THE 2000 REPORT
Order bookings amounted to SEK 28 billion.
Sales amounted to SEK 17,840 m. (9,053, pro forma 18,018).
Operating income increased to SEK 1,533 m. (1,104, pro forma 1,125).
Earnings per share amounted to SEK 9.75 (8.82, pro forma 6.90).
After-tax return on shareholders equity 20,0% and pre-tax return on capital employed 14,6%.
Proposed dividend per share: SEK 3.00 (2.50). In addition, the Board has today decided to propose to the Annual General Meeting that up to 10 per cent of the companys own shares be made repurchasable.
Conditional acquisition of a 65% holding in the Dutch company Fokker Space.
Financial Risk Insurance Program for the regional aircraft lease portfolio.
Divestment of aircraft engine lease operation in the U.S.
Comment by
the President
"The past year has involved major changes for Saab and has
been characterized by intensive integration, among other things.
The acquisition of Celsius doubled sales and gathered large parts
of the Swedish defense industry under Saab. Against this
backdrop, it is pleasing that we have been able to maintain good
income and order development with an all-time high in both
earnings per share and order bookings.
Order bookings amounted to SEK 28 billion and the order backlog at the end of the period was SEK 41 billion. This corresponds to over two years invoicing. The good level of order development is also strengthened by a series of breakthrough orders signifying strategic advances in important growth areas.
At the same time, we are continuing to streamline the Group. Divesting mature businesses, such as Combitech Network, is also a way of realizing values. In January this year, we sold Marine Electronics to the American company Emerson, an industrially perfect deal that also generated excellent value for our shareholders.
As expected, the fourth quarter was a strong quarter for our core business. At the same time, several activities in Other operations have been divested and in February this year we sold Celsius Amtec, which was part of Celsius Aviation Services. During the quarter, we also implemented an insurance solution for the leasing portfolio of regional aircraft. The insurance means that in practice we have eliminated the market risk in the portfolio and that further administration can be concentrated on increasing the value of our aircraft fleet and thereby the value for Saabs shareholders.
We are able to look back on a busy and successful year. Our core business has a clear focus and we have recently decided to set up a Venture Capital function to help our business areas realize further value from our technical know-how. After delivering a strong performance with a record high earnings per share in the year 2000, I look forward to a performance this year at least on the same level, after a somewhat slow start for the operations."
Important events and structural measures
Acquisition of the
defense group Celsius
In February 2000, Saab stated that the company would fulfil the
public offer for Celsius and on December 31, 2000 Saab became the
owner of all the shares in Celsius. At year-end, the book value
of the shares in Celsius amounted to SEK 5 billion. The
acquisition has brought goodwill of SEK 700 million, which will
be written off over a period of 20 years. The goodwill amount has
been adjusted partly for Celsius share of SPPs
surplus, provisions for restructuring costs, effects of
structural measures decided earlier by Celsius and income from
divestments carried out during 2000.
In connection with the extensive structural measures necessitated through the acquisition of Celsius, a detailed review has been made of certain major projects. We then found that for certain development projects in the torpedo and missiles operations from the former Celsius Group further provisions of SEK 488 m. were necessary. These provisions were charged to income in the third quarter.
During the year, the integration and structuring process has entailed streamlining with the aid of divestments, outsourcing and rationalization in the business areas, closure of the head office functions in Celsius and new management structures. During the fourth quarter, the following operations have been divested: the surface treatment companies Yttec AB and Celsius Nussbaum GmbH, wind pylon manufacture at Kockums Industrier and the 49 per cent holding in Australian Submarine Corporation. In addition, the accredited calibration laboratory in Karlskoga was transferred on January 1, 2001 and in February Celsius Amtec and Celsius Materials Karlskoga AB were sold.
Other acquisitions
and divestments during the fourth quarter
In November, Saab Ericsson Space purchased 65 per cent of the
Dutch company Fokker Space, with access during 2001 provided that
all the necessary licenses are obtained and that the due
diligence will be finalized in a satisfactory way. Saab Ericsson
Space has also acquired a further 13 per cent of Austrian
Aerospace, which is thereby owned to 90 per cent. During the
first quarter of 2001, Saab Marine Electronics was sold to the
American company Emerson for approximately SEK 800 million,
resulting in a capital gain of approximately SEK 650 million and
a positive effect on net cash in the same magnitude as the
purchase sum.
Financial risk
insurance program for Saab Aircraft Leasings regional
aircraft lease portfolio
In November, Saab entered into a financial risk insurance
program, which in practice isolate the performance of the lease
portfolio from future market risk. During 15 years, from 2000,
the policy provides a safeguard against risks such as market
cycles, competition, obsolescence and customer default. The
financial risk insurance program means, that lease income
amounted to USD 1,170 m. after deduction of a first loss of 10
percent or USD 130 m. is now insured. The transaction cost,
including fees to advisers, was USD 37 m. after tax and is
covered by current provisions: therefore, it has not been charged
to the years income. The insurance policy covers 203 of the
302 aircraft in the portfolio. Of the 99 Saab 340 aircraft not
included in the policy, 57 are funded with non-recourse long-term
loans and 42 are covered by asset value insurance issued by EKN,
the Swedish government agency for export guarantees. Saab will
continue to actively manage the portfolio to enhance its value by
maximizing income.
