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Welcome to the presentation of Saab's First Quarterly Report 2018. Welcome to you here in the room and also welcome to you who are viewing us online or listening in to the conference call.I'm Ann-Sofi Jönsson, Head of Investor Relations. With me today, I have our CEO, Håkan Buskhe; and our CFO, Magnus Örnberg. We run through the presentation and after that we take a Q&A session. So for those of you who are viewing on the webcast, please feel free to place your questions during the presentations at any time. And for those who are listening in on the conference call, we will open up for questions after the presentation.So with that, I hand over to you, Håkan.
Thank you so much, Ann-Sofi, and welcome to the quarterly report for 2018 and welcome to our new head office, especially for you that are here on a fiscal matter. Hope you have the time to go through the exhibition outside here later on.So I will give you an overview of my presentation. Before I start, I will go through some of the market condition, briefly the result, and some key topics. And then Magnus will go into more, as we say, facts and figures.So if we start with the market development and the situation that we can see around the globe, so it goes without saying -- and I have said it many times now in this quarterly reports that geopolitical tension or the political equation, if I may say so, starts to have more and more variables and less equations to solve the problems that we're standing ahead of.Of course the crisis that we can see and the wars going on in Syria, in Ukraine, but also in another places in the Middle East; the increased tension, even though we see some positive activities and discussions between U.S. and North Korea; but huge problems in South China Sea; and also the trend that we have from the protectionist point of view and the commitment to free trade is of course something that disturbs the world order.That means that the discussions and the request for information regarding our products are still increasing, especially from Europe, but also Asia and also an increase in North America.And the market pattern, as I mentioned before and I would like to hand along, the trend is short lead-times and capability to deliver shortly -- and we have that capability. So I think we can meet the demands from our customers. And also going forward to have the capability of the products that we are delivering to the market that you can do upgrades and also change your capabilities with the systems in the years to come.Some highlights; we didn't really had any mega orders this first quarter, but we are very happy to see that we have some really good milestones. I will come back to the major projects. But we had our first flight with the GlobalEye a little bit more than 2 -- just 2 years of signing the contract, and that's also underlying our capability to deliver on the things that we have undertaken.Strong order intake if you look at medium-sized orders. Finland selected Saab as the major supplier for their Squadron 20 [ 2000 ] Mid-Life Upgrade -- extremely important -- and also ordered the new light torpedo that we a little bit more than a year ago received an order from the Swedish Armed Forces. And the Gripen development order for support between '18 and 2020.Some figures; we increased small and medium-sized orders, an order intake of SEK 6.1 billion, a growth of 2%, still a high order backlog. And operative income -- and if you remember what I said during my presentation a couple of months ago for the full year 2017, I was very clear on saying that this first quarter will not be in the same magnitude as last year. Especially, last year was extremely good. If we see this quarter, it's the second best ever, what we're presenting now. And so even with that comment, this outcome is better than what I had and Magnus have foreseen. So we think that's a good foundation for the next of the year.If I comment the cash flow, very much in line with our expectations when it comes to our programs and big customer undertaking. End of last year we received the payment in advance of our schedule, so that quarter 4 was a little bit better. That gives of course some deviation this quarter, but it's according to the plans that we have.We are running 4 large projects. And then, as you can see -- you can say of course it could be 5. But if I start with the T-X, we're now in the phase of turning in the final offer and we expect during the summer to have result and the selection process should end when the U.S. Air Force taken a decision which way they would like to go. And I think we have a very good offer. So we don't have that on the list. If I go back a year then or half a year, we would have had 5 major programs up here.And the situation that we are in, we started a lot