Good day, and thank you for standing by, and welcome to the Studsvik Year-End Report 2021 conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question, you will need to press star and one on your telephone and wait for an automated message stating your line is open. Please be advised that today's conference is being recorded, and I would like to hand the conference now to your first speaker today, Ms. Camilla Hoflund. Please go ahead, ma'am. Thank you. Ladies and gentlemen, welcome to the Studsvik Year-End Report 2021. Let me introduce myself. My name is Camilla Hoflund. I am the CEO of Studsvik, and with me today on the call, I have Niklas Karlsson, the CFO for Studsvik. We will present the results of Studsvik Group performance and financials for the fourth quarter and full year. We are pleased to start today's presentation by informing you that Studsvik Group delivered a very strong result in the quarter and the full year. Next slide, please. Let me start with a brief introduction of Studsvik. Studsvik is listed on the Nasdaq Stockholm Small Cap with a revenue in 2021 of almost SEK 800 million. Studsvik has 520 employees based in Sweden, Germany, U.S., U.K., Switzerland, Japan, and China. Studsvik is an independent organization innovating nuclear sustainability on a global market with a strong established international brand. Studsvik develops safe and efficient solutions to customers within the nuclear field, from new reactor build and operational support for existing reactors to decommissioning of nuclear power plants, including radioactive waste solutions. Our customers can be found in the whole industry, ranging from fuel vendors producing the fuel for the nuclear plant, the nuclear power plant owners and operators, public agencies, research centers, and other nuclear facilities associated with the nuclear power industry. Additionally, we are expanding beyond nuclear power into the medical isotope production by innovating with new technology and technical experience from the nuclear power industry. We operate an automated production line for nuclear isotopes in our facilities at the Studsvik site in Sweden. Next slide, please. 2021 was a strong close of the year. In 2021, and especially quarter four, the organization performed on a very high level by delivering on the high order backlog and having a high utilization throughout the organization. The two largest business areas, Fuel and Materials Technology and Decommissioning and Radiation Protection Services, contributed to a net sales growth of 10%. The profitability and operating margin improved within the group. In 2021, Studsvik managed to achieve all three group financial targets, meaning the growth of 10%, operating margin of 8%, and a solidity above 40%. Next slide, please. In summary, the financials for the group shows an improvement both for the quarter and full year. Also, when excluding the sale of land in quarter three of about SEK 10 million, the operating profit and margin have improved for the full year. Some strong contributors for the period were Fuel and Materials Technology that delivered with an increased capacity in the hot cell facility and Waste Management Technology that renegotiated a license agreement with a profit impact of about SEK 20 million. Scandpower improved in the quarter by closing of license sale. Next slide, please. The business area Decommissioning and Radiation Protection Services delivered a stable performance with improved operating margins for the full year. In the quarter, the profit decreased compared to last year, mainly due to increased non-recurring costs and organizational preparations in connection with the last reactors being shut down in Germany. The market shift in Germany to more decommissioning services and less traditional decontamination services of today will take some years. At present, Studsvik is adapting the organization and will be prepared for the switch in the upcoming years. A strategic pillar has been added to the business area to point out the dismantling area will increase in focus and priority for us. Studsvik has also expanded the services in Switzerland, and for the future, we also plan to expand in Belgium and nearby countries, where we already have long-term customer relations. Next slide, please. The business area, Fuel and Materials Technology, delivers an all-time high result in the quarter and for the full year. The business area has delivered on the strong order backlog with increased capacity in the facilities. The transport project performance contributed to higher net sales in the quarter. The successful transport of fuel from South Korea is the first of a kind and has had international publicity within the industry. In the fourth quarter, the business area produced one set of medical isotopes, the second set for 2021, and Sutro has now received the delivery of irradiated pellets as planned, so the production of medical isotopes will ramp up during 2022. The business area is expected to continue to deliver with increased capacity also in the beginning of 2022. However, the quarter four had a very high performance throughout the operation and on top of that, international transports were performed. Next slide, please. The business area Scandpower improved the quarter by closing license sales. For a full year, the business area dropped in the net sales compared to 2020. The business area did not close any major license sales last year, 2021, and there is a delay of the planned expansion on the Chinese markets and new regions such as Eastern Europe and, for example, Ukraine. A new strategic pillar for the business area is to develop the portfolio, including bringing on new developments and phasing out older software versions. In addition, the current business model will also be reviewed to improve profitability. The business area continues with long-term R&D activities to apply Scandpower products in new technology reactor types, such as small modular reactors, SMRs, and expanding