Babcock International Group PLC · LSE:BAB
Babcock International — Investor Day (2024)
36 slides from Babcock International's investor day presentation, 2024
Slide 1: Land
Land Tom Newman, Chief Executive, Land
Slide 2: Land
Land FY23 revenue HY24 backlog Our c.8500 strong workforce delivers: 7% › Build: military vehicle build, engineering, and systems integration Defence UK 32% 36% › Support: strategic asset management and through-life engineering Defence International 24% support for military equipment; engineering se
Slide 3: What we do: Key contracts
What we do Build Support Train › Training design, delivery, › Military vehicle build and › Strategic asset management assessment and support for systems integration and engineering support mission critical customers › Civilian armoured and specialist › National infrastructure › Training infrastructu
Slide 4: Global context: strategic shift in Land domain
Global context: strategic shift in Land domain Tactical mobility vehicles, increasing manoeuvrability and situational awareness Achieving ‘more for less’ with existing equipment Conflict in Ukraine Long-range fires and artillery systems First-generation outsourcing Maximising value and efficiencies
Slide 5: Global context creates significant opportunities
Global context creates significant opportunities Key growth opportunities Our competitive advantage BUILD › Deep expertise in operational support › Land Mobility pipeline › UK civilian armoured vehicle market leader Opportunity size: › Mobile Fires Platform; 120mm mortar › Customer intimacy drives b
Slide 6: Case study: high potential military product business
Case study: high potential military product business From civilian armoured vehicle conversion to the design, build, and through-life upgrade of militarised mobility vehicles Civilian armoured vehicle Babcock General High Mobility Land Mobility (LC300) Logistics Vehicle Transporter (Jackal 3) pipeli
Slide 7: Case study: Strategic Asset Management
Case study: Strategic Asset Management Evolving from MRO to digital sustainment products, material availability services and equipment life extensions Past: Manpower substitution Present: Leading strategic partner to the British Army Developing: Insight and export › Unparalleled technical understand
Slide 8: Land summary
Land summary › Refocused and upgraded capabilities – Build, Support, Train › Investment in leading technologies to give us a competitive edge › Macro environment is generating demand across our customer base › Quality of opportunities enable at least 8% sector margin in medium term 50 © 2024 Babcock
Slide 9: Aviation
Aviation Pierre Basquin, Chief Executive, Aviation
Slide 10: Aviation
Aviation FY23 revenue HY24 backlog Our c.3000 strong workforce delivers 9% 6% › Military training for the two largest Air Forces in Europe 27% Defence UK (France and UK), training pilots and operators from university 33% Defence International through to combat operations 29% £0.4bn £1.6bn Civil Inte
Slide 11: What we do: Capabilities
What we do Military training Military support Critical air operations › Global end-to-end military flying training › Through-life support of military flying assets, › Operate government programmes to deliver › Provide, integrate and maintain training including line, base and overall maintenance, cri
Slide 12: What differentiates us
What differentiates us Customer intimacy Operational asset understanding Engineering know-how › Embedded into Air Forces and their › Extensive experience of providing › Platform agnostic, we deliver tailored organisations. We deliver alongside operational support and training on solutions to Air For
Slide 13: Supportive market dynamics
Supportive market dynamics Market trends Our strategy for growth › Geopolitical situation driving higher demand from Air 1 • Focus on core geographies and defence Forces for both support and training › Increasing military aircraft acquisition driving higher 2 • Expand into selected territories volum
Slide 14: Targeted growth opportunities
Targeted growth opportunities 1 Focus on core geographies and defence 2 Expand into selected territories › From France into Europe › Expand military training: MENTOR2, transport and helicopter › From the UK into NATO › Diversify air operations: fixed-wing, intelligence and surveillance › Develop Avi
Slide 15: Near term growth opportunities
Near term growth opportunities Around £3bn of contract opportunities targeted over next three years, of which c.£1.7bn is under active bidding › Average contract c.£300m / 12 years duration › 80% international › 75% in defence Multiple, multi-year growth opportunities underpin medium term guidance 5
Slide 16: France – success story
France – success story › Revenue up 10x since FY16, driven primarily by defence opportunities (now c.80% defence) › Grown our position as the leading training partner to the French Air Force › The largest engineering partner for Armed Forces’ medium size helicopters (H160, H145, H135) › Strong partn
Slide 17: Aviation summary
Aviation summary › International business delivering training and engineering services to Air Forces and critical air operations to save lives and protect communities › The wide range of our activities, from asset conversion, operational and through-life support, and training is a core differentiato
Slide 18: Marine
Marine Paul Armstrong, Chief Executive, Marine
Slide 19: Who we are
Who we are FY23 revenue HY24 backlog Our c.5200 strong workforce delivers: › Design and build of warships for the UK and international markets 16% 16% › Warship through-life support programmes Defence UK › Submarine and equipment through-life design and support › World leading commercial liquid gas
