saab interim report january - september 2011 presentation

INTERIM REPORTJANUARY – SEPTEMBER 2011

PRESIDENT AND CEO HÅKAN BUSKHE, CFO LARS GRANLÖF19 OCTOBER, 2011INTERIM REPORT, PRESS AND ANALYST MEETING

SUMMARY JAN – SEPT 2011Important orders secured in Q3• Upgrade of naval sonar system

• Components to the Carl-Gustaf weapon system

• System maintenance and development studies regarding Gripen

Sales decreased 1 percent, MSEK 16,151 (16,381)

Operating margin at 14.1 percent (4.4)

Operating cash flow, MSEK 2,260 (2,149)

Net cash position at MSEK 5,081

Divestment of shares in the 3D mapping company C3 Technologies AB, capital gain of MSEK 916

Acquisition of Saab Sensis finalized

CHALLENGING MARKET CONDITIONS

European and the U.S. state budgets being scrutinized

Demanding market situation with increased competitive pressure

Delays in customers decision making processes evident

Civil security market continues to grow and commercial air market recovering

ORDERS RECEIVED

Q3 2011Q2 2011Q1 2011Q4 2010Q3 2010Q2 2010Q1 2010Q4 2009Q3 2009Q2 2009Q1 2009

0

0,2

0,4

0,6

0,8

1

1,2

Large ordersSmall ordersBook-to-Bill ratio

5,2155,478

11,900

3,862

5,038

7,047

3,2853,9954,101

Book-to-bill ratio(12 months rolling)

58%

42%

72%

28%

18%

82%43%

57%

43%

57%

42%

58%

77%

23%

71%

29%

49%

51%

5,431

46%

54%

3,147

40%

60%

MSEK

Inauguration of offices in the UK and India

Research centre in Brazil and India

Acquisition of Sensis Corporation in the U.S. completed

Acquisition of E-COM

Divestment of shares in C3 Technologies AB

STRENGTH FOR MARKET EXPANSION

Strategic priorities

In total cash positive M&A activities in 2011

Strong net cash position

Readiness plan for short-termunstable and demanding markets

Performance prerequisite for growth

SAAB SENSIS

Stronger market presence - globally as well as in the U.S.

Center of excellence for Air Traffic Management Solutions• Airline traffic volume growth and resulting congestion

• Desire to meet future safety, capacity and environmental needs

Structural measures to enhance our competitive position• Reductions announced in October

HIGHLIGHTS JAN – SEPTEMBER 2011

AERONAUTICS ELECTRONIC DEFENCE SYSTEMS

SUPPORT AND SERVICES

DYNAMICS SECURITY AND DEFENCE SOLUTIONS

System maintenance and developmentstudies regardingGripen (SE)

Test pilots at Empire Test Pilots’School continues co-operation with Sweden and Saab using the Gripenfighter aircraft (UK)

Further deliveriesof the Carl-Gustaf man-portableweapon system

RBS 70 NG – the latest air defencesystem. New sighting system with improved precision and increased all-target capability (SE)

Upgrade of a naval sonar system (SE)

Five year frame contract with the U.S. Army Contracting Command (U.S.)

Call-off contract for technical services for Norrlandsflyg’shelicopter fleet(SE)

Frame agreement with Eurocopter for support of their NH90 helicopters (EU)

First order worth MSEK 43 and frame agreement with Cassidian for the new advanced UAV system Talarion

Contracts for supply of the multi-role naval surveillance radar Sea Giraffe AMB (U.S.)

