PARIS (Realist English). Rising NATO defense commitments are propelling France’s defense industry to new heights, offering an economic boost in an otherwise stagnant economy — and smaller firms are sharing in the gains once reserved for industry giants like Dassault, Thales, and Safran.
Among the standout performers is Exosens, a mid-sized manufacturer of light-amplification tubes used in night-vision goggles. The company, valued at about €2.2bn after a sharp rise in its stock this year, illustrates how growing European defense budgets are benefiting smaller suppliers across the sector.
“We’re at a major geostrategic turning point — and even an end to the war in Ukraine will not fundamentally change that,” chief executive Jérôme Cérisier told the Financial Times during a visit to Exosens’ factory in southwestern France.
The Banque de France has identified defense as one of the few drivers of corporate investment, as Europe responds to U.S. President Donald Trump’s pressure on allies to increase military spending.
Exosens, which went public in June 2024 just before President Emmanuel Macron’s surprise snap elections, has outperformed the French market: its shares have nearly doubled while the SBF 120 index has stagnated. The company’s first-half revenue rose 20% to €225mn, with operating profit up 21% to €27mn. Key clients include the German military and Greek optics producer Theon.
Other small French defense firms have also surged. Exail Technologies, a maker of drones and navigation systems, has seen its stock rise more than 400% this year. Privately held companies such as Delair, which builds reconnaissance drones, and MC2-Technologies, which develops high-frequency systems to counter drones, are expanding rapidly.
“The announcements are there — we’re waiting for them to turn into orders,” said Alexandre Sibon, deputy director at MC2-Technologies, which expects revenue to grow 30% this year to about €20mn as NATO members ramp up electronic warfare investments.
Macron has pledged to double France’s defense budget to €100bn a year, a goal constrained by tight public finances but expected to direct most of the spending toward domestic suppliers.
At Exosens, engineers recently demonstrated a new generation of night-vision tubes offering 30% higher image quality. The device, priced at up to €4,000 per unit, has already attracted 5,000 orders — including from European special forces.
“If you can see 20 meters further than your opponent, cost isn’t the issue,” said Frédéric Guilhem, the company’s commercial chief. He added that Exosens’ all-European supply chain gives it a strategic edge over U.S. rivals Elbit America and L3, whose exports are restricted by Washington’s licensing rules.
“It’s possible the Americans have comparable products — they’re just not available to us,” Guilhem said.
Analyst Aurélien Sivignon of ODDO BHF called Exosens’ non-American sourcing “a major competitive advantage,” noting that the company is now expanding production in Brive and planning a U.S. presence to meet rising demand.
Investor sentiment toward defense has also shifted. French lender BPCE this month issued Europe’s first €750mn bond dedicated to defense companies. “There’s no longer any hesitation,” said Philippe Jeanne, BPCE’s head of financial management. “It’s not just about the war in Ukraine — it’s about the U.S. stepping back, and Europe realizing it must adapt.”
Cérisier agrees that Europe’s strategic awakening is only beginning: “There has been a profound wake-up call,” he said. “It will drive significantly higher defense activity for years to come.”
