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© BAE Systems 2011/cleared for public release 00

Investor Day17th May 2011


Cautionary statement:

All statements other than statements of historical fact included in this document, including, without limitation, those regarding the financial condition, results, operations and businesses of BAE Systems and its strategy, plans and objectives and the markets and economies in which it operates, are forward-looking statements. Such forward-looking statements which reflect management’s assumptions made on the basis of information available to it at this time, involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of BAE Systems or the markets and economies in which BAE Systems operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this document shall be regarded as a profit forecast.

Investor Day 2011


No planned practice alarms

If there is a fire, alarm sounds with announcement to evacuate

All automatic Fire Door Shutters will be activated separating the building to prevent fire from spreading and sprinklers will activate

Do not use lifts

Please leave from the front of the hotel and turn left towards the courtyard

Investor Day 2011


14:00 Ian King - Introduction14.10 Linda Hudson - US Market Environment

Services14:30 Larry Prior - Services15:00 John Gannon - US security

Electronics15:15 Tom Arseneault - Electronics15:35 Q&A15:45 Break

Platforms16:00 Bob Murphy - Land and Armaments16:30 Nigel Whitehead - Programmes & Support17:00 Q&A17:10 Break

International17:30 Guy Griffiths - International home markets18:00 Ian King - Close and Q&A

18:15 Drinks18:45 Dinner

Agenda

4© BAE Systems 2011/cleared for public release

Company performing well

Conservative planning assumptions

Aggressive cost reduction

Platforms sustained

Focus on Services and growth fast lanes

Defence Services

Cyber & Intelligence

Electronics

Exports

Strategy supports growth outlook

Group sales by activity*

48% Services

Platforms

DefenceServices

ElectronicSystems

Cyber andIntelligence

Introduction

* As at 31.12.2010


Linda HudsonBAE Systems Inc. Strategy


BAE Systems, Inc. Senior Leadership Team

Michelle LambertonVP

Internal Audit

Executive Committee

Linda HudsonPresident & CEO BAE Systems, Inc.

Curt GraySVP Human Resources & Administration

Bob FitchSVPGovernment Relations

D. Michael BennettSVP

Information Management

Doug BelairSVP

Strategy & Planning

Brad JacobsSVP

Finance

Larry PriorExecutive Vice

PresidentService Sectors

John GannonPresident Intelligence & Security

Dave HerrPresident

Support Solutions

Bob MurphyExecutive Vice

PresidentProduct Sectors

Ian GrahamSVP & General

Counsel

John SuttleSVP Communications

Tom ArseneaultPresidentElectronic Solutions

Dan GobelPresident

Platform Solutions

Frank Pope President

Land & Armaments

Office of the President & CEO

Gene RenuartSenior Military Advisor


Coming off a strong 2010

Financial performance

Aligned organization to markets

Significant cost reductions

Performing in the challenging environment of 2011

Managed through budget uncertainties and continuing resolution

Continuing to reduce costs

Program performance and customer satisfaction is strong

Already closed on two acquisitions

On track to deliver our commitments

Strategy in place to return to growth and improve profitability in a challenging market

BAE Systems Inc


2010 Sales = $17.6B

BAE Systems Inc


DoD proposed FY12 base budget is essentially flat

Expecting pressures and further erosion

Affordability becomes primary acquisition objective

Transition from Gates to Panetta

OCO for Iraq and Afghanistan declines - world remains dangerous

Targeted services, intelligence and security markets will grow

Platforms remaining in service longer

Commercial aviation is recovering

International demand for US products continues

Industry focusing on affordability and diversification

US Business Environment

http://upload.wikimedia.org/wikipedia/commons/e/e0/United_States_Department_of_Defense_Seal.svg


Reduce costs to improve competitive positions and profitability

Deliver superior performance to protect franchise positions

Drive organic growth in market fast-lanes

Acquire to strengthen positions and address adjacent markets

Divest non-core assets

Focus initiatives to attract and retain the best talent

BAE Systems Inc Strategy


The SSA is our license to trade in the US

BAE Systems Inc. is a U.S. Company

SSA is binding agreement - BAE Systems plc, BAE Systems, Inc., and the DoD

Mitigates concerns associated with Foreign Ownership, Control and influence

Negotiated and overseen by Defense Security Service (DSS)

Covers BAE Systems, Inc. and its owned and/or managed businesses

Control of BAE Systems, Inc. is limited to US citizens with DoD-issued security clearances

Compliance and governance vested in the Inc. Board of Directors

Doing Business in the US - Special Security Arrangement (SSA)


Linda Hudson

President and CEOBAE Systems, Inc.

