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Future of the German Defense Industry –

Market Attractiveness, Competitive

Landscape and Forecasts to 2020

Future of the German Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020

2

Summary

“Future of the German Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to

2020” report offers the reader detailed analysis of the defense budget over the next five years. Alongside it

offers insights into the market opportunities and entry strategies adopted by foreign OEMs (original

equipment manufacturers) to gain a market share in the German defense industry.

The report provides detailed analysis of the current industry size and growth expectations during 2016-2020,

including highlights of the key growth stimulators. It also benchmarks the industry against key global markets

and provides detailed understanding of emerging opportunities in specific areas.

Key Findings

Germany, a major economic power in Europe, has outlined plans to increase its defense spending over the

forecast period, in an attempt to strengthen the combat readiness of the country’s armed forces. Over the

years, the German Ministry of Defence (MoD) has faced acquisitions of operating a less efficient military

base with an arsenal of outdated equipment. Over the forecast period, German defense expenditure is

projected to increase at a CAGR of XX%, as compared to a negative CAGR of XX% over 2011-2015. On a

cumulative basis, the country expended US$XX billion for defense purpose between 2011 and 2015, which

is expected to increase slightly, to US$XX billion over the forecast period. A large portion of the budget will

be directed towards the procurement of up-to-date weaponry and advanced training sessions for troops.

Key Features and Benefits

The report provides detailed analysis of the German defense industry during 2011–2020, including the

factors that influence the military expenditure. It provides detailed expectations of growth rates and projected

total expenditure.

It provides the manufacturers with insights on market opportunities along with industry structure and

dynamics prevalent in the country. In addition, the report focuses on the regulations governing the German

defense industry and the potential market entry strategies with an expert analysis of the competitive

structure.


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1. Market Attractiveness and Emerging Opportunities

1.1. Defense Market Size Historical and Forecast

1.1.1. Germany’s defense expenditure expected to increase at a CAGR of XX% over 2016-2020

Germany’s defense budget, valued at US$XX billion in 2015, is one of the top military expenditures in

Europe. The country’s defense spending registered a negative CAGR of XX% between 2011 and 2015. The

budget is expected to increase to US$XX billion by 2020, from US$XX billion in 2016, at a CAGR of XX%.

This increase is attributed to Germany’s long-term plans to reform the existing military, both in terms of troops

and arsenal. On a cumulative basis, the defense expenditure is expected to be US$XX billion, in comparison

to the US$XX billion spent during 2011-2015.

The following table and figure show the German defense expenditure during the historic period:

Table 1: German Defense Expenditure (US$ billion), 2011-2015

Year Defense expenditure (US$ bn)

Defense growth percentage

2011

2012

2013

2014

2015

CAGR 2011-2015

Ministry of Finance, Germany and SDI analysis © SDI

Figure 1: German Defense Expenditure (US$ billion), 2011-2015


-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

39

40

41

42

43

44

45

2011 2012 2013 2014 2015

Defe

nse e

xp

en

dit

ure

gro

wth

rate

(%

)

Defe

nse b

ud

get

(US

$ B

illi

on

)

Defense Expenditure (US$ bn) Defense Growth Percentage


4

The following table and figure show projected defense expenditure of Germany over the forecast period:

Table 2: German Defense Expenditure (US$ billion), 2016-2020

Year Defense expenditure (US$ bn)

Defense growth percentage

2016

2017

2018

2019

2020

CAGR 2016-2020


Figure 2: German Defense Expenditure (US$ billion), 2016-2020


0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

43.0

43.5

44.0

44.5

45.0

45.5

46.0

46.5

2016 2017 2018 2019 2020

Defe

nse e

xp

en

dit

ure

gro

wth

rate

(%

)

Defe

nse b

ud

get

(US

$ B

illi

on

)

Defence Expenditure (US$ bn) Defense expenditure growth %


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1.2. Analysis of Defense Budget Allocation

1.2.1. Germany to allocate a higher share toward revenue expenditure over the forecast period

The share of capital expenditure from Germany’s total defense budget decreased from XX% in 2011, to XX%

in 2015. The average share of capital expenditure is expected to be XX% over the forecast period, against an

average share of XX% during 2011-2015. An increase in military personnel pay has resulted in a higher

share of defense budget allocation towards revenue expenditure. Allocation toward revenue expenditure has

steadily increased in the last four years and the trend is expected to continue in the coming years. The

average share of revenue expenditure is expected to be XX% over the forecast period, higher than the

average share of XX% during 2011-2015.

