Financial performance measures as defined by Group1	Year ended 31 December 2025	Year ended 31 December 2024	Variance2
Sales	£30,662m	£28,335m	+10	%
Underlying earnings before interest and tax (EBIT)	£3,322m	£3,015m	+12	%
Underlying earnings per share (EPS)	75.2p	68.5p	+12	%
Free cash flow	£2,158m	£2,505m	£(347)m
Order intake	£36.8bn	£33.7bn	£3.1bn
Order backlog	£83.6bn	£77.8bn	£5.8bn
Financial performance measures as derived from IFRS	Year ended 31 December 2025	Year ended 31 December 2024	Variance2
Revenue	£28,336m	£26,312m	+8	%
Operating profit	£2,925m	£2,685m	+9	%
EPS - basic	68.8p	64.9p	+6	%
Net cash flow from operating activities	£3,432m	£3,925m	£(493)m
Order book	£63.1bn	£60.4bn	£2.7bn
Dividend per share	36.3p	33.0p	+10	%

 

Our continued focus on operational performance and contracting discipline enables our consistent delivery of critical capabilities and technologies for our customers worldwide. During the year, we secured £36.8bn of orders and made good progress executing on our long-term major programmes. Highlights included:

Alongside strong operational delivery, we continue to invest in our people, R&D and capital expenditure. Highlights included:

Guidance is provided on the basis of an exchange rate of $1.32:£1, which is in line with the actual 2025 exchange rate.

-         Underlying net finance costs c.£370m

-         Effective tax rate c.22%

-         Non-controlling interests c.£80m

1.         While the Group is subject to geopolitical and other uncertainties, the following guidance is provided on current expected operational performance. The guidance is based on the measures used to monitor the underlying financial performance of the Group.

1.         As at 31 December 2025 and including share of equity accounted investments.

-          We provide customers with world-class defence products and capabilities across multiple markets.

-         We undertake multi-decade programmes with long-term embedded value. Our contract order backlog provides a high level of sales visibility, driven by multi-year programmes.

-         We have a growing global opportunity pipeline. Our diverse geographic footprint supports us in pursuing excellent opportunities across all sectors as countries around the world face up to the multi-faceted threat environment.

-         We foster a high-performance innovative culture and consistently invest in R&D to build on existing world-leading capabilities and generate new innovative and disruptive technologies.

-         We have an intense focus on operational excellence, with strong, consistent programme performance. We are focused on creating value 
for our investors and customers.

-         Sustainability is embedded in our business. It forms part of our strategic framework and underpins our purpose.

-         We operate a value-enhancing operating model, undertaking our core business activities with clear, consistent and careful capital allocation.

1.         The definition and purpose of all performance measures defined by the Group is provided in the Alternative performance measures section on page 40.

2.         On a Group basis, £89m (2024 £85m) of profit for the year is attributable to non-controlling interests, with £2,253m (2024 £2,065m) attributable to equity shareholders. On an IFRS basis, £89m (2024 £85m) of profit for the year is attributable to non-controlling interests, with £2,062m (2024 £1,956m) attributable to equity shareholders.

 

 

-         In Electronic Systems, the £8.7bn of order intake featured c.£2bn from SMS, including orders for missile warning and tracking systems for the US Space Force.

-         In Platforms & Services, the £6.2bn of order intake featured strong contract awards for our US combat vehicle programmes of c.£2bn, as well as continued European orders in our Bofors and Hägglunds businesses.

-         The Air sector recorded orders totalling £14.6bn. The agreement with Türkiye, to acquire 20 Typhoon aircraft and weapons, amounted to £4.6bn alongside increased orders in US Programmes and Future Combat Air Systems. Our share of orders through MBDA was in excess of £4bn.

-         The Maritime sector recognised orders of £5.0bn predominantly for the Submarines business, as well as the next major phase of Canada's River Class destroyer programme and Australia's Hobart Class combat system upgrade.

1.         The definition and purpose of all performance measures defined by the Group is provided in the Alternative performance measures section on page 40.

2.         Order book represents the transaction price allocated to unsatisfied and partially satisfied performance obligations as defined by IFRS 15 Revenue from Contracts with Customers.

