Studsvik — Interim / Quarterly Report 2018

Feb 14, 2019

Year-end Report 2018

• Sales in the quarter were SEK 187.6 (165.4) million, which in local currencies meant an increase of 13.4 per cent.
• Operating profit for the quarter amounted to SEK –0.3 (−35.7) million. Items affecting comparability of SEK 3.6 (14.9) million are included.
• The free cash flow during the quarter was SEK 29.4 (–30.6) million.

	October December	October December	Full year	Full year
	2018	2017	2018	2017
Sales, SEK million	187.6	165.4	726.1	704.8
Operating profit, SEK million	−0.3	−35.7	33.5	–41.6
Profit after tax, SEK million	−6.4	−30.0	8.7	–45.0
Free cash flow, SEK million	29.4	−30.6	54.2	–84.2
Net debt, SEK million	44.4	101.2	44.4	101.2
Net debt/equity ratio, %	14.0	35.1	14.0	35.1
Profit per share after tax, SEK	−0.78	−3.65	1.06	–5.47
Equity per share, SEK	38.47	35.09	38.47	35.09

Sales

Sales increased to SEK 187.6 (165.4) million for the quarter and to SEK 726.1 (704.8) million for the year. In local currencies the increase was 13 per cent for the quarter but unchanged for the year.

Profit

Operating profit for the quarter improved to SEK –0.3 (–35.7) million and for the year to SEK 33.6 (–41.6) million. Items affecting comparability in the quarter amounted to SEK –3.6 (–14.9) million. For the year, items affecting comparability including a profit of SEK 13.6 million from the sale of Horsviks Gård, amount to SEK +4.7 (21.1) million. Adjusted for items affecting comparability, the operating margin for the quarter improved to 2 (–13) per cent and for the year to 4 (–3) per cent.

Net financial income in the quarter was SEK –3.4 (–3.7) million and for the full year SEK –14.9 (–17.1) million. Profit after tax improved to SEK –6.4 (–30.0) million for the quarter and SEK 8.7 (–45.0) million for the full year.

Fuel and Materials Technology

Sales increased to SEK 64.4 (54.4) million for the quarter and to SEK 224.3 (195.0) million for the full year. In local currencies the increase was 18 per cent for the quarter and 15 per cent for the full year.

Operating profit for the quarter improved to SEK 11.7 (–1.7) million and for the year to SEK 30.1 (5.3) million. Adjusted for items affecting comparability of SEK 0.7 (1.1) million for the quarter, the operating margin for the quarter increased to 19.3 (–1.1) per cent and for the year to 13.7 (3.4) per cent. The improvement in margin is due to high capacity utilization and cost savings including through more effective handling of operational waste.

The order situation is strong for the testing and analysis operations. Completion of production equipment for packaging of medical isotopes for Elekta is delayed. The estimated first delivery will be made in mid-2019 but this is not expected to impact total delivery volume in 2019.

Consultancy Services

Sales decreased to SEK 18.9 (21.5) million for the quarter and to SEK 78.3 (123.0) million for the year. In local currencies the decrease was 16 per cent for the quarter and 38 per cent for the full year. The reduced sales are due to discontinuation of low-margin services in England and Sweden. In addition, in the previous year license revenue of SEK 22 million was received in connection with the signing of the cooperation agreement in China for FBSR technology.

Operating profit for the quarter amounted to SEK –3.1 (–4.5) million and SEK –10.7 (–11.3) million for the year.

Items affecting comparability referring to staff cutbacks in administration reduced earnings for the quarter by SEK 0 (1.4) million and for the year by SEK 3.9 (4.0) million. Adjusted for these, the operating margin for the quarter was –16,4 (–14,4) per cent and –8,7 (12,4) per cent for the year. Changes are being made in Consultancy Services, including new managers in England and the USA and extended resources for sales to customers in Asia.

Scandpower

Sales increased to SEK 39.4 (24.6) million for the quarter and to SEK 137.2 (81.0) million for the year. In local currencies the increase was 52 per cent for the quarter and 66 per cent for the full year. Sales during the quarter mainly refers to customers in the domestic markets in the USA and Europe. For the full year, the contract with the Russian customer TVEL, accounted for SEK 38 million of sales. Demand for software and supplementary orders is good.

