BAE Systems said it delivered a strong set of results for 2020, against a challenging backdrop.
Sales for the period were £20.862bn, compared with £20.109bn, while profits were £1.371bn, down from £1.532bn.
Net debt increased to £2.718bn following the £1bn bond issuance to fund the UK pension scheme, and the £1.7bn acquisitions of the Airborne Tactical Radios and Military Global Positioning System businesses.
The order book currently stands at £36.3bn, against £37.2bn in 2019.
The group operates factories in Warton and Salmesbury, near Preston, building military aircraft, and a submarine building facility in Barrow. It employs around 15,000 staff in Lancashire and Cumbria.
Chief executive, Charles Woodburn, said: “Thanks to the outstanding efforts of our employees and close cooperation with our customers, suppliers and trades unions, we have delivered a strong set of results against a challenging backdrop of the global pandemic.
“Throughout 2020, we focused on keeping our people safe and supporting our communities, whilst continuing to deliver for our customers.
“In 2021, we will continue to drive operational performance, progress our sustainability agenda and invest in high-end discriminating technologies to meet our customers’ priorities, which will ensure we are well positioned to grow the business and contribute to the economic prosperity of the countries in which we operate.”
Looking ahead to 2021, the group said it anticipates a year of top line growth, with a year of margin expansion and good cash flow.
Group sales are expected to grow in the three per cent to five per cent range.
Sales growth is expected in Air and Electronic Systems, including the full year impact of the acquisitions, partially offset by continued weakness in commercial aerospace revenues. Approximately 80% of expected sales is already in order backlog.
Free cash flow for 2021 is anticipated to be in excess of £1bn, with a three-year target for 2021 to 2023 in excess of £4bn.