Saab 2014 Annual Report Download - page 31

ACTIVITIES DURING THE YEAR
Order bookings decreased by 55 per cent to
SEK22.6 billion during the year. e decrease is
mainly because Saab received development orders
in 2013 related to Gripen E for Sweden. In 2014,
Saab signed a contract with the Brazilian govern-
ment on the development and production of
36 next generation Gripen. Deliveries are planned
for 2019-2024 and the order value is approximately
SEK 39.3 billion. e contract enters into force
when certain criteria are met, which is expected in
the rst half of 2015, at which point Saab will
recognise the order.
Saab also received a number of other important
orders, including to generate construction and
production plans for Sweden’s next generation
submarines and for support and maintenance
systems for Gripen E from FMV as well as orders
for military training systems from Finland and
the UK.
e decrease in order bookings should be seen
in light of the record-high Gripen orders in 2013,
which were signicantly higher than the preceding
years. e contracts extend over many years,
however, and the majority of the order backlog
applies to 2018 and later.
Total sales decreased by 1 per cent compared to
2013. Acquisitions and the deconsolidation of Saab
Grintek Defence (Pty) Ltd. had a positive impact
on sales by 2 per cent, while currency eects had
no material impact on sales. Saab’s goal is to grow
organically by 5 per cent per year over a business
cycle.
e operating margin was 7.1 per cent (5.7).
Excluding material non-recurring items, the
operating margin was 6.7 per cent (6.6). e goal
is an operating margin of 10 per cent.
PRIORITIES GOING FORWARD
To remain successful and achieve the long-term
goals in terms of growth and protability,
activities are focused on a number of areas.
• R&D investments are concentrated in the lar-
gest and strategically most important product
areas. In addition to Gripen, this includes radar
and the development of the next generation
submarine.
• Orders from Sweden and Brazil for the next
generation Gripen in 2013 and 2014 were
important milestones. ey also provide an
excellent foundation to market the Gripen
system to more countries and further develop
the ghter. e development of Gripen E conti-
nued according to plan in 2014.
• Sweden alongside the rest of the Nordic region
is an important base for Saab. Future growth,
however, will primarily be in other markets.
is is supported by a market area organisation
with a strong local presence in key markets.
e purpose of the organisation is to quickly
pick up on trends and adapt the portfolio and
oering to the market as well as to increase the
number of small and medium-sized orders.
• Demands are increasing from many new
customers to include industrial co-operations
in major deals. Technology transfers are there-
fore a key component to succeed in many
rapidly growing markets. Saab has extensive
experience with successful technology transfers
and industrial co-operation programmes.
• In addition, a continued evaluation of acquisi-
tions is underway in areas that complement the
product portfolio and in priority geographical
markets.
• Saab continues to promote openness, transpa-
rency and responsible business based on the
Saab Code of Conduct.
A growing order backlog
supports growth
STRATEGY
PROFITABLE GROWTH
Saab will achieve protable long-term growth by developing innovative, high-tech, cost
efcient solutions while at the same time strengthening customer relationships through a local
presence in key markets. High order bookings during 2013 and 2014 raised the order backlog
to a record level and created a foundation for future sales growth. The contracts extend over
many years, however, and the majority of the order backlog applies to 2018 and later.
MSEK
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1413121110
Order backlog Order bookings
Sales Organic growth
Sales and organic growth
0
5,000
10,000
15,000
20,000
25,000
MSEK %
-5
-4
-3
-2
-1
0
1413121110
SAAB ANNUAL REPORT 2014 – 27