The American edition of Defense News has compiled another rating of the largest manufacturers of weapons and military equipment. The updated Top 100 2015 ranking examines the main indicators of commercial activities of defense enterprises in 2014. In addition, the compilers of the rating drew attention to the indicators of 2013 and compared them with last year's achievements of the firms. Let's consider the main features of the latest rating.
Ups and downs
Several defense companies from a range of countries posted strong revenue growth last year, allowing them to climb several ranks or to be among the top 100 for the first time.
The largest growth in revenues in the field of military products was shown by the American company AECOM. In 2014, she earned a total of $ 19.641 billion, of which $ 4.43 billion (22.6%) came from military orders. In 2013, AECOM supplied $ 1.712 billion worth of military products. Thus, the annual growth of military revenues was 158.8%. This allowed the company to enter the Top 100 from Defense News for the first time and immediately take 18th place.
Japanese company Kawasaki Heavy Industries showed 90% growth in revenues from military products. Last year, it earned $ 17.094 billion, of which $ 11.2%, or 1.909 billion, was received for the fulfillment of military orders. In 2013, the company's revenues in the military sphere were 1.004 billion. Significant revenue growth allowed the Japanese firm to climb 20 spots, up from 66th to 46th.
The third place in terms of revenue growth last year was taken by the American company Engility. With total revenues of 2.5 billion dollars, she earned 1.53 billion on military orders (61, 2% of all revenues). In 2013, Engility's military revenues were $ 846 million. As a result, an increase of 80.9% allowed the company to get into the top 100 largest manufacturers of military products and gain a foothold in 54th place.
On the 31st place in the new Top 100 rating is the Russian Corporation "Tactical Missiles", which showed an increase in revenues from military products by 48.6%. In total, last year the corporation earned $ 2.96 billion, and 95% of the revenue, or $ 2.812 billion, went to military orders. For comparison, in 2013, the corporation's military revenues were 1.892 billion.
The Brazilian company Embraer closes the top five in terms of revenue growth. Its military revenues rose 32.5%, from $ 1.1 billion to $ 1.459 billion. At the same time, in 2014, Brazilian aircraft manufacturers in total earned 6, 357 billion, which is why military orders accounted for only 23% of revenues. This growth allowed the company to move up from 60th place to 55th.
Last year, there were also noticeable drops in income. So, in the case of the American company ManTech, there was a decline of 52.6% - from 2.2 to 1.046 billion dollars. At the same time, 59% of the total 1.774 billion fell on military revenues. As a result, the company dropped from 43rd to 64th.
Another American company, DynCorp, ended last year with a 49.1% drop in revenues. In 2013, she earned 3.1 billion on military orders, in 2014 - 1.579 billion. The reason for the fears of the leadership may be the fact that military orders accounted for 70.1% of the total revenues of $ 2.252 billion. Because of this, the company lost its 38th place and dropped to 51.
The Finnish company Patria has a slightly smaller drop in income as a percentage. In 2013 and 2014, she earned $ 1.028 billion and $ 555.8 million, respectively. The fall was 45.9%. It is noteworthy that almost all income (90.4%) Patria receives precisely from military orders. So, last year the company received only 614.5 million. As a result, the Finnish armored vehicle manufacturer lost 30 positions, falling from 64th to 94th.
For the American company Hewlett-Packard, the reduction in military orders is not sensitive, since they account for only 2% of the total revenues of $ 111.5 billion. Last year, the company earned $ 2.24 billion on military products against $ 4.07 billion in 2013. The fall was 44.9%, as a result of which the company moved from 22nd place to 40th.
The American company Oshkosh closes the five "leaders" in terms of revenue reduction, having dropped from 27th place to 48th. Of the $ 6, 808 billion earned last year, the supply of military products accounted for 1.725 billion (25, 3%). In 2013, the company managed to earn 3.05 billion from military supplies. Thus, revenues fell by 43.4%.
Top ten leaders
As often happens in such ratings, the top ten in the Top 100 from Defense News this time almost did not change. Several companies changed their position in the final table and only one (French Thales) dropped beyond the top ten, giving way to competitors.
