Annual Report and Accounts 2023
We are leading the transformation of our industry to meet the challenges of the future.
We have delivered strong operational and financial performance across the Group.
Group highlights
UNDERLYING REVENUE¹
£9,959m
NUMBER OF EMPLOYEES
26,000
UNDERLYING PROFIT BEFORE TAX
£261m
DIRECTORS’ VALUATION INVESTMENTS PORTFOLIO
£1.2bn
¹
£8.9bn
£5.6bn
£2.0bn
UNITED KINGDOM
UNITED STATES
HONG KONG
£16.5bn
GROUP ORDER BOOK
¹ Including share of joint ventures and associates, before non-underlying items.
The Group’s longer-term outlook remains positive and the growth forecast in 2025 and beyond is driven by the opportunities in the energy, transport and defence sectors in the UK and the Group’s chosen buildings sectors in the US.
Group Chief Executive
Leo Quinn
Group Chief Executive’s review
Our strategy: Build to Last
Launched in 2015, Build to Last is our strategy for continuous improvement. It is the day-to-day guide we use to uphold our purpose, and underpins everything we do.
Our strategy, Build to Last, is fundamental to how we’re building a market-leading Balfour Beatty for the next 100 years. It’s our platform for sustainable growth, productivity, inclusive talent – all ensuring the best capability to deliver on our promises and our enduring commitment to Zero Harm.
The Build to Last strategy is measured against our five values – Lean, Expert, Trusted, Safe and Sustainable.
Lean
Trusted
We create value for our customers and drive continuous improvement
We deliver on our promises and we do the right thing
Our strategy: Build to Last
Our KPIs
£842m
NET CASH (£m)
£228m
UNDERLYING PROFIT FROM OPERATIONS (£m)
2022: £815m
2022: £297m
2022: 95%
81%
95%
CUSTOMER SATISFACTION AVERAGE (%)
Our KPI
We make safety personal
We act responsibly to protect and enhance our planet and society
Safe
Sustainable
2022: 0.15
2022: 147
0.11
Our KPI
Our KPI
LOST TIME INJURY RATE
146
TOTAL SCOPE 1 & 2 EMISSIONS (tCO
excluding non-recourse borrowings
excluding international joint ventures
Building a
Opportunities in infrastructure
Balfour Beatty operates in a number of carefully selected markets, based on level of opportunity and ability to outperform its competitors.
Our chosen markets show strong underlying drivers and continue to deliver significant opportunities to the Group.
Business model
Multi-disciplinary collaboration is core to Balfour Beatty’s identity; our Construction Services, Support Services and Infrastructure Investments teams work closely together to ensure high-quality outcomes for our stakeholders.
Business model
Sharing the value we create
From shareholders and employees to customers, supply chain partners and the communities we operate in, each stakeholder group holds a vested interest in Balfour Beatty’s activities, performance or success. Their support, feedback and collaboration are vital for driving business growth and profitability but also for fostering trust and sustainability, and building a positive lasting legacy.
Collaborative and long-term mutually beneficial relationships with our customers are the foundation of our success.
Talented and engaged employees committed to upholding our values enable us to deliver on our Build to Last strategy ensuring we win, and expertly deliver the best and most exciting projects whilst continuing to build a great place to work.
The thousands of supply chain partners we work with across the UK, US and Hong Kong play an instrumental role in our success and in improving and enhancing best practice across our industry.
Supply chain and strategic partners
Our activities can have a lasting impact on the communities in which we operate – we strive to leave a positive legacy.
Governments set the policy and legislative context in which we operate and are also valued customers across all of our chosen geographies.
Our shareholders, as owners of the Company, are a critical stakeholder for the Group.
Stakeholder value
Balfour Beatty prides itself on being a responsible, sustainable organisation that delivers long-term benefits for the business, society and the environment creating positive returns for all of the Group’s stakeholders.
Sustainability highlights
Sustainability
The Group’s reliability and resilience has again delivered a solid performance, with increased revenue and profit from our earnings-based businesses and strong operating cash flow.
Chief Financial Officer’s review
Our financial performance measures below are considered most relevant to the Group and used to manage the Group’s performance.
