2017全球航空航天与国防行业财务绩效研究_48页_731kb

2017 Global Aerospace and Defense Sector Financial Performance Study Summary

Core Content

This report provides an in-depth analysis of the financial performance of the global aerospace and defense (A&D) sector in 2016, focusing on revenue, operating earnings, margins, and other financial metrics. It highlights the performance of the defense and commercial aerospace subsectors and examines strategic priorities communicated by top A&D executives through their "Letters to Shareholders."

Key Financial Performance Highlights

• Global A&D Sector Revenue Growth: The global A&D sector revenue increased by 2.4% in 2016, reaching US$674.4 billion, up from US$658.7 billion in 2015.
• Revenue Drivers:
  • The electronics segment contributed US$3.7 billion in revenue growth.
  • The OEM segment added US$3.4 billion.
  • Propulsion segment and services segment each added US$1.9 billion and US$1.8 billion, respectively.
  • Other segments (aerostructures, Tier 3) added US$0.7 billion.
• Operating Earnings: Core operating earnings increased by 0.8% to US$70.0 billion, with contributions from:
  • European defense subsector (+US$2.0 billion).
  • US defense subsector (+US$1.7 billion).
  • Negative impact from European commercial aerospace (-US$0.2 billion) and US commercial aerospace (-US$1.8 billion).
  • Other companies (-US$1.2 billion).

Subsector Performance

• Defense Subsector:
  • Global defense revenue grew by 2.1% to US$351.3 billion.
  • US defense subsector grew by 3.1%, driven by a 3.6% increase in DoD funding.
  • European defense subsector grew by only 0.6%, despite a 2.8% increase in defense spending, partly due to Airbus' Defense & Space division recording a US$1.3 billion negative impact.
• Commercial Aerospace Subsector:
  • Global revenue increased by 2.7% to US$323.1 billion.
  • European commercial aerospace saw strong growth at 6.7%, while US commercial aerospace experienced a 1.3% decline due to a 1.8% drop in aircraft deliveries.
  • Aircraft backlog reached an all-time high of 13,687 units in 2016, up 1.6% from the previous year.

Margin Trends

• Global Operating Margin: Sustained at 10.4%, slightly below 2015's 10.5%.
• US Operating Margin: Declined by 2.5% to 11.5%.
• European Operating Margin: Improved by 5.3% to 9.6%.
• Defense Subsector Margins: Outperformed commercial aerospace, increasing by 5.3% to 11.5%, while commercial aerospace margins fell to 9.1%.
• Propulsion Segment: Led in operating margins, improving from 18.0% to 19.2%.
• Tier 2 Suppliers: Outperformed Tier 1 suppliers, with margins near 20%.

Productivity and Employee Metrics

• Sector Productivity: Improved by 1.9% in 2016, with Europe showing stronger growth at 11.1% compared to 1.1% in the US.
• Employee Productivity:
  • Global A&D revenue per employee rose to US$351,692 from US$339,620.
  • US A&D revenue per employee was US$42,817, while Europe's was US$31,970.
• Employee Numbers:
  • Total A&D employees decreased by 1.1% to 1,917,643.
  • Boeing remained the largest employer in the sector with 150,500 employees.

Debt and Financial Leverage

• Debt-to-Equity Ratio:
  • Global A&D sector increased from 1.18 to 1.65, a 39.4% rise.
  • US sector saw a 34.2% increase from 1.79 to 2.40.
  • European sector remained more stable at 1.58, significantly lower than the US.
• Debt Utilization: Companies used increased debt to finance acquisitions, share buybacks, and product development, especially in the US, where low interest rates made borrowing more attractive.

Equity Performance

• US and European A&D Equities: Outperformed their respective market indices in 2016.
  • US A&D equities outperformed the S&P 500 and Dow Jones A&D index.
  • European A&D equities outperformed the STOXX 600 Index.

Strategic Focus from Letters to Shareholders

• Top Themes:
  • Customer relationships.
  • Business growth.
  • New services.
  • Market expansion.
  • Technology development.
• C-Suite Insights: The analysis of top 20 A&D companies' Letters to Shareholders revealed a market-focused and optimistic outlook for the near future, contrasting with more operationally inward language in previous years.

Methodology and Scope

• Scope:
  • The study included the top 100 A&D companies or business segments of conglomerates with revenues over US$500 million in 2016.
  • Exclusions: Government-controlled entities, private companies without public filings, and companies not reporting A&D segment data.
• Methodology:
  • Analyzed 29 key financial metrics, including revenue, operating earnings, margins, ROIC, FCF, and equity performance.
  • Used text mining and topic modeling in R to analyze the Letters to Shareholders.
  • All metrics were calculated in constant US$ to eliminate foreign exchange impact.

Conclusion

The 2017 report highlights a slowdown in global A&D sector growth, with defense outperforming commercial aerospace in both revenue and margin growth. Europe showed greater improvement in margins and productivity, while the US sector faced declining margins and increased leverage. The top 20 companies were analyzed for their performance across various metrics, and strategic priorities were identified through stakeholder communications. The report also underscores the impact of acquisitions, market dynamics, and industry consolidation on sector performance.