RUAG fulfills performance mandate - the transitional phase continues

Net sales of CHF 681 million [+5.3%] and an incoming orders figure of CHF 701 million [+1.2%] contrast with an EBIT of CHF 15 million [previous year: CHF 17 million] and an EBIT margin of 2.1% [previous year: 2.7%].

In the 2022 business year, RUAG systematically invested in the future of the company once again. The research and development expenses, for instance, were increased to 4% of net sales [previous year: 3%]. The investments in combination with the measures to remedy legacy issues, in particular regarding real estate and the IT infrastructure, reduced the com­pany's earnings. Accordingly, the current earnings situation proves that RUAG is in a pio­neering transformation phase. In spite of these cost-intensive challenges, RUAG was able to completely fulfill the defined performance mandate in the 2022 business year.

Key projects and events

In the 2022 business year, RUAG has successfully completed numerous key projects as well as won additional future-proof projects. As a reliable partner of the Swiss Air Force, RUAG thus played an essential part in ensuring the continued airworthiness of the F/A-18 fleet. In this context and within the scope of life cycle extension, subprojects for the review and re­furbishment of aircraft structures were concluded. Moreover, RUAG successfully modern­ized nine Cougar helicopters of the Swiss Air Force. This complex project enables the Swiss Air Force to continue operating the helicopters until the mid-2030s. Furthermore, RUAG re­ceived the order to carry out maintenance work on 22 F-5 aircraft of the US Navy. This far­reaching contract is decisive for preserving key capabilities and is, therefore, of great stra­tegic importance to RUAG.

The new Business Area "RUAG Innovation Organization", in short RIO, launched its activities in the 2022 business year. In close collaboration with the innovation projects of the Depart­ment of Defence, Civil Protection and Sport [DDPSJ, RIO makes a valuable contribution to the development of new, future-oriented business models and activities. To deal with the in­creasing complexity of the IT digitalization in the security environment, RUAG started the C5I program in the 2022 business year. The program's activities focus on a completely digi­ talized sensor compound. In this context, RUAG offers holistic IT integration solutions for all operational spheres in a multi-national compound. Finally, the internal project "Cervino" for harmonizing core processes and introducing the new SAP ERP version [S/4) is in full swing. The introduction is scheduled for 1January 2024.

Award-winning apprentices

The RUAG apprentices participated very successfully in the 2022 Swiss vocational champi­onships SwissSkills and won five medals. This makes RUAG one of the most successful train­ing companies in Switzerland. In the year under review, RUAG employed a total of 219 ap­prentices at ten locations in Switzerland and is thus an attractive employer for young people in almost all regions of Switzerland. Training apprentices is a key element for RUAG to coun­teract the acute shortage of skilled workers. The aim is to provide young people with sus­tainable and future-oriented training and to integrate them into the company in the long term.

Environment and outlook

Despite delivery problems and sometimes relevant price increases, RUAG was able to en­sure the availability of the military systems at the agreed costs. As in the 2022 business year, future-oriented investments as well as the remedy of legacy issues, particularly in connection with the IT infrastructure and real estate, will have an impact on RUAGs' upcom­ing results.

In the near future, three substantial replacement projects for the Swiss Armed Forces are lined up: the new fighter aircraft [NKFJ, the new ground-based air defense system [GBAD) and the telecommunications program [TK A). For RUAG, this means that cost-intensive up­front investments are necessary and the corresponding competencies must be acquired. At the same time, RUAG must maintain the high availability of the F/A-18 fleet until its de­commissioning. In view of the acute shortage of skilled workers and the limited availability of materials, these tasks will remain challenging in the coming years.