The 2000 Report

THE 2000 REPORT

· Order bookings amounted to SEK 28 billion.
· Sales amounted to SEK 17,840 m. (9,053, pro forma 18,018).
· Operating income increased to SEK 1,533 m. (1,104, pro forma 1,125).
· Earnings per share amounted to SEK 9.75 (8.82, pro forma 6.90).
· After-tax return on shareholders' equity 20,0% and pre-tax return on
capital employed 14,6%.
· Proposed dividend per share: SEK 3.00 (2.50). In addition, the Board
has today decided to propose to the Annual General Meeting that up to 10
per cent of the company's own shares be made repurchasable.
· Conditional acquisition of a 65% holding in the Dutch company Fokker
Space.
· Financial Risk Insurance Program for the regional aircraft lease
portfolio.
· Divestment of aircraft engine lease operation in the U.S.


Comment by the President

"The past year has involved major changes for Saab and has been
characterized by intensive integration, among other things. The
acquisition of Celsius doubled sales and gathered large parts of the
Swedish defense industry under Saab. Against this backdrop, it is pleasing
that we have been able to maintain good income and order development with
an all-time high in both earnings per share and order bookings.

Order bookings amounted to SEK 28 billion and the order backlog at the end
of the period was SEK 41 billion. This corresponds to over two years'
invoicing. The good level of order development is also strengthened by a
series of breakthrough orders signifying strategic advances in important
growth areas.

At the same time, we are continuing to streamline the Group. Divesting
mature businesses, such as Combitech Network, is also a way of realizing
values. In January this year, we sold Marine Electronics to the American
company Emerson, an industrially perfect deal that also generated
excellent value for our shareholders.

As expected, the fourth quarter was a strong quarter for our core
business. At the same time, several activities in Other operations have
been divested and in February this year we sold Celsius Amtec, which was
part of Celsius Aviation Services. During the quarter, we also implemented
an insurance solution for the leasing portfolio of regional aircraft. The
insurance means that in practice we have eliminated the market risk in the
portfolio and that further administration can be concentrated on
increasing the value of our aircraft fleet and thereby the value for
Saab's shareholders.

We are able to look back on a busy and successful year. Our core business
has a clear focus and we have recently decided to set up a Venture Capital
function to help our business areas realize further value from our
technical know-how. After delivering a strong performance with a record
high earnings per share in the year 2000, I look forward to a performance
this year at least on the same level, after a somewhat slow start for the
operations."

Important events and structural measures
Acquisition of the defense group Celsius
In February 2000, Saab stated that the company would fulfil the public
offer for Celsius and on December 31, 2000 Saab became the owner of all
the shares in Celsius. At year-end, the book value of the shares in
Celsius amounted to SEK 5 billion. The acquisition has brought goodwill of
SEK 700 million, which will be written off over a period of 20 years. The
goodwill amount has been adjusted partly for Celsius' share of SPP's
surplus, provisions for restructuring costs, effects of structural
measures decided earlier by Celsius and income from divestments carried
out during 2000.

In connection with the extensive structural measures necessitated through
the acquisition of Celsius, a detailed review has been made of certain
major projects. We then found that for certain development projects in the
torpedo and missiles operations from the former Celsius Group further
provisions of SEK 488 m. were necessary. These provisions were charged to
income in the third quarter.

During the year, the integration and structuring process has entailed
streamlining with the aid of divestments, outsourcing and rationalization
in the business areas, closure of the head office functions in Celsius and
new management structures. During the fourth quarter, the following
operations have been divested: the surface treatment companies Yttec AB
and Celsius Nussbaum GmbH, wind pylon manufacture at Kockums Industrier
and the 49 per cent holding in Australian Submarine Corporation. In
addition, the accredited calibration laboratory in Karlskoga was
transferred on January 1, 2001 and in February Celsius Amtec and Celsius
Materials Karlskoga AB were sold.

Other acquisitions and divestments during the fourth quarter
In November, Saab Ericsson Space purchased 65 per cent of the Dutch
company Fokker Space, with access during 2001 provided that all the
necessary licenses are obtained and that the due diligence will be
finalized in a satisfactory way. Saab Ericsson Space has also acquired a
further 13 per cent of Austrian Aerospace, which is thereby owned to 90
per cent. During the first quarter of 2001, Saab Marine Electronics was
sold to the American company Emerson for approximately SEK 800 million,
resulting in a capital gain of approximately SEK 650 million and a
positive effect on net cash in the same magnitude as the purchase sum.

Financial risk insurance program for Saab Aircraft Leasing's regional
aircraft lease portfolio
In November, Saab entered into a financial risk insurance program, which
in practice isolate the performance of the lease portfolio from future
market risk. During 15 years, from 2000, the policy provides a safeguard
against risks such as market cycles, competition, obsolescence and
customer default. The financial risk insurance program means, that lease
income amounted to USD 1,170 m. after deduction of a first loss of 10
percent or USD 130 m. is now insured. The transaction cost, including fees
to advisers, was USD 37 m. after tax and is covered by current provisions:
therefore, it has not been charged to the year's income. The insurance
policy covers 203 of the 302 aircraft in the portfolio. Of the 99 Saab 340
aircraft not included in the policy, 57 are funded with non-recourse long-
term loans and 42 are covered by asset value insurance issued by EKN, the
Swedish government agency for export guarantees. Saab will continue to
actively manage the portfolio to enhance its value by maximizing income.


