BAE Systems Expects Strong Growth, Driven by Heightening Geopolitical Risk -- Update
November 13 2023 - 4:19AM
Dow Jones News
By Anthony O. Goriainoff
BAE Systems expects to report another year of robust sales and
earnings growth and strong cashflow generation due to heightened
geopolitical risk, and backed its full-year guidance.
The U.K. defense-and-aerospace group said Monday that order flow
on both new and existing programs remains strong, underpinning
expectations for good top-line growth in the coming years.
BAE said that it has booked more than 30 billion pounds ($36.68
billion) of orders so far this year, including around $800 million
for Bradley fighting vehicles used by the U.S. Army as well as
upgrades. Orders also include around $500 million for Sweden's
Archer artillery system, and $797 million to start full-rate
production of the armored multi-purpose vehicle--which includes
prior funding for early order materials--for the U.S. Army.
"The high order flow reflects continued customer confidence in
our ability to deliver important capabilities at a time of
heightening geopolitical risk," the company said.
In August, the board raised its sales growth guidance to a 5% to
7% range from previous guidance of 3% to 5%. Sales in 2022 came to
GBP23.26 billion. Underlying earnings before interest and taxes are
now seen rising by between 6% and 8%, up from a range of 4% to 6%,
while free cash flow is seen slipping to GBP1.8 billion from
GBP1.95 billion in 2022. BAE reported underlying EBIT of GBP2.48
billion in 2022.
The company said most major defense programs were long term in
the build and support phases, and that as a result of this the
contracts it secures now will be executed over many years, giving
it long-term visibility of its top-line growth.
Shares at 0934 GMT were up 6.50 pence, or 0.6%, at 1,110
pence.
Write to Anthony O. Goriainoff at
anthony.orunagoriainoff@dowjones.com
(END) Dow Jones Newswires
November 13, 2023 05:04 ET (10:04 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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