【德安华】全球航空航天国防及政府服务研究报告2024年回顾及2025年展望

2024YearinReview/2025Outlook

WINTER2025

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2024yearinReview

2024sawasteadyincreaseinaerospace,defenseandgovernmentservices(ADG)dealactivity,drivenbypositivelong-termfundamentalsacrossthesectorandastabilizationofglobaleconomicheadwinds

Continuedgrowthincommercialairtravel,albeitataslowerpacethaninpriorcycles

Increasedairtravelanddelaysinnew

aircraftdeliveriesdrovestrongdemandforaftermarketpartsandservices

Aircraftdeliveriesdeclinedduetoongoing

Boeingchallenges,butbacklogremainsatornearrecordhighs

GrowthinDoDandglobaldefensebudgetsinthewakeofheightenedsecuritythreatsandcontinuedglobalunrest

USdefensebudgetprioritizedcriticalnext-gencapabilitiestodeteranddefeatnear-peer

adversaries,withalikelyfinalroundoffundingforUkraine

ContinuedinvestmentinthemodernizationandtransformationofgovernmentITsystems

M&Aactivityincreasedduetomoderating

interestratesandstrongbuyerappetite,butremainedbelowthehistoricalaverage

Transactionmultiplestrendedupwhile

aerospacestocksgenerallyoutperformedanddefense/govconstocksunderperformed

2

2025outlook

ADGdealactivityisexpectedtoaccelerateacrossmostofthesector,drivenbytheTrump

administration’spro-businesspolicies,improvingeconomicconditions,andcontinuedabundanceofdebtandequitycapital

Commercialairtravelexpectedtoincreasewithbusinesstraveloffsettingsoftnessinconsumertravel

Aftermarketpartandserviceproviderswillcontinuetobenefitfromanagingfleet

Commercialaircraftdeliveriesexpectedto

increase15%asAirbusandBoeingworkoffrecordornearrecordhighbacklog

ShiftinstrategicprioritiesfortheUSundertheTrumpAdministration,aspartofan“AmericaFirst”policy

Globaldefensespendingexpectedtoriseinthefaceofnear-peerglobalthreatsandafocusonmodernizationandnext-gentechnologies

RisinguncertaintyforgovernmentservicescontractorsunderDOGE,thoughexact

ramificationsareyettoplayout

ADGM&Aactivityexpectedtostrengthenduetoincreasedeconomicconfidenceandavailabilityofcapital,aswellaspent-uppressuresonprivate

equitytodeploycapital

SpacesectorM&Aactivityexpectedtocontinueitsstrongpace,ascommercialspaceproviderslowercostsandincreaselaunchaccessibility

3

ADGM&ADealVolumeandValue

DealvolumeacrosstheADGindustryincreased13%in2024butremainedbelowhistoricalaverages

616

525

510497

Mediantransactionsperyear(2015-2024):461

476

446

432

421

403

414

409

399

358

$30bn

MegaDeals

$8bn

$37bn

AllOtherDealsTransactions

$11bn$61bn

$98bn$63bn

$121bn

$19bn

$9bn

Acquirer:

$9bn

$85bn$52bn

$131bn

$112bn

Target:

$7bn

$6bn

$75bn

$18bn

$4bn

$30bn

$63bn

$46bn

$30bn

$29bn

$29bn

2012201320142015201620172018201920202021202220232024

AggregateDealValue(MinusLargestDeal)LargestDealValue

10-yearMedianTransactionVolumeAggregateDealVolumes(AllDeals)

4

Source:DACISMergers&Acquisitions;transactionvalueanddealcountasof12/31/2024;allvaluesinUSD$

ADGM&AValuationandBuyerTrends

M&ATransactionMultiplesIncreasedin2024totheHighestLevelSince2021

•Valuationmultiplesforcompletedtransactionsincreasedfrom10.3xin2023to13.1xin2024duetoadeclineininterestrates,anincreaseintheavailabilityofdebtfinancingandfavorablesupplyanddemanddynamics

