Q4 and year-end 2007 presentation February 14, 2008
Highlights 2007 High growth net sales up by 18 per cent Sustained strong growth in UK Operating profit slightly lower than previous year Well filled order books in most segments at end of 2007 Expansion in consulting services two strategic acquisitions Member in consortia that is preferred bidder to manage the UK low level waste repository Licenses obtained for facility for treatment of metallic waste in UK Agreement with WCS for storage of nuclear waste strengthens Studsvik s market position in the USA Software delivered to Mitsubishi Heavy Industries for licensing of new advanced reactor design
Financial Targets and Outcome Target 4Q 2007 2007 Organic growth 5 % 26 % 18 % EBIT margin 8 % 4.1 % 4.7 % Equity-asset ratio 40 % 42.5 % 42.5 % Dividend (policy/proposed) 30 % of EAT SEK 2.00 /share
Key Figures and Ratios Q4-07 Q4-06 2007 2006 Net sales for the Group, SEKm 370.6 329.1 1,314.7 1,219.6 Operating profit, SEKm 15.3 21.2 62.1 71.3 Profit after net financial items, SEKm 10.0 24.2 46.0 57.1 Earnings per share, SEK 1.58 1.62 5.65 4.24 Operating margin, % 4.1 6.4 4.7 5.8 Equity-assets ratio, % 42.5 41.2 Equity per share, SEK 69.58 69.00 69.58 67.97 Average number of Employees 1,141 1,279
Business area development SEKm 1400 1200 1000 800 600 Operating Efficiency Service and Maintenance Decommissioning Waste Treatment 400 200 0 2005 2006 2007
New reporting structure Five operating segments Sweden United Kingdom Germany USA Global Services Business area names remain to describe customer offering Waste treatment Decommissioning Operating Efficiency Engineering & Services (formerly Service & Maintenance)
Five new Operating Segments Sweden Waste treatment performed in the facilities in Sweden Customers in Europe; Sweden, Germany and neighboring countries, UK United Kingdom Waste Treatment and Decommissioning in the United Kingdom Germany Decommissioning and Engineering & Services in Germany and neighboring countries USA Waste Treatment business carried out at the Group s facilities in the USA Customers in the USA and Canada Global Services Operating Efficiency; materials technology and fuel optimization software Global customer base, business in many countries
Segment sales distribution 2006/2007 SEKm 1400 1200 1000 800 600 Global Services USA Germany UK Sweden 400 200 0 2006 2007
Sweden (Waste treatment in Studsvik facility for European customers) Performance 2007 Low production at beginning of year and incident in Q3 Strong order intake Treatment of large components on commercial terms Focus 2008 High availability in waste treatment facilities Launch new product offerings including high force compaction, cable shredding and incineration of niche waste streams
United Kingdom (Decommissioning and Waste treatment) Performance 2007 Very strong and profitable growth Acquisition of Alpha Engineering Focus 2008 Continued growth Commission metallic waste treatment facility in Workington UK Low Level Waste Repository Management contract Development of national low level waste strategy
Germany (Decommissioning and Engineering & Services) Performance 2007 Strengthened market position High capacity utilization in Engineering & Services Good order intake for Decommissioning Acquisition of engineering company Dr Fary Focus 2008 Growth in higher value added segments of the market
USA (Waste Treatment including logistics) Performance 2007 Management replaced in early spring Good operational and financial performance for Erwin facility Stable revenues but depressed margins for Memphis operations Increased costs to meet market challenges Teaming agreement with Waste Control Specialists (WCS) Focus 2008 Launch attractive customer solutions to counter-act the closing of Barnwell B/C waste repository Improve profitability for Memphis operations
Global Services (In-core fuel management software and materials technology) Performance 2007 Solid performance and strong market demand for Software business Poor profitability due to product mix for Materials Technology Good order intake in both areas Focus 2008 New product launches for Software Business Improved product mix for Materials including post-irradiation examinations in co-operation with IFE in Halden, Norway
Net sales per Operating Segment SEKm Q4-07 Q4-06 2007 2006 Sweden 43.6 36.0 135.4 126.2 United Kingdom 38.9 13.9 129.1 30.9 Germany 84.6 81.2 341.3 308.7 USA 94.3 106.6 427.7 364.3 Global Services 52.8 43.7 178.8 167.7
Operating Profit per Operating Segment SEKm Q4-07 Q4-06 2007 2006 Sweden 13.5 12.3 28.2 26.3 United Kingdom Germany 0.9 4.1-2.5 4.4 3.0 25.3-11.3 25.8 USA -4.6-5.7 6.3 11.4 Global Services 8.8 17.4 14.4 36.4
Operating Margin per Operating Segment % Target Q4-07 Q4-06 2007 2006 Sweden 20 31.0 34.2 20.8 20.8 United Kingdom Germany USA Global Services 10 9 10 15 2.3 4.8-4.9 16.7-18.0 5.4-5.3 39.8 2.3 7.4 1.5 8.1-36.6 8.4 3.1 21.7
Market and Trends Global nuclear renaissance Modernization of existing commercial reactors Decommissioning of older plants Clean up of legacy from research and weapons programs
Nuclear Power Renaissance 34 reactors currently under construction world-wide 150-300 new plants expected by 2030 Twenty licenses are being awarded in the US UK parliament opens up for new-build of six reactors New low level waste policy adopted in 2007 Swedish modernization program to increase output by 18 % by 2012
Nuclear industry trends Sustainable approach to lifecycle of new plants Increasingly complex licensing processes including plans for waste and decommissioning Increasing demand for consulting services Waste solutions critical to growth Studsvik obtained the first new nuclear license in the UK for 20 years
New financial targets (Three year time horizon) Organic growth > 10 % EBIT margin > 8 % Debt/equity ratio > 40 %
Operational focus in 2008 UK Continued rapid and profitable growth Commissioning of metallic waste treatment facility and management of low level waste repository US Improved profitability in Memphis and logistics business Develop attractive solutions for treatment and storage of B&C waste General Focus on order intake Minimize down-time in facilities
Outlook Market developments will create an environment favourable to good organic growth in most segments of the business in 2008.
The Studsvik Share
Major Shareholders Number Shares and December 31, 2007 of Shares votes, % Karinen Family 1 589 012 19,3% Briban Invest AB 1 283 492 15,6% Dresdner Bank 714 561 8,7% Goldman Sachs International Ltd 472 750 5,8% Invus Investment AB 184 800 2,2% SEB Sverigefond Småbolag 157 200 1,9% Citibank NA London 154 268 1,9% Morgan Stanley & Co Inc 149 750 1,8% SEB Sverige Småbolag Chans/Risk 145 500 1,8% The Northern Trust Co 133 550 1,6% Total, 10 largest shareholders 4 984 883 60,7% Other Shareholders 3 233 728 39,3% Total 8 218 611 100,0%