NOTEBOOK
2020 Edition

INTERNATIONAL DEFENCE COMPANIESNOTEBOOK
Edition 2020 Edition

INTERNATIONAL DEFENCE COMPANIESMCIMarket & Competitive IntelligenceManuscript completed on 22 November 2019

French defence procurement agency (DGA)
Industrial Affairs and Economic Intelligence Department
60 bd du général Martial Valin - CS 21 623 - 75 509 Paris cedex 15
www.defense.gouv.fr /dga

Xerfi MCI
13-15 rue de Calais - 75009 Paris
www.xerfi-mci.com

FOREWORD
Paris, November 22, 2019
The Department for Industrial Affairs and Economic Intelligence presents, on behalf of
the French defence procurement agency (Direction générale de l’armement, DGA), the2020 edition of the "Notebook on International Defence Companies".
This publication provides key data for a selection of international defence companies
that were chosen according to their main activities.
In this regard, Almaz-Antey, Atos, Huntington Ingalls Industries, Lürssen, Rohde& Schwarz and TechnicAtome were for the first time included in this 2020 edition.
All information such as financial data, key activities and strategic orientations of thecompanies analysed in the Notebook were taken from publicly available, open sources.
The notebook does not in any way reflect the opinions or positions of the DGA or
XERFI MCI, which contributed to its preparation.
A digital version of the notebook, both in French and in English, is available on the DGA’s
website at www.defense.gouv.fr/DGA
I wish you a pleasant reading.
François MESTRE
Director for Industrials Affairs and Economic Intelligence
DGA

3

TABLE OF CONTENTSCOMPANY FACT-SHEETS
Methodological Note .....................................................................................................................

p. 6

Airbus .................................................................................................................................. p. 8
Almaz-Antey ........................................................................................................................ p. 11
ArianeGroup (formerly Airbus Safran Launchers) ............................................................... p. 14
Arquus (formerly Renault Trucks Defense) ..........................................................................

p. 17

ASC Pty Ltd ......................................................................................................................... p. 20
ATOS ................................................................................................................................... p. 23
Babcock International .......................................................................................................... p. 26
BAE Systems ......................................................................................................................

p. 29

Boeing ................................................................................................................................. p. 32
China Shipbuilding Industry Corporation (CSIC) .................................................................. p. 35
Cobham ............................................................................................................................... p. 38
Dassault Aviation ................................................................................................................. p. 41
Diehl Defence .....................................................................................................................

p. 44

DSME .................................................................................................................................. p. 47
Elbit Systems ......................................................................................................................

p. 50

Elettronica ...........................................................................................................................

p. 53

Embraer ..............................................................................................................................

p. 56

Fincantieri ............................................................................................................................ p. 59
General Atomics .................................................................................................................

p. 62

General Dynamics ..............................................................................................................

p. 65

General Electric Aviation (GE Aviation) ................................................................................ p. 68
Hensoldt .............................................................................................................................. p. 71
Hindustan Aeronautics Ltd (HAL) ........................................................................................ p. 74
Honeywell International ......................................................................................................

p. 77

Huntington Ingalls Industries (HII) ....................................................................................... p. 80
Indra Sistemas ....................................................................................................................

p. 83

Israel Aerospace Industries (IAI) .........................................................................................

p. 86

Iveco Defence Vehicles .......................................................................................................

p. 89

Kawasaki Heavy Industries (KHI) ......................................................................................... p. 92
KMW + Nexter Defense Systems (KNDS) .......................................................................... p. 95
Kongsberg ........................................................................................................................... p. 98
4

Korea Aerospace Industries ................................................................................................

p. 101

L3Harris Technologies ..........................................................................................................

p. 104

Leonardo ............................................................................................................................. p. 107
Lockheed Martin .................................................................................................................

p. 110Lürssen ...............................................................................................................................

p. 113

MBDA .................................................................................................................................

p. 116

Meggitt ................................................................................................................................ p. 119
MTU Aero Engines .............................................................................................................. p. 122
Nammo ...............................................................................................................................

p. 125

Naval Group ......................................................................................................................... p. 128
Navantia ..............................................................................................................................

p. 131

Northrop Grumman ............................................................................................................. p. 134
OHB Technologies ............................................................................................................... p. 137
Patria Oyj ............................................................................................................................. p. 140
Polska Grupa Zbrojeniowa (PGZ) ......................................................................................... p. 143
QinetiQ ................................................................................................................................ p. 146
Rafael Advanced Defense Systems ....................................................................................

p. 149Raytheon Company ............................................................................................................. p. 152
Rheinmetall Defence ..........................................................................................................

p. 155

Rohde & Schwarz ................................................................................................................ p. 158
Rolls-Royce .........................................................................................................................

p. 161RUAG ..................................................................................................................................

p. 164

Saab AB .............................................................................................................................

p. 167

Safran .................................................................................................................................. p. 170
Technicatome (formerly Areva TA) ....................................................................................... p. 173
Thales .................................................................................................................................. p. 176
Thales Alenia Space (TAS) ................................................................................................... p. 179
ThyssenKrupp Marine Systems (TKMS) .............................................................................. p. 182
United Aircraft Corporation (UAC) .......................................................................................

p. 185

United Technologies Corporation (UTC) ............................................................................... p. 188

5

METHODOLOGICAL NOTE

SCOPE
The 2020 edition of the Notebook on International Defence Companies covers a panel of 61 companies.
A specific section, “Key Data”, presents the following consolidated financial indicators for each company,
provided such information is available (“N/A” meaning that data is not available):• Revenue (in euros)• Revenue variation (as a percentage change; calculated from data in local currency)• Defence revenue (as a % of total revenue)• Export revenue (as a % of total revenue)• Operating profit/loss (in euros)• Operating margin (as a %)• Net income (in euros) or net income attributable to shareholders• Order book at the end of the fiscal year (in euros)• HeadcountTo ensure consistency, consolidated financial statements were the preferred source of information.
Emphasis was placed on the most recent, restated financial indicators. Under the IFRS 15 standard,
effective since January 2018, several financial restatements were made regarding the 2017 fiscal year.
Furthermore, some data contained in the previous edition have been revised, corrected or modified forthis edition in order to take into account more recent currency exchange rates (see below).
Currency conversions were calculated using the annual average exchange rate (source: European
Central Bank) during each company’s fiscal year. However, order book values were converted using theexchange rates at the closing date of each company’s fiscal year. Average annual exchange rates used
for conversions are presented in the table below. It should be noted that all financial indicators wereconverted using the average exchange rate for their corresponding year. To avoid a bias when calculating
annual changes of monetary indicators, variations (as a percentage change) were calculated in the original
currency used in each company’s financial statement.

SOURCESFor publicly listed groups or those that publish annual statements of consolidated accounts, the following
sources were used:• Annual reports and reference documents• Consolidated balance sheets and profit & loss statements• Financial and investor presentations
For unlisted groups or those that do not publish annual statements of consolidated accounts, thefollowing sources were used:

•
•
•
•

Press releases
Company presentations
Data bases : Factiva, Diane
Business press and specialist publications

List of companies that do not publish, or only partially publish, financial statements:• Almaz-Antey• Iveco Defence Vehicles• ArianeGroup (formerly Airbus Safran• Lürssen
Launchers)• KMW + Nexter Defense Systems (KNDS)• Arquus (formerly Renault Trucks Defense)• MBDA• China Shipbuilding Industry Corporation (CSIC)• Polska Grupa Zbrojeniowa (PGZ)• Diehl Defence• Rohde & Schwarz• Elettronica• TechnicAtome (formerly Areva TA)• General Atomics• Thales Alenia Space (TAS)• Hensoldt• ThyssenKrupp Marine Systems (TKMS)
6OWNERSHIPThe “Ownership structure” section draws data from the following sources:• Company publications (websites, reference documents, investor presentations)• Brokerage firms and major trading platforms (Morningstar, EDGAR, NYSE Euronext, Nasdaq,
LSE, Borsa Italiana, Tokyo Stock Exchange, etc).

CHARTS
Charts represent the sales breakdown by business segment (i.e. branches or divisions as presented by
the company) and geographical region.

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS
The “Main programmes, cooperations and export partnerships” section presents the main programmes
highlighted by companies in their public media releases (excluding upstream study programmes).
Partnerships for each programme are also listed, without further details. These partnerships can takeseveral forms: co-contractorship, co-development or co-production agreements, subcontracting
agreements (for tier-1 equipment suppliers considered as “strategic partners”), marketing agreements,
joint ventures (JV), or partnerships with foreign companies as part of offset agreements.
Due to the very concise format of the notebook, this section cannot claim to be exhaustive.

EURO EXCHANGE RATES*COUNTRY

CURRENCY

Australia

Australian dollar

1 EURO =
2015

2016

2017

2018

1,478

1,488

1,473

1,580

China

Yuan

6,973

7,352

7,629

7,808

South Korea

Won

1 256,54

1 284,18

1 276,74

1 299,07

USA

U.S. dollar

1,110

1,107

1,130

1,181

India

Rupee**

71,19674,37273,53280,733Japan

Yen

134,31

120,20126,71

130,40

Norway

Krone

8,950

9,291

9,327

9,596

Poland

Zloty

4,184

4,363

4,257

4,262

United Kingdom

Pound sterling

0,726

0,819

0,877

0,885

RussiaRuble

68,072

74,14565,93874,042

Sweden

Krona

9,354

9,469

9,635

10,258

Switzerland

Swiss franc

1,068

1,090

1,112

1,155

*Exchange rates used for conversions were calculated as the annual average rate from January 1 to December 31 (source: European
Central Bank)**The Indian numbering system groups the rightmost three digits together and thereafter groups digits by sets of two. To facilitate thereading of large numbers, the Indian system uses “crore”. For instance, one crore rupee is equivalent to ten million (10,000,000) rupees.

7

AIRBUSKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017***

2018► Commercial and military aircraft► Commercial and military helicopters► Unmanned aircraft systems (UAS)► Commercial and military space (satellites,

Revenue

64 45066 58159 02263 707
7,94%

services)► Defence electronics► Cybersecurity
GOVERNANCE
Chairman
Chief Executive Officer
CEO Airbus Defence & Space

Denis RanqueGuillaume Faury
Dirk Hoke

∆ (%)

6,16%

3,31%

-11,35%

Defence (%)*

18%

17%

18%

17%

Export (%)**

69%

68%

73%

72%

Operatingprofit/loss

4 062

2 258

2 665

5 048

Operatingmargin (%)

6,30%

3,39%

4,52%

7,92%

Net
income****

2 696

995

2 361

3 054

Order book

1 005 864

1 060 447

996 822459 525

Employees

136 574

133 782

129 442133 671* Estimated.
**Based on revenue in European markets.
***2017 figures restated.
****Net income attributable to shareholders.

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolREVENUE BY BUSINESS LINE (%)
AIR

Listed on

NYSE Euronext

Market Cap (€m)

17

104 956

74

Major shareholders (as of 20.11.2019)9

SOGEPA (French State)

11,03%GZBV (German State)

11,02%

Capital Research & Management Co.
(World Investors)

7,06%

SEPI (Spanish State)

4,16%MAIN JOINT VENTURES AND ASSOCIATES

Airbus (formerly Airbus
Commercial Aircraft)

Airbus Defence & Space
Airbus Helicopters

REVENUE BY REGION (%)

Name

%

Country

MBDA

37,5%

FranceEurofighter Jagdflugzeug
GmbH

46%

Germany

ArianeGroup

50%

FranceATR

50%FranceNHIndustries

62,5%FranceAirTanker Holdings Ltd

40%

UnitedKingdom

37

28
17
6

10
2

EuropeAsia/Pacific	North America

8

Middle East
Latin America
Other

Military aircraft and Unmanned aircraft systems
A400M tactical and strategic
military transport aircraft
C295 and AC295 tactical transport aircraft
A330 Multi Role Tanker Transport (MRTT) aircraft
A320neo MPA (Maritime Patrol Aircraft)
Eurofighter Typhoon fighter aircraft
European MALE RPAS
VSR700 shipborne UAVNGWS fighter aircraft (FCAS programme)
Military helicopters
H125 single-engine helicopter (2t)
H135 and H145M twin-engine helicopters (3t)AS565 Mbe (4t) and H160M (6t)twin-engine multi-role helicopters
H215M (9t) and H225M (11t)twin-engine multi-role helicopters
NH90 twin-engine multi-role helicopter (11t)Tiger HAP / HAD attack helicopter (6t)Space
CSO optical earth observation satellite
CERES space-born military intelligence system
Syracuse 4 military communication satellite
Cybersecurity
Stormshield Data Security*Innovation Systems division, formerly Orbital ATK **Thales group

9

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AIRBUSAIRBUSSTRATEGIC HIGHLIGHTS
Business trends

 Airbus is a European aerospace corporation and one of the world's leading companies in the commercial aviationand defence sectors. Its activities are organised around 3 divisions: Airbus (commercial aircraft, formerly Airbus
Commercial Aircraft), Airbus Defence & Space (military aircraft, UAVs, space launchers and satellites), andAirbus Helicopters.

 The group's consolidated revenue reached €63.7bn in 2018, up nearly 8% year-on-year, thanks in particular toa record number of commercial aircraft deliveries (800 units, compared with 718 in 2017), but also deliveries of
Typhoon (Oman) and A400M Atlas (17 units) aircraft.

 The Airbus Defence & Space division's order book reached €35.3bn at the end of 2018, representing just over
3 years of revenue. Among the units to be produced are 58 Typhoon fighter aircraft and 100 A400M Atlastransport aircraft.

 Airbus Helicopters announced it would recruit 200 employees at its Marignane site in 2019, of which

100 dedicated to R&D, 60 to assembly lines and 40 to new technologies. The recruitment campaign follows aprevious initiative of 2018 for the creation of 200 new positions at the site, after years of declining workforce.

 Faced with cash flow problems, the Airbus Defence & Space division in late 2019 launched the Momentum
efficiency plan aimed at improving its long-term operational performance.

Home markets (Germany, Spain, France, United Kingdom) As announced in the French military programming law for the 2019-2025 period, France's defence procurement

agency (DGA) ordered three additional A330 MRTT multi-role tanker transport aircraft from Airbus as part of thethird and final tranche of a multi-year contract signed in 2014.

 Germany ordered 33 Typhoon fighter aircraft from the Eurofighter GmbH consortium to replace the Tranche 1

Typhoon aircraft delivered between 2003 and 2008. The value of the contract is estimated at €3.3bn. Part ofmanufacturing activities will be carried out in Augsburg, with final assembly to be handled in nearby Manching.

 In February 2019, the French and German Defence Ministers awarded Airbus and Dassault Aviation a €65m

contract (equally financed by France and Germany) for a Joint Concept Study to identify the technical needs
and assess the feasability of the future European NGWS fighter aircraft, as part of Future Combat Air System(FCAS) programme.

Export markets

 In late 2018, Qatar confirmed a contract to purchase 24 Typhoon fighter aircraft for a total value of nearly €7bn.
The contract also includes fleet support, delivery of spare equipment, as well as the training of Qatari pilots.

 In February 2019, PT Dirgantara Indonesia, Airbus Helicopters' partner in Indonesia, signed a contract with theIndonesian Ministry of Defence for the supply of eight H225M Caracal helicopters.

 The support services contract for 22 Australian Tiger attack helicopters was extended until 2025 for an estimatedamount of AUD$ 790m (approximately €490m). Airbus Helicopters will carry out operational maintenance of theaircraft and training of crews and technicians.

Technology and Innovation

 After several years of decline, Airbus' R&D spending rose again in 2018. R&D expenses reached €3.2bn,compared with €2.8bn in 2017, mainly as a result of the development of the A320 programme.

 In May 2019, Airbus Helicopters presented a full-scale model of the Guépard, a military variant of the H160
medium utility helicopter. This variant will be the next Joint Light Helicopter of France's HIL programme, which
will be launched in 2021 by the Ministry of the Armed Forces and includes a planned order for 169 helicopters.
The first units could be delivered in 2026.
10

ALMAZ-ANTEYKEY FIGURESBUSINESS AREAS
Platform manufacturer and systems integrator

 Air defence systems
 Ground control stations
 Military vehicles
 Radars

GOVERNANCE
Chairman
Chief Executive Officer

M.E. Fradkov
J.V. Novikov

OWNERSHIP STRUCTURE€ millions

2015

2016

2017

2018

Revenue

N/A

N/A

N/A

~8 400

∆ (%)

N/A

N/A

N/A

N/A

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

N/A

N/A

N/A

N/A
N/A

Operatingmargin (%)

N/A

N/A

N/A

Net income

N/A

N/A

N/A

N/A

Order book

N/A

N/A

N/A

N/A

Employees

N/A

N/A

N/A

~129 000REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap
Major shareholders (as of 20.11.2019)
Russian State

N/A

%
100%

MAIN JOINT VENTURES AND ASSOCIATES*
Name%

REVENUE BY REGION (%)
Country

N/A*No information available.

11Air defence systems
S-350 Vityaz short-to-mid range surface-to-air
defence missile system
S-400 Triumph long-range surface-to-air
defence missile system
S-500 Prometheus long-range surface-to-air
defence missile system
Tor-M2/M2E, Tor-M2K and Tor-M2DT short-range
surface-to-air defence missile systems
Buk-M3/M3E Viking medium-range surface-to-air
defence missile system
Pantsir medium-range surface-to-air
defence missile system
Ground control stations
Baikal, PPRU, Fundament, Universal and KTE
control systems
Military vehicles
Air defence ground-based platforms
RadarsLand and maritime monitoring radars
Struna-1/Barrier-E bistatic radar system*Agency for Defense Development (South Korea)**Russian Rostec conglomerate

12

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

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ALMAZ-ANTEYALMAZ-ANTEYSTRATEGIC HIGHLIGHTS
Business trends

 Almaz-Antey, Russia's leading defence contractor with a turnover of nearly $10bn (€8.4bn) in 2018 and around

129,000 employees, is a state-owned defence conglomerate founded in 2002 and comprising some sixty
companies (including missile producer Avangard and military vehicle manufacturer BAZ), enabling it to produce
all the equipment and systems (missiles, radars, land platforms) for its ground-to-air defence systems.

 Almaz-Antey mostly operates in the defence sector but is also involved in civil activities (less than 10% of its
turnover) and dual activities, an area of diversification that the group aims to pursue.

 To strengthen its industrial capacities, Almaz-Antey has built two new plants, in Kirov and Nizhny Novgorod,in particular to produce the new S-500 long-range surface-to-air anti-ballistic missile system. The investmentin these new facilities as well as an industrial site including an innovation centre in St Petersburg amounted toapproximately RUB 120bn (€1.5bn).

Home market

 A major supplier to the Russian Army, Almaz-Antey continues to supply S-400 long-range surface-to-air

defence missile systems, 56 units of which are due to be delivered by 2020 (two units still to be delivered). The
2018-2027 weapons programme also includes the Russian Army's acquisition of S-350 and S-500 short- to
medium-range air defence and anti-missile systems.

 In 2019, Almaz-Antey completed testing of the S-500 defence system, designed to counter ballistic missiles andstealth aircraft. The first units are expected to be delivered in 2020.

 In 2019, Almaz-Antey launched serial production of the S-350 short-range air defence and anti-missile system,

which is derived from the S-400 and had been in development for 10 years. Less expensive than the S-400 and
S-500, the S-350 is intended for the Russian Army (possible acquisition of 20 to 30 units) and for export markets.

 In September 2019, the Russian Ministry of Defence signed a contract worth around RUB 100bn (€1.4bn) with

Almaz-Antey for the acquisition of Tor-M2 and Tor-M2DT short-range air defence and surface-to-air missile
systems, to be delivered by 2027.

Export markets

 Almaz-Antey, Russia's leading arms exporter, generates about half of its defence turnover from exports. It has
more than 50 client countries, in particular in Asia, Latin America and the Middle East.

 China, the S-400's first export customer, in 2018 received the first systems ordered in 2014 for around $3bn(€2.3bn). Almaz-Antey also confirmed the delivery, between 2020 and 2023, of the five S-400 defence systems
ordered by India in October 2018 for $5.4bn (€4.6bn). Qatar also expressed interest in the S-400.

 In 2019, the group announced it was in negotiations with various foreign countries for the sale of the Buk-M3E
medium-range (export version of the Buk-M3) and Tor-M2E short-range (export version of the Tor-M2) air
defence and surface-to-air anti-missile systems.

 In the summer of 2019, Almaz-Antey delivered the S-400 defence systems ordered by Turkey in 2017 forapproximately $2.5bn (€2.2bn). Turkey expressed its interest in joint production, with Russia, of the S-500
defence system.

 In September 2019, the group signed a contract with Belarus for the maintenance and modernisation of the
S-300 and Tor-M2K defence systems.

Technology and Innovation

 In March 2019, Almaz-Antey unveiled a mini-UAV equipped with a Kalashnikov AK-47.

13

ARIANEGROUP (FORMERLY AIRBUS SAFRAN LAUNCHERS)KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator

 Commercial launch services(launchers and services) Ballistic missiles
 Propulsion systems
 Pyrotechnics (for launchers and satellites) Space instrumentation and equipment(optical, optronic, neutronic)
 Complex and secure infrastructures

GOVERNANCE
Chairman and CEO
Chief Operating Officer
Defence Programmes
Director

André-Hubert Roussel
David Quancard
Philippe ClarOWNERSHIP STRUCTURE€ millions

2015

2016*

2017

2018

Revenue

1 215

2 227

3 221

3 587
11,36%∆ (%)

N/A

83,29%

44,63%

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

-8

102

228

251

Operatingmargin (%)-0,66%

4,58%

7,08%

7,00%

Net income**

-8

98

266

237

Order book

N/A

N/A

N/A

N/A

Employees-~9 000~9 000~9 000*Changes in scope since 2016.
**Total comprehensive income.

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap

N/A

Major shareholders (as of 20.11.2019)
Airbus50%

Safran50%

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Arianespace

74%

Country
FranceNuclétudes

98,9%FranceCILAS

63%FrancePyroalliance90%

FranceSodern90%

FranceEuroCryospace

45%

FranceEuropropulsion

50%

FranceRegulus40%

FranceN/A

14

ARIANEGROUP (FORMERLY AIRBUS SAFRAN LAUNCHERS)

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Commercial launch services
Ariane 6 new-generation launcher (2020)
Ariane 5 launcher
Launch services (Ariane 5, Vega, Soyouz)
Ballistic missile
M51 missile
Propulsion systems
Vulcain 2 (Ariane 5) and Vulcain 2.1 (Ariane 6)
rocket engines
Vinci rocket engine (Ariane 5ME)
P120C rocket engine (Ariane 6, Vega-C)
Prometheus rocket engine project
Bipropellant thrusters(4N, 10N, 22N, 200N, 400N)
Chemical monopropellant hydrazine thrusters(1N, 20N, 400N)
Electric orbital propulsion systems(RIT 2X, RIT 10 EVO and RIT μX)
M10 release and separation nuts
(ME0032, ME0038)
Combustion chambers
Metallic container
Pyrotechnics (for launchers and satellites)
Vulcain Turbine pump starter
Vinci engine ignition system
Vega’s Zefiro-9 third-stageengine ignition system*OHB group15

ARIANEGROUP (FORMERLY AIRBUS SAFRAN LAUNCHERS)STRATEGIC HIGHLIGHTS
Business trends

 As part of the reorganisation of the European space launcher industry, Airbus Safran Launchers on July 1, 2017

became ArianeGroup, a joint venture owned in equal parts by Airbus and Safran. The group's seven subsidiaries
adopt the same graphic identity.

 ArianeGroup announced a turnover of €3.6bn in 2018 (+11% year-on-year) and around 9,000 employees basedin France (9 sites, including one in French Guiana) and Germany (4 sites).

 In 2018, Arianespace successfully launched 11 satellites (including one for France's defence procurement
agency) and put 21 satellites into orbit (including 4 Galileo satellites via the Ariane 5 launcher). From January to
September 2019, seven launches were made, including three with Ariane 5, and 17 satellites were put into orbit.

 As of January 1, 2019, André-Hubert Roussel, previously Chief Operating Officer of Airbus Defence & Space,became President of ArianeGroup in place of Alain Charmeau, who was the head of Airbus Safran Launchersand ArianeGroup since 2014.

 By 2022, ArianeGroup plans to cut 2,300 positions among its own workforce and subcontractors (without

resorting to layoffs). The group aims to improve its competitiveness in a context of a declining satellite launchmarket and strong competition, particularly from U.S.-based private space transportation company SpaceX.

Home market

 The group is involved in the renewal of France's defence satellite capacity. In December 2018, Arianespacelaunched the CSO-1 military observation satellite, the first of a constellation of three new-generation satellites(Optical Space Component, or CSO) ordered by the Ministry of the Armed Forces as part of the Multinational
Space-based Imaging System (MUSIS) programme led by the French defence procurement agency (DGA). The
National Centre for Space Studies (CNES) is in charge of leading the development of the CSO satellites, which
will be dedicated to reconnaissance and identification missions. The CSO-2 and CSO-3 satellites are scheduled
to be launched in 2020 and 2021.

 In January 2019, ArianeGroup announced the success of the second test firing for the P120C solid rocket engine
at the European Spaceport in Kourou, French Guiana. The engine, which was developed by Europropulsion, a
50:50 joint venture of ArianeGroup and Avio, will power the boosters of the Ariane 62 and Ariane 64 launchers
as well as the first stage of the Vega-C launcher.

 In May 2019, ArianeGoup and MT Aerospace signed 2 contracts with the European Space Agency (ESA) todesign and test the Prototype of a Highly OptimizEd Black Upper Stage (PHOEBUS). The project should pave
the way for the development of the new upper stage of Ariane 6 Evolution, called Icarus (Innovative Carbon
Ariane Upper Stage).

 At the same time, the group launched the production of the first series-production batch of 14 Ariane 6 launchers,

which are scheduled to fly between 2021 and 2023. A few months later, the European Space Agency (ESA),
ArianeGroup and Arianespace, adopted the detailed design review of the Ariane 6 launcher, whose inaugural
flight is scheduled for the second half of 2020. ESA is expected to finalise seven orders by the end of the year,
or failing that, to fund the revenues needed by the manufacturers.

Technology and Innovation

 In February 2019, ArianeGroup and CNES, joined by ONERA, launched the ArianeWorks acceleration platform toprepare the development of future launchers with the participation of start-ups, laboratories and manufacturers.

 In mid-2019, ArianeGroup entered into a partnership with German start-up PTScientists, with the aim ofoverseeing future collaborations on topics related to space transport, particularly towards the orbit and surfaceof the Moon. The two partners are already cooperating on the preliminary study of a lunar lander mission thatwould launch by 2025, which was awarded to them by the European Space Agency.
16

ARQUUS (FORMERLY RENAULT TRUCKS DEFENSE)

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator
Defence subsidiary of Volvo Group€ millions

2015

2016

2017

Revenue

~400

~410

~400

~500

 Wheeled armoured vehicles
 Tactical and logistics vehicles
 Propulsion systems for armoured vehicles
 Weapon systems

∆ (%)

5,26%

2,50%

-2,44%

25,00%

Defence (%)

100%

100%

100%

100%

Export (%)

~32%

N/A

N/A

N/A

Operatingprofit/loss

N/A

N/A

N/A

N/A

Operatingmargin (%)

N/A

N/A

N/A

N/A

Net income

N/A

N/A

N/A

N/A

(Remote control weapon system, RCWS) Maintenance and modernisation

GOVERNANCE
Chairman and CEO
Chief Financial Officer

Emmanuel Levacher
Christian Cusset

Order book

N/A

N/A

N/A

6 000

Employees~ 1 200~ 1 400~ 1 500~ 1 500*Pro forma figures.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed onMarket Cap

Unlisted subsidiary
66

Major shareholders (as of 20.11.2019)
Volvo Group Government Sales

34

100%

Platform development and Production
Services and MRO

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

SOFEMA

4%

FranceODAS

2%France

N/A

17

2018*

N

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

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ARQUUS (FORMERLY RENAULT TRUCKS DEFENSE)

Reconnaissance vehicles
4x4 VBL Mk2 light armoured vehicle
4x4 VBR light armoured vehicle
4x4 PVP light protected vehicle
4x4 Scarabée light armoured vehicle
4x4 Dagger autonomous light armoured vehicle
Armoured combat and transport vehicles
6x6 Jaguar reconnaissance and combat armoured vehicle(EBRC) and 6x6 Griffon multi-role armoured vehicle (VBMR)(Scorpion and CaMo programmes)
Maintenance for VAB armoured personnel vehicle
6x6 VAB Mk3 armoured vehicle
Higuard MRAP
(armoured vehicle resistant to improvised explosive devices)
Bastion (Fortress) armoured vehicle
8x8 VBCI armoured infantry fighting vehicle
Light tactical vehicles
4x4 VLRA, Sherpa Light and ALTV
VLTP NP light utility vehicle
Heavy tactical and logistics trucks
4x4 / 6x6 / 8x4 / 8x8 KERAX
4x4 / 6x6 Sherpa Medium
6x6 Armis
Special forces vehicles
Areg, Torpedo, Sabre, PATSAS special forces vehicles*KNDS group **ACOEM group18

ARQUUS (FORMERLY RENAULT TRUCKS DEFENSE)

STRATEGIC HIGHLIGHTS
Business trends

 A subsidiary of Sweden's Volvo group, Renault Trucks Defense (RTD) was renamed Arquus in May 2018. Thechange occurred after Volvo in late 2017 abandoned a project to sell its Government Sales division (which mainly
included RTD), as the takeover bids - valuing RTD at around €500m - were considered insufficient.

 Arquus' order intake reached €1.27bn in 2018, including €700m in firm orders. The order book stood at €6bn
at the end of the year.

 At the end of 2018, Arquus inaugurated a new €7m logistics centre in Fourchambault, central France. The
centre, named Hub Arquus, is designed to supply spare parts to partners involved in the Scorpion programme.

 In September 2019, Arquus sold its Saint-Germain-Laval site to Jogam, a precision engineering subcontractor
and one of Arquus' suppliers. The sale came as Arquus aims to streamline its operations by concentrating its
activities on a smaller number of industrial sites. The operation will not affect the overall size of the group due tothe simultaneous expansion of other sites, such as Fourchambault.

Home market

 Together with Nexter (KNDS) and Thales, Arquus is a member of the temporary consortium of companies
in charge of the French Army's Scorpion modernisation programme (which includes the delivery of
110 EBRC Jaguar and 780 VBMR Griffon by 2025). Unlike Nexter, however, Arquus is not, at this stage, involvedin the programme for the future French-German Main Ground Combat System (MGCS) tank, which also
involves Germany's KMW and Rheinmetall.

 The three service and logistics support contracts for armoured personnel carriers (VAB vehicles), tactical trucks

and vehicles developed and produced by Panhard, an Arquus subsidiary, were renewed for a period of 8 to 10
years.

 In September 2018, France's defence procurement agency (DGA) awarded Arquus a contract for 1,200 VLTP

NP (Unprotected Multipurpose Light Tactical Vehicles), known as VT4 (4x4 Tactical Vehicles), to replace the P4
off-road light vehicles. The order is part of a larger contract awarded by the DGA at the end of 2016. A total of
3,700 VT4 vehicles are expected to be delivered to the French Army by 2025, including 800 in 2019.

Export markets

 Arquus has customers in more than 65 countries. The group aims to increase its export order intake (whichamounted to approximately €580m in 2018) and raise the share of international sales to about half of its total
revenue.

 Countries in Africa and the Middle East are among Arquus' main target clients. The group won contracts with

Senegal in 2017 (13 PVP tanks and 9 Bastion tanks), Kuwait in 2018 (300 Sherpa tanks) and the Joint Force ofthe West African G5 Sahel in 2019 (84 tactical trucks).

 In June 2019, Arquus, Nexter and Thales were awarded a €1.6bn contract as part of the French-Belgian CaMo

(Motorised Capacity) programme to modernise Belgian land mobility capacities. The contract provides for the
supply of 442 armoured vehicles from 2025, including 60 Jaguar and 382 Griffon.

Technology and Innovation

 Arquus invests about 4% of its annual turnover (approximately €20m) in R&D. The company is in particular

working on the development of fully autonomous vehicles (e. g. the new version of the Dagger light-armoured
vehicle).

 After unveiling a prototype in June 2018, Arquus in June 2019 presented Scarabée, its new wheeled lightarmoured vehicle, at the Paris Air Show. The vehicle will be used for reconnaissance, support or engagement
assistance missions.
19ASC PTY LTD

KEY FIGURES (Fiscal year ended: June 30th)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2014-152015-16

2016-17

 Submarines Surface ships
 Maintenance Training

Revenue

717

525

561

497

∆ (%) [AUD]*

12,08%-22,18%1,29%-5,68%

Defence (%)

100%

100%

100%

100%

Export (%)

0%

0%

0%

0%

Operatingprofit/loss

20

23

27

27

Operatingmargin (%)

2,74%

4,32%

4,82%

5,46%

Net income

15

17

20

21

GOVERNANCE
Chairman
Chief Executive Officer
Chief Financial Officer

Bruce Carter
Stuart Whiley
Ashley Menadue

OWNERSHIP STRUCTURE

Order book

N/A

N/A

N/A

N/A

Employees~2 600~2 600~2 400~2 400*Variation based on revenue in local currency.
See €/AUD p.7.

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap

N/A

Major shareholders (as of 20.11.2019)
Australian State

100%

MAIN JOINT VENTURES AND ASSOCIATES*
Name%

REVENUE BY REGION (%)
Country100*No information available.

Oceania20

2017-18

ASC PTY LTD

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Submarines
Attack-class conventionally-powered
attack submarine (SSK)
Surface ships
Hobart-class Air Warfare Destroyer(AWD programme)***Hunter-class frigate(SEA 5000 programme)****
Arafura-class OPV(SEA 1180 programme)
MRO, training and support
Collins-class submarine
maintenance and training
Swedish Royal Navy's A26 Blekingeclass submarine services(engineering, design)*Civmec groupe**Merger of L3 Technologies and Harris Corporation***Based on F-100-class frigate (Spanish Navy)****Based on Type 26 frigate (Royal Navy)

21

ASC PTY LTD

STRATEGIC HIGHLIGHTS
Business trends

 ASC Pty Ltd, Australia's largest naval defence group, is a wholly state-owned shipbuilding company that

exclusively operates for the Australian State. A key player in the sector, ASC participates, in partnership withforeign groups, in the main Australian naval programmes: construction and maintenance of Collins-classconventionally-powered submarines, Hobart-class destroyers, Arafura-class offshore patrol vessels, andHunter-class frigates.

 ASC's turnover fell 5.7% to AUD$ 765m (€497m) during fiscal year 2017/2018. Nevertheless, operating income

continued to improve, reaching AUD$ 42m (€27m) for the year. Operating margin stood at 5.5%, comparedwith 2.7% three years earlier, mainly due to the reduction in the workforce at the Osborne site (Adelaide) andproductivity gains achieved on the Hobart-class air warfare destroyer (AWD) programme.

Home market

 A key player in the Australian naval sector, ASC is the major beneficiary of the Australian Navy's AUD$ 89bn(€60bn) modernisation programme launched in 2015 to upgrade its fleet.

 In August 2018, the Royal Australian Navy renewed its contract with ASC to train its naval forces in conventionally-

powered Collins-class submarines. The training will take place at the Submarine Training and Systems Centre of
the Stirling Naval Base located in Stirling, Western Australia.

 In November 2018, ASC signed an agreement with Sweden's Saab AB for the supply of engineering services

for the A26 Blekinge-class conventionally-powered submarines (SSK) ordered by the Swedish Royal Navy fromthe Saab Kockums subsidiary. Services will be provided at the Osborne site. If successful, the agreement could
be extended to other Saab AB programmes.

 At the end of 2018, ASC Shipbuilding officially became a subsidiary of BAE Systems for the duration of theconstruction of the nine Hunter-class anti-submarine warfare frigates (SEA 5000 programme, a contract
estimated at AUD$ 35bn, or about €24bn), for which the British group is the prime contractor. The Australian
government retains shares in the shipyard and will recover the entire capital at the end of the programme. The
frigates' construction is expected to begin in 2020, with commissioning scheduled a decade later.

 In February 2019, Naval Group signed a strategic partnership agreement with the Australian government to

supply 12 Attack-class conventionally-powered submarines (SEA 1000 programme), based on its Suffrenclass nuclear-powered submarines (SSN) programme (Barracuda programme) in its conventional variant. The
construction of the vessels will be carried out in Australia by ASC at the Osborne shipyard (Adelaide) as part ofa technology transfer agreement.

 In May 2019, the keel was laid at the Osborne shipyard for the first of the 12 new offshore patrol vessels orderedby the Royal Australian Navy (SEA 1180 programme, of which Luerssen Australia is the prime contractor and
ASC and Civmec are first-tier subcontractors). Named Arafura, it is scheduled to be delivered in 2021. ASC
is in charge of the construction of the first two units, while the following 10 will be built on the Civmec site inHenderson from 2020.

Technology and Innovation

 In September 2018, ASC and Defence Science and Technology (DST), an agency which is part of the Australian
Department of Defence, signed a new cooperation agreement dedicated to innovation in the submarine
segment. The partnership includes the areas of design, materials, and hydrodynamics, among others.

 During the Pacific 2019 naval show, ASC and French electric and mechanical engineering company JeumontElectric (partner of Naval Group to provide propulsion systems for Attack-class submarines), teamed up for thedevelopment of new submarine technologies.

22

ATOS

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
IT solutions supplier and systems integrator

 IT services and digital transformation consulting
 Big Data and HPC (High Performance
Computing) solutions
 Tactical communication systems
 Command, Control and Surveillance systems
 Electronic systems (navigation instruments,
defence electronics)
 Cybersecurity

GOVERNANCE
Chairman
Chief Executive Officer
Head of Big Data
& Security Division

Bertrand Meunier
Elie Girard
Pierre Barnabé

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolListed onMarket Cap (€m)€ millions

2015

2016*

2017*

2018

Revenue

10 686

12 138

11 996

12 258∆ (%)

18,06%

13,59%-1,17%

2,18%

Defence (%)

>10%

>10%

>10%

>10%

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

589

827

875

836

Operatingmargin (%)

5,51%

6,81%

7,29%

6,82%

Net income**

406

579

301

630

Order book19 11821 38522 70024 500

Employees***

91 322100 096

97 267122 110*2016 and 2017 figures restated.
**Net income attributable to shareholders.
***Including "indirect employees".

REVENUE BY BUSINESS LINE (%)

ATONYSE Euronext Paris
7 917

27
52

Major shareholders (as of 20.11.2019)
Siemens Aktiengesellschaft

11,40%

Fidelity Management & Research Co.

3,06%

The Vanguard Group, Inc.

2,44%

DWS Investments (UK) Ltd.

2,20%

Norges Bank Investment Management

2,16%

14
7

Infrastructure & Data 		
Management (IDM)
Business & Platform 		
Solutions (B&PS)	

Worldline*
Big Data& Cybersecurity (BDS)*Since May 2019 and the distribution in kind to shareholders of morethan 23% of Worldline's share capital (followed by a further sale ofassets in November 2019), which completed the spin-off of Atos into
two independent listed entities, Worldline is no longer a division of
the group.

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

Worldline

13%

FranceAtos Saudi LLC

49%

Saudi
Arabia

N/A

23

A
CE

Ca
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em

in

i

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Th
al
es
T-S Ale
ni
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a
te
m Spa
N
s
ce
ex
te
Ar r
qu
us

ATOS

Big Data and HPC (High Performance Computing) solutions
Artemis programme (second phase)
BullSequana supercomputers
Copernicus Data and Information Access Services (DIAS)(Copernicus programme)
Tactical communication systems
Hoox for Mission tactical 4G/LTE communication solution
for intervention forces
Auxylium tactical LTE communication solution
Command, Control and Surveillance systems
Bull Battle Management System(SCORPION Combat Information System)
CENTINELA checkpoint solution
VIGIA border monitoring
Electronic navigation equipment
LMN electromagnetic speed log*
Multi-fonction repeater for surface ships (MFR6, MFR12)and submarines (MFR6 WP)Defence electronics
ELINT/R-ESM systems family (ELIT, OSCAR, CARACAL)
COMINT/C-ESM systems family(FlashHawk)
Shadow jammers family (Raid Shadow, Black Shadow)
Cybersecurity
Data encryption solutions (Trustway, Trustway Chronos)*The LMN6, a new generation of electromagnetic speed log, has been chosen by the French Navy to equip its ships, such as
La Fayette-class frigates, Horizon-class frigates, surveillance frigates and mine-hunting vessels.

24

ATOS

STRATEGIC HIGHLIGHTS
Business trends Atos is a French information technology (IT) services company. The firm entered the defence market throughthe 2014 acquisition of computer and IT services company Bull, owner, among others, of the BEN Marine brand(LMN electromagnetic speed log measuring instruments, MFR repeaters, etc.) as well as of Avantix (formerly
Amesys, specialised in ELINT, COMINT, and jammer systems) and Evidian, a provider of security, identity, andaccess management solutions.

 Atos' revenue reached €12.3bn in 2018, up 2.2% year-on-year. The weight of defence activities in total revenue
remains below 10%.

 Following a failed attempt to acquire Gemalto (eventually purchased by Thales), Atos in October 2018 completed

the acquisition of U.S. digital services and data processing company Syntel for $3.4bn (€2.9bn). Syntel, which
had revenue of €924m (€815m) in 2017, of which nearly 90% in North America, is now part of the Business& Platform Solutions division.

 In May 2019, Atos implemented the distribution in kind of more than 23% of the share capital of Worldline, aprovider of payment services, to its own shareholders, completing the spin-off of the company which beganwith Worldline's initial public offering in 2014. Following the divestment, which marks Atos' exit from thepayment services market, the group reorganised its operations into 3 divisions, compared to 4 before.

Home market

 Atos is involved in the French Army's SCORPION programme. The Bull BMS system, launched in 2016, isamong the solutions integrated into the SCORPION Combat Information System (SICS) of the programme's
three new armoured vehicles: the Jaguar, the Griffon and the Serval.

 Atos' new generation of LMN6 electromagnetic speed logs (BEN Marine range) will be used on light stealthfrigates (FLF), Horizon-class frigates, surveillance frigates and mine-hunting vessels of the French Navy.

 In late 2018, the French Alternative Energies and Atomic Energy Commission (CEA) acquired a BullSequana
X1310 supercomputer (for an undisclosed amount), Atos' first supercomputer based on Arm technology. The
supercomputer is the result of the Mont-Blanc 3 project, funded by the European Commission.

 In May 2019, a partnership between Atos, Capgemini and CEA was selected to participate in the second phaseof the French defence procurement agency's (DGA) Artemis programme, which involves the supply of a Big
Data platform demonstrator.

Export markets

 Atos is a contractor of many international institutions, including NATO. Since the end of 2018, for example,
an agreement on regular exchanges of information on cybersecurity and potential cyber threats has linked theFrench company with NATO's communication and information agency, which is responsible for operating andprotecting the organisation's networks. These exchanges should enable both sides to improve their capacities interms of prevention, detection and response to threats.

 In October 2018, Airbus Cybersecurity, the cybersecurity division of Airbus Defence & Space, and Atos signed

a six-year framework contract (financial details were undisclosed) with the Council of the European Union to
implement a coordinated cybersecurity solution on the IT systems of 17 EU institutions, services and agencies.
Airbus Cybersecurity is the prime contractor for the programme, with Atos acting as second prime contractor.

Technology and Innovation

 Atos devotes an annual budget of approximately €300m to R&D, representing 2.5% of its revenue.
 Since April 2018, Atos and Google Cloud have been global partners in the field of artificial intelligence (AI). Threededicated AI laboratories have recently been inaugurated, including one in Bezons (northwest of Paris).
25

BABCOCK INTERNATIONAL

KEY FIGURES (Fiscal year ended: March 31st)

BUSINESS AREAS
Engineering support services company
and systems integrator€ millions

2015-16

2016-172017-18

Revenue*

5 681

5 407

5 277

5 073

 Engineering support services, production∆ (%) [£]**

4,05%

9,35%

2,47%

-3,97%

Defence (%)

46%

48%

47%

46%

Export (%)

21%

25%

32%

34%

Operatingprofit/loss*

482

428

420

223

Operatingmargin (%)*

8,48%

7,91%

7,95%

4,39%

Net income***

392

371

381

226

Order book

25 25322 19620 571

19 814

Employees

35 05035 75035 42735 289and integration of equipment (naval and land) Naval MRO, support and services
 Airbase and naval base supportand management Outsourcing contracts (training,
fleet management service)

GOVERNANCE
Chairwoman
Chief Executive Officer
CEO Marine

Ruth Cairnie
Archie BethelJohn Howie*Excluding JVs and associates.			
**Variation based on revenue in local currency.
See €/£ exchange rates p.7.
***Net income attributable to shareholders.

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolREVENUE BY BUSINESS LINE (%)*
BAB

Listed on

35

LSE

Market Cap (£m)

2018-19

2 754

38

Major shareholders (as of 20.11.2019)
Invesco Asset Management Ltd.

9,93%

Jupiter Asset Management Ltd.

5,38%

DWS Investment GmbH

5,06%

Polaris Capital Management LLC

5,01%

5

MarineLand

22

Aviation
Cavendish Nuclear*Excluding changes in scope (Marine and Cavendish Nuclear).

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

Holdfast Training Services
Ltd

74%

United Kingdom

Ascent Flight Training(Holdings) Ltd

50%

United Kingdom

AirTanker Services Ltd

22%

United Kingdom

ALC (Superholdco) Ltd

50%

United Kingdom

Naval Ship Management(Australia) Pty Ltd

50%

Australia

Duqm Naval Dockyard
SAOC

49%

Oman

15
66

26

8
4

4

3
United Kingdom
Europe (excl. UK)
AfricaAsia / Australia
North America
Rest of the World

Engineering and systems
Royal Navy's Queen Elizabeth-class aircraft carrier(HMWHS)*Royal Navy's Type 26 frigate (weapon systems)
Royal Navy's Type 31 future frigate(General Purpose Frigate programme)
Royal Navy's Fleet Solid Support Ship programme
Republic of Korea Navy's KSS-III Dosan Ahn Changho-classsubmarine (WHLS)**
MRO and support services
Royal Navy’s Type 23 frigates life extension programme(LIFEX)Royal Navy's Vanguard-class submarines
life extension programmeRoyal Australian Navy's ANZAC-class frigates
and Canberra-class LHD MRO
Royal Australian Navy's Collins-class submarines MRO
VISSC programme(Canadian Navy’s Victoria-class submarines MRO)HADES programme(Royal Air Force support services ; 20 sites)
Royal Air Force's Hawk trainer aircraft
integrated operational support
Naval base management
Maritime support delivery framework(HM Naval Base Devonport and HM Naval Base Clyde)
Outsourcing contracts
Phoenix II Project (fleet management service)
UK Military Flying Training System (MFTS) programme
FOMEDEC programme (French Air Force training)*Highly Mechanised Weapons Handling System**Weapon Handling and Launch System

27

Ro
l

BA
E

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSSy
stl s em
-R
s
o
Th
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Ca
m
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D Lai
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D
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AS lt A tin
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BM
T

BABCOCK INTERNATIONALBABCOCK INTERNATIONALSTRATEGIC HIGHLIGHTS
Business trends

 Babcock International is a British systems integrator and defence service provider (MRO, management ofcomplex sites, logistical support). The group is among BAE Systems' main defence partners.

