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Aerospace and Defence

Aerospace and Defence

Civil aerospace continues to be robust with suppliers seeing increased activity, the challenge is having resources to capitalise on opportunities.

Civil aerospace continues to be robust with suppliers seeing increased activity.

The defence sector is vital to the economy of the UK, never more so than in the wake of recent attacks. The government has committed to both investment and efficiency savings targets following the strategic defence and security review. As announced in the SDSR 2015, the impact of ‘warfare in the information age’ cannot be underestimated as the industry wrestles with changing long-term infrastructure and contract investments to respond to fast-moving developments in digital technology and cyber security. Doing more in the context of SDSR15 will be based around technology and innovation rather than the traditional demands of delivering expeditionary operational deployments with ever diminishing resources.

This provides an interesting environment for the civil aerospace & defence sector. Against positive developments such as record order backlogs, driven by increased demand from the Far East and Middle East, the underlying dynamics are changing. This will have an impact on the focus of businesses throughout the supply chain. The focus will move from one of 'big bet' platform launches to one of balancing cost optimisation with security of supply and rate readiness, ensuring that the industry order backlogs can be delivered to schedule and on a profitable basis. 

This will produce both opportunities and threats to the established aerospace & defence supply chain. The much publicised 'globalisation' of the supply chain and implications of trade agreements, regulation and sovereignty purchasing will become more prevalent, driving a focus on not just engineering capability but supply chain management skills and need for increased partnering. KPMG aerospace & defence sector team is focused on supporting clients to meet these challenges and capitalise on the opportunities through M&A advisory, equity and debt raising, redefining and executing strategy, redesign of operational processes and footprint, optimisation of supply chain and procurement, working capital optimisation/cash management and governance, including areas such as ITAR and ABC compliance.

While this evolving landscape presents several new challenges, KPMG offers specific capabilities to help clients make the right strategic, financial and operational choices in both the public and private sector. Our team includes individuals which have experience of working on both sides. This means we understand the culture and complexities of the sector, and know how to work effectively with our clients to deliver real results.