The operating profit for the quarter improved to SEK 5.9 (–2.0) million and SEK 26.8 (–11.8) million for the full year. The operating margin for the quarter increased to 15 (–8.1) per cent and for the full year 19.5 (–14.6) per cent.

Germany

Sales during the quarter were SEK 64.9 (64.5) million and SEK 285.4 (291.1) million for the year. In local currencies this meant a decrease of 3 per cent for the quarter and 8 per cent for the full year. Sales of services in operational and outage support decreased, while services related to planning and implementation of decommissioning projects increased. Demand is now high in several specialist areas and the organization is therefore investing in skills development of existing staff and new recruitment, mainly of engineers.

The head of the German operations left the organization during the quarter. The Chief Executive Officer has temporarily taken over responsibility for the operations.

Operating profit for the quarter amounted to SEK –6.8 (–8.8) million and SEK –9.2 (–8.4) million for the full year. Adjusted for items affecting comparability of SEK 2.9 million, the operating margin for the quarter was –5.9 (–13.6) per cent and –2.2(–2.9) per cent for the full year.

Investments

Investments in the quarter amounted to SEK 11.3 (6.9) million and in the full year to SEK 32.1 (22.1) million. The investments are mainly related to the Elekta order announced in January.

Cash flow

The free cash flow in the quarter improved to SEK 29.4 (–30.6) million and in the year to SEK 54.2 (–84.2) million.

Financial position and liquidity

Cash and cash equivalents amounted to SEK 155.5 (98.7) million. Net interest-bearing debt was SEK 44.4 (101.2) million, which meant a net debt/equity ratio of 14.0 (35.1) per cent.

Staff

The average number of employees during the year was 624 (662). The decrease is due to discontinuation of low-margin services in England, fewer employees in the German operations and outsourcing of property management of the Studsvik facility.

Transactions with related parties

During the quarter a dividend of SEK 0.0 (2.5) million was received from UK Nuclear Waste Management Ltd.

Parent company

Operations in the parent company consist of coordination of the Group. Sales during the quarter were SEK 0.7 (5.0) million and for the full year SEK 12.8 (19.7) million. Operating profit for the quarter amounted to SEK –6.8 (–15.8) million and SEK –12.7 (–29.0) million for the full year. Other operating cost has been reduced by appr. SEK 10 million during the year.

Loss after financial items in the quarter was SEK –64.9 (–12.8) million and for the full year SEK –67.2 (–42.1) million. Net financial income for the quarter includes revaluation of intra-group loans by SEK 0.4 (4,6) million and for the full year SEK 10.5 (–7.0) million. In addition, The quarter was also charged with SEK 65.7 million in impairment of the shareholding in Studsvik Ltd. Cash and cash equivalents including current investments amounted to SEK 21.2 (24.9) million and interest-bearing liabilities to SEK 199.9 (199.9) million.

Dividend

The Board of Directors proposes that no dividend be distributed for 2018.

Events after the year-end close

After the year-end close Studsvik signed an agreement with Danske Bank for new bank financing totaling SEK 150 million. Of this, SEK 50 million is a corporate loan with a maturity of five years and the remaining SEK 100 million is an overdraft facility. The cost of the new financing is close to 4 percantage points lower than current financing. Together with our own cash, the financing will be used to redeem an outstanding bond of SEK 200 million that falls due for payment on February 22, 2019.

Annual General Meeting and Annual Report

The Annual General Meeting will be held on Monday, April 29, 2019 at 4 pm at the World Trade Center, Klarabergsviadukten 70/Kungsbron 1. The annual report will be available on the company's website from week 13.

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 further significant risks are deemed to have arisen.

Accounting policies

Studsvik applies the International Financial Reporting Standards (IFRS) approved by the EU. This interim report was prepared for the Group in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. For the parent company, the Swedish Financial Reporting Board recommendation RFR 2 Accounting for Legal Entities and the Annual Accounts Act are applied. The accounting policies applied are in line with what is stated in the Annual Report for 2017, with the exception of new standards and revisions of standards

and interpretations to be applied to the financial year starting on January 1, 2018 and that were not already applied when preparing the 2017 Annual Report.

