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ANNUAL REPORT
ANDACCOUNTS 2024
Building
New
Futures
ABOUT US
Balfour Beatty is a leading international infrastructure group with
27,000 employees driving the delivery of powerful new solutions,
shaping thinking, creating skylines and inspiring a new generation
of talent to be the change-makers of tomorrow.
We finance, develop, build, maintain and operate the increasingly
complex and critical infrastructure that supports national economies,
and deliver projects at the heart of local communities.
IN THIS REPORT
p14
p22
Well positioned in growth markets
We are leveraging our expertise and proven track record
tocapitalise onhigh‑growth markets to secure newopportunities.
Digital and AI advancements
Our digital‑first approach enhances safety, productivity
andassurancethrough AI, data lakes and digital tools.
Icon Awards
In 2024, we celebrated our inaugural Icon Awards at the
world‑class V&A Museum in London, bringing together almost
400 colleagues from across the UK, US and Hong Kong to
celebrate the very best of Balfour Beatty.
p74
LOOK OUT FOR THE
ICON AWARDS LOGO TO
READ OUR WINNERS’
STORIES THROUGHOUT
THEREPORT.
FIND OUT MORE AT: WWW.BALFOURBEATTY.COM
FRONT COVER IMAGE:
(Left to right) Martina Doussias,
Senior Project Accountant, Nick
Stenman, Assistant Superintendent,
and Karli Franks, Marketing Lead, on
site at the Southwestern College
Student Union project in California.
Photo credit: Emil Kara, Multimedia
Manager – US Buildings.
1Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CONTENTSFINANCIAL PERFORMANCE
STRATEGIC REPORT
Financial performance 1
Balfour Beatty at a glance 2
Group Chair’s introduction 4
Our business model 8
Group Chief Executive’s review 10
Market review 14
Our strategy: Build to Last 24
Stakeholder value 26
Operational review 30
Directors’ valuation of the
Investmentsportfolio 38
Health, safety and wellbeing 40
Ethics and compliance 46
Tax strategy 47
Sustainability 48
Our people 68
Non‑financial and sustainability
information statement 79
Measuring our financial
performance 80
Chief Financial Officer’s review 86
Risk management 89
Viability statement 106
Climate change and Task
ForceonClimate‑related
FinancialDisclosures(TCFD) 107
GOVERNANCE
Board leadership and
Companypurpose 117
Division of responsibilities 132
Composition, succession
andevaluation 136
Nomination Committee 140
Safety and Sustainability
Committee 144
Audit and Risk Committee 146
Remuneration Committee 153
Directors’ report 175
FINANCIAL STATEMENTS
Independent auditor’s report 179
Financial statements 188
Notes to the financial statements 198
OTHER INFORMATION
Unaudited Group
five‑year summary 276
Shareholder information 277
UNDERLYING
REVENUE¹ £m
8,931
9,595
10,015
8,587
8,280
24
24
24
24
24
24
24
24
24 2420
20
20
20
20
20
20
20
20 2021
21
21
21
21
21
21
21
21 2122
22
22
22
22
22
22
22
22 2223
23
23
23
23
23
23
23
23 23
UNDERLYING PROFIT FROM
OPERATIONS (PFO) £m
197
279
51
228
248
UNDERLYING EARNINGS PER
SHARE (BASIC) Pence
37.3
43.6
29.7
47.5
3.7
ORDER BOOK¹
£bn
16.5
18.4
16.1
17.4
16.4
NET CASH
£m
842
943
790
815
581
STATUTORY NET CASH/
(BORROWINGS) £m
435
446
418
441
139
STATUTORY REVENUE
£m
7,185
7,629
7,320
7,9 93
8,234
STATUTORY PROFIT
FORTHEYEAR £m
194
178
139
287
30
STATUTORY EARNINGS
PERSHARE (BASIC) Pence
35.3
34.2
21.3
46.9
4.4
DIVIDENDS PER SHARE
Pence
9.0
10.5
1.5
11.5
12.5
KEY
Performance measures
Statutory measures
1 Including share of joint
venturesandassociates,
beforenon‑underlyingitems.
The Group has presented financial performance measures which are considered most relevant
to the Group and used to manage the Group’s performance. An explanation of these measures
and appropriate reconciliations to statutory measures are provided on pages 80 to 85.
STRATEGIC REPORT
22
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
BALFOUR BEATTY AT A GLANCE
NUMBER OF EMPLOYEES
27,000
DIRECTORS’ VALUATION
INVESTMENTS PORTFOLIO
£1.3bn
REVENUE
1
£10,015m
UNDERLYING PROFIT
BEFORE TAX
£289m
Group highlights
1 Including share of joint ventures and associates.
l United Kingdom
£9.4bn
l United States
£7.1bn
l Hong Kong
£1.9bn
GROUP ORDER BOOK
1
£18.4bn
Our Cultural Framework
Balfour Beatty’s Cultural Framework provides a simple and clear view
ofour purpose, values and behaviours under our Build to Last strategy.
The framework reflects who we are now as an international group,
who we want to be, what we value and what drives the way we work.
International
infrastructure
experts
Our purpose
Our strategy
Our values
Our behaviours
Our Code ofEthics
Our behaviours reflect the things we will do to consistently
delivertothe standard set out in our values.
Our values reflect the norms and beliefs that drive the way
weworkand how we measure ourselves.
TALK
POSITIVELY
COLLABORATE
RELENTLESSLY
ENCOURAGE
CONSTANTLY
MAKE A
DIFFERENCE
VALUE
EVERYONE
LEAN EXPERT TRUSTED
SAFE SUSTAINABLE
Building New Futures
We are leading the transformation of our
industry to meet the challenges of the future.
Build to Last
Build to Last is our strategy
for continuous improvement.
Our Code of Ethics is the foundation of everything we do.
Itprovides a clear direction on the standards, values and
expectations that guide the behaviours of ouremployees and
supply chain partners.
SCAN OR CLICK TO
FIND OUT MORE
ABOUT OUR CULTURAL
FRAMEWORK
FIND OUT MORE ABOUT OUR
STRATEGY AND VALUES
p24 and 25
3Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Construction Services
Specialises in the design and construction of
major infrastructure and building projects in
the UK, US and Hong Kong.
Support Services
Maintains, upgrades and manages vital
services across the power transmission,
distribution, utilities, road and rail sectors.
Infrastructure Investments
Operates and maintains infrastructure projects
and a portfolio of military and multifamily
housing and student accommodation assets.
Hong Kong International Airport for the
Airport Authority Hong Kong.
Tealing Substation, Scotland for SSEN Transmission. JBWS Charleston Homes, military family
housing for the US Navy.
Our divisions
Selective bidding
forcontracts
Our stringent gated lifecycle process
allowsus to carefully control our project
portfolio onan ongoing basis.
Financial
performance
ORDER BOOK
1
£15.2bn
ORDER BOOK
1
£3.2bn
DIRECTORS’ VALUATION
£1.3bn
REVENUE
1
£8,199m
UNDERLYING PROFIT
FROMOPERATIONS
£159m
STATUTORY PROFIT
FROMOPERATIONS
£87m
REVENUE
1
£606m
UNDERLYING
PROFIT BEFORE TAX
£54m
STATUTORY PROFIT
BEFORETAX
£51m
REVENUE
1
£1,210m
UNDERLYING PROFIT
FROMOPERATIONS
£93m
STATUTORY PROFIT
FROMOPERATIONS
£93m
FIND OUT MORE IN OUR
BUSINESS MODEL SECTION
p8
FIND OUT MORE IN OUR
OPERATIONAL REVIEW
FIND OUT MORE IN OUR
OPERATIONAL REVIEW
FIND OUT MORE IN OUR
OPERATIONAL REVIEW
p31 p35 p36
1 Including share of joint venture and associates.
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
44
GROUP CHAIR’S INTRODUCTION
Shaping the future
ofinfrastructure
Charles Allen
Lord Allen of Kensington, CBE
Non-executive Group Chair
Dear Shareholders,
Throughout 2024, the world witnessed profound
changes – from ongoing conflicts in the Middle
East and Ukraine and geo‑political landscapes
being reshaped by key elections, to groundbreaking
advancements in artificial intelligence. Against this
dynamic global backdrop, Balfour Beatty started
2025 very well positioned for continuing success,
with infrastructure widely established as a driver
and enabler of economic growth, energy security
and rewarding careers.
