Value of orders received by European arms industry leaders increased. Growth in actual sales will follow.

Arms industry’s production chains are complex and the production process often takes months or even years. For this reason, the growing demand is not immediately visible in sales, but in the value of orders. According to individual arms companies’ reports that we reviewed, during 2022 most companies had seen an increase in the value of orders due to Russia’s invasion of Ukraine and the increase in military spending of EU countries.

The share prices of some of these companies also increased immediately after Russia’s invasion of Ukraine and have remained higher than before the invasion.

There are hundreds of companies in Europe, which produce military equipment (weapon systems, weapon platforms, vehicles, munitions) and military software. Nevertheless, the market is dominated by a few significant players. In this analysis, we will look at the 15 largest of them.

Our analysis is based on data available through HitHorizons Financial Reports, which aggregate companies’ reported financials, credit checks, organizational structure, contact details, and more.

UK’s BAE Systems is the largest European company producing arms

Total sales of the TOP 15 European arms companies were more than EUR 219B in 2021. Sales of military equipment accounted for more than EUR 93B.

Nine out of TOP 15 companies generate more than 50% of their revenue through the sale of military equipment. For the remaining six, other business activities are a more significant source of sales. For example, Airbus’ sales of military equipment accounted for only about 18% in 2021.

UK’s BAE Systems is the largest company with sales of EUR 23.8B in 2021. The company is the sole manufacturer of nuclear submarines for the UK and is also a manufacturer of armored vehicles and missile systems. Sales of military equipment make up 97% of the company’s total sales.

TOP 10 companies’ total sales and sales of military equipment

Italy’s Leonardo SPA is second with sales of EUR 14.1B in 2021. Sales of military equipment make up 83% of total sales. Leonardo SPA has a similar range of military products as BAE Systems.

The French company Thales Group is third. Within its defense division, the company is engaged in the production of ships, missiles, aircrafts, and software. In 2021, Thales Group had total sales of EUR 19.9B, with 51% generated through sale of military equipment.

The fourth company is Airbus. The company's total sales in 2021 were EUR 52B. Sales of military equipment accounted for 18% of total sales. Airbus manufactures military aircrafts and satellite systems.

The French company Dassault Aviation Group, which produces aircrafts and aerospace equipment, is fifth. In 2021, the company generated total sales of EUR 7.2B. Sales of military equipment accounted for 73%.

TOP 15 companies’ total sales and sales of military equipment

Company 2021 Sales Share generated through sale of military equipment (2021) Sales of military equipment (2021)
BAE Systems * € 23,876,750,700 97% € 23,160,448,179
Leonardo S.p.A € 14,135,000,000 83% € 11,732,050,000
Thales Group € 19,909,000,000 51% € 10,153,590,000
Airbus € 52,100,000,000 18% € 9,378,000,000
Dassault Aviation Group € 7,246,197,000 73% € 5,289,723,810
Safran € 15,257,000,000 28% € 4,271,960,000
Rolls-Royce * € 12,569,187,675 33% € 4,147,831,933
MBDA € 4,200,000,000 99% € 4,158,000,000
Naval Group € 4,052,900,000 99% € 4,012,371,000
Rheinmetall AG € 5,658,000,000 66% € 3,734,280,000
Saab * € 3,455,079,728 90% € 3,109,571,755
KNDS € 2,919,447,746 ** 95% € 2,773,475,359
CEA € 6,002,560,117 ** 45% € 2,701,152,053
Fincantieri € 6,911,000,000 36% € 2,487,960,000
Thyssenkrupp AG € 41,140,000,000 6% € 2,468,400,000

* For BAE Systems and Rolls-Royce we used an exchange rate of EUR 1= GBP 0.8925 (Source: ECB, 06/02/2023). For Saab we used an exchange rate of EUR 1 = SEK 11.3325 (Source: ECB, 06/02/2023)

** Based on The Sipri TOP 100 Arms Product and Military Services Companies, 2021 SIPRI

Airbus was the most profitable

Airbus had the highest profit after tax in 2021 (more than EUR 4.1B). BAE Systems was second with more than EUR 2.1B. Thales Group was third with EUR 1.3B.

We took into account individual companies’ total profit after tax since we could not distinguish between military and non-military sales. For MBDA (which is engaged in the development of missile systems), KNDS (production of ground technology), and CEA (production of nuclear warheads and reactors), net profits for 2020 and 2021 were not publicly available.

