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INDUSTRY PROFILE

Aerospace & Defense in Asia-Pacific


Reference Code: 0200-1002 Publication Date: October 2010

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Asia-Pacific - Aerospace & Defense


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EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Market value
The Asia-Pacific aerospace & defense sector grew by 6.3% in 2009 to reach a value of $174.5 billion.

Market value forecast


In 2014, the Asia-Pacific aerospace & defense sector is forecast to have a value of $301.7 billion, an increase of 72.9% since 2009.

Market segmentation I
Defense is the largest segment of the aerospace & defense sector in Asia-Pacific, accounting for 62.2% of the sector's total value.

Market segmentation II
China accounts for 51.5% of the Asia-Pacific aerospace & defense sector value.

Market share
Boeing is the leading player in the Asia-Pacific aerospace & defense sector, generating a 7.9% share of the sector's value.

Market rivalry
Rivalry within the Aerospace and Defense market is strong with large organizations competing intensely for government and commercial contracts.

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CONTENTS

TABLE OF CONTENTS
EXECUTIVE SUMMARY MARKET OVERVIEW Market definition Research highlights Market analysis MARKET VALUE MARKET SEGMENTATION I MARKET SEGMENTATION II MARKET SHARE COMPETITIVE LANDSCAPE LEADING COMPANIES The Boeing Company EADS N.V. Mitsubishi Heavy Industries, Ltd. Rolls-Royce Group plc MARKET FORECASTS Market value forecast APPENDIX Methodology Related Datamonitor research Disclaimer ABOUT DATAMONITOR Premium Reports Summary Reports Datamonitor consulting 2 6 6 7 8 9 10 11 12 13 16 16 20 25 29 33 33 34 34 35 36 37 37 37 37

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CONTENTS

LIST OF TABLES
Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Asia-Pacific aerospace & defense sector value: $ billion, 200509 Asia-Pacific aerospace & defense sector segmentation I:% share, by value, 2009 Asia-Pacific aerospace & defense sector segmentation II: % share, by value, 2009 Asia-Pacific aerospace & defense sector share: % share, by value, 2009 The Boeing Company: key facts The Boeing Company: key financials ($) The Boeing Company: key financial ratios EADS N.V.: key facts EADS N.V.: key financials ($) EADS N.V.: key financials () EADS N.V.: key financial ratios Mitsubishi Heavy Industries, Ltd.: key facts Mitsubishi Heavy Industries, Ltd.: key financials ($) Mitsubishi Heavy Industries, Ltd.: key financials () Mitsubishi Heavy Industries, Ltd.: key financial ratios Rolls-Royce Group plc: key facts Rolls-Royce Group plc: key financials ($) Rolls-Royce Group plc: key financials () Rolls-Royce Group plc: key financial ratios Asia-Pacific aerospace & defense sector value forecast: $ billion, 200914 9 10 11 12 16 18 18 20 23 23 23 25 27 27 27 29 31 31 31 33

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CONTENTS

LIST OF FIGURES
Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Asia-Pacific aerospace & defense sector value: $ billion, 200509 Asia-Pacific aerospace & defense sector segmentation I:% share, by value, 2009 Asia-Pacific aerospace & defense sector segmentation II: % share, by value, 2009 Asia-Pacific aerospace & defense sector share: % share, by value, 2009 The Boeing Company: revenues & profitability The Boeing Company: assets & liabilities EADS N.V.: revenues & profitability EADS N.V.: assets & liabilities Mitsubishi Heavy Industries, Ltd.: revenues & profitability Mitsubishi Heavy Industries, Ltd.: assets & liabilities Rolls-Royce Group plc: revenues & profitability Rolls-Royce Group plc: assets & liabilities Asia-Pacific aerospace & defense sector value forecast: $ billion, 200914 9 10 11 12 19 19 24 24 28 28 32 32 33

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MARKET OVERVIEW

MARKET OVERVIEW
Market definition
The aerospace & defense market is deemed to be the revenues accrued by manufacturers from civil and military aerospace and defense procurements. Such procurements only include equipment, parts, and maintenance (EPM); other elements of military spending, such as personnel and buildings, are omitted. Defense electronics and military aerospace are covered by the defense segment; the civil aerospace segment includes civilian planes and space equipment, but excludes military aircraft and related items. Any currency conversions used in the creation of this report have been calculated using constant 2009 annual average exchange rates. For the purposes of this report, Asia-Pacific comprises Australia, China, India, Japan, Singapore, South Korea, and Taiwan.

