Good day, and welcome to Saab's Q4 and year-end report presentation. I'm Merton Kaplan, Head of Investor Relations. With me in the studio today I have Saab's CEO, Micael Johansson, and we have Saab's CFO, Christian Luiga. We will start the presentation shortly, but before we do that, I want to remind you that we will have a Q&A session, as usual, after the presentation, and we will take your questions and answer that. Please don't forget to dial in to the line, and you can also post your questions from the website directly to me, so we will bring them up. Without losing any time, I would like to give the word to you, Micael.
Thank you, Merton, and thanks for joining this call this morning. Let me just jump right into a few comments on the full year report. 2021 was a strong year. We had great successes in the marketplace. We have an order intake of SEK 43.5 billion. This is now a year when we don't really have a number of big ones in that number, but we have excelled, I think, in delivering on small and medium-sized orders, specifically orders up to SEK 1 billion, roughly. That's really good. Another year with a book-to-bill above one. We also continue to grow, which is incredibly important to us. 11%, compared to the reported 2020, and 6.5% if you look at the adjustment for 2020.
Profitability also increases in absolute numbers, and we deliver on our targets, and we have a very good year when it comes to cash flow, with lots of collections, from large milestones, during 2021. A number of good things happened during the year. We delivered aircraft, Gripen aircraft to the Brazilian and Swedish Air Forces. We had a great event in November doing that. We also inaugurated our facility in West Lafayette, Indiana, which will now start to manufacture the T-7 training aircraft. We have strengthened our presence in Germany, and also in Finland, despite the fact that, Finland decided to go the U.S. way when it come to the fighter acquisition. Still an important country to us. That is connected to our multi-domestic strategy, and we are progressing really good in that area.
Of course, we are putting a lot of efforts also in looking at new technologies that will be embraced by us and developed by us in our core areas. Those technologies are related to autonomy, of course, but also connectivity and defense cloud capability. In the cyberspace, of course, we work hard to create capabilities that protect our systems' resilience, but also creating product offers in our portfolio. Sustainability, I will come back to that. It's an incredibly important area when we have accelerated our efforts, and we did join the Race to Zero, among other things, last year.
Looking at the cash flow, of course, our balance sheet has been strengthening during the year, which is really important to us and the proposed dividend for this year is now SEK 4.90 by the board. That's sort of covering the year. Q4 , a few comments on that. A good quarter, solid. Good order intake despite the fact that we didn't have any large ones. If you look at 2020, we had a big one coming in on the GlobalEye in Q4 2020, and that's why it was really big last year. This is a really solid quarter when it comes to order intake.
Also on sales, high level of sales, high activity, and a good margin also, and a good cash flow. Looking at the full year, this quarter contributes to a solid and strong 2021, and we have a more even year when it comes to how sales development has been in certain business areas compared to 2020. Still, very good quarter four. Looking at the market and orders, I'd like to say that, of course, the unfortunate geopolitical tension that we see and the security situation related to Europe and Ukraine is unfortunate. It does impact a little bit of the discussion on short-term capability development, and of course, we come into play because we have a big portfolio. We have things off the shelves when it comes to sensors.
We have capability to deliver ammunitions to shoulder weapons and missile systems, and strengthening availability of our systems, and increased support and services, of course, related to our systems in the marketplace. There is a tendency to look at short-term capability growth, which is affecting us in the discussions with different end customers. Also, some discussions on priorities, short versus long term, is taking place, which eventually involves us in what we can deliver more short term. The trend is continuing when it comes to the defense budgets. They are increasing all over the place, and we have an international presence, which is good for us. We continue to grow internationally, but also supporting Sweden, of course, in their growth. The defense part of the business is strong, as I've said.
The demand in the civil aviation business is still weak, and I think it will be a slow recovery before it actually comes back into higher volumes when it comes to the Aerostructures business on our side. We do as much as we can to sort of cope with that as we speak, to be as efficient as we can, but I think it's a small portion of our business, so it doesn't affect us much. But it's still weak, I just want to mention that. A couple of examples of orders during this Q4 is equipment contracts on the Gripen E for Sweden and also an extension of an upgrade of the contract for the Hungarian Gripen C/D fleet with what we call the next edition of the software for that aircraft. We're increasing the Hungarian capability.