of engineering activities, not so much delivering of equipment. And I think I will take the time to say when we -- and maybe we haven't been so clear on that in the past. When we have a heavy period as we have today in all of these programs, doing a lot of engineering activities to develop the products, it's not so much income as when you start to deliver. And the delivery time starts in the end of next year. So I think that's important for you to know.And many of those projects have a connection to our still big order backlog. So to deliver on time on those are extremely important. And that is what we are doing.I like to remember you again, we had the order for Sweden. We received that in 2013 and we had our first flight last year. And so it goes according to plan. The same thing with the Gripen NG, order received 2015 and delivered 2024. But we start to deliver some aircraft in -- during next year. And the same thing with A26, we -- the second submarine will be delivered 2024.GlobalEye, we received the order 2015, and we had our first flight during March this year, so just 2 years. And I think that shows that we have capability to deliver on time. Even though I would also like to say they are huge, well, steps in the technology. So the projects are not easy and it's not so that everything is smooth because it can't be that when you really challenge and break new barriers. But we are according to time and according to the plans that we have been -- well, we had agreed upon. So I think these are important part to spend some time and so that's why I would take this opportunity.Another thing, of course, Gripen. We can see even more interest for the Gripen and some new countries during this quarter have shown a firm interest and -- for the Gripen E. So I have no other reason to believe that we will do our 400-plus aircraft over the time, the years of this period. And we also have taken a decision for the industrialization and also some key development for the export market to do some features for the aircraft for the export market.I think also if you have read the press -- I think it was yesterday -- about the announcement from Dassault or Airbus going for the next generation fighter, as they claim, to be delivered 2035. We have many open doors to see what we can do and maybe if there are a place for us or not. I'm not sure if that will materialize.On the other hand, we have the next generation programs already in discussion. And we are the only one delivering a new fighter aircraft as we speak. And that means also a signal to the market, of course, that the Rafale and the Eurofighter are in the end of their development programs as well. So that means, as I can see it from the announcement, we have a period of time where we can deliver the best aircraft in the world. So very promising future for the Gripen going forward.Digitalization and also development, we can see the rapid development, as you know, and our new ideas and attempt to work together within EU, for example. And there we are a partner together with the situation awareness for the maritime called Ocean 2020, where we are then delivering situation awareness. And there are 15 countries involved in that.And I think that will be the new thing with the efforts now that the European Union are undertaking for coordinating more of the European defense development, even though it's very small compared to the total development of the full EU R&D in defense. But anyway, it starts something.We also open up a new development center in Finland, in Tampere, where we are focused on microwave technology. And that's up and running. Extremely happy to see the qualified people that we have been able to recruit.We also -- when it comes to digitalization and our digital and remote tower system, the academy, Entry Point North, have chosen us and we have written an LOI to have that as an education platform going forward. We open up and announced a collaboration with Lund University.And where we have the largest in percentage growth today are in the cyber security area, with a double-digit growth. And today, we have more than 300 employees working with cyber security. And that also goes without saying, especially now when we have an upcoming election in Sweden, but also in other places around the world, how do you protect society for these type of attack on our digital platforms.Outlook. Well, I said that I was positive to our first quarter, even a little bit better than I had anticipated. So therefore, we can confirm the outlook as we said in February. So sales growth in 2018 expected to be in line with our long-term financial target, 5%, and operating margin, excluding material nonrecurring item, is expected to improve compared to 2017 and bring Saab further on closer to our financial goal to 10%.So with that, I will hand over to Magnus.
