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

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 Defence 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 valued US$18.4 billion in 2015
3.1.2. Modernization of defense systems, participation in peacekeeping initiatives, and maintaining NATO, EU, and UN stipulations expected to drive Italian defense expenditure
3.1.3. Defense expenditure as a percentage of GDP is expected to average 0.8% during the forecast period
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 1.14% during the forecast period
3.2.3. Common services leads the defense function budget allocation list, with 37.9% share during 2011 to 2015
3.2.4. Army expenditure expected to reach US$6.2 billion by 2020
3.2.5. Air force expenditure expected to remain the same during forecast period
3.2.6. Cumulative navy expenditure expected to be US13.2 billion cumulatively during the forecast period
3.2.7. Common services expenditure is expected to beUS$32 billion cumulatively over the forecast period
3.3. Homeland Security Market Size and Forecast
3.3.1. Homeland security expenditure expected to decline from US$7.7 billion to US$7.2 billion during the forecast period
3.3.2. Homeland security expenditure in Italy is mainly driven by activities such as terrorism in the country, mafia wars, and rising anarchist groups
3.3.3. SDI Terrorism Index rates Italy as a “some risk” region
3.3.4. Italy has a score of 0.1 on the SDI Research Intelligence Terrorism Index
3.4. Benchmarking with Key Global Markets
3.4.1. Italian defense expenditure expected to increase marginally over the forecast period
3.4.2. Italy has the twelfth largest defense budget in the world
3.4.3. Italy expected to spend an average of 0.8% of its GDP on defense over the forecast period
3.4.4. Italy faces “some 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. C4ISR Airborne
3.5.4. Transport and Utility Helicopter
3.5.5. Counter Terrorism
4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Arms imports expected to revive during the forecast period
4.1.2. European countries such as Germany and the UK have entered in import market in competition with the US
4.1.3. Aircraft, sensors, and missiles were the key defense imports during 2009-2013
4.2. Export Market Dynamics
4.2.1. Development of domestic defense capability is expected to fuel exports in Italy’s emerging military industry
4.2.2. Asia to account for a major portion of Italian defense exports
4.2.3. Aircraft was the main exported defense product during 2009-2013
5 Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: medium
5.1.2. Bargaining power of buyer: medium
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 and services
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 and services
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 and services
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 and services
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. Demographics & Social Statistics
8.1.1. Population – Rural
8.1.2. Population - Urban
8.1.3. Population – Number of Households
8.2. Economic Performance
8.2.1. Gross Domestic per Capita
8.2.2. Gross Domestic Product, current US$
8.2.3. Exports of Goods and Services
8.2.4. Imports of Goods and Services
8.2.5. Gross National Disposable Income
8.2.6. Manufacturing Output
8.2.7. Consumer Price Index
8.2.8. Wholesale Price Index
8.2.9. Local Currency Unit per USD
8.2.10. Market Capitalization of Listed Companies
8.2.11. Market Capitalization of Listed Companies (% of GDP)
8.2.12. Total Government Cash Surplus/Deficit (LCU bn)
8.2.13. Goods Exports as a % of GDP
8.2.14. Goods Imports as a % of GDP
8.2.15. Goods balance as a % of GDP
8.2.16. Services Imports as a % of GDP
8.2.17. Services Exports as a % of GDP
8.2.18. Services balance (% of GDP)
8.2.19. Net Foreign Direct Investment (BoP, current US$ bn)
8.2.20. Net FDI as a % of GDP
8.2.21. International reserves, including Gold (US$ bn)
8.3. Energy and Utilities
8.3.1. Total Conventional Thermal Electricity Net Generation (Bn kWh)
8.3.2. Hydroelectricity Net Generation (Billion kWh)
8.3.3. Nuclear Electricity Net Generation(Billion kWh)
8.3.4. Total Conventional Thermal Electricity Installed Capacity(Million kW)
8.3.5. Proved reserves of Natural Gas(Trillion Cubic Feet)
8.3.6. Total Petroleum Consumption (Thousand Barrels Per Day)
8.4. Infrastructure Quality and Availability
8.4.1. Rail lines (total route km)
8.4.2. Air transport, freight (Million ton-km)
8.4.3. Overall Construction (US$ million)
8.5. Minerals
8.5.1. Mining, Manufacturing, Utilities Output (US$ billion)
8.6. Technology
8.6.1. Research and development expenditure (thousands LCU)
8.6.2. Patents Granted
8.7. Telecommunication
8.7.1. Telephone lines (in mn)
8.7.2. Telephone lines Penetration Rate (per 100 people)
