In 2008, Electronics, Intelligence & Support (EI&S) achieved underlying EBITA2 of £506m (2007 £437m) on sales1 of £4,459m (2007 £3,916m) and generated operating cash inflow3 of £380m (2007 £302m).
On a like-for-like basis, sales1 growth was 6% over 2007.
In June, BAE Systems completed the acquisition of MTC Technologies which contributed post-acquisition sales1 of $181m (£98m) and underlying EBITA2 of $2m (£1m).
Electronic Solutions
The low-rate initial production contract for the US Navy's decoy system on the F/A-18 E/F Super Hornet was received. The system provides aircraft defence against radar-guided missiles.
The F-35 Lightning II low-rate initial production (LRIP) of two electronic warfare suites continues, with existing funding providing deliveries through to 2012.
BAE Systems was selected as a partner in developing and producing the Airborne Maritime Fixed Station Joint Tactical Radio Systems (JTRS), which will consist of software-defined radios that enable commanders to share information across ships, enhance decision-making, and increase mission capability. With this award, BAE Systems is now a partner on all five programmes that comprise JTRS, the family of software-programmable tactical radios that will permit combat personnel to communicate at every level of command.
Deliveries commenced under a five-year contract to provide thermal imaging modules for the US Army's Common Remotely Operated Weapon System that allows soldiers to detect and identify targets while remaining protected in their vehicles. To date, orders received under this contract total $110m (£76m). A $169m (£116m) extension from the US Army for continued production of thermal weapon sights was received. This programme has a production rate of 1,500 units per month, with more than 37,000 delivered by the end of 2008.
In support of homeland security and safety, JETEYE®, the infrared aircraft missile defence system, began its nine-month evaluation aboard civilian passenger aircraft in July and First InterComm™, an interoperable communications and data solution system for first responders, has been deployed in seven US states.
US defence research and development programmes launched in 2008 included bio-inspired, miniature, intelligence-gathering robots, tactical ultra-low visibility communications, advanced night vision technology, and all-weather advanced persistent surveillance systems. These programmes represent the strengthening of core business areas as well as advances into new market areas.
Information Solutions
Our Information Technology business continues to be ranked in the top 25 by Computer World Magazine as a Best Place to Work in IT.
Five multiple and one single-award indefinite delivery/indefinite quantity contracts were received in the year, including a position on the Defense Information Systems Agency's Encore II contract.
Platform Solutions
Following the launch of its improved HybriDrive® propulsion system, BAE Systems' partner, Alexander Dennis, delivered its first double-deck hybrid electric bus to Transport for London with the buses scheduled to enter revenue-service testing in 2009. BAE Systems also expanded the global reach of the HybriDrive® programme by entering into agreements with Japan's ISUZU and North America's New Flyer Industries.
Collaborating with Land & Armaments, the business will provide power management components on board the Warrior demonstration vehicle supporting the UK Ministry of Defence programme to create an architecture that allows vehicles to power systems such as communications and electronic warfare suites. The same architecture will allow future upgrades to add more accessories and convert hydraulic systems to electrically powered systems.
Support Solutions
The US Air Force named BAE Systems one of the 12 prime contractors on the Future Flexible Acquisition and Sustainment Tool contract. This indefinite delivery/indefinite quantity contract, under which prime contractors compete for task orders, has a total potential value of $6.9bn (£4.8bn). The contract will address future US Air Force requirements for modifications, development, and maintenance of weapon systems managed by the US Air Force and Air Force Special Operations Command.
BAE Systems received a US Air Force contract to support the Tactical Air Control Party (TACP) Modernisation Vehicular Communications System programme. With an initial value of $120m (£83m) and a maximum potential value of $233m (£161m), BAE Systems will design, produce and install state-of-the-art communications for up to 400 TACP ground vehicles.
In the ship repair business, work continues at the San Diego shipyard to maintain, repair, and modernise the guided missile cruiser USS Bunker Hill, and efforts are progressing on a five-year multi-ship, multi-option contract to maintain and repair all Arleigh Burke-class destroyers. The US Navy awarded BAE Systems a post-shakedown availability contract for destroyers and a multi-ship multi-option award for repairs to mine countermeasures ships.
In June, the acquisition of MTC Technologies provided the business with increased technical and professional service capabilities, and equipment integration and modernisation capabilities for the US military and intelligence customers.
In 2008, the Technology Solutions and Services business won all of its major recompetes.
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Capability
EI&S's UK site became an Authorised Economic Operator and the first multinational organisation to attain this industry standard for supply chain security. The European Union certification gives priority customs clearance and increased security for shipments entering or leaving the European Union, helping drive integration of the EI&S global supply base.
Innovation
BAE Systems is leading a team of scientists to develop miniature robots to improve military situational awareness. The business signed a $38m (£26m) contract with the US Army Research Laboratory to develop autonomous, multi-functional intelligence-gathering robots that can operate in places too inaccessible or dangerous for humans.