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ANNUAL REPORT 2015

Table of contents

  • Page 1
    ANNUAL REPORT 2015

  • Page 2
    ... 119 For more information on Saab's sustainability work, see the separate Sustainability Report available at saabgroup.com Risks and risk management Corporate governance report Board of Directors and Auditors Group Management CALENDAR Annual General Meeting Interim Report January - March Interim...

  • Page 3
    ...' share of Saab's total sales in 2015. * The Security and Defence Solutions business area was dissolved as of 1 January 2016 for more information, see page 35. FIVE CORE AREAS Aeronautics Development of advanced military and civil aviation technology, including the Gripen combat aircraft system...

  • Page 4
    ... Profitable growth: Effective project execution, focused marketing investments and winning new orders. • Performance: Efficient, functional processes, strong leadership, global research and development. • Portfolio: Focus on core areas, market-driven renewal, international focus and sustainable...

  • Page 5
    ...after dilution, SEK Free cash flow Dividend per share, SEK Equity/assets ratio, % Internally funded R&D, share of sales, % Number of employees at year-end * Board of Directors' Proposal 2015. 2014 60,128 23,527 1,659 7.1 1,168 10.78 -1,094 4.75 38.5 5.7 14,716 2013 59,870 23,750 1,345 5.7 742 6.79...

  • Page 6
    ... Saab invests heavily in research in order to develop world-leading technologies. Despite the company's relatively small size, it can offer a broad and competitive product portfolio thanks to smart thinking, international collaborations and the courage to try new things. Innovation is part of Saab...

  • Page 7
    ...Working closely with customers and local businesses has become a success factor for Saab. Knowledge grows when it is shared and developed. By sharing our technological developments and production methods, Saab helps other countries and companies to grow and develop. It also makes us better over time...

  • Page 8
    ...is why we are continuously working to improve efficiencies. After a number of important development projects and measures to increase efficiency, including a reorganisation that took effect at the start of the year, the focus is now on effectively implementing the major 4 - SA AB ANNUAL REPORT 2015

  • Page 9
    .... Development is often done in close collaboration with our customers. Recent years have produced several new products or new versions of previous success stories, and in 2015 more new products reached the market, including the GlobalEye airborne radar and sensor system. SUSTAINABLE BUSINESS Our...

  • Page 10
    ...which is being closely watched by the rest of the world. The need for preparedness and training has grown in pace with increased geopolitical instability. Saab offers various types of training and development simulators, including for the Gripen combat aircraft system. 6 - SA AB ANNUAL REPORT 2015

  • Page 11
    ...new, more modern defence materiel in many areas at the same time that defence spending is limited. Demand is increasing for advanced products with a lower purchase price that are also cost efficient to operate and maintain. Another important way for customers to be cost efficient is to use a product...

  • Page 12
    ...-how to create new solutions that address both environmental and security concerns. Services include information security, systems integration, communications, mechanics, systems security, systems development, technical product information and logistics. SEA TRAFFIC MANAGEMENT Saab today offers Sea...

  • Page 13
    ... DEFENCE MARKET More than 80 per cent of Saab's sales is from defence related products and services. The defence materiel industry differs from many other industries in that security and foreign policy considerations influence decisions. Defence materiel is often sold by a company to a government...

  • Page 14
    ... value 2015: USD 10 billion Annual growth 2016 - 2020: 3 per cent Brazil accounts for about half of the Latin American defence market. The country is planning to modernise its military, including through a new submarine programme and Saab's Gripen combat aircraft. In Latin America, military systems...

  • Page 15
    ... economic growth in the country. Saab develops and supplies the combat system for the Royal Australian Navy's Anzac frigates. 2% SHARE OF GLOBAL MARKET 2016-2020 Africa Market value 2015: USD 7 billion Annual growth 2016 - 2020: 3 per cent Economic growth and new threat scenarios are stimulating...

  • Page 16
    ...Effective project execution Focused market efforts Win small and medium-sized orders Zero tolerance for corruption Order backlog's geographical distribution Saab's order backlog is more than four times annual sales 4X Sweden, 36% Other markets, 64% Order backlog duration SEK billion 2016 2017...

