Annual Report andAccounts 2025

Building

NewFutures

INSIDE THIS REPORTABOUT US

Balfour Beatty is a leading

international infrastructure group

with 26,0 0 0 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.

Discover more online at balfourbeatty.com

MARKET REVIEW

Well positioned infour

growth markets

Capitalising on high-growth

markets where the Group has

the capabilities and a proven

track record to secure

newopportunities.

OUR 2025 HIGHLIGHTS

From project milestones, contract

wins and digital advances to

record order book growth, take a

look at Balfour Beatty’s highlights

and achievements from 2025.

DIGITAL

Reimagining construction

through digital innovation

Balfour Beatty is positioned to

lead the industry in digital and

future-ready ways of working.

Front cover image: Denzel Chisango, Apprentice Site Engineer on the M3 Junction 9 Improvement Scheme

in Winchester. Balfour Beatty is working in a joint venture for National Highways to deliver major road widening

and improvements works to increase capacity and reduce congestion.

Read more on page 2. Read more on page 15. Read more on page 20.

FINANCIAL PERFORMANCECONTENTS

STRATEGIC REPORT

1 Financial performance

4 Balfour Beatty at a glance

6 Group Chair’s introduction

8 Our business model

9 Our strategy: Build to Last

10 Group Chief Executive’s review

15 Market review

20 Digital

21 Stakeholder value

24 Operational review

33 Directors’ valuation of the

Investmentsportfolio

35 Health, safety and wellbeing

40 Ethics and compliance

41 Tax strategy

42 Sustainability

56 Our people

61 My Contribution (MyC)

62 Non-financial and sustainability

information statement

63 Measuring our financial performance

69 Chief Financial Officer’s review

72 Risk management

90 Viability statement

91 Climate change and Task Force

onClimate-related Financial

Disclosures(TCFD)

GOVERNANCE

99 Board leadership andCompanypurpose

107 Stakeholder engagement

111 Division of responsibilities

114 Composition, succession andevaluation

117 Nomination Committee

121 Safety and Sustainability Committee

124 Audit and Risk Committee

130 Remuneration Committee

161 Directors’ report

FINANCIAL STATEMENTS

165 Independent auditor’s report to the

members of Balfour Beatty plc

174 Financial statements

184 Notes to the financial statements

OTHER INFORMATION

260 Unaudited Group five-year summary

261 Shareholder information

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

REVENUE¹ £m

8,931

9,595

10,015

10,767

8,280

24 25

24 25 24 2521

21 2122

22 2223

23 23

UNDERLYING PROFIT FROM

OPERATIONS (PFO) £m

197

279

228

248

252

UNDERLYING EARNINGS

PERSHARE (BASIC) Pence

37.3

43.6

47.6

29.7

47.5

ORDER BOOK¹

£bn

16.5

18.4

22.7

16.1

17. 4

NET CASH

£m

842

943

1,446

790

815

STATUTORY NET CASH/

(BORROWINGS) £m

435

446

837

418

441

STATUTORY REVENUE

£m

7,185

7,629

7,9 9 3

8,234

9,489

STATUTORY PROFIT

FORTHEYEAR £m

194

178

264

139

287

STATUTORY EARNINGS

PERSHARE (BASIC) Pence

35.3

34.2

52.6

21.3

46.9

DIVIDENDS PER SHARE

Pence

9.0

10.5

11.5

12.5

14.0

KEY

Alternative 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 63 to 68.

BUILDING NEW FUTURES

2025 highlights

and achievements

400

new apprentices and graduates joined

ourEarly Careers Festival #ECFest

US$746m

secured contract for

Interstate 35 in Austin, Texas

INVESTING IN INNOVATION

£ 7.2m

transforming how Britain builds

with a £7.2 million AI investment

Find out more about our Copilot

investment on page 20.

BALFOUR BEATTY VINCI REOPENED

M6 EARLY AFTER HS2 VIADUCT SLIDE

9.5hrs

ahead of the schedule

Scan or click to watch

the event highlights.

Scan or click to

find out more.

Scan or click to find out more.

INDUSTRY-LEADING EMPLOYEE

ENGAGEMENT SCORE

83%

8% above our industry benchmark

Read more on page 17.

metre-long

pedestrian bridge

Scan or click to

find out more.

£833m

Net Zero Teesside

contractsecured

Scan or click to

find out more.

£1.012bn

Ⓐ

social value generated in the UK

Balfour Beatty plc | Annual Report and Accounts 2025

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BALFOUR BEATTY AT A GLANCE

International

infrastructure

experts

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.

OUR PURPOSE

Building New Futures

We are leading the transformation of our industry to meet the challenges of the future.

OUR STRATEGY

Build to Last

This is our strategy for continuous improvement.

OUR VALUES

Our values reflect the norms and beliefs that drive the way weworkand how we measure

ourselves.

OUR BEHAVIOURS

Our behaviours reflect the things we will do to consistently delivertothe standard set out

in our values.

OUR CODE OFETHICS

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.

Find out more about our strategy and values on page 9.

GROUP HIGHLIGHTS

REVENUE

£10,767m

UNDERLYING PROFIT BEFORE TAX

£291m

NUMBER OF EMPLOYEES

26,000

DIRECTORS’ VALUATION

INVESTMENTSPORTFOLIO

£1.1bn

1 Including share of joint ventures and associates.

Scan or click to find

out more about our

Cultural Framework.

United Kingdom

£12.9bn

Hong Kong

£2.0bn

United States

£7.8bn

GROUP ORDER BOOK

£22.7bn

LEAN EXPERT TRUSTED

SAFE SUSTAINABLE

TALK

POSITIVELY

COLLABORATE

RELENTLESSLY

ENCOURAGE

CONSTANTLY

MAKE A

DIFFERENCE

VALUE

EVERYONE

Balfour Beatty plc | Annual Report and Accounts 2025

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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.

Central Rail Systems Alliance – Hanslope Junction

renewal, UK.

River Pointe in Conroe, multifamily housing,

Texas,US.

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

£18.7bn

Order book

£4bn

Order book

£1.1bn

Directors’ valuation

£ 8,711m

Revenue

£171m

Underlying profit fromoperations

£182m

Statutory profit fromoperations

£629m

Revenue

£16m

Underlying profit before tax

£14m

Statutory profit before tax

£1,427m

Revenue

£122m

Underlying profit fromoperations

£145m

Statutory profit fromoperations

Find out more in our Operational review on

pages 24 to 28.

Find out more in our Operational review on

pages 29 and 30.

Find out more in our Operational review on

pages 31 and 32.

Find out more in our Business model section on page 8.

1 Including share of joint venture and associates.

Balfour Beatty plc | Annual Report and Accounts 2025

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GROUP CHAIR’S INTRODUCTION

“ 2025 has been a defining

year for Balfour Beatty.”

Charles Allen

Lord Allen of Kensington, CBE,

Non‑executive Group Chair

Discipline.

Momentum.

Purpose.

Dear Shareholders,

2025 has been a defining year for Balfour Beatty.

The Board has overseen disciplined delivery,

ensured a robust and well governed executive

succession transition and continued to strengthen

the culture that underpins our long-term

performance and value creation for

allstakeholders.

Our order book is of high quality, our balance

sheet remains strong, and our customer

relationships continue to deepen. These are not

short-term achievements. They reflect more than

a decade of cultural transformation and operational

discipline, providing confidence in our future in a

world that demands consistency, resilience and

long-term thinking.

Planned leadership transition

This was also a year of important leadership change.

On behalf of the Board, I pay warm tribute to

both Leo Quinn, former Group Chief Executive

and Phil Harrison, Chief Financial Officer,

foradecade of transformative leadership.

Leostrengthened our foundations, simplified

thebusiness, and raised the bar across our

industry for safety, execution and performance.

We thank him for his vision, his courage, and his

unwavering commitment to building a stronger,

more focused and higher performing company.

Ithank Phil for his exceptional leadership and

contribution over the last 10 years which has

been instrumental in building Balfour Beatty’s

financial strength and resilience, creating

substantial value for shareholders, and positioning

the Group extremely well for the future.

As part of the Board’s long-term succession

planning, in September, we were pleased to

welcome Philip Hoare as Group Chief Executive.

Philip brings deep sector expertise, a people

centred approach, and a sharp focus on customers

and delivery. He has made a confident and proactive

start, engaging with teams across the Group,

listening to customers and partners, and reinforcing

the culture and purpose that define Balfour Beatty.

His leadership blends continuity where it matters

with fresh perspective where it counts, and the

Board is confident he will build on our strong

foundations and further strengthen and evolve

the business.

Balfour Beatty plc | Annual Report and Accounts 2025

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In February, we announced that Myles Westcott

will succeed Phil Harrison as Chief Financial

Officer following an extensive search process.

Myles will join later this year and brings more

than 30 years of finance leadership experience,

including almost 25 years at BAE Systems plc,

amultinational defence and security corporation.

Once Myles joins the Group, Phil Harrison will

remain in an advisory capacity for four months

toensure a smooth transition.

Board changes

At the 2025 AGM, Rudy Wynter, who has over

35 years’ of experience in the gas and electricity

industry was formally appointed by shareholders

as an Independent Non-executive Director,

bringing significant experience in regulated

infrastructure, operational leadership and

safety-critical environments.

Zero Harm remains non-negotiable

Our culture remains the foundation of our

performance, and above all, Zero Harm is

non-negotiable. The tragic incident last May

onaUS Buildings Federal project in Baltimore,

where a colleague working for a subcontractor

lost their life while assisting a lifting operation,

was a stark and sobering reminder of the risks

inherent in our industry. As a Group we examined

the circumstances of this tragic incident with

great care and the Board continues to oversee

the strengthened controls and cultural

reinforcement that has followed.

Everyone has the right to return home safe,

every day. We remain unwavering in ensuring

that this principle guides every decision we make.

Shaping a sustainable business

At Balfour Beatty, we build assets that communities

rely on for generations. That long-term responsibility

shapes our approach to sustainability – from

reducing carbon and enhancing biodiversity,

topromoting social mobility through skills,

apprenticeships and internships. It also drives our

commitment to responsible innovation, including

digital tools and AI, which we use to enhance

productivity, quality and assurance across our

projects and supply chain.

This year has seen continued investment in our

early careers talent with 7.4% of our UK workforce

now in ‘earn and learn’ roles. This commitment is

mirrored across our US and Gammon operations,

where we continue to grow and strengthen

ourearly careers communities to build

long-termcapability.

In July we announced a £7.2 million investment

in Microsoft 365 Copilot to support responsible

innovation and productivity. Early progress and

adoption across the business has been strong,

with our approach recognised by Microsoft as an

example of leading enterprise AI adoption in

oursector.

Forcustomers, communities

andshareholders.

2026 marks Balfour Beatty’s sixth consecutive

year of share buybacks under our capital allocation

framework. Our record order book, differentiated

capabilities, and strong financial position give the

Board confidence in our ability to continue

delivering attractive returns to shareholders,

while maintaining appropriate investment in the

business and a robust capital base. In 2025, we

returned £189 million to shareholders through

buybacks and dividends, taking total distributions

since 2021 to £945 million. This confidence is

reflected in the c.£200 million share buyback

programme announced for 2026 and the Board’s

recommendation of a final dividend of 9.8 pence

per share, bringing the total 2025 dividend for the

year to 14 pence per share.

SECTION 172 STATEMENT

The Directors have had regard to their

duties under Section 172 of the

Companies Act 2006 throughout the

year. The Board considers the long-term

consequences of its decisions and the

interests of the Group’s key stakeholders,

in promoting the long-term success of

the Company. The Board reviews

stakeholder engagement mechanisms

regularly and ensures that stakeholder

perspectives are understood and taken

into account in Board discussions and

decision-making.

Further details of stakeholder engagement,

sustainability matters, risk management

and the Board’s governance and

decision-making framework are set out

on pages 107 to 110, 42 to 55, 72 to 89

and 111 to 113 of this Annual Report.

Conclusion

I am proud of the progress we have made and

confident in the road ahead. My thanks go to

ourpeople for their skill and dedication; to our

customers and partners for their trust; and to

ourshareholders for their continued support.

Together, we will build on firm foundations,

shape new horizons and deliver lasting value.

Charles Allen

Lord Allen of Kensington, CBE

Non‑executive Group Chair

10 March 2026

US: Charles pictured on a site visit to a mixed-use commercial

development in Texas, US with members of the Board, Phil

Harrison, Barbara Moorhouse, Philip Hoare, Group Chief

Executive, and Gabby Costigan MBE.

Hong Kong: (from left to right) Charles with Kevin O’Brien,

Gammon’s Chief Executive and Philip Hoare, Group Chief Executive,

at Gammon’s Leadership Connect event in Hong Kong.

UK: Charles during a visit to Balfour Beatty Living Places’

Buckinghamshire Highways depot in Aylesbury, meeting with

teams delivering essential services for local communities.

Balfour Beatty plc | Annual Report and Accounts 2025

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OUR BUSINESS MODEL

HOW WE WORKAt Balfour Beatty, we finance,

develop, build, maintain and

operate the increasingly critical

infrastructure that supports

national economies anddeliver

projects at the heart of

localcommunities.

UNDERSTANDING

BALFOURBEATTY

Scan or click to find

out how we are

shaping society.

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.

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.

CAPABILITIES

@ Provides construction services across key

infrastructure sectors:

• Energy: design and construction of

large-scale, complex energy assets.

• Roads: design and construction of strategic

and major roads in the UK, US and Hong

Kong, including widening and conversion of

existing routes.

• Railways: design and management of railway

systems, delivering major multi-disciplinary

projects, track work, electrification and

powersupply.

• Airports: construction and refurbishment of

passenger terminals, transit facilities, airfield

infrastructure and associated civil works.

@ Builds commercial, defence, education,

government, healthcare, leisure, retail, and

residential buildings, providing design and

build, mechanical and electrical engineering,

shell and core, fit-out and interior

refurbishment services.

@ Delivers construction and build services for

other infrastructure, including flood and coastal

defences and public realm.

@ Constructs and maintains electricity networks

for power transmission anddistribution.

@ Provides maintenance, asset and

networkmanagement and design services

forhighways, railways and otherpublicassets.

@ Delivers support services across a range

of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.

@ Realises asset value through disciplined

disposals executed with a clear focus on

shareholder value.

CUSTOMERS

Public, private and regulated entities.

Balfour Beatty plc | Annual Report and Accounts 2025

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2025

83%

2025

95%

2025

0.08 LTIR

2025

140 tCO

2025

£252m

2025

£1,446m

OUR STRATEGY: BUILD TO LAST

NET CASH £m

790

815

842

943

1,446

21 22 23 24 25

UNDERLYING PROFIT

FROMCONTINUING OPERATIONS £m

197

279

228

248

252

21 22 23 24 25

EMPLOYEE ENGAGEMENT INDEX %

21 22 23 24 25

CUSTOMER SATISFACTION

AVERAGE %

21 22 23 24 25

LOST TIME INJURY RATE (LTIR)

excluding international joint ventures

0.19

0.15

0.11

0.09

0.08

21 22 23 24 25

TOTAL SCOPE 1 AND 2 EMISSIONS

(tCO

e) 000S

138

147

145

144

140

21 22 23 24 25

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.

LINK TO OUR KPIs

LEAN

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.

EXPERT

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.

TRUSTED

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.

SAFE

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.

SUSTAINABLE

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.

Find out more

onpages:

p69p69

p56 p40 p35 p42

Our Build to Last strategy is measured against our five values:

Balfour Beatty plc | Annual Report and Accounts 2025

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GROUP CHIEF EXECUTIVE’S REVIEW

A powerful

platform for

thenext chapter

ofgrowth

Since joining in September, I’ve been truly

impressed by the depth of talent across

BalfourBeatty and the inherent strength of

theGroup. Our capabilities, the quality of our

order book and our disciplined approach to risk

provide a powerful foundation for the future.

In 2025, the Group delivered on expectations

with further earnings growth, fuelled by strong

operational performance and momentum in chosen

growth markets, where our end-to-end expertise,

proven delivery and long-standing customer

relationships continue to differentiate

BalfourBeatty.

As the industry faces unprecedented demand

and a widening skills gap, we’ll continue to invest

in our people and in technology, driving further

gains in productivity and operational excellence.

Supported by a robust balance sheet and a

resilient diverse business model, we are

incredibly well positioned to respond to market

dynamics, accelerate profitable growth, improve

margins and drive value creation for our

customers, communities, and shareholders.

Further profitable growth

achievedin2025

Balfour Beatty delivered a further successful

period of operational and financial performance

in2025. For a fifth consecutive year, the Group

achieved profitable growth from its earnings-based

businesses (Construction Services and Support

Services), demonstrating the consistency and

reliability of its diverse portfolio, while materially

increasing the forward order book, operating

cashflow and shareholder returns.

The Group’s ambition to increase earnings-based

business PFO in 2025 was achieved with a 16%

increase to £293 million, which contributed to the

Group’s underlying profit for the year improving

to £239 million (2024: £227 million). Non-underlying

items after tax were a credit of £25 million (2024:

charge of £49 million). The year end order book

grew by 23%, driven by the addition of long-term

power generation projects in the UK, average net

cash increased to £1,212 million compared to

£766 million in 2024 and £189 million of cash was

returned to shareholders (2024: £161 million) through

a combination of dividends and share buybacks.

“ Since joining in

September, I’ve been truly

impressed by the depth

oftalent across Balfour

Beatty and the inherent

strength of the Group.

Our capabilities, the

quality of our order book

and our disciplined

approach to risk provide

apowerful foundation

forthe future.”

Philip Hoare

Group Chief Executive

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Outperformance in UK operations

drives portfolio progress

Profitable growth was delivered in both the

earnings-based businesses in 2025. Balfour Beatty’s

geographical, operational and contract diversity

remains a key strength of the Group and was

once again an important factor in the consistency

of the Group’s financial results. Construction

Services PFO increased 8% to £171 million,

asgrowth in the UK Construction PFO margin

toabove its long-standing 3% target was partially

offset by lower profitability in US Construction,

where growth in US Buildings was outweighed

by cost overruns at a US Civils project. Gammon’s

PFO was also slightly down due to lower revenues,

although PFO margin improved as forecast.

Support Services grew revenue by 18% while

delivering PFO margins ahead of its targeted

6-8% range, resulting in PFO increasing 31% to

£122 million. Infrastructure Investments achieved

its disposal targets for the year, delivering

£36million of gains and £120 million of proceeds,

which exceeded the Directors’ valuation; however

it recorded lower PFO due to additional costs in

US military housing. During the year, the Group

agreed with the US Department of Justice to

extend both Balfour Beatty Communities’ plea

agreement and monitorship to6 June 2026 to

allow the Group further time tocomplete planned

remediation work.

The Directors’ valuation of the Investments

portfolio reduced by 15% to £1.1 billion (2024:

£1.3 billion), due to the disposal of 12 assets,

increased discount rates and sterling strengthening

against the US dollar.

The Group has forecast further profitable growth

in 2026 and beyond, driven by its focus on four

core growth markets: UK energy, UK transport,

UK defence and US buildings. Additionally, costs

are expected to reduce following completion of

both the independent compliance monitor’s work

with Balfour Beatty Communities and the delayed

US Civils project. In Infrastructure Investments,

following the agreement of a 25-year ground

lease extension at Fort Carson in Colorado early

in 2026, the Group successfully completed a

refinancing which raised $444 million for a major

redevelopment of the community, including

c.400 new homes and the renovation ofover

300existing homes.

Long-term UK energy contracts

driving order book expansion

The Group’s order book increased by 23% to

£22.7 billion in 2025 (2024: £18.4 billion), with

growth in each segment of the earnings-based

businesses. While demand remained strong in

the majority of Balfour Beatty’s key markets,

themain driver of the order book’s increase is

the addition of projects linked to the UK’s energy

transition, with the Group converting over

£3.5billion of power generation orders for the

Sizewell C and Net Zero Teesside power stations,

while increasing the power transmission order

book by almost 40%. The Group also delivered

notable order book growth in UK rail, US roads

and Hong Kong buildings.

In a period of unprecedented infrastructure

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

project portfolio that the Group believes has the

appropriate contractual terms and conditions for

the risk undertaken. UK Construction is heavily

weighted towards lower-risk target cost and

costplus incentivised fee contracts, whilst

USConstruction is 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.

In addition to the reported order book, the Group

has a deep pipeline of work which it has been

selected for but has yet to go to contract. This

represents a further significant volume of future

activity and includes much of the work which has

been awarded in both the power transmission

and distribution sector and in the UK defence

sector, which is being contracted on a phased or

task order basis. It also includes c£2.5 billion of

US Buildings projects which have been awarded

but not contracted and the £1.2 billion Lower

Thames Crossing road project in the UK.

OUR INVESTMENT PROPOSITION

Attractive future shareholder returns

underpinned by sustained growth

opportunities and financial strength.

1. High-quality and

de-risked portfolio

@ Diverse portfolio across UK,

USandHong Kong

@ £22.7 billion order book

@ Robust governance and

disciplinedbidding

2. Expert capability

@ Track record of complex

infrastructuredelivery

@ Unique end-to-end capabilities

@ Industry-leading employee engagement

3. Sustained growth drivers

@ Governments driving growth

throughinfrastructure

@ Capabilities aligned to growth markets

@ UK demand outweighing supply

4. Responsible goals

@ Evolved sustainability strategy launched

in 2024

@ Net zero carbon emissions targets

verified by SBTi

@ Ambitious community targets

5. Financial strength

@ Strong cash generation

@ £1.1 billion Investments portfolio

@ Sector leading balance sheet

“ In 2025, the Group delivered

on expectations with further

earnings growth, fuelled by

strong operational performance

and momentum in chosen

growth markets, where our

end-to-end expertise, proven

delivery and long-standing

customer relationships

continue to differentiate

Balfour Beatty.”

£1.2bn

of shareholder returns 2021– 2026

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

2025 snapshots

Below are photos from Philip’s travels – projects, people and the

places where our work is making a difference around the world.

GROUP CHIEF EXECUTIVE’S REVIEW CONTINUED

3 6

1. Philip on site at HS2’s Old Oak Common station in London during

September Safety Month, taking part in a ‘Let’s talk’ session

focused on open dialogue and shared responsibility for safety.

2. A trip to the US to meet Eric Stenman, President and Chief

Executive Officer, Balfour Beatty’s US Buildings & Civils business,

to discuss complex builds, epic engineering feats and

top-secret theme parks.

3. Philip touring the Los Cerritos school project in California,

meeting site teams and gaining first-hand insight into progress

and delivery on the ground.

4. Hosting a town hall at our Portland office in the US, bringing

colleagues together to discuss performance, priorities and

Balfour Beatty’s future direction.

5. Meeting colleagues in Bengaluru, India, to explore how our

digital capability is shaping overhead lines, substations and

M&E delivery systems.

6. Philip experiencing how digital twins are being used on our

Cyberport commercial development in Hong Kong to support

safer and more efficient planning of activities such as painting

and manual handling.

7. On site at the M25 Junction 10/A3 Wisley Interchange project

in Surrey, seeing progress on this major infrastructure upgrade

designed to improve journeys for road users.

8. Visiting the Bramford to Twinstead Network Optimisation

project, a significant National Grid infrastructure upgrade

supporting the UK’s transition to cleaner, more secure energy.

9. Philip presenting at the UK Early Careers Festival (#ECFEST25)

in Birmingham, speaking to more than 400 graduates and

apprentices about the skills and careers needed to deliver

thenext generation of UK infrastructure.

Balfour Beatty plc | Annual Report and Accounts 2025

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Positive market outlook supporting

further growth

Throughout 2025, Balfour Beatty has continued

to focus on its four chosen growth markets – UK

energy transition and security, UK transport, UK

defence, and US buildings – and the outlook for

each, combined with the Group’s order book,

underpin the firm expectation of further growth

from the earnings-based businesses in 2026

andbeyond.

In the UK, the Government set out a 10-year

infrastructure strategy as it looks to deliver on

itsobjective to stimulate economic growth

byinvesting in and enabling infrastructure

development. Supported by the publication of

The Infrastructure Pipeline and a commitment

tofinance at least £725 billion of the cost while

seeking further material investment from the

private sector, this longer-term approach brings

improved certainty and clarity for the industry,

allowing UK contractors and their suppliers to

plan accordingly and invest in capability. In the

US, US Buildings’ organic growth strategy and

lower interest rates have contributed to the

division’s encouraging progress.

@ 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 nuclear power

stations at Hinkley Point C and Sizewell C,

theNet Zero Teesside power station with

carbon capture, and across the UK with its

market-leading power transmission and

distribution capability.

@ UK defence: In June, the UK Government

released the Strategic Defence Review,

declaring defence as an engine for growth.

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

2025 the Group was selected by Rolls-Royce

for a second long-term project as part of its

AUKUS expansion, following a similar award

in2024.

@ 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 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.

@ US buildings: The US buildings sector in

Balfour Beatty’s target states is poised for

further growth, supported by steady economic

expansion, robust public-sector spending and

favourable demographic trends. There are

encouraging forecasts in the division’s specialist

industries, with increased investment in

education, leisure, and data centres. The

Group has also seen encouraging results from

its organic growth strategy, as a result of

further geographic diversification.

Growing and attracting an

engagedworkforce

Balfour Beatty’s greatest assets are its people and

their capabilities and, as demonstrated by the

order book growth in the year, the demand for

these remains extremely strong across a range of

markets. As the Group continues to deliver on its

growth aspirations, the focus on attracting and

recruiting new talent and retaining its existing

experts grows in tandem, as the Group 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 2025, the survey results remained

industry-leading, with overall employee engagement

at 83% (2024: 84%), which is 8% higher than

benchmark engagement scores for the industry.

During 2025, the Group has continued with its

four pillared people strategy – Attract, Retain,

Grow and Thrive – empowering colleagues to

excel and build rewarding careers. From early

careers to experienced hires to senior leadership,

investment is being made in the skills needed

todeliver demand, supported by inclusive

leadership, data-led learning and a consistent,

high quality employee experience. Across the

UK, US and Hong Kong, this approach is locally

tuned but globally aligned, ensuring the Group

has the capacity, capability and culture to deliver

for its customers – safely, ethically and with

pride. In the Group’s fastest growing market,

Power Transmission and Distribution in the UK,

the business welcomed over 500 new starters

for the second year in a row, facilitating a near

doubling of revenue over those two years.

Toretain its talent, Balfour Beatty focuses on

providing an inclusive environment where its

people feel valued and can be productive, and

theGroup’s voluntary attrition rate in the UK

remained stable at 10%. At year end, 8.9% 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.

Further work required in journey

toZero Harm

Health, safety and wellbeing (HS&W) remain the

highest priority for Balfour Beatty, underpinned

by strong governance and accountability, with

mental health treated like physical health to

ensure a holistic approach. Sadly, despite the

Group’s relentless focus on its Zero Harm goal,

one colleague tragically lost their life during the

year while working on the decommissioning of

asteel propane tank in the US. The Company

offers its deepest sympathy and support to their

family, friends and co-workers. The Group is

determined to learn from this event, and to

implement the findings from this incident. During

the year, new learning and sharing forums across

key working areas have been initiated, which aim

to ensure that Balfour Beatty drives, shares and

consistently adopts the common best practice

across the whole business.

The Group tracks HS&W statistics closely in

itsefforts to achieve continuous improvement.

Further progress has been made with most of

these KPIs in 2025, most notably in voluntary

safety observations, which increased by 67%

toover 780,000 across the Group’s activities.

This level of engagement highlights not only

theaccountability for HS&W recognised by

colleagues, but also how embedded safety is in

the Group’s culture. Lost time injuries (excluding

international joint ventures) reduced in both rate

and absolute numbers from 0.09 (100 injuries) in

2024 to 0.08 (89 injuries) in 2025, with both US

and UK operations recording their lowest rates

todate. The Group did note a slight increase in its

major injury rate of 0.01; this was predominantly

due to lower-limb injuries and slips, trips and

falls. A working group has been convened to

identify the risk factors that have led to the rise.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Further work required in journey

toZero Harm continued

The Group continues to leverage technology to

improve HS&W. At road projects in North Carolina,

the Group has deployed a communication network

called Safety Cloud. This sends real-time digital

alerts to motorists within a one-mile radius of

work activities, warning of work zones, lane

closures and hazards. These alerts, integrated

with platforms like Apple Maps, Waze and

in-vehicle systems, give drivers vital time to

slowdown and manoeuvre safely. In the UK,

thewidespread adoption of digital permits, as

well as a revised, reinforced utilities avoidance

procedure, contributed to a 30% reduction in

underground service strikes.

Sustainability central to delivering

long term resilience and performance

During 2025, Balfour Beatty continued to

embedand strengthen its Building New Futures

sustainability strategy, launched in 2024 to reflect

the evolving environmental, social and governance

landscape. The six focus areas – net zero, resource

efficiency, community value, supply chain

integrity, nature positive, and employee diversity,

equity and inclusion– remained central to delivering

long-term resilience and positive outcomes. The

Group’s first double materiality assessment

validated these priorities and reinforced the

alignment between its strategy, risk management

and external expectations, while emphasising the

importance of governance, ethics and transparency.

Progress was recognised through an improvement

in the Group’s FTSE4Good ESG score.

Capability and collaboration continue to be built

across Balfour Beatty, including through the

newSprouting Sustainability Network, which

empowers early-career professionals to drive

meaningfulchange.

GROUP CHIEF EXECUTIVE’S REVIEW CONTINUED

The Group also advanced its climate and nature

agendas by maturing carbon reporting, preparing

for emerging regulation, and completing the

firstfull year of implementing its Nature

PositivePrinciples.

In 2025, the Group delivered £1,012 million

(2024: £991 million) of social value, including

spend with local suppliers and local businesses,

and volunteering. The Group also achieved a

2.3% reduction in absolute carbon emissions

anda 7.8% intensity reduction in Scope 1 and 2

greenhouse gas (GHG) emissions.

Increased dividends and share

buybacks in 2026

Continuity in Balfour Beatty’s capital allocation

framework, which has been in place since 2021,

has been an important factor in the Group delivering

attractive shareholder returns over the period,

while ensuring the appropriate balance between

investment in the business and a strong capital

position. 2025 has been a further important step

in the Group’s growth, with positive progress

made with regard to revenue, margin, order

book, balance sheet and outlook. As a result,

theBoard has confidence that the Group will

continue to deliver significant future shareholder

returns and as such is today recommending

afinal dividend of 9.8 pence per share

(2024:8.7pence), giving a total recommended

dividend for the year of 14 pence per share

(2024: 12.5 pence). Additionally, the Company

intends to repurchase £200 million of shares

during the 2026 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 £1.2 billion.

The total cash return to shareholders in 2026

(including the final 2025 dividend and 2026

interim dividend) is therefore expected to be

c.£267 million (2025: £189 million).

Outlook

The Board expects a high single-digit percentage

increase in PFO from its earnings-based businesses

in 2026. This includes further underlying margin

growth in UK Construction (when excluding the

£11 million insurance recovery in 2025), improved

US Construction margin, with the delayed Civils

highway project expected to complete around

the middle of the year, and increased Support

Services PFO, with further growth in power

volumes and PFO margin remaining above 8%.

Infrastructure Investments PFO for 2026, prior

todisposals, is forecast to be a small loss and is

aligned to the Group’s agreement with the US

Department of Justice to extend both Balfour

Beatty Communities’ plea agreement and

monitorship to 6 June 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. Following

asignificant level of activity in 2025, gains on

disposal are expected to be lower in 2026, in

therange of £5-15 million, as the Group times

itsasset sales to capture maximum value.

The Board expects net finance income in

therange of £28-32 million for 2026 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2026 is expected to be in a range

of£1.3-1.5billion, with capital expenditure

between £40 and £50 million and working

capitalremaining broadly unchanged.

The Group’s long-term outlook remains positive,

with the growth forecast in 2026 and 2027 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.

Philip Hoare

Group Chief Executive

10 March 2026

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

PIONEERING SUSTAINABLE

POWER GENERATION

£833m

Secured for the Net Zero

Teesside contract

DRIVING THE UK’S GRID

TRANSFORMATION

£8bn

Appointed to National Grid’s

Electricity Transmission

Partnership

EXECUTING NATION DEFINING

INFRASTRUCTURE

£38bn

Sizewell C nuclear project –

delivering one-third of civil

engineering works

MARKET REVIEW

Well

positioned

infour

growth

markets

Capitalising on high-growth

markets where the Group has

the capabilities and aproven

track record to secure

newopportunities.

UK ENERGY

The UK’s energy system is undergoing a structural

transformation as net zero ambitions accelerate.

Electrification of transport, heat andindustry is

driving higher electricity demand,while government

policy supports long-term investment in low-carbon

generation and transmission.

This is creating a sustained pipeline of large-scale,

complex infrastructure projects, highlighting the

value of integrated delivery capability across

high-voltage, civil engineering and programme

management disciplines.

Market trends

Grid modernisation

Transmission capacity remains the key barrier to

deployment of renewables, storage and regional

energy clusters. In response, transmission owners

and distribution network operators are accelerating

investment in overhead line upgrades, HVDC links,

strategic substations andreinforcement of existing

assets. Delivery at pace is essential, increasing

demand for partners with high-voltage expertise,

regulatory understanding and experience managing

multi-year, complex programmes.

Large-scale nuclear generation

Nuclear power remains central to the UK’s

low-carbon strategy, with ongoing projects

suchas Hinkley Point C focused on providing

areliable baseload to complement variable

renewable sources. New nuclear is expected to

more than replace the generation capacity coming

offline, with Sizewell C securing £14.2 billion of

UK Government support. These commitments

are driving sustained demand for civil engineering,

enabling works and complex structural and

mechanical construction, favouring companies

with large-scale nuclear delivery experience

andstrong programme management capability.

Small modular reactors

Small modular reactors (SMRs) are emerging

asacore element of the UK’s nuclear strategy

and backed by £2.5 billion of government funding.

InJune 2025, Great British Energy – Nuclear

named Rolls-Royce SMR as its preferred bidder,

advancing the programme into contracting and

early development. The UK’s goal of up to 24GW

of nuclear capacity by 2050, coupled with rising

private sector interest, is driving demand.

Growing demand for SMR deployment increases

the need for repeatable site preparation, civil

works and enabling infrastructure from

experienced nuclear partners.

Carbon capture

Carbon capture, usage and storage (CCUS)

industrial facilities are emerging as a national

strategic priority to support industrial decarbonisation

and low-carbon infrastructure, and are supported

by a growing project pipeline and government

funding, including £21.7 billion for CCUS projects.

This is creating a broad range of opportunities for

large-scale projects across energy and industrial

end-markets. These projects align closely with

Balfour Beatty’s capability in managing technically

demanding, complex infrastructure programmes.

Scan or click to

learn about the

NetZero Teesside

contract.

Scan or click to learn

about the National

GridElectricity

Transmission

Partnership.

Scan or click to

learn about the

Sizewell C

nuclearproject.

2025 momentum

@ Awarded the north-east region of

National Grid’s £8 billion Electricity

Transmission Partnership.

@ Secured two spots on National Grid’s

£59 billion High Voltage Direct Current

supply chain framework.

@ Secured a place on SP Energy

Networkstransmission business’

Strategic Agreement for Overhead

LineWorks framework.

@ Signed the Programme Alliance

Agreement to deliver Sizewell C

civilworks.

@ Signed an £833 million contract

withTechnip Energies to act as

theconstruction partner for

NetZeroTeesside.

Our growth markets:

UK ENERGY

UK TRANSPORT

UK DEFENCE AND SECURITY

US BUILDINGS

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

UK TRANSPORT

The UK transport sector is evolving rapidly due to

urbanisation, population growth and government

policies on decarbonisation, resilience and modal

shift. Transport is viewed as a driver of economic

growth, with public investment sustaining demand

for complex civil engineering, programme

management and electrification capabilities.

Market trends

Rail

Rail remains a key government priority, underpinned

by Network Rail’s £45 billion Control Period 7

(2024-2029). Demand for major programmes

continues – including HS2 between Birmingham

and Euston, the £10.2 billion of non-HS2

enhancements, such as East West Rail and the

Transpennine Route Upgrade, and the reaffirmed

commitment to Northern Powerhouse Rail.

This sits alongside a stable pipeline of renewals,

maintenance and operations work delivered

through long-term frameworks like the Central

Rail Systems Alliance and the Supply Chain

Services framework. Together, these programmes

require multi-disciplinary design and engineering,

with a strong focus on integrateddelivery.

Strategic Road Network

The Strategic Road Network continues to receive

government support, with £891 million for the

Lower Thames Crossing alongside secured funding

for five strategic schemes, including the A66 where

Balfour Beatty is undertaking pre-construction

activities. The £25 billion, five-year funding

envelope for the Road Investment Strategy 3

(RIS3) provides welcome certainty, with a focus

on modernisation, technology and network

resilience – ultimately sustaining demand for

asset management and renewal work through

long-term frameworks such as National

Highways’ Scheme Delivery Framework 2.

Balfour Beatty’s proven capabilities in operations,

maintenance and structural works means we are

well placed to respond to this shiftingfocus.

Local roads and maintenance

Continued demand for maintenance, resurfacing,

widening and bypass schemes – such as the

North Hykeham Relief Road – is supported by

devolved long-term funding and local authority

reorganisation. The Government has committed

£15.6 billion between 2025 – 26 and 2031 – 2032

through the Transport for City Regions

settlements, alongside £7.3 billion for local

highway maintenance between 2026 – 2027

and2029 – 2030. This underpins multi-year

programmes of structural, civil engineering

andmaintenance works focused onrenewal

andnetwork resilience.

Public realm and urban transport

Urban transport schemes – including tram, metro

and bus network expansions – are growing under

policies to reduce congestion, emissions and

cardependency, supported by Transport for

CityRegions funding. The government will also

invest£2.3 billion by 2029 – 2030 via the Local

Transport Grant, supporting public realm, cycling

and pedestrianisation projects aligned with

low-carbon transport objectives.

Aviation

Investment in airport infrastructure is expected

torecover, driven by capacity constraints,

modernisation and decarbonisation. Major

airports are progressing expansion plans –

including Heathrow’s proposed third runway and

Gatwick’s £2.2 billion standby runway programme

– creating opportunities for terminal upgrades,

runway works and landside infrastructure.

2025 momentum

@ Delivered major HS2 milestones,

including Bromford Tunnel, Tame West

Viaduct, A46 box-slide and high-speed

platform slabs at Old Oak Common.

@ Secured approximately £700 million

ofnew UK Rail work, covering civil

engineering under CP7, track renewal

viathe Central Rail Systems Alliance,

and fleet supply and operations for

Network Rail.

@ Advanced Early Contractor Involvement

(ECI) activities at Lower Thames

Crossing and the A66 Northern

Transpennine project.

@ Commenced construction on A57 Link

Roads and the M3 Junction 9 upgrade

for National Highways.

@ Progressed A9 dualling between

Tomatin and Moy in Scotland.

@ Delivered highways maintenance

contracts for Buckinghamshire,

EastSussex and Lincolnshire

CountyCouncils.

@ Continued operational and maintenance

services for the M25 network through

our Connect Plus Services joint venture.

@ Secured extension of the Highway

Services Partnership contract with

Southampton City Council until 2030.

£92bn

Prioritised public funding in road and rail

Backed by the £92 billion Spending Review

settlement, the UK transport sector offers

a diverse and growing pipeline of road, rail,

bridge and maintenance projects. From

major upgrades to essential maintenance

and local connectivity works, this

investment highlights a strong, long-term

market opportunity for contractors

delivering critical transport infrastructure.

Source: UK Department for Transport and HM Treasury

MARKET REVIEW CONTINUED

Above: Artist’s impression of Lower Thames Crossing in Kent.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

UK DEFENCE AND SECURITY

The UK defence sector is undergoing sustained

investment to support nuclear deterrence,

modernisation of the Armed Forces, and homeland

resilience. Rising defence budgets, ageing estate

assets and increasing cyber and operational security

requirements are generating a multi-decade

pipeline of complex infrastructure, technical

buildings and specialist manufacturing facilities.

Market trends

Nuclear deterrent facilities

The Defence Nuclear Enterprise (DNE) remains

central to the UK’s strategic deterrent. Investment

priorities under the 2025 Strategic Defence

Review support delivery and enhancement of

thecontinuousat-sea deterrent and ongoing,

sovereign warheadprogramme. Estate-wide

modernisation includesMinistry of Defence

(MoD)-owned sites at HMNBClyde and AWE,

while key defence prime contractor-owned

facilities – including Rolls-Royce and BAE Systems

submarine production sites – are being upgraded

to support wider DNE programmes, creating a

visible pipeline of high-value, complex projects

with secured funding.

Technical buildings

Investment is increasing in operational and technical

support buildings across the MoD andprime

contractor estates. This includes maintenance

facilities, operations hubs and other specialised

infrastructure that enables core military functions.

Projects require integrated construction,

mechanical and electrical capability to deliver

high-specification, resilient and sustainable

facilities to support long-term operational needs.

