Studsvik: Continued growth ahead - ABG
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Studsvik: Continued growth ahead - ABG

Q2 expectations
Studsvik will report its Q2 on 22 July, and we forecast sales of SEK 246m, +5% y-o-y (Decommissioning +5%, FMWT -0.2%, Scandpower +5%). On EBIT we forecast SEK 16m (14m). We expect the cost savings programme in FWMT to continue to boost profitability, after the temporary dip in H2'24, and we estimate EBIT of SEK 12m for a margin of 12% vs. 8% in '24. For Decommissioning, we think price pressure from competitors will continue to weigh on margins and we expect slightly lower margins y-o-y (6.4% vs. 7.1% in '24). For Scandpower, which tends to be more cyclical, we expect a softer EBIT of SEK 3m (5m).

Estimate changes
We have made only minor adjustments to '25e-'27e sales and EBIT ahead of the report, but we have lowered EPS for '25e-'27e by 17-11%, mainly due to a higher assumed tax rate. We forecast continued margin improvements driven by improved internal efficiency and streamlining, and for '25e-'27e we expect sales and EBIT adj. to grow 6-3% and 60-10%, respectively.

Valuation
Studsvik is strategically well-positioned in the nuclear value chain, particularly as more countries turn to nuclear energy as a key component of their sustainable energy strategies. We maintain a positive outlook on FWMT and Scandpower, while adopting a more cautious stance on Decommissioning due to increasingly challenging market conditions. That said, we view the acquisitions of Extrem Borr and Sågteknik favourably, as they could potentially unlock new business opportunities in Sweden. The share has returned +79% L3M (vs. peers at +21%, OMXSALLS 8%) and is currently trading at 22x-17x '25e-'27e EV/EBIT.
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