Saab 2015 Annual Report Download - page 20

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TYPES OF SALES
Saab’s sales model is divided into three main categories:
sales of products and spare parts, service assign-
ments and long-term customer contracts. In addition,
Saab generates a small share of royalties.
Long-term customer contracts account for about
60 per cent of Saab’s sales, but the distribution diers
by business area. Aeronautics is dominated by long-
term customer contracts, while Support and Services
receive a higher share of service assignments. Due
to the nature of the revenue Saab generates, sales,
income and cash ow uctuate over the course of
the year. Long-term customer contracts involve the
development and manufacture of complex systems.
One example is FMV’s order for Type A26 subma-
rines, which Saab will work on until 2024. Long-
term contracts are recognised in revenue as the
project is completed, while cash ows depend on
the timing of deliveries, advances and milestone
payments during the order period.
Service assignments consist of consulting and
support services. Examples include ongoing mainten-
ance associated with previous deliveries. Revenue
from service assignments on current account is
recognised when the services are rendered, while
service assignments that are part of xed-price
contracts are recognised according to the same
principles as long-term customer contracts.
e third part of the revenue model is the sale
of products and spare parts that Saab manufactures
and stocks or purchases on behalf of customers.
is revenue is recognised when ownership has
been transferred to the buyer. For more information,
see note 5.
STRATEGY
PROFITABLE GROWTH
The AT4 support weapon system has
been exported to more than 15 countries
and in 2015 a new version of the weapon
was launched.
The Security and Defence Solutions business area was dissolved as of January 1, 2016 and the business units have been distributed among the other business areas. For more infor-
mation, see page 35.
Aeronautics Dynamics Electronic
Defence
Systems
Security
and Defence
Solutions
Support
and Services
Industrial
Products and
Services
11%
89%
17%
20%
62%
11%
27%
62%
14%
26%
60%
7%
33%
60%
39%
7%
54%
Sales distrubution 2015
Service assigments
Long term customer
contracts
Sales of goods
16 – SAAB ANNUAL REPORT 2015