January - March 2001
* Order bookings after three months amounted to SEK 4 billion.
* Sales amounted to SEK 3,575 m. (4,187).
* Operating income amounted to SEK 803 m. (247), of which capital
gains SEK 650 m. (55).
* Earnings per share amounted to SEK 5.93 (1.51).
* After-tax return on shareholders' equity 26.8% and pre-tax return
on capital employed 19.0%.
Comment by the President
"Order bookings for the first quarter are on last year's high level,
excluding the Gripen order for South Africa. This means an order backlog
of just over SEK 41 billion, corresponding to well over two years' sales
and market activities continue to be on a high level.
Our strategy of continuously creating values by applying defense
technology in commercial markets has again been demonstrated, this time
through the divestment of Saab Marine Electronics, which has resulted in
both a major capital gain and a positive influence on liquidity.
In line with our forecast in the 2000 report in February, the year has
got off to a somewhat weaker start than last year in regard to operating
income before capital gains. We still expect earnings per share for the
whole year to be well on a level with last year.
A year has passed since the acquisition of Celsius, the integration has
progressed very well and has been completed. The newly formed business
management group led by Ingemar Andersson will be an important
instrument to further pursue business co-ordination and synergies
between the business areas that are active in the defense market.
The streamlining and development of the Group have also continued. In
addition to Saab Marine Electronics, Celsius Amtec and the engineering
workshop at Kockums Industries have been divested, at the same time as
the acquisition of Fokker Space is going according to plan.
Since 1997, Saab has taken part in the development work around the
Airbus A380 Superjumbo and last week's announcement that the Swedish
Government will contribute risk financing to the project in the same way
as the Governments of other participating countries was therefore
pleasing for us.
Currently, we are in negotiations with Airbus on development and
production of advanced parts of the aircraft.
At the well attended Annual General Meeting at the beginning of April
was decided on a dividend of SEK 3 per share, corresponding to a direct
yield of almost 4 per cent. The meeting also gave the Board a mandate to
decide on a share buyback if and when this is considered appropriate."
Important events and structural changes
The activities in connection with the acquisition of 65 per cent of the
Dutch company Fokker Space is proceeding according to plan. Fokker
Space, which after taking possession will form part of business area
Saab Ericsson Space, has an annual turnover of about SEK 500 million and
Saab Marine Electronics has been divested to the American electronics
group Emerson for approximately SEK 800 million, entailing a capital
gain of about SEK 650 million and a positive effect on net liquidity
corresponding to the purchase sum.
Celsius Amtec, which is active in asset management of jet engines, has
been divested to the Spanish company Industria de Turbo Propulsores. The
income effect of the sale has been taken into account in the purchase
analysis for Celsius and will not influence income. Net liquidity has
been influenced positively by approximately SEK 500 million.
Work is in progress on divesting other units in Celsius Aviation
Services and discussions are being carried on with potential purchasers
of the individual companies. The process of divesting the remaining
units in Other operations is going according to plan and recently the
engineering workshop at Kockums Industries was sold.
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. From 2001, 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 last page in the report.
Sales, income and orders
Group sales decreased to SEK 3,575 m. (4,187), mainly due to divestments
of companies and operations and initially somewhat low volume for
Systems & Electronics and Aerospace. During the quarter, two Gripen
aircraft were invoiced compared to four during the corresponding quarter
last year. The delivery rate, however, continues to be about 17 aircraft
per year. The sales increase in Technical Support & Services is mainly
attributable to the defense related business within AerotechTelub and
for Space the volume growth continues. Sales of spares from Saab
Aircraft have continued to grow also this year. Sixty-four percent of
sales were related to defense and the foreign markets' share of total
sales was 48 percent.
Income and profitability
Operating income amounted to SEK 803 m. (247), of which capital gain
from the divestment of Saab Marine Electronics was SEK 650 m. The first
quarter last year included capital gains of SEK 55 m. Operating income
excluding capital gains is somewhat lower than last year mainly due to
divestments, low volume for Aerospace and structural costs in Corporate.
Operating income and margin for Systems & Electronics are on a level
with the previous year, excluding divested Saab Marine Electronics. Due
to fewer deliveries and a slower rate in the Swedish further development
program, Aerospace has a lower operating income compared with the same
quarter last year, which furthermore was a quarter when income was above
average. However, the margin is still good and remains on the 10 percent
level. Technical Support & Services is on a level with the previous
year, but due to variations during the year the business area had a
somewhat lower operating margin at the beginning of the year. For
Dynamics the positive trend following last year's intensive integration
of the business has continued. Operating margin for Space is still
somewhat low as a result of internally financed development. The
formation of Saab Aviation Services is part of the strategy of managing
and developing Saab's regional aircraft business after implementing an
insurance solution. Income from the business will be currently accounted
for after that the cost for the basic technical resource and the deficit
in the leasing business have been covered by the termination reserve.
