Studsvik: Easy comps in Q3e - ABG
This is a third party research report and does not necessarily reflect our views or values
* Report out on 4 November* Q3e sales of SEK 225m (+12% y-o-y), EBIT adj. SEK 14m (10m)* Higher expected corporate costs & eliminations; segment EBITs intact
Q3 expectationsWe expect Q3 sales of SEK 225m, +12% y-o-y (Decommissioning: -1% y-o-y, FM&WM: +32% y-o-y, Scandpower: +1% y-o-y). On EBIT adj. we estimate SEK 14m (10m) for a margin of 6.4%. For FM&WM, we expect some sequential softness due to summer shutdowns (we estimate 13.5% EBIT adj. margin vs. 16.2% in Q2'25), but we continue to anticipate strong demand across the segment. For Scandpower, we expect some licence and service sales, but its quarterly results remain volatile due to the lumpy timing of licence sales, with the business typically strongest in Q4. For Decommissioning, we expect an improvement q-o-q, as Swiss maintenance work scheduled for Q3 should lift activity. We see a modest recovery in the segment from the weak H1 into H2, though price pressure in competitive markets will likely limit margin upside.Estimate changes and outlookWe leave our '25e-'27e sales more or less unchanged but lower our '25e-'27e EBIT by 9-4%. Our revisions mainly stem from a higher expected rate of negative impact from corporate costs and eliminations, which we now estimate at SEK -31m for FY'25e vs. SEK -26m previously. We keep '25e-'27e EBIT for the business segments fairly intact.Positioned to benefit from global nuclear expansionLast week, Studsvik gave a presentation at our well-attended Nuclear Seminar at our Stockholm office. During the seminar, Studsvik highlighted the expansion of nuclear power in several geographies such as Japan, South Korea and the US. Although lead times are long, we expect Studsvik to benefit from the new wave of global investments in the nuclear field for many years to come. Following Studsvik's Q3 report, we will host a company presentation at our Stockholm office. The share has returned +25% L3M (vs. peers at -1%, OMXSALLS +3%) and is currently trading at 29x-22x '25e-'27e EV/EBIT.
Q3 expectationsWe expect Q3 sales of SEK 225m, +12% y-o-y (Decommissioning: -1% y-o-y, FM&WM: +32% y-o-y, Scandpower: +1% y-o-y). On EBIT adj. we estimate SEK 14m (10m) for a margin of 6.4%. For FM&WM, we expect some sequential softness due to summer shutdowns (we estimate 13.5% EBIT adj. margin vs. 16.2% in Q2'25), but we continue to anticipate strong demand across the segment. For Scandpower, we expect some licence and service sales, but its quarterly results remain volatile due to the lumpy timing of licence sales, with the business typically strongest in Q4. For Decommissioning, we expect an improvement q-o-q, as Swiss maintenance work scheduled for Q3 should lift activity. We see a modest recovery in the segment from the weak H1 into H2, though price pressure in competitive markets will likely limit margin upside.Estimate changes and outlookWe leave our '25e-'27e sales more or less unchanged but lower our '25e-'27e EBIT by 9-4%. Our revisions mainly stem from a higher expected rate of negative impact from corporate costs and eliminations, which we now estimate at SEK -31m for FY'25e vs. SEK -26m previously. We keep '25e-'27e EBIT for the business segments fairly intact.Positioned to benefit from global nuclear expansionLast week, Studsvik gave a presentation at our well-attended Nuclear Seminar at our Stockholm office. During the seminar, Studsvik highlighted the expansion of nuclear power in several geographies such as Japan, South Korea and the US. Although lead times are long, we expect Studsvik to benefit from the new wave of global investments in the nuclear field for many years to come. Following Studsvik's Q3 report, we will host a company presentation at our Stockholm office. The share has returned +25% L3M (vs. peers at -1%, OMXSALLS +3%) and is currently trading at 29x-22x '25e-'27e EV/EBIT.