Also on the sensor side, we have had a couple of important contracts, a launch contract for the newest radar, the Giraffe 1X, which I will come back to, a little bit of a deep dive to that, for short-range air defense applications. For Dynamics, the attractiveness of Dynamics products is still very high, so they had plenty of orders from different customers on that side. Of course, I need to mention that I am disappointed when it comes to the selection by Finland to go the U.S. way. We had a very strong offer. I still stand behind that. The team made a great effort to win that contract, that would have created an even deeper relationship between Sweden and Finland industrially as well, of course. We have to respect the decision.
We still stand strong going forward, and that an evidence of that is of course our order intake, increasing our backlog despite of this. We have several opportunities going forward also on the Gripen side. Everything comes to politics sometimes, and this is not only about having a great product. When we look at the different business areas, now four of them, as you know, since we changed organization back in mid-last year. Couple of highlights on the Aeronautics side. We have been down-selected in Canada for the Gripen campaign, which is excellent.
We have proven to be viable to go forward when it comes to affordability, capability of the system, but also that we can have a Gripen system within the security context of the Two Eyes and Five Eyes context and the NORAD, which is excellent. We are waiting now to see which the next step is for Canada as we speak. As I mentioned, we have started the delivery phase of the Gripens for both Sweden and Brazil, but we also have sort of a phase when it comes to the training aircraft, T-7 in Aeronautics, where we are sort of finalizing the industrialization phase, and we are approaching now to go into production.
This has been sort of a slow 2021 when it comes to activity on the T-7, but that will of course improve, and it's a great case going forward. On the Dynamics side, extremely good favorable market position, several contracts during the year and in the quarter. We grow a lot in Dynamics, and they show great margins, as you can see. They have a more even spread now in terms of how their sales looks like during the year, which I think is good, so we don't have that big variation. But they come out strong for the full year, as you can see when it comes to margin as well, almost at 13%. Surveillance, they have a very strong backlog, almost SEK 30 billion in backlog.
We have a good decision from the Swedish side during the quarter to start acquisition of the GlobalEye. We made our offer, and we started our negotiations, that is of course tremendously important to have GlobalEye in Sweden as a reference customer, and it is also an important force multiplier for the Swedish Air Force. We have improved our performance within surveillance in a couple of business units and the radar side of the business is doing great as we speak, and they provided lots of good cash flow for the full year because they have big milestone payments related mainly to GlobalEye. We are still struggling a bit with traffic management on the air traffic management side.
Also that has been affected by the pandemic investments on that side. We're doing good progress, and we have a great offer now with, our remote tower system, but also the digital tower systems that we provide to many customers around the world. That will improve going forward. On the Saab Kockums side, we have had a few, well, quite a few actually, several, small and medium orders. We have had a design contract for a country on the naval side, which I can't really talk about which country that is, and a number of other small orders. They have improved a lot over the year.
Also on the margin side, they had a really good quarter because of high activity within the submarine area, related to our newest submarine, A26. On the market side, of course, the focus is to try and win the Dutch campaign on the submarine side, which is called the Walrus. That's a few highlights from the business areas. Just a couple of comments and words about the capability. I normally do a slight deep dive in certain areas.
Our newest development, which is really a digital software-driven sensor, which creates situation awareness in many different applications, has now come into the marketplace, and we've sold this to a few customers now, and it will be a very cost-efficient way of creating situation awareness, both within the military field, but also to protect infrastructure. This can be connected into a network, of course, creating a complete situation awareness picture, and it has an agility when it comes to being connected mobile-wise to air defense systems, or you can have it fixed, of course, to the different infrastructures. Or you can have it on ships and boats and several different platforms. It's very agile in that sense, and you can update it in a very simple way to create new functionality with software and not hardware driven.
This is a multifunctional type of system doing surveillance and also acquisitions of potential targets at the same time at good distances, long distances going forward. Specifically, it's very adapted to find small drones in very difficult environments. You see a picture here of a flock of birds with small drones within that flock, and this radar can immediately pick out which is a bird and which is a drone that can be a threat to something. This is something we provided into the marketplace now and a good sign of how we develop technology with new capabilities involving AI and software-driven functionality. I just want to mention this. This is going to be a success in the marketplace, I am sure of that.
