Bae Systems Plc · LSE:BA.
Bae Systems — H1 2026 Earnings Presentation
40 slides from Bae Systems's earnings presentation, Jul 30, 2026
Slide 1: Half year results 2026
1 Half year results 2026 30 July 2026 © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.
Slide 2: Cautionary statement
2 Cautionary statement All statements other than statements of historical fact Forward-looking statements are not guarantees of future BAE Systems plc and its directors accept no liability to third included in this document, including, without limitation, those performance and the actual results of
Slide 3: Agenda
3 Agenda Half year review Charles Woodburn, CEO Agenda US update Tom Arseneault, President & CEO Inc. Business update Charles Woodburn, CEO Image to be added Financial review Brad Greve, CFO Closing comments and Q&A Charles Woodburn, CEO © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a regi
Slide 4: Our three key messages today
4 Our three key messages today 1 Strong operational and financial results Geographic, domain and product mix 2 position us well for global defence needs 3 Excellent visibility of long-term growth 2026 – half year review Charles Woodburn, Chief Executive Officer © 2026 BAE Systems. All Rights Reserve
Slide 5: 2026 half year – another strong operational and financial performance
5 2026 half year – another strong operational and financial performance Strong operational Orders Underlying EBIT performance £16.4bn £1.7bn 2025: £1.6bn 2025: £13.2bn Strong sales and profit growth Sales Free cash flow Increased capex and R&D to support future growth £15.8bn 2025: £14.6bn £1.8bn 20
Slide 6: Global portfolio gives excellent breadth of opportunity
6 Global portfolio gives excellent breadth of opportunity Middle East Asia Pacific • Recent conflict has • Elevated threat increased focus on environment. defence spending. • Japan defence budget • Long term relationships to double by FY27; in the region – increased spending US a differentiator. in
Slide 7: Europe – high growth and visibility underpinned by large backlog
7 Europe – high growth and visibility underpinned by large backlog European sales in HY 2026 Equipment and services are £2.1bn integral to the defence of + 30% year-on-year 25+ countries Combat aircraft European order intake £4.8bn 30% of group Missile and air defence European order backlog £28bn Eu
Slide 8: MBDA: Strong revenue growth outlook, supported by backlog and investment
8 MBDA: Strong revenue growth outlook, supported by backlog and investment Portfolio aligned to current needs Strong performance continued in HY 2026 Increasing investment to meet high demand Investment increased to €5bn Air defence Order intake 2026 - 2030 €6.5bn 2.3x book to bill Sites & digitalis
Slide 9: US update
9 US update Tom Arseneault, President & CEO Inc. © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.
Slide 10: Aligned to the US Administration’s key defense priorities
10 Aligned to the US Administration’s key defense priorities Drone/counter drone Munitions production Space-based capabilities Golden Dome systems DoW image We are developing systems and delivering products across the US Administration’s priority areas and continue to invest in technology and produc
Slide 11: Delivering on critical munitions production
11 Delivering on critical munitions production • Investments support our position to meet critical demand, including 10 of 12 DoW priority munitions programmes. • Advancing priority munitions through multi-year procurements, such as THAAD, and leveraging our expanding capacity. • Continue to see str
Slide 12: Building on strong performance in our space business
12 Building on strong performance in our space business • Space & Mission Systems sales grew nearly 30% in the first half of 2026 over the same period in 2025. • Increasing demand for Elevation and Evolve spacecraft product lines, aligned with customer priorities for scalable, cost-effective solutio
Slide 13: Ramping our Sweden businesses to meet European demand
13 Ramping our Sweden businesses to meet European demand • Over $300m of investments in our Hägglunds business to support delivery of record order book. • Hägglunds increasing production capacity by 400% to address customer demand across Europe. • Bofors is increasing production capacity to meet str
Slide 14: Business update
14 Business update Charles Woodburn, Chief Executive Officer © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.
Slide 15: Developing the future of defence technology
15 Developing the future of defence technology Major programmes Agile, iterative development Smaller, simpler, innovative, affordable mass systems. Critical, complex capabilities and development of Combination of multi-domain knowledge and software capability next generation technology supports long
Slide 16: Continuously improving our business
16 Continuously improving our business Steps taken so far include investment in digital tools, Continuously increased production automation and improved site improve infrastructure business to drive superior Unlocking + performance Segmental consolidation to simplify business ES ES growth Performanc