7,284

4,749

680952

750

1,736

6,924

977

4,982

8231,078

1,597

Air Land Naval Civil Security Comm. Aer. Others

Jan-September 2011

Jan-September 2010

MSEK

SALES PER MARKET SEGMENTS

-17% -12%

-23%

9%

-5%

5%

SALES PER MARKET REGION

733

264

796

63

6,104

1,255

3,296

1,186

214

3,300

1,830

3,236

1,519

2,541

85

6,110

SE EU excl SE RoE North

America

Latin

America

Asia Africa Austr., etc

Jan-September 2011

Jan-September 2010

MSEK -

2%

-9%

-22%

30%

-31%

-

-8%

As a % of total sales

38 20 1 7 1 20 8 5

CHANGED OUTLOOK 2011

In 2011, we estimate that sales will decline slightly compared to 2010, including the acquisition of Sensis

The operating margin, excluding material net capital gains, is expected to increase slightly in 2011 compared to the adjusted operating margin 2010 of 6.5 per cent, including the acquisition of Sensis

Previous outlook:

In 2011, we estimate that sales will decline slightly compared to 2010.

The operating margin, excluding material net capital gains, is expected to increase slightly in 2011 compared to the adjusted operating margin 2010 of 6.5 per cent.

JANUARY - SEPTEMBER 2011FINANCIALS

LARS GRANLÖF, CFO19 OCTOBER, 2011FINANCIALS, JANUARY - SEPTEMBER 2011

ORDER BOOKINGS AND ORDER BACKLOG

Jan-Sept Jan-Sept 30 SeptMSEK 2011 2010 2011

Aeronautics 2,750 4,522 13,775Dynamics 3,070 2,698 5,854Electronic Defence Systems 2,675 2,134 7,801Security and Defence Solutions 3,201 2,828 8,104Support and Services 2,443 2,409 4,675Corporate/Internal -346 -213 -798Saab Group 13,793 14,378 39,411

Order Order Orderbookings bookings backlog

ORDER BACKLOG

Order backlog duration(SEK billion):

Sept 2011 Sept 2010 Dec. 2010

2011: 6.1 2010: 6.8 2011: 16.82012: 15.3 2011: 14.1 2012: 10.42013: 7.2 2012: 6.1 2013: 6.32014: 4.6 2013: 3.6 2014: 3.7After 2014: 6.2 After 2013: 6.9 After 2014: 4.3

Total: 39.4 Total: 37.5 Total: 41.5

NLAW

RBS70

AT4/Carl-

Gustaf

Aero-structures

ANZAC

Civil security

solutions

Airborne surveillance

system

SALES

AeronauticsDynamicsElectronic Defence SystemsSecurity and Defence SolutionsSupport and Services Corporate/InternalSaab Group

Jan-Sept Jan-SeptMSEK 2011 2010 Change

4,6112,7703,1083,8852,474-697

16,151

4,6793,1763,0044,0092,333-820

16,381

-1%-13%

3%-3%6%

-1%

OPERATING INCOME, EBIT

Aeronautics 258 5.6% 128 2.7%

Dynamics 272 9.8% 290 9.1%

Electronic Defence Systems 259 8.3% 157 5.2%

Security and Defence Solutions 247 6.4% -72 -1.8%

Support and Services 261 10.5% 244 10.5%

Corporate 985 -23

Saab Group 2,282 14.1% 724 4.4%

Net capital gain/losses 1,169 -10

Jan-Sept Jan-Sept

MSEK 2011 margin 2010 margin

INCOME STATEMENT

Sales 16,151 16,381 4,838 5,004Cost of goods sold -11,700 -12,430 -3,427 -3,765Gross income 4,451 3,951 1,411 1,239Gross margin 27.6% 24.1% 29.2% 24.8%Other operating income 1,304 121 958 40Marketing expenses -1,260 -1,247 -432 -379Administrative expenses -843 -804 -243 -217Research and development costs -1,307 -1,241 -445 -390Other operating expenses -50 -69 -28 7Share of income inassociated companies -13 13 -4 22Operating income 2,282 724 1,217 322Operating margin 14.1% 4.4% 25.2% 6.4%Share of income inassociated companies 2 24 1 -Financial net -123 -164 11 -48Income before taxes 2,161 584 1,229 274Taxes -363 -150 -126 -89 Net income 1,798 434 1,103 188