Measuring financial performance
2019
2020
2021
2022
8,405
8,587
2019
2020
2021
2022
UNDERLYING PROFIT FROM OPERATIONS (PFO) £m
2019
2020
2021
2022
29.7
26.7
3.7
UNDERLYING EARNINGS PER SHARE (BASIC) Pence
UNDERLYING REVENUE¹ £m
2019
2020
2021
2022
ORDER BOOK¹ £bn
2019
2020
2021
2022
7,629
7,320
7,185
STATUTORY REVENUE £m
2019
2020
2021
2022
9.0
2.1
1.5
DIVIDENDS PER SHARE Pence
2019
2020
2021
2022
STATUTORY PROFIT FOR THE YEAR £m
2019
2020
2021
2022
21.3
19.0
4.4
STATUTORY EARNINGS PER SHARE
(BASIC)
Pence
Balfour Beatty is well-positioned for sustained success, and we look forward to the exciting prospects that await us as we move further in to 2024 and beyond.
Governance
Group Chair introduction
Governance
Promoting the long-term, sustainable success of the Company.
Establishing the Company’s purpose, values and behaviour supports the Board’s active promotion of a positive culture. Consideration of stakeholder interests is a key cornerstone of the Board’s decision-making process.
Processes and procedures are in place to ensure that there is an appropriate balance of Board members who are sufficiently supported and have the necessary skills, experience and independence to discharge their duties as Directors.
The Board is the principal
decision-making body of the Company and each Director has specific responsibilities depending on their individual role. The
day-to-day operation of the Group is formally delegated by the Board to the Group Chief Executive.
Board leadership and Company purpose
Key statutory and regulatory disclosures are made by the Board on an annual basis to ensure compliance with all applicable requirements.
The Board has delegated authority on specific governance matters to its Committees:
Directors’ report
Committee reports
Division of responsibilities
Composition, succession and evaluation
Governance
Maintaining a strong Board
Board of Directors
Remuneration
LTIR
How our Group works together
Building New Futures
¹ Including share of joint ventures and associates, before non-underlying items.
Financial statements
Our approach to remuneration continues to deliver a robust link between strategy, reward and performance, supporting Balfour Beatty’s drive to deliver profitable managed growth and sustainable cash generation.
The Directors have skills and experience relevant to the sector in which the Group operates in order to effectively set the strategic direction and purpose of the Group.
2
) 000s
Download the full report
Downloads centre
This is an interactive version of Balfour Beatty plc’s 2023 Annual Report and Accounts. The content herein should be read in conjunction with and with reference to the printed version, which is available to download.
All content copyright 2023
Balfour Beatty plc.
All rights reserved
Designed by Balfour Beatty
Disclaimer
Privacy
Legal
Terms of use
Accessibility
Strategic report
Governance
Financial statements
Investors
Non-executive Director, Group Chair
Charles Allen, Lord Allen of Kensington, CBE
Chief Financial Officer
Philip Harrison
infrastructure
investments (II)
A proven track record of developing and financing projects.
CONSTRUCTION
SERVICES (CS)
We manage strong construction businesses in the UK, US and
Hong Kong.
Knowledge transfer
Delivery skills support investment opportunities
Profitable work for construction business
Cross-selling across customer base
SUPPORT
SERVICES (SS)
We maintain, upgrade and manage vital services across
the power transmission, distribution, utilities, road
and rail sectors.
The infrastructure market outlook is positive and is boosted by the Infrastructure and Projects Authority’s £650bn pipeline, providing the highest levels of investment in decades.
Positive outlook for the UK
650bn
UK
£
Driven by the US$1.2 trillion Infrastructure Investment & Jobs Act, infrastructure growth in the US will experience a significant boost in
Balfour Beatty’s chosen states.
Strong infrastructure stimulus in the US
1.2tn
US
$
The outlook is positive, supported by the Government’s plan to increase land supply, speed up railway development projects and rehabilitate the city’s ageing buildings.
Stable spend in Hong Kong
HK
$
1tn
HS2 high-speed railway line, UK
How do we...
Balfour Beatty is dedicated to minimising its environmental impact and enhancing biodiversity, with a focus on protecting natural environments to support climate stability.
Find out more
Midtown Atlanta developments, US
Talented
Experts
How do we...
Balfour Beatty’s people strategy is focused on making sure we have the right people, culture, policies and systems to foster a sustainable business performance.
Find out more
M+ Museum, Hong Kong
Balfour Beatty is using data, AI and digital technologies to improve safety, productivity and assurance.
Find out more
Digital transformation
How do we...
Find out more about our infrastructure expertise...