the capabilities into advanced reactor design. Next slide, please. The business area Waste Management Technology renegotiated a license agreement and improved the profits in the quarter by SEK 20 million. The business area has ongoing commercial discussions of license opportunities with potential customers such as nuclear power utilities and other nuclear facility operators in both North America and Europe. The business area continues to pursue the value of applying Studsvik technologies, treating problematic radioactive waste, volume reductions and cost savings, as well as meeting social and environmental aspects. Our waste technologies are competitive options for our customers, supporting environmentally safe and cost-efficient solutions for these problematic wastes. Next slide, please. For the group, the financial numbers have improved year-on-year. In the quarter, the investment level has increased and is impacting the free cash flow. The investments are supporting the expansions within Fuel and Materials Technology and necessary infrastructure at the Studsvik site. Next slide, please. The outlook of the business areas. The business area, Decommissioning and Radiation Protection Services, is prepared for the new situation where Germany is closing the last reactors in 2022. However, we foresee a slower start of this year as the market conditions are changing. We have revisions planned in Switzerland, and they will start later this year. For Fuel and Materials Technology, it's expected to continue to deliver with increased capacity. However, we are not expecting to be on Q4 levels as there are no planned transports to be performed in the beginning of the year. Scandpower is focusing on closing license sales and to review the business model, including commercial conditions of the software portfolio. For Waste Management Technology, the focus is to close a new license sale. Next slide, please. The group financial targets. After some years of continuous improvements of the financial results, 2021, the group achieved all three targets. The growth, 10%, operating margin, 8%, and solidity, above 40%. The board of directors has adopted a new financial target for the group, that is an average annual organic growth of 6%, an operating margin of 12%, and also a solidity, of at least 40%. The targets are important. However, even more important is to continue our development of continuous long-term improvement. Next slide, please. Thank you very much for listening to Studsvik Q4 report and full-year report. Now I hand over to the operator to open up for the Q&A session. Thank you. Okay, ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Okay, right now we have one question. We will now take our first question now, and please go ahead. Your line is now open. Hi, this is Stefan from ABG. I just want to connect to your new financial targets. You say that you—firstly, on growth, you say that you aim to grow 6% on an annual basis. Can you just break down that a little bit more in terms of business area contribution and so on and what your thoughts are there? Yes. Hello, Stefan. Yes, and please see that we are pointing out it's an organic growth to begin with 6%. Yeah. For sure, I think we can all agree that the expectations are high for Fuel and Materials Technology and for Decommissioning and Radiation Protection Services. I think there is a little bit more. We have grown the two last years, and now I think we are getting to a level where I think it's difficult to continue to grow with the same increase as we have had in the past. I think for the other two business areas, it's of course we have targets, and we need to show proof that we will be able to grow. The main engine for the growth will be Fuel and Materials Technology. Thank you. Also on the operating margin, it's an increase of 4 percentage points. The target, where do you see that this improvement will stem from if you talk about business areas again? I think it follow very much the similar answer as for the growth. I think expectation of course is within Fuel and Materials Technology, and we're also seeing in 2021 a nice increase. For sure, all the business areas have to focus on profitability and to increase profitability. The main expectations are in Fuel and Materials with the growth coming. Thank you. I would like to have some questions regarding the quarter. If we look at decommissioning, for example, can you quantify the extra cost that you took in the quarter and also, how severe this change in conditions will be in the beginning of 2022 here? Yeah. We don't share the details of exactly the extra cost and the quantity of the extra cost, but for sure it's connected with people and cost around staffing, et cetera. Like I told you, I think we are in a very good, stable phase within the business area, and we have customer contracts. Always when you have bigger changes coming into the market, I think it's fair to say that there are always uncertainties coming up in that perspective. Perfect. You also mentioned that you see an expansion to Belgium. Can you maybe speak about long term, what is the potential maybe in terms of employees in that country that you see that the opportunity that you have there? I think the main expansion area will actually be in shorter term will be Switzerland. You know, we have people from Germany working in Switzerland during both the outages in the nuclear power plant, but also in the first decommissioning of one of the reactors in Switzerland. That's an area where we definitely in shorter term will expand and continue to expand. For Belgium, we have also already now doing outage services, but we will also look into more in the decommissioning and start to understand their plans. I think that will be a little bit more into the future, a few years from now, maybe. Okay, perfect. And then also on Scandpower, we saw a very good profitability level here in Q4, and you mentioned that it was driven by a license sale. But have you been able to