REG - BAE SYSTEMS PLC - Half-year Report
01/08/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240801:nRSA6746Ya&default-theme=true
RNS Number : 6746Y BAE SYSTEMS PLC 01 August 2024
BAE Systems plc
Half-yearly Report 2024
Charles Woodburn, Chief Executive, said: "Thanks to the outstanding efforts of
our employees around the world, we delivered a strong operational and
financial performance in the first half of the year, giving us confidence to
increase our year-end guidance across all our key metrics. Working closely
with our customers, we have maintained momentum on key strategic activities,
including AUKUS and the Global Combat Air Programme. We also continued
evolving our technology portfolio through strategic acquisitions and the
ongoing integration of our new Space & Mission Systems business.
"Our order intake shows that demand for our products and services remains high
and we are well positioned for sustained growth in the coming years. We will
keep investing in new technologies, facilities and our people so that we can
deliver on our record order backlog and help our government customers stay
ahead in an uncertain world."
Financial highlights Six months Six months
ended
ended
Financial performance measures as defined by Group(1)
30 June
30 June Variance(2)
2024 2023
Sales £13,399m £12,018m +13%
Underlying EBIT £1,393m £1,258m +13%
Underlying earnings per share - basic 31.4p 29.6p +7%
Free cash flow £219m £1,070m -£851m
Order intake £15.1bn £21.1bn -£6.0bn
As at As at
30 June
31 December
2023
2024
Variance(3)
Order backlog £74.1bn £69.8bn +£4.3bn
( ) Six months Six months
ended
ended
Financial performance measures as derived from IFRS
30 June
30 June
2024 2023 Variance
Revenue £12,477m £10,997m +13%
Operating profit £1,296m £1,233m +5%
Earnings per share - basic 31.4p 31.8p -1%
Net cash flow from operating activities £757m £1,484m -£727m
Dividend per share 12.4p 11.5p +8%
As at As at
30 June
31 December
2023 Variance
2024
Order book £59.6bn £58.0bn +£1.6bn
As defined by Group
· The 13%(2) growth in sales reflects the ongoing strong programme
performance across the portfolio and the acquisition of the Space &
Mission Systems (SMS) business in February.
· Underlying earnings before interest and tax (EBIT) has grown
13%(2), reflecting the increase in sales combined with strong programme
execution and the ongoing efforts of our internal efficiency initiatives.
· Growth of 7%(2) in underlying earnings per share (EPS) is after
the increase in underlying net finance costs, incurred primarily as a result
of the $4.8bn (£3.8bn) debt finance raised in March, and the increased tax
rate.
· Free cash flow was £219m, with the comparative period of
£1,070m reflecting a high level of customer advances.
As derived from IFRS
· The growth in revenue of 13% reflects the same strong operational
performance across the portfolio.
· Operating profit is up 5% as the growth in underlying EBIT is
offset by the additional amortisation of intangible assets acquired with SMS.
· The reduction in basic earnings per share on the prior period
reflects the increased interest cost and the amortisation of intangibles
acquired with SMS.
1. We monitor the underlying financial performance of the Group using
alternative performance measures. These measures are not defined in
International Financial Reporting Standards (IFRS) and therefore are
considered to be non-GAAP (Generally Accepted Accounting Principles) measures.
The relevant IFRS measures are presented where appropriate. The purposes and
definitions of non-GAAP measures are provided in the Alternative performance
measures section on page 46.
2. Growth rates for sales, underlying EBIT and underlying EPS are on a
constant currency basis (i.e. calculated by translating the results from
entities in functional currencies other than pounds sterling for the period
ended 30 June 2023 to pounds sterling at the average exchange rate of such
currencies for the period ended 30 June 2024). The comparatives have not been
restated. All other growth rates and year-on-year movements are on a reported
currency basis.
3. Order backlog includes £2.2bn acquired with the SMS business in
February.
Strategic progress
Alongside strong operational delivery, we continued to invest in our people,
research & development (R&D) and capital expenditure, which underpins
our growth outlook. During the first half of the year, key areas of progress
included the following:
· Under the AUKUS agreement, we were selected to build Australia's
new fleet of nuclear-powered submarines, alongside ASC Pty Ltd.
· We signed a contract, worth £4.6bn, for the delivery of the first
three Hunter Class frigates (Batch 1) in Australia, following which, we
entered the construction phase and officially cut steel on the first ship at a
ceremony at the Osborne Naval Shipyard in Adelaide, South Australia.
· We made progress against our 2024 target to recruit 2,700 graduates
and apprentices in the UK.
· In February, we completed the acquisition of the US-based Ball
Aerospace business from Ball Corporation and formed our new SMS business,
which is reported within our Electronic Systems sector. Since the acquisition,
the SMS business has secured orders of £0.7bn and we are progressing with the
integration activities.
· In February, Air Astana completed an initial public offering (IPO)
with a joint listing in London and Kazakhstan. Following the IPO, our
shareholding reduced from 49% to 17% - with cash proceeds on disposal of
£166m and a profit on disposal of £75m.
· We completed two further acquisitions in the uncrewed air systems
(UAS) technology market, both of which form part of FalconWorks(®) in our Air
sector.
Operational highlights
· The sixth Astute class submarine, Agamemnon, was officially named
at our submarines site in Barrow-in-Furness, Cumbria.
· We delivered two further Typhoon aircraft to Qatar - a total of 20
are now in service with the Qatar Emiri Air Force.
· A new concept model of the next-generation combat aircraft, being
developed by the Global Combat Air Programme (GCAP), was unveiled at the
Farnborough International Airshow in July. This will be known as Tempest in
the UK.
· We marked the launch of satellites that will bridge critical gaps
in current space-based environmental monitoring capabilities for the US Space
Force.
· Following the move to full-rate production, we are now delivering
five variants of Armored Multi-Purpose Vehicles (AMPV) and, during the period,
the US Marine Corps' fleet of Amphibious Combat Vehicles (ACV) completed its
first successful operational deployment.
· Within our Hägglunds business, based in Sweden, we are expanding
our production and delivery capabilities by investing more than £160m in
advanced manufacturing capabilities and a new customer test and acceptance
centre in the period.
Capital deployment
· We successfully raised $4.8bn (£3.8bn) of debt finance, of which
$4.0bn (£3.2bn) was used to refinance the bridge loan facility associated
with the Ball Aerospace acquisition.
· We completed the third and final tranche of the up to £1.5bn share
buyback programme, announced in July 2022 (2022 share buyback programme) on 24
July 2024. In the six months ending 30 June 2024, we repurchased 19,403,928
ordinary shares under the 2022 share buyback programme at a total cost
(including transaction fees) of £250m. The up to £1.5bn share buyback
programme, which we announced in August 2023 (2023 share buyback programme),
commenced on 25 July 2024.
· The directors have declared an interim dividend of 12.4p per share
in respect of the half year ended 30 June 2024. This represents an increase of
8% compared to the interim dividend declared in respect of the half year ended
30 June 2023. This will be paid on 2 December 2024, in line with our usual
dividend timetable.
2024 Upgraded Group guidance(1)
Sales guidance is increased by 200 bps to 12% to 14% reflecting continued
strong operational performance across all sectors.
Underlying EBIT guidance is increased by 100 bps to 12% to 14% reflecting the
sales profile and strong operational performance.
Underlying earnings per share guidance is increased by 100 bps to 7% to 9%
aligned to underlying EBIT. In addition, we have refined our guidance on
underlying net finance costs and the effective tax rate.
We have increased our in-year free cash guide by £200m to >£1.5bn and we
expect to deliver over £6.0bn of free cash flow for the three year period
ending 2024.
The Group guidance for 2024 incorporates the acquisition of Ball Aerospace(2)
and the reduction in the Group's shareholding in Air Astana following its
initial public offering, both of which completed in February 2024.
Guidance is provided on a constant currency basis using an exchange rate of
$1.24:£1, which is in line with the actual 2023 exchange rate. Sensitivity to
foreign exchange rates: the Group operates in a number of currencies, the most
significant of which is the US dollar. As a guide, a 5 cent movement in the
£/$ exchange rate will impact sales by c.£500m, underlying EBIT by c.£70m
and underlying earnings per share by c.1.3p.
Year ended 31 December 2024 Year ended
31 December 2023
Results
Updated Guidance Previous Guidance
Sales Increase by 12% to 14% Increase by 10% to 12% £25,284m
Underlying EBIT Increase by 12% to 14% Increase by 11% to 13% £2,682m
Underlying EPS Increase by 7% to 9% Increase by 6% to 8% 63.2p
Free cash flow target >£1.5bn >£1.3bn £2,593m
· Underlying net finance costs c.£360m to c.£375m (previously
c.£350m to c.£375m)
· Effective tax rate c.20% (previously c.21%)
· Non-controlling interests c.£80m
1. While the Group is subject to geopolitical and other uncertainties,
the Group guidance is provided on current expected operational performance.
The guidance is based on the measures used to monitor the underlying financial
performance of the Group. Reconciliations from these measures to the financial
performance measures defined in IFRS are provided in the Alternative
performance measures section on page 46.
2. Guidance incorporates the acquisition of Ball Aerospace from 16
February 2024.
For further information please contact:
Investor Relations Media Relations
Telephone: +44 (0) 1252 383455 Telephone: +44 (0) 7540 628673
Email: investors@baesystems.com (mailto:investors@baesystems.com) Email: kristina.anderson@baesystems.com
(mailto:kristina.anderson@baesystems.com)
Analyst and investor presentation
A presentation, for analysts and investors, of the Group's Half-yearly Results
for 2024 will be available at 7.15am BST today (1 August 2024) on the investor
website, followed by a Q&A at 9.00am BST.
Details can be found on investors.baesystems.com
(https://investors.baesystems.com/) , together with presentation slides and a
copy of this report. A recording of the Q&A webcast will be available for
replay later in the day.
About BAE Systems
At BAE Systems, we provide some of the world's most advanced, technology-led
defence, aerospace and security solutions. We are a workforce of around
100,000(1) highly skilled people in more than 40 countries. Working with our
customers and local partners, we develop, engineer, manufacture and support
products and systems that deliver military capability, protect national
security, and keep critical information and infrastructure secure.
1. Including share of equity accounted investments.
Shareholder information
Registered office
BAE Systems plc
6 Carlton Gardens
London
SW1Y 5AD
United Kingdom
Registered in England and Wales, No. 01470151
Cautionary statement:
All statements other than statements of historical fact included in this
document, including, without limitation, those regarding the financial
condition, results, operations and businesses of BAE Systems plc and its
strategy, plans and objectives and the markets and economies in which it
operates, are forward-looking statements. Such forward-looking statements,
which reflect management's assumptions made on the basis of information
available to it at this time, appear in a number of places throughout this
document and include statements regarding the intentions, beliefs or current
expectations of BAE Systems plc concerning, amongst other things, its results
in relation to operations, financial condition, liquidity, prospects, growth,
commitments and targets (including environmental, social and governance
commitments and targets), strategies and the industry in which it operates.
Forward‑looking statements can be identified by the use of forward-looking
terminology such as "believes", "expects", "may", "intends", "will", "will
continue", "should", "would be", "seeks", "anticipates" or similar expressions
or the negative thereof or other variations thereof or comparable terminology.
By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future.
Forward-looking statements are not guarantees of future performance and the
actual results of operations, financial condition and liquidity of BAE Systems
plc, the development of the industry in which it operates and the ability of
BAE Systems plc to meet its commitments and targets may differ materially from
those made in or suggested by the forward-looking statements contained in this
document. In addition, even if results of operations, financial condition and
liquidity of BAE Systems plc, the development of the industry in which it
operates and/or performance against commitments and targets are consistent
with the forward-looking statements contained in this document, those results,
developments or performance may not be indicative of results, developments or
performance in subsequent periods.
These forward-looking statements speak only as of the date of this document.
Subject to the requirements of the Disclosure Guidance and Transparency Rules,
the Market Abuse Regulation or applicable law, BAE Systems plc explicitly
disclaims any intention or obligation or undertaking publicly to release the
result of any revisions to any forward-looking statements in this document
that may occur due to any change in its expectations or to reflect events or
circumstances after the date of it. All subsequent written and oral
forward-looking statements attributable to either BAE Systems plc or to
persons acting on its behalf are expressly qualified in their entirety by the
cautionary statements referred to herein and contained elsewhere in this
document.
BAE Systems plc and its directors accept no liability to third parties in
respect of this document save as would arise under English law. Accordingly,
any liability to a person who has demonstrated reliance on any untrue or
misleading statement or omission shall be determined in accordance with
Schedule 10A of the Financial Services and Markets Act 2000. It should be
noted that Schedule 10A and Section 463 of the Companies Act 2006 contain
limits on the liability of the directors of BAE Systems plc so that their
liability is solely to BAE Systems plc.
Interim management report
Half-year overview
We have continued our operational momentum and delivered a strong set of
half-year results, building on the performance of recent years. In the first
half of 2024, we have:
· continued to assist our customers in delivering urgent mission
critical capability;
· sustained strong operational performance;
· enhanced our portfolio through acquisitions focused on high-end
technologies;
· increased self-funded R&D and capital expenditure;
· secured £15.1bn of orders which, combined with £2.2bn of order
backlog acquired with SMS, has set
a record order backlog of £74.1bn; and
· delivered increased sales and underlying EBIT compared to the first
half of 2023.
The order backlog and programme incumbencies underscore our confidence in our
long-term, value-creating model. Our global presence and diverse portfolio of
products and services provide high visibility for top-line growth and cash
generation in the coming years.
Our markets
Defence spending is high across our key markets, which supports our existing
programmes and provides
a robust pipeline of opportunities across all our sectors, as we look to
support our customers in addressing the rising threat environment.
In the US, we started the year operating under Continuing Resolutions until
the fiscal year 2024 budget legislation was passed, authorising Department of
Defense appropriations of $841.4bn. Bipartisan support continues for a strong
defence posture and a National Security Supplemental of $95.3bn was passed in
April, providing further funding for our combat vehicle and ammunition
programmes predominantly for Ukraine and other international support.
Turning to 2025, per the Fiscal Responsibility Act budget caps, the
President's 2025 Budget Request provides only 1% growth for defence spending
at $849.8bn. Reaching consensus, prior to the fiscal year start on 1 October,
will be challenged by its delayed release and the upcoming presidential and
congressional elections in November. Whilst the top line is constrained, the
budget is once again rooted
in the US National Defense Strategy and US National Intelligence Strategy, and
we remain well aligned to these strategic priorities to address the rising
threats. This alignment is further enhanced with the addition of our SMS
business this year.
In the UK, as expected, the new UK Government has announced a Strategic
Defence Review (SDR), due
to report in the first half of 2025. This review will consult widely and is
intended to consider the current capabilities and resources of the UK Armed
Forces against the threats the UK faces and to make recommendations on the
future defence plan. The SDR will also consider when the UK might reach
defence spending of 2.5% GDP. It is clear that the UK Government sees the
defence industry as a key contributor to economic growth, calling it a
"cornerstone of a new industrial strategy".
In our UK business, growth is grounded on key long-term contract programmes
including Dreadnought, AUKUS, Type 26 frigates, Typhoon support and upgrade
and our 15 year munitions partnering agreement.