Ian Graham

Senior Vice PresidentGeneral Counsel

SecretaryBAE Systems, Inc.

Bob Fitch

Senior Vice PresidentGovernment Relations

BAE Systems, Inc.

Ian King

Chief Executive OfficerBAE Systems plc

Peter Lynas

Group Finance DirectorBAE Systems plc

BAE Systems Inc. Board


Continue aggressive cost reduction initiatives

Reposition land and armaments to support future customer demand

Drive organic growth in fast-lanes

Grow military and commercial electronics

Grow support and services

Grow intelligence and security

Grow exports

Continue to strengthen positions through acquisitions

Attract and retain the best talent

Return to growth and improve profitability in a challenging market

BAE Systems Inc. way forward





Platforms16:00 Bob Murphy - Land and Armaments16:30 Nigel Whitehead - Programmes and Support17:00 Q&A17:10 Break



Investor Day 2011


Larry PriorServices


Rising Demand for Services

Increased operational tempo

Fewer new starts

Platforms in service longer

Increased requirement to maintain and modernize equipment

ISR: “Intelligence and information are the fire and maneuver of the 21st

century”

Opportunities for Growth in:

Defense and Technical Services

Cyber and Intelligence

BAE Systems is well positioned for growth in Services

The Strategic Environment


BAE Systems is committed to growing the services business

Services are at the Centre of the Group’s Strategy

Our mission is to deliver sustainable growth in shareholder value through our commitment to Total Performance

Integrated Business Plans

Our vision is to be the premier global defence and security company

- Operate and grow in the defence and security markets in the segments of Services, Electronic Systems and Platforms

- Grow in existing and develop new home markets

- Grow our export business

Develop new home markets and grow our export business

Invest and grow in Electronic Systems

Invest and grow in Services including Readiness & Sustainment, Cyber and Intelligence

Implement rationalisation and efficiency programmes

Sustain our Platform positions

Implement the home market strategy to grow our business

Our Strategy

Our values are - Trusted, Innovative and Bold

© BAE Systems 2011/cleared for public release

Services represent 48% of BAE Systems sales today

The group has invested in services to drive growth

BAE Systems Services Business

Defense Services

Platforms & Products

Electronic Systems


18

http://www.etiglobal.net/index.php?id=1


Well positioned in Non-Nuclear Ship Repair, Modernization, Conversion and Overhaul

Defense Services: Strengths Today


FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

CRUISERS

DESTROYERS

Each Modernization Availability ~ $40M Extend to cover all DDGs

Maintaining and modernizing the fleet ensures sustainable growth

AEGIS Modernization: Opportunities tomorrow


Strengths Today

The largest ever military procurement contracts

30 year production program, 3000 aircraft

BAE Systems produces vital portions of the aircraft and electronic warfare capabilities

Opportunities Tomorrow

Vital role in developing the F-35 Global Sustainment

50+ years of services

F-35 is a platform for sustainable growth

F-35 Lightning II


Strengths Today

BAE Systems Hawk Training Aircraft - over 900 aircraft; 18 Countries; over 2.5 million flying hours

F-35 lead-in trainer for the U.S. Navy, UK Royal Air Force and the Royal Australian Air Force


T-X Advanced Jet Trainer Family of Systems

Program anticipated to be 350-500 aircraft, including ground based training system, spares and support

Services for the air training domain is a material opportunity for the Group

US Air Force Advanced Pilot Training Family of Systems (T-X)


Strengths Today

Lean Manufacture and Support Services for Military Aircraft around the world


Logistics, Maintenance, and Supply Chain Management to support US Navy Training Aircraft in the USA

T-34, T-44 & T-6UK Harrier Line Pre 2002 - Before UK Harrier Pulse Line - After Lean

Leveraging global capability across the group to win in the US

US Navy Training Aircraft Services and Support Bid


Land: US Army Radford Army Ammunition Plant

Munitions services are an emerging growth opportunity for the Group

Strengths Today

• Royal Ordnance heritage

• Commitment to UK munitions business and capital investment

• Holston Army Ammunition Plant- “State of the Art” production

• Long term franchise position


• Operate Radford Army Ammunition Plant (RFAAP)

• The only active full-spectrum US Military propellant manufacturing center

http://www.army.mil/-images/2009/01/22/28749/army.mil-28749-2009-01-22-110104.jpg