After a decade of remarkable transformation,
2024 was a defining year for Balfour Beatty. The
Group has solidified its leadership in the industry,
strengthened its brand, and delivered a strong
financial performance. We see significant
opportunities across our four growth markets –
energy, defence and transport in the UK, and
buildings in the US – with notable new projects
contributing to a high‑quality order book. Most
importantly, our unwavering commitment to health,
safety, and wellbeing has been a beacon of excellence,
setting the standard for industry‑leading performance.
From this position, your Board is confident that
Balfour Beatty’s people, resilience, innovation,
anddedication ensure that we are not just
securing the future of the Group but actively
shaping the future of the infrastructure industry.
New Board appointments
During 2024, I had the pleasure of welcoming
three exceptional leaders to the Balfour Beatty
Board: Robert MacLeod, Gabby Costigan MBE,
and Rudy Wynter.
Robert, now Chair of Balfour Beatty’s Audit and
Risk Committee, is a Chartered Accountant with
an impressive track record as a CEO and CFO,
and brings a wealth of strategic, financial and
commercial expertise as well as Non‑executive
Director experience. Gabby, now Chair of Balfour
Beatty’s Safety and Sustainability Committee, is
an Aeronautical Engineer with a rich international
career, including 21 years in the Australian Army,
adding a unique perspective to our leadership.
Rudy, with over 35 years in the gas and electricity
sector, brings extensive experience in the
development and construction of large‑scale
engineering and capital energy projects.
These distinguished appointments have enriched
the Board with diverse insights and expertise,
supporting Balfour Beatty’s ambitious growth trajectory.
In March this year, following an extensive international
selection process, the Board announced the
appointment of Philip Hoare as Group Chief
Executive Officer, a position he will take up in
September 2025. Philip, a civil engineer, built his
30‑year career at AtkinsRéalis Group Inc, a global
engineering services and nuclear enterprise where
he has been fundamental to the growth and
performance of the company, first as CEO
ofAtkins in the UK and Europe, and then as
President of the global Engineering Services
business. In January 2024, he was appointed
Chief Operating Officer of the transformed group.
His depth of industry knowledge and experience
in delivering a profitable growth strategy across
multiple geographies makes him the ideal person
to continue to drive the Group’s success in our
chosen markets.
On behalf of the Board, I pay tribute to Leo, for his
exceptional and inspirational leadership of both
Balfour Beatty and the industry over the last decade.
Leo has transformed Balfour Beatty into a strong,
resilient Group, setting it firmly on a trajectory of
profitable growth. This is underpinned by a culture
across its workforce which is committed to expertise,
discipline and excellence, resulting inatrusted
reputation for delivering value for allstakeholders.
5Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Setting the standard in health,
safety and wellbeing
In 2024, Balfour Beatty delivered its best‑ever health
and safety performance, with an industry‑leading
Lost Time Injury Rate of 0.09. With over 105 million
hours worked, a record 470,000 health and safety
observations, and a remarkable 95% of employees
expressing that they feel cared for in our 2024
employee engagement survey, these achievements
underscore our unwavering commitment to
health, safety and wellbeing.
This success goes beyond mere numbers –
itreflects our embedded culture. From the
dedication of our inspirational site supervisors to
the meticulous discipline in our daily processes,
often powered by pioneering digital solutions,
tomitigate risks and assure compliance, every
aspect of our approach is geared toward creating
a safer, healthier, and happier workplace.
An evolving sustainability strategy
In June 2024, after significant investment in our
sustainability capabilities and a thorough evaluation
of the developing landscape, we evolved our
sustainability strategy. This step established new
targets and expanded focus areas critical to our
business success – climate change, nature positive,
resource efficiency, supply chain integrity, community
engagement, and employee diversity, equity
andinclusion.
To future‑proof our approach, we set a validated
net zero target, endorsed by the Science Based
Targets initiative (SBTi) and supported by a fully
transparent, UK carbon reduction plan. We also
accelerated our UK target to achieve £3 billion
ofsocial value by 2030 by five years to 2025 –
andIam very pleased to say that in 2024 we
achievedthat target. Balfour Beatty’s evolved
strategy will ensure that we continue to lead in
building a lasting, positive impact for our planet
and our communities.
Strategic growth and a market
selective approach
As we embark on another decade of infrastructure
expansion with its unparalleled opportunities,
Balfour Beatty’s diverse geographical and operational
portfolio, coupled with its leading reputation in
engineering and construction, positions us as
critical to the delivery of transformative
infrastructure projects.
The dynamic market coupled with strong
governance and controls means that Balfour
Beatty is well placed to select projects that align
with our strengths and drive sustainable growth
for the Company.
LEFT
Charles at our ‘Meet the
Affinity Networks’ event in the
Canary Wharf office in London.
Balfour Beatty
iswell placed to
select projects
thatalign with our
strengths and drive
sustainable growth
for the Company.”
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
66
Building our reputation as the
employer of choice
Balfour Beatty’s differentiator is its depth of
unique capability. Behind this lies a long‑term
strategy of attracting, retaining and developing
toptalent at all career stages. Our aim is to
become the employer of choice by combining
unmatched career opportunities with a diverse
and inclusive culture.
Our commitment to valuing and investing in
ourcolleagues is a cornerstone of this goal.
Ourapproach empowers employees to transition
into leadership roles, strengthening our succession
pipeline and ensuring the successful delivery of
future projects. By focusing on early career
development – through hiring apprentices,
graduates and trainees, now comprising over
7.3% of our workforce – and offering targeted
programmes such as the Aspiring and Future
Leaders initiatives in the UK and the Executive
Leadership and Development programmes in the
US – we are cultivating the leaders of tomorrow.
Our latest employee engagement survey saw
aremarkable 84% engagement score in 2024,
marking our seventh year of continuous improvement
,
up 3% from 2023 and 11% above the industry
average, with 82% of employees participating.
This strong response underscores our employees’
commitment to and pride in the business.
Driving a productivity revolution:
leading the digital and AI frontier
Harnessing transformative AI and digital
technology allows us to work smarter, optimising
resource allocation, streamlining processes,
improving decision making, and delivering
projects with greater efficiency and precision.
We have made significant strides in integrating
digital innovations into our operations, and this
year, we are set to accelerate our progress.
Thiscommitment is underpinned by a robust
cybersecurity framework – a non‑negotiable
standard, especially in the highly regulated,
high‑security environments where we operate.
Whether it is delivering critical infrastructure for
UK defence and nuclear sectors or supporting
theUS federal and state markets, including
ourvital work with the US military, our digital
advancements are key to maintaining the trust
and security these projects demand.
Continuing to deliver a multi-year
capital allocation framework
2025 marks Balfour Beatty’s fifth consecutive year
of share buybacks. The Company’s record order
book, unique end‑to‑end capabilities and financial
strength provide a strong platform for continuing
shareholder returns balanced by maintaining an
appropriate level of investment in the business
and a strong capital position. 2024 saw £160
million delivered to shareholders through share
buybacks and dividends bringing total shareholder
distributions to over £750 million since the launch
BELOW
Charles at the launch event of The 5% Club’s Business Leadership Council in London.
Balfour Beatty’s
differentiator is its
depth of unique
capability. Behind
this lies a long-term
strategy of attracting,
retaining and
developing top talent
atall career stages.”
GROUP CHAIR’S INTRODUCTION CONTINUED
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
7
of our capital allocation framework in 2021. We are
confident of delivering significant future capital
returns, evidenced by the c. £125 million share
buyback programme announced for 2025. The
Board is also recommending a final dividend of
8.7 pence per share, giving a total recommended
dividend of 12.5 pence per share for the year.
Conclusion
2025 ignites a decade of infrastructure evolution
similar in scale to the Victorian engineers in terms
of its impact on how we live, work and connect.