•Privateequityandprivate-equity-backedstrategicbuyersrepresentedthemajority(53%)ofcompletedtransactionsasstrategicbuyersremainedsomewhatcautiousandprivateequityfirmsheldrecordcapitalreservesthatneededtobedeployed

AverageEV/EBITDAMultiplebyQuarter(1)

25.0x

20.0x

15.0x

10.0x

5.0x

0.0x

13.5x16.4x12.6x10.3x13.1x

18.5x

19.1x

16.5x

15.6x

15.8x

13.8x

13.4x

14.8x13.6x13.8x

13.0x10.9x

12.2x

12.4x

11.2x

11.8x

10.9x

9.8x

9.1x

9.1x

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

20202021202220232024

(1)Fordealswithdisclosedvalue

Source:DACISMergers&Acquisitions;CapitalIQ

M&AActivitybyBuyerType

49%

47%

52%

52%

50%

16%

21%

19%

20%

23%

35%

29%

28%

32%

27%

20202021202220232024

Private-Equity-BackedStrategicFinancialStrategic

5

2024M&AActivitybySubsector

Aerospace,DefenseandGovernmentServicesEachWitnessedanUptickinM&Ain2024

•TheGovernmentServicessectorexperienceda26%increaseinM&Adealactivityin2024drivenbyaninfluxofprivateequitymoneyintothesegment,ownerdesirestoexitpriortoanewadministration,andpotentialpositioningaheadofnewSmallBusinessAdministration(SBA)rulesthattakeeffectin2026

•Aerospacesawamoremodest8%increaseinactivityin2024,whileDefensewasrelativelyflat

ADGDealVolumebySubsector

182

172

58

132

130

56

126

130

116

119

108

111

105

99

44

99

50

39

91

91

90

52

33

41

83

85

46

82

24

36

65

47

72

21

39

37

37

32

39

23

23

28

32

38

45

26

25

42

37

15

27

30

27

23

29

38

22

30

31

70

28

64

60

52

59

44

50

43

39

38

33

41

32

31

30

24

2423

31

20

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

20202021202220232024

AerospaceDefenseGovernment

Source:DACISMergers&Acquisitions

2024ADGDealsbySubsector

GovernmentServices

&IT

157

Aerospace

Components/

Systems

68

GovernmentServices(40%)

Aerostructures/

Machining/Metals

29

AerospaceMRO&Distribution

23

Aerospace(33%)

AviationLeasing&

Services

13

Defense

Systems

Defense

Electronics/

Communications

37

48

Engineering&Construction

5

Navy/Maritime

7

Satellite/SpaceSystems

16

6

Defense

(27%)

ADGPublicCompanyTradingPerformance

$inmillions,asofJanuary31,2025

51.0%

MedianStatistics2024EOPERATINGPERFORMANCEENTERPRISEVALUEASAMULTIPLEOF

Market

Sector

%of52-WeekHigh

Equity

Value

Enterprise

Value

Revenue

EBITDA

RevenueGrowth

EBITDA

Growth

EBITDA

Margin

NetDebt/EBITDA

2024EEBITDA

2025PEBITDA

2024E

Revenue

2025PRevenue

DefensePrimes/LargeCapDefense81.1%$70,535$84,231$47,164$5,7145.5%14.9%12.1%2.0x13.2x12.5x2.0x1.9x

MidCapDefense79.8%5,0415,02681010559.8%10.2%12.9%2.5x40.0x30.5x3.7x3.5x

EuropeanDefense84.5%25,70930,52618,5452,53310.1%24.5%13.7%0.5x11.5x10.3x1.7x1.6x

GovtServices69.3%5,2939,6737,7428436.4%17.7%10.9%1.7x10.9x10.6x1.4x1.3x

E&Cs80.2%9,86410,7007,6326187.7%28.4%8.1%1.3x14.3x13.4x1.4x1.3x

Satellite/Space80.0%1,2351,807229727.2%(32.4%)3.0%2.4x13.6x9.4x3.5x3.0x

DiversifiedAerospace/Industrial90.3%14,19316,4594,5661,0264.4%11.4%22.5%1.3x20.2x18.6x4.5x4.3x

