Studsvik — Interim / Quarterly Report 2017

Feb 15, 2018

Year-end Report 2017

• Sales in the quarter were SEK 165.4 (246.3) million. In local currencies sales decreased by 33 per cent.
• Operating profit for the quarter amounted to SEK –35.7 (27.0) million. Items affecting comparability reduced earnings for the quarter by SEK 14.9 (8.3) million.
• Free cash flow for the quarter was SEK –30.6 (–22.2) million.

	October December	October December	Full year	Full year
	2017	2016	2017	2016
Sales, SEK million	165.4	246.3	704.8	758.8
Operating profit, SEK million	–35.7	27.0	–41.6	24.7
Profit after tax, SEK million	–30.0	1.9	–45.0	8.1
Free cash flow, SEK million*	–30.6	–22.2	–84.2	129.6
Net debt, SEK million	101.2	2.9	101.2	2.9
Net debt/equity ratio, %	35.1	0.8	35.1	0.8
Profit per share after tax, SEK	–3.65	1.06	–5.47	0.99
Equity per share, SEK*	35.09	42.41	35.09	42.41

*Refers to total operations 2016

Sales

Sales decreased to SEK 165.4 (246.3) million for the quarter and to SEK 704.8 (758.8) million for the year. In local currencies this was a decrease of 33 and 8 per cent respectively. The decrease is mainly attributable to Consultancy Services, which had weak capacity utilization, mainly in Germany, while license revenues were SEK 29.3 million lower than in the previous year.

Profit

Operating profit decreased during the quarter to SEK –35.7 (27.0) million and during the year to SEK –41.6 (24.7) million. Items affecting comparability referring to staff cutbacks in the Executive Group Management and the business areas' administration reduced earnings for the quarter by SEK 14.9 (8.3) million and for the year by SEK 21.1 (17.0) million. Adjusted for items affecting comparability, the operating margin for the quarter decreased to –13 (14) per cent and –3 (5) per cent for the year.

The deterioration for the quarter is due to a stoppage in Fuel and Materials Technology that impacted earnings by SEK 12 million, lower license revenues in Consultancy Services (SEK 29 million) and lower software sales in Studsvik Scandpower (SEK 10 million). Loss after financial items was SEK –3.7 (–8.9) million for the quarter and SEK –17.1 (–25.3) million for the year. Profit after tax was SEK –30.0 (1.9) million for the quarter and SEK –45.0 (8.1) million for the year.

Fuel and Materials Technology

Sales decreased to SEK 54.4 (65.9) million for the quarter and to SEK 195.0 (196.3) million for the year. In local currencies this was a decrease of 12 and 1 per cent respectively.

Operating profit for the quarter decreased to SEK –1.7 (10.2) million and SEK 5.3 (29.7) million for the year. Items affecting comparability referring to staff cutbacks in administration reduced earnings for the quarter by SEK 1.1 (0.8) million and for the year by SEK 1.4 (0.8) million. Adjusted for items affecting comparability, the operating margin for the quarter decreased to –1 (17) per cent and 3 (16) per cent for the year. A stoppage in part of the facility had a negative impact on the quarter, resulting in decreased income and reduced earnings of about SEK 12 million. No orders were lost and production has been operating normally since November. Demand for the services delivered by the business area is high and the order situation for 2018 is strong.

Consultancy Services

Sales decreased to SEK 84.4 (128.9) million for the quarter and to SEK 407.3 (448.4) million for the year. In local currencies this was a decrease of 34 and 10 per cent respectively. Sales are negatively impacted by low capacity utilization in Germany and Sweden, as well as the discontinuation of low-margin services, mainly in England. Revenue from licenses for the fourth quarter was SEK 0 (23) million and SEK 21.3 (47.9) million for the full year.

