In its recent trading update, BAE Systems PLC has outlined its operational achievements and financial expectations for 2023, placing particular emphasis on the contribution of submarine programmes to its growth.
The company’s Chief Executive, Charles Woodburn, provided insights into the company’s current performance and future outlook.
BAE Systems has confirmed that its performance aligns with the upgraded forecasts issued at the 2023 half-year mark. A key highlight of this period is the significant order intake, with the company securing around £10 billion in new contracts.
Among the various projects, the SSN-AUKUS submarine programme stands out with a funding of £3.9 billion for its next phase. This long-term commitment, extending into detailed design and procurement through 2028, exemplifies the extended cycle nature of defence contracts and provides a stable foundation for BAE Systems’ future growth.
Woodburn commented on this, noting, “The high order flow reflects continued customer confidence in our ability to deliver important capabilities at a time of heightening geopolitical risk.”
In addition to the submarine programme, BAE Systems is actively engaged in a variety of global defence projects, such as AMPV full-rate production and Bradley fighting vehicle upgrades.
Woodburn highlighted the company’s operational efficiency and disciplined capital allocation, attributing these as key factors behind BAE Systems’ ongoing success. “We are delivering another year of good sales and earnings growth, together with strong cash flow generation,” he stated, emphasising the performance of the company.
Looking ahead, BAE Systems anticipates a 5-7% increase in sales, a 6-8% growth in underlying EBIT, and a 10-12% rise in underlying EPS for 2023. The company also projects its free cash flow to exceed £1.8 billion.