2001 Preliminary Results 14 February 2002 Financial Highlights - - PowerPoint PPT Presentation
2001 Preliminary Results 14 February 2002 Financial Highlights Profit before interest* 1,260m Profit before interest* 1,260m Fully diluted earnings per share* 23.4p Fully diluted earnings per share* 23.4p
* Excluding exceptional items and goodwill amortisation
Sales (including share of JV sales) Underlying Profit before interest * Profit before interest ** Interest Profit before tax** Exceptional items £ millions
* Before Nimrod charge and excluding exceptional items and goodwill amortisation ** Excluding exceptional items and goodwill amortisation
13,138 1,260 1,260 (177) 1,083 (518)
2001
12,185 1,250 950 (91) 859 (307)
2000
Fixed assets Working capital Net cash Provisions Net assets Minority interest Shareholder funds £ millions 10,142 (1,372) (831) (1,281) 6,658 (20) 6,638
31/12/01
10,358 (906) (899) (1,476) 7,077 (100) 6,977
31/12/00
Restated
Profit before interest* less Exceptional Items Net capital expenditure Depreciation Movements in provisions Customer stage payments Movements in other working capital Other items (incl. J/V profits/dividend) Operating cash flow 2001 1,260 (136) (214) 239 (207) 405 (871) 34 510 £ millions
* Excluding exceptional items and goodwill amortisation
Acquisitions Disposals Net interest Tax and dividends Net proceeds from equity issues Other items Non operating cash flow £ millions 2001
(189) (381) 30 (37) (442)
16% of Group sales 2000 2001 Sales £2,430m £2,310m PBIT * £303m £138m Margin 12.5% 6.0% Order book £10.1bn £10bn Cash flow £ 868m £(212)m
* before Nimrod charge
500 1000 1500 2000 2500 3000 3500
2001 2004*
Astute Type 45 Future Systems Gripen Nimrod Hawk Tornado/Harrier & US Typhoon AY
£m
* Estimated
15%
2000 2001 Sales £1,844m £2,042m PBIT £434m £414m Margin 23.5% 20.3% Order book £2.8bn £2.6bn Cash flow £ 554m £405m
13%
2000 2001 Sales £1,858m £1,816m PBIT £117m £102m Margin 6.3% 5.6% Order book £6.3bn £5.6bn Cash flow £18m £255m
7%
2000 2001 Sales £1,133m £1,027m PBIT £107m £109m Margin 9.4% 10.6% Order book £2.8bn £2.9bn Cash flow £ 43m £70m
18%
2000 2001 Sales £1,674m £2,577m PBIT £165m £250m Margin 9.9% 9.7% Order book £2.4bn £2.4bn Cash flow £168m £119m
9%
2000 2001 Sales £1,331m £1,277m PBIT £(33)m £39m Margin (2.5)% 3.1% Order book £4.6bn £3.8bn Cash flow £127m £(74)m
22%
2000 2001 Sales £2,868m £3,021m PBIT £149m £220m Margin 5.2% 7.3% Order book £16.1bn £20.1bn Cash flow £ 31m £118m
Profit before interest * £1,260m Margin 9.6% Net debt £831m Operating cash flow £510m Diluted earnings per share* 23.4p Dividend per share 9.0p Order book £43.8bn Profit before interest * £1,260m Margin 9.6% Net debt £831m Operating cash flow £510m Diluted earnings per share* 23.4p Dividend per share 9.0p Order book Order book £43.8bn £43.8bn
* Excluding exceptional items and goodwill amortisation
MM1091
Company transformation – – Transatlantic position established Transatlantic position established – – European Joint Ventures successfully restructured European Joint Ventures successfully restructured – – A line drawn under Regional Aircraft market exposure A line drawn under Regional Aircraft market exposure
Growth secured by large order book
Well positioned for emerging opportunities – – C4ISR C4ISR – – US budget growth US budget growth – – Homeland Security Homeland Security – – Growth in Air, Sea Systems and S3I Growth in Air, Sea Systems and S3I
Commercial aircraft down-
cycle managed -
poised for upturn
Fundamentally improved the risk profile of the company going forward ward
Avionics
International Partnerships Partnerships
Shared Services
RO Defence
Aerostructures
Aircraft Services Group Group
Future Carrier PCO
Capital
Ventures Mike Turner
COO
Steve Mogford
COO
Controls
Information Systems
Technologies Services
Information & Electronic Systems Electronic Systems Integration Integration
Air Systems
Sea Systems
CS&S
C4ISR Mark Ronald
COO & President BAE SYSTEMS NA
MRA4 – Cost to complete stabilised – Power on achieved December 2001 – Interest from US Navy for MMA requirement
Typhoon – Production aircraft first flight imminent – Cost to complete review across total programme – Significant activity to address entry into service – Much improved baseline for 2002
Hawk – Australian deliveries completed – UK MFTS requirement progressing
