Sales rose to £19bn, up from £17.9bn in 2015.
BAE Systems employs around 13,000 people in its Military Air & Information business across 30 locations, including Warton and Samlesbury and at Brough, RAF Coningsby and RAF Marham in the East of England.
Chris Boardman, Managing Director at Military Air & information, said: “We made good progress in 2016 thanks to the dedication of our highly skilled workforce. We achieved key targets on Typhoon and F-35 Lightning II production, long-term support arrangements on Typhoon, F-35 Lightning II and Hawk and an agreement between the UK and French Governments to progress the new unmanned combat air systems demonstrator programme.
“The recent heads of agreement signed with Turkish Aerospace Industries, ahead of a planned contract to collaborate on the first design and development phase of an indigenous fifth-generation fighter jet, further helps to support critical skills, technology and technical expertise to the benefit of our business and the wider economy.”
Highlights of 2016 include:
The UK and French Governments announced a €2bn (£1.7bn) programme to build operationally representative unmanned combat air system demonstrators following a successful joint feasibility study.
A ten-year partnership arrangement with the UK Ministry of Defence (MOD) to support the UK Typhoon fleet, expected to be worth at least £2.1bn, was signed in July.
The Eurofighter Typhoon’s capabilities continue to be enhanced with the ongoing integration of the Captor E-Scan radar and the Storm Shadow, Meteor and Brimstone 2 missiles as part of European capability delivery programmes.
Ian King, Chief Executive, said: “2016 was a good year for BAE Systems. Our strategy is well defined; we have a large order backlog, long-term programme positions, strong programme execution and a well-balanced portfolio.
“With an improved outlook for defence budgets in a number of our markets, we are well placed to continue to generate attractive returns for shareholders.”