 Excluding joint ventures and equity interests, Babcock's net sales fell 4% to £4.47bn (€5.07bn) in 2018-2019. More specifically, the group's two main divisions, Marine and Land (38% and 35% of group net sales,
respectively), reported declines in activity of 4.5% and 11.4% over the year. While Babcock's order book has
been slightly and continuously declining, business prospects remain overall positive thanks to the group's
various multi-year contracts for maintenance and training services.

 Babcock generates 46% of its turnover in defence, but the share varies significantly by division. Defence

activities for instance accounted for 85% of revenues in Babcock's Marine division, compared to 38% for Landand 35% for Aviation.

Home market

 The group generated a little less than two-thirds of its revenues in the United Kingdom, about 10 percentage
points less than in 2014, in line with the group's desire to strenghten its international positions.

 The group is a key partner of the United Kingdom Ministry of Defence (MoD). As part of the Maritime Support

Delivery Framework contract, signed in October 2014 and covering a period of five and a half years, Babcockis involved in 23 service and support projects at the Clyde and Devonport naval bases. The group is currently intalks with the MoD for a five-year extension of the contract until 2025.

 The LIFEX (Life Extension) programme for the modernisation of 13 Type 23 frigates of the Royal Navy, overseenby the Surface Ship Support Alliance (MoD, Babcock and BAE Systems), continued with the renovation of
5 vessels (Richmond, Lancaster, Portland, Somerset and Iron Duke). The end of the programme is set for 2024.

 In September 2019, the United Kingdom's MoD selected a Babcock-led consortium including Thales UK(supplier of the combat management system) and BMT (involved in ship development and maintenance) to
provide the future Type 31 frigates of the Royal Navy. The consortium was in competition with BAE Systems (inpartnership with Cammel Laird) and Atlas Elektronik UK (in partnership with its parent company TKMS).

Export markets

 The share of Babcock's international sales remained above 30%, in line with the target set by the group in
recent years.

 In December 2018, Naval Ship Management, a joint venture between Babcock and Australia's UGL, won a five-

year AUD 1.5bn (€951m) contract with the Royal Australian Navy for the maintenance of two Canberra-class
Amphibious Assault Ships and 12 associated landing crafts. The contract may be renewed for two five-year
periods.

 In the spring of 2019, Babcock delivered the last batch of Pilatus PC-21 turboprop-powered advanced trainer

aircraft as part of the French Air Force's FOMEDEC programme. The 11-year contract, signed in 2017 with
Babcock as lead contractor and Dassault Aviation as a partner, includes the delivery and maintenance of
17 Pilatus PC-21 training aircraft, related simulators and modernised training facilities.

 In April 2019, the Irish Naval Service formally commissioned LÉ George Bernard Shaw, the fourth and lastSamuel Beckett-class offshore patrol vessel that was designed by Vard Marine (Fincantieri) as prime contractor
and built by Babcock Marine at its Appledore shipyard as part of a €280m contract.

 In June 2019, Duqm Naval Dockyard (DND), a joint venture between Babcock and Oman Drydock Company
set up in 2017, finalised the repair and modernisation of the U.S. Navy's Choctaw County, a Spearhead-classexpeditionary fast transport vessel. DND, which specialises in the repair and maintenance of military ships in
Oman's Duqm port complex, is of strategic importance for Babcock's objective to win market share in the
Middle East.
28

BAE SYSTEMSKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017**

2018 Military aircraft (manned and unmanned aircraft) Naval platform and systems (surface ships

Revenue

23 12321 72219 640

19 007and submarines) Land platform and systems (armoured vehicles
and artillery systems)
 Defence electronics
 Cybersecurity

GOVERNANCE
Chairman
Chief Executive Officer
Managing Director, Air

Sir Roger Carr
C. Woodburn
C. Boardman

8,79%

5,97%

-3,18%-2,34%

92%

91%

92%

91%

Export (%)

77%

78%

80%

78%

Operatingprofit/loss

1 917

2 017

1 496

1 655

Operatingmargin

8,29%

9,29%

7,62%

8,71%

Net income***

1 264

1 115

943

1 130

Order book

50 13649 06543 63054 078

Employees

82 50083 10083 20085 800*Variation based on revenue in local currency.
See €/£ exchange rates p.7.
**2017 figures restated.
***Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)*

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolBA

Listed on

LSEMarket Cap (£m)

∆ (%) [£]*
Defence (%)

18 53123
33

17

Major shareholders (as of 20.11.2019)
Invesco Asset Management Ltd.

4,46%

Barclays Bank Plc (Private Banking)

3,97%

Silchester International Investors LLP

3,00%

Newton Investment Management Ltd.

2,81%

Air
Electronic Systems
Maritime

The Vanguard Group Inc.

2,80%

*Excluding Headquarter division.

MAIN JOINT VENTURES AND ASSOCIATES

10

17

Platforms & Services (US)Cyber & Intelligence

REVENUE BY REGION (%)

Name

%

Country

Eurofighter Jagdflugzeug
GmbH

33%

Germany

Panavia Aircraft GmbH42,5%Germany

MBDA

37,5%

France47
22

CTA International SAS

50%

FranceAdvanced Electronics
Company Ltd

44%

Saudi
Arabia

FADEC International LLC

50%

UnitedStates

<3

15
3

4 7

United Kingdom
United States and Canada
Saudi Arabia
Europe (excl. UK)

29

Middle East
(excl. Saudi Arabia)
Australia
Rest of the World

rb
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ABBAE SYSTEMS

Ai

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Military aircraft
Tempest fighter aircraft programme
Eurofighter Typhoon fighter aircraft
F-35 Lightning II fighter aircraft(Lockheed Martin's level 1 partner)
Hawk AJT trainer aircraft
Naval platform and systems
Hunter-class frigate(SEA 5000 programme)Type 26 frigate(Global Combat Ship programme)
Future CSC frigate(Canadian Surface Combatant)**
River-class Offshore Patrol Vessel
Queen Elizabeth-class aircraft carrier
Dreadnought-classballistic missile submarine
Astute-classnuclear-powered attack submarine
Land platform and systems
Armoured Multi-Purpose Vehicle(AMPV)
CV90 infantry fighting vehicle
M109A7 self-propelled howitzer
40mm Cased Telescoped Armament
System (40CTAS)***
Excalibur advanced precision guided
155mm and 127mm artillery shells
Cyber & Intelligence
GEOINT-ISR solutions*KNDS group **Based on Type 26 frigates ***CTA International, joint venture between BAE Systems and Nexter

30

BAE SYSTEMSSTRATEGIC HIGHLIGHTS
Business trends

 BAE Systems is a British platform manufacturer and systems integrator and the world's fourth-largest defence

contractor by revenue. The group is the leading arms supplier to the United Kingdom, Saudi Arabia and Australia,
and among the top 10 defence contractors to the U.S. Department of Defense. Its turnover reached £16.8bn(€19.0bn) in 2018, down 2.3% in 2018 in local currency, mainly due to a decline in production of Typhoon fighter
aircraft and Hawk trainer aircraft.

 BAE Systems aims to become the world leader in defence, aerospace and security within 5 to 10 years byfocusing on three areas: increasing its export revenues, strengthening its defence services offering, andrestructuring certain activities (particularly in the field of land-based platforms).

Home market

 BAE Systems generated 21.5% of its revenue in the United Kingdom in 2018, a share that has been decreasingover the past years (-1.2 percentage points compared to 2015).

 The group secured a £2.4bn (€2.7bn) contract to deliver the 7th Astute-class nuclear-powered attack submarine(SSN), named Agincourt, and to accelerate work on the first of four Dreadnought-class ballistic missile
submarines (SSBN).

 In January 2019, BAE Systems sold a 55% majority stake in its Land UK tank and combat vehicle division

to Germany's Rheinmetall for £29m (€33m) to create a joint venture called Rheinmetall BAE Systems Land(RBSL). The deal, limited to the British market, does not concern BAE Systems' ammunition activities, nor its
joint venture with Nexter (KNDS), CTA International, which produces the CTAS40 automatic cannon.

Export markets

 The group generated 78% of its revenue from exports, mainly to the United States and Saudi Arabia. BAE
Systems is increasingly dependent on the American market (47% of total revenue), a trend that is set tostrengthen in the coming years due to the growing share of the F-35 programme in its activity.

 In June 2018, BAE Systems was selected by the Royal Australian Navy for the SEA 5000 programme to build

9 Hunter-class anti-submarine warfare frigates (based on BAE System's Type 26 frigate) that will replace theAnzac-class frigates. In December 2018, BAE Systems signed a first contract for AUD$ 1.9bn (€1.2bn) for
studies relating to the design of future vessels, which will meet the specific needs of the Australian Navy. The
total cost of the programme is estimated at AUD$ 35bn (€22bn).

 In September 2018, BAE Systems finalised a £5.1bn (€5.8bn) contract to supply Qatar with 24 Typhoon fighter
aircraft and 9 Hawk trainer aircraft. The first fighter aircraft are scheduled for delivery in 2022.

 In February 2019, BAE Systems signed 2 contracts for a total of $575m (€506m) with the U.S. Army to start

production of the Armoured Multi-Purpose Vehicle (AMPV) in the United States. Options are provided for the
production of 460 vehicles, for a total cost of $1.2bn (€1.1bn).

 In February 2019, Canada selected Lockheed Martin, BAE Systems and four other partners for its Canadian
Surface Combatant (CSC) frigate programme, whose design will be based on that of the British Type 26 frigate.
The programme covers 15 frigates, for a total value of AUD$ 69.8bn (€46.4bn).

Technology and Innovation

 Self-financed R&D expenditure decreased 6.7% to £222m (€251m) in 2018.
 BAE Systems is part of the Team Tempest consortium, which is responsible for the future Tempest fighter
aircraft. The group is the prime contractor, with partners including the British Ministry of Defence, Rolls-Royce,
Leonardo UK and MBDA UK. The consortium has since been joined by the Swedish Ministry of Defence (inview of a possible participation of Saab AB) and several Italian players (Elettronica, Leonardo Italy, Avio Aeroand MBDA Italy), as part of a cooperation between the United Kingdom and Italy in the military aviation sector.
31

BOEINGKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator

 Commercial aircraft Military aircraft (combat, transport,

surveillance, unmanned aircraft systems)
 Defence electronics, cyber and C4ISR
 Missile defence and weapon systems
 Space

GOVERNANCE
Chief Executive Officer€ millions

2015

2016***

2017***

2018

Revenue

86 58984 45983 19085 6287,58%∆ (%) [$]*

5,90%

-2,72%

0,54%

Defence (%)**

25%

22%

22%

23%

Export (%)

59%

57%

54%

56%

Operatingprofit/loss

6 705

5 896

9 154

10 150Operatingmargin (%)

7,74%

6,98%

11,00%

11,85%Net income

4 663

4 547

7 485

8 857

D. A. Muilenburg

Order book449 310449 233

395 863428 368

L. Caret

Employees

161 400

150 500

140 800

153 000

CEO Boeing Defense, Space& Security
President of Embraer Partnershipand Group Operations*Variation based on revenue in local currency.
See €/$ exchange rates p.7.
**Defense, Space & Security division only.
***2016 and 2017 figures restated.

B.-M. AllenOWNERSHIP STRUCTURE (as of 20.11.2019)

REVENUE BY BUSINESS LINE (%)

SymbolBA

Listed on

NYSE

Market Cap ($m)

23

208 739

60

Major shareholders (as of 20.11.2019)
The Vanguard Group, Inc.

7,08%

T. Rowe Price Associates, Inc.
(Investment Management)

7,04%

Capital Research & Management Co.

6,98%

17
<1
Commercial Airplanes
Defense, Space & Security

Global Services
Boeing Capital

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATES

14

Name

%

Country

Hellfire Systems LLC

50%

United States

United Space Alliance

50%

United States

United Launch Alliance

50%

United States

Boeing Brasil-Commercial

80%

BrazilInitium Aerospace

50%

United States

Ural Boeing Manufacturing

50%

RussiaTata Boeing Aerospace
Limited

50%

India

Boeing Embraer-Defense

49%

N/A

14

32

44
13
3
11
United States
China
Asia/Pacific(excl. China)
Europe10Middle East
CanadaLatin America
Africa

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BOEING

KH

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Military aircraft
F/A-18E/F Super Hornet fighter aircraft
KC-46A Pegasus tanker aircraft
KC-390 transport aircraft
Maritime Surveillance Aircraft (MSA)
T-7A Red Hawk trainer aircraft***
Military helicopters
SB>1 DEFIANT twin-engine
multi-role helicopter
MH-139 twin-engine multi-role helicopter
CH-47 Chinook twin-engine
multi-role helicopter
V-22 Osprey multi-role tilrotor helicopter
AH-64 Apache
Advanced Attack Helicopter (AAH)
Unmanned systems
MQ-25 Stingray refueling UAS
Wave Glider USV
Echo Voyager UUVWeapon systems and guided missiles
Ground-Launched Small Diameter Bomb
(GLSDB)
Joint Direct Attack Munition (JDAM)
Space
CST-100 Starliner spacecraftSpace Launch System (SLS)*Kawasaki Heavy Industries group **Textron group ***T-X programme

33

BOEINGSTRATEGIC HIGHLIGHTS
Business trends Boeing is the world's second-largest defence company, behind Lockheed Martin, and the world's largest

commercial aircraft manufacturer by volume. In defence, the group is present in several segments: militaryhelicopters, military aircraft, UAS and USV/UUVs, missiles and guided munitions, space launchers, etc. Boeing's
revenue for the first time exceeded the $100bn threshold ($101.1bn, or €85.6bn) in 2018, a 7.6% year-on-yearincrease in local currency. The Defense, Space & Security division, which accounted for 22.9% of the group's
total revenue, posted strong growth (+12.8% year-on-year), mainly driven by export sales.

 Despite an improving financial performance in recent years, the group has been facing several difficulties,

including delivery delays and quality issues on the KC-46 Pegasus tanker aircraft programme in the military
sector, as well as various accidents involving 737 MAX aircraft, one of Boeing's bestselling aircraft in thecivil sector, which led to the grounding of the planes by airlines and a 20% drop in the group's production ofthese aircraft. In July 2019, Boeing consequently announced an exceptional provision of $5.6bn (€5bn) for thecompensation of 737 MAX customers.

 A few months after the acquisition of U.S. aircraft equipment manufacturer KLX for $4.3bn (€3.6bn), Boeing

acquired 80% of the commercial aviation division of Brazilian aircraft manufacturer Embraer and founded Boeing
Brasil Commercial, a joint venture that merges Embraer's commercial aviation division with Boeing's Brazilian
operations. The $4.2bn (€3.7bn) transaction has been approved by U.S. antitrust authorities but remains subject
to approval from the European Commission. Embraer and Boeing are also planning to set up a second joint
venture called Boeing Embraer-Defense (in which Embraer will hold a 51% capital stake and Boeing 49%) aimed
at promoting the KC-390 military cargo jet.

Home market

 Boeing generated 44% of its revenue in the United States in 2018. The weight of the U.S. market in the group's
total revenue has been declining over the past decade (-17 percentage points), while the contribution of China,
the group's second-largest market (mainly commercial activities) has been rising. In defence, however, the U.S.
market remains dominant.

 In late 2018, the group won two major U.S. Air Force tenders in a row. The first, worth $2.4bn (€2.1bn), with

Italy's Leonardo as a partner, provides for the supply of 84 MH-139 helicopters. The second, a $9.2bn (€7.9bn)
contract won in partnership with Saab AB, provides for the delivery of 351 T-7A Red Hawk (T-X programme)
trainer aircraft and 46 simulators.

 In March 2019, Boeing was awarded a contract valued at $4bn (€3.5bn) to upgrade 78 F/A-18 Super Hornet
Block II fighter aircraft to the Block III standard.

 After the delivery of the first KC-46 Pegasus tanker aircraft, the U.S. Air Force awarded Boeing a $2.6bn (€2.4bn)

contract for a 5th production batch (15 additional aircraft). With this batch, the number of such aircraft ordered by
the United States since August 2016 increases to 67.

Export markets

 56% of Boeing's revenue was generated abroad, but a large part of it by the Commercial Airplanes division.
 Japan ordered a second KC-46A Pegasus tanker aircraft. Produced in Seattle, the aircraft is scheduled fordelivery in June 2021 and will be used to refuel the entire Japanese Air Self-Defense Force.

 Boeing and Israel Aerospace Industries (IAI) entered into a strategic partnership for future cooperation in the fieldof civil and military aviation, in Israel and internationally. The agreement comes as Israel is expected to announce
a $11bn (€9.3bn) purchase programme for U.S. military equipment.

Technology and Innovation

 The group's R&D expenditure amounted to $3.3bn (€2.8bn) in 2018, up to 2.8% over the year.
34

CHINA SHIPBUILDING INDUSTRY CORPORATION (CSIC)KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer

 Commercial shipbuilding (cargo vessels,
oil tankers, container carriers)

 Military shipbuilding (surface ships, submarines(SSN, SSBN, SSK), naval drones)
 Naval ammunition
 Energy and electromechanical equipment

GOVERNANCE
Chief Executive Officer
Executive Director

Wu YongjieFeng Yongqiang€ millions

2015

2016

2017

2018

Revenue

32 45738 08539 36239 067∆ (%) [CNY]*

12,22%

23,72%

7,25%

1,58%

Defence (%)

N/A

N/A

N/A

~20%

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

N/A

N/A

N/A

N/A

Operatingmargin (%)

N/A

N/A

N/A

N/A

Net income

1 513

751

870

1 134

Order book

N/A

N/A

N/A

N/A

Employees

N/A

N/A

N/A

>150 000*Variation based on revenue in local currency.
See €/CNY exchange rates p.7.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed onMarket Cap

Unlisted group
N/A

Major shareholders (as of 20.11.2019)
Chinese State100%

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATES*
Name%Country

N/A*No information available.

35

CS

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

SC
*
Bo
us
te
ad
Kh
N
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av
na
Sh al S
N
av
hi
ip
py
ya
al
rd
a
S
KS hi pL t rddyar&
EW d L* * tdCHINA SHIPBUILDING INDUSTRY CORPORATION (CSIC)

Surface ships
Type 001A aircraft carrier
Type 002 aircraft carrier
Type 003 future nuclear powered aircraft carrier
Type 051 and 055 destroyers
Type 056 corvette
Durjoy-class Large Patrol Craft (LPC)
Padura-class OPV
Royal Malaysian Navy's Littoral Mission Ship (LMS)Type 905 replenishment tanker
072II/A amphibious landing ship
Submarines
Type 092 and 94 ballistic missile submarines (SSBN)
and Type 096 future ballistic missile submarine
Type 091, 093 and 095 nuclear-powered attack submarines(SSN)
Type 035/035G conventionally-powered submarine (SSK)Type 039 and 041 conventionally-powered submarines (SSK)Type S20 conventionally-powered submarine (SSK)***
Type S26T conventionally-powered submarine (SSK)****
Unmanned surface vessels
JARI multi-purpose unmanned combat vessel
Marine Lizard autonomous amphibious vehicle
Naval weapons
Torpedoes*China State Shipbuilding Corporation **Karachi Shipyard & Engineering Works Ltd ***Based on Type 039A ****Based on Type 041

36CHINA SHIPBUILDING INDUSTRY CORPORATION (CSIC)STRATEGIC HIGHLIGHTS
Business trends

 China Shipbuilding Industry Corporation (CSIC) is China's largest shipbuilding company, the leading supplierto the Chinese Navy, the prime contractor for Chinese SSBNs and the first Chinese-made aircraft carrier. The
group generated sales of CNY 305bn (€39bn) in 2018, of which about 20% in the defence sector.

 CSIC comprises around 100 industrial entities and research centres and has more than 150,000 employees. Its
subsidiaries Dalian Shipbuilding Industry Company and Wuchang Shipbuilding Industry Group build and upgrade
the group's main surface vessels.

 In a context of strong consolidation in the shipbuilding industry (a strategic sector of the Made in China 2025
industrial plan), for instance with the merger of South Korean shipbuilding companies Hyundai Heavy Industries(HHI) and Daewoo Shipbuilding & Marine Engineering (DSME), a merger project was announced in July
2019 between the two leading Chinese shipbuilding companies CSIC and CSSC (China State Shipbuilding
Corporation, the world's second-largest civil shipbuilding company after HHI). The two Chinese groups will havea combined turnover of €66bn and concentrate 13% of the global shipbuilding market (including civil).

Home market

 The first fully Chinese-made aircraft carrier (type 001A) was launched in 2017 in CSIC's shipyards and is

expected to be fully operational in 2020. The commissioning of the second-generation aircraft carrier (type 002)
is planned for 2023. In 2018, CSIC also announced the beginning of the construction of China's first nuclearpowered aircraft carrier. This aircraft carrier (type 003) should not be put into service before 2025.

 The group completed the commissioning of two type 094 ballistic missile submarines (or SSBN), of which four

units have already been produced. It plans to launch production of a new type of SSBN (096) in the early 2020s.
This new type could be armed with Chinese JL-3 ballistic missiles.

 In alternation with CSSC, CSIC is responsible for the construction of the new 055 destroyers designed to escort
Chinese aircraft carriers (the first unit was commissioned in 2019).

Export markets

 In the military sector, CSIC exports to some 15 countries (mainly in Asia, Africa and Latin America) through its
subsidiary China Shipbuilding and Offshore International Company (CSOC).

 In 2016, Pakistan became the first importing country of a Chinese-made submarine after ordering eight

Type S20 conventionally-powered submarines (SSK) (a variant of Type 039A), of which the first four will bebuilt by CSIC and delivered by 2022. The remaining four units will be produced locally by Pakistan's Karachi
Shipbuilding and Engineering Works (KSEW). CSIC will also supply a Type S26T conventionally-powered
submarine (SSK) (a variant of Type 041) to the Royal Thai Navy as part of a $390m (€345m) order placed in 2017.
Two additional units may be ordered at a later date.

 In January 2018, the group delivered two Durjoy-class LPC (Large Patrol Aircraft) to strengthen Bangladesh's

anti-submarine warfare capabilities. The two ships were produced in partnership with CSSC and Bangladeshi
shipyard Khulna Shipyard Ltd. In April 2019, the Bangladeshi Navy also received the last two Type 056 corvettes
out of four units ordered in total.

 In 2019, CSIC launched the two Keris-type LMS (Littoral Mission Ship) frigates ordered by Malaysia in 2017
for MYR 1.05bn (€216m). The Malaysian shipyard Boustead Naval Shipyard, a partner in the programme, wasinitially set to produce two additional frigates, but the contract was revised downwards.

Technology and Innovation

 The group's R&D expenditure amounted to CNY 23.6bn (€3bn) in 2018, representing 7.7% of revenue.
 In late 2018, CSIC presented the JARI unmanned combat vessel capable of firing four missiles at a maximum
range of 5 km.

37

COBHAMKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier Aeronautics (refuelling systems,

communication systems, services)

 Defence electronics and sensors
 Solutions for communication
 Robotics

GOVERNANCE
Chairman
Chief Executive Officer
VP Programmes
and Engineering

Jamie Pike
David Lockwood
Tim Harrington

OWNERSHIP STRUCTURE (as of 20.11.2019)
Symbol€ millions

2015

2016

2017**

2018

Revenue

2 854

2 374

2 385

2 105
-10,92%∆ (%) [£]*

11,90%-6,18%

7,60%

Defence (%)

62%

59%

60%

64%

Export (%)

89%

90%

91%

92%

Operatingprofit/loss

17

-951

122

126

Operatingmargin (%)

0,58%-40,08%

5,11%

6,01%

Net income***

-52

-971

96

83

Order book

3 374

3 442

2 928

2 984

Employees

11 505

10 69210 81310 069*Variation based on revenue in local currency.
See €/£ exchange rates p.7.
**2017 figures restated.
***Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)
COB

Listed on29

LSE

Market Cap (£m)

3 828
32

Major shareholders (as of 20.11.2019)
Silchester International Investors

10,60%

Threadneedle Asset Management Ltd.

9,88%

1832 Asset Management LP

3,11%

M&G Investment Management Ltd.

2,82%

Invesco Asset Management Ltd.

2,80%

22
17

Advanced Electronic
Solutions
Communications& Connectivity

Mission Systems
Aviation Services

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

Aviation Défense
Service S.A.

45%

FranceNorthrop Grumman
Cobham Intercoms LLC

50%

United States

Philtec Co. Ltd

30%

South Korea

53

8

AirTanker Services Ltd

5%

United Kingdom

AirTanker Holding Ltd

13%

United Kingdom

48

United Kingdom
United States
Europe (excl. UK)

38

11

16

Australia
Asia
Rest of the World

br
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COBHAMEm

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Avionics equipment
Eletronic warfare suites
Navigation systems
Tactical communication and surveillancesystems
Aircraft audio and radio management
systems
JetLAN advanced airborne computers
ELT VHF/UHF antennas, navigation
SATCOM terminals
Oxygen systems
Defence systems
Countermeasures systems
RF and microwave modules
Sensor solutions: RWR , antennas, radar,
missile, navigationSPS Series Precision Positioners
Transmitters and receivers
for electronic warfare
AESA antennas and radar subsystems
Mission systems
Weapons carriage and release equipment,
pylonsRefuelling systems (pods, aircrafts fuel tanks,hose and drogue systems)
Aviation services (MRO, modification, flightinspection services, training)
Robotics(Telemax, tEODor, OSCAR, NBCmax)* Formerly Rockwell Collins, UTC group

39

COBHAMSTRATEGIC HIGHLIGHTS
Business trends

 Cobham is a British systems and equipment manufacturer operating in the civil and military fields. In defence,

the group operates in the land, naval and air segments and mainly provides defence electronics systems(countermeasures, electronic surveillance), security systems (oxygen systems), mission systems (refuelling,missile eject launchers), avionics systems and communications systems. The group is also a major player in pilot
training and also operates in the space sector.

 During 2018, Cobham recorded a decline in revenue of nearly 11% to £1,863m (€2,105m), mainly due todeclining activity in the Communications & Connectivity (-21.2%) and Aviation Services (-14.0%) divisions. At
constant scope and exchange rates, revenue declined slightly less sharply (-2.0%).

 The group's operating performance nevertheless improved in 2018. Operating margin reached 6% for the year,

compared to 5.1% in 2017. However, it could decline again in 2019 due to the compensation that the groupmust pay to Boeing for delays in the delivery of in-flight refuelling systems for KC-46A Pegasus aircraft (up to£160m, or €183m).

 In September 2019, Cobham's shareholders, mainly investment funds, approved the acquisition of the entire
group by U.S. private equity fund Advent International. Advent's offer values the British group at £4bn (€4.5bn).

Home market

 The United Kingdom is the group's third-largest market after the U.S. and Australia. Cobham generated 7.7%of its revenue in the UK in 2018, compared with 12.3% four years earlier, a decline that was mainly due to thecompletion of the training contract with the UK Defence Helicopter Flying School (DHFS) in March 2018.

 Cobham signed a contract worth more than £50m (€57m) in February 2019 for the supply of electronic warfare

training modules (radar jamming, communications jamming, threat simulation, etc.) as part of the NATO JEWCS(Joint Electronic Warfare Core Staff) programme. The programme is under the responsibility of the British
Ministry of Defence (MoD).

 The MoD's future ASDOT (Air Support to Defence Operational Training) project, for which Cobham Aviation

Services was competing (in partnership with Draken International, QinetiQ and 3SDL), was postponed due tothe excessive costs of the bids submitted by the four competing groups respectively led by Cobham Aviation
Services, Babcock Aerospace, Thales UK and Leonardo. The budget provided by the British Ministry of Defence
was £1.25bn (€1.4bn). The programme, the first phase of which was to start in 2020, had an initial duration of
10 years, with an option for a five-year extension.

Export markets

 Cobham is highly dependent on the U.S. market, which accounts for more than 50% of its turnover. The groupsupplies many systems and components for Lockheed Martin's F-35 Lightning II fighter aircraft as well as
Boeing's KC-46A Pegasus tanker aircraft.

 In May 2019, Boeing selected Cobham to supply the oxygen system for the future U.S. Air Force T-7A Red Hawk
(T-X programme) trainer aircraft, developed by the American company in partnership with Saab AB.

 In June 2019, Israel's Rafael Advanced Defence Systems and Cobham teamed up to offer Rafael's I-Derby
missiles with the British company's Fox-10 launchers.

Technology and Innovation

 Cobham's R&D expenditure fell by 15.3% to £103m (€117m) in 2018, representing 5.5% of the group's revenue.

40

DASSAULT AVIATIONKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017*

2018

 Executive jets
 Fighter aircraft Unmanned aircraft systems
 Maritime patrol aircraft Pyrotechnics and space activities Artificial intelligence (AI)Revenue

4 176

3 586

4 876

5 084

GOVERNANCE
Chairman and CEO
Chief Financial Officer
Executive Vice President,
Military and Space Programmes

Éric TrappierDenis Dassé
J-M. Gasparini∆ (%)

13,48%-14,13%35,97%

4,27%

Defence (%)

40%

35%

39%

49%

Export (%)

83%

83%

89%

78%

Operatingprofit/loss

361

218

357

669

Operatingmargin (%)

8,64%

6,08%

7,32%

13,16%Net income**

482

384

410

681

Order book

14 17520 32319 46019 376

Employees

12 177

11 942

11 398

11 494*2017 figures restated.
**Net income attributable to shareholders.

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolREVENUE BY BUSINESS LINE (%)
AM

Listed on

NYSE Euronext

Market Cap (€m)

10 402
51

Major shareholders (as of 20.11.2019)
GIMD (Dassault Family)

62,20%

Airbus9,89%

T. Rowe Price International Ltd.

2,10%

DNCA Finance SA

1,84%

MAIN JOINT VENTURES AND ASSOCIATES

Falcon49

Defence

REVENUE BY REGION (%)

Name

%

Thales25%

Country
FranceSECBAT

54%

FranceGIE Rafale International

60%

FranceDassault Reliance
Aerospace Ltd

49%

India

22

France41

78

Export markets

DASSAULT AVIATION

Th
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Sa
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L3 Gro
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H
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*
RU
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H
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Sa we
ab ll
AB

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSFighter aircraft
Rafale (F4 standard)Mirage 2000
NGWS
Maritime patrol and reconnaissance aircraft
Future maritime and patrol reconnaissanceaircraft (ALBATROS programme,
formerly AVSIMAR)*
Falcon 2000 MRA/MSA
ATL2 modernisation
Falcon 900 MPA
Falcon 8X military aircraft(ARCHANGE programme)
Unmanned aircraft systems
nEUROn UCAV demonstrator
European MALE RPAS
Artificial Intelligence
Man Machine Teaming
advanced study programme*Based on Falcon 2000 LXS.
**Merger of L3 Technologies and Harris Corporation.

42

DASSAULT AVIATIONSTRATEGIC HIGHLIGHTS
Business trends

 Dassault Aviation is a French aerospace and defence company and one of the world's leading manufacturers ofcivil (Falcon business jets) and military (Rafale fighter jets, patrol and surveillance) aicraft. The group's turnoverreached a record €5.08bn in 2018 (+4.3% year-on-year). The Defence division was the group's main growth
driver (+32.5%), thanks in particular to the delivery of nine Rafale fighter jets to Egypt and three to France during
the year. The group plans to deliver 26 Rafale in 2019.

 The group's order book slightly decreased in 2018 (€19.4bn compared with €19.5bn the year before). The
decrease, attributable to the Falcon branch, was mainly caused by the discontinuation of the Falcon 5X
programme, which was terminated following development delays on Safran's Silvercrest engine, and moregenerally to a slowing business jet market.

 In early 2019, Dassault Aviation consecutively acquired the worldwide maintenance operations of ExecuJet,a subsidiary of Luxembourg-based Luxaviation (Europe's leading business aviation operator), and TAG
Maintenance Services, a subsidiary of TAG Aviation that specialises in business aircraft maintenance. At thesame time, the group sold SABCA, a Belgian aerospace manufacturing company which operates in the civil
aviation, space and defence sectors.

Home market

 In January 2019, Dassault Aviation signed a €2bn contract to develop the Rafale F4 standard, which includes

improving aircraft capabilities and integrating new weapons. Validation of the F4 standard is planned for 2024,with some functions available from 2022. At the same time, 30 F4 standard Rafale aircraft were ordered by the
Ministry of the Armed Forces, to be delivered between 2027 and 2030.

 The French defence procurement agency (DGA) has entrusted Dassault Aviation with the detailed definition

study for the future maritime and patrol reconnaissance aircraft (AVISMAR programme) of the French Navy.
The aircraft, whose design will be based on the Falcon 2000 LXS, will replace the Falcon 50 M and Falcon 200
Gardian currently in service. A total of 13 aircraft could be ordered and delivered by 2030, including three in 2025.

 In February 2019, the French and German Defence Ministers awarded Dassault Aviation and Airbus a €65m

contract (equally financed by France and Germany) for a Joint Concept Study to identify the technical needs
and assess the feasability of the future European NGWS fighter aircraft, as part of Future Combat Air System(FCAS) programme.

Export markets

 Dassault Aviation generates a large part of its revenue from exports (78% in 2018, compared to 89% in 2017).
In defence, the share of export sales reached 57% in 2018.

 The group delivered the first Rafale to the Qatari Air Force (QEAF) in February 2019. Following the option
exercised for 12 additional Rafale aircraft (in addition to the 24 initially planned), 35 aircraft have yet to be deliveredby Dassault Aviation in the coming years.

 In October 2019, India received the first of the 36 Rafale fighter jets ordered at the end of 2016. Dassault Aviationis also participating in tenders for the Indian Air Force (110 fighter aircraft) and the Indian Navy (57 naval fighter
aircraft).

 Dassault Aviation aims to take advantage of the renewal of fighter aircraft fleets across Europe to increase Rafale
exports in the European market. After failing to win Belgium's F-16 fleet replacement programme, awarded to
Lockheed Martin's F-35, the French group offered the Rafale in Switzerland (in a contract for the supply of some
30 aircraft) and Finland (planned purchase of 64 aircraft).

Technology and Innovation

 The group's self-financed R&D expenditure amounted to €391m in 2018, representing 7.7% of its revenue.
43

DIEHL DEFENCEKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier€ millions

2015

2016

2017

Defence division of German conglomerate Diehl

Revenue

405

435

456

464

 Missile systems and air defence systems
 Ammunition
 Surveillance and reconnaissance systems
 Transmission systems, support services∆ (%)-17,01%

7,41%

4,83%

1,75%

Defence (%)

100%

100%

100%

100%

Export (%)

28%

31%

46%

42%

Operatingprofit/loss

N/A

N/A

N/A

N/A

Operatingmargin (%)

N/A

N/A

N/A

N/A

Net income

N/A

N/A

N/A

N/A

Order book

N/A

N/A

N/A

N/A

Employees

2 315

2 301

2 341

2 509

and training

GOVERNANCE
President Corporate Division
Executive Director
Chief Executive Officer

Claus Günther
T. Bodenmüller
Helmut Rauch

2018

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed on

Unlisted divisionMarket Cap
N/A

Major shareholders (as of 20.11.2019)
Diehl group

100%

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATES*
Name%CountryEurospike GmbH40%

Germany

Junghans Microtec GmbH

55%

Germany

GIWS

50%

Germany

Parsys GmbH50%

Germany

RAM-SYSTEM GmbH50%

Germany

58

Germany*JVs and associates of Diehl group.

44

42

Export markets

Ra
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El
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Bo
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ES
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DIEHL DEFENCE

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Missile systems
and air defence systems
Sidewinder air-to-air
missileIRIS-T and IRIS-T SL/SLM
missilesIDAS missile
RBS15 Mk3 anti-ship missile
RAM Block 2 and RAM Mk49
guided missiles
PARS 3 LR anti-tank missile
Spike LR anti-tank missile
HUSSAR air-to-ground missile
NGWS weapon systems(FCAS programme)
Falcon air defence system
Ammunition
40mm infantry ammunition
76mm and 127mm
naval ammunition
VULCANO
guided ammunition family
GBU-54 Laser JDAM
weapon system
Surveillanceand protection systems
SIMONE
infrared monitoring system
J-MUSIC DIRCM system
integration (Luftwaffe´s
A400M military aircraft)*ThyssenKrupp Marine Systems, ThyssenKrupp group45

DIEHL DEFENCESTRATEGIC HIGHLIGHTS
Business trends

 Diehl Defence, the defence division of German conglomerate Diehl (€3.7bn of turnover and 17,298 employees
in 2018) is one of the leading European players in the missiles market. Diehl Defence accounted for 12.6% ofDiehl's total revenues and 14.5% of the group's workforce in 2018.

 Diehl Defence net revenues reached €464m in 2018, increasing for the third consecutive year (+1.8%). Growth
was mainly supported by missile sales (RAM Block 2, Sidewinder, Spike, PARS 3 LR missile systems).

 Diehl Defence is involved in many key programmes. Among others, it has partnered with Sweden's Saab AB

for the production of the RBS15 Mk3 anti-ship missile, with Israel's Rafael for the production of the Spike antitank guided missile, and with Italy's Leonardo for the production of the Vulcano precision guided munition. The
division has also set up an alliance with Lockheed Martin and Saab AB to develop the Falcon short- and mediumrange air defence system (which includes Diehl Defence's IRIS-T SLM medium-range air-to-air missile), andwith Safran for the development of the HUSSAR ultra-lightweight air-to-ground missile.

 In June 2019, Diehl Defence also partnered with Roxel France (Safran/MBDA JV), in the field of artillery rockets.
Home market

 A key supplier to the Bundeswehr, Diehl Defence expects to benefit from Germany's growing military spending
to strengthen its position on its home market, where it generated 58% of its revenues in 2018.

 Diehl Defence won several contracts with the German Navy in 2018, including through a €79.5m contract to

the RAMSYS consortium (a collaboration between Diehl Defence and MBDA) for the delivery of ten Rolling
Airframe Missile (RAM) launching systems that will be installed and integrated on five new K130 Braunschweigclass corvettes, as well as a €17m contract (in collaboration with Saab AB) for the supply of RBS15 Mk3 anti-ship
missile systems for the same corvettes.

 In June 2019, Diehl Defence won a contract to integrate Israelian defence company Elbit System's J-MUSIC
Directed Infrared Counter Measure (DIRCM) systems on the German Air Forces' Airbus A400M aircraft.

 Germany's Armed Forces are considering purchasing VULCANO 155 mm ammunition jointly developed by
Diehl Defence and Italy's Leonardo.

 Diehl Defence will contribute to the development and production of Europe's future fighter aircraft as part of the

Next-Generation Weapon System (NGWS) programme. Together with MBDA, the company will in particular
work on the new aircraft's weapon system. As part of its contribution to the NGWS programme, Diehl Defence
has joined forces with Hensoldt, ESG and Rohde & Schwarz within the German consortium FCMS.

Export markets

 After having driven much the company's growth in 2016-2017, export sales markedly declined in 2018 (-5.8%),

settling at less than €200m. Diehl Defence was largely affected by restrictions imposed by Germany's federal
government on arms exports, in particular to the Middle East.

 In March 2019, Raytheon secured a $92m (€81m) contract option to provide RAM Block 2 weapon systems to
the U.S. Navy. Raytheon will manufacture these weapon systems with RAMSYS.

 In June 2019, Eurospike GmbH, a joint venture between Diehl Defence, Rheinmetall Defence and Rafael,secured a €40m contract with Estonia for the supply of Spike LR anti-tank missiles.

 As part of the United Arab Emirates' planned replacement of its Hawk air defence system provided by Lockheed
Martin, the country might become the first client of the Falcon air defence system.

Technology and Innovation

 Diehl Defence's R&D investments are focused on the next-generation RBS15 anti-ship missiles jointly
developed with Saab AB, as well as the modernisation of the RAM weapon system together with Raytheon.
			
46

DSME

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator

 Naval shipbuilding (surface ships, submarines) Plant construction (offshore, chemicaland power plants)
 Energy (wind power generation)

GOVERNANCE
Chairman and CEO
Chief Financial Officer

Sung Geun Lee
Keun Mo Lee€ millions

2015

2016

2017

2018

Revenue

12 291

9 982

8 695

7 424

∆ (%) [KRW]*-0,76%-16,99%-13,40%-13,13%

Defence (%)

~8%

~12%

~9%

~8%

Export (%)

N/A

5%

3%

1%

Operatingprofit/loss-1 691-1 192574

789

Operatingmargin (%)-13,76%-11,94%

6,60%

10,63%Net income**

N/A-2 129487

265

Order book

42 70034 00024 000

23 000

Employees

52 61934 00627 69226 927(USD)*Variation based on revenue in local currency.
See €/KRW exchange rates p.7.
**Net income attributable to shareholders.

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolListed on

REVENUE BY BUSINESS LINE (%)
042660:KS

Korea Stock Exchange

Market Cap (MdKRW)

2 851
67

Major shareholders* (as of 20.11.2019)
Korea Development Bank (KDB)

55,70%

Hana Financial Group, Inc.

8,41%

BlackRock Asset Management
North Asia Ltd.

2,36%

Woori Financial Group Inc.

2,33%

32

1
Commercial ships
Offshore plant and 		
special ships

Other*In March 2019, Hyundai Heavy Industries (HHI) signed an agreementwith the Korea Development Bank (KDB) to repurchase KDB's capitalshare in DSME.

MAIN JOINT VENTURES AND ASSOCIATES
Name
Shinhan Heavy
Industry Co., Ltd

REVENUE BY REGION (%)*%

Country

89,22%South Korea

99

South Korea
China

1
<1

Other

*Revenue distribution based on total sales excluding eliminations.

47

DSME

Lo
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i
In atio tin
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Ba lekbc tro
oc ni
k*
k
H
*
H
I

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Surface ships
KDX-II Chungmugong Yi Sun-sin
destroyer
KDX-III Sejong Daewang destroyer
FFX-II Daegu-class frigate
DW 3000F frigate
Multi-mission Combat Ship
Tide-class tanker
ASR-II submarine rescue ship
(under development)
Submarines
KSS-III Dosan Ahn Changho
submarine
KSS-II Son Won-Il submarine(based on TKMS' HDW class 214)
KSS-I Nagapasa submarine(based on TKMS' HDW class 209)
MRO and services
KSS-I Chang Bogo(based on TKMS' HDW class 209)
submarine modernisation*ThyssenKrupp Marine Systems, ThyssenKrupp group**TKMS subsidiary

48

DSME

STRATEGIC HIGHLIGHTS
Business trends Daewoo Shipbuilding & Marine Engineering (DSME) is one of South Korea's top 3 shipbuilding companies. Its
defence business (8% of total revenue) focuses on the construction of surface vessels and submarines. In thecivil segment, DSME has been increasingly focusing on the construction of natural gas carriers (LNGC) - which
accounted for 52% of its revenue in 2018 - to cope with the enduring crisis of the container shipping market.

 DSME revenues again fell in 2018 (-13.1%), reaching KRW 9,644bn (€7.4bn), a level comparable to its

performance in the late 2000s. Net income was nevertheless positive for the second consecutive year, reaching
KRW 1,025bn (€789m) after several years of heavy losses.

 Following a KRW 4,200bn (€3.3bn) bailout in 2015, DSME divested several of its subsidiaries, of which Daewoo

Shipbuilding and Engineering Co in 2017. In 2018, the group also sold its 51% capital stake in Romanian shipyard
Mangalia to Damen Group from the Netherlands for KRW 23.9bn (€18.2m).

 In March 2019, Hyundai Heavy Industries (HHI) signed an agreement with the Korea Development Bank (KDB)

to repurchase KDB's 55.7% capital share in DSME for approximately $1.8bn (€1.6bn). In turn, KDB is expected
to take an interest in HHI's capital. In the end, HHI should hold 26% of a new holding regrouping HHI and
DSME, with KDB owning a further 18%. DSME should nevertheless retain relative independence under the
new structure.

Home market

 DSME is a key contractor of the Republic of Korea Navy (ROKN), along with Hyundai Heavy Industries withwhich it partners on several contracts, such as the KDX-III Sejong Daewang-class destroyers programme.

 DSME delivered the first FFX-II Daegu-class frigate to the ROKN in March 2018, and launched a second frigate(christened Gyeongnam) in June 2019. In the meantime, the company in November 2018 signed a KRW 632bn(€486m) contract for the delivery of two more FFX-II frigates to the ROKN.

 In December 2018, South Korea's Defense Acquisition Program Administration (DAPA) awarded a KRW 444bn(€342m) contract for the construction of a new auxiliary submarine rescue ship (ASR-II) for the ROKN, to bedelivered by 2022.

 In April 2019, South Korea's Ministry of National Defense approved a KRW 3,900 (€3bn) contract for theconstruction of three new KDX-III Sejong Daewang-class destroyers as well as a KRW 3,400 (€2.6bn) contract
for three new KSS-III Dosan Ahn Changho-class attack submarines. The KDX-III destroyers will be jointly built
by Hyundai Heavy Industries and DSME.

Export markets

 In 2019, DSME delivered the third and last KSS-I Nagapasa-class attack submarine to the Indonesian Navyas part of a contract signed in 2011. The warship, christened Alugoro, was the first of its class to be built in
partnership with Indonesian shipbuilding company PT PAL. At the same time, DSME was awarded a $1.02bn(€903m) contract for the construction of three additional attack submarines in cooperation with PT PAL, to bedelivered by 2026.

 In the same year, the group delivered the Tide-class replenishment-at-sea (RAS) tanker Maud to the Royal
Norwegian Navy. The tanker was ordered in 2013 for NOK 1.32bn (€169m).

 DSME withdrew its bid for the construction of three new UK support vessels for the Royal Fleet Auxiliary(a branch of the Royal Navy) as part of the Fleet Solid Support (FSS) ship programme. A British consortium(comprising BAE Systems and Babcock International, among others), Spain's Navantia, and Japan Marine
United remain in contention for the £1bn (€1.14bn) contract.

Technology and Innovation

 DSME's R&D expenditures amounted to KRW 62bn (€47m) in 2018, representing 0.6% of the group's revenue.
49

ELBIT SYSTEMSKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier Military aircraft and helicopter systems
 Unmanned systems
 C4ISR systems
 ISR & Electro-optic systems, EW and SIGINT Land systems and artillery systems
 Cybersecurity
 Simulation and training
GOVERNANCE
Chairman
Chief Executive Officer
General Manager
of Airborne Systems

M. Federmann
B. Machlis

2015

2016

2017

Revenue

2 800

2 945

2 989

2018
3 119

∆ (%) [$]*

5,07%

4,89%

3,62%

9,06%

Defence (%)

97%

97%

97%

97%

Export (%)

80%

78%

78%

80%

Operatingprofit/loss**

242

275

287

248

Operatingmargin (%)**

8,64%

9,34%

9,60%

7,95%

Net income***

182

214

212

175

Order book

6 028

6 555

6 306

8 209

Employees

12 13412 47012 78116 149*Variation based on revenue in US dollars.
See €/$ exchange rates p.7.
**2016 and 2017 figures restated.
***Net income attributable to shareholders.

Y. Shmuely

OWNERSHIP STRUCTURE (as of 20.11.2019)
Symbol€ millions

REVENUE BY BUSINESS LINE (%)
ESLT

Listed on

NASDAQ et TASE

Market Cap ($m)

31

7 052
40

Major shareholders (as of 20.11.2019)
Michael Federmann

17

44,30%

1832 Asset Management LP

2,53%

Fidelity Management & Research Co.

2,30%

The Vanguard Group, Inc.

1,38%

3
Airborne Systems
C4ISR Systems
Land Systems

MAIN JOINT VENTURES AND ASSOCIATES

9Electro-optic Systems
Other (civil 		engineering mainly)

REVENUE BY REGION (%)

Name

%

Country

UAV Tactical Systems Ltd(U-Tacs)

51%

United Kingdom

AEL Sistemas S.A.

