Contrary to popular belief, wars and international crises have not really benefited European defense groups (excluding Russia). According to the annual report of SIPRI (Stockholm International Peace Research Institute), which published on Monday the world ranking of the top 100 defense groups based on 2023 turnover ($632 billion), the 27 largest Arms companies based in Europe recorded extremely timid growth of 0.2% in 2023 compared to 2022 to reach $133 billion in turnover. It is “the smallest increase of any region in the world”explained SIPRI.
Very logically, this growth is far from the increase of the 41 American groups of the top 100 whose turnover increased on average by 2.5%, to 317 billion dollars and very far from the sales of the 23 companies of the Top 100 based in Asia and Oceania (+5.7%, to $136 billion). The first two European groups, which appear in the SIPRI ranking, the European group Airbus and the Italian Leonardo, respectively in 12th and 13th place in this Top 100, illustrate very clearly the few profits that the groups have made in 2023 Europeans of international crises: the turnover of Airbus in defense fell by 1.5% (12.89 billion dollars) while that of Leonardo collapsed by 11.4% (12.39 billion). It is Dassault Aviation, which has the biggest drop in the SIPRI ranking (- 40.8%, to 3.22 billion).
According to SIPRI, “European arms companies producing complex weapon systems mainly worked on older contracts in 2023 and their turnover for the year therefore does not reflect the influx of orders”.
Rheinmetall boosted by war
However, certain European companies have been able to take full advantage of wars and international tensions. This is particularly the case for Rheinmetall (26th), whose turnover increased by 10.3%, to $5.48 billion. According to SIPRI, the German group was able to increase “its production capacity for 155 mm caliber ammunition and its turnover was boosted by the delivery of its Leopard tanks and by new orders, in particular via exchange programs linked to the war (in the framework of which the countries provide military goods to Ukraine and receive substitutions from their allies in exchange) ». This is also the case for the Diehl group, which was propelled into the ranking of the world Top 100 to 83rd place (compared to 98th in 2022) thanks to colossal growth of 29.8% (1.35 billion).
Other European groups also performed well in this context of crises, particularly in the munitions and missile sectors such as the Swedish Saab (+16%, to 4.36 billion), the Ukrainian JSC Ukrainian Defense Industry (+ 68.7%, to 2.21 billion), the Polish PGZ Poland (+ 9%, to 2.06 billion), the Norwegian Kongsberg Gruppen (+ 27.1% to 1.5 billion) or the Czech Czechoslovak Group (+25.3% to 1.19 billion). On the other hand, the European missile maker MBDA (30th) did not take off with very sluggish growth (+ 0.4%, to 4.76 billion) while the turnover of KNDS (45th) fell by 3. 7% (3.34 billion). Finally, the leading French group in the SIPRI ranking, Thales (16th) saw its defense turnover increase by 2.5%, to 10.35 billion.
Sales of Russian, Israeli and Asian groups soar
Unquestionably, Israeli groups have benefited greatly in 2023 from the war launched by the government of Benjamin Netanyahu to punish Hamas for the massacres of October 7, 2023 (as well as the population of Gaza). The turnover of Elbit Systems, Israel Aerospace Industries and Rafael exploded by 14.2% ($5.38 billion), 15.4% ($4.49 billion) and 16.00% respectively. 2% (3.73 billion).
This is also the case for a Russian group which recorded a spectacular increase in its turnover last year due to the war launched in February 2022 by Moscow in Ukraine, killing many civilians. Rostec, a state-owned holding company controlling numerous arms companies, seven of which were ranked in the Top 100 in the past, saw its sales soar by 49.3% to 21.73 billion while that of United Shipbuilding Corp grew slowly (+ 1.9%, to 3.77 billion).
Furthermore, many Korean, Japanese and Taiwanese groups appearing in the Top 100 of the SIPRI ranking, experienced colossal growth in 2023: the South Korean Hanwha Group (+ 52.7% to 5.71 billion), Korea Aerospace Industries (+ 44.9% to 2.29 billion) and Hyundai Rotem (+ 44%, to 1.21 billion); Japanese Mitsubishi Heavy Industries (+ 23.9%, to 3.89 billion), Kawasaki Heavy Industries (+ 16.4% to 2.06 billion), the Japanese Fujitsu (+50.4% to 1.85 billion), NEC Corp (+83.9%, to 1.14 billion) and Mitsubishi Electric Corp. (+ 69.4%, to 1.05 billion); and, finally, the Taiwanese NCSIST (+ 27.3%, to 3.22 billion).
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