The standards that have an impact on the Group's financial statements and are being applied for the first time in the financial year starting on January 1, 2018 are set out below:

IFRS 9: Financial instruments

IFRS 15: Revenue from contracts with customers

The amendments to these standards have not had any material impact on the financial reporting, apart from extended disclosure requirements. The accounting policies and valuation principles applicable to these new standards are presented on page 38 of the Annual Report for 2017. A number of new or amended standards and interpretations will not come into force until the coming financial year and have not been applied early when preparing the financial statements. There will be no early application of new or amended standards effective as of financial years after 2018 and none of these are expected to have any material impact on the Group's financial statements.

The preliminary transition effect of SEK 1.5 million communicated in the year-end report for 2017 proved on final analysis to relate to a customer contract that was also recognized in income in 2017 in accordance with earlier principles. The amount was recognized in revenue in the income statement for 2017. Consequently, the company does not report any transition effect for transition to IFRS 15.

IFRS 16: Finance leases

Studsvik will apply IFRS 16 from January 1, 2019, using the simplified transition method. An exemption will be made for contracts with a shorter maturity than 1 year and contracts whose value is less than USD 5,000. The expected effect of the transition to IFRS 16 is presented in Note 3.

Stockholm, February 14, 2019 Camilla Hoflund President/CEO

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

Time Schedule for Financial Information

Interim report January-March 2019	April 29, 2019
Interim report January-June 2019	July 22, 2019
Interim report January-September 2019	October 22, 2019
Year-end Report 2019	February 2020

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 interim report will be presented at a conference call to be held in English, on February 14 at 2:00 p.m. 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 2018	October december 2017	Full year 2018	Full year 2017
Net sales	187.6	165.4	726.1	704.8
Cost of services sold	−143.4	−135.0	−529.5	–539.1
Gross profit	44.2	30.4	196.6	165.7
Selling and marketing expenses	−10.8	−10.7	−39.9	–44.2
Administrative expenses	−31.5	−32.1	−107.9	–116.9
Research and development costs	−9.6	−7.1	−30.7	–28.2
Share in earnings from associated companies	1.6	2.1	10.6	8.7
Other operating income	0.8	0.9	17.3	2.8
Other operating expenses	5.0	−19.2	−12.4	–29.5
Operating profit	−0.3	−35.7	33.6	–41.6
Financial income	0.5	1.0	3.9	1.0
Financial expenses	−4.3	−4.0	−18.4	–15.3
Fair value gain/loss (realized and unrealized)1)	0.3	−0.7	−0.3	–2.8
Profit/loss before tax	−3.8	−39.4	18.7	–58.7
Income tax	−2.6	9.4	−10.0	13.7
NET PROFIT/LOSS FOR THE PERIOD	−6.4	−30.0	8.7	–45.0
Other comprehensive income
Items that may later be reversed in the income statement
Translation differences on foreign subsidiaries1)	1.6	8.3	19.6	–9.9
Cash flow hedging	0.2	0.1	–0.7	4.1
Income tax on items recognized in other comprehensive income	0.0	0.0	0.2	–0.9
Other comprehensive income for the period, net after tax	1.8	8.4	19.1	–6.7
Total profit/loss and other comprehensive income for the period	−4.6	−21.6	27.8	–51.7
Income for the period attributable to
Parent company's shareholders	−6.4	−30.0	8.7	–45.0
Non-controlling interests	0.0	0.0	0.0	0.0
Total comprehensive income attributable to
Parent company's shareholders	−4.7	−21.6	27.7	–51.6
Non-controlling interests	0.1	0.0	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)	−0.78	−3.65	1.06	–5.47

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.

Group statement of financial position

Amounts in SEK million

Amounts in SEK million	December	December
	2018	2017
ASSETS
Intangible assets	190.2	177.4
Property, plant and equipment	124.3	116.6
Other non-current assets	169.0	162.6
Total non-current assets	483.5	456.6
Inventories	0.5	0.6
Trade receivables	145.7	158.9
Other current receivables	115.4	110.1
Cash and cash equivalents	155.5	98.7
Total current assets	417.1	368.3
TOTAL ASSETS	900.6	824,9
EQUITY AND LIABILITIES
Equity attributable to parent company's shareholders	315.8	288.1
Non-controlling interests	0.4	0.3
Total equity	316.2	288.4
Borrowing	0.0	199.9
Provisions and other non-current liabilities	166.6	164.8
Total non-current liabilities	166.6	364.7
Trade and other payables	217.9	171.8
Borrowing	199.9	0.0
Total current liabilities	417.8	171.8
TOTAL EQUITY AND LIABILITIES	900.6	824.9

