The information on this page is taken from the presentations accompanying our 2025 preliminary results announcement on 18 February 2026.
Our key advantages
- We provide customers with world-class defence products and capabilities across multiple markets.
- We undertake multi-decade programmes with long-term embedded value. Our contract order backlog provides a high level of sales visibility, driven by multi-year programmes.
- We have a growing opportunity pipeline. Our diverse geographic footprint supports us in pursuing excellent opportunities across all sectors as countries around the world face up to the multi-faceted threat environment.
- We foster a high-performance, innovative culture and consistently invest in research & development to build on existing world-leading capabilities and generate new innovative and disruptive technologies.
- We have an intense focus on operational excellence, with strong, consistent programme performance. We focus on creating value for our investors and customers.
- Sustainability is embedded in our business - it forms part of our strategic framework and underpins our purpose.
- We operate a value-enhancing operating model, undertaking our core business activities with a clear, consistent and careful capital allocation.
Group guidance for 2026
Guidance is provided on the basis of an exchange rate of $1.32:£1, which is in line with the actual 2025 exchange rate.
Whilst the Group is subject to geopolitical and other uncertainties, the guidance is provided on current expected operational performance.
Sensitivity to foreign exchange rates: the Group operates in a number of currencies, the most significant of which is the US dollar. As a guide, a 5 cent movement in the £/$ exchange rate will impact sales by c.£500m, underlying EBIT by c.£70m and underlying EPS by c.1.4p.
Sales
Underlying EBIT
Underlying EPS
Free Cash Flow
Our strategic priorities
Our investment proposition is driven by our consistent strategy and strategic priorities to…
Drive operational excellence
Continuously improve competitiveness and efficiency
Advance and further leverage our technology
Our diverse geographic footprint
With a presence in more than 40 countries, we’re the largest defence contractor in the UK and Australia and a top 10 prime contractor in the US.
Our multi-decade programmes and growing opportunity pipeline
£83.6bn
total order backlog
£13.6bn
Electronic Systems
£15.0bn
Platforms & Services
£32.6bn
Air
£21.3bn
Maritime
£2.1bn
Cyber & Intelligence
Our disciplined capital allocation
Investment in the business
Investment in our people
Capex to drive growth
Increasing R&D
Free cash flow 2026‐2028: in excess of £6bn
Dividend
M&A
Buyback
Balance sheet strength and flexibility – maintain investment grade rating
Clear, consistent and disciplined capital allocation policy
Attractive returns to shareholders
- 2025 final dividend of 22.8p, taking the total dividend for 2025 to 36.3p, up 10%. Subject to shareholder approval, the final dividend will be paid on 4 June 2026.
- Dividend cover of c. 2x underlying earnings.
- 22 years of dividend increases.
- Up to £1.5bn share buyback programme ongoing.
- (1) 2020 does not include the interim dividend of 13.8p per share paid in September in respect of 2019 performance. This amount is reflected in the 2019 dividend history.
What we look to achieve in the coming years…
- Strong consistent programme performance.
- Accelerate our sustainability agenda.
- Strong cash conversion.
- Technology investment.
- Top-line growth.
- Focused capital allocation.
- Efficiency and simplification in working.
- Increased return on sales.
- Higher return on capital employed (ROCE).
- Portfolio shaping for value creation.
- Secure further opportunities and widen market base.
Targeted guidance, subject to geopolitical and other uncertainties.
Electronic warfare
Combat air
Combat vehicles
Undersea warfare
Cyber
Naval ships
Battlespace integration capabilities
Our solutions in autonomous, networking, communications and data exploitation augment and differentiate our platform businesses.
Legal notice
The material on this webpage (the Material) relates to the period ended 31 December 2025 and is provided for general information only. The Material does not (1) form part of the BAE Systems Annual Report 2025; or (2) contain sufficient information to allow as full an understanding of the results and the state of affairs of BAE Systems plc as the BAE Systems Annual Report 2025. As such this Material should not be relied upon or used as the basis for making voting or investment decisions without consulting the full BAE Systems Annual Report 2025 and other more complete or up-to-date sources of information including any of BAE Systems plc’s more recent public reports. Information relating to BAE Systems plc’s results for current and prior periods do not necessarily reflect future trends, nor do they provide indicators of results for like periods. This Material is not intended to be and shall not be deemed to be an invitation or inducement to invest in or otherwise deal in any securities of BAE Systems plc’s or in any other investment, nor to provide or constitute any advice or recommendation in connection with any investment decision, nor to constitute an offer to provide services in any jurisdiction in which BAE Systems plc’s is not permitted to do so under any applicable law or regulation.
Cautionary statement
The Material may contain certain forward-looking statements, forecasts or projections with respect to the financial condition, results of operations and businesses of BAE Systems and certain of the plans and objectives of BAE Systems with respect to these items. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of BAE Systems. Actual results may differ materially from those expressed in such statements depending on a variety of factors, including the principal risks and uncertainties discussed under “Our principal risks” on pages 65 to 72 of the BAE Systems Annual Report 2025.
Please refer to the cautionary statement in the full BAE Systems Annual Report 2025 for further information on forward-looking statements.