Saab: Gripen gains a long-term tailwind in Ukraine

Sweden and Ukraine jointly announced that Ukraine intends to acquire an initial batch of up to 20 Gripen E/F, while Sweden donates 16 Gripen C/D and replaces them with new aircraft. Although no contract has been signed yet, we believe the joint announcement by two heads of government, following an October 2025 letter of intent, makes this outcome highly probable. If negotiations close successfully and financing is secured, this moves from a bull case scenario to a base case, forcing upward revisions to our medium- and long-term revenue and margin expectations for Aeronautics.

The seed of a potentially much larger harvest

We believe Ukraine calling this an “initial batch” is the most important phrase in the press release. A country rebuilding its air force and making Gripen the backbone of its future fighter fleet would create a long-term Aeronautics revenue stream. Assuming a Ukrainian purchase price of ~2.5 BEUR, or 28 BSEK, for the initial 20 E/F aircraft, the program would equal ~10% of Saab’s current backlog and ~30% of its current revenue base. Delivery margins would likely start close to Aeronautics’ current EBIT margin of ~6%. Over the long-term, however, we see a credible path toward 10% or slightly above as volumes scale, production becomes more modular, and the software upgrade component becomes more important. The Swedish replacement of the 16 donated C/D aircraft with new production adds, in our view, a further estimated 23 BSEK in near-term program value. We believe also that that order carries strong procurement logic, given Sweden’s legal and political commitment to restore its own air defense capability.

Thirty years is a long time to sell spare parts

At maturity, the Ukrainian Gripen fleet, excluding the 16 donated aircraft, could plausibly generate ~840-1,400 MSEK of annual recurring support revenue if sustainment settles at 3-5% of the initial 28 BSEK acquisition base. For context, that would equal ~4-6% of Aeronautics estimated 2026 revenue of 22.5 BSEK and should come at structurally higher margins. Applying a mid-teens EBIT margin to proprietary parts, repairs, technical support and software work would imply ~125-260 MSEK of annual EBIT. That equals ~9-19% of our estimated 2026 Aeronautics EBIT of 1,351 MSEK, with margins that should lift, rather than dilute, the segment average over time. At group level, these would equal ~1-2% of estimated 2026 revenue and ~1-3% of estimated 2026 EBIT.

Assuming combat-operated aircraft run at 2-3 times peacetime consumption rates, we view these numbers as conservative for as long as the conflict persists. Over a 30-year service life, the Ukrainian fleet would generate sustainment, mid-life upgrades, and incremental software and weapons integration work. Averaging across the full program life, an estimated total lifetime value of 60-85 BSEK implies ~2-3 BSEK of average annual revenue attributable to this fleet alone, or approximately 2-3% of Saab's current consolidated annual sales. That is one initial batch in a country that has explicitly signaled a larger fleet ambition.

New order, same old problem

In our view, the long-term setup is very strong, but the execution risks we have flagged several times still matter, especially in the near term. Saab’s production capacity is already stretched, and Ukrainian financing needs to be secured internationally before these plans turn into firm backlog. We believe expectations for Aeronautics were already optimistic going into the announcement, and no contract has been signed. We are therefore not making any revisions to our estimates at this stage. On a partial basis, we see scope for 2-5% upside to Aeronautics revenue and 3-6% upside to Aeronautics EBIT across 2027-29, if negotiations move forward as indicated. That said, we believe the joint political commitment materially reduces the commercial risk around the deal. The longer-term option on fleet expansion beyond the initial 20 aircraft, together with the long-term service revenue that follows, still looks largely absent from current expectations. At group level, the potential revisions would not be material. However, in our view, this could still become a significant long term opportunity for Saab if Ukraine places further orders, strengthening the long-term growth path of Aeronautics and the group and adding further support to the structural demand narrative behind the stock.