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INTERIM REPORT JANUARY - MARCH 2010 CEO ÅKE SVENSSON, CFO LARS GRANLÖF 21 APRIL, 2010 INTERIM REPORT, PRESS AND ANALYST MEETING
INTERIM REPORTJANUARY - MARCH 2010
CEO ÅKE SVENSSON, CFO LARS GRANLÖF21 APRIL, 2010INTERIM REPORT, PRESS AND ANALYST MEETING
PAGE 2
JANUARY – MARCH 2010
Global economic environment impactedSaab’s markets with continued delays in customers’ decision making processesOrder bookings from Swedish FMV for the continued development of GripenSales on expected levelProfitability affected by a provision in Security and Defence Solutions Focus on execution continues and full-year outlook remains unchanged
PAGE 3
STRENGTHENING THE COMPANY
Strategy• Stronger market focus• More focused business portfolio• Further increased efficiency
Structure• Five business areas • Harmonised processes in the functional dimension
Behaviour• Efficiency initiatives progressing to plan
1,500
250
600
650
2009 2010 201120082007
Billion+ programme,cost reduction plan (MSEK)
PAGE 4
AERONAUTICS – Q1 HIGHLIGHTS
Several orders from FMVGripen on field trials in IndiaGripen on the short-list in BrazilNotice of lay-offs in production (115 employees) Saab J 35 Draken turns 50 and Swedish aviation celebrates 100 years
PAGE 5
STRONG SWEDISH SUPPORT FOR GRIPEN
PAGE 6
”VISIBLE COSTS, INVISIBLE BENEFITS”
Gripen has repaid to Swedish society at least 2.6 times the initial investment, only in terms of technology transfer
Professor emeritus Gunnar Eliasson
PAGE 7
DYNAMICS – Q1 HIGHLIGHTS
RBS 70 contract with Finland Carl-Gustaf contract with Australia Defence ForceNotice of lay-offs in production (70 employees)
PAGE 8
ELECTRONIC DEFENCE SYSTEMS – Q1 HIGHLIGHTS
Upgrade and development of reconnaissance systems in GripenSuccessful field trials in the U.S. with new countermeasure system 20th Erieye radar system produced
PAGE 9
SECURITY AND DEFENCE SOLUTIONS –Q1 HIGHLIGHTS
Maintenance and support contract for British Army training systemsTraining systems for the Norwegian Armed ForcesAgreement for remotely operated tower trials in Australia
PAGE 10
PROVISIONS WITHIN CIVIL SECURITY
Charges of MSEK 160, including write-downs of MSEK 20, mainly related to a project within civil securitySaab has underestimated the complexity of the projectExtensive review currently ongoing in cooperation with the customer
PAGE 11
SUPPORT AND SERVICES – Q1 HIGHLIGHTS
System maintenance order for GripenSeveral smaller and mid-sized ordersSupport of Swedish coast guard operations in Somalia
PAGE 12
DIVERSITY, 30/70 GOAL FOR 2015
Anne Gynnerstedt,Head of Group Legal Affairs
Lena Olving, Chief Operating Officer
Gunilla Fransson, Head of Business Area
Cecilia Schön Jansson,Head of Group Communications
PAGE 13
OUTLOOK 2010
We remain cautious regarding order intake and foresee sales on the same level as 2009Due to the effect of continued business improvement activities we expect profitability to increaseOur long-term financial targets remain
JANUARY - MARCH 2010FINANCIALS
LARS GRANLÖF21 APRIL, 2010FINANCIALS, JANUARY - MARCH 2010
PAGE 15
ORDER BOOKINGS AND ORDER BACKLOG
Jan-Mar Jan-Mar 31 MarchMSEK 2010 2009 2010
