Saab AB: Sweden's Defense Champion from Wartime Aircraft to Global Security Giant

I. Introduction & Episode Roadmap

The boardroom at Linköping is quiet, but the atmosphere crackles with history. Outside these windows, the Baltic Sea shimmers—a deceptively calm surface that has, for nearly a century, represented the invisible front line of Swedish sovereignty. Saab AB (originally Svenska Aeroplan Aktiebolaget, lit. 'The Swedish Aeroplane Corporation'), is a Swedish aerospace and defence company primarily operating from Sweden, headquartered in Stockholm, with its development and manufacturing operations undertaken in Linköping.

The central question driving this analysis: How did a small neutral country's aircraft manufacturer, born from wartime anxiety in 1937, become a world leader in fighter jets, submarines, and anti-tank weapons—and why has it emerged as one of Europe's hottest defense stocks in the 2020s?

The answer reveals something profound about the relationship between national identity, industrial policy, and long-term value creation. Sweden has a lengthy history of initiatives in the defence and security industry. This small country has produced a large number of well-known, high-tech companies—such as Bofors, Kockums and Saab—that have now become one with Saab.

Consider the numbers: In 2024, Saab AB's revenue was 63.75 billion SEK, an increase of 23.53% compared to the previous year's 51.61 billion. Earnings were 4.17 billion, an increase of 23.37%. The total return for SAABY stock in 2024 was 40.34%. The total return in 2023 was 47.09%. The total return in 2022 was 67.25%. These aren't merely good numbers—they represent a fundamental repricing of European defense capability in a world where the post-Cold War "peace dividend" has proven illusory.

This is a story built around four essential themes that thread through nearly nine decades of corporate history: Swedish neutrality and self-sufficiency as strategic imperatives; the Wallenberg dynasty's patient capital approach to defense investment; surviving the brutal post-Cold War defense winter when many Western defense companies collapsed or merged into oblivion; and finally, the tragic catalyst of the Ukraine war that has rewritten the rules of European security.

---

↑ Back to Top

II. Origins: Why Sweden Built Its Own Fighter Jets (1930s-1940s)

↑ Back to Top

The Neutral Nation's Dilemma

Picture Europe in 1936. The Spanish Civil War has become a testing ground for fascism's new military doctrines. Hitler's Wehrmacht has remilitarized the Rhineland. Mussolini's forces have conquered Ethiopia. And in Stockholm, Swedish Prime Minister Per-Albin Hansson stands before Parliament to deliver a speech that will echo through decades of Swedish industrial policy.

"Our country should manufacture its own weapons as much as possible. We have good shipyards and armouries but we have no production in the country for warplanes." These words—spoken by the Swedish Prime Minister in 1936—became a cornerstone of a new defence company, Svenska Aeroplan AktieBolag (Swedish Aeroplane Ltd.), that was founded next year.

Hansson understood something that would define Swedish security policy for generations: neutrality is only as credible as your ability to defend it independently. A neutral nation cannot depend on foreign suppliers who might be conquered, embargoed, or simply prioritize their own needs. The storm clouds were gathering in the political sky during the 1930s. It seemed difficult to avoid a new thunderstorm between the world's major powers. As a neutral state Sweden had not been involved in wars or conflicts for more than a hundred years. To safeguard its neutrality and national sovereignty Sweden required strong defences. The Riksdag therefore decided in 1936 to make a significant investment in defence. A large proportion of the funding would go to that young branch of the armed forces, the Swedish Air Force.

In the beginning of 1930s, the Swedish Air Force inventory represented a complicated mix of aircraft, of different origin and quality. The fleet of biplane fighters included Bristol Bulldog, Gloster Gladiator, Fokker C. Vd aircraft, together with already obsolete Phönix D.III and Nieuport-Delage NiD 29. They were supported by a few domestic-made aeroplanes.

The urgency became acute as war loomed. Sweden attempted to purchase modern aircraft from abroad, but found the international arms market treacherous for a neutral nation. They finally led to acquiring three new types of fighter aircraft—Fiat CR.42bis Falco, Reggiane Re.2000 and Seversky P-35, approximately 60 aeroplanes of each type—but they were below what was originally expected. As a result, a decision of supporting the domestic industry in creating and manufacturing Swedish-designed combat aircraft was made.

↑ Back to Top

Founding and Early WWII Development

The year was 1937. The world was on the brink of another world war. Sweden wanted to equip the armed forces and build up its own, strong air force. A major new industry was born out of this threat. From a modest start Saab has developed into a global company in security and defence.

The corporate archaeology of Saab's founding reveals a remarkable convergence of Sweden's industrial elite. Among the founders were: Marcus Wallenberg, Axel Wenner-Gren, Sven Wingquist. These were not random industrialists—they represented the commanding heights of Swedish capitalism. Wallenberg controlled much of Swedish banking and industry through Investor AB. Wenner-Gren had built Electrolux into a global appliances empire. Wingquist had invented the self-aligning ball bearing and founded SKF. Together, they brought capital, engineering expertise, and political connections.

The company was formally founded by AB Bofors in 1937, by reforming the aero engine division of company NOHAB (founded in 1930), located in Trollhättan, into a proper aircraft manufacturer. It would soon merge with aircraft manufacturer ASJA (founded in 1931), located in Linköping, in 1940.

The renowned mill in Bofors had been developed into a modern industrial company during the early decades of the 20th century, for the production of guns among other things. In Trollhättan, Bofors had also acquired a subsidiary company, Nohab, which manufactured aircraft engines. Bofors therefore argued that the technical expertise was already available there and it decided to found a separate new aircraft manufacturing company. The actual birth of the company took place on 2 April 1937.

The merger with ASJA proved crucial for Saab's future engineering capability. At the time, there already was a competing company formed with this premise in 1931, by the name of ASJA (AB Svenska Järnvägsverkstädernas Aeroplanavdelning, lit. 'The Swedish Railway workshops Aeroplane department'), located in Linköping, which was a successor to Svenska Aero under Sven Blomberg, head designer of the Svenska Aero Jaktfalken fighter plane. ASJA had solicited Blomberg from Svenska Aero in 1930 and later purchased the company in 1932 along with their portfolio of designs, quickly making them the leading aeroplane manufacturer in Sweden at the time.