In Europe, defence is increasing as a priority and government spending
continues to rise in line with firm commitments. For NATO members, this has
seen the majority of members' defence budgets rising in line with their pledge
to achieve a minimum of 2% GDP to provide enough resources to restock and
build back military capability.
Australia continues to spend c.2% of its GDP on defence with a significant
commitment to fund equipment procurement. The "National Defence Strategy" sets
out how Australia will focus on meeting the challenge posed by an expansionist
China. It plans to do this by deepening security ties with its key partner,
the US, its regional allies and the UK through strategically important
programmes such as AUKUS, as one example. In order to grow resilience in its
sovereign defence industry, the Commonwealth also published its "Defence
Industry Development Plan". This sets out how government and industry will
work more closely on co-development, co-production and co-sustainment of
defence equipment and capability. The Plan further sets out how the
Commonwealth will provide more support to defence exports and to grow the role
of Australian suppliers in the global defence supply chain through an expanded
"Global Supply Chain Program".
Strategic progress
The Australian Government's selection of BAE Systems and ASC Pty Ltd to build
Australia's new fleet of nuclear powered submarines is the latest significant
development in the AUKUS trilateral security pact between Australia, the UK
and the US. Under the AUKUS agreement, Australia and the UK will operate a
common submarine of the future, incorporating technology from all three
nations, based on the UK's next-generation design. We will now combine our
complementary skills, expertise and capabilities with ASC Pty Ltd under a
collaborative arrangement in Australia, ultimately leading to the
establishment of an incorporated joint venture.
We continue to make progress on GCAP following the treaty between the UK,
Japan and Italy. As the UK's national lead on the programme, we have begun to
establish a pathway for sharing knowledge and technology between the nations.
This partnership will foster innovation and technological advancements, as
well as safeguarding the future of our national combat air industry. A new
concept model of the next-generation combat aircraft, being developed by GCAP,
was unveiled at the Farnborough International Airshow in July. This will be
known as Tempest in the UK.
On 16 February, we completed the acquisition of Ball Aerospace and renamed the
business Space & Mission Systems (SMS). The SMS business is reported in
our Electronic Systems sector. The integration programme is underway and the
business has secured a number of key contracts in the first half of the year.
There were successful launches of multiple satellites with BAE Systems-built
instruments: MethaneSAT will provide reliable scientific data about the
sources and scale of methane emissions globally to help drive reductions in
the future; and the Weather System Follow-on - Microwave (WSF-M) satellite
will bridge critical gaps in current space-based environmental monitoring
capabilities for the US Space Force. We have established synergy work streams
to identify the most promising areas for technology collaboration, new
business partnerships and opportunities for collaboration on existing
platforms. Whilst still early in the process, there are many long-term
strategic opportunities to secure.
Operational performance
Overall operational performance was strong across all Sectors in the first
half of the year. Some of the notable milestones achieved include:
· ramp up of CV90 production in our Swedish combat vehicle business;
· further deliveries of two Typhoon aircraft to Qatar - with 20 now in
service;
· our Eagle Passive Active Warning Survivability System successfully
completed initial operational test and evaluation;
· SMS saw the launch of MethaneSAT, a programme the team has been
working on for many years;
· official naming of the Sixth Astute class submarine, Agamemnon; and
· Hunter Class Frigate Programme entered the construction phase with
the official steel cut ceremony on the first ship.
Our government customers have provided a significant amount of BAE Systems
produced equipment to Ukraine and we remain closely engaged with our customers
to provide effective ongoing support, including through a new contract with
the UK Ministry of Defence to maintain and repair gifted L119 Light Guns in
Ukraine.
Evolving the business for long-term growth
Our focus on technology continues to be aligned with the national defence
strategies of our major markets as our customers address the evolving global
threat environment. We expect self-funded R&D to rise with investments in
high-technology areas - including electronic warfare, autonomy, laser-guided
weapons, counter UAS, synthetic training, electrification applications and
space solutions.
In support of our growth outlook and to help meet our customer aspirations, we
are investing in our people, facilities and technology. In the UK, we have
made progress against our 2024 target to recruit 2,700 graduates and
apprentices.
Capital expenditure is expected to rise compared to 2023 - focused on
maritime, munitions and our Swedish combat vehicle production capacity and
capabilities. These investments are all included within our rolling three-year
cash guidance.
Alongside our organic technology investment strategy, we also continue to
evolve our portfolio with a focus on high-end technologies which we believe
will be highly relevant and will drive higher growth. In the first half of the
year, we have:
· completed the acquisition of Ball Aerospace and formed our SMS
business in the US, significantly enhancing our presence in the growing space
market;
· completed the acquisitions of Malloy Aeronautics Ltd and Callen-Lenz
Associates Ltd in the UK to significantly strengthen our capabilities in UAS.
These two businesses will sit within FalconWorks(®), our Air sector
technology hub; and
· reduced our stake in Air Astana.
2024 half-year financial performance
We have delivered a strong set of half-year financial results which underpins
confidence in our upgraded guidance for the full year.
On a constant currency basis, sales growth was 13% with all sectors delivering
sales growth in the first half and including the benefit from the acquisition
of the SMS business in February.
Revenue growth in the first half of the year was up 13% on a reported currency
basis, reflective of the same drivers behind the increase in sales for the
period, excluding the performance of MBDA and other equity accounted
investments.
Underlying EBIT was up 13% to £1,393m, and underlying earnings per share was
up 7% to 31.4p, both on a constant currency basis. This was driven by the
acquisition of the SMS business alongside strong programme execution across
the portfolio.
Operating profit increased 5% to £1,296m on a reported currency basis. The
growth in underlying EBIT was offset by the increase in amortisation of
acquired intangibles in the period.
Growth of 7%, on a constant currency basis, in underlying EPS is after the
increase in underlying net finance costs, incurred primarily as a result of
the $4.8bn (£3.8bn) debt finance raised in March, and the increased tax rate.
We closed the half-year with a strong balance sheet, featuring a cash position
of £2.8bn, net debt (excluding lease liabilities) of £6.1bn, following the
$4.8bn (£3.8bn) of debt financing raised in March, and a net pension position
in an accounting surplus of £0.6bn.
We have a record order backlog of £74.1bn, after order intake of £15.1bn and
the acquisition of £2.2bn of order backlog from the SMS business in the first
half of the year. Details of other awards in the period are included in the
segmental reviews on pages 14 to 24. Significant orders in the period
included:
· a £4.6bn contract in Australia to deliver three frigates under Batch
1 of the Hunter Class Frigate Programme;
· combat vehicle orders for CV90 in excess of £0.8bn in our Hägglunds
business, including a contract with the Swedish Government to provide
new-build CV90s to replenish the Swedish Army's fleet; and
· multiple domestic and export orders in MBDA, including enhancements
to Italian air defence systems.
Our Environmental, Social and Governance (ESG) agenda
Global events have demonstrated the need for strong defence and security in
the face of aggression by nation states. At BAE Systems, we provide critical
capabilities and support to our government customers and their allies to
fulfil their primary obligations to keep citizens safe, as well as providing
important economic and social contributions through the provision of
sustainable high-quality jobs.
In 2024, we are driving sustainability actions to deliver on our business
priorities and continue to monitor performance through benchmarking,
regulatory screening and engagement. We are making good progress around our
work stream of building climate resilience. In the UK, our renewable energy
strategy is now in place to deliver 100% renewable electricity by 2030. In
support of creating opportunities for our people and communities, we now have
a record number of apprentices, graduates and undergraduates in the business.
Our business foundations are built on maintaining rigorous standards of
governance and assurance and, in 2024, we have refreshed our Code of Conduct
and further deployed our responsible supplier principles. These strong
foundations of business conduct are vital to deliver the wider business
objectives of continued success through partnering, collaboration and
innovation with suppliers, customers and research institutes.
Outlook
We have strong visibility to deliver on our value compounding model and our
half-year results underpin that confidence. We see significant potential in
the years ahead due to:
· our continued focus on operational excellence underpinned by a robust
operating model;
· continued investment in the business to support future growth;
· a large order backlog providing the foundation for growth over the
medium term;
· leading technology solutions for our customers;
· the strength of our diversity across geographies and technology;
· our global opportunity pipeline to further enhance growth;
· scope to drive further margin expansion; and
· our strong balance sheet with good cash generation, supporting
value-enhancing capital allocation.
Group financial review
Group income statement
As defined by Group(1) As derived from IFRS
Six months ended Six months ended Six months Six months ended
30 June 2024 30 June 2023 ended 30 June 2023
£m £m 30 June 2024 £m
£m
Sales 13,399 12,018 Revenue 12,477 10,997
Return on sales 10.4% 10.5% Return on revenue 10.4% 11.2%
Underlying EBIT 1,393 1,258 Operating profit 1,296 1,233
Underlying net finance costs (180) (111) Net finance costs (133) (35)
Underlying tax expense (225) (206) Tax expense (175) (193)
Underlying profit for the period 988 941 Profit for the period 988 1,005
Attributable to: Attributable to:
Equity shareholders 948 901 Equity shareholders 948 965
Non-controlling interests 40 40 Non-controlling interests 40 40
1. The purposes and definitions of non-GAAP measures are provided in the
Alternative performance measures section on page 46.
2. Current period compared with prior period translated at current period
exchange rates. The comparatives have not been restated.
As defined by Group
Sales for the period were £13.4bn (2023 £12.0bn) representing growth, on a
constant currency basis(2), of 13% with all sectors delivering growth in the
period. The growth includes the effect of the SMS acquisition from February.
Electronic Systems recorded sales of £3.4bn (2023 £2.6bn), equating to
growth of 34% on a constant currency basis. This was driven by the acquisition
of the SMS business and organic growth of 11% in the underlying business, led
by the precision strike & sensing and commercial avionics businesses.
Our Platforms & Services sector posted sales of £2.1bn (2023 £1.9bn),
with growth of 13% on a constant currency basis, driven by increased vehicle
production in our Hägglunds and Combat Mission Systems businesses.
Our Air sector recorded sales of £4.0bn (2023 £3.8bn), representing growth
of 7% on a constant currency basis. The sector saw increased activity on
support programmes and MBDA. This was offset by a reduced contribution from
the Qatar Typhoon programme as deliveries complete.
Maritime recorded sales of £2.9bn (2023 £2.6bn), which was an increase of
14% on a constant currency basis, primarily due to increased activity on the
Hunter Class Frigate Programme.
Sales in the Cyber & Intelligence sector increased by 4% on a constant
currency basis, to £1.2bn
(2023 £1.2bn).
Underlying EBIT was up 13%, on a constant currency basis, to £1,393m (2023
£1,258m).
Our Electronic Systems sector grew underlying EBIT to £473m (2023 £391m), an
increase of 24% on a constant currency basis. The growth in underlying EBIT
reflected the acquisition of SMS and organic growth in the underlying
business. As anticipated, the lower return on sales of 14.0% (2023 15.1%)
reflected the impact of the SMS acquisition and the anticipated absorption of
lower pension recoveries (FAS/CAS).
Platforms & Services reported underlying EBIT of £216m (2023 £172m), an
increase of 29% on a constant currency basis, with the return on sales
increasing to 10.4% (2023 9.1%). The growth reflected the strong operational
performance in our Hägglunds and Combat Mission Systems businesses.
Our Air sector reported underlying EBIT of £446m (2023 £454m), a return on
sales of 11.1% (2023 12.0%). This reflected good operational performance, with
the comparative period benefitting from risk retirement.
The Maritime sector reported underlying EBIT of £228m (2023 £193m) in line
with the growth in sales, generating a return on sales of 7.8% (2023 7.4%).
Reconciliation of underlying EBIT to operating profit Six months Six months
ended ended
30 June
2024 30 June
£m
2023
£m
Underlying EBIT 1,393 1,258
Adjusting items 46 48
Amortisation of programme, customer-related and other intangible assets and (143)
impairment of intangibles
(56)
Net finance income of equity accounted investments 26 2
Tax expense of equity accounted investments (26) (19)
Operating profit 1,296 1,233
Adjusting items totalled a net gain of £46m (2023 £48m). During the period,
the Group realised a profit on the sale of its partial shareholding in Air
Astana of £75m and recognised a settlement gain of £13m on a US pension
buy-out. This was offset by £42m of acquisition-related costs, primarily in
relation to Ball Aerospace. The comparative period comprised a settlement gain
on a US pension annuity buy-out of £51m, offset by charges relating to
historical acquisitions and disposals of £3m.
Amortisation of programme, customer-related and other intangible assets and
impairment of intangibles resulted in a charge of £143m (2023 £56m), with
£86m relating to amortisation of intangibles acquired with the SMS business.
Underlying net finance costs were £180m (2023 £111m), an increase of £69m
largely reflecting the additional interest expense on the $4.8bn (£3.8bn) of
debt financing raised during the period, of which $4.0bn (£3.2bn) was used to
fund the Ball Aerospace acquisition.
Underlying tax expense of £225m (2023 £206m) was an increase of £19m,
reflecting the higher underlying pre-tax profits and a marginal increase in
the underlying effective tax rate to 19%
(2023 18%).
As derived from IFRS
Revenue was £12.5bn (2023 £11.0bn), with growth during the period of 13% on
a reported currency basis, reflective of the same drivers behind the increase
in sales for the period.
Operating profit increased 5% to £1,296m (2023 £1,233m), on a reported
currency basis. On an operating sector basis, this reflected the same drivers
as the growth in underlying EBIT. This growth was offset by adjusting items
and amortisation of programme, customer-related and other intangible assets,
details of which are provided in the sections above.
Net finance costs were £133m (2023 £35m), an increase of £98m also as a
result of additional interest costs incurred from the $4.8bn (£3.8bn) of debt
financing raised during the period.
Tax expense of £175m (2023 £193m) was a decrease of £18m and reflects an
effective tax rate
of 15% (2023 16%), which excludes the Group's share of tax expense in our
equity accounted investments after which the effective tax rate was 17% (2023
17%).
Earnings per share (EPS)
As defined by Group(1) Six months ended Six months
30 June
ended
2024
30 June
2023
Underlying profit for the period attributable to equity shareholders £948m £901m
Underlying EPS - basic 31.4p 29.6p
As derived from IFRS Six months ended Six months
30 June
ended
2024
30 June
2023
Profit for the period attributable to equity shareholders £948m £965m
EPS - basic 31.4p 31.8p
1. The purposes and definitions of non-GAAP measures are provided in
the Alternative performance measures section on page 46.
2. Current period compared with prior period translated at current
period exchange rates. The comparatives have not been restated.
As defined by Group
Underlying EPS - basic increased to 31.4p (2023 29.6p), 7% on a constant
currency basis(2). This is largely driven by the improved underlying profit
for the period as a result of the strong operational performance across the
portfolio and the acquisition of the SMS business in February.
As derived from IFRS
EPS - basic decreased 1% to 31.4p (2023 31.8p) with the gain in underlying
profit being offset by amortisation on the intangibles acquired with SMS in
the period.