1.         The definition and purpose of all performance measures defined by the Group is provided in the Alternative performance measures section on page 40.

1.         The definition and purpose of all performance measures defined by the Group is provided in the Alternative performance measures section on page 40.

 

 

	As derived from IFRS
Year ended 31 December 2025	Revenue		Operating profit		Return on revenue		Net cash flow from operating activities			Order book
	£m		£m		%		£m			£bn
Electronic Systems	7,507		863		11.5	%	1,571			9.1
Platforms & Services	5,021		576		11.5	%	392			14.6
Air	7,372		1,078		14.6	%	873			18.5
Maritime	6,579		431		6.6	%	673			20.5
Cyber & Intelligence	2,397		182		7.6	%	115			1.4
HQ2	52		(205	)	-		4			-
Deduct Intra-group	(592	)	-		-		-			(1.0	)
Deduct Tax4	-		-		-		(196	)		-
Total	28,336		2,925		10.3	%	3,432			63.1

1.         The definition and purpose of all performance measures defined by the Group is provided in the Alternative performance measures section on page 40.

2.         HQ comprises the Group's head office activities, together with a 17% interest in Air Astana up to the date of disposal of a portion of the shareholding. The remaining 7% share is no longer equity accounted by the Group.

3.         At a Group level, the key cash flow metric is free cash flow (see Alternative performance measures on page 40). In 2025, free cash flow was £2,158m (2024 £2,505m).

4.         Tax is managed on a Group-wide basis.

-         The Electronic Systems sector booked orders of £8.7bn, featuring c.£2bn from our SMS business including missile warning and tracking satellite systems for the US Space Force.

-         Sales increased by 8%, benefitting from a full year of SMS sales, alongside increased demand across the sector.

-         Growth in underlying EBIT of 12% reflected an increased return on sales of 15.4%, including a strong contribution from SMS.

-         Operating cash flow was £1,337m, reflecting strong operational cash conversion and cash advances from customers.

1.         Including share of equity accounted investments.

2.         The definition and purpose of all performance measures defined by the Group are provided in the Alternative performance measures section on page 40.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         Our SMS team supported the launch of NASA's Carruthers Geocorona Observatory and NOAA's Space Weather Follow On L-1 spacecraft. We leveraged commercial best practices to design and build both satellites and are supporting mission operations to study and monitor space weather.

-         We celebrated the launch of NASA's SPHEREx Observatory, equipped with the BAE Systems-built spacecraft bus, telescope and RAD750® single-board computer, subsequently seeing "first light" images from the mission.

-         We introduced our new Elevation^TM spacecraft product line, featuring common system components and defined configurations for enhanced affordability and rapid deployment. The Trek bus variant was selected to support our recent contract to build the next-generation Resilient Missile Warning & Tracking (RMWT) satellite system.

-         The US Space Force formally accepted the Weather System Follow-on-Microwave satellite into operations. As the mission prime, we built the spacecraft bus and microwave imager and are performing mission operations supporting critical, time-sensitive data to enhance weather forecasting for military operations.

-         The Air Force Research Laboratory awarded our SMS team the FORGE-IT contract to continue development and deployment of the Battlefield Assisted Trauma Distributed Operations Kit to enhance time-sensitive medical care on the battlefield.

-         Our EA-37B programme team is executing contracts, including for international support, valued at more than $1.45bn (£1.1bn). Under Baseline 3, we are focused on cross-decking the prime mission equipment and have delivered five aircraft for formal testing and training. Future baselines are in development to evolve the electro-magnetic attack capability.

-         Our Eagle Passive Active Warning Survivability System was successfully fielded, with two F-15Es delivered to RAF Lakenheath in the UK, and we are under contract for full-rate production.

-         The F-35 Lightning II programme delivered approximately 180 electronic warfare suites to Lockheed Martin, including 100 of the Block 4 configuration.

-         We delivered the 1,000^th infrared seeker to Lockheed Martin for integration on the Terminal High Altitude Area Defense (THAAD) interceptor missile. In response to increased demand, the THAAD 2-Color Infrared Seeker development programme is underway to field next-generation capabilities to defeat evolving threats.

