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Third party research

Studsvik: Q3 softer than expected - ABG

Studsvik

This is a third party research report and does not necessarily reflect our views or values

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* Sales -9% & EBIT adj. SEK 7m below vs. ABGSCe* EBIT impacted by SEK +6 m one-off gain from Q3’24 fraud* Underlying customer demand intact, despite a softer quarterQ3 resultsStudsvik reported softer than expected Q3 results. Sales grew +2% y-o-y but were 9% below our estimate. EBIT adj. was SEK 7.2m (-50% vs. ABGSCe), for a margin of 3.5% (4.8%), 2.9pp below our estimate. EBIT included a one-off gain of SEK +6m relating to the recovery of the fraud that occurred in Q3’24 within Scandpower, compared with a -SEK 10.1 m adjustment in Q3’24 related to the original fraud loss. In FMWT, results came in below expectations but showed a clear y-o-y improvement, indicating a positive trend in the segment. Scandpower was affected by seasonal variations, which are typically difficult to forecast, though the company remains confident in the underlying demand.Estimate changes and outlookThe Q3 numbers in isolation imply EBIT adj. comes down 9%. Despite a softer quarter, our long-term view of the company remains unchanged. The company remains particularly optimistic about its FMWT segment, highlighting momentum in production and a new organisation in place. There is also increasing interest from companies developing SMRs seeking Studsvik's expertise in materials and fuel testing.ValuationOver the past three months, the share has returned +55%, compared to the +7% of the OMX Stockholm Allshare. The share is currently trading at 52x-33x '25e-'27e P/E.
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