Saab reported continued good order and sales growth for the first quarter of 2021. On this occasion, Saab’s President and CEO Micael Johansson (photo) made the following statement:
“In the first quarter, we continued to execute on our growth strategy to become a multi-domestic company and strengthen our position in strategic markets, despite the challenging pandemic environment. Saab continued to record good order intake in the first quarter, which increased 22%, supported by large orders from our defense related business. Order intake improved in several regions and was particularly strong in Sweden.
During the quarter, we secured a support contract for the Gripen C/D to Sweden and continued to drive growth in Ground Combat through orders for Carl-Gustaf M4 to the U.S. and Estonia as well as orders from Australia. During the quarter, Saab also signed a contract for delivery of the fire and control system UTAAS. The order backlog ended up at SEK 97 billion (US$11.5 billion).
Sales grew 13% in the quarter, supported by a solid order backlog and high activity level in Saab’s key programs. Four out of six business areas showed organic growth. The downturn in the civil aviation market, however, continued to affect the civil business, primarily within IPS, negatively.
Earnings showed an improvement in the first quarter. EBITDA for the Group increased 17% and amounted to SEK 1, 066 million, primarily driven by Dynamics, Surveillance and Support and Services. Operating income increased 7% compared to the same quarter last year and amounted to SEK 597 million (560), corresponding to a margin of 6.6% (7.0). Even if risks related to Covid-19 remain and the civil aviation market is down, we are managing the effects from the pandemic within the risk provisions and activities initiated in 2020.
Operational cash flow in the quarter improved compared to the first quarter 2020 and came in at SEK -160 million (-1,582). The improvement in cash flow was a result of higher EBITDA and lower investments as well as cash flow from milestone payments.
Apart from international expansion, our priority in 2021 is to increase focus on operational efficiency. We recently announced a new organizational structure, where six business areas becomes four, creating a clearer connection between businesses, core areas, services and a simplified customer interaction. This is to be implemented as of July 1, with the aim to support improved efficiency. Within the change, Saab is creating a new Operational Excellence function with focus on driving efficiency in the areas; project execution, quality, supply chain, sourcing and IT. The new structure will contribute to Saab's long-term goals.
Saab has a healthy financial position and we continue with our actions to improve efficiency, maintain our technological leadership and strengthen our market position. Altogether, this puts us in a good position to deliver on our targets. We reiterate our outlook for the full year 2021”.
Saab serves the global market with world-leading products, services and solutions within military defense 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.