Babcock International Group Plc · LSE:BAB
Babcock International — FY2026 Earnings Presentation
45 slides from Babcock International's earnings presentation, Jun 22, 2026
Slide 1: FY26 full year results
Babcock FY26 full year results for year ended 31 March 2026 22 June 2026
Slide 2: FY26 summary
FY26 summary Strong underlying results • Re - confirm medium - term guidance Differentiated defence and nuclear capabilities • Aligned to long - term structural growth markets Clear strategic momentum • Strong medium and long - term opportunity set Disciplined capital allocation • Targeted investmen
Slide 3: Type 31 update
Type 31 update Contract update • Outfitting rework and productivity not as planned • Ship one and two impacted, much less on future ships • Revised cost estimate of total programme: • £140m charge (including contingency) • Cash impact over the remaining years of contract FY26 programme progress • Sh
Slide 4: Babcock today
Babcock today Strong performance, focused portfolio, strategically relevant FY26 highlights 1 Sustained delivery Organic Margin improvement * • FY26 continues strong track record of performance revenue growth • £5.2bn revenue, >8% margin, strong cash generation 2 8% + 70 bps to 8.2% Focused portfoli
Slide 5: Financial Review
Financial Review David Mellors CFO 5
Slide 6: Track record since FY21
Track record since FY21 Value creation returned or shareholder returning to £4 bn value created £0.5 bn shareholders Strength pension investment debt deficit grade rating £1 bn reduction £0.6 bn reduction BBB+ retained Performance operating avg cash + 52% revenue * + 220 bps margin * + 113% profit *
Slide 7: FY26 underlying financial highlights
FY26 underlying financial highlights +8% +70 bps +19% +20% revenue growth margin improvement * profit growth * EPS growth * £5.2bn 8.2% £433m 60.5p 84% £262m £200m +15% buyback completed + dividend growth cash conversion * free cash flow further FY27 £200m 7.5p All figures underlying - see slide 32
Slide 8: Organic revenue bridge
Organic revenue bridge Organic growth - at constant FX 8% 14% (3)% 34% 10 % (2) % 8% 109 5,273 96 254 ( 32 ) 5,178 128 4,831 ( 17 ) (£m) FY26 Type 31 FY25 FX Marine Nuclear Land Aviation revenue FY26 excl. Type 31 and disposals revenue reversal reversal All figures rounded 8 Babcock International Gr
Slide 9: Underlying operating profit bridge
Underlying operating profit bridge 8.2 % 7.1% margin margin 8.8 % 9.5% margin +90 bps margin +110bps +70 bps 6.5% 11 433 margin 8 +40bps 7.5% 37 margin 1 14 ( 140 ) 363 5.7 % margin 293 (£m) FY26 FX Type 31 total FY25 Marine Nuclear Land Aviation excl. Type 31 charge FY26 and disposals charge All fi
Slide 10: Consistent delivery on margin guidance
Consistent delivery on margin guidance Profit and margin performance 9.0% Underlying operating profit * 8.2% £400m Underlying operating margin * 7.5% 8.0% Drivers of margin improvement £433m 7.0% 6.4% 6.6% £363m 7.0% • Growth of quality business 6.0% • Productivity gains £300m £311m 6.0% • Process o
Slide 11: Marine
Marine FY26 FY25 Contract backlog : Contract backlog £2,807m £3,027m Scope increases and renewals in UK and international defence Revenue £1,592m £1,576m Two - year extension to FMSP surface ship support Underlying operating profit £(30)m £97m Revenue traded on previous years orders Underlying
Slide 12: Nuclear
Nuclear FY26 FY25 Contract backlog: £0.5bn FMSP six - month bridging agreement and AWE awards Contract backlog £1,792m £1,984m Offset by revenue traded on large multi - year contracts (FMSP and MIP) Revenue £2,070m £1,816m Revenue up 14% (at constant FX) : Underlying operating profit £197m £160m
Slide 13: Land
Land FY26 FY25 Contract backlog: Contract backlog £3,087 £3,466m Over £650m of defence and civil contracts and extensions placed £1bn, five - year DSG follow on signed in prior year Revenue £1,084m £1,117m Revenue traded on long - term contracts Underlying operating profit £95m £86m Revenue do
Slide 14: Aviation
Aviation FY26 FY25 Contract backlog up: Multiple defence contract extensions, including LAFT2 (c.£125m) Contract backlog £2,069m £1,940m Australia Border Force contract (A$230m) Revenue £431m £322m Revenue up 34% (at constant FX) : Underlying operating profit £31m £20m Ramp up of Mentor 2 in F
Slide 15: Cash flow
Cash flow (before Type 31 impacts) £m FY26 FY25 Capex : Continued investment across the portfolio Underlying operating profit* 433 363 Depreciation & amortisation (capex & leases) 111 Working capital: 135 • Expected unwind of advances Net capital expenditure (122) (107) • Increase in inventory Lease
Slide 16: Disciplined capital allocation delivering growth & returns