-         The AN/ARC-231A Multi-mode Aviation Radio Set has completed initial installation and is operationally ready for use on select US Army rotary-wing aircraft. This milestone marks a major step forward in equipping warfighters with an advanced, secure and fast-operating communications solution to inform key decisions in the field.

-         Our SMS team secured a $1.2bn (£0.9bn) US Space Systems Command contract for the RMWT - Medium Earth Orbit Epoch 2 programme to build the next-generation RMWT satellite system. As the mission prime, we will develop and integrate multiple satellite buses and payloads and provide ground command, control and mission operation capabilities.

-         We are building the spacecraft bus for NOAA's upcoming Space Weather Next L1 Series mission under a $230m (£174m) contract to continue providing valuable data to NOAA's Space Weather Prediction Center.

-         Under the FORGE C2 contract, worth $151m (£114m), we are developing a next-generation ground system for US Space Force missile-warning satellites.

-         We secured a $322m (£244m) order for Advanced Precision Kill Weapon System (APKWS®) laser-guidance kits under the follow-on, five-year $1.7bn (£1.3bn) Indefinite Delivery, Indefinite Quantity contract awarded in August. We continue to demonstrate APKWS counter-UAS capability, recently in conjunction with the Group's Malloy platforms.

-         We secured a low rate initial production contract from the US Navy to produce three units of the Advanced Survivability Pods for P-8 Poseidon aircraft.

-         The Common Missile Warning System programme is executing on $250m (£190m) of foreign military sales contracts, with a further $138m (£105m) received in December.

-         The Long-Range Anti-Ship Missile programme continues production deliveries for Lots 7 and 8 and has been awarded a $360m (£273m) contract for the large lot procurement effort, which includes the C1 baseline configuration.

-         We secured a $129m (£98m) follow-on production order from Data Link Solutions, our joint venture with Collins Aerospace, Inc., under its US Navy contract to deliver the Multifunctional Information Distribution System Joint Tactical Radio System on production Lot 14.

-         Our Electronic Systems sector remains positioned for growth in the medium term through its diverse portfolio of defence and commercial products and innovative capabilities for US and international customers.

-         Over the long term, we are poised to benefit from our technology strengths spanning precision weaponry, space resilience, hyper-velocity projectiles, autonomous platforms and the development of multi-domain capabilities. We are also expanding our engineering and manufacturing capacity to grow our position in the emerging market for energy storage and power management solutions to support aircraft electrification.

-         In SMS, we continue to drive growth by expanding product lines from spacecraft and payloads to ground systems. We are collaborating across segments to identify and deliver combined capabilities to address customers' mission needs and capture new and adjacent opportunities, such as those of the US Golden Dome missile defence initiative.

 

-         Order intake of £6.2bn included significant orders in Europe for our Hägglunds and Bofors businesses and c.£2bn of US combat vehicle orders. The segment closed the year with order backlog of £15.0bn, which has resulted from the significant demand in Europe for both CV90 and BVS10 over the last few years.

-         Sales recorded the highest growth across the Group in the year, at 17%, with European growth from Hägglunds and Bofors at 32%, while the US combat vehicle business grew 15%.

-         Underlying EBIT grew 30% which reflected an increased return on sales of 11.4% as production volumes increased.

-         The reduction in operating business cash flow reflected the timing of customer advances, with those received in the prior year unwinding into the supply chain.

1.         Including share of equity accounted investments.

2.         The definition and purpose of all performance measures defined by the Group are provided in the Alternative performance measures section on page 40.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         Our AMPV programme celebrated its 500^th delivery milestone during the year and is executing under full-rate production toward meeting the US Army's plan to field approximately 3,000 AMPVs in its Armored Brigade Combat Team formations.

-         We directed R&D efforts into developing a series of AMPV capability kits to advance future combat innovations, including counter-UAS detection and targeting, ground autonomy and uncrewed turrets.

-         We partnered with the US Army to advance our capabilities through successful tests of the Scorpio-XR extended range projectile that more than doubled the precision range of existing cannon artillery munitions.

-         Our Hägglunds team marked key milestones with the first CV9030 MkIV infantry fighting vehicle unveiled for the Czech Republic and the first three BvS10 vehicles presented to Sweden, Germany and the UK.