Cash flow
As defined by Group(1) Six months Six months
ended
ended
30 June
30 June
2024
2023
£m £m
Free cash flow 219 1,070
Operating business cash flow 474 1,307
As derived from IFRS Six months Six months
ended
ended
30 June
30 June
2024
2023
£m £m
Net cash flow from operating activities 757 1,484
Net cash flow from investing activities (4,569) (129)
Net cash flow from financing activities 2,583 (1,200)
Net (decrease)/increase in cash and cash equivalents (1,229) 155
Cash and cash equivalents at 1 January 4,067 3,107
Effect of foreign exchange rate changes on cash and cash equivalents (7) (58)
Cash and cash equivalents at 30 June 2,831 3,204
1. The purposes and definitions of non-GAAP measures are provided in the
Alternative performance measures section on page 46.
As defined by Group
Free cash flow of £219m (2023 £1,070m) was a decrease of £851m on the prior
period.
Operating business cash flow of £474m (2023 £1,307m) was a decrease of
£833m on the prior period.
Both reflect the decrease in customer advances as reflected in net cash flow
from operating activities described below.
As derived from IFRS
Net cash flow from operating activities was an inflow of £757m (2023
£1,484m), a decrease of £727m on the prior period. Although the Group saw
increased profitability in the six months to 30 June 2024, the comparative
period included a high level of customer advances in the Air and Platforms
& Services sectors, reflecting timing of orders and the significant order
intake.
Net cash flow from investing activities was an outflow of £4,569m (2023
£129m). The acquisition of subsidiaries, including Ball Aerospace, has
accounted for a net cash outflow of £4,536m. This is offset by cash proceeds
of £166m from the partial sale of the Group's shareholding in Air Astana.
There was no significant M&A activity in the comparative period.
Net cash flow from financing activities was an inflow of £2,583m (2023
outflow of £1,200m). Cash returns to shareholders, through dividend and share
repurchases, of £812m (2023 £884m) were offset by the net proceeds from debt
financing raised in the period of £3,765m primarily to fund the Ball
Aerospace acquisition (2023 £166m net cash inflow from a US private placement
to fund the modern shiplift and land-level repair complex at our Jacksonville,
Florida shipyard in the Platforms & Services sector).
The net cash outflow in respect of derivative financial instruments was £25m
(2023 £182m), reflective of hedging against foreign exchange movements on the
US dollar-denominated borrowings.
Foreign exchange translation primarily arises in respect of the Group's US
dollar-denominated cash holdings.
Net debt (excluding lease liabilities)
Components of net debt (excluding lease liabilities) As at As at
30 June 31 December
2024
2023
£m
£m
Cash and cash equivalents 2,831 4,067
Debt-related derivative financial instruments (net) 53 22
Loans - non-current (8,234) (4,432)
Loans - current (738) (679)
Net debt (excluding lease liabilities)(1) (6,088) (1,022)
1. The purposes and definitions of non-GAAP measures are provided in
the Alternative performance measures section on page 46.
Cash and cash equivalents of £2,831m (2023 £4,067m) are held primarily for
management of working capital as well as the repayment of debt securities,
pension funding when required and committed shareholder returns. During the
period, the Group cash-settled $1.5bn (£1.2bn) of the $5.5bn (£4.4bn)
consideration for Ball Aerospace, with the balance funded from debt raised
during the period.
The Group's net debt (excluding lease liabilities) at 30 June was £6,088m (31
December 2023 £1,022m), a net increase of £5,066m from the position at the
start of the year. This was primarily as a result of additional debt raised
during the period of £3,765m, the majority of which has been used to fund the
Ball Aerospace acquisition.
Other movements in net debt (excluding lease liabilities) comprised the
following:
Shareholder returns of £812m (2023 £884m) reflected dividends of £562m
(2023 £508m) and share repurchases of £250m (2023 £376m). Dividends paid
represented the 2023 final dividend (2023 represented the 2022 final
dividend). During the period to 30 June 2024, we repurchased 19,403,928 shares
under the 2022 share buyback programme (2023 40,460,554).
Other movements included foreign exchange on the Group's US dollar-denominated
cash and borrowings, offset by their associated derivatives, and dividends
paid to non-controlling interests.
Exchange rates
Average Period end Year end
Six months Six months ended 30 June 30 June 31 December
ended
30 June
2024
2023
2023
30 June
2023
2024
£/$ 1.265 1.233 1.264 1.271 1.275
£/€ 1.170 1.141 1.180 1.165 1.154
£/A$ 1.921 1.826 1.893 1.910 1.868
Segmental review
The Group reports its performance through six reporting segments.
As defined by Group(1)
Sales Underlying EBIT Return Operating business cash flow(3) Order Order
£m
£m
on sales
£m
% intake backlog
£bn £bn
Six months ended 30 June 2024
Electronic Systems 3,383 473 14.0% 184 3.2 11.6
Platforms & Services 2,085 216 10.4% (13) 2.8 12.2
Air 4,009 446 11.1% 724 2.3 25.4
Maritime 2,929 228 7.8% (247) 5.7 24.0
Cyber & Intelligence 1,182 101 8.5% 16 1.2 1.9
HQ(2) 85 (71) - (190) 0.1 -
Deduct Intra-group (274) - - - (0.2) (1.0)
Total 13,399 1,393 10.4% 474 15.1 74.1
As derived from IFRS
Revenue Operating profit Return on revenue Net cash flow from operating activities Order
£m
£m
%
£m
book
£bn
Six months ended 30 June 2024
Electronic Systems 3,394 301 8.9% 264 8.2
Platforms & Services 2,061 215 10.4% 83 11.7
Air 3,252 456 14.0% 697 16.3
Maritime 2,845 226 7.9% (91) 23.1
Cyber & Intelligence 1,182 97 8.2% 40 1.3
HQ(2) 5 1 - (156) -
Deduct Intra-group (262) - - - (1.0)
Deduct Tax(4) - - - (80) -
Total 12,477 1,296 10.4% 757 59.6
1. The purposes and definitions of non-GAAP measures are provided in the
Alternative performance measures section on page 46.
2. HQ comprises the Group's head office activities, together with a 17%
interest in Air Astana as at 30 June 2024.
3. At a Group level, the key cash flow metric is free cash flow (see
Alternative performance measures section on page 46). In 2024, free cash flow
was £219m (2023 £1,070m).
4. Tax is managed on a Group-wide basis.
Segmental performance: Electronic Systems
Electronic Systems, with 22,600(1) employees, comprises the Group's US- and
UK-based electronic solutions business and the US-based Space & Mission
Systems business. The teams deliver electronic warfare systems, navigation
systems, electro-optical sensors, military and commercial digital engine and
flight controls, precision guidance and seeker solutions, next-generation
military communications systems and data links, persistent surveillance
capabilities, electric drive propulsion systems, as well as space electronics,
spacecraft and ground systems.
Financial performance
Financial performance measures derived by Group(2) Financial performance measures derived from IFRS
Six months Six months Six months Six months
ended
ended
ended
ended
30 June
30 June
30 June
30 June
2024
2023
2024
2023
Sales £3,383m £2,583m Revenue £3,394m £2,583m
Underlying EBIT £473m £391m Operating profit £301m £386m
Return on sales 14.0% 15.1% Return on revenue 8.9% 14.9%
Operating business cash flow £184m £157m Cash flow from operating activities £264m £225m
Order intake £3.2bn £3.1bn
As at 30 June As at 31 December 2023 As at 30 June As at 31 December 2023
2024 2024
Order backlog £11.6bn £8.9bn Order book £8.2bn £7.6bn
- Sales of £3.4bn reflected an increase of 34%(3), driven by the
acquisition of the SMS business and organic growth of 11% in the underlying
business which was led by the precision strike & sensing and commercial
avionics businesses.
- Underlying EBIT grew 24%(3), generating a return on sales of 14.0%.
The growth in underlying EBIT reflects the acquisition of SMS and the organic
growth in the underlying business. As expected, the lower return on sales
reflected the impact of the SMS acquisition and the anticipated absorption of
lower pension recoveries during the period (FAS/CAS).
- Operating profit was down 22%, resulting in a return on revenue of
8.9%, as the growth in underlying EBIT from SMS was offset by
acquisition-related costs and amortisation on the acquired intangibles.
- Order intake of £3.2bn includes orders of £0.7bn awarded to the SMS
business during the period. Order backlog of £11.6bn includes £2.2bn of
order book acquired with SMS in February.
1. Including share of equity accounted investments.
2. The purposes and definitions of non-GAAP measures are provided in
the Alternative performance measures section on page 46.
3. Constant currency basis.
Operational performance
We continued to experience strong demand across our customer base for
Electronic Systems in the first half of the year as evidenced by our order
generation. We supported existing customers on key electronic warfare and
precision guided-munition programmes, while pursuing and maturing new
opportunities.
On 16 February 2024, we completed the Ball Aerospace acquisition to form our
SMS business, which delivers a range of products and differentiated
technologies for civil, commercial, and defence applications, including
world-class instruments, spacecraft, tactical hardware, ground systems, data
exploitation solutions and mission-enabling technologies for the US
Intelligence Community, Department of Defense, and civilian space markets. In
SMS, the integration remains a top priority and is progressing at pace, as the
team is on track to separate from the Transition Services Agreements with Ball
Corporation before year-end.
In our commercial businesses, airline traffic has returned to pre-pandemic
levels, generating stronger demand for aftermarket services. However,
headwinds exist in Original Equipment Manufacturer demand schedules as
airframe manufacturers address supply chain issues. Clean air regulations
continue to drive the transportation industry towards alternative energy
sources, like our propulsion solutions and energy storage and power management
developments for more-electric and hybrid-electric aircraft.
Operational highlights
· We are under contract to deliver seven Network Tactical Common
Datalink production systems to support US Navy requirements for real time
intelligence, surveillance, reconnaissance, and command and control. After
completing the development programme phase in 2023, we have successfully
delivered our first system to the US Navy for installation on one of its
aircraft carriers.
· The Compass Call programme is executing contracts, inclusive of
international support. Valued at more than $1bn (£0.8bn) focused on the
cross-decking of prime mission equipment to the new EA-37B aircraft, while
sustaining and upgrading the existing EC-130H fleet. The next-generation
system evolves the US Air Force's electromagnetic attack capabilities and is
targeted to initially field in 2024.
· The F-35 Lightning II programme is delivering on Lot 16 electronic
warfare (EW) systems and has delivered a cumulative total of over 1,400 EW
systems.
· The Eagle Passive Active Warning Survivability System successfully
completed initial operational test and evaluation in the first half of 2024.
· The APKWS(®) laser-guidance kit programme continues to execute
production under an Indefinite Delivery, Indefinite Quantity contract with
more than 7,300 units shipped in the first half of the year.
· Our SMS team marked the launches of satellites with our systems on
board, including MethaneSAT that will provide reliable scientific data about
the sources and scale of methane emissions globally, and the Weather System
Follow-on - Microwave (WSF-M) satellite that will bridge critical gaps in
current space-based environmental monitoring capabilities for the US Space
Force.
Strategic and order highlights
· Our Dual Band Decoy team was selected by the US Navy to develop one
of the most advanced radio frequency (RF) countermeasures in the world. The
cutting-edge RF self-protection jammer will initially be fielded on the US
Navy's F/A-18E/F Super Hornet.
· Following a rapid-response contract and demonstration in 2021 with
the US Navy, our Advanced Survivability Pod team received an engineering and
manufacturing development (EMD) contract from the US Navy worth $95m (£75m)
for advanced countermeasure pods to protect the P-8A Poseidon Multi-Mission
Maritime Aircraft from missiles and other threats. This award builds on our
platform survivability portfolio that uses the full electromagnetic spectrum
to detect, exploit, and counter advanced threats.
· We have signed a memorandum of understanding with Eaton to expand
collaboration and deliver electric drive solutions for heavy-duty commercial
vehicles. In addition, we signed a long-term partnership agreement with bus
manufacturer, GILLIG, supplying our electric drive technology to power
GILLIG's new hydrogen fuel cell transit buses, enabling emissions-free
operations.
· After receiving two new contracts in May on the National Oceanic and
Atmospheric Administration's (NOAA) Geostationary Extended Observations
(GeoXO) satellite constellation, we are now contracted to build all three
hyperspectral instruments for the mission, including the Ocean Color
Instrument, the Atmospheric Composition Instrument, and the GeoXO Sounder
awarded in September 2023. The three GeoXO contracts total approximately
$1.3bn (£1.0bn) and are scheduled to launch in the early 2030s, as NOAA's
current geostationary weather satellites near the end of their planned
mission.
Looking forward
· Our Electronic Systems sector remains positioned for growth in the
medium term. We maintain a diverse portfolio of defence and commercial
products and capabilities for US and international customers and expect to
benefit from applying innovative technology solutions to defence customers'
existing and changing requirements, building on our significant roles on
F-35 Lightning II, F-15 upgrades, M-Code GPS upgrades and classified
programmes, as well as a number of precision weapon products.
· Over the long term, we are poised to build on our technology
strengths in emerging areas of demand, including precision weaponry, space
resilience, hyper-velocity projectiles, autonomous platforms, and the
development of multi-domain capabilities.
· In our commercial portfolio, we continue to leverage our leading
electric drive propulsion capabilities to address growing demand for low and
zero emission solutions across an increasing number of civil platforms, with
opportunities to migrate these technologies to defence applications.
· In SMS, we continue to secure new awards and grow our strong space
portfolio in alignment with the priorities identified in the US National
Defense Strategy and the US Intelligence Strategy. We are also taking steps to
capture new opportunities and unlock synergies in collaboration with our other
business segments.
Segmental performance: Platforms & Services
Platforms & Services, with 11,900(1) employees, with operations in the US,
Sweden and UK, manufactures and upgrades combat vehicles, weapons and
munitions, and delivers services and sustainment activities, including naval
ship repair and the management and operation of two government-owned
ammunition plants.
Financial performance
Financial performance measures derived by Group(2) Financial performance measures derived from IFRS
Six months Six months Six months Six months
ended
ended
ended
ended
30 June
30 June
30 June
30 June
2024
2023
2024
2023
Sales £2,085m £1,891m Revenue £2,061m £1,864m
Underlying EBIT £216m £172m Operating profit £215m £172m
Return on sales 10.4% 9.1% Return on revenue 10.4% 9.2%
Operating business cash flow £(13)m £21m Cash flow from operating activities £83m £95m
Order intake £2.8bn £4.1bn
As at 30 June As at 31 December 2023 As at 30 June As at 31 December 2023
2024 2024
Order backlog £12.2bn £11.5bn Order book £11.7bn £11.1bn
- Sales were £2.1bn, an increase of 13%(3) driven by increased vehicle
production in our Hägglunds and Combat Mission Systems businesses.
- Underlying EBIT grew 29%(3), reflecting a return on sales of 10.4%,
following a period of strong operational performance.
- Order intake was £2.8bn for the period, reflecting continued demand
for AMPVs and CV90s. The comparative period saw significant demand for combat
vehicles and included a number of large awards including the Czech Republic
award for 246 CV90s worth $2.2bn (£1.8bn).
1. Including share of equity accounted investments.
2. The purposes and definitions of non-GAAP measures are provided in
the Alternative performance measures section on page 46.
3. Constant currency basis.
Operational performance
Our customers continue to prioritise defence spending to enhance and replenish
capabilities and manage sustainment of their defence materiel as ongoing
global uncertainty and conflicts continue. Our business remains focused on
meeting growing customer demand for our products and services, including
munitions, tracked combat vehicles, artillery systems and support services.
