BAE Systems Announces 2022 Half-year Results
BAE Systems plc reported its Half-yearly Report for 2022, showcasing sales of £10,581m and revenue of £9,739m, marking increases of 2.8% and 4.3% respectively. The underlying EBIT rose to £1,112m, a 4.4% growth, while the basic earnings per share decreased to 19.6p. The order backlog stands at £52.7bn, with a strong order intake of £17,985m. An interim dividend of 10.4p per share was declared, alongside a new £1.5bn share buyback program.
- Sales increased by 2.8% to £10,581m.
- Revenue grew by 4.3% to £9,739m.
- Underlying EBIT rose by 4.4% to £1,112m.
- Order backlog increased to £52.7bn.
- Declared an interim dividend of 10.4p per share.
- Initiated a £1.5bn share buyback program.
- Basic earnings per share decreased to 19.6p from 31.3p.
- Operating profit decreased by 21.1% to £1,028m.
- Free cash flow declined to £123m from £461m.
Half-yearly Report 2022
Results in brief
Financial performance measures as defined by the Group1 |
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Financial performance measures derived from IFRS2 |
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Six months ended
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Six months
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Year
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Six months ended
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Six months
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Year
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Sales |
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Revenue |
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Underlying EBIT |
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Operating profit |
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Underlying earnings per share |
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Basic earnings per share |
19.6p |
31.3p |
55.2p |
excluding one-off tax benefit (2021 only)3 |
24.5p |
21.9p |
47.8p |
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including one-off tax benefit (2021 only)3 |
24.5p |
24.8p |
50.7p |
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Net cash flow from operating activities |
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Free cash flow |
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Net debt (excluding lease liabilities) |
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Order book |
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Order intake |
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Dividend per share |
10.4p4 |
9.9p4 |
25.1p |
Order backlog |
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Group’s share of the net post-employment benefits surplus/(deficit) |
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“Our diverse portfolio, together with our focus on programme execution, cash generation and efficiencies are helping us navigate the current macroeconomic challenges and position us well for sustained top line and margin growth in the coming years. We see further opportunities to enhance the medium- and long‑term outlook as our customers commit to increased defence spending to address the elevated threat environment.
“The positive outcome of the
“Good operational performance, execution on our strategy and confidence in the outlook enables us today to announce a
Guidance for 2022
The Group’s full year 2022 guidance across all metrics is unchanged from that provided at the Preliminary announcement on
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Should the current dollar rate persist, this will be a tailwind to earnings with sensitivity to EPS being around
The guidance is based on the measures used to monitor the underlying financial performance of the Group. Reconciliations from these measures to the financial performance measures derived from International Financial Reporting Standards for the six months ended
Financial highlights
Financial performance measures as defined by the Group1
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Sales increased by
2.8% on a constant currency basis5 to£10.6b n. -
Underlying EBIT of
£1,112m increased by4.4% on a constant currency basis5. -
Underlying earnings per share increased by
11.9% to 24.5p3, excluding the impact in 2021 of the one-off tax benefit. The Group’s underlying effective tax rate for the first half of the year was19% . -
Free cash inflow of
£123m (2021£461m inflow, including£250m receipt in respect of the Filton and Broughton site disposals). -
Net debt (excluding lease liabilities) at
£3,135m (£2,160m at31 December 2021 ). -
Order backlog of
£52.7b n (£44.0b n at31 December 2021 ).
Financial performance measures derived from IFRS2
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Revenue increased by
4.3% to£9.7b n. -
Operating profit decreased by
21.1% to£1,028m . - Basic earnings per share decreased to 19.6p (2021 31.3p).
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Net cash inflow from operating activities of
£493m (2021£623m inflow). -
Order book of
£42.5b n (£35.5b n at31 December 2021 ).
Dividend
The directors have declared an interim dividend of 10.4p per share in respect of the half year ended
Post-employment benefits
The Group’s share of the accounting net post-employment benefits obligations has improved by
1.
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We monitor the underlying financial performance of the Group using alternative performance measures. These measures are not defined in International Financial Reporting Standards (IFRS) and, therefore, are considered to be non-GAAP (Generally Accepted Accounting Principles) measures. Accordingly, the relevant IFRS measures are also presented where appropriate. For alternative performance measure definitions see glossary on page 9. |
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International Financial Reporting Standards. |
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A one-off tax benefit of
exposure arising from the Company regime. Growth rate disclosed excludes the impact of the 2021 one-off tax benefit. |
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Interim dividends declared (see note 7). |
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Current period compared with prior period translated at current period exchange rates. |
Operational and strategic key points
- Closely engaged with our global customers to provide on-going support wherever requested.
- Delivering on programme specific mission critical requirements of our customers.
COVID-19
- Kept an agile and flexible business response to the ever-evolving situation.
- Focus remained on employee safety and well-being whilst maintaining delivery on our customer commitments.
Group Portfolio actions
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UK Triennial pension review completed. - Acquisition of Bohemia Interactive Simulations (BISim) completed in March.