Changes in equity

Amounts in SEK million Share capital Other contributed capital Reserves Retained earnings Equity attributable to the parent company's shareholders Noncontrolling interest Total equity 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 Comprehensive income for the period 0.0 0.0 0.0 0.0 0.0 –15.0 –8,2 –15.0 –8,2 −30.0 0.0 –0.1 –8,2 –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 Changes January 1 – September 30, 2018 Comprehensive income for the period 0.0 0.0 17.3 14.9 32.2 0.0 32.2 Equity at September 30, 2018 8.2 225.3 22.1 64.8 320.4 0.3 320.7 Changes October 1 - December 31, 2018 Comprehensive income for the period 0.0 0.0 1.7 −6.3 −4.6 0.1 −4.5 Equity at December 31, 2018 8.2 225.3 23.8 58.5 315.8 0.4 316.2

Group statement of cash flow

Amounts in SEK million Total operations	October December 2018	October December 2017	Full year 2018	Full year 2017
Cash flow from operating activities
Operating profit	−0.3	−35.7	33.5	–41.6
Adjustment for non-cash items	10.1	11.0	16.3	16.1
Financial items, net	−3.6	0.9	−14.4	–9.0
Income tax paid	−0.1	3.9	–6.4	–6.5
Cash flow from operating activities before change in working capital	6.1	−19.9	29.0	–41.0
Change in working capital	35.1	−6.3	51.3	–32.1
Cash flow from operating activities	41.2	−26.2	80.3	–73.1
Investing activities
Acquisition of property, plant and equipment	–10.8	−6.9	–32.1	–22.1
Disposal of non-current assets	0.0	–	0.5	–
Acquisition in associated companies	–	–	–	–
Divestment of subsidiaries	–	–	–	–
Dividend from associated companies	–	2.5	5.5	11.0
Other cash flow from investing activities	–1.0	–	0.0	–
Cash flow from investment activities	–11.9	−4.4	–26.1	–11.1
Free cash flow	29.4	−30.6	54.2	–84.2
Financing activities
Change in borrowing	–	–	–	–
Dividend to shareholders	–	–	–	–8.2
Cash flow from financing activities	0.0	0.0	0.0	–8.2
Changes in cash and cash equivalents	29.4	−30.6	54.2	–92.4
Cash and cash equivalents at the beginning of the period	126.1	128.2	98.7	195.4
Translation difference	0.0	1.1	2.6	–4.3
Cash and cash equivalents at the end of the period	155.5	98.7	155.5	98.7

Financial ratios for the Group

Amounts in SEK million	Full year 2018	Full year 2017
Margins
Operating margin, %	4.6	–5.9
Profit margin, %	2.6	–8.3
Return on investment
Return on capital employed, %	7.4	–7.8
Return on equity, %	2.9	–14.1
Capital structure
Capital employed	516.1	488.3
Equity	316.2	288.4
Net debt	44.4	101.2
Net debt/equity ratio, %	14.0	35.1
Equity/assets ratio, %	35.1	35.0
Employees
Average number of employees	624	662
Net sales per employee	1.2	1.1

Data per share	October December 2018	October December 2017	Full year 2018	Full year 2017
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 for the period	−0.78	−3.65	1.06	–5.47
Equity per share, SEK	38.47	35.09	38.47	35.09

Net sales per geographical area

Amounts in SEK million	October December	October december	Full year 2018	Full year 2017
	2018	2017
Sweden	30.8	36.4	126.9	157.1
Europe	117.3	98.0	484.3	424.4
North America	28.3	21.4	71.3	72.7
Asia	11.2	9.6	43.6	50.6
Other	0.0	0.0	0.0	0.0
Total	187.6	165.4	726.1	704.8

