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SAAB

PRESENTATION TODEBT INVESTORS

19 SEPTEMBER 2017

Magnus Örnberg, EVP and CFOSaab AB

AGENDA

2

1. Transaction overview

2. Overview of Saab

3. Market & Q2 financial update

• Sales of SEK 30,130m LTM Q2 2017

• Total assets of SEK 40,546m in Q22017

• EBITDA of SEK 2,981m LTM Q2 2017

TRANSACTION OVERVIEW

3

• Tender offer for December 2018 FRN (SEK 950m) and FXD(SEK 450m)

• New 5 year issue subject to market conditions

• Rationale behind transaction‒ Prudent risk management and refinance over 1 year prior

to maturity‒ Financial flexibility and secure long-term funding

AN OVERVIEW OF SAAB (2016)

• World-leading high-tech solutions, products andservices for military defence and civil security

• Sales SEK 28.6 billion and order backlogSEK 107 billion

• 15,465 employees, local presence in 34 countries andcustomers in 100 countries worldwide

• B-share listed on Nasdaq Stockholm’s Large Cap

• Approx. 34,000 shareholders, Investor AB mainshareholder with 30 percent of capital

4

100CUSTOMER COUNTRIES

% 46

20

16

88 2

Air

Land

Naval

Security

Commercial aeronautics

Other

AT THE FOREFRONT OF CHANGE

1941First B17delivered

1979First RBS 15ordered

1990First lasersimulator BT46

1961Viggenintroduced

1955Drakenfirst flight

2002First contractNLAW

1993First Gripendelivered

2005Neuroncontract

2006Saab 2000A&EW

2008First flightGripen Demo

2014Carl-GustafM4 launch

2011RBS 70 NGlaunch

5

1990Saab Automobileindependent company

1937Saabfounded

2000Celsiusacquired

2005Grintekacquired

2007SeaEye Marineacquired

2012HITT acquired

2014TKMS Kockumsacquired

1894Alfred Nobelacquires Bofors

1646Boforsfounded

1948First Carl-Gustaforder

1998StriC inoperation

1950-Development offighter radar

1970-Development ofGiraffe radar family

1980-Development ofArthur

1990-Sea Giraffe AMBlaunched

2006Ericsson MicrowaveSystems acquired

1987Celsius

1989Kockums AB

1999HDW

2005ThyssenKrupp

1679ÖrlogsvarvetKarlskrona

1840KockumsMalmö

1977Svenska Varv

COMPETITIVE PRODUCTS, GLOBAL MARKET

6

Aeronautics

Asia Pacific

Latin America

North America

Surveillance

Dynamics Support & Services

Industrial Products & Services

Kockums Europe

Middle East& Africa

ORGANISATION

7

GroupFunctions

Market Areas

CEO

Business Areas

Europe

LatinAmerica

Middle East& Africa

AsiaPacific

NorthAmerica

ü Sales to 100 countries ü 65-80% of sales outside Sweden ü Presence in 35 countries

MARKET UPDATE

• Increasing demand for cost-efficient solutions

• Short lead times important

• Local partnership for research anddevelopment and production

-1% -4% -2% -1%-3%

11%5%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

2010 2011 2012 2013 2014 2015 2016 Long-termtarget

Sales Organic growth

Execution 2010-2015

Long-term target: Organicgrowth of 5 per cent p.a.

M&A drivengrowth

Target

TODAY: GROWTH OPPORTUNITY MARKET

9

OWNERSHIPAS OF 31 AUGUST 2017

Share facts:

