Future of the Italian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021

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Italy’s defense expenditure decreased from US$18.1 billion in 2012 to US$15.4 billion in 2016, reflecting a negative CAGR of 3.95%.This reduction can be attributed to the country’s struggling economy and the government’s attempt to reduce Italy’s overall expenditure. However, this trend is expected to change considering Italy’s plan to modernize its defense equipment and strategic initiative to counter terrorism. The defense expenditure over the forecast period is projected to rise from US$14.8 billion in 2017 to US$16.5 billion in 2021, at a CAGR of 2.75%. The country is estimated to maintain the budget allocation towards capital expenditure to an average of 14.6% over the forecast period.

Scope

• During 2012–2016, Italian defense expenditure registered negative growth of -3.95%, decreasing from US$18.1 billion in 2012 to US$15.4 billion in 2016

• Defense expenditure is anticipated to register a positive CAGR of 2.72% over 2017–2021and reach a value of US$16.5 billion in 2021

• Over the forecast period, the country’s budget for homeland security is expected to be US$33.9 billion cumulatively

• The key areas of investment are expected to be frigates, fighters and multi-role aircraft, missile defense systems, transport and utility helicopters, and amphibious ships

Reasons to Buy

Identify and track the global defense market and make regional comparisons to effectively target new revenue streams

Understand the importance of being led by the defense ministries in the military procurement market and define your strategies with insight on what your customers really want by analyzing recent orders, technical specifications, and the country’s expected investment pattern during 2017–2021

Make correct business decisions based on detailed analysis of the defense industry from 2017–2021,which includes the total competitive landscape of the sector with detailed profiles of the top domestic and foreign defense manufacturers along with information about their products, alliances, recent contract wins, and financial analysis

Determine prospective investment areas by gaining an in-depth understanding of the industry in terms of market opportunities

Channel resources by identifying various military requirements that are expected to generate revenues across different sectors during 2017–2021

Finmeccanica
Selex ES

Table of Contents

1. Introduction

1.1. What is this Report About?

1.2. Definitions

1.3. Summary Methodology

1.4. SDI Terrorism Index

1.5. About Strategic Defense Intelligence

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities

3.1. Defense Market Size Historical and Forecast

3.1.1. Italian annual defense expenditure expected to reach US$XX billion in XX

3.1.2. Modernization of defense systems, peacekeeping initiatives, maintaining NATO, EU, and UN stipulations, and increasing terrorism activities expected to drive Italian defense expenditure

3.1.3. Defense expenditure as a percentage of GDP is expected to average XX% during the forecast period 22

3.2. Analysis of Defense Budget Allocation

3.2.1. The majority of Italy’s defense budget is allocated for revenue expenditure

3.2.2. Overall capital expenditure is expected to grow at a CAGR of XX% during the forecast period

3.2.3. Common services leads the defense budget allocation with XX% share during 2012 to 2016

3.2.4. Army expenditure expected to reach US$XXbillion by 2021

3.2.5. Air force expenditure expected to grow at CAGR XX% during forecast period

3.2.6. Cumulative navy expenditure expected to be US$XX billion during the forecast period

3.2.7. Common services expenditure is expected to reachUS$XX billion in 2021

3.3. Homeland Security Market Size and Forecast

3.3.1. Homeland security expenditure expected to reach US$XX billion in 2021

3.3.2. Homeland security expenditure in Italy is mainly driven by activities such as terrorism in the country, mafia wars, cyber security issues, and rising anarchist groups