Business areas
During 2000, Saab consisted of the business areas Saab Systems and
Electronics (formerly Infomatics), Saab Aerospace, Saab Technical Support
and Services, Saab Bofors Dynamics, Saab Ericsson Space, Celsius Aviation
Services and Other operations. From 2001 the leasing and customer support
activities for Saab regional aircraft, together with parts of Celsius
Aviation Services, will form the business area Saab Aviation Services.

Saab Systems and Electronics
The business area focuses on command and control systems, simulation
systems, avionics, electronic warfare and signature management as well as
commercial operations in IT and electronics. Operations are characterized
by high activity in the export field with sales to over 70 countries.
Order bookings during the year have been very good for most of the
business units, with several market and product breakthroughs both in
Sweden and internationally, and totaled SEK 5,523 m. (pro forma 4,126).
During the fourth quarter, order bookings were SEK 2,257 m. and included
fire control systems for combat vehicles for Switzerland and Finland (SEK
750 m.), marine command and control systems for the United Arab Emirates
(SEK 250 m.), laser simulators and mobile systems for combat training for
the USA (SEK 400 m.), electronic warfare equipment for the Eurofighter
(SEK 135 m.) air surveillance systems for a country in South-east Asia
(SEK 100 m.), and further orders within the ANZAC (ships) and BCSS
(Battlefield Command Support System) programs in Australia. In November,
the UN organ for maritime issues, IMO, made a decision requiring automatic
identification systems (AIS) to be provided on vessels in the Solas
classification from 1 July 2002. This is very positive for business
potentials at Saab TransponderTech, which has already won several
important orders as a result of that decision.


Saab Aerospace
Business area Saab Aerospace develops and manufactures military aircraft
systems, and is a partner and supplier in subsystems for manufacturers of
large commercial aircraft.
The business area produces the Gripen, an integrated and flexible
information, command and weapon system that will remain modern for many
years to come. Three squadrons of the first of the world's fourth
generation combat aircraft are now operative in the Swedish defense.
During 2000, 17 aircraft were delivered to the Swedish Air Force, bringing
the total to 98 out of the 204 ordered by the Defence Materiel
Administration, FMV.

In March, the first export order for the Gripen was formally received from
South Africa, comprising 28 aircraft with a value for Saab of SEK 9.3
billion. Saab has been taking part in the concept study for the A380
Airbus Superjumbo since 1997. In December, Airbus made the final decision
to develop the A380 and Saab is now negotiating on participation in the
project as a partner and subcontractor. Order bookings were SEK 12,171 m.
(pro forma 3,752), of which SEK 575 m. in the fourth quarter included
further development and add-on orders for the Gripen.

Saab Technical Support and Services
The business area focuses on the growing market for high technology
services in aviation, command and control, information, communications and
sensors, and supplies these to both military and commercial customers. The
export share is 11 per cent and 74 per cent of sales refer to military
customers. The business area is dominated by AerotechTelub, which was
formed on January 1, 2000 and is owned to 57 per cent by Saab and 43 per
cent by TietoEnator. AerotechTelub is an advanced service company
primarily oriented towards technical services, operation and maintenance,
and customized system solutions for testing, simulation, traffic
management and information. The business area also includes Saab Nyge
Aero, which is active in aircraft maintenance, aerial target towing and
special flight operations. During the year, Saab Nyge Aero won a
breakthrough order for modification of amphibious aircraft. Order
bookings, which amounted to SEK 2,672 m. (pro forma 2,099), increased
strongly during the year due to acquisitions and a large number of smaller
orders. During the fourth quarter, order bookings amounted to SEK 585 m.
From 2001, Celsius Aviocomp, which is primarily active in component
maintenance for commuter aircraft, and CSM Materialteknik form part of the
Business area.

Saab Bofors Dynamics
Saab's activities in precision engagement have been gathered under
business area Saab Bofors Dynamics, which develops and produces missile
systems, portable anti-armor systems and underwater systems for land, sea
and air applications. The business area has a long presence in many export
markets throughout the world and in 2000 sales were distributed among
almost 40 countries. During the year, intensive integration work has been
carried on in the business area to realize cost synergies and focus the
business. This produced a visible effect from the third quarter. Both the
international collaboration projects, IRIS-T and Taurus, are at the end of
their development phase and negotiations have been started concerning
production contracts. Negotiations between the industry and participating
countries on the development contract for the Meteor have also been
initiated. Development of the RBS 23 Bamse is in its final phase and
successful test firings have taken place. During the year, several
countries have shown an interest in the RBS 15 anti-ship missile and in
December an agreement was signed with the German company DIEHL on
collaboration in production, maintenance and future upgrading for both the
German and Swedish markets, as well as the export market. Order bookings
amounted to SEK 2,853 m. (pro forma 2,793), of which SEK 245 m. in the
fourth quarter.

