9 May 2024
BAE
Systems plc - Annual General Meeting and
Market Update
BAE Systems plc will hold its Annual
General Meeting today at 9.30 a.m. At the meeting, Chair,
Cressida Hogg, and Chief Executive, Charles Woodburn, will comment
on the performance of the Group in 2023, as detailed in the
Preliminary Results Announcement published on 21 February
2024.
The results of voting at the Annual
General Meeting will be announced later today.
Additionally, BAE Systems plc
provides the following update on trading in the year to
date.
Charles Woodburn, BAE Systems Chief
Executive, said:
"Trading so far this year has been
in line with expectations. Operational performance continues to be
strong and our backlog and programme incumbencies underscore our
confidence in our long-term value-creating model.
"We're continuing to deliver
on mission critical requirements for our customers, and progress
our long-term strategic programmes within the elevated threat
environment. We have commenced the integration of our new Space
& Mission Systems business in the US following the closing of
the Ball Aerospace acquisition in February. Our global presence and
diverse portfolio of products and services provide high visibility
for top-line growth, margin expansion and cash generation in the
coming years."
Guidance
The Group's full year 2024 guidance
is unchanged from that contained in the
Preliminary Results Announcement published on 21 February
2024.
·
Sales
+10% to +12% (2023: £25,284m)
·
Underlying EBIT
+11% to +13% (2023:
£2,682m)
·
Underlying EPS
+6%
to +8% (2023: 63.2p)
·
2024 Free Cash Flow (FCF)
>£1.3bn
·
Cumulative FCF 2024-2026
>£5bn
·
Guidance is provided on the basis of an exchange
rate of $1.24:£1 for the year
·
Sensitivity to EPS is around 1.3 pence for every 5
cent movement
Increasing exposure to major defence growth
markets
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 the United States, the United Kingdom and
Australia.
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, which BAE Systems is leading. In
2023, we received c.£4bn of order intake to enable the UK programme
to transition into the detailed design phase and commence
procurement of long-lead items and supporting
infrastructure.
BAE Systems and ASC Pty Ltd will now
combine their complementary skills, expertise and capabilities
under a collaborative arrangement in Australia, ultimately leading
to the establishment of an incorporated Joint Venture.
With our global presence and wide
portfolio of high-end technologies and services, any further
expansion of the current AUKUS programme would enhance our
long-term opportunity pipeline.
Order Intake
Defence spending is high across our
sectors and key markets. The recent passing of the US supplemental
aid package to Ukraine and the commitment by the UK Government to
spend 2.5% of GDP by 2030 should build further positive
momentum.
Notable awards received to date
include:
· Armored
Multi-Purpose Vehicles - $754m award for a second full rate
production order
· CV90 Denmark
- awards for upgrades and maintenance
services collectively amounting to over $650m.
· M109
Self-Propelled Howitzers - up to $318m for technical and
sustainment support
· Amphibious Combat
Vehicles - awards received collectively
over $200m
· Geospatial-Intelligence Enterprise Modelling Services -
Electronic Systems announced an IDIQ contract worth up to $182m
from the US National Geospatial-Intelligence Agency
· GeoXO Atmospheric
Composition Instrument - $365m contract from NASA for the National
Oceanic and Atmospheric Administration for Space & Mission
Systems to develop and build a new instrument to monitor global air
quality
· MBDA domestic and
export awards
· The UK MoD has
awarded BAE Systems a contract to maintain and repair gifted L119
Light Guns in Ukraine.
Space & Mission Systems
integration
We completed the acquisition of Ball
Aerospace on 16 February and renamed the business Space &
Mission Systems. The integration programme is underway and the
business has had a good start to the year, securing a number of key
contracts. 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.
Evolving the business for long-term
growth
In support of our growth outlook and
to help meet our customer aspirations, we are investing in our
people, facilities and technology. In 2024, in the UK, our ambition
is to hire a record 2,700 new apprentices, graduates and
undergraduates.
Self-funded R&D is expected to
rise with investments in high technology areas such electronic
warfare, autonomy, laser directed weapons, counter UAS, synthetic
training, electrification applications and space
solutions.
Capital expenditure is
expected to rise compared to 2023, with capital expenditure focused
on maritime, munitions and our Swedish combat vehicle production
capacity and capabilities. These investments are all included
within our rolling 3-year cash guidance.
Capital Distributions
The 2023 final dividend of 18.5
pence per share will be paid, subject to shareholder approval, on 3
June 2024.
We have completed over 90% of the
three-year share buyback programme of up to £1.5bn, which commenced
in July 2022.
In addition, in August 2023, the
Board approved a further share buyback programme of up to £1.5bn
which is expected to commence after completion of the current
programme and conclude within three years of its
commencement.
2024 Interim results
BAE Systems will announce its
interim results for the half year ending 30 June 2024 on 1 August
2024.
For
further information please contact:
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.