Shaping the future
Build to Last

Creating infrastructure; supporting communities; enabling growth

Group highlights

The 2019 results clearly demonstrate that the benefits of the Build to Last transformation programme are accelerating. 

Underlying revenue1

£8.4bn

Number of employees

26,000

Underlying profit before tax

£200m

Directors’ valuation Investments portfolio

£1.07bn

Order book1

United Kingdom

£6.2bn

United States

£6.5bn

Hong Kong

£1.6bn

The best of Balfour Beatty

There are so many amazing things happening across Balfour Beatty. In our 110th birthday year, we asked our employees to help tell our story – by sharing their best photos of what we do and how we do it. Take a look at some of the entries from across our business showcasing our size and scale, our capabilities, our expert people, our incredible projects and our market-leading innovations.

Leo Quinn

Group Chief Executive

Five years into our Build to Last transformation programme, Balfour Beatty continues to drive a culture of transparency, risk management and relentless improvement.

Group Chief Executive's review

Our strategy: Build to Last

Launched in 2015, Build to Last is Balfour Beatty’s transformation programme to drive continuous improvement and build the Company’s future.

The Build to Last transformation is measured against four goals of Lean, Expert, Trusted and Safe, using cash flow and profit from operations, employee engagement, customer satisfaction and Zero Harm, respectively.

Launched in 2015, Build to Last is Balfour Beatty’s transformation programme to drive continuous improvement and build the Company’s future.

The Build to Last transformation is measured against four goals of Lean, Expert, Trusted and Safe, using cash flow and profit from operations, employee engagement, customer satisfaction and Zero Harm, respectively.

Lean

Deliver value to our customers by improving operational efficiency and eliminating waste right through the supply chain.

Our KPI

NET CASH

excluding non-recourse borrowings

£512m
2018: £337m

Underlying profit from operations

£221m
2018: £205m

EXPERT

Ensure we have the best engineering, construction, design and project management capabilities.

Our KPI

Employee engagement index 

66%
2018: 65%

TRUSTED

Be the construction partner of choice for our customers and supply chain by delivering on our promises.

Our KPI

Customer satisfaction average

94%
2018: 97%

SAFE

We must ensure the health and safety of everyone who comes into contact with our activities.

Our KPI

Lost time injury rate

excluding international joint ventures

0.14
2018: 0.15
  • Lean

    Deliver value to our customers by improving operational efficiency and eliminating waste right through the supply chain.

    Our KPI

    NET CASH

    excluding non-recourse borrowings

    £512m
    2018: £337m

    Underlying profit from operations

    £221m
    2018: £205m
  • EXPERT

    Ensure we have the best engineering, construction, design and project management capabilities.

    Our KPI

    Employee engagement index 

    66%
    2018: 65%
  • TRUSTED

    Be the construction partner of choice for our customers and supply chain by delivering on our promises.

    Our KPI

    Customer satisfaction average

    94%
    2018: 97%
  • SAFE

    We must ensure the health and safety of everyone who comes into contact with our activities.

    Our KPI

    Lost time injury rate

    excluding international joint ventures

    0.14
    2018: 0.15

Sustaining Build to Last

The following three sections highlight Balfour Beatty’s unique approach to developing and leveraging its capabilities. The Group is focused on adding value for all its stakeholders, driving continuous improvement and diligent processes as well as encouraging and supporting employees to develop the culture that will sustain a market-leading position.

Leading in our markets

We discuss macro trends and opportunities in our chosen markets, the way we operate and how we create value for all our stakeholders as well as the cutting edge solutions we are leveraging to meet our customers’ challenges.

  • Market review
  • Business model
  • Stakeholder value
  • Innovation

Leading in our markets

Expert capabilities

Our three operating divisions outline their key achievements throughout 2019 and how they are delivering our Build to Last strategy. We also look at our Investments portfolio in more detail.

  • Construction Services
  • Support Services
  • Infrastructure Investments
  • Directors’ valuation of the Investments portfolio

Expert capabilities

Building a positive culture

Our disciplined contracting is further strengthened by our approach to building a positive culture – our people are encouraged and supported to always do the right thing.

  • Health, safety and wellbeing
  • Our people
  • Business integrity
  • Building a sustainable business
  • Risk management

Building a positive culture

Focused on growing markets

Balfour Beatty operates in a number of carefully selected markets, based on level of opportunity and ability to outperform its competitors.