This is Balfour Beatty’s moment – an era of bold
change and a once in a generation opportunity.
The Group expects to continue to lead the charge,
delivering groundbreaking projects that will fuel
growth and enable shared prosperity.
Section 172 statement
The Directors take their responsibilities to
stakeholders very seriously. Throughout 2024,
theBoard reviewed existing engagement
mechanisms across each of the Group’s key
stakeholder groups. The Board ensures all
complementary and divergent stakeholder
viewsare understood and embedded into Board
discussions and the decision‑making process.
Inaddition to having regard to the interests of
theGroup’s stakeholders, Directors also consider
the impact of the Group’s activities on the communities
within which it operates, the environment, and
the Group’s reputation for high standards of
business conduct.
The Directors seek to act in good faith in the way
most likely to promote the long‑term success of the
Company for the benefit of its shareholders, and to
act fairly between all of its stakeholders. Through
the Board and the Board Committees, Directors
have taken action to promote and support these
objectives across the Group, details of which can
be found throughout this Annual Report as set
outhere:
@ the Company’s purpose, values and behaviours
on pages 2 and 24;
@ a description of key stakeholder groups and
how the Group has engaged with stakeholders
on pages 26 to 29 and 127 to 131;
@ the range of activities undertaken across the
Group relating to sustainability matters on
pages 48 to 67;
@ details of how high standards of integrity are
maintained on page 46;
@ the proactive and pragmatic approach of the
Group toward risk on pages 89 to 105;
@ the framework of the Company’s decision
making on pages 132 to 135; and
@ details of the Company’s governance processes
and practice on pages 117 to 139.
To our exceptional colleagues, trusted partners,
and valued customers – thank you. Your unwavering
commitment is at the heart of our success.
Charles Allen
Lord Allen of Kensington, CBE
Non-executive Group Chair
11 March 2025
BELOW
Charles on a site visit to Gammon’s Cyberport development, a new 10‑storey office building in Hong Kong.
This is Balfour
Beatty’s moment –
an era of bold
change and a once
in a generation
opportunity.”
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
88
Public, private and regulated entities
OUR BUSINESS MODEL
SCAN OR CLICK TO FIND OUT
HOWWE ARE SHAPING SOCIETY.
Understanding
BalfourBeatty
At Balfour Beatty, we finance,
develop, build, maintain and
operate the increasingly
complex and critical
infrastructure that supports
national economies and
deliver projects at the heart
oflocal communities.
How we work
CONSTRUCTION SERVICES
Our Construction Services businesses
operateacross infrastructureand
buildingsmarkets in the UK, in the
USandinjointventure in Hong Kong.
DIVISIONS
CAPABILITIES
CUSTOMERS
@ Constructs buildings which include commercial
,
defence, education, government, healthcare,
leisure, retail and residential assets and
provides a range of services including design
and/or build, mechanical and electrical
engineering, shell and core and/or fit out
andinterior refurbishment.
@ Provides construction services for four main
infrastructure asset types:
– energy: design and construction of
large‑scale, complex assets for the
energy sector;
– roads: design and construction of
motorways in the UK, the US and Hong
Kong, including widening and converting
existing assets;
– railways: design and management
ofrailwaysystems, delivering major
multi‑disciplinary projects, track work,
electrificationand power supply; and
– airports: construction and refurbishment
of major passenger terminals, passenger
transit facilities and airport facilities, and
airfield infrastructure and civils works.
@ Construction and build services for other
infrastructure assets including flood
andcoastal defences.
@ Constructs and maintains electricity
networks for power transmission and
distribution contracts.
@ Provides maintenance, asset and network
management, and design services in
respect of highways, railways and other
publicly available assets.
@ Provides support services to various
utilityassets.
@ Invests directly in various assets, mainly
infrastructure with post‑construction
management opportunities.
@ Operates a UK and US portfolio of service
concession assets.
@ Invests in real estate, particularly private
military housing, student accommodation
and multifamily housing.
@ Provides real estate management services,
including property development and
assetmanagement.
SUPPORT SERVICES
Our Support Services businesses
operate in the UK, designing, upgrading,
managing and maintaining critical
national infrastructure.
INFRASTRUCTURE INVESTMENTS
Our Infrastructure Investments
business develops and finances both
public and private infrastructure
projects in the UK and the US.
9Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Our differentiators Balanced revenue mix
1 Including share of joint ventures and associates.
UK 44%
US 40%
Rest of theWorld 16%
Buildings 46%
Infrastructure 44%
Utilities 8%
Other 2%
Public 60%
Private 25%
Regulated 15%
BY GEOGRAPHY
Revenue by primary
geographical market¹
BY ASSET
Revenue by type of
assetserviced¹
BY CUSTOMER
Revenue by public, private
andregulated entity¹
Balfour Beatty has built an industry‑leading brand based on
its reputation as a partner that is Lean, Expert, Trusted, Safe
and Sustainable – our five Build to Last values.
Balfour Beatty’s engineering and project management
expertise allows it to deliver complex, one‑of‑a‑kind
projects and has made the Group a trusted construction
partner for the public and private sector alike.
Balfour Beatty takes its responsibility as a custodian of the
planet seriously and seeks to leave a positive legacy in the
communities it works in.
Balfour Beatty invests in understanding clients’ needs,
developing bespoke solutions, and collaborating closely
withcustomers andsupply chains through integrated
deliverymodels.
With over 115 years of experience successfully
delivering transformational infrastructure projects,
Balfour Beatty has cultivated a strong track record
ofquality andreliability.
Balfour Beatty’s strong balance sheet is a testament to
strong governance. It gives customers confidence in the
Group’s ability to deliver, and that Balfour Beatty is here
forthe long term.
Innovation is part of Balfour Beatty’s culture, harnessing
the power of digital and cutting‑edge technology to
drive productivity and redefine the possible.
FINANCIAL STABILITY
WORLD-CLASS TRACK RECORDBUILD TO LAST VALUES
INNOVATION
SUSTAINABLE FOCUS
COLLABORATION EXPERT PEOPLE
FOR MORE INFORMATION,
SEE PAGE 209
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
1010
GROUP CHIEF EXECUTIVE’S REVIEW
Our investment proposition
Attractive future shareholder returns underpinned by sustained
growth opportunities and financial strength.
High-quality and de-risked portfolio
@ Diverse portfolio across UK, US and Hong Kong
@ £18.4 billion order book
@ Robust governance and disciplined bidding
Expert capability
@ Track record of complex infrastructure delivery
@ Unique end‑to‑end capabilities
@ Record employee engagement
Sustained growth drivers
@ Governments driving growth through infrastructure
@ Capabilities aligned to growth markets
@ UK demand outweighing supply
Responsible goals
@ Evolved sustainability strategy launched in 2024
@ Net zero carbon emissions targets verified by SBTi
@ Ambitious community targets
Financial strength
@ Strong cash generation
@ £1.25 billion Investments portfolio
@ Sector leading balance sheet
1.
2.
3.
4.
5.
Continued strong
performance delivering
profitable growth
2024 profitable growth targets achieved
Balfour Beatty delivered another year of strong
operational performance in 2024, which resulted
in the Group growing earnings, average cash and
order book. The key 2024 objective of growing
theprofit from earnings‑based businesses
(Construction Services and Support Services) was
achieved, with underlying profit from operations
(PFO) from those businesses increasing by 7%
to£252 million (2023: £236 million), while the
year‑end order book increased by 12% to £18.4 billion
(2023: £16.5 billion) following progress in Balfour
Beatty’s chosen growth markets. The Group’s underlying
profit for the year improved to £227 million
(2023:£205 million) driven by the earnings‑based
businesses, increased gains on Investments disposals
and higher net finance income. Non‑underlying items
after tax were a loss of £49 million (2023: £11 million)
and included a charge in relation to the Group’s
obligations under the UK Building Safety Act (BSA).
In 2024, £161 million of cash was returned to
shareholders (2023: £208 million) through a
combination of dividends and share buybacks
andaverage net cash increased to £766 million
compared to £700 million in 2023.