75%

BrazilCollins Elbit Vision Systems (CEVS, form. RECVS)

50%

United States

Opgal-Optronic Industries
Ltd

50%

IsraelHalbit Avionics Pvt Ltd

26%

India

Adani Elbit Advanced
Systems India Ltd

N/A

India

27
21
20
7
IsraelNorth America
Asia/Pacific

50

5

20

EuropeLatin America
Rest of the World

AL
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IA rdoI

ELBIT SYSTEMSH

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Military aircraft systems
Avionic systems (F-16I, MiG-21)
Modernisation projects(C-130, MiG-21, Mi-17, F-5, F-16, F/A-18, F-15)
Joint Helmet Mounted Cueing System(JHMCS) (F-16, F/A-18, F-15)
Helmet Display and Tracking System(HDTS, ANVIS/HUD)
Helmet Mounted Display System (HMDS)(F-35)
Unmanned systems
Hermes ( 450, 900, 900 StarLiner, 45) UASSkylark (I, I-LE/LEX, C, II, III) UAS
Seagull USV
C4ISR
WIN Battle Management System (WinBMS)
Tadiran and E-Lynx tactical radio
and communication systems
CoMPASS (MicroCoMPASS, DCoMPASS)
and SPECTRO XR electro-optic payloads
SkEye Wide Area Persistent Surveillance(WAPS)
Electronic warfare
J-MUSIC DIRCM countermeasure system
Land systems and artillery systems
RCWS, DRWS, UT30 and UT MK2
unmanned turrets
ATMOS 155mm self-propelled howitzer*Formerly Rockwell Collins, UTC group51

ELBIT SYSTEMSSTRATEGIC HIGHLIGHTS
Business trends

 Elbit Systems is an Israeli systems and equipment manufacturer and the world's 28th-largest defence contractor

by revenue. The group is in particular the world's leading manufacturer of helmet sights for aircraft pilots (HMDS
Helmet-Mounted Display System for F-35 pilots, co-produced with Collins Aerospace) and helicopter pilots. The
company generated turnover of $3.7bn (€3.1bn) in 2018, up 9.1% year-on-year in US dollars. With 97% of its
business in defence, Elbit Systems remains the leading Israeli defence company.

 The Airborne Systems segment, the group's largest division (40% of revenue), posted strong growth (+15%),

mostly thanks to the acquisition of U.S.-based Universal Avionics Systems Corp., which develops avionics
systems for civil aviation. The Land Systems division also posted growth, driven by the acquisition of Israel's IMI
Systems Ltd (ammunition and protection systems for armoured vehicles).

 Elbit Systems' workforce increased by 26.4% in 2018 to more than 16,000 employees. The increase was mainly
related to acquisitions made by the group, in particular those of IMI and Universal Avionics Systems.

 In April 2019, Elbit Systems of America completed the acquisition of Harris Corporation's night vision business(Harris Night Vision) for approximately $350m (€311m). The group is now one of the world leading providers ofnight vision systems and might become the second supplier of these systems in the United States, alongside
L3Harris Technologies.

Home market

 The Israeli market accounted for only 20% of Elbit Systems' revenue, a share that has been declining since 2010.
 In March 2019 , the Israeli Ministry of Defense (IMOD) awarded Elbit Systems a $125m (€111m) contract for the
supply of ATMOS 155mm calibre self-propelled howitzers (which will replace the Israeli Army's M-109 guns),training simulators as well as maintenance services over a period of 20 years.

 In August 2019, Elbit Systems was selected by the Israeli Ministry of Defense to integrate the Iron Fist Light
Decoupled (IFLD, developed by IMI) active protection system on the new Eitan armoured vehicles (for an
undisclosed contract value). The group was in competition with the Trophy system from Israel's Rafael.

Export markets

 Nearly 80% of the group's sales ($2.9bn, or €2.5bn) were generated from exports in 2018. Elbit Systems alone
accounts for about 40% of Israel's arms exports in value terms.

 M7 Aerospace, one of Elbit Systems' subsidiaries in the United States, is one of the 19 players involved in the
CMMARS (Contracted Maintenance, Modification, Aircrew and Related Services) programme worth $12bn(€11.2bn). The group will provide maintenance and logistical support services for U.S. Army aircraft.

 In March 2019, Elbit Systems and India's Bharat Electronics Limited (BEL) signed a partnership agreement for
the licensed production of HMDS (Helmet Mounted Display System) head-up sights by BEL.

 In June 2019, Elbit Systems was selected by the German Army to supply E-Lynx PNR-1000 military radios,in handheld and vehicular configurations. The radios will be used in particular on SPz Puma armoured infantry
vehicles (produced by KMW, a KNDS subsidiary). Elbit Systems will produce the radios at its German site in Ulm.

 After a first contract signed in the summer of 2018 for the supply of Hermes 450 and Hermes 900 drones,
Elbit Systems in August 2019 received a second, $180m (€162m) order from the Philippines for Hermes 450,
Hermes 900, Skylark I and Skylark III drones.

Technology and Innovation

 R&D expenses, 90% of which are self-financed, amounted to $317.7m (€269m) in 2018.
 In the summer of 2019, Elbit Systems presented a prototype tank as part of the Israeli Ministry of Defense's
CARMEL project to develop a next-generation combat vehicle to replace the Merkava tanks.
52

ELETTRONICAKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier(defence electronics)

 Military aircraft and helicopter systems
 Naval systems
 Land systems
 Eletronic warfare suite
 Cybersecurity
 UAS and counter-UAV systems
 Support services and maintenance€ millions

2015

2016

2017

Revenue

231

219

222

2018
202

∆ (%)

4,66%

-5,23%

1,46%-9,35%

Defence (%)

100%

100%

100%

100%

Export (%)

N/A

N/A

N/A

69%

Operatingprofit/loss

35

32

28

N/A

Operatingmargin (%)

14,94%

14,79%

12,66%

N/A

GOVERNANCE

Net income

23

18

17

19

Chairman and CEO
Chief Financial Officer
Vice President Programs

Order book

842

N/A

N/A

N/A

Employees

790

790

800

N/A

Enzo Benigni
Roberto TurcoAlberto de Arcangelis

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed on

Unlisted groupMarket Cap

61

37

Major shareholders (as of 20.11.2019)
Benigni Family

35,34%

Thales33,33%

Leonardo

31,33%

MAIN JOINT VENTURES AND ASSOCIATES
Name

2
Aeronautics
Naval

Land

REVENUE BY REGION (%)%

Country

CY4GATE Srl

75,5%

Italy

Consortium SIGEN

50%

Italy

SOLYNX

24,11%

UnitedStatesConsorzio cals Italia

7,14%

Italy

Consorzio per la Ricerca
sui Semiconduttori
Composti

4,14%

Italy

31
58

Italy

53

69

ExportLeo

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

na
r
BA do
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Sy
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M
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s
A
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H
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El l dtbitS
Lo yste
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Ex ed
M
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Sy rtin
Ai
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rb
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us

ELETTRONICA

Military aircraft and helicopter systems
Tempest future fighter aircraft
Praetorian Defensive Aids Sub-System (DASS) (Eurofighter)
EDGE escort jamming pod (Eurofighter, Tornado)
ELT/572 DIRCM (AW101, C-130J)
ELT/160 radar warning receivers (NH90)
ESM ELT/741 system (NH90, C-27J)
ESM and ELINT ELT/800 systems (ATR-72)
Naval systems
Nettuno 4100 ECM system (Horizon-classand FREMM frigates, Cavour aircraft carrier)
SEAL ESM system (Baynunah-class corvettes)
Multiplatform system
EuroDIRQM IR countermeasure system
UAS systems
European MALE RPAS subsystem (ISTAR)
ESM/1000 and ELT/1001 systems(Falco, Camcopter, RQ7B Shadow)
Counter-UAV system
Anti-Drone Interception Acquisition Neutralization(ADRIAN)Electronic warfare suite
Virgilius (PPA frigates, Baynunah-class corvettes,
AW101 and A129 helicopters)
Loki ELT/950
Cybersecurity
CY4Gate Digital & Spectrum Intelligence Integrated Suite(D-SINT)54

ELETTRONICA

STRATEGIC HIGHLIGHTS
Business trends Elettronica is an Italian electronic systems integrator and equipment supplier mainly focused on the defence
sector. The group supplies systems for aeronautical, naval and land platforms (protection, detection, jamming
systems, etc.), but also integrated electronic warfare systems and anti-drone systems.

 The group's revenue reached €202m in 2018, down 9.3% year-on-year, mainly due to reduced activity in certain
programmes, such as the Eurofighter Typhoon fighter aircraft or the Alenia C-27J Spartan tactical transport
aircraft, two programmes in which Elettronica participates as a subcontractor.

 After two years of decline, the group's net income rebounded by 10.7% to €19m in 2018. Net margin stood at
9.3%, one of its highest levels over the past decade.

 A cooperation agreement signed in September 2019 between the United Kingdom and Italy provides for theparticipation of Italian manufacturers (Elettronica, Leonardo Italy, Avio Aero, MBDA Italy) in the 6th-generation
Tempest fighter aircraft programme, alongside the members of the Team Tempest consortium, which includes
the United Kingdom's Ministry of Defence, BAE Systems, Rolls-Royce, MBDA UK and Leonardo UK.

Home market

 The group achieved a little more than 30% of its turnover on the Italian market in 2018. As a key partner of themain Italian platform manufacturers and systems integrators (Fincantieri and Leonardo above all), Elettronica
also benefits, through them, from the Italian Navy's modernisation programme. In 2001, the group partneredwith France's Thales to create the SIGEN joint venture, which was selected to supply the electronic warfare
systems for the Horizon-class frigates as well as the FREMM frigates of the Italian and French Navies.

 Elettronica is also involved in major national and cooperation-based programmes in the aeronautics sector(Eurofighter fighter aircraft, AW-101 helicopter, C-27J military transport aircraft, NH90 twin-engine helicopter).

 In April 2018, Elettronica signed a contract with the Italian Army to equip the NH90TTH helicopters (land version)
with ELT/160 radar warning receivers. The value of the contract was not disclosed.

Export markets

 Nearly 70% of the group's sales are generated from exports, particularly within the framework of majorinternational programmes. This share has overall remained stable in recent years.

 Due to the relatively small size of its domestic market, Elettronica is seeking to strengthen its international

activity, particularly through partnerships. In February 2019, the Italian group signed a memorandum of
understanding with India's Bharat Electronics Limited (BEL), a key partner of the Indian Ministry of Defence, forthe development, production and marketing of next-generation electronic warfare systems.

 At the Electronic Warfare (EW) exhibition in Stockholm, the company's German subsidiary Elettronica GmbHjoined forces with Germany's Spherea, a former Airbus subsidiary sold in 2014, to cooperate in the field ofelectronic warfare systems for helicopters. The systems developed by the two partners could be offered to theGerman Army and then possibly to other export markets.

Technology and Innovation

 The group's R&D expenditure increased 10.1% to €11m in 2018. Spending was mainly focused on the new
EDGE jamming system as well as cybersecurity solutions.

 At the end of 2019, the EuroDASS consortium, led by Leonardo and including Elettronica, Indra Sistemas andHensoldt, was tasked with studying the possibilities of upgrading the Praetorian Defensive Aids Sub System(DASS) integrated on the Eurofighter Typhoon. The research programme, called Praetorian Long Term Evolution(LTE), is expected to last 18 months.

55

EMBRAERKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017**

2018

 Commercial and military aircraft

Revenue

5 341

5 604

5 185

4 294
-13,45%(light, transport and surveillance) Radar systems
 C4ISR systems
 Space systems
GOVERNANCE
Chairman
Chief Executive Officer
Chief Financial Officer
President and CEO
Defence & Security

A. Gonçaves Silva
F. Gomes Neto
N. Salgado
J. M. de F. Schneider∆ (%) [$]**-5,74%

4,65%-5,55%

Defence (%)

14%

13%

15%

12%

Export (%)

89%

89%

87%

81%

Operatingprofit/loss

299

193

303

30

Operatingmargin (%)

5,59%

3,44%

5,84%

0,70%

Net income***

62

161

234

-151

Order book

20 62518 61715 29414 236

Employees

19 37318 50618 43318 520*Variation based on revenue in dollars.
See €/$ exchange rates p.7.
**2017 figures restated.
***Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE (as of 20.11.2019)
Symbol

ERJ, EMBR3

Listed on

NYSE et B3SA3

Market Cap ($m)

22

3 040

Mondrian Investment Partners Ltd.

9,94%

BNDES Participações SA

5,37%

Hotchkis & Wiley Capital Management
LLC

5,04%

Brandes Investment Partners LP

4,45%

19

47

Major shareholders (as of 20.11.2019)12<1
Commercial Aviation*
Executive Jets
Servicesand Support**

Defense and Security
Other*Commercial Aviation business taken over by Boeing in July 2018.
**Services and support business reported as a separate division
since 2018.

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

OGMA-Indústria Aeronáuticade Portugal S.A.

65%

Portugal

Visiona Tecnologia Espacial S.A.

51%

BrazilBoeing Brasil-Commercial

20%

BrazilBoeing Embraer-Defense

51%

N/A

58
9
2
3

BrazilNorth America
EuropeAsia/Pacific
56

9

19
Latin America(excl. Brazil)
Other

EMBRAER

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Sa
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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSLight attack and advanced trainer
EMB-314 (A-29) Super Tucano
A-4 Skyhawk
modernisation programme
A-1M (AMX)
modernisation programmeFighter aircraft
FX-2 programme(Gripen JAS-39 E/F)
Airborne early warningand control aircraft
EMB-145 AEW&C
P600 AEW (under development)
Military transport aircraft
KC-390Radar and C4ISR systems
SABER-M60, SABER M200,
SABER-S200 surveillance radars
SISFRON integrated bordermonitoring system programme
Satellite
SGDC-1 Geostationary Satellite
for Communications and Defense
Naval systems
Tamandaré-class corvettes*Defence Research and Development Organization (India)**Centro Tecnológico do Exército***Formerly Rockwell Collins, UTC group****Israel Aerospace Industries (IAI)*****ThyssenKrupp Marine Systems, ThyssenKrupp group

57

EMBRAERSTRATEGIC HIGHLIGHTS
Business trends

 Embraer is a Brazilian aerospace and defence group that specialises in aircraft manufacturing. The group
generated $5.1bn (€4.3bn) in revenue in 2018, down 13.5% year-on-year in local currency. Sales were affectedby lower activity in its three major divisions: Commercial aviation (-14.9%), Business jets (-13.7%), and Defense& Security (-28.3%). The share of the Defense & Security division in total sales decreased from 16% in 2017
to 12% in 2018.

 After a first incident in October 2017, Embraer's KC-390 military cargo jet prototype was again damaged after

going off a runway during a May 2018 ground test. The incidents significantly weighed on revenues from the
Defense & Security division, mostly due to delays caused in deliveries, which were initially set for late 2018 but
eventually began in September 2019.

 In early 2019, the Brazilian government and Embraer shareholders approved a proposed deal to merge

Embraer's commercial aviation division into a new joint venture with Boeing, which will own 80% in the newcompany called Boeing Brasil – Commercial. Both companies expect the deal to obtain final approvals and be
finalised before the end of 2019.

 Embraer and Boeing are also planning to set up a second joint venture called Boeing Embraer-Defense (in which
Embraer will hold a 51% capital stake and Boeing 49%) aimed at promoting the KC-390 military cargo jet.

Home market

 Embraer's Defense & Security division remains very reliant on Brazil's defence spending, with about half of thedivision's revenue generated in the country. This share has nevertheless been declining, dropping from 66.3%
in 2017 to 48.1% in 2018. The group has been the main beneficiary of Brazil's major defence programmes
launched over the past decade (Super Tucano, KC-390, FX-2 Gripen, SISFRON, SGDC).

 In early 2019, Águas Azuis, a consortium between TKMS, Embraer and Atech, won a tender for the constructionof four new Tamandaré-class corvettes for the Brazilian Navy, with delivery scheduled between 2024 and 2028.
The consortium won the contract, worth an estimated $1.6bn (€1.4bn), against competing alliances led byDamen, Fincantieri and Naval Group, respectively. MBDA will supply the Exocet MM40 B1/B3 and Sea Ceptor
missiles, with Safran, Leonardo, BAE Systems and Thales providing other equipment.

 In September 2019, Sweden's Saab AB finalised the assembly of the first of 36 Gripen fighter jets ordered by

Brazil as part of the FX-2 fighter aircraft programme. The aircraft is scheduled to be delivered to Brazil by the endof 2020 following the completion of flight tests in Sweden. As part of the programme, Embraer will benefit fromsignificant technology transfers from Saab AB, which will train over 350 Brazilian technicians and engineers.

Export markets

 Export sales were driven by the Super Tucano light attack aircraft, the EMB-145 AEW&C warning and control
aircraft, and more recently by the KC-390 military cargo jet.

 In early 2019, Embraer and its U.S. partner Sierra Nevada Corporation were awarded a contract for theconstruction of 12 Super Tucano A-29 for the Nigerian Air Force.

 In June 2019, Embraer and Elta Systems, a subsidiary of IAI, signed a strategic cooperation agreement for thedevelopment of the P600 AEW, an airborne early warning aircraft based on Embraer's Praetor 600 business jet.

 In August 2019, Embraer signed its first export contract for the KC-390 with Portugal, which ordered five units ofthe military cargo jet. The $827m (€738m) contract includes the supply of a flight simulator and related support
services. The first unit is scheduled to be delivered in 2023. Argentina, Chili, Colombia and the Czech Republic
are also among potential customers following the signatures of letters of intent.

Technology and Innovation

 Embraer's R&D spending decreased 6.3% to $46.1m (€39m) in 2018.
58

FINCANTIERIKEY FIGURES (Fiscal year ended: December 31st)

DOMAINES D'ACTIVITÉS
Platform manufacturer and systems integrator€ millions

2015

2016

2017

2018

 Naval shipbuilding (commercial and military) Offshore Naval equipment and systems

Revenue

4 183

4 429

5 020

5 474
9,04%

(propulsion systems, guidance systems)
 Maintenance and services

GOVERNANCE
Chairman
Chief Executive Officer
General Manager Naval Vessels

G. Massolo
G. BonoG. Giordo∆ (%)-4,91%

5,88%

13,34%

Defence (%)*

25%

26%

24%

26%

Export (%)

85%

84%

85%

82%

Operatingprofit/loss

-137

157

221

277

Operatingmargin (%)-3,28%

3,54%

4,40%

5,06%

Net income**

-175

25

57

72

Order book

15 72118 23122 05325 524

Employees

20 01919 18119 54519 274*Naval vessels revenue.
**Net income attributable to shareholders.

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolREVENUE BY BUSINESS LINE (%)*
FCT

Listed on

Borsa Italiana

Market Cap (€m)

11

1 653

78

Major shareholders (as of 20.11.2019)11

Fintecna S.p.A (state-owned)

71,30%

Norges Bank Investment Management

2,20%

Dimensional Fund Advisors LP

0,84%

The Vanguard Group, Inc.

0,76%

Shipbuilding
Offshoreand Specialized Vessels

Equipment, Systems 		
and Services*Revenue distribution based on total sales excluding eliminations.

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

Orizzonte Sistemi Navali
S.p.A

51%

Italy

Etihad Ship Building LLC

35%

UAE

Marinette Marine Corp.

87,44%

UnitedStatesCentro Per Gli Studi Di
Tecnica Navale Cetena S.p.A

86,10%

Italy

Vard Holdings Ltd

97,22%

Singapore

Naviris

50%

Italy

18

Italy

59

82

Rest of the World

M
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Ch rdoanti erGen s deerlaAp l E 'Atlalpl
ed ect ntiqrue
E l o re i c
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**

FINCANTIERI

TK

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Surface ships
PPA multi-purpose Offshore Patrol Vessel(OPV)
Multi-role corvette (export markets)
Horizon-class frigate
FREMM multi-purpose frigate
Freedom-class Littoral Combat Ship (LCS)
frigateCavour aircraft carrier
San Giusto-class Landing Platform Dock (LPD)
Trieste-class Landing Helicopter Dock (LHD)
Vulcano-class Logistic Support Ship (LSS)
French Navy's future LSS(BRF, FLOTLOG programme)***Samuel Beckett-class OPV
Norwegian Coast Guard's
Jan Mayen-class vessel
MMSC frigate(Multi-Mission Surface Combatant)
Submarine
U212A Todaro-class submarine(under TKMS licence)
Propulsion systems and guidance systems
Propeller propulsion system and shaft lines
Propulsion systems
Rudder roll governanceand stabilization system
Turbines
Stabilization and positioning systems*ThyssenKrupp Marine Systems, ThyssenKrupp group **Babcock group, naval shipyard which closed in November 2018 after last Samuel Beckettclass OPV delivery ***Based on Italian Navy's Vulcano-class LSS

60

FINCANTIERISTRATEGIC HIGHLIGHTS
Business trends

 Fincantieri, Italy's leading naval group, is the world's largest civil shipbuilding company (cruise ships, ferries,

yachts), with a market share of nearly 40% in 2018. The company is also active in the naval defence sector,
where it operates as the prime contractor for the Italian Navy's main programmes (naval surface vessels, special
vessels, submarines under German licence, naval systems, etc.).

 Fincantieri's turnover increased for the fourth consecutive year in 2018, reaching nearly €5.5bn, although growthslightly slowed compared to the previous year (+9% year-on-year in 2018 compared to +13.3% in 2017). The
group's three divisions all contributed to growth. The Shipbuilding division, Fincantieri's main division (€4.7bn, or
78% of total revenue), reported a 9.6% increase, in particular thanks to a good performance in the naval defence
sector (+18.3% in 2018).

 After the acquisition of a majority stake in 2013 and a first ownership increase in 2017, Fincantieri again
increased its capital stake in Norwegian shipbuilding company Vard, from around 85% to 97.22%, as part ofan unconditional bid. Following this increase, Fincantieri delisted Vard from the Singapore Stock Exchange.

 Announced at Euronaval 2018, the alliance between France's Naval Group and Fincantieri (Poseidon project)
was formalised in June 2019. The alliance should in particular enable the two groups to carry out common
R&D projects and jointly prepare surface vessel bids for binational programmes and export markets. A 50:50
joint venture, called Naviris, was created at the end of the year, with its headquarters in Genoa (Italy) and a site
in France (Ollioules).

Home market

 A key player in the Italian shipbuilding sector, Fincantieri (nine shipyards and nearly 8,700 employees in Italy)
nevertheless generates only a minor share of its turnover on its domestic market (18% in 2018).

 In April 2019, Fincantieri delivered the 8th of the 10 FREMM multi-purpose frigates ordered by the Italian Navyas part of a French-Italian cooperation programme. Named Antonio Marceglia, the frigate was built on the
Muggiano shipyard. The last FREMM frigate (Spartaco Schergat) is scheduled for delivery in 2020.

 The Trieste-class Landing Helicopter Dock (LHD) ordered by the Italian Navy was launched at the Castellamaredi Stabia shipyard in May 2019. The vessel is expected to be delivered in 2022.

Export markets

 Export turnover accounted for 82% of the group's revenue in 2018. Thanks to its subsidiaries Marinette Marine

and Vard (formerly STX OSV), the group is well positioned in the United States and Northern Europe (Ireland,
Nordic countries).

 Fincantieri aims to further strengthen its international presence, particularly through partnerships. In addition

to the alliance concluded with Naval Group (Poseidon project), the group finalised an agreement with Abu
Dhabi Shipbuilding (ADSB), the United Arab Emirates' (UAE) leading shipbuilder, for commercial and industrial
cooperation in the UAE's civil and military shipbuilding sector.

 In June 2018, Vard won a NOK 5bn (€550m) contract from the Norwegian Defence Materiel Agency (NDMA)
for the construction of three coastguard vessels that will replace the Nordkapp, Senja and Andenes-classvessels. The vessels, whose class name will be Jan Mayen, will be built at Vard's Tulcea (Romania) andLangsten (Norway) shipyards, in partnership with Norway's LMG Marin, in charge of the design.

 As part of the LCS (Littoral Combat Ship) programme, the U.S. Navy ordered two new Freedom-class LCSs

(one in September 2018, the other in January 2019) from Lockheed Martin and its partner Marinette Marine,
making it the 15th and 16th orders of this class. Financial details were not disclosed.

Technology and Innovation

 The group's R&D expenditure amounted to €122m in 2018, up 8% year-on-year.
61

GENERAL ATOMICSKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017

2018

 Unmanned aircraft systems
 Sensors Weapon systems
 Electromagnetic systems,

Revenue~2 704~2 710~2 572~2 440N/A

advanced arresting gear

 Satellites and space systems
 Nuclear engineering

GOVERNANCE
Chairman and CEO
Chief Financial Officer
CEO GA-ASIJames N. Blue
Liam Kelly
Linden P. BlueOWNERSHIP STRUCTURE

∆ (%)

N/A

N/A

N/A

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

N/A

N/A

N/A

N/A

Operatingmargin (%)

N/A

N/A

N/A

N/A

Net income

N/A

N/A

N/A

N/A

Order book

N/A

N/A

N/A

N/A

Employees

N/A

N/A

N/A

15 000REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap

N/A

Major shareholders (as of 20.11.2019)Blue Family

100%

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

ConverDyn

50%

UnitedStates50%

UnitedStatesTRIGA International

N/A

62

GENERAL ATOMICS

Bo
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BA p G tin
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Le yston em an
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Pr do
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Se we
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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Unmanned aircraft systems
Predator XP
Gray Eagle MQ-1C
and Gray Eagle Extended Range (GE-ER)
Predator B/Reaper MQ-9
Skyguardian and Seaguardian MQ-9B
Avenger/Predator C
Sensors
Lynx multi-mode radar
Highlighter I and II airborne electro-opticalsensors (under development)
Claw 3 integrated sensor payload control
and analysis software
Weapon systems
High Energy Liquid Laser Area
Defense System (HELLADS)
Blitzer electromagnetic railgun(under development)
Aircraft launch and recovery systems
Electromagnetic Aircraft Launch System(EMALS)
Advanced Arresting Gear (AAG)
Ground control stations
Legacy GCS, STORM GCS
and Advanced Cockpit GCS*UTC group**Merger of L3 Technologies and Harris Corporation

63

GENERAL ATOMICSSTRATEGIC HIGHLIGHTS
Business trends

 General Atomics is an American industrial corporation specialising in defence (drones, electromagnetic weapon

systems, etc.) and energy systems (in particular nuclear technology). The group's revenues reached $2.88bn(€2.44bn) in 2018, a slight decrease compared to the previous year.

 General Atomics benefits from several military Unmanned Aircraft System (UAS) orders and related

maintenance contracts by the U.S. Air Force and several European armed forces. As of February 2019, thegroup manufactured over 850 combat drones and more than 300 ground control stations.

 The group signed various partnerships in the field of drone technology during 2018-2019, including with GKN

to collaborate on composite tails for the Predator B Remotely Piloted Aircraft (RPA) series; with Leonardo tointegrate the latter's SAGE electronic warfare surveillance system onto the MQ-9B Sky Guardian and Sea
Guardian drones; and with CAE to develop a simulation system for the Protector RG Mk1 remotely piloted
aircraft system (RPAS) of the U.K.'s Royal Air Force.

Home market

 General Atomics is the leader in the U.S. market for MALE combat drones via its Predator and Reaper systems.
 In August 2018, the group signed a $134m (€113m) contract with the U.S. Air Force for the development ofan advanced sensor for the MQ-9 Reaper drones by the end of 2021. In late 2018, the group signed a $291m(€246m) maintenance contract for MQ-9 Reaper drones until the end of 2019.

 During the first half of 2019, General Atomics signed three contracts with the U.S. DoD, for a total value of$201m (€178m), to provide logistics support services for the MQ-1C Gray Eagle UAS.

 In September 2019, the Naval Surface Warfare Center, Carderock Division (NSWCDD) selected General
Atomics to supply two large Bearing Support Structures (BSS) to be used in the construction of the U.S. Navy's
Columbia-class submarines.

 In October 2019, General Atomics was awarded a contract from Dynetics Technical Solutions (DTS) to provide

subassemblies for the Common Hypersonic Glide Body (C-HGB) weapons systems destined for the U.S. Army.

Export markets

 The group's export strategy has been constrained by the U.S. government's ITAR (International Traffic in Arms
Regulations) and MCTR (Missile Technology Control Regime) arms exports control regulations. Internationalsales are mainly carried out through the Foreign Military Sales (FMS) programme and generally on the basis ofunarmed systems.

 General Atomics strengthened its position in Europe, where its MQ-9 Reaper drone is already in service within

the air forces of Britain, Spain, France and Italy. In March 2019, the U.S. Department of Defense awarded
General Atomics a $123m (€109m) contract - via the FMS programme - to supply four MQ-9 Reaper drones
and four mobile ground control stations to the Netherlands by the end of 2020. The U.S. government also
approved a $600m (€530m) order from Belgium for four unarmed MQ-9B Sky Guardian drones, two groundcontrol stations, spare parts as well as support equipment for a period of 5 years. As part of the contract's offset
agreements, General Atomics will partner with several Belgian suppliers including SABCA, Thales Belgium,
Esterline, Newtec and DronePort.

 Discussions are underway between the governments of India and the U.S. over the sale of MQ-9B Sea

Guardian surveillance drones to the Indian Navy, as well as armed configurations of the drone to the country's
land forces. The contract might include the sale of 22 drones for a total estimated amount of $2bn (€1.7bn).

Technology and Innovation

 The group is pursuing several R&D programmes, including in the fields of Predator drone modernisation,
advanced propulsion systems for underwater drones, lithium-ion batteries, and high energy density capacitors.
64

GENERAL DYNAMICSKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015**

2016**

20172018

 Commercial aircraft (Gulfstream, Jet Aviation)
 Armoured vehicles
 Weapon systems, artillery systems, ammunition
 Naval (surface ships and submarines)
 C4ISR IT solutions and cybersecurity

Revenue

28 63227 60727 41030 646

GOVERNANCE
Chairwoman and CEO
Chief Financial Officer

Phebe N. Novakovic
Jason W. Aiken

Executive VP Marine Systems

Robert E. SmithOWNERSHIP STRUCTURE (as of 20.11.2019)∆ (%) [$]*

23,34%-3,84%

1,35%

16,85%

Defence (%)

60%

64%

63%

62%

Export (%)

26%

24%

24%

21%

Operatingprofit/loss

4 049

3 382

3 749

3 374

Operatingmargin (%)

14,14%

12,25%

13,68%

12,31%Net income

2 735

2 323

2 577

2 832

Order book62 24659 01952 69059 276

Employees

99 90098 80098 600105 600*Variation based on revenue in local currency.
See €/$ exchange rates p.7.
**2015 and 2016 figures restated.

REVENUE BY BUSINESS LINE (%)

SymbolGD

Listed on

NYSE

Market Cap ($m)

53 86623
23

24

Major shareholders (as of 20.11.2019)
Longview Asset Management LLC

11,40%

Capital Research & Management Co.

10,80%

Capital Research & Management Co.
(Global Investors)

9,07%

Evercore Trust Company, NA

7,50%

Newport Trust Co.

6,95%

MAIN JOINT VENTURES AND ASSOCIATES

13
Marine Systems
Aerospace
Information Technology

17

Combat Systems
Mission Systems

REVENUE BY REGION (%)

Name

%

Country

GR Dynamics LLC

50%

United States

Defense Munitions
International LLC

50%

United States

American Powder
Company

50%

United States

GD Mission Systems
International Middle East

N/A

UAE

Range Generation Next

50%

United States

65

81

8
6
4
1

North America
EuropeAsia/Pacific

Africa and Middle East
South America

Au
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**
w
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GENERAL DYNAMICS

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

AircraftGulfstream special mission aircraft
Submarines
Virginia-classnuclear-powered attack submarines (SSN)
Ohio-class ballistic missile submarines(SSBN) (to be replaced by Columbia-classfrom 2021)
Surface ships
Zumwalt-class destroyer (DDG-1000)
Arleigh Burke-class destroyer (DDG-51)
Military vehicles
Abrams M1A1, M1A2 and M1A2C
main battle tanks
PIRANHA armoured infantry fighting vehicle
Stryker armoured infantry fighting vehicle
AJAX (Scout SV) UK programme
Mobile Protected Firepower light tank
Weapons, artillery systems, ammunition
SAMSON remote controlled weapon station
Hydra-70 family of rockets (70mm)
Mission systems and C4ISR
Bowman and Morpheus C4I systems
Warfighter Information Network-Tactical(WIN-T)
Open architecture computing infrastructure
OPEN CI (LCS frigates)
Common Hardware Systems-5 (CHS-5)
programme*Formerly Rockwell Collins, UTC group **Merger of L3 Technologies and Harris Corporation

66

GENERAL DYNAMICS

STRATEGIC HIGHLIGHTS
Business trends

 General Dynamics is a U.S.-based platform producer and systems integrator and the world's sixth-largest
defence contractor by sales. The group has a diversified portfolio of activities spanning commercial aviation(Gulfstream, Jet Aviation), armoured combat vehicles (General Dynamics Land Systems), artillery systems
and ammunitions, surface ships and submarines (Electric Boat, Iron Works), as well as mission systems andcybersecurity, among others.

 General Dynamics revenue reached $36.2bn (€30.6bn) in 2018, a 16.9% year-on-year increase in local currency.
Growth was mainly driven by the April 2018 takeover of CSRA, an American IT services company that generated$5bn (€4.4bn) in revenues during 2017. Excluding the purchase, revenue growth stood at 5% during the year.

 Following the acquisition of CSRA, General Dynamics split its Information Systems and Technology division into

two new divisions: Information Technology (encompassing CSRA) and Mission Systems. As a consequence,
the group is now organised around five divisions. Although all of them are involved in the defence business, theshare of defence activities varies strongly by division (95% of sales in the Combat Systems division, compared
to 10% in Aerospace for example).

 In November 2018, General Dynamics European Land Systems (GDELS, a General Dynamics subsidiaryattached to the Combat Systems division) acquired Germany's FWW Fahrzeugwerk GmbH, a qualified vehicle
maintenance and service provider for the German Army that has 220 employees.

Home market

 The United States remain by far General Dynamics' core market, accounting for about 80% of its revenue in2018. The group is in particular a key contractor for the U.S. Department of Defense.

 In August 2018, the group won a $3.9bn (€3.3bn) contract from the U.S. Army to supply military equipment as
part of the Common Hardware Systems-5 (CHS-5) Program.

 During 2018-2019, the Marine Systems division signed several contracts with the U.S. Navy, including one

for five DDG-51 Arleigh Burke-class destroyers (total contract value of $4.8bn, or €4.1bn), one for 10 Virginiaclass attack submarines (Block V, total contract value of $2bn, or €1.8bn), and one for further development of
the upcoming Columbia-class balistic missile submarines (contract value of $480.6m, or €412.4m). General
Dynamics' Electric Boat subsidiary, which will be the programme's prime contractor, will handle most of the
production and assembly of the submarines, with Huntington Ingalls Industries involved as a subcontractor.

 General Dynamics Land Systems won two contracts of $1.36bn (€1.2bn) each for the provision of various

modernisation, repair and logistics services for the U.S. Army's Stryker-class armoured fighting vehicles overa period of five years. The U.S. Army also awarded the group a $714m (€626m) contract to upgrade a further
174 Abrams-type M1A1 main battle tanks to the M1A2C configuration, raising the number of M1A2C vehicles
ordered by the U.S. Army to 274 units.

Export markets

 General Dynamics generated 21% of its revenue from export sales. The group has a strong position in Europe(Austria, Czech Republic, Denmark, Germany, Romania, Spain, Switzerland, United-Kingdom) thanks to its
General Dynamics European Land Systems (GDELS) subsidiary and its British subsidiary GD UK.

 General Dynamics has in particular been tasked by the UK Ministry of Defence to design and develop the nextgeneration tactical communication and information system as part of MORPHEUS programme.

 In early 2018, the group won a $1bn (€0.8bn) contract to deliver 227 Piranha-class armoured figthing vehicles to
the Romanian Land Forces. Spain and the Czech Republic are also considering orders for Piranha-type vehicles.

Technology and Innovation

 General Dynamics' self-funded R&D expenditures represented 1.4% of total revenue in 2018.
67

GENERAL ELECTRIC AVIATION (GE AVIATION)

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS€ millions

2015

2016

2017

2018

Revenue

22 21623 70423 90525 881

Subsidiary of General Electric (GE) conglomerate∆ (%) [$]*

2,79%

6,41%

2,95%

13,15%

 Commercial and military propulsion systems

Defence (%)

15%

13%

15%

14%

Export (%)

61%

60%

60%

59%

Operatingprofit/loss

4 961

4 809

4 752

5 475

Operatingmargin (%)

22,33%

20,29%

19,88%

21,15%Net income

N/A

N/A

N/A

N/A

Order book138 843

146 584

166 972

195 197

Employees

44 00045 00044 50048 000Engine manufacturer, systems integrator/equipment
supplier(fighter aircraft, transport aircraft
and helicopter engines, gas turbines) Aircraft systems and equipment (avionics,
electrical power, structures, dowty propellers)
 Support services and maintenance solutions

GOVERNANCE
Chairman and CEO
Chief Financial Officer
CEO Military Systems

David L. Joyce
Shane Wright
Tony Mathis*Variation based on revenue in local currency.
See €/$ exchange rates p.7.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed on

Unlisted subsidiary

14

Market Cap

74

Major shareholders (as of 20.11.2019)
General Electric

12

100%

Commercial Engines & Services
Military
Systems & Other

MAIN JOINT VENTURES AND ASSOCIATESName

REVENUE BY REGION (%)%

Country

CFM International

50%

UnitedStatesNGS Advanced Fibers

25%

Japan

TUSAS Engine Industries

46%

TurkeyAdvanced Ceramic Coatings

50%

UnitedStatesGE Aviation / Woodward

50%

UnitedStates

23

41

19
5

United States
EuropeAsia

68

12Africa and Middle East
Americas (excl. U.S.)GENERAL ELECTRIC AVIATION (GE AVIATION)

Aircraft engines
Adaptive Cycle Engine
F110 (F-16C/D, F-15SG, F-15SA, F-15S, F-2)
F404 (F/A-18C/D Hornet, F-117, T-50, Gripen NG)
F414 (F/A-18E/F, EA-18G, Gripen JAS 39-E/F,
Tejas Mk II)
F108/CFM56-7B (Boeing AEW&C, P-8 Poseidon)
F138/CF6 (C-5M, KC-10, B767 AWACS, A330 MRTT)
Helicopter engines
T700/CT7 (UH-60, AH-64D/E, NH90, Surion)
T408 (formerly GE38) (CH-53K)
T901 (AH-64, UH-60)
Gas turbines
GE LM2500 (FREMM, Arleigh Burke, Cavour,
INS Vikrant, USS Independence)
Systems and aerostructures
Landing gear systems (X-47B, T-38)
Fuel tanks and pods (F/A-18, Eurofighter Typhoon)
Refuelling probe (A400M)
Pylons and aerostructures (P-8 Poseidon, HAWK AJT)
Propellers (C-27J, C-130J, US-2, Saab 2000,
Fokker 50/60, Q400)*Boeing group**U.S. subsidiary of Leonardo

69

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSGENERAL ELECTRIC AVIATION (GE AVIATION)STRATEGIC HIGHLIGHTS
Business trends

 GE Aviation, a subsidiary of U.S. industrial conglomerate General Electric, is among the world's leading suppliersof jet engines for commercial and military aircraft. The company generated $30.6bn (€25.9bn) in revenue in2018, up 13.2% year-on-year. With all of its three business lines posting growth, GE Aviation is one of General
Electric's strongest performing subsidiaries.

 Growth of the company's Commercial Engines & Services division (74% of GE Aviation's total revenue in 2018)

was supported by strong sales of civil aircraft engines, in particular LEAP engines which are produced by CFM
International, a joint venture between GE Aviation and Safran Aircraft Engines.

 Sales of the Military division were flat compared to 2017, reaching $4.1bn (€3.5bn), or 14% of total revenue. The
company shipped 674 military aircraft engines in 2018, compared to 617 in 2017.

 In June 2019, GE Aviation announced it would complete the transition of nearly 1,000 engineers from its

commercial programmes to its military programmes by the end of 2020. The process is part of the company's
efforts to meet the U.S. Army's need to upgrade and improve its fleet of Apache and Black Hawk helicopters aspart of the Improved Turbine Engine Program (ITEP).

Home market

 GE Aviation generated 41% of its revenue in the United States in 2018. However, its military engine business(both in the aviation and marine segments) continues to rely strongly on orders from the U.S. Department of
Defense.

 In February 2019, a decade after the launch of the ITEP programme, GE Aviation won a $517m (€438m) design,

engineering and manufacturing contract for the T901 turboshaft engine which will replace the T700 engines
used on the U.S. Army's fleet of Apache and Black Hawk helicopters. GE Aviation won against ATEC, a joint
venture between Honeywell and Pratt & Whitney. GE Aviation's T901 turboshaft engine might also power
helicopters of the U.S. Armed Forces' Future Vertical Lift (FVL) plan, for which GE Aviation is in competition with
Honeywell International.

 GE Aviation was selected by the U.S. Navy to equip two new Arleigh Burke-class destroyers with LM2500 gas
turbines. The company is also well positioned to equip 20 frigates of the U.S. Navy's FFG(X) programme withthese turbines.

Export markets

 Nearly 60% of GE Aviation's revenue was generated from export sales in 2018, mostly in the market for civilengines, and mainly in Europe (23%) and Asia (19%).

 In the military segment, the LM2500 gas turbines have been very successful on the export markets. As of early
2019, the engines powered 646 ships of 35 navies worldwide.

 In February 2019, GE Aviation won a contract to provide gas turbine auxiliary equipment (gas turbine controllers,
firefighting equipment, etc.) to support the LM2500 engines of seven new P17A stealth frigates from the IndianNavy.

 In November 2018, Egypt awarded GE Aviation a $273.5m (€231.6m) contract to upgrade the F110-GE-100
engines of its F-16 fighter jet fleet.

Technology and Innovation

 The U.S. Army's Improved Turbine Engine Program (ITEP) and Adaptive Engine Transition Program (AETP)
concentrate most of the company's military R&D expenditures.

 In July 2018, GE Aviation was awarded a $437m (€387m) contract by the U.S. Air Force Cycle Management
Center to continue development work on its adaptive cycle engines.
70

HENSOLDTKEY FIGURES (Fiscal year ended: December 31st)*

BUSINESS AREAS
Systems integrator/equipment supplier Radar systems
 Electronic warfare Optronics
 Communication and display systems
 UAS
 IFF (Identification Friend or Foe) systems

GOVERNANCE
Chairman and CEO
Chief Financial Officer
Chief Operating Officer

Thomas Müller
Axel SalzmannPeter Schlote

OWNERSHIP STRUCTURE*€ millions

2015

2016

2017

2018

Revenue-~1 000~1 100~ 1 000

∆ (%)

-

-

-

-

Defence (%)

-

N/A

95%**

N/A

Export (%)

-

N/A

N/A

N/A

Operatingprofit/loss

-

N/A

N/A

N/A

Operatingmargin (%)

-

N/A

N/A

N/A

Net income

-

N/A

N/A

N/A

Order book

-

N/A

N/A

N/A

Employees-~4 000~4 300~ 4 500*Group results published from 2016.
**SIPRI estimation.

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap
26

Major shareholders (as of 20.11.2019)
KKR

74,90%

Hensoldt

25,10%

N/A
18*The German State owns a so-called golden share in Hensoldt,
providing it with a veto power on major decisions.

MAIN JOINT VENTURES AND ASSOCIATES*REVENUE BY REGION (%)

Name

%

Country

Hensoldt Cyber GmbH

N/A

Germany

977*Name of Hensoldt (49%) and Atlas Services (51%) joint venture
unknown.

7
N/A

71

6

Radar systems
AESA E-CAPTOR (Eurofighter)
PrecISR and ASR air surveillance radars
TRS 3D and 4D naval radars
Counter Battery Radar (COBRA)
IFF (Identification Friend or Foe) systems
MSR 1000 I and MSSR 2000 I interrogators
Defence electronics
MILDS and MILDS-F missile warning systems
Airborne Missile Protection Systems (AMPS)ALTAS laser warning system
Multifunctional Self-protection Systemfor vehicles (MUSS)
Kalaetron Radar Warning Receiver(Kalaetron RWR)
NGWS' electronic warfare (FCAS programme)
Optronics
Euroflir 610 multispectral electro-optical targetingand observation system
Communication and display systems
MIDS Low Volume Terminals (MIDS-LVT)
UAS
ISTAR solution (European MALE RPAS)

72

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Le
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In

Ai

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us

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Si
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na
as
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Th
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Lo
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El
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Ro Elehd ctr
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Sc s &
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M
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ad enc z
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G

HENSOLDTHENSOLDTSTRATEGIC HIGHLIGHTS
Business trends

 Hensoldt was established in February 2017 through the majority sale of Airbus's Defence Electronics unit to
U.S. investment firm KKR for approximately €1.1bn. In September 2018, Hensoldt became a fully independentcompany after completing the buy-back of a remaining 25.1% capital share retained by Airbus after the split.

 Hensoldt ranked 77th among the world's defence companies in 2018, with annual revenues of around €1bn,
almost all of which are generated in the defence sector.

 Hensoldt has made numerous acquisitions since its creation. After taking over the French branch of Airbus DS

Electronics and Border Security, renamed Hensoldt France SAS, in August 2018, the company took control ofmost of the activities of Nexeya, a French supplier of electronic equipment and services. The activities acquiredby Hensoldt together generate approximately €95m in revenue.

 In February 2019, Hensoldt and United Arab Emirates-based Atlas Group announced the creation of a joint

venture in which they will hold 49% and 51% of the capital, respectively. The joint venture will provide Hensoldt
the local presence necessary for the sale of sighting, detection and night vision equipment in the United ArabEmirates.

Home market

 A major supplier to the German Armed Forces, Hensoldt intends to strengthen its position in its domestic
market, in particular by taking advantage of the opportunities provided by major military programmes plannedby Germany for the coming years.

 In 2019, Hensoldt was chosen by the German Navy to equip 5 new K130 Braunschweig-class corvettes with

the TRS-4D naval radar and the MSSR 2000 I surveillance radar. In partnership with Raytheon, the company also
won two contracts to supply air surveillance radars to Germany and the Netherlands (3 and 1 units, respectively).

 The group is partnering with Elettronica, Indra and Thales to offer an ISTAR (Intelligence, Surveillance, Target
Acquisition and Reconnaissance) solution as part of the European MALE RPAS UAV programme. In June 2019,
Hensoldt also joined forces with Safran Electronics & Defense and Spain's Mades to develop the Euroflir 610,
a high-performance multispectral electro-optical targeting and observation system proposed for the future
European drone.

 At the same time, Hensoldt, Diehl Defence, ESG and Rohde & Schwarz joined forces to form the German

FCMS (Future Combat Mission System) consortium to participate in the European NGWS programme (whichis part of the Future Combat Air System, or FCAS) in the field of defence electronics.

Export markets

 In January 2019, Hensoldt won a contract worth more than €20m to upgrade the TRS-3D and MSSR 2000 I
surveillance radars of the Norwegian Coast Guard's three Nordkapp-class patrol vessels, to be delivered from2021. An option was included to carry out the same operation on other vessels.

 In March 2019, Hensoldt received a first order from Airbus Helicopters for 20 AMPS (Airborne Missile Protection

System) to be delivered in 2019-2020. The order came as part of a 10-year AMPS supply contract signed with
Airbus Helicopters in late 2018.

