Aerospace France

INDUSTRY PROFILE
Aerospace & Defense in France

Reference Code: 0164-1002 Publication Date: November 2011
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France - Aerospace & Defense

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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Market value
The French aerospace & defense sector shrank by 3.3% in 2010 to reach a value of $38.4 billion.
Market value forecast

In 2015, the French aerospace & defense sector is forecast to have a value of $46 billion, an increase of 19.8% since 2010.
Market segmentation I
Defense is the largest segment of the aerospace & defense sector in France, accounting for 62.3% of the sector's total value.
Market segmentation II
France accounts for 17.1% of the European aerospace & defense sector value.
Market share
EADS is the leading player in the French aerospace & defense sector, generating a 15.2% share of the sector's value.
Market rivalry
Rivalry within the Aerospace and Defense market is strong with large organizations competing intensely for government and commercial contracts.

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CONTENTS
TABLE OF CONTENTS
EXECUTIVE SUMMARY MARKET OVERVIEW Market definition Research highlights Market analysis MARKET VALUE MARKET SEGMENTATION I MARKET SEGMENTATION II MARKET SHARE FIVE FORCES ANALYSIS Summary Buyer power Supplier power New entrants Substitutes Rivalry LEADING COMPANIES EADS N.V. Finmeccanica SpA Thales SA MARKET FORECASTS Market value forecast MACROECONOMIC INDICATORS APPENDIX Methodology Industry associations Related Datamonitor research Disclaimer
2 7 7 8 9 10 11 12 13 14 14 15 16 17 18 19 20 20 26 31 36 36 37 39 39 40 40 41
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CONTENTS
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CONTENTS
LIST OF TABLES
Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Table 21: Table 22: Table 23: France aerospace & defense sector value: $ billion, 200610 France aerospace & defense sector segmentation I:% share, by value, 2010 France aerospace & defense sector segmentation II: % share, by value, 2010 France aerospace & defense sector share: % share, by value, 2010 EADS N.V.: key facts EADS N.V.: key financials ($) EADS N.V.: key financials () EADS N.V.: key financial ratios Finmeccanica SpA: key facts Finmeccanica SpA: key financials ($) Finmeccanica SpA: key financials () Finmeccanica SpA: key financial ratios Thales SA: key facts Thales SA: key financials ($) Thales SA: key financials () Thales SA: key financial ratios France aerospace & defense sector value forecast: $ billion, 201015 France size of population (million), 200610 France gdp (constant 2000 prices, $ billion), 200610 France gdp (current prices, $ billion), 200610 France inflation, 200610 France consumer price index (absolute), 200610 France exchange rate, 200610 10 11 12 13 20 23 23 24 26 28 29 29 31 34 34 34 36 37 37 37 38 38 38

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CONTENTS
LIST OF FIGURES
Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: France aerospace & defense sector value: $ billion, 200610 France aerospace & defense sector segmentation I:% share, by value, 2010 France aerospace & defense sector segmentation II: % share, by value, 2010 France aerospace & defense sector share: % share, by value, 2010 Forces driving competition in the aerospace & defense sector in France, 2010 Drivers of buyer power in the aerospace & defense sector in France, 2010 Drivers of supplier power in the aerospace & defense sector in France, 2010 Factors influencing the likelihood of new entrants in the aerospace & defense sector in France, 2010 Factors influencing the threat of substitutes in the aerospace & defense sector in France, 2010 Drivers of degree of rivalry in the aerospace & defense sector in France, 2010 EADS N.V.: revenues & profitability EADS N.V.: assets & liabilities Finmeccanica SpA: revenues & profitability Finmeccanica SpA: assets & liabilities Thales SA: revenues & profitability Thales SA: assets & liabilities France aerospace & defense sector value forecast: $ billion, 201015 10 11 12 13 14 15 16
17
Figure 9:
18 19 24 25 30 30 35 35 36
Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Figure 16: Figure 17:

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MARKET OVERVIEW
MARKET OVERVIEW
Market definition
The aerospace & defense market is deemed to be the revenues accrued by manufacturers from civil and military aerospace and defense procurements. Such procurements only include equipment, parts, and maintenance (EPM); other elements of military spending, such as personnel and buildings, are omitted. Defense electronics and military aerospace are covered by the defense segment; the civil aerospace segment includes civilian planes and space equipment, but excludes military aircraft and related items. Any currency conversions used in the creation of this report have been calculated using constant 2010 annual average exchange rates. For the purposes of this report, Europe consists of Western Europe and Eastern Europe. Western Europe comprises Belgium, Denmark, France, Germany, Greece, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. Eastern Europe comprises the Czech Republic, Hungary, Poland, Romania, Russia, and Ukraine.

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MARKET OVERVIEW
Research highlights
The French aerospace & defense market had total revenues of $38.4 billion in 2010, representing a compound annual growth rate (CAGR) of 2.3% between 2006 and 2010. The defense segment was the market's most lucrative in 2010, with total revenue of $24 billion, equivalent to 62.3% of the market's overall value. The performance of the market is forecast to accelerate, with an anticipated CAGR of 3.6% for the fiveyear period 2010 - 2015, which is expected to drive the market to a value of $46 billion by the end of 2015.