Asia-Pacific - Aerospace & Defense


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MARKET OVERVIEW

Research highlights
The Asia-Pacific aerospace & defense market had total revenue of $174.5 billion in 2009, representing a compound annual growth rate (CAGR) of 11.3% for the period spanning 2005-2009. Defense sales were the most lucrative in the Asia-Pacific aerospace & defense market in 2009, with total sales of $108.6 billion, equivalent to 62.2% of the market's overall value. The performance of the market is forecast to accelerate, with an anticipated CAGR of 11.6% for the fiveyear period 2009-2014, which is expected to drive the market to a value of $301.7 billion by the end of 2014.

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MARKET OVERVIEW

Market analysis
The Asia-Pacific aerospace & defense market has grown rapidly in the last five years, posting double-digit growth in 2006 and 2007 before decelerating in 2008 and 2009. The market is expected to accelerate and post double-digit growth every year between 2011 and 2014. The Asia-Pacific aerospace & defense market had total revenue of $174.5 billion in 2009, representing a compound annual growth rate (CAGR) of 11.3% for the period spanning 2005-2009. In comparison, the Chinese and South Korean markets grew with CAGRs of 19% and 2.2% respectively, over the same period, to reach respective values of $89.8 billion and $13.3 billion in 2009. Defense sales were the most lucrative in the Asia-Pacific aerospace & defense market in 2009, with total sales of $108.6 billion, equivalent to 62.2% of the market's overall value. In comparison, civil aerospace generated revenues of $65.9 billion in 2009, equating to 37.8% of the market total. The performance of the market is forecast to accelerate, with an anticipated CAGR of 11.6% for the fiveyear period 2009-2014, which is expected to drive the market to a value of $301.7 billion by the end of 2014. Comparatively, the Chinese and South Korean markets will grow with CAGRs of 15.6% and 6.8% respectively, over the same period, to reach respective values of $185.7 billion and $18.4 billion in 2014.

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MARKET VALUE

MARKET VALUE
The Asia-Pacific aerospace & defense sector grew by 6.3% in 2009 to reach a value of $174.5 billion. The compound annual growth rate of the sector in the period 200509 was 11.3%. Table 1: Year 2005 2006 2007 2008 2009 CAGR: 200509 Source: Datamonitor Asia-Pacific aerospace & defense sector value: $ billion, 200509 $ billion 113.6 131.9 150.2 164.2 174.5 billion 81.7 94.9 108.0 118.1 125.5 % Growth 16.1% 13.9% 9.3% 6.3% 11.3% DATAMONITOR

Figure 1:

Asia-Pacific aerospace & defense sector value: $ billion, 200509

Source: Datamonitor

DATAMONITOR

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MARKET SEGMENTATION I

MARKET SEGMENTATION I
Defense is the largest segment of the aerospace & defense sector in Asia-Pacific, accounting for 62.2% of the sector's total value. The civil aerospace segment accounts for the remaining 37.8% of the sector. Table 2: Category Defense Civil Aerospace Total Source: Datamonitor Asia-Pacific aerospace & defense sector segmentation I:% share, by value, 2009 % Share 62.2% 37.8% 100% DATAMONITOR

Figure 2:

Asia-Pacific aerospace & defense sector segmentation I:% share, by value, 2009

Source: Datamonitor

DATAMONITOR

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MARKET SEGMENTATION II

MARKET SEGMENTATION II
China accounts for 51.5% of the Asia-Pacific aerospace & defense sector value. Japan accounts for a further 15.3% of the Asia-Pacific sector. Table 3: Category China Japan India South Korea Rest of Asia-Pacific Total Source: Datamonitor Asia-Pacific aerospace & defense sector segmentation II: % share, by value, 2009 % Share 51.5% 15.3% 11.2% 7.6% 14.5% 100% DATAMONITOR

Figure 3:

Asia-Pacific aerospace & defense sector segmentation II: % share, by value, 2009

Source: Datamonitor

DATAMONITOR

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MARKET SHARE

MARKET SHARE
Boeing is the leading player in the Asia-Pacific aerospace & defense sector, generating a 7.9% share of the sector's value. EADS accounts for a further 6.9% of the sector. Table 4: Company Boeing EADS Mitsubishi Heavy Industries, Ltd. Rolls Royce Other Total Source: Datamonitor Asia-Pacific aerospace & defense sector share: % share, by value, 2009 % Share 7.9% 6.9% 3.0% 2.4% 79.8% 100% DATAMONITOR

Figure 4:

