PILATUS AIRCRAFT LTD ANNUAL REPORT 2016 · Pilatus Aircraft Ltd | Annual Report 2016. ... PC-21: France. ... definitely a role model. Yes, there is a lot in a name,

PILATUS AIRCRAFT LTD

ANNUAL REPORT 2016

EDITORIALEXECUTIVE MANAGEMENT REPORT

BUSINESS UNIT GOVERNMENT AVIATIONBUSINESS UNIT GENERAL AVIATION

PC-24 PROJECT

OPERATIONSHUMAN RESOURCESAIRPORT BUOCHS LTD

FACTS AND FIGURESMANAGEMENTBOARD

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Pilatus Aircraft Ltd | Annual Report 2016

2012 2013 2014 2015 20160

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KEY INDICATORS OF THE PILATUS GROUP 2012 2013 2014 2015 2016

Total Sales (CHF million) 593 1014 1174 1122 821

Aircraft in Net Sales 86 112 127 121 117

Orders Received (CHF million) 2699 410 561 1367 1087

Order Book Value (CHF million) 2426 1817 1226 1470 1744

EBIT (CHF million) 38 145 200 191 89

EBIT as % of Sales 6.4 14.3 17.0 17.0 10.8

Cash Flow (net profit plus depreciation, CHF million) 52 143 195 178 95

Cash Flow as % of Sales 8.8 14.1 16.6 15.9 11.6

Investments in Fixed Assets (CHF million) 7 18 36 42 49

Investments in R&D (CHF million) 68 83 97 107 101

EBIT before R&D (CHF million) 106 228 297 298 190

EBIT before R&D as % of Sales 17.9 22.5 25.3 26.6 23.1

Net Assets (CHF million) 116 163 210 324 398

Inventories (CHF million) 390 688 754 639 485

Customer Advances (CHF million) 426 654 758 497 204

EBIT as % of Net Assets 32.8 89.0 95.2 59.0 22.4

Total Sales (CHF million)EBIT (CHF million)

EBIT AND TOTAL SALES (CHF MILLION)OF THE PILATUS GROUP

EBIT EBIT before R&D Total Sales

KEY FIGURES AT A GLANCEFACTS AND FIGURES

Pilatus Aircraft Ltd | Annual Report 2016

2007

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Full-time 1372 1363 1330 1395 1441 1576 1752 1882 1905 1961 Equivalents

Number of Full- time Equivalents

EMPLOYEE GROWTH OF THE PILATUS GROUP

Number of Full-time Equivalents

BALANCE SHEET EXTRACT OF THE PILATUS GROUP 2012 2013 2014 2015 2016

Current Assets (CHF million) 1066 1457 1768 1646 1259

Long-term Assets (CHF million) 119 117 140 173 214

Total Assets (CHF million) 1185 1574 1908 1819 1473

Liabilities (CHF million) 635 929 1113 870 520

Equity (CHF million) 550 645 795 949 953

Total Liabilities and Equity (CHF million) 1185 1574 1908 1819 1473

Equity Ratio in % 1 46.4 41.0 41.7 52.2 64.7

1 The PoC accruals and the customer advances are disclosed using the gross method (PoC = Percentage of Completion). A net presentation would lead to an equity ratio of 68 %.

2016 SALES BY REGION 2016 SALES BY BUSINESS UNITS

The Americas 35.0 %Asia 29.7 %Europe 17.1 %Australia 14.8 %Africa 3.4 %

General Aviation 55.6 %Government Aviation 42.0 %Other 2.4 %

2016: BETTER THAN FORECAST

EDITORIAL

Pilatus Aircraft Ltd | Annual Report 2016 | 3

However one looks at it, 2016 was a successful year!

We knew, of course, that sales revenues would fall

short of the levels achieved in the absolute record

years of 2014 and 2015. Major orders for trainer

fleets do not materialise across the year with the

same regularity as orders for individual general

aviation aircraft. But not only were sales better than

expected at the end of 2016, we had also won an

exceptionally prestigious new customer for the

PC-21: France. There were other successes worthy

of celebration, too.

France is a member of the European Union and,

when government contracts are awarded, EU

members often have a preference for their own

industries, or those of other EU members. With its

strong national aircraft industry and powerful air

force, France was not motivated by political

expediency this time, but rather by a combination

of systems’ performance, investment and operating

costs. It is very encouraging to see France opt for

the most efficient Training System on which to

prepare its future pilots for missions flown with its

state-of-the-art Rafale fighter: the Pilatus PC-21.

All without the offset compensation obligations

which drive costs up. The order arrived shortly before

the turn of the year. 17 PC-21s will go to France

from 2018 onwards.

PC-21 orders are just part of the overall success story

of 2016. Where the PC-12 NG is concerned, we sold

30 percent more aircraft than in 2015: 91 compared

to 70 in the previous year. The PC-12 NG is a complete

success in every respect. 2017 will see us deliver our

1,500th PC-12. And the PC-12 fleet as a whole will

complete its six millionth hour in the air. The PC-12 is

now registered in 55 countries. It is a level of success

which even we optimists here at Pilatus would not

have dared to predict. Our commitment to the PC-12

remains as high as ever, and we will continue to

enhance this product moving forward into the future.

52°4'N, 0°36'W

2017 – THE YEAR OF PC-24 CERTIFICATION

2017 will be a decisive year for the PC-24 develop-

ment programme. Our goal is to obtain aircraft

certification towards the end of 2017. Initial customer

deliveries are scheduled immediately afterwards.

It will be an extremely challenging time. I cannot

deny, I am very excited about obtaining certification

of the Pilatus PC-24 and seeing it enter the market.

But excitement will do nothing to advance us.

We shall keep our feet firmly on the ground, stable

and unwavering, whatever happens. Our name,

Pilatus, comes from Mount Pilatus, a mountain on

our doorstep. Standing atop the summit one

may gaze upon never-ending views, blighted at

moments by rain, wind and violent storms. But come

thunder or lightning, the Pilatus stands solid and

imperturbable. In that respect, the Pilatus is most

definitely a role model. Yes, there is a lot in a name,

no doubt about it!

EDITORIAL

Success also stems from the good progress made

with the PC-24 development programme, as well as

from the excellent results achieved during the test

flights completed with the prototypes P01 and P02.

Approximately one year ahead of the market entry in

2017, progress with the first Pilatus Jet is so good

that we had absolutely no hesitation in investing just

under 200 million Swiss francs in our PC-24 series

production operations. Our third prototype P03,

representing the first series-conformal aircraft,

recently successfully completed its maiden flight.

We will be unveiling P03 and its exclusive interior to

the public in May 2017 at the European Business

Aviation Convention & Exhibition EBACE in Geneva,

Switzerland. By mid-April 2017, the three Super

Versatile Jets together had already completed over

1,500 hours.

Analysing the year 2016 in terms of our customer

service business, we note a number of emerging

changes. In the business unit Government Aviation,

support contracts extending across several years

are growing in importance and financial significance.

More and more customers are realising that our

expertise reaches beyond the sale of exceptionally

innovative aircraft and training systems, and

also includes the provision of local customer-oriented

support. Air forces need trainers with total mission-

availability and Pilatus needs customers who

are 100 percent happy with Pilatus. What could be

more obvious than a close and long-term partnership?

Sales revenue of 821 million Swiss francs in 2016 is

a success. Orders in hand were worth 1.7 billion

Swiss francs as at the end of financial 2016 – not

counting future revenue earnings from the PC-24!

