Saab Year-End Report 2014


Defence and security company Saab presents the results for 2014.
Statement by the President and CEO Håkan Buskhe:
2014 brought both challenges and significant success for Saab. It was a year
when the company continued to build for the future. Thanks to a long-term
strategy and focus on efficiency, the company is well positioned. Defence
budgets, which have declined in the United States and Western Europe during the
past couple of years, are expected to increase in the coming years. Meanwhile,
the turnaround is expected to be slow and does not have any short-term impact on
Saab.

Platform for future growth
In 2014, an agreement was reached with Brazil regarding development and
production of 36 Gripen NG. This, together with Sweden’s order for 60 Gripen in
2013, makes Saab one of few aircraft manufacturers that are developing a new
generation of fighters. This has strengthened Gripen’s position in the global
market. The acquisition of ThyssenKrupp Marine Systems (Saab Kockums) in July
gives Saab the ability to develop, produce and deliver military solutions for
land, air and sea.

Saab continues to invest in research and development to ensure long-term growth.
In 2014 total investments in research and development amounted to approximately
25 per cent of sales. A number of new products with significant potential were
launched during the year; a new generation of the weapon system Carl-Gustaf and
five new surface radars for land and sea. Additional investments were made in
the development of trainers for the coming T-X procurement process in the United
States.

Strong order backlog, challenging market
At year-end, the order backlog was in line with 2013. Increased competition and
prolonged decision making processes had a negative impact on order bookings in
2014, especially within the business areas Dynamics and Electronic Defence
Systems. Order bookings in 2014 amounted to MSEK 22,602 (49,809). During 2013,
development orders for Gripen E amounting to SEK 29.8 billion were received.

Sales amounted to MSEK 23,527 (23,750) with an organic sales decline of -3 per
cent, during 2014. A lower level of activity was seen especially within
Dynamics, where market conditions have been challenging in recent years. This
was compensated by growth within the business area Security and Defence
Solutions, partly due to the acquisition of Saab Kockums.

Reported operating income amounted to MSEK 1,659 (1,345) with an operating
margin of 7.1 per cent (5.7).

Completed efficiency measures
The efforts to constantly improve operations and make them more efficient
continue. The efficiency measures announced in 2013 were completed and the
target of improving efficiency by approximately MSEK 500 was reached in 2014.
This has predominantly been achieved by capacity adjustments and by reducing the
total number of FTE’s and external consultants by approximately 950 since the
beginning of 2013, excluding the acquisition of Saab Kockums and the
deconsolidation of Saab Grintek Technologies (Pty) Ltd in South Africa. The
efficiencies have enabled additional room for investments primarily in
development and marketing activities during the year.

We had a strong operational cash flow in the fourth quarter and came close to
reaching our ambition of positive cash flow for the second half of the year. The
operational cash flow for 2014 however amounted to MSEK -1,197 (-639), as a
result of timing differences in deliveries and milestone payments. During the
fourth quarter the operational cash flow amounted to
MSEK 753 (548).

Earnings per share after dilution amounted to SEK 10.78 (6.79).

The Board proposes a dividend for 2014 of SEK 4.75 (4.50) per share.

Outlook statement 2015

  ·
In 2015, we estimate sales to increase more than Saab’s long-term goal: annual
organic sales growth of 5 per cent.

  ·
The operating margin 2015 excluding material non-recurring items is expected to
be in line with the operating margin in 2014. In 2015, increased internally
funded research and development efforts within Aeronautics will have a negative
impact on the operating margin.

Financial highlights

MSEK               Full Year 2014  Full Year 2013  Change, %  Q4 2014  Q4 2013
Order bookings     22,602          49,809          -55        12,403   24,780
Order backlog      60,128          59,870          -
Sales              23,527          23,750          -1         7,425    7,279
Gross income       6,077           6,328           -4         1,851    1,853
Gross margin, %    25.8            26.6                       24.9     25.5
EBITDA             2,523           2,367           7          987      810
EBITDA margin, %   10.7            10.0                       13.3     11.1
Operating income   1,659           1,345           23         758      534
(EBIT)
Operating margin,  7.1             5.7                        10.2     7.3
%
Net income         1,168           742             57         586      287
Earnings per       10.86           6.98                       5.49     2.64
share before
dilution, SEK
Earnings per       10.78           6.79                       5.45     2.57
share after
dilution, SEK
Return on equity,  9.9             6.3
%*
Free cash flow **  -1,094          -1,460                     1,006    553
Free cash flow     -10.23          -13.38                     9.47     5.07
per share after
dilution, SEK
* The return on
equity is
measured over a
rolling 12-month
period.
** As of 1
January 2014,
free cash flow is
reported for the
Group. It was
previously named
operating cash
flow.
Comparative
numbers for 2013
have been
restated
according to the
changed
accounting
principles for
joint
arrangements
(IFRS 11). See
note 13. Where
applicable,
comparative
numbers for 2013
and for 2014 for
some business
areas have been
restated
following
organisational
and structural
changes, see
notes 14 and 15.
The latter has no
impact on the
Group as a whole.

Press and analyst meeting
Saab invite to a press and analyst meeting, where CEO Håkan Buskhe and CFO
Magnus Örnberg present the 2014 year-end result.

Date: Tuesday, 10 February at 10:00 (CET)
Address: Grand Hôtel, Blasieholmshamnen 8, Stockholm, Sweden
Venue: New York

You are welcome to participate on site at Grand Hôtel, watch the live webcast or
dial in to the conference call. It is possible to post questions also over the
web and conference call.

Live webcast:
http://saab-interimreport.creo.se/150210/

Conference call:
Please, dial in using one of the numbers below.
UK: +44 2034281402
SE: +46 856642692
US: +1 8557532235

The interim report, the presentation material and the webcast will be available
on http://www.saabgroup.com/en/InvestorRelations.

R.S.V.P
E-mail: marie.bergstrom@saabgroup.com
Tel: +46 8 463 00 36

For further information, please contact:
Saab Press Centre,
+46 (0)734 180 018,
presscentre@saabgroup.com

www.saabgroup.com
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Follow us on twitter: @saab

Saab serves the global market with world-leading products, services and
solutions within military defence and civil security. Saab has operations and
employees on all continents around the world. Through innovative, collaborative
and pragmatic thinking, Saab develops, adopts and improves new technology to
meet customers’ changing needs.

The information is that which Saab AB is required to declare by the Securities
Business Act and/or the Financial instruments Trading Act. The information was
submitted for publication on 10 February 2015 at 07.30 (CET).

Anhänge

CU 15-005 Saab Year-End Report - E.pdf 02109617.pdf