SAAB ANNUAL REPORT 2000

Transcription

S A A B A N N UA L R E P O RT 2 0 0 0
Saab is one of the world’s leading hightechnology companies, with its main
operations focusing on aerospace and
defense.The group covers a broad
spectrum of competence and capability
in systems integration.
Saab develops, manufactures and
delivers advanced products and services
for the defense market, as well as for
those commercial markets where there
is a clear demand for its capabilities.
The Group’s own strength and strategic
partnerships enable it both to compete
and to collaborate in international markets.
Saab is active in more than 20 countries
but research, development and production are carried out principally in Sweden.
The Group has a total of approximately
15,000 employees.Total annual sales are
in the region of SEK 18,000 million. R&D
corresponds to about 25 percent of
turnover.
Saab – Competencies
Information gathering
Man/machine
Aerospace
Avionics
Data fusion
Right information at the right time
Systems integration
Decision support
Network systems engineering
IT security
Sensors
Communication
Presentation technology
Real-time simulation support
Materials technology
Design
Precision engagement
Saab is a knowledge company with a broad base of competencies in a number of high technology areas. Our employees are
highly educated and for many years Saab has been one of the
most popular workplaces among students at Sweden’s institutes
of technology.
The ability to develop military and commercial systems that
utilize and coordinate various competencies is Saab’s primary
strength.The company is a leader in advanced systems integration – getting a variety of complex subsystems to work together. In today’s advanced defense systems, a multitude of complex
systems interact – all of them essential for the system as a
whole to work properly.
Bringing together employees with all these competencies
will continue to be a major challenge for Saab.
CONTENTS
Saab 2000
2
OPERATIONS
The defense market
6
Comment by the Chairman of the Board
9
Interview with the Chief Executive Officer
10
Saab Systems and Electronics
13
Saab Aerospace
18
Saab Technical Support and Services
22
Saab Bofors Dynamics
26
Saab Ericsson Space
30
Saab Aviation Services and
Other operations
34
The Saab share
36
Employees
38
Environmental report
41
FORMAL ANNUAL REPORT
Financial review
44
Income statement, balance sheet
55
and statement of cash flows
58
Notes to the financial statements
59
and accounting principles
59
Auditors’ report
73
Board of Directors and Auditors
74
Group Management
76
Addresses
77
Saab 2000 – Net Defence
New technology and new missions
The end of the Cold War has placed new demands on the military, particularly with regard to its ability to take part in international missions. At the
same time, technological developments have facilitated new solutions.
The term Revolution in Military Affairs (RMA) was coined in the late
1990s to underscore this change.
Technologically, progress has been most clearly evident in three areas:
information gathering, decision support and precision engagement.
The ability to gather knowledge on the world around us
has become more advanced. Computer aided decision
support has become increasingly powerful. And we are
able to engage militarily with greater precision.
Furthermore, the opportunities to combine
defense systems in networks have
improved.
Advanced command and control systems
The acquisition of Celsius has broadened Saab’s
opportunities to accommodate this change and
meet the needs of today’s military, primarily
through Celsius’ expertise in command and
control systems and decision support. For
decades, the company had developed and
produced command and control systems for
Sweden and the international market.
Saab’s competencies have grown – at the
same time that its presence in the international
market has strengthened.
Net Defence
In 2000 Saab further concentrated its focus on the network
dimension of modern defense. Net Defence is Saab’s network concept that is expected to play a more prominent
role for Western militaries and which was introduced at
the Farnborough International Air Show in July.
Networks – both commercial and military – allow
individual units to support each other. The whole is less
vulnerable than the sum of its parts, at the same time that
resources can be utilized optimally and concentrated
when needed.
A Net Defence is a defense in which each unit, whether
an aircraft, ship, radar station, tank or even an individual
soldier, can benefit from the knowledge and capacity of the
total system. The total defense system becomes more flexible
and less vulnerable - and most importantly more powerful.
2
Highlights of 2000
● The acquisition of Celsius is completed, with its operations part
of the new organization as of March.The result is a stronger, more
complete company with a sizable market presence and double the
sales, bringing together a large portion of Sweden’s defense industry
● Conditional acquisition of 65 percent of Fokker Space, a leading
independent supplier of aerospace equipment
● Swedish support for the European Meteor missile project
● Several key breakthrough orders, both exports and in Sweden
–
–
–
–
28 Gripen aircraft to South Africa
Production order for the BAMSE air defense missile
Mobile combat training center to the Netherlands
New generation of naval command and control system
● Insurance solution for lease portfolio of regional aircraft
Saab Systems
and Electronics
Saab
Aerospace
Command and
control systems
Military aviation
Electronic
warfare
Avionics
Signature
management
Simulation
and training
Future aerospace systems
Commercial
programs
Saab Technical
Support and
Services
Saab Bofors
Dynamics
Technical
services,
operations and
maintenance
Missile systems:
– Land
– Air
– Sea
Maintenance
and modification
of military and
commercial
aircraft and
helicopters
Anti-armor
weapon
Underwater
systems
Saab Ericsson
Space
Computer
systems
Antenna and
microwave
technology
Control and
separation
systems
Saab Aviation
Services*
Leasing and
customer
support for
regional aircraft
Commercial
aircraft maintenance
Other operations
Aerial target
towing
Niche
companies
* As of January 1, 2001
3
Group operations at a glance
Net sales, SEK m.
Share of exports, %
2000
17,840
48
Pro forma
1999
18,018
48
1,533
8.6
1,448
1,038
1,125
6.2
1,116
735
18.2
28,141
41,091
12.8
15,267
29,891
1,077
3,808
652
4,462
9.75
3.00
6.90
2.50
15,453
16,665
Operating income, SEK m.
Operating margin, %
Income after financial items, SEK m.
Net income, SEK m.
Equity to assets ratio, %
Order bookings, SEK m.
Order backlog on December 31, SEK m.
Capital expenditures in property,
plant and equipment, SEK m.
Research and development, SEK m.
Earnings per share, SEK
Dividend per share, SEK 1)
No. of employees at year-end
1)
“
Considering the integration work we have had to
face, I am very pleased we were able to maintain positive
trends in income and order bookings. In fact, 2000 was
an all-time high for us in terms of orders received.
The positive order trend was enhanced by a number
of breakthrough orders that advanced our strategic
positions in important growth areas.
”
2000 Board proposal
Net sales
Sales per business area
Operating income/operating margin
SEK m.
20,000
SEK m.
2,000
Other
operations
Celsius
Aviation
Services
Celsius
15,000
1,500
15
10,000
1,000
10
500
0
5
0
98
99
00
98
99
00
Systems and
Electronics
Space
Bofors
Dynamics
5,000
Sales per market
%
20
Aerospace
Technical
Support
and Services
Australia, etc.
Central
Asia
and South
America
North
America
Other
Europe
Other
EU
Sweden
0
pro forma
Order bookings
Order backlog
SEK m.
25,000
Research and development
SEK m.
40,000
SEK m.
4,000
30,000
3,000
Employees
20,000
Celsius
20,000
15,000
Celsius
Celsius
15,000
Celsius
20,000
2,000
10,000
10,000
1,000
5,000
10,000
5,000
0
0
98
99
pro forma
00
0
98
99
00
0
98
pro forma
99
pro forma
4
00
98
99
pro forma
00
Saab – over sixty years of high technology
B17 – light bomber and
reconnaissance aircraft
When Svenska Aeroplan Aktiebolag was founded in April
1937, its primary aim was to meet the need for a domestic
military aviation industry in Sweden.
When it began deliveries in 1941 of its first aircraft, the
light bomber and reconnaissance aircraft B17, Saab was
already the dominant supplier to the Swedish Air Force.
Through the modified J21R in 1947 and the introduction
of the J29 Tunnan jet fighter in the late 1940s, Saab and
Sweden entered the jet age in a big way.
Since then Saab and the Swedish Air Force have followed
each other through various generations of military jet aircraft
and introduced world-leading technology. Tunnan
was followed in the fifties by Lansen and later by Draken
(1960) and Viggen (1971).
J29 – “Tunnan”
In 1993 Saab began delivery of Gripen, the first and thus
far the only fourth generation fighter aircraft in operational
service, and took another major step in its development.
In 1999 the first export order for Gripen was signed, with
the South African Air Force.
Military aircraft production led not only to commercial
aircraft production, but also a number of other businesses
and products. While Saab has always been an innovative
knowledge company, the step to industrial development
has never been far off.
J2IR – Sweden’s
first jet aircraft
Gripen
In the forties the company today known as Saab Automobile was spun off from Saab’s aircraft operations – one
of many successful commercial businesses that originated
from Saab. In the sixties Saab took part in the creation of
Sweden’s computer, missile and space industries.
In 1969 Saab and Scania merged to form Saab-Scania, a
company combining aircraft and defense systems with
the manufacture of automobiles and trucks. In 1990 Saab
Automobile was created, and in 1995 the current Scania
was separated from Saab. Since then Saab has sharpened
its focus on high technology segments of the defense
market.
Saab 92
Saab-Scania 1969–1995
After having been a wholly owned subsidiary of Investor
since 1991, Saab went public in its current form in 1998. In
connection with the listing on the Stockholm Stock Exchange,
BAE SYSTEMS of the UK acquired a 35-percent stake in Saab
and became its second largest shareholder, after Investor.
Carl-Gustaf
Bill – antitank weapon
In 2000 Saab acquired defense group Celsius and became
part of over a century of Swedish defense industry history.
Bofors, for example, has manufactured cannons since the
second half of the 1800’s, and the defense electronics companies within SaabTech Systems and SaabTech Electronics
have their roots in Philips, Data Saab, Ericsson, AGA and
Satt Electronics.
By acquiring Celsius, Saab has brought together a large
part of Swedish defense industry history and become
Sweden’s dominant company in the field. Its broad-based
product range is clearly focused on future defense needs.
5
The defense market:
Network defense and internationalization
Modern defense: Increase in high tech investments
well-trained personnel have increased at the expense of
The end of the Cold War has brought with it a change in
older, less advanced systems and the maintenance of high-
the role of the military in many countries, not least of which
volume organizations.
is Sweden. The previous threat of a mass invasion has been
The pattern of defense spending in Saab’s main markets
replaced by a more multifaceted scenario, at the same time
varied in the 1990s. A number of countries cashed in their
that new responsibilities have come to the forefront. In its
so-called peace dividend and implemented cutbacks, while
most recent defense resolutions – in 1999 and 2000 – Sweden
in other countries defense budgets changed little. In Sweden,
underscored the new mission of the military in today’s soci-
defense procurements remained relatively unchanged in the
ety and in particular the ability of Swedish forces to take
1990’s, although a volume reduction is planned in the years
part in international missions. The same trend, especially
ahead. As a whole, procurements have remained fairly con-
with regard to a strong international commitment, can be
stant, and all indications are that we will see a net increase
seen throughout the West.
in defense budgets in the years to come. For one thing, it is
Concurrent with the changes in national security, rapid
felt that after the 1990’s a number of countries, including the
technological developments have created new strategic
U.S., are facing latent procurement needs. Secondly, because
and tactical opportunities. In the same way that advanced
of the shift toward high technology systems, an effective
computer and information technology has become an
modern defense will have to invest substantially in updates
indispensable part of practically every area of civilian
and new technology.
society, it has also changed the way the military fulfills its
duties. Technology that facilitates a sweeping change in
More effective defense
military doctrine is already available or within close reach.
In recent years the concept of Revolution in Military Affairs
A change in perceived threats together with new technol-
(RMA) and Dominant Battlespace Awareness (DBA) has
ogy have led to a structural shift in defense procurements,
figured importantly in the policy debate in which attention
especially in Western Europe and North America. The high
has focused on the opportunities offered by information
technology content of defense systems and demands for
technology.
This represents a major shift in military doctrine, where
Defense procurements
in the West
After a decline in the mid-1990’s,Western
investments in defense materiel have again
begun to rise.The emphasis has shifted to
high technology materiel, however, at the
expense of volume organizations and less
advanced technology.
A new Swedish defense takes shape
The transition to a net-centric Swedish defense will take place gradually as
new systems become incorporated and existing systems are adapted to
serve in the new structure.Work is presently under way to develop testing
facilities for new net-centric systems. In 2000 Saab received its first orders
from defense agencies for so-called demonstrators.
Tomorrow’s military
USD bn
100
Technology
testing
facilities
Non-NATO Europe
80
NATO
prospects
NATO Europe
Testing facilities
for complete
systems
Fundamental
system structure
New systems
based on net-centric
architecture
60
2000
2025
International
modifications of
existing systems
40
USA and Canada
20
0
95
Existing systems are phased out
96
97
98
99
00
01
02
Today’s military
6
Network modifications of existing systems
Net-centric defense
Information gathering
Command and control
Precision engagement
Databases
Saab is developing the sophisticated net-centric defense of the
future. By combining information, command and control, and
precision engagement systems
in networks, a defense becomes
more flexible, more efficient and
less vulnerable. In a modern
net-centric defense, each unit an aircraft, ship, vehicle or even
an individual soldier – obtains
the information necessary for it
to best fulfill its mission.The
network consists of different
forms of military and civil infrastructure to transfer information wirelessly or through fixedline broadband networks.
broadband
electrical network…
wireless…
Battlespace awareness
Network
technological advancements in systems for information
ate information has become increasingly critical, at the same
gathering, command and control, and precision engagement
time that the ways we gather, disperse and present that
have radically improved the means to efficiently manage
information have improved. While firepower is still impor-
and organize our armed forces.
tant, precision is gradually supplanting volume.
All military doctrine is based on the mission a defense
These developments have deeply impacted the defense
force must fulfill and the technology available to it. Future
debate internationally and in Sweden.
doctrine will be no different, adapting to the role assumed
by the military, particularly in the international arena, and
A flexible, net-centric defense system
access to new technology.
The development of systems that support this approach and
A military built to meet the threat of a mass invasion on
the ability to participate internationally are two cornerstones
its home territory faces totally different threats than a mili-
in the vision outlined in Sweden’s most recent defense
tary that operates in a Europe without the Iron Curtain and
resolutions. Sweden’s aim is to develop a high technology,
with a growing responsibility for peacekeeping missions
net-centric defense that is flexible enough to accommodate
outside its borders.
international missions.
In both military strategy and technological development,
A gradual shift is planned in the years ahead in what
growing importance is being placed on knowledge of the
more reasonably should be described as a development
world around us. Access to accurate, relevant and immedi-
process rather than a revolution, where the change is radical
7
THREE DIMENSIONS OF
INTERNATIONALIZATION
In recent years the defense industry has
undergone a major internationalization in
important respects.This development has
both political and industrial origins and has
impacted the defense industry’s structure
and cooperations.
For one thing, there is an obvious political
interest in strengthening ties particularly
between Western European defense industries. Secondly, cooperations have become
increasingly necessary in order to share
the growing cost of developing advanced
weapons systems. No country outside the
U.S. can afford today to develop a significant
weapons system or major weapons platform
on its own.
Consolidation
A changing financial situation and strong
political will lead to a consolidation in the
industry’s structure during the latter half of
the1990’s.This trend started in the U.S., but
in recent years Europe’s defense industry
has also begun to take on new forms.
In Sweden, the most obvious example is
Saab’s acquisition of Celsius, which brought
together a significant portion of the country’s defense industry in one company.
Missile development was one area in partic-
ular where there was strong political pressure to concentrate the country’s
resources.
Two centers of power have developed in
Europe’s defense industry. One is the group
that has built up around BAE SYSTEMS,
with ties to Saab through BAE SYSTEMS’
35-percent interest in Saab and their joint
venture to export Gripen.The second is
EADS (European Aerospace and Defence
Systems), the result of a merger between
Germany’s DASA, France’s Aerospatiale
Matra and Spain’s CASA. It should be noted
that Saab cooperates and competes in various ways with both groups.
International projects
The internationalization of the defense
industry has resulted in more than just
mergers and ownership ties between companies in different countries. Another important aspect is multinational cooperation on
projects that are too expensive for any one
country to afford.
In missiles, international collaborations
are common. Saab, for example, participates
in METEOR and IRIS-T, where a half-dozen
or more countries are sharing the development work.These types of cooperations are
expected to become even more common
throughout the industry.
Policy changes and
institutional structures
Through its membership in the EU and
Partnership for Peace, Sweden has strengthened ties to its neighbors. In many respects,
this has also contributed to important institutional changes for the Swedish defense
industry.The philosophy that shaped Sweden
during the Cold War has been replaced by
a stronger emphasis on international cooperation.
Two important steps in this development
were taken in 2000, when Sweden became
a full member of the Western European
Armaments Group (WEAG) and was one
of the co-signers of a European framework
agreement that facilitates cooperation and
consolidation in the defense industry.
WEAG shares research and development
projects and coordinates defense procurement. Including Sweden and the five other
nations that became members in 2000,
WEAG currently consists of 19 members.
In July 2000 Sweden, the UK, Germany,
France, Italy and Spain signed the Letter of
Intent (LoI) agreement, a framework agreement concerning, among other things, the
use and protection of classified information,
harmonization of military equipment
requirements, and cooperation in research
and development.
and immediate. It is a process with a clear direction, how-
borne early warning radar system from Ericsson Microwave
ever, in which existing systems are being adapted and
Systems. These subsystems, which can function autonomous-
developed to operate in a network structure.
ly, have also been exported to countries that organize their air
Even though Sweden is a relatively small country, it has
force differently than Sweden. A key systems feature is that
the opportunity to command a leading position in this area.
they are adaptable to a network structure.
Sweden is far ahead of several larger nations in the deci-
Sweden’s conversion to a net-centric defense is expected
sion-making process. Technologically, it possesses cutting-
to continue for the foreseeable future and figure decisively
edge expertise in both its industrial and defense sectors.
in its defense spending. The military is planning to procure
“Flygvapen 2000” (Air Force 2000) is an example of
a number of demonstrator projects in which the network con-
a Swedish network already in operational service and
cept is coordinated with existing and future defense systems.
designed for both international missions and future
At the same time that current systems are being adapted, a
upgrades. The Air Force 2000 concept consists of a number
learning process is under way to concretely develop the
of subsystems that, taken together, provide a highly
structures that will used by the military in 10–20 years.
advanced air defense system.
For Saab, as a leading Swedish defense contractor, this
Among the systems at the core of this concept are Gripen,
will mean good opportunities at home and internationally.
the StriC air defense system from Saab and the ERIEYE air-
8
‘Saab is building the defense systems of the future’
Through BAE SYSTEMS’ ownership and cooperation in the
export of Gripen, Saab has a strong position in the industry’s restructuring and will continue to be active in this area.
We have to be in a position to capitalize on all opportunities
for structural transactions and cooperations.
Further acquisitions – primarily within the business areas
– are important to good growth, especially if we are going
to strengthen our position in the areas we are focusing on.
We also have to be strong enough to develop leading partnerships with other companies.
Saab’s strategy is clear: We are focused on a number of
military growth markets, but we also have the ability to utilize our competencies in commercial areas. As part of the
effort to create value for our shareholders, in the commercial
area we have successfully divested Marine Electronics and
Combitech Network. The insurance solution for our lease
A year of successful integration work and a clear focus
portfolio of regional aircraft is also an example of how we
on modern military thinking. Here, Saab Chairman
are creating value for Saab’s shareholders.
Anders Scharp gives his view of the past year.
In line with Saab’s policy to distribute 20–40 percent of
income before tax to shareholders, the Board of Directors
In 2000 the intensive integration work following the
is recommending a dividend for 2000 of SEK 319 m., or
acquisition of Celsius was our main focus at Saab. In one
31 percent of net income.
fell swoop we more than doubled our sales and brought
As a representative of the Board, I would lastly like to
together a large part of Sweden’s defense industry within
express our gratitude to Saab’s employees. The past year
one company.
was one of considerable change. We have become twice as
The integration work has had both positive and negative
large a company with a new structure and new products.
sides. We have made faster progress than expected – espe-
Some of our previous competitors are now our colleagues.
cially in certain business areas – and have been able to real-
Integration work is never painless. But because we have
ize synergies. Cultural differences have been bridged
agreed on the logic of merger of Saab and Celsius, we have
through a shared conviction that the acquisition made sense
been able to find solutions to problems both large and small.
and that there were good opportunities for us to strengthen
From the day the acquisition was announced in November
and complement each other technologically and industrially.
1999 until today, we have made consistent progress. It
As a whole, the integration work has progressed accord-
would never have been possible without the outstanding
ing to the plans that were set out when the acquisition was
efforts of all those who work for our company.
presented in November 1999. The strategic rationale for the
acquisition has been reaffirmed and strengthened in the
process. We are well prepared for the future.
The new Saab is a stronger, more complete company, particularly in light of the developments we are seeing in the
defense industry in Sweden and internationally. Saab today
has a strong portfolio of products and attractive development projects, particularly involving the net-centric defense
Anders Scharp
of the future. We have the capability to take part in the
Chairman
“Revolution in Military Affairs” that is under way in
Saab AB
Sweden and around the globe.
9
Focus on growth markets
The past year was one of major changes for Saab. The acquisition
of Celsius doubled sales and brought together a large portion
of Sweden’s defense industry within one company. Through
a number of strategic divestments, Saab further strengthened
its focus on select areas of the defense market. Saab President
Bengt Halse gives his view of the year and the challenges
the company faces.
How would you describe 2000 for Saab?
“The acquisition of Celsius naturally played a major role.
For many of us, it meant a big change – in ways both big
and small. Considering the integration work we have had
to face, I am very pleased we were able to maintain positive
trends in income and order bookings. In fact, 2000 was an
Celsius has given Saab strong capabilities in many areas,
all-time high for us in terms of orders received.
such as information and command systems. We have
The positive order trend was enhanced by a number of
gained a broader product range and a stronger marketing
breakthrough orders that advanced our strategic positions
organization.”
in important growth areas.
The South African order for 28 Gripen aircraft we signed
What has the integration meant for the various parts of Saab?
in 1999 was registered in 2000, now giving us another reference customer for our continued sales work. In missile sys-
“Our various parts have developed into a unified company
tems, the Swedish customer ordered our BAMSE air defense
with a clear focus on a number of growth markets.
missile and the multinational Meteor cooperation received
Dynamics has brought together Sweden’s missile industry
political approval.
in a single organization and created a turnkey missile sys-
Our command and control systems strengthened their
tems supplier. In the very first year Dynamics was able to
position through orders for a new generation of naval com-
reverse a loss into a profit.
mand system.
In the short term the greatest potential, we feel, is in the
Training Systems received an important order from the
Systems and Electronics business area. This is also an area
Netherlands for the Gamer mobile combat training center,
where we have a lot left to do. Last autumn a new manage-
adding an important reference customer in the NATO mar-
ment accelerated the restructuring of the business area’s
ket. These were just a few examples that are strategically
operations in line with our objectives.
important to Saab’s future.”
Technical Support and Services, Space and Aerospace
were able to continue with little change, although we also
How is the integration work progressing?
see important synergy opportunities within and between
these business areas.”
“Obviously a huge acquisition like Celsius places great
demands on our employees and organization. During the
When the Celsius acquisition was announced in November
year we experienced both the positive and negative sides of
1999, you said that Saab would focus primarily on military
integration work, but as a whole I feel we have succeeded
growth markets. Are Saab’s markets growing?
beyond expectations. If we compare with other integrations
– internationally in the defense industry and in other
“What we said then is even more true today. If you look at
Swedish industries – we have maintained a high tempo and
both the Swedish and international market, the trend we
a consistent focus.
talked about in November 1999 has been further accentuat-
During the year I met strong support for the integration
ed. The markets we focus on are either already in a growth
in every part of the company and at all levels. Our employ-
phase or have growth potential in the years ahead.”
ees have done a fantastic job.
10
You have said that the business area managers are the heroes
During the year you obtained an insurance policy for the
of the new Saab. What did you mean by that?
lease portfolio of regional aircraft. What does this mean?
“In a company like Saab, there are many heroes, but what
“Basically what we did was eliminate the market risk in
I wanted to get across is that each business area manager
the portfolio. We will still manage the portfolio, however, and
has clear financial goals and the mandate to reach them.
by doing so successfully help to improve the value of our
Their ability to deliver will play a decisive role in the
fleet of regional aircraft and add value for our shareholders.”
success Saab has as a whole.
Saab now has a new structure. All the business areas
How would you characterize the defense market’s develop-
operate as industrial units with clear operating objectives
ment and Saab’s position?
and essentially all the resources they need to achieve them.
Today’s business areas are also more homogenous and com-
“There is a common misconception that the defense
parable in size than they were before. That’s why it was
industry operates in a shrinking market. That isn’t the
natural to draw attention to them.”
case if you look at it from a global perspective and at the
type of systems and products we represent. The cutbacks
Will you continue to make acquisitions?
being made by the Swedish military, for example, are
mainly in operations.
“Yes, Saab will grow organically as well as through new
acquisitions. The business area and Group managements
both are constantly analyzing acquisition targets that could
help us to strengthen and develop our business.
Space’s conditioned acquisition of 65 percent of Holland’s
Fokker Space is an example of such an acquisition. It makes
us Europe’s leading aerospace equipment supplier and
gives us a good platform for our continued development as
a leading independent company in the area.”
How are you concentrating and focusing operations?
“One thing we are doing is divesting operations that don’t
fit our strategy.
This does not mean that they are necessarily unprofitable,
just that Saab – and the companies themselves – would not
In recent decades Saab, like many other companies in
benefit if we have to give them financial and other resources
the defense industry, has undergone a major transformation.
that are needed in our core business. Selling mature opera-
In addition to a rapid restructuring and rationalization, we
tions is also a way to realize value for our shareholders.
have transformed ourselves from a more traditional manu-
In 2000 we divested Combitech Network, Traffic Systems,
facturer to a modern knowledge company.
Bofors Weapon Systems, two repair yards, two surface treat-
Among other things, our capabilities in advanced systems
ment companies, an oil rig, a number of properties and the
integration have come to the forefront. This means not only
electronics production plant in Karlskoga. In January of this
understanding advanced technology, but also being able to
year we sold Marine Electronics to Emerson of the U.S.,
get a series of complex systems to work together. Saab is
which was a perfect deal industrially and also generated
therefore well-positioned in light of the changes we are
good value for our shareholders.
seeing in the market.”
The biggest challenge now is to find a solution for Celsius
Aviation Services. Now that we have divided CAS up into
Has Saab taken on a stronger military focus?
five parts, it will be easier to find structural solutions and
business opportunities. The divestment of Celsius Amtec
“To me, Saab is first and foremost a high technology know-
is an example of this.”
ledge company. The fact that we are active in a number of
11
ties. Partnerships are therefore a natural alternative when
we find commercial applications for our technologies. We
can add the competence we lack, spread the risk, reduce
the need for direct control from Saab and create value for
our shareholders.”
Looking ahead, when and how will Saab achieve its objectives
in terms of profitability and growth?
“If we look at growth, we doubled our sales through the
Celsius acquisition, and I see good prospects for further
organic growth and acquisitions in several of our business
areas. At the same time, of course, there is still some restrucmilitary growth markets is because our competencies clearly
turing left for us.
have a military application and we understand the defense
Due to the acquisition of Celsius, we currently are not
market. It is our ‘home market.’
meeting some of the margin objectives we have set. As
At the same time we have competencies and develop
I have said before, our goal is to reach them again within
technical solutions with commercial application. Most of
three years. There is no reason to accept a lower level of
our business areas have sales and exports to commercial
ambition.
markets, from commercial aircraft and IT consulting to
As far as our income for 2000 is concerned, we are
navigation systems and telecommunication satellites.”
pleased, despite the extraordinary allocations we had to
make in connection with the acquisition. We are headed
What is your strategy for the commercial market?
in the right direction.
We are now where we said we would be: Saab is focused
“Saab is and will continue to be an open intellectual
on the defense industry’s growth markets and we are in a
environment where employees have the opportunity and
good position, by working along with our partners, to bring
mandate to explore commercial areas of application for our
our technologies to commercial markets where they are in
technologies. We are and will be an innovation-driven, open
demand. We are financially strong and I feel we are succeed-
organization. At the same time we can’t lose our financial
ing well in our ongoing efforts to recruit and develop
focus; we have to earn money doing what we do.
employees with cutting-edge competencies in all high tech-
We have a business strategy that supports our core
nology areas of our company.
– where development and production resources must
The future looks bright.”
be available if we are to maintain our position in core
areas.
Commercial Aircraft Programs – where a large part of
development and production resources are currently devoted
to the production of Gripen – are important, for example, if
Saab is to be effective in military aviation. At the same time,
by serving as a partner in the development of the world’s
leading passenger aircraft we can develop our business and
improve our design, materials and production know-how.
We also have a more traditional spin-off strategy, where we