Business
areas
During 2000, Saab consisted of the business areas Saab Systems
and Electronics (formerly Infomatics), Saab Aerospace,
Saab Technical Support and Services, Saab Bofors
Dynamics, Saab Ericsson Space, Celsius Aviation
Services and Other operations. From 2001 the leasing
and customer support activities for Saab regional aircraft,
together with parts of Celsius Aviation Services, will form the
business area Saab Aviation Services.
Saab Systems and
Electronics
The business area focuses on command and control systems,
simulation systems, avionics, electronic warfare and signature
management as well as commercial operations in IT and
electronics. Operations are characterized by high activity in the
export field with sales to over 70 countries. Order bookings
during the year have been very good for most of the business
units, with several market and product breakthroughs both in
Sweden and internationally, and totaled SEK 5,523 m. (pro forma
4,126). During the fourth quarter, order bookings were SEK 2,257
m. and included fire control systems for combat vehicles for
Switzerland and Finland (SEK 750 m.), marine command and control
systems for the United Arab Emirates (SEK 250 m.), laser
simulators and mobile systems for combat training for the USA
(SEK 400 m.), electronic warfare equipment for the Eurofighter
(SEK 135 m.) air surveillance systems for a country in South-east
Asia (SEK 100 m.), and further orders within the ANZAC (ships)
and BCSS (Battlefield Command Support System) programs in
Australia. In November, the UN organ for maritime issues, IMO,
made a decision requiring automatic identification systems (AIS)
to be provided on vessels in the Solas classification from 1 July
2002. This is very positive for business potentials at Saab
TransponderTech, which has already won several important orders
as a result of that decision.
Saab Aerospace
Business area Saab Aerospace develops and manufactures military
aircraft systems, and is a partner and supplier in subsystems for
manufacturers of large commercial aircraft.
The business area produces the Gripen, an integrated and flexible information, command and weapon system that will remain modern for many years to come. Three squadrons of the first of the worlds fourth generation combat aircraft are now operative in the Swedish defense. During 2000, 17 aircraft were delivered to the Swedish Air Force, bringing the total to 98 out of the 204 ordered by the Defence Materiel Administration, FMV.
In March, the first export order for the Gripen was formally received from South Africa, comprising 28 aircraft with a value for Saab of SEK 9.3 billion. Saab has been taking part in the concept study for the A380 Airbus Superjumbo since 1997. In December, Airbus made the final decision to develop the A380 and Saab is now negotiating on participation in the project as a partner and subcontractor. Order bookings were SEK 12,171 m. (pro forma 3,752), of which SEK 575 m. in the fourth quarter included further development and add-on orders for the Gripen.
Saab Technical
Support and Services
The business area focuses on the growing market for high
technology services in aviation, command and control,
information, communications and sensors, and supplies these to
both military and commercial customers. The export share is 11
per cent and 74 per cent of sales refer to military customers.
The business area is dominated by AerotechTelub, which was formed
on January 1, 2000 and is owned to 57 per cent by Saab and 43 per
cent by TietoEnator. AerotechTelub is an advanced service company
primarily oriented towards technical services, operation and
maintenance, and customized system solutions for testing,
simulation, traffic management and information. The business area
also includes Saab Nyge Aero, which is active in aircraft
maintenance, aerial target towing and special flight operations.
During the year, Saab Nyge Aero won a breakthrough order for
modification of amphibious aircraft. Order bookings, which
amounted to SEK 2,672 m. (pro forma 2,099), increased strongly
during the year due to acquisitions and a large number of smaller
orders. During the fourth quarter, order bookings amounted to SEK
585 m. From 2001, Celsius Aviocomp, which is primarily active in
component maintenance for commuter aircraft, and CSM
Materialteknik form part of the Business area.
Saab Bofors
Dynamics
Saabs activities in precision engagement have been gathered
under business area Saab Bofors Dynamics, which develops and
produces missile systems, portable anti-armor systems and
underwater systems for land, sea and air applications. The
business area has a long presence in many export markets
throughout the world and in 2000 sales were distributed among
almost 40 countries. During the year, intensive integration work
has been carried on in the business area to realize cost
synergies and focus the business. This produced a visible effect
from the third quarter. Both the international collaboration
projects, IRIS-T and Taurus, are at the end of their development
phase and negotiations have been started concerning production
contracts. Negotiations between the industry and participating
countries on the development contract for the Meteor have also
been initiated. Development of the RBS 23 Bamse is in its final
phase and successful test firings have taken place. During the
year, several countries have shown an interest in the RBS 15
anti-ship missile and in December an agreement was signed with
the German company DIEHL on collaboration in production,
maintenance and future upgrading for both the German and Swedish
markets, as well as the export market. Order bookings amounted to
SEK 2,853 m. (pro forma 2,793), of which SEK 245 m. in the fourth
quarter.
Saab Ericsson
Space
Business area Saab Ericsson Space, which is owned to 60 per cent
by Saab and 40 per cent by Ericsson, develops and manufactures
computers, antennas, microwave electronics and mechanical systems
for the space industry. More than 90 per cent of sales go to
export. Sales to commercial telecommunication projects continued
to grow. Other operations comprised publicly financed projects
for organizations such as the European Space Agency (ESA) and
bilateral and Swedish programs. In November, 65 per cent of the
Dutch company Fokker Space was acquired, with access during 2001.