3.3.3. SDI Terrorism Index rates Italy as a “XX” region

3.3.4. Italy has a score of XX on the Terrorism Index

3.4. Benchmarking with Key Global Markets

3.4.1. Italian defense expenditure expected to increase significantly over the forecast period

3.4.2. Italy is one of the largest defense spenders in the world

3.4.3. Italy expected to spend an average of XX% of its GDP on defense over the forecast period

3.4.4. Italy faces “moderate risk” by acts of terrorism

3.5. Market Opportunities: Key Trends and Drivers

3.5.1. Frigates

3.5.2. Fighters and Multi-Role Aircraft

3.5.3. Missile Defense System

3.5.4. Transport and Utility Helicopter

3.5.5. Amphibious Ships

4. Defense Procurement Market Dynamics

4.1. Import Market Dynamics

4.1.1. Arms imports expected to remain constant during the forecast period

4.1.2. European countries such as Germany, France, and the UK have entered the import market in competition with the US

4.1.3. Aircraft, ships, and sensors were the key defense imports during 2011–2015

4.2. Export Market Dynamics

4.2.1. Falling exports is a cause for concern for Italy’s emerging military industry

4.2.2. Asia and the Middle East to account for a major portion of Italian defense exports

4.2.3. Aircraft was the main exported defense product during 2011–2015

5. Industry Dynamics

5.1. Five Forces Analysis

5.1.1. Bargaining power of the supplier: medium

5.1.2. Bargaining power of the buyer: High

5.1.3. Barrier to entry: low

5.1.4. Intensity of rivalry: low

5.1.5. Threat of substitution: low

6. Market Entry Strategy

6.1. Market Regulation

6.1.1. The Italian defense industry is largely driven by government regulation and policy

6.1.2. Restrictive defense policies to prevent increase in foreign investment

6.2. Market Entry Route

6.2.1. Technology transfer provides good market entry opportunities

6.2.2. Research and development collaborations offer market access

6.2.3. Joint ventures, partnerships, and licensing agreements are key market entry strategies in Italy

6.3. Key Challenges

6.3.1. Defense budget cuts across Europe challenge domestic defense companies

6.3.2. Restrictive foreign policy poses a challenge for non-European companies to enter the Italian defense industry

7. Competitive Landscape and Strategic Insights

7.1. Competitive Landscape Overview

7.2. Key Domestic Companies

7.2.1. Finmeccanica: overview

7.2.2. Finmeccanica: products

7.2.3. Finmeccanica: recent announcements and strategic initiatives

7.2.4. Finmeccanica: alliances

7.2.5. Finmeccanica: recent contract wins

7.2.6. Finmeccanica: financial analysis

7.2.7. Selex ES: overview

7.2.8. Selex ES: products and services

7.2.9. Selex ES: recent announcements and strategic initiatives

7.2.10. Selex ES: alliances

7.2.11. Selex ES: recent contract wins

7.2.12. Oto Melara: overview

7.2.13. Oto Melara: products

7.2.14. Oto Melara: recent announcements and strategic initiatives

7.2.15. Oto Melara: alliances

7.2.16. Oto Melara: recent contract wins

7.2.17. Fincantieri: overview

7.2.18. Fincantieri: defense products

7.2.19. Fincantieri: recent announcements and strategic initiatives

7.2.20. Fincantieri: alliances

7.2.21. Fincantieri: recent contract wins

7.2.22. Fincantieri: financial analysis

7.2.23. MBDA: overview

7.2.24. MBDA: defense products

7.2.25. MBDA: recent announcements and strategic initiatives

7.2.26. MBDA: alliances

7.2.27. MBDA: recent contract wins

7.2.28. WASS: overview

7.2.29. WASS: products

7.2.30. WASS: alliances

7.2.31. WASS: recent contract wins

7.3. Key Private Companies

7.3.1. Elettronica: overview

7.3.2. Elettronica: products

7.3.3. Elettronica: recent announcements and strategic initiatives

7.3.4. Elettronica: alliances

7.3.5. Elettronica: recent contract wins

8. Business Environment and Country Risk

8.1. Economic Performance

8.1.1. Gross Domestic Product per Capita

8.1.2. Gross Domestic Product, current US$

8.1.3. Exports of Goods and Services

8.1.4. Imports of Goods and Services

8.1.5. Gross National Disposable Income

8.1.6. Local Currency Unit per USD

8.1.7. Market Capitalization of Listed Companies

8.1.8. Market Capitalization of Listed Companies (% of GDP)

8.1.9. Total Government Cash Surplus/Deficit as % of GDP (LCU bn)

8.1.10. Goods Exports as a % of GDP

8.1.11. Goods Imports as a % of GDP

8.1.12. Services Imports as a % of GDP

8.1.13. Services Exports as a % of GDP

8.1.14. Net Foreign Direct Investment (BoP, current US$ bn)

8.1.15. Net FDI as a % of GDP

8.2. Minerals

8.2.1. Mining, Manufacturing, Utilities Output (US$ billion)

9. Appendix

9.1. About SDI

9.2. Disclaimer

Table

Table 1: Italian Defense Expenditure (US$ Billion), 2012–2016

Table 2: Italian Defense Expenditure (US$ Billion), 2017–2021

Table 3: Italian Defense Expenditure (EUR Billion), 2012–2016

Table 4: Italian Defense Expenditure (EUR Billion), 2017–2021

Table5: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2012–2016

Table 6: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2017–2021

Table 7: Italian Defense Budget Split Between Capital and Revenue Expenditure (%), 2012–2016