utilize technological breakthroughs within Saab for other
areas of application.
The challenge with both of these strategies is to manage
good ideas in an efficient, profitable manner. We can learn
a lot by participating in new markets, but we realize that
there are others with more experience and better opportuni-
12
Dan Jangblad:
“The Saab Systems and Electronics business area
comprises Saab’s capabilities in avionic systems and
systems and services for training, simulation, command
and control, electronic warfare and signature management. Our customers can be found around the world
among air forces, armies and navies. Our breadth and
depth, particularly in command and control systems,
gives Systems and Electronics a strong position in the
Swedish military’s transformation from a defense against
mass invasion to a net-centric, flexible, proactive military
(Net Defence).
This new type of defense is being debated in a growing
number of countries and has battlespace awareness as
its key component. Since many of the business area’s
products involve the processing, presentation and, when
necessary, simulation and modeling of information, we
are convinced that the global market for our products will
grow. Our share of exports is already high (50 percent),
and as a world leader in several product areas we feel
there are good opportunities for continued profitable
growth.
In 2000 order bookings were very good, at the same
time that we began extensive integration work. This will
continue – in part to achieve economies of scale and in
part to prepare for exciting new business opportunities
in areas where our current operating areas converge.”
SAAB SYSTEMS AND ELECTRONICS
Saab Systems and Electronics comprises Saab’s competencies in defense electronics, primarily with a focus on
modern, net-centric defense.The business area utilizes
a broad range of technologies to develop offensive and
defensive systems for information defense.These systems
allow decision-makers – from the highest-ranking officer
to an individual soldier – to see and hear while avoiding
being seen or heard. Systems and Electronics also develops
equipment for simulation and training.
Share of
Saab’s sales
Operating
areas
Commercial
systems
Signature
management
Training
and
simulation
Total, SEK 18,573 m., net
Command and
control systems
Electronic
warfare
Avionics
Net
sales
Operating income
and operating margin
SEK m.
5,000
SEK m.
500
%
4,000
400
10
3,000
300
2,000
200
1,000
100
0
0
99 00
pro forma
13
5
0
99
pro forma
00
Battlespace awareness: A cornerstone of Net Defence
Command and control and information systems:
on. But it is just as important to try to prevent the enemy
The right information at the right time
from accessing information. The less informed (or more
Establishing battlespace awareness requires systems that
misinformed) that enemy is, the easier it is to gain battle-
collect and process various types of intelligence and present
space and tactical superiority.
them in real time. In today’s defense, these systems have
Saab has extensive systems know-how in electronic
become increasingly important. With the right information
warfare, i.e. the ability to disrupt and in other ways deceive
and decision support, the efficiency of a defense system can
one’s enemy.
be enhanced many times over.
Electronic warfare systems are available for all types of
Command and control and information systems that meet
combat forces as well as the protection of large fixed instal-
the demands of a future crisis situation integrate a large
lations and infrastructure. Saab currently develops equip-
number of competencies and technologies. Sensors are used
ment for all branches of the military and offers products
to gather information, while so-called data fusion sifts out
within the three main types of systems: jammers,
the right information for the task at hand. Presentation tech-
warners and decoys.
nology – understanding the interface between man and
Jammers utilize electromagnetic radiation to disrupt
machine – plays a key role in ensuring that the right
and confuse the enemy’s radar system. Systems and
information actually is understood by the decision maker.
Electronics has developed, among other things, the
In addition, everything must be done in real time. Those
EWS 39 electronic warfare system for Gripen.
who have to make a decision have to be able to do so based
Warners indicate when an enemy is trying with sensors,
on what is happening at that very moment.
for example, to localize a unit. For decades Saab has been
The business area develops three types of command and
supplying radar warners and jammers for generations of
control systems: land-based, naval-based and vehicle-based.
aircraft used by the Swedish Air Force and in recent years
They cover all types of weapons.
has made breakthroughs in the international market.
The main land-based system is STRIC, an air defense sys-
In June 1999 Germany decided to equip its naval and
tem. STRIC supports the coordination of air combat forces
air force Tornados with radar warners from Saab. The order
and, together with Gripen and other information gathering
is part of a mid-life upgrade that the Germany Navy’s fleet
systems, sits at the core of Sweden’s “Air Force 2000” concept.
of Tornados will undergo.
Naval command and control systems are an area where
Decoys confuse and divert approaching missiles. Flares
Systems and Electronics has been supplying the Swedish
and chaff are used, for example, to confuse the target-seek-
military and navies around the world for decades. Saab is
ing mechanisms in missile systems.
a world leader in the field, and international demand is
Saab is currently the market leader in this area and has
expected to grow in the years ahead. On behalf of the
long been a major exporter of decoys. Harrier, Tornado,
Swedish Navy, it is currently developing one of the world’s
most modern command and control systems, for the corvette
Visby.
Vehicle-based command and control systems are a market
with considerable potential. Warners, command and control
and fire control systems are increasingly being integrated in
combat vehicles and in the process adapting them to future
defense systems.
Command and control systems account for a fourth of
the business area’s total sales. Approximately 70 percent of
invoiced sales are exports, and as a whole the area’s growth
potential is good.
Electronic warfare: disrupt and deceive
The ability to establish battlespace awareness is determined
in large part by the information you have on your enemy,
The Air Force’s STRIC air defense system supports effective utilization of air combat
forces and sits at the core of Sweden’s “Air Force 2000” modernization concept.
on your own conditions, on the weather conditions, and so
14
Avionics – flight control
Design, development and delivery of:
Target radar
Tactical control systems Fire control systems
The trend in avionics systems is toward an increased use
of computer-guided electronics. Saab develops display systems, computer equipment, and electronic and mechanical
equipment for aircraft.
Operations are tied closely to the Gripen system and
include the development of Gripen’s EP-17 cockpit display
System integration of:
Anti-aircraft systems
Reconnaissance radar
Equipment to distinguish
friend from foe
Sonar
5-inch gun
Gyro/navigation
Navigation radar
Radio intelligence system
system, where four displays give the pilot access to various
forms of tactical information.
In 2000 two small but strategically important export
orders were received. One was from the U.S. helicopter
manufacturer Sikorsky, which ordered the development of
SaabTech Systems has supplied naval command and control systems for the
Australian Navy’s frigates. In addition to developing and providing subsystems for
tactical control, fire control and target indication, the integration of a command and
control system also involves adaptation of existing systems.
a rotor control system, an important breakthrough for Saab
in a new market. In addition, the Spanish Air Force has
decided to equip its EF-18a/B fighters with a digital solidstate recorder (DiRECT) from Saab.
Avionics represents one fourth of the business area’s total
F-14 Tomcat, Viggen, Gripen, Jaguar, Mirage, Nimrod and
sales.
Eurofighter 2000 are all the aircraft for which Saab has
developed or is developing decoy systems. In addition,
Simulation – education and training
Saab is a leading supplier of decoy dispensers for training
Handling sophisticated defense systems requires education
and tactical applications.
and training under realistic conditions.
One of Saab’s key competitive advantages is its ability to
The growing need to be as well-prepared and trained
integrate jammer, warner and decoy systems. This assures
as possible, including for missions in foreign environments,
maximum results – the right countermeasure at the right time.
is driving demand for various forms of realistic simulation
Electronic warfare accounts for one fifth of Systems and
systems.
Electronics’ total operations. Forty percent is exports, and
Saab has extensive experience developing systems
growth opportunities are good.
that help combat forces train under realistic conditions.
Operations comprise laser simulator systems, combat
Signature management – staying invisible
training centres, visual simulators and range equipment.
Signature management – or advanced stealth systems – is
Laser simulation, currently Saab’s largest market, consists
closely related to electronic warfare and consists of tech-
of simulators that replace ammunition with laser light.
nologies and systems that allow fixed installations, vehicles
Saab has developed advanced simulator systems for
or even individual soldiers to avoid being seen by the naked
combat vehicles, anti-tank weaponry, small arms, helicop-
eye or with radar, UV or IR sensors. Modern signature man-
ters and personal detection vests for individual soldiers.
agement systems are developed from traditional camouflage
Saab’s BT 46 laser simulator system, which has set the world
technology and utilize materials technology and an under-
standard, is a so-called two-way simulator that not only
standing of how today’s leading sensors work.
records each firing and hit. The system also takes into
Saab commands leading-edge expertise in this field and
consideration the distance to the target as well as its
currently offers a product range covering a large part of the
movements, providing the gunner feedback on where
electromagnetic spectrum, from ultraviolet light to radar.
and how the target was hit.
In 2000 a major order was received from the Swedish
In 2000 BT46 was sold for the first time in a helicopter
Defence Materiel Administration for the multispectral
application through a development contract for Germany’s
mobile camouflage system for Leopard 2 tanks.
PAH-1 A1 anti-tank helicopter.
Products are sold in 40 countries and exports account for
Combat training systems, which coordinate various types
approximately 80 percent of sales. The operations have con-
of simulation equipment in an overall system, is a growing
siderable growth potential.
new area. Saab has developed GAMER, which makes it possible to combine live training, combat operations, strategy
15
ment used by the oil industry, among others. The company
originated from the radar-based level gauges that Saab
developed for missile systems in the 1970’s. Through the
divestment, Saab was able to realize significant value.
Saab Combitech Systems grew out of the real-time programming competence needed for the computer system in
the Australian submarine project Saab Instrument was
involved in. Today Saab Combitech Systems is a consulting
firm specialized in the development of embedded real-time
systems and has a broad base of clients in digital TV,
defense, telecommunications, the automotive industry and
medical equipment. They include Ericsson, Gambro, Nokia,
auto manufacturers and aerospace contractors. Combitech
Systems has been profitable since its start in 1992 and today
Saab’s BT 46 laser simulator fire and control system for the PAH-1
helicopter in the German AGDUS program.
has over 250 employees.
and tactics. The system is modular, scalable and mobile and
developing transponder systems for customers in Sweden
can therefore be expanded when necessary. GAMER may be
and internationally. In 2000 the International Maritime
used by units outside their home base, for example, on inter-
Organization (IMO), the United Nations’ specialized agency
national missions.
responsible for improving maritime safety, decided to make
For the past decade Saab TransponderTech has been
The U.S. Army, which previously purchased a GAMER
automatic information systems (AIS) mandatory on the
system, has ordered three additional systems together with
56,000 ships in the so-called Solas class. Saab Transponder-
a large number of personnel detection vests and laser simu-
Tech, the world leader in AIS, will have a major opportunity
lators for infantry weapons. The contract value is approxi-
to supply transponders to ships both in and outside the
mately SEK 400 million.
Solas class. The system also has good prospects of achieving
In 2000 the Royal Netherlands Army ordered a mobile com-
the same standard status in aviation.
bat training center based on the GAMER concept. The contract
value is SEK 560 million, including on-site operational and
Highlights in 2000:
logistic support in the Netherlands for 15 years. The order is
• Development of the command and control system for
an important breakthrough for GAMER in the international
Visby corvettes
market in general and the NATO market in particular.
• Order for mobile combat training center from the
Training and simulator systems represent approximately
Netherlands
one fifth of Systems and Electronics’ total sales, with exports
• Order for air command and control system from
accounting for 92 percent.
Southeast Asia
• Order for electric warfare equipment for Eurofighter
Commercial operations
• Initial order for radar warners for the German Air Force’s
Systems and Electronics has a number of commercial
Tornado
operations outside its core business of defense information
• Order from Switzerland and Finland for fire control
systems and electronics. Most originated as military technol-
equipment for CV 9030 combat vehicle
ogy developed by the company, althrough in some cases
• Order for naval command and control center from the
they are operations Saab acquired and which relate to its
United Arab Emirates
core business.
• Simulator order for the German Army’s PA-1-A1
The strategy with all commercial operations is to comple-
helicopters
ment our own technology with capital and expertise from
• Order for GAMER instrumented training system from
outside partners.
U.S. Army
In early 2001 Saab Marine Electronics was sold to
• Development of uniform countermeasure technology
Emerson of the U.S. Saab Marine Electronics develops level-
• Order for digital registration (DiRECT) from
gauging systems for tankers along with land-based equip-
Spanish Air Force
16
Björn Gullstrand has managed the development of the CETRIS command and control
system used in the Swedish Navy’s modern Visby corvettes.
The Visby corvette:
Designing the world’s most modern naval command and control system
“We are developing the world’s most modern naval command and control system
and making the Visby corvette a hypermodern weapon,” says Björn Gullbrand,
the project manager at SaabTech Systems
responsible for developing CETRIS, the
command and control system that provides the brains behind Sweden’s new
Visby corvette.
Project management, which began in
1998, includes responsibility for ongoing
contacts with the customer, but most
importantly ensuring that 150-200 software
components are integrated according to
plan in the command and control system,
which in turn is integrated with other subsystems into a total system.
“This is the largest command and control system developed in Sweden and a
tremendous challenge,” Björn Gullbrand
explains. “It is not only unique in its performance, but also because of the large
share of so-called COTS (Commercial OffThe Shelf) equipment we were able to use,
i.e. components that aren’t developed
specifically for military purposes. This
applies to both computers and software.”
A modern naval command and control
system provides the ship’s officers and
other crew members with real-time information from its own and other sensors
(radar systems, etc.). Access to large
amounts of data and real-time presentation
– knowing what is happening when it happens – require sophisticated data fusion
(the ability to sift through and process data)
and man/machine interaction (how data
is presented to the user). In both of these
areas, SaabTech Systems has world-leading
competencies.
“Our value-added is in the development
and adaptation of various components, particularly the development of software and
ability to integrate a large number of subsystems into a functional whole,” he continues. “The real time aspect is critical. You
have to be able to see what’s happening
right away, not fifteen seconds later.”
The ability to distribute information over
data links - a technology that has been used
by the air force for a relatively long time
and in the past 10-12 years has become
more common in naval systems - makes it
possible to establish information superiority
17
at sea as well. The Visby system can work
effectively together or with support from
other systems.
“Because of its stealthy capabilities, the
Visby corvette places special demands on
a command and control system,” says
Björn Gullbrand. “We have to be able to
keep track of and in real-time present the
various parameters that determine the
ship’s stealthiness. In addition, to support
the corvette’s systems for underwater warfare, we have equipped the presentation
system with a three-dimensional underwater map to help determine the underwater
landscape in real-time.”
Currently around 200 employees are
involved in development work. The system is scheduled to be in service on the
corvettes in 2003, and the project is keeping to its original timetable.
During his time at SaabTech Systems,
Björn Gullbrand has held a number of
positions. Apart from managing the development of the command and control system for Visby, he spent over four years at
the business area’s Australian unit as well
as on other international assignments.
Åke Svensson:
“As a supplier of the core components of a modern air
force, Saab Aerospace is on the cutting edge in the development of future defense solutions. In Gripen, we have a system that can stretch our customers’ defense capabilities
beyond that of a conventional aircraft.
Gripen today is a cornerstone in the Swedish defense.
We have secured our first export order and are confident
that we will succeed in a number of export markets.
Growth opportunities for the business area are mainly
a product of the growing need to replace older generations
of fighter aircraft and the demand for defense systems
that can do more than conventional fighters. We offer a
technology that raises the concept of a military aircraft
to a totally new level and a system that provides a unique
level of performance for the money.
Commercial air traffic is expected to increase in the
decades ahead, and we have a good opportunity to take
part in the development of aircraft that meet this rising
demand. By participating in commercial projects, we can
utilize and develop our competencies and the production
capacity in our plants.
With our current order backlog, Aerospace will be able
to generate a profit margin that meets Saab’s overall
objective in years to come. By focusing on long-term
growth, we can expect profit to further improve.”
SAAB AEROSPACE
Saab Aerospace develops entire aircraft and subsystems
for the military market.The business area utilizes and
integrates the competencies needed to build worldleading military fighter aircraft that combine powerful
weaponry with advanced command and control and
information systems.
Moreover, Aerospace serves as a partner and supplier
to manufacturers of large commercial aircraft.
Share of
Saab’s sales
Operating
areas
Future Products
Commercial
Programs*
Gripen
Net
sales
Operating income
SEK m.
5,000
SEK m.
500
%
4,000
400
10
3,000
300
2,000
200
1,000
100
0
* external sales
99 00
pro forma
18
0
5
99 00
pro forma
0
SAAB AEROSPACE
The air force technology of the future
Gripen: A unique defense system
one Gripen can replace several older aircraft and play a
Gripen is built on a totally digital infrastructure, which
broader role in an overall defense, a potential enemy must
means that it can be continuously updated and enhanced.
always prepare for the worst, assuming that all Gripens are
The Gripen system will therefore remain the ultimate in mil-
equipped to meet the enemy threat.
itary aviation for several decades. Today’s customers are
Gripen therefore has a greater practical impact at a lower
buying a system that their air forces can grow and develop
total cost.
with, and Saab has a product that will remain a world
At year-end 2000 a total of 98 Gripen had been delivered
leader for some time to come.
to the Swedish Defence Materiel Administration, making it
The Gripen system, which is Saab Aerospace’s most
a cornerstone in the future defense structure now taking
important product, is the first – and to date the only –
shape in Sweden. This is attributable to Gripen’s inherent
fourth-generation multi-role fighter to enter service. Gripen
strength and ability to be integrated into a total defense
has a unique position as an integrated command and con-
system. In two important respects Gripen is designed to
trol, information and weapon system, and in several areas
grow and develop with its customers. Because it can be
has introduced new technological concepts and solutions.
upgraded, it can be kept modern and adapted to changing
Gripen is both multi-role and swing-role. This means
needs. In addition, it is designed for a net-centric defense, i.e.
that a single aircraft can serve various types of missions.
a structure that can share information with other units
In previous generations, there were three different types of
through the system’s data links.
aircraft for intercept, attack and reconnaissance missions.
Swing-role means that the Gripen system not only can
Export market
conduct different types of missions, but that the pilot can
Gripen’s international sales have been handled since 1995
reconfigure the aircraft for new missions while in the air
by a joint venture with Saab’s British partner, BAE SYS-
by simply pressing a button.
TEMS. The combined international contacts and marketing
channels of these two companies give the Gripen sales
Cost-efficient defense – a system to grow with
organization the strength it needs to compete with French,
At the time the Gripen system was ordered, development
American and Russian alternatives. Furthermore, the politi-
costs for fighter aircraft had followed a steadily climbing
cal support of the Swedish government is reinforced by the
curve. Since the first jet aircraft were introduced, each
vital support of the British. Participation in a broad interna-
succeeding generation had been more expensive. One of the
tional industrial and financial network through Investor’s
conditions set by the Swedish government when it ordered
ownership of Saab has been another important factor in the
Gripen was that this trend be broken.
export efforts.
In every respect, Gripen has met or surpassed the
In December 1999 South Africa became the first foreign
demands initially made by the customer, and it has a
customer for the Gripen system, ordering 28 aircraft for a
considerably lower lifecycle cost than older competing
contract value of SEK 9.3 billion. This breakthrough order
systems. Gripen is a highly cost-effective defense system.
has provided an important reference for the consortium’s
The financial advantages are not limited to the system’s
continued export work.
low total costs, but also are a factor of its versatility. Because
“Air Force 2000” is the name
of the air defense system
that the Swedish military has
developed.The core systems
consist of Gripen, STRIC air
defense and ERIEYE long-range
radar.The concept also integrates anti-aircraft units – in
the future the BAMSE missile
system as well as a number
of other radar systems and
weapons platforms.
Operational
management
All of Gripen’s competitors – especially the U.S. F16 and
Air tactical
command
Combat command
center
Base battalion
19
Anti-aircraft ships
SAAB AEROSPACE
Partner to the commercial aircraft industry
The Commercial Programs unit develops and manufactures
structures and subsystems for military and commercial aircraft. Commercial Programs serves as an in-house supplier
of production services for Gripen and spare parts for the
regional aircraft previously manufactured by Saab as well
as an external partner and supplier to the two remaining
manufacturers of large commercial aircraft, Boeing and
Airbus Industrie.
In 2000 Airbus decided to begin production
of the new A380 superjumbo.
Because of its roots in commercial aviation and the production resources available through Gripen, Commercial
Programs qualifies as a supplier at the highest systems level,
F18 and French Mirage – belong to the older third genera-
tier two, where it has responsibility for specific parts of the
tion. The new aircraft expected to reach the market in the
aircraft. In Saab’s case, it develops and manufactures complex
future – the U.S. F22, Eurofighter and French Rafale – will
wing and floor structures and the main landing gear doors
be heavier, more expensive and more costly to operate than
for several aircraft in the Airbus family.
Gripen. The performance of the Gripen is already competi-
In December 2000 the final go-ahead was given to the
tive with that of the American Joint Strike Fighter, which
Airbus superjumbo A380. The A380 will be the world’s
is not expected to enter service until after 2010.
largest aircraft, with room for over 650 passengers, and is
In the decades ahead an estimated 2,000 fighters will have
designed to meet the growing demand for commercial air
to be replaced in the markets that are available to Saab.
service that is expected for the foreseeable future.
In addition to constant analysis work, export activities
For Commercial Programs, the A380 project under certain
are being pursued actively in around ten countries, all of
conditions will provide an opportunity to expand the part-
them in different stages of modernizing their air forces.
nership with Airbus and take part in important aspects of
Other potential countries are continuously monitored by
development and design work.
the organization that Saab-BAE SYSTEMS has built up.
In some markets, older second-generation fighters will be
Development of a new military transport aircraft
replaced. In others, it is third-generation aircraft, in many
The development of a new military transport aircraft, the
cases the F16, that will have to be replaced.
A400M, is another area where Saab has opportunities to
utilize its competence in the design and production of air-
Future air defense
craft. A400M is being developed by the Airbus Military
The Future Products business unit is responsible for devel-
Company to replace the aging fleet of transport aircraft that
opment work on future defense technology. In addition
has been serving the needs of many of Europe’s militaries.
to long-term work, the unit is developing technology to
The half-dozen countries that are participating in the project
support current operations, from production processes to
thus far have ordered slightly over 200 aircraft. Saab’s role is
customer support.
first and foremost dependent on a Swedish decision to join
Operations are clearly focused on net-centric defense -
in the project.
and therefore on defense systems that integrate command
and control, information and weapon functions and which
Highlights in 2000:
can operate in networks.
• The first export order for 28 aircraft from South Africa
was finalized
One area that received a great deal of attention in 2000
• First Gripen flight with helmet mounted display
• The development on unmanned aerial vehicles (UAV’s)
was unmanned aircraft, so-called UAV’s (Unmanned Aerial
Vehicles). Saab is participating in a number of European
received a great deal of attention
development projects to study opportunities for UAV’s,
with Future Products involved in various concept studies.
Other important areas include the Swedish and Nordic
helicopter procurement process and the maintenance of
Viggen and SK60.
20
SAAB AEROSPACE
Kjell Möller (center), who was in charge of the Gripen campaign in South Africa,
together with South African aircraft technicians during their training at Saab in Linköping.
Selling the Gripen:
A long race
There are many different dimensions to
the export of a defense system as complex
as Gripen. The combination of product
performance, political considerations,
financing and industrial participation
places special demands on the sales work.
In the early 1990’s Saab had contact with
representatives from South Africa, and in
particular the South African Air Force, in
many situations, including international
air shows. Because of South Africa’s
growing interest and clear indications that
it planned a major defense procurement,
Saab and its partner, BAE SYSTEMS,
established a campaign organization
for South Africa.
From Saab’s end, the organization was
led by Kjell Möller, who, together with the
British campaign manager, coordinated the
resources that Saab and BAE SYSTEMS had
access to. Kjell Möller has been with Saab
for various lengths of time since 1996 and,
through a long period at Dynamics in
Linköping, has been with Gripen’s marketing department since 1996. Today he is its
manager.
“As a former competitive bicyclist, it’s
natural to use the analogy of a race,” he
says. “In 1997 the South African Air Force
decided it wanted the Gripen. In 1998 their
government decided to proceed with final
negotiations. In September 1999 we were
presented as part of the total procurement
package and in December of the same year
the contract was signed.”
Sales work of this type usually involves
a number of parallel processes. The ability
to find solutions for financing and industrial participation often plays just
as prominent a role as the aircraft’s performance.
“Without a product of the highest world
class, there wouldn’t have been a market
for us, but to be successful you also have
to build confidence among a wider circle
of interests, including politicians, businessmen, union representatives and not least of
all the public,” says Kjell Möller. “The
combination of the Gripen system and
the industrial participation we were able
to offer made us very strong, but the
political support from both Sweden and
21
the UK was also important. There is a
big advantage being Swedish in South
Africa.”
In all, around 100 people have been
involved on site in South Africa at various
times to work on the campaign, in addition
to others within and outside Saab’s organization. During the final negotiations, 15-20
people were there to support in various
ways the negotiating team working on the
contract and ensure that all the interested
parties were on board.
“One thing is certain,” says Kjell Möller.
“A deal like this one isn’t over until it’s
over. What you thought was assured yesterday might be open for discussion today.
The competition is tight and there are so
many puzzle pieces that it takes is endless
footwork to get everything in place.
We now have a contract, but the campaign is continuing. The South African
customer is very competent and respected
and and we have gained a very valuable
ally when we are out in other export
markets.”
Jan Eiborn:
“Saab Technical Support and Services is a high technology service business with a broad base of competencies
and longstanding customer relations with both the
Swedish military and civilian customers in Sweden
and abroad.
Thanks to our ability to reach new markets with the
competencies we have developed within the business
area, we have been able to grow from our core at the
same time that we have made acquisitions.
The development of a modern net-centric defense
is creating opportunities for many parts of Technical
Support and Services. The consulting expertise we command, particularly with regard to IT and communications,
in combination with our understanding of the defense
market, gives us a strong position in this area.
Technical Support and Services’ responsibility for helicopter operations gives us a clear role within the overall
Group and is an important factor in developing cooperations with the other business areas.
Our growth opportunities in the years ahead are good
but require that we continue to develop our competencies,
strengthen our consulting image and consolidate our
position as a service company.”
SAAB TECHNICAL SUPPORT AND SERVICES
Saab Technical Support and Services provides sophisticated technical services, maintenance and customized
systems solutions in information technology, electronics
and aviation technology.Technical Support and Services
is also engaged in special flight operations services, primarily aerial target towing and testing of electronic
warfare equipment.The business area’s market consists
of defense customers, government agencies and select
niches industry.
Share of
Saab’s sales
Operating
areas
System
deliveries
Maintenance,
incl.
Nyge Aero
Technical services
Net
sales
Operating income
SEK m.
5,000
SEK m.
500
%
4,000
400
10
3,000
300
2,000
200
1,000
100
0
0
99 00
pro forma
22
5
99 00
pro forma
0
A versatile high technology service company
Aircraft maintenance
The Saab Technical Support and Services business area is
dominated by Aerotech Telub, which is 57-percent owned
by Saab and 43-percent by the IT company TietoEnator. The
business area also comprises the aviation services company
Saab Nyge Aero. As of 2001 it also includes Aviocomp,
which is responsible for component maintenance for regional
aircraft within the business area. AerotechTelub comprises
a broad base of competencies that have been developed in
large part due to the unique situation with regard to maintenance in the Swedish military.
Unlike in many other countries, the Swedish military has
been outsourcing a large part of its maintenance needs for
years. Basically, maintenance in Sweden is done at the front
and back level. The former is handled by the military’s own
personnel and consists of basic measures. The latter is partly
regional and partly central. The central back level is where
the most advanced maintenance is done on systems and
equipment, the majority of which has been handled for
AerotechTelub maintains the Swedish military’s HKP 9-helicopters.
decades by non-military companies. AerotechTelub has long
held a strong position in the Swedish market for military
ing and verification to operational support. Participation
maintenance.
in all these stages has helped the company build up
AerotechTelub generates sales of approximately SEK 640
comprehensive know-how, which, in combination with
million in the maintenance segment. In addition to projects
its broad-based technical competence, allows it to cost-
from defense customers – the Air Force, Navy and Army –
effectively integrate new solutions into existing systems.
the segment also includes maintenance of commercial air-
Customers in the segment consist of the Swedish military,
craft and helicopters and their equipment as well as mainte-
industry and government agencies responsible for technical
nance and calibration of various types of measurement
infrastructure. In the years ahead good demand is expected
equipment. Customers can be found around the world and
to continue throughout the entire area.
include Embraer, Eurocopter and Scandinavian Airlines.
System deliveries
Technical services
In the same way that AerotechTelub’s technical services origi-
