Babcock International Group Plc · LSE:BAB
Babcock International — FY2025 Earnings Presentation
43 slides from Babcock International's earnings presentation, Jun 25, 2025
Slide 1: Preliminary results for the year ended 31 March 2025
Babcock International Group Preliminary results for the year ended 31 March 2025 25 June 2025
Slide 2: A new era of defence: Strongly positioned
A new era of defence Strongly positioned Global market conditions increasingly supportive • Defence and nuclear Strong financial performance • Upgraded in-year • Balance sheet strength Disciplined capital allocation • Investment for growth • Shareholder returns • Dividend • Buyback announced Upgrade
Slide 3: Financial Review
Financial Review David Mellors CFO 3
Slide 4: Key messages
Key messages Strong revenue and profit growth Cash flow ahead of expectations, strong balance sheet Upgraded medium-term guidance, buyback announced 4 Babcock International Group – Full year results for year ended 31 March 2025 © 2025 Babcock International Group - Not Subject to Export Control
Slide 5: Financial highlights
Financial highlights +11% +17% +50bps revenue growth pro t growth * margin improvement* £4.8bn £363m 7.5% 82% £153m cash conversion free cash ow +23% +30% £200m EPS growth * dividend growth buyback 50.3p 6.5p 5 Babcock International Group – Full year results for year ended 31 March 2025 All figures
Slide 6: Organic revenue bridge
Organic revenue bridge (£m) Organic growth - at constant FX 12% 19% 2% (4)% 11% 295 21 ( 14 ) 4,831 161 4,390 ( 22 ) FY24 FX Marine Nuclear Land Aviation FY25 6 Babcock International Group – Full year results for year ended 31 March 2025 © 2025 Babcock International Group - Not Subject to Export Con
Slide 7: Underlying operating profit bridge
Underlying operating pro t bridge (£m) +17% 7.5% at constant FX margin 7.0% margin 54 5.4% 363 73 margin 311 (2) 238 FY24 Contract provision FY24 FX Trading FY25 reported and profit on disposal (excl. contract provision and profit on disposal) 7 Babcock International Group – Full year results for ye
Slide 8: Marine
Marine FY25 FY24 Contract backlog up 1%: LGE record order intake (£430m) Contract backlog £3,027m £2,993m Type 31 capability insertion programme and Skynet growth Revenue traded on long-term contracts Revenue £1,576m £1,429m Underlying operating profit £97m £13m Revenue up 12% (at constant FX): Full
Slide 9: Nuclear
Nuclear FY25 FY24 Contract backlog down 36% - as expected Contract backlog £1,984m £3,105m Trading on long-term defence contracts (FMSP final year) Revenue £1,816m £1,521m Large prior year orders for Major Infrastructure Programme (MIP) (£750m) and Victorious (£560m) Underlying operating profit £160
Slide 10: Land
Land FY25 FY24 Contract backlog Contract backlog up 34% (at constant FX): £3,466m £2,594m DSG ‘Reframe’ five-year extension awarded (£1.0bn) Revenue £1,117m £1,099m Defence extensions including UK training and Australia Underlying operating profit £86m £96m Revenue up 2% (at constant FX): UK defence
Slide 11: Aviation
Aviation FY25 FY24 Contract backlog up 18% (at constant FX): Contract backlog £1,940m £1,641m Mentor 2* and UK defence contract awards Revenue £322m £342m Revenue down 4% (at constant FX): Underlying operating profit £20m £19m Profile of the French H160 defence contracts between aircraft delivery an
Slide 12: Free cash flow ahead of expectations
Free cash ow ahead of expectations £m FY25 FY24 Working capital ahead of expectations: small inflow Underlying operating profit 363 238 • Favourable large programmes milestones • Similar level of advanced customer receipts at period end Right of use asset depreciation 33 40 Other depreciation and am
Slide 13: Balance sheet strength – net debt
Balance sheet strength – net debt Net debt Gearing ratio HY21 FY21 FY22 FY23 FY24 FY25 3.0x £0m 2.5x £(373)m £(435)m £(564)m 2.0x £(500)m £(969)m 1.5x £(1,000)m 1.0x £(1,352)m 0.5x £(1,609)m £(1,500)m 0.0x HY21 FY21 FY22 FY23 FY24 FY25 £(2,000)m Facility headroom BBB+ rating retained 0.3x gearing ra
