THE 1999 REPORT
Comment by the President
"1999 was an eventful and successful year for Saab. It was another year with good growth in both sales and operating income. A restructured Combitech contributed significantly to the result and the IT companies continued to expand aggressively with good profitability. In December, the contract for the first export order for the Gripen was signed with the South African Government. Company acquisitions in our core areas made positive contributions to income already in the first year.
However, the most important event
with regard to the future was the offer for Celsius and the
intellectual power house created by the combined company. The
transformation that has started at Saab, with a rapid increase in
the proportion of electronics and software development, will thus
continue. To Saabs approximately 2,400 engineers working
with information technology will be added some 2,000 from
Celsius. The new growth-oriented knowledge company will be able
to offer both military and commercial customers new values
through its accumulated competence in areas such as Information
Technology, Decision Support and Command Systems. Operations will
be oriented towards the expanding market for new information
systems expected also on the military side, in addition to an
increasing share of technical support and service.
The new Saab will also offer a consolidated Swedish solution with
immediate access to the international arena via its owner and
partner, BAE SYSTEMS, for its total product program in the
defense sector.
We expect that about one years structural work will be required for merging the two companies. However, significant synergies should already be achievable during the first year."
Offer to purchase all shares in Celsius
On 16 November 1999, Saab AB stated in its offer to the shareholders in Celsius AB that the intention is to purchase all outstanding shares. Saab AB is offering SEK 179 in cash for each A- or B-share in Celsius AB. The value of the offer amounts to SEK 5 billion. After adjustments for among others Celsius claim on SPP, provision for restructuring costs and the result of in Celsius earlier decided structural deals, the offer is expected to result in a goodwill of approximately SEK 700 million, which is estimated to be amortized over 20 years. The offer is being financed from Saabs existing banking facilities.
The Swedish Government has decided to accept the offer, regarding the A- and B-shares it owns in Celsius, which means that the Swedish Government sells in total 3,000,000 A-shares and 4,000,000 B-shares representing 24.9 per cent of the capital and 61.7 per cent of the votes in Celsius. This decision follows a vote by the Swedish Parliament on February 16, 2000 in favor of a sale of the Swedish Governments shares. On February 4, 2000, after having reviewed the notification, the European Commission decided not to launch a full probe into the transaction, which means that the European Commission now has approved Saabs acquisition of Celsius.
Business areas
Military Aerospace
During 1999, 16 Gripen aircraft were delivered to the Swedish Air Force, bringing the total to 81 out of the 204 ordered by the Defence Materiel Administration, FMV. Three squadrons of the first of the worlds fourth generation combat aircraft are now operative in the Swedish defense. In December, Saab received an order for warning and countermeasures systems valued at SEK 1.2 bn, of which about SEK 600 m. will be delivered from Celsius. In December, Saab and BAE SYSTEMS signed a contract with South Africa for 28 Gripen aircraft and 22 Hawk aircraft with related equipment, training, etc. The contract has a total value of approximately SEK 22 bn, of which SEK 13 bn refer to Gripen and the 28 aircraft will be delivered during the period 2007-2012. The order will be booked in 2000 when the final work allocation has been made between Saab and BAE SYSTEMS. Saabs share of the contract is estimated at about 75 percent, equivalent to about SEK 10 bn. The agreement with South Africa for the supply of Hawk and Gripen aircraft includes industrial collaboration commitments by Saab and BAE SYSTEMS totally valued at about SEK 60 bn and defense and aircraft industry commitments totaling just under SEK 13 bn. These commitments will be fulfilled over a period of 11 years and include sales and investments in South Africa, as well as exports from that country. The contract with South Africa will be a profitable venture for Saab, even after taking into account a relevant share of the costs for developing the export version of the Gripen. During the year, several countries have shown an interest in the RBS15 anti-ship missile and in September Dynamics signed an agreement with the German BGT covering export cooperation on the missile. Order bookings for Military Aerospace amounted to SEK 4,059 m. (2,544), of which SEK 2,196 m. during the fourth quarter, and included among other further development, add-on orders and spare parts for the Gripen, the EOS450 fire control system for Mexico and the order from FMV for a new warning and countermeasures system for the Gripen.
Space
The share of sales generated from commercial telecommunications projects has continued to grow and in 1999 accounted for 45 percent of the total. During 1999, the most important projects in the institutional market were SPOT, a bilateral collaboration project between France and Sweden concerning global observation satellites, and the ESA projects METOP, related to meteorological satellites and ROSETTA, a scientific satellite. The principal projects in the commercial market during the year comprised participation in Spacebus 3000, Alcatels platform for telecommunications satellites, deliveries to the ICO mobile communications system, and deliveries of separation systems for a number of launch rockets. Order bookings for Space amounted to SEK 706 m. (667), of which SEK 148 m. during the fourth quarter. The share of the commercial market in relation to total order bookings corresponds to the share of sales, i.e. approximately 50 percent.
