2017 Global aerospace and defense sector financial performance study

"2017 Global aerospace and defense sector financial performance study" looks at the top 100 global aerospace and defense (A&D) companies that have generated at least US$500 million in revenues in 2016. This analysis provides a detailed understanding of how the global A&D sector is performing and how the sub-segments are performing relative to each other. Also included in the study is an analysis of ‘Letters to shareholders’ from the top 20 A&D companies, which offers an insight into their strategic priorities.

Key findings

• Global A&D sector revenue growth is slowing, marginally outpacing global GDP growth.
• European A&D sector revenue growth continues to outperform the US sector.
• The global defense subsector continued to recover as global defense spending increased, especially in the US.
• Global commercial aerospace revenue growth slowed from 6.3 percent in 2015 to 2.7 percent in 2016.
• The Original Equipment Manufacturers (OEM) and electronics segment experienced incremental revenue growth.
• Global defense operating margin growth strengthens as the commercial aerospace margins tighten. 
• Propulsion segment was the leader in operating margins. However, Tier 2 suppliers now rank second.
• Sector productivity experienced a moderate improvement in 2016, led by strong growth in Europe. 
• Debt levels continue to rise as companies increase leverage to finance acquisitions, share buybacks, and develop new and innovative products.
• US and European A&D stocks outperformed their respective market indices.