AerospaceMetals82.8%8,6349,9624,2597067.6%64.8%16.6%1.1x13.8x12.0x2.3x2.1x

Aerostructures85.2%9251,194970973.7%33.2%10.0%2.0x10.1x9.2x1.4x1.1x

AviationLeasingandServices88.3%5,14624,8472,7242,5158.1%68.6%92.3%6.5x9.9x8.9xNANA

CommercialOEAirframes88.9%17,66715,77938,9301,3649.4%40.8%3.5%2.5x12.0x10.4x1.8x1.7x

AerospaceEngineandEngineSystems93.4%83,79184,24922,2024,3279.7%13.1%19.5%0.4x17.3x15.5x3.0x2.8x

AerospaceMROandDistribution/Logistics88.8%2,3903,3932,52527814.0%26.3%11.0%2.4x18.6x14.2x1.9x1.8x

Test&Measurement87.0%25,57626,18810,9822,9930.6%7.0%27.3%0.6x12.4x11.6x2.2x2.1x

Median%ChangeByIndex=Last12Months

DefensePrimes&EuropeanDefense

GovtServices&E&Cs

Satellite/

Space

CommercialAerospace

Test&

Measurement

S&P

500

Dow

47.5%

39.7%

24.9%

24.7%

23.0%

18.9%

16.9%

16.8%

16.3%

11.4%

1.7%

1.7%

49.3%

(1.0%)(0.4%)

DefensePrimes/

LargeCapDefense

MidCap

Defense

European

Defense

Government

Services

Engineering&

Construction

Satellite/

Space

DiversifiedAerospace/

Industrial

Aerospace

Metals

Aerostructures

AviationLeasing

andServices

Commercial

OEAirframes

AerospaceEngine

andEngineSystems

AerospaceMROand

Distribution/Logistics

Test&

Measurement

S&P500

DowJones

IndustrialAverage

Source:CapitalIQ,EquityResearchAnalysts

7

DefensePrimes/LargeCapDefense:BA,GD,HII,LHX,LMT,NOC,RTX;MidCapDefense:AVAV,CMTL,KTOS,DRS,MRCY;EuropeanDefense:BA,CHG,LDO,QQ,SAF,HO;GovernmentServices:AMTM,BAH,CACI,CGI,ICF,LDOS,MMS,SAIC,VVX;E&Cs:ACM,BWXT,FLR,J,KBR,PSN,TTEK;Satellite/Space:IRDM,VSAT,BKSY,LUNR,M0NY,RDW,RKLB,SPIR,SPCE;DiversifiedAerospace/Industrial:AME,CR,CW,ESE,GE,HEI,HON,LOAR,MOG.A,PH,TDY,TXT,TKR,TDG,WWD;AerospaceMetals:AA,ATI,CRS,USAP;Aerostructures:CVU,DCO,FACC,HRX,HXL,MAL,SNR,SPR,TGI;AviationLeasingandServices:AER,AL,WLFC:CommercialOEAirframes:AIR,BA,BBD.B,AM,ERJ;AerospaceEngineandEngineSystems:GE,MTX,RR,SAF;AerospaceMROandDistributionlLogistics:AIR,B,S59,S63,SARO,VSEC;Test&

Measurement:APH,AME,EMR,6861,MEI,ST,7701,SXS,TEL,TTG

CommercialAerospaceHighlights

AirTravelContinuestoGrow,AlbeitataSlowerPace

•Commercialairtravelhascontinueditssteadyclimbupward,withseasonallyadjustedrevenuepassengermiles(RPM)reaching94.7billioninNovember2024,whichmarksa2.3%increaseover

