Strong momentum The business is performing strongly – over the last 3 years, it has delivered 20% sales growth, orderbook growth of 50%, margin expansion of 80 bps, delivered over 100% cash conversion and returned £4.2bn to shareholders. BAE has delivered FY adj EPS of 63.2p representing 14% growth and slightly (1%) above consensus. Sales was 2% above consensus. Sales growth was led by Maritime which grew 22%. RoS was flat as very high maritime sales at regulated profit rates diluted RoS. FCF is the standout at £2.6bn - £0.8bn or 41% above consensus due to increased advances & good cash management. The underlying is probably c.£0.3bn better from good performance and new orders. Moreover, order intake is even higher than last year - a record £38bn – the Backlog is now £69.8bn (up £10.9bn). Strategic progress has been strong with AUKUS, GCAP and the Ball Aerospace acquisition (c70% space exposure). Dividend up 11% - final dividend 18.5p (30p in total for year). Outlook FY24 is set to be a strong year of growth, but is seen as just the start of a long cycle. FY24 EPS growth of 6-8% on sales growth of 10-12% – higher tax charge 21% vs 19%, Air Astana 1% dilutive, Ball Aerospace looks likely to be accretive from FY25 onwards - £500m of buybacks modelled. FCF in excess of £1.3bn FY24 guidance includes the 10/12ths impact of Ball Aerospace and Air Astana partial disposal (proceeds NOT in the FCF guide) Valuation Valuation (pre Ball): CY24E EV/EBITDA 10.9x and DY 2.3%. The strength of its global and diverse portfolio, backlog and on-going uptick in overall performance will be of note to more international investors. Buy, TP placed under review (from 1200p).