16 February, 2018

YEAR-END REPORT 2017

Håkan Buskhe, President and CEOMagnus Örnberg, EVP and CFO

MARKET DEVELOPMENT

• High global spending on defence and security

• Geopolitical tensions and improving economic conditionsdriving factors for increased spending

• Global defence spending in 2018 expected to increase vs 2017

• The US and Europe expected to grow defence budgets

• Several European countries estimated to meet the NATO target of 2 per cent of GDP spending on defence in 2018

• Next generation technologies in focus

• Cyber security

2

HIGHLIGHTS 2017

• High interest globally in Saab offering

• Several strategic partnerships formed to strengthenlocal market position

• Offers US, based production capability for T-X traineraircraft, if Boeing/Saab selected*

• Slovakia became first customer to deploy the Carl-Gustaf M4 System

• Australia pointed to Saab for Combat Management Systems (CMS) in future Naval platforms

3

Sweden45%

RoE17%

North America

9%

Latin America

3%

Asia18%

Africa2%

Australia, etc6%

Order bookings

Sweden37%

RoE9%

North America

4%

Latin America

35%

Asia12%

Africa1%

Australia, etc2%

Order backlog

*Saab together with Boeing are competing to win the tender process to supply the United States Air Force with an advanced trainer aircraft

MARKET

HIGHLIGHTS 2017

4

• Strong order bookings, increase of 41 per cent y-o-y*

• Strengthened sales and operating income

• All business areas improved sales

• Improved operating margin

• Good cash flow; strong balance sheet

• Taken a step towards our long-term operating margintarget of 10 per cent

PERFORMANCE

*Year-over-year

HIGHLIGHTS 2017

5

• 23 per cent of sales invested in R&D

• Succesful first flight Gripen E in June; supersonic flight in October

• Order for New Generation anti-ship missile system from Sweden (FMV*)

• Saab Digital Air Services, provide remote digital air traffic control to further airports in Sweden

• Order for delivery of a Special Purpose Ship for Signal Intelligence (SIGINT) to Sweden

*The Swedish Defence Material Administration

INNOVATION

ORDERS RECEIVED IN 2017

6

FINANCIAL HIGHLIGHTS YEAR-END 2017

7

0

5

10

15

20

25

30

35 Sales

FY 2016 FY 20170

0,5

1

1,5

2

2,5

3 Operating Income

FY 2016 FY 2017

BSEK

BSEK

BSEK

BSEK

0

5

10

15

20

25

30

35Order Bookings

FY 2016 FY 20170

20

40

60

80

100

120

Order Backlog

FY 2016 FY 2017

21.8

30.8

28.631.4

107.6 106.8

1.8

2.2

EBIT-margin 6.3 6.9

+41%

+10%

CONTINUED EFFICIENCY IMPROVEMENT

• Continuously focus on efficient project execution

• Digitalisation drives efficiency improvements‒ Automation‒ IT-infrastructures‒ Aligned organisational setup

• Focus on improved cash conversion

• Shorten lead-times

8

OUTLOOK STATEMENT 2018

9

• Sales growth in 2018 is expected to be in line with

Saab’s long-term goal: annual organic growth of 5 per

cent.

• The operating margin in 2018, excluding material non-

recurring items, is expected to improve compared to

2017, bringing Saab a further step closer to its financial

goal: an operating margin of 10 per cent over a

business cycle.

LONG-TERM FINANCIAL GOALS

10

Organic sales growthaveraging 5 per cent annually over a business cycle.

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

Equity/assets ratio of over 30 per cent.