November2023andan11.1%increaseoverNovember2022

•Duringthe2024holidayseason,thenumberoftravelerspassing

throughTSAcheckpointsincreasedroughly7%relativetothesameperiodlastyear

•Whileairtravelhascontinuedtorise,ithasdonesoataslowerpaceaspost-COVIDrevengespendinghascometoanend,andhigher

interestratesandinflationweighonconsumers’propensitytospend

•In2025,commercialairtravelisexpectedtocontinuetorise,albeitat

aslowerpacethanrecentyears,asaresurgenceinbusinesstravelisexpectedtooffsetflatordecliningconsumerdemand

•Onaglobalbasis,theInternationalAirTransportAssociation(IATA)isprojectingthenumberofairtravelerstoincrease6.7%in2025

AirRevenuePassengerMiles(1)

120

Seasonallyadjustedmilesinbillions

100

80

60

40

20

0

Jan-20

Apr-20

Jul-20

Oct-20

Jan-21

Apr-21

Jul-21

Oct-21

Jan-22

Apr-22

Jul-22

Oct-22

Jan-23

Apr-23

Jul-23

Oct-23

Jan-24

Apr-24

Jul-24

Oct-24

TSACheckpointTravelers(2)

Rolling12-monthcheckpointtravelersinmillions

1,000

800

600

400

200

Jan-20

Apr-20

Jul-20

Oct-20

Jan-21

Apr-21

Jul-21

Oct-21

Jan-22

Apr-22

Jul-22

Oct-22

Jan-23

Apr-23

Jul-23

Oct-23

Jan-24

Apr-24

Jul-24

Oct-24

0

(1)FederalReserveEconomicData(FRED)EconomicData–SeasonallyAdjustedAirRevenuePassengerMiles;December2024datanotavailableasofthedateofthisreport

(2)–TSACheckpointTravelNumbers

9

Source:BoeingandAirbus,DSMForecastInternational10

CommercialAerospaceHighlights

AircraftDeliveriesDeclinedin2024DuetoBoeing’sChallengesbutAreExpectedtoReboundin2025

•Totalcommercialaircraftdeliveriesdeclined11%in2024duetoBoeing’scontinuedstruggles

•Airbusdeliveriesincreasedandareapproachingpre-COVIDlevels

whileBoeingsignificantlylagsbehindduetocontinuedproductionissueswiththe737MAXand787,andrecentlaborunrest

•In2025,deliveriesareprojectedtoincreaseatafasterpace,withAirbusforecastinga16%increaseandBoeingforecastinga14%increase,whichwillbeaboostfortiersuppliers

•ForAirbus,netaircraftordersslightlyoutpaceddeliveriesin2024,

resultinginanindustryrecordbacklogof8,658commercialaircraftattheendof2024

•Boeing’sordersplummetedduetoitscontinuedstruggles,from1,314netordersaftercancellationsandconversionsin2023to377in2024,resultinginaslightdeclineinbacklog

CommercialAircraftDeliveries

Airbus

Boeing

806

397

763

748

762

528

380

348

480

340

157

889

800

766

863

732

718

661

635

611

688

566

2015A2016A2017A2018A2019A2020A2021A2022A2023A2024A2025P

CommercialAircraftinBacklog

AirbusBoeing

5,595

5,626

5,590

5,970

6,057

5,821

5,901

4,407

4,546

4,840

8,658

7,577

7,482

8,598

7,265

7,164

7,082

6,874

6,787

7,239

Dec-15Dec-16Dec-17Dec-18Dec-19Dec-20Dec-21Dec-22Dec-23Dec-24

CommercialAerospaceHighlights

HeightenedAirTravelandAgingFleetsDrivingStrongDemandforMROServicesandAftermarketParts