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MARKET OVERVIEW
Market analysis
After a period of fluctuating growth, the French aerospace & defense market fell in decline this year. Recovery is expected in the forecast period and the market set to stabilize, with annual rate largely exceeding 3%. The French aerospace & defense market had total revenues of $38.4 billion in 2010, representing a compound annual growth rate (CAGR) of 2.3% between 2006 and 2010. In comparison, the German and UK markets grew with CAGRs of 3.8% and 2.9% respectively, over the same period, to reach respective values of $34.9 billion and $31.5 billion in 2010. The defense segment was the market's most lucrative in 2010, with total revenue of $24 billion, equivalent to 62.3% of the market's overall value. The civil aerospace segment contributed revenue of $14.5 billion in 2010, equating to 37.7% of the market's aggregate value. The performance of the market is forecast to accelerate, with an anticipated CAGR of 3.6% for the fiveyear period 2010 - 2015, which is expected to drive the market to a value of $46 billion by the end of 2015. Comparatively, the German and UK markets will grow with CAGRs of 2.9% and 4.9% respectively, over the same period, to reach respective values of $40.3 billion and $40.1 billion in 2015.

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MARKET VALUE
MARKET VALUE
The French aerospace & defense sector shrank by 3.3% in 2010 to reach a value of $38.4 billion. The compound annual growth rate of the sector in the period 200610 was 2.3%. Table 1: Year 2006 2007 2008 2009 2010 CAGR: 200610 Source: Datamonitor France aerospace & defense sector value: $ billion, 200610 $ billion 35.2 36.1 38.3 39.8 38.4 billion 26.5 27.2 28.9 30.0 29.0 % Growth 2.6% 6.1% 3.9% (3.3%) 2.3% DATAMONITOR
Figure 1:
France aerospace & defense sector value: $ billion, 200610
Source: Datamonitor
DATAMONITOR

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MARKET SEGMENTATION I
MARKET SEGMENTATION I
Defense is the largest segment of the aerospace & defense sector in France, accounting for 62.3% of the sector's total value. The civil aerospace segment accounts for the remaining 37.7% of the sector. Table 2: Category Defense Civil aerospace Total Source: Datamonitor France aerospace & defense sector segmentation I:% share, by value, 2010 % Share 62.3% 37.7% 100% DATAMONITOR
Figure 2:
France aerospace & defense sector segmentation I:% share, by value, 2010
Source: Datamonitor
DATAMONITOR

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MARKET SEGMENTATION II
MARKET SEGMENTATION II
France accounts for 17.1% of the European aerospace & defense sector value. Germany accounts for a further 15.5% of the European sector. Table 3: Category France Germany United Kingdom Italy Spain Rest of Europe Total Source: Datamonitor France aerospace & defense sector segmentation II: % share, by value, 2010 % Share 17.1% 15.5% 14.1% 6.6% 3.9% 42.7% 100% DATAMONITOR
Figure 3:
France aerospace & defense sector segmentation II: % share, by value, 2010
Source: Datamonitor
DATAMONITOR

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MARKET SHARE
MARKET SHARE
EADS is the leading player in the French aerospace & defense sector, generating a 15.2% share of the sector's value. Thales accounts for a further 10.1% of the sector. Table 4: Company EADS Thales SAFRAN Finmeccanica Other Total Source: Datamonitor France aerospace & defense sector share: % share, by value, 2010 % Share 15.2% 10.1% 9.6% 6.2% 58.8% 100% DATAMONITOR
Figure 4:
France aerospace & defense sector share: % share, by value, 2010
Source: Datamonitor
DATAMONITOR

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FIVE FORCES ANALYSIS

The aerospace & defense market will be analyzed taking manufacturers of aerospace and defense equipment, products and systems as players. The key buyers will be taken as government organizations, the military, airline companies and space programs such as NASA, and entities providing raw materials and parts for manufacture as the key suppliers.
Summary
Figure 5: Forces driving competition in the aerospace & defense sector in France, 2010
Source: Datamonitor
DATAMONITOR
Rivalry within the Aerospace and Defense market is strong with large organizations competing intensely for government and commercial contracts. Players within the aerospace and defense market are generally large, integrated multinational companies, not least because acquisitions have become an increasing trend within the market. This scale makes it difficult for new companies wanting to enter the market in a significant way, a problem further exacerbated by the high capital outlay and expertise needed for market success to be achieved. This capital outlay places such players in a powerful position providing them with strong bargaining power with buyers and suppliers. However, the financial muscle of typical buyers - particularly governments -dilutes this to some extent. Furthermore, despite suppliers' smaller scale relative to market players, high quality inputs are very important to the manufacturers' businesses, strengthening supplier power in the supply chain.

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Buyer power
Figure 6: Drivers of buyer power in the aerospace & defense sector in France, 2010
Source: Datamonitor
DATAMONITOR
In the commercial aircraft sector, two companies, Boeing and Airbus, hold a near-duopoly. As a result, buyers choice is limited. The two companies often produce slightly differentiated offerings instead of competing head to head. Although more manufacturers within other aerospace and defense sectors, consolidation has led to increasingly smaller numbers of players. The large size of these competitors, due to past merger activity, means they have potentially strong bargaining power with buyers. However buyers in the defense segment have considerable financial muscle, as they are nearly always government organizations. This power is diluted somewhat as aerospace and defense products and systems are highly important to buyers. Companies like Lockheed Martin not only provide military aircraft and hardware like missiles, but also cater for the repair and logistics needs of their buyers, which increases switching costs and decreases buyer power. Manufacturers are able differentiate their products through innovation which weakens buyer power further. Overall buyer power is moderate.

