Saab, Kongsberg again post record years on European defense splurge

PARIS — Saab and Kongsberg kicked off the European protection trade earnings season Friday, posting one other yr of report gross sales progress and orders in 2024, as governments throughout the continent proceed to ramp up army spending within the face of Russian aggression.

Sweden’s Saab, the maker of the Gripen fighter jet and the Carl-Gustaf recoilless rifle, reported orders jumped 24% to 96.8 billion Swedish kronor (US$8.9 billion) final yr, elevating the backlog to a report 187 billion kronor. Orders included Gripens for Hungary, radar programs, air protection, GlobalEye surveillance planes and a report order from Poland for the Carl-Gustaf.

Protection and aerospace orders at Norway’s Kongsberg jumped 44% to 54.4 billion Norwegian kroner ($4.85 billion) in 2024, boosted by the corporate’s largest-ever missile order from the U.S. Navy, and a Dutch buy of air-defense batteries. The order guide in protection and aerospace jumped to 101 billion kroner on the finish of December, up 54% from a yr earlier.

Finland’s Patria reported orders jumped 33% to €1.26 billion in 2024, lifted by demand for the corporate’s 6-wheeled armored autos, for a backlog of €2.38 billion by the tip of December. Kongsberg owns 49.9% of the corporate, with the Finnish authorities proudly owning the rest.

World army spending has been surging in a context of deteriorating peace and safety, with spending in 2023 rising for a ninth yr to $2.44 trillion, in response to the newest annual knowledge from the Stockholm Worldwide Peace Analysis Institute. Europe is likely one of the areas with the most important improve in protection outlays, following Russia’s invasion of Ukraine in 2022.

“There are tensions and stuff like that, which makes it an unusually troublesome time to foretell what’s going to occur going ahead, however we see a robust continued want for protection capabilities undoubtedly, and a robust market going ahead,” Saab CEO Micael Johansson mentioned in a name Friday.

The Saab CEO sees protection spending in Europe rising no matter choices concerning the NATO alliance and joint European applications. The NATO summit in The Hague in June will probably be “very attention-grabbing to see the place the ambition stage will probably be put on the subject of targets,” Johansson mentioned.

NATO alliance members together with the U.S., U.Okay. and Poland say the alliance goal to spend at the very least 2% of GDP on protection will not be sufficient, and the summit is anticipated to set the next threshold. Protection spending by European Union international locations was anticipated to achieve a report €326 billion in 2024, from €279 billion a yr earlier, the European Defence Company reported in December.

Worldwide enterprise now accounts for 72% of the backlog at Saab, from 64% a yr earlier, in response to CFO Anna Wijkander. At Kongsberg, the protection and aerospace order guide was padded by offers with the U.S. Navy and the Netherlands, and air-defense programs for Lithuania.

“Given the present scenario, it’s doubtless that NATO international locations and Norway’s allies will proceed to put money into and strengthen their protection capabilities,” Kongsberg mentioned. “There’s a excessive demand for Kongsberg Defence & Aerospace’s core merchandise reminiscent of air protection, missiles, and weapon stations.”

Kongsberg mentioned it can begin development of missile factories within the U.S. and Australia in 2025, and place itself for Norway’s upcoming renewal of its frigate fleet.

Relating to future enterprise at Saab, the corporate is negotiating a Gripen contract with Thailand, and has curiosity for the fighter from Colombia and Peru, in response to Johansson, who additionally talked about further Gripens for Brazil.

The corporate is campaigning to promote its GlobalEye surveillance plane within the Nordic area, southern Europe, Asia and the Center East, and can be making an attempt to get NATO within the GlobalEye, because the Boeing E-3 is “increasingly going right into a troublesome section” concerning availability, in response to the CEO. The fleet of E-3 plane operated by the U.S. Air Pressure failed to fulfill availability targets in any of the 11 years by means of to 2020, in response to a report by the U.S. Authorities Accountability Workplace in November 2022.

Saab has a group of greater than 100 individuals engaged on the longer term fighter idea, together with unmanned functionality, which Johansson mentioned he expects to be the subsequent step to enhance the Gripen going ahead. France in October kicked of improvement of an unmanned wingman drone for the competing Rafale fighter.

“In fact over time, within the 2050s, we have to have a brand new answer for a doable manned fighter,” the Saab CEO mentioned. “We’ll fly quite a few programs over the subsequent few years, which will probably be unmanned to begin with.”

Johansson mentioned margins in Saab’s aeronautics enterprise are being affected by delays to beginning up the T-7 Crimson Hawk jet coach program within the U.S., which he mentioned will take “one other couple of years earlier than we form of see that turning round.”

“We’re a bit depending on when the U.S. Air Pressure will contract Boeing to essentially begin ramping up manufacturing,” the CEO mentioned. “There will probably be manufacturing ongoing, however on a somewhat low stage, till the testing is completed with Air Pressure, and Boeing will get the contracts.”