Saab interim report January-March 26 April, 2019 Hkan Buskhe, - - PowerPoint PPT Presentation

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Saab interim report January-March 26 April, 2019 Hkan Buskhe, - - PowerPoint PPT Presentation

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Saab interim report January-March 26 April, 2019 Hkan Buskhe, President and CEO Magnus rnberg, EVP and CFO Highlights January-March 2019 Strong organic growth xxxxxxx Organic growth of 8 per cent Dynamics strong growth driven

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SLIDE 1

Saab interim report January-March

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

26 April, 2019

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SLIDE 2

Highlights January-March 2019

  • xxxxxxx

2

  • Increase of working capital due to ongoing preparation of deliveries of

Gripen to Sweden and Brazil

  • Saab estimates that the operational cash flow will be negative for the

full year, but on a better level than 2018 Strong organic growth Improved operating income Cash flow

  • Organic growth of 8 per cent
  • Dynamics strong growth driven by more deliveries
  • IPS*, growth in several business units
  • Aeronautics growth driven by production for deliveries to Sweden

and Brazil

  • Execution of major projects progressing according to plan
  • Productivity improvement in several business areas
  • Dynamics improved operating margin due to higher utilisation

*Business Area Industrial Products and Services

Swedish submarine HMS Gotland during sea trials

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SLIDE 3

Market opportunities

3

Gripen E A26 Submarine GlobalEye Carl-Gustaf M4 C2S*

  • In April, Saab was shortlisted as

Combat System Provider for Finnish Squadron 2020 program

  • Saab handed in proposal to Switzerland

consisting of options for 30, and 40, Gripen E

  • Saab handed in proposal to Finland in

January, comprising of 64 Gripen aircraft

  • Tender process for fighter aircraft in

Canada and India on-going

  • Tender process to replace the Walrus-

class submarines in the Netherlands

  • ngoing

*C2S = Command and Control Systems

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SLIDE 4

2 4 6 8

Order bookings

Jan-Mar 2018 Jan-Mar 2019

Financial highlights, January-March 2019

4

2 4 6 8 10

Sales

Jan-Mar 2018 Jan-Mar 2019 447 591 200 400 600 800

Operating income

Jan-Mar 2018 Jan-Mar 2019

  • 2,211
  • 2500
  • 2000
  • 1500
  • 1000
  • 500

Operational cash flow

Jan-Mar 2018 Jan-Mar 2019

  • 1,923

BSEK BSEK MSEK MSEK

7.8 8.5 6.1 4.5

EBIT- margin,% 7.0 5.8

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SLIDE 5

First quarter development

5

MSEK MSEK Giraffe 1X

6,790 7,586 7,766 8,496 2000 4000 6000 8000 10000 Q1 2016 Q1 2017 Q1 2018 Q1 2019

Sales

294 539 447 591 100 200 300 400 500 600 700 Q1 2016 Q1 2017 Q1 2018 Q1 2019

Operating income

EBIT margin,% 7.1% 5.8% 7.0% 5.8% 4.3%

12% 2.4% 9.4%

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SLIDE 6

Cash flow development, Jan-Mar 2019

6

MSEK

2,603 1,388

  • 2,424
  • 1,923
  • 3000
  • 2000
  • 1000

1000 2000 3000 4000 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Operational cashflow

Estimated range for cash flow in period

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SLIDE 7

Strategic focus areas 2019

Market

  • Pursue focused market strategy and utilize

installed base to strengthen market position

  • Technology investments imperative for creating

stronger market position

7

Re-sizing & Re-shaping Direction Update April 2019

  • All re-sizing plans

implemented

  • Focus portfolio
  • More focused market

approach

  • Higher degree of

digitalisation and simplification of functional processes

Performance

  • Execution of major projects
  • Continue implementation of re-sizing and re-

shaping initiatives

Innovation

  • Forward thinking leadership enabler for

technology development

  • Employee reduction

implemented; consultancy reduction

  • n-going
  • Portfolio analysis on-

going; civil business in South Africa divested

  • Current review of

market org.

  • New global HR-IT

environment launched

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SLIDE 8

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.

8

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SLIDE 9

9

Financial summary

Magnus Örnberg, EVP and CFO

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SLIDE 10

Financial summary, January-March 2019

  • Increase of small-sized order bookings by

33 per cent

  • Sales increase by 9 per cent; organic growth 8

per cent

  • Improved operating margin 7.0 (5,8) per cent
  • Operational cash flow negative with Aeronautics

preparing for deliveries of Gripen to Sweden and Brazil

  • Net debt impacted by IFRS16 adjustment of

BSEK 2.2

10

MSEK Jan-Mar 2019 Jan-Mar 2018

Change, %

Order Bookings 4,482 6,135

  • 26.9

Order Backlog* 97,401 105,712

  • 7.9

Sales 8,496 7,766

9.4

Operating Income 591 447

32.2

Operating margin, % 7,0 5,8 Net Income 397 251

58.2

Operational Cash Flow

  • 1,923
  • 2,211

Free Cash Flow

  • 2,137
  • 2,411

*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. Airforce has ordered the first phase, the EMD = Engineering and Manufacturing Design, to be followed by production orders.