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Supplier power
Figure 7: Drivers of supplier power in the aerospace & defense sector in France, 2010
Source: Datamonitor
DATAMONITOR
Suppliers within the aerospace and defense market are entities providing raw materials and components for manufacture of aerospace and defense equipment. The quality and availability of these inputs is highly important to the quality of the end-products in the aerospace and defense industry, increasing the power of suppliers. In the post-recession years commodity prices still remain high which has impacted company margins and increased oil prices have had a particularly negative effect on the aerospace sector. This had led to companies investing in new technologies and engineering such as green planes which boast much higher fuel efficiencies i.e. the Boeing 787 Dreamliner. Other primary raw materials used include metals such as aluminum and steel. As economies move out of recession and demand for aerospace and defense products rises, players will be aware that their input prices are also likely to start rising. Suppliers often provide to a wide range of industries such as automotive and rail, and this reduces their dependence on the aerospace and defense industries. However, there are also a large number of suppliers to choose from which increases players' choice and bargaining power. Supplier power is moderate overall.

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New entrants
Figure 8: Factors influencing the likelihood of new entrants in the aerospace & defense sector in France, 2010
Source: Datamonitor
DATAMONITOR
Most prospective players need to enter the market as large-scale, integrated companies in order to effectively compete against incumbents; most of them are long-established and have very strong brands. The business model typical for this market also requires large amounts of expenditure in terms of materials needed, storage and transportation modes and so on. Expertise and knowledge is crucial to the success of companies, as the work is highly specialized. The arms industry has become increasingly concentrated, both on national as well as international level. Companies in the industry are obliged to adhere to strict regulations involving national security, export restrictions and licensing for military goods, accounting rules and safety requirements. Furthermore, increasing fears about global warming are leading to a focus on reducing emissions, with many firms having to re-design and adjust the way they manufacture products to improve fuel efficiency. Successful entry to the market may be more likely to be achieved if an existing company with similar operations (i.e. engineering) diversifies into the market. Recent contraction in market value may tend to discourage newcomers; however, the growth prognoses are optimistic which may boots this threat in future. Overall the threat of new entrants is weak.

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Substitutes
Figure 9: Factors influencing the threat of substitutes in the aerospace & defense sector in France, 2010
Source: Datamonitor
DATAMONITOR
There are no real substitutes to the manufacture of defense systems; however, there are alternatives to commercial aircraft. End-users of air transportation (passengers and companies wishing to transport their goods as air freight) may opt for alternative modes of transport, such as rail. In the short term the substitution of other modes of transport for air travel seems unlikely, but with increasing fears about global warming and carbon footprints, it is possible that alternative modes of transport may become attractive to companies seeking an eco-friendly reputation. In these circumstances, players in the civil aerospace sector may experience the pull-through of such changes in demand. Overall, the threat of substitutes is weak.

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Rivalry
Figure 10: Drivers of degree of rivalry in the aerospace & defense sector in France, 2010
Source: Datamonitor
DATAMONITOR
This is a market dominated by large multinationals that are highly diversified in terms of both the products they manufacture and their geographical presence. This protects from any unreliability in particular markets, and thus eases rivalry. The duopoly of the commercial aircraft market means that Boeing and Airbus each face the other as their sole rival, but they are quite evenly matched. Factors such as the rising threat of global terrorism have led to the defense sector being the most lucrative, with the market growing steadily. The existence of less technologically and militarily developed nations worldwide has given defense firms the opportunity to provide services for huge sums like European Aeronautic Defence and Space Defence & Security company (EADS DS) which won a contract in 2009 to protect Saudi borders for $2.8 billion. In contrast, civil aerospace has experienced downturns with loss-making airlines less able to countenance high capital expenditure on new planes, and making the market less lucrative. In 2010 both Boeing and Airbus announced the loss of orders for dozens of planes from Dubai Aerospace Enterprise. Competition is also intense in terms of winning defense contracts and companies use innovation and new technology to differentiate their service. Rivalry in this market is strong.

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LEADING COMPANIES
LEADING COMPANIES
EADS N.V.
Table 5: EADS N.V.: key facts Mendelweg 30, 2333 CS Leiden, NLD 31 71 524 56 00 37 Boulevard de Montmorency, 75781 Paris Cedex 16, FRA 33 1 42 24 24 24 www.eads.com December EAD; EAD Paris; Madrid DATAMONITOR
Head office: Telephone: Local office: Telephone: Website: Financial year-end: Ticker: Stock exchange: Source: company website
European Aeronautic Defense and Space Company (EADS) is an aerospace, defense and related services company. The company operates in North America, Europe, Asia-Pacific, Middle East and Latin America. The company operates through six business divisions: Airbus commercial, Cassidian, Astrium, Eurocopter, Airbus military and other. Airbus is one of the world's leading aircraft suppliers. Airbus' modern and comprehensive product line comprise aircraft ranging from 107 to 525 seats: the single-aisle A320 Family, the wide-body long-range A330/A340 and the all-new next generation A350 XWB Family, and the ultra-long-range, double-decker A380 Family. The company also continues to broaden its scope and product range by applying its expertise to the military market. Airbus sold 510 commercial aircraft to 94 customers. Deliveries of military aircraft also proceeded at a high level, as 20 aircraft were delivered to armed forces in Europe, the US and Latin America. The Cassidian division offers integrated systems solutions for the armed forces and global security. It has a wide range of platforms, including EADS's role in Eurofighter, missile systems, defense communication systems, defense electronics and services. Through its Cassidian division, the company provides network solutions combining military aircraft, missile systems, defense and communications systems, defense electronics and related services. It also supplies electronics and sensors for Unmanned Aerial Vehicles; advanced avionics for the company's helicopters; and high-tech products for secure communications.