Project interest on non-utilized advance payments, accounted for in the
gross margin, amounted to SEK 31 m. (48).
Operating expenses are generally somewhat lower compared to the same
period in the previous year. Other operating income during both the
present and previous years consist mainly of capital gains, trading
income in Treasury business and currency gains, etc.
Net financial income and expenses amounted to SEK -1 m. (8). The average
return on external investments amounted to 4.87 percent. Income after
financial items amounted to SEK 802 m. (255). Current and deferred taxes
amounted to SEK -144 m. (-73). The tax portion of income after financial
items has been affected by the fact that the capital gain from the
divestment of Saab Marine Electronics has been assessed as tax-free and
that certain capital losses in the USA have been assessed as non-
deductible. The Group's effective tax rate for the year, excluding these
one-recurrent items, is calculated at 29 percent.
Net income for the period was SEK 631 m. (161), corresponding to an
income per share of SEK 5.93 (1.51).
Group order bookings during the first quarter amounted to SEK 3,998 m.
(13,564). Order bookings for the previous year included the South
African order, comprising 28 Gripen aircraft with a value for Saab of
SEK 9.3 billion. First quarter order bookings included further
development of the Swedish command and control system STRIC, an STCA for
air traffic control systems, add-on orders for the Swedish Gripen
program, a simulator for the BILL anti-tank missile system to Austria,
orders in the space area within the Metop meteorological program and
other projects, a three-year agreement covering maintenance on
Crossair's Saab 2000 aircraft and an order to Saab TransponderTech for a
network solution for automatic information systems (AIS) providing
coverage of Sweden's entire coastline. The order backlog at year-end
amounted to SEK 41,180 m., compared to SEK 41,091 m. at the beginning of
Liquidity, finance and investments
Finance and liquidity
Compared to opening balance, liquid funds less liabilities to credit
institutions increased by SEK 789 m. to SEK 4,731 m. (3,942). The
increase is mainly related to the divestments of Marine Electronics and
Celsius Amtec. The Group's net liquidity after deduction for allocations
to pensions amounted to SEK 1,188 m., compared with SEK 415 m. at the
beginning of the year.
Group equity/assets ratio amounted to 20.9 percent (13.7) compared with
18.2 percent in the opening balance. Shareholders' equity amounted to
SEK 6,387 m. (4,872), corresponding to SEK 60.00 (45.76) per share,
compared with SEK 53.26 at the beginning of the year.
Group cash flow from operating activities continued to be good. Working
capital decreased as a result of utilization of part of last year's
provisions within Dynamics, utilization of advances within Gripen and
payments related to the regional aircraft business. The cash flow from
investments was positive as a result of the divestment of Amtec and
lease assets included therein. Operating cash flow was positive and
amounted to SEK 690 m. (-784).
The year's capital expenditures in property, plant and equipment,
excluding lease assets, amounted to SEK 97 m. (85).
At the end of the period, the number of employees in the Group was
14,845, compared with 15,453 at the beginning of the year. The decrease
is mainly related to the divestment of Saab Marine Electronics and
Saab's principal owners are Investor AB, BAE SYSTEMS, the Wallenberg
foundations, Fidelity Funds, AMF, Third AP fund, MFS Funds and Skandia.
The report has been drawn up in accordance with earlier accounting
principles. This means that Saab Marine Electronics and Celsius Amtec
are not included in the Group for any part of 2001. The figures for 2000
have not been adjusted for external acquisitions and divestments made
during 2001. However, sales and operating income by business area for
the year 2000 have been adjusted for internal reorganizations.
Linköping April 26, 2001
President and Chief Executive Officer
This Interim Report has not been subject to review by the Company's
Dates for financial information:
Interim Report for January-June will be published on July 12, 2001
Interim Report for January-September will be published on October 19,
The 2001 Report will be published on February 14, 2002
For further information, please
Agneta Kammeby, Manager Investor tel. +46 13 18
Relations 71 25
Anders Stålhammar, Press Officer tel. +46 13 18
Telephone interview with President
Today, Thursday April 26, approx. tel. +46 13 18
13.30 - 14.30 71 75
Contact Anders Stålhammar, Press tel. +46 70 889
Today, Thursday April 26, 15.00. tel. +46 13 18
Contact Marita Sidén for 71 49
registration and further information
Interim report can also be accessed on the Internet at www.saab.se
This information was brought to you by BIT http://www.bit.se
The following files are available for download:
http://www.bit.se/bitonline/2001/04/26/20010426BIT00820/bit0002.doc Full Report
http://www.bit.se/bitonline/2001/04/26/20010426BIT00820/bit0002.pdf Full Report