Saab 2012 Annual Report Download

Download and view the complete annual report

Please find the complete 2012 Saab annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 150

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150

COMPLEX WORLD: ADVANTAGE SAAB
ANNUAL REPORT 2012

Table of contents

  • Page 1
    COMPLEX WORLD: ADVANTAGE SAAB A N N UA L R E P O R T 20 12

  • Page 2
    ...- Profitable growth - Performance - Portfolio - People Geographic areas Market segments Sustainability - Ethics - Society - Environment - Employees 18 19 20 22 28 30 32 36 37 38 40 ADMINISTRATION REPORT Financial review 44 Business areas 46 Risks and risk 52 management Other information 56 Financial...

  • Page 3
    ..., products and services for military defence and security. New technology is continuously developed, adapted and improved to meet customers' changing needs in over 100 countries. The most important markets are Europe, Asia and North America. Saab has about 14,000 employees and annual sales in 2012...

  • Page 4
    ... orders from Sweden are expected in 2013-2014. The total value of possible orders under the agreement amounts to a total of SEK 47.2 billion. Long-term financial goals and results Sales, SEK billion Organic sales growth shall average 5 per cent annually over a business cycle. In 2012, the organic...

  • Page 5
    .... OUR BUSINESS CONCEPT Saab constantly develops, adopts and improves new technology to meet changing customer needs. Saab serves the global market of governments, authorities and corporations with products, services and solutions for military defence, commercial aviation and civil security. MARKET...

  • Page 6
    ... years have driven and developed Saab into a broad-based Swedish innovation powerhouse and a strong competitor on the international defence and security market. World-class, high technology expertise has been developed and the list of ground-breaking innovations is long. As an international company...

  • Page 7
    ... order was secured in cooperation with BAE Systems Inc., with whom we collaborate in North America with respect to the U.S. Army Night Vision and Electronic Sensor Directorate (NVEDS). The system's excellent high resolution optical display provides the user with crisp, clear flight information and...

  • Page 8
    ... 75 years as a Swedish defence materiel company and the year significant steps were taken to develop and sell a new generation of fighter aircraft, Gripen E, to both Sweden and Switzerland. During the year, Sweden approached a strong position in the West in terms of its air defence system. This...

  • Page 9
    ... to commercial Stockholm, February 2013 Marcus Wallenberg Chairman 2012 - A jubilee year for Saab Saab's celebrated its 75th anniversary on 2 April 2012 with a party in Linköping and the participation of Gripen aircraft from four countries in the Lion Effort military exercise in Sweden. Aviation...

  • Page 10
    ... profitable growth through continued cost-efficiency measures and close cooperation with our customers. We are investing even more in markets that have a clear need for competitive products, systems and solutions. A step in the right direction During the year we secured several important orders...

  • Page 11
    ...employees work every day to achieve greater cost-efficiency in order to deliver products and services with power, performance and value for money. With "The Saab Way" as a control instrument, we have excellent prospects to maintain our advantage here. have therefore put great emphasis on developing...

  • Page 12
    ... is true of the development and production, purchase price, operating costs and maintenance - the entire lifecycle. Operating and maintenance costs throughout the operational life make up a large part of the cost of a fighter system. A comparison between Gripen and its main competitors shows that...

  • Page 13
    .... Gripen version C/D currently uses a traditional radar, where an antenna sweeps all or part of a search area. Gripen 2012 and 2013 On 24 August, the Swedish Defence and Security Export Agency (FXM) and Armasuisse, the Swiss Federal Department of Defence, Civil Protection and Sport, signed...

  • Page 14
    ... and opportunities must be more clearly included. New technologies The technology factor is increasingly important for companies like Saab. Developing and retaining a technological advantage will be crucial in the competition in the defence and civil markets alike. 10 SAAB ANNUAL REPORT 2012

  • Page 15
    ... zone in between. Understanding the development of, and overlap between, the two main dimensions of security policy is critical to also understanding the opportunities, breadth and potential in Saab's market. The three areas of training, command and control, and maintenance are "links" as well as...

  • Page 16
    ... solutions from companies that are highly familiar with international relations as well as the specific conditions in local markets. To increase the chances of being selected as business partner and to have a portion of development financed through government appropriations, it is important...

  • Page 17
    ...solutions with better energy performance to reduce impact on the climate and environment. This affects both the focus of Saab's development projects and the need to run the business in a sustainable manner. Read more about our sustainability work and development projects on pages 32-43. SAAB ANNUAL...

  • Page 18
    ...Driving factors Multi-national missions and new technologies drive the need for open architecture, system integration and interoperability. There is growing interest in long-endurance solutions in which sensors and combat management are prioritised. Read more on page 46. 14 SAAB ANNUAL REPORT 2012...

  • Page 19
    ... sales 2012 Operations Offers a product portfolio comprising command and control systems, airborne early warning systems, training and simulation, air traffic management, security and monitoring systems and communication solutions. Operations Offers mainly support solutions, technical maintenance...

  • Page 20
    ... six market areas were established on 1 January, 2013. Despite challenging market conditions throughout 2012, order bookings increased by 9 per cent in the year, partly as a result of larger development and support orders from the Swedish Defence Materiel Administration regarding the Gripen system...

  • Page 21
    ... important steps in our strategic priorities to achieve our long-term goals. PERFORMANCE PROFITABLE GROWTH PEOPLE 3. PORTFOLIO Activities during the year During 2012, a number of strategic acquisitions were made that complement the portfolio and strengthen market position. Sörman Information...