The management of the 'new' Saab decided that the company's management and development should relocate to the ASJA site in Linköping in line with Wallenberg's proposal. At the same time production would continue as before in Trollhättan. The Over-Governor of Stockholm, Torsten Nothin, a former chairman of AFF, became Saab's chairman of the board of directors and Wallenberg was also on the board.

With war looming, Saab rapidly developed its first combat aircraft. SAAB 17 became the first aeroplane that was manufactured under the SAAB branch. In fact, this aircraft was already designed by ASJA, in response to the Swedish Air Force request from 1938. Its maiden flight took place in May 1940 and in two years the SAAB 17 was introduced into operational service in two basic variants—B 17 (bomber) and S 17 (reconnaissance). Then, there was a SAAB 18, a twin-engine bomber and reconnaissance aircraft that completed its first flight in 1942 and became operational in 1944. On 30th July 1943, one of the most interesting SAAB-made aircraft performed its maiden flight—the SAAB 21, a single-seat fighter and attack aircraft of really unusual appearance, due to being a twin boom pusher.

The foundation was laid: Sweden would design, develop, and manufacture its own military aircraft, controlled by Swedish capital, serving Swedish strategic interests. This principle would prove remarkably durable, surviving world wars, cold wars, and the globalization pressures that forced many other national defense industries into consolidation.

---

↑ Back to Top

III. The Cold War Era: Building Sweden's Air Force (1945-1990)

↑ Back to Top

Post-War Diversification

As World War II ended, Saab faced the classic defense contractor's dilemma: military orders were collapsing, but the company had developed substantial engineering and manufacturing capability. The solution was diversification—a strategy that would shape Saab's corporate structure for decades.

Originally manufacturing aircraft, the company sought ways in which to diversify its business. Before the Second World War, a majority of cars in Sweden were imported from the United States. The US car manufacturers were producing tanks during the war, and the US domestic market took all the US car production in the late 1940s. Hence there was a large supply shortage of private cars in Europe and Sweden. In the late 1940s, Saab began manufacturing cars at its Saab Automobile division, based in Trollhättan. The first car was the Saab 92; full-scale production started 12 December 1949, based on the prototype Ursaab.

The automotive venture was intellectually fascinating—aircraft engineers applying aerodynamic principles to car design—but it would ultimately prove a strategic distraction that consumed capital and management attention for decades.

In the late 1950s Saab ventured into the computer market with Datasaab. The company was a result partly of the need to make a computer that would be small enough to mount in an aeroplane as navigational equipment. This computing expertise would later prove invaluable for developing advanced avionics systems.

But the core business remained aircraft, and the Cold War provided the strategic rationale for continued investment. Saab was founded on 2nd April 1937 to develop and manufacture combat aircraft. The Swedish Air Force was then built up during the Cold War with Saab fighter jets, and became one of the world's largest air forces. Planes such as the Draken, Viggen and Gripen represent some of Sweden's largest industrial initiatives through history and have led to pioneering technological developments in several fields.

↑ Back to Top

The Iconic Fighter Jet Legacy

Saab's Cold War fighter program represents one of the most remarkable achievements in aerospace history—a nation of fewer than 10 million people producing a succession of world-class combat aircraft that could compete with designs from superpowers with vastly greater resources.

Saab's first postwar fighter was the jet-powered Tunnan, meaning "barrel." It took this name from its round and stubby fuselage and flew with a British De Havilland Ghost Engine. The Tunnan was so good that it outflew America's F-86 fighter, which had won control of the skies during the Korean War by shooting down Soviet-built fighters. Some 660 Tunnans were delivered to the Swedish Air Force between 1951 and 1956. Next came the Lansen, or Lance.

The Lansen used another British engine, the Rolls-Royce Avon, again built under license. It was the first fighter built in Europe, and one of the first in the world, to carry air-to-surface guided missiles. It first flew in 1952, with some 450 being built between 1955 and 1960. It was so capable that some of them remained in service until 1977.

Then came the Draken—the Dragon—which established Saab as a genuine innovator in aerospace design. The Saab 35 Draken is a Swedish fighter-interceptor developed and manufactured by Svenska Aeroplan Aktiebolaget (SAAB) between 1955 and 1974. Development of the Saab 35 Draken started in 1948 as the Swedish Air Force future replacement for the then also in development Saab 29 Tunnan day fighter and Saab 32B Lansen all-weather fighter. It featured an innovative but unproven double delta wing, leading to the creation of a sub-scale test aircraft.

The full-scale production version entered service with frontline squadrons of the Swedish Air Force on 8 March 1960. It was produced in several variants and types, most commonly as a fighter-interceptor. The Draken functioned as an effective supersonic fighter aircraft of the Cold War period, although it was never used in conflict.

Saab's J 35F Draken was powered by a Svenska Flygmotor RM6C turbojet engine, producing 12,700 pounds of thrust dry and 17,600 pounds with afterburner engaged. The J 35F could reach a maximum speed of Mach 2.3. During its service, the Draken proved to be an effective fighter for the Swedish Air Force during the most turbulent years of the Cold War. The Saab 35 was also popular on the export market, serving with the Swiss, Royal Danish, Finnish, Venezuelan, and Austrian Air Forces.

The Viggen pushed Swedish aerospace engineering even further into the cutting edge. The Saab 37 Viggen is a single-seat, single-engine multirole combat aircraft. It was the first canard-equipped aircraft to be produced in quantity and the first to carry an airborne digital central computer with integrated circuits for its avionics, arguably making it the most modern/advanced combat aircraft in Europe at the time of introduction.