The following table and chart display Germany’s defense budget share of capital and revenue during the

historic period:

Table 3: Germany’s Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015

Year Capital Expenditure Share Revenue Expenditure Share

2011

2012

2013

2014

2015

Source: Ministry of Finance, Germany and SDI analysis © SDI

Figure 3: Germany’s Defense Budget Split Between Capital and Revenue Expenditure (%), 2011-2015

Source: Ministry of Defense and SDI analysis © SDI

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013 2014 2015

Defe

nse B

ud

get

Sp

lit

(%)

Capital Expenditure Revenue Expenditure


6

The following table and chart display Germany’s defense budget share of capital and revenue expenditure

over the forecast period:

Table 4: Germany’s Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020

Year Capital Expenditure Share Revenue Expenditure Share

2016

2017

2018

2019

2020


Figure 4: Germany’s Defense Budget Split Between Capital, Revenue and Other Expenditure (%), 2016-2020

Source: Ministry of Defense and SDI analysis © SDI

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2016 2017 2018 2019 2020

Defe

nse B

ud

get

Sp

lit

(%)

Capital Expenditure Revenue Expenditure


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1.3. Homeland Security Market Size and Forecast

1.3.1. German homeland security budget to increase at a CAGR of XX%

The country’s homeland security budget increased from US$XX billion in 2011 to US$XX billion in 2015,

registering a CAGR of XX%. Over the forecast period, the country’s budget for homeland security is expected

to increase at a CAGR of XX%. In December 2013, the German police force placed an order for six

Eurocopter EC145 T2 helicopters, scheduled to be delivered in 2015-2016. These aircraft are designed with

an advanced mission management system and will be utilized for observation and surveillance purposes,

supported by forward-looking infrared (FLIR) and daylight cameras.

The table and chart below show Germany’s homeland security expenditure during the historic period:

Table 5: German Homeland Security Expenditure (US$ Million), 2011-2015

Year Homeland expenditure (US$ mn)

Growth Rate (%)

2011

2012

2013

2014

2015


Figure 5: German Homeland Security Expenditure (US$ Million), 2011-2015


-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

6.4

6.6

6.8

7.0

7.2

7.4

7.6

7.8

8.0

8.2

8.4

2011 2012 2013 2014 2015

Gro

wth

rat

e (%

)

Ho

mel

and

Sec

uri

ty E

xpen

dit

ure

(U

S$

Bn

)

Homeland Security Expenditure (US$ Bn) Growth Rate (%)


8

2. Industry Dynamics - Porter’s Five Forces Analysis

Figure 4: Industry Dynamics – Porter’s Five Forces Analysis

Source: SDI analysis © SDI

Intensity of Rivalry Bargaining Power of Supplier

Bargaining Power of Buyer

Barrier to Entry

Threat of Substitute


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Report Methodology

SDI’s dedicated research and analysis teams consist of experienced professionals with a background in

industry research and consulting in the defense sector. The following research methodology is followed for all

databases and reports:

Secondary Research

The research process begins with exhaustive secondary research to source reliable qualitative and

quantitative information related to the defense market. The secondary research sources that are typically

referred to include, but are not limited to:

Industry associations

National government documents and statistical databases

Company websites, annual reports, financial reports, broker reports, investor presentations

Industry trade journals and other literature

Internal and external proprietary databases

News articles, press releases, and webcasts specific to the companies operating in the market

Primary Research

SDI conducts hundreds of primary interviews a year with industry participants and commentators in order to

validate its data and analysis. A typical research interview fulfills the following functions:

Provides first-hand information on market size, market trends, growth trends, competitive landscape,

and future outlook

Helps to validate and strengthen secondary research findings

Further develops the analysis team’s expertise and market understanding

Primary research involves e-mail interactions, telephone interviews, and face-to-face interviews for

each market category, division, and sub-division across geographies

The participants who typically take part in such a process include, but are not limited to:

Industry participants: CEOs, VPs, business development managers, market intelligence managers,

and national sales managers

External experts: investment bankers, valuation experts, research analysts, and key opinion leaders

specializing in defense markets

Conventions

Currency conversions are performed on the basis of average annual conversion rate format

calculations

All the values in tables, with the exception of compounded annual growth rate (CAGR) and

compounded annual rate of change (CARC), are displayed to one decimal place; therefore, due to

this rounding method, growth rates may appear inconsistent with absolute values

The forecasted values are projected on the basis of nominal values; the inflation was not taken into account


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TABLE OF CONTENTS

1. Introduction ......................................................................................................................... 10

1.1. What is this Report About? ..........................................................................................................10

1.2. Definitions .....................................................................................................................................10