Significant emerging opportunities to support C4ISR Mission Networks

Strengths Today

Extensive experience in radar design, range and launch operations

Support of US space launches at both Cape Canaveral and Vandenberg AFB at an affordable cost


Provide operation and maintenance (O&M) and sustainment services to US Air Force Launch Test Ranges

Launch and Test Range


Full Life-Cycle

Facility management / training services

Maintenance / modification / modernization

Operational & fleet availability

Legacy platforms, current production, future systems

Cross-Domain

Maritime

Air

Land

C4ISTAR

BAE Systems maintains a competitive advantage

Defense and Technical Services: Well positioned for Growth


USA: Intelligence & Security Based out of Washington and focus on servicing

customers in the intelligence and security

community

Employees: 7,200

UK: DeticaLeading provider of security to the intelligence and

security services

Employees: 1, 300

BAE Systems AustraliaThe business provides integrated solutions for the

Defence Force and security customers

Employees: 55

BAE Systems maintains a ~$2.5B Cyber & Intelligence business

Ireland: NorkomLeading provider of counter‐fraud software to the

international banking community

Employees: 350

Denmark: ETIA leading intercept and monitoring company with

positions in Europe, Middle East and Asia

Employees: 260

Global Cyber and Intelligence Business


BAE Systems is positioned at the heart of the secure government market

The US/UK special relationship remains core

“Five Eyes” advantage

Federal – Civil

Government

Federal – Civil

Government CommercialCommercialGov Gov GovGov

Secure government arena is setting the agenda for the wider federal /civil government markets

Extends to critical infrastructure

Government will increase security requirements for industry - to include the defense industrial base, ISPs and others

Requirements extend to banks and other mainstream industries

Dua

l‐use Techn

olog

ies an

d Inform

ation Sharing

Dua

l‐use Techn

olog

ies an

d Inform

ation Sharing

BAE Systems is well positioned

Prod

ucts

Services

Prod

ucts

Services

Global Cyber and Intelligence Business Model


New customers and new markets differentiates the Group’s service offerings

TREIDAN™

Growing Global Product Portfolio

http://www.etiglobal.net/index.php?id=1


Leveraging credentials in government to serve critical national infrastructure and financial services clients

GovernmentGovernmentSecure GovernmentSecure Government TelecomsTelecoms Financial ServicesFinancial Services

Expanding Array of Customers

http://upload.wikimedia.org/wikipedia/en/0/04/Bank_of_America.svg

http://www.barclaycard.co.uk/

http://www.axa.co.uk/

http://www.nfib.police.uk/index.html

http://www.three.co.uk/Home

http://images.google.co.uk/imgres?imgurl=http://kamfamily.files.wordpress.com/2007/10/tsa.jpg&imgrefurl=http://kamfamily.wordpress.com/2007/10/19/is-tsa-really-doing-its-job/&usg=__qAc8Hzf__tG6wM3_5ehdjgc_grE=&h=334&w=340&sz=34&hl=en&start=1&um=1&tbnid=B1XGixrA0JgKhM:&tbnh=117&tbnw=119&prev=/images?q=transportation+security+administration&um=1&hl=en&rlz=1T4SUNA_enGB242GB243

http://en.wikipedia.org/wiki/Image:US_Department_of_Homeland_Security_Seal.svg

http://images.google.co.uk/imgres?imgurl=http://upload.wikimedia.org/wikipedia/commons/thumb/2/2e/US-FBI-Seal.svg/600px-US-FBI-Seal.svg.png&imgrefurl=http://commons.wikimedia.org/wiki/File:US-FBI-Seal.svg&usg=__tBT1X2sWzfEalATimxVmKc7Xfas=&h=600&w=600&sz=178&hl=en&start=1&um=1&tbnid=NySASiycnJIGYM:&tbnh=135&tbnw=135&prev=/images?q=FBI&um=1&hl=en&rlz=1T4SUNA_enGB242GB243

http://images.google.co.uk/imgres?imgurl=http://www.customs.gov.nf/images/customs.jpg&imgrefurl=http://www.customs.gov.nf/contacts.htm&usg=__xjuAK-SOWWkCZ0InXpgOhDoWokQ=&h=167&w=543&sz=16&hl=en&start=8&tbnid=wpQeJA5LSsmZMM:&tbnh=41&tbnw=132&prev=/images?q=australian+customs&gbv=2&hl=en

http://images.google.co.uk/imgres?imgurl=http://www.advance.org/attachments/wysiwyg/10783/afplogo.JPG&imgrefurl=http://www.advance.org/en/cev/502&usg=__KSbYvjZsUhgw5aUemAgUFYEQxeQ=&h=319&w=698&sz=34&hl=en&start=3&um=1&tbnid=r1Kp0nVavRrPwM:&tbnh=64&tbnw=139&prev=/images?q=australian+federal+police&um=1&hl=en