Slide 14: Balance sheet strength – progress on pension derisking
Balance sheet strength – progress on pension derisking Technical pension deficit £(700)m c.£600m Technical provision deficit – actuarial deficit (aggregated)* • Around £125m aggregated technical provision deficit (FY24: £(600)m reduction c.£200m) £(500)m Funding agreements • Long-term funding agreem
Slide 15: Updated medium-term guidance
Updated medium-term guidance FY23 medium-term guidance FY25 medium-term guidance Organic revenue MID-SINGLE-DIGIT MID-SINGLE-DIGIT growth average annual growth average annual growth 8% to be reached 8% FY26 one year early Operating ≥8% margin margin ≥9% medium term ≥9% upgraded medium-term target Op
Slide 16: Margin guidance
Margin guidance Zero margin Profit and margin medium term performance* legacy contract £450m 9% ‘fade’ Underlying operating profit Productivity £400m Underlying operating margin 7.5% 8% gains 7.0% 6.6% ≥9% margin £350m £363m 7% 6.4% 6.0% • Improved delivery £300m £311m 6% £250m £265m 5% Process • Be
Slide 17: A pivotal year
A pivotal year David Lockwood CEO
Slide 18: Continued focus on delivery
Continued focus on delivery Major milestones • 9 Dock upgrade in our Devonport facility, HMS Victorious docked down • Float-off and dock of HMS Venturer, the first-in-class Type 31 ship • Commenced work on Type 31 ship 3, HMS Formidable • Five-year extension of DSG ‘Reframe’ • Significant ramp up at
Slide 19: Structural growth drivers
Structural grow th drivers Signi cant increase in market opportunity Global insecurity Rising global threats Rapidly evolving technology Global defence UK defence Civil nuclear • Enduring conflicts and increased threat environment • Climate change driving nuclear • NATO defence spending targets incr
Slide 20: Global defence: well-positioned for increasing opportunity set
Global defence Well-positioned for increasing opportunity set Positioned Targeting Addressed with in the right With the right flexible models existing and future markets capabilities programmes • Defence spending • Civil and defence nuclear • Nuclear subs • Strategic partnerships increasing in focus
Slide 21: UK defence
UK defence Supportive market fundamentals • Budget increasing to 2.6% by 2027 - 3% in next parliament • Committed to NATO – 5% on national security by 2035urity by 2035 • Strategic Defence Review (SDR) sets out UK Government priorities, Defence Industrial Strategy to follow • Committed to Europe and
Slide 22: Positioned to deliver UK's near and long-term goals
Positioned to deliver UK’s near and long-term goals SDR requirements Babcock’s capabilities and expertise War ghting Hybrid navy − 4 x deterrent + 12 x SSN-AUKUS − Submarine design, systems, support and assets readiness − Cutting edge frigates and ships − Warship build, integration, support and asse
Slide 23: Defence dividend
Defence dividend Industry generating growth and prosperity Delivering broad economic and social benefit • Supported a total contribution of £4.3bn to UK economy in FY24* • Delivering regeneration in the places we work • Largest UK defence industry employer of veterans • Introduced free annual health
Slide 24: Positioned for UK nuclear renaissance
Positioned for UK nuclear renaissance Market drivers UK GOV commitments Babcock positioning UK target to 24GW capacity by 2050 • £14bn UK commitment to • Key alliance partner at Hinkley Point C (HPC) 25GW Sizewell C (SZC) Generating capacity 20GW • First three SMRs to be • SZC to replicate HPC desig
Slide 25: Capital allocation
Capital allocation Priorities 1 2 3 Organic investment Financial strength Ordinary dividend Sustain investment to support business Maintain strong balance sheet Pay an ordinary dividend operations and enhance growth potential and investment grade rating Capex to depreciation 1.6x Leverage reduced to
Slide 26: Summary: Strongly positioned
