FY22 beat consensus BAE has delivered a strong set of results across the headline numbers, with YoY growth in sales, EBITA and FCF. EPS of 55.5p is in line with our number but +3% vs. consensus on revenue of £23.3bn (1% ahead of consensus), and EBITA of £2,479m (1% ahead of consensus). The dividend is up 7.6% and the pension is still in a surplus, net debt is now at £2bn. Highlights Free cash flow is a highlight at £1.95bn vs INVe: £1.27m (+54%) and consensus of £1.25m (55% beat). Order intake a record £37bn, up over 70%. The backlog is now £59bn vs £53bn at H1. Upgrades to FCF with the three-year target for 2023-25 set at £4.5bn, a £0.5bn upgrade to each year. Outlook FY23 guidance unchanged: Sales growth 3-5%, EBIT growth 4-6%, further margin expansion (programme performance, mix, efficiency programmes), EPS growth 5-7%. The business is performing well. 2023 is set to be a good year of growth but management sees this as just the start. Valuation On a CY23E P/E of 15.7x, the shares trade on a c15% discount relative to US Defence Primes and a c25% discount on an EV/EBITDA multiple of 9x. The strength of its global and diverse portfolio, backlog and on-going uptick in overall operational performance will be of note to more international investors. Buy.