Strong Group portfolio
performanceled by UK
Balfour Beatty’s geographical, operational and
contract diversity is a key strength of the Group,
and has been an important factor in the consistency
of its financial results in recent years. This was
further demonstrated in 2024, as the Group
Leo Quinn
Group Chief Executive
11Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
delivered profitable growth in both of the
earnings‑based businesses. Construction Services
underlying PFO increased to £159 million, as UK
Construction PFO margin continued to improve
with a further year of strong project delivery and
Gammon recorded 14% revenue growth, while
US Construction profitability reduced due to the
cost of delays at a small number of civils projects.
Support Services delivered strong growth, with
revenue increasing by 20% and PFO margin
remaining close to the top of its targeted range.
Infrastructure Investments surpassed its disposal
targets, which offset an increase in costs. The
Directors’ valuation of the Investments portfolio
increased by 3% to £1.3 billion (2023: £1.2 billion),
with two new projects added. The Group has
forecast further growth in the medium term,
driven by its focus on four key markets; UK
energy, transport and defence and US buildings.
High-quality order book providing
foundations for 2025 and 2026
The Group’s order book grew by 12% in 2024 to
£18.4 billion (2023: £16.5 billion), and while orders
remain significant across Balfour Beatty’s focused
geographic footprint of the UK, US and Hong Kong,
the increase was largely driven by progress in two
of the identified growth markets:
@ In the UK, the strengthening and upgrading of
the power transmission network is underway
and the demand for engineering and construction
expertise continues to outweigh supply. Balfour
Beatty holds market‑leading capabilities in this
space and the order book for power transmission
and distribution work has more than doubled
in2024;
@ In the US, the combination of the Group’s organic
growth strategy and a more stable economy
has resulted in the buildings business growing
its order book by 26% (24% at constant
exchange rate (CER)) during the year, with
increased demand across most of its
geographies and client sectors.
In a period of rising demand, the Group continues
to be selective in the work it undertakes, using
increased bid margin thresholds and utilisation
ofdisciplined risk frameworks and contract
governance to reduce risk and raise quality in the
forward order book. As a result, the order book
comprises a portfolio of projects that the Group
believes has the appropriate contractual terms
and conditions for the risk undertaken, with UK
Construction being heavily weighted towards
lower‑risk target cost and cost plus incentivised
fee contracts and US Construction being heavily
weighted towards buildings projects, for which
the Group ensures early issuing of subcontracts
and insurance of the supply chain in order to
protect its margin.
Beyond the reported order book, Balfour Beatty
has positions on several long‑term frameworks,
including Scottish and Southern Electricity
Networks’ (SSEN) c.£10 billion Accelerated
Strategic Transmission Investment (ASTI)
framework and two SCAPE Civil Engineering
frameworks in the UK, which were extended for
two further years in 2024. The Group’s awarded
but not contracted pipeline also grew in the year,
due largely to the addition of SSEN’s £690 million
Skye 132kV reinforcement project and various US
Buildings projects.
Looking ahead to further growth
The Group’s outlook in each of its chosen markets
is positive through the medium term. In the UK,
multi‑year investment in infrastructure is a priority
and a necessity for the Government and will be
crucial in achieving the country’s growth and clean
energy goals. The Government has also committed
to leveraging private investment, upskilling the
UK’s workforce and delivering planning reform
with the Planning and Infrastructure Bill. In the
US, US Buildings’ organic growth strategy and a
more stable economy have contributed to the
division’s encouraging progress.
The ‘Quinn-tessential’ Award
This category recognised individuals who have made an outstanding
contribution toBalfourBeatty. The winners of this award were personally
selected by Leo Quinn, GroupChiefExecutive.
READ MORE
ABOUT OUR ICON
AWARDS EVENT
ON p74
Winner: Keith McCoy
Senior Vice President, US
Buildings and Civils
Keith joined us over 31 years ago as
aProject Engineer. Two years ago, he
took on the Caltrain Rail job over in
California – a herculean effort – building
a cohesive team, tackling complex
delivery and with a ‘Bethe Best’
mantra that inspires people to deliver.
Winner: Steve O’Sullivan
Senior Project Director, Major Projects
Steve started his career with Balfour Beatty 44 years
ago as an electrical apprentice aged 16. He is now
leading our HS2 Old Oak Common station project in
London. He is not just a Balfour Beatty leader, but an
industry leader – one of the very best.
SCAN OR CLICK
TOHEAR LEO’S
THOUGHTS ON
BALFOUR BEATTY’S
INAUGURAL ICON
AWARDS
In 2024, Balfour Beatty celebrated its inaugural Icon Awards at the world-class
V&A Museum in London, bringing together almost 400 colleagues from across
theUK, US and Hong Kong to celebrate the very best of Balfour Beatty.
Above: Award presentation photo. (Left to right) Steve O’Sullivan, Senior
Project Director – Major Projects and Leo Quinn, Group Chief Executive.
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
1212
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
aresult 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
AUKUSexpansion.
@ 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
todevelop their skills and competencies, while
building their careers, with the Group’s focus on
employee wellbeing supporting them to thrive.
Atyear end, 7.3% of the UK workforce were
apprentices, graduates and sponsored students
in‘earn and learn’ positions, exceeding both
The5% Club’s base target and overall average.
Strong progress in pursuit
ofZeroHarm
Health, safety and wellbeing (HS&W) continues
tobe the top priority for Balfour Beatty. Given
thenature 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
anindustry‑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
Ratereducing from 0.11 to 0.09, the three‑day
Lost Time Injury Rate falling from 0.08 to 0.07
andobservations increasing to over 470,000
(2023:400,000), due in part to the US business
almost doubling its number of observations
raisedthroughout the year.
The Group remains determined to keep raising
the bar and taking the next step on the journey
toZero 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
SustainabilityStrategy
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.
13Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
In 2024, the Group delivered £991 million
(2023:£936 million) of social value, including
spend with local suppliers and local businesses,
and volunteering. The Group also achieved a small
decrease in absolute carbon emissions and a 13%
intensity reduction in Scope 1 and 2 greenhouse
gas (GHG) emissions.
Increased dividends and share
buybacks in 2025
The Group’s capital allocation framework has been
in place since 2021, facilitating the delivery of
attractive shareholder returns, while ensuring the
appropriate balance between investment in the
business, and a strong capital position. Given the
Group’s encouraging position, including its large
order book, strong balance sheet and the depth of
opportunities in its chosen markets, Balfour Beatty
is confident of continuing to deliver significant
future shareholder returns. As such, the Board is
today recommending a final dividend of 8.7
penceper share (2023: 8.0 pence), giving a total
recommended dividend for the year of 12.5 pence
per share (2023: 11.5 pence). Additionally, the
Company intends to repurchase £125 million of
shares during the 2025 phase of its multi‑year
share buyback programme, bringing the cumulative
return to shareholders since the introduction in
2021 of the multi‑year capital allocation framework
to over c. £940 million.
The total cash return to shareholders in 2025
(including the final 2024 dividend and 2025
interim dividend) is therefore expected to
bec.£188 million (2024: £161 million).
Outlook
The Board expects an increase in PFO from its
earnings‑based businesses in 2025, with further
growth in 2026.
Infrastructure Investments is expected to
continue to deliver attractive end‑to‑end returns
from its recurring income, by divesting assets and
making new investments in line with the Group’s
capital allocation framework. For 2025, gains on
investment disposals are expected in the range
of£20 ‑£30 million.
The Board expects net finance income of around
£25 million for 2025 and for the effective tax rates
in each of the three geographies to remain close
to statutory rates, albeit with cash tax payments
in the UK remaining below statutory levels in the
medium term as losses are utilised. Average net
cash in 2025 is expected to be roughly £800 million,
with capital expenditure between £35 and £40 million
and working capital remaining broadly flat.
The Group’s long‑term outlook remains positive,
with the growth forecast in 2025 and 2026 being
driven by strong visibility from its high‑quality
order book, alongside the further opportunities in
the energy, transport and defence sectors in the
UK and the Group’s chosen buildings sectors in
the US. This gives the Board confidence in Balfour
Beatty’s continued ability to deliver profitable
managed growth and sustainable cash generation,
and in turn significant ongoing shareholder returns.
