SAAB: Gripen support extended, strengthening Saab’s relationship with its largest customer
By Renato Rios
Summary
- We assess that Saab's new order from the Swedish Armed Forces for Gripen maintenance, valued at around 4 BNSEK, strengthens its relationship with its largest customer but does not impact our revenue estimates.
- The agreement extends support for Gripen C/D and Gripen E fighters through 2026-27, with options for further orders until 2029, covering essential services like technical support and training.
- In our view, the order aligns with Saab's core Aeronautics business and provides a stable revenue stream, but its size is relatively small compared to Saab's projected group revenue, thus not affecting our overall growth outlook.
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Saab announced on Friday an order of around 4 BNSEK from the Swedish Armed Forces. Not an unexpected follow-on contract for Saab for Gripen maintenance. The order covers support and maintenance services for Gripen fighter jets for 2026-27. However, the order size is relatively small and does not cause revisions to our estimates.
Gripen support extended, strengthening Saab’s relationship with its largest customer
Saab and the Swedish Armed Forces have extended their agreement for support and maintenance of Gripen C/D and Gripen E fighters. The order is valued at approximately 4 BNSEK, adding to the about 42 BNSEK order backlog reported in Q2 for Aeronautics, with deliveries scheduled for 2026 and 2027. The agreement also includes options for additional orders through 2029. The scope covers technical system support, spare parts, repairs, and training, all essential to sustaining Gripen flight operations.
Not an unexpected follow-on contract for Saab for Gripen maintenance
The order is not surprising, since maintenance and lifecycle services are a core offering of the Aeronautics business. For any nation operating a Gripen fleet, the aircraft manufacturer is the natural provider of these services. The Swedish state is the company’s most important single customer, and maintenance contracts for its Gripen fleet provide a stable and predictable long term revenue stream.
No extraordinary event causing no estimate revisions
Our fundamental view on Saab remains unchanged. The annual value of about 2 BNSEK is relatively small compared with our estimated group revenue for 2026 at 88.1 BNSEK and 2027 at 101.2 BNSEK. The order is therefore consistent with our assumptions for the ongoing services business. While it strengthens the order book and improves estimate visibility, it does not alter our overall view of the company’s revenue growth prospects. Therefore, we do not make any changes to our estimates.
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Saab is active in the defense and aerospace industry and focuses on the development, manufacture and distribution of defense and security systems. The company's products include fighter aircraft, radar and surveillance systems. The operations are global with a primary presence in Europe, North America and Asia. Saab was founded in 1937 and is headquartered in Stockholm.
Read more on company pageKey Estimate Figures15.09.
| 2024 | 25e | 26e | |
|---|---|---|---|
| Revenue | 63,751.0 | 75,439.4 | 88,134.4 |
| growth-% | 23.5 % | 18.3 % | 16.8 % |
| EBIT (adj.) | 5,604.0 | 7,113.6 | 8,350.0 |
| EBIT-% (adj.) | 8.8 % | 9.4 % | 9.5 % |
| EPS (adj.) | 7.85 | 10.56 | 11.95 |
| Dividend | 2.00 | 2.64 | 2.99 |
| Dividend % | 0.9 % | 0.5 % | 0.6 % |
| P/E (adj.) | 29.7 | 46.3 | 40.9 |
| EV/EBITDA | 14.6 | 25.7 | 22.5 |
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