Saab Year-End Report 2018
Saab presents the results for 2018.
Statement by the President and CEO Håkan Buskhe:
Strengthened market position provides future possibilities
2018 was a year in which Saab strengthened its market position. A number of important orders were received, one example of which is the order from Boeing related to the T-X trainer aircraft for the U.S. Air Force. The larger development projects in the order backlog progressed according to plan and a number of important milestones were reached in the development of the new generation Gripen for Sweden and Brazil, the GlobalEye Airborne Early Warning & Control system and the upgrade of the HSwMS Gotland submarine with successful results.
In addition, a series of measures were identified and implemented to bolster the company long-term and raise productivity. They included operating efficiencies and a plan to adapt the product portfolio, improve marketing efficiency and increase digitisation and automation. In the third and fourth quarters, a large share of the identified efficiencies were completed.
At the same time, global security concerns increased and we are seeing a greater focus on defence and security issues in many countries. Interest in Saab’s offering is high. In the fourth quarter 2018, a SEK 6 billion rights issue was carried out to support Saab’s continued growth journey. The strengthened balance sheet provides possibilities and a basis from which to create additional growth ahead.
Order bookings and sales
Order bookings amounted to SEK 28 billion in 2018 with increasing medium-sized and small orders. Saab received a major order for Gripen development and operational support in Sweden worth SEK 1.4 billion in the year. During the comparative year 2017, Saab’s large orders totalled SEK 10.7 billion.
Sales amounted to SEK 33.2 billion with organic growth of 4 per cent.
Operating income and non-recurring items
Operating income in 2018 amounted to SEK 2,266 million (2,250) and the operating margin was 6.8 per cent (7.1). Adjusted for non-recurring items of SEK 298 million, operating income amounted to SEK 2,564 million with an operating margin of 7.7 per cent.
Operational cash flow
Operational cash flow amounted to SEK -2,424 million (1,388) in 2018. In the fourth quarter, it amounted to SEK 2,773 million (2,146). In 2019, operational cash flow will continue to be negatively affected by timing differences in payment flows for major projects.
Dividend
The Board of Directors proposes a dividend for 2018 of SEK 4.50 per share (4.40). The dividend for 2017 has been restated for outstanding shares as of 31 December 2018.
Outlook statement for 2019
We estimate that sales growth in 2019 will be in line with Saab’s long-term financial goal: annual organic sales growth of 5 per cent.
The operating margin in 2019, excluding material non-recurring items, is expected to improve compared to 2018, bringing Saab a step closer to its long-term financial goal: an operating margin of 10 per cent per year over a business cycle.
Financial highlights
| MSEK | Full Year 2018 | Full Year 2017 1) |
Change, % | Q4 2018 | Q4 2017 1) |
| Order bookings | 27,975 | 30,841 | -9 | 10,792 | 6,586 |
| Order backlog | 102,184 | 107,233 | -5 | ||
| Sales | 33,156 | 31,666 | 5 | 11,018 | 10,150 |
| Gross income | 7,764 | 7,543 | 3 | 2,788 | 2,518 |
| Gross margin, % | 23.4 | 23.8 | 25.3 | 24.8 | |
| EBITDA | 3,182 | 3,089 | 3 | 1,654 | 1,197 |
| EBITDA margin, % | 9.6 | 9.8 | 15.0 | 11.8 | |
| Operating income (EBIT) | 2,266 | 2,250 | 1 | 1,422 | 995 |
| Operating margin, % | 6.8 | 7.1 | 12.9 | 9.8 | |
| Adjusted operating income | 2,564 | 2,250 | 14 | 1,422 | 995 |
| Adjusted operating margin, % | 7.7 | 7.1 | 12.9 | 9.8 | |
| Net income | 1,366 | 1,508 | -9 | 1,008 | 603 |
| Of which Parent Company’s shareholders´ interest |
1,313 | 1,477 | -11 | 982 | 601 |
| Earnings per share after dilution, SEK 2) | 11.21 | 12.70 | 8.23 | 5.16 | |
| Return on equity, % 3) | 8.1 | 10.9 | |||
| Operational cash flow | -2,424 | 1,388 | 2,773 | 2,146 | |
| Free cash flow | -3,195 | 852 | 2,504 | 1,772 | |
| Free cash flow per share after dilution, SEK | -27.27 | 7.33 | 21.00 | 15.21 | |
| 1) 2017 has been restated according to the new accounting principles regarding revenue recognition (IFRS 15). | |||||
| Number of shares excluding treasury shares as of 31 December adjusted for the rights issue | 133,482,880 | 115,685,451 | |||
| 2) Average number of shares after dilution | 117,144,915 | 116,310,466 | 119,253,394 | 116,516,136 | |
| 3) 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 to a press and analyst meeting, where CEO Håkan Buskhe and CFO Magnus Örnberg present the Saab Group 2018 year-end result.
Date: Friday, 15 February at 10:00 (CET)
Address: Saab, Olof Palmes Gata 17, 5th floor, Stockholm, Sweden
The report is published at 07.30 a.m. (CET) the same day.
You are welcome to participate on site at Saab, 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/190215
Conference call:
Please, dial in using one of the numbers below.
Sweden: +46856642707
United Kingdom: +443333009272
United States: +16467224956
The interim report, the presentation material and the webcast will be available on http://www.saabgroup.com/investor-relations.
R.S.V.P.
E-mail: marie.bergstrom@saabgroup.com
Tel: +46 8 463 02 45
For further information, please contact:
Ann-Sofi Jönsson, Head of Investor Relations
+46 734 18 72 14
Ann-sofi.jonsson@saabgroup.com
Saab Press Centre,
Ann Wolgers, Press Officer
+46 (0)734 18 70 52
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 15 February 2019 at 07.30 (CET).