Thank you, Håkan, and thank you to all of you coming here, listening. Let me run through some of the financials and some details, and then we open up for Q&A.First of all, I want to reiterate that this was a strong quarter when it comes to order intake, especially on the medium-sized orders, but also the smaller ones. And so I think it's the third highest order intake we've ever had in a Q1, so it's a good start.Sales increased 2%. I think that's a good start as well, and I think it's the highest first quarter we have seen sales so far. Yes, we have a little bit comparison challenge towards last year because we had a kick start last year with 2 large orders that actually influence most parameters, not only the order side, but also the execution and results.Operating margin, we say stable at 5.8%. I think it's a good start, and I believe it is a little bit better than what we anticipated. Yes, we had a bit of challenges on some deliveries moving later in the year, but that is very much due to Dynamics and also that's where we can get also a product mix change.We also did some adjustments on project margins in some smaller projects, especially in Surveillance. I'll come back on that. So that was the impact this quarter.We also have a financial net impact on -- due to the currency fluctuations in our tender portfolio and especially sort of the weak Swedish krone against euro and dollar.Cash flow, like Håkan said, very much in line with plan and the majority of the impact here is from our projects and the schedule on when you get the money on payments and when you have the buildup of the work. I'll show you that also in a minute.We have a strong balance sheet, continued equity to asset ratio of above 30, and we have also done a few actions in the quarter to increase our financial flexibility with issuing some bonds, which was also well received in the market.Backlog, an important KPI for us, as you know, strong still, well above SEK 100 billion. Roughly, SEK 21 billion to be executed for the rest of the year, and together with what we have already done, this supports the growth ambitions for us going forward. What is also good to note is that the backlog for the coming years, '19, '20, '21, is significantly strengthened from one year ago. So there it also moves in the right direction.Order size, as I said, it's mainly the small to medium-size orders in this quarter and we are roughly in a book-to-bill ratio of 1.For the BAs; you can say on the order size it's a good start for Aeronautics with the development order that we have seen now. In Dynamics, obviously the comparison is tough with the large order last year, but otherwise good order intake as well. And the same goes for Support and Service, where we also had the airborne early warning order last year. But I think the summary is that we have a good backlog in all BAs moving forward.Execution, sales; a very good start of the year for Aeronautics and that should be like that. I mean, we have a full speed ahead there now and so it's a good start there. And also in Surveillance we had good execution on moving on the projects. A bit of a challenge in Dynamics, but that's more of a timing issue. We knew it's going to be a low quarter for the deliveries there and -- but that will come more later on and also in the years to come there. So the backlog is very solid.And the comparison for Support and Service is very much that last year we got a big order that we could quickly generate sales from outsourcing. That's also in line with our plan.On the result; very happy to report back on the Aeronautics development and this is of course very much in line with the sales growth. But also that our costs are a bit lower, especially for the T-X project now. So that is also helping of course in that.Dynamics, here it's very clear that with lower deliveries and also a product mix issue here, we see of course lower earnings. But for the full year, we expect us to move back into the last level -- last year's level.Surveillance, good execution on project, as said, but also we took some project margins adjustment in the quarter, which explains the deviation to previous year. A very good start also in Support and Service with 13% margin, and that we are really happy about.IPS, a challenge. We are doing a strong quarter for Combitech and that's continuing the development. But we are in a phase of development for the other units that are in that one and we still need more volume there in order to come back on margins. And Kockums is delivering as planned.As Håkan said, we see a great interest in our product portfolio, especially Gripen of course, where we now see -- very well received what we are doing and getting more confidence in our development programs. And so we have decided to accelerate investments in the Gripen development. And part of that will be capitalized and that can also be seen in the balance sheet. And part of that is, of course, that we are now moving into an industrialization phase and preparing ourselves for new export orders.We can say that historically and in the last years, the majority of the capitalized development has been GlobalEye. Moving forward in the years to come, it will be more of Gripen in here.Cash flow. Yes, cash from operations good. But we are having a timing challenge with the working capital and -- but to a very, very large extent, almost 100%, is due to the project and the timing in the project, and which is very much planned as well in that way.On top of that, we are also continuing to invest both in the development, as I just mentioned, but also in CapEx, as we are in a phase now where we are preparing ourselves for production. So we are moving towards the end of development, into the preparation face for production and then into production.Financial position. Yes, with the cash flow in the quarter, we have now a net debt of around SEK 4 billion and it is very much the buildup of working capital, as I said. And as before, a large portion of course is in the net pension obligation with today's very, very low discount rate on that. So that will of course over time also change. A strong balance sheet, which is important for us and continues to be above 30%.Going forward, yes, we are in this phase now where we have to focus on project execution, which we are. And that's #1 priority for us: meeting the milestones, execute on time, execute on cost and deliver the technical solution as we have promised. So this is #1 focus for us and will be throughout the year.On top of that, of course we also need to build backlog in selected areas and we are working hard on that. We have a big backlog, but of course in certain areas of our 21 BUs of course there are room for further orders. So this is of course a very important target for us.To also take the next step and move on to our target, of course we need to work on efficiency. Volume is important, as we have said -- it is a very important factor for us of course -- but also to continue to work on internal efficiency both in the supply chain and operations but also in the functional area. So that this a key focus for us going forward as wellSo with that, I would like to open up for the Q&A.