  • Page 17
    ... to work closely with customers and offer the right combination of products and solutions. This approach increases Saab's chances of winning more small and Saab is partnering with Boeing to bid for the U.S. Air Force's new jet trainer as part of the T-X program. SA AB ANNUAL REPORT 2015 - 13

  • Page 18
    ... things, general risk awareness, internal processes and the company's tools for managing corruption risks. All Saab employees are required to complete web-based anti-corruption training. SAAB'S MARKET AREAS To be close to customers in key markets, Saab has established five market areas: • Nordic...

  • Page 19
    ... PROFITABLE GROWTH BUSINESS MODEL Complexity Saab's offering comprises complex systems with a great deal of research and development as well as repeat orders for products and services. The business model is adapted to the product area, system complexity, customer group and geographical market...

  • Page 20
    ... Defence Solutions Support and Services Industrial Products and Services The Security and Defence Solutions business area was dissolved as of January 1, 2016 and the business units have been distributed among the other business areas. For more information, see page 35. 16 - SA AB ANNUAL REPORT...

  • Page 21
    ... the same extent. Operating expenses as share of sales % 15 14 13 12 11 2.0 1.5 1.0 0.5 0.0 MSEK Sales per employee* 2011 2012 2014 2014 2015 2011 2012 2014 2014 2015 Operating expenses are defined as marketing and administration costs. * Average number of full time employees (FTE's).

  • Page 22
    ... internal synergies and improving performance management. Consolidation of operating locations Optimisation is important in a business where customer projects are complex and often extend over long periods of time. Saab's project managers Saab is active in more than 30 countries and in Sweden...

  • Page 23
    ... main areas: creating a performance-driven culture, being both a leader and a manager, strengthening business understanding, and being more international. For more information, see Strategy People, page 26. EFFICIENT WAYS OF WORKING Business units that share common technologies, markets or product...

  • Page 24
    ... and support are integral parts of the core areas. 2011 2012 2014 2014 2015 ADVANCED WEAPON SYSTEMS Anti-tank weapons, missiles and ammunition as well as integrated command and control systems and network solutions. AERONAUTICS Development of advanced military and civil aviation technology...

  • Page 25
    ... Air Force's new jet trainer as part of the T-X program. In 2015, total investments in self- and customerfinanced R&D amounted to MSEK 6,841, corresponding to 25 per cent of total sales. Market-driven renewal Saab encourages employees to explore new areas and use groundbreaking technology. In 2015...

  • Page 26
    .... Moreover, Saab initiated the Swedish-Brazilian Research and Innovation Centre (CISB), an arena of open innovation and an international hub to identify, develop and support research and development projects in advanced technology, including renewable energy. Saab is working systematically to...

  • Page 27
    ...-2015 2011 Acquisitions and investments • Sensis 2012 • HITT • Medav • Sörman Information • Bayes Risk Management Divestments of portfolio holdings in Ventures 2013 • TIKAB • Hydro-Lek • Pipavav Defence and Offshore Engineering 2014 • Saab Kockums • Bayes Risk Management 2015...

  • Page 28
    ... in the company's own development as well as to borrow the best ideas from commercial solutions. Saab's most important competitive advantage is that its systems not only offer outstanding performance but are also compact, easy to integrate in existing customer systems, and easy to use and maintain...

  • Page 29
    ... improves performance compared to previous versions and fulfils customers' requirements to meet changing threats and track targets that are becoming smaller and smaller on radar. GlobalEye builds on Saab's expertise within a number of areas including radar, command, control and communication systems...

  • Page 30
    ... Create a performance-driven culture SAAB'S AIM IS THAT EVERY EMPLOYEE WILL 60 NATIONALITIES Be performance-driven Understand the business Think globally and embrace diversity Be strong and committed Number of employees per country 31 Dec 2015 Sweden South Africa USA Australia UK The...

  • Page 31
    ... A big challenge is recruiting and retaining top talent. To stay competitive, Saab has to have the best employees in several areas. The company especially needs engineers, who are in short supply in Sweden. Saab has long been committed to working with young people to encourage an interest in...

  • Page 32
    ... on education, research and innovation. Through the executive management programmes FEM and TIO, which are run collaboratively with other large multinationals, senior leaders at Saab develop the skills to lead, develop and manage complex, international businesses. 28 - SA AB ANNUAL REPORT 2015

  • Page 33
    ... to influence their development. An important part of the performance-driven culture is ethical behaviour, where every employee understands their responsibilities. The key units that are affected receive training in responsible business, and in 2015 an updated version of Saab's code of conduct...

