Saab Ab Class B · OMXSTO:SAAB_B
Saab Ab Class B — Investor Day (February 2023)
57 slides from Saab Ab Class B's investor day presentation, Feb 14, 2023
Slide 1: Capital Markets Day
Capital Markets Day February 14, 2023
Slide 2: Important information
Important information This presentation may contain forward-looking statements which reflect Saab AB’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indic
Slide 3: Today's speakers
Today’s speakers Micael Johansson Christian Luiga Görgen Johansson Lena Eliasson President and CEO CFO & Deputy CEO Head of BA Dynamics Head of Human Resources Christian Hedelin Erik Smith Fredrik Hassel Katarina Tracz Chief Strategy Officer Head of Saab USA Public Affairs Advisor Saab Moderator
Slide 4: Agenda for the day
Agenda for the day 09:00 – Welcome 09.00 – Our journey to capture future growth 09.45 – Executing on our multi-domestic strategy 10.05 – Fire-side chat with Q&A: Capacity, competence and supply chain 10:40-11:00 – Coffee break 11.00 – Lessons learned from Ukraine 11.15 – Innovation for future capabi
Slide 5: Our journey to capture future growth
Our journey to capture future growth Micael Johansson, President and CEO
Slide 6: A new reality
A new reality Capital Markets Day February 14 2023
Slide 7: A strong history of growth
MSEK SALES CAGR OF 6.5% (2013-2022) 140,000 A strong history 40,000 120,000 100,000 of growth 30,000 20,000 80,000 60,000 40,000 10,000 20,000 0 0 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 Order backlog Saab Sales Capital Markets Day February 14 2023 *adjusted for items affecting comparabil
Slide 8: Well positioned to capture further growth
Order backlog supporting improved growth Well positioned Order Intake Group Sales to capture momentum 42 BSEK further growth Strong R&D Backlog 18% 128 BSEK of Sales Capital Markets Day February 14 2023
Slide 9: A changed European defence market
European defence budgets expected to grow USD billion A changed 500 450 European 400 350 defence 300 market 250 200 150 100 50 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 Mar -22 (pre-war) Dec -22 (post-war) Capital Markets Day February 14 2023 Source: Janes
Slide 10: Swedish defence market is growing
Sweden’s defence budget SEK billion Swedish 120 defence 100 market is 80 growing 60 40 20 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 whereof procurement and maintenance Capital Markets Day February 14 2023 Source: Swedish Defence Budget results and plans 2017-2025
Slide 11: Our role in NATO
Our role in NATO Capital Markets Day February 14 2023
Slide 12: Strategy in place to deliver
Sustainability Strategy Core areas and future Driving growth in strategic in place capabilities Keeping markets to deliver people and society safe Operational Attract, efficiency develop and retain talent Capital Markets Day February 14 2023
Slide 13: Underwater Systems
Underwater Systems Capital Markets Day February 14 2023
Slide 14: Fighter Systems
Fighter Systems Capital Markets Day February 14 2023
Slide 15: Command and Control
Command and Control Capital Markets Day February 14 2023
Slide 16: Sensors
Sensors Capital Markets Day February 14 2023
Slide 17: Advanced Weapon Systems
Advanced Weapon Systems Capital Markets Day February 14 2023
Slide 18: Saab's major programmes
Saab’s major Major programmes Follow-on opportunities programmes Underwater Expendable Mobile Anti-submarine warfare 2022 Support, upgrades, follow-on systems Training Target (EMATT) for the US Halland submarine modification for Sweden 2022 Support, upgrades A26 submarine for Sweden 2015 Support, up
Slide 19: Investing in Future Capabilities
Focused Investing in Within Core Areas Future Targeted 50+ Capability Capabilities candidates Accelerated +1 BSEK R&D investment Partnership With partners and customers Capital Markets Day February 14 2023
Slide 20: A multi-domestic approach
Sweden A multi- United Kingdom domestic United States Germany approach Australia Capital Markets Day February 14 2023
Slide 21: A clear growth ambition
USA United Kingdom A clear 5,000 4,000 8,000 7,000 6,000 2,000 1,500 6,000 5,000 growth 4,000 3,000 5,000 4,000 1,000 3,000 2,000 3,000 2,000 2,000 500 ambition 1,000 1,000 1,000 0 0 0 0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Sweden Germany Australia 20,000 50,000 2,000 12,000 3
Slide 22: Enabling safe and resilient societies
Enabling safe and resilient societies Capital Markets Day February 14 2023
Slide 23: Attract, develop and retain talent and competence
Attract, develop FTE* net increase in 2022 ~100/month and retain talent and competence Target net increase in 2023 >100/month Share in strategic countries outside Sweden ~30% Capital Markets Day *Full time equivalents February 14 2023
Slide 24: Operational efficiency to meet the growth
Operational efficiency • Increase throughput by flow optimisation and digitalised processes to meet the growth • Improve Software factory to enhance development productivity • IT automation and standardisation • Managing supply chain risks • Facilities consolidation • Learning as a vital part of our
Slide 25: New medium-term financial targets
ORGANIC SALES GROWTH New medium-term Around 10% CAGR* financial targets OPERATING INCOME 2023-2027 Growth higher than organic sales growth CASH FLOW Cash conversion** >70% (cumulative over 5 years) *CAGR base year 2022 **Cash conversion = Operational cash flow / Operating income Capital Markets Day
Slide 26: Executing on our multi-domestic growth strategy
Executing on our multi-domestic growth strategy Erik Smith, President and CEO Saab, Inc. Capital Markets Day February 14 2023
Slide 27: Being multi-domestic is important
Being multi-domestic Close to customers Market access is important Political support R&D funding Export markets Product development Capital Markets Day February 14 2023
Slide 28: This is Saab in the U.S.
