BAE Systems PLC held its Annual General Meeting, where Chair Cressida Hogg and Chief Executive Charles Woodburn commented on the company's performance in 2023. They highlighted strong operational performance, backlog, and program incumbencies, expressing confidence in the long-term value-creating model. The company's trading in the year to date has been in line with expectations, and they are continuing to deliver on mission-critical requirements for customers.
The company's full-year 2024 guidance remains unchanged from the Preliminary Results Announcement, with expectations for sales, underlying EBIT, underlying EPS, 2024 Free Cash Flow, and cumulative FCF for 2024-2026. BAE Systems also provided guidance based on an exchange rate of $1.24:£1 for the year, with sensitivity to EPS for every 5 cent movement.
BAE Systems highlighted its increasing exposure to major defense growth markets, particularly the Australian Government's selection of BAE Systems and ASC Pty Ltd to build Australia's new fleet of nuclear-powered submarines under the AUKUS trilateral security pact. The company received significant order intake to enable the UK program to transition into the detailed design phase and commence procurement of long-lead items and supporting infrastructure.
The company has seen notable awards in defense spending across its sectors and key markets, including contracts for armored vehicles, maintenance services, self-propelled howitzers, amphibious combat vehicles, geospatial-intelligence enterprise modeling services, atmospheric composition instruments, and domestic and export awards.
BAE Systems completed the acquisition of Ball Aerospace and renamed the business Space & Mission Systems. The integration program is underway, and the business has secured key contracts, including successful satellite launches with BAE Systems-built instruments.
In support of its growth outlook, BAE Systems is investing in its people, facilities, and technology. The company aims to hire a record number of new apprentices, graduates, and undergraduates in the UK in 2024. Self-funded R&D is expected to rise, with investments in high technology areas such as electronic warfare, autonomy, laser-directed weapons, counter UAS, synthetic training, electrification applications, and space solutions. Capital expenditure is also expected to rise, with a focus on maritime, munitions, and Swedish combat vehicle production capacity and capabilities.