  • Page 34
    ... (EBIT) was 7.0 per cent (7.1). RESULT SALES 12 9 6 3 Operating income has been positively affected by revenue recognition in large projects in the business areas Aeronautics, Electronic Defence Systems, and Support and Services. Investments in product renewal mainly related to sensors and the...

  • Page 35
    ... satisfied to work at Saab. Saab ranked eighth in Universum's survey of the most popular employers among Swedish engineering students. SOCIAL ENGAGEMENT RESULT Saab will contribute to social development in markets where Saab is active, mainly with the help of Saab's employees and technologies and...

  • Page 36
    ... repurchased to secure the Group's Share Matching Plan and Performance Share Plan. The repurchased shares are held as treasury shares. Source: Modular Finance TRADING VOLUME AND STATISTICS OWNERSHIP STRUCTURE Saab had 33,339 shareholders (33,732) at year-end 2015. Swedish investors accounted for...

  • Page 37
    ...until the Annual General Meeting 2016. DIVIDEND AND DIVIDEND POLICY 4,549 of Saab's employees joined the Saab Share Matching Plan 2015. Saab's long-term dividend policy is to distribute 20-40 per cent of net income over a business cycle. For the financial year 2015, the Board of Directors proposes...

  • Page 38
    ... REPORT CONTENTS Group - Financial review 2015 Business areas Other significant events Risks and risk management Corporate governance report Board of Directors and Auditors Group Management Other information Financial statements Dividend motivation Proposed disposition of earnings Audit report...

  • Page 39
    ... Management and Combat Systems and C4I Solutions becomes part of business area Electronic Defence Systems. • Training and Simulation becomes part of business area Dynamics. • Critical Systems & Communication Solutions becomes part of business area Support and Services. • The business unit Saab...

  • Page 40
    ...to Sweden. The operating margin was adversely affected by the significant investment made in 2015 in the T-X program, where Saab has teamed up with Boeing to develop the trainer aircraft of the future. This work will continue in 2016. In December, Saab and UMS Aero Group AG, 36 - SA AB ANNUAL REPORT...

  • Page 41
    .... Products and solutions have been sold to more than 60 countries around the world. Dynamics includes the following business units: Ground Combat, Missile Systems, Underwater Systems and Barracuda. As of 1 January 2016, the business unit Training and Simulation is included in the business area as...

  • Page 42
    ... Warfare Systems. As of 1 January 2016, the business units Traffic Management and Combat System and C4I Solutions are included in the business area. ORDERS RECEIVED Sales increased and the operating margin improved in 2015 compared to 2014 mainly because revenue from preparatory work related to...

  • Page 43
    ... Management and Combat Systems and C4I Solutions becomes part of business area Electronic Defence Systems. • Training and Simulation becomes part of business area Dynamics. • Critical Systems & Communication Solutions becomes part of business area Support and Services. • The business unit Saab...

  • Page 44
    ... REPORT BUSINESS AREA SUPPORT AND SERVICES Support and Services offers reliable, cost-efficient service and support for all of Saab's markets. This includes support solutions, technical maintenance and logistics as well as products, solutions and services for military and civil missions. Share...

  • Page 45
    ...WRAP International AB. ORDERS RECEIVED Sales increased slightly in 2015 compared to 2014 mainly due to additional deliveries within the business unit Aerostructures and positive development for the business unit Avionics Systems and the technical consulting company Combitech. Markets outside Sweden...

  • Page 46
    ...of the Board. • The Annual General Meeting 2015 resolved to re-elect PricewaterhouseCoopers AB as auditor until the close of the Annual General Meeting 2019. • Saab and Embraer signed an agreement that establishes a partnership for joint management of the F-X2 project for the Brazilian Air Force...

  • Page 47
    SA AB ANNUAL REPORT 2015 - 43

  • Page 48
    ... RISKS AND RISK MANAGEMENT Saab has business operations around the world and projects delivered over long periods of time. Many projects entail high-tech development and product refinement. In addition, Saab runs various research and innovation programmes and offers technology transfers as part...

  • Page 49
    ...-term customer contracts 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. Development and introduction of new systems and products Saab invests heavily in the research and development...