The aircraft's aerodynamic design was finalised in 1963. The prototype performed its maiden flight on 8 February 1967 and the following year the Swedish government ordered an initial batch of 175 Viggens. The first of these entered service with the Swedish Air Force on 21 June 1971.

In the early 1960s, it was decided that the Viggen should be a single seat aircraft, Saab having recognized that advanced avionics such as a digital central computer and a head-up display could perform the workload of a human navigator and entirely replace the need for a second crew member. The computer, called CK 37 (short for Centralkalkylator 37), was the world's first airborne computer to use integrated circuits. Developed by Datasaab, the CK 37 was the integrating unit for all electronic equipment.

Swedish military doctrine shaped these designs in distinctive ways. As a neutral country, Sweden shaped its defense network independent of other nations' philosophies. Through the Cold War, Sweden became well known for requiring their combat aircraft to be able to use straight stretches of highway as improvised runways and for the aircraft to be fully supportable away from a fully equipped permanent base. This aspect dictated that the aircraft also have a relatively short take off and landing length.

The Viggen had an unusual shape that mounted small triangular wings forward of the main wings (called canards). These gave extra lift, enabling Viggens to land and take off from roadways with lengths of only 1,700 feet (518 meters). The Viggen reflected a move toward larger fighter aircraft that could carry heavier loads of weapons.

↑ Back to Top

The Saab-Scania Merger

Corporate diversification accelerated in the 1960s. In the late 1950s Saab ventured into the computer market with Datasaab. The company was becoming increasingly sprawling, with operations spanning aircraft, automobiles, and computing.

Investor was dominated by Marcus Wallenberg, who remained chairman until he passed away in 1982. Toward the end of the 1960s, Saab and Scania-Vabis were merged in 1969.

From 1968 onwards the company was in a merger with commercial vehicle manufacturer Scania-Vabis, known as Saab-Scania. The logic was industrial synergy—combining aerospace and automotive engineering under one roof. But in practice, the merger created organizational complexity and diluted strategic focus.

For investors analyzing Saab today, the Scania merger period illustrates a recurring tension in defense companies: the temptation to diversify away from the inherent cyclicality of military spending often creates more problems than it solves. The core defense business requires specialized engineering culture, long-term planning horizons, and intimate customer relationships that don't necessarily transfer to commercial markets.

---

↑ Back to Top

IV. Restructuring & Identity Crisis (1990-2005)

↑ Back to Top

The GM Era & Automotive Spin-Off

The end of the Cold War created an existential crisis for defense companies worldwide. Peace dividends slashed military budgets. Consolidation swept through the industry as companies merged or exited. Saab-Scania's conglomerate structure, which had seemed like prudent diversification, now looked like an obstacle to strategic clarity.

From 1947, Saab started producing automobiles, the automobile division being spun off as Saab Automobile in 1990, a joint venture with General Motors. The joint venture ended in 2000 when GM took complete ownership.

The two were de-merged in 1995 by the new owners, Investor AB. In 1995 Saab-Scania was divided by Investor AB into two independent companies, de-merging into Scania AB and Saab AB. The intention by Investor AB was to broaden ownership in the two companies later. Following the sale of 50% of the car division Saab Automobile AB to General Motors, the main reason behind the merger with lorry manufacturer Scania-Vabis in 1968 had disappeared.

The Wallenberg family's intervention through Investor AB proved decisive. Investor began a program of reducing its shareholding position in many of its long-term investments. After splitting Saab and Scania into two separate companies in 1995, Investor sold a 55 percent stake in Scania in a public listing on the Stockholm and New York Stock Exchanges.

This period revealed the Wallenberg approach to patient capital. Rather than maximizing short-term returns by selling Saab to a foreign acquirer—which would have been the path of least resistance during the defense industry consolidation wave—Investor AB restructured the company to preserve Swedish control and long-term strategic capability.

↑ Back to Top

Transformation into Pure Defense

With automobiles and trucks spun off, Saab could finally focus entirely on its defense mission. The company moved aggressively to strengthen its position through acquisition.

The merger between Astra and Zeneca was completed and Saab AB made a bid for Celsius. The Celsius acquisition in 1999-2000 proved transformational, bringing Bofors—the legendary Swedish weapons manufacturer—back into Saab's fold.

A large portion of the Swedish defence and security industry's history is associated with today's Saab. With the acquisitions of companies such as Bofors and Kockums, Saab has gained a heritage that can be traced back to the 1600s. Since the reign of King Karl XI during the country's years as a major military power in Europe, Sweden's most specialised vessels have been launched at the naval yard in Karlskrona.

The acquisition consolidated Sweden's defense industrial base under one corporate umbrella—aircraft, missiles, ground combat systems, and naval vessels. This vertical integration would later prove crucial for developing integrated solutions that command premium prices in international markets.

↑ Back to Top

The BAE Systems Partnership

The post-Cold War period also brought international partnership to Saab's fighter jet business. Also in 1995 Saab Military Aircraft and British Aerospace (now BAE Systems) formed the joint venture company Saab-BAe Gripen AB, to manufacture, market and support Gripen internationally. This co-operation was extended in 2001 with the formation of Gripen International for the same purpose. From 1998 until 2005, British Aerospace/BAE was the largest shareholder in Saab following its acquisition of a 35% stake from Investor AB. In January 2005, BAE Systems reduced its shareholding to 20%. Investor AB maintained a 20% share.

The BAE partnership provided critical international marketing capability and financial support during Gripen's development. But it also created potential conflicts of interest, as BAE also marketed the Eurofighter Typhoon in some of the same export markets.

In March 2010, BAE Systems sold half of its 20% stake in the company to Investor AB, which then became the major shareholder. In June 2011, the British company sold its remaining stake bringing its 16-year involvement in Saab to an end.

BAE's exit restored Saab's independence and allowed the company to pursue its own international strategy without potential conflicts. The timing proved fortuitous—Saab emerged as a pure-play Swedish defense company just as global demand for its products began accelerating.

