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Highlights
- Sales & Profit Growth: Sales grew 14%, driven by strong programme performance and the Ball Aerospace acquisition.
- Order Backlog Hits £77.8bn: A 11% increase includes £3.0bn from Space & Mission Systems (SMS).
- Capital Returns to Shareholders: £1.49bn returned via dividends and share buybacks, with a 10% dividend increase.
BAE Systems plc (LSE:BA) has reported robust financial performance for 2024, with 14% growth in sales and underlying EBIT, reflecting strong programme execution and the impact of mergers and acquisitions (M&A), including the £4.4bn acquisition of Ball Aerospace (now Space & Mission Systems – SMS).
Financial Performance
BAE Systems recorded a 14% rise in revenue, driven by strong execution across its portfolio. The company’s underlying EPS increased by 10%, reflecting EBIT growth, though partially offset by higher financing costs due to $4.8bn (£3.8bn) of debt raised for the Ball Aerospace acquisition.
Operating profit increased by 4%, with additional costs from intangible asset amortisation related to the SMS acquisition. Basic EPS grew by 6%, also factoring in increased finance and amortisation costs.
Free cash flow stood at £2.5bn, benefiting from high customer advances and strong operational cash generation, though partially offset by higher capital expenditure and financing costs.
Record Order Backlog & Strategic Growth
BAE’s order backlog surged to a record £77.8bn, a 11% increase year-over-year, which includes £3.0bn from SMS. The company's continued focus on strengthening its portfolio and adapting to global security challenges has contributed to this growth.
Key portfolio developments in 2024 included:
- Successful integration of SMS, with core systems and processes now transitioned.
- Reducing its stake in Air Astana from 49% to 17%, generating £166m in cash proceeds and £75m in profit on disposal following the airline’s IPO.
- Strengthening drone and counter-drone capabilities through multiple smaller UK acquisitions.
Capital Deployment & Shareholder Returns
BAE increased its total dividend by 10% to 33.0p per share, with a final 20.6p dividend scheduled for June 2, 2025, subject to shareholder approval.
The company also repurchased 43 million shares for £555m as part of its share buyback programme, bringing total shareholder returns (including dividends) to £1.49bn in 2024.
2025 Outlook
For 2025, BAE Systems remains well-positioned for continued growth, with a strong order backlog, ongoing defence programme execution, and the integration of its SMS acquisition. The company continues to invest in emerging defence technologies to maintain its global leadership.
