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Studsvik AB (market cap: $109.42M) reported a robust financial performance for the first quarter of 2025, with net sales increasing by 8.2% compared to the same period last year. The company’s operating profit margin improved significantly, reaching 8.6%, up from 5.8% in Q1 2024. Following the earnings announcement, Studsvik’s stock price surged by 4.02%, closing at 129.5 SEK, nearing its 52-week high of 143 SEK. According to InvestingPro analysis, the stock currently trades at a relatively high P/E ratio of 110.26x, suggesting premium valuation levels.
Key Takeaways
- Net sales increased by 8.2% year-over-year.
- Operating profit margin improved to 8.6%.
- Positive free cash flow of SEK 39.6 million.
- Stock price rose by 4.02% post-earnings.
Company Performance
Studsvik AB demonstrated strong performance in Q1 2025, driven by increased sales and improved profit margins. The company benefited from strategic acquisitions and continued innovation in nuclear technology. With a last-twelve-month revenue of $80.72M and gross profit margin of 22.21%, the company maintains a moderate level of debt with a debt-to-equity ratio of 0.49. This performance aligns with the broader industry trend of growing demand for nuclear power services, as global nuclear capacity is expected to increase significantly.
Financial Highlights
- Revenue: Increased by 8.2% compared to Q1 2024.
- Operating profit margin: Improved to 8.6% from 5.8% last year.
- Free cash flow: SEK 39.6 million.
- Acquisitions contributed SEK 6 million to quarterly revenue.
Market Reaction
Studsvik’s stock price rose by 4.02% following the earnings release, reflecting investor confidence in the company’s strong financial performance and growth prospects. The stock is trading close to its 52-week high, indicating positive sentiment in the market.
Outlook & Guidance
Studsvik remains optimistic about its future growth, focusing on enhanced commercial management, organic growth opportunities, and strategic acquisitions. The company anticipates continued strong demand for its nuclear power services, supported by global trends towards electrification and increased nuclear capacity. InvestingPro analysis reveals several positive indicators, including expected net income growth this year and strong returns over the past decade. For detailed insights and access to 8 additional ProTips about Studsvik’s financial health and growth prospects, consider exploring InvestingPro’s comprehensive research platform.
Executive Commentary
Karl Thedin, CEO, emphasized Studsvik’s global reach and the expanding nuclear market. "We are a truly global company that is serving an expanding nuclear market," Thedin stated. CFO Peter Teske highlighted the company’s strong quarterly performance, noting, "We have a strong quarter behind us."
Risks and Challenges
- Potential challenges in the German market due to high competition.
- Seasonal variations in software sales.
- Managing integration of recent acquisitions effectively.
- Navigating global economic uncertainties.
Studsvik’s Q1 2025 results reflect a solid start to the year, with strong sales growth and improved profitability. While the company’s current ratio of 0.84 indicates some liquidity challenges, its Altman Z-Score of 3.99 suggests overall financial stability. The company’s strategic focus on innovation and market expansion positions it well for continued success in the evolving nuclear power industry. For a deeper understanding of Studsvik’s valuation and growth potential, access the detailed Pro Research Report available exclusively on InvestingPro, covering over 1,400 stocks with expert analysis and actionable insights.
Full transcript - Studsvik AB (SVIK) Q1 2025:
Conference Operator: Welcome to StudsVic Q1 twenty twenty five Report Presentation. For the first part of the presentation, participants will be in listen only mode. During the questions and answers session, participants are able to ask questions by dialing pound key Now I will hand the conference over to CEO, Karl Tadien and CFO, Peter Teske. Please go ahead.
Karl Thedin, President and CEO, Stutzfisk Group: Good morning, and welcome to the Q1 earnings call from Stutzfisk Group. I’m Karl Thedin, President and CEO. And with me, I have Peter Teske, our CFO, who will join me in the presentation a bit later. So let’s start with a recap on who we are. These are the sales numbers from 2024.
And you can also see that we are a truly global company with setups almost all over the world or in the East and in The US and obviously in Europe. We have customers in Japan, large activities in Korea, obviously in the European Nordics, Germany, France, UK, Switzerland. And then obviously, a big activity in all our business areas in The U. S. And in Canada, so a truly global company that is serving an expanding nuclear market.
