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Resilience in defence & aerospace industry despite recession: Deloitte

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WASHINGTON (BNS): Deloitte’s recent study of the 'global aerospace & defence industry financial performance for 2009' evaluated the performance of the 91 global aerospace & defence companies with revenues exceeding $500 million and found that despite recession of 2009 these companies have demonstrated resilience.

“Despite the economic recession of 2009, these 91 global aerospace & defence companies faced financial challenges head-on and experienced less decline than companies in many other sectors, demonstrating the resilience of the industry,” said Tom Captain, vice chairman, and global and United States aerospace & defence sector leader for Deloitte LLP, according to a Deloitte news report.

The study found that if it were not for loss provisions or impairment charges at Boeing, EADS and BAE Systems collectively, profits for these companies would have been essentially flat, again demonstrating the underlying strength of the industry.

Boeing had higher sales revenue than EADS, and regained its position as the world’s largest A&D company, reversing its 2nd place performance in 2008.

The aerospace & defence companies continue to face challenges of the moderating defence budgets, poor programme performance, foreign exchange rate volatility and reduced credit availability.

According to the study report, American aerospace & defence companies grew faster in 2009, at 3.4 percent, than European companies in this study, whose revenue fell by 2.1 percent.

American companies were more profitable again in 2009, with operating margins of 9.3 percent, than European companies in this study, with operating margins of 4.6 percent.

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