===== SIDA 1 ===== Growth momentum in an evolving market Q3 INTERIM REPORT 2023 ===== SIDA 2 ===== 2 IN TER IM R EPO RT Q3 2023 July-September 2023 Key Highlights ▪ Order intake amounted to SEK 14,977m (7,772) with strong growth in all order sizes in the quarter. ▪ Sales increased to SEK 11,527m (8,751) with an organic growth of 31%, driven by growth in all business areas. ▪ EBITDA increased 28% and amounted to SEK 1,424m (1,115), corresponding to an EBITDA margin of 12.4% (12.7). ▪ Operating income (EBIT) increased 51% and amounted to SEK 859m (568). The EBIT margin was 7.5% (6.5) with improvements in several business areas in the quarter. ▪ Net income for the period increased to SEK 656m (324) and earnings per share amounted to SEK 4.84 (2.28). ▪ Operational cash flow in the quarter was SEK -2,058m (559) mainly due to timing of customer payments combined with higher investments. ▪ Net liquidity position in the quarter was SEK 1.4 bn (0.4). ▪ Upgraded outlook for organic sales growth 2023: organic sales growth to be between 19-23%, compared to previous outlook of 16-20%. MSEK Jan-Sep 2023 Jan-Sep 2022 Change, % Q3 2023 Q3 2022 Change, % Full Year 2022 Order bookings 46,310 33,250 39 14,977 7,772 93 63,116 Order backlog 138,501 112,025 24 127,676 Sales 35,487 28,140 26 11,527 8,751 32 42,006 Gross income 7,743 6,037 28 2,481 1,881 32 8,886 Gross margin, % 21.8 21.5 21.5 21.5 21.2 EBITDA 4,526 3,518 29 1,424 1,115 28 5,401 EBITDA margin, % 12.8 12.5 12.4 12.7 12.9 Operating income (EBIT) 2,852 1,960 46 859 568 51 3,274 Operating margin, % 8.0 7.0 7.5 6.5 7.8 Net income 2,189 1,129 94 656 324 102 2,283 of which Parent Company’s shareholders’ interest 2,158 1,080 100 652 305 114 2,195 Earnings per share after dilution, SEK 16.06 8.08 99 4.84 2.28 112 16.41 Return on equity, % ¹⁾ 11.2 7.6 8.6 Operational cash flow -534 911 -2,058 559 2,593 Free cash flow -993 432 -2,554 398 1,871 Free cash flow per share after dilution, SEK -7.39 3.23 -18.98 2.97 13.99 Average number of shares after dilution 134,368,067 133,608,085 134,586,542 133,842,175 133,724,223 ¹⁾ Return on equity is measured over a rolling 12-month period. 15 Order bookings, SEK bn 31 Organic sales growth, % 7.5 Operating margin, % Financial highlights ===== SIDA 3 ===== 3 IN TER IM R EPO RT Q3 2023 The geopolitical tensions are impacting our industry and driving the largest increase in defence investments in the last 30 years , particularly in Europe. The need for more advanced capabilities, security of supply and replenishment of stocks from low levels is pushing the European defence industry to increase capacity and to closer cooperation. To be able to me et the growing demand from customers in the next decade, building additional capacity and capabilities based on new technologies will be crucial. In the third quarter, high demand for Saab’s broad defence portfolio continued to result in significant order intake, strong sales growth and improved profitability. We are front-loading the coming years ’ investments in building capacity to secure customer demand and this is visible in our cash flow for the first nine months and the third quarter. In para llel, we are increasing our R&D investments in future capabilities to make sure our portfolio remains strong. In the quarter, we launched several new products, including the Giraffe 1X Deployment Set and new features for our Barracuda camouflage solutions as well as showcasing our land-based capabilities for next- generation air defence. We also completed two bolt-on acquisitions in the U.K. and U.S., to accelerate our capabilities in autonomy and AI. Moreover, Saab announced three strategic partnerships in the quarter. We entered into a cooperation agreement with Helsing, a defence company specialising in AI -based software technology and made an investment for a 5% stake in the company . We also signed an agreement with the British defence company Babcock to explore future opportunities with advanced surface ships. In addition, w e signed an MoU with Singapore Technologies Engineering to further deepen our collaboration and opportunities for the global market in several areas such as radars, unmanned systems, training and simulation and autonomy. Order intake in the quarter grew 93% year-over- year and amounted to SEK 15.0 billion (7.8). This was driven by large, medium -sized and small orders in most of our key markets and included the booking of a Gripen E new functionality contract from Sweden and an order for two AEW aircraft to Poland, which is already progressing towards delivery . In the U.S. , we expanded our current framework agreement with the U.S. Department of Defense and received an order for AT4 systems and Carl -Gustaf ammunition . We also signed an extension agreement with Boeing for the manufacturing of cargo and access doors for the Boeing 787 Dreamliner, one of the world’s best-selling widebody aircraft. Our Ground Combat portfolio continued to add new orders from customers such as Estonia and Japan. Demand for our Surveillance portfolio was also strong with significant order intake in the quarter. Sales amounted to SEK 1 1.5 billion ( 8.8) and organic sales growth was 31% in the third quarter, broadly in line with our expectations . Sales performance was strong in all business areas with significant contributions from Surveillance and Dynamics. Year-to-date, organic sales growth was 26%, reflecting the higher level of production volumes we have in our businesses. Based on our current visibility for our programme execution and deliveries in the fourth quarter, we upgrade our sales growth outlook for 2023 . We now expect organic sales growth to be between 19-23% for the full year, compared to our previous outlook of between 16-20%. Profitability also showed an improvement in the third quarter, EBIT incre ased 51% year -over- year and our operating margin was 7.5% (6.5). The quarter confirms the year-over-year trend of gradual operational improvement across our business areas. In Surveillance, we saw the EBIT margin mov e from 6.3% to 7.8%, whilst Dynamics margins continued to normalise compared to the favourable mix in 2022. Aeronautics, Kockums and Combitech reported margin improvements compared to the same quarter last year , with the improvement in Kockums reflecting a favourable mix and high share of aftermarke t business. We reiterate our outlook of operating income growth to be higher than organic sales growth for the full year 2023. Cash flow in the quarter was negative and amounted to SEK -2.1 billion (0.6). This reflects timing effects of customer payments combined with higher investments and does not impact our outlook for the full year of a positive operational cash flow. Looking ahead, our focus remains on delivering on current customer orders , whilst increasing capacity and future capabilities. This puts a high demand on competence and requires an increase in the number of employees. Year-to- date, we have grown by 1,800 employees, or 9%, at the same time as Saab is climbing in the rankings as a top-ten most attractive IT and Engineering employer in Sweden. We are investing in upskilling through our learning platform and have put a lot of effort into both onboarding and our overall people experience. Finally, I am also glad to see that Saab was awarded an A+ in Position Green’s rating o f reporting transparency and readiness for the upcoming European Sustainability Reporting Standards (ESRS). Our efforts w ithin sustainability, innovation and people will be key to our long-term success and value creation. CEO comments Growth momentum in an evolving market Micael Johansson President and CEO Outlook 2023 Sales growth: Organic sales growth between 19-23%. (Previously: Organic sales growth between 16-20%.) Operating income: Operating income growth higher than organic sales growth. Operational cash flow: Operational cash flow to be positive. Targets 2023-2027 Sales growth: An organic sales growth of around 10% (compound annual growth rate). Operating income: Operating income growth to be higher than the organic sales growth. Operational cash flow: Cash flow conversion of minimum 70%, cumulative for the 5-year period. ===== SIDA 4 ===== 4 IN TER IM R EPO RT Q3 2023 *Includes items affecting comparability of SEK 1,496 million Orders Third quarter 2023 Order bookings increased 93 per cent and amounted t o SEK 14, 977 million (7,772) with strong growth in orders to countries in Europe. Order intake increased across all order sizes, where booking of large orders showed a strong growth compared to last year and amounted to SEK 7,128 million (1,166). Small orders increased 38 per cent and amounted to SEK 3,13 2 million (2,267) while medium-sized orders grew 9 per cent and amounted to SEK 4,717 million (4,339). In the period, Saab received a contract for additional functionality for Gripen E to Sweden with a value of approximately SEK 5.8 billion, of which SEK 4.0 billion was booked in the third quarter. Other key orders were AT4 systems and Carl-Gustaf ammunition to the U.S. of SEK 1.1 billion and Airborne Early Warning (AEW) aircraft to Poland of SEK 599 million. Order intake was particularly strong in Aeronautics and Surveillance. January-September 2023 Order bookings amounted to SEK 46,310 million (33,250), an increase of 39 per cent compared to the first nine months in 2022. Large order bookings increased 70 per cent and amounted to SEK 18,622 million (10,966), driven by a large defence equipment order of SEK 8.5 billion and the Gripen E functionality order of SEK 4.0 billion to Sweden . Small orders grew 25 per cent and amounted to SEK 11,013 million (8,786) while medium -sized orders grew 24 per cent and amounted to 16,675 (13,498). Order intake in the first nine months was particularly strong in Dynamics. The order backlog at the end of the period amounted to SEK 138,501 million, compared to SEK 127,676 million at the beginning of the year, corresponding to an increase of 8 per cent. In total, 64 per cent of the backlog is attributable to international markets, compared to 62 per cent at the end of last year. For more information on the order intake, see the business area pages 8, 9 and 10. Sales Third quarter 2023 Sales in the third quarter grew 31.7 per cent, of which 31.4 per cent organic, and amounted to SEK 11,527 million (8,751). All business areas and Combitech continued to report strong sales growth due to the high level of production volumes and project activity. January-September 2023 Sales in the first nine months amounted to SEK 35,487 million (28,140) corresponding to a growth of 26.1 per cent, of which organic growth was 25.6 per cent. In the period, all business areas and Combitech reported sales growth. Sales from international markets amounted to SEK 20,156 million (16,805) and corresponded to 57 per cent (60) of total sales. In the period, all regions except Latin America and Asia reported sales growth. 90 per cent (88) of sales were related to the defence business. Sales growth Sales per region Per cent Jan-Sep 2023 Jan-Sep 2022 Q3 2023 Q3 2022 Full Year 2022 Organic sales growth 26 1 31 7 5 Change from acquisitions and divestments -1 - -1 - - Currency translation effects 1 2 1 2 2 Total sales growth 26 3 32 9 7 MSEK Jan-Sep 2023 Jan-Sep 2022 Change, % Sweden 15,331 11,335 35 Rest of Europe 7,858 4,972 58 North America 3,907 2,950 32 Latin America 2,488 2,749 -9 Asia 2,967 4,341 -32 Africa 78 59 32 Australia, etc. 2,509 1,734 45 Undisclosed country 349 - - Total 35,487 28,140 26 Order distribution, Jan-Sep 2023 Order backlog duration: 2023: SEK 13.5 billion 2024: SEK 42.8 billion 2025: SEK 38.4 billion 2026: SEK 21.7 billion After 2026: SEK 22.1 billion Defence/Civil A total of 90% (91) of order bookings were attributable to defence related operations during January- September 2023. Market A total of 64% (43) of order bookings were related to markets outside Sweden during January-September 2023. Sales Jan-Sep, MSEK Classification of orders MSEK Small orders <100 Medium-sized orders 100-1000 Large orders >1000 Small orders 24%(26) Medium-sized orders 36%(41) Large orders 40%(33) 22,940 27,211 28,140 35,487 Jan-Sep 2020* Jan-Sep 2021 Jan-Sep 2022 Jan-Sep 2023 ===== SIDA 5 ===== 5 IN T ER IM R EPO RT Q3 2023 *Includes items affecting comparability of SEK 1,108 million Income Third quarter 2023 Gross income grew 32 per cent in the quarter following strong sales growth, while the gross margin was unchanged compared to last year and amounted to 21.5 per cent (21.5). EBITDA increased 28 per cent and the EBITDA margin was 12.4 per cent (12.7). Operating income increased 51 per cent to SEK 859 million (568) with an operating margin of 7.5 per cent (6.5). The improvement was driven by favourable volume effects. January-September 2023 Gross income grew 28 per cent to SEK 7,743 million (6,037) with a gross margin improvement to 21.8 per cent (21.5), driven mainly by the strong sales