SAAB ANNUAL REPORT 2001
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Saab AB (publ)SE-581 88 Linköping, SwedenTel +46-13-18 00 00www.saab.se
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Saab is one of the world’s leadinghigh-technology companies, with itsmain operations focusing on defence,aviation and space.
The Group covers a broad spectrumof competence and capability in sys-tems integration.
Saab develops, manufactures and delivers advanced products and ser-vices for the defence market, as wellas for those commercial marketswhere there is a clear demand forits capabilities.
The Group’s own strength and stra-tegic partnerships enable it both tocompete and collaborate in interna-tional markets.
Saab has the world as its market,but research, development and pro-duction are carried out principallyin Sweden.
The Group has a total of approxi-mately 14,000 employees.Total annual sales are SEK 16,000 million.Research and development corre-sponds to about 25 per cent ofturnover.
Saab consists of the business areasSaab Systems and Electronics, SaabAerospace, Saab Technical Supportand Services, Saab Bofors Dynamics,Saab Ericsson Space and Saab Avia-tion Services.
Saab
high-technology
a broad spectrum of competence
and capability in systems integration
strategic partnershipsthe world as its market
1
Contents
Operations
Saab 2001 2
Overview of Saab’s business areas 4
Comment by the Chairman of the Board 6
Comment by the Chief Executive Officer 7
Saab and the defence market 10
Employees 13
Saab Systems and Electronics 16
Saab Aerospace 20
Saab Technical Support and Services 24
Saab Bofors Dynamics 28
Saab Ericsson Space 32
Saab Aviation Services 35
The Saab share 38
Environmental report 40
Saab – over 60 years of high technology 41
Formal Annual Report
Financial review 42
Income statement, balance sheet
and statement of cash flows 51
Notes to the financial statements
and accounting principles 55
Auditors’ report 69
Board of Directors and Auditors 70
Group Management 72
Addresses 73
aviation
14,000 employees sales of approximately SEK 16,000 million
advanced products and services for the
defence market,as well as for commercial markets
main operations in defence
space
Saab 2001
Highlights of 2001
Continued streamlining of the Group through
major divestments and development of core
businesses
AerotechTelub and Saab Avionics become wholly
owned subsidiaries
Breakthrough for Gripen in NATO market
Hungary’s decision to lease 14 Gripen
Czech Republic’s decision to begin negotiations
on 24 Gripen
Several important breakthrough orders interna-
tionally and in the home market
Gripen for Hungary
Finland’s order and Germany’s selection of
RBS15 anti-ship missile
Combat training centre to Norway
Countermeasure equipment for U.S. Air Force’s
F-15 aircraft
Reconnaissance pods and integration of new
precision engagement weapons for Swedish
Air Force’s Gripen fighters
Successful realisation of the value of defence
technology in non-defence markets – sale of
Saab Marine Electronics generated capital gain
of SEK 650 m.
Saab becomes supplier and partner to NH
Industries in the helicopter area – order value
of approximately SEK 2 billion
Customised high technology
For over 60 years Saab has developed high-technolo-
gy defence and non-defence systems. Today’s oper-
ations are focused primarily on defence, aviation and
space. Saab’s products and systems can be found
around the world and our
share of foreign market
sales – at nearly 50 per
cent – is growing steadily.
Saab is an international
company that works with
customers and markets
that are becoming more international.
The defence market is Saab’s home market. It is
where Saab has the most experience and longest
customer relationships. At the same time, Saab is a
knowledge company with
a unique range of compe-
tencies. The company is
continuously striving to
enhance its ability to reach
new markets and to find
non-defence applications
for defence technology.
Saab is one of the world’s leading high-techno-
logy companies. The goal is to combine this with
world-leading attention to customer needs.
70%30%Non-defence
Defence
60%40%Foreignmarkets
Sweden
Group sales
Group sales
2
As expected,
our income
in 2001 was well in line
with the previous year and
with a strong cash flow.
Bengt Halse
“
Key figuresPro
forma
2001 2000 1999
Net sales, SEK m. 15,689 17,840 18,018Foreign market sales, % 40 48 48
Operating income, SEK m. 1,594 1,533 1,125Operating margin, % 10.2 8.6 6.2Income after financial items,SEK m. 1,554 1,448 1,116
Net income, SEK m. 1,127 1,038 735
Earnings per share, SEK 10.59 9.75 6.90Dividend per share, SEK 1) 3.25 3.00 2.50
Cash flow from operating activities, SEK m. 1,642 –1,908 N/aReturn on capital employed, % 15.5 14.6 N/aReturn on shareholders’ equity, % 18.3 20.0 N/aEquity to assets ratio, % 22.3 18.2 12.8
Order bookings, SEK m. 15,274 28,141 15,267Order backlog on December 31, SEK m. 40,034 41,091 29,891
Capital expenditures in property,plant and equipment, SEK m. 532 1,077 652Research and development,SEK m. 3,819 3,808 4,462
No. of employees at year-end 14,028 15,453 16,665
For definitions, see page 57.1) 2001 Board proposal.
3
Operating income/operating margin
'99Pro forma
'00 '01
SEK m.
0
500
1,000
1,500
2,000%
0
2.5
5
7.5
10Margin
Net sales
'99Pro forma
'00 '01
SEK m.
0
5,000
10,000
15,000
20,000
Asia
Sales by market area
Latin America
Australia, etc.
North America
Other Europe
Other EU
SwedenSpace
Aviation Services
Otheroperations
TechnicalSupport andServices
Aerospace
Sales by business area
Systems andElectronics
Dynamics
0
10,000
20,000
30,000
40,000
Order backlog
'99Pro forma
'00 '01
SEK m.
Order bookings
'99Pro forma
'00 '01
SEK m.
0
10,000
20,000
30,000
40,000
0
5,000
10,000
15,000
20,000
Employees
'99Pro forma
'00 '01
No.
0
1,000
2,000
3,000
4,000
Research and development
'99Pro forma
'00 '01
SEK m.
4
SAAB SYSTEMS AND ELECTRONICS
Net sales and Share of Saab’s sales Operating areas Market operating income
SAAB AEROSPACE
SAAB TECHNICAL SUPPORT AND SERVICES
SAAB BOFORS DYNAMICS
SAAB ERICSSON SPACE
SAAB AVIATION SERVICES
Primarily armed forces around
the world.The Swedish defence
is the single largest customer.
Other major customers include
the armed forces in the U.S.,
Germany, Australia, the UK,
Switzerland and the other
Nordic countries.
Gripen competes in fighter
aircraft procurements around
the world. In commercial
operations, the customers
are the two remaining manu-
facturers of large passenger
aircraft, Airbus and Boeing.
The Swedish defence, govern-
ment agencies in Sweden, the
defence industry and other
high-technology companies
are the main customers for
the business area’s services.
Armed forces around the
world.The Swedish defence
is the single largest customer.
Other major customers in-
clude the Norwegian, U.S.,
German, British, Finnish, French
and Brazilian armed forces.
Customers are in publicly fi-
nanced space research, such
as ESA and NASA, and among
commercial space companies,
such as Alcatel,Astrium,
Boeing and Lockheed Martin.
Customers are airlines
around the world, with an
emphasis on North America.
Commercial aircraft mainte-
nance primarily in Australia
and Southeast Asia.
Saab’s business areas, overview
'99Pro forma
'00 '01
SEK m. SEK m.
0
1,000
2,000
3,000
4,000
0
100
200
300
400
'99Pro forma
'00 '010
1,000
2,000
3,000
4,000
0
100
200
300
400SEK m. SEK m.
'99Pro forma
'00 '010
1,000
2,000
3,000
4,000
0
100
200
300
400SEK m. SEK m.
'99Pro forma
'00 '010
1,000
2,000
3,000
4,000
0
100
200
300
400SEK m. SEK m.
'99 '00 '010
1,000
2,000
3,000
4,000
0
100
200
300
400SEK m. SEK m.
'00 '010
1,000
2,000
3,000
4,000
0
100
200
300
400SEK m. SEK m.
Electronic warfare andsignature management
Avionics
Training and simulationCommercial systems
Command andcontrol systems
Commercial aircraft
Military aricraft
Technical services
Maintenance
Customisedsystem deliveries
Air defenceLand
Infantry
Underwater
Air/Sea
Microwave products
Mechanical products
Digital products
Customer supportSaab regional aircraft
Commercial aircraftmaintenance
Foreign markets 47%
Foreign markets 5%
Foreign markets 18%
Foreign markets 47%
Foreign markets 93%
Foreign markets 90%
5
Order backlog and order bookings Highlights of the year
2001 2000 1999
Net sales 3,964 4,364 4,294
Operating income 260 289 199
Operating margin, % 6.6 6.6 4.6
Order bookings 4,262 5,523 4,126
Order backlog 8,591 8,689 7,250
Capital expenditures 118 85 89
R&D 1,060 1,136 1,361
No. of employees 2,744 3,023 3,081
2001 2000 1999
Net sales 4,097 3,921 3,964
Operating income 351 333 450
Operating margin, % 8.6 8.5 11.4
Order bookings 4,122 12,171 3,752
Order backlog 27,122 27,097 18,847
Capital expenditures 125 137 157
R&D 1,449 1,513 1,907
No. of employees 4,121 4,146 4,196
2001 2000 1999
Net sales 3,144 2,932 2,367
Operating income 195 182 146
Operating margin, % 6.2 6.2 6.2
Order bookings 3,096 3,103 2,099
Order backlog 1,046 1,268 773
Capital expenditures 119 75 77
R&D 123 91 136
No. of employees 3,061 3,147 2,705
2001 2000 1999
Net sales 2,493 2,348 3,393
Operating income 85 46 –39
Operating margin, % 3.4 2.0 neg.
Order bookings 2,280 2,853 2,793
Order backlog 4,088 4,219 3,765
Capital expenditures 62 57 71
R&D 934 788 796
No. of employees 1,903 1,884 2,565
2001 2000 1999
Net sales 800 713 676
Operating income 29 53 65
Operating margin, % 3.6 7.4 9.6
Order bookings 757 765 706
Order backlog 772 816 764
Capital expenditures 29 25 41
R&D 218 205 187
No. of employees 678 663 664
2001 2000
Net sales 1,539 3,859
Operating income 137 150
Operating margin, % 8.9 3.9
Order bookings 1,454 4,026
Order backlog 139 540
Capital expenditures 15 45
R&D 0 6
No. of employees 842 1,631
Swedish Defence Materiel Administration ordersreconnaissance pods for Gripen
Norwegian and Italian militaries order instru-mented training systems
U.S.Air Force orders countermeasure equip-ment for F-15
Finnish Navy orders fire control system
Thales Optronique orders eye-safe laser rangefinder for French fighter
Hungary leases 14 Gripen from Swedish DefenceMateriel AdministrationCzech Republic begins negotiations on purchaseof 24 GripenGripen International formed together with BAE SYSTEMS
Swedish Defence Materiel Administration ordersintegration work for new precision engagementweapons for Gripen F21 in Luleå becomes third Gripen wing in SwedenAgreement in principal with Airbus Consortiumon partnership to develop A380
Swedish Defence Materiel Administration ordersmaintenance equipment for Sweden’s fourth Gri-pen wingNew aerial target towing agreement with SwedishDefence Materiel Administration for the period2003–2009City of Gothenburg orders TETRA system for se-cure and fast communication in public transportationDelivery of air traffic control equipment for newtower at Arlanda Airport, StockholmFramework agreements with Sweden’s NationalPost and Telecom Agency and Agency for Admin-istrative Development
Finnish Navy orders new deliveries and modern-isation of RBS15 anti-ship missile
German Bundestag decides to procure new corvettes equipped with RBS15
Austria orders simulator for BILL anti-tank missile system
Lockheed Martin orders development of separa-tion system for Atlas V launch vehicle
Orders for METOP weather satellite program
JASON-1 earth observation satellite launchedwith central data processing system from Space
ODIN satellite launched in February with antennaand data systems developed by Space
Delivery of precision sensor system for ASTRA1K, the largest commercial communication satel-lite ever built
Aviation Services becomes new business area
Air Botnia signs leasing and operations agree-ment for five Saab 2000
Crossair signs three-year agreement for heavymaintenance of Saab 2000
Celsius Aviation Services restructured and divested
PAGES 16 –19
PAGES 20–23
PAGES 24–27
PAGES 28– 31
PAGES 32–34
PAGES 35–37
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* Pro forma
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30,000
6
Further structural work and export breakthrough
The breakthrough for Gripen in the NATO market and
further acquisitions and structural transactions were
among the highlights of 2001. Saab Chairman Anders
Scharp gives his view of 2001.
If 2000 was distinguished by the demanding yet suc-
cessful efforts to realize the synergies we promised
with the Celsius acquisition, then 2001 was the first
year in which we truly worked together as one com-
pany. We now have to prove that this is a business
that can profitably grow and develop a position in a
market that constantly changes.
The defence industry continues to be shaped by
growing demands for internationalisation and by the
opportunities created by new technology – particu-
larly IT. Saab is in the forefront in network-centric
defence systems and nearly everything we develop
in the future will be done in light of demands for in-
ternational adaptation and the need to work in net-
works.
2001 was also a year in which Saab strengthened
its positions in a number of important areas. A series
of breakthrough orders were secured. The decisions
by Hungary and the Czech Republic, as the first
NATO member states, to select the Gripen fighter are
of major importance. Gripen has now been selected
by countries with a range of different performance
requirements, geographical conditions and national
security needs.
We have a clear strategic focus on defence growth
markets where we are competitive. This is the direc-
tion in which we will continue to transform our oper-
ations and it is where we will continue to grow or-
ganically and through acquisitions.
Saab will play an active role in the international
restructuring. We will form new alliances to become
even stronger and systematically work on further ac-
quisitions and structural transactions. This applies in
particular to the U.S. market, where various opportu-
nities are being evaluated.
During the year we acquired the remaining 43 per
cent of AerotechTelub. Now we can align this compa-
ny more closely with the rest of Saab and fully utilise
the synergies between its high-technology service
business and our other operations.
We also continued to streamline Saab. The divest-
ment and restructuring of the remaining parts of
Celsius Aviation Services and the sale of our 25-per
cent stake in the German shipyard HDW further
demonstrate our focus on defence growth markets.
In line with Saab’s policy to distribute 20–40 per
cent of income after tax to shareholders, the Board of
Directors is recommending a dividend for 2001 of
SEK 3.25 per share, or 31 per cent of net income.
As a representative of the Board, I would lastly
like to express our gratitude to Saab’s employees. In
many respects, Saab is a very special company, and
that is mainly due to the people who work here.
What gives our business its strength and future op-
portunities is largely the breadth of advanced know-
how within our company.
Together, we can utilise the energy that exists with-
in Saab and further develop as a profitable, attractive
and technically advanced company.
Anders Scharp
7
Breakthrough orders and strategic development for Saab
As expected, our income in 2001 was well in line
with the previous year and with a strong cash flow.
Naturally, interest has focused on Hungary’s decision
and the Czech Republic’s selection of Gripen for their
air forces, though major orders were received in
other areas as well. This includes combat training
centres from new NATO customers, countermeasure
equipment from the U.S., among others, and the se-
lection of the RBS15 anti-ship missile in key markets.
Breakthrough for Gripen in NATO market
The two Gripen decisions have received the most at-
tention, however.
The Hungarian order is for 14 aircraft, which will
be leased from the Swedish Defence Materiel Admi-
nistration and adapted by Gripen International. The
order value for Saab exceeds SEK 1 billion. Gripen is
expected to serve as a key component of the Hun-
garian defence for decades to come, and long-term
opportunities for further development are good.
The Czech Republic decided to begin negotiations
on the purchase of 24 Gripen. The first Czech Gripen
wing is expected to be operational in late 2005.
This breakthrough in the NATO market is ob-
viously very important to our marketing. We are now
strengthening our export efforts and the co-operation
with BAE SYSTEMS by establishing Gripen International,
which alone will have responsibility for the market-
ing, sale and further development of Gripen in ex-
port markets.
With these two NATO customers, the previous
South African order and our longstanding relation-
ship with the Swedish customer, we now have several
reference customers. In spite of different prerequisites
and demands, they are all convinced that Gripen will
play an important role in their country’s overall de-
fence solution for years to come.
Export successes in all business areas
It is important to remember that the major part of our
operations is actually outside military aircraft, in areas
where we were also able to secure important orders
in 2001.
The decision by the U.S. Air Force to equip its F-15
with the BOL countermeasure system extends an al-
ready long-term co-operation and offers good poten-
tial for further deliveries also for other types of air-
craft.
Sweden’s decision to purchase 18 multi-role heli-
copters provides us with an important opportunity.
The responsibility Saab has been given for the devel-
opment of a totally new tactical system is a testament
Hungary was the first NATO member country to selectGripen. Defence Ministers Björn von Sydow and JánosSzabó at the signing of Hungary’s memorandum of under-standing on 11 November 2001.
Bengt Halse, President and CEO
8
to strength of our systems integration and defence
electronics capabilities. The development, adaptation
and maintenance of the new helicopters will generate
significant revenue, including from the manufacture
of 200 helicopter forward fuselages for NH Indus-
tries/Eurocopter. In the long term the project will
give us the opportunity to develop and expand our
know-how and international contacts in the helicop-
ter area.
The GAMER instrumented training system had
further success during the year and different versions
were ordered by Norway and Italy. The U.S. Army’s
breakthrough order for GAMER in 1999 has set the
standard for the market.
In our space operations, we signed an agreement
with Lockheed Martin on the development of future
separation systems. In the process, we improved our
opportunities to maintain global dominance in this
segment of the space market.
In missiles, RBS15 holds a very interesting posi-
tion. The Finnish Navy has decided to order an up-
dated version and the German parliament has decid-
ed to procure new corvettes equipped with RBS15
Mk3. Other countries are expected to follow suit.
The terrorist attacks in the U.S. on September 11
will impact our operations to some extent. One im-
mediate result – though its overall effect is marginal
– is a decline in income for Saab Aviation Services
during the fourth quarter.
Saab’s direction – always in the finals
Saab is not one of the largest defence companies in
the world, but in the areas where we are active we
are usually a leader. We have a depth and breadth to
our competencies that few companies can match. The
fact that we are not the biggest company in the global
defence market is of relatively minor importance to
those who buy a naval command and control system
for a corvette, the Gripen fighter or the GAMER in-
strumented training system – areas where Saab is
clearly a world leader and where we are almost al-
ways considered in the final round of procurements.
In terms of competence, we are among the leaders
in the three areas that together form our core busi-
ness: electronics, systems integration and high-tech-
nology services, primarily in the defence area. These
are the areas where we have most of our operations
and it is where we mainly seek out new opportuniti-
es for growth and acquisitions.
In addition to this core focus, we have a “support
strategy” and a “spin-off strategy”.
For example, our commitments with Airbus and
Defenceelectronics
Core business
Support strategy
Spin-offs
Focus areasFocus areas
Systemsintegration
High-technology
services Value realisation through divestment or development in partnership with others.
Constant generation of new ideas for utilising defence technology in non-defence applications.
Commitments with Airbus and Boeing. Resources and capabilities that exist within the company and development of com-petencies that can be utilised in military aircraft.
Main business focus. Source of new opportunities for growth and acquisitions.
9
Boeing, the world’s two manufacturers of large pas-
senger aircraft, support our core business. We use
resources that exist within the company and we can
develop competencies that can be utilised in military
aircraft. It is important to stress, however, that Com-
mercial Programs must abide by the same financial
and commercial principles as Saab’s other opera-
tions.
A high-technology defence company like Saab
constantly generates new ideas for using defence
technology in non-defence applications. This spin-
off strategy applies to the entire company, although
operational responsibility for monitoring and develop-
ing projects rests at the Group level in what we call
the Venture Capital Council.
In 2001 we sold – for a capital gain of SEK 650 m.
– Saab Marine Electronics, a business born out of the
level-gauging expertise in what is now Dynamics.
Triangle Equipment, A2 Acoustics and Sanguis-
tech are other examples of businesses that have de-
veloped from technological advancements in other
areas and where we sold all or parts of our interests
in 2001. By bringing in partners and other owners,
we add competence and spread risks, at the same
time that we assure ourselves of a share of future suc-
cesses.
Further co-ordination in development,
production and marketing
The need for closer co-ordination between the four
business areas that chiefly focus on the defence mar-
ket – Systems and Electronics, Aerospace, Technical
Support and Services, and Dynamics – has led us to
create a new management unit, the Business Man-
agement Group (BMG). BMG consists of the heads of
the four defence business areas and is managed by
Ingemar Andersson, head of Saab Bofors Dynamics.
The purpose of BMG is to concentrate and co-ordi-
nate our efforts in domestic and foreign markets
as well as further develop synergies between these
business areas.
Looking ahead
In 2002 a number of key project decisions are ex-
pected, particularly those involving missiles, which
could be of major importance to our future develop-
ment. The space market is expected to stagnate in the
short term until the telecom sector regains momen-
tum. Strategically, we are well situated to take advan-
tage of expected future growth, just as we rank
among the world leaders in most of our other prod-
uct segments. We are clearly focused on growth sec-
tors such as systems integration and niche areas in
intellectual, value-added products and high-technol-
ogy services that will meet our customers’ future
needs. We intend to strengthen our approach and
concentration through further acquisitions and di-
vestments and by playing an active role in the contin-
ued restructuring of the global defence and aerospace
industry. Our balance sheet and earnings capacity
give us the freedom and resources to act when op-
portunities arise and our employees give us a compe-
tence base second to none in the world.
There is good reason to look to the future with
confidence – for our customers, employees, share-
holders and other stakeholders in Saab.
Bengt Halse
10
Saab and the defence market
Customised high technology
in a normalised industry
For over 60 years Saab has developed high-technolo-
gy defence and non-defence systems. The ability to
utilise the latest technology in a number of different
areas – from aerodynamics, radar technology and
data communications to astrophysics, materials tech-
nology and lasers – has always distinguished Saab’s
operations.
This customised high technology has been the
common denominator for the various areas – defence
systems, aircraft, computer systems, automobiles, etc.
– the company has been involved in.
Research and development currently corresponds
to approximately 25 per cent of Saab’s turnover, four
fifths of which is conducted for or in close co-opera-
tion with customers.
For today’s Saab, defence is our “home market”.
Although our broad base of expertise is still in de-
mand in non-defence areas, defence applications re-
main the primary focus.
Lately conditions in the defence market for devel-
opment, production and marketing have changed
greatly. A fundamentally different security landscape
and technical advances, in combination with new
military roles and budgetary constraints, have created
an urgent need for restructuring.
Many of the major structural changes that have
been necessary or obvious have been implemented.
In Sweden’s case, Saab’s acquisition of Celsius is the
prime example. Internationally, several power cen-
tres have been created from which future industry
structures are likely to form.
But the last ten years have meant more than sub-
stantial structural changes. There has also been a
more fundamental shift in the conditions shaping the
defence industry.
This is true politically, though also technologically
and industrially. If yesterday’s defence industry was
a national concern, with its own technological condi-
tions and industrial cycles, then today’s and tomor-
row’s industry is distinguished by international co-
operation, the ability to find the best technology –
commercial or defence – and the know-how needed
to co-ordinate commercial and defence product devel-
opment cycles.
Although the impact is not dramatic in an imme-
diate sense, it will be in the long term.
Defence investments will always be decided on in
public procurement processes, and major invest-
ments will continue to be made at the political level.
Tangible considerations are only part of these proces-
ses, and an understanding of the customer’s broader
security, industrial and technological interests re-
mains important to defence companies. Overall,
however, the defence market is becoming more like
other markets.
International co-operation
and technical development
The desire to raise efficiency and reduce the cost of
developing future defence systems is driving a con-
tinuous political process toward increased interna-
tional co-operation and demands for alternatives in
national procurements. For Sweden, this includes its
membership in the Western European Armaments
Group (WEAG), participation in the European LoI
agreement (between Western Europe’s six largest de-
fence materiel-producing countries) and membership
in EU.
These and other political co-operations facilitate
and drive cross-border co-operations in the defence
industry. Outside the U.S., practically all major defence
projects are developed in international co-operations.
The internationalisation of the defence market is
very important to Saab, with close to half of all its
sales in foreign markets.
Aside from the new international security climate,
technological developments in the commercial sector
account for the biggest change. Thanks to recent
years’ developments in information and computer
technology, commercially developed systems and
technologies are increasingly being integrated into
defence systems.
While their role is changing, defence companies
cannot be replaced by non-defence companies, since
11
commercial technology can never fully substitute for
defence systems. An understanding of users’ needs,
but even more importantly the ability to develop
the technology and ensure that it meets military de-
mands, therefore strengthens the role of defence
companies.
The current trend is also raising demand for new
competencies, such as the ability to co-ordinate de-
fence and commercial technologies and product de-
velopment cycles. Many defence systems have useful
lives of 30 years or more. Critical commercial tech-
nology such as computer systems can become obsolete
within eighteen months.
Consequently, you have to understand how de-
fence systems are built in order to accommodate a
large number of “internal” generational changeovers,
and you have to have the ability to implement them.
One example for Saab is Gripen, where the entire sys-
tem is built around a digital infrastructure designed
for a practically endless number of generational
changeovers in computer, communication and pre-
sentation technology.
Network-centric defence –
from concept to business
One example of a military philosophy that makes
these new demands is the so-called network-centric
defence concept.
A change is under way in military doctrine to cap-
italise on opportunities to enhance the power of exist-
ing and future systems by linking them in networks.
In the same way that commercial networks tie com-
puters together locally at workplaces or globally
through the Internet, defence systems can also share
information.
The changes this facilitates are dramatic, but the
principle in itself is not
new to the defence sec-
tor. The need to decen-
tralise critical defence
computer functions
originally led to what
we now know as the
Internet, and the ability
to share information
between units in real
time is the basis for the
unique data link that is
integrated in the Gri-
pen system and for the
naval command and
control systems Saab
develops. What is new
is the scope – the vision
of a defence system
where the right unit
always has access to the
right information at the right time.
As in all defence contexts, development will be
gradual. Old systems will be phased out or adapted
and new ones phased in and given a more central
role. The trend toward network-centric defence solu-
tions is clear, however, in several of the world’s most
modern armed forces.
Sweden has decided to adapt its defence – organi-
sationally, materially and infrastructurally – to opera-
Systems and services integrated, certified and adapted for use in defence.
Commercial services
Commercial products
The role of the defence industry
Defence services Defence products
Commmercial industry
Defence
Product cycles
Commercial
12
te in a network and to do so gradu-
ally over a period of 20-25 years.
All Swedish defence systems will
be adapted to operate in internatio-
nal theatres.
Sweden has a prominent posi-
tion in this area, although the lead-
er for obvious reasons is the U.S.,
where major investments are being
made and where network function-
ality is increasingly becoming a
requirement in new systems.
Sweden has the advantage, how-
ever, of being a small country with
a more integrated overall defence
structure.
Reliability and security demands
are obviously higher than with
commercial networks. A defence
network not only has to handle dif-
ficult conditions, but it also has to
be invulnerable to outside attacks –
physical or electronic. In addition to a network that
links sensors, command and control systems, and
precision engagement systems, a network-centric de-
fence contains other dimensions, such as security and
reliability, as well as demands on mobility and logis-
tics. These are areas where defence companies have
an obvious role to play.
The introduction of network-centric defence cre-
ates new business opportunities for Saab.
First, there is an extensive need to define the
structures, rules, protocols, etc. that a network-centric
defence needs to function.
Secondly, various demonstrators will have to be
developed to test and verify future network-centric
systems.
Thirdly, all units in a network-centric defence
have to be able to communicate with each other. In-
terfaces and other systems must be adapted so that
radar, command and control centres or missiles can
understand what other units are communicating and
at the same time make themselves understood. The
systems developed by forward-looking defence com-
panies must be adapted with this in mind.
The industrial and financial significance of these
three factors is growing. Companies that are able ear-
ly on to offer world-leading defence materiel adapted
to communicate in networks according to internatio-
nal standards and protocols will have an important
competitive advantage in a constantly changing de-
fence market.
Systems integration – getting a variety of complex
subsystems to work together – is one of Saab’s most
important competencies. It is the key resource in the
development of defence systems today and in the
future.
In combination with other crucial competencies in
electronics and high-technology services, a portfolio
of leading products and an ability to understand cus-
tomers’ current and future needs, Saab has the ability
to develop defence solutions for the future.
Flexible decision
superiority Precision
engagement
Dominant battlespace awareness
Dominant manoeuvring
Full dimensional protection
Focused logistics
Information network
– round-the-clock in alltypes of weather, undetected, through vegetation
– partly mobile, partly virtual
– air, sea, land, underwater; stand-off
– conventional, unconventional platforms, transport systems
– self-protection, signature management
– just-in-time on-demand availability
13
Employees
Saab is one of the world’s leading high-technology
companies, with its main operations in defence, avia-
tion and space. This requires employees with supe-
rior, broad-based competence, in some cases unique-
ly so. And perhaps even more importantly, utilising
this competence requires the distinct ability to co-
operate and learn. Saab is one of the world’s leading
companies in its competence areas because its em-
ployees are able to live up to these tough demands.
Saab’s personnel have qualifications that are
sought after in the job market. This places tough de-
mands on Saab as an employer, demands that are
both stimulating and enriching. The company has to
be able to offer employees the opportunity to utilise
their know-how, to develop and grow, to seek out
new challenges and to receive reasonable and fair
compensation. Furthermore, it should be possible to
balance work, family and spare time. By doing so,
Saab creates an attractive, efficient workplace where
everyone can be content and enjoy work.
Saab devotes large resources to being an employer
that people seek out and stay with. Saab offers a
workplace with many different, highly qualified jobs
and always the opportunity for development. More-
over, the company operates in many locations in
Sweden and also abroad, which adds to the available
choices. External employee turnover is low and was
only 5 per cent in 2001 .
