Interim Report January-March 2002

INTERIM REPORT January - March 2002

· Order bookings during the first quarter were SEK 6 billion and
order backlog amounted thereby to more than SEK 42 billion.

· Sales SEK 3,530 m. (3,362), an increase of 5%.

· Operating income SEK 146 m. (153 m., excluding capital gains).

· The Czech government on Monday approved the purchase of 24 Gripen
fighters.

Statement by the CEO

"The positive announcement from the Czech government on Monday that it
has approved the purchase of 24 Gripen fighters is very good news, but
it still remains a few more steps in the Czech political process before
everything is completely settled.

Order bookings during the first quarter have been very good and the
order backlog has increased to just over SEK 42 billion, or more than
two and a half years' sales.

The largest individual order during the quarter was the order for
development of a completely new tactical system for NH Industries'
helicopter NH90, but order bookings also include a renewed maintenance
contract for our laser simulators used in the British Army, orders
connected with the Gripen, and anti-tank weapons and underwater
vehicles. Last week, Saab Ericsson Space was in addition appointed prime
contractor of computer equipment for two new large scientific
satellites.

Development of the core activities continues. During the first quarter,
we acquired a signature management operation in the USA. The acquisition
complements Saab Barracuda's operations and reflects our strategic
orientation in the field of high technology defense systems. It is also
a natural step in our ambition to grow both organically and through
acquisitions on both sides of the Atlantic. We are strengthening our
presence in the market which is expected to show the strongest growth
during the coming years. We have also acquired Enea Data's minority
share in Combitech Systems.

The customary variation in income over the year means that the first
quarter is usually weak in this respect, and 2002 is no exception. This
picture is reinforced by the costs we have taken for structural measures
in the space field. For the whole year, however, I continue to
anticipate further improvement in operating income and operating margin,
excluding capital gains."

Major events and structural changes

During the first quarter, Saab acquired BAE SYSTEMS' signature
management operation in the U.S. Since 1994, the company has developed,
marketed and produced advanced camouflage for the American defense on
license from Saab Barracuda.

During the first quarter, Saab also acquired the 35 percent minority
share in Combitech Systems for SEK 87.5 million, as well as an
additional purchase sum based on future growth in value. Combitech
Systems thereby becomes a wholly owned subsidiary.

Kenth-Åke Jönsson has been appointed business area manager for the Saab
business area Technical Support and Services after Jan Eiborn, who will
be joining Saab's group management. Kenth-Åke Jönsson has earlier been
President of the former Telub AB and Executive Vice President of
TietoEnator. He comes from the English investment company 3i, where he
was President of the Swedish operation.

Operations

Saab is one of the world's leading high-technology companies, with its
main activities focusing on aerospace and defense. The operation covers
clearly defined areas within defense electronics, missile systems and
space electronics as well as military and civil aviation. Saab also
focuses on high technology services and maintenance. Saab comprises the
business areas Saab Systems & Electronics, Saab Aerospace, Saab
Technical Support & Services, Saab Bofors Dynamics, Saab Ericsson Space
and Saab Aviation Services. For a brief description of the business
areas see the end of the report.

Sales, income and orders
Sales
Group sales increased by 5 percent to SEK 3,530 m. (3,362). Seventy
percent of sales were related to defense and 40 percent of total sales
were export. The acquisitions' during the quarter have not affected
sales.

Sales of all operations in Systems & Electronics have increased compared
with the same period last year. The increase in Aerospace is mainly
attributable to the military operation, but sales of the commercial
operation have also increased through more deliveries to Airbus. Sales
for the first quarter include 3 (2) Gripen aircraft. The changes
compared with the previous year for Technical Support & Services are
mainly due to variations over the year in AerotechTelub and lower
volumes for the aircraft maintenance operation in Saab Aviocomp. Total
sales for Dynamics are on a level with the first quarter of the
preceding year, which also applies to the constituent business units.
The decrease in sales for Space is mainly attributable to the situation
in the commercial telecom market, as well as to reduced public funding
of space research. The decrease in Aviation Services is a result of the
general situation for air travel. The decrease in sales for Other
Operations is attributable to continued structuring.

Income and profitability
Operating income amounted to SEK 146 m. (803). The result for the
previous year included a capital gain from the divestment of Saab Marine
Electronics of SEK 650 m. Operating income before capital gains was thus
SEK 146 m. (153), corresponding to a margin of 4.1 percent (4.6). The
decrease is mainly attributable to structural costs in the space
operation and to the fact that sales of mainly Dynamics during the
quarter related to a certain extent to projects with a low gross margin.
Operating income has, in accordance with new accounting principles, been
positively affected by capitalization of development costs, mainly
related to the export version of Gripen.

