BAE Systems ended last year with a record order backlog and strong prospects for future growth through its activities in ventures such as the Global Combat Air Programme (GCAP), the company says.
Detailing its full-year performance on 19 February, BAE said revenues of £26.3 billion ($33.2 billion) were up 14% against 2023’s £23 billion, with order intake totalling £33.7 billion. Its order backlog at 31 December 2024 stood at a record £77.8 billion, including £26.8 billion in the air sector.
Some £8.5 billion of air-sector sales last year included £2 billion booked against the Eurofighter programme, £700 million via the company’s role in the Lockheed Martin F-35, and £4.4 billion through its stake in guided weapons specialist MBDA.
December, meanwhile, saw the agreement of an industrial joint venture involving BAE, Leonardo and the Japan Aircraft Industrial Enhancement Company linked to the development of a new manned fighter named Tempest for Italy, Japan and the UK via the GCAP venture, with service entry expected by 2035.
Noting that the UK’s Strategic Defence Review activity will conclude in the near future, BAE chief executive Charles Woodburn notes: “The government has already signalled its intent to increase defence spending, and we expect that our major UK programmes, including submarines, Type 26 frigates, GCAP and others, will continue to be well supported.”
Referring to current uncertainty around a US-led effort to end the war between Russia and Ukraine, he notes: “It’s widely understood that even when hostilities in Ukraine end, the threat environment in Europe, the Asia-Pacific and the Middle East will remain elevated, as will the need to replenish inventories.”
With an eye on the increased military spending also being seen in other markets beyond the UK, he notes: “There is upward pressure on NATO defence budgets, with discussions about increasing the 2% [Gross Domestic Product] target in the years ahead.
“We also expect Australia, Japan and countries in the Middle East to significantly increase their spending on defence in the coming years,” Woodburn says.
Meanwhile, BAE has significantly increased its internal research and development spending this decade, including by 30% in 2024.
Other investments last year saw BAE expand its activities in uncrewed air system and counter-drone technologies by acquiring Malloy Aeronautics, Callen-Lenz and Kirintec.
“We saw the evolution of warfare that was happening in Ukraine, and moved quite swiftly on a number of acquisition opportunities in the UK,” Woodburn says. “It means that we are now one of the largest military drone manufacturers in Europe, outside of Ukraine, and we have a very strong portfolio.”
Elsewhere, the company also boosted its presence in the space sector, by completing a $4.8 billion purchase of US company Ball Aerospace.
Also of note, BAE last year realised a profit of £75 million through reducing its holding in Kazakhstan’s flag carrier Air Astana. Its stake was cut from 49% to 17% as the airline group completed its stock market listing.