Our highly skilled colleagues and partners set us apart
Expert
2022: 80%
Our KPI
EMPLOYEE ENGAGEMENT INDEX (%)
Download centre
Governance
Group Chair's introduction
Measuring financial performance
Chief Financial Officer's review
Sustainability highlights
Sharing the value we create
Business model
Infrastructure expertise
Our strategy: Build to Last
Group Chief Executive's review
Group highlights
Home
8,280
Market review
We are leading the transformation of our industry to meet the challenges of the future.
Annual Report and Accounts 2023
Balfour Beatty has delivered strong operational and financial performance across the Group.
UNDERLYING REVENUE¹
UNITED KINGDOM
UNITED STATES
HONG KONG
Group highlights
£9,959m
NUMBER OF EMPLOYEES
26,000
UNDERLYING PROFIT BEFORE TAX
¹ Including share of joint ventures and associates, before non-underlying items.
£261m
£8.9bn
£5.6bn
£2.0bn
DIRECTORS’ VALUATION INVESTMENTS PORTFOLIO
£1.2bn
GROUP ORDER BOOK
The Group’s longer-term outlook remains positive and the growth forecast in 2025 and beyond is driven by the opportunities in the energy, transport and defence sectors in the UK and the Group’s chosen buildings sectors in the US.
Group Chief Executive
Leo Quinn
Group Chief Executive’s review
Launched in 2015, Build to Last is our strategy for continuous improvement. It is the day-to-day guide we use to uphold our purpose, and underpins everything we do.
Our strategy, Build to Last, is fundamental to how we’re building a market-leading Balfour Beatty for the next 100 years. It’s our platform for sustainable growth, productivity, inclusive talent – all ensuring the best capability to deliver on our promises and our enduring commitment to Zero Harm.
The Build to Last strategy is measured against our five values – Lean, Expert, Trusted, Safe and Sustainable.
We create value for our customers and drive continuous improvement
excluding non-recourse borrowings
excluding international joint ventures
2022: £815m
2022: £297m
2022: 80%
We deliver on our promises and we do the right thing
Our strategy: Build to Last
Lean
Trusted
£842m
Our KPIs
NET CASH (£m)
Our highly skilled colleagues and partners set us apart
Expert
Our KPI
EMPLOYEE ENGAGEMENT INDEX (%)
£228m
UNDERLYING PROFIT FROM CONTINUING OPERATIONS (£m)
2022: 95%
81%
Our KPI
95%
CUSTOMER SATISFACTION AVERAGE (%)
We make safety personal
We act responsibly to protect and enhance our planet and society
Safe
Sustainable
2022: 0.15
2022: 147
0.11
LTIR
Our KPI
Our KPI
LOST TIME INJURY RATE
146
TOTAL SCOPE 1 & 2 EMISSIONS
000s
2
Our strategy: Build to Last
Balfour Beatty is using data, AI and digital technologies to improve safety, productivity and assurance.
Find out more
Balfour Beatty is dedicated to minimising its environmental impact and enhancing biodiversity, with a focus on protecting natural environments to support climate stability.
Opportunities in infrastructure
Driven by the US$1.2 trillion Infrastructure Investment & Jobs Act, infrastructure growth in the US will experience a significant boost in
Balfour Beatty’s chosen states.
Strong infrastructure stimulus in the US
1.2tn
US
$
The outlook is positive, supported by the Government’s plan to increase land supply, speed up railway development projects and rehabilitate the city’s ageing buildings.
Stable spend in Hong Kong
240bn
HK
$
Multi-disciplinary collaboration is core to Balfour Beatty’s identity; our Construction Services, Support Services and Infrastructure Investments teams work closely together to ensure high-quality outcomes for our stakeholders.
How our Group works together
Business model
Business model
SUPPORT
SERVICES (SS)
We maintain, upgrade and manage vital services across
the power transmission, distribution, utilities, road
and rail sectors.
Cross-selling across customer base
Knowledge transfer
CONSTRUCTION
SERVICES (CS)
We manage strong construction businesses in the UK, US and
Hong Kong
Profitable work for construction business
Delivery skills support investment opportunities
infrastructure
investments (II)
A proven track record of developing and financing projects.
Los Angeles International Airport (LAX) Automated People Mover, US
Balfour Beatty and its joint venture partners in LAX Integrated Express Solutions (LINXS) are responsible for the design, build, finance, operation and maintenance of the LAX Automated People Mover project. To construct this 2.25-mile above-ground airport transport system connecting passengers with the airline terminals, LINXS is utilising expert capabilities from its US construction businesses with the financial expertise of Balfour Beatty Investments.
