Aim:

We expect our business 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:

During the year we have consolidated our leading position in all our divisions through acquisitions and major contract wins.

Key Examples:

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

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

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
• WSMI contracts to provide naval base and water front support at Devonport and Faslane to 2013
• 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:

• The refit of HMS Victorious required 2.2 million skilled engineering man hours
• WSMI contracts to provide naval base and water front support at Devonport and Faslane to 2013
• 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:

The Terms of Business Agreement (ToBA) being negotiated with the MoD will move all naval support contracts 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:

During 2008/09 we reduced our RIDDOR frequency rate by 13%. Over two years this has reduced by 49%.

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