Defense multinationals will see total revenues grow 6 percent this year and are on the top step of the podium for stock returns in the first quarter of 2024 with three times the performance of the world index.

This is according to a Mediobanca Research Area report on global industrial multinationals with a focus on defense groups released today. The report examines the annual accounts of more than 330 industrial multinationals and contains an in-depth look at the top 30 defense biggies, including 15 in the United States, 10 in Europe and five in Asia.

In the first quarter of 2024, the defense biggies posted an equity return of 22.8 percent versus +7.1 percent for the world equity index. Media & Entertainment (+19 percent) and Fashion (+17.9 percent) were also on the podium.

The best performers in the defense sector were Germany's Rheinmetall (+80.5%) and Hensoldt (+80.3%) and Sweden's Saab (+56.7%), followed by Leonardo (+55.9%). In ninth place was the other Italian Fincantieri (+21.9%).

In terms of turnover, the defense sector (+8.2%) is second in the quarter behind Websoft (+13.9%) and is followed by aircraft manufacturers (+7.5%).

In 2023, global defense spending reached an all-time high of $2.443 trillion (2.3 percent of world GDP), an increase of 6.8 percent, the highest since 2009, in response to the war in Ukraine and geopolitical tensions in the Middle East.

Italy ranks 12th in global spending (1.5 percent of the total). The United States accounts for more than a third of the total (37.5% or $916 billion), followed by China (12.1%) and Russia (4.5%).

In terms of expenditure as a percentage of GDP, Ukraine leads the way (36.7 percent). Italy is in 75th position (1.6%).

Spending per capita, $306 per person, was the highest since 1990.

(Gianluca Semeraro, editing Stefano Bernabei)