Oscar J. Schwenk

Chairman


XX°XX' N, X°XX' EXX°XX' S, XX°XX' E38°19'N, 110°22'W

We knew that 2016 would be an exceptionally

challenging year – for everyone who works at Pilatus.

By the end of the year it was clear: our employees

had worked hard to deliver innovative results, achieving

and even exceeding our most important goals, and

meeting numerous major challenges in the process.

The list of achievements is long. However, I would like

to focus on a few of them in particular. It illustrates

how different and varied are the tasks here at Pilatus,

and explains where the biggest challenges lay, and

how we met them as a team.

In addition to 17 PC-21s sold to France, we also

netted another two PC-21 Training System sales

successes in 2016: two PC-21s for one of the world’s

most prestigious test pilot training centres, the

Empire Test Pilots’ School in Wiltshire, southern

England, and two additional PC-21s for Jordan.

Meanwhile, existing customers such as Singapore,

Qatar and Switzerland provide unambiguous confir-

mation that the PC-21 Training System is absolutely

capable of meeting the expectations invested in it:

at between 95 and 100 percent, fleet availability

rates are extremely impressive.

With continuous further development and satisfaction

of customer requirements in mind, we had over 200

modifications to make to the 49 PC-21s sold to the

Australian Air Force at the end of 2015. Despite

the extensive development work associated with this

order, the first PC-21 of the fleet took off on its

maiden flight in July, just seven months after the

contract was signed. At the end of February 2017 we

attended AVALON 2017, the Australian International

Airshow and Aerospace & Defence Exposition

at Geelong in the state of Victoria with the first two

PC-21s for Australia.

We applied ourselves to carrying out the wishes of the

Royal Jordanian Air Force at the same energetic pace.

The original contract for nine PC-9 Ms was amended

to eight PC-21s in February. First production test

flights went ahead just nine months later in November.

In November, the “Flight International” aviation

magazine also carried a report on figures published

by the General Aviation Manufacturers Association

GAMA, indicating that every major manufacturer,

with the exception of Pilatus, had to battle

with stagnating or declining sales figures in 2016.


2016 – A YEAR OF CHALLENGES

EXECUTIVE MANAGEMENT REPORT

Pilatus sold 91 PC-12 NGs during the year under

review, a 30 percent increase on the previous year,

and that is an outstanding result. This success is

due partly to the market launch of the enhanced

“Model 16”, and partly to the top-notch performance

of our worldwide sales network.

Customer service for the PC-12 was also voted

best in category for the 15th time in a row.

What better acknowledgement of our vision –

the Pilatus Class!

2017 will be “the year of truth” for Pilatus. The

focus will be firmly on the certification and market

entry of the PC-24. Our goal, obviously, is to meet

the promises made to our customers. Beyond the

outstanding results already achieved under the

PC-24 programme, this will involve making the

requisite infrastructure modifications for PC-24

series production.

In 2016, Pilatus went ahead with a substantial

investment at our Broomfield site in the state of

Colorado, USA. At the Rocky Mountain Metropolitan

Airport, north of the capital of Denver, a new building

costing approximately 23 million US dollars is under

construction. The goal is to centralise the final

assembly operations and the administration of our

subsidiary, Pilatus Business Aircraft Ltd. The new

building will be more modern, more attractive and

better designed to meet the requirements of changing

operational processes. The market entry of the

PC-24 will see the local workforce grow to around

200 employees.

In Stans, work proceeded apace on the new 9,500

square metre (102,257 square foot) surface treatment

centre, and also on a new 10,000 square metre

(107,639 square foot) assembly hall designed to

offer for flexible utilisation. Construction work on

these two additional buildings began in 2016, with

the goal of seeing them go into operation in 2017.

EXECUTIVE MANAGEMENT REPORT

We have also leased a hangar in Kriens, close to

Lucerne, to provide temporary accommodation for our

PC-24 structural assembly work. Some 40 million Swiss

francs have additionally been invested in a new

generation of milling machines. Pilatus now has one of

the world’s most modern, efficient installations for

processing milled aluminium parts up to four metres

(13 feet) long.

But success does not come of itself. It is always

generated by well trained, highly motivated, dedicated

employees. Success further depends on the capacity

of managers and project leaders to pursue goals

across the company as a whole, as a team, con-

trolling and monitoring the achievement of these

targets. We therefore organised numerous training

courses throughout 2016, as usual, and continued

to invest in training for our management staff.

The executive management and core management

staff jointly defined a set of binding management

principles. Those relating to our function as role

models are cited below:

We take time for leadership obligations and we

assume responsibility. We motivate and encourage our employees in line

with their abilities. We promote teamwork and collaborate closely

across the company. We are frank and respectful in our relationships

with others and we take our social responsibility

seriously.

Under the heading of “commitment”, one of our

management principles states that “we acknowledge

and reward above-average performance”. Even if

consolidated sales revenue and profit were lower in

2016 than in the record years of 2014 and 2015,

we consider that every Pilatus employee delivered

a top-notch performance, investing a huge amount of

effort in the future. Once again, our appreciation

and recognition are due for all you have achieved.

We are therefore delighted to thank you and reward

your commitment with the maximum possible profit-

sharing payout.


Markus Bucher

Chief Executive Officer

HOW PILATUS CAME BY ITS NAME …The Pilatus mountain massif stands on the edge of Lake Lucerne, the gateway to the Alps, where the three cantons of Lucerne, Nidwalden and Obwalden meet. The wild and fissured rocks of “dragon mountain” – as Mount Pilatus is also known – are a widely recognised landmark in the region. Its silhouette resembles a flattened, sawn-off pyramid. A mountain unto itself, it presents a unique and different aspect from every angle.

On a clear day, exceptional views over a breathtaking panorama of up to 73 alpine peaks can be enjoyed from the summit of the Pilatus. The scenery is nothing short of majestic: deep blue lakes, snow-covered peaks and green meadows as far as the eye can see.

A very special aircraft production facility was established at the foot of the Pilatus in 1939. Its name was inherited from the mountain.

47°3'N, 8°20'E

MORE AND MORE AIR FORCES CHOOSE THE PC-21

BUSINESS UNIT GOVERNMENT AVIATION

12 | Pilatus Aircraft Ltd | Annual Report 2016

Our business unit Government Aviation is primarily

concerned with large military contracts, which can

produce big fluctuations in sales figures. Whereas

sales performance in 2015 was well above average,

2016 was relatively weak by comparison with sales

of 345 million Swiss francs.

While such fluctuations give rise to considerable

organisational challenges, the long-term trend in this

business unit confirms that they are not decisive for

overall business success. A single annual report

focuses on a timeframe much shorter than the more

realistic three-year project period typically seen in

business unit Government Aviation. Despite the

decline in sales we rate 2016 as a successful year –

not least because of the new PC-21 contracts which

were signed.

GOOD NEWS FROM EUROPE

The best news came just before the end of the year:

the French Air Force, the “Armée de l’air française”,

opted for the PC-21 Training System with an order for

17 PC-21s. They will be used to train the young

military pilots who will later go on to fly the fifth

generation Dassault Rafale multirole fighter aircraft.

The contract with the French Air Force was signed with

Babcock Mission Critical Services France. Pilatus will

act as a subcontractor with responsibility for supplying

the PC-21s and ground-based training material. This

order is especially encouraging, in that a second

European Air Force besides Switzerland has now

chosen the world’s most up-to-date training system.