growth. Total depreciation, amortisation and write -downs amounted to SEK 1,674 million (1,558). Depreciation of tangible fixed assets and right-of-use assets amounted to SEK 1,119 million (1,032). Expenditures for internally funded investments in R&D amounted to SEK 1,430 million (1,218), of which SEK 379 million (347) has been capitalised. Capitalised expenditures are mainly attributable to the development of Gripen E/F . Amortisation and wr ite-downs of intangible fixed assets amounted to SEK 555 million (526), of which amortisation and write -downs of capitalised development expenditures amounted to SEK 442 million (417). R&D amortisation is mainly related to GlobalEye, amounting to SEK 281 million (281) during January-September 2023. The share of income in associated companies and joint ventures amounted to SEK -384 million (-29), including write-downs in the minority portfolio of SEK -284 million classified as items affecting comparability, see also note 5. EBITDA grew 29 per cent to SEK 4,526 million (3,518) with a corresponding margin of 12.8 per cent (12.5). The improvements were mainly driven by the higher gross income, which more than offset higher operating costs during January-September 2023. Operating income increased by 46 per cent and amounted to SEK 2,852 million ( 1,960), with a margin of 8.0 per cent (7.0). The improvement was mainly driven by increased sales volumes in all business areas and Combitech. Items affecting comparability had a net positive impact of SEK 44 million in the period from the capital gain related to the sale of the Maritime Traffic Management operations and a property , and the write -downs in the minori ty portfolio. See note 5 for further information. Financial net The financial net related to pensions is the financial cost for net pension obligations recognised in the balance sheet. See note 13 for more information regarding defined-benefit pension plans. Net interest items refer to interest on liquid assets, short-term investments and interest expenses on short - and long -term interest -bearing liabilities and interest on interest -rate swaps . The favourable effect compared to last year is primarily driven by the higher interest earned. Currency gains/losses recognised in the financial net are mainly related to currency hedges of the tender portfolio, which are measured at fair value through profit and loss. Lease liability interest consist s of the interest portion related to lease liabilities recognised in the balance sheet. Other financial items consist of realised and unrealised results from short -term investments and derivatives as well as ot her currency effects, e.g. changes in exchange rates for liquid assets in currencies other than SEK. Other financial items was positive in the period reflecting lower movements in market interest rates and credit spreads compared to last year. Tax Current and deferred taxes amounted to SEK -606 million (-341) during January-September 2023, corresponding to an effective tax rate of 22 (23) per cent. The effective tax rate was positively affected by non-taxable income from the capital gain related to the sale of the MTM operations and property offsetting the negative effects from non-deductible write-downs in the minority portfolio. MSEK Jan-Sep 2023 Jan-Sep 2022 Financial net related to pensions -28 -54 Net interest items 85 -58 Currency gains/losses -88 -61 Lease liability interest -102 -75 Other financial items 76 -242 Total -57 -490 Operating income (MSEK) and margin (%), Jan-Sep Earnings per share after dilution, SEK Internally funded R&D expenditures, MSEK 549 1,812 1,960 2,852 2.4 6.7 7.0 8.0 Jan-Sep 2020* Jan-Sep 2021 Jan-Sep 2022 Jan-Sep 2023 3.55 8.95 8.08 16.06 Jan-Sep 2020 Jan-Sep 2021 Jan-Sep 2022 Jan-Sep 2023 1,754 1,507 1,218 1,430 Jan-Sep 2020 Jan-Sep 2021 Jan-Sep 2022 Jan-Sep 2023 ===== SIDA 6 ===== 6 IN T ER IM R EPO RT Q3 2023 Financial position and liquidity At the end of September 2023, Saab had a net liquidity of SEK 1,370 million, a decrease of SEK 1,062 million compared to a net liquidity of SEK 2,432 million at year-end 2022. Net debt/EBITDA was -0.21 (-0.45) at the end of the period. Cash flow from operating activities amounted to SEK 1,632 million (2,143). Contract assets increased by SEK 3,331 million and contract liabilities increased by SEK 4,007 million compared to year-end 2022. Inventories increased by SEK 2,431 million during the first nine months of 2023 with increases across business areas. Net provisions for pensions, excluding special employer’s contribution, amounted to SEK 399 million as of 3 0 September 2023, compared to SEK 1,068 million at year-end 2022. The positive effect on net debt of SEK 669 million was mainly related to changes in actuarial assumptions regarding discount rate. For further information on Saab’s benefit pension plans, see note 13. Tangible fixed assets amounted to SEK 8,993 million at the end of the quarter compared to 7,965 at the end of 2022. Biological assets amounted to SEK 411 million (408). Right-of-use assets recognised in the balance sheet amounted to SEK 2,484 million compared to 2,682 million at the end of 2022. Financial investments increased with SEK 1,031 million to SEK 1,149 million (118). The consideration for the investment in Helsing GmbH was recognised as a short -term liability in the third quarter and was paid in October 2023. Net investments in the first nine months amounted to SEK 2,299 million (1,294). Investments in tangible fixed assets amounted to SEK 1,716 million (926). Investments in intangible fixed assets amounted to SEK 604 million (475), of which SEK 379 million (347) was related to capitalised R&D expenditures . The investments were mainly related to the development of Gripen E/F. Of the total investments in intangible fixed assets, SEK 225 million (128) was related to other intangible fixed assets. As of 3 0 September 2023, short-term investments and liquid assets amounted to SEK 10,526 million, a decrease of SEK 2,331 million compared to year -end 2022. In addition, the Group had unutilised revolving credit facilities amounting to SEK 6,000 million. Capital employed increased by SEK 952 million during the period to SEK 41,903 million. The return on capital employed was 11.4 per cent (8.4) and the return on equity was 11.2 per cent (7.6), both measured over a rolling 12-month period. Key indicators of financial position and liquidity Change in net debt Jan-Sep 2023 MSEK Net liquidity (+) / net debt (-), 31 Dec 2022 ¹⁾ 2,432 Cash flow from operating activities 1,632 Change in net pension obligation 669 Net investments -2,299 Sale of and investments in financial assets, associates and joint ventures -33 Write-down of loan receivable to associated company -344 Dividend -703 Dividend to and transactions with non-controlling interest 10 Additional lease liabilites -238 Investments in operations -241 Sale of subsidiaries and other operations 382 Other items, currency impact and unrealised results from financial investments 103 Net liquidity (+) / net debt (-), 30 September 2023 ¹⁾ 1,370 ¹⁾ Net liquidity (+) / net debt (-) excluding net provisions for pensions, lease liabilities and interest-bearing receivables, 30 September 2023 3,681 MSEK 30 Sep 2023 31 Dec 2022 Change 30 Sep 2022 Net liquidity / debt ²⁾ 1,370 2,432 -1,062 404 Intangible fixed assets 12,758 12,248 510 12,402 Goodwill 5,556 5,384 172 5,533 Capitalised development costs 5,984 5,958 26 5,974 Other intangible fixed assets 1,218 906 312 895 Tangible fixed assets, etc ³⁾ 9,404 8,373 1,031 7,929 Right of use assets ⁴⁾ 2,484 2,682 -198 2,394 Inventories 16,626 14,195 2,431 14,089 Accounts receivable 6,402 6,045 357 4,556 Contract assets 13,242 9,911 3,331 11,085 Contract liabilities 15,196 11,189 4,007 11,767 Equity/assets ratio, % 40.3 41.3 39.3 Return on equity, % 11.2 8.6 7.6 Return on capital employed, % 11.4 8.8 8.4 Equity per share, SEK ¹⁾ 237.38 222.55 14.83 207.25 1) Number of shares excluding treasury shares 133,073,163 132,488,884 132,346,624 3) Including tangible fixed assets and biological assets. 4) Relate to right-of-use assets for leases. 2) The Group's net liquidity/debt refers to liquid assets, short-term investments and interest-bearing receivables less interest-bearing liabilities and provisions for pensions excluding provisions for special employers' contribution attributable to pensions. For a detailed break-down of interest-bearing receivables and interest-bearing liabilities, see note 8. ===== SIDA 7 ===== 7 IN T ER IM R EPO RT Q3 2023 Cash flow Third quarter 2023 Operational cash flow was negative in the third quarter and amounted to SEK -2,058 million (559). The decrease was mainly due to timing effects of customer payments, combined with higher investments. Operational cash flow is defined as cash flow from operating activities and acquisitions and divestments of intangible and tangible fixed assets. Cash flow from operating activities excludes taxes and other financial items but includes amortisation of lease liabilities. Free cash flow amounted to SEK -2,554 million (398) and was affected by SEK -223 million from the acquisition of BlueBear. For more detailed information on cash flow, see note 11. January-September 2023 Operational cash flow was lower compared to the same period last year and amounted to SEK -534 million (911). The decrease was attributable to working capital and higher investments. The higher increase in working capital compared to the same period last year was mainly due to lower customer payments. Free cash flow amounted to SEK -993 million (432) and included positive effects of SEK 307 million from the divestment of the MTM business and SEK 75 million from divestment of property . The acquisition of BlueBear had an effect of SEK -223 million on free cash flow . For more detailed information on cash flow, see note 11. There can be large fluctuations in cash flow between reporting periods as the timing of milestone payments in large projects greatly varies depending on when milestones are reached. MSEK Jan-Sep 2023 Jan-Sep 2022 Cash flow from operating activities before changes in working capital, excluding taxes and other financial items ¹⁾ 4,507 3,597 Change in working capital -2,742 -1,392 Cash flow from operating activities excluding taxes and other financial items 1,765 2,205 Cash flow from investing activities ²⁾ -2,299 -1,294 Operational cash flow -534 911 Taxes and other financial items -567 -431 Sale of and investments in financial assets and operations 108 -48 Free cash flow -993 432 2) Cash flow from investing activities excluding change in short-term investments and other interest-bearing financial assets and excluding sale of and investment in financial assets, operations and subsidiaries. If investments in and sale of financial fixed assets are considered to be of operating nature, the item is included in investing activities. 1) Including amortisation of lease liabilities Free cash flow, MSEK 698 1,360 432 -993 Jan-Sep 2020 Jan-Sep 2021 Jan-Sep 2022 Jan-Sep 2023 ===== SIDA 8 ===== 8 IN TER IM R EPO RT Q3 2023 Business Area Aeronautics Business Units Gripen Design, Gripen Sustainment, Aviation Services, Aerospace Systems. Market highlights Order intake increased in the third quarter, driven by a contract for Gripen E additional functionality to Sweden with a value of approximately SEK 5.8 bn of which 3.7 bn was booked within Aeronautics in the quarter. An extension agreement was also signed with Boeing for door structures to the 787 Dreamliner programme. Sales and operating income Sales increased in the quarter mainly driven by higher volumes in the Gripen programme. EBIT increased following the higher sales volumes in the quarter and the EBIT margin improved compared to the lower margin reported in Q3 last year. Cash flow Operational cash flow was negative in the period, reflecting lower milestone payments. Business Area Dynamics Business Units Ground Combat, Missile Systems, Underwater Systems, Barracuda, Training and Simulation, Tactical Support Solutions. Market highlights Order momentum continued in the quarter, driven by high demand for Dynamics’ portfolio. In the quarter, the U.S. Department of Defense expanded a current framework agreement and placed an order for AT4 systems and Carl - Gustaf ammunition. Sales and operating income Sales increased 46% in the quarter and was driven by a higher level of execution and deliveries in several business units. EBIT increased slightly while the EBIT margin declined and reflected the normalisation of the business mix compared to the favourable mix in 2022. Cash flow Cash flow was negative in the quarter and mainly driven by inventory build-up and timing of customer payments. Market Sales in markets outside Sweden amounted to 42% (44) during the first nine months 2023. Market Sales in markets outside Sweden amounted to 78% (79) during the first nine months 2023. MSEK Jan-Sep 