The results of voting at the Annual General Meeting will be announced later today. Additionally,
Trading so far this year has been in line with expectations with continued good operational performance. Order flow on new programmes, renewals and progress on our opportunity pipeline remains strong. In particular, the AUKUS announcement in March is significant for the company in the medium and long-term and we look forward to supporting our customers in this far reaching programme. In the current elevated global threat environment, we're continuing to deliver on mission critical requirements to our customers, and our global presence and diverse portfolio of products and services provide a high visibility for top line growth, margin expansion and cash generation in the coming years.'
Guidance
The Group's full year 2023 guidance is unchanged from the Preliminary announcement on
Sales +3 to +5% (2022:
Underlying EBIT +4 to +6% (2022:
Underlying EPS +5 to +7% (2022: 55.5p)
2023 Free Cash Flow (FCF) >
Cumulative FCF 2023-2025
Guidance is provided on the basis of an exchange rate of
Sensitivity to EPS is around
Operational update
Overall programme execution has been good across all sectors in the year to date. Notable milestones achieved include:
Steel cut on the fourth Type 26 - HMS Birmingham
Construction commenced on the third Dreadnought class submarine
Two further Typhoons delivered to
Good levels of combat vehicle deliveries
Increasing exposure to structurally growing major defence markets
The AUKUS announcement in March is significant for the company. Together with the Global Combat Air Programme (GCAP) announcement in December with
In the US, the President's 2024 Budget Request increased the defence budget by over 3% above FY 2023 base levels to
In the
In
Order flow
Given the defence spending environment and order intake so far this year, we expect orders to once again exceed sales for the full year.
Notable new and strategically important awards received to date include:
Tempest -
F-35 -
AMPV -
BvS10 - Following the joint procurement agreement among
Naval Guns -
Intelligence & Security is one of eight selected by the
Evolving the business for long term growth
In support of our growth outlook and to help meet our customer aspirations we are investing in our people, facilities and technology through a combination of self and joint funding with our customers, as well as developing partnerships and collaborations.
Key progress points to date:
Strategic agreement with Microsoft aimed at supporting faster and easier development, deployment and management of digital defence capabilities
New shiplift investment commenced at our
Site investments in the
Expanding production capacity to support combat vehicle demand across our facilities in the US and
Collaboration with
Electronic Systems collaboration with Leonardo
survivability suite for rotary and fixed wing fleets
Increasing our 2023 UK apprentice and graduate hires by more than 40%
ESG Update
In 2023, we are progressing our four key pillars of focus: addressing climate risks; ideas, innovation and technology; creating opportunity for people and communities and success through partnering.
Summary investment points
As laid out in February and further reinforced in the year to date we see significant potential in the years ahead due to:
Strong programme performance underpinned by a robust operating model
Continued investment in the business to support future growth
Large order backlog providing the foundation for growth over the medium term
Leading technology solutions for our customers
Strength of our geographic and capability diversity
Our global opportunity pipeline to further enhance growth
Scope to drive further margin expansion
Our strong balance sheet with good cash generation, supporting value enhancing capital allocation
Board
As previously announced, Sir
Capital Allocation
The 2022 final dividend of
Investor engagement
In April, we hosted the first of our technology focused webinars, 'The Thread' which focused on our synthetic training capabilities. The replay is available on the Investors website. Further topics to be covered this year will be on digital transformation, multi-domain integration and electrification of transport.
Additionally in June, we will host a capital markets event on our Land capabilities with a focus on our Swedish based Hagglunds business which is set for high sales growth.
2023 Interim results
Ref. No. 061/2023
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