Asia-Pacific aerospace & defense sector share: % share, by value, 2009

Source: Datamonitor

DATAMONITOR

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COMPETITIVE LANDSCAPE

COMPETITIVE LANDSCAPE
The aerospace & defense market will be analyzed taking manufacturers of aerospace and defense equipment, products and systems as players. The key buyers will be taken as government organizations, the military, airline companies and space programs, and entities providing raw materials and parts for manufacture as the key suppliers. Rivalry within the Aerospace and Defense market is strong with large organizations competing intensely for government and commercial contracts. Players in the aerospace and defense market are generally large, integrated multinational companies, not least because acquisitions have become an increasing trend within the market. This scale makes it difficult for new companies wanting to enter the market, a problem further exacerbated by the high capital outlay and expertise needed for market success to be achieved. Also, it places such players in a powerful position providing them with strong bargaining power with buyers and suppliers. However, the financial muscle of typical buyers - particularly governments -dilutes this to some extent. Furthermore, despite suppliers' smaller scale relative to market players, high quality inputs are very important to the manufacturers' businesses, strengthening supplier power in the supply chain. In the commercial aircraft sector, two companies, Boeing and Airbus, hold a near-duopoly. As a result, buyers choice is limited. However recent setbacks for Airbus with its A380 aircraft which has experienced production problems leading to delays in its launch, has caused some buyers to switch their allegiance to Boeing aircraft. Further, the two companies often produce slightly differentiated offerings instead of competing head to head. Although more manufacturers exist in other aerospace and defense sectors, consolidation has led to increasingly smaller numbers of players. The large size of these competitors, due to past merger activity, means they have potentially strong bargaining power with buyers. However buyers in the defense segment have considerable financial muscle as they are nearly always government organizations. This power is diluted somewhat as aerospace and defense products and systems are highly important to them. Companies like Lockheed Martin not only provide military aircraft and hardware like missiles, but also cater for the repair and logistics needs of their buyers, which increases switching costs and decreases buyer power. Manufacturers are able differentiate their products through innovation which weakens buyer power. Overall buyer power is moderate.

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COMPETITIVE LANDSCAPE

Suppliers within the aerospace and defense market are those entities providing raw materials and components for manufacture. The quality and availability of these inputs is highly important to the quality of the end-products in the aerospace and defense industry, increasing the power of suppliers. In the years immediately prior to the 2008-09 recession, the rise in global commodity prices impacted company margins and increasing oil prices in particular affected the aerospace sector. Other primary raw materials used include metals such as aluminum and steel. As economies move out of recession and demand for aerospace and defense products rises, players will be aware that their input prices are also likely to start rising. Suppliers often provide to a wide range of industries such as automotive and rail, and this reduces their dependence on the aerospace and defense industries. However, there are also a large number of suppliers to choose from which increases players' choice and bargaining power. Supplier power is moderate overall. Entering the aerospace and defense market is extremely problematic. Most prospective players need to enter the market as large-scale, integrated companies in order to effectively compete against incumbents, most of whom are long-established and very strong brands. The business model typical of the market also requires large amounts of expenditure in terms of materials needed, storage and transportation, and so on. Expertise and knowledge is crucial to the success of companies, as the work is highly specialized. The arms industry has become increasingly concentrated, nationally as well as internationally. The share of the top 5 companies in the total arms sales of the SIPRI Top 100 increased from 22 per cent in 1990 to 43 per cent in 2005. Companies in the industry are obliged to adhere to strict regulations involving national security, export restrictions and licensing for military goods, accounting rules and safety requirements. Furthermore, increasing fears about global warming are leading to a focus on reducing emissions, with many firms having to re-design and adjust the way they manufacture products to improve fuel efficiency. Successful entry to the market may be more likely to be achieved if an existing company with similar operations (i.e. engineering) diversifies into the market. The steady growth of the market makes it more attractive to new entrants, particularly in the Asia-Pacific region where there is more potential for future growth. Overall the threat of new entrants is weak. There are no real substitutes to the manufacture of defense systems but there are alternatives to commercial aircraft. End-users of air transportation (passengers and companies wishing to transport their goods as air freight) may opt for alternative modes of transport, such as rail. In the short term the substitution of other modes of transport for air travel seems unlikely, but with increasing fears about global warming and carbon footprints, it is possible that alternative modes of transport may become attractive to companies seeking an eco-friendly reputation. In these circumstances, players in the civil aerospace sector may experience the pull-through of such changes in demand. This has been a problem area for airline manufacturers with the need for development leading to delays and uncertainties in fulfilling orders backlog. Overall, the threat of substitutes is weak.