Secure and cyber facilities

As technological advances continue to change

the nature of conflict, there is a growing need

forupgrades across the MoD estate to protect

sensitive systems and data. There is increasing

demand for secure communication hubs, command

and control centres and research facilities for

emerging defence technologies, requiring contractors

with expertise in delivering high-specification

projects that meet rigorous compliance and

cyber-resilience standards.

Defence equipment manufacturing facilities

Demand is rising for purpose-built contractor-owned

facilities to support production, maintenance and

testing of defence equipment including a £1.5 billion

allocation for the construction of at least six new

energetics and munitions factories in the UK.

Secure manufacturing halls, assembly areas and

logistics centres require high-specification

structural, mechanical and electrical capability,

alongside long-term programme management

and compliance expertise.

DELIVERING COMPLEX, SECURE INFRASTRUCTURE

INHIGHLYREGULATED ENVIRONMENTS

Balfour Beatty was selected by Rolls-Royce

as the sole contractor on its fissile

construction framework.

The fissile framework will see us deliver the

critical nuclear licensed infrastructure required

to support Rolls-Royce’s manufacture of

fissile components for the Royal Navy’s

submarine propulsion systems, and the new

AUKUS submarines.

Work will include the construction of new,

highly specialised manufacturing and

processing facilities within the licensed

nuclear site boundary, the upgrade of

existingnuclear infrastructure critical for the

production of fissile materials and extensive

site-wide infrastructure enhancement

compliant with stringent nuclear safety

andsecurity regulation.

We will draw on our unique end-to-end

capabilities to support the delivery of the

programme, including our ground engineering

expertise and mechanical and electrical

engineering heritage, underpinned by our

extensive technical knowledge and experience

in working in a secure, nuclear environment.

2025 momentum

@ Selected by Rolls-Royce Submarines

Limited as the sole contractor on its

fissile construction framework.

@ Delivering the construction of new office

facilities and adjoining site infrastructure

as Rolls-Royce Submarines Limited’s

non-fissile construction partner.

@ Delivering critical upgrades for the

Defence Nuclear Enterprise at the

Atomic Weapons Establishment (AWE)

at Aldermaston.

@ Currently delivering projects for the

Defence Infrastructure Organisation

across multiple sites.

Scan or click to read about Balfour Beatty

being selected by Rolls-Royce as its

fissile construction partner.

Below: (left to right) Terry Meighan, Director of Infrastructure, Rolls-Royce and

NickCrossfield, Divisional CEO of Balfour Beatty’s UK Construction Services.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

US BUILDINGS

The US buildings sector in Balfour Beatty’s target

states is poised for growth, supported by steady

economic expansion, robust public sector

spending and favourable demographic trends.

Together, these drivers create a compelling

environment for Balfour Beatty’s US Buildings

business to capitalise on new opportunities

andgenerate sustainable long-term value in

keymarkets.

Market trends

Residential

Gradual residential sector recovery is expected

as economic conditions stabilise. In single-family

markets, recent and anticipated interest rate cuts

are driving buyer and seller activity. Demand is

strongest for entry-level and build-to-rent housing,

supported by institutional investment and

migration to more affordable Southern and

Midwestern markets. In multifamily, declining

vacancy rates signal improving demand and early

recovery. Investment remains concentrated on

value-add opportunities and office-to-residential

conversions in metropolitan areas. In Balfour

Beatty’s target states, residential construction

spending is projected to increase from US$222billio

in 2025 to US$246 billion in 2030.

Institutional

Institutional building spending continues to rise,

driven by demographic shifts, changing community

service requirements, ongoing infrastructure

upgrades and consistent public sector demand.

In education, public investment leads growth,

with increased funding for higher-education

facilities, while universities are expanding their

use of public-private partnerships to deliver new

student housing and mixed-use campus projects.

In healthcare, hospitals are the primary driver

ofnear-term investment, supported by growth in

specialised services and public sector initiatives,

offsetting a moderation in private sector spending.

Investment in the institutional sector in Balfour

Beatty’s target states is set to grow 4.9% per

annum between 2025 and 2030.

Commercial

Demand in the amusement and recreation sector

remains resilient as put-in-place spending increased

4% year on year in 2025 driven by global sporting

and entertainment events and a sustained shift

toward technology-enabled venues, with strong

pipeline activity expected for modernisation projects

and legacy site upgrades. The hotel construction

pipeline remains resilient, with room counts up

1% year on year. Dallas, Atlanta, Phoenix and

Austin are among our core geographies and rank

as leading cities nationally for new project activity.

In retail, activity continues to be led by fit-out and

renovation projects. In Balfour Beatty’s target states,

commercial construction expenditure rises to

US$68 billion in 2030, up from US$53 billion in 2025.

Offices

Renovation and repositioning projects underpin

office spending as owners adapt assets to evolving

workplace needs. Investment is further supported

by rapid growth in data centre development, fuelled

by growing demand for AI-related and high-capacity

digital infrastructure. Office expenditure is

forecastto increase from US$48 billion in 2025

toUS$60billion in 2030 in Balfour Beatty’s

targetstates.

Industrial

Industrial and manufacturing spending is

normalising as most CHIPS and Science Act

subsidies have been committed. Local incentives

remain pivotal, with multi-billion-dollar state-level

commitments complementing federal policies

aimed at supporting the reshoring of advanced

manufacturing. Industrial construction expenditure

reaches US$57 billion in 2030 in Balfour Beatty’s

target states.

US BUILDINGS CONSTRUCTION SPENDING IN

BALFOUR BEATTY’S TARGET STATES IS

PROJECTED TO GROW 3% PER ANNUM

Construction spending, US$bn, nominal

2025

468

543

2030

Industrial

Offices

Commercial

Institutional

Residential

Source: Dodge Construction Central

BREAKING GROUND ON THEBROOKLYN

AND CHURCH ADAPTIVE REUSE PROJECT

448 luxury apartments

Replacing disused office space with

448luxury apartments and vibrant retail

inNorth Carolina.

+3% CAGR

2025 momentum

@ Selected for K-12 works such as

renovations, modernisations and site

improvements to educational and

athletics facilities throughout California,

totalling more than US$768 million.

@ Awarded public civic works across the

North-west, Texas and California,

including local fire and police stations,

city buildings and criminal justice facilities.

@ Awarded The Strand, a 20-storey

multifamily high-rise on behalf of

KaneRealty, Corp. as part of its

NorthHills Innovation District, a

US$1billion mixed-use campus in

Raleigh, North Carolina.

@ Awarded federal contracts for the US

Navy, Marine Corps, Air Force and other

government facilities within the Naval

Facilities Engineering Systems Command

(NAVFAC) Washington area of operations

in the Mid-Atlantic.

@ Awarded a nearly US$200 million

multi-year phased contract to deliver

aconfidential mission-critical facility

inthe Mid-Atlantic.

@ Awarded a US$72 million contract to

deliver restroom renovations at Orlando

International Airport.

MARKET REVIEW CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

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US CIVILS

The US civils sector in Balfour Beatty’s target

states remains robust, supported by sustained

federal funding, the replacement of ageing

assets and a manufacturing boom that is

increasing demand for transport infrastructure.

Market trends

Highways

US highway activity continues to be underpinned

by substantial federal investment and robust

state-level funding programmes, including

multi-billion US$ Statewide Transportation

Improvement Programmes and Caltrans’

plannedUS$4.9 billion investment in California.

Rail

US rail is in a sustained investment cycle, underpinned

by the Infrastructure Investment and Jobs Act’s

US$102 billion rail funding envelope and expanded

Federal Railroad Administration grant programmes,

supporting safety, capacity and renewal works

across passenger corridors and freight networks.

Water

US Environmental Protection Agency investment

programmes are sustaining momentum in

thewater sector, unlocking nearly US$7 billion

infinancing for water infrastructure projects.

InCalifornia, an important market for Balfour

Beatty, annual water infrastructure spending

isexpected to reach US$3.3 billion by 2030.

Ports

California’s port investments offer a major

opportunity, fuelled by growing global trade and

the need for modern infrastructure. Multi-billion

US$ capital programmes of the Port of Long

Beach and Port of Los Angeles, together with the

California State Transportation Agency’s additional

US$1.5 billion investment, ensure that the region

remains competitive and resilient in the face of

rising demand.

GAMMON

Gammon is driving growth through transport

infrastructure, the Hong Kong buildings market

and data centre expansion in Singapore.

Market trends

Hong Kong

Buildings

The Northern Metropolis continues to serve as a

major engine of growth, unlocking investment

across housing, industrial and technology sectors.

Additionally, the Hong Kong Housing Authority

aims to deliver 176,000 public housing units by

2031, while the supply target for private housing

over the next decade is projected at 126,000 units.

Transport

Hong Kong is expanding and upgrading its

existing transport infrastructure through the

Major Transport Infrastructure Development

Blueprint, designed to meet population growth,

commuting needs and enhancing the city’s

logistics capacity. In aviation, the Hong Kong

Airport Authority’s HK$170 billion SKYTOPIA

project aims to transform the airport area into

acomprehensive city hub.

Singapore

Transport

Singapore is making substantial investments in

transport infrastructure, with major projects such

as the Jurong Region Line, Downtown Line extension

and Phase 2 of the Cross Island Line currently

under construction. In addition, the Government

has committed a further S$6 billion to advance

the development of the Changi Airport air hub.

Data centres

The Green Data Centre Roadmap aims to deliver

at least 300 MW of additional capacity in the

near term and seeks to leverage green energy

sources and solutions to unlock further growth.

INFRASTRUCTURE INVESTMENTS

Balfour Beatty Investments is focused

onhigh-demand residential, energy and

infrastructure markets.

Investment focus

Student accommodation

Demand for student accommodation remains robust

across both on-campus facilities and purpose-built

off-campus housing, supported by sustained

enrolment growth and shifting student preferences.

EV charging infrastructure

Rising electric vehicle adoption is creating new

opportunities for us in the charger deployment

market, supporting continued expansion in this

strategic segment.

Nascent energy transition

As the UK’s energy mix continues to shift

towards renewable sources, the Group continues

to assess

the implications for future investment and

construction opportunities across this evolving market.

Military housing

We continue to actively manage our extensive

portfolio of privatised military housing communities

across the US, ensuring high-quality, long-term

accommodation solutions for service members

andtheir families.

Multifamily housing

The US multifamily sector continues to see

new-to-market assets entering the market,

presenting us with opportunities to invest in the

regeneration and enhancement of these assets.

Public-private partnership projects

With legislation enabling public-private

partnership (P3) projects now enacted in

42states, we are well positioned to pursue

opportunities across courthouses, schools,

government facilities and transport projects.

REBUILDING A CRITICAL

INTERSTATESECTION

US$746m

Contract secured for Interstate 35

inAustin,Texas.

US INFRASTRUCTURE CONSTRUCTION

SPENDING IN BALFOUR BEATTY’S

TARGETSTATES IS PROJECTED TO GROW

3%PER ANNUM

Construction spending, US$bn, nominal

2025

103

118

2030

Source: Dodge Construction Central

+3% CAGR

Balfour Beatty plc | Annual Report and Accounts 2025

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DIGITAL

Reimagining

construction through

digital innovation

We continue to implement new advancements in

digital and AI to drive safer, more productive and

better assured delivery across the Group.

Weutilise human form recognition to mitigate plant people interface

risk,aswell as biometric site access to enhance security and compliance.

Inaddition, over 97,810 digital safety permits were issued in 2025 to reduce

high potential (HiPo) incidents. In 2025, 783,842 observations and examples

of good practice were submitted across the Group – almost double the

previous year. These observations guide interventions that ensure health,

safety and wellbeing, and support us in meeting quality standards for

ourcustomers.

Read more about our digital safety journey on page 36.

In the UK, we trialled Certchain, an AI-powered compliance platform to

support the Supervisor Passport Scheme – a mandatory minimum training

requirements programme to help supervisors maintain and improve an

operational standard and secure a consistent behavioural safety legacy.

Certchain brings together data from the Supervisor Passport Scheme,

theConstruction Skills Certification Scheme and the Construction Industry

Training Board into one simple dashboard, giving us real-time visibility of

training and certification status. The tool is now being rolled out more

widely across the UK.

We have also invested £7.5 million in a fully ring-fenced cybersecurity

platform. Hosted in a UK-based Microsoft Azure data centre and aligned

toUK Government standards and clearance levels, which enables us to

work securely with client data. It provides a virtual desktop that replicated

60 Balfour Beatty applications and processes for a seamless user experience

and will also incorporate a data lake and enhanced reporting capabilities.

Read more about cybersecurity in our risk section on page 81.

WE’RE TRANSFORMING HOW BRITAIN

BUILDS THROUGH AI

In 2025, we unveiled a £7.2 million investment in Microsoft

365 Copilot – one of the largest AI investments of its kind

in the UK construction and infrastructure industry. The

investment builds on a pilot that took place in 2024, with

350 colleagues reporting a 72% increase in productivity,

saving an average of 30 minutes per day.

Hosted on Microsoft’s trusted enterprise-grade security

platform, Microsoft 365 Copilot is already delivering

measurable results. 6,848 colleagues have used Copilot

atleast once since it launched in August 2025, with

1,535,839 actions taken – assisting 115,178 hours of

taskssuch as drafting emails, summarising meetings and

generating documents, freeing up time for higher-value

work and accelerating project delivery.

We have also partnered with Microsoft to develop bespoke

industry-leading AI-powered ‘smart agents’ to improve

quality, health and safety and assurance processes. These

agents will leverage our corporate knowledge and data to

provide actionable insights for on-site decision making and

are being trialled on three of our projects in Scotland,

Wokingham and London in the UK.

“ This investment is about

ensuring our business

remains at the forefront of

competitiveness and

cybersecurity. Our decision

to collaborate with

Microsoft underscores

Balfour Beatty’s

determination to tackle the

industry’s productivity gap,

drive sustainable outcomes

and enhance safety.”

Jon Ozanne

Chief Information Officer,

Balfour Beatty

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

STAKEHOLDER VALUE

About our stakeholders

From shareholders and employees to

customers, supply chain partners and the

communities we operate in, each stakeholder

group holds a vested interest in Balfour

Beatty’s activities, performance or success.

Their support, feedback and collaboration

are vital not only to drive business growth

and profitability but also to foster trust,

sustainability and build a positive,

lastinglegacy.

@ As part of the Group’s annual shareholder

engagement plan, Charles Allen, Lord Allen of

Kensington, CBE, Non-executive Group Chair,

met with a number of major shareholders;

Group Chief Executive Philip Hoare held

introductory meetings with most of the top

10shareholders; and Chief Financial Officer,

Phil Harrison met with investors in New York.

Creating value

Balfour Beatty continues to deliver on its

multi-year capital allocation framework,

announced in 2021. This provides a balanced

approach between the investment needs of

thebusiness, regular dividend payments and

additional returns to shareholders. Balfour Beatty

intends to return c.£267 million to shareholders

in 2026 through a combination of dividends and

share buybacks, bringing the cumulative return

toshareholders since 2021 to over £1.2 billion.

CUSTOMERS

Collaborative and long-term mutually

beneficial relationships with our customers

are the foundation of our success.

2025 engagement examples

@ In 2025, customer engagement was primarily

embedded in how we work through long-term

frameworks and collaborative delivery models.

We continue to work closely with customers

earlier in the project lifecycle, supporting

improved integration, data sharing and early

stage design alignment. This approach

strengthened collaboration across design, delivery

and risk management, helping customers

achieve greater certainty of outcomes.

Above: Balfour Beatty’s 2025 half year results presentation

inLondon.

Sharing

thevalue

wecreate

In striving to achieve its purpose

of Building New Futures, Balfour

Beatty touches the lives of

millions of people around the

world. Working with multiple

stakeholders across the industry

and beyond, the Group continues

to innovate and lead the market

through driving change, shaping

the debate and inspiring a new

generation of talent to be the

change makers of tomorrow.

SHAREHOLDERS

Our shareholders, as owners of the

Company, are a critical stakeholder

fortheGroup.

2025 engagement examples

@ Throughout 2025, the Company held 104

meetings with shareholders and investors,

with management holding two London-based

results roadshows in March and September.

Throughout 2025, the Group participated in four

investor conferences organised by London-based

investment banks, with additional investor

roadshows held in Leeds, York, Birmingham,

Milan, Lugano, New York, Chicago and Toronto.

@ To keep shareholders up-to-date with Company

news including financial information, we share

regular updates via regulatory announcements,

webcasts and presentations.

104

shareholder meetings held in 2025

95%

customer satisfaction average

@ As an industry leader, we know that freely

sharing best practice is the best way to help

theindustry develop and evolve. In 2025,

wecontinued with our ‘five-minute reads’

publishing two papers on ‘Leading the

industry’s hydrogen revolution’ and ‘Building

the fusion future’.

Scan or click to read our

‘Fiveminute read’ series.

@ Balfour Beatty led early contractor involvement

at Sizewell C, integrating designers and Civils

Works Alliance partners during enabling works

and earthworks. Building delivery capability

and skills early, helped secure development

consent, support investment decision-making,

refine costs and optimise the programme,

removing over three years from the gallery

construction schedule.

Creating value

In the UK, we marked a decade of partnership

with SCAPE, a public sector procurement

framework that has transformed how

infrastructure is delivered for a wide range

oflocal and national customers.

To date, the partnership has generated £404 million

of socialvalue, delivered over 19,800 hours in

employment and skills, contributed more than

2.7 million community hours and engaged

288education institutions. Our focus on

collaborative delivery and high standards is

reflected in consistently strong performance.

Across SCAPE projects, our teams achieved

anaverage Considerate Constructors Scheme

score of 44.6 out of 45, with multiple projects

achieving Platinum status.

Balfour Beatty plc | Annual Report and Accounts 2025

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STAKEHOLDER VALUE CONTINUED

Above: In 2025, we welcomed 400 apprentices, graduates

andtrainees to our UK Early Careers Festival.

strategicrecommendations for incorporating

nature into corporate governance, strategy, risk

management and decision-making processes.

@ We continued to support capability building

through industry collaboration, including our

involvement in the UK Supply Chain Sustainability

School, where Balfour Beatty is a funder, gold

member and Board participant. Through this

collaboration, suppliers are encouraged to

access training, tools and accreditation

pathways that support continuous

improvement and help to build resilient,

capable supply chains.

Creating value

Balfour Beatty is committed to paying all supply

chain partners on time and on mutually-agreed

terms. We continually invest in our processes

and procedures to improve payment performance

and enhance accuracy and transparency through

increased automation. In the last six months of

2025, we paid 97% of invoices within 60 days,

with an ‘average days to pay’ of 35 days.

SUPPLY CHAIN AND

KEYPARTNERS

Our extensive supply chain partners across

the Group plays an instrumental role in our

success and driving best practice across

our industry.

2025 engagement examples

@ In 2025, we enhanced collaboration with UK

tier one and tier two suppliers by engaging

them early in design development, technical

assurance and planning. This fostered shared

priorities and improved outcomes in buildability,

safety, carbon reduction, quality and

environmental performance across

ourprojects.

@ In 2025, Gammon, partnered with The Hong

Kong University of Science and Technology,

Swire Properties and AXA Climate to pilot

anature-related commercial property

assessment.The framework will offer

83%

annual employee engagement score

97%

of invoices paid within 60 days in the UK

EMPLOYEES

Talented and engaged employees,

committed to upholding our values, enable

us to deliver our Build to Last strategy –

ensuring we win and expertly deliver the

best and most exciting projects, whilst

continuing to build a great place to work.

2025 engagement examples

@ My Contribution (MyC) is a critical driver for

employee-led business change and making

Balfour Beatty a great place to work. In 2025,

colleagues from across the UK and US submitted

over 1,700 ideas. More than 500 of these ideas

were implemented, generating an estimated

£1.4million of cash, £2.6 million of cost

savings and over 63,000 of time saved. Find

out more about My Contribution on page 61.

@ We continued to invest in early career

development with the Early Careers Festival

2025, which brought together about

400apprentices, graduates and trainees

fromacross the UK. The event enabled our

colleagues to engage with senior leadership,

gain deeper insight into the business and

deepen their understanding of safety,

sustainability and quality.

@ Our UK Gender and Allies Affinity Network

hosted over 40 Gender Circles during the year.

These local, in-person events were held across

projects, sites and in offices. They provided

safe spaces for colleagues to connect, share

lived experiences and discuss gender at work

– helping us to identify and address barriers

toinclusion.

Creating value

The key metric for our Expert value is employee

engagement. In 2025, our Group engagement

score reached 83%, around 8% higher the

industry average. The annual survey achieved

ahigh response rate of 84%, with more than

19,900 colleagues participating.

Above: Students from Hong Kong University of Science and

Technology with subject experts from Gammon and

SwireProperties.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

COMMUNITIES

Our activities have a lasting impact on the

communities in which we operate. We are

committed to leaving a positive and

sustainable legacy.

2025 engagement examples

@ On the HS2 Old Oak Common station project

in West London, our teams worked with

StandOut, a UK charity supporting people with

lived experience of the criminal justice system.

Through this partnership, we supported

employability by providing confidence-building

support, mock interviews and CV guidance.

@ While delivering Junction 10 of the Junction

10/A3 Wisely Interchange scheme on behalf

ofNational Highways – one of the busiest

sections of the UK’s motorway network – our

teams supported Elmbridge Community Action

on Refugees (CAN), a local charity working

with refugees and asylum seekers.

@ We engaged at a senior level on the devolution

of infrastructure budgets and regional growth

priorities, recognising the increasing role of

mayoral and strategic authorities in investment

decisions. This included convening a regional

rail roundtable in Manchester with the Mayor

of Greater Manchester and senior transport

stakeholders, as well as participating in

national forums, such as the UK’s Real Estate

Investment & Infrastructure Forum (UKREiiF),

supporting early alignment with locally-driven

infrastructure priorities.

Creating value

Through sustained, evidence-led engagement on

roadworker safety, Balfour Beatty helped secure

recognition of roadworkers as a vulnerable group

of road users in the Government’s Road Safety

Strategy. By sharing practical insight from live

projects and engaging directly with policymakers

through parliamentary activity, we brought

national attention to the risks faced by those

working on the road network.

Throughthis partnership, our teams provided

career mentoring, including resume-writing,

interview practice and employability guidance

to help individuals build confidence and access

employment opportunities.

@ After a devastating fire broke out at Wang Fuk

Court in Tai Po, Gammon responded in unity.

Over seven days, more than 500 volunteers

from across the business helped to install

flooring in interim housing. The Housing

Secretary, Ms Winnie Ho, publicly praised

Gammon’s swift and compassionate response.

In the US, our team worked with the student-led

Eagle News Broadcasters at Cesar Chavez

Elementary School to turn the redevelopment of

the school into an interactive learning experience.

By linking construction activity with the school’s

media programme, students built confidence,

curiosity and communication skills while

following the building progress.

Creating value

In the UK, Balfour Beatty continues to use

theNational TOMs framework to measure and

report social value to a consistent and recognised

standard. In 2025, across our UK projects,

wedelivered over £1.012 billion of social value,

reflecting the scale of our contribution to

localeconomies, skills development and

community wellbeing.

GOVERNMENTS

Governments set the policy and legislative

context in which we operate and are also

valued customers across our chosen

geographies.

2025 engagement examples

@ During 2025, we engaged with the UK

Government to provide evidence-led insight on

priority infrastructure topics, including planning

reform, the energy transition, nuclear readiness,

defence infrastructure and infrastructure

delivery capability. This included targeted

engagement with ministers, officials and

parliamentarians on the Planning and Infrastructure

Act and the Great British Railways Bill, alongside

formal consultation responses and parliamentary

briefings on infrastructure delivery, skills

andproductivity.

@ We hosted an immersive parliamentary

showcase on nuclear capability, centred on the

Sizewell C programme. This brought together

MPs and officials to demonstrate UK delivery

expertise, supply chain readiness and the scale

of civil engineering capability required to deliver

nationally significant nuclear infrastructure.

£1.012bn

social value delivered in the UK

Above: Steve Tarr, Balfour Beatty’s Divisional CEO, hosted a

discussion with the former Deputy Prime Minister at the UK Real

Estate Investment & Infrastructure Forum (UKREiiF).

Scan or click to watch the behind-the-scenes

interview with CésarE. Chávez Intermediate

and the project team.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

OPERATIONAL REVIEWOPERATIONAL REVIEW

Strong

performance

across a

diverse

portfolio

Throughout this report, the

Grouphas presented financial

performance measures which

areconsidered most relevant

toBalfour Beatty and are used

tomanage the Group’s performance.

These financial performance measures are

chosen to provide a balanced view of the Group’s

operations and are considered useful to investors

as these measures provide relevant information

on the Group’s past or future performance,

position or cash flows. These financial performance

measures are also aligned to measures used

internally to assess business performance in the

Group’s budgeting process and when determining

compensation. An explanation of the Group’s

financial performance measures and appropriate

reconciliations to its statutory measures are

provided in the Measuring Our Financial

Performance section. Non-underlying items are

the cause of the differences between underlying

and statutory profitability. Additionally, revenue

includes the Group’s share of revenue of joint

ventures andassociates.

CONSTRUCTION SERVICES

Financial review

Revenue at £8,711 million was up 6%

(2024:£8,199 million), an 8% increase at CER,

with higher volumes in UK Construction and US

Construction offset by a reduction at Gammon.

Underlying profit from operations increased to

£171 million (2024: £159 million) due to improved

profitability in UK Construction, partially offset

byreduced profitability in US Construction and

alower Gammon contribution due to reduced

volumes. Statutory PFO for the year was

£182million (2024: £87 million). The order book

increased 23% (29% at CER) in the year to

£18.7billion (2024: £15.2 billion), largely due to

new power generation orders in UK Construction.

UK Construction: Revenue in UK

Constructionincreased by 3% to £3,112 million

(2024£3,011million) driven largely by higher

volumes in the energy sector.

UK Construction achieved its long-standing PFO

margin target of 3% in the year, with strong

project delivery, the improved risk profile of its

portfolio and a one-off £11 million insurance

recovery contributing to underlying profit from

operations of £110 million (2024: £81 million).

This represents a 3.5% PFO margin (2024:2.7%),

Construction Services

2025 2024

Revenue

£m

PFO

£m

Order book

£bn

Revenue

£m

PFO

£m

Order book

£bn

UK Construction 3,112 110 8.9 3,011 81 6.2

US Construction 4,509 25 7.8 3,638 40 7.1

Gammon 1,090 36 2.0 1,550 38 1.9

Underlying

8,711 171 18.7 8,199 159 15.2

Non-underlying – 11 – – (72) –

Total 8,711 182 18.7 8,19 9 87 15.2

1 Including share of joint ventures and associates.

2 Before non-underlying items (Note 9).

A reconciliation of the Group’s performance measures to its statutory results is provided in the Measuring our financial performance section.

REVENUE

£ 8,711m

2024: £8,199m

STATUTORY REVENUE

£7,589m

2024: £6,630m

UNDERLYING PROFIT FROM OPERATIONS

£171m

2024: £159m

STATUTORY PROFIT FROM OPERATIONS

£182m

2024: £87m

ORDER BOOK

£18.7bn

2024: £15.2bn

1 Including share point of ventures and associates.

which is 3.2% when excluding the insurance

recovery, and demonstrates good progress in the

division’s margin expansion efforts, with further

improvement expected in 2026.

The UK Construction order book grew by 44%

in2025 to £8.9 billion (2024: £6.2 billion), driven

largely by the work won at Sizewell C nuclear

power station and the Net Zero Teesside carbon

capture project. The order book remains relatively

low risk compared to historic norms, with 88%

oforders contracted on target cost or cost-plus

contract terms (2024: 79%). Additionally, at year

end, 84% (2024: 92%) of the order book was

with public sector and regulated industry customers,

and more than half of the remaining 16% related

to Net Zero Teesside, where the ultimate client is

a joint venture between BP and Equinor.

US Construction: Revenue in US Construction

increased by 24% (28% increase at CER) to

£4,509 million (2024: £3,638 million) driven

largely by stronger demand in US Buildings.

Underlying profit from operations for US

Construction reduced by 38% to £25 million

(2024: £40 million) with the cost of schedule

delays at one US Civils highways project in Texas

more than offsetting strong performance from

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

the US Buildings business. Tariffs had a relatively

low impact on the business in the year, and

where incurred, were largely recovered through

pre-existing contract terms. US Construction

PFO is expected to improve in 2026, with the

delayed Civils highway project expected to

complete around the middle of the year.

The US Construction order book increased by 10%

(18% at CER) to £7.8 billion (2024: £7.1 billion)

with increases in both the Buildings and Civils

divisions when measured in dollar terms. Growth

in the US Buildings order book was driven largely

by $750 million of correctional facility work in the

Southeast, increased data centre work and

education orders. US Civils order book growth

was primarily due to an $889 million contract for

the Texas Department to reconstruct a 3.7km

section of Interstate 30 in Dallas County. The

project, scheduled for completion in 2031,

willbedelivered solely by Balfour Beatty and is

reflective of the Group’s capabilities and focus

going forward.

Gammon: The Group’s share of Gammon’s revenue

reduced by 30% (28% at CER) to £1,090 million

(2024: £1,550 million) driven by decreased activity

on major civils projects, as work on the two

major projects at Hong Kong International Airport

moved towards completion through the year.

Although underlying profit decreased to £36 million

(2024: £38 million), Gammon delivered an improved

profit margin of 3.3% (2024: 2.5%), with the

improvement in margin driven by the mix of work

completed across the project portfolio.

The Group’s share of Gammon’s order book

increased by 5% (18% at CER) to £2.0 billion

(2024: £1.9 billion), with new additions including

a commercial development in Tung Chung with

a23-storey office tower, five-storey retail podium

and 20-storey data centre; a commercial and

residential development in Kowloon with six

residential towers; and a five-tower residential

development in Tai Po. Further new orders were

received for work in the Northern Metropolis,

including four nine-storey buildings at the Hong

Kong-Shenzhen Innovation and Technology Park

and civils contracts to prepare land and

deliverengineering infrastructure works for new

development areas. Northern Metropolis projects

now represent 26% of the Gammon order book.

Operational review

UK Construction

Further demand in UK energy and

defencemarkets

Balfour Beatty holds a market-leading position

ina growing UK infrastructure market, with

unmatched scale and vertically integrated

capability for delivering major and regional civils

projects. The market outlook has strengthened

during 2025, with the UK Government launching

a 10-year infrastructure strategy as it looks to

deliver on its objective to stimulate economic

growth by investing in and enabling infrastructure

development. The strategy is supported by the

publication of The Infrastructure Pipeline, which

details the projects to be delivered over the

10-year period, financed by at least £725 billion

of public funding and further material investment

from the private sector. This longer-term approach,

which includes planning reform and the creation

of the National Infrastructure and Service

Transformation Authority (NISTA), brings

improved certainty and clarity for the industry

asa whole, allowing UK contractors and their

suppliers to plan accordingly and invest in

capability. The Government also recognised the

necessity for further investment in UK defence,

which it forecast will create hundreds of thousands

of jobs and contribute to economic growth.

In 2025, Balfour Beatty has continued to target

three strategic growth markets in the UK – energy

transition and security, defence and transport. With

regard to energy, the essential long-term upgrade

to the UK’s energy infrastructure is underway and

the volume of work required to meet the UK’s net

zero ambitions is vast. The Group was successful

in adding two of its long-term power generation

targets to the order book during the year, with a

combined value of over £3.5 billion:

@ In conjunction with its major role in the

ongoing construction of the Hinkley Point C

nuclear power station in Somerset, Balfour

Beatty has been selected as one of three

contractors to deliver the construction of the

new Sizewell C nuclear power station in

Suffolk. In June, Balfour Beatty signed the

Programme Alliance Agreement in partnership

with Laing O’Rourke and Bouygues Travaux

Publics to deliver the main civil works at

Sizewell C, and as a result of the project

reaching financial close in November, around

£3 billion of Sizewell C work is now included

inthe Group’s order book;

@ Following a multi-year bid, including the delivery

of a front-end engineering design (FEED)

study, Balfour Beatty signed an £833 million

contract with Technip Energies to act as the

construction partner for Net Zero Teesside

Power - an onshore power, carbon capture and

compression project that is poised to be the

world’s first gas-fired power station with

carbon capture and storage.

In addition to these successes, the Group,

alongside Technip and GE Vernova, are working

on a further FEED study for a proposed new build

gas-fired power station with carbon capture and

storage for the Connah’s Quay Low Carbon Power

project. The Group also continues to pursue

opportunities in the UK’s emerging small modular

nuclear reactor market, and the UK Construction

division’s civil engineering expertise is expected

to be drawn on further as a result of the ongoing

expansion of power transmission and distribution

volumes within Support Services.

MAJOR MILESTONE ACHIEVED

FOR HS2’S A46 KENILWORTH

BYPASS

Working in close collaboration with HS2

and National Highways, Balfour Beatty

VINCI delivered a major milestone,

successfully sliding a 14,500 tonne

concrete box structure into position to

support the new high speed rail line.

The record breaking structure – Europe’s

heaviest of its kind – was constructed

alongside the existing road and installed in

a precisely executed operation, with the

A46 Kenilworth Bypass reopen to traffic

30 hours ahead of schedule – significantly

minimising disruption for road users.

Scan or click to read more about this

major milestone.

Balfour Beatty plc | Annual Report and Accounts 2025

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CONSTRUCTION SERVICES

CONTINUED

Operational review continued

UK Construction continued

Further demand in UK energy and defence

markets continued

In June, the UK Government released the

Strategic Defence Review, declaring defence as

an engine for growth, which will boost prosperity,

jobs and security for people across the UK and

called for a new partnership with industry, including

improved contract management, faster delivery

and a move to industry-standard construction

methods. This alignment with Balfour Beatty’s

capabilities, and the Group’s experience in

defence infrastructure and high-security

environments, means it is well placed to support

the UK Government’s objectives in this sector.

Balfour Beatty’s approach to growing its UK

defence market share includes winning further

work for both the Defence Infrastructure

Organisation, whose projects tend to be security

classified, and at Defence Nuclear Enterprise

(DNE) sites. In 2025, the Group’s live projects at

DNE sites included the Hub at AWE Aldermaston

and the expansion work at Rolls-Royce’s site in

Raynesway, Derby, needed to meet the growth

in demand from the Ministry of Defence and as a

result of the AUKUS agreement. During the year,

Balfour Beatty was selected by Rolls-Royce for a

second project of works at Raynesway, which

will see the Company deliver the critical nuclear

licensed infrastructure required to support the

client’s manufacture of fissile components for

the Royal Navy’s submarine propulsion systems,

and the new AUKUS submarines. Further major

DNE construction frameworks are currently being

pursued in 2026.

Transport remains an important component of

the UK Government’s growth plans and, while

fiscal headwinds are impacting the volume of

activity in the short term, support for major

infrastructure projects such as the Lower Thames

Crossing road scheme and rail projectssuch as

Northern Powerhouse Rail, theTranspennine

Route Upgrade and East West rail was reaffirmed

in 2025. The Government hasalso publicly

backed the expansion plans for Heathrow Airport.

National Highways’ draft third Road Investment

Strategy (RIS3), which includes £25 billion of

funding over five years and is due tobe finalised

imminently, has an increased focus on maintenance

and renewals rather than new roads while,

outside of HS2, the majority ofUK rail funding

inthe short term is also focused on operating,

maintaining and renewing the core railway.

Given Balfour Beatty’s strong market positions

and range of capabilities in the construction and

maintenance of roads and railways, and its

experience in airport construction, the Group

continues to see UK Transport as a growth area

in the medium term. The Lower Thames Crossing

road scheme, a project which the Group was

awarded £1.2 billion of work for in 2023 but has

yet to start the main works contract, was granted

a further £891 million of public funding in 2025

and NISTA are developing a private finance solution

to fund the project to completion. HS2 will continue

to be a material project for Balfour Beatty for the

foreseeable future, and following a pause caused

by a legal challenge, the c£200 million A57 Link

Roads scheme, delivering two new strategic

highways links between Manchester and Sheffield,

is expected to proceed in 2026. With the Group’s

depth of capabilities across transport construction

and maintenance, including asset management

across regional as well as national infrastructure

projects, Balfour Beatty is well positioned to play

a significant rolein the delivery of the UK

Government’s transport strategy.

Strong operational delivery takes PFO margin

above 3%

In 2025, Balfour Beatty’s UK Construction division

delivered an improved PFO margin for the fifth

year in a row and surpassed its long-standing 3%

margin target. This ongoing margin expansion is

built on a track record of strong operational

delivery and a portfolio of higher-quality and

lower-risk projects, overseen by the Group’s

disciplined and rigorous bidding process.

Balfour Beatty’s ambition to provide industry-leading

project delivery across the UK Construction

portfolio not only drives margin performance, but

also demonstrates the Group’s capabilities and

standards, thereby aiding the pursuit of future

work. This focus on project delivery, alongside

the disciplined bidding and strong client demand,

has contributed to the forward order book growing

by 44% in 2025, while remaining heavily weighted

towards lower-risk contract forms. As such, 88%

of the £8.9 billion order book is contracted on

target cost or cost plus incentivised fee terms,

while the remaining 12% is weighted towards

two-stage fixed-price contracts, which are

inherently lower risk than one-stage fixed-price

arrangements. The Group remains focused on

ensuring that new work is contracted on the

appropriate contractual terms and conditions for

the risk undertaken, in order to protect the

Group’s margin and reduce the loss-making

portion of the project portfolio.

On the UK’s largest infrastructure project, HS2,

Balfour Beatty and its joint venture partners are

delivering the main civil engineering works for the

Area North section and the new station at Old

Oak Common in London. On Area North, the

Balfour Beatty VINCI joint venture completed civil

engineering work on the 1-mile Long Itchington

Wood twin-bore tunnel as well as achieving tunnel

breakthroughs at both bores of the 3.5-mile

Bromford Tunnel. In addition, it successfully

pushed the 4,600-tonne M6 South Viaduct east

deck over the M6, with the final stage achieved

without closing the motorway. AtOld Oak Common,

the Balfour Beatty VINCI SYTRA joint venture has

installed over 70% of the first high-speed platform

slabs and commenced blockwork and mechanical

and electrical module installation. At the new

Hinkley Point C nuclear power station, good

progress continues to be made on the underground

marine works and the 230-tonne triple point shaft

formwork structure was lowered and installed

40metres underground to connect the three

tunnels. The Group is also part of the MEH

Alliance, which is delivering the mechanical,

electrical and HVAC installation at the power

station, with volumes increasing during the year.

The Major Highways team achieved substantial

completion of the major improvement scheme at

the interchange between Junction 10 of the M25

and the A3, with traffic management lifted in line

with scheduled expectations. The team also

completed its work on the National Emergency

Area Retrofit scheme, providing emergency

refuge areas on the M25, M3 and M4 and

enhancing safety on the network. Work began

during the year on the M3 Junction 9 scheme,

injoint venture with VolkerFitzpatrick, with

enabling works, piling and earthworks delivered

to facilitate significant structural works in 2026,

while the A63 project is on track to open to traffic

in the first half of 2026, with strong delivery in

2025 on major structural elements, such as the

underpass tunnel and pumping station.

UK Construction operates across the length and

breadth of Great Britain, delivering hundreds of

diverse projects. During 2025, the business installed

the first new bridge over the River Trent in

Nottingham for 65 years, commenced construction

on the new Nairn Academy school in the Scottish

Highlands and delivered restoration works on the

historic Riddings Viaduct, a Victorian structure

that spans the Anglo-Scottish border. Beyond the

new Rolls-Royce and power station contracts,

other projects added to the UK Construction

order book during 2025 included the

OPERATIONAL REVIEW CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

DunardCentre, Edinburgh’s first purpose-built

concert hall in over a century, and the South East

Pier Extension at Edinburgh Airport. Various

additional contracts, including new flood and

coastal defences in Suffolk and the South

Wokingham Distributor Road in Berkshire, were

awarded to Balfour Beatty through the SCAPE

Civil Engineering frameworks. Through the

Group’s partnership with SCAPE, it has been

helping to shape and strengthen local communities

for the last ten years, and remains contracted as

the sole delivery partner until November 2028.

US Construction

Disciplined approach to US growth

Balfour Beatty’s US Construction division

iscomprised of the US Buildings and US

Civilsbusinesses.

US Buildings is a construction management

business, diversified across geographies and

client sectors, which targets major cities and

urban areas in states with favourable economic

outlooks. The business delivered strong revenue

growth in 2025, demonstrating why it is one of

Balfour Beatty’s four chosen growth markets,

and is considered the lower-risk segment

withinthe division. With most of the projects

undertaken by US Construction contracted on

fixed-price terms, US Buildings utilise the early

issuance of subcontracts and insurance of the

supply chain to mitigate risk.

The US Civils business focuses on highways

projects in Texas and the Carolinas, and on local

rail and civils work in California. In contrast to the

Group’s approach to US buildings, civils contracts

in the US are generally delivered on a self-perform

basis, which on fixed-price arrangements gives

limited scope to mitigate inflation and schedule

risk. As a result, the Group remains cautious in

its approach to complex civils contracts in the US

and has reduced its exposure to the sector in

recent years, with 2025 revenue down by nearly

30% compared to 2023. Civils bidding is now

focused on projects that closely align to the

business’ core capabilities, with all major new

contracts in the last three years being in the

roadsector.