The company specializes in manufacture of solar panels,
robot-guided instruments and structures for launch rockets. The
acquisition makes Saab Ericsson Space Europes largest
subcontractor in space equipment. The acquisition, however,
implies that all the necessary licenses are obtained and that the
due diligence will be finalized in a satisfactory way. During
2000, the most important projects in the institutional market
were SPOT, which is a bilateral project between France and Sweden
in global observation satellites, and the ESA projects METOP for
meteorological satellites and ROSETTA, a scientific satellite. In
the commercial market, the most important projects during the
year have been participation in the Eutelsat and Intelsat
telecommunications satellites, work in the Ariane program and
deliveries of separation systems for a number of launch rockets.
Order bookings, which were good during the year, amounted to SEK
765 m. (706), of which SEK 264 m. during the fourth quarter
including computers for the Ariane 5.
Celsius Aviation
Services
Celsius Aviation Services, CAS, is a commercial aircraft
maintenance company with its focus on the USA. CAS lies outside
the strategy and orientation chosen by Saab for its future.
However, the work of finding a new owner for CAS has proved more
complex than expected, partly as a result of the trade cycle. The
structure of the business has therefore been reviewed and from
2001 Celsius Aviocomp forms part of the business area Technical
Support and Services. For several of the other companies,
discussions are in progress with potential buyers and in February
2001 Celsius Amtec was sold to a Spanish company. The result from
the divestment has been taken against the purchase analysis and
will therefore not affect the income 2001. There will be a
positive effect on net cash of close to SEK 500 m. During the
year, operations have been negatively influenced by a general
business downturn in those markets where CAS operates. Order
bookings amounted to SEK 3,408 m. (2,607) and it is an increase
also in USD.
Other operations
Other operations comprises long-term commitments in the form of
the leasing portfolio and maintenance activities for Saabs
regional aircraft. There are also a number of niche companies. In
order to ensure a long-term capital supply for these niche
companies and to realize values, we are seeking structural
solutions for several of these businesses. Order bookings for
Other operations amounted to SEK 1,361 m. (pro forma 1,004) and
related mainly to spare parts and customer support for the fleet
of Saab 340 and Saab 2000 aircraft.
Future development
Creation of one of
the worlds leading high-tech companies
The European defense industry is characterized by increasing
competition and swelling research and development costs. This has
led to a consolidation and internationalization of the industry
and the formation of large multinational defense companies
operating in a global market. Through the acquisition of Celsius,
Saab has created one of the worlds leading high-tech
companies with operations focused on defense, aviation and space.
At the same time, Saab has become a more comprehensive company in
important parts of the future defense, greatly expanding its
operations in the field of advanced services and increasing its
international presence.
Products and
systems
In systems and defense electronics, Saab now has an
internationally competitive center for developing advanced
defense systems, based partly on information technology, with a
large share of exports. The order backlog for the Gripen is an
important base for future operations. With the order for the RBS
23 Bamse and the decision on the Meteor, the foundation is laid
for an internationally active and firmly established missile
industry at Saab. The decision on the Meteor is also extremely
important for the long-term export potential of the Gripen.
During the past years, Saab has grown both organically and
through acquisitions in the field of advanced technical services,
which we consider to be an interesting future market. The space
industry is currently undergoing major structural changes where
the growth potential is expected to lie in the commercial market
while growth in the institutional market is expected to be
moderate.
Sales, income and orders
Sales
Group sales doubled to SEK 17,840 m. (9,053, pro forma 18,018).
The acquisition of Celsius is the main reason for the increase.
Sales have increased or are on the same level as last year for
principally all companies except business area Saab Bofors
Dynamics. Of sales 62 percent (pro forma 66) were related to
defense. Sales to foreign markets amounted to SEK 8,523 m.
(3.444) or 48 percent (38, pro forma 48) of total sales.
The sales increase in Saab Systems and Electronics is mainly attributable to simulation systems and the commercial operations, while defense electronics was on level with the pro forma figure in the previous year. Sales of Saab Aerospace were on level with the previous year for all three business units. During the year, 17 (16) Gripen aircraft were invoiced, which corresponds with the current delivery plan. Invoicing of one Gripen aircraft more than previous year was offset by a slower rate in the Swedish further development program. The sales increase in Saab Technical Support and Services is attributable to acquisitions within AerotechTelub, as well as to organic growth in the defense-related operations and test systems for the telecommunications industry. The sales decrease for Saab Bofors Dynamics, whose operations were concentrated during the year, is mainly attributable to major deliveries of STRIX during 1999, for which there was no corresponding figure in 2000, and fewer deliveries of anti-armor munitions. Sales of Saab Ericsson Space increased through higher volumes. Sales in Celsius Aviation Services were unchanged in terms of US dollars compared with the preceding year and the increase is thus attributable to the higher dollar rate during 2000.
Other operations increased mainly through volume expansion in customer support to the fleet of Saab 340 and Saab 2000 aircraft, which amounted to SEK 994 m. (666).
Income and
profitability
The increase in operating income, which amounted to SEK 1,533 m.
(1,104, pro forma 1,125), is mainly attributable to improved
income for Saab Systems and Electronics, the result of
structuring work at Saab Bofors Dynamics and capital gains from
value realization of commercial spin-off companies totaling SEK
353 m. During 1999, operating income included a reversal of the
loss risk reserve for the base contract for the Gripen of SEK 135
m., for which there was no corresponding figure in 2000.
