Saab interim report January-MarchQ1 2016 Q1 2017 Q1 2018 Q1 2019 Sales 294 539 447 591 0 100 200 300...
Transcript of Saab interim report January-MarchQ1 2016 Q1 2017 Q1 2018 Q1 2019 Sales 294 539 447 591 0 100 200 300...
Saab interim reportJanuary-March
Håkan Buskhe, President and CEOMagnus Örnberg, EVP and CFO
26 April, 2019
Highlights January-March 2019
• xxxxxxx
2
• Increase of working capital due to ongoing preparation of deliveries of
Gripen to Sweden and Brazil
• Saab estimates that the operational cash flow will be negative for the
full year, but on a better level than 2018
Strong organic growth
Improved operating income
Cash flow
• Organic growth of 8 per cent
• Dynamics strong growth driven by more deliveries
• IPS*, growth in several business units
• Aeronautics growth driven by production for deliveries to Sweden
and Brazil
• Execution of major projects progressing according to plan
• Productivity improvement in several business areas
• Dynamics improved operating margin due to higher utilisation
*Business Area Industrial Products and Services
Swedish submarine HMS Gotland during sea trials
Market opportunities
3
Gripen E
A26 Submarine
GlobalEye
Carl-Gustaf M4
C2S*
• In April, Saab was shortlisted as Combat System Provider for Finnish Squadron 2020 program
• Saab handed in proposal to Switzerland consisting of options for 30, and 40, Gripen E
• Saab handed in proposal to Finland in January, comprising of 64 Gripenaircraft
• Tender process for fighter aircraft in Canada and India on-going
• Tender process to replace the Walrus-class submarines in the Netherlands ongoing
*C2S = Command and Control Systems
0
2
4
6
8
Order bookings
Jan-Mar 2018 Jan-Mar 2019
Financial highlights, January-March 2019
4
0
2
4
6
8
10
Sales
Jan-Mar 2018 Jan-Mar 2019
447
591
0
200
400
600
800
Operating income
Jan-Mar 2018 Jan-Mar 2019
-2,211-2500
-2000
-1500
-1000
-500
0Operational cash flow
Jan-Mar 2018 Jan-Mar 2019
-1,923
BS
EK
BS
EK
MS
EK
MS
EK
7.88.56.1
4.5
EBIT-
margin,%7.05.8
First quarter development
5
MS
EK
MS
EK
Giraffe 1X
6,7907,586 7,766
8,496
0
2000
4000
6000
8000
10000
Q1 2016 Q1 2017 Q1 2018 Q1 2019
Sales
294
539
447
591
0
100
200
300
400
500
600
700
Q1 2016 Q1 2017 Q1 2018 Q1 2019
Operating income
EBIT
margin,% 7.1% 5.8%7.0%
5.8%4.3%
12%2.4% 9.4%
Cash flow development, Jan-Mar 2019
6
MSEK
2,603
1,388
-2,424
-1,923
-3000
-2000
-1000
0
1000
2000
3000
4000
2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
Operational cashflow
Estimated range for cash flow in period
Strategic focus areas 2019
Market
• Pursue focused market strategy and utilize
installed base to strengthen market position
• Technology investments imperative for creating
stronger market position
7
Re-sizing & Re-shaping
DirectionUpdate April 2019
• All re-sizing plans
implemented
• Focus portfolio
• More focused market
approach
• Higher degree of
digitalisation and
simplification of
functional processes
Performance
• Execution of major projects
• Continue implementation of re-sizing and re-
shaping initiatives
Innovation
• Forward thinking leadership enabler for
technology development
• Employee reduction
implemented;
consultancy reduction
on-going
• Portfolio analysis on-
going; civil business
in South Africa
divested
• Current review of
market org.
• New global HR-IT
environment
launched
Outlook 2019
Sales growth in 2019 is expected to be in
line with Saab’s long-term financial goal:
annual organic sales growth of 5 per cent.
The operating margin in 2019, excluding
material non-recurring items, is expected to
improve compared to 2018, bringing Saab a
further step closer to its financial goal: an
operating margin of 10 per cent.
8
9
Financial summary
Magnus Örnberg, EVP and CFO
Financial summary, January-March 2019
• Increase of small-sized order bookings by
33 per cent
• Sales increase by 9 per cent; organic growth 8
per cent
• Improved operating margin 7.0 (5,8) per cent
• Operational cash flow negative with Aeronautics
preparing for deliveries of Gripen to Sweden
and Brazil
• Net debt impacted by IFRS16 adjustment of
BSEK 2.2
10
MSEKJan-Mar
2019
Jan-Mar
2018Change,
%
Order Bookings 4,482 6,135 -26.9
Order Backlog* 97,401 105,712 -7.9
Sales 8,496 7,766 9.4
Operating Income 591 447 32.2
Operating margin, % 7,0 5,8
Net Income 397 251 58.2
Operational Cash Flow -1,923 -2,211
Free Cash Flow -2,137 -2,411
*Not including order bookings related to serial production of the TX trainer aircraft developed by Boeing and Saab for the U.S. Air Force. The
U.S. Airforce has ordered the first phase, the EMD = Engineering and Manufacturing Design, to be followed by production orders.