Leo Quinn
Group Chief Executive
11 March 2025
The Diamond Award
This category celebrated individuals who have dedicated
manyyears to Balfour Beatty or the wider industry.
READ MORE ABOUT OUR ICON
AWARDS EVENT ON p74
Above: Award presentation photo. (Left to right) Paul Raby, Group Human
Resources Director, Kennedy Cheung, Director – Gammon, and Leo Quinn,
GroupChiefExecutive.
Winner: Kevin Webber
Commercial Services Manager,
Major Projects and Highways
Kevin joined the Company in 1988
asa Trainee Quantity Surveyor. Since
then he’s helped deliver flagship
infrastructure projects and created
anindustry‑leading upskilling
programme for the commercial
profession – the go‑to person to
support and guide our teams.
Winner: Kennedy Cheung
Director, Gammon
Kennedy joined as a Graduate Civil
Engineer in 1978. Known for his
innovative project management and
his leadership in the industry, his
reputation for groundbreaking
advancements has seen him
recognised by the ‘Hong Kong
Engineering Wonders of the
21stCentury’ awards.
Above: Award presentation photo. (Left to right) Paul Raby, Group Human
Resources Director, Kevin Webber, Commercial Services Manager – Major
Projects and Highways, and Leo Quinn, Group Chief Executive.
1414
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Balfour Beatty plc | Annual Report and Accounts 2024
UK transport
The UK transport sector is expected to deliver significant growth as demand increases
forinfrastructure upgrades, sustainable transport solutions, and ongoing asset maintenance
of ageing networks. Balfour Beatty is a trusted partner in advancing the UK’s transport
network with extensive experience in delivering major UK transport projects, ongoing
maintenance contracts, and infrastructure management. As a result, Balfour Beatty is
wellpositioned to capitalise on opportunities to deliver new assets andrefurbish existing
transport infrastructure, help cities shift towards low‑carbon transport networks, and
provide essential maintenance services, which are crucial for the long‑term performance
ofroads, railways, airports, and public spaces.
£234bn
TRANSPORT SPENDING IN THE UK’S NATIONAL
INFRASTRUCTURE PIPELINE (2023/24-2032/33)
2024 momentum
@ Awarded major road contract, A9 dualling in Scotland
@ Early Contractor Involvement (ECI) activities atLowerThamesCrossing
@ Delivering highways maintenance contracts withBuckinghamshire,
East Sussex and LincolnshireCountyCouncils
Well positioned
ingrowth markets
Capitalising on high-growth markets where theGroup has the
capabilities and aproven track record to secure newopportunities.
UK energy transition andsecurity
Balfour Beatty has been at the forefront of delivering some of the most complex
energy schemes in the UK. The UK energy transition offers immense growth
opportunities underpinned by the UK Government’s commitment to make Britain a
‘clean energy superpower’, with £100 billion in spending planned over the next five
years. Capital investment in energy infrastructure is expected to surge over the next
three decades tosupport the transition to renewable‑powered, electrified systems.
Flagship initiatives such as Scottish and Southern Electricity Networks Accelerated
Strategic Transmission Investment (ASTI) framework and the Sizewell C nuclear power
station, demonstrate the scale of infrastructure required tomodernise the grid and
support low‑carbon energy generation, whilst the £22 billion commitment to carbon
capture and storage projects underscores the UK Government’s focus on the sector.
£19bn
AVERAGE ANNUALPOWER GENERATION AND
GRIDCAPITAL INVESTMENT (2022–2030)
Source: UK Energy Transition Outlook 2024, DNV; Analysis
oftheNational Infrastructure and Construction Pipeline, 2024
2024 momentum
@ Awarded first phase of the Skye 132kV reinforcement project for Scottish
andSouthern Electricity Networks (SSEN) Transmission
@ Delivering Early Contractor Involvement (ECI) activities for Sizewell C with
fundingcommitted until April 2026
@ Selected as the preferred construction partner for Net Zero Teesside
MARKET REVIEW
1.
2.
Image: DWLArchitects.
15Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
UK defence and security
The UK defence and security sector offers significant growth opportunities, driven
byongoing Government commitments to strengthen national security and modernise
defence infrastructure. As geopolitical tensions continue to rise, the UK Government
istargeting 2.5% defence spending as a share of GDP in 2030 to maintain its nuclear
deterrent and expand, modernise and maintain its existing estate. The sector’s critical
nature ensures long‑term funding and stability, with increasing investment in military
bases, training facilities and secure installations. Balfour Beatty has worked on a range
of defence facilities and has expertise in delivering large‑scale, high‑value projects in
highly regulated and secure environments which means it is well positioned to support
this critical work.
US buildings
The US buildings sector presents a compelling growth opportunity driven by strong
demand for commercial, industrial and institutional facilities. Economic expansion,
population growth, urban development and the modernisation of ageing government
building stock continue to fuel the need for office spaces, retail and hospitality
centres, warehouses, manufacturing plants and healthcare, educational and
government buildings. This sustained demand, combined with the scale and
diversity of projects, makes the US buildings market a key opportunity for seeking
long‑term growth. Balfour Beatty’s track record across a wide range of sectors
andlarge‑scale projects, along with its established and expanding footprint,
provides a robust foundation to deliver challenging, high‑value buildings projects.
US$428bn
2029 BUILDING SPENDING IN OUR CHOSEN STATES
2.5% GDP
UK’S 2030 DEFENCE SPENDING TARGET
Source: Defending Britain: leading in a more dangerous world,
HM Government; Dodge Construction Central
2024 momentum
@ Selected by Rolls‑Royce Submarines Limited as the
construction partner for their major expansion in Derby
@ Long track record of defence delivery; currently working
on 10 military‑related sites
2024 momentum
@ Notable awards include Maryland Avenue office to residential
conversion in Washington DC, Durham public schools in North Carolina,
Georgia State Capitol and Legislative Office Building, Little Elm High
School in Texas, Sacramento International Airport Pedestrian Walkway
in California, and several tenant improvement projects in the Northwest
KEY
1.
Skye 132kV reinforcement
project, Scotland.
2.
A9 Dualling Contract, Scotland
3.
RAF Marham, Norfolk
4.
Sacramento International
Airport Pedestrian Walkway
3.
4.
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
1616
Market trends
The UK Construction and Support Services
businesses capabilities and track record means
itis well positioned to support the delivery of
critical infrastructure necessary for the UK’s
long‑term priorities.
Expanding energy infrastructure
The UK’s target to achieving net zero emissions
by2050 necessitates a significant increase in
low‑carbon energy projects. The UK Government
iscommitted to supporting multi‑billion pound
projects in offshore wind, conventional nuclear,
small modular reactors and carbon capture, utilisation,
and storage (CCUS). Whilst the establishment of
Great British Energy, and continued funding for
Sizewell C, further underpins the UK Government’s
commitment to transition the country into a clean
energy superpower.
UK Construction
andSupport Services
Balfour Beatty awarded first phase of the Skye
Reinforcement Project for SSEN Transmission
Balfour Beatty has been awarded the
firstphaseof the £690 million Skye 132kV
reinforcement project for Scottish and Southern
Electricity Network (SSEN) Transmission.
Oncompletion, the project will ensure the
supply of secure, clean electricity to thousands
of homes and businesses across the Hebrides
and West Highlands.
The detailed design and development phase,
valued at £32 million, will see Balfour Beatty
provide technical solutions for a new 137km,
132kV double circuit overhead line between the
existing Fort Augustus and Edinbane substations,
as well as new sealing end compounds to link
the overhead line to the underground electricity
network, ultimately joining the Isle of Skye and
Western Isles to mainland Scotland.
Due to the expansive and unique terrain,
Balfour Beatty will engage its in‑house
Environmental and Sustainability team to
consider ecological and environmental
requirements, from peat management to
wildlife translocation, contributing to SSEN
Transmission’s biodiversity net gain targets.
In addition, the Company will work closely
andcollaboratively with local communities to
minimise disruption wherever possible, including
introducing a ‘Skye workers village’ to provide
the construction workforce with dedicated
siteaccommodation.