-         We announced a license agreement with Wojskowe Zakłady Motoryzacyjne SA for in-country fleet support of Poland's M88A2s and signed a Memorandum of Understanding with Champion Auto to pursue sustainment opportunities in Taiwan. We also continued to deliver Bradleys to Croatia and M88A2s to Poland.

-         We renamed our Maritime Solutions business to reflect its broader mission to serve a wide range of military and commercial customers. Our Jacksonville, Florida, shipyard continued fabrication work for Virginia- and Columbia-class submarines and Arleigh Burke-class destroyers. Our Jacksonville team commenced operations in June of its new shiplift and land-level repair facility that expanded capacity beyond its existing operational drydock and increased support of submarine construction.

-         Our Ordnance Systems Inc. team continues to progress the new Nitrocellulose Facility at the Radford Army Ammunition Plant. The endurance run was successfully completed.

-         In the UK, we opened our Sheffield facility where we will initially deliver M777 howitzers, with plans to evolve to develop and produce a range of combat systems to support the UK Government's ambitions to revitalise and sustain UK artillery capacity.

-         Our Bofors business signed a framework agreement with Latvia to supply 18 ARCHER Mobile Howitzers and Sweden procured another 18 ARCHERs as part of a military support package.

-         Our Bofors business secured its first order from Sweden for TRIDON Mk2 systems, a highly adaptable, cost-effective solution designed to provide rapid counter-UAS capabilities that are currently operational in Europe.

-         Our Hägglunds business won a $450m (£341m) contract to deliver 44 additional CV90MkIIIC vehicles to Denmark.

-         Our Combat Mission Systems team secured a number of orders across its vehicle portfolio, including contracts for more than $360m (£273m) from the US Marine Corps for Amphibious Combat Vehicles (ACVs), two long-lead awards worth approximately $550m (£417m) to produce additional AMPVs, and a $396m (£300m) contract from the US Army to produce additional upgraded Bradley A4 vehicles.

-         We also received two multi-year contracts from the US Army totalling more than $973m (£738m) for M109A7 Paladin Self-Propelled Howitzer sets.

-         Across our US shipyards, we won approximately $1.0bn (£0.8bn) in US Navy contracts featuring awards for the USS Somerset, USS Oak Hill, USS Forrest Sherman and USS The Sullivans.

-         We continue to shape our business to deliver on increased demand from US and international customers for production and sustainment of combat vehicles and artillery systems. The AMPV, M109A7, M88, Bradley and ACVs in our US vehicle portfolio are gaining increased international interest due to their proven capabilities.

-         In our maritime businesses, we are focused on sustaining our naval gun, missile launch and submarine positions, as well as US Navy ship repair, modernisation and growing fabrication activities.

-         Across our Swedish businesses, we continue to build a growing pipeline of opportunities for the CV90, BvS10 and Beowulf from Hägglunds, as well as for artillery, naval and air defence systems and munitions from Bofors.

-         The Air sector had a strong year with good growth in sales and underlying EBIT, high order intake and a material step up in our order backlog.

-         Sales increased by 9%, mainly driven by our Future Combat Air System programme, MBDA and European & International Markets, which flowed through to underlying EBIT,generating a return on sales of 11.9%.

-         Operating cash flow was £904m. The lower level compared to 2024 reflected advance payments in the prior year, which were flowed to our supply chain in 2025.

-         Order intake was £14.6bn, a 76% increase, which reflected high demand for our capabilities and services. This increased our order backlog by 22% to £32.6bn.

1.         Including share of equity accounted investments.

2.         The definition and purpose of all performance measures defined by the Group are provided in the Alternative performance measures section on page 40.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         We delivered the final two Typhoon aircraft to Qatar during the year, bringing the Qatari Emiri Air Force fleet total to 24. We also continue to deliver Typhoon major units in support of core European customer orders, with 13 completed during the year.

-         Our US Programmes business completed 153 AFTs in 2025. The current Production Lots 18/19 support the continuation of production deliveries at Samlesbury, UK, through to 2027.

-         The Royal Navy selected our all-electric Malloy T-150 UAS to transport vital supplies between UK Carrier Strike Group ships for the first time during their deployment to the Indo-Pacific.

