Saab 2015 Annual Report Download - page 19

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BUSINESS MODEL
Saab’s oering comprises complex systems with a
great deal of research and development as well as
repeat orders for products and services. e business
model is adapted to the product area, system com-
plexity, customer group and geographical market.
Complex defence orders
In complex defence orders, the solutions are com-
prehensive and oen include training, maintenance,
support and service over the product’s entire life-
cycle. Deliveries can continue for several years aer
development. ese systems are congured and
designed based on each customer’s specic needs
and oen have a large share of customer-nanced
development. In addition, complex defence orders
usually entail some form of industrial co-operation,
e.g., technology transfers.
Subcontractor
Saab can also serve as a subcontractor to a partner
with primary contact with the end customer, e.g.,
when supplying subsystems. Several of Saab’s
systems, such as command and control systems,
are platform independent and can be integrated
with other companies’ products and systems.
Another reason to be a subcontractor could be the
cost or that the customer country wants a domestic
company as the principal supplier.
Volume orders
Maintenance, support and training can also be sold
separately. Consumables fall into the category
volume orders as well. ese products and solutions
are oen sold directly to the customer. Some products
and services are delivered the same day an order is
placed, while others have a lead time of over a year.
ese orders involve less customer-nanced devel-
opment than complex systems.
STRATEGY
PROFITABLE GROWTH
SIGNIFICANT ORDERS IN 2015
• In March, follow-on orders from Hindustan Aeronautic Limited (HAL), India,
for serial production of an integrated electronic warfare self-protection system
for installation on the Indian Army’s and Air Force’s Advanced Light Helicopter
Dhruv. The total order value was MSEK 740.
• Contracts with the Swedish Defence Material Administration (FMV) for two Type
A26 submarines as well as the overhaul and upgrade of two Gotland-class
submarines. The orders cover the period 2015–2024 and have a total value
of SEK 8.6 billion.
• Orders from the UK Ministry of Defence for additional Giraffe AMB radar
systems plus upgrades of the existing British Giraffe systems. The order value
is approximately MSEK 610. Deliveries started in the second half of 2015 and
will continue until 2018.
• An order was received from the Brazilian government for the development and
production of 36 Gripen NG aircraft. Deliveries of Gripen NG to the Brazilian Air
Force will be undertaken from 2019 to 2024, and the total value is approxi-
mately SEK 39.3 billion. Saab also received an order from Brazil for external
stores for Gripen NG. The order value is approximately MUSD 245 and deliveries
will be undertaken between 2019 and 2024.
• In October, it was announced that Saab has extended its support and mainten-
ance agreement with FMV for the SK60 trainer aircraft of the Swedish Armed
Forces. The contract will be in place for three years starting on 1 July 2017 and
the order value amounts to MSEK 400.
• The United Arab Emirates ordered a new airborne surveillance system valued at
approximately USD 1.27 billion.
• A number of orders for advanced weapon systems and ammunition were
received during the year.
Repetition
Complexity
Dimensions of Saab’s business
COMPLEX DEFENCE ORDERS
Complex systems with long delivery
times, e.g., Gripen and Erieye.
SUBCONTRACTORS
Subcontractor of civilian and military
command and control systems, e.g.,
Remote Tower and 9LV.
VOLUME ORDERS
Repeat orders for maintenance, repairs and
consumables, e.g., ammunition and technical
consulting services.
SAAB ANNUAL REPORT 2015 – 15