Training Systems
Approximately 90 percent of sales go to export, the major markets being the UK, the US and Germany. During the year, initial orders were received in two new product areas, GAMER (Gunnery and Maneuver Exercise System) and the BT47 small arms simulator. Order bookings for Training Systems increased through the acquisition of Barracuda Technologies and amounted to SEK 631 m. (583), of which SEK 322 m. were received during the fourth quarter and included among others orders for simulator equipment from France, target equipment from Spain and multispectral camouflage screens from FMV. In January 2000, a further order for laser simulators valued at SEK 160 m. was received from the US.
Commercial Aircraft
In August, Collaborative Programs
delivered the first pair of floor structures to Aérospatiale
Matra for Airbus A340-500/600. Saab Aircraft Leasings
(SAL) leasing portfolio has decreased by seven aircraft
during the year and consisted at year-end of 309 regional
aircraft. Order bookings for Commercial Aircraft amounted
to SEK 836 m. (1,167), of which Saab Aircraft (Customer
Support), consisting of regional aircraft spares, accounted
for SEK 666 m. (587). New orders were received from BAE SYSTEMS
and Boeing, among others. During the year, orders for SEK 82 m.
were received as part of the contract from Airbus in 1998, which
carry an estimated total contract value of about SEK 1,500 m.
This means that deliveries for a total of 63 A340-500/600 have
now been recorded as order bookings.
Combitech
During 1999, several companies were divested and the head office in Jönköping phased out. Combitech now consists of the profitable niche companies Saab Marine Electronics, Combitech Systems and Combitech Network, together with the development company Saab Celsius TransponderTech. Combitech Traffic Systems was also part of Combitech during 1999, but was divested January 31, 2000 with a capital gain of SEK 55 m. Order bookings for Combitech amounted to SEK 1,270 m. (1,001), of which SEK 366 m. during the fourth quarter. The increase was due to a heavy rise in order bookings among all the remaining companies during 1999.
Regional Aircraft
During the year, Regional Aircraft was phased out following delivery of the last regional aircraft. A total of 459 Saab 340 and 63 Saab 2000 aircraft have thus been delivered since the start in 1984. All in all 522 aircraft.
Sales, income and orders
Sales
Group sales increased by 10 percent to SEK 9,053 m. (8,248). The increase in sales is due both to acquisitions and organic growth. January 1, 1999, the share majority in Avionics was purchased, after which the company has been included in the Groups sales. During 1999, Nyge Aero and Barracuda Technologies were also acquired. The organic growth in Space and the Combitech IT companies has been very satisfactory for several years. In Combitech Systems for example, the growth exceeded 60 percent both in 1998 and 1999. Sales to foreign markets amounted to SEK 3,444 m. (3,403) or 38 (41) percent of total sales.
Sales of Military Aerospace increased 18 percent to SEK 5,383 m. (4,572). The improvement is attributed mainly to the consolidation of Avionics, although sales from Gripen activities also increased. During the year, 16 Gripen aircraft were invoiced which is in accordance with the current delivery plan, compared with 17 in 1998. Of sales of Military Aerospace, sales of Dynamics amounted to SEK 851 m. (853). Sales of Avionics amounted to SEK 1,044 m. (934), which is not included in Group Sales since Avionics was reported as an associated company in 1998. Sales of Nyge Aero amounted to SEK 180 m., of which SEK 141 m. is included in Group sales. Sales by Space increased 11 percent to SEK 676 m. (607) through higher volumes. The commercial market accounted for 45 percent of total sales. Sales of Training Systems increased to SEK 735 m. (621) through higher volumes of laser simulators and the acquisition of Barracuda Technologies. Of Barracuda Technologies sales of SEK 80 m., SEK 40 m. is included in Group sales. Sales of Commercial Aircraft decreased to SEK 812 m. (908) through considerably lower deliveries to regional aircraft production, which ceased during the year. SEK 115 m. (95) of sales related to deliveries to Boeing and Airbus, among others. Sales of customer support to the fleet of Saab 340 and Saab 2000 increased to SEK 666 m. (587). Sales of Combitech increased to SEK 1,273 m. (1,057) mainly through the volume increase in Traffic Systems, growth in the IT companies and acquisitions in Marine Electronics. Compared with the previous years sales, adjusted for company divestments, sales increased 64 percent. Of Combitechs sales, Marine Electronics accounted for SEK 488 m. (443) and the IT companies for SEK 510 m. (368). Sales of Regional Aircraft decreased as a result of the termination of civil aircraft production at mid-year. During the year, 3 (25) Saab 340 and 4 (11) Saab 2000 were delivered.
