Saab announced it has received an order for two GlobalEye aircraft from an undisclosed Middle Eastern country, valued at 10.1 BSEK, with deliveries scheduled for 2030. In our view, this is a significant order that underlines the competitiveness of the GlobalEye platform and provides solid revenue visibility for the Surveillance division. Because deliveries are scheduled for 2030, we believe the bulk of the financial contribution will come from 2028 onwards. Following the order, we will review our Q3 order intake estimates and broader forecast assumptions across the contract period and beyond to assess whether any revisions are warranted.

Solidifying the GlobalEye franchise

The GlobalEye platform is the flagship product within Surveillance, with only a few direct competitors globally. The 10.1 BSEK order for two aircraft, implying ~5 BSEK per aircraft, confirms in our view the platform’s global positioning and high strategic value. The order is also meaningful from an order intake perspective. It represents ~18% of our estimated group order intake of ~56 BSEK in Q3’26 and ~6% of our current full year estimate for 2026. For Surveillance, the order alone equals ~105% of our current Q3’26 order intake estimate.

Strategically, we believe the order strengthens GlobalEye’s revenue visibility over the short and medium-term and reinforces the franchise as a cornerstone of Saab’s long-term growth. It also supports our view of Saab’s strong position in advanced radar and sensor technologies. Combined with NATO’s intention to procure GlobalEye for its airborne early warning and control modernization program, the order provides further evidence of strong international demand for the platform.

Front loaded cash flow and a meaningful Surveillance boost

With deliveries scheduled for 2030 and revenue recognized over time as costs are incurred, we expect the contract to start contributing from late 2026 or 2027, when early production begins. In our view, this should include ordering key components and starting work on long lead items such as sensors and aircraft structures. Based on our initial phasing assumptions, the bulk of the revenue should land in 2028-30 and could add ~3.3 BSEK of revenue at the 2029 peak, equal to ~2% of group revenue and ~8% of Surveillance revenue. Assuming a low teens EBIT margin, we believe the earnings contribution should be meaningful for Surveillance, although still moderate at group level. The annual impact should also exceed that of the German frigate order, as a similar headline value would be recognized over ~4 years rather than ~7 years.

We expect the cash flow impact to be front-loaded through advance and milestone payments. As an export customer based in the Middle East, the buyer is also likely to have a strong incentive to secure timely delivery. We therefore expect contract-related cash inflows in H2’26 and 2027 to exceed the working capital absorbed by early production, supporting Surveillance’s near-term cash flow.

The surprise matters more than the size

Expectations for Saab are high in our view, but not unreasonable given the market backdrop and the company’s proven ability to convert demand into backlog and backlog into revenue. We also believe this GlobalEye order carries more incremental value relative to its size than, for example, a Gripen order for Ukraine. By the time the Gripen order was signed, it had been discussed for some time, and we think the market had already priced in a meaningful probability of it materializing. By contrast, the GlobalEye order was largely unexpected by us and likely by many investors, not least because it came from an undisclosed customer. Since only the unpriced portion of an anticipated order is incremental when signed, we believe a large share of this order represents a genuine positive surprise.

A large order with a long economic tail

For Surveillance, where we expect revenue of ~27 BSEK in 2026, the ~10 BSEK order equals more than one-third of the segment’s annual revenue base. Assuming most of the order value is booked in addition to our existing Q3 expectations, Surveillance’s Q3 order intake could equal ~70% of the segment’s estimated LTM revenue at Q3.

Any immediate P&L contribution should be very limited, but the order materially strengthens Surveillance’s revenue visibility through delivery in 2030. Over time, we think maintenance, services, upgrades, and other aftermarket revenue should extend the program’s economic value for Saab. Large and complex system orders such as this strengthen our view that Surveillance can sustain a strong margin trajectory, which should also support group profitability. However, with expectations through 2030 already high, we will assess the impact on our estimates and make any revisions by the Q3 report at the latest.

Saab currently trades at ~18x and ~15x EV/EBIT for 2029e and 2030e, respectively. Based on our initial calculations, including the GlobalEye order could lower these multiples to ~17-14x, depending on how much of the order we ultimately determine is incremental to our current estimates. Two or three additional orders of similar size that are not already well-reflected in the expectations could lower them further to ~16-13x. This would place Saab well-below our acceptable EV/EBIT range of 17-20x, making the valuation much more attractive than it is today. Pending completion of our estimate review, we reiterate our Accumulate recommendation and view the order as clearly positive.