Bae Systems Plc · LSE:BA.
Bae Systems — H1 2009 Earnings Presentation
27 slides from Bae Systems's earnings presentation, Jul 30, 2009
Slide 1: BAE Systems 2009 Half Year Results
BAE Systems 2009 Half Year Results 30 July 2009 1
Slide 2: Overview - First half 2009
Overview - First half 2009 20,000 15 000 15,000 +28% • Continued good performance Sales 10,000 5,000 – Delivering against plan £m 0 – Results underpin outlook for full year 2004 2005 2006 2007 2008 2009 • Well positioned 2 000 2,000 1,500 – Large forward order book Underlying +19% – Well balanced sp
Slide 3: George Rose
BAE SYSTEMS George Rose
Slide 4: Financial Highlights
Financial Highlights • Sales - continuing £9,941m • Underlying EBITA * £979m • Underlying earnings per share ** 17 8p 17.8p • Cash inflow from operating activities £448m • Net debt £(316)m • Order book £45.0bn • Dividend per share 6.4p * earnings before amortisation/impairment of intangible assets,
Slide 5: Income Statement
Income Statement - Continuing Operations First Half First Half First Half First Half 2009 2008 2009 2008 Underlying Underlying Reported Reported Sales 9 941 9,941 7 751 7,751 9 941 9,941 7 751 7,751 Underlying EBITA * 979 820 979 820 (Loss) / profit on disposed businesses (9) 61 EBITA 970 881 Financ
Slide 6: Balance Sheet
Balance Sheet 30/06/09 31/12/08 I t Intangible ibl fifixed d assets t 11 025 11,025 12 306 12,306 Tangible fixed assets 2,442 2,558 Investments 893 , 1,040 Working capital (5,354) (5,825) Pension deficit (4,503) (3,325) Tax assets & liabilities 953 256 Financial assets & liabilities (100) 240 Net (d
Slide 7: Operating Business Cash Flow
Operating Business Cash Flow First Half 2009 Cash inflow from operating activities 448 Capital expenditure (net) (246) Dividends from equity accounted investments 14 Contribution to Trust (re pensions) (125) Operating business cash flow 91 Electronics Intelligence & Support Electronics, 127 Land & A
Slide 8: Movement in Net Cash
Movement in Net Cash First Half 2009 Net Cash 31.12.08 39 Operating business cash flow 91 Interest and taxation (320) Equity dividends paid (307) Acquisitions & disposals (8) Net purchase of equity shares (20) Foreign exchange 260 Other movements (51) Net Debt 30.06.09 (316) £ millions 8
Slide 9: Retirement Benefit Obligations
Retirement Benefit Obligations First Half 2009 IAS 19 deficit at 31 December 2008 ((4,216) , ) Asset returns (623) Discount rates (1,311) Contributions over service cost 167 Exchange translation and other movements 57 IAS 19 deficit at 30 June 2009 (5,926) Allocated to EAIs and other participating e
Slide 10: Operating Groups
Operating Groups First Half 2009 First Half 2009 Sales * Underlying EBITA * 28% 32% 28% 27% Electronics, Land & Electronics, Land & Intelligence Armaments Intelligence te ge ce Armaments & Support & Support 24% 17% 28% 16% Programmes International Programmes International & Support & Support Strong
Slide 11: Electronics, Intelligence & Support
Electronics, Intelligence & Support First Half First Half 2009 2008 SALES Information Sales $4,274m $3,870m Solutions Electronic Solutions Underlying EBITA $400m $392m Platform Solutions Margin 9.4% 10.1% Order book $7.4bn $7.2bn Support Solutions Cash flow $190m $55m 11
Slide 12: Land & Armaments
Land & Armaments First Half First Half 2009 2008 SALES Sales $4,807m $5,126m US Combat Global Systems Tactical act ca Systems Underlying EBITA $391m $476m Margin 8.1% 9.3% Order book $15.3bn $15.8bn Global Security & Combat Survivability Systems Cash flow $245m $166m 12
Slide 13: Programmes & Support
Programmes & Support First Half First Half 2009 2008 SALES Air Sales £2,399m £1,917m Underlying EBITA £277m £191m Margin 11.5% 10.0% Naval Order book £21.2bn £20.7bn Systems & Security Cash flow £(47)m £134m 13
Slide 14: International