Income and profitability
Operating income increased 26 percent to SEK 1,104 m. (875). All business areas showed improved income with the exception of Military Aerospace, which, according to plan, reported higher development costs for the export version of the Gripen. During 1999, income was improved by the reversal of SEK 135 m. (100) of the loss risk reserve for the basic contract for the Gripen and SEK 255 m. (200) for the phase-out of Regional Aircraft. The years loss in Regional Aircraft of SEK -771 m. (-477) has been charged against the termination reserve. Income of Saab Aircraft Leasing before reversal of the loss risk reserve amounted to SEK -35m. (-55). Project interest on non-utilized advance payments amounted to SEK 218 m. (263).
The increase in research and development costs is mainly due to planned higher development costs for the export version of the Gripen and work on Collaborative Programs, mainly in regard to the Airbus A3XX and A340-500/600.
Other operating income of SEK 181 m. (206) consists mainly of capital gains from divesting operations, SEK 21 m. (75), reversal of provision corresponding to the loss in Saab Aircraft, SEK 47 m. (60) and trading income from Treasury business, capital gains and exchange rate gains, etc., of SEK 113 m. (71). Other operating expenses of SEK -71 m. (-34) consists among others of the capital loss from divesting Combitech Electronics.
Net financial income and expenses amounted to SEK 273 m. (343), of which Saab Aircraft Leasing accounted for SEK 74 m. (91). The deterioration is mainly due to lower liquid funds, a lower interest level and a lower market value of the bonds portfolio. The average return on liquid funds was 4.75 (5.7) percent and the average liquidity was SEK 11,600 m. (13,300). Income after financial income and expenses amounted to SEK 1,377 m. (1,218).
Current and deferred taxes amounted to SEK -391 m. (-279), corresponding to an effective tax rate of 28 (23) percent on income after financial income and expenses.
Net income for the year was SEK 939 m. (912), corresponding to income per share of SEK 8.82 (8.55).
Pre-tax return on capital employed
was 21.3 (21.4) percent. Return on capital employed before items
affecting comparability was 17.6 (18.2) percent. After-tax return
on shareholders equity was 21.5 (25.6) percent.
Operating income of Military Aerospace decreased to SEK
523 m. (628), mainly due to higher marketing and development
costs for the export version of the Gripen. Risks and guarantee
commitments in the basic contract for the Gripen have been
lowered and the loss risk reserve has thus been reduced by SEK
135 m. (100), so that it has now been eliminated. Project
interest of SEK 212 m. (252) on non-utilized advance payments is
included in operating income. The operating margin was 9.7
percent (13.7). Operating income of Space improved to SEK
65 m. (59), due to higher volumes with maintained margins. The
operating margin was 9.6 percent (9.7). Operating income of Training
Systems was on the same level as the previous year, SEK 165
m. (167). The operating margin decreased somewhat to 22.4 percent
(26.9), mainly due to the acquisition of Barracuda
Technologies and the fact that the previous year was on an
exceptionally high level. Operating income of Commercial
Aircraft amounted to SEK 2 m. (-15) and consists of the
income of Collaborative Programs, which was affected by
investments in new activities connected with Airbus, Boeing and
other projects. Development for Saab Aircraft and Saab
Aircraft Leasing is following the plans set up in 1997, when
a write-down was made in the leasing portfolio together with
provisions for future negative income in Saab Aircraft. For
Saab Aircraft, the years income before settlement
against the loss risk reserve was SEK 47 m. (-60) and for
Saab Aircraft Leasing SEK 35 m. (-55). Operating income
of Combitech improved greatly to SEK 80 m. (-166). The
improvement was largely due to higher volumes and margins
throughout the niche companies, and the fact that there was no
negative effect from Traffic Systems on income during the year,
since provisions for the expected deficit had already been made
in 1998. Operating income for Marine Electronics was SEK
68 m. (37), for Combitech Systems SEK 25 m. (15) and for Combitech
Network SEK 25 m. (17). Income for the development company Saab
CelsiusTransponderTech was negative but within the framework
for this development venture. In addition to this, income
includes structure costs for closing the Combitech head office
and the result of SEK 14 m. (75) from company divestments.
Income from Corporate activities improved, especially in regard
to capital gains.
The fluctuations between the quarters for sales and operating income have been less significant during 1999 compared to previous years. However, reversal of the loss risk reserves for Gripen and Regional Aircraft strengthened income during the second and the fourth quarter. Net financial income deteriorated during the fourth quarter, mainly due to lower liquidity and a lower market value of the bonds portfolio.
