saab year-end report 2017 presentation · order bookings & backlog per ba 0 2 4 6 8 10...
TRANSCRIPT
MARKET DEVELOPMENT
• High global spending on defence and security
• Geopolitical tensions and improving economic conditionsdriving factors for increased spending
• Global defence spending in 2018 expected to increase vs 2017
• The US and Europe expected to grow defence budgets
• Several European countries estimated to meet the NATO target of 2 per cent of GDP spending on defence in 2018
• Next generation technologies in focus
• Cyber security
2
HIGHLIGHTS 2017
• High interest globally in Saab offering
• Several strategic partnerships formed to strengthenlocal market position
• Offers US, based production capability for T-X traineraircraft, if Boeing/Saab selected*
• Slovakia became first customer to deploy the Carl-Gustaf M4 System
• Australia pointed to Saab for Combat Management Systems (CMS) in future Naval platforms
3
Sweden45%
RoE17%
North America
9%
Latin America
3%
Asia18%
Africa2%
Australia, etc6%
Order bookings
Sweden37%
RoE9%
North America
4%
Latin America
35%
Asia12%
Africa1%
Australia, etc2%
Order backlog
*Saab together with Boeing are competing to win the tender process to supply the United States Air Force with an advanced trainer aircraft
MARKET
HIGHLIGHTS 2017
4
• Strong order bookings, increase of 41 per cent y-o-y*
• Strengthened sales and operating income
• All business areas improved sales
• Improved operating margin
• Good cash flow; strong balance sheet
• Taken a step towards our long-term operating margintarget of 10 per cent
PERFORMANCE
*Year-over-year
HIGHLIGHTS 2017
5
• 23 per cent of sales invested in R&D
• Succesful first flight Gripen E in June; supersonic flight in October
• Order for New Generation anti-ship missile system from Sweden (FMV*)
• Saab Digital Air Services, provide remote digital air traffic control to further airports in Sweden
• Order for delivery of a Special Purpose Ship for Signal Intelligence (SIGINT) to Sweden
*The Swedish Defence Material Administration
INNOVATION
FINANCIAL HIGHLIGHTS YEAR-END 2017
7
0
5
10
15
20
25
30
35 Sales
FY 2016 FY 20170
0,5
1
1,5
2
2,5
3 Operating Income
FY 2016 FY 2017
BSEK
BSEK
BSEK
BSEK
0
5
10
15
20
25
30
35Order Bookings
FY 2016 FY 20170
20
40
60
80
100
120
Order Backlog
FY 2016 FY 2017
21.8
30.8
28.631.4
107.6 106.8
1.8
2.2
EBIT-margin 6.3 6.9
+41%
+10%
CONTINUED EFFICIENCY IMPROVEMENT
• Continuously focus on efficient project execution
• Digitalisation drives efficiency improvements‒ Automation‒ IT-infrastructures‒ Aligned organisational setup
• Focus on improved cash conversion
• Shorten lead-times
8
OUTLOOK STATEMENT 2018
9
• Sales growth in 2018 is expected to be in line with
Saab’s long-term goal: annual organic 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 further step closer to its financial
goal: an operating margin of 10 per cent over a
business cycle.
LONG-TERM FINANCIAL GOALS
10
Organic sales growthaveraging 5 per cent annually over a business cycle.
Operating margin afterdepreciation and amortisation(EBIT) of at least 10 per cent annually over a business cycle.
Equity/assets ratio of over 30 per cent.