Jan-Sept Jan-Sept Jul-Sept Jul-SeptMSEK 2011 2010 2011 2010

Earnings per share after dilution, SEK 16.60 3.89 10.15 1.64

Tax rate 17% 26% 10% 31%

RESEARCH AND DEVELOPMENT

804738

686

515

1,127

861732761

503

1,156

728*446

509485

291

664

Q3 2011Q3 2010Q3 2009Q3 20082010200920082007

Amortisation and write-down ofcapitalised development costs

Self funded R&D expenditures (notincluding capitalised costs)

MSEK

** Amortisation and write-down of capitalised development costs included write-downs of MSEK 250 in 2008 and MSEK 20 in the first nine months 2010

**

~3 percentagepoints

STATEMENT OF FINANCIAL POSITION

30 Sept 31 Dec ChangeMSEK 2011 2010

Assets

Fixed assets 13,155 12,464 691Current assets 18,597 16,814 1,783 Total assets 31,752 29,278 2,474

Shareholders’ equity and liabilities

Shareholders’ equity 12,620 11,444 1,176Long-term liabilities 4,355 4,426 -71Short-term liabilities 14,777 13,408 1,369Total liabilities 19,132 17,834 1,298 Total shareholders’ equity & liabilities 31,752 29,278 2,474

Equity/assets ratio 39.7% 39.1%

Total net liquidity 5,081 3,291 1,790

SUMMARISED CASH FLOW JANUARY-SEPTEMBER

Cash flow from operations 1,544 102 1,648 1,674

Inventories -113 - -113 -284Receivables -323 -9 -332 1,523Advances 433 - 433 -4Liabilities 1,048 -141 907 -384Provisions -319 -4 -323 -335Change in working capital 726 -154 572 516

Intangible assets -25 - -25 -63Tangible assets -180 - -180 -154Lease assets - 85 85 59Acquisitions - -1,121 -1,121 -Divestments - 1,274 1,274 133Acq/sales of financial assets 9 - 9 -16Cash flow from investments -196 238 42 -41

Operating cash flow 2,074 186 2,260 2,149

Actual Actual

MSEK Saab SAL/M&A 2011 2010

APPENDIX

AERONAUTICS – HIGHLIGHTS

Jan-Sept Jan-Sept Jan-Dec

MSEK 2011 2010 % 2010

Order bookings 2,750 4,522 -39 6,901Split between larger orders > MSEK 100 and smaller orders 78/22 85/15 - 89/11

Order backlog 13,775 15,319 -10 15,636Sales 4,611 4,679 -1 6,741Operating income 258 128 102 191Operating margin, % 5.6 2.7 2.8

Operating cash flow 761 306 - 30Number of employees 2,748 2,908 -6 2,874

Jan-Sept Jan-Sept Jan-Dec

MSEK 2011 2010 % 2010

Order bookings 2,750 4,522 -39 6,901Split between larger orders > MSEK 100 and smaller orders 78/22 85/15 - 89/11

Order backlog 13,775 15,319 -10 15,636Sales 4,611 4,679 -1 6,741Operating income 258 128 102 191Operating margin, % 5.6 2.7 2.8

Operating cash flow 761 306 - 30Number of employees 2,748 2,908 -6 2,874

26%

Order bookingsSales Backlog

44%23%

70%

Sales, % of total

Markets outsideSweden

86%

Split Defence/Civil

% of sales

DYNAMICS - HIGHLIGHTS

Jan-Sep Jan-Sep Jan-Dec

MSEK 2011 2010 % 2010

Order bookings 3,070 2,698 14 3,312Split between larger orders 62/38 63/37 - 61/39> MSEK 100 and smaller orders

Order backlog 5,854 6,497 -10 5,546Sales 2,770 3,176 -13 4,741Operating income 272 290 -6 322Operating margin, % 9.8 9.1 6.8

Operating cash flow 598 595 1 1,044Number of employees 1,480 1,516 -2 1,483


MSEK 2011 2010 % 2010


Order backlog 5,854 6,497 -10 5,546Sales 2,770 3,176 -13 4,741Operating income 272 290 -6 322Operating margin, % 9.8 9.1 6.8

