SAAB PRESENTATION TO DEBT INVESTORS 19 SEPTEMBER 2017 Magnus - - PowerPoint PPT Presentation

▶
saab presentation to debt investors
SMART_READER_LITE
LIVE PREVIEW

SAAB PRESENTATION TO DEBT INVESTORS 19 SEPTEMBER 2017 Magnus - - PowerPoint PPT Presentation

Dec 23, 2023 189 likes •485 views

SAAB PRESENTATION TO DEBT INVESTORS 19 SEPTEMBER 2017 Magnus rnberg, EVP and CFO Saab AB 2 AGENDA 1. Transaction overview 2. Overview of Saab 3. Market & Q2 financial update Sales of SEK 30,130m LTM Q2 2017 Total assets

slide-1
SLIDE 1

SAAB PRESENTATION TO DEBT INVESTORS

19 SEPTEMBER 2017

Magnus Örnberg, EVP and CFO Saab AB

slide-2
SLIDE 2

AGENDA

2
  • 1. Transaction overview
  • 2. Overview of Saab
  • 3. Market & Q2 financial update
  • Sales of SEK 30,130m LTM Q2 2017
  • Total assets of SEK 40,546m in Q2

2017

  • EBITDA of SEK 2,981m LTM Q2 2017
slide-3
SLIDE 3

TRANSACTION OVERVIEW

3
  • Tender offer for December 2018 FRN (SEK 950m) and FXD

(SEK 450m)

  • New 5 year issue subject to market conditions
  • Rationale behind transaction

‒ Prudent risk management and refinance over 1 year prior to maturity ‒ Financial flexibility and secure long-term funding

slide-4
SLIDE 4

AN OVERVIEW OF SAAB (2016)

  • World-leading high-tech solutions, products and

services for military defence and civil security

  • Sales SEK 28.6 billion and order backlog

SEK 107 billion

  • 15,465 employees, local presence in 34 countries and

customers in 100 countries worldwide

  • B-share listed on Nasdaq Stockholm’s Large Cap
  • Approx. 34,000 shareholders, Investor AB main

shareholder with 30 percent of capital

4

100

CUSTOMER COUNTRIES

%

46 20 16 8 8 2 Air Land Naval Security Commercial aeronautics Other

slide-5
SLIDE 5

AT THE FOREFRONT OF CHANGE

1941

First B17 delivered

1979

First RBS 15

  • rdered

1990

First laser simulator BT 46

1961

Viggen introduced

1955

Draken first flight

2002

First contract NLAW

1993

First Gripen delivered

2005

Neuron contract

2006

Saab 2000 A&EW

2008

First flight Gripen Demo

2014

Carl-Gustaf M4 launch

2011

RBS 70 NG launch

5

1990

Saab Automobile independent company

1937

Saab founded

2000

Celsius acquired

2005

Grintek acquired

2007

SeaEye Marine acquired

2012

HITT acquired

2014

TKMS Kockums acquired

1894

Alfred Nobel acquires Bofors

1646

Bofors founded

1948

First Carl-Gustaf

  • rder

1998

StriC in

  • peration

1950-

Development of fighter radar

1970-

Development of Giraffe radar family

1980-

Development of Arthur

1990-

Sea Giraffe AMB launched

2006

Ericsson Microwave Systems acquired

1987

Celsius

1989

Kockums AB

1999

HDW

2005

ThyssenKrupp

1679

Örlogsvarvet Karlskrona

1840

Kockums Malmö

1977

Svenska Varv

slide-6
SLIDE 6

COMPETITIVE PRODUCTS, GLOBAL MARKET

6

Aeronautics Asia Pacific Latin America North America Surveillance Dynamics Support & Services Industrial Products & Services Kockums Europe Middle East & Africa

slide-7
SLIDE 7

ORGANISATION

7

Group Functions Market Areas CEO Business Areas

Europe Latin America Middle East & Africa Asia Pacific North America

ü Sales to 100 countries ü 65-80% of sales outside Sweden ü Presence in 35 countries

