Saab AB (publ)

Welcome, everybody, to the presentation of Saab’s Half Year Results 2019. Welcome to those of you who are here in the room and also to you who are listening to the conference call or viewing us online.

I’m Ann-Sofi Jönsson, Head of Investor Relations. We will run through the presentation today and then we take a Q&A.

For those of you who are viewing us on the web, feel free to pose a question throughout the whole presentation, and we take your questions in the Q&A session. We will open up the conference call for Q&A after the presentation.

And with that, I would like to hand over then to Hskan Buskhe, our CEO, who will be followed by Magnus Örnberg, our CFO.

Thank you, Ann-Sofi. To all of you, welcome to this fantastic day.

We have the opportunity again to present a very good result, good growth, but I will also, of course, touch the announcement that had been done now at the Fairford Royal International Air Tattoo regarding the future cooperation between UK and Sweden regarding fighter aircraft technology. So I will start.

I don’t know if I will run through it, but at least walk through it. Some highlights for the first half year, strong organic growth of 7% that shows that we had a very good execution in our projects and our deliveries.

Mainly, of that growth are coming from our large order backlog and that’s a sign of productivity to convert that order backlog to sales. And we can see that the business and the business opportunity is great even though the order intake was, what we’ve informed about, was not so good the first half year, we see a lot of opportunities for the second half year and I will come back to that.

Improved operation income, as we’ve said in November 2016, we will have a couple of steps, a total of five of them, towards the 10% target, and we are now taking another step this year. And it’s very – well, good to be able show an increase of productivity and margin due to projects execution, but also as a result of some of activities we took last year quarter three regarding some productivity gains that we announced during that period.

Cash flow, following the plan, as we have said, we already stated in 2016 and 2017 due to milestone payment in the big projects that we will have fairly tough situation in 2018 and 2019. And as we also guided in February and in April, we see the first three months with a negative cash flow.

But we will have a good cash flow in quarter three and from a rolling perspective 12 months ahead from that we will see positive cash flow connected to the payments when we start to deliver our – in our big programs. So that’s mainly the highlights.

Well, as you can see and also when you’re following the markets around the world, that lot of tension and we can see that in the interest of our products, mainly in Europe and United States but also in other countries. We have, especially when it comes to small orders, an increase with more than 20%.

And we also gained significant large ammunition, an AT4 order, the support weapon system in the United States. And the interesting thing with that order that is more than SEK4 billion that we don’t put that on our order backlog due to the construction of those agreements where there are not funded in the way that we have defined it to be able to be in the order backlog.

However, we haven’t seen any time that we have such order not being fulfilled by the U.S. government.

So if we take that into consideration for the first half year, we have the growth of business done that creates, of course, activities and sales going forward in the first half year. So that was an extremely important part for us.

Of course, also the ten years agreement with FMV for Carl-Gustaf, and also the announcement that we are selected to do the system integration for the Finnish Squadron 2020. That we will see materialize as an order in the second half year.

If you look at the market trends and if we go back for example to 2014, when the annexation of Crimea was done by the Russians, we could see a change of the stability of those trades, but also security around the world. And after 2016, we can also see a new pattern where we have trade wars, where we have a different way of doing trade politics and also international relationships that have totally changed the paradigm.

And it’s hard to predict where the world is going, and I think that’s also creating a lot of uncertainty. Uncertainty creates more focus on civil security and military security, and we can see that in the investments.

We have ongoing a lot of deals that could materialize in the second half year that we already are in discussion to settle. Some of them could have been concluded the first half year, so we see extremely good business opportunities.

And I saw from the media and the highlights, for example, that one thing that was highlighted are order intake as we present it was weak. But again taking account the order in the U.S.

that we haven’t put into the account in the same way, and we see lots of opportunities this year but also the years to come in a market that is hard to predict where it’s going. But we know the investment in defense and also if you look at the Defence Bill in Sweden that was presented, it’s a clear understanding that investment in defence is something that is needed in Europe, in United States but also elsewhere.