We have, as I said, accelerated our sustainability work, and we have now consolidated a sustainability strategy. We build that, of course, on the UN development goals, where we are sort of working with several of them. We have put our focus into a few areas. One is, of course, responsible business, which is absolutely super important to us. Anti-corruption, we have zero tolerance. We have extreme strict processing. I think we are market leader in that area. We have now also adopted a responsible business policy, responsible sales policy, I should say. Environmental aspects of the sustainability part is as important to our industry and us as any other industry. We signed up to Race to Zero last year in this quarter, and we're going now to work to set scientific-based targets during 2022 and report in this framework going forward.
You will see how we limit and we reduce our greenhouse gas emissions as anyone else working in that area with Scope 1 and 2 and eventually also with Scope 3. I just want to underline that this is super important area to us when it comes to environment. Of course, innovation and technology is part of sustainability as well, which we are really forward-leaning doing that. Basically, what we do as a company is to provide equipments and systems that protect societies and people and protect borders. This is the foundation for sustainability in my head and so important to remind ourselves about.
This is something we communicate now to make sure that people understand this, and not the least connected to what we see in Brussels, where they work on this taxonomy and now the social taxonomy. I get a bit concerned and frustrated to see that there is a tendency to classify our type of business as being socially harmful as it has been stated. I hope this now is not going to go through the political decision chain, of course, because we stand for something where countries have decided in a democratic way that there is actually new political tensions, there is a need for defense capabilities. We have to have a defense and a proper security policy.
Then you have to have companies, serious professional companies, delivering equipment and systems to our customers, and that is what we do. That is an incredibly important foundation for sustainability. It is as important to us also to explain to people how it works with sustainable finance. We do need to be an industry that can attract capital in the same way as other businesses, and we stand for something that is important. I urge us to communicate more properly, which we'll continue to do, but I also want sort of investors and financial institutions to not make a too shallow analysis of what we actually do as a company. This is important to us. My last slide for now, focus going forward.
We have six lines of actions in our strategy to continue to deliver in our core areas, and we have a backlog of SEK 105 billion. To do that in as an efficient way as possible, improving our profitability continuously, is very important to us, and we can do that. We have a good trend. We have many large programs, and we must continue to deliver on those. But at the same time, we will continuously grow this company. We will have to invest in innovation and new capabilities. As I mentioned, autonomous systems and connections and collaboration with manned systems in the air domain, in the naval domain, will be incredibly important to us going forward in our portfolio.
Also these distributed sensor chains that I mentioned connected to Giraffe 1X and connectivity and proper secure defense cloud capabilities so that the different domains in the defense areas from the air domain to the naval domain and the ground domain can communicate and get the same information and have the same situation awareness picture is going to be capabilities that we put a lot of efforts into in the into the future. As I've just mentioned, sustainability and our agenda and commitment to society will be really high on our agenda. This is more from a strategic perspective. Very shortly, lastly, our outlook for 2022, we will continue to grow in line with our long-term target of 5% over a business cycle.
We will continue to improve our profitability in the range of 8%-12%, compared to last year. This is now a new way of guiding, but much connected to the trade-off between connected to our growth, of course, but also a good way of governing our organization in terms of trends of improving our profitability. Our cash flow will continue to be positive, however, it will be on a lower level than 2021 as I see it and what we see right now. We have started to generate great cash flows, SEK 3.3 billion last year, 2021, and a very strong 2020. That will be the future to deliver positive cash flows. It will vary a little bit from year- to- year.
We stand behind our long-term targets, so that has not changed, continuously growing as a company at 5% over the business cycle. We have not changed our long-term target of reaching 10% at least over a business cycle when it comes to profitability. We just sort of reiterate also our equity asset ratio of exceeding 30%. With that, those few words, if not few, many, I will hand over to my CFO, Christian Luiga.
Thank you.
You will get the control here as well.
Thank you very much. I just want to reiterate what Micael said that this is a strong year, and the Q4 was one part of that strong year and helped us to deliver on our promises and our outlook. If we step in first on the order backlog, it is a positive year. We increase our orders with 3%. We have a Q4 that is impacted by the GlobalEye previously. But if you look over the year, we are growing. Meanwhile, we also grow sales, and still we get our order backlog to increase with 5% up to SEK 105 billion. Interesting is that the Swedish and European business has been very strong this year.