Operating profit for the quarter decreased to SEK –13.3 (7.9) million and SEK 2.9 (14.0) million for the year. Items affecting comparability referring to staff cutbacks in administration reduced earnings for the quarter by SEK 1.4 (6.0) million and for the year by SEK 4.0 (13.4) million. Adjusted for items affecting comparability, the operating margin for the quarter decreased to –14 (11) per cent and 2 (6) per cent for the year. The deterioration in earnings for the quarter is due to weak capacity utilization and high license revenues in the fourth quarter of 2016. The loss in the underlying operations adjusted for license revenues and items affecting comparability has decreased to SEK –14.4 (–20.5).

The work of improving profitability and evaluating alternative strategies for the German operations is continuing. Demand for FBSR technology, particularly in Asia, is strong with good business opportunities in China through the partnership established with Dynatech and in Japan through Studsvik's joint venture with Kobe Steel.

Studsvik Scandpower

Sales decreased to SEK 24.6 (42.4) million for the quarter and to SEK 81.0 (96.4) million for the year. In local currencies this was a decrease of 44 and 16 per cent respectively.

Operating profit for the quarter decreased to SEK –2.0 (13.6) million and SEK –11.8 (2.8) million for the year. Items affecting comparability related to a labor law dispute in the USA reduced earnings for the quarter and the year by SEK 3.2 (0) million. Adjusted for items affecting comparability, the operating margin for the quarter decreased to 5 (32) per cent and –11 (3) per cent for the year.

During the year Studsvik Scandpower has conducted far-reaching negotiations on selling software and services but the decision-making processes tend to be increasingly protracted in the domestic markets in the USA and Western Europe. In 2017 work continued to obtain licenses from the American authorities to export ordered software to China. It is still unclear when licenses may be granted.

Investments

Investments in the quarter amounted to SEK 6.9 (5.5) million and during the year to SEK 22.1 (15.3) million. The investments mainly refer to equipment for testing and maintenance of the Studsvik facility.

Cash flow

Cash flow from operating activities in the quarter was SEK –26.2 (–5.4) million and SEK –73.1 (–56.1) million for the full year. The free cash flow excluding cash flow effect of sale of subsidiaries was SEK –30.6 (–22.2) million for the quarter and SEK –84.2 (–76.5) million for the full year. The negative cash flow reflects the Group's weak performance and a negative development of working capital in the German operations.

Financial position and liquidity

Cash and cash equivalents amounted to SEK 98.7 (195.4) million. Net interest-bearing debt was SEK 101.2 (2.9) million, which means that the net debt/equity ratio was 35.1 (0.8) per cent.

Personnel

The average number of employees as at December 31 was 662 (687). The decrease refers to fewer employees in the consulting operations and administration.

Transactions with related parties

During the quarter a dividend of SEK 2.5 (1.3) million was received from UK Nuclear Waste Management Ltd.

Parent company

Operations in the parent company consist of coordination of the Group. The sales were SEK 5.0 (9.7) million for the quarter and SEK 19.7 (22.5) million for the full year. Operating profit for the quarter amounted to SEK –16.0 (–0.9) million and SEK –29.2 (–16.3) million for the year. Loss after financial items in the second quarter was SEK –12,8 (13.0) million and for the year SEK –42,1 (–8.2) million. The year's net financial income includes revaluation of intra-group loans of SEK –7.0 (8.9) million. Cash and cash equivalents including current investments amounted to SEK 24.9 (43.9) million and interest-bearing liabilities to SEK 200 (200) million.

Dividend

The Board of Directors proposes that no dividend be distributed for 2017.

Events after the close of the reporting period

Studsvik Scandpower received in February an order of appr. SEK 25 million for sofware and services.

Annual General Meeting and Annual Report

The Annual General Meeting will be held on Wednesday, April 25, 2018 at 16:00 at the World Trade Center, Klarabergsviadukten 70/Kungsbron 1. The annual report will be available on the company's website from week 12 (March 19-25).

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 currencies is recognized as a translation difference on foreign subsidiaries under other comprehensive income. The 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 6-16 forms an integral part of this financial report.

