Sales increased by 10% to a record £30.7 billion, with growth across all sectors and organic growth of 9%. Underlying EBIT rose by 12%, with return on sales increasing from 10.6% to 10.8%, while underlying earnings per share also grew by 12%.
Free cash flow reached £2,158 million, with significant customer advances received late in the year. Capital expenditure remained close to record levels at around £1bn and research and development spending increased.
The order backlog grew by £5.8 billion to a record £83.6 billion, with order intake of £36.8 billion across all sectors. The company said this reflects the continued relevance of its geographic footprint and multi-domain capabilities.
Under IFRS measures, revenue growth of 8% reflected strong operational sales performance but excluded the impact of equity accounted investments. Operating profit increased by 9%, as growth in underlying EBIT was partly offset by amortisation costs linked to prior year acquisitions, including Ball Aerospace, while basic earnings per share rose by 6%.
During the year, the UK Government announced an agreement with Türkiye to acquire 20 Typhoon aircraft with an associated weapons package. The deal is anticipated to be worth £4.6bn to BAE Systems and is expected to sustain Typhoon production and around 20,000 UK jobs.
The company also delivered the final two Typhoon aircraft to Qatar, completing a fleet of 24 for the Qatari Emiri Air Force. In addition, it launched Edgewing, a joint venture with industry partners in Italy and Japan under the Global Combat Air Programme, to lead design and development of a next-generation combat aircraft.
Norway selected the Type 26 frigate for its future warship procurement programme under a £10bn Government-to-Government agreement. BAE Systems described the deal as paving the way for the UK’s largest ever warship export agreement by value.
The company supported preparations for the Royal Navy’s Carrier Strike Group 2025 and saw the Royal Navy select its all-electric Malloy T-150 uncrewed air systems to transport supplies between ships during deployment to the Indo-Pacific. In the United States, it secured a $1.2 billion (£0.9 billion) contract to provide the US Space Force with space-based missile tracking capabilities, acting as prime contractor for a satellite constellation.
Its Armored Multi-Purpose Vehicle programme marked its 500th delivery and continues under full-rate production towards the US Army’s plan to field nearly 3,000 vehicles. Further milestones included the unveiling of the first CV9030 MkIV infantry fighting vehicle for the Czech Republic and the presentation of the first three BvS10 vehicles to Sweden, Germany and the UK.
Her Royal Highness The Princess of Wales officially named HMS Glasgow, the first of eight Type 26 frigates being built for the Royal Navy. Final outfitting continues on HMS Glasgow and HMS Cardiff at Scotstoun, while HMS Belfast, HMS Birmingham and HMS Sheffield are progressing at Govan.
The keel of HMS Dreadnought, the first of four Dreadnought Class submarines, was laid at Barrow-in-Furness. The company also opened the Janet Harvey Hall at Govan and the Applied Shipbuilding Academy in Glasgow, alongside new facilities in Sheffield, Jacksonville, Florida and continued investment in Louisville, Kentucky.
Across its key markets, BAE Systems recruited more than 2,500 early careers employees during the year. It now has a record 6,800 apprentices, graduates and undergraduates in training across its UK businesses.
Source: BAE Systems.