1.3. Summary Methodology .................................................................................................................12

1.4. SDI Terrorism Index ......................................................................................................................13

1.5. About Strategic Defence Intelligence ..........................................................................................13

2. Executive Summary ............................................................................................................ 14

3. Market Attractiveness and Emerging Opportunities ........................................................ 16

3.1. Defense Market Size Historical and Forecast..............................................................................17

3.1.1. Germany’s defense expenditure expected to increase at a CAGR of XX% over 2016-2020 .................. 17

3.1.2. Maintenance of the armed forces and peacekeeping operations to drive defense spending over the

forecast period ...................................................................................................................................................... 21

3.1.3. German defense expenditure as a percentage of GDP expected to decrease........................................ 22

3.2. Analysis of Defense Budget Allocation .......................................................................................24

3.2.1. Germany to allocate a higher share toward revenue expenditure over the forecast period .................... 24

3.2.2. Capital expenditure to increase at a CAGR of XX% over the forecast period ......................................... 26

3.2.3. Revenue expenditure set to increase over the forecast period ................................................................ 30

3.2.4. Per capita defense expenditure expected to increase during the forecast period ................................... 34

3.3. Homeland Security Market Size and Forecast ............................................................................36

3.3.1. German homeland security budget to increase at a CAGR of XX% ........................................................ 36

3.3.2. Counter terrorism and cyber security to drive homeland security spending ............................................ 40

3.3.3. Germany falls under “some risk” of terrorism category ............................................................................ 41

3.4. Benchmarking with Key Global Markets .....................................................................................43

3.4.1. Germany defense budget expected to increase marginally over the forecast period .............................. 43

3.4.2. Germany’s defense expenditure is low compared to the largest defense spenders in the world ............ 45

3.4.3. Germany allocates lower share of GDP for defense compared to US and European countries ............. 46

3.4.4. Germany faces some threat from foreign terrorist organizations ............................................................. 47

3.5. Market Opportunities: Key Trends and Growth Stimulators ......................................................49

3.5.1. Transport Helicopter ................................................................................................................................. 49

3.5.2. Multi-role Aircraft ....................................................................................................................................... 50

3.5.3. Transport Aircraft ...................................................................................................................................... 51

3.5.4. Infantry Fighting Vehicles ......................................................................................................................... 52

4. Defense Procurement Market Dynamics ........................................................................... 53

4.1. Import Market Dynamics ...............................................................................................................54

4.1.1. Germany witnesses declining import trends due to a developing domestic industry ............................... 54


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4.1.2. Germany sourced majority of its arms imports from the US ..................................................................... 55

4.1.3. Air Defense Systems and Missiles dominate military hardware imports .................................................. 56

4.2. Export Market Dynamics ..............................................................................................................57

4.2.1. Arms exports to recover during the forecast period ................................................................................. 57

4.2.2. US and Greece are the biggest arms importers of Germany ................................................................... 58

4.2.3. Ships and armored vehicles are the main exported defense products .................................................... 59

5. Industry Dynamics .............................................................................................................. 60

5.1. Five Forces Analysis.....................................................................................................................60

5.1.1. Bargaining power of supplier: low ............................................................................................................. 61

5.1.2. Bargaining power of buyer: high ............................................................................................................... 61

5.1.3. Barrier to entry: low ................................................................................................................................... 61

5.1.4. Intensity of rivalry: low .............................................................................................................................. 61

5.1.5. Threat of substitution: low ......................................................................................................................... 61

6. Market Entry Strategy ......................................................................................................... 62

6.1. Market Regulation .........................................................................................................................62

6.1.1. Investment policy promotes 100% FDI in the defense industry ............................................................... 62

6.2. Market Entry Route .......................................................................................................................62

6.2.1. Foreign defense OEMs form large conglomerates to enter the market ................................................... 62

6.2.2. Foreign OEMs establish subsidiaries or form JVs to enter the industry ................................................... 62

6.3. Key Challenges .............................................................................................................................63

6.3.1. Modernization of military through downsizing existing systems and personnel ....................................... 63

6.3.2. German arms exports to large defense markets outside EU are minimal ................................................ 63

7. Competitive Landscape and Strategic Insights ................................................................ 64

7.1. Competitive Landscape Overview ...............................................................................................64

7.1.1. Foreign OEMs have strong collaborations with domestic defense firms .................................................. 64

7.2. Key Domestic Companies ............................................................................................................65

7.2.1. Heckler &Koch: overview .......................................................................................................................... 65

7.2.2. Heckler &Koch: products and services ..................................................................................................... 65