Saab Ericsson Space
Business area Saab Ericsson Space, which is owned to 60 per cent by Saab
and 40 per cent by Ericsson, develops and manufactures computers,
antennas, microwave electronics and mechanical systems for the space
industry. More than 90 per cent of sales go to export. Sales to commercial
telecommunication projects continued to grow. Other operations comprised
publicly financed projects for organizations such as the European Space
Agency (ESA) and bilateral and Swedish programs. In November, 65 per cent
of the Dutch company Fokker Space was acquired, with access during 2001.
The company specializes in manufacture of solar panels, robot-guided
instruments and structures for launch rockets. The acquisition makes Saab
Ericsson Space Europe's largest subcontractor in space equipment. The
acquisition, however, implies that all the necessary licenses are obtained
and that the due diligence will be finalized in a satisfactory way. During
2000, the most important projects in the institutional market were SPOT,
which is a bilateral project between France and Sweden in global
observation satellites, and the ESA projects METOP for meteorological
satellites and ROSETTA, a scientific satellite. In the commercial market,
the most important projects during the year have been participation in the
Eutelsat and Intelsat telecommunications satellites, work in the Ariane
program and deliveries of separation systems for a number of launch
rockets. Order bookings, which were good during the year, amounted to SEK
765 m. (706), of which SEK 264 m. during the fourth quarter including
computers for the Ariane 5.

Celsius Aviation Services
Celsius Aviation Services, CAS, is a commercial aircraft maintenance
company with its focus on the USA. CAS lies outside the strategy and
orientation chosen by Saab for its future. However, the work of finding a
new owner for CAS has proved more complex than expected, partly as a
result of the trade cycle. The structure of the business has therefore
been reviewed and from 2001 Celsius Aviocomp forms part of the business
area Technical Support and Services. For several of the other companies,
discussions are in progress with potential buyers and in February 2001
Celsius Amtec was sold to a Spanish company. The result from the
divestment has been taken against the purchase analysis and will therefore
not affect the income 2001. There will be a positive effect on net cash of
close to SEK 500 m. During the year, operations have been negatively
influenced by a general business downturn in those markets where CAS
operates. Order bookings amounted to SEK 3,408 m. (2,607) and it is an
increase also in USD.

Other operations
Other operations comprises long-term commitments in the form of the
leasing portfolio and maintenance activities for Saab's regional aircraft.
There are also a number of niche companies. In order to ensure a long-term
capital supply for these niche companies and to realize values, we are
seeking structural solutions for several of these businesses. Order
bookings for Other operations amounted to SEK 1,361 m. (pro forma 1,004)
and related mainly to spare parts and customer support for the fleet of
Saab 340 and Saab 2000 aircraft.


Future development
Creation of one of the world's leading high-tech companies
The European defense industry is characterized by increasing competition
and swelling research and development costs. This has led to a
consolidation and internationalization of the industry and the formation
of large multinational defense companies operating in a global market.
Through the acquisition of Celsius, Saab has created one of the world's
leading high-tech companies with operations focused on defense, aviation
and space. At the same time, Saab has become a more comprehensive company
in important parts of the future defense, greatly expanding its operations
in the field of advanced services and increasing its international
presence.

Products and systems
In systems and defense electronics, Saab now has an internationally
competitive center for developing advanced defense systems, based partly
on information technology, with a large share of exports. The order
backlog for the Gripen is an important base for future operations. With
the order for the RBS 23 Bamse and the decision on the Meteor, the
foundation is laid for an internationally active and firmly established
missile industry at Saab. The decision on the Meteor is also extremely
important for the long-term export potential of the Gripen. During the
past years, Saab has grown both organically and through acquisitions in
the field of advanced technical services, which we consider to be an
interesting future market. The space industry is currently undergoing
major structural changes where the growth potential is expected to lie in
the commercial market while growth in the institutional market is expected
to be moderate.


Sales, income and orders
Sales
Group sales doubled to SEK 17,840 m. (9,053, pro forma 18,018). The
acquisition of Celsius is the main reason for the increase. Sales have
increased or are on the same level as last year for principally all
companies except business area Saab Bofors Dynamics. Of sales 62 percent
(pro forma 66) were related to defense. Sales to foreign markets amounted
to SEK 8,523 m. (3.444) or 48 percent (38, pro forma 48) of total sales.