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COMPETITIVE LANDSCAPE

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

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LEADING COMPANIES

LEADING COMPANIES
The Boeing Company
Table 5: The Boeing Company: key facts 100 North Riverside Plaza, Chicago, Illinois 60606 1596 USA 1 312 544 2000 www.boeing.com December BA New York DATAMONITOR

Head office: Telephone: Website: Financial year-end: Ticker: Stock exchange: Source: company website

The Boeing Company (Boeing) is one of the world's largest aerospace companies and a leading manufacturer of commercial airplanes and defense, space and security systems. It is one of the largest exporters in the US, serving customers in 90 countries. The company is one of the two major manufacturers of 100+ seat airplanes for the worldwide commercial airline industry and one of the largest defense contractors in the US. The company operates through six business divisions, commercial airplanes, Boeing military aircraft, network and space systems, global services and support, Boeing Capital Corporation, and other. The commercial airplanes division develops, produces and markets commercial jet aircraft and related support services, principally to the commercial airline industry worldwide. This division offers a range of commercial jetliners designed to meet a broad spectrum of passenger and cargo requirements of domestic and non-U.S. airlines. This range of commercial jet aircraft currently includes the 737 narrowbody model and the 747, 767, 777 and 787 wide-body models. The commercial airplanes division also offers aviation services support, aircraft modifications, spares, training, maintenance documents and technical advice to commercial and government customers worldwide. Boeing military aircraft, network and space systems, global services and support divisions comprise the company's Boeing Defense, Space and Security (BDS) business. BDS operations principally involve research, development, production, modification and support of global strike systems, global mobility systems, rotorcraft systems, airborne surveillance and reconnaissance aircraft, network and tactical systems, intelligence and security systems, missile defense systems, and space and intelligence systems. BDS' customers include the United States Department of Defense (US DoD), the National Aeronautics and Space Administration (NASA) and other significant entities in the international defense, civil and commercial satellite markets.
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LEADING COMPANIES

Boeing military aircraft division is engaged in the research, development, production and modification of military aircraft and precision engagement and mobility products and services. The division offers AH-64 Apache, Airborne Early Warning and Control (AEW&C), CH-47 Chinook, C-17 Globemaster, EA-18G Growler Airborne Attack Electronic Aircraft, F/A-18E/F Super Hornet, F-15 Strike Eagle, F-22 Raptor, Harpoon, International KC-767 Tanker, Joint Direct Attack Munition, P-8A Poseidon, Small Diameter Bomb, T-45 TS Goshawk and V-22 Osprey. Network and space division is engaged in the research, development, production and modification of products and services to assist its customers in transforming their operations through network integration, intelligence and surveillance systems, communications, architectures and space exploration. This division offers a wide range of products including airborne laser, family of advanced beyond line-of-sight terminals, brigade combat team modernization (formerly Future Combat Systems), future rapid effects system, global positioning system, ground-based midcourse defense, international space station, joint tactical radio system, satellite systems, SBInet, space payloads and space shuttle. Global services and support segment division is engaged in the operations, maintenance, training, upgrades and logistics support functions for military platforms and operations. This division offers a wide range of activities, including integrated logistics on platforms AH-64, AV-8B, C-17, CH-47, F-15, F/A-18, F-22, GMD, International 767 Tanker and V-22; and maintenance, modifications and upgrades on platforms A-10, B-1, B-52, C-32, C-40, C-130, E-4B, E-6, KC-10, KC-135, T-38 and VC-25. It also offers training systems and services on platforms including AH-64, C-17, F-15, F-16, F/A-18 and T-45 and international support and advanced global services and support. Boeing Capital Corporation (BCC) facilitates, arranges, structures and provides selective financing solutions for the company's commercial airplanes customers. In the space and defense markets, BCC primarily arranges and structures financing solutions for its BDS government customers. BCC's portfolio consists of equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease and investments. All other activities fall within the other division, principally made up of engineering, operations and technology (EO&T) and its shared services group. EO&T is an advanced research and development organization focused on innovative technologies, improved processes and the creation of new products.

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LEADING COMPANIES

Key Metrics The company recorded revenues of $68,281 million in the fiscal year ending December 2009, an increase of 12.1% compared to fiscal 2008. Its net income was $1,312 million in fiscal 2009, compared to a net income of $2,672 million in the preceding year.

Table 6: $ million

The Boeing Company: key financials ($) 2005 53,621.0 2,572.0 59,996.0 48,937.0 153,000 2006 61,530.0 2,215.0 51,794.0 47,055.0 154,000 2007 66,387.0 4,074.0 58,986.0 49,982.0 159,300 2008 60,909.0 2,672.0 53,779.0 55,073.0 162,200 2009 68,281.0 1,312.0 62,053.0 59,828.0 158,333

Revenues Net income (loss) Total assets Total liabilities Employees Source: company filings

