Saab interim report January-March2018 · • Saab has to become even more agile and focus on...

Saab interim reportJanuary-March 2018

Håkan Buskhe, President and CEOMagnus Örnberg, EVP and CFO

26 April, 2018

Market and technology development

2

• Geopolitical tensions increasing

• Saab has to become even more agile and focus on shortening lead-times

• Adaptable technology crucial

Highlights January-March 2018

• Important milestone; first flight of GlobalEye*

• Strong order intake with importantmedium-sized orders

• Finland selected Saab as one of the major suppliers to the Finnish Navy Squadron2000 Mid-Life Upgrade programme• Including deliveries of New Lightweight

Torpedo

• Gripen development and operationalsupport order for 2018-2020

3

*New generation of Airborne Early Warning & Control system

GlobalEye

02468

1012

Order bookings

Jan-March 2017 Jan-March 2018

Financial highlights, January-March 2018

4

020406080

100120

Order backlog


539447

0100200300400500600

Operating income


986

-3000

-2000

-1000

0

1000

2000

Operational cash flow


-2,211

BSEK

BSEK

MSE

K

MSE

K

109.9 105.79.7

6.1

Order booking value from major orders received

EBIT-margin,% 5.87.1

Project execution keySaab currently has 4 major developmentprojects in the order backlog:

• Gripen E to Sweden Order received in 2013 with final delivery 2026.

• Gripen NG to BrazilOrder received in 2015 with final delivery 2024.

• Submarine A26Order received in 2015 with final delivery 2024.

• GlobalEye to the United Arab Emirates Order received in 2015.

5

GlobalEye

Strong market position for Gripen

• High interest in Gripen world-wide• Exceeds the requirements of modern air

forces• Highly capable, multi-role and cost-

efficient• Available, reliable and proven• Increased speed of investment in system

in order to prepare for future business opportunities

6

Gripen equipped with RBS15 Air-to-Surface anti-ship missile

Gripen E: The latest and most modern fighter aircraftsystem under development in Europe today

Gripen is operated by 6 nations, on 3 continents

Development for future needs

7

• Saab partner in EU unmanned maritimesituational awareness project, OCEAN2020

• Saab inaugurated a new developmentcentre in Finland

• Saab Digital Air Traffic Solutions and EntryPoint North LOI* for strategic partnership

• Strategic collaboration agreement signedwith University of Lund, Sweden

• Strong focus on Cyber security

* LOI = Letter of Intent

Sales growth in 2018 is expectedto be in line with Saab’s long-term financial goal: annual organicsales growth of 5 per cent.

The operating margin in 2018, excluding material non-recurringitems, is expected to improvecompared to 2017, bringing Saab a further step closer to its financialgoal: an operating margin of 10 per cent.

8

Outlook

The T-X advanced trainer aircraft, developed in partnership with Boeing

9

Financial summary

Magnus Örnberg, EVP and CFO

Financial summary, January-March 2018

• Order intake of medium-sized orders continued strong • Sales increased organically by 2 per cent• First quarter 2017 exceptionally strong due to large orders

received• Operating margin at stable level of 5.8 per cent• Fewer deliveries and a changed product mix compared to

2017 as well as a changed project margin in a few smaller projects in 2018

• Financial net impacted by exchange rate fluctuations in market valuation of tender portfolio

• Operational cash flow in line with plan, impacted by build-up of working capital

• Equity/asset ratio strong, above 30 per cent

10

MSEKJan-

March 2018

Jan-March2017

Change, %

Order Bookings 6,135 9,701 -37

Order Backlog 105,712 109,884 -4

Sales 7,766 7,586 2

Operating Income 447 539 -17

operating margin, % 5.8 7.1

Net Income 251 396 -37

Operational Cash Flow -2,211 986

Free Cash Flow -2,411 897

Order backlog duration

11

31 March 2018 Year End 2017 31 March 2017 2018: 20.7 2018: 25.3 2017: 20.1

2019: 21.8 2019: 20.0 2018: 20.2

2020: 17.7 2020: 17.0 2019: 15.2

2021: 17.1 2021: 17.0 2020: 15.5

After 2021: 28.4 After 2021: 27.8 After 2020: 38.9

Total: 105.7 Total: 107.2 Total: 109.9

Aeronautics46%

Dynamics11%

Surveillance14%

S&S11%

IPS10%

Kockums8%

Order backlog per Business Area

Sweden37%

Rest of Europe

10%North America4%

Latin America

34%

Asia11%

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

50 000

Small orders* Large orders Book-to-bill ratio**

60%

40%

January-March 2018

MSE

K

Large orders

*Small orders = <MSEK 100**Book-to-bill ratio calculated as 12 months rolling

Small orders

12

• Order bookings at good level, consideringlarge orders in 2017

• Good increase in order bookings of medium-sized orders (above MSEK 100 in size)