To meet demand for maintenance services from the Swedish
nally grew out of the maintenance operations, its ability to
defense and its other customers, AerotechTelub over time
develop and provide customized systems solutions is a prod-
has developed extensive expertise in various technical
uct of the extensive competence it has gained in technical
services: aircraft and helicopters, tele-, data and radio com-
services. Customized systems solutions are AerotechTelub’s
munications, command and control and information, sensors,
third operating segment. Unlike the technical services seg-
testing, simulation, calibration technology and logistics.
ment, where its consulting role is more pronounced, here
The competence AerotechTelub has added has been neces-
the company supplies a finished solution.
sary for it to retain its position as the Swedish defense’s
AerotechTelub offers customized systems solutions in
most important supplier of sophisticated maintenance ser-
the areas of testing and calibration systems, training systems,
vices and has paved the way for new markets and opera-
information systems, air traffic control and telecommunication
tions. Technical services are the largest operating segment
contract services.
and currently account for half of AerotechTelub’s sales of
The operating segment generates approximately SEK 500
approximately SEK 1,100 million.
million and accounts for 25 percent of AerotechTelub’s sales.
AerotechTelub’s range of technical services comprises all
Its customers are in defense, government agencies with
stages of a project – from pilot studies, modeling and simu-
responsibility for technical infrastructure and industry.
lation, procurement support, systems integration, and test-
Defense contractors dominate among the industrial cus-
23
part because of Nyge’s prominent position in special flight
operations.
With a fleet of 15 aircraft and operations in Norway,
Denmark, Austria and Greece, in addition to Sweden, Saab
Nyge Aero is one of Europe’s leaders in target towing. Special
flight operations also comprise advanced testing of electronic
warfare equipment for customers including the Swedish
defense and major defense contractors, including Saab.
In 2000 Saab Nyge Aero received a breakthrough order for
the modification of the amphibian aircraft from Canada’s Bombardier Aerospace. The contract value is SEK 183 million and
adds an important reference customer in the efforts to market
Saab Nyge Aero as an international modification center.
Civil air traffic control is one of the areas where AerotechTelub
supplies customized solutions.
tomers, although civil telecommunication and IT companies
Nordic standard helicopter
represent a growing share.
The Swedish government is currently involved in three
different procurement processes for helicopters for both
Outsourcing, net-centric defense and exports
military and commercial applications.
In a short-term perspective AerotechTelub’s growth oppor-
In addition to its expertise in helicopter technology, the
tunities in the defense market are primarily related to the
Saab Group has extensive competence in helicopter systems
increasing complexity of defense systems. In the longer
integration, avionics, integration of weapon systems,
term the growing interest in military outsourcing with be
modification of flight systems to Nordic conditions
a driving force. A positive, long-term relationship with the
and development of training systems. In order to bring
Swedish defense, together with AerotechTelub’s extensive,
these resources together and concentrate Saab’s efforts
broad-based competencies, is essential to the company’s
vis-à-vis the Swedish customer, helicopter operations are
opportunities to deliver technical services and customized
being coordinated in Technical Support and Services.
systems solutions to Sweden’s future net-centric defense.
Since September 1999 the governments of Sweden,
Turnkey know-how and the ability to integrate new technol-
Norway, Denmark and Finland have been involved in a
ogy and solutions in older systems are important success
procurement process for a Nordic standard helicopter that
factors in this area. Demand for civilian network structures
will be used for, among other things, light transports, troop
is creating similar business opportunities.
transports and sea rescues. The procurement will include
Because it provides maintenance and technical services
100 percent offsets from the seller.
for the most advanced systems in the Swedish defense,
In the short term Saab’s role will be as a subcontractor, inte-
AerotechTelub is able to reach international markets when
grating weapon and avionics systems in the helicopter, han-
these systems are exported. For example, AerotechTelub
dling some production, adapting the helicopters to Swedish
services a large part of Gripen’s aftermarket, and each
conditions and in other ways assisting in the procurement.
new export transaction opens new business opportunities.
Ericsson ERIEYE radar system and SaabTech Electronics’
Highlights in 2000:
radar warner are other systems with major export potential
• Order for modification of amphibian aircraft from
and where AerotechTelub can either provide maintenance
Bombardier Aerospace
• Order for LS 10 command and control system for
or supply services and testing systems so that maintenance
can be handled locally.
Sweden’s tactical air command
• Order for testing system for the Leopard 2 tank from the
Saab Nyge Aero
German company Krauss-Maffei Wegmann
• Completion of consulting services for the Öresund
Saab Nyge Aero is active in the maintenance and modification of military and commercial aircraft and helicopters as
Consortium in connection with the inauguration of the
well as special flight operations services. Agency sales of
Öresund Bridge between Sweden and Denmark
• Order for automatic weather observation systems
aircraft and spare parts is offered as well.
Nyge complements AerotechTelub in part because of its
(AWOS) from Swedish Civil Aviation Administration
• Order for modification of Vertol helicopters from Swedish
maintenance responsibility for various aircraft, including all
Defence Materiel Administration
SK60 aircraft and the Swedish Coast Guard’s aircraft, and in
24
Stefan Storm, head of the project support unit at AerotechTelub and former project
manager for Gripen’s advanced evaluation and training systems.
UTA: evaluation, training and analysis
for a more efficient air force
A modern air force is a huge investment
and in order to benefit as much as possible
from every flight hour it must have powerful evaluation tools. Today’s air force
requires systems that can replay and evaluate each training flight in order to help
pilots learn and build experience within
the force.
Gripen is equipped with one of the
world’s most advanced systems for evaluation and analysis, UTA, which was
designed by AerotechTelub and has been
an integral part of Gripen since 1998.
Stefan Storm was formerly the project
manager for UTA and is now head of the
Mission Support Systems business unit,
which means he is responsible for ensuring
that the systems integrated in UTA work
together. His overall responsibilities also
include the further development of the
system together with the customer.
Stefan Storm has worked at AerotechTelub since his receiving his degree in
computer engineering from Linköping
Institute of Technology in 1988, beginning
as an engineering trainee. Since 1993 he
has served as project manager for UTA.
“UTA is a so-called debriefing system,
which allows the pilot, together with his
instructor, to evaluate a mission immediately after its conclusion,” he explains.
“You can see what went well, what mistakes were made, who would have been
shot down and who would have successfully completed his mission.”
When the Gripen system was developed,
an advanced UTA was a requirement and
a key to meeting the customer’s demands
for high total cost efficiency. The system
was procured in 1991 in competition and
at a fixed price, with delivery in 1998.
Development work began in 1996, running
parallel with the first deliveries of the system.
“There are several reasons why this is
an advanced, cost-effective system,” says
Stefan Storm. “We have succeeded in
developing and integrating advanced
COTS technology (i.e. standardized equipment developed for the commercial mar-
25
ket), which means that we can get very
high performance at a relatively low cost.”
But there is also an important cultural
explanation: The Swedish customer is an
experienced user, which is reflected in its
familiarity with advanced technology, but
even more so in the fact that Swedish Air
Force officers are willing to analyze their
missions. It is acceptable to make mistakes
and discuss them in order to improve.
Pre-flight planning is just as important
as post-flight evaluations. The system that
the Swedish Air Force uses for planning is
called PLA, and it too was developed in
large part by AerotechTelub.
The next generation of systems will
contain both pre-flight planning and postflight evaluations. In Gripen, this system
will be called MSS, Mission Support
System.
AerotechTelub’s aim is to work together
with Saab Aerospace to develop this system, which will help both Swedish and
international Gripen users.
Ingemar Andersson:
“2000 was a year of major changes for the Swedish missile
industry. In addition to implementing the largest structural change in our history, many difficult decisions were
made to create the conditions that will ensure the industry
remains competitive. Saab Bofors Dynamics’ employees
have played a key role in a tough but necessary restructuring.
The coordination of Sweden’s collective resources and
the Swedish government’s decision to participate in international programs such as METEOR have strengthened
us internationally. At the same time we have continued
to develop our own cooperations – for example, with
Germany’s Diehl, in the development, production and
marketing of the RBS15 anti-ship missile.
It will take a few years before Bofors Dynamics reaches
the profitability objectives we use within Saab but in
2000 we took a big step in the right direction. We have
implemented a major restructuring and reversed a loss
into a profit.
Looking forward we have a number of projects with
good development potential. Our biggest challenge is to
reach out more to the export market with our product
portfolio.”
SAAB BOFORS DYNAMICS
Saab Bofors Dynamics is a complete missile systems
supplier and develops advanced systems for precision
engagement. Systems have been developed for the
Swedish Army, Navy and Air Force as well as for the
international market. Bofors Dynamics has the ability
to develop high-quality weapon systems either on its
own or as part of international cooperations. Systems
that support and build a modern net-centric defense.
Share of
Saab’s sales
Operating
areas
Underwater
Operating income
SEK m.
5,000
SEK m.
500
%
4,000
400
10
3,000
300
2,000
200
1,000
100
Air/Sea
Infantry
Net
sales
Air
defense
Land
0
99
pro forma
00
5
0
99
pro forma
26
00
0
A complete missile systems supplier
A coordinated Swedish industry
good profitability in both development and production.
– restructured for the future
In both guided and unguided anti-armor systems, Bofors
Saab Bofors Dynamics is a complete missile systems supplier.
Dynamics has a strong product range in series production,
The business area has a range of competencies to meet the
with good exports and profitability. Among its systems are
needs of the Swedish defense and which provide it with
Carl-Gustaf, AT4, STRIX and BILL 2.
good opportunities in the export market. Saab’s acquisition
The anti-armor weapon Carl-Gustaf has for decades been
of Celsius has brought the entire Swedish missile industry
a leader in its niche, shoulder launched infantry weapons,
together in one company. The coordination of Sweden’s
and is used in over 40 countries. Over 800,000 of the light,
resources in this area was a strong desire of the Swedish
disposable AT4 anti-armor weapon and its successor,
customer and facilitates considerable synergies. At the same
AT4CS, which also can fire from inside buildings, have been
time the integration challenges have been great, as have
sold throughout the world. STRIX, a terminally guided anti-
demands for industrial changes.
armor projectile, is produced and exported to Switzerland,
Bofors Dynamics currently offers weapons systems
among other countries. Other product areas have also had
through five business units: Air/Sea Missile Systems,
export success. For example, the RBS70 air defense missile
Air Defense Missiles, Land Missile Systems, Underwater
has been exported to nearly 20 customers and used by
Systems and Infantry Weapons. Sixty percent of sales are
various branches of the military around the world.
from missile operations (the first three units), while the
remaining 40 percent is divided fairly evenly between
Air-to-air
the underwater and infantry units.
The restructuring and concentration of operations has led
to a reduction from 2,500 to 1,800 employees. In research
Air-tosurface
and development, redundancies have been identified and
savings implemented. New working methods are being
developed whereby development projects will be organized
Cruise
by competence resources rather than geographically.
Development and production
Air
defense
The emphasis in Dynamic’s operations has shifted in recent
years to research and development. This is due to the long
cycles of development and production. A number of projects
Antitank
in different stages are expected to reach production in a
few years. Even more emphasis is expected to be placed
on development, when important projects such as the
Anti-ship
METEOR air-to-air missile go into development. The
business area’s future is dependent on its ability to maintain
Anti-submarine
Saab Bofors Dynamics is a complete missile systems supplier and can offer
a broad range of applications in the air, on land, at sea and underwater.
National missile strategy
In 2000 Sweden drafted a national missile strategy. The decisions to order series production of the BAMSE air defense
missile and proceed with Swedish participation in METEOR
are important elements of this strategy and directly impact
on Saab’s operations.
The order for series production of BAMSE not only means
The Carl-Gustaf anti-armor weapon, the leader in shoulder launched support
weapons, is used in over 40 countries.
that the business area can enter the production stage of a
27
In 2000 Sweden decided to participate in the development of the METEOR
long-range air-to-air missile. Five other countries are also participating in
the project, which is expected to generate good international demand.
key development project, but also that BAMSE will serve as
Saab is currently taking part in a number of projects in the
the foundation of Sweden’s future air defense system. With
development stage. The assignments for each participating
modifications, the system can also be developed for naval
country’s companies are divided up based on the number of
use and is a principal part of the air defense system used
systems/missiles the country is expected to buy. Moreover,
on Sweden’s new Visby class corvettes.
export markets open up outside the participating countries
In the years ahead the goal is to design a similar national
once the product is in production.
strategy for underwater weapon and infantry systems –
Development work has been under way for some time on
areas where Saab has a strong development portfolio and
IRIS-T, an air-to-air missile for short distances that is expect-
broad range of competencies.
ed to reach the market in 2002 and replace the U.S.
Sidewinder. Sweden is one of six participating countries
System exports
in the IRIS-T project, for which Saab is developing, among
Bofors Dynamics has two main opportunities in the inter-
other things, the target seeker. In May 2000 the British gov-
national market – to sell existing systems to new customers
ernment, one of the project’s most important partners, gave
and to participate in international development projects.
its go-ahead to begin development of METEOR, a long-
The export opportunities for a project like BAMSE, for
range air-to-air missile that is designed to replace AMRAAM.
example, are considerable.
The Swedish government’s goal is to retain a 12-percent
The RBS15 anti-ship missile, which, in addition to Sweden,
share of the project.
is used by the Finnish Navy, among others, has good
Potential international demand for both IRIS-T and
prospects of reaching a broader international market. Since
METEOR is substantial. Taking part in and benefitting from
1999 Saab Bofors Dynamics has cooperated with Germany’s
export work in this area is important to the business area’s
BGT to market RBS15 in the German market, where a deci-
future growth and profitability.
sion is expected in 2001. In 2000 the business area broadened
For a number of years Dynamics has also participated
its cooperation with BGT’s owner, Diehl - which is a partner
in the development of the TAURUS KEPD 350 heavyweight
in the IRIS-T project – to also include the further develop-
long-range standoff missile. The customer is the German
ment and production of the RBS15.
defense and Germany’s LFK owns 67 percent of the project,
Torpedo 2000, a heavyweight, high-speed torpedo, is
with the remaining 33 percent held by Dynamics. TAURUS,
being developed for the Swedish military. The system has
which will be used on the Tornado and later the Euro-
also been ordered by Brazil and interest has been expressed
fighter, has been successfully tested on the Gripen system.
by a number of other potential buyers.
Highlights in 2000:
• The business area succeeded in reversing a loss into a
International cooperations
profit and starting a positive trend
Development costs for new missile systems have steadily
• The Swedish government ordered series production of
risen and in the future it is unlikely that individual coun-
RMS23 BAMSE
tries, aside from the U.S., will have the resources to develop
• Decision to participate in the METEOR project
• Successful free flight of TAURUS at a test range in Vidsel,
advanced systems for precision engagement on their own.
Cooperations between countries and companies will be
Sweden
necessary. International projects facilitate specialization,
• Export success for anti-tank systems in France, among
at the same time that participating companies can maintain
other countries
an understanding of the systems’ overall function.
28
Until the merger of Saab and Celsius, Malte Saltin was the project manager for BAMSE.
He now heads the Air Defense Missiles business unit within Dynamics.
BAMSE: From idea to export
After lengthy analysis work, the Swedish
defense decided in 1993 to procure a
maneuverable air defense system to protect
infrastructure and military installations.
Following a evaluation, Bofors Missiles was
awarded the contract to develop the system
now called BAMSE.
Malte Saltin managed the BAMSE project prior to the merger between Saab and
Celsius and is now head of the Air Defense
Missiles business unit, which includes
BAMSE. He has worked for what is now
the Saab Bofors Dynamics business area
since leaving the air force in the 1970’s.
“BAMSE is a unique system in its
maneuverability and precision, and with
its flexibility it can fill in a role in every
military that has to assume the possibility
of defending its borders against an air
attack, specifically against cruise missiles,”
he explains. “What’s more, we have an
excellent platform to develop a naval version of BAMSE.”
A project such as this one takes a long time
– as much as 15-20 years from the first idea
by the customer until the system has
entered service.
In BAMSE’s case, it went from pilot
study in 1991 to development order in
1993 and series production in 2000. In 2001
the system will be adapted to series production and a year later production will
begin. Beginning in 2003 the finished system will be delivered to the customer.
“Last year’s decision was very important,” says Malte Saltin. “It shows that the
BAMSE system will play a key role in
Sweden’s air defense for the foreseeable
future. And it gives us the go-ahead we
need to proceed to the next stage, to go
from development to production.”
Dynamics’ new organization has provided a welcome addition to the BAMSE
project in the form of added expertise.
“Today there are less than a dozen old
Saab employees working in Karlskoga,
29
and a number of them are involved in the
BAMSE project,” he continues. “For those
of us who have been part of the project,
these new people have been a important
addition, particularly in a resource-critical
stage of the project. I feel that we have created an organization that can handle the
integration work in a natural way.”
At the same time that preparations are
under way for the Swedish customer,
BAMSE is being added to Saab Bofors
Dynamics’ international marketing efforts.
Interest in the solution that BAMSE represents is high and the market potential significant.
“The real work is just beginning in 2001,”
says Malte Saltin. “The marketing department is out prospecting BAMSE’s potential
markets and we have already submitted
bids to two interested customers. The
opportunities to sell the existing system, as
well as to develop a naval version together
with others, are very attractive.”
Bengt Mörtberg:
“In 2000 Saab Ericsson Space achieved important
breakthroughs and made significant investments.
The acquisition of 65 percent of Fokker Space of the
Netherlands makes us Europe’s leading independent
space equipment supplier. We are strengthening our
position in and outside Europe and becoming the
world leader in our industry.
In stiff competition, Space was awarded important
orders from the two European satellite suppliers that
remain after the restructuring of recent years. In the
U.S. market, we further strengthened our presence by
opening an office in Los Angeles. We are now represented in both Washington, DC and on the west coast, a
center for the space industry.
Because of increased activity in the U.S. market and
the major development investments being made, Space
did not reach Saab’s overall margin requirements in
2000. With the acquisition of Fokker Space, we nearly
doubled in terms of both sales and personnel and substantially strengthened our position in the international
market. This, in combination with the fact that the investments we made during the year are bearing fruit,
will help us to achieve our financial objectives.”
SAAB ERICSSON SPACE
Saab Ericsson Space is Europe’s leading independent space
equipment supplier and is 60-percent owned by Saab and
40-percent by Ericsson.The business area is the leader in
the development and production of computer systems,
antennas and microwave electronics as well as control and
separation systems for satellites and other spacecraft.
Slightly over 90 percent of sales are exports, and Space’s
products are supplied to both public and private sector
customers, primarily in Europe and North America.
Share of
Saab’s sales
30
Net
sales
Operating income
SEK m.
1,250
SEK m.
125
%
1,000
100
10
750
75
500
50
250
25
0
5
0
98 99 00
0
98 99 00
SAAB ERICSSON SPACE
Europe’s leading independent
space equipment supplier
An industry in transformation
Like the defense industry, the space industry is undergoing
an international restructuring. Various constellations are
being created, with only a limited number of groups having
the ability to develop turnkey solutions for various types
of customers.
The restructuring has both financial and institutional reasons. One is the rising cost of development and the other is a
strong desire from customers for a more structured industry.
In 2000 microwave electronics were supplied to Intelsat-X.
Both the European and much larger American markets
have developed a structure with two to three leading companies, a slightly larger group of more specialized compa-
Through the contacts it has established with other Saab
nies and a relatively extensive group of niche providers.
and Ericsson operations, Space can benefit from their
Following the conditional acquisition of Fokker Space,
development work while also raising the efficiency of its
Saab Ericsson Space is the leader among a half-dozen
own production. Among the concrete cooperations is one
European companies with a broad base of competencies –
with Ericsson Microwave Systems in the development of
but with a clear focus on well-defined systems.
microwave technology and the efficient use of production
Fokker Space specializes in the manufacture of solar pan-
resources.
els and robotic instruments, including the European Robotic
Arm for the International Space Station (ISS). For Europe’s
Data communication and research
Ariane launcher program, it is developing specialized struc-
There have been a number of major investments in satellite-
tures. Fokker Space’s systems broaden the product range
based telecommunication and data communication in recent
and complement competencies in key areas.
years to receive considerable attention. Their limited suc-
Through the acquisition, the business area further
cess, however, has resulted in a reluctance to invest in new
improves its opportunities to serve as an independent sup-
projects. Still, there is a broad consensus that space is an
plier to major international space companies. Its indepen-
important future channel for broadband communication.
dence will help Space to broaden its market by developing
Although the transmission capacity of individual satellites
relationships with large companies on both sides of the
will steadily improve in the years ahead, rising demand for
Atlantic and facilitate additional acquisitions.
telecommunication and data traffic will be strong enough to
In 2000 Space, in competition with its customers’ own
create a stable need for new satellites.
operations, was awarded important breakthrough orders
In the publicly financed research segment, development
by Astrium and Alcatel, the two major satellite suppliers
and growth are reliant on political priorities. Space’s most
resulting from Europe’s restructuring.
important end customer is the European Space Agency
In the case of Astrium, the order was for microwave elec-
(ESA), whose current programs include Galileo, a European
tronics (receivers) for the Intelsat-X, while the Alcatel order
alternative to the U.S. GPA system; the METOP meteorologi-
was for central data management units for Eutelsat satellites.
cal system; the Rosetta scientific program, and the further
In the process, Space has shown itself to be a competitive
development of the Ariane launch vehicle.
supplier in the new industry structure now being created.
Net-centric defense in space
Ties to defense and telecommunication industries
In the military, satellite surveillance is often a powerful tool
Through its owners, Saab and Ericsson, Space has ties to the
for battlespace awareness and such systems are already an
defense and telecommunication industries that are unique to
integral part of the information defense of the major mili-
the industry. Its owners also provide access to a broad base
tary powers. Developments in information defense and the
of competencies that stretches beyond the company’s 1,000
expected importance of net-centric defense in future defense
employees, slightly over half of whom are master engineers
systems are creating new opportunities for Space interna-
or PhD’s.
tionally.
31
SAAB ERICSSON SPACE
International investments
In 2000 exports again accounted for more than 90 percent of
the business area’s sales. While commercial order bookings
rose, sales remained unchanged at 45 percent. ESA accounted for 36 percent of sales and 39 percent of order bookings.
Projects are allocated based in large part on each membernation’s contribution to the ESA’s budget. In Sweden’s case,
this is approximately SEK 500 million. Space’s average contract from ESA accounts for about two thirds of this.
Since 1995 the business area has owned an Austrian subsidiary and through the Fokker acquisition is represented in
the Netherlands. Austria and the Netherlands are also suppliers to ESA based on each country’s budget contributions.
To reach the U.S. market, Space has maintained an office
in Washington, DC for several years, and in the fall 2000 it
widened its presence to include Los Angeles. Raising U.S.
Solar panels for satellites are one of Fokker Space’s main product areas.
sales is one of the most important growth opportunities
for Space.
From a European and national perspective, the business
area will have the opportunity to provide Saab and Saab’s
Highlights in 2000:
customers with a space dimension to their net-centric
• Conditional acquisition of 65 percent of Fokker Space
of the Netherlands
defense systems. The Swedish military, for one, has
• Opening of Los Angeles office
• Order for microwave electronics for Intelsat-X
• Contract for Spaceway satellite
• Order for 40 additional onboard computers for Ariane 5
• Ten-year contract with Lockheed Martin for new genera-
expressed interest in making satellite technology a part
of its future defense.
Growth through higher market shares
and systems development
tion of satellite separation systems for Atlas rockets
Improving its market shares is an important way for Space
to grow in certain areas, and systematic efforts are being
made to reach new customers with existing products. In
2000, for example, Astrium ordered microwave electronics
for Intelsat-X, which raised Space’s share of this market.
Work is being done in several product areas to integrate
related technology and systems with the systems that are
already being developed and marketed. The aim is to offer
larger, more complex solutions, increasing value for the
customer and giving Space the opportunity for profitability
and growth.
Sales by customer segment
SEK m.
750
Gov’t agencies
500
ESA
250
Commercial
0
96
97
98
99
The Galileo positioning system, a project of the European Space Agency (ESA).
00
32
SAAB ERICSSON SPACE
With its new office in Los Angeles, Saab Ericsson Space was established itself in the
heart of the U.S. space industry. Håkan Andersson, Michael E. Miller and Marino Poppé
all have extensive experience in the aerospace industry.
Space supplies antenna
components and microwave
equipment for the ICO
satellite developed by
Boeing Satellite Systems.
The heart of the commercial space industry
By opening an office in Los Angeles in
2000, Saab Ericsson Space took another
important step in its efforts in the U.S.
market. As Europe’s leading independent
space company, Space is already a major
supplier in certain niches, and by establishing a stronger presence in the U.S. market
it hopes to broaden and extend its customer base.
Håkan Andersson moved to Los Angeles
in November and is one of the three people working at Space’s Los Angeles office.
“The U.S. is the world’s largest market
for the products we are developing,” he
says. “By being here in California, where
important parts of the American space
industry are based, we have gained a
better position.”
The Washington, DC office was opened
back in 1993, to which Space has now
added an office on Sepulveda Boulevard
in El Segundo, Los Angeles, a stone’s
throw from Boeing Satellite Systems, TRW
Space Systems and the U.S. Air Force’s
space department.
“A large part of the commercial market
for our products is here on the west coast,
and now we are closer to important current
and potential customers,” says Håkan
Andersson. “Our Washington office often
fills the role of administrative coordinator
for our activities in North America,
although it also works with institutional
customers such as NASA and the defense
department. Even though we are a relatively small organization, we are still able to
cover the American space establishment.”
The Los Angeles organization is based
on Space’s operating areas: digital systems,
mechanical systems (separation systems)
and microwave technology. In addition to
Håkan Andersson, there is Marino Poppé
(from the Gothenburg operations via
Space’s Austrian subsidiary) and Michael
E. Miller, who has over twenty years of
experience in the U.S. space industry.
Håkan Andersson has been employed
as a development engineer at Space since
1994 and in recent years has been responsible for hardware development in the computer systems area. His background in
development work and ties to Sweden
and Europe are important.
“There are good growth opportunities
33
here in the U.S., particularly in data handling, where we are already engaged in
far-reaching conversations with a number
of potentially interested customers,” he
says. “An important factor in this work
is our strong reputation. We have an
unblemished track record here in the U.S.
and know the industry.”
Space’s separation systems have a very
strong position in the U.S. market, where
they have been used for over twenty years.
In microwave electronics and antennas, the
company has recently begun to supply
Boeing and Lockheed Martin.
Since the mid-1970’s the commercial end
of the U.S. space market has grown considerably, providing opportunities for foreign
companies with high-quality products.
“There is still a significant difference
between the commercial and institutional
worlds,” says Michael E. Miller. “We have
noticed, that Space’s strong position also
helps us with institutional customers here
in the U.S. The success and presence we
have in the commercial market has
heightened interest from NASA and
other public institutions.”
SAAB AVIATION SERVICES and OTHER OPERATIONS
As of 2001 Saab Aircraft, Saab Aircraft Leasing and the
remaining parts of Celsius Aviation Services are included
organizationally in a new business area, Saab Aviation
Services, as described below.
Saab Aircraft Leasing and Saab Aircraft
ees, 310 of whom are in Linköping and 70 at the subsidiary
A significant share of the over 500 Saab 340 and Saab 2000
Saab Aircraft of America in Washington, DC.
regional aircraft that were manufactured by Saab until 1999
Two thirds of sales consist of spares, while the rest is
are managed by Saab Aircraft Leasing. The portfolio consists
service and maintenance. Saab Aircraft cooperates very
of 273 Saab 340 and 29 Saab 2000.
closely with Saab Aircraft Leasing to support Saab’s lease
The total value of the portfolio on and off the balance
customers.
sheet, excluding the 57 aircraft that are financed with non-
As of 2001 Saab Aircraft and Saab Aircraft Leasing form
recourse funding, amounted to SEK 7.5 billon at year-end.
the core of a new business area, Saab Aviation Services.
The provision to adjust the portfolio to market value
Since the market risk in the portfolio has been eliminated,
amounted to SEK 1 billion at year-end.
operations can be concentrated on enhancing the portfolio’s
The portfolio gives Saab a direct financial interest in
value. Through their close ties, Saab Aircraft and Saab
ensuring that the value of the regional aircraft is maintained
Aircraft Leasing can offer customers better service and
and that they remain in demand by the market. Demand for
improve the efficiency of their management operations.
Saab 340 and Saab 2000 is dependent in part on overall
demand for aircraft in their respective classes and in part
Celsius Aviation Services: Restructuring and divestment
on the company’s ability to arrange attractive alternatives
Through its acquisition of Celsius, Saab took ownership of
for airlines.
a sizable commercial aircraft maintenance business, Celsius
In 2000 Saab eliminated the market risk in the regional
Aviation Services (CAS). CAS, which is headquartered in
aircraft portfolio through an insurance wrap. At a cost of
USD 37 million, Saab has hedged its lease revenue for the
next 15-year period and thereby eliminated its market risk.
Through continued effective management, Saab can maximize lease revenue and minimize its insurance premium.