New standards

As of January 1, 2018 IFRS 9 Financial instruments and IFRS 15 Revenue from contracts with customers come into force. The Group has carried out an analysis to evaluate the effects of implementation of the new standards.

IFRS 9

IFRS 9 deals with classification, measurement and accounting for financial assets and liabilities and introduces new rules for hedge accounting. The standard replaces the parts of IAS 39 that deal with classification and measurement of financial instruments and introduces a new impairment model. The Group has not identified any material impact on classification, measurement or recognition of the Group's financial assets and liabilities. The rules for derecognition from the balance sheet have been transferred from IAS 39 Financial instruments: Recognition and measurement have not been changed.

The new hedge accounting rules in IFRS 9 are more consistent with the company's risk management in practice. It will be easier in general to apply hedge accounting since the standard introduces a more principles-based approach for hedge accounting. The Group's current hedging situation will continue to qualify for hedge accounting and the accounting treatment will be the same as before under IFRS 9.

The new model for calculating credit loss reserves is based on expected credit losses, instead of incurred credit losses under IAS 39, which could entail earlier recognition of credit losses. The model is to be applied to financial assets recognized at amortized cost, debt instruments measured at fair value through other comprehensive income, contract assets under IFRS 15 Revenue from contracts with customers, lease receivables, loans and some financial guarantees.

Analysis carried out shows that the Group's reserves for credit losses will not be materially impacted by the new rules. The extended disclosure requirements that follow from the new standard will mean changes in future financial statements. IFRS 9 is to be applied retroactively with some practical exceptions presented in the standard. The Group will not restate previous periods.

IFRS 15

IFRS 15 is the new standard for revenue recognition. IFRS 15 replaces IAS 18 Revenue and IAS 11 Construction contracts. IFRS 15 is based on the principle that revenue is recognized when the customer obtains control over a good or service, a principle that replaces the earlier principle that revenue is recognized when risks and rewards have been transferred to the buyer.

Implementation of IFRS 15 will have an impact in principle. This applies to Studsvik's recognition of license revenues. Under IFRS 15 one form of license that Studsvik sells is deemed to be a "right to use" license

where control of the license is obtained by the customer directly at the time of its sale and delivery. Previously some licenses have been recognized in revenue over the period of the contract.

The difference between IFRS 15 application and earlier principles means that Studsvik will recognize the revenue earlier. For other customer contracts analyzed, no material differences in revenue recognition have emerged. A company can choose between a "full retroactive" application or prospective application with further disclosures in future periods to provide compara bility for users of the financial statements.

Studsvik will present the transition to IFRS 15 prospec tively from January 1, 2018. This means that accumu lated positive revenue effects of ongoing license agree ments of SEK 1.5 million will be recognized in equity (retained earnings) on January 1, 2018. The income statement for 2017 will not be restated, which means that comparative figures in the income statement for 2017 will be reported unchanged in future financial statements.

Stockholm, February 15, 2018 Camilla Hoflund President

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

Time Schedule for Financial Information

Interim Report January-March 2018	April 25, 2018
Interim Report January–June 2018	July 20, 2018
Interim Report January–September 2018	October 22, 2018
Year-end Report 2018	February, 2019

For further information, please contact

Pål Jarness, Chief Financial Officer, +46 155 22 10 09 or Camilla Hoflund President and Chief Executive Officer, +46 155 22 10 66.

