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FINANCIAL INFORMATION – NOTES
NOTE 4 SEGMENT REPORTING
Saab is a leading high-technology company, with its main operations in defence,
aviation and civil security. Operations are primarily focused on well-defined areas
in defence electronics and missile systems as well as military and commercial avia-
tion. Saab is also active in technical services and maintenance. Saab has a strong
position in Sweden and the main part of sales is generated in Europe. In addition
Saab has a local presence in South Africa, Australia, the US and other selected
countries globally. Saab’s operating and management structure is divided into six
business areas which also represent operating segments; Aeronautics, Dynamics,
Electronic Defence Systems, Security and Defence Solutions, Support and Servi-
ces, and Combitech. The business areas are described below. Complementing
them is Corporate, which comprises Group staff and departments as well as other
non-core operations. Comparative numbers for 2013 have been adjusted due to a
new structure, see note 49 for more information. Comparative numbers for 2014,
adjusted for the new organisational structure implemented as of 1 January 2015,
can be found in note 50.
Aeronautics
Aeronautics engages in advanced development of military and civil aviation tech-
nology. The product portfolio includes the Gripen combat aircraft system and
Unmanned Aerial Systems (UAS). Aeronautics also manufactures aircraft compo-
nents for Saab’s own aircraft as well as for passenger aircraft produced by others.
Dynamics
Dynamics offers a highly competitive product range comprising ground combat
weapons, missile systems, torpedoes, unmanned underwater vehicles and signa-
ture management systems for armed forces as well as remotely operated vehicles
for the offshore industry.
Electronic Defence Systems
These operations are based on Saab’s close interaction with customers requiring
efficient solutions for surveillance and for threat detection, location and protection.
This has created a unique competence in the area of radar and electronic warfare,
and a product portfolio covering airborne, land-based and naval radar, electronic
support measures and self-protection systems. For increased flight mission effi-
ciency and flight safety we supply avionics for both civil and military customers.
Security and Defence Solutions
Operations comprise combat management systems for Navy, Airforce, and
Army as well as the design and maintenance of submarines and surface vessels.
The portfolio also includes training and simulation systems, security systems and
secure communication solutions, and maritime and air traffic management systems.
Support and Services
Support and Services offers reliable and cost-efficient service and support for all
of Saab’s markets. This primarily includes integrated support solutions, technical
maintenance and logistics, and products, solutions and services for military and
civil missions in locations with limited infrastructure.
Combitech
Combitech, an independent company in the Saab Group, is one of Sweden’s lar-
gest technology consulting firms. Combitech combines technological excellence
with deep industry knowledge, comprehensive understanding and a particular
focus on environment and security.
Significant non-recurring items not affecting cash flow
Significant non-recurring items not affecting cash flow in 2013 is a non-recurring
item of MSEK -133, related to the write-down of the value of shareholding in
Pipavav.
Information on major customers
Saab has one customer, the Swedish Defence Materiel Administration (FMV),
which accounts for 10 per cent or more of the Group’s sales. FMV is a customer
of all business areas, generating total sales of MSEK 8,086 (7,814) in 2014.
Information on geographical areas
External sales are distributed to the market where the customer is domiciled, while
fixed assets are distributed to the market where the asset is geographically located.
Seasonal variation
A major part of Saab’s business is related to large projects where the revenue is
recognised by using the percentage of completion method. The costs incurred in
these projects are normally lower during the third quarter compared with the other
quarters. The fourth quarter is also usually affected by a higher number of deliveries,
mainly within Dynamics.
86 – SAAB ANNUAL REPORT 2014