Pre-Annual General Meeting Information • Mar 29, 2018
Pre-Annual General Meeting Information
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This notice advises you that you can read the full BAE Systems Annual Report 2017 and Notice of Annual General Meeting online at: www.baesystems.com/reporting It also provides a brief overview of our performance in 2017. For more information on e-communications, see the back page of this document.
Dear Shareholder
I am writing to advise you that the Company's Annual Report for 2017 has been published together with the Notice of Annual General Meeting. These documents are available to be viewed on the Company's AGM website page that you can access at: www.baesystems.com/reporting
This year's Annual General Meeting is to be held on 10 May 2018 at Hall 5, formerly 'FIVE' (Farnborough International Venue & Events), Farnborough, Hampshire starting at 11.00am. If you are unable to attend the meeting but wish to vote by proxy you can do so via the AGM website page. Simply click on the shareholder voting icon and use the numbers on the enclosed instruction card to access the voting system – even if you will be attending the meeting you can still vote by proxy and, if you wish, change your vote during the meeting.
Opposite you will see the top-level financial figures in respect of the Company's performance in 2017 and, overleaf, an overview of the different businesses within the BAE Systems Group. This is just a brief summary and is not a substitute for the full Annual Report that can be accessed online.
The Board has recommended a final dividend of 13p per share making a total of 21.8p per share for the year, an increase of 2% over 2016. Subject to shareholder approval at the 2018 AGM, the 2017 final dividend will be paid on 1 June 2018 to shareholders registered on 20 April 2018.
Yours sincerely
Sir Roger Carr Chairman 29 March 2018
It is recommended that you read the full Notice of Annual General Meeting before taking a decision on how to vote at the Annual General Meeting. It is also recommended that you read the full BAE Systems Annual Report 2017. This notice does not set out the matters on which shareholders are being asked to vote at the Annual General Meeting and is not a substitute for such documents.
If you have sold or otherwise transferred all your shares in BAE Systems plc, please forward this document at once to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. If you have sold or otherwise transferred only part of your holding of shares, you should retain this document. * To be read in conjunction with the information overleaf.
Sales1
Underlying EBITA2
(2016 £1,905m)
Underlying earnings per share3
43.5p (2016 40.3p)
Operating business cash flow4
Net debt5
Order intake6 £20,257m (2016 £22,443m)
Order backlog7
£41.2bn (2016 £42.0bn)
21.8p (2016 21.3p)
increased by £0.6bn to £19.6bn largely reflecting currency translation.
£2,034m, a 4% increase on a constant
reduced by £790m compared with 31 December 2016.
of £20.3bn.
– Final dividend of 13p per share making a total of 21.8p per share for the year,
Revenue plus the Group's share of revenue of equity
Basic earnings per share excluding amortisation and impairment of intangible assets, non-cash finance movements on pensions and financial derivatives, non-recurring items and, in 2017, a credit in respect of US tax reform enacted in December 2017. 4. Net cash flow from operating activities excluding taxation and including net capital expenditure, financial investment and dividends from equity
Cash and cash equivalents, less loans and overdrafts (including debt-related derivative financial instruments). 6. Funded orders received from customers including the Group's share of order intake of equity
Funded and unfunded unexecuted customer orders including the Group's share of order backlog of equity
Current year compared with prior year translated
Including share of equity accounted investments.
Operating profit excluding amortisation and impairment of intangible assets, finance costs and taxation expense of equity accounted investments
(EBITA), and non-recurring items.
accounted investments.
accounted investments.
accounted investments.
accounted investments.
at current year exchange rates.
was unchanged on a constant
.
an increase of 2% over 2016.
We monitor the underlying financial performance of the Group using alternative performance measures. These measures are not defined in International Financial Reporting Standards (IFRS) and, therefore, are considered to be non-GAAP (Generally Accepted Accounting Principles) measures. The relevant IFRS measures are presented on page 7 of the Annual Report 2017.
of £41.2bn
. – Underlying earnings per share3 increased by 8% to 43.5p. – Operating business cash flow4 increased by £748m to £1,752m.
increased to
– Sales1
– Underlying EBITA2
currency basis8
– Net debt5
– Order intake6
– Order backlog7
currency basis8
Electronic Systems, with 14,400 employees9 , comprises the US and UK‑based electronics activities, including electronic warfare systems, electro-optical sensors, military and commercial digital engine and flight controls, precision guidance and seeker solutions, next-generation military communications systems and data links, persistent surveillance capabilities, and hybrid electric drive systems.
Orders worth over \$450m (£333m) received for F-35 Lightning II hardware production and support
Invested more than \$100m (£74m) in our 'Ramp to Rate' initiative to prepare the business for future Electronic Warfare growth
Received a \$311m (£230m) contract to provide the Digital Electronic Warfare System (DEWS) to support the sale of new aircraft to an international customer
Growing demand for APKWS™ laser-guided rockets, with awards totalling approximately \$300m (£222m) during the year
LiteHUD® Head-Up Display selected by critical launch customers, with first flights in 2017
The FADEC Alliance joint venture transitioned to Full-Rate Production of the full authority digital engine control for the LEAP commercial aircraft engine
Major milestone achieved with the delivery of our 8,000th hybrid-electric system
Cyber & Intelligence, with 10,900 employees9 , comprises the US‑based Intelligence & Security business and UK‑headquartered Applied Intelligence business, and covers the Group's cyber security, secure government, and commercial and financial security activities.