From January 1, 2002, operating income per business area is reported
before goodwill amortization, see table on page 7. During the quarter,
operating margin in Systems & Electronics has been affected by older
projects with low margin in the command and control systems field.
Operating income for Aerospace has improved as a result of volume
increases and capitalization of development costs. The operating margin
excluding capitalization is on a level with previous years. Operating
income for Technical Support & Services is on a level with last year
with an improved margin. During the first quarter, the product mix has
affected operating income for Dynamics. Operations in Space have been
affected both by the situation in the telecom industry and by a decrease
in public-funded orders. Measures have been taken and SEK 40 m. has been
reserved in the first quarter for structural changes. The lower volumes
have affected operating income for Aviation Services, but the margin
continues to be on the 8 percent level, the same as for the whole year
2001. Operating income for Corporate/Other operations has improved as a
result of continued structuring and costs of a non-recurrent nature in
the preceding year.

Administration and marketing expenses have decreased, mainly as a result
of continued cost rationalization. Of the period's research and
development costs, a total of SEK 55 m. (0) has been capitalized in
accordance with new accounting principles and SEK 120 m. (188) has been
charged to income. If these rules had been applied in 2001, SEK 30 m.
would have been capitalized in the balance sheet for the first quarter
of that year. Other operating income during both the present and
previous years consist mainly of trading income in Treasury and currency
gains etc. The previous year also included a capital gain of SEK 650 m.
Other operating expenses consist mainly of currency and capital losses.
The present year also include the provision made for structural changes
in Space of SEK 40 m. Project interest on non-utilized advance payments,
shown in the gross margin, amounted to SEK 44 m. (31).

Net financial income and expenses amounted to SEK -48 m. (-1). The
average return on external investments was 2,84 percent (4,87). The
decrease in return is mainly attributable to revaluation of the
obligation portfolio due to increasing market interests. The financial
net has also been negatively affected by a major increase in the
interest level on the pension debt. Income after financial items
amounted to SEK 98 m. (802). Current and deferred taxes amounted to SEK
-32 m. (-144). Minority interest in income is positive as a result of
the negative income in Saab Ericsson Space. It has also decreased as a
result of the acquisition of the outstanding minority in Combitech
Systems.

Net income for the period was SEK 78 m. compared with SEK 631 m. for the
same period previous year including the capital gain from the divestment
of Saab Marine Electronics. This corresponds to an income per share of
SEK 0.73 (5.93). Income per share before goodwill amortization amounted
to SEK 1.15 (6.28). Pre-tax return on capital employed was 9.3 percent
(19.0). After-tax return on shareholders' equity was 8.8 percent (26.8).

Orders
Group order bookings amounted to SEK 6,060 m. (3,794). Of order
bookings, two thirds came from customers outside Sweden. Order bookings
included tactical mission systems and production of 200 forward
fuselages for NH Industries' helicopter NH90, a renewed maintenance
contract with the British defense regarding simulator systems previously
delivered, separate orders and spare parts for Gripen, anti-armor
weapons and air defense systems for several export customers, and remote
control underwater vehicles for mine-hunting in the Dutch and Belgian
navies. In addition, Saab Aviocomp has signed a Service Center agreement
with Embraer covering authorized component maintenance. The order
backlog at the end of the period amounted to SEK 42,236 m. compared to
SEK 40,034 m. at the beginning of the year.

Liquidity, finance and investments
Finance and liquidity
Liquid funds less liabilities to credit institutions compared to the
beginning of the year have decreased by SEK 394 m. to 4,169 m. (4,563).
The decrease is mainly related to utilization of advances and previously
made provisions as well as increase in inventory related to among others
the A380 project. The Group's net liquidity after deduction for
allocations to pensions decreased to SEK 418 m., compared with SEK 885
m. at the beginning of the year.

Group equity/assets ratio amounted to 23.2 percent (20.9), compared to
SEK 22.3 percent at the beginning of the year. Shareholders' equity
amounted to SEK 6,723 m. (6,387), corresponding to SEK 63.15 (60.00) per
share, compared with SEK 62.74 at the beginning of the year.

Cash flow
Operating cash flow was negative during the quarter by SEK 425 m.
Working capital has increased mainly due to variations in the level of
advances during the year, increase in inventory and payments related to
the regional aircraft business. Operating cash flow of SEK -425 m. is
distributed between cash flow from the operations of SEK -130 m.,
acquisitions SEK -77 m. and from the regional aircraft leasing business
-218 m.

Capital expenditures
The period's capital expenditures in property, plant and equipment,
excluding lease assets, amounted to SEK 125 m. (97).

Personnel
At the end of the period, the number of employees in the Group was
14,026, compared with 14,028 at the beginning of the year.

Ownership
Saab's principal owners are Investor AB, BAE SYSTEMS, the Wallenberg
foundations, AMF, Fidelity funds, GMO International Funds, Third AP
fund, Eikos fund, Skandia, SHB funds and several U.S. funds.

Accounting Principles
The Group follows all the recommendations of the Swedish Financial
Accounting Standards Council which are applicable to 2002. This means
that from 2002 onwards, the new accounting principles will be applied
also in regard to intangible assets, allocations and depreciation, etc.
Only the recommendation on intangible assets, RR 15, has been of
material significance for the Group's income and financial position. In
all other respects, the report has been drawn up in accordance with
earlier applied accounting principles.

Linköping, April 24, 2002

Bengt Halse
President and Chief Executive Officer

This Interim Report has not been subject to review by the Company's
auditors.


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