Pilatus aircraft
Flugzeugwerke
ltd
AG
Annual
Geschäftsbericht
report 2012
2012
Pilatus aircraft LTD
annual report 2012
3 Editorial
5 Business Unit Government Aviation
13 Business Unit General Aviation
19 Business Unit Maintenance
23 OPERATIONS
29 HUMAN RESOURCES
31 Airport Buochs ltd
34 Facts and figures
37 Management
39 BOARD
Pilatus aircraft LTD
annual report 2012
Facts and Figures
KEY FIGURES AT A GLANCE
EBIT (CHF million)
Total Sales (CHF million)
200
1000
180
900
160
800
140
700
120
600
100
500
80
400
60
300
40
200
20
100
Ebit and total sales (CHF million)
EBIT
EBIT before R&D
Total sales
0
KEY INDICATORS FOR THE PILATUS GROUP
0
2008
2009
2010
2011
2012
2008
2009 20102011 2012
Total Sales (CHF Million)
661 620 688781 593
Aircraft Sold
114105 93 87 86
ORDERS RECEIVED (CHF MILLION)
ORDER BOOK VALUE (CHF MILLION)
988 433 355 4162699
11971031 689 325 2426
EBIT (CHF MILLION)
55
78
88
108
38
EBIT AS % OF SALES
8.3
12.6
12.8
13.8
6.4
CASH-FLOW (NET PROFIT PLUS DEPRECIATION, CHF MILLION)
CASH-FLOW AS % OF SALES
70
82
112
123
52
10.6
13.3
16.3
15.7
8.8
INVESTMENTS IN FIXED ASSETS (CHF MILLION)
23
9
5
9
7
INVESTMENTS IN R&D (CHF MILLION)
37
41
49
67
68
EBIT BEFORE R&D (CHF MILLION)
EBIT BEFORE R&D AS % OF SALES
92
119
137
175
106
13.9
19.2
19.9
22.4
17.9
NET ASSETS (CHF MILLION)
289
283
300
304
116
INVENTORIES (CHF MILLION)
271
254
412
405
390
60
76
201
214
426
19.0
27.6
29.3
35.5
32.8
CUSTOMER ADVANCES (CHF MILLION)
EBIT AS % OF NET ASSETS
Number of fulltime equivalents
1600
1550
1500
1450
1400
1350
1300
1250
EMPLOYEE GROWTH OF
THE PILATUS GROUP
1200
Number of full-time
equivalents
1150
1100
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2003200420052006 2007 2008200920102011 2012
number of full-time equivalents
120212841330 139913721363 1330139514411576
BALANCE SHEET EXTRACT
2008200920102011 2012
CURRENT ASSETS (CHF MILLION)
421
462
706
863
1066
LONG-TERM ASSETS (CHF MILLION)
164
160
143
132
119
TOTAL ASSETS (CHF MILLION)
5856228499951185
LIABILITIES (CHF MILLION)
247
233
383
449
635
EQUITY (CHF MILLION)
338
389
466
546
550
TOTAL LIABILITIES AND EQUITY (CHF MILLION)
5856228499951185
EQUITY RATIO IN %
57.862.554.954.9 46.4
2012 sales by Business Units
2012 sales by region
Asia
The Americas
Europe
Africa
Australia
34.6
33.1
17.9
9.2
5.2
%
%
%
%
%
General Aviation
Government Aviation
Maintenance
Subcontracting
46.6
43.9
8.9
0.6
%
%
%
%
Pilatus aircraft LTD
annual report 2012
Editorial
2012: EXCEPTIONAL ORDER VOLUME
POINTS TO A BRIGHT FUTURE
There is another challenge, of course:
the PC-24. Last summer, the Board of
Directors gave the go-ahead for our biggest, fastest, most complex aircraft yet.
The PC-24 will be a twin-engine business jet with the type of flying credentials which only Pilatus knows how to
deliver. Our new aircraft is to be
unveiled to the public at this year’s
EBACE in Geneva.
Pilatus has never seen a year like 2012:
we knew we would not be able to better
the results of 2011. I made the forecast, and that is exactly how it turned
out. But whereas turnover and profit
were lower than in previous years, they
are still very good thanks to forward
payments in respect of 2013.
We had every confidence that sizeable
new orders would arrive, and they did.
But the volume of the orders and the
very short interval between each one
took us by surprise: 75 PC-7 MkIIs for
India, 55 PC-21s for Saudi Arabia and
24 PC-21s for Qatar! Over 2.2 billion
Swiss francs all in all – in addition to
our other orders, of course. In 2012,
the volume of incoming orders was
such that it surpassed the total volume
of orders accepted in the past four
years. A feat which will surely go down
in history! Current orders in hand
amount to more than double the equivalent figure in 2008, our previous best.
Expressed in figures, we can say that at
the end of 2011, the volume of orders
in hand, measured against sales in
2011, provided enough work for 152
days, i.e. until 31 May 2012. The order
volume at the end of 2012, also measured against sales, will (in theory)
provide enough work for 4 years and
38 days, i.e. until 7 February 2017!
I should also mention that we are lucky
to have an outstanding management
team and a first-class workforce capable of dealing with such huge leaps and
bounds! I have to admit we are just a
little bit proud of our achievements.
But let us leave the figures aside for a
moment. Our customers cannot be left
to wait until 2017, obviously, and there
will be other incoming orders this year.
All of which adds up to an enormous
challenge for Pilatus, the management
and its workforce. We are growing and
expanding: more employees, a bigger
production area, more machines, more
warehouse space. The programme has
been underway since mid-2012. I know
we will meet the challenge. On time
and in line with the “Pilatus quality” for
which we are known. None of our customers shall have to wait for their aircraft!
3
The situation is such that we felt it was
appropriate to examine the division of
tasks within the senior management
team. In November, the Board of Directors followed my suggestion to appoint
Markus Bucher as the new Pilatus CEO
with effect from 1 January 2013. I would
like to take this renewed opportunity to
offer my sincere congratulations to him.
As for myself, I shall concentrate on my
tasks as Chairman of the Board of
Director. Together with the members of
the Chairman’s Office, I shall be heavily
involved in the PC-24 project, but I will
also lend a hand with the acquisition of
major new orders.