---

↑ Back to Top

V. Key Inflection Point #1: The Gripen Story

↑ Back to Top

Birth of a 4th/5th Generation Fighter

The Gripen program represents perhaps the most audacious bet in Saab's history—developing a fourth-generation fighter jet that could compete with products from the United States, Russia, France, and multinational European consortia, all with a fraction of their development budgets.

The newest fighter, the Gripen, takes its name from a mythical beast, the Griffin. However, the Gripen is certainly no myth; for several years this program consumed nearly one-third of Sweden's defense budget. It was designed as a lightweight high-performance fighter and was intended to replace the remaining Drakens as well as the Viggens.

The Gripen's design philosophy reflected Sweden's unique strategic requirements but proved to have broader appeal. The Gripen, in service since 1996, is a fourth-generation, single-engine supersonic fighter seen by analysts as a reliable, lower-cost option compared to more expensive fifth-generation jets like the F-35.

The aircraft was designed to fight Russia in ways that American fighters could not—operating from dispersed locations, including highway strips, with rapid turnaround times and minimal maintenance requirements. These characteristics, developed for Swedish strategic requirements, would later prove attractive to export customers seeking affordable, flexible air power.

In the 1960's Saab helped to create Sweden's computer, missile and space industries. The first deliveries of Gripen, the first of the fourth generation fighter aircraft to enter service, began in 1993. In 1999 South Africa signed the first export order for Gripen. Since then the Czech Republic and Hungary have also signed contracts.

↑ Back to Top

Brazil: The Critical Export Victory (2014)

For years, Gripen exports had been modest—leases to Czech Republic and Hungary, a troubled sale to South Africa. Then came Brazil, which transformed Gripen from a niche product into a global competitor.

On 24 October 2014, Brazil and Sweden signed a 39.3 billion SEK (US$5.44 bn) contract for 28 Gripen E (single-seat version) and eight Gripen F (dual-seat version) fighters for delivery from 2019 to 2024 and maintained until 2050; the Swedish government will provide a subsidized 25-year, 2.19% interest rate loan for the buy.

Saab was awarded the $5.4 billion contract to supply 36 Gripen E/F fighters to the Brazilian Air Force (FAB), winning over competing bids from Boeing's F-18 Super Hornet and Dassault Aviation's Rafale.

The Brazil contract was transformational for several reasons. First, it validated Gripen against far more expensive competitors. Second, it included massive technology transfer that created a genuine partnership rather than simple arms sales. Since the signing of the contract to supply 36 Gripen fighters—28 Gripen E (single seater) and 8 Gripen F (twin seater)—to the Brazilian Air Force in 2014, Saab and Embraer have been working together on the largest ongoing technology transfer project in the country.

"The start of operations of the Gripen production line marks our commitment to transfer technology and knowledge to Brazilian industry. Here, we will produce 15 of the 36 aircraft currently contracted to the Brazilian Air Force. The aim is also to produce here any future Gripen orders from Brazil as well as other countries. We want Brazil to become an export hub to Latin America and potentially other regions," said Micael Johansson, President and CEO of Saab.

The production line for the F-39 Gripen E was inaugurated in Brazil on May 9, 2023. This marks another historic milestone in the F-39 Gripen program, establishing the first production line for the fighter outside of Sweden.

The Brazil model—local production, technology transfer, and industrial partnership—would become Saab's template for major international deals.

↑ Back to Top

Colombia: The Latest Gripen Victory (2025)

Fast forward to late 2025, and Gripen's export momentum has accelerated dramatically. Saab has today signed a contract with the Colombian Government and received an order for 17 Gripen E/F fighter aircraft. The order value is EUR 3.1 billion and deliveries will take place 2026-2032. The contract includes 15 Gripen E one-seater and two Gripen F two-seater fighter aircraft as well as associated equipment and weapons, training and services.

Saab announced it has signed the contract with Colombia for the acquisition of the Gripen E/F, after the selection in April 2025. The contract, signed on Nov. 15, 2025, includes 15 Gripen E single-seater and two Gripen F twin-seater fighters.

Swedish Minister for International Development Co-operation and Foreign Trade Benjamin Dousa stated, "The sale of JAS Gripen to Colombia is one of Sweden's largest ever export deals. This deal will strengthen Sweden's security and economy, and demonstrates the clear link between trade and security."

Colombia now joins neighboring Brazil as an operator of the Swedish-made fighter. Saab has been slowly building out the Gripen's user base. In August, the company locked in a $550 million deal with Thailand to purchase four of the jets.

---

↑ Back to Top

VI. Key Inflection Point #2: The T-7 Red Hawk Partnership with Boeing

↑ Back to Top

How Saab Won a $9.2 Billion US Military Contract

Perhaps the most remarkable validation of Saab's capabilities came not from a European ally but from the U.S. Air Force itself. In one of the most competitive defense procurement competitions in history, a Boeing-Saab team won the contract to replace America's aging T-38 trainer fleet.

The Boeing–Saab T-7 Red Hawk, initially known as the Boeing T-X (later Boeing–Saab T-X), is an American–Swedish transonic advanced jet trainer produced by Boeing with Saab. In September 2018, the United States Air Force (USAF) selected it for the T-X program to replace the Northrop T-38 Talon as the service's advanced jet trainer.

In September 2018, Air Force officials announced that Boeing's design would be its new advanced jet trainer, under a program costing up to US$9.2 billion that would purchase 351 aircraft, 46 simulators, maintenance training and support. This contract has options for up to 475 airplanes in total.

The Boeing-Saab partnership beat formidable competition. A joint venture between U.S. aerospace giant Boeing and Swedish manufacturer Saab, the T-7 Red Hawk was selected as the U.S. Air Force's future jet trainer in 2018. The collaboration fought off Lockheed Martin, who teamed with KAI to offer the T-50 Golden Eagle, and Leonardo with the M-346 derived T-100.

↑ Back to Top

Digital Engineering Innovation

The T-7 program showcased Saab's engineering prowess through revolutionary development methods. The T-7A was developed in fewer than three years using digital design techniques to quickly field new, low-cost designs. The aircraft was designed from the outset to replicate the systems and performance of advanced fourth and fifth-generation aircraft including high-G/high angle of attack performance and a blend of synthetic and onboard systems.

