ADMINISTRATION <strong>REPORT</strong> > segment reportingSEGMENT reportingAs of 2010, <strong>Saab</strong>’s operations are divided into five businesssegments – Aeronautics, Dynamics, ElectronicDefence Systems, Security and Defence Solutions,and Support and Services – for control and reportingpurposes.In <strong>2009</strong>, we reported for the last time with the three businesssegments Defence and Security Solutions, Systemsand Products, and Aeronautics. The three segments comprisea total of 15 business units, which work togetherbased on customers’ needs to utilise the Group’s entirerange of competencies in the most effective way possible.One business segment always has prime responsibility forthe order.In addition to the business segments, Corporate comprisesGroup staffs and departments and peripheral operations.It also includes the leasing fleet of <strong>Saab</strong> 340 and<strong>Saab</strong> 2000 aircraft. As of 1 January 2010, Combitech isalso reported within Corporate.Defence and Security Solutions comprisethe following business units:• <strong>Saab</strong> Aerotech• Combitech• <strong>Saab</strong> Grintek Technologies• <strong>Saab</strong> Security• <strong>Saab</strong> Surveillance Systems• <strong>Saab</strong> SystemsSystems and Products comprise thefollowing business units:• <strong>Saab</strong> Avitronics• <strong>Saab</strong> Barracuda• <strong>Saab</strong> Bofors Dynamics• <strong>Saab</strong> Microwave Systems• <strong>Saab</strong> Training Systems• <strong>Saab</strong> Underwater SystemsAeronautics comprises the followingbusiness units:• <strong>Saab</strong> Aerosystems• <strong>Saab</strong> Aerostructures• Gripen InternationalSHARE OF SALES, 36% SHARE OF SALES, 36% SHARE OF SALES, 28%36 saab <strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2009</strong>
ADMINISTRATION <strong>REPORT</strong> > defence and security solutionsDefence and Security SolutionsDefence and Security Solutions develop and integratehigh-technology systems for reconnaissance, surveillance,communication and command and control for military andcivil applications. The business segment also includesconsulting services in systems development, systems integrationand information and system security. In addition,<strong>Saab</strong> offers a wide range of life-cycle support solutions.SALES, INCOME AND ORDERSOrders receivedOrder bookings in <strong>2009</strong> decreased by 1 per cent compared to 2008.Orders received where the order sum was more than MSEK 100 represented33 percent (32) of total order bookings.SalesSales for Defence and Security Solutions increased by 3 per centcompared to 2008. Sales were positively affected by approximately 3percentage points in <strong>2009</strong> by the appreciation of the AUD and ZARagainst the SEK. International sales accounted for 52 per cent (54); 68per cent (70) was from the defence market.Income and marginDuring <strong>2009</strong>, profitability was impacted by an unfavourable projectmix. In addition, profitability was negatively impacted by projectoverruns during the fourth quarter. Structural costs of MSEK 20 wererecorded during the fourth quarter for lay-offs related to the supportand service business. The lay-offs were announced in April <strong>2009</strong>.Cash flowOperating cash flow improved in <strong>2009</strong> compared to 2008 due to amajor milestone payment received in the second quarter of <strong>2009</strong>,whereas working capital increased in the second half of <strong>2009</strong> as aresult of preparations for deliveries in 2010.EmployeesThe number of employees increased during the year mainly due tothe acquisition of 60 per cent of the shares in the former joint ventureTieto<strong>Saab</strong> Systems in Finland. The amount of FTE’s (Full TimeEquivalents) at the end of <strong>2009</strong> was 4,646.Key financial ratios forDefence and Security Solutions,MSEK <strong>2009</strong> 2008Order bookings 9,939 9,997Order backlog at year-end 11,726 10,918Sales 9,697 9,443Operating income 678 732Operating margin, % 7.0 7.8Non-recurring items -20 -103Adjusted operating margin, % 7.2 8,8Depreciation/amortisationand impairments 203 287Operating cash flow 38 -322Capital employed 5,679 4,510Gross capital expenditures 52 121Number of employees 4,723 4,666sales,msekOperating incomeand marginshare of sales<strong>2009</strong>, %10,0001,000128,0008006,000600104,00040082,00020002005200620072008<strong>2009</strong>020052006200720086<strong>2009</strong>Operating income, MSEK Margin, % Defence-related, 68% Civil, 32%saab <strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2009</strong> 37