This is Saab in the U.S. Autonomous and Undersea Surveillance Quincy, MA Syracuse, NY Underwater Vehicles ~3,300 MUSD Aerospace Ground Combat Bristol, PA Cranston, RI Order intake since 2012 West Lafayette, IN Government Affairs Regional Aircraft Washington, DC Ashburn, VA ~410 MUSD Total U.S. sales
Slide 29: Example: Surface-based radars
Example: Surface-based radars Through acquisition, an established and trusted surface-based radar provider for U.S. Navy, Coast Guard, and FAA More than 100 radar systems across six classes of U.S. Navy Ships
Slide 30: Example: AT4
Example: AT4 AT4 anti-armor weapon Partnering with Action Manufacturing in Pennsylvania for increased manufacturing capacity for Ground Combat portfolio Over 700 000 AT4 systems sold into the U.S. market to date
Slide 31: Example: Autonomous and Undersea Systems
Example: Autonomous and Undersea Systems Anti-Submarine Warfare Training Target Unmanned underwater vehicle used in warfare training to mimic the acoustics and signals of a submarine so sonar operators can train themselves to track threats Total autonomous and undersea backlog of >200 MUSD
Slide 32: Formula for multi-domestic growth
Formula for multi-domestic growth Target Market Market Entry Strategies Future Position Niche market segments Strategic partnerships Balanced portfolio with production and development programs Strong Saab portfolio Mergers and acquisitions Broad geographic footprint close to Markets with old or imma
Slide 33: Innovation for future capability leadership
Innovation for future capability leadership Christian Hedelin, Chief Strategy Officer
Slide 34: Strategy in place to deliver
Sustainability Strategy Core areas and future Driving growth in strategic in place capabilities Keeping markets to deliver people and society safe Operational Attract, efficiency develop and retain talent Capital Markets Day February 14 2023
Slide 35: Strong track record of innovations
Strong track record of innovations Capital Markets Day February 14 2023
Slide 36: Preparing for the future
Information Superiority Proliferation Longer Range Preparing of Sensors & Higher Speed for the future Future battlespace New & Legacy Cyber & More Connected Space & Multi Domain Autonomy Capital Markets Day February 14 2023
Slide 37: Focus and accelerate our investments into future capabilities
Focus and accelerate our investments into future capabilities Increased and focused investment Leveraging Targeting selected future capabilities Core Areas Saab’s own R&D, direct and capitalized, no amortization 2022-2024 2025-2027 2028-2030 Underwater Naval Systems Autonomy + ~1 Air Autonomy Fighte
Slide 38: Case: Taking a leading offering to the next level
Case: Taking a leading offering to the next level Anti-tank system beyond line of sight Capital Markets Day February 14 2023
Slide 39: Case: Meeting new demand in Seabed Operations
Case: Meeting new demand in Seabed Operations Capital Markets Day February 14 2023
Slide 40: Financial Update
Financial Update Christian Luiga, CFO and Deputy CEO
Slide 41: Strong order backlog in all business areas
Strong order backlog in all business areas Years of sales in order backlog*: Order backlog duration 45 40.6 3.3x 3.4x 40 35 34.0 33.2 Aeronautics Dynamics 30 24.9 25.5 25 2.8x 3.5x 20 15 17.3 14.4 13.1 14.6 15.3 Surveillance Kockums 10 5 Saab Group 3.0x 0 Year 1 Year 2 Year 3 Year 4 After Year 4 Bac
Slide 42: Aeronautics
Business Area share of sales 2022 share of EBIT 2022 Aeronautics 31% 21% Sales EBIT and EBIT margin Operational cash flow 14,000 1,500 10% 500 12,000 8% 10,000 0 1,000 8,000 6% -500 6,000 4% 500 4,000 -1,000 2% 2,000 0 0 0% -1,500 2018 2019 2020* 2021 2022 2018 2019 2020* 2021 2022 2018 2019 2020 20
Slide 43: Dynamics
Business Area share of sales 2022 share of EBIT 2022 Dynamics 21% 48% Sales EBIT and EBIT margin Operational cash flow 10,000 2,000 18% 1,500 16% 8,000 14% 1,500 1,000 12% 6,000 10% 1,000 500 8% 4,000 6% 500 4% 0 2,000 2% 0 0 0% -500 2018 2019 2020 2021 2022 2018 2019 2020* 2021 2022 2018 2019 2020
Slide 44: Surveillance
