19 Feb 09. BAE Systems showed no signs of slowing it strong growth demonstrated over the past year – its latest Results released just prior to IDEX and AUSA showed strong resilience and no signs of being affected hy the financial downturn as seen in other business areas. Indeed, one senior FT 250 FD told BATTLESPACE that these results were on the conservative side, which indicated more firepower for continued acquisitions.
Commenting on these results, Chief Executive Ian King said: “In 2008 BAE Systems delivered another strong performance across the business. We have a well balanced global business with a large order book, good forward visibility and a strong balance sheet. We have a clear long term strategy to develop the Group in the defence, security and aerospace sectors. From this robust base we look to the future with confidence as we continue to deliver value for our customers, employees and shareholders.”
The FT reported that Europe’s largest defence contractor defied the gloom gripping UK manufacturing to report a near-doubling of pre-tax profits to £2.4bn in 2008 on sales 18 per cent higher at £18.5bn.
For Mr King, who succeeded Mr Turner last summer, the short-term challenge will be to steer BAE through these uncertain times, then over the longer-term build it into a genuine global competitor to Boeing and Lockheed Martin, the biggest defence companies.
“Mike built the baseline of the company, he de-risked its UK business and pursued deals in the US market. Ian now has a solid platform and the question is, what will he do with it,” says one industry banker.
Speaking to the FT, Mr King says he does not see BAE – which relies on governments as its customers – as immune to the downturn but that it had “insulation” because of its £46.5bn order book.
“We don’t think we’re recession-proof … but we are very vigilant on what’s going to happen when we look at what governments have done to fund the financial bail-outs,” he says.
BATTLESPACE met Alan Garwood, Group Business Development Director of BAE Systems, during IDEX to discuss opportunities in the Middle East and other key sales areas.
In 2008 Alan took up his current role as Group Business Development Director, promoting company products on a global basis. He is responsible to the Chief Executive for delivering an annual order intake in excess of £15bn, adding to the current order book which exceeds £38bn. He is also a member of the Group Executive Committee, which runs the Operations worldwide.
“We are actively looking at a number of key opportunities in the Region, particularly for training and weapons packages in Saudi Arabia. We are talking with the Saudis about the supply of Bradley Upgrades and a fleet of FMTV trucks from our Sealy, Texas Plant. Greece ia another country looking at FMTV as is Poland. There are also naval opportunities in Saudi Arabia and in Oman where we are delivering OPVs. The Herti UAV system is attracting considerable interest from potential customers in the Gulf region, having been proven in Afghanistan. Homeland Security is another key area of interest. Building on our Moxys C4I success in Slovakia, we are looking to expand that system and supply others into the area.”
“Do you see your success with MRAP vehicles in the US transitioning to other export areas?” The Editor asked.
“Yes, we see considerable interest in MRAPs here in the Gulf Region and we have concluded some RG31 sales this year to Kuwait, Spain and Turkey. We are discussing with our JV partner in India a version tailor-made for the Indian market. We are launching the latest version here at IDEX.”
“How about artillery systems?”
“Yes, there is interest in the M777 to work alongside existing systems from Oman and Qatar and our Bofors Archer system, recently ordered by Norway, is also attracting interest. Unlike other systems, Archer can be operated from within the cab.
“Have you encountered any problems with the reorganisation of your local