Interim report Q1 2016 - Saab ABINTERIM REPORT Q1 2016 Håkan Buskhe, President and CEO Magnus Örnberg, EVP and CFO This document and the information contained herein is the property

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Investor Relations | Q1 2016 | Issue 1

21 April 2016

INTERIM REPORTQ1 2016

Håkan Buskhe, President and CEOMagnus Örnberg, EVP and CFO

This document and the information contained herein is the property of Saab AB

and must not be used, disclosed or altered without Saab AB prior written consent.



GLOBAL DEFENCE MATERIEL MARKET

North America 39%

South America 2%

Europe 22%

Africa 2%

-1%

1.4%

3.0%8%

X%

X%

Share of global defence

procurement market, 2017-2021

(constant USD)

Compound annual growth rate,

2016-2020 (constant USD)

Source: IHS Group, February 2016

1)Defence market not approached by Saab2)Excl. China3)Excl. Russia

2

Asia 37%5.1%

Saab sales

2015: 9%

Saab sales

2015: 6%

Saab sales

2015: 60%

Saab sales

2015: 2%

Saab sales

2015: 23%



HIGHLIGHTS, Q1 2016

• Sales growth in all business areas

• Dynamics secured large order; strong sales growth

• Large projects major driving factors for sales growth

PROFITABLE GROWTH

• Improved EBIT margin and very strong cash flow

• Early stage of large projects impact earnings

• Margin improvements in Dynamics and IPS

• Continued investments in T-X, radars and sensors

PERFORMANCE

• GlobalEye* introduced to the market

• Saab ranked #6 most popular employer amongengineering students in Sweden

PORTFOLIO & PEOPLE

3

*Saabs new generation Airborne Early Warning & Control System



FINANCIAL HIGHLIGHTS, Q1 2016

4

4 800 4 614

Q1 2015 Q1 2016

MS

EK

Order bookings

5 389

6 790

Q1 2015 Q1 2016

MS

EK

Sales

210

294

Q1 2015 Q1 2016

MS

EK

Operating income

-941

2 955

Q1 2015 Q1 2016

MS

EK

Free cash flow

26%

4.3%3.9%

EBIT

margin



OPERATING INCOME AND CASH FLOW

-1 500

-1 000

-500

0

500

1 000

1 500

2 000

2 500

3 000

3 500

2012 2013 2014 2015 2016, Q1

MS

EK

Operating income Operational cash flow

5



FOCUS 2016

• Catch the market momentum

• Efficient execution and delivery

This document and the information contained herein is the property of Saab AB

and must not be used, disclosed or altered without Saab AB prior written consent.

7



OUTLOOK STATEMENT 2016

8

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

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



FINANCIAL UPDATE

9



SUMMARY

• Very strong sales growth in the first quarter 2016 (reported and organic)

• Focus on execution and delivery of major projects in the first quarter 2016

• EBIT margin improved, but still impacted by investments in T-X program and radar and sensor technologies

• Operational cash flow very strong due to advances and milestone payments related to large projects

• Execution and delivery of major projects, as well as ongoing efficiency improvements initiatives in focus for coming quarters

10



FINANCIAL KEY DATA

MSEK Q1 2016 Q1 2015 Change FY 2015

Order bookings 4,614 4,800 -4% 81,175

Order backlog 111,649 59,811 87% 113,834

Sales 6,790 5,389 26% 27,186

Operating income 294 210 40% 1,900

Operating margin 4.3% 3.9% 7.0%

Net income 223 90 148% 1,402

Free cash flow 2,955 -941 -726

11

• Continued strong order backlog drives sales increase

• Financial net stronger in 2016 as impact from currency

fluctuations less compared to 2015

• Free cash flow strongly improved due to advances and

milestone payments



ORDER BACKLOG

Order backlog duration, SEK bn

31 Mar 2016 31 Mar 2015 31 Dec 2015

2016: 18.2 2015: 15.1 2016: 21.8

2017: 17.2 2016: 11.1 2017: 15.9

2018: 12.4 2017: 6.2 2018: 12.3

2019: 11.9 2018: 4.6 2019: 11.7

After 2019: 51.9 After 2018: 22.8 After 2019: 52.1

Total: 111.6 Total: 59.8 Total: 113.8

12

0

20

40

60

80

100

120

'11 '12 '13 '14 '15 Q1 '16

SE

K b

n

Order backlog

Order backlog distribution

Sweden

RoW



ORDER SIZE DISTRIBUTION

0

0,5

1

1,5

2

2,5

3

3,5

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

50 000

Q2'11

Q3'11

Q4'11

Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Q2'14

Q3'14

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Q1'16

MS

EK

Small orders* Large orders Book-to-bill ratio

13

* Small orders = <MSEK 100



ORDER BOOKINGS

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

Aeron. Dyn Surveillance S&S IPS Kockums

MS

EK

Q1 '15 Q1 '16

14

Regional distribution

Sweden

RoE

Americas

Asia

Africa

Australia etc

Major order received by Dynamics

Order bookings from small orders

(<100MSEK) increased by 14%, with a

strong increase in Business Area

Support&Services



SALES

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000


MS

EK

Q1 '15 Q1 '16

15

Regional distribution

Sweden

RoE

Americas

Asia

Africa

Australia etc

Gripen programmes drives sales

Increased order backlog translated into

higher sales in Dynamics and Saab

Kockums

GlobalEye drives sales growth in

Surveillance and Support and Services

48%

40%

18%

17%

1%

86%



OPERATING INCOME

-60

-40

-20

0

20

40

60

80

100

120


MS

EK

Q1 '15 Q1 '16

16

Turnaround in Dynamics due to higher

sales

Business Area IPS improved operating

income and operating margin due to

improvements in Avionics and Combitech

4.9% 4.1%EBIT-

margin -5.3% 3.7% 2.5% 3.1% 7.9% 7.6% 3.9% 6.1% 16.2% 5.4%



CASH FLOW

Jan-Mar, 2016 MSEK

Cash flow from operating

activities before changes in

working capital

595

Change in working capital 2,840

Investing activities -379

Operational cash flow 3 056

Tax and other financial items -101

Acquisitions and sale of

subsidiaries and other financial

assets

-

Free cash flow 2,955

17

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Cash flow

from operating

activities

before

changes in

working capital

Change in

working

capital

Investing

activitiesTax and other

financial items



FINANCIAL POSITION

Mar 2016, MSEK

Net liquidity (+) / Net debt (-), 31 December 2015 -3,127

Cash flow from operating activities 3,334

Change in net pension obligation -419

Net investments -379

Currency impact and unrealised results from financial investments 55

Net liquidity (+) / Net debt (-), 31 March 2016 -626

Net pension obligation, 31 March 2016 2,312

Total interest-bearing assets, 31 March 2016 -564

Liquidity 1,122

Equity/assets ratio, 31 March 2016 33.9

18



SUMMARY

• Focus on execution of large projects and cash flow

• Drive efficiency improvements throughout the organisation

• Continue to build order backlog in selected areas

19



www.saabgroup.com

20

Documents

Interim report Q1 2016 - Saab ABINTERIM REPORT Q1 2016 Håkan Buskhe, President and CEO Magnus Örnberg, EVP and CFO This document and the information contained herein is the property