Investor Day - Strategic Plan Builderstrategicplantool.com/BAE-Systems-2011.pdf · DoD proposed...
Transcript of Investor Day - Strategic Plan Builderstrategicplantool.com/BAE-Systems-2011.pdf · DoD proposed...
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Investor Day17th May 2011
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Cautionary statement:
All statements other than statements of historical fact included in this document, including, without limitation, those regarding the financial condition, results, operations and businesses of BAE Systems and its strategy, plans and objectives and the markets and economies in which it operates, are forward-looking statements. Such forward-looking statements which reflect management’s assumptions made on the basis of information available to it at this time, involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of BAE Systems or the markets and economies in which BAE Systems operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this document shall be regarded as a profit forecast.
Investor Day 2011
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No planned practice alarms
If there is a fire, alarm sounds with announcement to evacuate
All automatic Fire Door Shutters will be activated separating the building to prevent fire from spreading and sprinklers will activate
Do not use lifts
Please leave from the front of the hotel and turn left towards the courtyard
Investor Day 2011
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14:00 Ian King - Introduction14.10 Linda Hudson - US Market Environment
Services14:30 Larry Prior - Services15:00 John Gannon - US security
Electronics15:15 Tom Arseneault - Electronics15:35 Q&A15:45 Break
Platforms16:00 Bob Murphy - Land and Armaments16:30 Nigel Whitehead - Programmes & Support17:00 Q&A17:10 Break
International17:30 Guy Griffiths - International home markets18:00 Ian King - Close and Q&A
18:15 Drinks18:45 Dinner
Agenda
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Company performing well
Conservative planning assumptions
Aggressive cost reduction
Platforms sustained
Focus on Services and growth fast lanes
Defence Services
Cyber & Intelligence
Electronics
Exports
Strategy supports growth outlook
Group sales by activity*
48% Services
Platforms
DefenceServices
ElectronicSystems
Cyber andIntelligence
Introduction
* As at 31.12.2010
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Linda HudsonBAE Systems Inc. Strategy
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BAE Systems, Inc. Senior Leadership Team
Michelle LambertonVP
Internal Audit
Executive Committee
Linda HudsonPresident & CEO BAE Systems, Inc.
Curt GraySVP Human Resources & Administration
Bob FitchSVPGovernment Relations
D. Michael BennettSVP
Information Management
Doug BelairSVP
Strategy & Planning
Brad JacobsSVP
Finance
Larry PriorExecutive Vice
PresidentService Sectors
John GannonPresident Intelligence & Security
Dave HerrPresident
Support Solutions
Bob MurphyExecutive Vice
PresidentProduct Sectors
Ian GrahamSVP & General
Counsel
John SuttleSVP Communications
Tom ArseneaultPresidentElectronic Solutions
Dan GobelPresident
Platform Solutions
Frank Pope President
Land & Armaments
Office of the President & CEO
Gene RenuartSenior Military Advisor
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Coming off a strong 2010
Financial performance
Aligned organization to markets
Significant cost reductions
Performing in the challenging environment of 2011
Managed through budget uncertainties and continuing resolution
Continuing to reduce costs
Program performance and customer satisfaction is strong
Already closed on two acquisitions
On track to deliver our commitments
Strategy in place to return to growth and improve profitability in a challenging market
BAE Systems Inc
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2010 Sales = $17.6B
BAE Systems Inc
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DoD proposed FY12 base budget is essentially flat
Expecting pressures and further erosion
Affordability becomes primary acquisition objective
Transition from Gates to Panetta
OCO for Iraq and Afghanistan declines - world remains dangerous
Targeted services, intelligence and security markets will grow
Platforms remaining in service longer
Commercial aviation is recovering
International demand for US products continues
Industry focusing on affordability and diversification
US Business Environment
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Reduce costs to improve competitive positions and profitability
Deliver superior performance to protect franchise positions
Drive organic growth in market fast-lanes
Acquire to strengthen positions and address adjacent markets
Divest non-core assets
Focus initiatives to attract and retain the best talent
BAE Systems Inc Strategy
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The SSA is our license to trade in the US
BAE Systems Inc. is a U.S. Company
SSA is binding agreement - BAE Systems plc, BAE Systems, Inc., and the DoD
Mitigates concerns associated with Foreign Ownership, Control and influence
Negotiated and overseen by Defense Security Service (DSS)
Covers BAE Systems, Inc. and its owned and/or managed businesses
Control of BAE Systems, Inc. is limited to US citizens with DoD-issued security clearances
Compliance and governance vested in the Inc. Board of Directors
Doing Business in the US - Special Security Arrangement (SSA)
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Linda Hudson
President and CEOBAE Systems, Inc.