7.2.3. Heckler and Koch: recent announcements and strategic initiatives ......................................................... 66

7.2.4. Heckler and Koch: recent contract wins ................................................................................................... 66

7.2.5. MAN Truck & Bus AG: overview ............................................................................................................... 68

7.2.6. MAN Truck & Bus AG: products and services .......................................................................................... 68

7.2.7. MAN Truck & Bus AG: recent announcement and strategic initiatives .................................................... 68

7.2.8. MAN Truck & Bus AG: alliances ............................................................................................................... 69

7.2.9. MAN Truck & Bus AG: recent contract wins ............................................................................................. 69

7.2.10. Airbus Helicopters: overview .................................................................................................................... 70

7.2.11. Airbus Helicopters: products and services ............................................................................................... 70


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7.2.12. Airbus Helicopters: recent announcements and strategic initiatives ........................................................ 70

7.2.13. Airbus Helicopters: alliances .................................................................................................................... 71

7.2.14. Airbus Helicopters: recent contract wins .................................................................................................. 71

7.2.15. ESG Elektroniksystem-und Logistik: overview ......................................................................................... 73

7.2.16. ESG Elektroniksystem-und Logistik: products and services .................................................................... 73

7.2.17. ESG Elektroniksystem-und Logistik: recent announcements and strategic initiatives ............................. 74

7.2.18. ESG Elektroniksystem- und Logistik: alliances ........................................................................................ 74

7.2.19. ESG Elektroniksystem- und Logistik: recent contract wins ...................................................................... 75

7.2.20. Diehl Stiftung: overview ............................................................................................................................ 76

7.2.21. Diehl Stiftung: products and services ....................................................................................................... 76

7.2.22. Diehl Stiftung: recent announcements and strategic initiatives ................................................................ 76

7.2.23. Diehl Stiftung: alliances ............................................................................................................................ 77

7.2.24. Diehl Stiftung: recent contract wins .......................................................................................................... 78

7.2.25. ThyssenKrupp Marine Systems: overview ............................................................................................... 79

7.2.26. ThyssenKrupp Marine Systems: products and services .......................................................................... 79

7.2.27. ThyssenKrupp Marine Systems: recent announcements and strategic initiatives ................................... 79

7.2.28. ThyssenKrupp Marine Systems: alliances ................................................................................................ 80

7.2.29. ThyssenKrupp Marine Systems: recent contract wins ............................................................................. 80

7.2.30. Thales Deutschland: overview .................................................................................................................. 82

7.2.31. Thales Deutschland: products and services ............................................................................................. 82

7.2.32. Thales Deutschland: recent announcements and strategic initiatives ..................................................... 84

7.2.33. Thales Deutschland: alliances .................................................................................................................. 84

7.2.34. Thales Deutschland: recent contract wins ................................................................................................ 85

7.2.35. Airbus Group: overview ............................................................................................................................ 87

7.2.36. Airbus Group: products and services ....................................................................................................... 87

7.2.37. Airbus Group: recent announcement and strategic initiatives .................................................................. 87

7.2.38. Airbus Group: alliances............................................................................................................................. 88

7.2.39. Airbus Group: recent contract wins .......................................................................................................... 89

7.2.40. Airbus Group: financial analysis ............................................................................................................... 90

7.2.41. MBDA: overview ....................................................................................................................................... 92

7.2.42. MBDA: products and services .................................................................................................................. 92

7.2.43. MBDA: recent announcements and strategic initiatives ........................................................................... 93

7.2.44. MBDA: alliances ....................................................................................................................................... 94

7.2.45. MBDA: recent contract wins ..................................................................................................................... 95

7.2.46. Eurofighter Jagdflugzeug: overview ......................................................................................................... 96

7.2.47. Eurofighter Jagdflugzeug: products and services .................................................................................... 96

7.2.48. Eurofighter Jagdflugzeug: recent announcements and strategic initiatives ............................................. 96

7.2.49. Eurofighter Jagdflugzeug: recent contract wins ....................................................................................... 97


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7.2.50. Rheinmetall: overview ............................................................................................................................... 98

7.2.51. Rheinmetall: products and services .......................................................................................................... 98

7.2.52. Rheinmetall: recent announcement and strategic initiatives .................................................................. 102

7.2.53. Rheinmetall: alliances ............................................................................................................................. 103

7.2.54. Rheinmetall: recent contract wins ........................................................................................................... 103

7.2.55. Rheinmetall: financial analysis ............................................................................................................... 105

8. Business Environment and Country Risk ....................................................................... 107

8.1.1. Demographics & Social Statistics ........................................................................................................... 107