Quarterly review

Amounts in SEK million	2016				2017				2018
Continuing operations	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Net sales	171.6	176.3	164.6	246.3	179.6	176.6	183.3	165.4	197.4	174.0	167.2	187.6
Operating expenses	–160.9	–177.5	–176.5	–219.3	–181.6	–196.0	–167.8	–201.1	–175.2	–172.0	−157.7	−187.9
Operating profit	10.7	–1.2	–11.9	27.0	–2.0	–19.4	15.5	–35.7	22.2	2.0	9.5	−0.3
Financial items, net	–5.1	–6.6	–4.5	–9.0	–5.1	–3.7	–4.6	–3.7	–3.6	–4.4	−3.4	−3.5
Profit/loss after financial items	5.6	–7.8	–16.4	18.0	–7.1	–23.1	10.9	–39.4	18.6	–2.4	6.1	−3.8

Financial data per segment

Amounts in SEK million

Total operations	Consultancy	Materials
October - December 2018	Services	Technology	Scandpower	Germany	Other	Elimination	Group
External sales revenue	15.5	62.7	37.5	64.9	7.0	0.0	187.6
Revenue from segment	3.4	1.7	1.9	1.0	2.5	–10.5	0.0
Operating profit	–3.1	11.7	5.9	−6.8	–8.0	0.0	−0.3
Items affecting comparability	0.0	0.7	0.0	2.9	0.0	0.0	3.6
Adjusted operating profit	–3.1	12.4	5.9	−3.9	–8.0	0.0	3.3
Assets	161.8	217.6	145.6	230.2	433.0	–287.6	900.6
Liabilities	133.6	183.3	49.5	210.7	296.3	–287.6	585.8
Investments	0.4	7.5	0.0	0.2	3.2	0.0	11.3
Depreciation/amortization	0.1	3.6	0.2	0.3	0.9	0.0	5.1
Average number of employees	52	97	31	420	25	–	625
		Fuel and
	Consultancy	Materials
October - December 2017	Services	Technology	Scandpower	Germany	Other	Elimination	Group
External sales revenue	17.8	54.4	22.3	60.8	10.0	0.0	165.4
Revenue from segment	3.7	0.0	2.3	3.7	6.4	−16.1	0.0
Operating profit	−4.5	−1.7	−2.0	−8.8	−18.7	0.0	−35.7
Items affecting comparability	1.4	1.1	3.2	0.0	9.2	0.0	14.9
Adjusted operating profit	−3.1	−0.6	1.2	−8.8	−9.5	0.0	−20.8
Assets	151.7	182.7	95.0	223.1	419.5	−247.1	824.9
Liabilities	120.2	151.0	22.5	191.0	298.8	−247.1	536.4
Investments	1.5	2.9	0.5	0.8	1.1	0.0	6.9
Depreciation/amortization	0.6	2.7	0.2	0.3	0.9	0.0	4.6
Average number of employees	62	101	34	435	35	–	667
		Fuel and
	Consultancy	Materials
Full year 2018	Services	Technology	Scandpower	Germany	Other	Elimination	Group
External sales revenue	68.9	219.5	129.7	280.0	28.0	0.0	726.1
Revenue from segment	9.4	4.8	7.5	5.4	20.0	–47.1	0.0
Operating profit	–10.7	30.1	26.8	−9.3	–3.4	0.0	33.5
Items affecting comparability	3.9	0.7	0.0	2.9	–12.2	0.0	−4.7
Adjusted operating profit	–6.8	30.8	26.8	−6.4	–15.6	0.0	28.8
Assets	161.8	217.6	145.6	230.2	433.0	–287.6	900.6
Liabilities	133.6	183.3	49.5	210.7	296.3	–287.6	585.8
Investments	2.4	23.2	0.5	0.3	5.7	0.0	32.1
Depreciation/amortization	1.1	12.7	0.8	1.1	3.7	0.0	19.4
Average number of employees	51	98	33	417	25	–	624
		Fuel and
	Consultancy	Materials
Full year 2017	Services	Technology	Scandpower	Germany	Other	Elimination	Group
External sales revenue	114.4	192.1	73.5	281.1	43.7	0.0	704.8
Revenue from segment	8.6	2.9	7.5	10.0	25.6	–54.6	0.0
Operating profit	11.3	5.3	–11.8	–8.4	–38.0	0.0	–41.6
Items affecting comparability	4.0	1.4	3.2	0.0	12.5	0.0	21.1
Adjusted operating profit	15.3	6.7	–8.6	–8.4	–25.5	0.0	–20.5
Assets	151.7	182.7	95.0	223.1	419.5	–247.1	824.9
Liabilities	120.2	151.0	22.5	191.1	298.8	–247.1	536.5
Investments	2.7	13.8	0.7	1.4	3.5	0.0	22.1
Depreciation/amortization	1.1	9.9	0.8	1.0	3.8	0.0	16.6
Average number of employees	57	101	34	435	35	–	662