This latest award follows the Company’s
appointment to SSEN Transmission’s Accelerated
Strategic Transmission Investment (ASTI) framework
in August 2023 for which it commenced
detailed development and design in early 2024.
Main construction work for the Isle of Skye
Reinforcement Project is expected to begin in
early 2025. At project peak, Balfour Beatty will
employ 650 people including 32 apprenticeship
and graduate positions as part of the
Company’s commitment to The 5% Club.
Balfour Beatty is the UK’s leading construction and infrastructure
provider, collaborating with its customers to develop cutting-edge
solutions to meet the challenges of tomorrow.
UK CONSTRUCTION SPENDING FORECAST TO
GROW 5% PER YEAR
Construction spending, £bn, nominal
2024
432
544
2029
Infrastructure
Non-residential buildings
Residential buildings
Source: IHS Markit
+5%/yr
MARKET REVIEW CONTINUED
17Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Investment to modernise
theUK’selectricity grid
Facilitating the integration of renewable energy
sources necessitates expansion and upgrading of
the current electricity grid, with an estimated
£60billion of investment in network infrastructure
required by 2030. This includes projects such
asSSEN’s Accelerated Strategic Transmission
Investment (ASTI) framework, SP Energy Networks’
Strategic Agreement for Transmission Overhead
Line Works and National Grid’s RIIO‑T2 projects,
which bring to market a strong pipeline of
opportunities for Balfour Beatty.
Enhancing and future-proofing
theStrategic Road Network
The Government’s Road Investment Strategy 3
(RIS3, 2025–30) is expected to prioritise maintaining
and improving the Strategic Road Network (SRN),
reducing congestion, advancing environmental
goals and integrating modern technologies. While
the focus may shift toward smaller maintenance
projects, deferred RIS2 schemes, such as the
Lower Thames Crossing, ensure continued
opportunities for major infrastructure
developments as well.
Balfour Beatty selected by Rolls-Royce as construction
partner for MOD and AUKUS expansion work in Derby
In 2024, Balfour Beatty was selected by
Rolls‑Royce as its non‑fissile construction
partner to help deliver the expansion of their
site in Raynesway, Derby.
Rolls‑Royce is currently supporting the existing
Astute and Dreadnought boat build programmes
through the delivery of reactor plant and associated
components. Additionally, it provides frontline
support across the world for reactor plant
equipment from its Operations Centre in
Derbyand supports the submarines when in
the Barrow‑in‑Furness shipyard and the naval
bases at Devonport and Faslane.
Rolls‑Royce will be doubling thesize of their
Raynesway site, after a needto meet the
growth in demand from theRoyal Navy and
following last year’s AUKUS announcement.
The increase in demand will see Balfour Beatty
build new manufacturing and office facilities as
well as the adjoining site infrastructure.
The increase in work from the Ministry of
Defence (MOD) will create 1,170 skilled roles
atRolls‑Royce, across a range of disciplines
including manufacturing and engineering.
WSP, the leading multi‑disciplinary professional
services consultancy, has been selected as
Rolls‑Royce’s non‑fissile design partner. Balfour
Beatty andWSP will work closely over the next
decadeto bring the Raynesway site
expansionplans to life.
UK energy transition and security
UK transport
UK defence and security
US buildings
Balfour Beatty’s growth markets Rising demand for essential
localroad maintenance
The UK faces a local road maintenance backlog
ofbetween £7.6 billion and £15.6 billion. Despite
central funding allocations, such as the pothole
fund and highways maintenance block, and the
£8.3 billion earmarked for maintenance allocated
under the Network North Plan for the 2023/24 to
2033/34 period, local authorities still report funding
gaps amid rising maintenance cost and increasing
repair needs. This presents an opportunity to
deliver cost‑effective maintenance solutions and
technology‑driven infrastructure management.
Sustained rail investment
Under Control Period 7 (2024–29), £45 billion
isallocated to Network Rail for infrastructure
upgrades, including track renewals, bridge
replacements, station refurbishments, and
electrification. HS2 continues with Government
funding for phase one and tunnelling to Central
London. The Government is investing in
electrification to phase out diesel‑only trains by
2040, with projects like the TransPennine route
upgrade and Midland Main Line electrification
involving major work, including overhead line
installation and signalling upgrades.
Prioritised defence
andsecurityspending
Amid rising geopolitical tensions, the Government
has reaffirmed its commitment to maintaining a
nuclear deterrent and advancing the development
of a new class of submarine, the SSN‑AUKUS,
necessitating substantial infrastructure investment.
Additionally, there is a clear acknowledgement of
the need to modernise other defence infrastructure
to strengthen the UK’s military capabilities, which
is driving a significant pipeline of opportunities.
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
1818
Market trends
Construction spending in our target states is
projected to surpass the national average,
drivinggrowth for our business amid favourable
broader trends.
Demographics spur demand
foreducation facilities
School districts continue to focus on building and
renovating K‑12 facilities to tackle overcrowding
and ageing infrastructure, while higher education
prioritises student accommodation and teaching
facilities. In Balfour Beatty’s chosen states,
education construction is expected to reach
US$65 billion by 2029.
Steady pipeline of government
building modernisation projects
A steady pipeline of projects is expected to drive
the modernisation, repair, and renovation of
ageing, underfunded government buildings stock
to meet current needs. For example, the General
Accountability Office (GAO) reports that 903
federal buildings require repairs and alterations,
with 44 needing urgent attention. Consequently,
the government buildings segment in Balfour
Beatty’s target states is projected to grow at
11%per annum from 2024 to 2029.
Our chosen states
US Construction
Balfour Beatty builds the structures and infrastructure that enhance
how people live, work, learn and play in specific, high-growth regions.
CONSTRUCTION SPENDING IN OUR
CHOSEN STATES FORECAST TO GROW 7%
PER YEAR
Construction spending, US$bn, nominal
2024
612
861
2029
Infrastructure
Non-residential buildings
Residential buildings
Source: Dodge Construction Central
+7%/yr
Why these areas
@ Strong growth in the Mid‑Atlantic
andCarolinas
@ Diversification potential in the Southeast
@ Demographic‑driven projects in Texas
@ Leading education builder in California
@ Prominent data centre presence in
theNorthwest
Georgia Legislative
OfficeBuilding
Working in partnership withGarbutt Construction
and SG Contracting, Balfour Beatty began the
construction on the Georgia Legislative Office
Building in Atlanta.
The 350,000 square‑foot facility is designed
to meet the needs of the General Assembly.
The eight‑storey building will house all
legislative offices and supporting functions,
including office suites for legislators, meeting
and committee rooms, and dedicated areas
for the public, press and lobbyists.
This is one of three significant initiatives
currently underway by the team for the
Georgia State Financing and Investment
Commission, including major renovations
tothe Capitol building. These projects
demonstrate the team’s focus on delivering
impactful solutions for Georgia’s evolving
infrastructure needs.
“We are truly honoured to be part of this
transformative project for the State of
Georgia. It’s an incredible opportunity for our
team to contribute to a landmark development
that will serve as a cornerstone for the state’s
legislative operations for generations to come,”
says Scott Skidelsky, President of the
Southeast geography.
MARKET REVIEW CONTINUED
Photo credit: rendering courtesy of Nelson Worldwide.
19Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Resilient hospitality and
leisurepipeline
The US hotel construction pipeline continues to
expand, with projects up 11% and rooms up 6%
year‑on‑year. Dallas, Atlanta, Phoenix, and Austin
rank among the top five US cities for pipeline
activity, as the sector is set to reach US$14 billion
in2029 in Balfour Beatty’s chosen states. Despite
low consumer sentiment, strong consumer
spending fuels investment in convention centres,
stadiums, arenas, and theme parks, with
public‑private partnerships and infrastructure
expansion driving the most promising projects.
Office recovery and booming
datacentre demand
Office construction spending in Balfour Beatty’s
target states is expected to reach US$40 billion
by2029, driven by demand for hybrid workspaces,
rising return‑to‑office trends, and reversal in
extremely high vacancy rates. Data centre
construction will continue to grow at pace, with
Amazon, Meta, Google, and Microsoft set to
invest US$178 billion in 2025, fuelled by surging
cloud adoption and AI infrastructure demand.