↑ Back to Top

US Manufacturing Expansion

The T-7 contract required Saab to establish significant U.S. manufacturing capability—a strategic move that deepened the company's presence in the world's largest defense market.

Saab's Swedish engineering expertise helped launch and design the T-7A's aft fuselage. As part of the company's commitment to increasing U.S. domestic production capabilities, Saab completed the technology transfer between the U.S. and Sweden and now manufactures the T-7A aft fuselage at its state-of-the-art facility in West Lafayette, Indiana. This domestic production ensures that Saab provides U.S. Armed Forces with the agile responsiveness of a local market partner.

In March, Boeing revealed that initial T-7A trainer production units are expected to be delivered in early 2026. Boeing teamed up with Swedish aerospace firm Saab in 2018 to build the T-7, and since Saab opened its Indiana facility in 2021, the companies have been working on the aircraft's aft fuselage there.

However, the program has faced challenges that are testing both Boeing and Saab. The T-7 program has been beset by design, testing and production issues that have caused its schedule to slip behind repeatedly. The service originally expected to buy the first operational T-7s in 2023, but problems with its ejection systems and flight control software pushed that to 2024, and then to 2025. It is now expected to be three years behind the original plan.

T-7 production is now slated to begin in 2026, almost eight years after Boeing won the original contract to replace the service's half-century-old T-38 trainers. Officials also said they would buy four "production representative" aircraft to speed up testing.

It will take as much as two years before production woes on the Air Force T-7A Red Hawk trainer aft fuselage stop dragging down profits for Swedish sub-contractor Saab, according to the company's CEO. Micael Johansson told investors that problems with "start-up costs and under absorption" aligned to low-rate production of the T-7 will only correct themselves "over time." "During the next couple of years, I would say it will take before we get back to sort of really good numbers" in the company's Aeronautics division.

Despite these near-term headwinds, the T-7 program represents a strategic footprint in the U.S. defense market that few foreign companies can match. Boeing aims to sell over 2,700 Red Hawks globally.

---

↑ Back to Top

VII. Key Inflection Point #3: Ukraine War Catalyst (2022-Present)

↑ Back to Top

NLAW: The "Saint Javelin" of Swedish Defense

When Russian tanks rolled toward Kyiv in February 2022, few predicted they would be stopped by a shoulder-fired missile developed through a Swedish-British partnership. The NLAW (Next generation Light Anti-tank Weapon) became one of the defining weapons of the early war—and transformed Saab's ground combat business.

The NLAW has become a game-changer in modern warfare, proving its effectiveness in Ukraine by enabling infantry to destroy tanks with minimal training and at close range. Designed by Sweden's Saab in collaboration with the UK, the NLAW features dual attack modes—Overfly Top Attack for targeting weak tank hatches and Direct Attack for structures. Lightweight and cost-effective at $33,000 per unit, it can penetrate advanced armor, including explosive reactive defenses.

The NLAW's operational capabilities were put to the ultimate test on the battlefields of Ukraine. Prior to the escalation in 2022, the UK supplied Ukraine with 2,000 NLAW units, with subsequent deliveries reaching over 8,000 units amidst the conflict. The system's soft-launch mechanism and confined-space firing capability proved invaluable in the dense urban landscapes and the varied tactical environments of the war. Ukrainian forces leveraged the NLAW's precision and ease of use to devastating effect, significantly impacting Russian armoured columns and fortifications. The system's effectiveness in urban combat, where engagements often occur at closer ranges and require rapid mobility, was particularly noted. The NLAW's ability to quickly engage and destroy enemy tanks and armoured vehicles with minimal training and preparation underscored its status as a force multiplier for the Ukrainian Armed Forces.

The conflict has also showcased the power that weapons can give the dismounted soldier. Ukraine's effective use of man-portable anti-tank weapons like the NLAW has inflicted significant losses on Russian armoured forces, demonstrating the vulnerability of even technologically advanced militaries to determined, well-equipped troops on the ground. It repeated an old theme: there is advantage to be gained in systems that empower smaller units to engage and defeat high-value targets.

↑ Back to Top

Order Book Explosion

The Ukraine war triggered unprecedented demand for Saab's products. Saab reported its overall order intake for 2022 amounted to SEK 63.1 billion ($6 billion USD), an increase of 45 percent from 2021. Nearly half of the annual 2022 order total was recorded in the forth quarter, with an exceptional SEK 29.9 billion logged—an increase of 144 percent over the previous year. "I would say that maybe in the last quarter we started seeing some effects specifically from the tragic war in Ukraine," said Saab CEO Micael Johansson.

↑ Back to Top

Massive Production Ramp-Up

Meeting this demand has required dramatic expansion of manufacturing capacity. Swedish manufacturer Saab expects the weapons of its ground combat portfolio—including the company's Next generation Light Anti-tank Weapon (NLAW) which have proven highly effective in Ukraine—will increase dramatically to reach an annual output of 400,000 units.

Turns out, Saab had made about 100,000 NLAWs yearly before the war broke out, and throughout 2022, the production capacity has grown to 200,000, now poised to become 400,000 yearly.

↑ Back to Top

Poland: The Mega-Customer

Poland has emerged as Saab's most important new customer, driven by the country's geographic proximity to Russia and Ukraine and its commitment to dramatically expanding defense capabilities.

Saab has today signed a contract with the Polish Ministry of Defence's procurement authority for delivery of the Carl-Gustaf® M4 weapon, ammunition and training equipment. The order value corresponds to SEK 12.9 billion and the contract period is 2024-2027. The order is expected to be booked by Saab before the end of Q2 2024. "I am proud of our close relationship with the Polish Armed Forces and that Saab can continue to strengthen Poland's ground combat capability and national defence with our world-leading Carl-Gustaf system," says Saab's CEO and President Micael Johansson.