2023 Jan-Sep 2022 Change, % Q3 2023 Q3 2022 Full Year 2022 Order bookings 8,878 6,098 46 5,276 1,960 13,119 Order backlog 41,926 39,868 5 42,645 Sales 9,602 8,684 11 3,135 2,555 12,942 EBITDA 653 563 16 202 104 858 EBITDA margin, % 6.8 6.5 6.4 4.1 6.6 Operating income (EBIT) 498 437 14 148 60 694 Operating margin, % 5.2 5.0 4.7 2.3 5.4 Operational cash flow -610 -350 -569 -230 107 0 2 4 6 8 10 0 1,000 2,000 3,000 4,000 5,000 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 2023 Sales, MSEK Operat ing margin, % Operat ing margin, R12, % MSEK Jan-Sep 2023 Jan-Sep 2022 Change, % Q3 2023 Q3 2022 Full Year 2022 Order bookings 19,563 9,285 111 3,245 2,989 17,811 Order backlog 42,362 25,688 65 30,821 Sales 8,172 5,881 39 2,750 1,880 9,168 EBITDA 1,118 1,052 6 354 350 1,658 EBITDA margin, % 13.7 17.9 12.9 18.6 18.1 Operating income (EBIT) 1,042 982 6 328 318 1,562 Operating margin, % 12.8 16.7 11.9 16.9 17.0 Operational cash flow 1,216 661 -999 256 1,251 0 5 10 15 20 0 1,000 2,000 3,000 4,000 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 2023 Sales, MSEK Operat ing margin, % Operat ing margin, R12, % ===== SIDA 9 ===== 9 IN TER IM R EPO RT Q3 2023 Business Area Surveillance Business Units Airborne Early Warning, Surface Sensor Solutions, Fighter Core Capabilities, Digital Battlespace Solutions, Naval Combat Systems, Safety and Security Solutions. As of 1 September, Surveillance has a new internal business unit structure in which the previous four units have become six , in order to improve strategy execution. Market highlights Continued strong interest for the Surveillance portfolio resulted in significant order intake in the third quarter. Key orders received included two AEW aircraft to Poland , customer support contracts , several smaller radar orders as well as a part of the Gripen E functionality contract to Sweden. Sales and operating income Sales growth in the quarter was 32% and driven by continued strong performance across most business units in Surveillance. EBIT increased 63% and the EBIT margin improved to 7.8% from 6.3% the same quarter last year . The improvement reflects the high sales volumes across Surveillance business. Cash flow Cash flow in the quarter was negative due to timing of customer milestone payments. Business Area Kockums Business Units Submarines, Surface Ships, Docksta. Market highlights In the quarter, Saab submitted its proposal for four expeditionary submarines to Netherlands in cooperation with Dutch shipbuilder Damen. A strategic cooperation agreement was also signed with Babcock to explore the development of the design of a new advanced corvette. Sales and operating income Kockums showed strong sal es increase of 40% in the quarter driven by continued high activity pace in projects including a high level of material purchases. EBIT and the EBIT margin improved in the quarter driven by favourable mix and a high share of aftermarket business. Cash flow Operational cash flow of SEK 556 million in the quarter was related to customer payments. Market Sales in markets outside Sweden amounted to 70% (80) during the first nine months 2023. *adjusted for items affecting comparability Market Sales in markets outside Sweden amounted to 18% (10) during the first nine months 2023. MSEK Jan-Sep 2023 Jan-Sep 2022 Change, % Q3 2023 Q3 2022 Full Year 2022 Order bookings 14,845 14,025 6 5,723 1,855 22,966 Order backlog 43,092 37,456 15 41,301 Sales 12,782 9,823 30 4,149 3,152 14,616 EBITDA 1,979 1,261 57 544 405 1,983 EBITDA margin, % 15.5 12.8 13.1 12.8 13.6 Operating income (EBIT) 1,329 656 103 324 199 1,176 Operating margin, % 10.4 6.7 7.8 6.3 8.0 Operational cash flow -760 1,095 -819 310 1,314 0 3 6 9 12 15 0 1,000 2,000 3,000 4,000 5,000 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* 2021 2022 2023 Sales, MSEK Operat ing margin, % Operat ing margin, R12, % MSEK Jan-Sep 2023 Jan-Sep 2022 Change, % Q3 2023 Q3 2022 Full Year 2022 Order bookings 1,570 2,599 -40 640 706 7,267 Order backlog 10,829 9,219 17 12,772 Sales 3,468 2,480 40 1,084 774 3,614 EBITDA 382 183 109 135 67 329 EBITDA margin, % 11.0 7.4 12.5 8.7 9.1 Operating income (EBIT) 360 161 124 127 60 300 Operating margin, % 10.4 6.5 11.7 7.8 8.3 Operational cash flow 490 -307 556 61 -288 0 3 6 9 12 15 18 0 250 500 750 1,000 1,250 1,500 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 2023 Sales, MSEK Operat ing margin, % Operat ing margin, R12, % ===== SIDA 10 ===== 10 IN TER IM R EPO RT Q3 2023 Business Area Combitech Market highlights Orders increased slightly in the quarter driven by continued favorable market for Combitech. A Private Network/5G feasibility study was won from BAE Systems Hägglunds in the quarter. In addition, a prolongation of the agreement with The Swedish Armed Forces , regarding their telecommunication network and IP - based infrastructure, was signed in the period. Sales and operating income Sales increased 16% in the quarter and was driven by the favourable market as well as an increased number of consultants vs last year. EBIT and margin improved driven by the higher sales and hourly rates year-over-year. Cash flow Cash flow was negative in the quarter due to timing of customer payments. Corporate and other items Corporate In addition to the four business areas and Combitech, the Corporate line comprise Group staff, Group departments and other operations including Saab’s minority portfolio in Corporate. The minority portfolio contains Saab’s interests in UMS Skeldar AG and Ventures. Corporate reported an operating loss of SEK -606 million (-448) in the first nine months of 2023. The higher loss was mainly related to the write-downs in the minority portfolio of SEK -284 million, of which SEK -260 million was reported in the first quarter and SEK -24 million in the second quarter . This was partly offset by a capital gain from the divestment of pro perty amounting to SEK 58 million in the second quarter. These items were classified as items affecting comparability (see note 5) and excluding items affecting comparability, the Corporate operating loss was lower for the first nine months and amounted to SEK -380 million (-448). Operational cash flow attributable to Corporate amounted to SEK -925 million (-95) in the nine-month period, driven by increased working capital and investments. Acquisitions and divestments 2023 On 31 March, Saab completed the divestment of the Maritime Traffic Management (MTM) operation within business area Surveillance to funds advised by Agilitas Private Equity LLP. The purchase price amounted to EUR 46 million and the transaction generated a capital gain of SEK 270 million with a positive effect on free cash flow of SEK 307 million. The capital gain has been classified as an item affecting comparability, see note 5. In 2022, the divested MTM operations had sales of SEK 356 million and an operating income of SEK 42 million. During the second quarter 2023, Saab divested property in accordance with the resolution from the Annual General Meeting for the Share Purchase Agreement and a Lease Agreement with Vectura. The divestment resulted in a capital gain of SEK 58 million in the second quarter, classified as an item affecting comparability, and had a positive effect on free cash flow of SEK 75 million. See also note 5 and note 15. On 31 August, Saab announced the acquisition of 100 per cent of the shares in BlueBear Systems Group Ltd (BlueBear) for approximately SEK 383 million. BlueBear is a provider of AI -enabled autonomous swarm systems for complex defence and security applications. SEK 250 million has been pa id at the time of the acquisition and an estimated contingent consideration at fair value of approximately SEK 133 million is included in the total consideration. For more information about the acquisition, see note 12. On 14 September, Saab announced the strategic partnership with Helsing, a defence company specialising in AI -based software technologies . This included an investment of EUR 75 million for a 5 per cent stake in Helsing GmbH. The consideration for the investment in Helsing GmbH was recognised as a short-term liability in the third quarter and was paid in October 2023. Helsing is recognised as a Financial investment. On 7 September, Saab announced the strategic acquisition of CrowdAI in the U.S. for a minor consideration. Market Sales in markets outside Sweden amounted to 6% (6) during the first nine months 2023. MSEK Jan-Sep 2023 Jan-Sep 2022 Change, % Q3 2023 Q3 2022 Full Year 2022 Order bookings 3,169 2,386 33 734 703 3,469 Order backlog 1,591 1,183 34 1,227 Sales 2,805 2,364 19 816 703 3,399 EBITDA 236 178 33 45 38 275 EBITDA margin, % 8.4 7.5 5.5 5.4 8.1 Operating income (EBIT) 229 172 33 43 36 267 Operating margin, % 8.2 7.3 5.3 5.1 7.9 Operational cash flow 55 -93 -36 -113 177 0 2 4 6 8 10 12 0 250 500 750 1,000 1,250 1,500 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 2023 Sales, MSEK Operat ing margin, % Operat ing margin, R12, % ===== SIDA 11 ===== 11 IN TER IM R EPO RT Q3 2023 Share repurchase Saab held 2,772,684 treasury shares as of 30 September 2023, compared to 3,356,963 at year-end 2022. The Annual General Meeting in 2023 authorised that Saab may enter into an equity swap agreement with a third party to hedge the expected financial exposure of LTI 2024. The Annual General Meeting also decided to authorise the Board, before the next Annual General Meeting, to decide on the acquisition of Series B shares up to a maximum of 10 percent of the total number of shares in the company. The purpose of the authorisation is to be able to adjust the company’s capital structure and thereby contribute to increased shareholder value as well as to enable continued use of repurchased shares in connection with potential acquisitions o f companies and for the company’s share-related incentive programmes. Risks and uncertainties Saab’s operations primarily involve the development, production and supply of technologically advanced hardware and software to military and civilian customers around the world. Operations largely consist of major projects carried out over long periods of time, usually several years, in close cooperation with customers, suppliers, partners and institutions. Projects generally entail significant investments, long periods of time and technological development or refinement of products. In addition to customer and supplier relations, international operations involve joint ventures and collaborations with other industries as well as the establishment of operations abroad. Operations entail risk in various respects. The key risk areas are strategic, market and political, operating , financial and compliance . Various policies and instructions govern the management of material risks. Saab today conducts projects involving a large share of development, and their inherent complexity entails a higher level of risk. Furthermore, the market is characterised by conditions where orders can be deferred to the future partly for financial and political reasons. The uncertainty in the global supply chain and a higher inflationary environment also entails a risk for Saab and its operations. The challenges primarily relate to the availability of certain raw materials, components and longer lead times, as well as higher general inflation. Some of these are managed through contract management, re-planning and intensified dialogue and negotiations with suppliers. Risks related to a pandemic outbreak cannot be ruled out and can impact Saab’s operations through limited access to customers, employees, disruptions in supply chains, lock-downs in society and deteriorating market conditions in the civil aviation market. The effects from a pandemic may further cause electronics shortages, shipping delays and increased costs. Saab continues to monitor the long-term effects following the COVID- 19 pandemic. For a general description of the risk areas, see the Annual Report 2022, pages 38-44. Risks related to armed conflicts Saab has no defence related sales exposure to Belarus and Russia, but is closely monitoring the effects on the business from the war in Ukraine. Saab’s crisis management organisation continues to focus on security, embargo and sanction practises. Saab is operating on a highly regulated market and it is essential for Saab as a responsible defence company to comply with all applicable regulations and commitments regarding export control and sanctions, i.e. sanctions from EU, UN, OSCE or o ther applicable country specific sanctions. The conflict in Ukraine and the increased geopolitical tension, has led to increased security measures at Saab. This may lead to increased costs for security to protect Saab’s sites, personnel, IT and cyber security. Furthermore, Saab could be impacted by supply chain risks related to the conflict in Israel. Saab is monitoring the situation and has mitigating actions in place and is in close dialogue with its