During the year leases on 18 (52) Saab 340 and 0 (0) Saab
2000 were signed with new and existing customers. 7 (4)
aircraft were sold and at year-end 12 (6) were not contracted
to any operator. Due to contract violations, 6 (7) aircraft
were repossessed.
Regional air traffic is expected to increase in the years
ahead and both aircraft are strong in their respective classes.
Saab 340, for example, has a 30-percent market share.
To retain the value of the portfolio and meet the demands
made of Saab as the manufacturer of Saab 340 and Saab
2000, close cooperation is maintained with the customer
support organization, Saab Aircraft.
Saab Aircraft is the holder of the type certificates for Saab
340 and Saab 2000 and is responsible for the continued airworthiness of the aircraft. In addition to normal service and
maintenance support, Saab Aircraft provides spares, train-
Saab’s fleet of regional aircraft operates around the world. In 2000 the market
risk in the lease portfolio was eliminated through an insurance policy.
Through successful customer service, Saab can therefore focus on enhancing
the value of the fleet.
ing, manuals and development work on new options and
modifications. The staff includes slightly over 400 employ-
34
Washington, DC, is active in 30-odd locations around the
world, with an emphasis on North America. The U.S.
accounts for two thirds of sales, and Europe, Australia
and Southeast Asia the rest. Customers consist of air carriers
from around the world.
CAS offers a broad range of aviation services, from aircraft
maintenance, spares and jet engines to the sale of components
and development of wind tunnels and other testing systems.
The business area is also engaged in asset management.
CAS has around 1,500 employees and sales of SEK
3 billion in 2000. New contracts awarded during the year
included engine maintenance for U.S. military transport
aircraft.
Operations within CAS are divided by company.
Saab Aircraft’s customer service organization is responsible for maintaining
a large part of the fleet of regional aircraft Saab manufactured.
AeroThrust Corp. of Miami, Florida overhauls the JT80
engine.
Celsius Aerotech Inc. in Nashville, Tennessee specializes
in component and airframe maintenance as well as aircraft
Other operations: Focused divestments
painting, particularly for regional aircraft.
In order to concentrate its resources, Saab is trying to find
Hawker Pacific Pty Ltd. in Sydney provides aircraft main-
new ownership solutions for operations that fall outside its
tenance in Australia and New Zealand. It also handles air-
core areas. In the process, it is creating value for its share-
craft sales.
holders. A special team reporting directly to the executive
Aero Systems Engineering Inc. of St. Paul, Minnesota
management is responsible for Saab’s divestment program.
develops, designs and builds testing systems for various
The process is proceeding rapidly. In June the weapon
types of jet engines. Operations also comprise wind tunnel
system and ammunition manufacturer Bofors Weapon
technology and aerodynamic laboratory services.
System was sold to United Defense, one of the largest
Miami, Florida-based Celsius Amtec Corp., which is
independent U.S. defense contractors. Through the sale,
primarily active in asset management, was divested in
Saab was able to participate in a transatlantic alliance in
February 2000.
an important niche and at the same time add value for its
Aviocomp AB in Linköping mainly provides component
shareholders.
maintenance for regional aircraft, although it also overhauls
In addition, a number of small businesses were divested,
entire aircraft.
including several shipyards, an oil rig, Kockum Industries’
As of 2001 Aviocomp is part of the Saab Technical Services
wind power pylon operations, the surface treatment opera-
and Support business area.
tions of Celsius Materialteknik and a number of properties.
After acquiring Celsius, Saab announced its intention to
Saab still has a portfolio of non-core businesses and
find another owner for CAS. The reason is that the commer-
efforts to concentrate these operations will continue. Among
cial aviation maintenance industry is undergoing a transfor-
them are the remaining parts of Kockums Industries, the
mation that is tightening demands on companies that hope
gunpowder and explosives manufacturer Nexplo and
to develop a strong position and, as a result, on the ability
ammunitions maker Nammo.
of their owners to provide financial and other resources.
For Saab, the majority of CAS’ operations fall outside
the growth areas it is focusing on. The divestment process
began in 2000, and efforts to find new owners for the remaining parts of CAS are continuing.
As of 2001 the remaining parts of CAS are included in the
Saab Aviation Services business area.
35
The Saab share
Saab B, Jan. 2, 1999–Feb. 19, 2001
Share capital
On December 31, 2000 Saab’s share capital amounted to SEK
180
1,703,354,800 and consisted of 100,005,372 listed Series B
160
shares and 6,454,303 unlisted Series A shares. Series A shares
140
have ten votes each, while Series B shares have one vote
120
B-share, high/low
B-share, last paid
General index
000s of shares traded,
(incl. aftermarket)
each. In other respects, there are no differences between the
100
two classes. The par value per share is SEK 16.
The Series B share has been listed on the OM Stockholm
6,250
80
5,000
Exchange’s O list since 1998 and a trading lot consists of 100
3,750
shares. Approximately 47,500,000 Series B shares, correspon-
2,500
60
1,250
ding to 45 percent of the share capital and 29 percent of the
50
votes, are available via the stock market. Of the company’s
J
F
M
A
M
J
J
A
S
O
N
99
Series A shares, 4,207,123 are owned by Investor and
D
J
F
M
A
M
J
J
A
S
O
N
00
D
J
F
01
(c)SIX
Dividend and dividend policy
2,247,180 by BAE SYSTEMS. No changes have been made in
The Board of Directors is recommending that the Annual
the share capital since the market listing in 1998.
General Meeting approve an increase in the dividend to SEK
Share performance and trading volume
3.00 (2.50) per share, corresponding to 31 percent (28) of net
Saab’s market capitalization amounted to SEK 8.3 billion at
income.
Saab’s long-term dividend policy is to distribute 20–40 per-
year-end 2000. The price of the Series B share fell by 4.9 percent during the year, compared with a 12-percent decline for
cent of income after tax.
the Stockholm exchange’s general index. The share price at
Convertible debenture loan
year-end was SEK 78. The high price for the year, SEK 94.50,
In 1998 a convertible debenture loan was issued to Saab’s
was noted on March 20 and the low price, SEK 64.50, on
employees. The loan totals SEK 254 million, which, after full
February 15.
conversion, raises the number of Series B shares by 2,787,500,
During 2000 a total of 20,653,554 Series B shares were
corresponding to a dilution of 2.55 percent of the share capital
traded, corresponding to 43 percent of the shares available.
and 1.67 percent of the total number of votes. Conversions to
Average daily turnover was 81,959 shares.
Series B shares are permitted between December 4, 2001 and
Beta shows how much a share fluctuates in relation to the
July 15, 2004 at a conversion price of SEK 91.
market as a whole. According to the OM Stockholm
Saab on the Internet
Exchange’s calculations, the beta for Saab’s Series B share
Saab’s home page on the Internet provides information on
was 0.57 at year-end, indicating that it fluctuated 43 percent
the company and the share and a means to contact the
less than the market average. Saab’s stock covariance was
Investor Relations department. The address is www.saab.se
0.14, which means that 14 percent of the share’s price per-
Shares and votes, December 31, 2000
Number
Percentage
Share class
of shares
of shares
formance is due to the market’s development as a whole.
Ownership structure
Number of
votes
Percentage of
total votes
The total number of Saab shareholders decreased to around
Series A
Series B
6,454,303
100,005,372
6.1
93.9
64,543,030
100,005,372
39.2
60.8
41,000 at year-end. Swedish and international institutional
Total
106,459,675
100.0
164,548,402
100.0
Distribution of shareholdings
Number of
Number of Percentage of
shares
shareholders shareholders
Number of
shares
Percentage of
share capital
(16) percent in the U.S. and 2 (1) percent in the rest of the
1 – 500
38,159
501 – 1,000
1,538
1,001 – 5,000
996
5,001 – 10,000
129
10,001 – 50,000
105
50,001 – 100,000
23
100,001 – 10,000,000
35
10,000,001 –
2
93.1
3.8
2.4
0.3
0.3
–
0.1
–
2,856,071
1,292,497
2,189,042
996,966
2,330,376
1,522,193
36,293,309
58,979,221
2.7
1.2
2.1
0.9
2.2
1.4
34.1
55.4
world.
Total
100.0
106,459,675
100.0
investors owned approximately 92 percent of the share capital and 95 percent of the votes. Individual Swedish investors
held approximately 8 percent of the share capital and 5 percent of the votes.
At year-end shareholders outside Sweden owned approximately 54 (54) percent of the share capital and 47 (47) percent
of the votes. The share capital was divided among countries
other than Sweden as follows: 36 (37) percent in the UK, 16
36
40,987
Series B share data
Largest shareholders
2000
1999
1998
78.00
94.50
64.50
82.00
91.50
58.00
85.00
90.50
57.00
Yield, %
Price/equity, %
3.8
146
3.0
185
2.4
215
P/E ratio
P/EBIT, multiple
8.0
5.4
9.3
7.9
9.9
10.0
167.60
85.00
77.50
163.30
82.90
75.50
9.75
8.82
8.55
9.50
8.60
8.35
53.26
44.23
37.90
54.22
45.43
39.25
Closing prices
at year-end, SEK
high for the year, SEK
low for the year, SEK
Net sales,
before conversion, SEK
Net sales,
after full conversion, SEK
Net income,
Net income,
Equity,
Equity,
As of December 31, 2000
according to Securities
Register Center
BAE SYSTEMS, UK
Investor
Wallenberg foundations
Chase Manhattan Bank, USA1)
Fidelity funds, USA
State Street Bank & Trust Co., USA1)
Nat’l Pension Insurance Funds
AMF
MFS funds, USA
Skandia
UBS Warburg Stockholm
Meridian funds, USA
FPG/AMFK
Catella funds
SHB funds
Franklin-Templeton funds, USA
37,367
21,612
9,255
7,291
3,540
3,215
2,810
2,200
2,007
1,087
697
609
462
453
391
357
35.1
20.3
8.7
6.8
3.3
3.0
2.6
2.1
1.9
1.0
0.7
0.6
0.4
0.4
0.4
0.3
35.0
36.1
5.6
4.4
2.2
2.0
1.7
1.3
1.2
0.7
0.4
0.4
0.3
0.3
0.2
0.2
93,353
10,283
2,824
87.6
9.7
2.7
92.0
6.3
1.7
Total
106,460
100.0
100.0
Maximum dilution, convertibles
2,787,500
2.6
1.7
Subtotal,
16 largest shareholders
Other Swedish shareholders
Other international shareholders
1)
Cash flow from operating activities,
Cash flow from operating activities,
Dividend (Board’s 2000 proposal), SEK
Dividend /net income, %
Total dividend, SEK m.
No. of shareholders
13.20
-5.50
15.05
12.85
-5.40
14.70
3.00
31
2.50
28
2.00
23
319
40,987
266
45,296
213
51,945
Number Percentage Percentage
of shares,
of share
of
thousands
capital
votes
Nominee-registered, primarily U.S. funds
Swedish and foreign shareholders
% of capital
Foreign shareholders
Swedish shareholders
Investor
BAE SYSTEMS
Wallenberg foundations
Nat’l Pension Funds
AMF
Skandia
Others
Chase Manhattan
Fidelity funds
State Street Bank & Trust Co.
MFS funds
Others
Analysts who follow Saab
Alfred Berg, Stockholm
Patric Lindqvist
patric.lindqvist@alfredberg.se
Credit Suisse First Boston, London
Harald Hendrikse
harald.hendrikse@csfb.com
Goldman Sachs International, London
Sash Tusa
sash.tusa@gs.com
Nordiska Fondkommission, Stockholm
Henrik Alveskog
henrik.alveskog@nordiska.se
Aragon Fondkommission, Stockholm
Claes Vikbladh
cvikbladh@aragon.se
Credit Suisse First Boston, New York
Pierre A. Chao
pierre.chao@csfb.com
HSBC, Stockholm
Claes Rasmuson
claes.rasmuson@hsbcib.com
Schroder Salomon Smith Barney
Nick Cunningham
nick.cunningham@ssmb.com
BNP Paribas, Paris
Olivier Brochet
olivier.brochet@bnpparibas.com
Delphine Riou
delphine.riou@bnpparibas.com
Deutsche Bank, Paris
Virginie Banet
virginie.banet@db.com
Franck Bouvier
franck.bouvier@db.com
Lehman Brothers, London
Colin Crook
ccrook@lehman.com
David Perry
daperry@lehman.com
Société Générale, Paris
Philippe Mouthon
philippe.mouthon@ota.fr.socgen.com
Carnegie, Stockholm
Gustaf von Essen
gusvon@carnegie.se
Enskilda Securities, Stockholm
Stefan Cederberg
stefan.cederberg@enskilda.se
Merrill Lynch, London
Andrew Clifton
andrew_clifton@ml.com
Crédit Agricole Indosuez Cheuvreux, Paris
Rémi Thomas
rthomas@indocdv.com
Pierre-Antony Vastra
pvastra@indocdv.com
Exane, Paris
Bertrand Larcena
bertrand.larcena@exane.com
Irène Bischoff
irène.bischoff@exane.com
Morgan Stanley, London
Tim Bennett
tim.bennett@msdw.com
Alex Hunter
alex.hunter@msdw.com
37
Swedbank, Stockholm
Mats Liss
mats.liss@foreningssparbanken.se
UBS Warburg, London
Paul Ruddle
paul.ruddle@ubsw.com
UBS Warburg, Stockholm
Anders Fagerlund
anders.fagerlund@ubsw.com
Employees
HUMAN RESOURCE POLICY
In a knowledge company like Saab, the collective
competencies of the employees are the main competitive
advantage.
Saab’s operations require world-leading competencies in a number
situations, to develop their own HR policy. Practical aspects of
of areas. Without the ability to recruit, develop and retain quali-
HR work are handled by the individual business units and
fied employees, Saab would immediately lose its competitive edge
companies, where the conditions they face are the determin-
and development potential.
ing factor for employee development.
The acquisition of Celsius has greatly impacted human
and communicate its overriding values, the company works
resource work at Saab. Two previously competing businesses
actively with internal communication. During the year a new
are being integrated within a single organization, with all that
Group-wide employee newsletter was introduced, and work
involves in terms of financial, social and cultural challenges.
to create a Group intranet began.
To keep employees informed of what is happening at Saab
The integration work has surpassed expectations and expe-
To further improve information during the integration
rience from both of the old organizations, has served as the
stage, Saab is regularly distributing a video news program,
basis for HR work in the new organization. A new HR policy
“Channel Saab,” with information on the organization.
has been drafted utilizing the collective experience of the
Group’s employees to underscore the values that Saab follows
Human resource development – growing with Saab
in its work on workplace culture, leadership, competence
A strong recruiting program is necessary, but not enough to
development, wages, equality and working environment.
meet long-term competency requirements. For Saab, it is just
A large part of the responsibility for HR issues at Saab is
delegated locally. The opportunities employees have for personal development are managed best at the local workplace or
by the individual company, where the needs are truly understood.
At the Group level, the role is to develop a common set of
values that will help shape the working climate within Saab.
Responsibility at the Group level also includes management
planning and development, overseas employees, negotiating
policies and relations with students, schools of higher learning
Saab’s development programs provide the
opportunity for individual development for
hundreds of employees in managerial positions.
and union organizations.
Within the framework of the Group’s values and policies,
the business areas have considerable freedom, based on their
Age distribution
Categories
Education level1)
Years of employment
at Saab
Employees turnover1)
No.
2,500
%
100
%
100
No.
7,500
%
12.5
75
75
2,000
10
5,000
1,500
50
50
25
25
Professor, PhD
Civil engineering
Other academic
College level engineering
Other engineering
Upper secondary school
Other
1,000
500
0
9
59
>5
54
55
-
49
Women
Men
50
-
44
45
-
39
40
-
34
35
-
30
-
4
<2
25
-
29
0
0
99
00
Blue collar
White collar
992)
00
1) Sweden
2) Excl. Celsius
7.5
5
2,500
2.5
0
0
<5 5-10 10-25 >25
Blue collar
white collar
992)
00
1) Sweden
2) Excl. Celsius
Employee turnover is defined as the
number of employees who in 2000
terminated their employment or were
transferred within the Saab Group as
a percentage of the total number of
employees during the year.
38
“In the future, information systems will
help the military make decisions faster
and with greater precision. This poses
many interesting challenges. You have to
account for the way the military operates, our abilities as humans and the
opportunities presented by technology.
For me, being able to work toward my
doctoral degree in an exciting field is a
great opportunity for personal development. At the same time I hope it will
give Saab access to competence and contacts in the academic world.”
as important to develop and retain the employees who are
already part of the company. In general, employees stay
with Saab for a relatively long time and employee turnover
is comparatively low.
Every employee should find development opportunities
within the Group. Skills development for both blue and
white collar employees is a high priority. Saab’s internal job
market is popular and gives employees the opportunity to
find careers within the company.
Day-to-day work is the most important way to develop
skills. An individual’s abilities and opportunities for development are a natural element in a learning organization and
Klas Wallenius, doctoral student in the Department of Numerical Analysis and
Computer Science at the Royal Institute of Technology and a participant in Saab’s
industrial doctorate program.
an important challenge for Saab.
Saab is a training-intensive company, where investments
in research and development are essential. Among other
things, the company has a program for around 30 post-grad-
Each year a Group-wide management development pro-
uate students from various academic disciplines that pro-
gram containing various activities provides hundreds of
vides them a network and helps in the transfer of competen-
employees in managerial positions the opportunity for
cies between various parts of the organization.
personal development. The program includes activities
for young employees with the potential for promotion as
well as senior managers with years of experience. Activities
are also offered at business area level.
The internationalization of Saab’s operations is impacting
HR, and a growing number of both blue and white collar
employees participate in crossborder cooperations and projects with employees from other countries and companies.
An important example is the Technology Transfer Program,
which is designed to transfer knowledge and competence to
countries that purchase Gripen. During the fall of 2000 a
group of South African aircraft technicians began a two-year
training program at an upper secondary school in
Linköping to study technical maintenance for Gripen.
The cooperation with the “industrial high school” in Linköping is important
in ensuring Saab access to skilled production personnel.
Saab’s “industrial high school” in Linköping offers production personnel the opportunity for continuing training
in technical areas as well as languages and supplementary
academic studies.
Promoting equality
Saab’s aim of achieving a better balance between male and
female employees has led to a targeted recruitment effort to
“Ruter Dam has given me the opportunity to develop both professionally and as a person. The program offers lectures and a series of seminars and we have visited around a dozen interesting companies.
Executives from Sweden’s largest companies serve as mentors, and the
program is distinguished by a high level of quality and professionalism. It provides a wide network of contacts within Swedish business.”
Monica Brandett, finance manager at SaabTech Systems and a participant
in the Ruter Dam program.
39
attract women to the company. A slightly upward trend in the
number of women is evident, although further efforts are
needed to reach the objective of having a similar ratio of
women to men as in the institutes of technology where Saab
mainly recruits. Saab’s commitment to the Ruter Dam management development program for women, where Bengt Halse
serves as a mentor, is an important part of this work.
Recruitment: A popular employer
A strong recruitment position is essential to Saab if it is to
Job fairs at Sweden’s institutes of technology provide an opportunity
for personal contact between Saab and prospective employees.
Each year the company visits around 15 technology institutes.
develop into a world-leading competence center in areas
that are critical to its competitivness.
Saab is considered a highly attractive employer among
groups that are important to the company’s competencies.
In annual surveys of future engineers and other university
The academic community: A base for recruitment
students, Saab consistently ranks at the top. In the 2000 sur-
and research cooperations
vey, three companies in the Saab Group were among the ten
Saab has long maintained a close relationship with the aca-
most popular employers.
demic community. Recruitment work is done in close cooperation with Sweden’s institutes of technology and universities. In research and development, many projects are carried
out with academic institutions, primarily technology institutes around the country.
For recruitment purposes, Saab participates in job fairs
and offers internships and assistance with postgraduate
work from qualified mentors. Representatives from Saab are
taking part in a development group for civil engineering
education run in cooperation with the Chalmers Institute
of Technology, Royal Institute of Technology, Linköping
Institute of Technology and Massachusetts Institute of
Technology.
Saab’s Technology Day (formerly Aerospace Day) is a
popular event that annually attracts around a thousand stu-
Saab’s online career site, Jobspace, allows visitors
to check available jobs and internships and receive
assistance with dissertation work.
dents from institutes of technology in southern and central
Sweden to visit Saab. The Technology Day provides students
the opportunity to learn more about Saab and establish
In recent years the Internet has started to play an increas-
contacts. For Saab, it is an important channel to come into
ingly important role in Saab’s recruitment work. The
contact with its most important recruitment base.
Jobspace on the company’s home page is an effective
The finals of Teknik-SM, a national competition for engi-
channel to reach key target groups. Each month over 5,000
neering students sponsored by Saab, are held in conjunc-
people visit Jobspace to find available job openings, help
tion with the Technology Day. The winning team receives
with dissertations and so on.
a trip to the U.S., including a visit to the MIT Medialab
To meet the need for qualified professionals, Saab cooperates
in Boston, MA.
closely with schools in the cities where it has production
The Saab Advanced Trainee Program is another important
facilities. For example, it works with a school in Linköping
tool to recruit qualified employees. Each year a group of
to offer practical training in aviation and industrial
recent engineering graduates is given the opportunity to
technology as part of the company’s industrial education
spend a year as trainees in various parts of Saab. The pro-
program.
gram is one of several avenues to a successful career in the
Saab Group.
40
Environmental report
Saab is actively working to reduce the environmental
impact of its operations and products. The guidelines for its
environmental work are established in the environmental
policy that was revised in 2000.
ENVIRONMENTAL POLICY
Saab will comply with applicable environmental regulations
and through continuous improvements in its operations
minimize the environmental impact of its plants, production
and products as far as is technically possible and financially
reasonable. Environmental work will be actively pursued.
Chemicals are properly
monitored through use of
a computer-based system.
The business areas and subsidiaries that have operations
or products that can impact the environment will maintain
an environmental management system that complies with
ISO 14001.
• Use of raw materials and energy
• Soil contaminants
Employees will be kept informed and provided with the
necessary training in environmental issues. Saab will show
an openness and cooperate with customers, authorities and
other parties with an interest in environmental issues.
In order to meet safety and technical performance requirements, companies in the aerospace and defense industries
The introduction of environmental management systems has
have to use chemical substances that are classified as haz-
progressed to different degrees within Saab’s business areas
ardous to humans and the environment. Some of Saab’s
and subsidiaries. Environmental work is being integrated as
business areas have for a long time utilized a detailed
far as possible with other operations. Environmental man-
process to monitor and follow up their hazardous chemicals.
agement systems are therefore often incorporated into estab-
The same procedure is now being gradually introduced in
lished quality assurance systems. It is the responsibility of
all companies in the Group that make extensive use of
the managers of each business area and subsidiary to ensure
chemicals.
that the environmental policy is introduced.
Saab’s business areas have initiated several projects to
During the year an environmental council was established
replace hazardous substances in their cleaning and surface
to handle Group-wide environmental issues. The members
treatment processes and various paint systems. Projects are
of the council consist of environment managers from the
under way to optimize processes that reduce emissions. The
various business areas. Among its responsibilities, the coun-
substances with the highest priority are trichloroethylene,
cil will develop and follow up the Group’s environmental
VOCs, chromates and cadmium. Saab is also actively partic-
policy and see to it that environmental information is made
ipating in “GreenPack”, a project designed to environmen-
available. The council is also an important forum for cooper-
tally adapt electronics, and in another project that promotes
ation on environmental issues between business areas.
the recycling of composite materials. Several of these R&D
Saab participates in the so-called Environmental Index, a
projects are conducted internationally in cooperation with
survey compiled by the business daily Finanstidningen and
other organizations and within the framework of the EU’s
the insurance company Folksam. The report for 1999
research programs. Total expenditures on these projects
showed that the environmental impact from Saab’s opera-
exceed SEK 80 million, of which Saab’s share is approxi-
tions per krona of sales was lower than the average for com-
mately SEK 6 million. The company considers it a good
panies in the survey. The information Saab provided main-
investment for the future to actively participate in develop-
tained a “very high quality.” Saab is assisting to develop the
ment work to find long-term, sustainable materials, compo-
survey and has the goal of further improving its own results.
nents and processes. Representatives from Saab also participate in various reference groups for environmentally related
Important environmental issues
R&D projects.
• Hazardous substances in operations and products
Environmental data 1999 and 2000
• Emissions in the air and water due to organic solvents
Saab’s most significant environmental impact is from its
(VOCs) and metals, among other things
plants in Linköping and Karlskoga, where a number of
• Waste handling and treatment
41
workshops manufacture aircraft and components, missile
adapt their product development, implement environmental
systems, defense electronics and explosives and maintain
training, conserve raw materials and energy, replace
aircraft and equipment. Saab also has an airfield in
hazardous substances and ensure safe chemical handling.
Linköping to test and deliver aircraft. The airfield handles
Saab Systems and Electronics has introduced a new sys-
regular traffic as well. Saab is well prepared to handle any
tem for sorting wastes at its plant in Järfälla and significantly
emergency caused by fire or chemical spills. During the
raised the level of recycling. Barracuda Technologies has
year there were no accidents impacting the environment.
changed its production processes to eliminate a large share
of the cyclohexanone that is handles. Marine Electronics has
VOCs
Chlorinated VOCs
Energy
Tonnes
500
Tonnes
50
GWh
250
400
40
200
Jönköping, Ericsson Saab Avionics is investing SEK 6 million
300
30
150
in 1999–2002 in a new freon-free cooling system that utilizes
200
20
100
100
10
50
reduced the weight of its naval level gauges by 20 percent
and added a computer system to monitor chemicals. In
water from nearby Lake Vättern. Avionics has also added
0
99
00
Nexplo accounts for more
than 75 percent of VOC
emissions.The company
reduced its emissions in
2000, however.
0
0
99
00
The increase in the use of
chlorinated VOCs is due
to increased production
volumes at Aerospace and
Aviation Services.Together
with Technical Support and
Services, they account for
practically all consumption
of chlorinated VOCs.
a computer system to monitor its chemical products.
99
00
Electricity Heating
Because of the Group’s
new structure, energy
consumption is still difficult to evaluate. Many
units are working actively
to reduce consumption.
Soil contaminants
The Group has a number of locations where industrial proSaab Aerospace is gradually introducing electric vehicles for local transports.
duction has been carried out for years. Within these locations are areas that have been affected by soil contaminants.
Known contaminants have been found primarily at Bofors’
Saab Aerospace
firing range (operated by Bofors Test Center) and the
Aerospace uses an environmental management system large-
Björkborn industrial area in Karlskoga, where Dynamics
ly adapted to ISO 14001. This system covers the entire busi-
and Nexplo Bofors are located. A special inspection program
ness area and has been introduced gradually, to ensure that
has been established to monitor the spread of pollutants in
all areas are well-integrated. Environmental audits are con-
some lakes within the firing range. In addition to the inspec-
ducted in conjunction with quality audits. In 2000 and 2001
tion program, a series of extensive analyses was conducted
the environmental management system is being integrated
in 1998–2000 to monitor the scope and impact of soil
into the new quality system. A decision on possible ISO 14001
contaminants in these locations. The Råberga-Tannefors
certification will be made in 2001. Aerospace has established
industrial area in Linköping has an abandoned waste dump
objectives and programs to replace trichloroethylene, VOCs,
that contains metal hydroxide wastes. Samples are regularly
cadmium and ozone-depleting coolants as well as conserve
taken to monitor the leaching of any metals.
energy, reduce the use of de-icing agents and improve waste
handling.
As part of the so-called cooling project during the period
Marine Electronics, which was divested in January 2001, is
1998–2002, additional cooling installations that contain ozone-
ISO 14001 certified. Saab Barracuda Technologies and Saab
depleting refrigerants are being taken out of service and
Training Systems are planning certification audits in 2001.
replaced by a central cooling system. In total, SEK 110 million
Active efforts to introduce environmental management
is being invested in a new freon-free cooling system. Aero-
systems are also under way at Ericsson Saab Avionics and
space’s database of chemical products was made available on
SaabTech. Companies within Saab Systems and Electronics
the business area’s intranet during the year. Several measures
have established objectives and programs to environmentally
have been taken to reduce the risk of spills/leakage in the
42
handling of chemicals. Aerospace is gradually converting to
Saab Ericsson Space
electric vehicles for local transports of passengers and goods.
In 2000 Saab Ericsson Space completed its environmental
management system and conducted an ISO 14001 certifica-
tion audit. It expects to receive its 14001 certification in the
In 2001 and 2002 the Technical Support and Services business
first quarter of 2001 for all Swedish operations. Austrian
area will work on the modification and development of an
Aerospace will be certified in 2001. Space has established
environmental management system according to ISO 14001.
objectives and programs for chemical products, energy con-
Within parts of the business area, several measures have been
sumption, travel, wastes and recycling.
implemented to create an environmental management system.
During the year Space placed in operation a new com-
The aim is to certify the system in early 2003. The business
puter system to monitor chemicals. In the space field it is
area has established overall objectives and programs to under-
especially important to use light materials and constructions
score environmental considerations throughout a product’s
to reduce the energy and resource consumption at launch.
lifecycle as well as for environmental training, emission reduc-
Furthermore, energy optimization in the satellite is a natural
tions and efficient resource utilization.
part of product development.
AerotechTelub can offer turnkey solutions for the disposal
Metop is a European satellite that monitors meteorologi-
of materials and systems. This includes environmental inspec-
cal and environmental conditions. Space has significant
tions, disassembly, recycling and hazardous waste removal. In
commitments to Metop and made major deliveries during
addition, it conducts safety analyses in connections with waste
the year.
disposal.
Celsius Aviation Services
AeroThrust Corp. and Celsius Aerotech Inc. in the U.S. and
Bofors Test Center and parts of Dynamics are ISO 14001 cer-
Hawker Pacific Pty Ltd in Australia have environmental
tified. The goal is that Dynamics will have an ISO 14001
management systems that in some cases will soon be
environmental management system for its entire operations
adapted to ISO 14001. Objectives and strategies are in
in 2001. In 1999–2000 the companies in question devoted a
place for waste handling and reducing water pollution
great deal of effort to create environmental management
and VOC emissions from depainting and painting of aircraft
systems. Dynamics has established objectives and programs
and components. Several companies have implemented
for transports, hazardous substance replacements, explo-
comprehensive measures to reduce their use and emissions
sives incineration and replacements for ozone-depleting
of both chlorinated and non-chlorinated VOCs.
refrigerants.
During the year Dynamics purchased a computer system
Other operations
to monitor chemical products. Furthermore, investments
Nexplo Industries in Karlskoga uses an environmental
have been made to reduce emissions from the incineration of
management system adapted to ISO 14001 but which is
the explosives in the Björkborn industrial area in Karlskoga.
not yet certified. The system used in Finland has been preaudited, with certification planned in 2001–2004. Applied
Composites and CSM Materialteknik have ISO 14001 certified their environmental management systems. Kockums
Industries has established an action plan for its environmental work. Nexplo Industries has established goals and programs to reduce VOC emissions, monitor water emissions,
identify solvent leaks and minimize wastes.
Nexplo Industries has reduced VOC emissions in both its
plants through improvements to its production processes.
The plant in Finland has significantly reduced its water
emissions. They have also purchased a computer system
to monitor raw materials, emissions and wastes. Kockums
Hans Muth is an environmental coordinator at Saab Bofors Support working
on the design of a manmade wetlands at Björkborn industrial area. Any water
