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03-10-06
1
Interim Report Q1 2005Telephone Conference, Stockholm April 21, 2005
Åke SvenssonPresident and CEO
03-10-06
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Jan – March 2005 in brief
• Sales SEK 3,822 m (3,813) • Net income SEK 232 m (250)• Earnings per share SEK 2,04 (2.26)• Order bookings SEK 3,801 m (4,223)• Order backlog SEK 43 bn (46)• Operating income SEK 345 m (353)• Income after financial items SEK 327 m (349)
• Continued staff reduction: to-date 410 people given notice
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Highlights Jan – March 2005
• Fire control- and vehicle computer system to Dutch Army’s CV9035 combat vehicles. Total order value SEK 700 m.
• Saab to upgrade Australian Anzac frigates. Order value exceeding SEK 650 m
• Avionics equipment to A400M - Europe’s next generation militarytransport aircraft. Order value approx. SEK 400 m
• Remote operated vehicles to Swedish Navy for mine huntingmissions. Order value SEK 70 m
• Procurement of RAKEL approved. Shared radio communication system for Swedish security authorities. Consortium with Nokia and EltelNetworks. Saab share SEK ~500 m
• Strengthened financial flexibility. Signature of a 5+1+1 year credit facility of SEK 4 billion
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Order backlog
-01
50
-00-99
40
30
10
0
20
mdr kr
-02 -03 -04 Q1-05
SEK 43 bn
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Trend towards increased exports
Exports
64%
Sweden
51% 71%
Order bookingsSales Order backlog
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Other highlights Jan – to date
• Operation of Swedish Army spare parts supply. Approx. 100 staffoffered employment with AerotechTelub
• Gripen completes successful air-to-air refueling campaign
• First delivery to the Czech Republic.
• Ongoing strategic acquisition – Grintek Ltd. Acquisition of another49% to majority (70%) ownership. Expected to be formalized duringQ2.
• New members of the Board: Lena Torell and Per-Arne Sandström
• New Group Management members: Ian McNamee, Group Senior Vice President, International Relations and Business Improvement
• Helena Stålnert, Group Senior Vice President, Corporate Communications
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Saab’s business segments
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Defense and Security Solutions
Typical business content• Technical support and services
(incl. insourcing)• System of systems solutions• Command and control (C2) products• SCM for C2 and system of systems
SEK m. Full year 2004Sales 4.557Operating income 455Operating margin, % 10.0Order bookings 4.560Order backlog, Dec 31 2 .895
24%
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36%SEK m. Full year 2004Sales 6.826Operating income 706Operating margin, % 10.3Order bookings 6.134Order backlog, Dec 31 16.212
Systems and Products
Typical business content• Development and upgrades• Studies and demonstrators• Maintenance and components• SCM
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36%
Aeronautics
Typical business content• Swedish Gripen contract • Gripen export contracts• SCM and services for Swedish military
air systems• Supplier to international aircraft programs• Maintenance of Saab regional aircraft
SEK m. Full year 2004Sales 6.796Operating income 779Operating margin, % 11.5Order bookings 5.970Order backlog, Dec 31 26.088
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Interim Report Q1 2005Telephone Conference, Stockholm April 21, 2005
Lars WahlundGroup Senior Vice President,
Corporate Financial Control
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Order bookings and order backlog
SEK millions 2005 2004 March 31, 2005
Defense & Security Solutions 2,328 1,155 4,178Systems & Products 819 1,592 15,605Aeronautics 771 1,507 25,260Corporate 14 163 0Internal -131 -194 -1,887Saab Group 3,801 4,223 43,156
Order bookings Order bookings Order
3 months 3 months backlog
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Sales
Defense & Security Solutions 1,064 1,023 4.0% 4,557Systems & Products 1,546 1,417 9.1% 6,826Aeronautics 1,492 1,437 3.8% 6,796Corporate/Internal -280 -64 -331
Saab Group 3,822 3,813 0.2% 17,848
SEK millions Q1 2005 Q1 2004 Change 2004
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Operating income, EBIT
Defense & Sec. Solutions 114 10.7% 88 8.6% 402 8.8%Systems & Products 170 11.0% 89 6.3% 617 9.0%Aeronautics 98 6.6% 176 12.2% 751 11.1%Corporate/Other -37 0 83
Saab Group 345 9.0% 353 9.3% 1,853 10.4%
SEK millions Q1 2005 margin Q1 2004 margin 2004 margin
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Operating income, EBIT excl. structural costs
Defense & Sec. Solutions 114 10.7% 88 8.6% 455 10.0%Systems & Products 170 11.0% 89 6.3% 706 10.3%Aeronautics 127 8.5% 176 12.2% 779 11.5%Corporate/Other -37 0 96Total 374 9.8% 353 9.3% 2,036 11.4%Structural costs -29 0 -183Saab Group 345 9.0% 353 9.3% 1,853 10.4%
SEK millions Q1 2005 margin Q1 2004 margin 2004 margin
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Income statement