  • Page 22
    ... the combat management system for aircraft carrier H.T.M.S Chakri Naruebet. Saab is now part of the Thai Navy's three most important vessels and, through connection to the Thai Air Force's Gripen and Erieye, capacity and resources can be used more effectively. Sweden took the decision during 2012 to...

  • Page 23
    ... and Defence Systems, Support and Services and Saab Systems Grintek, which is part of Security and Defence Solutions. A uniform Quality and Environment certificate (ISO 9001 and ISO 14001) for operations in Sweden, South Africa and Australia was finalised during the year. Priorities 2013-2016 To...

  • Page 24
    ...greatly improving internal governance of product development, this also provides opportunities for better dialogue with customers and thereby makes our development more market-adjusted and cost-efficient. The portfolio management was developed this year. This is a good comprehensive control tool for...

  • Page 25
    ... fusion systems. Priorities 2013-2016 Continue to invest in product development and renewal in research and development. Sweden will continue to be Saab's largest market in terms of customer cooperation in R&D, but this procedure is also highly relevant in other geographic markets. A shared product...

  • Page 26
    ...terms of retaining and attracting employees that can develop the business. The goal is to be a company where the values expertise, trust and drive characterise everything that is done. Saab is an international high technology company with a long tradition of understanding and anticipating the market...

  • Page 27
    ...berg, Deputy Head of Land Division within the Support and Services business area, launched her career at Saab by moving to the U.S. to work as a consultant. She returned home to Sweden three years later, firmly convinced that Saab was where she wanted to pursue her career. - Tomorrow's employees are...

  • Page 28
    ... depth. Sapphires then conducts the search entirely on its own. There are many possible future areas of application for Sapphires: it can be used in all marine patrol contexts, from environmental monitoring to monitoring gas and oil pipelines on the ocean floor. 24 SAAB ANNUAL REPORT 2012

  • Page 29
    ... support weapon system and each new model attracts more customers. Carl-Gustaf M3 has been sold to over 40 countries. The U.S. Army clearly approved of the system's reliability and capability when it for the second time ordered the 84 mm recoilless weapon system in 2012. After having long been used...

  • Page 30
    ...'s entire market organisation to achieve success in global markets. In addition to 14 Gripen aircraft leased by the Czech Republic from Sweden, Saab delivered Live Training Systems, camouflage equipment, communication networks and security solutions to the Czech Army. 26 SAAB ANNUAL REPORT 2012

  • Page 31
    ... Since 2010 Saab has been commissioned to set up and maintain a service centre. This offers preventative and reparative maintenance, user training and technical staff, maintenance planning and documentation, as well as inventory management. Important order for security system in New Zealand In 2012...

  • Page 32
    ... order bookings were generated outside of Sweden. SWEDEN Saab's position Sweden has been our largest market since Saab was founded. Today we have approximately 11,100 employees and the majority of our research and development in the country. Orders and sales increased slightly year on year in 2012...

  • Page 33
    ... and security. In total, we currently have approximately 400 employees in Australia. Parts of the Asian market are not accessible to Saab for political reasons. In 2012 orders decreased by 33 per cent year on year. We received an order from Thailand for an upgrade of the combat management systems in...

  • Page 34
    ...and air defence systems, training and logistics solutions and support weapons. Our sales totalled MSEK 7,997 (7,201). Sales, SEK billion 10.9 10.4 10.6 9.3 39% Share of total sales. Sales, SEK billion 7.2 7.6 8.0 7.2 33% Share of total sales. 2009 2010 2011 2012 2009 2010 2011 2012 30 SAAB...

  • Page 35
    ...CIVIL SECURITY The civil security system market currently generates slightly over SEK 450 billion a year and is anticipating annual growth of 7 per cent, divided between protection for borders, ports, energy systems, airports and different management and communication systems for rescue services and...

  • Page 36
    ... to generate long-term, successful development for our business. Saab's primary stakeholders are customers and partners, employees, shareholders and the communities in which we are active. Customers and partners expect Saab to offer cost-effective solutions designed according to their specific needs...

  • Page 37
    ... impact in everything we do related to products, services and production. Our employees are our most important asset and, as a responsible company, we ensure that we can retain and attract new employees. 5IFXBZGPSXBSE It is essential that our sustainability work is clearly integrated with our...

  • Page 38
    ... up environmental work within Saab. EMPLOYEES Saab's Senior Vice President and Head of Group Human Resources has overarching responsibility for HR work within the Group. Coordination and development of the Group's HR work is handled by the HR units within each business area under the leadership...

  • Page 39
    ... the development and diffusion of environmentally friendly technologies. Saab works actively with minimising environmental impact. Protecting the environment is a natural aspect of Saab's everyday operations, both in community and through technology and our products. Knowledge is an important factor...

  • Page 40
    ... employees within the marketing and sales organisation receive training on the implications of the requirements imposed on business managers to conduct a corruption risk assessment in conjunction with each transaction. Saab continued training efforts in this area during 2012 - including information...

  • Page 41
    ...the business area Support and Services under a project that ran from October 2012 through February 2013. The project entailed ensuring that the Coast Guard's aircraft, which were in the air six hours per day and six days per week, could carry out their duties without any problem. SAAB ANNUAL REPORT...

  • Page 42
    ... by the Swedish National Chemicals Inspectorate for use of trichloroethylene at production facilities in Linköping and Järfälla, Sweden. The business areas developed new action plans in 2012 for the phase-out of hazardous substances. Decisions were also taken in several development projects to...