Okay, perfect. So we start with the Qs here in the room.
Douglas Lindahl, Kepler Cheuvreux. Just a clarification. You mentioned a few times that Q1 was better than your expectations. Was this primarily on I guess the margin side or the order intake?
Especially, on the margin side.
And an update on the Gripen situation in India. I guess you met with Modi when he was in Stockholm. Anything interesting from that discussion and also with regards to timing here?
No, but I think I said that to some journalists during that meeting -- I mean, when you meet for a few minutes like that it's of course -- I mean, it will not bring things forward during such a meeting. And what I would like to underline, what is important now it's a very clear process with a request for information that we will, of course, answer to. I think we have an extremely strong offer and we also know that our possibilities have increased due to fulfilling our time schedule. And also that we have a good project execution towards Brazil, because of course there are discussions between countries "how is it to work with those guys up north" and things like that. But I think this process will take some time before we know and -- how it will turn out. But I'm not less optimistic than before.
So no real clarity on timing with regards to...
No, I think they will come back with a more clear process or how they would like to move forward after the RFI -- when that have been analyzed in the end of this year.
And moving on to T-X, just a timing question as well. Is everything going according to the previous timeframe? Is it mid-summer we are waiting for? Or...
Yes, they have said summer. And that's a definition that varies between different countries, especially if we just keep our view on the north of the equator. Well, let's say we believe July, August somewhere we can have a reaction back on our offer.
Erik Golrang, SEB. Three questions. The first one is on the -- your confidence to increase capitalization of development costs for the Gripen. I mean, historically over the last couple of years at least you've been pretty conservative in capitalizing. But now you're accelerating this. That's a big delta I think. Where does this increased confidence come from? Can you say something more tangible there?
Yes, I -- I mean, we have very clear rules how to handle different stages of R&D. I mean, when we don't have a specific customer and we do R&D, we take it directly over the P&L, as we have done, for example, with T-X. When we see that we are in industrial phase and we have customers that can utilize the things that we already have planned then to invest into and also in this case see that we have great opportunities. These are the milestones when we take it over the balance sheet. So, yes, we have huge confidence in our product. I think the announcement yesterday we should not underestimate what that means, that the Airbus and Dassault is now planning for the next generation to replace Eurofighter and Rafale. At the same time we're coming out with something brand new. So it will be a gap for a time where it open ups. But it's also so that we have had during this quarter a couple of new countries that have shown interest. And due to the phase in the program where we are now going in more to production, realization of the engineering work, we have taken that decision to speed up. I don't know if you would like...
Yes. And a very majority of the development cost is of course taken in the first contracts. So, I mean, it's on top of that you can say, yes.
And then the second question, you highlight specifically in '18 Focus to build backlog in certain product areas. Which product areas are we talking about and why do you -- I mean, obviously you always want to build backlog. Why do you emphasize this? Would it mean that if it hasn't happened a couple of quarters in that we have an issue here in terms of load and potentialization to exit or close down operations? Or why the -- why that specific line in there?
I think that's – I mean, if you take the vast majority of all our business units, they're doing well. Then, as we also said during the last presentation in February, we will go much more into our portfolio reshaping. And in some areas, we can see that we have low order backlog or order intake -- that's one thing -- but also where we have high order intake; there are some adjustments that needs to do to the profitability. And in some case, we can also see if we are really the right owner for that product line. And for further investments that is needed due to the technology change. So it's related to these type of issues.
And also I think we -- I mean, we have fairly long cycles in our production as well, so you need to be ahead as well. And if you have read, Erik, last quarter we also had that line in. So it's not a new message of course, yes.
