Reporting segment changes

RNS Number : 4202Q

BAE SYSTEMS PLC

19 October 2011

 



BAE Systems plc - Reporting segment changes

19 October 2011

BAE Systems is revising its external reporting segments to align with the Group's strategic direction and improve disclosure in areas of recent development of the business, notably its Cyber & Intelligence activities and in Electronic Systems. The changes recognise the increased focus on the services nature of the Group's business and the broad geographic base of its operations.

Old reporting segments	New reporting segments
Electronics, Intelligence & Support	Electronic Systems
	Cyber & Intelligence
Land & Armaments	Platforms & Services (US)
Programmes & Support	Platforms & Services (UK)
International	Platforms & Services (International)
HQ & Other Businesses	HQ

The revised external reporting structure results in the Group reporting through the following six segments:

Electronic Systems comprises the US-based former Electronic Solutions defence electronics activities, including electronic warfare systems and electro-optical sensors, together with the US-headquartered former Platform Solutions activities, including military and commercial digital engine and flight controls, and hybrid electric drive systems.

Cyber & Intelligence comprises the Group's cyber, secure government, and commercial and financial security activities within the US-based Intelligence & Security (I&S) business and the UK-headquartered BAE Systems Detica business.

Platforms & Services (US) comprises the US-headquartered Land & Armaments business, with operations in the US, UK, Sweden and South Africa, together with US-based services and sustainment activities, including ship repair and modernisation services.

Platforms & Services (UK) comprises the Group's UK-based air and maritime activities. In addition, certain shared services activities, including the UK-based Advanced Technology Centre, are now included in this segment having formerly been reported within HQ & Other Businesses.

Platforms & Services (International) comprises the Group's businesses in Australia, India and Saudi Arabia, together with its 37.5% interest in the pan-European MBDA joint venture.

HQ comprises the Group's head office activities, together with a 49% interest in Air Astana.

On 12 October 2011, BAE Systems issued an Interim Management Statement for the period from 1 July 2011 to 11 October 2011. There is no change to the outlook for the Group's results from the reporting segment changes announced today.

The following tables 1 and 2 detail the changes, for sales² and underlying EBITA³, for the six months ended 30 June 2011 and the year ended 31 December 2010.

The changes to the past five years' results by segment will be included in the Group's 2011 Annual Report.

Table 1: Old segments

Continuing operations	Six months ended 30 June 2011			Year ended 31 December 20101
	Sales2	Underlying EBITA3		Sales2	Underlying EBITA3
	£m	£m		£m	£m
Electronics, Intelligence & Support	2,573	298		5,653	668
Land & Armaments	1,846	180		5,930	604
Programmes & Support	3,140	285		6,680	529
International	1,862	221		4,534	478
HQ & Other Businesses	78	(16)		150	(100)
Intra-group	(270)			(672)
	9,229	968		22,275	2,179

Table 2: New segments

Continuing operations	Six months ended 30 June 2011			Year ended 31 December 20101
	Sales2	Underlying EBITA3		Sales2	Underlying EBITA3
	£m	£m		£m	£m
Electronic Systems	1,221	172		2,969	455
Cyber & Intelligence	651	55		1,201	108
Platforms & Services (US)	2,685	256		7,671	728
Platforms & Services (UK)	3,052	310		6,529	522
Platforms & Services (International)	1,756	211		4,325	449
HQ	106	(36)		209	(83)
Intra-group	(242)			(629)
	9,229	968		22,275	2,179

The following tables 3 and 4 detail the segment movements, for sales² and underlying EBITA³, for the year ended 31 December 2010.

Table 3: Segment movements - 2010 full-year sales²

Old segments		Movements					New segments
		Support Solutions and I&S	Detica	Air Astana	Shared Services
	£m1	£m	£m	£m	£m	£m
Electronics, Intelligence & Support	5,653	(2,684)	-	-	-	2,969	Electronic Systems
		979	222	-	-	1,201	Cyber & Intelligence
Land & Armaments	5,930	1,741	-	-	-	7,671	Platforms & Services (US)
Programmes & Support	6,680	-	(222)	-	71	6,529	Platforms & Services (UK)
International	4,534	-	-	(209)	-	4,325	Platforms & Services (International)
HQ & Other Businesses	150	-	-	209	(150)	209	HQ
Intra-group	(672)	(36)	-	-	79	(629)	Intra-group
	22,275	-	-	-	-	22,275

Table 4: Segment movements - 2010 full-year underlying EBITA³

Old segments		Movements					New segments
		Support Solutions and I&S	Detica	Air Astana	Shared Services
	£m1	£m	£m	£m	£m	£m
Electronics, Intelligence & Support	668	(213)	-	-	-	455	Electronic Systems
		89	19	-	-	108	Cyber & Intelligence
Land & Armaments	604	124	-	-	-	728	Platforms & Services (US)
Programmes & Support	529	-	(19)	-	12	522	Platforms & Services (UK)
International	478	-	-	(29)	-	449	Platforms & Services (International)
HQ & Other Businesses	(100)	-	-	29	(12)	(83)	HQ
	2,179	-	-	-	-	2,179

1 Restated following the classification of the Regional Aircraft line of business as a discontinued operation.

2 Including share of equity accounted investments.

3 Earnings before amortisation and impairment of intangible assets, finance costs and taxation expense (EBITA) excluding non-recurring items.

 

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