Slide 1: BAE Systems 2011 Preliminary Results
BAE Systems 2011 Preliminary Results 16 February 2012 1 © BAE Systems 2012
Slide 2: Ian King
Ian King 2 © BAE Systems 2012
Slide 3: Strategy and business environment
Strategy and business environment Strategy to sustain and provide platform for growth Improve profit and cash generation Grow Cyber, Intelligence and Security Grow Electronic Systems Drive value from Platforms and Services positions Increase International business US Budget passed follow
Slide 4: Strategy and business environment
Strategy and business environment Strategy to sustain and provide platform for growth Improve profit and cash generation Grow Cyber, Intelligence and Security Grow Electronic Systems Drive value from Platforms and Services positions Increase International business US Budget passed follow
Slide 5: Strategy and business environment
Strategy and business environment Strategy to sustain and provide platform for growth Improve profit and cash generation Grow Cyber, Intelligence and Security Grow Electronic Systems Drive value from Platforms and Services positions Increase International business US Budget passed follow
Slide 6: International Markets
International Markets • India – Continued Hawk order intake – MMRCA – Typhoon bid – Land opportunities progressing • Brazil OPV – New business – Opportunity to expand Brazilian Navy business relationship • Australia – Good positions across defence domains • Oman – Typhoon RFP released • KSA – Budget
Slide 7: Summary
Summary • Strong performance in challenging environment – Cost reduction and efficiency improvement – Good programme execution – Broad international footprint – Strong positions in priority capabilities • Resilient platform for future growth • Unambiguous focus on shareholder value 7 © BAE Systems 2
Slide 8: Peter Lynas
Peter Lynas 8 © BAE Systems 2012
Slide 9: Financial Highlights
Financial Highlights Sales (1) £19,154m - 14% Underlying EBITA (1,2) £2,025m - 7% Underlying Earnings per Share (1,3) - including R&D tax benefit 45.6p - excluding R&D tax benefit 39.7p Operating Business Cash Flow £634m Net Debt £(1,439)m Order Book £36.2bn Dividend per Share 18.8p + 7% (1) Continu
Slide 10: Summary Income Statement (continuing operations)
Summary Income Statement (continuing operations) 2011 2010 2011 2010 £m Underlying Underlying Reported Reported Sales 19,154 22,275 19,154 22,275 EBITA 2,025 2,179 1,947 2,164 Amortisation / impairment - goodwill (94) (84) - other intangibles (254) (433) Finance costs * (199) (191) (106) (194) Profi
Slide 11: Balance Sheet
Balance Sheet as at 31 December (£m) 2011 2010 Intangible fixed assets 11,465 11,216 Tangible fixed assets 2,626 2,848 Investments 788 798 Working capital (5,677) (6,641) Pension deficit (4,217) (3,146) Tax assets & liabilities 975 580 Financial assets & liabilities (219) (10) Net debt (1,439) (242)
Slide 12: Pension Deficit (IAS 19)
Pension Deficit (IAS 19) £bn 31 Dec 11 30 Jun 11 31 Dec 10 Assets * 18.1 17.9 17.5 Liabilities (23.3) (21.9) (21.3) Pension Deficit (5.2) (4.0) (3.8) Group share of deficit, pre-tax (4.2) (3.2) (3.1) Group share of deficit, post-tax (3.0) (2.2) (2.1) Real Discount Rates UK 1.9% 2.0% 2.1% bond yields
Slide 13: Funding Deficit
Funding Deficit 4.0 • Funding deficit increased by £1.1bn £3.0bn £2.9bn 3.0 • Revised deficit recovery plans agreed £bn 2.0 • Deficit recovery periods sustained £1.9bn • Incremental funding of £0.2bn over 1.0 next 5 years • Next funding valuation date April 2014 - Previous Current Deficit Deficit De
Slide 14: Operating Cash Flow
Operating Cash Flow £m 2011 2010 Cash flow from operating activities 951 1,535 Capital expenditure (net) (268) (364) Dividends from equity accounted investments 88 71 Contribution to Trust (re: pensions) (137) (25) Cash held for charitable contribution to Tanzania - (30) Operating business cash flow
