Saab 2013 Annual Report Download - page 64

CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
INCOME, MARGIN AND PROFITABILITY
The gross margin in 2013 decreased to 26.6per cent (30.0), compared to
2012, mainly as a result of a different product and project mix.
Total depreciation, amortisation and write-downs amounted to
MSEK1,047(1,189). Depreciation and write-downs of tangible fixed assets
amounted to MSEK398(403), while depreciation of the leasing fleet
amounted to MSEK 25 (53).
Total expenditures in research and development amounted to MSEK6,543
(5,946). Of total research and development expenditures, MSEK1,332
(1,798) was internally funded, of which a total of MSEK 24 (292) was capital-
ised. A large part was investments in development of radar and sensor
technologies.
Amortisation of intangible fixed assets amounted to MSEK 624(733), of
which amortisation of capitalised development expenditures amounted to
MSEK 454 (590).
The share of income in associated companies amounted to MSEK 25 (25). The
operating income amounted to MSEK1,345 (2,050) with an operating margin of
5.7percent (8.5). Excluding material non-recurring items, the operating income
amounted to MSEK1,576(1,843), with an operating margin of 6.6 per cent (7.7).
During 2013 and 2012, reversal of risk provisions related to Saab’s leasing
fleet of turbo prop aircraft (SAL), contributed positively to the operating in-
come. The positive contribution was less in 2013 than in 2012.
During 2012, the operating income was positively impacted by a significant
reduction of the potential earn-out liability related to the acquisition of Saab
Sensis during 2011, of MSEK 207. The result for 2013 was also positively
impacted by such reductions as well as by a capital gain attributable to a di-
vestment of property. At the same time, the operating income for 2013 was
negatively impacted by the ongoing efficiency programme. In total, the costs
were somewhat higher than the sum of the reductions and the capital gain.
A material non-recurring item of MSEK231 related to a lost legal dispute was rec-
ognised during the year, see more in Note 42.
FINANCIAL NET
MSEK Jan–Dec 2013 Jan–Dec 2012
Financial net related to pensions -74 -73
Net interest items 23 124
Project interest from unutilised
advance payment -3 -15
Currency gains/losses -26 15
Other net financial items -286 -98
Total -366 -47
Financial net related to pensions is based on the current net pension liability.
Net interest items refer to return on liquid assets and short-term investments
as well as interest expenses on short and long-term interest-bearing liabilities.
Project interest is the return on unutilised advance payments from customers
that are received in connection with some orders. The return generated from
this advance financing is recognised in gross income and reduces financial net.
Currency gains/losses reported are related to hedges of the tender portfolio
which are valued at fair value.
Other net financial items consist of cost attributable to the programme for
sales of accounts receivables and unrealised results from market valuation
of short-term investments and other currency effects, for example changes
related to liquid assets in currencies other than SEK. Also reported here,
were two non-recurring items; MSEK 83 related to a lost legal dispute and
a write-down of the value of shareholding in the Indian company Pipavav.
During the second quarter, Saab invested MSEK 247 in Pipavav through a,
to Saab, directed new share issue. A combination of negative currency
effects and share price development resulted in a value decline totalling
MSEK 133, of which MSEK 116 was recognised in Other comprehensive
income/loss up to and including the third quarter. Following a continued
value decline during the fourth quarter, Saab has, in accordance with IFRS,
reclassified the value decline for the whole year to financial net. At year-end,
the valuation of the Indian currency, rupie, showed a decline of 15 per cent
and Pipavav’s share price had dropped 46percent, since the investment
was done. This led to a write-down and reclassification in accordance with
accounting standards.
Current and deferred taxes amounted to MSEK -237 (-443), equivalent to
an effective tax rate of 24 per cent (22).
The pre-tax return on capital employed was 9.1 per cent (14.6) and the
after-tax return on equity was 6.3 per cent (12.8), both measured over a
rolling 12-month period.
1 January – 31 December
MSEK 2013 2012
Net income for the year 742 1,560
Other comprehensive income:
Items that will not be reversed in the income
statement:
Revaluation of net pension obligations 1,255 -385
Tax attributable to revaluation of net pension
obligations -285 85
Total 970 -300
Items that may be reversed in the income
statement:
Translation differences -132 -181
Net gain/loss on cash flow hedges:
Change in value -174 45
Reversed through profit and/or loss -81 15
Tax attributable to net gain/loss on cash flow
hedges 59 14
Total -328 -107
Other comprehensive income 642 -407
Net comprehensive income for the year 1,384 1,153
of which Parent Company’s shareholders’
interest 1,399 1,184
of which non-controlling interest -15 -31
2012 is restated according to the changed accounting principles for pensions (IAS19)
FINANCIAL INFORMATION > FINANCIAL STATEMENTS
60 SAAB ANNUAL REPORT 2013