5%
10%
>30%
• Focus on areas with strong market position• Strengthen position in areas with growth
possibilities• Local partnerships
• Project execution• Operational excellence and portfolio mgt• Continuoulsy develop leaders and employees
• Further strengthen core technology areas• Invest in research and development• Diversity drives innovation
MA
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RFO
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INN
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SUMMARY 2017
• Strong order backlog; good level of medium-sized order bookings
• Continued strong sales growth, sales increase in all business areas
• Strengthened operating margin; Dynamics, airborne surveillance operations and support business good margin development
• Good cash flow, with large milestone payments related to large projects received
• Balance sheet strong
12
FINANCIAL KEY DATA
13
MSEK FY 2017 FY 2016 Change
Order Bookings 30,841 21,828 41
Order Backlog 106,849 107,606 -1
Sales 31,394 28,631 10
Operating Income 2,155 1,797 20
operating margin, % 6.9 6.3
Net Income 1,438 1,175 22
Operational Cash Flow 1,388 2,603
Free Cash Flow 852 2,359
ORDER BACKLOG
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Order Backlog Duration BSEK
31 Dec 2017 31 Dec 2016 31 Dec 2015
2018 25.0 2017 24.5 2016 21.8
2019 20.0 2018 17.0 2017 15.9
2020 17.0 2019 13.5 2018 12.3
2021 17.0 2020 15.8 2019 11.7
2021- 27.8 2020- 36.8 2019- 52.1
Total 106.8 Total 107.6 Total 113.8
ORDER SIZE DISTRIBUTION
15
0
0,5
1
1,5
2
2,5
3
3,5
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
Small orders* Large orders Book-to-bill ratio**
65%
35%
Large Orders
Small Orders*
FY 2017
MS
EK
*Small orders = <MSEK 100**Book-to-bill ratio calculated as 12 months rolling
ORDER BOOKINGS & BACKLOG PER BA
0
2
4
6
8
10
Aeronautics Dynamics Surveillance S&S IPS Kockums
BSEK
FY 2016 FY 2017
16
• Significant orders within the Airborne Early Warning and Control Segment
• Kockums signed contract for modification and upgrading ofSwedish Corvettes
• Dynamics received orders for Next Generation Light Anti-Tank Weapon System (NLAW)
• Continued support and maintenance of Gripen C/D involving several business areas
• Good level of medium sizedorders0
10
20
30
40
Aeronautics Dynamics Surveillance S&S IPS Kockums
BSEK
FY 2016 FY 2017
Order Bookings
Order Backlog60
SALES PER BUSINESS AREA
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
Aeronautics Dynamics Surveillance S&S IPS Kockums
MS
EK
FY 2016 FY 2017
+7%
+22%
+12%
+17%
17
• Sales increase in all business areas
• Dynamics delivering growth from record high order backlog
• Support & Services had strong growthin airborne surveillance operations
• Combitech, part of IPS, deliveredstrong growth
+2%
+5%
OPERATING INCOME PER BUSINESS AREA
0
100
200
300
400
500
600
700
800
Aeronautics Dynamics Surveillance S&S IPS Kockums
MS
EK
FY 2016 FY 2017
5.9 7.4 3.7 3.4
18
• Substantial growth in operating incomeand margin for Dynamics, Support and Services and Surveillance
• Higher activity level in operations related to airborne surveillancesystems
• Support business strong profitability
• Lower operating earnings related to Gripen C/D due to changed projectmix
EBIT Margin 7.5 6.6 9.1 10.9 8.9 10.9 5.8 5.8
-2 000
-1 000
0
1 000
2 000
3 000
4 000
Cash Flow from Operating Activities before Changes in Working Capital
Change in Working Capital
Investing Activities
Tax and OtherFinancial Items
CASH FLOW 2017
19
MSEK
Cash Flow from Operating Activities before Changes in Working Capital 3,593
Change in Working Capital -73
Investing Activities -2,132
Operational Cash Flow 1,388
Tax and Other Financial Items -356
Acquisitions and Sale of Subsidiaries and Other Financial Assets -180
Free Cash Flow 852
Acquisitions and Saleof Subsidiaries and Other FinancialAssets
MS
EK
FINANCIAL POSITION
20
32%Equity/Assets
Ratio
MSEK
Net Liquidity (+) / Net Debt (-), 31 December 2016 -1,836
Cash Flow from Operating Activities 3,164
Change in Net Pension Obligation -222
Net Investments -2,132
Dividend -559
Currency Impact, Unrealised Results from Financial Investments and Acquisition of operations -249
Net Liquidity (+) / Net Debt (-), 31 December 2017 -1,834
Net Pension Obligation, 31 December 2017 2,646
Total Interest-Bearing Assets, 31 December 2017 -468
Liquidity 344
133Equity per Share
(SEK)
FOCUS 2018
• Continued focus on execution of large
projects – project management
• Build order backlog in selected areas
• Drive efficiency improvements throughout
the organisation
‒ Functional and operational excellence
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