Håkan Buskhe President and CEO

24 April 2015

INTERIM REPORT JANUARY-MARCH 2015 Håkan Buskhe President and CEO

23 October 2015

INTERIM REPORT JAN-SEPT 2015

HIGHLIGHTS Q3 • Gripen NG contract with Brazil effective; order intake BSEK 39.3

• First order for Carl-Gustaf M4, UK orders for Giraffe strengthens position in the UK

• Continued investments in T-X program* and a loss in business areas Electronic Defence Systems and Support and Services in the quarter

• Positive operating cash flow in Q3 due to milestone payments related to Gripen programmes and Saab Kockums

• Organisational change as of 1 January: business area Security and Defence Solutions dissolved

• Increased focus on performance management

PROFITABLE GROWTH

PERFOR-MANCE

PORTFOLIO & PEOPLE

*Saab cooperates with Boeing in order to participate in the U.S. Air Force’s upcoming procurement regarding trainer aircraft

STRENGTHENED MARKET POSITION

2 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

MAJOR OPPORTUNITIES IN A CHALLENGING MARKET

3 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

GRIPEN BRAZIL UPDATE

• Order of BSEK 39.3 from Brazil regarding 36 Gripen NG booked in Q3

• Industrial cooperation with Brazilian industry in areas such as R&D and transfer of technology important

• 46 Brazilian engineers and technicians now in Sweden for education and on-the-job training

• The programme will contribute to an independent, advanced defence industrial base in Brazil

• Deliveries planned 2019-2024

4 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

FINANCIAL KEY DATA JAN-SEP 2015

5

2014 2015

54,910

105,486

2014 2015

2014 2015

2014 2015

Order backlog Sales

Operating margin Free cash flow

92%

6%

5.6%

3.2%

-2,100

-1,595

16,102 17,116

COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED © Saab

FINANCIAL KEY DATA Q3 2015

6

Q3 2014 Q3 2015

2,073

43,603

Q3 2014 Q3 2015

Q3 2015

Q3 2014 Q3 2015

Order bookings Sales

Operating margin Free cash flow

>2,000% 13%

5.0%

3.2%

-710

487

5,130

5,787

Q3 2014

COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED © Saab

7 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

• Gripen – a new generation

• World’s most modern submarine programme – A26

• New suite of radars and sensors

• Carl Gustaf M4

• Saab’s Remote Tower operational

• Cooperation with Boeing regarding trainers for the U.S Air Force – T-X program

10%

15%

20%

25%

30%

FY '10 FY '11 FY '12 FY '13 FY '14

INVESTMENTS IN CUTTING EDGE TECHNOLOGY 2010-2015

Total R&D expenses % of sales

TODAY: MAJOR GROWTH OPPORTUNITY

0

20

40

60

80

100

120

2008 2009 2010 2011 2012 2013 2014 2015

SEK

bn

Order backlog development

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014 9M2014

9M2015

SEK

bn

Sales

8

Q3

COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED © Saab

YTD: +6% Q3: +13%

ADAPTING ORGANISATION FOCUS ON MARKETING AND EXECUTION

• Greater focus on growth-generating business

• Alignment of functional processes

• As of 1 January 2016 business area Security and Defence Solutions (SDS) dissolved; business units moved into other business areas

• Business unit Saab Kockums to report to CEO

• Strengthened performance management and accountability

• Increased efficiency and value added through internal synergies

• Better adapted organisation and management for increased market focus

• Increased flexibility

9 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

Brasilia, Brazil

Washington DC, USA

Stockholm, Sweden

London, United Kingdom

Bangkok, Thailand

NEW ORGANISATION AS OF 1 JANUARY 2016

Aeronautics

Support and Services now including Critical Systems &

Communication Solutions from SDS*

Dynamics now including Training and

Simulation from SDS*

Saab Kockums* business unit, reporting directly to CEO

Electronic Defence Systems now including Traffic Management and

Combat Systems and C4I Solutions from SDS*

Industrial Products and Services

BUSINESS AREAS

CEO

GROUP FUNCTIONS MARKET AREAS

Asia Pacific

North America

Europe, Middle East & Africa

Latin America

Nordic & Baltic

BOARD

Our headquarters

*changes marked below with an apostrophe

10 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

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.