So then let’s go into the Q1 results. And we are very proud today of presenting a strong earnings trend and a very positive cash flow. We are, for the third quarter in a row, growing, reaching SEK $227,000,000 in earnings for this quarter. But maybe more importantly, we are also growing our profit significantly up to SEK 19,500,000.0 or SEK 8 point 6 percent compared to 5.8% the same period last year. And it’s always good to compare with the same period last year, but also if you compare it to the previous quarters that we’re coming from in the end of twenty twenty four, this is a significant change in trajectory for our business, and that’s we’re very proud of that.
All three business areas are growing, and the most solid growth are coming from our ScanPar, where we deliver core optimization software programs throughout the world, including services and consulting service with that. We also have a very strong positive cash flow this quarter of SEK 39,600,000.0. This is the result of a strong invoicing in Q4 and Q1, but also that we have the programs we run-in Q4 of increased cost control and further development of the organization has resulted in that we are much more efficient organizations already in the first quarter of twenty twenty five. If we then look into the key achievements in quarter one of twenty twenty five. As I said, we have improved operating margins, and we have a solid growth in also this quarter.
Cash flow is, for me, personally very important. I think that’s a good sign that you run an efficient operation from order intake to delivery of your services and products. One business area that did not deliver according to our expectations in Q3 and Q4 of twenty twenty four was the business area of fuel materials and now merged with waste management technology. That has significantly changed in Q1, and we’re developing a positive result and a strong order book and a much more efficient organization, resulting in strong profitability in that very important business area for us. We have in the quarter also continued our M and A journey by acquiring Blackstar Tech product line from the utility Constellation Energy in The U.
S. That company offers products and solution for safety systems in nuclear power plants, and we have already taken our first orders there. We have also signed a very important agreement with European Spallation Source, ESS in short, and that is has a big research center for neutron generation in the Southern part of Sweden. And we have received an order for the planning of the management of radioactive waste that would come out of that big enterprise, and that will be built eventually at the Stutzvik site. So a very interesting and active quarter.
Just going into a little bit more on the business areas and just to remind everybody that we now are running this company on the three business areas. Decommissioning radiation protection services is how we help utilities to dismantle and take down parts or the full nuclear power plants. Stutzvik ScanPar is where we deliver our software for fuel optimization. And fuel materials and waste technology is now merged. It was used to be fuel materials and then a separate one from waste technology.
They have synergies and we have merged the two entities into one. So let me start then with the business area of decommissioning and radiation protection services. It offers an entire chain from planning and project management to radiological assessments and clearance of material waste documentation. This is much more advanced than you will see at the first glance. It’s highly educated people that are helping our customers do this in a safe way to in an efficient and safe way.
To expand our offering here, we acquired in August of last year a company called Xtrem Bodrosorb, or EBS in short. And that company offers very advanced sawing equipment and services, for example, taking down reactor tanks. And we have now integrated that into this business area, and we expect increased business synergies during 2025 as we now are integrating offers of this into all our offers for our base services here. However, this business area has had some challenges in this quarter with the cost increases through the collective bargaining agreements in mainly Germany, which we have not been able to meet with price increases to the customers. It’s still a very active market with a lot of opportunities, but it’s a price sensitive market at this time.
So we are delivering growth here, as you can see, up to 86,300,000.0, but operating profit is down compared to last year, and the profits are obviously not to our expectations. We do see that this business will develop more positive going forward. Based on that this quarter, as you can see also last year was is a challenging quarter because of the late start coming up to full speed after holidays, both for our employees, but also for the customers that we are working closely with when doing these services. If we then move on to Stutzik Skanderpower, who is a world leader in development and support of software for reactor analysis and enables our customers to run multiple fuel vendors, giving them a much more better cost profile of their very expensive fuel purchases. 50% of the light water reactors in the world are actually using this software, so we are a dominant player in this.
Here, we also integrated our Blackstar tech new product line, and we have our first sales under our ownership of products into utilities in The US. And we have also continued to win orders for our software, in this case, simulate five and the the s five k into first in Nordic region, which this is basically a simulation of the the the the fuel fuel rods. And also, are continuing to expand also into the new developments of SMR and SMR vendors that are emerging, in this case, in The U. S, but we are very active in that area of the emerging area of the market. And finally, fuel, materials and waste technology.