Order bookings
Group order bookings amounted to
SEK 6,849 m. (5,797). The order backlog at year end amounted to
SEK 23,637 m. (23,132), and includes military orders worth SEK
22,100 m. (20,900).
Liquidity, finance and investments
Liquidity
Liquid funds less deductions for external borrowing decreased by SEK 2,274 m. to SEK 10,393 m. (12,667). The decrease is partly due to the acquisition of shares in Celsius, lower advance payments from customers and dividend payments. The Group has a strong financial position and net liquidity after deduction for pensions amounted to SEK 8,398 m. (10,719). During 1999, shares in Celsius with a value of SEK 1,267 m. were acquired.
In accordance with applicable accounting practice, Saab has not reported the bonus from SPP as an asset in the financial statements for 1999.
Group equity / assets ratio amounted to 16.8 (13.6) percent and the interest coverage ratio, excluding items affecting comparability, was 13.9 (7.9). Equity / assets ratio excluding Regional Aircraft and Saab Aircraft Leasing was 29.7 (26.5) percent. Shareholders equity amounted to SEK 4,708 m. (4,033), corresponding to SEK 44.23 (37.90) per share.
Cash flow
The cash flow analysis and following comments apply to the period 1 January 31 December 1999, as if Avionics had already been included in the Group in 1998. The cash flow analysis for the period 31 December 1998 - 31 December 1999 is shown in the table "Summary of cash flow statement". Group cash flow from operating activities amounted to SEK 1,861 m. (1,632). Working capital decreased by SEK 2,449 m. (28). Higher utilization of payments for the Gripen and lower advance payments for Regional Aircraft led to a decrease of SEK 1,136 m. in advance payments from customers. Provisions have net decreased by SEK 929 m., of which the years losses in Regional Aircraft and Saab Aircraft Leasing have, in accordance with plans, led to a decrease in provisions of SEK 806 m. Inventories decreased by SEK 524 m., mainly attributable to Regional Aircraft. The cash flow from investments amounted to SEK -1,780 m. (-2,709), of which investments in Celsius AB shares accounted for SEK -1,267 m. in 1999 and investments in lease assets accounted for SEK -2,184 m. in 1998. The operating cash flow amounted to SEK -2,368 m. (-1,105), of which Regional Aircraft SEK -404 m. (-681) and Saab Aircraft Leasing SEK 218 m. (-1,813). The decrease is mainly due to the acquisition of shares in Celsius, continued higher utilization of payments for the Gripen, termination of regional aircraft production and dividend payments.
Capital expenditures
The years capital
expenditures in property, plant and equipment, excluding lease
assets, amounted to SEK 447 m. (521). The decrease compared to
1998, is mainly due to lower investments in property. During
1998, Space and Training Systems built new houses
at their respective premises. Net investments including lease
assets and intangible fixed assets amounted to SEK 466 m.
(2,529), including lease assets of SEK 83 m. (2,184).
Research and development
To maintain a leading position in its business areas, the Group allocates considerable resources to research and development, which occupies over 2,500 persons. The years expenditure on research and development amounted to SEK 3,081 m. (2,128). The increase compared with the previous year is mainly attributable to the consolidation of Avionics, which is a highly research and development intensive operation, and to the planned increases connected with the export version of the Gripen and business ventures in Collaborative Programs. Of the years expenditures for research and development, SEK 2,477 m. (1,750) relates to development paid for by customers.
The new millennium
The transition to the New Millennium passed smoothly. The years expenditures amounted to SEK 23 m. (22) and the years investments in plant and equipment to SEK 15 m. (2). The total costs for the project amount to SEK 48 m. and the total investment is SEK 18 m.
Personnel
At year end 1999, the Group had a total of 8,031 (7,891) employees.
Future development
Products and systems
The order backlog for Gripen and the development of the aircraft system provide an important platform for future operations. Export activities for the Gripen are continuing in collaboration with BAE SYSTEMS in South America, Central Europe and other areas. Although the defense electronics operations in Dynamics and Avionics are linked to the Gripen, they also develop high technology products used in other systems. An example is Dynamics participation in international missile projects. The space operation continues to develop well. Training Systems has a market leading position as a base and will continue to develop existing and new products, while processing new markets. Collaborative Programs is continuing to build up a new operation oriented towards cooperation with the major aircraft manufacturers. Operations in Saab Aircraft Leasing and Saab Aircraft are focused on supplying the fleet of Saab 340 and Saab 2000 aircraft. The work of realizing values in the niche companies within Combitech will continue in accordance with the companys strategy.