Ian Graham
Senior Vice PresidentGeneral Counsel
SecretaryBAE Systems, Inc.
Bob Fitch
Senior Vice PresidentGovernment Relations
BAE Systems, Inc.
Ian King
Chief Executive OfficerBAE Systems plc
Peter Lynas
Group Finance DirectorBAE Systems plc
BAE Systems Inc. Board
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Continue aggressive cost reduction initiatives
Reposition land and armaments to support future customer demand
Drive organic growth in fast-lanes
Grow military and commercial electronics
Grow support and services
Grow intelligence and security
Grow exports
Continue to strengthen positions through acquisitions
Attract and retain the best talent
Return to growth and improve profitability in a challenging market
BAE Systems Inc. way forward
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14:00 Ian King - Introduction14.10 Linda Hudson - US Market Environment
Services14:30 Larry Prior - Services15:00 John Gannon - US security
Electronics15:15 Tom Arseneault - Electronics15:35 Q&A15:45 Break
Platforms16:00 Bob Murphy - Land and Armaments16:30 Nigel Whitehead - Programmes and Support17:00 Q&A17:10 Break
International17:30 Guy Griffiths - International home markets18:00 Ian King - Close and Q&A
18:15 Drinks18:45 Dinner
Investor Day 2011
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Larry PriorServices
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Rising Demand for Services
Increased operational tempo
Fewer new starts
Platforms in service longer
Increased requirement to maintain and modernize equipment
ISR: “Intelligence and information are the fire and maneuver of the 21st
century”
Opportunities for Growth in:
Defense and Technical Services
Cyber and Intelligence
BAE Systems is well positioned for growth in Services
The Strategic Environment
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BAE Systems is committed to growing the services business
Services are at the Centre of the Group’s Strategy
Our mission is to deliver sustainable growth in shareholder value through our commitment to Total Performance
Integrated Business Plans
Our vision is to be the premier global defence and security company
- Operate and grow in the defence and security markets in the segments of Services, Electronic Systems and Platforms
- Grow in existing and develop new home markets
- Grow our export business
Develop new home markets and grow our export business
Invest and grow in Electronic Systems
Invest and grow in Services including Readiness & Sustainment, Cyber and Intelligence
Implement rationalisation and efficiency programmes
Sustain our Platform positions
Implement the home market strategy to grow our business
Our Strategy
Our values are - Trusted, Innovative and Bold
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Services represent 48% of BAE Systems sales today
The group has invested in services to drive growth
BAE Systems Services Business
Defense Services
Platforms & Products
Electronic Systems
Cyber & Intelligence
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Well positioned in Non-Nuclear Ship Repair, Modernization, Conversion and Overhaul
Defense Services: Strengths Today
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FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
CRUISERS
DESTROYERS
Each Modernization Availability ~ $40M Extend to cover all DDGs
Maintaining and modernizing the fleet ensures sustainable growth
AEGIS Modernization: Opportunities tomorrow
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Strengths Today
The largest ever military procurement contracts
30 year production program, 3000 aircraft
BAE Systems produces vital portions of the aircraft and electronic warfare capabilities
Opportunities Tomorrow
Vital role in developing the F-35 Global Sustainment
50+ years of services
F-35 is a platform for sustainable growth
F-35 Lightning II
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Strengths Today
BAE Systems Hawk Training Aircraft - over 900 aircraft; 18 Countries; over 2.5 million flying hours
F-35 lead-in trainer for the U.S. Navy, UK Royal Air Force and the Royal Australian Air Force
Opportunities Tomorrow
T-X Advanced Jet Trainer Family of Systems
Program anticipated to be 350-500 aircraft, including ground based training system, spares and support
Services for the air training domain is a material opportunity for the Group
US Air Force Advanced Pilot Training Family of Systems (T-X)
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Strengths Today
Lean Manufacture and Support Services for Military Aircraft around the world
Opportunities Tomorrow
Logistics, Maintenance, and Supply Chain Management to support US Navy Training Aircraft in the USA
T-34, T-44 & T-6UK Harrier Line Pre 2002 - Before UK Harrier Pulse Line - After Lean
Leveraging global capability across the group to win in the US