Another two PC-21s will go to a prestigious customer

in England, namely to the Empire Test Pilots’ School in

Wiltshire. This flight testing and test pilot centre

specialises in training test pilots and flight test

engineers from the United Kingdom, but also from

other international customers. The order for the two

PC-21s was placed by QinetiQ, operator of the Empire

Test Pilots’ School.

The Irish Air Corps also signed a contract for one

PC-9 M in October 2016, which will join the existing

fleet. Production work is already underway, and

delivery is scheduled for summer 2017.

JORDAN CHANGES TO THE PC-21

The Royal Jordanian Air Force originally oriented its

training programme around the PC-9 M. At the end of

2015, just six months after ordering nine PC-9 Ms,

the air force informed Pilatus of its intention to

upgrade to the PC-21. Negotiations started in January

2016 and the new contract for eight PC-21s with

Ground-Based Training System was signed in February

2016. The agreement also includes fleet maintenance

to be provided by Pilatus for the first five years.

47°0'N, 8°29'E

“Reaching 500,000 flying hours for the PC-9 is a significant milestone in the life of any aircraft fleet and

one that could not have been achieved without the dedicated support of the Pilatus team. The Air Force looks

forward to many more years flying Pilatus aircraft through the remaining years of the PC-9 and into the future

with the PC-21.”

Air Marshal Leo Davies, AO, CSC, Chief of Royal Australian Air Force

25°7'N, 51°18'E



A Pilatus engineer will be seconded to the Royal

Jordanian Air Force for the first two years. The

previous contract for the delivery of PC-9 M trainers

was cancelled.

The maiden flight by the first PC-21 for the Royal

Jordanian Air Force went ahead in mid-November

2016, just nine months after the contract was

concluded. With production operations in full swing,

the Royal Jordanian Air Force additionally informed

Pilatus of its decision to proceed with an option for a

further two aircraft. That brings the total fleet to ten

PC-21s, two of which were ready to fly by the end

of the year, with two others at an advanced stage of

production. The remaining PC-21s and Ground-Based

Training System will be delivered during the second

half of 2017, the goal being to have the entire fleet

based in Jordan and ready for operation from the first

half of 2018.

BIG STEPS FORWARD IN AUSTRALIA

Shortly before the end of 2015, the Royal Australian

Air Force signed a contract taking effect from

1 January 2016 with a consortium consisting of

Lockheed Martin, Hawker Pacific and Pilatus.

The order for 49 PC-21s, to be delivered to four

Australian air force bases in East Sale, Pearce,

Edinburgh and Williamtown, plus seven Ground-Based

Training Systems for delivery to East Sale and

Pearce, rapidly set a lot in motion at Pilatus. The first

PC-21 for Australia took off on its maiden flight

in Stans in July 2016. We had produced and certified

six PC-21s to the air force’s specifications by the

end of 2016. The goal is to ensure that the first

PC-21s are ready to go into operation in Australia in

July 2017.

SUPPORT CONTRACTS PLAY AN INCREASINGLY

IMPORTANT ROLE

Following the start of operational use of the first PC-21s

by the Royal Saudi Air Force in December 2014, the

55th and final PC-21 was delivered to the air force in

March 2016. All training systems have been delivered

and commissioned in the intervening period, including

an ejection seat training system. An initial group of

Saudi cadet pilots also completed the first training

course based entirely on the PC-21 Training System.

The last of the 24 PC-21s ordered by the Qatar Emiri

Air Force were delivered in May 2016. All PC-21s

delivered to Qatar are in use at the Al Udeid air force

base close to Doha. Several Pilatus Ground-Based

Training Systems have also been installed and put into

operation at the same location. As agreed, Pilatus

provides local support as required: we are pleased to

report 100 percent availability for the PC-21 fleet at

the Al Udeid air force base in 2016.

The PC-7 MkII fleet operated by the Indian Air Force

continues to perform very well. No fewer than 260

students received instruction on these trainers at the

Air Force Academy Dundigal in Hyderabad, Telangana,



during the year under review. Over 30 instructors were

trained on ten other PC-7 MkII trainers at the Air

Force Base Tambaram in Chennai, Tamil Nadu. By the

end of 2016, Indian Air Force pilots had flown over

60,000 hours, including over 125,000 landings,

on the 75 PC-7 MkII trainers delivered to India. Over

20,000 training hours were also completed on the

ground-based training systems installed in Dundigal

and in Tambaram. Pilatus employees were, and still

are, at hand locally to provide the required systems

maintenance services.

The Royal Malaysian Air Force is a long-standing

Pilatus customer, adding PC-7 MkIIs to its fleet of

PC-7s in 2001. A further order for another five

PC-7 MkIIs was received in 2014. The delivery flight

and official handover of the eye-catching red trainers

took place in summer 2016. Pilatus employees will

remain in Alor Setar, capital of the Malaysian state

of Kedah, until mid-2017 to accompany the roll-out

of these additional aircraft.

CONSTRUCTIVE LONG-TERM PARTNERSHIPS

Our partnership with the Swiss Air Force and

armasuisse, known by the project name JEPAS PC-21,

is very successful. PC-21 availability was over 95

percent during the year under review.

The Republic of Singapore Air Force trains at the air

force base in Pearce, Western Australia. Over 7,000

further hours were completed on the 19 PC-21s

as part of the “Basic Wings Course”. A 100 percent

mission success rate was achieved in the third

quarter. Local teamwork between representatives from

Hawker Pacific and Pilatus is extremely good.

In 2015, seeking to ensure continuing efficient pilot

training, the Royal Netherlands Air Force commis-

sioned Pilatus to update its 13 PC-7 trainers with a

state-of-the-art cockpit. The first aircraft was flown

to Stans for modification in 2016 and good progress

was made on the prototype during the year.

The maiden flight took place in February 2017.

The remaining aircraft are scheduled for modification

at Pilatus, one by one.

GOOD USE OF THE TRAINING CENTRE IN STANS

The Training Centre in Stans was used for a total

of 91 training courses during the year under review:

61 for Pilatus customers, and 30 Pilatus staff

courses. Of the 590 people who attended the

courses, 83 were pilots, 209 were engineers and

298 work in other functions. All in all, we provided

5,850 hours of training over a total of 681

training days.

PARTICIPATION AT AIR SHOWS

As in previous years, the business unit Government

Aviation was present at some of the biggest interna-

tional air shows in 2016: the Unmanned Systems

Exhibition & Conference UMEX in Abu Dhabi in

the United Arab Emirates in March, for example, the

Special Operation Forces Exhibition & Conference

SOFEX in Amman, Jordan, in May, and the

Farnborough International Airshow FIA in England

in July.

46º12' N, 6º9' E46°24'N, 8°3'E

“On behalf of the Royal Malaysian Air Force (RMAF), I take great pleasure in extending my heartfelt gratitude

to Pilatus Aircraft Ltd for the continuous support, commitment and kind assistance rendered to RMAF,

especially in relation to the provision of timely support for RMAF’s PC-7/PC-7 MkII aircraft. I’m pleased to

acknowledge the mutually beneficial cooperation and collaboration established between the RMAF and

Pilatus Aircraft Ltd over these years.”

General Tan Sri Dato’ Sri Roslan bin Saad, Chief of Royal Malaysian Air Force

FASCINATING PLANT AND ANIMAL LIFELush alpine meadows, crystal clear mountain streams and amazing rock formations make up the multifaceted natural world of Mount Pilatus. No wonder that this region is home to over 900 different types of plants.