that leaches from the explosives incinerator area can then be treated before
flowing into the nearby river.
Industries has reduced VOC emissions by changing its
paint system for wind power pylons.
43
ANNUAL REPORT
Financial Review
45
Financial statements
57
Notes with accounting principles and
comments on the financial statements
Auditors’ report
61
73
44
Financial Review
Saab AB, Corporate Identity No. 556036-0793,
registered office Linköping, has been listed
on the O-list at the OM Stockholm Exchange
since 1998. The principal owners are Investor
AB with 20 percent of the shares, corresponding to 36 percent of the votes, and BAE
SYSTEMS, with 35 percent of the shares,
corresponding to 35 percent of the votes. The
remaining 45 percent of the shares are traded
on the OM Stockholm Exchange.
Saab Group
Saab is one of the world’s leading high-technology companies, with its main operations
focusing on defense, aviation and space.
Saab is active in more than 20 countries but
research, development and production are
carried out principally in Sweden. During
2000, Saab consisted of the business areas
Saab Systems and Electronics, Saab
Aerospace, Saab Technical Support and
Services, Saab Bofors Dynamics, Saab
Ericsson Space, Celsius Aviation Services
and Other operations. From 2001 the leasing
and customer support activities for Saab
regional aircraft, together with parts of
Celsius Aviation Services, will form the
business area Saab Aviation Services.
IMPORTANT EVENTS AND
STRUCTURAL MEASURES
Acquisition of the defense group Celsius
On February 25, 2000, Saab stated that it
would be fulfilling the public offer for all the
shares in Celsius AB, which it had made on
November 16, 1999. The acquisition of Celsius
is equivalent to a doubling in the size of
Saab. By December 31, 2000, Saab had acquired ownership of all the shares in Celsius.
During the year, Saab invoked compulsory
acquisition of the 47,471 shares outstanding
after the expiry of the offer, corresponding to
0.2 per cent of the capital. The value of these
shares has not yet been determined but since
Saab has provided collateral, ownership of
the shares has now been transferred.
The shares in Celsius were acquired with
the company’s own funds. At year-end, the
book value of the shares in Celsius amounted
to SEK 5 bn. The acquisition has brought
goodwill of SEK 700 m., which will be written
off over a period of 20 years, resulting in an
annual goodwill amortization of SEK 35 m.
The goodwill amount has been adjusted
partly for Celsius’ share of SPP’s companyrelated funds, provisions for restructuring
costs, effects of structural measures decided
earlier by Celsius and income from divestments carried out during 2000.
In connection with the extensive structural
measures made necessary through the acquisition of Celsius, a detailed review has
been made of certain major projects. It was
found that certain development projects in
the torpedo and missiles operations from
the former Celsius Group required further
provisions of SEK 488 m., which burdened
income in the third quarter.
During the year, the integration and structuring process has entailed streamlining with
the aid of divestments, outsourcing, focusing
and rationalization in the business areas,
closure of the head office functions in Celsius
and new management structures. The following operations outside the core business
which were included in the Celsius Group
have been divested or agreed upon for divestment: Bofors Weapon Systems AB, the surface
treatment companies Yttec AB and Celsius
Nussbaum GmbH, the two repair shipyards
Götaverken Cityvarvet AB and Öresundsvarvet AB, electronics and mechanical components production in Karlskoga, wind pylon
manufacture at Kockums Industrier, the
49 percent holding in Australian Submarine
Corporation, the 30 percent holding in the
Louisiana oil platform, and various properties. In addition, the accredited calibration
laboratory in Karlskoga was transferred on
January 1, 2001 and in February, Celsius
Amtec was sold to the Spanish company
Idustria de Turbo Propulsores, ITP and
Celsius Materials Karlskoga AB was sold
to Bodycote Polymer AB.
Other acquisitions and divestments
during the year
In November, Saab Ericsson Space purchased 65 per cent of the Dutch company
Fokker Space, with access during 2001
provided that all the necessary licenses are
obtained and that due diligence is completed
in a satisfactory manner. Fokker Space is
calculated to have an annual turnover of
SEK 500 m. and employs 400 persons. Saab
Ericsson Space has also acquired a further
13 per cent of Austrian Aerospace, which it
thereby owns to 90 per cent. AerotechTelub
and Ericsson Saab Avionics have made a
number of minor acquisitions. Saab has also
invested SEK 21 m. in b-business partners
B.V., a European initiative in electronic
45
trading solutions between companies. In
total, the investment may add up to about
SEK 90 m in the future.
In January 2000, the streamlining of the
former Combitech was completed with the
sale of Combitech Traffic Systems to the
Austrian company Kapsch with a capital gain
of SEK 55 m. During 2000 and 2001, the strategy of realizing values from the commercial
operation generated from military technology
has also continued with the divestments of
Combitech Network and Saab Marine
Electronics. Combitech Network was sold for
SEK 300 m. with a capital gain of SEK 297 m.,
to American Computer Sciences Corporation,
CSC, at the same time as we agreed on longterm co-operation and extensive productivity
improvements concerning our IT infrastructure. During the first quarter of 2001, Saab
Marine Electronics was sold to the American
electronics company Emerson for approximately SEK 800 m., resulting in a capital gain
of approximately SEK 650 m. and a positive
effect on net cash in the same magnitude as
the purchase sum.
Financial risk insurance program
for Saab Aircraft Leasing’s regional
aircraft lease portfolio
In November, Saab entered into a financial
risk insurance program, which in practice
isolate the performance of the lease portfolio
from future market risk. During 15 years,
from 2000, the policy provides a safeguard
against risks such as market cycles, competition, obsolescence and customer default. The
financial risk insurance program means that
lease income amounted to USD 1,170 m, after
deduction of a first loss of 10 percent or USD
130 m, is now insured. The transaction cost,
including fees to advisers, was USD 37 m.
after tax and is covered by current provisions:
therefore, it has not been charged to the
year’s income. The insurance policy covers
203 of the 302 aircraft in the portfolio. Of the
99 Saab 340 aircraft not included in the policy,
57 are funded with non-recourse long-term
loans and 42 are covered by asset value insurance issued by EKN, the Swedish government agency for export guarantees. Saab will
continue to actively manage the portfolio to
enhance its value by maximizing income.
Restructuring
In December 1997, Saab decided to cease
manufacture of regional aircraft and
allocated reserves totalling SEK 4,079 m. for
restructuring the industrial operation. The
reserve related to the originally calculated
loss for remaining production for the existing order backlog, costs for phasing out personnel and commitments towards suppliers
and customers, calculated losses for continued support activities for the aircraft fleet,
and underabsorption of shared costs and
overheads. Restructuring is proceeding
according to plan and reconciliation against
the reserve takes place continuously. During
2000, further structural measures have been
completed, including commitments towards
suppliers. This has now enabled a more reliable assessment of the costs and a decision
has therefore been made on reversal of reserves of SEK 246 m. (255) in the financial
statements for 2000. At the end of 2000, the
restructuring reserve amounted to SEK 1,537
m. after utilization of a total of SEK 1,841 m.
and reversal of the reserve totalling SEK 701
m. during 1998, 1999 and 2000. The view is
that remaining reserves are now well adapted
to the continued restructuring.
In connection with the decision to cease
production of regional aircraft, a decision
was also made to put a market value on the
leasing portfolio held by Saab Aircraft
Leasing and to make a provision in order to
adjust the book value to a calculated market
value. During 2000, the aircraft on the balance sheet were written down by SEK 1,451
m., of which SEK 989 m. against the loss risk
reserve and the remaining portion against
other liabilities. At the end of 1997, the loss
risk reserve amounted to SEK 2,728 m. During 1998, 1999 and 2000, the reserve has been
reduced by operating deficits of SEK 55 m.,
SEK 35 m. and SEK 113 m. respectively. During 2000, the insurance cost of SEK 528 m.
and the write-down of aircraft on balance
sheet of SEK 989 m. have been set against the
loss risk reserve, which thereby amounted to
SEK 1,008 m. at the end of 2000. No reversals
of the reserve to the income statement have
so far been made, since the remaining life of
the leasing portfolio is about 15 years.
The restructuring costs resulting from the
acquisition of Celsius are included in the
acquisition analysis and do not affect Group
income.
OPERATIONS
Business area Saab Systems and Electronics
focuses on command and control systems,
simulation systems, avionics, electronic warfare and signature management, as well as
commercial operations of IT and electronics.
The business area, which is Saab’s largest
and accounts for 23 per cent of the Group’s
total sales, has good prospects of playing a
central part in the development towards
information defense. Operations are characterized by a high level of activity in the
export field, with sales to over 70 countries.
The business area includes the business units
SaabTech Systems, SaabTech Electronics,
Ericsson Saab Avionics, Saab Training Systems,
Saab Barracuda, Combitech Systems, Saab
TransponderTech and the associated company
Avitronics Pty Ltd (49 per cent) in South
Africa, as well as a number of commercial
spin-off projects. The most important products of the business area are naval command
and control systems, the EWS39 electronic
warfare system for Gripen, electronic warfare
equipment such as radar warners, jammers
and decoys, the EP-17 cockpit display system
for Gripen, the StriC air defense system, signature management equipment, laser simulators and combat training centers for fire training, combat operations, strategy and tactics
and automatic identification systems (AIS) for
ships and aircraft.
Order bookings have been very good
during the year with several market and product breakthroughs both in Sweden and
internationally, including a new generation
naval command and control systems, mobile
combat training centers for the Netherlands
and the USA, firing control systems for
Combat vehicle 90 for Switzerland and
Finland, and electronic warfare equipment for
the Eurofighter. During the autumn, the UN
organ for maritime issues, IMO, made a
decision requiring automatic identification
systems (AIS) to be installed on all vessels in
the Solas classification from July 1, 2002. This
is positive for business prospects at Saab
TransponderTech, which has already won
several important orders as a result. Major
deliveries by the business area during the
year included laser simulators for the USA
and UK, further deliveries of display systems
and avionics to the Gripen, and final delivery
of sights to Combat vehicle 90 for Norway.
Business area Saab Aerospace, which has
the overall system integration capability required for building complete aircraft and
defense systems, develops and manufactures
military aircraft systems and acts as a partner
46
and supplier in subsystems to manufacturers
of large commercial aircraft. It accounts for 21
percent of the Group’s total sales. The business
area includes Gripen, Future Products and Commercial Programs. Products include the Gripen,
an integrated and flexible information, command and weapon system that will remain
modern for many years to come. Three
squadrons of the world’s first fourth-generation combat aircraft are now operative in the
Swedish defense. During 2000, 17 Gripen aircraft were delivered to the Swedish Air Force,
bringing the total to 98 out of the 204 ordered
by the Defence Materiel Administration, FMV.
Saab collaborates with BAE SYSTEMS in a
joint venture for exporting the Gripen. In
co-operation with the Swedish Government,
possibilities have also been created for renting Gripen aircraft to export customers. In
the long-term work of marketing the Gripen
for export, information and offers have been
supplied during the year to several countries
in reply to formal enquiries. Marketing and
sales work may cover a period of several
years and is characterized by a long-term
approach where success leads to co-operation
over several decades. In March 2000, the first
export order for the Gripen was formally
received from South Africa, comprising 28
aircraft with a value for Saab of SEK 9.3 bn.
Future Products carries on development
work concerning future defense technology
and during the year has participated in various concept studies regarding unmanned
aircraft. Commercial Programs is a direct supplier of components and sub-assemblies to
external customers such as Airbus and
Boeing, and is an internal supplier to the
Gripen and a spare parts supplier to Saab
Aircraft. Since 1997, Commercial Programs has
been taking part in the concept study for the
Airbus A380 “Superjumbo”. In December,
Airbus made the final decision on developing the A380 and Commercial Programs is now
negotiating on taking part in the project as a
partner and subcontractor.
Business area Saab Technical Support and
Services focuses on the growing market for
high technology services in aviation, command and control, information, communications and sensors, and supplies these to both
military and commercial customers. The
business area accounts for 14 percent of the
Group’s total sales. The export share is 11
percent and 74 percent of sales go to military
customers. The business area is dominated
by AerotechTelub, which was formed on
January 1, 2000, and is owned to 57 percent
by Saab and 43 percent by TietoEnator.
The agreement between Saab and TietoEnator comprises a possibility for Saab to
acquire TietoEnator’s shares in AerotechTelub at a price of SEK 1.2 bn from July 1,
2001. If Saab does not utilize the option,
TietoEnator is entitled from September 1,
2001 to demand that Saab purchase all the
shares at a price of SEK 1.1 bn. AerotechTelub
is an advanced service company primarily
oriented towards technology services, operation and maintenance, and customized
system solutions for testing, simulation, traffic management and information. Major
deliveries during the year included maintenance equipment for the Gripen, mobile
communications systems for the Norwegian
defense, and a traffic information portal for
the National Road Administration. In connection with the inauguration of the
Öresund Bridge, a consultancy commission
for the Öresund Consortium was concluded.
The business area includes Saab Nyge Aero,
with operations in the fields of aircraft maintenance, target and special aviation, which
during the year obtained a breakthrough
order for the modification of amphibious aircraft. An important delivery during the year
consisted of four MD500 helicopters for
Finland. From 2001, Saab Aviocomp, which
is primarily active in component maintenance
for commuter aircraft, and CSM Materialteknik are also included in the business area.
Saab Technical Support and Services co-ordinates Saab’s operations in the helicopter field.
Saab’s operations in precision engagement
have been gathered in business area Saab
Bofors Dynamics, which develops and produces missile systems, portable anti-armor
systems and underwater systems for use on
land, sea and air. The business area accounts
for 13 percent of the Group’s total sales.
Today, Saab Bofors Dynamics is a complete
missile systems house with products such as
air-to-air, air defense, anti-ship and ground
target missiles, anti-armor and torpedoes.
The business area has a long presence in
many export markets throughout the world
and in 2000 had sales to almost 40 countries.
During the year, intensive integration
work has been carried on in the business
area to realize cost synergies and focus the
business. This produced a visible effect from
the third quarter. Saab Bofors Dynamics is
involved in several international collaboration projects in missiles, such as the sixnation project for the short-range air-to-air
missile IRIS-T and the Taurus air-to-ground
missile, together with the German LFK
(Lenkflugkörpfersysteme GmbH). Both the
IRIS-T and Taurus projects are at the end of
their development phase and negotiations
on production contracts have been started.
Saab Bofors Dynamics is also a member of
the industrial team behind the European
project on the medium-range air-to-air missile
Meteor. During 2000, the British Government
announced that it had chosen the Meteor and
the Swedish Defense Minister stated that
Sweden would be taking part in the project
with a share of about 12 per cent. The total
value of the project is estimated at SEK 100
bn throughout its life. Negotiations on the
development contract for the Meteor have
been started between the industry and participating countries, and are expected to be
completed during 2001. Among the totally
internally developed products are the RBS 23
Bamse and RBS 70 anti-aircraft missile
systems, the RBS 15 anti-ship missile, the
BILL 2 anti-armor missile, the Carl-Gustaf
mortar system and the AT4 anti-armor munitions. Development of the RBS 23 Bamse is
in its final phase and successful test firings
have taken place. In July, the first serial order
for the Bamse was received from FMV, with
deliveries from 2003. During the year, several
countries have also shown an interest in the
RBS 15 anti-ship missile and in December an
agreement was signed with the German company DIEHL on collaboration in production,
maintenance and future upgrading for both
the German and the Swedish markets, as well
as the export market. Deliveries during the
year included the RBS 70 for Venezuela, BILL
2 and upgraded RBS 15 for FMV, anti-armor
munitions for France and Carl-Gustaf munitions for Norway. In September, a further successful test flight took place with the Taurus
and during the year several test firings of the
IRIS-T have been conducted from various aircraft.
Business area Saab Ericsson Space, which
is owned to 60 percent by Saab and 40 percent by Ericsson, develops and produces
computers, antennas, microwave electronics
and mechanical systems for the space
industry. Over 90 per cent of the business
area’s sales go to export. Sales in commercial
telecommunications projects continued to
47
grow and during the autumn the second
sales office in the USA opened in Los
Angeles in order to be closer to customers,
mainly in the commercial telecommunications industry. Other operations concerned
publicly financed projects within organizations such as the European Space Agency
(ESA), and bilateral and Swedish programs.
In November, 65 per cent of the Dutch
company Fokker Space, which specializes in
manufacturing solar panels, robot-controlled
instruments and structures for launch rockets was acquired, with access during 2001
provided that all the necessary permits are
obtained and that the due diligence is completed in a satisfactory manner. Saab Ericsson
Space thereby became Europe’s largest supplier of space equipment. The Dutch industrial group Stork is the minority owner in
Fokker. The most important projects in the
institutional market during 2000 have been
SPOT, a bilateral collaboration between France
and Sweden in global observation satellites,
and the ESA projects METOP concerning
meteorological satellites and ROSETTA, a
scientific satellite. In the commercial market,
the most important projects during the year
have been participation in the telecommunications satellite projects Eutelsat and Intelsat,
work on the Ariane program and deliveries
of separation systems for a number of launch
rockets. Order bookings during the year
have been good and include equipment for
Spaceway, the new generation of telecommunications satellites.
Celsius Aviation Services, CAS, is a commercial aircraft maintenance company focusing on the USA. CAS lies outside the strategy
and orientation that Saab has chosen for the
future. However, work on finding a new
owner for CAS has proved more complex
than expected, partly because of the trade
cycle. The structure of the operation has
therefore been reviewed and from 2001 Saab
Aviocomp is included in business area Saab
Technical Support and Services, while
discussions are in progress with potential
buyers of other parts of CAS. In February
2001, Celsius Amtec was sold. The result
from the divestment has been taken against
the purchase analysis and will therefore not
affect the income. There will be a positive
effect on net cash of close to SEK 500 m.
Operations during the year have been affected negatively by a general downturn in
trade in those markets where CAS operates.
An important event during the year was the
new outline agreement signed with the
American defense on jet engine maintenance.
In Other operations, there are long-term
commitments in the form of the leasing portfolio and maintenance activities for Saab
regional aircraft. There are also a number of
small niche companies, such as Nexplo,
which specialises in explosives, and
Kockums Industrier, which operates in the
heavy engineering industry. To manage the
long-term capital supply for these niche
companies and to realize values, Saab is
seeking structural solutions for several of the
operations. During the year, a number of
niche companies have been sold. Saab also
holds 25 percent of the shares in the German
shipyard Howaldswerke Deutsche Werft,
HDW. Celsius acquired these in autumn
1999 when Kockums AB was sold to HDW.
At the same time, agreement was reached on
a possibility for Saab to increase its shareholding and on the right to sell its 25 per cent
holding. The right to sell can be exercised
during the period January 1, 2001 – June 30,
2002 at a fixed price of DEM 355 m. Other
owners in HDW are the German companies
Babcock Borsig and Preussag AG.
From 2001, the leasing and customer support
activities for Saab regional aircraft and parts of
Celsius Aviation Services and Saab Air will
constitute business area Saab Aviation Services.
FUTURE DEVELOPMENT
Formation of one of the world’s leading
high technology companies
The European defense industry is characterized by increasing competition and swelling
research and development costs. This has led
to a consolidation and internationalization of
the industry and the formation of large multinational defense companies operating in a
global market. Through the acquisition of
Celsius, Saab has created one of the world’s
leading high technology companies with its
principal operations in aerospace and
defense and has achieved the breadth of
competence in high technology required to
continue supporting its customers also in
the future and to be their natural first choice.
Through the acquisition, Saab has become a
more comprehensive company in important
parts of the future defense – information gathering, decision support and precision engagement, greatly increased its activities in the
area of advanced services, which we consider
to be an interesting market for the future,
and expanded its international presence.
Products and systems
With the purchase of Celsius, Saab has
broadened its product portfolio and now has
a very good position to meet the orientation
envisaged in the defense market, where
several countries, among them Sweden, are
increasing their focus on information defense.
In the international perspective, BAE
SYSTEMS’ partnership and part ownership
are of great importance. Today, Saab derives
considerable benefit from this link to the rest
of Europe and other international markets.
The excellent order bookings in 2000 and the
acquisition of Celsius have further strengthened Saab’s already strong order backlog,
which now corresponds to more than two
years invoicing. In systems and defense
electronics, Saab currently has an internationally competitive center for the development
of advanced defense systems, partly based on
information technology, with a large export
share. The order backlog for the Gripen is an
important base for future operations. Deliveries to the Swedish Air Force are taking place at
a rate of about 17 aircraft per year, in addition
to further development of the aircraft system
and routine maintenance and add-on orders.
Deliveries of 28 Gripen aircraft to South Africa
will begin in 2007. Commercial programs is
continuing the build-up of new activities
oriented towards collaboration with the major
aircraft manufacturers Airbus and Boeing. The
order for the RBS 23 Bamse and the decision
on the Meteor have laid the foundation for an
internationally strong and enduring missile
industry within Saab. The decision on the
Meteor is also extremely important for the
long-term export potential of the Gripen.
During recent years, Saab has expanded both
organically and through acquisitions in the
area of advanced technical services, which we
consider to be an interesting future market.
The space industry is currently undergoing
major structural changes. The main growth
potential is expected to be in the commercial
market, while growth in the institutional
market is expected to be moderate.
THE SAAB GROUP IN 2000
Sales
Group sales doubled to SEK 17,840 m. (9,053,
pro forma 18,018). The acquisition of Celsius
is the main reason for the increase. Sales
48
have increased or are on the same level as
last year for principally all companies except
business area Saab Bofors Dynamics. Of
sales 62 percent (pro forma 66) were related
to defense. Sales to foreign markets amounted to SEK 8,523 m. (3,444) or 48 percent
(38, pro forma 48) of total sales. Total exports
from the Group’s Swedish companies
increased to SEK 5,123 m. (3,235). The
Group’s export to the EU market amounted
to SEK 2,583 m. (1,395) and total sales within
the EU, excluding Sweden, were SEK 2,734 m.
(1,493).
Sales by business area
SEK m.
Saab Systems & Electronics
Saab Aerospace
Saab Technical Support
& Services
Saab Ericsson Space
Internal sales
2000
4,364
3,921
1999
4,294
3,964
2,511 2,367
2,348 3,393
713
676
-733
-797
13,124 13,897
Celsius Aviation Services 3,241 3,009
Other operations
1,475 1,112
Saab Group
17,840 18,018
Pro forma
Change
2%
-1%
6%
-31%
5%
-6%
8%
-1%
The sales increase in Saab Systems and
Electronics is mainly attributable to simulation
systems and the commercial operations, while
defense electronics was on a level with the pro
forma figure in the previous year. Sales of
Saab Aerospace were on a level with the
previous year for all three business units.
During the year, 17 (16) Gripen aircraft were
invoiced, which corresponds with the current
delivery plan. Invoicing of one Gripen aircraft
more than in the preceding year was offset by
a slower rate in the Swedish further development program. The sales increase in Saab
Technical Support and Services is attributable
to acquisitions within AerotechTelub, as well
as to organic growth in the defense-related
operations and test systems for the telecommunications industry. The sales decrease for
Saab Bofors Dynamics, whose operations were
concentrated during the year, is mainly attributable to major deliveries of the STRIX during
1999, for which there was no corresponding
figure in 2000, and fewer deliveries of
anti-armor munitions. Sales of Saab Ericsson
Space increased through higher volumes.
Sales in Celsius Aviation Services were
unchanged in terms of US dollars compared
with the preceding year and the increase is
thus attributable to the higher dollar rate
during 2000. Other operations increased
mainly through volume expansion in customer
support to the fleet of Saab 340 and Saab 2000
aircraft, which amounted to SEK 994 m. (666).
Sales by market area
SEK m.
Sweden
Other EU countries
Other European
countries
Total Europe
North America
Central and South
America
Asia
Australia, etc
Other markets
Saab Group
2000
9,317
2,734
1999
5,609
1,493
Change
66%
83%
608
12,659
2,899
512
7,614
644
19%
66%
464
764
997
57
17,840
21
546
217
11
9,053
40%
97%
Orders
Group order bookings were all time high and
amounted to SEK 28,141 m. (6,849, pro forma
15,267). The order backlog at year-end
amounted to SEK 41,091 m. (23,637, pro
forma 29,891), and includes military orders
worth SEK 38,300 m.
Order bookings
SEK m.
Saab Aerospace
& Services
Saab Ericsson Space
Internal
Other operations
Saab Group
2000
5,523
12,171
Pro forma
1999
4,126
3,752
2,672
2,853
765
-612
23,372
3,408
1,361
28,141
2,099
2,793
706
-1,820
11,656
2,607
1,004
15,267
Order bookings for Saab Systems and
Electronics, which were very good for most
business units during the year, included fire
control systems for combat vehicles for
Switzerland and Finland (SEK 750 m.) a
mobile combat training center for the
Netherlands (SEK 560 m.), naval command
and control systems for Sweden and the
United Arab Emirates (SEK 450 m.), laser
simulators and mobile systems for combat
training for the USA (SEK 400 m.), electronic
warfare equipment for the Eurofighter (SEK
135 m.), air surveillance systems for a
country in South-east Asia (SEK 100 m.)
multispectral mobile camouflage systems for
the Swedish Army’s Leopard 2 battle tanks
(SEK 75 m.), digital recording equipment
– including options – for F18 aircraft in the
Spanish Air Force (SEK 65 m.) and further
orders in the ANZAC (ships) and BCSS
(Battlefield Command Support System) programs for Australia. Order bookings for Saab
Aerospace comprised the first export order
for the Gripen through South Africa’s order
for 28 aircraft with associated equipment,
training etc. with a value for Saab of SEK
9.3 bn. Order bookings also included further
development, upgrading, separate orders
and spare parts for the Gripen. Order bookings for Saab Technical Support and Services
increased heavily during the year owing to
acquisitions and a very large number of
smaller orders, including one from Bombardier
for modification of amphibious aircraft,
another from Telia Mobile for participation in
building and installing base stations for
mobile radio telephony in Sweden, and
orders for a new command and control
system for the Air Force Tactical Command,
computerised test systems for the Swedish
Army’s Leopard 2 battle tanks and a new
radio system for the Gripen. Order bookings
for Saab Bofors Dynamics mainly comprised
the first serial order from FMV for the Bamse
anti-aircraft missile with a value of over SEK
1 bn, as well as several export orders for AT4
anti-armor munitions and munitions for the
Carl Gustaf mortar. Saab Ericsson Space has
increased its order bookings in 2000, as it has
done every year since the formation of the
present company. Order bookings included
a supplementary contract for 40 onboard
computers for the Ariane 5 launch rocket,
onboard computers and antennas to Alcatel
for the Eutelsat satellites Atlantic Bird 2 and
Hotbird 6, microwave equipment for Hughes
for Spaceway – a new satellite-based system
for broadband services, electronics for telecommunications satellites and further orders
for both the European and American weather
satellite programs and the ROSETTA satellite,
a scientific program organised by the ESA
(European Space Agency) where the business
Income statement
2000
Pro forma
1999
1999
17,840
-13,427
18,018
-13,882
9,053
-6,363
4,413
24.7%
-1,578
-1,251
-860
285
613
-97
8
4,136
23.0%
-1,390
-1,309
-858
255
347
-65
9
2,690
29.7%
-798
-550
-604
255
181
-71
1
Operating income 1)
Operating margin
Result from financial investments
1,533
8.6%
-85
1,125
6.2%
-9
1,104
12.2%
273
Income after financial items
Taxes
Minority interest
1,448
-333
-77
1,116
-352
-29
1,377
-391
-47
Net income
Earnings per share, SEK 2)
Earnings per share after full conversion, SEK
1,038
9.75
9.50
735
6.90
6.73
939
8.82
8.60
-1,336
-534
-1,311
-511
-918
-511
SEK m.
Sales
Cost of goods sold
Gross margin
Gross margin, %
Marketing expenses
Administrative expenses
Research and development costs
Items affecting comparability
Other operating income
Other operating expenses
Share in income of associated companies
1)
3)
Includes depreciation of
of which depreciation on leasing assets
Number of shares: 106,459,675 as per Dec. 31, 2000
3)
Number of shares after full conversion: 109,247,175
2)
49
Operating income by business area
% of
sales
Pro forma
1999
% of
sales
289
333
167
46
53
340
6.6%
8.5%
6.7%
2.0%
7.4%
199
450
146
-39
65
-40
4.6%
11.4%
6.2%
Other operations
1,228
157
148
9.4%
4.8%
781
212
132
5.6%
7.0%
Saab Group
1,533
8.6%
1,125
6.2%
SEK m.
2000
Saab Aerospace 1)
Saab Technical Support & Services
Saab Ericsson Space
Corporate
9.6%
area is participating with computer, mass
memory and antenna systems. The commercial market’s share of order bookings increased further during the year and amounted to
53 per cent of the total. Order bookings for
Celsius Aviation Services increased somewhat
also in US dollars and during the year a new
long-term outline agreement was signed with
the American defense for jet engine maintenance to a value of just over SEK 1 bn. Order
bookings for Other operations consisted
mainly of spare parts and customer support
for the fleet of Saab 340 and Saab 2000 aircraft.
Order backlog
1)
1999 includes reversal of loss risk reserve of SEK 135 m.
Balance sheet
SEK m.
Assets
Goodwill and other intangible assets
Property, plant and equipment, etc.
Lease assets
Long-term interest bearing receivables
Shares, etc.
Deferred tax receivables
Inventories, etc.
Short-term interest bearing receivables
Other receivables
Cash and marketable securities
Total assets
Shareholders’ equity and liabilities
Shareholders’ equity
Minority interest in subsidiaries
Provision for pensions
Other provisions
Liabilities to credit institutions
Lease obligations
Advance payments from customers, net
Other liabilities
Total shareholders’ equity and liabilities
1)
Advance payments from customers, gross
1)
Dec. 31,
2000
Pro forma
Jan 1,
1999
1,619
4,712
6,502
1,345
950
1,440
3,684
606
6,079
4,182
1,824
4,339
8,963
1,180
1,003
1,093
3,954
231
6,349
7,705
2,511
10,791
31,119
36,641
28,079
5,670
821
3,527
3,821
1,963
228
3,916
3,619
7,554
4,700
752
3,406
6,606
3,081
217
4,633
4,631
8,615
4,708
206
1,995
5,042
181
217
4,591
4,055
7,084
31,119
36,641
28,079
6,768
7,796
6,645
-3,149
-3,165
-2,590
3,619
4,631
4,055
Dec. 31,
1999
375
2,615
8,236
1,327
507
1,717
Less portion used, which has been reduced
from inventories
Advance payments from customers, net
50
SEK m.
Saab Aerospace
& Services
Saab Ericsson Space
Internal
Other operations
Saab Group
2000
8,689
27,097
Pro forma
1999
7,250
18,847
1,253
4,219
816
-1,997
40,077
540
474
41,091
778
3,765
764
-2,156
29,248
338
305
29,891
Number of aircraft in the order backlog
Number of aircraft
Gripen
2000
134
1999
123
Income and profitability
The increase in operating income is mainly
attributable to improved income for Saab
Systems and Electronics, the effect of the
structuring work at Saab Bofors Dynamics
and capital gains from value realization of
commercial spin-off companies totalling SEK
353 m. During 1999, operating income included a reversal of the loss risk reserve for the
base contract for the Gripen of SEK 135 m.,
for which there was no corresponding figure
in 2000. Operating income includes a reversal
of the reserve regarding phase-out of Regional
Aircraft of SEK 246 m. (255). The year’s
income regarding Regional Aircraft of SEK
-593 m. (-771) has been set against the
termination reserve.
The increase in marketing expenses compared with pro forma 1999 has increased
because marketing activities in general have
been more intensive in every business area
Five year overview
1)