US Navy Training Aircraft Services and Support Bid
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Land: US Army Radford Army Ammunition Plant
Munitions services are an emerging growth opportunity for the Group
Strengths Today
• Royal Ordnance heritage
• Commitment to UK munitions business and capital investment
• Holston Army Ammunition Plant- “State of the Art” production
• Long term franchise position
Opportunities Tomorrow
• Operate Radford Army Ammunition Plant (RFAAP)
• The only active full-spectrum US Military propellant manufacturing center
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Significant emerging opportunities to support C4ISR Mission Networks
Strengths Today
Extensive experience in radar design, range and launch operations
Support of US space launches at both Cape Canaveral and Vandenberg AFB at an affordable cost
Opportunities Tomorrow
Provide operation and maintenance (O&M) and sustainment services to US Air Force Launch Test Ranges
Launch and Test Range
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Full Life-Cycle
Facility management / training services
Maintenance / modification / modernization
Operational & fleet availability
Legacy platforms, current production, future systems
Cross-Domain
Maritime
Air
Land
C4ISTAR
BAE Systems maintains a competitive advantage
Defense and Technical Services: Well positioned for Growth
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USA: Intelligence & Security Based out of Washington and focus on servicing
customers in the intelligence and security
community
Employees: 7,200
UK: DeticaLeading provider of security to the intelligence and
security services
Employees: 1, 300
BAE Systems AustraliaThe business provides integrated solutions for the
Defence Force and security customers
Employees: 55
BAE Systems maintains a ~$2.5B Cyber & Intelligence business
Ireland: NorkomLeading provider of counter‐fraud software to the
international banking community
Employees: 350
Denmark: ETIA leading intercept and monitoring company with
positions in Europe, Middle East and Asia
Employees: 260
Global Cyber and Intelligence Business
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BAE Systems is positioned at the heart of the secure government market
The US/UK special relationship remains core
“Five Eyes” advantage
Federal – Civil
Government
Federal – Civil
Government CommercialCommercialGov Gov GovGov
Secure government arena is setting the agenda for the wider federal /civil government markets
Extends to critical infrastructure
Government will increase security requirements for industry - to include the defense industrial base, ISPs and others
Requirements extend to banks and other mainstream industries
Dua
l‐use Techn
olog
ies an
d Inform
ation Sharing
Dua
l‐use Techn
olog
ies an
d Inform
ation Sharing
BAE Systems is well positioned
Prod
ucts
Services
Prod
ucts
Services
Global Cyber and Intelligence Business Model
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New customers and new markets differentiates the Group’s service offerings
TREIDAN™
Growing Global Product Portfolio
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Leveraging credentials in government to serve critical national infrastructure and financial services clients
GovernmentGovernmentSecure GovernmentSecure Government TelecomsTelecoms Financial ServicesFinancial Services
Expanding Array of Customers
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Growth in the global commercial security market is set to outpace growth in government expenditure
Driven by a threat that increasingly targets commercial interests
The commercial market opportunity is a growth priority for the Group
There is a requirement for best-of-breed capability, services by a trusted supplier
BAE Systems is leveraging its expertise from secure government to help address emerging requirements
Timing and execution are key
Organised crime
Border security
National security
Counter- terrorism
Cyber security
Traditional defence
Critical National
Infrastructure
The Commercial Market Opportunity is Significant
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Norkom builds on BAE Systems existing product portfolio to reach new customers in new geographies - focusing on financial services
Enterprise Case Management
Link & Mass Compromise Analysis
Anomaly Detection
Fuzzy Matching
Technical tools
Product Capability Portfolio of 120 major
global banking
customers
Positions in more
than 100 countries,
including the
emerging markets of
Asia Pacific and the
Middle East
More than 200
leading research and
developers
Analytics platform to
cross‐sell services and
products
Software suite covers:
anti‐money
laundering; sanctions
filtering; watch list
management; card
fraud; cheque fraud;
identity fraud and
internal fraud
Products operate
independently or as
part of an integrated
suite
Partnering and
distribution strategies