Strong revenue growth following period of

order book expansion

Balfour Beatty’s growth engine in the US

continues to be its buildings business, which

increased revenue by 29% (33% at CER) in 2025

and contributed 91% of US Construction

revenues (2024: 87%) following a strong period

of orders that began in the second half of 2024.

The business continued to win work at a similar

rate throughout 2025 and during the 18-month

period preceding year end, the order book grew

by 26% in local currency, driven by two key

factors: an organic growth strategy coupled with

falling interest rates.

Having identified the opportunity for growth in

2023, based on the strength of some core

markets, including aviation, leisure, education

and government, combined with the impact of a

more settled economy, the Group put to work its

two-pronged organic growth strategy to add

further diversification to its regional businesses.

The Group opened new offices, targeting additional

cities in states with existing Balfour Beatty offices,

and broadened the end-markets served in some

regions where the business was already active.

The new office locations are prospering and

contributing well to the growth in revenue and

order book. In Jacksonville, Florida, the team is

constructing a new terminal at Jacksonville

International Airport and delivering work for the

Transportation Authority, while in Sacramento,

California, the team is also working at the local

airport and has completed construction of the new

Cesar Chavez Elementary School. The Charleston

office in South Carolina has recently finished

construction of a senior living facility on Kiawah

Island and, in Savannah, Georgia, the team has

started construction of a local elementary school.

Given the success of the geographic expansion,

the Group opened a further new branch in 2025 in

El Centro, California, and will continue to monitor

further opportunities.

By broadening the regions in which it serves

certain end-markets, the US Buildings business

is further utilising its in-house expertise and

long-term customer relationships to drive organic

growth, with success in various sectors. In the

US data centre market, which is expanding at

pace, Balfour Beatty has strong recent history

ofdelivering projects in the Northwest for major

tech companies. During 2025, Balfour Beatty

hasworked with these customers to discuss

data centre opportunities outside of its core

Northwest market, which has resulted in the

Group being selected for a project in Virginia,

while projects in other new states are being

pursued. In aviation, in addition to the work in

Jacksonville and Sacramento, the business is

delivering projects at two airports in North Carolina

and has identified a strong pipeline of new

projects coming to market in the next three years

that closely match the Group’s experience and

capabilities. The Group has also seen further

revenue growth from its geographical expansion

of its theme park, correctional facility and student

accommodation project portfolios in the year.

Given the breadth of geographies and client

sectors served by Balfour Beatty’s US Buildings

portfolio, the overall business is somewhat

protected from sector and economic volatility.

One factor that did impact demand in the past

was the post-pandemic rise in interest rates, as

the increased cost of financing projects led to

delays in some projects being approved. Since

interest rates first started to drop in Q3 2024,

demand in the US buildings market has reacted

positively. This, combined with the success of

the geographic and sector expansion, has

contributed to the business consistently adding

around $3 billion of new contracts to the order

book every six months.

ENHANCING CONNECTIVITY

ONINTERSTATE 30 IN

DALLAS,TEXAS

Working in partnership with the Texas

Department of Transportation, Balfour Beatty

has been awarded an US$889 million

contract to reconstruct a 3.7km stretch of

Interstate 30 through Dallas County.

The project will double the number of

general purpose lanes from six to 12 and

deliver nine new crossings, enhancing

connectivity between I-30 the Southern

Gateway, the I-35E Lowest Stemmons and

The Horseshoe, all of which Balfour Beatty

has successfully completed for Texas

Department of Transportation over the last

five years.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

CONSTRUCTION SERVICES

CONTINUED

Operational review continued

US Construction continued

High delivery standards maintained across

USBuildings portfolio

During the year, progress has been made

onsignificant buildings projects including:

@ The 17-storey, 800-guestroom, Grand Hyatt

Miami Beach hotel in Florida;

@ The Marine Corps Recruit Depot San Diego

Recruit Mess Hall in California;

@ A social services campus for The Salvation

Army of North Texas Dallas;

@ The Portals IV 356-unit residential project

inWashington DC;

@ Three transformative library projects for

Multnomah County in Oregon, with one new

build and two major expansions;

@ Completion of the Gipson Play Plaza in North

Carolina, which is now the largest adventure

playground in the Southeast;

@ Completion of The Charles, a premier

multifamily development located in

Charleston’s waterfront district.

US Civils performance impacted by

delaysonTexas highways project

The US Civils business continued to pivot

towards a more concentrated portfolio of

projects in 2025, with a heavier weighting of

work delivered in highways and bridges, which

have historically been profitable activities for the

Group. This represented 67% of revenue in 2025

compared to 55% the year before, driven by both

an increase in highways volumes and less rail

activity. The performance of the division was

negatively impacted during the year by cost

overruns and schedule delays on a single joint

venture highways project in Texas, which

commenced in 2019 and is due to finish in

mid-2026. As to be expected, the Group is

pursuing cost recoveries.

US Civils’ focus on delivering highways projects

for long-term customers has driven order book

growth of 53% in 2025 and the division has

taken further steps to de-risk project contracting

and execution. New orders awarded in the year,

such as an $889 million contract with the Texas

Department of Transportation to reconstruct a

3.7km section of Interstate 30 in Dallas County

and a $260 million share of a contract with the

South Carolina Department of Transportation to

replace ageing bridges over Lake Marion, are

reflective of the Group’s capabilities and focus

going forward. The Group remains confident that

US highways will be a profitable activity for the

Group in the medium term.

Gammon

Strong positions in Hong Kong and Singapore

Gammon, Balfour Beatty’s 50:50 joint venture

with Jardine Matheson based in Hong Kong,

hasa local reputation for delivering high-quality

projects in Southeast Asia. The Hong Kong

construction sector remains positive during

adifficult fiscal period for the region, with

Government commitments to invest in

infrastructure projects, and in particular to

accelerate the development of the Northern

Metropolis. Demand remained strong in Singapore,

particularly for commercial and tourism-related

projects, and local orders comprise 14% of

Gammon’s order book at year end.

Gammon continues to have a strong share of

both the buildings and civils markets in Hong

Kong. In buildings, the focus is on the use of

Design for Manufacture and Assembly (DfMA)

and modular construction to improve productivity

and efficiency and expanding the customer base

on a selective basis. In civils, the strategy is to

leverage engineering excellence, with a key area

of future work likely to be from significant

infrastructure programmes in Hong Kong and

inSingapore.

During 2025, Gammon completed the new coach

hall at Hong Kong International Airport and made

strong progress towards completion of the

newTerminal 2 departure facilities, which are

scheduled to open in March 2026. The business

also completed its work on the Central Kowloon

Route, a major three-lane road, where it delivered

major work packages covering critical tunnel

infrastructure, complex electrical and mechanical

systems and ventilation buildings. The Hong

Kong buildings team completed the construction

of One Causeway Bay, an iconic development on

the Victoria Harbour, and celebrated the topping

out of the Hong Kong Housing Society’s

Subsidised Sale Flats Project in Kai Tak, which

comprises two 40-storey residential towers.

In Singapore, Gammon made good progress

onprojects including the Ang Mo Kiu Station,

where the business is responsible for the design,

construction and tunnelling works at the

interchange station, and the Global Switch

Singapore Data Centre, where the team is

replacing the existing cooling systems.

TRANSFORMING HONG KONG

INTERNATIONAL AIRPORT: THE

TERMINAL 2 EXPANSION

Gammon, is delivering the major expansion

of Terminal 2 at Hong Kong International

Airport, a HK$12.88 billion scheme that

forms part of the airport’s transformative

Three Runway System project.

The project includes the expansion of

the main terminal building, new annexe

structures, interconnecting bridges,

significant landside transport upgrades

andadvanced airport systems – all designed

to support arrival and departure operations.

This landmark project showcases the

team’s commitment to engineering

excellence and innovative construction

solutions, reinforcing Hong Kong

International Airport’s position as a

world-class global aviation hub for

generations to come.

OPERATIONAL REVIEW CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

SUPPORT SERVICES

REVENUE

£1,427m

2024: £1,210m

STATUTORY REVENUE

£1,427m

2024: £1,210m

UNDERLYING PROFIT FROM OPERATIONS

£122m

2024: £93m

STATUTORY PROFIT FROM OPERATIONS

£145m

2024: £93m

ORDER BOOK

£4bn

2024: £3.2bn

1 Including share point of ventures and associates.

Financial review

The Support Services business provides power,

plant, road and rail maintenance services and is

characterised by profitable recurring revenues

underpinned by long-term frameworks.

Support Services revenue increased by 18%

to£1,427 million (2024: £1,210 million) due

tohigher power transmission and distribution

volumes, with power revenues nearly doubling

since 2023. Underlying profit from operations

increased to £122 million (2024: £93 million), as

the growth in revenue was largely related to the

disciplined delivery of higher-margin activities.

This resulted in PFO margin of 8.5% in the year

(2024: 7.7%), which is above the targeted 6-8%

PFO margin range and represents outstanding

performance in the segment. Statutory profit for

the year was £145 million (2024: £93 million).

Support Services PFO is expected to increase

in2026, with further growth in power volumes

and PFO margin remaining above 8%.

The Support Services order book increased

by25% to £4.0 billion (2024: £3.2 billion) driven

by new power transmission and distribution

contacts and a strong period of work winning

inthe Rail business.

Support Services

2025 2024

Order book

(£bn) 4.0 3.2

Revenue

(£m) 1,427 1,210

Profit from

operations

(£m) 122 93

Non-underlying

items (£m) 23 –

Statutory profit from

operations (£m) 145 93

1 Including share of joint ventures and associates.

2 Before non-underlying items (Note 9).

A reconciliation of the Group’s performance measures to its

statutory results is provided in the Measuring our financial

performance section.

Operational review

Accelerating growth in power transmission

and distribution market

The power transmission and distribution market

in the UK, within which Balfour Beatty holds

market-leading scale, has continued on a rapid

trajectory of growth, which is expected to continue

in the medium term. In 2025, Ofgem confirmed

its final RIIO-T3 determinations and committed

an initial £10 billion of funding for electricity

network upgrades in the price control period

(2026-2031) for the three transmission owners:

National Grid, Scottish and Southern Electricity

Networks (SSEN) and Scottish Power Energy

Networks (SPEN). The regulator recognised that

this was the first portion of what its own forecasts

suggest could be over £70 billion of funding in

the period to 2031. A large portion of this will be

through the Accelerated Strategic Transmission

Investment (ASTI) programme for major new

infrastructure in which Balfour Beatty is playing

aleading role. The Group is also seeing major

demand as a result of new connections to the

grid, through new renewable generation, battery

storage, industrial clients and data centres, which

in turn requires the transmission owners to invest

in their networks.

Balfour Beatty’s market-leading position in

theUK power transmission and distribution

construction industry is built not only on scale,

but also a unique end-to-end offering, including

design, steel fabrication, panel manufacturing,

ground engineering, all aspects of transmission

and distribution construction, and commissioning.

As well as continued growth in its core disciplines

of overhead lines, underground cabling and

substations, the Group has also entered the

growing converter station market, where it is

ideally placed to deliver civil engineering works.

The converter station strategy is aligned to that

of the rest of the Power business; focusing

onwork for the regulated transmission and

distribution network owners, where the Group

has existing long-term framework positions and

strong technical knowledge and experience. The

business was selected for various schemes and

frameworks during 2025 and the order book

increased by 38%. Progress with the three key

customers included:

@ Awarded two places on National Grid’s High

Voltage Direct Current supply chain framework,

to deliver both the civil engineering works for

future converter station schemes, as well as

the associated onshore underground cabling

works. The five-year framework has an option

to extend for a further three years;

@ Appointed by National Grid as the regional

delivery partner for the North East of England

as part of its £8 billion Electricity Transmission

Partnership, designed to accelerate the

delivery of vital substation infrastructure;

@ Awarded a place on SPEN’s transmission

business’ Strategic Agreement for Overhead

Line Works framework. The five-year framework

has an option to extend for a further five years;

@ Planning consent granted for the £690 million

Skye 132kV Reinforcement project for

SSEN,which also placed a major order for

BalfourBeatty’s steel fabrication facility to

manufacture towers for the ASTI programme,

with manufacture and testing of a new tower

type underway.

As this market continues to expand at pace,

thebusiness continues to grow its capacity and

capability. Over 500 people joined the Power

T&D business in 2025, taking new recruits to

over 1,000 in two years. Core to the business’

growth strategy is the utilisation of Balfour

Beatty’s full UK offering. By leveraging the scale

and depth of those capabilities, the business can

add value for its long-term customers, while

bringing new work to other parts of the Group.

Balfour Beatty plc | Annual Report and Accounts 2025

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RESTORING AND ENHANCING

THE NATURAL ENVIRONMENT

ON THE NORTH WESSEX

DOWNS

Balfour Beatty is nearing completion on

the North Wessex Downs Visual Impact

Provision (VIP) project on behalf of

National Grid, a once-in-a-generation

scheme to transform thelandscape near

Devizes by replacing 4.6km ofoverhead

electricity lines with underground cables.

The project includes the construction of

newsealing end compounds and the

careful installation of underground

infrastructure designed to significantly

reduce the visual impact across this

nationally important landscape.

In 2025, Balfour Beatty finished installing

3.5km of cables on the North Wessex

Downs VIP scheme, marking a major

milestone as the project moves

towardscompletion.

By restoring views and enhancing

thenatural environment, the scheme

demonstrates the team’s commitment

todelivering environmentally sensitive

infrastructure solutions that benefit local

communities for generations to come.

SUPPORT SERVICES CONTINUED

Operational review continued

Accelerating growth in power transmission

and distribution market continued

During the year, Balfour Beatty’s work for National

Grid included work on Bramford-Twinstead, a

new overhead line and underground cable scheme

in Suffolk, which forms part of the client’s Great

Grid Upgrade, good progress on three substation

projects and the installation of all underground

cables on the North Wessex Downs VIP scheme.

The business also mobilised and made good

progress on the Prysmian’s Eastern Green Link

2onshore HVDC cable installation, a critical new

energy ‘superhighway’ between England and

Scotland. In Scotland, work for SSEN included

the ongoing early contractor involvement (ECI)

and design works on the Group’s ASTI projects,

including the Netherton Hub converter station,

Longside substation and Beauly-Blackhillock-

Peterhead overhead line projects, in addition

tothe separately funded Skye 132kV Reinforcement

project. Work also continued on the Argyll

Reinforcement project, where the Group is

constructing three new substations. The Group

also began ECI work in the year on two overhead

line upgrade schemes for SPEN.

Bidding success in road maintenance

The addressable portion of the road maintenance

market continues to be well funded, with the

Government’s November 2025 Budget

announcing £7.3 billion of capital funding for local

highways maintenance in England to be allocated

across the next four financial years. This represents

a further increase on the record £1.6 billion

allocated in the current year, which was

£500million higher than 2024-2025.

In 2025, the volume of road maintenance work

remained high, albeit slightly lower than 2024

due to the completion of a contract with West

Sussex in the first quarter. Balfour Beatty was

awarded a £75 million, five-year contract

bySouthampton City Council, procured through

theSCAPE framework, to delivered highway

maintenance services. In January 2026, the

Group was awarded a £315 million seven-year

Warwickshire Highways Maintenance contract.

The new agreement marks the Company’s third

consecutive term delivering the work and there

isan option to extend the contract by a further

six years based on the successful delivery of the

initial term, worth up to a total value of £900 million.

Looking forward, there are further Local Authority

contracts coming to market in the next year for

which the Group is well positioned, as it looks to

further deploy its effective maintenance solutions

and technology-driven infrastructure management.

Strong year for rail orders

Balfour Beatty’s Rail business delivered another

solid year of operational performance in 2025,

which was a very strong period for order intake.

The business signed around £750 million of new

orders, including an eight-year agreement, with a

two-year option to extend, to supply, operate and

maintain a fleet of high-performance tamping

machines to support track renewal and maintenance

projects across England, Scotland and Wales; a

place on Network Rail’s CP7 Western Reactive

framework; and further track renewal work with

the Central Rail Systems Alliance.

This order intake is a strong reflection of the

diverse expertise held within the Rail business.

During a period where track renewal work under

CP7 has been slow in coming to market, this

diversity is a key strength in ensuring that the

business continues to perform well and maintain

volumes. Opportunities in the railway enhancement

space and through supplementary services and

activities are being developed, all of which have

additional government funding. This includes

enhancement opportunities such as Transpennine,

East West Rail and various improvements across

the TfL network and wider local and mayoral

authority schemes, which all received additional

committed funds in the spending review.

Theseopportunities are in addition to the Group’s

existing framework positions and supplementary

in-house capabilities, such as design and the

supply and operation of plant, all of which have

significant order book and pipeline.

During 2025, the Group completed the disposal

of Omnicom Balfour Beatty, its specialist rail

measurement hardware and intelligent software

business, for a consideration of £24 million to

Hitachi Rail. A gain on disposal of £23 million

wasrecorded within non-underlying results

forthe year.

OPERATIONAL REVIEW CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

INFRASTRUCTURE INVESTMENTS

REVENUE

£629m

2024: £606m

STATUTORY REVENUE

£473m

2024: £394m

UNDERLYING PROFIT BEFORE TAX

£16m

2024: £54m

STATUTORY PROFIT BEFORE TAX

£14m

2024: £51m

DIRECTORS’ VALUATION

£1.07bn

2024: £1.25bn

1 Including share point of ventures and associates.

Financial review

Infrastructure Investments made a £31 million

pre-disposals operating loss in the year (2024:

£8million) driven largely by monitor and legal

costs in military housing. This underlying loss

was offset by a £36 million gain on asset disposals,

resulting in PFO of £5 million (2024: £35 million).

Balfour Beatty continues to invest in attractive

new opportunities, each expected to meet its

investment hurdle rates. In the year, the Group

invested £29 million in new and existing projects,

with two US multifamily housing projects added

to the portfolio. The Group also continues to sell

assets, timed to maximise benefit to shareholders,

with twelve asset disposals completed in 2025

across three transactions. In the UK, the Group

sold its stake in a 536-bed student accommodation

building in Glasgow and completed a ten-asset

disposal, which comprised three offshore

transmission owners (OFTOs), five street lighting

projects, one biomass plant and one road

concession. In the US, the Group sold one

multifamily housing project in Columbia,

SouthCarolina. In total, asset sales delivered

£36million gain on disposal and £120 million of

cash proceeds, which was above the Directors’

valuation. Each of the three transactions achieved

end-to-end multiples in the range of 2 to 2.5 times.

Both the gain on disposal and the cash proceeds

for 2025 included £2 million of contingent

consideration received in the year in relation

tothe University of Texas at Dallas student

accommodation disposal completed in 2024.

Infrastructure Investments PFO for 2026, prior

to disposals, is forecast to be a small loss and

isaligned to the Group’s agreement with the

USDepartment of Justice to extend both

BalfourBeatty Communities’ plea agreement

andmonitorship to 6 June 2026. 2027 PFO,

priorto disposals, is forecast in a positive range

of £10to £20 million.

BALFOUR BEATTY

COMMUNITIES’ ACQUISITION

OF RIVER POINTE IN CONROE

Balfour Beatty Communities has expanded

its multifamily portfolio in eastern Texas

with the acquisition of River Pointe, a

300-unit gated, garden style community

located in the rapidly growing city of Conroe.

The community offers a range of thoughtfully

designed one, two and three-bedroom

homes featuring spacious layouts, tall

ceilings, large patios, walk-in closets,

gourmet kitchens and stainless steel

appliances, supporting the Company’s

commitment to delivering high-quality

housing in key markets.

As part of the acquisition, a programme of

enhancements to both interiors and shared

amenity spaces is planned, reinforcing

Balfour Beatty Communities’ long-term

focus on creating attractive, well-connected

residential environments that meet the

evolving needs of modern renters.

Net investment income of £11 million was £8 million

lower than the prior year (2024: £19 million) due

to an impairment writeback of subordinated debt

in 2024 not being repeated. This was partially

offset by an increase in interest received

onsubordinated debt.

Underlying profit before tax decreased to £16 million

(2024: £54 million). Statutory profit before tax

was £14 million (2024: £51 million).

Infrastructure Investments

2025

£m

2024

£m

Pre-disposals

operating profit² (31) (8)

Gain on disposals² 36 43

Profit from

operations² 5 35

Net investment

income

11 19

Profit before tax² 16 54

Non-underlying

items (2) (3)

Statutory profit

before tax 14 51

2 Before non-underlying items (Note 9).

~ Subordinated debt interest receivable, net interest receivable

on PPP financial assets and non-recourse borrowings, fair

value (loss)/gain on investment asset and impairment to

subordinated debt receivable and accrued interest.

A reconciliation of the Group’s performance measures to its

statutory results is provided in the Measuring our financial

performance section.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

INFRASTRUCTURE

INVESTMENTSCONTINUED

Operational review

Balfour Beatty’s competitive expertise to finance,

develop, build and maintain infrastructure puts

the Group in a strong position to capitalise

onnew investment opportunities. The Group

hasmaintained its disciplined approach to

investments and disposals to ensure the delivery

of investment hurdle rates and is currently

assessing investment opportunities in:

@ Student accommodation: Across the UK and

US, Balfour Beatty is progressing a range of

opportunities to develop student housing

solutions on and off campus;

@ Military housing: The Group manages and

operates 21 US military housing projects,

andcontinues to redevelop houses across

theportfolio;

@ Residential: Balfour Beatty continues to see

attractive US multifamily housing come to

market, providing opportunity to invest profitably

in the regeneration of these properties;

@ US P3: The US has become an increasingly

exciting market for public-private partnerships,

and, to date, 42 states (plus Washington DC)

have passed legislation allowing P3 projects; and

@ Energy transition: As the UK’s energy mix

transitions to more renewable sources, and the

UK adopts more sustainable transport such as

electric vehicles, there are opportunities for

private sector investment.

In the UK, the Group is constructing the

1,899-bed West Slope student accommodation

development on behalf of the University of

Sussex. The first new student accommodation

and the health and wellbeing centre are expected

to be open in time for the 2026/27 academic

year, with more accommodation, catering and

retail facilities opening over the following two years.

In the US, the Investments business began

development of a 1,070-bed undergraduate

student housing complex at the University of

Texas in Austin, made progress on the construction

of the 1,204-bed William & Mary University

project in Virginia and was awarded predevelopment

agreements to develop on-campus accommodation

at the University of Florida and the Wentworth

Institute of Technology. The Group’s key US P3

investment is the automated people mover

project at Los Angeles International Airport, with

US Construction contributing to the build phase

and Infrastructure Investments providing an

element of the financing. Construction is due to

complete in the coming year, during which

Balfour Beatty will inject its committed equity.

Further pipelines of campus and P3 projects are

under review.

Balfour Beatty continues to invest in attractive

new opportunities and has added two new projects

to the portfolio in the first half of the year. The

Gathering at Arbor Greens in Newberry, Florida,

and River Pointe in Conroe, Texas, are two

multifamily housing communities with c.300

units each.

In US military housing, the Group continues to

work with the independent compliance monitor,

appointed by the US Department of Justice (DoJ)

in 2021 and commencing work in 2022. During

the year, the Group agreed with the DOJ to

extend both Balfour Beatty Communities’ plea

agreement and monitorship to 6 June 2026 to

allow the Group further time to complete planned

remediation work.

As part of a major redevelopment programme

atFort Carson, the Group began work on the

construction of 56 new homes in 2025. In early

2026, following the agreement of a 25-year

ground lease extension to 2074, the Group

successfully completed a refinancing which

raised $444 million for the remaining phases of

the redevelopment, including the demolition of

approximately 300 older homes, the construction

of close to 400 new, modern residences, and the

renovation and modernisation of an additional

334 existing homes. This work will commence

inMay 2026 and extend through to 2030, with

Balfour Beatty’s US Buildings team delivering

construction. The US Military are looking at

further redevelopments to modernise on-base

housing, which will bring opportunities to Balfour

Beatty. One such project is a 76-home scheme

at Fort Gordon, which the Group started during

the year.

In 2023, Balfour Beatty Investments partnered

with Urban Electric Networks, a British EV charge

point operator, to establish Urban Fox and address

the growing need for accessible and innovative

electric vehicle charging infrastructure in the UK.

The partnership combines Urban Electric Networks’

innovative and entrepreneurial spirit with Balfour

Beatty’s unmatched scale, skill and capability in

financing and delivering infrastructure in the heart

of local communities.

In February 2026, Urban Fox signed a 20-year

agreement with Kent County Council to deploy

alarge-scale programme of on-street electric

vehicle chargers across Kent, installing up to

10,000 new on-street electric vehicle chargers

and prioritising areas where residents have

limited access to off street parking.

OPERATIONAL REVIEW CONTINUED

TRANSFORMING STUDENT

LIVING WITH THE UNIVERSITY

OF SUSSEX AT THE WEST SLOPE

RESIDENCES

Balfour Beatty is responsible for the

construction of the West Slope Residences

at the University of Sussex, a significant

development providing 1,899 additional

student bedrooms, as well as a health and

wellbeing centre and improved retail and

dining facilities.

The project forms part of a long-term

partnership with the University, underpinned

by a 54-year design, build, finance and

maintain contract, and supported by significant

investment including £32 million of equity

from Balfour Beatty Investments.

Modular construction techniques are being

deployed to manufacture steel frames and

bedroom units offsite, reducing carbon

emissions and minimising vehicle

movements through the sensitive

SouthDowns environment.

Set to complete in phases from 2026,

West Slope represents the University’s

most ambitious accommodation

programme to date, creating a modern,

accessible and wellbeing-centred campus

that will enhance the student experience

for generations.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

DIRECTORS’ VALUATION OF THE INVESTMENTS PORTFOLIO

Strong

trackrecord

of value

creation

The Directors’ valuation

decreased by 15% to £1,069

million (2024: £1,254 million).

Theportfolio is 65% weighted

towards the US (2024: 58%).

Thenumber of projects in the

portfolio decreased by 11 to 49

(2024: 60).

Balfour Beatty invested £29 million (2024:

£28million) in new and existing projects. During

the year the Group added two new multifamily

housing projects, one in Conroe, Texas and

another in Newberry, Florida.

Cash yield from distributions amounted to

£31million (2024: £34 million).

Twelve assets were sold in the period.

Thisincluded ten UK PPP assets sold to the

Group’s co-shareholder; a direct-let student

accommodation asset in Glasgow; and one

multifamily housing project in South Carolina.

The total consideration of £120 million also

included £2 million of contingent consideration

received in relation to the University of Texas

atDallas student accommodation disposal

completed in 2024.

Unwind of discount at £82 million (2024:£81million)

is a function of moving the valuation date forward

by twelve months with the result that future cash

flows are discounted by twelve months less.

Operational performance movements resulted in

a £30 million decrease (2024: £2 million decrease).

The operational performance movements in the

UK were primarily due to a reduction in the

valuation of the student accommodation

portfolio. In the US the movement was driven

primarily by lower broker valuations of US

multifamily housing assets and higher than

forecast independent compliance monitor costs

in US military housing.

In addition, the discount rates applied to project

cash flows were increased to reflect changes

inlong-term interest rates and the secondary

market in both the UK and US, leading to a

reduction in value of £62 million.

The foreign exchange movement was a

£53million decrease, as sterling appreciated

against the US dollar (2024: £12 million increase).

Movement in value 2024 to 2025

£m 2024

Equity

invested

Distributions

received

Sales

proceeds

Unwind of

discount

Operational

performance

Discount

rates FX 2025

UK 525 1 (21) (113) 34 (20) (29) – 377

US 729 28 (10) (7) 48 (10) (33) (53) 692

Total 1,254 29 (31) (120) 82 (30) (62) (53) 1,069

Portfolio valuation December 2025

Value by sector

Sector

2025

No. projects

2024

No. projects

2025

£m

2024

£m

Roads 6 12 139 162

Healthcare 2 2 131 133

Student accommodation and Residential 5 7 107 166

Energy transition – 4 – 64

UK total 13 25 377 525

US military housing 21 21 562 605

Student accommodation and other PPP 5 5 56 58

Residential housing 10 9 74 66

US total 36 35 692 729

Total 49 60 1,069 1,254

Value by phase

Phase

2025

No. projects

2024

No. projects

2025

£m

2024

£m

Operations 46 57 1,025 1,208

Construction 3 3 44 46

Total 49 60 1,069 1,254

Value by income type

Income type

2025

No. projects

2024

No. projects

2025

£m

2024

£m

Availability based 7 17 286 370

Demand – operationally proven (2+ years) 39 39 742 836

Demand – early stage (less than 2 years) 3 4 41 48

Total 49 60 1,069 1,254

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

UK PORTFOLIO VALUE AT A RANGE OF DISCOUNT RATES

600

700

500

Directors’ valuation £m

Discount rate

December 2024 December 2024December 2025 December 2025

400

300

200

100

+2.0% +1. 5% +1.0% +0.5% DV case -0.5% -1.0% -1.5% -2.0%

482

525

577

656

729

818

343

377

419

772

692

626

US PORTFOLIO VALUE AT A RANGE OF DISCOUNT RATES

1,000

Directors’ valuation £m

Discount rate

800

600

400

200

+2.0% +1.5% +1.0% +0.5% DV case -0.5% -1.0% -1.5% -2.0%

PORTFOLIO INVESTMENT, DIVESTMENT AND DISTRIBUTIONS

Directors’ valuation £m

Distributions Investment Divestment Directors’ valuation

Distributions, investment and divestment

-250

-50

-500

-100

-750

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

-150

250

500

100

750

150

1,000

200

1,250

250

1,500

DIRECTORS’ VALUATION OF THE INVESTMENTS PORTFOLIO CONTINUED

Methodology and assumption changes

The methodology for valuing most investments

in the portfolio remains the discounted cash flow

(DCF) method. Under this methodology cash

flows for each project are forecast based on

historical and present performance, future risks

and macroeconomic forecasts. They also factor

in secondary market assumptions. These cash

flows are then discounted using different discount

rates, which are based on the risk and maturity of

individual projects and reflect secondary market

transaction experience. The main exception to

the use of DCF is for US multifamily housing

projects which, due to the perpetual nature of the

assets and the depth and liquidity of the rental

housing market, are valued based on periodic

broker reports for each property.

The valuation methodology used at the previous

Directors’ valuation is unchanged.

Discount rates applied to the UK portfolio range

from 8% to 10.25% (2024: 7.25% to 10.25%)

depending on the maturity and risk of each

project. The implied weighted average discount

rate for the UK portfolio is 9.0% (2024: 8.4%).

A1% change in the discount rate would change

the value of the UK portfolio by approximately

£38 million.

Discount rates applied to the US portfolio range

from 6.75% to 10.5% (2024: 6.25% to 10.5%),

with an implied US weighted average discount

rate of 8.2% (2024: 7.9%). A 1% change in the

discount rate would change the value of the US

portfolio by approximately £73 million.

The portfolio remains positively correlated to

inflation. A 1% change in the long-term inflation

rate in the UK portfolio would change the

valuation by approximately £20 million and a 1%

change in the long-term rental growth rate in the

US portfolio would change the valuation by

approximately £70 million.

As in previous periods, the Directors’ valuation

may differ significantly from the accounting book

value of investments shown in the financial

statements, which are produced in accordance

with UK-adopted international accounting

standards rather than using a discounted cash

flow approach. A full reconciliation is provided

insection i) of the Measuring Our Financial

Performance section on page 67.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

HEALTH, SAFETY AND WELLBEING

PERFORMANCE STATISTICS

LOST TIME INJURY RATE

0.08

MAJOR INJURY RATE

0.03

ACCIDENT FREQUENCY RATE 3-DAY

LOSTTIMEINJURIES

0.06

ACCIDENT FREQUENCY RATE 7-DAY

LOSTTIMEINJURIES

0.05

Our Zero Harm commitment means no incidents,

injuries or ill health caused by our work activities,

and that everyone connected to our projects

goes home safe and well every day.

Oversight and governance of the organisation’s

Zero Harm performance is provided at Board

level by the Safety and Sustainability Committee,

which continues to be overseen by Gabby Costigan,

Independent Non-executive Director.

The Executive Committee continues to drive

accountability for the strategy, working closely

with the Health, Safety and Wellbeing Senior

Leadership team to identify areas of focus and

review serious incidents where required.

Responsibility for the Quality Enabling Function

was also brought under the leadership of our

Group Health, Safety and Wellbeing Director,

LeeHewitt, this year. This recognises the role

that the Quality discipline and our Right First

Time approach have in delivering works safely,

tothe required specifications, avoiding the risks

associated with unnecessary rework.

Local governance remains robust, with the

Inspirational Supervision forum, business

unit-level Safety, Health and Environment

Leadership team (SHELT) meetings, and the

Project Construction Leads group, all working

tostrengthen local governance and Zero Harm

leadership across our business. We continue

tobe a key stakeholder inthe Tier 1 Contractor

Forum, and to host our Strategic Supplier SHELT

meetings to drive consistent standards across

the industry.

Zero Harm:

governance,

culture and

performance

Health, safety and wellbeing

remain our highest priority,

underpinned by strong

governance and accountability.

ZERO HARM HIGHLIGHTS

@ Our Balfour Beatty Ground Engineering

(BBGE) business delivered a sector leading

safety performance in 2025, completing the

entire year LTI-free and reaching 21 months

without a lost time injury. This success has

been driven by strong leadership and digital

innovation. Collaboration between Balfour

Beatty’s Asset and Technology Solutions

team, BBGE and our digital permit supply

chain partner has helped address serious

fatal risks such as concrete pumping and

has improved plant safety. BBGE’s

performance was further supported by the

SB3 joint venture achieving Zero Harm on

complex HS2 works in 2025.

@ Supported by strong leadership and

disciplined risk management, our Regional

Scotland business recorded a full year

freeof lost time injuries and reportable

incidents, surpassing three million safe

hours across 35 projects.

@ In the US, ‘live traffic’ has been identified as

the fifth fatal risk in construction helping to

reinforce key control measures and focus

our teams’ and the travelling public’s

attention to the hazard.

Below: BBGE’s precast piling works at the UK’s first Cryogenic Energy Storage facility, Carrington Power Station.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

DIGITAL SAFETY

Across the Group, we continue to leverage

advances in digital technology, especially around

AI, to drive a step-change in performance.

Digitaltools give us the opportunity to enforce

our best-in-class health, safety and wellbeing

management system consistently and robustly

across all our operations.

Copilot

The Health, Safety and Wellbeing team has been

key in the development of the business’s three

master Copilot Agents – Inspection and Test

PlanReviewer Agent, Safety Briefing Agent,

andBusiness Management System Agent.

Thesespecialised AI tools automate complex

workflows and streamline key processes.

Read more about our investment in Copilot

andthe benefits it brings to Balfour Beatty

onpage20.

ChatBMS

Balfour Beatty’s Business Management System

(BMS) Agent pilot was launched in 2025, advancing

business efficiency by allowing employees to

query over 8,000 Company policy and procedure

documents for instant, summarised responses.

Accessed via a chat interface, the ChatBMS

agent responds with concise answers and relevant

citations, offering the option to ’read more’. The

inclusion within ChatBMS of a designated Health,

Safety and Wellbeing agent supports our Zero

Harm agenda, by providing immediate access to

critical safety processes and procedures and

supporting efficient business operations.

HEALTH, SAFETY AND WELLBEING CONTINUED

AI-powered daily activity briefings

Streamlining daily safety briefings, the Safety

Briefing Agent gathers data, including work

schedules, historical incidents, permits, and

weather conditions, to deliver targeted insights

tosite supervisors. By automating approximately

80% of briefing materials, this significantly

reduces preparation time and delivers consistent,

risk-focused briefings. Specifically designed for

ease of use, the tool enables supervisors to plan

and brief works with full access to the organisation’s

corporate memory, as well as incidental hazards.

Following two successful pilots, the briefing

module is set to launch Company-wide in 2026.

Service strikes

The widespread adoption of digital permits

intheUK supported by a revised, reinforced

Utilities Avoidance Procedure, continues to help

send more colleagues home from work safely.

In2025 we saw another 30% reduction in the

UK’s service strikes year on year from 128 to 84.

Following an investigation into service strikes

inour US business, and through the use of

ourHealth, Safety and Wellbeing Consistency

Forum, we will look to standardise a digital

approach to service avoidance in 2026. This will

see us deploy a new digital platform, accompanied

by greater operational controls to encourage

better efficiency, drive safer behaviours, and

ultimately produce safer outcomes.

SAFETY PERFORMANCE

We continually focus on ways to drive and

improve safety performance. However, despite

our continued focus on achieving Zero Harm, one

of our colleagues was fatally injured inMay while

carrying out steel propane tank decommissioning

work in the US Buildings business.

As an organisation, we are determined to learn

from this tragic event and to implement the findings

across our operations, ensuring that we consistently

adopt best practice across all our geographies.

Balfour Beatty delivered more worked hours

Group-wide than ever before in 2025, and our

overall safety performance remained strong. The

breadth, variety and technical complexity of the

work undertaken continues to set us apart from

our peers in the sector, and this year we sent

more people home than ever free from incident.

Our lost time injuries (excluding our international

joint ventures) have been reduced in both rate

and absolute numbers from 0.09 (100 injuries)

in2024 to 0.08 (89 injuries) in 2025.

Our businesses in the US and UK each recorded

their lowest rates of lost time injuries (LTI) in

2025 (0.05 and 0.09, respectively).However, we

have also seen an increase of 0.01in our major

injury rate, driven predominantly by lower-limb

injuries and slips, trips and falls. Toaddress this,

we haveestablished a dedicated working group

to accelerate action and improvement in this

area. Work is already underway, with a focus on

individual behaviours, incident investigation,

andthe trialling of new footwear.

MAJOR INJURY RATE

0.02

0.03

0.02

0.05

LOST TIME INJURY RATE AND HEALTH, SAFETY AND WELLBEING OBSERVATIONS

Observations

LTIR

00.00

0.05

100,000

0.10

200,000

0.15

300,000

0.20

400,000

0.25

500,000

0.30

600,000

700,000

800,000

900,000

Pre 2022 LTIR adjusted upwards in 2022 report, following internal reclassification of

incidents within one business area. Excluding international joint ventures.

0.18

0.15

0.11

0.09

0.05

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Dynamic risk assessment

Gambot has develop a mobile virtual assistant to

support dynamic risk assessments. It has an

easy-to-use conversational interface and is

predominantly used by frontline employees to

improve safety and productivity on our sites.

Asan example, project-based colleagues are

submitting safety observations and dynamic

riskassessments to Gambot through a messaging

app that has guided questions. The entire reporting

process takes less than two minutes, a significant

improvement over the traditional process.

Roadworker protection

Roadworker abuse continues to be one of the

key hazards facing construction workers in the

highways sector.

Across Balfour Beatty’s UK operations, on

average, three incidents of abuse against

roadworkers are formally reported every day,

with many more likely to go unreported.

In 2025 we continued to lead industry efforts to

address roadworker abuse through a variety of

workstreams. We deployed new technology;

using AI-enabled dashboards to strengthen

reporting, and expanded body-worn and CCTV

cameras systems to deter and to gather evidence.

In the US, our teams have deployed a

‘vehicle-to-everything’ communication network,

Safety Cloud, across three North Carolina

projects. This system sends real-time digital

alerts to motorists within a one-mile radius of

work activities, warning of work zones, lane

closures and hazards, helping to reduce risk

andimprove traffic awareness.

We are committed to improving mental health

and wellbeing across the construction industry.

Following business-wide accreditation to ISO

45003 in 2024, the global standard for managing

psychological health and safety, we have completed

six further days of audits in 2025 with zero major

non-conformances. The focus has been on

embedding the standard across business-as-usual

processes and supporting our projects to take a

proactive and holistic approach to wellbeing.

Scan or click to hear

how we are tackling

roadworker abuse.

Above: Gambot, a mobile virtual assistant

for dynamic riskassessments.

NEW WELLBEING FRAMEWORK

Our teams consistently develop creative

solutions and innovative ideas to enhance

health, safety and wellbeing by using

MyContribution (MyC).

At the Health, Safety and Wellbeing Conference

last October, wellbeing was a key theme

amongst the MyC ideas being submitted.

Onestandout MyC idea, shared by Elaine

Ramsay, Technical Trainer, focused on

encouraging teams and colleagues to spend

time away fromtheir desks.

The one-hour break is meant to help reduce

stress, significantly improve moods and

foster

stronger connections between colleagues

giving them a chance to socialise.

The idea was taken onboard by the Health

team who also captured additional feedback

from the project teams on better supporting

wellbeing on sites.

Colin Williams, Health, Safety and Wellbeing

Manager, also proposed an initiative focused on

expanding access to wellbeing resources and

training. His idea centred around integrating

wellbeing sessions into our Zero Harm strategy

tobetter engage and support our people.

These ideas went on to form the basis

ofourrefreshed wellbeing approach ‘Create,

Manage, Support’.

“ Our My Contribution

employee ideas programme

gives us agreat vehicle for

collecting thoughts and

suggestions onhow we

can improve wellbeing.”