Operating cash flow 598 595 1 1,044Number of employees 1,480 1,516 -2 1,483

16%


79% 86% 91%

Sales, % of total


90%

Split Defence/Civil

% of sales

ELECTRONIC DEFENCE SYSTEMS -HIGHLIGHTS


MSEK 2011 2010 % 2010


Order backlog 7,801 6,197 26 8,240Sales 3,108 3,004 3 4,354Operating income 259 157 65 99Operating margin, % 8.3 5.2 2.3

Operating cash flow 642 432 49 594Number of employees 2,601 2,496 4 2,453


MSEK 2011 2010 % 2010



Operating cash flow 642 432 49 594Number of employees 2,601 2,496 4 2,453

18%


75% 77% 85%

Sales, % of total


Split Defence/Civil

% of sales 99%

SECURITY AND DEFENCE SOLUTIONS - HIGHLIGHTS


MSEK 2011 2010 % 2010

Order bookings 3,201 2,828 13 6,647Split between larger orders 32/68 16/84 - 40/60

> MSEK 100 and smaller orders

Order backlog 8,104 6,728 20 8,434Sales 3,885 4,009 -3 6,210Operating income 247 -72 - 137Operating margin, % 6.4 -1.8 2.2

Operating cash flow -316 682 - 1,066Number of employees 3,024 2,529 20 2,525


MSEK 2011 2010 % 2010

Order bookings 3,201 2,828 13 6,647Split between larger orders 32/68 16/84 - 40/60

> MSEK 100 and smaller orders

Order backlog 8,104 6,728 20 8,434Sales 3,885 4,009 -3 6,210Operating income 247 -72 - 137Operating margin, % 6.4 -1.8 2.2

Operating cash flow -316 682 - 1,066Number of employees 3,024 2,529 20 2,525

22%


78% 63% 79%

Markets outside Sweden

Sales, % of totalSplit Defence / Civil

% of sales

73%

SUPPORT AND SERVICES - HIGHLIGHTS


MSEK 2011 2010 % 2010



Operating cash flow 473 523 -10 894Number of employees 1,710 1,731 -1 1,721


MSEK 2011 2010 % 2010



Operating cash flow 473 523 -10 894Number of employees 1,710 1,731 -1 1,721

14%


22% 17%43%

Markets outside Sweden

Sales, % of totalSplit Defence / Civil

% of sales

80%

7,284

4,749

680952

750

1,736

6,924

977

4,982

8231,078

1,597

Air Land Naval Civil Security Comm. Aer. Others

Jan-Sept 2011

Jan-Sept 2010

Sales

MSEK

SALES PER MARKETSales split per market January - September 2011

45%

29%

11%

5%

6%4%

Air

Land

Naval

Civil Security

Commercial Aeronautics

Others

OPERATING INCOME, EBIT/EBITDA

Aeronautics EBIT 258 5.6% 128 2.7%EBITDA 445 9.7% 312 6.7%

Dynamics EBIT 272 9.8% 290 9.1%EBITDA 395 14.3% 407 12.8%

Electronic Defence Systems EBIT 259 8.3% 157 5.2%EBITDA 627 20.2% 547 18.2%

Security & Defence Solutions EBIT 247 6.4% -72 -1.8%EBITDA 319 8.2% 20 0.5%

Support & Services EBIT 261 10.5% 244 10.5%EBITDA 275 11.1% 256 11.0%

Corporate EBIT 985 -23EBITDA 1,062 72

Saab Group EBIT 2,282 14.1% 724 4.4%

EBITDA 3,123 19.3% 1,614 9.9%

Jan-Sept Jan-Sept

MSEK 2011 Margin 2010 Margin

COMPREHENSIVE INCOME

Net income for the period 1,798 434

Other comprehensive income:Translation differences for the period -102 -61Net gain/losses on cash flow hedges -229 785Share of other comprehensive income in associated companies -26 10Tax attributable to other comprehensive income 62 -207

