Studsvik - Profitability excels in Q1
Order backlog of SEK 1bn in F&MT EBIT estimates up ~7% on higher margins Trades at P/E 12. 4x on our ‘21e Q1: Solid start to the year with profitable growth Studsvik reported Q1 sales of SEK 162. 8m (+10% y-o-y), 7% above ABGSCe. The deviation was mainly driven by better performance from Decommissioning & Radiation Protection Services (D&RPS) and Fuel & Materials.
EBIT was SEK 8. 0m (3. 5m), corresponding to an EBIT margin of 4.
9% (2. 3%) and above our forecast of SEK 1. 2m.
The deviation was mainly driven by a strong start to the year in D&RPS, a segment that usually faces a weaker H1 due to seasonality. We see the Q1 report as a strong start to 2021, and even though Studsvik earnings tend to fluctuate between quarters, we gained increase confidence in further margin improvements in the coming years. We think the margin improvement will be driven by growth in the F&MT segment, which currently has an order backlog of SEK 1bn and the group’s highest EBIT margins.
Raising our EBIT margin assumptions, mainly from D&RPS We raise our EBIT margins assumptions by 0. 7-0. 6pp for ‘21e-‘23e on the back of the Q1 report, mainly due to the impressive profitability in the D&RPS segment in a seasonally weak quarter.
We also make minor positive adjustments to the assumed EBIT margins in F&MT and Scandpower, and think it is positive that Studsvik has already hired a new CEO for Scandpower (Robert Whittle was appointed on 12 April). In total, this results in EBIT upgrades of 8-7% for ‘21e-‘23e. Waste retrieved from Forsmark, company claims no liability On April 8 Studsvik informed that roughly 2,800 S.
14 packages containing radioactive waste will be retrieved from Forsmark, as they may contain substances in larger quantities than is allowed. Roughly 1,700 of these packages were deposited when the Studsvik facilities were still owned by the Swedish state; the remainder were packaged by Studsvik Nuclear AB, and were to the firm’s knowledge handled correctly. As such, Studsvik cla.