  • Page 50
    ... corruption risks. All employees in the marketing and sales organisation receive training on the importance of the requirement that business managers perform a corruption risk assessment in connection with every business transaction. The training also covers current laws and Saab's processes...

  • Page 51
    ... rate risks Liquidity and refinancing risks Credit and counterparty risks Commodity risks Pension obligation Operating risks Develop and introduce new systems and products Long-term customer projects Environmental risk and liabilities Compliance risks Information handling risks SA AB ANNUAL REPORT...

  • Page 52
    ... Accounts Act and the Code, and describes how Saab applied the Code during the financial year 2015. Saab's website, www.saabgroup.com, has a special section for corporate governance issues, which is updated in accordance with the Code. The Board annually issues a report on how the internal control...

  • Page 53
    .... Group Management Internal Audit Business Areas Aeronautics Dynamics Electronic Defence Systems Security and Defence Solutions* Support and Services Industrial Products and Services Group Functions Finance HR Communication ICT Quality and Environment Legal affairs Procurement Strategy Reports...

  • Page 54
    ... reports and year-end report. The Board regularly reviews and considers investments, research and development matters, organisational issues, management of significant risks, mergers and acquisitions, and company divestments. The Board's annual work includes deciding on the company's business plan...

  • Page 55
    ... the company's financial position, financial reporting, budget, internal control, the updated Code of Conduct and questions related to the company's ethical standards. The Audit Committee also assisted the Nomination Committee ahead of the election of auditors at the Annual General Meeting 2015. The...

  • Page 56
    ... part of the internal control in specific areas such as finance, accounting, investments and tenders. Risk assessment Audit assignments: PwC Others Other assignments: PwC 4 3 18 2 18 2 THE BOARD'S REPORT ON INTERNAL CONTROL OF THE FINANCIAL REPORTING Under the provisions of the Swedish Companies...

  • Page 57
    ...was acquired in 2014. Training in internal control and the self-assessment process was available to management and personnel around Sweden during the year. The Group's Internal Audit unit provided support for the selfassessment process. Focus in 2016 All operating units report monthly and quarterly...

  • Page 58
    ... positions: Vice President of System Management, Business Unit Networks, Ericsson AB; Director of Wireless Access Networks Research, Ericsson Research, Ericsson AB; Board member of the School of Electrical Engineering, KTH and Wireless@KTH, KTH. EMPLOYEE REPRESENTATIVES STEFAN ANDERSSON Member of...

  • Page 59
    ...Sc. in Aerospace Engineering, (MIT) Massachusetts Institute of Technology. Shares in Saab: 8,000. Other board commitments: Board member of CGI Group Inc., Absolent AB and Swedish Match AB. Former employment and positions: Chairman of EMA Technology AB and Absolent AB; Board member of Intrum Justitia...

  • Page 60
    ... Vice President and Head of Business Area Electronic Defence Systems. Born 1960. B.Sc. Employed 1985. Shares in Saab: 6,620. ULF NILSSON Senior Vice President and Head of Business Area Aeronautics. Born 1964. M.Sc. in Engineering. Employed 1989. Shares in Saab: 4,882. 56 - SA AB ANNUAL REPORT 2015

  • Page 61
    ... responsible for developing and reviewing remuneration and other employment terms for the Group Management. The Board is entitled to divert from the guidelines if there are reasonable grounds to do so in specific cases. These guidelines apply as of the Annual General Meeting 2015. Fixed remuneration...

  • Page 62
    ... Matching Plan 2016 and Performance Share Plan 2016 are presented in the Board of Director's complete proposal to the Annual General Meeting. SAAB'S LONG-TERM INCENTIVE PROGRAMMES AND AUTHORISATION TO REPURCHASE SHARES The Annual General Meeting of Saab has resolved for a number of years to offer...

  • Page 63
    ... investment. Currently, Performance Share Plans 2012-2015 are in place. The Annual General Meeting 2015 also resolved to authorise the Board of Directors to decide to acquire not more than 1,340,000 Saab Series B shares to secure delivery of shares to participants in Saab's long-term Share Matching...

  • Page 64
    ... Other liabilities Financial risk management and financial instruments Transactions with related parties Group companies Untaxed reserves Statement of cash flows, supplemental information Information on Parent Company Environmental report Exchange rates used in financial statements Definitions of...