The Year-end report will be presented at a telephone con ference to be held in English on February 15, at 2.30 pm 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	October December 2017	October December 2016	Full year 2017	Full year 2016
Net sales	165.4	246.3	704.8	758.8
Cost of services sold2)	–135.0	–155.3	–539.1	–535.3
Gross profit	30.4	91.0	165.7	223.5
Selling and marketing expenses	–10.7	–12.4	–44.2	–44.4
Administrative expenses	–32.1	–30.0	–116.9	–112.8
Research and development costs	–7.1	–7.7	–28.2	–27.5
Share in earnings from associated companies	2.1	–3.0	8.7	4.1
Other operating income	0.9	0.3	2.8	8.2
Other operating expenses	–19.2	–11.2	–29.5	–26.4
Operating profit	–35.7	27.0	–41.6	24.7
Financial income	1.0	0.1	1.0	0.1
Financial expenses	–4.0	–8.6	–15.3	–25.0
Fair value gain/loss (realized and unrealized)1)	–0.7	–0.4	–2.8	–0.4
Profit/loss before tax	–39.4	18.1	–58.7	–0.6
Income tax	9.4	–14.9	13.7	8.7
Profit/loss for the period from continuing operations	–30.0	3.2	–45.0	8.1
Operations held for sale Note 2
Profit/loss for the period from operations held for sale	–	–1.3	0.0	46.0
NET PROFIT/LOSS FOR THE PERIOD	–30.0	1.9	–45.0	54.1
Other comprehensive income
Items that may later be reversed in the income statement
Translation differences on foreign subsidiaries1)	8.3	6.6	–9.9	–4.6
Cash flow hedging	0.1	–0.9	4.1	0.8
Income tax on items recognized in other comprehensive income	0.0	0.2	–0.9	–0.2
Other comprehensive income for the period, net after tax	8.4	5.9	–6.7	–4.0
Total profit/loss and other comprehensive income for the	–21.6	7.8	–51.7	50.1
period Income for the period attributable to
Parent company's shareholders	–30.0	1.2	–45.0	54.1
Non-controlling interests	0.0	0.0	0.0	0.0
Total comprehensive income attributable to
Parent company's shareholders Non-controlling interests	–21,6 0.0	7.9 –0.1	–51.6 –0.1	50.0 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	–3.65	0.38	–5.47	0.99
Profit/loss from operations for sale	0,0	0.23	0.0	5.60
NET PROFIT/LOSS FOR THE PERIOD	–3.65	0.22	–5.47	6.59

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.

Equity

Group statement of financial position

Amounts in SEK million	December 2017	December 2016
ASSETS
Intangible assets	177.4	178.0
Property, plant and equipment	116.6	113.3
Other non-current assets	162.6	155.8
Total non-current assets	456.6	447.1
Inventories	0.6	2.0
Trade receivables	158.9	150.8
Other current receivables	110.1	105.7
Cash and cash equivalents	98.7	195.4
Total current assets	368.3	453.9
Assets in disposal group held for sale Note 2	0.0	0.0
TOTAL ASSETS	824.9	901.0
EQUITY AND LIABILITIES
Equity attributable to parent company's shareholders	288.1	348.1
Non-controlling interests	0.3	0.4
Total equity	288.4	348.5
Borrowing	199.9	198.2
Provisions and other non-current liabilities	164.8	161.7
Total non-current liabilities	364.7	359.9
Trade and other payables	171.8	192.6
Borrowing	0.0	0.0
Total current liabilities	171.8	192.6
Liabilities in disposal group held for sale Note 2	0.0	0.0
TOTAL EQUITY AND LIABILITIES	824.9	901.0
Pledged assets	238.4	238.4
Contingent liabilities	65.7	71.7

Changes in equity

Amounts in SEK million

					attributable
		Other			to the parent	Non
	Share	contributed		Retained	company's	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 September 30, 2017	8.2	225.3	–3.6	80.0	309.9	0.3	310.2
Changes October 1 - December 31, 2017
Comprehensive income for the period	0.0	0.0	8.4	–30.1	–21.9	0.0	–21.9
Equity at December 31, 2017	8.2	225.3	4.8	49.9	288.2	0.3	288.5