GrowingMarkets_UK.png

United Kingdom

GrowingMarkets_US.png

United States

GrowingMarkets_HK.png

Hong Kong

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.

Click on + for more information on our divisions and how we work collaboratively across the Group.

Infrastructure Investments

Our Infrastructure Investments business develops and finances both public and private infrastructure projects in the UK and the US.

It operates and maintains infrastructure projects and a portfolio of military housing and student accommodation assets.

Profitable work for delivery units
Delivery sklls support investments
Construction Services

Our Construction Services businesses operate across infrastructure and buildings markets in the UK, the US and in joint venture in Hong Kong.

Their capabilities include civil engineering, building, ground engineering, M&E, refurbishment, fit-out and rail engineering.

Cross-selling across customer base
Knowledge transfer
Support Services

Our Support Services businesses operate principally in the UK, designing, upgrading, managing and maintaining critical national infrastructure.

Their capabilities span water, gas and electricity networks, rail and highways.

Sharing the value we create

In striving to achieve our purpose of creating infrastructure, supporting communities and enabling growth, we touch the lives of many people. We strive to unlock long‑term value for each of our stakeholders.

Value_customer.png

Customers

Collaborative and long-term mutually beneficial relationships with our customers are the foundation of our success.

Value_employee.png

Employees

A talented and engaged workforce committed to upholding our values, enables us to deliver our Build to Last goals, ensuring we win the best and most exciting projects.

Value_supply.png

Supply chain and strategic partners

Our thousands of supply chain partners, large and small, are an invaluable resource fundamental to the successful delivery of all of our projects.

We also work with trusted partners in a number of long-term joint ventures which are critical to our success.

Value_community.png

Communities

Our activities can have a lasting impact on the communities in which we operate – we strive to leave a lasting legacy.

Value_government.png

Governments

Public policy, laws and regulations define the business environment in which Balfour Beatty operates. Governments – and their associated bodies – are also Balfour Beatty’s largest customer.

Value_shareholder.png

Shareholders

Shareholders are the owners of Balfour Beatty. The Board places great importance on having positive relationships with all shareholders and seeks to ensure there is an appropriate level of dialogue with them.

Stakeholder value

Sustainability highlights

Driving economic, environmental and social outcomes.

51.1%

reduction in carbon since 2010 baseline year

£0.5m

in energy savings

97.5%

waste avoided from landfill

42.3%

increase in UK STEM ambassadors

41.5

UK average Considerator Constructors Score (UK CCS)

Philip Harrison

Chief Financial Officer

The Group continues to have one of the strongest balance sheets in the sector with customers increasingly recognising this competitive advantage.

Chief Financial Officer’s review

Measuring our financial performance

The following are financial performance measures which are considered most relevant to the Group and used to manage the Group’s performance.

Continuing underlying revenue £m1

FinChart_1.png

Continuing underlying profit from operations (PFO) £m

FinChart_5.png

Continuing underlying earnings per share (BASIC) Pence

FinChart_2.png

Order book £bn1

FinChart_6.png

Statutory revenue £m

FinChart_3.png

Statutory profit for the year £m

FinChart_7.png

Statutory earnings per share (BASIC) Pence

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1 Including share of joint ventures and associates, before non-underlying items.


Financial statements

Philip Aiken AM

Group Chair

I believe that the Board has a critical role in shaping a positive culture that supports our strategic objectives and promotes strong performance that is sustainable over the long term.

Group Chair’s introduction

Group Chair’s introduction to governance

Governance highlights

The Board strives to embed a positive attitude to good governance into the Company’s culture.

Board leadership and Company purpose

Establishing the Company’s purpose, values and vision 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.

Division of responsibilities

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 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.

Committee reports

The Board has delegated authority on specific governance matters to its Committees: Nomination Committee, Audit and Risk Committee, Remuneration Committee, Safety and Sustainability Committee, Group Tender and Investment Committee and Finance and General Purposes Committee.

Directors’ report

Key statutory and regulatory disclosures are made by the Board on an annual basis to ensure compliance with all applicable requirements.

Governance

Maintaining a strong Board

The business is led by the Board of Directors, which has strong commercial experience relevant to the sector in which the Group operates, and which sets and oversees the strategic direction of the Group.

The Company’s approach to remuneration seeks to deliver a robust link between strategy, reward and performance and to ensure it is able to attract, retain and motivate key executives to deliver strong sustainable business performance.