slide-8
SLIDE 8

MARKET UPDATE

  • Increasing demand for cost-efficient solutions
  • Short lead times important
  • Local partnership for research and

development and production

slide-9
SLIDE 9
  • 1%
  • 4%
  • 2%
  • 1%
  • 3%

11% 5%

  • 30%
  • 25%
  • 20%
  • 15%
  • 10%
  • 5%

0% 5% 10% 15% 20% 2010 2011 2012 2013 2014 2015 2016 Long- term target Sales Organic growth

Execution 2010-2015

Long-term target: Organic growth of 5 per cent p.a. M&A driven growth

Target

TODAY: GROWTH OPPORTUNITY

MARKET

9
slide-10
SLIDE 10

OWNERSHIP

AS OF 31 AUGUST 2017 Share facts:

Ticker: SAAB B Nasdaq Stockholm Large Cap Market cap: ~ SEK 40 bn 74% 8% 3% 1% 14%

Holding per region, %

Sweden US Norway UK Other

10

# Owner Capital Votes 1 Investor 30,0% 40,3% 2 Knut and Alice Wallenbergs foundation 8,8% 7,7% 3 Swedbank Robur Funds 4,7% 4,2% 4 AFA Insurance 2,4% 2,1% 5 Fidelity 2,0% 1,8% 6 Norges Bank 1,9% 1,7% 7 Handelsbanken Funds 1,7% 1,5% 8 Unionen 1,7% 1,5% 9 2 AP-Fund 1,2% 1,1% 10 Lannebo Funds 1,2% 1,1%

Total outstanding shares: 107 243 221

slide-11
SLIDE 11

SUMMARY JANUARY – JUNE 2017

  • Sustained growth in order bookings
  • Improved sales and operating income for all business

areas

  • Increase in operating margin, driven by strengthened

profitability in business area Dynamics

  • Cash flow negative, in line with expectations
  • Continued stable balance sheet
11
slide-12
SLIDE 12

SAAB FOCUS 2017

  • Focus on execution of large projects – project

management

  • Build order backlog in selected areas
  • Drive efficiency improvements throughout the
  • rganisation

‒ Functional and operational excellence

12
slide-13
SLIDE 13

NEW MANAGEMENT TEAM FROM 1/10-17

13

Håkan Buskhe President & CEO Micael Johansson Deputy CEO & Senior Executive Vice President Magnus Örnberg Executive Vice President & CFO Lena Eliasson Head of Group Human Resources Annika Bäremo Head of Group Legal Affairs Ann-Kristin Adolfsson Head of Group Strategy Sebastian Carlsson Head of Group Communications Jonas Hjelm Head of Aeronautics Görgen Johansson Head of Dynamics Anders Carp Head of Surveillance Ellen Molin Head of Support and Services Jessica Öberg Head of Industrial Products and Services Gunnar Wieslander Head of Kockums

CFO & President and Deputies Group Functions Business Areas

slide-14
SLIDE 14

FINANCIAL KEY DATA

14

MSEK Jan-Jun 2017 Jan-Jun 2016 Change FY 2016

Order Bookings 20,554 11,462 79 % 21,828 Order Backlog 112,117 111,593 107,606 Sales 15,353 13,854 11 % 28,631 Operating Income 885 611 45 % 1,797

  • perating margin, %

5.8 4.4 6.3 Net Income 659 414 59 % 1,175 Operational Cash Flow

  • 443

4,193 2,603 Free Cash Flow

  • 532

4,051 2,359

slide-15
SLIDE 15

ORDER BACKLOG

15
  • Strong order backlog in all business areas
  • Dynamics received several large orders in the period