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SLIDE 11

Order backlog duration

11

31 March 2019 Year End 2018 31 March 2018

2019: 22.2 2019: 28.0 2018: 20.7 2020: 21.6 2020: 20.6 2019: 21.8 2021: 17.2 2021: 18.1 2020: 17.7 2022: 14.8 2022: 13.3 2021: 17.1 After 2022: 21.6 After 2022: 22.2 After 2021: 28.4 Total: 97.4 Total: 102.2 Total: 105.7

Aeronautics 46% Dynamics 14% Surveillance 15% S&S 10% IPS 9% Kockums 6%

Order backlog per Business Area

Sweden 33% Rest of Europe 12% North America 7% Latin America 35% Asia 9% Africa 1% Australia etc 3%

Order backlog per Region

BSEK

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SLIDE 12

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-March 2019

MSEK

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

12

73% 27% Small order MSEK < 100 Medium-sized order MSEK 100-1,000

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 13
  • Small orders grew 33 per cent
  • Adjustment of backlog with IPS, due to order
  • rder cancellation related to Airbus A380

program* and currency adjustment

  • One large order booked in first quarter 2018

in Aeronautics

500 1 000 1 500 2 000 Aeronautics Dynamics Surveillance S&S IPS Kockums

Order bookings

Jan-March 2018 Jan-March 2019

Order bookings per business area

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

Order backlog

31 March 2018 31 March 2019

BSEK

13 *Saab delivers the wingframe for the A380 aircraft. Airbus recently announced that the A380 program will be ceased in 2021, earlier than previously planned. **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. Airforce has ordered the first phase, the EMD = Engineering and Manufacturing Design, to be followed by production orders. **

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SLIDE 14
  • 9 per cent sales growth;

8 per cent organic growth

  • Dynamics increased level of deliveries
  • IPS saw increased sales within business

unit Aerostructures, which saw a high delivery rate in the quarter

  • Growth also driven by strong activity

level in major programs in business area Aeronautics and Kockums

500 1 000 1 500 2 000 2 500 Aeronautics Dynamics Surveillance S&S IPS Kockums

Jan-Mar 2018 Jan-Mar 2019

Sales per business area

14

+4% +32%

  • 3%

+1% +13% +7%

MSEK

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SLIDE 15

Operating income per business area

15

MSEK

  • Operating margin improvement as

productivity levels in several business areas improved

  • Higher level of deliveries in Dynamics –

higher utilization

  • IPS operating margin strengthened due

to higher activity level in several areas

  • Aeronautics saw increased activities in

the Gripen projects and lower T-X-spend

163 46 69 174 27 42

197 113 90 182 69 34

50 100 150 200 Aeronautics Dynamics Surveillance S&S IPS Kockums

Jan-Mar 2018 Jan-Mar 2019

Operating margin,% 9.3 8.0 8.1 4.4 5.2 13.5 13.0 4.4 1.0 4.3 5.6 3.9 1.9

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SLIDE 16

Cash flow development large project

16

Time Development phase Illustrative cashflow and working capital development in a large project Cash in flow Cash out flow (working capital build-up) Delivery phase

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SLIDE 17
  • 2 500
  • 2 000
  • 1 500
  • 1 000
  • 500

500 1 000 1 500

MSEK

17

Operational Cash flow

Cash flow from operating activities before changes in working capital: 1,127 Change in working capital: Contract assets and liabilities

  • 2,333

Inventories

  • 230

Other current receivables 760 Other current liabilities

  • 567

Provisions

  • 50
  • 2,420

Cash flow from investing activities: Intangible assets

  • 358

Tangible assets

  • 272
  • 630

Operational cash flow :

  • 1,923

Cash flow from

  • perations

Change in working capital Investing activities

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SLIDE 18

MSEK Net debt, 31 December 2018

  • 1,460

Effects related to implementation of IFRS 16 (opening balance)

  • 2,190

Cash flow from operating activities

  • 1,366

Change in net pension obligation 300 Net investments

  • 630

Other

  • 36

Net debt, 31 March 2019

  • 5,382

Net pension obligation, 31 March 2019 3,799 Total interest-bearing assets, 31 March 2019

  • 524

Net debt excluding interest-bearing receivables and net pension

  • bligation
  • 2,107

35.4%

Equity/Assets ratio

152.1

Equity per share (SEK)

18

Financial position

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SLIDE 19

19

IFRS 16 effects

MSEK Jan-Mar 2019 incl. IFRS16 Change Jan-Mar 2019 excl. IFRS16 Sales and other

  • perating income

8,514

  • 8,514

COGS and OPEX*

  • 7,595

107

  • 7,702

Depreciation and amortisation

  • 328
  • 96
  • 232

Operating income 591 11 580 Net financial items

  • 81
  • 22
  • 59

Income before taxes 510

  • 11

521 Taxes

  • 113

2

  • 115

Net income for the period 397

  • 9

406 Total assets 57,986 2,200 55,786 Total equity 20,544

  • 9

20,553 Total liabilities 37,442 2,209 35,233

Giraffe AMB UK

*COGS = Cost of goods sold, OPEX = Operating expenses

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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.