BAE SYSTEMS is a systems company innovating for a safer world and delivering total solutions to customer requirements, from the outermost reaches of space to the depths of the oceans. BAE SYSTEMS has international markets around the globe producing annual sales of some £12 billion. Including joint ventures, BAE SYSTEMS employs world-wide more than 90,000 people, committed to delivering outstanding capability to customers through the quality technology, the robust processes and the innovation of its people.

BAE Systems figure parmi les premiers constructeurs aéronautiques mondiaux. Le groupe participe à de nombreux programmes européens, notamment ceux d'Airbus et d'Eurofighter.
- défense  : programmes militaires (Eurofighter Typhoon, Nimrod et Hawk), conception et fabrication de systèmes électroniques, de systèmes de contrôle, imagerie et radars, construction de navires de guerre et assemblage de pièces de défense sous-marines 
- civil : conception et fabrication de pièces pour avions de ligne et avions régionaux d'Airbus 
- autre  : programmes de recherche, partenariats, et services.

http://www.baesystems.com/

Results from continuing operations  2006  Restated6 2005 
Sales1  £13,765m  £12,581m 
EBITA2  £1,207m  £909m 
Operating profit  £1,054m   £761m 
Underlying earnings3 per share  23.8p  18.4p 
Basic earnings per share4  19.9p  13.9p 
Order book5  £31.7bn  £30.8bn 
Other results including discontinued operations 
Dividend per share  11.3p  10.3p 
Cash inflow from operating activities  £778m  £2,099m 
Net cash/(debt) as defined by the Group
  £435m  £(1,277)m 

Highlights
– Good financial performance
– Continued growth from US businesses
– Implementation of UK Defence Industrial Strategy underway
– European business portfolio restructuring completed
– UK pension funding deficit addressed
– Airbus sale completed
– Underlying earnings3 per share up 29.3% at 23.8p
– Dividend increased 9.7% to 11.3p per share for the year

Outlook
Looking forward to 2007 we anticipate a further year of good growth led by our US businesses, in particular from the Land & Armaments sector, and from further progress in the Programmes business.
We anticipate good operating cash flow again in 2007.

1 including share of equity accounted investments
2 earnings before amortisation and impairment of intangible assets, finance costs and taxation expense
3 earnings excluding amortisation and impairment of intangible assets, non-cash finance movements on pensions and financial derivatives, and uplift on acquired inventories (see note 5)
4 basic earnings per share in accordance with International Accounting Standard 33
5 including share of equity accounted investments’ order books and after the elimination of intra-group orders of £0.8bn (2005 £0.9bn)
6 restated following the sale of Airbus SAS

A strong platform for future performance

Year in review
BAE Systems delivered another year of good financial performance, underpinned by programme schedule and cost adherence across the Group and reflecting the benefits now flowing from our world-class Lifecycle Management and Performance Centred Leadership processes.

Sales1 increased 9% from £12,581m to £13,765m. Organic growth was 5%. Sales in the full year from the former United Defense activities, acquired in June 2005, were £1,670m (2005 £789m).

EBITA2 increased 33% to £1,207m (2005 £909m). The growth includes the benefit of a full year’s trading from the former United Defense activities, acquired in June 2005, which contributed EBITA2 of £169m (2005 £60m) in the year. As reported at the half year, included within EBITA2 is a £61m one-off accounting gain in the Electronics, Intelligence & Support business group arising from a reduction in the net pension liability following the changes to the calculation of final US pensionable salaries. Losses at Regional Aircraft amounted to £114m, these are reported within HQ and other businesses.

Return on sales (EBITA2 adjusted for uplift on acquired inventories expressed as a percentage of sales) for the Group increased from 7.6% to 8.8%. Return on sales excluding the one-off pension gain referred to above was 8.3%.

Order book increased to £31.7bn, primarily on US awards in the Land & Armaments business and on securing the Availability Transformation – Tornado Aircraft Contract (ATTAC) in Customer Solutions & Support.

The performance of the US businesses has again been excellent with the Group’s expansion in the US market over recent years generating good returns. Good progress has continued in the UK businesses with programmes on track and meeting their key milestones.

A number of export opportunities have also progressed, most notably in the Kingdom of Saudi Arabia where, under an agreement between the Kingdom of Saudi Arabia and the UK government, the Group is working to modernise the Saudi armed forces including progressing towards a contract for 72 Typhoon aircraft.

We have continued to divest those businesses that were non-core to our strategy. In May the Group initiated the sale of its 20% shareholding in Airbus. The decision to sell the Airbus stake was consistent with our strategy of maximising value from that business, recognising it was facing an increasing number of challenges. The sale was completed in October following shareholder approval. The proceeds will be directed to developing the core business and a repurchase of up to £500m of the Group’s shares is underway.

The sale of the Aerostructures business was completed in March and the sale of Atlas Elektronik was completed in August.

A big concern for the Group in recent years has been the funding of its pension schemes. Agreements were concluded during 2006 to address funding deficits. The revised funding plan in the UK schemes includes a combination of higher company and employee contribution rates, reductions in future benefits for employees and one-off cash and asset contributions by the Group. This shared approach has achieved a good outcome for all parties. The Board is in consultation with the trustees of the Group’s pension schemes to consider the implication of the Airbus sale on pension scheme funding.