suppliers. Saab has no defence related sales exposure to Israel. Owners Largest owners, 30 September 2023: Source: Modular Finance The percentage of votes is calculated on the number of shares excluding treasury shares. Personnel % of % of capital votes Investor AB 30.2 40.4 Wallenberg Investments 8.7 7.7 Swedbank Robur Funds 4.9 4.3 Vanguard 2.5 2.2 BlackRock 2.0 1.8 Norges Bank 1.8 1.6 Schroders 1.5 1.3 AFA Insurance 1.0 0.9 Life Insurance Skandia 1.0 0.9 Avanza Pension 0.9 0.8 30 Sep 2023 31 Dec 2022 Number of employees 20,772 19,002 FTEs 20,913 19,121 ===== SIDA 12 ===== 12 IN TER IM R EPO RT Q3 2023 Sustainability at Saab Saab contributes to strengthened resilience and security for individuals and society as a whole, which are prerequisites for sustainable development. Highlights during the quarter • Saab received an A+ rating in Position Green’s ranking of the 100 largest Nasdaq Stockholm companies based on criteria of transparency and reporting readiness for the upcoming European Sustainability Reporting Standards (ESRS). A+ is the highest possible rating and was awarded to Saab and three other Swedish companies. • In the quarter, Saab has submitted its long-term 2050 climate targets to the Science-based Targets initiative (SBTi). Our aim is for these targets to be a continuation of our near -term targets, pr eviously approved by SBTi, and in line with our net-zero commitment. • During the quarter, Saab introduced a global work-life balance training programme with the purpose to support employees with an improved balance in daily l ife and to help them manage a more dynamic work environment. Saab improves its sustainability reporting During the third quarter, Saab accelerated preparations for the upcoming mandatory ESRS framework and the EU taxonomy activities introduced in 2023 and has e.g. conducted a g ap assessment against the upcoming ESRS requirements to be incorporated from 2024. In addition to the top rating by Position Green, the Swedish business journal “Dagens Industri” has acknowledged Saab ’s 7 th place in 2050 Consulting’s ranking of the most transparent companies in sustainability reporting. This is an improvement of 76 positions compared to 2020. Climate Saab has a strong and long -term commitment to reducing greenhouse gas emissions globally. At the end of the third quarter, Saab submitted long-term climate targets to the Science -based Targets initiative (SBTi). The targets are applicable to the years 2030 -2050 and the aim for these is to be a continuation of our near -term targets, and in line with Saab’s commitment to net -zero greenhouse gas emissions. We expect the approval process to be initiated at the beginning of 2024 an d concluded later in the year. During the third quarter , Saab reduced emissions by 10 per cent compared to the same period last year. The reduction was largely the result of improved energy efficiency, higher percentage of fossil -free district heating, lower emissions from business trips reported in Scope 1 and the purchase of renewable energy certificates (REC). The purchases of the RECs reduced emissions from electricity by 96 per cent compared 1 All performance indicators are global 2 Number of lost-time injuries / total hours worked x 1,000,000 to the third quarter last year. The reduction was partly offset by increased emissions from increased flight testing within the Gripen and GlobalEye programmes. In the chart below, t he purchase of REC s has impacted emissions previously reported in Q1 and Q2 (-850 tonnes). People A survey performed by the Employer Branding company Universum in the quarter confirms Saab’s effort to position itself as an attractive employer. This year, Saab climbs the list within both IT (from 13th place in 2022 to 7th place in 2023) , MSc. Engineerin g (from 15 th to 10 th place) and BSc. Engineering (from 16th to 12th place). In addition, Saab scored a significant improvement in the Swedish Young Professional Attraction Index published by Academic Work in October . Saab remains committed to attracting and retaining young talent and competences who wish to be a part of Saab’s journey going forward, guided by our purpose. In the quarter, Saab released its internal career development tool Career Hub to boost continuous learning and development. The tool pro motes networking, synergies, closer cooperation within the organisation, increased internal mobility and “Gigs”. Gigs enable employees to develop skills in line with needs and interests, and contribute with skills and competences in other parts of the organisation. Saab continues to focus on diversity and inclusion to increase the share of women as managers and employees. At the end of the third quarter, the share of women managers remained at 27 per cent while the share of women employees increased to 25 per cent from year-end 2022. Lost Time Injury Frequency Rate has increased slightly compared to the previous quarterly report due to improved competence in accurately classifying incidents and the implementation of enhanced system support. Total Recordable Injury Frequency Rate has improved during the quarter and is now in line with full year 2022. The number of reported incidents per workplace injury has positively improved over the year. Performance Indicators 1 Dec 2021 Dec 2022 YTD 2023 Lost Time Injury Frequency Rate (LTIFR) 2 0.59 0.84 1.10 Total Recordable Injury Frequency Rate (TRIFR)3 - 2.61 2.61 Reported incidents per workplace injury 4 5.1 4.4 4.8 Share of women managers 27% 27% 27% Share of women employees 24% 24% 25% 3 Number of recordable injuries / total hours worked x 1,000,000 4 Increased incidence reporting leads to fewer accidents 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Q1 Q2 Q3 Q4 Quarterly Emissions Scope 1 & 2 Market Based Comparison Year-over-Year in Tonne CO2e per Quarter 2020 2021 2022 2023 ===== SIDA 13 ===== 13 IN TER IM R EPO RT Q3 2023 Significant events January-September 2023 On 10 February, Saab announced changes in its Group Management and organisation that took effect on 1 March 2023. Lars Tossman was appointed Head of business area Aeronautics. Mats Wicksell assumed the position as Head of business area Kockums and became a new member of Saab’s Group Management team. Jonas Hjelm took on a new position within the Group Management team as Head of Government Affairs. On 14 February, Saab announced new medium-term financial targets for the period 2023-2027. These targets replace Saab’s long-term targets on sales growth and operating income. The new targets are provided on the back of improved growth opportunities. On 24 February, Saab announced it had signed a framework agreement with a Government of a Western country and received orders within the agreement for a number of defence systems. The total order value is approximately SEK 8 billion with deliveries planned 2023-2026. On 30 March, Saab announced it had signed framework agreements with NATO Support and Procurement Agency (NSPA) for the Carl -Gustaf® M4 weapon system and the AT4 anti -armour weapon. The NSPA has also placed call-off orders with a total value of approximately SEK 350 million. On 5 April, Saab held its Annual General Meeting in Stockholm, Sweden. The Annual General Meeting decided on a dividend of SEK 5.30 per share. Read more on www.saab.com/agm. On 25 May , Saab received an order for sight - and fire control capability from BAE Systems Hägglunds for the CV90 combat vehicles ordered by the Slovak Republic. The order value is approx. SEK 900 million and deliveries are scheduled 2023-2029. On 29 May , Saab received an order from the Swedish Defence Materiel Administration (FMV) for Carl -Gustaf® ammunition. The order value is approx. SEK 3 billion and deliveries will take place during 2026-2030. On 5 June , Saab received an order for the autonomous underwater vehicle Sabertooth from marine geophysical company PXGEO. The order value is SEK 620 million and deliveries will take place 2023-2025. On 16 June, Saab announced its Arexis sensor suite has been selected by Germany’s defence procurement office (BAAINBw) as the prefe rred solution for the German Eurofighter Electronic Warfare (EW) variant. At this point, Saab has not yet signed a contract nor received an order for this. On 25 July , Saab announced it had received an order for two Saab 340 Airborne Early Warning (AEW) aircraft from Poland. The order value is approximately SEK 600 million and the contract period is 2023-2025. On 28 July , Saab submitted its proposal for the replacement of Netherland’s current submarines. The proposal comprises four advanced Expeditionary Submarines and includes a cooperation with Dutch shipbuilder Damen Shipyards Group. On 31 August , Saab acquired all shares in the U.K. -based company BlueBear, a world -leading provider of AI -enabled autonomous swarm systems for complex defence and security applications. On 7 September, Saab announced the strategic acquisition of CrowdAI in the U.S., accelerating the development and implementation of Artificial Intelligence (AI)/Machine Learning (ML) capabilities into Saab’s portfolio. On 12 September, Saab received an order for additional functionality and adjusted delivery schedules for Gripen E and Gripen C/D from the Swedish Defence Materiel Administration. The agreement relates to the period 2023-2030 and the order value is approximately SEK 5.8 billion of which SEK 4.0 billion was booked in the third quarter. On 14 September , Saab announced it had entered into a strategic partnership with Helsing, a defence company spec ialising in AI -based software technologies. The partnership includes an investment by Saab of EUR 75 million in cash for a 5 percent stake in Helsing GmbH. On 18 September, Saab announced that the U.S. Department of Defense (DoD) had expanded a current framework agreement for AT4 systems and Carl-Gustaf ammunition. A new order was also signed valued at USD 104.9 million (approx. SEK 1 billion) with deliveries during 2024-2026. On 29 September, Saab announced that Dean Rosenfield will leave the role as Chief Marketing Officer and his role in Saab’s Group Management. Dean will remain in his position until 29 February 2024. For more information on significant orders received during the period, see page 4 and the comments on the business areas on page 8 -10. All press releases can be found on https://www.saab.com/newsroom. Events after the conclusion of the period On 11 October, Saab received an order from BAE Systems Hägglunds for sight-and fire control for CV90 vehicles to the Czech Republic. The order value is approx. SEK 970 million and the contract period is 2023-2029. Airborne early warning aircraft to Poland "Saab has had a strong relationship with the Polish Ministry of National Defence for many years. We are proud to further strengthen Poland’s Armed Forces with our airborne early warning and network-based solutions," said Carl-Johan Bergholm, head of Saab’s business area Surveillance. Strategic partnership with Helsing “The investment in Helsing marks another milestone in Saab’s commitment to further bolster our capabilities and continuously improve our portfolio to meet the evolving needs of our customers. Together with the recent acquisitions of BlueBear in the U.K. and CrowdAI in the U.S., it also supports our international growth strategy,” said Micael Johansson, President and CEO of Saab. ===== SIDA 14 ===== 14 IN TER IM R EPO RT Q3 2023 Consolidated income statement Consolidated statement of comprehensive income MSEK Note Jan-Sep 2023 Jan-Sep 2022 Rolling 12 Months Full Year 2022 Sales 4 35,487 28,140 49,353 42,006 Cost of goods sold -27,744 -22,103 -38,761 -33,120 Gross income 7,743 6,037 10,592 8,886 Gross margin, % 21.8 21.5 21.5 21.2 Other operating income 5 412 130 513 231 Marketing expenses -1,961 -1,752 -2,542 -2,333 Administrative expenses -1,384 -1,080 -1,847 -1,543 Research and development costs -1,493 -1,288 -2,022 -1,817 Other operating expenses -81 -58 -76 -53 Share of income in associated companies and joint ventures 5 -384 -29 -452 -97 Operating income (EBIT) ¹⁾ 3 2,852 1,960 4,166 3,274 Operating margin, % 8.0 7.0 8.4 7.8 Financial income 448 152 490 194 Financial expenses -505 -642 -512 -649 Net financial items -57 -490 -22 -455 Income before taxes 2,795 1,470 4,144 2,819 Taxes -606 -341 -801 -536 Net income for the period 2,189 1,129 3,343 2,283 of which Parent Company’s shareholders’ interest 2,158 1,080 3,273 2,195 of which non-controlling interest 31 49 70 88 Earnings per share before dilution, SEK ²⁾ 16.25 8.18 24.66 16.61 Earnings per share after dilution, SEK ³⁾ 16.06 8.08 24.36 16.41 1) Of which depreciation/amortisation and write-downs -1,674 -1,558 -2,243 -2,127 2) Average number of shares before dilution 132,791,798 132,070,863 132,698,287 132,157,586 3) Average number of shares after dilution 134,368,067 133,608,085 134,376,710 133,724,223 MSEK Jan-Sep 2023 Jan-Sep 2022 Rolling 12 Months Full