Six task orders secured valued at more than \$180m (£133m) for Full-Motion Video Intelligence, Surveillance and Reconnaissance analysis support
Won a position on a US Department of Treasury programme to support the Office of Terrorism and Financial Intelligence, with a maximum lifecycle value of \$135m (£100m)
Awarded three US Navy contracts with an estimated lifecycle value of approximately \$180m (£133m) to provide engineering and integration support for critical mission systems
Selected by the US Navy to pursue orders to provide equipment and support services for Space and Naval Warfare Systems Center Atlantic
Contracts won with UK government and commercial customers for secure IT transformation and cyber defence
Restructuring activities under way, including headcount and facility reductions and a move to a revised operating model, effective 1 January 2018, to drive profitable growth
Sales1
£1,820m
Platforms & Services (US), with 11,400 employees9 , has operations in the US, UK and Sweden. It manufactures combat vehicles, weapons and munitions, and delivers services and sustainment activities, including ship repair and the management of government-owned munitions facilities.
Vehicle deliveries nearing completion under the engineering and manufacturing development phase of the Armored Multi-Purpose Vehicle programme
Awarded a \$414m (£306m) contract for the third and final option for Low-Rate Initial Production under the Paladin Integrated Management programme
Completed deliveries of the 16 Amphibious Combat Vehicle prototypes to the US Marine Corps
First two M777 lightweight howitzers shipped to India for testing under the \$542m (£401m) contract awarded in January 2017
\$140m (£104m) contract awarded for the modernisation of USS Tortuga
Construction of the final commercial ship is nearing completion and the ship is expected to be delivered in the first half of 2018
FNSS received a €155m (£138m) contract to provide 27 amphibious assault vehicles to the Turkish Ministry of National Defence
Sales1
£2,928m
Platforms & Services (UK), with 30,100 employees9 , comprises the Group's UK‑based air, maritime, land and shared services activities.
Contract valued at approximately £5bn signed in December to supply 24 Typhoon aircraft and support to Qatar, subject to financing conditions and receipt by the Group of first payment
First eight Typhoon and all eight Hawk aircraft for Oman delivered to the Sultanate of Oman
Signed the full £3.7bn production contract for the initial batch of three Type 26 frigates
Received the full £1.4bn contract for the sixth Astute Class submarine from the Royal Navy in March, and the fourth Astute boat, Audacious, was launched in April
Rationalisation activities announced, including potential headcount reductions in the Military Air & Information and Maritime Services businesses
Platforms & Services (International), with 13,800 employees9 , comprises the Group's businesses in Saudi Arabia, Australia and Oman, together with its 37.5% interest in the pan‑European MBDA joint venture.
Final four of 72 Typhoon aircraft delivered to Saudi Arabia on the Salam Typhoon programme
The Typhoon support contracts are operating well and a contract for support to additional flying hours was agreed in April
Contracts agreed to provide ongoing support services to the Royal Saudi Air Force and Royal Saudi Naval Forces for a further five years
The first major units of the second batch of Hawk aircraft delivered on schedule to Saudi Arabia allowing final assembly to commence
Assigned the role of F-35 Regional Warehouse provider for the Asia-Pacific region
Selected as the preferred tenderer for the Jindalee Operational Radar Network upgrade programme
MBDA signed a contract in December to supply Brimstone and Meteor missiles to Qatar, subject to financing conditions and receipt of first payment
MBDA contracts for naval fleet air defence and coastal defence in Qatar became effective in July
Sales1
Sales1
£4,138m
At BAE Systems, our advanced defence technology protects people and national security, and keeps critical information and infrastructure secure.
We search for new ways to provide our customers with a competitive edge across the air, maritime, land and cyber domains. We employ a skilled workforce of 83,200 people1 in over 40 countries, and work closely with local partners to support economic development by transferring knowledge, skills and technology.
| Financial year end | 31 December |
|---|---|
| Annual General Meeting | 10 May 2018 |
| 2017 final ordinary dividend payable | 1 June 2018 |
| 2018 half-yearly results announcement | 1 August 2018 |
| 2018 interim ordinary dividend payable | 30 November 2018 |
| 2018 full-year results: – preliminary announcement – Annual Report |
February 2019 March 2019 |
| 2018 final ordinary dividend payable | June 2019 |
All statements other than statements of historical fact included in this document, including, without limitation, those regarding the financial condition, results, operations and businesses of BAE Systems and its strategy, plans and objectives and the markets and economies in which it operates, are forward-looking statements. Such forward-looking statements, which reflect management's assumptions made on the basis of information available to it at this time, involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of BAE Systems or the markets and economies in which BAE Systems operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. BAE Systems plc and its directors accept no liability to third parties in respect of this report save as would arise under English law.
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BAE Systems plc 6 Carlton Gardens London SW1Y 5AD United Kingdom
www.baesystems.com
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© BAE Systems plc 2018. All rights reserved
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