SAAB

Quarterly Report • Oct 26, 2023

Growth momentum in an evolving market

Q

INTERIM REPORT

3

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%.

15 Order bookings, SEK bn

31

Organic sales growth, %

7.5 Operating margin, %

Financial highlights

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.

CEO comments Growth momentum in an evolving market

Micael Johansson President and CEO

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 meet 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 parallel, 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 nextgeneration 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, we 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-overyear 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 11.5 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 increased 51% year-overyear 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 move 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 aftermarket 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-todate, 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 of reporting transparency and readiness for the upcoming European Sustainability Reporting Standards (ESRS). Our efforts within sustainability, innovation and people will be key to our long-term success and value creation.

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.

Orders

Third quarter 2023

Order bookings increased 93 per cent and amounted to 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 3,132 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

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

Sales per region

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

Classification of orders	MSEK
Small orders	<100
Medium-sized orders	100-1000
Large orders	>1000

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.

A total of 64% (43) of order bookings were related to markets outside Sweden during January-September

Market

2023.

Sales Jan-Sep, MSEK

*Includes items affecting comparability of SEK 1,496 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 write-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 minority portfolio. See note 5 for further information.

Financial net

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

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 consists 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 other 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.

Operating income (MSEK) and margin (%), Jan-Sep

*Includes items affecting comparability of SEK 1,108 million

Earnings per share after dilution, SEK

Internally funded R&D expenditures, MSEK

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 30 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 30 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

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

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.

3) Including tangible fixed assets and biological assets.

4) Relate to right-of-use assets for leases.

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 Write-down of loan receivable to	-33
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

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

1) Including amortisation of lease liabilities

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.

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.

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

Business Area Dynamics

Business Units

Ground Combat, Missile Systems, Underwater Systems, Barracuda, Training and Simulation, Tactical Support Solutions.

Market

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.

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

Sales in markets outside Sweden amounted to 78% (79) during the first nine months 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.

Market

months 2023.

Market Sales in markets outside Sweden amounted to 18% (10)

2023.

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

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

*adjusted for items affecting comparability

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 sales 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.

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

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 IPbased 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.

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

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 property 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 paid 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.

10 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 of 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 other 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:

	% of capital	% of 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

Source: Modular Finance

The percentage of votes is calculated on the number of shares excluding treasury shares.

Personnel

30 Sep 2023	31 Dec 2022
20,772	19,002
20,913	19,121

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, previously 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 life 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 gap 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 7th 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 and 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 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, the purchase of RECs has impacted emissions previously reported in Q1 and Q2 (-850 tonnes).

Quarterly Emissions Scope 1 & 2 Market Based Comparison Year-over-Year in Tonne CO2e per Quarter

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. Engineering (from 15th to 10th 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 promotes 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 Indicators1	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

¹ All performance indicators are global

² Number of lost-time injuries / total hours worked x 1,000,000

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 preferred 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 specialising 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.

Consolidated income statement

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

Consolidated statement of comprehensive income

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 Equity instruments classified as measured at fair value through other comprehensive	-143	-730	-388	-975
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

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

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 Transactions with shareholders:			-6	1,042	3,894	4,930	93	5,023
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 Transactions with shareholders:			216	-254	2,044	2,006	23	2,029
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

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

Quarterly consolidated income statement

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

Quarterly consolidated statement of comprehensive income

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

Key ratios by quarter

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.

Quarterly information per operating segment

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						-147
			-181		-162

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.

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

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

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

Parent company balance sheet

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

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.

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 consolidated 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 Financial 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 2022. Important estimates and assumptions are disclosed in note 2 in the annual report 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 Africa, 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 business 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, telecom 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

	Jan-Sep	Jan-Sep	Change,	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

Order bookings per region

MSEK	2023	Jan-Sep Jan-Sep 2022	Change, %	Q3 2023	Q3 2022	Full Year 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

Order backlog per operating segment

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

Order backlog per region

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

Sales per operating segment

MSEK	2023	Jan-Sep Jan-Sep Change, 2022	%	Q3 2023	2022	Q3 Change,	% 12 Months	Rolling Full Year 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

Sales per region

MSEK	Jan-Sep 2023	% of sales	Jan-Sep 2022	% of sales	Full Year 2022	% of sales
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

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 business 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 usually affected by a higher number of deliveries, mainly within Dynamics.

Operating income per operating segment

MSEK	Jan-Sep 2023	% of sales	Jan-Sep 2022	% of sales	Q3 2023	Q3	Rolling 2022 12 Months	Full Year 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

Depreciation/amortisation and write-downs per operating segment

MSEK	Jan-Sep 2023	Jan-Sep 2022	Change, %	Q3 2023	Q3 2022	Rolling 12 Months	Full Year 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

Operational cash flow per operating segment

	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

Capital employed per operating segment

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

Full time equivalents (FTEs) per operating segment

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

Note 4 Distribution of sales

	Aeronautics Dynamics			Surveillance		Combitech Kockums			Corporate/ elimination Group
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 Products	1,049	1,564 112	1,048	875	2,053	1,819	787	479	1,826	1,572	57	89 12	6,820	6,398
	255		4,062	3,534	969	686	512	30	101	66	15		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

Note 5 Items affecting comparability

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	Surveillance	Other operating income	270	-	-	-	-
operations Capital gain from divestment of property	Corporate	Other operating income	58	-	-	-	-
Total			44	-	-	-	-

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	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

Note 8 Net liquidity/debt

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.

Committed credit lines

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
Parent Company
		30 Sep	31 Dec	30 Sep

MSEK	2023	2022	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

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 issued. 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

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

Note 10 Financial instruments

Classification and categorisation of financial assets and liabilities²⁾

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 Valued at fair value through other comprehensive income ³⁾:	90	21	80
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.

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

30 Sep		Level 2	Level 3
9,288	9,288	-	-
1,269	-	1,269	-
9	-	9	-
438	-	438	-
1,149	-	-	1,149
12,153	9,288	1,716	1,149
		2023 Level 1

Financial liabilities at fair value

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

Movements in the group's Level 3 financial instruments were 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

Note 11 Supplemental information on statement of cash flows

Free cash flow

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

1) Including amortisation of lease liabilities

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.

Free cash flow vs. statement of cash flows
--------------------------------------------	--

MSEK	2023	Jan-Sep Jan-Sep 2022	Q3 2023	2022	Q3 Full Year 2022
Free cash flow Investing activities – interest-bearing:	-993		432 -2,554	398	1,871
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

Liquid assets

MSEK	30 Sep 2023	31 Dec 2022	30 Sep 2022
The following components are included in liquid assets:
Cash and bank balances Bank deposits	1,238 -	1,619 1,250	1,945 600
Total according to balance sheet	1,238	2,869	2,545
Total according to statement of cash flows	1,238	2,869	2,545

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 had 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 consideration 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, services 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:

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

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

The goodwill of SEK 116 million comprises the value of expected synergies through 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 related 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 acquisition 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 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. 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. Definedbenefit 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

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

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 whollyowned 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 explanations 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 longterm absentees and consultants but includes fixed term employees and part-time employees.

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 that 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 percentage 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 writedown 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.

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

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

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 depend on future events and circumstances. 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).