BAE Systems plc · LSE:BA.
BAE Systems — Shareholder Meeting (May 2001)
18 slides from BAE Systems's shareholder meeting presentation, May 3, 2001
Slide 1: Annual General Meeting
Annual General Meeting 3 May 2001
Slide 2: Financial Highlights 2000
Financial Highlights 2000 • Profit before interest* of £950m • Underlying profit before interest**of £1,250m • Fully diluted earnings per share* 19.2p – underlying earnings per share** 26.2p • Operating cash flow £1,712m • Net debt £899m • Order book £41bn * Excluding exceptional items and goodwill
Slide 3: 2000 Trading Issues
2000 Trading Issues MM1091
Slide 4: Military Aircraft Throughput Issues
Military Aircraft Throughput Issues Sustaining engineering - order intake 400 £m 300 200 100 0 1997 1998 1999 2000 2001 89% of planned 2001 sales are in order book
Slide 5: Military Aircraft Throughput Issues
Military Aircraft Throughput Issues Hawk sales £m 500 400 300 200 100 0 2000 2001 2002 2003
Slide 6: Nimrod: What Went Wrong? Under-priced Bid
Nimrod: What Went Wrong? Under-priced Bid • Proposal assumed civil systems would be integrated “off the shelf”. In the event subjected to full military clearances • New engineering tool set used, produced expected production improvements but at expense of increased engineering • Changes in resource
Slide 7: Where Are We Now?
Where Are We Now? • Provision seals off troubled history • Development programme will deliver unrivalled system • Heads of Agreement signed covering additional elements required for service entry, and through life support • Contract likely to extend from £2.2bn to £4-5bn – new work will be profitabl
Slide 8: Programmes Sector Growth
Programmes Sector Growth £m 3500 Astute 3000 Type 45 Future Systems 2500 Gripen 2000 Nimrod Hawk 1500 Tornado/Harrier & US Typhoon 1000 Saudi Construction 500 40% Growth 0 2000-2004 2000 2004
Slide 9: Share Price Relative to FTSE and Peers
Share Price Relative to FTSE and Peers 110 Aerospace Defence Composite - Price Index BAE SYSTEMS FTSE 100 - Price Index 105 100 95 90 85 80 75 70 3 Jan 2001 17 Jan 2001 31 Jan 2001 14 Feb 2001 28 Feb 2001 14 Mar 2001 28 Mar 2001 11 Apr 2001
Slide 10: Three Strands of Value Growth
Three Strands of Value Growth Maximise MaximiseValue Valueof ofExisting ExistingPortfolio Portfolio Grow GrowOrder OrderBook Book Reduce ReduceCosts Costs Boost BoostEfficiency Efficiency + Exploit ExploitKey KeyGrowth GrowthOpportunities Opportunities Defence DefenceSystems Systems Commercial Comme
Slide 11: BAE SYSTEMS - First Year
BAE SYSTEMS - First Year Maximise MaximiseValue ValueofofExisting ExistingPortfolio Portfolio ••Successful Successful mergerintegration merger integration 4 4 ••£55m £55m synergy savingsdelivered synergy savings delivered 4 4 ••Overhead Overhead savings & siteclosures savings & site closures 44 ••AI
Slide 12: Airbus - Key Facts 2000
Airbus - Key Facts 2000 • $17.2bn Sales • 311 aircraft delivered • 520 aircraft ordered- valued at $41.3bn • 1,626 aircraft order book
Slide 13: Exploit Further Industry Consolidation
Exploit Further Industry Consolidation • Acquisitions / mergers • Disposals • Airbus AIC • Actuation business sold • Saab Acquires Celsius • Fuel systems sold • Watkins Johnson acquired • Canadian business sold • Femtometrics acquired • Flight Simulation sale agreed • Lockheed Controls acquired • Lo
Slide 14: AES - Integrated EW Solutions
AES - Integrated EW Solutions Integrated IntegratedEW EW Radar RadarWarning Warning Electronics Electronics SupportMeasures Support Measures EW EWand andCNI CNILow LowObservable ObservableApertures Apertures Missile MissileLaunch LaunchDetection Detection Electronic ElectronicCountermeasures Counter
Slide 15: North America - Key facts
North America - Key facts * •£2,447m sales •£295m PBIT •£2.4bn order book •22,000 employees •Located in 30 US states •85% of sales to US Govt * 2000 pro forma includes LMCS and AES
Slide 16: Order Book Growth
Order Book Growth 40,000 30,000 Order book 20,000 Sales 10,000 0 1996 1997 1998 1999 2000 Order book growth leads growth in sales
Slide 17: Geographic Diversity - Sales by Destination
Geographic Diversity - Sales by Destination 14000 £m RoW 12000 10000 Europe 8000 UK 6000 N America 4000 Mid East 2000 0 1997 2000* A more balanced geographic exposure *Pro forma incl full year LMCS and AES
Slide 18: Summary
Summary • Business transformed – Systems strategy delivering – Merger integration successfully completed – Better geographic balance – Better programme spread • Strategy Delivering - Focus on Growth Niches: – Systems – Support – C4ISTAR – Civil Aircraft • Robust plan – Strong cash flow – Good outloo