Sweden is growing with more than 17% in orders, and Europe very much driven by one of our new focus countries, Germany, is growing above 65%, and that will help us going forward. The interesting part of this picture is that the backlog to sales conversion for 2022 or for the coming year has increased with 8%. That is, of course, gonna help us delivering on our 5% revenue growth target for next year. The financial summary for the year, EBITDA grew with 13% on a like-for-like comparison, which is important. If you look at the EBITDA growth in margin, it also grew on a like-for-like.
That is not stated here, but it did grow also on a like-for-like basis. Then the EBIT margin like-for-like came out 7.4% as last year. In this, we have an increase of depreciation between EBITDA and EBIT of SEK 420 million. That means approximately 1% increase or taken away from the EBIT margin this year. Still we manage to increase or be flat on the EBIT margin. That means that we have increased gross margin and got effects from our growth into our earnings. Next year, we estimate the depreciation and amortization to not grow that much. It will be much more in line with the revenue growth than it was this year, and that should give a support to our earnings growth target of 8%-12%.
Finally, I want to just remind us that we have not done any adjustments to the 2021 numbers, but in those, we still have SEK 167 million that we have declared was related to the closure of one of the production plants in Barracuda, which was in the U.S., but also right-sizing measures when it comes to reduction in force. If you look at the sales per business area, starting with Aeronautics, it is hampered, and it is having a tough time on the civil market, as we've said, and it still is a bit negative. The Gripen business is actually growing. There we have both the Gripen E, the Gripen C, D, and also supporting services around these that is helping up the growth.
As we know, we are slowly ramping up the production of the Gripen E programs into Sweden and Brazil. In Dynamics, we have a much more even sales in 2021, and this is something we declared already last year that we will see a much more even dynamics over the year. Five percent negative should not be seen as something negative. It should be seen as a positive that we have 14% growth in Dynamics over the year. In Surveillance, we had a very big hockey stick in Q4 in 2020, and we had the follow-on order on the GlobalEye that made this happen. If we take away the GlobalEye business both this year and last year, Surveillance is growing with actually high single digits.
It is a positive rest of the business there. GlobalEye is of course also a positive business, but it will come a little bit more in chunks and still very good margin. Kockums is driven by good performance in submarine, but it is a special quarter a little bit. The production, of course, in that program and all the other medium size and small orders that we also received in Kockums is helping up the growth. Combitech is growing, and I'll come back to that. Interesting to see is this picture. This is an important picture for us internally and hopefully for you also externally.
This is the historical pattern, and here we can see that we have proven to have a sales growth of about 5% for the last four years and we expect also to have 5% forward, not only for next year but also over the business cycle. That is, of course, a fundamental piece of growing the shareholder value, growing the strength of the company and making us more important and also growing shareholder value. On top of that, we need to improve also our performance, our efficiency, and we need to get a little bit more out of the earnings than just revenue growth, and that's why we also look at the development of EBITDA.
We need to do sound investments, and that will create depreciation, but those business cases we need to follow very carefully, of course. Here we can see that we had a dip in 2020, very much related to the pandemic situation, and now we are back on track, and we should continue to drive this curve upwards on both these elements, metrics. The EBIT and EBIT margin per business area, it is very difficult, not because of this year but because of last year, to understand what was the real adjusted numbers and not. But I would like to say that the year and the quarter has been impacted by both the civil market and T-7 from a negative impact point of view.
It is somewhat better in some of the parts from our work and stabilizing both the performance but also the cost structure of our business in Aerostructures, et cetera. We have a negative impact in absolute numbers. Still, we have a 7% margin in Aeronautics, and it comes from the good development in the Gripen business. Dynamics is on a high level, somewhat lower than last year, which was a record quarter, but it also comes from the lower sales and more even sales in the year. In Surveillance, we have a big impact on the EBIT margin from the development of sales. As I said, GlobalEye was quite large in the quarter last year.
The only thing on Kockums, we have reported numbers between 5% and 6% during the year, and it has been steadily growing, and now we come out with 10%. This is not a new benchmark for where we are actually running at this point, but we have a quarter that is impacted by project results. We are still growing the margin slowly from our performance increase and the revenue increase in Kockums, but it is from that 6% level rather than from the 10% level, and you should see that continue upwards next year as well. Combitech, a couple of things about that. The year was coming out on a weaker note in the last quarter, but despite that, we had a growth of 10% for the full year.
