Annual Report PDF - Black Sun Plc

Directors’ Report: Business ReviewChief Executive’s review continuedEXECUTIVE COMMITTEE TOP TEN OBJECTIVES – 2010 PErfOrMaNCEThe Board reviews and updates the Group’s strategy annually. The Chief Executive and Executive Committee agree the Group’sStrategy, Strategic Actions and Integrated Business Plans. In addition, there are ten annual objectives agreed by the ChiefExecutive and Executive Committee with the Board which focus on specific deliverables in support of both delivery of short-termresults and the overall strategy. The specific in-year performance indicators used to measure performance against the ExecutiveCommittee’s top ten objectives are discussed below.Objective1. Meet 2010 financial targets,and set challenging andrealistic longer-term plans2. further enhanceprogramme executionthrough cost performance3. focus on our commitmentsto our customers throughschedule performance4. Progress towardsrecognised leadershipposition in responsibleBehaviour5. Grow our Electronics,Intelligence & Supportbusiness both organicallyand via acquisitions, andimprove efficiency6. Implement our global landsystems strategy, and deliveron our efficiency andrationalisation plans7. Establish in the UKsustainably profitablethrough-life businessin air, land and sea8. Grow our home markets inthe Kingdom of Saudiarabia, australia and India9. Implement our globalinitiatives10. Continue to develop ourglobal marketsFor more2010 PerformanceinformationThe Group’s targets for underlying EBITA 1 and net debt were exceeded. p36-41Programme execution has been good with the Group delivering an aggregatedimprovement in outturn margin across its major programmes.The Group has continued to deliver on its commitments to customers, delivering anaggregated improvement in schedule adherence on milestones across majorprojects.Management has continued to embed the Total Performance agenda acrossthe Group. Objectives in respect of business conduct, safety, and diversity andinclusion have been achieved.The agreed efficiency milestones were implemented and the business delivered a1.6 percentage point improvement in return on sales. Order intake growth of 7.5%was achieved. The Group acquired Atlantic Marine and OASYS Technology during theyear, and, in February 2011, completed the acquisition of L-1 Identity Solutions, Inc.’sIntelligence Services Group, a leading provider of security and counter threatcapabilities to the US government.Planned rationalisation milestones were implemented and headcount reduction isexceeding plan. The Group has continued to support the US Army’s Heavy BrigadeCombat Team – a $629m (£402m) contract to upgrade 1,700 Caiman Mine ResistantAmbush Protected (MRAP) vehicles was received, and the South African business wasawarded contracts for the manufacture and upgrade of MRAP RG31 vehicles.The Strategic Defence and Security Review has set the agenda and definedthe areas for future UK spend in security and defence. Transformation andrationalisation plans within Military Air Solutions, Surface Ships and Insyte arecontinuing to plan. In Submarine Solutions, HMS Astute was accepted by the MoDand the second boat, Ambush, was launched in January 2011. The Detica Cyber& Intelligence business delivered sales growth of 12.7%.Within the International business, like-for-like sales grew by 15.3%. In Saudi Arabia,an additional 162 Saudi nationals were recruited. In India, the land systems jointventure with Mahindra & Mahindra became operational and its first new productunveiled. The Indian Defence Acquisition Council approved an accelerated processfor the procurement of the M777 howitzer.A global Cyber & Intelligence strategy and implementation plan across theUS, UK and Australia has been issued. The Group acquired stratsec.net, anAustralian information security company, in January 2011, and announcedthe proposed acquisitions of ETI A/S and Norkom Group plc, both Cyber &Intelligence companies. A global Readiness & Sustainment plan has beendeveloped and Atlantic Marine, a US naval services and marine fabricationbusiness, was acquired in the year.Following successes in 2010 on MOKYS 2 , Hawk and Archer, the Group continuesto pursue export opportunities, including on Typhoon, Hawk and land prospects.p19p18p45-55p66-67p68-69p70-71p72-73p15p21p16for more information on the quantitativeKey Performance Indicators (KPIs) used tomeasure performance against the ExecutiveCommittee’s top ten objectivesp56for more information on the Group’s approachto risk managementp107for more information on how the ExecutiveCommittee’s top ten objectives relate tothe remuneration of executive directors1 Earnings before amortisation and impairment of intangible assets, finance costs and taxation expense (EBITA) excluding non-recurring items (see page 37).2 Mobile military communications system.12 www.baesystems.com