  • Page 43
    ... 36 2 1 2008 2009 2010 2011 2012 2008 2009 2010 2011 2 2012 The increase in the emission of VOCs during 2012 is due to increased production. Saab Barracuda, Aeronautics and Support & Services have the largest emissions. Trichloroethylene is used in Aeronautics and Electronic Defence System. The...

  • Page 44
    ... management with a focus on business orientation, communication and involvement of employees at all levels. r Secure and develop future talent pipeline by strengthening Saab's employer offering. r Continue to strengthen and harmonise HR support from a global perspective. 40 SAAB ANNUAL REPORT 2012

  • Page 45
    ... new employees in 2012 and have thus placed great focus on induction, with our Group-wide induction programme "This is Saab" proving to be of great value. We had a high response rate to our annual employee survey. This demonstrates a commitment to be a part of developing our operations and our work...

  • Page 46
    ... (Medical Evacuation). The aircraft was displayed for the first time at the 2012 Aerospace Forum in Linköping. It has also been demonstrated in London, at the Farnborough International Air Show, and at African Aerospace & Defence in South Africa in September 2012. 42 SAAB ANNUAL REPORT 2012

  • Page 47
    ... of the Swedish Armed Forces, which are currently using three units in the field. Simplicity and flexibility have been the guiding principles in the development, and the system can be easily updated in line with technological developments. Negotiations are ongoing with several other markets, and...

  • Page 48
    ... high technology companies, Saab offers products, solutions and services for military defence and civil security. In 2012, we had customers in over 100 countries while research and development are principally carried out in Sweden. We are primarily have operations in Sweden, South Africa, Australia...

  • Page 49
    ... both starting 1 January, 2013. t Complete List of Saab Market Areas as of 1 January, 2013: AMERICAS - Washington D.C., USA ASIA PACIFIC - Bangkok, Thailand EUROPE & GREATER MIDDLE EAST - London, UK INDIA - New Delhi, India NORDIC & BALTI C - Stockholm, Sweden SUB -SAHARAN AFRICA - Centurion, South...

  • Page 50
    ... 2010 2011 2012 2009 2010 2011 2012 Services and solutions r 5IF(SJQFOÃ HIUFS XIJDIPGGFSTDPOUJOVPVTVQHSBEFT IJHI cost efficiencies and a level of performance that meets the high demands of armed forces. r 5IFVONBOOFEIFMJDPQUFSTZTUFNXJUINPEVMBSEFTJHOJTBMTP part of the product...

  • Page 51
    ... The number of employees increased due to a higher activity level. In the fourth quarter, it was announced that Görgen Johansson had been appointed Head of the business area Dynamics. He took up his position on 1 January 2013 and is part of the Group Management Team. SAAB ANNUAL REPORT 2012 47

  • Page 52
    ADMINISTRATION REPORT > BUSINESS AREAS ELECTRONIC DEFENCE SYSTEMS &MFDUSPOJD%FGFODF...employees 2,739 3,229 5,442 6,855 4,276 4,561 538 785 12.6 17.2 117 297 2.7 6.5 -238 413 2,620 2,557 3.2 2.6 2.7 2.7 2.3 0.5 2009 2010 2011 2012 2009 2010 2011 2012 2009 2010 2011 2012 Services and solutions...

  • Page 53
    ...of Security and Defence Solution's business in South Africa, regarding radio communications with about 100 employees, was sold as part of the reorganisation in the third quarter 2012. The number of employees increased as a result of the acquisition of HITT that had 188 employees. SAAB ANNUAL REPORT...

  • Page 54
    ... REPORT > BUSINESS AREAS SUPPORT AND SERVICES ...bookings Order backlog Sales EBITDA EBITDA-margin, % Operating income Adjusted operating margin, % Operating cash ï¬,ow No. of employees 3.2 11.5 10.3 2009 2010 2011 2012 2009 2010 2011 2012 2009 2010 2011 2012 Services and solutions...

  • Page 55
    ..., an independent business area within the Saab Group, is one of Sweden's largest technology consulting firms. By combining technology with cutting-edge expertise in the environment and security, we create solutions for our clients' specific needs. 5% share of sales. Order bookings, SEK billion...

  • Page 56
    ... a certain industry or market. Certain risks can be fully managed by the company, while others are out of its control. Saab's operations primarily involve the development, production and supply of technologically advanced hardware and software to customers around the world. The international part of...

  • Page 57
    ...Capitalised development costs are shown in Note 16. Operating risks A number of significant areas have been identified with respect to operating risks, which are important in assessing the Group's results and financial position. Long-term customer projects Management of long-term customer projects...

  • Page 58
    ... corruption. All employees within the marketing and sales organisation are trained in the significance of the requirements for business managers to perform a corruption assessement in relation to every business transaction. During the year Saab continued training efforts within this area, that also...

  • Page 59
    ... also developed in 2012. Every contract with a customer to supply a product, solution or service is always preceded by a thorough analysis of the conditions and risks associated with the delivery, based on an internal process established within Saab for the management of customer contracts. Saab...