 The requirement for NATO member states to upgrade IFF (Identification Friend or Foe) systems also supports

the activity of Hensoldt, one of Europe's leading players in this segment. In April 2019, Hensoldt was selected
to supply 134 IFF Mode-5 interrogators to France's Ministry of the Armed Forces.

Technology and Innovation

 The group introduced several innovations in 2019: the IFF identification system for NESIS 4000 naval platforms;

the SferiRec LCR flight data recorder; as well as the Kalaetron family of radar warning and signals intelligence(SIGINT) system.
73

HINDUSTAN AERONAUTICS LTD (HAL)KEY FIGURES (Fiscal year ended: March 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015-16

2016-172017-18

 Fighter aircraft Helicopters Structures and components
 Avionics
 Engines

Revenue

2 295

2 392

2 422

2 434

∆ (%) [Rs Cr.]*

6,18%

6,14%

3,86%

7,77%

Defence (%)

96%

97%

93%

94%

Export (%)

3%

3%

2%

2%

Operatingprofit/loss

444

487

429

448

Operatingmargin (%)

19,34%

20,35%

17,72%

18,41%Net income

277

355

263

282

Order book

N/A

N/A

7 612

7 538

Employees

30 30029 52629 03528 345

GOVERNANCE
Chairman and CEO
Chief Financial Officer

R. Madhavan
C.B. Ananthakrishnan

2018-19*1 crore equals 10 000 000 rupees.
Variation based on revenue in local currency.
See €/INR exchange rates p.7.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolHAL

Listed on

NSE & BSE

Market Cap (Rs Cr.)26 19940
54

Major shareholders (as of 20.11.2019)
Indian State

90,00%

Life Insurance Corporation of India

7,00%

ICICI Prudential Asset Management
Co. Ltd.

0,39%

MAIN JOINT VENTURES AND ASSOCIATES

6
Aircraft & Helicopters
MRO

Other

REVENUE BY REGION (%)

Name

%

Country

International Aerospace
Manufacturing Pvt Ltd

50%

India

Safran HAL Aircraft Engines
Pvt Ltd

50%

India

Indo-Russian Aviation Ltd

48%

India

HATSOFF Helicopter Training
Pvt Ltd

50%

India

SAMTEL HAL Display Systems
Ltd

40%

India

Indo-Russian Helicopters Ltd

50,5%

India

98

India

74

2

Rest of the World

HINDUSTAN AERONAUTICS LTD (HAL)

Military aircraft
Advanced Medium Combat Aircraft (AMCA)LCA Tejas fighter aircraft
Su-30 MKI fighter aircraft*
Hawk-i* and Advanced Hawk* Jet Trainers
Do-228 maritime patrol aircraft(under Dornier licence)
Military helicopters
Light Utility Helicopter (LUH)(under development)
Light Combat Helicopter (LCH)
twin-engine multi-role helicopter
Dhruv and Rudra
twin-engine multi-role helicopters
Chetak and Cheetah multi-role helicopters*
Modernisation projects
Mirage 2000 fighter aircraft
Jaguar DARIN III fighter aircraft
Aerostructures
Weapons bay doors (F/A-18E/F, P-8I)
Engines
AL-31 FP turbojet engine (Su-30 MKI)*
Adour Mk 811 (Jaguar) and Mk 871 (Hawk)*
turbojet engines
Ardiden 1H1 Shakti turboshaft engine(Dhruv, LCH)*
Artouste III B turboshaft engine(Cheetah, Chetak)**Built under licence

75

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSHINDUSTAN AERONAUTICS LTD (HAL)

STRATEGIC HIGHLIGHTS
Business trends

 Hindustan Aeronautics Ltd (HAL) is an Indian platform manufacturer and systems integrator mainly active

in aeronautics (fighter aircraft, helicopters, avionic systems, aerostructures, propulsion systems). The groupalmost exclusively operates in the defence sector. It mostly acquires its competencies from Russian andEuropean suppliers through technology transfer agreements negotiated as part of Indian defence equipment
procurement contracts ("Make In India" policy).

 The group's turnover increased by nearly 8% in 2018-2019, to 19,705 crores of rupees (€2.4bn). During theyear, HAL produced 41 aircraft and helicopters and 102 engines, and maintained 213 aircraft and 560 engines.

 The group's order book stood at 58,588 crores of rupees (€7.5bn) as of March 31, 2019. It includes the delivery

to the Indian Armed Forces of 52 fighter aircraft (40 Tejas and 12 Su-30 MKI), 11 Do-228 patrol and surveillance
aircraft and 100 helicopters (72 Dhruv, 20 Cheetah and 8 Chetak).

Home market

 The group is strongly focused on its domestic market, which accounted for 98% of its sales during fiscal year
2018-2019.

 In April 2018, HAL and Mahindra entered into a partnership with Boeing to respond to a call for tenders fromthe Indian government for 114 multi-role fighter aircraft, a contract valued at $18bn (€15.9bn). If their joint bid
is successful, Boeing's F/A-18 E/F Super Hornet will be produced in India to meet local manufacturing criteria.
This call for tenders pits Boeing against the main military aviation manufacturers, including Lockheed Martin, theEurofighter consortium, Dassault Aviation, UAC and Saab AB.

 As part of the "Make in India" policy, HAL aims to increase the share of local manufacturing in its programmes

and thus strengthen its national presence. HAL's local programmes include the multi-role Light Utility Helicopterand Light Combat Helicopter as well as the Hindustan Turboprop Trainer-40 (HTT-40) training aircraft.

 In 2019, HAL delivered the first Mirage 2000 jet fighter fully upgraded in India. The group also began delivering
the Chetak rotorcraft and Advanced Light Helicopters ordered by the Indian Armed Forces in 2017.

 During fiscal year 2019-2020, HAL expects to sign contracts with the Indian Armed Forces for the supply of
83 Tejas MK1A fighter aircraft, 40 Sukhoi Su-30 MKI fighter aircraft, as well as 15 Light Combat Helicopters.

Export markets

 Export sales remain marginal and are partly based on space and civil aeronautics activities (sub-assemblies for
the Boeing 737 and Airbus A320 in particular).

 To increase its international presence, HAL relies mainly on the Do-228 patrol and surveillance aircraft as well as

the Dhruv and Cheetah/Chetak helicopters, which have been chosen by Afghanistan, Nepal, Namibia, Ecuador
and Suriname.

 The group also plans to export its Tejas fighter aircraft as well as the Advanced Hawk, a fighter and training
aircraft under development in partnership with BAE Systems.

Technology and Innovation

 The group's R&D expenditure amounted to 1,464 crores of rupees (€188m) in 2018-2019, representing 7.4%of sales. HAL has 11 R&D centres and is building partnerships with Indian Ministry of Defence research centres
as well as higher education institutions.

 Together with the Indian Aeronautical Development Agency (ADA), HAL is co-developing the 5th-generation
Advanced Combat Medium Aircraft (AMCA) fighter aircraft. The first prototype is expected in 2025.

76

HONEYWELL INTERNATIONAL

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Engine manufacturer, systems integrator/equipment
supplier Commercial and military aerospace (propulsion
systems, avionics, electric power)
 Defence electronics and ISR systems
 Protection solutions
 Infrastructures, energy Equipment for automotive industry

GOVERNANCE
Chairman and CEO€ millions

2015

2016

2017

2018

Revenue

34 75835 50335 87135 395
3,13%∆ (%) [$]*

-4,28%

1,87%

3,13%

Defence (%)

12%

11%

10%

11%

Export (%)

38%

42%

44%

43%

Operatingprofit/loss

5 620

5 466

5 578

5 677

Operatingmargin (%)

16,17%

15,40%

15,55%

16,04%Net income**

4 298

4 347

1 368

5 728

Darius Adamczyk

Order book16 697

16 39214 75421 703

Tim Mahoney

Employees

129 000

131 000

131 000

114 000

CEO Honeywell Aerospace
Chief Financial Officer

Greg Lewis

OWNERSHIP STRUCTURE (as of 20.11.2019)

REVENUE BY BUSINESS LINE (%)

SymbolHON

Listed on

NYSE

Market Cap ($m)

*Variation based on revenue in local currency.
See €/$ exchange rates p.7.
**Net income attributable to shareholders.

131 090

Major shareholders (as of 20.11.2019)
The Vanguard Group, Inc.

7,40%

SSgA Funds Management, Inc.

4,07%

Massachusetts Financial Services Co.

3,39%

Evercore Trust Company, NA

2,76%BlackRock Fund Advisors

2,50%

MAIN JOINT VENTURES AND ASSOCIATES

26

37

22
15

Aerospace
Performance Materials& Technologies

Honeywell Building
Technologies*
Safety & Productivity Sol.

*Formerly Home and Building Technologies.

REVENUE BY REGION (%)*

Name

%

Country

ITEC LLC

50%

United States

ATEC LLC

50%

United States

LHTEC

50%

United States

Integrated Guidance
Systems LLC

50%

United States

Honeywell TAECO
Aerospace (Xiamen)
Co. Ltd

65%

China

24
57
19

United States*
Europe*Including export sales.

77

Other

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Engines and Auxiliary Power Units (APUs)
T55 turboshaft engine (CH-47, MH-47)
HPW3000 turboshaft engine (via ATEC JV)
TPE331 turboprop engine (MQ-9 Reaper, HTT-40, NC212i)
AGT 1500 gas turbine (Abrams M1)
CTS800 turboshaft engine (TLUH)
F124/F125 turbofan engines(M346, L-159, T-100, F/A-259 Striker)
36-150 series APUs (AH-64, UH-60, CH-47)
G230 and G250 series APUs (F-35, F-22)
Avionics
Enhanced Ground Proximity Warning System (EGPWS)
Embedded GPS/INS (EGI)
Weather radar system
RDR-4000M 3-D weather radar system
Security and maintenance
Health and Usage Monitoring System (HUMS)
Ballistic protection
Gold Shield body armor
Control actuation system
Missile steering actuation and electronic control system
for GMLRS
Satellite communications system
JetWave satellite communications system*UTC group

78

Ro
lls
-R
Lo oyc
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he
ed
AI
D
M
C
ar
ti n
Pr
at
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PT W
D hi tni rgey*
KH ant
ar
I
a
In
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H
AL
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si
a

HONEYWELL INTERNATIONALHONEYWELL INTERNATIONALSTRATEGIC HIGHLIGHTS
Business trends

 Honeywell International is a diversified U.S.-based industrial conglomerate. Among its activities, the groupdevelops and manufactures engines, systems and equipment, notably in the fields of commercial and military
aeronautics and aerospace. The group in particular supplies propulsion systems and defence electronics.
Honeywell's defence activities represented 11% of its revenue in 2018 (compared to 10% in 2017).

 In October 2018, Honeywell completed the spin-off of two businesses (Homes and Global Distribution,

Transportation Systems) from its Home and Building Technologies and Aerospace divisions, respectively.
Both businesses were divested as independently-listed companies. The first includes heating, ventilation, airconditioning and home security activities as well as the distribution of safety and fire protection equipment. The
second, renamed Garett-Advancing Motion, regroups Honeywell's former transport systems activities. The
remaining assets mainly include Honeywell's activities in the aeronautics and space sectors.

Home market

 Honeywell generated 57% of its turnover in its domestic market in 2018. Sales to the U.S. Department of
Defense amounted to $2.83bn (€2.5bn), representing only 11.9% of the company's revenue generated in the
United States in 2018.

 The group is involved in the main U.S. aeronautics and space programmes: engines, avionic systems, on-board
electronics, auxiliary power units (APU), etc.

 Honeywell's activity is driven by multi-year equipment maintenance and modernisation contracts (e.g.
modernisation of T-55 engines of the CH-47 Chinook for the U.S. Air Force).

 In May 2019, the U.S. Department of Defense selected Honeywell's JetWave satellite communication system

to equip 70 C-17 Globemaster III transport aircraft as part of the Fixed Installation Satellite Antenna (FISA)
programme. Deliveries are expected to end in 2021.

Export markets

 Honeywell generated 43% of its revenue in foreign markets in 2018. Europe, which accounted for 24% of thegroup's sales, remains its main international market.

 MRO missions support Honeywell's export activity. The group mainly relies on production licensing andpartnerships, particularly in Asia.

 In 2018, Honeywell and Israel Aerospace Industries (IAI) signed a cooperation agreement to develop a new

GPS anti-jam system. Under the agreement, IAI's GPS anti-jam system will be integrated with Honeywell'sEmbedded GPS/INS (EGI) system.

 After a successful first test in 2017, the Royal Australian Air Force in April 2019 announced the installation of the
JetWave system on five additional C-130J Hercules transport aircraft.

Technology and Innovation

 Honeywell's R&D expenses amounted to $1.81bn (€1.53bn), or 4.3% of sales in 2018, a slight decrease
compared to the previous year (4.5%).

 Honeywell is developing a new version of the T55 turboshaft engine, a version designed to equip the U.S.

Army's future military helicopters as part of the Future Vertical Lift programme. In 2019, the current versionof the T55 was successfully tested on the Sikorsky-Boeing SB>1 DEFIANT demonstrator during a test flight.

79

HUNTINGTON INGALLS INDUSTRIES (HII)KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Plateform manufacturer and systems integrator€ millions

2015

2016

2017

2018

 Aircraft carriers
 Submarines (SSN, SSBN) Surface ships
 Amphibious assault ships (LHA, LPD) C4ISR Logistic support
 Energy

Revenue

6 324

6 385

6 585

6 923

∆ (%)

0,91%

0,68%

5,28%

9,88%

Defence (%)

~95%

~95%

~95%

~95%

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

697

791

780

805

Operatingmargin (%)

11,03%

12,39%

11,84%

11,63%

GOVERNANCE

Net income

364

518

424

708

Chairman and CEO

Mike Petters

Order book

20 25919 67317 821

20 083Chief Financial Officer

C. D. Kastner

Employees~36 000 ~37 000 ~38 000 ~41 000

President
Newport News Shipbuilding

J. Boykin

President Ingalls Shipbuilding

B. Cuccias

OWNERSHIP STRUCTURE (as of 20.11.2019)*Variation based on revenue in local currency.
See €/$ exchange rates p.7.

REVENUE BY BUSINESS LINE (%)*

SymbolHII

Listed on

NYSE

Market Cap ($m)

10 66731
57

Major shareholders (as of 20.11.2019)
The Vanguard Group, Inc.

11,20%

SSgA Funds Management, Inc.

8,16%

Fidelity Management & Research Co.

6,88%

Greenlight Capital, Inc.

5,18%

Eton Park Capital Management LP

4,35%

MAIN JOINT VENTURES AND ASSOCIATES

12

Newport News
Ingalls

Technical Solutions*Revenue distribution based on total sales excluding eliminations.

REVENUE BY REGION (%)

Name

%

Country

NSI Pty Ltd

N/AAustralia

Newport News Nuclear
BWXT-Los Alamos(N3B Los Alamos)

N/A

UnitedStatesN/A

80

Aircraft carriers
Ford-class aircraft carrier (CVN)
Nimitz-class aircraft carriers refueling and complex overhaul(CVN)
Submarines
Virginia-class nuclear-powered attack submarine (SSN)
Columbia-class balistic missile submarine (SSBN)(Ohio-class balistic missile submarines replacement)
Surface ships
Arleigh Burke-class destroyer (DDG 51)
Modernisation of Arleigh Burke-class destroyers (DDG 51)
Legend-class National Security Cutter (NSC)
Amphibious assault ships
America-class Landing Helicopter Assault (LHA)
San Antonio-class Landing Platform Dock (LPD)
C4ISR
C4ISR and NAVWAR (Naval Information Warfare Systems
Command) programmes
Logistic support
Planning yard services in support of in-service
Littoral Combat Ships (LCS)

81

or

N

BA
E

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Sy
st
em
th
s
ro
G
p
en
G
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Be al Amachtte om nilcG
en M a sri ner
G al E e P
en
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Lo al D ric
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Co
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Ra ed
ic
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M
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in

HUNTINGTON INGALLS INDUSTRIES (HII)HUNTINGTON INGALLS INDUSTRIES (HII)

STRATEGIC HIGHLIGHTS
Business trends

 Huntington Ingalls Industries is the leading military shipbuilding company in the United States. It was createdin 2011 through the spin-off of Northrop Grumman's naval activities. It is the only manufacturer of the U.S.
Navy's Ford-class aircraft carriers and the co-manufacturer, alongside General Dynamics, of Arleigh Burke-classdestroyers and Virginia-class nuclear-powered attack submarines.

 The group posted further growth in 2018 (+10%), with turnover reaching $8.2bn (€7bn), supported by sales ofamphibious vessels and aircraft carriers. Almost all of Huntington Ingalls Industries' revenues are generated in
the U.S. defence market.

 With nearly $10bn (€8.7bn) worth of new contracts won in 2018, the group's order book stood at $23bn(€20.1bn) at the end of December 2018.

 Most of the group's activity is divided between the Newport News Shipbuilding shipyard (Ford-class aircraft
carriers, Virginia-class submarines) and the Ingalls Shipbuilding shipyard (LHA and LPD amphibious vessels,Arleigh Burke-class destroyers). In 2016, Huntington Ingalls Industries created the Technical Solutions division(12% of total revenue in 2018), which comprises maintenance operations and nuclear activities.

Home market

 As a key player in the U.S. naval sector, Huntington Ingalls Industries is one of the main beneficiaries of U.S.
Navy programmes.

 In January 2019, the group won a $15.2bn (€13.6bn) contract from the U.S. Navy to build the 3rd and 4th Ford-class aircraft carriers. The two vessels are scheduled to be delivered in 2028 and 2032. The USS Gerald R. Ford,the first ship of the new class, was commissioned in July 2017 but will not be deployed by the US Navy before
2022 due to the complex final manufacturing stages of the ship, which incorporates several new technologies.
Built at the Newport News shipyard in Virginia, the Ford-class aircraft carriers are the successors to the Nimitzclass carriers. They can carry 70 aircraft (including the future F-35C), helicopters and drones and for the first timeare equipped with the new Electromagnetic Aircraft Launch System (EMALS).

 The group is also involved in the construction of Arleigh Burke-class destroyers, alternating with Bath Iron Works(a subsidiary of General Dynamics). In September 2018, the U.S. Navy awarded a $5.1bn (€4.3bn) contract toHuntington Ingalls Industries for the construction of 6 new ships.

 In 2019, Huntington Ingalls Industries also won a $1.47bn (€1.31bn) U.S. Navy contract to build the 14th
San Antonio-class amphibious transport ship, the LPD 30.

 The U.S. shipbuilder is also in competition with Bath Iron Works, Austal and Fincantieri for the U.S. Navy's
FFG(X) future multi-mission frigate programme. Huntington Ingalls Industries' offer is based on the Legendclass cutter of the U.S. Coast Guard. The U.S. Navy's decision is expected in 2020.

 In the submarine segment, Huntington Ingalls Industries is the U.S. leader in nuclear-powered attack submarines

alongside General Dynamics. The two groups alternate in the production of Virginia-class nuclear-powered
attack submarines (SSN). In 2016, General Dynamics was chosen as prime contractor for the developmentof the new Columbia-class ballistic missile submarine (SSBN). Its subsidiary Electric Boat will carry out the
majority of production and final assembly of the submarines, with Huntington Ingalls Industries acting as themain subcontractor. The construction of 12 Columbia-class SSBNs is planned between 2021 and 2039.

Technology and Innovation

 The group's self-financed R&D expenses amounted to $25m (€22m) in 2018. Most of the R&D costs of its
programmes are financed by government contracts.

82

INDRA SISTEMASKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier Defence and security (air defence, radar, UAS,
surveillance systems, C4I)

 Transportation
 Energy and Industry
 Financial services
 Public and Health sectors
 Telecom and MediaGOVERNANCE
Chairman and CEO
Chief Financial Officer
Head of Defense & Security

F. Abril-Martorell
J. Lázaro
M. Escalante

OWNERSHIP STRUCTURE (as of 20.11.2019)
Symbol€ millions

2015

2016

2017

2018

Revenue

2 850

2 709

3 011

3 104
3,08%

∆ (%)

-2,98%-4,95%

11,14%

Defence (%)

19%

22%

20%

18%

Export (%)

57%

57%

54%

50%

Operatingprofit/loss

-641

162

196

199

Operatingmargin (%)-22,50%

5,96%

6,50%

6,42%

Net income*

-641

70

127

120

Order book

3 193

3 129

3 612

4 065

Employees

37 06034 29440 02043 707*Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)
IDR

Listed on

20

Bolsa de Madrid

Market Cap (€m)

19

1 669

21

Major shareholders (as of 20.11.2019)SEPI (Spanish State)

18,70%

Corporación Financiera Alba, S.A.

10,50%

Fidelity Management & Research Co.

9,16%Norges Bank Investment Management

3,56%

FIL Investment Advisors (UK) Ltd.

3,51%

MAIN JOINT VENTURES AND ASSOCIATES

8

18
14

Financial Services
Transportation
Energy & Industry

Defense & Security
Public adm.
& Healthcare
Telecoms & MediaREVENUE BY REGION (%)

Name

%

Country

Inmize Sistemas S.L.

40%

Spain

Euromids SAS

25%

FranceUTE Indra-Eurocopter

62,5%

Spain

SAES Capital SA

49%

Spain

Eurofighter Simulation
System GmbH

26%

Germany

20
50
14

Spain
Latin America

UTE Indra-EADS CASA

50%

Spain

UTE VCR 8x8

37,94%

Spain

16

83

Europe (excl. Spain)
Asia, Middle East,
Africa

Th
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INDRA SISTEMAS

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Defence electronics
NGWS future fighter aircraft(defence electronics)
InSHIELD DIRCM countermeasure system(A400M)
EuroDIRQM IR countermeasure system
RF ALQ-500 countermeasure system(Spanish F/A-18)
Praetorian Defensive Aids Sub-System (DASS)(Eurofighter)
RIGEL electronic defence system
C2 systems
8x8 DRAGON VCR future wheeled armoured
vehicles mission system
Lince Battlefield Management System (BMS)UAS and air collision avoidance system
European MALE RPAS (ISTAR solution)
Simulation solutions
ASTA fighter aircraft simulator (Eurofighter)
Military transport aircraft simulators(A400M, C130)
Military helicopters simulators(Tigre, NH90, AW159, Chinook, etc.)
Radars and sonars
Naval suite for submarines (209/212/214, S-80)
3D Lanza radar family
E-CAPTOR AESA radar
S-band AESA naval radars (F-100/F-110)*General Dynamics subsidiary84

INDRA SISTEMASSTRATEGIC HIGHLIGHTS
Business trends Indra Sistemas is a Spanish supplier of equipment and systems in various civil and military sectors including

defence, transportation, energy, industry, and financial services. The group generated 18.9% of its revenue
in the defence sector in 2018. In the military sector, its activities include defence electronics solutions, radars,
surveillance systems, training solutions, flight simulators, and UAV systems.

 The group's turnover reached a record €3.1bn in 2018. After fiscal year 2017 was marked by the acquisition of
Spanish IT company Tecnocom, Indra Sistemas' growth however slowed down (+3.1% in 2018 compared to+11.1% in 2017). The Defence and Security business line, which is part of the Transport and Defence division,
recorded a further decline in sales (-4.2%, after -0.5% in 2017), mainly due to the decline in activity on theEurofighter programme, in which Indra Sistemas is involved as a contractor.

 At the end of 2018, Indra Sistemas inaugurated its new Madrid-based helicopter flight simulation centre (Centro
de Simulación de Helicópteros, CESIHEL) developed in partnership with the Spanish Army. The centre isintended to accommodate both the Spanish and foreign armed forces, and will eventually have 10 simulators fordifferent helicopter types (CH-47D Chinook, AS532 Cougar, EC135 and EC665, NH90, etc.).

Home market

 Indra Sistemas generated 50% of its turnover in Spain in 2018, a share that has been growing for several years(+7 percentage points since 2015). The group is involved in many of the Spanish Army's orders and programmes,
in particular as a subcontractor of Navantia and General Dynamics European Land Systems (and the latter's
subsidiary Santa Bárbara Sistemas).

 In June 2018, Indra Sistemas made a first demonstration of the mission systems intended to equip the future

8X8 VCR DRAGON wheeled armoured vehicles produced by Santa Bárbara Sistemas (GDELS). As part of thisprogramme of the Spanish Ministry of Defence, both partners are working alongside Sapa, a Spanish defence
contractor.

 In early 2019, the Spanish procurement agency (DGAM) chose Indra Sistemas to participate in the Soprene

project, which aims to use new technologies in the military field. The group is in particular in charge of a study on
the use of artificial intelligence to facilitate predictive maintenance of Spanish Navy vessels.

 In February 2019, Spain officially joined the programme of the future European fighter aircraft (NGWS). Indra
Sistemas will be responsible, alongside Thales and Hensoldt, for defence electronics.

Export markets

 The group's export activity fell by 4.7% in 2018, to €1.5bn (compared with €1.8bn in 2014). International sales
are nevertheless expected to recover in 2020, supported by rising military spending and border surveillanceneeds in many countries.

 In December 2018, the group signed a contract of an undisclosed amount with Atlas Elektronik (TKMS,

ThyssenKrupp group) to equip the five new K130 Braunschweig-class corvettes of the German Navy with the
RIGEL electronic defence system. The K130 corvettes are produced by the ARGE K130 consortium composedof TKMS, Lürssen Defence and German Naval Yards Kiel.

 In May 2019, Indra Sistemas was selected by the UK's Royal Air Force to supply the Long Tactical Range 25(LTR-25) military radar. The latest radar of the Lanza family, it has a long-range detection and rapid deployment
capability. Delivery is scheduled for the end of 2019.

Technology and Innovation

 The group's R&D expenditure amounted to €210m in 2018, up 4.1% year-on-year. The R&D ratio reached 6.8%,
close to its average level over the 2009-2014 period.

85

ISRAEL AEROSPACE INDUSTRIES (IAI)KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator

 Electronic warfare Commercial and military aircraft Unmanned aircraft systems (UAS) Missile systems and air defence systems
 Naval systems and platform Cyber defence
 Observation satellites

GOVERNANCE
ChairmanHarel Locker

Chief Executive Officer

Nimrod Sheffer

VP Elta Systems

Yoav Turgeman€ millions

2015

2016

2017

2018

Revenue

3 341

3 231

3 115

3 118

∆ (%) [$]*

-3,11%-3,53%-1,59%

4,60%

Defence (%)

75%

73%

70%

72%

Export (%)

78%

77%

76%

74%

Operatingprofit/loss

42

63

107

10

Operatingmargin (%)

1,27%

1,96%

3,44%

0,33%

Net income

8

20

72

-37

Order book

7 805

8 539

9 341

11 790

Employees

15 73415 35914 857~15 000*Variation based on revenue in US dollars.
See €/$ exchange rates p.7.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
Symbol

ARSP.B1

Listed on

TASEMarket Cap

Unlisted group

N/A

Major shareholders (as of 20.11.2019)
Israeli State

100%

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

EAE Aerospace Solutions

50%

Brazil

D.T.S. Ltda.

50%

Chile

Tiltan Systems Engineering

30%

IsraelPioneer UAV Inc.

50%

UnitedStatesHELA Systems Pvt Ltd

26%

India

26

Israel86

74

Export markets

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ISRAEL AEROSPACE INDUSTRIES (IAI)

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSElectronic warfare
ELL-8212, ELL-8222, ELL-8265, ELL-8260
and ELL-8270 systems for aircraft protection
Military aircraft
P600 Airbone Early Warning (AEW) aircraft(radar, electronic systems, etc.)
F/A-259 Striker multi-role fighter aircraft
ELM-2032 multimode airborne fire control radar
GPS Anti-Jam Navigation System
Unmanned aircraft systems
Heron TP (Eitan) MALE UAS
Bird-Eye tactical UAS (400/650/650D)
Searcher Mk III tactical UAS
Loitering munitions systems(Green Dragon/Harop/Harpy/Rotem)
Missile systems and air defence systems
Arrow (1/2/3) anti tactical ballistic missiles
LRSAM/MRSAM (Barak 8) defence system
Rampage air-to-ground missile
ELM-2084-MMR radar
Sky Capture command and control systems
for land-based air defence
Naval platform and systems
SuperDvora MK3 patrol boat
ELM-2248 and ELM-2258 multi-mission radars*Defence Research and Development Organization (India) **Elbit Systems group ***L3Harris Technologies group87

ISRAEL AEROSPACE INDUSTRIES (IAI)

STRATEGIC HIGHLIGHTS
Business trends

 Israel Aerospace Industries (IAI) is an entirely public company and one of Israel's leading defence firms. The
group generated a turnover of $3.7bn (€3.1bn) in 2018, up 4.6% in US dollar terms. Growth was mainly driven
by the Systems, Missiles & Space and Aviation Group divisions.

 At the end of 2017, IAI announced a reorganisation of its activities into four divisions (compared with six
previously), effective January 1, 2019: Elta Systems (defence electronics), Aviation Group (civil and military
aeronautics), Military Aircraft (UAVs) and Systems, Missiles & Space.

 IAI's defence business grew over the year, driven by the Systems, Missiles & Space division. The share ofdefence activities in total turnover increased from 70% to 72% during 2018.

Home market

 IAI generated 26% of its revenue in its domestic market in 2018 (+4 percentage points compared to 2015).
 The Israeli Air Force announced its intention to strengthen its fleet of Heron TP UAVs, which are developed
and produced by IAI. The missions carried out by these drones include intelligence gathering, surveillance andtarget identification.

 In August 2018, the Israeli Navy selected IAI's Barak 8 defence system to equip its future Sa'ar-6-classcorvettes. The system will in particular enable Israel to monitor and defend its exclusive economic zone (EEZ)
and its marine and coastal facilities.

Export markets

 The group generates about three quarters of its turnover from exports (74% in 2018). It has a strong presencein Asia, benefitting in particular from good diplomatic relations between Israel and India, and is increasingly
targeting Africa and South America.

 In June 2018, IAI entered into a partnership with Airbus DS Airborne Solutions (a German subsidiary of Airbus)

to lease 5 MALE Heron TP UAVs and 4 ground control stations to the Bundeswehr for a period of 9 years.
Worth $600m (€508m) for IAI, the agreement provides for Airbus DS Airborne Solutions to be responsible for
operational support and maintenance of the drones.

 In October 2018, the group signed a $777m (€679m) contract with the Indian Navy to supply the Barak 8

defence system for 7 of its vessels. The deal follows a previous $630m (€558m) contract signed in 2017 for thesame equipment. In 2019, two new contracts for a total value of $143m (€130m) were signed with the Indian
Navy for the supply of Medium Range Surface-to-Air Missile (MRSAM) naval systems.

 In October 2018, IAI won a $550m (€466m) contract with an undisclosed customer from an Asian country(believed to be India's ground forces) to supply its Sky Capture system (3D tracking radar, 3D search radar andnavigation system).

 In 2019, IAI joined forces with Lockheed Martin to offer a radar solution to the U.S. Army as part of the Lower
Tier Air and Missile Defense Sensor (LTAMDS) programme. The group also entered partnerships with Embraer
to offer the P600 AEW, a surveillance aircraft based on Embraer's Praetor 600 business jet, as well as with
Honeywell to develop a new GPS anti-jamming system. IAI is also partnering with the Czech Republic's Aero
Vodochy to develop the new F/A 259 Striker tactical support and observation aircraft.

Technology and Innovation

 At the 2018 Eurosatory, IAI and IMI Systems (formerly Israel Military Industries, an Israeli weapons manufacturer

recently acquired by Elbit Systems) unveiled Rampage, a new air-to-ground precision missile that can hit targets
more than 150 km away. The missile is intended for the Israeli Army and went into production in early 2019.

88

IVECO DEFENCE VEHICLESKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator
Defence subsidiary of CNH Industrial N.V.

 Military vehicles (light multi-role vehicles,
armoured and amphibious vehicles,
main battle tank) Civil security vehicles

GOVERNANCE
Director IVECO Brand

Gerrit Marx

President and CEO
Iveco Defence Vehicles

Vincenzo Giannelli

OWNERSHIP STRUCTURE€ millions

2015

2016

2017

2018

Revenue

235

343

337

N/A

∆ (%)

-

46,08%-1,63%-

Defence (%)

100%

100%

100%

N/A

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

9

12

1

N/A

Operatingmargin (%)

3,77%

3,37%

0,33%

N/A

Net income

-3

-3

-7

N/A

Order book

N/A

N/A

N/A

N/A

Employees

N/A

N/A

N/A

N/A

REVENUE BY BUSINESS LINES (%)

SymbolListed on

Unlisted subsidiaryMarket Cap
Major shareholders (as of 20.11.2019)
CNH Industrial

N /A

100%

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

Consorzio Iveco
Oto-Melara

50%

Italy
N/A

89

IVECO DEFENCE VEHICLES

Armoured and multi-role vehicles
Centauro II and Freccia armoured vehicles
8x8 Superav amphibious armoured vehicle
6X6 VBTP amphibious armoured vehicle
4x4/6x6 PUMA light armoured vehicles
4x4 MPV Medium Protected Vehicle
4x4 VTM multi-role tactical vehicle
Tactical and logistic wheeled vehicles
8x8 PPT tactical vehicle
MUV Military Utility Vehicle
and M40.15 WM Torpedo light range
8x8 M1250.70T WM tactical vehicle
TRAKKER and MLL logistic vehicles
Light multi-role vehicles
LMV Light Multi-role Vehicle
LMV 2 Light Multi-role Vehicle*KNDS group**CNH Industrial group90S
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*

Cr

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Ariete main battle tank

BA
E

Le
o
Main battle tankSy
KM stemWs

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSIVECO DEFENCE VEHICLESSTRATEGIC HIGHLIGHTS
Business trends

 Iveco Defence Vehicles is the military vehicles subsidiary of Italian industrial vehicle manufacturing company
Iveco, itself a division of the Dutch-based conglomerate CNH Industrial (CNHI) that was created by the 2013
merger between Fiat Industrial and its U.S. subsidiary CNH Global. In addition to its defence business, CNH
Industrial is involved in the manufacture of agricultural and construction machinery.

 Iveco Defence Vehicles generated approximately €340m in revenue in 2018, less than 2% of CNH Industrial's
total turnover.

 In early 2019, CNH Industrial reorganised its activities into 5 branches: Agriculture, Commercial and Specialty

Vehicles (which includes Iveco Defence Vehicles), Construction, Powertrain and Financial Services. Following
the reorganisation, Gerrit Marx was appointed President of the Commercial and Specialty Vehicles branch inplace of Pierre Lahute.

 A few months later, the conglomerate announced it would split in two independent entities, spinning off its

commercial vehicle brands and powertrain business into a separate company which will be publicly listed, while
the remaining company will retain its agricultural, construction and special vehicles activities (including Iveco
Defence Vehicles). The restructuring is part of the "Transform 2 Win" plan, which aims to reduce operating costs
and increase the efficiency of the group's asset base. The separation is expected to be completed by the endof 2022.

Home market

 Iveco Defence Vehicles is a major supplier of land vehicles to the Italian Army, in particular through the Iveco-Oto

Melara Consortium (CIO) which it established in 1985 with Leonardo on equal participation of 50%. Through
CIO, Iveco Defence Vehicles participates in the production of 136 Centauro II wheeled armoured vehicles for the
Italian Army (€159m contract signed in July 2018, of which €65m relating to Iveco Defence Vehicles).

 In late 2018, Iveco Defence Vehicles delivered a first batch of 34 Lynx 2 Light Multi-role Vehicles (LMV) to the
Italian Army. The contract provides for the delivery of 400 units.

Export markets

 Iveco Defence Vehicles is one of the main beneficiaries of the Brazilian Army's infantry vehicle fleet renewal

programme. The company is particularly benefitting from the Guarani programme launched in 2007, which aims
to replace the Urutu armoured personnel carriers (APC) and Cascavel armoured cars. In 2013, Iveco Defence
Vehicles inaugurated the Sete Lagoas industrial site in Brazil, where the future vehicles of the programme will
be produced. In 2019, the group delivered the 400th amphibious APC to the Brazilian Army (€2bn contract won
in 2009).

 As a partner of BAE Systems in the Amphibious Combat Vehicle (ACV) programme, Iveco Defence Vehicles isinvolved in providing amphibious assault vehicles to the United States Marine Corps. The vehicles are produced
at several industrial sites in the United States.

 Iveco Defence Vehicles also supplies Trakker trucks to the German and Swiss Armed Forces as well as lightarmoured vehicles to the Norwegian Army.

 In September 2019, Iveco Defence Vehicles won a new contract from the Danish Ministry of Defence to deliver
1,275 medium multi-role protected vehicles from 2022 through 2026.

Technology and Innovation

 At Eurosatory 2018, Iveco Defence Vehicles unveiled its innovations for multi-role vehicles as well as tacticaland logistics vehicles. Among the models on display were a lightweight 4x4 multi-role vehicle, the new Military
Utility Vehicle (MUV), the High Mobility 8x8 as well as the Eurocargo 4x4 and Trakker 8x8 trucks.

91

KAWASAKI HEAVY INDUSTRIES (KHI)KEY FIGURES (Fiscal year ended: March 31st)

BUSINESS AREAS
Plateform manufacturer and systems integrator

 Commercial and military aircraft and helicopters Naval shipbuilding Railway construction
 Energy
 Offshore Space Precision machinery
GOVERNANCE
Chairman
Chief Executive Officer

Shigeru Murayama
Yoshinori Kanehana€ millions

2015-16

2016-172017-18

2018-19

Revenue

11 62412 787

12 13012 420∆ (%) [JPY]*

3,70%-1,44%

3,65%

1,30%

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

59%

57%

58%

57%

Operatingprofit/loss

724

387

431

499

Operatingmargin (%)

6,23%

3,03%

3,55%

4,01%

Net income**

347

221

223

214

Order book

13 242

11 281

12 261

12 743

Employees

35 47134 60535 12735 805*Variation based on revenue in local currency.
See €/JPY exchange rates p.7.
**Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolListed onMarket Cap (MJPY)

7012
JPX
430 000

22
16
29

Major shareholders (as of 20.11.2019)
Capital Research & Management Co.
(World Investors)
Nomura Asset Management Co., Ltd.

3,76%

Nippon Life Insurance Co.

3,44%

DWS Investments (UK) Ltd.

2,64%

Mitzuho Financial Group, Inc.

2,50%

Enseada Indústria Naval
S.A.

6

5

8

Aerospace Systems
Motorcycle & Engine
Energy System& Plant Engineering
Precision Machinery& Robot

Rolling Stock
Ship& Offshore Structure
Other

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATES
Name

14

3,90%

%

Country

31,09%

Brazil

24

43

15

7
Japan
North America
Asia
92

11
EuropeRest of the Worldorp
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KAWASAKI HEAVY INDUSTRIES (KHI)

Military aircraft
P-1 maritime patrol aircraft
C-2 transport aircraft
T-4 intermediate trainer
F-2A/B fighters(based on Lockheed Martin's F-16 aircraft)*
Maintenance for E-2C Hawkeye
airborne early warning and control aircraft
Maintenance for C-130H transport aircraft
Maintenance for KC-767
tanker transport aircraft
Military helicopters
MCH-101 transport helicopter**OH-1 light observation helicopter
CH-47 JA transport helicopter**Submarine
Soryu-class submarine
Propulsion system
T55 turbofan engine (CH-47 JA)***Co-production**Built under licence***Saab AB group

93

M

IH

IC

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSKAWASAKI HEAVY INDUSTRIES (KHI)

STRATEGIC HIGHLIGHTS
Business trends

 Kawasaki Heavy Industries (KHI) is a Japanese conglomerate of more than 50 companies operating in various

sectors such as heavy equipment, shipbuilding, aerospace (including commercial aircraft built in partnershipwith Boeing and Embraer), and defence, among others.

 Most of KHI's defence activities are concentrated within its Aerospace Systems (military aircraft and helicopters)
and Ship & Offshore Structure (submarines) divisions.

 The group's revenue increased for the second consecutive year in 2018-2019 (+1.3%), reaching JPY 1,595bn(€12.4bn). Growth was mainly driven by the Precision Machinery & Robot and Motorcycle & Engine divisions(+23% and +25% growth in local currency, respectively). The Aerospace Systems division, the group's largest
division by sales, posted a decline in sales (-5.5%), partly due to lower orders from the Japanese Ministry of
Defense.

Home market

 KHI is a key supplier to the Japanese Armed Forces. The group is in particular the prime contractor for the longrange cargo aircraft (C-2) and maritime patrol aircraft (P-1) programmes and participates, alongside Mitsubishi
Heavy Industries (MHI), in the co-production of Soryu-class submarines.

 The year 2019 saw the delivery of the 10th Soryu-class submarine (named Shoryu) to the Japanese Maritime
Self-Defense Force (JMSDF). It is the 5th submarine of the Soryu-class manufactured by KHI in alternation with
MHI. The 11th unit (named Oryu and built by MHI) will be the first to be equipped with lithium-ion batteries.

 In the field of military aeronautics, KHI is set to receive new orders from the Japan Air Self-Defense Force(JASDF), which has acquired some 30 C-2 long-range cargo aircraft, of which only 8 units have already beendelivered. The group could also be commissioned to build new P-1 maritime patrol aircraft to replace Lockheed
Martin's P-3Cs. JMSDF currently operates 15 P-1 maritime patrol aircraft delivered by KHI.

 In the military helicopter segment, KHI has been producing CH-47 J/JA transport helicopters for the Japan

Ground Self-Defense Force (JGSDF) and JASDF under licence from Boeing since 1984. In 1992, KHI became
prime contractor for the first helicopter entirely designed in Japan, the OH-1 observation helicopter. JGSDF will
acquire 38 such helicopters.

 The group is also in charge of the maintenance of JASDF military aircraft (including E-2C Hawkeye airborne early
warning and control aircraft, C-130H transport aircraft, KC-767 tanker transport aircraft).

Export markets

 In 2014, Japan modified its regulation to lift a ban on arms exports. In this context, KHI intends to win new
customers by offering the P-1 maritime patrol aircraft and the C-2 transport aircraft to foreign armed forces.

 The group in particular intends to propose the P-1 for the French-German project to develop a future maritime
patrol aircraft (Maritime Airbone Weapon System, or MAWS), which is intended to replace the French Navy's
ATL 2 as well as the German Navy's P-3 C Orion maritime patrol aircraft.

 KHI also proposed the C-2 transport aircraft to New Zealand as part of the country's Future Air Mobility Capability(FAMC) programme, which is to replace its Lockheed Martin C-130Hs and Boeing B757-200Cs. The group isfurthermore said to be in discussions with the United Arab Emirates.

Technology and Innovation

 The Group's R&D expenses amounted to JPY 48.7bn (€380m) in 2018-2019, a 7% year-on-year increase inlocal currency. The R&D ratio reached 3.1%.

94

KMW + NEXTER DEFENSE SYSTEMS (KNDS)

KEY FIGURES (Fiscal year ended: December 31st)*

BUSINESS AREAS€ millions

2015

2016

2017

2018

 Main battle tanks, armoured vehicles,

Revenue

-

2 624

2 648

2 200

∆ (%)

-

-

0,91%

-16,92%

 Weapon systems and artillery systems
 Ammunition
 Defence and security robotics
 Electronic equipment
 Simulation and training solutions

Defence (%)

-

100%

100%

100%

Export (%)

-

N/A

N/A

N/A

Operatingprofit/loss

-

277

303

N/A

Operatingmargin (%)-

10,55%

11,43%N/A

Net income

-

190

211

N/A

GOVERNANCE

Order book

-

8 600

6 500

7 800

Chairman of the Supervisory
Board
Co-President of the Directorate
Co-President of the Directorate

Employees

-

6 800

7 329

7 745

Systems architect-integrator
infantry fighting vehicles

Christian JourquinFrank Haun
Stéphane MayerOWNERSHIP STRUCTURE*New entity combining KMW and Nexter Defense Systems officiallyformed in December 2015.

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap
Major shareholders (as of 20.11.2019)

N/A

Wegmann & Co. GmbH50%

Giat Industries S.A.

50%

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

CTA International

50%

FranceTNS-MARS

37,5%France

NEXTER

N/A

KMW
Projekt System& Management GmbH50%

Germany

ARTEC GmbH36%

Germany

95

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KMW + NEXTER DEFENSE SYSTEMS (KNDS)

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSNEXTER
KMW
Armoured vehicles
Main Ground Combat System(MGCS, Franco-German project)
8x8 VBCI armoured infantry fighting vehicle
6x6 Jaguar reconnaissance and combat
armoured vehicle
6x6 Griffon multi-role armoured vehicle
4x4 Serval multi-role light armoured vehicle
6x6 Titus®** armoured vehicle
Leopard 2 main battle tank family
8x8 Boxer multi-role armoured vehicle
4x4 Dingo 2 armoured vehicles family
Weapon systems and artillery systems
Common Indirect Fire System (CIFS, joint programme)
Caesar 155mm self-propelled gun-howitzer
40mm Cased Telescoped Armament System(40 CTA International)
PzH 2000 155mm self-propelled howitzer
FLW (100, 200 and 500) remote controlled
light weapon stations
Ammunition
Bonus Mk II 155mm artillery shell
76mm, 90mm, 105mm and 120mm shell for gunsand 20mm, 25mm and 30mm ammunition
for artillery systems
20mm, 40mm, 76mm, 100mm and 127mm
naval ammunitionSPACIDO course correction system****Joint venture between Iveco Defence Vehicles and Leonardo **Rights reserved***Partnership between Junghans T2M (a joint venture between Thales and Diehl Defence), Nexter Munitions and Zodiac Aerospace (Safran)96

KMW + NEXTER DEFENSE SYSTEMS (KNDS)STRATEGIC HIGHLIGHTS
Business trends

 KNDS was formed by the July 2015 merger between Germany's KMW and France's Nexter manufacturers. A
key supplier to France and Germany in the land segment and a major European player in the fields of wheeled
and tracked armoured vehicles, artillery systems and ammunition, the group generated €2.2bn in revenue in2018 (compared with €2.6bn in 2017).

 Although Nexter and KMW are each still largely focused on their respective programmes launched before themerger, KNDS is now developing joint programmes, such as the French-German MGCS (Main Ground Combat
System, a future heavy combat tank) programme, in which Rheinmetall Defence is a partner; the CIFS (Common
Indirect Fire System, a future artillery system) programme; and the development of the Euro Main Battle Tank
(EMBT), an export-oriented battle tank combining the respective expertise of the two manufacturers.

 In November 2018, Rheinmetall Defence announced its interest in acquiring Krauss-Maffei Wegmann GmbH& Co., the sole shareholder of KMW (which makes up 50% of KNDS). To succeed, the transaction would require
the consent of the French government, which owns the 50% share in KNDS through state-owned Nexter andis keen to maintain a balance between the French and the German part of KNDS.

Home markets (France, Germany) Along with Arquus, Texelis and Thales, Nexter participates in the French Army's Scorpion programme for thedevelopment and delivery of three new armoured vehicles with interconnected combat systems to enable
collaborative combat: the Jaguar, Griffon and Serval. 300 EBRC Jaguar, 1,872 VBMR Griffon and 978 VBMR
light Serval vehicles are to be delivered by 2030, half of which by 2025.

 In July 2019, Nexter announced it will invest €60m over three years in its Roanne site (central France) to support
the ramp-up in production of land combat platforms (from 170 vehicles per year in 2019 to 450 in 2022),
particularly for vehicles of the Scorpion programme.

 Germany awarded KMW a €300m contract to upgrade 101 Leopard 2A6 tanks to the 2A7V variant(modernisation of targeting system, firing control system, chassis, etc.) by 2026.