Operating income includes a reversal of the reserve regarding
phase-out of regional aircraft of SEK 246 m. (255).
The improvement in operating income for Saab Systems and Electronics is mainly attributable to the military systems business and the phase-out of certain commercial development projects. Operating income of Saab Aerospace is on level with the previous year, excluding the reversal of the loss risk reserve of SEK 135 m. which was made in 1999. Also in 2000, income is burdened with high costs in regard to marketing and development for the export version of the Gripen. Operating income and operating margin have improved somewhat during the year for Saab Technical Support and Services as a result of the increased volume. Intensive integration work has been carried on during the year at Saab Bofors Dynamics to realize cost synergies and concentrate operations. This produced a positive result after three-quarters. Operating income for Saab Ericsson Space deteriorated as a result of increased efforts in the commercial telecommunications market and associated internally financed development. Income from Group activities improved, primarily through capital gains. The decrease in income of Celsius Aviation Services is mainly due to a poorer market for engine operations in the USA and lower activity in the markets in Southeast Asia and Australia as a result of the stronger dollar. Operating income for Other operations, excluding reversal of reserve in regard to Regional Aircraft, was somewhat better than in the previous year, but continued to be negative SEK -98 m. (pro forma -123). Structuring work regarding several of these operations is in progress. Development in operations at Saab Aircraft and Saab Aircraft Leasing followed the plans set up in 1997. For Saab Aircraft, income for the year before reversals against the loss risk reserve amounted to SEK -21 m. (-47) and for Saab Aircraft Leasing to SEK -113 m. (-35).
The years income regarding Regional Aircraft of SEK -593 m. (-771) has been set against the termination reserve. Project interest on non-utilized advance payments, which is reported in operating income, amounted to SEK 172 m. (218).
The increase in marketing expenses compared with pro forma 1999 has increased because marketing activities in general have been more intensive in every business area this year. This should be seen in relation to the excellent order bookings this year. Administrative expenses have decreased compared with pro forma as a result of the integration work.
Research and development costs, which are on level with pro forma last year, derived mainly from business areas Saab Systems and Electronics and Saab Aerospace. Development costs for the export version of the Gripen were on level with last year.
Other operating income consist mainly of capital gains following divestment of companies SEK 356 m. (21), reversal of reserves corresponding to the deficit in Saab Aircraft SEK 21 m. (47), trading income in Treasury business SEK 45 m. (12), currency gains, etc. SEK 82 m. (57) and income from secondary activities such as insurance business, property rentals and sales of machines. Other operating expenses include pension costs SEK 42 m. and capital losses SEK 17 m.
Items affecting comparability amounted to SEK 285 m. and consisted of company related funds of SEK 527 m. received from SPP, reversal of reserves of SEK 246 m. concerning Regional Aircraft, and provisions mainly regarding certain development projects in the torpedo and missiles operation from the former Celsius Group amounting to SEK 488 m. Items affecting comparability in the previous year concerned reversal of reserves of SEK 255 m. regarding Regional Aircraft.
Net financial income and expenses amounted to SEK -85 m. (pro forma -9), of which Saab Aircraft Leasing SEK 68 m. (74). The decrease is mainly attributable to lower liquid funds. The decrease in net financial income compared with the outcome in the previous year is mainly due to the fact, that Celsius was purchased for cash, which corresponds to lost interest revenue of approximately SEK 250 m. The income share in HDW, which amounted to SEK 30 m., is reported as financial income. The average return on external investments amounted to SEK 4.72 per cent (4.75) and the average liquidity was SEK 5,400 m. (11,600). Income after financial items amounted to SEK 1,448 m. (pro forma 1,116).
Current and deferred taxes amounted to SEK -333 m. (pro forma -352), corresponding to an effective tax of 23 per cent (pro forma 32) on income after financial items. The deviation of the effective tax rate in certain years from the Swedish tax rate of 28 per cent is due to permanent differences in taxation and the fact that the Group has operations in countries, primarily the USA, with higher tax rates than in Sweden.
Net income for the year was SEK 1,038 m. (939, pro forma 735), corresponding to an income per share of SEK 9.75 (8.82, pro forma 6.90). Pre-tax return on capital employed was 14.6 per cent (21.3). Pre-tax return on capital employed before items affecting comparability was 12.3 per cent (17.6). After-tax return on shareholders equity was 20.0 per cent (21.5).
Order bookings
Group order bookings were all time high and amounted to SEK
28,141 m. (6,849, pro forma 15,267). Order bookings during the
fourth quarter amounted to SEK 5,043 m. The order backlog at
year-end amounted to SEK 41,091 m. (23,637, pro forma 29,891),
and includes military orders worth SEK 38,300 m.
Liquidity, finance and investments
Finance and
liquidity
Compared with the pro forma opening balance, liquid funds less
liabilities to credit institutions decreased by SEK -1,876 m. to
SEK 3,942 m. (5,818). The decrease is net, consisting mainly of
nominal SEK 1,464 m. in funds received from SPP and payment of
the insurance premium for the leasing portfolio of regional
aircraft of SEK 528 m., payments regarding the phase-out of
regional aircraft manufacture of SEK 604 m., tax paid of SEK 648
m., repurchase of property in accordance with agreements SEK 400
m. and paid dividend of SEK 266 m., in addition to continued high
utilization in the Gripen program. The Group's net liquidity
after deduction for allocations to pensions amounted to SEK 415
m., compared with SEK 2,412 m. in pro forma opening balance.
