How we are optimizing our product portfolio for increased efficiency
Our long-term aspiration is to increase sales combined with a strengthened margin by serving our defence and security customers better than our competitors. As part of this strategy, Saab is driving a portfolio efficiency initiative that will continue over the coming years.
A foundation of our strategy is to support our customers’ existing and future defense capabilities by delivering world-class and profitable products in our core areas; Aeronautics, Underwater Systems, Command and Control, Sensors and Advanced Weapon Systems. These represent areas where we have a world leading position and where significant growth is expected.
As part of this strategy we have been driving a portfolio efficiency initiative geared at focusing our overall R&D efforts into future capabilities within our core areas.
Over the year we have phased out more than 30 products, divested one product area QPS (Quality Positioning Services) releasing more than 100 MSEK that have been re-invested into our core platform R&D programs. The majority of products that have been phased-out are products were we have new and more modern alternatives, e.g. earlier versions as well as old ammunition types of our Carl Gustaf weapon system. Furthermore we have stopped development of projects, which are non-core and where significant investments were needed to create first contracts, e.g. some civil avionics products. Our efforts to further focus R&D and innovation into differentiating parts of our core portfolio started beginning of 2019, and has so far resulted in three divestments: QPS, NVH (Noise Vibration Harshness) and Vricon totaling 1.2 BSEK in divested value.
Reduction of our overall product portfolio with approx. 20%. The program will continue over the coming years, with the ambition to generate significant improvement of R&D productivity.