Saab interim report January-September 22 October, 2019 Hkan - - PowerPoint PPT Presentation

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Saab interim report January-September 22 October, 2019 Hkan - - PowerPoint PPT Presentation

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Saab interim report January-September 22 October, 2019 Hkan Buskhe, President and CEO Magnus rnberg, EVP and CFO Highlights Jan-Sep 2019 Strong order growth xxxxxxx Increased order bookings of 11% Squadron 2020 contract

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SLIDE 1

Saab interim report January-September

Håkan Buskhe, President and CEO Magnus Örnberg, EVP and CFO

22 October, 2019

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SLIDE 2

Highlights Jan-Sep 2019

  • xxxxxxx

2

Strong order growth Improved performance Successful execution

  • Increased order bookings of 11%
  • Squadron 2020 contract
  • Growth in small orders
  • Good organic growth of 11%
  • Operating income increased in several business areas, Group margin of 7%
  • Continued focus on efficiency

Gripen E

  • Execution of major projects progressing according to plan
  • First flight with the Brazilian Gripen E and first delivery
  • UK – SWE FCAS cooperation initial activities launched
  • Key milestones reached with GlobalEye
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SLIDE 3

3

Saab well positioned for growth

Global market drivers

  • Continued increase in defence budgets for

NATO countries and other major countries

  • Geopolitical uncertainty continues
  • Global economic slowdown not affecting the

industry due to different characteristics

  • Technology advancements and digitalization
  • Military strategies are embracing more digital tools

and increasing the use of space technologies

Saab strategic priorities

  • Strengthen market position
  • Focused market strategy and

internationalization

  • Unique portfolio with high-tech platforms
  • Continued R&D investments and

project execution

  • Grow recurring business
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SLIDE 4

Strong market demand

4

Carl-Gustaf M4 Airborne system

  • Saab contracted for the Finnish Navy’s Squadron 2020
  • Stronger order bookings growth in BA Surveillance,

Support & Services and Dynamics

  • Order bookings of small orders increased 19 per cent
  • U.S. radar program GATOR has entered full rate production

phase

  • Two in-service support contract signed for airborne

surveillance systems

  • Continued high demand for Carl-Gustaf and AT4 system

Finnish Navy Corvettes

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SLIDE 5

Squadron 2020

  • Saab chosen as the provider to integrate the

combat system for the Finnish Navy’s Corvettes

  • Part of finish Squadron 2020 program with a

multi-business order value of EUR 412 million

  • Contract period 2019-2027 with fully operational

Corvettes expected by 2028

  • Includes Saab’s Combat Management System

(9LV) and integrated mast with Saab’s radars Sea Giraffe 4A Fixed Face and Sea Giraffe 1X

  • Also includes TactiCall communication system

and the remote weapon station Trackfire

  • In 2018, Saab signed a contract for deliveries of

the New Lightweight Torpedo to the Finnish Navy

5

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SLIDE 6

2 4 6 8 10

Order bookings

Q3 2018 Q3 2019

Financial highlights, Q3 2019

6

2 4 6 8 10

Sales

Q3 2018 Q3 2019 237 518 100 200 300 400 500 600

  • Adj. operating income

Q3 2018 Q3 2019

  • 2,447
  • 3 000
  • 2 500
  • 2 000
  • 1 500
  • 1 000
  • 500

Operational cash flow

Q3 2018 Q3 2019

  • 1,654

BSEK BSEK MSEK MSEK

6.4 7.9 4.5 9.4

EBIT- margin,% 6.5 3.7

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SLIDE 7

5 10 15 20

Order bookings

Jan-Sep 2018 Jan-Sep 2019

Financial highlights, Jan-Sep 2019

7

5 10 15 20 25 30

Sales

Jan-Sep 2018 Jan-Sep 2019 1142 1739 500 1 000 1 500 2 000

  • Adj. operating income

Jan-Sep 2018 Jan-Sep 2019

  • 5,197
  • 6 000
  • 5 000
  • 4 000
  • 3 000
  • 2 000
  • 1 000

Operational cash flow

Jan-Sep 2018 Jan-Sep 2019

  • 4,356

BSEK BSEK MSEK MSEK

22.1 24.9 17.2 19.1

EBIT- margin,% 7.0 5.2

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SLIDE 8

Sales development

2 000 4 000 6 000 8 000 10 000 Q3 2015 Q3 2016 Q3 2017 Q3 2018 Q3 2019

Sales quarter

8

4 000 8 000 12 000 16 000 20 000 24 000 28 000 Jan-Sep 2015 Jan-Sep 2016 Jan-Sep 2017 Jan-Sep 2018 Jan-Sep 2019

Sales YTD

MSEK MSEK Gripen E

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SLIDE 9
  • 3 000
  • 2 000
  • 1 000

1 000 2 000 3 000 4 000 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Operational cash flow

  • 779
  • 1,654

Cash flow development, Q3 2019

9

MSEK Estimated range for cash flow in period

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Outlook 2019

Sales growth in 2019 is expected to be in line with Saab’s long-term financial goal: annual organic sales growth of 5 per cent. The operating margin in 2019, excluding material non-recurring items, is expected to improve compared to 2018, bringing Saab a further step closer to its financial goal: an

  • perating margin of 10 per cent.