Other comprehensive income for the period -295 527

Net comprehensive income for the period 1,503 961

Jan-Sept Jan-SeptMSEK 2011 2010

OPERATING CASH FLOW VS STATEMENT OF CASH FLOW

Operating cash flow 2,260 2,149

Cash flow from financing:Repayments of loans -126 -1,923Dividend paid -367 -237Repurchase of shares - -80

Cash flow from investments –interest bearing:Short-term investments -2,569 15Other financial investments 394 55

Statement of Cash flow -408 -21

Jan-Sept Jan-SeptMSEK 2011 2010

30 Sept 31 DecMSEK 2011 2010 Change

AssetsIntangible fixed assets 6,899 6,413 486Tangible fixed assets 3,245 3,052 193Lease assets 1,017 1,154 -137Biological assets 302 299 3Investment properties 227 236 -9Shares in associated companies 308 251 57Financial investments 191 203 -12Long-term receivables 941 856 85

Deferred tax assets 25 - 25

Total fixed assets 13,155 12,464 691

Inventories 4,207 4,100 107Derivatives 470 1,105 -635Tax receivables 30 46 -16Accounts receivable 3,565 3,052 513Prepaid expenses and accrued income 765 680 85Other receivables 3,333 3,630 -297Liquid assets and short-term investments 6,227 4,088 2,139Total current assets 18,597 16,701 1,896

Assets held for sale - 113 -113

Total assets 31,752 29,278 2,474


30 Sept 31 DecMSEK 2011 2010 Change

Shareholders’ equity and liabilitiesParent Company´s shareholders’ interest 12,508 11,274 1,234Non-controlling interest 112 170 -58Total shareholders´ equity 12,620 11,444 1,176

Long-term interest-bearing liabilities 1,218 1,117 101Other liabilities 189 294 -105Provision for pensions 4 5 -1Other provisions 1,985 2,207 -222Deferred tax liabilities 959 803 156Total long-term liabilities 4,355 4,426 -71

Short-term interest-bearing liabilities 446 589 -143Advance payments from customers 1,048 643 405Accounts payable 1,435 1,799 -364Derivatives 750 750 -Tax liabilities 248 265 -17Other liabilities 1,952 819 1,133Accrued expenses and deferred income 8,155 7,751 404Provisions 743 792 -49Total current liabilities 14,777 13,408 1,369

Liabilities related to assets held for sale - - -Total shareholders’ equity and liabilities 31,752 29,278 2,474

Equity/assets ratio,% 39.7 39.1


STATEMENT OF FINANCIAL POSITION, SEPTEMBER 30, 2011 SUBDIVIDED

Saab Aircraft Elimi- SaabMSEK Saab Leasing nations Group

Intangible assets 6,899 - - 6,899Tangible assets 3,774 - - 3,774Lease assets 2 1,015 - 1,017Long-term interest-bearing receivables 254 - - 254Shares, etc 1,854 1 -1,500 355Other long-term receivables 818 13 - 831Deferred tax assets 151 265 -391 25Inventories 4,191 16 - 4,207Short-term interest-bearing receivables 268 1,588 -1,588 268Other current assets 7,399 26 - 7,425Derivatives 470 - - 470Liquid assets and short-term investments 6,207 20 - 6,227Assets held for sale - - - -Total assets 32,287 2,944 -3,479 31,752Shareholders’ equity 12,681 1,439 -1,500 12,620Provisions for pensions 4 - - 4Other provisions 1,869 859 - 2,728Deferred tax liabilities 1,350 - -391 959Interest-bearing liabilities 3,252 - -1,588 1,664Advance payments from customers 1,048 - - 1,048Derivatives 750 - - 750Other liabilities 11,333 646 - 11,979Total shareholders’ equity & liabilities 32,287 2,944 -3,479 31,752

CHANGES IN SHAREHOLDERS EQUITY

Capital Other Net res. Translation Revaluation Retained Total excl.stock capital on cash f. reserve reserve earnings non-.

contr. hedges controlling intr.