Just yesterday, an even more significant announcement: The Swedish government's offer of Saab's A26 submarines to Poland has been selected by the Polish government to replace the current Kilo-class submarine. At this point, Saab has not signed any contract nor received any order.

Poland aims to procure three submarines for the country's Navy, with plans to have a contract signed by the end of this year. "This is a great day for the security of the Polish state, a great day for the Polish Navy."

The Polish government has officially chosen the Swedish offer of Saab's next-generation A26 Blekinge-class submarines for its long-awaited Orka submarine program, in what is expected to be a 10 billion Polish zloty ($2.52 billion) investment. The decision to acquire three submarines from Sweden marks a major step toward replacing Poland's sole aging conventional Kilo-class diesel-electric boat that dates back to the Soviet-era.

↑ Back to Top

The Ukraine Gripen Deal

Perhaps most dramatically, Ukraine itself has emerged as a potential major Gripen customer. Sweden signed an agreement laying the groundwork for Kyiv to make a massive purchase of anywhere from 100 to 150 Gripen E fighter jets from Swedish defense firm Saab.

President Zelenskyy and Swedish PM Ulf Kristersson have signed a deal which clears the way for Ukraine to acquire between 100 and 150 Saab Gripen fighter aircraft. In a joint press conference held in front of a Gripen E aircraft at Saab's facility in Linkoping, the two leaders announced the mutual signing of a defence cooperation agreement. One part of the agreement confirms Ukraine's intent to modernise and expand its air force with potentially over 100 Saab Gripen multirole fighter aircraft.

Swedish defence group Saab says it is ready to scale up production of its Gripen fighter jets if a potential export deal to Ukraine for up to 150 aircraft goes ahead. Sweden signed a long-term cooperation agreement with Ukraine this week, which includes the option to supply new Gripen E jets in what would be the country's largest aircraft export deal to date. Saab CEO Micael Johansson said the company was already boosting output and could soon build between 20 and 30 jets annually, but would need to double that rate if the Ukraine agreement is confirmed.

Swedish aerospace company Saab is prepared to open a final-assembly plant in Ukraine as part of a proposed deal for Kyiv to buy up to 150 Gripen fighter jets.

---

↑ Back to Top

VIII. Current State: The Multi-Domain Defense Champion

↑ Back to Top

Business Segments Overview

Today's Saab has emerged as a comprehensive defense platform covering air, land, sea, and cyber domains.

Saab AB provides products, services, and solutions for military defense, aviation, and civil security markets Internationally. The company operates through Aeronautics, Dynamics, Surveillance, Kockums, and Combitech segments. The company develops military aviation technology, as well as conducts studies on manned and unmanned aircraft. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces. In addition, the company offers solutions for safety and security, surveillance and decision support, threat detection, and location; and protection, including airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Further, it provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels.

↑ Back to Top

Financial Performance

The financial trajectory has been exceptional. "I am pleased to report that Saab ended 2024 in a strong way. We delivered a better-than-expected organic sales growth, improved our operational performance and generated a positive cash flow. We achieved all this while investing significantly in expansion to meet higher customer demand and strengthening our market position. In the wake of the global geopolitical uncertainty, Saab is committed to being a reliable partner, supporting countries in building their defence capabilities and contributing to increased European defence capacity," says Micael Johansson, President and CEO, Saab.

Order bookings for the fourth quarter amounted to SEK 17,556m (31,501), driven by small and medium-sized orders, resulting in an order backlog amounting to SEK 187bn (153). Sales in the quarter amounted to SEK 20,850m (16,122) with an organic growth of 29%, driven by all business areas.

In light of its strong performance, Saab's Board has proposed a dividend increase to SEK 2.00 per share, up from SEK 1.60. Looking ahead, the company expects organic sales growth of 12-16% in 2025, with EBIT growth surpassing sales growth and continued positive operational cash flow. For the medium-term period 2023-2027, Saab aims for an average organic sales growth of 18%, EBIT growth exceeding sales growth, and a minimum 60% cumulative cash conversion.

↑ Back to Top

Global Footprint

Saab continues to strengthen its presence in key markets, develop innovative solutions and acquire companies in prioritised areas. Saab's products are sold to over 100 countries and it currently operates in over 30 countries.

Empowered by its 25,000 talented people, Saab constantly pushes the boundaries of technology to create a safer and more sustainable world. Saab designs, manufactures and maintains advanced systems in aeronautics, weapons, command and control, sensors and underwater systems. Saab is headquartered in Sweden.

↑ Back to Top

Recent Strategic Moves

Saab has been aggressively expanding its technology capabilities through acquisition. In August 2023, it was announced Saab had acquired the Bedford, UK–based manufacturer of AI-enabled autonomous swarm systems, Blue Bear Research Systems. In September 2023, it was announced Saab had acquired the San Francisco–headquartered artificial intelligence / machine learning development company CrowdAI.

These acquisitions position Saab at the forefront of autonomous systems and AI applications in defense—areas that will likely define next-generation warfare.

---

↑ Back to Top

IX. Playbook: Business & Strategic Lessons

↑ Back to Top

Swedish Model of Defense Self-Sufficiency

Saab's history validates the Swedish approach to defense industrial policy: a neutral nation can sustain world-class indigenous defense capability if it maintains political commitment, patient capital, and engineering culture across generations.

The key insight is that defense capability compounds over time. The engineers who designed the Draken trained those who built the Viggen, who in turn trained those who created the Gripen. This institutional knowledge cannot be recreated quickly if allowed to atrophy.

↑ Back to Top

The Wallenberg/Investor AB Influence

As of August 2020, Investor AB owns a 30.16% stake in the company (39.69% of the voting rights) and is the top owner.

The basis for the Wallenberg family's activities is to be an active owner in the companies in which the Wallenberg Foundations have ownership interests through Investor AB and FAM AB. The family's long-term work with these international corporations, and the successes of each company, enable the Foundations to distribute more than SEK 2.8 billion annually to research and education in Sweden. The most important holdings owned directly through the Foundations, or indirectly via Investor AB and FAM AB, include ABB, AstraZeneca, Atlas Copco, Ericsson, Saab AB, SEB, SKF, and others.