DATAMONITOR

Table 7: Ratio

The Boeing Company: key financial ratios 2005 4.8% 4.3% 6.7% 8.9% 81.6% 4.4% $350,464 $16,810 2006 3.6% 14.7% (13.7%) (3.8%) 90.9% 4.0% $399,545 $14,383 2007 6.1% 7.9% 13.9% 6.2% 84.7% 7.4% $416,742 $25,574 2008 4.4% (8.3%) (8.8%) 10.2% 102.4% 4.7% $375,518 $16,473 2009 1.9% 12.1% 15.4% 8.6% 96.4% 2.3% $431,249 $8,286

Profit margin Revenue growth Asset growth Liabilities growth Debt/asset ratio Return on assets Revenue per employee Profit per employee Source: company filings

DATAMONITOR

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LEADING COMPANIES

Figure 5:

The Boeing Company: revenues & profitability

Source: company filings

DATAMONITOR

Figure 6:

The Boeing Company: assets & liabilities

Source: company filings

DATAMONITOR

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LEADING COMPANIES

EADS N.V.
Table 8: EADS N.V.: key facts Mendelweg 30, 2333 CS Leiden NLD 31 71 524 56 00 www.eads.com December EAD Paris, Madrid DATAMONITOR

Head office: Telephone: Website: Financial year-end: Ticker: Stock exchange: Source: company website

European Aeronautic Defense and Space Company (EADS) is an aerospace, defense and related services company. The company operates in North America, Europe, Asia-Pacific, Middle East and Latin America. The company operates through six business divisions: Airbus commercial, defense and security, Astrium, Eurocopter, Airbus military, and other. Airbus is one of the world's leading aircraft suppliers. The Airbus commercial product line comprises a full range of aircraft models, from the 107-seat single-aisle A318 aircraft to the 525-seat A380 (the largest civil aircraft in service worldwide). Airbus delivered 498 aircrafts in FY2009. The various aircrafts offered by Airbus include the Airbus A320 family, Airbus A310/A300 family, Airbus A330/A340 family, Airbus A350 XWB, Airbus A380 family, Airbus A300-600ST and Airbus corporate jetliner. The defense and security systems division (DS) offers integrated systems solutions for the armed forces and global security. It has a wide range of platforms, including EADS's role in Eurofighter, missile systems, defense communication systems, defense electronics and services. Through its defense and security division, the company provides network solutions combining military aircraft, missile systems, defense and communications systems, defense electronics and related services. It also supplies electronics and sensors for Unmanned Aerial Vehicles; advanced avionics for the company's helicopters; and high-tech products for secure communications. The Astrium division is one of the Europe's preeminent space groups. This division is a supplier of satellites, launchers and space services. Astrium operates through its subsidiaries, including Dutch Space, Infoterra, Paradigm Secure Communications/Paradigm Services and Tesat-Spacecom. Dutch Space offers launcher equipment, robotics, space instruments and solar arrays. Infoterra provides Earth observation data, services and related products. Paradigm Secure Communications/Paradigm Services offer military communications services and Tesat-Spacecom offers satellite communications equipment and subsystems.
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LEADING COMPANIES

The Eurocopter division manufactures and sells a wide range of civil and military helicopters. With approximately 2,800 operators worldwide, Eurocopter's product range includes light single-engine, light twin-engine, medium and heavy helicopters which are adaptable to different mission types based on customer needs. It delivered 558 helicopters in FY2009. Airbus military was formally created in April 2009, following the integration of the former Military Transport Aircraft Division (MTAD) and of Airbus Military Sociedad (AMSL) into Airbus. It is a military and humanitarian transport aircraft manufacturer and is engaged into developing, producing, selling and supporting a comprehensive family of airlifters ranging from three to 37 tonnes of payload. Airbus military is fully responsible for the A400M programme, as well as for the military tanker transport (MRTT) derivative of the A330, which can be fitted with an in-house developed state-of-the art flight-refuelling boom (ARBS). It is also responsible for future military derivative of civil Airbus platforms. Airbus military is one of the leaders in the market segments for light and medium-sized military transport aircraft. Airbus military is also into conversion of the civil Airbus platforms into Multi Role Tanker Transport (MRTT) aircraft. Airbus military provides services to more than 800 aircrafts. Airbus military applies the Integrated Logistic Support concept throughout the life cycle of its products, from the first design phase right through to the end of their useful lifetimes. The other businesses division includes the ATR (Avions de Transport Regional), EADS EFW, EADS Socata and EADS Sogerma services. The activities of these business units comprise development, manufacturing, marketing and sale of regional turboprop aircraft, light commercial aircraft and aircraft components, as well as civil and military aircraft conversion and maintenance services. ATR is the one of the largest manufacturers of regional aircrafts. ATR is organized into several business units: commercial directorate, financial department, customer services and shared services unit and ATR engineering, operations and technology unit. EADS EFW business includes the conversion of Airbus passenger aircraft into freighters and the associated maintenance work. It also designs and manufactures fiber reinforced equipment components for aircraft interiors. EADS Socata serves the business aviation, personal and flight-training markets with a range of single-engine aircraft. EADS Sogerma services provide support services for civil and military aircraft. It designs and manufactures aerostructure elements in metal and composite for commercial and military aircraft such as Airbus A318/A319, A320, A340, A380, A400M, ATR, Bombardier and Boeing 787, etc. EADS Sogerma also provides cockpit and passengers seats for commercial and military aircraft as well as for business jets and helicopters.