give access to already
existing global
networks
Norkom and Detica NetReveal®
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BAE Systems is positioning to grow
Substantial, resilient and growing
Driven by an evolving threat
Increasing political awareness and demand for security
Market is still being shaped
BAE Systems will help make the market and set requirements
Secure government, federal – civil government, commercial
A Growing Global Market for Cyber & Intelligence
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John GannonIntelligence & Security Sector - Investing in growth and competitiveness
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~7,200 EMPLOYEES~1220 CURRENT ORFORMER MILITARY
EXCEEDING MARKET GROWTH THROUGH ALIGNMENT OF:MARKET-DRIVEN STRATEGYCUSTOMER-DRIVEN ORGANIC GROWTHINTERNAL INVESTMENTM&A
PROVIDE TOP QUALITY, CUSTOMER- TAILORED INTELLIGENCE & SECURITY
SERVICES TO U.S. GOVERNMENT AGENCIES ANYWHERE IN THE WORLD
GLOBAL PRESENCEHEADQUARTERS: ARLINGTON, VA
CALIFORNIA COLORADO MARYLAND NEW HAMPSHIRE NEW YORKWASHINGTON D.C
INDIA GERMANY JAPAN MIDDLE EAST SOUTH ASIA SOUTH KOREA
UNITED KINGDOM
Intelligence & Security Sector Investing in growth and competitiveness
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CybersecurityCybersecurity
Advanced intrusion management
Cross domain solutions
Cyber analysis
Real-time network forensics
Integration and solution development
Knowledge & Data Management
Knowledge & Data Management
IT infrastructure services
Mission application development
Cross-domain data sharing
Information portals
Data discovery tools
Fraud detection
Analytics Targeting & Support to Operations
Analytics Targeting & Support to Operations
All-source analysis
Motion imagery
Counter- surveillance
Analytic Training
Watchlisting
Infrastructure vulnerability assessments
Geospatial & ISRGeospatial & ISR
Image Exploitation Products
Full motion video
Photogrammetry, cartography and remote sensing
Geospatial products and tools
Imagery storage, ingest, discovery, and dissemination
Intelligence & Security Sector Core capabilities
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Tighter market, but…
With areas of growth Geospatial / full motion video Advanced analytic training Multi-INT fusion Cybersecurity
Sharpen focus on execution Increase efficiencies & competitive advantage Build capabilities through innovation Increase customer intimacy Align strategy, organization and investment
Stiffer Competition, but we…
Intelligence & Security Sector Market environment
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Target markets of higher growth potential
Emerging needs from new threats
Open source analysis
Full motion video & multi-INT fusion
Predictive analytics
Next Generation Desktop/analyst tools
Grow into new and adjacent customers in the
intelligence community and DOD services
Intelligence & Security Sector Strategy for growth
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Intelligence & Security Sector Focus areas for investment
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Invest in the business
Focus on organic growth
Build the top line, while guarding the bottom line
Invest in human capital - leadership/skills
Strategically align organization and leaders for new
markets
Increase investment in the front end of the business
Intelligence & Security Sector Focus areas for investment
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Invest in new strategic capabilities
Global Analysis Tradecraft Advancement Center
(GTAC)
Training our analysts with real-world material -
Yemen
Activity-based intelligence management & exploitation
Linking patterns of behavior and search for
anomalies - Bin Laden
Leading Edge NOSC Environment (LENE)
Demonstrating superiority through performance -
Monitoring BAE Systems networks
Intelligence & Security Sector Focus areas for investment
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Pursue acquisitions in:
Cybersecurity
Identity management
Knowledge management
Intelligence & Security Sector Focus areas for investment
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An ISS engineer in Reston, VA received praise for his participation in a demo video briefing to the Director of the National Geospatial-Intelligence Agency (NGA) and the Vice Chairman of the Joint Chiefs of Staff. The director said the video represented her vision for how NGA will revolutionize the user experience.
A SpecTal/McClendon employee recently completed a briefing of her engineering research project to the U.S. Senate. The classified effort was the only NGA R&D project selected for the Intelligence Community Tech Days presentation. Among those that she briefed were the Director of National Intelligence and the Director of the National Geospatial-Intelligence Agency, as well as Senators, Congressmen and their staffers.
