Arquus: balancing the turnover and preparing for a war economy

Jérôme Hadacek

Welcomed on the Limoges production site by Emmanuel Levacher, Arquus CEO since 2015, EDR On-Line was presented with a somewhat mixed assessment of the 2022 results. The scars of the COVID year are still there, in parallel with a geopolitical situation in the Sahel tainted by a crisis of confidence between France and some African countries in that area.

Part of the AB Volvo group, which generates an annual turnover of 42 billion Euros, the Arquus business, centered on the production of protected equipment for armies and security forces, generated in 2022 a turnover of 550 million Euros.

This was due to the stability of the French market, with deliveries of new vehicles from the Scorpion program, and by the modernization of some class of vehicles shared among the various company sites. To this we must add customer support and service, as well as the supply of spare parts.

To date, some 1,277 new vehicles have been delivered to the French armies, mainly comprising the market for 1,200 VT4s, 37 Sherpa, 18 Caesar chassis and 22 Bastion. At the same time, 150 vehicles already in service were modernized and 221 remotely operated Hornet remotely controlled weapon stations (RCWS) were also supplied.

Arquus is awaiting the ramp-up of the Scorpion programme (Griffon and Jaguar drivelines as well as RCWS) with the regeneration of the Standard 1 PLFS into standard 2.

For export, 2022 is still suffering the consequences of 2020 with a turnover of only 100 million Euros out of the overall 550 million, the ideal business distribution being 50/50. The distancing since the pandemic requires reconnecting with customer contacts that have frayed over time, while foreign competition, Turkey, South Africa, South Korea to name a few, has established itself in what were historical Arquus markets.

The geopolitical climate in the Sahel region has not improved matters, handicapped at the same time by rising production and material costs.

Given the situation in the East and the French government wish, Arquus continues to invest, innovate and prepare for a rise in production to respond to a war economy.

This year, 3.5 % of the turnover, or 20 million Euros, was invested in the renovation and optimization of production sites, of which 3 million Euros in research and pure innovation. Similarly Arquus has refocused on a large majority of French subcontractors who today represent more than 95%, the remaining 5% being European.

To respond to the war economy initiated since Eurosatory 2022, Arquus anticipates products and concepts while innovating in the ability to produce more, faster and of course cheaper. To do so, a firm view of the future is needed, a variable difficult to control at the moment, a reduction in lead times, and an acceleration of supplies, perfectly developed by its logistics platforms and hubs and its management of spares storage

In parallel with all this, Arquus is constantly anticipating products and concepts as was the case for the Scarabee, a real experimental project, but also in the modernization of the Caesar 2 planned for 2026/27. Hopes and well-founded expectations are centered on the future French Army logistics trucks, with the Armis, and the VBAE under development.

The outlook for 2023 is rather optimistic with an increase of 5 to 10% in turnover, also including the support and services market, although the trend has been somewhat clouded for the 2030 horizon, with a decrease from 20 to 25% on the military programming law concerning the Griffon and the Jaguar.

As for export markets, these seem to have picked up again, with a geographical refocusing on European nations, such as Estonia, Greece, the Czech Republic or Romania, while maintaining close ties with many Gulf and Maghreb countries.

Photos by Jérôme Hadacek