F-
35 JSF – Requirement for circa 3,000 aircraft in US and UK – Deliveries from 2008 – SDD programme worth circa £1.9bn to BAE SYSTEMS – Additional export opportunities
* Based on US & UK programme excluding exports * Based on US & UK programme excluding exports
F-
22 – Low Rate Initial Production authorised
Gripen – – Hungary contract signed to lease 14 aircraft Hungary contract signed to lease 14 aircraft – – Czech Republic selected 24 aircraft Czech Republic selected 24 aircraft – – Poland RFI for up to 60 aircraft Poland RFI for up to 60 aircraft – – Austria requirement for 30 aircraft Austria requirement for 30 aircraft – – Marketing joint venture formalised Marketing joint venture formalised
100 200 300 400 1997 1998 1999 2000 2001
£m
Order intake activity recovered to planned level
Astute – Programme baseline established – Hull build progressing – 2nd boat build commenced
Type 45 Destroyer – Platform procurement strategy agreed – Design programme progressing well – Platform sub-contract negotiations continue
Future Carrier – Good performance on first phase study – UK MoD procurement strategy reviewed – Second study phase approach re-structured – Doubled funding available over half the original time
TRACER / FRES – TRACER cancelled - released from undertakings – UK and US requirements being redefined – Teams forming for replacement programmes
C4ISR organisation – New structure facilitates pan company approach
Watchkeeper – Systems definition contract for British Army’s next generation battlefield UAV based ISTAR system
IFPA – Extended range Indirect Fire Precision Attack capability – Winning contractor for MoD assessment phase
UK S3I Pilot programmes – – Tornado phase 1 Tornado phase 1
ALS continuance, structures, radar sustainment and power systems – – Tornado phase 2 Tornado phase 2
Integrated Platform Support on additional systems – – Harrier Harrier
Similar support concept for GR 9A upgrade. – – Nimrod MR2 Nimrod MR2
Support contract signed in 2000. – – Naval Naval
FSL joint venture opportunities developing
Accessing S3I growth opportunities – 10 year contract won on Woomera Range in Australia – Selected for logistics management system for JSF – Good progress in advancing fast jet package for UK MFTS
Total global accessible S3I market (2002-2011) >$1000bn
US UK Australia Middle East
Source: Roland Berger & S3I data sources
Over 3/4 of the accessible market is in countries where BAE SYSTEMS has established indigenous capability SYSTEMS has established indigenous capability – – US/ UK S3I business convergence opportunity US/ UK S3I business convergence opportunity
Good progress – Restructuring of MBDA and AMS to create new entities – MBDA rationalisation of AeS and Alenia GW activities – Disposal of interest in TMS – Order book continues strong
…. but over shadowed by Astrium Astrium – Astrium performance impacted by depressed ComSat market
Restructuring underway – – integrates former AMS and integrates former AMS and Aerospatiale Aerospatiale guided weapons business into MBD guided weapons business into MBD
Rationalisation programme implemented – – significant cost base reduction opportunity significant cost base reduction opportunity
Excellent product range – – strong order book strong order book – – new products entering production new products entering production
€ 2.0bn sales
9,700 people
12 sites in 3 countries
€ 13.0bn order book
2001 pro forma
Good operational performance across business group – High value systems successfully delivered
– High growth adjacent market opportunities accessed
All full year budgets met – Acquisitions fully integrated – Key long term contract awards
– Launched “Integrated Systems” Business Unit to enhance C4ISR position – Office of Homeland Security presents business opportunities
HOMELAND SECURITY Those activities required to detect, prepare for, prevent, protect against, respond to, and recover from, terrorist attacks within the United States. HOMELAND SECURITY HOMELAND SECURITY Those activities required to detect, prepare for, prevent, prote Those activities required to detect, prepare for, prevent, protect against, respond ct against, respond to, and recover from, terrorist attacks within the United States to, and recover from, terrorist attacks within the United States.