Year 2022 Net income for the period 2,189 1,129 3,343 2,283 Other comprehensive income/loss: Items that will not be reversed in the income statement: Revaluation of net pension obligations 695 3,546 1,868 4,719 Tax attributable to revaluation of net pension obligations -143 -730 -388 -975 Equity instruments classified as measured at fair value through other comprehensive income 2 - 1 -1 Tax attributable to equity instruments classified as measured at fair value through other comprehensive income -0 - -0 0 Total 554 2,816 1,481 3,743 Items that may be reversed in the income statement: Translation differences 93 1,084 -175 816 Cash flow hedges -175 -11 98 262 Tax attributable to cash flow hedges 36 5 -21 -52 Total -46 1,078 -98 1,026 Other comprehensive income/loss for the period 508 3,894 1,383 4,769 Net comprehensive income/loss for the period 2,697 5,023 4,726 7,052 of which Parent Company’s shareholders’ interest 2,652 4,930 4,658 6,936 of which non-controlling interest 45 93 68 116 ===== SIDA 15 ===== 15 IN TER IM R EPO RT Q3 2023 Consolidated statement of financial position MSEK Note 30 Sep 2023 31 Dec 2022 30 Sep 2022 ASSETS Fixed assets: Intangible fixed assets 7 12,758 12,248 12,402 Tangible fixed assets 8,993 7,965 7,576 Biological assets 411 408 353 Right of use assets 2,484 2,682 2,394 Shares in associated companies and joint ventures 264 343 384 Financial investments 1,149 118 118 Long-term receivables 780 695 753 Deferred tax assets 455 403 322 Total fixed assets 27,294 24,862 24,302 Current assets: Inventories 16,626 14,195 14,089 Derivatives 1,716 1,835 2,500 Tax receivables 35 36 253 Accounts receivable 6,402 6,045 4,556 Contract assets 13,242 9,911 11,085 Other receivables 2,008 1,232 1,099 Prepaid expenses and accrued income 1,654 1,101 1,419 Short-term investments 9,288 9,988 8,931 Liquid assets 11 1,238 2,869 2,545 Assets held for sale 12 - 291 - Total current assets 52,209 47,503 46,477 TOTAL ASSETS 79,503 72,365 70,779 SHAREHOLDERS’ EQUITY AND LIABILITIES Shareholders’ equity: Parent Company’s shareholders’ interest 31,589 29,486 27,429 Non-controlling interest 425 390 396 Total shareholders’ equity 32,014 29,876 27,825 Long-term liabilities: Long-term lease liabilities 2,043 2,240 2,035 Other long-term interest-bearing liabilities 8 6,750 6,749 6,749 Other liabilities 216 90 89 Provisions for pensions 13 474 1,304 2,475 Other provisions 2,704 2,566 2,482 Deferred tax liabilities 1,408 1,140 872 Total long-term liabilities 13,595 14,089 14,702 Current liabilities: Short-term lease liabilities 583 554 517 Other short-term interest-bearing liabilities 8 95 445 450 Contract liabilities 15,196 11,189 11,767 Accounts payable 5,255 4,870 3,802 Derivatives 2,259 1,664 2,520 Tax liabilities 260 198 250 Other liabilities 1,579 1,097 799 Accrued expenses and deferred income 8,016 7,216 7,195 Provisions 651 1,035 952 Liabilities related to assets held for sale 12 - 132 - Total current liabilities 33,894 28,400 28,252 Total liabilities 47,489 42,489 42,954 TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 79,503 72,365 70,779 ===== SIDA 16 ===== 16 IN TER IM R EPO RT Q3 2023 Consolidated statement of changes in equity MSEK Capital stock Other capital contri- butions Net result of cash flow hedges Translation reserve Retained earnings Total parent company's shareholders' interest Non- controlling interest Total shareholders' equity Opening balance, 1 January 2022 2,174 6,099 -34 404 14,333 22,976 273 23,249 Net comprehensive income/loss for the period January- September 2022 -6 1,042 3,894 4,930 93 5,023 Transactions with shareholders: Share matching plan 151 151 151 Dividend -647 -647 - -647 Acquisition and sale of non-controlling interest 19 19 30 49 Closing balance, 30 September 2022 2,174 6,099 -40 1,446 17,750 27,429 396 27,825 Net comprehensive income/loss for the period October-December 2022 216 -254 2,044 2,006 23 2,029 Transactions with shareholders: Share matching plan 51 51 51 Dividend - - -30 -30 Acquisition and sale of non-controlling interest - - 1 1 Closing balance, 31 December 2022 2,174 6,099 176 1,192 19,845 29,486 390 29,876 Opening balance, 1 January 2023 2,174 6,099 176 1,192 19,845 29,486 390 29,876 Net comprehensive income/loss for the period January- September 2023 -139 80 2,711 2,652 45 2,697 Transactions with shareholders: Share matching plan 154 154 154 Dividend -703 -703 -20 -723 Acquisition and sale of non-controlling interest - 10 10 Closing balance, 30 September 2023 2,174 6,099 37 1,272 22,007 31,589 425 32,014 ===== SIDA 17 ===== 17 IN TER IM R EPO RT Q3 2023 Consolidated statement of cash flows MSEK Note Jan-Sep 2023 Jan-Sep 2022 Full Year 2022 Operating activities: Income after financial items 2,795 1,470 2,819 Adjustments for items not affecting cash flows 2,059 2,481 3,319 Dividend from associated companies and joint ventures 31 24 44 Income tax paid -511 -440 -596 Cash flow from operating activities before changes in working capital 4,374 3,535 5,586 Cash flow from changes in working capital: Contract assets and liabilities 492 -670 -153 Inventories -2,602 -2,385 -2,550 Other current receivables -949 1,113 -241 Other current liabilities 629 939 2,552 Provisions -312 -389 -540 Cash flow from operating activities 1,632 2,143 4,654 Investing activities: Capitalised development costs -379 -347 -500 Investments in other intangible fixed assets -225 -128 -186 Investments in tangible fixed assets -1,716 -926 -1,624 Sales and disposals of tangible fixed assets including biological assets 21 107 117 Investments in and sale of short-term investments 773 974 -49 Investments in financial assets, associated companies and joint ventures -434 -227 -240 Sale of financial assets, associated companies and joint ventures - 2 2 Investments in operations -241 - - Sale of subsidiaries and other operations 382 42 42 Cash flow from investing activities -1,819 -503 -2,438 Financing activities: Repayments of loans -478 -1,379 -1,386 Amortisation of lease liabilities -434 -369 -524 Raising of loans 130 1,394 1,394 Dividend paid to Parent Company’s shareholders -703 -647 -647 Dividend paid to non-controlling interest - -27 -62 Transactions with non-controlling interest 10 47 47 Cash flow from financing activities -1,475 -981 -1,178 Cash flow for the period -1,662 659 1,038 Liquid assets at the beginning of the period 2,869 1,701 1,701 Exchange rate difference in liquid assets 31 185 130 Liquid assets at end of period 11 1,238 2,545 2,869 ===== SIDA 18 ===== 18 IN TER IM R EPO RT Q3 2023 Quarterly consolidated income statement Quarterly consolidated statement of comprehensive income MSEK Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Sales 11,527 12,475 11,485 13,866 8,751 10,171 9,218 11,943 Cost of goods sold -9,046 -9,715 -8,983 -11,017 -6,870 -8,049 -7,184 -9,531 Gross income 2,481 2,760 2,502 2,849 1,881 2,122 2,034 2,412 Gross margin, % 21.5 22.1 21.8 20.5 21.5 20.9 22.1 20.2 Other operating income 15 114 283 101 43 69 18 98 Marketing expenses -633 -687 -641 -582 -561 -638 -553 -620 Administrative expenses -443 -491 -450 -463 -334 -384 -362 -407 Research and development costs -506 -522 -465 -529 -433 -439 -416 -416 Other operating expenses -26 -41 -14 5 -20 6 -44 -6 Share of income in associated companies and joint ventures -29 -68 -287 -68 -8 2 -23 15 Operating income (EBIT) ¹⁾ 859 1,065 928 1,314 568 738 654 1,076 Operating margin, % 7.5 8.5 8.1 9.5 6.5 7.3 7.1 9.0 Financial income 148 173 127 42 68 52 32 28 Financial expenses -154 -226 -125 -7 -201 -240 -201 -103 Net financial items -6 -53 2 35 -133 -188 -169 -75 Income before taxes 853 1,012 930 1,349 435 550 485 1,001 Taxes -197 -214 -195 -195 -111 -117 -113 -210 Net income for the period 656 798 735 1,154 324 433 372 791 of which Parent Company’s shareholders’ interest 652 774 732 1,115 305 421 354 733 of which non-controlling interest 4 24 3 39 19 12 18 58 Earnings per share before dilution, SEK ²⁾ 4.90 5.83 5.52 8.42 2.31 3.19 2.68 5.56 Earnings per share after dilution, SEK ³⁾ 4.84 5.76 5.45 8.32 2.28 3.15 2.66 5.52 1) Of which depreciation/amortisation and write-downs -565 -553 -556 -569 -547 -517 -494 -511 2) Average number of shares before dilution 132,998,278 132,797,185 132,579,931 132,417,754 132,257,777 132,067,095 131,887,719 131,743,033 3) Average number of shares after dilution 134,586,542 134,491,190 134,370,647 134,058,461 133,842,175 133,782,303 133,267,371 132,861,467 MSEK Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Net income for the period 656 798 735 1,154 324 433 372 791 Other comprehensive income/loss: Items that will not be reversed in the income statement: Revaluation of net pension obligations 161 701 -167 1,173 165 1,978 1,403 -345 Tax attributable to revaluation of net pension obligations -33 -145 35 -245 -33 -407 -290 71 Equity instruments classified as measured at fair value through other comprehensive income - 2 -0 -1 - - - - Tax attributable to equity instruments classified as measured at fair value through other comprehensive income - -0 0 0 - - - - Total 128 558 -132 927 132 1,571 1,113 -274 Items that may be reversed in the income statement: Translation differences -47 311 -171 -268 401 414 269 123 Net gain/loss on cash flow hedges 23 -152 -46 273 -141 -84 214 -69 Tax attributable to net gain/loss on cash flow hedges -5 32 9 -57 31 18 -44 15 Total -29 191 -208 -52 291 348 439 69 Other comprehensive income/loss for the period 99 749 -340 875 423 1,919 1,552 -205 Net comprehensive income/loss for the period 755 1,547 395 2,029 747 2,352 1,924 586 of which Parent Company's shareholders' interest 749 1,509 394 2,006 707 2,321 1,902 522 of which non-controlling interest 6 38 1 23 40 31 22 64 ===== SIDA 19 ===== 19 IN TER IM R EPO RT Q3 2023 Key ratios by quarter Quarterly information per operating segment MSEK Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Equity/assets ratio, (%) 40.3 40.2 39.6 41.3 39.3 38.7 38.0 35.7 Return on capital employed, % ³⁾ 11.4 10.5 9.6 8.8 8.4 8.1 8.1 8.1 Return on equity, % ³⁾ 11.2 10.4 9.5 8.6 7.6 7.8 8.4 9.0 Equity per share, SEK ¹⁾ ³⁾ 237.38 231.59 225.57 222.55 207.25 201.55 188.85 174.31 Free cash flow, MSEK ³⁾ -2,554 -1,564 3,125 1,439 398 395 -361 1,377 Free cash flow per share after dilution, SEK ²⁾ ³⁾ -18.98 -11.63 23.26 10.73 2.97 2.95 -2.71 10.36 1) Number of shares excluding treasury shares 133,073,163 132,923,392 132,670,977 132,488,884 132,346,624 132,168,930 131,965,259 131,810,178 2) Average number of shares after dilution 134,586,542 134,491,190 134,370,647 134,058,461 133,842,175 133,782,303 133,267,371 132,861,467 3) For more information and explanations regarding the usage of these key ratios, please see saab.com, investor, financial data, key ratios. MSEK Q3 2023 Operating margin Q2 2023 Operating margin Q1 2023 Operating margin Q4 2022 Operating margin Sales Aeronautics 3,135 3,397 3,070 4,258 Dynamics 2,750 2,720 2,702 3,287 Surveillance 4,149 4,739 3,894 4,793 Kockums 1,084 1,129 1,255 1,134 Combitech 816 1,023 966 1,035 Corporate/elimination -407 -533 -402 -641 Total 11,527 12,475 11,485 13,866 Operating income/loss Aeronautics 148 4.7% 187 5.5% 163 5.3% 257 6.0% Dynamics 328 11.9% 325 11.9% 389 14.4% 580 17.6% Surveillance 324 7.8% 451 9.5% 554 14.2% 520 10.8% Kockums 127 11.7% 112 9.9% 121 9.6% 139 12.3% Combitech 43 5.3% 75 7.3% 111 11.5% 95 9.2% Corporate -111 -85 -410 -277 Total 859 7.5% 1,065 8.5% 928 8.1% 1,314 9.5%- - - - MSEK Q3 2022 Operating margin Q2 2022 Operating margin Q1 2022 Operating margin Q4 2021 Operating margin Sales Aeronautics 2,555 3,073 3,056 3,637 Dynamics 1,880 2,208 1,793 2,790 Surveillance 3,152 3,562 3,109 4,008 Kockums 774 889 817 1,128 Combitech 703 866 795 904 Corporate/elimination -313 -427 -352 -524 Total 8,751 10,171 9,218 11,943 Operating income/loss Aeronautics 60 2.3% 178 5.8% 199 6.5% 267 7.3% Dynamics 318 16.9% 408 18.5% 256 14.3% 371 13.3% Surveillance 199 6.3% 223 6.3% 234 7.5% 400 10.0% Kockums 60 7.8% 55 6.2% 46 5.6% 116 10.3% Combitech 36 5.1% 55 6.4% 81 10.2% 69 7.6% Corporate -105 -181 -162 -147 Total 568 6.5% 738 7.3% 654 7.1% 1,076 9.0%2021 has been restated due to a minor structural change as parts of a department within Combitech has been migrated to Surveillance. Proforma statements are found at saab.com/investors/financial-data. ===== SIDA 20 ===== 20 IN TER IM R EPO RT Q3 2023 Multi-year overview MSEK 2022 2021 2020 2019 2018 Order bookings 63,116 43,569 42,328 27,216 27,975 Order backlog at 31 December 127,676 105,177 99,816 93,293 102,184 Sales 42,006 39,154 35,431 35,433 33,156 Sales in Sweden, % 42 38 36 37 41 Sales in Europe excluding Sweden, % 19 17 18 16 14 Sales in North America, % 11 11 11 11 10 Sales in Latin America, % 9 15 13 12 12 Sales in Rest of the World, % 19 19 22 24 24 Organic sales growth, % 5 11 1 6 4 Operating income (EBIT) 3,274 2,888 1,315 2,937 2,266 Operating margin, % 7.8 7.4 3.7 8.3 6.8 Adjusted operating income 3,274 2,888 2,738 2,937 2,564 Adjusted operating margin, % 7.8 7.4 7.4 8.3 7.7 Depreciation/amortisation and write-downs 2,127 1,938 1,518 1,368 916 EBITDA 5,401 4,826 2,833 4,305 3,182 EBITDA margin, % 12.9 12.3 8.0 12.1 9.6 Income after financial items 2,819 2,577 1,112 2,607 1,796 Net income for the year 2,283 2,025 1,092 2,025 1,366 Total assets 72,365 65,039 60,568 59,858 56,128 Equity 29,876 23,249 21,644 20,809 19,633 Free cash flow ¹⁾ 1,871 2,737 3,753 -2,036 -3,195 Cash conversion, % ⁴⁾ 79 113 101 ³⁾ -44 -95 ³⁾ Return on capital employed, % ¹⁾ 8.8 8.1 4.3 9.1 8.7 Return on equity, % ¹⁾ 8.6 9.0 5.1 10.0 8.1 Equity/assets ratio, % 41.3 35.7 35.7 34.8 35.0 Earnings per share before dilution, SEK ¹⁾²⁾ 16.61 14.57 8.07 14.88 11.27 Earnings per share after dilution, SEK ¹⁾²⁾ 16.41 14.45 8.01 14.81 11.21 Dividend per share, SEK 5.30 4.90 4.70 - 4.50 Equity per share, SEK ¹⁾²⁾ 222.55 174.31 162.32 154.48 145.43 Number of employees at year-end 19,002 18,153 18,073 17,420 17,096 Number of shares excluding treasury shares as of 31 December ²⁾ 132,488,884 131,810,178 132,247,073 132,926,363 133,482,880 Average number of shares before dilution ²⁾ 132,157,586 132,164,599 133,009,986 133,245,360 116,467,822 Average number of shares after dilution ²⁾ 133,724,223 133,293,340 133,877,141 133,929,292 117,144,915 1) For more information and explanations regarding the usage of these key ratios, please see saab.com, investor, financial data, key ratios. 