Saab 2012 Annual Report Download - page 24

20 SAAB ANNUAL REPORT 2012
21.8
24.8
2012201120102009
20.5
19.6
1.4
1.8
2012201120102009
1.2
1.2
15
292
2012201120102009
47
67
PORTFOLIO
CONTINUED FOCUS AND MORE
ACQUISITIONS
A prerequisite for continued success is
having a market-adjusted offering at the
technological forefront. Saab’s strategy is
that acquisitions should complement a
continuously developing portfolio.
Saab is an innovative, dynamic company with a competitive prod-
uct portfolio. The overarching strategy remains in place: to grow
organically and through complementary acquisitions. Acquisitions
made will strengthen the portfolio, produce a better system offer-
ing and strengthen international presence. A leading position was
taken on the global Trafc Management market through, among
other things, the acquisitions of Sensis in 2011 and HITT in 2012.
The strategy within R&D has identical overarching priorities:
focus is on competitive technologies that strengthen and comple-
ment existing product platforms. Internally nanced research and
development represents around 5 per cent of sales on an annual
basis.
Based on a long tradition of building complex systems, one
of Saab’s leading core competencies is integrating different
systems. These systems have often been developed with fewer
resources than our competitors use. The answer to this equation
has been multifunctionality – i.e. systems have been built that
solve more than one purpose for the customer. One example of
this is the Gripen system which, in addition to ghter capability,
also performs attack and reconnaissance functions. Another good
example is the Giraffe radar system, which is used primarily for
air surveillance but can also be used for localisation of artillery
re. The tradition within the defence materiel industry has been to
construct dedicated systems for each individual purpose. Saab
anticipates an increased need for multifunctional systems and
believes that we will therefore have a competitive advantage by
virtue of our experience and track record in constructing these
systems.
Priorities 2012
During the year, the benets of the product management process
developed in 2011 became evident. Product roadmaps (i.e. a
plan for the product’s further development) are in place for the
products’ entire lifecycle. In addition to greatly improving internal
governance of product development, this also provides oppor-
tunities for better dialogue with customers and thereby makes
our development more market-adjusted and cost-efcient. The
portfolio management was developed this year. This is a good
comprehensive control tool for making decisions on which invest-
ments that should be prioritised, from both a market and prot-
ability perspective.
Product development is made more efcient through modulisa-
tion. Two examples of this are the development of modular con-
cepts for ammunition for the Carl-Gustaf and AT4 systems and for
subcomponents for new radar systems. This reduces duplication
of work and improves cost-efciency for us. It also lowers lead
times between development and sales, thereby reducing tied-up
capital.
High activity in acquisitions, divestments
and new partnerships
In 2012 we acquired shares in Thai company AVIA SATCOM,
Swedish Sörman Information, Dutch HITT, Norwegian Bayes
Risk Management and German MEDAV. A MoU (Memorandum of
Understanding) was signed regarding a strategic investment in the
Indian company Pipavav Defence and Offshore Engineering Co
Ltd. Also, the South African radio operations were divested and
we entered into a partnership with BR Akaer.
The acquisition of HITT which develops and implements techni-
cal solutions to improve security in airport and marine environ-
ments, is in line with the overarching strategy of strengthening
Saab’s position in the global trafc management market.
A MoU (Memorandum of Understanding) was signed for
strategic investments in the Indian company Pipavav Defence
and Offshore Engineering Co Ltd. In conjunction with this, the
companies signed a Technical Partnership Agreement (TPA). Both
R&D as share of sales, % Internally financed R&D,
billion SEK Capitalised development costs, MSEK
Total expenditures in research and development
amounted to MSEK 5,946 in 2012 compared to
5,116 in 2011. In order to strengthen our technol-
ogy leadership and secure future offerings in
current challenging market conditions, we see
a continued need to invest in internally funded
development going forward.
Internally funded research and development
amounted to MSEK 1,798 in 2012 (1,355), of
which a total of MSEK 292 (15) were capitalised.
The increase of capitalised expenditures in 2012
compared to 2011 is mainly related to the devel-
opment of the next generation Gripen, Gripen E.
Amortisation and write-down of capitalised de-
velopment costs amounted to MSEK 590 in 2012
compared to MSEK 588 in 2011.