Many animals also live on the mountain. With a little luck, you will catch sight of marmots, snow grouse and, perched upon the highest rocks, ibex and chamois. The ibex colony has lived on Mount Pilatus for over 40 years and is a popular attraction well beyond cantonal borders.

The rocks of Mount Pilatus are made up of sediments dating from the Cretaceous and Palaeogene periods. This calcareous stone was formed in a sea that stretched between the Aare and Gotthard massifs. The collision of the African and European plates pushed the deposits upwards in mighty folds, or layers, moving them far to the north. Even today, one can still come across fossils of mussels, oysters, sea urchins and sea snails at the top of Pilatus, a reminder of the marine origins of these calcareous rocks.

46°58'N, 8°15'E

39°9'N, 107°42'W


ANOTHER SUCCESSFUL YEARBUSINESS UNIT GENERAL AVIATION

There was a substantial increase in the European

market: a total of 20 PC-12 NGs were sold and

delivered during the year under review compared to

eleven in 2015. The frontrunner, with five aircraft, is

Germany. Of the 236 PC-12s delivered to 28 different

European countries thus far, the greatest number,

namely 50, have gone to Switzerland, 38 to Great

Britain and 27 to Germany.

Asia remains a difficult market. Following two years

with no sales at all, three PC-12 NGs found customers

during the year under review. One went to China, and

two went to the United Arab Emirates.

Africa, a continent predestined for the PC-12,

faces economic problems of a huge magnitude.

The South African rand has lost over 40 percent

against the US dollar in the past five years, for

example. Pilatus sold twelve PC-12s to South Africa

in 1998, an absolute record year in that respect,

and sales volumes remained stable at five or six

aircraft per year prior to the economic crisis of 2007

onwards. In contrast, not a single aircraft was sold to

South Africa in 2013 or 2014. One PC-12 NG was

sold in 2015, and two in 2016. Two aircraft were

delivered to Namibia for the first time during the year

under review. Namibia is the sixth African country in

which PC-12s are registered.

The General Aviation market is a challenging one,

despite a worldwide reduction in interest rates making

financing easier to obtain than in the past. Numerous

aircraft manufacturers struggled with stagnant or

declining sales figures during the year under review.

Hence, it is all the more encouraging to report that we

sold substantially more PC-12 NGs in 2016 than in

the year before – an exception in the General Aviation

market. At 91 aircraft, sales were up 30 percent on

the previous year, representing the fourth best result

since the PC-12 was launched in 1994.

DIFFERING GROWTH RATES

North America remains our most important sales

market. Sales of the PC-12 NG increased by ten

percent in this region during the year under review,

with 50 aircraft going to customers in the USA

(compared to 45 in 2015), one to Canada (two in

2015) and three to Mexico (two in 2015).

With three aircraft sold in 2016, Brazil once again

was our best market in Central and South America.

There had been no sales to Brazil during the previous

year, due essentially to the political and economic

turmoil. We note nevertheless that there are no fewer

than 33 PC-12s flying in Brazil, representing more

than two-thirds of PC-12 sales to date on this

continent. We are also pleased to report that a first

sale was made to customers in Colombia and

Paraguay respectively.

22 |

BUSINESS UNIT GENERAL AVIATION

It is certainly no coincidence that one of the very first

PC-12s to come off the production line went to a

customer in Australia. The PC-12 is made for the many

short, unpaved strips typically found in Australia. Five

aircraft went to Australia in 2016.

AT HOME IN 55 COUNTRIES

The fact that the PC-12 NG was sold to no fewer than

seven new countries in 2016 sends a very positive

signal: to Colombia and Paraguay in South America,

to Monaco, Gibraltar and Cyprus in Europe, to

Namibia in Africa and to the United Arab Emirates in

Asia. By the end of 2016, 1,456 PC-12s had been

sold to customers in 55 countries since the

first deliveries in 1994. All in all, these aircraft have

completed almost six million hours in the air.

GOOD REASONS FOR SUCCESS

There is a good reason for the PC-12 success story:

more than 20 years after it was launched, the PC-12

remains an absolutely outstanding, almost unrivalled,

multipurpose aircraft in its specific market niche.

The special PC-12 Spectre model has also proved its

worth: it is used mainly in the USA for police duties

and surveillance.

However, a good product is not sufficient to fuel

growing sales figures by itself. Whilst the Pilatus

philosophy is undoubtedly built on a first-class

aircraft, it also includes first-rate customer service,

the benefits of which are generally not felt until after

the sale. Word has got around in the industry:

“Professional Pilot”, the US-American specialist

journal, compiles an annual ranking of customer

service performance, and Pilatus is number 1 in the

turboprop category for the 15th time in a row.

No other aircraft manufacturer has ever achieved

as much.

The PC-12, now known as the PC-12 NG, undergoes

continual technical improvement. The “Model 16”,

for example, boasts a new 5-blade composite


propeller and numerous aerodynamic enhancements.

These modifications deliver reduced noise in the

cabin, a shorter takeoff roll, better climb speed

and a slightly higher cruise speed, plus greater range

with no additional fuel burn. These improvements

have been noted on the market and feedback has

been very positive.

ALL GOOD NEWS?

The fact that sales of PC-12 NGs increased again

during the year under review does not mean,

however, that things are easier in every respect.

Under the heading of “safety”, the administrative and

regulatory requirements to be met by private

aircraft operators are increasing and becoming more

complex. Some technical innovations can also spoil

the pleasure in flying for certain private aircraft

owners: the discretion so important to many aircraft

operators is much more difficult to guarantee due

to freely accessible internet services allowing live

aircraft tracking.

NINE PILATUS PORTER PC-6S SOLD

The business unit General Aviation assumed respon-

sibility for sales of the Pilatus Porter PC-6 in 2014.

The Pilatus Porter made its first flight in 1959,

and has been produced for 58 years. The short

landing and takeoff capabilities of the PC-6 are still

unrivalled, making this multipurpose aircraft virtually

the only choice for many of the remotest, most

inaccessible regions.

Responsibility for assembling selected parts of the

structure of the PC-6 was transferred to Pilatus

Aircraft Industry (China) Co Ltd in 2014. Located in

the industrial city of Chongqing on the Yangtze River,

this Swiss-Chinese joint venture company was

founded with the goal of supplying the huge Chinese

market, for which an “all-rounder” such as the Pilatus

Porter PC-6 appears predestined. The project is

progressing rather more slowly than anticipated,

unfortunately. General Aviation is still underdeveloped

in China, and bringing new aircraft to market launch

is costly and extremely time-consuming. Nevertheless,

we have sold a total of eleven PC-6s to China in the

past two years, but have to assume that these sales

figures cannot be maintained.

China is not the only customer for the PC-6. Pilatus

Porters are also used in various African countries.

Another PC-6 was sold to South Africa in 2016,

for example.

PRESENT WORLDWIDE

The business unit General Aviation is also responsible

for demonstrating the strengths of our own products,

and not only to potential customers that have already

expressed their interest.

