Saab: Poland Picks A26 in a potential 26 BSEK Baltic Submarine Deal

Saab announced on yesterday that the Polish government has selected the company's A26 submarines to replace the country's current Kilo-class submarine. The selection is a significant strategic step forward for Saab's Kockums business area, even though a binding order has not yet been signed. The news does not cause immediate revisions to our estimates, but it strengthens our stance on Saab’s competitiveness in the naval defense market.

Poland selects Saab as a partner for fleet modernization

Saab has announced that Poland has selected the A26 submarines for its fleet modernization program, naming Saab and the Swedish Defence Materiel Administration (FMV) as preferred supplier. The decision opens negotiations with the Polish Armed Forces’ procurement agency, but no contract has been signed, and no order has been booked at this stage. Reuters cites Poland’s deputy prime minister valuing the prospective deal at ~2.7 BUSD, with the first submarine targeted for delivery in 2030, as part of a broader effort to strengthen Polish undersea capability and partnerships in the Baltic Sea. Sweden’s offer combines A26 submarines with industrial cooperation, technology transfer, and a strategic partnership with Polish industry. According to Saab CEO Micael Johansson, the solution is tailored to Baltic Sea conditions and would materially improve the operational capability of the Polish Navy.

Significant win for the Kockums business area and the group

Poland’s selection is a significant and unexpected win for Saab Kockums, which has grown strongly in recent years but remains the group’s smallest operating business area. On headline numbers, a 2.7 BUSD submarine program would imply ~25-26 BSEK of additional orders for Saab and order book growth of ~165% for Kockums. The division has so far been anchored in the Swedish domestic market and the A26 Blekinge class for the Swedish Navy, so Poland’s decision is an important proof point for the competitiveness of the A26 platform in nearby export markets and supports Kockums’ long-term revenue growth prospects. Submarine contracts are large and long-term by nature, so we think the Polish government’s delivery ambitions look optimistic. Saab’s existing contract for two A26 submarines for Sweden was signed in 2015, with initial deliveries planned for 2022 and 2024; these were later delayed to 2027 and 2028, and delivery is now expected in 2031 and 2033. If the Polish deal were to be worth 2.7 BUSD for three units (allegedly), the implied price would be ~900 MUSD per submarine, with the first delivery targeted for 2030. On rough assumptions, if a contract is signed before year-end and production on the first unit starts in early 2026, this would imply a build period of ~4 years. Spreading the implied revenue evenly over that period would equate to revenue visibility of ~230 MUSD, or ~2.2 BSEK, per year, per submarine, for Kockums. The division has delivered LTM revenue of 9.1 BSEK (~960 MUSD), so the potential annual contribution from such a contract would be material for Kockums. Moreover, if Saab phases the remaining two submarines with production starts roughly six months apart after the first, the program could provide good revenue visibility for Kockums well into the early 2030s. The potential A26 order would also add to Saab’s recent export momentum, following the Colombian Gripen selection announced earlier in November.

No immediate impact on estimates before contract signing

On our current 2026 forecasts, we already assume a robust year for Kockums, with planned deliveries driving revenue growth of ~15%. If a contract of this size were to be signed, it would likely lead us to raise our 2026 revenue assumption for the division from ~11 BSEK to ~12 BSEK, or ~7% higher, leading to an upward revision of our growth assumption for the division by ~8-10 pp, depending on how we assume revenue recognition would phase through the program. For example, if the company has enough capacity to start manufacturing one of the three Polish submarines at the beginning of 2026 and recognizes ~25-30% of the implied annual contract value that year, Kockums’ revenue growth would be ~23-25% instead of the ~15% we currently forecast for 2026. We would not take the full effect of the implied annual contract value, as we already assume solid delivery rates for Kockums in the coming years. Under that setup, our 2027 and 2028 Kockums revenue forecasts would increase by ~12-15%, compared to what we currently expect.

In all, the group would add a significant order to its backlog, and 2026-28 revenue growth could be roughly ~1-2 pp higher compared to our current estimates. Also, if higher volume also improves operating efficiency, we would be expecting profitability to trend slightly higher and more stable over time. That said, since no binding order has been signed and neither the contract value nor details about the delivery profile have been confirmed, today’s news does not trigger immediate changes to our estimates. We will track the negotiations and update our model once the financial parameters are clearer. The announcement reinforces our confidence in Saab’s management strategic and tactical ability to win important international tenders and supports the company’s long-term growth story in the current geopolitical environment.