-         We continue to progress construction of the UK's Flying Combat Air Demonstrator, which will test next-generation skills, tools, processes and techniques needed to underpin GCAP and the entry into service of the core aircraft platform, which will be called Tempest in the UK. In July, alongside our industry partners and the Ministry of Defence, we revealed the design as the aircraft reached a major milestone, with two-thirds of its structural weight in manufacturing.

-         In October, the Republic of Türkiye and the UK Government signed a c.£5.4bn agreement which included the purchase of 20 Typhoon aircraft along with an associated weapons package. We will be the prime contractor and will manufacture major airframe components, undertake final assembly of the aircraft and lead the weapons integration. We continue to work with the two governments to secure a contract for future support of the aircraft.

-         We also secured further European Typhoon major units orders for Germany (20) and Italy (8), totalling c.£0.8bn.

-         We were awarded a contract for the full production of the new European Common Radar System Mk2 advanced radar for the Royal Air Force's Typhoon aircraft from the UK Ministry of Defence worth £454m.

-         We launched Edgewing, a joint venture with our international partners, Leonardo (Italy) and JAIEC (Japan), on GCAP. The new company, based in Reading, UK, will be accountable for the design and development of the next-generation combat aircraft and will remain the design authority for the life of the product, which is expected to go out beyond 2070.

-         Concept and assessment work on GCAP continues with our international industry partners in all three nations under their respective national contracts. We received a further £1.0bn of funding on the UK assessment phase contract in the first half of the year.

-         We created BAE Systems Arabian Industries Ltd by merging two of our existing portfolio companies, enhancing our visibility and participation within the military industry sector while creating further opportunity; in accordance with our long-term strategy to support the Kingdom of Saudi Arabia.

-         MBDA continued to secure significant orders through 2025, including further production orders with the French Air Force, Italian Air Force and Army, German Armed Forces and the UK Royal Navy for ASTER 15 & 30 Block 1 missile; Indian Navy Rafale weapon package order for the METEOR Beyond Visual Range Air-to-Air Missile (BVRAAM), MICA, SCALP and EXOCET AM39; and a South Korean production order for the METEOR BVRAAM, which will enable the Air Force to benefit from a common stockpile for both KF-21 and F-35. The Lancaster House 2.0 Declaration at the 37th Franco-British Summit in July 2025 saw both the UK and French Armed Forces confirm their continued support for Future Cruise/Anti-Ship Weapon development, now re-named as STRATUS Low Observable & Rapid Strike.

-         GCAP is a strategically important partnership that will not only drive innovation and technological advancement but also promote significant economic activity in the UK, Japan and Italy, with the aim of securing the future of their respective combat air industries for decades.

-         We will continue to focus on ensuring that Typhoon major units and support deliverables are made in line with customer expectations. Future Typhoon production and support sales are underpinned by existing contracts. We continue to pursue future sales of Typhoon.

-         We expect to sustain production of the rear fuselage assemblies for the F-35 at current levels of approximately 150 aft fuselages per year. Negotiations continue with Lockheed Martin to secure the full value of Lots 20-22, which will continue production to 2030.

-         In the Kingdom of Saudi Arabia, the In-Kingdom Industrial Participation programme continues to make good progress consistent with our long-term strategy, while supporting the Kingdom's National Transformation Plan and Vision 2030. This includes a further package of industrialisation agreed in 2025 on our Saudi British Defence Co-operation Programme. We expect our Saudi in-Kingdom support business to remain stable, underpinned by long-standing contracts, while we continue to address the Kingdom's current and future combat air requirements.

-         MBDA is well placed to benefit from increased defence spending in Europe and internationally and is investing in critical resources accordingly. The business has a strong order backlog, and development programmes continue to enhance the long-term capabilities of the business in air, land, sea and space domains.

-         Order intake of £5.0bn included increased funding for our Submarines business as well as the next major phase of Canada's River Class destroyer programme. The prior year included £4.6bn for Batch 1 of the Hunter Class frigates which are now under construction.

-         The Maritime segment recorded double-digit sales growth of 11% as construction continued across major programmes including Dreadnought, Type 26 and Hunter Class frigates, and design work for SSN-AUKUS.

