Interim report Q1 2016 - Saab AB...INTERIM REPORT Q2 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 | Q2 2016 | Issue 1

21 July 2016

INTERIM REPORTQ2 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.



SUMMARY JANUARY-JUNE 2016

• Major orders received during first half year

‒ Order within the Airborne Early Warning and Control (AEW&C) segment

‒ Order for development of New Lightweight Torpedo system for Sweden

‒ Agreement signed with Airbus concerning the A321 Airbus Cabin Flex programme, Over Wing Door component

‒ Carl-Gustaf (man-portable weapon system) ammunition contract

• Performance in line with expectations, with improvedoperating margins

• Saab and LFV established a new digital remote air traffic control company

• Number of employees at a stable level after increase in recent years

2

*The Swedish Air Navigation Service Provider



MARKET SITUATION

• Growing turmoil around the world

• Increased need for security and defence capabilities

• Demand for cost efficiency

• Interoperability and collaboration



HIGHLIGHTS Q2 2016

• Contracts for airborne surveillance and developmentof New Lightweight Torpedo system for Sweden

• All business areas increased sales. Total increase of22 per cent

PROFITABLE GROWTH

• Strengthened profitability

• Operating income affected by investments in the development of a new jet trainer (T-X-program)

• Strong operating cash flow in second quarter

PERFORMANCE

• 18 May, Gripen rollout

• Major projects in early stagesPORTFOLIO &

PEOPLE

4



FINANCIAL HIGHLIGHTS, JAN-JUN 2016

5

18 996

11 462

Jan-Jun 2015 Jan-Jun 2016

MS

EK

Order bookings

11 329

13 854


MS

EK

Sales

367

611


MS

EK

Operating income

-2 082

4 051


MS

EK

Free cash flow

22%

4.4%3.2%

EBIT

margin



GROWTH OPPORTUNITY

0

20

40

60

80

100

120

2011 2012 2013 2014 2015 Jan-Jun2016

SE

K b

n

Order backlog development

0

5

10

15

20

25

30

2011 2012 2013 2014 2015 Jan-Jun2015

Jan-Jun2016

SE

K b

n

Sales

6



GRIPEN- THE SMART

FIGHTER



FOCUS 2016

• Efficient execution and delivery

• Catch the market momentum

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.



OUTLOOK STATEMENT 2016

9

• 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

10



SUMMARY

• First half of 2016 in line with our expectations

• Sales increased in all business areas

• Operating margin strengthened

• Early stage in large projects and investments in T-X program impact earnings

• Operating cash flow very strong due to advances and milestones

‒ Strong operating cash flow in 2nd quarter

• Strong balance sheet

‒ Net debt of MSEK 405

11



FINANCIAL KEY DATA

MSEK

Jan-Jun

2016

Jan-Jun

2015 Change FY 2015

Order bookings 11,462 18,996 -40 81,175

Order backlog 111,593 67,853 64 113,834

Sales 13,854 11,329 22 27,186

Operating income 611 367 66 1,900

Operating margin 4.4% 3.2% 7.0%

Net income 414 257 61 1,402

Free cash flow 4,051 -2,082 -726

12

• Excluding the order for new submarines A26 to Sweden in Q2

2015, order bookings for Jan-Jun 2016 strong

• Sales growth driven by Gripen, Airborne Early Warning and

submarine orders

• Strong cash flow in the period



ORDER BACKLOG

Order backlog duration, SEK bn

30 Jun 2016 30 Jun 2015 31 Dec 2015

2016: 13.2 2015: 11.6 2016: 21.8

2017: 19.2 2016: 14.8 2017: 15.9

2018: 13.2 2017: 9.5 2018: 12.3

2019: 12.2 2018: 6.6 2019: 11.7

After 2019: 53.8 After 2018: 25.4 After 2019: 52.1

Total: 111.6 Total: 67.9 Total: 113.8

13

0

20

40

60

80

100

120

'11 '12 '13 '14 '15 Jan-Jun'16

SE

K b

n

Order backlog

36%

64%

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

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

Q2'16

MS

EK

Small orders* Large orders Book-to-bill ratio

14

* Small orders = <MSEK 100



ORDER BACKLOG AND ORDER BOOKINGS

0

2 000

4 000

6 000

8 000

10 000

12 000

Aeron. Dyn Surveillance S&S IPS Kockums

MS

EK

Jan-Jun '15 Jan-Jun '16

15

41%

19%

5%

30%

2% 3%

Regional distribution

Sweden

RoE

Americas

Asia

Africa

Australia etc

Dynamics - order for ammunition to weapon system Carl-Gustaf; and development of New Lightweight Torpedo system to Sweden

Aerostructures (IPS) - agreement with Airbus concerning the A321 Airbus Cabin Flex programme, Over Wing Door component

Surveillance and S&S order within the Airborne Early Warning and Control (AEW&C) segment

0

10

20

30

40

50

60


BS

EK


Order bookings

Order backlog



SALES

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500


MS

EK


16

43%

17%

16%

19%

2% 4%

Regional distribution

Sweden

RoE

Americas

Asia

Africa

Australia etc

All business areas and business unitSaab Kockums increased sales

Driven by the Gripen programme in Aeronautics, a 2015 order for GlobalEyein Surveillance and Support & Services and the development of the A26 Submarine in Saab Kockums

Dynamics saw strong growth due to recent large orders

37%

35%

19%

14%

4%

38%



OPERATING INCOME

84

-147

159

101

179169

79

128

235

7859

-200

-150

-100

-50

0

50

100

150

200

250

300


MS

EK


-1

17

All business areas, except IPS and Saab Kockums, improved operating earnings

Dynamics saw biggest improvement dueto increased deliveries and a change in product mix

Operating income affected by investments in T-X-program, as well as by several major projects in early stages

3.4 5.0 -9.4 3.7 3.3 7.0 9.0 5.7 4.2 22.0 5.3



CASH FLOW

Jan-Jun, 2016 MSEK

Cash flow from operating

activities before changes in

working capital

1,227

Change in working capital 3,783

Investing activities -817

Operational cash flow 4,193

Tax and other financial items -219

Acquisitions and sale of

subsidiaries and other financial

assets77

Free cash flow 4,051

18

0

1 000

2 000

3 000

4 000

5 000

6 000

Cash flow

from operating

activities

before

changes in

working capital

Change in

working

capital

Investing

activities Tax and other

financial itemsAcquisitions

and sale of

subsidiaries

and other

financial assets



FINANCIAL POSITION

June 2016, MSEK

Net liquidity (+) / Net debt (-), 31 December 2015 -3,217

Cash flow from operating activities 4,791

Change in net pension obligation -771

Net investments -817

Sale of subsidiaries 77

Dividend -530

Currency impact and unrealised results from financial investments 62

Net liquidity (+) / Net debt (-), 30 June 2016 -405

Net pension obligation, 30 June 2016 2,664

Total interest-bearing assets, 30 June 2016 8,209

Liquidity 7,578

Equity/assets ratio, 30 June 2016 31.9

19



SUMMARY

• Focus on execution of large projects and cash flow

• Drive efficiency improvements throughout the organisation

• Continue to build order backlog in selected areas

20



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Documents

Interim report Q1 2016 - Saab AB...INTERIM REPORT Q2 2016 Håkan Buskhe, President and CEO Magnus Örnberg, EVP and CFO This document and the information contained herein is the property