Things certainly look encouraging as we
move forward into the new business
year. Indeed, I predict it will be a very
good year!
Oscar J. Schwenk
Chairman of the Board of Directors
19º25' S, 23º14' E
Elephants in the Okavango Delta, Botswana
4
Pilatus aircraft LTD
annual report 2012
BUSINESS UNIT GOVERNMENT AVIATION
RECORD NUMBER OF
INCOMING ORDERS
Summing up the financial year 2011 at
Pilatus Aircraft Ltd, we reported “the
best set of results ever, but the level of
orders in hand gives cause for concern”.
Developments in our Business Unit
Government Aviation during the same
period mirrored those consolidated
results very closely. Several air forces
were engaged in the process of evaluating Pilatus training aircraft and a
number of orders were close to conclusion. Crucially, however, nothing firm
had been signed yet. So should we sit
tight until everything was finalised, or
should we risk making an early start
on production and hope for a good outcome? It’s a dilemma which has
become familiar to our senior management in recent years: experience shows
that almost all orders tend to be placed
later than expected. And yet customers
still insist on the delivery dates agreed
during the early stages of negotiation.
The net result is a continual erosion in
turnaround times.
The biggest orders in Pilatus history
The pattern repeated itself in 2012.
The orders came in, but not before late
May – and all at the same time, of
course! The Indian Air Force (IAF) signed
an agreement for 75 new generation
PC-7 MkIIs with various upgrades, including our state-of-the-art training system
comprising computer-based learning,
simulators, mission systems and
5
maintenance operations. The total
order is worth over 550 million Swiss
francs. But the delay in signing the final
agreement left us with very little production time. Spurred on by an ambitious timetable, Pilatus achieved a new
record performance when the IAF’s first
PC-7 MkII took off from Stans for its
maiden flight on 9 October 2012, just
138 days after the order was placed!
The pace accelerated immediately:
another even bigger order came in just
a day after the agreement was signed
with India. Our customer on this occasion, the Royal Saudi Air Force (RSAF),
bought 55 PC-21s, including our comprehensive state-of-the-art training
system. This order is the biggest in
our 73-year history, and the first ever
contract worth over one billion Swiss
francs! The order will go ahead in partnership with BAE systems, as was the
case for the previous purchase of 50
PC-9s. BAE Systems is Saudi Arabia’s
chosen contractor for the provision
of all pilot training to the RSAF. The
PC-21s are scheduled for delivery between early 2014 and spring 2016.
All good things come in threes
And there was more to come. The third
major order was confirmed barely two
months later when the Qatar Emiri
Air Force (QEAF) ordered 24 PC-21s.
The agreement includes provision of
BUSINESS UNIT GOVERNMENT AVIATION
Pilatus aircraft LTD
annual report 2012
“The Botswana Defence Force (BDF) Air Arm has operated the first generation PC-7 as an
ab-initio trainer aircraft for the past twenty-two years. The outstanding performance
of the PC-7 and first-class support from Pilatus allowed us to meet all our training requirements. The PC-7 is a student-friendly platform for basic military training: exceptional
high reliability coupled with low operational and maintenance costs plus new generation
state-of-the-art avionics were influential factors in prompting the BDF to purchase the
Pilatus PC-7 MkII as a replacement trainer aircraft. For all these reasons, the BDF applauds
Pilatus for such a long and mutually beneficial relationship. It is our fervent hope that
this friendship will grow from strength to strength in the coming years.”
Major General Placid D. Segoko, Deputy Commander Botswana Defence Force
maintenance and support for the first
five years of operational use. In short,
here was another order worth over
600 million Swiss francs. The first
PC-21 is due for delivery to the QEAF
Air Academy by mid-2014, the last by
spring 2016.
So, after the apprehension of the initial
wait, Government Aviation now has full
order books totalling over two billion
Swiss francs.
Successful delivery of 25 PC-21s
to the UAE
In July 2012 we delivered the final nine
of 25 PC-21s to the United Arab Emirates (UAE), plus associated systems
and instruction packages. Several technical specialists were dispatched from
Pilatus to Al Ain to help organise the
start of on-site pilot training and set up
the new “Advanced Military Maintenance Repair and Overhaul Center”
(AMMROC).
Until May 2012, the order from the
United Arab Emirates Air Force & Air
Defence was the biggest ever placed
with Pilatus, and was a major challenge for the company. It included the
provision and commissioning of simulators and other ground-based training
systems, an ejector seat for training
purposes, instruction rooms and various
training materials. Rounding off this
order we also delivered a new Mission
Debriefing System designed to secure
a complete recording of each flight
for subsequent viewing and detailed
discussion.
All ground-based systems and services
were accepted and put into operation
by the United Arab Emirates Air Force
& Air Defence before the end of 2012.
The timely delivery of all PC-21s and the
smooth commissioning of the extremely
complex training system marked an
important milestone for Pilatus.
Expectations exceeded
Late November 2012 saw us deliver
five PC-7 MkIIs to the Botswana Defence Force; these aircraft were destined to replace the existing fleet of
PC-7s dating from 1990. The delivery
included training systems and logistics
material. We were also tasked with
providing technical training for local
personnel. Once again, our Business
Unit Government Aviation found itself
working to a tight deadline, but managed to complete the entire order a
full four months ahead of the promised
delivery date.
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Pilatus aircraft LTD
annual report 2012
BUSINESS UNIT GOVERNMENT AVIATION
The South African Air Force (SAAF) commissioned us to install glass cockpits
in a further twelve PC-7 MkIIs, bringing
the total number of upgraded PC-7 MkIIs
to thirty. The final five aircraft are scheduled for modification during 2013. The
SAAF praised the outstanding reliability
of the new avionics – actual performance exceeds twice the contractual
value initially defined by the air force.
The flight simulators delivered the year
before also work perfectly. Those good
results generated a follow-up order
which includes, amongst other things,
programming of both simulators to
provide virtual formation flying.
