BAE Systems warns on 2011 sales
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Aerospace, shipbuilding and defence giant BAE Systems warned today (17 February) that it expected a reduction in sales in 2011 as a result of falling Land & Armaments business and as changes arising from the Strategic Defence and Security Review reduce UK demand.
Reporting marginal increases in sales and earnings for 2010, BAE said continuing actions to reduce cost and improve efficiency were expected to benefit return on sales and mitigate the impact of that lower activity. Cost reduction and efficiency actions have resulted in a headcount reduction of approximately 15,100 in the past two years.
The Group said it was successfully growing it services activities – which represented 48% of sales in 2010 and include air, land and maritime defence and provision of cyber and intelligence services.
The US defence and security markets continued to generate business opportunities, despite budgetary pressures, while in the UK, BAE believes that it can help in delivering efficiency improvements in response to economic pressure to reduce government expenditure.
In the US there was a commitment to the next generation, F-35 combat aircraft programme in which BAE Systems, through both its US and UK businesses, is a significant participant.
2010 sales were up 1.8% to £22.4bn (2009: £21.9bn) while earnings rose 0.8% to £2.21bn (2009: £2.19bn).