8.1.2. Population – Rural .................................................................................................................................. 107

8.1.3. Population - Urban .................................................................................................................................. 108

8.1.4. Population – Number of Households ...................................................................................................... 109

8.2. Economic Performance .............................................................................................................. 110

8.2.1. Gross Domestic per Capita..................................................................................................................... 110

8.2.2. Gross Domestic Product, current US$ ................................................................................................... 111

8.2.3. Exports of Goods and Services .............................................................................................................. 112

8.2.4. Imports of Goods and Services .............................................................................................................. 113

8.2.5. Gross National Disposable Income ........................................................................................................ 114

8.2.6. Manufacturing Output ............................................................................................................................. 115

8.2.7. Consumer Price Index ............................................................................................................................ 116

8.2.8. Wholesale Price Index ............................................................................................................................ 117

8.2.9. Local Currency Unit per US$ .................................................................................................................. 118

8.2.10. Market Capitalization of Listed Companies ............................................................................................ 119

8.2.11. Market Capitalization of Listed Companies as a percentage of GDP .................................................... 120

8.2.12. Total Government Cash Surplus/Deficit ................................................................................................. 121

8.2.13. Government Cash Surplus/Deficit .......................................................................................................... 122

8.2.14. Central Government Debt ....................................................................................................................... 123

8.2.15. Central Government Debt as a percentage of GDP ............................................................................... 124

8.2.16. Goods Exports as a percentage of GDP ................................................................................................ 125

8.2.17. Goods Imports as a percentage of GDP ................................................................................................ 126

8.2.18. Goods Trade Surplus/Deficit as a percentage of GDP ........................................................................... 127

8.2.19. Services Imports as a percentage of GDP ............................................................................................. 128

8.2.20. Services Exports as a percentage of GDP ............................................................................................. 129

8.2.21. Services trade surplus/deficit as a percentage of GDP .......................................................................... 130

8.2.22. International reserves, including Gold .................................................................................................... 131

8.3. Energy and Utilities ..................................................................................................................... 132

8.3.1. Total Conventional Thermal Electricity Net Generation ......................................................................... 132

8.3.2. Hydroelectricity Net Generation .............................................................................................................. 133

8.3.3. Nuclear Electricity Net Generation ......................................................................................................... 134


14

8.3.4. Total Conventional Thermal Electricity Installed Capacity ..................................................................... 135

8.3.5. Total Electricity Exports .......................................................................................................................... 136

8.3.6. Total Electricity Imports .......................................................................................................................... 137

8.3.7. Proved reserves of Natural Gas ............................................................................................................. 138

8.3.8. Total Petroleum Consumption ................................................................................................................ 139

8.3.9. Crude Oil Proved reserves ..................................................................................................................... 140

8.3.10. Total Non-Hydro Renewable Electricity Net Generation ........................................................................ 141

8.4. Infrastructure Quality and Availability ....................................................................................... 142

8.4.1. Roads, total network ............................................................................................................................... 142

8.4.2. Air transport, freight ................................................................................................................................ 143

8.4.3. Overall Construction ............................................................................................................................... 144

8.5. Minerals ....................................................................................................................................... 145

8.5.1. Mining, Manufacturing, Utilities Output ................................................................................................... 145

8.6. Technology .................................................................................................................................. 146

8.6.1. Research and development expenditure ................................................................................................ 146

8.6.2. Patents Granted ...................................................................................................................................... 147

8.7. Telecommunication .................................................................................................................... 148

8.7.1. Telephone lines ...................................................................................................................................... 148

8.7.2. Telephone lines Penetration Rate .......................................................................................................... 149

9. Appendix ............................................................................................................................ 150

9.1. About SDI ..................................................................................................................................... 150

9.2. Disclaimer .................................................................................................................................... 150


