Strategic Objectives

Aim:

We expect our businesses to be one of the top three in their market sector. If they are not, they will have clear plans to acheive this goal.

Progress:

Through a number of major contract wins in the last year we have strengthened our market positions.

Key Examples:

• Sole provider of support to the Royal Navy's submarine fleet
• Largest Prime contractor for Defence Estates
• The sole distributor of Volvo equipment in South Africa
• The UK's largest provider of vocational training

Aim:

We seek to work with customers who own large strategically important assets. These customers tend to be government departments, public bodies or private companies operating in highly regulated markets.

Progress:

The majority of our revenue is derived from our preferred customer base. This is consistent with previous years.

Key Examples:

• The MoD is our largest customer in both the Marine and Defence divisions
• Network Rail, our Rail division's largest customer, owns and operates Britain's rail infrastructure
• We provide support to British Energy's fleet of AGR nuclear power stations Eskom, the South African power utility
• The Babcock Dounreay Partnership will deliver the UK's first major closure project for the NDA at Dounreay

Aim:

We seek to work collaboratively with our customers to support the long-term nature of our contracts.

Progress:

We have been awarded a number of contracts where the emphasis is on long-term partnerships rather than on short-term tasks.

Key Examples:

• Ten year Submarine Engineering Support Contract for Royal Navy's submarine fleet
• 30 year RSME training and training support contract
• Five year in-service submarine support contract for Canadian government - with option to extend to ten years

Aim:

We seek to use our skills, integrating engineering and technical expertise to deliver projects and long-term asset management.

Progress:

The majority of our employees are technically qualified and their skills are used to support our customers' strategically important assets.

Key Examples:

• 2,500 qualified engineers in our Marine and Technology division work on all aspects of the UK's submarine fleet, some of the most complex machines in the world. Work has started on HMS Vengeance's 3½ year, long overhaul period (refuel) (LOP(R))
• Babcock engineers are providing around 50% of the design input in the CVF programme CARE, developed by Networks, is a system which forecasts degradation of steel structures in the electricity transmission and other markets

Aim:

We seek to enter into contracts that fairly balance the risk and reward with our customers, so we can each share the financial effects of success or failure.

Progress:

Contracts with new customers, like the fleet management contract with Lafarge, are moving away from a cost plus to a pain/gain share basis.

Key Examples:

• Successful delivery of the following contracts will ensure maximum benefits are shared by Babcock and the MoD HMS
• Vigilant LOP(R) WSMI extension at Devonport East and South West Regional Primes

Aim:

We expect all our divisions to deliver a sector-leading safety performance. We believe all our employees and others working on or visiting our operations should be able to return home safe and well at the end of the working day.

Progress:

This year we reduced our overall RIDDOR frequency rate by 7%. At our Rosyth site RIDDOR dropped by 86%.

Key Examples:

• British Safety Council Sword of Honour - Marine
• RoSPA Gold Award - Nuclear, Airports, Networks
• British Safety Council 5 star award - Marine
• RoSPA Sector Award (facilities management) - Infrastructure Services
• British Safety Council International Award - Infrastructure Services, Networks