The sales increase in Saab Systems and Electronics is mainly attributable
to simulation systems and the commercial operations, while defense
electronics was on level with the pro forma figure in the previous year.
Sales of Saab Aerospace were on level with the previous year for all three
business units. During the year, 17 (16) Gripen aircraft were invoiced,
which corresponds with the current delivery plan. Invoicing of one Gripen
aircraft more than previous year was offset by a slower rate in the
Swedish further development program. The sales increase in Saab Technical
Support and Services is attributable to acquisitions within AerotechTelub,
as well as to organic growth in the defense-related operations and test
systems for the telecommunications industry. The sales decrease for Saab
Bofors Dynamics, whose operations were concentrated during the year, is
mainly attributable to major deliveries of STRIX during 1999, for which
there was no corresponding figure in 2000, and fewer deliveries of anti-
armor munitions. Sales of Saab Ericsson Space increased through higher
volumes. Sales in Celsius Aviation Services were unchanged in terms of US
dollars compared with the preceding year and the increase is thus
attributable to the higher dollar rate during 2000.

Other operations increased mainly through volume expansion in customer
support to the fleet of Saab 340 and Saab 2000 aircraft, which amounted to
SEK 994 m. (666).

Income and profitability
The increase in operating income, which amounted to SEK 1,533 m. (1,104,
pro forma 1,125), is mainly attributable to improved income for Saab
Systems and Electronics, the result of structuring work at Saab Bofors
Dynamics and capital gains from value realization of commercial spin-off
companies totaling SEK 353 m. During 1999, operating income included a
reversal of the loss risk reserve for the base contract for the Gripen of
SEK 135 m., for which there was no corresponding figure in 2000. Operating
income includes a reversal of the reserve regarding phase-out of regional
aircraft of SEK 246 m. (255).

The improvement in operating income for Saab Systems and Electronics is
mainly attributable to the military systems business and the phase-out of
certain commercial development projects. Operating income of Saab
Aerospace is on level with the previous year, excluding the reversal of
the loss risk reserve of SEK 135 m. which was made in 1999. Also in 2000,
income is burdened with high costs in regard to marketing and development
for the export version of the Gripen. Operating income and operating
margin have improved somewhat during the year for Saab Technical Support
and Services as a result of the increased volume. Intensive integration
work has been carried on during the year at Saab Bofors Dynamics to
realize cost synergies and concentrate operations. This produced a
positive result after three-quarters. Operating income for Saab Ericsson
Space deteriorated as a result of increased efforts in the commercial
telecommunications market and associated internally financed development.
Income from Group activities improved, primarily through capital gains.
The decrease in income of Celsius Aviation Services is mainly due to a
poorer market for engine operations in the USA and lower activity in the
markets in Southeast Asia and Australia as a result of the stronger
dollar. Operating income for Other operations, excluding reversal of
reserve in regard to Regional Aircraft, was somewhat better than in the
previous year, but continued to be negative SEK -98 m. (pro forma -123).
Structuring work regarding several of these operations is in progress.
Development in operations at Saab Aircraft and Saab Aircraft Leasing
followed the plans set up in 1997. For Saab Aircraft, income for the year
before reversals against the loss risk reserve amounted to SEK -21 m. (-
47) and for Saab Aircraft Leasing to SEK -113 m. (-35).
The year's income regarding Regional Aircraft of SEK -593 m. (-771) has
been set against the termination reserve. Project interest on non-utilized
advance payments, which is reported in operating income, amounted to SEK
172 m. (218).

The increase in marketing expenses compared with pro forma 1999 has
increased because marketing activities in general have been more intensive
in every business area this year. This should be seen in relation to the
excellent order bookings this year. Administrative expenses have decreased
compared with pro forma as a result of the integration work.

Research and development costs, which are on level with pro forma last
year, derived mainly from business areas Saab Systems and Electronics and
Saab Aerospace. Development costs for the export version of the Gripen
were on level with last year.

Other operating income consist mainly of capital gains following
divestment of companies SEK 356 m. (21), reversal of reserves
corresponding to the deficit in Saab Aircraft SEK 21 m. (47), trading
income in Treasury business SEK 45 m. (12), currency gains, etc. SEK 82 m.
(57) and income from secondary activities such as insurance business,
property rentals and sales of machines. Other operating expenses include
pension costs SEK 42 m. and capital losses SEK 17 m.

Items affecting comparability amounted to SEK 285 m. and consisted of
company related funds of SEK 527 m. received from SPP, reversal of
reserves of SEK 246 m. concerning Regional Aircraft, and provisions mainly
regarding certain development projects in the torpedo and missiles
operation from the former Celsius Group amounting to SEK 488 m. Items
affecting comparability in the previous year concerned reversal of
reserves of SEK 255 m. regarding Regional Aircraft.

Net financial income and expenses amounted to SEK -85 m. (pro forma -9),
of which Saab Aircraft Leasing SEK 68 m. (74). The decrease is mainly
attributable to lower liquid funds. The decrease in net financial income
compared with the outcome in the previous year is mainly due to the fact,
that Celsius was purchased for cash, which corresponds to lost interest
revenue of approximately SEK 250 m. The income share in HDW, which
amounted to SEK 30 m., is reported as financial income. The average return
on external investments amounted to SEK 4.72 per cent (4.75) and the
average liquidity was SEK 5,400 m. (11,600). Income after financial items
amounted to SEK 1,448 m. (pro forma 1,116).

