INTERIM REPORT JANUARY MARCH 2013 President and CEO Håkan Buskhe 25 April, 2013
JANUARY - MARCH IN BRIEF 2013 2013 Sweden International 2013 %-Change 2012 bookings 18,865 372 4,000 backlog 47,059 32 35,657 5,862 5 5,573 income 396-2 403 margin, % 6.8 7.2 Net income 262-7 283 56% 21% 66% intake Net liquidity 1,984 3,437 cash flow -349-48 54% backlog
GRIPEN E UPDATE Key agreement with FMV* concerning development and modification Gripen E s received for the complete development Gripen E from FMV totalling SEK 13.2 billion The agreement includes potential orders concerning Gripen E to a total SEK 47.2 billion in 2013 and 2014, including a potential order to Switzerland In Switzerland the political process is on-going with an expected decision regarding procurement in 2014 * Swedish Defence Materiel Administration
CHALLENGING MARKET 2013 Global Military Spending Forecasted CAGR / Share world spending 2013 2018 North America 3% / 36% Nordic +/ 0% /1% Europe +/ 0% / 16% MENA +2% / 10% Russia +8% / 6% India +5% / 3% China +6% / 10% Latin America +1% / 4% Sub Saharan Africa +7% / 1%* Asia Pacific +2% / 12% % CAGR = Compounded annual growth rate % Share World Total Projected Defense Spending 2013-2018, Source: IHS Janes Continued unstable financial situation in Europe Sequestration in the U.S. puts pressure on federal spending Security and defence companies increasingly looking at opportunities in growth markets
GROWTH IN DEMANDING MARKET backlog 39,554 40,957 35,657 47,059 5,384 5,452 5,573 5,862 PROFITABLE GROWTH PERFORMANCE PEOPLE PORTFOLIO Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2010 Q1 2011 Q1 2012 Q1 2013 PROFITABLE GROWTH for development Gripen E, totalling SEK 13.2 billion received Strong order intake in all business areas Electronic Defence Systems order for Erieye AEW&C Mission System Security and Defence Solutions support contract for airborne surveillance system, which also generates order intake for Electronic Defence System and Support and Services Reported and organic sales grew by 5 per cent High activity level especially in business areas Aeronautics and Combitech PAGE 5
INTERNATIONAL GROWTH JAN-MARCH 2013 Sweden 2013 %- 2012 s 14,923 943 1,431 2,591 22 2,122 Americas 2013 %- 2012 s 1,059-10 1,181 715 36 527 EU exkl. SE 2013 %- 2012 s 877 17 749 914-3 940 Asia 2013 %- 2012 s 1,689 1,422 111 1,022-22 1,303 Rest Europe 2013 %- 2012 s 105 150 42 119 +113 56 Australia, others. 2013 %- 2012 s 61-68 192 323 27 254 Africa 2013 %- 2012 s 151-49 294 178-52 371
STRONG PERFORMANCE Gross margin 26,2% 28,3% 27,5% 23,6% margin 2,6% 2,7% 2,0% Amortisation and writedown capitalised development costs PROFITABLE GROWTH PERFORMANCE PORTFOLIO 3,5% 6,7% 7,2% 6,8% Reported EBIT PEOPLE 2,3% Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2010 Q1 2011 Q1 2012 Q1 2013 PERFORMANCE Strong results in a demanding market EDS operating loss due to investments in early stage product development projects, lower sales volume and a different project mix Increased stability operating cash flow generation - key focus PAGE 7
PORTFOLIO AND PEOPLE PORTFOLIO Joint ventures established in Asia Pacific to strengthen market presence PROFITABLE GROWTH PERFORMANCE PEOPLE PORTFOLIO PEOPLE Saab climbs in best workplace survey by Universum, from 25th in 2012 to 8th in 2013 (Masters degree: engineering students) Individual Performance Management process in focus We continue to actively work with the prioritized areas in order to attract and retain the best talents PAGE 8
Outlook Statement 2013 In 2013, we estimate that sales will increase slightly compared to 2012. The operating margin in 2013, excluding material net capital gains and other non-recurring items, is expected to be in line with the operating margin in 2012, excluding material non-recurring items, 7.7 per cent *. *Restated from 7.6 per cent to 7.7 per cent due to the changed accounting principles for pensions (IAS 19).