Lee Hewitt

Group Director,

Health, Safety and Wellbeing

WELLBEING

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

HEALTH, SAFETY AND WELLBEING CONTINUED

WELLBEING CONTINUED

In 2025, the Health Management Procedure

evolved to become the Health and Wellbeing

Procedure which includes our new wellbeing

approach ‘Create, Manage, Support’. This

approach aims to create a psychologically safe

environment by managing wellbeing risks

effectively and supporting individual mental

health and wellbeing through the establishment

of wellbeing committees and the tracking of

wellbeing activity across each business unit,

withprogress reported centrally.

The guidance documentation, including a

wellbeing action plan template and scorecard,

isdesigned to support each wellbeing committee

identify their wellbeing priorities, monitor their

progress and drive continual improvement. In2025,

our Rail, Highways and Regional Buildings

businesses implemented wellbeing committees

at business unit level, while numerous committees

were also set up across the rest of the business

at project level.

Recognising that supervisors and managers are

vital to embedding the ‘Create, Manage, Support’

approach, a new module, ‘Managing Psychological

Health’, was added to the Managing Health Risks

in Construction e-learner course in May 2025,

and has since been completed by 2,833 supervisors.

It is also available to the supply chain through the

Supervisor Development Programme. In October

2025, we also released the Connecting through

Conversation (CTC) training, designed to show

people the power of the everyday conversations

and the role they can play in creating a positive,

psychologically safe environment where everyone

feels protected, respected, supported and safe

atwork.

Above: Our Balfour Beatty US Buildings and Civils colleagues observing

Mental Health Awareness Month at Sacramento International Airport.

This focus on psychological safety is at the heart

of our Zero Harm culture, and this has also been

addressed in the US through a focus on honest

conversations to support our observation process.

The team have set up a Mental Health Support

website that includes helplines for suicide and

crisis, domestic violence and the Substance

Abuse and Mental Health Services Administration

(SAMHSA). One example of thisin our US business

was the team at our Sacramento International

Airport project who paused work to discuss the

importance of mental health in the industry. This

event, led by the Associated General Contractors

of California, brought together industry leaders

and advocated that creating positive change

begins with open dialogue and collective action.

Kyle Frandsen, Balfour Beatty’s Vice President at

Sacramento, led the conversation, sharing the

stage with guest speakers who discussed their

lived experience with mental health challenges.

Events like these, in conjunction with customers

and industry partners, help us, as industry leaders,

tobreak down stigmas, and foster a culture that

prioritises mental health.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Wellbeing

atArgyll

Q&A with Mick Fitzgibbon,

Health, Safety, Wellbeing

andCulture Manager and

the Argyll Team

Q. What wellbeing initiatives were

introduced on the Argyll project, and

how did they support employees’

mental and physical health?

The installation of a state-of-the-art gym in our

social hub is helping colleagues unwind before

and after work. The facility has a breakout area,

including a TV, pool tables anddartboards.

‘Argyll Thrive’ WhatsApp groups have been

created, bringing together a range of activity

groups – walking, fitness, cooking, charity etc.

This enables colleagues working in Argyll to

suggest activities and invite others to take part.

Five-a-side football is booked weekly and open

toanyone, and fishing permits for local lochs are

available on request.

The team are always open to ideas and welcome

any suggestions that could enhance what’s

already available, even if it’s a small improvement.

Q. What were the key wellbeing

challenges faced byteams working

onthe Argyll project?

The remote location and limited local facilities

can make loneliness and boredom significant

challenges. Harsh weather conditions and very

short winter days also restrict outdoor activities,

which can make it easy for people to return to

their accommodation and spend long periods

alone between shifts.

Q. How did the wellbeing programme

contribute to improving team morale

and engagement throughout the

project lifecycle?

Providing the facilities and services detailed

above has given everyone in Argyll the opportunity

to feel part of the wider team. As they are used

by everyone, the facilities naturally encourage

conversations between people who may not

usually interact during the working day, and the

gym offers a constructive way to unwind after

demanding shifts.

Q. What feedback have employees

provided about the wellbeing measures

implemented at Argyll, and what

lessons werelearned?

Feedback has been overwhelmingly positive.

Wehave set the bar high in Argyll and our

colleagues, customers and subcontractor will

expect this to be the minimum standard going

forward. We found that establishing and running

these facilities is a substantial piece of work, and

that planning and implementation are more effective

when the responsibility is shared across the

team during the mobilisation stage of a project.

Below: MickFitzgibbon, Health, Safety, Wellbeing and Culture

Manager – Balfour Beatty’s Power Transmission and

Distribution business.

Left and above: David Braidwood, Project

Manager (top right) andcolleagues taking part

in wellbeing activities; and gym facilitieson

site. The Argyll contract involves the design

and construction of three new 275kV electricity

substations inArgyll, Scotland, on behalf

ofSSENTransmission.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

ETHICS AND COMPLIANCE

Doing the

right thing

At Balfour Beatty, we recognise

the importance not just of what

we do, but how we do it. Acting

ethically, treating each other with

respect and behaving as a

responsible corporate citizen are

fundamental to how we do

business. We do the right thing,

not the easy thing. Our customers,

our business partners and the

communities we operate in

expect nothing less. We build

trust through transparency and

acting with integrity.

Ethics programme

Under the oversight of the Board, the ethics and

compliance programme consists of a framework

of enterprise-wide and strategic business

unit-specific policies, procedures, guidelines and

responsibilities designed to:

@ promote and foster an organisational culture of

integrity, ethical decision making and compliance

with Balfour Beatty’s values and behaviours as

reflected in the Cultural Framework;

@ assure that employees conduct business with

the highest standards of ethics and integrity

and in compliance with all applicable laws and

regulations; and

@ promote appropriate risk assessment and due

diligence to prevent and detect unlawful and

unethical conduct.

In 2025, we focused on embedding our enhanced

ethics and compliance systems, specifically the

Speak Up helpline and new disclosure registers

which were co-located in a new portal.

Further resources have been added to our US and

UK ethics and compliance teams during the year as

we continue to invest in our programmes, most

notably in the areas of investigations and Speak Up.

We will explore further areas for Group-wide

alignment in 2026, including through the

development of Group-wide metrics to be used

to provide insights into the health of our ethics

and compliance programme.

A continued area of focus in the UK in 2025 has

been on the implementation of enhancements

toour anti-fraud programme, in response to the

new ‘failure to prevent fraud offence’. This work

will continue in 2026 as part of our continuous

improvement activities with a refresh of our fraud

risk assessment already underway.

Speak Up

Speaking up is the foundation of our ethics and

compliance programme, enabling our employees

and individuals outside of Balfour Beatty to tell us

when we don’t meet the high standards of

behaviour we set ourselves.

In our 2025 employee engagement survey, 75%

of employees indicated that they felt empowered

to Speak Up without fear of negative consequences,

with 79% expressing confidence that unethical

behaviour will be addressed. This is consistent

with the high scores we saw on these topics in 2024.

In 2025, we received 726 Speak Up cases across

the Group, an increase of 47% from 2024. The

increase is, in part, a reflection of our continued

efforts to encourage people to tell us when they

see standards that do not align to our values and

behaviours. Our Speak Up reporting rate remains

within the benchmark range.

41% of Speak Up investigations closed in 2025

found evidence to support the concerns raised,

an increase of 3% compared to 2024. We see

this as indicative of better quality reporting and

areturn on the investment we have made in our

investigatory capability. As in 2024, concerns

about employee conduct continued to make up

the majority of cases received, accounting for

55% of all cases, followed by fraud, deception

and dishonesty (14%), and Code of Ethics

violations (8%).

Confirmed breaches of Balfour Beatty’s Code of

Ethics may result in disciplinary action, including

termination of employment for serious breaches,

with 46 individuals leaving the business in 2025

following a substantiated Speak Up case (47 in

2024). We have also terminated and suspended

supplier relationships in 2025 as a result of

breaches by a business partner of our Code of

Ethics. We conduct root cause analysis where

possible to enable us to take steps to prevent

similar issues arising again in the future.

Improving industry standards

We continue to play an active role in working

with other organisations to help improve ethical

business standards across the industry, regularly

interacting and supporting industry bodies for

ethics such as the Institute for Business Ethics

and the Business Ethics Leadership Alliance.

Amongst other things, in 2025, this included

participating in a research project on ethics in AI.

Scan or click to learn about our approach

to modern slavery and read the Group’s

Modern Slavery Statement.

NUMBER OF SPEAK UP HELPLINE CASES

NUMBER OF CASES PER 1,000 EMPLOYEES

279

444

495

726

196

26.7

38.0

15.8

24.9

11.0

Scan or click to find out more

about our Code of Ethics

programme.

Balfour Beatty plc | Annual Report and Accounts 2025

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TAX STRATEGY

Being a responsible taxpayer

Balfour Beatty recognises that paying taxes

arising from its activities is an important part of

how it supports the communities in which it

operates. The Group makes a major contribution

to the tax revenues of governments in the numerous

territories in which it operates. For example, the

Group’s tax contribution extends considerably

beyond corporation tax and the collection of

substantial amounts of income tax and includes

the payment of significant employer social

security contributions.

The Group’s tax strategy, approved by the Board,

is to sustainably minimise tax cost whilst complying

with the law. In doing so, Balfour Beatty ensures

it acts in accordance with its Cultural Framework,

which provides a simple and clear view of the

purpose, values and behaviours of the Group’s

Build to Last strategy. The Group aims to meet all

legal requirements, filing all appropriate tax

returns and making tax payments accurately and

on time. The Group’s tax strategy applies to all

territories in which it does business.

Tax governance

Balfour Beatty has clear tax policies, procedures

and controls in place which are overseen by the

Chief Financial Officer.

A dedicated internal Tax team, led by the Group

Head of Tax, is responsible for the implementation

of the Group’s tax strategy and supporting tax

policies. Members of the Tax team are highly

experienced with appropriate professional

qualifications and experience which reflect the

responsibilities required for their roles.

Tax risk appetite

The Group manages its tax affairs in a proactive

manner that seeks to maximise shareholder value,

and as such, utilises tax incentives or opportunities

for obtaining tax efficiencies where appropriate

and where they support genuine commercial

activity. The Group does not enter into artificial

arrangements that lack commercial purpose in

order to secure a tax advantage. The aim is to

ensure full compliance with all statutory

obligations and as a consequence attempt to

minimise risk wherever possible.

In keeping with the Corporate Criminal Offence

of Failure to Prevent the Facilitation of Tax Evasion

legislation, Balfour Beatty does not tolerate tax

evasion or the facilitation of tax evasion. Balfour

Beatty applies appropriate procedures and

controls which seek to prevent any person acting

on its behalf from facilitating tax evasion.

Managing tax risk

There are a number of factors that affect the

Group’s tax risk and these arise both internally

and externally. Balfour Beatty’s ability to control

these factors varies, and its internal Tax team

works to minimise these risks to an acceptable

level. For example:

@ new and developing tax legislation is

monitored and where it is relevant Balfour

Beatty participates in consultations issued

bythe tax authorities. When new or changed

legislation is announced, the impact on the

Group is assessed and active measures are

taken to ensure there are adequate processes

in place to comply with any change;

@ tax risks in relation to compliance and reporting

are managed by meeting regularly with

professional advisers, industry groups and the

tax authorities to both keep abreast of changes

in these areas and to seek information on new

systems and software; and

@ risk in relation to tax in general is managed by

the internal Tax team, and if a position is

uncertain the Group may obtain third-party

advice in order to gain clarity or support for

aparticular stance or approach.

Any tax risks are included in the Group risk

approach to risk management.

Interaction with tax authorities

Balfour Beatty’s approach to its tax affairs is

supported by an open, honest and positive

working relationship with the tax authorities,

withregular dialogue. Should any dispute arise

with regard to the interpretation and application

of tax law, the Group is committed to addressing

the matter promptly and resolving it in an open

and constructive manner.

Being a

responsible

taxpayer

This tax strategy has been

prepared and published in

accordance with paragraph

16(2),Schedule 19,

FinanceAct2016, on behalf

ofBalfour Beatty plc and all

UKtax resident entities in

theBalfour Beatty Group.

Balfour Beatty plc | Annual Report and Accounts 2025

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In 2025, we continued to embed our refreshed

Building New Futures sustainability strategy,

launched in 2024 in response to significant shifts

across the environmental, social and governance

landscape. As the pace of change accelerates, our

six sustainability focus areas – climate change,

resource efficiency, community engagement,

supply chain integrity, nature positive and employee

diversity, equity and inclusion – remain central to

how we deliver long-term resilience and positive

impact across the communities we serve.

During 2025 we strengthened the foundations

laid in2024, ensuring our approach remains

evidence-based, stakeholder-aligned and prepared

for rising expectations across our sector. Our first

double materiality assessment, completed in

2025 and aligned to European Financial Reporting

Advisory Group (EFRAG) guidance, reaffirmed

the relevance and completeness of our six

priorities while sharpening the link between our

strategy, risk management and external

requirements. The findings confirmed that our

focus areas remain the right ones for our business

and highlighted the corporate behaviours –

governance, ethics and transparency – that

underpin effective sustainability performance.

We also continued to build external credibility

through independent assessments. In 2025,

weachieved a FTSE4Good ESG score of 3.6,

compared with 3.2 in 2024, and maintained our

CDP rating of C. These benchmarks reinforce the

progress we are making and the areas where we

must continue to accelerate.

Across the organisation, collaboration and capability

building have remained central themes. The

Sprouting Sustainability Network, launched in

2025 by early careers professionals, represents

anew and exciting step in developing the next

generation of sustainability leaders. Structured

around our six focus areas and delivered through

cross-functional partnership, the network is

already helping colleagues strengthen their skills,

confidence and ability to drive meaningful change.

meet rising expectations and deepened collaboration

on decarbonisation, materials resilience and

ethical labour practices. Our work this year –

including the development of a shared roadmap

for lower-carbon materials, the launch of the

Empowering Development for Growth & Excellence

(EDGE) capability-building programme for Small

and Medium-sized Enterprises (SMEs) and

enhanced diligence on labour agency practices –

reflects our commitment to building a resilient and

responsible supply chain equipped for the future.

Our focus on community value also intensified as

we set new 2030 UK targets: £6 billion of social

value created and 60,000 hours of education

engagement, ensuring our contribution extends

far beyond project delivery. In 2025 we strengthened

our approach to local procurement, education

partnerships, employment pathways and

targeted support for people facing barriers to

work – demonstrating how we convert societal

challenges into shared opportunities.

Finally, we continued to progress our diversity,

equity and inclusion commitments. From improved

gender diversity in early careers pathways to

progress against our senior leadership ethnic

diversity target under the Parker Review, we

SUSTAINABILITY

Building

NewFutures

Balfour Beatty has continued to

strengthen business resilience

through disciplined sustainability

delivery in 2025.

Scan or click to read more about

our approach to sustainability and

explore our case studies.

Our focus areas:

Our commitment to climate action remains

unwavering. In 2025 we continued to mature

ourcarbon reporting and management approach,

maintaining alignment with UK Streamlined

Energy and Carbon Reporting (SECR) requirements

and strengthening the robustness of our data

through independent assurance. We advanced

our understanding of Scope 3 emissions, refined

our methodologies and prepared for the introduction

of new regulatory mechanisms such as the UK

Carbon Border Adjustment Mechanism (CBAM).

These steps will ensure we remain on the right

path towards meeting our near and long-term

science-based targets.

However, despite the improvements and carbon

reductions achieved since the Group doubled

down on climate action in 2023, we recognise

that we still have significant ground to cover if we

are to achieve our 2030 carbon reduction targets

of 42% for Scopes 1 and 2, and a 25% reduction

for Scope 3 carbon emissions from purchased

goods and services. Over the last three years we

have been trialling alternative renewable fuels to

understand how we can make a step change in

our reliance on diesel, and how we can leverage

our scale and buying power to unlock the market

for these critically needed innovations.

Nature positive also advanced significantly this

year. Following our signing of the Nature Positive

Business Pledge in 2024, we launched our nature

positive principles and completed the first full

year of UK implementation. Our 2025 Specific,

Measurable, Achievable, Relevant, and Time-bound

(SMART) objectives focused on embedding the

mitigation hierarchy, developing measurement

tools, elevating nature-related risk management

and fostering a nature positive mindset across

our operations. These foundational actions lay

the groundwork for delivering measurable nature

recovery outcomes in the years ahead.

Within our supply chain, 2025 marked a shift from

compliance towards partnership. We strengthened

our assurance processes, supported suppliers to

CLIMATE CHANGE

p44

NATURE POSITIVE

p48

RESOURCE

EFFICIENCY

p50

SUPPLY CHAIN

INTEGRITY

p51

COMMUNITY

ENGAGEMENT

p53

EMPLOYEE DIVERSITY,

EQUITY ANDINCLUSION

p55

Balfour Beatty plc | Annual Report and Accounts 2025

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remain focused on building a workforce that reflects

the communities in which we operate and benefits

from a diversity of perspectives.

Looking ahead, our mission remains clear: to deliver

sustainable, resilient and inclusive outcomes for

our customers, partners and communities. By

embedding our core values – Lean, Expert,

Trusted, Safe and Sustainable – into everything

we do, and by continually enhancing our capabilities

and partnerships, we are ensuring Balfour Beatty

remains the partner of choice in building a net

zero, nature positive and socially equitable future.

DOUBLE MATERIALITY

In 2024 we evolved our sustainability strategy

into a clear framework of six key topics. To

validate this direction, we undertook a double

materiality assessment aligned with EFRAG

guidance. Unlike traditional approaches that

focus solely on financial relevance, double

materiality assesses both how sustainability

topics affect our business and how our business

affects people, society and the environment.

The assessment combined interviews and

workshops with internal subject matter

expertsand selected external stakeholders,

including key clients and suppliers. This was

supported by desk-based research, which

captured the perspectives of investors and wider

industry trends, alongside peer benchmarking

and a regulatory horizon scan. Together, these

inputs helped us test the completeness of our

key topics and the relevance of their

associatedsub-topics.

Scan or click to find out

more about our double

materiality assessment.

Compared with our 2019 assessment, this process

was more rigorous and more targeted. In 2025

we introduced a clear materiality threshold and

reported only the topics that exceeded it. This

removes ranking or weighting between issues

and provides a simple, accessible view of

whatisgenuinely material to Balfour Beatty.

Theresulting output is therefore more focused

and easier to interpret.

The findings confirmed that our six sustainability

pillars remain the right strategic priorities and

highlighted the corporate behaviours that underpin

effective delivery, including governance, ethics

and transparency. A small number of topics

emerged as important in a wider Environmental,

Social and Governance (ESG) context but sit

outside our sustainability framework. Health,

safety and wellbeing continue to be managed

through a dedicated programme, while cyber

resilience is managed separately due to its

specialist nature.

The assessment strengthens the link between

our strategy, our risk management framework

and the expectations of clients, investors, regulators

and the communities we serve. It will inform

future development of Building New Futures and

guide how we prioritise effort and investment

across the six key topics. It also highlights

emerging areas, such as responsible water

management across our operations and supply

chain, where we anticipate greater focus in the

years ahead.

Overall, the double materiality assessment

reaffirms the strength and completeness of our

strategy. It ensures our sustainability framework

is grounded in evidence, aligned with stakeholder

expectations and focused on the areas where

Balfour Beatty can make the greatest contribution.

THE SPROUTING SUSTAINABILITY NETWORK

The Sprouting Sustainability Network was

launched in 2025 to empower early careers

professionals with the skills, confidence, and

connections needed to become future

sustainability leaders.

Created by two early careers professionals

and pitched to senior leadership, the

programme was brought to life as a two-year

journey with tailored resources, interactive

events, and a peer community.

The network officially kicked off in September

2025 with an induction and the first module

on Community Engagement. Structured

around six sustainability focus areas, participant

have already begun building networks, sharing

insights and engaging with the

sustainabilityagenda.

Collaboration has been central to the network’s

success. Focus area leads co-designed each

module, and external partners have enriched

delivery. For example, charities in Blackpool

contributed to the Community Engagement

module, strengthening local connections.

The first cohort will run over two years, with

homework tasks designed to deepen

knowledge and deliver sustainable outcomes

for the business. As results are embedded

into practice, future cohorts will join, ensuring

the Sprouting Sustainability Network becomes

a lasting platform for development, innovation,

and sustainability leadership.

Below: The first cohort of the Sprouting Sustainability Network.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Summary of the Group’s 2025

carbonperformance

In 2025, we saw a decrease in the Group’s

absolute carbon emissions and a 7.8% reduction

in carbon emissions intensity, using the

market-based methodology.

@ Market-based: Balfour Beatty’s total Scope 1

and 2 GHG emissions in 2025 were 140,382

tCO

e. This is a decrease from 2024 of 3,323

tCO

e, representing a reduction change of 2.3%.

Market-based GHG emissions intensity also

showed a reduction from 12.8 to 11.8 tCO₂e/£m

revenue, a 7.8% reduction. Market-based

emissions reflect the purchasing decisions

made by us in procuring energy in each of

ourmarkets and represent actual emissions

ofour electricity usage.

@ Location-based: Balfour Beatty’s total Scope

1 and 2 GHG emissions in 2025 were 145,278

tCO

e. This is a decrease from 2024 of 2,018

tCO

e, representing a decrease of 1.4%.

TheGroup’s location-based GHG emissions

intensity decreased from 13.1 tCO

e/£m

revenue in 2024 to 12.2 tCO

e/£m revenue

in2025, a reduction of 6.9%. Location-based

methodology reflects the average carbon

emissions of energy supply overall in the

jurisdictions in which we use electricity.

The reduction in Scope 1 and 2 market-based

emissions intensity in 2025 was driven primarily

by continued changes in our fuel and electricity

mix. Total energy consumption in 2025 remained

broadly flat compared with 2024, reflecting the

scale and nature of project activity across the

Group. Against this backdrop, emissions performance

improved through a further reduction in higher

carbon fuels such as red diesel and gas oil,

alongside increased procurement of renewable

electricity across the UK. These structural

changes, supported by ongoing efficiency measures

across sites and assets, resulted in a 7.8%

reduction in market-based emissions intensity

year on year.

See our Carbon Reduction Plan for more detail

about how we are addressing Greenhouse Gas

emissions through efficiency, electrification and

alternative fuels: www.balfourbeatty.com/

carbonreductionplan

Approach for Group carbon reporting

Balfour Beatty’s approach for Group carbon reporting

is set out in our sustainability reporting criteria:

www.balfourbeatty.com/sustainabilityreporting

Greenhouse Gas (GHG) reporting

methodology andassurance

Balfour Beatty reports its energy and carbon data

in line with the UK Government’s SECR requirements,

covering all seven Kyoto greenhouse gases. The

disclosure includes certain joint ventures and

joint operations, following the standards set out

in the Group’s sustainability reporting criteria,

available at: www.balfourbeatty.com/

sustainabilityreporting

Scope 1 and 2 emissions are calculated using

thelatest emissions factors from the UK Government,

the US Environmental Protection Agency (EPA),

and the International Energy Agency (IEA),

incorporating the global warming potentials

published by the Intergovernmental Panel on

Climate Change (IPCC). Based on the Group’s

assessment of direct emissions within our

organisational boundary, no material sources are

expected to have been excluded.

Emissions also include sources not referenced

elsewhere in the Annual Report, such as landlord

or customer-supplied energy that Balfour Beatty

does not directly procure.

For 2025, KPMG LLP carried out an independent

limited assurance engagement over the Group’s

Scope 1 and 2 GHG emissions and associated

intensity ratios, using the assurance standards

ISAE 3000 (Revised) and ISAE 3410. These assured

data points are marked with the symbol

Ⓐ

. KPMG’s

full assurance statement is available at:

www.balfourbeatty.com/ILA_2025

OUR GROUP CARBON

PERFORMANCE

MARKET-BASED

140,382

total Scope 1 and 2 GHG emissions (tCO

3,323

tCO

e reduction since 2024

11.8

tCO

e/£m revenue

LOCATION-BASED

145,278

Total Scope 1 and 2 GHG emissions (tCO

2,018

tCO

e reduction since 2024

12.2

tCO

e/£m revenue

Market-based methodology

Since 2020, Balfour Beatty has reported its

Scope 2 emissions using both the location-based

and market-based approaches in line with our

sustainability reporting criteria. The market-based

method enables the application of zero-carbon

emission factors for electricity supplied under

certified renewable energy contracts, where

guarantees of origin can be evidenced. In 2025,

this included approximately 38,621 MWh of

renewable-tariff electricity purchased through

the Group’s utility contract in the UK. Where

renewable certificates are unavailable, a residual

mix factor is applied. For electricity without a

renewable source or where country-specific

residual mix data cannot be sourced, the Group

uses either a supplier-specific emissions factor

– where verified fuel mix information is provided

– or the appropriate national average emissions

factor from the UK Government, EPA, or IEA.

Scope 3 and Outside-of-

Scopesemissions

Balfour Beatty prepares its Scope 3 and biogenic

emissions in accordance with the GHG Protocol’s

Corporate Value Chain (Scope 3) Standard. As

part of the Group’s work to complete a full GHG

inventory for submission to the Science Based

Targets initiative, a detailed review of biogenic

emissions and forest, land and agriculture

(FLAG)-related emissions was carried out.

Theseassessments have been completed in

linewith the GHG Protocol Land Sector and

Removals Guidance, including the Draft for

PilotTesting and Review. Outside-of-scope

emissions are reported separately, as set out in

the table on page 46, and reflect activities not

included within Scopes 1, 2 or 3 under the

GHGProtocol.

Offsetting

At present, Balfour Beatty does not offset any

greenhouse gas emissions from its operations.

The Group continues to prioritise measures that

directly reduce emissions across Scopes 1, 2

SUSTAINABILITY CONTINUED

CLIMATE CHANGE

Balfour Beatty plc | Annual Report and Accounts 2025

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and 3 including efficiency improvements, modern

methods of construction, and the adoption of

low-carbon technologies and materials. As the

Group has committed to near-term and long-term

science-based targets aligned with the Science

Based Targets initiative’s (SBTi) 1.5°C ambition,

any future decision to use offsets would follow

the Oxford Principles*.

* www.smithschool.ox.ac.uk/research/oxford-offsetting-principles

The Group also recognises the important role of

insetting: reducing emissions within its own

value chain by investing in low-carbon or carbon

removal solutions that sit directly within

operational boundaries. This approach enables

Balfour Beatty to focus on internal actions that

deliver tangible emissions reductions or

removals, while contributing to the wider

decarbonisation of the construction sector.

Scope 1 and 2 GHG emissions, baseline year (2020) to 2025

Carbon emissions

Baseline year

2020 2021 2022 2023 2024 2025

Absolute (tCO

Scope 1 – operational control boundary (full authority) 90,850 90,18 0 83,456 77,85 4 71,246 73,265

Scope 1 – applying enhanced reporting criteria

20,117 30,772 48,223 54,736 59,632 58,759

Total Scope 1 110,967 120,952 131,679 132,590 130,878 132,024

Ⓐ

Scope 2 – operational control boundary (full authority) 12,668 17, 24 5 12,296 10,628 15,782 8,607

Scope 2 – applying enhanced reporting criteria

534 775 2,634 3,243 635 4,647

Total Scope 2 (location-based) 13,202 18,020 14,930 13,871 16,417 13,254

Ⓐ

Scope 2 – operational control boundary (full authority) 11,859 16,399 11,650 6,584 7, 239 7,567

Scope 2 – applying enhanced reporting criteria

788 791 3,903 5,550 5,587 791

Total Scope 2 (market-based) 12,647 17,19 0 15,553 12,13 4 12,826 8,358

Ⓐ

Scope 1 and 2 – operational control boundary (full authority) 103,518 107,425 95,752 88,482 87,028 81,872

Scope 1 and 2 – applying enhanced reporting criteria

20,651 31,547 50,857 57,979 60,268 63,406

Total Scope 1 and 2 (location-based) 124,169 138,972 146,609 146,461 147,29 6 145,278

Scope 1 and 2 – operational control boundary (full authority) 102,709 106,579 9 5,10 6 84,439 78,485 80,832

Scope 1 and 2 – applying enhanced reporting criteria

20,905 31,563 52,126 60,286 65,220 59,550

Total Scope 1 and 2 (market-based) 123,614 13 8,142 147,232 144,725 143,705 140,382

UK Emissions as % of global total³ 70% 69% 76% 79% 81% 79%

Intensity (tCO

e/£m revenue

)

Scope 1 and 2 – operational control boundary (full authority) 11.9 14.2 11.7 12.3 10.2 8.5

Scope 1 and 2 – applying enhanced reporting criteria

64.8 99.8 50.4 20.7 22.8 28.1

Total Scope 1 and 2 intensity (location-based) 13.8 17.6 16.0 15.2 13.1 12.2

Ⓐ

Scope 1 and 2 – operational control boundary (full authority) 11.8 14.1 11.7 11. 8 9.2 8.49

Scope 1 and 2 – applying enhanced reporting criteria

65.6 99.8 51.7 21.5 24. 7 26.4

Total Scope 1 and 2 intensity (market-based) 13.8 17.5 16.1 15.0 12.8 11.8

Ⓐ

1 The Group’s Greenhouse Gas operational control boundary, metrics and descriptions can be found in the Balfour Beatty Sustainability Reporting Guidance: www.balfourbeatty.com/sustainabilityreporting

2 All emissions of certain joint operations and unincorporated joint ventures where neither party has operational control over the joint operation, but Balfour Beatty has a considerable influence over its

operating policies and purchasing decisions, have been included in the Group’s consolidated Scope 1 and 2 emissions (including intensity calculations) in line with enhanced reporting criteria. This is in

addition to the emissions for Group entities for which Balfour Beatty has full authority in line with the GHG Protocol operational control approach. For more detail, please refer to the decision-making

process diagram in our sustainability reporting criteria: www.balfourbeatty.com/sustainabilityreporting.

3 UK Emissions as percentage of global total are calculated using the Scope 2 market-based accounting methodology.

4 To calculate the carbon intensity of the Group’s Scope 1 and 2 total emissions, an adjustment to the final revenue has been made from £10,766,956,841 to £11,934,999,662. This includes intercompany

revenue and the revenue of certain joint operations and unincorporated joint ventures over which the Group has a considerable influence over their operating policies and purchasing decisions in line with

enhanced reporting criteria and in addition to the revenue of entities which align fully to the GHG Protocol operational control approach. To calculate the carbon intensity of the Group’s Scope 1 and 2

emissions from entities which align fully to the GHG Protocol operational control approach an adjustment to the final revenue has been made from £10,766,956,841 to £9,679,792,135.

ENGINE CARBON CLEAN TRIAL

Working with Advanced Hydrogen

Technologies, the team trialled Engine

Carbon Clean (ECC) on a compact tamping

machine; the first infrastructure company to

apply this technology to rail-mounted plant.

Scan or click to find out

more about the ECC trial.

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CLIMATE CHANGE CONTINUED

Scope 3 emissions

Scope 3 emissions arise across Balfour Beatty’s

broader value chain and from its investments,

including Gammon, and therefore fall outside the

Group’s direct operational control or enhanced

reporting criteria boundary. As outlined in the

‘Approach for Group carbon reporting’ on

page 44, the Group has assessed all categories

against the GHG Protocol and determined that 13

of the 15 Scope 3 categories are relevant. Only

Category 10 (Processing of sold products) and

Category 14 (Franchises) are not applicable, as

the Group does not manufacture intermediate

products for downstream processing or operate

franchise models. All relevant categories are

included in the Group’s Scope 3 inventory.

Scope 3 emissions are calculated using the

Corporate Value Chain (Scope 3) Standard of

theGHG Protocol. The table presented on the

right shows emissions from the 2020 baseline

year through to 2025. In preparing emissions

data aligned tothe Group’s SBTi validated

targets, Balfour Beatty has applied the most

appropriate methodologies available for each

category, incorporating updated factors and

information asdatasets mature.

Scope 3 methodology

In 2023, Balfour Beatty reported its full Scope 3

emissions inventory for the first time. For 2025

reporting, we continued to refine our methodology,

improving data quality and strengthening the

accuracy of our value chain assessments.

Muchof our Scope 3 reporting still relies on

spend-based estimation, as industry-wide

availability of primary data remains limited. While

this approach provides full coverage, it does not

yet reflect the embodied carbon of specific materials

and services, which limits the ability to track

performance year-on-year.

Throughout 2024 and into 2025, we have focused on maturing our data sources, moving towards higher-quality and more granular information as it becomes

available. This includes enhanced internal reviews of purchased goods and services (Category 1) and investments (Category 15), which remain our most

material categories. Improvements in primary data will allow the Group to prioritise the areas where we can have the greatest impact and support more

effective emissions-reduction interventions.

To support this transition, Balfour Beatty has been working with CausewayOne Carbon to support development of a digital platform that enables suppliers

to report embodied carbon data in a consistent and verifiable way. This collaboration is helping to strengthen our value chain data flows and will enable us

toincorporate more supplier-specific information into our 2026 Scope 3 dataset.

Scope 3 GHG emissions, baseline year (2020) to 2025

Scope 3 emissions (tCO

e) Assessment status

Baseline year

2020 2021 2022 2023 2024 2025

Cat 1: Purchased goods and services Relevant, Calculated 2,836,477 3,076,315 3,023,913 3,432,952 5,326,854 3,683,745

Cat 2: Capital goods Relevant, Calculated 13,18 4 19,954 17, 3 30 35,866 14,794 21,743

Cat 3: Fuel- and energy-related activities

(notincluded in Scope 1 and 2) Relevant, Calculated 28,082 35,846 36,796 36,912 37,4 61 36,494

Cat 4: Upstream transportation and distribution Relevant, Calculated 164,572 154,240 62,013 110,016 121,096 98,443

Cat 5: Waste generated in operations Relevant, Calculated 2,538 5,228 1,551 2,460 1,829 1,020

Cat 6: Business travel Relevant, Calculated 2,023 2,589 2,628 7,072 5,653 5,204

Cat 7: Employee commuting Relevant, Calculated 1,055 2,110 2,137 2,091 2,225 2,237

Cat 8: Upstream leased assets Relevant, Calculated Included in Scope 1 and 2

Cat 9: Downstream transportation and distribution Relevant, Calculated Included in Cat: 4

Cat 11: Use of sold products Relevant, Calculated 118 137 235 244 156 239

Cat 12: End-of-life treatment of sold products Relevant, Calculated 16 18 16 17 10 16

Cat 15: Investments Relevant, Calculated 236,527 251,715 263,492 217,5 35 190,457 138,159

Total Scope 3 3,284,592 3,5 48,152 3,410,111 3,845,165 5,700,535 3,987, 300

Total Scope 3 intensity tCO

e/£m revenue Relevant, Calculated 329 408 333 317 465 325

Biogenic emissions Relevant, Calculated 12,527 3,828 5,838 8,263 8,554 7,4 39

FLAG emissions Relevant, Calculated 6 46,19 8 859,158 3 9 0,158 1,079,492 274,904 319,765

1 Based on the application of the operational control consolidation approach augmented by enhanced reporting criteria, the Group accounts for emissions arising from building assets leased in Scopes 1

and 2 and not Category 8: Upstream Leased Assets on the basis of this consolidation criterion aligned to parameters contained within the GHG Protocol.

2 In alignment with GHG Protocol technical guidance, adjustments to Scope 3 totals have been made in the reporting year and for prior years back to baseline year across Categories 13 and 15 to reflect

Group disposals and Category 2 for prior year based off more granular data that became available during the reporting year. Based off Group disposals in the reporting year, Category 13 is no longer

relevant to the Group’s operations.

3 To calculate the carbon intensity of the Group’s Scope 3 total emissions, an adjustment to the final revenue has been made from £10,766,956,841 to £12,187,887,723. In addition to the revenue figure of

£11,934,999,662 used for the Group’s Scope 1 and 2 total emissions (see Note 4 to the table on page 45) and in line with enhanced reporting criteria, this includes the Group’s proportional share of the

revenue of: (i) incorporated joint ventures and (ii) certain joint operations and unincorporated joint ventures where the Group does not have considerable influence over their operating policies or

purchasing decisions.

SUSTAINABILITY CONTINUED

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Energy

In 2025, Balfour Beatty maintained its focus on

improving energy efficiency across its operations,

implementing targeted measures to manage

consumption and reduce associated emissions.

Against a backdrop of business growth, total

energy use remained stable at 623,756 MWh,

demonstrating increasing decoupling of energy

demand from operational activity.

During the year, the Group maintained its

programme of efficiency interventions, including

expanded deployment of EcoNet systems to

reduce out-of-hours energy demand, increased

use of EcoSense energy-efficient cabins, and

additional battery-hybrid generator configurations

to minimise fuel use and enable quieter operation

on sites. Renewable energy generation on projects

also continued to grow, with on-site solutions

including solar and green hydrogen contributing

698 MWh during 2025, an increase of 89%

compared to 2024.

In 2025, Balfour Beatty’s UK business procured

zero-carbon electricity through Renewable

Energy Guarantees of Origin (REGO)-backed

tariffs. We increased the proportion of renewable

electricity used across our UK operations, procuring

38,621 MWh of REGO-certified electricity.

As part of the ongoing commitment to energy

reduction, our Energy Management Unit (EMU)

continued to deliver audits across UK assets,

identifying opportunities for further improvement.

These findings support the Group’s energy action

plans and have informed ongoing development of

digital tools, including the Site Energy Efficiency

Dashboard, automated demand-management

systems for modular accommodation, and

additional minimum standards and digital

performance evaluation models for site power

and lighting technologies.

Fuel MWh (global)

Baseline year

2020 2021 2022 2023 2024 2025

Electricity purchased – green tariff 12,536 15,812 16,096 26,627 34,474 38,621

Electricity purchased – other 35,258 48,846 46,423 34,877 35,247 23,463

Electricity (generated from solar renewables) 27 49 161 7 231 289

Electricity (generated from green hydrogen) – – 413 109 138 409

Total electricity 47,821 64,707 63,093 61,620 70,090 62,782

Diesel B7 143,687 131,719 348,137 419,783 422,947 384,129

Unleaded petrol 57,642 72,369 77,29 8 74,161 75,14 9 105,773

Gas oil (Red diesel) 236,750 268,115 100,515 48,181 30,878 26,691

Natural gas 8,147 14,861 13,106 12,341 12,329 21,621

Industrial gases 2,990 2,592 3,021 3,500 2,764 15,043

GTL – 3,320 3,612 3,794 5,085 4,448

E85 petrol 166 125 268 173 0 1,644

Biodiesel (1st generation) – 27 – – 17 1,413

100% mineral diesel 534 340 438 129 143 92

Boiler fuel 410 426 380 497 737 57

Diesel B20 55 – – 7 0 37

HVO – 32 82 15 178 24

LPG 64 64 65 166 8,057 2

100% mineral petrol 2 6 – – 0 0

Total fuels 450,447 493,996 546,922 562,747 558,284 560,974

Global total 498,268 558,703 610,015 624,367 628,374 623,756

UK energy use % of global total 73% 72% 77% 80% 82% 80%

Energy intensity (MWh/£m revenue) 55.4 70.8 66.6 64.8 56.1 52.3

1 The figures in this table include energy from the Group’s consolidated boundary aligned to the methodology referred to in Note 1 to the Scope 1 and 2 GHG emissions table on page 45.

2 The MWh per £m revenue is calculated using the adjusted revenue figure disclosed in Note 4 to the Scope 1 and 2 GHG emissions table on page 45.

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NATURE POSITIVE

Addressing the nature crisis is essential for

mitigating climate change. Balfour Beatty is

dedicated to supporting a net positive future,

delivering both net zero emissions and nature

positive outcomes.

In 2024, we signed the Nature Positive Business

Pledge, a UK initiative aimed at halting and

reversing nature loss by 2030, and achieving

complete recovery by 2050 (using a 2020

baseline). This commitment aligns with the

Kunming-Montreal Global Biodiversity

Framework, to which the UK is a signatory.

Nature positive principles

In 2025, we released our nature positive

principles which underpin the setting of our

annually evolving targets:

Understand our impacts

Balfour Beatty has adopted a holistic definition

ofnature, which includes all realms – land, ocean,

freshwater, atmosphere and biosphere.

Our nature positive actions are targeted to deliver

multiple benefits across these realms and avoid

unintended consequences or trade-offs between

people, nature, and climate.

We look to harness opportunities to achieve

positive outcomes for climate, people and nature

through integrated initiatives, such as investing in

local economies, nature-based carbon projects or

implementing sustainable procurement practices

(e.g. utilising circular economy principles to reduce

extractive pressures and use of virgin materials).

Focus on outcomes

Our nature positive actions are prioritised and

informed by the best available data. Through the

identification and assessment of our upstream,

downstream, and direct interaction with nature

using established frameworks, we can determine

our material impacts and dependencies.

Thisenables the identification and prioritisation

ofnature-related risks and opportunities

(e.g.high-impact activities and critical

geographical locations).