9 Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: Italian Defense Expenditure (US$ Billion), 2011–2015
Table 2: Italian Defense Expenditure (US$ Billion), 2016–2020
Table 3: Italian Defense Expenditure (EUR Billion), 2011–2015
Table 4: Italian Defense Expenditure (EUR Billion), 2016–2020
Table 5: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2011–2015
Table 6: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2016–2020
Table 7: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP (in EUR), 2011–2015
Table 8: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP (in EU), 2016–2020
Table 9: Italian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015
Table 10: Italian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020
Table 11: Italian Capital Expenditure (US$ billion), 2011–2015
Table 12: Italian Capital Expenditure (US$ billion), 2016–2020
Table 13: Italian Capital Expenditure (EUR billion), 2011–2015
Table 14: Italian Capital Expenditure (EUR billion), 2016–2020
Table 15: Italian Defense Expenditure Split (%), 2011–2015
Table 16: Italian Defense Expenditure Split (%), 2016–2020
Table 17: Italian Army Expenditure (US$ Billion), 2011–2015
Table 18: Italian Army Expenditure (US$ Billion), 2016–2020
Table 19: Italian Army Expenditure (EUR Billion), 2011–2015
Table 20: Italian Army Expenditure (EUR Billion), 2016–2020
Table 21: Italian Air Force Expenditure (US$ Billion), 2011–2015
Table 22: Italian Air Force Expenditure (US$ Billion), 2016–2020
Table 23: Italian Air Force Expenditure (EUR Billion), 2011–2015
Table 24: Italian Air Force Expenditure (EUR Billion), 2016–2020
Table 25: Italian Navy Expenditure (US$ Billion), 2011–2015
Table 26: Italian Navy Expenditure (US$ Billion), 2016–2020
Table 27: Italian Navy Expenditure (EUR Billion), 2011–2015
Table 28: Italian Navy Expenditure (EUR Billion), 2016–2020
Table 29: Italian Common Services Expenditure (US$ Billion), 2011–2015
Table 30: Italian Common Services Expenditure (US$ Billion), 2016–2020
Table 31: Italian Homeland Security Budget (US$ billion), 2011–2015
Table 32: Italian Homeland Security Budget (US$ billion), 2016–2020
Table 33: Italian Homeland Security Budget (EUR billion), 2011–2015
Table 34: Italian Homeland Security Budget (EUR billion), 2016–2020
Table 35: Benchmarking with Key Markets – 2011–2015 vs. 2016–2020
Table36: SDI Terrorism Index
Table 37: Offset Regulations in Italy
Table 38: Italian Joint Development Programs for Missile Defense Systems
Table 39: Finmeccanica – Product Focus
Table 40: Finmeccanica - Alliances
Table 41: Finmeccanica- Recent Contract Wins
Table 42: Selex ES– Product Focus
Table 43: Selex ES - Alliances
Table 44: Selex ES - Recent Contract Wins
Table 45: Oto Melara – Product Focus
Table 46: Oto Melara - Alliances
Table 47: Oto Melara - Recent Contract Wins
Table 48: Fincantieri – Product Focus
Table 49: Fincantieri - Alliances
Table 50: Fincantieri – Recent Contract Wins
Table 51: MBDA – Product Focus
Table 52: MBDA - Alliances
Table 53: MBDA - Recent Contract Wins
Table 54: WASS – Product Focus
Table 55: WASS - Alliances
Table 56: WASS - Recent Contract Wins
Table 57: Elettronica – Product Focus
Table 58: Elettronica - Alliances
Table 59: Elettronica - Recent Contract Wins
List of Figures
Figure 1: Italian Defense Expenditure (US$ Billion), 2011–2015
Figure 2: Italian Defense Expenditure (US$ Billion), 2016–2020
Figure 3: Italian Defense Expenditure (EUR Billion), 2011–2015
Figure 4: Italian Defense Expenditure (EUR Billion), 2016–2020
Figure 5: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2011–2015
Figure 6: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2016–2020
Figure 7: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP (in EUR), 2011–2015
Figure 8: Italian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP (in EU), 2016–2020
Figure 9:Italian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015
Figure 10: Italian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020
Figure 11: Italian Capital Expenditure (US$ billion), 2011–2015
Figure 12:Italian Capital Expenditure (US$ billion), 2016–2020
Figure 13: Italian Capital Expenditure (EUR billion), 2011–2015
Figure 14: Italian Capital Expenditure (EUR billion), 2016–2020
Figure 15: Italian Defense Expenditure Allocation (US$ billion), 2011–2015
Figure 16: Italian Defense Expenditure Allocation (US$ billion), 2016–2020
Figure 17: Italian Army Expenditure (US$ Billion), 2011–2015
Figure 18: Italian Army Expenditure (US$ Billion), 2016–2020
Figure 19: Italian Army Expenditure (EUR Billion), 2011–2015
Figure 20: Italian Army Expenditure (EUR Billion), 2016–2020
Figure 21: Italian Air force Expenditure (US$ Billion), 2011–2015
Figure 22: Italian Air Force Expenditure (US$ Billion), 2016–2020