We grew EBITDA with 11%, and that is also leading to an EBITDA margin improvement. The fun thing with Combitech and what is interesting is that we are growing in very important areas for our civil customers, and that is cybersecurity, digital transformation, smart manufacturing, and in connectivity. If we look at our key civil customers, we are growing close to 10%-15% actually right now with those. That is a very important market for us going forward. One of the tough things, of course, in this market right now is to secure that we retain and recruit competencies so we can deliver on this fantastic growth. Cash flow. We guided on a positive cash flow for the year, and we did deliver that.
We had several good inflows in the end of the year. It came out a touch better maybe than that we expected, but was a great year from a cash flow point of view. As you all know, cash flow in our industry, also in Saab, is impacted by larger milestone payments. What we have said is now looking ahead is that we will still continue to be positive, but compared to this great year where we had 135% cash conversion, it will be a lower level for the next coming two years, and then we expect it to come back up higher.
That is actually something we estimate and assess based on the milestone payments we can now see that we have in our projects. We have also built, and it comes back to the securing our ability to deliver, it's more on the margin than it is a big chunk, but we have built a bit higher inventory during 2021 than we maybe should have done in a normal sort of year. That comes back to securing that we can deliver on our projects and not be too dependent on shortages or difficulties in transportation. With the strong cash flow for the last two years, we have improved our net debt to EBITDA and but it also comes from an improvement in the EBITDA.
It's not just coming through cash, it's coming through also our improvements in our operational result. Now we are at a strong 0.44x and I feel that with that I can really say the statement that we have a strong good position when it comes to our balance sheet. We have a maturity of SEK 1.4 billion for the next 12 months, and we look forward to talk to our financial investors about how to refinance that.
We have a strong equity asset ratio and the board has proposed to the AGM to increase the dividend with 4% to SEK 4.90, which is a payout ratio of 34%, and we have guided that we should be over a cycle between 20%-40% to net income in payout ratio. Finally, Micael has mentioned and explained our outlook. This is a change in our EBIT guidance when it comes to metrics. We have changed it to better align with how we challenge the business internally, but also better to align with the EBIT growth and earnings growth over time.
That said, it should be no mistake that we are very keen, and we know that a good company needs to have an improved EBIT margin, and that's why we keep our EBIT margin long term, and we are very committed to that. Another comment is, of course, that if you have a higher number on EBIT improvement, growth, compared to organic sales growth, that implies that we are going and having an aim and target for a growth in EBIT margin as well for next year. Cash flow I have talked about, so I leave that and hand over to you, Merton.
Thank you very much, Christian, and thank you very much, Micael. We have a good time to open up a Q&A session here, and I believe we have the moderator live on the line as well. I would like to remind everybody to, if you have questions, please dial in and, put yourself on the line so you can, ask your questions, and please do so two questions at a time. We have received some questions here on my iPad as well, so we'll take those, later. Yes, please, the moderator.
Thank you. If you do wish to ask question by the teleconferencing platform please press zero one on your telephone keypad. If you wish to withdraw your question you may do so by pressing zero two to cancel. The first question comes from the line of Ben Heelan from Bank of America. Please go ahead.
Yeah. Morning, guys. Thank you for taking the question. The first one I would have would be on M&A. How are you thinking about which areas and which geographies do you see potential M&A and kind of how you're thinking about the strategy there? Then the second question would be on the cash flow. Is there any more color that you can give on how we should think about the cash flow in 2022 and 2023? Is it going to be significantly below? You know, are we talking below SEK 1 billion? Are we talking below SEK 2 billion? Just, is there any more color that you can give us, I mean, how you see the cash flow playing out over the next couple of years? Thank you.
Thank you. Let me start with the M&A question. I mean, we have a number of focus countries, I would call them, like U.S., U.K., Australia, and Germany within EU, apart from Sweden being an important country in EU, of course. I would mainly say it's in those countries we look for options of growing also by acquisitions. We want sort of an acquisition to add value to either the market penetration as such, or it could add to our portfolio, of course, or to our general capability. Of course, we have a few things in the pipeline that we're looking at. Nothing that I can talk about, but it's definitely on the agenda continuously for us to look at those options and important to us apart from also growing organically.