  • Page 60
    ...to the Annual General Meeting 2012 The Board of Directors proposed that the Annual General Meeting resolved on the implementation of a Share Matching Plan 2012 and a Performance Share Plan 2012. The Annual General Meeting resolved in accordance with the Board's proposal. 56 SAAB ANNUAL REPORT 2012

  • Page 61
    ... to include employees in Denmark, Germany, the UK, the U.S., Switzerland and Australia. South Africa was included in 2009, Finland in 2010 and thereafter Czech Republic in 2011. India will be included in the Share Matching Plan 2012 starting in January 2013. In April 2008, Saab's Annual General...

  • Page 62
    ... income Financial risk management and financial instruments Assets pledged and contingent liabilities Transactions with related parties Group companies Untaxed reserves Statement of cash ï¬,ows, supplemental information Information on Parent Company Environmental report Exchange rates used in...

  • Page 63
    ... (14,819), or 64 per cent (63) of total sales. Of sales, 82 per cent (84) was related to the defence market. MSEK Sweden EU excluding Sweden Rest of Europe Americas Asia Africa Australia, etc. Total MSEK Air Land Naval Civil Security Commercial Aeronautics Other Total SAAB ANNUAL REPORT 2012 59

  • Page 64
    ... on short and long-term interestbearing liabilities. During 2012 lower interest rates in combination with an on average higher yearly cash position compared to 2011 led to a higher result. The currency gains/losses reported above are related to the tender portfolio where the hedges were valued at...

  • Page 65
    ...the end of December 2012. During the year Saab has acquired Sörman Information, Bayes Risk Management AS, HITT N.V., and MEDAV GmbH as well as paid out dividend to shareholders. In 2009, Saab changed its view on the application of the accounting principles for development costs. As a result of this...

  • Page 66
    ...409 520 1,022 1,785 628 244 747 8,629 746 14,321 Liabilities attributable to assets held for sale Total liabilities 32 15,582 18,730 TOTAL EQUITY AND LIABILITIES 29,679 31,799 For information on the Group's assets pledged and contingent liabilities, see Note 42. 62 SAAB ANNUAL REPORT 2012

  • Page 67
    ...-367 1 13,069 Opening balance, 1 January 2012 Net comprehensive income for the year Reallocation of revaluation reserve Transactions with shareholders: Share matching plan Dividend Acquisition and sale of non-controlling interest Closing balance, 31 December 2012 1,746 - 543 - 457 74 - -51 -175...

  • Page 68
    ...operating cash ï¬,ow, see Note 46. CASH FLOW FOR THE YEAR Liquid assets at beginning of year Exchange rate difference in liquid assets Liquid assets at year-end For Saab's operating cash ï¬,ow, see Note 46 and page 65. 46 -276 1,918 -26 1,616 -600 2,544 -26 1,918 46 64 SAAB ANNUAL REPORT 2012

  • Page 69
    FINANCIAL INFORMATION > FINANCIAL STATEMENTS Specification of operating cash ï¬,ow Saab excl acquisitions and divestments 2,511 Acquisitions and divestments Total Group 2012 2,511 Total Group 2011 2,342 MSEK Cash ï¬,ow from operating activities before changes in working capital CASH FLOW FROM ...

  • Page 70
    ...-1,143 219 -3 819 SALES AND INCOME The Parent Company includes units within the business areas Aeronautics, Electronic Defence Systems, Security and Defence Solutions and Support and Services. Group staff and Group support are included as well. The Parent Company's sales in 2012 amounted to MSEK 15...

  • Page 71
    ... expenditures in property, plant and equipment amounted to MSEK 185 (168). Investments in intangible assets amounted to MSEK 48 (22). At the end of December 2012, the Parent Company had 8,737 employees, compared to 7,873 at the beginning of the year. SAAB ANNUAL REPORT 2012 67

  • Page 72
    FINANCIAL INFORMATION > FINANCIAL STATEMENTS PARENT COMPANY BALANCE SHEET as of 31 December MSEK EQUITY AND LIABILITIES Equity Restricted equity Capital stock Revaluation reserve Statutory reserve Unrestricted equity Retained earnings Net income for the year... 10 5,528 68 SAAB ANNUAL REPORT 2012

  • Page 73
    ...comprehensive income for the year Transactions with shareholders: Dividend to shareholders Share matching plan Closing balance, 31 December 2012 1,746 713 543 3,988 - 6,990 - -6 - 6 - - - - - - 965 965 1,746 707 543 -474 46 3,566 965 -474 46 7,527 SAAB ANNUAL REPORT 2012 69

  • Page 74
    FINANCIAL INFORMATION > FINANCIAL STATEMENTS PARENT COMPANY STATEMENT OF CASH FLOWS 1 January - 31 December MSEK Operating activities Income after financial items Adjustments for items not affecting cash ï¬,ow Income tax paid Cash ï¬,ow from operating activities before changes in working capital ...

  • Page 75
    ...Stockholm's large cap list. The operations of Saab ab with its subsidiaries, joint ventures and associated companies (jointly referred to as Saab or the Group) are divided into six business areas: Aeronautics, Dynamics, Electronic Defence Systems, Security and Defence Solutions, Support and Services...

  • Page 76
    ... and current liabilities generally consist of amounts that can be recovered or paid within twelve months of the closing day. Other assets and liabilities are recognised as fixed assets or long-term liabilities. Consolidation principles Group companies Group companies are companies in which Saab ab...

  • Page 77
    ... fixed assets. Customer-financed research and development is recognised in cost of goods sold. t Administrative expenses relate to expenses for the Board of Directors, Group Management and staff functions. t Marketing expenses comprise expenses for the in-house marketing and SAAB ANNUAL REPORT...