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LIST OF FIGURES

Figure 1: German Defense Expenditure (US$ Billion),2011–2015 ...................................................................................................................... 17 Figure 2: German Defense Expenditure (US$ Billion), 2016–2020 ..................................................................................................................... 18 Figure 3: German Defense Expenditure (EUR Billion), 2011–2015 ..................................................................................................................... 19 Figure 4: German Defense Expenditure (EUR Billion), 2016–2020 ..................................................................................................................... 20 Figure 5: German GDP Growth vs. Defense Expenditure Growth and Defense Expenditures as a Percentage of GDP Growth, 2011–2015 ..... 22 Figure 6: German GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP Growth, 2016–2020 ....... 23 Figure 7:German Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015 ................................................................ 24 Figure 8: German Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020 ............................................................... 25 Figure 9: German Defense Capital Expenditure (US$ billion), 2011–2015 .......................................................................................................... 26 Figure 10: German Defense Capital Expenditure (US$ billion), 2016–2020 ........................................................................................................ 27 Figure 11: German Capital Expenditure (EUR Billion), 2011–2015 ..................................................................................................................... 28 Figure 12: German Capital Expenditure (EUR Billion), 2016–2020 ..................................................................................................................... 29 Figure 13: German Revenue Budget Allocation (US$ billion), 2011–2015 .......................................................................................................... 30 Figure 14: German Revenue Budget Allocation (US$ billion), 2016–2020 .......................................................................................................... 31 Figure 15: German Revenue Expenditure (EUR Billion), 2011–2015 .................................................................................................................. 32 Figure 16: German Revenue Expenditure (EUR Billion), 2016–2020 .................................................................................................................. 33 Figure 17: German Per Capita Defense Expenditure (US$), 2011–2015 ............................................................................................................ 34 Figure 18:German Per Capita Defense Expenditure (US$), 2016–2020 ............................................................................................................. 35 Figure 19: German Homeland Security Budget (US$ Billion), 2011–2015 ........................................................................................................... 36 Figure 20: German Homeland Security Budget (US$ Billion), 2016–2020 ........................................................................................................... 37 Figure 21: German Homeland Security Budget (EUR Billion), 2011–2015 .......................................................................................................... 38 Figure 22: German Homeland Security Budget (EUR Billion), 2016–2020 .......................................................................................................... 39 Figure 23: SDI Terrorism Heat Map, 2015 .......................................................................................................................................................... 41 Figure 24: SDI Terrorism Index, 2015 ................................................................................................................................................................. 42 Figure 25: Benchmarking with Key Markets – 2011–2015 vs. 2016–2020 .......................................................................................................... 44 Figure 26: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2015 and 2020 ............................................................ 45 Figure 27: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2015 ..................................................................... 46 Figure 28: Transport Helicopter Market Size (US$ Million), 2015–2025 .............................................................................................................. 49 Figure 29: Multi-role Aircraft Market Size (US$ Million), 2015- 2025 ................................................................................................................... 50 Figure 30: Transport Aircraft Market Size (US$ Million), 2015- 2025 ................................................................................................................... 51 Figure 31: IFV Market Size (US$ Million), 2015- 2025 ........................................................................................................................................ 52 Figure 32: German Defense Import Trend, 2009–2013 (TIV values) ................................................................................................................... 54 Figure 33: German Defense Imports by Country (%), 2009–2013 ....................................................................................................................... 55 Figure 34: German Defense Imports by Category (%), 2009–2013 ..................................................................................................................... 56 Figure 35: German Defense Export Trend, 2009–2013 (TIV values) ................................................................................................................... 57 Figure 36: German Defense exports by Country (%), 2009 - 2013 ...................................................................................................................... 58 Figure 37: German Defense Imports by Category (%), 2009–2013 ..................................................................................................................... 59 Figure 38: Industry Dynamics Porter’s Five Forces Analysis ............................................................................................................................... 60 Figure 39: Airbus Group – Revenue Trend Analysis (EUR Billion), 2010–2014 ................................................................................................... 90 Figure 40: Airbus Group – Operating Profit Trend Analysis (EUR Million), 2010–2014 ....................................................................................... 91 Figure 41: Airbus Group – Net Profit Trend Analysis (EUR Million), 2010–2014 ................................................................................................. 91 Figure 42: Rheinmetall – Revenue Trend Analysis (EUR Billion), 2009–2013 ....................................................................................................105 Figure 43: Rheinmetall – Operating Profit Trend Analysis (EUR Million), 2009–2013 .........................................................................................106 Figure 44: Rheinmetall – Net Profit Trend Analysis (EUR Million), 2009–2013 ...................................................................................................106 Figure 45: Germany Population – Rural (In Millions), 2015–2024 ......................................................................................................................107 Figure 46: Germany Population – Urban (In Millions), 2015–2024 .....................................................................................................................108 Figure 47: Germany Population – Number of Households (In Millions), 2008–2017 ...........................................................................................109 Figure 48: Germany GDP per capita, 2015–2024 ..............................................................................................................................................110 Figure 49: Germany Gross Domestic Product (current US$ Billion),2015–2024 .................................................................................................111 Figure 50: Germany Exports of goods and services (current US$ Billion), 2004–2013 .......................................................................................112 Figure 51: Germany Imports of goods and services (current US$ Billion), 2003–2012 .......................................................................................113 Figure 52: Germany gross national disposable income (US$ Billion), 2003– 2012 .............................................................................................114 Figure 53: Germany Manufacturing Output (US$ Billion), 2003–2012 ................................................................................................................115 Figure 54: Germany Consumer Price Index, 2015–2024 ...................................................................................................................................116


