Post on 23-May-2020
INTERIM REPORTJANUARY-MARCH 2014
Håkan Buskhe, President and CEOStockholm, 25 April 2014
Development of Gripen E on trackNegotiations with Brazil concerningpotential procurement of Gripenprogress according to planSwiss referendum regarding Gripen18 May, 2014Expansion in naval domainannounced
CHALLENGING MARKETPROVIDES OPPORTUNITIES
Page 2
LARGE INTEREST FOR OUROFFERING GLOBALLY
FINANCIAL HIGHLIGHTS
MSEKJan-Mar
2014 Change, %
Jan-Mar2013
Order bookings 4,078 -78 18,865Order backlog 58,608 25 47,059
Sales 5,280 -10 5,862Operating income 270 -32 396Operating margin, % 5.1 6.8
Net income 176 -33 262Free cash flow -316 -325
Page 3
STRONG ORDER BACKLOG
Page 4
52%48% 30%
70% 56%44%
Sales Order intake Order backlogJan – Mar 2014SwedenInternational
2591
914
119715
1022
178 323
2518
845
88456
1009
170 1940
1 000
2 000
3 000
4 000
5 000
6 000
Sweden EU excl.SE
RoE Americas Asia Africa Australia,etc.
Sales per region
877
105
10591689
151 61
1215 1424
119633 474
130 830
1 000
2 000
3 000
4 000
5 000
6 000
Sweden EU excl.SE
RoE Americas Asia Africa Australia,etc.
Order bookings per region14 923
Jan-March 2013Jan-March 2014
-92%
62%
13%
-40%-72%
-14% 36%
-3%
-8%
-26%-36%
-1%
-4% -40%
15 000
ORDER BOOKINGS AND SALESDEVELOPMENT
Page 5
SPENDING SHIFT AND INCREASEDCOMPETITION
Source: IHS Aerospace, Defence & Security, Jane’s, Defence Budgets – Annual Report 2013
Global Defence Expenditure by Region – 2013 Global Defence Expenditure by Region – Est. 2017
Asia22%
EastEurope
8%
MENA8%
NorthAmerica
39%
Oceania2%
SouthAmerica
5%
Sub-Saharan
Africa1%
WestEurope
15%Asia24%
EastEurope
10%
MENA8%
NorthAmerica
36%
Oceania2%
SouthAmerica
5%
Sub-Saharan
Africa1%
WestEurope
14%
Top Ten Defence Budgets – 2013 Top Ten Defence Budgets – Est. 2017
UnitedStates52%
China12%
Japan6%
Russia6%
UK5%
France4%
India4%
Germany4%
SaudiArabia
4%
Australia3%
UnitedStates48%
China14%
Russia8%
Japan6%
UK5%
India5%
France4%
SaudiArabia
4%
Germany3%
Australia3%
FTE’s reduced by about 300 in Q1 2014Reduction of external consultants by more than300 since beginning of 2013Charges for efficiency measures taken inbusiness area EDS in Jan-March 2014On track to reach efficiency improvements ofMSEK 500 by the end of 2014
EFFICIENCY IMPROVEMENTSAS PLANNED
Page 6
EFFICIENCY IMPROVEMENTSIN FOCUS 2014
Investment in development of new productgenerationInitiated efficiency measures andreorganised in 2013Charges for efficiency measures taken inJan-March 2014Investments in product developmenttogether with restructuring charges led toloss in first quarter 2014Turnaround expected mid-2014
ELECTRONIC DEFENCESYSTEMS
Page 7
Order from FMV regarding study on pre-requisities for aconsolidated strategy to support the underwater domainNon-binding Memorandum of Understanding (MoU)regarding acquisition of Thyssen Krupp Marine SystemsAB (former Kockums)
In line with Saab’s ambition to expand its activities in the naval areaand meets the needs of Sweden for an industrial solution regardingdesign, production and maintenance of submarines and warships
EXPANSION IN NAVAL DOMAIN
Page 8
GRIPEN E DEVELOPMENT ON TRACKAND ON BUDGET
The development of Gripen E brings together highly complex sub-systems, such as sensors, electronic warfare systems, avionics, etc
Contracts signed with all major subcontractors
Test flights, where critical subsystems and their interoperability aretested to minimise risk, already well underway
First delivery planned for 2018
Page 9
HIGH INTEREST IN GRIPEN GLOBALLY
Page 10
Switzerland:Swiss parliament supports procurement of GripenReferendum to be held 18 May 2014Industrial cooperation efforts on track
Brazil:Negotiations between Saab and the Brazilian Air Force ongoing aiming at aprocurement of 36 Gripen NG; no order received yetAmbition from both parties to sign an agreement in 2014
OUTLOOK STATEMENT 2014
Page 11
In 2014, we estimate sales to be in line with 2013.
The operating margin, excluding material net capital gains andother non-recurring items, is estimated to be slightly higher in2014 compared to 2013.
