SAABY - Saab AB (publ) (SAABF) Q4 2023 Earnings Call Transcript

2024-02-09 13:58:06 ET

Saab AB (publ) (SAABF)

Q4 2023 Earnings Conference Call

February 09, 2024, 03:30 AM ET

Company Participants

Merton Kaplan - Head-IR

Micael Johansson - CEO

Christian Luiga - CFO and Deputy CEO

Conference Call Participants

Erik Golrang - SEB

Bjorn Enarson - Danske Bank

Sash Tusa - Agency Partners

Sam Burgess - Citi

Presentation

Merton Kaplan

Hello, and a warm welcome to Saab's Q4 Results and Strategy Execution Update Event. My name is Merton Kaplan. I'm the Head of Investor Relations here at Saab, and I will also be your moderator.

So, with that, I want to welcome you again here. We have a full live audience, and we also have viewers online. So we'll be webcasting this and streaming this online for our viewers. So, 2023 was a year with a lot of things happening and impacting our industry. And this, obviously, had implications and impacts on Saab as well. So, we're here today to discuss and talk about Saab's growth journey and the next steps that we're taking on that path. That is also what we'll cover in today's agenda. So I'll walk through that with you briefly.

So, we will focus on three things, actually, and that's the recap of the Q4 results, and then we'll have a deep dive into the strategy execution updates. And we have saved a Q&A that is a bit longer than usual for you. So we're going to take all the questions afterwards. And for our viewers online, you have a link in the press release from this morning and also in the report that you have to click to, and we have a telco moderator that will assist you. So, we will do Q&A live and with the audience online. We also have a chat for those who wants to type in their questions.

So, without further ado, I want to start the program. And with great pleasure, I want to invite you, Saab's CEO, Micael Johansson, to the stage.

Micael Johansson

Thank you. Good morning, everyone, and most welcome to Saab today, and also to you all online. Great to see so many people in the room. This is sort of a bit unusual now to have this setup, but I look forward to it.

Of course, I'm - we'll try to give you a view of the Q4 result as a start and then talk about the full year and what happened during the year, and then look forward a bit and give you a strategy update on what we talked about in the Capital Market Day in February '23.

So, it will be a whole package, and we have a little bit more time today, myself and Christian Luiga, and I look forward to all the questions, of course, that you might have. And we'll discuss the future as well and why we have updated our long term and mid-term targets, of course, looking at what we see around us and our position in the marketplace.

So let's start directly then with looking into what happened during the year. We had a very strong year and, I mean, look at the market position that we have now, generating almost SEK78 billion in order intake. We are strong in all the home markets, as I call them, or focus markets, strong in Sweden and all the other countries where we have established ourselves as a company.

And this is an order intake that is not built upon what we call the mega deals. So it's lots of mid-size orders and small orders as well. And of course, we are chasing the big orders as well, but we don't build our whole future on them. So, this is really strong. And for the first time, we have passed the SEK50 billion mark in terms of turnover, SEK51.6 billion. And we grew almost 23% organically last year. And this is sort of in the higher end then of the guidance that we gave for '23.

EBIT grow more than the turnover, which we have always said it will, and it was 30%. And we take the right steps all the time. So, we improved our margin with 0.5%. And this is, of course, in a very strong growth scenario, which we have to think about. We need to be able to invest and spend money on capturing marketing opportunities, of course, and we employed lots of people and - but we still have to have the right trend on profitability.

And we had a very strong Q4 on cash flow. So, we ended up with SEK3.2 billion in cash flow, which is SEK0.6 billion higher than last year. And that is also a good, good sort of cash flow level. Looking at that, we actually spent SEK1.3 billion more in investment in '23 than we did in '22.

A few highlights from the fourth quarter, also strong quarter, building the full strong year, 16% growth, SEK31.5 billion order intake, and also a good profitability level. The profitability level was affected by minority write-down; and if you had added that back SEK66 million, we would have been at 9.2 roughly. And then again, you have to remember, we spend lots of money in marketing now, trying to catch market opportunities. But also, we have evened out the quarters over a year quite a lot. So I still think this is a very strong quarter, adding up to a very strong year....

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