The fleet of PC-21s flown by the Royal
Singapore Air Force achieved an absolute record in terms of operational
availability, clocking up an end-of-year
mission success rate of over 97 percent spread across 7000 hours in
2012, and more than 30 000 hours
overall. Naturally, this is an excellent
reference for first-class Pilatus quality,
dependability and service.
Good maintenance is vital
Pilatus is also responsible for the provision of maintenance for the fleet of
PC-21s operated by the Swiss Air Force.
We work in close consultation with
armasuisse, the relevant competence
center within the Federal Department of
Defence, the Swiss Air Force and the
Swiss Army unit with responsibility for
logistics. As always, our goal here was
to ensure the best possible availability
of our training aircraft. This objective
was achieved to the satisfaction of all
concerned.
Good customer support – a Pilatus
philosophy
But the timely delivery of training aircraft and systems does not by any
means release Pilatus from its obligations. Good after-sales support is a
key factor in the first-class reputation
which Pilatus enjoys worldwide in both
civilian and military circles. Support
contracts provide an optimum framework for our customers. In 2012 we
concluded or extended many such
contracts with prestigious customers,
including the air forces in Australia,
Botswana, Bulgaria, France, Holland,
Ireland, Croatia, Malaysia, Thailand and
E.I.S. in Germany.
9
Pilatus aircraft LTD
annual report 2012
BUSINESS UNIT GOVERNMENT AVIATION
“The PC-9 M training system produces a high-calibre graduate pilot, with all the requisite
skills to meet the demanding and varied spectrum of military flight operations encountered in the Air Corps. The inherent reliability and availability of the PC-9 M fleet have
generated confidence that they will be available for training and operations in sufficient
numbers as required. This confidence has remained at a very high level, largely reinforced by the excellent technical support provided by Pilatus. As the fleet nears its tenth
service anniversary, I look forward to seeing the PC-9 M type in continued use with our
Flying Training School as it contributes to the successful formation of trainee pilots and flight
instructors of the highest quality.”
Brigadier General Paul Fry, General Officer Commanding the Irish Air Corps
Presence at air shows:
a “must do”
Our presence at major air shows is an
excellent way of reassuring existing
customers that they made the right
choice with Pilatus, and also of showing
new customers that Pilatus training
aircraft come top of the international
league! During the year under review
we attended DEFEXPO in India, FIDAE
in Chile and the traditional Royal International Air Tattoo and Farnborough Air
Show in England.
Pilatus also extends many invitations
to visit Stans and see our training aircraft production facility at first hand.
In 2012, visitors included delegations
from new customers as well as numerous VIP guests: the Commander-in-Chief
of the Swedish army, the Australian
ambassador with his defence attaché
and representatives of the air forces
of Finland, South Africa, Thailand
and Kuwait.
10
The Pilatus Training Center remained
very busy throughout the year, hosting
no fewer than 62 different training
courses, 19 for our own employees and
43 for customers. The 357 participants
included 57 pilots of various Pilatus
training aircraft and 110 engineers. All
in all, the Center provided 382 days of
training, instruction and learning. This,
too, contributes to the good reputation
which Pilatus enjoys.
An excellent year
Although the delay in receiving orders
meant that reported sales revenues
were substantially less than in the previous year, our Business Unit Government Aviation can be very happy with
its performance in 2012. Trainer production is a long-term business, and
short “breathing spaces” are not unusual. More importantly, in the light of
the new orders, we feel justified in
saying that the “dip” is most definitely
behind us.
11
African Buffaloes in the Okavango savanna, Botswana
18º47' S, 22º31' E
Pilatus aircraft LTD
annual report 2012
BUSINESS UNIT GENERAL AVIATION
A DIFFICULT YEAR –
WITH SOME BRIGHT SPOTS
Sales of PC-12 NGs totalled sixty-two
during the year under report, compared
to sixty-three in 2011. The PC-12 successfully defended and even slightly
increased its share of the market. That
result is due in no small part to a great
deal of hard work by all the members of
our dealer network.
The current situation is a difficult one,
and for much the same reasons as in
2011. The general aviation market has
not yet recovered from the aftermath of
the financial crisis. In North America,
our biggest market for the PC-12, there
is little sign of economic recovery as
yet. Many companies remain cautious –
corporate priorities do not stretch to
buying a new aircraft in these uncertain
times. High-net-worth individuals are
similarly circumspect, preferring to
adopt a “wait and see” approach.
The general aviation market is also
hampered by endless debate about
taxes and charges. Some countries
have introduced a regime of higher tax
rates for private aircraft and there is
some apprehension that other countries may follow suit. The climate of
general uncertainty is a further burden
for a stagnant economy.
Overly strong Swiss franc
Even in the relatively vigorous emerging
markets, 2012 was a difficult year in
which to sell aircraft. The Brazilian real,
13
Argentinean peso, South African rand
and Indian rupee all fell sharply in value
against the Swiss franc and the US
dollar. The PC-12 NG purchase price is
quoted in dollars, so buyers in these
countries inevitably saw a substantial
increase in the cost of acquisition.
The soaring Swiss franc had a very erosive impact on export profit margins in
2011, but was brought back under control by the intervention of the Swiss
National Bank in 2012. The pegging of
the franc to the euro has both prevented further appreciation and brought
greater security and predictability to
currency structures. Our Business Unit
General Aviation felt at least some
small benefit from this, even though the
cost of manufacturing a PC-12 is largely
incurred in US dollars.
Some positive market developments
Government agencies tend to be particularly keen to invest during times of
economic crisis. That was certainly the
case during financial 2012, particularly
in the USA, and this impacted positively
on Pilatus. There were fewer sales to
private individuals and companies,
but we noted a clear increase in sales
to government and semi-public organisations. Alongside currency fluctuations, that is also one of the driving
forces behind the slight increase in
sales reported by our Business Unit
General Aviation. These government
Pilatus aircraft LTD
annual report 2012
BUSINESS UNIT GENERAL AVIATION
organisations opted mainly for the
PC-12 Spectre, which retails at a higher
price due to its special extra equipment. We were delighted to receive an
order from the US Air Force for eighteen
PC-12 NGs, to be delivered by 2014.
Also in line with the figures reported
in previous years, two aircraft were
delivered to South America, representing three percent of our production.
