Saab’s Results January-September 2016
Defence and security company Saab presents the results for January-September 2016.
Statement by the President and CEO Håkan Buskhe:
Growing turmoil around the world continues to impact the defence market and the civil security market. We are closely following market developments and the global trend toward increased investment in defence and security. Demand is clearly growing for cost-efficient systems and solutions that quickly increase operational capabilities. At the same time, technological development continues, with evermore digitalisation and automation within the defence industry. For Saab, with a large part of its operations in software development, this creates opportunities to work even more innovatively and effectively.
Order bookings and sales
Order bookings in the first nine months were in line with 2015, excluding: the Gripen contract with Brazil, the order of type A26 submarines and a mid-life upgrade for two Gotland-class submarines to Sweden, which were received then. Order bookings for the third quarter were mainly driven by important small and medium-sized deals. Two examples are the orders for the latest version of the RBS 70 air defence system and the airport group Swedavia’s continued use of SAFE as its command and control platform for the control centre at its Swedish airports.
Order bookings amounted to MSEK 14,960 (62,599).
The order backlog at the end of the period amounted to MSEK 109,521 (105,486).
Sales in the first nine months increased by 15 percent (16 per cent organic growth) to MSEK 19,615 (17,116). The increase was again mainly due to: the Gripen programme, an order in 2015 for GlobalEye, a higher level of orders in Dynamics and the development of the A26 submarine.
Operating income amounted to MSEK 837 (553) and the operating margin was 4.3 per cent (3.2). The operating margin strengthened in line with our expectations.
Operating income was again adversely affected by investments in the development of a new jet trainer together with Boeing (T-X program), as well as by several major projects in early stages where they normally generate lower profit.
Much of our focus is on execution of the major projects in the order backlog.
In September, Boeing and Saab revealed the first two production aircraft for the U.S. Air Force’s T-X programme.
Operational cash flow amounted to MSEK 1,922 (-1,153). Cash flow was affected in the third quarter by project activity related to advances and milestone payments.
Unchanged outlook for 2016
The outlook for 2016 remains unchanged. The interest in Saab’s cost-efficient products and solutions means increased business opportunities for Saab. At the same time, defence procurements are preceded by processes, which are difficult to assess, both in terms of timing and outcome.
Unchanged outlook statement 2016:
- In 2016, we estimate sales to be in line with Saab’s long-term financial goal: annual organic sales growth of 5 per cent.
- The operating margin 2016, excluding material non-recurring items, is expected to be in line with 2015.
|MSEK||Jan-Sep 2016||Jan-Sep 2015||Change, %||Q3 2016||Q3 2015||Full Year 2015|
|Gross margin, %||22.6||23.1||23.5||22.2||23.9|
|EBITDA margin, %||7.8||7.4||8.0||7.4||10.5|
|Operating income (EBIT)||837||553||51||226||186||1,900|
|Operating margin, %||4.3||3.2||3.9||3.2||7.0|
|Earnings per share after dilution, SEK||4.76||2.45||1.06||0.24||12.79|
|Return on equity, %*||13.8||7.8||11.5|
|Operational cash flow||1,922||-1,153||-2,271||653||-500|
|Free cash flow||1,740||-1,595||-2,311||487||-726|
|Free cash flow per share after dilution, SEK||16.28||-14.99||-21.59||4.57||-6.82|
|* 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 invites to a press and analyst meeting, where CEO Håkan Buskhe and CFO Magnus Örnberg present the Saab January-September interim report 2016.
Date: Tuesday, 25 October at 10:00 (CET)
Address: Grand Hôtel, Blasieholmshamnen 8, Stockholm, Sweden
Venue: New York
You are welcome to participate on site at Grand Hôtel, watch the live webcast or dial in to the conference call. It is possible to post questions also over the web and conference call.
Please, dial in using one of the numbers below:
UK: +44 2030089801
US: +1 6465025116
Sweden: +46 8 56642666
The interim report, the presentation material and the webcast will be available on http://saabgroup.com/investor-relations.
Tel: +46 8 463 02 45
For further information, please contact:
Saab Press Centre,
+46 (0)734 180 018,
Saab Investor Relations, Ann-Sofi Jönsson, +46 (0) 734 187 214
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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.
This 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 25 October 2016 at 07.30 (CET).