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LEADING COMPANIES
The Astrium division is one of the Europe's preeminent space groups. This division is a supplier of satellites, launchers and space services. Astrium operates through three branches: Astrium Space Transportation, Astrium Satellites and Astrium Services. Astrium Space Transportation is a European prime contractor for civil and military space transportation and manned space activities. It designs, develops and produces Ariane launchers and ballistic missiles for France's nuclear deterrent force. It is also an industrial prime contractor for the Columbus laboratory and the ATV cargo vessel operating for the International Space Station, and is a specialist in atmospheric re-entry vehicles, propulsion systems and space equipment. Astrium Satellites is engaged in the design and manufacture of satellite systems, with business activities covering civil and military telecommunications and Earth observation, science and navigation programs, together with a complete range of associated ground infrastructure and space equipment. Astrium Services provides services in secure communications, Earth observation services, and navigation services. Astrium operates through its subsidiaries, including Surrey Satellite Technology, for small satellites and sub-systems; Dutch Space, for space instruments and simulation systems; Tesat for payload components; EADS Sodern for optronics and space equipment; and CILAS for laser technologies and high precision optics. Astrium also provides launch services, through its shareholdings in Arianespace (Ariane launcher), Starsem (Soyuz launcher) and Eurockot (Rockot launcher), as well as space-based services via telecommunications and Earth observation satellites, through subsidiaries such as Paradigm, Infoterra, and Spot Image. The Eurocopter division manufactures and sells a wide range of civil and military helicopters. Eurocopter's product range includes light single-engine, light twin-engine, medium and heavy helicopters which are adaptable to different mission types based on customer needs. It delivered 527 helicopters in FY2010. It supports a wide variety of missions such as corporate, Emergency Medical Service, oil and gas, commercial business and military missions, among others. Airbus military was formally created in April 2009, following the integration of the former Military Transport Aircraft Division (MTAD) and of Airbus Military Sociedad (AMSL) into Airbus. It is a military and humanitarian transport aircraft manufacturer and is engaged into developing, producing, selling and supporting a comprehensive family of airlifters ranging from three to 37 tons of payload. Airbus military is fully responsible for the A400M program, as well as for the military tanker transport (MRTT) derivative of the A330, which can be fitted with an in-house developed state-of-the art flight-refueling boom (ARBS). It is also responsible for future military derivative of civil Airbus platforms. Airbus military is one of the leaders in the market segments for light and medium-sized military transport aircraft. Airbus military is also into conversion of the civil Airbus platforms into Multi Role Tanker Transport (MRTT) aircraft.

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LEADING COMPANIES
Airbus military applies the Integrated Logistic Support concept throughout the life cycle of its products, from the first design phase right through to the end of their useful lifetimes. Airbus military provides services to more than 800 aircrafts. The other businesses division includes the ATR (Avions de Transport Regional) and EADS Sogerma services. The activities of these business units comprise development, manufacturing, marketing and sale of regional turboprop aircraft, light commercial aircraft and aircraft components, as well as civil and military aircraft conversion and maintenance services. ATR is the one of the largest manufacturer of regional aircraft. ATR is organized into several business units: commercial directorate, financial department, customer services and shared services unit and ATR engineering, operations and technology unit. EADS Sogerma services provide support services for civil and military aircraft. It designs and manufactures aero structure elements in metal and composite for commercial and military aircraft such as Airbus A318/A319, A320, A340, A380, A400M, ATR, Bombardier and Boeing 787, etc. EADS Sogerma also provides cockpit and passengers seats for commercial and military aircraft as well as for business jets and helicopters. Key Metrics The company recorded revenues of $60,608 million in the fiscal year ending December 2010, an increase of 6.8% compared to fiscal 2009. Its net income was $733 million in fiscal 2010, compared to a net loss of $1,011 million in the preceding year. EADS generates revenues through six business divisions: Airbus commercial (59.2% of the total revenues during FY2010), Cassidian (12.6%), Astrium (10.9%), Eurocopter (9.6%), Airbus military (5.4%), and other (2.3%). During FY2010, the Airbus commercial division recorded revenues of E27,067 million ($35,856 million), an increase of 5% over FY2009. The Cassidian division recorded revenues of E5,747 million ($7,613.1 million) in FY2010, an increase of 14.3% over FY2009. The Astrium division recorded revenues of E4,985 million ($6,603.7 million) in FY2010, an increase of 4.2% over FY2009. The Eurocopter division recorded revenues of E4,391 million ($5,816.8 million) in FY2010, an increase of 3.8% over FY2009. The Airbus military division recorded revenues of E2,488 million ($3,295.9 million) in FY2010, an increase of 23.9% over FY2009.
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LEADING COMPANIES
The other division recorded revenues of E1,045 million ($1,384.3million) in FY2010, an increase of 9.3% over FY2009. France accounted for 9.7% of the total revenues in FY2010. Revenues from France reached E4,422 million ($5,857.9 million) in FY2010, an increase of 16.2% over FY2009.
Table 6: $ million
EADS N.V.: key financials ($) 2006 52,238.8 131.1 95,560.9 78,138.2 116,805 2007 51,826.8 (590.8) 99,957.6 82,499.2 116,493 2008 57,360.1 2,082.5 100,880.9 86,142.2 118,349 2009 56,726.9 (1,010.8) 106,379.8 92,283.5 119,506 2010 60,608.3 732.6 110,199.0 98,361.3 122,000
Revenues Net income (loss) Total assets Total liabilities Employees Source: company filings
DATAMONITOR
Table 7: million
EADS N.V.: key financials () 2006 39,434.0 99.0 72,137.0 58,985.0 2007 39,123.0 (446.0) 75,456.0 62,277.0 2008 43,300.0 1,572.0 76,153.0 65,027.0 2009 42,822.0 (763.0) 80,304.0 69,663.0 2010 45,752.0 553.0 83,187.0 74,251.0
Revenues Net income (loss) Total assets Total liabilities Source: company filings
DATAMONITOR