2) The average number of shares outstanding for the comparative period 2018 has been adjusted in accordance with IAS 33, Earnings per share, in accordance with the terms of the rights issue completed in 2018. 3) Adjusted for items affecting comparability 4) Cash conversion = operational cash flow / operating income ===== SIDA 21 ===== 21 IN TER IM R EPO RT Q3 2023 Parent company The Parent Company includes units within the business areas Aeronautics, Dynamics, Surveillance as well as one unit within Combitech. Group staff and Group support are also included. A major part of the Group’s operations is included in the Parent Company. Separate notes to the Parent Company’s financial statements and a separate description of risks and uncertainties for the Parent Company have therefore not been included in this interim report. Parent company income statement Parent company balance sheet Liquidity, financing, capital expenditures and number of employees The Parent Company’s net debt amounted to SEK 175 million as of 30 September 2023 compared to a net liquidity of SEK 2,647 million as of 31 December 2022. Investments in tangible fixed assets amounted to SEK 749 million (540). Investments in intangible assets amounted to SEK 64 million (111). At the end of the period, the Parent Company had 10,742 employees compared to 10,055 at the beginning of the year. MSEK Jan-Sep 2023 Jan-Sep 2022 Full Year 2022 Sales 20,273 16,143 24,075 Cost of goods sold -16,767 -13,444 -20,287 Gross income 3,506 2,699 3,788 Gross margin, % 17.3 16.7 15.7 Operating income and expenses -2,827 -2,418 -3,366 Operating income (EBIT) 679 281 422 Operating margin, % 3.3 1.7 1.8 Financial income and expenses -127 -31 1,743 Income after financial items 552 250 2,165 Appropriations - - -623 Income before taxes 552 250 1,542 Taxes -150 19 -206 Net income for the period 402 269 1,336 MSEK Note 30 Sep 2023 31 Dec 2022 30 Sep 2022 ASSETS Fixed assets: Intangible fixed assets 1,017 918 914 Tangible fixed assets 5,268 4,802 4,517 Financial fixed assets 8,872 8,297 8,142 Total fixed assets 15,157 14,017 13,573 Current assets: Inventories 9,821 8,704 8,461 Current receivables 19,751 17,459 17,583 Short term investments 9,255 9,986 8,931 Liquid assets 274 1,603 1,288 Total current assets 39,101 37,752 36,263 TOTAL ASSETS 54,258 51,769 49,836 SHAREHOLDERS’ EQUITY AND LIABILITIES Equity: Restricted equity 3,360 3,360 3,366 Unrestricted equity 11,985 12,132 11,008 Total shareholders’ equity 15,345 15,492 14,374 Untaxed reserves, provisions and liabilities: Untaxed reserves 3,309 3,309 2,686 Provisions 2,607 2,704 2,645 Liabilities 8 32,997 30,264 30,131 Total untaxed reserves, provisions and liabilities 38,913 36,277 35,462 TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 54,258 51,769 49,836 ===== SIDA 22 ===== 22 IN TER IM R EPO RT Q3 2023 Notes to the financial statements Note 1 Corporate information Saab AB (publ.), corporate identity no. 556036 -0793, has its registered office in Linköping, Sweden. The company’s head office is located at Olof Palmes gata 17, 5tr, SE -111 22 Stockholm, Sweden, telephone number +46-8-463 00 00. Saab’s B shares are listed on Nasdaq Stockholm since 1998 and on the large cap list as of October 2006. The company’s operations, including subsidiaries, associated companies and joint ventures, are described in the annual and sustainability report 2022. Note 2 Accounting principles The c onsolidated accounts for the first nine months 2023 have been prepared in accordance with IAS 34 Interim Reporting and the Annual Accounts Act. The Parent Company’s accounts have been prepared in accordance with the Annual Accounts Act and the Swedish Fina ncial Reporting Board’s recommendation RFR 2, Accounting for Legal Entities. The Group’s and the Parent Company’s accounting principles are described on pages 106 -108, and concerning significant income statement and balance sheet items, in each note disclosure in the annual report 2022. The interim report is condensed and does not contain all the information and disclosures in the annual report and should therefore be read together with the annual report 2022. All the information on pages 1-29 constitutes the interim report for the first nine months 2023. The Group and the Parent Company use the accounting principles and calculation methods as described in the annual report 202 2. Important estimates and assumptions are disclosed in note 2 in the annual repor t 2022. Note 3 Segment reporting Saab is a leading high -technology company, with its main operations in defence, aviation and civil security. Operations are primarily focused on well-defined areas in defence electronics, missile systems, and naval systems as well as military and commercial aviation. Saab is also active in technical services and maintenance. Saab has a strong position in Sweden and the main part of sales is generated in Europe. In addition, Saab has a local presence in Australia, the U.S., South Af rica, and in other selected countries. Saab’s operating and management structure is divided into four business areas, which are also operating segments: Aeronautics, Dynamics, Surveillance and Kockums. In addition, Combitech, which provides consulting services, is an independent, wholly owned subsidiary of Saab. Corporate comprises Group staff and departments, a minority portfolio containing Saab’s ownership interests in companies in various stages of development as well as other operations outside the core operations. The Group’s operating segments recognise all lease contracts as expenses on a straight -line basis over the lease term. Aeronautics Aeronautics is a world-leading manufacturer of innovative aerial systems and is engaged in development of military aviation technology. It also conducts long-term future studies of manned and unmanned aircraft as preparation for new systems and further development of existing products. Dynamics Dynamics offers a market -leading product portfolio comprising ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, systems for training and simulation, signature management systems for armed forces around the world, and niche products for the civil and defence markets. Surveillance Surveillance provides efficient solutions for safety and security, for surveillance and decision support, and for threat detection, location, and protection. The portfolio covers airborne, ground -based and naval radar, electronic warfare and combat systems and C4I solutions. Kockums Kockums develops, delivers, and maintains world-class solutions for naval environments. Its portfolio includes submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems and autonomous vessels. Kockums’ unique competence is in signature management, impact strength and advanced stealth technology. Combitech Combitech is an independent subsidiary of Saab and from 1 July 2021 reported as an operating segment outside the busines s area structure within Saab Group. Combitech is one of the largest technology consulting firms in Sweden, combining technology with cutting -edge expertise to create solutions for its customers’ specific needs. Combitech is active in aviation, defence, tel ecom and other industries as well as the public sector. Combitech offers services in systems development, systems integration, information security, systems security, communications, mechanics, technical product information and logistics. Order bookings per operating segment Order bookings per region Order backlog per operating segment Order backlog per region Jan-Sep Jan-Sep Q3 Q3 Rolling Full Year MSEK 2023 2022 2023 2022 12 Months 2022 Aeronautics 8,878 6,098 46 5,276 1,960 15,899 13,119 Dynamics 19,563 9,285 111 3,245 2,989 28,089 17,811 Surveillance 14,845 14,025 6 5,723 1,855 23,786 22,966 Kockums 1,570 2,599 -40 640 706 6,238 7,267 Combitech 3,169 2,386 33 734 703 4,252 3,469 Corporate/elimination -1,715 -1,143 -641 -441 -2,088 -1,516 Total 46,310 33,250 39 14,977 7,772 76,176 63,116 Change, % Jan-Sep Jan-Sep Q3 Q3 Full Year MSEK 2023 2022 2023 2022 2022 Sweden 16,784 19,113 -12 6,448 2,678 31,832 Rest of Europe 8,656 4,291 102 3,143 1,286 18,605 North America 5,646 5,001 13 2,189 2,887 6,110 Latin America 57 1,077 -95 35 135 2,032 Asia 2,992 1,855 61 1,638 172 2,197 Africa 63 348 -82 4 306 361 Australia, etc. 2,593 1,565 66 512 308 1,979 Undisclosed country 9,519 - - 1,008 - - Total 46,310 33,250 39 14,977 7,772 63,116 Change, % MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 Aeronautics 41,926 42,645 39,868 Dynamics 42,362 30,821 25,688 Surveillance 43,092 41,301 37,456 Kockums 10,829 12,772 9,219 Combitech 1,591 1,227 1,183 Corporate/elimination -1,299 -1,090 -1,389 Total 138,501 127,676 112,025 MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 Sweden 50,062 48,485 41,957 Rest of Europe 37,455 36,799 25,285 North America 10,098 8,201 8,902 Latin America 17,577 20,012 20,208 Asia 8,451 8,409 9,683 Africa 557 615 630 Australia etc. 5,131 5,155 5,360 Undisclosed country 9,170 - - Total 138,501 127,676 112,025 ===== SIDA 23 ===== 23 IN TER IM R EPO RT Q3 2023 Sales per operating segment Sales per region Information on large customers During the first nine months 2023, Saab had one customer that separately accounted for 10 per cent or more of the Group’s sales. The Swedish Defence is a customer of all business areas and total sales amounted to SEK 13,409 million (9,540). Seasonal variation A major part of Saab’s bu siness is related to large projects where the revenue is recognised by using the percentage of completion method. The costs incurred in these projects are normally lower during the third quarter compared to other quarters. The fourth quarter is also usuall y affected by a higher number of deliveries, mainly within Dynamics. Operating income per operating segment Depreciation/amortisation and write-downs per operating segment Operational cash flow per operating segment Capital employed per operating segment Full time equivalents (FTEs) per operating segment Jan-Sep Jan-Sep Change, Q3 Q3 Change, Rolling Full Year MSEK 2023 2022 % 2023 2022 % 12 Months 2022 Aeronautics 9,602 8,684 11 3,135 2,555 23 13,860 12,942 Dynamics 8,172 5,881 39 2,750 1,880 46 11,459 9,168 Surveillance 12,782 9,823 30 4,149 3,152 32 17,575 14,616 Kockums 3,468 2,480 40 1,084 774 40 4,602 3,614 Combitech 2,805 2,364 19 816 703 16 3,840 3,399 Corporate/elimination -1,342 -1,092 -407 -313 -1,983 -1,733 Total 35,487 28,140 26 11,527 8,751 32 49,353 42,006 Jan-Sep Jan-Sep Full Year MSEK 2023 2022 2022 Sweden 15,331 43 11,335 40 17,555 42 Rest of Europe 7,858 22 4,972 18 7,838 19 North America 3,907 11 2,950 10 4,466 11 Latin America 2,488 7 2,749 10 3,901 9 Asia 2,967 8 4,341 15 5,910 14 Africa 78 0 59 0 88 0 Australia, etc. 2,509 7 1,734 6 2,248 5 Undisclosed country 349 1 - - - - Total 35,487 100 28,140 100 42,006 100 % of sales % of sales % of sales Jan-Sep Jan-Sep Q3 Q3 Rolling Full Year MSEK 2023 2022 2023 2022 12 Months 2022 Aeronautics 498 5.2 437 5.0 148 60 755 694 Dynamics 1,042 12.8 982 16.7 328 318 1,622 1,562 Surveillance 1,329 10.4 656 6.7 324 199 1,849 1,176 Kockums 360 10.4 161 6.5 127 60 499 300 Combitech 229 8.2 172 7.3 43 36 324 267 Group segments' operating income 3,458 9.8 2,408 8.6 970 673 5,049 3,999 Corporate -606 -448 -111 -105 -883 -725 Total 2,852 8.0 1,960 7.0 859 568 4,166 3,274 % of sales % of sales Jan-Sep Jan-Sep Q3 Q3 Rolling Full Year MSEK 2023 2022 2023 2022 12 Months 2022 Aeronautics 155 126 23 54 44 193 164 Dynamics 76 70 9 26 32 102 96 Surveillance 