REG - BAE SYSTEMS PLC - Trading Statement

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RNS Number : 1526H  BAE SYSTEMS PLC  12 November 2025

BAE Systems plc - Market update

12 November 2025

 

Highlights:

·    Strong operational and financial performance underpins Group
full-year guidance, in line with upgrade at half year.

·    Positive momentum in order intake with more than £27bn secured so
far and further agreements anticipated before the end of the year.

·    Continued period of active discussions with customers to support
their defence needs.

·    Our order backlog, pipeline of work on incumbent positions and
expanding opportunities for new work provide good visibility for long-term
growth.

 

Charles Woodburn, BAE Systems Chief Executive, said:

"We continue to deliver strong financial and operational performance in the
second half of the year, underpinning the full-year guidance we upgraded in
July. The recent agreement with Türkiye for Typhoon aircraft and announcement
by Norway in respect of Type 26 frigates demonstrate sustained global demand
for our leading defence capabilities. These programmes not only strengthen
national security, but also support thousands of skilled jobs and generate
significant export value for the UK economy. With a strong order backlog,
established positions on key programmes and continued investment to support
our future growth, we're confident in the outlook for our business."

 

Market update

Trading in the second half of the year is in line with expectations. Our
operational performance continues to be strong as we focus on consistent
delivery of critical capabilities and technologies for our customers around
the world. Future growth is supported by our funded backlog, incumbent
positions on major programmes and our significant investment in technologies,
capacity and people.

 

In the US, the President recently voiced support for the tri-lateral AUKUS
programme and momentum has continued to build around the architecture of the
Golden Dome air and missile defense initiative, to which our technologies and
capabilities are well aligned. We are encouraged by the momentum in Congress
to end the US Government shutdown, especially the positive actions of this
week.  To date, we do not see material effects on our US business. If the
shutdown persists, delays to contract funding and timing of payments before
year end are possible.

 

Across the Group, our portfolio aligns well with the national defence
strategies of our customers and the recently announced spending increases
across NATO provide a very supportive backdrop for growth over the medium
term. We expect significant opportunities across our business, including space
systems, missile and air defence systems, electronic warfare, combat aircraft,
combat vehicles, frigates, submarines, drones and counter drones among others.

 

 

Guidance

In 2025, we expect good growth in sales and EBIT as well as solid cash
generation. Our full year 2025 guidance is unchanged across all metrics from
the upgraded guidance we provided at the half year results in July.

·    Sales
          +8% to +10% (2024: £28.3bn)

·    Underlying EBIT
+9% to +11% (2024: £3.0bn)

·    Underlying EPS
+8% to +10% (2024: 68.5p)

·    Free cash flow (FCF) in 2025
>£1.1bn

Guidance is provided on a constant currency basis using a GBP:USD exchange
rate of $1.28:£1 which is consistent with the average exchange rate in 2024.
The average exchange rate for the year to date is approximately $1.32.

As a guide, a 5 cent movement in the GBP:USD exchange rate impacts sales by
c.£525m, underlying EBIT by c.£75m and underlying EPS by c.1.4p.

The weighted average number of ordinary shares to calculate full year
underlying EPS is expected to be around 3.0bn.

 

Order intake

We have secured orders of more than £27bn in 2025 so far. Awards in the
second half of the year include:

·    c.£4.0bn for the build of 20 Typhoon aircraft and weapons
integration for Türkiye, with the first aircraft delivery scheduled for 2030.

·    c.$3.3bn in Electronic Systems, including incremental funding for
Space & Mission Systems and electronics programmes, as well as new awards
for APKWS and Multifunctional Information Distribution System Joint Tactical
Radio Systems.

·    c.$1.7bn in funding for US combat vehicle production including
ongoing AMPV, Bradley and M109 programmes.

·    c.£1.1bn of MBDA orders for various domestic and export awards.

·    £0.9bn of funding to continue Dreadnought programme design and build
activities.

The recent agreement between the Norwegian and UK governments to supply at
least five Type 26 anti-submarine frigates is expected to lead to a
substantial order, which will be booked after 2025 once contractual agreements
are completed.

 

Balance sheet and capital allocation

Our strong financial position enables us to implement all parts of our capital
allocation policy. We continue to invest in our business to support organic
growth, explore value enhancing acquisition opportunities, pay dividends to
our shareholders and execute our share buyback programme.

 

Total cash returned to shareholders in 2025 is expected to be c.£1.5bn,
comprising the final dividend for 2024, the interim dividend for 2025, which
will be paid on 3 December 2025, and c.£500m of share repurchases.

 

Full year 2025 results

We will announce our preliminary results for year ending 31 December 2025 on
18 February 2026.

 

For further information please contact:

 Investors                                                           Media
 Paul Checketts                                                      Kristina Anderson

 Investor Relations Director                                         Director, Media Relations

 Telephone: +44 (0) 3300 46 6802                                     Telephone: +44 (0) 7540 628673

 Email: investors@baesystems.com (mailto:investors@baesystems.com)   Email: Kristina.anderson@baesystems.com
                                                                     (mailto:Kristina.anderson@baesystems.com)

 

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, involve known and unknown 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, performance or achievements of BAE Systems plc or the markets
and economies in which BAE Systems plc operates may differ materially from
those made in or suggested by the forward-looking statements contained in this
document. These forward-looking statements speak only as of the date of 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 contains limits on the liability of the directors of
BAE Systems plc so that their liability is solely to BAE Systems plc.

 

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