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BAE Systems announces 2014 full year results

Kevin Taylor - Managing Director
In 2014, BAE Systems delivered a solid overall performance, in line with guidance.

“We continue to win significant new business with over £10bn of new orders from the UK and US for the third successive year. As a result, the large order backlog of £40.5bn continues to provide good, multi-year visibility across many of our businesses.

Looking ahead, defence spending remains a high priority in a number of international markets. In the UK, we benefit from long-term contracts, notwithstanding continued pressure on public spending. We believe US budgets are now relatively stable, with some early indications of a modest improvement in 2016.

These are competitive times and we will continue to invest in and develop the technology, skills and market positions needed to drive the business forward. The Group is well positioned to continue to deliver shareholder value.”

Ian King, Chief Executive, BAE Systems

  2014 2013
Sales £16,637m £18,180m
Underlying EBITA £1,702m £1,925m
Operating profit £1,300m £806m
Underlying earnings per share 38.0p 42.0p
Basic earnings per share 23.4p 5.2p
Order backlog £40.5bn £42.7bn
Dividend per share 20.5p 20.1p
Operating business cash flow £1,191m £147m
Net debt (as defined by the Group) £(1,032)m £(699)m


  • Sales were £16.6bn. The year-on-year reduction of £1.5bn reflected £0.6bn of adverse exchange rate translation, the expected volume reductions in Land & Armaments and the previous year’s benefit from the one-off price settlement for Salam Typhoon.
  • Underlying EBITA was £1,702m. The year-on-year position was broadly unchanged after allowing for exchange rate translation and the one-off 2013 price settlement.
  • Margin performance delivered a return on sales of 10.2%.
  • Underlying earnings per share increased from 37.6p to 38.0p after excluding the benefit from the price escalation settlement in 2013.
  • £925m returned to shareholders in 2014, from share repurchase programme and dividends.
  • Large order backlog of £40.5bn.


  • Acceleration of capability expansion on the Typhoon aircraft with commitments to additional weapons integration and E-Scan radar.
  • Major milestone achieved with naming and float-up of HMS Queen Elizabeth aircraft carrier. Over £1bn of Royal Navy contracts awarded.
  • Contract award received for the US Armored Multi-Purpose Vehicle, creating a new franchise.
  • Selected to provide the integrated flight control electronics and other systems for next-generation Boeing 777X aircraft.
  • US-managed business streamlined to improve competitiveness.
  • Operational progress made, but further charges taken, on US commercial shipbuild contracts.
  • BAE Systems Applied Intelligence delivered organic sales growth of 10%, driven by growth in commercial cyber security. Order backlog increased 37%.
  • SilverSky acquisition completed, enhancing the Group’s strategy to grow the commercial cyber business.


BAE Systems Applied Intelligence delivers solutions to both commercial and government organisations that help those organisations protect and enhance their mission-critical assets in the intelligence age. Highlights for this period:

  • The business continues to grow through selling its portfolio of products and services to domestic and international governments, financial institutions, communications service providers, energy and utility operators and other commercial enterprises, resulting in organic sales growth of 10% and order backlog increase 37%.
  • In December, BAE Systems completed the acquisition of SilverSky, a US-based next-generation managed security service provider that offers a suite of scalable cloud-based security and compliance solutions to the fast-growing cyber security market further enhancing the Group’s strategy to grow the commercial cyber business.
  • IndustrialProtect™, a military-grade solution to protect industrial control systems, was launched in the US and the Middle East and has already received its first order from a major global energy company.
  • Cyber Managed Security Services continues to gain traction. For the second year in a row the business was a recipient of the Frost & Sullivan Customer Value Leadership Award for Managed Security
  • Demand for NetReveal® has increased with NetReveal OnDemand being selected by major financial institutions including Royal and Sun Alliance (RSA) in Canada.
  • Success continues in the Service Integration and Applications Management market, with new and additional multi-year contracts worth £45m awarded, including new contracts with the Highways Agency and Skills Funding Agency
  • BAE Systems is recruiting almost 300 graduates in 2015, 98 of them will join the Applied Intelligence business.

Kevin Taylor, Managing Director of BAE Systems Applied Intelligence said:
“With cyber-crime and fraud increasingly connected, our portfolio and threat intelligence put us in a strong position to combat the comprehensive range of threats that the new intelligence age brings. A highlight of the year was the acquisition of next-generation managed security service provider, SilverSky. The acquisition helps BAE Systems to deliver on its strategy to grow its commercial security business and, joined with our existing organisation and people skills, puts us in a position to detect and protect organisations’ mission critical data in a hyperconnected world.”

For more information, please contact:

Natasha Davies, BAE Systems
M: 07787 297 831

Rachael Gordon, BAE Systems
T: 01252 384719
M: 07793 423682

Issued by:
BAE Systems plc
Tel: +44 (0) 1252 384719
24 hour media hotline: +44 (0)7801717739