Sacramento International Airport’s new pedestrian walkway
In August 2024, Balfour Beatty began construction
activities to deliver the Sacramento International
Airport Pedestrian Walkway project. The Pedestrian
Walkway project is part of SMForward, a $1.3 billion
capital improvement programme to expand the
Sacramento International Airport (SMF) to
accommodate future anticipated demand.
Oncecomplete, the new walkway will support
the airport’s traveller growth well into the future
by connecting SMF’s Terminal B to Concourse B
via a sky bridge, providing passengers with the
ability to walk or ride the airport’s existing
automated people mover.
The project team will deliver a quarter‑mile
walkway featuring 1,800 tonnes of steel, 3,425
cubic yards of concrete, four moving walkways,
four escalators and three elevators along a
panoramic corridor.
As the first undertaking of the airport’s expansion
programme, the Pedestrian Walkway project is
the initial step in leveraging transformative
partnerships and creative financing solutions
todeliver the future of SMF. Throughout the
programme’s projected duration, 800 jobs will
be created in the first four years alone, contributing
to economic growth opportunities for local
businesses and further development in
thecommunity.
Balfour Beatty has more than 75 years of
extensive aviation experience in delivering
complex and recognisable airport projects
across the US. The Company specialises in
building landside and airside facilities and
hasworked with clients including Los Angeles
World Airports, Raleigh‑Durham International
Airport, Jacksonville International Airport and
Dallas‑Fort Worth International Airport.
The project team is leveraging lean construction
methods, innovation and technology, including
live estimating, Building Information Modelling,
OpenSpace and offsite prefabrication to deliver
SMF’s Pedestrian Walkway. The project is
scheduled for completion in 2026.
Balfour Beatty is truly honoured to
bethe selected building partner on
the pedestrian walkway. Sacramento
International Airport is our local
airport, so we take great pride in
bringing this project in for a nice
smooth landing and turning it over
tothe community.”
Kyle Frandsen
Vice President, Sacramento,
Balfour Beatty US Buildings
Stable demand for
multifamilyhousing
Higher financing and maintenance costs and slow
rental growth has depressed multifamily housing
activity in recent years, but a combination of
continued job growth, elevated mortgage rates,
and rising house prices, continues to sustain
demand. Such strong demand dynamics in
BalfourBeatty’s chosen states is expected to
seemultifamily activity outperform the national
outlook, with 16% annual construction spending
growth projected from 2024 to 2029.
Economic growth maintains
ongoing transport investment
Continued US economic expansion and a return
topre‑pandemic travel patterns are expected to
sustain demand for new and upgraded transport
infrastructure. Investment in road and airport
construction will focus on expanding capacity
andmodernising facilities to support steadily
increasing traffic and passenger volumes. This
rising demand is driving major projects, including
the I‑35 Capital Express Central project and the
SMForward initiative at Sacramento International
Airport, which aims to expand the airport in
anticipation of future passenger growth.
UK Energy transition and security
UK transport
UK defence and security
US buildings
Balfour Beatty’s growth markets
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
2020
Gammon
For over 65 years,Gammon, Balfour Beatty’s joint venture with Jardine Matheson,
has forged a reputation for delivering high-quality projects throughout Asia.
HONG KONG CONSTRUCTION SPENDING FORECAST TO GROW 5% PER ANNUM
Construction spending, HK$bn, nominal
Hong Kong
Northern Metropolis
The HK$224 million Northern Metropolis project aims to turn 30,000
hectares of land into a housing and economic powerhouse, with key
projects including the development of the San Tin Technopole, a new
government building in Kwu Tung North, the new Huanggang Port
building and the North District hospital expansion.
Transport infrastructure extension
The Major Transport Infrastructure Development Blueprint lays the
foundation for extensive expansion of Hong Kong’s existing transportation
network, with the railway network set to increase from 270km to nearly
390km and major roads from 260km to nearly 380km.
Enhanced aviation investment
The Airport Authority Hong Kong expanded its Airport City blueprint,
more than doubling the scale of development. New projects include an
ecosystem for the art industry, AsiaWorld‑Expo Phase 2 development,
amarina with ancillary facilities and a fresh food market.
SINGAPORE CONSTRUCTION SPENDING FORECAST TO GROW 4% PER ANNUM
Construction spending, HK$bn, nominal
Singapore
Rail and aviation expansion
Phase 2 of the Cross Island Line will see the construction of six stations
from Turf City to Jurong Lake District. The Changi East airport development,
spanning 1,080 hectares, includes the new Terminal 5 project, a three‑runway
system, tunnel and underground systems construction and the Changi
East Industrial Zone.
Green Data Centre Roadmap
Singapore’s Infocomm Media Development Authority (IMDA) has
launched a Green Data Centre (DC) Roadmap in May 2024 that charts
asustainable pathway for the continued growth of DCs in Singapore.
Theroadmap is aimed to support the country’s AI and compute
developments in the digital economy.
Hospitality development
The Resorts World Sentosa expansion encompasses the construction of
two new hotels, enlargement of the Singapore Oceanarium, the addition
of Universal Studio’s Minion Land, three levels of retail and dining called
The Forum and renovations of three existing hotels.
2024
240
302
2029
+5%/yr
2024
352
435
2029
+4%/yr
MARKET REVIEW CONTINUED
Gammon enables
three-runway system
launch atHong Kong
InternationalAirport
The official inauguration of the three‑runway
system at Hong Kong International Airport in
November 2024 further strengthens Hong
Kong’s position as a major international
aviation hub.
Gammon has contributed significantly to
thiskey milestone through delivering the key
tunnel structure of the Automated People
Mover, Baggage Handling System and
Terminal 2 Expansion Works projects, including
the tunnel beneath the runway and taxiways,
essential infrastructure for air traffic control,
and viaduct and road systems.
It also completed the façade and roof works
of the Terminal 2 building, all integral parts
ofthe Airport Authority Hong Kong’s
MasterProgramme.
Market trends
Gammon operates within markets that areprojected to continue to grow over the nextdecade, whilst continuing to explore newopportunities.
Infrastructure
Non-residential buildings
Residential buildings
Infrastructure
Non-residential buildings
Residential buildings
Source: IHS MarkitSource: IHS Markit
21Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
SHARE OF
PORTFOLIO VALUE
UK roads 13%
UK student
accommodation 11 %
UK healthcare 11 %
UK energy transition 5%
UK other 2%
US military housing 48%
US student
accommodation 5%
US residential 5%
New investments
@ 296‑unit multifamily housing project in
New Jersey (Philadelphia metropolitan
statistical area)
@ 564‑bed purpose‑built student housing
asset in Denton, Texas
Disposals
@ Sell‑down of 2,540 University of Texas
(Dallas) student housing project to a
5%shareholding
Student accommodation
@ Construction underway for student housing
projects at The University of Sussex in
the UK and William & Mary in the US
@ Development contract executed for new
1,070‑bed student accommodation at
University of Texas (Austin)
New military homes
@ New Government funding at Fort
Leonard Wood and Fort Eisenhower
tbuild new houses
@ Potential ground lease extension at Fort
Carson to fund faster redevelopment
Energy upgrades
@ Delivered green energy generation
andefficiency solutions to multiple
militarybases
First UK EV installations
@ Urban Fox electric vehicle chargers
installed in Dundee and across the
Balfour Beatty estate
US P3
@ Los Angeles International Airport, Automated
People Mover construction progress
Financing critical infrastructure
@ M25 design, build, finance and
operatecontract
Infrastructure Investments
Balfour Beatty Investments is recognised as a leader in public-private
partnerships and other developments in the UK and US.
An actively managed portfolio investing inthegrowth
and enhancement of public andprivateinfrastructure.
Investment focus
Demand for student accommodation
remains strongforboth
conventionaland off‑campus
studenthousing projects.
As the UK’s energy mix transitions
tomore renewable sources, the
Group continues to evaluate these
changes for both investment and
construction opportunities.
Growth in EV adoption
providesopportunities for the
Groupin the residential charger
deployment market.