I have to go back and read then. Final question from me. On these -- you talk about project adjustments which had a negative impact on the margin. But then you also say that the margin overall came out better than expected. So there's no -- those adjustments were also as expected and there's no drag from that on the full year margin outlook? No pressure on the second half, it will then be a bit better than you thought previously?
No, I think we can say that the under -- I mean, we managed to, say, take some of those margin adjustment and still deliver slightly better. And I think that's a strength. So the underlying is probably slightly better also then we expected to begin with. So I think that's how we should look at that one.
We don't -- and we stopped that 2010 when I entered into my job to report an adjusted line, because I believe a running business is always -- you need to deal with things all the time. In this specific case why we mention it, it's close to -- we normally report as nonrecurring item. And sometimes when we start a project many years ago -- and that's why it's important to have short lead-times. You can see that, "Ah, that technology doesn't really fit anymore," or we need to do it in another way due to the rapid change of technology. So this is not major projects where we have done this or -- but anyway, we are really conservative when it comes to our balance sheet and not have an overvalue in our PUC.
Björn Enarson, Danske Bank. Last year in Q1 you had some extraordinary or very strong contributions from both the GlobalEye projects and also within Dynamics, which was a little bit of a onetime impact. I guess, do you have some similar items this quarter as -- I guess, because of expectations you're not really reflecting those items as last year. This is more of a normal quarter for you?
I would say it's --
This is more...
-- yes, more of a normal, maybe down slightly, hit by some project adjustments. But otherwise, yes.
Negative, yes.
No, I would agree. Yes.
And on those revisions you did to the project margins, is that something we will see with Surveillance pressuring the EBIT margins in Q2 to Q4? Or is this a write-down for this quarter?
It's more of this quarter issue. But like we say, we are conservative. We are reviewing all projects every month and the bigger ones even more carefully -- but for sure every quarter. And so of course we will review that. But, I mean, there's nothing. I mean, if we would have known it, then we would have...
Then you have to take it.
Yes.
So there are no -- I mean, if we see an issue, you have to take it according to the accounting rules. So we can't foresee anything this quarter in that perspective.
And Aero, is this the new level that we should expect for the year in terms of sales and perhaps profitability, the best guess?
I think we are in a new phase when it comes to Aeronautics. Of course we have -- I mean, if you're developing with the big portion that we have been involved in and still are involved in in the T-X, taking that over the P&L, it has an impact. But also other executions is going in the right direction. What could change even more positive is of course if we can settle still what we hope. For example, we see the deal during this year.
And one more on India and -- do you have a view on why they changed the process a couple of months ago?
I think it's so -- when you are in a situation in many countries and also when you -- for example, in India, it's a question of transparency. It's a question of having a process where no one can really blame that not everything was taken into -- in consideration. That's why they open up for 2 engines and things like that. And for us, that's very good. It's perfect that they work this way. And then they can judge according to the roughly 70 page that we have received for the RFI. So we really appreciate that.
Okay. Then I think we open up the conference call line to take the questions from those who are listening in on the call.
[Operator Instructions] Peter Testa from One Investments.
I have 3 questions. I'll go one at a time. The first one is just referring to the driving efficiency improvements throughout the organization when you talked about both on supply chain and general cost. Can you give any sense as to whether you think these are material spending and benefits for 2018 or are these more reflecting as projects scale up?
We can help each other here. But the thing is there are 2 major efforts that we are doing to increase our efficiency. One is when it comes to development and production, where we are now in the process and have, I will say, finalized it on the Aeronautic side what we call model-based design and model-based definition. It's a total new way of producing, for example, and developing a fighter aircraft. And we can see now that we're talking about compared to previous times when we have developed, for example, to see the productivity increase with more than 50%. That will not materialize directly down to the bottom lines. Don't calculate with that. But we are in the phase and we can see the way and the methods the digitalization, full digitalization of the way we're working is paying while giving effect. At the same time, we are working with a much more structured way of procurement. So that's also another thing. And then of course the internal efficiency when it comes to administration, internal processes, digitalization of those that we have a very firm and a program that we measured. And maybe you would like to --
Yes, I can comment on that. I mean...