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LEADING COMPANIES

Key Metrics The company recorded revenues of $59,544 million in the fiscal year ending December 2009, a decrease of 1.1% compared to fiscal 2008. Its net loss was $1,061 million in fiscal 2009, compared to a net income of $2,186 million in the preceding year.

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LEADING COMPANIES

Table 9: $ million

EADS N.V.: key financials ($) 2005 47,563.8 2,330.5 98,459.3 80,094.8 113,210 2006 54,833.4 137.7 100,307.3 82,019.3 116,805 2007 54,401.0 (620.2) 104,922.4 86,596.9 116,493 2008 60,209.1 2,185.9 105,891.6 90,420.8 118,349 2009 59,544.5 (1,061.0) 111,663.6 96,867.2 119,506

Revenues Net income (loss) Total assets Total liabilities Employees Source: company filings

DATAMONITOR

Table 10: million

EADS N.V.: key financials () 2005 34,206.0 1,676.0 70,808.0 57,601.0 2006 39,434.0 99.0 72,137.0 58,985.0 2007 39,123.0 (446.0) 75,456.0 62,277.0 2008 43,300.0 1,572.0 76,153.0 65,027.0 2009 42,822.0 (763.0) 80,304.0 69,663.0

Revenues Net income (loss) Total assets Total liabilities Source: company filings

DATAMONITOR

Table 11: Ratio

EADS N.V.: key financial ratios 2005 4.9% 7.7% 21.5% 39.5% 81.3% 2.6% $420,138 $20,586 2006 0.3% 15.3% 1.9% 2.4% 81.8% 0.1% $469,444 $1,179 2007 (1.1%) (0.8%) 4.6% 5.6% 82.5% (0.6%) $466,989 ($5,324) 2008 3.6% 10.7% 0.9% 4.4% 85.4% 2.1% $508,742 $18,470 2009 (1.8%) (1.1%) 5.5% 7.1% 86.7% (1.0%) $498,255 ($8,878)

Profit margin Revenue growth Asset growth Liabilities growth Debt/asset ratio Return on assets Revenue per employee Profit per employee Source: company filings

DATAMONITOR

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LEADING COMPANIES

Figure 7:

EADS N.V.: revenues & profitability

Source: company filings

DATAMONITOR

Figure 8:

EADS N.V.: assets & liabilities

Source: company filings

DATAMONITOR

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LEADING COMPANIES

Mitsubishi Heavy Industries, Ltd.


Table 12: Mitsubishi Heavy Industries, Ltd.: key facts 16-5 Konan 2-chome, Minato ku, Tokyo 108 8215 JPN 81 3 6716 3111 www.mhi.co.jp March 7011 Tokyo DATAMONITOR

Head office: Telephone: Website: Financial year-end: Ticker: Stock exchange: Source: company website

Mitsubishi Heavy Industries (MHI) is a Japanese manufacturing company engaged in the design, development, manufacture, and sale of industrial equipment and machinery. The company has global operations spanning Asia, Europe, and the Americas. The company operates through six business divisions: power systems, mass and medium-lot manufactured machinery, machinery and steel structures, aerospace, shipbuilding and ocean development, and others. The power systems division develops energy conservation measures, petroleum substitutes, and new forms of energy. The division is also involved in the nuclear power field as one of the world's leading manufacturers of nuclear power plants. This division is into manufacturing, installation, sale and repair of boilers, steam turbines, gas turbines, diesel engines, water turbines, wind turbines, SCR (DeNOx) system, marine machinery, desalination plants, nuclear power plants and equipment, advanced reactor plants, nuclear fuel cycle plants, and nuclear fuel, among others. The mass and medium lot manufactured machinery (MMM) division develops and manufactures products such as engines and forklift trucks for the logistics field. Its air-conditioning and refrigeration systems product line offers a range of air-conditioning products. The industrial machinery unit manufactures extrusion machinery, used in the production of plastic products, beverage filling and packaging machines, and other industrial equipment. This division also includes the paper and printing machinery business in the paper-related equipment field.