Figure 23: Italian Air force Expenditure (EUR Billion), 2011–2015
Figure 24: Italian Air Force Expenditure (EUR Billion), 2016–2020
Figure 25: Italian Navy Expenditure (US$ Billion), 2011–2015
Figure 26: Italian Navy Expenditure (US$ Billion), 2016–2020
Figure 27: Italian Navy Expenditure (EUR Billion), 2011–2015
Figure 28: Italian Navy Expenditure (EUR Billion), 2016–2020
Figure 29: Italian Common Services Expenditure (US$ Billion), 2011–2015
Figure 30: Italian Common Services Expenditure (US$ Billion), 2016–2020
Figure 31: Italian Homeland Security Budget (US$ billion), 2011–2015
Figure 32: Italian Homeland Security Budget (US$ billion), 2016–2020
Figure 33: Italian Homeland Security Budget (EUR billion), 2011–2015
Figure 34: Italian Homeland Security Budget (EUR billion), 2016–2020
Figure 35: SDI Terrorism Heat Map, 2015
Figure 36: SDI Terrorism Index, 2015
Figure 37: Benchmarking with Key Markets – 2011–2015 vs. 2016–2020
Figure 38: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2015 and 2020
Figure 39: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2015
Figure 40: Frigates Market (US$ Million), 2015–2025
Figure 41: Fighters & Multi-Role Aircraft (US$ Million), 2015–2025
Figure 42:C4ISR Airborne (US$ Million), 2015–2025
Figure 43: Transport and Utility Aircraft (US$ Million), 2015–2025
Figure 44: Counter Terrorism (US$ Million), 2015–2025
Figure 45: Italian Defense Import Trend, 2009–2013 (TIV values)
Figure 46: Italian Defense Imports by Country (%), 2009–2013
Figure 47: Italian Defense Imports by Category (%), 2009–2013
Figure 48: Italian Defense Exports By Value (US$ million), 2009–2013
Figure 49: Italian Defense Exports by Country (%), 2009–2013
Figure 50: Italian Defense Exports by Category (%), 2009–2013
Figure 51: Industry Dynamics – Porter’s Five Forces Analysis
Figure 52: Finmeccanica- Revenue Trend Analysis (EUR Million), 2009–2013
Figure 53: Finmeccanica- Net Profit Trend Analysis (EUR Million), 2009–2013
Figure 54: Finmeccanica- Operating Profit Trend Analysis (EUR Million), 2009–2013
Figure 55: Fincantieri - Revenue Trend Analysis (Euro Million), 2008–2012
Figure 56: Fincantieri - Operating Profit Trend Analysis (Euro Million), 2008–2012
Figure 57: Fincantieri - Net Profit Trend Analysis (Euro Million), 2008–2012
Figure 58: Italy Population – Rural (In Millions), 2016–2025
Figure 59: Italy Population – Urban (In Millions), 2016–2025
Figure 60: Italy Population – Number of Households (In Millions), 2008–2017
Figure 61: Italy GDP per capita, 2011–2020
Figure 62: Italy Gross Domestic Product (current US$ Bn), 2011–2020
Figure 63: Italy Exports of goods and services (current US$ Bn), 2003–2012
Figure 64: Italy Imports of goods and services (current US$ Bn), 2003–2012
Figure 65: Italy Gross national disposable income (US$ Bn), 2003–2012
Figure 66: Italy Manufacturing Output (US$ Bn), 2003–2012
Figure 67: Italy Consumer Price Index, 2009–2018
Figure 68: Italy Wholesale Price Index, 2003–2012
Figure 69: Italy LCU per US$, 2009–2018
Figure 70: Italy Market Capitalization of listed Companies (US$ Bn), 2003–2012
Figure 71: Italy Market Capitalization of listed companies as a % of GDP, 2002–2011
Figure 72: Italy Government cash surplus/deficit (LCU Bn), 2001–2010
Figure 73: Italy Goods Exports as a % of GDP, 2004–2013
Figure 74: Italy Goods Imports as a % of GDP, 2004–2013
Figure 75: Italy Goods balance as a % of GDP, 2004–2013
Figure 76: Italy Services Imports as a % of GDP, 2004–2013
Figure 77: Italy Services Exports as a % of GDP, 2004–2013
Figure 78: Italy Services balance as a % of GDP, 2004–2013
Figure 79: Italy Net Foreign Direct Investment (current US$ bn), 2004–2013
Figure 80: Italy Net FDI as a % of GDP, 2004–2013
Figure 81: Italy International reserves, including Gold (US$ Bn), 2004–2013
Figure 82: Italy Total Conventional Thermal Electricity Net Generation (Billion Kilowatt Hours), 2003–2012
Figure 83: Italy Hydroelectricity Net Generation (~Billion Kilowatt Hours), 2003–2012
Figure 84: Italy Nuclear Electricity Net Generation (Billion Kilowatt Hours), 2003–2012
Figure 85: Italy Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts), 2003–2012
Figure 86: Italy Proved reserves of Natural Gas (Trillion Cubic feet), 2004–2013
Figure 87: Italy Total Petroleum Consumption (Thousand Barrels per Day), 2004–2013
Figure 88: Italy Rail lines (Total route Km), 2003–2012
Figure 89: Italy Air transport, freight (Million ton-Km), 2003–2012
Figure 90: Italy Overall Construction (US$ Bn), 2008–2017
Figure 91: Italy Mining, Manufacturing, Utilities Output(US$ Bn), 2004–2013
Figure 92: Italy Research and Development (thousands LCU), 2002–2011
Figure 93: Italy Patents Granted, 2004–2013
Figure 94: Italy Telephone lines (in mn), 2003–2012
Figure 95: Italy Telephone lines Penetration Rate (per 100 people), 2003–2012

