Result shows increased sales
Today Saab’s half-yearly report was published. Despite turbulence on the financial market and falling order bookings, Saab received several important orders within strategic areas and sales increased.
“The fact that sales are increasing despite the financial turmoil and changes within the Swedish Armed Forces demonstrates our ability to manage projects efficiently and deliver on time. Our current Billion+ programme is continuing as planned and has contributed to increased profitability during the second quarter compared with the first quarter of this year. That order bookings are down is due primarily to certain large orders being delayed, as well as a large order from Thailand that we received last year. One very positive aspect, however, is the large orders that we recently received within the civil security field and other strategic areas capable of providing future growth,” says President and CEO Åke Svensson, commenting on the half-yearly results.
The previous outlook has been that Saab would see sales figures for 2009 similar to those of 2008. However, sales during the year have so far increased by 8 percent adjusted for exchange rate effects and the sale of Saab Space, which has led Saab to alter its sales outlook for the full year 2009.
“Sales will increase during 2009 compared with 2008, but we have chosen to adopt a conservative outlook for the moment. The market continues to fluctuate and we can see delays in larger contracts, while investment decisions are being postponed as a result of difficulties in securing financing, among other things,” says Saab’s CFO Lars Granlöf.
“The effort being put into the Billion+ programme is vital for ensuring our future profitability as well as our ability to invest in future growth. The fact that profitability during the first half of 2009 is lower than in 2008 is due largely to our changed approach to accounting for development costs.”
Saab experienced continued negative cash flow during the first half of the year. One reason for this is the continuous stockpiling required for future deliveries within several major contracts.
“During the first half of the year, our focus on collecting payments from customers has had a positive effect. Unfortunately, it has not been enough to offset increases in inventories and ongoing project work where no new milestone payments have been received. It is of the utmost importance that we continue to focus on cash flow by improving management of our working capital and other measures,” says Lars Granlöf.
Saab’s future development depends on the Swedish Armed Forces’ plans, and will continue to be affected by the global economy. This leads to uncertainty about our future market conditions.
“In general, we are experiencing a reduced demand during the first half of the year compared with the same period last year. Postponed procurements within a number of major projects as a result of the weak global economy have had a negative effect. We have seen several orders cancelled within the commercial aircraft industry, and project delays,” says CEO Åke Svensson. “We will continue to pursue our long-term strategy to expand on markets outside of Sweden and to increase our share of the civil security market.”
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