So let’s go back to the announcement that was done nine o’clock UK time this morning by the Swedish Defence Minister and the Secretary of Defence for United Kingdom. This is fantastic for Sweden, but also for Saab, of course.

We are in a great position when it comes to deliver these type of capabilities. Nine years ago, we didn’t have any big projects ongoing within Saab.

We were little bit searching for what will be the next step. Then we received an order from Sweden and later on from Brazil and we have been able to develop in record time the new Gripen E, and the first delivery will take place on the November, 10.

We are the only one in the Western world building a new fighter. At the same time, we are the only one together with The Boeing Company building a new trainer system.

There are two main programs ongoing in the Western world today and we are in both of them. And the declaration today from the government of UK and Sweden and also my Chairman, Marcus Wallenberg, had a speech there earlier today, shows that Saab and Sweden have technological capabilities that are needed in other projects.

And of course, if this now materialized that everyone is striving for, we can see a long and sustainable future for our capability. And what is important in our business is that to develop our scale, develop our technology, we need projects, we need new challenges.

And that will, of course, also enhance the Gripen E. Gripen E is built in a module way that you can update more or less online.

You don’t need to wait for a mid-time upgrade. So it fits us very well when it comes to technology that could be adopted to the Gripen E system, but also looking into the future combat aircraft systems.

So it’s a perfect fit for us. I can’t really see there could be a better day than today when it comes to our capability connected to fighter aircraft.

Going back to facts and figures and Magnus will come back more in detail, of course. Order bookings we have been into little bit down, but the total volume of business is higher than last year if I take in consideration the U.S.

business. Sales up, total 8%, but 7% organic growth.

Operating income, we have a 7.2% margin for the first half year. And operating cash flow, as we have predicted, is negative.

We’ll be negative for Q3, positive for Q4 and onwards. So it’s a good quarter two if we look at the last, including this one for quarter of quarter two.

And there is a significant increase of operating income, and of course, this is a proof of that we are going in the right direction when it comes to reaching our goal of 10% as we also have said and committed ourselves some years ago. Going back to cash flow; at the end of the day, you do business to have cash in your wallet.

That’s the whole idea. But sometimes you need to do investments to be able to capture cash all the time.

And we have grown – if we take in consideration with our outlook, we have grown around 50% the last four or five years and that consumed cash, but also in connection to the milestone payments that we have in the large programs. So this graph we presented last quarter and we tried to pinpoint the range where we have an estimate of the cash.

And we come up in – a little bit better than in the middle of the dotted area. We can see that Q3, depending on the closing, could be a little bit worse, depending on the closing, but Q4 could be a little bit better than we had anticipated.

So if you accumulate both Q3 and Q4, it will be in the range of what we have said already. So nothing changed when it comes to cash flow from our perspective for the full year.

And then the delivery starts to take place and that means also according to the large contracts that we will receive cash and up in a cash-positive way in the rolling 12-month period of the years to come. So the outlook remains the same.

So the sales growth in 2019 expects to be in line with the Saab long-term financial goals, so with 5%. And operating margin in 2019, excluding material and non-recurring items, is expected to improve compared to 2018 and take us further to the goal of 10%.

So with that, I would like to hand over to Magnus.

Thank you, Hskan. Okay.

Let’s look a little more into the financials as we normally do here, and I go straight into the summary. Yes, we had a good order intake on the small orders, and together with those frame contracts that we just have won, we will – we really set a good pace going forward.

Sales growth, 8%; 7% organic and this is, of course, very much due to the good execution in our large projects, but also good deliveries especially in some areas. I’ll go through that in more detail.

Margin going up. Yes, volume is important.

Growth helps us there, but not only that, we also work a lot on our productivity improvements and maybe a little bit of a mix effect also here now in the beginning of the year. So that’s a positive thing – a very positive start of the year.

Cash flow, negative and this is very much working capital buildup in our Aeronautics business area and this is in anticipation of our starting to deliver towards the end of this year and also in the years going forward. So we are in that phase now moving in from development into production.