Three aircraft or five percent of production went to Australia – this, too, follows
the pattern established in recent years.
European clients took delivery of thirteen aircraft, i.e. twenty-one percent
of our production. In past years, deliveries to Europe have remained steady
at somewhere between twenty and
twenty-five percent of our production
output.
Despite the changes we have seen in
the market for used aircraft since
2008, there has never been any threat
of oversupply. On the contrary, there
has been a drop in the volume of used
products available, and this has nudged
second-hand prices upwards. This has
also benefitted Pilatus to some extent:
a higher resale price is not only good
for our reputation, it also tends to tip
the investment cost appraisal in favour
of buying new.
General Aviation suffers worldwide
Worldwide sales of our PC-12 clearly
illustrate how closely national economies are linked at an international
level, and how the morose business
climate has impacted across every continent. Of the sixty-two PC-12s sold in
2012, thirty-three went to the USA, five
to Canada and one to Mexico. Thirtynine aircraft for North America all in all,
representing sixty-three percent of total
deliveries in 2012. True to a trend
which first emerged in 2006, approximately two-thirds of our annual PC-12
production now goes to North American
customers.
Only one aircraft was sold to Africa.
Representing a two percent share of
sales, this is a very modest result.
In previous years, notably 2006 and
2009, this share has been as high as
seven percent.
Our hopes are now focused on Asia
where we were delighted to sell as
many as four PC-12s in 2012 – particularly since we had not sold a
single aircraft in this market during
the three previous years. We were also
very encouraged to see the aircraft
going to customers in three countries
in which we have never yet sold a
PC-12 – the Philippines, Malaysia and
China. This initial success will spur us
on to pursue our development efforts
in the future.
14
15
16
BUSINESS UNIT GENERAL AVIATION
Pilatus aircraft LTD
annual report 2012
“MDH is a private family company based in outback Australia. My family operates eleven
cattle stations and a feedlot covering 3.8 million hectares. In December 2012 we were
excited to replace our existing turbine with a PC-12 NG. Able to fly in and out of destinations with short gravel runways in summer temperatures exceeding 45°C, with the capacity to climb to 30 000 feet to avoid most summer thunderstorms, our PC-12 has far
exceeded our expectations. Backed by award-winning customer support with a full inventory of spare parts in country, our PC-12 has proven to be an excellent investment
in the harsh Australian environment.”
Zanda McDonald, Director MDH Pty Ltd, Owner of MSN 1370
GAMA report: sales figures
remain stagnant
The figures for 2012 published at the
end of February 2013 by the “General
Aviation Manufacturers Association”
(GAMA) point to a slight recession in
the general aviation market (business
jets included) in every area of the
world. The market in aircraft for agricultural use drove sales of turboprop
aircraft ten percent higher than in
2011. All in all, 2012 saw a one percent increase in the total number of
general aviation aircraft sold. In the
turboprop sector, the Pilatus PC-12 NG
remains second behind the Caravan,
as in 2011.
Once Pilatus, Always Pilatus!
Our slogan, “Once Pilatus, Always
Pilatus!”, is not simply plucked out of
the air. The Royal Flying Doctor Service
(RFDS) in Australia has been a loyal
customer since 1995, for example,
taking delivery of over 30 PC-12s since
placing its first order with us. Another
prominent customer, the Royal Canadian
Mounted Police in Canada, acquired a
further two Pilatus aircraft in 2012: the
RCMP has operated a fleet of PC-12s
since 1999, and now owns twenty-five
of these aircraft. Currently in the middle
of a programme to renew its fleet, the
RCMP is in the process of replacing
its Legacy PC-12s with new PC-12 NGs.
The two aircraft sold in 2012 were
PC-12 Spectres. These aircraft are especially designed and equipped with
surveillance work in mind.
A strong presence – not just at
air shows
In difficult times, good marketing becomes even more important. With that
in mind, Pilatus was present as usual
at every one of the major international
air shows to show off our PC-12 NG.
Sun’n’Fun in Florida, FIDAE in Chile, the
EAA AirVenture in Wisconsin – better
known as “Oshkosh” – LABACE in
Brazil, the Reno Air Races in Nevada,
the AOPA Aviation Summit in California
and the NBAA in Florida to name just
some of the biggest shows we attended
in North and South America. We were
also present at e.g. the Singapore Airshow, AERO in Friedrichshafen, EBACE
in Geneva and MEBA in Dubai.
Pilatus also participates at major lifestyle events, especially in the USA, and
the results have been good so far.
As on so many occasions in the past,
Pilatus was present at the annual “La
Bella Macchina” event organised by the
Ferrari Owners’ Club, at the world-class
17
Hampton Classic show jumping contest,
at the Fort Lauderdale Yacht Show and
at the annual convention of the Safari
Club International, America’s leading
hunting club.
More prestigious awards for Pilatus
after-sales support
Pilatus is widely regarded as the
Number One in terms of after-sales
support. So much so that this hard-won
reputation almost appears to be a
“given”. Nothing could be further from
the truth, of course! For the eleventh
time in a row, readers of the US
“Professional Pilot Magazine” voted
Pilatus into first place in the turboprop
category. No other aircraft manufacturer
has ever occupied the top spot for so
long. Readers of “Aviation International
News” also re-awarded first place to
Pilatus.
Pilatus customers enjoy creative aftersales support. We send out regular
“e-News” information bulletins, for
example, and keep pace with the very
latest trends through added website
functionality and mobile apps.
Ice floes and an Adélie penguin, Adélie Land, Antarctica
66º00' S, 141º00' E
Pilatus aircraft LTD
annual report 2012
BUSINESS UNIT MAINTENANCE
MAINTENANCE OPERATIONS
ON TARGET
Until a few years ago, the Maintenance
outfit in Stans accepted a range of different aircraft types for maintenance
work, repairs and overhauls. Then there
was a decision to concentrate on Pilatus
products. That decision has proved a
very good one. As a traditional MRO
operation (Maintenance, Repair & Overhaul), this Business Unit can provide all
the expertise required to service Pilatus
aircraft over their entire life cycle, from
start to finish. Our customers definitely
appreciate this, and reward us with
their loyalty over many years.