2000
Pro forma
1999
Order bookings
28,141
15,267
Order backlog at year-end
41,091
29,891
Sales
17,840
18,018
48
48
1,533
1,125
SEK m., unless otherwise stated
1999
Pro forma
1996
Pro forma
1995
1998
1997
6,849
5,797
16,612
7,736
6,053
23,637
23,132
27,122
20,042
20,509
9,053
8,248
8,674
8.,159
7,925
38
41
51
54
60
1,104
875
-5,316
-2,066
-399
neg
Saab Group
Foreign market sales, %
Operating income
Operating margin, %
8.6
6.2
12.2
10.6
neg
neg
13.5
10.7
17.1
14.7
neg
neg
5,7
1,448
1,116
1,377
1,218
-4,845
-1,572
271
1,163
861
1,122
1,018
576
-353
271
31,119
36,641
28,079
29,680
30,320
28,140
24,966
6,456
8,877
8,877
9,119
9,604
8,817
6,711
Operating cash flow
-1,908
–
-2,368
-1,105
-2,229
1,195
405
Capital employed, average
12,183
–
6,866
6,352
6,440
8,975
8,719
14.6
–
21.3
21.4
neg
neg
5.0
12.3
–
17.6
18.2
8.8
neg
5.0
20.0
–
21.5
25.6
neg
neg
2.5
16.1
–
17.3
21.6
2.4
neg
2.5
Operating margin before depr., %
before items affecting comparability
Total assets
of which aircraft leasing operation
Return on capital employed, %
before items affecting comparability, %
Return on shareholders’ equity, %
before items affecting comparability, %
Profit margin before items affecting comparability, %
8.4
–
13.4
14.1
7.8
neg
5.5
1.46
–
1.32
1.29
1.13
0.92
0.91
Equity/assets ratio, %
18.2
12.8
16.8
13.6
10.2
22.5
23.3
Interest coverage ratio, before items affecting comparability
4.47
–
13.9
7.88
6.76
neg
2.64
9.75
6.90
8.82
8.55
–
–
–
Earnings per share after full conversion, SEK
9.50
6.73
8.60
8.35
–
–
–
Dividend, SEK
3.00
–
2.50
2.00
–
–
–
15 453
16 665
8 031
7 891
7 716
8 110
8 474
Capital turnover rate
2)
Number of employees at year-end
1)
For definitions of key ratios, see Note 42, page 72.
2)
2000 proposed dividend.
this year. This should be seen in relation to
the excellent order bookings this year.
Administrative expenses have decreased
compared with pro forma as a result of the
integration work. Research and development
costs, which are on a level with pro forma
for the previous year, derived mainly from
business areas Saab Systems and Electronics
and Saab Aerospace. Development costs for
the export version of the Gripen were on a
level with the previous year.
Other operating income consist mainly of
capital gains following divestment of companies SEK 356 m. (21), reversal of reserves
corresponding to the deficit in Saab Aircraft
SEK 21 m. (47), trading income in Treasury
business SEK 45 m. (12), currency gains, etc.
SEK 82 m. (57) and income from secondary
activities such as insurance business, property
rentals and sales of machines. Other operating expenses include pension costs SEK
42 m. and capital losses SEK 17 m.
Items affecting comparability amounted to
SEK 285 m. and consisted of company related
funds of SEK 527 m. received from SPP, reversal of reserves of SEK 246 m. concerning
Regional Aircraft, and provisions mainly
regarding certain development projects in the
torpedo and missiles operation from the former Celsius Group amounting to SEK 488 m.
Items affecting comparability in the
previous year concerned reversal of reserves
51
of SEK 255 m. regarding Regional Aircraft.
Project interest on non-utilized advance
payments, which is reported in operating
income, amounted to SEK 172 m. (218).
The Saab Group has nominally received a
total of SEK 1,464 m. from SPP, of which SEK
263 m. has been paid in cash. The remaining
amount is reported as a short-term receivable,
SEK 606 m., and a long-term receivable,
which after discounting to present value
amounts to SEK 544 m. The portion of SPP’s
surplus relating to Saab has been taken to
revenue during the year and has influenced
income by SEK 527 m. after discounting
receivables to present value. The portion
totalling SEK 827 m. which relates to the
former Celsius Group is included in the purchase analysis and has not influenced income.
Taking into account discounting and adjustments for other acquisitions, surplus funds
received amount to SEK 1,354 m.
Net financial income and expenses
amounted to SEK -85 m. (pro forma -9), of
which Saab Aircraft Leasing SEK 68 m. (74).
The decrease is mainly attributable to lower
liquid funds. The decrease in net financial
income compared with the outcome in the
previous year is mainly due to the fact that
Celsius was purchased for cash, which corresponds to lost interest revenue of approximately SEK 250 m. The income share in
HDW, which amounted to SEK 30 m., is
reported as financial income. The average
return on external investments amounted to
4.72 percent (4.75) and the average liquidity
was SEK 5,400 m. (11,600). Income after
financial items amounted to SEK 1,448 m.
(pro forma 1,116).
Current and deferred taxes amounted to
SEK -333 m. (pro forma -352), corresponding
to an effective tax of 23 per cent (pro forma
32) on income after financial items. The
deviation of the effective tax rate in certain
years from the Swedish tax rate of 28 per
cent is due to permanent differences in
taxation and the fact that the Group has
operations in countries, primarily the USA,
with higher tax rates than in Sweden. See
also Note 14 Taxes, page 66.
Net income for the year was SEK 1,038 m.
(939, pro forma 735), corresponding to an
income per share of SEK 9.75 (8.82, pro
forma 6.90).
Pre-tax return on capital employed was
14.6 percent (21.3). Pre-tax return on capital
employed before items affecting comparability was 12.3 percent (17.6). After-tax return
on shareholders’ equity was 20.0 percent
(21.5). For definitions of key ratios, see Note
42, page 72.
The improvement in operating income for
Saab Systems and Electronics is mainly attributable to the military systems business and
the phase-out of certain commercial development projects. Operating income of Saab
Aerospace is on a level with the previous
year, excluding the reversal of the loss risk
reserve of SEK 135 m., which was made in
1999. Also in 2000, income is burdened with
high costs in regard to marketing and development for the export version of the Gripen.
Operating income and operating margin
have improved somewhat during the year
for Saab Technical Support and Services as a
result of the increased volume. Intensive
integration work has been carried on during
the year at Saab Bofors Dynamics to realize
cost synergies and concentrate operations.
This produced a positive result after three
quarters. Operating income for Saab Ericsson
Space deteriorated as a result of increased
efforts in the commercial telecommunications market and associated internally financed development. Income from Group
activities improved, primarily through capital
gains. The decrease in income of Celsius
Aviation Services is mainly due to a poorer
market for engine operations in the USA and
lower activity in the markets in South-east
Asia and Australia as a result of the stronger
dollar. Operating income for Other operations, excluding reversal of reserves in
regard to Regional Aircraft, was somewhat
better than in the previous year, but continued to be negative SEK -98 m. (pro forma
-123). Structuring work regarding several of
these operations is in progress. Development
in operations at Saab Aircraft and Saab
Aircraft Leasing followed the plans set up in
1997, when the leasing portfolio was written
down and provisions made for expected
negative income of Saab Aircraft. For Saab
Aircraft, income for the year before reversals
against the loss risk reserve amounted to
SEK -21 m. (-47) and for Saab Aircraft
Leasing to SEK -113 m. (-35).
Financial objectives
In the long term, Saab’s goal is to achieve an
average operating margin of at least 15 percent before depreciation and at least 10 percent after depreciation. In 2000, the operating margin before depreciation was 13.5
percent (pro forma 10.7) and the operating
margin after depreciation was 8.6 percent
(pro forma 6.2). The profitability goal is a
return of at least 15 percent on shareholders’
equity, based on the present interest level. In
2000, the return on shareholders’ equity was
20.0 (21.5) percent. The aim for equity/assets
ratio is to exceed 30 percent for Saab excluding regional aircraft activities. At the end of
2000, the equity/assets ratio calculated
accordingly amounted to 22.5 percent. The
financial objectives are unchanged compared
to prior the acquisition of Celsius and the
aim is that the margins should be back on
the goal levels again within three years.
52
Finance and liquidity
Of Goodwill, SEK 700 m. is attributable to
the acquisition of Celsius and the remaining
amount primarily to Ericsson Saab Avionics
and AerotechTelub. Property, plant and
equipment are used mainly in the core
business. Of Lease assets, just under SEK
6 bn concerns the leasing portfolio and the
remainder leasing assets within Celsius
Aviation Services. Long-term interest bearing
receivables consist mainly of an oil platform
and a receivable on SPP regarding companyrelated funds. Shares and securities include
the holdings in HDW, Nammo and Raufoss.
Receivables regarding deferred taxes are
reported net after deduction for deferred
tax in untaxed reserves and relate mainly
to unutilized tax deductions for provisions
made. Inventories are reported net after
deduction for utilized advance payments of
approximately SEK 3 bn. Just over half of
Other receivables consists of customer receivables and the remaining amount includes
VAT receivables and interim items. Other
provisions consist mainly of the termination
reserve for Regional Aircraft, provisions in
regard to the leasing portfolio and restructuring and project reserves in connection
with the acquisition of Celsius. Other liabilities include supplier and VAT liabilities,
and accrued costs.
Compared with the pro forma opening
balance, liquid funds less liabilities to credit
institutions decreased by SEK -1,876 m. to
SEK 3,942 m. (5,818). The decrease is net,
consisting mainly of nominal SEK 1,464 m.
in funds received from SPP and payment of
the insurance premium for the leasing portfolio of regional aircraft of SEK 528 m., payments regarding the phase-out of regional
aircraft manufacture of SEK 604 m., tax paid
of SEK 648 m., repurchase of property in
accordance with agreements SEK 400 m. and
paid dividend of SEK 266 m., in addition to
continued high utilization in the Gripen
program.
The Group’s net liquidity after deduction
for allocations to pensions amounted to SEK
415 m., compared with SEK 2,412 m. in pro
forma opening balance. Compared with the
closing balance in 1999, net liquidity has
decreased by SEK 7,983 m., mainly due to
the above mentioned causes, the acquisition
of shares in Celsius during the year for SEK
3.7 bn and the net liability taken over from
Celsius of SEK 1.8 bn.
Group equity/assets ratio amounted to 18.2
percent compared with 12.8 percent in the
pro forma opening balance and 16.8 percent
at the end of 1999. The interest coverage
ratio, excluding items affecting comparability,
was 4.47 (13.9). Shareholders’ equity amounted to SEK 5,670 m. (4,708), corresponding to
SEK 53.26 (44.23) per share.
Cash flow
The cash flow analysis and the following
comments apply to the period January 1
– December 31, 2000, as if Celsius had already
been included in the Group December 31, 1999.
Summary of cash flow statement
SEK m.
Cash flow from operating
activities
Income after financial items excl.
share in income of associated
companies
Depreciation and write-down
charged to income
Tax
activities before
changes in working capital
Working capital
Inventories etc.
Receivables
Advance payments from
customers, net
Other liabilities
Lease obligations
Provisions
Change in working capital
activities
Investments in intangible fixed
assets
Investments in shares etc.
Investments in tangible fixed assets
Investments in lease assets
Change in long-term receivables
Cash flow from investments
Operating cash flow
1)
2)
20001)
19992)
1,440
1,380
1,336
-246
-648
918
-255
-182
1,882
1,861
270
320
524
8
-1,012
-612
-717
-1,537
-3,288
-1,136
-554
-362
-929
-2,449
-1,406
-588
-59
43
-911
476
-51
-502
-1.908
-104
-1.285
-280
-83
-28
-1.780
-2.368
Pro forma 2000 as Celsius had been included in the Group
from the beginning of the year.
Pro forma 1999 as if Ericsson Saab Avionics had been
included in the Group from the beginning of the year.
Group cash flow from operating activities
continued to be good and amounted to SEK
1,882 m. (1,861). Working capital decreased as
a result of planned continued utilization
regarding the Gripen, which resulted in a
heavy decrease in advance payments from
customers. Provisions have decreased, mainly
as a result of the year’s deficit in Regional
Aircraft and Saab Aircraft Leasing totalling SEK
706 m. and payment of the insurance premium
for the leasing fleet of SEK 528 m. Lease obligations have decreased as a result of sales of aircraft from the leasing portfolio. The cash flow
from investments amounted to SEK -502 m.
(-1,780). In 1999, investments in shares in
Celsius AB accounted for SEK -1,267 m.
Operating cash flow amounted to SEK
-1,908 m. (-2,368), of which Regional Aircraft
SEK -593 m. (-404) and Saab Aircraft Leasing
SEK -715 m. (218). The outflow is mainly due
to phase-out of Regional Aircraft production,
payment of the insurance premium for the
leasing fleet, payment of tax, repurchase of
property, payment of dividend and continued
high utilization in the Gripen program.
Capital expenditures
The year’s capital expenditures in property,
plant and equipment, excluding lease assets,
amounted to SEK 1,077 m. (447, pro forma
652). Net investments including lease assets
and intangible fixed assets amounted to SEK
494 m. (467), including lease assets of SEK
-476 m. (83). Included in capital expenditures
in Corporate is a re-purchase of a building
according to agreement.
SEK m.
Saab Aerospace
& Services
Saab Ericsson Space
Corporate
Other operations
Saab Group
2000
85
137
Pro forma
1999
89
157
69
57
25
633
1, 006
40
31
1,077
77
71
40
128
562
48
42
652
In order to maintain a leading position in its
business areas, the Group allocates considerable resources to research and development,
where about 3,000 persons are employed.
Investments in research and development
53
are made primarily for customers in the
business areas Saab Systems and Electronics,
Saab Aerospace and Saab Bofors Dynamics.
The year’s expenditures for research and
development amounted to SEK 3,808 m.
(3,081, pro forma 4,462), of which SEK 2,948
m. (2,477, pro forma 3,604) relates to customer funded development.
SEK m.
Saab Aerospace
& Services
Saab Ericsson Space
Other operations
Saab Group
in percent of net sales
2000
1,136
1,513
Pro forma
1999
1,361
1,907
91
788
205
6
69
3,808
21.3
136
796
187
6
69
4,462
24.8
Internally funded development concerned
mainly the export version of the Gripen,
which was on a level with the previous year,
and further development of the Gamer
system and the new generation of laser
simulators, upgrading of the RBS 70, further
development of the AT4 munitions, technical
development in the area of space, mainly in
telecommunications, and the development of
a new generation of separation systems.
Personnel
At the end of 2000, the number of employees
in the Group was 15,453, compared with pro
forma 16,665 at the beginning of the year. At
year-end 1999 the number of employees was
8,031.
Number
Saab Aerospace
& Services
Saab Ericsson Space
Corporate
Other operations
Saab Group
2000
3 023
4 146
Pro
forma
1999 Change
3 081
-58
4 196
-50
2 794 2 705
89
1 884 2 565
-681
663
644
19
161
233
-72
12 671 13 424
-753
1 450 1 545
-95
1 332 1 696
-364
15 453 16 665 -1 212
FINANCIAL RISK MANAGEMENT
The Group’s operations are continuously
exposed to financial risks through fluctuations
in exchange rates, interest levels, credit and
liquidity. In addition, the complexity of the
financial structure is increased since operations to a large extent consist of long-term
projects. The overall policy for the business
units is that the financial risks associated
with operations should be minimized, i.e.
financial risk neutrality should be sought.
Exchange rate risks are defined as the risk
that fluctuations in exchange rates will have
a negative effect on Group income. Risk
neutrality on the exchange rate side is achieved through clauses in contracts or through
transactions in the currency market with
futures or options. Exchange rate risks in
bids at fixed prices in foreign currencies are
handled within the internal bank. Interest
risk is the risk of negative influence on
Group income as a result of fluctuations in
market rates. Risk neutrality regarding
interest risks is achieved by seeking similar
interest terms on the assets and liabilities
side of the balance sheet.
Saab Treasury is responsible for liquidity
management, internal banking and trading,
and external handling of interest and exchange rate risks. Operations are carried out
on the basis of a finance policy established
by the Board of Directors and are divided
into four portfolios: liquidity management,
internal banking, bidding portfolio and trading.
Liquidity management is handled
centrally within the framework of an investment policy determined by the Board of
Directors of Saab AB. The investment policy
is based on a benchmark, from which the
following deviations are permitted in regard
to duration and credit risk:
Government
Housing (min A)
Corporate (min A)
Duration
BenchMin.
Max.
mark
risk
risk
80% 100%
40%
20%
0%
40%
–
0%
20%
15 mths 0 mths 27 mths
The lowest permitted rating for investments is
single A, according to Moody’s and/or S & P
long term ratings. Credit risk calculation is
based on actual and anticipated credit risk,
according to recommendations from the Bank
of International Settlement (BIS). At December
31, 2000, the risks of the opposite parties
amounted to SEK 4,038 m. (4,646), of which
housing finance institutions SEK 766 m.
(3,623).
In order to achieve the desired duration
and return, interest options such as swaps
and futures are used. At close of books, the
duration was 13 months. During 2000, the
average net liquidity was SEK 5,400 m.
(11,600). The average return on external
investments was 4.72 percent (4.75).
In order to optimize the Group’s external
transactions and to monitor and overview
Group transactions, all transactions are made
through the internal bank. The internal bank
takes no risks and all transactions made
against internal companies are made simultaneously against external parties.
The Board of Saab AB has issued a risk
mandate for trading in currencies and money
market instruments of SEK 20 m., expressed
according to Value at Risk (VaR). VaR is a
probability-based method, based on historic
exchange rate fluctuations and correlations,
and is established practice in the financial
field. The method measures the maximum
loss during a certain number of days with a
certain probability. Within Saab is used three
days and 99 percent probability. Through
VaR, the risks for different types of assets can
be aggregated to a single measure of risk. If
the accumulated result during the year is
negative, the mandate is reduced by the
corresponding amount. In 2000, trading
income was SEK 45 m. (12). The average
utilized risk mandate (VaR) during the year
amounted to SEK 6.6 m. (3.6).
During the year, the bidding portfolio was
added as a result of an increasing trend
towards fixed price bids in foreign currencies.
The purpose of the portfolio is to lower the
group’s currency risk during the bidding
period and to reduce the costs of hedging. The
operating units can sign bidding insurance
with Saab Treasury when submitting a fixed
price bid. Saab Treasury handles the currency
risk by combining forward agreements and
options, based on the expected probability
for the deal. The operation is controlled
by a policy and a risk measure based on
probability-weighted VaR as above.
Saab Treasury’s holdings of option, futures
and other securities per December 31, 2000
were in nominal terms SEK 15,299 m. (15,695),
distributed as follows:
54
Nominal amount in SEK m.
Interest swaps, SEK
Interest swaps, foreign
Futures, SEK
Currency options
Currency futures
Total
2000
2,250
3,340
4,165
248
5,296
15,299
1999
3,750
4,056
4,750
20
3,119
15,695
Futures and interest swaps in SEK are used
for risk management in the liquidity portfolio, while interest swaps in foreign currencies
are used for interest risk management of the
leasing portfolio. Other instruments are
futures and options for the USD share of
provisions for regional aircraft and firm
orders for other business in the Group.
Risk management – insurance
Risk management has the task of identifying,
assessing and limiting non-financial risks,
preventing damage and undertaking responsibility for the Group’s central insurance
purchasing. This purchasing takes place
both on the open market and in the Group’s
own insurance company, Lansen Försäkringsaktiebolag.
All insurance signed in the Group’s own
company is reinsured in the external market
on an Excess of Loss basis in order to limit
the company’s exposure for each claim.
During the year, financial risk insurance
aimed at safeguarding the Saab Group against
risks attributable to the leasing portfolio of
regional aircraft was signed in Lansen
Försäkringsaktiebolag. Lansen has reinsurance through a group of very well-reputed
insurance companies throughout the world.
In total, the Saab Group’s insurance premiums during the year amounted to SEK 69.2 m.
(27.5), of which SEK 45.6 m. (18.3) was signed
in the Group’s own insurance company.
Customer finance
Customer finance provides an important tool
for marketing the company’s products.
Export customers are setting increasing
demands on finance. Normally, Saab acts
together with various banks and guarantee
institutions in seeking different solutions to
meet the customer’s needs. This is done
primarily through the bank giving the buyer
credit or through providing supplier credit.
In order to limit risk exposure, the risks are
sold on the market to banks and government
guarantee institutions, such as the Export
Credits Guarantee Board in Sweden.
THE WORK OF THE BOARD
OF DIRECTORS
The Board of Saab consists of nine members
elected at the Annual General Meeting
without deputies and three members with
deputies appointed by the employee
organizations. According to the shareholders’
agreement between Investor and BAE
SYSTEMS, the parties each nominate three
members to the Board. In addition to the
constitutive meeting, the Board has held
six ordinary meetings during 2000.
At the Annual General Meeting on April 10,
Anders Scharp, Marcus Wallenberg,
Erik Belfrage, Tony Rice, George Rose,
Björn Svedberg and Bengt Halse were
re-elected. Peter Nygårds and Michael Rouse
were elected new member of the Board to
replace Lars-Erik Englund and Kevin Smith,
who had declined re-election.
During the year, the Board has given
special attention to the following issues,
among others:
• The acquisition and integration of Celsius
• The insurance solution for the leasing
portfolio of Saab 340 and Saab 2000 aircraft
• Divestment of commercial spin-off
operations
• Exports of the Gripen
• Changes in the Swedish defense
• Development in the European aerospace
industry
• Business development of the Group
The work of the Board follows the working
instructions that it has set up for its work.
The working instructions and the special
President’s Instruction regulate the distribution of work between the Board and the
President. According to the instruction of
work approved by the Board, normally six
ordinary meetings are held each year, in
addition to the constitutive meeting. In
addition, the Board may meet whenever
circumstances so demand. According to the
working instructions, the company’s auditor
shall be present at one meeting each year in
connection with approval of the company’s
annual financial statements. The President’s
Instruction sets out his duties and authorizations and includes policies for investment,
finance and reporting. With one exception,
the Board has declined from appointing
subcommittees. According to a decision by the
constitutive Board meeting, a subcommittee
consisting of Anders Scharp, Marcus
Wallenberg and George Rose shall handle
issues concerning remuneration to the
President and certain leading company
officials.
CONSEQUENCES OF THE EMU
FOR THE GROUP EXPOSURE
The EMU has led to major structural
changes, particularly in the financial sphere.
Within the EMU, the exchange rate risk for
member countries have been eliminated,
thereby making it unnecessary to manage
exchange rate risks in connection with investments, offers and transactions. In the case
of the Saab Group, the exchange rate risk has
however remained, since the Swedish krona
is floating against the Euro and other currencies. For the Saab Group, the introduction of
the Euro has reduced exposure to a smaller
number of currencies. The Group’s exposure
to the Euro is relatively low. The international aerospace industry will continue to be
dominated by trade in USD, which is the
principal currency for the Group.
The Group’s EMU policy means that new
contracts are written in Euros instead of
national currencies. The introduction of the
Euro, however, has no effect on the Group’s
preferences regarding invoicing currencies
since the USD and SEK are the Group’s
principal currencies for this purpose. The
Saab Group has successively replaced transactions in national currencies with Euro. For
Saab AB and its Swedish subsidiaries, the
accounting currency will be the SEK as long
as Sweden remains outside the EMU.
ENVIRONMENT
Parent company, Saab AB
Saab AB carries on industrial operations that
are subject to licensing according to the
Environment Act. Such operations concern
the manufacture of aircraft and aircraft components in Linköping and the aspects covered
include surface treatment processes, handling
of chemical substances, airport operation and
size of the manufacturing facilities. The environmental impact of the operations subject to
licensing arises primarily from emissions of
organic solvents to the atmosphere and of
metals and deicing agents to water, the generation of industrial wastes and the creation of
noise causing disturbance to the surroundings. The manufacturing operations are
dominated by the category that is subject to
licensing. The Licensing Board granted the
55
license for aircraft manufacture for Environmental Protection in 1990. Saab AB has been
granted exemption from the Chemicals
Inspectorate for using trichloroethylene
until 2002.
Group
The operations carried on by Saab Bofors
Dynamics AB, Saab Ericsson Space AB and
CSM Materialteknik AB in Linköping are not
subject to licensing or notification according
to the Environment Act, but are covered by
the license granted in 1990 for aircraft manufacture and the collective operations of Saab
AB at Råberga-Tannefors in Linköping. The
operations of Saab Aircraft AB in Linköping
are subject to licensing according to the
Environment Act and are also covered by the
license relating to aircraft manufacture.
Saab Bofors Dynamics AB, Nexplo Bofors
AB and Bofors Testcenter AB carry on operations in Karlskoga which are subject to licensing according to the Environment Act. Saab
Bofors Dynamics AB also carries on such
operations in Eskilstuna and Motala.
AerotechTelub AB carries on similar operations in Arboga and Linköping. In addition,
SaabTech Electronics AB, Kockums Industrier
AB and Applied Composites AB carry on
operations subject to licensing in Järfälla,
Malmö and Linköping.
The environmental influence from subsidiaries subject to licensing consists primarily
of emissions of organic solvents to the
atmosphere, emissions of metals, etc. to soil
and water, generation of industrial wastes
and creation of noise causing disturbance to
the surroundings.
The group has operations subject to notification in accordance with the Environment
Act at nine Swedish subsidiaries: Saab
Ericsson Space AB (Gothenburg), Saab
Marine Electronics AB (Gothenburg), Saab
Aircraft AB (Arlanda), Saab Training Systems
AB (Huskvarna and Jönköping), Ericsson
Saab Avionics AB (Jönköping and Kista),
AerotechTelub AB (Växjö), Saab Aviocomp
AB (Linköping), Telub AB (Östersund) and
Applied Composites AB (Ljungby). The
environmental influence from the operations
subject to notification is very limited.
PARENT COMPANY
Sales of the parent company amounted to
SEK 3,921 m. (4,933). Operating income
amounted to SEK 838 m. (626).
Net financial income and expenses amounted
to SEK 843 m. (1,147) and income after
financial income and expenses was
SEK 1,681 m. (1,773). Of the financial net
SEK 743 m. (648) are group contributions
and dividends. After appropriations of
SEK -148 m. (-45) and paid and deferred
tax of SEK -305 m. (-321), net income for
the year amounted to SEK 1,228 m. (1,407).
PROPOSED DISPOSITION
OF EARNINGS
As shown in the consolidated balance sheet,
unappropriated earnings of the Group
amount to SEK 2,734 m. (1,445), of which
SEK 1,038 m. (939) is income for the year.
Allocations to restricted reserves are required
in the parent company for SEK 0 (21) m.
The Board of Directors and the President
propose that the unappropriated earnings at
the disposal of the Annual General Meeting
in the Parent Company, amounting to:
SEK m.
Unappropriated earnings carried forward
Income for the year
Total
1,497
1,228
2,725
Be disposed as follows:
Dividend, SEK 3.00 per share
To be retained in the business
Total
319
2,406
2,725
After the proposed disposition, shareholders’
equity in the parent Company will be as
follows:
SEK m.
Capital stock
Premium reserve
Revaluation reserve
Legal reserve
Unappropriated earnings
Total
1,703
10
500
341
2,406
4,960
The company’s policy is to issue a dividend
of 20-40 percent of the Group’s net income
for the year. The Board of Directors and the
President propose that SEK 319 (266) m., or
SEK 3.00 (2.50) per share, corresponding to
31 (28) percent of the Group’s net income for
the year be issued as dividend. Equity/assets
ratio of the Saab Group, excluding Regional
Aircraft and Saab Aircraft Leasing, is currently
22.5 (29.7) percent and after the proposed
disposition of earnings equity/assets ratio
will be 21.4 (28.5) percent.
REPURCHASE OF OWN SHARES
The Board of Directors will propose the
Annual General Meeting authorization for
the Board to decide on repurchase of the
company’s shares up to 10 percent of the
total shares outstanding. The purpose of the
empowerment is to provide the Board with
increased scope for action in working with
56
the company’s capital structure and to enable
acquisitions to be made where considered
appropriate. The mandate is proposed to be
valid until the next Annual General Meeting.
Such repurchases may be effected over the
stock exchange or through offerings to shareholders. It is also proposed that the Board’s
mandate include the possibility to transfer
repurchased shares in accordance with current legislation.
For the income and financial position of
the Group and the Parent Company see
the following income statements and
balance sheets, including notes with
comments.
Income statements
Group
Parent Company
Note
2000
Pro forma
1999
1999
2000
1999
3
17,840
-13,427
18,018
-13,882
9,053
-6,363
3,921
-2,712
4,933
-3,700
Gross margin
4,413
4,136
2,690
1,209
1,233
Marketing expenses
Administrative expenses
Research and development costs
Other operating income
Other operating expenses
Share in income of assocated companies
-1,578
-1,251
-860
285
613
-97
8
-1,390
-1,309
-858
255
347
-65
9
-798
-550
-604
255
181
-71
1
-296
-400
-311
512
171
-47
–
-371
-320
-292
255
136
-15
–
9
1,533
1,125
1,104
838
626
10
11
12
25
225
-335
9
242
-260
4
356
-87
908
29
-94
965
271
-89
1,448
1,116
1,377
1,681
1,773
SEK million
Sales
Cost of goods sold
4
5
6
Operating income
Result from financial investments
Result from other securities and receivables
accounted for as fixed assets
Other interest income and similar profit/loss items
Interest expenses and similar profit/loss items
Appropriations
13
Income before tax
Taxes
Minority interest
14
Net income for the year
–
–
–
-148
-45
1,448
1,116
1,377
1,533
1,728
-333
-77
-352
-29
-391
-47
-305
–
-321
–
1,038
735
939
1,228
1,407
SALES AND INCOME PER QUARTER
Pro forma
1999
2000
SEK million
Sales
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
4,187
4,150
3,976
5,527
3,896
4,970
3,533
5,619
Operating income
Operating margin, %
247
5.9
409
9.9
220
5.5
657
11.9
192
4.9
406
8.2
127
3.6
400
7.1
Net financial income
8
255
-35
374
-40
180
-18
639
-28
164
30
436
-13
114
2
402
Net income
161
1.51
254
2.39
97
0.91
526
4.94
103
0.97
290
2.72
78
0.73
264
2.48
1)
1)
Number of shares 106,459,675 as per December 31, 2000.
57
Balance sheet
Group
SEK million
Parent Company
Note
2000-12-31
Pro forma
1999-12-31
15
16
177
1,442
308
1,516
287
88
–
–
–
–
1,619
1,824
375
–
–
3,321
1,001
366
6,502
2,799
1,034
454
8,963
1,711
693
198
8,236
1,223
261
106
–
1,246
293
118
–
1999-12-31
2000-12-31
1999-12-31
ASSETS
Fixed assets
Intangible fixed assets
Other intangible fixed assets
Goodwill
Tangible fixed assets
Land and buildings
Plant and machinery
Equipment, tools, fixtures and fittings
Lease assets
Construction in progress and advance
payment for tangible fixed assets
Financial fixed assets
Participations in Group companies
Receivables from Group companies
Participations in associated companies
Other securities held as fixed assets
Other long-term receivables, interest bearing
Other long-term receivables, interest free
17
18
19
20
21
22
23
24
25
26
27
27
24
52
13
5
9
11,214
13,302
10,851
1,595
1,666
–
–
779
171
1,440
1,345
976
–
–
839
164
1,093
1,180
751
–
–
12
1,315
507
–
752
8,167
24
3
47
1,143
424
–
3,246
1,019
5
1,298
1,238
–
–
4,711
4,027
2,586
9,808
6,806
17,544
19,153
13,812
11,403
8,472
1,924
3,383
1,187
339
-3,149
2,015
3,920
875
309
-3,165
680
2,584
932
111
-2,590
203
1,929
5
45
-1,847
294
1,746
474
47
-1,787
3,684
3,954
1,717
335
774
2,974
–
196
606
948
985
2,895
–
442
231
1,733
528
1,034
–
263
–
192
270
137
7,673
190
143
123
199
240
916
247
–
66
90
5,709
5,829
1,759
8,465
1,559
3,121
1,061
6,094
1,611
9,766
1,025
3,082
372
9,736
483
Total current assets
13,575
17,488
14,267
12,254
12,552
Total assets
31,119
36,641
28,079
23,657
21,024
Total fixed asstes
Current assets
Inventories etc.
Raw materials and consumables
Work in progress
Finished products and goods for resale
Advance payments to suppliers
Less utilized advance payments from customers
Current receivables
Accounts receivable
Receivables from Group companies
Receivables from associated companies
Other receivables, interest bearing
Other receivables, interest free
Prepaid expenses and accrued income
Short-term investments
Cash and bank
28
29
Assets pledged
Group
SEK million
Assets pledged
For own liabilities and provisions
Property mortgages
Chattel mortgages
Lease assets
Other long-term receivables
Accrued income
Bonds and securities
Other assets
Note
1999-12-31
2000-12-31
1999-12-31
419
2,187
2,025
774
59
2,685
676
394
2,188
2,255
616
61
5,191
16
388
2,101
–
–
–
2,600
–
388
2,101
–
–
–
5,191
–
8,825
10,721
5,089
7,680
40
Total assets pledged
1)
Parent Company
2000-12-31
In addition to the above lease assets pledged, the balance sheet contains assets reported
in accordance with finance lease contracts. See note 20.
58
Balance sheet
SEK million
Note
2000-12-31
Group
Pro forma
1999-12-31
Parent Company
1999-12-31
2000-12-31
1999-12-31
1,703
1,684
–
–
–
1,703
1,560
–
–
–
1,703
1,560
–
–
–
1,703
–
10
500
341
1,703
–
17
500
320
3,387
3,263
3,263
2,554
2,540
1,245
1,038
702
735
506
939
1,497
1,228
481
1,407
2,283
1,437
1,445
2,725
1,888
5,670
4,700
4,708
5,279
4,428
821
752
206
–
–
–
–
–
–
–
–
451
234
478
95
–
–
–
685
573
3,527
3,821
3,406
6,606
1,995
5,042
1,632
1,538
1,583
2,378
7,348
10,012
7,037
3,170
3,961
996
–
228
3,637
568
2,406
–
217
4,239
975
101
–
217
4,197
947
57
384
244
–
–
60
519
237
–
–
5,429
7,837
5,462
685
816
967
3,619
1,254
–
–
427
574
279
4,731
675
4,631
1,383
–
195
492
886
394
4,684
80
4,055
665
–
10
462
575
394
4,425
35
1,620
277
9,214
–
241
78
–
2,373
48
3,247
260
4,289
10
394
389
–
2,609
EQUITY AND LIABILITIES
Equity
30
Restricted equity
Capital stock