Saab offers a variety of opportunities and activi-
ties to promote development and learning. A pro-
gram to visualise the opportunities for employees of
the Saab Group has been initiated: “Saab – a world of
Opportunities”.
Human resource policy
In a knowledge company like Saab,the collective competencies of theemployees are the main competitiveadvantage.
No.
Age distribution
0
500
1,000
1,500
2,000
2,500
<24
25-2
9
30-3
4
35-3
9
40-4
4
45-4
9
50-5
4
55-5
9>5
9
%
Categories
Blue collarWhite collar
'99 '01'000
25
50
75
100
Education level
%
Professor, PhDCivil engineeringOther academicCollege level engineeringOther engineeringUpper secondary schoolOther
'01'000
25
50
75
100
No.
0
2,000
1,000
3,000
5,000
4,000
Years of employment
<5 5-10 10-25 >25Blue collarWhite collar
%
Share of menand women
WomenMen
'99 '01'000
25
50
75
100
14
Joining SaabSaab takes an active approach to recruitment work
in order to attract people with cutting-edge skills
in areas that are important to the company’s com-
petitive strength. This includes both students and
experienced potential employees. Saab maintains a
close relationship with the academic world and has
a strong recruiting position among civil engineer-
ing and other university-level students.
To recruit qualified production employees, the
company works together with local upper secondary
schools.
Traditional as well as new channels are used in
the recruitment work. Dissertation work and job fairs
are also important activities to market an attractive
workplace.
Dissertation work at Saab
“Since completing my disser-
tation, I have begun working
at Saab Bofors Dynamics,
where I am responsible for
map database management
and presentation. I chose
Saab because it is a company
on the forefront of develop-
ments and because it gives
its employees an opportun-
ity to think about and im-
pact future technology. One of the positive impressions I have
had in the short time I have been here is how beneficial and
interesting it is to work with colleagues with so many differ-
ent competencies.”
Git Karlsson, Saab Bofors Dynamics
Saab’s trainee program
“The trainee program is a
good platform for a career
at Saab.You can influence
the program to meet your
needs, yet it offers structure
and security with a home
department. Of course, it
is exciting that you are
offered three months of
practical training abroad at
the end of the program. In
the future I hope to work with exports and commercial oper-
ations.”
Emma Håkansson, Saab Advanced Trainee Program
since April 2001
Job fairs
“As a recent graduate, I know
that job fairs are important
for students. It’s where you
make your initial contacts
and become interested in a
certain company. A number
of my fellow students, like
myself, decided to look for
work with companies that
were represented at these
fairs. I am now employed at
Saab as manager of an export project within Gripen Customer
Support. During my first year at Saab I have also found the
time to close the circle, you could say, by representing the
company at a job fair in Luleå.”
Kenneth Lindén, Saab Aerospace
Practical training for upper secondary students
Job fairsTraditional recruiting
Teknik-SM competition and Technology DayInternet recruitment – Jobspace
Saab trainee program
Saab – a world of opDissertation work and practical training for college-level students
15
Advancing at Saab Saab offers a workplace where employees should
be able to find development opportunities for the
short and long term and a company where they can
grow throughout their careers. An attractive internal
job market and stimulating assignments are import-
ant factors. Movement between different parts of Saab
is encouraged and during 2001 internal employee
turnover was 3 per cent.
Competence development is a high priority and a
number of training programs and international co-
operative projects are offered.
Striking a balance between work, family and per-
sonal interests is also important.
Management development programs
“The way this managementdevelopment program is de-signed is new and exciting,and the expectations arehigh.We are given tools tohelp us as change agentsand have access to a verygood network. I hope togain knowledge and inspira-tion that will raise me tonew heights, so that I willbe able to make changes andimprovements back at the workplace. One important leader-ship quality for me is the ability to see and take advantage ofthe opportunities that changes create and to create a climatewhere the employees around you also see the same oppor-tunities.”
Catharina Magnusson, asst. production and technical manager, Saab Aviocomp
Developing on the job
“The job of assembler has
undergone big changes in
my 25 years at Saab.Today
we work in goal-oriented
teams and plan our own
work, solve any problems
that arise and see to it that
delivery times are met. As-
semblers also have respon-
sibility for quality assurance,
which promotes accuracy
and responsibility. I feel that the respect people have for what
we do has increased as we have gained more responsibility.”
Michael Pettersson works with the final assembly
of Gripen at Saab Aerospace
Parental leave
“Saab’s decision to intro-duce parental allowancemeans a lot monetarily andwill help me to balanceparenthood with work. Ithink that more fathers inparticular will take advan-tage of the opportunity to stay at home with sickchildren. In my case, I planto stay at home with mydaughter for a half year, andI am convinced that during that time I will develop both as anindividual and for my future career.”
Jörgen Bruhn, responsible for business development at Saab Aircraft
International opportunitiesFamily and recreation Mentoring program for women
Attractive internal job market
Wellnessprograms
Industrial doctorates
Technical seminars
Project managers
Specialisation
Internal and external training
Technical ambassadors
Leadership development programs
opportunities
16
SAAB SYSTEMS AND ELECTRONICS
Saab Systems and Electronics comprises Saab’s competencies in defence elec-
tronics, primarily with a focus on modern, network-centric defence.The busi-
ness area utilises a broad range of technologies to develop offensive and defen-
sive systems for information superiority.These systems allow decision-makers
– from the highest-ranking officer to an individual soldier – to see and hear while
avoiding being seen or heard. Systems and Electronics also develops systems
for simulation and training.
17
In 2001 we reorganised our operations and made
many important structural decisions.We are now rea-
dy to truly benefit from Saab’s combined strengths in defence elec-
tronics.The systems we are developing – to develop, decide and de-
ceive – are well positioned for modern military philosophy and the
requirements of future defence systems. In recent years we have
received important breakthrough orders that confirm this and pave
the way for future export success.”
Dan Jangblad, Head of the business area
Structuring and future focus
Within the Systems and Electronics business area,
Saab has created a strong combination in advanced
defence electronics. The business area offers defence
systems that support training processes, facilitate de-
cision-making and control, and make it possible to
avoid the enemy’s eyes, ears and weapons. Systems
to develop, decide and deceive.
The focus of the operations is to further integrate
these three areas in order to fully benefit from the
competences within Systems and Electronics, but
also since the distance between them is decreasing.
Systems for training and command and control are
becoming more alike as demands for realistic train-
ing conditions grow. Electronic warfare systems that
deceive the enemy are being closely integrated with
command and control systems in order to reduce
lead times and maximise the ability to utilise the
right countermeasure at the right time against the
right threat.
2001 was a year distinguished by structural work.
Thirteen units have been restructured into six. The
sensor operations were transferred to Dynamics and
the acquisition of Ericsson’s share of Ericsson Saab
Avionics made it possible to bring this company to-
gether with the other avionics and electronic warfare
operations within Saab to form a more powerful Saab
Avionics. Moreover, a number of non-defence oper-
ations were divested or terminated.
Saab Systems and Electronics has thereby become
a more homogenous, integrated business area with a
clear strategic focus on advanced defence electronics
and the co-ordination of competencies in three areas
– develop, decide and deceive.
Decide – information and
command and control systems
A modern defence system is worthless without an ef-
ficient, fast-reacting nerve centre. Militaries around
the world make plans based on scenarios in which it
is essential to make the right decisions under pressure.
On the one hand, you have to be able to gather as much
information as possible and on the other you have to
understand what is relevant in a particular situation
or at a particular time. To do so requires various types
of information and command and control systems.
The purpose of an information and command and
control system is to simplify and in some cases facili-
tate decision making in situations where the flow of
information is large, fast and contradictory. By utili-
sing so-called data fusion technology, information is
combined from different sources into an overall pic-
ture appropriate for the decision maker. This picture
affects, for example, how an air force wing should be
used, in what order a ship’s captain should counter
various threats or how a pilot should fly to avoid
enemy weapons and sensors.
Decision superiority requires a combination of
computer power and presentation technology. Un-
derstanding how people react under pressure and
how they understand and use information in various
situations is critical.
Since information and command and control sys-
tems of various complexity are used by all branches
of the military and at all levels, the total market is
very large. In reality, however, it is divided into small-
er sections. In the areas where Saab competes, pro-
curement processes are relatively open, more so than
in many other areas of the defence market.
“
18
Saab develops information and command and con-
trol systems for use at various levels of every branch
of the military. In naval systems for small and medium-
size vessels, the business area ranks among the world
leaders, with customers in Denmark, Australia, New
Zealand and the Middle East, among others.
In aviation, Saab has delivered the Swedish Air
Force’s air defence system, StriC. Under develop-
ment since 1990, StriC is one of the largest systems
integration and software projects ever conducted in
Sweden. Together with Gripen, the system sits at the
core of the country’s “Air Force 2000” concept. In
2001 Saab received orders for maintenance, adapta-
tion and development of StriC. There is great interna-
tional interest in StriC, and Saab has exported a simi-
lar system to Southeast Asia.
Information and command and control systems
account for approximately 35 per cent of the business
area’s sales, with about 70 per cent to foreign markets.
Develop – training and simulation
Since the end of the Cold War, there have been sev-
eral major changes in the roles of national defence
forces and the methods they use. For example, inter-
national missions have grown in significance.
Taking part in an international mission in an un-
certain environment means fighting someone else’s
war. The risks are substantial, yet there is little or no
tolerance for casualties. The ability to carry out such
missions in unknown and hazardous environments
without losses requires planning and preparation.
This includes training.
Saab Training Systems has a broad range of sys-
tems for combat training, from mechanical target ma-
terial for firing ranges to advanced, complex tactical
training systems for units up to battalion size.
The most important product segment to date has
been systems that utilise laser technology to teach the
use of small arms, anti-tank weaponry, combat vehicle
weapons, helicopters and other vehicles. In so-called
two-way simulators, which mimic realistic training
conditions by taking into consideration the distance
to a target and its movements, Saab’s products have
basically set the international standard and are ex-
ported to some 15 countries around the world.
In recent years the development of combat train-
ing centres has risen in importance. With the help of
modern communication and positioning technology,
different units can be linked and large military
groups can be commanded and trained together.
With GAMER, Saab has developed a system that in
previous years has competed successfully in tight
competition for orders in the U.S. and the Nether-
lands.
In 2001 a major order was received from Norway
as well as a breakthrough in the Italian market. In
both cases Saab will supply a large number of laser
simulators along with GAMER. In Norway, the order
value is SEK 470 million and in Italy it is approxi-
mately SEK 40 million.
Systems and Electronics comprises Saab’s operations for thedevelopment and manufacture of systems to develop, decideand deceive.The technologies overlap and Systems and Elec-tronics encourages competence and market synergies so thatthey will converge completely.
Develop
DeceiveDecide
Saab has developed StriC, the Swedish Air Force’s commandand control system.
19
Simulation equipment represents 20 per cent of
the business area’s sales, with foreign market sales
at over 90 per cent.
Deceive – electronic warfare
and signature management
Various means are used to protect people, vehicles,
aircraft, facilities and infrastructure against an ene-
my’s weapons and sensors. Saab develops warners
and countermeasures in the electronic warfare area
as well as signature management systems that use
advanced materials technology to hide people, units
and facilities.
Electronic warfare systems are available for var-
ious applications but are used primarily on aircraft.
Saab develops all three aircraft applications: jam-
mers, warners and decoys.
Jammers utilise electromagnetic radiation to disrupt
and confuse the enemy’s equipment, warners indi-
cate when an aircraft is being detected by sensors,
and decoys use mechanical and pyrotechnical means
to confuse sensors, primarily on incoming weapons.
International sales of electronic warfare systems
are distinguished by relative openness, and Saab can
compete in large parts of the global market. Saab sys-
tems are operational on a number of aircraft types,
including F-14, Tornado, Harrier, Viggen and Gripen,
and have been sold to Eurofighter as well.
An important breakthrough order was received in
2001 when the U.S. Air Force decided to equip its
F-15 fleet with Saab’s BOL countermeasure dispen-
sers. The value of the initial order is SEK 90 million.
The system is already used on the F-14 and is being
evaluated for integration on the F-16 and F-18.
The signature management operations of Saab
Barracuda, whose systems are used in around 50
countries, received several export orders in 2001, in-
cluding a significant framework agreement with the
Norwegian armed forces.
By utilising its world-leading materials and tech-
nological expertise, Saab can offer systems that pro-
tect against various means of detection, from the
naked eye and radar to IR and various other sensors.
Its leading-edge expertise in both electronic war-
fare and signature management gives Saab a unique
position in the international defence industry.
Electronic warfare and signature management
equipment accounts for approximately 15 per cent of
the business area’s total sales, approximately half of
which is to foreign markets.
Avionics – in-flight technology
Saab has a prominent position in advanced avionics
and, among other things, has developed Gripen’s
world-leading display system, where the pilot has
access on four displays to all the tactical information
he needs to carry out a mission.
In late 2001 Saab received an order from the
Swedish Defence Materiel Administration to develop
and manufacture reconnaissance pods for the Swed-
ish Gripen.
Deliveries for the Gripen system account for a
major part of Saab’s avionics operations and inter-
national sales are closely tied to Gripen’s export suc-
cess. International interest in Saab’s overall avionics
know-how is growing, however. In 2001 Thales
Optronique ordered an eye-safe laser rangefinder for
installation on a French fighter. Saab was also se-
lected to supply the avionics for the new Swedish
NH90 helicopter.
Avionics account for approximately 25 per cent of
the business area’s sales.
Electronic warfare:The BOL countermeasures dispenser releases chaff and IR payloads into the airstream, creating adecoy for radar-directed and heat-seeking missiles.
20
SAAB AEROSPACE
Saab Aerospace develops entire aircraft and subsystems for the defence market.
The business area utilises and integrates the competencies needed to build
world-leading military fighter aircraft that combine powerful weaponry with
advanced command and control and information systems.
Moreover,Aerospace serves as a partner and supplier to manufacturers of
large commercial aircraft.
21
In 2001 Gripen achieved an important breakthrough
in the NATO market. Gripen’s selection by Hungary and
the Czech Republic is proof that we not only offer a world-leading
defence system that is uniquely economical, but also that we can
compete in perhaps the industry’s most challenging sector.We now
have two more reference customers and are an established, com-
petitive alternative in every procurement process we participate in.
The further development and delivery of Gripen to the Swedish Air
Force is progressing according to plan. Gripen’s future looks bright.”
Åke Svensson, Head of the business area
“
The Gripen system – modern,
flexible and cost-effective
Gripen is currently the world’s only fourth-genera-
tion fighter in operational service.
Gripen has full swing-role capability, which means
that the pilot can reconfigure the aircraft for new
missions while in the air. Every Gripen can thereby
fly air-to-air, air-to-ground or reconnaissance mis-
sions, so a potential enemy must assume that the air-
craft he confronts are always equipped to face him.
In combination with the system’s competitive life-
cycle costs and its unique ability to interact with other
units, Gripen’s swing-role capability provides an ex-
cellent return on defence investments.
With its uniquely advanced data link system,
Gripen offers superior capabilities when it comes to
sharing information with other aircraft as well as
with command and control centres and other defence
systems. The system is designed to work in network
structures, where information from sources outside
the aircraft is used to provide a tactical advantage.
Gripen is a cornerstone of the Swedish defence
and sits at the core of its Air Force 2000 air defence
system. At year-end 2001 Saab had delivered 116 Gri-
pen to the Swedish customer, the Defence Materiel
Administration.
Gripen is built on a digital infrastructure. Through
further development of its software, the system is
continuously kept up-to-date and utilises the latest
technology.
In addition to supplying aircraft that the Swedish
customer has ordered (at an average rate of 17 air-
craft per year), Saab is continuously updating and
improving those it has already delivered. In 2001,
for example, the Swedish customer ordered integra-
tion work valued at SEK 500 million, including the
acquisition of weapon pylons of NATO type and
improved capabilities for Gripen to use laser-guided
precision weaponry. The new standard also includes
systems for mid-air refuelling and onboard oxygen
regeneration, which are required for international
missions.
Export success
In 2001 Hungary and the Czech Republic became the
first NATO member states to select Gripen for their
air forces.
Together with the Swedish Defence Materiel Ad-
ministration, Saab and its partner BAE SYSTEMS have
reached an agreement with the Hungarian govern-
ment whereby its air force will lease 14 Gripen in a
government-to-government deal with the Swedish
government. For Saab, this has led in the short term
to an order for upgrades and development work,
with the largest partial contract valued at approxi-
mately SEK 1 billion. It also paves the way for addi-
tional orders from the Hungarian armed forces – for
aircraft, upgrades and maintenance.
In December 2001 the Czech Republic announced
its intention to begin contract negotiations with
Gripen International, Saab and BAE SYSTEMS’ jointly
owned venture for Gripen export sales, on the deli-
very of 24 new Gripen.
The selection of Gripen by Hungary and the Czech
Republic is of great importance to future export
sales efforts in general and efforts in Central Europe
in particular. Gripen has now been selected by four
reference customers – with different security and
22
defence requirements – two of which are in the
NATO market.
In 1999 Gripen received its first export order, from
South Africa for 28 aircraft, and the system is strong-
ly positioned in current negotiations with a number
of European and non-European countries. Total re-
placement demand for fighters in the markets that
are available to Saab is estimated at 2,000 units in the
decades ahead.
Opening doors for Swedish business
Export sales of fighter aircraft normally require the
seller to stimulate the buyer’s trade and industry.
Traditionally, counterpurchases have often been used
as a form of compensation for the aircraft order. Saab
does not arrange such so-called offsets, but instead
offers industrial co-operations with the business
community in the buyer country.
Saab’s role is that of broker, bringing together
companies with those in the buyer country. Deals
that are facilitated and come to fruition are “offset”
against the aircraft order. The job for Saab is to find
business opportunities between the buyer country’s
companies and the international network of compa-
nies Saab and its partner, BAE SYSTEMS, have access
to. The ties to Investor and Swedish business natural-
ly facilitate these efforts to satisfy the buyer country’s
countertrade demands.
All transactions and co-operative projects are con-
ducted on commercially viable terms, which thus cre-
ates lasting business relationships. The result is in-
creased economic activity and growth for the buyer
country. Saab also creates opportunities for Swedish
companies to enter markets or countries where Saab
can open doors.
Gripen International
Saab has been co-operating with BAE SYSTEMS since
1995 in the marketing and sale of Gripen in export
markets. Opportunities to combine the strengths of
the two companies and obtain support from both
their governments are very important. To expand
and strengthen the co-operation and to further ener-
gise the export alliance, a new, jointly owned com-
pany, Gripen International, was established in 2001.
The two parent companies are staffing Gripen Inter-
national, which will have operations in both Sweden
and the UK, though primarily in countries where ex-
port efforts are focused.
Future air defence
Research on future aviation systems is in full swing.
Through its own development and participation in
several collaborative projects, Saab commands a prom-
inent position in this area. This applies, for example,
to unmanned aircraft, so-called UAV’s (Unmanned
Aerial Vehicles).
Together with other leading European defence com-
panies, Saab is participating in ETAP (European Tech-
nology Acquisition Programme), which is focused on
both technological development (Technology Dem-
onstration Projects) and demonstrators (Technology
Demonstration Vehicles) in key areas for future fighter
On 10 December 2001 the Czech Republic became the sec-ond NATO country to select Gripen, announcing that it willenter into negotiations over the procurement of 24 Gripen.If the transaction is finalised, the first division is expected tobe operational by the end of 2005.
23
systems. The results can be introduced in existing
systems or in future joint European systems.
In 2001 the defence ministers of France, Germany,
Italy, Spain, the UK and Sweden also declared their
intent to conduct a joint study on the initial require-
ments for fighter systems in the year 2020 and beyond.
Nordic helicopters
In 2001 the Swedish Ministry of Defence decided to
purchase 18 multi-role NH90 helicopters from NH
Industries. Saab will participate broadly in the pro-
ject, from the development of new systems that will
be integrated in the helicopters to their adaptation
and maintenance.
By combining its systems expertise from the devel-
opment of Gripen with command and control, coun-
termeasures and maintenance capabilities, Saab can
assume turn-key responsibility for the helicopter’s
tactical system.
Saab will also manufacture 200 forward fuselages
for NH90, to be supplied to a large number of Euro-
pean countries. Saab’s direct participation carries an
order value of approximately SEK 2 billion and af-
fects several business areas.
Participation in the development of critical sys-
tems in the new Swedish helicopter gives Saab im-
portant contacts and opportunities to expand its co-
operations with helicopter developers such as EADS,
Augusta and Eurocopter. Saab can also develop
know-how and systems that will be directly market-
able in the export market.
Partner to the commercial aircraft industry
As one of the world’s leading developers of military
fighter aircraft, Saab commands highly advanced
know-how in the design and production of aircraft
structures.
To fully take advantage of this competence and ut-
ilise the capacity necessary to manufacture Gripen,
Saab serves as a supplier and partner to the two
remaining manufacturers of large commercial air-
craft, Airbus and Boeing. These operations currently
account for approximately 5 per cent of the business
area’s total sales.
Due to the global economic downturn and uncer-
tainty following the terrorist attacks in the U.S.,
passenger traffic has declined.
In the decades ahead, however, demand for large
passenger aircraft is expected to grow.
In 2001 Saab signed an agreement in principle
with Airbus to become an industrial partner in the
development of the new superjumbo A380. As of
year-end airlines around the world had placed orders
for 85 A380, which will seat over 550 passengers.
The first aircraft will be delivered in 2006. Saab will
develop and produce parts of the wing. The order
value is estimated at SEK 10 billion over a 20-year
period.
The Swedish Ministry of De-fence is ordering 18 multi-roleNH90 helicopters from NH Industries/Eurocopter. Saab willdevelop and integrate the heli-copter’s tactical system.A newcommand and control systemwill be developed as part of thetactical avionics system. Saabwill also manufacture forwardfuselages for two thirds of thehelicopters ordered to date byeight European countries.
24
SAAB TECHNICAL SUPPORT AND SERVICES
Saab Technical Support and Services provides sophisticated technical services,
maintenance and customised systems solutions in aviation, communication,
information, sensors, logistics, testing and materials technology.
Technical Support and Services is also engaged in special flight operations,
focused on aerial target towing and testing of electronic warfare equipment.
25
We are now wholly owned by Saab and can concen-
trate on utilising all the opportunities this offers us.
We complement Saab’s other operations with our ability to provide
high-technology services and maintenance of sophisticated systems
and products for Swedish and international customers. In 2001
we were marginally affected by the downturn in the telecom sector.
But at the same time we were able to make progress in many
other areas.”
Jan Eiborn, Head of the business area
“
High-technology services
Saab Technical Support and Services comprises a
range of high-technology service operations. The busi-
ness area is dominated by AerotechTelub but also
includes aviation services, component maintenance
and materials technology.
Technical Support and Services differs from other
parts of Saab in that its projects and orders are larger
in number but smaller in size. In combination with
its focus on services, this means that investment and
risk levels are lower than in other areas of Saab.
AerotechTelub – wholly owned by Saab
AerotechTelub offers sophisticated technical services,
maintenance and customised systems solutions in in-
formation technology, electronics and aviation tech-
nology. Its customers can be found throughout the
defence sector, among government agencies and in
select business niches.
In 2001 Saab acquired TietoEnator’s 43-per cent
interest in AerotechTelub and became sole owner.
AerotechTelub will be aligned more closely with
Saab’s other operations, thereby strengthening oppor-
tunities for synergies in Sweden and internation-
ally.
Services for the defence market provide a stable
base for a business that stretches across a number of
industries in the public and private sectors. Many of
AerotechTelub’s customers can be found within Saab
and the rest of the defence industry. Public agencies
with responsibility for large, complex technical infra-
structures also demand the type of services Aerotech-
Telub offers, particularly in systems and information
security.
International success in other parts of Saab also
creates sales opportunities for AerotechTelub. One
example is the export success of Gripen, where buyer
countries often request various forms of service and
systems deliveries. This also applies to exports of
other systems, such as Saab’s radar warners.
In 2001 the slowdown in the telecommunications
sector affected telecom suppliers’ purchases of tech-
nical services. AerotechTelub at the same time made
important progress in other areas, such as medical
technology, where it has long been involved in the
development and production of Elekta’s Leksell
Gamma Knife.
Technical services – a growing
high-technology consulting business
Technical services consist of various forms of support
functions for companies, government agencies and
organisations that procure, manage or operate com-
plex technical systems.
Technical services are supplied at every stage of a
project – from pilot studies, modelling and simula-
tion, procurement support, systems integration, and
verification and validation to maintenance and tech-
nical support.
AerotechTelub can benefit from its lengthy expe-
rience in technical support for operating systems.
The ability to provide support and maintenance re-
quires extensive expertise in aircraft and helicopters,
tele-, data and radio communications, command and
control systems, sensors, testing, logistics, etc. This
know-how is employed in technical services and has
contributed to making this AerotechTelub’s largest
operating area.
26
One example of an order in this area in 2001 was
from the Swedish Defence Materiel Administration
for work on the Swedish Air Force’s new tactical ra-
dio system, TARAS. The order for technical services,
such as evaluations, measurements and analyses of
the radio system, is worth SEK 24 million.
Technical services are expected to continue to
grow, particularly in the defence area, where chang-
ing defence needs and the growing interest in net-
work-centric solutions are creating new business
opportunities. For example, increasing demands are
being placed on communication and systems security,
which is raising demand for several of the services
AerotechTelub offers. The demonstrators that are
planned by the Swedish defence are also opening
opportunities.
Maintenance services
AerotechTelub’s original operations consisted of mili-
tary maintenance. While the armed forces of other
countries have large organisations of their own to
provide support and service at various levels, the
Swedish defence has outsourced a large part of its
advanced maintenance needs at the systems and
equipment level.
AerotechTelub is the Swedish leader in defence
systems maintenance, which includes development
of existing systems through the integration of new
solutions.
AerotechTelub is currently responsible for, among
other things, a large share of the maintenance – the
aftermarket – for Gripen and the Swedish Air Force’s
helicopters. It also provides maintenance for com-
mercial aviation systems and advanced measurement
and calibration equipment.
The operating area’s demand is stable, with further
growth dependent on whether the Swedish armed
forces continue to outsource operations that are still
handled internally.
Modification work on a Vertol helicopter (Hkp4).
AerotechTelub has developed the ActiView interactive infor-mation solution. Functions that are difficult to explain aredescribed with the help of 3D animations. Information shownon the screen can be accessed from the local hard drive orfrom the Internet/ intranet.The user can twist and turn animage and point to different parts to produce designations,associated deeper information or zoom in and explode theimage.
27
Customised systems solutions
Customised systems solutions, AerotechTelub’s third
operating area, are essentially an extension of techni-
cal services. These are often unique solutions that are
necessary to provide advanced maintenance.
Systems solutions are delivered to customers in the
public and private sectors and focus primarily on test-
ing and measurement, simulation, tactical support
systems, information processing, airports and air traf-
fic control, and telecommunication contract services.
In 2001 AerotechTelub received an order for a
customised air traffic control system for Stockholm’s
Arlanda Airport. On the defence side, orders were re-
ceived from, among others, the Swedish Defence Ma-
teriel Administration for type-specific maintenance
equipment for Gripen.
The City of Gothenburg’s Public Transport depart-
ment placed an order worth approximately SEK 17
million for a so-called TETRA system. TETRA, which
stands for TErrestrial Trunked RAdio, is a digital
platform new to Sweden for use in two-way radio
voice and data communication. TETRA provides se-
cure, fast and flexible communication and has good
development opportunities in the public safety area
in Sweden.
Other operations
In addition to AerotechTelub, the business area com-
prises operations in advanced air defence target tow-
ing, component maintenance and materials technol-
ogy. The Swedish defence is the most important cus-
tomer for special flight operations services – i.e.
training for air defence, missiles and EW systems –
although services are also exported to other countries.
Saab’s long-term special flight services contract with
the Swedish Defence Materiel Administration was re-
negotiated in 2000 and a new agreement worth SEK
300 million was signed for the period 2003–2009.
Component maintenance operations are global
and services are provided to a number of airlines
around the globe. Maintenance is offered for aircraft
manufactured by Embraer, Boeing, Bombardier, Saab
and Fokker, among others.
The business area includes Scandinavia’s leading
materials engineering company, with considerable la-
boratory resources of its own. Materials technology
support can be provided for the entire lifecycle of a
product, from development to production, mainte-
nance and recycling.
AerotechTelub has suppliedprimary functions for the airtraffic control system for theSwedish Civil Aviation Admini-stration’s new traffic controltower at Stockholm’s ArlandaAirport.The system containsradar presentation, flight planhandling, weather presentationand remote control systemsfor radar and VHF stations aswell as monitoring systems.
28
SAAB BOFORS DYNAMICS
Saab Bofors Dynamics is a complete missile systems house and develops ad-
vanced systems for precision engagement. Systems have been developed for
air, ground and naval forces, in Sweden as well as for the international market.
Dynamics has the ability to develop high-quality weapon systems either on its
own or as part of international co-operations. Systems that support and build
a modern network-centric defence.
29
2002 will be a very important year for Saab’s missile
operations and the international missile industry as a
whole. Many important decisions will be made and the business
area’s development will be highly dependent on how they turn out.
The successful restructuring of Saab Bofors Dynamics in recent
years puts us in a good position provided there are no dramatic
changes.”
Ingemar Andersson, Head of the business area
“
Complete in the area of guided weapons
Saab Bofors Dynamics has a product range and breadth
of competencies and technologies to cover a large
part of the precision engagement area. The business
area develops and manufactures army, naval and air
force systems to defend against a variety of military
threats. Its products are used by armed forces around
the world.