A lead intelligence analyst on DIA's Afghanistan-Pakistan Task Force, published a document for the Secretary of Defense and senior executives in the White House. Several key policymakers expressed their gratitude for her work and are using it as a reference.
One of our FMV analysts contributed to their program’s overview briefing for the new administration’s VIPs, including: the Vice President of the United States, who complimented the program, and the Director of the Central Intelligence Agency, who visited our FMV analysts’ workspace to receive the program briefing. Three different customer leads expressed the same sentiment, stating that they could not have achieved their mission without the BAE Systems team.
Two of the nation’s largest actuary organizations have praised the call center work we do to support the Pension Benefit Guaranty Corporation (PBGC), a government agency that services and protects private sector pensions. The organizations wrote: “Customer service is a key component of the ease of compliance with any regulatory regime, and our members consistently report that excellent customer service is received when calls are placed to the PBGC.”
One of our employees received a letter of thanks from Gen. David Petraeus, Commander, International Security Assistance Force/United States Forces - Afghanistan, who said our employee while deployed to (ISAF) Kabul, Afghanistan, “established himself as the subject matter expert on Afghan governance through his leadership, commitment and meticulous attention to details.” He went on to say “His briefings were precise and informative, and they helped to keep the entire ISAF leadership informed of key political developments, thus providing a common operating picture for all.”
Intelligence & Security Sector The customer is key…
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Tom ArseneaultElectronics - Investing in technology and growth
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Tactical Communications
CommercialAvionics
Soldier & Vehicle
Intelligence, Surveillance & Reconnaissance
Electronic Warfare
Technology Management &Deep Mission
Understanding
DefenseAvionics
Power Management & Energy4% revenue$0.6B market
11% revenue$6B market
12% revenue$6B market
18% revenue$7B market
31% revenue$5.7B market
8% revenue$12B market
16% revenue$6.1B market
Electronics Markets
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12,500$4.6B
23
EmployeesRevenueSites
Electronics Market Footprint
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Exploiting areas of continuing high demand in defense
Pursuing large opportunities in core segments
Investing in the technology to takeaway market share
Balancing portfolio with commercial avionics and power management
Leveraging strengths internationally
How we will grow
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Exploiting areas of Continuing High Demand in defense
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Persistent SurveillancePersistent Surveillance
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Communications Electronic AttackCommunications Electronic Attack
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Reduced Size IFF TransponderReduced Size IFF Transponder
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Reduced Size IFF TransponderReduced Size IFF Transponder
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Small Adaptable Link 16Small Adaptable Link 16
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APKWSAPKWS
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Pursuing large opportunities in core segments
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Next Gen JammerNext Gen Jammer
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Common Infrared CountermeasureCommon Infrared Countermeasure
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Investing in technology to takeaway market share
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MicroIR products: Firefighting
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MicroIR products: ThermographyThermography
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MicroIR products: Thermal Weapon Sights
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MicroIR products: Remote Weapon Sights
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Fairchild Imaging AcquisitionFairchild Imaging Acquisition
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Fairchild Imaging AcquisitionFairchild Imaging Acquisition
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Balancing portfolio with Commercial Avionics and Power Management
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Commercial AvionicsCommercial Avionics
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HybriDrive: Bus
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HybriDriveHybriDrive: Long haul: Long haul
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Leveraging strengths internationally
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Digital Electronic Warfare SystemDigital Electronic Warfare System
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Innovative technology management, coupled with deep mission understanding, provides focus for investments resulting in responsive product offerings.
