In 2016-2017, I wrote that we would attempt to broaden the methodology of ADM’s Top 40, moving away from the simple measure of turnover to determine the No.1 Defence Contractor in our survey.
As it turns out, while there were suggestions for new questions to be added to the survey, (see P36 of the digital edition or the web story for the Top 40 introduction and answers to these new questions), no one could suggest a reliable and fair method of providing a value weighting to the data to give us a sound new method of ranking companies. Added to that of course is the dilemma that not every company could, or would, provide that level of detail about their Australian business. In fact, less than half of the companies ranked in the Top 40 this year provided any of the additional data requested.
With regards to Australian Industry Content (AIC), the infrastructure companies such as Lendlease, Downer EDI and Aurecon Australia reported 100 per cent AIC or as close to that figure as to make it a rounding error.
Of the Defence platform companies, Lockheed Martin Australia, Babcock Australasia and Cubic Defence Australia/NZ report high percentages of turnover as AIC. Thales Australia was the export standout in dollar value terms with $128.6 million of Defence exports or 14 per cent of Defence turnover but Cubic Defence Aust/NZ has a higher percentage of exports at 47.1 per cent or $37.494 million. Cubic is also high on the R&D investment percentage at 15.5 per cent followed by CAE Australia at 12 per cent of turnover.
Another emerging trend is that smaller companies are finding it a business disadvantage to publicly report their defence revenue. Our ANZ SME list has dwindled this year, reflecting this reluctance to expose their businesses to public gaze. For many it is a defensive position, which I fully understand.
Since the publication of last year’s Top 40, ADM has launched a new website at www.australiandefence.com.au. You will find the Top 40 and Top 20 reports under the Industry tab in the top navigation bar. Participants can also access a PDF of the Top 40/Top 20 feature from this issue of the magazine.
In 2018, the Top 40/Top 20 SME feature will be managed by ADM managing editor Katherine Ziesing and associate publisher Kylie Leonard. I wish them luck as I hand over the reins of ADM to the next generation. I have managed this survey single-handedly for 22 years. Over that time it has grown in stature so I’m delighted that what started as a ‘thought bubble’ in 1995 has proved to be of long term value to Defence and defence industry alike.