Operations are mainly divided into three parts:
missile, anti-tank and underwater systems. The range
of products and development projects consists partly
of systems developed in-house and partly of Saab
Bofors Dynamics’ participation in a number of major
international collaborations primarily in the missile
area.
The business area’s improved earnings are due to
a combination of successful restructuring, a clearer
profile relative to the Swedish customer and export
success in anti-tank systems.
The number of employees has been reduced from
2,500 to 1,900 and a new competence-oriented organ-
isation has been introduced. Efficiency has been im-
proved at the same time as costs have been lowered.
In 2002 many important decisions affecting the
business area will be made, in Sweden and interna-
tionally. During the first half-year alone major issues
involving TAURUS, MBT LAW and METEOR will be
resolved.
Missile systems
In missile operations, important projects are in differ-
ent stages of development. This applies in particular
to large international co-operations, such as the IRIS-T,
METEOR and TAURUS systems. Overall, Saab achieved
considerable success in 2001 with its existing products,
where the step to direct sales and production is shorter.
In the export market, an agreement was signed in
2001 with the Finnish Navy to update and modernise
its RBS15 anti-ship missile system. The order is worth
SEK 500 million.
In addition, the German Navy declared its intent
to acquire the third-generation RBS15 Mk3. At the end
of 2001 the German Bundestag approved the alloca-
tion of funds to purchase five corvettes, which will be
equipped with the RBS15. The contract has not yet
been finalised, but its value is in the same range as
the Finnish order. Germany’s decision is expected to
greatly impact interest in RBS15 from other countries.
Australia is in the final stages of procuring Saab’s
RBS70 air defence missile. The system has previously
been supplied to around twenty countries, and an
Australian decision is expected in 2002.
The development of the BAMSE air defence missile
is almost completed and preparations for the series
production ordered by Sweden in 2000 is under way.
The RBS15 anti-ship missile can be launched from land, sea orair. It has previously been supplied to three countries. Negotia-tions are now under way with Germany that could open thedoor to new export successes.
30
Anti-tank systems
Anti-tank operations to a large extent are focused on
volume sales of existing products and are distin-
guished by the large number of orders. Most cus-
tomer relationships are based on steady deliveries of
follow-up orders. Systems such as Carl-Gustaf, AT4
and AT4CS are exported to around forty countries.
In 2001 a number of new customer relationships
were established, further strengthening the export
dimension of the operations as well as Saab’s posi-
tion as an international leader in anti-tank weapons.
In addition to the export success of its existing
products, Saab made important progress in the de-
velopment of MBT LAW (Main Battle Tank Light
Anti-armour Weapon) in 2001. MBT LAW is what is
usually known as a next-generation light anti-tank
weapon, following in the same strong tradition as
Saab Bofors Dynamics’ AT4, Carl-Gustaf and BILL
systems.
MBT LAW is offered to the UK as NLAW (New
Light Anti-tank Weapon) and can be in operational
service by the British Army in 2005. The project is
managed by a consortium in which Saab and Thales
UK are the dominant partners. Sweden has decided
to participate in the project pending a British go-
ahead.
Underwater systems
The torpedo market is being held down by interna-
tional overcapacity, which is affecting profitability
and growth. The industry is in a consolidation phase,
in which partnerships and other structural solutions
are shaping its future. Saab Bofors Dynamics is
working on its internal structure in this area, which
will lead to the phase out of several units in 2002,
and it is engaged actively in forming international
partnerships and alliances.
International co-operations
As in many other areas of the defence industry,
development costs for guided weapons have risen
substantially. Few countries outside the U.S. feel they
can afford to develop advanced missiles on their own.
To maintain expertise on an overall systems level
but share development costs, many countries are
therefore involved in cross-border missile develop-
ment projects. Leading anti-tank projects such as
MBT LAW are also carried out in multinational co-
operations.
Due to the high development costs, changes in
security policy and Sweden’s ambition to take part in
international defence materiel co-operations, Saab is
involved in several projects.
Saab is developing the target seeker on the IRIS-T
short-range air-to-air missile, which will replace
the older U.S. Sidewinder and be used on Gripen
and a number of other fighters. Development of IRIS-
T has been under way for several years in a co-oper-
ative effort between companies from five countries.
The first missiles are scheduled for delivery in 2003.
Saab and Sweden’s share of the project is approxima-
tely 20 per cent.
Saab Bofors Dynamics is a complete missile systems houseand can offer a broad range of applications for use in the air,on land, at sea and under water.
Air-to-air
Air-to-surface
Air defence
Anti-tank
Anti-ship
Underwater weapons
IRIS-T METEOR
RBS15 TAURUS /KEPD 350
BAMSE RBS 70
RBS15
TORPEDO 2000
BILL 2 AT4 CARL GUSTAF STRIX MBT LAW
31
The medium-range (Beyond Visual Range) METEOR
missile is also an international co-operation, in which
Saab is taking part together with companies from
five other countries. METEOR is being developed to
replace AMRAAM and will be used on Gripen, Euro-
fighter, Rafale, and other fighters. Saab and Sweden’s
share is approximately 10 per cent.
Together with LFK of Germany, Saab is develop-
ing TAURUS/KEPD350, a so-called standoff missile.
The German Air Force is the main customer and de-
velopment work is being carried out in close co-oper-
ation with German authorities. TAURUS, which has
been successfully tested in the Gripen system, is well
suited to meet the demands that the Swedish defence
is expected to place on this type of weapon system.
Saab’s share of the project is 33 per cent.
IRIS-T, METEOR and TAURUS all have good ex-
port potential outside the countries that are partici-
pating in the co-operative projects. In all three cases,
the potential market numbers in the thousands of
units, and Saab’s share of such export success would
be proportionate to its portion of the development
work.
The MBT LAW anti-tank weapon weighs only 11.6 kg and is amaintenance-free, easy-to-use disposable weapon with a rangeof 20–600 meters.The missiles incorporate both an opticaland an active magnetic sensor for overfly, top attack modeand a sensor system disconnect for direct attack mode.
If the gunner tracks the target for 2–3 seconds, the sys-tem will automatically calculate the missile’s flight path.
32
SAAB ERICSSON SPACE
Saab Ericsson Space is one of Europe’s leading independent space equipment
suppliers and is 60-per cent owned by Saab and 40-per cent by Ericsson.The
business area is a leader in the development and production of computer sys-
tems, antennas and microwave electronics, as well as guidance and separation
systems for satellites, launchers and other spacecraft. Over 90 per cent of
sales are to foreign markets, and Space’s products are supplied to both public
and private sector customers, primarily in Europe and North America.
33
In 2001 the space industry was affected by the slow-
down in the telecommunications sector as well as by
fewer publicly financed research investments. It could take another
year before we see a rebound, but in the long term there is a ge-
neral consensus that demand for space equipment will rise.We
are now evaluating various acquisition candidates in and outside
Europe. Our aim is to continue to grow and develop our position
as Europe’s leading independent company in the industry.”
Bengt Mörtberg, Head of the business area
“
Space – from publicly financed
research to commercial arena
Saab Ericsson Space, which is 60-per cent owned by
Saab and 40-per cent by Ericsson, is an independent
supplier of space equipment. This means that it is
unaffiliated with the two major constellations – Astrium
and Alcatel – which have taken shape in the consoli-
dation of the European space industry. Through its
roots in telecom/IT and aviation/defence, Space can
combine experience and competencies from both
worlds.
In 2001 Europe’s ministers responsible for space
issues approved the financial parameters and opera-
tional focus of the European Space Agency (ESA) for
the upcoming five-year period. Among other things,
they issued the initial go-ahead for Galileo, the navi-
gation system being developed as an alternative to
the U.S. GPS system.
ESA is also investing in the development of
space-based broadband. The Artes project, which is
developing new technologies in satellite telecom-
munications, has been allocated a total of SEK 7.5
billion.
The space industry’s structure is largely the prod-
uct of politically controlled and publicly financed
programs.
But as space’s commercial opportunities are ex-
ploited, players other than politically controlled au-
thorities are beginning to assume a larger role.
The commercial space sector currently accounts
for 55 per cent of Space’s invoiced sales, and even
though space research, for example, is a priority area
for European co-operations, the commercial area of-
fers the biggest growth prospects.
The growing commercial market is also helping to
erase the borders between the North American and
European markets and improving opportunities for
European companies to compete in the U.S. Space
therefore maintains offices and operations in both
Europe and North America.
A competence centre with breadth and depth
In strictly Swedish projects, Space often has more
comprehensive systems and overall responsibility.
This is true, for example, in the case of the ODIN sat-
ellite, which the Swedish National Space Board has
ordered and where Space, in addition to developing
antenna and computer systems, also had responsi-
bility for assembling the satellite and testing all its
onboard systems. ODIN was successfully launched in
February 2001 and is studying the earth’s atmos-
phere and the formation of new stars.
For political and economic reasons, large, publicly
financed space projects are almost always implemen-
ted as part of international co-operations. Therefore
projects are normally divided based on how much
each government contributes. Swedish space compa-
nies can compete for the share allotted to Sweden.
Through its wholly owned Austrian subsidiary, Spa-
ce also has the opportunity to compete for the pro-
jects allotted to Austria.
To enhance its position as Europe’s leading inde-
pendent supplier of space equipment, Space plans to
grow organically and through acquisitions.
In early 2001 an agreement was signed with
Stork to acquire 65 per cent of the Dutch space com-
pany Fokker Space. Negotiations were terminated,
however, when a consensus could not be reached
34
on satisfactory guarantees for certain earlier commit-
ments. Efforts to find other potential acquisition and
partnership candidates are continuing.
An attractive workplace and
competitive systems portfolio
The breadth and depth of its expertise has made
Space one of Sweden’s most attractive workplaces
for highly educated scientists. More than 50 per cent
of employees have college/university-level engineer-
ing educations. In addition, Space for years has
ranked at the top among companies technologists at
Sweden’s institutes of technology would consider
working for.
In computer systems, microwave electronics and
antennas, and separation systems, Space’s products
are very competitive in both the publicly financed
and commercial markets.
The computer systems that Space develops are
used onboard satellites and spacecraft for instrument
and altitude control, packaging payload data, and
monitoring and navigation. In 2001 Space received
an order to supply the data handling system for
JASON-1, an observation satellite developed co-op-
eratively by NASA and CNES, France’s national space
agency. JASON-1 will measure ocean surface topog-
raphy, sea-level changes and seasonal changes in our
oceans. Digital products represent 40 per cent of the
business area’s sales, with exports accounting for 90
per cent.
Microwave and antenna systems handle commun-
ication between satellites and the earth. Space has a
long tradition in the area and during the year re-
ceived an order for a microwave-based measurement
system for the ASTRA 1 K satellite. ASTRA 1 K is the
largest commercial communication satellite ever built.
The main contractor is Alcatel Space Industries. Mi-
crowave products account for 30 per cent of the busi-
ness area’s sales, 90 per cent is exports.
In separation systems, Space dominates the global
market with a 90-per cent market share. Nearly 300
satellite separations – all successful – have been
made with Space’s systems. In 2001 an important
agreement was signed with Lockheed Martin Astro-
nautics on the development and production of future
separation systems. The order value is estimated at
SEK 100 million over ten years. Mechanical products
account for 25 per cent of the business area’s sales,
with 100 per cent outside Sweden.
Commercial and military interest in space
In the long term, development and growth in the in-
ternational space market will primarily be driven by
commercial and military interests, although space re-
search will remain a significant area.
In the short term, both commercial and publicly fi-
nanced space operations remain under financial pres-
sure. Approximately 25 telecommunication satellites
are scheduled for launch in 2002, compared with
30 – 35 in recent years.
The commercialisation of space is expected to
continue in the long term, however. There is still
good potential for fast, inexpensive data and tele-
communication via satellite and as various markets
mature, commercial demand is expected to rise.
Saab Ericsson Space has supplied extensive space equipmentfor Europe’s new Envisat environmental satellite.
35
SAAB AVIATION SERVICES
Saab Aviation Services’ primary focus is on sales, leasing and support of the
approximately 500 Saab 340 and Saab 2000 regional aircraft currently oper-
ating around the world.These aircraft are expected to remain in service for
another thirty years.
36
Saab Aviation Services is focused on the maintenance
and leasing of the Saab 340 and Saab 2000 regional
aircraft manufactured by Saab between 1984 and
1999. Operations are global and are carried out in
part by the maintenance and service company Saab
Aircraft and in part by Saab Aircraft Leasing, which
is responsible for the regional aircraft fleet that Saab
still manages.
Leading service supplier for regional aircraft
An aircraft manufacturer has legal, contractual and
commercial reasons for providing service for the air-
craft it has developed. Saab Aircraft is the holder of
the type certificates for Saab 340 and Saab 2000,
which makes it responsible for the overall airworthi-
ness of the two models and for maintaining and up-
dating manuals and other documentation.
Saab Aircraft provides service and maintenance,
spares, training and manuals for the over 500 Saab-
manufactured regional aircraft, but it also has the
competence to develop new options and handle mod-
ifications.
Saab Aircraft has slightly over 300 employees in
Linköping and around 70 in Washington, DC. Its
strong presence in the U.S. market is due to the fact
that 60 per cent of all Saab 340 are operated by North
American carriers. In order to provide customers fast
service, spare part warehouses are strategically lo-
cated in Europe, the U.S. and Australia.
An insured leasing portfolio
The leasing portfolio consists of nearly 300 Saab 340
and Saab 2000. They are leased to customers around
the world, although most are operated by large region-
al airlines in North America, Europe and Australia.
The portfolio is managed by Saab Aircraft Leas-
ing, which is represented through offices in Wash-
ington, DC, Stockholm, Sydney and Mexico City.
Operator Country 340 2000
Americas
Aerolitoral Mexico 17
American Eagle USA 102
Calm Air Canada 4
Chautauqua USA 26
Chicago Express USA 11
Colgan Air USA 7
Corporate Express Canada 1
Cummins Diesel Aviation USA 1
Express Airlines I USA 25
GMWTS USA 2
Kelly Springfield USA 1
University of Indiana USA 1
Mesaba Airlines USA 73
Peninsula Airways USA 3
Penske Racing USA 1
Provincial Airlines Canada 2
Operator Country 340 2000
Europe & Africa
Air Botnia Finland 5
Air Italy Italy 2
AirJet France 1
Anglo American South Africa 1
Aurigny Air Services Great Britain 3
Carpat Air Romania 2
Crossair Switzerland 32
Crossair Europe France 2
Golden Air Sweden 10 1
Greek Air Force Greece 2
Grossman Air Service Austria 1
Kenya Flamingo Airways Kenya 2
Lithuanian Airlines Lithuania 2 2
Loganair Great Britain 5
Moldavian Airlines Moldavian Rep 3
Nordic Airlink Sweden 1
Ostfriesische Lufttransport Germany 1
Operator Country 340 2000
Europe & Africa
Regional Airlines France 9
Skyways Enterprise Sweden 7
Skyways Express Sweden 6
Swedish Air Force Sweden 5
Trygg Flyg Sweden 2
Asia & Australasia
Air Nelson New Zealand 14
Air Rarotonga Cook Islands 1
Cosmic Air Nepal 2
Hazelton Airlines Australia 9
Hokkaido Air System Japan 3
Japan Air Commuter Japan 11
Japan Civil Aviation Bureau Japan 2
Japan Coast Guard Japan 2
Kendell Airlines Australia 15
Macair Australia 2
Shandong Airlines China 8
The commercial aviation marketplace is experiencing
severe turbulence at the present, which also affects
Saab Aviation Services. However, the effects of these changes vary
throughout the industry and the total effect on the business area
has been less than expected. In the long term, demand for com-
mercial air traffic is expected to increase and by offering cost
effective solutions in terms of aircraft and support structures, Saab
Aviation Services will be in a good position as the market recovers.”
Rolf Eriksson, Head of the business area
“
37
Saab Aircraft Leasing has 38 employees and is head-
quartered in Washington, DC, as the majority of the
portfolio is in North America.
To avoid risk exposure in the leasing operations,
Saab obtained an insurance wrap in late 2000 that
eliminates the market risk in its portfolio. The insur-
ance hedges Saab’s lease revenue for a 15-year period
beginning in 2000. The first loss is 10 per cent and
is covered by previously allocated provisions. The in-
surers consist of a consortium of ten companies, in-
cluding Winterthur, Swiss Re, Mitsui and AMBAC.
Through continued effective management, Saab can
maximise lease revenue and thereby minimise the
first loss in the insurance.
There is a close connection between customer sup-
port and leasing operations. Strong, successful cus-
tomer support has a positive impact on the value of
the aircraft fleet. During the year the co-operation
was further strengthened through the establishment
of the new business area Saab Aviation Services.
In 2001 leases on 18 (18) Saab 340 and 8 (0) Saab
2000 were signed with new and existing customers.
Four (7) aircraft were sold and two were returned
at the expiration of their leases. At year-end 34
(12) aircraft were not contracted to any operator.
Due to contract violations, 5 (6) aircraft were repos-
sessed.
Commercial air traffic
2001 was a difficult year for both national and in-
ternational air traffic. Demand fell as a result of the
terrorist attacks in the U.S. as well as the slowdown
in the global economy. An overall decline in demand
for air traffic affects Saab Aviation Services’ revenues.
In customer support operations, the impact is fairly
proportionate – less traffic means less demand for
service. An increased focus on engineering services
in Europe could slow the decline and potentially sus-
tain a positive earnings trend. The leasing fleet is not
expected to have an effect on income, since its reve-
nue is insured.
The downturn is affecting different parts of the
aviation industry in different ways. Demand is not
only lower, but also changing. For example, lower to-
tal air traffic may lead to higher demand for small,
more cost-efficient aircraft. Thanks to their turboprop
technology, Saab 340 and Saab 2000 are highly com-
petitive in terms of operating cost.
In the long term, demand for air traffic is expected
to rise and by offering an aircraft type that can traffic
regional routes at low costs, Saab Aviation Services
has good opportunities.
Restructuring and divestment
of Celsius Aviation Services
Through its acquisition of Celsius, Saab became
the owner of a sizable aircraft maintenance business,
Celsius Aviation Services. Restructuring and divest-
ment efforts have been under way since the acquisi-
tion in order to eliminate operations that fall out-
side Saab’s core business. This work was finalised in
2001.
Saab 340
Saab 2000
38
The Saab share
Share capital and number of shares
On December 31, 2001 Saab’s share capital amounted
to SEK 1,703,354,800 and consisted of 100,005,372 listed
Series B shares and 6,454,303 unlisted Series A shares.
Series A shares have ten votes each, while Series B
shares have one vote each. The par value per share is
SEK 16. The Series B share has been listed on the Stock-
holm Exchange’s O list since 1998 and on the Attract 40
section of the O list since January 2002. Approximately
47,500,000 Series B shares, corresponding to 45 per cent
of the share capital and 29 per cent of the votes, are
available via the stock market. Of the company’s Series
A shares, 4,207,123 are owned by Investor and 2,247,180
by BAE SYSTEMS. No changes have been made in the
share capital since the market listing in 1998.
Share performance and trading volume
Saab’s market capitalisation was SEK 10.6 billion at
year-end. The price of the Series B share rose by 28 per
cent during the year, compared with a 17-per cent de-
cline for the Stockholm Exchange’s general index. The
share price reached a high of SEK 112.00 on July 11 and
a low of SEK 71.00 on January 9. During the year a to-
tal of 33,426,257 Series B shares were traded, corre-
sponding to 70 per cent of the shares available.
Beta shows how much a share fluctuates in relation
to the market as a whole. According to the Stockholm
Exchange’s calculations, the beta for Saab’s Series B
share was 0.42, indicating that it fluctuated 58 per cent
less than the market average. Saab’s stock covariance
was 0.11, which means that 11 per cent of the share’s
price performance is due to the market’s development
as a whole.
Ownership structure
The number of Saab shareholders decreased during the
year to around 39,000. Swedish and international insti-
tutional investors owned approximately 93 per cent of
the share capital and 96 per cent of the votes. Individu-
al Swedish investors held approximately 7 per cent of
the share capital and 4 per cent of the votes.
Dividend and dividend policy
The Board of Directors is recommending that the
Annual General Meeting approve an increase in the
dividend to SEK 3.25 (3.00) per share, corresponding
to 31 per cent (31) of net income.
Saab’s long-term dividend policy is to distribute
20–40 per cent of net income.
Convertible debenture loan
In 1998 a convertible debenture loan was issued to
Saab’s employees. The loan amounts to SEK 254 mil-
lion and if fully converted raises the number of Series
B shares by 2,787,500, corresponding to a dilution of
2.55 per cent of the share capital and 1.67 per cent of
the votes. Conversions to Series B shares are permit-
ted between December 4, 2001 and July 15, 2004 at a
conversion price of SEK 91. On September 12, 2001
the convertible debenture loan was listed on the
Stockholm Exchange. The interest rate on the loan is
equivalent to the 12-month STIBOR rate less 45 bps.
The current rate for the period June 1, 2001 – May 31,
2002 is 4.00 per cent.
Share repurchase program
The Board of Directors received authorisation from
the 2001 Annual General Meeting to decide, until the
following Annual General Meeting, to acquire and
transfer up to 10 per cent of the company’s outstand-
ing shares. The authorisation was not utilised during
the year.
Saab on the Internet
Saab’s home page on the Internet, www.saab.se, pro-
vides current information on the company and its
share, interim and annual reports, and the means to
contact the Investor Relations department.
Saab B, June 18, 1998 – February 18, 2002General index 000s of share traded,
(incl. aftermarket)B-share, high/lowB-share, last paid
60
80
100
120
140
160
180
50
'98 '99 '00 '01 '02(c)SIX
2,000
4,000
6,000
8,000
J F M A M J J A S O N D J F M A M J J A S O N DJ F M A M J J A S O N DJ J A S O N D J F
39
Largest shareholders
As of December 31, 2001 No. of % of according to Securities shares, share % ofRegister Centre thousands capital votes
BAE SYSTEMS, UK 37,367 35.1 35.0Investor 21,563 20.3 36.1Wallenberg foundations 9,255 8.7 5.6Chase Manhattan Bank, UK 1) 4,616 4.3 2.8State Street Bank & Trust Co., USA 1) 3,297 3.1 2.0AMF Pension 3,000 2.8 1.8Fidelity funds, USA 2,192 2.1 1.3Third Nat’l Pension Insurance Fund 1,703 1.6 1.0AMF Pension funds 1,252 1.2 0.8Eikos fund 1,250 1.2 0.8Skandia 1,087 1.0 0.7SHB funds 1,074 1.0 0.7Northern Trust Co., UK 1) 610 0.6 0.4Pictet & Cie, Switzerland 577 0.5 0.3GMO International Funds, USA 525 0.5 0.3Boston Safe Deposit and Trust, USA 1) 472 0.4 0.3FPG/AMFK 460 0.4 0.3SPP Livförsäkring 455 0.4 0.3SEB 439 0.4 0.3Catella funds 436 0.4 0.3Subtotal, 20 largest shareholders 91,630 86.0 91.1Other Swedish shareholders 10,776 10.1 6.5Other international shareholders 4,234 3.9 2.4Total 106,460 100.0 100.0
Maximum dilution, convertibles 2,787,500 2.6 1.7Total after dilution 109,247,175 39
1) Nominee-registered, primarily U.S. funds.
Distribution of shareholdings % of % of
Number Number of share- Number of shareof shares shareholders holders shares capital
1– 500 36,300 93.2 2,680,326 2.5501 – 1,000 1,409 3.6 1,178,745 1.11,001 – 5,000 935 2.4 2,020,403 1.95,001 – 10,000 113 0.3 852,462 0.810,001 – 50,000 103 0.3 2,139,790 2.050,001 – 100,000 25 0.1 1,767,821 1.7100,001 – 10,000,000 45 0.1 36,890,057 34.710,000,001 – 2 – 58,930,071 55.4
Total 38 ,932 100.0 106,459 675 100.0
Series B share data 1998 – 20012001 2000 1999 1998
Closing prices at year-end, SEK 99.50 78.00 82.00 85.00high for the year, SEK 112.00 94.50 91.50 90.50low for the year, SEK 71.00 64.50 58.00 57.00
Average daily turnover,no. of shares 1) 133,705 81,959 107,732 150,904
Yield, % 3.3 3.8 3.0 2.4Price/equity, % 159 146 185 224
P/E ratio 9.4 8.0 9.3 9.9P/EBIT, multiple 6.6 5.4 7.9 10.3
Net sales, before conversion, SEK 147.37 167.60 85.00 77.50Net sales, after full conversion, SEK 143.61 163.30 82.90 75.50
Net income, before conversion, SEK 10.59 9.75 8.82 8.55Net income, after full conversion, SEK 10.32 9.50 8.60 8.35
Equity, before conversion, SEK 62.74 53.26 44.23 37.90Equity, after full conversion, SEK 63.46 54.22 45.43 39.25
Cash flow from operating activities,before conversion, SEK 18.53 –13.20 –5.50 15.05after full conversion, SEK 18.06 –12.85 –5.40 14.70
Dividend (Board’s 2001 proposal), SEK 3.25 3.00 2.50 2.00Dividend /net income, % 31 31 28 23
Total dividend, SEK m. 346 319 266 213Dividend growth, % 8 20 25 –
No. of shareholders 38,932 40,987 45,296 51,945Share of foreign ownership, capital, % 51 54 54 57Share of foreign ownership, votes, % 45 47 47 49
No. of shares before conversion 106,459,675No. of shares after conversion 109,247,175
1) Saab B on Stockholm Exchange.
Shares and votes, December 31, 2001
Number % of total Number % of totalShare class of shares shares of votes votes
Series A 6,454,303 6.1 64,543,030 39.2Series B 100,005,372 93.9 100,005,372 60.8
Total 106,459,675 100.0 164,548,402 100.0
Analysts who cover Saab
Alfred Berg, StockholmGustaf [email protected]
Aragon Fondkommission, StockholmPeter Nyströ[email protected]
BNP Paribas, ParisOlivier [email protected]
Carnegie, StockholmGustaf von [email protected]
CDC Ixis Securities, ParisPerre-Antony [email protected]
Crédit Agricole Indosuez Chevreux, ParisRémi [email protected]
Credit First Boston Suisse, LondonHarald [email protected]
Credit First Boston Suisse, New YorkPierre A. [email protected]
Deutsche Bank, ParisVirginie [email protected] [email protected]
Enskild Securities, StockholmStefan [email protected]
Exane, ParisBertrand [email protected]ène [email protected]
Goldman Sachs International LondonSash [email protected]
HSBC, StockholmClaes [email protected]
Lehman Brothers, LondonColin [email protected] [email protected]
Merrill Lynch, LondonCharles [email protected]
Morgan Stanley, LondonTim [email protected] [email protected]
Nordiska Fondkommission, StockholmHenrik [email protected]
Schroder Salomon Smith Barney,LondonNick [email protected]
Société Générale, ParisPhilippe [email protected]
Swedbank, StockholmMats [email protected]
UBS Warburg, StockholmAnders [email protected]
Environmental report
tile organic solvents, chromates and cadmium. Saab
is also actively participating in “GreenPack”, a pro-
ject designed to environmentally adapt electronics,
and in another project that promotes the recycling of
composite materials. Several of these R&D projects
are conducted internationally in co-operation with
other companies and organisations and within the
framework of the EU’s research programs.
Environmental data 1999, 2000 and 2001
Saab’s most significant environmental impact is from
its plants in Linköping and Karlskoga, where a num-
ber of workshops manufacture aircraft and compo-
nents, missile systems, defence electronics and explo-
sives, and maintain aircraft and equipment. Saab also
has an airfield in Linköping to test and deliver air-
craft. The airfield handles regular traffic as well.
More information on Saab’s environmental issues is available online at www.saab.se and inthe Financial Review.
Saab will comply with applicableenvironmental regulations andthrough continuous improve-ments in its operations minimisethe environmental impact of itsplants, production and productsas far as it is technically possibleand financially reasonable. En-vironmental work will be activelypursued.
The business areas and sub-sidiaries that have operations or
products that can impact theenvironment will maintain an en-vironmental management systemthat complies with ISO 14001.
Employees will be kept in-formed and provided with thenecessary training in environ-mental issues. Saab will showan openness and cooperatewith customers, authorities andother parties with an interest inenvironmental issues.
Environmental policy
Environmental management
Saab is actively working to reduce the environmental
impact of its operations and products.
The introduction of environmental management
systems is progressing within the Group. Certain
units have certified their systems, while others have
built up systems largely adapted to ISO 14001. The
environmental management systems are being inte-
grated with established quality assurance systems.
An environmental council within the Saab Group
handles Group-wide environmental issues.
Saab participates in the so-called Environmental
Index, a survey compiled by the Swedish business
daily Finanstidningen and the insurance company
Folksam. The report for 2000 indicated, among other
things, that Saab’s carbon dioxide emissions per
krona of sales were lower than the average for the
engineering companies that took part in the survey.
Prioritised environmental issues at Saab
Management and reduction of hazardous sub-
stances in operations and products
Reduced emissions to the atmosphere and water due
to volatile organic solvents (VOCs) and metals,
among other things
Waste handling and treatment
More efficient use of raw materials and energy
Control and monitoring of land contaminants
Research and development
To meet safety and technical performance require-
ments, companies in the aerospace and defence in-
dustry have to use chemical substances that are clas-
sified as hazardous to humans and the environment.
Some of Saab’s operations have for years utilised a
detailed process to monitor and follow up their haz-
ardous chemicals. The same procedure is now being
gradually introduced in all companies in the Group
that make extensive use of chemicals.