  • Page 78
    .... Production volume is set using future sales projections according to a business plan based on identified business opportunities. Acquired development costs are amortised on a straight line basis over a maximum of 10 years. t Goodwill: In the Parent Company, goodwill is amortised over a maximum 20...

  • Page 79
    ... fixed assets, and if it is shorter than one year they are short-term investments. With recognition at fair value through profit or loss, changes in value are stated in financial revenue and expenses. Valuation principles The fair value of listed financial assets is determined using market prices...

  • Page 80
    ... goods, cost consists of direct manufacturing expenses and a reasonable share of indirect manufacturing expenses as well as expenses to customise products for individual customers. Calculations take into account normal capacity utilisation. Dividends The dividend proposed by the Board of Directors...

  • Page 81
    ... are allotted as many shares as they purchased three years earlier provided that they are still employees of the Saab Group and that the shares have not been sold. In certain countries, social security expenses are paid on the value of the employee's benefit when matching takes place. During the...

  • Page 82
    ... directly in the equity of the recipient and capitalised in the shares and participating interests of the contributor, to the extent impairment is not required. Group contributions received and paid are recognised through profit or loss in financial income and expenses. 78 SAAB ANNUAL REPORT 2012

  • Page 83
    ...reports. Developments in these areas are monitored continuously by Group Management and the Board of Directors' audit committee. UNCERTAINTIES IN ESTIMATES AND ASSUMPTIONS Long-term customer contracts Group MSEK 2012 2011 Parent Company 2012 2011 Sale of goods Long-term customer contracts Service...

  • Page 84
    ... in South Africa, Australia, the u.s. and other selected countries. As a result of a reorganisation as of 1 January 2010, Saab is divided into five business areas, which also represent operating segments, Aeronautics, Dynamics, Electronic Defence Systems, Security and Defence Solutions, and Support...

  • Page 85
    FINANCIAL INFORMATION > NOTES NOTE 4, CONT. Electronic Defence Security and Defence Solutions Support and Services Combitech Corporate Eliminations Group Group MSEK Aeronautics Dynamics Systems 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012...

  • Page 86
    FINANCIAL INFORMATION > NOTES NOTE 4, CONT. Revenue by operating segment Parent Company MSEK 2012 2011 NOTE 6 Other Operating Expenses Group Parent Company 2011 2012 2011 Aeronautics Electronic Defense Systems Security and Defence Solutions Support and Services Total 5,896 3,361 3,045 3,036 15,...

  • Page 87
    ... Risk Management as. The company, which had approximately 30 employees, delivers services in field of risk analysis for the oil and gas industry as well as for the financial market. Combitech has an option to acquire the remaining 30 per cent of the shares within 18 months. SAAB ANNUAL REPORT 2012...

  • Page 88
    ... long-term absentees and consultants. Fixed term employees and probationers are however included in the calculation. Gender distribution of corporate management Share of women, per cent 2012 2011 Parent Company Board of Directors Other senior executives 22 36 22 29 84 SAAB ANNUAL REPORT 2012

  • Page 89
    ...senior executives other than Board members and the President. For information on post-employment compensation and share-related compensation, see Note 37. Operating expenses refer to cost of goods sold, marketing expenses, administrative expenses and research and development costs. Depreciation and...

  • Page 90
    FINANCIAL INFORMATION > NOTES NOTE 12 Group MSEK Depreciation/Amortisation and Impairments Group MSEK 2012 2011 Financial expenses related to pensions 2012 2011 -152 -16 -281 -60 -14 -324 Other financial expenses Financial expenses Depreciation/amortisation Capitalised development costs ...

  • Page 91
    ... Deferred tax related to temporary differences Deferred tax expense due to utilisation of previously capitalised tax value in tax loss carry forwards Deferred tax related to previous years Total -88 23 -65 -184 -184 Total recognised tax in the Parent Company -499 -462 SAAB ANNUAL REPORT 2012 87

  • Page 92
    ... tax assets and liabilities in the Parent Company, Saab ab, has been recognised in profit or loss. Estimated utilisation dates of recognised deferred tax assets MSEK Group Parent Company Deferred tax assets expected to be recovered within one year Deferred tax assets expected to be recovered...

  • Page 93
    ... capitalised tax value in tax loss carry forwards, msek -17. Other numbers in the "Recognised in profit or loss" column in the table above total msek 182, which is the amount of deferred tax related to temporary differences and deferred tax attributable to previous years. The Group's total deferred...

  • Page 94
    ... Bayes Risk Management as. Acquired through business acquisitions 2011 relates to Sensis. In 2011, goodwill impairment of msek 21 was recognised for companies in the venture portfolio. Capitalised development costs Group MSEK 2012 2011 MSEK 2012 Cost of goods sold Marketing expenses Research and...

  • Page 95
    ... development of markets where the units are active. The business areas Dynamics, Electronic Defence Systems and Security and Defence Solutions have a substantial order backlog of projects that stretches over a number of years. The risks and opportunities affecting the operating margin are managed...

  • Page 96
    ... in progress Group MSEK 2012 2011 In 2012, impairments of msek 17 were recognised with regard to a demonstrator system within Electronic Defence Systems. Acquired through business acquisitions relates to hitt n.v. and medav gmbh for 2012 and largely to Sensis for 2011. Parent Company 2012 2011...