We do services here based on very much on from the site, South Of Stockholm in Stutzvik, for where we have our hot cells, fuel qualification analysis of material that has been irradiated in nuclear power plants for a long time. This is an area that is has increased interest from customers based on the need to extend the lifetime of nuclear power plants. We have also seen an increasing interest for our waste management consultancy services and the interim technology, which is emphasized by the ESS order that I will soon explain. We see a very slight increase in sales here, but as you can see, we are back to strong operating profits of 14.6%, which is significantly up from the bad quarters we’re coming from in the last in the second half of twenty twenty four. So if I then go to next slide, explain a little bit why we think the order from the European Spallation Source, ERIC or in short ESS, is very important for us.
So here, we are using our site, which is a very, very good asset where we have all the permits to run radioactive materials testing and handling. And the order here is about the planning and data design and licensing of a new facility that includes both storage for waste mid term and then also a new interim facility. And this is actually the first in this kind of the interim order and for us, that’s a very good proof that our interim is really offering huge customer value in reduction of waste that we can do in that. And also based on all the testing that has been done in our demo facility. This will now run for up to around about two years.
And then the next phase is when we hope and will work with ESS to get the final order to actually construct and build these facilities and run them for a very, very long time to support that research center in southern part of Sweden. So with that, I hand over to CFO, Peter Teske. Please, Peter.
Peter Teske, CFO, Stutzfisk Group: Thank you so much, Karl. And I will take you through the numbers for Q1. And as Karl mentioned, we are very pleased that when we look at net sales, which has increased by 8.2% compared to Q1 last year. And also, all three business areas are showing positive variations compared to last year, and especially, it’s Stutzik’s Scanpower has increased almost 32%. And that’s mainly due to the software sales to Europe and U.
S, but also the acquisition of Blackstar Tech contribute also to the increase. Also worth mentioning here is that Scanpower has variation, a big variation in the sales, and that will also develop during the year. If we look in a rolling twelve month, we see that the net sales has increased by 7.6%, and that’s higher than our financial target of 6%. So that’s also we are satisfied with. We see the positive effect from the acquisition of both EBS and Blackster Tech.
The contribution of those two acquisition in the quarter is 6,000,000. And then EBS is for a full quarter and Blackstar Tech is only for two months because acquisition was the 02/01/2025. So if we exclude acquisition, we have an underlying organic growth in the company. If we then move on to the operating profit during the quarter, You see here an overview over our operating profit each quarter. And also, we have historical lower results during Q1 and Q2.
And as you see in Q1 this year, we delivered really strong results. And also, if you compare the result to Q1 last year, we have a property sales of SEK 2,300,000.0 last year. And if we go into the numbers of this quarter, we see that the exchange rates have a positive impact of our earnings, thanks to a remeasurement of our intergroup items, and that’s basically around SEK 5,000,000. We see that the increased margin that are 8.6% this quarter is thanks to a positive impact of our improved cost control that we have in the group and also an effect of the efficiency program that we launched during Q4 twenty twenty four. And of course, also the highest sales that we have is affecting the EBIT, the operating profit.
If we then look in our respective business areas, as Karl mentioned, we now have three because of the merge of the waste management technology and fuel and material technology. If we first look at the commissioning and radiation protection services, we see that the EBS, the acquisition, that one, are affecting the net sales in a positive way. And also, as Karl mentioned, we see a lower profit compared to last year, and that’s mainly because of those changes in salaries that we, in the short run, not fully can be compensated by the customers. And therefore, there is, in the short run, a negative impact on the margins. If we then go to the new business area, Fuse Materials and Waste Technology, We have a strong increase here if you compare it to Q4 twenty twenty four because we have still the momentum in the production, and we see positive effects from the cost cutting program that we implemented.
So we have a good positive contribution to the profit during the quarter. And also the Stutzik Scanpower business area that we have the effects of the acquisition of Blackstar Tech and also the good sales to our customers in Europe and U. S. And here, you have the positive FX effect of SEK 5,100,000.0 in this business area. If you then go further to the next slide to look at the cash flow, we see also this real strong cash from quarter for us at Strategic Group when we deliver almost SEK 40,000,000 in positive free cash flow.
And that’s because we have collected the payments from the high invoicing we had during December. But at the same time, we have still higher accounts receivable now than we had in Q1 twenty twenty four. And also an effect on cash flow is that we have an improved investment controls in the group. So the investments, which are SEK 4,900,000.0, are basically replacements, investments in the business area of fuel materials and waste management technology. So to summarize, the cash flow is that we have a strong quarter behind us.