Interim report JANUARY MARCH 2013 Financials more in detail Magnus Örnberg, CFO 25 April, 2013
SUMMARY Q1 2013 GROWTH bookings and sales strong Acquisitions contributed to sales growth by 1 per cent and exchange rates negative by 1 per cent PROFITABLE GROWTH PERFORMANCE PEOPLE PORTFOLIO EXECUTION AND INCOME FINANCIAL POSITION Different project and product mix impacted gross margin Marketing expenses increased; in line with our expectations Investments in R&D continues; large part taken in Electronic Defence Systems Pension net liability changes as discount rates change Net liquidity unchanged compared to year-end cash flow negative; mainly due to timing differences in milestone payments PAGE 11
ORDERS RECEIVED Book-to-bill ratio (12 months rolling) 3,5 Large orders Small orders Book-to-Bill ratio 3 2,5 Record Record high high quarterly quarterly order order intake; intake; with with several several large large orders orders and and good good flow flow orders orders under under 100 100 18,865 2 11,900 86% 1,5 72% 7,644 1 0,5 0 28% Q4 2010 5,215 58% 42% Q1 2011 5,431 46% 54% Q2 2011 3,147 40% 60% Q3 2011 5,114 43% 57% Q4 2011 4,000 19% 81% Q1 2012 70% 30% Q2 2012 4,111 46% 54% Q3 2012 4,928 53% 47% Q4 2012 14% Q1 2013
GROWTH PER BUSINESS AREA bookings per business area 10,833 ch 2013 ch 2012 bookings per region Asia 9% Americas 6% Africa 1% Austr, etc - RoE 1% 817 554 753 520 3,693 1,620 1,247 955 2,066 246 387 EU excl SE 5% SE 79% Aeron. Dynamics EDS SDS S&S Combitech per business area 24% 1,765 1,419-15% 1,035 877-12% 1,181 1,038-4% 1,323 1,271 ch 2013 ch 2012 6% 779 822 per region Asia 17% Africa 3% Austr, etc 6% SE 44% 32% 410-311 Aeronautics Dynamics EDS SDS S&S Combitech Americas 12% RoE 2% EU excl SE 16% PAGE 13
ORDER BACKLOG backlog split March 2013 Asia 15% Africa 3% Austr, etc 3% backlog duration (SEK billion): March 2013 March 2012 Dec 2012 2013: 14.5 2012: 14.3 2013: 16.1 2014: 12.8 2013: 9.3 2014: 7.9 2015: 9.0 2014: 5.2 2015: 4.6 2016: 6.6 2015: 3.1 2016: 2.7 After 2016: 4.2 After 2015: 3.8 After 2016: 2.9 Total: 47.1 Total: 35.7 Total: 34.2 Americas 15% SDS 16% S&S 14% RoE 1% EDS 17% Dyn. 10% SE 46% EU excl SE 17% Combitech 1% AN 42%
EBIT PER BUSINESS AREA AND CORPORATE EBIT, 78 116 108 72 91 60 67 88 ch 2013 ch 2012 99 39 44 EBIT margin (%) 5.5% 6.6% 10.4% 8.2% 7.7% 22 4.5% 1.7% 8.6% 10.7% 12.5% 10.7% Aeronautics Dynamics EDS SDS S&S Combitech Corporate -4.3% -45-40 The The Group Group generated generated EBIT EBIT 396 396 (403), (403), an an EBIT EBIT margin margin 6.8 6.8 (7.2) (7.2) per per cent. cent. PAGE 15
HIGHLIGHTS INCOME STATEMENT 2013 2012 %-change 5,862 5,573 5% Organic growth 5 per cent Gross margin 27.5% 28.3% Marketing expenses -513-457 12% % sales 8.8% 8.2% As expected, increased marketing expenses due to buildup Market Area organisation Administrative expenses -263-275 -4% % sales 4.5% 4.9% Research and development costs -458-479 -4% % sales 7.8% 8.6% High activity level in product development income 396 403-2% margin 6.8% 7.2% Financial net -42-10 Income before taxes 354 393 Taxes -92-110 Net income 262 283-7% Earnings per share after dilution, SEK 2.46 2.72 Tax rate 26% 28%
