BAE Systems
Defense contractor hitting £28 billion revenue on AUKUS submarines, Typhoon jets, and record £77.8 billion order backlog.
BAE Systems reported £28.3 billion sales in 2024, up 14% year-over-year, with operating profit exceeding £3 billion for the first time. The £77.8 billion order backlog is the number that matters—contracted future revenue that provides visibility for years. Defense is a long-cycle business: submarines take decades from contract to delivery, fighter jets require continuous upgrades, armored vehicles need spare parts for 30-year lifespans. This backlog is stored energy, locked contracts that competitors can't poach.
The £4 billion AUKUS submarine contract (awarded March 2024) funds development through 2028 for SSN-AUKUS—a next-generation nuclear attack submarine designed jointly with the US and Australia. BAE's Barrow shipyard will manufacture seven Astute-class and four Dreadnought-class submarines simultaneously while ramping up for SSN-AUKUS production starting late this decade. First delivery is late 2030s. The UK plans to increase its attack submarine fleet from 7 to 12 boats, backed by £6 billion investment in industrial capacity. This is niche construction: defense spending creates specialized facilities, skilled workers, and supply chains that persist for decades.
The Turkey contract (£4 billion for 20 Typhoon aircraft and weapons integration in 2025) demonstrates network effects in defense. Typhoon operates across multiple European air forces; each new customer strengthens the support ecosystem and shares upgrade costs. The Global Combat Air Program (joint venture with Leonardo and JAIEC) targets next-generation fighters, positioning BAE for 2040s-2060s contracts while Typhoon ages out.
Non-aircraft revenue also surged: £2 billion in combat vehicle contracts for the Hägglunds unit, £3.3 billion in electronic systems, £1.1 billion in MBDA missiles. The 2024 acquisition of Ball Aerospace expanded US space capabilities. This diversification across platforms, geographies, and customers creates portfolio resilience—budget cuts in one area rarely affect all simultaneously. H1 2025 results showed 11% sales growth to £14.6 billion with 13% EBIT growth. The 2025 guidance expects 7-9% revenue growth, potentially topping £30 billion. Geopolitical instability is ecological opportunity for defense contractors—Russia-Ukraine and Middle East tensions drive sustained demand.