Studsvik: Positive signs in Q4 - ABG
Deal with Westinghouse important for Waste Mgmt.First order for SMRs within the F&MT segmentStrong FCF from release of working capitalQ4: Adj. EBIT margin of 14.7% (7.3%)Studsvik reported a solid set of Q4 numbers. Sales were down 9% y-o-y, but this was expected as Q4'21 benefited from a sale of land and a one-time licence sale in Waste Management. Q4 sales were 3% above ABGSce with the main deviation coming from Waste Management. Adj. EBIT was SEK 33.5m (SEK 18.5m), which was better than expected with ABGSCe at SEK 25m. Again, the deviation is explained by the licence sale in Waste Management. Scandpower and Decommissioning were also above our forecast, but that was offset by a lower EBIT in Fuel and Material Technology (F&MT). Free cash flow was strong in the quarter at SEK 63m (SEK 35m), of which SEK 35m stems from a release in working capital.Positive revisions, '23e EBIT up 4%The company struck a long-term deal with Westinghouse in the quarter regarding its development of a disposal facility for contaminated metal waste in Great Britain, based on Studsvik's sustainable technology. We think this is an important milestone for the Waste Management business area and creates a platform for it to grow from. Our estimate revisions mainly stem from our renewed optimism for Waste Management, and it leads to a positive revision for group '23e EBIT of 4%. We also raise our '23e EBIT for Decommissioning slightly, but that is offset by the F&MT business area.Board proposes unchanged dividend at SEK 2 per shareWe note also that Studsvik received its first order for a small and modular reactor (SMR) from a new customer in the quarter. We think this is the most likely benefit from the more positive outlook of the nuclear industry that we have seen of late. The board proposed a dividend of SEK 2.00 per share and the company trades at an EV/EBIT of 11x on our revised numbers for '23e.Läs mer på ABG Sundal Collier
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