We will grow by:
Exploiting areas of continuing high demand in defense
Pursuing large opportunities in core segments
Investing in technology to takeaway market share
Balancing portfolio with Commercial Avionics and Power Management
Leveraging strengths internationally
Summary
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Q&A
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14:00 Ian King - Introduction14.10 Linda Hudson - US Market Environment
Services14:30 Larry Prior - Services15:00 John Gannon - US security
Electronics15:15 Tom Arseneault - Electronics15:35 Q&A15:45 Break
Platforms16:00 Bob Murphy - Land and Armaments16:30 Nigel Whitehead - Programmes and Support 17:00 Q&A17:10 Break
International17:30 Guy Griffiths - International home markets18:00 Ian King - Close and Q&A
18:15 Drinks18:45 Dinner
Agenda
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Bob MurphyLand and Armaments
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Playing Through The Current Cycle…
75
$B % ROS
2
4
8
10
12
6
Portfolio well positioned for next cycle
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Restructuring the Business…
Improved Competitive Position
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Vehicle Portfolio Positioned for Future Growth
Portfolio positioned to address future key customer priorities
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Business Drivers Through 2015
• Bradley Transition from Reman to OEM• KSA Opportunity
• GCV or Further Bradley Evolution
• CV-90 Export• Canada/Norway
• AMPV
• Continued Growth in Platform Service & Support
Combat Vehicle Mix Reflects Withdrawal fromIraq & Afghanistan
GCV and CV-90…the catalyst for future growth
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Business Drivers Through 2015
• Transition From MRAP and FMTV in 2011
• JLTV Opportunity• On 2 of 3 TD Teams
• MEC-V Opportunity• Strong Smart V Product Offering
TWV Portfolio shifts from Medium to Light
JLTV & MEC-V represent the U.S. Army’s Future TWV Emphasis
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JLTV
CV-90
Canada & Norway
Bradley Fighting Vehicle
Kingdom Of Saudi Arabia
Ground Combat Vehicle
Army’s #1 Priority
Strong Competitive Position
New Combat Vehicle OEM Growth Drivers
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BRADLEYArmored Multi-Purpose Vehicle (AMPV)
PIM
Army’s 3rd Ground PriorityFunded, Supported and Moving Forward
AMPV has Broad Support to Replace M-113 Fleet
Future Upgrades ContinueEmphasized by Sec GatesStrongly Supported by the Army
Upgrading Legacy Combat Vehicle Platforms
We have a Resilient Portfolio of Capabilities
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MEC-VJLTV
Competition OngoingWe are on 2 of 3 TD Teams
Army’s 2nd Ground Priority Competitive Executable Solution
Invested to position for future LTWV Programs
Leveraging Global TWV Capability
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Naval Amphibious Vehicle
Requirements TBD
Marine Personnel Carrier
A Clear PriorityCompetitive Solution
AAV Upgrade
Influencing Requirements Now
EFVCANCELLED
New Opportunities in Amphibious Vehicles
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M-777 Howitzer
India Worldwide Malaysia, Middle-East
Joint Venture with FNSSInternational TWV
Growing Our Export Market
Broad set of Capabilities to Generate Global Growth
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Restructured the Business…Enhanced Competitive Position
Combat Vehicle Portfolio Positioned for Growth
Aggressively Pursuing New TWV Programs
Platform Services & Support Continues to Grow
Positioned to Grow Export Markets
Delivering Double Digit ROS%
Positioning for the Next Growth Cycle
Future Growth Underpinned by a Flexible Resilient Portfolio of Capabilities Aligned with Future Customer Requirements
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Nigel WhiteheadProgrammes and Support
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UK Market & Programmes
• Number 1 supplier to UK MOD
BAE Systems is the No.1 supplier to the UK Ministry of Defence
38,400 employees in the UK
Well established in air, maritime and land platforms and services
Strong export sales record
£883 million spend on R&D in the UK**
Largest manufacturing-based employer in the UK, employing over 18,000 engineers**
* As at 31.12.2010. Source: BAE Systems plc Annual Report and Accounts** Oxford Economics, 2009
PROGRAMMES & SUPPORT
Strong Order Book
World-class Products & Services
Export Potential
Platforms
Readiness &Sustainment
ElectronicSystems
Sales *
Cyber andIntelligence
P&S52%
L&A14%
Order Book by Operating Group *
EI&S12%
International22%
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UK Defence and Security Market
TWO-TYPE FAST JET FLEET
TWO AIRCRAFT CARRIERS ONGOING OPERATIONS
RETAIN UK CAPABILITY SUPPORT FOR EXPORTS GROWTH IN CYBER
HAWK
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UK Armed Forces - Some Key DeploymentsOperation Ellamy
(Libya)
Quick Reaction Alert
Atlantic Patrol Maritime Security
UK remains a globally active nation with strong defence capability
World’s 4th largest defence budget
Operation Herrick (Afghanistan)
Submarine Operations
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UK Armed Forces - BAE Systems’ Supporting Role
BAE Systems supports the UK Armed Forces in forward locations and at home in 17 collocated bases
• All Royal Navy submarines built by BAE Systems• Through-life capability upgrade
• Innovative Fast Jet availability contracts• Responsive to Urgent Operational Requirements
• Specialist armoured vehicles• Vehicle support & upgrade• Assured munitions supply
