BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

presented by
ALI ASHRAF
S1209016409
MBA/UWE/Villa College/2016
module: GLOBAL FINANCIAL STRATEGY

the industry: DEFENCE

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

the company: BAE SYSTEMS

- British manufacturer of aircraft missiles, avionics, aerospace and
defence products
- formed in 1999 - when British Aerospace PLC (BAe) and Marconi
Electronics Systems merged - both pioneers in aviation and
defence systems technology

TODAY
BAE - provides some of the worlds most advanced, aerospace and
security solutions
employs a skilled workforce of 83,400 people in over 40 countries.
Working with customers and local partners, they develop, engineer,
manufacture and support products and systems to deliver military
capability, protect national security and people and keep critical
information and infrastructure secure.

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

VISION

MISSION

to be the PREMIER

to safeguard and

international defence,

enhance customers vital

aerospace and security

interests and deliver

develop and expand international business

company

sustainable growth in

inspire and develop (BAE) people to drive success

shareholder value

STRATEGY
maintain and grow in defence business
continue to grow business in adjacent markets

enhance overall financial performance and competitive positions

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

strategic OBJECTIVES

WIN
continue to win new

IMPROVE

ACCELERATE

continuously improve

accelerate the growth

efficiency and

of cyber, intelligence and

competitiveness

security business

LEVERAGE

DRIVE
continue to drive value
from defence platforms
and services

international orders

leverage on technology

GROW

and engineering

continue to grow

capabilities

electronic systems
business
BAE SYSTEMS - an OVERVIEW
presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

SWOT Analysis
STRENGTHS

WEAKNESSES

diversified portfolio

structural inertia -

huge capital reserves

hierarchical

captures a major

less focus on private

portion of the market

S W

good R&D base

sector

OPPORTUNITIES

THREATS

emerging markets
growing demand for
security
the need for better

O T

performance in

buyers limited
highly regulated
industry
economic pressure
ethical pressure

warfare - using less

human action

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

PEST Analysis
POLITICAL

SOCIO-CULTURAL

high regulation

soldiers deaths -

government relationship

relates and demands

government decides products

on safety

buying decisions highly

dependent on policy

P S

ECONOMIC

issues on war & killing

TECHNOLOGY

since main buyer

governments,
economic recessions
affect buying

ethical on moral

E T

advancements lead to
innovation in internet,
robotics and
unmanned warfare

global economics
affect raw material
prices - aluminium,
steel and copper

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

FINANCIALS
SALES

EARNING PER
SHARE (EPS)

ORDER INTAKE UNDERLYING EBITA

OPERATING CASH
FLOW

NET DEBIT

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

10

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

11

UNDERSTANDING
Both return on sales and net profit margins have declined relative to
previous year
the company is financially unhealthy and is susceptible to external
economic conditions (credit)
leverages highly on debt financing
BAE SYSTEMS - an OVERVIEW
presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

12

CHALLENGES
BAE highly dependent on government decisions
in need of support in terms of government contracts
economically volatile due to changes in economic policies - basically defence
spending
growing resistance by public - sensitivity to war casualties
in constant competition to develop new technologies and improve financial
efficiency
Shareholders may not be happy with the drops in earning
Consider - Five-Forces model - threat of new entrants - the BRIC countries
are developing their own manufacturing

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

13

YES,
YOUR
QUESTIONS
ARE
WELCOME!

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

14

BAE SYSTEMS - an OVERVIEW

presented by: ALI ASHRAF (S1209016409) UWE MBA Jan 2016 at Villa College / Global Financial Strategy

15