Disciplined capital allocation delivering growth & returns Priorities 1 2 3 Organic investment Financial strength Ordinary dividend Investment to support business Maintain strong balance sheet Pay an ordinary dividend operations and enhance growth potential and investment grade rating Leverage reduc
Slide 17: Summary
Summary Strong performance on all metrics, offset by Type 31 FY27: expect another year of good progress , 70% revenue cover at 1 April 2026 Reaffirm medium - term guidance Additional FY27 £200m buyback 17 Babcock International Group – Full year results for year ended 31 March 2026 © 2026 Babcock Int
Slide 18: Business update
Business update David Lockwood CEO
Slide 19: Instability driving structural growth in defence and energy
Instability driving structural growth in defence and energy Global Rising Rapidly evolving uncertainty threats technology Global defence UK defence Civil nuclear • Enduring conflicts and increased threat environment • New nuclear resurgence • NATO defence and security spending targets increasing (to
Slide 20: Enabling UK military readiness by 2030
Enabling UK military readiness by 2030 Military focus Babcock current role Upside scenario SUPPORT • Existing fleets • Land vehicles (100%) • Nuclear submarines (100%) • Equipment in procurement • Higher utilisation / volume • Naval ship support (>60%) • Astute, Dreadnought, T31, T26, Ajax • Increas
Slide 21: Babcock's advantage
Babcock’s advantage Mission - critical Differentiated Deep customer Partnership defence and capability embed and model and strategic in lifetime long - term supply chain resilience engineering relationships integration Mission - critical engineering in high consequence environments 21 Babcock Intern
Slide 22: Momentum building
Momentum building Defence Nuclear Indonesia Submarine build Light Utility Vehicle SMR roll out • Indonesia £4bn Maritime • Qualified supplier on US • Initial Light Utility Vehicle • GBN - E Owner’s Engineer Partnership Programme (MPP) Virginia Class submarine build contracts: Albania and UK contract
Slide 23: Long-term growth journey
Long - term growth journey 2026 2050 Subs support FMSP GATEWAY Fleet transition and greater fleet sizes Multi - year Defence AUKUS H&B defence Infrastructure, supply chain, training, support and operations Multi - £bn nuclear Subs build HII US Virginia Class block build – potential UK opportunities
Slide 24: Defence nuclear: Strategic partnerships - HII
Defence nuclear: Strategic partnerships - HII HII strategic partnership current focus • H&B Defence: AUKUS • ARMOR: Hybrid navies / UUVs (launch and recovery) • Civil nuclear MOU • Virginia Class submarine build Virginia Class submarine build • Drivers: increased production high on US priority • Dec
Slide 25: UK new nuclear is entering a multi-decade growth cycle
UK new nuclear is entering a multi - decade growth cycle Structural growth driver Cavendish Nuclear Clean Energy 2050 UK nuclear power target: 24GW Already scaled and growing Enduring growth potential (GW) UK’s largest c.3000 Near - term growth anchored 20 Generating capacity sovereign provider work
Slide 26: Harry Holt – Deputy CEO
H arry Holt – Deputy CEO • Introduction • Transition • Global context • Themes of the next chapter • Growth : new nature of warfare, war - fighting readiness, national strategic resilience • Performance • Initial priorities • Operational performance • Talent and Team • Strategic clarity 26 Babcock I
Slide 27: Summary
Summary Strong underlying results • Re - confirm medium - term guidance Differentiated defence and nuclear capabilities • Aligned to long - term structural growth markets Clear strategic momentum • Strong medium and long - term opportunity set Disciplined capital allocation • Targeted investment and
Slide 28: Q&A
Q&A 28 Babcock International Group – Full year results for year ended 31 March 2026 © 2026 Babcock International Group - Not Subject to Export Control
Slide 29: Appendix
Appendix ° ® Babcock
Slide 30: FY26 results split by sector
FY26 results split by sector Revenue * Underlying operating profit * Contract backlog 8% 7% 21% 25% 29% 31% 21% 22% £5.3bn £ 433 m £ 9.8 bn 32% 18% 40% 46% Marine Nuclear Land Aviation 30 Babcock International Group – Full year results for year ended 31 March 2026 * Excluding the impacts of the Type
Slide 31: FY26 Group splits
FY26 Group splits Revenue profile * Geographical revenue * Contract backlog 7% 14% 17% 4% 5% 6% 10% 9% £ 5.3 bn 7% £ 5.3 bn £9.8bn 60% 12% 62% 16% 71% Defence UK UK Aus & NZ Defence UK Defence International S. Africa N. America Defence International Civil UK Europe ROW Civil UK Civil International C
Slide 32: Underlying financial results overview