Sales in our BU Maintenance finished
slightly up on last year, despite the
morose financial and economic climate,
the overvalued Swiss franc and a worldwide recession in the aviation industry.
The goals we set ourselves with
respect to aircraft and component
maintenance were achieved.
Expansion in local maintenance
service
For some years now, Pilatus has delivered local on-site maintenance for the
PC-21 trainers operated by the Swiss
Air Force. This service and the associated skills were built up gradually and
purposefully, and have been extended
continuously. An agreement to provide
a similar service was signed with the
Qatar Air Force in 2012. Our customers
naturally appreciate the benefits and
greater efficiency of a one-stop supplier.
19
Sales of the Pilatus PC-6 below
expectations
The legendary Pilatus Porter PC-6 did
not sell as well as expected. Although
the geographical market was extended
by additional type approvals in several
countries, only five PC-6s found an
owner instead of the planned eight. By
comparison, six were sold in 2011. The
difficult climate in the aviation industry
as a whole has left its mark here, too.
Three PC-6s went to China, one to Mauritania and one to Indonesia. Indonesian-based Susi Air currently operates
the biggest civilian fleet of PC-6s. Susi
Air signed a contract for three new
PC-6s: the remaining two are scheduled
for delivery in 2013. There were no
sales in South America.
On the other hand, the PC-6 after-sales
team reported another set of encouraging results with sales at a steady
level, and even slightly up on last year,
thanks to a number of projects to
upgrade existing avionics systems.
Integrated order processing
The administrative procedures involved
in the maintenance of aircraft and their
components were integrated and mapped in the Pilatus ERP-SAP system
during the year under review. This will
considerably improve the quality and
consistency of all our processes, from
the initial customer enquiry to the
Pilatus aircraft LTD
annual report 2012
BUSINESS UNIT MAINTENANCE
completion of work. Step by step, the
new applications are absorbed into
our day-to-day business operations, verified and continually optimised where
necessary.
Overly optimistic expectations
We were unable to match the level of
sales achieved in 2011. Numerous full
overhaul jobs did not materialise as
expected and it proved impossible to
make up for these orders through annual revisions and guarantee work alone.
In the piston engine aircraft market,
AAL’s location in the immediate vicinity
of the Euro zone and its Swiss salary
structures make it difficult to operate
competitively. Some reduction in the
scope of the AAL’s activities therefore
seems inevitable.
A turbulent year in Altenrhein
In contrast to the MRO operation in
Stans, Altenrhein Aviation Ltd (AAL)
provides maintenance services to aircraft made by a wide range of different
manufacturers at its Lake Constance
site. Altenrhein Aviation Ltd forms part
of the Pilatus Business Unit Maintenance and its portfolio extends from
piston aircraft to turboprop machines
through to mid-size cabin jets. The
breadth of expertise has just been
extended with the facility’s appointment
as a Service Center for the Embraer
Phenom 100 and Phenom 300. Approval for the new Gulfstream G-280 is
anticipated sometime in the second
quarter of 2013.
Financial 2012 was marked by strategy
modifications and restructuring. An unexpected turnover in personnel resulted
in a tangible loss of know-how. Existing
processes and structures came under
scrutiny as part of this general reorientation. In this context, the line maintenance station which went into operation
in Kiev in 2011 to take care of various
Gulfstream models was discontinued at
the end of 2012 for reasons of cost
and logistics.
The process of extending our maintenance skills to deal with new types of
aircraft and the relevant specialist training which has to be provided is always
associated with high costs. These startup investments were a further reason
for the less than satisfactory results.
Existing capacity devoted to
internal orders
A department for structural work was
created to provide an additional pillar
besides aircraft maintenance. The
sheet metal working team has been
kept busy producing elevators, horizontal stabilisers, engine cowling and wing
main spars for the PC-7 MkII.
20
54º00' S, 69º00' W
Flock of sheep, Tierra del Fuego, Argentina
22
Pilatus aircraft LTD
annual report 2012
OPERATIONS
COORDINATED PROCEDURES FOR
MAXIMUM EFFICIENCY
Created in mid-2011, our Business Unit
Operations is responsible for coordinating our production, assembly, maintenance and logistics activities. The goal
is to ensure that available resources
are used as efficiently as possible. This
may evoke visions of “paper-pushing”,
but the reality is a large business unit
and a lot of hard work with a direct
impact on our results. The unit contributed no fewer than 950 000 hours –
equivalent to some 530 man years –
during financial 2012.
The importance of reliable suppliers
We obviously rely on our external suppliers to provide us with quality materials and components in accordance
with agreed deadlines. This in turn
requires a very close relationship with
our suppliers – over one hundred, all in
all. To improve monitoring, Pilatus has
introduced a new “Obsolescence Management” programme designed to identify obsolete electronic components
which can no longer be repaired or supplied. These can then be replaced by
new ones in good time, from different
suppliers if necessary. In the past,
some manufacturers have found themselves facing claims for damages running into millions when they failed to
identify external components which
were no longer available for delivery.
We do not intend to let that happen at
Pilatus. We have also made every effort
23
to encourage our suppliers to set up
their own Obsolescence Management
programmes.
Smooth in-house operations
Our “Information, Communication, Technologies” department (ICT) is charged
with the ongoing task of optimising our
procedures and modernising in-house
communications to meet user needs.
With that in mind, our internal telephone system is gradually being
phased out and replaced by state-ofthe-art Internet-based systems. Customer enquiries are also gradually giving way to direct query tools. In all
cases, the goal is to maximise the
availability of the aircraft we sell.
Another important project focused on
optimising our internal logistics, the
goals here being to simplify and safeguard production and assembly processes. In addition, a new logistics building featuring a fully automatic 24 meter
high-bay warehouse is currently at the
planning phase. The same building will
also provide office accommodation for
our entire logistics operations, procurement, supplier quality management, IT
and our new data-processing centre.