10

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SLIDE 11

11

Financial summary

Magnus Örnberg, EVP and CFO

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SLIDE 12

Financial summary, Jan-Sep 2019

  • Increase of small-sized order bookings by

19 per cent

  • Sales increased by 12%, organic growth 11%
  • Improved operating income and margin
  • Good contribution from project execution

and continued focus on efficiency

  • Operational cash flow impacted by few

milestone payments, mainly within Aeronautics

12

MSEK Jan-Sep 2019 Jan-Sep 2018

Change, %

Order bookings 19,093 17,183

11

Order backlog 96,004 102,400

  • 6

Sales 24,855 22,138

12

  • Adj. operating income

1,739 1,142

52

  • Adj. Operating margin, %

7.0 5.2 Net income 1,121 358 Operational cash flow

  • 4,356
  • 5,197

Free cash flow

  • 4,991
  • 5,699
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SLIDE 13

Order backlog duration

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End of Sep 2019 Year end 2018 End of Sep 2018

2019: 9.2 2019: 28.0 2018: 9.2 2020: 26.6 2020: 20.6 2019: 24.6 2021: 20.4 2021: 18.1 2020: 18.1 2022: 15.5 2022: 13.3 2021: 17.6 After 2022: 24.3 After 2022: 22.2 After 2021: 32.9 Total: 96.0 Total: 102.2 Total: 102.4

Aeronautics 44% Dynamics 15% Surveillance 18% S&S 10% IPS 8% Kockums 5%

Order backlog per business area

Sweden 31% Rest of Europe 16% North America 8% Latin America 33% Asia 8% Africa >1% Australia etc 3%

Order backlog per region

BSEK

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Order size distribution

0,5 1 1,5 2 2,5 3 3,5 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000

January-September 2019

MSEK

Small orders = <MSEK 100, Large orders = >MSEK 100 Book-to-bill ratio calculated as 12 months rolling

14

48% 30% 22% Small orders MSEK < 100 Medium-sized orders MSEK 100-1,000 Large orders > 1,000

Large orders Medium sized orders Small orders Small orders Large orders

Small orders = <MSEK 100, Medium sized orders = MSEK 100-1,000, Large orders = >MSEK 1,000

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SLIDE 15
  • Small orders grew 19 per cent
  • Squadron 2020 Finland, 4.2 BSEK
  • Strong order bookings within business area

Surveillance, Dynamics and S&S

  • Two in-Service support contract signed for

airborne surveillance systems.

2 000 4 000 6 000 8 000 10 000 Aeronautics Dynamics Surveillance S&S IPS Kockums

Order bookings

Jan-Sep 2018 Jan-Sep 2019

Order bookings per business area

MSEK 10 20 30 40 50 60 Aeronautics Dynamics Surveillance S&S IPS Kockums

Order backlog

30-sep-18 30-sep-19

BSEK

15 *Not including order bookings related to serial production of the TX trainer aircraft developed by Boeing and Saab for the U.S. Air Force. The U.S. Air Force has ordered the first phase from Boeing, the EMD = Engineering and Manufacturing Development, intended to be followed by production orders.

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SLIDE 16
  • 11 per cent organic growth
  • Strong growth in business area

Dynamics driven by high demand

  • High activity level within Gripen

development and production driving growth

  • IPS saw continued good sales in most

areas

500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 5 500 6 000 6 500 Aeronautics Dynamics Surveillance S&S IPS Kockums

Jan-Sep 2018 Jan-Sep 2019

Sales per business area

16

+9 % +28 % +6 % +9 % +9 %

  • 3 %

MSEK

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SLIDE 17

Adjusted operating income per business area

17

MSEK

  • Improvement across most business

areas

  • Sales growth and efficiency contributed

positively

  • Higher level of deliveries in Dynamics
  • IPS operating margin strengthened
  • Kockums impacted by lower volumes

and costs related to production start up

50 100 150 200 250 300 350 400 450 500 Aeronautics Dynamics Surveillance S&S IPS Kockums

Jan-Sep 2018 Jan-Sep 2019

Adjusted operating margin,% 8.2 6.9 7.6 3.9 9.1 11.5 10.9 2.9 1.0 2.4 5.7 5.9 1.5

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SLIDE 18
  • 5 000
  • 4 000
  • 3 000
  • 2 000
  • 1 000

1 000 2 000 3 000 4 000

MSEK

18

Operational cash flow, Jan-Sep 2019

Cash flow from operating activities before changes in working capital: 2,969 Change in working capital:

  • 5,324

Contract assets and liabilities

  • 5,585

Inventories

  • 1,134

Other current receivables 2,512 Other current liabilities

  • 967

Provisions

  • 150

Cash flow from investing activities:

  • 2,001

Intangible assets

  • 1,141

Tangible assets

  • 860

Operational cash flow:

  • 4,356

Cash flow from

  • perations

Change in working capital Investing activities

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SLIDE 19

MSEK Net debt, 31 December 2018

  • 1,460

Effects related to implementation of IFRS 16 (opening balance)

  • 2,190

Cash flow from operating activities

  • 2,651

Change in net pension obligation

  • 1,190

Net investments

  • 2,001

Repurchase of shares

  • 301

Dividend

  • 601

Other

  • 143

Net debt, 30 September 2019

  • 10,537

Net pension obligation 5,289 Total interest-bearing receivables

  • 580

Lease liabilities 2,531 Net debt excl. net provisions for pensions, lease liabilities and interest-bearing receivables

  • 3,297

33.6%

Equity/Assets ratio

143.0

Equity per share (SEK)

19

Financial position

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SLIDE 20

Focus 2019

Order intake Project execution Productivity improvement Cash generation

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SLIDE 21

Important information

This presentation may contain forward-looking statements which reflect Saab AB’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward- looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward- looking statements.