Compared with the closing balance in 1999, net liquidity has
decreased by SEK 7,983 m., mainly due to the above mentioned
causes, the acquisition of shares in Celsius during the year for
SEK 3.7 bn and the net liability taken over from Celsius of SEK
1.8 bn.
Group equity/assets ratio amounted to 18.2 per cent compared with 12.8 per cent in the pro forma opening balance and 16.8 per cent at the end of 1999. The interest coverage ratio, excluding items affecting comparability, was 4.5 (13.9). Shareholders equity amounted to SEK 5,670 m. (4,708), corresponding to SEK 53.26 (44.23) per share.
Cash flow
The cash flow analysis and following comments apply to the period
January 1 December 31 2000, as if Celsius had already been
included in the Group December 31, 1999. Group cash flow from
operating activities continued to be good and amounted to SEK
1,882 m. (1,861). Working capital decreased as a result of
planned continued utilization regarding the Gripen, which
resulted in a heavy decrease in advance payments from customers.
Provisions have decreased, mainly as a result of the year's
deficit in Regional Aircraft and Saab Aircraft Leasing totaling
SEK 706 m. and payment of the insurance premium for the leasing
fleet of SEK 528 m. Lease obligations have decreased as a result
of sales of aircraft from the leasing portfolio. The cash flow
from investments amounted to SEK -502 m. (-1.780). In 1999,
investments in shares in Celsius AB accounted for SEK -1,267 m.
Operating cash flow amounted to SEK -1,908 m. (-2,368), of which
Regional Aircraft SEK -593 m. (- 404) and Saab Aircraft Leasing
SEK -715 m. (218). The outflow is mainly due to phase-out of
Regional Aircraft production, payment of the insurance premium
for the leasing fleet, payment of tax, repurchase of property,
payment of dividend and continued high utilization in the Gripen
program.
Capital
expenditures
The years capital expenditures in property, plant and
equipment, excluding lease assets, amounted to SEK 1,077 m. (447,
pro forma 652). Net investments including lease assets and
intangible fixed assets amounted to SEK 494 m. (467), including
lease assets of SEK -476 m. (83). Included in capital
expenditures is a re-purchase of a building according to
agreement.
Research and development
The years expenditure on research and development amounted to SEK 3,808 m. (3,081, pro forma 4,462), of which SEK 2,948 m. (2.477, pro forma 3.604) relates to development paid for by customers.
The internally funded research and development concerned mainly the export version of Gripen, which was on level with last year, and further development of the Gamer system and the new generation laser simulators, upgrading of the RBS 70, further development of the AT4 munitions, technical development in the area of space, mainly in telecommunications, and the development of a new generation of separation systems.
Personnel
At the end of 2000, the number of employees in the Group was
15,453, compared with 16,665 at the beginning of the year. At
year-end 1999 the number of employees was 8,031.
Restructuring
In December 1997, Saab made the decision to end production of
regional aircraft and allocated a reserve for restructuring the
industrial operation. Restructuring is proceeding according to
plan. During 2000, a further number of structural measures were
completed, among others commitments to suppliers. This has
enabled a more reliable assessment of the costs and a decision
has therefore been made on reversal of the reserve of SEK 246 m.
(255) in the 2000 financial statements. At year-end 2000, the
restructuring reserve amounted to SEK 1,537 m. The view is that
remaining reserves are now well adapted to continued
restructuring.
In connection with the decision to cease production of regional aircraft, a decision was also made to put a market value on the leasing portfolio of Saab Aircraft Leasing and to make a provision in order to adjust the book value to calculated market value. During 2000, the aircraft included in own balance sheet were written down by SEK 1,451 m., of which SEK 989 m. against the loss risk reserve and the remaining portion against other liabilities. During 2000, the insurance cost of SEK 528 m. has also been set against the loss risk reserve, which thereby amounted to SEK 1,008 m. at the end of 2000. No reversals of the reserve have been made so far, since the leasing portfolio has a remaining life of about 15 years.
The restructuring costs, related to the acquisition of Celsius are included in the purchase analysis and has not affected Group earnings.
Parent Company
Sales and income
Sales of the parent company amounted to SEK 3,921 m. (4,933).
Operating income amounted to SEK 838 m. (626). Net financial
income and expenses amounted to SEK 843 m. (1,147) and income
after financial income and expenses was SEK 1,681 m. (1,773). Of
the financial net SEK 743 m. (648) are group contributions and
dividends. After appropriations of SEK -148 m. (-45) and paid and
deferred tax of SEK -305 m. (-321), net income for the year
amounted to SEK 1,228 m. (1,407).
Proposed dividend
and repurchase of own shares
The Board of Directors long-term dividend policy is for 20-40
percent of the Groups net income to be distributed. For
2000, the Board of Directors and the President propose to
distribute to the shareholders SEK 3.00 (2.50) per share or a
total of SEK 319 m. (266), corresponding to 31 (28) percent of
the Groups net income. April 9, 2001 has been proposed as
the record date and the dividend is expected to be distributed,
April 12, 2001.
