I am pleased to report that 2018 was another successful year for the Company.
The challenges and opportunities were substantial and the management team – under Charles Woodburn’s leadership – navigated through testing geopolitical conditions to deliver a record defence order book – a modest growth in earnings per share – with cashflows that supported an increase in your total dividend for the year to 22.2pence per share.
Our achievements in the year were also instrumental in rebalancing the geographic footprint of the business towards our Commonwealth partners – and underpinning our maritime credentials – through significant wins from Australia and Canada based on the world-beating Type 26 anti-submarine warfare frigate.
These orders – together with the sale of the Typhoon and Hawk aircraft to Qatar – the ramp up of demand for both F35 – and amphibious combat vehicles in the USA – and continued growth in demand for our electronics capability worldwide – all help to underpin the future prospects of the business for years to come.
To meet these demands – we have continued to invest in our people and plan to recruit up to 700 UK apprentices and 300 graduates in the coming year – developing young talent within the organisation – and importing fresh perspective from outside the Company.
Succession planning is also important at Board level.
Sadly – later this year – we will lose Harriet Green after nine years’ service. Harriet has made a remarkable contribution to the Board sharing her broad managerial experience – deep technical understanding of the digital world – and passion for performance and diversity – she will be much missed.
We have recruited two first class non-executive directors who will join in June of this year.
Stephen Pearce – a seasoned CFO at Anglo American – and Nicole Piasecki – who recently retired from a 25 year career as a top executive in Boeing. Both outstanding additions to the team.
And – in a period of change – we have been fortunate to extend the services of Nick Rose as SID and Audit Chair through to the year end.
The business model is strong – but the geopolitical environment remains uncertain. As I have said before – Brexit has a limited near term impact on our Company – but the Middle East – remains unstable.
Whilst the British government has been robust in their dialogue with Saudi Arabia – our government and our Company continue to work with the Kingdom – respecting the importance of the defence and security relationship – the strength and depth of our economic ties – and the value of influence as a thoughtful partner.
Across the globe – there are few businesses with such strong order books – few defence companies that enjoy such a wide geographic spread – and even fewer technology and engineering businesses that have the depth of expertise that is embedded in BAE Systems.
We remain a Company that is performance driven – export regulated – but values led.
We have pride in what we do – a commitment to excellence in how we do it – and government approval as to whom we do business with.
I am clear that some of you here today may have reservations about the nature of our work and the customers we serve – and I am sure you will register your concerns in the question and answer session a little later.
I would – however – hope that mutual respect and good manners will be the hallmark of our discussions.
Looking forward – I am pleased to confirm we have a clear and unchanged strategy – a focus on operational excellence – a policy of prudent capital allocation – a commitment to our stakeholders – and a strong management team with the determination to achieve profitable growth in an uncertain world.
And on that note – I will now introduce the members of the Board.
Our Chief Executive, Charles Woodburn, is sitting immediately to my right – next to him is Peter Lynas, Group Finance Director – next to Peter is Nick Rose, who is our Senior Independent Director and also the Chairman of the Audit Committee.
Next to him are three non-executive directors – Elizabeth Corley – Ian Tyler – who is chairman of the Board’s Corporate Responsibility Committee – and finally Harriet Green.
Turning to my left, we have the Company Secretary, David Parkes – then Jerry DeMuro – the President and CEO of our US business.
Next to Jerry is Paula Rosput Reynolds – a non-executive director who chairs the Remuneration Committee – then Chris Grigg – and Revathi Advaithi, both of whom are non-executive directors.
I will now hand over to Charles before commencing the formal business of this meeting.
Charles, thank you.
It’s time now to turn to the main business of the meeting.
The Notice of Meeting and the 2018 Annual Report have been made available to all members, and I now formally propose all the resolutions as shown in the notice.
We will take questions on the resolutions shortly. After which I will ask you to vote on the resolutions.
Voting will be by way of a poll. For this you will need a poll card. You should have received this either by post, or when you registered here earlier today.
At the end of the meeting I will ask you to vote on the resolutions. Simply put a cross in the ‘For’ or ‘Against’ box on your card. Once you have voted, please sign and date the card and, after the meeting has finished, deposit it in one of the ballot boxes that you will see just outside. The results will also be posted on the Company’s website.
Introduce Q&A process
Before the start of the meeting a number of you registered the fact that you wish to ask questions. If you didn’t register a question before the start of the meeting you can still ask one – simply go to one of the question points in the centre of the room.
As we are voting by way of a poll at the end of the meeting, we do not have to stop and vote on individual resolutions. I will now open up the meeting to any shareholder who wishes to ask a question on any of the resolutions.
I see there is already someone ready and waiting at question point A. So let’s start off by taking a question from there. If you could begin by stating your name….please go ahead.
[Chairman conducts Q&A session]
Voting on resolutions after questions
That concludes the questions, and I will remind you shortly about how to vote on the resolutions.
But first – it is best practice that shareholders are advised of the votes submitted by shareholders prior to the meeting. We have nearly 100,000 shareholders – many of whom choose to vote by proxy rather than attend in person.
On the screen you will now see details of the votes cast by them.
[Slides on proxy votes per resolution (15 secs each]
As you can see, there is a clear majority in favour of all the resolutions.
The proxy figures are not the final results – although they are a very good indicator.
The final results will only be available after you have voted.
If you sent a proxy card in ahead of the meeting you can, if you wish, vote again today – changing your original instructions. If you decide to do this, your original card will be disregarded.
Can I now ask you to vote on the resolutions by completing your poll cards. Once completed you should deposit them in the ballot boxes as you leave the meeting. The poll will close 15 minutes after the end of the meeting.
That concludes the business of this year’s AGM. Therefore, I now declare the meeting closed.
Lunch will be served next door.
Thank you all for attending.