Summary Strongly positioned Strong nancial performance in FY25 Positive global market conditions Upgrade to medium-term guidance Marine investor event, Rosyth, Scotland, 4 September 2025 26 Babcock International Group – Full year results for year ended 31 March 2025 © 2025 Babcock International Grou
Slide 27: Q&A
O&A Babcock
Slide 28: reating
28 reating a safe and secure world together Babcock
Slide 29: Appendix
Appendix : ® Babcock
Slide 30: FY25 results split by sector
FY25 results split by sector Revenue Underlying operating pro t Contract backlog 7% 5% 19% 19% 27% 33% 24% 23% £4.8bn £363m £10.4bn 29% 33% 37% 44% Marine Nuclear Land Aviation 30 Babcock International Group – Full year results for year ended 31 March 2025 © 2025 Babcock International Group - Not Su
Slide 31: FY25 Group splits
FY25 Group splits Defence revenue Geographical revenue Contract backlog 16% 9% 14% 2% 3% 7% 9% 10% £4.8bn 8% £4.8bn £10.4bn 62% 15% 62% 12% 71% Defence UK UK Aus & NZ Defence UK Defence International South Africa Canada Defence International Civil UK France ROW Civil UK Civil International Civil Int
Slide 32: Underlying financial results overview
Underlying nancial results overview FY25 FY24 Backlog up 1% driven by Land and Aviation Backlog £10.4bn £10.3bn Organic revenue growth 11% (at constant FX) Revenue £4,831m £4,390m • Driven by Nuclear and Marine Underlying operating profit £363m £238m Underlying operating profit up 17% (FY24: £311m)*
Slide 33: Statutory to underlying reconciliation
Statutory to underlying reconciliation FY25 FY24 (£m) Specific Specific Underlying Adjusting Statutory Underlying Adjusting Statutory Items Items Revenue 4,831.3 4,831.3 4,390.1 - 4,390.1 Operating profit / (loss) 362.9 1.0 363.9 237.8 3.8 241.6 Share of results of joint ventures and associates 8.4
Slide 34: Sector detail – organic, ongoing businesses
Sector detail – organic, ongoing businesses Underlying operating Revenue Underlying margin Contract backlog profit (£m) FY25 FY24 FY23 FY22 FY21 FY25 FY24 FY23 FY22 FY21 FY25 FY24 FY23 FY22 FY21 FY25 FY24 FY23 FY22 FY21 Marine1 1,576 1,495 1,482 1,209 1,277 96.5 103.1 112.8 90.3 82.2 6.1% 6.9% 7.6%
Slide 35: Sector detail - reported
Sector detail - reported Revenue Underlying operating profit Underlying margin Contract backlog (£m) FY25 FY24 FY23 FY22 FY25 FY24 FY23 FY22 FY25 FY24 FY23 FY22 FY25 FY24 FY23 FY22 Marine1 1,576 1,429 1,440 1,259 96.5 13.1 12.7 98.0 6.1% 0.9% 0.9% 7.8% 3,027 2,993 2,581 2,492 Nuclear 1,816 1,521 1,1
Slide 36: Net debt / EBITDA (covenant basis)
Net debt / EBITDA (covenant basis) FY25 FY24 (£m) (Rolling 12 months) (Rolling 12 months) Underlying operating profit 363 238 Depreciation and amortisation 78 67 Other covenant adjustments (2) (6) EBITDA 439 299 JV and associate dividends 12 7 EBITDA + JV and associate dividends 451 306 Net debt (10
Slide 37: Liquidity and debt maturity profile
Liquidity and debt maturity pro le Debt maturity profile RCF 20262 £775m £2,000m • Exposure to variable debt (85% is fixed rate), FY25 net debt1 GBP bond 20263 £300m £(101)m only £123m drawn debt is variable rate Euro bond 20274 €550m • c.£1.6bn of total available borrowings and facilities £1,500m •
Slide 38: International defence
International defence Positioned With the right Addressed with Targeting in the right capabilities flexible models existing and future markets programmes • Civil and defence nuclear • Defence spending • Naval engineering (eg subs • Nuclear subs – eg AUKUS, • Strategic partnerships (eg increasing in
Slide 39: Marine – key contracts
Marine – key contracts Contract Customer Start End Country Notes Type 31 + Capability Insertion UK MOD 2019 2028 UK Design, build and assembly of five general purpose frigates for the Royal Navy Programme Future Maritime Support Programme UK MOD 2021 2026 UK Through-life ship engineering management
Slide 40: 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 41: 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 42: 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 F
Slide 43: 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 resul
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