.
BAE SYSTEMS Homeland Security project office formed BAE SYSTEMS Homeland Security project office formed
$37.7bn $29.3bn $16.9bn $13.2bn $11.8bn $0 $5 $10 $15 $20 $25 $30 $35 $40 FY99 FY00 FY01 FY02 FY03
Request to more than double budget over next 2 years $bn
Aerostructures – Successful integration of US aerostructures business – Significant cost reductions to A320 programme
RO Defence – MoD Partnering Agreement a significant contribution to performance – SA80 contract awarded
Marine – New ship-build contracts
– 6 ship launches
– Type 23 delivered on time, to cost and to quality
Underwater Weapons – Sting Ray Mod 1 contract timing brought forward – Spearfish exceeding production targets
Asset Management and Aviation Services – Management of the aircraft portfolio – Good spares activity – Transfer of Nimrod MRA4 wing design authority – Lower level of Aviation Services activity
Regional Jet – 10 RJ aircraft delivered – Market downturn – Swift action to contain costs – Closure of RJ/RJX production – Closure and support costs provided – Line drawn under regional aircraft market exposure
2001 performance – 325 aircraft delivered – 274 net orders – Good profit and cash performance – A380 market success – A340-600 flight development progressing to plan – Some Q4 delivery and financing disruption
Outlook – Order book reassessed in dialogue with customers – Some deferrals but limited cancellations – Confidence in 2002 delivery outlook circa 300 aircraft – A380 R&D spend increasing in line with plan – Some other R&D activities curtailed – Cost reduction actions underway – Expected to remain profitable at this level – A400M launch
MM1091
US Defense Budget increasing
$0 $100 $200 $300 $400 $500 2002 2003 2004 2005 2006 2007
Increases previously addressing social issues and higher costs social issues and higher costs
Realistic expectations now for rising equipment spend rising equipment spend
Equipment and R&D focused on fewer larger fewer larger programmes programmes
Priorities adjusting to match evolving environment evolving environment
Asymmetric threat
E-
Defense
Homeland Defense $bn
FY 2002 initial baseline projections FY 2003 projections
European budgets stretched – UK budget stretched by substantial equipment programme – Support cost savings assumed in UK funding outlook – Interoperability issues in Europe – Central European markets emerging – Early signs of consideration for increased spend
MM1091
Balanced geographic exposure
UK based exporter to global operations
Aircraft Manufacturer to Systems House
Broad programme involvement
Fundamental improvement in risk profile
2000 4000 6000 8000 10000 12000
1997 2001
Transatlantic defence company
£m
Defence Defence sales sales
RoW UK US
Systems/Platforms Capability value chain S3I Capability value chain Geographic market access value chain C4ISR Capability value chain
Through-life Support Through Through-
life Support Support
Integrated Packages Integrated Integrated Packages Packages Support Services Support Support Services Services C4ISR C4ISR C4ISR Command & Control Command Command & Control & Control Comms Comms Comms Platforms & Systems Platforms Platforms & Systems & Systems Sub- systems Sub Sub-
systems UK Prime UK UK Prime Prime International Partnerships International International Partnerships Partnerships Trans- Atlantic Prime Trans Trans-
Atlantic Prime Prime Equipment Equipment Equipment
To become the premier transatlantic defence contractor and lead supplier of Prime Systems Solutions and lead supplier of Prime Systems Solutions
To maximise value from our existing defence and aerospace portfolio aerospace portfolio
To maximise the value of our subsystems position in support of Prime business support of Prime business
Become the premier transatlantic defence contractor Become the premier transatlantic defence contractor
BAE SYSTEMS and its partners possess many of the constituent capabilities for BMD abilities for BMD
System Boost Defense Segment* THAAD EMD SBIRS-High PAC-3 MEADS Sensors Midcourse Defense Segment Terminal Defense Segment* System Segement
BAE SYSTEMS’ Capabilities BAE SYSTEMS’ Capabilities