In the US, our Combat Mission Systems team continues to produce at heightened
volumes across multiple combat vehicle and naval programmes. This work is
carried out across our manufacturing network, with support from our
engineering teams across the US. Our ongoing production expansion efforts
continue, with investment in advanced manufacturing technologies to ensure we
are able to deliver at the pace our customers need. This includes investment
in robotic welding capability, test and integration, paint, and high-precision
machining.
Our BAE Systems Hägglunds team is growing its order backlog with additional
awards for our CV90 combat vehicles for Sweden and partner nations. Ongoing
builds and upgrades continue for the current fleet of CV90s for a number of
nations.
In our support services operations, modernisation and maintenance activities
continue in our US shipyards for the US Navy's non-nuclear fleet. We are also
working with the US Government to finalise its first significant order under a
new 10-year contract for the US Army's Holston Army Ammunition Plant and we
continue to operate and modernise the Radford Army Ammunition Plant under
contract into 2026.
Operational highlights
· Our US Army customer continues to grow its fleet of AMPVs, which we
are now delivering in five variants. In addition, the AMPV team designed and
integrated a new universal top plate for the vehicle, which provides
flexibility to quickly integrate new mission equipment based on an assigned
role. The US Marine Corps is also growing its fleet of ACVs, which had its
first successful operational deployment in the first half.
· Our Hägglunds team is expanding production and delivery capabilities
by investing more than $200m (£160m) in advanced manufacturing capabilities,
a new customer test and acceptance centre and office space.
· We continue to progress a modern shiplift and land-level repair
complex at our Jacksonville, Florida, shipyard that is expected to be
operational in early 2025. While recent developments show US Navy ship repair
requirements are stabilising, we have continued to operate at a scaled-back
level at our San Diego shipyard in response to reduced demand for
Pacific-coast ship repair services.
Strategic and order highlights
· Our Hägglunds business received a new order for CV9035 MkIIIC
vehicles, as well as associated integrated logistic support for the Swedish
Army. In addition, the Swedish Government signed a framework agreement with
Denmark to deliver new CV90s for the Danish Army and Sweden is procuring more
new-build CV90 vehicles to expand Ukraine capabilities. The new contract will
provide the opportunity for other nations to join in the procurement of CV90
MkIIICs.
· We secured a $754m (£596m) Year 2 order from the US Army for AMPV,
as the programme entered into full-rate production.
· Our Combat Mission Systems team also secured a five-year contract,
valued up to $318m (£251m), from the US Army to perform technical and
sustainment support services for its fleet of M109A6 and A7 Self-Propelled
Howitzers and their companion, M992A3 carrier, ammunition, tracked vehicles.
· The US Navy awarded our Norfolk Ship Repair yard an $87m (£69m)
contract for repair work aboard the dock landing ship USS Carter Hall (LSD
50).
· In March, our Hägglunds business signed a framework agreement with
the Danish Ministry of Defence Acquisition and Logistics Organisation to
provide repair and maintenance services for the Danish Army's CV90s over a
15-year period, worth approximately $355m (£281m) including options.
Hägglunds also received a contract from Denmark for the Mid-Life Upgrade of
44 CV9035 vehicles at a value of $300m (£237m).
· The UK Ministry of Defence has awarded a contract to our Weapon
Systems UK business to provide Maintenance, Repair and Overhaul (MRO) services
in Ukraine for the L119 gun through a partnership with a British maintenance
specialist already delivering MRO services in the country.
Looking forward
· We continue to focus on increased long-term demand from US and
international customers. We remain a critical provider of US Army combat
vehicles with our current franchises of AMPV, M109A7, M88 and additional
Bradley infantry fighting vehicles and are experiencing increased
international interest in these products.
· In Sweden, we have an ongoing pipeline of future business
opportunities for the CV90 and BvS10 from our Hägglunds business, as well as
for artillery systems and munitions from our Bofors business.
· We continue to manage and operate the US Army's Radford and Holston
ammunition plants and remain focused on key modernisation activities.
· We are maintaining our strong positions on naval guns, missile launch
programmes and submarine programmes, as well as US Navy ship repair and
modernisation activities where the business has invested in capitalised
infrastructure and facilities in key home ports.
Segmental performance: Air
Air, with 26,700(1) employees, comprises the Group's UK‑based air build and
support activities for European and international markets, US programmes,
development of our Future Combat Air Systems and FalconWorks(®), alongside
our business in the Kingdom of Saudi Arabia and interests in our European
joint ventures: Eurofighter and MBDA.
Financial performance
Financial performance measures derived by Group(2) Financial performance measures derived from IFRS
Six months Six months Six months Six months
ended
ended
ended
ended
30 June
30 June
30 June
30 June
2024
2023
2024
2023
Sales £4,009m £3,786m Revenue £3,252m £3,054m
Underlying EBIT £446m £454m Operating profit £456m £456m
Return on sales 11.1% 12.0% Return on revenue 14.0% 14.9%
Operating business cash flow £724m £1,330m Cash flow from operating activities £697m £1,307m
Order intake £2.3bn £8.4bn
As at 30 June As at 31 December 2023 As at 30 June As at 31 December 2023
2024 2024
Order backlog £25.4bn £27.2bn Order book £16.3bn £18.5bn
- Sales were £4.0bn, an increase of 7%(3) reflecting increasing
activity on support programmes and MBDA. This is offset by a reduced
contribution from the Qatar Typhoon programme as deliveries complete.
- Return on sales of 11.1% reflected good operational performance, with
the comparative period benefitting from risk retirement.
- Operating business cash flow was £0.7bn. The comparative period
reflected customer advances and down payments from the significant level of
awards in the first half of 2023 including agreement of a further five-year
Salam Typhoon support contract, valued at £3.7bn, as well as multiple awards
in MBDA across both the import and export markets.
1. Including share of equity accounted investments.
2. The purposes and definitions of non-GAAP measures are provided in
the Alternative performance measures section on page 46.
3. Constant currency basis.
Operational performance
We continue to work with our UK and international customers to support their
existing platforms and provide new enhanced capabilities. We made further
deliveries of Typhoon aircraft to Qatar. Our US Programmes division remains
focused on delivery execution across all production lines. Our Future Combat
Air and FalconWorks(®) organisations continue to invest in our people,
facilities and cutting-edge technologies.
Operational highlights
· In the Kingdom of Saudi Arabia, we have continued to deliver services
under the five-year Saudi British Defence Co-operation Programme and Salam
Programme including our support to the Royal Saudi Air Force's Tornado and
Typhoon fleets.
· Activity on our Qatar Typhoon and Hawk programmes continued with two
further Typhoon deliveries in the first half of the year - a total of 20
Typhoon aircraft are now in service with the Qatar Emiri Air Force.
· In the first half, we continued to make good progress on discussions
with our Japanese and Italian partners on GCAP. We also continued developing
the UK flying combat air demonstrator, which will test next-generation skills,
tools, processes and techniques needed to underpin GCAP and the entry into
service of the core aircraft platform, which will be called Tempest in the UK,
by 2035. At Farnborough International Airshow we unveiled a new concept model
of the next-generation combat aircraft.
· Through FalconWorks(®), our Air sector continues to invest in
promising new and innovative technologies for the future, including the
development of uncrewed systems in collaboration across industry.
Strategic and order highlights
· We have sustained production of the rear fuselage assemblies for the
F-35 at full-rate levels at our Samlesbury site in the UK, with approximately
150 aft fuselages being completed annually. We have agreed pricing with
Lockheed Martin for F-35 production lots 18/19, supporting the continuation of
Major Unit production deliveries at Samlesbury into 2027.
· On GCAP, concept and assessment work continues with our international
partners in all three nations under their respective national contracts.
· During the first half of 2024, we completed the acquisitions of
Malloy Aeronautics Ltd and Callen-Lenz Associates Ltd, strengthening the
position of the Group in the fixed wing and rotary UAS domains.
· MBDA secured significant orders in the first half of 2024, in
particular in the Air Defence domain. These include production orders for
ASTER missiles for the Italian Armed Forces, Patriot GEM-T missiles (under the
European Sky Shield Initiative via the COMLOG Joint Venture) for the NATO
Support and Procurement Agency and an expansion of Sea Ceptor with the Common
Anti-Air Module Missile to include Polish, Swedish and Kingdom of Saudi
Arabian navies.
Looking forward
· GCAP is a strategically important partnership that will foster
innovation, technological advancements and safeguard long-term industrial
capability to design, develop, manufacture and maintain combat aircraft and
the wider systems within which they will operate in the UK.
· We will continue to focus on ensuring that deliveries of Typhoon
aircraft and support are made in line with agreed customer milestones on our
existing contracts. Current Typhoon production and support sales are
underpinned by existing contracts and we continue to pursue a number of export
opportunities in Europe and the Middle East to extend production beyond the
latter part of this decade.
· We expect production of the rear fuselage assemblies for the F-35 to
be sustained at current levels. The business plays a significant role in the
F-35 sustainment programme in support of Lockheed Martin and support volumes
should increase as the number of jets in service continues to rise.
· In the Kingdom of Saudi Arabia, the In-Kingdom Industrial
Participation programme continues to make good progress consistent with our
long-term strategy, whilst supporting the Kingdom's National Transformation
Plan and Vision 2030. A demonstration of this long-term strategy and
commitment took place at the World Defense Show in Riyadh in February 2024, at
which the Royal Saudi Air Force conducted an official acceptance ceremony,
attended by key personnel from our customer and stakeholder community, for the
final in-Kingdom manufactured Hawk Aircraft.
· We expect our Saudi in-Kingdom support business to remain stable
underpinned by long-standing contracts that are anticipated to be renewed
every five years, while we continue to address the Kingdom's current and
future combat air requirements.
· Our FalconWorks(®) organisation will continue to pursue internal and
external investment opportunities which enhance our capabilities and
technologies.
· MBDA has a strong order backlog and development programmes continue
to improve the long-term capabilities of the business in air, land and sea
domains. MBDA continues to be well placed to benefit from increased defence
spending in Europe and internationally.
Segmental performance: Maritime
Maritime, with 28,500(1) employees, comprises the Group's UK‑based maritime
and land activities, including major submarine, ship build and support
programmes, as well as our Australian business.
Financial performance
Financial performance measures derived by Group(2) Financial performance measures derived from IFRS
Six months Six months Six months Six months
ended
ended
ended
ended
30 June
30 June
30 June
30 June
2024
2023
2024
2023
Sales £2,929m £2,603m Revenue £2,845m £2,541m
Underlying EBIT £228m £193m Operating profit £226m £192m
Return on sales 7.8% 7.4% Return on revenue 7.9% 7.6%
Operating business cash flow £(247)m £(79)m Cash flow from operating activities £(91)m £37m
Order intake £5.7bn £4.2bn
As at 30 June As at 31 December 2023 As at 30 June As at 31 December 2023
2024 2024
Order backlog £24.0bn £21.3bn Order book £23.1bn £20.4bn
- Sales of £2.9bn were up 14%(3), primarily due to increased activity
on the Hunter Class Frigate Programme (HCFP).
- Underlying EBIT was up 19%(3), in line with the growth in sales,
generating a return on sales of 7.8% (2023 7.4%).
- Operating business cash outflow of £247m was due to the ongoing
capital investment programmes across a number of sites including the Ship
Build Assembly Hall in Glasgow and our munitions facilities in Glascoed,
combined with timing of receipts and payments.
- Order intake of £5.7bn has pushed order backlog to £24.0bn,
primarily driven by the award of £4.6bn for Batch 1 of the HCFP.
1. Including share of equity accounted investments.
2. The purposes and definitions of non-GAAP measures are provided in
the Alternative performance measures section on page 46.
3. Constant currency basis.
Operational performance
Our major Maritime platform programmes continue to progress, with construction
of the first three Dreadnought Class submarines and the final two Astute Class
submarines continuing at Barrow-in-Furness. Construction on the first four
City Class Type 26 frigates is underway with the fifth ship currently forecast
to commence construction later this year. In Australia, the HCFP has
transitioned to the construction phase. We continue to support customer
requirements in both Munitions and Maritime Services. Ongoing investments in
our facilities and our people support this delivery and, with the future
potential of the AUKUS trilateral programme, the sector is well positioned for
growth.
Operational highlights
· We achieved a key milestone on the Astute programme with the official
naming of the sixth boat, Agamemnon, in April. The next major step for
Agamemnon is the launch which is expected later this year.
· The build of the first three of four Dreadnought Class submarines is
also well underway at our Barrow-In-Furness site in Cumbria.
· Construction is underway on the first four City Class Type 26
frigates with a focus on skilled and experienced resource availability,
including within the supply chain. The fifth ship, HMS Sheffield, is currently
forecast to commence construction later this year. The first City Class Type
26, HMS Glasgow, is progressing through the key stages of outfit, test and
commissioning, while the second ship, HMS Cardiff, is being prepared to enter
the water for the first time later this year. HMS Belfast continues steelwork
construction and unit consolidation ahead of benefiting from final
consolidation in our new Ship Build Assembly Hall in Govan, Glasgow.
· In Australia, the HCFP has six schedule protection blocks in
production and the programme successfully completed the Production Readiness
Review. We entered the construction phase and officially cut steel on the
first ship at a ceremony at the Osborne Naval Shipyard in Adelaide, South
Australia in June.
· We have made good progress on the installation of Radar 1 as part of
the JORN Phase 6 upgrade with the successful completion of Half Radar trials.
The penultimate ship of the Anzac frigate upgrade programme, HMAS Ballarat,
has returned to water.
· Our Maritime Services business has continued to support the Royal
Navy, responding quickly to ensure HMS Prince of Wales was prepared and ready
to deploy for NATO exercises in the Arctic. HMS Diamond was also activated to
deploy from Gibraltar as part of Operation Kipion.
· Investment activity continues across our Munitions business to meet
customer demand. This includes a new 155mm facility in Glascoed and an
additional machining line in Washington, Tyne & Wear.
· In RBSL, the Challenger 3 programme has delivered the first two
prototype series vehicles, with the first undergoing successful live firing
trials. The RBSL Vehicle Support Services continue to support the UK Ministry
of Defence and international customers.
Strategic and order highlights
· In Australia, the release of the Surface Combatant Review confirmed a
commitment to the production of six Hunter Class frigates, with the contract
for the first batch of three ships awarded in June. Following the cancellation
of the TransCAP element of the Anzac frigate upgrade programme, we are working
with the Commonwealth to determine the appropriate utilisation of our
Henderson facility in Western Australia.
· Following the £3.95bn contract from the UK Ministry of Defence last
year, we have made substantial progress on the SSN-AUKUS programme, reaching
key design maturity milestones. In March, as part of the AUKUS trilateral
security pact, the Australian Government announced it had selected BAE Systems
and ASC Pty Ltd to build Australia's new future fleet of nuclear powered
submarines.
· In March, former UK Prime Minister Rishi Sunak visited our
Barrow-in-Furness site to announce the publication of the Government's Defence
Nuclear Enterprise Command Paper, which sets out the critical role of the town
and BAE Systems' skilled workforce in helping to deliver the national
endeavour.
· The build of our new Ship Build Assembly Hall in Govan is maturing
according to schedule and is expected to be fully operational in 2025. The
build of our Applied Shipbuilding Academy in Scotstoun is on schedule and due
to formally open later this year, providing world-class training and
upskilling opportunities for our entire Naval Ships workforce.