Saab has initiated several projects to replace haz-
ardous substances in cleaning and surface treatment
processes and various paint systems. The substances
with the highest priority are trichloroethylene, vola-
40
'99 '01'000
10
20
30
40
50
Consumption ofchlorinated volatileorganic solvents
Tonnes
Emissions of volatileorganic solvents
'99 '01'000
100
200
300
400
500
Tonnes
Energy consumption
ElectricityHeating
'99 '01'000
50
100
150
200
250
GWh
More than 80 per centof chlorinated VOCsare used by Aerospace.Objectives and programshave been established toreduce consumption.Thedecrease since 1999 ismainly due to the divest-ment of operations.
Nexplo accounts formore than 80 per centof VOC emissions. Ob-jectives and programshave been establishedto reduce emissions.
A large part of the de-crease in energy con-sumption is due to thedivestment of opera-tions. Several businessareas have programs to reduce energy con-sumtion.
Saab B17
Saab J21
Saab J29 Tunnan
Saab Safir
Saab 35 Draken
Saab 92
Gripen
Command and control systems
AT4
RBS15Saab TransponderTech
METEOR
Saab 340
Saab-Scania 1969–95
Satellite
ODIN
41
Saab – over 60 years of high technology
At the brink of World War IIWhen Svenska Aeroplan Aktiebolaget was founded in 1937, its primary aim was to meet theneed for a domestic military aircraft industry in Sweden.
When deliveries of its first aircraft, the light bomber and reconnaissance aircraft B17,began in 1941, Saab became the dominant supplier to the Swedish Air Force. With the modi-fied J21R in 1947 and introduction of the J29 Tunnan fighter in the late 1940s, Saab andSweden entered the jet age in a big way.
Since then Saab and the Swedish Air Force have followed each other through variousgenerations of military jet aircraft, introducing world-leading technology every step ofthe way. Tunnan was followed in the fifties by Lansen and later by Draken (1960) andViggen (1971).
The engineering companyMilitary aircraft production led not only to commercial aircraft production, butalso a number of other businesses and products. While Saab has always been aninnovative knowledge company, the step to industrial development has neverbeen far off.
In the forties Saab’s aircraft operations spun off what is now known asSaab Automobile, one of many successful non-defence operations gene-rated within Saab. In the sixties Saab helped to create Sweden’s computer,missile and space industries.
In 1969 Saab and Scania merged to form Saab-Scania, a companycombining aircraft and defence systems with the manufacture ofautomobiles and trucks. In 1990 Saab Automobile was created, andin 1995 the current Scania was separated from Saab. Since thenSaab has sharpened its focus on high-technology segments of thedefence market.
When the first deliveries of Gripen, the first and thus far theonly fourth generation fighter aircraft in operational service,began in 1993, Saab took another major step in its develop-ment. In 1999 the first export order for Gripen was signedwith the South African Air Force.
The defence companyAfter having been a wholly owned subsidiary ofInvestor since 1991, Saab went public in its currentform in 1998. In connection with the listing on theStockholm Exchange, BAE SYSTEMS acquired a35-per cent stake in Saab and became – togetherwith Investor – the largest shareholder. In 2000Saab acquired the defence group Celsius, andwith it over a century of Swedish defence in-dustry history.
Bofors, for example, has manufacturedcannons since the second half of the 19thcentury, and the defence electronics com-panies now known as SaabTech Systemsand Saab Avionics trace their rootsback to Philips, Data Saab, Ericsson,AGA and Satt Electronics.
By acquiring Celsius, Saabbrought a large part of Swedishdefence industry historytogether under one roof andcreated Sweden’s dominantcompany in the field.
The broad-basedproduct range is clearlyfocused on future de-fence needs.
42
Saab AB, Corporate Identity No. 556036-0793,registered office Linköping, has been listed onthe O-list at the Stockholm Stock Exchangesince 1998 and from 2002 on the O-list Attract40. The principal owners are Investor AB with20 per cent of the shares, corresponding to 36per cent of the votes, and bae systems, with 35per cent of the shares, corresponding to 35 percent of the votes. The remaining 45 per cent ofthe shares are traded on the Stockholm StockExchange.
Saab GroupSaab is one of the world’s leading high-techno-logy companies, with its main operations focus-ing on defence, aviation and space. Saab hasthe world as its market, but research, develop-ment and production are carried out princi-pally in Sweden. Saab consists of the businessareas Saab Systems and Electronics, SaabAerospace, Saab Technical Support andServices, Saab Bofors Dynamics, SaabEricsson Space and Saab Aviation Services.
IMPORTANT EVENTS AND STRUCTURAL MEASURESAcquisitions and divestments during the yearEffective January 1, 2001, the 50 per cent mino-rity share in Ericsson Saab Avionics has beenpurchased for SEK 225 m. Ericsson SaabAvionics, which thereby becomes a whollyowned subsidiary, has changed name to SaabAvionics. The acquisition has no influence onsales or operating income, but has contributedpositively to the net profit. Through mergerswith corresponding operations under SaabTech Electronics, Saab Avionics has gatheredtogether all the avionics and electronic warfareoperations within the Group. The optronicsoperation at SaabTech Electronics has beendivested to FLIR Systems.
Through the acquisition of TietoEnator’s 43per cent share for SEK 1,100 m., AerotechTelubbecame a wholly owned subsidiary within theSaab Group from October 1, 2001. This hascreated better potentials for collaboration andsynergies within the Group. During the year,Saab has also invested a further SEK 12 m. inb-business partners B.V., a European venture ine-commerce solutions between companies. So far,Saab has invested a total of SEK 33 m. and theinvestment may come to total about SEK 90 m.
In October, Saab Ericsson Space decided notto fulfil the planned acquisition of 65 per centin Fokker Space B.V., since the seller was un-able to provide acceptable guarantees regard-ing earlier commitments.
Structuring and streamlining of the Grouphave continued during 2001 through divest-
ments. The newly created business manage-ment group is also an important instrument forfurther business co-ordination and synergiesbetween the defence-related business areas.
The following non-core operations have beendivested during the year: Celsius Amtec Corp.,Celsius Aerotech Inc., Aerothrust, 51 per centof the shares in Aero Systems Engineering Inc.,the defence-related part of Hawker Pacific,remaining operations in Kockums Industrier,part of Saab Aviocomp’s Dutch business andthe 25 per cent holding in the German shipyardHowaldtswerke-Deutsche Werft, HDW. Anagreement has also been reached on the gradu-al divestment of Hawker Pacific to LyntonInternational, which to date has taken over 25per cent of the shares and management responsi-bility. The effect on earnings of these divest-ments was considered in the fair value analysisthat was done in connection with the acquisi-tion of Celsius in 2000, and has not affected theearnings of the Saab Group.
During 2001, Saab’s strategy to create valu-es through the implementation of defencetechnology in commercial markets has beenfurther strengthened through the creationduring the year of a Venture Capital functionwith the purpose to strengthen and focus thisstrategy. Saab Marine Electronics, whose pro-ducts have been developed from a radar alti-meter for missiles, was divested during theyear to the American electronics group,Emerson, with a capital gain of SEK 650 m.Three smaller operations with interestingtechnologies outside Saab’s core areas andwith good growth potential have also got newowners during the year, at the same time asSaab remains a minority shareholder or royal-ty owner and will thereby benefit from futurevalue increases. The share in the associatedcompany Triangle Equipment A/S, whoseproduct for the oil industry has been deve-loped from technology developed by SaabAvionics, has been sold to Global GeoServices, GGS, a company listed on the OsloStock Exchange. A 60-per cent share in thesubsidiary A2 Acoustics AB, which specialisesin active noice control, has been divested toWM-Data and the operation in the subsidiarySanguistech, which works with systems forblood centrifuging, has been sold to Gambro.
The year’s divestments have had a positiveeffect of about SEK 3 billion on net liquidity.
The acquisition of CelsiusIn the year 2000, Saab acquired the defencegroup Celsius. The acquisition brought a good-will, which now finally has been confirmed toSEK 700 m. The acquisition of the outstandingminority in AerotechTelub brought additionalgoodwill of SEK 586 m.
RestructuringIn December 1997, Saab decided to ceasemanufacture of regional aircraft and allocatedreserves totalling SEK 4,079 m. for restruc-turing the industrial operation. Restructuringis proceeding according to plan and reconcilia-tion against the reserve takes place continuously.Remaining reserve amounts to SEK 1,567 m.and relates mainly to estimated costs for theresponsibility of airworthiness. The view isthat remaining reserve is now well adapted tocontinued operations.
In connection with the decision to end pro-duction of regional aircraft, it was also decidedto make a market valuation of the leasing port-folio held by Saab Aircraft Leasing and toadjust the book value to a calculated marketvalue by means of a reservation. At year-end,the loss risk reserve for the leasing operationamounted to SEK 1,648 m. After offset againstthe lease assets with SEK 1,030 m., the provi-sion showed in the balance sheet amounts toSEK 618 m.
In the end of 2000, Saab entered into a finan-cial risk insurance program, which in practiceisolates the performance of the lease portfoliofrom future market risk. During 15 years, from2000, the policy provides a safeguard againstrisks such as market cycles and customerdefault. The financial risk insurance programmeans, that lease income amounted to USD1,170 m. after deduction of a first loss of10 per cent or USD 130 m. is now insured. Theprevious made provisions cover the first loss.The insurance policy covers 199 of the 296aircraft in the portfolio. Of the 97 aircraft notincluded in the policy, 55 are funded withnon-recourse long-term loans and 42 are cover-ed by asset value insurance issued by EKN,the Swedish government agency for exportguarantees. Saab will continue to activelymanage the portfolio to enhance its value.
OPERATIONSBusiness area Saab Systems and Electronicsfocuses on command and control systems,simulation systems, avionics, electronic warfareand signature management, as well as com-mercial operations of IT and electronics. Thebusiness area, which accounted for 24 per centof the Group’s total sales, has good prospectsof playing a central part in the developmenttowards the modern net centric warfare.Operations are characterised by a high level ofactivity in the export field, with products andsystems delivered to over 70 countries. Thebusiness area includes the companies SaabTechSystems, Saab Avionics, Saab Training Systems,Saab Barracuda, Combitech Systems, SaabTransponderTech, Saab Systems Pty Ltd in
Financial Review
43
Australia and the associated company GrintronPty Ltd (49%) in South Africa. The most impor-tant products of the business area are navalcommand and control systems, warner andcountermeasure systems such as radar war-ners, jammers and chaff dispensers mainly forfighter aircraft, display systems, tactical com-mand systems, laser simulation systems andcombat training centers, signature managementequipment and automatic identificationsystems (AIS) for ships and aircraft.
Order bookings during the year have beengood both in Sweden and internationally, andinclude further development of the Swedishtactical command system StriC, developmentand supply of reconnaissance pods for Gripen,a combat training center for Norway, a navalfire control system for Finland and counter-measures equipment for the US Air Force F-15,among others. Major deliveries by the businessarea include laser simulator systems forGermany, the US, Austria and the UK, furtherdeliveries of display systems and avionics forGripen and further development of the navalcommand and control system for the AustralianAnzac program.
Business area Saab Aerospace, which has theoverall system integration capability requiredfor building complete aircraft and defencesystems, develops and manufactures militaryaircraft systems and acts as a partner and supp-lier in subsystems to manufacturers of largecommercial aircraft. The business area account-ed for 25 per cent of the Group’s total sales. Thebusiness area includes Gripen, Future Productsand Commercial Programs. Products include theGripen, an integrated and flexible information,command and weapon system that will remainmodern for many years to come. The world’sfirst fourth-generation combat aircraft are ope-rational with the Swedish Air Force. SouthAfrica has ordered twenty-eight Gripen aircraftand Hungary has leased 14 Gripen from theSwedish Government. During 2001, 18 Gripenaircraft were delivered to the Swedish Air Forceand a total of 116 of the 204 ordered by theDefence Materiel Administration, FMV, havenow been delivered.
The collaboration with bae systems forexporting the Gripen, which started in 1995,has been further strengthened during 2001through the creation of a jointly owned compa-ny called Gripen International. In co-operationwith the Swedish Government, there are alsopossibilities for renting Gripen aircraft toexport customers. In the long-term work ofmarketing the Gripen for export, informationand offers have been supplied during the yearto several countries. Marketing and sales workmay cover a period of several years and is cha-
racterised by a long-term approach where suc-cess leads to co-operation over several decades.In March 2000, the first export order for theGripen was received from South Africa. During2001, Hungary decided to lease 14 Gripenaircraft from the Swedish Government.Customisation of the aircraft for Hungary entailsan order for Saab worth over SEK 1 billion.
In December 2001, the Czech Republic decid-ed to start negotiations on buying 24 new Gripen aircraft. 2001 has thus been a break-through year for the Gripen in the NATO market.
Future Products has taken part in theEuropean Technology Acquisition Programme,ETAP, which is working on analysing therequirements picture for combat aircraftsystems beyond 2020, and has been involved inthe studies for a new advanced joint Europeantrainer aircraft. Commercial Programs is a supp-lier to Airbus and Boeing, an internal supplierto Gripen and a spare parts supplier to SaabAircraft. During 2001, an outline agreement hasbeen signed with the Airbus consortium onbecoming development and production partnerfor the Superjumbo A380. Discussions are inprogress with the Swedish Government con-cerning risk financing in accordance with thefacilities offered to other European companiesin the project.
During 2001, Sweden decided on theprocurement of 18 medium weight helicopters.Saab’s direct involvement in the project willconsist of orders worth about SEK 2 billion,comprising the helicopter’s tactical system forSweden and manufacture of 200 front fuselagesections for the supplier, NH Industries. Thefinal contract for Saab was signed during thefirst quarter of 2002.
Business area Saab Technical Support andServices focuses on the growing market forhigh technology services in aviation, commandand control, information, communications andsensors, and supplies these to both militaryand commercial customers. The business areaaccounted for 19 per cent of the Group’s totalsales and just over half its sales are defence-related. The export share is 18 per cent. Thebusiness area is dominated by AerotechTelub, anadvanced service company primarily orientedtowards supplying advanced technical servi-ces, maintenance and customised systems solu-tions in information technology, communica-tions, electronics and vessel technology. Thebusiness area also includes Saab Nyge Aero,operating in target and special aviation, andaircraft maintenance, Celsius Aviocomp, withoperations in component maintenance on regional aircraft, and CSM Materialteknik, aknowledge company specialising in materialstechnology.
During the year, order bookings have beengood, particularly in the defence-related opera-tions and medical technology. The order formaintenance equipment for Sweden’s fourthGripen wing was one of the most important.Major deliveries during the year includednavigation systems for Combat Boat 90, controland command systems for information co-ordination in the Swedish defence, torpedofire control systems for Norway, air trafficcontrol equipment for the new Arlanda tower,gamma knives and tetra networks for thecity of Gothenburg to provide secure and fastcommunication based on digital technology.
Saab’s operations in precision engagementhave been gathered in business area SaabBofors Dynamics, which develops and pro-duces missile systems, portable anti-armorsystems and underwater systems. Today, thebusiness area is a complete missile systemshouse with products such as air-to-air missiles,air defence, anti-ship and ground target missiles,anti-armor and torpedoes. The business areaaccounted for 15 per cent of the Group’s totalsales, with a presence in many export marketsaround the world. In 2001, sales covered about40 countries.
Saab Bofors Dynamics is taking part in seve-ral international collaboration projects in missi-les, such as the five-nation project for the iris-tshort-range IR air-to-air missile and the Taurusair-to-ground missile, together with the Germancompany LFK (Lenkflugkörpersysteme GmbH).Both the iris-t and Taurus projects are at theend of their development phase and negotia-tions on production contracts have been star-ted. Saab Bofors Dynamics is also a memberof the industrial team behind the Europeanmedium-range air-to-air missile, Meteor.Negotiations on the development contract forthe Meteor are in progress between theindustry and participating nations, and areexpected to be completed during 2002. Atthe same time, a British decision on the nextgeneration of light anti-tank weapon, MBTLAW, is also expected. Saab Bofors Dynamicshas developed and tendered the system inpartnership with Thales (UK).
Among the totally internally developedproducts are the RBS 23 bamse and RBS 70 airdefence missile systems, the RBS 15 anti-shipmissile, the bill 2 anti-armor missile, the Carl-Gustaf mortar system and the AT4 anti-armormunitions. Major orders during the year includ-ed upgrading of the RBS15 for Finland. InDecember, the German parliament decided onthe procurement of new corvettes equippedwith the RBS15, which is expected to lead to an order in 2002. Deliveries during the yearincluded the RBS 70 to Venezuela and the US,
44
bill 2 and upgraded RBS15 to FMV, anti-armor munitions to several export countriesand Carl-Gustaf ammunition to Greece,Norway, Canada and Singapore.
Business area Saab Ericsson Space,which isowned to 60 per cent by Saab and 40 per centby Ericsson, develops and manufactures com-puters, antennas, microwave electronics andmechanical systems for the space industry.About half of its operations concern commerci-al telecommunications projects and the remain-der publicly funded projects in, for example,the European Space Agency, ESA, and bilateraland national programs. Over 90 per cent of thebusiness area’s sales consist of exports.
During 2001, the most important projects inthe institutional market have been the ESA pro-ject metop concerning meteorological satellitesand the scientific satellites rosetta and smart-1.In addition, work has been carried on in theATV project, an unmanned vehicle for trans-ports to and from the international space sta-tion. In the commercial market, work has beencarried on with Spacebus, a platform for com-mercial satellites, and deliveries of separationsystems for a number of launch rockets.
Order bookings during the year includedfurther orders for the meteorological satelliteprogram, metop, equipment for Spaceway, asatellite-based system for broadband services,and manufacture of the next generation ofseparation systems for Lockheed Martin’snew Atlas V rocket.
Saab Aviation Services is a new business areafrom 2001. The core consists of Saab’s leasingand customer support operations in regionalaviation. Since the market risk in the leasingportfolio is handled through an insurance solu-tion, operations are now oriented towards deve-loping portfolio value and the customer supportbusiness. The business area includes SaabAircraft Leasing and Saab Aircraft and a 75 percent share in the Australian company HawkerPacific, which carries out modification andmaintenance operations on commercial aircraft.
Business area Other operations comprises anumber of relatively small niche companies. Inorder to realize values and place these in moreappropriate environments, Saab is aiming atstructural solutions for several of these opera-tions. During the year, a number of niche com-panies and operations have been divested.
FUTURE DEVELOPMENTOne of the world’s leading high-technology companiesIncreasing competition, as well as growingresearch and development costs characterise the
European defence industry. This has led to aconsolidation and internationalisation of theindustry and the formation of large multinatio-nal defence companies operating in a globalmarket. Today, Saab is one of the world’s lead-ing high technology companies operating pri-marily in defence and aerospace and offeringthe broad competence in high technology vitalfor continuing to support its customers andremaining their natural choice. Saab is a com-plete company in important parts of the futuredefence – information gathering, decision sup-port and precision engagement. Close to half ofSaab’s sales go to markets outside Sweden. Thecompany has also greatly increased its opera-tions in the field of advanced services and sup-port, which are considered to be an interestingfuture market.
Products and systemsSaab has a future-oriented and competitiveproduct portfolio with a very good positionfor meeting the orientation we envisage in thedefence market as more and more countries,among them Sweden, are increasing their focuson network-based defence. In the internationalperspective, bae systems partnership and stake-holding are of great importance. Saab drawsconsiderable benefit from this link to the rest ofEurope and other international markets, mani-fested in particular by the Gripen co-operation.
The excellent order bookings have providedSaab with a very strong order backlog, corre-sponding to over two years’ sales. In the areaof systems and defence electronics, Saab istoday an internationally competitive center forthe development of advanced defence systems,partly based on information technology andwith a large export share.
The order backlog for the Gripen is an im-portant base for future operations. Deliveries to the Swedish Air Force are currently about17 aircraft a year, in addition to further deve-lopment of the aircraft system, maintenanceand add-on orders. Deliveries of the customis-ed Swedish Gripen aircraft to Hungary willbegin in 2004 and deliveries of the 28 newGripen for South Africa in 2006. CommercialPrograms is continuing to build up new busi-ness focusing on collaboration with the majoraircraft manufacturers Airbus and Boeing.
By jointly utilizing the systems integrationskill from the Gripen and the company’s broad-ened competence in command and control,Saab has been able to undertake total responsi-bility for the tactical system in Sweden’s newmedium-weight helicopter, an important newarea of operations. In recent years, Saab hasalso grown both organically and throughacquisitions in the area of advanced technicalservices and support, which are considered an
interesting future market, partly through thepotential for outsourcing.
The Finnish order, the German choice of theRBS15 and the decision on the Meteor havelaid the foundation for an internationallycompetitive missile industry. The potentialgrowth increase in the space industry that isexpected to benefit the commercial market hasbeen delayed owing to lower activity in thetelecommunications industry. The institutionalspace market is considered to be stable in thelong term.
THE SAAB GROUP IN 2001OrdersGroup order bookings amounted to SEK 15,274m. (28,141). Of the year’s order bookings 52 percent were from markets abroad. The orderbacklog at year-end amounted to SEK 40,034 m.(41,091), and included defence orders worthSEK 38,040 m. (38,300). The order bookings for2000 included among others the order for 28Gripen aircraft for South Africa at a value ofSEK 9.3 billion.
Order bookingsSEK m. 2001 2000Saab Systems & Electronics 4,262 5,523Saab Aerospace 4,122 12,171Saab Techn. Support & Services 3,096 3,103Saab Bofors Dynamics 2,280 2,853Saab Ericsson Space 757 765Saab Aviation Services 1,454 4,026 Corporate/Other 479 773Internal -1,176 -1,073Saab Group 15,274 28,141
Order bookings for Saab Systems and Electronicsincluded the reconnaissance pod for the SwedishGripen aircraft (SEK 600 m.), a combat trainingcenter for Norway and the first instrumentedtraining system for Italy (together over SEK500 m.), display systems for the South AfricanGripen (SEK 295 m.), a naval fire control systemfor Finland and Sweden (together SEK 130 m.),further development of the Swedish air com-mand and control system StriC (SEK 128 m.),chaff dispensers for the US Air Force F-15(SEK 90 m.), several export orders for camou-flage systems for Norway and other countries(SEK 74 m.), eye-safe laser rangefinders forFrench combat aircraft (SEK 46 m.), a pilot studyfor the future command and control system forthe Swedish Defence (SEK 35 m.) and furtherorders in the Australian command and controlsystem programs (over SEK 100 m.).
Order bookings for Saab Aerospace includedcustomisation of the Gripen aircraft to be leasedby Hungary from the Swedish Governmentwith a value for Saab of over SEK 1 bn, newprecision weapons for the Swedish Gripen
45
(SEK 500 m.), further development, upgrades,add-on orders and spares for Gripen andorders from Airbus for deliveries to the A340-500/600 and A320 (over SEK 300 m.).
Order bookings for Saab Technical Supportand Services consist of a very large number ofsmall orders and thereby an order backlogcovering a shorter period of time.
Order bookings for Saab Bofors Dynamicsincluded the Finnish order for the RBS15 anti-ship missile (SEK 500 m.), a simulator for thebill anti-armor missile system for Austria(SEK 100 m.), several large export orders forAT4 anti-armor munitions and ammunitionfor the Carl-Gustaf mortar system.
Order bookings for Saab Ericsson Spacewere on a level with the previous year, despitethe lower activity in the telecommunicationsindustry. They included contracts withLockheed Martin for the next generation ofseparation systems valued at just over SEK100 m. and supplementary orders in the metopmeteorological satellite program (SEK 100 m.).The commercial market’s share of order book-ings has increased further during the yearand constituted 56 per cent (53) of total orderbookings.
Order bookings for Saab Aviation Servicesmainly comprised spare parts and customersupport for the fleet of Saab 340 and Saab 2000aircraft, while order bookings for Other opera-tions included explosives for Nexplo.
Order backlogSEK m. 2001 2000Saab Systems & Electronics 8,591 8,689Saab Aerospace 27,122 27,097Saab Techn. Support & Services 1,046 1,268Saab Bofors Dynamics 4,088 4,219Saab Ericsson Space 772 816Saab Aviation Services 139 540 Corporate/Other 398 612Internal -2,122 -2,150Saab Group 40,034 41,091
Number of aircraft in the order backlogNumber of aircraft 2001 2000Gripen 116 134
SalesGroup sales decreased to SEK 15,689 m.(17,840), due to divestments of companies andoperations mainly within Saab Systems andElectronics and Saab Aviation Services. In 2001,sales have increased for almost all todayremaining operations and the average organicgrowth was about 5 per cent for comparableunits. The year’s acquisitions have not affectedsales, as they were acquisitions of outstandingminorities. Seventy per cent (62) of sales wererelated to defence. Sales to foreign markets
amounted to SEK 6,313 m. (8,523) or 40 percent (48) of total sales. Total exports from theGroup’s Swedish companies were SEK 4,837 m.(5,123). The Group’s export to EU marketamounted to SEK 2,468 m. (2,583) and totalsales within the EU, excluding Sweden, wereSEK 2,773 m. (2,734).
Sales by market areaSEK m. 2001 2000 Change Sweden 9,376 9,317 1%Other EU countries 2,773 2,734 1%Other European
countries 597 608 -2%Total Europe 12,746 12,659 1%North America 1,250 2,899 -57%Central and South America 168 464 -64%
Asia 761 764 0%Australia, etc. 750 997 -25%Other markets 14 57 -75%Saab Group 15,689 17,840 -12%
Sales by business areaSEK m. 2001 2000 ChangeSaab Systems
& Electronics 3,964 4,364 -9%Saab Aerospace 4,097 3,921 4%Saab Techn. Support
& Services 3,144 2,932 7%Saab Bofors Dynamics 2,493 2,348 6%Saab Ericsson Space 800 713 12%Saab Aviation Services 1,539 3,859 -60%Corporate/Other 615 970 -37%Internal sales -963 -1,267Saab Group 15,689 17,840 -12%
Sales have increased for all remaining opera-tions in Saab Systems and Electronics comparedto the previous year. The increase in SaabAerospace is related to both military and com-mercial aircraft. During the year, 18 (17) Gripenaircraft were invoiced. The delivery of one moreGripen aircraft compared to the previous yearwas to some extent evened out by lower rate indevelopment orders. The sales increase in SaabTechnical Support and Services is mainly attri-butable to organic growth in the defence-relatedbusiness and in the field of medical technologywithin AertotechTelub. The increase in SaabBofors Dynamics depends mainly on increaseddeliveries of Carl-Gustaf ammunition and dis-posable anti-armor weapons and the deliverystart of Torpedo 62 to Sweden. The sales increa-se in Saab Ericsson Space is attributable tohigher volumes in the commercial market. Thesales decreases in Saab Aviation Services andOther operations respectively, are to all extentrelated to divestments, while the customersupport business and the other remainingoperations are on a level with last year.
IncomeIncome statementSEK m. 2001 2000
Sales 15,689 17,840Cost of goods sold -11,697 -13,427
Gross margin 3,992 4,413Gross margin, % 25.4% 24.7%Marketing expenses -1,385 -1,578Administrative expenses -1,062 -1,251Research and development costs -718 -860Items affecting comparability 0 285Other operating income 827 613Other operating expenses -94 -97Share in income of
associated companies 34 8
Operating income 1) 2) 1,594 1,533Operating margin 10.2% 8.6%Result from financial investments -40 -85
Income after financial items 1,554 1,448Taxes -379 -333Minority interest -48 -77
Net income 1,127 1,038Earnings per share, SEK 3) 10,59 9,75Earnings per share after
full conversion, SEK 4) 10,32 9,50Earnings per share before
goodwill amortization1) 12,11 11,471) Includes depreciation of -1,227 -1,336
of which depreciation on leasing assets -519 -5342) Includes goodwill amortization of -162 -1833) Number of shares: 106,459,675 as per Dec. 31, 20014) Number of shares after full conversion: 109,247,175.
Operating income increased by 4 per cent toSEK 1,594 m. (1,533). The result includes thecapital gain from the divestment of SaabMarine Electronics of SEK 650 m. and lastyear’s income included capital gains etc. withSEK 638 m. Operating income before capitalgains was thus SEK 944 m. (895), correspond-ing to an increase of 5 per cent and an impro-vement of the margin to 6.0 per cent (5.0). Theimprovement is mainly due to the continuedrestructuring and increased volumes in SaabAerospace and AerotechTelub.
The capital gains etc. included in operatingincome the previous year of SEK 638 m. con-sisted of capital gains from value realisation ofspin-off activities of SEK 353 m. and the itemsaffecting comparability: reversal of reserve con-cerning Regional Aircraft SEK 246 m., companyrelated funds of SEK 527 m. received fromAlecta (SPP), and provisions mainly regardingcertain development projects in the torpedoand missiles operation from the former CelsiusGroup amounting to SEK 488 m.
Operating expenses have decreased as a resultof continued cost rationalisation and divest-ments. Research and development costs derivedmainly from the business areas Saab Systems
46
and Electronics and Saab Aerospace. Develop-ment costs for the export version of Gripen wereon a level with the previous year.
Other operating income consists mainly ofcapital gains following divestment of com-panies SEK 654 m. (356), trading income inTreasury business SEK 11 m. (45), currencygains and income from secondary activitiessuch as insurance business, property rentalsand sales of machines. Other operating expens-es consist mainly of capital losses SEK 28 m.(17) and currency losses SEK 10 m. (0). Projectinterest on non-utilized advance payments,shown in the gross margin, amounted toSEK 168 m. (172).
Net financial income and expenses amoun-ted to SEK -40 m. (-85), of which Saab Aircraft Leasing SEK 80 m. (68). The improvement isattributable to both the higher return on liquidfunds and non-recurrent items. The averagereturn on external investments was 5.32 percent (4.72) and the average liquidity was SEK3,066 m. (5,400). The financial net has also beenpositively affected as a result of that the formerlongterm net present value calculated receiv-able on Alecta (SPP) due to changed paymentrules and an agreement with the employeeorganizations has become short-term. Incomeafter financial items amounted to SEK 1,554 m.(1,448).