So our cash and cash equivalents and our uses of the overdraft facility is lower now than the fiscal year end 2024. And finally, if you look at our three financial targets that we have, we have the growth, operating margin and the equity to asset ratio. And as I mentioned before, our growth is green, so we are fulfilling that. But we still have and we have positive trend on the operating margin and also on the equity to asset ratio. Then I will hand it over to you, Karl.
Karl Thedin, President and CEO, Stutzfisk Group: Thanks, Peter, for that. I will now go in a little bit to explain a little bit what we see about the market and what has been in the press recently about this market. These are two slides that I put together from a presentation that a big utility in The Nordics, Fortum, gave a presentation to the market a couple of weeks back. And it basically, to a very good way, explains the business we are in. If you see in the top right left hand corner, you see the lifetime expansion of the current fleet, which is in Sweden, the plans are at least to keep them up to 2,060, maybe 2,070 for the six remaining plants that we have.
That is the same trend we see all over the world. There is a lot of activity to extend lifetime. And what happens then is that you need more testing or what is the situational material, new fuel types, higher efficiency, modernization on digitalization, safety systems and also an increasing demand on handling waste. So we see a lot of activity in our business that are driven by the lifetime extension. And we’re going to continue to see that.
And I think to some extent, that has been the boost that we see in the bottom right hand corner of new nuclear, they work a little bit in parallel here that obviously becomes even more important to invest as we also see that the new nuclear is coming, but it will take quite a long time before we have a significant amount of new reactors built. But the colors here indicates that, for example, in Sweden, there is active planning, but site or vendor discussions have started or been done. In the dark green, they are more further down the line and will soon start to design new reactors. And in the black colors here, we have new reactors under design. So a lot of activity, and this is not this is only Europe as an example.
Obviously, we see the same trend in The U. S, a lot of new plants being built also throughout Asia, A lot of power plant being opened up again, for example, in Japan after the Fukushima accident or tsunami in twenty twenty twenty eleven. So a glimpse from a customer, which we really support our business that we are in. If we then continue a bit on the market, we can see that SMRs is coming, small modular reactors. They are smaller.
They would be able to be built in a more efficient way. And we are active now to make sure that our technology and our services are in there, we already have contracts in both used materials and in the Scanpower business here at Ford for some of the SMR vendors. As I said, a lot of countries moving to nuclear. Not a very big increase of international of electricity demand in the world, but that will change as we can see, for example, driven by data centers or the big change to electrification of big process industry and so on that we also see here in The Nordics. So the trend now is that there will be an increase of global nuclear capacity by 2.5x.
Obviously, that is to a large part driven by China, but also we see a big increase in other parts of the world. So how are we meeting this demand? Yes, one of the things that we’re doing that we are investing in innovation and that can help us to be an even bigger part of this new market. We have talked about the in drum facility or in drum technology. You can see here a picture from our demo center in Stutzvik, which is now we’re running a lot of demos and testing for our customers, including for the customer who has won ESS.
We have done that, but we have other a lot of other customers in this on a regular basis. We are developing new software innovation for fuel optimizations, including adopting the software we have for the SMR and AMR markets. And we have acquired a new company in this quarter, Blackstar Techwood, that would help with modernizing existing fleet, where we are basically helping our customer to be much and use digital solutions to reduce the maintenance and operation cost of the operational fleet. And if we summarize a little bit what we are doing, you can see the newbuild, operating plants, decommissioning plants that are not going to be in use anymore and other services in the radioactive space. And we have here written down some of the examples of what we do for the different areas here.
So for example, for new build, there is both fuel materials testing. There is a lot of waste planning that you need to do when you send in your application, so we are also gonna be very much part of that. And a lot of the fuel planning and showing how you’re to run them is also part of what we’re doing for those. In the operating plans, basically, all our business areas are very, very active and we’re adding now, as I said, the Blackstar tech, for example, as one. And decommissioning is also part of a very important life cycle because some of these will come to a situation where they need to be decommissioned.
And that is a very lengthy and complex process where we can support our customers. And we also enter into new areas like isotope production that we have highlighted before that we do for the health care sector, and we see an increasing demand and discussions also in this part of our business. So some final comments from me. First of all, just highlighting how we’re to run the company going forward in the three business areas as I discussed, but also on the four main focus areas to reach our financial targets for sales and profitability. One thing, the number one is enhance our commercial management.
