Some Snippets from Saab
In a Q4 earnings conference call with financial analysts, senior Saab officials, including Micael Johansson, President, and Chief Executive Officer, Anna Wijkander, Chief Financial Officer and Merton Kaplan, Head of Investor Relations outlined what had been a very strong quarter and a very strong year, in terms of orders, revenue, growth, and operational cash flow. Promisingly, international orders now represent quite a big proportion of orders, and the company has a strong-looking market going forward.
During the call, Micael Johansson referred briefly to a number of the company’s aerospace programmes, in both the Aeronautics and Surveillance business areas. He said that there was a “strong interest” in Gripen and that: “I think we must mention that we’re negotiating a contract with Thailand as we speak. We have an interest from Colombia, from Peru, and for additional Gripens for Brazil. So, there is lots of intensity around the Gripen programme. We had a fantastic first international exercise with the Gripen E in Brazil in November and it performed fantastically strongly, and we saw lots of reports about the capability of the aircraft. Availability was also fantastic, (about 95% during an exercise like that), even though Brazil had only received eight aircraft, that was amazing to see.”
“We have seen strong sales growth when it comes to the Gripen during the quarter and both in the Swedish programme and the Brazilian programme. What is actually affecting the margin in aeronautics is the T-7 training aircraft programme in the US, which is stretched when it comes to how quickly do we get into the production rate that we need. That will take another couple of years before we see that turning around.”
“We are a bit dependent on when the US Air Force will contract Boeing to really start ramping up production. There will be production ongoing, but at a rather low level until the testing is done with Air Force and Boeing gets the contracts. But we will continue to manufacture and we have a fantastically modern facility in West Lafayette doing this. But this is pushing the margin in aeronautics down, but the underlying margin is really good on the Gripen side.”
Micael Johansson said that the USAF was planning for a T-7A Milestone C decision in Q2 2026, after which production would start to ramp up. “But I think really profitable will take a few years,” Johansson observed, wryly, while stressing that Gripen profits were “absolutely okay on the levels that we can expect from big contracts.”
“We are confident that it will now turn into a better situation going forward step by step. But it will take a while before we’re really showing nice black numbers!”
He averred that: “And we’re going in the right directions on the aerostructure side as well, the commercial airline business which has been also dragging us down. It’s still not fantastic margins. But we’re going in the right direction. And we’ve got rid of all the currency effects that we had been sort of working with for the last few years.”
In the Surveillance Business Area, Johansson said that: “We have a number of campaigns going on GlobalEye as well, both in the European perspective in the Nordics, in the southern part of Europe, but also in Asia, and in the Middle East. So, there is a big interest in this capability. And of course, we’re trying to make NATO interested in using this capability as well, since the E-3 platform from Boeing is more and more going into a difficult phase in trying to have availability on it. And so, GlobalEye is a really attractive thing going forward.”
Johansson offered a brief glimpse into the company’s work on the KFS (Koncept för Framtida Stridsflyg or Konceptet Framtidens Stridsflyg – Future Combat Aviation concept) programme launched in July 2023.
Our coverage of the KFS programme is at:
While focusing on Gripen E, Saab is also looking at “What comes after next”
While focusing on Gripen E, Saab is also looking at “What comes after next”
“We are putting a lot of effort also in the future concepts, which is more and more people are joining that group now, so it’s not just a few, it’s now we’re looking at more than 100 people working on the future fighter concept. That is not only manned, that is also an unmanned capability, which I think will be the next step to complement the Gripens going forward.”
Johansson said that the company would fly progressively more developed and sophisticated versions of its planned unmanned capability, in 2025, 2026 and 2027, with iterative improvements. The end result would be a collaborative combat aircraft or collaborative surveillance aircraft that would work together with Sweden’s manned combat air capability.
“And then, of course, over time, in the 2050s, we need to have sort of a new solution for a possible manned fighter. So, that is what this concept work and demos are for. We will fly a number of system over the next few years, which will be unmanned to start with, and I will come back to that.”