Current and deferred taxes amounted to SEK -333 m. (pro forma -352),
corresponding to an effective tax of 23 per cent (pro forma 32) on income
after financial items. The deviation of the effective tax rate in certain
years from the Swedish tax rate of 28 per cent is due to permanent
differences in taxation and the fact that the Group has operations in
countries, primarily the USA, with higher tax rates than in Sweden.

Net income for the year was SEK 1,038 m. (939, pro forma 735),
corresponding to an income per share of SEK 9.75 (8.82, pro forma 6.90).
Pre-tax return on capital employed was 14.6 per cent (21.3). Pre-tax
return on capital employed before items affecting comparability was 12.3
per cent (17.6). After-tax return on shareholders' equity was 20.0 per
cent (21.5).

Order bookings
Group order bookings were all time high and amounted to SEK 28,141 m.
(6,849, pro forma 15,267). Order bookings during the fourth quarter
amounted to SEK 5,043 m. The order backlog at year-end amounted to SEK
41,091 m. (23,637, pro forma 29,891), and includes military orders worth
SEK 38,300 m.


Liquidity, finance and investments
Finance and liquidity
Compared with the pro forma opening balance, liquid funds less liabilities
to credit institutions decreased by SEK -1,876 m. to SEK 3,942 m. (5,818).
The decrease is net, consisting mainly of nominal SEK 1,464 m. in funds
received from SPP and payment of the insurance premium for the leasing
portfolio of regional aircraft of SEK 528 m., payments regarding the phase-
out of regional aircraft manufacture of SEK 604 m., tax paid of SEK 648
m., repurchase of property in accordance with agreements SEK 400 m. and
paid dividend of SEK 266 m., in addition to continued high utilization in
the Gripen program. The Group's net liquidity after deduction for
allocations to pensions amounted to SEK 415 m., compared with SEK 2,412 m.
in pro forma opening balance. Compared with the closing balance in 1999,
net liquidity has decreased by SEK 7,983 m., mainly due to the above
mentioned causes, the acquisition of shares in Celsius during the year for
SEK 3.7 bn and the net liability taken over from Celsius of SEK 1.8 bn.

Group equity/assets ratio amounted to 18.2 per cent compared with 12.8 per
cent in the pro forma opening balance and 16.8 per cent at the end of
1999. The interest coverage ratio, excluding items affecting
comparability, was 4.5 (13.9). Shareholders' equity amounted to SEK 5,670
m. (4,708), corresponding to SEK 53.26 (44.23) per share.

Cash flow
The cash flow analysis and following comments apply to the period January
1 - December 31 2000, as if Celsius had already been included in the Group
December 31, 1999. Group cash flow from operating activities continued to
be good and amounted to SEK 1,882 m. (1,861). Working capital decreased as
a result of planned continued utilization regarding the Gripen, which
resulted in a heavy decrease in advance payments from customers.
Provisions have decreased, mainly as a result of the year's deficit in
Regional Aircraft and Saab Aircraft Leasing totaling SEK 706 m. and
payment of the insurance premium for the leasing fleet of SEK 528 m. Lease
obligations have decreased as a result of sales of aircraft from the
leasing portfolio. The cash flow from investments amounted to SEK -502 m.
(-1.780). In 1999, investments in shares in Celsius AB accounted for SEK -
1,267 m. Operating cash flow amounted to SEK -1,908 m. (-2,368), of which
Regional Aircraft SEK -593 m. (- 404) and Saab Aircraft Leasing SEK -715
m. (218). The outflow is mainly due to phase-out of Regional Aircraft
production, payment of the insurance premium for the leasing fleet,
payment of tax, repurchase of property, payment of dividend and continued
high utilization in the Gripen program.

Capital expenditures
The year's capital expenditures in property, plant and equipment,
excluding lease assets, amounted to SEK 1,077 m. (447, pro forma 652). Net
investments including lease assets and intangible fixed assets amounted to
SEK 494 m. (467), including lease assets of SEK -476 m. (83). Included in
capital expenditures is a re-purchase of a building according to
agreement.

Research and development
The year's expenditure on research and development amounted to SEK 3,808
m. (3,081, pro forma 4,462), of which SEK 2,948 m. (2.477, pro forma
3.604) relates to development paid for by customers.

The internally funded research and development concerned mainly the export
version of Gripen, which was on level with last year, and further
development of the Gamer system and the new generation laser simulators,
upgrading of the RBS 70, further development of the AT4 munitions,
technical development in the area of space, mainly in telecommunications,
and the development of a new generation of separation systems.
Personnel
At the end of 2000, the number of employees in the Group was 15,453,
compared with 16,665 at the beginning of the year. At year-end 1999 the
number of employees was 8,031.