TOP 15 companies’ profit after tax in 2020 & 2021

Company 2020 2021
BAE Systems € 1,536,134,454 € 2,142,296,919
Leonardo S.p.A € 243,000,000 € 587,000,000
Thales Group € 937,000,000 € 1,361,000,000
Airbus € -1,169,000,000 € 4,174,000,000
Dassault Aviation Group € 396,000,000 € 693,000,000
Safran € 879,000,000 € 784,000,000
Rolls-Royce € 11,204,482 € 138,935,574
Naval Group € 57,500,000 € 196,900,000
Rheinmetall AG € 1,000,000 € 332,000,000
Saab € 96,361,727 € 178,692,763
Fincantieri € -245,000,000 € 22,000,000
Thyssenkrupp AG € -25,000,000 € 1,220,000,000

* For BAE Systems and Rolls-Royce we used an exchange rate of EUR 1= GBP 0.8925 (Source: ECB, 06/02/2023). For Saab we used an exchange rate of EUR 1 = SEK 11.3325 (Source: ECB, 06/02/2023)

** Based on The Sipri TOP 100 Arms Product and Military Services Companies, 2021 SIPRI

Value of orders skyrocketed

As of February 2023, most of the companies in the TOP 15 list have not published their 2022 annual reports since their accounting period ended on December 31. However, we were able to analyze quarterly or half-year reports. Most of the companies had at least a half-year report for the first half of 2022, some had reports for the first 9 months (i.e. the end of Q3), and only one, Thyssenkrupp AG, had an annual report for 2022 (this company’s financial year ended on September 30, 2022).

Almost every company where the value of orders received in the first 6 or 9 months of 2022 was available saw an increase in their year-on-year numbers. Dassault Aviation Group grew the most, by more than 300%, both relatively and in absolute numbers. Here, however, it has to be noted that Dassault Aviation Group saw such a significant increase in the value orders due to a large order of aircrafts from the United Arab Emirates.

Companies such as Rheinmetal AG, BAE Systems, Airbus, Thales Group, Leonardo S.p.A, Thyssenkupp AG, and Saab also recorded a significant increase. The only exception is Italy’s Fincantieri - in this case, military sales accounted for only 36% of total sales in 2021 and it’s not possible to say which types of orders actually dragged down the total numbers.

TOP 15 European arms companies: Growth of orders in 2022

Company Period Previous Period (2021) Last reported Period (2022) Year-on-year growth
BAE Systems 6 months € 10,600,000,000 € 18,000,000,000 70%
Leonardo S.p.A 9 months € 9,240,000,000 € 11,719,000,000 27%
Thales Group 6 months € 10,607,000,000 € 15,404,000,000 45%
Airbus ** 9 months € 3,510,000,000 € 6,534,000,000 86%
Dassault Aviation Group 6 months € 3,913,000,000 € 16,290,000,000 316%
Rolls-Royce ** 6 months € 1,300,000,000 € 1,400,000,000 8%
Naval Group
Rheinmetall AG ** 6 months € 429,000,000 € 1,542,000,000 259%
Saab 9 months € 2,766,516,947 € 2,934,091,049 6%
Fincantieri 6 months € 1,753,000,000 € 1,524,000,000 -13%
Thyssenkrupp AG * € 39,550,892,857 € 44,297,000,000 12%

* Thyssenkrupp AG’s financial year ends on September 30. Since the company does not report military and nonmilitary related orders separately, we took into account the total value of orders despite the fact that only 6% of sales come from the sale of military equipment.

** We used orders in the Defense or Defense and Space divisions of these companies, as military related sales are a minor source of income for these companies.

In the first six or nine months of 2022, the value of orders increased for the 9 largest arms companies in Europe, decreased in only one case, and in the remaining five cases, numbers or preliminary financial reports for 2022 were not available yet. With the growth of the value of orders, the growth of sales will follow in the months and years to come.

In the case of companies that report preliminary results, data shows an increase in the value of orders. With a delay, these orders will be reflected in the sales of individual arms companies. In the case of companies that do not publish preliminary results, we have to wait for annual reports. Here we can assume that these companies will also see an increase in the value of orders received in 2022 as a result of growing demand for military equipment. The same scenario is highly probable in 2023.

Search through HitHorizons Financial Reports to find financial and credit reports & certificates of incorporation of companies relevant to you and download results in PDF or JSON for further processing in any software.

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