Further, the Board of Directors will propose the Annual General Meeting authorization for the Board to decide on repurchase of the companys shares up to 10 percent of the total shares outstanding. The purpose of the empowerment is to provide the Board with increased scope for action in working with the companys capital structure and to enable acquisitions to be made where considered appropriate. The mandate is proposed to be valid until the next Annual General Meeting. Such repurchases may be effected over the stock exchange or through offerings to shareholders. It is also proposed that the Boards mandate include the possibility to transfer repurchased shares in accordance with current legislation.
Annual General
Meeting
The Annual General Meeting will be held at Saab, Linköping on
Wednesday, April 4, 2001 at 18.00. Saabs revised annual
report will be available at the companys head office in
Linköping. The printed Annual Report will be distributed upon
request to shareholders from March 5, 2001.
Ownership
Saabs principal owners are Investor AB, BAE SYSTEMS, the
Wallenberg foundations, Fidelity funds, 3rd AP fund, AMF, MFS
funds and Skandia.
Accounting
Principles
The report has been drawn up in accordance with earlier
accounting principles. Celsius is included in the Saab Group as
from January 1, 2000. For comparability pro forma figures are
published, which refers to the Saab Group including Celsius for
the whole year 1999 and the quarters of 1999. The pro forma
figures have been adjusted during the year in connection with
major restructurings of the Group
Linköping February 16, 2001
Bengt Halse
President and Chief Executive Officer
Dates for
financial information:
Interim Report for January March will be published on
April 26, 2001
Interim Report for January June will be published on July
12, 2001
Interim Report for January September will be published on
October 19, 2001
The 2001 Report will be published on February 14, 2002.
For further
information, please contact:
Jan Nygren, Head of Corporate Communications tel. +46 13 18 19 99
Agneta Kammeby, Manager Investor Relations tel. +46 13 18 71 25
Anders Stålhammar, Press Officer tel. +46 13 18 71 75
International
teleconference:
Today, Friday 16 February, 15.00. Contact Marita Sidén tel. +46
13 18 71 49
for registration and further information.
Telephone
interview with President Bengt Halse:
Today, Friday 16 February, approx. 16.00. tel. +46 13 18 71 75
Contact Anders Stålhammar, Press Officer
The 2000 Report can also be accessed on the Internet at www.saab.se
Sales by business area
SEK m. | 2000 | Pro forma 1999 |
Change | 4th Q 2000 |
Pro forma 4th Q 1999 |
Saab Systems & Electronics | 4,364 | 4,294 | 2% | 1,369 | 1,419 |
Saab Aerospace | 3,921 | 3,964 | -1% | 1,204 | 991 |
Saab Technical Supp & Serv | 2,511 | 2,367 | 6% | 851 | 718 |
Saab Bofors Dynamics | 2,348 | 3,393 | -31% | 846 | 1,394 |
Saab Ericsson Space | 713 | 676 | 5% | 195 | 170 |
Internal sales | -733 | -797 | -174 | -261 | |
13,124 | 13,897 | -6% | 4,291 | 4,431 | |
CAS | 3,241 | 3,009 | 8% | 885 | 839 |
Other operations | 1,475 | 1,112 | 351 | 349 | |
Saab Group | 17,840 | 18,018 | -1% | 5,527 | 5,619 |
Sales by market
SEK m. | 2000 | 1999 | Change |
Sweden | 9,317 | 5,609 | 66% |
Other EU countries | 2,734 | 1,493 | 83% |
Other European countries | 608 | 512 | 19% |
Total Europe | 12,659 | 7,614 | 66% |
North America | 2,899 | 644 | |
Central and South America | 464 | 21 | |
Asia | 764 | 546 | 40% |
Australia, etc | 997 | 217 | |
Other markets | 57 | 11 | |
Saab Group | 17,840 | 9,053 | 97% |
Operating income by business area
SEK m. | 2000 | Per-centage of sales |
Pro forma 1999 |
Per-centage of sales |
4th Q 2000 | Pro forma 4th Q 1999 |
Saab Systems & Electronics | 289 | 6.6% | 199 | 4.6% | 131 | 141 |
Saab Aerospace | 333 | 8.5% | 450 | 11.4% | 95 | 189 |
Saab Technical Supp & Serv | 167 | 6.7% | 146 | 6.2% | 61 | 45 |
Saab Bofors Dynamics | 46 | 2.0% | -39 | 45 | -16 | |
Saab Ericsson Space | 53 | 7.4% | 65 | 9.6% | 9 | 14 |
Corporate | 340 | -40 | 31 | -58 | ||
1,228 | 9.4% | 781 | 5.6% | 372 | 315 | |
CAS | 157 | 4.8% | 212 | 7.0% | 52 | 62 |
Other operations | 148 | 132 | 233 | 23 | ||
Saab Group | 1,533 | 8.6% | 1,125 | 6.2% | 657 | 400 |