Group statement of cash flow

		Amounts in SEK million

Amounts in SEK million	October	October	Full year	Full year
	December	December
Total operations	2017	2016	2017	2016
Cash flow from operating activities
Operating profit	–35.7	25.7	–41.6	70.0
Adjustment for non-cash items	11.0	11.1	16.1	–43.7
Financial items, net	0.9	–9.0	–9.0	–25.4
Income tax paid	3.9	1.9	–6.5	–8.3
Cash flow from operating activities before change in	–19.9	29.6	–41.0	–7.4
working capital
Change in working capital	–6.3	–35.1	–32.1	–48.8
Cash flow from operating activities	–26.2	–5.4	–73.1	–56.1
Investing activities
Acquisition of property, plant and equipment	–6.9	–5.6	–22.1	–18.5
Acquisition in associated companies	–	–12.1	–	–12.1
Divestment of subsidiaries	–	–	–	206.1
Dividend from associated companies	2.5	1.3	11.0	9.7
Other cash flow from investing activities	–	–0.4	–	0.5
Cash flow from investment activities	–4.4	–16.8	–11.1	185.7
Free cash flow	–30.6	–22.2	–84.2	129.6
Financing activities
Change in borrowing	0.0	–100.0	0.0	–10.7
Dividend to shareholders	0.0	–	–8.2	–
Cash flow from financing activities	0.0	–100.0	–8.2	–10.7
Changes in cash and cash equivalents	–30.6	–122.2	–92.4	118.9
Cash and cash equivalents at the beginning of the period	128.2	316.4	195.4	74.9
Translation difference	1.1	1.2	–4.3	1.6
Cash and cash equivalents at the end of the period	98.7	195.4	98.7	195.4

Financial ratios for the Group

Amounts in SEK million	Full year	Full year
	2017	2016
Margins
Operating margin, %	–5.9	3.2
Profit margin, %	–8.3	–0.1
Return on investment
Return on capital employed, %	–7.8	7.3
Return on equity, %	–14.1	2.5
Capital structure
Capital employed	488.3	546.7
Equity	288.4	348.5
Net debt	101.2	2.9
Net debt/equity ratio, %	35.1	0.8
Equity/assets ratio, %	35.0	38.7
Employees
Average number of employees	662	687
Net sales per employee	1.1	1.1

Data per share	October December	October December	Full year	Full year
	2017	2016	2017	2016
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	–3.65	1.06	–5.47	0.99
Profit/loss from operations held for sale	0.0	–0.16	0.0	5.60
Profit/loss for the period	–3.65	0.90	–5.47	6.58
Equity per share, SEK	35.09	42.41	35.09	42.41

Net sales per geographical area

Amounts in SEK million	October	October	Full year	Full year
	December	December
	2017	2016	2017	2016
Sweden - from continuing operations	36.4	77.6	157.1	180.4
Europe, excluding Sweden - from continuing operations	98.0	110.0	424.4	424.9
North America	21.4	25.1	72.7	101.5
Asia	9.6	12.6	50.6	30.6
Other	0.0	20.9	0.0	21.4
Total	165.4	246.3	704.8	758.8
Sweden - operations held for sale	–	–	–	18.3
Europe - excluding Sweden – from operations to sale	–	–	–	53.1
Total operations	165.4	246.3	704.8	830.2

Quarterly review

Amounts in SEK million	2015				2016				2017
Continuing operations	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Net sales	156.8	177.7	189.8	197.0	171.6	176.3	164.6	246.3	179.6	176.6	183.3	165.4
Operating expenses	–158.5	–176.9	–163.7	–185.7	–160.9	–177.5	–176.5	–219.3	–181.6	–196.0	–167.8	–201.1
Operating profit	–1.7	0.8	26.1	11.3	10.7	–1.2	–11.9	27.0	–2.0	–19.4	15.5	–35.7
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	–3.7
Profit/loss after financial items	–3.5	–3.6	22.1	9.4	5.6	–7.8	–16.4	18.0	–7.1	–23.1	10.9	–39.4