Restructuring
In December 1997, Saab made the decision to end production of regional
aircraft and allocated a reserve for restructuring the industrial
operation. Restructuring is proceeding according to plan. During 2000, a
further number of structural measures were completed, among others
commitments to suppliers. This has enabled a more reliable assessment of
the costs and a decision has therefore been made on reversal of the
reserve of SEK 246 m. (255) in the 2000 financial statements. At year-end
2000, the restructuring reserve amounted to SEK 1,537 m. The view is that
remaining reserves are now well adapted to continued restructuring.

In connection with the decision to cease production of regional aircraft,
a decision was also made to put a market value on the leasing portfolio of
Saab Aircraft Leasing and to make a provision in order to adjust the book
value to calculated market value. During 2000, the aircraft included in
own balance sheet were written down by SEK 1,451 m., of which SEK 989 m.
against the loss risk reserve and the remaining portion against other
liabilities. During 2000, the insurance cost of SEK 528 m. has also been
set against the loss risk reserve, which thereby amounted to SEK 1,008 m.
at the end of 2000. No reversals of the reserve have been made so far,
since the leasing portfolio has a remaining life of about 15 years.

The restructuring costs, related to the acquisition of Celsius are
included in the purchase analysis and has not affected Group earnings.


Parent Company
Sales and income
Sales of the parent company amounted to SEK 3,921 m. (4,933). Operating
income amounted to SEK 838 m. (626). Net financial income and expenses
amounted to SEK 843 m. (1,147) and income after financial income and
expenses was SEK 1,681 m. (1,773). Of the financial net SEK 743 m. (648)
are group contributions and dividends. After appropriations of SEK -148 m.
(-45) and paid and deferred tax of SEK -305 m. (-321), net income for the
year amounted to SEK 1,228 m. (1,407).

Proposed dividend and repurchase of own shares
The Board of Directors long-term dividend policy is for 20-40 percent of
the Group's net income to be distributed. For 2000, the Board of Directors
and the President propose to distribute to the shareholders SEK 3.00
(2.50) per share or a total of SEK 319 m. (266), corresponding to 31 (28)
percent of the Group's net income. April 9, 2001 has been proposed as the
record date and the dividend is expected to be distributed, April 12,
2001.

Further, the Board of Directors will propose the Annual General Meeting
authorization for the Board to decide on repurchase of the company's
shares up to 10 percent of the total shares outstanding. The purpose of
the empowerment is to provide the Board with increased scope for action in
working with the company's capital structure and to enable acquisitions to
be made where considered appropriate. The mandate is proposed to be valid
until the next Annual General Meeting. Such repurchases may be effected
over the stock exchange or through offerings to shareholders. It is also
proposed that the Board's mandate include the possibility to transfer
repurchased shares in accordance with current legislation.

Annual General Meeting
The Annual General Meeting will be held at Saab, Linköping on Wednesday,
April 4, 2001 at 18.00. Saab's revised annual report will be available at
the company's head office in Linköping. The printed Annual Report will be
distributed upon request to shareholders from March 5, 2001.

Ownership
Saab's principal owners are Investor AB, BAE SYSTEMS, the Wallenberg
foundations, Fidelity funds, 3rd AP fund, AMF, MFS funds and Skandia.

Accounting Principles
The report has been drawn up in accordance with earlier accounting
principles. Celsius is included in the Saab Group as from January 1, 2000.
For comparability pro forma figures are published, which refers to the
Saab Group including Celsius for the whole year 1999 and the quarters of
1999. The pro forma figures have been adjusted during the year in
connection with major restructurings of the Group

Linköping February 16, 2001

Bengt Halse
President and Chief Executive Officer


Dates for financial information:
Interim Report for January - March will be published on April 26, 2001
Interim Report for January - June will be published on July 12, 2001
Interim Report for January - September will be published on October 19,
2001
The 2001 Report will be published on February 14, 2002.

For further information, please contact:
Jan Nygren, Head of Corporate Communications tel. +46 13 18 19 99
Agneta Kammeby, Manager Investor Relations tel. +46 13 18 71 25
Anders Stålhammar, Press Officer tel. +46 13 18 71 75

International teleconference:
Today, Friday 16 February, 15.00. Contact Marita Sidéntel. +46 13 18 71 49
for registration and further information.

Telephone interview with President Bengt Halse:
Today, Friday 16 February, approx. 16.00. tel. +46 13 18 71 75
Contact Anders Stålhammar, Press Officer

The 2000 Report can also be accessed on the Internet at www.saab.se

Sales by business area
Pro 4th Q Pro forma
SEK m. 2000 forma Change 2000 4th Q
1999 1999
Saab Systems & 4,364 4,294 2% 1,369 1,419
Electronics
Saab Aerospace 3,921 3,964 -1% 1,204 991
Saab Technical Supp & 2,511 2,367 6% 851 718
Serv
Saab Bofors Dynamics 2,348 3,393 -31% 846 1,394
Saab Ericsson Space 713 676 5% 195 170
Internal sales -733 -797 -174 -261
13,124 13,897 -6% 4,291 4,431
CAS 3,241 3,009 8% 885 839
Other operations 1,475 1,112 351 349
Saab Group 17,840 18,018 -1% 5,527 5,619


