Investing.com -- Saab's (ST:SAABb) third quarter order bookings surged 41% to SEK 21.2 billion, driven by strong Dynamics division performance, including a SEK 6.6 billion defense systems order and a SEK 1.3 billion MSHORAD contract for Lithuania.
However, shares of the company traded lower at 4.2% at 09:10 ET (14:10 GMT).
Saab's organic sales growth was recorded at 17.4%, with total sales for the quarter amounting to SEK 13.5 billion, up from SEK 11.5 billion in the third quarter of 2023.
Operating income grew 38% to SEK 1.2 billion, with an improved operating margin of 8.8% compared to 7.5% in the previous year, reflecting growth across all business areas, including Dynamics, Surveillance, and Kockums.
Increased sales volumes and successful project completions, particularly in the Surveillance division, drove the 38% increase in operating income.
Cash flow improvements were a highlight, with operational cash flow reaching SEK 3.2 billion, a notable recovery from a negative SEK 2.1 billion in the third quarter of 2023.
This was primarily due to increased customer payments. However, the company also saw an increase in inventories and continued investment activities, reflecting its focus on scaling production to meet rising demand.
Saab is expanding its global footprint to address heightened defense needs, with investments in new facilities like the Michigan production plant for munitions and expanded capacity in Sweden for Ground Combat products, including the AT4 and NLAW.
The Swedish aerospace and defence company’s order backlog reached SEK 190 billion, supporting future operations. The company anticipates 15-20% organic sales growth in 2024, with operating income growth exceeding this rate