Financial data per segment

Amounts in SEK million Total operations	Consultancy	Fuel and Materials	Studsvik
October-December 2017	Services	Technology	Scandpower	Other	Elimination	Group
External sales revenue	78.6	54.4	22.3	10.0	0.0	165.4
Revenue from segment	5.8	0.0	2.3	6.4	–14.5	0.0
Operating profit	–13.3	–1.7	–2.0	–18.7	0.0	–35.7
Items affecting comparability	1.4	1.1	3.2	9.2	0.0	14.9
Adjusted operating profit	–11.9	–0.6	1.2	–9.5	0.0	–20.8
Assets	374.8	182.7	95.0	419.5	–247.1	824.9
Liabilities	311.2	151.0	22.5	298.8	–247.1	536.4
Investments	2.3	2.9	0.5	1.1	0.0	6.9
Depreciation/amortization	0.9	2.7	0.2	0.9	0.0	4.6
Average number of employees	497	101	34	35	–	667
	Consultancy	Fuel and Materials	Studsvik
October-December 2016	Services	Technology	Scandpower	Other	Elimination	Group
External sales revenue	127.0	66.0	37.5	15.8	0.0	246.3
Revenue from segment	1.9	–0.1	4.9	11.4	–13.4	0.0
Operating profit	7.9	10.2	13.6	–4.8	0.0	27.0
Items affecting comparability	6.0	0.8	–	1.5	0.0	8.3
Adjusted operating profit	13.9	11.0	13.6	–3.2	0.0	35.3
Assets	425.1	167.8	110.1	487.4	–289.4	901.0
Liabilities	353.1	142.8	28.3	317.7	–289.4	552.5
Investments	0.3	4.9	0.1	0.2	0.0	5.5
Depreciation/amortization	0.8	2.1	0.3	1.5	0.0	4.7
Average number of employees	525	93	32	45	–	695
		Fuel and
	Consultancy	Materials	Studsvik
Full year 2017	Services	Technology	Scandpower	Other	Elimination	Group
External sales revenue	395.5	192.1	73.5	43.7	0.0	704.8
Revenue from segment	11.8	2.9	7.5	25.6	–47.8	0.0
Operating profit	2.9	5.3	–11.8	–38.0	0.0	–41.6
Items affecting comparability	4.0	1.4	3.2	12.5	0.0	21.1
Adjusted operating profit	6.9	6.7	–8.6	–25.5	0.0	–20.5
Assets	374.8	182.7	95.0	419.5	–247.1	824.9
Liabilities	311.2	151.0	22.5	298.8	–247.1	536.4
Investments	4.0	13.8	0.7	3.5	0.0	22.1
Depreciation/amortization	2.2	9.9	0.8	3.8	0.0	16.6
Average number of employees	492	101	34	35	–	662
		Fuel and
Full Year 2016	Consultancy Services	Materials Technology	Studsvik 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	10.2	28.2	–54.3	0.0
Operating profit	14.0	29.7	2.8	–21.9	0.0	24.7
Items affecting comparability	13.4	0.8	–	2.9	0.0	17.0
Adjusted operating profit	27.4	30.5	2.8	–19.0	0.0	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

Parent company income statement	October December	October December	Full year	Full year
Amounts in SEK million	2017	2016	2017	2016
Net sales	5.0	9.7	19.7	22.5
Cost of services sold	0.0	–0.6	–0.9	–2.8
Gross profit	5.0	9.1	18.8	19.7
Other operating income and costs	–20.8	–10.0	–47.8	–36.0
Operating profit	–15.8	–0.9	–29.0	–16.3
Result from participations in Group companies	0.0	14.3	0.0	14.3
Net financial items	3.0	–0.4	–13.1	–6.2
Profit/loss before tax	–12.8	13.0	–42.1	–8.2
Income tax	3.0	–0.8	9.3	4.1
NET PROFIT/LOSS FOR THE PERIOD	–9.8	12.2	–32.8	–4.1

