Capital markets day 13 May 2015 - Saab AB · 2015-05-13 · Ericsson Microwave Systems acquired ....

Håkan Buskhe President and CEO

24 April 2015

INTERIM REPORT JANUARY-MARCH 2015 Håkan Buskhe President and CEO

13 May 2015

CAPITAL MARKETS DAY

AGENDA

8.00 Breakfast served

8.30 Saab’s business environment, position and strategy (Håkan Buskhe, CEO)

9.15 Saab naval business (Gunilla Fransson, Head of Security and Defence Solutions)

10.00 Break 10.30 Surface radar (Anders Linder, Head of Surface Radar Solutions)

11.00 Gripen – the smart fighter (Ulf Nilsson, Head of Aeronautics)

11.30 Q&A session

12.00 Lunch

13.30 Wrap-up

OUTLOOK STATEMENT 2015

• In 2015, we estimate sales to increase more than Saab’s long-term goal: annual organic sales growth of 5 per cent.

• The operating margin 2015 excluding material non-recurring items is expected to be in line with the operating margin in 2014. In 2015, increased internally funded research and development efforts within Aeronautics will have a negative impact on the operating margin.

3 COMPANY RESTRICTED | NOT EXPORT CONTROLLED | NOT CLASSIFIED

© Saab

GLOBAL DEFENCE MATERIEL MARKET

North America 36%

Latin America 3%

Nordic & Baltic 1%

EMEA3) 27%

Russia1) 4%

China1) 12%

APAC2) 17%

1.0%

2.2%

1.5%

3.0%

1.5%

6.0%

2.7% X%

X%

Share of global defence procurement market, 2016-2020 (constant USD)

Compound annual growth rate, 2016-2020 (constant USD) Source: IHS Group, December 2014

1)Defence market not approached by Saab 2)Excl. China 3)Excl. Russia


© Saab

MARKET TRENDS – NON-DEFENCE

• An annual market growth of about 5 per cent • Incl. structures for commercial aircraft,

advanced electronics for critical applications and maintenance of the Saab 340 and Saab 2000

Commercial aeronautics

• Combitech is a Nordic technical consultancy offering technology, environment and security solutions

Technical consulting

• An annual market growth of more than 5 per cent

• Surveillance and situational awareness, solutions for secure, efficient flows at airports, in ports and along coasts as well as emergency response.

Civil security


© Saab

MARKET TRENDS

• Strained defence budgets and order delays

• Advantage for cost efficient products

• Increased global instability – military and civil threats and challenges

• Demand for local presence

• Collaborations and alliances require system integration

• Need to safeguard and improve supply chain efficiency


© Saab

FINANCIAL GOALS

Sales

Average organic sales growth of 5% per year over a business cycle. In 2014, organic sales declined by -3% (-2).

Operating margin

Average operating margin (EBIT) of at least 10% per year over a business cycle. In 2014, the operating margin (EBIT) was 7.1% (5.7).

Equity/assets ratio

The equity/assets ratio will exceed 30%. At year-end 2014, the equity/assets ratio was 38.5% (44.0).

Dividend

The long-term dividend goal is to distribute 20–40% of net income to the shareholders over a business cycle.

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© Saab

SUSTAINABLE BUSINESS


© Saab

SAAB – ORGANISATION

AERONAUTICS DYNAMICS ELECTRONIC DEFENCE SYSTEMS

SECURITY AND DEFENCE SOLUTIONS

SUPPORT AND SERVICES

INDUSTRIAL PRODUCTS AND SERVICES

BUSINESS AREAS MARKET AREAS

Nordic & Baltic

Latin America

Europe, Middle East

& Africa

Asia Pacific

North America

CEO

GROUP FUNCTIONS


© Saab

STRATEGIC PRIORITIES SET 2010

• Profitable growth: ‒ Stay focused on strong markets ‒ Establish stronger local presence in selected markets

• Performance:

‒ Increased focus on execution of operational priorities

• Portfolio: ‒ Invest in product innovation and renewal ‒ Prioritize areas with competitive technology and/or competitive

market position ‒ Acquisitions to strengthen the portfolio in prioritized areas ‒ Actions to strengthen and ensure our unique system

knowledge

• People: ‒ Focus on performance management and become a more

attractive employer


© Saab

PROFITABLE GROWTH

2011 2012 2013 2014 2015

• UK and US expansion

• Brazil research centre (CISB)

• Sensis acquired

• Hungary decides to continue operating Gripen until 2026

• HITT acquired

• New market area organisation implemented

• Brazil selected Gripen NG in December 2013 as future fighter jet

• JDA with Boeing on T-X family of training systems

• Expanded radar portfolio

• Carl-Gustaf M4 launched

• Remote Tower certfication in SE

• Design of new generation submarine

• Czech Republic decides to continue operating Gripen until 2027

• Expected order for next generation submarine to Sweden, A26

• Expected order for 36 Gripen to Brazil


© Saab

PROFITABLE GROWTH

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2008 2009 2010 2011 2012 2013 2014 2015

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Order backlog development

Incl. order for Gripen to Brazil

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2008 2009 2010 2011 2012 2013 2014

