LONDON – Feb 18, 2026 – Charles Woodburn, Chief Executive, said:
“Our results highlight another year of strong operational and financial performance, thanks to the outstanding dedication of our employees. In a new era of defence spending, driven by escalating security challenges, we’re well positioned to provide both the advanced conventional systems and disruptive technologies needed to protect the nations we serve now and into the future. With a record order backlog and continuing investment in our business to enhance agility, efficiency and capacity, we’re confident in our ability to keep delivering growth over the coming years.”

FINANCIAL HIGHLIGHTS

Financial performance measures as defined by Group¹

Financial performance measures as derived from IFRS

As defined by Group¹

• Sales increased 10%² to a record £30.7bn, with growth in all of our sectors. Organic growth was 9%².
• Underlying EBIT increased by 12%² with a 20bps increase in return on sales from 10.6% to 10.8%.
• Underlying EPS increased by 12%².
• Free cash flow was strong at £2,158m. Significant customer advances were received late in the year, capital expenditure remained close to record levels at c.£1bn and research and development (R&D) spend increased.
• Our order backlog grew by £5.8bn to a record £83.6bn. Order intake was strong at £36.8bn, with all sectors performing well, reflecting the continued relevance of our diverse geographic footprint and multi-domain capabilities.

As derived from IFRS

• The growth in revenue of 8% reflects the same strong operational performance in sales across the portfolio, but excludes the impact of our equity accounted investments.
• Operating profit was up 9% as the growth in underlying EBIT was offset by additional costs from the amortisation of acquired intangibles, reflecting the significant acquisitions in the prior year which included Ball Aerospace.
• Basic EPS was up 6%.
• Net cash flow from operating activities reflected movements on customer advances and working capital commitments.

Notes:
¹ Measures as defined by Group = Alternative Performance Measures (APM), non-IFRS, reflecting underlying operational performance.
² Variances: sales, underlying EBIT, and underlying EPS are at constant currency; all other variations are in reported currency.

DELIVERING FOR OUR CUSTOMERS

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:

• The UK Government announced an agreement with Türkiye to acquire 20 Typhoon aircraft, along with an associated weapons package worth £4.6bn to BAE Systems.
• Delivery of the final two Typhoon aircraft to Qatar, bringing the fleet total to 24.
• Launch of Edgewing, a joint venture with partners in Italy and Japan under the Global Combat Air Programme (GCAP).
• Norway selected the Type 26 frigate for its future warship procurement programme under a £10bn agreement.
• Support to Royal Navy ships for the UK Carrier Strike Group 2025 and deployment of Malloy T-150 uncrewed air systems.
• $1.2bn (£0.9bn) contract with the US Space Force for space-based missile tracking satellites.
• 500th delivery milestone for the Armored Multi-Purpose Vehicle (AMPV) programme.
• Key combat vehicle milestones including CV9030 MkIV and BvS10 deliveries.
• Naming of HMS Glasgow (Type 26) and continued construction of HMS Cardiff, Belfast, Birmingham and Sheffield.
• Keel laying of HMS Dreadnought, first of four Dreadnought Class submarines.

INVESTING IN TOMORROW

• Opening of Janet Harvey Hall at Govan, Glasgow.
• Opening of the Applied Shipbuilding Academy in Glasgow.
• Opening of Sheffield facility by the UK Secretary of State for Defence.
• $250m (£190m) investment in Jacksonville, Florida shipyard.
• Continued investment in Louisville, Kentucky and Jacksonville facilities.
• Recruitment of over 2,500 early careers employees and 6,800 apprentices, graduates and undergraduates in training.

CAPITAL DEPLOYMENT

• Final dividend of 22.8p recommended, total dividend for 2025: 36.3p (+10%).
• 30m shares repurchased for £502m. Total returned to shareholders: £1,529m.

GROUP GUIDANCE¹ FOR 2026

Based on exchange rate of $1.32 / £1

Three-year cumulative free cash flow guidance

• Underlying net finance costs c.£370m
• Effective tax rate c.22%
• Non-controlling interests c.£80m
• Sensitivity to foreign exchange rates: a 5 cent movement in the £/$ exchange rate impacts sales by c.£500m, underlying EBIT by c.£70m and underlying EPS by c.1.4p.

ABOUT BAE SYSTEMS

We provide some of the world’s most advanced, technology-led defence, aerospace and security solutions, helping customers stay ahead of evolving threats across land, sea, air, cyber and space. We are a skilled workforce of around 110,000 people, working with customers and local partners in more than 40 countries to deliver military capability, protect national security and keep critical information and infrastructure secure.

Source: BAE Systems