Annual and Sustainability Report 2022
We entered 2022 with hopes of a return to normal after a prolonged pandemic. However, these hopes were not realised as on February 24th we witnessed the beginning of the tragic war in Ukraine. The war has not only changed the geopolitical security situation significantly, but also the conditions for the European defence industry as a whole.
For many, the changed landscape also became a reminder that peace, stability and security are the foundation for freedom and human rights - and unfortunately not to be taken for granted. It is therefore with pride that I reflect on Saab and the key purpose that guides me and my 19,000 colleagues: keeping people and society safe.
The implications of the events experienced during the year are substantial on our industry.
Many European countries, including Sweden, announced increased defence spending, leading to a stronger focus on national defence over the coming years. Sweden and Finland also decided to join NATO. All of this is affecting Saab as a defence company and provider of state-of-the-art defence capabilities. As we stand ready to support our customers’ increased needs, our opportunities for future growth have improved significantly.
In 2022, Saab saw a strong interest for its product portfolio by both new and existing customers. Several of our products and solutions have been used in the defence of Ukraine, supplied by existing Saab customers. We ended the year by growing our order backlog by 21 per cent and showed growth in all business areas. This was a result of successful execution on our multi-domestic growth strategy and our focus on core areas, ensuring our position to grow further together with our international customers.
One major order received during 2022 was within our Surveillance business, with the Swedish acquisition of two GlobalEye aircraft. We also signed large contracts with the U.K. and Sweden for the delivery of the NLAW anti-tank weapon system, on top of several Carl-Gustaf® orders.
At the end of the year, Saab signed an important contract for the design and production of two Signal Intelligence ships for Poland. I am also happy that Saab received the first low rate production order for trainer jet aft fuselages from Boeing - an important step for the Aerospace business at our new U.S. facility in West Lafayette, Indiana.
Delivering on our growth promises
Our operational performance was robust across our businesses, although inflation, supply of certain materials and transportation was a challenge. However, we have been working hard to mitigate these together with our partners and customers. We set out the year with the target of reaching an organic sales growth of around 5 per cent, an operating income improvement between 8-12 per cent compared to 2021 and a positive operational cash flow for the full year. As we have closed the books for 2022 I can conclude that we have confidently reached all those targets.
Investing for further growth
In order to help our customers keep their people and societies safe, investment in new technology that meets modern threats is crucial. As we continue to strengthen our offering within core areas and investing in new innovative solutions, we have taken initiatives to increase future capacity and competences to meet the increased demand. A milestone during the year was the decision to set up a manufacturing facility for the Carl-Gustaf® M4 shoulder-launched weapon system in India. Investments to increase future capacity in our Ground Combat business in Sweden and in our U.S. operations also continued.
Increasing our competences
The single most important factor in being able to meet our customers’ demands, both today and in the future, is Saab’s employees. We continuously need to attract new talent and invest in our colleagues to maintain our edge and find the innovations of tomorrow. In 2022, Saab’s recruitment efforts increased and I am glad that we have a net increase of more than 1,000 employees globally this year.
Strengthening our sustainability agenda
During the year, we continued our extensive work on sustainability and strengthened our responsible sales policy further. Moreover, we initiated the Climate Task Forces within our science-based targets project for setting emission reduction targets, which were later approved by the Science Based Targets initiative. This is an important milestone on our journey towards net zero emissions by 2050 and now the real work begins.
We strive to be sustainable in all parts of our business and support the UN Global Compact and its ten principles. By developing and providing solutions that enable customers to achieve their own sustainability ambitions, we can contribute to sustainable development while gaining a competitive advantage.
To conclude, 2022 has been a year which has demanded a lot from Saab and our customers when it comes to adapting to a new reality. We are ready to support our customers increased needs and capture future opportunities. I would like to thank all Saab employees that go to work every day to help keep people and societies safe – the importance of what we do is more evident than ever.
Stockholm, March 2023
President and CEO