-         The lower return on sales of 6.7% reflects the early stage maturity of the Maritime portfolio with several first-in-class programmes trading at relatively low margins as we invest in in additional capacity and capability both within our shipyards and the supply chain to support programme delivery.

1.         Including share of equity accounted investments.

2.         The definition and purpose of all performance measures defined by the Group are provided in the Alternative performance measures section on page 40.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         In September, His Majesty King Charles III commissioned the sixth Astute Class submarine, Agamemnon, into service with the Royal Navy. Agamemnon continues to progress through its in-water phase, while we also continue construction on the final vessel in the class.

-         We continue to make progress on the four Dreadnought Class submarines, with advancing levels of construction underway on the first three boats. In September, we cut steel on Boat 4 at our site in Barrow-in-Furness, UK, and commenced early stage construction activities.

-         We are progressing the Type 26 frigate programme of eight ships for the Royal Navy. Investment in additional capacity and capability continues both within our shipyards and the supply chain to support programme delivery. Focus remains on the achievement of key milestones in advance of sea trials for the first of class.

-         During the year, Her Royal Highness The Princess of Wales officially named HMS Glasgow at a ceremony in the UK. HMS Glasgow and HMS Cardiff, the first two ships in class, are docked at our Scotstoun shipyard and are progressing through final outfit. HMS Belfast and HMS Birmingham are both under construction in our new Janet Harvey Hall. Units for the fifth ship are also being constructed at our shipyard in Govan.

-         October 2025 marked the first full year of RECODE, an eight-year availability support programme signed in 2024. RECODE continues to adapt to the changing operational needs of the Royal Navy, achieving 99% combat systems equipment availability across the fleet against a target of 95%. Modernisation of our Combat Management System is using new development principles to deliver capability into operation quickly.

-         In Australia, construction of the Hunter Class frigate is progressing with 45 of the 78 units of the first ship in production.

-         Significant upgrade work is underway at our Osborne shipyard on the first Air Warfare destroyer, HMAS Hobart. HMAS Parramatta, the final Anzac Class frigate, undergoing the Midlife Capability Assurance Programme, is in the final stages of production and commissioning, with full handover to the Royal Australian Navy scheduled in 2026.

-         The upgrade programme for the Royal Australian Air Force's Hawk aircraft is approaching conclusion with installation of 32 of the 33 engines completed.

-         Over the past 12 months, our teams based at Portsmouth Naval Base continued to work side by side with the Royal Navy to support the nation's defence ambitions at home and abroad. From the Carriers, the Type 23 frigates and Type 45 destroyers, to the batch 1 offshore patrol vessels and the Hunt Class mine countermeasure ships - we continue to service and maintain the critical assets that keep the UK safe.

-         Our teams ensured HMS Prince of Wales and HMS Dauntless were prepared and ready to deploy as part of the Royal Navy's UK Carrier Strike Group in April.

-         In RBSL, vehicle deliveries continue under the Boxer programme, with 15 UK-built vehicles to date. On the Challenger 3 programme, focus remains on design maturity to facilitate the transition to full production. A total of six prototype tanks have been delivered with another two in build.

 

-         The Canadian Government announced that it will work with Australia to establish an Arctic Over The Horizon Radar capability. As the enterprise partner for Australia's over the horizon radar system, JORN, we will support the Government in this important agreement.

-         The initial mobilisation phase of the SSN-AUKUS programme in Australia has commenced to support the future build of the SSN-AUKUS fleet of conventionally armed, nuclear-powered submarines for the Royal Australian Navy.

-         We signed a contract with Canada's Irving Shipbuilding Inc., marking the start of the next major phase on the River Class destroyer programme. The ship is based on the Type 26 platform with specified design changes to meet the Royal Canadian Navy's requirements. Under this new contract, we will provide support and consultancy services throughout the build phase.

-         We signed a new strategic partnership with PGZ to establish a new ammunitions factory in Poland to produce 155mm artillery ammunition. This is aimed at increasing the nation's production of ammunition.

