Saab’s Results January-June 2020
Saab presents the results for January-June 2020.
Statement by the President and CEO Micael Johansson:
Strong orders and continued good profitability
During the second quarter of 2020, the COVID-19 pandemic had a major impact on people, countries and companies around the world. The situation affects Saab as well, but our defence business remains strong. Our civil business, on the other hand, is facing a larger impact from the pandemic, with demand in civil aviation being significantly down. Despite these challenges, Saab showed a strong performance in the second quarter and results for the first half-year were in line with last year.
Since the COVID-19 outbreak, Saab has effectively utilised modern technology to interact with existing and new customers. This enabled further increases in orders during the quarter and successful execution of key milestones. A number of measures were taken to adjust costs in operations that have been adversely impacted by the ongoing crisis. This work is expected to continue in 2020. Given the ongoing pandemic, Saab cannot however rule out further impact on its business, particularly in the supply chain. Saab is entering the third quarter with a strong order backlog, which continues to support a significant portion of this year’s expected sales. For 2020, the aim remains that operational cash flow will be positive.
Saab continues to execute on its strategy with a focus on further internationalisation and investments in the product portfolio’s core areas. Focus is also on project execution and Saab remains committed to its long-term financial goals for growth and profitability.
Orders
Order bookings in the first half of 2020 increased by 45 per cent to SEK 14,070 million (9,710). The increase was a result of continued demand for defence products and solutions, where Saab in this challenging time, signed both large and mid-sized orders. Growth in small orders was 9 per cent. Orders in the second quarter included support contracts for both Gripen and SK60 for Sweden, orders for Airborne Early Warning and Control (AEW&C) systems and orders from the U.S., Estonia and Latvia for Carl-Gustaf systems.
Sales and operating income
Sales in the first half of 2020 were in line with the same period in 2019 at SEK 16,876 million (16,941). In the second quarter, Saab reported sales growth of 5 per cent driven by good project execution and increased deliveries in several business areas.
Operating income amounted to SEK 1,212 million (1,221) in the first half of the year, corresponding to a margin of 7.2 per cent (7.2). The negative impact on the civil business was offset by higher sales volumes within the defence business and cost reductions.
During the quarter, Saab delivered the first GlobalEye Swing Role Surveillance System to the United Arab Emirates. In addition, the first flight trials were completed with the new fighter
X-band AESA radar. During the quarter, the partnership with the UK regarding the Future Combat Air System (FCAS) was intensified and new studies were conducted.
Outlook statement
Due to uncertainty related to the scope and duration of COVID-19, it was stated in the first quarter interim report of 2020 that the previous forecast for the full-year 2020 could not be confirmed. Saab reiterates this assessment.
Financial highlights
| MSEK | Jan-Jun 2020 | Jan-Jun 2019 | Change, % | Q2 2020 | Q2 2019 | Change, % | Full Year 2019 |
| Order bookings | 14,070 | 9,710 | 45 | 9,247 | 5,228 | 77 | 27,216 |
| Order backlog | 90,458 | 94,236 | -4 | 93,293 | |||
| Sales | 16,876 | 16,941 | 0 | 8,836 | 8,445 | 5 | 35,433 |
| Gross income | 3,711 | 3,788 | -2 | 1,831 | 1,937 | -5 | 8,035 |
| Gross margin, % | 22.0 | 22.4 | 20.7 | 22.9 | 22.7 | ||
| EBITDA | 1,918 | 1,893 | 1 | 1,004 | 974 | 3 | 4,305 |
| EBITDA margin, % | 11.4 | 11.2 | 11.4 | 11.5 | 12.1 | ||
| Operating income (EBIT) | 1,212 | 1,221 | -1 | 652 | 630 | 3 | 2,937 |
| Operating margin, % | 7.2 | 7.2 | 7.4 | 7.5 | 8.3 | ||
| Net income | 860 | 826 | 4 | 518 | 429 | 21 | 2,025 |
| of which Parent Company’s shareholders’ interest | 855 | 831 | 3 | 521 | 433 | 20 | 1,983 |
| Earnings per share after dilution, SEK ¹⁾ | 6.40 | 6.20 | 3.90 | 3.23 | 14.81 | ||
| Return on equity, % ²⁾ | 10.0 | 10.5 | 10.0 | ||||
| Operational cash flow | 235 | -2,702 | 1,817 | -779 | -1,300 | ||
| Free cash flow | 22 | -3,126 | 1,722 | -989 | -2,036 | ||
| Free cash flow per share after dilution, SEK | 0.16 | -23.32 | 12.89 | -7.38 | -15.20 | ||
| ¹⁾ Average number of shares after dilution | 133,690,023 | 134,064,875 | 133,625,118 | 134,039,937 | 133,929,292 | ||
| ²⁾ Return on equity is measured over a rolling 12-month period. |
For more information and explanations regarding the usage of these key ratios, please see http://saabgroup.com/investor-relations/financial-data/key-ratios/
Press and analyst meeting
Saab is pleased to invite press, investors and financial analysts to a press and analyst meeting where President and CEO Micael Johansson and acting CFO Thomas Hendel present the Saab interim report for January-June 220.
Date: Friday, 17 July at 10:00 (CET).
The report is published at 07.30 a.m. (CET) the same day at http://www.saabgroup.com.
You are welcome to 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/200717
Conference call:
Please, dial in using one of the numbers below.
Sweden: +46 8 566 427 05
United Kingdom: +44 333 300 9032 (WITH PIN: 94196298#)
United States: +1 833 526 8381
The interim report, the presentation material and the webcast will be available on http://www.saabgroup.com/investor-relations.
For further information, please contact:
Merton Kaplan, Head of Investor Relations
+46 (0)734 182 071
merton.kaplan@saabgroup.com
Ann Wolgers, Press Officer
Saab Press Centre,
+46 (0)734 180 018
presscentre@saabgroup.com
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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, on 17 July 2020 at 07.30 (CET)