M25, UK
In 2009, Balfour Beatty, with its joint venture partners, was awarded the design, build, finance and operate contract for the M25, and has subsequently upgraded, widened and enhanced sections of the London orbital motorway. The Group continues to operate and maintain the M25 through its stake in Connect Plus Services.
Hinkley Point C, Somerset, UK
Delivering the UK’s first nuclear power station in a generation has drawn on a breadth of capabilities from across the UK business. Construction Services is carrying out the tunnelling and maritime works package, plus the mechanical and electrical works through the MEH Alliance. Support Services is delivering the 48km, 400kV overhead line connection project on behalf of National Grid.
From shareholders and employees to customers, supply chain partners and the communities we operate in, each stakeholder group holds a vested interest in Balfour Beatty’s activities, performance or success. Their support, feedback and collaboration are vital for driving business growth and profitability but also for fostering trust and sustainability, and building a positive lasting legacy.
Sharing the value we create
Stakeholder value
The Group’s reliability and resilience has again delivered a solid performance, with increased revenue and profit from our earnings-based businesses and strong operating cash flow.
Chief Financial Officer’s review
Chief Financial Officer
Philip Harrison
¹ Including share of joint ventures and associates, before non-underlying items
The following are financial performance measures which are considered most relevant to the Group and used to manage the Group’s performance.
Measuring financial performance
Financial statements
Enhancing
biodiversity
Nomination Committee
Safety and Sustainability Committee
Audit and Risk Committee Remuneration Committee
•
•
•
•
Balfour Beatty is well-positioned for sustained success, and we look forward to the exciting prospects that await us as we move further in to 2024 and beyond.
Governance
Group Chair introduction
Group Chair
Charles Allen, Lord Allen of Kensington, CBE
Governance
Promoting the long-term, sustainable success of the Company.
Establishing the Company’s purpose, values and behaviour supports the Board’s active promotion of a positive culture. Consideration of stakeholder interests is a key cornerstone of the Board’s decision-making process.
Board leadership and Company purpose
Directors’ report
Committee reports
Division of responsibilities
Composition, succession and evaluation
Processes and procedures are in place to ensure that there is an appropriate balance of Board members who are sufficiently supported and have the necessary skills, experience and independence to discharge their duties as Directors.
The Board is the principal decision-making body of the Company and each Director has specific responsibilities depending on their individual role. The day-to-day operation of the Group is formally delegated by the Board to the Group Chief Executive.
Key statutory and regulatory disclosures are made by the Board on an annual basis to ensure compliance with all applicable requirements.
The Board has delegated authority on specific governance matters to its Committees:
Governance
The Directors have skills and experience relevant to the sector in which the Group operates in order to effectively set the strategic direction and purpose of the Group.
Our approach to remuneration continues to deliver a robust link between strategy, reward and performance, supporting Balfour Beatty’s drive to deliver profitable managed growth and sustainable cash generation.
Maintaining a strong Board
Remuneration
Board of Directors
Downloads centre
Download the full report
Governance
Strategic report
Financial statements
Investors
This is an interactive version of Balfour Beatty plc’s 2023 Annual Report and Accounts. The content herein should be read in conjunction with and with reference to the printed version, which is available to download.
All content copyright 2023
Balfour Beatty plc.
All rights reserved
Designed by Balfour Beatty
Disclaimer
Privacy
Terms of use
Accessibility
Legal
Download centre
Governance highlights
Group Chair's introduction
Measuring financial performance
Chief Financial Officer's review
Sustainability highlights
Sharing the value we create
Business model
Infrastructure expertise
Our strategy: Build to Last
Group Chief Executive's review
Group highlights
Home
2019
2020
2021
2022
418
STATUTORY NET CASH/ (BORROWINGS) £m
2019
2020
2021
2022
790
512
NET CASH £m
139
(20)
¹https://worldgbc.org/article/bringing-embodied-carbon-upfront/
8,931
2023
2023
47.5
37.3
2023
16.5
10.5
2023
7,993
2023
842
2023
435
2023
194
2023
35.3
2023
2023
Performance measures
Statutory measures
It has given me great pleasure to experience first-hand the realities of Balfour Beatty life on the ground and witness its employees living and breathing the Group’s culture and values.
Find out more about our infrastructure expertise...
Find out more about our infrastructure expertise.