Increased production resources
The magnitude of the orders received
during the year under review led to a
rapid increase in the number of our
Pilatus aircraft LTD
annual report 2012
OPERATIONS
production employees. Some 50 new
jobs were created. All in all, 370 employees and 60 apprentices accomplished
413 000 production hours and around
110 000 machine hours. We expect to
recruit a further 50 employees in 2013.
and workmanship. We understand the
importance of promoting and safeguarding our corporate culture, and will
devote the greatest of care to the
induction of our new employees.
Extended workbench – providing
impetus for the region
The large volume of new orders allowed
us to outsource substantially more
work. Orders worth some eleven million
Swiss francs were placed with other
Swiss businesses located mostly in
central Switzerland.
Pilatus will continue to generate work
for regional companies in the near
future. Hangar 24 is currently under
construction, and should be ready for
use by mid-2013. The new hangar will
provide much-needed space for prototype work, pilot offices and training
rooms. The total investment amounts
to around six million Swiss francs.
More assembly personnel required
Some 50 new assembly jobs were created as a direct result of the three
large orders from India, Saudi Arabia
and Qatar. We plan to recruit another
similar sized group of new employees
in 2013. The rapid growth in staff numbers requires careful supervision and
management to uphold the traditionally
high standards of Pilatus production
The year under review was the first ever
occasion that Pilatus has had four different aircraft types in production at the
same time: the PC-12 NG, the PC-7 MkII,
the PC-21 and the PC-6. We are happy
to report that production goals were
met in full despite the added challenge
which this represented.
Research & Development for
ongoing orders
Technical development in the fields of
flight control and computer-based training is extremely fast-paced. The first
ever serial production PC-21 to come
off our production line made its maiden
flight in August 2005. By 2011, we were
already making the modifications required to bring it into line with the latest
technology, ready for new orders and
deliveries. The Final Operating Configuration for the fleet of PC-21s delivered
to the United Arab Emirates included
Vector Map Overlay and Synthetic Aperture Radar. Both functions facilitate recognition of the Earth’s three-dimensional surface on a two-dimensional screen.
A new system designed to produce a
trail of coloured smoke for use at air
shows was also developed and installed.
24
25
Pilatus aircraft LTD
annual report 2012
OPERATIONS
The Botswana Air Force commissioned
us to install new radio equipment and
search & rescue systems into its fleet
of PC-7 MkIIs. Optimisation work also
went ahead on the PC-7 MkIIs destined
for India; this included fitting ejector
seats for a wider range of body weights.
The training system was upgraded to
feature a Mission Debriefing System
allowing detailed recording of training
flights for subsequent playback on
screen. Some 800 component parts –
representing around 30 percent of the
entire aircraft – were optimised for the
new PC-7 MkII.
under report, with 2810 safe landings.
That is equivalent to almost one and a
half billion kilometres or over 36 times
around the earth at the Equator! This
impressive performance includes demo
flights for new or potential customers,
training flights and flight tests. Once
again, there were no accidents to report.
The hydraulically operated retractable
undercarriage on the PC-12 NG was
replaced with a newly designed electromechanical version which underwent
rigorous testing in the harsh Canadian
environment. This innovation will have a
positive impact on life cycle costs.
Over 3000 hours in the air
The Pilatus Flight Department, which
manages all company flights, documented 3030 hours in the air during the year
Quality Management: Always a
top priority
Aircraft development, manufacture and
maintenance work is subject to various
statutory approvals, all of which are
regularly audited by the official instances. In addition, Pilatus also meets the
requirements of EN 9100. The recertification procedure took place in spring
2012 and was conducted by SQS to the
latest criteria defined in EN 9100:2009.
This certificate is the proof that Pilatus
satisfies the specifications of the highest applicable standard in the aircraft
industry.
As you would expect, we monitor the
quality of bought-in components and
the certifications held by our suppliers
26
very closely. The year under review saw
us define a new process for that very
purpose. It is now implemented at all
times and is of course subject to
ongoing improvement.
The three big orders of 2012 posed a
major challenge in terms of quality
management: a partial reorganisation
of our production lines was required,
and new employees had to be recruited.
Alongside the provision of appropriate
training for our new colleagues, we
focused on the need to make sure they
fully understood the importance of
upholding Pilatus standards of quality.
Safety Management System: an
integral part of the Pilatus culture
Launched in 2011, the Safety Management System (SMS) is now firmly established throughout the company and is
fully embraced by our workforce. It has
made a lasting improvement to our
safety culture here at Pilatus. Under the
SMS, a simple reporting system allows
employees to draw immediate attention to safety-relevant aspects of our
“The PC-12 and PC-6 are ideal for the Chinese market, and perfect for flying to the many
small airports dotted across the country. Both aircraft offer exceptional performance in terms
of their ability to land on and take off from short and unmade runways. They are safe, very
versatile and extremely dependable. The Chinese really appreciate such high quality Swiss
products! The PC-6 and PC-12 meet my expectations in full – and those of my customers!”
Zhang Wei, first to operate a PC-6 and PC-12 in China
processes and organisation. That in
turn means we can initiate and implement company-wide improvements without delay.
Environmental protection: an
ongoing obligation
Our decision to equip the new Hangar
24 with an air-conditioning system
capable of operating with ground water
is another step in the process of protecting the environment to the best of
our ability. Pilatus has already shown
that environmental protection is a concept with which we are very familiar:
our assembly hall was built from local
timber and all the buildings at the
Stans site are heated via a central
wood chip-fired system.
Environmental protection is now firmly
anchored in the Pilatus Vision familiar
to all our employees. The wording is
unambiguous: “We actively protect our
environment by means of sustainable,
environmentally-friendly decisions in all
areas of our operations.”
It is no surprise, then, that Pilatus was
awarded ISO 14001 certification over
ten years ago. The interim audit performed by SQS in March 2012 did not
specify any corrective measures. This
certificate confirms that the Pilatus
environmental management system
fully meets the requirements of ISO
14001:2004 in relation to the “development, manufacture, sale and maintenance of aircraft, aircraft systems and
training systems”.
Whether noise attenuation, reduction of
toxic substances in wastewater or the
installation of more efficient ventilation
systems – the environment is always a
prime concern whatever the scope of
the project. Pilatus is quick to act wherever there is an environmental benefit
to be gained at reasonable cost.
