Annual Report PDF - Black Sun Plc

Directors’ Report: Business ReviewKey Performance Indicators (KPIs)The Board uses a range of quantitativefinancial and non-financial performanceindicators, reported on a periodic basis,to monitor the Group’s performanceagainst its Total Performance andExecutive Committee top tenobjectives. Executive directors’remuneration is linked to certain ofthese measures. The specific in-yearperformance indicators used tomeasure performance against theExecutive Committee’s top tenobjectives are discussed on page 12.Financial PerformanceThe Group sets itself challenging financial targets through the Integrated Business Planningprocess.Link to 2010Executive Committeetop ten objectivesp12Link to executive directors’2010 annual incentive p107Link to principal risksp581. Meet 2010 financial targets; 5. Grow our Electronics, Intelligence& Support business; 6. Implement our global land systems strategy;7. Establish in the UK sustainably profitable through-life businessin air, land and sea; 8. Grow our home markets in the Kingdom ofSaudi Arabia, Australia and India; 9. Implement our global initiatives;10. Continue to develop our global marketsGroup Earnings per Share, Group cashAll of the Group's principal risks could materially impact itsFinancial PerformanceORDER INTAKE 1,2 (£BN)SALES 1,2 (£BN)Performance252520151015.520.9 20.8 21.716.420151013.415.418.122.0 22.4550060708091000607080910£16.4bn £22.4bn +1.8%2009: £21.7bn 1 2009: £22.0bn 1DefinitionOrder intake 2 represents the value of fundedorders received from customers in the year.It is a measure of in-year performance andsupports future years’ sales performance.Sales 2 represents the amounts derived fromthe provision of goods and services, andincludes the Group’s share of sales of itsequity accounted investments.CommentThe reduction in order intake 2 reflects thesignificant awards received in 2009 for long-termproduction of Typhoon Tranche 3A aircraft, andsupport for Typhoon, Harrier, Type 45, andSpearfish and Sting Ray torpedoes.A 1.9% like-for-like decrease in sales 2 this yearhas primarily been driven by the expected lowerlevel of US land vehicle sales in the Land &Armaments business, which was largely offsetby increased Typhoon deliveries and supportactivities in the Kingdom of Saudi Arabia.All Financial Performance KPIs, with the exception of operating business cash flow, reflect results from the Group’s continuingoperations.1 Restated following the sale of half of the Group’s 20.5% shareholding in Saab AB and subsequent classification as adiscontinued operation.2 Including share of equity accounted investments.3 Earnings before amortisation and impairment of intangible assets, finance costs and taxation expense (EBITA) excludingnon-recurring items (see page 37).4 Earnings excluding amortisation and impairment of intangible assets, non-cash finance movements on pensions andfinancial derivatives, and non-recurring items (see note 10 to the Group accounts).5 Net cash inflow from operating activities after capital expenditure (net) and financial investment, dividends from equityaccounted investments, and assets contributed to Trust.6 The target is the Group's budget for the year, which represents the first year of the five-year Integrated Business Plan(see page 15).16 www.baesystems.com