  • Page 65
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENT MSEK Note 2015 2014 Sales Cost of goods sold Gross income Other operating income Marketing expenses Administrative expenses Research and development costs Other operating expenses Share in income of associated companies and...

  • Page 66
    ...trade receivables, unrealised results from the market valuation of short-term investments, and other currency effects, for example changes related to liquid assets in currencies other than SEK. In December 2015, Saab divested its holding in the Indian company Pipavav Defence and Offshore Engineering...

  • Page 67
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION MSEK Note 31-12-2015 31-12-2014 ASSETS Intangible fixed assets Tangible fixed assets Biological assets Investment properties Shares in associated companies and joint ventures Financial investments Long-term ...

  • Page 68
    ... INFORMATION - FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION MSEK Note 31-12-2015 31-12-2014 EQUITY AND LIABILITIES Equity Capital stock Other capital contributions Other reserves Retained earnings Equity attributable to Parent Company's shareholders Non-controlling...

  • Page 69
    ... to Parent Company's shareholders Noncontrolling interest Total equity Opening balance, 1 January 2014 Net comprehensive income/loss for the year Transactions with shareholders: Repurchase of shares Share matching plan Dividend Acquisition and sale of non-controlling interest Closing balance...

  • Page 70
    ... 524 (171) was related to capitalised development costs and MSEK 70 (68) to other intangible fixed assets. CASH FLOW Cash flow from operating activities excluding taxes and other financial items amounted to MSEK 886 (-346), see note 43. Saab has an established programme to sell trade receivables to...

  • Page 71
    ...Electronic Defence Systems, Security and Defence Solutions, Support and Services and Industrial Products and Services. Group staff and Group support are included as well. The business area Dynamics is a subsidiary to Saab AB and is not a part of the Parent Company. The Parent Company's sales in 2015...

  • Page 72
    ... 2014. Gross capital expenditures in property, plant and equipment amounted to MSEK 602 (551). Investments in intangible assets amounted to MSEK 49 (63). At the end of the year, the Parent Company had 8,632 employees, compared to 8,695 at the beginning of the year. 68 - SA AB ANNUAL REPORT 2015

  • Page 73
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS PARENT COMPANY BALANCE SHEET MSEK Note 31-12-2015 31-12-2014 EQUITY AND LIABILITIES Equity Restricted equity: Capital stock Revaluation reserve Statutory reserve Unrestricted equity: Retained earnings Net income for the year Total equity Untaxed ...

  • Page 74
    ... Share matching plan Closing balance, 31 December 2015 1,746 700 543 4,992 - 7,981 1,746 1,746 -6 694 694 543 543 6 -479 -252 50 4,316 5,486 1,170 1,170 - 1,170 -479 -252 50 8,469 8,469 1,746 -6 688 543 6 -501 66 5,057 -37 -37 -37 -501 66 7,997 70 - SA AB ANNUAL REPORT 2015

  • Page 75
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS PARENT COMPANY STATEMENT OF CASH FLOWS MSEK Note 2015 2014 Operating activities Income after financial items Adjustments for items not affecting cash flow Income tax paid Cash flow from operating activities before changes in working capital Cash flow ...

  • Page 76
    ..., Electronic Defence Systems, Security and Defence Solutions, Support and Services, and Industrial Products and Services. The operations in each business area are described in note 4. On 26 February 2016, the Board of Directors and the President approved this annual report and consolidated accounts...

  • Page 77
    ...term customer contracts. Recovery of value of development costs The Group has invested significant amounts in research and development. The reported amounts in the statement of financial position are primarily due to development projects relating to radar and sensors, electronic warfare systems, Air...

  • Page 78
    ... market terms. As of 1 January 2015, Saab's operations are divided into the following six business areas, which will also be reported as operating segments: • Aeronautics • Dynamics • Electronic Defence Systems • Security and Defence Solutions • Support and Services • Industrial Products...

  • Page 79
    ... INFORMATION - FINANCIAL STATEMENTS Note 4, cont. Group Aeronautics Dynamics Electronic Defence Systems Security and Industrial Support and Products and Defence Services Solutions Services Corporate Eliminations Group MSEK 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015...

  • Page 80
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS Note 4, cont. Sales by operating segment Parent Company MSEK 2015 2014 Aeronautics Electronic Defence Systems Security and Defence Solutions Support and Services Industrial Products and Services Total Sales by geographical market 5,979 2,953 2,684 ...