Ticker: SAAB BNasdaq Stockholm Large CapMarket cap: ~ SEK 40 bn

74%

8%3%

1%14%

Holding per region, %

SwedenUSNorwayUKOther

10

# Owner Capital Votes

1 Investor 30,0% 40,3%

2 Knut and Alice Wallenbergsfoundation

8,8% 7,7%

3 Swedbank Robur Funds 4,7% 4,2%

4 AFA Insurance 2,4% 2,1%

5 Fidelity 2,0% 1,8%

6 Norges Bank 1,9% 1,7%

7 Handelsbanken Funds 1,7% 1,5%

8 Unionen 1,7% 1,5%

9 2 AP-Fund 1,2% 1,1%

10 Lannebo Funds 1,2% 1,1%

Total outstanding shares: 107 243 221

SUMMARY JANUARY – JUNE 2017

• Sustained growth in order bookings

• Improved sales and operating income for all business

areas

• Increase in operating margin, driven by strengthened

profitability in business area Dynamics

• Cash flow negative, in line with expectations

• Continued stable balance sheet

11

SAAB FOCUS 2017

• Focus on execution of large projects – project

management

• Build order backlog in selected areas

• Drive efficiency improvements throughout the

organisation

‒ Functional and operational excellence

12

NEW MANAGEMENT TEAM FROM 1/10-17

13

Håkan BuskhePresident & CEO

Micael JohanssonDeputy CEO & Senior Executive Vice President

Magnus ÖrnbergExecutive Vice President & CFO

Lena EliassonHead of Group Human Resources

Annika BäremoHead of Group Legal Affairs

Ann-Kristin AdolfssonHead of Group Strategy

Sebastian CarlssonHead of Group Communications

Jonas HjelmHead of Aeronautics

Görgen JohanssonHead of Dynamics

Anders CarpHead of Surveillance

Ellen MolinHead of Support

and Services

Jessica ÖbergHead of Industrial

Products and Services

Gunnar WieslanderHead of Kockums

CFO & President andDeputies

Group Functions

Business Areas

FINANCIAL KEY DATA

14

MSEK Jan-Jun2017

Jan-Jun2016 Change FY 2016

Order Bookings 20,554 11,462 79 % 21,828

Order Backlog 112,117 111,593 107,606

Sales 15,353 13,854 11 % 28,631

Operating Income 885 611 45 % 1,797

operating margin, % 5.8 4.4 6.3

Net Income 659 414 59 % 1,175

Operational Cash Flow -443 4,193 2,603

Free Cash Flow -532 4,051 2,359

ORDER BACKLOG

15

• Strong order backlog in all business areas

• Dynamics received several large orders in the period

Order Backlog Duration BSEK

30 June 2017 30 June 2016 31 December 2016

2017 14.8 2016 13.2 2017 24.5

2018 22.5 2017 19.2 2018 17.0

2019 17.6 2018 13.2 2019 13.5

2020 15.8 2019 12.2 2020 15.8

2020- 41.4 2019- 53.8 2020- 36.8

Total 112.1 Total 111.6 Total 107.6

ORDER SIZE DISTRIBUTION

16

0

0,5

1

1,5

2

2,5

3

3,5

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

50 000

Q1'13

Q2'13

Q3'13

Q4'13

Q1'14

Q2'14

Q3'14

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Q1'16

Q2'16

Q3'16

Q4'16

Q1'17

Q2'17

Small orders* Large orders Book-to-bill ratio**

74%

26%

Large Orders

Small Orders*

Jan-Jun 2017

MSE

K

*Small orders = <MSEK 100**Book-to-bill ratio calculated as 12 months rolling

ORDER BOOKINGS & BACKLOG PER BA

01234567

Aeronautics Dynamics Surveillance S&S IPS Kockums

BS

EK

Jan-Jun 2016 Jan-Jun 2017

17

• Significant order within theAirborne Early Warning andControl Segment.

• Kockums signed contract formodification and upgrading ofCorvettes.

• Dynamics received order forNext Generation Light Anti-TankWeapon System (NLAW).

• Continued support andmaintenance of Gripen C/Dinvolving several business areas.

0

10

20

30

40


BS

EK

Jun'16 Jun'17

Order Bookings

Order Backlog60

SALES PER BA

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500


MS

EK


+11%

+23%

+11%

+23%

18

• Sales increase in all business areas

• Support & Services and Kockumsexperiencing strong growth

• Combitech driving force behind salesgrowth in business area Industrial,Products and Services (IPS)

+5%

+1%

OPERATING INCOME PER BA

0

50

100

150

200

250

300


MS

EK


3.3 4.8 4.2 4.2

19

• Improved operating income for allbusiness areas

• Substantial growth in operating incomeand margin for Dynamics

• Higher activity level in operationsrelated to airborne surveillancesystems

EBIT Margin 5.0 5.2 3.7 9.6 9.0 9.0 5.3 5.4

-1 000

-500

0

500

1 000

1 500

2 000

Cash Flow from OperatingActivities before Changesin Working Capital

Change inWorking Capital

Investing ActivitiesTax and OtherFinancial Items

CASH FLOW JAN – JUN 2017

20

MSEK

Cash Flow from Operating Activities beforeChanges in Working Capital 1,517

Change in Working Capital -1,005

Investing Activities -955

Operational Cash Flow -443

Tax and Other FinancialItems -83

Acquisitions and Sale of Subsidiaries andOther Financial Assets -6

Free Cash Flow -532

Acquisitions andSale of Subsidiariesand Other FinancialAssets

MS

EK

FINANCIAL POSITION

21

33%Equity/Assets

Ratio

MSEK

Net Liquidity (+) / Net Debt (-), 31 December 2016 -1,836

Cash Flow from Operating Activities 429

Change in Net Pension Obligation -266

Net Investments -955

Dividend -559

Currency Impact and Unrealised Results from Financial Investment -9

Net Liquidity (+) / Net Debt (-), 30 June 2017 -3,196

Net Pension Obligation, 30 June 2017 2,690

Total Interest-Bearing Assets, 30 June 2017 -608

Liquidity -1,114

124Equity per Share

(SEK)