650 605 7 220 206 852 807 Kockums 22 22 - 8 7 29 29 Combitech 7 6 17 2 2 9 8 Corporate 764 729 5 255 256 1,058 1,023 Total 1,674 1,558 7 565 547 2,243 2,127 Change, % Jan-Sep Jan-Sep Q3 Q3 Rolling Full Year MSEK 2023 2022 2023 2022 12 Months 2022 Aeronautics -610 -350 -569 -230 -153 107 Dynamics 1,216 661 -999 256 1,806 1,251 Surveillance -760 1,095 -819 310 -541 1,314 Kockums 490 -307 556 61 509 -288 Combitech 55 -93 -36 -113 325 177 Corporate -925 -95 -191 275 -798 32 Total -534 911 -2,058 559 1,148 2,593 MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 Aeronautics 10,516 9,547 9,768 Dynamics 5,446 5,616 5,535 Surveillance 12,133 11,970 11,951 Kockums 1,701 1,515 1,349 Combitech 1,206 979 1,009 Corporate/elimination 10,901 11,324 10,003 Total 41,903 40,951 39,615 Number at end of the period 30 Sep 2023 31 Dec 2022 30 Sep 2022 Aeronautics 5,467 5,131 5,112 Dynamics 3,833 3,420 3,316 Surveillance 6,158 5,583 5,476 Kockums 1,635 1,462 1,406 Combitech 2,209 2,064 2,054 Corporate 1,611 1,461 1,398 Total 20,913 19,121 18,762 ===== SIDA 24 ===== 24 IN TER IM R EPO RT Q3 2023 Note 4 Distribution of sales Note 5 Items affecting comparability Note 6 Dividend to Parent Company’s shareholders The Annual General Meeting 2023 held on April 5, decided on a dividend to the Parent Company’s shareholders of SEK 5.30 per share, corresponding to a total dividend of SEK 703 million. Record date for the dividend was April 11 2023 and the dividend was paid out on April 14 2023. Note 7 Intangible fixed assets MSEK Jan-Sep 2023 Jan-Sep 2022 Jan-Sep 2023 Jan-Sep 2022 Jan-Sep 2023 Jan-Sep 2022 Jan-Sep 2023 Jan-Sep 2022 Jan-Sep 2023 Jan-Sep 2022 Jan-Sep 2023 Jan-Sep 2022 Jan-Sep 2023 Jan-Sep 2022 External sales 9,540 8,637 8,024 5,744 12,415 9,498 3,417 2,457 1,927 1,661 164 143 35,487 28,140 Internal sales 62 47 148 137 367 325 51 23 878 703 -1,506 -1,235 - - Total sales 9,602 8,684 8,172 5,881 12,782 9,823 3,468 2,480 2,805 2,364 -1,342 -1,092 35,487 28,140- - - - - - - - - - - - - - Sales by customer: Military customers 8,832 8,128 7,578 5,428 11,031 8,002 3,417 2,457 880 684 91 41 31,829 24,740 Civilian customers 708 509 446 316 1,384 1,496 - - 1,047 977 73 102 3,658 3,400 Total external sales 9,540 8,637 8,024 5,744 12,415 9,498 3,417 2,457 1,927 1,661 164 143 35,487 28,140- - - - - - - - - - - - - - Sales by significant source: Long-term customer contracts 8,236 6,961 2,914 1,335 9,393 6,993 2,118 1,948 - 23 92 42 22,753 17,302 Services 1,049 1,564 1,048 875 2,053 1,819 787 479 1,826 1,572 57 89 6,820 6,398 Products 255 112 4,062 3,534 969 686 512 30 101 66 15 12 5,914 4,440 Total external sales 9,540 8,637 8,024 5,744 12,415 9,498 3,417 2,457 1,927 1,661 164 143 35,487 28,140- - - - - - - - - - - - - - Sales by domain: Air 8,617 7,981 160 168 5,203 3,696 - - 29 29 39 18 14,048 11,892 Land 88 75 6,465 4,532 1,929 1,751 - - 883 698 15 1 9,380 7,057 Naval 7 3 1,364 1,026 3,830 2,483 3,417 2,457 4 5 61 87 8,683 6,061 Civil Security 41 35 19 13 1,444 1,558 - - 268 222 39 22 1,811 1,850 Commercial Aeronautics 787 541 - - 1 1 - - 4 4 6 14 798 560 Other/not distributed - 2 16 5 8 9 - - 739 703 4 1 767 720 Total external sales 9,540 8,637 8,024 5,744 12,415 9,498 3,417 2,457 1,927 1,661 164 143 35,487 28,140- - - - - - - - - - - - - - Sales recognition method: Over time 8,396 7,890 3,924 2,030 9,261 7,936 3,390 2,373 1,926 1,629 112 55 27,009 21,913 Point in time 1,144 747 4,100 3,714 3,154 1,562 27 84 1 32 52 88 8,478 6,227 Total external sales 9,540 8,637 8,024 5,744 12,415 9,498 3,417 2,457 1,927 1,661 164 143 35,487 28,140 Corporate/ elimination Group Aeronautics Dynamics Surveillance Kockums Combitech Item affecting comparability Business Area Line item Jan-Sep 2023 Jan-Sep 2022 Q3 2023 Q3 2022 Full Year 2022 Write-down of associated companies Corporate Share of income in associated companies and joint ventures -284 - - - - Capital gain from the divestment of MTM operations Surveillance Other operating income 270 - - - - Capital gain from divestment of property Corporate Other operating income 58 - - - - Total 44 - - - - MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 Goodwill 5,556 5,384 5,533 Capitalised development costs 5,984 5,958 5,974 Other intangible assets 1,218 906 895 Total 12,758 12,248 12,402 ===== SIDA 25 ===== 25 IN TER IM R EPO RT Q3 2023 Note 8 Net liquidity/debt Committed credit lines Parent Company Since 2009, Saab has a Medium Term Note programme (MTN) to enable issuance of bonds in the capital market. During 2018 the MTN programme was increased to SEK 10,000 million. A major part of the bonds are issued as Floating Rate Notes (FRN). During the quarter , bonds matured to an amount of SEK 88 million and no new bonds were is sued. Bonds outstanding within the MTN programme amounted to SEK 6,705 million by the end of the quarter. No revolving credit facilities have been utilised during the period. Note 9 Capital employed Note 10 Financial instruments Classification and categorisation of financial assets and liabilities²⁾ The Group has used the same valuation methods as in the year -end closing of 2022, as described in the annual report 2022 on page 149, note 35. As of September 30 2023, the Group had the following financial assets and liabilities at fair value: Financial assets at fair value Financial liabilities at fair value MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 Assets: Liquid assets 1,238 2,869 2,545 Short-term investments 9,288 9,988 8,931 Total liquid investments 10,526 12,857 11,476 Short-term interest-bearing receivables 74 67 73 Long-term interest-bearing receivables 640 564 607 Long-term receivables attributable to pensions 19 19 39 Total interest-bearing assets 11,259 13,507 12,195 Liabilities: Lease liabilities 2,626 2,794 2,552 Bonds and other debt instruments 6,744 7,101 7,098 Liabilities to associated companies and joint ventures 53 48 55 Other interest-bearing liabilities 48 45 46 Provisions for pensions ¹⁾ 418 1,087 2,040 Total interest-bearing liabilities and provisions for pensions 9,889 11,075 11,791 Net liquidity (+) / net debt (-) 1,370 2,432 404 1) Excluding provisions for special employers' contribution attributable to pensions. MSEK Facilities Drawings Available Revolving credit facility (Maturity 2026 SEK 4 billion, 2024, SEK 2 billion) 6,000 - 6,000 Overdraft facility (Maturity 2024) 94 - 94 Total 6,094 - 6,094 MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 Long-term bonds and other debt instruments 6,704 6,704 6,704 Short-term bonds and other debt instruments - 397 394 Total 6,704 7,101 7,098 MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 Total assets 79,503 72,365 70,779 Less non-interest bearing liabilities 37,600 31,414 31,163 Capital employed 41,903 40,951 39,616 Carrying amount 30 Sep 2023 31 Dec 2022 30 Sep 2022 Financial assets: Valued at amortised cost ⁴⁾: Accounts receivable, contract assets and other receivables 21,323 17,295 17,091 Liquid assets 1,238 2,869 2,545 Long-term receivables 762 676 714 Valued at fair value through profit and loss ³⁾: Short-term investments 9,288 9,988 8,931 Derivatives for trading 64 75 83 Financial investments 229 66 65 Valued at fair value through other comprehensive income ³⁾: Derivatives identified as hedges 1,652 1,760 2,417 Equity investments elected to be classified as fair value through other comprehensive income 920 52 53 Total financial assets 35,476 32,781 31,899 Financial liabilities: Valued at amortised cost: Interest-bearing liabilities ¹⁾ 9,471 9,988 9,751 Other liabilities ⁴⁾ 12,169 10,740 9,522 Valued at fair value through profit and loss ³⁾: Contingent consideration payable 129 - - Derivatives for trading 90 21 80Valued at fair value through other comprehensive income ³⁾: Derivatives identified as hedges 2,169 1,643 2,440 Total financial liabilities 24,028 22,392 21,793 ¹⁾ Fair value 9,377 9,840 9,582 ²⁾ Derivatives with positive values are recognised as assets and derivatives with negative values are recognised as liabilities. Derivatives with a legal right of offset amount to SEK 1,128 million. ³⁾ The impact of credit risk on these instruments is considered low given the limits in the current investment policy. ⁴⁾ Carrying amount, in Saab’s assessment, essentially corresponds to fair value. MSEK 30 Sep 2023 Level 1 Level 2 Level 3 Bonds and interest-bearing securities 9,288 9,288 - - Forward exchange contracts 1,269 - 1,269 - Currency options 9 - 9 - Interest rate swaps 438 - 438 - Shares and participations 1,149 - - 1,149 Total 12,153 9,288 1,716 1,149 MSEK 30 Sep 2023 Level 1 Level 2 Level 3 Forward exchange contracts 2,194 - 2,194 - Currency options 13 - 13 - Interest rate swaps 18 - 18 - Electricity derivatives 34 34 - - Contingent consideration payable 129 - - 129 Total 2,388 34 2,225 129 ===== SIDA 26 ===== 26 IN TER IM R EPO RT Q3 2023 Movements in the group’s Level 3 financial instruments were as follows: Note 11 Supplemental information on statement of cash flows Free cash flow Free cash flow vs. statement of cash flows Liquid assets Note 12 Business combinations On 31 August 2023, Saab announced the acquisition of 100 per cent of the shares in BlueBear Systems Group Ltd (BlueBear) for approximately SEK 383 million. BlueBear is a provider of AI-enabled autonomous swarm systems for complex defence and security applications. At the time of acquisition, BlueBear ha d 65 employees based in Bedford, United Kingdom. In 2022, the company had a turnover of GBP 8 million. The total consideration of approximately SEK 383 million includes an estimated contingent considerat ion at fair value of SEK 133 million. The contingent consideration is based on fulfilment of targets regarding financial performance and strategic objectives defined by Saab up until September 2025 and September 2027. The combination of Saab’s products, se rvices and solutions, and BlueBear’s experience as an agile integrator of AI -enabled autonomous swarm systems will be a driver of Saab’s future capabilities. BlueBear will contribute to Saab’s existing activities worldwide and Saab will benefit from BlueBear’s expertise in autonomy and swarming, as well as command and control systems. Details of the purchase price analysis, net assets acquired and goodwill are as follows: MSEK Unlisted shares and participations Contingent consideration payable Opening balance, 1 January 118 - Acquisitions 1,026 133 Unrealised gains/losses recognised in the income statement 3 - Unrealised gains/losses recognised in other comprehensive income 2 - Foreign currency translation - -4 Closing balance, 30 September 1,149 129 MSEK Jan-Sep 2023 Jan-Sep 2022 Q3 2023 Q3 2022 Full year 2022 Cash flow from operating activities before changes in working capital, excluding taxes and other financial items ¹⁾ 4,507 3,597 1,434 1,039 5,718 Cash flow from changes in working capital: Contract assets and liabilities 492 -670 -881 892 -153 Inventories -2,602 -2,385 -738 -760 -2,550 Other current receivables -949 1,113 -626 209 -241 Other current liabilities 629 939 -208 -311 2,552 Provisions -312 -389 -191 -72 -540 Change in working capital -2,742 -1,392 -2,644 -42 -932 Cash flow from operating activities excluding taxes and other financial items 1,765 2,205 -1,210 997 4,786 Investing activities: Investments in intangible fixed assets -604 -475 -181 -140 -686 Investments in tangible fixed assets -1,716 -926 -667 -306 -1,624 Sales and disposals of tangible fixed assets including biological assets 21 107 - 8 117 Cash flow from investing activities ²⁾ -2,299 -1,294 -848 -438 -2,193 Operational cash flow -534 911 -2,058 559 2,593 Taxes and other financial items -567 -431 -254 -78 -656 Sale of and investments in financial assets, associated companies and joint ventures -33 -90 -1 -83 -108 Investments in operations -241 - -241 - - Sale of subsidiaries and other operations 382 42 - - 42 Free cash flow -993 432 -2,554 398 1,871 2) Cash flow from investing activities excluding change in short-term investments and other interest-bearing financial assets and excluding sale of and investment in financial assets, operations and subsidiaries. If investments in and sale of financial fixed assets are considered to be of operating nature, the item is included in investing activities. 