  • Page 97
    ... is Saab the lessor in any finance leases. The operations are carried out in usd. Owned aircraft are depreciated on a straight-line basis over 20-25 years. The leasing fleet is expected to be divested around 2015. MSEK Outcome 2011 2012 238 248 66 72 126 20 Contracted 2013 2014 2015 2016 244 98...

  • Page 98
    ...per cent. The yield requirements correspond to the risk in net rental income. Fair value is not based on the valuation of an independent appraiser. Group MSEK 2012 2011 Contracted 2013 2014 2015 2016 2017 2018 and forward Total contracted 1) The Group has a finance lease on a building; see Note 17...

  • Page 99
    ... 6 13 94 20 300 Booked value, shares in associated companies 32.3 27.2 33.0 50.0 33.0 40.0 50.0 49.0 36.6 - 2012 MSEK Country Sales Associated companies Hawker Pacific Airservices Ltd Wah Nobel (Pvt) Ltd Taurus Systems GmbH S.N. Technologies SA Industrikompetens i Ã-stergötland AB Omnigo (Pty...

  • Page 100
    ... bank commercial paper as well as Floating Rate Notes. The fair value of interest-bearing securities held to maturity amounts to msek 143 (145). Gripen International KB, 969679-8231, Linköping Industrigruppen JAS AB, 556147-5921, Stockholm Total 50.0 80.0 459 4 565 96 SAAB ANNUAL REPORT 2012

  • Page 101
    FINANCIAL INFORMATION > NOTES NOTE 26 Other Long-Term Securities Holdings Parent Company MSEK 2012 2011 Assignment revenue refer to assignment costs incurred and reported gross income less any losses attributable to the work performed. Unutilised advance payments amount to msek 553 (1,022). ...

  • Page 102
    ... for sale. Accounts receivable in the Group amount to msek 3,454 (3,153). In 2012, Saab sold receivables as part of the sales programme arranged in 2009 to strengthen its financial position and increase financial flexibility. Customers in most cases are nations with high credit worthiness...

  • Page 103
    ...331,958 23,445 575,426 105,930,829 In 2012 no Series b shares were repurchased on the market to secure Saab's Share Matching Plan and Performance Share Plan. During the year, 598,871 shares were matched in Saab's Share Matching Plan. A total of 3,219,515 shares are held in treasury. The dividend to...

  • Page 104
    ...msek 81 (90) later than five years of the closing day. Liabilities to credit institutions mainly consist of Medium Term Notes (mtn). For more information on financial risk management, see Note 41. The fair value of mtns exceeds book value by msek 16 (13). Saab otherwise does not consider there to be...

  • Page 105
    ... Long-term receivables 11 489 12 595 Group MSEK 2012 2011 Fair value, 1 January Benefits vested during the year Benefits vested previous years 6,541 173 -3 229 -224 -12 472 -11 7,165 5,233 156 249 -208 56 1,048 7 6,541 The net amount is divided among plans in the following countries Sweden USA...

  • Page 106
    ...lines in the income statement: Group MSEK 2012 2011 Effects of amendments to IAS 19 Employee Benefits Year-end 2012 Statement of financial position MSEK 31-12-2012 actual Adjustment IAS 19R 31-12-2012 restated Cost of goods sold Marketing expenses Administrative expenses Research and development...

  • Page 107
    ... for pension Deferred tax liabilities Other long-term liabilities Current liabilities Total liabilities 12 1,012 3,385 14,321 18,730 2,415 -445 1,970 2,427 567 3,385 14,321 20,700 Total equity and liabilities 31,799 -464 31,335 Equity/assets ratio 41.1% 33.9% SAAB ANNUAL REPORT 2012 103

  • Page 108
    ... 1.7 2010 plan - 1,319,764 413,863 -1,287 413,863 -23,445 In April 2008, Saab's Annual General Meeting resolved to offer employees a new Share Matching Plan with terms comparable to the 2007 plan. In 2009, employees purchased 680,267 Series b shares, corresponding to the maximum number of matching...

  • Page 109
    ... senior executives Share Matching Plan 2007 Share Matching Plan 2008 Share Matching Plan 2009 Share Matching Plan 2010 Share Matching Plan 2011 Performance Share Plan 2009 Performance Share Plan 2010 Performance Share Plan 2011 Total 13 20 15 8 5 5 3 69 22 25 20 4 5 1 77 The fair value of the...

  • Page 110
    ... allocated for seniors executives who leave Group Management in 2012. 6) Including compensation for the additional costs the benefits lead to. 7) Employed by BAE Systems. Resigned on June 16 2011, as a result of BAE System's sale of its shareholding in Saab. 106 SAAB ANNUAL REPORT 2012

  • Page 111
    .... The expenditure is expected to fall in 2013-2015. Project losses Obligations related to regional aircraft MSEK Group Parent Company Opening balance, 1 January 2012 Amount utilised during the year Translation differences and other Closing balance, 31 December 2012 1,131 -408 -29 694 320 -42 278...

  • Page 112
    ... to financial risks. These risks are managed to a large extent with various financial instruments. Financial risk management Parent Company MSEK 31-12-2012 31-12-2011 Value-added tax Preliminary tax Other Total 81 116 432 629 163 73 251 487 The Board of Directors of Saab has approved a Group...