(106,459,675 shares with a par value of SEK 16 each)
Restricted reserves
Share premium reserve
Revaluation reserve
Legal reserve
Unrestricted equity
Profit or loss brought forward
Untaxed reserves
Accumulated excess depreciation
Tax allocation reserve
Provisions
Provisions for pensions and
similar commitments
Other provisions
Long-term liabilities
Other liabilities to credit institutions
Liabilities to Group companies
Lease obligations
Other long-term liabilities
Current liabilities
Liabilities to credit institutions
Advance payments from customers
Accounts payable
Liabilities to Group companies
Liabilities to associated companies
Income tax liability
Other liabilities
Lease obligations
Accrued expenses and deferred income
31
32
33
34
35
36
36
37
38
39
Total equity and liabilities
11,851
13,340
10,666
13,838
11,246
31,119
36,641
28,079
23,657
21,024
Contingent liabilities
SEK million
2000-12-31
Group
1999-12-31
Parent Company
2000-12-31
1999-12-31
Contingent liabilities
Guarantees to the insurance company Pensionsgaranti (FPG)
Sureties for Group companies
Sureties for others 1)
Sureties for associated companies
Less amount shown as liability
in the balance sheet 2)
271
–
7,977
209
36
–
5,194
–
-2,851
-3,034
–
–
Total contingent liabilities
5,606
2,196
7,176
5,748
1)
2)
52
4,375
2,631
118
Of this amount, USD 490 m. (559) comprises guarantees for sureties of lease agreements related to 162 (162) Saab 340 and Saab 2000 aircraft.
Of the above sureties in the parent company, 42 aircraft (41) equivalent to USD 166 m. (207) have been accounted for as lease assets in the Group. In the balance sheet,
USD 162 m. (183) has been accounted for as liability related to a provision for future deficits according to valid leasing contracts.
59
28
3,154
2,566
–
Statement of cash flows
Group
1)
Parent Company
2)
Pro forma
2000
Pro forma
1999
2000
1999
Cash flows from operating activities
Operating income
1,533
1,104
838
626
Depreciation and write-down
Dividend from associated companies
1,336
-246
-8
918
-255
-1
161
-246
–
165
-255
–
2,615
1,766
753
536
250
–
-335
-648
360
4
-87
-182
937
–
-94
-167
1,232
4
-89
-111
Cash flow from operating activities before
changes in working capital
1,882
1,861
1,429
1,572
Increase (–)/Decrease (+) in
Increase (–)/Decrease (+) in
Increase (+)/Decrease (–) in
270
320
-1,012
-627
15
-717
-1,537
524
8
-1,136
-506
-48
-362
-929
439
-6
-1,627
-693
–
–
-594
419
20
-996
619
–
–
-779
-3,288
-2,449
-2,481
-717
Cash flow from operating activities
-1,406
-588
-1,052
855
Investments in intangible fixed assets
Investments in tangible fixed assets
Investments in lease assets
Investments in financial fixed assets
Increase in long-term receivables
-59
-911
476
43
-51
-104
-280
-83
-1,285
-28
–
-90
–
-3,668
–
–
-115
–
-2,151
–
SEK million
Financial income
Dividend from associated companies
Financial expenses
Tax paid
inventories etc.
current receivables
advance payments
current liabilities
other long-term liabilities
lease obligations
provisions
Operating cash flow
-502
-1,780
-3,758
-2,266
-1,908
-2,368
-4,810
-1,411
-266
-8
-13
198
–
–
-213
11
-7
-51
–
–
-266
–
–
–
-36
-153
-213
–
–
–
-37
-123
Other items
Dividend to shareholders
Deferred tax
Translation differences
Change in equity
Group contribution given
Total
-89
-260
-455
-373
Decrease in net liquidity
-1,997
-2,628
-5,265
-1,784
Financing
Raised loans
Amortization of liabilities
Increase in long-term interest-bearing receivables
Increase in short-term interest-bearing receivables
Increase in provisions for pensions and convertible debenture loan
–
-1,118
-165
-375
132
119
–
–
–
30
–
-19
-424
-143
58
97
–
–
–
9
Cash flow from financing
-1,526
149
-528
106
Cash flow for the year
Cash and bank, short-term investments, receivables
from Group companies at the beginning of the year
Cash and bank, short-term investments, receivables
from Group companies at year-end
-3,523
-2,479
-5,793
-1,678
7,705
13,270
7,346
9,024
4,182
10,791
1,553
7,346
1)
Proforma 2000 as Celsius had been included in the Group from the beginning of the year.
2)
Proforma 1999 as if Ericsson Saab Avionics had been included in the Group from the beginning of the year.
60
Notes
With accounting principles and comments
on the financial statements
Amounts in SEK m. unless otherwise stated
Pro forma financial statements
Celsius is included in the Saab Group as from
January 1, 2000. The pro forma figures for the
whole year 1999 and the quarters of 1999,
refers to the Saab Group including Celsius,
as if Celsius had already been included in the
Group from January 1, 1999. In connection
with major restructurings during the year, the
pro forma figures have been adjusted.
The pro forma figures for the years 1995
and 1996 refers to changed accounting
principles regarding lease contracts and
Saab Aircraft Leasing.
General accounting principles
The company follows the recommendations
issued by the Swedish Financial Accounting
Standards Council (Redovisningsrådet) and
the recommendations, which will apply from
2001. The recommendations of the Swedish
Financial Accounting Standards Council
comply in all material respects with the
principles of the International Accounting
Standards Committee (IASC). In comparison
to the previous year, the accounting
principles are unchanged.
In conformance with the legislation on
annual accounts, the income statement is
classified according to function, pursuant to
internal reporting.
The functions are as follows: Cost of goods
sold comprises costs for goods handling
and manufacturing, including salaries and
material costs, purchased services and costs
of premises, and depreciation on fixed assets.
Administrative expenses relate to costs for the
Board, company management and corporate
staff functions. Marketing expenses comprise
costs for the company’s own sales organization, including sales subsidiaries, advertising
and exhibitions. Research and development
costs are reported separately and comprise
costs for new and further development of
products, see below. Other operating income
and expenses relate to secondary activities,
exchange rate differences on items of an
operating character and capital gains/losses
from sales of tangible fixed assets. Utilization
of provision for covering the loss in Saab Aircraft (Customer Support) is included in other
operating income. Also included is income
from Saab Aircraft Leasing, which however is
zero for the years 1999 and 2000 after utilization of provision, and at group level also capital
gains/losses from divestment of subsidiaries.
1999, the financial statements of the Parent
Company, Saab AB, included the Swedish
subsidiary Saab Aircraft AB, which operations were conducted on commission on
behalf of Saab AB. This agreement is now
cancelled.
Consolidated accounts statements
The consolidated accounts comprise the
Parent Company and all subsidiaries and
associated companies in Sweden and abroad.
Subsidiaries are companies in which the
Parent Company directly or indirectly owns
more than 50 percent of the voting rights of the
shares, and companies where the Parent Company owns shares and is entitled to appoint or
dismiss more than half the members of the
board or where the Parent Company otherwise
has a decisive influence and a significant share
in the income generated from their operations.
Associated companies are companies in which
the Parent Company directly or indirectly has
a long-term ownership interest and where the
voting rights are between 20 and 50 percent.
The consolidated statements are prepared
in accordance with the purchase method of
accounting. This means that a subsidiary’s
assets and liabilities are accounted for at
market value according to an analysis of the
acquisition. If the acquisition value of the
shares in the subsidiary exceeds the estimated
market value of the company’s net assets,
after analysis, the difference is considered
Group goodwill. Depending on the degree
of restructuring required in the newly
pur-chased company, provision is made
in the acquisition analysis for anticipated
costs to be allocated to a structural reserve.
Associated companies are accounted for in
accordance with the equity accounting method. This means that the book value of the
shares and participations in associated companies is valued in the consolidated balance sheet
at the Group’s share in the equity of the associated companies after adjusting for the Group’s
share of surplus or deficit value, respectively.
Thus, consolidated income includes only
Saab’s share in the income of the associated
companies, provided this does not result in a
negative book value of the shares. The holding
in HDW is reported in the balance sheet as a
financial asset at acquisition cost increased by
accrued income. The income is reported in the
income statement as financial income.
Minority interest comprises the minority
share in net income and shareholders’ equity.
Companies acquired during the year are
included in consolidated income for the
period following their acquisition. Income
of companies sold during the year is not
included in consolidated income, instead the
result is included in the capital gain or loss.
Unrealized intra-Group profits and
internal transactions are eliminated. Prices
of internal Group supplies of goods are
determined by applying commercial
principles and market prices.
Foreign subsidiaries and
associated companies
Integrated foreign operations’, subsidiaries’
and associated companies’ financial state-
61
ments are translated to Swedish kronor
using the monetary method. The financial
statements for the independent foreign
subsidiaries within Saab Aircraft Leasing,
Saab Ericsson Space, Celsius Aviation
Services and Celsius Pacific are translated to
Swedish kronor using the current method.
Under the monetary method, monetary
items are translated at the year-end rate,
while non-monetary items are translated
at the rate in effect on the acquisition date.
Inventories, property, plant and equipment
and shareholders’ equity are translated at
the acquisition date rate and other assets
and liabilities at year-end rate. With the
exception of consumption of goods and
depreciation of property, plant and equipment,
which are translated at the acquisition date
rate, income and expenses are translated at
a weighted average exchange rate for the
year. The translation difference on monetary
assets and liabilities is included in net income
for the year and is reported in the income
statement as follows. The portion of the
translation difference attributable to operating
items, primarily trade accounts receivable
and payable, is included in operating
income. The portion of the translation
difference attributable to interest-bearing
items is included in financial income and
expenses.
With the current rate method, assets and
liabilities are translated at the year-end
exchange rate, while income and expenses
are translated at the average exchange rate
for the year. The translation difference, that
arises in part when translating the net assets
of foreign companies at a different rate at
the beginning of the year than at year-end
and in part when net income is translated
at other than the year-end rate, is reported
directly in shareholders’ equity in the
balance sheet.
Sales and income
Sales and income are reported at delivery of
products, and services at the time the majority
of risks and rights are transferred to the
purchaser. Sales include the sale value less
VAT (Value-Added Tax), specific sales taxes,
returns and trade discounts.
For long-term development contracts,
revenue is recognized in pace with completion
according to the Percentage of completion
method. From the calculated total revenue for
a project, including interest on advances, a
deduction is made during the respective
period in an amount corresponding to the
incurred costs as a proportion of the calculated total costs at the end of the period. In
lengthy delivery contracts for military aircraft,
revenue is recognized in pace with deliveries.
Changes in anticipated total revenues and
costs per contract are reported in the same
period as they are noticed.
Gross margin
For orders whose manufacturing cost is
financed to a significant extent by advances
from customers, the effect of advance-payment financing on interest is reported in
gross margin. See Note 11.
Depreciation principles for fixed assets
Depreciation according to plan is based on
the historical cost and estimated useful life
of an asset. Write-down is applied in the case
of a permanent fall in value. Depreciation
according to plan, including depreciation on
goodwill, is distributed by function, according to the way the asset is used.
The following depreciation plan is used:
Intangible fixed assets
Capitalized expenditure on R&D, etc.
Computer software, non-standard
Goodwill and other intangible assets
Tangible assets
Property
Aircraft
Revaluation of property
Land improvements
Machine and other technical
installations
Computers, equipment, tools
and installations
5 years
5 years
5–20 years
20–25 years
25 years
20 years
20 years
5–10 years
3–10 years
The difference between the above depreciation and fiscal depreciation is, in legal entities,
reported as accumulated excess depreciation,
which is included in untaxed reserves.
The difference between the above depreciation
and fiscal depreciation is, in legal entities,
reported as accumulated excess depreciation,
which is included in untaxed reserves.
Research and development expenditures
The Group’s definition of expenditures for
research and development conforms with
that used by Statistics Sweden.
Expenditures on internal research and
development are normally booked as costs
when they are incurred. No development
costs carried forward remain on the Group’s
balance sheet.
For the development and manufacture of
the Saab 340 and Saab 2000 commercial aircraft, Saab AB and the Swedish Government
have reached special agreements whereby
the Government participates in the projects
on commercial terms. Saab has received a
total of SEK 1,476 m. for the years 1980–94.
The amounts received have been reported as
income at the same rate as expenditures
were incurred for the projects. According to
the agreements, compensation for the
Government’s risk-taking was to be paid by
Saab in the form of royalties based on the
projects’ revenues and income. In a supplementary agreement between Saab and the
Swedish Government signed in December
1997, payment to the Government will instead
be based on income from the customer
support operation after production has been
terminated. Income of the year has not
resulted in any payment according to the
agreement during 2000.
Guarantee costs
Calculated costs for product guarantees are
accounted for in connection with sales of a
product.
Recommendation No. 4 of the Swedish
implies that the effects on income of special
events and transactions of significance are
specified within the respective income concept.
Examples of such events and transactions are
capital gains/losses when divesting business
areas and major fixed assets, write-downs
and restructuring costs. As item affecting
comparability is reported the reverse of part
of the restructuring reserve for closing the
production of regional aircraft and for the
year 2000 also pension re-funds received from
SPP and provision for certain development
projects from the former Celsius Group.
Hedging commercial flows
Exchange differences on forward contracts
related to contracted future currency flows
are reported in the same period as the
underlying flow.
Non-contracted flows concerning provisions
for restructuring costs where settlement is
made in foreign currency are hedged so
that no exchange rate difference occurs
upon settlement.
Valuation principles, etc.
Assets, provisions and liabilities have been
valued at the purchase value unless otherwise
stated in the following.
Inventories
The inventory is valued at the lower of
acquisition value according to the first in,
first out principle and actual value. For
internally produced semi-manufactured
and finished goods, the acquisition value
consists of direct manufacturing costs
and a reasonable markup for indirect
manufacturing costs.
Inventories include advances to suppliers.
From 1999, inventories are reported net,
less customer advances, which means that
advances from customers in each project are
set off against incurred costs.
Receivables
After individual valuation, receivables have
been valued in the amounts in which they
are expected to be received.
62
During the autumn 1998, a convertible
debenture loan to the Group’s employees was
issued. The loan bears interest below market
interest, which means that the loan is a liability
with implicit interest. The convertible debenture loan has been accounted for in accordance
with Recommendation No. 3 of the Swedish
Financial Accounting Standards Council.
Leasing
implies a classification of the lease contracts
into finance and operating categories.
A finance lease implies that the lessee,
even if he does not receive the legal rights
of ownership of an object, in all significant
respects enjoys the financial rewards and
accepts the risks associated with the object.
Objects possessed in accordance with a
finance lease are reported in the lessee’s
balance sheet as a fixed asset and the commitment to pay leasing charges in the future is
reported as a liability. The lessor’s balance
sheet reports his net investment in the lease
contract, i.e. the present value of future leasing charges, as a receivable.
In an operating lease, the financial
rewards and risks linked with ownership
mainly affect the lessor, who reports the
object as a fixed asset.
For anticipated or real deficits according
to lease contracts related to aircraft finance
operation carried on by Saab Aircraft Leasing,
provisions are made with the discounted
present value of the calculated deficit.
Since the leasing portfolio is regarded as a
financial asset, which in principle must be
divestable at a given point in time, a market
valuation of the lease contracts is also made.
Surpluses and deficits between lease
contracts in the portfolio are thereby offset.
Other rented assets, for example personal
computers, are capitalized and accounted for
as assets (lease assets) and the commitment
to pay leasing charges in the future is reported as a liability (lease obligations) if the
leases transfer virtually all benefits and risks
to the Group. Rentals for other leases are
charged against earnings over the lease term.
Receivables and liabilities
in foreign currency
Receivables and liabilities in foreign currency
have been valued at the year-end exchange
rate. Exchange rate differences in short-term
receivables and liabilities are included in
operating income, while differences in
financial receivables and liabilities are
reported among financial items.
Receivables and liabilities hedged by
forward contracts are valued at the current
forward rate.
Short-term investments
In accordance with the Annual Accounts Act,
short-term investments are valued at the
lower of acquisition value and actual value.
Taxes
Taxes as reported in the income statement,
consists of paid tax and deferred tax.
Deferred tax represents the difference
between fiscal valuation and the valuation
in the accounts of assets and liabilities, but
only if the difference is of a temporary
nature. Deferred tax is also calculated on
unutilized tax losses to be carried forward.
If the calculations result in a deferred tax
receivable, this is only accounted for as an
asset if it in all probability, is expected to be
realized.
Deferred tax is calculated in accordance
with the latest decided tax rate.
For income taxes the Company applies
Financial Accounting Standards Council.
The recommendation has, however, not been
fully applied in legal entities regarding
appropriations.
Exchange rates for SEK used in the financial statements
Country
Currency
Australia
AUD
Austria
ATS
Belgium
BEF
Canada
CAD
Denmark
DKK
Euro
EUR
Finland
FIM
France
FRF
Germany
DEM
Italy
ITL
Japan
JPY
Malaysia
MYR
The Netherlands
NLG
Norway
NOK
Singapore
SGD
Spain
ESP
UK
GBP
USA
USD
Year-end rate
2000
1999
5.28
5.56
64.37
62.23
21.96
21.23
6.36
5.87
118.70
115.05
8.86
8.56
148.96
144.03
135.02
130.55
452.85
437.84
0.46
0.44
8.32
8.34
2.51
2.24
401.91
388.59
107.15
106.05
5.50
5.12
5.32
5.15
14.22
13.80
9.54
8.52
1
100
100
1
100
1
100
100
100
100
100
1
100
100
1
100
1
1
Average
2000
5.32
61.25
20.89
6.15
113.08
8.43
141.75
128.49
430.93
0.44
8.50
2.40
382.46
103.90
5.29
5.07
13.84
9.13
N OT E 1 – EMPLOYEES AND PERSONNEL COSTS
rate
1999
5.33
64.04
21.85
5.56
118.52
8.81
148.22
134.35
450.59
0.46
7.29
2.18
399.91
106.01
4.87
5.30
13.37
8.26
Untaxed reserves
Tax regulations in Sweden and certain other
countries permit allocations to special
reserves. In this manner, companies, within
certain limits, can apportion and retain
earnings in their business without subjecting
them to immediate taxation.
Untaxed reserves are not subject to
taxation until they are utilized. However, in
the event the business should incur a loss,
the reserves, sometimes within certain limits,
may be utilized to cover such a loss without
the payment of tax. The total value of the
untaxed reserves can therefore be considered
risk capital, because any losses to a significant extent can be covered through use
of the reserves.
In the Group’s balance sheet, untaxed
reserves are divided into shareholders’ equity
and the deferred tax liability. In the income
statement, tax attributable to the year’s change
in untaxed reserves is reported as deferred tax.
Transaction with related parties
Transaction with related parties, are done by
applying commercial principles.
Group information
Of the Parent Company’s sales, 4 percent (4)
concerned sales to companies within the Saab
Group, while 21 percent (25) of the Parent
Company’s purchases were from subsidiaries.
Note 1, cont.
Average no. of employees
of whom
2000
men
1999
of whom
men
Parent Company
Sweden
France
UK
South Africa
Austria
4,187
1
1
1
1
81%
100%
100%
100%
100%
4,752
4
2
1
1
84%
100%
100%
100%
100%
Total in the Parent Company
4,191
81%
4,760
84%
Bahrain
Thailand
Chile
France
South Korea
Malaysia
2000
4
3
2
1
1
–
of whom
men
75%
100%
50%
100%
100%
–
1999
3
1
2
–
1
1
Total in subsidiaries
11,165
80%
3,332
83%
Group total
15,356
81%
8,092
83%
Salaries, other emoluments and social security expenses
2000
Average no. of employees
Subsidiaries
Sweden
USA
Australia
Finland
Austria
Netherlands
Singapore
Denmark
Germany
UK
India
Norway
United Arab Emirates
Russia
Canada
Japan
South Africa
of whom
2000
men
1999
of whom
men
9,146
815
479
210
122
106
79
65
38
29
19
19
6
6
5
5
5
3,008
102
9
–
120
–
15
–
12
8
1
31
–
10
4
1
3
83%
75%
67%
–
83%
–
73%
–
92%
90%
100%
87%
–
90%
100%
100%
50%
80%
84%
90%
70%
80%
94%
77%
86%
92%
72%
89%
89%
100%
67%
100%
100%
40%
of whom
men
100%
100%
50%
0%
100%
100%
Parent company
of which pension costs
Subsidaries
Saab Group
1999
Salaries
and other
emoluments
Social
security
expenses
Salaries
and other
emoluments
Social
security
expenses
1,301
641
163
1,646
568
2,287
731
1,359
642
107
463
111
1,105
218
1)
3,946
5,247
2)
1)
1,123
2,482
2)
1)
Of the Parent Company’s pension costs, SEK 7 m. (4) relates to the Board
of Directors and the President including deputies and executive vice
presidents. The company’s outstanding pension commitments to these
amount to SEK 70 m. (80), of which SEK 65 m. (70) relates to previous
managing directors including deputies.
Of the Group’s pension costs, SEK 55 m. (9) relates to the Boards of
Directors and the President, including deputies and executive vice
presidents. The Group’s outstanding pension commitments to these
amount to SEK 91 m. (88) of which SEK 65 m. (70) relates to previous
managing directors including deputies.
2)
63
Salaries and other emoluments distributed per country and between Members
of the Board etc. and other employees in the Group.
2000
The retirement age for the President is 60.
The President has a bonus based pension plan. The pension cost for
Saab AB consists of pension bonuses amounting to 35 percent of the fixed
salary as long as the President remains an employee of the company.
To this must be added the cost of pension bonuses according to the ITP
plan. The pension plan for the President has been complemented with a
personal warrant program. The President has been allocated 370,000
personal warrants in Saab AB. The warrants provide entitlement to the
acquisition of existing Series B shares at a redemption price of SEK 94
per share and may be utilized during the period 1 January 2003 to
31 December 2005. The costs of the program has reduced the income.
In the case of other leading officials, the benefits according to the ITP
plan are applicable after the age of 65. For certain subscribers to the ITP
plan is the regulation, that pension benefits, based on salary segments
between 20 and 30 base amounts, also will be payable on salary segments
above 30 base amounts.
Furthermore, certain leading officials are entitled, or obliged if the
company so requests, to retire on pension at the age of 60, or in certain
cases 62. The retirement pension up to the ordinary pension age of 65 is
70 percent of the salary at the time of retirement.
For certain other leading officials, pensions have been agreed in
accordance with special rules. These state that a pension may be paid
as a supplemented retirement and surviving dependants’ pension of 20
per cent of the salary in force upon retirement at the age of 65. The rules
have been replaced by a new pension plan, whereby a premium-based
supplement of the ITP level of salary portions greater than 20 base
amounts and that the agreements on early retirement have a premiumbased level. New agreements will follow the premium-based pension plan.
1999
Board &
Other
President employees
Board &
Other
President employees
Parent Company
Sweden
(of which bonus, etc.)
France
South Africa
Austria
UK
10
2
–
–
–
–
1,286
–
1
2
1
–
11
1
–
–
–
2
2
1
1
Total Parent Company
10
2
1,290
–
11
1
1,349
–
Subsidiaries
in Sweden
62
3
3,038
–
23
3
951
–
Subsidiaries
outside Sweden
USA
Australia
Austria
Finland
Netherlands
Denmark
Singapore
UK
Germany
Norway
Japan
Canada
South Africa
Chile
France
India
Thailand
Bahrain
Malaysia
Russia
Total Subsidiaries
38
4
3
3
1
2
2
2
2
2
1
1
–
2
–
–
–
–
–
–
125
27
382
193
49
47
31
24
16
14
11
7
3
2
2
–
1
1
1
–
–
–
3,822
–
1
–
3
–
–
–
1
7
1
1
–
–
1
1
–
–
–
–
–
–
39
3
55
4
47
–
–
–
2
5
6
5
1
2
1
–
–
–
–
1
1
2
1,083
–
Total Group
135
29
5,112
–
50
4
2,432
–
1,343
N OT E 3 – SALES BY BUSINESS AREA AND MARKET
Group
Parent Company
Pro forma
Sales by business area
Saab Aerospace
Saab Ericsson Space
Less internal sales
Other Operations
Saab Group
2000
1999
2000
1999
4,364
3,921
2,511
2,348
713
-733
13,124
3,241
1,475
17,840
4,294
3,964
2,367
3,393
676
-797
13,897
3,009
1,112
18,018
–
3,921
–
–
–
–
3,921
–
–
3,921
–
3,856
–
–
–
–
3,856
–
1,077
4,933
3,822
62
–
3,884
37
–
–
–
–
3,921
3,854
220
345
4,419
176
–
273
63
2
4,933
Sales by market
Sweden
Other EU Countries
Other European countries
Total Europe
North America
Central and South America
Asia
Australia, etc
Other markets
Saab Group
N OT E 2 – INFORMATION ON REMUNERATION
TO LEADING COMPANY OFFICIALS
In accordance with a resolution of the Shareholder’s Meeting, the fees to
the members of the Board amount to SEK 1,800,000, consisting of SEK
700,000 to the Chairman and SEK 275,000 to each of the other members
of the Board elected by the Shareholders’ Meeting, with the exception of
the President. The Members of the Board nominated by BAE SYSTEMS
– Michael Rouse, Tony Rice and George Rose – all of whom are
employees of BAE SYSTEMS, have declined their Board fees with
respect to the BAE SYSTEMS company policy applied.
The President and CEO has received salary, bonus and other benefits
totaling SEK 7,105,440, of which bonus SEK 1,975,000.
In the event of termination of employment by the company, the
President will receive a salary and pension benefits for a period of six
months (period of notice). Subsequently, the President will receive a
termination payment amounting to two years’ salary, based on the current
fixed salary. If the President has not entered alternative employment
within 18 months, he will recieve a further year’s termination payment.
Salary during the period of notice and termination payment will be
deducated from income received from another employer during the
same period.
Actual
9,317
2,734
608
12,659
2,899
464
764
997
57
17,840
5,609
1,493
512
7,614
644
21
546
217
11
9,053
N OT E 4 – ITEMS AFFECTING COMPARABILITY
Group
Parent Company
Allocated pension re-funds from SPP
Project provisions related
to the former Celsius Group
Revaluation of leasing porfolio
related to Regional Aircraft
Total
64
2000
527
1999
–
2000
266
1999
–
-488
–
–
–
246
285
255
255
246
512
255
255
N OT E 5 – OTHER OPERATING INCOME
Group
Capital gain from sale of subsidiary
Trading income
Royalty
Exchange rate differences
Utilization of reserve for
Customer Support
Capital gain from sale of fixed assets
Income from secondary operations
Guarantee fees
Other
Total
2000
356
45
43
36
1999
21
12
–
10
21
20
14
–
78
613
47
–
44
–
47
181
N OT E 6 – OTHER OPERATING EXPENSES
Group
Cost of change in pension regulation
Disposals of tangible fixed assets
Capital loss from sale of subsidiaries
Write down of participation
in other companies
Other
Total
2000
-42
-17
–
–
-38
-97
adjusting the portfolio to market value, amounted to SEK 1 bn at yearend. Net value of the portfolio amounts to SEK 6.5 bn, which is covered
by the insurance taken during the year.
Parent Company
2000
–
45
43
28
–
2
–
50
3
171
1999
–
12
–
13
N OT E 7 – LEASE CONTRACTS
Operating lease contracts
Group
47
–
–
47
17
136
Outcome
1999
2000
-9
-22
-71
2000
-42
–
–
–
-5
-47
1999
–
-3
–
Outcome
1999
2000
1999
1,707
278
107
2,092
Leasing expenses
Interest expenses
Depreciation
Other expenses
-791
-559
-460
-400
-722
-660
-469
-276
-2,210
113
-2,127
35
–
–
Total expenses
Utilization of loss risk reserve
Operating income
2000
1999
5,917
1,253
1,135
–
8,305
8,130
1,800
920
4
10,854
Equity and liabilities
Equity
Provisions
Lease obligations 1)
Other liabilities
Total equity and liabilities
1,964
1,046
3,903
1,392
8,305
1,599
3,114
4,482
1,659
10,854
3,637
4,197
1)
Of which long-term obligations
114
Premises and
buildings
7
7
Machines and
equipment
15
29
4
1
24
20
14
5
58
Aircraft for lease
Outcome
1999
2000
Contracted
2001
2002
2003
2004
2005
2006 and onwards
Total contracted
Balance sheet summary, Saab Aircraft Leasing
Assets
Lease assets
Receivables, Group companies
Receivables
Liquid funds
Total assets
46
36
23
5
4
Contracted
2001
2002
2003
2004
2005
2006 and onwards
Total contracted
Aircraft finance
Income statement Saab Aircraft Leasing
2000
1,766
240
91
2,097
17
13
12
12
4
6
64
Parent Company
–
-12
-15
Leasing revenue
Interest revenue
Other revenue
Total revenue
Machines and
equipment
18
60
Contracted
2001
2002
2003
2004
2005
2006 and onwards
Total contracted
Parent Company
1999
–
-5
-35
Premises and
buildings
29
21
Payments
to lessors
791
783
Payments
from airlines
878
879
778
754
699
680
602
3,040
6,553
826
770
721
667
588
3,172
6,744
The above commitments relate to lease of Saab 340 aircraft placed with
American investors and operators.
Finance lease contracts
Aircraft for lease
The income statement and balance sheet for Saab Aircraft Leasing are
mainly dollar-related since aircraft sales and leasing contracts are always
made in USD. The conversion rates used in the financial statements are
shown on page 63.
During 2000, the aircraft on the balance sheet were written down by
SEK 1,451 m., of which SEK 989 m. against the loss risk reserve and the
remaining portion against other liabilities. Total value of the portfolio
on and off balance sheet, excluding the 57 aircraft financed with nonrecourse funding, amounted to SEK 7.5 bn at year-end. The reserve,
Acquisition value
Accumulated depreciation
Write-down for the year
Residual value according to plan
2000
2,323
-779
-725
819
1999
2,379
-677
–
1,702
Depreciation for the year
Leasing fees for the year
Contracted future leasing fees
130
348
1,862
141
268
1,993
2000
154
53
1,929
1999
188
52
1,915
1)
1)
The above finance lease contracts relate to 34 (35) Saab 340.
MUSD
MDEM
MJPY
The amounts are hedged through deposits and/or other financial
instruments in the respective currency.
65
N OT E 1 2 – INTEREST EXPENSES AND
SIMILAR PROFIT/LOSS ITEMS
N OT E 8 – DEPRECIATION ON TANGIBLE AND
INTANGIBLE FIXED ASSETS
Group
2000
Depreciation according to
plan by asset
Goodwill
Land and buildings
Plant and machinery
Equipment, tools, fixtures and fittings
Lease assets
Write-down
Total
Group
Parent Company
1999
2000
1999
-47
-136
-120
-295
-123
-534
-1,255
-41
-16
-67
-227
-56
-511
-918
–
–
-43
-94
-24
–
-161
-41
-100
-24
–
-165
-81
-81
–
–
–
–
–
–
-1,336
-918
-161
-165
Interest expenses, Group companies
Interest expenses, convertible
debenture loan
Interest expenses, others
Interest on pension debt
Total
–
Operating income by business area
Saab Aerospace1)
Saab Ericsson Space
Corporate
Other Operations
Saab Group
1)
289
333
167
46
53
301
1,189
157
-98
285
1,533
2000
199
450
146
-39
65
-40
781
212
-123
255
1,125
–
333
–
–
–
-7
326
–
–
512
838
-11
-14
-62
-87
-12
-20
-59
-94
-11
-5
-49
-89
Group
–
431
–
–
–
-60
371
–
–
255
626
1999
-12
3
-139
-148
-11
5
-39
-45
Parent company
Current tax expenses
Deferred tax
Tax related to Group contribution given
Total
2000
-667
334
–
-333
1999
-184
-207
–
-391
Percent
Swedish Income taxe rate
Non-deductible expenses
Non-taxable income
Restructuring within the Group
Other
Group tax rate
2000
28
6
-10
0
-1
23
1999
28
5
-1
-3
-1
28
2000
-167
-96
-42
-305
1999
-111
-175
-35
-321
N OT E 1 5 – OTHER INTANGIBLE FIXED ASSETS
Parent Company
2000
–
1999
–
2000
270
1999
23
26
4
1
4
–
–
–
388
–
–
743
644
–
–
–
4
–
-1
25
–
–
4
-106
–
908
-98
–
965
Group
2000
N OT E 1 4 – TAXES
Group
Parent Company
2000
–
381
2
14
1999
–
571
–
3
2000
2
145
–
–
1999
1
468
–
–
-172
225
-218
356
-118
29
-198
271
66
Parent company
2000
1999
2000
1999
356
79
435
136
220
356
–
–
–
–
–
–
according to plan
At beginning of year
Acquisition of companies
Total
-69
-61
-47
-177
-28
–
-41
-69
–
–
–
–
–
–
–
–
Accumulated write-downs
Total
–
-81
-81
–
–
–
–
–
–
–
–
–
carried forward
177
287
–
–
Accumulated acquisition value
Total
N OT E 1 1 – OTHER INTEREST INCOME AND SIMILAR
PROFIT/LOSS ITEMS
Interest income, Group companies
Interest income, other
Dividend from others
Translation and currency differences
Less project interest, accounted
for as a gross margin
Total
-12
-202
-121
-335
1999
N OT E 1 0 – INCOME FROM SECURITIES AND
RECEIVABLES HELD AS FIXED ASSETS
Capital gain from sale of subsidiary
Capital gain from sale of
other participations
Income from restructing
within the Group
Dividend and Group contributions
received
Dividend received from
associated companies
Write-down of participations
in Group companies
Exchange differences
Total
1999
-24
Difference between book depreciation and
depreciation according to plan
– Land and buildings
– Plant and machinery
Tax allocation reserve
Total
Including reversal of loss risk reserve SEK 135 m.
Group
2000
-3
Parent company
Group
Parent Company
Pro forma
1999
1999
–
N OT E 1 3 – APPROPRIATIONS, OTHER
N OT E 9 – OPERATING INCOME BY BUSINESS AREA
2000
Parent company
2000
–
N OT E 1 6 – GOODWILL
N OT E 1 8 – PLANT AND MACHINERY
Group
2000
Group
1999
Purchases
Sales and disposals of
business operations
Translation difference for the year
Total
104
1,511
–
104
-22
1
1,594
–
–
104
according to plan
Total
Residual value according to plan carried forward
-16
-136
-152
1,442
–
-16
-16
88
At beginning of the year
Purchases
Sales and disposals
Re-classifications
Translation differences for the year
Total
according to plan
Sales and disposals
Re-classifications
Total
Residual value according to
plan carried forward
N OT E 1 7 – LAND AND BUILDINGS
Group
Purchases
Sales and disposals
Total1)
according to plan
Sales and disposals
Total
Parent company
2000
1999
2000
1999
1,740
732
1,989
-124
23
4,360
1,691