1) Including amortisation of lease liabilities Jan-Sep Jan-Sep Q3 Q3 Full Year MSEK 2023 2022 2023 2022 2022 Free cash flow -993 432 -2,554 398 1,871 Investing activities – interest-bearing: Short-term investments 773 974 2,053 765 -49 Other financial investments and receivables -401 -135 -195 -40 -130 Financing activities: Repayments of loans -478 -1,379 -209 -1,372 -1,386 Raising of loans 130 1,394 130 - 1,394 Dividend paid to the Parent Company’s shareholders -703 -647 - - -647 Dividend paid to non-controlling interest - -27 - -2 -62 Transactions with non-controlling interest 10 47 - 52 47 Cash flow for the period -1,662 659 -775 -199 1,038 MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 The following components are included in liquid assets: Cash and bank balances 1,238 1,619 1,945 Bank deposits - 1,250 600 Total according to balance sheet 1,238 2,869 2,545 Total according to statement of cash flows 1,238 2,869 2,545 Preliminary purchase price analysis for BlueBear MSEK Purchase price Purchase price paid August 30, 2023 250 Contingent consideration 133 Total consideration 383 Effect on liquid assets Purchase price paid August 30, 2023 250 Less: Liquid assets in the acquired company -27 Effect on liquid assets (positive (-) / negative (+)) 223 ===== SIDA 27 ===== 27 IN TER IM R EPO RT Q3 2023 The goodwill of SEK 116 million comprises the value of expected synergies thro ugh the consolidation of the operations of Saab and BlueBear arising from the acquisition. None of the acquired goodwill is expected to be deductible for income tax purposes. The fair value of intangible fixed assets amounted to SEK 279 million and is rela ted to previously non-capitalised development costs and customer relations. From the date of the acquisition, BlueBear has contributed to the consolidated accounts of the group with SEK 17 million to sales and SEK 3 million to income before taxes. If the a cquisition had taken place at the beginning of the year, sales would have increased by SEK 74 million and income before taxes would have increased by approximately SEK 6 million. Transaction costs of SEK 14 million have been expensed and are included in administrative expenses (included in cash flows from operating activities). On 7 September, Saab announced the strategic acquisition of CrowdAI in the U.S. for a minor consideration. During the second quarter 2023, Saab divested property in accordance with the resolution from the Annual General Meeting for the Share Purchase Agreement and a Lease Agreement with Vectura . The divestment resulted in a capital gain of SEK 58 million, classified as an item affecting comparability, and had a positive effect on free cash flow of SEK 75 million. See also note 5 and note 15. On 31 March 2023, Saab completed the divestment of the Maritime Traffic Management (MTM) operation within business area Su rveillance to funds advised by Agilitas Private Equity LLP. The purchase price amounted to EUR 46 million and the transaction generated a capital gain of SEK 270 million with a positive effect on free cash flow of SEK 307 million. The capital gain has been classified as an item affecting comparability, see note 5. In 2022, the divested MTM operations had sales of SEK 356 million and an operating income of SEK 42 million. The operations were presented separately in the statement of financial position as assets held for sale and liabilities related to assets held for sale as of December 31 2022. Note 13 Defined-benefit plans Saab has defined -benefit pension plans where post -employment compensation is based on a percentage of the recipient’s salary. Defined- benefit plans mainly relate to the Swedish operations, where the ITP2 plan accounts for more than 90 per cent of the total obligation. Pension obligation according to IAS 19 Actuarial gains and losses are recognised in other comprehensive income. The actuarial gain related to the Swedish pension plans amounted to SEK 695 million net in the first nine months 2023 primarily due to the following: Negative experience adjustment resulted in an actuarial loss of SEK 408 million. The return on assets under management was higher than expected which led to an actuarial gain of SEK 249 million. Assumptions about inflation and demographics were unchanged from the beginning of the year and did not result in any actuarial results. The inflation assumption was 1.75 per cent. The assumed discount rate increased from 3.75 per cent to 4.25 per cent resulting in an actuarial gain of SEK 718 million. The actuarial gain related to the special employer’s contribution amounted to SEK 136 million. Note 14 Contingent liabilities No additional significant commitments have arisen during the first nine months 2023. With regard to the Group’s so -called performance guarantees for commitments to customers, the likelihood of an outflow of resources is estimated as remote and, as a result, no value is recognised. Note 15 Transactions with related parties The Annual General Meeting held April 5 2023 approved a Share Purchase Agreement and a Lease Agreement with Vectura, an indirect wholly - owned subsidiary of Investor AB regarding premises to be used by business area Kockums and the subsidiary Combitech AB in southern Sweden. The sale of property was completed in the second quarter 2023, see notes 12 and 5. No other significant transactions have occurred during the first nine months 2023. Related parties with which the Group has transactions are described in note 37 in the Annual Report 2022. Note 16 Definitions Below are definitions of financial key ratios that are used in the report. For more information and explanati ons regarding the usage of these key ratios, please see saab.com, investor, financial data, key ratios. Capital employed Total assets less non-interest-bearing liabilities. Cash conversion Operational cash flow divided by operating income (EBIT). Earnings per share Net income for the period attributable to the Parent Company’s shareholders, divided by the average number of shares before and after full dilution. EBITDA Operating income before depreciation/amortisation and write-downs. EBITDA adjusted for items affecting comparability Operating income before depreciation/amortisation and write -downs adjusted for items classified as affecting comparability. EBITDA margin Operating income before depreciation/amortisation and write-downs as a percentage of sales. EBITDA margin adjusted for items affecting comparability Operating income before depreciation/amortisation and write -downs adjusted for items affecting comparability as a percentage of adjusted sales. Effective tax rate Current and deferred taxes as a percentage of income before tax. Equity/assets ratio Equity in relation to total assets. Equity per share Equity attributable to the Parent Company’s shareholders divided by the number of shares, excluding treasury shares, at the end of the period. Free cash flow Cash flow from operating activities including amortisation of lease liabilities and cash flow from investing activities, excluding acquisitions and divestments of short -term investments and other interest -bearing financial assets. Free cash flow per share Free cash flow divided by the average number of shares after dilution. Full Time Equivalent, FTE Refers to the number of full -time equivalent employees. Excludes long - term absentees and consultants but includes fixed term employees and part-time employees. Fair value of identifiable assets and liabilities at the date of the acquisition was: MSEK Intangible fixed assets 279 Tangible fixed assets 1 Current assets 53 Liquid assets 27 Total assets 360 Total liabilities 93 Total identifiable net assets at fair value 267 Goodwill 116 Purchase consideration 383 MSEK 30 Sep 2023 31 Dec 2022 30 Sep 2022 Defined-benefit obligation 9,547 9,742 10,781 Special employers' contribution 56 217 435 Less assets under management 9,148 8,674 8,780 Total provisions for pensions 455 1,285 2,436 of which reported as long-term receivable 19 19 39 ===== SIDA 28 ===== 28 IN TER IM R EPO RT Q3 2023 Gross income adjusted for items affecting comparability Gross income adjusted for items classified as affecting comparability. Gross margin Gross income as a percentage of sales. Gross margin adjusted for items affecting comparability Gross income adjusted for items affecting comparability as a percentage of adjusted sales. Items affecting comparability Items affecting comparability comprise the financial effects from events or transactions with material impact t hat are relevant to understand the result when comparing periods. Such events or transactions can relate to restructuring programs, costs related to disputes and legal proceedings, macroeconomic developments, impairment charges and gains and losses from divestments of group companies, joint ventures or associated companies. Net investments Investments, sales and disposals of intangible and tangible fixed assets. Net liquidity/net debt Liquid assets, short -term investments and interest-bearing receivables less interest-bearing liabilities and provisions for pensions excluding provisions for pensions attributable to special employers’ contribution. Net liquidity/net debt to EBITDA End of period Net liquidity/net debt divided by 12-month rolling reported EBITDA. Number of employees Headcount of all employed by the company, excluding fixed term employees and consultants. Operating income Income before financial items and tax. Operating income adjusted for items affecting comparability Operating income (EBIT) adjusted for items classified as affecting comparability. Operating margin adjusted for items affecting comparability Operating income adjusted for items affecting comparability as a percentage of adjusted sales. Operating margin Operating income (EBIT) as a percentage of sales. Operational cash flow Cash flow from operating activities, excluding taxes and other financial items, amortisation of lease liabilities and investments, sales and disposals of intangible and tangible fixed assets. Order backlog Total value of orders at the end of the period. Order bookings Total value of orders received during the period. Organic sales growth Change in sales in percenta ge adjusted for effects from exchange rate due to the translation of foreign subsidiaries, and structural changes such as acquisitions and divestments of subsidiaries. Research and development, R&D Research and development costs are recognised separately in the income statement and comprise the cost of self -financed new and continued product development as well as amortisation and any write - down of capitalised development costs. Research and development expenditures comprise both expenses incurred as costs excluding amortization and write-downs, and expenses capitalised as development costs in the statement of financial position. Return on capital employed Operating income plus financial income (rolling 12 months) as a percentage of average capital employed. Return on equity Net income for the period (rolling 12 months) as a percentage of average equity. Sales adjusted for items affecting comparability Sales adjusted for items classified as affecting comparability. ===== SIDA 29 ===== 29 IN TER IM R EPO RT Q3 2023 Glossary AEW&CS Airborne Early Warning & Control System C4I Command, Control, Communications, Computers, and Intelligence CDP Global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts FMV Swedish Defence Materiel Administration, Sw, “Försvarets materielverk” FRN Floating Rate Note IAS International Accounting Standards IFRS International Financial Reporting Standards MTN Medium Term Note, loan facility for issuance of bonds with a duration of 1-15 years MTM Maritime Traffic Management NLAW Next Generation Light Anti-Tank Weapon SBTi Science Based Targets initiative Stockholm 26 October 2023 Saab AB (publ) Micael Johansson President and CEO Review report Saab AB (publ.), corporate identity number 556036-0793. Introduction We have reviewed the condensed interim financial information (interim report) of Saab AB as of 30 September 2023 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. Scope of Review We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company. Stockholm 26 October 2023 PricewaterhouseCoopers AB Peter Nyllinge Authorised Public Accountant, Auditor in charge Fredrik Göransson Authorised Public Accountant ===== SIDA 30 ===== Important information This interim report may contain forward -looking statements which reflect Saab AB’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward -looking statements. Forward -looking statements inherently involve both known and unknown risks and uncertainties as they de pend on future events and circum stances. Forward -looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward -looking statements. This information is such that Saab AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on 26 October 2023 at 07.30 (CET). Contact Media: Mattias Rådström, Head of Media Relations +46 734 18 00 18 Financial market: Merton Kaplan, Head of Investor Relations +46 734 18 20 71 Johanna Hallstedt, Investor Relations Manager +46 734 18 79 10 Media and financial analyst conference: 26 October 2023 at 10.00 (CET) Live webcast: https://www.saab.com/investors/webcast/q3-2023 Conference call: Please dial in using one of the numbers below: Sweden: +46 8 5051 0031 UK: +44 207 107 06 13 US: +1 631 570 56 13 The interim report, presentation material and the webcast will be available on www.saab.com/investors Calendar Year-end report 2023 Published 9 February 2024 Q1 Interim report 2024 Published 26 April 2024 Q3