  • Page 81
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 6 MSEK OTHER OPERATING INCOME Group Parent Company NOTE 8 2014 LEASE AGREEMENTS 2015 2014 2015 Gain on sale of Group companies Gain from other operating activities Trading results Gain from revaluation of earn out liability Government grants ...

  • Page 82
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 9 GOVERNMENT GRANTS Gender distribution of corporate management Parent Company ACCOUNTING PRINCIPLES Saab receives government grants, mainly various grants from EU related to research and development projects. These are recognised in the ...

  • Page 83
    ... Annual General Meeting from 2009 to 2014 and in the Share Matching Plans for 2011-2014. The Performance Share Plan 2011 was concluded in January 2016. Outstanding matching rights in the Performance Share Plan and the Share Matching Plan 2011 amount to SEK 148,159 (637,833) as of 31 December 2015...

  • Page 84
    ... the additional costs incurred due to the benefits. Including estimated remuneration for the senior executives who left Group Management in 2015, see also page 58 in the administration report. Share related plans relate to both Share Matching Plans and Performance Share Plans. 3) 4) 5) Guidelines...

  • Page 85
    ... business area Security and Defence Solutions for the full year 2015. Previously named operating cash flow. Adjusted for acquisitions and divestments of operations, group and associated companies. 2) 2015 Share Matching Plan and Performance Share Plan In April 2015, Saab's Annual General Meeting...

  • Page 86
    ... and reporting requirements, internal control and the review of interim reports. Other services relate to expenses that are not classified as audit assignments, audit work in excess of the audit assignment and tax advice. 2011 2012 2013 2014 Totalt Share Matching Plan Performance Share Plan...

  • Page 87
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 12 DEPRECIATION/AMORTISATION AND WRITE-DOWNS Group Parent Company MSEK Result from shares in Group companies Result from shares in associated companies/joint ventures 2015 2014 2015 2014 Dividends 2014 470 166 89 -839 47 -67 104 255 62 -1...

  • Page 88
    ... - FINANCIAL STATEMENTS NOTE 15 TAXES MSEK Parent Company 2015 2014 ACCOUNTING PRINCIPLES Income taxes consist of current tax and deferred tax. Income taxes are recognised in profit or loss unless the underlying transaction is recognised in other comprehensive income, whereby the related tax...

  • Page 89
    ... tax value in tax loss carry forwards, MSEK -67 (-4). Other numbers in the "Recognised in profit or loss" row in the table above total MSEK -73 (-21), which is the amount of deferred tax related to temporary differences and deferred tax attributable to previous years. SA AB ANNUAL REPORT 2015 - 85

  • Page 90
    ... treasury shares. The weighted average number of shares outstanding after dilution is based on the effects of all potential shares (Share Matching Plan and Performance Share Plan) that give rise to a dilution effect. Parent Company MSEK Net Tangible fixed assets Inventories Accounts receivable...

  • Page 91
    ... the Parent Company, goodwill is amortised over a maximum 20 years. Goodwill is not amortised in the Group. Periods of use are tested annually and unfinished development work is tested for impairment at least once a year regardless of any indications of diminished value. MSEK 31-12-2015 31-12-2014...

  • Page 92
    ...the market. Acquisitions through business combinations 2014 relate to ThyssenKrupp Marine Systems AB. Amortisation is included in the following lines in the income statement Group Parent Company MSEK 2015 2014 2015 2014 Cost of goods sold Marketing expenses Research and development costs 184...

  • Page 93
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS Note 17, cont. All units have sales of defence materiel, unique systems, products and support solutions in the international market as their primary activity, and their business risk in this respect is considered equivalent. Recent years' order bookings...

  • Page 94
    ... 61 after five years. The present value of future minimum lease fees is MSEK 103. Plant and machinery Group Parent Company Equipment, tools and installations Group Parent Company MSEK 2015 2014 2015 2014 Acquisition value Opening balance, 1 January Business combinations Investments 3,936 734...

  • Page 95
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 19 BIOLOGICAL ASSETS MSEK Group 2015 2014 ACCOUNTING PRINCIPLES Biological assets in the form of forests are carried at fair value after deduction of estimated selling expenses. Fair value is based on the valuation of an independent appraiser....