perform any, you know, internal efficiencies in this short period that you have a new CEO in place there? Or was it purely driven by the license sale? No, I think it's both, but the main part is driven by license sales. The new CEO for sure are looking into to improving profitability and cost structure as well. However, I think those kind of activities to identify new development areas, but also to see how we can do things more efficient, will take some longer time. Okay, perfect. My last question, sorry for many questions here on the call, but it's regarding this renegotiated license agreement in the waste management area. Obviously, you had a positive effect here in Q4, but how will it affect future business? Will you have a higher contribution from future license sales, or how will it pan out? I think for this specific renegotiation we had the impact in Q4, and we have no further impact for the future for this specific customer deal. Of course, for looking into the future for the business area, it is like mentioned that we have several negotiations ongoing with customers and commercial discussions. I think this is a good reference to show that this is something valuable for our customer and that our technologies are valuable. I think that might support in a nice way for the future. Okay. Thank you very much for taking all my questions. Thank you. Okay. Once again, if you wish to ask a question, please press star and one. Okay. We will now take our next question. And, uh, please go ahead. Your line is now open. All right. Camilla, it's Adrian Bignell from Quaero. Hello. Hi. I've got just a couple of questions. Just coming back to the medical isotope business, what kind of visibility—'cause you obviously talk about now getting ready to ramp it up in 2022. What kind of visibility do you have in the business in terms of your clients telling you how much demand they're gonna have this year? Or is it very much a kind of slow ramp up and see how you go? I think this is never a quick ramp up, to be honest to say, because of the character of the things we are dealing with. Then, of course, I cannot give any details of exactly how we are planning with the customer. I think it would be like a smooth ramp up, and we want to have also a smooth ramp up because that's very suitable for our other operations in the facilities. Okay. Is it just one client in medical isotopes? What do you think- At- Will it remain one client? Will you be able to find new clients as the year goes on? At the moment, it's one client and one contract that we have also press released in the past. For sure, we already have discussions and are looking into the future of expanding that. Exactly how that's going to be, it's nothing I can share at the moment. Okay. Sorry, just on the Scandpower division, sales fell away in the U.S. Why is that? In terms of the business going forward, is it going to remain on a license sale and maintenance business, or will it go to a SaaS business model? If I start with the last question, I think we have to be adaptable, and we are very flexible because it also depends on how it is possible with the business model for the customers. Because some require it might be some difficult with the SaaS model, let's say, for some of the customers. But we are definitely flexible and open for that as well. We can see that it seems to be a trend to be a little bit more into lease, meaning it's reoccurring rather than license. We have both model, and we continue with both models. Then in U.S., we had a little bit of a COVID impact that made it a little bit more difficult to do what we traditionally do, interactions and meeting face-to-face with our customers. We still have opportunities for sure in U.S., but they are a little bit postponed due to. Actually, this business area has a little bit impact of the COVID situation. We could expect 2022 to be a little bit of a recovery in the U.S. as you get back to face-to-face contact? I cannot share any specifics on different regions. Unfortunately, Adrian, I can't really answer your question to that. Okay. Maybe just talking on the waste division. Is it in terms of can you give us a little bit of kinda color in terms of are you negotiating with a greater number of people at the moment, getting closer to end discussions? Or is it still very much kind of hard to predict how 2022 will pan out? We have a number of customers, and they are, of course, these kind of specific things that we're talking about, waste technologies, are very dedicated customers. Of course, it's difficult to assess the speed of the discussions and if we are going to be 100% successful. We have, over a longer period, discussed with a handful of customers that we have on the list. Okay. I mean, maybe just to give, can you say that you're more optimistic than you were six months ago in terms of closing deals, or is it you can't say? For sure, we are optimistic of closing a license deal in Waste Management Technology. Otherwise, we wouldn't believe in the business area. Yeah. Okay. Maybe, sorry, my last question comes to the balance sheet and solidity. You’ve already hit your target ratio of 40%, haven’t you? Yes. Yet you still only have a payout ratio of 30% for dividend. Why do you, I mean, it seems to me there aren't many M&A opportunities out there, so why can't you raise the dividend further? I know that's really a board decision, but. Yeah. Exactly, Adrian. It's a board of directors decision, and I'm sorry, I can't comment on that for you or anyone else, by the way. Okay. Are you getting much sort of feedback from existing shareholders to raise the dividend or is that a common discussion point? Adrian, I think that is a discussion within the boardroom. Sorry for that. Well, then maybe the subsidiary question on the M&A. Do you see anything sort of cropping up in 2022 or is it unlikely? I don't give any forecasting on that. You know, of course, we are always having M&A on the agenda, but I don't share anything at the