BAE Systems Annual Report 2008
Annual Report 2008

BAE Systems at a glance

BAE Systems, with 106,400 employees1 worldwide, delivers a full range of systems and services for air, land and naval forces, as well as advanced electronics, information technology solutions and customer support services.

Group

  • Strong financial performance
  • Further progress in delivery of strategy
  • Accelerated development of security business
  • Exceptional year for Land & Armaments

Sales1,2 by operating group3 (%)

£18,543m

Sales1 for 2008

Underlying EBITA4 by operating group3 (%)

£1,897m

Underlying EBITA4
for 2008

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The Electronics, Intelligence & Support operating group designs, develops, produces and services systems and subsystems for a wide range of military and commercial applications. It comprises four lines of business: Electronic Solutions, Information Solutions, Platform Solutions and Support Solutions.

Number of employees1, 3

33,900

Key points from 2008

  • Maintained leadership in electronic warfare systems
  • Won key IT, situational awareness and aviation sustainment contracts
  • Addressing market for vehicle power management systems
  • Sustained leadership in US non-nuclear ship repair
  • Increased research and development investment

Land & Armaments provides design, development, production, through-life support and upgrade of armoured combat vehicles, tactical wheeled vehicles, naval guns, missile launchers, artillery systems and munitions.

Number of employees1, 3

21,300

Key points from 2008

  • High volume of vehicle reset and upgrade activity
  • Successfully addressed US mine protected vehicle requirements
  • 15-year UK munitions partnering agreement secured
  • Wheeled armoured vehicle successes
  • Joint Light Tactical Vehicle down select

Programmes & Support comprises the Group’s UK-based air and naval activities, the activities of the acquired Detica security business and the Integrated System Technologies business.

Number of employees1, 3

30,200

Key points from 2008 

  • Successful transition to start of Typhoon Tranche 2 deliveries
  • BVT Surface Fleet naval joint venture formed
  • Manufacturing contract for Future Carriers secured
  • Detica acquisition completed
  • First Type 45 successfully delivered off contract

The International operating group comprises the Group’s businesses in Saudi Arabia and Australia, together with a 37.5% interest in the pan-European MBDA joint venture, a 20.5% shareholding in Saab of Sweden and a 49% shareholding in Air Astana.

Number of employees1, 3

19,200

Key points from 2008

  • Saudi Typhoon programme (Salam) progressing to schedule
  • Tenix Defence acquisition completed; price adjustments in negotiation
  • Impairment taken of £120m on Saab carrying value

HQ & Other Businesses comprises the regional aircraft asset management and support activities, head office and UK shared services activity, including research centres and property management.

1 Including share of equity accounted investments.
2 Before elimination of intra-group sales.
3 Excluding HQ & Other Businesses.
4 Earnings before amortisation and impairment of intangible assets, finance costs and taxation expense (EBITA) excluding profit/(loss) on disposal of businesses and uplift on acquired inventories. Restated to exclude profit/(loss) on disposal of businesses. See Financial review.