Saab Q3’25 flash comment: Another quarter with solid demand and robust execution

Source: Inderes & Modular Finance (21.10.25, 8-11 analysts) (consensus)

Saab published its Q3 report at 07:30 CEST. The order intake, revenue growth, and profitability indicate continued robust demand and disciplined execution across all business areas. Beyond the very strong profitability in Dynamics, there were few major surprises. Management appears confident about the remainder of the year and lifted guidance. The Dynamics margin points to solid backlog conversion and volume absorption, which, if sustained, supports operating leverage into Q4.

Order intake, revenue roughly in line and operating profit continues to show strength

Order intake was 20,861 MSEK, in line with our estimate and below consensus, which still signals strong demand. Q3 revenues grew ~17% to 15,871 MSEK, slightly above our estimate and consensus. Dynamics posted sales of 3,411 MSEK, ~12% year-over-year, below our view and below consensus. The division remains a growth engine with delivery rates at good levels, but order intake was ~50% of the comparison period, which was unusually high. We had expected added capacity to sustain higher delivery rates versus the comparison period; that uplift did not occur. Aeronautics surprised with a higher delivery rate than we expected. The other divisions, Surveillance, Kockums, and Combitech, were roughly in line with our sales expectations and close to consensus.

EBIT was 1,374 MSEK, above our estimate and consensus, corresponding to an 8.7% margin. Dynamics was the main driver with an EBIT margin of ~19%; we expected ~18% and consensus 15%. Profitability in Kockums and Surveillance was also better than we expected, while Combitech was below our view but in line with consensus. Net financing and taxes showed no surprises, yielding net income of ~975 MSEK and a corresponding EPS of SEK 1.77, slightly above our estimate and slightly below consensus. The margin mix points to solid operational execution in core programs across the board.

Management is upgrading the 2025 guidance

The company signaled confidence in the rest of the year by lifting its organic sales growth target to 20-24% from 16-20%. Q4 is seasonally strong, so the upgrade is not surprising, but it raises the question of which divisions will drive it and how broad-based the uplift will be. We expect recent robust execution to persist and will likely raise our growth assumptions to reflect stronger backlog conversion and higher capacity utilization, with mix across Dynamics, Aeronautics, and Surveillance the key margin swing factor. In terms of EBIT growth and operational cash flow guidance, nothing was changed.