Looking forward
· The outlook for our Maritime sector remains positive based on
long-term contracted positions, with a number of UK, Australian and
international opportunities.
· Our Submarines business is executing across three long-term
programmes: Astute; Dreadnought; and SSN-AUKUS. Investment continues in the
facilities at our Barrow-in-Furness shipyard in order to provide the
capabilities to deliver these long-term programmes.
· In shipbuilding, sales are underpinned by the manufacture of Type 26
frigates. In warship support, the fleet time support, upkeeps and capability
insertions across a number of vessel classes provide a sustainable business in
technical services and upgrades.
· In Australia, we are a key partner to the Commonwealth in the
delivery of its National Defence Strategy (NDS), which seeks a strategy of
denial and an integrated, focused force. AUKUS nuclear powered submarines, an
enhanced lethality surface fleet, strategic surveillance and long range strike
are prioritised in the Integrated Investment Plan which supports the NDS.
· As the UK Ministry of Defence's long-term strategic partner for
munitions supply, we continue to focus our operations in support of the UK
Ministry of Defence and the UK's NATO allies, as well as other customers.
Segmental performance: Cyber & Intelligence
Cyber & Intelligence, with 11,000(1) employees, comprises the US‑based
Intelligence & Security business and UK‑headquartered Digital
Intelligence business, and covers the Group's cyber security activities for
national security, central government and government enterprises.
Financial performance
Financial performance measures derived by Group(2) Financial performance measures derived from IFRS
Six months Six months Six months Six months
ended
ended
ended
ended
30 June
30 June
30 June
30 June
2024
2023
2024
2023
Sales £1,182m £1,157m Revenue £1,182m £1,157m
Underlying EBIT £101m £96m Operating profit £97m £88m
Return on sales 8.5% 8.3% Return on revenue 8.2% 7.6%
Operating business cash flow £16m £51m Cash flow from operating activities £40m £86m
Order intake £1.2bn £1.4bn
As at 30 June As at 31 December 2023 As at 30 June As at 31 December 2023
2024 2024
Order backlog £1.9bn £2.0bn Order book £1.3bn £1.4bn
- Sales increased by 4%(3), to £1.2bn, with the US business seeing
increased operations.
- Underlying EBIT was up 7%(3) delivering a return on sales of 8.5%.
- Order backlog has remained steady against the prior year, with a
book-to-bill(4) ratio of 1.0.
1. Including share of equity accounted investments.
2. The purposes and definitions of non-GAAP measures are provided in
the Alternative performance measures section on page 46.
3. Constant currency basis.
4. Ratio of Order intake to Sales.
Operational performance
Our Intelligence & Security business has demonstrated strong performance,
providing innovative solutions to government customers in the US Department of
Defense, federal agencies and civilian organisations. Our focus remains on
creating a robust pipeline of qualified business opportunities across our
US-based business areas, including Air & Space Force Solutions, Integrated
Defense Solutions and Intelligence Solutions.
In Digital Intelligence, we have continued to work collaboratively to collect,
connect and understand complex data for governments, nation states, armed
forces and commercial businesses in both the UK and international markets. Our
services, solutions and products span customers in Law Enforcement, National
Security, Central Government, Critical National Infrastructure,
Telecommunications, Defence and Space.
Operational highlights
· As part of the Ball Aerospace acquisition in mid-February, we
acquired Topaz Intelligence, which is now part of our Intelligence &
Security business. This acquisition expands our Modelling & Simulation
portfolio to provide data intelligence-as-a-service to drive agile decision
making for customers.
· We successfully delivered a prototype constructive simulation
solution with the goal of enhancing mission command, training and predictive
analysis capabilities from the tactical to the operational level to the US
Army Europe and Africa Command in support of its war planning exercise effort
"Austere Challenge 2024" that was conducted in March.
· In Digital Intelligence, we have made good progress in advancing or
securing positions on strategic programmes in National Security, Defence and
the Middle East.
· During the period, in collaboration with University of Portsmouth, we
launched the UK's first ever degree apprenticeship in Space Systems
Engineering.
Strategic and order highlights
· Our Intelligence Solutions business was awarded multiple contracts
with a total potential life cycle value of more than $600m (£474m).
· In February 2024, BAE Systems was notified that we were not selected
for the ISC 2.0 contract, which followed corrective action taken by the US Air
Force following an earlier sustained protest upheld by the Government
Accountability Office (GAO). Subsequently, in March 2024, we filed a protest
to this award and were notified in June 2024 that the GAO had sustained our
protest and recommended the US Air Force take additional corrective action.
The Air Force has not yet stated what corrective action it will take. Our
current ISC 1.0 contract runs through January 2025.
· Our Integrated Defense Solutions business was awarded a five-year,
$87m (£69m) contract to provide engineering and technical services for new
and legacy Mobile Deployable C5ISR systems and platforms. Under this US Naval
Air Systems Command contract, we will continue our support to a variety of
C5ISR products including small craft, transportable systems, en-route
communication systems, and intra-platform systems for US Navy, Special
Operations Forces, Homeland Security and other Department of Defense agencies.
· We secured a spot on the Federal Bureau of Investigation's ITSSS-2
BPA - the largest IT contract vehicle ever established by the FBI with
accessibility broadly within the Department of Justice and an estimated spend
of $8bn (£6bn) over the next eight years. This award is crucial to defending
and growing our work for this critical customer.
· In Digital Intelligence, we secured key renewals and extensions on
existing contracts as well as seeing the emergence of new customers across the
UK and international markets.
· In the space domain, our Digital Intelligence business has
consolidated In-Space Missions with space expertise across the Digital
Intelligence business to focus and expand capabilities in this area.
Looking forward
· Our Intelligence & Security business continues to maintain a
promising pipeline of qualified business opportunities. Despite some delays in
Department of Defense procurement decisions, we have observed an increase in
demand driven by ongoing global security threats.
· The outlook for our US Government services in Intelligence &
Security is strong, offering opportunities for mid-term growth. However,
market conditions remain highly competitive and are subject to shifts in
response to US Government priorities.
· We continue to actively expand our wargaming capabilities to new
markets and customers both domestically and internationally, enhancing our
potential for growth and diversification in the modelling, simulation and
synthetic training environment through the strong positions held by both
Bohemia Interactive Simulations and Pitch Technologies.
· In Digital Intelligence, we continue to ensure the business is
optimally placed to take advantage of favourable market conditions. Going
forward, we are looking to progress strategic engagements and campaigns with
key customers and gain accreditation for cross-domain products for the US
market.
Principal risks and uncertainties
Having considered recent geopolitical and macroeconomic events, the Group
believes the principal risks and uncertainties we face for the remainder of
the year are included in, and are therefore unchanged from, those reported in
the Annual Report 2023.
The Group's principal risks and uncertainties at 31 December 2023 were
detailed on pages 70 to 77 of the Annual Report 2023, and related to the
following areas: government customers, defence spending and terms of trade;
contract risk, execution and supply chain; international markets; cyber
security; people; safety; acquisitions; climate change and the environment;
laws and regulations; outbreak of contagious diseases; and pension funding.
Responsibility statement of the directors in respect of the half-yearly
financial report
Each of the directors (as detailed below) confirms that to the best of his/her
knowledge:
- The condensed set of financial statements has been prepared in accordance
with United Kingdom adopted International Accounting Standard 34 Interim
Financial Reporting.
- The interim management report on pages 1 to 25 includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules (DTR), being
an indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
(b) DTR 4.2.8R of the DTR, being related party transactions that have taken
place in the first six months of the current financial year and that have
materially affected the financial position or the performance of the Company
during that period; and any changes in the related party transactions
described in the last annual report that could do so.
For and on behalf of the directors:
Cressida Hogg
Chair
31 July 2024
Directors
Cressida Hogg Chair
Charles Woodburn Chief Executive
Tom Arseneault President and Chief Executive Officer of BAE Systems, Inc.
Brad Greve Chief Financial Officer
Nick Anderson Non-executive director
Crystal E. Ashby Non-executive director
Angus Cockburn Non-executive director
Dame Elizabeth Corley Non-executive director
Jane Griffiths Non-executive director
Ewan Kirk Non-executive director
Stephen Pearce Non-executive director
Nicole Piasecki Non-executive director
Lord Mark Sedwill Non-executive director
Independent review report to BAE Systems plc
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the Half-yearly Financial Report for the six months ended 30
June 2024 which comprises the Condensed consolidated income statement, the
Condensed consolidated statement of comprehensive income, the Condensed
consolidated statement of changes in equity, the Condensed consolidated
balance sheet, the Condensed consolidated cash flow statement and related
notes 1 to 13.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the Half-yearly
Financial Report for the six months ended 30 June 2024 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
Half-yearly Financial Report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this Report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the Half-yearly Financial Report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the Half-yearly Financial Report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
Company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the Half-yearly Financial Report, we are responsible for
expressing to the Company a conclusion on the condensed set of financial
statements in the Half-yearly Financial Report. Our conclusion, including our
conclusion relating to going concern, are based on procedures that are less
extensive than audit procedures, as described in the basis for conclusion
paragraph of this report.
Use of our report
This report is made solely to the Company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the Company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London
United Kingdom
31 July 2024
Condensed consolidated income statement (unaudited)
Six months ended Six months ended
30 June 2024
30 June 2023
Note £m Total £m Total
£m
£m
Continuing operations
Revenue 2 12,477 10,997
Operating costs (11,418) (9,926)
Other income 159 102
Share of results of equity accounted investments 78 60
Operating profit 2 1,296 1,233
Finance income 69 69
Finance costs (202) (104)
Net finance costs 3 (133) (35)
Profit before tax 1,163 1,198
Tax expense 4 (175) (193)
Profit for the period 988 1,005
Attributable to:
Equity shareholders 948 965
Non-controlling interests 40 40
988 1,005
Earnings per share 5
Basic earnings per share 31.4p 31.8p
Diluted earnings per share 31.0p 31.4p
Condensed consolidated statement of comprehensive income (unaudited)
Six months ended Six months ended
30 June 2024
30 June 2023
Other Retained earnings Total Other Retained earnings Total
reserves
£m
£m
reserves
£m
£m
£m
£m
Profit for the period - 988 988 - 1,005 1,005
Other comprehensive income
Items that will not be reclassified to the income statement:
Consolidated:
Remeasurements on post-employment benefit schemes and other investments - 415 415 - (157) (157)
Tax on items that will not be reclassified to the income statement - (24) (24) - (6) (6)
Share of the other comprehensive income/(expense) of associates and joint - 14 14 - (9) (9)
ventures accounted for using the equity method (net of tax)
Items that may be reclassified to the income statement:
Consolidated:
Currency translation on foreign currency net investments - -
16 16 (589) (589)
Reclassification of cumulative currency translation reserve on partial 35 - 35 - - -
disposal of joint venture accounted for using the equity method
Fair value (loss)/gain arising on hedging instruments during the period (21) - (21) 23 - 23
Cumulative fair value loss/(gain) on hedging instruments reclassified to the 61 - 61 (20) - (20)
income statement
Tax on items that may be reclassified to the income statement (1) - (1) - - -
Share of the other comprehensive income of associates and joint ventures 4 - 4 6 - 6
accounted for using the equity method (net of tax)
Total other comprehensive income/(expense) for the period (net of tax) 94 405 499 (580) (172) (752)
Total comprehensive income/(expense) for the period 94 1,393 1,487 (580) 833 253
Attributable to:
Equity shareholders 94 1,349 1,443 (570) 793 223
Non-controlling interests - 44 44 (10) 40 30
94 1,393 1,487 (580) 833 253
Condensed consolidated statement of changes in equity (unaudited)
Attributable to equity holders of BAE Systems plc
Issued Share Other Retained earnings Total Non-controlling Total
share
premium
reserves
£m
£m
interests
equity
capital
£m
£m
£m
£m
£m
Balance at 1 January 2024 81 1,253 6,403 2,822 10,559 164 10,723
Profit for the period - - - 948 948 40 988
Total other comprehensive income for the period - - 94 401 495 4 499
Total comprehensive income for the period - - 94 1,349 1,443 44 1,487
Share-based payments (inclusive of tax) - - - 71 71 - 71
Cumulative fair value gain on hedging instruments transferred to the balance - - (2) - (2) - (2)
sheet (net of tax)
Ordinary share dividends - - - (562) (562) (6) (568)
Purchase of own shares (1) - 1 (250) (250) - (250)
At 30 June 2024 80 1,253 6,496 3,430 11,259 202 11,461
Balance at 1 January 2023 82 1,252 6,951 2,930 11,215 185 11,400
Profit for the period - - - 965 965 40 1,005
Total other comprehensive expense for the period - - (570) (172) (742) (10) (752)
Total comprehensive (expense)/income for the period - - (570) 793 223 30 253
Share-based payments (inclusive of tax) - - - 50 50 - 50
Cumulative fair value loss on hedging instruments transferred to the balance - - 9 - 9 - 9
sheet (net of tax)
Ordinary share dividends - - - (508) (508) (12) (520)
Purchase of own shares (1) - 1 (371) (371) - (371)
At 30 June 2023 81 1,252 6,391 2,894 10,618 203 10,821
Condensed consolidated balance sheet (unaudited)
Note 30 June 31 December
2024
2023
£m £m
Non-current assets
Intangible assets 16,045 12,099
Property, plant and equipment 4,502 3,635
Right-of-use assets 1,774 1,311
Investment property 57 57
Equity accounted investments 713 832
Other investments 76 84
Contract and other receivables 704 633
Post-employment benefit surpluses 6 1,197 804
Other financial assets 245 227
Deferred tax assets 375 609
25,688 20,291
Current assets
Inventories 1,355 1,156
Trade, contract and other receivables 7,090 6,185
Current tax 95 160
Other financial assets 159 205
Cash and cash equivalents 2,831 4,067
11,530 11,773
Total assets 37,218 32,064
Non-current liabilities
Loans (8,234) (4,432)
Lease liabilities (1,614) (1,273)
Contract liabilities (1,750) (1,955)
Other payables (1,728) (1,594)
Post-employment benefit obligations 6 (619) (575)
Other financial liabilities (210) (227)
Deferred tax liabilities (13) (10)
Provisions (396) (332)
(14,564) (10,398)
Current liabilities
Loans (738) (679)
Lease liabilities (230) (147)
Contract liabilities (4,212) (3,865)
Trade and other payables (5,586) (5,436)
Other financial liabilities (220) (295)
Current tax (10) (285)
Provisions (197) (236)
(11,193) (10,943)
Total liabilities (25,757) (21,341)
Net assets 11,461 10,723
Capital and reserves
Issued share capital 80 81
Share premium 1,253 1,253
Other reserves 6,496 6,403
Retained earnings 3,430 2,822
Total equity attributable to equity holders of BAE Systems plc 11,259 10,559
Non-controlling interests 202 164
Total equity 11,461 10,723
Approved by the Board of BAE Systems plc on 31 July 2024 and signed on its
behalf by:
B M Greve
C N Woodburn
Chief Executive Chief Financial Officer
Condensed consolidated cash flow statement (unaudited)
Note Six months Six months
ended
ended
30 June
30 June
2024
2023
£m
£m
Profit for the period 988 1,005
Tax expense 4 175 193
Adjustment in respect of research and development expenditure credits (22) (19)
Share of results of equity accounted investments (78) (60)
Net finance costs 3 133 35
Depreciation, amortisation and impairment 501 386
Net gain on disposal of property, plant and equipment and investment property (3) -
Gain in respect of partial disposal of equity accounted investment 11 (75) -
Cost of equity-settled employee share schemes 62 52
Movements in provisions 10 (15)
Difference between pension funding contributions paid and the pension charge (61) (117)
(Increase)/decrease in working capital:
Inventories (170) (114)
Trade, contract and other receivables (558) (468)
Trade and other payables, and contract liabilities (65) 733
Tax paid net of research and development expenditure credits received (80) (127)
Net cash flow from operating activities 757 1,484
Dividends received from equity accounted investments 145 123
Interest received 47 49
Principal element of finance lease receipts 5 5
Purchase of property, plant and equipment and investment property (385) (332)
Purchase of intangible assets (78) (49)
Proceeds from funding related to assets 62 73
Proceeds from sale of property, plant and equipment, investment property and 5 5
intangible assets
Purchase of subsidiary undertakings, net of cash and cash equivalents acquired 10 (4,536) -
Cash flow in respect of partial disposal of equity accounted investment and 11 166 (3)
other business disposals
Net cash flow from investing activities (4,569) (129)
Interest paid (222) (159)
Equity dividends paid 7 (562) (508)
Purchase of own shares 7 (250) (376)
Dividends paid to non-controlling interests (6) (12)
Principal element of lease payments (117) (129)
Cash inflow from derivative financial instruments (excluding cash flow hedges) 49 60
Cash outflow from derivative financial instruments (excluding cash flow (74) (242)
hedges)
Cash inflow from draw down of bridge loan facility 3,180 -
Cash outflow from repayment of bridge loan facility (3,168) -
Cash inflow from bond finance/private placement 3,753 166
Net cash flow from financing activities 2,583 (1,200)
Net (decrease)/increase in cash and cash equivalents (1,229) 155
Cash and cash equivalents at 1 January 4,067 3,107
Effect of foreign exchange rate changes on cash and cash equivalents (7) (58)
Cash and cash equivalents at 30 June 2,831 3,204
Notes to the Condensed consolidated financial statements
1. Preparation of the Condensed consolidated financial statements
Basis of preparation and statement of compliance
The annual financial statements of the Group will be prepared in accordance
with UK-adopted International Accounting Standards (IAS), in conformity with
the requirements of the Companies Act 2006. The Condensed consolidated set of
financial statements included in this Half-yearly Report have been prepared in
accordance with UK-adopted IAS 34 Interim Financial Reporting and the
Disclosure Guidance and Transparency Rules of the UK Financial Conduct
Authority. These Condensed consolidated financial statements do not comprise
statutory accounts within the meaning of Section 435 of the Companies Act 2006
and should be read in conjunction with the Annual Report 2023. The comparative
figures for the year ended 31 December 2023 are not the Group's statutory
accounts for that financial year. Those financial statements have been
reported upon by the Group's auditor and delivered to the Registrar of
Companies. The report of the auditor was unqualified, did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report and did not contain statements under
Section 498 (2) or (3) of the Companies Act 2006.