This company has been run very separately the business areas. And we’re now bringing together a more efficient commercial management, including increased focus on marketing, but also an increased focus on our key customers. And of course, we have a lot of large customers that we haven’t addressed effectively before. There is a lot of organic growth opportunities in all our business areas that we will continue to develop and invest in because some of these are also requiring investments. We have started to execute on our M and A strategy and we’ll continue to do so.
And obviously, the fight for talent in our industry is increasing to be really working on our employee branding and being a really strong employer is extremely important throughout the world. So summarizing the quarter. Very strong profit trend with good growth, increasing margins and strong cash flow. We have some important customer wins in this quarter. The one we have announced is ESS, but there are many others.
We continue to deliver on our M and A strategy. We have changed the way we operate the company, and we have seen effects of that already in this quarter. And we see continued strong market for nuclear power, both to support existing plants and also building new ones. And with that, I can turn back to the operator for questions.
Conference Operator: The next question comes from Stefan Knudsen from ABG. Go ahead.
Stefan Knudsen, Analyst, ABG: Good morning, Karl and Peter. Congratulations on a solid report. I have a couple of questions from my side. Firstly, on Scanpower, was there any significant license deals in the quarter? Or was it mainly operational performance driven by better underlying demand that drove the results?
Karl Thedin, President and CEO, Stutzfisk Group: I think Scanpower was the results were driven by a strong backlog from Q4. We have wins, as we indicated, in The Nordics and also for the SMR sector in The U. S. They are not as large as the license deals we took in Q4. And we will see fluctuations of our revenues from Scanpower as we saw in 2024.
But the underlying demand is strong, but there will be seasonal variations throughout the year.
Stefan Knudsen, Analyst, ABG: And the delivery for Gardel, for example, how long do you expect them to continue here? Because that was the driver in Q4, and it seems like it was part of the driver here as well.
Karl Thedin, President and CEO, Stutzfisk Group: Yes. The Gardell software is obviously one important model that we are selling, and license sales of that will definitely continue throughout the year. But I just would emphasize that the order intake and the revenue associated with that is fluctuating As you saw last year, we had a very strong Q4 and less strong other quarters in 2024. But definitely, we are we still see demand for all our software modules.
But we have some new ones that is specifically addressing the SMR market, for example, that we’re also driving.
Stefan Knudsen, Analyst, ABG: Okay, perfect. Going on to the fuel material and waste technology, quite a significant improvement from where you were at the end of last year. Is there more to come from your cost initiatives? Or do you deem that you’re fully back to where you were before the dip in profitability?
Karl Thedin, President and CEO, Stutzfisk Group: The dip in profitability had multiple causes. One of them was too high cost, but there was also other things that efficiency in the organization. I think we are have that behind us. We are not going to do any significant cost cutting at this time, but there are always efficiency tweaks that you can do to your organization and so on. We have put a lot of new things in place in terms of how we run our investments, how we run our business, how we invoice, how we collect collect money.
So I think there’s a lot of efficiency gains that we will continue to see in that business area.
Stefan Knudsen, Analyst, ABG: Thank you. And then lastly, on the German business, how do you assess the current situation? As you mentioned, price pressure and wage inflation, is that something that we should think of as a structural problem or something that you can address later in the year?
Karl Thedin, President and CEO, Stutzfisk Group: We see that we would come up in profitability compared to a weak Q1. But this is a tough market that is also in a bit of a midpoint at this time. We don’t know exactly where it will go, and some of the smaller companies may disappear. And obviously, we are working on a very high quality services offerings and hope that we can get even better paid for that over the time. But it’s going to improve, but it’s, until at this time, a challenging market.
Stefan Knudsen, Analyst, ABG: Thank you very much. And then also a financial question regarding the working capital release in the quarter. Is that something that you deem to be at a sustainable level or something that you expect to continue to be volatile throughout the year?
Peter Teske, CFO, Stutzfisk Group: We will yes, the working capital for us is volatile, but we think now that we would have a stable in the next coming quarter.
Conference Operator: There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.
Karl Thedin, President and CEO, Stutzfisk Group: I think we thank the audience for listening. Once again, we are proud to deliver a strong Q1, look forward to continue to deliver the business in a strong market. And we will talk again in July time frame. Thank you very much.
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