BAE SYSTEMS plc Annual Report BAE SYSTEMS plc Annual Report 2005 6 Carlton Gardens London SW1Y 5AD United Kingdom Telephone +44 (0)1252 373232 Registered in England and Wales No. 1470151 Website details www.baesystems.com 2005 Bradley A3 In 2005 BAE Systems acquired United Defense, who have produced the Bradley Combat System for over 20 years. The Bradley family of vehicles is a key vehicle system for the US Army supporting a variety of missions. Delivering real advantage BAE SYSTEMS plc Annual Report BAE SYSTEMS plc Annual Report 2005 6 Carlton Gardens London SW1Y 5AD United Kingdom Telephone +44 (0)1252 373232 Registered in England and Wales No. 1470151 Website details www.baesystems.com 2005 Bradley A3 In 2005 BAE Systems acquired United Defense, who have produced the Bradley Combat System for over 20 years. The Bradley family of vehicles is a key vehicle system for the US Army supporting a variety of missions. Delivering real advantage Operating and financial review BAE Systems at a glance BAE Systems is the premier transatlantic defence and aerospace company delivering a full range of products and services for air,land and naval forces as well as advanced electronics, information technology solutions and customer support services. Electronics, Land & Armaments Programmes Customer Solutions Integrated Systems Commercial Intelligence & Support & Support & Partnerships Aerospace Principal operations An industry leader in a variety of A global leader in the design, Comprises the Company’s air Provides support solutions for current Comprises a portfolio of high- Comprises the Company’s 20% Principal operations military communications, electronic development, production and through- systems, naval ships and submarines and future customer requirements, technology defence systems interest in Airbus together with the identification, navigation and guidance life service support of armoured activities together with the Company’s addressing the trend within armed businesses: Integrated System Aerostructures business and the systems, and a provider of network combat vehicles, major and minor participation in the UK’s Future forces to work more closely with Technologies; Underwater Systems; regional aircraft asset management centric warfare solutions and a broad calibre naval guns, missile launchers, Carrier programme. industry to optimise their military 37.5% interest in MBDA; 20.5% and support activities. range of support solutions, including canisters, artillery systems and capability in the most effective manner. interest in Saab; and 50% interest major ship repair activities for the intelligent munitions. Key capabilities include the integration in Gripen International. US Navy. and delivery of effective supply chain and logistics management. CS&S is the prime contractor on the Al Yamamah programme. Main operating regions US, UK/Europe US, UK, Sweden, South Africa UK UK, Saudi Arabia, Australia UK, Sweden, France, Germany, Italy UK, France, Germany, Spain, US Main operating regions Major markets US, Global US, UK/Europe UK UK/Europe, Middle East, Australia UK/Europe Global Major markets Contribution Contribution to 2005 Group sales 23% 8% 18% 18% 12% 21% to 2005 Group sales includes six months of United Defense Key points • Sustained leadership positions • Transatlantic growth • 37 Typhoon aircraft delivered • Delivery of Saudi strategy on track • Continued restructuring of • Strong Airbus order intake Key points in electronic warfare and military with acquisition of in the year (12 to UK RAF) – Compound construction European business portfolio from 2005 • First flight of A380 long-range airliner from 2005 communications – secured US Air United Defense Industries – Saudi joint venture – Eurosystems transaction • First flight of UK Hawk Advanced Force mission planning contract company formed completed • Airbus cost reduction programme • Global land systems Jet Trainer aircraft achieved early – Increasing employment – Integrated System on track • Acquisition of largest US non- business established • Successful delivery of F-35 JSF of Saudi nationals Technologies formed nuclear ship repair business • Airbus new product development • Key contracts secured airframe assemblies – Saab stake reduced to 20.5% • Government to government programmes underway • Successful integration of 2004 – Bradley reset and upgrade – Atlas Elektronik sale agreed • Type 45 first of class launched Understanding Document signed on acquisitions – Danish CV90, US RG-31, M777 • Ongoing losses in Regional Aircraft in February 2006 Saudi armed forces modernisation • Revised Gripen International • Successful flight test of infrared • UK Future Rapid Effect System marketing arrangements with Saab • Aerostructures disposal announced • Landing Ship Dock (Auxiliary) • Delivery of UK partnered missile countermeasures system (FRES) demonstrator award first ship delivered support growth strategy for commercial airliners • UK cost base being addressed • Improved performance from Australian business Location in this report page 24-25 page 26-27 page 28-29 page 30-31 page 32-33 page 34-35 Location in this report Operating and financial review BAE Systems at a glance BAE Systems is the premier transatlantic defence and aerospace company delivering a full range of products and services for air,land and naval forces as well as advanced electronics, information technology solutions and customer support services. Electronics, Land & Armaments Programmes Customer Solutions Integrated Systems Commercial Intelligence & Support & Support & Partnerships Aerospace Principal operations An industry leader in a variety of A global leader in the design, Comprises the Company’s air Provides support solutions for current Comprises a portfolio of high- Comprises the Company’s 20% Principal operations military communications, electronic development, production and through- systems, naval ships and submarines and future customer requirements, technology defence systems interest in Airbus together with the identification, navigation and guidance life service support of armoured activities together with the Company’s addressing the trend within armed businesses: Integrated System Aerostructures business and the systems, and a provider of network combat vehicles, major and minor participation in the UK’s Future forces to work more closely with Technologies; Underwater Systems; regional aircraft asset management centric warfare solutions and a broad calibre naval guns, missile launchers, Carrier programme. industry to optimise their military 37.5% interest in MBDA; 20.5% and support activities. range of support solutions, including canisters, artillery systems and capability in the most effective manner. interest in Saab; and 50% interest major ship repair activities for the intelligent munitions. Key capabilities include the integration in Gripen International. US Navy. and delivery of effective supply chain and logistics management. CS&S is the prime contractor on the Al Yamamah programme. Main operating regions US, UK/Europe US, UK, Sweden, South Africa UK UK, Saudi Arabia, Australia UK, Sweden, France, Germany, Italy UK, France, Germany, Spain, US Main operating regions Major markets US, Global US, UK/Europe UK UK/Europe, Middle East, Australia UK/Europe Global Major markets Contribution Contribution to 2005 Group sales 23% 8% 18% 18% 12% 21% to 2005 Group sales includes six months of United Defense Key points • Sustained leadership positions • Transatlantic growth • 37 Typhoon aircraft delivered • Delivery of Saudi strategy on track • Continued restructuring of • Strong Airbus order intake Key points in electronic warfare and military with acquisition of in the year (12 to UK RAF) – Compound construction European business portfolio from 2005 • First flight of A380 long-range airliner from 2005 communications – secured US Air United Defense Industries – Saudi joint venture – Eurosystems transaction • First flight of UK Hawk Advanced Force mission planning contract company formed completed • Airbus cost reduction programme • Global land systems Jet Trainer aircraft achieved early – Increasing employment – Integrated System on track • Acquisition of largest US non- business established • Successful delivery of F-35 JSF of Saudi nationals Technologies formed nuclear ship repair business • Airbus new product development • Key contracts secured airframe assemblies – Saab stake reduced to 20.5% • Government to government programmes underway • Successful integration of 2004 – Bradley reset and upgrade – Atlas Elektronik sale agreed • Type 45 first of class launched Understanding Document signed on acquisitions – Danish CV90, US RG-31, M777 • Ongoing losses in Regional Aircraft in February 2006 Saudi armed forces modernisation • Revised Gripen International • Successful flight test of infrared • UK Future Rapid Effect System marketing arrangements with Saab • Aerostructures disposal announced • Landing Ship Dock (Auxiliary) • Delivery of UK partnered missile countermeasures system (FRES) demonstrator award first ship delivered support growth strategy for commercial airliners • UK cost base being addressed • Improved performance from Australian business Location in this report page 24-25 page 26-27 page 28-29 page 30-31 page 32-33 page 34-35 Location in this report BAE Systems is an international company CONTENTS About BAE Systems 1 engaged in the development, delivery and Highlights and Outlook 2 support of advanced defence and aerospace Results in brief 3 Chairman’s letter 4 systems in the air,on