Export markets

 In June 2019, the French defence procurement agency (DGA) awarded Nexter a contract to supply

60 Jaguar EBRCs and 382 Griffon VBMRs to the Belgian Army from 2025 onwards, as part of an agreement
between France and Belgium for the Belgian CaMo (Motorised Capacity) programme. Nexter will receive€1.1bn for this contract and €500m will go to Belgian defence companies, including John Cockerill (formerly
CMI Defence) and FN Herstal, which will participate in the production of the vehicles.

 Nexter is said to be close to signing a contract worth an estimated €1.5bn with Qatar for the supply of 490 VBCI
armoured vehicles (Al Rayyan programme) in partnership with MBDA, Thales and Kongsberg.

 In December 2018, KMW signed a contract worth nearly €500m with Hungary to supply 44 Leopard 2A7+
tanks, 24 PzH 2000 self-propelled howitzers, as well as 12 Leopard 2A4 second-hand tanks for training (Zrínyi
2026 programme). Deliveries are expected to start from 2020. In early 2019, KMW also received an order from
Norway for six Leguan bridge laying systems on a Leopard 2 chassis and training simulators, with deliveries from2022 (contract value undisclosed).

Technology and Innovation

 Nexter devoted 16% of its turnover to R&D in 2018 (approximately €150m).
 A contract for a system architecture study of the future French-German Main Ground Combat System (MGCS)
could be awarded in early 2020 to the three contractors involved in the programme (Rheinmetall Defence, KMW
and Nexter).

97

KONGSBERGKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier€ millions

2015

2016

2017

2018

 Missile and air defence systems
 Commercial and military naval systems
 Defence systems (turrets and CMS) C4ISR and communication systems
 Space and aircraft systems

Revenue

1 903

1 705

1 554

1 499

∆ (%) [NOK]*

2,52%-6,97%-8,55%-0,75%

Defence (%)

35%

40%

44%

42%

Export (%)

83%

83%

81%

81%

Operatingprofit/loss

105

74

83

98

Operatingmargin (%)

5,54%

4,37%

5,33%

6,57%

Net income**

84

70

59

73

Order book

2 041

1 862

1 588

1 737

Employees

7 688

7 159

6 830

6 842

(aerostructures, propulsion)

GOVERNANCE
Chairman
Chief Executive Officer
President Kongsberg Defence& Aerospace

E. Reiten
G. Håøy
E. LieOWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolListed on*Variation based on revenue in local currency.
See €/NOK exchange rates p.7.
**Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)
KOG

Oslo Stock Exchange

Market Cap (NOKm)

25 14442

53

Major shareholders (as of 20.11.2019)
Norwegian State

50%

Folketrygdfondet

6,65%

FIL Investment Advisors (UK) Ltd.

5,65%

Fidelity Management & Research Co.

3,53%

MP Pensjon PK

3,03%

MAIN JOINT VENTURES AND ASSOCIATES

5
Kongsberg Maritime
Kongsberg Defence& Aerospace

Other

REVENUE BY REGION (%)

Name

%

Country

Kongsberg Satellite
Services AS

50%

NorwayPatria Oyj

49,9%Finland

Kta Naval Systems

50%

NorwayAIM Norway

50,1%

Norway

29

27

19
1

1

4

NorwayNorth America
Europe (excl. Norway)
Asia
98

19

AfricaSouth America
Australia

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KONGSBERG

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Defence systems
PROTECTOR family of Remote
Weapon Stations (RWS, MCT, Lite)
Missile systems
Penguin anti-ship missile
Naval Strike Missile (NSM)
Joint Strike Missile (JSM)
Air defence systems
National Advanced Surface-to-Air
Missile System (NASAMS)
NSM based Coastal Defence System(NSM CDS)
C4ISR and communication systems
Kongsberg Tactical Communication System(K-TaCS)
NATO Alliance Ground Surveillance (AGS)
System Master Archival/Retrieval Facility
information (SMARF)
Naval systems
MCM C2 tactical system
PROTEUS training solutions
MSI-90U Mk2 submarine
combat management system
Military aircraft
F-35 programme(fuselage parts, landing gear, JSM carriage)*Innovation Systems division, formerly Orbital ATK

99

KONGSBERGSTRATEGIC HIGHLIGHTS
Business trends

 Kongsberg is a Norwegian company that provides technology systems for the maritime, defence and aerospaceindustries. The Norwegian State owns a 50% capital interest in the group, whose defence products include
missile systems, air defence systems and naval systems. Kongsberg's revenue amounted to NOK 14.4bn(€1.5bn) in 2018, down 0.5% year-on-year due to a decline in activity in the Kongsberg Defence & Aerospace
division (-3.6%), which accounted for 42% of total revenue.

 In early 2019, Kongsberg completed the acquisition of Rolls-Royce's Commercial Marine business, which was
fully integrated into the Kongsberg Maritime division. The estimated cost of the acquisition is £500m (€565m).

 In May 2019, Kongsberg Defence & Aerospace acquired Aerospace Industrial Maintenance Norway(AIM Norway), a company that maintains the Royal Norwegian Air Force's (RNoAF) aircraft and helicopters.
AIM Norway will be 50.1% owned by Kongsberg Defence & Aerospace and 49.9% by Patria Oyj, a Finnish
aerospace and defence company in which Kongsberg Defence & Aerospace owns a 49.9% stake.

Home market

 In July 2019, an industrial consortium led by Kongsberg Defence & Aerospace and comprising Thales Norway,

Teleplan Globe and IBM, signed a strategic partnership agreement with the Norwegian Defence Material
Agency to develop and provide solutions for the processing and dissemination of surveillance information to theNorwegian Army and NATO allies.

 Kongsberg also continued a testing phase, which is expected to last until 2023, for the integration of the anti-ship
Joint Strike Missile (JSM) into Lockheed Martin's F-35 fighter aircraft, as part of a programme funded by the
Norwegian government.

Export markets

 In 2018, new export contracts were signed for the Naval Strike Missile (NSM), which is jointly promoted byKongsberg and Raytheon, including a €124m contract with the Royal Malaysian Navy to equip 6 ships. The
NSM was also chosen to equip the U.S. Navy's LCS frigates. A first contract worth $14.8m (€13m) was signed
in 2018, followed by a second worth $47.6m (€42.2m) in 2019. The total contract value could reach $847.6m(€750m) if all options are exercised.

 Kongsberg further strengthened its positions in Qatar. After having been selected in 2018 to fit Nexter's

490 VBCI 2 vehicles ordered by the Emirati country with remotely operated turrets, the Norwegian group in
2019 won a NOK 5.6bn (€583m) contract to supply the National Advanced Surface-to-Air Missile System(NASAMS) co-developed with Raytheon and integrating the U.S. defence company's AIM-120 AMRAAM
missile. Several other NASAMS export contracts were also won, including in Lithuania, Indonesia and Australia.

 In March 2019 , the anti-ship Joint Strike Missile (JSM) was chosen by Japan to equip its fleet of F-35 fighter
aircraft.

 In July 2019, Konsgberg signed a NOK 2bn (€208m) contract with Lockheed Martin to supply components forover 500 F-35 fighter aircraft.

 In September 2019, Kongsberg signed a new $42m (€37.5m) contract with the U.S. Army to supply remotely

operated turrets as part of the Common Remotely Operated Weapon Station (CROWS) programme, inparticular designed to fit Stryker infantry fighting vehicles and M1 Abrams tanks. Total purchase orders now
stand at $390m (€348m).

Technology and Innovation

 Kongsberg Defence & Aerospace's R&D expenditure reached NOK 98m (€10.5m) in 2018.
 At the 2019 SubCon International Submarine Conference, Kta Naval Systems, a joint venture of Kongsberg,
TKMS and Atlas Elektronik, unveiled ORCCA, a new combat system for SSK submarines.
100

KOREA AEROSPACE INDUSTRIESKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017

2018

 Commercial and military aircraft Military helicopters
 UAV
 Aerostructures
 Commercial and military aircraft MRO

Revenue

2 419

2 294

1 623

2 145

∆ (%) [KRW]*

31,31%-3,07%-33,17%34,44%

Defence (%)

N/A

N/A

38%

38%

Export (%)

61%

61%

61%

59%

Operatingprofit/loss

302

249

-164

113

Operatingmargin (%)

12,49%

10,86%-10,08%5,25%

Net income**

206

206

-184

44

Order book

7 313

7 858

6 944

4 763

Employees

3 512

3 905

3 905

4 142

and modernisation

 Spatial
 Training
GOVERNANCE
Chief Executive Officer
Head of operations

Ahn Hyun-ho
Hyun-Dae Shin

*Variation based on revenue in local currency.
See €/KRW exchange rates p.7.
**Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)*

OWNERSHIP STRUCTURE (as of 20.11.2019)
Symbol

A047810

Listed on

Korea Exchange

Market Cap (KRWbn)

3 694

39

61

Major shareholders (as of 20.11.2019)
South Korean State

26,40%

National Pension Service of Korea

5,34%

The Vanguard Group, Inc.

2,54%

BlackRock Asset Management
North Asia Ltd.

2,30%

BlackRock Fund Advisors

1,81%

<1
Government defense businessand aircraft export businessAirframe part business
Other*Revenue distribution based on total sales excluding eliminations.

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

KAI-EC

51%

South
Korea

38
41

10

11

<1
South Korea
Asia(excl. South Korea)
101

North America
EuropeSouth America

Military aircraft
KT-1 basic trainer
T-50 advanced trainer
KA-1 tactical control aircraft
FA-50 light fighter aircraft
KF-X fighter aircraft (under development)
Military helicopters
KUH Surion twin-engine utility helicopter
Single-engine Light Attack Helicopter (LAH)
Unmanned Aerial Vehicle
Night Intruder-600 Vertical Take-Off and Landing(NI-600 VT) unmanned helicopter
Aerostructures
F-15 and AH-64 programmes (fuselage)
MRO & modernisation
KT-1,KA-1, T-50 and FA-50 aircraft MRO
ROKN's P-3 maritime patrol aircraft MRO
and modernisation
US Navy's H-53 helicopters and USAF's F-16 aircraft MRO
ROKAF's C-30 transport aircraft modernisation
SpatialEarth observation radar satellites(425 Project)
Training systems
T-50, TA-50 and FA-50 aicraft training systems

102

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g

H

in

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PT

Ai

rb
us
Lo
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he
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M
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ar
ti

n

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

In
do
an
ne
w
si
ha
a
Th
S
y
al
es stemAl
en s Ciao
S p rp o
ra
ac
ti o
e

n

KOREA AEROSPACE INDUSTRIESKOREA AEROSPACE INDUSTRIESSTRATEGIC HIGHLIGHTS
Business trends

 Korea Aerospace Industries (KAI) is a major aerospace and defence company operating both in civil aviation(aerostructure parts for Airbus and Boeing) and military aviation (future South Korean KF-X fighter aircraft,
KUH Surion transport helicopter, etc.). The group also operates in the space sector. Its turnover reached KRW
2,786bn (€2.1bn) in 2018. Defence activities accounted for 38% of sales.

 In 2018, KAI acquired TASS Inc, a company that designs and manufactures avionics and high-tech militaryequipment for the aerospace and defence industries.

 KAI announced that it recruited more than 700 employees in 2018 to support the joint South Korean andIndonesian fighter aircraft development programme (KF-X programme).

 In September 2019, Ahn Hyun-ho succeeded Kim Jo-won as Chief Executive Officer.
Home market

 KAI is a key supplier to the South Korean Army. Since 2015, the company has in particular been the prime

contractor for the KF-X programme (future South Korean fighter aircraft) alongside the South Korean Agency
for Defense Development (ADD). Designed to replace the South Korean and Indonesian Air Forces' respective
fleets of fighter aircraft, the KF-X fighter aircraft (named IF-X in Indonesia) is expected to be comparable toa 5th-generation aircraft. Around 60% and 20% of the programme will be funded by the South Korean andIndonesian governments, respectively, while South Korean defense companies will make 20% of contribution.

 KAI is also in charge of developing the Light Attack Helicopter (LAH) and Light Civil Helicopter (LCH). Produced

as part of the South Korean government's civil and military helicopter development programme, LAH and LCH
share more than 60% of their components. The LAH is expected to enter service in 2023. The LCH will be
operational in 2021. As the main partner, Airbus Helicopters is co-developing and co-manufacturing the aircraftwith KAI and will receive 50% in value from the LCH programme and 20% from the LAH programme.

 Under a contract signed in 2017, KAI is also to deliver 30 KUH-1 Surion transport helicopters (designed inpartnership with Airbus) to the South Korean Navy by 2023.

 In the space sector, KAI participates in the 425 Project programme (radar observation satellites for the ADD)
alongside Thales and Hanwha Systems Corporation (HSC). As part of this programme, Thales will train KAI and
HSC teams in the design of Synthetic Aperture Radar (SAR) technology.

Export markets

 With 38% of sales, Asia is the group's main export market. KAI aims to strengthen its international presencewith the T-50 and KT-1 training aircraft, the FA-50 fighter aircraft (based on the T-50), and the KUH Surion
transport helicopter.

 In 2018, KAI signed two contracts with the Indonesian Air Force to supply three additional KT-1B trainer aircraft- in addition to the 12 aircraft already in service - and to upgrade the T-50i trainer aircraft (a variant of the T-50
trainer aircraft). The total value of the contracts amounts to approximately KRW 100bn (approximately €77m).

 T-50 training aircraft are also in service in Thailand (T-50TH variant). In 2019, KAI won a modernisation contract
for the Thai Air Force's T-50THs (KRW 62.3bn, or €47.8m). The group is also continuing its efforts to export the
T-50 to Malaysia and Argentina.

 KAI and Lockheed Martin's joint offer for the future USAF T-X training aircraft was not accepted. The tender was
won in August 2019 by Boeing (in partnership with Saab AB), which will supply the T-7A Red Hawk.

Technology and Innovation

 In 2019, the group successfully completed the flight tests of the NI-600VT UAV.

103

L3HARRIS TECHNOLOGIES (L3 TECH. AND HARRIS CORP. MERGER)KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
 ISR systems
 Electronic warfare Communication systems
 Avionics
 Air traffic control
 Space (navigation payloads)
 Training
GOVERNANCE
Chairman and CEO
Chief Operating Officer
Chief Financial Officer

2017€ millions

Systems integrator/equipment supplier(L3 Technologies)

2017**

2018***(Harris Corporation)(L3Harris
Technologies)

14 018

Revenue

8 472

5 221

∆ (%) [$]*

3,94%

-1,54%-

Defence (%)

81%

74%

N/A

Export (%)

23%

22%

23%

Operatingprofit/loss

912

950

~2 000Operatingmargin (%)

10,77%

18,19%~14,8%N/A

Net income****

599

489

Order book

7 405

5 333

N/A

Employees

31 00017 000~50 000

William M. Brown
Christopher E. Kubasik
Jesus Malave* Variation based on revenue in local currency.
See €/$ exchange rates p.7.
**Fiscal year ended: June 30th.
***2018 financial statements consolidated after merger.
****Net income attributable to shareholders.

OWNERSHIP STRUCTURE (as of 20.11.2019)

REVENUE BY BUSINESS LINE (%)

Symbol

LHX

Listed on

NYSE

Market Cap ($m)

44 90924

The Vanguard Group, Inc.

8,08%

T. Rowe Price Associates, Inc.
(Investment Management)

6,36%

SSgA Funds Management, Inc.

4,20%

Henderson Global Investors Ltd.

3,08%

Iridian Asset Management LLC

3,06%

MAIN JOINT VENTURES AND ASSOCIATES

23

Integrated Mission 		
Systems
Space and Airbone 		
Systems

Communication Systems
Aviation Systems

REVENUE BY REGION (%)

Name

%

Country

IBL LLC

33%

UnitedStatesAviation Communication &Surveillance Systems LLC(ACSS)

70%

UnitedStatesAYESAS

40%

Turkey49%

UnitedStatesGlobal Military Aircraft
Systems LLC (GMAS)

23

30

Major shareholders (as of 20.11.2019)77

United States

104

23

Export markets

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

L3 Technologies
Harris Corporation
ISR systems
SPYDR and SPYDR II tactical aircraft
EC-130H USAF programme (systems integrationand maintenance of 14 USAF’s EC-130H)
MX-15 electro-optical and infrared sensors
AN/SPS-48G surveillance radarSpace
Navigation payloads for GPS III satellite
Electronic warfare
ALQ-214 IDECM F/A-18 countermeasure system
Advanced Integrated Defensive Electronic Warfare Suite(AIDEWS)
Avionics
F-15 and F/A-18 avionics
USAF's C-130 Avionics Modernization Programme (AMP)
Communication systems
Tactical SATCOM terminals (Panther, Hawkeye, Cheetah)
Xenon Ion propulsion system (702sp satellite)
hC2 Battlefield Management System (BMS)
Falcon family of radios
Training
USAF’s B-2 training system programme*Formerly Rockwell Collins, UTC group

105

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Inm
ars
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L3HARRIS TECHNOLOGIES (L3 TECH. AND HARRIS CORP. MERGER)

L3HARRIS TECHNOLOGIES (L3 TECH. AND HARRIS CORP. MERGER)

STRATEGIC HIGHLIGHTS
Business trends

 L3Harris Technologies was formed by the June 2019 merger between U.S. defence companies

L3 Technologies ($9.6bn, or €8.5bn, in revenue in 2017) and Harris Corporation ($5.9bn, or €5.2bn, in revenue
in 2017). Former Harris Corp. shareholders hold 54% of the new entity and L3 shareholders the remaining 46%.
With nearly $17bn (€14bn) in revenue in 2018 and 50,000 employees, L3Harris Technologies ranks as the 6thlargest defence group in the United States and one of the top 10 worldwide.

 William M. Brown, former CEO of Harris Corporation, was appointed Chairman and CEO of L3Harris
Technologies, while Christopher E. Kubasik, former CEO of L3 Technologies, became Chief Operating Officer.

 The group's activities are organised around 4 divisions: Integrated Mission Systems (ISR systems, electrooptical sensors), Space and Airborne Systems (cyber defence, defence electronics), Communication Systems(tactical communications solutions) and Aviation Systems (aviation products, training systems).

 In September 2019, L3Harris completed the sale of Harris Corporation's Night Vision business to Elbit Systemsof America, the Israeli group's U.S. subsidiary, for $350m (€311m). The transaction was part of the regulatory
process imposed by U.S. competition authorities to approve the L3 Technologies-Harris merger.

Home market

 The U.S. market is crucial for L3Harris Technologies (77% of revenue). The U.S. Department of Defense alone
accounted for 56% of the group's sales in 2018.

 In 2019, Harris Corporation was awarded a $212m (€188m) contract to supply electronic jammers for the
U.S. Navy's F/A 18 Hornet and Super Hornet fighter aircraft as well as those exported under FMS procedures.
Harris Corporation was also selected by the United States Marine Corps to upgrade its AN/PRC-117G radio
fleet, a contract worth $75m (€67m).

 L3 Technologies also won new contracts from the U.S. Air Force, including a $120m (€107m) contract to train
pilots, maintainers and weapons-loading personnel of the B-2 bomber fleet, as well as a $499m (€444m)
contract for an avionics upgrade of 176 C-130H transport aircraft.

Export markets

 The group generated 23% of its sales from exports in 2018. Australia, Canada and the United Kingdom areamong the group's main international markets.

 In a tender for the design of 15 new frigates for the Royal Canadian Navy (Canadian Surface Combatant (CSC)

programme), the Canadian government selected a joint bid led by Lockheed Martin Canada, in partnership withBAE Systems (which provided a design based on its Type 26 frigate that is being built for the U.K.), CAE, MDA,
L3 Technologies and Ultra Electronics. The ships will be built at Irving Shipbuilding’s Halifax Shipyard. As part ofthe bid, L3 will be providing the Integrated Platform Management System, integrated communication systems,
and electro-optical infrared (EO/IR) sensors, among others.

 The Royal Australian Air Force awarded L3 Technologies a contract worth approximately $1bn (€888m) to

supply four Gulfstream G550 aircraft - to be designated the MC-55A Peregrine - modified to integrate Airborne
Intelligence, Surveillance, Reconnaissance, and Electronic Warfare (AISREW) systems. L3 will also be involved
as a subcontractor in the Royal Australian Navy's SEA 5000 programme for the delivery of 9 Hunter-classfrigates, a contract for which BAE Systems was designated as the prime contractor.

 In June 2019, L3 Technologies and state-owned defence company Saudi Arabian Military Industries (SAMI) set
up a joint venture to cooperate on electro-optical and infrared systems projects in Saudi Arabia.

Technology and Innovation

 At the 2019 Defence & Security Equipment International (DSEI) arms fair held in London, L3Harris unveiled
the T4 multi-mission robotic system, a ground-based robot designed for security operations in restricted areas.
106LEONARDOKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017*

2018

 Aeronautics
 Defence electronics
 Helicopters Defence systems
 Space systems

Revenue

12 99512 00211 73412 2404,31%

GOVERNANCE
Chairman
Chief Executive Officer
Manufacturing and Program
Management Optimization Director

G. de Gennaro
A. Profumo
F. Barsotti

∆ (%)

1,81%

-7,64%-2,23%

Defence (%)

65%

64%

N/A

N/A

Export (%)

84%

82%

84%

85%

Operatingprofit/loss

884

982

844

715

Operatingmargin (%)

6,80%

8,18%

7,19%

5,84%

Net income**

487

505

277

509

Order book

28 79334 79833 50736 118

Employees

47 15645 63145 13446 462*2017 figures restated.
**Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)*

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolLDO

Listed on

31

Borsa Italiana

Market Cap (€m)

6 461

Major shareholders (as of 20.11.2019)
Ministry of Economy and Finance (Italy)

30,20%

Capital Research & Management Co.
(World Investors)

3,64%

Norges Bank Investment Management

2,87%

Fidelity Management & Research Co.

2,32%

45
24
<1
Electronics, Defence& Security Systems
Helicopters

Aeronautics
Other*Excluding revenue from Space Systems division (Telespazio andThales Alenia Space).

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

NHIndustries SAS

32%

FranceElettronica Spa

31,33%

Italy

Telespazio Spa

67%

Italy

Thales Alenia Space

33%

FranceMBDA SAS

25%

FranceEurofighter Jagdflugzeug
GmbH

21%

Germany

ATR

50%

FranceAvio Spa

25,88%

Italy

28
25

15
21

Italy
North America
Europe (excl. Italy)

107

11

United Kingdom
Rest of the World

I
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AB atioGnener
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or
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El
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Z

LEONARDO

KH

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Military aircraft and UAS
Tempest future fighter aircraft(sensors, electronics, avionics)
F-35 Lightning fighter aircraft (assembly**)
Eurofighter Typhoon fighter aircraft
M-345 and M346/T-100 advanced
trainer aircraft
C-27J Spartan and MC-27J Praetoriantactical airlifter
European MALE RPAS
nEUROn UCAV demonstrator(smart bomb bay, electrical system
and various subsystems)
Military helicopters
AW249 future attack helicopter
AW159 twin-engine multi-role helicopter (6t)
AW139M/MH-139 twin-engine
multi-role helicopter (6t)
NH90 twin-engine multi-role helicopter (11t)
AW101/MCH-101 three-engine helicopter(16t)
Weapons and artillery systems
Vulcano 127/64 lightweight naval gun
Black Shark heavyweight torpedo
and MU90 lightweight torpedo
Defence electronics
E-CAPTOR AESA radar (Eurofighter)
Raven ES AESA radar (Gripen JAS 39 E/F)
Kronos radar family*Innovation Systems division, formerly Orbital ATK **Designed for the Royal Netherlands Air Force and the Italian Air Force

108

LEONARDOSTRATEGIC HIGHLIGHTS
Business trends Leonardo (formerly Finmeccanica) is Italy's leading defence group. A platform manufacturer and systems

integrator, the group is organised into four divisions: Electronics, Defence and Security Systems (radars,
torpedoes and naval guns, etc.), Helicopters (civil and military aircraft), Aeronautics (combat, transport andtraining aircraft, etc.) and Space. The latter includes Leonardo's share in Telespazio (67% owned by Leonardo,
33% by Thales) and Thales Alenia Space (67% owned by Thales, 33% by Leonardo) which together form theSpace Alliance.

 Leonardo's turnover reached €12.2bn in 2018, up 4.3% year-on-year. The Helicopters division recorded thestrongest growth (+10.9%), driven by higher deliveries (177 units, compared with 149 in 2017).

 In January 2019, Leonardo completed the acquisition of the entire capital of Italian electronics company
Vitrociset (€163m in revenue in 2017, around 1,000 employees, of which 630 in Italy) for a total of €46m.

Home market

 Leonardo is one of the main suppliers to the Italian Armed Forces. The group participates in the design andproduction of aircraft and helicopters for Italy and collaborates in most of Fincantieri's programmes, in particularthrough their joint subsidiary Orizzonte Sistemi Navali. In 2018, it generated 15% of its turnover in its homemarket.

 In June 2019, the group signed a €300m contract with the Italian Air Force to supply thirteen M-345 training

aircraft (the first unit of which is due to be delivered in 2020), ground training systems, as well as logistics support
services for five years. Italy, which already ordered five M-345 aircraft in January 2017, could eventually order up
to 45 units to replace its fleet of MB-339 aircraft.

 In July 2018, the Italian Army awarded the Iveco Oto-Melara consortium (formed by Leonardo and Iveco

Defence Vehicles) a €159m contract (of which €92m for Leonardo) for the delivery of the first 10 Centauro II
tanks (including spare parts and logistics services) out of a total order of 136 units.

Export markets

 The group generated 85% of its revenue from exports in 2018, mainly to the United States and the United
Kingdom (40% of turnover), through its subsidiaries Leonardo DRS and Leonardo US Aircraft on the one handand Leonardo UK on the other.

 In September 2018, Leonardo and Boeing won the U.S. Air Force's tender to replace Bell Helicopter's (Textron)

UH-1N Huey transport helicopters. The contract, estimated at $2.4bn (€2.1bn), covers the supply of 84 aircraft
which are to be delivered by 2031. The two partners will provide the MH-139 helicopter, based on Leonardo's
AW139. The Italian group will be in charge of assembling the helicopters in the United States.

 In early 2019, the NHIndustries consortium (formed by Leonardo, Airbus Helicopters and Fokker Aerostructures)
signed a €1.4bn contract with Spain to supply 23 NH90 helicopters. In August 2019, the German Navy alsochose the NH90 to replace its 22 Westland Sea Lynx anti-submarine warfare helicopters.

 In September 2019, the British Ministry of Defence chose Leonardo UK and Thales UK to equip the RoyalAir Force's eight Shadow R1 intelligence aircraft with the DAS (Defensive Aids System) protection system.
Designed and produced in the United Kingdom, with a targeted initial operating capability from 2021, the DAS
system offers protection against the latest generation of infrared missiles.

Technology and Innovation

 The group's R&D expenses amounted to €1.44bn (11.8% of total revenue) in 2018, down 6.4% compared to2017.

 In September 2019, Leonardo's Polish subsidiary PZL Swidnik's and Poland's PGZ group unveiled a nextgeneration military helicopter concept called W-3, which is based on PZL Swidnik's PZL W-3 Sokół model.
109

LOCKHEED MARTINKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016**

2017**

2018

 Aeronautics (aircraft, helicopters, UAS) Missiles, guided weapons and missile defence Naval systems (surface ships,

Revenue

41 56042 71944 21245 522∆ (%) [$]*

1,17%

2,51%

5,65%

7,61%

Defence (%)

~90%

89%

88%

88%

Export (%)

N/A

27%

29%

28%

combat systems)
 Defence electronics and cybersecurity
 Space (satellites and launchers)

GOVERNANCE
Chairwoman and CEO

Marillyn A. Hewson

Executive VP Aeronautics
Executive VP
Rotary and Mission Systems

Michele Evans
Frank A. St. John

4 525

4 294

4 642

4 943

Operatingmargin (%)

10,89%

10,05%

10,50%

10,86%Net income

3 248

4 673

1 737

4 273

Order book91 46098 15787 984113 946

Employees

126 000

97 000100 000

105 000*Variation based on revenue in local currency.
See €/$ exchange rates p.7.
**2016 and 2017 figures restated.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolLMT

Listed on

NYSE

Market Cap ($m)

Operatingprofit/loss

26

110 366

40

Major shareholders (as of 20.11.2019)
SSgA Funds Management Inc.

18

15,40%The Vanguard Group Inc.

7,69%

Capital Research & Management Co.
(World Investors)

5,98%

Putnam LLC

5,27%

Wellington Management Co. LLP

4,14%

16
Aeronautics
Rotary & Mission Systems

MAIN JOINT VENTURES AND ASSOCIATESSpace
Missiles & Fire Control

REVENUE BY REGION (%)

Name

%

Country

AWE PLC

51%

United Kingdom

MEADS International Inc.

58%

United States

United Launch Alliance LLC

50%

United States

Tata Lockheed Martin
Aerostructures Limited

50%

India

Raytheon-Lockheed Martin
Javelin JV

50%

United States

TLVS GmbH50%

Germany

10
72

10
7
1

United States
EuropeAsia/Pacific110

Middle East
Other

M
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BA eonE
S
No ystrth ems
Pr ropatt & GruGe
W mm
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Bo &
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I

LOCKHEED MARTIN

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Military aircraft
F-35 Lightning II multi-role fighter aircraft
F-16 Fighting Falcon fighter aircraft
C-130J Super Hercules tactical airlifter
SB>1 Defiant multi-role helicopter
King Stallion CH-53K three-engine
helicopter
Sea Hawk (SH-60/S-70B) and Black Hawk
(UH-60 / S-70A) twin-engine
multi-role helicopters
Missile and defence systems
Hellfire and Javelin anti-tank missiles
Joint Air-to-Surface Standoff Missile(JASSM)
Trident II Submarine-Launched
Ballistic Missile (SLBM) (D5)
PAC-3 and PAC-3 MSE interceptors
THAAD missile defence system
Surface ships
Freedom-class Littoral Combat Ship (LCS)
MMSC frigate(Multi-Mission Surface Combatant)**
CSC frigate(Canadian Surface Combatant)***Combat and mission system
AEGIS combat system
Space
Vulcan (launcher)*UTC group **Based on Freedom-class LCS ***Based on BAE Systems' Type 26 frigates

111

LOCKHEED MARTINSTRATEGIC HIGHLIGHTS
Business trends

 With sales of $53.8bn in 2018 (€45.5bn, up 7.6% year-on-year in local currency), of which approximately 88%

in the defence sector, Lockheed Martin is the world's largest defence contractor and the leading supplier to the
U.S. Department of Defense.

 The group is organised in 4 divisions. In 2018, growth was driven by the Missile & Fire Control (+16.2%) and
Aeronautics (+9.4%) divisions.

 In July 2018, Lockheed Martin announced it had recruited more than 1,800 employees to increase production

rates of its F-35 fighter aircraft. At the same time, the group opened a new factory in Pinellas Park (FL), expanded
its Orlando site (FL) and relocated the production of F-16 aircraft from Fort Worth (TX) to Greenville (SC), enabling
the Texas site to focus exclusively on the production of F-35.

Home market

 Lockheed Martin remains highly dependent on the U.S. market (72% of its revenue in 2018). The U.S.
Department of Defense, its largest and most important customer, accounted for 60% of its sales, excluding
FMS procedures.

 In September 2018, the group signed a $7.2bn (€6.1bn) contract with the U.S. Air Force to supply
22 GPS III satellites (GPS Block IIIF). As a successor to the GPS IIIA, these satellites will provide a higher
positioning accuracy. The 22 satellites are expected to be launched between 2026 and 2034.

 In January 2019, the U.S. Navy ordered a 16th Freedom-class frigate (LCS-31), whose construction will begin
at the end of 2019. Lockheed Martin (prime contractor) and Marinette Marine, Fincantieri's U.S. subsidiary(manufacturer) are partners in this programme. A total of 20 units could be ordered by the U.S. Navy.

 In May 2019, Lockheed Martin was awarded a $1.13bn (€1bn) contract by the U.S. Navy to supply 12 CH-53K

King Stallion heavy lift cargo helicopters to the U.S. Marine Corps, with delivery starting in 2022. The U.S. Navyplans to receive 200 units of the helicopter by 2029, at a total cost of $25bn (€21.2bn).

 The U.S. government and Lockheed Martin completed a $34bn (€30bn) agreement for the production anddelivery of 478 F-35 Lightning II fighter aircraft to the U.S. Armed Forces and international partners (including
Foreign Military Sales procedures).

Export markets

 The group generated less than 30% of its revenue from exports in 2018, down 0.5 percentage points from 2017.
A large part of international sales are made through FMS procedures.

 In October 2018, Belgium chose Lockheed Martin's F-35 Lightning II to replace its fleet of F-16 Fighting Falcon
fighters. Estimated at €3.6bn, the contract covers the delivery of 34 aircraft between 2023 and 2030.

 In November 2018, Saudi Arabia signed a $15bn (€12.7bn) contract for the acquisition of Lockheed Martin's

THAAD anti-missile defence system, including 44 launchers, 360 interceptor missiles, 16 communication
stations and seven radars.

 The group entered several partnerships in Germany (with MBDA Deutschland on the TLVS programme, andwith Rheinmetall Defence to supply the CH-53K helicopter to the German Armed Forces), Norway (with AIM
Norway, whose acquisition by Kongsberg and Patria was announced this year, for a F-16 maintenance centre),
Romania (with Romaero for a UH-60 maintenance centre), or India (with TASL to produce the F-16-derived
F-21 fighter jet if India chooses it over competing bids from Boeing, Dassault Aviation, UAC, Saab AB andEurofighter, as part of a programme for 114 multi-role fighter aircraft).

Technology and Innovation

 R&D expenses increased 8.3% to reach $1.3bn (€1.1bn) in 2018, representing 2.4% of total revenue.
112LÜRSSENKEY FIGURES (clôture de l'exercice : December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator

 Military shipbuilding (offshore patrol vessels,

frigates, corvettes, mine-hunting vessels, etc.)
 Commercial shipbuilding (luxury yachts)
 Repair, refit and modernisation
 Training services Maritime infrastructures

GOVERNANCE
Chairman and CEOPeter Lürssen

OWNERSHIP STRUCTURE€ millions

2015

2016

2017

2018

Revenue

568

763

1 467

N/A

∆ (%)

-33,54%34,33%

92,29%

N/A

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

N/A

N/A

N/A

N/A

Operatingmargin (%)

N/A

N/A

N/A

N/A

Net income

N/A

N/A

N/A

N/A

Order book

N/A

N/A

N/A

N/A

Employees

1 708

2 078

2 676

N/A

REVENUE BY BUSINESS LINE (%)

SymbolListed onMarket Cap

Unlisted group
66

Major shareholders (as of 20.11.2019)
Lürssen Family

N/A

100%

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

AMSEG

N/A

Australia

Muara Maritime Services

N/A

Brunei

N/A

113

34

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Naval vessels
OPV 80 Darussalam-classoffshore patrol vessel
Arafura-class offshore patrol vessel(SEA 1180 programme)***F125 Baden-Württemberg-classfrigateK130 Braunschweig-classcorvette****
MJ 332 Frankenthal-classmine-hunting vessel
MHV 54 Alanya-classmine-hunting vessel*****FIB 125 Mustaed-class patrol boat
CSB 40 patrol boat
EGV Type 702 (Berlin, Frankfurt,Bonn) naval support vessels
Repair, refit and modernisation
Full service support for the entire
Royal Brunei Navy’s fleet*Merger of L3 Technologies and Harris Corporation**TKMS***Based on OPV 80-class offshore patrol vessel****Based on TKMS' MEKO 100 frigate*****Based on Turkey's MJ 332 Frankenthal-class114LÜRSSENSTRATEGIC HIGHLIGHTS
Business trends

 Lürssen is a German shipbuilding company that manufactures naval ships and patrol vessels for coast guards,
but also designs and builds custom luxury yachts. Military ships are built in Germany in one of the group's eightshipyards, but also internationally, under licence or as part of joint ventures.

 Lürssen's acquisition of Hamburg-based shipbuilding company Blohm+Voss from Star Capital Partners in 2016

strengthened its position in the military segment. The two companies had already collaborated in the past,
particularly on F125 frigates for the German Navy.

Home market

 Lürssen is a key supplier to the German Navy, and as such participates, like TKMS (a subsidiary of ThyssenKrupp

AG) and German Naval Yards Kiel (a subsidiary of Privinvest), in the country's main maritime defence
programmes.

 The group is part of the ARGE F125 consortium, led by TKMS, which supplies the F125 Baden-Württemberg-class frigates to the German Navy. Lürssen mainly builds the front parts of the frigates in its Bremen and Wolgast
shipyards. The first frigate was commissioned in June 2019, two years later than planned due to various technicalproblems. The second vessel should be delivered by the end of the year, and the last two within two years.

 Lürssen is also participating alongside TKMS and German Naval Yards Kiel in the construction of theGerman Navy's five new K130 Braunschweig-class corvettes. These are due to be delivered in 2023 and willcomplement the first five corvettes of the programme, which are set to be delivered between 2008 and 2013.
Thales Deutschland and Atlas Elektronik (a subsidiary of TKMS), partners within the FüWES K130 consortium,
supply the corvettes' combat system.

Export markets

 In 2017, Lürssen created a new subsidiary, Luerssen Australia, dedicated to the SEA 1180 programme(construction of 12 Arafura-class offshore patrol vessels (OPV) based on the design of Lürssen's OPV-80-classpatrol vessel, including four vessels already built in Germany for Brunei, for an estimated value of of $AUD 3.6bn,
or €2.3bn). In May 2018, the group also founded the AMSEG joint venture (Australian Maritime Shipbuilding& Export Group) with Australian construction and engineering company Civmec.

 As part of the SEA 1180 programme, Lürssen has partnered with the Australian subsidiaries of L3 (now L3Harris

Technologies) and Saab AB, as well as with local shipbuilding companies ASC and Civmec. Construction of thefirst Arafura-class offshore patrol vessel began in 2018 at ASC's Osborne shipyard, which is in charge of building
the first two units. The following 10 will be built at Civmec's Henderson facility from 2020.

 In March 2019, Muara Maritime Services, a joint venture between Lürssen and Brunei-based Darussalam

Assets, won a maintenance support contract covering the entire fleet of the Royal Brunei Navy, including thefour Darussalam-class OPV-80s delivered by Lürssen between 2011 and 2014.

 Following the German government's ban on arms exports to Saudi Arabia in October 2018, Lürssen is nolonger able to deliver ships ordered by the Royal Saudi Navy in 2014 as part of a contract estimated at €1.5bn.
Approximately 140 vessels were ordered (patrol vessels, interceptors, etc.), including 79 FIC 1650 interceptors
that were subcontracted to French shipbuilding company Couach and have been delivered to the Saudi Coast
Guard.

 Lürssen is in competition with Italy's Fincantieri and the Bulgarian shipbuilding company MTG Dolphin for theconstruction of two offshore patrol boats for the Bulgarian Navy. The contract, worth an estimated BGN 984m(€503m), is to be awarded by the end of 2019. The first vessel is scheduled for delivery in 2023, the second in
2024.

115

MBDA

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Missiles producer€ millions

2015

2016

2017*

2018

 Air dominance (air-to-air missile, air-to-ground

Revenue

2 875

2 955

2 982

3 164

missile, guided missile system, cruise missile) Battlefield engagement (anti-tank missile,anti-tank unmanned ground vehicle)
 Ground based air defence Maritime superiority (anti-ship missile system,
naval air defence system, naval cruise missile)

GOVERNANCE
Chairman and CEO

Éric Béranger

Executive Group Director
Programmes

Stéphane Reb

Chief Financial Officer∆ (%)-9,13%

2,78%

0,91%

6,10%

Defence (%)

100%

100%

100%

100%

Export (%)

43%

50%

N/A

N/A

Operatingprofit/loss

218

213

201

239

Operatingmargin (%)

7,58%

7,21%

6,74%

7,55%

Net income**

283

-2

346

244

Order book15 10015 90016 80017 400

Employees

10 00010 33810 700

11 300*2017 figures restated.
**Total comprehensive income.

Peter Bols

OWNERSHIP STRUCTURE

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap
Major shareholders (as of 20.11.2019)
Airbus37,5%

BAE Systems

37,5%

Leonardo

25,0%

N/A

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Eurosam

66,6%

Country
FranceTAURUS Systems GmbH

66,6%

Germany

Roxel

50%

FrancePARSYS GmbH50%

Germany

L&T MBDA Missile
Systems

49%

India
United States

MEADS International Inc.

42%

Inmize40%

Spain

TLVS GmbH50%

Germany

RAM System GmbH50%

Germany

N/A

116

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS
Air dominanceBrimstone long range air to ground missile
Meteor beyond visual range air-to-air missile
MICA and MICA NG medium range air-to-air missile
SCALP-EG / Storm Shadow air-launched long range
deep strike weapon
TAURUS KEPD 350E modular stand-off missile systemfor precision strikes
Viper-E high precision air to ground missile
SPECTRA self-protection system
Battlefield engagement
MMP anti-tank land combat missile system
Trigat-LR / PARS 3 LR high precision fire-and-forget
weapon system
Mistral short range surface-to-air missile
Anti-tank unmanned ground vehicle
Spectre UAV
Ground based air defence
CAMM and CAMM ER common anti-air modular missile
SAMP/T surface-to-air missile defence system
Medium Extended Air Defense System (MEADS) project
Maritime superiority
Sea VeNom-ANL lightweight anti-surface guided weapon
ASTER 15 and 30 surface-to-air missiles
Exocet MM38 and MM40 anti-ship missile systems
Naval Cruise Missile (MdCN - NCM)
Future Cruise (FC) / Anti-Ship Weapon (ASW)
117

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MBDA

MBDA

STRATEGIC HIGHLIGHTS
Business trends

 MBDA is a France-based European defence company and one of the world's leading manufacturers of missiles.
Its shareholder structure has remained unchanged since the group's creation in 2001: BAE Systems and Airbus
each hold 37.5% of the capital, with Leonardo holding the remaining 25% stake.

 MBDA's consolidated revenue reached €3.2bn in 2018 (+6.1% year-on-year). The company reported growthboth in its domestic markets (Germany, France, Italy, United Kingdom) and on export markets.

 The group's order book increased 3.6% to a record €17.4bn in 2018, representing more than 5 years of revenue.

However, with the intensification of competition in Europe, particularly from U.S. contractors, order intake fell forthe second consecutive year, to €4bn in 2018 (compared to €4.2bn in 2017, and €5.2bn in 2016).

 MBDA is pursuing an ambitious recruitment plan. After hiring 1,200 employees in 2018, the group plans torecruit an additional 1,000 employees in 2019, including 500 in France.

 In June 2019, Eric Béranger, former head of Airbus' space activities, was appointed Chairman and Chief
Executive Officer of MBDA, replacing Antoine Bouvier, who in turn joined Airbus as Director of Strategy,
Mergers and Acquisitions and Public Affairs.

Home markets (France, Germany, United Kingdom, Italy)

 In March 2018, MBDA UK signed a £400m (€450m) contract with the U.K. Ministry of Defence to extend theservice life of the country's Brimstone air-to-surface missile beyond 2030. The missile will initially be used by
Royal Air Force Typhoon fighter aircraft, then carried by MQ-9B Protector RPAS drones (supplied by General
Atomics) and Apache attack helicopters.

 In November 2018, France's DGA awarded MBDA France a contract worth nearly €900m to supply 567 MICA

NG missiles and upgrade 300 MICA missiles. The MICA NG missiles will be delivered between 2026 and2031. They will replace the MICA missiles currently deployed on the refurbished Rafale, Mirage 2000-5 andMirage 2000-D fighter aircraft. The contract also involves Roxel, Safran and Thales for seeker technologies andpropulsion systems.

 In June 2019, TLVS GmbH, a joint venture between MBDA Deutschland and Lockheed Martin, submitted its

Medium Extended Air Defense System (MEADS) to the Federal Office of Bundeswehr Equipment, to be usedas the foundation for Germany’s future air and missile defense system (Taktisches Luftverteidigungssystem, or
TLVS). The programme, whose cost is estimated at €3.5bn, puts TLVS in competition with Raytheon's Patriot
system (in partnership with Rheinmetall Defence).

Export markets

 In September 2018, MBDA UK signed a contract worth around £1bn (approximately €1.1bn) to supply Meteor
air-to-air and Brimstone air-to-ground missiles to the Qatar Air Force to equip its 24 Typhoon fighter aircraft.

 In June 2019, MBDA France won a €200m contract to supply around 100 Meteor air-to-air missiles to theBrazilian Air Force's 36 Gripen JAS-39 E/F fighter aircraft acquired in 2014. The missiles are expected to bedelivered in 2021-2022.

Technology and Innovation

 In March 2019, MBDA France opened a data center at Plessis-Robinson (92) to develop future missile systems.
 At the February 2019 Idex show in Abu Dhabi, MBDA and Estonia's Milrem Robotics showcased a new
anti-tank unmanned ground vehicle (UGV). The 1 ton robot integrates the Milrem Robotics THeMIS UGV with
the MBDA IMPACT (Integrated MMP Precision Attack Combat Turret) system that includes two MMP anti-tank
missiles and a self-defence machine gun.

118

MEGGITTKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Equipment supplier Aircraft braking systems
 Control subsystems and sensors
 Polymers and composite structures
 Avionic systems
 Defence subsystems
 Auxiliary Power Units (APU)

GOVERNANCE
Chairman

Sir Nigel Rudd

Chief Executive Officer

Tony Wood

Chief Financial Officer

Louisa Burdett

OWNERSHIP STRUCTURE (as of 20.11.2019)
MGGT

Listed on

LSE
4 922

Major shareholders (as of 20.11.2019)
Capital Research & Management Co.
(World Investors)

9,53%

T. Rowe Price Associates, Inc.
(Investment Management)

4,99%First Pacific Advisors LLC

4,95%

Harris Associates LP

4,93%

FIL Investment Advisors (UK) Ltd.

4,92%

MAIN JOINT VENTURES AND ASSOCIATES
Name

2015

2016

2017**

2018

Revenue

2 269

2 432

2 274

2 351
4,36%

∆ (%) [£]*

5,98%

20,95%

0,10%

Defence (%)

35%

35%

34%

35%

Export (%)

91%

90%

90%

92%

Operatingprofit/loss

326

285

311

290

Operatingmargin (%)

14,37%

11,73%

13,68%

12,33%Net income

251

209

334

202

Order book

2 221

2 325

2 344

2 500

Employees

11 926

11 21011 226

11 739*Variation based on revenue in local currency.
See €/£ exchange rates p.7.
**2017 figures restated.

REVENUE BY BUSINESS LINE (%)*

SymbolMarket Cap (£m)€ millions

24
19

28

18

11
Control Systems
Sensing Systems
Polymers & Composite

Aircraft Braking Systems
Equipment Group*As of January 1st, 2019, new organisational structure around 4 divisions:Airframe Systems, Engine Systems, Energy & Equipment, and Services& Support.

REVENUE BY REGION (%)%

Country

Parkway-HS, LLC

70%

UnitedStatesParkway-Hamilton
Sundstrand Mexico
S. de R.L. de C.V.*

N/A

MexicoMeggitt UTC Aerospace
Systems, LLC

N/A

UnitedStates598
14
19
United Kingdom
United States*Owned via Parkway-HS, LLC

119

Europe (excl. UK)
Rest of the WorldMEGGITT

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Aircraft braking systems
Carbon brakes
Steel brakes
Control systems
Polymers and composites
Composites structures
Fuel containment
Power conversion
Power converter systems
Control subsystems and sensors
Ice protection systems
Fire detection control unit
Pressure indicators and gauge
Avionic systems
integrated Secondary Flight Display (iSFD)
instrument
Threat Warning Indicator (TWI)
Defence subsystems
Aerial target systems (AGTS-36, GT-400)
and countermeasures
Automatic ammunition handling120

MEGGITTSTRATEGIC HIGHLIGHTS
Business trends

 Meggitt is a British equipment manufacturer (braking systems, thermal sensors and components, fire protection

and control equipment, etc.) with a particular focus on civil and military aeronautics. The group also operates inthe energy and health sectors. In 2018, its total revenue, which it mainly generates in the civil sector, increased
by 4.4%, driven by the growth of the Control Systems division.