AMORTISATION OF CAPITALISED DEVELOPMENT EBITDA (margin) 684 (12.3%) 644 (11.0%) EBIT (margin) 403 (7.2%) 396 (6.8%) Amortisation Amortisation development development costs costs 115 115 in in the the quarter; quarter; Continued Continued reduction reduction on on balance balance sheet sheet to to continue continue ch 2012 ch 2013 Total Depreciation, Amortisation and write-downs Amortisation and write-down capitalised development costs 2013: 115, 2012: 152 Capitalised development costs 3 628 3,038 2,428 1,950 1,751 1,643 Dec. 2008 Dec. 2009 Dec. 2010 Dec. 2011 Dec. 2012 March 2013
OPERATING CASH FLOW 507 448 Change in Working capital ch 2013 ch 2012 Investments cashflow Cash flow before change working capital -523-32 -48-682 -115-349 Change in working capital impacted by build up project activities and timing differences in milestone payments
FINANCIAL POSITION KEY INDICATORS 31 March 31 March Change 31 Dec 2013 2012 2012 Goodwill 4,556 4,245 311 4,581 Capitalised development costs 1,643 1,809-166 1,751 Tangible fixed assets 3,758 4,380-622 3,805 Inventories 4,490 4,498-8 4,420 Accounts receivable 3,091 2,868 223 3,454 Other receivables 2,832 3,144-312 2,548 Accrued revenues 2,075 2,159-84 1,724 Advance payments from customers 830 865-35 553 Equity/assets ratio 41.6% 37.4% 39.0% Total net liquidity, 1,984 3,437-1,453 1,996
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AERONAUTICS HIGHLIGHTS 29%, % total 87% 23% 3% 40% Split Defence/Civil % sales Markets outside Sweden bookings Backlog 2013 2013 2012 % 2012 % bookings bookings 10,833 10,833 817 817 1,226 1,226 Split between larger orders Split between larger orders > 100 and smaller orders 99/1 48/52 > 100 and smaller orders 99/1 48/52 backlog backlog 20,373 20,373 12,489 63 12,489 63 1,765 1,765 1,419 24 1,419 24 income income 153 153 136 13 136 13 margin, % 8.7 9.6 margin, % 8.7 9.6 cash cash flow flow -482-482 -122 - -122 - Number Number FTEs FTEs 3,021 3,021 2,722 11 2,722 11
DYNAMICS - HIGHLIGHTS 14% Split Defence/Civil % sales 86%, % total 85% 92% 91% Markets outside Sweden bookings Backlog 2013 2013 2012 % 2012 % bookings bookings 753 753 554 36 554 36 Split between larger orders Split between larger orders > 100 and small orders 59/41 0/100 > 100 and small orders 59/41 0/100 backlog backlog 4,633 4,633 4,977-7 4,977-7 877 877 1,035-15 1,035-15 income income 72 72 108-33 108-33 margin, % 8.2 10.4 margin, % 8.2 10.4 cash cash flow flow 230 230 61 277 61 277 Number Number FTEs FTEs 1,575 1,575 1,520 4 1,520 4
ELECTRONIC DEFENCE SYSTEMS - HIGHLIGHTS 17% Split Defence/Civil % sales 98%, % total 77% 32% Markets outside Sweden bookings 57% Backlog 2013 2013 2012 % 2012 % bookings bookings 3,693 3,693 520 610 520 610 Split between larger orders Split between larger orders > 100 and small orders 72/28 0/100 > 100 and small orders 72/28 0/100 backlog backlog 8,043 8,043 6,204 30 6,204 30 1,038 1,038 1,181-12 1,181-12 income income -45-45 91 91 margin, % -4.3 7.7 margin, % -4.3 7.7 cash cash flow flow 296 296 185 60 185 60 Number Number FTEs FTEs 2,546 2,546 2,508 2 2,508 2