Table 8: Italian Defense Budget Split Between Capital and Revenue Expenditure (%), 2017–2021

Table 9: Italian Capital Expenditure (US$ billion), 2012–2016

Table 10: Italian Capital Expenditure (US$ billion), 2017–2021

Table 11: Italian Capital Expenditure (EUR billion), 2012–2016

Table 12: Italian Capital Expenditure (EUR billion), 2017–2021

Table 13: Italian Defense Expenditure Split (%), 2012–2016

Table 14: Italian Defense Expenditure Split (%), 2017–2021

Table 15: Italian Army Expenditure (US$ Billion), 2012–2016

Table 16: Italian Army Expenditure (US$ Billion), 2017–2021

Table 17: Italian Army Expenditure (EUR Billion), 2012–2016

Table 18: Italian Army Expenditure (EUR Billion), 2017–2021

Table 19: Italian Air Force Expenditure (US$ Billion), 2012–2016

Table 20: Italian Air Force Expenditure (US$ Billion), 2017–2021

Table 21: Italian Air Force Expenditure (EUR Billion), 2012–2016

Table 22: Italian Air Force Expenditure (EUR Billion), 2017–2021

Table 23: Italian Navy Expenditure (US$ Billion), 2012–2016

Table 24: Italian Navy Expenditure (US$ Billion), 2017–2021

Table 25: Italian Navy Expenditure (EUR Billion), 2012–2016

Table 26: Italian Navy Expenditure (EUR Billion), 2017–2021

Table 27: Italian Common Services Expenditure (US$ Billion), 2012–2016

Table 28: Italian Common Services Expenditure (US$ Billion), 2017–2021

Table 29: Italian Homeland Security Budget (US$ billion), 2012–2016

Table 30: Italian Homeland Security Budget (US$ billion), 2017–2021

Table 31: Italian Homeland Security Budget (EUR billion), 2012–2016

Table 32: Italian Homeland Security Budget (EUR billion), 2017–2021

Table 33: Benchmarking with Key Markets – 2012–2016vs. 2017–2021

Table 34: SDI Terrorism Index

Table 35: Offset Regulations in Italy

Table 36: Italian Joint Development Programs for Missile Defense Systems

Table 37: Finmeccanica – Product Focus

Table 38: Finmeccanica – Alliances

Table 39: Finmeccanica- Recent Contract Wins

Table 40: Selex ES– Product Focus

Table 41: Selex ES – Alliances

Table 42: Selex ES – Recent Contract Wins

Table 43: Oto Melara – Product Focus

Table 44: Oto Melara – Alliances

Table 45: Oto Melara – Recent Contract Wins

Table 46: Fincantieri – Product Focus

Table 47: Fincantieri – Alliances

Table 48: Fincantieri – Recent Contract Wins

Table 49: MBDA – Product Focus

Table 50: MBDA – Alliances

Table 51: MBDA – Recent Contract Wins

Table 52: WASS – Product Focus

Table 53: WASS – Alliances

Table 54: WASS – Recent Contract Wins

Table 55: Elettronica – Product Focus

Table 56: Elettronica – Alliances

Table 57: Elettronica – Recent Contract Wins

Figures

Figure 1: Italian Defense Expenditure (US$ Billion), 2012–2016

Figure 2: Italian Defense Expenditure (US$ Billion), 2017–2021

Figure 3: Italian Defense Expenditure (EUR Billion), 2012–2016

Figure 4: Italian Defense Expenditure (EUR Billion), 2017–2021

Figure 5: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2012–2016

Figure 6: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2017–2021

Figure 7:Italian Defense Budget Split Between Capital and Revenue Expenditure (%), 2012–2016

Figure 8: Italian Defense Budget Split Between Capital and Revenue Expenditure (%), 2017–2021