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LEADING COMPANIES

The machinery and steel structures division provides a range of equipment and systems applicable for waste treatment, flue gas desulphurization and treatment, environmental control, and transportation. It also supplies bridges, stacks, hydraulic gates, transportation equipment, tunneling machinery, and other products. The division is also involved with the construction of bridges, parking systems, and leisure and entertainment facilities. This division is also into the manufacturing and installation of petrochemical plants, flue gas desulphurization systems, flue gas CO2 recovery plants, oil and gas production plants, and other chemical plants. The aerospace division is involved in manufacturing, installation, sale and repair of fighter jets, helicopters, and other aircraft, structural parts and components of commercial transport aircraft, aero engines, missiles, torpedoes, space systems, and launch services via launch vehicles. The shipbuilding and ocean development division manufactures a range of large vessels and ocean structures such as crude oil carriers, container ships, cruise ships, car ferries, LPG carriers, LNG carriers, defense vessels, and offshore structures. The other operations of the division include manufacturing equipment related to marine research, survey, and development projects. The division also manufactures equipment and offers other facilities that are used by oil and gas companies. Key Metrics The company recorded revenues of $31,414 million in the fiscal year ending March 2010, a decrease of 12.9% compared to fiscal 2009. Its net income was $151 million in fiscal 2010, compared to a net income of $259 million in the preceding year.

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LEADING COMPANIES

Table 13: $ million

Mitsubishi Heavy Industries, Ltd.: key financials ($) 2006 29,824.9 318.5 43,230.8 28,339.6 62,212 2007 32,777.3 521.7 46,913.3 31,462.6 62,940 2008 34,214.9 655.1 48,251.5 32,865.1 64,103 2009 36,058.5 258.7 48,348.3 34,640.8 67,416 2010 31,414.1 151.3 45,535.2 31,341.5 67,400

Revenues Net income (loss) Total assets Total liabilities Employees Source: company filings

DATAMONITOR

Table 14: million

Mitsubishi Heavy Industries, Ltd.: key financials () 2006 2007 2008 2009 2010 2,940,887.0 14,163.0 4,262,859.0 2,934,087.0

Revenues Net income (loss) Total assets Total liabilities Source: company filings

2,792,109.0 3,068,505.0 3,203,085.0 3,375,674.0 29,817.0 48,840.0 61,332.0 24,217.0 4,047,122.0 4,391,865.0 4,517,148.0 4,526,213.0 2,653,062.0 2,945,429.0 3,076,719.0 3,242,961.0

DATAMONITOR

Table 15: Ratio

Mitsubishi Heavy Industries, Ltd.: key financial ratios 2006 1.1% 7.8% 5.6% 5.9% 65.6% 0.8% $479,407 $5,120 2007 1.6% 9.9% 8.5% 11.0% 67.1% 1.2% $520,771 $8,289 2008 1.9% 4.4% 2.9% 4.5% 68.1% 1.4% $533,749 $10,220 2009 0.7% 5.4% 0.2% 5.4% 71.6% 0.5% $534,865 $3,837 2010 0.5% (12.9%) (5.8%) (9.5%) 68.8% 0.3% $466,085 $2,245

Profit margin Revenue growth Asset growth Liabilities growth Debt/asset ratio Return on assets Revenue per employee Profit per employee Source: company filings

DATAMONITOR

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LEADING COMPANIES

Figure 9:

Mitsubishi Heavy Industries, Ltd.: revenues & profitability

Source: company filings

DATAMONITOR

Figure 10: Mitsubishi Heavy Industries, Ltd.: assets & liabilities

Source: company filings

DATAMONITOR

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LEADING COMPANIES

Rolls-Royce Group plc


Table 16: Rolls-Royce Group plc: key facts 65 Buckingham Gate, London SW1E 6AT GBR 44 20 7222 9020 www.rolls-royce.com December RR London DATAMONITOR

Head office: Telephone: Website: Financial year-end: Ticker: Stock exchange: Source: company website

Rolls-Royce is a global company, which provides power solutions for customers in aerospace, marine and energy markets. The company has a broad customer base comprising 600 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces, more than 2,000 marine customers, and energy customers in nearly 120 countries. It has offices, manufacturing and service facilities in 50 countries around the world. The company operates through four business segments: civil aerospace, defense aerospace, marine and energy. The civil aerospace segment is engaged in the development, manufacture, marketing and sales of commercial aero engines and aftermarket services. It provides engines to commercial airlines, corporate aircrafts and helicopters. It serves all major international and national airline operators such as Singapore Airlines, Lufthansa and Hainan Airlines. The segment also provides a range of services to civil aviation industry. The company also provides repair and overhaul services, e-business initiatives and corporate care initiatives. The company has a fleet of 12,000 large civil aero engines in service. The defense aerospace segment is engaged in the development, manufacture, marketing and sales of military aero engines and aftermarket services. It provides engines to the combat aircrafts and helicopters in the defense sector. The segment's portfolio covers all major market sectors including transporters, helicopters, combat, trainers and tactical aircrafts. The defense aerospace segment serves 160 customers in 103 countries.