Besides attending the European Business Aviation

Convention & Exhibition EBACE in Geneva, Switzerland,

and the Business Aviation Convention & Exhibition

hosted by the National Business Aviation Association

“Two words come to mind when thinking of my PC-12: confidence and versatility. Confidence because the

plane is so reliable. In more than eight years I have never cancelled a flight due to a mechanical problem

and have never encountered an emergency situation in flight. This confidence has lead me to complete

two global circumnavigations landing in 20 different countries. Most recently we completed a polar circum-

navigation which included landing on, and overflying, Antarctica. Versatility comes to mind because

the plane can do about anything we ask of it from crossing the Atlantic Ocean (seven times in the last four

years) to landing on a short gravel runway on Antarctica. Not many other planes can accomplish such a

broad range of missions.”

Jack Long, Owner and Pilot

BUSINESS UNIT GENERAL AVIATION


NBAA-BACE in Orlando, Florida, USA, Pilatus was

also present throughout the year at several large and

numerous smaller, regional exhibitions and air

shows, including some in New Zealand, Russia, Brazil

and Germany.

The meet-up organised by the Pilatus Owners & Pilots

Association POPA in June 2016 in Quebec, Canada,

was a very special event. It was also the 20th such

get-together of PC-12 owners and pilots. The POPA

now has over 500 members representing over 400

PC-12s from all over the world.

All in all, 2016 was a very good year for the business

unit General Aviation compared to our competitors.

Generating over 50 percent of total sales of the

Pilatus Group, the business unit General Aviation is

a solid pillar of Pilatus business activities.

OUTLOOK FOR 2017

Demand for the PC-12 NG remains buoyant thanks to

continuous product improvements. Dealers view the

coming year with optimism. The 1,500th PC-12 is

scheduled to emerge from the production hangars in

Stans in June 2017 for delivery to our first ever PC-12

customer, namely the RFDS or Royal Flying Doctor

Service of Australia (Central Operations).

The approval of single-engine aircraft for commercial

operations under instrument flight rules in Europe will

also provide a further boost for the PC-12. Pilatus has

already delivered several PC-12s to commercial

operators in Europe.

Forecasts in the USA, the biggest sales market for the

PC-12 NG, are difficult to make for the time being

given the uncertainty of the current political situation.

Pilatus has nonetheless decided to go ahead with a

23 million dollar investment in a new construction

project in Colorado, USA – a clear signal of its

commitment to this location. Our subsidiary, Pilatus

Business Aircraft Ltd at Broomfield Airport in Colorado,

employs almost 100 people, not counting the many

additional jobs at the Authorised Pilatus Centres.

There is a clear upward trend, particularly with the

impending market entry of the PC-24, and a doubling

of the workforce is anticipated in the medium term.

“Air Methods operates 23 PC-12s in the toughest conditions in North America. The combination of a rugged,

capable airframe and the world’s most reliable turbine engine has resulted in the most versatile air medical

airplane on the market. Its operating cost and reliability are unmatched by any other turboprop. We all rely

on the PC-12 to get our crews safely into some of the remotest airports in the American west and to ensure

their safe return at the end of each operation.”

Mike Allen, President Air Medical Services, Air Methods

2°45'S, 36°43'E

OF DRAGONS, WITCHES AND WILD MENMysterious and shrouded in legend, closely linked with a world of dragons and myths – the stories about Mount Pilatus are colourful and varied. In its earliest days, the mountain was supposedly inhabited by malicious devils and power-ful spirits who unleashed dark moods. But there were friendly beings, too, like the “wild men” who lived on the mountain – small dwarves who protected wild animals and punished poachers.

But the Pilatus is best known, perhaps, for its dragons. There have been many claims of sightings in the past, of dragons flying by, spitting smoke and flames. It is said that in 1421, a dragon dropped a strange mass of uncongealed blood at the feet of a farmer, who found a stone inside it. In the 16th century, after changing hands several times, a physician ascribed healing powers to the “dragon stone”, as it is now called. Carefully placed inside a casket of red velvet, the “draconite” can now be seen at the Museum of Natural History in nearby Lucerne. Its origin remains a mystery to this day.

46°58'N, 8°15'E

45°58'N, 7°39'E


VERY PROMISING TEST RESULTS

PC-24 PROJECT

Ever since the announcement of the new Super

Versatile Jet, deliveries of the first PC-24s to come

off the production line were scheduled for 2017.

Clearly, 2016 was going to be a very busy and

challenging year for everyone involved in the project.

The required flight tests are many and varied, and

Pilatus obviously takes them all very seriously indeed.

Everything is put through its paces down to the last

detail. In 2016, the year under review, the PC-24

underwent rigorous tests in extreme atmospheric

conditions, at temperatures between –42°C (–108°F)

and +50°C (+122°F), in freezing fog, drifting snow

and snow storms as well as in scorching heat. These

tests are performed in huge laboratories such as the

McKinley Climatic Laboratory on Eglin Air Force Base

in Florida, USA.

Three additional full scale test articles were built and

made available to the external test institutes tasked

with carrying out the stress and fatigue tests.

The results to the end of 2016 are very pleasing:

both PC-24 prototypes have been tested and re-tested.

P01, the first prototype, has completed 618 hours

over 417 flights since its maiden flight, essentially in

Switzerland and Spain. P02, the second prototype,

has made a total of 263 flights, for 527 hours, mainly

in northern Europe and the USA.

The test results indicate that all anticipated PC-24

performance values will be achieved or even exceeded.

TRAINING HAS STARTED

In light of the impending market entry, training of staff

who will have responsibility for PC-24 sales and

service got under way in mid-2016. Employees from

Pilatus Business Aircraft Ltd, our American subsidiary,

spent several weeks with us in Stans, for example, to

become completely familiar with the new aircraft.

Staff at our Authorised Pilatus Centres in North and

South America were also invited to Broomfield,

Colorado, USA, for sales briefings, while staff employed

at the Authorised Pilatus Centres in Europe, Africa

and Asia attended sessions in Stans. These are the

people who will assist and advise our customers in

configuring their aircraft – detailed knowledge of the

aircraft and its many advantages is obviously essential.

North America will be the largest market for the

PC-24, and FlightSafety International Inc., which

partners Pilatus in providing training for pilots and

maintenance engineers, set up the very first PC-24

simulator at its training centre in Dallas, Texas, at

the end of 2016. The first “Graphical Flight Simulator”

was installed for training purposes at the head-

quarters of Pilatus in Stans.

PC-24 PROJECT


CUSTOMER SERVICE: THE BASIS FOR SUCCESS

Our excellent reputation for customer service is built

around our guiding principle of 24-hour availability,

all year round. The success of our PC-12 is due in no

small part to outstanding customer service, and we

are keen that this side of our operations functions

equally well for the PC-24 from the outset. We have

already defined, for example, which spare parts must

be kept on stock, and in which quantities, at our

Authorised Pilatus Centres.

SUBCONTRACTORS MUST BE CERTIFIED

Each aircraft is built of thousands of individual parts, not

all of which are made by Pilatus. These subcontractors

must be carefully vetted, both in terms of quality and

logistics. PC-24 systems suppliers and their products

underwent checks to ensure they meet the requirements

of series production. These preparations must be

completed in good time ahead of the market entry.

PC-24 INTERIOR WITH EXCLUSIVE LOOK

The interior will obviously depend on each aircraft’s

specific mission profile. That is why we offer customers

six different interiors created especially for the

PC-24 in partnership with Designworks, a BMW Group

company. A 6-seat executive interior was chosen

for exhibitions and air shows, of which a true-to-scale

demonstration mock-up has been made.

