INTERIM REPORT Q3 2016 - Saab AB · Investor Relations | Q3 2016. 25 October, 2016. INTERIM REPORT...

COMPANY RESTRICTED | NOT EXPORT CONTROLLED | NOT CLASSIFIEDInvestor Relations | Q3 2016

25 October, 2016

INTERIM REPORTQ3 2016

Håkan Buskhe, President and CEOMagnus Örnberg, EVP and CFOThis document and the information contained herein is the property of Saab ABand must not be used, disclosed or altered without Saab AB prior written consent.


HIGHLIGHTS JAN-SEP 2016

• Market demand for cost-efficient solutions strong• Strong order intake, reflected in a strengthened order

backlog and sales increase of 15 per cent• Contract for RBS 70 NG VSHORAD in third quarter

PROFITABLEGROWTH

• Improved operating margin, reflecting high activity level• Operating income impacted by investments in the

development of a new jet trainer (T-X-program)• Free cash flow continued strong in the period

PERFORMANCE

• In September, Saab and Boeing reveal the first twoaircraft for US air force T-X competition

• Minority stakes in Venture portfolio, early stageinvestments had a negative impact on earnings

• Saab received Swedish award for equality work

PORTFOLIO &PEOPLE

2


MARKET SITUATION

• NATO countries targets 2% of GDPspending on defence

• Increased global need for security anddefence capabilities

• Interoperability and collaboration

• Demand for cost efficiency and localpresence

• Need to safeguard and improve supplychain efficiency


FINANCIAL HIGHLIGHTS, JAN-SEP 2016

4

62 599

14 960

Jan-Sep 2015 Jan-Sep 2016

MS

EK

Order bookings

17 11619 615


MS

EK

Sales

553

837


MS

EK

Operating income

-1 595

1 740

Jan-Sep 2015 Jan-Sep 2016MS

EK

Free cash flow

15%

4.3%3.2%EBITmargin


GRIPEN- THE SMARTFIGHTER


FOCUS ON LONG-TERM FINANCIAL TARGETS

Catch the market momentum‒ Further develop the Saab Market Area organisation‒ Prioritised market efforts‒ Small and midsized orders

Efficient execution and delivery‒ Sales growth - increased utilization‒ Focus on project execution‒ Continouos efficiency improvements‒ T-X-program tender process final in 2017/2018‒ Streamlining of portfolio


OUTLOOK STATEMENT 2016

7

• In 2016, we estimate sales to be in line with Saab’slong-term goal: annual organic sales growth of 5 percent.

• The operating margin 2016, excluding material non-recurring items, is expected to be in line with theoperating margin in 2015.


FINANCIAL UPDATE

8


SUMMARY

• First nine months 2016 in line with our expectations

• Sales growth driven by large projects in order backlog

• Focus on project execution key

• Improved operating margin; earnings still impacted byinvestments in T-X program

• Operating cash flow continued strong in the period,focus on cash flow management a priority

• In the third quarter, net debt impacted mainly byutilization of advances and milestone payments andless sold trade receivables

9


FINANCIAL KEY DATA

MSEKJan-Sep2016

Jan-Sep2015 Change FY 2015

Order bookings 14,960 62,599 -76 81,175

Order backlog 109,521 105,486 4 113,834

Sales 19,615 17,116 15 27,186

Operating income 837 553 51 1,900

Operating margin 4.3% 3.2% 7.0%

Net income 536 293 83 1,402

Free cash flow 1,740 -1,595 -726

10

• Order bookings for Jan-Sep 2016 in line with 2015, excludinglarge orders for Gripen, Airborne Early Warning andsubmarines

• Sales growth driven by Gripen, Airborne Early Warning andsubmarine orders as well as growth in business area Dynamics

• In third quarter cash flow impacted by utilisation of advancesand milestone payments and less sold trade receivables