27
Grand Prismatic Spring, Yellowstone National Park, Wyoming, USA
44º31' N, 110º50' W
Pilatus aircraft LTD
annual report 2012
HUMAN RESOURCES
ten PERCENT GROWTH
IN JOBS AT Stans
2012 saw many Swiss companies
having to make further job cuts, particularly in the industrial exports sector.
Bucking the trend, a set of healthy
order books meant Pilatus was able to
create new jobs – and more than just a
handful! The workforce based at the
headquarters in Stans grew from 1302
to 1433 during the year under review:
an increase of ten percent. Further jobs
are to be created in 2013 as we continue our search for suitably qualified
personnel.
Qualified staff in high demand
Pilatus is an employer with many benefits to offer, including a high degree of
job security and products with huge
appeal. Pilatus received no fewer than
7000 applications in financial 2012.
But Pilatus is looking for people who
are both eager to work and suitably
qualified to fill specialist functions.
Such people are hard to find in sufficient numbers, be it in the Swiss job
market or even at international level.
Aware that the situation is a difficult
one, Pilatus invests much in initial and
ongoing training for its own workforce –
over one million Swiss francs during the
year under review. Financial contributions were available for courses in languages, technology, IT, management
and other specialist areas. Every
course is an investment in the future!
29
Over 100 trainees at Stans
Training for young apprentices has long
been a priority at Pilatus, and the
number of youngsters who choose to
complete apprenticeships with us grows
every year. Twenty-four apprentices successfully completed their final exams in
2012, achieving an excellent average
grade of 5.17. Thirteen of them went
on to take up firm employment with
Pilatus. It is also worth mentioning that
we attract more and more young
women, and they often rank amongst
our top performers. Amongst last year’s
best results, it was a woman polymechanic who achieved the outstanding
overall grade of 5.5.
We welcomed 27 new apprentices last
summer. By the end of the year, we
were providing training for 102 apprentices in ten different professions. Twothirds of our trainees come from canton
Nidwalden, the rest are drawn mainly
from neighbouring cantons.
Every year we host a big information
event for youngsters and their parents.
The aim is twofold: to attract keen,
interested applicants, and to give young
people the opportunity to acquire firstclass training in a fascinating industry.
The apprentices take care of all the
organisation themselves. Exceptionally
positive feedback indicates that the
event is much appreciated.
Cape fur seals and cormorants at Seal Island, Cape of Good Hope, South Africa
30
34º08' S, 18º35' E
Pilatus aircraft LTD
annual report 2012
Airport Buochs ltd
AIRPORT STALEMATE
Airport Buochs Ltd, the airport operating company, is owned on an equal
basis by Pilatus and canton Nidwalden.
Financial 2012 saw the start of
construction work on the new control
tower, the renewal of air traffic control
systems and the implementation of
“AirTrack” software, all of which will
help to remedy existing infrastructure
shortcomings. Greater rationalisation
has had a tangible beneficial impact:
air traffic operations have become safer
and administrative tasks have been
made more efficient. This is the welcome and very positive side of developments at the airport. On the other
hand, developments at the political
level have proved rather less encouraging. A forward-looking solution with
regard to the modalities of future airport ownership and use has still not
been found. The stalemate which has
blocked the airport problem for years
has yet to be resolved.
Satellite-based approaches
The year under review brought appreciable progress in efforts to create a satellite-based GNSS approach. An innovative procedure was defined in close
consultation with Skyguide, the Federal
Office of Civil Aviation and other external specialists. This will render it possible – and permissible – to commence
an approach into Buochs through the
dense alpine fog often encountered in
this area, meaning that pilots will no
longer be entirely dependent on arriving
in visual meteorological conditions.
31
Fewer flight operations
As expected, the total number of flight
movements was approximately fourteen
percent down on the previous year’s
figure. This drop in activity is essentially due to a temporary reduction in flight
operations at Pilatus as a result of the
stagnant business aviation market in
general. Flights by the Nidwalden gliding
club totalled 4301, slightly up on previous years. Total flight movements
came in at 14 252. Pilatus generated
4961 flight movements, down thirty-six
percent on previous years. The Swiss
Air Force made greater use of the airport with 1112 military flights. Sales
of fuel were very encouraging. This
service is much appreciated by airport
customers and revenues exceeded all
expectations.
Less financially successful
than in 2011
Besides “Iheimisch 2012”, a major
trade fair which attracts many visitors,
the airport did not attract any other
large events. The increase in revenue
generated by the sale of fuel was not
enough to offset this loss of income
plus the combined effect of reduced
revenue from flight operations and
expenditure incurred in connection with
developing the GNSS approach and
enhancing runway safety. These are the
reasons behind the failure to achieve
a balanced operating result in 2012.
