Saab 2014 Annual Report Download - page 71

FINANCIAL INFORMATION – FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
MSEK Note 2014 2013
Sales 3, 4 23,527 23,750
Cost of goods sold -17,450 -17,422
Gross income 6,077 6,328
Other operating income 5 430 204
Marketing expenses -2,144 -2,082
Administrative expenses -1,214 -1,111
Research and development costs -1,487 -1,762
Other operating expenses 6 -21 -257
Share in income of associated companies and joint ventures 21 18 25
Operating income 10, 11 ,12 1,659 1,345
Financial income 103 62
Financial expenses -239 -428
Net financial items 13 -136 -366
Income before taxes 1,523 979
Taxes 15 -355 -237
Net income for the year 1,168 742
Attributable to:
Parent Company’s shareholders 1,153 741
Non-controlling interest 15 1
Earnings per share before dilution (SEK) 34 10.86 6.98
Earnings per share after dilution (SEK) 34 10.78 6.79
ORDERS
Order bookings were lower in 2014
than in 2013 mainly due to the develop-
ment and production orders of GripenE,
amounting to SEK29.8 billion, that
Saab received in 2013. During 2014 an
order of SEK5.8 billion concerning sup-
port and maintenance equipment for
Gripen E was received.
In all, 80 per cent (87) of order boo-
kings were attributable to defence-
related operations and 45 per cent (30)
were attributable to customers outside
Sweden.
During 2014, index and price
changes had a positive effect on order
bookings of MSEK 346 compared to
MSEK 97 during 2013.
Orders received, where the total
order value exceeded MSEK 100,
represented 61 per cent (80) of total
order bookings.
The order backlog at the end of the
period amounted to MSEK 60,128
compared to MSEK 59,870 at the
beginning of the year.
Order backlog duration:
2015: SEK 17.8 billion
2016: SEK 10.2 billion
2017: SEK 5.7 billion
2018: SEK 5.6 billion
After 2018: SEK 20.8 billion
SALES BY MARKET REGION
MSEK
Jan-Dec
2014
Jan-Dec
2013
Sweden 10,512 9,814
EU excluding Sweden 3,770 3,933
Rest of Europe 592 621
Americas 2,895 2,987
Asia 4,007 4,311
Africa 573 930
Australia, etc. 1,178 1,154
Total 23,527 23,750
SALES BY MARKET SEGMENTS
MSEK
Jan-Dec
2014
Jan-Dec
2013
Air 10,481 10,693
Land 5,240 6,462
Naval 3,192 2,292
Civil Security 2,330 1,979
Commercial Aeronautics 1,838 1,615
Other 446 709
Total 23,527 23,750
SALES
During 2014, sales declined 1 per cent
compared to 2013.
Acquisitions and the deconsolida-
tion of Saab Grintek Technologies (Pty)
Ltd had a positive effect of 2 per cent.
Currency effects had no material
impact on sales.
Sales in markets outside of Sweden
amounted to MSEK 13,015 (13,936),
or 55 per cent (59), of total sales.
79per cent (81) of sales were related
to the defence market.
INCOME, MARGIN AND PROFITABILITY
The gross margin during 2014 amounted to 25.8 per cent (26.6) and was lower
than 2013, mainly due to a changed product and project mix. Total depreciation,
amortisation and write-downs amounted to MSEK 872 (1,047). Depreciation and
write-downs of tangible fixed assets amounted to MSEK 398 (398) while deprecia-
tion of the leasing fleet amounted to MSEK 8 (25).
Total investments in research and development (R&D) amounted to MSEK 5 970
(6 543). Internally funded expenditures in R&D amounted to MSEK 1,338 (1,332),
of which a total of MSEK 171 (24) was capitalised. The internally funded invest-
ments within radar and sensor technology development continued during the year,
and capitalisation was at a higher level than during 2013 as orders were received in
this area.
Amortisation of intangible fixed assets amounted to MSEK 466 (624), of which
amortisation of capitalised development expenditures amounted to MSEK 320
(454).
The share of income in associated companies and joint ventures amounted to
MSEK 18 (25).
The operating income amounted to MSEK 1,659 (1,345) with an operating mar-
gin of 7.1 per cent (5.7). The operating income adjusted for non-recurring items
amounted to MSEK 1,566 (1,576) and the operating margin was 6.7 per cent (6.6).
The operating income for 2014 was impacted by a non-recurring item of MSEK93
concerning a capital gain related to the divestment of a minority shareholding in
Hawker Pacific Airservices Ltd. 2013 was negatively impacted by a non-recurring
item amounting to MSEK 231 as a result of a lost legal dispute.
ThyssenKrupp Marine Systems (Saab Kockums) was acquired in July 2014.
At that time the business had a declining order backlog, low activity level and poor
profitability. The takeover, and hence new business conditions, had a positive
impact on the operating income in 2014.
During 2014, reversal of risk provisions relating to Saab’s leasing fleet of turbo
prop aircraft (SAL), contributed positively to the operating income. The positive
impact was at the same level as for 2013.
During the fourth quarter, an agreement for the right of use of an IT platform
developed by Saab, had a positive effect on the operating income.
During the year, the divestment of a Group company, whose assets were mainly
related to property, had a positive impact on the operating income.
The implementation of the efficiency measures that were initiated during 2013
were finished in 2014 as the objective of efficiencies of approximately MSEK 500
were reached, mainly through capacity adjustments.
Current and deferred taxes amounted to MSEK -355 (-237), the equivalent to an
effective tax rate of 23 per cent (24).
The pre-tax return on capital employed was 11.1 per cent (9.1) and the after-tax
return on equity was 9.9 per cent (6.3), both measured over a rolling 12-month
period.
SAAB ANNUAL REPORT 2014 – 67