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LEADING COMPANIES
Table 8: Ratio
EADS N.V.: key financial ratios 2006 0.3% 15.3% 1.9% 2.4% 81.8% 0.1% $447,231 $1,123 2007 (1.1%) (0.8%) 4.6% 5.6% 82.5% (0.6%) $444,892 ($5,072) 2008 3.6% 10.7% 0.9% 4.4% 85.4% 2.1% $484,669 $17,596 2009 (1.8%) (1.1%) 5.5% 7.1% 86.7% (1.0%) $474,678 ($8,458) 2010 1.2% 6.8% 3.6% 6.6% 89.3% 0.7% $496,789 $6,005
Profit margin Revenue growth Asset growth Liabilities growth Debt/asset ratio Return on assets Revenue per employee Profit per employee Source: company filings
DATAMONITOR
Figure 11: EADS N.V.: revenues & profitability
Source: company filings
DATAMONITOR

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LEADING COMPANIES
Figure 12: EADS N.V.: assets & liabilities
DATAMONITOR

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LEADING COMPANIES
Finmeccanica SpA
Table 9: Finmeccanica SpA: key facts Piazza Monte Grappa 4, 00195 Rome, ITA 39 06 324 731 39 06 320 8621 www.finmeccanica.it December FNC Milan DATAMONITOR
Head office: Telephone: Fax: Website: Financial year-end: Ticker: Stock exchange: Source: company website
Finmeccanica is an Italian industrial group operating globally in the aerospace, defense and security sectors. The company is one of the world's leading groups in the fields of helicopters and defense electronics. It is also the European leader in satellite and space services and the energy and transport fields. Finmeccanica has international operations throughout Europe, the Americas, and the Asia Pacific. The company operates in eight divisions: defense and security electronics, helicopters, aeronautics, transportation, energy, defense systems, space and other activities. The defense and security electronics division manufactures major integrated systems based on complex architectures and network-centric techniques. It manufactures avionics and electro optical equipment and systems; unmanned aircraft; radar systems; land and naval command and control systems; air traffic control systems; and integrated communications systems. This division also develops networks for land, naval, satellite and avionic applications; private mobile radio communications systems; value-added services and IT and security activities. In addition, it also provides integrated products, services and support for military forces and government agencies and activities for private mobile radio communications systems. Finmeccanica has a number of subsidiaries that are active in the defense and security electronics industry, including: the SELEX Galileo group, the SELEX Sistemi Integrati group, the Elsag Datamat Group, the SELEX Communications group, SELEX Service Management, Seicos and the DRS Technologies (DRS) group. The helicopter division is operated by AgustaWestland subsidiary. It is engaged in the design and development of helicopters and tilt rotors for civil and military use.

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LEADING COMPANIES
AgustaWestland also develops the technology required to undertake every phase of a helicopter, from the preliminary analysis and definition of operational requirements to the design, development and production of transmissions, rotors, metal and composite structures and avionics systems, as well as their integration into a complete 'helicopter system'. The aeronautics division includes Alenia Aeronautica subsidiary which produces military aircraft for combat, transport and special missions, as well as civil applications such as aero structures and regional turboprop aircraft. The subsidiary operates its business through its two subsidiaries including Alenia Aermacchi and the GIE-ATR consortium. Alenia Aermacchi manufactures military training aircraft and engine nacelles for civil aeronautics and GIE-ATR consortium is engaged in the final assembling and marketing of ATR aircraft. The transportation division of the company is engaged in the design, development and manufacturing of rolling stock, transport solutions and railway signaling systems. Ansaldo STS, a subsidiary of the company, designs, develops and produces rail and metro signaling and traffic monitoring systems and services. AnsaldoBreda is a Finmeccanica company that builds rolling stock for rail and metro networks. In addition, Finmeccanica's another subsidiary, BredaMenarinibus, manufactures buses in Italy. Ansaldo Energia and its subsidiaries make up the energy division of Finmeccanica. Ansaldo Energia is specialized in providing plants and components for generating electricity through thermal, combined-cycle and simple-cycle, cogeneration and geothermal power plants. It also provides post-sale service and nuclear activities such as plant engineering, services and decommissioning. In addition, it also provides and services related to power generation from renewable energies. The companies which are directly controlled by Ansaldo Energia include Ansaldo Nucleare, Ansaldo Fuel Cells, Asia Power Projects, Ansaldo ESG and the Ansaldo Thomassen group. The defense systems division is engaged in the design, development and production of missile systems, torpedoes, naval artillery and armored vehicles. Defense systems include the activities of MBDA (the joint venture with BAE Systems and EADS in which Finmeccanica holds a 25% stake) in missile systems; the Oto Melara group in land, sea and air weapons systems; and WASS in underwater weapons (torpedoes and countermeasures) and sonar systems. Finmeccanica operates in the space industry through the space alliance between Finmeccanica and Thales through two joint ventures in the space industry dedicated to satellite services. The two subsidiaries include Telespazio Holding and Thales Alenia Space. Telespazio Holding focuses on satellite services in networks and connectivity; satellite operations; earth observation; and navigation and infomobility segments. It has its main industrial facilities in Italy, France, Germany and Spain.