At the beating heart of society
Look out for this icon in the report to meet some of our experts and learn about the vital work they do to leave a positive, lasting legacy in the communities where we work.
Photo credit: Los Angeles International Airport
Hinkley Point C, Somerset, UK
Delivering the UK’s first nuclear power station in a generation has drawn on a breadth of capabilities from across the UK business. Construction Services is carrying out the tunnelling and maritime works package, plus the mechanical and electrical works through the MEH Alliance. Support Services is delivering the 48km, 400kV overhead line connection project on behalf of National Grid.
Los Angeles International Airport (LAX) Automated People Mover, US
Balfour Beatty and its joint venture partners in LAX Integrated Express Solutions (LINXS) are responsible for the design, build, finance, operation and maintenance of the LAX Automated People Mover project. To construct this 2.25-mile above-ground airport transport system connecting passengers with the airline terminals, LINXS is utilising expert capabilities from its US construction businesses with the financial expertise of Balfour Beatty Investments.
Littlebrook substation, Kent, UK
As part of National Grid’s transformation programme, Balfour Beatty is replacing the high-voltage Littlebrook substation to ensure power supply in the Southeast for years to come. This project combines multiple aspects of the Group’s capabilities, including ground engineering, construction, steel fabrication, M&E, cabling and overhead line connections.
M25, UK
In 2009, Balfour Beatty, with its joint venture partners, was awarded the design, build, finance and operate contract for the M25, and has subsequently upgraded, widened and enhanced sections of the London orbital motorway. The Group continues to operate and maintain the M25 through its stake in Connect Plus Services.
1
At the beating heart of society
Look out for this icon in the report to meet some of our experts and learn about the vital work they do to leave a positive, lasting legacy in the communities where we work.
Littlebrook substation, Kent, UK
As part of National Grid’s transformation programme, Balfour Beatty is replacing the
high-voltage Littlebrook substation to ensure power supply in the Southeast for years to come. This project combines multiple aspects of the Group’s capabilities, including ground engineering, construction, steel fabrication, M&E, cabling and overhead line connections.
Balfour Beatty prides itself on being a responsible, sustainable organisation that delivers long-term benefits for the business, society and the environment creating positive returns for all of the Group’s stakeholders.
Sustainability highlights
Sustainability
2023 Annual Reports and Accounts
At the beating heart of society
At the beating heart of society
AT THE BEATING HEART
tCO
e/£m
22.4
2
CUSTOMERS
EMPLOYEES
SUPPLY CHAIN AND STRATEGIC PARTNERS
COMMUNITIES
GOVERNMENTS
SHAREHOLDERS
View our sustainability strategy and best case studies
9,595
221
51
197
279
228
29.7
14.3
16.4
16.1
17.4
581
790
815
441
7,313
133
30
139
287
46.9
11.5
Watch our digital video
Balfour Beatty prides itself on being a responsible, sustainable organisation that delivers long-term benefits for the business, society and the environment creating positive returns for all of the Group’s stakeholders.
Sustainability highlights
2%
40%
social value generated in the UK
reduction in UK waste intensity
reduction in absolute carbon emissions across the UK and US
£937m
of UK workforce in earn and learn positions
7.4%
spent with UK SMEs and local businesses
1.4bn+
spent with UK local suppliers
£950m+
charitable donations in the UK
£398m+
Find out more about our strategy and read our case studies visit –
Sustainability
in CO emissions
(absolute market-based emissions)
2
2% reduction
in UK waste intensity
40% reduction
(tonnage of waste per £million of revenue)
in UK social value
15% increase
(FY23 performance compared to FY2022)
in earn and learn positions
7.4% of UK workforce
*FY23 performance compared to FY2022
2023 Annual Report and Accounts
(tCO
Talented
Experts
Watch our digital video
View our sustainability strategy and best case studies
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
8,280
8,405
8,587
8,931
2019
2020
2021
2022
2023
16.5
2019
2020
2021
2022
2023
37.3
47.5
2019
2020
2021
2022
2023
418
435
(20)
139
STATUTORY NET CASH/ (BORROWINGS) £m
2019
2020
2021
2022
2023
790
842
512
NET CASH £m
2019
2020
2021
2022
2023
194
2019
2020
2021
2022
2023
7,629
7,993
7,320
7,185
2019
2020
2021
2022
2023
9.0
10.5
2.1
1.5
2019
2020
2021
2022
2023
35.3
)
AT THE BEATING HEART
Business model
Find out more