Sales 3,822 3,813 17,848Cost of goods sold -2,907 -2,873 -13,596Gross margin 915 940 4,252Gross margin 23.9% 24.7% 23.8%Marketing expenses -292 -313 -1,286Administrative expenses -231 -218 -948Research and development costs -81 -78 -388Other operating income 26 23 175Other operating expenses -5 -14 -27Share in income ofassociated companies 13 13 75Operating income 345 353 1,853Operating margin 9.0% 9.3% 10.4%Result from financial investments -18 -4 -141Income after financial items 327 349 1,712Taxes -95 -99 -402Net income 232 250 1.310
SEK millions Q1 2005 Q1 2004 2004
Earnings per share, SEK 2.04 2.26 11.78
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Balance sheetMarch 31, Jan. 1,
SEK millions 2005 2005 ChangeAssetsGoodwill and other intangible assets 2,868 2,822 46Property, plant and equipment, etc. 4,344 4,343 1Lease assets 4,586 4,371 215Interest bearing receivables 598 604 -6Shares, etc 805 770 35Deferred tax receivables 608 740 -132Inventories, etc. 3,402 2,882 520Receivables related to unrealized financial instr 801 1,227 -426Other receivables 5,750 5,403 347Cash and marketable securities 4,098 4,319 -221Fixed assets held for sale 182 182 0Total assets 28,042 27,663 379Shareholders’ equity and liabilitiesShareholders’ equity 8,512 8,208 304Provision for pensions 3,051 3,034 17Deferred tax liabilities 50 50 0Other provisions 2,205 2,239 -34Liabilities to credit institutions 1,098 1,108 -10Lease obligations 2,308 2,225 83Advance payments from customers, net 2,862 2,860 2Other liabilities 7,679 7,668 11Liabilities related to unrealized financial instr 272 266 6Liabilities related to fixed assets held for sale 5 5 0Total shareholders’ equity and liabilities 28,042 27,663 379
Equity/assets ratio,% 30.4 29.7
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Balance sheet, March 31, 2005, subdivided
Saab Aircraft Elimi- SaabSEK millions Saab Leasing nations Group
Goodwill and other intangible assets 2,868 2,868Property, plant and equipment 4,342 2 4,344Lease assets 4,586 4,586Long-term interest bearing receivables 478 478Shares, etc 2,305 -1,500 805Deferred tax receivables 755 -147 608Inventories, etc. 3,398 4 3,402Short-term interest bearing receivables 120 120Other receivables 6,064 669 6,733Cash and marketable securities 4,077 21 4,098Total assets 24,407 5,282 -1,647 28,042Shareholders’ equity 8,642 1,370 -1,500 8,512Provision for pensions 3,051 3,051Other provisions 1,441 764 2,205Deferred tax liabilities 50 147 -147 50Liabilities to credit institutions 1,098 1,098Lease obligations 2,308 2,308Advance payments from customers, net 2,862 2,862Other liabilities 7,263 693 7,956Total shareholders’ equity & liabilities 24,407 5,282 -1,647 28,042
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Cash flow
Cash flow from operating activities Income after financial items 327 349 1,712Adjustments for items not affecting cash flow 221 215 921Tax paid -16 -16 -26Cash flow from operating activitiesbefore changes in working capital 532 548 2,607Working capital Inventories etc. -3 -342 -306Receivables -403 710 573Advance payments from customers 2 -393 -1,126Other liabilities 15 -248 -135Lease obligations -70 -59 -418Provisions -110 -76 -330Change in working capital -569 -408 -1,742Cash flow from operating activities -37 140 865Investments in intangible fixed assets -77 -87 -420Investments in/Sales of shares etc. -15 -97 -113Investments in tangible fixed assets -52 -78 -348Investments in/Sales of lease assets -48 -2 41Sales of intangible and tangible assets 18 27 116Cash flow from investments -174 -228 -540Operating cash flow -211 -88 325
SEK millions Q1 2005 Q1 2004 2004
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Operations pre advances -59 438 1,411Change in advances 2 -393 -1,126
Operations -57 45 285
Acquisitions/divestments -15 -88 71Saab Aircraft Leasing andregional aircraft -123 -28 -5Tax paid -16 -17 -26
Total -211 -88 325
SEK millions Q1 2005 Q1 2004 2004
Cash flow summary
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Outlook 2005Forecast and important issues
Åke SvenssonPresident and CEO
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Defence decision 2004
• Decision in Swedish Parliament (Dec ’04) to reduce defense allocations 2005 – 2007
• Government decision on further cuts for 2005
• Fewer development projects and shorter production series for the defense industry
• Continued efficiency measures and adjustment of Saab’s Swedish operations
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SEK m.
0
500
1,000
2,000
1,500
Forecast 2005
’04
Sales
Margin incl.capital gainsMargin excl. capital gains
Capital gains
Operating income
’01 ’02
SEK m.
0
5,000
10,000
20,000
’00
15,000
’04
Divested
’03
EBIT%
0
2,5
5
10
7,5
’01 ’02’00 ’03
Top-line in the order of a 5% organic growth EBIT margin lower than reported 2004, after structural costs Our long-term objective of 10% remains unchanged
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Conclusions
• 2004 very successful, Q1 2005 a normal start
• Continued cutbacks in Sweden and growing international operations
• Future potential in civil security
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