Net sales of CHF 647 million (–5%) and an incoming orders figure of CHF 693 million (–4.1%) contrast with an EBIT of CHF 17 million (–43%) and an EBIT margin of 2.7% (previous year: 4.5%). The lower figures can be traced back to various causes. Sales have ceased for subsidiaries that have been sold in the meantime and budget cuts by the DDPS have led to further reductions. RUAG is systematically investing in the future of the company. In 2021, research and development expenses were increased to 3%. To further improve process efficiency, a project for harmonizing core processes and the introducing the new SAP ERP version (S/4) was started. In the real estate business of RUAG Real Estate Ltd, measures for the remediation of legacy issues, as well as making up the repair deficit, represented a burden on results.
Key projects of 2021
In the past year, RUAG won the public tender for the replacement of the Integrated Military Telecommunication System “Ersa IMFS” of the Swiss Armed Forces. In addition, the new site for maintaining the Swiss Armed Forces’ fleet of F/A-18 fighter jets at the military airfield in Payerne was successfully put into operation. Last but not least, RUAG won an order as part of the “immediate operational requirement initiative” and was commissioned by the German Bundeswehr to supply 55 interoperable communication solutions based on the Tactical Access Node (TAN) device type.
As a sustainably oriented company, environmental aspects also play a key role. Since February 2021, all of RUAG’s power comes from renewable resources in Switzerland as well as from solar power, which is produced by RUAG itself at the Bern and Emmen sites. Four additional photovoltaic plants are planned in Emmen, Lodrino and Thun. At the same time, the conversion of the vehicle fleet to electric vehicles has begun and will be continued in the next few years.
Since 2010, RUAG apprentices have been taking part in the SwissSkills Championships and have received multiple awards. In total, the apprentices have won seven gold, eleven silver and seven bronze medals, two of which were silver medals at the 2020 Championships. RUAG offers apprenticeships in 14 fields, including polymechanics, business and mediamatics. 8% of RUAG employees are apprentices. In total, the company trains 245 apprentices at eleven sites in Switzerland.
Environment and outlook
RUAG MRO Holding Ltd faces great financial challenges. The pressure for results will remain high and the need for investment will increase. The need to catch up, especially when it comes to real estate and test systems, as well as the necessary projects for setting up management systems, process management and IT will require high investments in the coming years. At the same time, the preparations which have already begun must be progressed, for example for the new fighter aircraft (NKF) and the ground-based air defense (GBAD), as well as for our strategic programs.
RUAG MRO Holding Ltd sees this development as an opportunity to position itself in the field of security in the long term. Changed and hybrid threats and new technologies make a cultural change and new methods necessary. RUAG MRO Holding Ltd wants to improve not only its existing business but also accommodate these new requirements. This will pave the way from a traditional defense contractor for the Swiss Armed Forces to a service provider and technology partner for the sovereign security of Switzerland.