Income statement
SEK m. | 2000 | Pro forma 1999 |
4th Q 2000 | Pro forma 4th Q 1999 |
1999 |
Sales | 17,840 | 18,018 | 5,527 | 5,619 | 9,053 |
Cost of goods sold | -13,427 | -13,882 | -4,123 | -4,347 | -6,363 |
Gross margin | 4,413 | 4,136 | 1,404 | 1,272 | 2,690 |
Marketing expenses | -1,578 | -1,390 | -484 | -400 | -798 |
Administrative expenses | -1,251 | -1,309 | -413 | -347 | -550 |
Research and development costs | -860 | -858 | -257 | -288 | -604 |
Items affecting comparability | 285 | 255 | 252 | 43 | 255 |
Other operating income | 613 | 347 | 159 | 108 | 181 |
Other operating expenses | -97 | -65 | -16 | 2 | -71 |
Share in income of associated companies | 8 | 9 | 12 | 10 | 1 |
Operating income 1) | 1,533 | 1,125 | 657 | 400 | 1,104 |
Result from financial investments | -85 | -9 | -18 | 2 | 273 |
Income after financial items | 1,448 | 1,116 | 639 | 402 | 1,377 |
Taxes | -333 | -352 | -99 | -138 | -391 |
Minority interest | -77 | -29 | -14 | 0 | -47 |
Net income | 1,038 | 735 | 526 | 264 | 939 |
Earnings per share, SEK 2) | 9.75 | 6.90 | 4.94 | 2.48 | 8.82 |
Earnings per share after full conversion, SEK 3) | 9.50 | 6.73 | 4.81 | 2.42 | 8.60 |
1) Includes depreciation of | -1,336 | -1,311 | -417 | -367 | -918 |
of which depreciation on leasing assets | -534 | -511 | -144 | -158 | -511 |
2) Number of shares: 106,459,675 as per Dec. 31, 2000 | |||||
3) Number of shares after full conversion: 109,247,175 |
Sales and income per quarter Pro forma
2000 1999
SEK m. | 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | 4th Q | ||||||||||
Sales | 4,187 | 4,150 | 3,976 | 5,527 | 3,896 | 4,970 | 3,533 | 5,619 | ||||||||||
Operating income | 247 | 409 | 220 | 657 | 192 | 406 | 127 | 400 | ||||||||||
Operating margin | 5.9% | 9.9% | 5.5% | 11.9% | 4.9% | 8.2% | 3.6% | 7.1% | ||||||||||
Net financial income | 8 | -35 | -40 | -18 | -28 | 30 | -13 | 2 | ||||||||||
Income after financial items | 255 | 374 | 180 | 639 | 164 | 436 | 114 | 402 | ||||||||||
Net income | 161 | 254 | 97 | 526 | 103 | 290 | 78 | 264 | ||||||||||
Earnings per share, SEK 1) | 1.51 | 2.39 | 0.91 | 4.94 | 0.97 | 2.72 | 0.73 | 2.48 | ||||||||||
1) Number of shares: 106,459,675 as per Dec.31 2000. |
|
|
Five year overview
SEK m., unless otherwise stated | 2000 | Pro forma 1999 | 1999 | 1998 | 1997 | Pro forma 1996 |
Saab Group | ||||||
Order bookings | 28,141 | 15,267 | 6,849 | 5,797 | 16,612 | 7,736 |
Order backlog at year-end | 41,091 | 29,891 | 23,637 | 23,132 | 27,122 | 20,042 |
Sales | 17,840 | 18,018 | 9,053 | 8,248 | 8,674 | 8,159 |
Foreign market sales, % | 48 | 48 | 38 | 41 | 51 | 54 |
Operating income | 1,533 | 1,125 | 1,104 | 875 | -5,316 | -2,066 |
Operating margin, % | 8.6 | 6.2 | 12.2 | 10.6 | neg | neg |
Operating margin before depr., % | 13.5 | 10.7 | 17.1 | 14.7 | neg | neg |
Income after financial items | 1,448 | 1,116 | 1,377 | 1,218 | -4,845 | -1,572 |
before items affecting comparability | 1,163 | 861 | 1,122 | 1,018 | 576 | -353 |
Total assets | 31,119 | 36,641 | 28,079 | 29,680 | 30,320 | 28,140 |
Of which aircraft leasing operation | 6,456 | 8,877 | 8,877 | 9,119 | 9,604 | 8,817 |
Operating cash flow | -1,908 | - | -2,368 | -1,105 | -2,229 | 1,195 |
Capital employed, average | 12,183 | - | 6,866 | 6,352 | 6,440 | 8,975 |
Return on capital employed, % | 14.6 | - | 21.3 | 21.4 | neg | neg |
before items affecting comparability, % | 12.3 | - | 17.6 | 18.2 | 8.8 | neg |
Return on shareholders equity, % | 20.0 | - | 21.5 | 25.6 | neg | neg |
before items affecting comparability, % | 16.1 | - | 17.3 | 21.6 | 2.4 | neg |
Profit margin before items affecting comparability, % | 8.4 | - | 13.4 | 14.1 | 7.8 | neg |
Capital turnover rate | 1.46 | - | 1.32 | 1.29 | 1.13 | 0.92 |
Equity / assets ratio, % | 18.2 | 12.8 | 16.8 | 13.6 | 10.2 | 22.5 |
Interest coverage ratio, before items affecting comparability | 4.5 | - | 13.9 | 7.88 | 6.76 | neg |
Earnings per share, SEK | 9.75 | 6.90 | 8.82 | 8.55 | - | - |
Earnings per share after full conversion, SEK | 9.50 | 6.73 | 8.60 | 8.35 | - | - |
Dividend, SEK1 | 3.00 | - | 2.50 | 2.00 | - | - |
Number of employees at year-end | 15,453 | 16,665 | 8,031 | 7,891 | 7,716 | 8,110 |
12000 proposed dividend.