Order Backlog Duration BSEK

30 June 2017 30 June 2016 31 December 2016

2017 14.8 2016 13.2 2017 24.5 2018 22.5 2017 19.2 2018 17.0 2019 17.6 2018 13.2 2019 13.5 2020 15.8 2019 12.2 2020 15.8 2020- 41.4 2019- 53.8 2020- 36.8 Total 112.1 Total 111.6 Total 107.6

slide-16
SLIDE 16

ORDER SIZE DISTRIBUTION

16

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 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 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Small orders* Large orders Book-to-bill ratio** 74% 26% Large Orders Small Orders* Jan-Jun 2017 MSEK

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

slide-17
SLIDE 17

ORDER BOOKINGS & BACKLOG PER BA

1 2 3 4 5 6 7 Aeronautics Dynamics Surveillance S&S IPS Kockums

BSEK

Jan-Jun 2016 Jan-Jun 2017

17
  • Significant order within the

Airborne Early Warning and Control Segment.

  • Kockums signed contract for

modification and upgrading of Corvettes.

  • Dynamics received order for

Next Generation Light Anti-Tank Weapon System (NLAW).

  • Continued support and

maintenance of Gripen C/D involving several business areas.

10 20 30 40 Aeronautics Dynamics Surveillance S&S IPS Kockums

BSEK

Jun'16 Jun'17

Order Bookings Order Backlog

60

slide-18
SLIDE 18

SALES PER BA

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

MSEK

Jan-Jun 2016 Jan-Jun 2017

+11% +23% +11% +23%

18
  • Sales increase in all business areas
  • Support & Services and Kockums

experiencing strong growth

  • Combitech driving force behind sales

growth in business area Industrial, Products and Services (IPS) +5% +1%

slide-19
SLIDE 19

OPERATING INCOME PER BA

50 100 150 200 250 300 Aeronautics Dynamics Surveillance S&S IPS Kockums

MSEK

Jan-Jun 2016 Jan-Jun 2017

3.3 4.8 4.2 4.2

19
  • Improved operating income for all

business areas

  • Substantial growth in operating income

and margin for Dynamics

  • Higher activity level in operations

related to airborne surveillance systems

EBIT Margin

5.0 5.2 3.7 9.6 9.0 9.0 5.3 5.4

slide-20
SLIDE 20
  • 1 000
  • 500

500 1 000 1 500 2 000

Cash Flow from Operating Activities before Changes in Working Capital Change in Working Capital Investing Activities Tax and Other Financial Items

CASH FLOW JAN – JUN 2017

20

MSEK

Cash Flow from Operating Activities before Changes in Working Capital 1,517 Change in Working Capital

  • 1,005

Investing Activities

  • 955

Operational Cash Flow

  • 443

Tax and Other Financial Items

  • 83

Acquisitions and Sale of Subsidiaries and Other Financial Assets

  • 6

Free Cash Flow

  • 532

Acquisitions and Sale of Subsidiaries and Other Financial Assets

MSEK

slide-21
SLIDE 21

FINANCIAL POSITION

21

33%

Equity/Assets Ratio

MSEK

Net Liquidity (+) / Net Debt (-), 31 December 2016

  • 1,836

Cash Flow from Operating Activities 429 Change in Net Pension Obligation

  • 266

Net Investments

  • 955

Dividend

  • 559

Currency Impact and Unrealised Results from Financial Investment

  • 9

Net Liquidity (+) / Net Debt (-), 30 June 2017

  • 3,196

Net Pension Obligation, 30 June 2017 2,690 Total Interest-Bearing Assets, 30 June 2017

  • 608

Liquidity

  • 1,114

124

Equity per Share (SEK)

slide-22
SLIDE 22

SAAB

19 SEPTEMBER 2017

Stefan Lind VP and Group Treasurer Saab AB

slide-23
SLIDE 23

GOVERNANCE – POLICY FOR FUNDING

Policy requirement:

  • Free cash, together with committed unutilized credit

facilities, shall always be higher than MSEK 4,000*

  • Or the higher of:
  • 10% of Group turnover
  • Risk Weighted amount of all guarantees issued by banks

with counter indemnity on Saab.