POSITIVE FEEDBACK FROM TRADE FAIR VISITORS

2016, the year under review, saw the PC-24 presented

to the general public for the first time at two of the

world’s major business aviation shows: at EBACE in

Geneva, Switzerland, in May, and at the NBAA-BACE in

Orlando, Florida, USA, in November. Prototype P01

was on display in Geneva and prototype P02 in

Orlando, both accompanied with the demonstration

mock-up, enabling our Authorised Pilatus Centres to

discuss and define possible specifications with end

customers. Good use was made of this opportunity.

Interest at both fairs was very high, with a constant

flow of curious visitors and potential customers to the

Pilatus sales stands. Reports in the media were also

very encouraging for Pilatus.

OUTLOOK FOR 2017

By the end of 2016 it was apparent that the project

timetable was progressing according to plan. But

much work remains to be done in 2017: it is a

challenge that will require yet another big effort from

all involved.

Pilatus Flugzeugwerke AG | Geschäftsbericht 2014 | 2946°14'N, 6°6'E

46°58'N, 8°34'E

FROM PONTIUS TO PILATUSPeople often mention the legend of the restless soul of Pontius Pilatus, the Roman general who found his final resting place in the mountain lake at the top of Mount Pilatus. The corpse had already been buried in several graves, but was held responsible for violent storms and devastation at each location. Finally, it was decided that the body should be lowered into a small moorland lake at the top of the mountain, to be rid of all danger far from Rome.

But strange events started happening here, too, and the forces of nature unleashed themselves. The locals would have been glad to be rid of the corpse again, but it was impossible to find it in the dark, moorland water. From then on, Mount Fracmont became known as Mount Pilatus, probably in an attempt to appease the spirit of Pontius Pilatus once and for all.

Anyone familiar with Mount Pilatus will know how suddenly violent storms and flooding can occur in the vicinity of the massif. Whenever someone angers Pontius Pilatus in his moorland grave, perhaps?

34 |

ACTIVE CHANGE MANAGEMENT

OPERATIONS

Under the global heading of “Operations”, this report

provides a summary of developments in the areas

of Research and Development, Supply Chain and

ICT, Production, Assembly and Maintenance, and also

Quality, Safety and Environmental Management.

A DEMANDING YEAR FOR RESEARCH

AND DEVELOPMENT

During the year under review, a large part of the over

400 engineers in our Research and Development

team was kept busy working on the final definition of

the PC-24. In 2016, in 941 hours in the air at

locations in Switzerland, Europe and overseas, the

two prototypes were put through their paces across

the entire mission spectrum for the purpose of

certification. The results and findings of these tests

were channelled back into the final design documents.

Coordinating the many subcontractor components

posed a further challenge. The major advances in the

PC-24 programme will allow us to obtain certification

for our Super Versatile Jet PC-24 from the European

Aviation Safety Agency EASA and the Federal Aviation

Administration FAA in the USA towards the end of the

current year.

Further development work on other Pilatus aircraft

continued alongside the PC-24 programme.

A drop-down oxygen mask system of the same type

provided on large airliners was developed for PC-12s

in commercial use in Europe, to function from

altitudes above 7,620 metres (25,000 feet). Also for

the first time in the history of Pilatus, a “Master

Minimum Equipment List” was drawn up for the PC-12

and accepted by EASA for use in a commercial

environment. This will allow aircraft operators to

increase the mission capabilities of their aircraft.

Our exceptionally successful PC-21 Training System

was also enhanced in several respects, particularly in

the connection with new supply contracts and existing

support contracts with several air forces.

AFTER A NEW BUILDING, A NEW ORGANISATION

Whereas completing and moving into the new

logistics building was the main challenge for the

Supply Chain and ICT unit in 2015, attention

shifted to a reorganisation of our Procurement

operations during the year under review. In line with

practical requirements, Procurement was divided

into four categories:

Indirect goods and services (e.g. operating

materials, investments, software, hardware) Avionics systems (e.g. cockpit displays, radio

equipment) Mechanical systems (e.g. engines, propellers,

ejection seats) Electrical and electronic components

(e.g. plugs, cables)


Digital transformation has now reached even those

areas which were previously the exclusive domain of

analogue methods and processes. The increasingly

widespread use of digital technology in every walk of

life offers an opportunity, through the application of

suitable strategies, to optimise existing processes and

information systems. Our goal is to develop paperless

processes. We aim to identify and achieve potential

for optimisation by adhering to flexible cost-efficient

production processes.

Data volumes at Pilatus have now reached 700

terabytes. Over 2,500 terminal devices are in use

across the Pilatus Group.

NEW CARGO TRAIN AT THE STANS SITE

Rapid growth across the entire company combined

with additional new buildings have led to a sharp

increase in the use of forklift trucks and other vehicles

for cargo transport on the Pilatus site: clearly,

another solution had to be found. Our “route train”

was launched in January 2016. Travelling the same

route all the time – hence the name – the train makes

its way around the Pilatus site, stopping at ten

stations to load and/or unload material as required.

FROM DESIGN DRAWINGS TO COMPONENTS

For anyone outside the company, the figures are

difficult to grasp: 435 employees and 63 apprentices

amassed a total of 550,000 production hours during

financial 2016. Machine hours totalled around

134,000 and our teams completed 48,000 production

orders for over 1.4 million components.

The big event of 2016 in the Production unit was

the autumn commissioning of a state-of-the-art

5-axis milling system comprising two machines plus

automation for components measuring two by four

metres (seven by 13 feet). The new system allows us

to produce complex thin-walled, weight-optimised

integral milled parts around the clock. The processing

of aluminium panels and sheet is a core production

36 |

OPERATIONS

competence of Pilatus and this investment will enable

both a reinforcement of our technological expertise

and a further increase in volume capacity.

Production operations also include our paint shop.

The skeleton construction work on our new surface

treatment centre was completed just before the end

of 2016, only a year after the investment project was

approved by the Board of Directors. The building is

scheduled for commissioning in the fourth quarter of

2017. It will include ten energy-efficient spray cabins

of different sizes, in which new aircraft and their

components will receive their livery. The largest cabin

measures 20 by 22 metres (66 by 72 feet),

offering sufficient space in which to paint a PC-24

in one go.

Pilatus placed production orders worth over 21

million Swiss francs with subcontractors during the

year under review. A large proportion of those went to

local businesses.

A NEW ASSEMBLY HANGAR UNDER CONSTRUCTION

With regard to the PC-24 series production operations,

work got underway on the construction of another

assembly hangar in summer 2016. The 10,000 square

metres (107,639 square feet) which will become

available from summer 2017 will provide space for

assembly work on 140 aircraft per year. The self-

supporting construction is built entirely from timber

sourced from local and sustainable forestry.

Our PC-21 Assembly team had to relocate outside

the Pilatus site to a hangar leased from Airport

Buochs to create space for the start of PC-24 series

production work until the new assembly hangar can

be completed. The removal was completed with just

four days’ interruption to operations.

Employees from our Assembly and Maintenance

unit are also involved in projects beyond the confines

of Stans. Under multi-year support contracts,

but also for short-term customer service assignments,


70 employees were seconded for short or long-term

projects outside Switzerland during the year under

review, to Qatar, India and China, for example.

Many of these employees enjoy this opportunity to

get to know other countries and cultures, and appre-

ciate the personal broadening of horizons which such

projects offer.

GREAT INTEREST IN SITE TOURS

More and more people outside the company are

interested in taking a closer look at what we do. With

construction operations in full swing, we were

unable to offer any guided tours during the first half

of 2016. During the second six months of the year we

provided tours of the Stans site to no fewer than 3,000

visitors. Some of them had been on the waiting list

for more than a year. The tours are led by retired

employees who previously spent many years working for

Pilatus with immense enthusiasm and dedication.