The accounting policies adopted in the preparation of these Condensed
consolidated financial statements to 30 June 2024 are consistent with the
accounting policies applied by the Group in its Consolidated financial
statements as at, and for the year ended, 31 December 2023 as required by the
Disclosure Guidance and Transparency Rules of the UK Financial Conduct
Authority.
The Condensed consolidated financial statements are presented in pounds
sterling and, unless stated otherwise, rounded to the nearest million. They
have been prepared under the historical cost convention, as modified by the
revaluation of certain financial assets and financial liabilities (including
derivative financial instruments).
Going concern
The Group continues to conduct ongoing risk assessments in relation to its
business operations and liquidity. Demand from the Group's key customers
remains strong, underpinned by our order backlog, programme positions and
pipeline of opportunities across all sectors. The Group also continues to work
with, and support, its supply chain to actively address the risk of
disruption.
The Group's liquidity and solvency has remained strong. Cash flow forecasting
is performed by the businesses on a monthly basis. The Group also monitors a
rolling forecast of its liquidity requirements to ensure that there is
sufficient cash to meet operational needs and maintain adequate headroom.
After making due enquiries and having undertaken these assessments, the
directors have a reasonable expectation that the Group has adequate resources
and will be able to continue in operational existence for the foreseeable
future, being at least 12 months from the date of approval of this report. For
this reason they continue to adopt the going concern basis in preparing the
Group's Condensed consolidated financial statements.
New and amended standards adopted by the Group
The following standards, interpretations and amendments to existing standards
became effective on 1 January 2024 and have not had a material impact on the
Group:
- Amendments to IAS 1: Classification of Liabilities as Current or
Non-current;
- Amendments to IAS 1: Non-current Liabilities with Covenants;
- Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements; and
- Amendments to IFRS 16: Lease Liability in a Sale and Leaseback.
No other new or amended standards, which became applicable for the period
ending 30 June 2024, had a material impact on the Group or required the Group
to change its accounting policies.
Critical accounting judgement and sources of estimation uncertainty
The determination of the Group's accounting policies requires judgement. The
subsequent application of these policies requires estimates and the actual
outcome may differ from that calculated. As at 31 December 2023, the key
critical accounting judgements and sources of estimation uncertainty assessed
as having a significant risk of causing material adjustments to the carrying
amount of assets and liabilities are set out in note 1 to the Consolidated
financial statements in the Annual Report 2023.
During the six month period ended 30 June 2024, the Group has re-assessed
these key areas of critical accounting judgement and sources of estimation
uncertainty and consider there have been no changes from those disclosed in
the Group's 2023 audited financial statements.
Impact of climate ambitions on the Condensed consolidated financial statements
In preparing the Condensed consolidated financial statements management has
considered the potential impact of climate change and the impact of
climate-related risks and opportunities and the Group's net zero ambitions and
decarbonisation activities on the Group's financial results.
As a responsible defence business, sustainability is embedded in our strategic
framework, with one of the Group's long-term objectives being to advance and
integrate our ESG agenda. The products and services we provide are complex,
diverse and developed over extended periods of time. Sustainability and the
impact of our operations is considered in the planning and ongoing production
of our products and services, including incorporation of the impact of the
Group's net zero ambitions and decarbonisation activities. These are embedded
in our financial reporting, forecasting and governance processes.
Estimates and judgement are required in determining how the Group will pursue
its net zero ambitions. These, as well as mitigating actions required from the
detailed review of climate risks and opportunities, have been factored into
the current and future plans of the Group through the Integrated Business Plan
(IBP). The IBP is the Group's annual long-term strategy review and five-year
plan for each segment, including the investment case to decarbonise.
The more immediate financial impacts of climate-related risks, and the actions
being taken to address them, are reflected in the financial results of the
Group for the period. These are not considered to have had a material impact.
2. Segmental analysis and revenue recognition
The Group has five sectors which, together with HQ, make its six reporting
segments as defined by IFRS 8 Operating Segments.
The Space & Missions Systems (SMS) business, which was acquired in
February 2024, has been reported within the pre-existing Electronic Systems
reporting segment. SMS has been combined with the existing Electronic Systems
business due to the similarities in services and products offered, being the
provision of advanced defence electronic solutions such as tactical missile
& munition subsystems, C4ISR, and civil and military space electronics.
Sales(1) and revenue by reporting segment
Sales(1) Deduct: Add: Revenue
Group's share of revenue
Subsidiaries' revenue from equity accounted investments
of equity accounted
investments
Six months Six months Six months Six months Six months Six months ended Six months Six months
ended
ended
ended
ended
ended
30 June
ended
ended
30 June
30 June
30 June
30 June
30 June
2023
30 June
30 June
2024
2023
2024
2024
£m
2024
2023
£m
£m
£m 2023
£m
£m
£m
£m
Electronic Systems 3,383 2,583 (128) (115) 139 115 3,394 2,583
Platforms & Services 2,085 1,891 (24) (27) - - 2,061 1,864
Air 4,009 3,786 (1,383) (1,391) 626 659 3,252 3,054
Maritime 2,929 2,603 (86) (65) 2 3 2,845 2,541
Cyber & Intelligence 1,182 1,157 - - - - 1,182 1,157
HQ 85 214 (80) (209) - - 5 5
13,673 12,234 (1,701) (1,807) 767 777 12,739 11,204
Intra-group sales/revenue (274) (216) - - 12 9 (262) (207)
13,399 12,018 (1,701) (1,807) 779 786 12,477 10,997
Intra-group revenue Revenue from external customers
Six months Six months Six months Six months
ended
ended
ended
ended
30 June
30 June
30 June
30 June
2024
2023
2024
2023
£m
£m
£m
£m
Electronic Systems 90 73 3,304 2,510
Platforms & Services 33 26 2,028 1,838
Air 18 17 3,234 3,037
Maritime 43 27 2,802 2,514
Cyber & Intelligence 73 59 1,109 1,098
HQ 5 5 - -
262 207 12,477 10,997
Sales(1) and revenue by customer location
Sales(1) Revenue
Six months Six months Six months Six months
ended
ended
ended
ended
30 June
30 June
30 June
30 June
2024
2023(2)
2024
2023(2)
£m
£m
£m
£m
UK 3,390 3,118 3,212 2,921
Europe (excluding UK) 1,403 1,226 844 641
US 5,961 5,191 5,983 5,189
Canada 79 81 79 81
Kingdom of Saudi Arabia 1,469 1,223 1,411 1,220
Qatar 199 305 125 225
Australia 594 469 591 468
Asia and Pacific (excluding Australia) 184 207 163 113
Other 120 198 69 139
13,399 12,018 12,477 10,997
1. Sales is an alternative performance measure defined in the
Alternative performance measures section on page 46. Sales includes both
revenue from the Group's own subsidiaries as well as recognising the strategic
importance in its industry of its equity accounted investments. It is
presented here as our internal measure of segmental performance and to provide
additional information on performance to the user.
2. Sales and revenue figures for 2023 to UK and Rest of Europe have
been re-presented to reflect the workshare on the Typhoon programme.
Operating profit/(loss) by reporting segment
Underlying Adjusting Amortisation of programme, customer-related and other intangible assets, and Finance and tax (expense)/income Operating
EBIT(3)
items(4) impairment of intangibles
of equity accounted investments
profit/(loss)
Six months ended Six months ended Six months ended Six months ended Six months ended Six months ended Six months ended Six months ended Six months ended Six months ended
30 June
30 June
30 June
30 June
30 June
30 June
30 June
30 June
30 June
30 June
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Electronic Systems 473 391 (38) 40 (134) (45) - - 301 386
Platforms & Services 216 172 6 5 - - (7) (5) 215 172
Air 446 454 (2) - - - 12 2 456 456
Maritime 228 193 - - - - (2) (1) 226 192
Cyber & Intelligence 101 96 5 3 (9) (11) - - 97 88
HQ (71) (48) 75 - - - (3) (13) 1 (61)
1,393 1,258 46 48 (143) (56) - (17) 1,296 1,233
Net finance costs (133) (35)
Profit before tax 1,163 1,198
Tax expense (175) (193)
Profit for the period 988 1,005
3. Underlying EBIT is an alternative performance measure defined in
the Alternative performance measures section on page 46. It provides a measure
of operating profitability, excluding one-off events or adjusting items that
are not considered to be part of the ongoing operational transactions of the
business, to enable management to monitor the performance of recurring
operations over time, and which is comparable across the Group. It is
presented here as our internal measure of segmental performance and to provide
additional information on performance to the user.
4. Adjusting items are items which have been determined by management
as being material by their size or incidence and not relevant to an
understanding of the Group's underlying business performance. A breakdown of
adjusting items is included in the Alternative performance measures section on
page 46.
3. Net finance costs
Six months ended Six months
30 June
ended
2024
30 June
£m
2023
£m
Interest income on cash and other financial instruments 63 50
Net interest income on post-employment benefit obligations 6 19
Finance income 69 69
Interest expense on loans and other financial instruments (231) (133)
Facility fees (2) (3)
Interest expense on lease liabilities (33) (26)
Net present value expenses on provisions and other payables (4) (4)
Gain/(loss) on remeasurement of financial instruments at fair value through 41 (224)
profit or loss(1,2)
Foreign exchange gains(2,3) 27 286
Finance costs (202) (104)
Net finance costs (133) (35)
1. Comprises gains and losses on derivative financial instruments, principally
held to manage the Group's exposure to interest rate fluctuations on current
and anticipated external borrowings and exchange rate fluctuations on balances
with the Group's subsidiaries and equity accounted investments.
2. The net gain or loss on remeasurement of financial instruments at fair
value through profit or loss and the net gain or loss on foreign exchange are
presented within finance costs as the gains and losses relate to the same
underlying transactions.
3. The foreign exchange gains/losses primarily reflects exchange rate
movements on US dollar-denominated borrowings.
4. Tax expense
The Group's reported tax expense was £175m (2023 £193m). The underlying
effective tax rate was 19% (2023 18%) and has been determined by calculating
an estimated annual tax rate for each country or entity, and then applying
those rates to half year profits or losses.
The Group's underlying effective tax rate is sensitive to the geographic mix
of profits and is impacted by the UK's enactment of the Organisation for
Economic Co-operation and Development's Global Anti-Base Erosion Model Rules
(Global Minimum Tax) effective from 1 January 2024. The Group has applied the
temporary exception issued by the International Accounting Standards Board
from the accounting requirements for deferred taxes in IAS 12. Accordingly,
the Group neither recognises nor discloses information about deferred tax
assets and liabilities related to Global Minimum Tax income taxes.
5. Earnings per share
Six months ended Six months ended
30 June 2024
30 June 2023
£m Basic Diluted pence £m Basic Diluted pence
pence
per share
pence
per share
per share
per share
Profit for the period attributable to equity shareholders 948 31.4 31.0 965 31.8 31.4
Six months ended Six months ended
30 June
30 June
2024
2023
Number of shares Millions Millions
Weighted average number of ordinary shares used in calculating basic earnings 3,016 3,039
per share
Effect of dilutive potential ordinary shares: 38 37
Incremental ordinary shares in respect of employee share schemes
Weighted average number of ordinary shares used in calculating diluted 3,054 3,076
earnings per share
6. Post-employment benefits
Summary of movements in net post-employment benefit obligations
UK US and Total
£m
other
£m
£m
Total net IAS 19 surplus/(deficit) at 1 January 2024 (net of withholding tax) 717 (420) 297
Add back: withholding tax on surpluses 441 - 441
Total net IAS 19 surplus/(deficit) at 1 January 2024 1,158 (420) 738
Actual return on assets excluding amounts included in net finance costs (906) (71) (977)
Decrease in liabilities due to changes in financial assumptions 1,225 125 1,350
Decrease in liabilities due to changes in demographic assumptions 51 - 51
Experience (losses)/gains (75) 47 (28)
Contributions in excess of/(less than) service cost 76 (4) 72
Settlements - 13 13
Business acquisitions - (142) (142)
Net interest income/(expense) 29 (9) 20
Total net IAS 19 surplus/(deficit) at 30 June 2024 1,558 (461) 1,097
Withholding tax on surpluses (415) - (415)
Total net IAS 19 surplus/(deficit) at 30 June 2024 (net of withholding tax) 1,143 (461) 682
Allocated to equity accounted investments (104) - (104)
Group's share of net IAS 19 surplus/(deficit) excluding Group's share of 1,039 (461) 578
amounts allocated to equity accounted investments at 30 June 2024
Represented by:
Post-employment benefit surpluses 1,135 62 1,197
Post-employment benefit obligations (96) (523) (619)
1,039 (461) 578
Surplus recognition
A number of schemes are in an accounting surplus position. The surpluses have
been recognised on the basis that the future economic benefits are
unconditionally available to the Group, which is assumed to be via a refund.
