Saabpresents 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.
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)
|MSEK||Full Year 2018||Full Year 2017 1)||Change, %||Q4 2018||Q4 2017 1)|
|Gross margin, %||23.4||23.8||25.3||24.8|
|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|
|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 the full Saab 2018 Year End Report, please click here
For more information and explanations regarding the usage of these key ratios, please click here
Photo courtesy Saab