Tractor in a field near Bozeman, Montana, USA
45º40' N, 111º02' W
33
Pilatus aircraft LTD
annual report 2012
Facts and Figures
Facts and figures of the pilatus Group
key indicators for the pilatus group
20082009201020112012
total sales (chf million)
661
620
688
781
aircraft sold
114
105
93
87
86
orders received (chf million)
988
433
355
416
2699
1197
1031
689
325
2426
order book value (chf million)
593
ebit (chf million)
55
78
88
108
38
ebiT as % of sales
8.3
12.6
12.8
13.8
6.4
70
82
112
123
52
10.6
13.3
16.3
15.7
8.8
cash-flow (net profit plus depreciation, chf million)
Cash-Flow as % of sales
investments in fixed assets (chf million)
23
9
5
9
7
investments in R&D (chf million)
37
41
49
67
68
ebit before r&D (chf million)
92
119
137
175
106
13.9
19.2
19.9
22.4
17.9
ebit before R&D as % of sales
Net Assets (CHF MILLION)
289283300304116
INVENTORIES (CHF MILLION)
271254412405390
CUSTOMER ADVANCES (CHF MILLION)
60 76201 214426
ebit as % of net assets
19.0
27.6
29.3
35.5
32.8
employees
13631330139514411576
BALANCE SHEET EXTRACT
2008 20092010 20112012
CURRENT ASSETS (CHF MILLION)
421
462
706
863
1066
LONG-TERM ASSETS (CHF MILLION)
164
160
143
132
119
TOTAL ASSETS (CHF MILLION)585
622 849 9951185
LIABILITIES (CHF MILLION)
247
233
383
449
635
EQUITY (CHF MILLION)
338
389
466
546
550
TOTAL LIABILITIES AND EQUITY (CHF MILLION)
585622849995
1185
EQUITY RATIO IN %
57.862.554.954.946.4
34
2011
2012
gross sales
%MCHF
%MCHF
Pilatus Aircraft LTD, Stans *
74.9
584.3
62.1
368.8
Pilatus Business Aircraft Ltd, USA
22.0
172.0
32.2
190.9
0.9
6.9
3.4
19.9
2.2
17.5
2.3
13.5
Pilatus Australia Pty Ltd, Australia
Altenrhein Aviation LTD, Altenrhein
Total
100.0780.7
100.0593.1
* Consolidated via Pilatus Stans
CHF/USD translation rates 2011: 0.8854 / 2012: 0.9377
CHF/AUD translation rates 2011: 0.9137 / 2012: 0.9708
sales by region
%MCHF
%MCHF
asia
50.3392.3
34.6205.0
the americas
24.5
33.1
europe
17.0132.7
191.5
africa
5.946.1
australia
2.318.1
Total
sales by business unit
196.6
17.9106.1
9.254.5
5.230.9
100.0780.7
100.0593.1
%MCHF
%MCHF
General Aviation (PC-12) 33.3
259.9
46.6
276.3
Government Aviation (Trainer)
59.6
465.2
43.9
260.4
Maintenance (inclusive PC-6)
6.7
52.3
8.9
52.9
Subcontracting
0.43.3
Total
100.0780.7
aircraft sold
Number of aircraft
0.63.5
100.0593.1
Number of aircraft
PC-126362
Trainer1819
PC-665
Total8786
35
Pilatus aircraft LTD
annual report 2012
Facts and Figures
20112012
Employees by business unit
%employees
General Aviation
54.6787
Government Aviation
31.9
Maintenance
12.3177
subcontracting
460
1.217
Total
100.01441
employees by function
%
%employees
44.3699
42.3
666
12.1190
1.321
100.01576
employees%
employees
production
51.0735
51.1806
development
19.5281
18.6292
sales and services
13.6
14.2
logistics
197
9.9142
Administration
6.0 86
Total
100.01441
employees by company
%employees
Pilatus aircraft LTD, Stans
225
9.5149
6.6104
100.01576
%employees
90.4
1302
90.9
1433
Pilatus Business Aircraft Ltd, USA
4.6
66
3.9
62
Altenrhein Aviation LTD, Altenrhein
3.7
54
4.0
62
1.3
19
1.2
19
Pilatus Australia Pty Ltd, Australia
Total
100.01441
36
100.01576
management
Pilatus aircraft LTD
annual report 2012
Management
1
2
3
4
5
6
7
8
management of pilatus aircraft ltd
subsidiaries
1 Markus Bucher
Pilatus Business Aircraft LTD, Broomfield, USA
2oscar j. schwenkceo
3 Jim Roche
4 BRUNO CERVIA
5daniel geiser
OPERATIONS
Government Aviation
Oscar J. Schwenk
Chairman
Thomas Bosshard
CEO
RESEARCH & DEVELOPMENT
AIRCRAFT ASSEMBLY & MAINTENANCE
(SINCE 1 julY 2012)
Pilatus Australia PTY LTD, Adelaide, Australia
Oscar J. Schwenk
Chairman
Sebastian Lip
CEO
6 Fredy Glarnermanufacturing
7 Max Zuberbühler
8thomas ochsenbein
CFO & Business Support
Altenrhein Aviation LTD, Altenrhein, Switzerland
9 Ignaz Gretener General Aviation
Oscar J. Schwenk
Chairman
andy roth
CEO
LOGISTICS & INFORMATICS
37
9
Nets used for drying algae, Wando Archipelago, South Korea
34º19' N, 127º05' E
Board
Pilatus aircraft LTD
annual report 2012
Board
1
2
3
Board of directors of pilatus aircraft ltd
1 GRATIAN ANDA
vice chairman
2 JÖRG BURKART
Member
3 GERHARD BEINDORFF
Member
4
OSCAR J. SCHWENK
chairman
5 PETER RUOF
member
6 BERNHARD MÜLLER
member
39
4
5
6
produced bypilatus aircraft ltd, p. o. box 992, 6371 stans, switzerland, www.pilatus-aircraft.com
editor
Commwork AG, zug, switzerland
designpilatus aircraft ltd, stans, switzerland
print
Engelberger Druck AG, Stans, switzerland
pictures “earth from above" YANN ARTHUS-BERTRAND
Copies of the annual report are obtainable in German and English by calling +41 41 619 61 11
Reproduction permitted with reference to source.
Pilatus Aircraft Ltd
Altenrhein Aviation Ltd
P.O. Box 992
Flughafenstrasse 11
6371 Stans, Switzerland
9423 Altenrhein, Switzerland
Phone +41 41 619 61 11
Phone +41 71 858 51 85
Fax +41 41 610 92 30
Fax +41 71 858 51 95
www.pilatus-aircraft.com
www.altenrhein-aviation.com
info@pilatus-aircraft.com
info@altenrhein-aviation.com
Pilatus Business Aircraft Ltd
Pilatus Abu Dhabi Branch
Rocky Mountain Metropolitan Airport
P.O. Box 33645
11755 Airport Way
Al Fahim Headquarters
Broomfield, CO 80021, USA
Office 314, Mussafah
Phone +1 303 465 9099
Abu Dhabi, United Arab Emirates
Fax +1 303 465 9190
Phone +971 2 555 7685
www.pilatus-aircraft.com
Fax +971 2 555 7686
info@pilbal.com
www.pilatus-aircraft.com
uae@pilatus-aircraft.com
Pilatus Australia Pty Ltd
17 James Schofield Drive
Adelaide Airport SA 5950, Australia
Phone +61 8 8234 4433
Fax +61 8 8234 4499
www.pilatus-aircraft.com
info@pilatus.com.au