Restructuring
In December 1997, Saab made the
decision to end production of regional aircraft and allocated a
reserve of SEK 4,079 m. for restructuring the industrial
operation. Restructuring is proceeding according to plan. During
1999, a number of structural measures were completed, mainly in
regard to production and related commitments. This has enabled a
more reliable assessment of the costs and a decision has
therefore been made on reversal of the reserve of SEK 255 m.
(200) in the 1999 financial statements. At year-end 1999, the
restructuring reserve amounted to SEK 2,376 m.
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 a calculated
market value. At the end of 1997, the loss risk reserve amounted
to SEK 2,728 m. and at the end of 1999 to SEK 2,637 m. No
reversals of the reserve has been made so far, since the leasing
portfolio has a remaining life of 15-20 years.
Parent Company
Sales and income
Sales of the parent company amounted to SEK 4,933 m. (6,857). Operating income amounted to SEK 626 m. (677). Net financial income and expenses amounted to SEK 1,147 m. (798) and income after financial income and expenses was SEK 1,773 m. (1,475). Of the financial net SEK 648 m. (549) are group contributions and dividends.
After appropriations of SEK -45 m. (-79) and paid and deferred tax of SEK -321 m. (-319), net income for the year amounted to SEK 1,407 m. (1,077).
Proposed dividend
The Board of Directors long-term dividend policy is for 20-40 percent of the Groups net income to be distributed. For 1999, the Board of Directors and the President propose to distribute to the shareholders SEK 2.50 (2.00) per share or a total of SEK 266 m. (213), corresponding to 28 (23) percent of the Groups net income. April 13, 2000 has been proposed as the record date and the dividend is expected to be distributed, April 18, 2000.
Annual General Meeting
The Annual General Meeting will be held at Saab, Linköping on Monday, April 10, 2000 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 6, 2000.
Ownership
Saabs principal owners are Investor AB, British Aerospace, US funds, the Wallenberg foundations and AMF.
Accounting Principles
The report has been drawn up in accordance with earlier accounting principles, but with the exception that Recommendation No. 8 of the Financial Accounting Standards Council has been applied from the half-year report 1999. The change consists of translating integrated foreign operations in accordance with the monetary method. No restatement has been made for earlier periods since the effect of the change of accounting method has been considered immaterial.
Linköping February 18, 2000
Bengt Halse
President and Chief Executive
Officer
Sales by business area
SEK m. | 1999 | 1998 | Change | 4th quarter 1999 | 4th quarter 1998 |
Military Aerospace | 5,383 | 4,572 | 18% | 1,393 | 1,561 |
Space | 676 | 607 | 11% | 170 | 192 |
Training Systems | 735 | 621 | 18% | 248 | 281 |
Commercial Aircraft | 812 | 908 | -11% | 212 | 222 |
Combitech | 1,273 | 1,057 | 20% | 365 | 315 |
Internal sales | -298 | -226 | -79 | -64 | |
Saab | 8,581 | 7,539 | 14% | 2,309 | 2,507 |
Regional Aircraft | 746 | 2,698 | 0 | 1,006 | |
Internal sales | -274 | -1,989 | 11 | -553 | |
Saab Group | 9,053 | 8,248 | 10% | 2,320 | 2,960 |
Sales by market
SEK m. | 1999 | 1998 | Change |
Sweden | 5,609 | 4,845 | 16% |
Other EU countries | 1,493 | 1,301 | 15% |
Other European countries | 512 | 470 | 9% |
Total Europe | 7,614 | 6,616 | 15% |
North America | 644 | 658 | -2% |
Asia | 546 | 862 | -37% |
Australia, etc | 217 | 66 | |
Other markets | 32 | 46 | -30% |
Saab Group | 9,053 | 8,248 | 10% |
Operating income by business area
SEK m. | 1999 | 1998 | 4th quarter 1999 | 4th quarter 1998 |
Military Aerospace1 | 523 | 628 | 209 | 279 |
Space | 65 | 59 | 14 | 21 |
Training Systems | 165 | 167 | 61 | 124 |
Commercial Aircraft | -2 | -15 | -2 | -2 |
Combitech | 80 | -166 | 29 | -140 |
Corporate | 18 | 2 | -13 | -7 |
Saab | 849 | 675 | 298 | 275 |
Regional Aircraft | 0 | 0 | 0 | 0 |
Saab Aircraft Leasing | 0 | 0 | 0 | 0 |
Items affecting comparability | 255 | 200 | 81 | 200 |
Saab Group | 1,104 | 875 | 379 | 475 |
1Includes reversal of loss risk reserve of SEK 135 m. (100).