Marcus Wallenberg has served as the Chairman of the Executive Board since 2006, underscoring the enduring influence of the Wallenberg family.

The Wallenberg model demonstrates that concentrated, engaged ownership can create value over very long time horizons. The family has maintained control through boom and bust cycles, providing stability when short-term investors might have demanded restructuring or sale.

↑ Back to Top

"Multi-Domestic" Strategy

Saab's approach to international expansion—establishing local manufacturing, technology transfer, and industrial partnerships rather than simply exporting finished products—has proven strategically superior to traditional arms export models.

The Brazil partnership established the template: genuine technology transfer that creates local capability, industrial jobs, and political buy-in. Colombia follows the same model. The potential Ukraine deal would represent an even more ambitious application of this approach.

↑ Back to Top

Product Philosophy

Saab has carved out a distinctive market position: affordable, operationally flexible systems designed for smaller nations' needs rather than scaled-down versions of products designed for superpower militaries.

The Gripen exemplifies this philosophy. It wasn't designed to match the F-35's stealth capabilities or the F-22's air superiority. Instead, it was designed for rapid turnaround, dispersed operations, low maintenance requirements, and cost-effectiveness—characteristics that resonate with many nations' actual operational requirements.

↑ Back to Top

Capital Discipline

Saab survived the post-Cold War defense downturn when many Western defense companies collapsed or were absorbed by larger competitors. The key was capital discipline—avoiding the temptation to chase diversification into unrelated businesses (the automotive lesson had been learned) while maintaining core R&D investment.

↑ Back to Top

Leadership Profile: Micael Johansson

Bengt Micael Johansson (born 6 October 1960) is a Swedish business executive who serves as the president and chief executive officer (CEO) of Saab AB. He succeeded Håkan Buskhe as CEO on 23 October 2019. Johansson was born in Västerlövsta Parish, Västmanland County, Sweden. He earned a bachelor's degree in mathematics and computer science from Uppsala University. Johansson began his career at Saab in 1985 as a systems engineer, working initially with avionics and radar technologies. He subsequently held various management positions within Saab Avionics (formerly Ericsson Saab Avionics), and in 2008 he was appointed president of Saab Avitronics. In January 2010, Johansson became senior vice president and head of Saab's business area Surveillance.

Mr Johansson brings around 40 years of experience within engineering, sensor systems and defence. He is an experienced leader, and has served within many different areas and at many different levels of Saab AB through the years.

Johansson represents the archetypal Saab leader: an engineer who rose through the organization, understanding both technical detail and strategic context. His recent elevation to industry leadership—In 2023, Johansson became vice chairman of the Aerospace, Security and Defence Industries Association of Europe (ASD). In May 2025, he was elected president and chairman of the ASD Board for a two-year term.—reflects Saab's growing stature in European defense.

---

↑ Back to Top

X. Porter's 5 Forces & Hamilton's 7 Powers Analysis

↑ Back to Top

Porter's Five Forces

Threat of New Entrants: EXTREMELY LOW (★☆☆☆☆)

Defense aerospace represents perhaps the highest barrier-to-entry industry in existence. Developing a modern fighter jet requires decades of accumulated engineering knowledge, billions in R&D investment, security clearances at national levels, and established relationships with defense ministries. The Gripen took over 15 years from concept to operational service. No new entrants have successfully entered the fighter jet market in decades.

Bargaining Power of Suppliers: MODERATE (★★★☆☆)

Saab depends on specialized suppliers for critical components—the Gripen uses the American GE F414 engine, for example. However, the company has worked systematically to internalize key technologies and develop alternative sources. The acquisition of Kockums brought submarine manufacturing in-house; the development of Datasaab created indigenous avionics capability.

Bargaining Power of Buyers: MODERATE (★★★☆☆)

Governments are the sole customers, wielding enormous negotiating leverage. They can delay purchases, demand offsets, or simply choose competitors. However, the geopolitical urgency created by the Ukraine war has shifted power toward suppliers. Nations that once might have negotiated for years are now accelerating procurement timelines. Long-term support contracts also provide stability once platforms are selected.

Threat of Substitutes: LOW (★★☆☆☆)

There are no commercial alternatives for fighter jets, submarines, or advanced weapons systems. The only "substitutes" are other defense systems—drones instead of manned aircraft, for example—which Saab is actively developing alongside traditional platforms.

Competitive Rivalry: HIGH BUT SEGMENTED (★★★★☆)

Saab competes with defense giants like Lockheed Martin, Boeing, BAE Systems, and Dassault. However, it has carved out a distinctive niche: "affordable 4.5-generation capability" for nations that want modern air power without F-35 costs. This positioning reduces direct competition in many tenders.

↑ Back to Top

Hamilton's 7 Powers Analysis

Scale Economies: Saab achieves modest scale economies in areas like ground combat weapons (NLAW, Carl-Gustaf, AT4) where production volumes are significant. However, fighter jet production runs are too small for classical scale advantages compared to giants like Lockheed Martin.

Network Effects: Limited direct network effects, but increasing Gripen adoption creates an ecosystem of trained pilots, maintenance personnel, and spare parts infrastructure that reduces switching costs for existing operators and eases adoption for neighbors (Colombia benefits from Brazilian experience).

Counter-Positioning: This is Saab's strongest power. The company's entire strategy represents counter-positioning against larger competitors. Offering affordable, flexible systems that don't require massive maintenance infrastructure counter-positions against F-35's complexity. Local production and technology transfer counter-positions against traditional "export finished products" models. This counter-positioning succeeds because larger competitors would damage their own business models by matching these approaches.

Switching Costs: Once a nation adopts Gripen, switching costs are substantial: pilot training, maintenance infrastructure, weapons integration, and political relationships all create lock-in. These costs compound over aircraft generations—Czech Republic's Gripen C/D lease has been extended multiple times.

