Of total first-half sales, 59% relate to civil orders while orders from outside Switzerland account for 64% of sales. In the first half of 2016, order intake at RUAG topped the billion-franc mark (CHF 1,006 million), a rise of 5.2%. RUAG is thus following on from its good result for the last financial year. For 2016 as a whole, RUAG expects net sales and operating earnings to exceed the previous year’s result by a medium single-digit percentage.
At CHF 896 million, net sales of the RUAG Group were 8.7% higher than in the first half of 2015 (CHF 824 million). The CHF 72 million rise comprises organic sales growth of CHF 59 million (+7.2%) and a positive foreign currency effect of CHF 12 million.
RUAG generated 59% (55%) of net sales from civil and 41% (45%) from military applications. This change was due mainly to delayed deliveries in the business aviation and space segments in the previous year which had been deferred from the first to the second half of 2015. The proportion of sales accounted for by the Swiss Federal Department of Defence, Civil Protection and Sport (DDPS), still the most important single customer, was slightly higher than in the first half of 2015, rising from 29% to 31%.
Earnings before interest and taxes (EBIT) rose by 40.7% year on year to CHF 66 million (CHF 47 million). Relative to net sales, the operating profit margin thus rose to 7.4% (5.7%). This significant increase is due on the one hand to the higher sales and the positive currency effect of CHF 1 million and, on the other hand, to the cost optimization and efficiency enhancement programmes launched last year.
Overall, RUAG generated 64% (64%) of its sales abroad and 36% (36%) in Switzerland. RUAG recorded the largest share outside Switzerland in Europe (up from 45% to 46%) and North America (unchanged at 13%).
The global headcount at RUAG rose by 5.5% to 8,504 (8,062) employees. Headcount was up both in Switzerland (+ 134) and abroad (+ 308), and the growth can be linked to the increased output.
At CHF 79 million (CHF 68 million), the technology group’s expenditure on research and development increased by 16.5% compared with the prior-year period.
The net financial position improved from CHF 120 million to CHF 192 million (+60%). This increase can be attributed primarily to the gratifying development of free cash flow in the second half of 2015 and to the higher first-half result.
The improvement in the negative free cash flow figure from minus CHF 67 million to minus CHF 37 million can be ascribed mainly to the better first-half result as well as to slightly lower investments, and is in line with the expected development of the business.
Despite the strength of the Swiss franc, order intake was 5.2% higher than in the previous year at CHF 1,006 million (CHF 956 million). Order backlog showed an even larger rise. At CHF 1,568 million, it was 9.3% higher than in the prior-year period (CHF 1,435 million). Multi-year framework agreements are only reflected in order intake and the order backlog to the extent that release orders actually materialize.
The situation regarding defence equipment exports to the Middle East remains a cause for concern. Owing to the uncertain world economic situation, RUAG expects net sales and operating earnings to exceed the previous year’s result by a percentage in the mid single digits, assuming that the Swiss franc retains its current strength.
Key events in the first half of 2016
16.06.2016: RUAG plans to accelerate the expansion of its Cyber Security business area and to invest several dozen million Swiss francs over the next few years. This will also create jobs both in Switzerland and abroa
01.06.2016: RUAG Space is commissioned by Airbus Safran Launchers to develop the payload fairings for the next generation of the European Ariane 6 launch vehicle.
31.05.2016: RUAG Space acquires the Dresden-based technology company HTS GmbH in its entirety.
20.05.2016: RUAG Aviation receives an order for a second Dornier 228 aircraft from Aurigny Air Services Ltd. The first plane was handed over to the airline at the end of 2015.
03.03.2016: In a public tender process, armasuisse has commissioned RUAG Defence to continue operating the two combat training centres (CTCs) for the next five years.
21.03.2016: RUAG Aerostructures invests CHF 23 million in a modern facility for the surface treatment of aviation components at the Emmen site.
12.01.2016: RUAG Aviation delivers ten “missim” threat simulators to the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw). The “missim” test units can be adapted to almost any sensor-equipped air-, land- or water-based platform.