Because you're the head of that.
Absolutely. I mean, we are working on all functions basically, I mean, finance, HR and communication, et cetera, ICT, going through all processes and more and more coming together as one company. I think that has a great impact for the company. So we are on our way there and we count on more achievements throughout. So that's important for a number of reasons. One, more value-added from the functions. Two, lower cost. But three, also just to have one way of doing things, internal control, et cetera. So, I mean, we have work to do there and I expect great contribution there.
But on that latter point, is that something more medium-term or near-term?
No, this is, I was going to say, a never-ending story. And we're going to work on this throughout. And step-by-step, we will get the effects of that.
But it's a very clear project definition with milestones and the fact that we're counting on going forward that has big impact on our profitability going forward.
Okay. And then on the outlook for the year where you're expecting, obviously, good progress through the year compared to Q1 margins. If you look at delivery phasing to support that, can you give any sort of sense as to is the delivery phasing more a H2 through the quarters or how just -- as that's obviously important for how margins work for you.
Well, normally, we don't guide on each and every quarter. We have said that we are now confirming our outlook. But normally, we can say we have a weak quarter 3 and a strong quarter 4 and a decent quarter 2. So that's -- and that pattern has not really changed this year.
No, I agree. I think that's -- especially, the strong Q4 is very typical for our business, and I expect that to be continuing, yes.
Right. And then just on the capitalization, that's the other question. I mean, obviously with GlobalEye you had a very specific customer and order in mind. And you talked about you can capitalize when you have a specific customer ready to use this. Are you referring to the existing Brazilian export order in that regard or are you referring to other orders, other countries where you see, say, a coordinated need identified as likely outcome?
Yes. Of course some of these will be addressed to the Brazilian customer. But also when you do such an investment, then you foresee to divide that investment over a business case. And due to that, we are also conservative with our R&D. It's always a discussion, to be honest, how much can you take directly over the P&L when it comes to tax situation and things like that. So this is something in the phase that we are now. For the whole concept as we have decided and being guided, we are taking it over the balance sheet.
Specifically, I mean we have -- we are not capitalizing R&D unless we are specifically meeting a number of criterias that we have set out for ourselves, which we did for GlobalEye, and now we are moving into that phase also for Gripen. So these are, yes, decisions that we have taken based on those criterias.
Criterias.
Yes.
Right. And just to help with the context, when you look at the GlobalEye that was taken, is that essentially -- therefore will be covered by the existing project orders or you're also expecting additional orders in GlobalEye when you made those steps?
We -- of course, we don't have an unrealistic business case, a conservative business case. That means, of course, that some of that and a big portion of that is in this contract, the present contract. But of course, we don't do an investment if we don't believe in a product, and we already are in discussion with several countries for these capabilities.
We have a question from the line of Mikael Laséen from Carnegie.
Just a couple of questions, first of all, again on the capitalization. Can you say something about if this will be a significant increase or just following the trend that we have seen now for a couple of quarters?
Well, significant or not compared to the total balance sheet, I will not say it will be significant. And it has nothing to do with our outlook going forward. That is something we have discussed for a long period of time when it's time to do this or not. But of course there are -- I mean, the reason why we bringing it up it's of course that you will read about it going forward in the quarters to come.
And compared to -- I mean, we can be -- it's fair to say compared to today's levels there will be increases for sure. But if we look at the total development costs, the vast majority of the cost is of course taken in the current contracts.
And just to understand this even better maybe, is this some form of the timing cost that you already have or is it more new efforts and activities that you're starting right now?
Well, it's basically things that we believe will enhance the product that we have seen during the development time that we have had for the Gripen E the last years, because you find new solutions that you think would be beneficial for the market. So the main thing is packaging for export and increase the attractiveness -- so a majority of things that we are adding. Of course there are some things, because it's not a clean cut -- easy to do a clean cut in such a big program. So if I've said nothing is connected to the whole thing, it would then a new aircraft. So of course you have a grey zone that we have defined, that's some of it. And that of course also means, to be honest, that a little bit of the PUC is excluding. So this is you can say also a negative thing for our short-term result in that grey zone. It's not so much. But anyway...