Kind of a generic answer, but very high on the agenda for us. Cash flow-wise, I think we guide on saying it's lower. We've had exceptionally good sort of conversion now and cash flow years, 2020 and 2021. Of course, we want to have that as high as possible, of course, but I don't want to speak about the number as such. I'm not, however, whatever that sort of c reates confidence in that we are very confident that we will generate positive cash flow. Positive is positive, of course, not sort of close to zero. Do you want to add something?
Okay.
No, I'm sorry, we have to leave you in the dark there like we did last year. It fluctuates, and then we try to sort of narrow in where we can, we can feel comfortable and express that and I think Micael put it very well. We feel very comfortable with the statement that it will be positive, but we don't wanna go further than that at this point.
Okay, great. Thank you.
Thank you, Ben.
The next question comes from the line of Mikael Laséen from Carnegie. Please go ahead.
Good morning. Thanks. My first question is about the EBIT growth guidance, 8%-12% for 2022. Can you explain a bit more in detail why you have this range for the first time and the operating leverage? What are the swing factors at the high and low end in that range?
Well, let me start by saying reiterating a bit what Christian say in terms of how you create the mindset and governing our business. I mean, you have different starting points in parts of our business, and we don't give guidance on that level, of course. It creates a better drive on the trend of improving your earnings in all parts of the business. That's a very important part in changing this. How we put the range is, of course, in connection to how much we can grow, and that will still generate a good trend on specific EBIT margins as well, going forward into 2022 and onwards. Do you want to elaborate more, Christian?
No, what I would like to say also, maybe you don't believe us because we were so spot on this year, but this business comes with, as we've said, and we've seen, larger deals that can come through and impact both revenue and earnings extremely positive, but also on the margin sometimes, not negative, but lower the average. You could get a very good order at a lower margin in the end of the year and the opposite that you want to bring in. That can happen easily in this business. Therefore, it is necessary to have a range to cope with that. The range is still, in all its elements, a positive journey on EBIT margin, in our outlook for next year.
Okay, got it. Also if you can say something about the seasonality in 2022. It was a bit more sort of even in last year. Will it go back to be more back-ended loaded again or be more even as it was in 2021?
Well, I mean, we hope seasonality will continue to call it improve or be more even. Depends on how you, of course. I don't say one is better than the other for certain reasons, but it is better for us to have a more even delivery and production. We don't foresee it's going back in this year. And that said, we have maybe the luxury of getting some large orders and that could impact, so you never know. If it does, then it's from a positive note than not from a negative note.
Okay, thank you.
Once again, ladies and gentlemen, if you would like to ask a question, please press zero one on your telephone keypad. The next question comes from the line of Sash Tusa from Agency Partners. Please go ahead.
Thank you. Good morning. I've got two detailed questions just about the net income. The tax rate in Q4 was significantly lower than in Q3. Is 21% your ongoing working tax rate, or was there a particular issue that kept that low? The second issue is could you just describe what the minorities relate to and how we should think about modeling those going forward?
I can answer that the tax rate around 21% is where we believe you should calculate with going forward. On the minority, I think we should come back on that, Merton. I don't know. I don't have the answers here right now.
Okay, thank you. If I could ask a broader question. I missed some of what you said initially about civil aerostructures. Airbus is clearly raising aircraft production rates. Boeing not so much. It's taking some time for that to feed through to your business, which would imply that Airbus is using up stock held internally at the moment. Do you have any sense, clearly not visibility yet, as to when Airbus's internal stocks might run out, and therefore when you might start actually seeing the benefits of their production rate increases?
Specifically, I don't know exactly when. However, we have seen that there is a tendency of sort of a few guidances from Airbus and Boeing per year, and the recovery has seemed slow. We don't build our sort of forecast on a rapid recovery, and we look at forecasts in terms of when they will get back into delivering aircraft and so forth. It's not that it's just because we now see restrictions going away and flying has started to go back to reasonable levels that we immediately get sort of an upturn. They don't up our volumes immediately. That takes some time. It's really difficult to say.
I don't see that we will recover immediately this year on that. This is not a big portion of our business totally, but I would be happily surprised if that happens, of course. Meanwhile, we'll just do it as sufficiently as we can. If it happens this year, I'm really happy about that of course. Really, it's taken sort of a couple of years before they actually return to something. When they get out of stock, I don't really know, but we continue to try to find out, of course.
Just if we would get an answer tomorrow, pick up the volume, then it's a lead time on that as well. It's not like the next day we go in and build the double number. So-
There is some uncertainty as you hear around this, but it's slow recovery.