Income statement
SEK m. | 1999 | 1998 | 4th quarter 1999 | 4th quarter 1998 |
Sales | 9,053 | 8,248 | 2,320 | 2,960 |
Cost of goods sold | -6,363 | -6,105 | -1,429 | -2,232 |
Gross margin | 2,690 | 2,143 | 891 | 728 |
Marketing expenses | -798 | -795 | -245 | -219 |
Administrative expenses | -550 | -532 | -142 | -144 |
Research and development costs | -604 | -378 | -226 | -127 |
Items affecting comparability | 255 | 200 | 81 | 200 |
Other operating income | 181 | 206 | 37 | 6 |
Other operating expenses | -71 | -34 | -19 | 9 |
Share in income of associated companies | 1 | 65 | 2 | 22 |
Operating income1 | 1,104 | 875 | 379 | 475 |
Result from financial investments | 273 | 343 | 34 | 128 |
Income after financial items | 1,377 | 1,218 | 413 | 603 |
Taxes | -391 | -279 | -102 | -107 |
Minority interest | -47 | -27 | -12 | -11 |
Net income | 939 | 912 | 299 | 485 |
Earnings per share, SEK2 | 8,82 | 8,55 | 2,81 | 4,54 |
Earnings per share after full conversion, SEK3 | 8,60 | 8,35 | 2,74 | 4,44 |
1Includes depreciation of | -918 | -773 | -250 | -211 |
of which depreciation on leasing assets | -511 | -439 | -158 | -113 |
2Number of shares: 106,459,675 as per December 31, 1999 | ||||
3Number of shares after full conversion: 109,247,175 |
Subdivided summary of income statement, 1999
SEK m. | Saab | Regional Aircraft | SAL | Elimi-nations | Saab Group |
Sales | 8,581 | 746 | 0 | -274 | 9,053 |
Cost of goods sold | -5,836 | -1,517 | 0 | 990 | -6,363 |
Gross margin | 2,745 | -771 | 0 | 716 | 2,690 |
Operating expenses | -1,897 | 0 | -35 | 90 | -1,842 |
Share in income of associated companies | 1 | 0 | 0 | 0 | 1 |
Settle of termination reserve | 0 | 771 | 35 | -806 | 0 |
Total | 849 | 0 | 0 | 0 | 849 |
Reversal of termination reserve | 0 | 255 | 0 | 0 | 255 |
Operating income | 849 | 255 | 0 | 0 | 1,104 |
Income from financial items | 199 | 0 | 74 | 0 | 273 |
Income after financial items | 1,048 | 255 | 74 | 0 | 1,377 |
Five year overview
SEK m., unless otherwise stated | 1999 | 1998 | 1997 | Pro forma 1996 | Pro forma 1995 |
Saab Group | |||||
Sales | 9,053 | 8,248 | 8,674 | 8,159 | 7,925 |
Operating income | 1,104 | 875 | -5,316 | -2,066 | -399 |
Operating margin, % | 12.2 | 10.6 | neg | neg | neg |
Operating margin before depreciation, % | 17.1 | 14.7 | neg | neg | 5.7 |
Income after financial items | 1,377 | 1,218 | -4,845 | -1,572 | 271 |
before items affecting comparability | 1,122 | 1,018 | 576 | -353 | 271 |
Total assets | 28,079 | 29,680 | 30,320 | 28,140 | 24,966 |
of which aircraft leasing operation | 8,877 | 9,119 | 9,604 | 8,817 | 6,711 |
Capital employed | 6,866 | 6,352 | 6,440 | 8,975 | 8,719 |
Return on capital employed, % | 21.3 | 21.4 | neg | neg | 5.0 |
before items affecting comparability, % | 17.6 | 18.2 | 8.8 | neg | 5.0 |
Return on shareholders equity, % | 21.5 | 25.6 | neg | neg | 2.5 |
before items affecting comparability, % | 17.3 | 21.6 | 2.4 | neg | 2.5 |
Profit margin before items affecting comparability, % | 13.4 | 14.1 | 7.8 | neg | 5.5 |
Capital turnover rate | 1.32 | 1.29 | 1.13 | 0.92 | 0.91 |
Equity / assets ratio, % | 16.8 | 13.6 | 10.2 | 22.5 | 23.3 |
Interest coverage ratio, before items affecting comparability | 13.9 | 7.88 | 6.76 | neg | 2.64 |
Earnings per share | 8.82 | 8.55 | - | - | - |
Earnings per share after full conversion | 8.60 | 8.35 | - | - | - |
Dividend2 | 2.50 | 2.00 | - | - | - |
Average no. of employees | 8,092 | 7,742 | 7,716 | 8,131 | 7,991 |
Saab excluding Regional Aircraft and Saab Aircraft Leasing | |||||
Sales | 8,581 | 7,539 | 7,379 | 6,079 | 5,196 |
Operating income | 849 | 675 | 870 | 910 | 618 |
Operating margin, % | 9.9 | 9.0 | 11.8 | 15.0 | 11.9 |
Operating margin before depreciation, % | 15.1 | 13.4 | 16.8 | 21.1 | 18.4 |
Equity / assets ratio 4, % | 29.7 | 25.2 | 21.9 | 31.6 | 26.0 |
11999 proposed dividend.
