2017 Global aerospace and defense sector financial performance study

Defense subsector expands, while commercial aerospace growth slows down

"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.

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