Sales by market

SEK m. 2000 1999 Change
Sweden 9,317 5,609 66%
Other EU countries 2,734 1,493 83%
Other European 608 512 19%
countries
Total Europe 12,659 7,614 66%
North America 2,899 644
Central and South 464 21
America
Asia 764 546 40%
Australia, etc 997 217
Other markets 57 11
Saab Group 17,840 9,053 97%


Operating income by business area
Per- Per- Pro
centag Pro centag 4th Q forma
SEK m. 2000 e of forma e of 2000 4th Q
sales 1999 sales 1999

Saab Systems & 289 6.6% 199 4.6% 131 141
Electronics
Saab Aerospace 333 8.5% 450 11.4% 95 189
Saab Technical Supp & 167 6.7% 146 6.2% 61 45
Serv
Saab Bofors Dynamics 46 2.0% -39 45 -16
Saab Ericsson Space 53 7.4% 65 9.6% 9 14
Corporate 340 -40 31 -58
1,228 9.4% 781 5.6% 372 315
CAS 157 4.8% 212 7.0% 52 62
Other operations 148 132 233 23
Saab Group 1,533 8.6% 1,125 6.2% 657 400

Income statement
Pro Pro
forma 4th Q forma
SEK m. 2000 1999 2000 4th Q 1999
1999
Sales 17,840 18,018 5,527 5,619 9,053
Cost of goods sold - - -4,123 -4,347 -6,363
13,427 13,882
Gross margin 4,413 4,136 1,404 1,272 2,690
Marketing expenses -1,578 -1,390 -484 -400 -798
Administrative expenses -1,251 -1,309 -413 -347 -550
Research and development costs -860 -858 -257 -288 -604
Items affecting comparability 285 255 252 43 255
Other operating income 613 347 159 108 181
Other operating expenses -97 -65 -16 2 -71
Share in income of associated 8 9 12 10 1
companies
Operating income 1) 1,533 1,125 657 400 1,104
Result from financial -85 -9 -18 2 273
investments
Income after financial items 1,448 1,116 639 402 1,377
Taxes -333 -352 -99 -138 -391
Minority interest -77 -29 -14 0 -47
Net income 1,038 735 526 264 939

Earnings per share, SEK 2) 9.75 6.90 4.94 2.48 8.82
Earnings per share after full 9.50 6.73 4.81 2.42 8.60
conversion, SEK 3)

1) Includes depreciation of -1,336 -1,311 -417 -367 -918
of which depreciation on -534 -511 -144 -158 -511
leasing assets
2) Number of shares: 106,459,675
as per Dec. 31, 2000
3) Number of shares after full
conversion: 109,247,175

Sales and income per quarter Pro forma
2000 1999
SEK m. 1st 2nd 3rd 4th 1st 2nd 3rd 4th
Q Q Q Q Q Q Q Q
Sales 4,187 4,150 3,976 5,527 3,896 4,970 3,533 5,619


Operating income 247 409 220 657 192 406 127 400
Operating margin 5.9% 9.9% 5.5% 11.9% 4.9% 8.2% 3.6% 7.1%

Net financial income 8 -35 -40 -18 -28 30 -13 2
Income after 255 374 180 639 164 436 114 402
financial items

Net income 161 254 97 526 103 290 78 264
Earnings per share, 1.51 2.39 0.91 4.94 0.97 2.72 0.73 2.48
SEK 1)

1) Number of shares: 106,459,675 as
per Dec.31 2000.

Five year overview
Pro Pro
forma forma
SEK m., unless otherwise 2000 1999 1999 1998 1997 1996
stated
Saab Group

Order bookings 28,141 15,267 6,849 5,797 16,612 7,736

Order backlog at year-end 41,091 29,891 23,637 23,132 27,122 20,042

Sales 17,840 18,018 9,053 8,248 8,674 8,159
Foreign market sales, % 48 48 38 41 51 54
Operating income 1,533 1,125 1,104 875 -5,316 -2,066

Operating margin, % 8.6 6.2 12.2 10.6 neg neg
Operating margin before 13.5 10.7 17.1 14.7 neg neg
depr., %
Income after financial items 1,448 1,116 1,377 1,218 -4,845 -1,572

before items affecting 1,163 861 1,122 1,018 576 -353
comparability

Total assets 31,119 36,641 28,079 29,680 30,320 28,140

Of which aircraft leasing 6,456 8,877 8,877 9,119 9,604 8,817
operation
Operating cash flow -1,908 - -2,368 -1,105 -2,229 1,195

Capital employed, average 12,183 - 6,866 6,352 6,440 8,975
Return on capital employed, 14.6 - 21.3 21.4 neg neg
%
before items affecting 12.3 - 17.6 18.2 8.8 neg
comparability, %
Return on shareholders' 20.0 - 21.5 25.6 neg neg
equity, %
before items affecting 16.1 - 17.3 21.6 2.4 neg
comparability, %
Profit margin before items
affecting comparability, % 8.4 - 13.4 14.1 7.8 neg
Capital turnover rate 1.46 - 1.32 1.29 1.13 0.92
Equity / assets ratio, % 18.2 12.8 16.8 13.6 10.2 22.5
Interest coverage ratio,
before items affecting 4.5 - 13.9 7.88 6.76 neg
comparability

Earnings per share, SEK 9.75 6.90 8.82 8.55 - -
Earnings per share after 9.50 6.73 8.60 8.35 - -
full conversion, SEK
Dividend, SEK1 3.00 - 2.50 2.00 - -
Number of employees at year- 15,453 16,665 8,031 7,891 7,716 8,110
end
12000 proposed dividend.

