Sweden's Saab raised its medium-term sales growth target on Thursday as European defence companies continue to benefit from a surge in government spending.
Facing a reduction in US support under President Donald Trump and Russia's invasion of Ukraine on its doorstep, Europe is ramping up spending on its military.
Saab, whose products range from Gripen fighter jets and submarines to missiles and advanced electronics, reported a 67 per cent year-on-year jump in fourth-quarter operating profit to SEK3.26 billion ($362 million), beating analysts' average forecast of SEK2.75 billion in an LSEG poll.
It also raised its organic sales growth forecast for 2023 to 2027 to 22 per cent from 18 per cent.
"We have had much stronger sales for the first three years of the target range and for the remaining two years this implies an average growth of around 20 per cent per year," CEO Micael Johansson told Reuters. Saab shares were up 2.8 per cent at 08:23 GMT.
They have gained 21 per cent so far this year and more than tripled in value in the last 12 months. The board proposed a dividend of SEK2.40 per share for 2025, up from SEK2.00 a year earlier.
Order bookings amounted to SEK100 billion in the quarter and the order backlog stood at SEK275 billion, up 47 per cent from SEK187 billion at the beginning of 2025. "We've had continued very strong sales but then we have also had some larger orders in the quarter which is driving up order intake to these high levels," Johansson said.
During the quarter, Saab received an order for the completion of two submarines worth SEK9.6 billion.
(Reporting by Johan Ahlander. Editing by Bernadette Baum and Mark Potter)
