Mr. Chairman, distinguished shareholders, ladies and gentlemen!
I will mainly concentrate on the future.
But before I do, there are two things I would like to mention: that we
completed Celsius' integration into Saab and that we achieved a number
of breakthroughs. In new product areas and important export markets.
It is very gratifying that at the same time we were busy with the
integration, we were also able to develop our operations.
Now our job is to capitalize on all the opportunities available to the
We must fully utilize our common strength. This applies in particular to
revenues, where there are considerable opportunities for further
The new business management group - established under the leadership of
Ingemar Andersson - will be an important instrument in this regard.
The many breakthrough orders we received are the other key aspect when
looking back at 2000. Each of our operating areas was awarded orders of
various sizes that are important to the future.
Our order backlog has never been larger, and last year's order bookings
were the highest ever in a single year. Exports accounted for 48 percent
of invoiced sales last year. At the same time that 70 percent of our
order bookings were exports, which means that the export share of our
business will continue to grow.
2000 was also good year for Saab when we look at the numbers.
Invoiced sales doubled to SEK 18 billion, and order bookings were a
record-high SEK 28 billion. The order backlog thereby amounted SEK 41
billion, representing 2,5 years sales.
Celsius also contributed positively to income from the very first year.
Earnings per share rose to SEK 9.75.
The after-tax return on shareholders' equity was 20 percent, surpassing
our long-term objective. And in line with the projection presented at
the end year report earnings per share this year will at least match
last year's level.
Investments in defense materiel in the markets Saab has access to will
grow in the years ahead. Due to budget cutbacks in recent years, many
countries have accumulated investment needs they now have to meet. But
what customers demand is just as important as how much they demand. And
here the development is to our benefit. A shift is clearly taking place.
High technology is playing an increasingly dominant role, at the expense
of high-volume organizations. This will necessitate investments in new
technology and systems, as well as upgrades and enhancements.
For Saab, it means that the markets for practically all our products
An important factor in this development is the shift in military
doctrine we now seeing. The key is battlespace awareness - to be able to
constantly monitoring a potential enemy to interpret his intentions.
This facilitates fast decision-making, where the right resources are
available at the right time.
You have to see, hear and understand - while making sure your enemy
doesn't see, hear or understand - and simultaneously act with high
To meet this need, Saab has developed what we call Net Defence.
Net Defence is a vision of a future net-centric defense, in which
different defense systems are tied together and communicate with each
This is a further advancement of the thinking already used in many of
the defense systems we offer - for instance Gripen - although the net-
centric defense has also been inspired by the explosive development in
commercial IT systems.
In essence we are talking about a decade-long process, with two
different types of changes. New technology is being phased in. But there
is also a more immediate adjustment under way - whereby defense systems
are becoming interoperable for international missions. As a whole, we
can expect to see major investments in new systems, and upgrades of
Internationalization is taking place at various levels. An increasing
number of projects are cooperations across national borders. At the same
time the institutional framework is changing.
For Sweden, 2000 was the year we joined the Western European Armaments
Group, WEAG. And together with Germany, France, the UK, Italy and Spain,
Sweden signed the so-called Letter of Intent (LoI) agreement. These
changes facilitate new alliances across borders, and in the long run
provide access to export markets.
Saab's international opportunities are growing, although our competition
is as well. This development is contributing to the continued
consolidated of the defense industry.
Since the Cold War ended, the map of the industry has been completely
redrawn, and even though 2000 did not offer any major mergers we can now
see that the processes in the U.S. and Europe are beginning to affect
This is the environment we operate in.
We are meeting the future primarily by focusing on systems integration,
electronics and services. This is where we see the best opportunities
for organic growth, and for further acquisitions.
Our strategy provides a platform for long-term growth in all our
Although in some areas growth will come quickly, while in others it will
Saab Systems and Electronics has strong positions in all its operating
For example, advanced command and control and information systems, where
in the naval market we are a world leader in the segment we supply.
The same applies to electronic warfare - half of which is exports - and
where, for example, we are the world-leading supplier of decoys for
In simulation systems such as BT46 have set the standard in the global
market, and captured a market share of over 30 percent. And after the
breakthrough for Gamer we again have a product with the capacity to
dominate its market - this time at a higher systems level.
Barracuda Technologies' signature management systems are currently
exported to around 50 countries. We are among the leaders in the world
in the development and manufacture of systems that protect people and
equipment against reconnaissance and homing equipment.
For Saab Aerospace, the export success of Gripen is obviously an
important component for future growth. We are engaged in active sales
efforts in a number of markets, and I expect at least one new export
contract in the next two years.
Our commercial aircraft operations also offer attractive growth
Saab is currently a supplier of subsystems to both Boeing and Airbus,
the two remaining manufacturers of large passenger aircraft. The Airbus
consortium's decision to begin production of the A380 Superjumbo was
major news during the year. Saab has been participating since 1997 in
development work on the A380, and we are now in negotiations to become a
partner in the project.
For Saab Bofors Dynamics, growth will come farther down the road - in a
market that has been consolidating.
The fact that we have already achieved an operating profit, and that
programs such as IRIS-T, Bamse and Meteor have been approved, give us a
stable foundation to build on.
In our own programs, such as RBS 15, RBS 70 and Bamse, we se expect as a
The advanced, high-technology services offered by the Saab Technical
Support and Services business area - which in itself is a successful
merger within the larger Saab-Celsius merger - also have considerable
Partly in maintenance services. But also in the development of the net-
centric defense, where we command considerable expertise in the
development, maintenance, and operation of large, complex systems. As
well as in commercial markets, where this type of competence is in great
demand. We anticipate interesting growth in this area, also in the short
The consolidation of the European space market has produced two major
constellations: Astrium and Alcatel.
So far we have been able to handle the competition with the large
constellations' own development and production units, and received
important orders from both Astrium and Alcatel. And also from leading
American suppliers as Boeing.
The acquisition of Dutch Fokker Space will make us the leading
independent space supplier in Europe. The most important routes to
continued growth will be through increased market shares, strengthened
positions in new markets and possibly acquisitions.
The fact that we are now represented in Los Angeles - the heart of the
U.S. commercial space industry - is an important step to help us grow in
a market where we have a small share, but where our current growth rate
and our potential are great.
Thanks to the breadth and depth of their expertise, Saab's employees are
constantly coming up with ideas for utilizing our competencies and
technologies outside the defense market. The commercialization and
realization of such spin-offs is an integral part of our efforts to
create value for shareholders.
An example from this year was the divestment - at a good profit - of
Marine Electronics. The strategy for commercial spin-offs has also found
another concrete expression in the new Venture Capital Council, which
will report to Group Management and systematically focus on the
opportunities for commercial projects.
We can now close the books on a strong year. We received several of the
orders we need to generate a good return on our ventures. We have
basically completed Saab's restructuring and divested a long line of
businesses that didn't fit our strategy.
We have some restructuring left to do.
For example, it has taken longer than expected to divest the parts of
Celsius Aviation Services, due in part to the economic slowdown. The
insurance wrap for regional aircraft frees us from a significant and
difficult-to-analyze market risk, and allows us to streamline and
concentrate our regional aircraft operations.
We have delivered what we said we would after our reintroduction on the
stock exchange in the spring of 1998. We will generate long-term profit
growth - adjusted for divestments - in all our core areas. We will be
perceived as - and will consistently be - our customers' best choice and
partner. We will continue to be an attractive employer, and a very
valuable part of Sweden's research and education community.
And we will continue to create value for our shareholders.
Thank you for your time.
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