Growth in the global commercial security market is set to outpace growth in government expenditure

Driven by a threat that increasingly targets commercial interests

The commercial market opportunity is a growth priority for the Group

There is a requirement for best-of-breed capability, services by a trusted supplier

BAE Systems is leveraging its expertise from secure government to help address emerging requirements

Timing and execution are key

Organised crime

Border security

National security

Counter- terrorism

Cyber security

Traditional defence

Critical National

Infrastructure

The Commercial Market Opportunity is Significant


Norkom builds on BAE Systems existing product portfolio to reach new customers in new geographies - focusing on financial services

Enterprise Case Management

Link & Mass Compromise Analysis

Anomaly Detection

Fuzzy Matching

Technical tools

Product Capability Portfolio of 120 major

global banking

customers

Positions in more

than 100 countries,

including the

emerging markets of

Asia Pacific and the

Middle East

More than 200

leading research and

developers

Analytics platform to

cross‐sell services and

products

Software suite covers:

anti‐money

laundering; sanctions

filtering; watch list

management; card

fraud; cheque fraud;

identity fraud and

internal fraud

Products operate

independently or as

part of an integrated

suite

Partnering and

distribution strategies

give access to already

existing global

networks

Norkom and Detica NetReveal®


BAE Systems is positioning to grow

Substantial, resilient and growing

Driven by an evolving threat

Increasing political awareness and demand for security

Market is still being shaped

BAE Systems will help make the market and set requirements

Secure government, federal – civil government, commercial

A Growing Global Market for Cyber & Intelligence


John GannonIntelligence & Security Sector - Investing in growth and competitiveness


~7,200 EMPLOYEES~1220 CURRENT ORFORMER MILITARY

EXCEEDING MARKET GROWTH THROUGH ALIGNMENT OF:MARKET-DRIVEN STRATEGYCUSTOMER-DRIVEN ORGANIC GROWTHINTERNAL INVESTMENTM&A

PROVIDE TOP QUALITY, CUSTOMER- TAILORED INTELLIGENCE & SECURITY

SERVICES TO U.S. GOVERNMENT AGENCIES ANYWHERE IN THE WORLD

GLOBAL PRESENCEHEADQUARTERS: ARLINGTON, VA

CALIFORNIA COLORADO MARYLAND NEW HAMPSHIRE NEW YORKWASHINGTON D.C

INDIA GERMANY JAPAN MIDDLE EAST SOUTH ASIA SOUTH KOREA

UNITED KINGDOM

Intelligence & Security Sector Investing in growth and competitiveness


CybersecurityCybersecurity

Advanced intrusion management

Cross domain solutions

Cyber analysis

Real-time network forensics

Integration and solution development

Knowledge & Data Management

Knowledge & Data Management

IT infrastructure services

Mission application development

Cross-domain data sharing

Information portals

Data discovery tools

Fraud detection

Analytics Targeting & Support to Operations

Analytics Targeting & Support to Operations

All-source analysis

Motion imagery

Counter- surveillance

Analytic Training

Watchlisting

Infrastructure vulnerability assessments

Geospatial & ISRGeospatial & ISR

Image Exploitation Products

Full motion video

Photogrammetry, cartography and remote sensing

Geospatial products and tools

Imagery storage, ingest, discovery, and dissemination

Intelligence & Security Sector Core capabilities


Tighter market, but…

With areas of growth Geospatial / full motion video Advanced analytic training Multi-INT fusion Cybersecurity

Sharpen focus on execution Increase efficiencies & competitive advantage Build capabilities through innovation Increase customer intimacy Align strategy, organization and investment

Stiffer Competition, but we…

Intelligence & Security Sector Market environment


Target markets of higher growth potential

Emerging needs from new threats

Open source analysis

Full motion video & multi-INT fusion

Predictive analytics

Next Generation Desktop/analyst tools

Grow into new and adjacent customers in the

intelligence community and DOD services

Intelligence & Security Sector Strategy for growth


Intelligence & Security Sector Focus areas for investment


Invest in the business

Focus on organic growth

Build the top line, while guarding the bottom line

Invest in human capital - leadership/skills

Strategically align organization and leaders for new

markets

Increase investment in the front end of the business



Invest in new strategic capabilities

Global Analysis Tradecraft Advancement Center

(GTAC)