  • Page 96
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 21 SHARES IN ASSOCIATED COMPANIES AND JOINT VENTURES Associated companies and joint ventures MSEK Group 2015 2014 ACCOUNTING PRINCIPLES Associated companies are companies over which the Group has a significant, but not decisive, influence over...

  • Page 97
    ... Co., Ltd FFV Services Private Limited Saab Grintek Technologies Ltd S.N. Technologies SA Taurus Systems GmbH Wah Nobel (Pvt) Ltd Other associated companies, mainly in the ventures portfolio Total associated companies Joint ventures Fortis Marine Solutions Pte Ltd Gripen International KB Total joint...

  • Page 98
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 22 PARENT COMPANY'S SHARES IN ASSOCIATED COMPANIES AND JOINT VENTURES Parent Company NOTE 23 RECEIVABLES FROM GROUP COMPANIES Long-term receivables from Group companies Parent Company MSEK MSEK 2015 2014 2015 2014 Accumulated acquisition ...

  • Page 99
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 26 LONG-TERM RECEIVABLES AND OTHER RECEIVABLES Group Parent Company MSEK 2015 2014 Long-term receivables Accumulated acquisition value Opening balance, 1 January Additional receivables 68 288 49 11 28 444 Group MSEK 31-12-2015 31-12-2014 25...

  • Page 100
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 28 ACCOUNTS RECEIVABLE NOTE 29 PREPAID EXPENSES AND ACCRUED INCOME Group Parent Company ACCOUNTING PRINCIPLES Accounts receivable are recognised initially at fair value and subsequently at amortised cost at the amount expected to be received ...

  • Page 101
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS Note 31, cont. In 2015, no Series B shares were repurchased on the market to secure Saab's Share Matching Plans and Performance Share Plans. During the year, 457,085 shares were matched in Saab's Share Matching Plan. Transferred shares correspond to 0.4...

  • Page 102
    ... actuaries using the Projected Unit Credit Method. When the compensation terms in a plan are improved, the portion of the increased compensation attributable to the employees' service in previous periods is expensed through the income statement. If the obligation calculated on the closing day...

  • Page 103
    ... 167 in 2015. The actuarial gain related to other long-term service awards amounted to MSEK 1. The cost is reported on the following lines in the income statement Group MSEK 2015 2014 Cost of goods sold Marketing expenses Administrative expenses Research and development costs Financial expenses...

  • Page 104
    ...2014 Group MSEK 2015 2014 Actual return on assets under management Financial income on assets under management Actuarial result from assets under management during the year 225 -146 79 526 -202 324 Governance The pension fund is governed by the Pension Board, which resumes 4-5 times per year...

  • Page 105
    ... allocated during the year are mainly attributable to restructuring in connection to the dissolution of business area Security and Defence Solutions on 1 January 2016. Onerous contracts Provisions for onerous contracts on the closing day relate to command and control projects, Helicopter 14 and...

  • Page 106
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 36 MSEK OTHER LIABILITIES Group NOTE 38 31-12-2015 31-12-2014 FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS Other long-term liabilities Liabilities to previous owners and minority owners Liabilities related to employees Other Total Of ...

  • Page 107
    ...current market rates to the valuation day and valued in SEK at period-end exchange rates. • Options: The Garman-Kohlhagens option pricing model is used in the market valuation of all options. • Interest rate swaps and cross currency basis swaps: Future variable interest SA AB ANNUAL REPORT 2015...

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    ... for the year amounted to MSEK 0 (0). FINANCIAL RISK MANAGEMENT Foreign currency risk Foreign currency risk refers to the risk that fluctuations in exchange rates will negatively affect income or net assets. Economic exposure Income is affected when sales and the cost of goods and services sold are...

  • Page 109
    ... Fair value 2015 2014 Million Currency Local currency Asset SEK Liability SEK Net Local Currency Net EUR USD Other Currency derivatives, Parent Company total -51 -888 142 764 188 1,094 164 1,004 158 1,326 -22 -240 30 -232 -236 -286 -72 -613 -22 -707 SA AB ANNUAL REPORT 2015 - 105

  • Page 110
    ...in the fixed interest. Investments Interest rate risk in the Group's financial investments is managed based on a duration of 12 months with the option to deviate by +/- 12 months. As of 31 December 2015, the duration for investments was 12 months (10). Investments in interest-bearing securities and...