146
38
-135
–
1,740
1,128
59
–
-6
–
1,181
1,084
71
–
-27
–
1,128
1999
2000
1999
2,220
230
1,440
-229
1
-4
3,658
1,893
331
279
-217
-66
–
2,220
1,068
63
–
-54
1
–
1,078
1,056
88
–
-76
–
–
1,068
-1,527
-1,010
178
–
-295
-3
-2,657
-1,329
-163
180
12
-227
–
-1,527
-775
–
52
–
-94
–
-817
-748
–
73
–
-100
–
-775
1,001
693
261
293
No assets are possessed via finance lease contracts.
N OT E 1 9 – EQUIPMENT, TOOLS, FIXTURES AND FITTINGS
-667
-899
46
-120
-11
-1,651
-650
-11
61
-67
–
-667
-520
–
3
-43
–
-560
-505
–
26
-41
–
-520
Purchases
Sales and disposals
Total
according to plan
Sales and disposals
Re-classifications
Total
638
10
-36
612
674
–
-36
638
638
–
-36
602
674
–
-36
638
3,321
1,711
1,223
1,246
Tax assessment value, buildings (Sweden)
Tax assessment value, land (Sweden)
1,126
431
801
223
437
184
536
184
11
11
Acquisition value includes capitalized interest of
2000
Group
Accumulated net revaluation
Total
carried forward
1)
Parent Company
No property is possessed via finance lease contracts.
2000
1999
2000
1999
872
118
1,072
-280
5
1,787
1,014
52
–
-194
–
872
659
12
–
-1
–
670
771
10
–
-122
–
659
-674
-876
247
–
-122
4
-1,421
-764
–
146
–
-56
–
-674
-541
–
1
–
-24
–
-564
-639
–
–
122
-24
–
-541
366
198
106
118
No assets are possessed via finance lease contracts.
67
Parent Company
Specification of Parent Company´s participations
in Group companies
N OT E 2 0 – LEASE ASSETS
Group
Parent Company
2000
1999
2000
1999
Purchases
Sales and disposals
Re-classifications
Total
10,671
656
629
-1,515
–
416
10,857
10,681
202
–
-427
66
149
10,671
–
–
–
–
–
–
–
–
–
–
–
–
–
–
according to plan
Sales and disposals
Re-classifications
Total
-2,435
-19
124
–
-535
-39
-2,904
-2,017
–
112
-12
-511
-7
-2,435
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-1,451
-1,451
–
–
–
–
–
–
–
–
–
6,502
8,236
–
–
2,323
348
1,862
2,559
314
2,077
Total
Assets possessed via finance
lease contracts
Calculated acquisition value of the assets
Leasing fees paid during the fiscal year
Contracted future leasing fees
No. of
Subsidiary / Corp. ID no. / Reg. Office
shares
Celsius AB, 556194-4652, Stockholm
28,066,038
AerotechTelub Holding AB, 556206-7131, Arboga
2,850
AerotechTelub AB, 556218-6790, Arboga
500,000
Celsius Test Systems AB, 556251-3290, Stockholm
30,000
Celsius Metech AB, 556080-0210, Arboga
60,000
Celsius Metech Oy, 570.990, Finland
1,200
Celsius Metech A/S, 252.561, Denmark
5,000
Celsius Metech GmbH, HRB 5173, Germany
–
Telub Holding AB, 556153-9924, Stockholm
9,152,108
AerotechTelub Contracting AB, 556246-0419, Arboga
5,000
AerotechTelub Communications A/S, A/S 249345, Denmark
–
AerotechTelub Information och Media AB, 556003-5312,Växjö
10,000
AerotechTelub Internservice AB, 556089-6721,Växjö
40,000
Telub AB, 556273-3146,Växjö
100
Bofors Carl Gustaf AB, 556210-8661, Karlskoga
500,000
Celsius Automotive AB, 556393-6144, Järfälla
15,000
Celsius Aviocomp AB, 556347-9251, Linköping
163,000
Celsius Aviocomp Nordic AB, 556124-1976, Stockholm
1,000
Celsius Aviocomp Engineering AB, 556244-5139, Stockholm
900
Celsius AvioComp Holding B.V., Netherlands
40
Airvo B.V., Netherlands
40
Celsius AvioComp Netherlands B.V., Netherlands
40
R.I.A.S. B.V., Netherlands
100
Celsius Inc., USA
10
Bofors Weapon Systems Inc., USA
1,000
CelsiusTech Inc., USA
1,000
KKRV Inc., USA
1,000
Celsius Holding Florida Corp., USA
10
AeroThrust Corp., USA
100
Celsius Amtec Corp., USA
100
Celsius Aerotech Inc., USA
1,000
Aero Systems Engineering Inc. (ASE), USA
3,522,073
Celsius Invest AB, 556164-6588, Stockholm
1,720,000
C C Ejendommen A/S, Denmark
100
AB Götaverken, 556205-5615, Göteborg
3,000,000
Götaverken Regalia AB, 556249-8583, Göteborg
500
Götaverken Rig AB, 556292-3044, Göteborg
1,000,000
ASJ Ltd, Cayman Island
100
Götaverken Netherlands B.V., Netherlands
40
Götaverken International N.V., Curacao
10
Bounty Corp., Liberia
1
Celsius Materialteknik CMT AB, 556354-6349, Linköping
20,000
Celsius Materials Karlskoga AB, 556291-8382, Karlskoga
4,000
Applied Composites AB ACAB, 556326-2988, Linköping
10,000
AB AmTech Inspection i Karlstad, 556440-5214, Linköping
1,000
Celsius Weapon Systems AB, 556258-2352, Stockholm
10,000
Cromarty Ltd, Ireland
2
Servanda Insurance Co Ltd, Cayman Island
2,000,000
Kockums Holdings AB, 556036-4100, Malmö
48,000
Kockums Engineering AB, 556277-1658, Malmö
2,000
Alpha Thames Engineering Ltd, United Kingdom
–
Kockums Industrier AB, 556277-1674, Malmö
5,000
Narvik Verkstedsindustri A/S, Norway
2,000
Nexplo Industries AB, 556559-8801, Karlskoga
–
Nexplo Bofors AB, 556267-9372, Karlskoga
250,000
Saab Bofors Test Center AB, 556035-3558 Karlskoga
7,200
NEXPLO Bofors Inc., USA
1,000
Nexplo Vihtavuori Oy, Finland
160,000
Saab Bofors AB, 556267-9455, Karlskoga
3,000,500
Saab Bofors Industrier AB, 556016-3247, Karlskoga
4,156
Wikers AB, 556014-2126, Karlskoga
26,212
CGTEC AB, 556093-3698, Karlskoga
1,000
Företagshälsovården i Karlskoga AB, 556536-1242, Karlskoga
2,750
Saab Bofors Dynamics AB, 556264-6074, Karlskoga
500,000
Saab Bofors Support AB, 556016-3247, Karlskoga
176
Bofors Personalbutiker AB, 556338-1564, Karslkoga
1,000
Saab Bofors Test Center AB, 556035-3558, Karlskoga
48,400
Saab Bofors Missile Corporation AB, 556147-5905, Karlskoga
5,000
Saab Bofors Underwater Systems AB, 556439-6884, Karskoga
250,000
Bofors S A Marine AB, 556040-3916, Landskrona
31,000
Saab Communication AB, 556181-4418, Stockholm
21,000
Saab Microtech AB, 556241-6627, Göteborg
10,000
Saab Pacific Pty Ltd, Australia
9
Saab Pacific Development Pty Ltd, Australia
4,050,000
Hawker Pacific Pty Ltd, Australia
1,000,000
Hawker Pacific (Australia) Pty Ltd, Australia
10,500,001
Australian Aerospace Pty Ltd, Australia
5,608,483
Hawker Pacific Asia Pte Ltd, Singapore
1,300,000
Hawker Pacific (Malaysia) Sdn Bhd, Malaysia
200,000
N OT E 2 1 – CONSTRUCTION IN PROGRESS
AND ADVANCE PAYMENTS FOR
TANGIBLE FIXED ASSETS
Group
Re-classifications
Accrued expenses during the year
At year-end
2000
13
14
-27
24
24
1999
91
–
-91
13
13
Parent Company
2000
9
–
-5
1
5
1999
23
–
-23
9
9
N OT E 2 2 – PARTICIPATIONS IN GROUP COMPANIES
Parent Company
2000
1999
New issues/shareholders´ contribution
Purchases
Sales
Total
3,377
59
5,156
-184
8,408
2,495
801
192
-111
3,377
Write-downs for the year
Divestments
Total
Book value at year-end
-131
-110
–
-241
8,167
-121
-98
88
-131
3,246
68
Share
in %
100.0%
57.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100,0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
80.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
60.0%
100.0%
9.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
55.0%
100.0%
66.0%
100.0%
61.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
52.0%
Book
value
5.040
Note 22, cont.
HPP Aviation Services Inc., Australia
Saab Systems Pty Ltd, Australia
Bofors Australia Pty Ltd, Australia
Bofors Underwater Systems Australia Pty Ltd, Australia
SaabTech AB, 556244-5683, Järfälla
Frozen Island System Development AB, 556484-7555, Järfälla
Transponder Tech i Skandinavien AB, 556168-6923, Järfälla
CelsiusTech New Zealand Ltd, New Zealand
SaabTech Electronics AB, 556017-4848, Järfälla
Saltbadlödning i Järfälla AB, 556081-8113, Järfälla
Linus AB, 556235-8159, Järfälla
SaabTech International AB, 556267-8994, Stockholm
SaabTech Norge A/S, Norway
SaabTech Canada Ltd, Canada
SaabTech Deutschland GmbH, Germany
SaabTech Finland Oy, Finland
Bofors (UK) Ltd, United Kingdom
Celsius Japan K K., Japan
SaabTech Danmark A/S, Denmark
SaabTech SE Asia Pte Ltd, Singapore
SaabTech Systems AB, 556363-6785, Järfälla
CelsiusTech Naval Systems AB, 556207-5753, Järfälla
Celsius Tech Systems (M) SDN BHD, Kuala Lumpur
SaabTech Vetronics AB, 556169-8431, Järfälla
Sanguistech AB, 556090-7213, Karlskoga
Shipknow AG, Schweiz
YDAB i Härnösand AB, 556295-6390, Härnösand
Saab Dynamics AB, 556055-9691, Linköping
Ericsson Saab Avionics AB, 556460-1655, Stockholm
EMC Service Elteknik AB, Göteborg
Saab Ericsson Space AB, 556134-2204, Göteborg
Saab Ericsson Space Fastighets AB, 556230-7404, Göteborg
Saab Ericsson Space Inc., USA
Austrian Aerospace GmbH, Austria
Saab Training Systems AB, 556030-2746, Huskvarna
Saab Training Systems GmbH, Germany
Saab Training Systems UK Ltd, United Kingdom
Saab Training Inc., USA
Saab Training Systems Canada Ltd, Canada
Saab-Scania Combitech AB, 556036-0207, Linköping
Saab Nyge Aero AB, 556043-5413
Norsk Flygtjenste A/S, Norway
Saab Helikopter AB, 556026-9945, Nyköping
Barracuda Technologies AB, 556045-7391, Gamleby
Barracuda Camoflage (P) Ltd, India
Barracuda Technologies Pty, Australia
Barracuda Technologies S.A., France
Barracuda Technologies Canada Inc, canada
Saab Holding B.V., Netherlands
Saab Marine Holding AB, 556147-5863, Linköping
Saab Marine Electronics AB, 556043-5124, Göteborg
Saab Tank Control Vertriebs GmbH, Germany
Saab Marine (UK) Ltd, United Kingdom
Scanjet Clean AB, 556291-2427, Sjöbo
Saab Marine Electronics Singapore Pte Ltd, Singapore
Saab Tank Control (UK) Ltd, United Kingdom
Saab Tank Control (India) Ltd, India
Saab Systems Inc., USA
Saab Mep AS, Norway
SF-Control OY, Finland
Saab Marine Electronics Middle East, Bahrain
Saab Tank Control WLL (Middle East), United Arab Emirates
Saab Marine RU, Russia
Combitech Systems AB, 556258-8862, Jönköping
Saab TransponderTech AB, 556535-9790, Linköping
Saab Aircraft AB, 556062-7647, Linköping
Saab Holdings U.S. Inc., USA
Saab Aircraft of America Inc., USA
Saab Aircraft Leasing Holding AB, 556124-3170, Stockholm
Saab-Scania Rental AB, 556056-9807, Stockholm
Saab Aircraft Leasing AB, 556020-4231, Stockholm
Fairbrook Inc., USA
Fairbrook Leasing Inc., USA
Lambert Leasing Inc., USA
Saab Aircraft Leasing Inc., USA
2000 Aircraft Credit AB, 556464-6031, Stockholm
SF340 Leasing AB, 556258-8847, Stockholm
Swedish Aircraft Two KB, 916691-1494, Linköping
Swedish Aircraft Three KB, 916694-4364, Linköping
Aero Three AB, 556258-8920, Stockholm
Note 22, cont.
No. of
shares
–
500
2,000
2
170,000
100
100
360,000
150,600
2,000
1,000
50,000
50
25,765
–
50
10,000
48,000
–
–
2,051,230
1,000
100,000
200,000
20,000
240
88,000
1,000,000
501
400
90,000
1,000
100
–
150,000
4,000
100,000
200
300,000
1,100,000
5,000
1
4,800
200.000
81,400
75,000
4,996
100
180
1,000
15,000
1
100,000
1,020
306,000
1,740
27,000
300,000
10,603
200
198
900
54
3,250
1,000
100,000
1,000
1,001,000
30,000
1,000
11,000
100
100
100
100
787,000
1,000
–
–
1,000
Share
in %
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
50.1%
100.0%
60.0%
100.0%
100.0%
90.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
74.0%
100.0%
99.9%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
51.0%
51.0%
58,0%
60.0%
100.0%
54.5%
100.0%
99.0%
60.0%
54.0%
65.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
80.0%
100.0%
50.3%
100.0%
100.0%
Book
value
No. of
shares
–
1,000
56,450
20,000
100,000
25,000
30,000
10,000
2,000
–
–
–
100
100,000
141,000
40,000
500,000
Swedish Aircraft Four KB, 916694-4372, Linköping
Swedish Aircraft Holdings AB, 556573-7805, Stockholm
Saab Xperientia AB, 556147-5855, Jönköping
Saab Hangaren Förvaltning AB, 556031-8759, Linköping
Lansen Försäkrings AB, 516401-8656, Linköping
Saab Air AB, 556061-1732, Linköping
Saab Treasury AB, 556147-5939, Linköping
Saab Fond AB, 556025-1356, Linköping
Saab International AB, 556378-6275, Linköping
Saab International AB (Chile) Ltda, Chile
Saab South Africa (Pty) Ltd, South Africa
Saab Aerospace Marketing Services GmbH, Austria
Saab Military Aircraft Ltd., United Kingdom
Saab Aircraft International Ltd, United Kingdom
Nyge Aero Norden AB, 556496-1844, Nyköping
CSM Materialteknik AB, 556517-3951, Linköping
Saab Combitech AB, 556108-8799, Jönköping
Dormant companies, real estate companies etc.
Share
in %
50.3%
100.0%
64.7%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Book value at year end
Book
value
30
2
10
3
3
1
14
5
60
15
8,167
N OT E 2 3 – RECEIVABLES FROM GROUP COMPANIES
Group
Additional receivables
Cleared receivables
167
12
71
Parent Company
2000
1999
2000
1999
–
–
–
–
–
–
–
–
1,019
24
-1,019
24
162
1,019
-162
1,019
42
N OT E 2 4 – PARTICIPATIONS IN ASSOCIATED COMPANIES
Group
120
Purchases
Divestments
Re-classification
Net income of the year
70
106
Parent Company
2000
1999
2000
1999
12
855
-105
-13
10
20
779
79
3
-65
5
17
-2
-12
-5
12
3
5
Specification of the Group´s participations in associated companies
Associated company/Corp. ID no./Reg. Office
Industrikompetens i Östergötland AB,
556060-5478, Linköping
Triangle Equipment AS, Norway
Fortum Service Industripartner AB,
556422-3419, Karlskoga
Avitronics (Pty) Ltd, South Africa
Autoliv Celsius AB, 556561-0788, Stockholm
Howaldtswerke-Deutsche Werft
Aktiengesellschaft, Germany
Nammo A/S Norway
2
13
10
168
2 203
1)
2)
69
Share
in %1)
Adjusted equity/
Net income
of the year2)
Book
value
33.0
25.8
4/1
8 / -2
4
8
40.0
49.0
50.0
4/0
33 / -2
0/0
4
33
0
25.0
27.5
626 / 15
104 / 8
626
104
779
Share in % relates to equity.This is equal to the share of the votes of the total number of shares.
Adjusted equity relates to the owned share of the company´s equity, including equity in untaxed
reserves. Net income of the year relates to the owned proportion of the company´s income after
tax, including the portion of equity in the year´s change in untaxed reserves.
N OT E 2 5 – OTHER SECURITIES
HELD AS FIXED ASSETS
N OT E 2 7 – OTHER LONG-TERM RECEIVABLES
Group
2000
Purchases
Divestments
Write-downs
Re-classifications
1,315
354
-38
-193
-1,267
171
1999
24
1,294
-3
–
–
1,315
Group
Parent Company
2000
1,298
20
-4
–
-1,267
47
1999
Interest-bearing
7
1,294
-3
–
–
1,298
Number
of shares
15,000
1,621,745
100
100,000
Share
in %
6.9
0.8
20.0
–
Book
value
6
–
–
21
2,750
6
25
50.0
–
2.1
9
–
–
0
400
3,000
0
50,524,800
300
50,300
1,125,000
330
3,862
1
4,606
217,125
–
6.8
33
41.42
1
11.2
1.8
16.6
15
33
0.8
33.0
–
48.0
–
–
–
3
–
27
–
5
56
–
13
4
1
15
6
5
171
Interest free
1999
2000
1999
587
1,552
175
885
68
3,267
625
1,039
117
289
77
2,147
625
683
625
788
Deferred tax liabilities
Revaluation of building
Fiscal excess depreciation
Tax allocation reserves
Valuation of receivables and liabilities
Other
Total
165
1,413
106
106
37
1,827
175
1,402
59
4
1,640
165
175
Deferred tax receivable net
1,440
507
1,143
1,238
192
161
Deferred tax liability on untaxed reserves
in the Parent Company
1,308
1,413
165
175
–
1,345
1,345
–
–
–
–
424
424
–
–
–
752
224
976
721
31
752
–
–
–
–
–
–
Prepaid expenses and accrued income in the Group amounted to SEK
985 m. (270) and in the Parent Company to SEK 199 m. (90). In the
Group SEK 382 m. relates to accured income in accordance to the
percentage of completion method, and SEK 90 m. (100) is attributed
to accrued leasing fees for Saab Aircraft Leasing.
N OT E 2 9 – SHORT-TERM INVESTMENTS
Group
2000
3,121
3,121
Interest-bearing securities
Total
1999
9,766
9,766
Parent Company
2000
3,082
3,082
1999
9,736
9,736
The market value on interest-bearing securities amounted to SEK 3,128 m.
(9,766) in the Group and SEK 3,089 m. (9,736) in the Parent Company.
Financial investments are made in Swedish Government bonds and
housing bonds. The investment policy means that the fixed interest term
must be 0–27 months to avoid excessive fluctuations as a result of
interest changes. At year-end, the average interest terms was 8 months.
N OT E 3 0 – EQUITY
The shares in the Parent Company are divided into two series, class A
and class B. Both classes of shares carry equal rights, with the exception
that each class A share is entitled to ten votes and each share of class B is
entitled to one vote. Each share carry a nominal value of SEK 16.
Parent Company
2000
1999
N OT E 2 8 – PREPAID EXPENSES AND ACCRUED INCOME
Deferred tax receivable relates to the tax result arising from the assumption that assets and liabilities are disposed of at book residual values.
The deferred tax relates to the following assets:
Investments in subsidiaries
Reserves for future expenses
Re-classification of leasing contracts
Loss carry-forward
Other
Total
2000
The interest free receivables relates mainly to depositions attributable to
Saab Aircraft Leasing.
N OT E 2 6 – DEFERRED TAX RECEIVABLE/TAX LIABILITY
Group
1999
The interest bearing long-term receivables in the Group relates mainly to
the present value of lease payments for the oil-rig Petrobras XXIII, SEK
657 m., and receivables regarding allocated surplus from SPP, SEK 544 m.
SPP-surplus in the Parent Company amounts to SEK 41 m.
Specification of the Group´s other securities held as fixed assets
Company
Arbustum AB
Ariane Space Participation, France
Aviation Financial Services AG, Switzerland
b-business partners B.V
Booforsen Fastighets AB,
556381-0539, Karlskoga
Crossair Ltd Co, Switzerland
EMC Väst AB
Gesällschaft für
Weltraumfragen GmbH, Austria
IG Försvarslogistik AB
Industrigruppen JAS AB
Intospace GmbH, Germany
Kitron ASA, Norway
Länsteknikcentrum AB
Natech Production A/S
Raufoss Ammunisjionsfabrikker A/S
Saab Smaaland Project Venture AB
Societe Ariane Space, France
Taurus Systems GmbH, Germany
Trigon Blue Cross Blue Shield
WAH Nobel, Ltd Pakistan
Tenant-owners rights
Other
Parent Company
2000
Number of shares as per December 31, 2000:
Shares class A
Shares class B
Number
of shares
6,454,303
100,005,372
106,459,675
Number of
shares in %
6
94
100
Number of
votes in %
39
61
100
During 1998, the Parent Company issued a convertible debenture loan
with a nominal value of SEK 254 m. The conversion price is set to SEK
91 and conversion to shares of class B is possible from December 4, 2001
to July 15, 2004. After full conversion the number of class B shares will
increase by 2,787,500 and the capital stock will increase by SEK 45 m.
70
N OT E 3 2 – PROVISIONS FOR PENSIONS AND
SIMILAR COMMITMENTS
Note 30, cont.
Equity in the Group has changed as follows during the year:
Capital
stock
Restricted
reserves
1,703
Allocation to statutory
reserve
Utilization of premium
reserve
Utilization of equity method
reserve
Shifting between restricted
and unrestricted equity
The years translation
differences etc
Total at year-end
1,703
1,560
Profit or
loss carried
forward
Net income
for the
year
1,445
-266
Provisions for pensions in the balance sheet correspond to the equivalent
pension obligations actuarially computed.
Total
4,708
-266
Group
21
-21
0
-7
3
-4
-3
3
0
Provision for pensions
FPG/PRI pensions
Other pensions
Other pension liabilities
Total
79
-79
0
Of which with credit guarantees FPG/PRI
34
160
1,684
1,038
1,038
1,245
Parent Company
2000
1999
2000
1999
2,890
201
436
3,527
1,774
103
118
1,995
1,438
90
104
1,632
1,370
95
118
1,583
2,924
1,810
1,472
1,406
Assets pledged for this liability amounted to SEK 855 m. (831). See note 40.
The Pensions Registration Institute (PRI) is a public organization responsible for the administration of employee pensions. Other pension liabilities
relate to conditional commitments not covered by social security legislation.
194
1,038
5,670
Specification of restricted reserves
Share
premium
reserve
Allocation to statutory
reserve
Utilization of
premium reserve
Utilization of equity
meathod reserve
Change in equity in
untaxed reserves
Change in
statutory reserve
The years translation
differences etc.
Total at year-end
Equity
method
reserve
17
5
RevaluationLegal
reserve reserve
500
338
Equity
Translashare of
tionuntaxed differences
reserves
etc.
551
N OT E 3 3 – OTHER PROVISIONS
Total
Group
149 1,560
21
Costs of restructuring Regional Aircraft
Other provisions for restructuring and
project losses.
Reserves for anticipated deficit in
future leasing operations
Other
Total
21
-7
-7
-3
-3
81
10
2
500
81
-2
-2
357
34
34
183 1,684
632
Restricted
reserves
Profit or Loss
brought forward
1,703
Allocation to statutory reserve
Utilization of premium reserve
Group contribution given to
subsidiaries net after tax
Total at year-end
1,703
837
1,888
-266
-21
3
21
-7
Net Income
for year
Due date 1–5 year from closing day
Due date more than 5 years
from closing day
Total
851
1,497
Total
4,428
-266
0
-4
-107
1,228
1,228
Accumulated excess depreciation
Land and buildings
Machinery and equipment
Lease assets
430
394
1,998
463
379
2,729
288
163
–
313
165
–
Tax allocation Reserves
Allocated 1994
Allocated 1995
Allocated 1996
Allocated 1997
Allocated 1998
Allocated 1999
Allocated 2000
Contingency reserve
Foreign untaxed reserves
Total
–
11
14
17
83
76
179
16
1
3,219
16
24
7
11
78
75
–
15
1
3,798
–
–
–
–
56
39
139
–
–
685
–
–
–
–
56
39
–
–
–
573
1999
2,376
1,068
–
–
–
1,008
208
3,821
2,637
29
5,042
–
1
1,538
–
2
2,378
2000
798
1999
62
2000
18
1999
21
198
996
39
101
39
57
39
60
During 1998, the Parent Company issued a convertible debenture loan
with a nominal value of SEK 254 m. Of the total loan, debentures
amounting to SEK 231 m. were sold to employees while SEK 23 m. were
sold to the wholly owned subsidiary Saab Hangaren Förvaltning AB.
This is to enable sale of convertible debentures at current market value
to new employees. The convertible debenture loan, which bears a fixed
annual interest rate equal to STIBOR less 0.45 percent, will be possible to
convert to Saab shares of class B from December 4, 2001 to July 15. 2004
at a conversion price set to SEK 91. The loan will fall due on July 30,
2004 if not converted. A capital discount amounting to SEK 10 m. (17)
has been calculated compared to a fixed market rate of 5,5 (5) percent.
The capital discount has in the financial statements of both the Group
and the Parent company been accounted for as restricted reserves, share
premium reserve. The capital discount is expensed as interest during the
term of the loan.
N OT E 3 1 – UNTAXED RESERVES
Group
1999
2000
1,537
N OT E 3 5 – CONVERTIBLE DEBENTURE LOAN
-107
1,228
5,279
2000
1999
2,376
N OT E 3 4 – LONG-TERM LIABILITIES TO CREDIT INSTITUTE
Group
Parent Company
Equity in the Parent Company has changed as follows during the year
Capital
stock
Parent Company
2000
1,537
Parent Company
2000
1999
Group
Capital discount
Holdings within the Group
Total
Of the Groups untaxed reserves SEK 901 m. (1,063) consists of deferred taxes.
71
2000
254
-10
-16
228
1999
254
-17
-20
217
Parent Company
2000
254
-10
–
244
1999
254
-17
–
237
N OT E 4 0 – ASSETS PLEDGED
N OT E 3 6 – OTHER LONG-TERM LIABILITIES
Group
Lease obligations
Other long-term liabilities
Total
2000
3,637
568
4,205
Group
Parent Company
1999
4,197
947
5,144
2000
–
–
–
1999
–
–
–
Guarantees provided for own liabilities
and provision
for pensions commitments
Chattel mortgages
Real estate mortgages
to credit institutes
Other assets
for lease obligations
Lease assets
for other long-term liabilities
Long-term receivables
Bank deposits
for accrued expenses
Accrued income
for advance payments from customers
Chattel mortgages
Bonds and other securities
Total
Liabilities with due date more than 5 years from closing day amount to
SEK 1,774 m. (3,203). Security provided for leasing commitments
amounted to SEK 2,025 m. (2,255) and for other liabilities SEK 774 m.
(616). See note 40. Other liabilities consists mainly of prepaid leasing fees.
N OT E 3 7 – SHORT-TERM LIABILITIES TO CREDIT INSTITUTES
Group
Parent Company
Approved credit limit
Unutilized portion
2000
783
-676
1999
43
-43
2000
633
-633
1999
43
-43
Utilized portion
Short-term borrowing
Total
107
860
967
–
80
80
–
35
35
–
48
48
Parent Company
2000
1999
2000
1999
436
419
437
394
350
388
350
388
676
–
–
–
2,025
2,255
–
–
774
115
616
217
–
30
–
201
59
61
–
–
1,751
2,570
8,825
1,751
4,990
10,721
1,751
2,570
5,089
1,751
4,990
7,680
N OT E 4 1 – AUDITORS’ FEES
Group
N OT E 3 8 – OTHER LIABILITIES
Group
Value added tax (VAT)
Personnel liabilities
Depositions regarding
leasing operations
Debt regarding acquired shares
Other
Total
Parent Company
2000
197
162
1999
74
91
2000
31
45
1999
51
43
138
–
77
574
63
292
55
575
–
–
2
78
–
292
3
389
Group
2000
Accrued expenses
Cost of customer commitments
in Regional Aircraft
Reserve for remaining
costs in military business
Vacation pay liability
Social security expenses
Claims reserve
Expected invoices
Personnel liabilities
Earlier redundancy
Accrued interests
Guarantee reserve
Accrued leasing costs
Accrued currency differences
Other
Deferred income
Leasing fees
Advance invoicing
Total
1999
1999
2000
1999
Ernst & Young
Audit assignments
Other assignments
11
3
4
1
3
1
2
1
KPMG
Audit assignments
Other assignments
2
2
1
3
2
3
4
8
30
17
13
2
1
12
7
5
1
7
3
4
6
2
4
Price WaterhouseCoopers
Audit assignments
Other assignments
Total
Audit assignments
Other assignments
N OT E 3 9 – ACCRUED EXPENSES AND DEFERRED INCOME
Parent Company
2000
Parent Company
2000
1999
N OT E 4 2 – DEFINITIONS OF KEY RATIOS
1,021
1,234
1,021
1,234
302
581
372
49
222
193
198
167
36
217
102
420
438
316
248
47
123
106
99
102
25
234
228
316
107
169
151
–
50
31
163
134
6
–
–
21
188
165
117
–
50
29
93
102
8
–
–
12
51
800
4,731
88
821
4,425
–
520
2,373
–
611
2,609
Pre-tax return on capital employed
Operating income increased by financial income as a percentage of
average total assets less non-interest-bearing liabilities and deferred
tax liability.
After-tax return on equity
Net income for the year as a percentage of average equity. When
calculating return on equity before items affecting comparability,
a tax rate of 28 percent has been used.
Profit margin
Operating income before items affecting comparability
increased with financial income as a percentage of sales.
Capital turnover
Sales divided by average capital employed.
Equity/assets ratio
Equity in relation to total assets.
Interest coverage
Operating income before items affecting comparability increased with
financial income, divided by financial expenses.
Earnings per share
Net income for the year divided by the number of shares.
72
Linköping, February 16, 2001
Anders Scharp
Chairman
Marcus Wallenberg
Erik Belfrage
George Rose
Ragnar Ludvigsson
Peter Nygårds
Anthony Rice
Michael Rouse
Björn Svedberg
Lars Olsson
Gunnar Holm
Bengt Halse
Managing director
Auditors’ Report
To the general meeting of the shareholders of Saab AB
Corporate Identity No 556036-0793
We have audited the annual accounts, the consolidated accounts,
the accounting records and the administration of the board of
directors and the managing director of Saab AB for the year 2000.
These accounts and the administration of the company are the
responsibility of the board of directors and the managing director.
Our responsibility is to express an opinion on the annual accounts,
the consolidated accounts and the administration based on our
audit.
We conducted our audit in accordance with generally
accepted auditing standards in Sweden. Those standards require
that we plan and perform the audit to obtain reasonable assurance
that the annual accounts and the consolidated accounts are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the accounts.
An audit also includes assessing the accounting principles used and
their application by the board of directors and the managing director, as well as evaluating the overall presentation of information in
the annual accounts and the consolidated accounts. As a basis for
our opinion concerning discharge from liability, we examined sig-
nificant decisions, actions taken and circumstances of the company
in order to be able to determine the liability, if any, to the company
of any board member or the managing director. We also examined
whether any board member or the managing director has in any
other way acted in contravention of the Companies Act, the Annual
Accounts Act or the Articles of Association. We believe that our
audit provides a reasonable basis for our opinion set out below.
The annual accounts and the consolidated accounts have been
prepared in accordance with the Annual Accounts Act and, thereby,
give a true and fair view of the financial position of the company’s
and the group’s financial position and of the results of operations in
accordance with generally accepted accounting principles in Sweden.
We recommend to the general meeting of the shareholders that
the income statements and the balance sheets of the parent
company and the group be adopted, that the profit for the
parent company be dealt with in accordance with the proposal
in the administration report and that the members of the board
of directors and the managing director be discharged from
liability for the financial year.
Linköping, February 16, 2001
Gunnar Widhagen
Caj Nackstad
Authorized Public Accountant
Ernst & Young AB
KPMG Bohlins AB
73
Board of Directors and Auditors
Anders Scharp
Chairman since 1990, born 1934.
Chairman of Atlas Copco AB and
AB SKF. Chairman of Swedish
Employers’ Confederation. Board
member of Investor AB and the
Federation of Swedish Industries.
Shares in Saab: 31,000
Convertibles in Saab: –
Michael (Mike) P Rouse
Board member since 2000,
born 1948.
Group Managing Director,
International Partnerships
BAE SYSTEMS.
Shares in Saab: –
Marcus Wallenberg
Deputy Chairman since 1993
and Board member since 1992,
born 1956.
Deputy Chairman of Telefonaktiebolaget L M Ericsson. Board member
of AstraZeneca PLC, AstraZeneca
AB, Investor AB, Scania AB, Stora
Enso Oyj, SAS Representative and
The Knut and Alice Wallenberg
Foundation.
Björn Svedberg
born 1937.
Board member of, among others,
Gambro and Investor AB.
Erik Belfrage
born 1946.
Director of SEB, Skandinaviska
Enskilda Banken. Chairman of The
Swedish Institute of Management
(IFL),The Swedish Institute of International Affairs (UI) and the Centre
for European Policy Studies (CEPS).
Board member of SAS, SAS Sverige
AB and the International Council of
Swedish Industry (NIR). Member of
the Trilateral Commission.
Bengt Halse
President, CEO and Board member
since 1995, born 1943.
Board member of Chalmers
University of Technology and
of AU-System.
Convertibles in Saab: SEK 182,000
Options in Saab: 370,000
74
Peter Nygårds
born 1950.
President of SKB (Swedish
Nuclear Fuel and Waste Management Co.). Board member of the
Advisory Board to the National
Board of Civil Defence and the
Swedish Environmental Research
Institute.
Shares in Saab: –
Gunnar Holm
born 1949.
Deputy Chairman of the Graduate
Staff Association, Saab Bofors
Dynamics, Linköping.
Shares in Saab: –
Deputy Board members
Anthony (Tony) Rice
born 1952.
Group Managing Director,
Ventures of BAE SYSTEMS.
Non Executive Director of
Telewest Plc.
Shares in Saab: –
Conny Holm
Deputy since 1995, born 1947.
Chairman of the Engineering
Workers’ Union of the Saab units
in Jönköping.
Shares in Saab: 100
George Rose
born 1952.
Finance Director of BAE SYSTEMS
and Non Executive Director of
Lattice Group Plc
Shares in Saab: –
Rolf Enquist
Chairman of the Engineering
Workers’ Union (SEKO),
AerotechTelub AB, Linköping.
Shares in Saab: –
Lars Höök
Member of the Industrial Salaried
Employees’ Association,
AerotechTelub AB, Arboga.
Shares in Saab: 400
Auditors
Gunnar Widhagen
Auditor since 1993, born 1938.
Ernst & Young AB
Caj Nackstad
KPMG Bohlins AB
Ragnar Ludvigsson
born 1946.
Chairman of the Engineering Workers’ Union, Saab AB, Linköping.
Shares in Saab: –
Lars Olsson
born 1937.
Chairman of the Industrial Salaried
Employees’ Association,
Saab AB, Linköping.
Shares in Saab: 2
Deputy Auditors
Björn Fernström
Ernst & Young AB
Bo Ribers
KPMG Bohlins AB
75
Group Management
Corporate Executive
Committee
Bengt Halse
President and CEO, born 1943.
Employed 1995.
Options in Saab: 370,000
Göran Sjöblom
Executive Vice President, born 1943.
Employed 1995.
Dave Hewitson
Group Senior Vice President,
born 1948. Employed 1999.
Shares in Saab: –
From left: Göran Sjöblom, Bengt Halse, Dave Hewitson and Jan Nygren.
Jan Nygren
Group Senior Vice President,
Shares in Saab: –
Heads of business areas
Dan Jangblad
Senior Vice President. Saab
Systems and Electronics,
Shares in Saab: –
Corporate functions
Åke Svensson
Aerospace, born 1952.
Employed 1976.
Shares in Saab: Convertibles in Saab: SEK 182,000
Lars Wahlund
Senior Vice President.
Financial Control,
Shares in Saab: 100
Convertibles in Saab:
SEK 182,000
Peter Sandehed
Treasury, born 1952.
Employed 1981.
Shares in Saab: Convertibles in Saab:
SEK 182,000
Per Erlandsson
Legal, Secretary to the
Board, born 1947.
Employed 1980.
SEK 182,000
Jan Nygren
Group Senior Vice President,.Communication, born
1950. Employed 2000.
Shares in Saab: –
Jan Eiborn
Technical Support and Services,
Shares in Saab: –
Ingemar Andersson
Saab Bofors Dynamics,
Bengt Mörtberg
Saab Ericsson Space,
Shares in Saab: –
Mats Lindman
Human Resources, born
1945. Employed 1986.
Shares in Saab: 250
SEK 182,000
Gert Schyborger
Group Senior Vice
President, born 1940.
Employed 1996.
SEK 182,000
Per Ove Morberg
Group Senior Vice
President, born 1942.
Employed 1971.
Shares in Saab: –
Christer Persson
Senior Vice President. Celsius
Aviation Services,
Shares in Saab: –
76
Addresses
Saab AB
SE-581 88 Linköping, Sweden
Tel: +46-13-18 00 00
Fax: +46-13-18 18 02
infosaab@saab.se
Saab AB
P.O. Box 70373
SE-107 24 Stockholm, Sweden
Tel: +46-8-700 67 77
Fax: +46-8-700 67 79
infosaab@saab.se
SE-175 88 Järfälla, Sweden
Tel: +46-8-580 840 00
Fax: +46-8-580 322 44
info@systems.saab.se
Saab Aerospace
Tel: +46-13-18 00 00
Fax: +46-13-18 54 27
coms@saab.se
SE-732 81 Arboga, Sweden
Tel: +46-589-800 00
Fax: +46-589-61 16 52
info@aerotechtelub.se
SE-691 80 Karlskoga, Sweden
Tel: +46-586-810 00
Fax: +46-586-857 00
bofors@dynamics.saab.se
Saab Ericsson Space
SE-405 15 Gothenburg, Sweden
Tel: +46-31-735 00 00
Fax: +46-31-735 40 00
1800 Diagonal Road, Suite 230
Alexandria,VA 22314, USA
Tel: +1 (703) 683 0007
Fax: +1 (703) 549 8536
celsius@celsiususa.com
FINANCIAL INFORMATION
The following financial information will be released
in the financial year 2001:
April 26
Interim report January-March
July 12
Interim report January-June
October 19
Interim report January-September
February 14, 2002 Full-year report 2001
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 6:00 p.m. on
Wednesday, April 4, 2001 at Saab in Linköping.
NOTIFICATION
Shareholders must notify the company of their intention
to participate in the meeting not later than 12:00 noon on
Friday, March 30, 2001:
• by telephone: +46-13-18 20 55
• by fax: +46-13-18 33 50
• by mail: Saab AB, Avd CU-MV,
• online: www.saab.se
(follow the instructions on the home page)
Please indicate your name, personal or corporate registration number (Swedish citizens or companies), address and
telephone number. If you are attending by power of proxy,
registration certificate or other authorization, please submit your documentation well in advance of the meeting.
Shareholders or their proxies may be accompanied at the
Annual General Meeting by a maximum of two people.They
may only attend, however, if the shareholder has notified the
company as indicated above.
RIGHT TO PARTICIPATE
Only shareholders recorded in the share register maintained by VPC AB (the Swedish Securities Register Center)
on Friday, March 23, 2001 are entitled to participate in the
meeting.
Shareholders registered in the names of nominees
through the trust department of a bank or a brokerage
firm must temporarily re-register their shares in their own
names to participate in the meeting. For this re-registration to be recorded in the share register by March 23,
2001, nominees must be notified several business days in
advance.
DIVIDEND
The Board of Directors is recommending a dividend of SEK
3.00 per share and Monday,April 9, 2001 as the record day
for the dividend.With this record day, VPC is expected to
distribute the dividend on Thursday, April 12, 2001.
Financial information can be ordered from:
Petra Svensson, telephone +46-13-18 70 70
www.saab.se
Contacts:
Jan Nygren, Group Senior Vice President, Communication
Telephone +46-13-18 19 99, e-mail jan.nygren@saab.se
Agneta Kammeby, Investor Relations
Telephone +46-13-18 71 25, e-mail agneta.kammeby@saab.se
fram_eng.qxp 1-03-19 17.21 Sida 1
KREAB/Strokirk-Landströms, Lidköping 2001. Nr CU 0106.
Saab AB (publ)
Tel +46-13-18 00 00
www.saab.se

SAAB ANNUAL REPORT 2000

Transcription

Similar documents

PUBLIC SERVICE BOARD MEETING AGENDA ITEM REGULAR

Contract based design of avionics systems

surface radars

August 2014 - Rocky Mountain Saab Club

ASD Overview - ATA e

Rapid 3D Mapping

Attachment - El Paso Water Utilities

market report - Saab Aircraft Leasing

RMSC News 2012 Issue 5 - Rocky Mountain Saab Club

Smoke Trails 36