- Agreement signed in July for the sale of BAE Systems’ financial crime detection business from Cyber & Intelligence, with completion expected in the next few months.
- Reflecting the changes in operational reporting lines effective from the beginning of the year, the BAE Systems Australia business has moved from being reported in the Air segment to the Maritime segment. Additionally, the Group has established a new Digital Intelligence business, bringing together the non-US digital and data capabilities to further strengthen how we deliver these services and capabilities to our customers. Digital Intelligence is reported within the Cyber & Intelligence segment.
Electronic Systems
- Cumulatively, over 1,100 electronic warfare systems have been delivered on the F-35 programme.
- Deliveries continue of next-generation EW Eagle Passive Active Warning Survivability System to support upgrade of US Air Force F-15 platform and testing on F-15E and F-15EX test aircraft.
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Awarded
$176m £145m ) for Airborne High Frequency Radio Modernization programme. - Selected to design, test and supply energy management components for GE Aviation’s megawatt class hybrid electric propulsion system supporting NASA’s Electrified Powertrain Flight Demonstration project.
Platforms & Services
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M109A7 programme is consistently delivering at full rate production levels and received a
$299m £246m ) contract. -
Deliveries of all five variants of Armored Multi-Purpose Vehicles to the
US Army continue. -
Amphibious Combat Vehicle deliveries to
US Marine Corps continue, with design and development under way for new mission variants. - Bradley vehicle upgrade work continues on contracts for 459 vehicles.
- BAE Systems Hägglunds is ramping to perform on multiple contracts for CV90 and BvS10.
- CV90 wins Slovakia’s competitive evaluation for its Infantry Fighting Vehicle programme.
- US Ship Repair profitability was significantly impacted by the COVID-19 pandemic, but continues to recover.
Air
- Production on F-35 is at full rate levels. 74 rear fuselage assemblies have been completed in the period.
- The Qatar Typhoon and Hawk programme is progressing well. The first Typhoon deliveries will commence in the second half of 2022.
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Work continues on the Typhoon programme and the production programme has been extended further following the award in June of 20 further aircraft for
Spain . - The future electronically scanned European Common Radar Solution continues in line with the Typhoon plan.
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The sector continues to work closely with industry partners and the
UK government to continue to fulfil contractual support arrangements inSaudi Arabia . - The Future Combat Air System (FCAS) programme continues as anticipated with the initial Concept & Assessment Phase contract underway across national and international partners.
- Saudi British Defence Co-operation Programme five-year renewal support funding agreed.
Maritime
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£2.5b n of further contract funding awarded as part of Delivery Phase 3 for the Dreadnought programme. -
New Submarine Build Capability contract maintains
BAE Systems' role as the lead for the design and build of nuclear submarines within theUK submarine enterprise. - The Submersible Ship Nuclear Replacement (SSNR) programme has moved into its Functional Design phase.
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Ongoing support to the Royal Navy’s Portsmouth-based flotilla and the operation of HM
Naval Base Portsmouth under theUK Ministry of Defence’s Future Maritime Support Programme, including support to the UK’s two aircraft carriers. -
The Hunter Class Frigate programme in
Australia continues to make strong progress through the prototyping phase. -
HMAS Toowoomba, the fifth ANZAC Class frigate to move through the ANZAC Mid Life Capability Assurance Programme (AMCAP) was returned to the
Australian Navy following successful completion of the dry production phase of AMCAP. - Mobilisation of the Challenger 3 and Mechanised Infantry Vehicle contracts secured by the RBSL joint venture is advancing well.
- Transition to the Next Generation Munitions Supply Solution (NGMS) contract is ongoing.
Cyber & Intelligence
Intelligence & Security
- Strong operational performance and integration of Bohemia Interactive Simulations progressing well.
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Awarded an 18-year contract to continue supporting the sustainment of
U.S intercontinental ballistic missiles (ICBMs). -
Won a
$699m £575m ), five-year contract for operations, maintenance, and management services for the US Army’sDefense Supercomputing Resource Center .
Digital Intelligence
- Ongoing integration and transformation of the newly-formed business.
- Increasing underlying profitability supported by strong programme execution, productivity and cost base optimisation.
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Continued integration and growth of the acquired In-Space Missions business, a
UK -based satellite and satellite systems company, to accelerate our space capabilities.
HQ
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Repayment of
£400m bond in June from existing resources.
For further information please contact:
Investors |
Media Relations |
Email:investors@baesystems.com |
Analyst and investor presentation
A presentation, for analysts and investors, of the Group’s first half results for 2022 will be available via WebEx at
Details can be found on investors.baesystems.com, together with presentation slides and a pdf copy of this report. A recording of the WebEx will be available for replay later in the day.
About
At
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Ref: 105/2022
View source version on businesswire.com: https://www.businesswire.com/news/home/20220728005786/en/
M: +44 (0) 7540 628673
E: kristina.anderson@baesystems.com
M: +44 (0) 7787 669236
E: beth.neilson@baesystems.com
Issued by:
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www.baesystems.com
@BAESystemsplc
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