Key ratios
Pro Long-term
2000 forma 1999 goal
1999

Operating margin before 13.5% 10.7% 17.1% 15%
depreciation
Operating margin after depreciation 8.6% 6.2% 12.2% 10%
Pre-tax return on capital employed 14.6% - 21.3% -
After-tax return on shareholders' 20.0% - 21.5% 15%
equity
Dividend, share of profit 31% - 28% 20-40%
Equity/assets ratio, excl Regional 22.5% 18.2% 29.7% 30%
Aircraft and SAL
Equity/assets ratio 18.2% 12.8% 16.8% -

Balance sheet
Pro
Dec. forma Dec. 31,
SEK m. 31, Dec. 31, 1999
2000 1999
Assets
Goodwill and other intangible assets 1,619 1,824 375
Property, plant and equipment, etc. 4,712 4,339 2,615
Lease assets 6,502 8,963 8,236
Long-term interest bearing receivables 1,345 1,180
Shares, etc. 950 1,003 1,327
Deferred tax receivables 1,440 1,093 507
Inventories, etc. 3,684 3,954 1,717
Short-term interest bearing receivables 606 231
Other receivables 6,079 6,349 2,511
Cash and marketable securities 4,182 7,705 10,791
Total assets 31,119 36,641 28,079

Shareholders' equity and liabilities
Shareholders' equity 5,670 4,700 4,708
Minority interest in subsidiaries 821 752 206
Provision for pensions 3,527 3,406 1,995
Other provisions 3,821 6,606 5,042
Liabilities to credit institutions 1,963 3,081 181
Convertible debenture loan 228 217 217
Lease obligations 3,916 4,633 4,591
Advance payments from customers, net 1) 3,619 4,631 4,055
Other liabilities 7,554 8,615 7,084
Total shareholders' equity and 31,119 36,641 28,079
liabilities

1Advance payments from customers, gross 6,768 7,796 6,645
Less portion used, which has been -3,149 -3,165 -2,590
reduced from inventories
Advance payments from customers, net 3,619 4,631 4,055


Personnel by business area
Pro
Number 2000 forma Change
1999
Saab Systems & 3,023 3,081 -58
Electronics
Saab Aerospace 4,146 4,196 -50
Saab Technical Supp & 2,794 2,705 89
Serv
Saab Bofors Dynamics 1,884 2,565 -681
Saab Ericsson Space 663 644 19
Corporate 161 233 -72
12,671 13,424 -753
CAS 1,450 1,545 -95
Other operations 1,332 1,696 -364
Saab Group 15,453 16,665 -1,212

Summary of cash flow statement

SEK m. 20001) 19992)
Cash flow from operating activities
Income after financial items excl.
share in 1,440 1,380
income of associated companies
Depreciation and write-down charged to 1,336 918
income
Items affecting comparability -246 -255
Tax -648 -182
Cash flow from operating activities
before 1,882 1,861
changes in working capital
Working capital
Inventories etc. 270 524
Receivables 320 8
Advance payments from customers, net -1,012 -1,136
Other liabilities -612 -554
Lease obligations -717 -362
Provisions -1,537 -929
Change in working capital -3,288 -2,449
Cash flow from operating activities -1,406 -588
Investments in intangible fixed assets -59 -104
Investments in shares etc. 43 -1,285
Investments in tangible fixed assets -911 -280
Investments in lease assets 476 -83
Change in long-term receivables -51 -28
Cash flow from investments -502 -1,780
Operating cash flow -1,908 -2,368
1) Change compared to pro forma balance sheet as per December 31, 1999.
2) Change compared to pro forma balance sheet as per December 31, 1998.


Order bookings and order backlog by business area

Order bookings Order backlog
Pro Pro
SEK m. 2000 forma 2000 forma
1999 1999
Saab Systems & 5,523 4,126 8,689 7,250
Electronics
Saab Aerospace 12,171 3,752 27,097 18,847
Saab Technical Supp & 2,672 2,099 1,253 778
Serv
Saab Bofors Dynamics 2,853 2,793 4,219 3,765
Saab Ericsson Space 765 706 816 764
Corporate/internal -612 -1,820 -1,997 -2,156
23,372 11,656 40,077 29,248
CAS 3,408 2,607 540 338
Other operations 1,361 1,004 474 305
Saab Group 28,141 15,267 41,091 29,891


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