The Authorised Surplus Payments Charge (Variation of Rate) Order 2024 became
effective from 6 April 2024 and reduced the withholding tax rate from 35% to
25% for authorised surplus payments and therefore the surplus has been
recognised net of withholding tax of 25% as at 30 June 2024 (2023 35%). This
tax would be levied prior to the future refunding of any surplus and therefore
the surplus has been presented on a net basis as this is not deemed to be an
income tax of the Group.
Settlement gain
In June 2024, $145m (£114m) of the US defined benefit obligation liabilities
were settled via payment of a lump sum to participants. The premium of $128m
(£101m) created a one-off accounting gain of $17m (£13m). This gain has been
recognised as an Adjusting item in the income statement.
Principal actuarial assumptions
The assumptions used are estimates chosen from a range of possible actuarial
assumptions which, due to the long-term nature of the obligation covered, may
not necessarily occur in practice.
UK US
30 June 31 December 2023 30 June 31 December
2024 2024 2023
Financial assumptions
Discount rate - past service (%) 5.1 4.5 5.3 4.8
Discount rate - future service (%) 5.2 4.6 5.3 4.8
Retail Prices Index (RPI) inflation (%) 2.9 2.8 n/a n/a
Rate of increase in salaries (%) 2.9 2.8 n/a n/a
Rate of increase in deferred pensions (CPI/RPI) (%) 2.2/2.9 2.1/2.8 n/a n/a
Rate of increase in pensions in payment (%) 1.7 - 3.6 1.6 - 3.6 n/a n/a
Demographic assumptions
Life expectancy of a male currently aged 65 (years) 85 - 88 85 - 89 88 88
Life expectancy of a female currently aged 65 (years) 88 - 90 88 - 89 89 89
Life expectancy of a male currently aged 45 (years) 86 - 89 86 - 89 87 87
Life expectancy of a female currently aged 45 (years) 89 - 91 89 - 90 89 89
Life expectancy
For its UK pension schemes, the Group has used the Self-Administered Pension
Schemes S3 mortality tables based on year of birth (as published by the
Institute and Faculty of Actuaries) for both pensioner and non-pensioner
members, in conjunction with the results of an investigation into the actual
mortality experience of scheme members and information on the demographic
profile of the scheme's membership.
In addition, to allow for future improvements in longevity, the Continuous
Mortality Investigation 2023 tables (published by the Institute and Faculty of
Actuaries) have been used (at the 2023 year end, the Continuous Mortality
Investigation 2022 tables were used), with an assumed long-term rate of
mortality improvements of 1.0% per annum (2023 1.0%), an initial rate
adjustment parameter ('A') of 0.2% (2023 0.2%), a smoothing parameter ('Sk')
of 7 (2023 7) and the following weighting ('W') parameters: W2023 35% (2023
n/a), W2022 35% (2023 35%), W2021 0% (2023 0%) and W2020 0% (2023 0%).
For the majority of the US schemes, the mortality tables used at 30 June 2024
are a blend of the fully generational PRI-2012 White Collar table and the
PRI-2012 Blue Collar table, both projected using Scale MP-2021.
Sensitivity analysis
The sensitivity information has been derived using scenario analysis from the
actuarial assumptions as at 30 June 2024 and keeping all other assumptions as
set out above.
Financial assumptions
The estimated impact of changes in the discount rate and inflation assumptions
on the defined benefit pension obligation, together with the estimated impact
on scheme assets, is shown in the table below. The estimated impact on scheme
assets takes into account the Group's risk management activities in respect of
interest rate and inflation risk. The sensitivity analysis on the defined
benefit obligation is measured on an IAS 19 accounting basis.
Decrease/(increase) (Decrease)/increase
in pension obligation(1) in scheme assets(1)
£bn £bn
Discount rate:
0.5 percentage point increase/decrease 1.2/(1.3) (1.2)/1.4
1.0 percentage point increase/decrease 2.3/(2.8) (2.4)/2.9
2.0 percentage point increase/decrease 4.1/(6.2) (4.3)/6.4
3.0 percentage point increase/decrease 5.7/(10.5) (6.0)/10.8
(Increase)/decrease Increase/(decrease)
in pension obligation(1) in scheme assets(1)
£bn £bn
Inflation:
0.1 percentage point increase/decrease (0.1)/0.1 0.2/(0.1)
0.5 percentage point increase/decrease (0.6)/0.6 0.8/(0.7)
1.0 percentage point increase/decrease (1.2)/1.2 1.6/(1.4)
Demographic assumptions
Changes in the life expectancy assumption, including the benefit of longevity
swap arrangements, would have the following effect on the total net IAS 19
surplus:
(Decrease)/increase
in net surplus(1)
£bn
Life expectancy:
One-year increase/decrease (0.7)/0.7
1. Before allocation to equity accounted investments and deduction of
withholding tax.
Virgin Media case
The Company is aware that the Court of Appeal have recently upheld the High
Court's ruling in relation to Section 37 of the Pension Schemes Act 1993. The
case affects defined benefit schemes that provided contracted-out benefits
before 6 April 2016 based on meeting the reference scheme test. Where scheme
rules were amended, potentially impacting benefits accrued from 6 April 1997
to 6 April 2016, schemes needed the actuary to confirm that the reference
scheme test was still being met by providing written confirmation under
Section 37 of the Pension Schemes Act 1993. Rejection of the appeal now
confirms that alterations to the scheme rules were void and ineffective
because of the absence of written actuarial confirmation required. The
potential impact of this, if any, has not yet been confirmed and, in light of
the recent ruling, the Company will continue to assess this in the second half
of the year.
7. Capital distributions
Equity dividends
Six months ended Six months ended
30 June
30 June
2024
2023
£m
£m
Prior year final 18.5p dividend per ordinary share paid in the period (2023 562 508
16.6p)
The directors have declared an interim dividend of 12.4p per ordinary share in
respect of the period ended
30 June 2024, totalling approximately £375m. This will be paid on 2 December
2024 to shareholders registered
on 25 October 2024. The ex-dividend date is 24 October 2024. This is in line
with our usual dividend timetable.
Shareholders who do not at present participate in the Company's Dividend
Reinvestment Plan and wish to receive the interim dividend in shares rather
than cash should complete a mandate form for the Dividend Reinvestment Plan
and return it to the registrars for receipt no later than 8 November 2024.
Capital
The Group funds its operations through a mixture of equity funding and debt
financing, including bank and capital market borrowings. The capital structure
of the Group reflects the judgement of the directors of an appropriate balance
of funding required. Our policy is to maintain the Group's investment grade
credit rating and ensure operating flexibility, whilst:
· meeting its pension obligations;
· investing in research and technology and pursuing other organic
investment opportunities;
· paying dividends in line with the Group's policy of long-term
sustainable cover of around two times underlying earnings;
· making accelerated returns of capital to shareholders when the
balance sheet allows and when the return from doing so is in excess of the
Group's weighted average cost of capital; and
· investing in value-enhancing acquisitions, where market
conditions are right and where they deliver on the Group's strategy.
Purchase of own shares
In July 2022, the directors approved a share buyback programme of up to
£1.5bn (the 2022 share buyback programme). The 2022 share buyback programme
was completed on 24 July 2024. In total, 163,907,003 ordinary shares were
repurchased under the 2022 share buyback programme for a total cost (including
transaction costs) of £1,508m.
In August 2023, the directors approved a further share buyback programme of up
to £1.5bn (the 2023 share buyback programme). The 2023 share buyback
programme commenced on 25 July 2024. The 2023 share buyback programme is
expected to complete within three years of its commencement.
In the six months ended 30 June 2023, 40,460,554 ordinary shares were
repurchased under the 2022 share buyback programme for a total cost (including
transaction costs) of £371m.
In the six months ended 30 June 2024, 19,403,928 ordinary shares were
repurchased under the 2022 share buyback programme at a total cost (including
transaction costs) of £250m.
All ordinary shares acquired have been subsequently cancelled, with the
nominal value of ordinary shares cancelled deducted from share capital against
the capital redemption reserve.
As part of the 2022 buyback programme, it was agreed that should a better
alternative use for the Company's cash reserves be identified, the share
buyback programmes would be ceased and the money instead used for the
alternative purpose. Therefore, when the Company issued a mandate to the
brokers to purchase shares on their behalf, the mandate was structured such
that it could be revoked at any point. As such, no financial liability has
been recognised for shares not yet purchased under the 2022 programme at 30
June.
As the mandate for the first tranche of the 2023 share buyback programme can
be revoked at any time, no financial liability has been recognised for shares
not yet purchased under the first tranche of the 2023 share buyback programme.
8. Fair value measurement
Fair value of financial instruments
Certain of the Group's financial instruments are held at fair value.
The fair value of a financial instrument is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the balance sheet date.
The fair values of financial instruments held at fair value have been
determined based on available market information at the balance sheet date,
and the valuation methodologies listed below:
- the fair values of forward foreign exchange contracts are calculated
by discounting the contracted forward values and translating at the
appropriate balance sheet rates;
- the fair values of both interest rate and cross-currency swaps are
calculated by discounting expected future principal and interest cash flows
and translating at the appropriate balance sheet rates; and
- the fair values of money market funds are calculated by multiplying
the net asset value per share by the investment held at the balance sheet
date.
The derivative fair values are based on reputable third party forecast data,
and then adjusted for credit risk, including the Group's own credit risk, and
market risk. Due to the variability of the valuation factors, the fair values
presented at 30 June may not be indicative of the amounts the Group will
realise in the future.
Fair value hierarchy
The fair value measurement hierarchy is as follows:
- Level 1 - Quoted prices (unadjusted) in active markets for identical
assets or liabilities;
- Level 2 - Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
- Level 3 - Inputs for the asset or liability that are not based on
observable market data (i.e. unobservable inputs).
Carrying amounts and fair values of certain financial instruments
30 June 2024 31 December 2023
Carrying amount Fair Carrying amount Fair
£m
value
£m
value
£m
£m
Financial instruments measured at fair value:
Non-current
Other investments at fair value through other comprehensive income 76 76 84 84
Other financial assets 245 245 227 227
Contingent consideration in business combination (note 10) (41) (41) - -
Other financial liabilities (210) (210) (227) (227)
Current
Other financial assets 159 159 205 205
Money market funds 944 944 1,375 1,375
Contingent consideration in business combination (note 10) (20) (20) - -
Other financial liabilities (220) (220) (295) (295)
Financial instruments not measured at fair value:
Non-current
Loans (8,234) (7,735) (4,432) (4,045)
Current
Loans (738) (735) (679) (672)
All of the financial assets and liabilities measured at fair value are
classified as level 2 using the fair value hierarchy, except for money market
funds, which are classified as level 1; other investments, which are at a
combination of level 1 and level 3; and the contingent consideration liability
which is measured at level 3. The fair value of the contingent consideration
has been valued based on the discounted expected cash flows. The total value
of investments classified as level 3 is immaterial. There were no transfers
between levels during the period. Alternative valuation techniques would not
materially change the valuations presented.
Financial assets and liabilities in the Group's Condensed consolidated balance
sheet are either held at fair value or at amortised cost. With the exception
of loans, the carrying value of financial instruments measured at amortised
cost approximates their fair value. For the bonds included within loans, the
fair value of loans presented in the table above is derived from market prices
as of 30 June, classified as level 1 using the fair value hierarchy.
9. Related party transactions
The Group has a related party relationship with its equity accounted
investments and pension schemes. Transactions with related parties occur in
the normal course of business, are priced on an arm's-length basis and settled
on normal trade terms. The more significant transactions are disclosed below:
Six months Six months
ended
ended
30 June
30 June
2024
2023
£m
£m
Sales to related parties 779 786
Purchases from related parties 184 287
Management recharges 2 4
30 June 31 December
2024
2023
£m
£m
Amounts owed by related parties 126 79
Amounts owed to related parties 1,834 1,746
10. Acquisitions
Businesses acquired during 2024
Ball Aerospace
On 16 February 2024, the Group acquired 100% of the share capital of the Ball
Aerospace division (now BAE Systems Space & Mission Systems) for
consideration of $5.5bn (£4.4bn), of which c.$0.75bn is expected to be
recoverable under a tax benefit associated with the acquisition. Upon
completion, the Group drew down $4.0bn (£3.2bn) under a bridge finance
facility and paid $1.5bn (£1.2bn) in cash from the Group's existing cash
resources, in settlement of the transaction. Following bond finance raised in
March of $4.8bn (£3.8bn), the Group subsequently repaid the bridge finance
facility.
Space and Mission Systems is a leading provider of spacecraft, mission
payloads, optical systems, and antenna systems. Headquartered in Colorado,
with more than 5,200 employees, it has existing customer relationships among
the Intelligence Community, US Department of Defense, and civilian space
agencies. It is well positioned across several markets: military and civil
space, C4ISR, and missile and munitions. The space market exposure extends
across positions in defence, intelligence, and scientific missions. The
Tactical Solutions business is well positioned to capture expected increases
in demand for missiles and munitions.
The acquisition enhances our portfolio of advanced defence electronic
solutions and is reported as part of our Electronic Systems sector.
Other acquisitions
On 31 January 2024, the Group acquired 100% of the share capital of Malloy
Aeronautics Ltd and, on 2 May 2024, the Group acquired 100% of the share
capital of Callen-Lenz Associates Ltd. Both entities operate in the UAS
technology market and form part of FalconWorks(®), the research and
development business within the Air sector.
Total consideration of £291m includes £61m of contingent consideration. The
value of contingent consideration is dependent on a number of factors,
including the financial and operational performance of the acquired
businesses.
The results and financial position of all three acquired businesses have been
consolidated from the date of each acquisition under the requirements of IFRS
3 Business Combinations. The fair values acquired are provisional figures,
being the best estimates currently available, as the Group continues to
finalise the valuation of intangibles acquired due to the complexity and
nature of the acquisitions.