Business Area share of sales 2022 share of EBIT 2022 Surveillance 33% 36% Sales EBIT and EBIT margin Operational cash flow 16,000 1,500 12% 5,000 14,000 4,000 10% 12,000 3,000 1,000 8% 10,000 2,000 8,000 6% 1,000 6,000 500 4% 4,000 0 2,000 2% -1,000 0 0 0% -2,000 2018 2019 2020* 2021 2022 2018 2019
Slide 45: Kockums
Business Area share of sales 2022 share of EBIT 2022 Kockums 9% 9% Sales EBIT and EBIT margin Operational cash flow 4,000 500 10% 1,000 400 8% 3,000 500 300 6% 2,000 200 4% 0 1,000 100 2% 0 0 0% -500 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Growth drivers going forw
Slide 46: Combitech
share of sales 2022 share of EBIT 2022 Combitech 6% 8% Sales EBIT and EBIT margin Operational cash flow 3,000 400 10% 600 8% 300 2,000 400 6% 200 4% 1,000 200 100 2% 0 0 0% 0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Growth drivers going forward: EBIT drivers going f
Slide 47: Saab's profitability improvement
Saab’s profitability improvement Scale effects ➢ Sales growth above OPEX growth – +++ Not applicable to R&D ➢ Utilisation of production facilities 15% EBITDA and EBIT margin 10% Efficiency measures ➢ Cost efficiency ++ ➢ Supply chain ➢ Improve project execution 5% ➢ Contract management 0% 2018* 2019
Slide 48: Tax, EPS & Dividend
Tax, EPS & Dividend SEK million, unless otherwise stated 2020 2021 2022 • Net income in 2022 impacted by EBIT 1,315 2,888 3,274 -202 MSEK by unrealised results from Financial net -203 -311 -455 short-term investments Taxes -20 -552 -536 Tax rate, % 1.8% 21.4% 19.0% • 2023-2027 estimated effective ta
Slide 49: Investments to build capacity
Investments to build capacity Saab investment excl. R&D • Investments expected to increase 2023- Estimated 2027 to support growth average/year 2,500 • Increase primarily driven by production 2,000 lines, facility expansion and IT • Increase expected to be front-loaded 1,500 within the period 1,000 •
Slide 50: Cash flow and NWC in focus
Cash flow and NWC in focus Operational cash flow SEK billion 3.3 3 2.8 2.6 • Continuous EBITDA growth 2 1 • Scale up in several programs will be 0 -1 positive on cash flow -1.3 -2 -3 -2.4 • Aim for more even payment terms 2018 2019 2020 2021 2022 • NWC will increase relatively balanced Net working c
Slide 51: Strong balance sheet
Financial position gives flexibility Business resilience 2.4 BSEK in macro environment with high uncertainty Net liquidity Investment Strong balance sheet 12.9 BSEK Cash and short-term investments Flexibility to act in a Partnership growing market 6.0 BSEK Revolving Credit Facilities M&A within Core
Slide 52: Cash conversion at Saab
Cash conversion at Saab SEK million 2020 2021 2022 Cumulative over 5 years EBITDA 2,833 4,826 5,401 Amortisation lease liabilities -437 -469 -524 Adj. for other items not included in cash flow 509 1,489 841 Operational Cash Flow Cash Change in operational net working capital 2,736 -76 -932 = Convers
Slide 53: Outlook 2023
Outlook 2023 ORGANIC GROWTH OPERATING INCOME CASH FLOW Operating income growth Organic sales growth of Operational cash flow to higher than organic sales around 15% be positive growth Capital Markets Day February 14 2023
Slide 54: Introducing medium-term targets
Introducing medium-term targets Medium-term: 2023-2027 ORGANIC SALES GROWTH Strong order backlog, well positioned products & services Around 10% CAGR* and a growing market OPERATING INCOME Growth higher than Scale, efficiency and portfolio management organic sales growth CASH FLOW Growing EBITDA, le
Slide 55: Summary
Summary ▪ Strong order backlog in all business areas and a growing market ▪ Earnings to improve through scale, efficiency and portfolio management ▪ Higher investments to handle capacity uplift ▪ Strong balance sheet gives flexibility to act ▪ New guidance for medium-term Capital Markets Day Februar
Slide 56: Closing Remarks
Closing Remarks Micael Johansson, President and CEO
Slide 57: CMD Summary
Our growth journey continues CMD ➢ Multi-year growth opportunity – around 10% CAGR ➢ Multi-domestic strategy will support our success Summary ➢ We will build capacity and resources ➢ Continue to innovate to secure future capabilities Profitability and cash flow ➢ Operating income growth higher than