Current and deferred taxes amounted toSEK -379 m. (-333). The tax portion of incomeafter financial items has been affected by thefact that certain capital gains have been asses-sed as tax-free and that certain capital losseshave been assessed as non-deductible andgoodwill amortization. The Group’s effectivetax rate for the year amounted by that to 24 percent. See also Note 14 Taxes, page 61.
Minority interest in income has decreased asa result of the acquisitions of the outstandingminorities in Saab Avionics and AerotechTelubduring the year.
Net income for the year was SEK 1,127 m.(1,038), corresponding to an income per shareof SEK 10.59 (9.75). Pre-tax return on capitalemployed was 15.5 per cent (14.6). After-taxreturn on shareholders’ equity was 18.3 percent (20.0). For definitions of key ratios, seepage 57.
Operating income by business area% of % of
SEK m. 2001 sales 2000 salesSaab Systems
& Electronics 260 6.6 289 6.6Saab Aerospace 351 8.6 333 8.5Saab Techn. Support
& Services 195 6.2 182 6.2Saab Bofors Dynamics 85 3.4 46 2.0Saab Ericsson Space 29 3.6 53 7.4Saab Aviation Services 137 8.9 150 3.9 Corporate/Other 537 480
Saab Group 1,594 10.2 1,533 8.6
Operating income and margin for the remain-ing operations in Saab Systems and Electronicshave improved during the year and by that,the total margin is on a level with the previousyear despite the divestment of Saab MarineElectronics. Operating income for Saab Aero-space and Saab Technical Support and Serviceswere as a result of volume increases comparedto previous year higher with maintained mar-gins. As a result of the integration work to rea-lize cost synergies and focus the operation,which started in 2000, Saab Bofors Dynamicshas increased both operating income andmargin. Operating income for Saab EricssonSpace has deteriorated due to major cost over-run in a few development projects. The costoverrun is mainly related to the developmentof the computer based sensor system for theMetop meteorological system. Operating marg-in for Saab Aviation Services and operatingincome for Corporate/Other operations haveimproved sharply as a result of the year’srestructuring.
Financial objectivesIn the long term, Saab’s goal is to achieve anaverage operating margin of at least 15 per centbefore depreciation and at least 10 per centafter depreciation. In 2001, the operating mar-gin before depreciation was 14.7 per cent (13.5)and the operating margin after depreciationwas 10.2 per cent (8.6). The profitability goal isa return of at least 15 per cent on shareholders’equity, based on the present interest level. In2001, the return on shareholders’ equity was18.3 per cent (20.0). The aim for equity/assetsratio is to exceed 30 per cent. At the end of2001, the equity/assets ratio was 22.3 per cent(18.2).
Finance and liquidityBalance sheetSEK m. 2001 2000
AssetsGoodwill and other intangible assets 1,978 1,619Property, plant and equipment, etc. 4,369 4,712Lease assets 6,103 6,502Long-term interest
bearing receivables 1,296 1,345Shares, etc. 466 950Deferred tax receivables 1,521 1,440 Inventories, etc. 3,729 3,684Short-term interest
bearing receivables 332 606Other receivables 5,401 6,079Cash and marketable securities 4,706 4,182Total assets 29,901 31,119
Shareholders’ equity and liabilitiesShareholders’ equity 6,679 5,670Minority interest in subsidiaries 168 821Provision for pensions 3,678 3,527Other provisions 2,983 3,821Liabilities to credit institutions 1,539 1,963Convertible debenture loan 232 228Lease obligations 3,121 3,916Advance payments from
customers, net 4,194 3,619Other liabilities 7,307 7,554Total shareholders’
equity and liabilities 29,901 31.119
Advance payments from customers, gross 7,131 6,768
Less portion used, which hasbeen reduced from inventories -2,937 -3,149
Advance payments from customers, net 4,194 3,619
Goodwill has net increased through the acqui-sitions of the outstanding minorities in SaabAvionics and AerotechTelub and the divest-ment of Amtec. Of goodwill, SEK 700 m. isattributable to the acquisition of Celsius andSEK 586 m. to the acquisition of the minority in AerotechTelub. The remaining amount isprimarily related to Saab Avionics and theAerotechTelub Group. From 2002, all goodwillwill be allocated to the business areas. Property,plant and equipment are used mainly in thecore business. Lease assets have decreased dueto the divestment of Amtec and relate nowonly to the regional aircraft leasing portfolio.Long-term interestbearing receivables consistamong others of an oil platform on lease toPetrobras. Shares and securities have decreaseddue to the divestment of the shares in HDWand consist now among others of the shares in
47
Nammo and Raufoss. Receivables regardingdeferred taxes are reported net after deductionfor deferred tax in untaxed reserves and relatemainly to unutilized tax deductions for alloca-tions made. Inventories are reported net afterdeduction for utilized advance payments ofSEK 2.9 bn. Just over half of Other receivablesconsists of customer receivables and the remain-ing amount includes VAT receivables andinterim items. Minority interest in subsidiarieshas decreased due to the acquisitions of theoutstanding minorities in Saab Avionics andAerotechTelub and consist after that mainly ofthe minorities in Saab Ericsson Space, Nexploand Combitech Systems. Other allocationsconsist mainly of the phase-out reserve forRegional Aircraft, provisions in regard to theleasing portfolio and restructuring and projectreserves in connection with the acquisition ofCelsius. The convertible debenture loan is relat-ed to the personnel. Lease obligations refer tothe leasing portfolio of regional aircraft. Otherliabilities include supplier and VAT liabilities,and accrued costs.
Liquid funds less liabilities to credit institu-tions have increased by SEK 621 m. to 4,563 m.(3,942). The increase is mainly a net of newadvances and payment from divestment ofbusinesses and high utilization of advanceswithin the Gripen program, utilization of struc-tural reserves, payment of dividend and acqui-sitions of businesses. The Group’s net liquidityafter deduction for allocations to pensionsincreased to SEK 885 m. (415). Group equity/assets ratio amounted to 22.3 per cent com-pared with 18.2 per cent at the beginning of theyear. The interest coverage ratio was 5.50 (5.32).Shareholders’ equity amounted to SEK 6,679 m.(5,670), corresponding to SEK 62.74 (53.26) pershare.
In the following table Saab’s balance sheet isdivided into the core business and the insuredregional aircraft leasing operation.
Subdivided balance sheet Dec. 31, 2001Saab
Aircraft SaabSEK m. Saab Leasing Group
AssetsGoodwill and other
intangible assets 1,978 1,978Property, plant and
equipment, etc. 4,366 3 4,369Lease assets 6,103 6,103Long-term interest
bearing receivables 1,296 1,296Shares, etc. 1,966 466Deferred tax receivables 1,757 1,521Inventories, etc. 3,729 3,729Short-term interest
bearing receivables 332 332Other receivables 4,326 1,075 5,401Cash and marketable
securities 4,706 4,706Total assets 24,456 7,181 29,901
Shareholders’ equity and liabilitiesShareholders’ equity 6,351 1,828 6,679Minority interest
in subsidiaries 175 -7 168Provision for pensions 3,678 3,678Other provisions 2,365 854 2,983Liabilities to credit
institutions 1,312 227 1,539Convertible debenture
loan 232 232Lease obligations 3,121 3,121Advance payments from
customers, net 4,194 4,194Other liabilities 6,149 1,158 7,307Total shareholders’
equity and liabilities 24,456 7,181 29,901
Cash flowOperating cash flow was positive and amount-ed to SEK 1,642 m.
Group cash flow from operating activitieshave further improved to SEK 2,652 m. Work-ing capital has despite higher advances increa-sed mainly due to utilization of part of lastyear’s provisions within Saab Bofors Dynamics,payments related to the regional aircraft busi-ness and decreased lease obligations due toplanned changes in the portfolio. In cash flowfrom investments, the investments in leaseassets are a net of decreased lease assets due tothe divestment of Amtec and a planned increa-se of leasing aircraft on balance sheet, regard-ing aircraft already included in the portfolio.
Operating cash flow of SEK 1,642 m. is dis-tributed between cash flow from the operationof SEK 566 m., from divestments and acquisi-tions SEK 2,336 m. and from increase accordingto plan of internal funding in the lease portfo-
lio and phase-out of regional aircraft produc-tion of SEK -1,260 m.
Summary of cash flow statementSEK m. 2001 2000
1)
Cash flow from operating activitiesIncome after financial items,
excl. share in income of associated companies 1,520 1,440
Depreciation and write-down charged to income 1,227 1,336
Items affecting comparability – -246Taxes -95 -648Cash flow from operating
activities beforechanges in working capital 2,652 1,882
Working capitalInventories etc. -45 270Receivables 671 320Advance payments from
customers, net 575 -1,012Other liabilities -247 -612Lease obligations -795 -717Provisions -838 -1,537Change in working capital -679 -3,288Cash flow from operating
activities 1,973 -1,406Investments in intangible fixed
assets -568 -59Investments in shares etc. 506 43Investments in tangible fixed assets -156 -911Investments in lease assets -120 476Change in long-term receivables 7 -51Cash flow from investments -331 -502Operating cash flow 1,642 -1,908
1) Change compared to pro forma balance as per December 31, 1999.
Capital expendituresThe year’s capital expenditures in property,plant and equipment, excluding lease assets,amounted to SEK 532 m. (1,077).
Net investments including lease assets andintangible fixed assets amounted to SEK -331 m.(-502), including lease assets of SEK -120 m.(476).
SEK m. 2001 2000Saab Systems & Electronics 118 85Saab Aerospace 125 137Saab Techn. Support & Services 119 75Saab Bofors Dynamics 62 57Saab Ericsson Space 29 25Saab Aviation Services 15 45 Corporate/Other 64 653Saab Group 532 1,077
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Research and developmentIn order to maintain a leading position in itsbusiness areas, the Group allocates consider-able resources to research and development,where over 3,000 persons are employed.Investments in research and development aremade primarily for customers in the businessareas Saab Systems and Electronics, SaabAerospace and Saab Bofors Dynamics. Theyear’s expenditures for research and develop-ment amounted to SEK 3,819 m. (3,808), ofwhich SEK 3,101 m. (2,948) relates to customer-funded development.
Internally financed development concernedmainly the export version of the Gripen, butalso for example further development of com-bat training centers and missile systems andtechnical development in telecommunicationsin the area of space.
From 2002, part of the company-fundeddevelopment costs will be capitalized in thebalance sheet due to changed accounting prin-ciples. This will mainly affect the developmentcosts for the export version of Gripen.
SEK m. 2001 2000Saab Systems & Electronics 1,060 1,136Saab Aerospace 1,449 1,513Saab Techn. Support & Services 123 91Saab Bofors Dynamics 934 788Saab Ericsson Space 218 205Saab Aviation Services – 6 Corporate/Other 35 69Saab Group 3,819 3,808in per cent of net sales 24.3 21.3
PersonnelAt the end of 2001, the number of employees inthe Group was 14,028, compared with 15,453 atthe beginning of the year
Number 2001 2000 ChangeSaab Systems
& Electronics 2,744 3,023 -279Saab Aerospace 4,121 4,146 -25Saab Techn. Support
& Services 3,061 3,147 -86Saab Bofors Dynamics 1,903 1,884 19Saab Ericsson Space 678 663 15Saab Aviation Services 842 1,631 -789 Corporate/Other 679 959 -280Saab Group 14,028 15,453 -1,425
FINANCIAL RISK MANAGEMENTThe Group’s operations are continuouslyexposed to financial risks involving currency,interest, credit and liquidity. In addition, thecomplexity of the financial structure is increas-ed since operations to a large extent consist oflong-term projects. The overall policy for thebusiness units is that the financial risks assoc-
iated with operations should be minimized, i.e.financial risk neutrality should be sought.
Exchange risks are defined as the risk thatfluctuations in exchange rates will have a nega-tive effect on Group income. Risk neutrality onexchange rate is achieved through clauses incontracts or through transactions in the currencymarket with forwards or options. Exchange raterisks in bids at fixed prices in foreign currenciesare handled within the internal bank. Interestrisks relate to the risk of negative influence onGroup income as a result of fluctuations in mar-ket rates. Risk neutrality regarding interest risksis achieved by seeking similar interest terms onthe assets and liabilities side of the balance sheet.
Saab Treasury is responsible for liquiditymanagement, internal banking and trading,and external handling of interest and exchangerate risks. Operations are carried out on thebasis of a financial policy established by theBoard and are divided into four portfolios –liquidity management, internal banking, tenderto contract portfolio and proprietary trading.
Liquidity management is handled centrallywithin the framework of an investment policy,determined by the Board of Saab AB. Theplacing policy is based on a benchmark, fromwhich the following deviations are permittedin regard to duration and credit risk:
Bench- Min Max Dec. 31mark risk risk 2001
Government 80% 100% 40% 50%
Mortgage bonds
(min A) 20% 0% 40% 35%
Corporate (min A) – 0% 20% 15%Duration 15 mths 0 mths 27 mths 22 mths
The lowest permitted rating for investments issingle A, according to Moody’s and/or S & Plong term ratings. Credit risk calculation isbased on actual and anticipated credit risk,according to recommendations from the Bankof International Settlement (BIS). At December31, 2001, the risks of the opposite partiesamounted to SEK 3,952 m. (4,038), of whichmortgage institutions SEK 1,018 m. (766).
During 2001, the average net liquidity wasSEK 3,066 m. (5,400). The average return onexternal investments was 5,32 per cent (4,72).
In order to optimize the Group’s externaltransactions and to monitor and overviewGroup transactions, all transactions are madethrough the internal bank.The internal banktakes no risks and all transactions madeagainst internal companies are made simul-taneously against external counterparties ornetted.
The Board of Saab has issued a risk mandatefor proprietary trading, in foreign exchangeand fixed income market instruments of
SEK 20 m., expressed according to Value atRisk (VaR). VaR is a probability-based method,based on historic exchange rate fluctuationsand correlations, and is established practice inthe financial field. The method measures themaximum loss during a certain number ofdays with a certain probability. Within Saab,three days and 99 per cent probability are used.Through VaR, the risks for different types ofassets can be aggregated to a single measure ofrisk. If the accumulated result during the yearis negative, the mandate is reduced by the cor-responding amount. In 2001, trading incomewas SEK 11 m. (45). The average utilized riskmandate (VaR) during the year amounted toSEK 2.4 m. (6.6).
In 2000, the tender to contract portfolio wasadded as a result of an increasing trend towardsfixed price bids in foreign currencies. The pur-pose of the portfolio is to minimize the Group’scurrency risk during the tender period and toreduce the costs of hedging. The operating unitscan sign a tender insurance with Saab Treasurywhen submitting a fixed price bid. Saab Treasuryhandles the currency risk by combining forwardagreements and options, based on the expectedprobability for the deal. The operation is control-led by a policy and a risk measure based on pro-bability-weighted VaR as above.
Saab Treasurys holdings of options, for-wards and other derivatives per December 31,2001 were in nominal terms SEK 18,656 m.(15,299), distributed as follows:
Nominal amount in SEK m. 2001 2000 1999
Interest rate swaps, SEK 2,029 2,250 3,750
Interest rate swaps, foreign
currencies 3,232 3,340 4,056
Futures, SEK 1,650 4,165 4,750
Interest rate options, SEK 2,000 - -
Currency futures 1,855 248 20
Currency forward
contracts 7,890 5,296 3,119
Total 18,656 15,299 15,695
Futures and interest rate swaps in SEK areused for interest risk management in the liqui-dity and trading portfolios, while interest rateswaps in foreign currencies are used forinterest risk management of the aircraft leasingportfolio. Other instruments are futures andoptions for the USD share of provisions forregional aircraft, firm orders for other businessin the Group and outstanding bids in thetender to contract portfolio.
Risk management – insuranceRisk management has the task of identifying,assessing and limiting non-financial risks, pre-venting damage and undertaking responsibil-
49
ity for the Group’s central insurance pur-chasing. This purchasing takes place both onthe open market and in the Group’s own insu-rance company Lansen Försäkringsaktiebolag.
All insurance signed in the Group’s owncompany is re-insured on the external marketon an Excess of Loss basis in order to limit thecompany’s exposure for each claim. In total,the Saab Group’s insurance premiums duringthe year amounted to SEK 71.2 m. (69.2), ofwhich SEK 49.2 m. (45.6) was signed in theGroup’s own insurance company.
Customer financeCustomer finance provides an important toolfor marketing the company’s products. Exportcustomers are setting increasing demands onfinance. Normally, Saab acts together with vari-ous banks and guarantee institutions in seekingdifferent solutions to meet the customer’sneeds. This is done primarily through the bankgiving the buyer credit or through providingsupplier credit. In order to limit risk exposure,the risks are sold on the market to banks andgovernment guarantee institutions, such as theExport Credits Guarantee Board in Sweden.
THE WORK OF THE BOARD OF DIRECTORS The Board of Saab consists of nine memberselected at the Annual General Meeting withoutdeputies and three members with deputiesappointed by the employee organizations.According to the shareholders’ agreementbetween Investor and bae systems, the partieseach nominate three members to the Board. Inaddition to the constitutive meeting, the Boardhas held five ordinary meetings during 2001.At the Annual General Meeting on April 4, allboard members were re-elected.
During the year, the Board has given specialattention to the following issues, among others:
• Streamlining and restructuring of the Group• Business development of the Group• The acquisition of the outstanding minorities
in Saab Avionics and AerotechTelub• Divestments • Exports of the Gripen• Formation of Gripen International• Restructuring of Celsius Aviation Services• Saab’s participation in Airbus A380• The divestment of the shareholding in HDW
The work of the Board follows the workinginstructions that it has set up for its work.The working instructions and the specialPresident’s Instruction regulate the distributionof work between the Board and the President.According to the instruction of work approvedby the Board, normally five ordinary meetings
are held each year, in addition to the constitu-tive meeting. In addition, the Board may meetwhenever circumstances so demand.
According to the working instruction, thecompany’s auditor shall be present at one mee-ting each year in connection with approval ofthe company’s annual financial statements. Theinstruction also sets out the items to be treatedat every board meeting and the special deci-sions to be taken at the constitutive meeting.The President’s Instruction sets out his dutiesand authorisations and includes policies forinvestment, finance and reporting. With oneexception, the Board has declined from appoin-ting subcommittees. According to a decision bythe constitutive Board meeting, a subcommit-tee consisting of Anders Scharp, MarcusWallenberg and George Rose shall handle issu-es concerning remuneration to the Presidentand certain leading company officials.
CONSEQUENCES OF THE EMUFOR THE GROUP EXPOSUREThe Group’s exposure to the Euro is relativelylow. The international aerospace and defenceindustry will continue to be dominated bytrade in USD, which is the principal currencyfor the Group. The Group’s principle invoicingcurrencies are the USD and SEK. For Saab ABand its Swedish subsidiaries, the accountingcurrency will be the SEK as long as Swedenremains outside the EMU.
ENVIRONMENTAL INFLUENCEParent company, Saab ABSaab AB carries on industrial operations thatare subject to licensing according to theEnvironment Act. Such operations concern themanufacture of aircraft and aircraft compo-nents in Linköping and the aspects coveredinclude surface treatment processes, handlingof chemical substances, airport operation andsize of manufacturing facilities. The environ-mental impact of the operations subject tolicensing arises primarily from emissions oforganic solvents to the atmosphere and ofmetals and deicing agents to water, the genera-tion of industrial wastes and the creation ofnoise causing disturbance to the surroundings.The manufacturing operations are dominatedby the category that is subject to licensing.
The Licensing Board granted the license foraircraft manufacture for EnvironmentalProtection in 1990. Saab AB has been grantedexemption from the Chemicals Inspectorate forusing trichloroethylene until 2004.
The GroupThe operations carried on by Saab BoforsDynamics AB, Saab Ericsson Space AB andCSM Materialteknik AB in Linköping are not
subject to licensing or notification according tothe Environment Act, but are covered by thelicense granted in 1990 for aircraft manufactureand the collective operations of Saab AB atRåberga-Tannefors in Linköping. The opera-tions of Saab Aircraft AB in Linköping are sub-ject to licensing according to the EnvironmentAct and are also covered by the license relatingto aircraft manufacture.
Saab Bofors Dynamics AB, Nexplo Bofors ABand Saab Bofors Test Center AB carry onoperations in Karlskoga, which are subject tolicensing according to the Environment Act.Saab Bofors Dynamics AB and Saab BoforsUnderwater Systems AB carry operations inEskilstuna and Motala respectively which aresubject to licensing. AerotechTelub AB carrieson similar operations in Arboga andLinköping. In addition, SaabTech Systems AB,Saab Barracuda AB, Saab Avionics AB andApplied Composites AB carry on operationssubject to licensing in Järfälla, Gamleby,Jönköping and Linköping.
The environmental influence from subsidiarycompanies subject to licensing consistsprimarily of emissions of organic solvents tothe atmosphere, emissions of metals, etc. tosoil and water, generation of industrial wastesand creation of noise causing disturbance tothe surroundings.
The Group has operations subject to notifica-tion in accordance with the Environment Act ateight Swedish subsidiaries: Saab EricssonSpace AB (Gothenburg), Saab Aircraft AB(Arlanda), Saab Training Systems AB(Huskvarna), Saab Avionics AB (Kista),AerotechTelub AB (Växjö), Saab Aviocomp AB(Linköping), Telub AB (Östersund) andApplied Composites AB (Ljungby). Theenvironmental influence from the operationssubject to notification is very limited.
PARENT COMPANY Sales of the parent company amounted to SEK4,097 m. (3,921). Operating income amountedto SEK 421 m. (838).
Net financial income and expenses amount-ed to SEK 930 m. (843) and income after financialincome and expenses was SEK 1,351 m. (1,681).Of the financial net SEK 954 m. (743) are groupcontributions and dividends. After appropria-tions of SEK -6 m. (-148) and paid and deferredtax of SEK -102 m. (-305), net income for theyear amounted to SEK 1,243 m. (1,228).
PROPOSED DISPOSITION OF EARNINGSAs shown in the consolidated balance sheet,unappropriated earnings of the Group amountto SEK 3,297 m. (2,283), of which SEK 1,127 m.(1,038) is income for the year. Allocations torestricted reserves are required in the parentcompany for SEK 0 m. (0). The Board ofDirectors and the President propose that theunappropriated earnings at disposal of theAnnual General Meeting in the ParentCompany, amounting to:
SEK m.Unappropriated earnings carried forward 1,630Income for the year 1,243Total 2,873
To be disposed as follows:Dividend, SEK 3,25 per share 346To be retained in the business 2,527Total 2,873
After the proposed disposition, shareholders’equity in the parent Company will be as follows:
SEK m.Capital stock 1,703Premium reserve 7Revaluation reserve 500Legal reserve 341Unappropriated earnings 2,527Total 5,078
The company’s policy is to issue a dividend of20-40 per cent of the Group’s net income for theyear. The Board of Directors and the Presidentpropose that SEK 346 m. (319), or SEK 3.25 (3.00)per share, corresponding to 31 per cent (31) ofthe Group’s net income for the year be issued asdividend. Equity/assets ratio of Saab is currently22.3 per cent (18.2) and after the proposed dispo-sition of earnings equity/assets ratio will be 21.4per cent (17.4).
REPURCHASE OF OWN SHARESFurther, the Board of Directors will as theprevious year propose the Annual GeneralMeeting an authorization for the Board todecide on repurchase of the company’s sharesup to 10 per cent of the total shares outstand-ing. The mandate is proposed to be valid untilthe next Annual General Meeting. The purposeof the empowerment is to provide the Boardwith increased scope for action in workingwith the company’s capital structure and toenable acquisitions to be made where consider-ed appropriate. Such repurchases may be effectedover the stock exchange or through offeringsto shareholders. It is also proposed that theBoard’s mandate includes the possibility totransfer repurchased shares in accordance withcurrent legislation.
50
Seven-year overview 1)
Pro forma Pro forma Pro formaSEK m., unless otherwise stated 2001 2000 1999 1999 1998 1997 1996 1995
Order bookings 15,274 28,141 15,267 6,849 5,797 16,612 7,736 6,053
Order backlog at year-end 40,034 41,091 29,891 23,637 23,132 27,122 20,042 20,509
Sales 15,689 17,840 18,018 9,053 8,248 8,674 8,159 7,925
Foreign market sales, % 40 48 48 38 41 51 54 60
Operating income 1,594 1,533 1,125 1,104 875 -5,316 -2,066 -399
Operating margin, % 10.2 8.6 6.2 12.2 10.6 neg neg neg
Operating margin before depreciation, % 14.7 13.5 10.7 17.1 14.7 neg neg 5.7
Income after financial items 1,554 1,448 1,116 1,377 1,218 -4,845 -1,572 271
Net income for the year 1,127 1,038 735 939 912 -3,790 -1,385 148
Total assets 29,901 31,119 36,641 28,079 29,680 30,320 28,140 24,966of which Saab Aircraft Leasing 5,445 6,456 8,877 8,877 9,119 9,604 8,817 6,711of which advance payments, net 4,194 3,619 4,631 4,055 4,881 5,078 4,769 3,689
Operating cash flow 1,642 -1,908 N/a -2,368 -1,105 -2,229 1,195 405
Capital employed, average 12,253 12,183 N/a 6,866 6,352 6,440 8,975 8,719
Return on capital employed, % 15.5 14.6 N/a 21.3 21.4 neg neg 5.0
Return on shareholders’ equity, % 18.3 20.0 N/a 21.5 25.6 neg neg 2.5Profit margin, % 12.1 10.0 N/a 16.1 16.6 neg neg 5.5Capital turnover rate 1.28 1.46 N/a 1.32 1.29 1.13 0.92 0.91Equity/assets ratio, % 22.3 18.2 12.8 16.8 13.6 10.2 22.5 23.3Interest coverage ratio 5.50 5.32 N/a 16.8 9.20 neg neg 2.64Earnings per share, SEK 2) 10.59 9.75 6.90 8.82 8.55 N/a N/a N/a
Earnings per share after full conversion, SEK 3) 10.32 9.50 6.73 8.60 8.35 N/a N/a N/a
Dividend, SEK 4) 3.25 3.00 N/a 2.50 2.00 N/a N/a N/aShareholders’ equity per share, SEK 2) 62.74 53.26 44.15 44.23 37.90 N/a N/a N/aCapital expenditures 532 1,077 652 447 521 396 302 257Expenditures for research and development 3,819 3,808 4,462 3,081 2,128 1,792 1,790 1,951Number of employees at year-end 14,028 15,453 16,665 8,031 7,891 7,716 8,110 8,474
1) For definitions of key ratios, see page 57.2) Number of shares as per december 31, 1998 – 2001: 106,459,675.3) Number of shares after full conversion, 1998 – 2001: 109,247,175.4) 2001 proposed dividend.
SEK million Note 2001 2000 2001 2000
Sales 3 15,689 17,840 4,097 3,921Cost of goods sold -11,697 -13,427 -2,862 -2,712Gross margin 3,992 4,413 1,235 1,209
Marketing expenses -1,385 -1,578 -260 -296Administrative expenses -1,062 -1,251 -362 -400Research and development costs -718 -860 -284 -311Items affecting comparability 4 – 285 – 512Other operating income 5 827 613 110 171Other operating expenses 6 -94 -97 -18 -47Share in income of associated companies 34 8 – –Operating income 9 1,594 1,533 421 838
Result from financial investmentsResult from other securities and receivables
accounted for as fixed assets 10 1 27 957 908Other interest income and similar items 11 304 223 136 29Interest expenses and similar items 12 -345 -335 -163 -94Income after financial items 1,554 1,448 1,351 1,681
Appropriations 13 – – -6 -148Income before taxes 1,554 1,448 1,345 1,533
Taxes 14 -379 -333 -102 -305Minority interest -48 -77 – –Net income for the year 1,127 1,038 1,243 1,228
Earnings per share, SEK 1) 10.59 9.75
Operating income includes depreciation of 8 -1,227 -1,336 -155 -161of which depreciation on leasing assets -519 -534 – –of which amortization on goodwill and
other intangible assets -162 -183 – –
Income statementsGroup Parent Company
January – March April – June July – September October – December
SEK million 2001 2000 2001 2000 2001 2000 2001 2000
SalesSaab Systems and Electronics 831 1,063 936 1,017 795 915 1,402 1,369Saab Aerospace 659 962 1,141 909 821 846 1,476 1,204Saab Technical Support and Services 777 683 819 676 591 607 957 966Saab Bofors Dynamics 572 572 649 446 476 484 796 846Saab Ericsson Space 204 163 221 176 185 179 190 195Saab Aviation Services 392 969 397 858 368 1,009 382 1,023Corporate/Other 161 184 152 332 92 208 203 246Internal sales -234 -409 -219 -264 -181 -272 -322 -322
3,362 4,187 4,096 4,150 3,147 3,976 5,084 5,527Operating incomeSaab Systems and Electronics 40 4.8% 61 5.7% 43 4.6% 39 3.8% 37 4.7% 58 6.3% 140 10.0% 131 9.6%Saab Aerospace 64 9.7% 100 10.4% 100 8.8% 74 8.1% 68 8.3% 64 7.6% 119 8.1% 95 7.9%Saab Technical Support and Services 45 5.8% 46 6.7% 44 5.4% 41 6.1% 41 6.9% 39 6.4% 65 6.8% 56 5.8%Saab Bofors Dynamics 14 2.4% -23 -4.0% 18 2.8% -4 -0.9% 15 3.2% 28 5.8% 38 4.8% 45 5.3%Saab Ericsson Space 14 6.9% 16 9.8% 20 9.0% 14 8.0% 9 4.9% 14 7.8% -14 -7.4% 9 4.6%Saab Aviation Services 52 13.3% 20 2.1% 53 13.4% 36 4.2% 24 6.5% 34 3.4% 8 2.1% 60 5.9%Corporate/Other -76 – -28 – -22 – -89 – -23 – -50 – 8 – 9 –
153 4.6% 192 4.6% 256 6.3% 111 2.7% 171 5.4% 187 4.7% 364 7.2% 405 7.3%Capital gains etc. 650 55 – 298 – 33 – 252
803 23.9% 247 5.9% 256 6.3% 409 9.9% 171 5.4% 220 5.5% 364 7.2% 657 11.9%Net financial income -1 8 -7 -35 -25 -40 -7 -18Income after financial items 802 255 249 374 146 180 357 639Net income 631 161 164 254 87 97 245 526Earnings per share, SEK 1) 5.93 1.51 1.54 2.39 0.81 0.91 2.31 4.941) Number of shares 106,459,675
SALES AND INCOME PER QUARTER
51
SEK million Note Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000Assets pledged 41For own liabilities and provisions
Property mortgages 388 419 388 388Chattel mortgages 2,178 2,187 2,101 2,101Lease assets 1) 2,071 2,025 – –Other long-term receivables 203 774 – –Accrued income 59 59 – –Bonds and securities 976 2,685 941 2,600Other assets 527 676 – –
Total assets pledged 6,402 8,825 3,430 5,0891) In addition to the above lease assets pledged, the balance sheet contains assets reported in accordance with finance lease contracts. See Note 20.
