Typhoon in flight

"In the first half of 2016, BAE Systems performed well. Despite economic and political uncertainties, governments in our major markets continue to prioritise national security, with strong demand for our capabilities. In the US, we are seeing encouraging signs of a return to growth in defence budgets and improved prospects for our core franchises. In the UK, the result of the EU referendum will lead to a period of uncertainty, but we do not anticipate any material near-term trading impact on our business.

Our business benefits from a large order backlog, with established positions on long-term programmes in the US, UK, Saudi Arabia and Australia. We are well placed to maximise opportunities, deal with the challenges and continue to generate attractive shareholder returns.”

Results in brief
Six months ended 30 June 2016
Six months ended 30 June 2015
Year ended 31 December 2015
Underlying EBITA
Operating profit
Underlying earnings per share
Basic earnings per share
Order backlog
Dividend per share
Operating business cash flow
Net debt (as defined by the Group)


Financial key points
  • Sales1 increased by £0.2bn to £8.7bn mainly due to exchange translation
  • Underlying EBITA2 increased by 6% to £849m, or 3% on a constant currency basis
  • Underlying earnings3 per share increased by 2% to 17.4p
  • Large order backlog1,5 of £36.3bn
  • Interim dividend increased by 2% to 8.6p per share
  • Net debt8 of £2.0bn on utilisation of customer advances
  • Group’s share of the pre-tax accounting net pension deficit9 increased by £1.6bn to £6.1bn
Key business highlights
  • In April, Eurofighter partner, Leonardo, signed a contract to supply 28 Typhoon aircraft to Kuwait, which is expected to result in airframe manufacture, capability upgrade and Electronically Scanned (E-Scan) radar integration work valued at approximately £1bn for BAE Systems
  • In July, BAE Systems welcomed a ten-year partnership arrangement with the UK Ministry of Defence, expected to be worth £2.1bn, to support the UK Typhoon fleet
  • Three contracts announced with a total value of approximately £300m to support the UK Ministry of Defence’s fleet of Hawk fast jet trainer aircraft until 2020
  • Awarded a £118m contract to build engineering and training facilities in the UK for F-35 Lightning II aircraft
  • UK and French governments announced a new €2bn (£1.7bn) project to build an unmanned combat air system demonstrator
  • £472m UK Ministry of Defence contract extension to the Type 26 frigate demonstration phase
  • $245m (£183m) contract to provide three gun systems and a trainer for the Royal Navy’s Type 26 frigate
  • $149m (£111m) contract for the production of new Assault Amphibious Vehicles for the Japanese Ministry of Defence
  • $182m (£136m) contract to refurbish 262 Swedish Army CV90 combat vehicles
  • The MBDA joint venture, in which BAE Systems has a 37.5% interest, continued to win new orders, BAE Systems' share of which was £462m in the first half of 2016
Guidance for 2016
With some anticipated trading bias to the second half of the year, the Group continues to expect underlying earnings2 per share for 2016 to be approximately 5% to 10% higher than the adjusted underlying earnings2 per share of 36.6p* in 2015.
* Reported underlying earnings2 per share of 40.2p excluding tax provision releases of 4.3p per share and adjusting for a 0.7p per share benefit to an assumed US$1.45 to sterling translation rate. A ten cent movement in the US$/£ exchange rate translates to approximately 0.8p in underlying earnings2 per share. 
View more information on our investors site
For more information, please contact:
Rachael Gordon, BAE Systems
M +44 (0) 7793423682
E rachael.gordon@baesystems.com
Kristina Anderson, BAE Systems
M +44 (0) 754062 8673
E kristina.anderson@baesystems.com
Issued by:
BAE Systems plc
Media hotline: + 44 (0) 7801 717739
Ref: 098/2016
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Rachael Gordon
Strategic and External Communications Director
Air Communications

+44 (0) 7793 423682