Saab Year-End Report 2015

Defence and security company Saab presents the results for 2015.
Statement by the President and CEO Håkan Buskhe:

Strong growth 2015
During the past few years, Saab has invested significant resources in developing
the company’s world-leading technologies, on coming closer to key markets with a
new global sales organisation and also implemented efficiency measures
throughout the company. This has resulted in an improved organisational
structure, a strong product portfolio and a record high order backlog. Sales
growth 2015 shows the strength in these efforts.

Challenging market
During the year, the security and defence market was influenced by major
geopolitical shifts, political events and the world economic situation. The
market continues to be challenging, meanwhile interest in Saab’s products and
services increases as they offer demanded functionality and cost efficiency.

Order backlog at historical level
At year-end, the order backlog amounted to MSEK 113,834 (60,128), which is more
than four times annual sales. During 2015, Saab received several large orders,
including Gripen for Brazil, the submarine A26 for Sweden and an airborne
surveillance system for the United Arab Emirates (UAE). In addition, the volume
of small and medium sized orders increased by more than 30 percent.

During 2015, sales amounted to MSEK 27,186 (23,527), an increase of 16 percent.
The organic sales growth amounted to 11 percent. All business areas reports
growth. The increase is mainly attributable to business area Aeronautics
following the order for Gripen to Brazil and the order for an airborne
surveillance system that was received in November 2015. This order had a
positive impact on sales in business areas Electronic Defence Systems and
Support and Services during the fourth quarter as preparation work was
recognised as sales upon signing of the contract.

Operating income amounted to MSEK 1,900 (1,659) during the year and the
operating margin was 7.0 percent (7.1). The operating income in the fourth
quarter was positively impacted by sales recognition in the large projects
mentioned above, and by large deliveries in business area Dynamics.

The operational cash flow amounted to MSEK -500 (-1,197) for the full year and
MSEK 653 (753) for the fourth quarter. Cash flow was positively impacted by
milestone payments related to Gripen for Brazil and the submarine A26 for
Sweden.

At the beginning of 2016, liquidity is strengthened by significant advance and
milestone payments. This will lead to a strengthened balance sheet and that the
net debt moves towards zero, depending on activity level, during the first
quarter 2016.

Strong foundation for future development
In an uncertain world, high efficiency and reduced lead times is a precondition
to meet customer requirements. We focus on execution of the large deliveries
that we have ahead of us the coming years. In addition, we strengthen the
efforts to make the company more efficient. As part of this work, a
reorganisation was implemented 1 January this year whereby business area
Security and Defence Solutions was dissolved and its business units moved to
other business areas. At the same time, we continue to increase sales efforts in
selected markets and to grow the volume of small and medium sized orders.

Saab has during 2015 continued to invest in product renewal, mainly within the
radar and sensor area and in the important T-X program, where the trainer
aircraft of the future is developed together with Boeing. This work will
continue during 2016.

Earnings per share after dilution amounted to SEK 12.79 (10.78).

The Board of Directors proposes a dividend for 2015 of SEK 5.00 per share
(4.75).

Outlook statement 2016:

  ·
In 2016, we estimate sales to be in line with Saab’s long-term financial goal:
annual organic sales growth of 5 per cent.

  ·
The operating margin 2016, excluding material non-recurring items, is expected
to be in line with 2015.

Financial highlights

MSEK                   Full     Full    Change, %  Q4 2015  Q4 2014
                       Year     Year
                       2015     2014
Order bookings         81,175   22,602  259        18,576   12,403
Order backlog          113,834  60,128  89
Sales                  27,186   23,527  16         10,070   7,425
Gross income           6,486    6,077   7          2,530    1,851
Gross margin, %        23.9     25.8               25.1     24.9
EBITDA                 2,859    2,523   13         1,600    987
EBITDA margin, %       10.5     10.7               15.9     13.3
Operating income       1,900    1,659   15         1,347    758
(EBIT)
Operating margin, %    7.0      7.1                13.4     10.2
Net income             1,402    1,168   20         1,109    586
Earnings per share     12.88    10.86              10.40    5.49
before dilution, SEK
Earnings per share     12.79    10.78              10.32    5.45
after dilution, SEK
Return on equity, %*   11.5     9.9
Free cash flow         -726     -1,094             869      1,006
Free cash flow per     -6.82    -10.23             8.15     9.47
share after dilution,
SEK
*The return on equity
is measured over a
rolling 12-month
period.

Press and analyst meeting

Saab invite to a press and analyst meeting, where CEO Håkan Buskhe and CFO
Magnus Örnberg present the 2015 year-end result.

Date: Wednesday, 10 February 2016 at 10:00 (CET)
Address: Grand Hôtel, Blasieholmshamnen 8, Stockholm, Sweden
Venue: New York

You are welcome to participate on site at Grand Hôtel, watch the live webcast or
dial in to the conference call. It is possible to post questions also over the
web and conference call.

Live webcast:
http://saab-interimreport.creo.se/160210

Conference call:
Please, dial in using one of the numbers below.
UK: +442030089808
SE: +46856642666
US: +18558315944

The interim report, the presentation material and the webcast will be available
on http://www.saabgroup.com/en/InvestorRelations.

R.S.V.P
E-mail: marie.bergstrom@saabgroup.com ´
Tel: +46 8 463 02 45

For further information, please contact:
Saab Press Centre,
+46 (0)734 180 018,
presscentre@saabgroup.com

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Saab serves the global market with world-leading products, services and
solutions within military defence and civil security. Saab has operations and
employees on all continents around the world. Through innovative, collaborative
and pragmatic thinking, Saab develops, adopts and improves new technology to
meet customers’ changing needs.

The information is that which Saab AB is required to declare by the Securities
Business Act and/or the Financial instruments Trading Act. The information was
submitted for publication on 10 February 2016 at 07.30 (CET).