Australia’s most well-known manufacturer of advanced carbon fibre composites has announced a realigning of the business, with the changes aimed at driving profits and growth.
Quickstep’s announcement comes after the board, the executive management team and new chief executive and managing director Mark Burgess conducted a strategy and operational review that started in May and concluded in July.
The changes will be a part of the company's new plan, known as the 'OneQuickstep' program.
"We have undertaken a comprehensive review of all aspects of the Quickstep business and we have developed a strong and robust plan, under the ‘OneQuickstep’ banner, to accelerate profitability and growth," said Burgess.
The new program includes a simplified management structure, a refocusing of research and development (R&D) investment and the ceasing of non-core programs.
"The OneQuickstep program includes a revised organisational structure and leadership roles, productivity and efficiency improvements, refocused R&D investment and a focus on targeted business development and growth," explained Burgess.
"We have simplified our senior leadership structure, reducing the number of key management personnel, and have established a functional matrix organisation. We have implemented an executive pay freeze and will continue with the freeze on directors’ fees. The OneQuickstep change management program, which we are rolling out, will see the removal of business segments and a strong focus on growth in our target market sectors."
Burgess also discussed the company's focus on improving its productivity and performance.
"Productivity and efficiency improvements are critical for us to achieve profitability and drive sustained growth," Burgess said.
"We have set a number of efficiency targets for the Bankstown and Geelong sites, which will provide margin improvement on existing contracts, and enhanced competitiveness for new work being negotiated."
And while the business continues to invest significantly in R&D, a dozen full-time employees will be made redundant across the first half of the current financial year.
“We are refocusing our R&D and have capped investment at a net $2.8 million for FY18, still between 4 per cent and 5 per cent of sales, which remains significant for a company of our size," Burgess said.
"This refocus will involve a rationalisation of our current R&D operations and will see a reduction of 12 full-time employees across the first half of FY18. We will be adopting an intense focus on the rapid commercialisation of our core process technologies, such as Qure and the Quickstep Production System (QPS). Subject to appropriate program timing, we will be ceasing non-core programs that do not fit with our future growth plans, such as the Thales Hawkei project, which is glass fibre-based and does not use our core technologies."
The new CEO also revealed a new role on the executive team, as well as strong investments in sales and bidding.
"Future growth is also important and we are making a number of investments in this area," Burgess said.
"We have created a new sales leader role on our executive team and are making investments in sales, bidding for new business and proposal resources (both systems and people). Our marketing and communications function has been strengthened. These roles represent a re-focus within the business and will not increase overhead costs. Over the medium-term we will be increasing our focus on market-specific technology and manufacturing partnerships."
Although the company is anticipating continued growth from its contribution to the F-35 Joint Strike Fighter Program, C-130J and LM-100J projects, Burgess stressed the OneQuickstep strategy will also deliver growth through new partnership opportunities.
"The outlook for Quickstep in the future is strong. We have solid, long-term contracts in place, continued JSF production growth and a strong defence aerospace ‘build to print’ outlook," he said.
"We will be placing an increased focus on the aerospace secondary structures market (control surfaces and closure systems) and will look closely at all customer cost reduction opportunities, using Qure and QPS to address volume production constraints that exist with current technologies. In the longer-term we will be looking at partnership opportunities to take us into our target growth markets and believe our OneQuickstep strategy will deliver profitability and accelerated growth."