Fuel and

Year-end Report 2018

Financial data per segment cont. - External sales per country Amounts in SEK million, total operation

		Fuel and
	Consultancy	Materials
October-December 2018	Services	Technology	Scandpower	Germany	Other	Total
Sales from
Germany	–	–	7.1	61.5	–	68.6
Switzerland	–	–	–	3.4	–	3.4
United Kingdom	7.1	–	–	–	–	7.1
USA	4.6	–	21.9	–	–	26.5
Sweden	3.8	61.6	8.5	–	7.0	80.9
France	0,0	–	–	–	–	0,0
Japan	–	1.1	–	–	–	1.1
Total	15.5	62.7	37.5	64.9	7.0	187.6
		Fuel and
	Consutancy	Materials
October-December 2017	Services	Technology	Scandpower	Germany	Other	Total
Sales from					–
Germany	–	–	5.3	56.7	–	62.0
Switzerland	–	–	–	4.1	–	4.1
United Kingdom	7.4	–	–	–	–	7.4
USA	6.8	–	12.9	–	–	19.7
Sweden	3.1	53.8	4.1	–	10.0	71.0
France	0.5	–	–	–	–	0.5
Japan	–	0.6	–	–	–	0.6
Total	17.8	54.4	22.3	60.8	10.0	165.4
		Fuel and
Full yer 2018	Consultancy Services	Materials Technology	Scandpower	Germany	Other	Total
Sales from
Germany	–	–	21.2	260.0	–	281.2
Switzerland	–	–	–	20.0	–	20.0
United Kingdom	26.3	–	–	–	–	26.3
USA	24.7	–	84.1	–	–	108.8
Sweden	16.9	213.6	24.4	–	28.0	282.9
France	1.0	–	–	–	–	1.0
Japan	–	5,9	–	–	–	5,9
Total	68.9	219.5	129.7	280.0	28.0	726.1
		Fuel and
Full year 2017	Consultancy Services	Materials Technology	Scandpower	Germany	Other	Total
Sales from
Germany	–	–	19.1	256.2	–	275.3
Switzerland	–	–	–	24.9	–	24.9
United Kingdom	34.1	–	–	–	–	34.1
USA	51.8	–	40.9	–	–	92.7
Sweden	26.2	187.7	13.5	–	43.7	271.1
France	2.3	–	–	–	–	2.3
Japan	–	4.4	–	–	–	4.4
Total	114.4	192.1	73.5	281.1	43.7	704.8

Parent company income statement	October December	October December	Full year 2018	Full year
Amounts in SEK million	2018	2017		2017
Net sales	0.7	5.0	12.8	19.7
Cost of services sold	0.0	0.0	0.0	–0.9
Gross profit	0.7	5.0	12.8	18.8
Other operating income and costs	–7.5	−20.8	–25.5	–47.8
Operating profit	–6.8	−15.8	–12.7	–29.0
Result from participations in Group companies	–58.3	0.0	–58.3	0.0
Net financial items	0.2	3.0	3.8	–13.1
Profit/loss before tax	–64.9	−12.8	–67.2	–42.1
Income tax	–0.3	3.0	–1.8	9.3
NET PROFIT/LOSS FOR THE PERIOD	–65.2	−9.8	–69.0	–32.8

Parent company balance sheet

Amounts in SEK million	December	December
	2018	2017
ASSETS
Intangible assets	1.2	1.9
Property, plant and equipment	–	–
Financial non-current assets	599.3	643.8
Total non-current assets	600.5	645.7
Current assets	26.3	8.2
Cash and cash equivalents	21.2	24.9
Total current assets	47.5	33.1
TOTAL ASSETS	648.0	678.8
EQUITY AND LIABILITIES
Equity	176.7	245.7
Provisions	–	–
Non-current liabilities	42.8	243.4
Current liabilities	428.5	189.7
Total liabilities	471.3	433.1
TOTAL EQUITY AND LIABILITIES	648.0	678.8