5%

10%

>30%

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

possibilities• Local partnerships

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

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

MA

RK

ETPE

RFO

RM

AN

CE

INN

OVA

TIO

N

FINANCIAL UPDATE

11

SUMMARY 2017

• Strong order backlog; good level of medium-sized order bookings

• Continued strong sales growth, sales increase in all business areas

• Strengthened operating margin; Dynamics, airborne surveillance operations and support business good margin development

• Good cash flow, with large milestone payments related to large projects received

• Balance sheet strong

12

FINANCIAL KEY DATA

13

MSEK FY 2017 FY 2016 Change

Order Bookings 30,841 21,828 41

Order Backlog 106,849 107,606 -1

Sales 31,394 28,631 10

Operating Income 2,155 1,797 20

operating margin, % 6.9 6.3

Net Income 1,438 1,175 22

Operational Cash Flow 1,388 2,603

Free Cash Flow 852 2,359

ORDER BACKLOG

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Order Backlog Duration BSEK

31 Dec 2017 31 Dec 2016 31 Dec 2015

2018 25.0 2017 24.5 2016 21.8

2019 20.0 2018 17.0 2017 15.9

2020 17.0 2019 13.5 2018 12.3

2021 17.0 2020 15.8 2019 11.7

2021- 27.8 2020- 36.8 2019- 52.1

Total 106.8 Total 107.6 Total 113.8

ORDER SIZE DISTRIBUTION

15

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

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

65%

35%

Large Orders

Small Orders*

FY 2017

MS

EK

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

ORDER BOOKINGS & BACKLOG PER BA

0

2

4

6

8

10

Aeronautics Dynamics Surveillance S&S IPS Kockums

BSEK

FY 2016 FY 2017

16

• Significant orders within the Airborne Early Warning and Control Segment

• Kockums signed contract for modification and upgrading ofSwedish Corvettes

• Dynamics received orders for Next Generation Light Anti-Tank Weapon System (NLAW)

• Continued support and maintenance of Gripen C/D involving several business areas

• Good level of medium sizedorders0

10

20

30

40

Aeronautics Dynamics Surveillance S&S IPS Kockums

BSEK

FY 2016 FY 2017

Order Bookings

Order Backlog60

SALES PER BUSINESS AREA

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

Aeronautics Dynamics Surveillance S&S IPS Kockums

MS

EK

FY 2016 FY 2017

+7%

+22%

+12%

+17%

17

• Sales increase in all business areas

• Dynamics delivering growth from record high order backlog

• Support & Services had strong growthin airborne surveillance operations

• Combitech, part of IPS, deliveredstrong growth

+2%

+5%

OPERATING INCOME PER BUSINESS AREA

0

100

200

300

400

500

600

700

800

Aeronautics Dynamics Surveillance S&S IPS Kockums

MS

EK

FY 2016 FY 2017

5.9 7.4 3.7 3.4

18

• Substantial growth in operating incomeand margin for Dynamics, Support and Services and Surveillance

• Higher activity level in operations related to airborne surveillancesystems

• Support business strong profitability

• Lower operating earnings related to Gripen C/D due to changed projectmix

EBIT Margin 7.5 6.6 9.1 10.9 8.9 10.9 5.8 5.8

-2 000

-1 000

0

1 000

2 000

3 000

4 000

Cash Flow from Operating Activities before Changes in Working Capital

Change in Working Capital

Investing Activities

Tax and OtherFinancial Items

CASH FLOW 2017

19

MSEK

Cash Flow from Operating Activities before Changes in Working Capital 3,593

Change in Working Capital -73

Investing Activities -2,132

Operational Cash Flow 1,388

Tax and Other Financial Items -356

Acquisitions and Sale of Subsidiaries and Other Financial Assets -180

Free Cash Flow 852

Acquisitions and Saleof Subsidiaries and Other FinancialAssets

MS

EK

FINANCIAL POSITION

20

32%Equity/Assets

Ratio

MSEK

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

Cash Flow from Operating Activities 3,164

Change in Net Pension Obligation -222

Net Investments -2,132

Dividend -559

Currency Impact, Unrealised Results from Financial Investments and Acquisition of operations -249

Net Liquidity (+) / Net Debt (-), 31 December 2017 -1,834

Net Pension Obligation, 31 December 2017 2,646

Total Interest-Bearing Assets, 31 December 2017 -468

Liquidity 344

133Equity per Share

(SEK)

FOCUS 2018

• Continued focus on execution of large

projects – project management

• Build order backlog in selected areas

• Drive efficiency improvements throughout

the organisation

‒ Functional and operational excellence

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