 Defence activities, which accounted for 35% of the group's revenue in 2018, reported strong organic growth(+10%) thanks to solid demand for fighter aircraft equipment (particularly for the F-35), as well as contracts to
upgrade the fuel tanks of F/A-18 Hornet fighter aircraft and the U.S. Air Force's UH-60 Black Hawk helicopters.

 To improve operational efficiency, Meggitt reduced the number of its sites from 56 to 45 in 2018, adopting fewer
but larger sites. In the United Kingdom, Meggitt plans to close additional sites such as its plants in Birmingham,
Coventry and Maidenhead.

 Meggitt also adopted a new organisational structure, effective January 1, 2019. The group's activities are now

organised around 4 divisions (previously 5): Airframe Systems, Engine Systems, Energy & Equipment andServices & Support.

Home market

 The United Kingdom accounted for only 8% of the group's sales in 2018, but for nearly a quarter of its workforce.
 In July 2018, Meggitt launched the construction of a "super site" within the Manufacturing Technology Centre of

Ansty Park in Coventry (England) in order to centralise various industrial and support functions. The site, which
will employ up to 1,000 workers, should be operational by the end of 2019. The project's total cost amounts to£130m (€148m).

 The group is involved in several British and European defence programmes. For example, Meggitt provides

approximately £700,000 (€790,960) worth of equipment (wheels, carbon brakes, landing gear, etc.) for each
Eurofighter Typhoon fighter aircraft manufactured.

Export markets

 The United States remains the group's largest market, with nearly 60% of sales made to U.S. customers.

As a partner of major players such as Boeing or Lockheed Martin, Meggitt participates in various military
programmes such as the F-35 fighter aircraft, the P-8 Poseidon surveillance aircraft, or the Apache helicopters.
In August 2018, the group inaugurated its expanded and reconfigurated site in San Diego, which it aims to turninto a centre of excellence for the manufacture of aircraft engine components.

 In October 2018, Meggitt won a $323m (€274m) multi-year contract from the U.S. Defence Logistics

Agency to supply spare parts and equipment for H-60 Blackhawk helicopters, F-16 Falcon fighter aircraft andCH-47 Chinook helicopters.

 In 2019, the group signed a $750m (€847m) contract with U.S. aircraft engine manufacturer Pratt & Whitney(UTC). The 10-year contract covers the supply of components for the F119 and F135 engines that power
Lockheed Martin's F-22 and F-35 fighter aircraft.

 Over the year, Meggitt also won several contracts with General Dynamics Land Systems (GDLS), including
a $37m (€34m) contract in March 2019 to supply cooling and electrical systems for the M1 Abrams tankprogramme, as well as a multi-million dollar contract in June 2019 to develop an advanced cooling system for
the U.S. Army's next-generation battle tanks.

Technology and Innovation

 Meggitt's R&D expenditure amounted to £138m (€156m) in 2018, representing 6.6% of revenue. This
compares with £158m (€180m), or 7.6% of revenue, in 2017.
121

MTU AERO ENGINESKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS€ millions

2015

2016

2017*

2018

Revenue

4 435

4 733

3 897

4 567

systems and subsystems∆ (%)

13,31%

6,72%-17,66%

17,19%

 Equipments and components
 MRO industrial gas turbines

Defence (%)

11%

11%

11%

9%

Export (%)

89%

89%

88%

89%

Operatingprofit/loss

386

453

521

620

Operatingmargin (%)

8,70%

9,57%

13,37%

13,58%Net income

218

312

355

447

Order book

12 49414 17214 89317 573

Employees

8 334

8 368

8 846

9 731

Engine manufacturer, equipment supplier Commercial and military aircraft propulsion

GOVERNANCE
Chairman of the Supervisory
Board
Chairman and CEO
Chief Program Officer

Klaus Eberhardt
Reiner Winkler
Michael Schreyögg*2017 figures restated.

OWNERSHIP STRUCTURE (as of 20.11.2019)

REVENUE BY BUSINESS LINE (%)*

SymbolMTX

Listed on

XETRA

Market Cap (€m)

12 84433

58

Major shareholders (as of 20.11.2019)
Capital Research & Management Co.
(World Investors)

12,40%

Threadneedle Asset Management Ltd.

4,57%

Fidelity Management & Research Co.

3,81%

DWS Investment GmbH

3,74%

MAIN JOINT VENTURES AND ASSOCIATES

9MRO
Commercial Engines

Military Engines

*Revenue distribution based on total sales excluding eliminations.

REVENUE BY REGION (%)

Name

%

Country

EUROJET Turbo GmbH

33%

Germany

EPI Europrop International
GmbH

28%

Germany

MTU Turbomeca
Rolls-Royce GmbH33,33%

Germany

MTU Turbomeca
Rolls-Royce ITP GmbH

25%

Germany

Turbo Union Ltd

39,98%

66

11
7
7

Germany
North AmericaEurope(excl. Germany)

UnitedKingdom

122

9
Asia
Rest of the Worldera
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MTU AERO ENGINES

Next European Fighter Engine(NEFE, NGWS programme)
F414 (F/A-18, EA-18G, JAS-39E)
EJ200 (Eurofighter Typhoon)
F110 (F-15, F-16)
Military transport aircraft engines
TP400-D6 (A400M)
IAE V2500 (KC-390)
PW2000 (C-17)
Helicopter engines
T408 (CH-53K)
MTR390-E/2C (Tiger)
Gas turbines
LM2500 series
LM5000 and LM6000
ASE series
TF series
MRO and spare parts
Tyne Mk 21/22(C-160, Breguet Atlantic)
Larzac 04 (Alpha Jet)
CF6-50C2 (KC-10)
MTR390 (Tiger)
T64 (CH-53G)*Rolls-Royce group **UTC group ***General Electric group

123

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G

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSMTU AERO ENGINESSTRATEGIC HIGHLIGHTS
Business trends

 MTU Aero Engines is a German manufacturer of propulsion systems and subsystems (including turbines andother engines) for civil and military aircraft and helicopters, as well as industrial gas turbines. It is also one of theleading players in the field of aeronautical maintenance services.

 MTU Aero Engines' revenue reached €4.6bn in 2018, up 17.2% year-on-year. Sales of commercial aircraft

engines (new engines and spare parts, +24.3%) and demand for maintenance services (+22.5%) were themain growth drivers.

 Sales of military aircraft engines amounted to €431m for the year, pursuing their downward trend (-3.1% during

2018, -11.7% during 2017). The share of this business line in the group's total revenues has halved over the past
decade, falling from 18% in 2008 to 8.9% in 2018.

 The group is currently strengthening its industrial capacities: extension of its Polish plant in Rzeszów, opening ofa logistics centre at its German site in Ludwigsfelde, creation of a maintenance centre in Serbia.

 In October 2018, MTU Aero Engines announced that Reiner Winkler, Chairman and CEO of the group since2014, will remain in office until September 2024.

Home market

 MTU Aero Engines generated 10.8% of its revenue in Germany in 2018, a share that has been declining inrecent years (-7.8 percentage points compared with 2008).

 In February 2019, Germany ordered 33 Typhoon fighter aircraft from the Eurofighter GmbH consortium toreplace the Tranche 1 Typhoon fighter aircraft delivered between 2003 and 2008. The value of the contract isestimated at €3.3bn. MTU Aero Engines is involved in the production of the Eurojet EJ200 engine powering
these aircraft.

Export markets

 MTU Aero Engines' export revenue jumped 18.8% to €4.1bn in 2018, accounting for nearly 90% of the group's

total turnover. The company in fact pursued its international expansion, in particular through the creation of joint
ventures (e.g. MTU Maintenance Zhuhai, in partnership with China Southern Air Holding Company, for the
Asian market).

 The group also benefitted from the confirmed sale of 24 Eurofighter Typhoon to Qatar in September 2018, a
contract worth €6.8bn. The aircraft are scheduled for delivery at the end of 2022.

 While the group enjoyed a solid export business, it was, like other German defence manufacturers, constrainedby Germany's ban on arms exports to Saudi Arabia, which was extended by 6 months in March 2019 (resulting,for example, in the blocking of a £10bn (€11.7bn) order for 48 Eurofighters).

Technology and Innovation

 MTU Aero Engines' R&D expenses reached €201.2m in 2018 (up 0.8% from the previous year), of which 88%
self-financed expenses. This represented 4.4% of the group's turnover, compared to 5.1% the year before.

 As part of Europe's Future Combat Air System (FCAS) programme, MTU Aero Engines and Safran in February

2019 entered into a partnership to design the engine for the future European fighter aircraft (Next-Generation
Weapon System, NGWS). MTU Aero Engines will be in charge of designing the low and high-pressurecompressors and the low-pressure turbine. MTU Aero Engines will act as the main partner of Safran, which willbe the programme's prime contractor.

124

NAMMOKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Ammunition provider, systems integrator/equipment
supplier Ammunition (commercial, small, medium
and large calibre)

 Weapon systems (shoulder fired systems,

warheads and fuzes)
 Explosives and pyrotechnics (hand grenades,
initiation systems)
 Rocket motors (missiles, boosters, hybrid) Demilitarisation services(conventional ammunition)

GOVERNANCE
ChairmanD. Schjerven

Chief Executive Officer

M. Brandtzæg

Acting Chief Financial Officer

L. Furuseth

OWNERSHIP STRUCTURE€ millions

2015

2016

2017**

Revenue

423

445

478

2018
513

∆ (%) [NOK]*

1,76%

9,22%

8,00%

10,25%

Defence (%)

80%

80%

80%

80%

Export (%)***

91%

76%

82%

80%

Operatingprofit/loss

32

41

39

38

Operatingmargin (%)

7,50%

9,29%

8,22%

7,36%

Net income

24

30

22

25

Order book

534

525

472

584

Employees

2 088

2 102

2 217

2 409

*Variation based on revenue in local currency.
See €/NOK exchange rates p.7.
**2017 figures adjusted.
***As of 2016, domestic market = Scandinavia region.

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap

N/A

Major shareholders (as of 20.11.2019)
Norwegian State

50%

Patria Oyj

50%

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

SN Technologies SA

50%

Switzerland

Komm-In AS

8%

NorwaySintef Raufoss
Manufacturing AS

14%

NorwayRaufoss Holding AS

2,5%

NorwayNordic Additive
Manufacturing

21%

Norway

MAC LLC

N/A

UnitedStates

125

41
20
2

8

Norway/Sweden/		Finland
North America

29

Rest of Europe
Asia
Rest of the World

NAMMO

Ammunition
Small calibre ammunition (4.6mm - 12.7mm)
Medium calibre ammunition (12.7mm - 57mm)
Large calibre ammunition (120mm - 155mm)
Mortar rounds (60mm, 81mm and 120mm)
Weapon systems
Warheads (M282) and fuzes(D652, Jupiter, Mercury, Venus)
Shoulder fired systems (M72 LAW, BDM,SMAW and SMAW-T)
Explosives and pyrotechnics
Hand grenades
Initiation systems
Hystrix grenades launch system
Rocket motors
Rocket motors for missiles (ESSM, IRIS-T SL,
IDAS, Penguin, AMRAAM, Sidewinder, NSM)
Auxiliary boost rocket motors(Exocet MM40, NSM)
Booster separation motor
and acceleration booster (Ariane 5)
Hybrid rocket motors
Altair air-launch system (demonstrator)
Demilitarisation services
Demilitarisation and thermal treatment

126

Fo
r

BA
E

Sy
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Ra ets
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no
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Th
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es
es
D
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Ko efe
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sb ce
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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

NAMMOSTRATEGIC HIGHLIGHTS
Business trends Nammo is a Norwegian aerospace and defence company equally controlled by the Norwegian State (50%) and

Finnish defence group Patria Oyj (50%). The group is one of the world's leading providers of ammunition andweapon systems, and a major player in the ammunition demilitarisation market. It generates 80% of its turnoverin defence, a share that has remained stable in recent years.

 Nammo's turnover increased again in 2018 (+10%), reaching NOK 4.9bn (€513m). The group's order book also
increased strongly (+25% compared to 2017).

 Against a backdrop of weak prospects in the European ammunition demilitarisation market, Nammo continued
its restructuring efforts. The group closed its Pinnow site in Germany and consolidated its defence activities in
Sweden. It also reorganised manufacturing activities at its U.S. sites.

 On the other hand, the group in 2017 announced technology and industrial investments of more than NOK 1bn(€107m) over the five following years. Nammo particularly aims to create a new automated production line formedium-calibre ammunition (20 to 30mm) at its Raufoss site in Norway .

 In January 2019, the group completed the acquisition of a majority stake in MAC LLC, a U.S. manufacturer oflightweight polymer cartridge cases for small and medium calibre ammunition.

 Nammo established a 25-year partnership with Boeing to develop a wide range of guided artillery projectiles for
the U.S. armed forces and its allies.

Finland, Norway, Sweden

 Created through the merger of three Scandinavian defence companies, Nammo is still very present on the
Scandinavian market, where it generated 20% of its sales in 2018.

 A key player in the demilitarisation of ammunition in Europe, Nammo is currently involved in the disassembly,
recycling and disposal of obsolete ammunition in Sweden and Norway.

 The group also produces 25mm APEX ammunition for the F-35 fighter aircraft, as part of an agreement with theNorwegian Defence Materiel Agency (NDMA).

 In June 2019, Nammo won a four-year contract from the Norwegian Defence Logistics Organisation to supply
ammunition to the Norwegian Armed Forces, a contract worth around NOK 1.7bn (€174m).

Export markets

 Nammo generated more than three quarters of its sales in international markets in 2018. North America remains
the group's largest export market, accounting for 41% of its total turnover.

 Since 2017, Nammo is benefiting from a 30-year public-private partnership with the U.S. Navy to provide solid
propulsion systems, tactical warheads and ammunition demilitarisation services.

 In 2018, Nammo signed a $135m (€113m) contract with the U.S. Army to supply shoulder-fired rocket launchers.
The group was also selected by the U.S. Navy and the U.S. Army to supply 30mm ammunition in partnershipwith General Dynamics.

Technology and Innovation

 Nammo aims to devote 10% of its annual revenue to R&D activities, which in particular include long-range
ammunition, medium-calibre ammunition (30 and 40mm), ammunition for the F-35 and hybrid rocket motors.

 Since 2015, Nammo has been participating, along with seven other European partners, in the ALTAIR

microlauncher project (Air Launch space Transportation using an Automated aircraft and an Innovative Rocket)of the ONERA (France's national aerospace research centre). In 2019, the demonstrator's last flight experiments
were conducted in French Guiana.
127

NAVAL GROUPKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017*

2018

 Surface ships
 Submarines (SSN, SSBN, SSK)
 Underwater weapons
 Combat systems, navigation systems,

Revenue

3 039

3 191

3 194

3 608

naval integration of drones
 Maintenance, modernisation and associatedservices for naval bases
 Marine renewable energies and civil nuclear
energy∆ (%)-0,88%

5,02%

0,09%

12,97%

Defence (%)

~95%

~95%

~95%

~95%

Export (%)

49%

38%

35%

30%

Operatingprofit/loss**

64

103

98

266

Operatingmargin (%)

2,11%

3,21%

3,07%

7,37%

Net income***

68

94

93

178

Order book

12 271

11 62913 77313 830

Employees

13 87813 87014 51514 860

GOVERNANCE
Chairman and CEO

H. Guillou

General Secretary

J.-Y. Battesti

Executive VP Programs

O. de la Bourdonnaye

OWNERSHIP STRUCTURE*2017 figures restated.
**EBITA (Earnings Before Interest, Taxes and Amortization).
***Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap

53

Major shareholders (as of 20.11.2019)
French State62,25%

Thales35,00%

FCPE Actions Naval Group

1,73%

MAIN JOINT VENTURES AND ASSOCIATES

Construction

47

Services

REVENUE BY REGION (%)

Name

%

Country

Kership

45%

FranceItaguaí Construções
Navais SA (ICN)

41%

BrazilBoustead DCNS Naval
Corporation Sdn Bhd (BDNC)

40%

Malaysia

Technicatome(formerly Areva TA)

20,32%

FranceLes Chantiers de l'Atlantique

11,7%FranceDCNS Zamil

55%

Saudi
ArabiaNaviris

50%

Italy

70

France128

30

Export markets

Th
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NAVAL GROUP

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Submarines
Le Triomphant-class ballistic missile
nuclear-powered submarine (SSBN)
Suffren-class nuclear-powered attack submarine(SSN)
Scorpene-class conventionally-powered
attack submarine (SSK)
Attack-class conventionally-powered
attack submarine (SSK)
Surface ships
Mistral-class Landing Helicopter Dock (LHD)
FREMM ASW/FREMM AAW
multi-purpose frigates
OPV, patrol vessels and corvettes(Gowind, OPV 90, MPV80, B2M)
FDI / Belharra-class frigates
Future Logistic Support Ship
(BRF, FLOTLOG programme)****
Underwater weapons
F21 heavyweight torpedo
MU90 lightweight torpedo
Systems and equipment
SUBTICS, SETIS and POLARIS
combat management systems
Sylver vertical launching system
MRO and services
Charles de Gaulle aircraft carrier
mid-life upgrade*****
Horizon-class frigates modernisation*Formerly Areva TA **Formerly STX France ***TKMS, ThyssenKrupp AG group ****Based on Italian Navy's Vulcano-class LSS*****Completed in November 2018

129

NAVAL GROUPSTRATEGIC HIGHLIGHTS
Business trends Naval Group, formerly known as DCNS, is France's leading designer, manufacturer and systems integrator of

surface vessels (aircraft carriers, frigates, corvettes, multi-purpose vessels, oil replenishment vessels, etc.) andsubmarines (nuclear or conventional propulsion). The group is also involved in the production of underwater
weapons, maintenance services for military naval vessels, as well as marine renewable energies.

 The group's turnover reached €3.6bn in 2018, up 13% over a year. Growth was mainly driven by major national
programmes (Suffren-class nuclear powered-attack submarines and FREMM frigates) but also by contracts forconventionally-powered submarines in Brazil and Australia.

 Announced at Euronaval 2018, the alliance between France's Naval Group and Fincantieri (Poseidon project)

was formalised in June 2019. The alliance should in particular enable the two groups to carry out common
R&D projects and jointly prepare surface vessel bids for binational programmes and export markets. A 50:50
joint venture, called Naviris, was created at the end of the year, with its headquarters in Genoa (Italy) and a site
in France (Ollioules).

Home market

 Naval Group generates about 70% of its sales on its domestic market. The group is the prime contractor for themain construction and modernisation programmes of the French Navy.

 As part of the FLOTLOG (Logistics Fleet) programme, the Organisation for Joint Armament Co-operation(OCCAR) in January 2019 awarded a €1.7bn contract to Naval Group, Chantiers de l'Atlantique and Thales tobuild four new Logistic Support Ships (LSS) and provide operational readiness services for six years. The designof the ships will be based on that of the Vulcano-class LSS built by Fincantieri for the Italian Navy. Naval Groupwill in particular provide the combat system for these vessels.

 In July 2019, Naval Group delivered the 6th FREMM frigate (Normandie) to the French Navy. The group ismeanwhile completing the FREMM-AAW frigate Alsace, the first multi-mission frigate with enhanced antiaircraft warfare (AAW) capabilities, and is continuing assembly work on the second frigate of the same class(Lorraine). The two ships are scheduled for delivery in 2021 and 2022.

 A month later, the group launched the Suffren, the first of its latest-generation nuclear-powered attack

submarine. This class of submarines (stemming from the Barracuda programme) is intended to replace the
Rubis-class submarines, which were commissioned in the 1980s. The first sea trials will start in early 2020.

Export markets

 With only 30% of its turnover generated from exports in 2018, the group aims to strengthen its internationalpresence. In addition to the alliance concluded with Fincantieri (Poseidon project), Naval Group in December
2018 opened an Egyptian subsidiary, Alexandria Naval for Maintenance and Industry (ANMI), and signed amemorandum of understanding with state-owned defence company Saudi Arabian State Military Industries(SAMI) in early 2019 to create a joint venture for the development and production of warships in the region.

 In 2018-2019, Naval Group won several export contracts: a €319m contract in Argentina for four Gowind

patrol vessels; a €2bn contract for 12 mine-hunting vessels in Belgium and the Netherlands via Belgium Naval& Robotics (Naval Group/ECA Group). Greece also signed a letter of intent for two Belharra frigates.

 Naval Group signed a strategic partnership agreement with the Australian government to supply 12 Attackclass conventionally-powered submarines, which are based on the Barracuda programme. In March 2019, thecompany signed a first €361m contract for the design of the future submarines, which will be built by ASC Pty
Ltd at the Osborne shipyard in Australia.

Technology and Innovation

 The group's self-financed R&D expenditure amounted to €82.5m in 2018, representing 2.3% of revenue.
130

NAVANTIA

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017

2018

 Military shipbuilding (patrol vessels, corvettes,

Revenue*

705

710

851

1 083
27,30%

frigates, Landing Helicopter Dock (LHD) ships,
submarines) Commercial shipbuilding
 Systems and equipment
 Propulsion systems
 MRO and modernisation
 Marine energies∆ (%)

26,59%

0,71%

19,81%

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

58%

41%

35%

38%

Operatingprofit/loss

-212

-276

-367

-221

Operatingmargin (%)

GOVERNANCE
Chairwoman and CEO

S. de Sarriá Sopeña

Chief Financial Officer

J. Bagüés Oliver-30,03% -38,90% -43,08% -20,41%

Net income

-166

-229

-297

-226

Order book*

1 876

2 163

1 680

4 671

Employees

5 348

5 296

5 172

4 953

*Excluding "Subsidiaries" division.

OWNERSHIP STRUCTURE

REVENUE BY BUSINESS LINE (%)*

SymbolListed on

Unlisted group18

Market Cap

68

Major shareholders (as of 20.11.2019)
Spanish State (via SEPI)

7

100%

4
<1
Shipbuilding
MRO et modernisation
Engineering

2
Systems
Propulsion and energy
Other*Excluding "Subsidiaries" division.

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

Sociber Ltda.

50%

Chile

Inmize Capital S.L

20%

Spain

SAES Capital

51%

Spain

Surveillance Maritime S.A.

10%

Spain

9

62

Spain
EU (excl. Spain)
Americas

131

3

1

25

Europe (excl. EU)
Rest of the World

UT
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EX heoPA n
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NAVANTIA

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Submarines
S-80-class attack submarines
Frigates and patrol vessels
Future F110-class frigate
F-100-class frigate (Álvaro de Bazán)
F-310-class frigate (Fridtjof Nansen)
Hobart-class Air Warfare Destroyer(AWD)
Avante-class corvette
Buque de Acción Marítíma (BAM)-classpatrol vessel
LHD and logistics ships
Juan Carlos I-class LHD
Canberra-class LHD
Supply-class auxiliary oiler
replenishment(derived from the Cantabria)
Systems and equipment
Dorna fire control system(LCS-class frigates)
SCOMBA naval combat management
system (Juan Carlos I-class LHD,
BAM-class patrol vessels, F-100-classfrigates)
Propulsion systems
MTU series 396, 956 and 1163
marine engines (under licence)
Weapon systems
Tizona 30mm turret (VCR 8x8)*Rolls-Royce group **GE Aviation group132

NAVANTIASTRATEGIC HIGHLIGHTS
Business trends Navantia is a Spanish state-owned shipbuilding company that operates both in the civil and military sectors.
Although it generates the majority of its revenue from defence activities, the company has been diversifying its
activities in the civil sector, particularly in the field of marine energies.

 The group's turnover increased for the fourth consecutive year in 2018 (+27.3%), to €1.1bn, partly driven
by strong growth in the Shipbuilding division. However, the company continued to report losses, of €221m(equivalent to a net margin of -20.41%), despite a restructuring plan launched in July 2017.

 Navantia's order book increased from €1.7bn in 2017 to €4.7bn in 2018, in particular thanks to the Spanish
Navy's S-80 submarine programme and Saudi Arabia's Avante 2200 corvettes programme.

Home market

 The group remains very dependent on its domestic market, with nearly two-thirds of its sales made to the
Spanish Navy.

 The first of the four S-80 submarines is now scheduled for delivery in 2022 instead of 2015, a seven-year delay
related to major technical difficulties encountered by Navantia during construction. The additional cost of the
programme is estimated at between €1.5 to €1.8bn and is weighing on operational performance.

 In January 2019, the Spanish Navy took delivery of the Furor, the sixth and last BAM-class offshore patrol
vessel. A few months later, Navantia won a new contract from the Spanish Ministry of Defence to build five
new F110-class frigates to replace the current six Santa Maria-class units. The value of the contract is estimatedat €4.33bn.

Export markets

 38% of the group's turnover was generated from exports in 2018, a share slightly higher than in 2017 (34%).
 Navantia won several contracts from Australia in recent years, including for the construction of Canberra-classhelicopter carriers, Hobart-class destroyers, as well as logistics support vessels based on the Cantabria-classoil replenisher, making the country a strategic partner for the company. After the launch of HMAS Supply in
November 2018, Navantia in August 2019 launched the second of two new logistics vessels for the Australian
Navy. Named HMAS Stalwart, it is scheduled to enter service in 2020.

 In January 2019, Navantia began construction of the first of five Avante 2200 corvettes ordered by Saudi Arabia
in 2017 for €1.8bn. The first unit is scheduled to be delivered in 2022.

 Navantia, Naval Group, the Saab AB-Damen consortium and TKMS are competing on the replacement
programme for the Dutch Navy's four Walrus-class submarines. As part of this call for tenders, Navantia is
proposing a version of the S-80.

 In September 2019, Navantia and Britain's BMT Group joined forces to make a proposal for the British Ministryof Defence's Fleet Solid Support (FSS) programme for the supply of three support ships tasked with supplying
dry stores (ammunition, food etc.) to new Royal Navy aircraft carriers.

Technology and Innovation

 At the FEINDEF 2019 defence exhibition in Madrid, Navantia, EXPAL and Elbit Systems unveiled their Tizona

30mm unmanned turret. Developed as part of a cooperation agreement signed at the end of 2018, the turretis intended to equip the Spanish Army's 8x8 Piranha 5 Infantry Fighting Vehicle (IFV), supplied by General
Dynamics European Land Systems.

133

NORTHROP GRUMMANKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer, systems integrator/
equipement supplier€ millions

2015

2016**

2017**

Revenue

21 19522 31823 01225 483

 Military aircraft and unmanned aircraft systems
 Electronic warfare
 Space systems (equipment, payloads) and∆ (%) [$]*

-1,89%

5,08%

5,25%

15,73%

Defence (%)

75%

82%

86%

85%

Export (%)

14%

13%

13%

15%

Operatingprofit/loss

2 688

2 960

2 848

3 201

Operatingmargin (%)

12,68%

13,26%

12,38%

12,56%C4ISR
 Weapon and missile systems
 Cybersecurity
 Modernisation and logistic services

GOVERNANCE
Chairwoman and CEO

Kathy J. Warden

Chief Financial Officer

K. L. Bedingfield

OWNERSHIP STRUCTURE (as of 20.11.2019)2018***Net income

1 909

1 846

2 539

2 734

Order book

32 98743 01635 55446 725

Employees

65 00067 00070 00085 000*Variation based on revenue in local currency.
See €/$ exchange rates p.7.
**2016 and 2017 figures restated.
***Including Orbital ATK ("Innovation Systems" new division).

REVENUE BY BUSINESS LINE (%)*

SymbolNOC

Listed on

NYSE

Market Cap ($m)

60 85636

41

Major shareholders (as of 20.11.2019)
Capital Research & Management Co.

18,70%

SSgA Funds Management, Inc.

10,50%The Vanguard Group, Inc.

7,68%

T. Rowe Price Associates, Inc.

6,15%

BlackRock Fund Advisors

5,37%

MAIN JOINT VENTURES AND ASSOCIATES

10

Aerospace Systems
Mission Systems
Technology Services

13

Innovation Systems 		
(formerly Orbital ATK)

*Revenue distribution based on total sales excluding
eliminations.

REVENUE BY REGION (%)

Name

%

Country

Longbow LLC

50%

UnitedStatesNSTec LLC

N/A

UnitedStatesNorthrop Grumman
Mission Systems
Arabia Co. Ltd

N/A

Saudi
ArabiaEuroHawk GmbH50%

Germany

685

United States
Asia/Pacific

134

9

Other

in
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NORTHROP GRUMMAN

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Unmanned Aircraft Systems (UAS)
RQ-4 Global Hawk HALE UAS
MQ-4C Triton HALE UAS
MQ-8 Fire Scout VTOL UAS
Military aircraft
E-2C/D Hawkeye surveillance aircraft
B-2 Spirit strategic bomber
B-21 Raider future strategic bomber
E-8C JSTARS (Joint Surveillance Target
Attack Radar Systems) surveillance aircraft
F-35 Lightning II(fuselage, radar, etc.)
F/A-18 E/F Super Hornet (fuselage)
and EA-18G Growler (electronic warfare
suite)Space systems
Advanced Extremely High Frequency(AEHF) payloads
OmegA future launcher
C4ISR
Integrated Air and Missile Defense Battle
Command System (IBCS)
control-and-command (C2) system
Battlefield Airborne Communications Node
(BACN) system
Missile systems and artillery systems
Advanced Anti-Radiation Guided Missiles
AARGM and AARGM-ER
Bushmaster cannons(M242, Mk44, M230)*Textron group **Merger of L3 Technologies and Harris Corporation ***Formerly Rockwell Collins, UTC group135

NORTHROP GRUMMAN

STRATEGIC HIGHLIGHTS
Business trends

 Northrop Grumman is an American platform manufacturer and systems integrator with a highly diversified

portfolio of defence activities, including UAVs, military aircraft, radars and C4ISR, missiles and weapons, andspace systems. The group is the world's 3rd-largest defence contractor, with sales of $30.1bn (€25.5bn) in2018.

 Northrop Grumman's revenue increased 15.8% year-on-year in 2018, mainly thanks to the acquisition of Orbital
ATK, completed in June 2018, which was renamed Northrop Grumman Innovation Systems and became thegroup's 4th branch (compared with 3 previously). The group's workforce now stands at 85,000, compared to
70,000 in 2017.

 As of August 1, 2019, Kathy J. Warden, the group's Chief Executive Officer, was appointed as Chairwoman of
the Board of Directors, replacing Wesley Bush.

 Over the past years, Northrop Grumman has been increasing investments in its production sites. As part of its
integration into the group, Orbital ATK is also expanding its industrial capacities, particularly at its Mesa (Arizona)
plant, to double the production of Bushmaster guns.

Home market

 The United States remains Northrop Grumman's most important market, accounting for 85% of the group's
revenue in 2018 (including FMS procedures).

 The group participates in several strategic programmes of the U.S. Army. Among others, it was chosen in 2015
to develop the future USAF strategic bomber, and is also one of the main national players in the military UAV(MQ-4C Triton) and surveillance aircraft (E-2C/D Hawkeye) segments.

 With the acquisition of Orbital ATK, Northrop Grumman has strengthened its position as a key supplier to the
U.S. Department of Defense, in particular by continuing the development of the OmegA space launcher, a$792m (€698m) contract which it signed in October 2018 with the U.S. Air Force.

 The group won two major contracts with the U.S. Navy in 2019: a $12.6bn (€11.2bn) contract to provide
maintenance, modernisation and related services for its aircraft, as well as a $3.2bn (€2.8bn) five-year contract
to supply 24 E-2D Advanced Hawkeye aircraft.

 In July 2019, following Boeing's withdrawal, Northrop Grumman became the only contractor to make an offer
for the GBSD (Ground Based Strategic Deterrent) intercontinental ballistic missile programme, intended toreplace the U.S. Air Force's Minuteman III missiles from 2027 onwards.

Export markets

 Northrop Grumman has strengthened its international presence in recent years. The group generated 15% of its
revenue from exports in 2018, a share that has increased by 7 percentage points since 2011.

 In February 2018, Northrop Grumman won a $75m (€63m) contract to supply the Joint Threat Emitter (JTE)system to Saudi Arabia.

 In late 2018, Japan announced an order for nine E-2D Advanced Hawkeye aircraft, in addition to the four aircraft
ordered in 2015, for $3.1bn (€2.8bn). The Japanese Air Self-Defense Force also ordered three RQ-4 Global
Hawk UAVs as part of a FMS (Foreign Military Sales) procedure.

 After a first order in June 2018, Australia in April 2019 announced its intention to purchase a second MQ-4C
Triton UAV. The country could order up to five additional aircraft in a contract potentially worth AUD$ 6.9bn(€4.5bn), including lifetime maintenance services for the drones.

Technology and Innovation

 The group's self-financed R&D expenditure reached $764m (€647m) in 2018.
136

OHB

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator

 Space systems (satellites, payloads)
 Structures, components, propulsion systems

2015*

2016

2017

2018

Revenue

730

728

860

1 000

16,37%∆ (%)-5,51%-0,27%

18,03%

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

62%

66%

63%

66%

Operatingprofit/loss

40

43

44

48

Operatingmargin (%)

5,51%

5,87%

5,14%

4,78%

Robert Wethmar

Net income**

21

22

23

25

Marco R. Fuchs

Order book

1 684

1 560

2 439

2 399

Employees

2 056

2 298

2 420

2 769

GOVERNANCE
Chairman of the Supervisory
Board
Chairman and CEO€ millions

Chief Financial Officer

Kurt Melching*Non-consolidated figures until 2015.
**Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)*

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolOHB

Listed on

XETRA

Market Cap (€m)

675

Major shareholders (as of 20.11.2019)
Marco R. Fuchs*

34,60%VOLPAIA Beteiligungs GmbH*

21,40%

Christa Fuchs*

8,03%

Romana Fuchs Mayrhofer*

7,89%

80

20

Space Systems

Aerospaceand Industrial Products*Fuchs Family.

*Revenue distribution based on total sales excluding
eliminations.

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)*

Name

%

Country

Arianespace Participation

8,3%

FranceRST Radar Systemtechnik
GmbH

22,7%

Germany

Antares Scarl

24%

Italy

COSMOS International
Launch Services GmbH49,9%Germany

MT Aerospace Holding
GmbH

70%

Germany

COSMOS Space
Systems AG

66,6%

Germany

34

65

1Germany
Europe(excl. Germany)

Rest of the World*Distribution based on sales by geographical areas. The difference
between sales by geographical areas and revenue reached €23.8m
in 2018.

137

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OHB

Ai

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Satellites
European Data Relay System (EDRS-C)
Electra communications satellite
Prisma earth observation satellite
NAOS (National Advanced Optical System)
military reconnaissance satellite
Heinrich Hertz (H2Sat)
communications satellite
Galileo European global navigation
satellite system
SARah satellite-based reconnaissance system
SAR-Lupe satellite-based
reconnaissance system
Aerial systems
OMCoSS multi-mission communication& surveillance system
Aerial Reconnaissance Data System (ARDS)
Structures, components, propulsion systems
Ariane 5 and Ariane 6 structure partsand components
Antennas and mechatronics(ALMA programme)
Propulsion systems (electrical, cold-gas,monopropellant and bipropellant systems)
Aircraft components (A400M)*ArianeGroup**Formerly Rockwell Collins, UTC group***Airbus subsidiary

138

OHB

STRATEGIC HIGHLIGHTS
Business trends

 OHB is Germany's leading aerospace company and the third-largest in Europe, in particular through its two

main subsidiaries OHB Systems and MT Aerospace AG. Supported by the German State, which is eager
to develop national expertise in the strategic space sector, OHB has seen rapid growth over the past years,
reaching a turnover of €1bn in 2018. Revenue grew by 16.4% year-on-year, driven by the ramp-up of the Galileo
programme and continued development work for the Ariane 6 programme.

 Operating income again increased, to €47.8m (+8% year-on-year), but at a slightly slower pace than revenue.
As a result, the company's operating margin slightly declined (4.8% in 2018 compared to 5.1% in 2017 and5.9% in 2016).

 In June 2019, OHB inaugurated new facilities at its Bremen site (Germany), including clean rooms andlaboratories (a new Satellite Test Center, for example). The investment amounted to €6m out of a total budget of€20m earmarked to upgrade the site and enable the group to strengthen its capabilities in the satellite segment.
Another clean room of about 1,500 m² is currently under construction and should be operational in the springof 2020.

Home market

 OHB generated 34% of its revenue in Germany in 2018, a share that has remained stable over the past years.
 In early 2018, the group signed a three-year, €13m contract to continue operating the SAR-Lupe satellite-based
reconnaissance system (including a constellation of satellites) for the German Army. The programme will later
be extended by the SARah satellite-based reconnaissance system.

 As part of the SARah programme, for which OHB is the prime contractor, the Federal Office of Bundeswehr

Equipment, Information Technology and In-Service Support (BAAINBw) awarded a new €91m contract to OHB
System AG, a OHB subsidiary, to integrate cybersecurity solutions into the satellite-based reconnaissancesystem.

Export markets

 OHB's export sales amounted to €645m in 2018, up 23% over the year, and were almost exclusively related tospace programmes. The weight of export turnover has exceeded 60% since 2014 and reached 66% in 2018.

 In late 2018, OHB Italia won a €168m contract from the Directorate of Defence of Luxembourg's Ministry ofForeign and European Affairs to supply a very high-resolution military observation satellite. The launch of thesatellite, called Naos, is scheduled for 2022.

 The group has a 23% stake (out of the 26% German share) in the Ariane 6 programme, the successor to Ariane

5, whose inaugural flight is scheduled for July 2020. In May 2019, MT Aerospace AG and ArianeGroup signed
two contracts with the European Space Agency (ESA) to develop and test the PHOEBUS (Prototype of aHighly OptimisEd Black Upper Stage) upper deck prototype. MT Aerospace AG is responsible for designing thematerials for the prototype's tanks and composite structures.

Technology and Innovation

 OHB's R&D expenditure reached €25.4m in 2018, representing 2.5% of revenue. More than 90% of theGroup's R&D expenses are related to the activities of the Space Systems division.

 OHB has been multiplying development partnerships. At the beginning of 2019, OHB System AG joined forces

with Airbus Defence & Space Netherlands in the field of thermal components for satellites. A few months
later, MT Aerospace AG entered into an alliance with Swiss company Oerlikon AM (Additive Manufacturing) todevelop 3D printing solutions for the aerospace and defence industries.

139

PATRIA OYJ

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017

 Armoured wheeled vehicles
 Weapon systems (turrets, mortar systems)
 C4ISTAR (ELINT systems, IT systems,

Revenue

428

490

467

476

∆ (%)

-10,17%

14,54%-4,63%

1,90%

Defence (%)

93%

95%

99%

96%

Export (%)

31%

41%

33%

27%

Operatingprofit/loss

47

75

35

36

Operatingmargin (%)

10,94%

15,23%

7,41%

7,54%

antennas) Aerostructures
 MRO, services and logistics support

GOVERNANCE
ChairmanPetri Vihervuori

Chief Executive Officer

Esa Rautalinko

Chief Financial Officer

Ville Jaakonsalo

2018

Net income

38

63

27

26

Order book

1 056

858

692

687

Employees*

2 806

2 765

2 792

2 791

*Average annual workforce.

OWNERSHIP STRUCTURE

REVENUE BY BUSINESS LINE (%)

Symbol18

Listed on

Unlisted groupMarket Cap

16

42

Major shareholders (as of 20.11.2019)
Finnish State

50,1%

Kongsberg Defence & Aerospace AS

49,9%

14
5

5

Millog*Aviation
Land

Systems
ISP**
Aerostructures*61,8% Patria-owned.
**International Support Partnerships.

MAIN JOINT VENTURES AND ASSOCIATESName%

REVENUE BY REGION (%)
Country

Millog Oy

61,8%FinlandNammo AS

50%

NorwaySvensk Försvarslogistik AB

50%

SwedenSilverskin Information
Security Oy

25%

FinlandMilrem LCM OÜ

60%

Estonia

AIM Norway

49,9%Norway73

Finland140

27

Rest of the World

Sa
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PATRIA OYJ

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Armoured wheeled vehicles
8x8 AMV, AMVXP and AMV28A
6x6 Patria
Weapon systems
NEMO container and NEMO
Navy turreted remote-controlled
120mm mortar systems
Advanced MOrtar System(AMOS) 120mm mortar turret
C4ISTAR
Advanced Real-time Intelligence
System (ARIS) and ARIS ELINT(ARIS-E) systems
Compact Airborne Networking
Data Link (CANDL)
Aerostructures
Composite components(A400M, NH90)
MRO, services, logistics support
Pilot training
MRO for aircraft (F/A-18 C/D,
Hawk Mk51/51A, Fokker F27,
C-295M) and helicopters (NH90,
Hkp16 Black Hawk, AW 169)
Aircraft engine MRO (F100)
Hamina-class fast attack craft
MRO
Military vehicle MRO(XA-180, XA-188, BV206)
Automatic weapon MRO

141

PATRIA OYJSTRATEGIC HIGHLIGHTS
Business trends

 Patria Oyj, 50.1% owned by the Finnish State and 49.9% by Norway's Kongsberg Defence & Aerospace, is a
Finnish defence and security company mainly involved in the supply of wheeled armoured vehicles (8x8 AMV
vehicles) and weapons systems (mortar turrets); pilot training programmes; as well as the maintenance of land,
air and naval platforms. The group is also active in the ammunition segment via Nammo AS, in which it owns
a 50% capital stake alongside the Norwegian State. Patria's turnover increased 1.9% to €476m in 2018, with
defence activities accounting for 96% of its sales.

 Patria pursued its internationalisation strategy with the May 2019 acquisition of a minority interest (49.9%)

in Aerospace Industrial Maintenance Norway (AIM Norway), a company providing maintenance services for
Norwegian Air Force aircraft. The remaining 50.1% are held by Kongsberg Defence & Aerospace. Patria also
took control of Belgium Engine Center (BEC), a MRO company that provides maintenance services for Pratt& Whitney's F100 engines (used on F-15 and F-16 fighter aircraft) and which was previously owned by AIM
Norway.

 In July 2019, Esa Rautalinko, previously Managing Director of Örum Group and Chairman of Patria's Board of
Directors since November 2018, was appointed Managing Director of the group. Petri Vihervuori replaced him
as Chairman of the Board.

Home market

 With nearly three-quarters of its sales generated in Finland in 2018, Patria remains highly dependent on its

domestic market. The group is in particular responsible for the maintenance and modernisation of Hamina-classfast attack craft as well as the supply of land bridging systems (including for four Leopard 2A4 tanks) for the
Finnish Defence Forces.

 In January 2019, the group won a pilot training contract from the Finnish Defence Forces. The contract also
covers the maintenance of training aircraft. A few months later, Senop, a Patria subsidiary, signed a letter of intent
with the Finnish Defence Forces for the development of laser sights and helmet-mounted image amplifiers.

 As part of the replacement of the Finnish F/A-18 Hornet fleet (planned retirement by 2030), Patria is preparing

to participate in the new Finnish fighter programme (HX Fighter Programme, whose cost is estimated between€7 and €10bn). The Finnish government's decision is expected in 2021.

Export markets

 Outside its domestic market, the group operates mainly in Europe (Sweden, Norway, Estonia and Poland), theUnited Arab Emirates, and South Africa.

 Milrem LCM, 60% owned by Patria and 40% by Estonian company Mootor Grupp, continued to expand its
activities in Estonia. The group opened a third site for the maintenance of Estonian Army vehicles.

 The Swedish Armed Forces exercised an option to continue the maintenance contract for the Hkp16 Black
Hawk helicopters, which now runs until 2020. The maintenance contract for the Norwegian Armed forces' fleetof NH90 helicopters was also extended until April 2020.

 In June 2019, Patria Belgium Engine Center (formerly BEC) won a seven-year contract for the maintenance of
the F100 engines (Pratt & Whitney) of the Royal Danish Air Force's (RDAF) F-16 fighter aircraft.

 In September 2019, the Japanese Army acquired two AMVXP armoured vehicles (the latest version of the

8x8 AMV vehicle, originally developed for the Finnish Army and now used by the Armed Forces of sevencountries). After a year-long test period, Patria could be chosen as part of an extended collaboration agreementthat includes technology transfer and the creation of an assembly line in Japan.

Technology and Innovation

 The group's R&D expenditure amounted to €9.1m in 2018, representing 1.9% of 2018 revenue.
142

POLSKA GRUPA ZBROJENIOWA (PGZ)

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017

2018

 Tracked and wheeled armoured vehicles
 Weapon systems and artillery systems
 Missile systems
 Aircraft systems (attack helicopters, UAS,

Revenue

N/A

N/A~1 175

1 056

MRO, modernisation)
 Defence electronics
 Military shipbuilding and naval MRO
 Energy and offshore (platform modules
and metallic structures)

∆ (%)

N/A

N/A

N/A

N/A

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

~16%

N/A

Operatingprofit/loss

N/A

N/A

N/A

N/A

Operatingmargin (%)

N/A

N/A

N/A

N/A

Net income

N/A

N/A

N/A

N/A

GOVERNANCE

Order book

N/A

N/A

N/A

N/A

Chairman of the Supervisory
Board
Chief Executive Officer

Employees

N/A

N/A

~17 500~ 17 500

Wojcieh Dabrowski
Witold Slowik

OWNERSHIP STRUCTURE

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap
N/A

Major shareholders (as of 20.11.2019)
Polish Department of the Treasury

37,13%

Polski Holding Obronny sp. z.o.o.
(formerly Bumar)

33,50%

Agencja Rozwoju Przemyslu S.A.

29,36%

MAIN JOINT VENTURES AND ASSOCIATES
NameCenzin sp. z.o.o.

REVENUE BY REGION (%)%

Country~70%

PolandNano Carbon sp. z.o.o.

51%

PolandHuta Stalowa Wola S.A.

85,1%

PolandZaklady Mechaniczne
Bumar - Labedy S.A.

94,3%

Poland

N/A

143

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POLSKA GRUPA ZBROJENIOWA (PGZ)

Pat

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Armoured vehicles
8x8 KTO Rosomak armoured wheeled vehicle
6x6 KTO Rosomak armoured wheeled vehicle
Armoured vehicles modernisation(Leopard 2A4/2A5, BWP-1 PUMA, TUMAK-4,
KTO Rosomak)
Weapon systems, artillery systems, missiles
KRAB 155mm self-propelled tracked howitzer
RAK 120mm self-propelled mortar system
PATRIOT air defence system (including PAC-3
MSE interceptors) (WISLA programme)
Naval Strike Missile (NSM)
Mk-82 bomb
Aircraft systems
Aircraft and turbofan engine MRO
and modernisation (Su-22, MiG-29, F-16, F100)
AW249 attack helicopter projectW-3 next-generation military helicopter project
Defence electronics
TRS-15 mobile medium-range 3D surveillance
radar
Military shipbuilding
Ratownik-class submarine rescue
and salvage vessel
Kormoran II-class mine-hunting vessel
HMS Artemis SIGINT vessel*Hanwha Techwin group**UTC group

144

POLSKA GRUPA ZBROJENIOWA (PGZ)

STRATEGIC HIGHLIGHTS
Business trends

 Polska Grupa Zbrojeniowa (PGZ) is a conglomerate of more than 60 Polish companies operating in the fields ofdefence, shipbuilding, offshore and new technologies.

