Aerospace company RUAG International (Zurich, Switzerland) has shared its 2022 financial results. In a challenging market environment, RUAG reports that it achieved earnings before interest and taxes (EBIT) of CHF 178 million/$195 million in 2022 (previous year CHF 70 million/$77 million). This was thanks to three successfully divested business units. The Space business, rebranded as Beyond Gravity since March 2022, secured important orders in connection with the Amazon-Kuiper satellite constellation (read “Beyond Gravity to supply ULA with composite payload fairings, adds to Amazon satellite contract”) and further expanded its business. The aerostructures business stabilized and once again recorded more orders from Airbus (Toulouse, France), its main customer.
Looking back on the financial year, overall net sales in 2022 were lower at CHF 945 million/$1 billion (previous year CHF 1.2 million/$1.4 million) due to the sale of business units, while EBIT rose to CHF 178 million/$195 million (previous year CHF 70 million/$77 million). The targets set for the privatization of RUAG’s three business units (RUAG Simulation & Training, RUAG Ammotec and RUAG Australia) were achieved. While EBIT (+153.4%) rose sharply as a result of the divestment proceeds, sales, on the other hand, fell (-23.8%) due to the discontinuation of the sold business units. Adjusted for the divestment and foreign currency effects, sales rose by 7% compared to the previous year.
CEO André Wall draws a positive conclusion for 2022, noting that “despite a tense global economic environment, we have made significant progress and achieved important milestones.”
The Space (Beyond Gravity) and Aerostructures (RUAG Aerostructures) segments, which remain under the RUAG International umbrella, performed positively overall. In the Space segment, net sales climbed by 11.7% to CHF 356 million/$390 million and the order backlog increased by 10.3% to CHF 744 million/$814 million. In order to cope with the additional order volume, the company has invested in new production facilities in Decatur (U.S.) and Linköping (Sweden), which set new standards for the company in terms of digitalization and automation of the manufacturing processes.
In Linköping, Beyond Gravity manufactures the composite dispenser systems for the precise placement of satellites in orbit, while the payload fairings for U.S. launch vehicles that will one day carry the Amazon satellites into space are produced at the U.S. site in Decatur. Financially, the necessary structural adjustments and the investments in the expansion of production capacities led to a negative EBIT of CHF -5 million (previous year CHF 14 million/$15 million).
In the aerostructures segment, the restructuring programs initiated in previous years paid off in 2022. With Airbus, it was possible to sustainably increase productivity by improving work processes and optimizing production systems. In parallel, the segment benefited from a resurgence in demand for passenger aircraft. Net sales increased by 12.6% to CHF 235 million/$257 million, while the order backlog grew by 19.4% to CHF 269 million/$295 million. EBIT amounted to CHF 43 million/$47 million (previous year CHF 5 million), with a significant part of the positive result being due to the reversal of provisions and value adjustments made in 2020. As a result, both Aerostructures Germany and Hungary and Aerostructures Switzerland are ready for divestment, offering a successful continuation of the business.
As part of the divestment strategy defined by the Swiss Federal Council, RUAG International has already sold numerous businesses in recent years. At the beginning of May 2022, ownership of all shares in RUAG Simulation & Training was transferred to Thales (Paris, France). The French company took over all business activities as well as all 500 or so employees. The sale of RUAG Ammotec to Beretta Holding AG (Brescia, Italy) was completed at the end of July 2022. Beretta took over all activities as well as the approximately 2,700 employees at numerous locations in Europe. At the beginning of September, RUAG International sold its subsidiary RUAG Australia to the ASDAM Group (Australia), which comprises various Australian industrial companies.
“I want sustainable action to become an integral part of our DNA and also see it as an opportunity to gain momentum for new products and services, markets.”
In May 2022, André Wall took over operational management of the Beyond Gravity space segment in addition to his position as CEO of RUAG International. With the new organizational structure communicated at the end of September, the company says it has streamlined its structures, geared them towards greater efficiency and corporate responsibility and positioned them for future growth. The focus is on clear responsibilities for profits and losses in the Launchers and Satellites Divisions and the newly established Lithography Division. The company’s own startup program, Launchpad, provides new and innovative impulses, offering young companies and startups a mentoring and training program with direct access to the international space community, including highly specialized engineers, partners, national agencies and customers.
Moreover, RUAG Space’s new and more dynamic brand identity under Beyond Gravity has led to a “positive response from customers and noticeably increases the attractiveness for potential employees.”
Beyond Gravity also notes the launch of a comprehensive environment, social, governance (ESG) project in 2022, with the aim of publishing a comprehensive ESG report for the first time in the 2023 reporting year. “Through our leading market position in many key products for the space industry, we can positively influence the sustainable development of the entire industry,” Wall notes. “I want sustainable action to become an integral part of our DNA and also see it as an opportunity to gain momentum for new products and services, markets.”
What is 2023 outlook for RUAG International and Beyond Gravity? The former’s focus is on the preparation and sale of two remaining aerostructures divisions, Oberpfaffenhofen/Eger and Emmen. The latter will focus on implementing the restructuring, optimization and investment projects that have been launched. Further investments are also planned to cope with the expected volume growth. The digital transformation of the company is central to Beyond Gravity in the coming years. In parallel, the product portfolio will be further streamlined. In 2023, intensive work will also be done on the completion of the new production facilities at the U.S. site in Decatur and in Linköping, Sweden. This is another important basis for finding an attractive buyer for Beyond Gravity by the end of 2025 at the latest.
Information on RUAG International can be found at www.ruag.com. Information on Beyond Gravity can be found at www.beyondgravity.com. Further information on the 2022 annual financial statements can be found at this link.