11 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

FINANCIALS

MAGNUS ÖRNBERG EVP and CFO

12 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

SUMMARY

• Record high order backlog, focus on execution

• Sales increase driven by Gripen and Saab Kockums

• Margins in the period impacted by loss in Dynamics and continued investments in the T-X program

• Cash flow positive in Q3, driven by milestone payments related to Gripen and A26 submarine programme

• Large orders impact financial position

13 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

FINANCIAL KEY DATA

MSEK

Jan-Sep

2015 Jan-sep

2014 Change,

% Full year

2014

Order bookings 62,599 10,199 514 22,602

Order backlog 105,486 54,910 92 60,128

Sales 17,116 16,102 6 23,527

Operating income 553 901 -39 1,659

Operating margin, % 3.2 5.6 7.1

Net income 293 582 -50 1,168

Free cash flow -1,595 -2,100 -1,094

14 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

ORDER BACKLOG

Order backlog duration, SEK bn

30 Sept 2015 31 Dec 2014 30 Sept 2014 2015: 7.7 2015: 17.8 2014: 6.9 2016: 18.2 2016: 10.2 2015: 14.4 2017: 14.0 2017: 5.7 2016: 8.4 2018: 10.9 2018: 5.6 2017: 5.0 After 2018: 54.7 After 2018: 20.8 After 2017: 20.2 Total: 105.5 Total: 60.1 Total: 54.9

0

20,000

40,000

60,000

80,000

100,000

120,000

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 Q3'15

MSE

K

Order backlog development

40%

60%

Order backlog distribution

SwedenRoW

15 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

ORDER BACKLOG INCREASED IN ALL BUSINESS AREAS Q3 VS. DEC ’14

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

Q2'11

Q3'11

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

MSE

K

Large ordersSmall orders*Book-to-bill ratio

* Small orders = <MSEK 100

ORDER SIZE DISTRIBUTION

16 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

ORDER BOOKINGS DISTRIBUTION

Brazil order of Gripen, BSEK 39.3, positive impact on Aeronautics, EDS and S&S Continued strong order intake in Dynamics SDS received order for submarine A26 Strong inflow small and midsized orders

501 1,257 1,637

3,900

2,085 1,931

3,530

5,467

12,689

3,813 2,753

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Aero. Dyn. EDS SDS S&S IPS

MSE

K

Jan-Sep '14 Jan-Sep '15

21%

6%

1% 65%

5% 1% 1%

Order bookings per region

SwedenEU excl SERoEAmericasAsiaAfricaAustralia etc

17 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

40,000 36,350

SALES

3,621

2,045

2,898

3,763

2,531 2,448

4148

1961

2528

4,312

2743 2540

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Aero. Dyn. EDS SDS S&S IPS

MSE

K

Jan-Sep '14 Jan-Sep '15

46%

17%

2%

15%

13%

2% 4%

Sales per region

SwedenEU excl SERoEAmericasAsiaAfricaAustralia etc

Sales increase in Aeronautics due to invoicing related to Gripen

Sales decrease in EDS due to lower order bookings in 2013 and 2014

Strong sales in Saab Kockums (SDS)

18 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

OPERATING INCOME

238

38

125 134

252

33

204

-75

26

170 152

109

-100

-50

0

50

100

150

200

250

300

Aero. Dyn. EDS SDS S&S IPS

MSE

K

Jan-Sep '14 Jan-Sep '15

6.6% 4.9% 1.9% 10.0% 5.5% 1.3% 4.3% 4.3% 1.0% 3.6% 3.9% Continued investments in T-X development, Aeronautics

Dynamics loss in Jan-Sep 2015 due to low level of sales, positive earnings in Q3

19 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

CASH FLOW

Jan-September 2015 MSEK Cash flow from operating activities before changes in working capital

1,019

Change in working capital -1,390 Investing activities -782 Operational cash flow -1,153

Tax and other financial items -428 Acquisitions and sale of subsidiaries

-14

Free cash flow -1,595

-2500

-2000

-1500

-1000

-500

0

500

1000

1500

Cash flow from operating activities before changes in working capital

Change in working capital

Investing activities

Tax and other financial items

Acq. and sale of subsidiaries

20 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

CASH FLOW IMPACT FROM WORKING CAPITAL

21 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

-1200

-800

-400

0

400

800

Q1 Q2 Q3

Cash flow impact from working capital per quarter

-920 -1,013

543

MSEK

• Working capital reduced due to milestone payments in the A26 programme and payments for Gripen Brazil

Q3

FINANCIAL POSITION Development 9M 2015, MSEK

Net liquidity (+) / Net debt (-), 31 December 2014 -2,113 Cash flow from operating activities -799

Change in net pension obligation 383

Net investments -796

Financial lease -444

Dividend -501

Currency impact and unrealised results from financial investments

-57

Net liquidity (+) / Net debt (-), 30 September 2015 -4,327

Net pension obligation, 30 September 2015 2,145

Total interest-bearing assets, 30 September 2015 -292

Liquidity -2,474

Equity/assets ratio, 30 September 2015 35.1

22 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

FOCUS GOING FORWARD

• Secure synergies from new organisational set-up

• Execute on order backlog

• Increase efficiency in project execution

• Strengthened alignment of functional processes

• Reduce overhead costs

• Cash flow improvement

FOCUS ON PERFORMANCE MANAGEMENT

23 COMPANY UNCLASSIFIED | NOT EXPORT CONTROLLED

© Saab

Deliver on long-term targets

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