Okay. Thank you very much.
Thank you, Sash.
Once again, ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad.
Maybe we should take a break from the line and I have received some questions here from the website from some of our listeners in and I think there's a couple of interesting questions. One relates to the T-7 business and the potential of this business. Again, could you remind us, Micael, a bit more what we expect from the T-7 when those orders come in both in terms of our production and but also financially, what's in terms of revenue and profitability, how would you see that?
Well, in terms of timeline, we have now been during 2021 in a finalization phase. We're still a little bit in that, in the industrialization of this T-7 aircraft, the trainer. We are moving into low rate initial production phase, and then back in, I mean, 2023, 2024, that will start to ramp up into full rate production. We are a little bit sort of in between right now, before we see revenues picking up. We think that this year we will start sort of long lead type of things and production in our facility in West Lafayette that we inaugurated last year. But it will take some time before the volumes ramps up to higher levels.
I mean, we can remind ourselves about that this immediate option that the Air Force in the U.S. can sort of start with us is 350 aircraft, which is quite a lot. The business case is a lot bigger than that, according to Boeing. This is going to be great business going forward. But exactly how that will sort of move up over time, I don't wanna sort of give numbers on that. But it, we are going into now the production at a low rate, which is good to us. We move out of industrialization. Very important program to us, will be done completely in the U.S., good supply chain set up, and I really look forward to having this as a great foundation for our business going forward.
Good to hear. We have another question, related with the current environment that we are in. Could you specify a bit the geopolitical situation in Europe right now? How is that affecting sales? Is it about additional sales or, is it about speeding up the delivery schedule? This is one comment we got from one of our viewers.
I think it's a little bit of both. I think definitely there are customers now looking at sort of how can we quickly improve capability in terms of better stock on ammunition, our shoulder weapons missile system, but also creating better situation awareness by applying our sensor technology. Those things we can support and deliver very short term, and that may improve our sales, absolutely. Also they take a little bit of a longer look at things to see, okay, if we provided a defense bill over five years, do we need to rethink that, reassess the priorities in that, which may change sort of the profile of the defense bill.
I don't know anything about that, but of course, we know from media and discussions that they sit down and reassess that in our country. We, of course, defense forces will do training and exercises on a much higher level, which affects the need to use our equipment in terms of training and simulation equipment, but also the services and support of the systems that we deliver will increase. Yeah, unfortunate, the situation is unfortunate when it comes to the security situation. It will have effects on our business in terms of higher activity both when it comes to products, I think, and support and services.
Good. Thank you very much. Moderator, do we have more questions on the line?
Once again, it's zero one on your telephone keypad to register for a question.
Perfect.
It seems there are currently no further questions.
Okay. I have one more question here, which is an interesting one, from FlightGlobal here, asking, "With politics playing a role in fighter decisions in Finland and Switzerland last years, do you have any confidence now that you might get a different outcome in Canada?"
It's a very good question, a very difficult question to answer, of course. The only thing I can say is that, as I mentioned, I mean, we had a great offer to Finland in all aspects. I don't see how we could have sort of done it better than we did. We know that, security politics and political assessments comes into play in these big decisions. They do take sort of important decisions for a long time going forward. Of course, commitments between countries are extremely important in these decisions. You never know, depending on timing, what is the political situation? What are the relationships? What is important when it comes to politics right then and there when the decision must be taken?
There are different things comes into play, is my view, and it's extremely difficult to predict how that looks like. We can only do what we're best at, delivering great proposals and we give countries also sovereign capability. That is a key point. We transfer technology, we set up shop in countries for aerospace centers and capability to manufacture and further develop our system because we have that type of open architecture, and it's a win-win to us. We offer great things and that is a trade-off versus sort of relationships between countries.
You expect to hear something from Canada when? This year, hopefully?
Yeah. We're really happy to see that we are down selected, and we're one of two. We have sort of a clear answer from the Canadians that we have passed sort of certain requirements and affordability, capability, and also the security requirements when it comes to actually having our system working interoperably within the Two Eyes, Five Eyes, and NORAD context. That's great. We're now waiting for the next step from them.
Thank you very much and thank you, Christian, for being here today. With that, I think we are done with the presentation and the Q&A.
Thank you.
Thank you so much.