ORDER BACKLOGOrder backlog duration, SEK bn

30 Sep 2016 30 Sep 2015 31 Dec 2015

2016: 8.2 2015: 7.7 2016: 21.8

2017: 21.0 2016: 18.2 2017: 15.9

2018: 14.9 2017: 14.0 2018: 12.3

2019: 12.7 2018: 10.9 2019: 11.7

After 2019: 52.8 After 2018: 54.7 After 2019: 52.1

Total: 109.5 Total: 105.5 Total: 113.8

11

020406080

100120

'11 '12 '13 '14 '15 Jan-Sep'16

SEK

bn

Order backlog

35%

65%

Order backlog distribution

SwedenRoW


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

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Q2'14

Q3'14

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Q1'16

Q2'16

Q3'16

MSE

K

Small orders* Large orders Book-to-bill ratio

12

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


ORDER BOOKINGS AND ORDER BACKLOG

0

4 000

8 000

12 000

16 000

20 000

Aeron. Dyn Surveillance S&S IPS Kockums

MS

EK

Jan-Sep '15 Jan-Sep '16

13

36%

9%40%

13%

1% 1%

Regional distribution, Order backlog

SwedenRoEAmericasAsiaAfricaAustralia etc

Dynamics received several importantorders, for example RBS 70 NG in thethird quarter

Support and Services saw strong growthin small orders, 25 per cent increase inthe period

0

10

20

30

40


BS

EK


Order bookings

Order backlog

40 000

60


SALES

0

1 000

2 000

3 000

4 000

5 000

6 000


MS

EK


14

43%

17%

17%

18%

2% 3%Regional distribution

SwedenRoEAmericasAsiaAfricaAustralia etc

Sales growth mainly driven by the Gripenprogrammes, Globaleye and thesubmarine A26

Sales in Dynamics strengthened due toorders in 2015 and recent important wins

19%

18%

16%

11%

-

33%


OPERATING INCOME

204

-119

132109

247

320

73

218

256

56

85

-150

-100

-50

0

50

100

150

200

250

300

350


MS

EK


2

15

Sales growth in several Business Areashas lead to overall increased utilisation

Operating income affected byinvestments in T-X-programme

Minority stakes in Venture portfolio, earlystage investments had a negative impacton earnings in IPS

4.9 6.5

-4.8 2.5

4.0 4.1 7.2

4.3 2.2

19.8 5.1


CASH FLOWJan-Sep, 2016 MSEKCash flow from operatingactivities before changes inworking capital

1,772

Change in working capital 1,338Investing activities -1,188Operational cash flow 1,922

Tax and other financial items -235Acquisitions and sale ofsubsidiaries and other financialassets

53

Free cash flow 1,740

16

0

500

1 000

1 500

2 000

2 500

3 000

3 500

Cash flowfrom operatingactivitiesbeforechanges inworking capital

Change inworkingcapital

Investingactivities

Tax and otherfinancial items

Acquisitionsand sale ofsubsidiariesand otherfinancial assets


FINANCIAL POSITIONSeptember 2016, MSEK

Net liquidity (+) / Net debt (-), 31 December 2015 -3,217

Cash flow from operating activities 2,875

Change in net pension obligation -1,033

Net investments -1,188

Sale of subsidiaries 55

Dividend -530

Currency impact and unrealised results from financial investments 71

Net liquidity (+) / Net debt (-), 30 September 2016 -2,967

Net pension obligation, 30 September 2016 2,926

Total interest-bearing assets, 30 September 2016 -575

Liquidity -616

Equity/assets ratio, 30 September 2016 32.5

17


FOCUS GOING FORWARD

Continue to:

• Focus on execution of large projects

• Build order backlog in selected areas

• Drive efficiency improvements throughout theorganisation

18


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INTERIM REPORT Q3 2016 - Saab AB · Investor Relations | Q3 2016. 25 October, 2016. INTERIM REPORT...

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Transcript of INTERIM REPORT Q3 2016 - Saab AB · Investor Relations | Q3 2016. 25 October, 2016. INTERIM REPORT...