Saab chief says Ukraine war will drive new orders for defence group

The war in Ukraine will help to drive new orders for Saab this year, the chief executive of the Swedish defence group has said, as western nations ramp up their supplies of weapons to the country.

Micael Johansson said about 10 per cent of the company’s order intake last year was “strictly connected” to Ukraine, with the majority coming through in the fourth quarter.

“There is more to come from Ukraine. Many countries need to replenish their stocks and maybe go beyond that,” he said.

Concerns over depleted national stockpiles are high as western nations have sent weapons and other support systems to Ukraine, creating opportunities for defence contractors to secure more orders.

Saab, which counts the Wallenberg family as its main shareholder, produces the Gripen fighter jet as well as multiple weapons systems, including sensors and ammunition.

It also makes the NLAW anti-tank missiles that Britain has been sending to Ukraine in their thousands. In December, Saab secured a SKr2.9bn ($278mn) order from the UK.

The company on Friday reported a rise in fourth-quarter operating profit as order bookings more than doubled to SKr29.9bn from the same period in 2021.

Saab said it expected organic sales growth of 15 per cent in 2023. The strong results sent its shares up 9 per cent to SKr471 by Friday lunchtime.

Ukraine has been pushing for western nations to send modern fighter jets, including Sweden’s Gripen, with President Volodymyr Zelenskyy reiterating his request during visits to the UK and Belgium this week. So far, most countries have resisted, given Moscow’s threats that it would view such a move as escalatory.

Analysts at the Royal United Services Institute, a UK think-tank, suggested last year that the Gripen would be a better choice than some other fighter jets, noting that since they are lighter and cheaper, they might be easier to maintain and operate from multiple Ukrainian airfields.

Any decision would rest with the Swedish government, which has said the matter is not on the agenda at present.

Johansson stressed it would be a “political question” for the government to decide but said Saab would be ready to support it. He agreed that the Gripen was “an easy system to train on and to fly and operate”. 

Despite the strong operating environment, Johansson cautioned that supply chain challenges remained. The company has invested heavily to increase its output, including building more inventory to ensure it has the required components and parts.

“We are on our toes working every avenue to work through suppliers, but also going through a whole chain of sub-suppliers, so we have control over the whole thing,” he said, adding: “It is still a fight.”