Europe's Largest Defence Companies and the Projects Shaping the Continent's Capability

Defence spending across Europe has moved fast since 2022, but the industry's revenue figures haven't quite kept pace. According to SIPRI's most recent full-year data, the world's 100 largest arms producers generated a combined $632 billion in 2023, up 4.2% year on year. Europe's 27 companies on that list accounted for $133 billion of it, but growth there was almost flat at just 0.2%. That gap isn't a sign of weakness. It reflects a time lag: many of Europe's biggest primes were still working through older contracts in 2023, with the wave of new orders placed since Russia's invasion of Ukraine yet to show up in annual revenue. By 2026, that picture looks very different, and it's worth walking through who's driving it.

BAE Systems

BAE Systems remains Europe's largest defence contractor by a clear margin, with 2024 revenue of £28.3 billion and an order backlog exceeding £77 billion. Its reach spans air, sea and land, but two programmes define its current strategic position: the Eurofighter Typhoon, still one of Europe's premier combat aircraft, and the Global Combat Air Programme (GCAP), the trilateral UK-Italy-Japan effort to field a next-generation fighter. BAE also carries deep naval and submarine design expertise, alongside a growing cybersecurity and electronic warfare portfolio. Its Telford-based armoured vehicle work through RBSL, the joint venture with Rheinmetall, connects directly to the Challenger 3 programme.

Airbus Defence & Space

Airbus sits just behind BAE on SIPRI's list, with its defence and space division generating roughly €12 billion in 2024. The A400M Atlas transport aircraft underpins European strategic airlift, while Airbus is also a production partner on the Eurofighter Typhoon and co-developer, alongside Dassault and others, of the Future Combat Air System (FCAS), France and Germany's answer to GCAP. Beyond aircraft, Airbus has built a substantial position in satellite communications and space-based surveillance, an area that's becoming increasingly central to how European militaries plan to fight.

Leonardo

Italy's Leonardo reported 2024 revenue of €17.8 billion and carries an order backlog of €44 billion, reflecting sustained demand across its core areas: military helicopters, avionics and radar systems. The AW101 helicopter and RAT 31 DL long-range surveillance radar are established parts of its portfolio, but Leonardo's more interesting recent moves are in unmanned systems, where platforms like the AWHERO rotary-wing UAS point to where the company sees growth. Leonardo is also a partner in GCAP, giving it a stake in Europe's next generation of combat air alongside BAE and Japan's industry.

Thales and Rheinmetall

Thales, ranked just behind Leonardo on SIPRI's global list, has built its position around electronics, secure communications and radar rather than platforms, making it a supplier that touches nearly every major European defence programme in some form. Rheinmetall, meanwhile, has become the industry's fastest-moving major player. Its 2024 defence segment revenue reached €10.2 billion, and its land systems portfolio, including the Boxer and Lynx infantry fighting vehicles and the Panther KF51 next-generation tank, has made it central to Europe's armoured modernisation drive. Rheinmetall's partnership with BAE on RBSL, and its parallel work on digital battlefield and networked command systems, mean it now sits at the intersection of legacy vehicle manufacturing and the software-defined battlefield that most European militaries are trying to build toward.

The rest of the top tier

Rolls-Royce, MBDA, Naval Group, Safran, Saab, Babcock, KNDS, Dassault Aviation and Fincantieri round out SIPRI's top ranks for Europe, covering propulsion, missiles, naval shipbuilding and fighter aircraft respectively. It's worth noting how many of these sit within multinational structures rather than single national ownership: MBDA and KNDS are both trans-European joint ventures, a structure that's likely to become more common as governments push for shared procurement and reduced duplication across NATO and EU defence budgets.

What's changing beneath the primes

Alongside the established names, a wave of European defence startups is scaling quickly, often in areas the primes have historically underinvested in. Companies working on drone interceptors, autonomous ground vehicles, counter-UAS systems and AI-enabled situational awareness are attracting serious funding, and several are already being drawn into supply chains around the bigger programmes. This matters for the sector's shape over the next few years: the primes are no longer the only route into defence work, and a growing share of innovation, and hiring, is happening in smaller, faster-moving firms building dual-use and niche capability rather than full platforms.

Impact on hiring

The scale and structure of these companies shapes recruitment in distinct ways depending on where in the value chain you're looking.

At the prime level, BAE, Airbus, Leonardo and Rheinmetall are all hiring against multi-decade backlogs rather than single contracts, which means sustained demand for systems engineers, avionics specialists and naval architects, roles that take years to develop and are in genuinely short supply across the continent. The shift toward programmes like GCAP and FCAS, run as multinational joint ventures, is also driving demand for people comfortable working across borders and export control regimes, not just technically capable but fluent in the compliance and IP-sharing frameworks that multinational defence programmes require.

Rheinmetall's dual position, spanning legacy armoured vehicle production and digital battlefield systems, illustrates a wider hiring tension in the sector: companies need to recruit software and data specialists into organisations still structured around mechanical and manufacturing skill sets, and integrating those two hiring pipelines is proving harder than most primes anticipated.

Further down the chain, the rise of well-funded European defence startups is creating a genuinely new talent pool competing for the same people as the primes, particularly in autonomous systems, AI-enabled sensing and electromagnetic technology. These companies often can't match a prime's salary scale, but they're pulling in engineers who want faster iteration cycles and equity upside, which means recruiters increasingly need distinct strategies for prime-level hiring versus startup and scaleup hiring rather than treating the sector as one homogeneous market.