SEK million Note Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
ASSETS
Fixed assets
Intangible fixed assetsOther intangible fixed assets 15 144 177 – –Goodwill 16 1,834 1,442 – –
1,978 1,619 – –Tangible fixed assetsLand and buildings 17 3,062 3,321 1,213 1,223Plant and machinery 18 880 1,001 239 261Equipment, tools, fixtures and fittings 19 330 366 91 106Lease assets 20 6,103 6,502 – –Construction in progress and advance
payment for tangible fixed assets 21 97 24 27 510,472 11,214 1,570 1,595
Financial fixed assetsParticipations in Group companies 22 – – 9,376 8,167Receivables from Group companies 23 – – 518 24Receivables from associated companies 24 50 – 33 –Participations in associated companies 25 241 779 3 3Other securities held as fixed assets 26 225 171 77 47Deferred tax receivables 27 1,521 1,440 1,353 1,143Other long-term receivables, interest bearing 28 1,246 1,345 11 424Other long-term receivables, interest free 28 926 976 – –
4,209 4,711 11,371 9,808Total fixed assets 16,659 17,544 12,941 11,403
Current assetsInventories etc.Raw materials and consumables 1,153 1,924 158 203Work in progress 3,584 3,383 2,110 1,929Finished products and goods for resale 1,500 1,187 5 5Advance payments to suppliers 429 339 68 45Less utilized advance payments from customers -2,937 -3,149 -1,816 -1,847
3,729 3,684 525 335Current receivablesAccounts receivable 2,717 2,974 298 137Receivables from Group companies – – 6,930 7,673Receivables from associated companies 136 196 135 190Tax receivables 86 42 – –Other receivables, interest bearing 332 606 – 143Other receivables, interest free 380 906 58 123Prepaid expenses and accrued income 29 1,156 985 268 199
4,807 5,709 7,689 8,465Cash and marketable securitiesShort-term investments 30 4,057 3,121 3,872 3,082Cash and bank 649 1,061 246 372
4,706 4,182 4,118 3,454Total current assets 13,242 13,575 12,332 12,254Total assets 29,901 31,119 25,273 23,657
Group Parent Company
Balance sheet
52
Group Parent CompanyAssets pledged
SEK million Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000Contingent liabilitiesGuarantees to the insurance company Pensionsgaranti FPG/PRI 64 271 64 52Sureties for Group companies – – 5,687 4,375Sureties for others 1) 8,616 7,977 3,441 2,631Sureties for associated companies 159 209 85 118Less amount shown as liability in the balance sheet 2) -2,583 -2,851 – –Total contingent liabilities 6,256 5,606 9,277 7,176
1) Of this amount, USD 541 m. (490) comprises guarantees for sureties of lease agreements related to 140 (162) Saab 340 and Saab 2000 aircraft.2) Of the above sureties in the parent company, 32 aircraft (42) equivalent to USD 158 m. (166) have been accounted for as lease assets in the Group. In the balance sheet
USD 115 m. (162) has been accounted for as liability related to a provision for future deficits according to valid leasing contracts.
SEK million Note Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
EQUITY AND LIABILITIES
Equity 31
Restricted equityCapital stock (106,459,675 shares
with a par value of SEK 16 each) 1,703 1,703 1,703 1,703Restricted reserves 1,679 1,684 – –Share premium reserve – – 7 10Revaluation reserve – – 500 500Legal reserve – – 341 341
3,382 3,387 2,551 2,554Unrestricted equityProfit or loss brought forward 2,170 1,245 1,630 1,497Net income for the year 1,127 1,038 1,243 1,228
3,297 2,283 2,873 2,7256,679 5,670 5,424 5,279
Minority interest in subsidiaries 168 821 – –
Untaxed reserves 32Accumulated excess depreciation – – 444 451Tax allocation reserve – – 234 234
– – 678 685ProvisionsProvisions for pensions and similar commitments 33 3,678 3,527 1,676 1,632Other provisions 34 2,983 3,821 1,594 1,538
6,661 7,348 3,270 3,170Long-term liabilitiesLiabilities to credit institutions 35 759 996 134 57Liabilities to Group companies – – 1,245 384Convertible debenture loan 36 232 228 247 244Lease obligations 37 2,829 3,637 – –Other long-term liabilities 37 547 568 – –
4,367 5,429 1,626 685Current liabilitiesLiabilities to credit institutions 38 780 967 23 35Advance payments from customers 4,194 3,619 2,114 1,620Accounts payable 1,162 1,254 243 277Liabilities to Group companies – – 9,061 9,214Liabilities to associated companies 142 – 270 –Income tax liability 197 427 118 241Other liabilities 39 766 574 231 78Lease obligations 292 279 – –Accrued expenses and deferred income 40 4,493 4,731 2,215 2,373
12,026 11,851 14,275 13,838Total equity and liabilities 29,901 31,119 25,273 23,657
Group Parent Company
Group Parent CompanyContingent liabilities
53
Balance sheet
SEK million 2001 2000 1) 2001 2000
Cash flow from operating activitiesOperating income 1,594 1,533 421 838Depreciation and write down 1,227 1,336 155 161Items affecting comparability – -246 – -246Share of income in associated companies -34 -8 – –
2,787 2,615 576 753
Financial income 305 250 1,093 937Financial expenses -345 -335 -163 -94Tax paid -95 -648 -311 -167
Cash flow from operating activities beforechanges in working capital 2,652 1,882 1,195 1,429
Change in working capitalIncrease (-)/Decrease (+) in inventories etc. -45 270 -190 439Increase (-)/Decrease (+) in current receivables 671 320 -110 -6Increase (+)/Decrease (-) in advance payments 575 -1,012 494 -1,627Increase (+)/Decrease (-) in current liabilities -226 -627 108 -693Increase (+)/Decrease (-) in other long-term liabilities -21 15 – –Increase (+)/Decrease (-) in lease obligations -795 -717 – –Increase (+)/Decrease (-) in provisions -838 -1,537 56 -594
Change in working capital -679 -3,288 358 -2,481
Cash flow from operating activities 1,973 -1,406 1,553 -1,052
Cash flow from investmentsInvestments in intangible fixed assets -568 -59 – –Investments in tangible fixed assets -156 -911 -130 -90Investments in lease assets -120 476 – –Investments in financial fixed assets 506 43 -1,239 -3,668Increase in long-term receivables 7 -51 – –
Cash flow from investments -331 -502 -1,369 -3,758
Operating cash flow 1,642 -1,908 184 -4,810
Other itemsDividend to shareholders -319 -266 -319 -266Minority interest in subsidiaries -701 -8 – –Deferred taxes -353 -13 – –Translation differences etc. 201 198 – –Change in equity – – -14 -36Group contribution given – – -779 -153
Total -1,172 -89 -1,112 -455
Change in net liquidity 470 -1,997 -928 -5,265
FinancingRaised loans – – 65 –Amortization of liabilities -424 -1,118 – -19Change in long-term interest-bearing receivables 49 -165 380 -424Change in short-term interest-bearing receivables 274 -375 143 -143Increase in provisions for pensions and convertible debenture loan 155 132 47 58
Cash flow from financing 54 -1,526 635 -528
Cash flow for the year 524 -3,523 -293 -5,793Cash and bank, short-term investments, receivables from
Group companies at the beginning of the year 4,182 7,705 1,553 7,346
Cash and bank, short-term investments, receivables from Group companies at year-end 4,706 4,182 1,260 1,553
1) Pro forma 2000 as Celsius had been included in the Group from the beginning of the year.
Group Parent Company
Statement of cash flows
54
With accounting principles and commentson the financial statementsAmounts in SEK m. unless otherwise stated
General accounting principlesThe company follows all the recommendationsissued by the Swedish Financial AccountingStandards Council (Redovisningsrådet), whichare applying for the year 2001. The recommen-dations of the Swedish Financial AccountingStandards Council comply in all materialrespects with the principles of the InternationalAccounting Standards Committee (IASC). Incomparison to the previous year, the account-ing principles are unchanged.
In conformance with the legislation on annu-al accounts, the income statement is classifiedaccording to function, pursuant to internalreporting. The functions are as follows: Cost ofgoods sold comprises costs for goods handlingand manufacturing, including salaries andmaterial costs, purchased services and costs ofpremises, and depreciation on fixed assets.Administrative expenses relate to costs for theBoard, company management and corporatestaff functions. Marketing expenses comprisecosts for the company’s own sales organization,including sales subsidiaries, advertising andexhibitions. Research and development costsare reported separately and comprise costs fornew and further development of products, seebelow. Other operating income and expensesrelate to secondary activities, exchange rate dif-ferences on items of an operating character andcapital gains/losses from sales of tangible fixedassets. Also included at group level is capitalgains/losses from divestment of subsidiaries.
Consolidated accounts statementsThe consolidated accounts comprise the ParentCompany and all subsidiaries, associatedcompanies and joint ventures in Sweden andabroad. Subsidiaries are companies in whichthe Parent Company directly or indirectlyowns more than 50 per cent of the voting rightsof the shares, and companies where the ParentCompany owns shares and is entitled toappoint or dismiss more than half the membersof the board or where the Parent Companyotherwise has a decisive influence and a signi-ficant share in the income generated from theiroperations. Associated companies are compani-es in which the Parent Company directly orindirectly has a long-term ownership interestand where the voting rights are between 20and 50 per cent. Joint ventures are companiesin which the Parent Company directly orindirectly has a long-term ownership interest,which is operated by two or more parties andwhere the co-operation is settled in an agree-ment and the agreement stipulates commoncontrol of the business.
The consolidated financial statements areprepared in accordance with Standard RR 1:96of the Swedish Financial Accounting Standards
Council and involve application of the pur-chase method. This means that a subsidiary’sassets and liabilities are accounted for at marketvalue according to an analysis of the acquisi-tion. If the acquisition value of the shares in thesubsidiary exceeds the estimated market valueof the company’s net assets, after analysis, thedifference is considered Group goodwill.Depending on the degree of restructuringrequired in the newly purchased company,provision is made in the acquisition analysisfor anticipated costs to be allocated to astructural reserve.
Associated companies are accounted for inaccordance with the equity accounting methodin accordance with Standard RR 13 of theSwedish Financial Accounting StandardsCouncil. This means that the book value of theshares and participations in associated compa-nies is valued in the consolidated balance sheetat the Group’s share in the equity of the associa-ted companies after adjusting for the Group’sshare of surplus or deficit value, respectively.Thus, consolidated income includes only Saab’sshare in the income of the associated companies,provided this does not result in a negative bookvalue of the shares.
Joint ventures are accounted for in accord-ance with the proportional method in accordancewith Standard RR 14 of the Swedish FinancialAccounting Standards Council. This meansthat the Group’s share of assets, liabilities,income and costs in a common controlledcompany is added item by item with the corre-sponding items in the Group’s income state-ment and balance sheet.
Minority interest comprises the minorityshare in net income and shareholders’ equity.
Companies acquired during the year areincluded in consolidated income for the periodfollowing their acquisition. Revenues and costsof companies sold during the year is not includ-ed in consolidated income, instead the result isincluded in the capital gain or loss.
Unrealized intra-Group profits and internaltransactions are eliminated. Prices of internalGroup supplies of goods are determined byapplying commercial principles and marketprices.
GoodwillAcquisitions within the core areas of Saab arean important component of the Group’s expan-sion. The acquisition of well-established com-panies active in an international environmentnormally means that the acquisition price sub-stantially exceeds the tangible net worth. Themarket price is determined primarily by futureexpectations, which are based on the compa-ny’s market position and know-how.
A company acquisition in which the acquisi-tion price exceeds the company’s net assetsvalued at market price results in intangibleassets, which are amortized over a certainperiod. Normally this so-called goodwill is
amortized over 5 to 10 years, while goodwillarising from strategic acquisitions is amortizedover a period of 20 years. Saab applies a depre-ciation period of 20 years for the goodwill thatarose from the strategical acquisition of Celsiusand the step by step acquisition of Aerotech-Telub.
Goodwill is evaluated for impairment on aregular basis by estimating the discountedfuture cash flow of the business to which thegoodwill relates.
Foreign subsidiaries and associated companiesIntegrated foreign operations’, subsidiaries’and associated companies’ financial statementsare translated to Swedish kronor using themonetary method. The financial statements forthe independent foreign subsidiaries withinSaab Aviation Services, Saab Ericsson Spaceand Celsius Pacific are translated to Swedishkronor using the current method.
Under the monetary method, monetaryitems are translated at the year-end rate, whilenon-monetary items are translated at the ratein effect on the acquisition date. Inventories,property, plant and equipment and sharehol-ders’ equity are translated at the acquisitiondate rate and other assets and liabilities atyear-end rate. With the exception of consump-tion of goods and depreciation of property,plant and equipment, which are translated atthe acquisition date rate, income and expensesare translated at a weighted average exchangerate for the year. The translation difference onmonetary assets and liabilities is included innet income for the year and is reported in theincome statement as follows. The portion of thetranslation difference attributable to operatingitems, primarily trade accounts receivable andpayable, is included in operating income. Theportion of the translation difference attribut-able to interest-bearing items is included infinancial income and expenses.
With the current rate method, assets and lia-bilities are translated at the year-end exchangerate, while income and expenses are translatedat the average exchange rate for the year. Thetranslation difference, that arises in part whentranslating the net assets of foreign companiesat a different rate at the beginning of the yearthan at year-end and in part when net incomeis translated at other than the year-end rate, isreported directly in shareholders’ equity in thebalance sheet.
Sales and incomeSales and income are reported at delivery ofproducts and services at the time the majority ofrisks and rights are transferred to the purchaser.Sales include the sale value less VAT (Value-Added Tax), specific sales taxes, returns andtrade discounts.
Saab applies the Standards RR 10 and RR 11of the Swedish Financial Accounting Standards
NOTES
55
Council and recognize revenue in long-termcontract through percentage of completion. Forlong-term development contracts, revenue isrecognized in pace with completion according tothe Percentage of completion method. From thecalculated total revenue for a project, includinginterest on advances, a deduction is madeduring the respective period in an amount corre-sponding to the incurred costs as a proportion ofthe calculated total costs at the end of the period.Changes in anticipated total revenues and costsper contract are reported in the same period asthey are noticed.
Gross marginFor orders whose manufacturing cost are finan-ced to a significant extent by advances fromcustomers, the effect of advance-paymentfinancing on interest is reported in gross mar-gin. See Note 11.
Depreciation principles for fixed assetsDepreciation according to plan is based on thehistorical cost and estimated useful life of anasset. Write-down is applied in the case of apermanent fall in value. Depreciation accor-ding to plan, including depreciation on good-will, is distributed by function, according to theway the asset is used.
The following depreciation plan is used:Intangible fixed assetsCapitalized expenditure on R&D, etc. 5 yearsComputer software, non-standard 5 yearsGoodwill and other intangible assets 5-20 years
Tangible assetsProperty 20-25 yearsAircraft 25 yearsRevaluation of property 20 years Land improvements 20 yearsMachinery and other technical
installations 5-10 yearsComputers, equipment, tools
and installations 3-10 years
The difference between the above depreciationand fiscal depreciation is, in legal entities,reported as accumulated excess depreciation,which is included in untaxed reserves.
Research and development expendituresExpenditures for company-funded researchand development are normally booked as costswhen they are incurred and are shown underthe heading “Research and development costs”in the income statement. No development costscarried forward are currently on the Group’sbalance sheet. From 2002, the Group will applythe Standard RR 15 of the Swedish FinancialAccounting Standards Council and a certainpart of the company-funded development costswill be carried forward in the balance sheet.
For the development and manufacture of the
Saab 340 and Saab 2000 commercial aircraft,Saab AB and the Swedish Government havereached special agreements whereby theGovernment participates in the projects oncommercial terms. Saab has received a total ofSEK 1,476 m. for the years 1980-94. Theamounts received have been reported as in-come at the same rate as expenditures wereincurred for the projects. According to theagreements, compensation for the Govern-ment’s risktaking was to be paid by Saab in theform of royalties based on the projects’ reve-nues and income. In a supplementary agree-ment between Saab and the SwedishGovernment signed in December 1997, pay-ment to the Government will instead be basedon income from the customer support opera-tion after production has been terminated.Income of the year has not resulted in any pay-ment according to the agreement during 2001.
Guarantee costsCalculated costs for product guarantees areaccounted for in connection with sales of a product.
Items affecting comparabilityStandard RR 4 of the Swedish FinancialAccounting Standards Council implies that theeffects on income of special events and transac-tions of significance are specified within therespective income concept. Examples of suchevents and transactions are capital gains/losseswhen divesting business areas and major fixedassets, write-downs and restructuring costs.For the year 2001, no items affecting compara-bility are reported. Item affecting comparabilityfor the year 2000 relates to the reverse of partof the restructuring reserve for closing the pro-duction of regional aircraft, pension refundsreceived from Alecta (SPP) and provision forcertain development projects from the formerCelsius Group.
Hedging commercial flowsExchange differences on forward contracts relat-ed to contracted future currency flows arereported in the same period as the underlyingflow.
Non-contracted flows concerning provisionsfor restructuring costs where settlement is madein foreign currency are hedged so that no ex-change rate difference occurs upon settlement.
Valuation principles, etc.Assets, provisions and liabilities have beenvalued at the purchase value unless otherwisestated in the following.
InventoriesThe inventory is valued at the lower of acquisi-tion value according to the first in, first outprinciple and actual value. For internally pro-duced semi-manufactured and finished goods,the acquisition value consists of direct manu-
facturing costs and a reasonable markup forindirect manufacturing costs. Inventories inclu-de advances to suppliers. From 1999, inventori-es are reported net, less customer advances,which means that advances from customers ineach project are set off against incurred costs.
ReceivablesAfter individual valuation, receivables have beenvalued in the amounts in which they are expectedto be received.
Convertible debenture loanDuring the autumn 1998, a convertible deben-ture loan to the Group’s employees was issued.The loan bears interest below market interest,which means that the loan is a liability withimplicit interest. The convertible debentureloan has been accounted for in accordance withStandard RR 3 of the Swedish FinancialAccounting Standards Council. This meansthat the reported liability is gradually increasedduring the loan’s duration with an interest, sothat the reported liability at the maturity datecorresponds to the nominal loan amount. Thepresent value of the difference between thereported liability and the nominal loan amountis reported as share premium reserve.
LeasingStandard RR 6 of the Swedish FinancialAccounting Standards Council implies a classi-fication of the lease contracts into finance andoperating categories.
A finance lease implies that the lessee, evenif he does not receive the legal rights of owner-ship of an object, in all significant respectsenjoys the financial rewards and accepts therisks associated with the object. Objects posses-sed in accordance with a finance lease arereported in the lessee’s balance sheet as a fixedasset and the commitment to pay leasing charg-es in the future is reported as a liability. Thelessor’s balance sheet reports his net invest-ment in the lease contract, i.e. the present valueof future leasing charges, as a receivable.
In an operating lease, the financial rewardsand risks linked with ownership mainly affectthe lessor, who reports the object as a fixed asset.
For anticipated or real deficits according tolease contracts related to aircraft finance opera-tion carried on by Saab Aircraft Leasing, provi-sions are made with the discounted present valueof the calculated deficit. Since the leasing port-folio is regarded as a financial asset, which inprinciple must be divestable at a given point intime, a market valuation of the lease contracts isalso made. Surpluses and deficits between leasecontracts in the portfolio are thereby offset.
Other rented assets, for example personalcomputers, are capitalized and accounted foras assets (lease assets) and the commitment topay leasing charges in the future is reported asa liability (lease obligations) if the leases transfervirtually all benefits and risks to the Group.
56
Rentals for other leases are charged against earn-ings over the lease term.
Receivables and liabilities in foreign currencyReceivables and liabilities in foreign currencyhave been valued at the year-end exchangerate. Exchange rate differences in short-termreceivables and liabilities are included in ope-rating income, while differences in financialreceivables and liabilities are reported amongfinancial items. Receivables and liabilitieshedged by forward contracts are valued atthe current forward rate.
Short-term investmentsIn accordance with the Annual Accounts Act,short-term investments are valued at the lowerof acquisition value and actual value.
TaxesTaxes as reported in the income statement, con-sist of paid tax and deferred tax. Deferred taxrepresents the difference between fiscal valua-tion and the valuation in the accounts of assetsand liabilities, but only if the difference is of atemporary nature. Deferred tax is also calcu-lated on unutilized tax losses to be carriedforward. If the calculations result in a deferredtax receivable, this is only accounted for as anasset if it in all probability, is expected to berealized. Deferred tax is calculated in accord-ance with the latest decided tax rate. For income
taxes Saab applies Standard RR 9 of theSwedish Financial Accounting StandardsCouncil. In accordance with the standarddeferred tax related to untaxed reserves hasnot been reported in legal entities, due to the connection between accounting and taxation.
Untaxed reservesTax regulations in Sweden and certain othercountries permit allocations to special reservesin legal entities. In this manner, companies,within certain limits, can apportion and retainearnings in their business without subjectingthem to immediate taxation.
Untaxed reserves are not subject to taxationuntil they are utilized. However, in the eventthe business should incur a loss, the reserves,sometimes within certain limits, may be utili-zed to cover such a loss without the paymentof tax. The total value of the untaxed reservescan therefore be considered risk capital, becau-se any losses to a significant extent can becovered through use of the reserves.
In the Group’s balance sheet, untaxed reser-ves are divided into shareholders’ equity andthe deferred tax liability. In the income state-ment, tax attributable to the year’s change inuntaxed reserves is reported as deferred tax.
ProvisionsProvisions are defined as obligations related tothe current or previous fiscal years as a resultof a business transaction or decision. Such obli-
gations are accounted for when the businesstransaction is known, but as long as there issome uncertainty as to the final amount andthe settlement date, the obligation should beaccounted for as a provision. Pensions, deferredtaxes, restructuring reserves and similar itemsare classified as provisions in the balance sheet.
Provisions for pensions are calculated basedon local legislation and rules in each country.
Transaction with related partiesRelated parties, which Saab has transactionswith, are mainly bae systems, which holds35 per cent of the capital in Saab, and thejointly owned marketing company GripenInternational. Transactions with bae systems,Gripen International and other related parties,if any, are done by applying commercialprinciples.
Personal warrant programThere is only one personal warrant program inthe Group, related to the President, and is a part ofhis pension plan. See Note 2. During the year, thepersonal warrant program has been hedged forshare price increases through a swap-agreement,which in the accounting is treated as a forwardagreement and reported in the unrestricted equity.The hedge has been done to a share price belowthe redemption price. Saab AB carries the total riskfor the actual share price being below the shareprice according to the swap-agreement at the endof the agreement. Calculated costs for socialsecurity expenses for the warrants have beencharged to income and are reported as provisionin the balance sheet. The interest portion of theswap-agreement is charged to the financial net.
Group informationOf the Parent Company’s sales, 4 per cent (4)concerned sales to companies within the SaabGroup, while 18 per cent (21) of the ParentCompany’s purchases were from subsidiaries.
Pro forma financial statementsCelsius is included in the Saab Group as fromJanuary 1, 2000. The pro forma figures for theyear 1999, refers to the Saab Group includingCelsius, as if Celsius had already been includ-ed in the Group from January 1, 1999.
The pro forma figures for the years 1995 and1996 refers to changed accounting principlesregarding lease contracts and Saab AircraftLeasing.
57
Exchange rates for SEK used in the financial statementsYear-end rate Average rate
Country Currency 2001 2000 2001 2000Australia AUD 1 5.42 5.28 5.34 5.32Austria ATS 100 68.45 64.37 67.20 61.25Belgium BEF 100 23.34 21.96 22.92 20.89Canada CAD 1 6.69 6.36 6.66 6.15Denmark DKK 100 126.65 118.70 124.08 113.08Euro EUR 1 9.42 8.86 9.25 8.43Finland FIM 100 158.42 148.96 155.51 141.75France FRF 100 143.59 135.02 140.96 128.49Germany DEM 100 481.58 452.85 472.76 430.93Italy ITL 100 0.49 0.46 0.48 0.44Japan JPY 100 8.12 8.32 8.51 8.50Malaysia MYR 1 2.81 2.51 2.72 2.40The Netherlands NLG 100 427.41 401.91 419.58 382.46Norway NOK 100 118.35 107.15 114.96 103.90Singapore SGD 1 5.76 5.50 5.76 5.29Spain ESP 100 5.66 5.32 5.56 5.07UK GBP 1 15.48 14.22 14.87 13.84USA USD 1 10.67 9.54 10.32 9.13
Definitions of key ratiosOperating margin Operating income as a percen-tage of sales.Capital employed Total assets less non-interest-bearing liabilities and deferred tax liability.Pre-tax return on capital employed Operatingincome increased by financial income as a percen-tage of average capital employed.After-tax return on equity Net income for the yearas a percentage of average shareholders’ equity.
Profit margin Operating income increased withfinancial income as a percentage of sales.Capital turnover Sales divided by average capitalemployed.Net liquidity Short and long-term interest-bearingreceivables, short-term investments and cash andbank less short and long-term liabilities to creditinstitutions and convertible debenture loan.
Equity/assets ratio Shareholders’ equity in relationto total assets.Interest coverage ratio Operating income increasedwith financial income, divided by financial expenses.Earnings per share Net income for the year divid-ed by the number of shares.Shareholders’ equity per share Shareholders’equity divided by the number of shares.
NOTE 1 – EMPLOYEES AND PERSONNEL COSTS
Average no. of employees
of whom of whom2001 men 2000 men
Parent CompanySweden 4,116 82% 4,187 81% UK 2 100% 1 100%Austria 1 100% 1 100%France – 1 100%South Africa – 1 100%
Total Parent Company 4,119 82% 4,191 81%
Subsidiaries Sweden 8,412 80% 9,146 80%Australia 525 84% 479 90%Finland 203 69% 210 70%USA 117 71% 815 84%Austria 114 80% 122 80%Denmark 70 83% 65 86%Singapore 69 77% 79 77%Germany 22 86% 38 92% UK 20 68% 29 72%Norway 12 100% 19 89%South Africa 10 50% 5 40%Netherlands 7 100% 106 94%India 7 86% 19 89%United Arab Emirates 6 83% 6 100%Canada 5 80% 5 100%Japan 5 100% 5 100%Chile 2 50% 2 50%Thailand 1 100% 3 100%France 1 100% 1 100%Russia – – 6 67%Bahrain – – 4 75%South Korea – – 1 100%
Total Subsidiaries 9,608 80% 11,165 80%
Saab Group 13,727 80% 15,356 81%
Salaries, other emoluments and social security expenses
2001 2000Salaries Social Salaries Social
and other security and other securityemoluments expenses emoluments expenses
Parent Company 1,310 619 1,301 641(of which pension costs) 1) 182 1) 163Subsidaries 3,481 1,618 3,946 1,646 (of which pension costs) 574 568
Saab Group 4,791 2,237 5,247 2,287 (of which pension costs) 2) 756 2) 731
1) Of the Parent Company’s pension costs, SEK 6 m. (7) relates to the Board of Directors and thePresident including deputies and executive vice president.The company’s outstanding pension commit-ments to these amount to SEK 69 m. (70), of which SEK 68 m. (65) relates to previous managingdirectors including deputies.
2) Of the Group’s pension costs, SEK 36 m. (55) relates to the Boards of Directors and the President,including deputies and executive vice president.The Group’s outstanding pension commitments tothese amount to SEK 79 m. (91) of which SEK 68 m. (65) relates to previous managing directors includ-ing deputies.
Note 1, cont.Salaries and other emoluments distributed per country and between Membersof the Board etc. and other employees in the Group.