Aeronautics 2,082 1,090 15,855Dynamics 634 969 6,623Electronic Defence Systems 1,101 403 7,275Security and Defence Solutions 920 1,509 7,586Support and Services 924 620 4,196Corporate/Internal -183 -490 -1,981Saab Group 5,478 4,101 39,554
Order Order Orderbookings bookings backlog
PAGE 16
ORDER BACKLOG
NLAW
RBS70
AT4/Carl-Gustaf
Tornado
ANZAC
Civil security
solutions
Airborne surveillance
system
Order backlog duration(SEK billion):
2010: 15.4 2011: 9.8 2012: 5.72013: 3.2After 2013: 5.5
Total: 39.6
PAGE 17
SALES
AeronauticsDynamicsElectronic Defence SystemsSecurity and Defence SolutionsSupport and Services Corporate/InternalSaab Group
Jan-Mar Jan-MarMSEK 2010 2009 Change
1,703986940
1,200743
-1885,384
1,8431,005
9881,060
814-298
5,412
-8%-2%-5%13%-9%
-1%
PAGE 18
OPERATING INCOME, EBIT
Aeronautics 53 3.1% 5.6% 3 0.2% 0.2% Dynamics 85 8.6% 8.6% 75 7.5% 7.5% Electronic Defence Systems 37 3.9% 3.9% 27 2.7% 2.7%Security and Defence Solutions -96 -8.0% -8.0% 11 1.0% 1.0%Support and Services 56 7.5% 7.5% 103 12.7% 12.7%Corporate -9 -69
Saab Group 126 2.3% 3.1% 150 2.8% 2.8%
Jan-Mar adj. Jan-Mar adj.MSEK 2010 margin margin 2009 margin margin
PAGE 19
INCOME STATEMENT
Sales 5,384 5,412Cost of goods sold -4,113 -4,047Gross income 1,271 1,365Gross margin 23.6% 25.2%Other operating income 36 40Marketing expenses -385 -424Administrative expenses -316 -334Research and development costs -459 -407Other operating expenses -16 -59Share in income ofassociated companies -5 -31Operating income 126 150Operating margin 2.3% 2.8%Share in income ofassociated companies - -Result from financial investments -27 -187Income before taxes 99 -37Taxes -27 10Net income 72 -27
Jan-Mar Jan-MarMSEK 2010 2009
Earnings per share after dilution, SEK 0.63 -0.24Tax rate 27% 27%
PAGE 20
STATEMENT OF FINANCIAL POSITION
31 Mar 31 Dec ChangeMSEK 2010 2009
AssetsFixed assets 13,625 14,110 -485Current assets 15,170 16,320 -1,150 Total assets 28,795 30,430 -1,635
Shareholders’ equity and liabilitiesShareholders’ equity 10,908 10,682 226Long-term liabilities 4,503 4,468 35Short-term liabilities 13,384 15,280 -1,896Total liabilities 17,887 19,748 -1,861Total shareholders’ equity & liabilities 28,795 30,430 -1,635
Equity/assets ratio 37.9% 35.1%
Total net debt 717 634 83
PAGE 21
SUMMARISED CASH FLOW JANUARY-MARCH 2010
Cash flow from operations 594 31 625 328
Inventories -295 2 -293 -483Receivables 199 -39 160 495Advances -72 - -72 310Liabilities -153 -165 -318 -904Provisions -86 -23 -109 -97Change in working capital -407 -225 -632 -679
Intangible assets -27 - -27 -26Tangible assets -49 - -49 -50Lease assets - 9 9 -Acquisitions - - - -Divestments - - - -Acq/sales of financial assets -5 6 1 -29Cash flow from investments -81 15 -66 -105
Operating cash flow 106 -179 -73 -456
ActualMSEK Saab SAL/M&A 2010 2009
APPENDIX
PAGE 23
AERONAUTICS – HIGHLIGHTS
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009
Order bookings 2,082 1,090 91 3,417Split between larger orders > MSEK 100 and smaller orders 93/7 68/32 - -
Order backlog 15,855 18,780 -16 3791)
Sales 1,703 1,843 -8 7,571Operating income/loss 53 3 - 6Operating margin, % 3.1 0.2 0.1
Operating cash flow -33 -310 - -434Number of employees 2,988 3,091 -3 -271)
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009