SAAB

19 SEPTEMBER 2017

Stefan Lind VP and Group TreasurerSaab AB

GOVERNANCE – POLICY FOR FUNDING

Policy requirement:

• Free cash, together with committed unutilized creditfacilities, shall always be higher than MSEK 4,000*

• Or the higher of:• 10% of Group turnover• Risk Weighted amount of all guarantees issued by banks

with counter indemnity on Saab.

* Adjusted for loans with maturity within 12 months

23

FREE CASH REQUIREMENT

24

Saab should always have free cash adjusted for loans with maturity within 12 monthstogether with unutilized committed credit facilities that shall never be less than;

MSEKHighest of 1706 1703 1612 - MSEK 4 000 4 000 3 000 - 10% of Groups turnover (28 631) 2 863 2 863 2 863 - Risk Weigthed Guarantee amount 3 989 4 113 6 151

Present Free Cash & Facility - Liquid Assets 3 714 5 931 5 636 - Unutilized Committed Facility (RCF) 6 000 6 000 6 000 - Short Loans (duration < 12 months) 0 0 0

9 714 11 931 11 636

Headroom 5 714 7 818 5 485

AVAILABLE FUNDING AND FUNDING STRATEGY

25

The Saab group funding strategy is focused on minimizing the refinancing risk by adiversification of the funding sources as well as maturities;

900

900

900

900

900

500

500

500Available Funding YTD2017 06 2016 2015 2014

Revolving Credit Facility (RCF) 6 000 6 000 6 000 4 000Available Cash & Commited Facilities 6 000 6 000 6 000 4 000

Receivable Sales Program 1 475 1 475 1 475 1 475 - Utilized 0 0 -1 299 -1 071

Commercial Paper program (CP) 5 000 5 000 5 000 5 000 - Utilized 0 0 -400 0Medium Term Note program (MTN) 6 000 6 000 6 000 3 000 - Utilized -4 150 -4 150 -4 150 -2 000Schuldschein bilateral loans 926 926 926 - - Utilized -926 -926 -216 -Unutilized funding programs 8 325 8 325 7 336 6 404

Total 14 325 14 325 13 336 10 404

Full Year Bank facilities strategyRevolving Credit FacilitiesDerivativesGuaranteesReceivable SalesBridge Financing

Medium and long term funding strategyCommercial papersMTN loansBilateral loans -Schuldschein

MATURITY PROFILE

26

The maturity profile should be diversified over time to minimizerefinancing risk. Issue of 5 year loan meets the fundingstrategy well;

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2018 2019 2020 2021 2022 2023 2024

Maturity profile

MTN SSD

MTN SSD RCF Total2018 1 350 1 3502019 1 575 1 5752020 425 4252021 400 759 1 1592022 0 47 6 000 6 0472023 0 142 1422024 400 0 400

4 150 948 6 000 11 098MTN = Medium Term NotesSSD = SchuldscheinRCF = Revolving Credit Facility

MSEK

MSEK

LONG-TERM FINANCIAL GOALS

27

Organic sales growthaveraging 5 per cent annuallyover a business cycle.

Operating margin afterdepreciation and amortisation(EBIT) of at least 10 per centannually over a business cycle.

Equity/assets ratio of over 30per cent.

5%

10%

>30%

• Focus on areas with strong market position• Strengthen position in areas with growth

possibilities• Local partnerships

• Project execution• Operational excellence• Continuoulsy develop leaders and employees

• Further strengthen core areas• Invest in research and development• Diversity drives innovation

PERF

ORM

ANCE

INNO

VATI

ON

MAR

KET

OUTLOOK STATEMENT 2017

28

• We estimate that sales growth in 2017 will be higherthan Saab’s long-term financial goal:annual organic sales growth of 5 per cent.

• We expect the operating margin, excluding materialnon-recurring items, to improve compared to 2016 andthus the company will take a step towards its financialgoal: an operating margin of 10 per cent.

WWW.SAABGROUP.COM

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