2001 2000
Board & Other Board & OtherPresident employees President employees
Parent CompanySweden 13 1,295 10 1,286(of which bonus, etc.) 2 – 2 –Austria – 1 – 1UK – 1 – –France – – – 1South Africa – – – 2
Total Parent Company 13 1,297 10 1,290(of which bonus, etc.) 2 – 2 –
Subsidiaries in Sweden 52 2,925 62 3,038(of which bonus, etc.) 3 – 3 –
Subsidiaries outside SwedenAustralia 4 177 4 193USA 38 92 38 382Austria 3 55 3 49Finland 2 47 3 47Denmark 2 30 2 24Singapore 1 12 2 16UK 1 11 2 14Japan 1 5 1 3South Africa – 5 – 2Germany 2 4 2 11United Arab Emirates – 3 – –Canada 1 3 1 2France – 1 – 1Norway 1 1 2 7Thailand – 1 – 1Chile 1 – 2 –India – – – 1Netherlands – – 1 31
Total Subsidiaries 109 3,372 125 3,822(of which bonus, etc.) 16 – 27 –
Saab Group 122 4,669 135 5,112(of which bonus, etc.) 18 – 29 –
NOTE 2 – INFORMATION ON REMUNERATIONTO LEADING COMPANY OFFICIALS
In accordance with a resolution of the Shareholder’s Meeting, the fees tothe members of the Board amount to SEK 1,800,000, consisting of SEK700,000 to the Chairman and SEK 275,000 to each of the other membersof the Board elected by the Shareholders’ Meeting, with the exceptionof the President. The Members of the Board nominated by bae systems– Michael Rouse, Anthony Rice and George Rose – all of whom areemployees of bae systems, have declined their Board fees with respectto the bae systems company policy applied. In addition, Board memberErik Belfrage has received a fee of SEK 300,000 for services rendered inthe international marketing of Gripen.
The President and CEO has received salary, bonus and other benefitstotalling SEK 7,670,037, of which bonus SEK 2,375,000.
In the event of termination of employment by the company, the Presi-dent will receive a salary and pension benefits for a period of six months(period of notice). Subsequently, the President will receive a terminationpayment amounting to two years’ salary, based on the current fixedsalary. Salary during the period of notice and termination payment will bededucated from income received from another employer during the sameperiod.
58
Note 2, cont.The retirement age for the President is 60.The President has a bonus based pension plan. The pension cost for
Saab AB consists of pension bonuses amounting to 35 per cent of thefixed salary as long as the President remains an employee of the company.To this must be added the cost of pension bonuses according to the ITPplan. The pension plan for the President has been complemented with apersonal warrant program. The President has been allocated 370,000 personal warrants in Saab AB. The warrants provide entitlement to theacquisition of existing Series B shares at a redemption price of SEK 94 per share and may be utilised during the period January 1, 2003 to December 31, 2005. The cost of the program has reduced the income.
In the case of other leading officials, the benefits according to the ITPplan are applicable after the age of 65. For certain subscribers to the ITPplan is the regulation, that pension benefits, based on salary segmentsbetween 20 and 30 base amounts, also will be payable on salary segmentsabove 30 base amounts.
Furthermore, certain leading officials are entitled, or obliged if thecompany so requests, to retire on pension at the age of 60, or in certaincases 62. The retirement pension up to the ordinary pension age of 65 is70 per cent of the salary at the time of retirement.
For certain other leading officials, pensions have been agreed in accordance with special rules. These state that a pension may be paid as a supplemented retirement and surviving dependants’ pension of 20per cent of the salary in force upon retirement at the age of 65. The ruleshave been replaced by a new pension plan, whereby a premium-basedsupplement of the ITP level of salary portions greater than 20 baseamounts and that the agreements on early retirement have a premium-based level. New agreements will follow the premium-based pension plan.
Other incentive programs do not exist.
NOTE 3 – SALES BY BUSINESS AREA AND MARKET
Group Parent Company
2001 2000 2001 2000
Sales by business areaSaab Systems and Electronics 3,964 4,364 – –Saab Aerospace 4,097 3,921 4,097 3,921Saab Technical Support & Services 3,144 2,932 – –Saab Bofors Dynamics 2,493 2,348 – –Saab Ericsson Space 800 713 – –Saab Aviation Services 1,539 3,859 – –Corporate/Other 615 970 – –Less internal sales -963 -1,267 – –
Saab Group 15,689 17,840 4,097 3,921
Sales by marketSweden 9,376 9,317 3,872 3,822Other EU Countries 2,773 2,734 172 62Other European countries 597 608 – –
Total Europe 12,746 12,659 4,044 3,884North America 1,250 2,899 53 37Central and South America 168 464 – –Asia 761 764 – –Australia, etc 750 997 – –Other markets 14 57 – –
Saab Group 15,689 17,840 4,097 3,921
NOTE 4 – ITEMS AFFECTING COMPARABILITY
Group Parent Company
2001 2000 2001 2000
Allocated pension re-funds from SPP – 527 – 266Project provisions related
to the former Celsius Group – -488 – –Revaluation of leasing porfolio
related to Regional Aircraft – 246 – 246
Total – 285 – 512
NOTE 5 – OTHER OPERATING INCOME
Group Parent Company
2001 2000 2001 2000
Capital gain from sale of
subsidiary 654 356 – –Guarantee fees – – 35 50Income from secondary operations 27 14 – –Capital gains from sale of fixed asset 18 20 – 2
Trading income 11 45 11 45Royalty – 43 – 43Exchange rate differences – 36 – 28Utilization of reserve
for Customer Support – 21 – –Other 117 78 64 3Total 827 613 110 171
NOTE 6 – OTHER OPERATING EXPENSES
Group Parent Company
2001 2000 2001 2000
Capital losses from secondary activities -42 – – – Disposals of tangible fixed assets -26 -17 -5 – Exchange rate differences -10 – -2 –Capital loss from sale of subsidiaries -2 – – –Cost of change of pension regulations – -42 – -42Other -14 -38 -11 -5
Total -94 -97 -18 -47
Aircraft financeIncome statement Saab Aircraft Leasing
2001 2000
Leasing revenue 1,784 1,766Interest revenue 201 240Other revenue 122 91
Total revenue 2,107 2,097
Leasing expenses -905 -791Interest expenses -555 -559Depreciation -519 -460Other expenses -389 -400
Total expenses -2,368 -2,210Utilization of loss risk reserve 261 113
Operating income 0 0
59
Note 6, cont.
Balance sheet summary, Saab Aircraft Leasing2001 2000
AssetsLease assets 6,106 5,917Receivables, Group companies – 1,253Receivables 1,403 1,135Liquid funds 94 –
Total assets 7,603 8,305
Equity and liabilities
Equity 1,828 1,964Provisions 854 1,046Lease obligations 1) 3,121 3,903
Liabilities to Group companies 351 –Other liabilities 1,449 1,392
Total equity and liabilities 7,603 8,305
1) Of which long-term obligations 2,828 3,637
The income statement and balance sheet for Saab Aircraft Leasing aremainly dollar-related since aircraft sales and leasing contracts are alwaysmade in USD. The conversion rates used in the financial statements areshown on page 57.
During 2000, the aircraft on the balance sheet were written down bySEK 1,451 m., of which SEK 1,030 m. against the loss risk reserve and theremaining portion against other liabilities. Total value of the portfolio on and off balance sheet, excluding the 55 aircraft financed with non-recourse funding, amounted to SEK 8.0 bn at year-end. The reserve,adjusting the portfolio to market value, amounted to SEK 0.6 bn at year-end. Net value of the portfolio amounts to SEK 7.4 bn, which is coveredby the insurance taken during 2000.
NOTE 7 – LEASING CONTRACTS
Operating lease contracts Group
Premises and Machines andOutcome buildings equipment
2000 21 602001 26 64
Contracted
2002 29 732003 23 612004 21 322005 11 42006 7 –2007 and onwards 3 –
Total contracted 94 170
Parent Company
Premises and Machines andOutcome buildings equipment
2000 7 292001 10 35
Contracted
2002 12 402003 10 362004 10 162005 4 –2006 4 –2007 and onwards – –
Total contracted 40 92
Note 7, cont.
Aircraft for lease
Payments PaymentsOutcome to lessors from airlines
2000 783 8792001 979 1,053
Contracted
2002 900 9902003 825 9202004 801 8502005 700 7502006 652 6892007 and onwards 3,030 3,302
Total contracted 6,908 7,501
The above commitments relate mainly to lease of Saab 340 aircraft placed with American investors and operators.
Financial lease contracts Aircraft for lease2001 2000
Acquisition value 2,215 2,323Accumulated depreciation -847 -779Write-down for the year -1,077 -725
Residual value according to plan 291 819
Depreciation for the year 125 130Leasing fees for the year 335 348Contracted future leasing fees 1) 1,479 1,8621) The above finance lease contracts relate to 32 (34) Saab 340.
2001 2000
MUSD 100 154MDEM 53 53MJPY 1,929 1,929
The amounts are hedged through deposits and/or other financial instruments in the respective currency.
NOTE 8 – DEPRECIATION ON TANGIBLE AND INTANGIBLE FIXED ASSETS
Group Parent Company
2001 2000 2001 2000
Depreciation according to plan by asset
Other intangible fixed assets -36 -47 – –Goodwill -126 -136 – –Land and buildings -132 -120 -48 -43Plant and machinery -232 -295 -86 -94Equipment, tools, fixtures and fittings -135 -122 -21 -24Lease assets -519 -535 – –
-1,180 -1,255 -155 -161
Write-down
Other intangible fixed assets – -81 – –Goodwill -47 – – –
Total -1,227 -1,336 -155 -161
60
NOTE 9 – OPERATING INCOME BY BUSINESS AREAGroup Parent Company
2001 2000 2001 2000
Operating income by business areaSaab Systems and Electronics 260 289 – –Saab Aerospace 351 333 351 333Saab Technical Support & Services 195 182 – –Saab Bofors Dynamics 85 46 – –Saab Ericsson Space 29 53 – –Saab Aviation Services 137 150 142 –Corporate/Other 537 480 -72 505
Saab Group 1,594 1,533 421 838
NOTE 10 – INCOME FROM SECURITIES ANDRECEIVABLES HELD AS FIXED ASSETS
Group Parent Company
2001 2000 2001 2000
Capital gain from sale of subsidiaries – – 3 270
Capital gain from sale of other fixed assets – 26 – 1
Dividends and contributions received from Group companies – – 954 743
Dividends received from others 1 2 – –Write-down of participations
in Group companies – – – -106Exchange differences – -1 – –
Total 1 27 957 908
NOTE 11 – OTHER INTEREST INCOME AND SIMILAR ITEMS
Group Parent Company
2001 2000 2001 2000
Interest income, Group companies – – 29 2Interest income, other 466 381 173 145Translation and currency differences 6 14 – –Less project interest, accounted
for as a gross margin -168 -172 -66 -118
Total 304 223 136 29
NOTE 12 – INTEREST EXPENSES AND SIMILAR ITEMS
Group Parent Company
2001 2000 2001 2000
Interest expenses, Group companies – – -1 -3Interest expenses, convertibledebenture loan -13 -12 -13 -12Interest expenses, others -202 -202 -95 -20Interest on pension debt -130 -121 -54 -59
Total -345 -335 -163 -94
NOTE 13 – APPROPRIATIONS
Parent Company
2001 2000
Difference between book depreciation and depreciation according to plan– Land and buildings -9 -12– Plant and machinery 3 3
Tax allocation reserve – -139Total -6 -148
NOTE 14 – TAXES
Group
Current tax expenses (-)[/tax earnings (+)] 2001 2000
Tax expenses for the year -115 -648
Adjustment of taxes relating to earlier years 20 –
-95 -648
Deferred tax expenses (-) [/tax earnings (+)]
Deferred tax expenses relating to temporary differences 1) -1,106 298
Deferred tax earnings relating to capitalized tax amount of tax loss carry-forward 1) 1,068 36
Revaluation of deferred tax receivablesin foreign subsidiaries -234 –
-272 334
Taxes on share in associated companies -12 -19
Total tax expenses in Group -379 -333
1) In connection with divestment of operations, SEK 625 m. of opening deferred tax receivables hasbeen realized and resulted in corresponding tax loss carry-forward.
Parent CompanyCurrent tax expenses (–) [/tax earnings (+)]
Tax expenses for the year -303 -209
Adjustment of taxes relating to earlier years -8 –
-311 -209
Deferred tax expenses (–) [/tax earnings (+)]
Deferred tax expenses relating to temporary differences -603 -96
Deferred tax earnings relating to capitalized tax amount of tax loss carry-forward 812 –
209 -96
Total tax expenses in Parent Company -102 -305
Group
Reconciliation of effective tax rate
Income before taxes 1,554 1,448
Tax according to current tax rate for Parent Company 28% 28%
Amortization of Group goodwill 2% –
Other non-deductible expenses 3% 6%
Non-taxable income 1) -20% -10%
Taxes relating to earlier years 4% –
Revaluation of deferred tax receivablesin foreign subsidiaries 15% –
Revaluation of tax receivables/tax liabilitiesin foreign subsidiaries -8% –
Other – -1%
Total effective tax rate 24% 23%
1) Non-taxable income consists mainly of capital gains from divestments of shares in subsidiaries.Non-taxable income last year mainly consisted of reduction of provision.
61
Note 14, cont.
Parent CompanyReconciliation of effective tax rate 2001 2000
Income before taxes 1,345 1,533
Tax according to actual tax rate for Parent Company 28% 28%
Non-deductible expenses 2% 3%
Taxes relating to previous years 1) -9% –
Non-taxable dividends -14% -5%
Taxes relating to risk insurance program foraircraft leasing protfolio – -6%
Total effective tax rate 7% 20%
1) Revaluation of opening tax receivables resulting in tax loss carry-forward.
GroupTax items recorded direct against equity
Deferred taxes relating to write-ups 10 10
Total 10 10
Parent CompanyTax items recorded direct against equity
Deferred taxes relating to Group contribution,received/given -303 -42
Total -303 -42
NOTE 15 – OTHER INTANGIBLE FIXED ASSETS
Group Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of year 435 356 – –Purchases 3 – – –Acquisition of companies – 79 – –
Total 438 435 – –
Accumulated depreciation according to planAt beginning of year -177 -69 – –Acquisition of companies – -61 – –Depreciation for the year -36 -47 – –
Total -213 -177 – –
Accumulated write-downsAt beginning of year -81 – – –Write-down for the year – -81 – –
Total -81 -81 – –
Residual value according to plan carried forward 144 177 – –
NOTE 16 – GOODWILL
Group
2001 2000
Accumulated acquisition valueAt beginning of year 1,594 104Purchases 715 1,511Sales and disposals of
business operations -185 -22Translation differencies for the year 2 1
Total 2,126 1,594
Accumulated depreciation according to planAt beginning of year -152 -16Sales and disposals of business operations 33 –Depreciation for the year -126 -136
Total -245 -152
Accumulated write-downsAt beginning of year – –Depreciation for the year -47 –
Total -47 –
Residual value according to plan carried forward 1,834 1,442
NOTE 17 – LAND AND BUILDINGS
Group Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of year 4,360 1,740 1,181 1,128Purchases 80 732 38 59Acquisition of companies and
intra-Group acquisitions – 1,989 66 –Sales and disposals -284 -124 -12 -6Translation differences for the year 24 23 – –
Total 1) 4,180 4,360 1,273 1,181
Accumulated depreciationaccording to planAt beginning of year -1,651 -667 -560 -520Acquisition of companies and
intra-Group acquisitions – -899 -29 –Sales and disposals 100 46 11 3Depreciation for the year -132 -120 -48 -43Translation differences for the year -10 -11 – –
Total -1,693 -1,651 -626 -560
Accumulated net revaluationAt beginning of year 612 638 602 638Acquisition of companies – 10 – –Depreciation for the year on
written-up value -37 -36 -36 -36
Total 575 612 566 602
Residual value according to plancarried forward 3,062 3,321 1,213 1,223
Tax assessment value, buildings (Sweden) 1,357 1,126 467 437Tax assessment value, land (Sweden) 491 431 187 1841) Acquisition value includes capitalized interest of 11 11 – –
No property is possessed via financial lease contracts.
62
NOTE 18 – PLANT AND MACHINERY
Group Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of the year 3,658 2,220 1,078 1,068Purchases 227 230 68 63Acquisition of companies – 1,440 – –Sales and disposals -676 -229 -85 -54Re-classifications – 1 – 1Translation differences for the year 69 -4 – –
Total 3,278 3,658 1,061 1,078
Accumulated depreciations accordingto planAt beginning of the year -2,657 -1,527 -817 -775Acquisition of companies – -1,010 – –Sales and disposals 533 178 81 52Depreciation for the year -232 - 295 -86 - 94Translation differences for the year -42 -3 – –
Total -2,398 -2,657 -822 -817
Residual value according to plancarried forward 880 1,001 239 261
No assets are possessed via financial lease contracts.
NOTE 19 – EQUIPMENT, TOOLS, FIXTURES AND FITTINGS
Group Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of year 1,787 872 670 659Purchases 133 118 6 12Acquisition of companies – 1,072 – –Sales and disposals -466 -280 -7 -1Translation differences for the year -25 5 – –
Total 1,429 1,787 669 670
Accumulated depreciationaccording to planAt beginning of year -1,421 -674 -564 -541Acquisition of companies – -876 – –Sales and disposals 444 247 7 1Depreciation for the year -135 -122 -21 -24Translation differences for the year 13 4 – –
Total -1,099 -1,421 -578 -564
Residual value according toplan carried forward 330 366 91 106
No assets are possessed via financial lease contracts.
NOTE 20 – LEASE ASSETS
Group Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of year 10,857 10,671 – –Purchases 529 656 – –Acquisition of companies – 629 – –Sales and disposals -991 -1,515 – –Translation differences for the year 33 416 – –Total 10,428 10,857 – –
Note 20, cont.
Group Parent Company
2001 2000 2001 2000Accumulated depreciationaccording to planAt beginning of year -2,904 -2,435 – –Acquisition of companies – -19 – –Sales and disposals 545 124 – –Depreciation for the year -519 -535 – –Translation differences for the year 4 -39 – –
Total -2,874 -2,904 – –
Accumulated write-downsAt beginning of year -1,451 – – –Write-down for the year – -1,451 – –
Total -1,451 -1,451 – –
Residual value according toplan carried forward 6,103 6,502 – –
Assets possessed via finance lease contractsCalculated acquisition value of the assets 2,215 2,323Leasing fees paid during the fiscal year 335 348Contracted future leasing fees 1,479 1,862
NOTE 21 – CONSTRUCTION IN PROGRESS AND ADVANCEPAYMENTS FOR TANGIBLE FIXED ASSETS
Group Parent Company
2001 2000 2001 2000
At beginning of year 24 13 5 9Acquisition of companies – 14 – –Re-classifications -15 -27 – -5Accrued expenses during the year 92 24 22 1Sales and disposals -4 – – –
Total 97 24 27 5
NOTE 22 – PARTICIPATIONS IN GROUP COMPANIESParent Company
2001 2000
Accumulated acquisition valueAt beginning of year 8,408 3,377New issues/shareholders´ contribution 1,430 59Purchases 623 5,156Sales -844 -184
Total 9,617 8,408
Accumulated write-downsAt beginning of year -241 -131Write-downs for the year 0 -110
Total -241 -241
Book value at year-end 9,376 8,167
Specification of Parent Company´s participationsin Group companies
No. of Share BookSubsidiary / Corp. ID no. / Reg. Office shares in % value
AB Celsius Finance, 556284-6047, Stockholm 28,066,.038 100.0% 3
Applied Composites AB ACAB, 556326-2988, Linköping 10,000 100.0% 1
Celsius AB, 556194-4652, Eskilstuna 28,066,038 100.0% 5,050
AerotechTelub Holding AB, 556206-7131, Arboga 2,850 100.0%
Aerotech Telub AB, 556218-6790, Arboga 500,000 100.0%
Celsius Test Systems AB, 556251-3290, Stockholm 30,000 100.0%
Celsius Metech AB, 556080-0210, Arboga 60,000 100.0%
Celsius Metech Oy, 570.990, Finland 1,200 100.0%
Celsius Metech A/S, 252.561, Denmark 5,000 100.0%
Celsius Metech GmbH, HRB 5173, Germany – 100.0%
63
Note 22, cont.No. of Share Book
Subsidiary / Corp. ID no. / Reg. Office shares in % value
Telub Holding AB, 556153-9924,Växjö 9,152,108 100.0%AerotechTelub Contracting AB, 556246-0419, Arboga 5,000 100.0%
AerotechTelub Communications A/S, A/S 249345, Denmark – 100.0% –
AerotechTelub Information och Media AB, 556003-5312,Växjö 10,000 100.0% –
AerotechTelub Internservice AB, 556089-6721,Växjö 40,000 100.0%
Telub AB, 556273-3146,Växjö 100 100.0%
AB AmTech Inspection i Karlstad, 556440-5214, Linköping 1,000 100.0%
Bofors Carl Gustaf AB, 556210-8661, Karlskoga 500,000 100.0%
Celsius Automotive AB, 556393-6144, Järfälla 15,000 100.0%
Saab Aviocomp AB, 556347-9251, Linköping 163,000 100.0%
R.I.A.S. B.V., Netherlands 100 100.0%
Celsius Inc., USA 10 100.0%
Celsius Holding Florida Corp., USA 10 100.0%
Celsius Holdings Delaware Corp., USA 100 100.0% –
Aerothrust Corp., USA 100 100.0%
Celsius Invest AB, 556164-6588, Eskilstuna 1,720,000 100.0%
AB Götaverken, 556205-5615, Göteborg 3,000,000 100.0%
Götaverken Regalia AB, 556249-8583, Göteborg 500 100.0%
Götaverken Rig AB, 556292-3044, Göteborg 1,000 000 100.0%
ASJ Ltd, Cayman Island 100 100.0%
Celsius Materialteknik CMT AB, 556354-6349, Linköping 20,000 100.0%
Celsius Weapon Systems AB, 556258-2352, Eskilstuna 10,000 100.0%
Cromarty Ltd, Ireland 2 100.0% –
Servanda Insurance Co Ltd, Cayman Island 2,000,000 100.0%
Kockums Holdings AB, 556036-4100, Malmö 48,000 100.0% –
Kockums Engineering AB, 556277-1658, Malmö 2,000 100.0%
Alpha Thames Engineering Ltd, United Kingdom – 100.0%
Kockums Industrier AB, 556277-1674, Malmö 5,000 100.0%
Narvik Verkstedsindustri A/S, Norway 2,000 100.0%
Nexplo Industries AB, 556559-8801, Karlskoga 600 60.0% –
Nexplo Bofors AB, 556267-9372, Karlskoga 250,000 100.0% –
Saab Bofors Test Center AB, 556035-3558 Karlskoga 7,200 9.0%
NEXPLO Bofors Inc., USA 1,000 100.0%
Nexplo Vihtavuori Oy, Finland 160,000 100.0%
Saab Bofors AB, 556267-9455, Karlskoga 3,000,500 100.0%
Saab Bofors Industrier AB, 556016-3247, Karlskoga 4,156 100.0%
Wikers AB, 556014-2126, Karlskoga 5,900 100.0%
Bofors BEPAB AB, 556392-7325, Karlskoga 80,000 100.0% –
Saab Bofors Dynamics AB, 556264-6074, Karlskoga 500,000 100.0%
Saab Bofors Underwater Systems AB, 556439-6884, Motala 250,000 100.0%
Saab Bofors Support AB, 556016-3247, Karlskoga 176 66.0%
Bofors Personalbutiker AB, 556338-1564, Karlskoga 1,000 100.0%
Saab Bofors Test Center AB, 556035-3558, Karlskoga 48,400 61.0%
Saab Bofors Missile Corporation AB, 556147-5905, Karlskoga 5,000 100.0%
Saab Communication AB, 556181-4418, Stockholm 21,000 100.0%
Saab Microtech AB, 556241-6627, Göteborg 10,000 100.0%
Saab Pacific Pty Ltd, Australia 9 100.0%
Saab Pacific Development Pty Ltd, Australia 4,050,000 100.0%
Hawker Pacific Pty Ltd, Australia 10,000,000 75.0%
Hawker Pacific (Australia) Pty Ltd, Australia 10,500,001 100.0%
Australian Aerospace Pty Ltd, Australia 5,608,483 100.0%Hawker Pacific Asia Pte Ltd, Singapore 1,300,000 100.0%
Hawker Pacific (Malaysia) Sdn Bhd, Malaysia 200,000 100.0%
HPP Aviation Services Inc., Australia – 100.0%
Saab Systems Pty Ltd, Australia 1,512,002 100.0%
Saab Professional Pty Ltd, Australia – 100.0%
Saab ITS Pty Ltd, Australia 740,000 74.0% –
Bofors Australia Pty Ltd, Australia 2,000 100.0%
Saab Pacific Investment Holdings Pty Ltd, Australia 2 100.0%
Saab Facilities AB, 556244-5683, Järfälla 170,000 100.0% –
CelsiusTech New Zealand Ltd, New Zealand 360,100 100.0%
SaabTech Electronics AB, 556017-4848, Järfälla 150,600 100.0% –
Saltbadlödning i Järfälla AB, 556081-8113, Järfälla 2,000 100.0%
SaabTech International AB, 556267-8994, Eskilstuna 50,000 100.0%
SaabTech Norge A/S, Norway 50 100.0%
SaabTech Canada Ltd, Canada 25,765 100.0%
SaabTech Deutschland GmbH, Germany – 100.0%
SaabTech Finland Oy, Finland 50 100.0%
Note 22, cont.No. of Share Book
Subsidiary / Corp. ID no. / Reg. Office shares in % value
Bofors (UK) Ltd, United Kingdom 10,000 100.0%
Celsius Japan K K., Japan 48,000 100.0%
SaabTech Danmark A/S, Denmark – 100.0%
SaabTech SE Asia Pte Ltd, Singapore – 100.0%
SaabTech Systems AB, 556363-6785, Järfälla 2,051,230 100.0%
CelsiusTech Naval Systems AB, 556207-5753, Järfälla 1,000 100.0%
Celsius Tech Systems (M) SDN BHD, Malaysia 100,000 100.0%
SaabTech Vetronics AB, 556169-8431, Järfälla 200,000 100.0%
Sanguistech AB, 556090-7213, Karlskoga 20,000 100.0%
YDAB i Härnösand AB, 556295-6390, Härnösand 88,000 100.0%
Combitech Systems AB, 556258-8862, Jönköping 3,250 65.0% 2
CSM Materialteknik AB, 556517-3951, Linköping 40,000 100.0% 5
FFV Ordonance AB, 556414-8194, Eskilstuna 100,000 100.0% 25
Götaverken Netherlands B.V., Netherlands 40 100.0% 458
Industrigruppen JAS AB, 556147-5921, Stockholm 3,000 60.0%
Saab International Ltd., USA 1,000 100.0% 1
Kockums UK (Holdings) Ltd, Ireland 10,000 100.0% 341
Redstone Management Ltd, Jersey 11,000 100.0%
Scaraden Investement Ltd, Jersey 11,000 100.0%
Lansen Försäkrings AB, 516401-8656, Linköping 100,000 100.0% 30
Saab Aircraft AB, 556062-7647, Linköping 100,000 100.0% 10
Saab Aircraft Leasing Holding AB, 556124-3170, Stockholm 30,000 100.0% 2,203
Saab-Scania Rental AB, 556056-9807, Stockholm 1,000 100.0%
Fairbrook Inc., USA 100 100,0%
Fairbrook Leasing Inc., USA 100 100.0%
Lambert Leasing Inc., USA 100 100.0%
Saab Aircraft Leasing Inc., USA 100 100.0%
2000 Aircraft Credit AB, 556464-6031, Stockholm 787,000 80.0%
SF340 Leasing AB, 556258-8847, Stockholm 1,000 100.0%
Swedish Aircraft Two KB, – 50.3%
Swedish Aircraft Three KB, – 100.0%
Aero Three AB, 556258-8920, Stockholm 1,000 100.0%
Swedish Aircraft Four KB, – 50.3%
Swedish Aircraft Holdings AB, 556124-3170, Stockholm 1,000 100.0%
Saab Air AB, 556061-1732, Linköping 25,000 100.0% 14
Saab Avionics AB, 556460-1655, Stockholm 1,000 100.0% 237
EMC Service Elteknik AB, 556315-6636, Göteborg 400 100.0%
Saab Barracuda AB, 556045-7391, Gamleby 200,000 100.0% 70
Barracuda Camoflage (P) Ltd, India 81,400 74.0%
Barracuda Technologies Pty, Australia 75,000 100.0%
Barracuda Technologies S.A., France 4,996 99.9%
Barracuda Canada Inc, Canada 100 100.0%
Saab Combitech AB, 556108-8799, Jönköping 500,000 100.0% 60
Saab Dynamics AB, 556055-9691, Linköping 1,000,000 100.0% 167
Saab Ericsson Space AB, 556134-2204, Göteborg 90,000 60.0% 71
Saab Ericsson Space Fastighets AB, 556230-7404, Göteborg 1,000 100.0%
Saab Ericsson Space Inc., USA 100 100.0%
Saab Ericsson Space Netherlands B.V, Netherlands 180 100.0%
Austrian Aerospace GmbH, Austria – 100.0%
Saab Hangaren Förvaltning AB, 556031-8759, Linköping 20,000 100.0% 2
Saab Holding B.V., Netherlands 180 100.0% 216
Saab Holdings U.S. Inc., USA 1,000 100.0% 168
Saab Aircraft of America Inc., USA 1,001,000 100.0%
Saab International AB, 556378-6275, Linköping 2,000 100.0%
Saab International AB (Chile) Ltda, Chile – 100.0%SANIP (Pty) Ltd, South Africa 200,000 100.0%
Saab Aerospace Marketing Services GmbH, Austria 100,000 100.0%
Saab Military Aircraft Ltd., United Kingdom 100 100.0%
Saab Aircraft International Ltd, United Kingdom 100.0%
Saab Training Systems AB, 556030-2746, Huskvarna 150,000 100.0% 42
Saab Training Systems GmbH, Germany 4,000 100.0%
Saab Training Systems UK Ltd, United Kingdom 100,000 100.0%
Saab Training Inc., USA 200 100.0%
Saab Training Systems Canada Ltd, Canada 300,000 100.0%
Saab-Scania Combitech AB, 556036-0207, Linköping 1,100,000 100.0% 120
Saab Nyge Aero AB, 556043-5413, Nyköping 5,000 100.0%
Norsk Flygtjenste A/S, Norway 1 100.0%
Saab TransponderTech AB, 556535-9790, Linköping 1,000 100.0% 13
64
Note 22, cont.No. of Share Book
Subsidiary / Corp. ID no. / Reg. Office shares in % value
Saab Xperientia AB, 556147-5855, Jönköping 56,450 64.7% 30
Saab Treasury AB, 556147-5939, Linköping 30,000 100.0% 3
Shipknow AG, Switzerland 240 100.0%
Götaverken International N.V., Curacao – 100.0%
Bounty Corp., Liberia 10 100.0%
Dormant companies, real estate companies etc. 34
Book value at year-end 9,376
NOTE 23 – RECEIVABLES FROM GROUP COMPANIES
Group Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of year – – 24 1,019Additional receivables – – 513 24Cleared receivables – – -19 -1,019
Book value at year-end – – 518 24
NOTE 24 – RECEIVABLES FROM ASSOCIATED COMPANIES
Group Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of year – – – –Additional receivables 50 – 33 –
Book value at year-end 50 – 33 –
NOTE 25 – PARTICIPATIONS IN ASSOCIATED COMPANIES
Group Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of year 779 12 3 5Purchases 37 855 – –Divestments -633 -105 – -2Re-classification 23 -13 – –Translation differences for the year 13 10 – –Net income of the year 22 20 – –
Book value at year-end 241 779 3 3
Specification of the Group´s participations in associated companiesAdjusted equity/
Share Net income BookAssociated company/Corp. ID no./Reg. Office in %1) of the year2) value
Industrikompetens i Östergötland AB,556060-5478, Linköping 33.0 4/0 4
Aero Systems Engineering Inc. (ASE), USA 29.0 12/0 12A2 Acoustics, 556052-5601 40.0 1/0 1Fortum Service Industripartner AB, 556422-3419 40.0 5/1 5Booforsen Fastighetsaktiebolag, 556381-0539 40.0 12/1 12Grintron (Pty) Ltd, South Africa 49.0 78/8 78Autoliv Celsius AB, 556561-0788, Stockholm 50.0 0/0 0Nammo A/S Norway 27.5 129/12 129
Book value at year-end 2411) Share in % relates to equity.This is equal to the share of the votes of the total number of shares.2) Adjusted equity relates to the owned share of the company´s equity, including equity in untaxed
reserves. Net income of the year relates to the owned proportion of the company´s income aftertax, including the portion of equity in the year´s change in untaxed reserves.
