Highest priority for orders of the Swiss Armed Forces

The recent changes in security policy are having a major impact on the current market. They also prompted the Swiss Armed Forces to draw up a strategy paper adapted to these changes.

The paper entitled “Die Verteidigungsfähigkeit stärken” (“Strengthening defense capabilities”) outlines the three strategic directions in which the Armed Forces want to develop. Based on this, the Armed Forces launched a wide range of initiatives.

The Logistics 2030 program and the establishment of the new cyber command “Kommando Cyber” to better cover needs in the cyber, electromagnetic and information space are particularly noteworthy. In both areas, RUAG fully accomplished its main mission of supporting the Swiss Armed Forces and will continue to work in close cooperation with its main customer to achieve the objectives.

In addition to supporting these strategic areas, RUAG will continue to ensure the availability of the Armed Forces’ various systems. In 2023, RUAG once again demonstrated its reliability as center of excellence, despite relevant challenges in the global supply chain in the wake of the Covid crisis.

Fulfilling its role as center of excellence will remain the central focus in the future. This is why the 2024–2027 service level agreement drawn up jointly by armasuisse, the Armed Forces Logistics Organisation and RUAG is of key importance. It defines the services to be provided to the Swiss Armed Forces in the context of the maintenance of around 130 systems.

KEY TOPICS IN RELATION TO OUR MAIN CUSTOMER

F/A-18 value preservation

The F/A-18 service life extension is key to the operational readiness of the Air Force. The different levels of ageing of the individual aircraft and the combination of service life extension work with standard maintenance – Switzerland is the only nation in the world that combines the two – has led to
unplanned delays. With great effort and the support of the Air Force and other DDPS agencies, RUAG has found solutions to ensure that sufficient aircraft were operational at all times during the year under review.

ADS-15

As part of the launch of the new ADS-15 unmanned aircraft, RUAG developed the detect and avoid system – a milestone for the future of the company. Detecting obstacles in the air and then automatically avoiding them is a major innovation that can massively reduce the risk of collisions with other flying objects. In 2023, the development was driven forward and tested under realistic conditions.

Armored personnel carrier 2000 value preservation

The service life extension program for the CV90 armored personnel carrier was launched at RUAG in November 2022. By the end of the 2023 business year, the work was completed and 41 vehicles were handed over to the general contractor, BAE Hägglunds.

The services provided by RUAG included the implementation of measures to extend the service life of 186 CV9030 tracked vehicles in four different configurations. These measures comprised the installation of a new auxiliary power unit (APU), the SMW modification (shoulder-launched multipurpose weapon), scheduled work packages, planned or unplanned repairs (e.g. welding on the chassis) as well as other comprehensive services such as the establishment of a center of excellence.

Replacement of the Integrated Military Telecommunication System (“Ersa IMFS”)

Ersa IMFS is the core network for secure data transmission used by the Swiss Armed Forces and thus the backbone of new communication and digitalization. The most important milestone in 2023 was the commissioning of the procurement preparations. RUAG plans to complete the procurement preparations in 2024 and to seamlessly transition to the series production.

COBRA mortar

In 2023, the contract for a second tranche of 16 COBRA mortars for the Swiss Armed Forces was concluded. Here too, RUAG is acting as a subcontractor to GDELS-Mowag.

THIRD MARKET

Once again, RUAG was able to build on a stable, loyal and long-standing customer base in the life cycle management business in the international market. Moreover, RUAG succeeded in holding its own against the global competition in various WTO tenders.

Selected highlights from the 2023 third-party business

RUAG has maintained and upgraded the Super Pumas / Cougars of the Slovenian Air Force and the German Federal Police. The contract was won via the NATO Support and Procurement Agency (NSPA).
RUAG significantly contributed to the successful general overhaul of the F/A-18 fighter aircraft of the Royal Malaysian Air Force. The F/A-18 fighter aircraft undergo a comprehensive general overhaul approximately every twelve years, a so-called “local planned maintenance program”, or LPM12Y for short. RUAG initially supported the project mainly in the form of methodological know-how transfer. In a second phase, RUAG was responsible for providing highly specialized engineering services. This project allows RUAG to achieve direct synergies and added value for the Swiss Armed Forces.
RUAG has won the first order for its detect & avoid system on the international market.

Outlook

For 2024, RUAG expects an accentuation of trends and developments that may have a direct or indirect impact on the international business:

Original equipment manufacturers (OEMs) are increasingly interested in the aftersales market, but due to high demand they have limited resources for setting up and expanding their own services.
In light of the current wars and conflicts in Eastern Europe and the Middle East, as well as the shift in geopolitical power relations, new budgeting priorities can be observed among customers.
Demand generally remains stable at a high level, especially for well-positioned and tried-and-tested portfolios.
RUAG continues to anticipate strong demand from civil security authorities. In this regard, the trend is increasingly moving towards digital products.
The unclear development in connection with relevant export controls is causing uncertainties.
The temporary liquidity bottleneck of the Swiss Armed Forces could potentially have a negative impact on RUAG’s order situation.

SUITABLE TOPICS FOR FURTHER READING