capital markets day 13 may 2015 - saab ab · 2015-05-13 · ericsson microwave systems acquired ....
TRANSCRIPT
Håkan Buskhe President and CEO
24 April 2015
INTERIM REPORT JANUARY-MARCH 2015 Håkan Buskhe President and CEO
13 May 2015
CAPITAL MARKETS DAY
AGENDA
8.00 Breakfast served
8.30 Saab’s business environment, position and strategy (Håkan Buskhe, CEO)
9.15 Saab naval business (Gunilla Fransson, Head of Security and Defence Solutions)
10.00 Break 10.30 Surface radar (Anders Linder, Head of Surface Radar Solutions)
11.00 Gripen – the smart fighter (Ulf Nilsson, Head of Aeronautics)
11.30 Q&A session
12.00 Lunch
13.30 Wrap-up
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.
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GLOBAL DEFENCE MATERIEL MARKET
North America 36%
Latin America 3%
Nordic & Baltic 1%
EMEA3) 27%
Russia1) 4%
China1) 12%
APAC2) 17%
1.0%
2.2%
1.5%
3.0%
1.5%
6.0%
2.7% X%
X%
Share of global defence procurement market, 2016-2020 (constant USD)
Compound annual growth rate, 2016-2020 (constant USD) Source: IHS Group, December 2014
1)Defence market not approached by Saab 2)Excl. China 3)Excl. Russia
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MARKET TRENDS – NON-DEFENCE
• An annual market growth of about 5 per cent • Incl. structures for commercial aircraft,
advanced electronics for critical applications and maintenance of the Saab 340 and Saab 2000
Commercial aeronautics
• Combitech is a Nordic technical consultancy offering technology, environment and security solutions
Technical consulting
• An annual market growth of more than 5 per cent
• Surveillance and situational awareness, solutions for secure, efficient flows at airports, in ports and along coasts as well as emergency response.
Civil security
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MARKET TRENDS
• Strained defence budgets and order delays
• Advantage for cost efficient products
• Increased global instability – military and civil threats and challenges
• Demand for local presence
• Collaborations and alliances require system integration
• Need to safeguard and improve supply chain efficiency
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FINANCIAL GOALS
Sales
Average organic sales growth of 5% per year over a business cycle. In 2014, organic sales declined by -3% (-2).
Operating margin
Average operating margin (EBIT) of at least 10% per year over a business cycle. In 2014, the operating margin (EBIT) was 7.1% (5.7).
Equity/assets ratio
The equity/assets ratio will exceed 30%. At year-end 2014, the equity/assets ratio was 38.5% (44.0).
Dividend
The long-term dividend goal is to distribute 20–40% of net income to the shareholders over a business cycle.
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SUSTAINABLE BUSINESS
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SAAB – ORGANISATION
AERONAUTICS DYNAMICS ELECTRONIC DEFENCE SYSTEMS
SECURITY AND DEFENCE SOLUTIONS
SUPPORT AND SERVICES
INDUSTRIAL PRODUCTS AND SERVICES
BUSINESS AREAS MARKET AREAS
Nordic & Baltic
Latin America
Europe, Middle East
& Africa
Asia Pacific
North America
CEO
GROUP FUNCTIONS
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STRATEGIC PRIORITIES SET 2010
• Profitable growth: ‒ Stay focused on strong markets ‒ Establish stronger local presence in selected markets
• Performance:
‒ Increased focus on execution of operational priorities
• Portfolio: ‒ Invest in product innovation and renewal ‒ Prioritize areas with competitive technology and/or competitive
market position ‒ Acquisitions to strengthen the portfolio in prioritized areas ‒ Actions to strengthen and ensure our unique system
knowledge
• People: ‒ Focus on performance management and become a more
attractive employer
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PROFITABLE GROWTH
2011 2012 2013 2014 2015
• UK and US expansion
• Brazil research centre (CISB)
• Sensis acquired
• Hungary decides to continue operating Gripen until 2026
• HITT acquired
• New market area organisation implemented
• Brazil selected Gripen NG in December 2013 as future fighter jet
• JDA with Boeing on T-X family of training systems
• Expanded radar portfolio
• Carl-Gustaf M4 launched
• Remote Tower certfication in SE
• Design of new generation submarine
• Czech Republic decides to continue operating Gripen until 2027
• Expected order for next generation submarine to Sweden, A26
• Expected order for 36 Gripen to Brazil
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PROFITABLE GROWTH
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2008 2009 2010 2011 2012 2013 2014 2015
SEK
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Order backlog development
Incl. order for Gripen to Brazil
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20
25
30
2008 2009 2010 2011 2012 2013 2014
SEK
bn
Sales
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0%
2%
4%
6%
8%
10%
12%
14%
