The Business Segments

RUAG International′s Space segment looks  back on a challenging 2023. Despite impacts from  inflation and supply chain issues, the space market experienced robust growth in 2023, driven by increasing commercial investment and  technological advances. Demand for satellite launches and  space missions rose sharply and  private companies once again played a significant role. However, general economic factors, such as global financial market volatility and geopolitical tensions, were also  felt in the space market.

Sales in 2023 increased by 8 % to CHF 383 million  (previous year: CHF 356 million).  EBIT recovered from  CHF –5 million to a black zero  (CHF 0 million) while making massiv investments in the expansion of production and digital infrastructure, thus laying  the foundation for profitable growth. At CHF 408 million (CHF 439 million) and CHF 729 million  (CHF 744 million) respectively, order intake and order backlog are both at a high level. The full order books thus ensure long-term production Capacity utilization and allow us to look to the future with confidence.

Satellites division

The Satellites division employs around 750 people at sites in Switzerland, Sweden,  Austria, the USA and Finland. The unit bundles all of Beyond Gravity′s satellite activities and supplies mission-critical products for a wide range of satellite missions for commercial and institutional customers. With the exception of the propulsion system, all core elements of a satellite are offered: from  the satellite structure, the on-board computer and other electronics to thermal protection, various mechanisms and slip rings.

The division offers first-class engineering, production expertise and capacities as well as project management for commercial and institutional customers, such as for the second generation of the European global satellite navigation system Galileo. In 2024, the division plans to grow further, invest significantly in research & development and further expand its existing sites. Oliver Grassmann has  been in charge of the division since 2023. He took over in mid-May 2023 from  Anders Linder, who left the company.

Launchers division

The Launchers division encompasses the development and production of composite structures and dispenser systems for launch vehicles. For decades, Beyond Gravity′s payload fairings, interstage adapters, dispensers, payload adapters and separation systems have been the first choice for space companies such as Amazon, ArianeGroup, United Launch Alliance and many other space companies in Europe, the USA, Japan and Australia. The division has  630 employees in three countries: Switzerland (Emmen, Zurich), Sweden (Linköping) and the USA (Decatur).

For the Launchers division, 2023 was  characterized by the development and expansion of the two sites in Linköping and Decatur. Production capacities at both sites are currently being doubled with a view to processing the orders secured in 2022 for Amazon′s Kuiper satellite constellation. The commissioning of new production halls  at both sites is planned for 2024; they  should be running at full capacity from 2025. The division has  been headed by Paul Horstink since 2022.

Lithography division

The Lithography division, with 240 employees and departments at the two sites in Zurich (CH) and Coswig (DE), manufactures high-precision actuators, mechanical assemblies and metrology and testing equipment for the nanometre-precise exposure of semiconductor wafers. These are used worldwide in machines for the production of microchips and thus form  the basis for numerous high-tech applications such as in smartphones or in the field of artificial intelligence.

In 2023, the division continuously expanded its production capacity in close cooperation with its main  customer Zeiss SMT. The highlight of the year was the expansion of the clean room in Zurich-Seebach by 135 %. Further increases in production are also planned for 2024. The division has been headed by Dr Oliver Kunz since 2022.

New Digital & Innovation Hub in Lisbon

In autumn 2023, Beyond Gravity opened a new location in Lisbon. The Digital & Innovation Hub  supports the divisions in their transformation and promotes innovation collaboration between the 14 locations. The development and planned expansion to 200 employees in 2025 will enable Beyond Gravity to tap into Portugal′s attractive talent pool in the fields of engineering and digital technologies. Beyond Gravity will thus become the largest space company in Portugal.

Step into the digital future

During  the reporting period, Beyond Gravity invested heavily in the company′s digita transformation. The EZYone project aims to build  a strong digital core for Beyond Gravity, harmonize processes, create a solid  database and implement a uniform system landscape. These measures will enable smooth collaboration across different locations. They also  create the basis to expand the company′s digital expertise, foster innovation, strengthen employee loyalty, reduce administrative costs and lay the foundation for the increased use of artificial intelligence, machine learning, augmented reality and  other forward-looking technologies.

Outlook

The market environment in the global space business continues to develop positively in view of the rising demand for rocket launches, the expansion of satellite infrastructure and increasing investment by commercial players. The main objective for Beyond Gravity in 2024 is to promote products and programmes that contribute to good profitability. Each of the three divisions is expected to be profitable in 2024. Investments will continue to flow into the digital transformation and the commissioning of the expanded production sites in Linköping and Decatur in 2024.