  • Page 113
    ...value 2012 Financial assets Financial investments Long-term receivables Derivatives Forward exchange contracts Currency options Interest rate swaps Electricity derivatives Total derivatives Accounts receivable and other receivables Short-term... 1,046 197 1,046 199 1,046 SAAB ANNUAL REPORT 2012 109

  • Page 114
    FINANCIAL INFORMATION > NOTES NOTE 41, CONT. The Group's outstanding derivatives Currency derivatives Million Currency Nominal currency Asset SEK Fair value 2012 Liability SEK Net Nominal currency Asset SEK Fair value 2011 Liability SEK Net Maturity up to one year EUR USD Other -264 -511 - 122 ...

  • Page 115
    ... with respect to the current order backlog. Future order bookings are exposed to fluctuations in exchange rates in terms of competitive strength. This is managed partly by Group Treasury, which hedges the economic exposure in fixed price tenders. Definitions Foreign currency risk refers to the...

  • Page 116
    ... rate swaps in usd are used mainly for interest risk management in the leasing portfolio, where the interest rate risk is fully matched. The pension liability, the present value of future pension obligations, is the largest interest rate risk due to the liability's long duration; see also the Saab...

  • Page 117
    ...two parts: t Commodity price risk refers to the risk that purchasing costs for material will rise. t Electricity price risk refers to the risk that Saab could be negatively affected by changes in electricity prices. According to the Group's policy, commodity risk is minimised and managed primarily...

  • Page 118
    ... credit risks Financial credit risk consists of exposures to banks through deposits, securities investments and/or the market value of outstanding derivatives. The Group's policy for managing financial credit risks is to: t Ensure that all financial counterparties have a long-term credit rating of...

  • Page 119
    ... had the following financial assets and liabilities at fair value: Assets at fair value MSEK 2012 Level 1 Level 2 Level 3 The Saab Pension Fund was established in 2006 to secure the main part of the Group's pension obligation and is not consolidated in the Group. The fund has a long-term real yield...

  • Page 120
    ...674 7,214 21 79 100 Group company Group company's registered office, country Växjö, Sweden The Netherlands Germany Västervik, Sweden USA Czech Republic Karlskoga, Sweden Denmark South Africa UK USA Finland Australia Ownership share, per cent 2012 2011 Combitech AB HITT N.V. MEDAV GmbH 100...

  • Page 121
    ... Saab India Technologies Private Limited, India Saab International AB, 556267-8994, Stockholm Saab Kenya Ltd, Kenya Saab Microwave Systems AB, 556028-1627, Mölndal Saab North America, Inc., USA Saab Precision Components AB, 556627-5003, Jönköping Saab Seaeye Holdings Ltd, UK Saab South Africa...

  • Page 122
    ... sheet 87 862 949 154 1,083 1,237 Purchase price paid Less: Liquid assets in acquired operations Effect on the Group's liquid assets Effect on the Group's net liquidity 593 -25 568 521 1,158 -127 1,031 929 Total according to statement of cash ï¬,ows 949 1,237 118 SAAB ANNUAL REPORT 2012

  • Page 123
    ... company Bayes Risk Management as. Acquisitions in 2011 relate to Sensis Corporation in the u.s., assets from Scandinavian Air Ambulance Holding and assets from the Czech company e-com. Acquisitions of associated companies Group MSEK 2012 2011 NOTE 47 Information on Parent Company Saab ab...

  • Page 124
    ... Exchange Rates used in Financial Statements Year-end rate Average rate 2012 2011 NOTE 50 Definitions of Key Ratios Capital employed Country 2012 2011 Total capital less non-interest-bearing liabilities. Capital turnover Australia Denmark Euro Canada Norway Switzerland UK South Africa Czech...

  • Page 125
    ...on the cutting edge of technology. Over the years, Saab has conducted significant development projects and managed the associated risks with great success. See also risks and uncertainties in the annual report. The Board of Directors' proposed dividend amounts to SEK 4.50 per share, corresponding to...

  • Page 126
    ... International Financial Reporting Standards (IFRS), as adopted for use in the European Union, and generally accepted accounting principles, and give a true and fair view of the financial positions and results of the Group and the Parent Company, and that the management report gives a fair review...

  • Page 127
    ... in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year. Stockholm 22 February 2013 PricewaterhouseCooopers AB Håkan Malmström Authorised Public Accountant SAAB ANNUAL REPORT 2012 123

  • Page 128
    ... is a part of the governance of Saab. For further information, please refer to page 36 of the Annual Report. Swedish Code of Corporate Governance The Saab shares are admitted to trading at NASDAQ OMX Stockholm and Saab must therefore follow good practices in the securities market, which includes...

  • Page 129
    ... voting rights in the company. This year the Annual General Meeting will be held on the 17 April 2013 in Stockholm. For further information please see page 135. Saab's share capital amounted to SEK 1,746,405,504 on 31 December, 2012 and consisted of 1,907,123 series A shares and 107,243,221 series...

  • Page 130
    ... Board, Saab AB. Marcus Wallenberg was elected Chairman of the Board of Directors. Only HÃ¥kan Buskhe, President and CEO of Saab, is employed by the company, Information on the remuneration to the members of the Board as resolved by the Annual General Meeting 2012 is set forth in the Annual Report...

  • Page 131
    ... shall monitor the company's financial reporting, monitor the efficiency of the company's internal control, internal audit and risk control in respect of the financial reporting, keep itself informed about the audit of the annual Attendance and Board remuneration, 2012 Attendance Audit Committee...

  • Page 132
    ... auditor examines the financial statements, group accounts, annual report and administration and management of the company by the Board of Directors and the CEO and also the Corporate Governance Report. In addition, the Half-Year Report as well as the Q3 interim report have been reviewed by the...

