YEAR-END report 2016 13 February, 2017 Håkan Buskhe, President and CEO Magnus Örnberg, EVP and CFO This document and the information contained herein is the property of Saab AB and must not be used, disclosed or altered without Saab AB prior written consent.

agenda Highlights 2016 Market situation AND Trends Outlook 2017 Financial update

Highlights 2016 Strong interest in Saab offering globally Record high tender levels Sales growth in line with long-term financial goal of an organic growth p.a. of 5 per cent Strong order backlog in all business areas; about 4 times our sales Improved gross margin year-on-year; strong cash flow generation, despite no sold receivables Historic year with launch of three new platforms: Launched a new generation Airborne Early Warning system, GlobalEye Rolled out new generation of Gripen Rolled out the trainer aircraft for the US Air Force T-X-programme; the T-X aircraft flew in December MARKET PERFORMANCE innovation

agenda Highlights 2016 Market situation and trends Outlook 2017 Financial update

Market situation Geopolitical unstable situation Increasing demand for cost-efficient solutions Short lead times important Ongoing focus on improving supply chain efficiency Local partnership for research and development and production

Global defence materiel market 7 Global defence materiel market 4% 14% Russia Europe - 40% 3% North America -1% 25% Asia Middle East & Africa 11% 4% 3% South America 3.0% According to IHS Janes, total global defence spending grew by almost 1% in 2016 compared to fairly lacklustre growth in 2015. The average growth 2005-2008 was 6% annually as the US built up the defence budget in order to finance overseas operations. Global spending peaked in 2011 at USD1.59 trillion (USD 2016). Combination of US withdrawal from operations in Iraq and fiscal consolidation particularly among the NATO members following the financial crisis caused spending to fall to USD1.51 billion in 2013 with cuts of 2% and 3% in 2012 and 2013 respectively. They forecast spending to reach USD1.58 trillion in 2017 and then USD1.60 trillion in 2018. Until the oil price recovers, growth patterns are likely to remain volatile but the key aspect is that no further global cuts to spending are expected in the next ten years and the growth rate should improve as key markets get back on track. Significant budget revisions in western Europe, the end of cuts in the US and a lower oil price pulling the rest of the world’s growth downward mean that non-NATO spending is forecasted to exceed NATO spending in 2023 3% 2% Australia Share of global defence procurement market, 2016 X% 3% Compound annual growth rate, 2017-2021 (constant USD) X% Source: IHS Group, February 2017

Financial highlights, 2016 Operating margin adjusted for non-recurring items

Operating income and operational Cash flow 9 Operating income and operational Cash flow * * * *Free cash flow

Long-term financial goals 10 Long-term financial goals Organic sales growth averaging 5 per cent annually over a business cycle. Operating margin after depreciation and amortisation (EBIT) of at least 10 per cent annually over a business cycle. Equity/assets ratio of over 30 per cent. Focus on areas with strong market position Strengthen position in areas with growth possibilities Local partnerships Project execution Operational excellence Continuoulsy develop leaders and employees Further strengthen core areas Invest in research and development Diversity drives innovation 5% MARKET 10% PERFORMANCE >30% innovation

agenda Highlights 2016 Market situation and trends Outlook 2017 Financial update

Outlook statement 2017 We estimate that sales growth in 2017 will be higher than Saab’s long-term financial goal: annual organic sales growth of 5 per cent. We expect the operating margin, excluding material non-recurring items, to improve compared to 2016 and thus the company will take a step towards its financial goal: an operating margin of 10 per cent.

agenda Market situation and trends Highlights 2016 Outlook 2017 Financial update

Summary 2016 Strong order backlog; small orders continued to increase Sales growth of 5 per cent: Driven by large projects in order backlog, and; Strong development in business area Dynamics Gross margin and operating margin stable – in line with management expectations Operating cash flow strong; no trade receivables sold Balance sheet continued strong with equity/asset ratio >32 per cent

Financial key data MSEK 2016 2015 Change Order bookings 21,828 81,175 -73 Order backlog 107,606 113,834 -5 Sales 28,631 27,186 5 Operating income 1,797 1,900 Operating margin 6.3% 6.6%* Net income 1,175 1,402 -16 Free cash flow 2,359 -726 *Adjusted for non-recurring items Sales growth driven by large orders as well as growth in business area Dynamics Major advances and milestone payments received, resulting in strong cash flow; no trade receivables sold in 2016

Order backlog Strong order backlog in all business areas Order backlog duration, SEK bn 31 Dec 2016 31 Dec 2015 31 Dec 2014 2017: 24.5 2016: 21.8 2015: 17.8 2018: 17.0 15.9 10.2 2019: 13.5 12.3 5.7 2020: 15.8 11.7 5.6 After 2020: 36.8 After 2019: 52.1 After 2018: 20.8 Total: 107.6 113.8 60.1 Strong order backlog in all business areas

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

order bookings and order backlog Dynamics received several important orders, for example for the new generation of the weapon system Carl- Gustaf Support and Services saw strong growth in small orders, 11 per cent increase y-o-y Major order in airborne early warning area received in January 2017 40 000 Order backlog 60

Sales 5% 14% -15% 23% 1% Sales growth mainly driven by the Gripen programmes, GlobalEye and the submarine A26 Sales in Dynamics strengthened due to good order development 25%

Operating income 320 Dynamics increased volume led to strong margin recovery Operating income affected by investments in T-X-programme Minority stakes in Venture portfolio, early stage investments had a negative impact on earnings in IPS EBIT-margin 8.1 7.5 4.4 9.1 4.4 5.9 9.1 8.9 6.0 3.7 12.3 5.8

Cash flow 2016 MSEK Cash flow from operating activities before changes in working capital 2,927 Change in working capital 1,421 Investing activities -1,745 Operational cash flow 2,603 Tax and other financial items -194 Acquisitions and sale of subsidiaries and other financial assets -50 Free cash flow 2,359 Acquisitions and sale of subsidiaries and other financial assets

Financial position December 2016, MSEK Net liquidity (+) / Net debt (-), 31 December 2015 -3,217 Cash flow from operating activities 4,154 Change in net pension obligation -531 Net investments -1,745 Sale of subsidiaries 28 Dividend -530 Currency impact and unrealised results from financial investments 5 Net liquidity (+) / Net debt (-), 31 December 2016 -1,836 Net pension obligation, 31 December 2016 2,424 Total interest-bearing assets, 31 December 2016 -560 Liquidity Equity/assets ratio, 31 December 2016 32.3

Focus 2017 Focus on execution of large projects – project management Build order backlog in selected areas Drive efficiency improvements throughout the organisation Functional and operational excellence

WWW.SAABGROUP.COM