Order backlog duration
11
31 March 2019 Year End 2018 31 March 2018
2019: 22.2 2019: 28.0 2018: 20.7
2020: 21.6 2020: 20.6 2019: 21.8
2021: 17.2 2021: 18.1 2020: 17.7
2022: 14.8 2022: 13.3 2021: 17.1
After 2022: 21.6 After 2022: 22.2 After 2021: 28.4
Total: 97.4 Total: 102.2 Total: 105.7
Aeronautics46%
Dynamics14%
Surveillance15%
S&S10%
IPS9%
Kockums6%
Order backlog per Business Area
Sweden33%
Rest of Europe
12%North America7%
Latin America
35%
Asia9%
Africa1%
Australia etc3%
Order backlog per Region
BSEK
Order size distribution
0
0,5
1
1,5
2
2,5
3
3,5
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000January-March 2019
MS
EK
Small orders = <MSEK 100, Large orders = >MSEK 100
Book-to-bill ratio calculated as 12 months rolling12
73%
27%
Small order MSEK < 100
Medium-sized order MSEK 100-1,000
Large orders
Medium sized orders
Small orders
Small orders Large orders
Small orders = <MSEK 100, Medium sized orders = MSEK 100-1,000,
Large orders = >MSEK 1,000
• Small orders grew 33 per cent
• Adjustment of backlog with IPS, due to order
order cancellation related to Airbus A380
program* and currency adjustment
• One large order booked in first quarter 2018
in Aeronautics
0
500
1 000
1 500
2 000
Aeronautics Dynamics Surveillance S&S IPS Kockums
Order bookings
Jan-March 2018 Jan-March 2019
Order bookings per business areaM
SE
K
0
10
20
30
40
50
60
Aeronautics Dynamics Surveillance S&S IPS Kockums
Order backlog
31 March 2018 31 March 2019
BS
EK
13 *Saab delivers the wingframe for the A380 aircraft. Airbus recently announced that the A380 program will be ceased in 2021, earlier than previously planned.
**Not including order bookings related to serial production of the TX trainer aircraft developed by Boeing and Saab for the U.S. Air Force. The U.S. Airforce has ordered the first
phase, the EMD = Engineering and Manufacturing Design, to be followed by production orders.
**
• 9 per cent sales growth;
8 per cent organic growth
• Dynamics increased level of deliveries
• IPS saw increased sales within business
unit Aerostructures, which saw a high
delivery rate in the quarter
• Growth also driven by strong activity
level in major programs in business area
Aeronautics and Kockums
0
500
1 000
1 500
2 000
2 500
Aeronautics Dynamics Surveillance S&S IPS Kockums
Jan-Mar 2018 Jan-Mar 2019
Sales per business area
14
+4%
+32%
-3%
+1%
+13%
+7%
MS
EK
Operating income per business area
15
MS
EK
• Operating margin improvement as
productivity levels in several business
areas improved
• Higher level of deliveries in Dynamics –
higher utilization
• IPS operating margin strengthened due
to higher activity level in several areas
• Aeronautics saw increased activities in
the Gripen projects and lower T-X-spend
163
46
69
174
27
42
197
113
90
182
69
34
0
50
100
150
200
Aeronautics Dynamics Surveillance S&S IPS Kockums
Jan-Mar 2018 Jan-Mar 2019
Operating
margin,% 9.38.0 8.14.4 5.2 13.513.0 4.41.0 4.35.63.9 1.9
Cash flow development large project
16
Time
Development phase
Illustrative cashflow and working capital development in a large project
Cash in flow
Cash out flow (working capital build-up)
Delivery phase
-2 500
-2 000
-1 500
-1 000
-500
0
500
1 000
1 500
MS
EK
17
Operational Cash flowCash flow from operating activities before
changes in working capital: 1,127
Change in working capital:
Contract assets and liabilities -2,333
Inventories -230
Other current receivables 760
Other current liabilities -567
Provisions -50
-2,420
Cash flow from investing activities:
Intangible assets -358
Tangible assets -272
-630
Operational cash flow : -1,923
Cash flow
from
operations
Change in workingcapital
Investing activities
MSEK
Net debt, 31 December 2018 -1,460
Effects related to implementation of IFRS 16 (opening balance) -2,190
Cash flow from operating activities -1,366
Change in net pension obligation 300
Net investments -630
Other -36
Net debt, 31 March 2019 -5,382
Net pension obligation, 31 March 2019 3,799
Total interest-bearing assets, 31 March 2019 -524
Net debt excluding interest-bearing receivables and net pension
obligation
-2,107
35.4%Equity/Assets
ratio
152.1Equity per share
(SEK)
18
Financial position
19
IFRS 16 effects
MSEK
Jan-Mar
2019 incl.
IFRS16 Change
Jan-Mar
2019 excl.
IFRS16
Sales and other
operating income 8,514 - 8,514
COGS and OPEX* -7,595 107 -7,702
Depreciation and
amortisation -328 -96 -232
Operating income 591 11 580
Net financial items -81 -22 -59
Income before taxes 510 -11 521
Taxes -113 2 -115
Net income for the
period 397 -9 406
Total assets 57,986 2,200 55,786
Total equity 20,544 -9 20,553
Total liabilities 37,442 2,209 35,233
Giraffe AMB UK*COGS = Cost of goods sold, OPEX = Operating expenses
Focus 2019
Order intake
Project execution
Productivity improvement
Cash generation
Important information
This presentation may contain forward-looking statements which reflect Saab AB’s current view on future
events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”,
“believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future
development or trends, and which are not based on historical facts, are intended to identify forward-
looking statements. Forward-looking statements inherently involve both known and unknown risks and
uncertainties as they depend on future events and circumstances. Forward-looking statements do not
guarantee future results or development and the actual outcome could differ materially from the forward-
looking statements.