Opening balance, 1 January, 2011 1,746 543 648 -12 51 8,298 11,274

Net comprehensive income for the period -168 -83 1,812 1,561

Transactions with shareholders:

Dividend -367 -367

Repurchase of shares -

Share matching plan 39 39

Acquisition and sale of non-controlling interest 1 1

Closing balance, 30 September, 2011 1,746 543 480 -95 51 9,783 12,508

NET LIQUIDITY / NET DEBT

AssetsShort-term investments 4,113 1,544Liquid assets 2,114 2,544Interest-bearing receivables 522 914Total liquid investments 6,749 5,002

LiabilitiesLong-term interest-bearing liabilities -1,218 -1,117Short-term interest-bearing liabilities -446 -589

Provisions for pensions -4 -5Total interest-bearing liabilities -1,668 -1,711

Total net liquidity 5,081 3,291

30 Sept 31 Dec

MSEK 2011 2010

LIQUIDITY

Liquid assets at the beginning of the year 2,544 1,463

Operating cash flow 2,260 2,149Short-term investments -2,569 15Repayments of loans -126 -1,923Repurchase of shares - -80Dividend to shareholders -367 -237Other changes, translation differencies etc 372 36

Liquid assets September 30 2,114 1,423

MSEK 2011 2010

NUMBER OF EMPLOYEES

Sept 30 Dec 31Number 2011 2010 Change

Aeronautics 2,748 2,874 -126Dynamics 1,480 1,483 -3Electronic Defence Systems 2,601 2,453 148Security & Defence Solutions 3,024 2,525 499Support & Services 1,710 1,721 -11Corporate 1,477 1,480 -3Saab Group 13,040 12,536 504

APPENDIX

Quarterly information 2011 and 2010

July-Sept Apr-June Jan-Mar Oct-Dec

Sales 2011 2011 2011 2010

Aeronautics 1,268 1,835 1,508 2,062Dynamics 724 1,084 962 1,565Electronic Defence Systems 979 1,094 1,035 1,350Security and Defence Solutions 1,310 1,272 1,303 2,201Support and Services 786 781 907 1,070Corporate 200 261 243 313Internal sales -429 -466 -506 -508Total 4,838 5,861 5,452 8,053

Operating income

Aeronautics 22 1.7% 157 8.6% 79 5.2% 63 3.1%Dynamics 60 8.3% 123 11.3% 89 9.3% 32 2.0%Electronic Defence Systems 42 4.3% 181 16.5% 36 3.5% -58 -4.3%Security and Defence Solutions 109 8.3% 67 5.3% 71 5.4% 209 9.5%Support and Services 79 10.1% 107 13.7% 75 8.3% 107 10.0%Corporate 905 62 18 -102Total 1,217 25.2% 697 11.9% 368 6.7% 251 3.1%

Quarterly information 2010 and Oct – Dec 2009

July-Sept Apr-June Jan-Mar Oct-Dec

Sales 2010 2010 2010 2009

Aeronautics 1,278 1,698 1,703 2,133Dynamics 1,023 1,167 986 1,481Electronic Defence Systems 905 1,159 940 1,403Security and Defence Solutions 1,382 1,427 1,200 2,240Support and Services 756 834 743 1,032Corporate 224 233 219 249Internal sales -564 -525 -407 -770Total 5,004 5,993 5,384 7,768

Operating income

Aeronautics 57 4.5% 18 1.1% 53 3.1% 73 3.4%Dynamics 31 3.0% 174 14.9% 85 8.6% 17 1.1%Electronic Defence Systems 6 0.7% 114 9.8% 37 3.9% -69 -4.9%Security and Defence Solutions 130 9.4% -106 -7.4% -96 -8.0% 121 5.4%Support and Services 69 9.1% 119 14.3% 56 7.5% 148 14.3%Corporate 29 -43 -9 213Total 322 6.4% 276 4.6% 126 2.3% 503 6.5%

saab interim report january - september 2011 presentation

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