AUS
NZ
UK
CA
USA
IND
BAE Systems plc (BA) has announced a 13% increase in sales for the first half of 2024, reflecting strong program performance across its portfolio and the acquisition of the Space & Mission Systems (SMS) business in February. This growth underscores the company's effective execution of its strategic initiatives and its expanding presence in key markets.
Improved Earnings and Efficiency
The company's underlying earnings before interest and tax (EBIT) also grew by 13%, benefiting from the increase in sales and strong program execution. BAE Systems continues to enhance operational efficiency through internal initiatives, contributing to this positive financial performance.
Despite a rise in underlying net finance costs, primarily due to the $4.8 billion (£3.8 billion) debt finance raised in March, and an increased tax rate, the company achieved a 7% growth in underlying earnings per share (EPS). This reflects the company's resilience in managing financial pressures while maintaining profitability.
Free Cash Flow and Financial Outlook
BAE Systems reported a free cash flow of £219 million for the first half of 2024, compared to £1,070 million in the same period last year, which had benefited from a high level of customer advances. However, the company has upgraded its in-year free cash flow guidance by £200 million to over £1.5 billion and expects to deliver more than £6.0 billion in free cash flow for the three-year period ending in 2024.
Upgraded 2024 Guidance
BAE Systems has revised its Group guidance for 2024 upwards, reflecting continued strong operational performance across all sectors. Sales guidance has been increased by 200 basis points (bps) to a range of 12% to 14%. Underlying EBIT guidance has been similarly raised by 100 bps to a range of 12% to 14%, aligning with the improved sales profile and operational performance. Additionally, underlying EPS guidance has been increased by 100 bps to a range of 7% to 9%.
The updated guidance incorporates the acquisition of Ball Aerospace and the reduction in BAE Systems' shareholding in Air Astana following its initial public offering, both of which were completed in February 2024.