Training our analysts with real-world material -

Yemen

Activity-based intelligence management & exploitation

Linking patterns of behavior and search for

anomalies - Bin Laden

Leading Edge NOSC Environment (LENE)

Demonstrating superiority through performance -

Monitoring BAE Systems networks



Pursue acquisitions in:

Cybersecurity

Identity management

Knowledge management



An ISS engineer in Reston, VA received praise for his participation in a demo video briefing to the Director of the National Geospatial-Intelligence Agency (NGA) and the Vice Chairman of the Joint Chiefs of Staff. The director said the video represented her vision for how NGA will revolutionize the user experience.

A SpecTal/McClendon employee recently completed a briefing of her engineering research project to the U.S. Senate. The classified effort was the only NGA R&D project selected for the Intelligence Community Tech Days presentation. Among those that she briefed were the Director of National Intelligence and the Director of the National Geospatial-Intelligence Agency, as well as Senators, Congressmen and their staffers.

A lead intelligence analyst on DIA's Afghanistan-Pakistan Task Force, published a document for the Secretary of Defense and senior executives in the White House. Several key policymakers expressed their gratitude for her work and are using it as a reference.

One of our FMV analysts contributed to their program’s overview briefing for the new administration’s VIPs, including: the Vice President of the United States, who complimented the program, and the Director of the Central Intelligence Agency, who visited our FMV analysts’ workspace to receive the program briefing. Three different customer leads expressed the same sentiment, stating that they could not have achieved their mission without the BAE Systems team.

Two of the nation’s largest actuary organizations have praised the call center work we do to support the Pension Benefit Guaranty Corporation (PBGC), a government agency that services and protects private sector pensions. The organizations wrote: “Customer service is a key component of the ease of compliance with any regulatory regime, and our members consistently report that excellent customer service is received when calls are placed to the PBGC.”

One of our employees received a letter of thanks from Gen. David Petraeus, Commander, International Security Assistance Force/United States Forces - Afghanistan, who said our employee while deployed to (ISAF) Kabul, Afghanistan, “established himself as the subject matter expert on Afghan governance through his leadership, commitment and meticulous attention to details.” He went on to say “His briefings were precise and informative, and they helped to keep the entire ISAF leadership informed of key political developments, thus providing a common operating picture for all.”

Intelligence & Security Sector The customer is key…


Tom ArseneaultElectronics - Investing in technology and growth


Tactical Communications

CommercialAvionics

Soldier & Vehicle

Intelligence, Surveillance & Reconnaissance

Electronic Warfare

Technology Management &Deep Mission

Understanding

DefenseAvionics

Power Management & Energy4% revenue$0.6B market

11% revenue$6B market



31% revenue$5.7B market


16% revenue$6.1B market

Electronics Markets


12,500$4.6B

23

EmployeesRevenueSites

Electronics Market Footprint


Exploiting areas of continuing high demand in defense

Pursuing large opportunities in core segments

Investing in the technology to takeaway market share

Balancing portfolio with commercial avionics and power management

Leveraging strengths internationally

How we will grow


Exploiting areas of Continuing High Demand in defense



Persistent SurveillancePersistent Surveillance



Communications Electronic AttackCommunications Electronic Attack



Reduced Size IFF TransponderReduced Size IFF Transponder



Small Adaptable Link 16Small Adaptable Link 16



APKWSAPKWS



Next Gen JammerNext Gen Jammer



Common Infrared CountermeasureCommon Infrared Countermeasure



Investing in technology to takeaway market share



MicroIR products: Firefighting



MicroIR products: ThermographyThermography



MicroIR products: Thermal Weapon Sights



MicroIR products: Remote Weapon Sights



Fairchild Imaging AcquisitionFairchild Imaging Acquisition



Balancing portfolio with Commercial Avionics and Power Management



Commercial AvionicsCommercial Avionics



HybriDrive: Bus



HybriDriveHybriDrive: Long haul: Long haul



Digital Electronic Warfare SystemDigital Electronic Warfare System



Innovative technology management, coupled with deep mission understanding, provides focus for investments resulting in responsive product offerings.

