“Involving EKN adds value to our offering”

Starting out as a family operation in 1899 in the northern Swedish town of Örnsköldsvik, Hägglunds has moved on to become a thriving branch of BAE Systems, one of the world’s largest defence contractors. Tracked, armoured vehicles used to transport arms and soldiers to the frontline in difficult, largely roadless terrain, are the biggest sellers.

Peter Nygren, Director Business Development, recalls an amazing journey over the past ten years. “The order book has increased from 3.2 billion SEK to 80 billion SEK in five years, while turnover has quadrupled over the past four years. We anticipate that the company will be ten times as large in 2030 as it was in 2020.”

In December 2024, Hägglunds won a contract worth 27 billion SEK for deliveries of combat vehicle CV90 to Denmark and Sweden, its biggest order to date. In 2014, however, the future looked more uncertain. “We were forced to lay off staff and shift to non-military products in order to retain workforce skills despite an empty factory. Trough dedication and a clear strategy Hägglunds bounced back and started to win business again. Success in winning new business triggered further success.”

Moreover, the Russian annexation of Crimea in 2014 brought a growing realisation of the need to strengthen national security in Europe, but the real change came after the invasion of Ukraine in 2022. “Current demand for defence equipment in Europe largely outstrips available capacity in Europe. That is why many companies in the defence sector invest in growth and Hägglunds is one of the most successful.”

Defending freedom and democracy

Around 70 percent of the production is exported and countries such as Slovakia, Czech Republic, Ukraine, Germany, UK and US have recently been added to the list of customers. “Hägglund’s Combat Vehicle CV90 and the All-Terrain Vehicles BvS10 and Beowulf fulfil an important role in defending freedom and democracy,” Nygren says.

Technology transfer is another success factor in winning new business. “We help build industrial knowhow as the final stages of the manufacturing process are transferred to the buyer country, where we help set up production and share skills. Around forty percent of the product value is added inside the buyer country, which is very important from a political perspective in countries that invest in military vehicles.”

Whether export credits and guarantees are used to finance the contracts or not, the support of EKN and the entire Team Sweden – including financing from the Swedish export credit system and the support of the government and industry in general – adds a silver lining to the offering. “Government-backed export credits bring us closer to the customer and put an official Swedish quality mark on the transaction”, concludes Nygren.

Even if most of the customers are government funded defence ministries, budget cycles don’t always match the duration of large defence contracting. In such cases, export credits and guarantees with long durations can help seal the deal, says Nygren: “The state budgets of some governments don’t stretch far enough to permit allocations for defence contracts that may span several decades. In these cases, alternative financing solutions are needed, and a guarantee from EKN can lead to more attractive terms.”

To conclude, Hägglunds have certainly come a long way since its inception as a family business 126 years ago. “We have managed to retain our identity and the sense of pride in our strong brand,” says Nygren and sums up the corporate culture: “Shared values, competitive products, an ability to learn from mistakes and a close cooperation with our customers. In defence, word of mouth is very important.”