BAE Systems: The Leader in Defence, Aerospace & Security

BAE Systems PLC (BAE) provides advanced defence, aerospace, and security solutions globally. With a strong position in key markets like the UK, U.S., Saudi Arabia, and Australia, BAE Systems stock reflects its leadership and market strength.

BAE, regarded as one of the largest global defence corporations, employs approximately 100k people in 40+ countries worldwide. It works with customers and local partners to “develop, engineer, manufacture, and support products and systems to deliver military capability, protect national security and people, and keep critical information and infrastructure secure”.

The U.S. branch of the company, namely BAE Systems, Inc., provides an extensive range of products and services for air, land, space, and naval forces. It also offers advanced electronics, security, and IT solutions, complemented by customer support. BAE Systems, Inc., is headquartered in Falls Church Virginia in the United States, and employs some 41k people across the UK, the US, and Sweden. It is said to have generated sales to the value of $13.6 billion in 2023.

BAE Systems Origins

In 1999, BAE Systems was established by merging British Aerospace (Bae) with Marconi Electronic Systems (MES), the defence electronics and naval shipbuilding arm of the General Electric Company (GEC).

The company name was derived from combining the historic acronym “Bae” with “Systems” from Marconi. The merger, concluded on 30 November 1999, was valued at £7.7 billion. While Marconi Electronics was incorporated into the new entity, parts of that business remained separate under the Marconi Electronics trademark.

Ultimately, BAE Systems has grown from a consolidation of numerous renowned companies across various industries globally, with its origins tracing as far back as the Royal Gunpowder Mills in Waltham Abbey.

2024 notable contracts

In September 2024, the company was awarded a €60 million contract by the Ministry of Defence to upgrade the Royal Navy’s autonomous Sting Ray lightweight torpedo. It was also awarded a $440 million contract to produce additional Bradley Fighting vehicles for the U.S. Army.

In August 2024, BAE Systems received a $493 million U.S. Army contract to produce additional M109A7 Self-Propelled Howitzers and M992A3 Ammunition Carriers.

In July 2024, the company was also awarded $111 million in contracts to bring modernised, secure communications to the Republic of Korea. In June 2024, it was also awarded a contract worth up to €42 million (1 billion Czech Koruna) to Tatra Defence Vehicle of the Czech Republic, for the welding, paint, and installation of hull insulation for BvS10 vehicles in the new three-nation Collaborative All-Terrain Vehicle (CATV-3N) program.

Market capitalisation and shareholding

BAE is listed on the London Stock Exchange under the ticker symbol #BAES. The company has a market capitalisation of GBP38.26 billion, with revenue amounting to GBP24.56 billion and a net income of GBP1.84 billion. BAE Systems plc (then named British Aerospace plc) was first quoted on the LSE in February 1981 at 150 pence. BAE Systems plc merged with GEC’s MES business on 29 November 1999. The BAE Systems stock price on 30 November 1999 was 369 pence.

The company is also listed in the form of American Depositary Receipts (ADRs) on the Over The Counter market (OTC) in the U.S. under the symbol BAESY.

BAE half-yearly report 2024

In its 2024 half-yearly report, BAE reports that in the first half of 2024, the group experienced strong sales growth, with sales reaching £13.4bn, up from £12.0bn in 2023. This represented a 13% growth on a constant currency basis, driven by all sectors showing positive performance.

Notable contributions came from the Electronic Systems sector, which saw a 34% increase due to the acquisition of SMS and 11% organic growth, as well as the Platforms & Services sector, with 13% growth driven by increased vehicle production.

The Air and Maritime sectors also posted strong results, with sales growing by 7% and 14% respectively, though the Air sector was slightly offset by the completion of the Qatar Typhoon programme. The Cyber & Intelligence sector recorded a modest 4% growth.

The group’s underlying EBIT grew by 13% to £1,393m, compared to £1,258m in the same period of 2023. Electronic Systems contributed significantly, with a 24% increase in EBIT, though its return on sales dipped slightly due to the SMS acquisition.

Platforms & Services delivered strong EBIT growth of 29%, while the Air sector’s EBIT slightly decreased due to higher-risk retirements in 2023. Maritime EBIT grew in line with sales, achieving a return on sales of 7.8%, compared to 7.4% in 2023. Overall, the group’s profitability remained solid, despite some fluctuations in sector returns on sales.

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