Order bookings 2,082 1,090 91 3,417Split between larger orders > MSEK 100 and smaller orders 93/7 68/32 - -
Order backlog 15,855 18,780 -16 3791)
Sales 1,703 1,843 -8 7,571Operating income/loss 53 3 - 6Operating margin, % 3.1 0.2 0.1
Operating cash flow -33 -310 - -434Number of employees 2,988 3,091 -3 -271)
1) Refers to quarterly change
31%
Order bookingsSales Backlog
46%
5%
65%
Sales, % of total
Markets outsideSweden
87%
Split Defence/Civil
% of sales
PAGE 24
DYNAMICS - HIGHLIGHTS
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009Order bookings 634 969 -35 3,133Split between larger orders 57/43 51/49 - -> MSEK 100 and smaller orders
Order backlog 6,623 8,447 -22 -3571)
Sales 986 1,005 -2 4,580Operating income 85 75 13 269Operating margin, % 8.6 7.5 5.9
Operating cash flow -11 103 - 369Number of employees 1,682 1,805 -7 -571)
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009Order bookings 634 969 -35 3,133Split between larger orders 57/43 51/49 - -> MSEK 100 and smaller orders
Order backlog 6,623 8,447 -22 -3571)
Sales 986 1,005 -2 4,580Operating income 85 75 13 269Operating margin, % 8.6 7.5 5.9
Operating cash flow -11 103 - 369Number of employees 1,682 1,805 -7 -571)
1) Refers to quarterly change
18%
Order bookingsSales Backlog
60% 70% 90%
Sales, % of total
Markets outsideSweden
93%
Split Defence/Civil
% of sales
PAGE 25
ELECTRONIC DEFENCE SYSTEMS
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009
Order bookings 1,101 403 173 2,625Split between larger orders 44/56 0/100 - -> MSEK 100 and smaller orders
Order backlog 7,275 8,775 -17 1161)
Sales 940 988 -5 4,670Operating income 37 27 37 24Operating margin, % 3.9 2.7 0.5
Operating cash flow 375 333 13 506Number of employees 2,553 2,615 -2 -481)
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009
Order bookings 1,101 403 173 2,625Split between larger orders 44/56 0/100 - -> MSEK 100 and smaller orders
Order backlog 7,275 8,775 -17 1161)
Sales 940 988 -5 4,670Operating income 37 27 37 24Operating margin, % 3.9 2.7 0.5
Operating cash flow 375 333 13 506Number of employees 2,553 2,615 -2 -481)
1) Refers to quarterly change
14%
Order bookingsSales Backlog
66% 46% 71%
Sales, % of total
Markets outsideSweden
Split Defence/Civil
% of sales 99%
PAGE 26
SECURITY AND DEFENCE SOLUTIONS HIGHLIGHTS
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009
Order bookings 920 1,509 -39 6,045Split between larger orders 19/81 58/42 - -
> MSEK 100 and smaller orders
Order backlog 7,586 7,676 -1 -1601)
Sales 1,200 1,060 13 5,800Operating income -96 11 - 278Operating margin, % -8.0 1.0 4.8
Operating cash flow -15 -193 - -217Number of employees 2,563 2,462 4 -51)
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009
Order bookings 920 1,509 -39 6,045Split between larger orders 19/81 58/42 - -
> MSEK 100 and smaller orders
Order backlog 7,586 7,676 -1 -1601)
Sales 1,200 1,060 13 5,800Operating income -96 11 - 278Operating margin, % -8.0 1.0 4.8
Operating cash flow -15 -193 - -217Number of employees 2,563 2,462 4 -51)
1) Refers to quarterly change
22%
Order bookingsSales Backlog
72% 89%80%
Markets outside Sweden
Sales, % of totalSplit Defence / Civil
% of sales
66%
PAGE 27
SUPPORT AND SERVICES - HIGHLIGHTS
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009