And this is also, like we just saw on some slides, very much in line with our plan and also how we guided after Q1. Net debt increases, of course, with cash flow negative, but also we had a one-off change that we did already in Q1 with roughly SEK 2.2 billion.

Also in Q2, we again lowered the discount rate for the pension liability meaning that the debt increased roughly SEK 1 billion in the quarter and around SEK 600 million for the full year. This is – this has no liquidity impact, so that of course will change, it’s more of an accounting treatment.

I can also highlight the net income because that has significantly grown and those of you who follows us know that last year we had a more negative impact due to the currency movement. And of course this year, it has been more stable.

Order backlog, very important to keep the eye for us, as you know. And we have roughly SEK 15 billion out of the backlog to be executed this year.

We have done more than SEK 16 billion, almost SEK 17 billion, so that gives us a very good base for growth and supports the growth outlook that we have done. So that is a good support for us.

Obviously, we want to continue to build backlog, and I’ll come back on that. Order size, yes, we talked about that.

It’s mainly the small- and medium-sized orders. Roughly two-thirds of the order intake, so far, has been the small ones and then the, as I normally said, these are very good for us, normally better margin and normally quickly to turn around into sales.

So that supports also growth near term. And where are the orders coming?

It’s – as you can see here, it’s very much dynamics and even though we haven’t booked the whole big order that we just received from U.S. there, part of that is included, roughly SEK 700 million, SEK 800 million.

But on top of that, we have a lot of other orders in Dynamics. So that is really looking good and we have already announced also another large orders in – already in July now for Dynamics as well.

So that really supports the growth going forward. Backlog is good in all areas.

It highly supports the buildup of sales going forward. And here we have the sales and we can see now that Aeronautics is starting to improve on the volume and this is, of course, very much in line with the execution of the large contracts by now.

Dynamics very much so and this is very much in line with the delivery schedule, and we are pushing out more deliveries in the first half than last year. Surveillance is okay and Support and Services as well.

Growth in IPS and that is good. This is an area where we need to grow both volume but also the margin and I’m coming back on that.

In Kockums, we have a little bit less and this is more a sign of, as well, starting to finish off the upgrade program on the current submarines, if you want to put it like that, and that we are in the phase of moving into the execution of the new one. So there we see a little bit of a lowering of the volume right now.

And how does this play out in the earnings? Yes, Aeronautics, good execution, a lot of activities and also a little bit less – or less expenses for the T-X now when we’re now into the new phase there.

So there we see good improvement in operating income and also the margin. Dynamics.

We have talked about this for long time that volume is super important for them and has a big impact on the level of the earnings, but also the margin. So here you see a big swing up now in the margins and that is good to see.

Surveillance is more of a sign of good execution in the large contracts. Supports and Service in line with where we were and on a good level.

And also good to see IPS now, not the level but the improvement and we are happy to see the right direction there on the margin. In Kockums, we have a challenge where I just talked about the volume a bit and that is, of course, impacting the earnings but also this where we are now sort of in between the development phase and into the production and that has sort of an impact on the earnings right now.

And but, of course, we see no reason why we in the long-term shouldn’t improve that. That’s how it is right now.

Cash flow. Good cash flow operations and then we are tying up some capital and quite a lot in Aeronautics obviously and that is what we have been talking about.

And as you can see here, it’s – if we isolate all the items, it basically comes out that the contract assets that is going up and this is exactly how to plan for the project execution in those large contracts are lined up. And so this is very much in line.

If anything, probably the investing activities is maybe slightly lower than we have planned. So this is very much in line with the plan.

And the financial position. We started off with roughly SEK 1.5 billion net debt in the year, and we have this one-off impact as I talked about on the IFRS 16 or the leasing balances.

We have, of course, the investment from the working capital and CapEx, and of course, also the pension obligation, which has increased. Worth to note that most of that is not liquidity, if we put it like that.

The net pension obligation is significant with today’s very low interest rates and our liquidity in the company is very strong. So the focus, same focus as of Q1.

We have to get – of course, chase more orders and this we do every day and we have a lot of opportunities, as we stated, going forward. Productivity improvements.

