Saab 2014 Annual Report Download - page 45

ADMINISTRATION REPORT
GROUP – FINANCIAL REVIEW 2014
FINANCIAL REVIEW 2014
Saab AB (publ.), corporate identity number
556036-0793, has its registered address in Linköping,
Sweden and its head oce at Gustavlundsvägen
42, Bromma. e company’s mailing address is
Box 12062, SE-102 22 Stockholm, Sweden and its
telephone number +46 8,463 00 00.
Saab has been listed on the Nasdaq Stockholm
since 1998 and on the Large Cap List since October
2006. e largest shareholder is Investor AB, with
30 per cent of the shares, corresponding to 41 per
cent of the votes. e share of the votes is calcula-
ted based on the number of shares, excluding
treasury shares, at year-end. e total number of
shares in the company is 109,150,344, distributed
between 1,907,123 Series A shares with ten votes
each and 107,243,221 Series B shares with one vote
each. At year-end, a total of 3,650,221 Series B shares
had been repurchased to guarantee the Group’s
various share matching plans. e repurchased
shares are held as treasury shares.
In accordance with the Swedish Annual
Account Act, Saab has prepared a corporate gover-
nance report. e corporate governance report,
found here on pages 54–62, contains the Board of
Directors’ report on internal control of nancial
reporting, which includes information for both
the Parent Company and the Group.
OPERATIONS
As one of the world’s leading high technology com-
panies, Saab oers products, solutions and services
for military defence and civil security. In 2014, the
Group had customers in over 100 countries, while
research and development was concentrated in
Sweden. Most of the Group’s employees work
in Europe, South Africa, the US and Australia,
but people are also on site in oces in more than
30 countries around the world.
Saab was organised in six business areas in
2014: Aeronautics, Dynamics, Electronic Defence
Systems, Security and Defence Solutions, Support
and Services, and Combitech. Combitech, which
provides consulting services, is an independent,
wholly owned subsidiary of Saab.
As of 1 January 2015, Combitech is part of
a new business area, Industrial Products and
Services, which will bring together the Group’s
business-to-business (B2B) business units. In
addition to Combitech, the business units include
Aerostructures (previously reported within
business area Aeronautics), Avionics Systems
(previously reported within Electronic Defence
Systems), Saab Ventures’ product portfolio
(previously reported within Saab Corporate),
and a development project (previously reported
within Saab Corporate).
CORPORATE
In addition to the business areas, Corporate com-
prises Group sta and departments and secondary
operations as well as Saab Aircra Leasing.
Corporate reported an operating income of
MSEK -15 (-221) in 2014.
During 2014, the reversal of risk provisions,
attributable to the remaining risks related to Saab’s
lease eet of turboprop aircra, contributed positi-
vely to the operating income. e positive eect
was at thesame level as in 2013.
In 2014, the owned share of the portfolio was
divested and the part held via operating leases has
been reduced. As of 31 December 2014, Saab
has a lease portfolio of 6 (49) aircra, consisting
of anowned share of 0 (14) and a leased share of
6 (35). e agreements for the leased aircra
expired in January and the lease portfolio will be
discontinued during 2015.
In October, Saab divested its holding in Hawker
Pacic Airservices Ltd., which resulted in a capital
gain amounting to MSEK 93. During the year,
the divestment of a Group company, whose assets
were mainly related to property, had a positive
impact on the operating income.
During the second quarter of 2013, a payment
of MSEK 314 was made relating to a lost legal
dispute was made. MSEK 231 of the payment
was reported in operating income and MSEK 83
related to interest cost in nancial net.
LONG-TERM FINANCIAL OBJECTIVES
e long-term nancial goals as of 2011 consist
of goals for organic sales growth, operating margin
(EBIT) and the equity/asset ratio.
Average organic sales growth of 5 per cent per
year over a business cycle. In 2014, organic sales
declined by -3 per cent (-2).
Average operating margin (EBIT) of at least
10 per cent per year over a business cycle. In 2014,
the operating margin (EBIT) was 7.1 per cent (5.7).
e equity/assets ratio will exceed 30 per cent.
At year-end 2014, the equity/assets ratio was
38.5 per cent (44.0).
DIVIDEND AND DIVIDEND POLICY
Saab has a long-term dividend goal to distribute
20–40 per cent of net income over a business
cycle to the shareholders. For 2014, the Board of
Directors is proposing a dividend of SEK 4.75 (4.50)
per share, corresponding to 43 per cent (65) of
net income.
OUTLOOK 2015
In 2015, we estimate sales to increase more than
Saab’s long-term goal: annual organic sales growth
of 5 per cent.
e operating margin 2015 excluding material
non-recurring items is expected to be in line with
the operating margin in 2014. In 2015, increased
internally funded research and development
eorts within Aeronautics will have a negative
impact on the operating margin.
SAAB ANNUAL REPORT 2014 – 41