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LEADING COMPANIES
Thales Alenia Space focuses on the design, development and production of telecommunications satellites (commercial, governmental and military); scientific programs; earth observation systems (optical and radar); satellite navigation; orbital infrastructures; and transport systems equipment and devices. It has its main industrial facilities in France, Italy, Belgium and Spain. The other activities division of the company includes: Finmeccanica Group Services, a service management company; Finmeccanica Finance and Meccanica Holdings USA, responsible for providing financial support to the company; and Finmeccanica Group Real Estate, which manages, rationalizes and improves the company's real estate holdings. Key Metrics The company recorded revenues of $24,766 million in the fiscal year ending December 2010, an increase of 2.9% compared to fiscal 2009. Its net income was $653 million in fiscal 2010, compared to a net income of $951 million in the preceding year. The UK accounted for 11.8% of the total revenues in FY2010. Revenues from the UK reached E2,201 million ($2,915.7 million) in FY2010, an increase of 6.2% over FY2009.
Table 10: $ million
Finmeccanica SpA: key financials ($) 2006 14,809.0 1,351.2 30,973.1 23,876.6 58,059 2007 12,077.4 389.5 31,856.7 24,660.9 59,882 2008 12,833.8 524.6 32,505.8 25,356.3 62,308 2009 24,078.0 951.1 40,383.9 31,708.4 73,056 2010 24,765.5 653.1 36,177.9 26,775.1 75,197
DATAMONITOR

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LEADING COMPANIES
Table 11: million
Finmeccanica SpA: key financials () 2006 11,179.0 1,020.0 23,381.0 18,024.0 2007 9,117.0 294.0 24,048.0 18,616.0 2008 9,688.0 396.0 24,538.0 19,141.0 2009 18,176.0 718.0 30,485.0 23,936.0 2010 18,695.0 493.0 27,310.0 20,212.0
DATAMONITOR
Table 12: Ratio
Finmeccanica SpA: key financial ratios 2006 9.1% 10.7% 6.9% 4.3% 77.1% 4.5% $255,068 $23,273 2007 3.2% (18.4%) 2.9% 3.3% 77.4% 1.2% $201,687 $6,504 2008 4.1% 6.3% 2.0% 2.8% 78.0% 1.6% $205,974 $8,419 2009 4.0% 87.6% 24.2% 25.1% 78.5% 2.6% $329,583 $13,019 2010 2.6% 2.9% (10.4%) (15.6%) 74.0% 1.7% $329,342 $8,685
DATAMONITOR

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LEADING COMPANIES
Figure 13: Finmeccanica SpA: revenues & profitability
DATAMONITOR
Figure 14: Finmeccanica SpA: assets & liabilities
DATAMONITOR