Cornered Resource: Sweden's 85+ years of continuous fighter jet development represents an irreplaceable institutional capability. The engineering culture, accumulated tacit knowledge, and security clearances cannot be replicated by competitors.

Process Power: Saab's digital engineering capabilities, demonstrated in the T-7 program, represent process advantages. The company's ability to develop capable aircraft at lower cost than competitors reflects superior development processes.

Branding: "Swedish defense" carries meaning: quality, reliability, political neutrality (NATO membership is recent), and no geopolitical strings attached. For nations concerned about dependence on American or Russian suppliers, Swedish origin is a significant advantage.

---

↑ Back to Top

XI. Investment Considerations & Key Metrics

↑ Back to Top

The Bull Case

The fundamental bull case is straightforward: we are entering a structural, multi-decade increase in global defense spending after 30 years of peace dividend complacency. Saab has delivered exceptional returns, with shares up 183% since February, driven by strong defense sector demand and robust earnings. The backlog now exceeds $21 billion, providing nearly three years of revenue visibility.

Saab is uniquely positioned to benefit from this environment:

1. European defense independence: EU nations are committed to reducing dependence on American suppliers. Saab offers European capability across multiple domains.

2. Affordable excellence: Nations increasing defense spending often can't afford top-tier American systems. Gripen, NLAW, and other Saab products offer proven capability at accessible price points.

3. Order backlog visibility: Johansson stated, "We have a nice order backlog and deliveries are going well and our profitability continues to develop in the right direction." Bookings in the third quarter reached 20.9 billion Swedish crowns, and the order backlog stood at 202.4 billion.

4. Production capacity expansion: Unlike competitors constrained by existing capacity, Saab is actively expanding manufacturing in Sweden, Brazil, and the United States.

5. Ukraine optionality: A confirmed Ukraine Gripen order of 100-150 aircraft would transform Saab's fighter business and potentially establish production in a post-war Ukraine.

↑ Back to Top

The Bear Case

Investors should weigh significant risks:

1. Valuation expansion: The Saab AB PE ratio based on its reported earnings over the past 12 months is 40.03. This reflects expectations that may prove difficult to exceed.

2. T-7 program execution: Boeing's struggles with the T-7 program create near-term earnings headwinds for Saab's aeronautics division.

3. Concentration risk: Major programs (Gripen, T-7, A26 submarines) represent significant revenue concentration. Program delays or cancellations would have material impact.

4. Geopolitical uncertainty: Ukraine Gripen orders depend on war outcomes, financing arrangements, and political commitments that remain uncertain.

5. Competition: The F-35 program continues expanding its operator base, and fifth-generation aircraft may eventually marginalize 4.5-generation competitors like Gripen.

6. DOJ Investigation: In October 2024, Saab North America, Inc. received a subpoena from the U.S. Department of Justice (DoJ) requesting information about the Brazilian Government's acquisition of 36 Gripen E/F fighter aircraft in 2014. While the investigation's scope and implications remain unclear, it represents a regulatory overhang.

↑ Back to Top

Key Performance Indicators to Monitor

For ongoing analysis, three metrics deserve particular attention:

1. Order Backlog / Revenue Ratio This measures revenue visibility and demand sustainability. The current backlog of SEK 187+ billion against ~SEK 64 billion annual revenue provides approximately 3 years of visibility—exceptionally strong by defense industry standards. Monitor whether this ratio expands (indicating accelerating demand) or contracts (suggesting demand normalization).

2. Organic Revenue Growth Rate Outlook for 2025: an organic sales growth between 12-16%, an EBIT growth higher than the organic sales growth. Updated medium-term targets 2023-2027: an organic sales growth of around 18% (CAGR). The company's ability to achieve and sustain mid-teens organic growth would validate the structural demand thesis. Consistent underperformance would suggest execution challenges or demand normalization.

3. EBIT Margin Expansion Revenue growth is meaningful only if it translates to profitability. Saab has guided for EBIT growth exceeding revenue growth—implying margin expansion. Monitor quarterly EBIT margins for evidence that scale benefits are materializing and T-7 program headwinds are resolving.

---

↑ Back to Top

XII. Conclusion: The Next Chapter

In 1937, Swedish Prime Minister Per-Albin Hansson recognized that a neutral nation's sovereignty depends on its ability to manufacture its own weapons. Nearly nine decades later, that insight has proven remarkably durable—and remarkably profitable for Saab's shareholders.

The company that emerged from wartime anxiety has become a multi-domain defense champion with world-class capabilities in fighter aircraft, submarines, ground combat weapons, and electronic warfare systems. The Wallenberg family's patient capital approach has preserved Swedish ownership and strategic autonomy through decades of industry consolidation.

Today, Saab stands at an inflection point. Global defense spending is rising after decades of decline. European nations are investing in defense capability with urgency not seen since the Cold War. And Swedish neutrality has given way to NATO membership—potentially opening new markets while aligning Saab with Western alliance priorities.

The questions that will determine Saab's next chapter are significant: Can the company execute its ambitious production expansion plans? Will the Ukraine Gripen deal materialize? Can T-7 program challenges be resolved? Will European defense spending commitments prove durable or fade as memories of Ukraine recede?

What seems clear is that Saab has positioned itself at the intersection of several powerful structural trends: European defense autonomy, affordable capability for mid-tier powers, and technological leadership in areas like autonomy and electronic warfare.

For investors, Saab represents something relatively rare: a pure-play European defense company with demonstrated competitive advantages, long-term stable ownership, and exposure to structural demand growth. Whether current valuations adequately reflect these attributes—or have already priced them in—remains the essential question.

The Swedish dragon has survived world wars, cold wars, and peace dividends. Its next flight path will be shaped by forces as old as geopolitics and as new as AI-enabled warfare. The only certainty is that nations will continue needing to defend themselves—and Saab has spent 88 years perfecting the art of helping them do so.