Saab’s results January-June 2018
Saab presents the results for January-June 2018.
Statement by the President and CEO Håkan Buskhe:
Efficient project execution in focus
Demand for high-tech defence and security solutions remained strong in the first half of 2018. Security concerns and rapid technological developments have led to increased investment in defence materiel in many regions of the world.
During the first half of 2018, Saab achieved important milestones in several major development projects. This includes the successful first flight of the new generation GlobalEye Airborne Early Warning & Control system and the launch of the Swedish Navy’s HMS Gotland submarine after a mid-life upgrade and modification. The Gripen E programme is also progressing as planned. Execution of major projects was a priority for Saab in the first half-year and will remain so going forward.
Order bookings and sales
Order bookings of medium-sized orders were strong in the first half of 2018. In total, order bookings amounted to SEK 12.7 billion. A large order was received during the period for Gripen development and operational support worth SEK 1.4 billion. Large orders received in the same period of 2017 totalled SEK 10.7 billion. Interest in Saab’s products remains high.
Sales amounted to SEK 15.7 billion with organic growth of 1 per cent. The business areas Aeronautics, Surveillance and Kockums saw strong growth driven by increased activity in major projects.
Operating income
Operating income amounted to SEK 905 million (886) and the operating margin was 5.8 per cent (5.8). The operating margin improved during the period within several business areas, and as expected the operating margin was negatively affected within the business area Dynamics by a lower delivery level than in the same period of 2017.
Operational cash flow amounted to SEK -2,750 million (-443), according to plan. The main reason for the negative cash flow was a high level of capital employed within the Gripen operations and utilisation of previously received advances and milestone payments.
The financial net had a negative impact on net income due to changes in market value of derivatives related to hedged tenders mainly in USD.
Performance
Our efforts to improve efficiency continued in the first half of 2018, at the same time that an analysis is underway to identify measures to further increase productivity. The aim is to launch them this autumn.
Outlook statement for 2018: (unchanged)
We estimate that sales growth in 2018 will be in line with Saab’s long-term financial goal: annual organic sales growth of 5 per cent. The operating margin in 2018, excluding material non-recurring items, is expected to improve compared to 2017, bringing Saab a step closer to its financial goal: an operating margin of 10 per cent per year over a business cycle.
Financial highlights
| MSEK | Jan-June 2018 | Jan-June 2017 1) | Change, % | Q2 2018 | Q2 2017 | Full Year 20171) |
| Order bookings | 12,664 | 20,554 | -38 | 6,529 | 10,853 | 30,841 |
| Order backlog | 104,473 | 112,769 | -7 | 107,233 | ||
| Sales | 15,719 | 15,358 | 2 | 7,953 | 7,772 | 31,666 |
| Gross income | 3,537 | 3,469 | 2 | 1,799 | 1,686 | 7,543 |
| Gross margin, % | 22.5 | 22.6 | 22.6 | 21.7 | 23.8 | |
| EBITDA | 1,323 | 1,314 | 1 | 669 | 568 | 3,089 |
| EBITDA margin, % | 8.4 | 8.6 | 8.4 | 7.3 | 9.8 | |
| Operating income (EBIT) | 905 | 886 | 2 | 458 | 347 | 2,250 |
| Operating margin, % | 5.8 | 5.8 | 5.8 | 4.5 | 7.1 | |
| Net income | 450 | 660 | -32 | 199 | 264 | 1,508 |
| of which Parent Company’s shareholders’ interest | 425 | 643 | -34 | 183 | 253 | 1,477 |
| Earnings per share after dilution, SEK 2) | 3.95 | 5.99 | 1.70 | 2.36 | 13.75 | |
| Return on equity, % 3) | 9.7 | 11.2 | 10.9 | |||
| Operational cash flow | -2,750 | -443 | -539 | -1,429 | 1,388 | |
| Free cash flow | -3,192 | -532 | -781 | -1,429 | 852 | |
| Free cash flow per share after dilution, SEK | -29.66 | -4.96 | -7.25 | -13.30 | 7.93 |
| 1) 2017 has been restated according to the new accounting principles regarding revenue recognition (IFRS 15). | ||||||
| 2) Average number of share after dilution. | 107,634,456 | 107,332,919 | 107,678,230 | 107,423,697 | 107,400,920 | |
| 3) Return on equity is measured over a rolling 12-month period. | ||||||
Press and analyst meeting
Saab invites to a press and analyst meeting, where CEO Håkan Buskhe and CFO Magnus Örnberg present the Saab January-June interim report 2018.
Date: Friday, July 20 at 10:00 (CET).
Address: Saab, Olof Palmes Gata 17, 5th floor, Stockholm, Sweden
The report is published at 07.30 a.m. (CET) the same day.
You are welcome to participate on site at Saab, 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/180720/
Conference call:
Please, dial in using one of the numbers below.
UK: +44 2030089815
SE: +46 8 56642696
US: +1 8557532237
The interim report, the presentation material and the webcast will be available on http://www.saabgroup.com/investor-relations.
R.S.V.P.
E-mail: marie.bergstrom@saabgroup.com
Tel: +46 8 463 02 45
For further information, please contact:
Saab Press Centre,
Ann Wolgers, Press Officer
+46 (0)734 180 018
presscentre@saabgroup.com
Saab Investor Relations
Ann-Sofi Jönsson, +46 (0) 734 187 214
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 such that Saab AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07.30 CET on 20 July 2018.
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