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LEADING COMPANIES
Thales SA
Table 13: Head office: Telephone: Local office: Telephone: Fax: Website: Financial year-end: Ticker: Stock exchange: Source: company website Thales SA: key facts 45 rue de Villiers, Neuilly-sur-Seine Cedex, 92526, FRA 33 1 5777 8000 Thales Alenia Space SAS, 100 Boulevard du Midi, BP 99 06156, Cannes la Bocca, FRA 33 4 92 92 70 00 33 4 92 92 31 40 www.thalesgroup.com December THALES Euronext Paris DATAMONITOR
Thales is a provider of mission-critical information systems for defense and security, aerospace and transportation markets. The company designs, develops, and implements a range of electronic solutions for aircraft manufacturers and airlines, space and defense agencies, civil and military institutions, commercial satellite operators and users, governments and public transport administrators. The company's significant shareholders include the French government accounting for 27% and Dassault Aviation 25.9%. Its major customers include French Ministry of Defense (MoD), the UK MoD, Airbus and Boeing, among others. It also has alliances with Alcatel-Lucent, DCNS, Raytheon, Finmeccanica, and Diehl Aerospace, among others. The company has operations in over 50 countries across Europe, North America, Middle East, Central Asia, Asia Pacific, Africa, and Latin America. The company operates through two business segments: defense and security; and aerospace and transportation. The defense and security business segment is engaged in providing defense and security solutions. The company's defense business is engaged in designing and delivering systems for all four environments: air, land, sea and space. Thales covers four core areas of expertise which include: surveillance, detection and intelligence systems; communication, command and control systems; protection systems and mission / combat systems; and mission services and support. The defense business designs and develops detection and identification systems and solutions; surveillance, fire control and multifunction radars; sonar suites; and ISTAR systems for unmanned aerial vehicle (UAV)-based battlefield surveillance. It also develops data fusion and interpretation solutions.
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LEADING COMPANIES
The company, through its ThalesRaytheonSystems (TRS) joint venture offers air command and control systems, as well as battlefield surveillance and coordination systems. It also develops ALTBMD (active layered tactical ballistic missile defense) architectures. The defense business also offers a broad range of protection solutions such as improvised explosive devices. In addition, it designs integrated mission and combat systems; electronic subsystems for missiles and precision-guided munitions; high-performance seekers and proximity fuses. Thales also offers training, lifecycle support, repairs, guaranteed levels of operational availability, and upgrades of defense equipment. The company's security business is engaged in system integration that offers technologies and competencies needed for information and communication systems security, digital identity, electronic physical security, surveillance and synthetic environments. It offers critical infrastructure protection solutions, access control solutions, product and asset lifecycle management solutions, supervisory, control and data acquisition (SCADA) systems, urban and civil security solutions, spectrum monitoring and homeland security solutions, and maritime safety and security solutions. It also designs, builds and operates mission-critical information systems and is a leading provider of IT outsourcing services. The security business offers business process consulting, risk evaluation, antimoney laundering solutions, secure transactional platforms, application maintenance, process optimization, business continuity programs, managed security services, IT outsourcing and remote management, and crypto products and solutions to industry and finance. In addition, security business offers IT solutions for research industry; industry-specific outsourcing solutions for telecom IT applications and infrastructures; and simulation-based training solutions for aircraft and helicopter pilots. Thales' aerospace and transportation business segment focuses on providing onboard systems and solutions, railways signaling solutions and integrated transportation systems. The aerospace business offers onboard and ground systems for the civil aerospace market. It offers systems and functions for all types of aircraft - commercial airliners, regional, business aircraft, and helicopters - and is a first-tier partner of the world's leading manufacturers, including Airbus, ATR, Boeing, Bombardier, Gulfstream and Sukhoi, on all of their major programs. The aerospace business also provides electronic equipment for aircraft, including avionic suites and systems, subsystems and systems for flight control, and navigation, communication and surveillance solutions for aircraft including helicopters. It also supplies cabin systems, which include passenger systems, connectivity solutions, and cabin lighting. The business provides onboard electrical power management and develops electrical power generation and conversion systems for commercial aircraft, including helicopters. The aerospace business offers services for the civil aviation market, from user training to outsourced management of infrastructure, IT systems and service engineering.

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LEADING COMPANIES
It also offers radars and sensors, air traffic management systems, airport solutions and navigation systems, training and simulation systems, and communication and navigation systems. The company also develops satellite technologies through its subsidiary Thales Alenia Space. It offers networking satellite solutions, satellite delivery services, backup satellite control, fully hosted in-flight operations, TCR station services. In addition, the space business designs, builds and operates complex systems for life in space, such as re-entry vehicles and flying test-beds, next generation technologies and thermo-mechanical components. It also offers navigation and aeronautical communication systems, satellite solutions, ground systems, and components and subsystems to other integrators. The segment's transportation business is engaged in providing railways signaling solutions and integrated transportation systems to the transport market. It offer solutions for train control, train routing, rail network management, fare control systems, capacity and revenue management, car park management, tramway management control, asset management for rail, critical information systems, electronic toll collection, road traffic management, and heavy vehicles driving simulators. Key Metrics The company recorded revenues of $17,387 million in the fiscal year ending December 2010, an increase of 1.9% compared to fiscal 2009. Its net loss was $143 million in fiscal 2010, compared to a net loss of $267 million in the preceding year. Revenues from the Defence & Security business segment were stable at $9,955.2 million, compared with $9,924.8 million in 2009. Revenues from the Aerospace & Transport segment grew to $7,337.6 million, an increase of 4% (1% in organic terms) over 2009. France is the companys largest market, generating 45.6% of the revenues in 2010. Revenues from France reached $7,931.1 million in 2010, a decrease of -3%, comparing to 2009.

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LEADING COMPANIES
Table 14: $ million
Thales SA: key financials ($) 2006 13,597.3 518.1 19,899.5 16,870.2 52,160 2007 16,288.7 1,177.3 23,442.7 18,302.8 61,195 2008 16,777.2 742.4 23,759.7 18,528.5 63,248 2009 17,064.3 (267.1) 23,854.9 18,882.2 67,590 2010 17,386.6 (142.5) 25,196.6 20,319.9 63,734
DATAMONITOR
Table 15: million
Thales SA: key financials () 2006 10,264.3 391.1 15,021.7 12,735.0 2007 12,296.0 888.7 17,696.4 13,816.4 2008 12,664.8 560.4 17,935.7 13,986.8 2009 12,881.5 (201.6) 18,007.6 14,253.8 2010 13,124.8 (107.6) 19,020.4 15,339.1
DATAMONITOR
Table 16: Ratio
Thales SA: key financial ratios 2006 3.8% 0.0% 8.2% 7.7% 84.8% 2.7% $260,684 $9,933 2007 7.2% 19.8% 17.8% 8.5% 78.1% 5.4% $266,177 $19,238 2008 4.4% 3.0% 1.4% 1.2% 78.0% 3.1% $265,261 $11,737 2009 (1.6%) 1.7% 0.4% 1.9% 79.2% (1.1%) $252,468 ($3,951) 2010 (0.8%) 1.9% 5.6% 7.6% 80.6% (0.6%) $272,800 ($2,236)
DATAMONITOR