Platforms Platforms Sensors Sensors ISTAR ISTAR Early Warning Early Warning Radars Radars Weapons Weapons Electronic Warfare Electronic Warfare Launchers Launchers Satellites Satellites UAV’s UAV’s Voice and Data Comms. Voice and Data Comms. Network Management Systems Network Management Systems Image processing Image processing System performance assessment System performance assessment
2003 US budget request $8 bn
from strong order books
Maximise value from our existing defence Maximise value from our existing defence and aerospace portfolio and aerospace portfolio
Good growth is anticipated in platforms and the emerging C4ISR and S3I markets and S3I markets
1997 2001 Future C4ISR S3I Platforms Commercial aircraft
– Facilitates closer links between US and UK businesses – Eliminate duplication – Creates focused centres of excellence – Enhance operational performance
Maximise the value of our subsystems Maximise the value of our subsystems position in support of Prime business position in support of Prime business
Embedded LO EW Arrays / Electronics
Tailored IR Flares Vehicle Management Computer Advanced Digital Receiver Architecture Active Throttle Solid State Rate Gyros
Interface Unit RF Unit Countermeasures Dispenser Power Supplies Array Power Supply Vehicle Management System Aperture Array Electronics
$ Billion 1 2 3 4 5 6 7 8 F-35 Typhoon F-22 F/A-18E/F F-16 AH-64 EA-6B C-17 F-15 UH-60 Tornado C-130 V-22 * Based on outlook value
platform integration and export assumptions
Company transformation – – Transatlantic position established Transatlantic position established – – European Joint Ventures successfully restructured European Joint Ventures successfully restructured – – A line drawn under Regional Aircraft market exposure A line drawn under Regional Aircraft market exposure
Growth secured by large order book
Well positioned for emerging opportunities – – C4ISR C4ISR – – US budget growth US budget growth – – Homeland Security Homeland Security – – Growth in Air, Sea Systems and S3I Growth in Air, Sea Systems and S3I
Commercial aircraft down-
cycle managed -
poised for upturn
Fundamentally improved the risk profile of the company going forward ward
MM1091
Loss for the year incl. exceptional items and goodwill amortisation Preference dividend Earnings for the year incl. exceptional items and goodwill amortisation Addback Goodwill amortisation Exceptional items Tax on exceptional items Earnings for the year excl. exceptional items and goodwill amortisation Weighted average Ordinary Shares in issue (millions) Weighted average incl. Options and Preference shares (millions) Diluted earnings per share : Including exceptional items and goodwill amortisation Excluding exceptional items and goodwill amortisation
2001
(134) (21) (155) 495 518 (148) 710 3,034 n/a (5.1)p 23.4p * 2000 Restated
2000
(25) (21) (46) 373 307 (72) 562 2,992 n/a (1.5)p 18.8p
Profit before tax* Goodwill amortisation Exceptional items Profit before tax Tax - ordinary items Tax - exceptional items Minority interests Loss for the year Diluted earnings per share* 2001 1,083 (495) (518) 70 (346) 148 (6) (134) 23.4p 2000 859 (373) (307) 179 (270) 72 (6) (25) 18.8p £ millions
* Excluding exceptional items and goodwill amortisation Restated
Defence sector rationalisation MES integration costs Regional Jet cessation Other Commercial aerospace Total exceptional items 2001 (95) (53) (250) (120) (518) £ millions 2000 (156) (151)
2001 (35) (325) (20) (56) (2) (57) (495)
Siemens Plessey / Saab MES LMCS AES Other acquisitions Airbus Annual Goodwill amortisation £ millions
20 20 20 20 20 20 2000 (36) (328) (4) (3) (2)
Loss for the year incl. exceptional items and goodwill amortisation Preference dividend Earnings for the year incl. exceptional items and goodwill amortisation Addback Goodwill amortisation Exceptional items Tax on exceptional items Earnings for the year excl. exceptional items and goodwill amortisation Weighted average ordinary shares in issue (millions) Basic earnings per share : Including exceptional items and goodwill amortisation Excluding exceptional items and goodwill amortisation
2001
(134) (21) (155) 495 518 (148) 710 3,034 (5.1)p 23.4p
2000*
(25) (21) (46) 373 307 (72) 562 2,992 (1.5)p 18.8p * 2000 Restated
Net debt at 31/12/2000 Operating cash flow Non operating cash flow Net debt at 31/12/2001
£ millions
2001 (899) 510 (442) (831)