SUCCESSFUL RECERTIFICATION AUDIT

A number of recertifications were scheduled in 2016.

Our newly organised Quality and Safety Management

department took responsibility for this work. The

recertification audit was successful in every respect

and our EN 9100, ISO 14001 and ISO 9001 certifi-

cates were all renewed for a further three years.

We acquired and implemented new software for

managing our test equipment, and we also evaluated

new quality management software ahead of rollout in

March 2017.

A full-time position was created to deal with occupa-

tional heal and safety issues, including timely

identification of complex risks, with measures to

reduce or eliminate the latter.

THE GREATEST RESPECT FOR OUR ENVIRONMENT

The Pilatus Environmental Management System has

occupied an important position for many years.

Decisions are always made with due regard to

environmental impact. A solar power system has been

installed on the roof of the new logistics building, for

example, and our two new buildings make use of

geothermal heating.

The growth in business operations obviously implies

increased energy consumption, although the aim is to

ensure requirements are kept as low as possible.

Efficient recovery of the heat generated by machines

and plant in our new buildings is a top priority.

46°58'N, 8°22'E


FURTHER GROWTH IN JOBS AT STANS

HUMAN RESOURCES

The year under review again saw more new jobs created

at the headquarters in Stans. By the end of 2016,

Pilatus employed – calculated in full-time jobs –

1,841 people, 53 more than in the previous year.

Pilatus enjoys an excellent reputation as an employer.

Some 7,000 applications were received in 2016,

and invitations to interview were extended to 650

candidates. Pilatus spares no expense, and makes

intensive use of enquiries and assessments, to

identify the people best qualified to fill job vacancies.

Despite the rapid growth of recent years, the average

period of employment is still over ten years. That

figure is a reflection of the many employees who

remain with us for several decades, often all the way

through to retirement. The average employee age is

42, as previously. At three percent, influenceable

employee turnover is very low, and Pilatus is justifiably

proud of this.

APPRENTICES ARE THE FUTURE OF PILATUS

Pilatus employed 113 apprentices in eleven different

professions during the year under review. 29 appren-

tices earned their final diploma in 2016. 31 new

apprentices joined the company. In 75 years, Pilatus

has equipped over 1,200 young adults for their future

working lives.

Pilatus is proud of its apprentices and always

prepared to go the extra mile for them. New recruits

enjoy a scenic flight aboard a PC-12 NG on their

first day, for example, which always makes a big

impression and provides a huge motivational boost.

Our apprentices are equally pro-active: in 2016 they

organised and hosted the seventh career training

“Info Day” at Pilatus. Interest was very high: 280

potential apprentices and parents attended to form

an idea of the vocational training opportunities

available at Pilatus.

Pilatus continues to invest in training for its appren-

tices and will offer two additional courses in 2017.

Apprentice training at Pilatus will therefore encompass

13 professions from the summer of this year.

INITIAL AND ONGOING TRAINING: ALWAYS

A PRIORITY

Pilatus continued to invest heavily in initial and

ongoing training for employees. 160 managerial staff

received training in change management and

communications and a further 300 employees

attended a total of 38 internal courses in method

and people skills.

HUMAN RESOURCES INTERNATIONAL KEPT

VERY BUSY

Our Human Resources International department was

again kept very busy during the year under review.

Various new projects were launched in Australia,

Malaysia and Saudi Arabia. Ongoing tests on the

PC-24 prototypes outside Switzerland also generated

additional work associated with the provision of

support to employees involved in these programmes.

PROJECTS MOVE AHEADAIRPORT BUOCHS LTD


Airport Buochs AG is 50 percent owned by Pilatus

Aircraft Ltd and 50 percent by canton Nidwalden.

2016 saw great effort invested in numerous demand-

ing projects in addition to the work required to

ensure ongoing day-to-day operations. Under the

leadership of the cantonal government committee,

further details of the “Airport Nidwalden” replacement

infrastructure project were defined in close consul-

tation with Airport Buochs AG, and it is hoped that a

start can be made on the political debate associated

with this topic in 2017.

In parallel, work also started in summer 2016 on an

ambitious project to convert the airfield from its

current shared military-civilian role to an exclusively

civilian airport. New operating rules for up to 20,000

flight movements a year will have to be drafted,

with presentation of evidence of environmental

compatibility, including “noise maps”. Compliance

of existing military installations with civilian construc-

tion standards will also have to be demonstrated,

as well as measures to compensate for negative

ecological impact.

With the amendment to the regulation on air traffic

control services, financial responsibility for air traffic

control transferred from the government to the airport

operator with effect from 1 January 2017. In consul-

tation with skyguide, a concerted attempt was made

to identify opportunities to reduce the high cost of

air traffic control to a level that will not cause funding

shortfalls in the long term.

FLIGHT OPERATIONS ON A PAR WITH

RECENT YEARS

At just over 14,000 flight movements in total, airport

operations during the year under review were up

slightly on the previous year, but on a par with

average totals in recent years. With many PC-24 test

flights performed outside Switzerland, Pilatus

generated just under 5,500 flight movements. There

was an increase in business flight operations which,

with handling and fuel sales, contributed to the good

financial results. At 1,100 flight movements, military

use remained aligned with long-term averages. To

ensure more efficient operations, an airport manual

has been drawn up outlining all technical and

administrative processes. Once again, there was high

demand for other events.

OUTLOOK FOR 2017

Work on these projects will enter the next phase in

2017. A detailed application for the airport conver-

sion will be submitted to the Swiss Federal Office of

Civil Aviation FOCA at the end of April 2017. This will

be followed by a public referendum. Financing for

the “Airport Nidwalden” will be discussed by the

regional parliament at the initiative of the government

of canton Nidwalden in summer 2017 and then

submitted to voters as a proposal in November 2017.

Work will also continue towards finding a long-term

solution for air traffic control at Buochs.

46°58'N, 8°24'E

FLIGHT MOVEMENTS AIRPORT BUOCHS 2012 2013 2014 2015 2016

Pilatus Aircraft Ltd 4961 5272 7129 6042 5472

Airport Buochs Ltd 3878 3082 3959 4250 4115

Nidwalden Gliding Club 4301 3687 3692 3211 3394

Military 1112 1936 1541 404 1111

Total 14 252 13 977 16 321 13 907 14 092

THE MOUNTAINS TEACH US TO FIND GOOD PATHSMount Pilatus is a truly magnificent mountain! It offers a unique experience, however you approach it, and there are many different routes to the top.Some follow narrow, stony trails across rough scree, taking you up to the summit in the most direct way. Others are full of twists and turns, and meander across wide alpine pastures on and up to the final destination. The different paths illustrate how there is more than one way to reach the top, with each journey offering new perspectives and changing views.

Once at the top, the bird’s eye vistas add even greater distance to our vision of things. These impressions are a source of fresh impetus and new ideas. And so Mount Pilatus is not only our name-giver, but also a role model for our aircraft manufacturing business. Rising to an altitude of 2,132 metres (6,995 feet), Mount Pilatus has always pointed to where Pilatus aircraft fly: high up and far afield!