We will grow by:

Exploiting areas of continuing high demand in defense


Investing in technology to takeaway market share

Balancing portfolio with Commercial Avionics and Power Management


Summary



Q&A





Platforms16:00 Bob Murphy - Land and Armaments16:30 Nigel Whitehead - Programmes and Support 17:00 Q&A17:10 Break



Agenda


Bob MurphyLand and Armaments

© BAE Systems 2011/cleared for public release75

Playing Through The Current Cycle…

75

$B % ROS

2

4

8

10

12

6

Portfolio well positioned for next cycle


Restructuring the Business…

Improved Competitive Position


Vehicle Portfolio Positioned for Future Growth

Portfolio positioned to address future key customer priorities


Business Drivers Through 2015

• Bradley Transition from Reman to OEM• KSA Opportunity

• GCV or Further Bradley Evolution

• CV-90 Export• Canada/Norway

• AMPV

• Continued Growth in Platform Service & Support

Combat Vehicle Mix Reflects Withdrawal fromIraq & Afghanistan

GCV and CV-90…the catalyst for future growth


Business Drivers Through 2015

• Transition From MRAP and FMTV in 2011

• JLTV Opportunity• On 2 of 3 TD Teams

• MEC-V Opportunity• Strong Smart V Product Offering

TWV Portfolio shifts from Medium to Light

JLTV & MEC-V represent the U.S. Army’s Future TWV Emphasis


JLTV

CV-90

Canada & Norway

Bradley Fighting Vehicle

Kingdom Of Saudi Arabia

Ground Combat Vehicle

Army’s #1 Priority

Strong Competitive Position

New Combat Vehicle OEM Growth Drivers

http://upload.wikimedia.org/wikipedia/commons/f/f7/1BFV01.jpg


BRADLEYArmored Multi-Purpose Vehicle (AMPV)

PIM

Army’s 3rd Ground PriorityFunded, Supported and Moving Forward

AMPV has Broad Support to Replace M-113 Fleet

Future Upgrades ContinueEmphasized by Sec GatesStrongly Supported by the Army

Upgrading Legacy Combat Vehicle Platforms

We have a Resilient Portfolio of Capabilities


MEC-VJLTV

Competition OngoingWe are on 2 of 3 TD Teams

Army’s 2nd Ground Priority Competitive Executable Solution

Invested to position for future LTWV Programs

Leveraging Global TWV Capability

http://defense-update.com/wp/wp-content/uploads/2011/02/smart_isv.jpg


Naval Amphibious Vehicle

Requirements TBD

Marine Personnel Carrier

A Clear PriorityCompetitive Solution

AAV Upgrade

Influencing Requirements Now

EFVCANCELLED

New Opportunities in Amphibious Vehicles

http://en.wikipedia.org/wiki/File:Expeditionary_Fighting_Vehicle.jpg

http://en.wikipedia.org/wiki/File:MarinePersonnelCarrierDemonstrator.jpg

http://en.wikipedia.org/wiki/File:USMarines_AAV_Iraq_apr_2004_116_hires.jpg


M-777 Howitzer

India Worldwide Malaysia, Middle-East

Joint Venture with FNSSInternational TWV

Growing Our Export Market

Broad set of Capabilities to Generate Global Growth

http://en.wikipedia.org/wiki/File:M777_howitzer_rear.jpg

http://en.wikipedia.org/wiki/File:RG-31.JPG


Restructured the Business…Enhanced Competitive Position

Combat Vehicle Portfolio Positioned for Growth

Aggressively Pursuing New TWV Programs

Platform Services & Support Continues to Grow

Positioned to Grow Export Markets

Delivering Double Digit ROS%

Positioning for the Next Growth Cycle

Future Growth Underpinned by a Flexible Resilient Portfolio of Capabilities Aligned with Future Customer Requirements


8686

Nigel WhiteheadProgrammes and Support


UK Market & Programmes

• Number 1 supplier to UK MOD

BAE Systems is the No.1 supplier to the UK Ministry of Defence

38,400 employees in the UK

Well established in air, maritime and land platforms and services

Strong export sales record

£883 million spend on R&D in the UK**

Largest manufacturing-based employer in the UK, employing over 18,000 engineers**

* As at 31.12.2010. Source: BAE Systems plc Annual Report and Accounts** Oxford Economics, 2009