SECURITY AND DEFENCE SOLUTIONS - HIGHLIGHTS 21%, % total 81% 81% bookings 69% Split Defence / Civil % sales 85% Backlog 2013 2013 2012 % 2012 % bookings bookings 1,620 1,620 1,247 30 1,247 30 Split between larger orders Split between larger orders > 100 and small orders 45/55 30/70 > 100 and small orders 45/55 30/70 backlog backlog 7,485 7,485 7,609-2 7,609-2 1,271 1,271 1,323-4 1,323-4 income income 22 22 60-63 60-63 margin, % 1.7 4.5 margin, % 1.7 4.5 cash cash flow flow -299-299 -171-171 Number Number FTEs FTEs 3,092 3,092 2,995 3 2,995 3 Markets outside Sweden
SUPPORT AND SERVICES - HIGHLIGHTS 13%, % total 28% 19% bookings 74% Split Defence / Civil % sales 29% Backlog 2013 2013 2012 % 2012 % bookings bookings 2,066 2,066 955 116 955 116 Split between larger orders Split between larger orders > 100 and small orders 79/21 0/100 > 100 and small orders 79/21 0/100 backlog backlog 6,906 6,906 4,634 49 4,634 49 822 822 779 6 779 6 income income 88 88 67 31 67 31 margin, % 10.7 8.6 margin, % 10.7 8.6 cash cash flow flow 24 24 422-94 422-94 Number Number FTEs FTEs 1,815 1,815 1,769 3 1,769 3 Markets outside Sweden
COMBITECH - HIGHLIGHTS 7% 22%, % total 17% 54% 43% 2013 2013 2012 % 2012 % bookings bookings 387 387 246 57 246 57 backlog backlog 423 423 358 18 358 18 410 410 311 32 311 32 income income 44 44 39 13 39 13 margin, % 10.7 12.5 margin, % 10.7 12.5 cash cash flow flow 82 82-14 -14 Number Number FTEs FTEs 1,266 1,266 1,146 10 1,146 10 Split Defence / Civil % sales
OPERATING INCOME, EBIT/EBITDA 2013 Margin 2012 Margin Aeronautics EBIT 116 6.6% 78 5.5% EBITDA 153 8.7% 136 9.6% Dynamics EBIT 72 8.2% 108 10.4% EBITDA 83 9.5% 150 14.5% Electronic Defence Systems EBIT -45-4.3% 91 7.7% EBITDA 78 7.5% 197 16.7% Security & Defence Solutions EBIT 22 1.7% 60 4.5% EBITDA 54 4.2% 94 7.1% Support & Services EBIT 88 10.7% 67 8.6% EBITDA 93 11.3% 72 9.2% Combitech EBIT 44 10.7% 39 12.5% EBITDA 46 11.2% 41 13.2% Corporate EBIT 99-40 EBITDA 137-6 Saab Group EBIT 396 6.8% 403 7.2% EBITDA 644 11.0% 684 12.3%
COMPREHENSIVE INCOME 2013 2012 Net income for the period 262 283 Other comprehensive income: Revaluation net pension obligation 439 370 Translation differences -80-48 Net gain/loss on cash flow hedges 23 116 Tax attributable to other comprehensive income -101-128 Other comprehensive income for the period 281 310 Net comprehensive income for the period 543 593
OPERATING CASH FLOW VS STATEMENT OF CASH FLOW 2013 2012 cash flow -349-48 Cash flow from financing: Repayments loans -108-49 Dividend paid - - Cash flow from investments Interest-bearing: Short-term investments 722 682 Other financial investments 16-13 Cash flow for the period 281 572
STATEMENT OF FINANCIAL POSITION 31 Mar 31 Dec 2013 2012 Change Assets Intangible fixed assets 6,687 6,849-162 Tangible fixed assets 3,142 3,162-20 Lease assets 277 304-27 Biological assets 306 306 0 Investment properties 33 33 0 Shares in associated companies 302 300 2 Financial investments 195 193 2 Long-term receivables 114 138-24 Deferred tax assets 226 213 13 Total fixed assets 11,282 11,498-216 Inventories 4,490 4,420 70 Derivatives 569 514 55 Tax receivables 35 39-4 Accounts receivable 3,091 3,454-363 Prepaid expenses and accrued income 1,030 886 144 Other receivables 2,832 2,548 284 Liquid assets and short-term investments 5,106 5,579-473 Total current assets 17,153 17,440-287 Total assets 28,435 28,938-503