Order bookings 924 620 49 4,057Split between larger orders 17/83 0/100 - -> MSEK 100 and smaller orders
Order backlog 4,196 3,262 29 1851)
Sales 743 814 -9 3,564Operating income 56 103 -46 410Operating margin, % 7.5 12.7 11.5
Operating cash flow 250 60 - 81Number of employees 1,768 1,796 -2 191)
Jan-Mar Jan-Mar Jan-DecMSEK 2010 2009 %-change 2009
Order bookings 924 620 49 4,057Split between larger orders 17/83 0/100 - -> MSEK 100 and smaller orders
Order backlog 4,196 3,262 29 1851)
Sales 743 814 -9 3,564Operating income 56 103 -46 410Operating margin, % 7.5 12.7 11.5
Operating cash flow 250 60 - 81Number of employees 1,768 1,796 -2 191)
1) Refers to quarterly change
12%
Order bookingsSales Backlog
26%9%
31%
Markets outside Sweden
Sales, % of totalSplit Defence / Civil
% of sales
76%
PAGE 28
SALES BY MARKET
44%
30%
8%
6%
7%5%
Air Land
Naval Civil Security
Commercial Aeronautics Others
Jan-March 2010
PAGE 29
OPERATING INCOME, EBIT/EBITDA
Aeronautics EBIT 53 3.1% 3 0.2%EBITDA 114 6.7% 65 3.5%
Dynamics EBIT 85 8.6% 75 7.5%EBITDA 124 12.6% 118 11.7%
Electronic Defence Systems EBIT 37 3.9% 27 2.7%EBITDA 171 18.2% 151 15.3%
Security & Defence Solutions EBIT -96 -8.0% 11 1.0%EBITDA -53 -4.4% 37 3.5%
Support & Sevices EBIT 56 7.5% 103 12.7%EBIDA 60 8.1% 107 13.1%
Corporate EBIT -9 -69EBITDA 18 -43
Saab Group EBIT 126 2.3% 150 2.8%EBITDA 434 8.1% 435 8.0%
Jan-Mar Jan-MarMSEK 2010 margin 2009 margin
PAGE 30
COMPREHENSIVE INCOME
Net income/loss for the period 72 -27
Other comprehensive income:Translation differences for the period 7 140Net gain/loss on cash flow hedges 201 -118Share of other comprehensive income in associated companies - -Tax attributable to comprehensive income -53 31
Other comprehensive income/loss for the period 155 53
Net comprehensive income/loss for the period 227 26
Jan-Mar Jan-MarMSEK 2010 2009
PAGE 31
OPERATING CASH FLOW VS STATEMENT OF CASH FLOW
Operating cash flow -73 -456
Cash flow from financing:Establishment of pension fund - -Loans raised/amortized -1,290 20Dividend - -Share repurchase - -
Cash flow from investments –interest bearing:Short-term investments 551 -Financial investments 74 125
Statement of Cash flow -738 -311
Jan-Mar Jan-Mar MSEK 2010 2009
PAGE 32
31 Mar 31 DecMSEK 2010 2009 Change
AssetsIntangible fixed assets 6,899 7,108 -209Tangible fixed assets 3,151 3,174 -23Lease assets 1,390 1,464 -74Biological assets 256 256 0Investment properties 25 25 0Shares in associated companies 354 356 -2Financial investments 102 116 -14Long-term receivables 1,265 1,327 -62Deferred tax assets 183 284 -101Total fixed assets 13,625 14,110 -485
Inventories 5,042 4,698 344Derivatives 1,046 1,002 44Tax receivables 30 43 -13Accounts receivables 2,940 2,837 103Prepaid expenses and accrued income 945 705 240Other receivables 4,121 4,696 -575Liquid assets and short-term investments 728 2,014 -1,286Total current assets 14,852 15,995 -1,143Assets held for sale 318 325 -7Total assets 28,795 30,430 -1,635
STATEMENT OF FINANCIAL POSITION
PAGE 33
31 Mar 31 DecMSEK 2010 2009 Change
Shareholders’ equity and liabilitiesParent Company´s shareholders’ interest 10,761 10,542 219Non-controlling interest 147 140 7Total shareholders´ equity 10,908 10,682 226Long-term interest-bearing liabilities 1,125 1,126 -1Other liabilities 295 287 8Provision for pensions 4 4 0Other provisions 2,225 2,146 79Deferred tax liabilities 854 905 -51Total long-term liabilities 4,503 4,468 35
