H1 expectations materially beaten BAE delivered interim orders, sales, EBIT, EPS & FCF all up and above consensus expectations. The order backlog increased to £66bn with £21bn of orders in H1 (vs. £18bn in H1 22). This continues to enhance visibility. Sales increased by 11% at constant currency to £12.0bn (consensus £11.2bn). Adj EBIT £1.23bn (+7% vs cons); Adj EPS 29.6p (+12.5% vs cons). FCF £1.07bn vs. consensus of £741m. H1 dividend increased by 11% and a further £1.5bn buyback over 3 years, to start after completion of current programme. All sectors growing well and Dreadnought funding acceleration the major growth driver for Maritime. FCF driven by receipt of advances on contract awards mainly in Air. Upgraded guidance Sales growth guidance is increased by 200bps from 5% to 7%, reflecting the accelerated spend profile on the Dreadnought programme, good demand and operational performance across all sectors. Underlying EPS guidance range is increased by 500bps from 5% - 7% to 10% - 12%, reflecting higher profit, higher interest income and a reduction in the expected tax rate to 19%. In-year free cash guidance increased by £600m to >£1.8bn. Valuation On existing estimates, a CY24E EV/EBITDA of 8.8x is a 30% discount to US peers.