Volume is good, but we also need to be more efficient when we execute and that is important for us. We have taken a lot of actions.

We start to see the effect of that now. Project execution, as important as ever.

I don’t think this is going to be probably the biggest impact on how we will succeed going forward, meeting all the milestones and then we will generate the result that we want to see. And all of this, all together, of course, should support our cash generation going forward.

And we will have a tough Q3, we know that and this is all in the plans. In Q4, we should have a positive and then moving forward with the deliveries also next year.

With that, I open up for Q&A.

Okay. Thank you very much.

I think we start to see if we have someone here in the room who wants to pose a question. No?

No one here today. Then we would like to open up the conference call to see if we have anyone on the call who would like to ask a question.

Hello everyone. Congratulations on the results today.

Thank you.

A few questions from my side. I will take them one by one, if that’s okay.

Yes.

So we’re now halfway through 2019 and I wanted, to begin, to ask if the year has gone by according to your plan or your expectations so far? We already discussed cash flow quite a lot, but I was more referring to operational performance and order intake.

Yes, very much so we – compared to what we have outlined from an internal perspective and steering, yes, we are in line. And if I look at the operational and the productivity, the main area that we need to work harder on is, of course, Saab Kockums.

That is not according to our expectations, and we have different activities ongoing to come to a more balanced way to support the profitability. So that’s one thing.

When it comes to receiving business, yes, even though we presented and accounted the first half year a little bit weaker than last year but the total business volume, and we see good possibility of business opportunity for the second half year. And we’re able to say that you need to be already now in negotiation to close that type of business.

So we see positive – we’re very positive on the next half year when it comes to both order intake and productivity. Maybe you like to add something.

I agree. I think it’s very much according to plan.

Sometime, it was maybe a little bit better; in some, maybe we can do a little bit more. But like you said, this is – I would summarize it as that, yes.

And following up on your last mention here, the order intake. Can you give examples of some major orders where you’re currently competing, where you would expect your potential customers to make a decision over the next, let’s say, 6 to 12 months?

I’m not saying that they will choose you, but they will at least make...

No, but I think we – what I’m saying that we are in negotiation then we are already, of course, pointed at to receive that business. And we have announced that, for example, when it comes to Squadron 2020.

That’s a fairly big order when that materialized. But we have also other areas that we are looking very positive to close that.

And so of course, there are also other areas that could come up, be closed. But I think what I’m referring to is where we mainly have been – we are in the end of the discussion to settle that business.

Of course, it’s not done until it’s done, I think that’s important to say. So yes, I don’t know if you would like to add with?

No. I think we don’t need to be more specific than that now at this point in time.

But there are no reason to have less ambitions than the full last year, for example.

And just to follow up there on the submarines, nothing new on that side?

Well, I think we have been able to show that we have great capability within the Saab Kockums that we built up. We delivered the Gotland after the half-time modification, but we mainly have put in the new technology that will be built into the A26.

We put also – planning into water for sea trials. We are, of course, in a good progress of A26 as well even though all these types of projects are always challenging, but that also proves that we have the capability when it – if you take that in consideration with Gotland and that creates a better international momentum and trust and that strengthens our position in possible deals as in the Netherlands and elsewhere.

Okay. And my final question on – I guess, it’s threefold.

It’s on today’s announcement, which is obviously positive news. And I was just wanting to see what would you see as a reasonable component for Saab to deliver here?

And also would this mean additional internally funded R&D in the short and midterm? And lastly, on that topic, can you confirm whether or not the rights issue from last year specifically was due to this.

I, of course, appreciate that not all of it was due to it, but some definitely.

No. But I think if we look at – first of all, I have to say this is – I mean we are now in the phase of starting up and investigate and it will take 1.5 year to come up with a concept that then will be intact position going forward.

But if you have asked me, the possibility for us to be involved in this type of projects together with the Brits who have now taken a decision to create that capability, if you asked me some years ago, I would not say we were there to be a partner. Now we are the only one building a new fighter, the Gripen E and the T-X and so on.

