Europe’s defense boom in charts, as companies take stock of Iran war
Workers assemble a Leonardo AW139 helicopter at the production site of the Leonardo factory in Varese, Italy, on Thursday, March 20, 2025.
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Italian defense company Leonardo European defense companies are “positioned on a strong growth path” on Thursday as they stand to gain business from the war in Iran, boosted by the war in Ukraine, he said on Thursday.
Leonardo announces plans to double profits by 2030, day after German peer arms maker Rheinmetall He predicts sales could rise as much as 45% this year as both companies have record backlogs of orders.
Leonardo CEO Roberto Cingolani told investors that warfare is “getting faster and more dangerous” and warned of the rise of hybrid threats that “increase uncertainty and operational complexity.”
Rheinmetall said it was in a “priority position” to arm the US amid the war in Iran, while CEO Armin Pappinger told investors “there will be a huge need for its products in the next 10 years”.
Rheinmetall shares fell 8 per cent following guidance described by a Jefferies analyst as “realistic but soft”, adding that investors had high expectations for a share price that had risen 1,700 per cent since the start of 2022.
The war in Iran, now in its 13th day, has renewed interest in defense companies, which are in increasing demand regardless of their specific focus in the sector.
Leonardo is positioning itself as a digital defender by investing in defense electronics and interconnected platforms such as the “Michelangelo Dome” that can detect and neutralize air threats similar to Israel’s Iron Dome. Rheinmetall is a leading supplier of land systems such as tanks and ammunition.
Sweden’s Saab specializes in fighter jets, while Britain’s UAE SystemsA.Ş., the largest defense company in Europe in terms of sales and market value, has a wide portfolio of military equipment, from nuclear submarines to the Eurofighter Typhoon jet.
Annual revenue of Rheinmetall, Leonardo, Bae Systems, France ThalesGermany’s Hensoldt and Saab increased by an average of 57% between 2021 and 2025.
These companies also saw large increases in order intake during the same period; This is an indicator of future sales.
According to unaudited 2025 figures, Rheinmetall and Saab saw the most explosive growth, at 323% and 284% respectively.
On average, order intake increased by 135%. Thales’ order intake increased by 27% between 2021 and 2025.
Barclays analysts upgraded their recommendation on Leonardo from Neutral to Overweight earlier this week, saying the US-Iran conflict is helping the defense sector’s improving story in the short term, but Leonardo has greater earnings momentum than its peers.
Its diversified portfolio and low exposure to Ukraine also offer resilience to possible impacts from the ceasefire, experts added.