moment. Okay. Okay, thanks very much. Thank you very much. Bye-bye. Okay. We will now take our next question. Okay, please go ahead. Your line is now open. Good morning. This is Marc St. John Webb just commenting on Adrian's questions, but specifically on the nuclear business. Just trying to get an idea on your decommissioning business. You were talking about Germany closing its last reactor this year, and therefore, we could expect a sort of a slow start to the year. Could you help us understand the dynamics of the decommissioning business and of the rest of the business? What happens in the years after the final closure of a plant? What business can you still do, and over the next few years in the market, which is actually closed, and you're saying that sort of Switzerland is going to continue closing. Just to get an impression whether, you know, all your staff in Germany will continually be busy over the next years. Second question, this morning, we have in France, we have Emmanuel Macron that's gonna be announcing the launch of 14 EPRs, which is absolutely huge. Admittedly, it's gonna be over the next few decades, but there will also be the announcement of quite a number of SMRs, which means that the French market is gonna be very dynamic. I noticed that you're doing business in Switzerland, you're talking about increasing Belgium. Can you just remind us, one, if the French market remains completely closed to you, or you will try and benefit a little bit from the huge boom we're gonna see in France. Secondly, and this is looking out a long way out, but, in the environment when the world is starting to invest in nuclear a lot more, how will it affect the various divisions of Studsvik looking five or 10 years out? Thank you. Thank you very much for very comprehensive questions, and I will do my best to answer them. When it comes to Decommissioning and Radiation Protection Services, I want to think that in principle, all of the things we have been doing when the reactors was in operation need to be done or similar resources and competences you need to have even in the closing phase. However, when moving from reactor operation to closing, there might be some authority papers that need to be in place and the customer organizations need to be prepared. That might be a little bit take some time to find all these pieces and to make sure that we can continue with the work. For sure, there will be many, many years of work, and there is a huge demand also in Germany to increase in this dismantling phase, decommissioning phase that is after the reactor operation. When it comes to Switzerland, they have reactors, and we'll continue with life extension program. They will continue both with the reactor operation, but they also have the first reactor that has started the decommissioning activities. For our people in the decommissioning, I will foresee a very, very long time and many, many years of work that is upcoming. Into the SMR and the French market, we are very positive to also take the news from the French activities to increase the nuclear power and to keep the nuclear power. In general, we are always looking into markets that have those approaches, either building or decommissioning, of course. Today, we have some activities with the French market and French customers, mainly in our international programs that are joint program, but we have the connection. For sure, we are very interested and already looking into how can we enter the French market as usually it might be a little bit tricky because it's very much closed into the French aspects. But we will definitely do our efforts to increase our activities on the French market and also in the longer term on the SMR application. Your third question about people investing, I think that's very good and nuclear and we know the taxonomy is up in the discussions, too. For sure, we see that if our customers will increase activity, we are quite sure that that will be very positive for Studsvik in all business areas. Because already today, when you are building new reactors, you need to take into consideration the waste, the waste plants, technologies for handling the waste. You might be aware that Studsvik have the different business areas are covering very much different cycles of the reactor lifetime. I think we have a good leverage in many of the business areas looking into the future and investing in more nuclear. Thank you. Thank you very much. If I could just add an extra question to that. In France, again, the thought is that all of this is gonna be for the 2030s and 2040s. It's still far ahead in terms of actually generating extra power. In the meantime, there's gonna be a big rise in demand of power from electric vehicles, et cetera. There's just not the nuclear capacity out there, particularly with the programmed closures. There's talk of stopping the closures, renovating and life extension. Can you help us understand in the environment of renovation and life extension how does Studsvik play in that? Yes. For the life extension, it is mainly with the support of Fuel and Materials Technology and partly Scandpower software, where we are doing some R&D and international program assessing the material that you want to prolong the lifetime for. We are not performing people work with really life extension part, if you understand. The decommissioning is a different area. We for sure have R&D activities and also testing capabilities, analysis, and software that can support those kind of questions. Thank you. Great. Thank you very much. Thank you. Okay. Once again, if you wish to ask a question, please press star and one. Okay, ma'am, no questions at the moment. Please continue. Thank you, ladies and gentlemen. It's been a pleasure presenting the Studsvik full year report for you, and looking forward to do the next presentation in quarter one. Thank you. Okay. That does conclude our conference for today. Thank you for participating. You may all disconnect. Speakers, please stand by.