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30
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
SEK
bn
Sales Sweden Sales ROW Reported EBIT margin
SALES AND EBIT MARGIN, 1998-2014
Acquisition of Celsius in 2000 Acquisition of
Grintek in 2005
Acquisition of EMW
in 2006
Divestment of Saab Space in
2008 Aquisition of
Kockums in 2014
Divestment of share in C3-technologies in 2011
Aquisition of Sensis in 2011
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PERFORMANCE EBIT MARGIN
0%
2%
4%
6%
8%
10%
12%
14%
2008 2009 2010 2011 2012 2013 2014Reported EBIT margin EBIT margin excl. non-recurring items, capitalised and amortised development
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PERFORMANCE DRIVERS
• Project execution
• Cash flow focus
• Operational efficiency and continuous capacity alignment
• Distributed P&L responsibility
• Transparency and accountability
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OPERATING INCOME AND OPERATIONAL CASH FLOW
-2 000
-1 000
0
1 000
2 000
3 000
4 000
5 000
2008 2009 2010 2011 2012 2013 2014
MSE
K
Operational cash flow Operating income (EBIT)
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PORTFOLIO
• R&D: ‒ New and improved surface radars ‒ Carl-Gustaf M4 ‒ Continuous R&D efforts to stay ahead
• Gripen development on track
• Remote tower in operation
• Acquisition of Saab Kockums to strengthen naval offering
• Cooperation with Boeing: - TX - development of trainer aircraft - Ground Launched Small Diameter Bomb
• Bolt-on acquisitions where needed
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AT THE FOREFRONT OF CHANGE
1937 Saab founded
2000 Celsius acquired
2005 Grintek acquired 2006
Ericsson Microwave Systems acquired
2011 Sensis Corp. acquired 2012
HITT acquired
2014 Kockums acquired
1646 Bofors founded
1894 Alfred Nobel acquires Bofors
1948 First Carl-Gustaf order
1998 StriC in operation
1950 Development of fighter radar
1970 Development of Giraffe radar family
1980 Development of Arthur
1990 Sea Giraffe AMB launched
BUILDING STRENGTH THOUGH ACQUISITION
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STRATEGIC ACQUISITION OF SAAB KOCKUMS
• Underwater capability increasingly important in global defence policy
• Saab strategy and Swedish national interest on the same path
• Focus on strengthening Swedish defence capability and Saab’s position in the global market
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CASH FLOW FROM TRANSACTIONS
-2500
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
2010 2011 2012 2013 2014 Total
MSE
K
Cash flow from divestments Funds invested
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PEOPLE
• Attract, retain and develop talents
• Workforce planning and competence development
• Continuous leadership development
• Performance-driven culture
• Promote diversity
• Broaden international footprint
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STRATEGIC PRIORITIES 2010
• Profitable growth: • Stay focused on strong markets • Establish stronger local presence in selected
markets
• Performance: • Increased focus on execution of operational
priorities
• Portfolio: • Invest in product innovation and renewal • Prioritize areas with competitive technology
and/or competitive market position • Acquisitions to strengthen the portfolio in
prioritised areas • Actions to strengthen and ensure our unique
system knowledge
• People: • Focus on performance management • Become a more attractive employer
2013
• Profitable growth: • Gripen • Market area organisation implemented • Strategy and business models adapted to
local requirements • M&A to support growth
• Performance:
• Streamline business processes • Portfolio management process • Improved contract management skills
• Portfolio:
• High-technology cost-efficient products and solutions
• Increased R&D efforts
• People: • Implemented performance management
process • Improved rating as attractive employer in
external surveys • Increase international footprint and diversity
2015
• Profitable growth: • Execute on order backlog • Capitalise on R&D investments • Work close to key customers
• Performance:
• Cash flow focus • Operational efficiency • Continuous improvement of processes • Transparency and accountability
• Portfolio:
• Continued R&D investments • Focus on competitive, attractive and
profitable products
• People: • Continuous leadership development • Performance-driven culture • Promote diversity
2015
• Profitable growth: • Execute on order backlog • Capitalise on R&D investments • Work close to key customers
• Performance:
• Cash flow focus • Operational efficiency • Continuous improvement of processes • Transparency and accountability
• Portfolio:
• Continued R&D investments • Focus on competitive, attractive and profitable products
• People: • Continuous leadership development • Performance-driven culture • Promote diversity
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