{"id":15278,"date":"2025-12-29T10:06:18","date_gmt":"2025-12-29T10:06:18","guid":{"rendered":"https:\/\/borrowaccelerated.com\/?p=15278"},"modified":"2025-12-29T10:06:18","modified_gmt":"2025-12-29T10:06:18","slug":"europes-largest-defence-groups-set-to-return-5bn-to-shareholders-in-2025","status":"publish","type":"post","link":"https:\/\/borrowaccelerated.com\/?p=15278","title":{"rendered":"Europe\u2019s largest defence groups set to return $5bn to shareholders in 2025"},"content":{"rendered":"<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Simply sign up to the <!-- -->Aerospace &amp; Defence<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=79c31767-ccac-4669-a299-3d2e9b797c6d&amp;concept-id=5399a465-5c92-47e0-a4ca-29220636f629\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Europe\u2019s largest defence groups are set to return close to $5bn\u00a0to shareholders this year as the sector rewards investors and increases investment after a surge in global military spending following the war in Ukraine.\u00a0<\/p>\n<p>The bulk of the bumper returns this year at eight of Europe\u2019s largest defence companies is in the form of higher dividends, according to analysis of the past decade by Vertical Research Partners for the Financial Times. <\/p>\n<p>The research, which is focused on the largest defence players and excludes Airbus given its large commercial operations, shows that payouts are on course to reach a 10-year high.<\/p>\n<p>Despite the payouts, the research also shows that European defence sector investment has risen significantly since Russia\u2019s full-scale invasion of Ukraine nearly four years ago as companies have expanded production.\u00a0<\/p>\n<p>By contrast, shareholder returns by the six largest defence companies in the US \u2014 Lockheed Martin, General Dynamics, Northrop Grumman, RTX Corporation, L3Harris Technologies and Huntington Ingalls \u2014 have fallen after hitting a 10-year peak in 2023.<\/p>\n<p>At the same time investment \u2014 capital expenditure and self-funded research and development calculated as a percentage of sales \u2014 has dropped slightly.\u00a0Boeing is excluded given its large civil aerospace operations.<\/p>\n<p>The industry has drawn criticism, notably in the US, over doubts that it is investing the proceeds of the boom to boost production of new weapons and not simply spending those gains on share buybacks.\u00a0<\/p>\n<p>Donald Trump has urged defence contractors to invest money in production, boosting returns to shareholders. He is due to discuss such issues with companies in Florida this week.<\/p>\n<p>His comments follow those of US Treasury secretary Scott Bessent, who said in October that the country\u2019s defence companies were \u201cwoefully behind in terms of deliveries, so we may have to, as their biggest customer\u2009.\u2009.\u2009.\u2009prod them to do a little more research, a little fewer stock buybacks\u201d.\u00a0<\/p>\n<p>Rob Stallard, analyst at Vertical Research, said the accusation that the US defence industry had underinvested or was \u201cprofiteering\u201d was \u201cnot supported by the facts\u201d. <\/p>\n<p>\u201cBuybacks and dividends as a percentage of market cap [of US companies] have almost halved over the past two years.\u201d<\/p>\n<p>Vertical\u2019s research shows that the average investment of the basket of European companies analysed \u2014 measured as capex plus R&amp;D spend as a percentage of revenues \u2014 is expected to rise to 7.9 per cent in 2025. In 2021, the year before the start of the conflict in Ukraine, this figure was 6.4 per cent. <\/p>\n<p>Public debate about the issue in Europe has so far been limited but some industry experts believe that given the significant spending pledges announced by governments, they could become more involved.\u00a0<\/p>\n<p>\u201cIf defence spending rises to a certain level, significantly higher than it is now, then defence becomes so important to the governments that they will become very interested in how much money you are making,\u201d said Nick Cunningham, analyst at Agency Partners.\u00a0<\/p>\n<p>At the same time, he added, the industry in Europe was \u201cnot ramping up\u201d.\u00a0<\/p>\n<p>\u201cIf you are operating in a capacity-constrained environment, coining it and buying back stock, that will not be going down very well. So you should make a big song and dance around how much you are investing,\u201d he added.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/79c31767-ccac-4669-a299-3d2e9b797c6d\" target=\"_blank\" rel=\"noopener\" rel=\"nofollow\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stay informed with free updates Simply sign up to the Aerospace &amp; Defence myFT Digest &#8212; delivered directly to your inbox. Europe\u2019s&#8230;<\/p>\n","protected":false},"author":1,"featured_media":15279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-15278","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Europe\u2019s largest defence groups set to return $5bn to shareholders in 2025 | Borrow Accelerated<\/title>\n<meta name=\"description\" content=\"Stay informed with free updatesSimply sign up to the Aerospace &amp; Defence myFT Digest -- delivered directly to your inbox.Europe\u2019s largest defence\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/borrowaccelerated.com\/?p=15278\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Europe\u2019s largest defence groups set to return $5bn to shareholders in 2025 | Borrow Accelerated\" \/>\n<meta property=\"og:description\" content=\"Stay informed with free updatesSimply sign up to the Aerospace &amp; 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