PROGRAMMES & SUPPORT

Strong Order Book

World-class Products & Services

Export Potential

Platforms

Readiness &Sustainment

ElectronicSystems

Sales *


P&S52%

L&A14%

Order Book by Operating Group *

EI&S12%

International22%


UK Defence and Security Market

TWO-TYPE FAST JET FLEET

TWO AIRCRAFT CARRIERS ONGOING OPERATIONS

RETAIN UK CAPABILITY SUPPORT FOR EXPORTS GROWTH IN CYBER

HAWK


UK Armed Forces - Some Key DeploymentsOperation Ellamy

(Libya)

Quick Reaction Alert

Atlantic Patrol Maritime Security

UK remains a globally active nation with strong defence capability

World’s 4th largest defence budget

Operation Herrick (Afghanistan)

Submarine Operations


UK Armed Forces - BAE Systems’ Supporting Role

BAE Systems supports the UK Armed Forces in forward locations and at home in 17 collocated bases

• All Royal Navy submarines built by BAE Systems• Through-life capability upgrade

• Innovative Fast Jet availability contracts• Responsive to Urgent Operational Requirements

• Specialist armoured vehicles• Vehicle support & upgrade• Assured munitions supply

•Surface Ship design, build & integration•Through-life support & upgrade•Availability-based support to patrol vessels

Submarine Operations

Operation Ellamy (Libya)

Quick Reaction Alert

Atlantic Patrol Maritime Security

Operation Herrick (Afghanistan)


Maritime - Platform Design & Build Programmes

Type 45 Destroyer

Astute Class Attack Submarine

2011 202520202015

Through-life services for all UK Mission Systems (Combat Systems, Surveillance Radar, Command Information Systems, Torpedoes)

Long-term work programme

15 year Surface Ship ‘Terms of Business Agreement’ incentivised to deliver efficiency savings of £350m to £900m

Long-term agreements designed to sustain key industrial capability

Queen Elizabeth Class Aircraft Carrier

Type 26 Frigate / Global Combat Ship*

Successor SSBN*

SUR

FAC

E SH

IPS

SUB

MAR

INES

MIS

SIO

N

SYST

EMS

* Currently in design phase

91


Maritime - Services

SYNTHETIC TRAINING NAVAL BASE SERVICES SUPPORT TO DEPLOYED SHIPS


Maritime - Outlook

Terms of Business Agreement: enables transformation of UK shipbuild capability

Through-life Support across the surface fleet

Type 26 Frigate: £127m contract to define and establish requirements for the Royal Navy. The Global Combat Ship is being developed with interest from other navies

Opportunities in several countries for supporting indigenous shipbuild and services

Successor submarine programme approaching new design phase

Future UK maritime support: naval base support, logistics and services


Military Air & Information - Platform Programmes

Full through- life capability in information superiority and combat air

Typhoon enhancements to support UK requirements and exports

Workshare agreement covering all phases of F-35 lifecycle, the world’s largest defence programme

Investing £800m in Samlesbury F-35 production facilities


Military Air & Information - Services

Innovative availability contracting for combat aircraft support

Tornado ATTAC contract transformed the way RAF aircraft are supported

Typhoon TAS contract maximising aircraft availability and cost effectiveness

Applying UK experience to Salam Support Solution for Royal Saudi AF Typhoons


Military Air & Information - Outlook

F-35 POSITION

F-35 POSITION

TYPHOON CAPABILITY DEVELOPMENT

EXPORT SUCCESS & POTENTIALUNMANNED SYSTEMS


UK*

Spain

AustriaGermany

KSA

Italy*

Canada

Turkey

F-35

USA

Australia

Norway

NetherlandsDenmark

Israel

*Typhoon and F-35

Typhoon

Hawk Over 900 Aircraft to 18 Air Forces

Military Air & Information - Global Programmes


Typhoon

Hawk

India*Oman*

JapanUSA

Qatar

Poland

* Typhoon and Hawk

KSA*

Malaysia

BAE Systems will continue to be a key partner in the global delivery of F-35

Iraq

F-35

Military Air & Information - Key Campaigns


Q&A


Guy GriffithsInternational Operating Group


Platforms

Readiness &Sustainment

ElectronicSystems

Australia

MBDA, IndiaAir Astana KSA

2010 Sales*

International

*As at 31.12.2010. Source: BAE Systems plc Annual Report and Accounts


Kingdom of Saudi Arabia

Magic Carpet

Al Yamamah

Tornado (Batch 1)

Lightning

Salam

Strikemaster

Tornado (B2)