 The group's turnover remained stable at around PLN 4.5bn (around €1.1bn). By 2030, PGZ aims to achieve aturnover of around PLN 12bn (€2.9bn).

 In August 2019, Wojskowe Zakłady Elektroniczne, a subsidiary of PGZ, inaugurated a new production andmaintenance centre for naval strike missiles (NSM). The investment is part of an offset agreement signed withKongsberg for the supply of NSM missiles to the Polish Army.

Home market

 The group remains highly dependent on its domestic market. It is the main beneficiary of the extensive

programme to modernise the Polish Armed Forces and is an essential partner for foreign players wishing toenter the Polish defence market.

 In September 2018, PGZ and Boeing signed a letter of intent to collaborate on the latter's Apache AH-64
helicopters, which could be selected by the Polish Ministry of Defence as part of the Kruk programme(acquisition of 32 attack helicopters).

 PGZ is also collaborating with Leonardo on the new AW249 attack helicopter, initially intended to replace the
Italian Army's AW129 and which could also be chosen as part of the Kruk programme.

 In March 2019, Lockheed Martin signed an offset agreement of PLN 724.8m (€168.4m) with PGZ as part of thePolish Army's Wisla programme (acquisition of Raytheon's Patriot defence system, which integrates Lockheed
Martin's PAC-3 MSE interceptor missiles). The agreement in particular includes technology transfers in the fieldof missile production.

 In April 2019, the Polish Ministry of Defence signed a €90m offset agreement with Leonardo MW (Leonardo's
British subsidiary) for the acquisition of four AW101 helicopters dedicated to anti-submarine warfare. The offset
obligations include the installation of a maintenance centre for AW101 helicopters at the site of Military Aviation
Works No.1, a subsidiary of PGZ.

 In August 2019, Huta Stalowa Wola, a PGZ subsidiary, also won a contract worth more than PLN 1bn (€235m)
to supply 24 artillery ammunition supply vehicles to the Polish Army.

Export markets

 South America, the Middle East and Southeast Asia are PGZ's target export markets.
 In November 2018, PCO, a subsidiary of PGZ, signed a cooperation agreement with Indonesian state-owned

defence company PT Pindad. As part of the agreement, PCO and PT Pindad will jointly develop optronicsystems for armoured vehicles produced by the Indonesian group.

 In 2019, PGZ for the first time participated in the IDEX (International Defence Exhibition and Conference) in
Abu Dhabi. The group also participated in the SITDEF conference in Peru. PGZ intends to play a key role in themodernisation programmes of the South American Armed Forces.

 As a subcontractor of Saab AB, Polish Nauta Shiprepair Yard (a subsidiary of PGZ) is involved in the constructionof the Swedish Navy's future electronic intelligence vessel, the HMS Artemis (with delivery scheduled for 2020).

Technology and Innovation

 At the end of 2019, PGZ and PZL Swidnik, the Polish subsidiary of Italian defence group Leonardo, unveiled anext-generation military helicopter concept called W-3, based on the PZL W-3 Sokół model.

145

QINETIQ

KEY FIGURES (Fiscal year ended: March 31st)

BUSINESS AREAS
Engineering support services
and systems integrator

 Aerospace (aerostructures, propulsion)
 Engineering services and naval systems
development/integration
 Site and test centre management
 C4ISR Robotics
 Cybersecurity

GOVERNANCE
Chairman

Neil Johnson

Chief Executive Officer

Steve Wadey

Chief Financial Officer

David Smith

2015-16

2016-172017-18

Revenue

1 032

931

943

2018-19
1 033∆ (%) [£]*

-7,79%

3,63%

6,37%

9,38%

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

21%

22%

27%

30%

Operatingprofit/loss

103

158

160

129

Operatingmargin (%)

9,96%

16,95%

16,93%

12,49%Net income**

145

147

156

129

Order book

1 595

2 545

2 292

3 652

Employees

6 207

6 154

6 065

6 061

*Variation based on revenue in local currency.
See €/£ exchange rates p.7.
**Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolListed onMarket Cap (£m)€ millions

QQ.
London Stock Exchange
1 910

Major shareholders (as of 20.11.2019)75

Schroder Investment Management Ltd.

9,56%

DWS Investment Management
Americas, Inc.

5,81%

Silchester International Investors LLP

4,96%

Investec Asset Management Ltd.

4,95%

25

EMEA Services
Global Products

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%CountryInzpire Group Limited

85%

UnitedKingdom

BQ Solutions QSTP-LLC

49%

Qatar

Houbara Defence& Security LLC

49%

UAE

QinetiQ Dar Massader
QDM Ltd

49%

Saudi
ArabiaRedu Space Services S.A

48%

Belgium

12
7

70

6
4

United Kingdom
United States
Europe (excl. UK)

146

1

Australia
Middle East
Rest of the World

Military aircraft
UCAV Taranis demonstrator
Canadian Armed Forces' Unmanned Aircraft System
Service programme**
Avionics (Royal Air Force's Eurofighter Typhoon
and F-35 fighter aircraft)
Naval platform and systems
Type 26 frigate (Global Combat Ship programme)
Queen-Elizabeth aircraft carriers (electronic systems)
Naval systems integration (C4ISR and combat systems)
Electromagnetic Aircraft Launch System (EMALS)
Advanced Arrester Gear (AAG)
Services
Aeronautics services (engineering, test centre management, training)
Naval Combat Systems Engineering Course
Target systems (Banshee, Rattler)
C4ISR
OBSIDIAN counter drone system
Modular Eletronic Warfare System (MEWS)Space systems
International Berthing and Docking Mechanism (IBDM)
Communication satellite systems and maintenanceand operation services for ground-based equipment
Robotics
Reconnaissance, security and counter-IED operations
robots (Dragon Runner, TALON, Spartacus, MAARS)*Merger of L3 Technologies and Harris Corporation**Based on Skeldar V-200 UAV (UMS Skeldar, joint venture between Saab AB and UMS Aero)

147

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSSy
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QINETIQQINETIQSTRATEGIC HIGHLIGHTS
Business trends

 QinetiQ, a former research agency of the British Ministry of Defence (MoD) that became a public-private
partnership in 2002 and was listed on the stock exchange in 2006, is a British technology company mainly
active in the defence and security sectors. The group generates more than 70% of its turnover with the British
and U.S. governments. Its turnover increased by 9.4% to £911m (€1.03bn) during fiscal year 2018/2019, driven
by its Global Products division.

 QinetiQ strengthened its position in training solutions for armed forces with the October 2018 acquisition ofGerman airborne training services company EIS Aircraft Operations (renamed QinetiQ Germany) for €53m,
as well as the purchase of 85% of UK-based Inzpire Group Ltd for £23m (€26m), with an option to increase its
stake to 100% within two years.

 In October 2019, the group announced the acquisition of Manufacturing Techniques Inc. (MTEQ), an American

supplier of sensors for the U.S. Army, for $105m (€96m). The operation will enable QinetiQ to double its
turnover in the United States.

 In partnership with the Royal Navy, QinetiQ is investing £18m (€20m) at its Portsdown Technology Park site in
the United Kingdom to create a research centre (Centre of Excellence for Maritime Mission Systems).

Home market

 The British government is the group's main customer. QinetiQ is a partner of BAE Systems on the Queen

Elizabeth aircraft carrier programme as well as the Royal Navy's T26 frigates. At the end of 2018, the groupjoined a consortium led by Cobham for the future ASDOT (Air Support to Defence Operational Training)
programme of the British Ministry of Defence. However, the programme was postponed due to the excessive
costs of the bids submitted by the four competing groups led by Cobham, Babcock, Thales UK and Leonardo.

 In April 2019, QinetiQ signed a £1.3bn (€1.5bn) contract with the MoD to upgrade 16 critical defence
infrastructures in the United Kingdom until 2028.

 As part of the MoD's R-GNS (Robust Global Navigation System) programme, QinetiQ is responsible fordeveloping secure satellite receivers by 2022 (a contract worth £67m, or €75m).

 QinetiQ is involved in the Royal Navy's Operational Assessment of Signatures Informing Susceptibility (OASIS)

programme to reduce acoustic and electromagnetic signals from ships and submarines, a contract worth£18.7m (€20.4m). In June 2019, the group also signed a five-year contract with the Royal Navy to develop a
training version of its POINTER guidance system.

Export markets

 QinetiQ generated 30% of its turnover from exports in 2018/2019 (up 9 percentage points in three years), a
share that the group aims to raise to 50%.

 In the United States, the group's second-largest market, the QinetiQ North America subsidiary was chosen by

the U.S. Army to provide small ground robots ($164m, or €126m, over seven years) and support services for
TALON robots until 2023 ($90m, or €79m).

 In partnership with Canadian UAVs, Leonardo, UMS SKELDAR (a joint venture between Saab AB and
UMS AERO) and L3 WESCAM, QinetiQ was awarded a CAD$ 51m (€34m) contract to supply the CanadianArmed Forces' new surveillance drones, which will be based on the UMS SKELDAR V-200 UAVs.

 In early 2019, the group opened an office in Kuala Lumpur (Malaysia) to strengthen its presence in Asia.
Technology and Innovation

 QinetiQ is leading a three-year research project (with a budget of £3.2m, or €3.6m) to develop electric propulsion
systems for future British combat vehicles.

148

RAFAEL ADVANCED DEFENSE SYSTEMSKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier€ millions

2015

2016

2017

2018

 Missile systems, air and maritime defence

Revenue

1 819

1 834

1 999

2 195

systems Unmanned systems
 C4ISR Weapon systems and artillery systems(land and naval)

 Defence electronics (countermeasures,protection systems)

 Space (microsatellites, propulsion systems,
structures)

GOVERNANCE
ChairmanUzi Landau

Chief Executive Officer

Yoav Har-Even

Chief Financial Officer

David Vaish

OWNERSHIP STRUCTURE∆ (%) [$]*

2,96%

0,59%

11,23%

14,79%

Defence (%)

100%

100%

100%

100%

Export (%)

61%

45%

46%

45%

Operatingprofit/loss

112

103

N/A

N/A

Operatingmargin (%)

6,13%

5,59%

N/A

N/A

Net income

106

111

110

113

Order book

4 555

5 366

5 753

5 921

Employees

6 926

7 151

~7 500~7 500*Variation établie sur la base du CA en dollar américain.
See €/$ exchange rates p.7.

REVENUE BY BUSINESS LINE (%)

SymbolListed on

Unlisted groupMarket Cap

N/A

Major shareholders (as of 20.11.2019)
Israeli State

100%

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

Shilat Optronics Ltd

50%

IsraelOpgal Optronic
Industries Ltd

49,9%IsraelGESPI Defense Systems

40%

BrazilEuroSpike GmbH

20%

Germany

Controp Precision
Technologies Ltd

50%

IsraelKalyani Rafael Advanced
Systems Pvt Ltd (KRAS)

49%

India

Varley Rafael
Australia (VRA)

N/AAustralia

Astra Rafael Comsys
Pvt Ltd

N/A

India

N/A

149

Lo
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RAFAEL ADVANCED DEFENSE SYSTEMSIAI

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Missile systems and air defence systems
David's Sling long-range air defence
system and Stunner interceptor
Iron Dome short-range air defence system
Tamir interceptor (Iron Dome, C-Dome)SPYDER SR and SPYDER MR-ADS
air defence systems
Barak 1 and Barak 8 surface-to-air
defence systems
C-Dome and MIC4AD defence systems
Typhoon stabilized naval remotelycontrolled weapon station family
Spike family of missile systems (Spike ER/
LR and ER2/LR2 anti-tank missile systems,
Spike NLOS multi-purpose missile system)
SPICE 250/1000/2000 guidance kit
Trophy Active Protection System (APS)
Drone Dome anti-UAV system
Defence electronics
Electro-optical seekers
LITENING advanced targeting pod
Unmanned system
Protector USV
Weapon systems and artillery systems
SAMSON remote control weapon station
familyCommunication systems
BNET software defined radio family

150

RAFAEL ADVANCED DEFENSE SYSTEMSSTRATEGIC HIGHLIGHTS
Business trends

 Rafael is an Israeli defence technology company 100% owned by the Israeli State, and one of Israel's leading
defence contractors alongside Elbit Systems and Israel Aerospace Industries (IAI). The group mainly provides
air defence systems, defence electronics solutions, communication solutions, UAVs and weapons, and artillery
systems. It generates 100% of its sales in the military sector.

 Rafael's turnover increased 14.8% to $2.6bn (€2.2bn) in 2018.
 In September 2019, Rafael and Israeli businessman Avichai Stolero jointly completed the 50:50 acquisition of

Israeli drone manufacturer Aeronautics Ltd. The acquisition is part of Rafael's diversification strategy, which thegroup has been pursuing for several years.

Home market

 In 2018, Rafael generated a little more than half of its turnover (55%) on its domestic market. A key partner of theIsraeli Army, the group provides the Iron Dome anti-missile system and the TROPHY active protection system
for the Israel Defense Forces' Merkava MK IV tanks.

 In early 2018, Rafael was selected by the Israeli Army to supply new shoulder-fired missile launchers, which had
been under development for two years in order to reduce their weight by 40%.

Export markets

 Asia, Europe, the Americas and Australia are the group's main export markets. Rafael generated about 45% of
its sales in these markets in 2018.

 In May 2019, Rafael partnered with Lockheed Martin to develop, manufacture and maintain its SPICE air-tosurface guidance kits for the U.S. market. A month later, the group teamed with Britain's Cobham to market its
I-Derby missiles in combination with Cobham's Fox-10 launchers.

 In June 2019, Eurospike GmbH, a joint venture between Rafael, Diehl Defence and Rheinmetall Defence,

signed a €40m contract with Estonia to supply Spike LR anti-tank missiles, making Estonia the 32nd customer
country of the Spike missile.

 India is a key target market for Rafael, which has been investing in the country for several years. In early 2019,
Astra Rafael Comsys (ARC), a joint venture between Rafael and India's Astra Microwave Products, won its
first contract to supply BNET software radios ($30m, or €26.8m). A few months later, a $100m contract
was awarded to the Kalyani Rafael Advanced Systems joint venture (KRAS, 51% owned by Kalyani Strategic
Systems and 49% by Rafael) to supply 1,000 Barak 8 MR-SAM missiles to Indian ammunition and missile
systems manufacturer Bharat Dynamics, which will be in charge of their integration. Rafael's offer to supply
Spike missiles, on the other hand, was once again rejected by the Indian government (a contract estimated at$500m, or €446m).

 In October 2019, Rafael and its partner Leonardo DRS (Leonardo's U.S. subsidiary) delivered the first TROPHY

active protection system to the U.S. Army. Developed by Rafael and Elta Systems (a subsidiary of IAI), the
TROPHY system, which is produced in Israel by Rafael and in the United States by Leonardo DRS, will equip the
U.S. Army's Abrams tanks under a contract worth approximately $500m (€446m). In 2019, the U.S. Army alsoacquired two Iron Dome anti-missile systems jointly developed by Rafael and Raytheon.

Technology and Innovation

 The group's R&D expenses remained stable at 8% of sales in 2018.
 In June 2019, the group unveiled a new artificial intelligence technology integrated into the SPICE-250 guidance

kit, which allows for automatic target recognition. At the Aero India 2019 exhibition, Rafael also unveiled Rocks,
a new long-range air-to-surface missile.
151

RAYTHEON COMPANYKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Missiles producer, systems integrator/equipment
supplier Missile systems
 Integrated defence systems (radar systems,
electronic suites, air defence)

 C5ISR systems
 Cybersecurity
 Space and airborne systems
 Training and support services
GOVERNANCE
Chairman and CEO
VP Integrated Defense
Systems
VP Space & Airborne
Systems

Roy Azevedo

2015**

2016**

2017

2018

Revenue

21 01021 79222 43222 911∆ (%) [$]*

2,17%

3,44%

5,07%

6,75%

Defence (%)

95%

95%

96%

95%

Export (%)

31%

32%

32%

30%

Operatingprofit/loss

3 352

3 519

3 744

3 843

Operatingmargin (%)

15,96%

16,15%

16,69%

16,77%Net income***

1 901

2 027

1 791

2 463

Thomas A. Kennedy
Ralph Acaba€ millions

Order book

31 07334 82831 86837 048

Employees

61 00063 00064 00067 000*Variation based on revenue in local currency.
See €/$ exchange rates p.7.
**2015 and 2016 figures restated.
***Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolRTN

Listed on

NYSE

Market Cap ($m)

61 52323

30

Major shareholders (as of 20.11.2019)
The Vanguard Group, Inc.

8,19%

Capital Research & Management Co.

5,46%

SSgA Funds Management, Inc.

4,19%

BlackRock Fund Advisors

2,59%

Copeland Capital Management LLC

2,56%

2

23

22

Missile Systems
Space & Airborne Systems
Integrated Defense 		
Systems

Intelligence, Information& Services
Forcepoint

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

NetFires LLC

50%

United States

Forcepoint LLC

88,5%

United States

Raytheon-Lockheed
Martin Javelin JV

50%

United States

TRS AMDC2

50%FranceRGNext50%

United States

15
70
10
5
United States
North Africa
and Middle East
*Mainly Europe.

152

Asia/PacificRest of the World*

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RAYTHEON COMPANY

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Integrated defence systems
AMDR AESA naval radar (AEGIS)
AN/TPY-2 ground-based surveillance radar(THAAD)
PATRIOT missile defence system(integrator)
Iron Dome air defence system
and Stunner interceptor (David's Sling)
Norwegian Advanced SAM System(NASAMS)
DDG-1000 Zumwalt-class (prime mission
systems equipment integrator for all
electronic and combat systems)
Weapon systems
NSM / JSM anti-ship missiles
FMG-148 JAVELIN anti-tank missile
AIM-9 Sidewinder air-to-air missiles family
SM-2, SM-3, SM-6 interceptors family
AIM-120 AMRAAM air-to-air missile
Rolling Airframe Missile (RAM) Block 2A
TOMAHAWK cruise missile
TOW anti-tank missile
GBU-53/B Stormbreaker guided glide bomb
EXCALIBUR artillery projectile
Aerospace systems
Enhanced Integrator Sensor Suite (EISS)of the Global Hawk HALE UAS
Next Generation Jammer Mid-Band(NGJ-MB) advanced electronic attack
system*Merger of L3 Technologies and Harris Corporation **Huntington Ingalls Industries

153

RAYTHEON COMPANYSTRATEGIC HIGHLIGHTS
Business trends

 Raytheon is an American defence contractor specialised in missile systems and military electronics. It is theworld's fourth-largest arms manufacturer by sales, with total revenue of $27.1bn (€22.9bn) in 2018, up 6.7%
year-on-year.

 The group generates 95% of its revenue from defence activities, a share that has remained relatively stable
over the past years. Its four main divisions (Integrated Defense Systems; Intelligence, Information and Services;
Missile Systems; Space and Airborne Systems) generate almost all of their sales in the military sector.

 In June 2019, Raytheon and United Technologies Corporation (UTC) announced a plan for a merger of equals.

The agreement, which remains subject to approval by competition authorities, should be completed during
the first half of 2020. UTC's Otis (elevators) and Carrier (air conditioning and refrigeration equipment) divisions
are expected to be separated as part of the merger process. The new entity, named Raytheon Technologies
Corporation, 57% owned by UTC and 43% by Raytheon, is expected to generate revenues of approximately$74bn (€62.7bn), over half of which from defence activities.

Home market

 Raytheon generates about 70% of its turnover on the American market. The group is a preferred partner of
the U.S. Department of Defense, of which it is the third-largest supplier, behind Lockheed Martin and Boeing.

 In June 2018, Raytheon was among the players chosen by the U.S. Army Contracting Command (ACC) for theEnterprise Training Services Contract (ETSC), a 5-year, $2.4bn (€2.1bn) programme to provide training services
to the U.S. Army.

 In February 2019, Raytheon signed a 5-year, $406m (€358m) contract with the U.S. Army to supply ARC-231A

radios for several helicopter types, including the Sikorsky UH-60 Black Hawk (Lockheed Martin), the Eurocopter
UH-72 Lakota (Airbus Helicopters) and the AH-64 Apache (Boeing).

 Raytheon and Germany's Rheinmetall Defence, which have been partners since late 2018 to supply the Lynxarmoured fighting vehicle to the U.S. Armed Forces, in August 2019 joined forces with U.S.-based Pratt & Miller
Defence as part of the U.S. Army's programme to replace the Bradley infantry fighting vehicle with an Optionally
Manned Fighting Vehicle (OFMV).

Export markets

 The share of export sales (including through FMS procedures) reached 30% in 2018, slightly down compared
to 2017, but still significantly higher than in 2010 (+7 percentage points over the period). The Integrated Defense
Systems division has around 50 foreign customers.

 In December 2018, the British Ministry of Defence awarded Raytheon UK a £250m (€282m) contract for
support services to the Royal Air Force's fleet of Shadow surveillance aircraft. Raytheon's local subsidiary will
also be in charge of upgrading the aircraft fleet to its Mk2 version.

 Raytheon signed two contracts with Qatar in July 2019, for a total amount of $2.2bn (€2bn), to supply its
Advanced Medium-Range Air-to-Air Missile (AMRAAM) system, the upgraded AMRAAM-ER (Extended
Range) system, as well as additional Patriot surface-to-air missile systems.

 In August 2019, Bahrain officially became the 17th customer country of the Patriot air defence system. The$2.5bn (€2.2bn) contract, approved by the U.S. government via a FMS procedure, includes the sale of 60 Patriot
PAC-3 missiles, 36 MIM-104E Patriot GEM-T (Guidance Enhanced Missiles), nine M903 launching stations andtwo AN/MPQ-65 radars.

Technology and Innovation

 Raytheon's self-financed R&D expenses amounted to $841m (€712mn) in 2018, up 20.1% over the year.
154

RHEINMETALL DEFENCEKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS€ millions

2015

2016

2017

2018

Revenue

2 591

2 946

3 036

3 221

Defence division of German Rheinmetall AG∆ (%)

15,67%

13,70%

3,05%

6,09%

 Armoured vehicles
 Turret systems and weapon systems
 Air defence systems
 Ammunition
 Defence electronics and C4ISR
 Simulation and training solutions

Defence (%)

100%

100%

100%

100%

Export (%)

68%

73%

71%

65%

Operatingprofit/loss

90

147

174

254

Operatingmargin (%)

3,47%

4,99%

5,73%

7,89%

Platform manufacturer and systems integrator/
equipment supplier

GOVERNANCE
Chairman and CEO

Armin Papperger

Head of Vehicle Systems

Ben Hudson

Head ofWeapon & Ammunition

Alexander SagelOWNERSHIP STRUCTURE

Net income

32

74

100

N/A

Order book

6 422

6 656

6 416

8 577

Employees

9 581

10 00210 251

10 948REVENUE BY BUSINESS LINE (%)*

SymbolListed on

Unlisted divisionMarket Cap

31
45

Major shareholders (as of 20.11.2019)
Rheinmetall AG

24

100%

Vehicle Systems
Weapon & Ammunition

Electronic Solutions*Revenue distribution based on total sales excluding eliminations.

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

ARTEC GmbH64%

Germany

Rheinmetall
BAE Systems Land

55%

UnitedKingdom

Rheinmetall MAN Military
Vehicles GmbH51%

Germany

Projekt System& Management GmbH50%

Germany

EuroSpike GmbH40%

Germany

20
19

35

21
Germany
Asia
Europe(excl. Germany)

155

5

North America
Rest of the World

W
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RHEINMETALL DEFENCE

N

KM

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Armoured vehicles
8x8 Boxer infantry fighting vehicle
Fuchs/Fox armoured personnel carrier
4x4 AMPV light armoured vehicle
Main Ground Combat System (MGCS)
project
Lynx infantry fighting vehicle
Puma infantry fighting vehicle
HX and SX high mobility logistic
vehiclesTurret systems and weapon systems
PzH 2000 155mm self-propelled
howitzer
L44 and L55 120mm tank guns
(Leopard 2, M1 Abrams)
LANCE and LANCE RC turret systems
Ammunition
Large-calibre (120mm, 155mm)
and medium-calibre (20mm, 25mm,
27mm and 30mm) artillery ammunition
Air defence systems
Oerlikon Skyshield / MANTIS
short range ground-based
air defence system
Simulation and training solutions
Flight simulators (MiG-29K, Eurofighter
Typhoon, NH90, A400M)
Future soldier systems
Gladius / Argus soldier systems*KNDS group **SC Group156

RHEINMETALL DEFENCESTRATEGIC HIGHLIGHTS
Business trends Rheinmetall AG (€6.1bn in revenue in 2018) is a German industrial conglomerate specialised in defence andautomotive equipment through its two divisions Rheinmetall Defence and Rheinmetall Automotive.

 Rheinmetall Defence's turnover reached €3.2bn in 2018, up 6.1% year-on-year. Growth was driven by the
Vehicle Systems (+5.9%) and Electronic Solutions (+21.4%) activities.

 In November 2018, Rheinmetall Defence announced it was in talks to acquire German defence company

Krauss-Maffei Wegmann GmbH & Co., which owns 50% of KNDS (a joint venture with France's Nexter), inview of merging its own defence assets with KNDS. To succeed, the transaction would require the agreementof the French government, which owns the 50% share in KNDS through state-owned Nexter and is keen to
maintain a balance between the French and the German part of KNDS.

 In January 2019, Rheinmetall AG acquired 55% of BAE Systems' Land UK tank and combat vehicle division for£29m (€33m) in view of creating a joint venture named Rheinmetall BAE Systems Land (RBSL). BAE Systems'
land business in the U.S. is not affected by the agreement. The merger allows ARTEC GmbH, a joint venture
between Rheinmetall Defence and KMW (KNDS) to be selected for the Mechanised Infantry Vehicle (MIV)
programme involving the supply of 500 vehicles, most of which will be produced in the United Kingdom.

Home market

 Germany is an important market for Rheinmetall Defence, which generated 35% of its turnover in the country
in 2018 (compared to 29% in 2017). The planned increase in Germany's defence budget (€44.9bn in 2020 andover €48bn in 2023) offers opportunities for the Rheinmetall AG division.

 Rheinmetall Defence has partnered with Raytheon to provide the Patriot system as part of the German Army's

TLVS programme. Their offer is in competition with Lockheed Martin's, which has partnered with MBDA
Deutschland and Diehl Defence. The contract might be awarded in 2020.

 Rheinmetall Defence signed several contracts with the German Army in 2019, including a €92m contract in June2019 to supply 252 high mobility military trucks of the HX range, and a €470m contract in July 2019 to upgrade
41 Puma armoured infantry fighting vehicles (IFV), among others.

Export markets

 Rheinmetall Defence has a strong international presence (65% of revenue in 2018). The division intends tostrengthen its international presence, in particular in Eastern Europe, the Middle East / North Africa region, Asia
and Australia.

 During the summer of 2018, Rheinmetall Defence won two contracts with the Australian Army: a €2.1bn

contract to supply 211 Boxer armoured fighting vehicles to the ARTEC GmbH consortium (in partnership with
KMW) by 2026 (LAND 400 phase 2 programme), and a €890m contract to supply 1,044 logistics trucks by 2024
(LAND 121 phase 5B programme).

 Because of their failure to deliver their prototype of the Lynx KF41 armoured fighting vehicle by October 1, 2019,

Rheinmetall Defence and Raytheon (partners in the programme since October 2018) were excluded from thecall for tenders for the future OMFV (Optionnally Manned Fighting Vehicle) of the U.S. Army's Next-Generation
Combat Vehicle (NGCV) programme (replacement of the Bradley armoured infantry fighting vehicles).

Technology and Innovation

 R&D expenditure increased by 31.2% in 2018, reaching €143m (4.4% of total revenue).
 A contract for a system architecture study of the future French-German Main Ground Combat System (MGCS)

could be awarded in early 2020 to the three contractors involved in the programme (Rheinmetall Defence, KMW
and Nexter).
157

ROHDE & SCHWARZKEY FIGURES (Fiscal year ended: June 30th)

BUSINESS AREAS
Systems integrator/equipment supplier Test and measurement systems
 Broadcast solutions
 Communication systems for ground,
air and naval forces
 ISR and defence electronics
 Cybersecurity

GOVERNANCE
Chairman and CEO
President and Chief Operating
Officer

Christian Leicher
Peter Riedel€ millions

2014-152015-16

2016-172017-18

Revenue~1 850~1 920~1 950~2 040

∆ (%)

N/A

N/A

N/A

N/A

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

N/A

~85%

Operatingprofit/loss

N/A

N/A

N/A

N/A

Operatingmargin (%)

N/A

N/A

N/A

N/A

Net income

N/A

N/A

N/A

N/A

Order book

N/A

N/A

N/A

N/A

Employees

9 900

10 00010 50011 500REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed onMarket Cap

Unlisted group

Major shareholders (as of 20.11.2019)
Family shareholders

N/A

N/A

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

RRS-MITCOS

25,1%

Germany

DICOM

N/A

Czech
Republic

35
38

7EuropeAsia/Pacific
Americas158

20

Africa /Middle Eastce

ROHDE & SCHWARZ

German Armed Forces' joint radio system(SVFuA programme)
SOVERON VR tactical radio for vehicularand semi-mobile communications
SOVERON AR software defined airborne radio
R&S SDAR software defined airborne radio (CH-47)
R&S M3SR Series4100 radio family for stationary
and shipborne communications
R&S M3AR VHF/UHF transceiver family
for airborne communications (Eurofighter, NH90)
R&S MR6000A transceiver (A400M)
Shipboard communication systems
NAVICS system for internal and external communications(Type 26, F125, K130)
RIFAN 2 IP network for the French NavyISR and defence electronics
R&S Wideband Processing Unit (WPU) 2000
next-generation ELINT processor
R&S RAMON COMINT/CESM softwares
NGWS' defence electronics (FCAS programme)
Encryption system
ELCRODAT 4-2 encryption system
Anti-UAV system
R&S ARDRONIS solution for automated radio-controlled
drone protection (part of the GUARDION anti-UAV system)
Message handling systems
R&S STANAG 5066 and R&S MMHS
message handling systems

159

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Ai

IT

en
H

ES
M

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ie
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Software defined radios

ES

hl

D

dt

ef
en

ce

ef
en

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSROHDE & SCHWARZSTRATEGIC HIGHLIGHTS
Business trends

 Rohde & Schwarz, a German family-owned group, is a leading provider of test and measurement, broadcastingand secure communications solutions. In the defence sector, the group offers communication systems,
including software radios, ISR systems and defence electronics systems. Its turnover reached €2.04bn for the
2017/2018 fiscal year.

 In 2018, Rohde & Schwarz and Rheinmetall formed a joint venture, RRS-MITCOS (Rheinmetall - Rohde &Schwarz - Military IT and Communications Solutions), which will participate in the tender for the Bundeswher's
Digitisation of Land-based Operations (D-LBO) programme. Rheinmetall owns 74.9% of the joint venture,
Rohde & Schwarz the remaining 25.1%.

 A year later, Rohde & Schwarz joined forces with Czech electronics company MESIT to create the DICOM joint
venture (majority-owned by MESIT), which initially will be dedicated to R&D in the field of SOVERON softwareradios.

Home market

 Rohde & Schwarz is participating, as an electronic equipment manufacturer, in various programmes of theGerman Army (renewal of the Sea KING Mk.41s helicopter fleet, D-LBO programme, etc.). It has also teamedwith Hensoldt, Diehl Defence and ESG within the German FCMS (Future Combat Mission System) consortium
to participate on the defence electronics part of the European Next-Generation Weapon System (NGWS) as
part of the Future Combat Air System (FCAS) programme.

 The group is responsible for the supply of software radios for the 18 Airbus NH90 Sea LION helicopters of theGerman Navy, which will replace the ageing fleet of Sea KING Mk.41s helicopters. The first units are expected
to be delivered by the end of 2019.

 As part of the D-LBO programme, Rohde & Schwarz is providing the German Armed Forces' joint radio system(also known as SVFuA) for the Bundeswehr's PUMA and BOXER armoured vehicles. As a subcontractor of
Rheinmetall Electronics, the group also supplies the latest generation of software radios for PUMA vehicles.

Export markets

 In April 2018, Rohde & Schwarz was selected by Boeing to equip the latter's CH-47 Chinook helicopters with its
latest-generation software radios (R&S SDAR).

 In March 2019, the French defence procurement agency (DGA) awarded the Industry Grouping led by Airbus

and composed of Naval Group and Rohde & Schwarz the €150m RIFAN 2.1 contract for the maintenance andmodernisation of the French Navy's current IP network. The RIFAN 2 network will have to meet the new needsof the French Navy (network integration of new vessels, including future FDI frigates; modernisation of thesurveillance and detection system for cybersecurity incidents, etc.).

 As a subcontractor of BAE Systems, Rohde & Schwarz is supplying the SOVERON family of software-definedradios (SDR) for the Royal Navy's River-class offshore patrol vessels. The group is also participating in the Type
26 frigate programme, for which it is designing the integrated communications system (based on its NAVICS
systems).

Technology and Innovation

 At the 2019 Defence & Security Equipment International (DSEI) exhibition in London, Rohde & Schwarz

unveiled new solutions, including the next-generation ELINT R&S WPU2000 processor and COMINT/CSEM
R&S RAMON software.

 In partnership with ESG and Diehl Defence, Rohde & Schwarz also presented the GUARDION UAV
countermeasures system, which integrates its R&S ARDRONIS UAV countermeasures system.

160

ROLLS-ROYCE

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Engine manufacturer

 Aircraft, helicopter and UAS propulsion
 Naval propulsion (gas turbines, nuclear reactors,
diesel engines) Civil nuclear energy Distributed generation system
 Services and MRO
GOVERNANCE
ChairmanIan Davis

Chief Executive Officer

Warren East

President, Defence

Tom Bell

2015

2016

2017***

2018

18 39416 80915 58817 025∆ (%) [£]**-3,68%

3,21%-0,81%

10,21%

Defence (%)

23%

25%

23%

21%

Export (%)

87%

88%

88%

90%

Résultatd'exploitation*

2 055

1 116

349

696

Operatingmargin (%)*

11,17%

6,64%

2,24%

4,09%

Net income*

1 489

673

50

345

Order book104 086

94 52162 00770 503

Employees

50 50049 90050 00054 500*Underlying and after eliminations.
**Variation based on revenue in local currency.
See €/£ exchange rates p.7.
***2017 figures restated.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolRR

Listed on

LSEMarket Cap (£m)€ millions
Revenue*

14 036

Major shareholders (as of 20.11.2019)
ValueAct Capital Management LP

9,35%

Baillie Gifford & Co.

5,26%

Harris Associates LP

5,01%

Causeway Capital Management LLC

4,04%

22
48

20
5

Civil Aerospace
Power Systems
Defence5

ITP AeroNon-core businesses*

*Including L'Orange (Rolls-Royce Power Systems subsidiary) andCommercial Marine, businesses respectively sold on 2018 and 2019.

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)*
34

Name

%

Country

AirTanker Holdings Ltd

20%

United Kingdom

EUROJET Turbo GmbH46%

Germany

EPI Europrop
International GmbH44%

Germany

LHTEC

50%

United States

MTU Turbomeca
Rolls-Royce GmbH

33,3%

Germany

TAEC Aircraft Engine
Industry Corporation

49%

Turkey102
2 4

United Kingdom
North America
Europe (excl. UK)
Asia/Pacific2523Middle East
South America
Africa 			and Rest of the World*Revenue distribution based on total sales excluding eliminations.

161

Sa
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ROLLS-ROYCE

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Aircraft engines
RB199 turbojet engine (Tornado)
EJ200 turbojet engine (Eurofighter)
LiftSystem (F-35B)
Adour turbojet engine (BAE Hawk AJT)
TP400-D6 turboprop engine (A400M)
T56 and AE2100 turboprop engines (C-130)
AE3007 turbojet engine (EMB145 AEW&C)
Tempest fighter aircraft programme
Hypersonic propulsion systems project
Helicopter engines
MTR390-E turboshaft engine (Tiger)
CTS800 turboshaft engine(Dhruv, A129, UH-1Y, AW159 Wildcat)
AE1107 turboshaft engine (V-22 Osprey)
M250 turboshaft engine(OH-58D, AH-6, RQ-8A)
UAS propulsion
AE3007 turbojet engine (RQ-4 Global Hawk,
MQ-25 Stingray and MQ-4C Triton)
Naval and submarines propulsion
MT30 gas turbine(Queen Elizabeth-class aircraft carriers,
T26-class frigates, Hunter-class frigates)
WR-21 gas turbine (T45-class destroyers)
PWR-2 (Vanguard, Astute) and PWR-3(Successor programme) nuclear reactors
MTU 12V/16V 4000 M90 diesel engine*General Electric group **UTC group

162

ROLLS-ROYCESTRATEGIC HIGHLIGHTS
Business trends

 Rolls-Royce is a British engine manufacturer and one of the world's main suppliers of aeronautical and naval
propulsion systems for both civil and military applications.

 Excluding equity investments and other participations, the group's revenue increased 10% to $15bn (€17bn)
in 2018, driven by the Power Systems and Civil Aerospace divisions. Defence revenues accounted for 21% ofrevenue, a slight decrease compared to 2017 (23%).

 Faced with difficulties in recent years, Rolls-Royce has been implementing a restructuring plan since 2015.
In 2018, the group again reduced its non-manufacturing staff (support functions in particular). 1,300 jobs areaffected and a total of about 4,600 jobs could be cut by 2020.

 After the 2018 sale of L'Orange, a manufacturer of injection systems for diesel engines, to U.S.-based Woodward
Inc., Rolls-Royce sold its Commercial Marine division to Kongsberg in April 2019. The divestments came as partof the company's objective to focus on its 3 main activities: Civil Aerospace, Power Systems and Defence.

Home market

 The group generated 10% of its turnover on the British market in 2018. Rolls-Royce is the undisputed leader inthe British market for military ship engines and turbines, a position it has further strengthened with the recent
launch of the Royal Navy's T26 frigate programme, of which BAE Systems is the prime contractor and for which
Rolls-Royce supplies the MT30 turbines.

 Rolls-Royce (engines) has partnered with BAE Systems, Leonardo (advanced sensors, electronics, avionics)
and MBDA (weapons systems), since then joined by the Swedish Ministry of Defence and several Italiancompanies (Elettronica, Leonardo Italy, Avio Aero and MBDA Italy) to develop the Tempest future fighter aircraftthat will replace the Royal Air Force's Eurofighter Typhoon. The British Ministry of Defence (MoD) could invest
about £2bn (€2.26bn) in this programme by 2025.

 The group was selected by the British Ministry of Defence for a £350m (€396m) contract to maintain the EJ200
turbojet engines that power the Royal Air Force's Eurofighter Typhoon.

Export markets

 The United States accounted for over 30% of Rolls-Royce's turnover and remains the group's largest market. In
2018, the group won a 6-year, $420m (€356m) maintenance contract for the Rolls-Royce engines of the U.S. Air
Force and U.S. Navy Global Hawk and Triton UAVs. Rolls-Royce was also selected by Boeing to equip the future
U.S. Navy MQ-25 Stingray UAVs with its AE3007N turbojet engine.

 In June 2019, the Royal Thai Air Force became the first export customer for Rolls-Royce's upgraded T56 Series
3.5 turboprop engine, which will update the country's fleet of C-130H Hercules transport aircraft.

 In September 2019, the group completed the production of its 50th MT30 turbine. The turbine will be delivered
to Japan's Kawasaki Heavy Industries (KHI), with which Rolls-Royce has been partnering for more than 50 years
to equip the Japanese Navy's fleet.

Technology and Innovation

 Defence R&D expenditure amounted to £100m (€113m) in 2018, a 12% increase in local currency compared
to 2017 (£89m or €101m).

 Rolls-Royce is partnering with Reaction Engines and BAE Systems to develop a hypersonic propulsion system.

A £10m (€11.3m) contract was signed in July 2019 by the three partners with the British Ministry of Defence tolaunch studies (design, research, etc.) for the future engine.

163

RUAG

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017

2018

 Commercial aeronautics (fuselage sections,

Revenue

1 633

1 705

1 758

1 730

∆ (%) [CHF]*-2,08%

6,54%

5,22%

2,20%

Defence (%)

45%

43%

44%

44%

Export (%)

62%

63%

62%

63%

Operatingprofit/loss

128

139

107

92

Operatingmargin (%)

7,86%

8,13%

6,09%

5,31%

Net income

110

106

80

64

Order book

1 271

1 449

1 371

1 592

Employees

8 163

8 734

9 189

9 127

assembly, equipment) Defence (land and aircraft systems,
simulation systems, C4I systems)
 Small-calibre ammunition
 Space (structures, equipment) Aerostructures

GOVERNANCE
ChairmanRemo Lütolf

Chief Executive Officer

Urs Breitmeier

Chief Financial Officer

Urs Kiener*Variation based on revenue in local currency.
See €/CHF exchange rates p.7.

REVENUE BY BUSINESS LINE (%)*

OWNERSHIP STRUCTURE
Symbol20

Listed on

17

Unlisted groupMarket Cap

24

Major shareholders (as of 20.11.2019)Federal Authorities of the Swiss
Confederation

17
10

100%

12

Aviation
Ammotec
Space

Defence
Aerostructures
Other*Revenue distribution based on total sales excluding eliminations.
Unbundling of defence activities is ongoing.

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

RUAG Aviation
Malaysia SDN BHD

65%

Malaysia

Nitrochemie AG

49%

Switzerland

RUAG Simulation
Company LLC

49%

UAE

Arianespace Participation

3,5%

France5037<1<1 3
1
Switzerland
Europe(excl. Switzerland)
North America
1648Asia/PacificMiddle East
AfricaSouth America

Aeronautics
Dornier 228NG aircraft
Aerostructures (F/A-18, F-5 Tiger, Gripen, PC-21)
900 Starliner/HFE Hermes UAS
nEUROn UCAV demonstrator(wind tunnel tests and weapons interface unit)
OPATS laser-based automatic landing system
for UAS
ISSYS-Pod integrated self-protection system
Flight simulators (F/A-18 SHOTS and SAMT, PC-7,
MISIM ADS 95 Ranger UAV)Land systems
COBRA 120mm mortar system
IFV 2000 / CV90 infantry fighting vehicle
Leopard 2 main battle tank mid-life upgrade
M109 artillery system upgrade
SidePRO, RoofPRO and MinePRO
passive side protection solutions
CERBERE programme (upgrade of the
instrumentation for the French Army's live
combat training centres)
Gladiator personal harness for training
C4ISR
ARANEA tactical communications system
Space systems
Launcher fairings(Ariane 5 et 6, Atlas V-400, V-500)
Missile guidance systems (S19 and GCS families)*Boeing/Lockheed Martin **KNDS group ***ArianeGroup

165

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

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RUAG

STRATEGIC HIGHLIGHTS
Business trends

 Wholly owned by the Swiss State, RUAG is Switzerland's leading defence group and a major European playerin small-calibre ammunition and aerospace. The group's main activities include MRO services as well as
modernisation of the Swiss Army's fleets (aircraft, helicopters, armoured vehicles, etc.) and artillery systems. In
2018, it generated a turnover of CHF 2bn (€1.7bn).

 In late 2018, RUAG and Elbit Systems signed a memorandum of understanding for the creation of a Swiss joint
venture designed to meet the military needs of the DDPS (Federal Department of Defence, Civil Protectionand Sport).

 In 2019, RUAG began a restructuring process aimed at separating its national military activities from its civilian
and international activities. As from January 1 2020, the group will be split into two independent entities:"MRO Switzerland", dedicated to providing services to the Swiss Army and controlled by the Swiss State, andwhich will mainly include the Aviation and Defence branches; and "RUAG International", which will include the
Aerostructures and Space divisions and should be fully privatised in the medium term (possible IPO around2021-2022).

 At the same time, RUAG divested its business jet operations with the July 2019 sale of its sites located at the
Swiss airports of Geneva-Cointrin and Lugano-Agno to Dassault Aviation. The ammunition (Ammotec) and civil
cybersecurity activities are also expected to be divested.

Home market

 RUAG achieved 44% of its turnover in the defence sector in 2018, 30% of which with DDPS, its main customer.
 At the end of 2018, the group signed a contract for the modernisation of eight Cougar transport helicopters of
the Swiss Air Force (modernisation of electronic and navigation systems, etc.) by mid-2022.

 As part of the DDPS's Armed Forces' Voice System (VSdA) project, RUAG was chosen to provide and maintainthe TTEL secure telephony solution.

 In September 2019, Switzerland's Council of States voted in favour of the purchase of new fighter aircraft for a

maximum of CHF 6bn (€5.2bn) but asked that acquisitions made abroad be 100% offset (against 60% requiredby the Federal Council) by orders to Swiss companies, primarily RUAG. Airbus, Boeing, Dassault Aviation,
Lockheed Martin and Saab AB are in competition for the programme. A decision is expected by early 2021.

Export markets

 The group generated 63% of its turnover from exports in 2018. RUAG Space extended its Austrian site
dedicated to thermal insulation products, in particular for the Ariane 6 rocket. On the other hand, the project to
set up an ammunition factory in Brazil was cancelled by the Swiss government, which feared that Swiss arms
export rules would be circumvented in this way.

 In 2019, RUAG will carry out the maintenance of three Dornier 228 aircraft of the Italian Army and in particularupgrade their avionics systems. In April 2019, the group also signed a six-year MRO contract for two
Dornier 228 of the Bangladeshi Navy.

 As part of a contract signed in autumn 2018, RUAG in May 2019 completed the maintenance of NH90
helicopters for the German Army.

 After new ammunition orders in 2018, RUAG Ammotec strengthened its cooperation with the Austrian Armyby signing a knowledge and know-how sharing agreement.

Technology and Innovation

 The Group's R&D expenditure amounted to CHF 179m (€155m) in 2018, representing 9% of sales.

166

SAAB ABKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer, systems integrator/
equipment supplier Military aircraft Naval platform and systems
 Missile systems and weapon systems
 Defence electronics
 C4ISR and early warning systems
 Information security and system integration
 Simulation
GOVERNANCE
ChairmanM. Wallenberg

President and CEO

M. Johansson*

Directeur branche Aeronautics

J. Hjelm*Appointed President and CEO in october 2019, replacingHåkan Buskhe.

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolListed on€ millions

2015

2016

2017**

2018

Revenue

2 906

3 024

3 287

3 232

∆ (%) [SEK]*

15,55%

5,32%

10,60%

4,71%

Defence (%)

82%

83%

84%

85%

Export (%)

58%

57%

58%

59%

Operatingprofit/loss

203

190

234

221

Operatingmargin (%)

6,98%

6,28%

7,12%

6,84%

Net income***

146

120

153

128

Order book

12 387

11 264

10 893

9 964

Employees

14 68515 46516 427

17 096*Variation based on revenue in local currency.
See €/SEK exchange rates p.7.
**2017 figures restated.
***Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)*
SAAB B

21

Nasdaq OMX Stockholm

Market Cap (SEKm)

17

43 66923

Major shareholders (as of 20.11.2019)
Investor AB

15

28,90%

Knut and Alice Wallenberg Foundation

8,98%

Första AP Fonden

6,51%

Swedbank Robur Fonder AB

4,62%

AFA Sjukförsäkringsaktiebolag

3,17%

9

15

Aeronautics
Surveillance
Industrial Products& Services

Support & Services
Dynamics
Kockums*Revenue distribution based on total sales excluding eliminations.

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

TAURUS Systems GmbH

33%

Germany

Akaer Participacões S.A.