RUAG Aerostructures is setting important milestones in a challenging market environment. All shares in RUAG Aerostructures Germany & Hungary were sold to Mubea. Pilatus is to take over parts of RUAG Aerostructures Switzerland.

In the Aerostructures segment, net sales increased to CHF 240 million in 2023 (previous year: CHF 235 million). However, EBIT fell significantly from CHF 43 million to CHF –17 million. The result suffered from delivery delays in the international supply chains, changing customer requirements and production volumes as well as one-off expenses due to the divestment projects. Furthermore, the reversal of provisions and value adjustments in 2022 must also be taken into account.

The ongoing disruptions within the international supply chains were also felt by RUAG Aerostructures in 2023. Although to a much lesser extent than in previous years, the segment repeatedly experienced delivery delays on the part of suppliers, which had a negative impact on the entire production process. At the same time, RUAG Aerostructures was confronted with adjustments to order quantities and production processes, which in turn led to delays in some deliveries. In addition to these external factors, RUAG Aerostructures was also preoccupied throughout 2023 with the ongoing intensification of sales negotiations. The closing of the sale of RUAG Aerostructures Germany & Hungary to the Mubea Group was achieved at the end of December. The signing of the contract for the sale of RUAG Aerostructures Switzerland to Pilatus Flugzeugwerke took place in January 2024.

RUAG Aerostructures Germany & Hungary

RUAG Aerostructures Germany & Hungary mainly supplies Airbus with structural parts for the fuselage sections, the main landing gear bay and side shells for the A320 aircraft family. An average production rate of 55 units was expected at the beginning of the year. Because of cancellations by customers due to a lack of parts, the rate fell well below this mark at the beginning of the year, so that short-time working had to be introduced in February. The rate then jumped well above 55 in the summer and levelled off at the forecast rate of 55 at the end of the year. These fluctuations, accompanied by a persistent shortage of parts, are having a negative impact on production costs and the total order volume.

In July 2023, Airbus also announced that certain sections of the A320 family would no longer be manufactured by RUAG Aerostructures Germany & Hungary in the future. Despite the challenging conditions, RUAG Germany & Hungary was honored with the Airbus Supplier Award for Operational Excellence in 2023 for its outstanding performance.

Mubea takes over in Oberpfaffenhofen and Eger

An agreement was signed with Mubea for the business in Germany & Hungary in autumn 2023. In accordance with the strategic guidelines of the Swiss Federal Council, the final transfer of ownership took place at the end of December 2023. Mubea, a renowned German family business, is an innovative lightweight construction specialist with more than 14,000 employees at 50 production sites worldwide. Within Mubea, RUAG Aerostructures Germany & Hungary will become part of Mubea Aviation GmbH. Mubea has taken over all business activities and all of the approximately 1,000 employees.

RUAG Aerostructures Switzerland

RUAG Aerostructures Switzerland mainly manufactures aerostructures at the Emmen site for customers such as Boeing, GE, Pilatus and Saab. Due to reduced reliability and delivery dependability on the part of suppliers, changing customer orders and the suspension of individual programmes, the originally targeted increase in profitability could not be achieved. In addition, the delivery of parts to some customers was delayed due to external factors. The reintegration of the entire logistics organisation, which will return to the Emmen site in 2024, should lead to an improvement in the parts situation. 

Pilatus takes over in Emmen

Preparations to find a new owner for RUAG Aerostructures Switzerland in Emmen were also intensive in 2023. In January 2024, RUAG Aerostructures Switzerland and Pilatus Flugzeugwerke AG reached an agreement on the sale of all machinery and the transfer of all employees. The contract with Pilatus was also signed in line with RUAG International′s strategic objectives as set out by the Swiss Federal Council. The Emmen-based division has also been producing parts and components for Pilatus Aircraft since the early 1990s. These include the PC-21 fuselage and the tailplane of the PC-12. In future, Pilatus Flugzeugwerke will only manufacture parts and components for its own aircraft at the Emmen site. Orders from third-party customers, which RUAG Aerostructures Switzerland has produced to date, will only be continued for a limited period.

Outlook

Due to the completed and ongoing divestment projects at both companies – RUAG Aerostructures Switzerland and RUAG Aerostructures Germany & Hungary – the future business development and direction will depend on the needs and plans of the new owners.