  • Page 111
    ... Financial credit risk consists of exposures to financial institutions through deposits, securities investments and/or the market value of outstanding derivatives. The Group's policy for managing financial credit risks is to ensure that all financial counterparties have a long-term credit rating...

  • Page 112
    ...-2014 Per cent of total MSEK 31-12-2015 Combitech AB Combitech Oy HITT N.V. Saab Australia Pty Ltd Saab Barracuda AB Saab Barracuda LLC Saab Czech s.r.o. Saab Defense and Security USA LLC Saab Dynamics AB Saab Danmark A/S Saab Grintek Defence (Pty) Ltd Saab Kockums AB Saab Medav Technologies GmbH...

  • Page 113
    ... INFORMATION - FINANCIAL STATEMENTS Note 41, cont. Specification of Parent Company's holdings of shares in Group companies 31-12-2015 Group company/Corp. ID no./Registered office Share, per cent Carrying amount, MSEK No. of shares Celsius AB, 556194-4652, Linköping, Sweden Celsius Invest AB...

  • Page 114
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 42 MSEK UNTAXED RESERVES Parent Company FREE CASH FLOW VERSUS CASH FLOW FOR THE YEAR IN STATEMENT OF CASH FLOWS MSEK 2015 2014 2015 2014 Free cash flow Investing activities - interest-bearing: Short-term investments Other financial investments ...

  • Page 115
    ... relate to ThyssenKrupp Marine Systems AB. Purchase price paid also includes payment to minority stakeholders in Saab South Africa (Pty) Ltd in 2015 and in Bayes Risk Management AS 2014. Saab AB (publ) is a limited company registered in Sweden, with its registered office in Linköping. The Parent...

  • Page 116
    FINANCIAL INFORMATION - FINANCIAL STATEMENTS NOTE 45 ENVIRONMENTAL REPORT NOTE 46 EXCHANGE RATES USED IN FINANCIAL STATEMENTS Year-end rate Average rate Operations subject to licensing in the Parent Company Production of aircraft and aircraft components by the Parent Company, Saab AB, in the ...

  • Page 117
    ...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 5.00 per share, corresponding to a total dividend of MSEK 530. Unrestricted equity amounts to MSEK 5,020 in Saab AB and profit...

  • Page 118
    ...the Group and the Parent Company, and that the management report gives a fair review of the development of the operations, financial positions and results of the Group and the Parent Company and describes substantial risks and uncertainties that the Group companies faces. Linköping 26 February 2016...

  • Page 119
    ...accounts of Saab AB for the year 2015, except for the corporate governance statement on pages 48-56. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 34-114. Responsibilities of the Board of Directors and the Managing Director...

  • Page 120
    ... accounts, we have also audited the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the Managing Director of Saab AB for the year 2015. We have also conducted a statutory examination of the corporate governance statement. Responsibilities...

  • Page 121
    ... business days in advance. DIVIDEND The Board of Directors proposes a dividend of SEK 5.00 per share and 18 April 2016 as the record day for the dividend. With this record day, Euroclear Sweden AB is expected to distribute the dividend on 21 April 2016. DISTRIBUTION OF THE ANNUAL REPORT The annual...

  • Page 122
    ... shares 2015: 106,450,263, 2014: 106,916,255; 2009-2013: 109,150,344, 2008: 107,515,049; 2006-2007: 109,150,344. 4) 2015 Board of Directors' proposal. 5) Net income less non-controlling interest divided by average number of shares. Financials for 2013 are restated according to the changed accounting...

  • Page 123
    ... Service Provider for Sweden Research and Development Remotely operated vehicle Special Operations Tactical Suit The United States procurement programme for fighter trainers Unmanned Aerial Vehicle Wallenberg Autonomous Systems Program Carl-Gustaf CBRN CISB Erieye FMV FTE SA AB ANNUAL REPORT 2015...

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    120 - SA AB ANNUAL REPORT 2015

  • Page 125
    ...46 8 463 00 00 Linköping Saab AB P.O. Box 14085 SE-581 88 Linköping, Sweden Visiting address: Bröderna Ugglas gata, Linköping Telephone: +46 13 18 00 00 Corp. ID no. 556036-0793 www.saabgroup.com www.saab.com Concept, text and production: Saab Investor Relations in co-operation with Hallvarsson...

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