Acquisition consideration and provisional fair value of net assets acquired
Ball Aerospace Total
£m Other £m
£m
Intangible assets 2,271 106 2,377
Property, plant and equipment 694 - 694
Right-of-use assets 77 - 77
Receivables 309 14 323
Deferred tax assets 43 - 43
Inventories 17 6 23
Lease liabilities (61) - (61)
Post-employment benefit obligations (142) - (142)
Contract liabilities (175) (16) (191)
Payables (160) (14) (174)
Provisions (11) - (11)
Current tax 1 - 1
Cash and cash equivalents 7 39 46
Net identifiable assets acquired 2,870 135 3,005
Goodwill 1,482 156 1,638
Net assets acquired 4,352 291 4,643
Satisfied by:
Cash consideration 4,352 230 4,582
Contingent consideration - 61 61
Total consideration 4,352 291 4,643
The net outflows of cash in respect of the acquisitions are as follows:
£m £m £m
Cash consideration 4,352 230 4,582
Less: Cash and cash equivalents acquired (7) (39) (46)
Net cash outflows in respect of the acquisition of businesses 4,345 191 4,536
The goodwill recognised is primarily attributable to expected synergies from
the products and services being provided and the enhancement of capabilities
in new and emerging areas of technology. Goodwill of £1,482m is expected to
be deductible for tax purposes. No impairment losses have been recognised in
respect of goodwill in the period ended
30 June 2024.
The acquisitions contributed £590m to the Group's revenue and £65m to the
Group's underlying EBIT(1) between the date of acquisition and 30 June 2024.
If the acquisitions had completed on 1 January 2024, the Group's revenue would
have been £12,720m and the Group's underlying EBIT(1) would have been
£1,419m for the period ended
30 June 2024.
Contractual cash flows on trade, other and contract receivables are recognised
net of expected credit losses. The amount of gross trade receivables acquired
was £335m, of which £14m relates to other acquisitions. Management's best
estimate at the acquisition date of contractual cash flows not expected to be
collected was £12m in relation to Ball Aerospace. The fair value of trade
receivables at acquisition date is shown in the table above.
No contingent liabilities have been recognised or require disclosure in
respect of these acquisitions.
Acquisition-related costs of £42m have been included as an adjusting item in
operating costs in the Condensed consolidated income statement for the period
ending 30 June 2024.
1. Underlying EBIT is an alternative performance measure defined in
the Alternative performance measures section on page 46. It is presented here
as our internal measure of segmental performance, to provide additional
information on performance to the user.
11. Disposals
Disposal of partial share of equity accounted investment
On 12 January 2024, Air Astana announced its intention to proceed with a joint
initial public offering (IPO) on the London Stock Exchange, the Astana
International Exchange in Kazakhstan, and the Kazakhstan Stock Exchange. On
9 February 2024, the IPO was launched. As a result of the IPO, the total
shareholding held by BAE Systems in Air Astana reduced from 49% to 17%. The
Group's 49% shareholding in Air Astana had a carrying value of £84m at
31 December 2023. The profit on disposal of the share of the Group's equity
accounted investment is shown below. The Group has continued to equity account
for the remaining investment.
£m
Total cash proceeds on disposal of partial shareholding in equity accounted 166
investment
Less: Carrying amount of share of equity accounted investment disposed (56)
Profit on disposal before tax and reclassification of foreign currency 110
translation reserve
Reclassification of foreign currency reserve (35)
Profit on disposal before tax 75
12. Contingent liabilities
The Group believes that any significant liability in respect of its guarantees
and performance bond arrangements, and legal actions and claims not already
provided for, is remote.
13. Events after the reporting period
There were no events after the reporting period which would materially impact
the balances reported in this
Report.
Alternative performance measures
We monitor the underlying financial performance of the Group using alternative
performance measures (APMs). These measures are not defined in IFRS and,
therefore, are considered to be non-GAAP measures. Accordingly, the relevant
IFRS measures are also presented where appropriate.
The Group uses these APMs as a mechanism to support year-on-year business
performance and cash generation comparisons, and to enhance management's
planning and decision-making on the allocation of resources. The APMs are also
used to provide information in line with the expectations of investors, and
when setting guidance on expected future business performance. The Group
presents these measures to the users to enhance their understanding of how the
business has performed within the year, and does not consider them to be more
important than, or superior to, their equivalent IFRS measures. As each APM is
defined by the Group, they may not be directly comparable with
equivalently-named measures in other companies.
Purpose, definitions, breakdowns and reconciliations to the relevant statutory
measure, where appropriate, are included below.
Sales
Purpose
Enables management to monitor the revenue of both the Group's own subsidiaries
as well recognising the strategic importance in its industry of its equity
accounted investments, to ensure programme performance is understood and in
line with expectations.
Definition
Revenue plus the Group's share of revenue of equity accounted investments,
excluding subsidiaries' revenue from equity accounted investments.
Reconciliation of sales to revenue Six months Six months ended
ended
30 June
30 June
2023
2024
£m
£m
Sales 13,399 12,018
Deduct: Group's share of revenue of equity accounted investments (1,701) (1,807)
Add: Subsidiaries' revenue from equity accounted investments 779 786
Revenue 12,477 10,997
Underlying EBIT
Purpose
Provides a measure of operating profitability, excluding one-off events or
adjusting items that are not considered to be part of the ongoing operational
transactions of the business, to enable management to monitor the performance
of recurring operations over time, and which is comparable across the Group.
Definition
Operating profit excluding amortisation of programme, customer-related and
other intangible assets, impairment of intangible assets, net finance costs
and tax expense of equity accounted investments (EBIT) and adjusting items.
The exclusion of amortisation of acquisition-related intangible assets is to
allow consistent comparability internally and externally between our
businesses, regardless of whether they have been grown organically or via
acquisition.
Reconciliation of underlying EBIT to operating profit Six months Six months
ended
ended
30 June
30 June
2024
2023
£m
£m
Underlying EBIT 1,393 1,258
Adjusting items 46 48
Amortisation of programme, customer-related and other intangible assets, and (143) (56)
impairment of intangibles
Net finance income of equity accounted investments 26 2
Tax expense of equity accounted investments (26) (19)
Operating profit 1,296 1,233
Return on sales
Purpose
Provides a measure of operating profitability, excluding one-off events, to
enable management to monitor the performance of recurring operations over
time, and which is comparable across the Group.
Definition
Underlying EBIT as a percentage of sales - also referred to as margin.
Six months Six months
ended
ended
30 June
30 June
2024
2023
£m
£m
Sales 13,399 12,018
Underlying EBIT 1,393 1,258
Return on sales 10.4% 10.5%
Underlying earnings per share (EPS)
Purpose
Provides a measure of the Group's underlying performance, which enables
management to compare the profitability of the Group's recurring operations
over time.
Definition
Profit for the period attributable to shareholders, excluding post-tax impact
of amortisation of programme, customer-related and other intangible assets,
impairment of intangible assets, non-cash finance movements on pensions and
financial derivatives, and adjusting items attributable to shareholders, being
underlying earnings, divided by number of shares as defined for Basic EPS in
accordance with IAS 33 Earnings per Share.
Reconciliation of underlying profit attributable to equity shareholders Six months Six months
ended
ended
30 June
30 June
2024
2023
£m
£m
Underlying profit for the period attributable to equity shareholders 948 901
Adjustments:
Adjusting items 46 48
Amortisation of programme, customer-related and other intangible assets and (143) (56)
impairment of intangibles
Net interest income on post-employment benefit obligations 7 20
Fair value and foreign exchange adjustments on financial instruments and 66 58
investments
Tax impact of adjustments 24 (6)
Profit for the period attributable to equity shareholders 948 965
Reconciliation of underlying EBIT to underlying profit for the period Six months Six months
attributable to equity shareholders
ended
ended
30 June
30 June
2024
2023
£m
£m
Underlying EBIT 1,393 1,258
Group and equity accounted investments underlying net finance costs (see (180) (111)
reconciliation page 48)
Underlying tax expense (see reconciliation page 49) (225) (206)
Underlying profit for the period 988 941
Deduct: Non-controlling interests (40) (40)
Underlying profit for the period attributable to equity shareholders 948 901
Weighted average number of ordinary shares used in calculating basic earnings 3,016 3,039
per share
Underlying EPS - basic 31.4p 29.6p
Weighted average number of ordinary shares used in calculating diluted 3,054 3,076
earnings per share
Underlying EPS - diluted 31.0p 29.3p
Adjusting items
Purpose
To adjust items of financial performance from the reported underlying results
which have been determined by management as being material by their size or
incidence and not relevant to an understanding of the Group's underlying
business performance.
Definition
Adjusting items include profit or loss on business transactions, the impact of
substantively enacted tax rate changes, and costs incurred which are one-off
in nature, for example; non-routine costs or income relating to
post-retirement benefit schemes and other items which management has
determined as not being relevant to an understanding of the Group's underlying
business performance.
Six months Six months
ended
ended
30 June
30 June
2024
2023
£m
£m
Profit on disposal of equity accounted investments 75 -
Acquisition-related costs (42) (3)
Gain related to settlement on US pension buy-out 13 51
Adjusting items 46 48
Underlying net finance costs
Purpose
Provides a measure of net finance costs associated with the operational
borrowings of the Group that is comparable over time.
Definition
Net finance costs for the Group and its share of equity accounted investments,
excluding net interest income/expense on post-employment benefit obligations
and fair value and foreign exchange adjustments on financial instruments.
Six months ended Six months
30 June
ended
2024
30 June
£m
2023
£m
Net finance costs - Group (133) (35)
Deduct:
Net interest income on post-employment benefit obligations (6) (19)
Fair value and foreign exchange adjustments on financial instruments (68) (62)
Underlying net finance costs - Group (207) (116)
Net finance income - equity accounted investments 26 2
(Deduct)/add back:
Net interest income on post-employment benefit obligations (1) (1)
Fair value and foreign exchange adjustments on financial instruments 2 4
Underlying net finance income - equity accounted investments 27 5
Total of Group and equity accounted investments' underlying net finance costs (180) (111)
Underlying effective tax rate
Purpose
Provides a measure of tax expense for the Group, excluding one-off items, that
is comparable over time.
Definition
Tax expense for the Group and its share of equity accounted investments,
excluding any one-off tax benefit/expense related to adjusting items and other
items excluded from underlying EBIT, as a percentage of underlying profit
before tax.
Calculation of the underlying effective tax rate
Six months ended Six months
30 June
ended
2024
30 June
£m
2023
£m
Underlying EBIT (see reconciliation on page 46) 1,393 1,258
Group and equity accounted investments' underlying net finance costs (see (180) (111)
reconciliation on page 48)
Underlying profit before tax 1,213 1,147
Group tax expense (175) (193)
Tax expense of equity accounted investments (26) (19)
Exclude:
Tax (income)/expense in respect of taxable adjusting items (4) 2
Tax (income)/expense in respect of other items excluded from underlying profit (20) 4
Underlying tax expense (225) (206)
Underlying effective tax rate 19% 18%
Free cash flow
Purpose
Provides a measure of cash generated by the Group's operations after servicing
debt and tax obligations, available for use in line with the Group's capital
allocation policy.
Definition
Net cash flow from operating activities, including dividends received from
equity accounted investments, interest paid, net of interest received, net
capital expenditure and financial investments, and principal elements of lease
payments and receipts.
Reconciliation from free cash flow to net cash flow from operating activities
Six months ended Six months
30 June
ended
2024
30 June
£m
2023
£m
Free cash flow 219 1,070
Add back:
Interest paid, net of interest received 175 110
Net capital expenditure and financial investment 396 303
Principal element of lease payments and receipts 112 124
Deduct:
Dividends received from equity accounted investments (145) (123)
Net cash flow from operating activities 757 1,484
Operating business cash flow
Purpose
Provides a measure of cash generated by the Group's operations, which is
comparable across the Group, to service debt and meet tax obligations, and in
turn available for use in line with the Group's capital allocation policy.
Definition
Net cash flow from operating activities excluding tax paid net of research and
development expenditure credits received and including net capital expenditure
(net of proceeds from funding of assets) and lease principal amounts,
financial investment and dividends from equity accounted investments.
Reconciliation from operating business cash flow to net cash flow from Six months Six months
operating activities
ended
ended
30 June
30 June
2024
2023
£m
£m
Operating business cash flow 474 1,307
Add back:
Net capital expenditure and financial investment 396 303
Principal element of lease payments and receipts 112 124
Deduct:
Dividends received from equity accounted investments (145) (123)
Tax paid net of research and development expenditure credits received (80) (127)
Net cash flow from operating activities 757 1,484
Reconciliation of operating business cash flow to net cash flow from operating
activities by reporting segment
Operating business cash flow Deduct: Dividends received from equity accounted investments Add back: Net capital expenditure, lease principal amounts and financial Net cash flow from operating activities
investment
Six months ended Six months ended Six months ended Six months ended Six months ended Six months ended Six months ended Six months ended
30 June
30 June
30 June
30 June
30 June
30 June
30 June
30 June
2024
2023
2024
2023
2024
2023
2024
2023
£m
£m
£m
£m
£m
£m
£m
£m
Electronic Systems 184 157 (6) (4) 86 72 264 225
Platforms & Services (13) 21 - - 96 74 83 95
Air 724 1,330 (135) (110) 108 87 697 1,307
Maritime (247) (79) (4) (3) 160 119 (91) 37
Cyber & Intelligence 16 51 - - 24 35 40 86
HQ (190) (173) - (6) 34 40 (156) (139)
474 1,307 (145) (123) 508 427 837 1,611
Tax paid net of research and development expenditure credits received (80) (127)
Net cash flow from operating activities 757 1,484
Net debt (excluding lease liabilities)
Purpose
Allows management to monitor indebtedness of the Group, to ensure the Group's
capital structure is appropriate and capital allocation policy decisions are
suitably informed.
Definition
Cash and cash equivalents, less loans (including debt-related derivative
financial instruments). Net debt does not include lease liabilities.
Components of net debt (excluding lease liabilities) 30 June 31 December
2024
2023
£m
£m
Cash and cash equivalents 2,831 4,067
Debt-related derivative financial instruments (net) 53 22
Loans - non-current (8,234) (4,432)
Loans - current (738) (679)
Net debt (excluding lease liabilities) (6,088) (1,022)
Order intake
Purpose
Allows management to monitor the order intake of the Group together with its
equity accounted investments, providing insight into future periods' sales
performance.
Definition
Funded orders received from customers including the Group's share of order
intake of equity accounted investments.
Six months Six months
ended
ended
30 June
30 June
2024
2023
£bn
£bn
Order intake 15.1 21.1
Order backlog
Purpose
Supports future years' sales performance of the Group together with its equity
accounted investments.
Definition
Funded and unfunded unexecuted customer orders including the Group's share of
order backlog of equity accounted investments. Unfunded orders include the
elements of US multi-year contracts for which funding has not been authorised
by the customer.
Reconciliation of order backlog, as defined by Group, to order book(1) 30 June 31 December 2023
2024
£bn
£bn
Order backlog, as defined by Group 74.1 69.8
Deduct:
Unfunded order backlog (4.5) (2.3)
Share of order backlog of equity accounted investments (13.6) (13.5)
Add back: Order backlog in respect of orders from equity accounted investments 3.6 4.0
Order book(1) 59.6 58.0
1. Order book represents the transaction price allocated to
unsatisfied and partially satisfied performance obligations as defined by IFRS
15 Revenue from Contracts with Customers.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR UAABRSBUBOARRecent news on BAE Systems
See all newsREG - BAE SYSTEMS PLC - Director/PDMR Shareholding
AnnouncementREG - BAE SYSTEMS PLC - Transaction in Own Shares
AnnouncementREG - BAE SYSTEMS PLC - Transaction in Own Shares
AnnouncementREG - BAE SYSTEMS PLC - Transaction in Own Shares
AnnouncementREG - BAE SYSTEMS PLC - Transaction in Own Shares
Announcement