2Includes reversal of loss risk reserve related to Gripen. 1999-1996 of SEK 135. 100. 313 and 300 m. respectively.
31998 shows January 1. 1999 and includes Avionics. December 31. 1998 the equity / assets ratio was 26.5%.
Key ratios
Percent | 1999 | 1998 | Long term goal |
Saab Group | |||
Pre-tax return on capital employed | 21.3 | 21.4 | 16 |
After-tax return on shareholders equity | 21.5 | 25.6 | 15 |
Dividend, share of profit | 28 | 23 | 20-40 |
Saab, excluding Regional Aircraft and Saab Aircraft Leasing | |||
Operating margin before depreciation | 15.1 | 13.4 | 15 |
Operating margin after depreciation | 9.9 | 9.0 | 10 |
Equity / assets ratio | 29.7 | 26.5 | 30 |
Balance sheet
SEK m. | Dec. 31, 1999 | Jan. 1, 19992 | Dec. 31, 1998 |
Assets | |||
Goodwill and other intangible assets | 375 | 328 | 108 |
Property, plant and equipment, etc | 2,615 | 2,685 | 2,620 |
Lease assets | 8,236 | 8,664 | 8,664 |
Shares | 1,327 | 47 | 103 |
Deferred tax receivables | 507 | 707 | 734 |
Inventories, etc | 1,717 | 2,241 | 2,177 |
Receivables | 2,511 | 2,491 | 2,328 |
Cash and marketable securities | 10,791 | 13,270 | 12,946 |
Total assets | 28,079 | 30,433 | 29,680 |
Shareholders equity and liabilities | |||
Shareholders equity | 4,708 | 4,033 | 4,033 |
Minority interest in subsidiaries | 206 | 148 | 92 |
Provision for pensions | 1,995 | 1,965 | 1,948 |
Other provisions | 5,042 | 6,226 | 6,226 |
Liabilities to credit institutions | 181 | 69 | 69 |
Convertible debenture loan | 217 | 210 | 210 |
Lease obligations | 4,591 | 4,953 | 4,953 |
Advance payments from customers, net1 | 4,055 | 5,191 | 4,881 |
Other liabilities | 7,084 | 7,638 | 7,268 |
Total shareholders equity and liabilities | 28,079 | 30,433 | 29,680 |
1Advance payments from customers, gross | 6,645 | 7,799 | 6,989 |
Less portion used, which has been reduced inventories | -2,590 | -2,608 | -2,108 |
Advance payments from customers, net | 4,055 | 5,191 | 4,881 |
2Including Ericsson
Saab Avionics, which is consolidated in the Saab Group from
January 1, 1999.
Subdivided summary of balance sheet, December 31, 1999
SEK m. | Saab | Regional Aircraft | SAL | Elimi-nations | Saab Group |
Fixed assets | 5,816 | 0 | 1 | -1,500 | 4,317 |
Lease assets | 106 | 0 | 8,130 | 0 | 8,236 |
Deferred tax receivables | 319 | 665 | 0 | -477 | 507 |
Inventories, etc | 1,717 | 0 | 0 | 0 | 1,717 |
Receivables | 1,582 | 10 | 919 | 0 | 2,511 |
Cash and marketable securities | 5,955 | 3,032 | 1,804 | 0 | 10,791 |
Total assets | 15,495 | 3,707 | 10,854 | -1,977 | 28,079 |
Shareholders equity | 4,609 | 0 | 1,599 | -1,500 | 4,708 |
Minority interest in subsidiaries | 204 | 0 | 2 | 0 | 206 |
Provision for pensions | 1,995 | 0 | 0 | 0 | 1,995 |
Other provisions | 29 | 2,376 | 3,114 | -477 | 5,042 |
Liabilities to credit institutions | 181 | 0 | 0 | 0 | 181 |
Convertible debenture loan | 217 | 0 | 0 | 0 | 217 |
Lease obligations | 109 | 0 | 4,482 | 0 | 4,591 |
Advance payments from customers | 4,055 | 0 | 0 | 0 | 4,055 |
Other liabilities | 4,096 | 1,331 | 1,657 | 0 | 7,084 |
Total shareholders equity and liabilities | 15,495 | 3,707 | 10,854 | -1,977 | 28,079 |
Personnel
Number | 1999 | 1998 | Change |
Military Aerospace | 4,585 | 3,991 | 594 |
Space | 644 | 600 | 44 |
Training Systems | 369 | 257 | 112 |
Commercial Aircraft | 1,629 | 1,575 | 54 |
Combitech | 804 | 858 | -54 |
Regional Aircraft | 0 | 610 | -610 |
Saab Group | 8,031 | 7,891 | 140 |
Summary of cash flow statement
SEK m. | 19991) | 1999 | 1998 |
Cash flow from operating activities | |||
Income after