STATEMENT OF FINANCIAL POSITION 31 Mar 31 Dec 2013 2012 Change Shareholders equity and liabilities Parent Company s shareholders interest 11,739 11,168 571 Non-controlling interest 90 112-22 Total shareholders equity 11,829 11,280 549 Long-term interest-bearing liabilities 101 105-4 Other liabilities 312 315-3 Provisions for pensions 2,447 2,874-427 Other provisions 1,254 1,286-32 Deferred tax liabilities 294 184 110 Total long-term liabilities 4,408 4,764-356 Short-term interest-bearing liabilities 1,526 1,637-111 Advance payments from customers 830 553 277 Accounts payable 1,569 1,904-335 Derivatives 329 254 75 Tax liabilities 136 228-92 Other liabilities 706 760-54 Accrued expenses and deferred income 6,566 6,993-427 Provisions 536 565-29 Total current liabilities 12,198 12,894-696 Total shareholders equity and liabilities 28,435 28,938-503 Equity/assets ratio,% 41.6 39.0
CHANGES IN SHAREHOLDERS EQUITY Capital Other Net res. Translation Revaluation Retained Total excl. stock capital cash f. reserve reserve earnings non-. contr. hedges controlling intr. Opening balance, 1 January, 2013 1,746 543 531-226 11 8,563 11,168 Net comprehensive income for the period 26-77 611 560 Transactions with shareholders: Dividend - - Share matching plan 11 11 Closing balance, 31 March, 2013 1,746 543 557-303 11 9,185 11,739
NET LIQUIDITY 31 Mar 31 Dec 2013 2012 Assets Short-term investments 3,219 3,963 Liquid assets 1,887 1,616 Interest-bearing receivables 577 579 Total liquid investments 5,683 6,158 Liabilities Liabilities to credit institutions -1,107-1,104 Other interest-bearing liabilities -520-638 Provisions for pensions 1) -2,072-2,420 Total interest-bearing liabilities -3,699-4,162 Total net liquidity 1,984 1,996 1) Excluding provisions for pensions attributable to special employers contribution
LIQUIDITY 2013 Liquid assets at the beginning the year 1,616 cash flow -349 Short-term investments etc 722 Repayments loans -108 Dividend to shareholders - Other changes, translation differencies etc 6 Liquid assets March 31 1,887
NUMBER OF FULL TIME EQUIVALENTS APPENDIX Mar 31 Dec 31 Number 2013 2012 Change Aeronautics 3,021 2,932 89 Dynamics 1,575 1,568 7 Electronic Defence Systems 2,546 2,578-32 Security & Defence Solutions 3,092 3,105-13 Support & Services 1,815 1,805 10 Combitech 1,266 1,245 21 Corporate 691 667 24 Saab Group 14,006 13,900 106
Quarterly information 2013/2012 Q1 Q4 Q3 Q2 2013 2012 2012 2012 Aeronautics 1,765 1,678 1,275 1,704 Dynamics 877 1,512 873 1,359 Electronic Defence Systems 1,038 1,182 805 1,108 Security and Defence Solutions 1,271 2,019 1,280 1,354 Support and Services 822 1,091 697 844 Combitech 410 439 299 361 Corporate - - - - Internal sales -321-615 -330-498 Total 5,862 7,306 4,899 6,232 income Aeronautics 116 6.6% 125 7.4% 72 5.6% 84 4.9% Dynamics 72 8.2% 233 15.4% 105 12.0% 175 12.9% Electronic Defence Systems -45-4.3% -106-9.0% -78-9.7% 210 19.0% Security and Defence Solutions 22 1.7% 209 10.4% 59 4.6% 89 6.6% Support and Services 88 10.7% 215 19.7% 34 4.9% 94 11.1% Combitech 44 10.7% 44 10.0% 18 6.0% 21 5.8% Corporate 99 - -65-52 - 57 - Total 396 6.8% 655 9.0% 262 5.3% 730 11.7%
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