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

Summary

The Future of the Italy Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020, published by Strategic Defense Intelligence, provides readers with a detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

Key Findings

Over the historic period, Italian defense expenditure registered a decline at a CAGR of 2.05%, decreasing from US$20.0 billion in 2011 to US$18.4 billion in 2015

Italy’s military expenditure, valued at US$18.4 billion in 2016, is expected to increase to US$18.9 billion by 2020, registering a CAGR of 0.70% over the forecast period

Italy’s military expenditure will be driven by the military modernization initiatives, procurement of better defense systems and participation in peace keeping and conflict resolution operations

The Defense Ministry is expected to procure Fighters and multi-role aircraft, frigates, transport and utility aircraft, C4ISR airborne and counter terrorism

Synopsis

This report offers detailed analysis of Italy’s defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participantsIn particular, it provides an in-depth analysis of the following:

Italy defense industry market size and drivers: detailed analysis of the Italy defense industry during 2016–2020, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns

Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to the army, navy, and air force. It also details the key challenges faced by defense market participants within the country

Porter’s Five Force analysis of the Italy defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitutions, intensity of rivalry, and barriers to entry

Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years

Market opportunities: details of the top five defense investment opportunities over the coming 10 years

Competitive landscape and strategic insights: analysis of the competitive landscape of the Italy defense industry.

It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Reasons To Buy

This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Italy defense industry market trends for the coming five years

The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period

Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector

A deep qualitative analysis of the Italy defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts


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