The Group continues to develop
andmaintain a large network of
privatised military housing facilities
across the US.
STUDENT ACCOMMODATION NASCENT ENERGY TRANSITIONEV CHARGING INFRASTRUCTURE
MILITARY HOUSING
£1.3bn*
* Directors’ valuation as at 31 December 2024.
University of Sussex,
West Slope Residences.
Fort Bliss Military Housing,
Texas.
Urban Fox UEone retractable
EV charger.
US multifamily accommodation
continues to come to market,
providing opportunity to
investintheregeneration of
theseproperties.
MULTIFAMILY HOUSING
Landings at Lake Gray,
Jacksonville.
Humber Gateway
OFTO, UK.
Legislation allowing public‑private
partnership (P3) projects has passed
in 42 states, creating opportunities
incourthouse, school, government
building and transport projects.
PUBLIC-PRIVATE PARTNERSHIP PROJECTS
Automated People Mover, Los Angeles
International Airport.
2222
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Balfour Beatty plc | Annual Report and Accounts 2024
Digital and AI
advancements
By capitalising on our investment in a central data
lake – a secure repository containing billions of
data points from across Balfour Beatty – we are
swiftly integrating new AI and digital technologies.
This is revolutionising how we manage and deliver
projects. We’re also empowering our workforce
with personal AI assistants to streamline repetitive
tasks, allowing them to focus on more complex,
high‑value work.
Today, over 90% of our UK projects and contracts
leverage our digital toolkit to enhance efficiency
and compliance. Tasks such as progressive
assurance, checklists and permits are now digital,
supporting our Zero Harm and Right First Time
focus by capturing safety and quality observations
through our Observations App. In 2024, over
470,000 observations and examples of good
practice were submitted across the Group –
anincrease of 70,000 compared to the previous
year. These observations guide interventions that
ensure safety and meet quality standards for
ourcustomers.
We have also continued to roll out new hardware
and technology. Notably, we’ve mandated the
useof human form recognition cameras on
various heavy plant machinery in the UK,
includingexcavators, dumpers, and wheeled
loaders. These cameras alert operators to nearby
personnel, reducing the risk of accidents. Incident
data is captured on a central dashboard, enabling
us totrack trends and address safety concerns
moreeffectively.
470,000
OBSERVATIONS
RAISEDIN 2024
90%
OF UK PROJECTS
USE DIGITAL TOOLS
ABOVE
Jay Saddington, Survey and Product
Communications Support with Balfour
Beatty’s robotic dog ‘Spot’ which documents
construction progress using autonomous
3Ddata capture on site.
Our digital-first approach is improving safety,
productivity and assurance.
23Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Digital Dynamo
Award
This category celebrated an individual
who embraces technology to redefine
howwe do business.
Winner: George McArthur
Concrete Technical Manager, HS2 Major Projects
George has demonstrated exceptional leadership and
innovation in revolutionising fresh concrete quality control
through the implementation of in‑transit digital monitoring.
His initiative has not only eliminated the need for manual
testing at concrete pours, but also significantly reduced
costsand improved efficiency across a large‑scale project.
Above: Award presentation photo. (Left to right) Jon Ozanne, Chief
Information Officer, George McArthur, Concrete Technical Manager
– HS2 Major Projects, and Clare Barclay – Microsoft CEO, UK.
ABOVE
At Balfour Beatty, we use drones to provide real‑time data
and high‑resolution aerial imagery for site inspections,
surveying and progress tracking.
READ MORE ABOUT OUR ICON
AWARDS EVENT ON p74
AI collaboration for
enhancedoutcomes
Our in‑house AI assistant, StoaOne, is now
supporting 1,500 UK‑based employees by
automating mundane tasks. This allows our
experts to dedicate more time to their core work.
For example, on the Midlands Metropolitan
University Hospital project, StoaOne categorised
and prioritised over tens of thousands of data
points, playing a crucial role in the successful
handover ofthe 770‑bed hospital.
In addition to developing our proprietary AI tools,
we are adopting market‑leading solutions. In our
US Balfour Beatty Communities business,
AI‑powered software now generates accurate
1Dand 3D as‑built drawings from photographs,
streamlining project closeout. In the UK, AI is
being used to assess site supervisors’ competencies
before they join our teams, while our work winning
teams use AI tools to enhance processes and
improve bid submissions.
To accelerate our AI adoption, in November 2024,
we hosted ‘The Big AI Challenge’ hackathon with
70 experts from Balfour Beatty and Microsoft.
Theevent explored how we could leverage data
and AI to bring six innovative ideas, submitted
through our My Contribution programme, to life.
The solutions developed during the event include
automating the generation of inspection and test
plans to prevent costly rework and clustering
highways repairs to improve productivity by
reducing the time spent travelling between
eachrepair, are now being refined for
implementation in 2025.
FIND OUT MORE ABOUT THE
BIGAICHALLENGE ON p78
Our recent ‘Big AI
Challenge’ brought
together some of the
greatest minds from
across Balfour Beatty
andMicrosoft to
generatesolutions to
some of our biggest
business opportunities.”
Jon Ozanne,
Chief Information Officer, Balfour Beatty
2424
Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR STRATEGY: BUILD TO LAST
Delivering Build to Last
Build to Last is Balfour Beatty’s strategy for continuous
improvement. It is the day-to-day guide we use to
uphold our purpose and underpins everything we do.
Our strategy
Our strategy, Build to Last, is fundamental to how we are
building a market‑leading Balfour Beatty for the next 100 years.
Itis 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.
Our KPIs
Our 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
We are thoughtful and agile, continuously challenging
ourways of working to improve health and safety and
productivity, eliminate waste and enhance quality to make
usmorecompetitive.
NET CASH £m
excluding non‑recourse borrowings
andlease liabilities
2024:
£943m
UNDERLYING PROFIT/(LOSS)
FROMCONTINUING
OPERATIONS£m
2024:
£248m
p86
Our highly skilled colleagues
andpartnersset us apart
Our people are leaders. We’re the experts of today and inspire
the leaders of tomorrow. We invest in our colleagues, building
their skills and knowledge, to develop a passionate, world‑class
workforce drawn fromallparts of our society.
EMPLOYEE ENGAGEMENT
INDEX%
2024:
84%
p68
Lean Expert
More information
Find out how our strategy is supported bythe current
market on pages 14 to 21. Forthe risk appetite in the
context of the Company values seepage 92.
815
22
842
23
943
24
512
19
337
18
335
17
163
173
15 16
581
20
790
21
22 23 2419181716 20 21
279
228
248
221
205
196
69
51
197
(74)
15
80
76
65
60
58
60
66
75
23 24221918171615 20 21
81
84
25Balfour Beatty plc | Annual Report and Accounts 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
We deliver on our promises
andwedothe right thing
We build trust every day by delivering on our promises,
always. We’re accountable for our decisions and work
withthe upmost integrity to ensure we’re making the
rightchoices.
CUSTOMER SATISFACTION
AVERAGE%
2024:
96%
p46
We make safetypersonal
Safety is our licence to operate. Nothing is more important
than the health, safety andwellbeing of ourcolleagues
andthe communities we serve. Weareunrelenting and
uncompromising in our commitmentto achieving Zero Harm.
LOST TIME INJURY RATE (LTIR)
excluding international joint ventures
2024:
0.09 LTIR
p40
We act responsibly to protect and
enhance ourplanet and society
We leave a positive legacy for the people we work with,
thecommunities we work in, and the world in which we
operate. We want toenhance our impact on the environment,
working with our supply chain partners, customers and
communities to ensure our choices are sustainable.
TOTAL SCOPE 1 AND 2 EMISSIONS
(tCO
2
e) 000s
2024:
144 tCO
2
e 000s
p48
Safe SustainableTrusted
95
96
0.11
0.09
145
144
95
96
97
94
91
82
94
95
0.15
0.19
0.16
0.18
0.24
0.24
0.16
0.14
147
138
131
155
191
196
122
124
23 24 2423 23 2422 22 2219 19 1918 18 1817 17 171615 1615 161520 20 2021 21 21