Hawk / PC9

Typhoon

Industrialisation

Sandown

Other opportunities

Training, weapons & spares

Manpower training & support services

Modernisation


Key to regional stability

Economic powerhouse

Global cultural centre

Rapidly increasing young population

Environment


Recent Achievements

Tornado sustainment

Successful programme implementation

Tactica

Vehicle deliveries

Typhoon

Successful entry to service


Prospects

Land

Tactica

Substantial Bradley opportunity

Air

Typhoon assembly location change

Tranche 3 requirements

Increasing support for expanding fleet

Enhanced training

Industrialisation

Typhoon maintenance and upgrade facility


Australia

Environment of sustained economic growth

Defence White paper

Provides clear direction for defence and security requirements

With a clear roadmap for defence funding

BAE Systems well positioned

Largest Australian defence company

Key provider of capability in land sea and air


Major Programmes

Wedgetail

M-113AWD

Hawk

LHD


Recent Successes


Prospects

Other 55%

R&S 45%

2010 Sales

Other 41%

R&S 59%

2015 Sales

Joint Strike Fighter

Support agreement

New naval opportunities

Growth in defence services provision


- Drivers and Requirements

Country has economic strength and growth

Country has increasing security requirements

and defence needs

Defence industry seeking to expand its

technological capability

Developing Home Market

Multi-sector opportunities

Foreign investment and management

involvement in defence industry acceptable

Leveraging Capabilities

Developing New Home Markets


Economic growth

India has one of the fastest growing sustainable economies .....

with significant growth in its defence budget

Pakistan occupied Kashmir (PoK)

Arunachal Pradesh

India-Nepal BorderIndia-Bhutan Border

India-China Disputed area

Aksai Chin

Shaksam Valley

India-China Disputed areaSikkim (India- China

Disputed area)

India-Myanmar Border

India-Bangladesh Border

Sri Lanka

The Indian Coast LineApproximately 7517 Kms

Ludhiana

Panipat

Jaipur

Ajmer

Modasa

AhmedabadMalegaon

Mumbai

Hyderabad

Bangalore

Guwahati

Varanasi

Faizabad

RampurNew Delhi

Lucknow

Terror incidents in

2006: 232 killed

2009

2007: 147 killed2008: 332 killed

Terrorism incidents since 2006

Pakistan

India-Pakistan War, 1947



China

Bangladesh


India-China War, 1962

Instances of war in independent India’s

history

112

• 2005 – 1608 incidents; 700+ deaths

• 2006 – 1509 incidents; 750 deaths




• 2005 – 1608 incidents; 700+ deaths





Naxal-affected areas

Total Affected States: 16

Total affected Districts: 195

Kerela Tamil Nadu

Karnataka

Andhra Pradesh

Maharashtra

GujaratMadhya Pradesh

Chhattisgarh

Orissa

Uttar Pradesh

West Bengal

Jharkhand

Bihar

Uttarakhand

Rajasthan

Haryana

© BAE Systems 2011


Land

Joint venture with Mahindra & Mahindra established

Significant large scale opportunities

Mine protected vehicle

Future Infantry Combat Vehicle

Artillery (M-777)


Air

Long standing relationship with HAL

Jaguar license build since 1979

Hawk Indian Air Force and Indian Navy

Two contracts now totalling 123 aircraft

In-country assembly

HAL assembled aircraft deliveries underway

MMRCA

Typhoon down select confirmed

Potential for 126 aircraft


– Long standing relationship with HAL– Jaguar license build since 1979

– Hawk Indian Air Force and Indian Navy– Two contracts now totalling 123 aircraft– In-country assembly – HAL assembled aircraft deliveries underway

– MMRCA– Typhoon down select confirmed– Potential for 126 aircraft

Air


Naval and Security

Exploring opportunities for business in Naval sector

Exploring route to market opportunities in the National Security and Commercial Security sectors


Oman

Long standing relationship with BAE Systems and its legacy companies

70% of capability UK sourced eg:-

Jaguar

Hawk

Challenger

OPV’s

Typhoon

Progressing a significant new opportunity

http://www.airfighters.com/photo/12994/M/Oman-Air-Force/BAE-Systems-Hawk-203/124/


Summary

Growth agenda in all IOG markets

Dependent on “pull-through”

Home Market Model


Ian King


Company performing well

Conservative planning assumptions

Aggressive cost reduction

Platforms sustained

Focus on Services and growth fast lanes

Defence Services


Electronics

Exports

Strategy supports growth outlook

Group sales by activity

48% Services

Platforms

DefenceServices

ElectronicSystems


Summary


Q&A

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