BAE Systems Reports Strong 2024 Results with Record £77.8bn Order Backlog
Why we think this is good
BAE Systems has delivered an impressive set of results for 2024, demonstrating robust growth across key financial metrics. The 14% increase in sales to £28.3bn and underlying EBIT growth of 14% to £3.0bn reflect strong operational performance across all sectors. The record order backlog of £77.8bn provides excellent visibility for future revenue. The successful integration of Ball Aerospace enhances the company's market position and growth potential. While free cash flow slightly decreased and net debt increased due to acquisitions, the overall financial health remains strong, as evidenced by the 10% dividend increase. The positive outlook for 2025 further underscores the company's confidence in its strategic direction and market opportunities.
Key Points
- Sales up 14% to £28,335m
- Underlying EBIT increased 14% to £3,015m
- Underlying EPS grew 10% to 68.5p
- Record order backlog of £77.8bn, up 11%
- Free cash flow of £2,505m
- Final dividend increased by 10% to 33.0p per share
- Successful integration of Ball Aerospace
- Positive guidance for 2025 with expected sales growth of 7-9%
- Net debt increased to £4,945m due to acquisitions
Summary
BAE Systems has delivered strong financial results for 2024, with sales growing 14% to £28.3bn and underlying EBIT increasing 14% to £3.0bn. The company's order backlog reached a record £77.8bn, up 11% from the previous year, providing excellent visibility for future revenue. Underlying EPS grew 10% to 68.5p, and the company generated free cash flow of £2.5bn. The Board has recommended a 10% increase in the dividend to 33.0p per share, reflecting confidence in the company's financial strength and future prospects.
Operationally, BAE Systems made significant progress across all sectors, with notable achievements including the successful integration of Ball Aerospace and progress on major programs such as GCAP and AUKUS. The company's strong performance is underpinned by increased defense spending globally and its strategic positioning in key markets.
Looking ahead to 2025, BAE Systems has provided positive guidance, expecting sales to increase by 7-9% and underlying EBIT to grow by 8-10%. This outlook, combined with the strong order backlog and ongoing strategic initiatives, positions the company well for continued growth and value creation.
While net debt has increased to £4.9bn due to acquisitions, the company's strong cash generation and disciplined capital allocation strategy should support debt reduction over time. Overall, these results demonstrate BAE Systems' robust business model and its ability to capitalize on growing defense market opportunities.