financial items, excl. share in income of associated companies |
1,380 | 1,380 | 1,154 |
Depreciation and write-down charged to income | 918 | 918 | 773 |
Items affecting comparability, without cash effect | -255 | -255 | -200 |
Tax | -182 | -182 | -95 |
Cash flow
from operating activities before changes in working capital |
1,861 | 1,861 | 1,632 |
Working capital | |||
Inventories, etc | 524 | 460 | 711 |
Receivables | 8 | -152 | -35 |
Advance payments from customers | -1,136 | -826 | -549 |
Other liabilities | -554 | -184 | 541 |
Lease obligations | -362 | -362 | -254 |
Provisions | -929 | -929 | -442 |
Change in working capital | -2,449 | -1,993 | -28 |
Cash flow from operating activities | -588 | -132 | 1,604 |
Investments in intangible fixed assets | -104 | -324 | 12 |
Investments in shares | -1,285 | -1,229 | 9 |
Investments in tangible fixed assets | -280 | -345 | -357 |
Investments in lease assets | -83 | -83 | -2,184 |
Change in long-term receivables | -28 | -31 | -189 |
Cash flow from investments | -1,780 | -2,012 | -2,709 |
Operating cash flow | -2,368 | -2,144 | -1,105 |
1) From January 1 to December 31, as if Avionics had all ready been included in the Group in 1998.
Subdivided summary of cash flow statement, January 1 - December 31, 1999
SEK m. | Saab | Regional Aircraft | SAL | Saab Group |
Cash flow
from operating activities before changes in working capital |
1,383 | 0 | 478 | 1,861 |
Change in working capital | -1,715 | -408 | -326 | -2,449 |
Cash flow from operating activities | -332 | -408 | 152 | -588 |
Cash flow from investments | -1,850 | 4 | 66 | -1,780 |
Operating cash flow | -2,182 | -404 | 218 | -2,368 |
Sales and income per quarter
1999 1998
SEK m. | 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | 4th Q | |
Sales | |||||||||
Saab excl regional aircraft | 1,984 | 2,519 | 1,769 | 2,309 | 1,817 | 1,856 | 1,359 | 2,507 | |
Regional Aircraft | 92 | 405 | 249 | 0 | 572 | 743 | 377 | 1,006 | |
Internal sales | -81 | -109 | -95 | 11 | -572 | -495 | -369 | -553 | |
1,995 | 2,815 | 1,923 | 2,320 | 1,817 | 2,104 | 1,367 | 2,960 | ||
Operating income | 167 | 382 | 176 | 379 | 281 | 63 | 56 | 475 | |
of which items affecting comparability | - | 174 | - | 81 | - | - | - | 200 | |
Operating margin excl. items affecting comparability | |||||||||
before depreciation, % | 13.1 | 12.6 | 16.1 | 18.7 | 19.8 | 7.6 | 9.9 | 14.5 | |
after depreciation, % | 8.4 | 8.3 | 9.9 | 12.9 | 15.5 | 3.4 | 4.1 | 11.0 | |
Net financial income | 60 | 112 | 67 | 34 | 68 | 63 | 84 | 128 | |
Income after financial items | 227 | 494 | 243 | 413 | 349 | 126 | 140 | 603 | |
Net income | 150 | 336 | 154 | 299 | 245 | 87 | 95 | 485 | |
Earnings per share, SEK 1) | 1.41 | 3.16 | 1.44 | 2.81 | 2.30 | 0.81 | 0.90 | 4.54 | |
1) Number of shares: 106,459,675 as per December 31, 1999.
Dates for financial information
Interim Report for January - March will be published on April 27, 2000
Interim Report for January - June will be published on July 13, 2000
Interim Report for January - September will be published on October 25, 2000
The 2000 Report will be published in February, 2001
For further information, please contact
Lars Jagerfelt, Vice President, Corporate Communications, tel +46 13 18 71 65
Agneta Kammeby, Investor Relations, tel +46 13 18 71 25
(President Bengt Halse will be available for questions by phone today between 3.15 pm and 3.45 pm.)
The 1999 Report is also published on the Internet www.saab.se
Please visit http://www.bit.se for further information
The following files are available for download: