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1		-US:BAESF|GB:BA
	1	+US:BAESF|GB:BA|Great Britain

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5	5	= Summary =
6	6
7	7	* BAE Systems is one of the largest global defence companies.
8		-* BAE Systems provides advanced defence technology protects people and national security, and keeps critical information and infrastructure secure.
	8	+* BAE Systems provides advanced defence technology protects people and national security and keeps critical information and infrastructure secure.
9	9	* The company employ a skilled workforce of 89,600 people in more than 40 countries.
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11	11	[[image:BAESF0.png||height="166" width="720"]]
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13	13
14	14	= Company Overview =
15	15
16		-BAE Systems (LSE:BA, OTC:BAESF) provides advanced defence technology protects people and national security, and keeps critical information and infrastructure secure. The company search for new ways to provide its customers with a competitive edge across the air, maritime, land and cyber domains. The company employ a skilled workforce of 89,600 people in more than 40 countries, and work closely with local partners to support economic development by transferring knowledge, skills and technology.{{footnote}}https://www.baesystems.com/en/our-company/about-us{{/footnote}}
	16	+BAE Systems (LSE:BA, OTC:BAESF) provides advanced defence technology protects people and national security and keeps critical information and infrastructure secure. The company provide its customers with a competitive edge across the air, maritime, land and cyber domains. The company employ a skilled workforce of 89,600 people in more than 40 countries, and work closely with local partners to support economic development by transferring knowledge, skills and technology.{{footnote}}https://www.baesystems.com/en/our-company/about-us{{/footnote}}
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19	19	[[image:BAESF1.jpg||alt="BAESF0.png"]]
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103	103	Today, the company operate across the globe, in multiple markets to support its customers - wherever, whenever and whatever their challenges may be. The company support them across the whole life cycle of the air sector - from design, development and production, through to provision of aircraft, training, support and maintenance.
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106		-To achieve this the company collaborate with partners large and small, from within and beyond the defence sector both from the UK and around the globe. The company's international Air sector enables even greater collaboration, as the company work with agility and focus in support of its customers.
	106	+To achieve this the company, collaborate with partners large and small, from within and beyond the defence sector both from the UK and around the globe. The company's international Air sector enables even greater collaboration, as the company work with agility and focus in support of its customers.
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108	108
109	109	== Land ==
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137	137
138	138	= Financial Highlights =
139	139
140		-* Sales increased by £0.8bn to £20.9bn (2019 £20.1bn), a 4% increase on a constant currency basis.
141		-* Underlying EBITA increased to £2,132m (2019 £2,117m), giving a return on sales2 of 10.2% (2019 10.5%). Excluding the impact of exchange translation, the increase was 1%.
142		-* Revenue increased by £1.0bn to £19.3bn (2019 £18.3bn).
143		-* Operating profit increased by £31m to £1,930m (2019 £1,899m).
144		-* Non-recurring items in 2020 reflect a credit of £19m. This comprises a settlement gain on a US pension annuity buy-out of £64m, offset by charges relating to acquisitions and disposals of £38m and a Guaranteed Minimum Pension equalisation charge of £7m. Non-recurring charges in 2019 of £27m comprised a £36m software intangible derecognition charge and a net gain relating to acquisitions and disposals of £9m.
145		-* Amortisation of intangible assets is £137m (2019 £109m), the increase mainly a result of intangible assets arising from the acquisitions.
146		-* Impairment of intangible assets in 2020 is £4m (2019 £6m).
147		-* Net finance costs, including equity accounted investments, were £366m (2019 £296m). The underlying interest charge, excluding pension accounting, and fair value and foreign exchange adjustments on financial instruments and investments was £255m (2019 £257m). Net interest expense on the Group’s pension deficit was £70m (2019 £117m). There was a charge in respect of fair value and foreign exchange adjustments of £41m (2019 £78m credit) on exchange translation of US dollar-denominated bonds.
148		-* Taxation expense, including equity accounted investments, of £273m reflects the Group’s underlying effective tax rate for the year of 17%. The 2019 charge of £147m reflected the Group’s underlying effective tax rate for that year of 19%, less a £161m credit in respect of two items. Following agreements reached in respect of overseas tax matters, a one-off benefit was recognised; and following review of the April 2019 EU Commission decision that concluded that the UK’s Controlled Foreign Company regime partially represented State Aid, a provision was recognised for the estimated exposure.
149		-* Underlying earnings per share for the year increased by 2% to 46.8p (2019 45.8p), excluding the one-off tax benefit).
150		-* Basic earnings per share was 40.7p (2019 46.4p).
151		-* Free cash flow1 was £367m (2019 £850m), which includes the impact of the Group’s £1bn contribution into the UK pension scheme. The remaining inflow reflects the Group’s strong focus on liquidity
	140	+**Half Year 2022 Results**{{footnote}}https://investors.baesystems.com/~/media/Files/B/Bae-Systems-Investor-Relations-V3/PDFs/results-and-reports/results/2022/2022-half-year-results-announcement.pdf{{/footnote}}
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	142	+* Sales increased by 2.8% on a constant currency basis5 to £10.6bn.
	143	+* Underlying EBIT of £1,112m increased by 4.4% on a constant currency basis.
	144	+* Underlying earnings per share increased by 11.9% to 24.5p, excluding the impact in 2021 of the
	145	+* one-off tax benefit. The Group’s underlying effective tax rate for the first half of the year was 19%.
	146	+* Free cash inflow of £123m (2021 £461m inflow, including £250m receipt in respect of the Filton and Broughton site disposals).
	147	+* Net debt (excluding lease liabilities) at £3,135m (£2,160m at 31 December 2021).
	148	+* Order backlog of £52.7bn (£44.0bn at 31 December 2021).
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154		-[[image:BAESF6.png]]
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	151	+**Group Portfolio actions**
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157		-== Half-yearly Results 2021 ==
	153	+* UK Triennial pension review completed.
	154	+* Acquisition of Bohemia Interactive Simulations (BISim) completed in March.
	155	+* Agreement signed in July for the sale of BAE Systems’ financial crime detection business from Cyber & Intelligence, with completion expected in the next few months.
	156	+* Reflecting the changes in operational reporting lines effective from the beginning of the year, the BAE Systems Australia business has moved from being reported in the Air segment to the Maritime segment. Additionally, the Group has established a new Digital Intelligence business, bringing together the non-US digital and data capabilities to further strengthen how the company deliver these services and capabilities to its customers. Digital Intelligence is reported within the Cyber & Intelligence segment.
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159		-* Sales in the first half increased to £10.0bn (2020 £9.9bn), up 6% on a constant currency basis.{{footnote}}https://investors.baesystems.com/~/media/Files/B/Bae-Systems-Investor-Relations-V3/PDFs/results-and-reports/results/2021/2021-half-year-results-announcement.pdf{{/footnote}}
160		-* Underlying EBIT was £1,028m (2020 £849m), up 21% on last year, or 27% on a constant currency basis.
161		-* Revenue increased to £9.3bn (2020 £9.2bn), up 2%
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	159	+**Electronic Systems**
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164		-Operating profit was £1,303m (2020 £808m), up 61% on last year. Non-recurring items in 2021 comprises a gain on the sale of the Filton and Broughton sites (£182m), gains on disposal of Advanced Electronics Company in the Air sector (£131m, of which £63m is attributable to non-controlling interests) and on disposal of a business in its Electronic Systems segment (£26m), and a £7m gain relating to a historical acquisition. The 2020 expense of £21m represented a £14m impairment charge relating to Platform & Services’ legacy Commercial Shipbuilding business which the business exited in 2018, and advisory fees of £7m relating to the Group’s acquisition and disposal activities.
	161	+* Cumulatively, over 1,100 electronic warfare systems have been delivered on the F-35 programme.
	162	+* Deliveries continue of next-generation EW Eagle Passive Active Warning Survivability System to support upgrade of US Air Force F-15 platform and testing on F-15E and F-15EX test aircraft.
	163	+* Awarded $176m (£145m) for Airborne High Frequency Radio Modernization programme.
	164	+* Selected to design, test and supply energy management components for GE Aviation’s megawatt class hybrid electric propulsion system supporting NASA’s Electrified Powertrain Flight Demonstration project.
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167		-Amortisation of programme, customer-related and other intangible assets was £43m (2020 £3m), the increase being driven by amortisation charges in the Electronics Systems businesses acquired during 2020.
	167	+**Platforms & Services**
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	169	+* M109A7 programme is consistently delivering at full rate production levels and received a $299m (£246m) contract.