-         Our Submarines business is executing across three long-term programmes: Astute; Dreadnought; and SSNA. Our focus remains on strengthening our workforce, supply chain and infrastructure to provide the capability, capacity and resilience required to deliver these long-term programmes.

-         Preparations to start construction of the sixth Type 26 frigate, HMS Newcastle, are well underway with long-lead equipment items already in progress.

-         In Australia, we are a key partner to the Commonwealth in the delivery of its National Defence Strategy, which seeks a strategy of denial and an integrated, focused force. AUKUS nuclear-powered submarines, an enhanced lethality surface fleet, strategic surveillance and long-range strike are prioritised in the Integrated Investment Plan which supports this.

-         We will continue to work alongside ASC Pty Ltd to deliver initial mobilisation activities to support Australia's SSN-AUKUS submarines programme.

-         The Cyber & Intelligence segment recorded £2.7bn of new orders.

-         Sales grew by 2%³, predominantly related to counter-UAS sales in our Digital Intelligence business following the acquisition of Kirintec in the prior year.

-         Underlying EBIT of £223m reflected an increased return on sales of 9.3%.

1.         Including share of equity accounted investments.

2.         The definition and purpose of all performance measures defined by the Group are provided in the Alternative performance measures section on page 40.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         Our Intelligence & Security business brought together Bohemia Interactive Simulations, TerraSim and Pitch Technologies to launch BAE Systems OneArc, a commercial defence technology business focused on delivering synthetic environments to transform modern battlespace simulation.

-         We are using OneArc's VBS4 platform to develop an AI-enabled embedded training capability for the Bradley Fighting Vehicle that integrates virtual and real-world systems to improve readiness, reduce costs and advance the US armed forces' digital modernisation goals.

-         Our Intelligence & Security business also launched its Velhawk zero-trust cyber security solution to provide customers cyber resilience, accelerated cyber response and optimised working efficiency.

-         We continue to expand our presence on the Instrumentation Range Support Program, providing support to dozens of ranges for the US Army, Navy, Air Force, Space Force, Department of Energy, NASA and various international ranges.

-         In our Digital Intelligence business, we achieved the successful launch of our first low earth orbit satellite cluster, Azalea, at the end of November. This capability will provide defence, national security and civil sectors with sovereign space-based intelligence, surveillance and reconnaissance to enhance decision-making around today's threats.

-         In our National Security & Government division, we focused on mobilising new frameworks secured in 2024. Our Defence division continues to progress campaigns for key programmes and secured an important international order for assessment of core C4 capability for a sovereign client.

-         Following the acquisition of Kirintec in 2024, we continued to identify opportunities to exploit our electronic warfare and counter-UAS products alongside other complementary capabilities within our Digital Intelligence business and the wider Group. Kirintec specialises in cyber and electromagnetic activities, counter-improvised explosive devices and counter-UAS products for military customers.

-         Our Air and Space Force Solutions business was awarded a $238m (£180m) Systems Engineering and Evaluation, Systems Analysis Worldwide VIII contract, continuing our 28-year legacy on the programme.

-         Our Integrated Defense Solutions team grew the Strategic Systems Program by more than 20% year-on-year in support of the submarine nuclear deterrence mission. The team was selected to provide weapon systems engineering and integration services for the nuclear armed Sea-Launched Cruise Missile programme and completed weapon system integration activities on the Columbia and Dreadnought submarine construction programmes.

-         Our Intelligence & Security business maintains a pipeline of qualified business opportunities aligned to current US Government priorities.

-         We seek to accelerate growth by using AI, automation and autonomy to modernise offerings in digital labour, counter-UAS and UAS, decision advantage and platform digitisation.

-         In our UK Digital Intelligence business, we continue to progress our transformation roadmap to ensure we are well placed to take advantage of more favourable conditions in the medium to long term resulting from anticipated increases in defence spending across our existing and target markets. We are continuing to drive operational efficiencies through system integration and the simplified organisational structure embedded at the beginning of the year.

-         In our UK Digital Intelligence business, investment in our product portfolio continues with good progress made on developing cross-domain products for the US and other international markets, low earth orbit satellites and multi-domain network solutions for the defence market.

-         Through Kirintec, we will continue to identify opportunities for our counter-UAS products and complimentary capabilities for military customers.