•Aresurgenceincommercialairtravelhasledtoanincreaseinaircraftinserviceandflighthours,whichisdrivingrecorddemandfor

maintenance,repair,andoverhaul(MRO)servicesandparts

•AdelayinnewaircraftdeliveriesbyAirbusandBoeinghasfurther

heighteneddemand,asfleetsareagingandolderaircraftrequiremoreshopvisits

•MROshopshavestruggledtomeetdemandduetolaborandpartshortages,whichhaslengthenedturnaroundtimes

•Turnaroundtimesareupover35%forlegacyenginesandover150%fornew-generationenginescomparedtopre-pandemiclevels(1)

•MROdemandisexpectedtoremainstrongin2025andatelevated

levelsthroughtheendofthedecade,whilepartsuppliersareexpectedtoexperiencecontinuedgrowth,althoughataslowerpaceasan

increaseinpartsavailabilitywilllimitgrowth

AerospaceAftermarketIndexedRevenue(2)

126

118118

111

112

108

100

99

96

94

8988

86

81

75

68

64

61

5456

(1)Source:AviationWeek

(2)Source:Publicfilings;includesaerospaceandaftermarketsalesforAAR,Barnes,DeutscheLufthansaandVSE,ascomparedtoQ4’19results;normalizedforacquisitions11

12

Source:DACISMergers&Acquisitions;CapitalIQ

CommercialAerospace:M&AHighlights

450

AerospaceM&ADealVolumeIncreasedin2024butRemainedWellBelow2021and2022Levels

•Aerospacedealactivitywasup8%in2024to133transactions,drivenprimarilybyariseindealsinvolvingcompaniesservingtheaerospaceaftermarket(i.e.,MROprovidersanddistributors)

350

•M&AactivityinvolvingaerospacecomponentandsystemmanufacturersdeclinedforthethirdstraightyearasthosebusinesseshavefacedheadwindsduetoBoeing’sproductionissues

CommercialAerospaceM&ADealVolumebySubsector

213

190

47

37

149

133

123

15

27

24

61

23

49

40

29

103

92

74

68

78

20202021202220232024

AerospaceComponents/SystemsAerostructures/Machining/Metals

AviationLeasing&ServicesAerospaceMRO&Distribution

CommercialAerospaceM&AActivitybyBuyerType

30%

40%

44%

45%

45%

29%

14%

18%

21%

26%

46%

38%

41%

34%

29%

20202021202220232024

Private-Equity-BackedStrategicFinancialStrategic

2024KeyCommercialAerospaceTransactions

hasagreedtoacquire

hasagreedtoacquire

hasacquired

hasacquired

hasacquired

Date:Pending

EV:$3,104M

EV/EBITDA:6.2x

AircraftLeasingand

AirCargo

Transportation

Services

Date:Pending

EV:$8,382M

EV/EBITDA:ND

Date:December2024

EV:$200M

EV/EBITDA:10.0x

Aftermarket

AerospaceEngine

ComponentsDistribution

Date:December2024

EV:ND

EV/EBITDA:ND

PrecisionMachined

Componentsand

Date:February2025

EV:$1,000M

EV/EBITDA:13.6x

Aerostructures

Manufacturingfor

Commercial,DefenseandRegionalAircraft

AircraftLandingGearand

ManufacturingandRepair

ActuationSystems

Assemblies

hasacquired

hasacquired

hasacquired

hasacquired

hasacquired

Date:October2024

EV:$3,547M

EV/EBITDA:9.7x

Aerospaceand

IndustrialParts

Manufacturingand

Repair

PRODUCTSUPPORTGROUPDate:March2024

EV:$725M

EV/EBITDA:14.5x

ComponentMRO

Services

Date:April2024

EV:$1,884M

EV/EBITDA:17.1x

HighPrecisionand

Engineered

Componentsand

Date:September2024

EV:ND

EV/EBITDA:ND

Date:August2024

EV:$170M

EV/EBITDA:ND

AuxiliaryPower

UnitandAvionics

MROServices

TurbineEngineand

AccessoryMROServices

Structures

Daterepresentsclosedate

Source:CapitalIQ,DACISMergers&Acquisitions;Mergermarket13

Source:CapitalIQ;asofDecember31,2024

14

CommercialAerospace:PublicTradingPerformance

AerospaceStocksExperiencedMixedResultsin2024

•Aerospacemetals(notablyAlcoaandATI)andaero-enginemanufacturersoutperformedthemarket,whilecommercialOEMs(notablyBoeing)andaerostructuresmanufacturers(notablyHexcelandSenior)underperformed

