As defence spending in Europe continues to grow, building additional capacity and investing in capabilities based on new technologies will be crucial to meet the growing needs of customers. In 2023, we put relentless effort into customer deliveries and increasing capacity. With the growing interest in Saab's unique and diverse portfolio, we have increased our investments in R&D and intensified our ambitions in innovation, to ensure that Saab’s product portfolio remains strong and that we can grow sustainably in the long term. Much of this is done in collaboration with customers who seek to replenish stocks and develop new technologies to strengthen defence capabilities both now and for the future.

The emergence of disruptive technologies such as AI and autonomy is set to be a game-changer for our industry and reshape defence and security applications in the future. During the year, we accelerated our activities in these areas and completed the acquisitions of the AI-enabled defence tech company BlueBear in the U.K. and the Silicon Valley-based AI company CrowdAI in the U.S. These acquisitions will enable Saab to leverage emerging technologies across our product portfolio and drive capabilities for future growth.

Moreover, we announced three strategic partnerships; we entered into a cooperation agreement with Helsing, a European defence company specialising in AI-based software technology and made an investment for a 5% stake in the company. We also signed an agreement with Babcock to explore future opportunities within advanced surface ships. In addition, we signed an MoU agreement with Singapore Technologies Engineering to further deepen our collaboration and opportunities in several defence domains.

We believe increased collaboration and partnerships will further strengthen our competitiveness in the market and support our customers' evolving needs. Saab's position as a trusted partner was further confirmed during 2023 by the significant order intake we recorded. Order bookings grew 23% and amounted to SEK 78 billion (63). Our backlog reached SEK 153 billion. Throughout the year, we have continued to execute on our focused multi-domestic strategy, with growth in all of our selected strategic markets; Sweden, the U.S., the U.K., Germany and Australia.

An important milestone in 2023 was the signing of framework agreements with NATO’s Support and Procurement Agency for the Carl-Gustaf and AT4 weapon systems, in line with our focus on supporting our customers in building up their defence capabilities. We also received an order for two Airborne Early Warning (AEW) aircraft to Poland and rolled out the first aircraft two months after contract signing. Moreover, we delivered Sweden’s new SIGINT ship as well as the first serially-produced Gripen E to the Swedish Defence Materiel Administration.

Organic sales growth for the full year was 23% and reflected the higher production volumes we have in all our businesses. Profitability also improved with an operating margin of 8.3% (7.8). Cash flow for the full year reached SEK 3.2 billion. As we close the books for 2023, it is with satisfaction that I conclude that we have again reached all our financial targets.

Looking ahead, delivering on our customer contracts and our strong backlog will be key. Based on current visibility for planned project execution and deliveries, we expect the organic sales growth for the full year 2024 to be between 12-16%. We are also committed to continue growing the operating income above organic sales growth in 2024. The last four years we have reported positive cash flow and we foresee a continued positive cash flow for the full year.

As a growing Swedish defence company, we have the ambition to be a sustainability leader in our industry and we strive to be sustainable in all parts of our business, in support of the UN Global Compact and its ten principles. We have, in addition to accelerated climate transition initiatives within the Group, also launched a new Code of Conduct and updated our sustainability strategy framework. During the year, we have also undertaken a thorough project across the organisation to be compliant with the new upcoming European Sustainability Reporting Standards. I believe that this project and the updated sustainability strategy, together with our strong foundation of responsible business practices, will guide us along the ambitious growth path that is ahead of us.

2023 was also an innovative year for Saab with several new products launched, including the Giraffe 1X Deployment Set and new features for our Barracuda camouflage solutions as well as showcasing our land-based capabilities for next-generation air defence. On the naval side, we introduced our future operator workspace console concept, leveraging on Saab's expertise within combat system hardware and software for warships. All of this is the result of our most important resource at Saab, our people.

Beyond actively engaging our employees to ensure that they are set to address the growing demand, it is key that we continue to invest, secure relevant competences and adapt to new technology. In 2023, we have been successful in attracting close to 2,500 net new employees globally, an increase of 13%. At the same time, Saab has climbed in the rankings as a top-ten most attractive IT and Engineering employer in Sweden. As we look ahead, we are investing in upskilling through our learning platform and putting efforts into both onboarding and our people experience. All our efforts within sustainability, innovation and people will be key to our long-term success and value creation.

Stockholm, February 2024

Micael Johansson
President and CEO