Saab’s Results January-March 2020
Saab presents the results for January-March 2020.
Statement by the President and CEO Micael Johansson:
Solid performance in a time of uncertainty
COVID-19 is causing great uncertainty in a difficult time for individuals as well as the global economy. Saab has a substantial order backlog and long-term commitments. This means that the operations are stable and currently the production is continuing at a high speed, while the health of our employees are prioritized. The effect on Saab’s operations has been limited so far, but the uncertainty for 2020 has increased. Our efforts to manage the challenging circumstances is proceeding in a proactive and structured way.
The focus of our work has been to ensure readiness and ability to continue delivering on our major projects. The defence business is showing a stable development, while the civil business has been affected by the sharp decline in demand related to the civil aviation industry. During the quarter, Saab took measures to mitigate future effects of COVID-19. Shorter working hours was implemented to adjust capacity within the business area IPS. In addition, Saab strengthened its financial flexibility by signing a new revolving credit facility.
Given the current disruption to the global economy, Saab cannot rule out a future impact on its business, as regards supply chains, delivery and new potential orders. Due to the uncertainty related to the scope and duration of the disruption, the previous forecast for the full-year 2020 can currently not be reconfirmed. Saab is, however, entering the second quarter with a strong order backlog, which supports a significant portion of this year’s sales. Focus remains on the execution of major projects and deliveries for the year. Saab has a robust financial position in terms of capital and liquidity. For 2020, the aim remains that operational cash flow will be positive. Saab is continuing to execute on its strategic priorities and remains committed to its long-term goals of sales growth and profitability.
Orders
Order bookings in the first quarter showed an increase by 8 per cent to SEK 4,823 million (4,482). The volume of small orders increased by 4 per cent. These bookings included orders within Training and Simulation for the British Army, radars for the U.S. and modification of Visby-class corvettes for Sweden.
Sales and operating income
Sales in the first quarter amounted to SEK 8,040 million (8,496). Major programmes were executed on schedule. The lower volumes is explained by fewer planned deliveries within Dynamics and lower level of planned project completions within Aeronautics.
Operating income amounted to SEK 560 million (591) with a margin of 7.0 per cent (7.0). Profitability was in line with previous year, despite negative impact on the civil business. In the quarter, important steps in the Gripen project with the start of the production of Gripen F were taken. In addition, Saab started production of its parts for the trainer aircraft T-7A.
Operational cash flow
Operational cash flow amounted to SEK -1,582 million (-1,932). The negative cash flow in the quarter was due to continued project completions and less milestone payments in the major programmes, in addition to preparations for upcoming deliveries within Dynamics.
Outlook statement for 2020
Due to the uncertainty related to the scope and duration of the COVID-19 disruption, the previous forecast for the full-year 2020 can currently not be reconfirmed. Saab’s previously delivered outlook for the full year was an organic sales growth in line with the long-term target of 5% and an improved operating margin compared to 2019.
Financial highlights
| MSEK | Jan-Mar 2020 | Jan-Mar 2019 | Change, % | Full Year 2019 |
| Order bookings | 4,823 | 4,482 | 8 | 27,216 |
| Order backlog | 90,234 | 97,401 | -7 | 93,293 |
| Sales | 8,040 | 8,496 | -5 | 35,433 |
| Gross income | 1,880 | 1,851 | 2 | 8,035 |
| Gross margin, % | 23.4 | 21.8 | 22.7 | |
| EBITDA | 914 | 919 | -1 | 4,305 |
| EBITDA margin, % | 11.4 | 10.8 | 12.1 | |
| Operating income (EBIT) | 560 | 591 | -5 | 2,937 |
| Operating margin, % | 7.0 | 7.0 | 8.3 | |
| Net income | 342 | 397 | -14 | 2,025 |
| of which Parent Company’s shareholders’ interest | 334 | 398 | -16 | 1,983 |
| Earnings per share after dilution, SEK ¹⁾ | 2.50 | 2.97 | 14.81 | |
| Return on equity, % ²⁾ | 9.3 | 8.6 | 10.0 | |
| Operational cash flow | -1,582 | -1,923 | -1,300 | |
| Free cash flow | -1,700 | -2,137 | -2,036 | |
| Free cash flow per share after dilution, SEK | -12.71 | -15.93 | -15.20 | |
| ¹⁾ Average number of shares after dilution | 133,701,893 | 134,137,373 | 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/
Saab’s Interim Report January-March 2020 Presentation
Saab’s CEO Micael Johansson and CFO Magnus Örnberg will present the Saab interim report for January-March 2020.
Date: Friday, 24 April 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/200424
Conference call:
Please, dial in using one of the numbers below.
Sweden: +46 8 566 427 05
United Kingdom: +44 333 300 9032
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
Saab Press Centre,
+46 (0)734 180 018
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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 24 April 2020 at 07.30 (CET).
