Saab 2013 Annual Report Download - page 33

SAAB ANNUAL REPORT 2013 29
PORTFOLIO
A MORE MARKET-ADAPTED
PORTFOLIO
Saab’s strategy is to invest in production innovation
and strategic acquisitions in its key areas to achieve
a more focused, market-adjusted portfolio.
Saab has unique expertise in system integration, distinguished
not least by the fact that Sweden is one of the few countries in
the world able to deliver complex defence and security solutions.
At the moment, for instance, a new version of the Gripen ghter
is under development, a project that brings together Saab’s core
competencies and requires the ecient integration of several
highly complex sub-systems. e new Gripen is being developed
in collaboration with the customer FMV. Read more about the
Gripen project on page 8.
Product management and portfolio process
Saab’s strategic priority is to create a focused portfolio with
a competitive oering that can gain market share in selected
markets. is goal has been implemented step by step through a
series of initiatives. e product management process established
in 2010 harmonises the work done in the six business areas and
covers each product’s entire life cycle. Under the product mana-
gement process, every investment in product innovation requires
a thorough analysis of customer value, potential market success
and protability. Saab took another step towards a more focused
portfolio in 2012 by introducing a revised portfolio process for
continuous portfolio evaluation, including prioritisation of poten-
tial investment objects.
Acquisition and innovation in prioritised areas
Saab’s overarching acquisition strategy is that an acquisition must
strengthen the portfolio within prioritised areas or, alternatively,
strengthen local presence in a selected market. For example, the
strategic acquisitions of American Sensis in 2011 and Dutch
HITT in 2012 were joined with Saab’s existing operations to
form the new Trac Management product area. (Read more
about Trac Management on page 22). A review is also under-
way of possible divestments within non-core areas. Saab has the
same strategy for R&D investments as it has for acquisitions –
strengthening the portfolio within prioritised areas.
Priorities 2013
Implementation of the portfolio strategy proceeded in 2013 with
the determination of twelve prioritised product areas. ese
twelve ”key areas” together account for over 80 per cent of Saab’s
total sales. Each key area has annual sales of over SEK 1 billion.
Saab has 28 product areas in total, and in 2013 Saab launched
new product database with over 500 products grouped into the
28 product areas. e product database are linked to Saab’s CRM
system and provide strong support to the new market area orga-
nisation. One key characteristic of the product database is the op-
tion of providing bundled oerings to customers, which improves
Saab’s ability to steer customers towards cost-ecient solutions
that lower risk exposure for the customer and for Saab.
During the year Saab continued to work with product develop-
ment through modulisation. Modulisation allows Saab to quickly
develop customised solutions with minimal eort, making deve-
lopment work more cost-ecient and shortening lead times from
development to sale – thereby tying up less capital.
Three strategic transactions
Hydro-Lek Limited – a British manufacturer of remote hand-
ling systems and tools for underwater vehicles, with European,
American and Asian oshore industry customers – was acquired
in 2013. An agreement was also signed to acquire Teknikinforma-
tion i Krokom AB (TIKAB) – a company that produces and supp-
lies technical documentation for the civilian and military market.
Saab also made a strategic investment during the year in the listed
Indian company Pipavav.
e strategic acquisition of Hydro-Lek strengthens Saab’s
position as the world’s largest manufacturer of remote-controlled
underwater vehicles for the oshore and defence industries.
Remote-controlled underwater vehicles are an attractive niche
product, and Saab’s ambition is to continue to grow the opera-
tions. Hydro-Lek is part of business area Dynamics.
R&D, % of sales Internally financed R&D,
billion SEK
Capitalised development
costs, MSEK
Total R&D expenditures totalled MSEK 6,543
(5,946).
Saab will continue to invest in internally funded
development to strengthen our market-leading
position in cost-efcient cutting-edge technol-
ogy and secure our future offering.
Internally funded research and development
totalled MSEK 1,332 (1,798) in 2013, of which
a total of MSEK 24 (292) was capitalised. The
year-on-year increase in capitalised expendi-
tures is primarily attributable to the develop-
ment of Gripen E.
Amortisation of capitalised development costs
totalled MSEK 454 (590).
21.8
24.8
27.5
2012 2013201120102009
20.5
19.6 1.4
1.8
1.3
2012 2013201120102009
1.2
1.2
15 24
292
2012 2013201120102009
47
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