NOTE 26 – OTHER SECURITIES HELD AS FIXED ASSETSGroup Parent Company
2001 2000 2001 2000
Accumulated acquisition valueAt beginning of year 171 1,315 47 1,298Purchases 76 354 30 20Divestments -6 -38 – -4Write-downs -5 -193 – –Re-classifications -11 -1,267 – -1,267
Book value at year-end 225 171 77 47
Specification of the Group´s other securities held as fixed assets
Number Share BookCompany of shares in % value
Aerosonde Holdings Pty Ltd, Australia 20,000,000 19.0 22Arbustum AB 15,000 6.9 6Ariane Space Participation, France 1,621,745 0.8 13Aviation Financial Services AG, Switzerland 100 20.0 –b-business partners B.V., Netherlands 100,000 – 33Crossair Ltd Co, Switzerland 6 – –Fusion Lighting Inc, USA 625,000 7.5 –Ericsson Saab Surveillance AB 500 50.0 –EMC Väst AB 25 2.1 8Micro Z Sweden AB 110 9.9 –Gesällschaft für Weltraumfragen GmbH, Austria 0 6.8 –IG Försvarslogistik AB 400 33.0 –Industriellt Utvecklingscentrum i Skåne AB 750 26.8 –Angra AB 260 26.0 –IUC Karlskogs AB, Karlskoga 100 0.17 –Intospace GmbH, Germany 0 1.0 –Kitron ASA, Norway 3,716,032 6.2 36Länsteknikcentrum AB 300 1.8 –Natech Production A/S, Norway 50,300 16.6 –Raufoss Ammunisjionsfabrikker A/S, Norway 1,125,000 15.0 56Saab Smaaland Project Venture AB, 33 % 330 33.0 –Global Geo Services AS, Norway 795,486 2.8 23Societe Ariane Space, France 3 862 0.8 –SN Technologies SA, Geneva, Switzerland 100 – 1Taurus Systems GmbH, Germany 1 33.0 4WAH Nobel, Ltd, Pakistan 122,515 27.0 8Tenant-owners rights – – 10Other – – 5
Book value at year-end 225
65
NOTE 27 – DEFERRED TAX RECEIVABLES, NET
Deferred tax receivables relate to the tax result rising from the assump-tion that assets and liabilities are disposed of at book residual values.Temporary differences of the Group have resulted in receivables and lia-bilites relating to the following assets.
Deferred Deferredtax recei- tax liabi-
Group 2001 vables lities Net
Land and buildings – -267 -267Machinery and equipment 46 -1,458 -1,412Financial fixed assets 5 – 5Inventories 7 – 7Accounts receivable 4 – 4Provisions for pensions 73 – 73Other provisions 1,589 -428 1,161Tax allocation reserve – -117 -117Other 221 -125 96Tax loss carry-forward 1,971 – 1,971
3,916 -2,395 1,521Offset -2,395 2,395 –
Deferred tax receivables, net 1,521 – 1,521
Deferred Deferredtax recei- tax liabi-
Group 2000 vables lities Net
Land and buildings – -285 -285Machinery and equipment 175 -1,293 -1,118Financial fixed assets 587 – 587Inventories 3 – 3Provisions for pensions 63 – 63Other provisions 1,486 – 1,486Tax allocation reserve – -106 -106Other 68 -143 -75Tax loss carry-forward 885 – 885
3,267 -1,827 1,440Offset -1,827 1,827 –
Deferred tax receivables, net 1,440 – 1,440
Deferred Deferredtax recei- tax liabi-
Parent Company 2001 vables lities Net
Land and buildings – -156 -156Provisions for pensions 49 – 49Other provisions 648 – 648Tax loss carry-forward 812 – 812
1,509 -156 1,353Offset -156 156 –
Deferred tax receivables, net 1,353 – 1,353
Deferred Deferredtax recei- tax liabi-
Parent Company 2000 vables lities Net
Land and buildings – -165 -165Financial fixed assets 625 – 625Provisions for pensions 55 – 55Other provisions 628 – 628
1,308 -165 1,143Offset -165 165 –
Deferred tax receivables, net 1,143 – 1,143
Differences between the years are accounted for as deferred tax expensesor deferred tax income, except amounts recorded directly towardsshareholders’ equity. Other changes relate to deferred taxes as an effectof acquisition and divestment of companies.
Deferred tax liabilities within the Group amount to SEK 2,395 m. (1,827)of which SEK 1,569 m. (1,413) refers to untaxed reserves in the form ofaccumulated depreciation in excess of plan and SEK 156 m. (165) torevaluation of property.
Deferred tax liabilities within the Parent Company, SEK 156 m. (165)refer to revaluation of property.
NOTE 28 – OTHER LONG-TERM RECEIVABLESGroup Parent Company
2001 2000 2001 2000
Interest-bearingAt beginning of year 1,345 – 424 –Additional receivables 445 1,345 – 424Deductible receivables -544 – -413
Book value at year-end 1,246 1,345 11 424
The interest-bearing receivables relate to an instalment receivable ofSEK 537 m., corresponding to the present value of future leasepayments for the oil-rig Petrobras XXIII. The residual consists mainlyof receivables for disposals of assets.
Interest freeAt beginning of year 976 752 – –Additional receivables – 224 – –Deductible receivables -50 – – –
Book value at year-end 926 976 – –
The interest free receivables relate mainly to depositions attributable toSaab Aircraft Leasing.
NOTE 29 – PREPAID EXPENSES AND ACCRUED INCOME
Prepaid expenses and accrued income of the Group amounted to SEK1,156 m. (985) and to SEK 268 m. (199) for the Parent Company. Prepaidexpenses totalled SEK 197 m. (227) for the Group and SEK 568 m. (382)referred to accrued income according to the “percentage of completion”-method. SEK 101 m. (90) is attributed to leasing fees for Saab AircraftLeasing.
NOTE 30 – SHORT-TERM INVESTMENTS
Group Parent Company
2001 2000 2001 2000
Interest-bearing securities 3,143 3,121 3,143 3,082
Other 914 – 729 –
Total 4,057 3,121 3,872 3,082
The market value on interest-bearing securities amounted to SEK 3,143 m.(3,128) in the Group and to SEK 3,143 m. (3,089) in the Parent Company.
Financial investments are made in Swedish Government bonds, housingbonds and commercial papers. The investment policy means that thefixed interest term must be 0–27 months to avoid excessive fluctuationsas a result of interest changes. At year-end, the average interest terms was22 months (8).
NOTE 31 – EQUITYThe shares in the Parent Company are divided into two series, class Aand class B. Both classes of shares carry equal rights, with the exceptionthat each class A share is entitled to ten votes and each share of class B isentitled to one vote. Each share carry a nominal value of SEK 16.
Number of shares as per December 31, 2001:
Number Number of Number ofof shares shares in % votes in %
Shares class A 6,454,303 6 39Shares class B 100,005,372 94 61
106,459,675 100 100
During 1998, the Parent Company issued a convertible debenture loanwith a nominal value of SEK 254 m. The conversion price is set to SEK91 and conversion to shares of class B is possible from December 4, 2001 to July 15, 2004. After full conversion the number of class B shares willincrease by 2,787,500 and the capital stock will increase by SEK 45 m.
66
67
Note 31, cont.
Equity in the Group has changed as follows during the year:
Profit or Net incomeCapital Restricted loss carried for the
stock reserves forward year Total
At beginning of year 1,703 1,684 2,283 5,670Dividend to shareholders -319 -319Allocation to statutory
reserve – – –Utilization of premium
reserve -3 3 –Allocation to equity method
reserve 1 -1 –Shifting between restricted
and unrestricted equity -42 42 –Translation differences for
the year etc. 39 162 201Net income for the year 1,127 1,127
Total at year-end 1,703 1,679 2,170 1,127 6,679
Specification of restricted reserves:Re- Equity Transla-
Share Equity valua- share of tion-premium method tion- Legal untaxed differences
reserve reserve reserve reserve reserves etc. Total
At beginning of year 10 2 500 357 633 182 1,684Allocation to statutory
reserve – –Utilization of
premium reserve -3 -3Allocation to equity
method reserve 1 1Change in equity in
untaxed reserves -42 -42Change in
statutory reserve – –Translation differences for
the year etc. 39 39
Total at year-end 7 3 500 357 591 221 1,679
Equity in the Parent Company has changed as follows during the year:
Capital Restricted Profit or Loss Net incomestock reserves brought forward for year Total
At beginning of year 1,703 851 2,725 5,279Dividend to shareholders -319 -319Allocation to statutory reserve – – –Utilization of premium reserve -3 3 –Group contribution
given to subsidiariesnet after taxes -779 -779
Net income for the year 1,243 1,243
Total at year-end 1,703 848 1,630 1,243 5,424
NOTE 32 – UNTAXED RESERVESGroup Parent Company
2001 2000 2001 2000
Accumulated excess depreciationLand and buildings 395 430 284 288Machinery and equipment 500 394 160 163Lease assets 2,175 1,998 – –
Tax allocation ReservesAllocated 1995 – 11 – –Allocated 1996 14 14 – –Allocated 1997 17 17 – –Allocated 1998 86 83 56 56Allocated 1999 76 76 39 39Allocated 2000 169 179 139 139Allocated 2001 57 – – –
Contingency reserve 15 16 – –Foreign untaxed reserves 1 1 – –
Total 3,505 3,219 678 685
NOTE 33 – PROVISIONS FOR PENSIONS ANDSIMILAR COMMITMENTS
Provisions for pensions in the balance sheet correspond to the equivalentpension obligations actuarially computed.
Group Parent Company
2001 2000 2001 2000
Provision for pensionsFPG/PRI pensions 3,110 2,890 1,498 1,438Other pensions 468 201 88 90Other pension liabilities 100 436 90 104
Total 3,678 3,527 1,676 1,632
Of which with credit guarantees FPG/PRI 3.148 2,924 1.536 1,472
Assets pledged for this liability amounted to SEK 815 m. (855). See note 41.The Pensions Registration Institute (PRI) is a public organization respons-ible for the administration of employee pensions. Other pension liabilitiesrelate to conditional commitments not covered by social security legislation.
NOTE 34 – OTHER PROVISIONS
Group Parent Company
2001 2000 2001 2000
Costs of restructuring
Regional Aircraft 1,567 1,537 1,567 1,537Other provisions for restructuring and
project losses 573 1,068 27 –Reserves for anticipated deficit in
future leasing operations 618 1,008 – –Other 225 208 – 1
Total 2,983 3,821 1,594 1,538
NOTE 35 – LONG-TERM LIABILITIES TO CREDIT INSTITUTIONS
Group Parent Company
2001 2000 2001 2000
Due date 1–5 year from closing day 662 798 103 18Due date more than 5 years
from closing day 97 198 31 39
Total 759 996 134 57
NOTE 36 – CONVERTIBLE DEBENTURE LOAN
During 1998, the Parent Company issued a convertible debenture loanwith a nominal value of SEK 254 m. Of the total loan, debenturesamounting to SEK 231 m. were sold to employees while SEK 23 m. weresold to the wholly owned subsidiary Saab Hangaren Förvaltning AB.This is to enable sale of convertible debentures at current market valueto new employees. The convertible debenture loan, which bears a fixedannual interest rate equal to STIBOR less 0.45 per cent, will be possibleto convert to Saab shares of class B from December 4, 2001 to July 15,2004 at a conversion price set to SEK 91. Since August 2001 the conver-tible debentures are listed at the Sockholm Stock Exchange. The loanwill fall due on July 30, 2004 if not converted. A capital discountamounting to SEK 7 m. (10) has been calculated compared to a fixedmarket rate of 5 per cent (5,5). The capital discount has in the financialstatements of both the Group and the Parent Company been accountedfor as restricted reserves, share premium reserve. The capital discount isexpensed as interest during the term of the loan.
68
Note 36, cont.Group Parent Company
2001 2000 2001 2000
Convertible debenture loan 254 254 254 254Capital discount -7 -10 -7 -10Holdings within the Group -15 -16 – –
Total 232 228 247 244
NOTE 37 – OTHER LONG-TERM LIABILITIES
Group Parent Company
2001 2000 2001 2000
Lease obligations 2,829 3,637 – –Other long-term liabilities 547 568 – –
Total 3,376 4,205 – –
Liabilities with due date more than 5 years from closing day amount toSEK 519 m. (1,774). Security provided for leasing commitmentsamounted to SEK 2,071 m. (2,025) and for other liabilities SEK 204 m.(774). See note 41. Other liabilities consist mainly of prepaid leasing fees.
NOTE 38 – SHORT-TERM LIABILITIES TO CREDIT INSTITUTIONS
Group Parent Company
2001 2000 2001 2000
Approved credit limit 712 783 712 633Unutilized portion -712 -676 -712 -633
Utilized portion – 107 – –Short-term borrowing 780 860 23 35
Total 780 967 23 35
NOTE 39 – OTHER LIABILITIES
Group Parent Company
2001 2000 2001 2000
Value added tax (VAT) 388 197 162 31Personnel liabilities 163 162 44 45Depositions regarding
leasing operations 99 138 – –Other 116 77 25 2
Total 766 574 231 78
NOTE 40 – ACCRUED EXPENSES AND DEFERRED INCOME
Group Parent Company
2001 2000 2001 2000
Accrued expensesCost of customer commitments
in Regional Aircraft 971 1,021 971 1,021Reserve for remaining
costs in military business 183 302 122 107Vacation pay liability 609 581 186 169Social security expenses 324 372 113 151Claims reserve 52 49 – –Expected invoices 188 222 68 50Personnel liabilities 151 193 42 31Earlier redundancy 54 198 27 163Accrued interests 157 167 151 134Guarantee reserve 91 36 7 6Accrued leasing costs 278 217 – –Accrued currency differences 102 102 – –Other 503 420 35 21
Deferred incomeLeasing fees 191 51 7 –Advance invoicing 639 800 486 520
Total 4,493 4,731 2,215 2,373
NOTE 41 – ASSETS PLEDGED
Group Parent Company
2001 2000 2001 2000
Guarantees provided for own liabilitiesand provisionsfor pensions commitments
Real estate mortgages 388 419 388 388Chattel mortgages 427 436 350 350
to credit institutionsOther assets 527 676 – –
for lease obligationsLease assets 2,071 2,025 – –
for other long-term liabilitiesLong-term receivables 203 774 – –Bank deposits 35 115 – 30
for accrued expensesAccrued income 59 59 – –
for advance payments from customersChattel mortgages 1,751 1,751 1,751 1,751Bonds and other securities 941 2,570 941 2,570
Total 6,402 8,825 3,430 5,089
NOTE 42 – AUDITORS’ FEES
Group Parent Company
2001 2000 2001 2000
Ernst & YoungAudit assignments 9 11 3 3Other assignments 2 3 1 1
KPMGAudit assignments 2 2 – –Other assignments – 2 – 2
Price WaterhouseCoopersAudit assignments 2 4 – –Other assignments 6 8 1 1
Total 21 30 5 7
Audit assignments 13 17 3 3
Other assignments 8 13 2 4
We have audited the annual accounts, the consolidated accounts,the accounting records and the administration of the board of directors and the managing director of Saab AB for the year 2001.These accounts and the administration of the company are theresponsibility of the board of directors and the managing director.Our responsibility is to express an opinion on the annual accounts,the consolidated accounts and the administration based on ouraudit.
We conducted our audit in accordance with generallyaccepted auditing standards in Sweden. Those standards requirethat we plan and perform the audit to obtain reasonable assurancethat the annual accounts and the consolidated accounts are free ofmaterial misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the accounts.An audit also includes assessing the accounting principles used and their application by the board of directors and the managingdirector, as well as evaluating the overall presentation of informationin the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examinedsignificant decisions, actions taken and circumstances of the company
in order to be able to determine the liability, if any, to the company of any board member or the managing director. We also examinedwhether any board member or the managing director has in any other way acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believethat our audit provides a reasonable basis for our opinion set out below.
The annual accounts and the consolidated accounts have been prepared in accordance with the Annual Accounts Act and, thereby,give a true and fair view of the financial position of the company’sand the group’s financial position and of the results of operations inaccordance with generally accepted accounting principles in Sweden.
We recommend to the general meeting of the shareholders thatthe income statements and the balance sheets of the parent company and the group be adopted, that the profit for the parent company be dealt with in accordance with the proposal in the administration report and that the members of the board of directors and the managing director be discharged from liability for the financial year.
Auditors’ Report
Linköping, February 15, 2002
Björn Fernström Caj Nackstad
Authorised Public Accountant Authorised Public AccountantErnst & Young AB KPMG Bohlins AB
To the general meeting of the shareholders of Saab AB Corporate Identity No 556036-0793
69
Linköping, February 15, 2002
Anders ScharpChairman
Marcus Wallenberg Erik Belfrage Peter Nygårds Anthony Rice
George Rose Michael Rouse Björn Svedberg
Ragnar Ludvigsson Lars Höök Claes Trolle
Bengt HalseManaging director
70
Claes TrolleBoard member since 2001,born 1940.Representative of the Swedish Association of Graduate Engineers,SaabTech Systems AB, Järfälla.Shares in Saab: –Convertibles in Saab: –
Anders ScharpChairman since 1990,born 1934.Chairman of Atlas Copco AB,AB SKF and AB Nederman.Board member of Investor AB.Shares in Saab: 31,000 Convertibles in Saab: –
Marcus WallenbergDeputy Chairman since 1993 and Board member since 1992,born 1956.Deputy Chairman of Telefonaktie-bolaget LM Ericsson. Board memberof AstraZeneca Plc,AstraZeneca AB,Investor AB, Scania AB, Stora EnsoOyj and the Knut and Alice Wallen-berg Foundation.Shares in Saab: 67,977Convertibles in Saab: – Erik Belfrage
Board member since 1991,born 1946.Director of SEB, Skandinaviska Enskilda Banken. Chairman of theSwedish Institute of InternationalAffairs (UI) and Sigtuna Skolstiftelse.Board member of the InternationalCouncil of Swedish Industry (NIR)and the Centre for European PolicyStudies (CEPS). Member of the Tri-lateral Commission.Shares in Saab: 100Convertibles in Saab: –
Peter NygårdsBoard member since 2000,born 1950.President of SKB (Swedish NuclearFuel and Waste Management Co.).Chairman of Unicom Care Inter-national AB. Board member of theSwedish Environmental ResearchInstitute.Shares in Saab: 1,000Convertibles in Saab: –
Michael (Mike) P RouseBoard member since 2000,born 1948.Group Marketing Director of BAE SYSTEMS.Shares in Saab: –Convertibles in Saab: –
Björn SvedbergBoard member since 1998,born 1937.Board member of, among others,Gambro and Investor AB.Shares in Saab: 1,100 Convertibles in Saab: –
Bengt HalsePresident, CEO and Board member since 1995,born 1943.Board member of Chalmers University of Technology, AU-System AB and Optillion AB.Shares in Saab: 15,000Convertibles in Saab: SEK 182,000Options in Saab: SEK 370,000
Board of Directors and Auditors
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Anthony (Tony) RiceBoard member since 1998,born 1952.Group Managing Director,Ventures of BAE SYSTEMS. Non Executive Director of Telewest Plc.Shares in Saab: –Convertibles in Saab: –
George RoseBoard member since 1998,born 1952.Finance Director of BAE SYSTEMS
and Non Executive Director ofLattice Group Plc.Shares in Saab: –Convertibles in Saab: –
Ragnar LudvigssonBoard member since 1995,born 1946.Chairman of the Engineering Workers’ Union local at Saab AB, Linköping.Shares in Saab: 60Convertibles in Saab: SEK 119,574
Deputy Board members
Auditors
Deputy Auditors
Rolf EnquistDeputy since 2000, born 1943.Chairman of the EngineeringWorkers’ Union (SEKO) local atAerotechTelub AB, Linköping.Shares in Saab: –Convertibles in Saab: –
Conny HolmDeputy since 1995, born 1947.Chairman of the EngineeringWorkers’ Union local at the Saabunits in Jönköping.Shares in Saab: 100Convertibles in Saab: SEK 91,000
Johan LöflingDeputy since 2001, born 1962.Deputy Chairman of the IndustrialSalaried Employees’ Associationlocal at Saab AB, Linköping.Shares in Saab: –Convertibles in Saab: SEK 45,500
Gunnar WidhagenAuditor since 1993, born 1938.Authorised Public AccountantErnst & Young AB
Caj NackstadAuditor since 1991, born 1945.Authorised Public AccountantKPMG Bohlins AB
Björn FernströmAuditor since 1993, born 1950.Authorised Public AccountantErnst & Young AB
Bo RibersAuditor since 1993, born 1942.Authorised Public AccountantKPMG Bohlins AB
Lars HöökBoard member since 2001 and deputy since 2000,born 1944.Representative of the Industrial Salaried Employees’ Association,AerotechTelub AB,Arboga.Shares in Saab: 400Convertibles in Saab: –
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Corporate Executive Committee
Bengt HalsePresident and CEO,born 1943. Employed 1995.Shares in Saab: 15,000 Convertibles in Saab: SEK 182,000Options in Saab: 370,000
Göran SjöblomExecutive Vice President,born 1943. Employed 1995.Shares in Saab: 17,500 Convertibles in Saab: SEK 182,000
Ingemar AnderssonGroup Senior Vice President,born 1951. Employed 1982.Shares in Saab: 3,000Convertibles in Saab: –
Dave HewitsonGroup Senior Vice President,born 1948. Employed 1999.Shares in Saab: –Convertibles in Saab: –
Jan NygrenGroup Senior Vice President,born 1950. Employed 2000.Shares in Saab: –Convertibles in Saab: –
From left: Dave Hewitson, Jan Nygren, Bengt Halse, Göran Sjöblom and Ingemar Andersson.
Peter SandehedSenior Vice President,Treasury, born 1952.Employed 1981.Shares in Saab: - Convertibles in Saab:SEK 182,000
Per ErlandssonSenior Vice President,Legal. Secretary to theBoard of Directors, born1947. Employed 1980.Shares in Saab: 3,125Convertibles in Saab:SEK 182,000
Lars WahlundSenior Vice President,Financial Control, born1953. Employed 1983.Shares in Saab: 100 Convertibles in Saab:SEK 182,000
Mats LindmanSenior Vice President,Human Resources, born1945. Employed 1986.Shares in Saab: 250 Convertibles in Saab:SEK 182,000
Jan NygrenGroup Senior Vice President, Communi-cation, born 1950.Employed 2000.Shares in Saab: – Convertibles in Saab: –
Per Ove MorbergGroup Senior Vice President, born 1942.Employed 1971.Shares in Saab: – Convertibles in Saab: –
Gert SchyborgerGroup Senior Vice President, born 1940.Employed 1997.Shares in Saab: 1,250 Convertibles in Saab: –
Corporate functions
Heads of business areas
Dan JangbladSenior Vice President,Saab Systems and Electronics,born 1958. Employed 2000.Shares in Saab: –Convertibles in Saab: –
Åke SvenssonSenior Vice President,Saab Aerospace,born 1952. Employed 1976.Shares in Saab: 145Convertibles in Saab: SEK 182,000
Jan EibornSenior Vice President, Saab Technical Support and Services,born 1944. Employed 1984.Shares in Saab: –Convertibles in Saab: –
Ingemar AnderssonGroup Senior Vice President,Saab Bofors Dynamics,born 1951. Employed 1982.Shares in Saab: 3,000Convertibles in Saab: –
Bengt MörtbergSenior Vice President,Saab Ericsson Space,born 1951. Employed 1996.Shares in Saab: –Convertibles in Saab: SEK 182,000
Rolf ErikssonSenior Vice President,Saab Aviation Services,born 1947. Employed 1969.Shares in Saab: – Convertibles in Saab: SEK 182,000
Group Management
FINANCIAL INFORMATIONThe following financial information will be released in the financial year 2002:
April 24 Interim report January-March July 11 Interim report January-June October 16 Interim report January-September February 14, 2003 Full-year report 2002
Financial information can be ordered from:Petra Svensson, telephone +46-13-18 70 70www.saab.se
CONTACTSJan Nygren, Group Senior Vice President, CommunicationTelephone +46-13-18 19 99, e-mail [email protected]
Agneta Kammeby, Investor Relations Telephone +46-13-18 71 25,e-mail [email protected]
ANNUAL GENERAL MEETINGThe Annual General Meeting will be held at 6:00 p.m. on Monday,April 8, 2002 at Saab in Linköping.
NOTIFICATIONShareholders must notify the company of their intention to par-ticipate in the meeting not later than 12:00 noon on Wednesday,April 3, 2002:by telephone: +46-13-18 20 55 by fax: +46-13-18 33 50 by mail with separate invitation by mail: Saab AB,Avd CJ-MG, SE-581 88 Linköping, Swedenonline: www.saab.se (follow the instructions on the home page)
Please indicate your name, personal or corporate registrationnumber (Swedish citizens or companies), address and telephonenumber. If you are attending by power of proxy, registration cer-tificate or other authorisation, please submit your documentationwell in advance of the meeting.
Shareholders or their proxies may be accompanied at the Annual General Meeting by a maximum of two people.They mayonly attend, however, if the shareholder has notified Saab AB asindicated above.
RIGHT TO PARTICIPATEOnly shareholders recorded in the share register maintained byVPC AB (the Swedish Securities Register Centre) on Thursday,March 28, 2002 are entitled to participate in the meeting.
Shareholders registered in the names of nominees throughthe trust department of a bank or a brokerage firm must tempo-rarily re-register their shares in their own names to participate inthe meeting. For this re-registration to be recorded in the shareregister by March 28, 2002, nominees must be notified severalbusiness days in advance.
DIVIDENDThe Board of Directors is recommending a dividend of SEK 3.25per share and Thursday, April 11, 2002 as the record day for thedividend.With this record day,VPC is expected to distribute thedividend on Tuesday, April 16, 2002.
Head Office:Saab ABBox 70 363SE-107 24 Stockholm, SwedenTel: +46-8-463 00 00Fax: +46-8-463 01 [email protected]
Corporate functions:
Saab ABSE-581 88 Linköping, SwedenTel: +46-13-18 00 00Fax: +46-13-18 00 [email protected]
Business areas:Saab Systems and ElectronicsSE-175 88 Järfälla, SwedenTel: +46-8-580 840 00Fax: +46-8-580 322 [email protected]
Saab AerospaceSE-581 88 Linköping, SwedenTel: +46-13-18 00 00Fax: +46-13-18 24 [email protected]
Saab Technical Support and ServicesSE-732 81 Arboga, SwedenTel: +46-589-800 00Fax: +46-589-61 16 [email protected]
Saab Bofors DynamicsSE-691 80 Karlskoga, SwedenTel: +46-586-810 00Fax: +46-586-857 [email protected]
Saab Ericsson SpaceSE-405 15 Gothenburg, SwedenTel: +46-31-735 00 00Fax: +46-31-735 40 00
Saab Aviation ServicesSE-581 88 Linköping, SwedenTel: +46-13-18 20 00Fax: +46-13-18 44 [email protected]
SAAB ANNUAL REPORT 2001
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