•Surface Ship design, build & integration•Through-life support & upgrade•Availability-based support to patrol vessels
Submarine Operations
Operation Ellamy (Libya)
Quick Reaction Alert
Atlantic Patrol Maritime Security
Operation Herrick (Afghanistan)
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Maritime - Platform Design & Build Programmes
Type 45 Destroyer
Astute Class Attack Submarine
2011 202520202015
Through-life services for all UK Mission Systems (Combat Systems, Surveillance Radar, Command Information Systems, Torpedoes)
Long-term work programme
15 year Surface Ship ‘Terms of Business Agreement’ incentivised to deliver efficiency savings of £350m to £900m
Long-term agreements designed to sustain key industrial capability
Queen Elizabeth Class Aircraft Carrier
Type 26 Frigate / Global Combat Ship*
Successor SSBN*
SUR
FAC
E SH
IPS
SUB
MAR
INES
MIS
SIO
N
SYST
EMS
* Currently in design phase
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Maritime - Services
SYNTHETIC TRAINING NAVAL BASE SERVICES SUPPORT TO DEPLOYED SHIPS
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Maritime - Outlook
Terms of Business Agreement: enables transformation of UK shipbuild capability
Through-life Support across the surface fleet
Type 26 Frigate: £127m contract to define and establish requirements for the Royal Navy. The Global Combat Ship is being developed with interest from other navies
Opportunities in several countries for supporting indigenous shipbuild and services
Successor submarine programme approaching new design phase
Future UK maritime support: naval base support, logistics and services
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Military Air & Information - Platform Programmes
Full through- life capability in information superiority and combat air
Typhoon enhancements to support UK requirements and exports
Workshare agreement covering all phases of F-35 lifecycle, the world’s largest defence programme
Investing £800m in Samlesbury F-35 production facilities
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Military Air & Information - Services
Innovative availability contracting for combat aircraft support
Tornado ATTAC contract transformed the way RAF aircraft are supported
Typhoon TAS contract maximising aircraft availability and cost effectiveness
Applying UK experience to Salam Support Solution for Royal Saudi AF Typhoons
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Military Air & Information - Outlook
F-35 POSITION
F-35 POSITION
TYPHOON CAPABILITY DEVELOPMENT
EXPORT SUCCESS & POTENTIALUNMANNED SYSTEMS
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UK*
Spain
AustriaGermany
KSA
Italy*
Canada
Turkey
F-35
USA
Australia
Norway
NetherlandsDenmark
Israel
*Typhoon and F-35
Typhoon
Hawk Over 900 Aircraft to 18 Air Forces
Military Air & Information - Global Programmes
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Typhoon
Hawk
India*Oman*
JapanUSA
Qatar
Poland
* Typhoon and Hawk
KSA*
Malaysia
BAE Systems will continue to be a key partner in the global delivery of F-35
Iraq
F-35
Military Air & Information - Key Campaigns
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Q&A
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Guy GriffithsInternational Operating Group
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Platforms
Readiness &Sustainment
ElectronicSystems
Australia
MBDA, IndiaAir Astana KSA
2010 Sales*
International
*As at 31.12.2010. Source: BAE Systems plc Annual Report and Accounts
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Kingdom of Saudi Arabia
Magic Carpet
Al Yamamah
Tornado (Batch 1)
Lightning
Salam
Strikemaster
Tornado (B2)
Hawk / PC9
Typhoon
Industrialisation
Sandown
Other opportunities
Training, weapons & spares
Manpower training & support services
Modernisation
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Key to regional stability
Economic powerhouse
Global cultural centre
Rapidly increasing young population
Environment
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Recent Achievements
Tornado sustainment
Successful programme implementation
Tactica
Vehicle deliveries
Typhoon
Successful entry to service
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Prospects
Land
Tactica
Substantial Bradley opportunity
Air
Typhoon assembly location change
Tranche 3 requirements
Increasing support for expanding fleet
Enhanced training
Industrialisation
Typhoon maintenance and upgrade facility
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Australia
Environment of sustained economic growth
Defence White paper
Provides clear direction for defence and security requirements
With a clear roadmap for defence funding
BAE Systems well positioned
Largest Australian defence company
Key provider of capability in land sea and air
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Major Programmes
Wedgetail
M-113AWD
Hawk
LHD
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Recent Successes
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Prospects
Other 55%
R&S 45%
2010 Sales
Other 41%
R&S 59%
2015 Sales
Joint Strike Fighter
Support agreement
New naval opportunities
Growth in defence services provision
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- Drivers and Requirements
Country has economic strength and growth
Country has increasing security requirements
and defence needs
Defence industry seeking to expand its
technological capability
Developing Home Market
Multi-sector opportunities
Foreign investment and management
involvement in defence industry acceptable
Leveraging Capabilities
Developing New Home Markets
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Economic growth
India has one of the fastest growing sustainable economies .....
