DÉFENSE ZONE
The European Union is currently going through its biggest rearmament phase since the 1950s, culminating in the announcement of an 800-billion-euro plan called “ReArm Europe”. This initiative, championed by Ursula von der Leyen, aims to build an autonomous European defence focused both on technological modernisation and on producing military capabilities on a large scale.
In its wake, several member states, such as Germany with its 900 billion euros of investment in defence and infrastructure, as well as Poland and the Baltic states, are also launching massive programmes to equip their forces and fortify their borders.
This fundamental shift, driven by the war in Ukraine and by the questioning of traditional alliances (such as NATO) following the diplomatic frictions of recent years, is radically changing the situation on the Old Continent.
The EU’s budget rules, once very strict, are now being relaxed to support military spending. Governments are suspending or adapting certain financial constraints so as to encourage innovation, research and industrial production in the defence sector.
The result: companies specialising in sensor systems, cybersecurity, missiles, aviation or armoured vehicles are posting record order books and seeing their revenues soar.
Thales, for example, recently saw its share price rise by more than 23%, driven by the boom in demand for defence equipment. Hensoldt, for its part, reported 2024 revenue up 23% at 2.24 billion euros, while its overall order book reached 6.6 billion euros (the equivalent of nearly three years of revenue). As for Rheinmetall, its order backlog has reportedly passed the 30-billion-euro mark, driven by sustained demand for armoured vehicles and ammunition.
For investors, the potential of this upheaval is immense. In addition to established giants (Dassault Aviation, BAE Systems, Leonardo, MBDA, etc.), many smaller but highly innovative companies are emerging in niche areas: drones, secure communications, counter-drone technologies and smart sensors.
The current situation opens a window of opportunity: the need for defence and security solutions is pressing, and European states are ready to mobilise unprecedented financial resources to meet it.
Defence spending by the 27 member states already exceeded 240 billion euros in 2022 (a 6% increase on 2021), and several analysts expect these investments to grow steadily in the coming years, supported by the temporary suspension of budget rules and the rise of joint rearmament projects.
Savvy investors see this as an opportunity to position themselves in a booming sector, while analysts stress the need to understand geopolitics and industrial priorities thoroughly in order to invest wisely.
The stakes are not only financial: dependence on other powers and the need to modernise European capabilities are now the subject of official statements, backed by considerable funds.
It is precisely to help you identify these trends and benefit from them that we have already published several supplements of the magazine on defence industry funding.
In issue #15, available in your member area, we review various French stocks (notably those eligible for the PEA, the French equity savings plan), European and global stocks, helping you navigate this jungle of opportunities.
Our approach aims to be both rigorous and concise: we combine precise figures with in-depth analysis of the strategic issues, to give you a clear view that is useful for your decision-making.
By choosing the Premium Pro&Business subscription, you also benefit from:
- Continuous strategic watch: geopolitical analysis, expert interviews, field reports…
- In-depth articles that go beyond the day’s news to offer you fresh angles on the defence industry.
- A professional newsletter summing up the essentials you need to know to anticipate trends and seize the right opportunities.
We sometimes hear “I’m already informed through the usual channels”. Yet following the flow of general news is no longer enough to understand the rapid changes in the defence sector and to spot the weak signals that make the difference.
Our team, which specialises in this field, dissects the essential data for you and offers a unique perspective.
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If you too want to gain an in-depth understanding of this rearmament dynamic, identify the key defence companies and benefit from our thematic reports, subscribe now to Défense Zone Premium Pro&Business.
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