In the first place again the American company Lockheed Martin. She earned a total of $ 45.6 billion last year. The total value of military contracts was 40, 128 billion, or 88% of all revenues. In 2013, the company earned $ 40.494 billion on military supplies. Thus, in 2014, Lockheed Martin's military revenues fell 0.9%. Nevertheless, the existing performance gap allowed the company to maintain its leadership in the ranking.
The second place was taken by another company from the United States - Boeing. Aircraft manufacturers from this company earned $ 90.762 billion last year. Military supplies accounted for 32% of revenues, or $ 29 billion. The military income of the year before last was $ 32 billion, so in 2014 there was a drop of 9.4%. In the end, however, Boeing retained its second place.
On the third line is the British concern BAE Systems, which earned 25.449 billion dollars on military contracts - 92.8% of total revenues (27.411 billion). At the same time, in 2013, the concern delivered military products to customers with a total value of $ 28.014 billion. Thus, over the year, revenues fell by 9, 2%.
The fourth place in the rating is again occupied by the American company Raytheon with military revenues of $ 22.228 billion. This organization almost does not produce civilian products, which is why military contracts accounted for 97.4% of all revenues in the amount of 22.826 billion. In 2013, Raytheon's military revenues were $ 22.047 billion. This means that last year the company's revenues grew by 0.8%. It is noteworthy that Raytheon has become one of the few leaders in the ranking, whose military revenues increased, rather than fell, last year.
The first change in the rating is observed in fifth place. During the year, the American company General Dynamics, which was previously on the sixth line, climbed it. In 2014, she earned $ 30.852 billion, of which $ 18.561 billion (60.2%) came from military contracts. Over the year, the company's military revenues decreased by 1.5% - in 2013 they amounted to 18.836 billion.
Northrop Grumman from the USA fell from fifth place to sixth. This was facilitated by a reduction in military revenues by 5.6% from $ 19.5 to $ 18.4 billion. At the same time, military contracts accounted for 76.7% of total revenues - $ 23.979 billion.
The seventh line is again the European concern Airbus Group, which operates in several countries. In 2014, he earned 14, 609 billion dollars on the supply of military equipment, which is 11, 7% less than 16, 546 billion in 2013. A fairly large reduction in military revenues has almost no effect on the concern's activities, since it receives the bulk of its profits from the supply of civilian equipment. In 2014, Airbus Group earned a total of $ 80.686 billion, of which military equipment accounted for only 18.1%.
The eighth place in the rating for the second year in a row is occupied by the American company United Technologies. The 9.5 percent increase in military revenues from 11.894 to 13.02 billion dollars allowed it to remain at a fairly high position. In total, the company earned $ 65.1 billion last year, and military contracts accounted for 20% of all revenues.
The Italian company Finmeccanica with military revenues of $ 10.561 billion moved up to ninth place from tenth. It is noteworthy that this company managed to climb one place even with a decrease in revenues by 3.1% - in 2013, its military revenues amounted to 10.896 billion. Military contracts provided 54.2% of the company's total revenues of $ 19.486 billion.
The American company L-3 Communications closes the top ten. Last year, it earned $ 9, 808 billion from the supply of military products, which is 5.1% less than the $ 10.336 billion received in 2013. In total, in 2014, the company received $ 12.124 billion, with military contracts accounting for 80.9% of this amount.
Russian enterprises
Seven Russian defense industry enterprises were included in the new Top 100 rating from Defense News. Unfortunately, they did not manage to break into the top ten manufacturers of weapons and equipment, but one of the Russian organizations managed to get close to it. It is quite possible that next year the Russian defense industry will be represented in the top ten.
The best performance among Russian enterprises was shown by the Almaz-Antey Air Defense Concern. Last year, this organization showed a 10.6 percent increase in revenues from 8, 326 to 9, 209 billion dollars. Thanks to this, the concern rose from 12th place to 11. It is noteworthy that Almaz-Antey is one of the few participants in the rating that produces exclusively military equipment.