International First Half First Half 2009 2008 SALES Sales £1,610m £1,397m CS&S International Australia Underlying EBITA £161m £219m Margin 10.0% 15.7% Order book £11.5bn £9.8bn MBDA, Saab, Air Astana Cash flow £125m £(739)m 14
Slide 15: HQ & Other Businesses
HQ & Other Businesses First Half First Half 2009 2008 • Regional Aircraft Sales £133m £113m • Shared Services Underlying EBITA £11m £(29)m – Research Centres – Property Management Cash flow £(278)m £(93)m • Head Office 15
Slide 16: Financial Highlights
Financial Highlights • Sales - continuing £9,941m • Underlying EBITA * £979m • Underlying earnings per share ** 17 8p 17.8p • Cash inflow from operating activities £448m • Net debt £(316)m • Order book £45.0bn • Dividend per share 6.4p * earnings before amortisation/impairment of intangible assets,
Slide 17: Ian King
BAE SYSTEMS lan King 17
Slide 18: Agenda
Agenda • Business overview • Markets – US – UK • Land business • Growth drivers – Tactical combat aircraft – Strategic developments 18
Slide 19: Broadly based business
Broadly based business • Well defined strategy – Focus on defence, security and aerospace • P Programme diversity di it – Large portfolio of programmes – Through-life support • Market diversity – Leading positions in multiple home markets – All armed forces, government security • Continuously evolvi
Slide 20: US defence reprioritisation
US defence reprioritisation • S Secretary t G Gates t programme reprioritisations i iti ti – Underperforming programmes targeted – Relevance to operational needs tested • BAE Systems – Neutral to most changes – JSF priority increased – FCS re-launch re launch awaited • Cyber given increased focus –
Slide 21: US defence
US defence DoD funding Supplemental • Core FY10 budget 667 662 664 700 – aligned with internal planning assumptions $ bn 601 600 535 468 479 500 437 Base budget 400 345 316 • Supplemental procurement spend continues 300 – MRAP reduction anticipated 200 100 • Support for deployments continues 0 FY01
Slide 22: UK defence
UK defence • Significant budget constraint continues • Progressive approach to align procurement to budget – Programme stretch - eg CVF – Salam Typhoon diversions a significant alleviation • Industrial strategy gy for naval shipbuilding p g – New Terms of Business Agreement signed • Through g Life S
Slide 23: Land business development
Land business development Strong growth from global land systems business 12000 Armor Holdings Sales 10000 US$ 8000 United Defense 6000 Alvis 4000 2000 0 2003 2004 2005 2006 2007 2008 Part-year contributions Future US Land programme opportunities Bradley - Continuing demand for reset and upgrade FMT
Slide 24: Key growth drivers
Key growth drivers • Tactical Combat Aircraft – Typhoon - T2 rate increase and Salam – F-35 - development LRIP high rate production • Strategic initiatives – Develop positions in evolving home markets – Migrate capabilities across global market positions – Eg Readiness & Sustainment and Security – A
Slide 25: Tactical combat aircraft
Tactical combat aircraft 60 Typhoon deliveries Ai Aircraft ft 50 40 30 37% of Eurofighter programme 20 – front fuselage manufacture 10 – UK and first 24 RSAF aircraft assembly 0 2007 2008 2009 2010 2011 250 F-35 deliveries Aircraft 200 150 16-18% of production programme 100 – electronic warfare suit
Slide 26: Developing a global business
Developing a global business • Four strands of global development – Land – opportunities across established positions – developing approach to KSA, Australian and Indian opportunities – Security – US opportunities to build on Detica’s UK capabilities – Growing multi-market opportunities – UAS – tech
Slide 27: Summary - First half 2009
Summary - First half 2009 40 • Continued good performance Underlying 30 +10% – delivering against plan EPS 20 – results underpin full year outlook pence 10 0 2004 2005 2006 2007 2008 2009 • Further progress against strategy – broad base of business – multi-Home Market positions 15 DPS • Good visibil