Swedish aerospace and defence group Saab, which includes South African subsidiary Saab Grintek Defence, expects that its sales will increase this year, following a slight decline last year, compared with 2013. This was stated by the group when it released its ‘Year-End Report’ for 2014. (Saab is also the manufacturer of the South African Air Force’s Gripen fighters.)

Sales totalled 23 527 000 000 Swedish Kronor (SEK) last year, a 1% fall over the SEK23 750 000 000 of 2013, or, in dollar terms, about $2.82-billion in 2014 compared with almost $2.85-billion in 2013. Gross income was down 4% (just under SEK6.1-billion, compared with almost SEK6.33-billion). Order bookings in 2014 were 55% lower than in 2013 (SEK22.6-billion. compared with almost SEK49.81-billion).

On the other hand, operating income (earnings before interest and tax) was up 23%, totalling almost SEK1.66-billion last year (the figure for 2013 was almost SEK1.35-billion). Earnings before interest, taxes, depreciation and amortisation rose by 7%, from just under SEK2.37-billion to just over SEK2.52-billion. Net income jumped 57%, from SEK742-million in 2013 to almost SEK1.17-billion in 2014.

“[The year} 2014 brought both challenges and significant success for Saab,” noted group President and CEO Hakan Bushke in a statement released to the media. “It was a year when the company continued to build for the future. Thanks to a long-term strategy and focus on efficiency, the company is well positioned. Defence budgets, which have declined in the US and Western Europe during the past couple of years, are expected to increase in the coming years. Meanwhile, the turnaround is expected to be slow and does not have any short-term impact on Saab.”

There were two particularly important highlights for the group during last year. In July, it acquired ThyssenKrupp Marine Systems’ Swedish submarine-building business (now redesig-nated Saab Kockums). And an agreement was signed with Brazil for the supply of 36 Gripen new-generation (NG) fighters to that country’s air force. This followed Sweden’s own order for 60 Gripen NGs in 2013. (The Brazilian programme includes the development, in cooperation with Brazilian industry, of a two-seat version of the Gripen NG.)

However, the group’s Dynamics division saw a lower level of activ-ity last year. This sector has been experiencing difficult market conditions in the past few years. However, the Security and Defence Solutions division experienced growth, which compensated for the downturn at Dynamics. Part of the growth in Security and Defence Solutions was the result of the acquisition of Saab Kockums. Efficiency measures unveiled in 2013 were successfully concluded last year, reaching the target of some SEK500-million in savings.

“Saab continues to invest in research and development to ensure long-term growth,” stated the group in a press release. “In 2014, total investments in research and development amounted to approximately 25% of sales. A number of new products with significant potential were launched during the year: a new generation of the weapons system Carl-Gustaf and five new surface radars for land and sea. Additional investments were made in the development of trainers for the coming T-X pro-curement process in the US.” (The Carl-Gustaf is a man-portable, shoulder-fired anti-armour/anti-personnel rocket system – it is the nearest Western equivalent to the Russian RPG series; the T-X is a programme for a new advanced jet trainer for the US Air Force – Saab is partnered with Boeing in bidding for this project.)

For 2015, the group predicts increasing sales. It also expects its operating margin, excluding material nonrecurring items, to be in line with the margin last year, owing to increasing research and development costs in the Aeronautics division.