Follow the mitigation hierarchy

To ensure consistency, Balfour Beatty adheres to

the mitigation hierarchy for nature, an established

framework designed to guide businesses and

organisations to manage environmental impact.

Itconsists of a sequence of steps that prioritise

actions to avoid, then minimise and, as a last

resort, compensate for negative impacts on

natural systems.

Collaborate relentlessly

We work with supply chain partners, stakeholders

and industry to address complex environmental

challenges through collaborative problem-solving

contributing to an overall net gain for nature.

Balfour Beatty supports appropriate industry-wide

initiatives, partnerships and cooperation

opportunities for advancing nature positive

policyand practices.

Measure success

We review and report against SMART objectives to

measure and advance delivery of nature positive

interventions and processes.

Reporting our performance against SMART

targets is integral to an improvement-focused

culture. This approach incentivises consideration

and embeds accountability for nature positive

decision-making processes across our business.

2025 nature positive objectives

2025 marked the inaugural full year of Balfour Beatty’s

nature positive journey. Accordingly, the primary

focus was on readying the business by equipping

us with the necessary knowledge, tools, and

processes to successfully progress this agenda.

SUSTAINABILITY CONTINUED

INNOVATIVE PEATLAND MANAGEMENT AT CRAIG MURRAIL , SCOTLAND

Over 20% of Scotland is covered by peat,

which holds the equivalent of 140 years’

worth of Scotland’s total annual greenhouse

gas emissions. The Craig Murrail substation

site, part of the Argyll and Kintyre 275 kV

Substations Upgrade, is located on deep peat.

The project required a focus on minimising

impact and maximising ecological value.

Balfour Beatty embedded best practices and

innovative solutions into peat management.

The project team collaborated on developing

access track designs to avoid deep peat

where possible, used existing tracks, oriented

infrastructure to minimise disturbance and

targeted training for plant operators. Best

practice included early engagement with

regulators, adherence to the mitigation

hierarchy (avoid, minimise, compensate) and

the use of the IUCN Peatland Code.

The project featured careful site selection and

innovative engineering to minimise peat

disturbance. Excavated peat was relocated to

nearby restoration areas, with careful handling

and bund construction to promote revegetation.

Over the next three to five years, restoration

areas will continue to be monitored for

sphagnum seeding and establishment.

Lessons learned are being used in planning for

a similar peat management area on the

Transport Scotland A9 Tomatin to Moy project.

Below: Peatland at Craig Murrail in Scotland

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Nature Positive SMART Tracker

The Nature Positive SMART Tracker demonstrates progress made

againstactionssupportingthefour Nature Positive objectives.

Focus areas

The 2025 SMART objectives are grounded in four key focus areas, with each specific objective

designed to support and facilitate progress in embedding the mitigation hierarchy, fostering a

nature positive mindset, managing risk and opportunity, and developing robust measurement tools.

Example

Embedding

the mitigation

hierarchy

Promote the mitigation

hierarchy for nature to

ensure we consistently

avoid, minimise,

compensate our impacts

on nature.

We have updated ‘Setting to Work’

documents within our internal Business

Management System (BMS) to include hold

points for consideration of the mitigation

hierarchy for nature to prompt and incorporate

opportunities to avoid, minimise and

compensate for all site operations.

Nature

positive

mindset

Adopt a nature positive

mindset to embed

considerations for the

natural environment into

every decision, fostering a

culture of awareness and

responsibility.

Bitesize ‘Nature Positive’ training has been

developed and released on our internal

e-learning portal as a series of five modules:

‘Biodiversity’, ‘Our Nature Positive Business

Pledge’, ‘The Mitigation Hierarchy’, ‘Wildlife

On Site’ and ‘Nature-based Solutions’.

These raise awareness of the significance

of the nature crisis for our business and

promote nature positive interventions.

Risk and

opportunity

Focus on risk and

opportunity to proactively

manage potential threats

while seeking out areas

where we can deliver real

benefits for nature and

business.

A digital EcoPermit has been developed for

use on our projects which will provide

consistent and efficient risk management

for ecology and biodiversity receptors.

Thepermit is hosted on the digital platform

SiteAssist and is currently being tested

onlive projects for full release in 2026.

Measurement

tools

Develop robust

measurement processes

and tools to allow us to

track progress, demonstrate

accountability, and

continually improve.

We have created a new nature tab within

the sustainability portal used by projects.

This will enable the aggregation of habitat

clearance, creation and enhancement data

across the UK business. It also records

proximity to designated sites and the

presence of Invasive Non-Native Species

(INNS). This will provide a mechanism

forenhanced disclosure and

businessmanagement.

Inclusion

within the

HSES ‘Setting

to Work’

documents

100%

Inclusion

within the GBL

Update procurement question

set and scorecards 20%

(on hold)

Sustainability

Portal Nature tab

75%

Double

Materiality

Assessment

100%

Nature asset

management tool

25%

(on hold)

Natural capital

feasibility

assessment

100%

Biocide

free

project

delivery

15%

Natural

capital

tool

40%

Digital

EcoPermit

75%

100% >50% <50%

Update

Near Miss

reporting

system

100%

Building

with

Nature

Forum

100%

Bitesize

training

100%

Guidance

and practical

measures

100%

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RESOURCE EFFICIENCY

Zero avoidable waste

As part of our renewed approach to resource

efficiency, Balfour Beatty is embedding the

Construction Leadership Council’s zero avoidable

waste routemap across the business. This reflects

our shift from managing waste after it occurs to

designing our projects and processes to prevent

waste from being created in the first place.

Each business unit continues to implement

targeted actions through its Bridging the Gap

sustainability plans, informed by its specific

waste profile and performance trends. Following

the UK business achieving its 2030 waste

intensity reduction target seven years early, our

baseline was reset to 2023 to reflect the maturity

of our approach and to align future reporting with

the principles of zero avoidable waste.

Waste reporting methodology

Balfour Beatty’s waste reporting covers UK

operations and excludes Gammon, which is

aligned to the Group’s carbon reporting

boundary, as the business sits outside Balfour

Beatty’s operational control. US waste data is

also not included at this stage, as datasets and

reporting structures are not yet comparable with

those of the UK.

To strengthen consistency, transparency and

alignment with industry practice, Balfour Beatty’s

waste reporting now follows the Supply Chain

Sustainability School’s Measuring and Reporting

Waste in the Built Environment: A Practical Guide

(2025). The Group contributed to the

development of this guidance and has adopted

its definitions, categorisation principles and

reporting boundaries to support improved

comparability across the sector. This approach

has enabled clearer reporting of waste arising

SUSTAINABLE WORKWEAR

WITH ARCO

Balfour Beatty’s Responsible Sourcing

teamidentified the need to make

PersonalProtective Equipment (PPE)

andworkwear more sustainable,

addressingcarbon reduction, ethical

sourcing, and garment longevity.

Working with Arco, our PPE and workplace

safety partner, the team transitioned all

navy workwear garments to the Arco

Responsible Workwear range in July 2025.

This followed Arco’s 2024 event highlighting

the importance of sustainable PPE.

The new range includes polo shirts,

t-shirts, sweatshirts, jackets, and cargo

trousers, manufactured from certified

recycled fabrics and Better Cotton Initiative

(BCI) cotton.

from construction, demolition, excavation and

premises activities, based on verified data

supplied by our waste management partners.

This alignment enhances the quality and

robustness of our resource efficiency reporting and

supports our long-term ambition to move towards

zero avoidable waste across our operations.

Waste performance

In 2025, Balfour Beatty continued to embed its

zero avoidable waste approach across UK

operations, with increasing focus on preventing

waste through improved planning, design and

procurement. Waste arisings reflect the scale

and nature of project activity during the year,

including a higher proportion of complex

construction, demolition and excavation works.

Diversion from landfill remained consistently high

across all major waste streams, demonstrating

the strength of our waste management practices

and supply chain collaboration. Following the

reset of our waste baseline to 2023 after early

achievement of our previous target, 2025

provides a robust foundation for driving future

reductions as we shift from managing waste to

eliminating avoidable waste.

1 The Group’s waste disclosure metrics and descriptions can be found in the Global Reporting Guidance at:

www.balfourbeatty.com/sustainabilityreporting

2 Waste and revenue from certain joint operations and unincorporated joint ventures where Balfour Beatty uses enhanced

reporting criteria is included to align with Balfour Beatty’s approach to GHG reporting (in line with Note 2 to the Scope 1 and

2 table on page 45).

860,000

760,000

660,000

560,000

460,000

360,000

260,000

160,000

0.0

25,000

15,000

5,000

0.0

EXCAVATION WASTE

(NON-HAZARDOUS) TONNES

PREMISES WASTE

(NON-HAZARDOUS) TONNES

Diverted from landfill Landfilled Tonnes/£m revenue

SUSTAINABILITY CONTINUED

160,000

120,000

80,000

40,000

0.0

22.0

18.0

14.0

10.0

6.0

2.0

0.0

CONSTRUCTION WASTE

(NON-HAZARDOUS) TONNES

24 2523

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0.0

DEMOLITION WASTE

(NON-HAZARDOUS) TONNES

24 2523

Construction Waste / £m NSV

Scan or click to read more

about how BalfourBeatty

is working with Arco.

Below: Example of sustainable Arco workwear.

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SUPPLY CHAIN INTEGRITY

Resilient supply chain,

responsiblegrowth

The expectations placed on construction supply

chains have grown sharply in recent years.

Suppliers are operating in a landscape shaped by

new legislation, rising carbon requirements,

tightening scrutiny on labour practices and an

increasing demand for transparency across long

and complex supply chains. The Procurement

Act, which was implemented in 2024 and came

fully into force in 2025, has further raised the bar,

placing greater emphasis on value, integrity and

accountability throughout public procurement.

Against this backdrop, building a resilient supply

chain is essential to our long-term success. In

2025 we focused on setting clear expectations

for the supply chain, strengthening our assurance

processes and supporting suppliers to meet

growing regulatory and client demands. Our work

this year reflects a deliberate shift, moving from

compliance to proactive partnership, capability

building and shared progress across carbon and

materials, inclusive procurement and human

rights. Collaboration remains central to how

wedeliver this.

Inclusive procurement

Inclusive procurement plays a vital role in

strengthening local economies and widening the

opportunities available within our supply chain.

Bycreating space for diverse, local and smaller

organisations to participate, we generate social

economic value, improve resilience and ensure our

projects reflect the communities we serve. As

expectations grow across both client requirements

and legislation, supporting these suppliers to

succeed has become increasingly important.

We recognise that many SMEs face capability

and capacity barriers as these demands increase.

To address this, we launched EDGE: Empowering

Development for Growth and Excellence.

Originating from a My Contribution idea, EDGE is

a structured programme offering resources and

tools designed to help suppliers improve their

knowledge, strengthen their resilience and grow

their businesses. It builds a stronger, more

capable supply chain. It helps smaller suppliers

meet rising expectations, improves the

consistency and quality of delivery on our

projects and creates lasting social and economic

benefit. The pilot launched in 2025, with a full

rollout planned for 2026.

Carbon and materials

Decarbonising construction materials remains

one of the sector’s biggest challenges. With

steel and concrete responsible for a significant

share of embodied carbon, meaningful progress

depends on a coordinated approach across the

supply chain. In 2025, we have been

collaborating with the supply chain to set key

milestones for decarbonisation, improving data

quality and preparing for new carbon related

regulation, ensuring that both our business and

our suppliers are ready for the shift ahead.

Building on our work in 2024 to reduce the carbon

impact of steel and concrete, we convened

suppliers from across the sector, including large

corporates, SMEs and specialist subcontractors.

Together we developed a practical roadmap for

lower carbon materials, setting out shared

milestones and expectations for delivery over the

coming years. The roadmap is informed by the

Construction Leadership Council’s five carbon

commitments and will be published externally in

2026. It provides a clear, collaborative pathway for

suppliers and supports a more consistent

approach across the industry.

Over £2bn

SPEND WITH SMEs

£708m

SPEND WITH LOCAL SUPPLIERS (20 MILES)

£2.5m

SPEND WITH VOLUNTARY, COMMUNITY,

ANDSOCIAL ENTERPRISE (VCSEs)

BUILDING SUPPLY CHAIN

RESILIENCE THROUGH THE

EDGEACADEMY

As Balfour Beatty continues to grow its

portfolio of large-scale infrastructure projects

across the UK, including in sectors such as

nuclear and defence, the strength of our

supply chain is critical to delivering trusted,

expert and sustainable outcomes. With 73%

of our partners being small and medium

enterprises, many face barriers in procurement,

compliance and training. Supporting these

partners is essential to reducing risks and

enabling them to thrive alongside us.

To address this, we have developed the EDGE

Academy: a free programme of micro video

series, online modules, resources and

assessments designed with our experts

anddelivered through the Supply Chain

Sustainability School’s online platform.

TheAcademy covers a wide range of topics

including quality assurance, cybersecurity,

contract management, sustainability and

nuclear safety.

Content is intentionally low resource and

flexible, allowing suppliers to engage with the

modules most relevant to them and to track

their progress through pre and post learning

self assessments.

The programme has already seen strong

engagement, with 148 suppliers enrolled and

95% of participants being SMEs. More than

10 hours of training have been delivered,

helping partners to strengthen their

knowledge and reduce risks.

Scan or click to read more

about the EDGE Academy.

Scan or click to read more about our supply

chain decarbonisation roundtables.

Balfour Beatty plc | Annual Report and Accounts 2025

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SUPPLY CHAIN

INTEGRITYCONTINUED

Carbon and materials continued

Accurate Scope 3 reporting remains a critical

challenge for the sector. Throughout 2025 we

continued to work with industry peers and

supplychain partners to shape a more

consistent, industry-wide approach to Scope 3

data requirements. This aims to reduce the

administrative burden on suppliers and improve

the quality of the data we collect. Within the

business, we continued to mature our approach,

moving from a solely spend based method to

ahybrid model that improves accuracyand

strengthens our understanding ofmaterial impacts.

Find out more about our Scope 3 emissions on

page 46.

The UK Carbon Border Adjustment Mechanism

(CBAM) is due to take effect from January 2027.

Although implementation is still ahead, the

impact on materials procurement is significant,

particularly for steel, aluminium and cement.

With many of our projects already tendering and

planning beyond 2027, understanding future

carbon related tax liabilities has become essential.

In2025 we developed a CBAM liabilities estimator

tool to support early decision making. Without

visibility of these costs early in a project, there

isarisk that quotations appear competitive while

carrying hidden tax liabilities. Our tool helps

identify these liabilities and enables fairer

comparisons of globally sourced materials,

supporting more informed procurement choices

and reducing commercial risk.

Human rights

Protecting people in our supply chain remains

central to how we operate. In 2025 we strengthened

our approach through clearer governance, deeper

insight into high-risk labour models and a more

structured set of assurance tools. This helped us

identify risks earlier, address issues with suppliers

and raise standards in the parts of the supply

chain most vulnerable toexploitation.

Our Supply Chain Modern Slavery Maturity

Assessment is now in its third year, giving us a

clearer picture of where risk sits across our Tier 1

suppliers and where support or intervention is

needed. Over the last three years we have

completed 405 assessments; prioritising

high-risk suppliers while taking a measured,

risk-based approach across medium and low

categories. In 2025, 37% of our overall spend

was placed with suppliers assessed within this

three-year cycle. Across the total spend with

suppliers identified at higher risk of modern

slavery, this increased to 46% of spend with a

supplier who had been assessed, giving us

greater visibility of the suppliers we work with

most and strengthening the evidence base that

informs our due diligence and decision making.

During the three-year programme, we have

re-assessed 45 suppliers, on average their

maturity had improved by 20%.

We continued to expand our due diligence of

labour agencies, reflecting the elevated risk of

exploitation within complex labour supply chains.

Working with Nutral Solutions Ltd, we undertook

a forensic review of blue-collar labour agencies

which included a further 42 labour agency audits.

This involved office visits, checks on contracts

and payslips, reviews of management systems

and clearer visibility of sub-tier arrangements,

including the use of umbrella companies.

Thereview highlighted several improvement

opportunities, such as more consistent issue of

key information documents and stronger sub-tier

due diligence.

In 2025 we deepened our insight by incorporating

lived experience into how we design and improve

our human rights work. In collaboration with

Align Ltd, we hosted a workshop on a live project

bringing together consultants with lived experience

of modern slavery, operational teams and supply

chain partners. Their insights shaped several

practical outputs which will inform the activities

we undertake in 2026 to improve our approach.

Scan or click to find out

moreaboutthe modern slavery

lived experience workshop.

We reinforced our governance framework

through a new group policy, improved data

processes and a more consistent way of reviewing

labour agencies. This provides a stronger

foundation for managing risk and supporting

supplier improvement. Our work this year was

recognised externally, with our Procurement

team receiving a Highly Commended award at

the Chartered Institute of Procurement & Supply

Awards for their approach to ethical sourcing and

modern slavery risk management.

Scan or click to read our latest

ModernSlaveryStatement.

SUSTAINABILITY CONTINUED

PROGRESS AGAINST TARGETS

11.4% TARGET: 10%

OF HIGH-RISK SUPPLY CHAIN

PARTNERSSUBJECT TO A MODERN

SLAVERYASSESSMENT

6.2% TARGET: 5%

OF MEDIUM-RISK SUPPLIER CHAIN

PARTNERSSUBJECT TO A MODERN

SLAVERYASSESSMENT

2.8% TARGET: 1%

OF LOW-RISK SUPPLY CHAIN

PARTNERSSUBJECT TO A MODERN

SLAVERYASSESSMENT

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

COMMUNITY ENGAGEMENT

Resilient business, thriving

communities

At Balfour Beatty, resilience is the foundation of

our long-term performance. The work we do

connects people and places, and our work in

communities deepens our impact for those who

live and work around our projects. We build trust,

local understanding and partnerships that enable

us to deliver better outcomes that continue to

make a difference long after we leave site.

In 2025 we set new targets, to create £6 billion

of social value and deliver 60,000 hours of education

engagement by 2030 in the UK. These targets

give Balfour Beatty a clear identity and purpose

for delivering social impact beyond our clients’

requirements. They demonstrate what matters

tous as a business and align our commitments

with a critical industry challenge: the construction

skills gap. By focusing on education, skills,

training and pathways into employment, we’re

converting a national workforce issue into an

opportunity to build capability, support social

mobility and strengthen the communities where

we work.

To support this, we refined our definition of local

to within 20 miles. This gives us a consistent and

focused way to plan, deliver and measure our

impact across the UK. It ensures our efforts are

targeted where they will have the greatest

benefit for communities. This approach is

reflected in the projects we deliver.

£1.012bn

Ⓐ

SOCIAL VALUE DELIVERED IN THE UK

Engaging with education

Our target of delivering 60,000 hours of education

engagement by 2030 reflects our commitment to

helping young people in the UK understand the

opportunities our industry offers. These hours are

generated through Balfour Beatty employees

investing their time with schools, colleges and

universities across the UK. In 2025 we had 77,761

student interactions and engaged with 383

educational institutions.

6,787

HOURS SUPPORT TO EDUCATIONAL

INSTITUTIONSANDSTUDENTS

Our approach to educational engagement

focuses on sustained presence in key locations,

supporting students throughout their school

years and showcasing the variety of careers

available in construction and engineering. We’re

building confidence, widening horizons and

showing that our industry is open to everyone,

whatever their background or starting point.

In 2025 we strengthened this through a new

partnership with STEM Learning. Their specialist

support helps teachers bring real-world Science,

Technology, Engineering and Mathematics

(STEM) concepts into the classroom and provides

mentoring and career guidance for students. The

partnership also creates summer placement

opportunities for young people who may face

barriers to entering the industry, supporting social

mobility and broadening access to future careers.

A central part of this work is our Industry Insights

programme, which offers a hybrid model of virtual

learning and on-site experience accredited by

Industrial Cadets. It helps young people develop

skills, understand real project environments and

explore future career paths. This year we’ve

supported 391 students.

Employment and skills

While our education engagement target focuses

on the time our employees give to schools,

colleges and universities, our employment and

skills work is centred on how our business

creates opportunities and pathways into the

industry. These pathways help people develop

the confidence, skills and support needed to

move into meaningful work, while also helping to

address the construction skills gap.

In 2025, we provided 996 weeks of work

experience, which included year-out placements,

T Level industry placements, summer

placements and work experience, as well as

28,518 weeks of apprenticeships and 20,401

hours of internal skills training.

In 2025 we also continued to strengthen our

Breaking Barriers programme, which focuses

onsupporting people who may face challenges

entering or re-entering the workforce. This

includes our pathway for prison leavers, which

we expanded through closer work with specialist

partners and improved employer support on site.

We also enhanced our military talent pathway,

making it easier for service leavers to translate

their skills into roles across our business.

Recognising the barriers faced by young people

with experience of the care system, we

progressed work to support care leavers and

signed the Care Leaver Covenant. We also

started a more focused programme to engage

young people not in education, employment or

training, providing routes into work through

targeted placements and local partnerships.

Together, these pathways help widen access to

stable employment, support social mobility and

strengthen the long-term resilience of our workforce.

Scan or click to find out

more how we’ve been

engaging with education.

Above: Early Careers colleagues on our Net Zero Teesside

Northern Endurance Partnership project.

Scan or click to find out more about

our Industry Insights programme.

Above: London South East Colleges (LSEC) students taking part

in Industry Insights, our hybrid work experience programme.

Balfour Beatty plc | Annual Report and Accounts 2025

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BRIDGING COMMUNITIES

ACROSS THE RIVERTRENT

The Nottingham Footbridge

demonstrates how our projects bring

communities together while creating a

legacy. Built for pedestrians and cyclists,

the bridge connects neighbourhoods,

improves access to local spaces and

shows our commitment to sustainable,

people-first solutions. Through local

employment, expert volunteering and

partnerships with small businesses and

social enterprises, we ensure the impact

of our work lasts: strengthening communities

while Building New Futures.

COMMUNITY ENGAGEMENT

CONTINUED

Employees in the community

Our people play a crucial role in strengthening

the communities where we work. In 2025

Balfour Beatty invested 21,355 hours to local

causes, charities and community organisations

across the UK through employee volunteering

and social impact activities. Their contributions

ranged from mentoring young people and

supporting environmental projects to helping

small businesses and community groups through

expert volunteering.

We also continued to support charity partners,

donating £636,799, alongside local fundraising

efforts where employees raised £110,023,

reflecting the interests and priorities of our

people and the places where we operate.

Theseactivities help build strong local

relationships, support community resilience

andshowcase the commitment of our people

beyond the workplace.

Social value

Social value is how we monetise social impact.

Ittranslates real-world activities such as local spend,

local employment and community engagement

into a common measure, enabling us to track our

impact consistently and transparently. At Balfour

Beatty we use the TOM System to measure our

social value, and in 2025, we transitioned to the

latest version (2024).

Our social value performance this year has

exceeded expectations for three key reasons.

The combination of updated proxy values,

improved data quality and more consistent

reporting has provided a clearer and more

accurate reflection of the value our projects

generate across the UK.

As part of this, we refined our definition of local,

reducing the radius from 30 miles to 20 miles to

better reflect where our projects have the most

immediate economic and social impact. The

updated TOM System also introduced revised

proxy values, and many of the geographical areas

in which we currently operate receive higher

values under this new methodology.

We have also enhanced the way we capture

andreport local employment and apprenticeship

data, which has increased the quality of our

data.Thishas helped to ensure our social value

performance reflects a more complete and

accurate account of the employment

opportunities we create.

SUSTAINABILITY CONTINUED

Scan or click to find out more

about this project andto

watch the video.

Enhanced completeness in employment and

community focused reporting means that local

spend accounted for a smaller proportion of the

total social value. This reflects a more complete

and transparent assessment of the full range of

benefits our projects deliver, providing a stronger

foundation as we work towards our 2030 targets.

KPMG LLP was engaged to undertake an

independent limited assurance engagement of

the social value generated in the UK, reporting to

Balfour Beatty plc, using the assurance standard

ISAE 3000 (Revised) on the social value data

thathas been highlighted in this report with the

symbol

Ⓐ

. KPMG’s full statement is available at:

www.balfourbeatty.com/ILA_2025

The limited assurance statement should be read

in the context of the reporting criteria (including

definitions, boundaries and data sources) as set

out in Balfour Beatty’s Global Sustainability

Reporting Guidance available at:

www.balfourbeatty.com/sustainabilityreporting

The guidance outlines the non-financial KPIs

measured by the Group, their definitions and

evidence requirements.

Scan or click to read more about

our volunteering activities.

Below: The newly built Nottingham Footbridge.

Balfour Beatty plc | Annual Report and Accounts 2025

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EMPLOYEE DIVERSITY,

EQUITY ANDINCLUSION

Balfour Beatty continues to drive progress on

diversity, equity and inclusion (DE&I) through

theBuilding New Futures sustainability strategy.

Attracting and retaining a diverse workforce

requires embracing different perspectives and

experiences to drive fresh thinking, innovation

and better ways of working.

Find out how we are driving an inclusive culture,

read Our People section on pages 56 to 60.

Early engagement is key to addressing the industry’s

skill shortage – within our Early Careers population,

2025 saw strong progress on gender and ethnic

diversity, with a notable increase in gender

diversity in Hong Kong, achieving 40% females

within the Early Careers population. Increasing

the diversity of experience and thinking within

our teams, to ensure they reflect the communities

that we work within, remains afocus across

theGroup.

For the UK we remain committed to the UK 2030

DE&I targets set in 2022, consistently monitoring

our steady progress and reporting internally and

externally at key points against these commitments.

We also report our progress as part of the FTSE

Women Leaders Review and as required by

theUK Parker Review. In 2024 we set a 6%

targetfor senior leadership ethnic diversity.

Ourprogress towards this target as of 2025 is 4.1%.

As part of the launch of the United Ambitions

Sustainability strategy, targets were set in Hong

Kong in 2024 to enhance gender diversity at all

levels by attracting more female talent to join the

organisation, and by attracting and developing

female leaders.

Hong Kong progress against targets:

@ external female hiring for all levels %

by2025= 30% (target = 20%).

@ female junior executives and above % by2026

= 17.5% (target = 22%).

In 2025, the UK’s Gender Affinity Network introduced

Gender Circles – local site and office-based groups

designed to connect existing gender-focused

initiatives and create a two-way channel for

collaboration, insight, and feedback. These

circles provide a safe space for open discussion

on barriers faced by women, share resources,

and engage more people in driving gender equity.

Launched alongside International Women in

Engineering Day, Gender Circles quickly scaled

to24 sessions across 24 locations, engaging

over230 participants. Five key themes emerged

– career development, flexible working, workplace

culture, facilities, and psychological safety – with

members voting to prioritise career development.

A second round of circles during National Inclusion

Week generated actionable ideas now embedded

in the 2026 network plans. This initiative has

strengthened connectivity, amplified voices,

andaccelerated progress towards a more

inclusive workplace.

Progress towards diversity targets in three key areas:

FEMALE EMPLOYEES ACROSS

THEWORKFORCE %

22.5

20.2

21.0

19.6

18.7

UK ETHNIC MINORITY

EMPLOYEES %

14.1

12.4

13.0

11.0

8.8

UK BLACK EMPLOYEES %

3.3

2.8

3.0

2.3

1.9

Gender breakdown

At 31 December 2025 Male Female Total % Male % Female

Board 5 4 9 55.56% 44.44%

Senior managers

64 29 93 68.82% 31.18%

Directors and subsidiaries

not included above

33 15 48 68.75% 31.25%

Employees

19,904 5,763 25,667 77.55% 22.45%

1 Senior managers are employees of the Company, its subsidiaries and Gammon, who have responsibility for planning, directing or

controlling the activities of the Group, or a strategically significant part of it, excluding Directors of Balfour Beatty plc.

2 Directors of all subsidiaries have not been included as senior managers as this would not accurately reflect the Group’s executive pipeline.

3 All employees of the Company and its subsidiaries, together with employees of Gammon, the Group’s 50:50 joint venture with

Jardine Matheson based in Hong Kong.

BREAKING GENDER

STEREOTYPES:

THE SISTERS TAKING THE

CONSTRUCTION INDUSTRY

BYA STORM

In 2023, Irene Cheung made a decisive

move from healthcare into construction,

inspired by her sister’s journey into

engineering. She joined Gammon as a

Technician Apprentice through the VTC

Earn and Learn Scheme and gained

hands-on site experience while studying

for a Higher Diploma in Civil Engineering.

Her determination and performance quickly

stood out – earning her the Outstanding

Apprentice Award from Hong Kong’s

VTC, one of only two winners in

theconstruction sector. Irene credits

Gammon’s clear career pathways and

supportive mentorship for helping her

thrive in a traditionally male-dominated field.

“What drew me to construction was the

opportunity to collaborate with diverse

teams and apply theoretical knowledge

to real-world challenges.” Irene shares.

Below: Irene Cheung, Technician Apprentice, Gammon.

Balfour Beatty plc | Annual Report and Accounts 2025

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OUR PEOPLE

Shaping

ourfuture

through

talent and

skills

development

During 2025, we have continued

to focus on the four pillars of our

Group people strategy – Attract,

Retain, Grow and Thrive –

empowering colleagues to excel

and build rewarding careers.

From early careers to experienced hires, and

throughout the employee lifecycle, we are

investing in the skills we need, supported by

inclusive leadership, data-led learning and

creating a consistent, high-quality employee

experience. Across the UK, US and Hong Kong,

our approach is locally tuned but globally aligned,

ensuring we have the capacity, capability and

culture to deliver for our customers – safely,

ethically and with pride.

2025 highlights

@ 5,082 employees onboarded across the

Group, building capacity and capability

across all markets, supported by

improved systems and processes to

enhance the employee experience.

@ Market-leading levels of employee

engagement maintained across

theGroup.

@ Strong focus on project management

capability, launching new development

programmes.

@ Achievement of Platinum membership

of The 5% Club.

@ Balfour Beatty received ‘Best Place

toWork’ recognition by five business

publications across California and Texas.

2026 priorities:

@ Attraction and retention of key skills and

talent remains a priority.

@ Continued development of our people to

deliver for our customers, through

high-quality leadership, technical and

professional development.

@ Continued creation of a great culture and

environment, where people want to

work, collaborate and grow their careers.

ATTRACT

Attracting and recruiting the skilled

individuals we need now, and for

thefuture.

We attract and recruit high-calibre people who

strengthen our capability and deliver excellence

for our customers. Our targeted attraction strategies

engage both early careers and experienced

professionals, positioning us as a ‘Great Place to

Work’ and a career destination of choice. Through

targeted strategies and creative partnerships, we

attract top talent from a variety of backgrounds

including those taking non-traditional routes into

construction and individuals with scarce skills,

tobuild robust talent pipelines for the future.

As part of our ambitious, multi-year programme

to digitise and enhance our key HR processes,

July 2025 marked the successful launch of our

new Onboarding Portal in the UK. Underpinned

by significant investment in our digital infrastructure,

the portal simplifies the onboarding process

intofive clear steps, ensuring all essential

pre-employment checks are completed efficiently.

For new starters, this means a streamlined,

intuitive journey from offer to first day. For hiring

managers and recruiters, it means real-time

visibility and direct access to the portal, with

instant updates on key milestones, such as

contract acceptance and start-date countdowns,

making the hiring experience more connected

than ever.

This allows our HR teams to focus on what matters

most – delivering an exceptional experience for

every new joiner. The portal’s design reflects the

voice of our people, more than 500 ideas from

our My Contribution (MyC) employee-led ideas

programme helped shape its development.

Readmore in our MyC section on page 61.

2025 EARLY CAREERS HIRES: GRADUATES,

APPRENTICES, TRAINEES, INTERNS AND

INDUSTRIALPLACEMENTS

GammonUK US

428

400

% OF OUR UK WORKFORCE IN

EARN AND LEARN POSITIONS

6.2%

6.5%

7.4%

7.3%

8.8%

21 22 24 2523

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

Balfour Beatty plc | Annual Report and Accounts 2025

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RETAIN

Creating the right environment to

ensureour great people want to stay

inthebusiness.

We are committed to delivering a great employee

experience at each touch point of the employee

lifecycle. We believe employee experience is the

key to retaining talented individuals who continue

to be engaged and committed to Balfour Beatty.

By fostering an inclusive culture, providing

opportunities for development, and ensuring

employees feel valued, we create an environment

where people choose to stay and thrive.

Tomeasure our progress, the Group’s annual

employee engagement survey is our key metric.

In 2025, our engagement index score remained

industry-leading at 83%, c. 8% higher than

benchmark engagement scores for organisations

in our sector.

Nurturing success for

under‑represented talent

In 2025, we strengthened our long-standing

career development offer for under-represented

groups in the UK through our refreshed programme,

Evolve. In the last year, 77 delegates have taken

part in a three-day experience focused on

self-reflection, confidence-building and

challenging limiting beliefs. Over the last three

years, the impact has been meaningful: 98%

ofparticipants have continued to develop their

careers with us, 94% have moved into new roles

and 63% have been promoted, demonstrating

the programme’s role as a catalyst for career

progression and retention. Mohamed Mahgoub,

Assistant Project Manager, shared: “It felt less

like a course and more like a therapeutic space –

a chance to pause, reflect and better understand

myself and others. These are the kinds of

lessons you don’t get taught at school, yet

they’re so fundamental to growth, confidence

and long-term success.”

SETTING PEOPLE UP

FORSUCCESS

Our internship programmes across our US

Buildings and Civils business are more than

summer jobs – they are immersive experiences

that build confidence, foster collaboration,

andignite passion for the construction and

infrastructure sector.

In 2025, we welcomed 197interns from college

campuses across the country, providing

hands-on experience at every stage of

construction. The interns spent the summer

inan environment that champions innovation,

collaboration and personal growth, helping them

feel part of something bigger and gain adeep

understanding of Balfour Beatty’s broader impact.

A summer intern social media competition

showcased their creativity through shared

experience, with winners announced on

National Intern Day in July 2025.

With a high success ratio from intern

topermanent hire, our programme is helping

shape the next generation of industry leaders.

In Hong Kong, we engage and inspire the next

generation of talented professionals through the

graduate orientation camp, which immerses

newcomers in our culture through team building,

technical visits and leadership engagement.

Launched in 2024, the camp has achieved

retention rates of almost 90% giving outstanding

feedback. Complemented by company visits,

school talks, career fairs, and partnerships across

Hong Kong and China, these efforts drove a

40%increase in Graduate Engineer applications,

reinforcing our commitment to attracting and

developing top talent. Feedback has been

overwhelmingly positive, with participants

praising the camp’s engaging format,

real-worldinsights and lastingimpact.

40%

INCREASE IN GRADUATE ENGINEER

APPLICATIONS AT GAMMON

Below: US Buildings and Civils interns gaining hands-on experience on site.

Balfour Beatty plc | Annual Report and Accounts 2025

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OUR PEOPLE CONTINUED

EMPLOYEE ENGAGEMENT SURVEY SCORES %

83%

Group employee engagement indexscore

8% above industry benchmark

19,900

Colleagues completed the annual survey

up 2% from the 2024 response rate

HIGHLIGHTS FROM

THEEMPLOYEE ENGAGEMENT

SURVEY (UK AND US)

76%

feel there are opportunities to develop a

career within Balfour Beatty, up 8% from

2024 and 18% above the industry

benchmark

82%

of our people would recommend

BalfourBeatty as a great place towork

90%

of our people can see themselves

workinghere in 12 months’ time

95%

‘I feel cared for’ continues to be our

highest score

Across the Group, a similar focus has been placed

on improving visibility of career pathways and

supporting employees seeking new opportunities.

In our US Investments business, employee

engagement results in recent years have identified

career mobility as a critical development area and

a key factor influencing whether employees see

a long-term future with Balfour Beatty. In response,

we have increased visibility of internal vacancies,

linked careers information directly from internal

webpages and refined regional talent processes

to identify colleagues with high-potential and

offer short-term stretch assignments that build

leadership capability.

These changes have resulted in year-on-year

improvement in internal hiring, with internal

moves rising from 10% in 2024 to nearly 20%

in2025 – a total of 160 employees stepping into

new roles. This progress reflects our ongoing

commitment to supporting career development

while strengthening retention of critical talent.

In Hong Kong, immersive development

opportunities have also strengthened early

careers retention. The Young Professionals

Group(YPG) Study Tour to Sydney in April 2025

exposed participants to advanced engineering,

sustainability and safety practices across six

leading organisations, including Sydney Metro

and Atlassian Central. Alongside insight into

tunnelling, smart construction and mass timber

innovation, the tour fostered global networking,

collaboration and cultural exchange, encouraging

young professionals to broaden their horizons

and bring future-ready thinking back into the

business – further reinforcing Gammon’s

commitment to developing the next generation

of talent.

Above: Gammon’s Young Professionals

Group Study Tour visiting sites in Sydney.

Above: Artwork from our employee

engagement campaign.

GROW

Growing our own talent, empowering our

people to build exceptional careers that

drive business success.

‘Grow our Own’ is at the heart of our talent

philosophy. We empower employees to develop

their skills and build fulfilling careers through

meaningful opportunities and targeted talent

programmes. In 2025, we strengthened our

focus on career development and succession

planning, ensuring our people have the capability

to deliver the projects of the future. These efforts

were reflected in employee feedback, with 76%

of our people across the UK and US feeling that

there are opportunities to develop their careers

within Balfour Beatty, an increase of 8% from

2024 and 18% higher in comparison to other

companies within the sector.

Supporting growth from entry‑level

to senior leadership

In 2025, we demonstrated that ‘Grow our Own’

is more than a strapline through the appointment

of Phil Clifton to the Executive Committee.

Having started his career with the business as

a‘year out’ student in 1991, Phil’s appointment

demonstrates how our early careers programme

continues to build the leadership of tomorrow.

His progression and the fact that he now joins

fellow former graduate Stephen Tarr at the most

senior level, illustrates the depth of our internal

talent pipeline. Phil shares, “My journey from

ayear out student to Divisional CEO reflects

Balfour Beatty’s long-term commitment to

growing its own talent. Building a strong, visible

pipeline is critical – not only for our business,

butfor attracting and retaining the next

generation of leaders across the industry.”

Another example in 2025 that demonstrates our

commitment is Dipa Patel: “My progression

toGroup Head of Tax reflects a journey of continuous

RETAIN CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

TALENT DEVELOPMENT ANDSUCCESSION PLANNING PROGRAMME

To future-proof leadership and strengthen

succession planning, we introduced the

award-winning Talent Development and

Succession Planning Programme, recognised

byCTgoodjobs for excellence in talent

management. Using a data-driven approach

– including psychometric assessments,

stakeholder interviews, andon-site observations

– the programme identifies high-potential talent

aligned with our Gammon Leader DNA, centred

on five key qualities: ambition, commercial

mindset, agile learning, humility with influence

and emotional resilience.

Built on the 3E framework of Experience,

Exposure and Education, the programme

emphasises challenging assignments,

developmental relationships and targeted

learning, with 90% of growth coming from

experiential and informal development.

Byengaging external experts and industry

best practice, it sets a new benchmark for

leadership development, fostering innovation,

adaptability and resilience andensuring a

strong pipeline of future-ready leaders.

THE NEXUS – A LEADERSHIP

JOURNEY INCOMPLEX

INFRASTRUCTURE

As we deliver some of the UK’s most

complex infrastructure projects, we

identified that technical expertise alone

wasn’t enough. Our success depends on

leaders who can navigate uncertainty,

foster collaboration and drive innovation.

This inspired the creation of The Nexus –

acommunity designed to strengthen

theresilience and strategic leadership

capability of our senior project directors.

Participants come together from across

thebusiness to build a peer network where

they share experiences, learn from each

other, and challenge themselves to grow.

Within this environment, leaders have

undergone tailored assessments, mapped

career pathways with mentor support and

engaged with industry experts for fresh

perspectives on mega-project delivery.

The result is a vibrant community of senior

project directors and a strong pipeline

ofleaders ready to shape the future of

infrastructure delivery. Plans are now in

place to diversify membership, sustain

long-term engagement and embed The

Nexus culture as a lasting legacy across

Balfour Beatty.

development, guided by a manager-led and

Company-supported succession roadmap that

included broadening my role, widening my

network, work shadowing, and participating in

the Future Leaders programme, complemented

by personalised coaching. I continue the leadership

journey with a well-supported, tailored executive

development programme.”

‘Grow our Own’ is not just focused on linear

progression – it is about creating broad and

varied career paths for talented experts across

the Group. We proactively encourage movement

across disciplines and projects to accelerate

growth, build organisational versatility and ensure

we have experienced Balfour Beatty talent ready

to lead on newventures.

Our focus on project leadership extends across

the Group, with the US Buildings business piloting

a project leadership workshop in 2025 to strengthen

project execution, cross-functional collaboration,

and leadership capability of key operational teams.

Leadership and management development has

also remained a key focus, with the Foundational

Management programme rolling out across all US

business areas over the last few years. Introduced

originally in the US Investments business, this is

acore management curriculum, designed to build

essential people-leadership skills, reinforce Company

standards, and prepare emerging leaders for

expanded responsibilities. Inpartnership with

external experts and internal learning and

development strategists, the programme was

launched in US Buildings in 2024 and then US

Civils in 2025 and is now a critical development

programme for all managers.