And it's of course costs and development for the future going forward. We did some already last year, but it was not so much, and then some in this quarter. And then moving forward, it's going to be the bigger portion of it, yes.
And can you say something about the Gripen situation in Eastern Europe, where you are there and the potential to get orders?
Yes. Then of course how you define Eastern Europe? If I may say Europe. As you know, if we start with Croatia, they have now decided to buy a very old F-16 from Israel. It's hard to compete with that. But anyway, that's the way forward and let's see what the negotiation will end there. Then we are still in discussion in Slovakia. Bulgaria will restart. And we have of course started a process in Austria. So these are the new ones -- or the old ones going forward, so as to say, tender activity.
And as there appear to be no further audio questions, I'll return the conference to you.
Thank you. Then we have a couple of questions from the web. Here's a question from Matt Johnson. In today's press release you talk about accelerated investment pace for Gripen E. Could you go more in detail on this and how it is connected to future potential sales? And we actually also -- I mean, we have gotten this question before and we have also gotten a question that is related to this from Sandy Morris from Jefferies. And he asks about -- he says, for example, is it that one potential customer needs something additional to Brazil and Sweden. Do we want to...
I mean, there are -- I mean, the concept of the Gripen E to Sweden was set 2013. We can see that there are capabilities that we can put into the Gripen E that is outside that contract that will help us to increase some of the performance even more, that we see it's a big need for. So that's one portion of it. And with the easier upgrade of the Gripen, you can have different version, but still have a good synergy between different systems.
Okay. Perfect. Then the next question is from [ Lars Devonder ]. He would like you to comment on the RBS 70 and India, so the VSHORAD.
Yes. I mean, we are in the what they call the L1 situation now in India. As you maybe know, they have a very well defined process when it comes to the steps and trials. And if you then have qualified technically wise, you're in this L1. That means that now it's the time to open up the envelopes. And all the competitors have also qualified. So we are waiting for the opening of the bids.
Okay. The next question is from [ Nicholas Wening ] and he is wondering if we have any updates on the Gripen Aggressor?
Well, not so much more than there are full discussions both -- especially with the partners in U.K. and U.S. There is a need in those countries for an advanced fighter as an Aggressor. And of course such a capable aircraft like the Gripen is probably -- extremely a good thing to act against or have something to act against you. But nothing that have materialized and discussion is still ongoing.
Thank you. The next and the last question is from Sandy Morris, again, Jefferies. He asked about the medium-term note program. And we have been issuing notes under that program for some time. But after the first -- the funding done in the first quarter, how much more flexibility does Saab need is his question.
I'll take it. No, we like to work on this issue very much in advance and we are preparing ourselves way ahead of schedule. If we have an amortization 12, 15 months ahead, we try to act as soon as possible, especially utilizing the interest rate level as we see today. Yes, that's a good question. We have room to do more if needed. We always review the operational cash flow generation and milestones, meeting the milestones. And so we always look at that in a prudent way and prepare ourselves. So I say we have room to do more if needed and -- but for now we feel that we are in a situation right now that we are comfortable with. So we'll review that on time.
And if I like to remember the viewers and who is participating here that we have grown the company since 2015 until last year with 46%. It's a growth story. We have increased our order backlog with nearly 4 times from that period and we can see a possibility to growth it even more. That of course have giving us a result that we have had a need of cash. And we're also confirming our long-term goals and also the view we had 1-1/2 year ago at the Capital Market Day here in Stockholm that we will go towards this SEK 40 billion in the years to come -- and also the operating margin. And of course growing like that you need cash. And as we said, when you are in the development phase, you receive less cash compared when you are starting to deliver. And we start to deliver in, say, 18 to 20 months. So that's the period we are in.
Thank you very much. We don't have any more questions from the web. Are there any more questions in the room? No. Then we say thank you for this time and we look forward to see you back here again on the 20th of July when we present the first half report for this year. Thank you. Bye.