	170	+* Deliveries of all five variants of Armored Multi-Purpose Vehicles to the US Army continue.
	171	+* Amphibious Combat Vehicle deliveries to US Marine Corps continue, with design and development under way for new mission variants.
	172	+* Bradley vehicle upgrade work continues on contracts for 459 vehicles.
	173	+* BAE Systems Hägglunds is ramping to perform on multiple contracts for CV90 and BvS10.
	174	+* CV90 wins Slovakia’s competitive evaluation for its Infantry Fighting Vehicle programme.
	175	+* US Ship Repair profitability was significantly impacted by the COVID-19 pandemic but continues to recover.
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170		-Net finance costs were £152m (2020 £119m). The underlying interest charge, excluding pension accounting, and fair value and foreign exchange adjustments on financial instruments and investments, was £122m (2020 £127m). There was a charge of £9m (2020 gain of £42m) in respect of rolling hedges on balances with the Group’s subsidiaries and equity accounted investments.
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	178	+**Air**
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173		-Taxation expense, including taxation expense of equity accounted investments, of £62m (2020 £132m) reflects the Group’s underlying effective tax rate for the period of 18% (2020 19%), plus the tax charge on non-recurring items, less a one-off tax benefit of £94m in respect of agreements reached regarding the exposure arising from the April 2019 European Commission decision regarding the UK’s Controlled Foreign Company regime and the impact of the UK tax rate adjustment.
	180	+* Production on F-35 is at full rate levels. 74 rear fuselage assemblies have been completed in the period.
	181	+* The Qatar Typhoon and Hawk programme is progressing well. The first Typhoon deliveries will commence in the second half of 2022.
	182	+* Work continues on the Typhoon programme and the production programme has been extended further following the award in June of 20 further aircraft for Spain.
	183	+* The future electronically scanned European Common Radar Solution continues in line with the Typhoon plan.
	184	+* The sector continues to work closely with industry partners and the UK government to continue to fulfil contractual support arrangements in Saudi Arabia.
	185	+* The Future Combat Air System (FCAS) programme continues as anticipated with the initial Concept & Assessment Phase contract underway across national and international partners.
	186	+* Saudi British Defence Co-operation Programme five-year renewal support funding agreed.
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176		-Basic earnings per share for the period increased by 87% to 31.3p (2020 16.7p). The increase was driven mainly by the higher operating profit and the impact of the one-off tax benefit.
	189	+**Maritime**
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	191	+* £2.5bn of further contract funding awarded as part of Delivery Phase 3 for the Dreadnought programme.
	192	+* New Submarine Build Capability contract maintains BAE Systems' role as the lead for the design and build of nuclear submarines within the UK submarine enterprise.
	193	+* The Submersible Ship Nuclear Replacement (SSNR) programme has moved into its Functional  Design phase.
	194	+* Ongoing support to the Royal Navy’s Portsmouth-based flotilla and the operation of HM Naval Base Portsmouth under the UK Ministry of Defence’s Future Maritime Support Programme, including support to the UK’s two aircraft carriers.
	195	+* The Hunter Class Frigate programme in Australia continues to make strong progress through the prototyping phase.
	196	+* HMAS Toowoomba, the fifth ANZAC Class frigate to move through the ANZAC Mid Life Capability Assurance Programme (AMCAP) was returned to the Australian Navy following successful completion of the dry production phase of AMCAP.
	197	+* Mobilisation of the Challenger 3 and Mechanised Infantry Vehicle contracts secured by the RBSL joint venture is advancing well.
	198	+* Transition to the Next Generation Munitions Supply Solution (NGMS) contract is ongoing.
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179		-**Charles Woodburn, Chief Executive, said**: “Thanks to the outstanding efforts of its employees across the Group, BAE Systems has delivered a strong first half performance which underlines its confidence in the full year guidance for top line growth, margin expansion and three-year cash targets.
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181		-
182		-“BAE Systems is well positioned for sustained growth in the coming years and are ramping up its investments in advanced technologies to deliver capabilities for its customers in the face of an evolving threat environment.
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185		-“Following the decisive action taken to accelerate its UK deficit pension payments in 2020, the committed investment in the business coupled with the good operational performance, BAE Systems is driving enhanced cash generation. This enables it today to announce a 5% increase in the interim dividend as well as initiating a new share buyback programme of up to £500m.”
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188	188	= References =
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