The interesting thing with our industry and the UK industry, we within Saab, have the full capability as the UK industry has divided in some couple of companies excluding building fighter or jet engines. And of course, we have a – well, we would like to partner with our technology and also, of course the full capability of building a full system.

That is what we are looking for. We have excellent cooperation already today with British industry.

We have to bear in mind that around 25% of all the – the whole supply chain for the Gripen E, more than that is coming from UK. So I – we will not be shy in that perspective, but we will also, of course, respect the deep knowledge and technology that the UK has.

But I mean it creates huge business opportunities for us. It creates also huge opportunities to increase the capability of Gripen E.

And it also creates capability and also that we can attract good engineers and keep and develop our technology with the horizontal 2035, 2040. And if we go back to the ‘50s and the ‘60s, one reason we have been so good building and developing fighter aircraft technology and sensors is that Sweden during that time, more or less each 15 years, took a new project and goal.

That to be able to develop this type of capability, you need to have new projects, you need to have new demands and you need to really challenge your mind and capability then you will be relevant to different Air Force and a good partner. So this is perfect.

I – but we will come back I think in – well, I don’t – would like to say near time, but during the year at least to be more specific on the split and things like that.

And I think it’s too early to talk about if this is going to lead to more internally funded R&D or not, how this will be organized. As you say, Hakan, I think it very much depends on where this evaluation now together with Swedish government, UK government and the partners in the UK.

So we have to see how that would go out.

But the main idea is, of course, it will be external funded.

Yes.

That is one important message. And coming back to the right issue, it’s important for us to be a partner, to have a strong balance sheet, no doubt.

And I think we already, during last year when we announced the right issue, that the cooperation with UK could be won. But it’s not the full potential that we see and there are also other growth opportunities out there to strengthen our business.

But of course, it supports these kind of co-operations. This is one of the reasons we did it, of course.

Yes.

Thank you very much.

Thank you.

Thanks. Thanks.

Hi, yes. Just to follow-up quickly on Kockums, what happened here in the quarter?

And is this something that you can improve already in Q3, Q4 or will this continue?

I think it’s – there are a couple of things, of course, in the total. One thing is that when you are focusing on delivering what we have done now with Gotland and Uppland, you have a timing issue in between to be able to focus and have the right number of people working on a A26 for example.

I think we will have some struggling in the months to come, but of course, we have different methods and different steps to take this in the right direction. I don’t have any different view on Saab Kockums, the goals or anything.

They should contribute to the overall spending – overall margin and we have plans for that. So for us as well, I mean we have been extremely conservative when we have done the validation of our projects.

We haven’t boosted that from calculation perspectives. We have been in the lower conservative range.

But of course, there are different methods to bring this into the right level, no doubt.

Okay. And A26, is that developing according to plan or something else there ?

Yes, it’s developing and the time line for delivery still on the same time frame. I think what is important to understand here also is that it had been extremely difficult to do the half-time modification of the Gotland and Uppland at the same time running day 26, at the same time rebuilding the shipyard, at the same time building up the capability.

And I think we have some effect of that, but we are coming through that as well, but I think that was underestimated from the very beginning. But we have clear potentials to make this working in the right direction.

But I think it’s – what is important is that we can prove that we can deliver. It would be even worse if we have ended up in this situation and not be able to deliver on the orders that we have.

But I think there are great possibility to turn this around.

Can you also maybe comment on the timing of the Tempest project? What type of time frame are we talking about here?

Yes. You can say it’s divided in two parts.

We will be a partner with the Tempest team so it’s a little bit confusing. There are a team already consisting of UK companies having, together with the U.S.

Air Force, a technology study. They will be supportive, as it was said during today’s announcement.

The other thing that Sweden have – together with UK government have signed on is now to have a prestudy that will take place from now until the end of 2020 to come up what type of capabilities should we focus on in near time, mid-time and long time to create – so it will be prestudy now and there will be a conclusion of that in beginning of 2021. At the same time, we will be a supporter of this technology study as well.

So this is how it looks like.

Okay. Great.

