	199.5	297.9	198.2
Total liabilities	199.5	297.9	198.2
Cash and cash equivalents	128.2	316.4	195.4
Net debt	71.2	–18.5	2.9

Definitions of key figures and ratios

Some key figures and ratios used by company management and analysts to assess the Group's development have not been prepared in accordance with IFRS (International Financial Reporting Standards). The company management considers that these key figures and ratios make it easier for investors to analyze the Group's development.

Equity

The total of non-restricted and restricted equity at the end of the year. Average equity capital has been calculated as opening balance plus closing balance of equity capital, divided by two.

Equity per share

Equity divided by the number of shares at the end of the period.

Free cash flow

Cash flow from operating activities (after change in operating profit) minus cash flow from investing activities.

Sales revenue per employee

Sales revenue divided by average number of employees. For quarterly reports net sales are estimated on a full year basis.

Investments

Total of the acquisition of business/subsidairies and acquisition of intangible assest and property, plant and equipment.

Average number of employees

Average number of employees at the end of each month.

Net debt

Total long-term and short-term borrowing less cash and cash equivalents.

Net debt-equity ratio

Interest-bearing net debt divided by equity including non-controlling interests.

Earnings per share

Profit for the year divided by the average number of shares. The average number of shares has been calculated as a weighted average of all shares in issue for the year.

Return on equity

Profit for the year as a percentage of average equity.

Return on capital employed

Profit/loss after financial items with financial expenses, fair value losses and foreign exchange losses added back, as a percentage of average capital employed. For the comparison year, capital employed has been adjusted by estimated values for operations held for sale, and only calculated on the closing balance.

Interest coverage ratio

Profit after financial income divided by the financial expenses.

Operating margin

Operating result after amortization as a percentage of net sales.

Equity/assets ratio

Equity including non-controlling interests as a percentage of the balance sheet total.

Capital employed

Balance sheet total less non-interest-bearing liabilities. Average capital employed has been calculated as opening balance plus closing balance of capital employed, divided by two.

Profit margin

Profit before tax as a percentage of net sales.

Major shareholders, September 30, 2017
	Number of shares	Share, %
The Karinen Family	1,769,552	21.5
Briban Invest AB	1,285,492	15.6
Peter Gyllenhammar AB	794,543	9.7
Credit Agricole Suisse SA	363,879	4.4
Avanza Pensionsförsäkring AB	340,849	4.2
Malte Edenius	250,000	3.0
Invus Investment AB	191,594	2.3
Leif Lundin	190,400	2.3
Nordnet Pensionsförsäkring AB	183,057	2.2
Unionen	152,709	1.9
Total ten largest shareholders - holdings	5,523,075	67.2
Other shareholders	2,695,536	32.8
Total	8,218,611	100.0

The Studsvik share

Facts about Studsvik

Studsvik offers a range of advanced technical services to the global nuclear power industry. Studsvik's business focus areas are fuel and materials technology, reactor analysis software and consultancy services within waste treatment technology, decommissioning, NORM and solutions for final disposal. The company has 70 years nuclear technology and radiological service experience. Studsvik has 700 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 studsvik@studsvik.com www.studsvik.com