with significant growth in its defence budget
Pakistan occupied Kashmir (PoK)
Arunachal Pradesh
India-Nepal BorderIndia-Bhutan Border
India-China Disputed area
Aksai Chin
Shaksam Valley
India-China Disputed areaSikkim (India- China
Disputed area)
India-Myanmar Border
India-Bangladesh Border
Sri Lanka
The Indian Coast LineApproximately 7517 Kms
Ludhiana
Panipat
Jaipur
Ajmer
Modasa
AhmedabadMalegaon
Mumbai
Hyderabad
Bangalore
Guwahati
Varanasi
Faizabad
RampurNew Delhi
Lucknow
Terror incidents in
2006: 232 killed
2009
2007: 147 killed2008: 332 killed
Terrorism incidents since 2006
Pakistan
India-Pakistan War, 1947
India-Pakistan War, 1965
India-Pakistan War, 1999
China
Bangladesh
India-Pakistan War, 1971
India-China War, 1962
Instances of war in independent India’s
history
112
• 2005 – 1608 incidents; 700+ deaths
• 2006 – 1509 incidents; 750 deaths
• 2007 – 1565 incidents; 650 deaths
• 2008 – 1591 incidents; 794 deaths
• 2009 – 1128 incidents; 1134 deaths
• 2005 – 1608 incidents; 700+ deaths
• 2006 – 1509 incidents; 750 deaths
• 2007 – 1565 incidents; 650 deaths
• 2008 – 1591 incidents; 794 deaths
• 2009 – 1128 incidents; 1134 deaths
Naxal-affected areas
Total Affected States: 16
Total affected Districts: 195
Kerela Tamil Nadu
Karnataka
Andhra Pradesh
Maharashtra
GujaratMadhya Pradesh
Chhattisgarh
Orissa
Uttar Pradesh
West Bengal
Jharkhand
Bihar
Uttarakhand
Rajasthan
Haryana
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Land
Joint venture with Mahindra & Mahindra established
Significant large scale opportunities
Mine protected vehicle
Future Infantry Combat Vehicle
Artillery (M-777)
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Air
Long standing relationship with HAL
Jaguar license build since 1979
Hawk Indian Air Force and Indian Navy
Two contracts now totalling 123 aircraft
In-country assembly
HAL assembled aircraft deliveries underway
MMRCA
Typhoon down select confirmed
Potential for 126 aircraft
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– Long standing relationship with HAL– Jaguar license build since 1979
– Hawk Indian Air Force and Indian Navy– Two contracts now totalling 123 aircraft– In-country assembly – HAL assembled aircraft deliveries underway
– MMRCA– Typhoon down select confirmed– Potential for 126 aircraft
Air
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Naval and Security
Exploring opportunities for business in Naval sector
Exploring route to market opportunities in the National Security and Commercial Security sectors
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Oman
Long standing relationship with BAE Systems and its legacy companies
70% of capability UK sourced eg:-
Jaguar
Hawk
Challenger
OPV’s
Typhoon
Progressing a significant new opportunity
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Summary
Growth agenda in all IOG markets
Dependent on “pull-through”
Home Market Model
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Ian King
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Company performing well
Conservative planning assumptions
Aggressive cost reduction
Platforms sustained
Focus on Services and growth fast lanes
Defence Services
Cyber & Intelligence
Electronics
Exports
Strategy supports growth outlook
Group sales by activity
48% Services
Platforms
DefenceServices
ElectronicSystems
Cyber andIntelligence
Summary
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Q&A