Saab AB

Saab said order intake was slightly above SEK 68 billion in the quarter, with organic order growth of almost 30%. Management did not state quarterly revenue or EPS on the call, but did say the company delivered a record gross margin for the quarter, with gross margin up more than one percentage point year over year and EBIT margin at 11%, up 41% in the quarter. First-half cash flow was positive at SEK 1 billion, compared with SEK -1.1 billion in the first half of last year, and cash conversion was 53% after the quarter. Full-yearly/medium-term guidance discussed on the call remained unchanged: management reiterated a 2023-2027 organic sales growth target of around 22% CAGR, EBIT growth higher than sales growth, and cash conversion above 60%; they also said they remain confident in delivering positive cash flow for the year and on track for the 60% cash conversion guide.

Micael Johansson framed the quarter as a broad-based execution win, with the biggest highlights being the Poland submarine award and the Ukraine Gripen E order, plus selections for GlobalEye in Canada and NATO. He emphasized that Saab is scaling production capacity, recruiting about 3,000 net employees per year, and increasing R&D and future capabilities to support long-term growth. His tone was upbeat and confident, but he repeatedly noted that supply chain resilience remains the main bottleneck to growing faster.

Anna Wijkander said the company posted a record gross margin in the quarter and that EBIT margin reached 11%, supported by expanded gross margin, operating leverage, and higher sales from Surveillance and Dynamics. She highlighted rolling-12-month internally funded R&D of SEK 4.4 billion, more than double three years ago, and noted that first-half cash flow was SEK 1 billion, with net liquidity of SEK 2.5 billion, cash and liquid investments of about SEK 17 billion, and an unchanged BBB+ investment grade rating from S&P. She also said capacity investment was up by around SEK 1 billion versus last year and that the company remains confident in its medium-term targets, including cash conversion above 60%.

Analysts pressed on gross margin mix, component inflation, the size of the Naval writedown, GlobalEye capacity, Dynamics ramp timing, and whether unchanged medium-term guidance was conservative. Management said the Naval charge was roughly SEK 200 million, that component inflation exists but is not a major issue yet, and that margin mix will depend on the balance between higher-margin product deliveries and long-cycle platform contracts. They also said GlobalEye capacity should move from about two aircraft a year toward six by the 2030 timeframe, Dynamics capacity is being expanded across multiple sites, and the unchanged guidance reflects a still-executing six-quarter runway rather than any loss of confidence.