46°58'N, 8°15'E

KEY INDICATORS FOR THE PILATUS GROUP 2012 2013 2014 2015 2016

Total Sales (CHF million) 593 1014 1174 1122 821

Aircraft in Net Sales 86 112 127 121 117

Orders Received (CHF million) 2699 410 561 1367 1087

Order Book Value (CHF million) 2426 1817 1226 1470 1744

EBIT (CHF million) 38 145 200 191 89

EBIT as % of Sales 6.4 14.3 17.0 17.0 10.8

Cash Flow (net profit plus depreciation, CHF million) 52 143 195 178 95

Cash Flow as % of Sales 8.8 14.1 16.6 15.9 11.6

Investments in Fixed Assets (CHF million) 7 18 36 42 49

Investments in R&D (CHF million) 68 83 97 107 101

EBIT before R&D (CHF million) 106 228 297 298 190

EBIT before R&D as % of Sales 17.9 22.5 25.3 26.6 23.1

Net Assets (CHF million) 116 163 210 324 398

Inventories (CHF million) 390 688 754 639 485

Customer Advances (CHF million) 426 654 758 497 204

EBIT as % of Net Assets 32.8 89.0 95.2 59.0 22.4

Number of Full-time Equivalents 1576 1752 1882 1905 1961

BALANCE SHEET EXTRACT 2012 2013 2014 2015 2016

Current Assets (CHF million) 1066 1457 1768 1646 1259

Long-term Assets (CHF million) 119 117 140 173 214

Total Assets (CHF million) 1185 1574 1908 1819 1473

Liabilities (CHF million) 635 929 1113 870 520

Equity (CHF million) 550 645 795 949 953

Total Liabilities and Equity (CHF million) 1185 1574 1908 1819 1473

Equity Ratio in % 1 46.4 41.0 41.7 52.2 64.7

1 The PoC accruals and the customer advances are disclosed using the gross method (PoC = Percentage of Completion). A net presentation would lead to an equity ratio of 68 %.

PILATUS GROUPFACTS AND FIGURES

44 |

2015 2016

GROSS SALES % MCHF % MCHF

Pilatus Aircraft Ltd, Stans, Switzerland 2 76.2 854.8 61.8 507.7

Pilatus Business Aircraft Ltd, Broomfield, USA 22.3 250.2 34.8 285.6

Pilatus Australia Pty Ltd, Adelaide, Australia 1.5 17.4 3.4 28.1

Total 100.0 1122.4 100.0 821.4

2 Consolidated via Pilatus Stans CHF/USD translation rates 2016: 0.9850 / 2015: 0.9623 CHF/AUD translation rates 2016: 0.7325 / 2015: 0.7235

SALES BY REGION % MCHF % MCHF

The Americas 23.1 259.5 35.0 287.2

Asia 65.0 729.3 29.7 244.0

Europe 7.7 86.5 17.1 140.3

Australia 2.1 24.0 14.8 121.6

Africa 2.1 23.1 3.4 28.3

Total 100.0 1122.4 100.0 821.4

SALES BY BUSINESS UNIT % MCHF % MCHF

General Aviation (PC-12 NG; from 1.1.14 incl. PC-6) 30.7 344.2 55.6 457.0

Government Aviation (Trainer) 67.7 760.2 42.0 345.1

Other (Maintenance, Subcontracting) 1.6 18.0 2.4 19.3

Total 100.0 1122.4 100.0 821.4

AIRCRAFT IN NET SALES 3 Number of aircraft Number of aircraft

PC-12 NG 70 91

PC-21 32 14

PC-7 MkII 15 3

PC-6 4 9

Total 121 117

3 Delivered aircraft and accrued aircraft based on the PoC-method (PoC = Percentage of Completion; net sales of trainer is considered based on the production progress)


2015 2016

EMPLOYEES BY BUSINESS UNIT % Employees % Employees

General Aviation 41.1 783 49.6 972

Government Aviation 53.3 1016 44.6 875

Other (Maintenance, Subcontracting) 5.6 106 5.8 114

Total 100.0 1905 100.0 1961

EMPLOYEES BY FUNCTION % Employees % Employees

Production 50.0 953 50.1 982

Development 19.6 373 19.0 373

Sales and Services 15.6 297 16.8 329

Logistics 9.9 188 9.3 182

Administration 4.9 94 4.8 95

Total 100.0 1905 100.0 1961

EMPLOYEES BY COMPANY % Employees % Employees

Pilatus Aircraft Ltd, Stans, Switzerland 93.9 1788 93.9 1841

Pilatus Business Aircraft Ltd, Broomfield, USA 3.9 75 3.9 76

Pilatus Australia Pty Ltd, Adelaide, Australia 1.1 21 1.5 29

Pilatus Aircraft Industry (China) Co Ltd, Chongqing, China 1.1 21 0.7 15

Total 100.0 1905 100.0 1961

FACTS AND FIGURES

46 |

1 2 3 4 5 6 7 8 9

MANAGEMENT OF PILATUS AIRCRAFT LTD

1 Fredy Glarner VP Manufacturing

2 Daniel Geiser VP Aircraft Assembly & MRO

3 Thomas Ochsenbein VP Business Support & CFO

4 Ignaz Gretener VP General Aviation

5 Markus Bucher CEO

6 Jim Roche VP Government Aviation & Deputy CEO

7 André Zimmermann VP PC-24 Jet

8 Bruno Cervia VP Research & Development

9 Roger Hess VP Supply Chain & ICT

SUBSIDIARIES

PILATUS BUSINESS AIRCRAFT LTD, BROOMFIELD, USA

Oscar J. Schwenk Chairman

Thomas Bosshard CEO

PILATUS AUSTRALIA PTY LTD, ADELAIDE, AUSTRALIA

Oscar J. Schwenk Chairman

Sebastian Lip CEO

PILATUS AIRCRAFT INDUSTRY (CHINA) CO LTD, CHONGQING, CHINA

Markus Bucher Chairman

Franz Odermatt General Manager

MANAGEMENTPILATUS ORGANISATION


37°11'N, 3°46'W

1 2 3 4 5

BOARD OF DIRECTORS OF PILATUS AIRCRAFT LTD

1 Bernhard Müller Member

2 Gratian Anda Vice Chairman

3 Oscar J. Schwenk Chairman

4 Dominik Burkart Member

5 Gerhard Beindorff Member

BOARDPILATUS ORGANISATION


PRODUCED BY Pilatus Aircraft Ltd, P.O. Box 992, 6371 Stans, Switzerland, www.pilatus-aircraft.com

EDITOR Commwork AG, Zug, Switzerland

DESIGN Pilatus Aircraft Ltd, Stans, Switzerland

PRINT Engelberger Druck AG, Stans, Switzerland

Copies of the annual report are obtainable in German and English by calling +41 41 619 61 11 or may be downloaded from the Pilatus website. Reproduction permitted with reference to source.

25°57'S, 27°42'E

Pilatus Aircraft LtdP.O. Box 9926371 Stans, SwitzerlandPhone + 41 41 619 61 11 [email protected]

Pilatus Business Aircraft LtdRocky Mountain Metropolitan Airport11755 Airport Way Broomfield, CO 80021, USAPhone + 1 303 465 [email protected]

Pilatus Australia Pty Ltd17 James Schofield Drive Adelaide Airport SA 5950, AustraliaPhone + 61 8 8238 1600 [email protected]

www.pilatus-aircraft.com

Documents

PILATUS AIRCRAFT LTD ANNUAL REPORT 2016 · Pilatus Aircraft Ltd | Annual Report 2016. ... PC-21: France. ... definitely a role model. Yes, there is a lot in a name,