	October	October	Full year	Full year
Note 1 Adjustment of translation difference	December	December	2018	2017
and net financial income	2018	2017
Fair value gain/loss befor adjustment (realized and unrealized)	0.3	−0.7	–0.3	–2.8
Adjustment	–	–	–	–
Fair value gain/loss after adjustments (realized and	0.3	−0.7	–0.3	–2.8
unrealized)
Translation difference before adjustment	1.5	8.3	19.5	–9.9
Adjustment	–	–	–	–
Translation difference after adjustment	1.5	8.3	19.5	–9.9

Note 2 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, 2018 (MSEK)	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profit or loss		21.9	13.9
Derivatives used for hedging		3.2
Liabilities
Derivatives used for hedging		3.7
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
Fair value of the Group's borrowings (MSEK)	December 31, 2018		December 31, 2017
Non-current loans	–		199.9
Current loans	199.9		–
Total loans	199.9		199.9

Note 3 Effects of IFRS 16 Leases

Amounts in SEK million	December31,	Adjustments	January 1,
	2018		2019
ASSETS
Intangible assets	190.2		190.2
Property, plant and equipment	124.3	25.0	149.3
Other non-current assets	169.0		169.0
Total non-current assets	483.5	25.0	508.5
Inventories	0.5		0.5
Trade receivables	145.7		145.7
Other current receivables	115.4		115.4
Cash and cash equivalents	155.5		155.5
Total current assets	417.1	0.0	417.1
TOTAL ASSETS	900.6	25.0	925.6
EQUITY AND LIABILITIES
Equity attributable to parent company's shareholders	315.8		315.8
Non-controlling interests	0.4		0.4
Total equity	316.2	0.0	316.2
Borrowing	0.0		0.0
Provisions and other non-current liabilities	166.6	15.4	182.0
Total non-current liabilities	166.6	15.4	182.0
Trade and other payables	217.9	9.6	227.5
Borrowing	199.9		199.9
Total current liabilities	417.8	9.6	427.4
TOTAL EQUITY AND LIABILITIES	900.6	25.0	925.6

Reconciliations of key ratios

Return on capital employed	Full year	Full year
Amounts in SEK million	2018	2017
Profit/loss after financial items	18.7	–58.7
Financial costs according to the income statement	18.4	15.3
Fair value - foreign exchange losses	0.3	2.8
Total	37.4	–40.6
Balance sheet total	824.9	901.0
Provisions and other long-term liabilities	–164.8	–161.7
Trade and other payables	–171.8	–192.6
Opening capital employed	488.3	546.7
Balance sheet total	900.6	824.9
Provisions and other long-term liabilities	−166.6	–164.8
Trade and other payables	−217.9	–171.8
Closing capital employed	516.1	488.3
Average capital employed	502.2	517.5
Return on capital employed	7.4	–7.8

Return on equity	Full year	Full year
Amounts in SEK million	2018	2017
Net profit/loss for the year	8.7	–45.0
Total	8.7	–45.0
Opening equity	288.4	348.5
Closing equity	316.2	288.4
Return on equity	2.9	–14.1

Net debt	Full year	Full year
Amounts in SEK million	2018	2017
Current borrowing	199.9	–
Non-current borrowing	–	199.9
Total liabilities	199.9	199.9
Cash and cash equivalents	155.5	98.7
Net debt	44.4	101.2

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, 2018
	Number of shares	Share, %
The Karinen Family	1,769,552	21.5
Briban Invest AB	1,285,492	15.6
Peter Gyllenhammar AB	966,492	11.8
The Girell Family	391,482	4.8
Credit Agricole Suisse SA	363,879	4.4
Avanza Pensionsförsäkring AB	289,574	3.5
Nordnet Pensionsförsäkring AB	259,902	3.2
Malte Edenius	250,000	3.0
Leif Lundin	197,000	2.4
Invus Investment AB	191,594	2.3
Total ten largest shareholders - holdings	5,964,967	72.6
Other shareholders	2,253,644	27.4
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 600 employees in 7 countries and the company's shares are listed on the Nasdaq Stockholm

16 Production/Graphic design: Studsvik AB Photo: Studsvik

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).

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