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LEADING COMPANIES

The marine segment is engaged in the development, manufacture, marketing and sales of marine propulsion systems and aftermarket services. The company provides a range of capabilities and expertise in the marine sector for naval surface ships, submarines, offshore and merchant vessels. The marine segment serves more than 2,000 commercial marine customers and 70 navies. It has equipment installed on over 30,000 vessels operating around the world. The energy segment is engaged in the development, manufacture, marketing and sales of power systems for the offshore oil and gas industry, electrical power generation and aftermarket services. It provides gas turbine based generating sets and reciprocating engines for energy market. The company offers its onshore and offshore equipment to oil and gas companies and for companies operating in distributed electricity generation. The segment provides a range of power generation products, automation control systems, and a variety of oil and gas producing equipment, including gas turbines and centrifugal compressors. The segment also offers repair and overhaul services, component supply and technical support services. Key Metrics The company recorded revenues of $16,232 million in the fiscal year ending December 2009, an increase of 14.7% compared to fiscal 2008. Its net income was $3,455 million in fiscal 2009, compared to a net loss of $2,096 million in the preceding year.

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LEADING COMPANIES

Table 17: $ million

Rolls-Royce Group plc: key financials ($) 2005 10,291.6 540.8 14,524.9 12,179.1 35,600 2006 11,153.5 1,549.3 16,175.4 11,900.1 37,300 2007 11,588.4 935.2 17,860.3 12,328.7 39,000 2008 14,155.5 (2,096.4) 23,736.3 19,791.5 39,000 2009 16,231.5 3,455.5 24,037.2 18,142.4 38,500

Revenues Net income (loss) Total assets Total liabilities Employees Source: company filings

DATAMONITOR

Table 18: million

Rolls-Royce Group plc: key financials () 2005 6,603.0 347.0 9,319.0 7,814.0 2006 7,156.0 994.0 10,378.0 7,635.0 2007 7,435.0 600.0 11,459.0 7,910.0 2008 9,082.0 (1,345.0) 15,229.0 12,698.0 2009 10,414.0 2,217.0 15,422.0 11,640.0

Revenues Net income (loss) Total assets Total liabilities Source: company filings

DATAMONITOR

Table 19: Ratio

Rolls-Royce Group plc: key financial ratios 2005 5.3% 11.0% 14.9% 17.2% 83.9% 4.0% $289,090 $15,192 2006 13.9% 8.4% 11.4% (2.3%) 73.6% 10.1% $299,023 $41,536 2007 8.1% 3.9% 10.4% 3.6% 69.0% 5.5% $297,138 $23,979 2008 (14.8%) 22.2% 32.9% 60.5% 83.4% (10.1%) $362,960 ($53,753) 2009 21.3% 14.7% 1.3% (8.3%) 75.5% 14.5% $421,599 $89,753

Profit margin Revenue growth Asset growth Liabilities growth Debt/asset ratio Return on assets Revenue per employee Profit per employee Source: company filings

DATAMONITOR

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LEADING COMPANIES

Figure 11: Rolls-Royce Group plc: revenues & profitability

Source: company filings

DATAMONITOR

Figure 12: Rolls-Royce Group plc: assets & liabilities

Source: company filings

DATAMONITOR

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MARKET FORECASTS

MARKET FORECASTS
Market value forecast
In 2014, the Asia-Pacific aerospace & defense sector is forecast to have a value of $301.7 billion, an increase of 72.9% since 2009. The compound annual growth rate of the sector in the period 200914 is predicted to be 11.6%. Table 20: Year 2009 2010 2011 2012 2013 2014 CAGR: 200914 Source: Datamonitor Asia-Pacific aerospace & defense sector value forecast: $ billion, 200914 $ billion 174.5 189.1 211.5 236.9 267.9 301.7 billion 125.5 136.0 152.1 170.4 192.6 217.0 % Growth 6.3% 8.4% 11.8% 12.0% 13.0% 12.6% 11.6% DATAMONITOR

Figure 13: Asia-Pacific aerospace & defense sector value forecast: $ billion, 200914

Source: Datamonitor

DATAMONITOR

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APPENDIX

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

Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

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APPENDIX

Related Datamonitor research


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APPENDIX

Disclaimer
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