Slide 17: Financial review
17 Financial review Brad Greve, Chief Financial Officer © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.
Slide 18: 2026 half year financials
18 2026 half year financials High Sales Earnings Cash Capital Demand Growth Growth Flow Allocation Orders Sales Underlying EBIT Free cash flow Dividend £16.4bn £15.8bn £1,701m £1,791m 15.0p +9% +11% +11% Underlying EPS Order backlog Shareholder returns £84bn 38.9p £0.9bn +13% © 2026 BAE Systems. All
Slide 19: Strong order intake across geographies and domains
19 Strong order intake across geographies and domains £16.4bn ES P&S Air Maritime C&I £4.8bn £2.1bn £6.8bn £1.5bn £1.4bn SMS £1.6bn US Navy support £0.5bn Türkiye support £2.5bn Australia £0.5bn I&S £0.7bn Electronic Combat £1.1bn Bofors £0.5bn MBDA £2.1bn Defence Solutions £0.5bn Digital Intelligen
Slide 20: Sales
20 Sales Group By reporting segment £4.9bn £15.8bn £3.9bn £3.4bn +9% £2.7bn constant currency £1.2bn ES P&S Air Maritime C&I Variance: constant currency +9% +11% +12% +11% +4% +3% Variance: reported +8% +7% +10% +12% +5% +1% © 2026 BAE Systems. All Rights Reserved. Excludes HQ & eliminations BAE SYS
Slide 21: Underlying EBIT / RoS
21 Underlying EBIT / RoS Group By reporting segment Return on sales 10.8% 15.5% 11.9% 11.9% 6.1% 9.0% £600m £580m £1,701m +11% £323m £208m constant currency £107m ES P&S Air Maritime C&I Variance: constant currency +11% +15% +11% +16% -7% +14% Variance: reported +10% +11% +11% +16% -5% +11% © 2026 B
Slide 22: Operating business cash flow
22 Operating business cash flow Group By reporting segment Cash conversion 124% 93% 25% 271% -11% 30% £2,104m £1,574m +£2,112m £558m variance £80m £32m £(23)m ES P&S Air Maritime C&I Variance +£2,112m +£260m +£332m +£1,360m +£127m +£55m Free cash flow £1,791m Net debt £(3,173)m © 2026 BAE Systems. A
Slide 23: Upgraded 2026 Group guidance reinforces our value compounding model
23 Upgraded 2026 Group guidance reinforces our value compounding model Guidance based on £1:$1.32 Underlying Underlying Free cash flow Sales EBIT EPS in 2026 +8% to 10% +10% to12% +11% to 13% >£2bn Prev: +7% to 9% Prev: +9% to 11% Prev: +9% to 11% Prev: >£1.3bn 2025: £30,662m 2025: £3,322m 2025: 75.
Slide 24: Three-year free cash flow guidance shows continued strong cash generation
24 Three-year free cash flow guidance shows continued strong cash generation 2024 2025 2026 2027 2028 2024 - 26: In excess of £6.7bn £4.7bn >£2.0bn (prev. in excess of £6.0bn) 2025 - 27: In excess of £5.5bn £2.2bn >£2.0bn 2026 - 28: In excess of £6bn >£2.0bn © 2026 BAE Systems. All Rights Reserved.
Slide 25: Consistent, value creating capital allocation
25 Consistent, value creating capital allocation Investment in our people Investment in Capex to drive growth the business R&D increasing Dividend M&A Buyback Balance sheet strength and flexibility – maintain investment grade rating © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registere
Slide 26: Closing comments and Q&A
26 Closing comments and Q&A Charles Woodburn, Chief Executive Officer © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.
Slide 27: Excellent visibility of long-term growth
27 Excellent visibility of long-term growth c. 9x sales Programmes including Value Timeframe F-35 – Build, EW & Support c.£30bn+ Typhoon Support c.£25bn+ Pipeline Dreadnought c.£20bn+ 2035+ £180bn SSN – AUKUS c.£15bn+ GCAP c.£20bn+ Backlog Electronic Systems Platforms & Services Air Maritime Cyber &
Slide 28: BAE Systems proposition for significant long-term value creation
28 BAE Systems proposition for significant long-term value creation Established positions in some of the largest Sustainable and visible revenue growth and most attractive defence markets globally Diverse portfolio and multi-domain capabilities Underlying margin progression Excellent backlog and opp
Slide 29: Supplementary information
29 Supplementary information © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark. © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.
