00:00Michael, a beat no raise. Market likes that. Stock is up very nicely. The company is clearly humming along very nicely at the moment.
00:09Do you see the kind of momentum that you're delivering at the moment being sustained?
00:14No, absolutely. And that's why we raised our guidelines for the full year as well on the top line side.
00:19The organization is delivering in a very nice way.
00:22And of course, we needed to see that the capacity investments that we've done over the year and the last years before this is now coming into play.
00:31And that gives us the strength to deliver in a much higher pace than we have thought before.
00:37And that's why we are raising our guidance now.
00:39So I'm really pleased with the delivery rate of the organization and the execution of all our projects that we have in the company today.
00:47And we have a huge backlog as well. So that's all about why we have raised our guidelines now.
00:54In terms of pushing forward, you've got a big backlog.
00:59You've told us that clearly there's a lot of interest in buying the product from the company.
01:03Can you just give us an update on some of the contracts, though, that you are bidding for currently, what your outlook is and what your expectations are for further grip and sales?
01:10Well, I mean, we have more campaigns that we've had for a long time now on both the Gripen and the global idea.
01:19Bonally warning. So I we push we put a lot of effort into that now to not only being selected, but also contracting in these campaigns.
01:28So I look forward to that. But it's always a political decision. I have to say that in the end on these big mega deals.
01:35So it's relationships between countries and prime ministers and defense ministers will be involved to decide in the end.
01:43So it's not only about the product as such, which we have great products. It's not questioning about that.
01:49But there's a high intensity also on the campaign side in a number of countries.
01:53And you saw President Zelensky in his delegation coming to Sweden this week and handshaking with our prime minister to support development towards an air force in Ukraine over time where they prioritized the Gripen E, which is great news to us.
02:11So now we can start our planning. I have to say, though, that doesn't mean we have a contract.
02:15There's still a way to go. But it's a good sign of where we need to go.
02:21Michael, can you talk about, you know, you mentioned you have this record high order book.
02:25What does your capacity look like to keep up? Do you see any any choke points in your process?
02:31Well, I think we are investing heavily to continue to grow the company and manage its capacity.
02:38What we are maybe battling a little bit with where we see pain points is, of course, in the supply chain,
02:43which I think is true for many of the defense industries that we have to bring with us the companies that that supports us going forward and also invest in the supply chain to make this sort of capacity growth happening quickly as possible.
02:58So that that is the main thing that we need to have the supply chain and ecosystem of companies going in the same direction.
03:05But that's been quite good as well. But there are pain points, of course, in that supply chain.
03:12Are rare earths a pain point in that supply chain, Michael?
03:17Rare earth is absolutely a concern over time.
03:22If not Europe, U.S., Australia sort of start sort of really getting this in progress and creating sovereign capacities ourselves.
03:32This will become a problem. Of course, we are not seeing any sort of effects as of now.
03:38And we have the majority of the order backlog secured when it comes to these things.
03:43But I mean, of course, I'm concerned not only for the defense industry, but also for other industries.
03:47So we have to get a trade sort of deal together with China.
03:52But we also, of course, need to get Europe and the U.S. and Australia as examples to also get sovereign capacity on this side.
04:01So concern long term, but not right now.
04:05OK, so just to be clear, Michael, you have enough capacity currently to deliver what you need to deliver in terms of the order book you currently have in terms of the rare earths that you currently possess.
04:14So you, it may not be you, I'm assuming this is probably further down in your supply chain, has the material needed to deliver on the product that you have committed to thus far?
04:25Yeah, that sort of, in general terms, if you look at the whole picture, we have a lot of things secured for our backlog.
04:32But that doesn't mean we look sort of into this in many sort of levels now, because you're right.
04:38I mean, this is further down our supply chain and we talk a lot more to sort of the supplier, supplier, suppliers now to make sure that this will be sustained over time.
04:49So that's what's been happening now.
04:51But my view right now that we, the data that I get is that we have secured a lot of this now for the backlog that we have.
04:59But still, with a number of years ahead, we need to have this in place so we can continue to grow.
05:06So it's about, it's about years, not sort of months or weeks that we get into trouble, but it needs to be sorted.
05:14Michael, we've got FCAS, we've got GCAP, we've got the Gripen, we've got a number of different programmes that are underway at the moment.
05:20I, rare earths are another kind of area of interest in this space.
05:23Do you think Europe needs to do more to share?
05:25Do you think we need to be more coordinated in our approach?
05:28Like, what is Saab doing versus what is Dassault doing?
05:31What is BAE systems doing in terms of the rare earth sourcing?
05:34Do you think we need to work together more?
05:36Is there that level of coordination that is happening?
05:39And does there just more broadly need to be more coordination?
05:43There is ongoing stress within the defence space at the moment about who should be building what
05:48and whether or not we're overbuilding and whether or not we've got too much of one product or another product.
05:53Is Europe doing a good job of kind of coordinating the effort to rearm?
06:01Now, my view is that we have to do more together to create scale, but also to share the burden for investments going forward.
06:10It's based upon sort of having common acquisitions between countries in Europe, align requirements, and that can be done.
06:17Industry would support that to work more together going forward if that happens.
06:21But also when it comes to supply chain issues, of course, being the head of ASD, the Aerospace and Security and Defence Organisation in Europe,
06:30I also push for that we now come together as industries supporting and giving our view of what the commission needs to do to secure sovereign capacity
06:41in certain important supply chain issues connected to RE or components or what have you going forward.
06:50That is very important that we have a consolidated view on that and we push for that and we invest in that going forward.
06:57So it is important that we do things more together, generally speaking, in Europe to create more strength and deterrence and capacity going forward.
07:06No question about it. I'm for that and I'm for collaboration.
07:13Michael, just one final quick question.
07:15Have you had any recent conversations with either Airbus or Dassault or what is happening on the GCAP side?
07:23Where are we, do you think, in that process?
07:25You've told me before in the past that maybe you'd be open to talks.
07:29Is there anything recently happened on that front?
07:32I'm just monitoring what's happening on GCAP and SCAP if we do two different big programs to see what happens.
07:39But of course, I mean, to us, I've said that before, to us it's important to retain the systems integration capability,
07:45the OEM capability as a company.
07:47And we are open to do collaboration.
07:49If we can do that and still retain that capacity and capability, we will collaborate.
07:54Or we can continue doing it on a sovereign basis.
07:57But of course, we discuss these things when we meet.
08:00But I'm not saying I'm involved in the GCAP or SCAP.
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