Key ratios
2000 | Pro forma 1999 |
1999 | Long-term goal | |
Operating margin before depreciation | 13.5% | 10.7% | 17.1% | 15% |
Operating margin after depreciation | 8.6% | 6.2% | 12.2% | 10% |
Pre-tax return on capital employed | 14.6% | - | 21.3% | - |
After-tax return on shareholders equity | 20.0% | - | 21.5% | 15% |
Dividend, share of profit | 31% | - | 28% | 20-40% |
Equity/assets ratio, excl Regional Aircraft and SAL | 22.5% | 18.2% | 29.7% | 30% |
Equity/assets ratio | 18.2% | 12.8% | 16.8% | - |
Balance sheet
SEK m. | Dec. 31, 2000 | Pro forma Dec. 31, 1999 | Dec. 31, 1999 |
Assets | |||
Goodwill and other intangible assets | 1,619 | 1,824 | 375 |
Property, plant and equipment, etc. | 4,712 | 4,339 | 2,615 |
Lease assets | 6,502 | 8,963 | 8,236 |
Long-term interest bearing receivables | 1,345 | 1,180 | |
Shares, etc. | 950 | 1,003 | 1,327 |
Deferred tax receivables | 1,440 | 1,093 | 507 |
Inventories, etc. | 3,684 | 3,954 | 1,717 |
Short-term interest bearing receivables | 606 | 231 | |
Other receivables | 6,079 | 6,349 | 2,511 |
Cash and marketable securities | 4,182 | 7,705 | 10,791 |
Total assets | 31,119 | 36,641 | 28,079 |
Shareholders equity and liabilities | |||
Shareholders equity | 5,670 | 4,700 | 4,708 |
Minority interest in subsidiaries | 821 | 752 | 206 |
Provision for pensions | 3,527 | 3,406 | 1,995 |
Other provisions | 3,821 | 6,606 | 5,042 |
Liabilities to credit institutions | 1,963 | 3,081 | 181 |
Convertible debenture loan | 228 | 217 | 217 |
Lease obligations | 3,916 | 4,633 | 4,591 |
Advance payments from customers, net 1) | 3,619 | 4,631 | 4,055 |
Other liabilities | 7,554 | 8,615 | 7,084 |
Total shareholders equity and liabilities | 31,119 | 36,641 | 28,079 |
1Advance payments from customers, gross | 6,768 | 7,796 | 6,645 |
Less portion used, which has been reduced from inventories | -3,149 | -3,165 | -2,590 |
Advance payments from customers, net | 3,619 | 4,631 | 4,055 |
Personnel by business area
Number | 2000 | Pro forma 1999 |
Change |
Saab Systems & Electronics | 3,023 | 3,081 | -58 |
Saab Aerospace | 4,146 | 4,196 | -50 |
Saab Technical Supp & Serv | 2,794 | 2,705 | 89 |
Saab Bofors Dynamics | 1,884 | 2,565 | -681 |
Saab Ericsson Space | 663 | 644 | 19 |
Corporate | 161 | 233 | -72 |
12,671 | 13,424 | -753 | |
CAS | 1,450 | 1,545 | -95 |
Other operations | 1,332 | 1,696 | -364 |
Saab Group | 15,453 | 16,665 | -1,212 |
Summary of cash flow statement
SEK m. | 20001) | 19992) |
Cash flow from operating activities | ||
Income after
financial items excl. share in income of associated companies |
1,440 | 1,380 |
Depreciation and write-down charged to income | 1,336 | 918 |
Items affecting comparability | -246 | -255 |
Tax | -648 | -182 |
Cash flow
from operating activities before changes in working capital |
1,882 | 1,861 |
Working capital | ||
Inventories etc. | 270 | 524 |
Receivables | 320 | 8 |
Advance payments from customers, net | -1,012 | -1,136 |
Other liabilities | -612 | -554 |
Lease obligations | -717 | -362 |
Provisions | -1,537 | -929 |
Change in working capital | -3,288 | -2,449 |
Cash flow from operating activities | -1,406 | -588 |
Investments in intangible fixed assets | -59 | -104 |
Investments in shares etc. | 43 | -1,285 |
Investments in tangible fixed assets | -911 | -280 |
Investments in lease assets | 476 | -83 |
Change in long-term receivables | -51 | -28 |
Cash flow from investments | -502 | -1,780 |
Operating cash flow | -1,908 | -2,368 |
1) Change compared to pro forma balance sheet as per December 31, 1999.
2) Change compared to pro forma balance sheet as per December 31, 1998.
Order bookings and order backlog by business area
Order bookings Order backlog
SEK m. | 2000 | Pro forma 1999 |
2000 | Pro forma 1999 |
|
Saab Systems & Electronics | 5,523 | 4,126 | 8,689 | 7,250 | |
Saab Aerospace | 12,171 | 3,752 | 27,097 | 18,847 | |
Saab Technical Supp & Serv | 2,672 | 2,099 | 1,253 | 778 | |
Saab Bofors Dynamics | 2,853 | 2,793 | 4,219 | 3,765 | |
Saab Ericsson Space | 765 | 706 | 816 | 764 | |
Corporate/internal | -612 | -1,820 | -1,997 | -2,156 | |
23,372 | 11,656 | 40,077 | 29,248 | ||
CAS | 3,408 | 2,607 | 540 | 338 | |
Other operations | 1,361 | 1,004 | 474 | 305 | |
Saab Group | 28,141 | 15,267 | 41,091 | 29,891 |
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