Revenue for our Defence & Public Security (DPS) segment grew 6% y-o-y to $4.3b from $4.0b with contribution from all its sub-segments: Digital Systems & Cyber, Defence Aerospace, Land Systems and Marine. The segment EBIT was down 13% y-o-y to $405m from $466m in the absence of $51m government support received in the prior year and a $23m impact from energy inflation. If these factors were excluded, DPS EBIT would be 3% stronger y-o-y. Geopolitical conflicts have increased the importance of national security and defence, leading many countries to expand their defence budgets. This translates into greater export opportunities for our International Defence business. We have identified opportunities that are compatible with our flagship platforms and solutions, including the Bronco All Terrain Tracked Carrier and its commercial variant, ExtremV that is designed for humanitarian assistance and disaster relief missions. The defence business pipeline has a long gestation period though, and it will take several years before these efforts show results. One of our multi-year business development efforts did bear fruit in the Middle East. In 2022, we formed a notable defence partnership with Saudi Arabian Military Industries, consistent with our go-to-market approach of tapping on local defence champions to deliver differentiated defence solutions. Concurrently, we also won a set of new defence contracts worth over $300m from a customer in the Middle East. Meanwhile, the Falaj 3-class Offshore Patrol Vessels project in UAE that we secured in 2021 is tracking well and has progressed to the Critical Design Review phase. In previous annual reports, we mentioned that, together with Oshkosh Defense, we were bidding to produce the ColdWeather All-Terrain Vehicle for the U.S. Army. Unfortunately, we were not successful in this bid despite delivering a competitive platform which met all technical and performance requirements. This experience, though, has been a valuable one, and we will learn from this and strive to make better inroads in this market segment. On our Digital business, we continue to build up our core competencies in operational technology and cybersecurity to help governments and enterprises strengthen their security and protect their critical operating systems and data from evolving and complex threats. Digital business comprising Cloud, AI Analytics and Cyber businesses achieved a revenue of $385m in 2022, or more than doubled the revenue in 2020, on track to well exceed its 2026 target of $500m. Our business updates and outlook are covered in the Operating Review and Outlook section on pages 28 to 51. OPERATING MORE EFFICIENTLY We reduced our unit operating expenses (per unit revenue)1 to 11.7% in 2022 from 12.0% in 2021, and from 12.2% recorded in 2019 before the pandemic. We achieved this because of the Group’s continued structural cost and operational efficiency capture, notwithstanding general inflationary pressure. Capex in 2022 was about $760m, with a large part spent on supporting our Aviation Asset Management business for which we have near-term plans to securitise and recycle capital. Other portions of the capex went into supporting businesses across the Group, including the construction of new hangars. On a base operating performance basis, Group PBT and Group Net Profit each grew by close to 40%, on the back of cost saving initiatives and business growth. 1 Excludes M&As transaction expenses CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT 09
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