Underlying financial results overview Organic FY26 FY25 growth Backlog down 6% driven by execution of long - term contracts Backlog £9.8bn £10.4bn Organic revenue growth 10% (at constant FX) * Revenue £5,178 £4,831m • Growth driven by Nuclear, Marine and Aviation Underlying operating profit £293m £3
Slide 33: Impacts of the Type 31 charge – 1
Impacts of the Type 31 charge –1 FY26 Underlying results Impacts of the Underlying excluding Type 31 charge Type 31 charge results Revenue £5,273m £(96)m £5,178m YOY growth 9% 7% Organic growth (at constant FX) 10% 8% Underlying operating profit £433m £(140)m £293m YOY growth 19% (19)% Underlying op
Slide 34: Impacts of the Type 31 charge – 2
Impacts of the Type 31 charge –2 Impacts of Before Type 31 Underlying £m charge Type 31 results charge Underlying operating profit 433 (140) 293 No impact on free cash flow: Depreciation & amortisation (capex & leases) 135 • £140m charge reducing operating profit 135 • £96m lower working capital fro
Slide 35: Statutory to underlying reconciliation
Statutory to underlying reconciliation FY26 FY25 (£m) Specific Specific Underlying Adjusting Statutory Underlying Adjusting Statutory Items Items Revenue 5,177.7 – 5,177.7 4,831.3 4,831.3 Operating profit / (loss) 293.3 11.8 305.1 362.9 1.0 363.9 Operating margin 5.7% – 5.9% 7.5% 7.5% Share of resul
Slide 36: Net debt / EBITDA (covenant basis)
Net debt / EBITDA (covenant basis) FY26 FY25 (£m) (Rolling 12 months) (Rolling 12 months) Underlying operating profit 293 363 Depreciation and amortisation 85 78 Other covenant adjustments 2 (2) EBITDA 380 439 JV and associate dividends 11 12 EBITDA + JV and associate dividends 391 451 Net debt (23)
Slide 37: Balance sheet strength and debt maturity
Balance sheet strength and debt maturity Net debt and gearing ratio Debt maturity profile £(1,750)m 3.0x £1.5bn £(1,500)m £(1,609)m 2.5x RCF 2031 £600m £(1,250)m £(1,352)m GBP bond 2026 £300m 2.0x £1.0bn £(1,000)m Euro bond 2027 €550m 1.5x £(969)m £(750)m 1.0x £.5bn £(500)m £(564)m £(435)m 0.5x £(37
Slide 38: Balance sheet strength – progress on pension derisking
Balance sheet strength – progress on pension derisking Technical pension deficit £(700)m Technical provision deficit – actuarial deficit (aggregated)* £600m • Around £100m aggregated technical provision deficit (FY25: £125m) £(600)m reduction Funding agreements £(500)m • Long - term funding agreemen
Slide 39: FY sector detail – organic, ongoing businesses
FY sector detail – organic, ongoing businesses Underlying Revenue Underlying margin Contract backlog operating profit (£m) FY26 FY25 FY24 FY23 FY22 FY21 FY26 FY25 FY24 FY23 FY22 FY21 FY26 FY25 FY24 FY23 FY22 FY21 FY26 FY25 FY24 FY23 FY22 FY21 Marine 1 1,687 1,576 1,495 1,482 1,209 1,277 110 97 103 1
Slide 40: FY sector detail - reported
FY sector detail - reported Revenue Underlying operating profit Underlying margin Contract backlog (£m) FY26 FY25 FY24 FY23 FY22 FY26 FY25 FY24 FY23 FY22 FY26 FY25 FY24 FY23 FY22 FY26 FY25 FY24 FY23 FY22 Marine 1,592 1,576 1,429 1,440 1,259 (30) 97 13 13 98 (1.9)% 6.1% 0.9% 0.9% 7.8% 2,807 3,027 2,9
Slide 41: Marine – key contracts
Marine – key contracts Contract Customer Start End Country Notes Type 31 + Capability Insertion UK MOD 2019 2029 UK Design, build and assembly of five general purpose frigates for the Royal Navy Programme Future Maritime Support Programme UK MOD 2021 2028 UK Through - life ship engineering managemen
Slide 42: Nuclear – key contracts
Nuclear – key contracts Contract Customer Start End Country Notes Future Maritime Support UK MOD 2021 2026 UK Nuclear submarine, infrastructure and license site elements of FMSP for the Royal Navy Programme (FMSP) Major Infrastructure Project delivery for the upgrade works to Devonport Dockyard’s 9,
Slide 43: Land – key contracts
Land – key contracts Contract Customer Start End Country Notes JP9101 – Enhanced Defence High Frequency ADF 2023 2033 Australia Operation, support and technology upgrade programme for the Australian Defence Force Communications Maintenance, repair and overhaul to over 35,000 vehicles of the British
Slide 44: Aviation – key contracts
Aviation – key contracts Contract Customer Start End Country Notes Aircraft, training support and maintenance to the French Air Force contract includes five Mentor 1 French DOD 2021 2027 France one - year options for extension Aircraft, training support and maintenance to the French Air Force, Space
Slide 45: Disclaimer
Disclaimer This document has been prepared by Babcock International Group PLC By their nature, forward - looking statements involve known and unknown (the “Company”) solely for use at a presentation in connection with the risks, uncertainties and other factors, many of which are beyond Company’s res
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