BAE Systems Sees 10% Sales Growth to £30.7 Billion and EBIT up 12%
BAE Systems' underlying sales rose 10% to £30,662 million for full-year 2025, driving underlying EBIT up 12% to £3,322 million and EPS to 75.2 pence. Order intake hit £36.8 billion, boosting its backlog to a record £83.6 billion and prompting guidance for 7–9% sales growth and 9–11% EPS expansion in 2026.
1. Robust Earnings Performance
BAE Systems delivered underlying sales of £30,662 million, up 10% year-on-year, with statutory revenue rising 8% to £28.3 billion. Underlying EBIT climbed 12% to £3,322 million, yielding a 10.8% return on sales, while underlying EPS increased 12% to 75.2 pence.
2. Record Order Intake and Backlog
Order intake reached £36.8 billion, driven by contracts for combat vehicles, electronic warfare systems and munitions, lifting the overall backlog to a record £83.6 billion, up £5.8 billion from 2024.
3. Strong Cash Flow and Guidance
Free cash flow totaled £2,158 million despite higher capex and R&D, with three-year cumulative FCF exceeding £7 billion. Management forecast 7–9% underlying sales growth and 9–11% EPS growth for 2026, and multi-year FCF targets above £6 billion.
4. Positive Market Reaction and Valuation
Shares jumped roughly 4% on the day of release, contributing to a 23% year-to-date gain. The trailing P/E stands at about 32.4, P/S at 2.2 and EV/OCF around 27, reflecting investor optimism about future growth.