Yes. And one finally, if I may.

Regarding the frame agreements that you have more and more of those, can you maybe summarize the largest ones, which are not in the order?

We had, at length, discussion of that on the Board of Directors yesterday and I think we need to come up with some kind of comparison for the market. Now when we are even growing more in the U.S., we have work to do to present that to the market.

But it’s getting bigger and bigger, and that’s a problem also when you look into our order backlog and don’t take those orders into consideration. We have work to do on that, but I – we would like to come back to that so we don’t just take a figure.

But it’s substantial as we speak.

And it’s a positive trend.

Yes, it’s been a positive trend. But bear with us, we need to do it also so you can see the – I mean it’s not just to present it right now.

It’s also to give some kind of a history so you can compare from a market perspective, you can do your own judgment and that’s what we would like to try to track. Thank you.

Okay. Thank you.

We have a few questions from the web. So we start with the first one from Sebastian Sprenger at Defense News.

He wonders if the partnership with the UK is geared specifically at the Tempest program. And if the idea is to develop a sixth-generation fighter together with the British.

If you listened to the representative from – for the Minister of Defense for UK and also our minister, of course, that’s a great possibility that could be the outcome. And of course, starting up this type of cooperation with a lead time over 10 years, that is, of course, one aim.

Another aim is to come up with technology that could be placed or giving an enhancement of already existing systems. And as our Chief of Air Staff, Mr.

Helgesson, said, we should also have in mind that it’s not just the frame we’re talking about. The fighter aircraft today, for example, the Gripen E, consists – the total development cost is 75% software.

And if you go back to the C/D, you’re talking less than 40%. And then you have other type of systems that connects.

So there are possibility in short term, midterm to do a lot of other things. So that’s also an aim in this cooperation to increase the capability of our two different platforms and existing systems.

But of course, as said today, one main aim is to jointly built the system and the fighter system that will take over 2014 and onwards.

He has another question on – related to Switzerland and Gripen. Do you consider the Air 2013 chapter closed?

And what are the potential avenues to try and return the Gripen to the competition? And he also wants to hear from you what your lessons are or what lessons learned Saab has meant from how they evaluate – the elimination went down.

Well, first of all, we are very clear that our offer is still valid for the Swiss Air Force. We believe that’s the best solution that they could have.

So that’s one thing. One issue that has been clear for us the last year is that they would like to have an operational aircraft tested.

And of course, if you do that, someone that’s already standing on the line. The Gripen E is not there yet.

You have that two years ahead. On the other side of the coin then is that the Swiss are missing the possibility of buying something that are the newest and the best.

And the reason for that it’s better. I haven’t figured it out yet.

So that’s the way it is. And we have to take that as it is.

But the offer is still valid and if they change their mind and would like to have the best solution, of course, we are open. But as we speak right now, there are no activities ongoing with the Swiss authorities.

Okay. The next question is from Hamish Dalgarno at Jefferies.

So to what extent does the working capital cash outflow in the first half year relate to the start of serial production of the Gripen E?

Very low. I mean this is a very large – first of all, it’s a very large extent Aeronautics and it is all – yes, I would say the whole is related to both the Swedish program and the Brazil program so I think it’s both basically.

I wouldn’t call it only production, but it is sort of the tail end of development and the production start-up.

Very good. The next question is from Agnieszka Vilela at Nordea.

And she’s wondering if we could give some color on what the competencies – what competencies Saab will add to the Tempest project. And also if we already know if the new fighter is still to be based on the Gripen platfor m, Typhoon, or a completely new platform.

First of all, there are not so many countries in the world that could build a modern fighter. It’s not just a question of designing a fuselage.

It’s a question of designing everything from electronic warfare, passive sensors to active sensors and do full integration land systems and communication systems. So it’s a huge scale of systems and integration and design.

And there are many countries who would like to have that capability, but there are just a couple of few in the world that have this capability that we have. We have also another capability that was also one of the reasons why we were able to work together with The Boeing Company is that we have digitalized the way how we bring forward a new fighter, a new complex aircraft, everything from design engineering to production and testing.