16

Figure 55: Germany Wholesale Price Index, 2003–2012 ...................................................................................................................................117 Figure 56: Germany LCU per US$, 2015–2024 .................................................................................................................................................118 Figure 57: Germany Market Capitalization of listed Companies (US$ Billion), 2003–2012 .................................................................................119 Figure 58: Germany Market Capitalization of listed companies as a percentage of GDP, 2002–2012 ................................................................120 Figure 59: Germany Government cash surplus/deficit (LCU Billion), 2003–2012 ...............................................................................................121 Figure 60: Germany Government cash Surplus/deficit as a percentage of GDP,2003–2012 ..............................................................................122 Figure 61: Germany Central Government Debt (LCU Billion), 2002–2011 .........................................................................................................123 Figure 62: Germany Central Government Debt as a percentage of GDP, 2003–2012 .......................................................................................124 Figure 63: Germany Goods Exports as a percentage of GDP, 2005–2012 ........................................................................................................125 Figure 64: Germany Goods Imports as a percentage of GDP,2005–2012 .........................................................................................................126 Figure 65: Germany Goods Trade Surplus/Deficit as a percentage of GDP, 2005–2012 ...................................................................................127 Figure 66: Germany Services Imports as a percentage of GDP, 2005–2012 .....................................................................................................128 Figure 67: Germany Services Exports as a percentage of GDP, 2005–2012 .....................................................................................................129 Figure 68: Germany Services trade surplus/deficit as a percentage of GDP, 2005–2012 ...................................................................................130 Figure 69: Germany International reserves, including Gold (US$ Billion), 2002–2011 ........................................................................................131 Figure 70: Germany Total Conventional Thermal Electricity Net Generation (Billion KWH), 2002–2011 ............................................................132 Figure 71: Germany Hydroelectricity Net Generation (Billion KWH), 2003–2012 ...............................................................................................133 Figure 72: Germany Nuclear Electricity Net Generation (Billion KWH), 2003–2012 ...........................................................................................134 Figure 73: Germany Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts), 2001–2010 ..................................................135 Figure 74: Germany Total Electricity Exports (Billion KWH), 2003–2012............................................................................................................136 Figure 75: Germany Total Electricity Imports (Billion KWH), 2003–2012 ............................................................................................................137 Figure 76: Germany Proved reserves of Natural Gas (Trillion Cubic feet), 2004–2014 ......................................................................................138 Figure 77: Germany Total Petroleum Consumption (Thousand Barrels per Day), 2004–2013 ...........................................................................139 Figure 78: Germany Crude Oil Proved reserves(Billion Barrels), 2005–2014 .....................................................................................................140 Figure 79: Germany Total Non-Hydro Renewable Electricity Net Generation (Billion Kw), 2003–2012 ..............................................................141 Figure 80: Germany Roads (total route-Km), 2002–2010...................................................................................................................................142 Figure 81: Germany Air transport, freight (Million ton-Km), 2003–2012 ..............................................................................................................143 Figure 82: Germany Overall Construction (US$ Billion), 2006–2014 ..................................................................................................................144 Figure 83: Germany Mining, Manufacturing, Utilities Output(US$ Billion), 2003–2012 .......................................................................................145 Figure 84: Germany Research and Development (thousands LCU), 2001–2010 ...............................................................................................146 Figure 85: Germany Patents Granted, 2004–2013 ............................................................................................................................................147 Figure 86: Telephone lines (In Mn), 2003–2012 .................................................................................................................................................148 Figure 87: Germany Telephone lines Penetration Rate (per 100 people), 2003–2012 .......................................................................................149