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Sales


© Saab

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1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

SEK

bn

Sales Sweden Sales ROW Reported EBIT margin

SALES AND EBIT MARGIN, 1998-2014

Acquisition of Celsius in 2000 Acquisition of

Grintek in 2005

Acquisition of EMW

in 2006

Divestment of Saab Space in

2008 Aquisition of

Kockums in 2014

Divestment of share in C3-technologies in 2011

Aquisition of Sensis in 2011


© Saab

PERFORMANCE EBIT MARGIN

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2008 2009 2010 2011 2012 2013 2014Reported EBIT margin EBIT margin excl. non-recurring items, capitalised and amortised development


© Saab

PERFORMANCE DRIVERS

• Project execution

• Cash flow focus

• Operational efficiency and continuous capacity alignment

• Distributed P&L responsibility

• Transparency and accountability


© Saab

OPERATING INCOME AND OPERATIONAL CASH FLOW

-2 000

-1 000

0

1 000

2 000

3 000

4 000

5 000

2008 2009 2010 2011 2012 2013 2014

MSE

K

Operational cash flow Operating income (EBIT)


© Saab

PORTFOLIO

• R&D: ‒ New and improved surface radars ‒ Carl-Gustaf M4 ‒ Continuous R&D efforts to stay ahead

• Gripen development on track

• Remote tower in operation

• Acquisition of Saab Kockums to strengthen naval offering

• Cooperation with Boeing: - TX - development of trainer aircraft - Ground Launched Small Diameter Bomb

• Bolt-on acquisitions where needed


© Saab

AT THE FOREFRONT OF CHANGE

1937 Saab founded

2000 Celsius acquired

2005 Grintek acquired 2006

Ericsson Microwave Systems acquired

2011 Sensis Corp. acquired 2012

HITT acquired

2014 Kockums acquired

1646 Bofors founded

1894 Alfred Nobel acquires Bofors

1948 First Carl-Gustaf order

1998 StriC in operation

1950 Development of fighter radar

1970 Development of Giraffe radar family

1980 Development of Arthur

1990 Sea Giraffe AMB launched

BUILDING STRENGTH THOUGH ACQUISITION


© Saab

http://www.google.se/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://forum.saabturboclub.com/showthread.php/29590-Flyg&ei=AtxcVJDKEsS4ON_agYAC&bvm=bv.79184187,d.ZWU&psig=AFQjCNE3nWRm5Cch8nH9YDmdopiL_0G1zg&ust=1415458160384432

http://www.grintek.co.za/

STRATEGIC ACQUISITION OF SAAB KOCKUMS

• Underwater capability increasingly important in global defence policy

• Saab strategy and Swedish national interest on the same path

• Focus on strengthening Swedish defence capability and Saab’s position in the global market


© Saab

CASH FLOW FROM TRANSACTIONS

-2500

-2000

-1500

-1000

-500

0

500

1000

1500

2000

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3000

2010 2011 2012 2013 2014 Total

MSE

K

Cash flow from divestments Funds invested


© Saab

PEOPLE

• Attract, retain and develop talents

• Workforce planning and competence development

• Continuous leadership development

• Performance-driven culture

• Promote diversity

• Broaden international footprint


© Saab

STRATEGIC PRIORITIES 2010

• Profitable growth: • Stay focused on strong markets • Establish stronger local presence in selected

markets

• Performance: • Increased focus on execution of operational

priorities

• Portfolio: • Invest in product innovation and renewal • Prioritize areas with competitive technology

and/or competitive market position • Acquisitions to strengthen the portfolio in

prioritised areas • Actions to strengthen and ensure our unique

system knowledge

• People: • Focus on performance management • Become a more attractive employer

2013

• Profitable growth: • Gripen • Market area organisation implemented • Strategy and business models adapted to

local requirements • M&A to support growth

• Performance:

• Streamline business processes • Portfolio management process • Improved contract management skills

• Portfolio:

• High-technology cost-efficient products and solutions

• Increased R&D efforts

• People: • Implemented performance management

process • Improved rating as attractive employer in

external surveys • Increase international footprint and diversity

2015

• Profitable growth: • Execute on order backlog • Capitalise on R&D investments • Work close to key customers

• Performance:

• Cash flow focus • Operational efficiency • Continuous improvement of processes • Transparency and accountability

• Portfolio:

• Continued R&D investments • Focus on competitive, attractive and

profitable products

• People: • Continuous leadership development • Performance-driven culture • Promote diversity

2015

• Profitable growth: • Execute on order backlog • Capitalise on R&D investments • Work close to key customers

• Performance:

• Cash flow focus • Operational efficiency • Continuous improvement of processes • Transparency and accountability

• Portfolio:

• Continued R&D investments • Focus on competitive, attractive and profitable products

• People: • Continuous leadership development • Performance-driven culture • Promote diversity


© Saab

Capital markets day 13 May 2015 - Saab AB · 2015-05-13 · Ericsson Microwave Systems acquired ....

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Transcript of Capital markets day 13 May 2015 - Saab AB · 2015-05-13 · Ericsson Microwave Systems acquired ....