DiversifiedAerospace/Industrial

AerospaceMetals

Aerostructures

AviationLeasingandServices

CommercialOEAirframes

AerospaceEngineandEngineSystems

AerospaceMROandDistribution/Logistics

S&P500

180

160

140

120

100

80

60

ElectionDay

48%

38%

33%

24%

22%

3%

2%

(12%)

Jan-24Feb-24Mar-24Apr-24May-24Jun-24Jul-24Aug-24Sep-24Oct-24Nov-24Dec-24

DefenseandSpaceHighlights

DoDandNATO/AlliedDefenseBudgetsIncreasingintheFaceofHeightenedSecurityThreats

•TheFY25NationalDefenseAuthorizationAct(NDAA),signedintolawby

PresidentBideninDecember2024,representedaroughly1.0%increase

overFY24,withfundingtodeterChinaandRussia,supportNATOalliesandUkraine,andacceleratetechnicaldevelopmentofkeynext-gensystems

suchasartificialintelligence(AI),cyber,autonomy,andspacesystems(1)

•WhiletheTrumpadministrationissendingmixedmessagesregarding

futurespendingincreases,theadministrationisexpectedtocontinueto

prioritizethemodernizationofmilitarysystems,whileeliminatingvirtuallyallfundingassociatedwiththeUkraineconflictaspartofabroader“America

First”policy

•Concurrently,itisexpectedtheTrumpadministrationwillpressNATOmemberstoincreasedefensespendingto~5%ofGDP

•Currently,justovertwo-thirdsofNATOmembers(23of32)havefulfilledtheir2%commitment,upfromjust10countriesin2023(2)

(1)Source:OfficeoftheUnderSecretaryofDefense;DefenseNews;U.S.DoD;historicalDoDbudgetinclusiveofOCOandemergencyappropriation

(2)SourceNATO;chartincludesthe10largestNATOcountriesbasedonGDP

DoD-EnactedBudgetFunding(1)

$inbillions

BaseBudget

OCO/OtherSupplementals

$900

$852

$777

$35

$36

$58

$705

$70

$688

$72

$723

$671

$90

$71

$580$606

$59$83

$816

$842$850

$742

$635

$616

$600

$633

$521$523

$100

FY16FY17FY18FY19FY20FY21FY22FY23FY24FY25

2024NATODefenseSpendingasPercentageofGDP(2)

4.12%

3.37%

2.33%

2.12%2.09%2.06%

1.85%

1.49%1.37%1.28%

PolandUSAUKGermanyTurkeyFranceNetherlandsItalyCanadaSpain

16

Source:DACISMergers&Acquisitions;CapitalIQ17

DefenseandSpace:M&AHighlights

DefenseM&ADealVolumeExperiencedModestGrowthfortheSecondConsecutiveYear

•Defensedealactivityincreasedslightlyin2024,drivenbyacontinuedheightenedthreatenvironmentandexpectationsofincreaseddefensespendingglobally

•Strategicscontinuedtorepresentthevastmajorityofbuyers,leveragingstrongbalancesheetsinahighinterestrateenvironment

DefenseM&ADealVolumebySubsector

193

32

123

108

106

23

102

61

26

16

20

44

33

46

48

89

45

37

46

33

202020212022

DefenseElectronics/CommunicationsNavy/Maritime

20232024

DefenseSystems

Satellite/SpaceSystems

DefenseM&AActivitybyBuyerType

61%54%

69%

67%

69%

13%

11%

16%

17%