Slide 20: What We Do
What We Do Design, develop, manufacture and integrate specialist systems, and deliver technical through-life support Design Build Integrate Support Complex platforms, systems and Digitally-enabled, high-integrity Integration of complex technology Through-life support, life extension equipment design
Slide 21: What differentiates us
What differentiates us Customer Operational asset Product development ‘Best of class’ intimacy understanding and systems expertise integration capability › Long term warship support › In-service support to every UK › Market-leading adaptable naval › Delivering multi-OEM solutions partner to UK, Cana
Slide 22: Developed capability: support to global design and build
Developed capability: support to global design and build Operational asset Customer ‘Best of class’ Product development understanding intimacy integration capability and systems expertise Arrowhead 140 licences QEC Aircraft carriers, for global frigate market Long-term warship support Developed Arro
Slide 23: Unmatched submarine weapons systems experience
Unmatched submarine weapons systems experience Over 50 years experience in providing weapons handling and launch systems (WHLS) to global navies with safe, proven, effective and reliable solutions Babcock-owned IP Global leader in WHLS Critical UK supplier New-build opportunities Trafalgar, Vanguard
Slide 24: Supportive market dynamics
Supportive market dynamics › Growing focus on defence capability due to ongoing Our growth strategy conflicts supported by increasing defence budget, NATO expansion and global instability 1 Optimise position › Desire for affordable indigenous sovereign shipbuilding and 2 Selective new programmes in-
Slide 25: Marine growth strategy
Marine growth strategy UK International Optimise Selective new Expansion in Direct Strategic position programmes focus countries exports partnerships › Platforms, systems and › New ship programmes › Canadian future › Ukraine opportunities › Advanced corvette equipment support › Space and defence sub
Slide 26: Expertise driving international opportunities
Expertise driving international opportunities Our long-standing support expertise driving international growth UK Royal Navy Babcock, UK and Ukraine Ukrainian Naval Platform capability Ukraine MCMV support Office opened mine counter measure MOD tripartite Capabilities Enhancement Programme (UNCEP) u
Slide 27: Marine summary
Marine summary Positioned for profitable growth › New market entrant and disruptor in global frigate segment with proven export credentials › Significant pipeline of UK and International shipbuilding opportunities › Future profitability will improve over time from mix of new contracts entered under
Slide 28: Nuclear
Nuclear Harry Holt, Chief Executive, Nuclear
Slide 29: Nuclear
Nuclear FY23 revenue HY24 backlog Our c.10000 strong workforce supports nuclear assets through life: 5% › Complex engineering support to the entire UK nuclear submarine fleet 14% › Management of critical national infrastructure at Devonport, Faslane and Rosyth Defence UK › The world’s first nuclear
Slide 30: What We Do: Whole life support to nuclear assets
What We Do Whole life support to nuclear assets Design Build In-Service operations Defuel and dismantle › Major infrastructure capital › Maintain the whole UK Defence › SSN-AUKUS and Dreadnought submarine fleet › Nuclear submarine dismantling projects for new submarine classes submarine design (not
Slide 31: What differentiates us
What differentiates us Customer Operational asset Engineering Unique intimacy understanding know-how infrastructure › Long term UK MOD submarine › Support to every class of UK › UK’s largest nuclear workforce › Own and operate highly support partner nuclear submarine for civil and defence (10,000) r
Slide 32: UK submarine fleet transition underpins growth
UK submarine fleet transition underpins growth Deep Maintenance UK submarine long-term in-service and disposal Programmes 2020 2050 2080 Vanguard Class Dreadnought Class Deterrent Future Continuous Submarines at Sea Deterrent Astute Class SSN-AUKUS Future attack (platform numbers TBD) submarine Atta
Slide 33: Growth
Growth Macro trends Programmes Opportunities Duration Total value* Status Long term submarine partnership: in-service 2026 - 2050s £30-50bn Incumbent CASD 50+ support for increased UK fleet (11 up to 16 boats) Global years security Naval infrastructure: Devonport and Clyde major Now - 2035 £6-8bn In
Slide 34: Case study: HMS Victorious deep maintenance period
Case study: HMS Victorious deep maintenance period Estimated total Optimised Deliver 15+ contract value: working years c.£500m patterns more service Deep Customer intimacy › Contracting differently understanding of assets › Innovative technologies Strip and Innovative Investment in Significant repla
Slide 35: Case study: Partnering with HII
Case study: Partnering with HII Rationale Complementary capabilities Shared challenge of Strong infrastructure Mutually beneficial in nuclear maritime asset dealing with legacy and support proposition access in UK and US build and support nuclear platforms for AUKUS markets Partnership status Mutual
Slide 36: Nuclear summary
Nuclear summary Market Trends and Position › Global insecurity is driving the prioritisation of UK MOD funding into nuclear defence enterprise (submarines and AWE) both of which are core, long term markets for Babcock which has strong incumbent positions › Net Zero and Energy Security agenda are cat