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LEADING COMPANIES
Figure 15: Thales SA: revenues & profitability
DATAMONITOR
Figure 16: Thales SA: assets & liabilities
DATAMONITOR

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MARKET FORECASTS
MARKET FORECASTS
Market value forecast
In 2015, the French aerospace & defense sector is forecast to have a value of $46 billion, an increase of 19.8% since 2010. The compound annual growth rate of the sector in the period 201015 is predicted to be 3.6%. Table 17: Year 2010 2011 2012 2013 2014 2015 CAGR: 201015 Source: Datamonitor France aerospace & defense sector value forecast: $ billion, 201015 $ billion 38.4 40.1 41.5 43.1 44.8 46.0 billion 29.0 30.3 31.3 32.6 33.8 34.7 % Growth (3.3%) 4.4% 3.3% 4.1% 3.8% 2.7% 3.6% DATAMONITOR
Figure 17: France aerospace & defense sector value forecast: $ billion, 201015
Source: Datamonitor
DATAMONITOR

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MACROECONOMIC INDICATORS
Table 18: Year 2006 2007 2008 2009 2010 Source: Datamonitor France size of population (million), 200610 Population (million) 61.6 62.0 62.3 62.6 63.0 % Growth 0.7% 0.6% 0.5% 0.5% 0.5% DATAMONITOR
Table 19: Year 2006 2007 2008 2009 2010
France gdp (constant 2000 prices, $ billion), 200610 Constant 2000 Prices, $ billion 1,474.7 1,508.6 1,507.1 1,466.4 1,486.9 % Growth 2.5% 2.3% (0.1%) (2.7%) 1.4% DATAMONITOR
Source: Datamonitor
Table 20: Year 2006 2007 2008 2009 2010
France gdp (current prices, $ billion), 200610 Current Prices, $ billion 2,245.9 2,548.2 2,820.3 2,599.6 2,554.4 % Growth 5.1% 13.5% 10.7% (7.8%) (1.7%) DATAMONITOR
Source: Datamonitor

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Table 21: Year 2006 2007 2008 2009 2010
France inflation, 200610 Inflation Rate (%) 1.7% 1.6% 3.2% 0.1% 1.7% DATAMONITOR
Source: Datamonitor
Table 22: Year 2006 2007 2008 2009 2010
France consumer price index (absolute), 200610 Consumer Price Index (2000 = 100) 112.1 113.9 117.5 117.6 119.6 DATAMONITOR
Source: Datamonitor
Table 23: Year 2006 2007 2008 2009 2010
France exchange rate, 200610 Exchange rate ($/) 0.7970 0.7308 0.6834 0.7192 0.7549 DATAMONITOR
Source: Datamonitor

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APPENDIX
APPENDIX
Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-checked and presented in a consistent and accessible style. Review of in-house databases Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitors in-house databases provide the foundation for all related industry profiles Preparatory research We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview Definitions Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends Datamonitor aggregates and analyzes a number of secondary information sources, including: National/Governmental statistics International data (official international sources) National and International trade associations Broker and analyst reports Company Annual Reports Business information libraries and databases
Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

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APPENDIX
Industry associations
Groupement des Industries Franaises Aronautiques et Spatiales (GIFAS) 8, rue Galile, 75116 Paris, France Tel.: 33 1 4443 1700 Fax: 33 1 4070 9141 www.gifas.asso.fr The International Coordinating Council of Aerospace Industries Associations (ICCAIA) Gulledelle 94-b.5, B-1200 Brussels, Belgium Tel.: 32 2 775 8110 Fax: 32 2 775 8111 www.iccaia.org
Related Datamonitor research

Industry Profile Global Aerospace & Defense Aerospace & Defense in Europe Aerospace & Defense in Germany

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APPENDIX
Disclaimer
All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Datamonitor plc. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

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ABOUT DATAMONITOR
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INDUSTRY PROFILE

Aerospace & Defense in France

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France - Aerospace & Defense

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Market value forecast

France - Aerospace & Defense

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ABOUT DATAMONITOR Premium Reports Summary Reports Datamonitor consulting

France - Aerospace & Defense

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France - Aerospace & Defense

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France - Aerospace & Defense

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France aerospace & defense sector value: $ billion, 200610

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France aerospace & defense sector share: % share, by value, 2010

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FIVE FORCES ANALYSIS

FIVE FORCES ANALYSIS

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FIVE FORCES ANALYSIS

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FIVE FORCES ANALYSIS

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FIVE FORCES ANALYSIS

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FIVE FORCES ANALYSIS

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FIVE FORCES ANALYSIS

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Figure 11: EADS N.V.: revenues & profitability

Source: company filings

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Figure 12: EADS N.V.: assets & liabilities

Source: company filings