Parent company balance sheet

Amounts in SEK million	December	Decemberr
	2017	2016
ASSETS
Intangible assets	1.9	2.6
Property, plant and equipment	0.0	0.0
Financial non-current assets	643.8	652.9
Total non-current assets	645.7	655.5
Current assets	8.2	24.1
Cash and cash equivalents	24.9	43.9
Total current assets	33.1	68.0
TOTAL ASSETS	678.8	723.5
EQUITY AND LIABILITIES
Equity	245.7	286.8
Provisions	–	–
Non-current liabilities	243.4	267.0
Current liabilities	189.7	169.7
Total liabilities	433.1	436.7
TOTAL EQUITY AND LIABILITIES	678.8	723.5
Pledged assets	223.4	223.4
Contingent liabilities	3.6	5.3

Note 1 Adjustment of translation difference and net financial income	October December 2017	October December 2016	Full year 2017	Full year 2016
Fair value gain/loss befor adjustment (realized and unrealized)	–0.7	5.1	–2.8	8.5
Adjustment	–	–5.5	–	–8.9
Fair value gain/loss after adjustments (realized and unrealized)	–0.7	–0.4	–2.8	–0.4
Translation difference before adjustment Adjustment	8.3 –	1.1 5.5	–9.9 –	–13.5 8.9
Translation difference after adjustment	8.3	6.6	–9.9	–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	–	–1.3	–	–47.3
Cash flow from investing activities	–	–	–	–3.0
Cash flow from financing activities	–	–	–	–1.6
Total cash flow	–	–1.3	–	–51.9
Assets in operations held for sale
Property, plant and equipment	–	–	–	–
Intangible assets	–	–	–	–
Financial assets	–	–	–	–
Current assets	–	–	–	–
Total assets	–	–	–	0
Liabilities in operations held for sale
Trade and other payables	–	–	–	–
Non-current liabilities	–	–	–	–
Provisions	–	–	–	–
Total liabilities	–	–	–	0
Analysis of profit/loss from operations held for sale
Income	–	0.0	–	71.6
Costs	–	–1.3	–	–134.0
Profit/loss from operations held for sale – before tax	–	–1.3	–	–62.4
Profit from operations held for sale	–	0.0	–	107.1
Income tax	–	0.0	–	1.3
Profit/loss from operations held for sale – after tax	–	–1.3	–	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 December 31, 2017 (MSEK)	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profit or loss		17.9	13.0
Derivatives used for hedging		2.7
Liabilities
Derivatives used for hedging		2.9
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)	December 31, 2017		December 31, 2016
Non-current loans	199.9		198.2
Current loans	–		0.0
Total loans	199.9		198.2

Reconciliations of key ratio

2016
–0.6
25.0
0.5
24.9
686.6
–80.6
–224.3
381.7
901.0
–161.7
–192.6
546.7
464.2
7.3

Return on equity	Full year	Fyll year
Amounts in SEK million	2017	2016
Net profit/loss for the year	–45.0	54.1
Total	–45.0	54.1
Opening equity	348.5	298.3
Closing equity	288.4	348.5
Return on equity	–14.1	2.5

Net debt	Full year	Full year
Amounts in SEK million	2017	2016
Current borrowing	–	0.0
Non-current borrowing	199.9	198.2
Total liabilities	199.9	198.2
Cash and cash equivalents	98.7	195.4
Net debt	101.2	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, December 31, 2017
	Number of shares	Share, %
The Karinen Family	1,769,552	21.5
Briban Invest AB	1,285,492	15.6
Peter Gyllenhammar AB	812,863	9.9
Credit Agricole Suisse SA	363,879	4.4
Avanza Pensionsförsäkring AB	329,075	4.0
Malte Edenius	250,000	3.0
Nordnet Pensionsförsäkring AB	234,152	2.9
Leif Lundin	192,500	2.3
Invus Investment AB	191,594	2.3
Unionen	152,709	1.9
Total ten largest shareholders - holdings	5,581,816	67.8
Other shareholders	2,636,795	32.2
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