In the UK we decided who would run the country and that we would remain a United Kingdom. The world at large has sadly become a more uncertain place with increased conflict and terrorism.
Economically – volatile oil prices and falling commodity prices have taken their toll – such that prospects for growth and prosperity have softened in many countries.
For BAE Systems – the combination of these changes has increased the importance of defence for many of our customers whilst simultaneously reducing their income to fund their rising demand for our products and services.
Our response to these challenges has been to work even more closely with our customers in ensuring we are developing and building products of the highest quality whilst driving down costs and strengthening our service commitment.
This approach has been the hallmark of management endeavour under Ian King’s leadership throughout the year – and has been instrumental in strengthening relationships and delivering sound results.
Whilst in the outside world much has changed, I am pleased to report that inside the company our guiding principle of being performance driven, but values led has remained firmly in place.
We trade scrupulously, account conservatively and act with integrity. Our customers are approved by the relevant government – our products are exported under strict regulation and we require all of our people to uphold the strict ethical standards set out in our code of conduct.
The Board has remained resolute that wherever the country – whoever the customer – or whatever the commercial pressure – these principles are non-negotiable – and whether employee, customer or shareholder – you have my assurance that in BAE Systems – good performance and good governance – will always go hand in hand.
During the course of the year I visited many of our businesses across the globe to reinforce the principles of the way we do business – and see at first hand the business that we do.
Without exception I have been consistently impressed by the technical skills of our people – their enthusiasm, pride and determination – to deliver world-class products and services – to protect and serve those that serve and protect us.
In the UK I saw the investment we have made in training facilities for the 2,000 apprentices and graduates we are training this year.
Further afield I saw the work we continue to undertake in developing local businesses that will ultimately employ the young and talented people of their countries.
Across the world there is no doubt that the skills we develop and the jobs we create – at BAE Systems and across our supply chains – benefit all the countries in which we operate – but specifically in the United Kingdom, the fact that we account for one per cent of all exports and 45 pence in every £100 of gross domestic product should not be underestimated.
I am particularly proud therefore that our business rewards not only you our shareholders with an attractive dividend – but also the countries in which we operate, with an important contribution to skills, employment and technology innovation and our collective prosperity.
In the boardroom and at many levels across the company we are adding to our skillset and refreshing our mind-set – by bringing in new people – to ensure we mine the rich seams of diversity in all its forms – so that we have a team of all the talents to govern and manage today and plan for tomorrow.
In February Elizabeth Corley joined our board as a non-executive director – a respected individual from the financial investment community – she is a thought leader in good governance with a sharp analytical business mind built on international experience.
Later this month we will be joined by Charles Woodburn in the newly created role of Chief Operating Officer.
In his mid-40s – Charles has impeccable academic credentials, a strong engineering pedigree and a proven track record in senior leadership roles across the globe in both public and private energy businesses. I am confident that Charles will be a strong addition to the executive team.
I am also pleased to confirm that my own role as Chairman of this remarkable company has been extended for a further three year term until February 2020 following a process led by Nick Rose the Senior Independent Director – an offer I was delighted to accept.
Finally, whilst I know many of you here today will have been pleased to hear of the continued success of your company – some of you will have genuine reservations about both what we do and where we do it.
As always, there will be an opportunity to put questions to the Board a little later this morning and I and my team will seek to respond clearly, honestly and courteously.
I would ask that in the same spirit you reciprocate for the benefit of all other shareholders here today.
Whilst we may not always agree – I am certain that mutual respect and good manners will always produce the most valuable exchanges.
In a few minutes I will hand over to Ian King who will bring you up to date on the company’s performance.
Then I’ll deal with the formal resolutions detailed in the Notice of Meeting. Finally, I’ll take questions you may have on the business of the meeting.
I will aim to finish the meeting by no later than one o’clock, when lunch will be available.
I’ll now introduce the members of the Board.
Our Chief Executive, Ian King, 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 two non-executive directors, Harriet Green and Ian Tyler. Ian is chairman of the Board’s Corporate Responsibility Committee.
Turning to my left, we have the Company Secretary, David Parkes. Then Jerry DeMuro, the President and CEO of our US business. Next to him is Paula Rosput Reynolds, a non-executive director who chairs the Remuneration Committee. And finally, two non-executive directors, Chris Grigg and Elizabeth Corley. As I mentioned, this is Elizabeth’s first AGM, having joined the Board earlier this year.
I will now hand over to Ian King to give you a more detailed review of the Company’s performance in 2015.