Babcock International Group (BAB) investor relations material

Strategic vision and market positioning

• Marine is a core sector with significant international exposure, contributing about one-third of group revenue in FY25 and accelerating its global footprint through sovereign naval capability demand and export opportunities.

• Focus is on design/build and support activities, representing $900M in revenue and about 20% of group total, identified as engines of growth and strategic investment.

• The sector has transformed into a world-class naval build and support business, with the Type 31 program and Arrowhead 140 platform as catalysts for export and in-country build support.

• International partnerships and local alliances (e.g., Saab, OMT, PGZ) are central to expanding market reach and unlocking new opportunities.

• Marine's business model is built on world-class technical capabilities, full lifecycle support, and strong customer relationships, creating high barriers to entry and a competitive edge.

Growth strategy and financial guidance

• The pipeline exceeds £22B, with a disciplined focus on high-probability, high-impact opportunities, including over £17bn in design/build and £5bn in long-term support to be decided over three years.

• Five major design/build programs in four geographies (Sweden, Denmark, New Zealand, UK) are being pursued, with each potentially delivering £150M–£200M in annual revenue; winning two could add £250M–£350M per year.

• Revenues from design and build are expected to double to £500–£600m by FY30, with upside from further licence sales and engineering support.

• Advanced manufacturing, especially missile tube assemblies for UK/US nuclear submarines, is a growth pillar, with over £2B in opportunities over the next decade and an 80% market share.

• Margin guidance targets 9%+ in the medium term, with improvement driven by operational efficiency, digital transformation, and a shift to higher-margin contracts as legacy Type 31 revenues roll off by 2030.

Operational excellence and digital transformation

• Significant investment in Rosyth has created a modern, digitized shipbuilding facility with modular construction, automation, and real-time production tracking.

• Digital tools, AI-driven planning, and predictive maintenance are embedded in operations, enabling faster innovation, reduced risk, and improved quality.

• Workforce development is prioritized, with over 200 apprentices and a commitment to at least 100 new starts annually, ensuring a sustainable talent pipeline.

• Partnerships with universities and technology firms (e.g., Palantir, Strathclyde University) support ongoing innovation in automation and data analytics.

• Strategic partnerships and a skilled workforce of over 1,700 drive innovation and delivery across global markets.