Figure 9: Italian Capital Expenditure (US$ billion), 2012–2016

Figure 10:Italian Capital Expenditure (US$ billion), 2017–2021

Figure 11: Italian Capital Expenditure (EUR billion), 2012–2016

Figure 12:Italian Capital Expenditure (EUR billion), 2017–2021

Figure 13: Italian Defense Expenditure Split (US$ billion), 2012–2016

Figure 14: Italian Defense Expenditure Split (US$ billion), 2017–2021

Figure 15: Italian Army Expenditure (US$ Billion), 2012–2016

Figure 16: Italian Army Expenditure (US$ Billion), 2017–2021

Figure 17: Italian Army Expenditure (EUR Billion), 2012–2016

Figure 18: Italian Army Expenditure (EUR Billion), 2017–2021

Figure 19: Italian Air force Expenditure (US$ Billion), 2012–2016

Figure 20: Italian Air Force Expenditure (US$ Billion), 2017–2021

Figure 21: Italian Air force Expenditure (EUR Billion), 2012–2016

Figure 22: Italian Air Force Expenditure (EUR Billion), 2017–2021

Figure 23: Italian Navy Expenditure (US$ Billion), 2012–2016

Figure 24: Italian Navy Expenditure (US$ Billion), 2017–2021

Figure 25: Italian Navy Expenditure (EUR Billion), 2012–2016

Figure 26: Italian Navy Expenditure (EUR Billion), 2017–2021

Figure 27: Italian Common Services Expenditure (US$ Billion), 2012–2016

Figure 28: Italian Common Services Expenditure (US$ Billion), 2017–2021

Figure 29: Italian Homeland Security Budget (US$ billion), 2012–2016

Figure 30: Italian Homeland Security Budget (US$ billion), 2017–2021

Figure 31: Italian Homeland Security Budget (EUR billion), 2012–2016

Figure 32: Italian Homeland Security Budget (EUR billion), 2017–2021

Figure 33: SDI Terrorism Heat Map, 2016

Figure 34: SDI Terrorism Index, 2016

Figure 35: Benchmarking with Key Markets – 2012–2016 vs. 2017–2021

Figure 36: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2016 and 2021

Figure 37: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2016

Figure 38: Frigates Market (US$ Million), 2016–2026

Figure 39: Fighters & Multi-Role Aircraft (US$ Million), 2016–2026

Figure 40:Missile Defense System (US$ Million), 2016–2026

Figure 41: Transport and Utility Helicopters (US$ Million), 2016–2026

Figure 42: Amphibious Ships (US$ Million), 2016–2026

Figure 43: Italian Defense Import Trend, 2011–2015 (TIV values)

Figure 44: Italian Defense Imports by Country (%), 2011–2015

Figure 45: Italian Defense Imports by Category (%), 2011–2015

Figure 46: Italian Defense Export Trend, 2011–2015 (TIV values)

Figure 47: Italian Defense Exports by Country (%), 2011–2015

Figure 48: Italian Defense Exports by Category (%), 2011–2015

Figure 49: Industry Dynamics – Porter’s Five Forces Analysis

Figure 50: Finmeccanica- Revenue Trend Analysis (EUR Billion), 2011–2015

Figure 51: Finmeccanica- Net Profit Trend Analysis (EUR Million), 2011–2015

Figure 52: Finmeccanica- Operating Profit Trend Analysis (EUR Million), 2011–2015

Figure 53: Fincantieri – Revenue Trend Analysis (EUR Billion), 2010–2014

Figure 54: Fincantieri – Operating Profit Trend Analysis (EUR Million), 2010–2014

Figure 55: Fincantieri – Net Profit Trend Analysis (EUR Million), 2010–2014

Figure 56: Italy GDP per Capita, 2015–2025

Figure 57: Italy Gross Domestic Product (current US$ Bn), 2015–2025

Figure 58: Italy Exports of goods and services (LCU billion), 2005–2014

Figure 59: Italy Imports of goods and services (LCU Bn), 2005–2014

Figure 60: Italy Gross national disposable income (US$ Bn), 2005–2014

Figure 61: Italy LCU per US$, 2015–2024

Figure 62: Italy Market Capitalization of listed Companies (US$ Bn), 2005–2012

Figure 63: Italy Market Capitalization of Listed Companies as a % of GDP, 2005–2012

Figure 64: Italy Government cash surplus/deficit (LCU Bn), 2005–2012

Figure 65: Italy Goods Exports as a % of GDP, 2005–2014

Figure 66: Italy Goods Imports as a % of GDP, 2005–2014

Figure 67: Italy Services Imports as a % of GDP, 2005–2014

Figure 68: Italy Services Exports as a % of GDP, 2005–2014

Figure 69: Italy Net Foreign Direct Investment (current US$ bn), 2005–2014

Figure 70: Italy Net FDI as a % of GDP, 2005–2014

Figure 71: Italy Mining, Manufacturing, Utilities Output(US$ Bn), 2005–2014

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