28,2%

BrazilGripen International KB

50%

SwedenFortis Marine Solutions

49%

Singapore

Vricon Inc.

50%

UnitedStatesUMS Skeldar AG

47%

Switzerland

19
14
41
11
10

4
1

167

SwedenAsia
Europe (excl. Sweden)
Latin America

North America
AfricaAustralia and Other

RU
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SAAB AB

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Military aircraft
T7-A Red Hawk trainer aircraft**Gripen JAS-39 E/F fighter aircraft
Swordfish Maritime Patrol Aircraft (MPA)(embedded system)
Saab 2000 GlobalEye and Erieye
AEW&C solutions
Skeldar V-200 VTOL UAVnEUROn UCAV demonstrator(main fuselage, landing gear doors, etc.)
Missile systems and weapon systems
AT4 and Carl Gustaf M4 man-portablesupport weapons
Next generation Light Anti-tank Weapon(NLAW)RBS 70 NG very short range
air defence missile system
RBS15 Mk3 anti-ship missile system
IRIS-T short range air-to-air missile
METEOR beyond visual range
air-to-air missile system
TAURUS KEPD 350 modular stand-off
missile system
Defence and security solutions
Giraffe and Sea Giraffe radars(AMB, 1X, 4A, 8A)
A26-class attack submarines
Defence electronics
BOL advanced countermeasuredispenser
Integrated Defensive Aids System(IDAS)*Elbit Systems group **T-X programme

168

SAAB ABSTRATEGIC HIGHLIGHTS
Business trends

 Saab AB is Sweden's leading defence group and the main supplier to the Swedish Army. In 2018, its revenue
reached SEK 33.2bn (€3.2bn), up 4.7% in local currency. Growth was mainly driven by the acquisition, in late2017, of two Swedish shipyards (N. Sundin Dockstavarvet AB and Muskövarvet AB), following the acquisition of
the Swedish shipyard TKMS AB (now Kockums) in 2014.

 In October 2018, Saab AB completed a capital increase of approximately SEK 6bn (€580m) as the group wishes

to strengthen its financial capacities to ensure the development of its flagship programmes (Gripen fighter
aircraft, A26 submarines, etc.), invest in R&D and position itself on new calls for tenders.

 In February 2019, Saab AB sold its South African subsidiary Saab Grintek Technologies to African Equity
Empowerment Investments Ltd (AEEI), which offers radio communications and cybersecurity solutions,particularly for military applications. The amount of the transaction was not disclosed.

 The group announced the appointment of Micael Johansson as Chief Executive Officer and Executive
Chairman, replacing Håkan Buskhe. The replacement is effective from the end of October 2019.

Home market

 Saab AB generated 41% of its turnover on the Swedish market in 2018. The group is a preferred partner of
the Swedish Defence Materiel Administration (FMV), particularly in the combat aircraft and naval defence
segments, and participates in all of the country's military programmes. Saab AB will notably deliver 60 Gripen E
fighter aircraft (single-seat version) ordered by Sweden in 2014.

 Following the signing, in June 2019, of a 10-year contract for the supply of Carl-Gustaf rocket launchers to the
Swedish Army, a first order of approximately SEK 330m (€31m) was placed.

Export markets

 Saab AB strengthened its international presence with the opening of a research centre in London (initialinvestment of £3.5m, or €3.9m), which will focus on radar, electronic warfare and cybersecurity. The groupalso plans to build a site in the United States from 2020, dedicated to the production and assembly of the
T-7A Red Hawk trainer aircraft (T-X programme) co-developed with Boeing.

 The Sea Giraffe naval radar was selected by the U.S. Navy to be integrated on Independence-class LCS frigates(LCS 36 and LCS 38) and to equip the U.S. Coast Guard's Heritage-class offshore patrol vessels. Lockheed
Martin Canada also chose the radar for the Canadian Navy's future Joint Support Ships (JSS).

 In September 2019, the Finnish Navy awarded Saab AB a €412m, eight-year contract for the supply andintegration of combat systems on the Finnish Navy's four future Pohjanmaa-class corvettes, as part of the 2020
Squadron programme.

 During the same month, the company completed the assembly of the first of 36 Gripen fighter aircraft orderedby Brazil (including 28 single-seater and 8 two-seater versions, as part of the FX-2 fighter aircraft programme).
The aircraft is expected to be delivered to Brazil by the end of 2020, once flight tests have been completed.

Technology and Innovation

 Total R&D expenditure amounted to SEK 7.6bn (€737m) in 2018, equivalent to 22.8% of revenue. Self-financed
expenses represented 6.7% of revenue.

 Despite a memorandum of understanding between the British and Swedish Ministries of Defence, Saab AB
is not yet joining the Team Tempest consortium, which is responsible for developing the future 6th-generation
Tempest fighter aircraft. However, the group will be involved in the development of joint Swedish-British
programmes, bringing its expertise in the integration of air combat systems.

169

SAFRANKEY FIGURES (Fiscal year ended: December 31st)*

BUSINESS AREAS
Engine manufacturer and systems integrator/
equipment supplier Aricraft engines, satellite and missile

propulsion
 Aerospace equipment and systems
 Optronics, avionics, navigation systems,
defence electronics and critical software
 UAV systems
 Security systems

GOVERNANCE
ChairmanPhilippe Petitcolin

Chief Financial Officer

Bernard Delpit

CEO Safran Electronics& Defense

Martin SionOWNERSHIP STRUCTURE (as of 20.11.2019)
Symbol2015**

2016

2017**

2018

Revenue

15 53615 78115 95321 050

∆ (%)

1,18%

1,58%

1,09%

31,95%

Defence (%)***

~20%

~20%

~20%

~17%

Export (%)

76%

79%

83%

84%

Operatingprofit/loss

1 601

2 386

2 102

2 908

Operatingmargin (%)

10,31%

15,12%

13,18%

13,81%
1 981

Net income****

1 482

1 804

2 393

Order book58 71862 32068 583

N/A

Employees*****

61 42057 54258 32492 639Ross McInnes

Chief Executive Officer€ millions*Figures adjusted.
**2015 and 2017 figures restated.
***Estimated.
****Net income attributable to shareholders.
*****Excluding Security division since 2015.

REVENUE BY BUSINESS LINE (%)*
SAF

Listed onEuronext Paris

Market Cap (€m)

38

64 77750

Major shareholders (as of 20.11.2019)
French State

11,70%

Employees

7,32%

Capital Research & Management Co.
(World Investors)

4,38%

TCI Fund Management Ltd.

4,06%

12
Aerospace Propulsion
Aircraft equipment,
Defence & Aerosystems
Aircraft Interiors*Following the integration of Zodiac Aerospace in July 2019, a new
operational organization has been set up.

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)*

Name

%

Country

ArianeGroup

50%

FranceRoxel

50%

FranceSofradir

50%

France

CFM International SA

50%

FranceEuroProp International
GmbH

32,2%

Germany

50%

UnitedStates

Initium Aerospace

24
37

16
7

16

FranceEurope (excl. France)
Americas

Asia / Oceania
Africa / Middle East

*Adjusted figures, including 10 months of Zodiac Aerospace revenue,
consolidated since March 2018.

170

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SAFRANIT
P

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Aircraft engines
M88 afterburning turbofan engine (Rafale)
TP400 turboprop engine (A400M)
RTM322 engine family(NH90, EH 101, AH Mk.1)
Ardiden turboshaft family(Druhv, LCH, LUH, Ka-62, AC352)
MTR390-2C (Tiger HAP, ARH, UHT)and MTR390-E (Tiger HAD) turboshaft engines
Next European Fighter Engine(NEFE, NGWS programme)
Space propulsion
Plasma propulsion(PPS 1350-G, PPS 1350-E, PPS 5000, TMA)
Missile propulsion
TR 60-30 (Apache, STORM SHADOW / SCALP
EG) and TR 50 (MdCN / SCALP Naval)
turbojet engines
Navigation systems and optronics
GeonyxTM inertial navigation system
EuroflirTM 610 multispectral electro-opticaltargeting and observation system
Missile systems and weapon systems
Missile seekers (MICA IR, Mistral, MMP)HUSSAR air-to-ground missile
UAV systems
Patroller tactical drone
Infantry
NeoFelis integrated system for dismounted
soldiers (upgrade of the FELIN system)*KNDS group

171

SAFRANSTRATEGIC HIGHLIGHTS
Business trends

 Safran is a leading French engine manufacturer and equipment supplier, particularly in the civil and military

aeronautics sector. The group's defence activities include designing and producing aircraft engines (M88 for the
Rafale), helicopter turbines (RTM322 for the NH90), avionics equipment, optronics equipment as well as sights
and sensors. It also operates in the UAV segment and in activities related to space launchers (via ArianeGroup,
its joint venture with Airbus).

 In early 2018, Safran completed the acquisition of Zodiac Aerospace, making it the world's second-largest
manufacturer of aeronautical equipment (including propulsion systems) behind UTC (via Collins Aerospace,formerly Rockwell Collins). Following the acquisition, the group was reorganised into three business groups(Aerospace Propulsion, Aircraft Equipment, and Defence) compared to five previously. With the acquisition of
Zodiac Aerospace, whose activities are more focused on civil aviation, the estimated share of defence activities
in Safran's total revenue slightly declined, to 17% (20% before the transaction).

 Safran's adjusted revenue reached €21bn in 2018, a record high for the group. Revenue jumped 32% year-onyear, thanks to the integration of Zodiac Aerospace as well as good performances in all of the group's divisions.
Safran now has more than 92,000 employees, compared to approximately 58,000 in 2017.

 In early 2019, Safran acquired ElectroMechanical Systems, previously controlled by Collins Aerospace, thus
strengthening its position in the fields of aircraft flight control systems and cockpit equipment.

Home market

 For the Next European Fighter Engine (NEFE) that will power the future NGWS fighter aircraft, Safran will be theprogramme's prime contractor and German MTU Aero Engines will act as the main partner.

 Safran is also the prime contractor for the development of the Patroller airborne UAV demonstrator, a surveillance
UAV designed for long endurance missions (more than 20 hours).

Export markets

 In order to secure new growth drivers, Safran has been pursuing a strategy of international expansion over the
past years. In 2018, export sales accounted for more than 80% of the group's turnover.

 In 2018, the Netherlands Defence Materiel Organisation (DMO) chose Safran Vectronix to supply more thana thousand of its latest-generation Moskito TI binoculars. Additionally, Safran signed a framework contract
enabling it to offer, in partnership with Nexter (KNDS group), its new Geonyx inertial navigation system, both inFrance and on export markets.

 In September 2018 , Safran Electronics & Defense Australasia (SEDA) was selected by Saab Australia to supply
its Vigy Engage electro-optical sensor for the surveillance systems of the 12 future RAN patrol vessels.

 In late 2018, the Danish Air Force awarded Safran Helicopter Engines the MCO (Maintenance in Operational
Condition) contract for the Arriel 1D1 engines of 11 AS550C2 Fennec helicopters.

 In June 2019, Saab AB selected Safran's Auxiliary Power System to power the Boeing T-7A Red Hawk
(T-X programme), a military training aircraft jointly developed by Boeing and Saab AB for the U.S. Air Force.

Technology and Innovation

 The group's self-financed R&D expenses amounted to €1.2bn in 2018, representing 5.8% of revenue.
 In early 2019 the group received funding from France's defence procurement agency (DGA), to carry out a fiveyear study programme (Turenne 2), in particular regarding the design of the hot section of engines.

172

TECHNICATOME (FORMERLY AREVA TA)

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Compact nuclear reactors designer€ millions

2015

2016*

2017

 Naval nuclear propulsion
 Support engineering for defence infrastructure Design and production engineering Reactors simulation and modelling physical

Revenue

N/A

353

372

398

∆ (%)

N/A

N/A

5,27%

7,10%

phenomena

 MRO and services
 Civil nuclear energy

GOVERNANCE
Chairman and CEO
Deputy CEO& Chief Operating Officer
Director of Defence
ReactorsLoïc Rocard
Olivier Huet

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

N/A

46

48

57

Operatingmargin (%)

N/A

13,03%

12,92%

14,32%Net income

N/A

31

N/A

N/A

Order book

N/A

N/A

N/A

~1 000

Employees

N/A

N/A

N/A

1 625

*AREVA TA's financial statements.

Bernard Gauducheau

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed on

Unlisted groupMarket Cap
N/A

Major shareholders (as of 20.11.2019)
French State Holdings Agency (APE)

50,32%

Naval Group

20,32%

CEA

20,32%EDF

9,03%

MAIN JOINT VENTURES AND ASSOCIATES*
Name%

REVENUE BY REGION (%)
Country

N/A*No information available.

173

2018

TECHNICATOME (FORMERLY AREVA TA)ABarracuda programme(Suffren-class nuclear-powered attack submarines)
RES programme (shore-based nuclear test reactor
for French naval propulsion and its related facilities
construction and operation)
MRO and services
Operational maintenance for Charles de Gaulle
aircraft carrier nuclear steam supply systems
Support engineering for defence infrastructure
Assistance with the infrastructure transformationof Toulon and Brest naval bases
Assistance with the engineering and operationof Laser MegaJoule

174

N

CE
Naval nuclear propulsion

av
al
G
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Th
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es p
Sa
fra
n
M
BD
A

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSTECHNICATOME (FORMERLY AREVA TA)STRATEGIC HIGHLIGHTS
Business trends

 TechnicAtome (formerly Technicatome and later Areva TA) is a specialist in the design, construction andmaintenance of compact nuclear reactors. The group was formed in March 2017 following the sale by Areva ofits majority shareholding in Areva TA to a consortium led by the French State Holdings Agency (APE, 50.32% of
the capital) and composed of the French Alternative Energies and Atomic Energy Commission (CEA, 20.32%
of the capital) and Naval Group (20.32% of the capital). French electric utility company EDF will retain its initialstake of 9.03% of the capital.

 In France, TechnicAtome is a major player in nuclear marine propulsion (propulsion of French Navy submarines
as well as the Charles de Gaulle aircraft carrier). In the civil nuclear sector, TechnicAtome is involved in major
French and international projects, such as the SMR (Small Modular Reactor) project, which involves the designof a small modular power reactor in partnership with EDF, the CEA and Naval Group.

 The group's turnover increased 7.1% to €398m in 2018. The order book stands at nearly €1bn, representing

approximately three years of revenue. In 2018, the group's workforce increased by 10% to support its growing
activity. TechnicAtome now has more than 1,600 employees.

 In March 2019, TechnicAtome inaugurated a training centre on the Cadarache site, one of CEA's nine research
centres. In 2019, TechnicAtome will have welcomed approximately 1,600 trainees at its centre.

 TechnicAtome should continue to grow in the context of the French Military Programming Law for the 20192025 period, which provides for the renewal of the two components (maritime and airborne) of France's nuclear
deterrence.

Home market

 A key player in the maintenance of nuclear boiler rooms, TechnicAtome participated, from 2016 to 2018 andunder the management of Naval Group, in the renovation of the Charles de Gaulle aircraft carrier during thevessel's second major technical shutdown (ATM2). During the 18 months of intervention, the nuclear boiler
rooms were controlled and the reactor cores recharged with new fuel. The renovation of the French nuclearpowered aircraft carrier was completed in November 2018.

 TechnicAtome has been working for over a decade on the Barracuda programme (next-generation nuclear

attack submarines) alongside Naval Group (project management) and under the aegis of the French defence
procurement agency (project management of the entire programme) and the CEA (project managementof the boiler room and nuclear cores). Under the programme, TechnicAtome is responsible for the designand construction of the nuclear boiler room, as well as the manufacture of nuclear cores and the supply ofequipment. In July 2019, the first of the six submarines of the programme, called Suffren, was launched. Sea
trials will begin in the first quarter of 2020 and the remaining five vessels are expected to be delivered to the
French Navy by 2030.

 TechnicAtome is also providing project management assistance for the infrastructures of the Toulon and Brest

naval bases that will house the Barracuda programme's nuclear-powered attack submarines. The group is inparticular responsible for the development of adaptation programmes for the infrastructures (basins).

Technology and Innovation

 TechnicAtome is participating, alongside Naval Group, Thales, MBDA, Dassault Aviation and Chantiers del'Atlantique, in the study phase of the future French aircraft carrier programme. TechnicAtome is working on
the boiler rooms that could equip the vessel in case the option for nuclear propulsion is chosen. The study
programme, worth €40m, will last 18 months.

 The group is also participating, in partnership with its co-contractor Naval Group, in the preliminary design
studies for the third-generation nuclear ballistic missile submarine programme (SNLE 3G). The study phase of
the programme is expected to be launched in 2020 and construction of the first of the four vessels is expected
to start in 2023.
175

THALESKEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier€ millions

2015

2016

2017*

2018

 Aerospace equipment and systems
 Sensors, systems and communications
 Weapon systems and ammunition
 Training and simulation
 Space (see also Thales Alenia Space) Cybersecurity

Revenue

14 06314 88515 22815 855

GOVERNANCE
Chairman and CEO

Patrice CaineGroup Secretary & General Counsel

Isabelle Simon

Executive VP, Land and Air Systems

Alex Cresswell

∆ (%)

8,39%

5,85%

2,30%

4,12%

Defence (%)**

50%

50%

51%

51%

Export (%)

76%

76%

76%

75%

Operatingprofit/loss

1 216

1 354

1 365

1 685

Operatingmargin (%)

8,65%

9,10%

8,96%

10,63%Net income***

809

897

840

1 178

Order book

32 29233 53032 06432 239

Employees

62 19464 07164 86066 135*2017 figures restated.
**Defence & Security division only.
***Net income attributable to shareholders.

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolREVENUE BY BUSINESS LINE (%)*
HO

Listed on

NYSE Euronext

Market Cap (€m)

19 27836
51

Major shareholders (as of 20.11.2019)
French State

25,70%

Dassault Aviation SA

24,70%

Employees

2,62%

DNCA Finance SA

1,96%

DWS Investments (UK) Ltd.

13

Defense & Security
Aerospace

Transport	*Following the integration of Gemalto in April 2019, a new division called
Digital Identity and Security was created.

1,88%

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

Naval Group35%

FranceThales Alenia Space67%

France

8

22
15

25

Telespazio S.p.A

33%

Italy

Elettronica S.p.A.

33%

Italy

Diehl Aerospace GmbH49%

Germany

Sofradir

50%

FranceTRS AMDC2

50%FranceAirTanker Holdings Ltd

13%

United Kingdom

6 5

176

France
United Kingdom
Europe (excl. Franceand UK)
Asia

10
9
Middle East
North America
Australia
and New Zealand
Rest of the WorldbiElCombat systems and embedded electronics
SPECTRA electronic warfare suiteRBE-2 AESA radar
Targeting Long-range Identification Optronic System(TALIOS)TopOwl and Scorpion helmet mounted display
NGWS future fighter aircraft (defence electronics)
Man Machine Teaming advanced study programmeMission and surveillance systems
CONTACT and SYNAPS software defined radio
Watchkeeper WK450 UAVARCHANGE programme (payload sensor development)
Radar and sonar systems
Ground Master (200 and 400) and Ground Fire radars
Sea Fire radar
Missile, weapon systems, ammunition
RAPIDFire and RAPIDFire Naval air defence systems
Missile guidance systems (Aster, MICA)
SAMP/T surface-to-air missile defence system
Military vehicles
4X4 Bushmaster infantry mobility vehicle
4X4 Hawkei light armoured vehicle
Cybersecurity
Stormshield Data Security*KNDS group

177

M

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

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THALES

THALESSTRATEGIC HIGHLIGHTS
Business trends

 Thales is a French group involved in dual activities and a key supplier of defence equipment and systems. It
also operates in the fields of aviation, security, transportation and space (via Thales Alenia Space). Its turnoverreached €15.9bn in 2018, up 4.1% from 2017.

 Sales in the Defense and Security division, the group's largest (more than 50% of total revenue), increased by
4.3% (+5.6% in organic terms) thanks to a good performance in the fields of surface radars, fighter aircraft
systems, military radiocommunications, and cybersecurity.

 In April 2019, Thales completed the acquisition of Gemalto, a Dutch-based digital security company, for €4.8bn.

The transaction involved a reorganisation of the group's operations, with the creation of a new Security andDigital Identity division, the group's fourth, which combines Gemalto's activities and some of Thales' IT activities.

Home market

 Thales generates about 25% of its sales in France, a share that has remained relatively stable in recent years.

The group is a key partner of Dassault Aviation (Rafale fighter aircraft, Epicure Falcon surveillance aircraft, etc.)
and Naval Group (FDI / Belharra frigates, FREMM frigates, etc.).

 At the end of 2018, the French defence procurement agency (DGA) ordered the modernisation of six ATL2
maritime patrol aircraft in addition to the 12 already planned in order to extend their lifespan until 2030. Dassault
Aviation and Thales will be responsible for the modernisation programme, which should be completed by 2025,
while Naval Group will work on the aircraft information processing software. The first modernised aircraft arescheduled to enter service in 2021.

 In January 2019, at France's request, the Organisation for Joint Armament Co-operation (OCCAR) awarded a€1.7bn contract to Naval Group, Chantiers de l'Atlantique and Thales to build four Force Supply Vessels (FSS) for
the French Navy (FLOTLOG programme) and provide related MCO services for six years.

 At the end of 2019, Thales and Airbus Cybersecurity, an Airbus Defence & Space business, joined forces in the

French cybersecurity market to make a joint offer to France's 200 "operators of vital importance" (OIV) in thefields of energy, banking, defence, telecommunications and networks.

Export markets

 Thales generates about three quarters of its turnover in international markets. The group pursued its multidomestic strategy with the March 2019 opening of an engineering skills centre in Bucharest (Romania) to
support the local development of certain activities, such as space, aeronautics and defence.

 At AeroIndia 2019, Thales received an order from Hindustan Aeronautics Limited (HAL) to supply 135 70-mm
12-tube rocket launchers. Thales' rocket launchers will be integrated on 18 Avanced Light Helicopters (ALH) and
15 Light Combat Helicopters (LCH).

 As part of the Belgian Army's CaMo (Motorised Capacity) programme, France's DGA in June 2019 awarded
Nexter a €1.6bn contract to supply 60 Jaguar EBRCs and 382 Griffon VBMRs from 2025 onwards. Thales is
one of Nexter's main partners in this programme, which will also include Arquus and Belgian manufacturers
FN Herstal and John Cockerill (formerly CMI Defence).

Technology and Innovation

 The group's self-financed R&D expenditure amounted to €879m in 2018, up 9.6% year-on-year. The R&D ratio
reached 5.6%, in line with the objectives of Thales' Ambition 10 strategic plan, which was launched in 2014.

 A few months after Thales' integration into the development of the Rafale F4 standard, France's Minister of theArmed Forces confirmed the group's participation in the future European fighter aircraft (NGWS). The French
company will be in charge of defence electronics alongside Germany's Hensoldt and Spain's Indra Sistemas.
178

THALES ALENIA SPACE

KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator/
equipment supplier Satellite platforms (satellite buses) Ground control segment
 Electronics, propulsion systems,€ millions

2015

2016

2017

2018

Revenue~2 100~2 400~2 600~2 500

∆ (%)

=

~14%

~8%

~-3,8%

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

N/A

N/A

N/A

N/A

Operatingmargin (%)

N/A

N/A

N/A

N/A

GOVERNANCE

Net income

N/A

N/A

N/A

N/A

Chairman and CEO
Chief Financial Officer

Order book

N/A

N/A

N/A

N/A

Employees~7 500

7 980

7 980

~8 000recovery systems

 Payloads
 Manned space systems
 Space transport

Jean-Loïc Galle
Évrard Decourcelle

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed on

Unlisted groupMarket Cap
N/A

Major shareholders (as of 20.11.2019)
Thales

66,66%

Leonardo

33,33%

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Country

Pyxalis15,53%

FranceAirStar Aerospace

8,61%

FranceAltec SpA

63,75%Italy

RASCOMSTAR QAF

12,36%

Mauritius

Universum SpaceTechnologies

40%

RussiaLeoStella LLC

50%

United States

Spaceflight

N/A

United States

N/A

179

us
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THALES ALENIA SPACE

Airb

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Satellite platforms (satellite buses)
Spacebus NEO (Syracuse 4) platform
Proteus (Gökturk 1)
and ELiTeBus (Iridium-NEXT) platform
Stratobus project
Payloads
Sensor electronics units (SAR-Lupe)
Communications satellite
SGDC Geostationary Defense
and Strategic Communications Satellite
Ital-GovsatCom communication satellite
Spainsat NG new generation satellite
Manned space systems
and space transport
Cygnus pressurized cargo module (PCM)
Earth observation
Cosmo-SkyMed 2G dual radar observation
system
CSO optical earth observation satellite
Meteosat3G meteorological satellite
Satellite navigation systems
GALILEOEGNOS
EDG²E project
Propulsion system
XPS subsystem (plasma propulsion system)*Innovation Systems division, formerly Orbital ATK **Joint venture between Airbus and Leonardo

180

THALES ALENIA SPACESTRATEGIC HIGHLIGHTS
Business trends

 Thales Alenia Space, 67% owned by France's Thales and 33% by Italy's Leonardo, is a European and worldwide
leader in satellites, space infrastructure and navigation systems. In the military sector, the group provides
telecommunications and observation systems, optical payloads, as well as high-resolution radars.

 Thales Alenia Space is part of the Space Alliance, alongside Telespazio (satellite systems, connectivity solutions

and services, etc.). The group also has two main joint ventures: LeoStella LLC (design and manufacture of small
satellites, held in equal ownership with U.S. aerospace company Spaceflight) and Altec (engineering services
associated with space infrastructure, 63.75% owned by Thales Alenia Space Italy and 36.25% owned by the
Italian Space Agency).

 In 2018, the group's turnover reached €2.5bn. After two years of growth, activity declined by around 4%, mainly
due to sluggish orders for observation and telecommunications satellites.

 In September 2019, Thales Alenia Space inaugurated an automated production site in Hasselt (Belgium).
Representing an investment of €20m, this "4.0" industrial centre is dedicated to the assembly of photovoltaic
cells for satellite solar panels. On the other hand, the group is considering cutting around 450 full-time equivalent
positions (through redundancies or non-replacement) at its Cannes and Toulouse sites, in particular due touncertainties surrounding future satellite orders in the coming years.

Home market

 Thales Alenia Space is a key partner of the French defence procurement agency (DGA), and as such, is involvedin the Ministry of the Armed Forces' main space programmes (Syracuse 4, CSO, etc.)

 In 2019, the DGA awarded Thales Group the contract to design and build the ground segment of the Syracuse4 programme, the next-generation satellite communication system of the French Armed Forces. Thales Alenia
Space will participate in the programme's design phase. The contract provides for the delivery of the first groundstations in 2021.

 In June 2019, the group signed a collaboration agreement with Germany's DLR GfR for the maintenance of theGalileo Mission Segment (GMS, European satellite navigation system).

Export markets

 At the end of 2018, Thales Alenia Space announced the signing of two contracts, one with Korea Aerospace

Industries (KAI) and the other with Hanwha Systems Corporation (HSC), to develop a constellation of four
observation satellites as part of the Korea 425 project on behalf of the Agency for Defence Development (ADD),
the agency responsible for defence programmes in Korea.

 In May 2019, Hisdesat Servicios Estratégicos selected the consortium composed of Thales Alenia Spaceand Airbus in Spain and France to design and produce two next-generation Spainsat satellites. These latterare intended to replace the Spainsat and XTar-EU satellites, which currently power the country's government
communications. The first of these satellites will be launched in 2023.

 The Space Alliance (Thales Alenia Space and Telespazio) signed a contract with the Italian Space Agency for the

first phase of development of the Ital-GovSatCom satellite system, which will provide Italy with communication
services, in particular for defence applications.

Technology and Innovation

 At the end of 2019, Thales Alenia Space presented Space Inspire (Instant Space In-Orbit Reconfiguration), a

new range of reprogrammable satellites capable of adjusting their mission while in orbit and their geographicalcoverage, thanks in particular to innovative digital equipment.

181

THYSSENKRUPP MARINE SYSTEMS (TKMS)KEY FIGURES (Fiscal year ended: September 30th)*

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2014-152015-16

2016-17

German conglomerate Thyssenkrupp AG's naval
division

Revenue~1 700~1 600~1 700~1 400∆ (%)-2,47%-5,88%

6,25%-17,65%

Defence (%)

N/A

N/A

N/A

N/A

Export (%)

N/A

N/A

N/A

N/A

Operatingprofit/loss

N/A

N/A

N/A

-128

Operatingmargin (%)**

N/A

N/A

N/A

-9,14%Net income

N/A

N/A

N/A

N/A

Order book

N/A

N/A

N/A

N/A

Employees~3 200~3 200~3 500~3 400 Surface ships
 Submarines
 Ammunition
 Unmanned vehicles (surface and underwater) Maritime security systems and mine warfare
systems

 Sonar and acoustic systems
 Equipment and maintenance
GOVERNANCE
Chief Executive Officer
Chief Financial Officer
Chief Project Officer

Dr. Rolf Wirtz
Dr. S. C. SchulteAndreas Burmester*Main figures excluding Atlas Elektronik, consolidated subsidiary sinceApril 2017.			
**Operating profit/loss ajusted (EBIT).			

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolListed on

Unlisted divisionMarket Cap
N/A

Major shareholders (as of 20.11.2019)
ThyssenKrupp AG

2017-18**100%

MAIN JOINT VENTURES AND ASSOCIATESREVENUE BY REGION (%)

Name

%

Kta Naval Systems

50%

Country
NorwayThyssenKrupp Tata Steel B.V

50%

Netherlands

ThyssenKrupp Marin Sistem
Gemi Sanayi ve Ticaret A.S.

60%

TurkeyMTG Marinetechnik GmbH49%

Germany

Lisnave-Estaleiros Navais S.A.

20%

Portugal

Blohm & Voss
German Naval Technology

40%

Qatar

182

N/A

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THYSSENKRUPP MARINE SYSTEMS (TKMS)

MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPSTKMS
Atlas Elektronik
Conventionally-powered attack
submarines
HDW-class 209/1400mod
HDW-class 212A
HDW-class 214
HDW-class 218SG
Dolphin-class AIP
HDW-class 212CD (joint programme)
Surface ships
F125 frigate
MEKO family (frigate, corvetteand offshore patrol vessel)
K130 Braunswcheig-class corvette(6 to 10) (joint programme)
Tamandaré-class corvette(CCT programme)
Naval systems, equipement, ammunition
IDAS missile system
ORCCA submarine combat system
ANCS / ANCS-SC combat system
Active Towed Array Sonar (ACTAS)
and Active Pulse Analysis System(APAS)
Heavyweight torpedo
SeaHake Mod4
Unmanned systems
SeaFox mine disposal vehicle
Unmanned Mine Countermeasures(MCM) System ARCIMS*Hyundai Heavy Industries **PGZ group ***German Naval Yards Kiel

183

THYSSENKRUPP MARINE SYSTEMS (TKMS)STRATEGIC HIGHLIGHTS
Business trends

 ThyssenKrupp Marine Systems (TKMS) is the naval division of German industrial conglomerate ThyssenKrupp

AG (€42.7bn in revenue in 2017/2018, over 161,000 employees), through the latter's Industrial Solutions
activities. Excluding Atlas Elektronik (sonars and acoustic systems, ammunition, surface and underwater drone
systems, combat and demining systems), a subsidiary consolidated within TKMS since April 2017, the company
represents around 4% of ThyssenKrupp's revenue and 2% of its workforce.

 In May 2019, ThyssenKrupp AG abandoned its plan to split into two listed entities: ThyssenKrupp Industrials(elevators, plant engineering and car parts) and ThyssenKrupp Materials (materials trading and shipbuilding).
The industrial conglomerate, which is now considering divesting its elevator activities (€7.6bn in 2017/2018, or
16.9% of revenue) through an initial public offering, is also looking to sell all or parts of these activities.

 At SubCon 2019, Kta Naval Systems, a joint venture of TKMS, Atlas Elektronik and Kongsberg, unveiled

a new conventional submarine combat system called ORCCA. The system will be installed on HDW-class
212 submarines ordered by Norway from TKMS.

Home market

 The TKMS division remains dependent on orders from the German Navy, in particular via the F125 frigate

programme (four-unit contract worth €2bn). In June 2019, the first of the four frigates, named BadenWürttemberg, initially delivered at the end of 2016 with quality issues, was officially put into service. The second
unit is scheduled to be delivered by the end of 2019, with the other two to be delivered within two years.

 The construction of the first of the five new Braunschweig-class corvettes, called Köln, was launched in

February 2019. Under this €2.4bn contract, involving the ARGE K130 consortium (composed of TKMS, Lürssen
Defence and German Naval Yards Kiel), the last corvette is scheduled to be delivered by 2025. The combat
systems will be provided by Atlas Elektronik, a TKMS subsidiary, which is associated with Thales Deutschland
as part of the FüWES K130 consortium.

 TKMS is participating, alongside German Naval Yards Kiel, in the German Navy's call for tenders for the supply of
MKS 180 multi-mission vessels, which will replace the Type 143 fast attack crafts and F123 Brandenburg-classfrigates from 2023. A decision should be taken by the first quarter of 2020 at the latest.

Export markets

 TKMS is currently positioned in several tenders, notably in India (P75I programme for six submarines) and theNetherlands (four Walrus-class submarines).

 The company won a maintenance contract for the Indian Navy's Type 209 Shishumar-class submarine (built

by TKMS), in partnership with India's Mazagon Dock Shipbuilders (MDL). The contract, worth several tens of
millions of euros, runs until 2021.

 The Águas Azuis consortium (comprising TKMS and Embraer Defence & Security) was selected by the Brazilian
Navy to supply four escort corvettes (CCT programme valued at $1.6bn, or €1.4bn). The contract was won
against three other consortia: Damen/Saab Tamandaré, Fincantieri/Vard, and Naval Group/Enseada.

 The Bundestag Budget Committee authorised the sale of six MEKO A-200 frigates to Egypt, following acontract signed between the two countries in 2018. The German Security Council has yet to approve the supplyof five of them. At the same time, TKMS in May 2019 began construction of the third Type 209/1440 submarine(out of the four ordered by the Egyptian Navy) at the Kiel shipyard.

Technology and Innovation

 In February 2019, TKMS and the Singapore-based Defence Science Technology Agency (DSTA) signed amemorandum of understanding to collaborate on the development of new technologies for naval applications.

184

UNITED AIRCRAFT CORPORATION (UAC)KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Platform manufacturer and systems integrator€ millions

2015

2016

2017

2018

 Fighter aircraft (MiG, Sukhoï) Trainer aircraft (Yakovlev)
 Strategic bombers (Tupolev)
 Transport and special purpose aircraft

Revenue

5 085

5 623

6 852

5 559

(Antonov, Beriev, Ilyushin) Unmanned aircraft systems

GOVERNANCE
Chairman

A.Serdyukov

Chief Executive Officer

Y. B. Slyusar

Chief Financial Officer

A.Demidov∆ (%) [RUB]*

17,51%

20,46%

8,36%-8,90%

Defence (%)**

79%

73%

71%

N/A

Export (%)**

25%

30%

30%

N/A

Operatingprofit/loss

-9

181

328

290

Operatingmargin (%)-0,17%

3,22%

4,78%

5,23%

Net income-1 2101

N/A-4

Order book

22 261

N/A

N/A

N/A

Employees

96 545

96 787~102 000

N/A*Variation based on revenue in local currency. 		
See €/RUB exchange rates p.7.
**Based on the number of delivered units.

REVENUE BY BUSINESS LINE (%)

OWNERSHIP STRUCTURE
SymbolUNAC

Listed on

CJSC MICEX

Market Cap

N/A
N/A

Major shareholders (as of 20.11.2019)
Russian State76,24%

Federal Agency for State Property
Management

8,17%

REVENUE BY REGION (%)

MAIN JOINT VENTURES AND ASSOCIATESName%Country

Indo-Russian Aviation Ltd

31%

India

PJSC Company Sukhoi

81,25%

RussiaPJSC « Irkut »86,95%

RussiaATSC

25%

Malaysia

N/A

185

UNITED AIRCRAFT CORPORATION (UAC)

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MAIN PROGRAMMES, COOPERATIONS AND EXPORT PARTNERSHIPS

Transport and special purpose aircraft
Ilyushin II-76MD-90A and Il-78M-90A
transport/tanker aircraft
Il-276/MTA tactical transport aircraft
Il-112V light transport aircraft
Strategic bombers
Tupolev Tu-160 strategic bomber
Tupolev Tu-95 strategic bomber
Tupolev Tu-22M3 strategic bomber
PAK DA long-range strategic bomber project
Training aircraft
Yak-130 training aircraft
Yak-152 training aircraftFighter aircraft
MiG-29K and MiG-29KUB fighter aircraft
MiG-35 and MiG-35D fighter aircraft
Sukhoï Su-27SK (Su-33) fighter aircraft
Sukhoï Su-30MK multi-role fighter aircraft
Sukhoï Su-30SM multi-role fighter aircraft
Sukhoï Su-35 fighter aircraft (modernised
version of the Su-27 fighter aircraft)
Sukhoï Su-57 (T-50 PAK-FA/FGFA)
5th generation fighter aircraft*Formerly NPO Saturn**United Engine Corporation (UEC) group

186

UNITED AIRCRAFT CORPORATION (UAC)

STRATEGIC HIGHLIGHTS
Business trends

 United Aircraft Corporation (UAC) is a Russian conglomerate comprising Russia's major civil and military aircraft
manufacturers (Sukhoi, MiG, Tupolev, Ilyushin, Yakovlev, Beriev and Irkut). The group's turnover reached
RUB 411.6bn (around €5.5bn) in 2018, down 8.9% compared to the previous financial year.

 In October 2018, the Russian President signed a decree authorising the takeover of UAC by the Rostec
conglomerate (Kalashnikov Group, Russian Helicopters, etc.), a major player in the Russian defence industry,
which accounts for almost two-thirds of the country's military production. The deal is expected to be completed
in the first half of 2020.

 As part of the reorganisation of its commercial activities, UAC intends to merge all its subsidiaries dedicatedto civil aviation. As a consequence, Sukhoi Civil Aircraft Company, UAC-Integration Center and New Civil
Technologies will be combined into a single division, which in turn will be merged with Irkut Corporation, another
UAC entity.

 In May 2019, Anatoly Serdyukov, former Russian Minister of Defence and Director of Rostec's Aviation division,
became Chairman of UAC.

Home market

 The group remains highly dependent on its domestic market, with approximately 70% of the aircraft delivered
coming from Russian orders.

 UAC is in charge of developing the Il-112V light transport aircraft, which will replace the Russian Air Force's
ageing fleet of Antonov An-26 transport aircraft. In March 2019, the Il-112V prototype completed its first flighttest.

 UAC is also in charge of developing Russia's 5th-generation Su-57 (formerly T-50) fighter aircraft. In May 2019,

the Russian President announced the acquisition of 76 Su-57 by 2028, for an estimated amount of $2.6bn(approximately €2.2bn). Two prototypes of the Su-57 are expected to be delivered to the Russian Air Force by
the end of 2019, followed by two additional units in 2020.

Export markets

 After India's withdrawal from the MTA tactical transport aircraft (2017) and Su-57 fighter aircraft co-development

projects that were part of India's Fifth Generation Fighter Aircraft (FGFA) programme of 2018, the country also
reduced its orders for Sukhoi Su-30MKI fighter aircraft. Assembled locally by India's HAL, about 12 units areproduced each year. Production is expected to be completed by March 2020. In the end, India could order
18 additional Su-30MKI.

 UAC was selected by Egypt to supply more than 20 Sukhoi Su-35 fighter aircraft under a contract worth
approximately $2bn (approximately €1.8bn). The group is also finalising the delivery of China's 24 Su-35s.

 Following Turkey's eviction from the F-35 programme in July 2019, as part of U.S. sanctions over Ankara's
acquisition of the Russian S-400 air defence system, discussions are ongoing between the Russian and Turkish
governments for the acquisition of Su-35 and Su-57 fighter aircraft.

 At the Russian MAKS 2019 exhibition, UAC, which aims to develop its export sales (particularly in the Middle

East, Southeast Asia and Latin America), unveiled the Su-57E, the export version of the Su-57. The Su-57E wasalso presented at the Dubai Air Show in November 2019. Discussions for possible orders are reportedly ongoingwith India, Vietnam and Myanmar. The Middle East might also be a target market.

Technology and Innovation

 The group is continuing its work on the PAK DA next-generation long-range strategic bomber, which could
replace all Russian Air Force bombers. UAC also aims to develop a new fighter aircraft, the MiG-41, which
would succeed the Su-57.
187

UNITED TECHNOLOGIES CORPORATION (UTC)KEY FIGURES (Fiscal year ended: December 31st)

BUSINESS AREAS
Systems integrator/equipment supplier Commercial and military aircraft and helicopter
engines (turbofan and turboprop engines),
auxiliary power units ISR systems and communication systems
 Aerostructures and aircraft equipment(landing gears, propeller systems, wheels,carbon brakes, actuation systems, etc.)

GOVERNANCE
Chairman and CEO

Gregory J. Hayes

Chief Financial Officer

Akhil Johri

President of Pratt & Whitney*

Robert F. Leduc*To be replaced by Christopher Calio as of 2020.

2015

2016

2017

2018

Revenue

50 53951 71152 95356 309
11,14%∆ (%) [$]*

-3,11%

2,04%

4,53%

Defence (%)

12%

12%

13%

14%

Export (%)

62%

62%

63%

63%

Operatingprofit/loss

6 568

7 426

7 202

7 242

Operatingmargin (%)

13,00%

14,36%

13,60%

12,86%Net income**

3 600

4 575

4 028

4 461

Order book76 95187 85682 402100 873

Employees

197 200

201 600

204 700

240 200*Variation based on revenue in local currency.
See €/$ exchange rates p.7.
**Net income attributable to shareholders.

REVENUE BY BUSINESS LINE (%)*

OWNERSHIP STRUCTURE (as of 20.11.2019)
SymbolUTX

Listed on

NYSE

Market Cap ($m)

€ millions28

127 818

29

Major shareholders (as of 20.11.2019)
SSgA Funds Management, Inc.

10,80%The Vanguard Group, Inc.

7,93%

Capital Research & Management Co.

6,73%

Wellington Management Co. LLP

2,60%

BlackRock Fund Advisors

2,27%

MAIN JOINT VENTURES AND ASSOCIATES

24
19

Pratt & Whitney
Carrier**

Collins Aerospace Systems
Otis***Revenue distribution based on total sales excluding eliminations.
**Otis and Carrier are expected to be separated as part of the merger
between UTC and Raytheon.

REVENUE BY REGION (%)*

Name

%

Country

Advanced Turbine Engine
Company LLC

50%

UnitedStatesEngine Alliance LLC

50%

UnitedStatesInternational AeroEngines AG

61%

Switzerland

19
58
13
10
United States**
EuropeAsia/Pacific		Rest of the World	*Revenue distribution based on total sales excluding eliminations.
**Including re-exports.

188

Military aircraft and helicopter engines
F135 turbofan engine (F-35)
F100 turbofan engine (F-16, F-15)
F119-PW-100 turbofan engine (F-22)
F117-PW-100 turbofan engine (C-17)
PW4062 turbofan engine (KC-46)
PT6A turboprop engine(EMB-314, T-6, PC-21, HeronTP)
T900 turboshaft engine (AH-64, UH-60)
Auxiliary power units
APU (V-22, CH-53K, UH-60, CH-47, F-16, A400M,
KC-390)
Systems and equipment
SYERS-2, SYERS-3, DB-110, MS-177
multispectral imaging sensors
TERPROM digital terrain system
Landing gears (F-15, C-17, AH-64E)
Wheels & carbon brakes (F-15, C-130)
Propeller systems** (A400M)
PRC-162 software-defined ground radio*General Electric**Produced by French Ratier-Figeac subsidiary

189

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UNITED TECHNOLOGIES CORPORATION (UTC)UNITED TECHNOLOGIES CORPORATION (UTC)STRATEGIC HIGHLIGHTS
Business trends

 United Technologies Corporation (UTC) is a U.S.-based conglomerate that includes Pratt & Whitney (aircraft

engines), Otis (elevators and escalators), Carrier (heating and cooling solutions) and Collins Aerospace Systems(aircraft equipment, formerly Rockwell Collins, acquired in November 2018).

 UTC reported sustained growth in 2018 (+11.4%), with revenue reaching $66.5bn (€56.3bn). The Pratt& Whitney branch posted the strongest performance, with 14% organic growth. UTC's other division involved indefence activities, Collins Aerospace Systems, also posted solid growth (+8% organic growth).

 In June 2019, UTC and Raytheon announced an agreement for an all-share merger of equals that should becompleted during the first half of 2020. With combined revenues of approximately $74bn (€62.7bn) in 2019,the new structure renamed Raytheon Technologies Corporation would become the world's second-largest
defence group by revenues behind Lockheed Martin. Otis and Carrier, UTC divisions, are expected to be
separated as part of the merger process. However, the transaction remains subject to the approval of U.S.
competition authorities.

 The group continued to expand its industrial capacities, in particular with the extension of its international
network of MCO service centres.

Home market

 UTC generated 58% of its revenue in the United States in 2018 (38% excluding re-exports). Sales to the U.S.

Department of Defense, the Group's main customer, accounted for 11% of total revenue, or $7.4bn (€6.3bn), an
increase of 28% compared to 2017.

 In June 2019, the Department of Defense awarded Pratt & Whitney a $3.2bn (€2.8bn) contract to produce

233 F135 engines for U.S. armed forces and international customers' F-35 fighter aircraft (56 for the U.S. Air
Force, 10 for the U.S. Navy, 24 for the Marine Corps, 143 for international customers).

 In July 2019, Pratt & Whitney announced it had signed a 10-year agreement to supply new PT6A engines toBlackhawk Modifications Inc., a specialist in aircraft engine upgrades. More than 1,500 PT6A engines havebeen delivered to Blackhawk over the past 20 years.

 At the same time, Collins Aerospace received a sixth order from the U.S. Army for the supply of PRC-162
networked communications ground radios. The order is part of a $12.7bn (€10.75bn) contract signed in 2016.
UTC's aerospace division was also selected by the U.S. Army to participate as a systems integrator in the Future
Vertical Lift program, which aims to develop a new family of military helicopters for the United States by 2030.

Export markets

 International sales accounted for 42% of revenue in 2018 and mainly concerned civil activities. In the military

field, UTC benefitted from international demand for F135 engines, which power the F-35 Lightning II fighter
aircraft.

 In 2019, Collins Aerospace completed the cockpit modernisation of the first of 14 Lockheed Martin C-130H
Hercules aircraft for the French Air Force. The company was also selected by the Portuguese Air Force toupgrade its fleet of C-130H aircraft. Collins Aerospace's GPS anti-jamming system was also chosen by theRoyal Canadian Navy.

Technology and Innovation

 UTC's R&D expenses amounted to $4bn (€3.4bn) in 2018, representing 6% of revenue.

190

PROJECT TEAM (Xerfi MCI)
Marine Cassou (MCI Projects Manager)
Eline Maurel (Research Director)
Jérémy Robiolle (Head of Xerfi MCI)STEERING COMMITEE DGA/S2IE
Michel Midon, Valérie Latrémouille and Lorenzo Levera

LAYOUT & GRAPHICS
Xerfi MCIDGA institutional website www.defense.gouv.fr /dga
State public procurement portal www.achats.defense.gouv.fr
The armaments portal www.ixarm.com
French defence procurement agency (DGA)
Industrial Affairs and Economic Intelligence Department

MCI

Copyright : Naval Group60, bd du général Martial Valin - CS 21 623 - 75 509 Paris Cedex 15