That means that we are working in the most modern way with one data flow, one data system. We are building digital twins and that means that we don’t build test aircraft, we are building serial aircraft that we are testing.

And we are testing, we are updating our digital twins. It gives a much shorter lead time and much less cost, much more predictability how to build that.

And there, we are unique in the world. So I think one big issue when you’re going into this type of projects is how to predict the cost.

And we have shown that we are able to decrease cost and increase capability of the things that we are developing and shortening lead times, and I think that’s also an extremely important part of what we can contribute to the whole project together with the skilled partners in U.K.

Very good. And we have another question from Hamish Dalgarno at Jefferies, and he has questions related to the GlobalEye.

And if there would be any chance that we can sketch out the time line for GlobalEye such as the point reach in its development and testing. And then the second part is related to GlobalEye and their offer to Finland.

And he’s wondering if Finland does not have an airborne early-warning capability, and if not, then this package that we have offered with Gripen and GlobalEye seems like a significant addition of capability. And would or might Finland also look at buying GlobalEye in isolation of Gripen.

If we start with the project as such, it goes tremendously well, not just rebuilding the aircraft and the capability of flying the aircraft, but now we’re also testing the mission system, the energy supply, everything. And the result is even better than we have expected.

And we will deliver according to time schedule to our first customer in UAE. The possibility of small details and track them and target them in both air, sea and land mode at the same time, there’s not such a system in the world today.

And that gives also an increased capability for your other type of capabilities within an Air Force, for example, or also when it comes to Navy but also on the land side. You have much better endurance of your capability in a stress situation having this type of capabilities than otherwise.

When it comes to the specific question of Finland, I’d rather not answer that. I think that’s a question for our friends in Finland to answer.

But as from a general perspective and the simulations that we have done for ourselves, but also other things is that it increase the capabilities. It’s rather dramatic to have this type of capability.

Thank you. The next question is from Johan Lind at News Agency Direkt.

Turkey is leaving the American F-35 fighter program. And is Turkey a possible Gripen customer?

And how do you view the chances of being able to sell weapons to Turkey given the political situation there?

Well, we have a – I mean, first of all, Turkey, they have their own program ongoing and they are trying to build that up. We basically – a couple of years ago, we closed our office in Turkey and it’s not main focus market for us at all.

So it’s not on our prospect list and a big thing. Of course, we have still an installed base that we are supplying, some training equipment and so on.

But it’s not a big market that we focus on.

Okay. Then we have a last question from the web, which is from Stefan Hansen.

And he is wondering if we could say how much of the order backlog at the end of Q2 was related to T-X.

It – fairly small.

Yes, very little.

We are in the industrialization phase as we speak now and there are different steps towards the U.S. Air Force to be taken.

That project, by the way, is going very good. We are in line with both cost and time, and we also announced that we will build up our production facility in West Lafayette in Indiana, so…

And maybe we could also add that we received an order from Boeing last year …

Yes, last year.

Which was above – which had a value of above SEK 1 billion that we are now working on for a couple of years so…

Exactly.

We will do that for next three years – two and half.

Yes. Okay.

No more questions in the room, I believe. And we have no more questions from the web.

So thank you very much.

Not at all?

No, not the end.

It’s so that Ann-Sofi have decided to eject from the company. We haven’t agreed upon that.

Which we have not accepted.

We would like to thank you for an excellent work the last 11 years. You are a great support to me and Magnus.

I think also you are extremely appreciated from the market side as well. And you’re not going so far away, that’s close Wallenberg company and Lotus, so we’ll be following that, maybe buy some shares.

So thank you so much for your good work.

Thank you, Hskan.

Thank you.

Thank you very much. Thank you, Magnus.

Thank you.

It has been fantastic 11 years…

Good luck.

To be on this journey, so thank you very much.

Thank you.

Thank you very much.

Now you can close.

Thank you for listening in and being here with us today and Saab is looking forward to welcome you back in October for the third quarter results. Thank you very much.

Thank you.

Bye.

Thank you.