13,562

employees have attended training and

development courses across the Group

Below: Members of The Nexus community. Below: Gammon colleagues collecting the CTgoodjobs award for excellence in talent management.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

OUR PEOPLE CONTINUED

@ Launching inclusive leadership workshops

andeLearning and joining The Women’s

Foundation Male Allies Programme in

HongKong.

@ Promoting multicultural inclusion in Hong Kong

through awareness campaigns, Science,

Technology, Engineering and Maths (STEM)

engagement, cultural dialogue sessions and

community outreach.

Our Right to Respect programme continues to

embed across many parts of the Group, including

the UK and the US Construction businesses.

Through ongoing discussion groups across our

projects, colleagues are supported to explore

what respectful behaviour looks like on our sites

and in our offices, reinforcing our commitment

tosupport our Value Everyone ethos.

Across the UK and the US Buildings and Civils

businesses, engagement remains strong:

73.35% and 90% of line managers, respectively,

have been engaged with the roll-out. By creating

a safe space where people can explore

differences in opinion, challenge assumptions,

and stay curious, we’re ensuring people

understand the impact they have and embrace

respectful interactions. We are proud to continue

this journey – ensuring that respect remains at

the heart of everything we do. In the UK, we

received a Highly Commended Award for our

Right to Respect programme at the Inspiring

Women in Construction and Engineering Awards.

THRIVE

Building an ethical and inclusive culture

where people can bring their whole self to

work and perform to their highest ability.

We continue to foster an ethical and inclusive

culture where all employees feel valued and

respected, creating an environment where the

business and our customers benefit from the

diverse thinking and experiences of our employees.

Employee diversity, equity and inclusion (DE&I)

isa core part of our Building New Futures

sustainability strategy. Learn more about the

progress made against our UK diversity targets

set out in the Value Everyone UK DE&I strategy,

on page 55.

Across the UK, US and Hong Kong, we continue

to build understanding of all areas of diversity,

equity and inclusion, through our 17 Affinity

andAllies networks and specialist groups in

theUK and US, and employee-led networks in

Hong Kong. These networks and support groups

play avital role in shaping action plans and

promoting a culture of collaboration,

understanding and belonging.

We also demonstrate our commitment

toaninclusive and ethical culture through:

@ UK accreditations including Clear Assured

Silver, Disability Confident Employer and

Menopause Friendly Employer.

RELENTLESS ALLY:

ACULTURALCORNERSTONE

In 2025, Balfour Beatty’s US Buildings and

Civils businesses reaffirmed the Relentless

Ally mission – an operating philosophy that

defines how we lead projects, engage

stakeholders and deliver success.

Thiscommitment reflects our core promise:

achieving exceptional results and investing

fullyin every stakeholder with dependability,

dedication and resolve.

Relentless Ally is a cultural cornerstone built on

behaviours and mindsets that guide how we

work, covering areas such as collaboration,

innovation and continuous improvement.

Thesixth annual Together Allies Summit, held

in October 2025, spotlighted the Relentless

Ally philosophy as its central theme. The event

reinforced how these mindsets strengthen

trust, resilience and excellence by differentiating

our business and driving success for employees,

clients and partners. Leading with purpose

means building projects, relationships and

communities that endure.

Scan or click to meet

Balfour Beatty’s

Relentless Allies in

theUS.

UK US Gammon

SCAN OR CLICK TO FIND OUT MORE ABOUT OUR GROUP’S

AFFINITY NETWORKS:

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

MY CONTRIBUTION (MYC)

Driving

positive

change

At Balfour Beatty, our

employees are our experts.

Every day, they bring fresh

perspectives and smart

solutions that make us stronger,

safer and more productive.

Aligning with project priorities

Building on the success of our 2024 pilot on

Old Oak Common, we expanded the

programme to all 1,500 colleagues on the

project, including our supply chain partners.

Focused on ideas that will help us deliver

value for taxpayers’ money, deliver safely

and deliver on time, 18 ideas have now been

implemented, with one idea alone, ‘smart

sockets’, estimated to enable £30,000 of

savings annually and reduce energy

usageby 50%.

2025 UK AND US PERFORMANCE

ENGAGING OUR

WORKFORCE

1,718

ideas shared

21%

of employees

collaborating

onideas

DRIVING

CHANGE

526

ideas delivered

440

team MyC

volunteers

CREATING

VALUE

£2.6m

estimated cost

savings

£1.4m

estimated

cash in

GREAT PLACE

TOWORK

63,378

estimated

hourssaved

361

great place to work

ideas delivered

Unlocking digital potential

In September 2025, teammates from our US

business gathered at Microsoft headquarters

outside Dallas, Texas, to hack six real-world

challenges crowd-sourced from colleagues,

laying the foundation for innovation and

accelerating AIadoption.

Scan or click to watch

how colleagues turn bold

ideas into real impact.

My Contribution (MyC) is a critical driver for

employee-led business change, connecting

employees to our strategic priorities, harnessing

the power of their expertise and using collaboration

to drive innovation and aculture of continuous

improvement.

In 2025, over 500 ideas became a reality,

theseincluded:

@ an innovative new project delivery platform

leveraged through MyC realised US$20 million

in value engineering solutions on the Sacramento

Airport Pedestrian Walkway project.

@ in North Carolina a fresh pair of eyes reaped

benefits for workflow efficiency, schedule,

cost and even material sustainability.

@ MyC provided the framework for site supervisors

in our Southampton Living Places team to save

£30,000 annually and upskill our workforce.

@ in our Balfour Beatty Kilpatrick offsite solutions

business, challenging a way of working

resulted in a safer solution that is saving time

and delivering Right First Time results.

Scan or click to read more

about these MyC ideas.

Translating insights into impact

Demonstrating the power of MyC as a listening

channel, read about how our UK HR team used

insights from over 500 colleague ideas to shape

anew digitised onboarding experience.

Find out more on page 56.

Learn how ideas contributed to the development

of our new wellbeing framework.

Find out more on page 37.

Read about the contribution to inclusive

procurement of EDGE, an innovative idea to

support diverse, local and smaller suppliers.

Find out more on page 51.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT

This section of the Strategic

report constitutes the Group’s

Non-financial and sustainability

information statement, produced

to comply with Sections 414CA

and 414CB of the Companies Act.

The non-financial information is

contained within the various

sections of the Strategic report

and is cross-referenced in the

table tohelp stakeholders find

relevantinformation.

Reporting requirement Policies and standards which govern our approach Additional information necessary to understand impact Page

Anti‑corruption

and bribery

matters

Code of Ethics Ethics and compliance p40

Supplier standards

Human rights Modern Slavery Statement Ethics and compliance p40

Code of Ethics

Employees Code of Ethics Health, safety and wellbeing p35

Health and Safety policy Our people

Stakeholder value: employees

Ethics and compliance

p56

p22

p40

Climate‑related

risks and

opportunities

Task Force on Climate-related

FinancialDisclosures (TCFD)

Climate change and Task Force on

Climate-related Financial Disclosures

(TCFD)

p91

Environmental

matters

Our sustainability strategy –

BuildingNewFutures

GHG reporting www.balfourbeatty.com/ILA_2025

Sustainability policy Sustainability: Climate change p44

Sustainable Procurement policy Carbon Reduction Plan (PPN 006) www.balfourbeatty.com/carbonreductionplan

Environmental policy

ISO 14001:2015 and ISO 20400:2017

The Greenhouse Gas Protocol

Social and

community

matters

Our sustainability strategy –

BuildingNewFutures

Social Value policy

Code of Ethics

Social value reporting

Ethics and compliance

Stakeholder value: Communities

Sustainability: Community engagement

www.balfourbeatty.com/ILA_2025

p40

p23

p53

POLICIES

Scan or click to read the

Group’s policies.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

MEASURING OUR FINANCIAL PERFORMANCE

Providing

clarity on

theGroup’s

alternative

performance

measures

The Group includes this

sectioninits Annual Report

andAccounts with the aim of

providing transparency and

clarityon the measures

adoptedinternally to

assessperformance.

Following the issuance of the Guidelines on

Alternative Performance Measures (APMs) by

theEuropean Securities and Markets Authority

(ESMA) in June 2015, the Group has included

this section in its Annual Report and Accounts

with the aim of providing transparency and clarity

on the measures adopted internally to

assessperformance.

Throughout this report, the Group has presented

financial performance measures which are

considered

most relevant to Balfour Beatty and

are used to manage theGroup’s performance.

These financial performance measures are

chosen to provide a balanced view of the Group’s

operations and are considered useful to investors

as these measures provide relevant information

on the Group’s past or future performance,

position or cash flows.

The APMs adopted by the Group are also

commonly used in the sectors it operates inand

therefore serve as a useful aid for investors

tocompare Balfour Beatty’s performance to

itspeers.

The Board believes that disclosing these

performance measures enhances investors’

ability to evaluate and assess the underlying

financial performance of the Group’s operations

and the related key business drivers.

These financial performance measures are also

aligned to measures used internally toassess

business performance in the Group’sbudgeting

process and when determiningcompensation.

Equivalent information cannot be presented by

using financial measures defined in the financial

reporting framework alone.

Operating cash flow (OCF)

The Group uses an internally defined measure

ofOCF to measure the performance of its

earnings-based businesses and subsequently

todetermine the amount of incentive awarded

toemployees in these businesses under the

Group’s Annual Incentive Plan (AIP). This

measure also aligns to one of the vesting

conditions attributable to the Group’s PSP

awards. Refer topage 151.

Readers of the Annual Report

and Accounts are encouraged to

review thefinancial statements

in their entirety.

Performance measures used to

assess the Group’s operations

Underlying profit from operations (PFO)

Underlying PFO is presented before

non-underlying items, finance costs and

investment income and is the key measure used

to assess the Group’s performance in the

Construction Services and Support Services

segments. This is also a common measure used

by the Group’s peers operating in thesesectors.

This measure reflects the returns to the Group

from services provided in these operations that

are generated from activities that are notfinancing

in nature and therefore an underlying pre-finance

cost measure is more suited to assessing

underlying performance.

Underlying profit before tax (PBT)

The Group assesses performance in its

Infrastructure Investments segment using

anunderlying PBT measure. This differs fromthe

underlying PFO measure used to measure the

Group’s Construction Services and Support Services

segments because inaddition to margins

generated from operations, there are returns to

the Investments business which are generated

from the financing element of its projects.

These returns take the form of subordinated debt

interest receivable, interest receivable on PPP

financial assets and fair value gains on certain

investment assets, which are included in the

Group’s income statement in investment income.

These are then offset by the finance cost incurred

on the non-recourse debt associated with the

underlying projects, fair value losses on certain

investment assets and any impairment of

subordinated debt andaccrued interest receivable,

which are included in the Group’s income

statement infinancecosts.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

MEASURING OUR FINANCIAL PERFORMANCE CONTINUED

Measuring the Group’s performance

The following measures are referred to in this

Annual Report and Accounts when reporting

performance, both in absolute terms and also

incomparison to earlier years.

Statutory measures

Statutory measures are derived from the Group’s

reported financial statements, whichhave been

prepared in accordance with UK-adopted

international accounting standards (IFRS) and

inconformity with the requirements of the

Companies Act 2006.

Where a standard allows certain interpretations

to be adopted, the Group has applied its accounting

policies consistently. These accounting policies

can be found onpages 185 to 192.

The Group’s statutory measures take into

account all of the factors, including those thatit

cannot influence (principally foreign currency

fluctuations) and also non-recurring items which

do not reflect the ongoing underlying

performance of the Group.

Performance measures

In assessing its performance, the Group has

adopted certain non-statutory measures because,

unlike its statutory measures, these cannot be

derived directly from its financial statements.

The Group commonly uses the following

measures to assess its performance:

a) Order book

The Group’s disclosure of its order book is aimed

to provide insight into its pipeline of work and

future performance. The Group’s order book is

nota measure of past performance and therefore

cannot be derivedfrom its financial statements.

The Group’s order book comprises the unexecuted

element of orders on contracts that have been

secured. Where contracts are subject to

variations, only secured contract variations are

included in the reported orderbook.

b) Underlying performance

The Group adjusts for certain non-underlying

items which the Board believes assists in

understanding the performance achieved

bytheGroup. These items include:

@ gains and losses on the disposal of businesses

and investments, unless thisispart of a

programme of releasing value from the

disposal of similar businesses orinvestments

such as infrastructure concessions;

@ costs of major restructuring and reorganisation

of existing businesses;

@ costs of integrating newly acquiredbusinesses;

@ acquisition and similar costs related

tobusiness combinations such as

transactioncosts;

@ impairment and amortisation charges

onintangible assets arising on business

combinations (amortisation of acquired

intangible assets); and

@ impairment of goodwill.

These non-underlying costs are excluded from

the Group’s measure of profit to enable

comparability of the Group’s performance from

its ongoing normal day-to-day trading activities.

From time to time, it may be appropriate to

exclude further items that are considered

distortive in size and nature to aid comparability

of the Group’s performance.

Further details of non-underlying items are

provided in Note 10.

A reconciliation has been provided on page 65

toshow how the Group’s statutory results are

adjusted to exclude non-underlying items and

their impact on its statutory financial

information,both as a whole and in respect

ofspecific line items.

Reconciliation of order book to transaction price to be allocated to remaining performanceobligations

2025

£m

2024

£m

Order book (performance measure) 22,678 18,443

Less: Share of orders included within the Group’s joint ventures and

associates (2,664) (2,322)

Less: Estimated orders under framework agreements included in the order

book disclosure (370) –

Add: Transaction price allocated to remaining performance obligations in

Infrastructure Investments* 2,533 2,616

Transaction price allocated to remaining performance obligations for the

Group* (statutory measure) 22,177 18,737

* Refer to Note 4.3.

Where contracts fall under framework

agreements, an estimate is made of orders to be

secured under that framework agreement. This is

based on historical trendsfrom similar framework

agreements delivered in the past and the

estimate of orders included in the order book is

that which is probable to besecured.

In accordance with IFRS 15 Revenue from Contracts

with Customers, the Group is required to disclose

the remaining transaction price allocated to

performance obligations not yet delivered.

Thiscan be found in Note4.3. This is similar

tothe Group’s order book disclosure, however

itdiffers for the following reasons:

@ the Group’s order book includes its share of

orders that are reported within its joint

ventures and associates. In line with section

(e), the Board believes that including orders

that are within the pipeline of its joint ventures

and associates better reflects the size of the

business and the volume of work to be carried

out in the future. This differs from the statutory

measure of transaction price to be allocated to

remaining performance obligations which is

only inclusive ofsecured revenue from the

Group’ssubsidiaries;

@ as stated above, for contracts that fall under

framework agreements, the Group includes in

its order book an estimate of what the orders

under these agreements will be worth. Under

IFRS 15, each instruction under the framework

agreement is viewed as a separate performance

obligation and is included in the statutory

measure of the remaining transaction price

when received but estimates for future

instructions are not;and

@ the Group’s order book does not include revenue

to be earned in its Infrastructure Investments

segment as the value of this part of the business

is driven by the Directors’ valuation of the

Investments portfolio. Refer to section (i).

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Reconciliation of 2025 statutory results to performance measures

Non-underlying items Non-underlying items

2025

statutory

results

£m

Intangible

amortisation

£m

Net release

of provisions

claim on

legacy

project in

Texas

£m

Provision

recognised

for BSA

claims

£m

Gain on

disposal of

Omnicom

Balfour

Beatty

£m

2025

performance

measures

£m

2024

statutory

results

£m

Intangible

amortisation

£m

Net release

of provisions

relating to

Rail

Germany

£m

Recognition

of insurance

for

rectification

works in

London

£m

Provision

recognised

for BSA

claims

£m

Recognition

of charge for

claim on

legacy

project in

Texas

£m

2024

performance

measures

£m

Revenue including share of joint ventures and associates

(performance) 10,767 – – – – 10,767 10,015 – – – – – 10,015

Share of revenue of joint ventures and associates (1,278) – – – – (1,278) (1,781) – – – – – (1,781)

Group revenue (statutory) 9,489 – – – – 9,489 8,234 – – – – – 8,234

Cost of sales (9,021) – (49) 37 – (9,033) (7,88 3) – (26) (43) 83 52 (7,817)

Gross profit 468 – (49) 37 – 456 351 – (26) (43) 83 52 417

Gain on disposals of interests in investments 32 – – – – 32 43 – – – – – 43

Amortisation of acquired intangible assets (3) 3 – – – – (4) 4 – – – – –

Other operating expenses (277) – – – (23) (300) (276) – 5 – – – (271)

Group operating profit 220 3 (49) 37 (23) 188 114 4 (21) (43) 83 52 189

Share of results of joint ventures and associates 64 – – – – 64 59 – – – – – 59

Profit from operations 284 3 (49) 37 (23) 252 173 4 (21) (43) 83 52 248

Investment income 80 – – – – 80 82 – – – – – 82

Finance costs (41) – – – – (41) (41) – – – – – (41)

Profit before taxation 323 3 (49) 37 (23) 291 214 4 (21) (43) 83 52 289

Taxation (59) (2) 12 (9) 6 (52) (36) (1) (2) 11 (21) (13) (62)

Profit for the year 264 1 (37) 28 (17) 239 178 3 (23) (32) 62 39 227

Reconciliation of 2025 statutory results to performance measures bysegment

Non-underlying items Non-underlying items

Profit/(loss) from operations

2025

statutory

results

£m

Intangible

amortisation

£m

Net release

of provisions

claim on

legacy

project in

Texas

£m

Provision

recognised

for BSA

claims

£m

Gain on

disposal of

Omnicom

Balfour

Beatty

£m

2025

performance

measures

£m

2024

statutory

results

£m

Intangible

amortisation

£m

Net release

of provisions

relating to

Rail

Germany

£m

Recognition

of insurance

for

rectification

works in

London

£m

Provision

recognised

for BSA

claims

£m

Recognition

of charge for

claim on

legacy

project in

Texas

£m

2024

performance

measures

£m

Segment

Construction Services 182 1 (49) 37 – 171 87 1 (21) (43) 83 52 159

Support Services 145 – – – (23) 122 93 – – – – – 93

Infrastructure Investments 3 2 – – – 5 32 3 – – – – 35

Corporate activities (46) – – – – (46) (39) – – – – – (39)

Total 284 3 (49) 37 (23) 252 173 4 (21) (43) 83 52 248

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

MEASURING OUR FINANCIAL PERFORMANCE CONTINUED

Measuring the Group’s performance continued

Performance measures continued

c) Underlying profit before tax

As mentioned on page 63, the Group’s Infrastructure Investments segment is assessed on an

underlying profit before tax (PBT) measure. Thisis calculated as follows:

2025

£m

2024

£m

Underlying profit from operations (section (b) and Note 5) 5 35

Add: Subordinated debt interest receivable* 26 17

Add: Interest receivable on PPP financial assets* – 2

Add: Interest receivable on other infrastructure concession assets* 1 –

Less: Fair value loss on investment asset* – (2)

Less: Non-recourse borrowings finance cost* (14) (12)

Add/(Less): Net (impairment)/impairment reversal of subordinated debt

andaccrued interest receivable* (2) 14

Underlying profit before tax (performance) 16 54

Non-underlying items (section (b) and Note 5) (2) (3)

Statutory profit before tax 14 51

* Refer to Note 8 and Note 9.

d) Underlying earnings per share

In line with the Group’s measurement of underlying performance, the Group also presents its earnings

per share (EPS) on an underlying basis. The table below reconciles this to the statutory earnings per share.

Reconciliation from statutory basic EPS to performance EPS

2025

Pence

2024

Pence

Statutory basic earnings per ordinary share 52.6 34.2

Amortisation of acquired intangible assets after tax 0.3 0.6

Other non-underlying items after tax (5.3) 8.8

Underlying basic earnings per ordinary share (performance) 47.6 43.6

e) Revenue including share of joint ventures and associates (JVAs)

The Group uses a revenue measure which is inclusive of its share of revenue generated from its JVAs.

As the Group uses revenue as a measure of the level of activity performed by the Group, the Board

believes that including revenue that is earned from its JVAs better reflectsthe size of the business

andthe volume of work carried out and more appropriately compares to PFO.

This differs from the statutory measure of revenue which presents Group revenue from its subsidiaries.

A reconciliation of the statutory measure of revenue to the Group’s performance measure is shown

inthe tables in section (b). A comparison ofthe growth rates in statutory and performance revenue

canbe found in section (j).

f) Operating cash flow (OCF)

The table below reconciles the Group’s internal performance measure of OCF to the statutory measure

of cash generated from operating activities as reported in the Group statement of cash flows (page 182).

Reconciliation from statutory cash generated from operations to OCF

2025

£m

2024

£m

Cash generated from operating activities (statutory) 656 265

Add back: Pension payments including deficit funding (Note 31.2) 10 30

Less: Repayment of lease liabilities (including lease interest payments)

(Note 29) (77) (66)

Add: Operational dividends received from joint ventures and associates

(Note 20.5) 59 71

Add back: Cash flow movements relating to non-operating items 33 13

Less: Operating cash flows relating to non-recourse activities (25) (24)

Operating cash flow (OCF) (performance) 656 289

The Group includes/excludes the following items to provide a view of cash flows that aligns with

management’s internal measure of operating cash flow performance:

Pension payments including deficit funding (£10 million): the Group has excluded pension payments

which are included in the Group’s statutory measure of cash flows from operating activities from its

internal OCF measure as these primarily relate to deficit funding of the Group’s main pension fund,

Balfour Beatty Pension Fund (BBPF). The payments made for deficit funding are in accordance with

anagreed journey plan with the trustees of the BBPF and are not directly linked to the operational

performance ofthe Group.

Repayment of lease liabilities (including lease interest payments) (£77 million outflow): the payments

made for the Group’s leasing arrangements are included in the Group’s OCF measure as these

payments are made to third-party suppliers for the lease of assets that are used to deliver services to

the Group’s customers, and hence to generate revenue. Under IFRS, these payments are excluded

from the Group’s statutory measure of cash flows from operating activities as these are considered

debt in nature under accounting standards.

Operational dividends received from joint ventures and associates (£59 million inflow): dividends received

from joint ventures and associates which are generated from non-disposal activities are included in the

Group’s OCF measure as these are cash returns to the Group from cash flows generated from operating

activities within joint ventures and associates. Under IFRS, these returns are classified as investing activities.

Cash flow movements relating to non-operating items (£33 million): the Group’s OCF measure excludes

certain working capital movements that are not directly attributable to the Group’s operating activities.

Operating cash flows relating to non-recourse activities (£25 million): the Group’s OCF measure is

specifically targeted to drive performance improvement in the Group’s earnings-based businesses and

therefore any operating cash flows relating to non-recourse activities are removed from this measure.

Under IFRS, there is no distinction between recourse and non-recourse cash flows.

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g) Recourse net cash/borrowings

The Group also measures its performance based on its net cash/borrowings position at the year end.

This is analysed by excluding elements that are non-recourse to the Group as well as lease liabilities.

Non-recourse elements are cash and debt that are ring-fenced within certain infrastructure concession

project companies and are excluded from the definition of net debt set out in the Group’s borrowing

facilities. In addition, lease liabilities which are deemed to be debt in nature under statutory measures

are also excluded from the Group’s definition of net cash/borrowings as these are viewed to be

operational in nature reflecting payments made in exchange for use of assets.

Net cash/borrowings reconciliation

2025

statutory

£m

Adjustment

£m

2025

performance

£m

2024

statutory

£m

Adjustment

£m

2024

performance

£m

Total cash within

theGroup 1,860 (193) 1,667 1,558 (265) 1,293

Cash and cash equivalents

– infrastructure concessions 193 (193) – 265 (265) –

– other 1,667 – 1,667 1,293 – 1,293

Total debt within

theGroup (1,023) 802 (221) (1,112) 762 (350)

Borrowings

– non-recourse loans (604) 604 – (600) 600 –

– other (221) – (221) (350) – (350)

Lease liabilities (198) 198 – (162) 162 –

Net cash 837 609 1,446 446 497 943

h) Average net cash/borrowings

The Group uses an average net cash/borrowings measure as this reflects its financing requirements

throughout the year. The Group calculates its average net cash/borrowings based on the average

opening and closing figures for each month through the year.

The average net cash/borrowings measure excludes non-recourse cash and debt and lease liabilities,

andthis performance measure shows average net cash of £1,212 million for 2025 (2024: £766 million).

Using a statutory measure (inclusive of non-recourse elements and the lease liabilities recognised)

givesaverage net cash of £642 million for 2025 (2024: £441 million).

i) Directors’ valuation of the Investments portfolio

The Group uses a different methodology to assess the value of its Investments portfolio. As described

on pages 33 and 34, the Directors’ valuation for most of the investments in the portfolio has been

undertaken using forecast cash flows for each project on an asset by asset basis, based on progress to

date and market expectations of future performance. These cash flows have been discounted using

different discount rates depending on project risk and maturity, reflecting secondary market transaction

experience. As such, the Board believes that this measure better reflects the potential returns to the

Group from those investments.

The Directors have valued the Investments portfolio at £1.07 billion at year end (2024: £1.25 billion).

The Directors’ valuation will differ from the statutory carrying value of these investments, which are accounted

for using the relevant standards in accordance with IFRS rather than a discounted cash flow approach.

Reconciliation of the net assets of the Infrastructure Investments segment to the comparable statutory

measure of the Investments portfolio included in the Directors’ valuation

2025

£m

2024

£m

Net assets of the Infrastructure Investments segment (refer to Note 5.1) 568 626

Less: Net assets not included within the Directors’ valuation – Housing

division (42) (60)

Comparable statutory measure of the Investments portfolio under IFRS 526 566

Comparison of the statutory measure of the Investments portfolio to its performance measure

2025

£m

2024

£m

Statutory measure of the Investments portfolio (as above) 526 566

Difference arising from the Directors’ valuation being measured on a

discounted cash flow basis compared to the statutory measure primarily

derived using a combination of the following IFRS bases:

– historical cost

– amortised cost

– fair value 543 688

Directors’ valuation (performance measure) 1,069 1,254

The difference between the statutory measure and the Directors’ valuation (performance measure) of

the Group’s Investments portfolio is not equal to the gain on disposal that would result if the portfolio

was fully disposed at the Directors’ valuation. This is because the gain/loss on disposal would be

affected by the recycling of items which were previously recognised directly within reserves, which

arematerial and can alter the resulting gain/loss on disposal.

The statutory measure and the Directors’ valuation are fundamentally different due to the different

methodologies used to derive the valuation of these assets within the Investments portfolio.

Balfour Beatty plc | Annual Report and Accounts 2025

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2025 statutory growth compared to performance growth

Construction Services

UK US Gammon Total

Support

Services

Infrastructure

Investments Total

Revenue (£m)

2025 statutory 3,112 4,477 – 7,5 89 1,427 473 9,489

2024 statutory 3,011 3,619 – 6,630 1,210 394 8,234

Statutory growth 3% 24% – 14% 18% 20% 15%

2025 performance* 3,112 4,509 1,090 8,711 1,427 629 10,767

2024 performance retranslated* 3,011 3,536 1,508 8,055 1,210 594 9,859

Performance CER growth 3% 28% (28)% 8% 18% 6% 9%

Order book (£bn)

2025 8.9 7.8 2.0 18.7 4.0 – 22.7

2024 6.2 7.1 1.9 15.2 3.2 – 18.4

Growth 44% 10% 5% 23% 25% – 23%

2025 8.9 7.8 2.0 18.7 4.0 – 22.7

2024 retranslated 6.2 6.6 1.7 14.5 3.2 – 17.7

CER growth 44% 18% 18% 29% 25% – 28%

* Performance revenue is underlying revenue including share of revenue from joint ventures and associates as set out in section (e).

Measuring the Group’s performance continued

Performance measures continued

i) Directors’ valuation of the Investments portfolio continued

As referred to in the Strategic report on pages 33 and 34, the Directors’ valuation for most investments

is calculated using discounted cash flows. Inderiving these cash flows, assumptions have been made

and different discount rates used which are updated at each valuation date.

Unlike the Directors’ valuation, the assets measured under statutory measures using the appropriate

IFRS accounting standards are valued using a combination of the following methods:

@ historical cost;

@ amortised cost; and

@ fair value for certain assets and liabilities within the PPP portfolio, for which some assumptions are

set at inception and some are updated ateach valuation date.

There is also an element of the Directors’ valuation that is not represented by an asset in the Group’s

balance sheet. This relates to the management services contracts within the Investments business

that are valued in the Directors’ valuation based on the future income stream expected from these contracts.

j) Constant exchange rates (CER)

The Group operates across a variety of geographic locations and in its statutory results, the results

ofits overseas entities are translated into the Group’s presentational currency at average rates of

exchange for theyear. The Group’s key exchange rates applied in deriving its statutory results are

shown in Note 3.

To measure changes in the Group’s performance compared with the previous year without the effects

of foreign currency fluctuations, the Group provides growth rates on a CER basis. These measures

remove the effects of currency movements by retranslating the prior year’s figures at the current

year’s exchange rates, using average rates for revenue and closing rates for order book. A comparison

of the Group’s statutory growth rate to the CER growth rate is provided in the table below:

MEASURING OUR FINANCIAL PERFORMANCE CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

CHIEF FINANCIAL OFFICER’S REVIEW

Throughout this report, the Group has presented financial

performance measures which are considered most relevant

to BalfourBeatty and are used to manage the Group’s

performance. These financial performance measures are

chosen to provide abalanced view of the Group’s operations

and are considered useful to investors as these measures

provide relevant information on the Group’s past or future

performance, position or cash flows. These financial

performance measures are also aligned to measures used

internally to assess business performance in the Group’s

budgeting process and when determining compensation. An

explanation of the Group’s financial performance measures

and appropriate reconciliations to its statutory measures are

provided in the Measuring Our Financial Performance

section. Non-underlying items are the cause of the

differences between underlying and statutory profitability.

Additionally, revenue includes the Group’s share of revenue

of joint ventures and associates.

GROUP FINANCIAL SUMMARY

Balfour Beatty’s underlying results in 2025 show

further progress at a Group level. Revenue increased

by 8% (9% at constant exchange rate (CER)) to

£10,767 million (2024: £10,015 million) driven by

increases in US Construction and Support Services,

partially offset by lower Gammon volumes. Statutory

revenue, which excludes joint ventures and associates,

was £9,489 million (2024: £8,234 million).

The underlying profit from operations for the year

increased to £252 million (2024: £248 million)

driven by an increase in PFO from the earnings-based

businesses, partially offset by a reduction in

Infrastructure Investments. Statutory profitfrom

operations was £284 million (2024:£173million).

Net finance income of £39 million (2024: £41 million)

reduced as a result of lower interest rates and a

2024 impairment write back of subordinated debt

not being repeated. Underlying pre-tax profit was

£291 million (2024: £289 million). The taxation charge

on underlying profits decreased to £52million

(2024: £62 million), primarily reflecting the recognitio

of previously unrecognised brought-forward

trading losses and a lower tax charge on the

2025 disposals. The 2025 disposals, mainly UK

assets, benefited from additional tax reliefs that

were not available on the 2024 disposal, which

related to a US asset. This resulted in underlying

profit after tax of £239 million (2024: £227 million).

Total statutory profit after tax for the year was

£264 million (2024: £178 million), as a result of

the net effect of non-underlying items.

Underlying basic earnings per share were

47.6pence (2024: 43.6 pence), which, along with

non-underlying earnings per share of 5.0 pence

(2024: loss of 9.4 pence), gave a total basic earnings

per share of 52.6 pence (2024: 34.2 pence).

Thisincluded the benefit from the basic weighted

average number of ordinary shares reducing to

499 million (2024: 521 million) as a result of the

Group’s share buyback programme.

2025 PERFORMANCE

2025 delivered

profitable growth

@ Full year expectations

delivered with profitable

growth and increased

cash

@ 9% EPS growth

Outlook for

profitablegrowth

@ Record £23 billion

orderbook

@ Momentum in chosen

growth markets

Consistent

shareholder returns

@ Attractive and

sustainable shareholder

returns

@ £200 million

sharebuyback

Strong performance and confident outlook

Underlying profit/(loss) fromoperations

2025

£m

2024

£m

UK Construction 110 81

US Construction 25 40

Gammon 36 38

Construction Services 171 159

Support Services 122 93

Earnings-based businesses 293 252

Infrastructure Investments pre-disposalsoperating(loss)/profit (31) (8)

Infrastructure Investments gain on disposals 36 43

Corporate activities (46) (39)

Total underlying profit from operations 252 248

2 Before non-underlying items (Note 9).

Profitable

growth from

earnings-

based

businesses

Philip Harrison

Chief Financial Officer

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED

Non‑underlying items

The Board believes non-underlying items should

be separately identified on the face of the income

statement to assist in understanding the

underlying financial performance achieved by the

Group. Non-underlying items after taxation were

a net credit of £25 million for the period (2024:

net charge of £49 million). This included three

significant items.

Firstly, the Group has recognised a £49 million

credit in relation to a US Civils project completed

in 2012. In 2024, the Group recognised a

provision of £52 million for a claim received from

the North Texas Tollway Authority (NTTA) on a

project to provide design and build services in

relation to the extension of NTTA’s President

George Bush Turnpike Highway (SH161 in Texas)

through a joint operation formed with Fluor

Enterprise Inc. in which the Group owned a 40%

share. This project completed in 2012.

Thisprovision, net of insurance recoveries,

represented damages awarded to NTTA through

a jury verdict in November 2024, and also

included pre-judgment interest and legal costs.

This charge was recognised in the Construction

Services segment in 2024 and included within

the Group’s non-underlying results due to the

size of the provision. The Group maintained the

view that these damages are a result of design

elements of the contract, which were performed

by subcontractors to the joint operation. In June

2025, an all-party settlement was reached

between NTTA, the joint operation, as well as its

design subcontractors. The Group’s share of the

settlement was fully funded by its insurers

resulting in no cost to the Group. As such, the

Group has released this provision in full after

taking into account legal costs incurred.

Secondly, a charge of £37 million has been

recognised in the year in relation to the Group’s

obligations under the UK Building Safety Act

(BSA). In 2024, following further developments

and clarifications in the legal landscape of the

Building Safety Act (BSA), introduced in 2022,

progression of the Group’s investigation and due

diligence as well as adjudications on claims

received to date, the Group reassessed its

provision for BSA claims which resulted in an

increase in the provision of £83 million. The

provision did not include potential recoveries

from third parties. The increase was recognised

in non-underlying due to its size and the nature of

the cost, which arose from a change in legislation.

In 2025, the Group increased its provision by

£37million as a result of new claims received in

the period, settlements and reassessments to

previously provided claims together with legal

costs incurred. Consistent with the treatment

adopted in 2024, this charge was recognised

within non-underlying items and in the

Construction Services segment.

Finally, during 2025, the Group completed the

disposal of Omnicom Balfour Beatty, its specialist

rail measurement hardware and intelligent

software business, for a consideration of

£24million to Hitachi Rail. After deducting cost

of disposal, the Group recorded a gain on

disposal of £23 million within its non-underlying

results in the year.

Further detail is provided in Note 10.

Cash flow performance

The Group’s net cash increased by £503 million in the year (2024: £101 million), resulting in a year end

net cash position of £1,446 million (2024: £943 million), excluding non-recourse net borrowings and

lease liabilities. Cash from operations, which included a large working capital inflow, was partially

offset by increased shareholder returns. Capital expenditure also increased in 2025, due in part to

further investment in the Power business in the UK and the US Civils business, where new equipment

was purchased to support the Texas division’s strategy to contract outside of joint ventures.

Cash flow performance

2025

£m

2024

£m

Operating cash flows before working capital movements and pension

deficitpayments 297 208

Working capital inflow / (outflow) 408 99

Pension deficit payments

(10) (30)

Cash from operations 695 277

Lease payments (including interest paid) (77) (66)

Dividends from joint ventures and associates

∞

59 71

Capital expenditure (49) (28)

Share buybacks (126) (101)

Dividends paid (64) (61)

Infrastructure Investments

– disposal proceeds 120 43

– new investments (29) (28)

Other (26) (6)

Net cash movement 503 101

Opening net cash* 943 842

Closing net cash* 1,446 943

* Excluding infrastructure investments (non-recourse) net borrowings and lease liabilities.

+ Including £2 million (2024: £2 million) of regular funding.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Working capital

A £408 million working capital inflow (2024: £99 million) was driven by increased revenue and, advanced

receipts on several new projects in US Construction and Support Services, and by working capital timing

in UK Construction.

Working capital flows^

2025

£m

2024

£m

Inventories 2 (34)

Net contract assets 376 165

Trade and other receivables (217) (225)

Trade and other payables 264 (6)

Provisions (17) 199

Working capital inflow

408 99

^ Excluding impact of foreign exchange.

Including the impact of foreign exchange and non-operating items, negative (i.e. favourable) current

working capital increased to £1,639 million (2024: £1,228 million), equating to 17.3% (2024: 14.9%) of

revenue. Working capital continues to be dependent on contract mix and the timing of project starts

and completions, and in the medium term, the Group expects negative working capital as a percentage

of revenue to be in the range of 15-18%.

Net cash/borrowings

The Group’s average net cash increased to £1,212 million in 2025 (2024: £766 million). The Group’s year

end net cash position, excluding non-recourse net borrowings and lease liabilities, was £1,446 million

(2024: £943 million).

Non-recourse net borrowings, held in Infrastructure Investments entities consolidated by the Group,

were £411 million (2024: £335 million). The balance sheet also included £198 million for lease liabilities

(2024: £162 million). Statutory net cash at 31 December 2025 was £837 million (2024 £446 million).

Share buyback

On 6 January 2025, Balfour Beatty commenced an initial £50 million tranche of its 2025 share buyback

programme, which was subsequently increased following the release of its 2024 full year results to

£125million on 12 March 2025. The Group completed the 2025 share buyback programme on

12December 2025 having purchased 24.2 million shares, which were held in treasury. These shares

were subsequently cancelled on 24 December 2025. The Group commenced the initial £50 million

tranche of its 2026 share buyback programme on 5 January 2026. As announced today, the Group

intends to buy back a total of £200 million of shares during the 2026 phase of its multi-year share

buyback programme.

Banking facilities

The Group’s £450 million core revolving credit facility (RCF) extends to June 2028. The RCF remains

aSustainability Linked Loan, and the Group continues to be incentivised to deliver annual measurable

performance improvement in three key areas: Carbon Emissions, Social Value generation and an

independent Environment, Social and

Governance (ESG) rating score. The RCF

remained undrawn at 31 December 2025.

The Group retains an additional £30 million

bilateral committed facility on similar terms to the

core RCF. This facility has a maturity of

December 2027. At 31 December 2025 the

bilateral committed facility remained undrawn.

Going concern

The Directors have considered the Group’s

medium-term cash forecasts and conducted

stress-test analysis on these projections in order

to assess the Group’s ability to continue as a

going concern. Having also made appropriate

enquiries, the Directors consider it reasonable to

assume that the Group has adequate resources

to continue for the period of at least 12 months

from the date of approval of the financial

statements and, for this reason, have continued

to adopt the going concern basis in preparing the

full year Group financial statements. Further

detail is provided in Note 1.3 Going Concern.

Pensions

In early 2026, the Group reached agreement with

the trustees of the Balfour Beatty Pension Fund

(BBPF) over the triennial valuation of the Defined

Benefit section of the BBPF as at 31 March 2025.

As a result of the collaborative working between

the company and the trustees and the substantial

financial commitments made by the Company

over many years, the BBPF is in a strong

position. Consistent with prior valuations the

Group have agreed a journey plan approach to

managing the BBPF. The Group made a one-off

contribution of £30 million in February 2026, as

stipulated in the recent agreement, and no

further contributions are expected to be made.

The Company and the trustees have agreed that

once the Defined Benefit section moves into

surplus, as measured on an agreed set of

parameters, further surplus can be used by the

Company to meet its existing obligations to the

Defined Contribution section of the BBPF. Given

the current strong position of the BBPF, the

Group is expecting to start receiving a cash

benefit from the surplus by 2027. In certain

circumstances, were the funding level in the

Defined Benefit section to fall below certain

pre-agreed thresholds, surplus offset in this way

would need to be repaid to the Defined Benefit

section by the Company.

The Company and trustees of the Railways

Pension Scheme (RPS) agreed the 31 December

2022 formal valuation in the first half of 2024

and, as a result, Balfour Beatty agreed to

continue making deficit contributions of £6

million per annum until February 2025. The next

formal triennial funding valuation of the RPS is

due with effect from 31 December 2025.

Discussions between the Group and the trustees

to agree this triennial valuation are ongoing.

The Group’s balance sheet includes net

retirement benefit liabilities of £48 million (2024:

net assets of £2 million) as measured on an IAS

19 basis, comprising the BBPF (£9 million), RPS

(£7 million) and other schemes (£32 million).

Dividend

The Board is committed to a sustainable ordinary

dividend that is expected to grow over time,

targeted at a pay-out ratio of 40% of underlying

profit after tax excluding gains on disposal of

Investments assets.