Slide 30: 2026 half year summary financials
30 2026 half year summary financials Half year Half year Constant Average $ rate: June 2026 $1.34, June 2025 $1.30 2026 2025 currency Reported Order intake £16,422m £13,171m Sales £15,772m £14,621m +9% +8% Underlying EBIT1 £1,701m £1,550m +11% +10% Return on sales 10.8% 10.6% +30bps +20bps Underlyin
Slide 31: Underlying EPS
31 Underlying EPS + 4.7 + 1.1 - 1.2 - 0.4 38.9p 34.7p 30 June Underlying Underlying Tax 30 June FX 2025 EBIT interest rate 2026 © 2026 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark.
Slide 32: Net debt (£m, excluding lease liabilities)
32 Net debt (£m, excluding lease liabilities) Free cash flow £1,791m 2,104 (3,173) (3,844) (313) (933) (187) 31 December Operating business Interest Shareholder 30 June Other 2025 cash flow & tax returns 2026 © 2026 BAE Systems. All Rights Reserved. Shareholder returns consists of dividends £686m &
Slide 33: Electronic Systems
33 Electronic Systems Business description HY26 sales by business: Financial performance Electronic Systems, with 23,300¹ Countermeasure & Electromagnetic Half year 2026 2025 employees, comprises the US- and Attack 11% SMS UK-based Electronic Systems and 24% Sales $5,199m $4,672m the US-based Space
Slide 34: Platforms & Services
34 Platforms & Services Business description HY26 sales by business: Financial performance Platforms & Services, with BAE Systems Weapons Half year 2026 2025 12,600¹ employees and Bofors Systems UK operations in the US, Sweden 7% 3% Sales $3,669m $3,217m Ordnance and UK, manufactures and Systems Und
Slide 35: Air
35 Air Business description HY26 sales by business: Financial performance Air, with 30,200¹ employees, FalconWorks® Half year 2026 2025 comprises the Group’s UK-based UK & Int'l 2% operations which provide aircraft Markets Sales £4,863m £4,343m 10% Air build and support activities to Operations Unde
Slide 36: Maritime
36 Maritime Business description HY26 sales by business: Financial performance Maritime, with 32,000¹ RBSL 2% Half year 2026 2025 employees, comprises the Naval Ships Group’s UK-based maritime 15% Sales £3,407m £3,233m and land activities, including Submarines Underlying EBIT £208m £220m 45% ship bu
Slide 37: Cyber & Intelligence
37 Cyber & Intelligence Business description HY26 sales by business: Financial performance Cyber & Intelligence, with Half year 2026 2025 10,300 employees, comprises Digital the US-based Intelligence & Intelligence Sales $1,606m $1,540m 35% Security business and UK- Underlying EBIT $144m $125m headq
Slide 38: June 2026 summary by reporting segment
38 June 2026 summary by reporting segment USD FX rate of $1.34 (backlog @ $1.33) Underlying Return Free Order Order Sales EBIT on sales cash flow intake backlog £m £m % £m £bn £bn Electronic Systems 3,866 600 15.5 558 4.8 14.4 Platforms & Services 2,728 323 11.9 80 2.1 14.2 Air 4,863 580 11.9 1,574
Slide 39: Summarised balance sheet (£m)
39 Summarised balance sheet (£m) 30 June 31 December 2026 2025 Intangible fixed assets 15,351 15,245 Tangible fixed assets 6,976 6,835 Investments 804 822 Working capital (6,864) (6,499) Pension surplus 1,075 844 Lease liabilities (1,748) (1,742) Tax assets & liabilities 215 285 Financial assets & l
Slide 40: Reconciliation to underlying earnings (£m)
40 Reconciliation to underlying earnings (£m) June 2026 June 2025 Income Reclass: Income Reclass: statement EAI interest Reclass: statement EAI interest Reclass: (published) & tax other1 Reported Underlying (published) & tax other1 Reported Underlying Operating Profit / Underlying EBIT 1,504 10 187