
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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GROUP CHIEF EXECUTIVE’S REVIEW CONTINUED
Looking ahead to further growth
continued
@ UK energy: The essential long‑term upgrade to
the UK’s energy infrastructure is well underway,
driving improvement in energy security and
facilitating the energy transition, with significant
and timely investment in both generation and
network infrastructure necessary to meet the
Government’s net zero targets. Balfour Beatty
is heavily involved in projects such as the new
Hinkley Point C nuclear power station and Net
Zero Teesside and across the UK with its
market‑leading power transmission and
distribution capability.
@ US buildings: Balfour Beatty’s buildings
operations are focused primarily on specific,
high growth regions, with construction spending
in the Group’s chosen states projected to grow
7% per year to 2029, ahead of the national
average. There are encouraging trends in the
division’s specialist industries, with increased
investment in government buildings, higher
residential construction, and booming data
centre demand. The Group has also seen
encouraging results from its organic growth
strategy, securing increased orders in sectors
such as education, aviation and hospitality, as
aresult of further geographic diversification.
@ UK defence: Government plans to strengthen
national security and modernise defence
infrastructure are bringing material opportunities
to market, with these schemes increasingly
requiring contractors with high‑security experience
and end‑to‑end capabilities. Balfour Beatty’s
capabilities and credentials, including its experiences
in civil nuclear construction, are well matched
to these requirements and in 2024 the Group
was selected by Rolls‑Royce as a construction
partner for its Ministry of Defence and
AUKUSexpansion.
@ UK transport: Investment in the UK transport
network is an important component of the
Government’s growth plans and is essential to
address ageing infrastructure, net zero targets
and domestic and international connectivity.
Given Balfour Beatty’s capabilities and market
share in the construction and maintenance of
road and rail, and its experience in delivering
major airport projects, the Group is well
positioned to capitalise on transport opportunities
when they arise, with growth expected in the
medium term.
In the shorter term, PFO growth across 2025 and
2026 in Balfour Beatty’s Construction Services
division is expected to be weighted towards
further margin improvement, rather than higher
volumes. Growth in the Support Services division
is expected to be largely driven by the expansion
of work in the power transmission and distribution
sector, which is not reliant on Government funding
or the ongoing comprehensive spending review.
Capability is key
The combination of a strong order book and broad
market opportunities is supportive for Balfour
Beatty’s growth aspirations, but as demand rises,
challenges surrounding capability and workforce
naturally rise too. As such, attracting and recruiting
new talent and retaining its existing experts are
increasingly important areas of focus and investment
for the Group, as it looks to closely match the
rising trajectory of work with a growing, and
appropriately skilled, workforce.
The annual employee engagement survey is an
essential tool for the Group to assess its own
performance and the progress made in the year.
In 2024, the survey results were particularly
strong, with overall employee engagement at
84% (2023: 81%), which is 11 percentage points
above the industry average. This is the seventh
successive year of improvement in Balfour
Beatty’s employee engagement scores.
Balfour Beatty’s people strategy focuses on the
four strategic pillars of Attract, Retain, Grow and
Thrive. To attract new talent at all levels of experience
,
the Group leverages its inclusive culture, the breadth
of its capabilities and its portfolio of nationally
critical infrastructure projects as a powerful part of
its employer proposition. In 2024, this contributed
to an increase in new starters in the UK, including
over 500 in the Power Transmission and Distribution
business alone. To retain its talent, Balfour Beatty
focuses on providing an inclusive environment
where its people feel valued and can be productive,
and progress was made in the year with the
Group’s voluntary attrition rates in the UK
improving to 10% (2023: 12%). This supportive
culture also offers employees the opportunity
todevelop their skills and competencies, while
building their careers, with the Group’s focus on
employee wellbeing supporting them to thrive.
Atyear end, 7.3% of the UK workforce were
apprentices, graduates and sponsored students
in‘earn and learn’ positions, exceeding both
The5% Club’s base target and overall average.
Strong progress in pursuit
ofZeroHarm
Health, safety and wellbeing (HS&W) continues
tobe the top priority for Balfour Beatty. Given
thenature of the work undertaken by the Group,
Balfour Beatty has a duty of care to all of those
working on its projects and the public to deliver
anindustry‑leading HS&W programme, which is
present on site and reinforced each day. In 2024,
the Group’s key metrics, which exclude international
joint ventures, improved further and achieved
record levels, with the Lost Time Incident
Ratereducing from 0.11 to 0.09, the three‑day
Lost Time Injury Rate falling from 0.08 to 0.07
andobservations increasing to over 470,000
(2023:400,000), due in part to the US business
almost doubling its number of observations
raisedthroughout the year.
The Group remains determined to keep raising
the bar and taking the next step on the journey
toZero Harm, with further utilisation of technology
a key enabler to this. Balfour Beatty’s introduction
of digital permits and checklists, while enabling AI
solutions, has contributed to the Group leading
the industry in safety performance, while improving
productivity and assurance. In 2024, the roll out of
human form recognition cameras continued at
pace. These award‑winning multi‑camera systems,
installed on mobile plant, detect the human form
and proactively communicate this detection visually
and audibly to the plant operator. Insights from
the data collected, combined with advancements
in AI, will allow for teams to plan work more safely
and effectively in the future. AI is also being used
to more thoroughly analyse the vast amount of
safety data collected across Balfour Beatty, which
will allow the Group to be more predictive in the
identification of safety trends and events.
Launch of evolved
SustainabilityStrategy
In June, Balfour Beatty launched its evolved
Sustainability Strategy, extending its focus to six
areas which encompass climate change, nature
positive, resource efficiency, supply chain integrity,
community engagement and employee diversity,
equity, and inclusion. As part of the evolved strategy,
the Company has brought forward its UK based
target to create £3 billion of social value by 2025
(previously 2030) as well as initiating new net zero
targets as its understanding of the scale of the
challenge has evolved. Following a process to
stress test its targets with the Science Based
Targets initiative (SBTi), the Group has revised its
net zero target for Scope 1 and 2 emissions to
2045, and Scope 3 to 2050, both originally set for
2040. The targets, which are both stretching and
realistic, have been validated by the SBTi and are
underpinned by an industry‑leading, fully
transparent UK carbon reduction plan.