BAE Systems says Russian invasion to sharpen focus on defence

BAE, whose main customers are the United States, Britain and Saudi Arabia, said on Thursday it saw further sales growth and margin expansion in 2022 after reporting a 13% increase in 2021 earnings to 2.2 billion pounds ($2.97 billion), slightly ahead of forecasts. "We are well positioned for sustained top-line and margin growth in the coming years," he said.

BAE Systems, Britain's biggest defense company, said Russia's invasion of Ukraine would place a sharper focus on security, a trend it has already benefited from as key markets like Britain and Australia spend more on their militaries. The builder of combat ships, submarines, and fighter jets said it had reviewed its operations and did not believe the impact on its suppliers or supply chains was material. It was disappointing, it said, that diplomacy appeared to have failed.

Publishing its 2021 results, it said it expected to see growth over the coming years across all sectors, with cyber intelligence also becoming globally relevant. "Defensive security remains a priority for governments as they seek to invest in sovereign capabilities to protect their nations and citizens from emerging threats," Chief Executive Charles Woodburn told reporters.

BAE's comment that it did not see its supply chains being materially affected contrasts with Britain's Rolls-Royce and French jet engine maker Safran, which said they were working to diversify supplies of titanium. BAE, whose main customers are the United States, Britain, and Saudi Arabia, said on Thursday it saw further sales growth and margin expansion in 2022 after reporting a 13% increase in 2021 earnings to 2.2 billion pounds ($2.97 billion), slightly ahead of forecasts.

"We are well-positioned for sustained top-line and margin growth in the coming years," he said. It forecast sales growth of 2% to 4% in 2022. Some 75% of the expected sales are already in BAE's order backlog. Earnings were forecast to rise 4% to 6%.

Its shares rose 2.6% in early deals, making it one of the few FTSE 100 risers on Thursday. ($1 = 0.7411 pounds) 

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