Slide 15: Movement in Net Debt
Movement in Net Debt £m 2011 2010 Opening Net (Debt) / Cash (242) 403 Operating business cash flow 634 1,187 Interest and Tax (433) (525) Equity dividends paid (606) (574) Share purchases (509) (520) Acquisitions and disposals (256) (88) Foreign exchange and other movements (27) (125) Closing Net De
Slide 16: Capital Allocation
Capital Allocation Gross Net £bn Debt Cash Debt 31 December 2010 (3.0) 2.8 (0.2) Cash Flow - (1.2) (1.2) Debt redemption - term debt 1.0 (1.0) - Debt issuance - term debt (0.8) 0.8 - - commercial paper (0.4) 0.4 - 31 December 2011 (3.2) 1.8 (1.4) Near-term cash utilisation includes: - debt redemptio
Slide 17: Electronic Systems
Electronic Systems 2011 SALES 2011 2010 Commercial 14% Sales $4,243m $4,587m Underlying EBITA $619m $703m Margin 14.6% 15.3% Defence Cash flow $430m $567m 86% Order backlog $5.6bn $5.5bn 17 © BAE Systems 2012
Slide 18: Cyber & Intelligence
Cyber & Intelligence 2011 SALES 2011 2010 Detica $465m Sales $2,244m $1,856m Underlying EBITA $218m $167m Margin 9.7% 9.0% Cash flow $197m $138m US $1,779m Order backlog $1.7bn $1.4bn 18 © BAE Systems 2012
Slide 19: Platforms & Services (US)
Platforms & Services (US) 2011 SALES Support Solutions 2011 2010 Sales $8,511m $11,852m Underlying EBITA $767m $1,125m Land & Armaments Margin 9.0% 9.5% Cash flow $658m $1,494m Platforms 32% Order backlog $13.9bn $14.2bn Military & Technical Services 68% 19 © BAE Systems 2012
Slide 20: Platforms & Services (US)
Platforms & Services (US) Land & Support Armaments Solutions 2011 2010 2011 2010 Sales $5,678m $9,162m $2,833m $2,690m Underlying EBITA $530m $933m $237m $192m Margin 9.3% 10.2% 8.4% 7.1% Cash flow $443m $1,326m $215m $168m Order backlog $8.7bn $9.7bn $5.2bn $4.5bn 20 © BAE Systems 2012
Slide 21: Platforms & Services (UK)
Platforms & Services (UK) 2011 SALES Maritime 2011 2010 Sales £6,258m £6,529m Underlying EBITA £658m £522m Air Margin 10.5% 8.0% Cash flow £69m £191m Platforms 68% Order book £18.7bn £21.0bn Military & Technical Services 32% 21 © BAE Systems 2012
Slide 22: Platforms & Services (International)
Platforms & Services (International) 2011 SALES KSA MBDA, 2011 2010 India Sales £3,794m £4,325m Underlying EBITA £449m £449m Australia Margin 11.8% 10.4% Cash flow £80m £190m Platforms 35% Order book £8.3bn £9.1bn Military & Technical Services 65% 22 © BAE Systems 2012
Slide 23: Underlying Earnings Per Share
Underlying Earnings Per Share 50 5.9 * 2.3 0.9 40 1.3 0.7 0.7 6.0 2.7 1.3 30 45.6 20 39.8 39.7 10 pence 0 2010 Land Export OPV Ratex T&T OPV Other Currency Tax Share 2011 Restated charge (net) recovery write-up performance translation Rate Base * UK R&D tax benefit 23 © BAE Systems 2012
Slide 24: 2012 Guidance
2012 Guidance 2011 Actual 2012 Guidance Sales Margin Sales Margin Electronic Systems 2,645 14.6% stable 12% - 14% Cyber & Intelligence 1,399 9.7% +3% - +7% 8.5% - 9.5% Platforms & Services (US) 5,305 9.0% (5)% - (10)% 9.0% - 9.5% Platforms & Services (UK) 6,258 10.5% stable 10% - 12% Platforms & Ser
Slide 25: 2012 Guidance
2012 Guidance 2011 Actual 2012 Guidance Sales Margin Sales Margin Electronic Systems 2,645 14.6% stable 12% - 14% Cyber & Intelligence 1,399 9.7% +3% - +7% 8.5% - 9.5% Platforms & Services (US) 5,305 9.0% (5)% - (10)% 9.0% - 9.5% Platforms & Services (UK) 6,258 10.5% stable 10% - 12% Platforms & Ser
Slide 26: Summary
Summary • Strong performance in challenging environment – Cost reduction and efficiency improvement – Good programme execution – Broad international footprint – Strong positions in priority capabilities • Resilient platform for future growth • Unambiguous focus on shareholder value 26 © BAE Systems
Slide 27: BAE Systems 2011 Preliminary Results
BAE Systems 2011 Preliminary Results 16 February 2012 27 © BAE Systems 2012