  • Page 133
    ... review of the company for the financial year 2012. The Board has also met on one occasion with the auditor without the presence of the CEO or any other members of the Group Management. Internal control over financial reporting Saab's system of internal control is designed to assist the business...

  • Page 134
    ... by Group functions and business areas. The current risk assessment is reviewed with Saab's Internal Audit, which adjusts its annual audit plan accordingly. Information on developments in essential risk areas as well as a report on planned and executed activities in these areas are communicated...

  • Page 135
    ... Systems AB Vice President and General Manager, Airborne Radar Division, Ericsson Microwave Systems AB Department Manager, Naval Command and Control Systems, Ericsson Microwave Systems AB The shares held by Board members include any holdings by closely affiliated persons. SAAB ANNUAL REPORT 2012...

  • Page 136
    ... the Local Swedish Association of Graduate Engineers, Saab Dynamics AB, Karlskoga Born 1964 Luleå University of Technology Shares in Saab: - CONNY HOLM Member of the Board since 2008 and Deputy Board member 1995 - 2008 President of the Local Trade Union IF Metall at Saab Electronic Defence Systems...

  • Page 137
    ... Area Security and Defence Solutions Born 1960, M.Sc. and PhD (Tec. Lic) Employed 2008 Shares in Saab: 3,176 LARS-ERIK WIGE Senior Vice President och Head of Business Area Support and Services Born 1954 Employed 2001 Shares in Saab: 2,120 MAGNUS Ã-RNBERG Senior Vice President och Chief Financial...

  • Page 138
    ...in Sweden. In our opinion, a Corporate Governance Report has been prepared and its statutory content is consistent with the Annual Report and the consolidated accounts. Stockholm, 22 February 2013 PricewaterhouseCoopers AB Håkan Malmström Authorised Public Accountant 134 SAAB ANNUAL REPORT 2012

  • Page 139
    ... business days in advance. Dividend The Board of Directors proposes a dividend of SEK 4.50 per share and 22 April 2013 as the record day for the dividend. With this record day, Euroclear Sweden AB is expected to distribute the dividend on 25 April 2013. Distribution of the annual report The annual...

  • Page 140
    ... to include employees in Denmark, Germany, the UK, the U.S., Switzerland and Australia. South Africa was included in 2009, Finland in 2010 and thereafter the Czech Republic in 2011. India will be included in the Share Matching Plan 2012 starting in January 2013. In April 2008, Saab's Annual General...

  • Page 141
    ... share, SEK 132 123 102 86 100 108 Earnings per share, SEK 20.4 17.6 14.3 Dividend per share, SEK 4.5 4.5 4.5 3.5 2.3 6.3 4.0 -2.3 1.8 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 1 1) Proposed by the Board of Directors. SAAB ANNUAL REPORT 2012...

  • Page 142
    SHAREHOLDER INFORMATION > THE SAAB SHARE Data per Share 2007-2012 2012 Closing prices 1) at year-end, SEK high for the year, SEK low for the year, SEK Market capitalisation, MSEK 2) Average daily turnover, no. of shares1) Yield, % Price/equity, % P/E ratio P/EBIT, multiple Sales before dilution, ...

  • Page 143
    ... of votes is calculated based on the number of shares, excluding Treasury shares, at year-end. Analysts who cover Saab ABG SUNDAL COLLIER, STOCKHOLM CARNEGIE, STOCKHOLM DANSKE MARKETS EQUITIES, STOCKHOLM ENSKILDA SECURITIES, STOCKHOLM SWEDBANK, STOCKHOLM ERIK PETTERSSON, [email protected]...

  • Page 144
    ... Internal sales Total Operating income Aeronautics Dynamics Electronic Defence Systems Security and Defence Solutions Support and Services Combitech Corporate Total Net financial items Income before taxes Net income for the period Attributable to Parent Company's shareholders Earnings per share...

  • Page 145
    ... capital expenditures for tangible fixed assets Research and development costs Number of employees at year-end 1) Number of shares, excluding treasury shares, as of 31 December 2012: 105,930,829; 2011: 105,331,958; 2010: 104,717,729; 2009: 105,511,124; 2008: 106,829,893; 2007: 108,150,344 and 2006...

  • Page 146
    ...-102 22 Stockholm, Sweden Visiting address: Gustavslundsvägen 42 1IPOF BY www.saabgroup.com For contact details to all offices, visit www.saabgroup.com Linköping Saab AB P.O. BOX 14085 SE-581 88 Linköping, Sweden Visiting address: Bröderna Ugglas gata 1IPOF BY 142 SAAB ANNUAL REPORT 2012

  • Page 147
    ...Sweden's national communication system for collaboration and management (Sveriges nationella kommunikationssystem för samverkan och ledning) Remote Tower (Flygledning på distans) Royal Thai Air Force Situation Awareness for Enhanced Security Single European Sky ATM Research Stockholm International...

  • Page 148
    ... december/tradoc_148391.pdf U.S. Defense Strategy Guidance, January 2012: http://www.defense.gov/news/ defense_strategic_guidance.pdf UK National Security Strategy, October 2010: http://www.number10.gov.uk/news/ national-security-strategy/ World Economic Forum, Global Risks 2013: http://www3.weforum...

  • Page 149
    Production: Intellecta Corporate Print: Larsson Offsettryck AB 2013 Photo: Sandra Birgersdotter, Shutterstock and Saabs image bank

  • Page 150