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BAE Systems 2011 Preliminary Results 16 February 2012

BAE Systems 2011 Preliminary Results 16 February 2012. Ian King. Strategy and business environment . Strategy to sustain and provide platform for growth Improve profit and cash generation Grow Cyber, Intelligence and Security Grow Electronic Systems

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BAE Systems 2011 Preliminary Results 16 February 2012

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  1. BAE Systems 2011 Preliminary Results 16 February 2012

  2. Ian King

  3. Strategy and business environment • Strategy to sustain and provide platform for growth • Improve profit and cash generation • Grow Cyber, Intelligence and Security • Grow Electronic Systems • Drive value from Platforms and Services positions • Increase International business • US • Budget passed following Continuing Resolution • January announcements align with planning assumptions • UK • SDSR impacts clear • Mitigating actions well underway • Near term focus on delivering bottom line performance

  4. Strategy and business environment • Strategy to sustain and provide platform for growth • Improve profit and cash generation • Grow Cyber, Intelligence and Security • Grow Electronic Systems • Drive value from Platforms and Services positions • Increase International business • US • Budget passed following Continuing Resolution • January announcements align with planning assumptions • UK • SDSR impacts clear • Mitigating actions well underway • Near term focus on delivering bottom line performance

  5. Strategy and business environment • Strategy to sustain and provide platform for growth • Improve profit and cash generation • Grow Cyber, Intelligence and Security • Grow Electronic Systems • Drive value from Platforms and Services positions • Increase International business • US • Budget passed following Continuing Resolution • January announcements align with planning assumptions • UK • SDSR impacts clear • Mitigating actions well underway • Near term focus on delivering bottom line performance

  6. International Markets • India • Continued Hawk order intake • MMRCA – Typhoon bid • Land opportunities progressing • Brazil OPV • New business • Opportunity to expand Brazilian Navy business relationship • Australia • Good positions across defence domains • Oman • Typhoon RFP released • KSA • Budgets approved • Increasing business opportunities

  7. Summary • Strong performance in challenging environment • Cost reduction and efficiency improvement • Good programme execution • Broad international footprint • Strong positions in priority capabilities • Resilient platform for future growth • Unambiguous focus on shareholder value

  8. Peter Lynas

  9. Financial Highlights (1) Continuing operations (2) Earnings before amortisation and impairment of intangible assets, finance costs and taxation expense (EBITA) and non-recurring items (3) Earnings excluding amortisation and impairment of intangible assets, non-cash finance movements and non-recurring items

  10. Summary Income Statement (continuing operations) * 2011 underlying finance costs exclude charges relating to the early redemption of debt (£13m)

  11. Balance Sheet

  12. Pension Deficit (IAS 19) * includes assets held in Reservoir Trust

  13. Funding Deficit • Funding deficit increased by £1.1bn • Revised deficit recovery plans agreed • Deficit recovery periods sustained • Incremental funding of £0.2bn over next 5 years • Next funding valuation date April 2014 £3.0bn £2.9bn £1.9bn

  14. Operating Cash Flow

  15. Movement in Net Debt

  16. Capital Allocation £2.2bn returned to shareholders over 2 years

  17. Electronic Systems 2011 SALES Commercial 14% Defence 86%

  18. Cyber & Intelligence 2011 SALES Detica $465m US $1,779m

  19. Platforms & Services (US) 2011 SALES Support Solutions Land & Armaments Platforms 32% Military & Technical Services 68%

  20. Platforms & Services (US) Land & Armaments SupportSolutions

  21. Platforms & Services (UK) 2011 SALES Maritime Air Platforms 68% Military & Technical Services 32%

  22. Platforms & Services (International) 2011 SALES KSA MBDA, India Australia Platforms 35% Military & Technical Services 65%

  23. Underlying Earnings Per Share 45.6 39.7 pence * UK R&D tax benefit

  24. 2012 Guidance * excluding R&D tax benefit

  25. 2012 Guidance * excluding R&D tax benefit

  26. Summary • Strong performance in challenging environment • Cost reduction and efficiency improvement • Good programme execution • Broad international footprint • Strong positions in priority capabilities • Resilient platform for future growth • Unambiguous focus on shareholder value

  27. BAE Systems 2011 Preliminary Results 16 February 2012

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