FINANCIALSJANUARY-MARCH 2014
Magnus Örnberg, CFOStockholm, 25 April 2014
SUMMARY, JANUARY-MARCH 2014
Challenging market conditionsIncrease in order bookings in SDS
Lower activity level in Dynamics, investments in EDS andlower activity in Combitech impacted profitabilityEfficiency measures progressing according to plan;additional charges taken for measures in EDSStrengthened governance model in place since1 January 2014
Strong focus on operational cash flow; however negative inthe quarterIncreased pension provisions due to lowered discount ratefrom 4.00 to 3.50 per cent
Page 13
PR
OFI
TAB
ILIT
YFI
NA
NC
IAL
PO
SIT
ION
GR
OW
TH
In Jan-March 2014 financial report financials for business areas arerestated to reflect organisational changes. No impact on Group financials
LEVEL OF SMALL ORDERS STABLE
0
0,5
1
1,5
2
2,5
0
5 000
10 000
15 000
20 000
25 000
30 000
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Boo
k-to
-bill
ratio
(12
mon
ths
rolli
ng)
Ord
erbo
okin
gs,M
SEK
Small orders* Large orders Book-to-bill ratio
Page 14
*Small orders = <100 MSEK
Order Backlog duration, SEK bn
31 Mar 2014 Dec 2013 Dec 20122014: 15.4 2014: 17.4 2013: 16.1
2015: 10.7 2015: 10.8 2014: 7.9
2016: 7.8 2016: 8.1 2015: 4.6
2017: 5.1 2017: 5.9 2016: 2.7
After 2017: 19.6 After 2017: 17.7 After 2016: 2.9
Total: 58.6 Total: 59.9 Total: 34.2
ORDER BACKLOG
Page 15
56%44%
Order Backlog
Jan – Mar 2014SwedenInternational
1 765
877 1 1511 097 871
423
1 577
716 974 1 156839
447
0
1 000
2 000
3 000
4 000
5 000
6 000
Aeron. Dyn. EDS SDS S&S Combi.
Sales per Business Area
Jan-Mar 2013 Jan-Mar 2014
Sweden48%
EU excl.Swe16%
RoE2%
Americas8%
Asia19%
Africa3%
Australiaetc4%
Sales per Region
Page 16
753
3 693
925
2 725
424631 449938
1321737
418
0
1 000
2 000
3 000
4 000
5 000
6 000
Aeron. Dyn. EDS SDS S&S Combi.
Order Bookings per Business Area
Jan-Mar 2013 Jan-Mar 2014
ORDERS AND SALES DEVELOPMENT
Sweden30%
EU excl.Swe35%
RoE3%
Americas16%
Asia12%
Africa3%
Australiaetc2%
Order Bookings per Region10 833
-94%
-40%-75% 43%
-73%-1%
-11%-18% -15% +5%
-4% +6%
11 000
OPERATING INCOME
116
84
-12-22
102
44
118
28
-36
-12
87
25
-50
0
50
100
150
Aeron. Dyn. EDS SDS S&S Combi.
MSE
K
Jan-Mar 2013 Jan-Mar 2014
Page 17
Low activity level in Dynamics led to lower EBIT margins
Investments in EDS for future growth continued; also costsfor measures to increase efficiency taken in Q1 2014
Combitech’s lower profitability due to lower utilization rate
6.6% 7.5% 9.6% 3.9% -1.0% -3.7% -2.0% -1.0% 11.7% 10.4% 10.4% 5.6%
IMPACT FROM ADDITIONAL EFFICIENCYMEASURES ON TRACK
Actions defined in 2013’s action planinitiatedReorganisations done in 2013 withinSecurity Defence Solutions, ElectronicDefence Solutions, Dynamics and Supportand ServicesReduction of FTEs within Dynamics, SecurityDefence Solutions and Support and Servicessince start of 2013FTE’s reduced by about 300 since year-end2013External consultants reduced by morethan 300 since start of 2013Within Electronic Defence Systems additionalcosts were taken in the first quarter 2014related to the on-going competency shiftprogramFocus on marketing andadministrative costs
March 2014 YE 2014Start 2013
COGS(60%)
OPEX(40%)
MSEK500
STATUS REPORT
PAGE 18
Yearly run rate
CAPITALISED DEVELOPMENT COSTS
Mar. 2014Dec. 2013Dec. 2012Dec. 2011Dec. 2010Dec. 2009Dec. 2008
Capitalised development costs on the balance sheet
Jan-Mar2014
20132012201120102009'2008
Capitalised development costsView on criteria for capitalising development costschanged in 2009Since then, development costs are capitalised at alater stage in all projects and all capitaliseddevelopment costs are amortised over maximumten yearsIn the first quarter 2014 self-financed developmentcosts partly related to radar and sensor technologydevelopment were capitalised
Level of amortisation of capitalised developmentexpenses in 2014 and coming years:Approximately MSEK2014: 3702015: 3502016: 300
March2014
Dec.2013
Dec.2012
Dec.2011
Dec.2010
Dec.2009
Dec.2008
Amortisation and write- downs of capitalised development
PAGE 19
635 67 47 15 292 24
728 686 664 588 590 454
3,628 3,038 2,428 1,950 1,751 1,338
79
36
1,295
OPERATIONAL CASH FLOWAND FREE CASH FLOW
MSEKCash flow from operating activities beforechanges in working capital
474
Change in working capital -514Investing activities -128Operational Cash flow -168
Tax and other financial items -93Acquisition and sale of subsidiaries -55Free Cash flow -316
Page 20
As of 1 January 2014 Saab reports operational cash flow and free cash flow. Previously operating cash flow was reported,which was defined the same way as free cash flow is defined as of 1 January 2014.
NET LIQUIDITY
Increased pension liability due to lowered discount rate from 4.00 to3.50 per cent
At 31 March 2014 the Equity asset ratio was 44.4 per cent (41.5)
PAGE 21
MSEKNet liquidity, 31 December 2013 813Cash flow from operating activities 31 March 2014 -133Pensions -538Net investments -183Currency impact 7Net liquidity, 31 March 2014 -34
Order intake and backlog execution are top prioritiesSolidify Market Area organisationSecure impact from additional efficiency measuresDrive operating cash flow improvement
Project tendering and execution
Performance management
FOCUS GOING FORWARD
Page 22
|||||||||||
Page 23