Annual Report 2023

With over 60 years of experience in tracked vehicles, BAE Systems Hägglunds has built an enviable portfolio of combat vehicles. As a trusted supplier, we have experienced accelerated demand from European nations for vehicles and upgrades in our Swedenbased business. In recent years, Hägglunds has secured notable awards including winning Slovakia’s Infantry Fighting Vehicle competition with the CV90, the Czech Republic contract for CV90s in seven variants, a three-nation joint procurement for BvS10s for Sweden, Germany and the UK, and the US Army’s competition for its Cold Weather All-Terrain Vehicle programme with Beowulf. To deliver profitable growth while meeting this surge in demand, the Hägglunds team is maintaining focus on operational excellence. We are optimising our own manufacturing capabilities and skilled workforce, while striking the right sourcing balance through robust industrial co-operation and partnering to grow smartly, build strong margin performance, and ramp operations to fulfil our customer commitments.

We have started construction on a new ship build hall in Glasgow, Scotland, which will enable us to build two Royal Navy warships under cover simultaneously. The new facility, together with a new Applied Shipbuilding Academy, is part of a £300m investment programme which will transform the way we design and build warships on the River Clyde and create more capacity for potential future contracts.

Designed to accommodate up to 500 workers per shift, the new ship build hall will improve working conditions for our colleagues and help ensure adverse weather conditions do not impact our shipbuilding operations. It will also enable a greater level of equipment outfit, before each ship moves to the dry dock for testing, commissioning and acceptance, and will support a quicker delivery of the Type 26 frigates to the Royal Navy.

Our ERGs are important in creating an inclusive work environment where everyone feels they belong. Each is sponsored by representatives from our Executive Committee and senior sector and geographical leadership teams. We have six ERGs in the UK spanning gender, ethnicity, disability, LGBTQ+, mental health and wellbeing and our veterans. The groups feed back to leadership on issues that matter to them and offer employees a nurturing community with regular engagement. Our ERGs also raise awareness and educate those who may not directly relate to their focus area, but wish to support as an ally. In 2023, we increased overall membership of our UK ERGs by 28.5%. We also launched three ERGs in the Kingdom of Saudi Arabia focused on gender, disability and mental health and wellbeing, as well as two ERGs in Australia to support our First Nations and LGBTQ+ employees. In BAE Systems, Inc. we have continued our support through the broader Multicultural Network and achieved an 11% increase in membership of our eight US ERGs.

In 2023, significant progress was made by the Land Autonomy team in BAE Systems Australia. In partnership with the Australian Army and academia, the team demonstrated multiple M113 OCCVs operating autonomously moving into critical locations, sweeping and searching an area for targets and executing a logistics mission. The event showcased the maturity of the Trusted Autonomous Ground Vehicle for Electronic Warfare (TAGVIEW) programme, which aims to deliver mission management, sensors and software integration, and allow an autonomous vehicle to manoeuvre independently in an obstacle-filled environment.

We are collaborating with Heart Aerospace, a Swedish electric airplane maker, to define the battery system for Heart’s ES-30 regional electric airplane. The battery will be the first of its kind to be integrated into an electric conventional take-off and landing regional aircraft, allowing it to efficiently operate with zero emissions and low noise. Heart Aerospace chose us for our extensive experience in developing batteries for heavy-duty ground applications, as well as developing safety-critical control systems for aerospace.

The ES-30 aircraft will be powered by four electric motors and has an all-electric range of 200 kilometres, an extended reserve hybrid range of 400 kilometres with 30 passengers and the ability to fly up to 800 kilometres with 25 passengers.

We are partnering with our customers and academia to trial new methods to reduce our reliance on fossil fuels. In 2023, we signed the Defence Aviation Net Zero Strategy Charter and we are continuing to collaborate with the Royal Air Force (RAF) and wider armed forces in their goal to reduce carbon emissions. In January 2023, after its successful sustainable aviation fuel trial the previous year, the RAF blended the remaining sustainable aviation fuel with traditional Jet A1 products to conduct the first air-to-air refuelling sortie with a Typhoon aircraft using sustainable aviation fuel blends. Additionally, we are partnering with the Royal Navy and Rolls-Royce to trial alternative fuels in naval vessels. We aim to demonstrate a Royal Navy destroyer running on 100% Hydro-treated Vegetable Oil, significantly reducing GHG emissions with no adverse impact on performance. We are also working with Southampton and Strathclyde universities to develop hydrodynamic and on-board energy consumption improvements to reduce emissions in current warships and future designs.

BAE Systems and Malloy Aeronautics (which was acquired by the Group on 31 January 2024) have collaborated on demonstrating the heavy lift capability of the T-600 heavy lift UAS and, in 2023, announced that it had successfully carried and released a 200kg inert Sting Ray training variant torpedo during a large NATO exercise, known as REPMUS (Robotic Experimentation and Prototyping with Marine Uncrewed Systems). The success of this sea flight mission at sea demonstrates the potential and versatility of this capability.

Military training is being transformed by integration and synthetic environments. We have developed Project OdySSEy, bringing together SMEs and technical experts, such as Bohemia Interactive Simulations, with engineers in our Air sector to deliver a single synthetic environment enabling military forces in the air, land, sea, space and cyber domains to train as one.

Synthetic training is becoming increasingly important, as the modern battlespace has evolved to a position where threats are often responded to by multi-nation coalitions and training operations are now largely conducted alongside allies located around the globe. In the real world, such joint training presents an extraordinary logistical challenge, involving more time, resources and high costs as well as environmentally harmful exercises. Leveraging a digital environment provides a secure and sustainable platform for joint training exercises which nations can ‘plug-and-play’ and test the actual tactics they would deploy in a real-life situation.