Following the 4.2 pence per ordinary share

interim dividend declared at the half year, the

Board is recommending a final dividend of

9.8pence per share, giving a total recommended

dividend for the year of 14 pence per share

(2024: 12.5 pence per share).

Philip Harrison

Chief Financial Officer

10 March 2026

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

RISK MANAGEMENT

Navigating

the future

Introduction

The Group’s Enterprise Risk Management (ERM)

framework remains key in providing a consistent

platform for monitoring and responding to the

potential exposures faced by the business. As

the Group focuses on growth and a continuing

shift into new markets, undertaking more complex

and significant infrastructure projects, the way in

which key risk themes are monitored across the

business and the consistent identification in how

these manifest at an Operational level is essential

to ensure the organisation has certainty in meeting

its objectives.

In 2025, a more formalised approach to linking

Strategic Business Unit (SBU) level risks to

related Group (and Principal) risks has supported

more accurate reporting of business-level trends

and how they influence the Group risk

assessment. This reporting ensures that risk

across each of the business sectors and

geographies is more clearly understood and

reflected through the lens of the Group risk profile.

This further supports improvements made in

2024 to the biannual risk reporting process that

ensure specific responses on how risks are

assessed at SBU level for the Group key risk

themes, and any movements, trends or change

in conditions as reflected through business-level

risk registers.

The Group’s risk process continues to provide a

consistent approach and taxonomy across the

organisation. As the integration of the ERM

framework evolves, and risk management

maturity within the business improves, the

central Group Risk Management function

maintains oversight to ensure processes remain

effective and continues to ensure Group

adherence to regulatory requirements and good

practice in its approach to identifying, assessing,

responding to and monitoring risk.

OUR RISK MANAGEMENT PROCESS

Balfour Beatty’s simple four-step process

ensures the consistent identification,

assessment, response to, and monitoring of risk

across the organisation. Utilising this standard

process from project operations up to Group level

ensures risks are captured, assessed and

communicated concisely at each level of the

organisation. Embedding this process into

operational and business environments ensures

the consideration of risk and opportunity remains

central to making decisions.

1. Identify

@ Objective-focused risk identification

linked to operational, business and

Group objectives

@ Identification of core drivers

(causes)and anticipated

outcomes(consequences)

@ Captures current controlenvironment

anditseffectiveness

2. Assess

@ Assessment of the impact of the risk

and the probability of it occurring,

using the Group Probability Impact

(PI) Matrix

@ Assessment is based onthe

effectiveness of current controls

@ Consistent assessment utilising

Group PI Matrix allows risks and

opportunities to beprioritised

3. Respond

@ Response type ‘Accept’ or ‘Manage

Further’ is assigned to each risk and

opportunity based on current

assessment and appetite

@ Response of ‘Manage Further’ drives

identification of actions

@ Actions are assigned ownership and

due dates and are tracked for

completion alongside risk exposure

4. Monitor

@ Risk environment monitored to

identify change in, or emergence of,

causes and consequences

@ Risk response is reviewed in line with

current risk assessment

@ Completion of actions and their effect

on reducing exposure

BALFOUR BEATTY’S RISK MANAGEMENT PROCESS

Simple and consistent application of the risk management process across the Group.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

CIRCLES OF RISK

Balfour Beatty’s Circles of Risk remain an essential

control in supporting early risk-based discussions

on new pursuits the Group undertakes, driving

teams to consider the key risks and set out

response types to such risks as the opportunity

evolves through approval gates.

The guidance reflects experience from past delivery

and lessons learnt across a diverse customer

base, with proposed controls aligned to the

Group’s operating and commercial principles.

This approach allows Balfour Beatty to make

decisions in the context of its risk appetite and

stay ahead of potential exposures by ensuring:

@ the opportunity aligns to Group objectives,

business growth strategies and defined

risktolerances;

@ all pursuits are assessed consistently so that

potential opportunities that do not fit with

approved business objectives are qualified

out;and

@ appropriate mitigation strategies are developed

in order to pursue the opportunity whilst

protecting the Group’s operating and

commercial principles.

Supply

chain

Geography Contract Customer Team Project

BALFOUR BEATTY’S CIRCLES OF RISK

“ Balfour Beatty’s Circles

ofRisk remain an essential

control in supporting early

risk-based discussions

onnew pursuits the

Groupundertakes.”

Balfour Beatty plc | Annual Report and Accounts 2025

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RISK MANAGEMENT CON TINUED

THE BALFOUR BEATTY RISK MANAGEMENT FRAMEWORK

Ensuring risk management is embedded at each level of the organisation.

GROUP

RISK

Strategic Risk

OPERATIONAL RISK

Project/Contract/Asset Risk

EXECUTIVE COMMITTEE

Escalate

Cascade

BUSINESS RISK

Strategic Business Units/

BusinessUnits/Enabling Functions

Risk Process

BOARD | AUDIT AND RISK COMMITTEE

Governance and oversight

The Board maintains overall responsibility for risk

management and reviews the Group risk profile

at half and full year including those risks identified

as Principal to Balfour Beatty, as well as the

Emerging Risks identified for the Group. The

Board also ultimately determines the nature and

extent of the risk the Company is willing to

takein the pursuit of its longer-term strategic

objectives. The Directors continue to review the

overall effectiveness of the risk management

framework and internal control systems, including

the financial, operational and compliance

processes and controls that are in place to

prevent the occurrence or limit the impacts

ofrisks. Since 2024, the Group has been

implementing a revised approach to improve

theconsistency in how internal controls are

documented, and how each business reviews

effectiveness of internal controls, with the

Auditand Risk Committee ultimately providing

independent oversight of the effectiveness of

the Group’s risk management and associated

internal control environment. In response to

requirements of Provision 29 of the Corporate

Governance Code, the Audit and Risk Committee

(ARC) will receive an overview from selected

business leaders on how their business complies

with the requirements of the ERM framework

and ensures management review and discussion

on business-level risk profiles, supporting the ARC

in their review of risk management effectiveness.

Group risk management

The Group’s risk management framework allows

the Group Chief Executive, alongside the Executive

Committee (ExCom), to monitor the risk profile of

the business, supported by the half year and full

year review processes held with businesses and

Enabling Functions, and validated through the

Executive Risk Steering Group (ERSG).

Executive sponsorship for risk management is

provided by the ERSG, which provides valuable

input to Group risk themes based on profiles

within their respective businesses and functions

and seeks to collectively validate any material

changes to the Group risk profile. Visibility of core

and common themes identified through the

Operational and Business levels of the Group

inform half and full year reviews. Enhancements

made in 2024 to the half year and full year risk

reporting process enabled more formal tracking

and sought specific business unit updates on

core risk themes. This has continued in 2025,

with formalised reporting of Group-linked risks

facilitating ease of review for Group Risk Owners.

Balfour Beatty plc | Annual Report and Accounts 2025

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GROUP RISK APPETITE

The Group risk appetite was reviewed and

refreshed with the Board in 2025, reflecting the

amount of risk the Group in willing to take through

in pursuit of its objectives. The approach for

setting risk appetite has shifted from linking to

the Build to Last strategy; risk appetite, across

four different levels has been set against each of

the Principal Risks identified for the Group. This

better supports discussions around the risk

response type the business undertakes in its

management of Principal Risks and to set

‘guardrails’ around the review of risk assessment

in line with appetite.

EMERGING RISKS

Each Strategic Business Unit (SBU) and Enabling

Function (EF) is requested to highlight any new

Emerging Risks as part of the Group’s biannual

half year and full year risk submissions. The

functionality in the Group’s ERM system IRIS to

flag Emerging Risks enables greater visibility,

allowing SBUs and EFs to monitor Emerging

Risks as part of their existing review process of

their risk profiles. This is used to inform where

Emerging Risks are relevant at Group level and

can be tracked alongside Group-level risks.

Balfour Beatty considers Emerging Risks in relation

to their longer-term impact and shorter-term risk

velocity and examines them in the context of its

viability statement. The Group has defined

Emerging Risks as those risks faced by the

business that:

@ are likely to be of significant scale beyond a

three-year timeframe;

@ have the velocity to significantly increase in

severity within the three-year period; and/or

@ are not sufficiently defined or if there is not

enough information developed to enable an

informed assessment to be made of their

impact and whether they pose a threat or an

opportunity to the Group.

The discussion and review of Emerging Risks

includes ‘horizon scanning’ activities around

potential uncertainties that are not sufficiently

defined or developed to enable an informed

assessment to be made of their impact on the

ongoing viability of the Group and whether they

pose a threat or an opportunity.

CONSISTENT ASSESSMENT OFRISK

The Group-wide Probability Impact Matrix continues

to support a consistent assessment of all risks

identified in the business in terms of their impact

across delivery, financial, and health, safety and

sustainability impact categories. This impact is

assessed alongside the likelihood of occurrence,

providing an overall risk rating that supports the

prioritisation and comparison of risk and

opportunity events at Operational, Business and

Group level. This overall rating is assessed as the

current risk rating, which is based on controls

that are in place and effective for managing the

risk. Response to risks is determined based on

the current risk exposure, the anticipated effect

that any additional actions to manage the risk

may have, which at Group is then considered in

line with risk appetite.

Business risk management

A consistent approach to the management of risk

in both UK and US-based businesses is essential

to gaining insight into business risk and how it

rolls up to Group level. The tracking of specific

key risk trends at the half year and full year risk

process ensures the linkage between Strategic

Business Unit (SBU) risk profiles and the Group

risk profile is well understood. This includes the

tracking of Enabling Function risk profiles and

how they inform related Group and

PrincipalRisks.

Operational risk

Alignment of risk management requirements to

the Gated Business Lifecycle remains essential

in ensuring early sight of risk profiles at tender

stage, and to monitor and respond to risks

throughout delivery phases. Risk reporting

continued to evolve in 2025, enabling category-

based insight across the operational portfolio for

relevant subject matter experts who own related

Functional or Group risks to gain insight into

trends, aiding timely escalation of project risk to

business leadership. The capture and analysis of

realised risk data remains a focus to ensure risks

can be better anticipated and assessment in the

future and to feed into risk libraries where

appropriate. The drive to improve data quality

remains continuous, supported by internal and

operational audit activities and championed by

senior leadership manifested through clear

expectations on ‘management responsibility’

bythe Risk function and ExCom.

Balfour Beatty plc | Annual Report and Accounts 2025

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RISK MANAGEMENT CON TINUED

CONSISTENT ASSESSMENT OFRISK

CONTINUED

The revision of risk assessments and associated

risk ratings for Group risks remains subject to

robust review, with careful consideration of

internal and external factors, and current control

environments to inform any change in overall risk

assessment. Reduction of an overall risk rating

will only be made following a continued period of

certainty whereby movements of internal and

external factors are less volatile, and controls are

known to be well-established and effective. The

work undertaken in 2025 on the Group’s Internal

Control framework continues to provide improved

validation of current risk assessments – ensuring

that controls that are embedded and operating

effectively are used to inform assessment made

by risk owners.

The Group continues to be prudent in ensuring

any exposure presented through economic

uncertainty and ongoing political and societal

factors are well understood and well managed.

Reviews of the Group risk profile have continued

to monitor where these drivers manifested within

existing Group risks, and the half year and full

year process undertaken with each business area

has evolved to track movements and drivers

associated with specific Group risk themes,

aligning to Principal Risks.

Principal Risks

Health and safety p77

Contracting terms and conditions p78

Project delivery p79

Joint ventures and alliances p80

Cybersecurity p81

People and talent p82

Sustaining focus on

Build to Last strategy p83

Financial strength p84

Supply chain p85

Code of Ethics compliance p86

Legal and regulatory p87

Legacy pension liabilities p87

Economic uncertainty p88

Delivering sustainability

commitments p89

OUR PRINCIPAL RISKS

Identifying risks that could impact on the

achievement of business and strategic

objectives, and consistently assessing and

responding to these, remains essential to how

the Group balances risk-taking with risk appetite.

Decision making for the business is based on a

detailed understanding of the exposures faced by

the organisation, carried out through Business-

level and Group-level reviews. Linking Business-

level risks that relate to the Group’s Principal

Risks ensures a comprehensive view is taken to

inform the current exposure and any trends in

risk movement. The Board is able to undertake

an assessment of the overall profile and

considers whether this represents new,

increased or decreased threats and the level of

response required to manage them. The risk

profile is informed by both interconnected and

discrete risks at strategic, business and

operational level and focuses on understanding

the worst-case scenarios that could threaten the

Group’s strategy, business model and ongoing

viability; see pages 8, 9 and 90. The Principal

Risks faced by the Group are described on pages

77 to 89.

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HEALTH AND SAFETY

Description and impact Causes Mitigation

The Group works on and delivers complex and at

times, hazardous projects which require continuous

monitoring and management of safety risks, and as

well as ensuring the health and wellbeing of its

employees and those it works with.

What impact it might have

Failure to effectively manage these risks presents

the potential for significant injury, or impact on the

health and wellbeing of employees, subcontractor

staff, third parties or members of the public. It also

presents the threat of potential criminal

prosecutions, significant fines, debarring from

contract bidding and reputational damage.

For more information, please see ‘Health, safety

and wellbeing’ on pages 35 to 39.

Common drivers which may trigger health,

safety and wellbeing risks include:

@ inadequate risk identification/

assessmentundertaken;

@ failure to communicate and follow health

andsafety procedures;

@ insufficient competence;

@ failure to eliminate or mitigate risk through

design and planning;

@ failure of established control measures;

@ lack of clear Zero Harm leadership, impacting

broader safety culture;

@ ineffective management and/or oversight of

subcontractors, JV partners and other third

parties; and/or

@ lack of focus on the wellbeing and mental

health of staff faced by daily work and

lifepressures.

Annual review of the Group’s Zero Harm strategy focuses on priorities and

business plans as key controls in managing the risks presented in the industry

and across the Group’s operations.

External certification coupled with health and safety audits verify business

compliance with established systems. Strategies and associated action plans

are additionally reviewed and monitored regularly by management and external

accreditation bodies.

Zero Harm by Design training and processes are in place across the business,

including regular review of lessons learned and digital rehearsals.

Experienced and competent health and safety professionals monitor onsite

compliance, provide advice to operations, and support continuing strengthening

of a Zero Harm culture.

The Safety and Sustainability Committee of the Board and business health and

safety executive leadership teams meet regularly through the year to capture

learning and innovation and promote a consistent approach to health and safety

best practice, with leading KPIs reported and closely monitored.

Introduction of a consistent Group-wide methodology for classifying level 4 and

5 high potential (HiPo) incidents.

Training programmes, including behavioural training and mental health

awareness, remain in operation across the business.

Operational ownership of fatal risks through well-established working groups

with managing director leadership.

Owner

Safety and Sustainability Committee

Risk trend

Stable

The Zero Harm strategy remains essential in

maintaining the health and safety focused culture

within the operational DNA of the business. This risk

continues to be managed by well-established controls

and processes throughout the Group, providing a

stable control environment. Digital enhancements

continue to provide greater control across the

business. Group-wide working groups established in

2025 to strengthen how best practice is identified and

its consistent application organisation-wide.

Multiple contemporaneous failures within this

environment would be required for the risk to

berealised.

Balfour Beatty plc | Annual Report and Accounts 2025

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RISK MANAGEMENT CON TINUED

CONTRACTING TERMS AND CONDITIONS

Description and impact Causes Mitigation

The Group delivers high-profile, and increasingly

complex, large-scale projects that carry specialised

deliverables combined with multifaceted, and

sometimes stringent, commercial terms.

Establishing the right contractual model and

delivering customer obligations within agreed

terms hand-in-hand with technical complexity can

pose a risk if poorly managed and executed.

Maintaining a balance that protects the interests of

all parties – which includes our supply chain

partners – whilst maintaining a profitable and

sustainable order book alongside delivering

stakeholder value requires competency, skill and,

increasingly, greater collaboration with clients.

What impact it might have

Failure to fully understand or manage complex

delivery in line with commercial terms across the

portfolio could potentially result in disputes,

leading to cost and time to resolve, as well as

potential losses or reduction in profitability and

damage to relationships with key customers,

supply chain or JV and/or Alliance partners.

Failure to effectively engage and collaborate with

customers and supply chain partners in agreeing a

suitable and sustainable commercial model from

the outset could result in choosing not to pursue

certain works, limiting access to certain target

markets in the future, impacting on future order

book and ultimately, on achieving growth targets.

Key causes that could drive this risk include:

@ lack of early identification of a clearly defined

engagements plan and a bid and contracting

strategy between all parties;

@ misalignment between Balfour Beatty and

client approach;

@ working with new or unknown customers and

partners, with no previously established

relationship;

@ entering into new markets or use of new,

unfamiliar technology;

@ lack of supply chain capacity to accept and

manage back-to-back terms, resulting in

increased risk carried by Balfour Beatty;

@ failure to engage in an early collaborative

approach with the customer to fully

understand requirements; and/ or

@ some clients taking a greater ’risk transfer’

approach, driven by their own financial or

market pressures, resulting in a less-balanced

model to allocation or share of risk;

The Group Tender and Investment Committee (GTIC) remains an essential

control in the review and challenge of proposals in line with minimum

commercial expectations and the Circles of Risk guidance.

Clear, defined delegated levels of authority are in place for approving all tender

and infrastructure investment decisions.

Customer adoption of the UK Government Construction Playbook steers an

approach towards increased collaboration, which results in reduced risk, and an

increased focus on quality of bid rather than being solely cost driven.

A proactive attitude adopted prior to the procurement process enables

influence over contracting and procurement model. A shift to a ‘two-stage’

tender approach supports an early collaborative, solution-based approach with

customers and minimises risk on both sides – especially in new markets or

‘first-of-a-kind’ initiatives.

Ongoing work winning initiatives continue across the Group to drive increased

commercial and customer awareness and further embed an understanding of

expectations on margins and cost.

The Gated Business Lifecycle (GBL) review process highlights key commercial

risks closely aligned to Circles of Risk to ensure adequate challenge and

qualification of terms, and early mitigation of key exposures.

Monthly business reviews identify early indicators with potential for disputes

arising on contracts, including across the subcontractor base.

Owner

Group Tender andInvestment Committee

Risk trend

Upward trend

As the business continues into new markets, works

with new clients and partners, and monitors how

customers respond to continued market pressures, it

is essential this risk remains closely monitored,

particularly with public sector clients given fiscal

constraints. GTIC and Circles of Risk continue to

ensure the business does not proceed with

unacceptable terms, such as accepting process risk.

Continuing to maintain a collaborative approach with

customers and the supply chain is crucial in seeking

fair terms commensurate with risk profiles,

particularly with new, complex and, in some cases,

unfamiliar work scopes.

Key controls remain in place to challenge and

scrutinise decision making, designed to prevent the

Group from bidding for unsustainable work, limit

potential exposure and lead to a more risk-balanced

portfolio. Regular reporting of risk profiles and

associated mitigation strategies throughout delivery

and close examination of commercial positions on

high-profile contracts allows the Group to monitor

this risk.

OUR PRINCIPAL RISKS CONTINUED

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PROJECT DELIVERY

Description and impact Causes Mitigation

Failure to deliver projects consistent with

customer expectations and required specifications

and/or quality, in line with schedule and budget,

and to minimise the risk of increased costs,

delay-related damages and defect liabilities.

What impact it might have

Failure to manage/or deliver against customer

expectations, scope specifications and key

deliverables to time and budget could result in

exposures such as design issues, contract

disputes, liquidated damages, cost overruns and

failure to achieve anticipated customer outcomes,

which could in turn reduce the Group’s profitability

and damage its reputation.

The Group may also be at risk of longer-term

exposures including litigation and costs to

rectifydefective or unsafe work, particularly

givenincreased liabilities under the Building

SafetyAct 2022.

Significant delivery failure on a project could result

in substantial reputational damage, and potentially

debarment under the Procurement Act 2023.

Failure to implement, maintain and challenge

operational and commercial controls could result in:

@ lack of comprehensive understanding of

contractual and technical obligations;

@ inadequate resource (people, plant and

materials as well as capable supply chain

partners) or competency verification

ofresource;

@ unrealistic projectschedules;

@ unrealistic progress assessments and cost to

complete judgements which could arise due

to poor training, lack of supervision, or lack

ofaccountability;

@ overly optimistic claim recovery

assumptionswith potential for increased

commercial disputes;

@ incomplete visibility and appreciation of scale

of commercial judgements;

@ failings in administering the contract terms

tosafeguard or protect future claims, change

orders and extensions of time (EOTs);

@ inability to meet environmental or

sustainability commitments;

@ poor management, selection and governance

of subcontractors and supply chain partners;

and/or

@ lack of robust quality assurance processes

and systems.

Customer intervention and additional pressure

to complete could also be a driver to this risk.

The Group’s GBL process continues to ensure identification and reporting of

key execution risks relevant to project deliverables, including planning,

programme accuracy, cost and cash forecasting and resource reviews which

remain the focus of project governance and management oversight.

Early engagement to integrate work winning and project delivery teams

across the GBL process ensures customer expectations are understood and

realistic early on in the bidding process and challenges are communicated and

discussed between parties.

Deployment and ongoing monitoring of strong commercial management and

contract administration processes are embedded through the project lifecycle

and closely reviewed by management.

Optimal scheduling of key staff and associated competency verification

within project delivery and senior management teams, with ongoing and

focused training and development.

The site mobilisation hub facilitates early and effective start-up on site.

The drive for Right First Time delivery including digital progressive assurance

on projects continues to be championed by UK Quality Leadership team with

improvement projects identified in 2025 around three core themes –

knowledge sharing, competence and digital adoption.

Pre-qualification and competency/capacity verification of supply chain

partners, and close monitoring of subcontractor and supplier performance

throughout the project lifecycle.

Professional indemnity cover in place to provide further financial safeguards

to the business.

Owner

Group management

Risk trend

Stable

Project delivery risk remains a key focus for the

business as it undertakes more complex work and

partners both internally between SBUs and externally

via alliances and with key supply chain partners.

Theconsistent application of operational reporting

systems and diligent use of short interval control

processes across all stages of project delivery,

provides greater oversight for management and

certainty of operational outcomes. Close monitoring

of this risk continues as the business enters new

markets and works with new technology, ensuring

early collaboration with customers in understanding

technical requirements and development of solutions

remains a core control.

The UK Quality Leadership team focuses on a

consistent approach, improving quality awareness

and driving the organisation’s Right First Time

‘mantra’ to project delivery, with executive oversight

and sponsorship at its core.

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RISK MANAGEMENT CON TINUED

JOINT VENTURES AND ALLIANCES

Description and impact Causes Mitigation

Failure to implement adequate and effective

controls around the selection of joint venture (JV)

partners, and/or to define a clear governance

structure to monitor delivery or establish a ‘one

team’ culture may result in failure to deliver

expected returns and/or minimise the risk of

unexpected liabilities.

What impact it might have

Inability to select the right JV partner, and

establish an effective way of working aligned to

Balfour Beatty’s culture and values, could result in

a mismatch of partner objectives and overall

delivery approach, and risks driving a knock-on

impact on the effective execution of contract

requirements, resulting in a negative impact to

profitability and reputational damage.

Any potential failure of a JV or Alliance partner

could expose the Group to increased resourcing

costs, and warranty risks, as well as increased

liabilities under the Procurement Act 2023.

Disputes with JV partners could also have the

potential to impact on the Group’s ability to

operate and/or expand within its chosen markets.

Failure to align and integrate with the Group’s

health and safety management expectations and

culture could present increased potential for injury

and/or fatality.

The risk could arise from:

@ ineffective assessment or due diligence of

JVpartners including liquidity, capacity

andcapability;

@ failure to ensure ‘fit for purpose’ terms with

the right JV or Alliance partner;

@ lack of clarity on the delegated levels of

authority between partners;

@ delayed and fettered decision making

between partners;

@ misalignment of operating cultures and failing

to establish a ‘one team’ approach;

@ segregation from central management

systems (financial and operational);

@ lack of aligned understanding of contract

requirements and expectations; and/or

@ lack of oversight of JV or alliance reporting

and application of processes implemented

across the project.

Whilst the Group has broad capability to self-deliver projects, it recognises that

establishing the right partnership can be an opportunity to deliver work and

leverage capabilities to operate in new markets.

The GTIC process applies equally to all joint ventures and Alliances, ensuring

approval and oversight, with the GBL process providing governance over JV

partner selection, which highlights partner-related risks as they align to the

related Circles of Risk around capacity, capability, and previous experience with

the Group and its clients. Financial health checks and monitoring of overall

financial security is also in place.

Appointment of an appropriately constituted JV board, with appropriate

business representation, acts as the main governance vehicle for the Group.

Experienced project directors are appointed to manage JVs and Alliances and

provide an ongoing assessment, and proposed mitigation of, operational

delivery risk.

Good practice, including the use of joint reporting systems (where appropriate),

is shared between partners to embed the Group’s expectations and culture

across delivery teams.

Owner

Group Tender and Investment Committee

Risk trend

Stable

The business continues to focus on ensuring adequate

and robust governance controls that support decision

making on entering into Alliances and aid early partner

selection on JVs are in place. Ongoing monitoring of

the performance of existing JVs and establishing the

right governance forums for new JV’s and Alliances in

new markets and on complex projects, remains essential

in how the Group maintains control of this risk.

Monitoring of health and safety progress and overall

project health of existing key and high-profile JVs and

Alliances continues.

OUR PRINCIPAL RISKS CONTINUED

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CYBERSECURITY

Description and impact Causes Mitigation

Failure to protect the Group from a critical

cybersecurity event that causes a breach of

system security resulting in significant disruption

to, or loss of, operational delivery and/or a loss of

employee data and other confidential information.

What impact it might have

@ operational disruption impacting on project

delivery and restricting ability to carry out

business-critical activities (disruption to

business as usual);

@ loss of data, resulting in possible investigation,

and potential exposure to fines and prosecution;

@ reputational harm, including a significant loss of

market and customer confidence; and/or

@ loss of intellectual property and

competitiveadvantage.

There are several internal and external factors

that could contribute to this risk

occurring,including:

@ poor internal governance and control across the

Groups widespread systems and personnel;

@ lack of, or inadequate, staff training and

awareness of social engineering techniques;

@ failure to embed a preventative culture;

@ increased exposure to phishing attacks and

ransomware due to new and emerging

techniques to bypass preventative controls,

with remote working and the emergence of AI

amplifying the sophistication of attacks;

@ inadequate controls, systems and resources to

prevent and detect malicious activity;

@ inability to meet obligations to ensure good

cyberhealth of existing and new supply

chainpartners;

@ inconsistent approach to data security with

joint venture, alliance or other external partners;

@ increased use of cloud services without

equivalent investment in modern threat

prevention; and/or

@ the increasing pace required to patch or

mitigate vulnerabilities in the Group’s systems.

The risk is managed via the following controls:

@ well-established technology controls including network and endpoint

protection, encryption, patching, penetration testing and data back-up;

@ awareness training and internal testing programme, with mandated annual

refresher in place for all users;

@ data governance framework regularly reviewed, and supported by

Group-wide policies, processes and certifications;

@ incident management feedback mechanism (embeds lessons learnt);

@ partner and supplier controls including vendor risk management

assessments and established relationships with external security authorities;

@ systems are subject to 24/7 cybersecurity monitoring with review of core

controls to provide additional protection in areas that are potential new attack

paths, and remediation where necessary;

@ established relationships and collaboration in working groups with both

external security authorities and sector-specific groups to share best

practice across construction;

@ increased focus on supply chain partners to ensure control environments are

resilient to fraud and cyber-attacks;

@ knowledge-sharing initiatives with supply chain partners and wider industry;

@ cybersecurity maturity assessment providing assurance and oversight of the

operation and effectiveness of cyber controls; and

@ Regular audits of our supply chain and third-party providers

alongsideincreasing the amount of these that hold recognised

cybersecurity certifications.

Owner

Group management

Risk trend

Increased

The Group acknowledges the increased exposure

organisations face, both within and beyond the

construction sector, with threat actors targeting

critical infrastructure, coupled with the evolution of

AI and the increase in the sophistication of

cyber-attacks. This presents an ever-evolving

external environment, which requires constant

monitoring to ensure the Group and its supply chain

partners keep pace with maintaining a robust system

of controls. Wider collaboration across the industry

including knowledge sharing and the promotion of

key Government initiatives around cyber resilience is

key to businesses remaining vigilant in their response

to protecting themselves from the impacts of the

increasing threat of cyber-attacks.

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RISK MANAGEMENT CON TINUED

PEOPLE AND TALENT

Description and impact Causes Mitigation

The Group’s ability to forecast resource

requirements and attract and retain the right level

of skilled and competent people, including

developing and growing expert skills and capacity,

is essential in effectively delivering both the

Group’s current portfolio of work and positioning

the business for future growth.

What impact it might have

Failure to recruit and retain appropriately skilled

people (both operatives and leadership) or grow

in-house talent could harm the Group’s ability to

win or successfully perform specific contracts,

manage project cost increases, grow the business

and/or meet strategic objectives, including

securing future order book.

A high level of staff turnover or low employee

engagement could result in a loss of skills,

knowledge and experience which would

potentially present increased health, safety and

wellbeing risk as well as risks to operational

delivery and reputational damage.

Not having the right capability and capacity can

reduce business confidence within the market,

lose stakeholder confidence and restrict the ability

to drive business growth or improvements.

For more information, please see ‘Our people’

onpages 56 to 60.

Failure to effectively mitigate the Group’s

people risks may arise through:

@ overbidding and/or ineffective resource

forecasting in line with workload scheduling;

@ market conditions causing significant increase

in demand/competition for people in certain

sectors and regions, and hotspots for

specificskillsets;

@ difficulty in accessing talent pools in remote

project locations;

@ lack of visibility of long-term prospects and/or

mismanagement of redeployment

opportunities prompts existing workforce

toleave the Company;

@ failure to maintain a culture of pride and

advocacy across the workforce;

@ lack of investment/ poor decisions in

development of existing skills and capabilities;

@ labour supply issues including increasing cost

and complexity of recruiting;

@ cost of living pressures and other economic

factors driving increase in attrition and people

movement; and/or

@ pressure from wage inflation and failure to

keep pace with other employment offerings

– both inside and outside the Group’s areas

ofoperation.

Providing a positive working environment to support the development of

employees has been central to Build to Last

Specific controls to mitigate this risk include:

@ annual HR planning that identifies strategic people priorities, headcount

forecasts and key risk areas. Progress is overseen by the HR Leadership

Team and monitored through KPIs and regular performance reviews;

@ at bid stage, leaders ensure people requirements are adequately included

within bid documentation. Decisions are taken as to whether requirements

are achievable based on adequately identifying risks and opportunities;

@ in-house recruitment teams, (supported where needed by external supply

chain) utilise a range of systems and suppliers to directly support attraction,

assessment, compliance and onboarding;

@ annual Organisational People Reviews, providing visibility of near term and

longer term succession plans across the Group, with consolidated outcomes

reported to the Board;

@ annual PDR process (Performance and Development Review) ensures

conversations with employees to review performance and discuss

development needs. A suite of internal and external learning and

development offerings support professional and personal development in

line with role requirements;

@ structured Early Careers programmes, with annual intakes of apprentices,

graduates, interns and placement students are set in line with workforce

forecasts. These programmes are supported by dedicated recruitment and

development teams, ensuring high quality training and a consistent pipeline

of future talent; and

@ annual Employee Survey across the Group provides leadership teams with

an indication of engagement and areas requiring management action with

survey results reported at each level within the organisation including the

Board. Action plans are implemented following each survey to address any

areas for improvement.

Owner

The Board

Risk trend

Stable

Whilst robust controls are in place, there is no

change to the existing risk assessment. This reflects

the continued importance of effective resource

forecasting for key geographies and markets.

Strengthening senior management succession and

developing future talent pipelines remain key areas of

focus.

The 2025 employee survey again showed high levels

of engagement, providing a positive indicator of

organisational culture and the Group’s ability to

retaintalent.

OUR PRINCIPAL RISKS CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

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SUSTAINING FOCUS ON BUILD TO LAST STRATEGY

Description and impact Causes Mitigation

Failure by the Group to sustain and build upon the

strong foundation and culture created through its

Build to Last strategy, and supporting Cultural

Framework.

What impact it might have

Inconsistency in working practices and siloed

cultures across the business could drive inefficiencies,

increased costs and operational errors which

impact the Group’s ability to deliver on its purpose

of Building New Futures, and impact on its ability

to deliver sustainable and managed profitable

growth, resulting in negative business impact and

reputational damage.

Delivering against the Group’s core values of Lean,

Expert, Trusted, Safe and Sustainable is integral to

its ongoing success and purpose.

For more information, please see ‘Our strategy:

Build to Last’ on page 9.

Failure to deliver and/or demonstrate sustained

focus and momentum could arise from:

@ complacency and/or localised adaptations

within core disciplines or siloed cultures;

@ ineffective communication and/or reinforcement

of messaging through a lack of leadership;

@ inadequate resourcing (financial, physical

assets and people) with the right level of skill

and competency;

@ lack of joined-up approach across our

geographies, markets and business units;

@ new systems and processes being used

without appropriate controls being in place

and/or tested; and/or

@ new people joining the organisation (including

in leadership roles).

Ensuring it’s Build to Last strategy continues to drive business success has

been a priority for the Group.

Controls include:

@ continuous measurement and reporting of KPIs aligned to Lean (cash flow

and profit from operations), Expert (employee engagement), Trusted

(customer satisfaction), Safe (Zero Harm) and Sustainable (carbon

emissions) within each business;

@ a Cultural Framework, which is embedded in the Group’s systems and

processes, aligns the UK and US under one unified approach and reinforces

expected values and behaviours;

@ clear and frequent senior leadership engagement across the businesses

andfunctions;

@ upskilling, training, and business development initiatives at key levels

throughout the business to reinforce Build to Last and the Cultural

Framework for all employees and in key job families i.e. commercial, project

management, engineering etc.;

@ induction, recognition and PDR approach aligned to Build to Last strategy

and Cultural Framework;

@ Zero Harm provides a consistent approach for the Group for health, safety

and wellbeing, and delivery against the Safe value;

@ the Building New Futures sustainability strategy provides a consistent

approach for the Group on the Sustainability agenda and delivery against the

Sustainable value; and

@ regular programme of communications to reinforce strategic priorities across

the Group.

Owner

The Board

Risk trend

Stable

The principles of the Build to Last strategy and the

supporting Cultural Framework have underpinned

operations across the Group. Work to ensure that this is

consistently communicated across the business has

been essential in managing the risk.

Well established controls, processes and governance

ensured the business remained focused on the Group’s

fundamental principles during the transition to a new

Group Chief Executive.

Balfour Beatty plc | Annual Report and Accounts 2025

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RISK MANAGEMENT CON TINUED

FINANCIAL STRENGTH

Description and impact Causes Mitigation

The Group’s inability to maintain the financial

strength required to operate its business and

deliver its objectives.

What impact it might have

Failure to protect and effectively maintain the

required financial strength could result in:

@ failure to meet financial covenant tests, as set

out in financing facility agreements, leading to a

default event if not remedied within a specific

grace period;

@ failure to pass required tests that allow

continued use of the going concern basis of

accounting in preparing financial statements;

@ the Group suffers a negative impact on

profitability and loses the confidence of its

chosen markets and/or shareholders; and/or

@ loss of ability to compete for key long-term

contracts that are critical to ongoing viability of

the Group and delivery of longer-term

objectives.

Failure to manage financial risks (including

forecasting material exposures) and the financial

resources of the Group that underpin its ability to:

@ meet ongoing liquidity obligations so that it

remains a going concern;

@ inability to access capital markets on

traditional commercial terms; and/or

@ meet financial covenants as set out in

financing facility agreements.

Balfour Beatty operates with a centralised Treasury function, responsible for

managing key financial risks, cash resources and the availability of liquidity and

credit capacity.

The Group continues to operate with a low level of financial risk as evidenced

by its robust average net cash position.

Significant undrawn term committed bank facilities with a banking group of

high credit quality are maintained to underpin the liquidity requirements of the

Group as well as significant bank and surety bonding facilities that remain in

place to deliver trade finance requirements of the Group on an ongoing basis.

The Group operates standardised reporting, forecasting and budgeting financial

processes which supports monitoring of the impact of business decisions on

financial performance over future time horizons.

Owner

The Board

Risk trend

Stable

Well-established controls that continue to be

implemented and monitored by the Group Finance and

Treasury functions serve to effectively manage this

risk, demonstrated by another strong liquidity position

held throughout 2025.

OUR PRINCIPAL RISKS CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

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SUPPLY CHAIN

Description and impact Causes Mitigation

Failure by supply chain partners to meet the

Group’s operational expectations and requirements

in relation to capacity, competency, quality,

financial stability, safety, sustainability, environmental,

social and ethical values and legal and

regulatorycompliance.

What impact it might have

Failure to effectively manage and monitor

subcontractors or supplier performance could

impact on project delivery and may result in disputes

for the Group and/or being forced to find alternative

providers for undertaking/rectifying work. This

could result in delays, business disruption,

customer dissatisfaction, and associated additional

costs to lack of expertise or competency.

Mistreatment of suppliers, subcontractors and

their staff, or poor ethical standards within the

supply chain, could lead to disputes or even

investigations and legal proceedings, resulting in

business disruption, losses, fines/penalties,

reputational damage and, in the worst case,

debarment.

Legislation such as the Procurement Act, Criminal

Finance Act and Economic Crime and Corporate

Transparency Act all place greater emphasis on

Balfour Beatty to have growing levels of visibility of

sub-tier suppliers. The ability of the supply chain to

keep pace with changing regulations could also

result in supply chain disruption.

Lack of capacity, competency, stability or poor

behaviours within the Group’s supply chain may

arise through:

@ failure to embed the Group’s expectations and

values within the procurement process;

@ inadequate assessment of supply chain

partner capability, capacity and process

(including liquidity, quality, safety, ethics,

material management and governance over

compliance with changing law and

regulatorylandscapes);

@ lack of supplier resilience arising from rising

market pressures (e.g. global energy prices,

inflation, shipping delays, natural disaster,

global trade uncertainty, ongoing geopolitical

instability, etc);

@ failure to accurately assess project resource

requirements as well as broader market

demands in line with capacity;

@ increased exposure to cyber risk, (with poor

strength of supplier control) with potential to

disrupt supply chain partners;

@ lack of adequate oversight, supervision or

management during delivery; and/or

@ unethical treatment (and associated lack of

adequate oversight) of the downstream

supply chain.

The Group continues to maintain and develop long-term relationships with

identified key supply chain partners, working closely to understand their operations

and dependencies. Relationship mapping with strategic suppliers together with

briefing on the Group’s order book requirements helps support this.

Well-established processes for risk management framework and the Groups

GBL process ensures identification of potential risks and issues both pre-award

and throughout delivery to assess suitability of resource allocation and

dependencies and develop suitable procurement strategies in collaboration

with SBUs.

Robust pre-qualification and due diligence controls are in place, with centralised

systems to track subcontractor assessment in relation to capacity, compliance,

performance and financial health, with market trends and insights

closelymonitored.

The Group obtains project retentions, bonds and/or letters of credit from

subcontractors, where appropriate, to mitigate the impact of any insolvency.

Group-wide Code of Ethics cascaded to supply chain, with targeted training

programmes and related policies and procedures in place. Engagement with

supply chain on cybersecurity and minimum standards required for operations.

Detailed assessment process across the supply chain following any major natural

disaster/political incident to identify any disruption or discontinuation of supply.

Owner

Group management

Risk trend

Increased

Supply chain partners are essential in the delivery of

the Groups work, with the business recognising the

importance of maintaining subcontractor and supplier

health oversight. As the Group operates in new

markets against a backdrop of increasing legislative

and regulatory requirements, as well as the potential

for increased cyber threat, it acknowledges the

increased risk environment this presents for the

supply chain. Ensuring controls remain robust, and

maintaining strong partnerships with open collaboration

on risk mitigation, remains a key focus for the business.

Balfour Beatty plc | Annual Report and Accounts 2025

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RISK MANAGEMENT CON TINUED

CODE OF ETHICS COMPLIANCE

Description and impact Causes Mitigation

Failure to maintain and track compliance with the

Code of Ethics across the Group, including

employees, joint venture and alliance partners, and

within the broader supply chain.

What impact it might have

Failure to comply with the Code of Ethics and Balfour

Beatty values could leave the Group exposed to:

@ instances of bribery and corruption;

@ fraud, deception, false claims or false accounting;

@ unfair competition practices;

@ worker exploitation including child labour, illegal

employment, human trafficking and modern

slavery;

@ unethical treatment of and by the supply chain;

@ potential impact to staff morale and wellbeing;

and/or

@ potential impact to health, safety and wellbeing.

Any of these failures could result in investigations

legal disputes, with the potential to cause business

disruption, fines and penalties, financial losses,

reputational damage and even debarment.

For more information, please see ‘Ethics and

compliance’ on page 40.

