Ian King, Chief Executive, said:
“2016 was a good year for BAE Systems. Our strategy is well defined; we have a large order backlog, long-term programme positions, strong programme execution and a well-balanced portfolio. With an improved outlook for defence budgets in a number of our markets, we are well placed to continue to generate attractive returns for shareholders.”
Results in brief
Financial performance measures as defined by the Group
| 2016 | 2015 | ||
| Sales | £19,020m | £17,904m | |
| Underlying EBITA | £1,905m | £1,683m | |
| Underlying earnings per share | 40.3p | 40.2p | |
| Operating business cash flow |
£1,004m | £681m | |
| Net debt | £(1,542)m | £(1,422)m | |
| Order intake | £22,443m | £14,921m | |
| Order backlog | £42.0bn | £36.8bn | |
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Other financial highlights |
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| 2016 | 2015 | ||
| Group’s share of the net pension deficit | £(6.1)bn | £(4.5)bn | |
| Dividend per share | 21.3p | 20.9p |
BAE Systems Military Air and Information business highlights:
At BAE Systems, we employ around 13,000 people in our Military Air & Information business across 30 locations, including Warton and Samlesbury in the North West of England and in Brough, RAF Coningsby and RAF Marham in the East of England. Highlights for 2016 include:
- We welcomed the announcement by the UK and French Governments in March, of a €2bn (£1.7bn) programme to build operationally representative unmanned combat air system demonstrators following a successful joint feasibility study.
- Orders totalling £1bn have been received via Eurofighter from our Italian Eurofighter partner, Leonardo, for our share of work on the 28 Typhoon aircraft for Kuwait.
- A ten-year partnership arrangement with the UK Ministry of Defence (MOD) to support the UK Typhoon fleet, expected to be worth at least £2.1bn, was signed in July.
- In November, a team including BAE Systems, was chosen to be a provider of maintenance repair, overhaul and upgrade of F-35 Lightning II avionics and components, during the period 2021 to 2025 on a global basis and from 2025 onwards for the European region.
- £118m contract was secured to build engineering and training facilities at RAF Marham for the UK F-35 Lightning II aircraft.
- Long term contracts were secured with the UK MOD to support the RAF’s fleet of Hawk fast jet trainer aircraft until 2020.
- Typhoon’s capabilities continue to be enhanced with the ongoing integration of the Captor E-Scan radar and the Storm Shadow, Meteor and Brimstone 2 missiles as part of European capability delivery programmes.
- Throughout 2016 we maintained our commitment to deliver high quality apprentice and graduate programmes. In December a new £15.6m training academy was opened at Samlesbury, designed to train apprentices and graduates in our military aircraft business as well as providing life-long learning and skills development activities.
Chris Boardman, Managing Director at BAE Systems Military Air & information, said:
“We made good progress in 2016 thanks to the dedication of our highly skilled workforce. We achieved key targets on Typhoon and F-35 Lightning II production, long-term support arrangements on Typhoon, F-35 Lightning II and Hawk and an agreement between the UK and French Governments to progress the new unmanned combat air systems demonstrator programme.
“The recent heads of agreement signed with Turkish Aerospace Industries, ahead of a planned contract to collaborate on the first design and development phase of an indigenous fifth-generation fighter jet, further helps to support critical skills, technology and technical expertise to the benefit of our business and the wider economy.”