• Order bookings for small orders stable(below MSEK 100 in size)

• Major order received for operational and development support for Gripen from Sweden

• Order backlog continued strong

0

1 000

2 000

3 000

4 000

5 000

Aeronautics Dynamics Surveillance S&S IPS Kockums

Order bookings


Order bookings per business area

MSE

K

0

10

20

30

40

50

60


Order backlog

31 March 2017 31 March 2018

BSEK

Order intake in January – March 2017:Dynamics – Order for the development and production of the next generation anti-ship missile system to Sweden, BSEK 3.2Surveillance and Support and Services – an order within the Airborne Early Warningand Control segment (AEW&C), BSEK 2

13

• Sales, 2 per cent organic growth

• First quarter 2017 had exceptionallystrong sales due to 2 major orders

• Growth in 2018 driven by strong growthin Gripen as well as airbornesurveillance operations

• Dynamics had fewer deliveries in the period

• Support and Services saw strong in firstquarter 2017 due to a large order

0

500

1 000

1 500

2 000

2 500



Sales per business area

14

+22%

-8%

+24%-21%

+1%

+10%

MSE

K

Operating income per business area

15

MSE

K

• Operating margin at 5.8 per cent

• Aeronautics good sales increase and lower T-X-spend

• Fewer deliveries in Dynamics and a changed product mix compared to 2017

• Surveillance changed the project marginin a few smaller projects in 2018

0

50

100

150

200



EBIT-margin,% 8.04.8 4.411.7 3.97.3 13.09.7 1.94.0 5.65.27.3

Investments in development

0

500

1 000

1 500

2 000

2 500

3 000

Dec. 2012 Dec. 2013 Dec. 2014 Dec. 2015 Dec. 2016 Dec. 2017 March2018

Capitalised development costs

16

• We see great interest in Saab’s productportfolio

• Interest in our new generation solutions very high

• Acceleration of investments in developing Gripen for the future, capitalised development costs in Q1 2018

• Increased capitalisation as solutions arein industrialisation phase

• Capitalised development cost is mainlyrelated to GlobalEye* and Gripen

*Next generation of Airborne Early Warning and Control solution (AEW&C)

MSE

K

Acquisitions and Sale of

Subsidiaries and Other Financial

Assets

MSE

K

17

Free cash flow

-3 000

-2 500

-2 000

-1 500

-1 000

-500

0

500

1 000

1 500

Tax and otherfinancial items

Investingactivities

Change in working capital

Cash flow from operating

activities beforechanges in

working capital

Change in working capital:Contract assets and liabilities -2,588Inventories -474Other current receivables 561Other current liabilities -15Provisions -48

-2,564

Cash flow from investing activities:Intangible assets -271Tangible assets -326Other 2

-595

MSEK

Net debt, 31 December 2017 -1,834

Cash flow from operating activities -1,810

Change in net pension obligation -50

Net investment -595

Currency impact and unrealised results from financialinvestments

-50

Net debt, 31 March 2018 -4,339

Net pension obligation, 31 March 2018 2,696

Total interest-bearing assets, 31 March 2018 -489

Net debt excluding interest-bearing receivables and net pension obligation

-2,132

31.5%Equity/Assets

ratio

136.6Equity per share

(SEK)

18

Financial position

COMPANY RESTRICTED | NOT EXPORT CONTROLLED | NOT CLASSIFIEDYour Name | Document Name | Issue 1

• Continued focus on execution of large projects– project management

• Build order backlog in selected areas

• Drive efficiencyimprovements throughoutthe organisation

Focus 2018

Saab interim report January-March2018 · • Saab has to become even more agile and focus on...

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