Saab AB Reports Record Sales and Order Backlog

Saab AB (($SE:SAAB.B)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call from Saab AB painted a picture of robust financial health, marked by record sales and a burgeoning order backlog. The sentiment was largely positive, underscored by significant capacity expansions and achievements in sustainability. However, there were concerns regarding certain business areas and the duration of the order backlog that tempered the overall enthusiasm.

Record Order Backlog

Saab AB reported a remarkable 19% year-over-year increase in its order backlog, now standing at SEK 189 billion. Notably, 74% of these orders are from international customers, highlighting the company’s strong global presence and demand.

Strong Sales Growth

The company achieved its highest Q1 sales to date, with an impressive growth rate of 11.3%. The Dynamics division led the charge with a 20% increase, while Aeronautics also performed well, posting a 12% rise.

EBIT Margin Improvement

Saab’s EBIT margin saw a notable improvement, climbing from 8.4% in Q1 2024 to 9.2% this quarter. This was attributed to strong project execution and favorable currency effects, reflecting efficient operational management.

Capacity Expansion and Employment

In response to increasing demand, Saab expanded its capacity across multiple locations and bolstered its workforce by hiring an additional 800 employees, demonstrating its commitment to growth and operational readiness.

Sustainability Milestones

Saab made significant strides in sustainability, reducing greenhouse gas emissions by 31% since 2020, with an ambitious target of a 42% reduction by 2030, underscoring its commitment to environmental responsibility.

Civil Business Impact on Surveillance

The civil segment of the Surveillance business faced challenges, negatively impacting sales and profitability, indicating an area that requires strategic attention.

Aeronautics Under-Absorption

Production levels for the T7 in Indiana have not yet reached desired levels, affecting profitability. This under-absorption highlights operational challenges that need to be addressed.

Challenges in Order Backlog Duration

Concerns were raised about the order backlog for Kockums, which is down 21%, posing potential risks to sustaining sales in 2026. This issue calls for strategic planning to ensure long-term stability.

Forward-Looking Guidance

Looking ahead, Saab reiterated its 2025 guidance with confidence, projecting organic sales growth between 12% and 16% and a higher EBIT growth rate. The company maintains a strong balance sheet, with SEK 12.7 billion in liquid investments and a solid equity-to-asset ratio of 37.8%. These projections reflect Saab’s strategic focus on sustaining growth and financial stability.

In summary, Saab AB’s earnings call conveyed a strong performance with record-breaking sales and a growing order backlog. While the sentiment was positive, driven by capacity expansions and sustainability achievements, challenges in certain business areas and order backlog duration were noted. The forward-looking guidance remains optimistic, with expectations of continued growth and robust financial health.