The United Aircraft Corporation took the 14th place in the rating. The compilers of the rating note that when determining the indicators of this organization, they were determined on the basis of the reporting of the companies that are part of it. Last year, USC sold equipment worth $ 7, 805 billion. Military orders were fulfilled for 6, 244 billion - 80% of total revenues. In 2013, USC's military revenues were $ 5.831 billion. Thus, in 2014 the growth of this indicator was 7.1%.
The Russian Helicopters Corporation moved up from 25th to 23rd place. Last year, the organization delivered products worth $ 4.5 billion to customers. Military equipment accounted for 88% of all revenues, or $ 3.96 billion. For comparison, in 2013 the corporation earned $ 3, 406 billion from the sale of military helicopters, i.e. the growth was 16.3%.
For the first time, the Russian corporation Tactical Missile Weapons entered the Top 100 rating, which immediately took 31st place. As already mentioned, last year the revenues of this organization from the fulfillment of military orders (95% of all revenues) increased by 48.6%, from 1.892 to 2.812 billion dollars.
On the 26th place in the rating is the United Engine Corporation, which was previously on the 34th line. Like other Russian companies, the UEC showed an increase in military revenues last year. In her case, this figure was 25.6%: revenues grew 2, 674 to 3, 323 billion dollars. Military contracts accounted for 61.5% of the corporation's total revenues of 5.405 billion.
For the first time, the Uralvagonzavod corporation was included in the Defense News rating. The leading Russian manufacturer of armored vehicles last year earned 1.545 billion dollars from the supply of combat vehicles - 1% more than the corresponding figure in 2013 (1.529 billion). Military orders provided 51.6% of the organization's total revenues, which amounted to $ 2.992 billion.
The last of the Russian organizations included in the Top 100 2015 is the V. I. Academician Mints, who sold military products worth $ 947.2 million last year. Over the past year, sales of such products increased by 15.7% (819 million in 2013). In total, the institute last year earned 1.877 billion dollars, of which 50.5% were received for the implementation of military contracts.
General trends
It is easy to see that the international arms and military equipment market has been going through hard times in recent years. Despite the complication of the international situation, the real expenditures of countries on military products are gradually decreasing. As a result, the incomes of defense industry enterprises are also falling.
The current cuts in military budgets are especially vivid in the top ten ranking. Only two out of ten companies increased their revenues last year, but only United Technologies can boast of good growth (9, 5%), which is in 8th place. Raytheon also increased its military revenues from 4th place, but only by 0.8%, which cannot be a demonstration of serious growth or decline. In the case of the rest of the market leaders, there is a decrease in revenues from 0.9% (Lockheed Martin) to 11.7% (Airbus Group).
Against the background of their foreign colleagues and competitors, Russian enterprises demonstrate a fairly high growth rate. The signing of a host of new contracts for the supply of weapons and equipment made it possible to increase military revenues to one degree or another. Thus, the Uralvagonzavod corporation last year earned only 1% more than in 2013, and the Tactical Missiles Corporation increased its revenues by 48.6%, which allowed it to enter the top five growth leaders.
The growth in revenues of Russian defense enterprises is associated with several main factors. The Russian Ministry of Defense continues to actively purchase new weapons and equipment intended for the modernization of the armed forces. Also, the Russian defense industry has a fairly large portfolio of export orders. As a result, even in the face of sanctions from some foreign countries, Russian industry not only maintains acceptable indicators, but also increases them.
Defense News analysts note that the composition of the countries-buyers of Russian products primarily contributes to the preservation of growth even against the background of sanctions. The main importers of Russian weapons are China, India, Algeria, Venezuela and other countries that have not joined the sanctions initiated by the United States and the European Union. Moreover, the states that joined the sanctions, for the most part, have never been major buyers of Russian military products.
The decline in the international market for arms and military equipment has been observed over the past several years. There are different opinions about the timing of the market recovery and the beginning of the next growth, but so far they remain at the level of assumptions. At the same time, the Top 100 rating from Defense News allows you to carefully consider the situation on the market and study the position of individual large arms manufacturers, as well as determine their successes and failures.