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LIST OF TABLES

Table 1: German Defense Expenditure (US$ Billion), 2011–2015 ....................................................................................................................... 17 Table 2: German Defense Expenditure (US$ Billion), 2016–2020 ....................................................................................................................... 18 Table 3: German Defense Expenditure (EUR Billion), 2011–2015 ...................................................................................................................... 19 Table 4: German Defense Expenditure (EUR Billion), 2016–2020 ...................................................................................................................... 20 Table 5: German GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP Growth, 2011-2015 ......... 22 Table 6: German GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP Growth, 2016–2020 ......... 23 Table 7: German Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015 ................................................................ 24 Table 8: German Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020 ................................................................ 25 Table 9: German Defense Capital Expenditure (US$ billion), 2011–2015 ........................................................................................................... 26 Table 10: German Defense Capital Expenditure (US$ billion), 2016–2020 ......................................................................................................... 27 Table 11: German Capital Expenditure (EUR Billion), 2011–2015 ...................................................................................................................... 28 Table 12: German Capital Expenditure (EUR Billion), 2016–2020 ...................................................................................................................... 29 Table 13: German Revenue Budget Allocation (US$ billion), 2011–2015 ............................................................................................................ 30 Table 14: German Revenue Budget Allocation (US$ billion), 2016–2020 ............................................................................................................ 31 Table 15: German Revenue Expenditure (EUR Billion), 2011–2015 ................................................................................................................... 32 Table 16: German Revenue Expenditure (EUR Billion), 2016–2020 ................................................................................................................... 33 Table 17: German Per Capita Defense Expenditure (US$), 2011–2015.............................................................................................................. 34 Table 18: German Per Capita Defense Expenditure (US$), 2016–2020.............................................................................................................. 35 Table 19: German Homeland Security Budget (US$ Billion), 2011–2015 ............................................................................................................ 36 Table 20: German Homeland Security Budget (US$ Billion), 2016–2020 ............................................................................................................ 37 Table 21: German Homeland Security Budget (EUR Billion), 2011–2015 ........................................................................................................... 38 Table 22: German Homeland Security Budget (EUR Billion), 2016–2020 ........................................................................................................... 39 Table 23: Benchmarking with Key Markets – 2011–2015vs. 2016–2020............................................................................................................. 43 Table 24: SDI Terrorism Index ............................................................................................................................................................................ 47 Table 25: Key Foreign Players and Operations in the German Defense Industry ................................................................................................ 64 Table 26:Heckler &Koch – Product focus............................................................................................................................................................ 65 Table 27:Heckler and Koch – Recent Contract Wins .......................................................................................................................................... 66 Table 28: MAN Truck & Bus AG – Product focus ................................................................................................................................................ 68 Table 29: MAN Truck & Bus AG – Alliances ....................................................................................................................................................... 69 Table 30: MAN Truck & Bus AG – Alliances ....................................................................................................................................................... 69 Table 31: Airbus Helicopters– Product focus ...................................................................................................................................................... 70 Table 32:Airbus Helicopters – Alliances .............................................................................................................................................................. 71 Table 33: Airbus Helicopters – Recent Contract Wins ......................................................................................................................................... 71 Table 34:ESG Elektroniksystem-und Logistik– Product focus ............................................................................................................................. 73 Table 35:ESG Elektroniksystem-und Logistik– Alliances .................................................................................................................................... 74 Table 36:ESG Elektroniksystem-und Logistik– Recent Contract Wins ................................................................................................................ 75 Table 37:Diehl Stiftung – Product focus .............................................................................................................................................................. 76 Table 38:Diehl Stiftung– Alliances ...................................................................................................................................................................... 77 Table 39:Diehl Stiftung– Recent Contract Wins .................................................................................................................................................. 78 Table 40:ThyssenKrupp Marine Systems – Product focus .................................................................................................................................. 79 Table 41:ThyssenKrupp Marine Systems – Alliances ......................................................................................................................................... 80 Table 42:ThyssenKrupp Marine Systems – Recent Contract Wins ..................................................................................................................... 80 Table 43:Thales Deutschland – Product focus .................................................................................................................................................... 82 Table 44:Thales Deutschland – Alliances ........................................................................................................................................................... 84 Table 45:Thales Deutschland – Recent Contract Wins ....................................................................................................................................... 85 Table 46:Airbus Group– Product focus ............................................................................................................................................................... 87 Table 47: Airbus Group– Alliances ..................................................................................................................................................................... 88 Table 48:Airbus Group– Recent Contract Wins .................................................................................................................................................. 89 Table 49:MBDA – Product focus ......................................................................................................................................................................... 92 Table 50:MBDA – Alliances ................................................................................................................................................................................ 94 Table 51:MBDA – Recent Contract Wins ............................................................................................................................................................ 95 Table 52:Eurofighter Jagdflugzeug– Product focus ............................................................................................................................................. 96 Table 53:Eurofighter Jagdflugzeug– Recent Contract Wins ................................................................................................................................ 97 Table 54:Rheinmetall – Product focus ................................................................................................................................................................ 98


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Table 55:Rheinmetall – Alliances .......................................................................................................................................................................103 Table 56:Rheinmetall – Recent Contract Wins ...................................................................................................................................................103

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