During the third quarter, the Swiss Parliament confirmed its support for the procurement of Gripen E, the next generation of Gripen. A potential public referendum remains before an order could be received in 2014. We also note a great interest for Gripen from other countries.
Order intake increased by 59 per cent during the first nine months of 2013 compared to 2012. We received several important orders, e.g. from FMV regarding the development of Gripen E, and a contract for the installation and commission of electronic security systems for the Australian Department of Defence. Particularly pleasing is the contract with the Spanish Navy regarding the use of the unmanned aircraft system Skeldar UAS for surveillance during the EU mission in the Gulf of Aden.
At the same time, reduced state budgets, primarily in the U.S. and Europe, affects the defence and security industry as appropriations to the defence sector and other state funded programmes decline and competition intensifies. Within the defence sector, investments in the land area are declining and with a stronger focus on the air and naval area.
Sales amounted to MSEK 16,471 in the period, an organic decline of 2 per cent. We saw a lower activity level primarily within the business areas Dynamics and Electronic Defence Systems.
The reported operating income during the first nine months amounted to MSEK 811 (1,395) and the operating margin was 4.9 per cent (8.4).
Excluding material non-recurring items, operating income amounted to MSEK 1,042 (1,188) and the operating margin was 6.3 per cent (7.1).
The business area Electronic Defence Systems showed a positive operating income during the third quarter, but the large investments to strengthen our product portfolio as well as ongoing restructuring measures continue. Dynamics reported a loss in the third quarter as a consequence of a low activity level.
In July we announced that further efficiency measures will be implemented in order to create larger scope for investments that will help us reach our long term targets.
Efficiency measures during 2013 are expected to contribute with approximately MSEK 500 in efficiency improvements by the end of 2014.
During the third quarter Dynamics announced that negotiations have been initiated aiming at reducing headcount by 70 people at the production facility in Karlskoga, Sweden. Electronic Defence Systems in Gothenburg, Sweden, announced that headcount is planned to be reduced by 150-175 employees by means of a competence shift programme. Furthermore, measures have been initiated to strengthen efficiency within group wide functions.
The lower operating cash flow is mainly attributable to timing differences in milestone payments in large projects and investments and acquisitions, together with a payment related to the command and control system DACCIS that was made during the period.
Earnings per share after dilution amounted to SEK 4.21.
After the conclusion of the period we received an order for radar and combat management systems for the royal Thai navy frigate amounting to MSEK 850 as well as an order for components for the weapon system Carl-Gustaf of MSEK 434.
Outlook statement 2013:
- Estimated sales in 2013 will be in line with 2012.
- The operating margin in 2013, excluding material net capital gains and other non-recurring items, is expected to be in line with the operating margin in the first half-year 2013, excluding material non-recurring items.
Excluding material non-recurring items, operating income in the first half-year 2013 amounted to MSEK 776 and the operating margin was 6.6 per cent.
|MSEK||Jan-Sep 2013||Jan-Sep 2012||Change, %||Jul-Sep 2013||Jul-Sep 2012||Jan-Dec 2012|
|Gross margin, %||27.2||29.5||26.8||27.7||30.0|
|Operating income before depreciation/amortisation and write-downs (EBITDA)||1,557||2,262||-31||515||567||3,186|
|Operating income (EBIT)||811||1 395||-42||266||262||2,050|
|Operating margin, %||4.9||8.4||5.6||5.3||8.5|
|Earnings per share before dilution, SEK||4.34||9.81||1.78||1.58||15.00|
|Earnings per share after dilution, SEK||4.21||9.49||1.73||1.53||14.52|
|Return on equity, %*||8.8||12.2||12.8|
|Operating cash flow **||-2,027||-660||-936||-856||-396|
|Operating cash flow per share after dilution, SEK||-18.57||-6.05||-8.58||-7.84||-3.63|
* The return on equity is measured over at rolling 12-month period
** Operating cash flow includes cash flow from operating activities of MSEK -1 382 (-424) and cash flow from investing activities excluding change in short-term investments and other interest-bearing financial assets of MSEK -645 (-236)
Alla belopp för 2012 har omräknats enligt förändringen i redovisningsprinciper för pensioner (IAS 19). Belopp för 2011 och tidigare perioder har inte omräknats.
Source / Author: Saab