Profit and Performance

The efficiencies we deliver through effective contract management, innovation and through life management enable us to return value to our customers, our colleagues and our investors.

We buy a wide range of goods and services and need reliable, high performing suppliers across all aspects of our supply chain. Babcock seeks to ensure that our customers’ money is spent efficiently and responsibly and that our supply contracts are managed effectively. We expect our supply chain to adhere to our standards of ethical behaviour, and our environmental, health and safety and other working practices.


Profit is largely delivered through our ability to manage our operations effectively. A significant part of this is driven through our relationships with suppliers. Over 50% of our cost base is via third party suppliers and our approach and ability to manage these relationships impact our ability to deliver performance and margin.


Building long term relationships

We are always looking for better, innovative ways of serving our customers. Our responsibility is to provide them with the best options to ensure success. When we identify a more efficient way of servicing their requirements we discuss these options and work in collaboration with the customer to bring efficiency benefits while delivering a quality service.


We believe that establishing long term relationships with our suppliers is an important part of building long term relationships with our customers. As part of a structured programme across business units and Group categories, the procurement and supply chain function is raising commercial capability by engaging in supplier relationship management programmes with strategic suppliers.

Delivering business critical support using high performing, ethical suppliers

Our customers rely on our ability to provide a robust and effective supply chain. We take this responsibility very seriously and work in collaboration with other industry leaders to create a process that optimises risk management while encouraging the use of SMEs. Potential suppliers must demonstrate their financial, commercial and technical capability to meet our contractual requirements. We also look for a clear demonstration of commitment to corporate social responsibility.

Supporting local economies by using diverse, locally procured services

We take our responsibility to support local economies seriously. The varied nature of what we do means that we depend on a wide range of talents and abilities from a wide range of suppliers. As part of our supplier programme, we have been managing compliance through a system of preferred suppliers. This approach is enhancing our supplier relationships and allows us to focus on effective management of our SME supplier base.

Critical supply partner for through life support

Joint teams from Babcock and our supply chain engage on a wide range of issues such as maintenance planning, supply support, support and test equipment, training and training devices, and technical data. Targeted supply relationships use data dashboards to monitor performance and progress. Babcock is actively involved with our suppliers in the Aerospace, Defence and Security Supply Chain development programme.

Download the Profit and performance section of the Annual Report for further detail.