* Adjusted for loans with maturity within 12 months

23

slide-24
SLIDE 24

FREE CASH REQUIREMENT

24

Saab should always have free cash adjusted for loans with maturity within 12 months together with unutilized committed credit facilities that shall never be less than;

MSEK Highest of 1706 1703 1612

  • MSEK

4 000 4 000 3 000

  • 10% of Groups turnover (28 631)

2 863 2 863 2 863

  • Risk Weigthed Guarantee amount

3 989 4 113 6 151 Present Free Cash & Facility

  • Liquid Assets

3 714 5 931 5 636

  • Unutilized Committed Facility (RCF)

6 000 6 000 6 000

  • Short Loans (duration < 12 months)

9 714 11 931 11 636 Headroom 5 714 7 818 5 485

slide-25
SLIDE 25

AVAILABLE FUNDING AND FUNDING STRATEGY

25

The Saab group funding strategy is focused on minimizing the refinancing risk by a diversification of the funding sources as well as maturities;

900 900 900 900 900 500 500 500

Available Funding

YTD 2017 06 2016 2015 2014 Revolving Credit Facility (RCF) 6 000 6 000 6 000 4 000 Available Cash & Commited Facilities 6 000 6 000 6 000 4 000 Receivable Sales Program 1 475 1 475 1 475 1 475

  • Utilized
  • 1 299
  • 1 071

Commercial Paper program (CP) 5 000 5 000 5 000 5 000

  • Utilized
  • 400

Medium Term Note program (MTN) 6 000 6 000 6 000 3 000

  • Utilized
  • 4 150
  • 4 150
  • 4 150
  • 2 000

Schuldschein bilateral loans 926 926 926

  • Utilized
  • 926
  • 926
  • 216
  • Unutilized funding programs

8 325 8 325 7 336 6 404 Total 14 325 14 325 13 336 10 404 Full Year Bank facilities strategy Revolving Credit Facilities Derivatives Guarantees Receivable Sales Bridge Financing Medium and long term funding strategy Commercial papers MTN loans Bilateral loans

  • Schuldschein
slide-26
SLIDE 26

MATURITY PROFILE

26

The maturity profile should be diversified over time to minimize refinancing risk. Issue of 5 year loan meets the funding strategy well;

200 400 600 800 1 000 1 200 1 400 1 600 1 800 2018 2019 2020 2021 2022 2023 2024

Maturity profile

MTN SSD

MTN SSD RCF Total

2018 1 350 1 350 2019 1 575 1 575 2020 425 425 2021 400 759 1 159 2022 47 6 000 6 047 2023 142 142 2024 400 400

4 150 948 6 000

11 098

MTN = Medium Term Notes SSD = Schuldschein RCF = Revolving Credit Facility MSEK MSEK

slide-27
SLIDE 27

LONG-TERM FINANCIAL GOALS

27

Organic sales growth averaging 5 per cent annually

  • ver a business cycle.

Operating margin after depreciation and amortisation (EBIT) of at least 10 per cent annually over a business cycle. Equity/assets ratio of over 30 per cent.

5% 10% >30%

  • Focus on areas with strong market position
  • Strengthen position in areas with growth

possibilities

  • Local partnerships
  • Project execution
  • Operational excellence
  • Continuoulsy develop leaders and employees
  • Further strengthen core areas
  • Invest in research and development
  • Diversity drives innovation

PERFORMANCE INNOVA TION MARKET

slide-28
SLIDE 28

OUTLOOK STATEMENT 2017

28
  • We estimate that sales growth in 2017 will be higher

than Saab’s long-term financial goal: annual organic sales growth of 5 per cent.

  • We expect the operating margin, excluding material

non-recurring items, to improve compared to 2016 and thus the company will take a step towards its financial goal: an operating margin of 10 per cent.

slide-29
SLIDE 29

WWW.SAABGROUP.COM