Short-term interest-bearing liabilities 1,234 2,519 -1,285Advance payments from customers 372 442 -70Accounts payable 1,356 1,730 -374Derivatives 1,105 1,181 -76Tax liabilities 215 212 3Other liabilities 680 746 -66Accrued expenses and deferred income 7,733 7,668 65Provisions 660 753 -93Total current liabilities 13,355 15,251 -1,896Liabilities related to assets held for sale 29 29 0Total shareholders’ equity and liabilities 28,795 30,430 1,635
Equity/assets ratio,% 37.9 35.1
STATEMENT OF FINANCIAL POSITION
PAGE 34
STATEMENT OF FINANCIAL POSITION, 31 MARCH, 2010 SUBDIVIDED
Saab Aircraft Elimi- SaabMSEK Saab Leasing nations GroupIntangible assets 6,899 - - 6,899Tangible assets 3,432 - - 3,432Lease assets 4 1,386 - 1,390Long-term interest-bearing receivables 422 - - 422Shares, etc 1,924 - -1,500 424Other long-term receivables 860 15 - 875Deferred tax assets - 218 -35 183Inventories 4,988 54 - 5,042Short-term interest-bearing receivables 496 1,402 -1,402 496Other current assets 7,452 88 - 7,540Derivatives 1,046 - - 1,046Liquid assets and short-term investments 714 14 - 728Assets held for sale 318 - - 318Total assets 28,555 3,177 -2,937 28,795Shareholders’ equity 10,824 1,584 -1,500 10,908Provision for pensions 4 - - 4Other provisions 2,106 779 - 2,885Deferred tax liabilities 889 - -35 854Interest-bearing liabilities 3,761 - -1,402 2,359Advance payments from customers 372 - - 372Derivatives 1,105 - - 1,105Other liabilities 9,494 814 - 10,308Total shareholders’ equity & liabilities 28,555 3,177 -2,937 28,795
PAGE 35
CHANGES IN SHAREHOLDERS EQUITY
Capital Other Net res. Translation Revaluation Retained Total excl.stock capital on cash f. reserve reserve earnings non-.
contr. Hedges controlling intr.
Opening balance, 1 January, 2010 1,746 543 84 -21 51 8,139 10,542
Total net comprehensive income of the period 145 6 69 220
Transactions with shareholders:
Dividend - -
Repurchase of shares - -
Share matching plan 11 11
Acquisitions and sale of operations -12 -12
Closing balance, 31 March, 2010 1,746 543 229 -15 51 8,207 10,761
PAGE 36
NET LIQUIDITY / NET DEBT
LiabilitiesLong-term interest-bearing liabilities -1,125 -1,126Short-term interest-bearing liabilities -1,234 -2,519Provisions for pensions -4 -4Total interest-bearing liabilities -2,363 -3,649
AssetsShort-term investments - 551Liquid assets 728 1,463Interest-bearing receivables 918 1,001Total liquid investments 1,646 3,015
Total net liquidity/debt (-) -717 -634
31 March Year-EndMSEK 2010 2009
PAGE 37
LIQUIDITY
Liquid investments at the beginning of the year 1,463
Operating cash flow -73Financial investments 625Loans raised/amortized -1,290Share repurchase -Dividend to shareholders -Other changes, translation differencies etc 3
Liquid investments 31 March 728
MSEK 2010
PAGE 38
NUMBER OF EMPLOYEES
31 Mar 31 DecMSEK 2010 2009 Change
Aeronautics 2,988 3,015 -27Dynamics 1,682 1,739 -57Electronic Defence Systems 2,553 2,601 -48Security & Defence Solutions 2,563 2,568 -5Support & Services 1,768 1,749 19Corporate 1,411 1,487 -76Saab Group 12,965 13,159 -194
APPENDIX
