R&S Group ended the first half of 2026 with a record CHF357.9 million order backlog as grid reinforcement, data centres, energy storage, industrial infrastructure, and photovoltaic projects sustained demand for transformer capacity.
The backlog at 30 June was 17% higher than a year earlier and included power transformer deliveries extending through 2027 and into 2028. The lengthening schedule reflects a growing proportion of larger units that require longer engineering, manufacturing, testing, and delivery cycles.
Order intake totalled CHF216.8 million, while net sales reached CHF179.2 million, producing a book-to-bill ratio of 1.2. Orders therefore continued to enter the business faster than products were converted into revenue.
The comparison with the previous year was less uniformly positive. Adjusted order intake declined by 10%, while sales fell from an adjusted CHF201.4 million to CHF179.2 million. At constant currency, sales would have reached CHF183.6 million, representing an organic decline of 9%.
R&S attributed part of the moderation to distribution transformer markets, where elevated customer inventories and installation bottlenecks slowed some deliveries. Orders worth more than CHF15 million were also confirmed after the reporting date when decisions on several larger projects moved into the second half.
The figures show how equipment demand can remain structurally strong while reported sales weaken over a shorter period. A transformer cannot generate revenue merely by occupying a place in an order book; it must pass through design approval, materials procurement, winding, assembly, drying, testing, transport, installation, and customer acceptance.
Power transformers are particularly demanding because they are engineered around network voltage, capacity, cooling, losses, impedance, noise, transport restrictions, and site requirements. Their increased share within the backlog is extending the time between order intake and delivery.
The shift is also changing the group’s commercial mix. R&S is expanding beyond conventional utility distribution equipment towards power transformers and dry type units used in data centres, battery energy storage systems, photovoltaic installations, and industrial infrastructure.
Those markets offer growth but impose different technical and operational requirements. Data centres demand high availability and carefully planned electrical redundancy, while energy storage and renewable projects must manage power flows that vary rapidly with charging, generation, and network conditions.
Dry type transformers are often selected where fire performance, indoor installation, maintenance, or environmental considerations make liquid filled equipment less suitable. Power transformers serving network and generation applications generally involve much larger ratings and more extensive project engineering.
R&S is expanding manufacturing capacity for both categories. The programme is intended to increase output, improve the sales mix, and strengthen margins as higher value products account for a greater proportion of deliveries.
Capacity expansion involves more than additional factory space. Transformer manufacture depends on electrical steel, copper or aluminium conductors, insulation systems, tanks, cast resin processes, bushings, tap changers, cooling equipment, and specialised test capability.
Large units also require lifting and transport arrangements capable of handling equipment that may be too heavy or too large for conventional logistics. A delivery schedule extending into 2028 reflects constraints across engineering, production, testing, and site access rather than a shortage of winding machines alone.
The group’s new power transformer plant in Łódź, Poland, had recruited 101 full time equivalent employees by the reporting date. Total employment increased to 1,340, compared with an adjusted 1,260 a year earlier.
R&S operates eight manufacturing facilities across Switzerland, Italy, Poland, Ireland, and the Middle East. Its portfolio includes oil immersed and cast resin distribution transformers alongside power transformers supplied under the Rauscher & Stoecklin, Kyte, Tesar, and ZREW brands.
First half earnings before interest, tax, depreciation, and amortisation were CHF34 million, producing a margin of 19%. Adjusted EBITDA in the corresponding period was CHF43.4 million with a margin of 21.5%, so profitability remained strong but did not escape the effect of lower sales.
Free cash flow increased from an adjusted CHF5.2 million to CHF11.5 million. The resulting margin of 6.4% was more than double the previous year’s 2.6%, providing additional internal funding while the group develops its production footprint.
Management expects full year sales of approximately CHF410 million to CHF420 million, subject to the successful delivery of large power transformers. That qualification is material because a small number of delayed high value units can move revenue between reporting periods.
The company has maintained its medium term guidance despite expecting 2026 sales below the growth rate previously indicated. Its confidence rests on the backlog and the structural investment required across electricity networks and large power consuming facilities.
The wider transformer market remains constrained by long lead times, specialist labour, materials availability, and the pace at which customers can install commissioned equipment. Orders may be placed early to secure manufacturing slots, but projects can still be delayed by planning, civil works, grid studies, or shortages elsewhere in the substation package.
Expanding production during an extended demand cycle introduces a further risk. New plants require trained employees and stable yields before they contribute reliably, while a factory built around large current order books may remain in service long after the immediate backlog has been delivered.
R&S must therefore manage two competing pressures. It needs sufficient capacity to exploit a market with deliveries extending several years ahead, but it must avoid building an operating base that assumes every order will progress through customer sites exactly as scheduled.
The record backlog provides strong evidence of demand, although it also represents several years of manufacturing obligations. The decisive performance measure will be the group’s ability to convert increasingly complex power transformer orders into tested deliveries without allowing capacity growth to erode quality, cash generation, or margins.