Failure to comply with the Code of Ethics and

Balfour Beatty values could arise from:

@ failure to establish an appropriate and

consistent corporate culture across the

different businesses and geographical

operations of the Group;

@ failure to embed the Group’s values and

behaviours across joint ventures, alliances and

throughout its supply chain partners;

@ an ineffective training programme that reaches

all layers of personnel across the business;

@ failure to implement a robust testing and

compliance monitoring programme;

@ ethics and values being compromised as a

result of commercial pressures;

@ lack of effective oversight and management of

supply chain and its capacity to keep pace

with growing legislative demand;

@ failure to ensure awareness of whistleblowing

processes across the organisation and/or to

engender a safe ‘Speak Up’ working culture;

and/or

@ deliberate or reckless non-compliance.

Group-wide deployment of its Code of Ethics and associated training programme,

with specific behaviours training deployed to targeted audiences. Related

policies and procedures provide clear, actionable expectations for employees.

An independent third-party whistle-blowing helpline remains in pace and is

actively promoted, with all in-scope complaints independently investigated by

Internal Audit and Compliance teams to determine that appropriate action is

taken, where necessary.

Ethics and compliance updates provided to the Audit and Risk Committee

biannually. Each business unit, supported by the Ethics and Compliance

function, is responsible for sponsoring the Code of Ethics and embedding the

Group’s values and behaviours within its operations.

The Group has a range of operational controls (commercial, including

procurement, due diligence and risk assessment) that are designed to identify

and manage risks internally and with third parties. The Fraud Working Group

continued to operate throughout 2025 to ensure readiness for the coming into

force of the Economic Corporate Crime and Transparency Act 2023.

Balfour Beatty works with a limited number of agents, all of whom are, in

addition to the Group’s due diligence and approval process, subject to specific

contractual clauses, policies and agreements.

Centralised systems to track and permit enhanced supply chain assessment in

relation to capacity, compliance and performance providing insight into supplier

internal operating processes, governance and values.

Owner

The Board

Risk trend

Stable

Controls deployed through both internal and external

systems allow oversight of compliance with the Code

of Ethics and enable the business to monitor and

manage any potential breaches. Increased

requirements from regulatory bodies for corporate

compliance is driving focus on this agenda.

The Group acknowledges the importance of ensuring

supply chain oversight in preventing and detecting

fraudulent activity and ensuring its supply chain has

adequate controls to keep pace with changing

legislative changes, achieved through collaboration

with the central Procurement function.

OUR PRINCIPAL RISKS CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

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LEGAL AND REGULATORY

Description and impact Causes Mitigation

Lack of effective response by the Group to any

change in relevant legal, tax and regulatory

requirements in a timely manner or failure to fully

understand the implications of certain regulatory

changes may result in a lack of business readiness

and a potential breach.

What impact it might have

The Group could face legal proceedings,

investigations or disputes resulting in business

disruption, fines and penalties, significant financial

losses, reputational damage and potentially

evendebarment.

Such action could also impact the valuation of

assets within the affected territory as well as have

an impact on investor confidence.

Failure to recognise or adapt to potential impacts

arising from changes in applicable laws affecting

the Group’s businesses may result from:

@ lack of awareness of any changes in laws or

regulations made across the geographies and

jurisdictions within which the Group operates;

@ lack of effective oversight and management of

supply chain and its capacity to keep pace

with growing legislative demand;

@ ineffective communication of the requirements

across relevant business units; and/or

@ entering into new markets and/ or sectors

with limited expertise and due diligence.

The Group actively monitors and responds to legal, tax and regulatory

developments and requirements in the territories in which it operates, with

dedicated legal resource assigned to specific business areas.

Changes in the law and the requirements arising from them are clearly

cascaded to all affected businesses.

Local legal and regulatory frameworks are considered as part of any decision to

conduct business in a new territory, as well as addressed as part of wider

governance checks.

Appropriate and responsive policies, procedures, training and risk management

processes are in place throughout the business.

Engagement of third-party expertise where required on specific or localised

legislation and policy.

Owner

The Board

Risk trend

Increased

Whilst the Group maintains well-established controls

embedded throughout the business to manage this

risk, it acknowledges the landscape of changing legal

and regulatory requirements and the pace of response

required both across the Group and its supply chain to

ensure operations remain effective in managing this risk.

LEGACY PENSION LIABILITIES

Description and impact Causes Mitigation

The Group is exposed to and must therefore

effectively monitor and manage significant defined

benefit pension risks.

What impact it might have

Failure to adequately manage these risks could

lead to the Group being exposed to significant

additional liabilities due to increased pension deficits.

This has the potential to affect the longer-term

viability of the Group as well as incur

reputationalharm.

The Group is unable to guarantee that the

trustees of the pension funds react effectively to

or manage:

@ changes in interest rates or outlook for inflation;

@ an increase in life expectancies;

@ regulatory intervention or legislative change;

@ prudent funding assumptions; and/or

@ investment performance of the funds’ assets.

The Group continues to constructively and regularly engage with the trustees

of the pension funds, ensuring that appropriate advice is sought and

implemented, and that the funds’ assets and liabilities are being managed

appropriately. This includes quarterly performance reporting and investment

committee meetings in which the Company is represented.

The funding and investment arrangements of the pension funds are subject to

an in-depth triennial valuation and funding review with regular monitoring in

years between.

The assets in the funds have been de-risked over the last three years.

The Group’s two main UK funds have hedged in excess of 80% of their exposure

to interest rate and inflation movements and the largest of the UK funds has

hedged around 40% of its exposure to an increase in life expectancies.

Owner

The Board

Risk trend

Stable

The trade-off between risk and cost remains subject

to regular review as part of the actuarial valuations of

the Group’s two main UK funds, with some further

asset de-risking continuing into 2025. The position will

be reviewed again following the finalisation of the

2025 triennial reviews.

Balfour Beatty plc | Annual Report and Accounts 2025

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ECONOMIC UNCERTAINTY

Description and impact Causes Mitigation

The effects of market trends, both nationally

andinternationally, including political, societal

orregulatory changes may cause customers to

re-evaluate current or future infrastructure spend

and the procurement of services. It may also lead

to changes in the price and availability of labour,

products and services which could subsequently

impact on the Group’s operating model.

What impact it might have

Any significant delay or reduction in the level of

customer spending could impact the Group’s order

book adversely which could reduce revenue or

profitability in the near or medium term and

ultimately have an impact on the longer-term

viability of the Group.

Restrictions on the availability of skilled labour and

competitively priced materials could lead to

increased operating costs, reduced margins, and

hence potentially a devaluation of the business.

Financial failure of a key customer, including any

government or public sector body, as well as a key

supply chain or joint venture partner could result in

increased cost to the Group.

Potentially negative impacts could be related to

the effects of:

@ customers postponing, reducing or changing

expenditure plans including any delays

associated with funding or planning

constraints as well as change in approach to

meet ‘greener’ solutions;

@ the impact of inflation arising from a multitude

of factors including rising global costs of

energy, strained supply chains and global

trade friction and geopolitical uncertainties;

@ pressure on public finances caused by

inflationary pressures and strained public

finances more generally;

@ increased competition e.g. in the UK from

foreign investors acquiring competitors;

@ political change or uncertainty, including

potential change in priorities seen in UK and

US Governments;

@ recessionary pressures; and/or

@ increased supply chain risks (e.g. solvency,

people and materials).

The Group continues to focus operations primarily in three core geographies

(UK, US and Hong Kong) across three core sectors (Construction Services,

Support Services and Infrastructure Investments). This balanced portfolio of

projects maintains resilience and stability as the Group is less exposed to a

downturn in a single geography or sector.

Market trends and any associated impacts are continuously monitored by the

Group with ongoing activity to maintain involvement in Government affairs to

keep pace with anticipated future direction of Government spend and

collaborate with partners where possible.

Controls assess the financial solvency and strength of counterparties and major

supply chain partners as part of bid activities; assessments are updated and

reviewed whenever possible during the project lifecycle to reflect changes in

market pressures. The Group also seeks to ensure that it is not overly reliant on

any one counterparty, whether customer, joint venture partner or supply

chainpartner.

The annual review of market forecasts remains a core part of the Group’s

Budget and Planning processes, with a focus on medium-term market outlook

considered and presented by each Strategic Business Unit.

Owner

The Board

Risk trend

Stable

In the short term, economic risk to the business is

considered stable compared with previous years given

Government commitments to further infrastructure

spend in the UK and US. However, the Group continues

to acknowledge that economic headwinds remain in

all its territories of operation. The longer-term outlook

remains uncertain, with potential for future unpredictability

presented by ongoing conflicts and international

political unrest. Based on this, close monitoring of

economic drivers continues at the Group level.

RISK MANAGEMENT CON TINUED

OUR PRINCIPAL RISKS CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

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DELIVERING SUSTAINABILITY COMMITMENTS

Description and impact Causes Mitigation

The Group’s ability to deliver its sustainability

commitments, as set out in the Building New

Futures strategy, is critical to achieving long-term

business resilience and adaptability to current and

future disruptive social, economic and

environmental headwinds.

This includes meeting the Group’s internal targets,

responding effectively to evolving regulatory and

reporting requirements, and aligning with increasing

customer and market expectations across the

geographies in which the Group operates.

The risk relating to mitigating and adapting to

climate change, as well as the related risk of

biodiversity loss, is a component of this broader

sustainability delivery risk, reflecting the need to

understand and respond to climate related risks and

opportunities impacting the Group’s business

model and future operations.

What impact it might have

Failure to meet the Group’s sustainability

commitments could adversely impact the delivery

of strategic objectives and long-term value creation.

Not fully understanding customer needs, or failing

to collaborate effectively on sustainability solutions,

could lead to inefficiencies in project delivery,

supply chain vulnerabilities, reduced ability to meet

agreed targets, damage to customer relationships,

and a negative impact on the future pipeline

ofopportunities.

Keeping pace with market demand while balancing

the adoption of new and evolving technologies

presents inherent delivery and investment risks that

must be effectively managed to support informed

decision making and maintain investor and

shareholder confidence.

Not meeting target sustainability commitments

or being unable to effectively transition the

business may be due to:

@ lack of sufficiently robust project level controls;

@ insufficient sustainability capability and skills

across the Group;

@ challenges in sourcing, developing and

assuring reliable sustainability data;

@ limited operational capacity to deliver projects

to evolving standards and requirements (e.g.

PAS 2080, BREEAM, Biodiversity Net Gain);

@ insufficient early engagement or collaboration

with clients on sustainability outcomes;

@ reliance on emerging or evolving technologies

that are not yet widely proven or available

atscale;

@ supply chain capacity or capability constraints

in responding to new legislation or disclosure

requirements;

@ insufficient upskilling of internal teams,

customers or supply chain partners; and

@ the need to maintain a consistent Group wide

approach while managing different rates of

regulatory and market change across

geographies.

The Building New Futures strategy provides a clear, Group wide framework and

targets for sustainability delivery.

Bridging the Gap governance frameworks, alongside equivalent governance

and performance oversight arrangements across the Group, provide transparency

over business performance and progress against targets.

A dedicated and competent Sustainability Enabling Function, with appropriate

capability and capacity, including Sustainability Directors embedded across

thebusiness.

Management systems and processes to identify, manage and report

sustainability related risks and performance, supported by Group-wide data,

assurance and reporting mechanisms.

Early engagement with clients to understand sustainability requirements and

align delivery methodologies accordingly.

Active collaboration with the supply chain to support data collection, capability

development and the achievement of shared sustainability objectives.

A dedicated climate related risk working group to assess, model and respond to

climate related risks and opportunities under different warming scenarios.

Owner

The Board

Newly disclosed as Principal in 2025

An existing Group risk, the business has defined this

as a Principal Risk as part of the 2025 risk review

process, acknowledging the importance of delivering

against sustainability requirements and reflecting that

accurately and competently managing the

sustainability agenda and the ongoing transition of the

business is a key aspect of the Group’s strategy.

Balfour Beatty plc | Annual Report and Accounts 2025

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VIABILITY STATEMENT

In accordance with the requirements of the

Code, the Directors have assessed the Group’s

long-term prospects and its viability over a

three-year period to 31 December 2028.

Assessing the Group’s

long‑termprospects

The Group operates primarily in the UK, US and

Hong Kong, specialising in multiple facets of the

construction and services industry. TheGroup

also maintains an Investments portfolio which

provides a strong underpin tothe Group’s

balance sheet.

The Group has many elements necessary

forfuture business success – expertise in

technology and innovation, strong customer

relationships and a talented workforce.

TheGroup seeks to build on these strong

foundations with continued investment in

technological advances, not only to ensure that

projects are delivered on time and as efficiently as

possible whilst maintaining the utmost focus on

safety, but also to remain market leaders in the

way construction is conducted and to push the

boundaries of innovation in line with achieving

industry-leading margins.

Assessing the Group’s viability

The Directors have assessed the Group’s viability

over a three-year period and consider this to be

appropriate because this is the period aligned to

the current order book andfor which there is a

good visibility of thepipeline of potential new

projects. This period also allows greater certainty

over the forecasting assumptions used in labour

and material pricing, skills and availability. There

isinherently limited visibility of contract bidding

opportunities beyond the three-year period, and

the accuracy of any forecasting exercise is also

impeded by uncertainties around the costs

involved in delivering contracts. Consequently,

theGroup performs its medium-term planning

over three years.

The Directors and the Executive Risk Steering

Group continue to monitor the principal risks

facing the Group, including those that would

threaten the execution ofits strategy, its

business model, future performance, solvency

and liquidity.

Aspartof assessing the Group’s future viability,

the Directors have considered these principal

risks and the mitigations available to the Group.

These principal risks and the consequent impact

these might have on the Group as well as

mitigations that are in place are detailed on pages

76 to 89.

In their assessment of the Group’s viability, the

Directors have also considered the need to be

successful in focusing on the Group’s values of

Lean, Expert, Trusted, Safe and Sustainable

detailed on page 9. TheGroup’s progress in

relation to Build to Last for continuous

improvement remains critical to future success,

although success isalso dependent on the Group’s

ability to selectively win new contracts which

could bepartly impacted by political changes.

At 31 December 2025, the Group’s only debt,

other than non-recourse borrowings ring-fenced

within certain concession companies, comprised

$208 million US private placement (USPP) notes.

The Group’s £450 million committed

sustainabilitylinked bank facility remained

undrawn at 31 December 2025 and is fully

available to the Group until June 2028. The

Group’s £30 million bilateral committed facility

also remained undrawn at 31December and

remains fully available to the Group until

December 2027.

In modelling the Group’s headroom, it has been

assumed that the £450 million committed

sustainability linked bank facility will be refinanced

in full upon maturity in June 2028. The Directors

have assumed that the £30 million bilateral

committed facility will not be replaced with

another facility upon maturity in December 2027.

The Group’s projections indicate that the

headroom provided by the Group’s strong

liquidity position, including its net cash position

and the debt facilities currently in place, is

adequate to support the Group over the next

three years.

The Group’s projections have been stress-tested

against key sensitivities which could materialise

as a result of crystallisation of one or a

combination of the Group’s principal risks with

the aim of stress-testing the Group’s future

viability against severe but plausible scenarios.

These scenarios include:

@ failure to manage effectively any adverse

economic impact;

@ an operating event that damages the Group’s

reputation and results in significant penalty; and

@ failure to maintain progress made in relation

toBuild to Last.

The above scenarios result in: a reduction in

revenue; a reduction in margin; an increase in

operating costs; a slowdown in the Group’s

investments asset disposal programme; and/or

negative changes to working capital.

The Directors also assessed a ‘perfect storm’

scenario by combining multiple scenarios and

modelling the resulting downside to stress-test

the Group’s viability if these cash flows were to

immediately and simultaneously come under

severe threat. This scenario is aimed totest the

viability of the Group if it was to experience a

catastrophic failure and toallow the Directors

toassess the mitigations available to avoid this.

In assessing the Group’s viability under

thesesevere but plausible scenarios (including in

the instance of a ‘perfect storm’), the Directors

have also considered the Group’s projected cash

position (which excludes cash that is not

immediately available to the Group), bank facilities

and their maturity profile and covenants, the

borrowing powers allowed under the Company’s

Articles of Association and thefact that the

Group’s PPP investments comprise reasonably

realisable securities which could be sold to meet

funding requirements if necessary.

It is unlikely, but not impossible, that the

crystallisation of a single risk would test the

future viability of the Group. However, it is

possible to construct scenarios where either

multiple occurrences of the same risk, or single

occurrences of different principal risks, could put

pressure on the Group’s ability to meet its

financial covenants. The Directors have

considered the strength of the mitigations

available and whether these aresufficient to

avoid a catastrophic outcome to the Group’s

viability and believe that there are sufficient

mitigations immediately available to minimise

thisrisk.

Based on the assessment undertaken to stress-test

the Group’s viability against severe but plausible

scenarios, and taking into account the strength of

mitigations that are immediately available to the

Group, the Directors have concluded that there

isa reasonable expectation that the Group will

beable to continue in operation and meet its

liabilities as they fall due over the three-year

period to 31December 2028.

Our 2025 Strategic report, from pages 1 to 98,

was approved by the Board on10 March2026.

Philip Harrison

Chief Financial Officer

10 March 2026

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

CLIMATE CHANGE AND TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)

Climate-

riskand

opportunity

Building resilience through

climate-related risk and

opportunity management

Climate change remains one of six focus areas

within Balfour Beatty’s Building New Futures

sustainability strategy (for more information see

page 42). This underlines the Group’s understanding

of the key role the construction and infrastructure

sector is poised to play in this global challenge.

Whilst climate change introduces escalating

physical and operational risks for the construction

and infrastructure sector and its supply chain, it

simultaneously presents strategic opportunities

to accelerate the energy transition and deliver

resilient communities through adaptive design,

innovation and future-ready infrastructure.

The Group’s Climate-Risk Working Group (formerly

TCFD Working Group) continues to provide a

structured approach for the consideration and

understanding of the effects that climate change

may have on the business and the consequential

risks and opportunities. Where possible,

consideration has also been given to business

response, in an effort to reflect how the Group

both adapts to, and mitigates, risk and promotes

opportunity through its business strategy.

The working group continues to develop

supporting methodologies for financial

quantification of defined risks and opportunities;

however, the diverse nature of the Group’s

operational activities continues to represent a

challenge for the development of robust and

replicable methodologies that can be applied

business-wide to accurately quantify the financial

impact of climate-related risks and opportunities

at an organisational level.

Throughout the reporting year, the working group

has performed a reassessment of the defined top

10 highest-rated risks and opportunities. These

have been revalidated and prioritised against the

prior year’s Vulnerability Advantage (VA)

assessment by weighing up potential impacts

and outcomes to the business against potential

adaptation and mitigation strategies aswell as

the relevance to ongoing and future operations.

Compliance statement:

Balfour Beatty continues to set out its

climate-related risk and opportunity

disclosures aligned with the 11 core

elements of the TCFD guidance using the

pillars of governance, strategy, risk

management, and metrics and targets. In

doing so, it has considered Section C of

the 2021 TCFD Annex entitled Guidance

for All Sectors and Section E of the TCFD

Annex entitled Supplemental Guidance

for Non-Financial Groups. The Group

remains compliant with Financial Conduct

Authority (FCA) listing rule UKLR 6.6.6(8)

R by applying the TCFD guidance;

assessment of the climate-related

impacts on the Group undertaken to date

are largely qualitative and are yet to be

fully integrated into the longer-term

financial planning processes for the

business. Development of methodologies

to determine quantitative impacts has

progressed for 2025; however, the Group

remains consistent in only disclosing

qualitative impacts. The Group’s

operational complexity continues to

present a challenge for quantification

considering the range of uncertainty in

projections on the impacts of

climate-related risks and opportunities.

The table below outlines where elements

of the TCFD disclosure requirements are

addressed within the report.

Pillar TCFD recommendation Section name Page

Governance a) Board oversight Division of responsibilities p111

b) Management role Audit, risk and internal control p124

Sustainability p42

Strategy a) Risks and opportunities Division of responsibilities p111

b) Impact on organisation Audit, risk and internal control p124

c) Resilience of strategy Sustainability p42

Risk

management

a) Risk identification and

assessment process

Risk management p72

b) Risk management process

c) Integration into overall risk

management

Metrics

andtargets

a) Climate-related metrics Sustainability p42

b) Scope 1, 2 and 3 GHG

emissions

c) Climate-related targets

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

The senior leadership of each business is

responsible for agreeing its Bridging the Gap

action plan and ensuring it is delivered and

adequately resourced. These plans detail how

projects should deliver sustainability at a local

level aligning to the Building New Futures six

focus areas. Risks and opportunities (including

where defined as Emerging Risks) are also

identified and tracked on business risk registers

where relevant.

KPMG LLP is engaged by Balfour Beatty to

provide limited assurance over the reporting of

selected sustainability data including the Group’s

Scope 1 and 2 greenhouse gas emissions,

emissions intensity and social value.

The Climate Risk Working Group, sponsored by

the Group Director of Sustainability, includes

representation from Finance, Risk and Sustainability

functions, and draws on functional support and

expertise from the wider business. Itengages

with business and functional management across

Balfour Beatty, ensuring climate-related risks and

opportunities are adequately identified and

incorporated into the Group’s Enterprise Risk

Management (ERM) system. The working group

oversees the implementation of climate-related

risk management processes and reporting.

The ExCom is updated by the Group Risk and

Audit Director and Group Director of Sustainability

as part of the ongoing assessment of risk

management and internal control.

The key objectives of the working group are to

grow the Group’s understanding of climate-related

risk and opportunity and align these efforts to

evolving disclosure requirements, by:

@ building awareness of climate-related risks and

opportunities that could impact the Group;

@ identifying, analysing and disclosing high-priority

or potentially material climate-related risks and

opportunities;

@ delivering ongoing review of climate-related

risks and considerations and support how

these are integrated into risk management

processes; and

@ communicating the outputs and implications

ofthese reviews to key stakeholders within

the business.

Strategy

Risks and opportunities

The Group continues to evaluate climate-related

risks and opportunities across the short, medium

and long term (defined above).

Balfour Beatty’s diverse operating portfolio and

geographical spread mean that the likelihood of a

number of climate-related risks materialising

concurrently is low and they are unlikely to

impact the Group’s short-term financial viability

or ability to operate in a business-as-usual state.

Given the inherent variability associated with

forecasting low-carbon technologies, carbon

pricing mechanisms and wider macroeconomic

assumptions, the Group continues to enhance its

analytical approach. Granular, business-specific

insights are being developed to ensure that

climate-related risks and opportunities are

appropriately understood within the context of

each division’s market, operational model and

growth strategy.

The Climate Risk Working Group is collaborating

with Group Finance and wider internal

stakeholders to refine definitions of financial and

non-financial materiality in the context of

climate-related risk. This work will continue to

evolve, including engagement with Climate Risk

Champions across business units to support

deeper scenario-based analysis.

The working group has also sought to

performavalidation of prospective quantification

methodologies and expand these approaches out

to other climate-related opportunities identified

inthe Top 10.

Governance

Balfour Beatty’s governance structure and

organisation hierarchy underpin all Group

activities and ensure that the business is

managed and operated effectively (see page 111)

enabling the Board, its sub-committees and

senior leadership to review operational and

business-level risk profiles including

climate-related risks and opportunities

considered alongside other potential exposures.

Board oversight

The Board is responsible for setting the Cultural

Framework of the business including its purpose,

Build to Last strategy, values and behaviours.

Together with its sub-committees, the Board

provides leadership and oversight of the system

of risk management which includes ensuring

climate-related factors are being considered as

part of identification of risk for the overall business.

The Safety and Sustainability Committee (SSC),

comprising the Group Chief Executive and six

Non-executive Directors, reviews the Group’s

Building New Futures sustainability strategy and

monitors progress across its six focus areas. The

Group Chief Executive holds overall responsibility

for climate-related risks and issues, sustainability

policy, and the management of ESG matters.

The SSC agenda is structured around health

andsafety and sustainability, allowing dedicated

focus on climate-related matters. The Group

Chief Executive and Chief Financial Officer also

have ESG-related targets within their personal

objectives, including measurable improvements

in UK social value, carbon reporting quality, and

performance against validated Science

BasedTargets.

The Boardmaintains oversight of all Group risks,

including mitigating and adapting to climate

change, and delivering sustainability commitments.

The Board, through the Audit and Risk Committee,

isappraised of the climate-related risks and

opportunities on an annual basis, alongside an

overview of the climate-related risk workstream

carried out and disclosure summary.

Further information related to all Board meetings

held and attended can be found in the Division

ofresponsibilities section on page 111.

Management role

The Executive Committee’s (ExCom)

responsibilities include setting ambitions and

targets in relation to climate-related matters

under the Building New Futures sustainability

strategy and supporting businesses in establishing

and implementing Bridging the Gap sustainability

action plans. ExCom members are also

responsible for monitoring climate-related risks

and opportunities identified as relevant to their

respective businesses or functions alongside

other operational and strategic risks.

The Group Sustainability function is responsible

for understanding material sustainability

considerations, setting related targets and

ambitions, and enabling the development of

operational action plans.

The ExCom has overall responsibility for agreeing

the Group’s sustainability ambitions and targets.

Sustainability directors assigned across the Group

(supported by individual business sustainability

leads and project-based teams) are responsible

for maintaining bespoke Bridging the Gap

sustainability action plans aligned to the Group’s

Building New Futures sustainability strategy.

CLIMATE CHANGE AND TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

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Impact on organisation

The Group has undertaken significant work to

assess the potential financial implications of

climate-related risks and opportunities. However,

limitations in data availability and scenario

modelling parameters mean that there remains

insufficient confidence to disclose quantitative

financial estimates at this stage. The Group will

continue to report the categorised financial

impacts and scenario-based likelihood

assessments associated with identified

climate-related events.

The diverse nature of the Group’s activities,

spanning both public and private sector clients,

varied contractual arrangements and differing

margin profiles, means that impacts will not be

uniform across the organisation. The working

group has built capacity to enhance

Climate scenario selection and

strategic resilience

The Group has maintained the two scenarios

identified in the initial disclosure year, as they

have been determined by the working group as

still the most relevant and appropriate scenarios

aligned with the most recent climate science and

the realities of the pace of sectoral

decarbonisation, labelled Low Carbon, and

Limited Action. ‘Limited Action’ was defined as

more appropriate as the term ‘business as usual’

was not reflective of the Group’s commitment to

mitigating and adapting to climate change.

Under the Limited Action scenario, it is

anticipated that the global mean temperature will

increase by approximately 2.7°C, a mix of fossil

fuels and renewables will be adopted as energy

sources, carbon pricing will remain low, and

legislation will be of a commensurate level of

ambition in comparison to the present, resulting

in a medium emissions future. A 1.5°C climate

scenario was not selected to be applied for our

forward-looking analysis as recent observations

show that global temperatures have already

exceeded this threshold on an annual basis above

pre-industrial levels and is therefore a present-

day operating condition.

For physical scenarios, the IPCC AR6 SSP 2–4.5

Middle of the Road (Limited Action) and SSP

1–2.6 Sustainable (Low Carbon) projections were

utilised. For transition scenarios, the IEA World

Energy Outlook 2021 Stated Policies Scenario

(Limited Action) and Sustainable Development

Scenario (Low Carbon) were utilised.

By understanding the impact of each risk and

opportunity event in the context of specific

business plans and growth strategies, the

methodologies developed to financially assess

impacts will be informed by more accurate,

granular data on a business-by-business basis,

making it more relevant to that area of operation.

Compartmentalising the impact of a particular

event in this way will allow a more informed view

to be presented at Group level.

It has been determined that the Group has an

in-built resilience to the impacts of climate

change in the short term, due to the current level

of geographic and market diversity of its operations.

This enables the Group to pivot away from

markets more exposed to climate risk and

expand into existing and/or new markets

presented by the global response to

climatechange.

The potential financial impacts of the Group’s

positive and negative exposure to climate risks

and opportunities require many assumptions to

be made in respect of factors such as low-carbon

technology forecasts, energy consumption,

carbon pricing forecasts, and others, which are

subject to high variability.

The analysis conducted to date shows that the

overarching business strategy would not be

impacted, and importantly, mitigating actions are

already in place for certain risks, which

significantly reduces potential negative financial

impacts. There will be opportunities to continue

to iterate the analysis as the scope of relevant

data and assumptions becomes available both

internally and externally to support and inform

further quantitative assessment.

Furthermore, to support future assessments of

materiality in the context of climate-related

impacts over the medium and longer term, the

Group continues to engage with stakeholders

and regulatory forums.

TIME HORIZONS

Short term (0–3 years)

@ Balfour Beatty’s current operations

and asset investments as well as

near-term growth strategy.

Medium term (3–10 years)

@ Ongoing projects and contracts as

well as growth strategy and asset

investment decisions driven by

government policy, infrastructure

needs and market conditions.

Long term (10–30 years)

@ Factors that could impact Balfour

Beatty’s business plans and longer-

term strategy and business resilience.

business-level assessments to ensure impacts

are understood within the specific operating

context of each division.

TCFD-aligned financial reporting considerations

are supported by Group Finance. This assessment

acknowledges climate-related risks but concludes

that no material short-term impact on financial

performance is anticipated. Climate factors

continue to be incorporated into the Group’s

biannual going concern assessment and annual

viability assessment, including the review of

potential impairment of assets (see page 90).

Current analysis indicates that the Group’s

strategy remains fundamentally resilient. Existing

mitigations significantly reduce potential negative

impacts, and as the availability and quality of

internal and external data improve, the Group will

further refine its methodologies to strengthen

future disclosures.

Resilience of strategy

The Build to Last strategy is fundamental to how

the organisation shapes a resilient, market-leading

Balfour Beatty for the next 100 years. Build to

Last is a platform for sustainable growth and

productivity and is well placed to enable Balfour

Beatty to develop resilience against the impacts

associated with climate change over the short,

medium and long term.

The Sustainable value within Build to Last is

delivered through the Building New Futures

sustainability strategy, which sets out the

Group’s commitment to both mitigating and

adapting to climate change. This includes our

commitment as signatories of the business

ambition to 1.5º C supported by SBTi-validated

net zero targets of 2050 for Scopes 1, 2 and 3

and a near-term 42% reduction in Scope 1 and 2

GHG emissions. The roadmap to achieve these

reductions is implemented through Bridging the

Gap sustainability action plans which monitor

progress against the Building New Futures

strategy targets.

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Risk management

The integration of climate-related risk into

business risk profiles continues to evolve as the

business better understands the potential risks

and opportunities associated with the climate

change agenda. As outlined in the Risk management

section on page 72, the ERM framework prompts

consideration of risk at a Group, Business and

Operational level. Mitigation of, and adaptation

to, climate change continues to be monitored as

a risk on the Group risk register and forms a

sub-set of the Group Sustainability risk, now

disclosed as Principal (see page 89). This risk is

reviewed and updated by the Group Sustainability

Director and team and monitored by ExCom and

reported to the Board alongside all Group risks as

part of the half and full year risk review process.

At a Business level, SBU teams continue to be

engaged via the Climate Risk Working Group and

the dedicated Sustainability directors in

identifying risks as they specifically relate to their

business plans and strategies. As part of the

work undertaken by the Climate Risk Working

Group, the highest rated risks and opportunities

that form part of the disclosure are incorporated

into the ERM system library to provide visibility

to Business and Operational level teams. Current

management plans remain largely focused on

exploring and understanding the full impacts of

risks to develop appropriate mitigation and

adaptation strategies which, where possible and

relevant, are incorporated as part of Bridging the

Gap plans (see page 50).

The Balfour Beatty risk management process

(outlined on page 72) remains relevant for

application by the business to identify climate-

related risks and opportunities alongside other

risks they may face. Whilst this ensures a

consistent process is applied when identifying

and reviewing all risks, there continue to be

specific additional considerations that differ for

climate-related risk that should be considered,

including differences in time horizons and, in

some cases, limited information for which to

fullyassess the risk (which results in businesses

tracking some elements of climate-related risk

asEmerging).

Metrics and targets

Climate-related metrics and targets, including

Scope 1, 2 and 3 emissions, are detailed in the

Sustainability section on pages 42 to 55. Balfour

Beatty’s GHG abatement actions align with its

Science Based Targets supported by a robust and

credible GHG reduction pathway. Further

information on commitments and progress on

Science Based Targets is provided on page 42.

Reporting framework horizon

Balfour Beatty acknowledges publication of the

UK Sustainability Reporting Standards (UK SRS)

and awaits outputs on consideration of the

introduction of requirements for certain UK

entities to report against these standards. A gap

analysis undertaken on the International

Sustainability Standards Board (ISSB)’s first two

standards, IFRS S1 and IFRS S2, which fully

incorporate the TCFD’s recommendations

generating a roadmap integrating these into

future reporting plans was updated in the current

reporting year. The Group will continue to

Climate scenarios

Physical Transition

Scenario Warming by 2100 Future emissions Energy sources Policy narrative Rationale for scenario

Limited Action

~2.7

C Medium Mix of fossil fuels and

renewable energy

Achievement of Nationality

Determined Contributions

(INDC) under Paris

Agreement and other policy

commitments

Represents possible future

risks if there is minimal

additional action

Most significant impacts

from physical risks

Low Carbon

C Low Mostly renewables

and low-carbon fuels

Ambitious policy agenda

leading to transformation of

the energy system

Many advanced economies

reach net zero emissions by

2050, with the rest of the world

reaching net zero by 2070

Aligns with best-case

scenario and current

recommendation from the

IPCC

Most significant impacts

from transition risks

monitor timelines of implementation pending

outputs and integration with the Transition Plan

Taskforce (TPT) final outputs, including a

disclosure framework, implementation guidance

and its proposed development of sector-specific

guidance documents. The Group will work

towards adopting the TPT disclosure framework

guidance as it continues to integrate its own

transition plan into the Group’s strategic goals.

Physical risks and transition risks are considered

alongside opportunities to be rated using single

consequence and likelihood rating (consequence

based on pre-population of the sensitive,

exposure and adaptive ratings already being

assigned). From a longer list, a top 10 were

brought into focus, selected because there is a

distinct threshold in the scoring on combined

overall rating for these top 10 in comparison to

the longer list.

Quantification methodologies were reviewed and

updated in the reporting year for: Increase in

demand for renewable and low-carbon energy

generation, storage, transmission and distribution

increases awarded contracts; Carbon pricing

increases prices of energy and raw materials and

transitioning of owned plant, fleet and equipment

to lower-carbon options. New methodologies

were explored for: Increase in demand for

climate disaster adaptation/climate resilient

infrastructure increases awarded contracts; and

Resource efficiencies through energy and

material use. The transition risk ‘Establishment

of/increased number of regulations on material

use and activities in the long term’ has been

repositioned as ‘Establishment of strengthened

or new regulations on material use and activities’

to reflect current policy ambitions in this context.

CLIMATE CHANGE AND TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

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TOP 10 HIGHEST RATED CLIMATE-RELATED RISKS AND OPPORTUNITIES

Increase in demand for renewable and low‑carbon energy

generation, storage, transmission and distribution

increases awarded contracts

Type

Opportunity

Financial impact

category

Increased revenue

Anticipated time

horizons

S M L

Likelihood:

Limited Action: Almost certain Low Carbon: Almost certain

Potential impacts and

outcomes to business

@ Increased revenue from a focused

pursuit of opportunities related to

nuclear, grid upgrades, net zero

power generation and CCUS projects.

@ Opportunity to expand business

capability and skillsets.

@ Collaboration with design partners to

develop low-carbon solutions.

@ Support transition to lower-carbon

economy.

@ Collaboration with new and

sustainable customers.

@ Positive impact on ESG scores.

Potential adaptation and

promotion strategies

@ Enhanced collaboration and dialogue

with value chain members.

@ Promotion of research and

development in green infrastructure

technologies.

@ Creation of partnerships to promote

new green infrastructure.

@ Increased focus on climate-related

opportunities through integration of

climate-related opportunities into

business growth strategies and work

winning activities.

Relevance to operations and value chain

UK energy: The UK’s energy system is undergoing a structural transformation as

net zero ambitions accelerate across the market segments of grid modernisation,

large-scale nuclear generation, small modular reactors and carbon capture usage

and storage. For more information see page 15.

Investments: Balfour Beatty Investments is positioned for growth across

high-demand energy markets for EV charging infrastructure and the UK’s nascent

energy transition. For more information see page 19.

Expanding business capability and skillsets: To develop the skills required to

build the UK’s energy transition, Balfour Beatty has established the Project Leaders

Programme to address the evolving needs of the power sector and to meet the

demands of significant growth.

Quantification methodology

Proposal reviewed and updated in the reporting year

Carbon pricing increases prices of energy and raw

materials

Type

Transition risk

Financial impact

category

Increased OPEX

Anticipated time

horizons

S M

Likelihood:

Limited Action: Likely Low Carbon: Almost certain

Potential impacts and

outcomes to business

@ Increased cost to the business,

supply chain and to customers.

@ Potential reduction in future projects

horizon if major infrastructure

projects become too costly to fund.

Potential adaptation and

mitigation strategies

@ Monitoring of current carbon pricing

to determine impact on business and

supply chain across geographies.

@ Ensure, where possible, contractual

protection from increased additional

costs to the customer.

@ Implementing efficient use of the

products and services we procure.

@ Avoiding, minimising or replacing

carbon-intensive products and

services for lower-carbon alternatives.

Relevance to operations and value chain

Increased project cost: Carbon pricing will affect both project delivery and the

supply chain by increasing costs of essential goods and services fundamental

tooperational delivery, especially materials with a high embodied carbon, such as

steel. This may result in increased operating costs on projects.

Power transmission and distribution (UK): The power transmission and

distribution sector’s reliance on materials with high embodied carbon such as

concrete, steel, cement and aggregates has prompted the Group’s client base

todiscuss carbon pricing at tender stage, resulting in a more complex, detailed and

therefore demanding contract tender process. This increased pre-award upfront

transparency exercise has resulted in greater early collaboration with the supply

chain to increase visibility of environmental product declarations andavailability of

low-carbon materials.

Quantification methodology

Proposal reviewed and updated in the reporting year

PROTECTING CROMER AND

MUNDESLEY’SCOASTLINE

We’re collaborating with North Norfolk District Council

toprotect 600 homes and businesses from flood and

coastalerosion.

On behalf of North Norfolk District Council, through the

SCAPE Civil Engineering framework, we are addressing the

impacts of coastal change along a significant stretch of

coastline in Norfolk and Suffolk.

Sustainability is crucial for the coastal protection efforts at

Cromer and Mundesley. These measures not only protect the

environment but also ensure the long-term resilience of local

communities against the harsh impacts of the sea.

Through these efforts, the schemes have not only enhanced

coastal protection but also contributed significantly to the local

economy and workforce. By involving local businesses and

community members, the project ensures that its benefits are

widely distributed, supporting the long-term resilience and

prosperity of the area.

Scan or click to

watch the video.

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Increase in demand for climate disaster adaptation/climate

resilient infrastructure increases awarded contracts

Type

Opportunity

Financial impact

category

Increased revenue

Anticipated time

horizons

S M L

Likelihood:

Limited Action: Almost certain Low Carbon: Almost certain

Potential impacts and

outcomes to business

@ Increased revenue through a greater

volume of awarded contracts in

adaptation-focused markets.

@ Higher revenue and margin potential

due to specialised capability giving

differentiated value-add track record

for delivering climate resilient

infrastructure.

@ Diversified revenue base via new

climate adaptation markets such

asCCUS.

@ Delivery of critical resilience

infrastructure reduces community

vulnerability and helps maintain

economic continuity during

climate-related shocks.

Potential adaptation and

promotion strategies

@ By leveraging its proven capability in

complex infrastructure delivery, the

Group would position itself

competitively in climate-adaptation

tenders, strengthening bid pipelines

and converting rising demand for

resilience infrastructure into

sustained revenue growth.

@ By providing critical assets that

strengthen community resilience

and support uninterrupted economic

activity, the Group enhances its

reputation as a trusted strategic

partner to governments and clients,

reinforcing future pipeline

opportunities and long-term demand.

Relevance to operations and value chain

UK transport: The UK transport sector is evolving rapidly due to urbanisation,

population growth and government policies on decarbonisation, resilience and

modal shift. To find out more about our approach to infrastructure resilience in the

strategic and local road network see page 16.

Flood and coastal defences: The Group’s construction and build service

capabilities are well positioned for flood andcoastal defence infrastructure assets.

To experience our story of protecting Cromer and Mundesley’s coastline see page 95.

Quantification methodology

Proposal developed in the reporting year

Resource efficiencies through energy and material use

Type

Opportunity

Financial impact

category

Reduced OPEX

Anticipated time

horizons

S M

Likelihood:

Limited Action: Almost certain Low Carbon: Almost certain

Potential impacts and

outcomes to business

@ Contribution to lower-carbon economy.

@ Reduced operating costs through

reduced energy use.

@ Reduced impact on natural

resources, which extends to not only

the reduced use of materials by

using resources efficiently, but also

the wider reduced impact on the

environment from the transport of

materials, mitigating the associated

carbon emissions, air quality and

traffic impacts of deliveries and

end-of-life use of materials.

Implementing a circular economy for

natural resources reduces the

associated impacts of waste

processing, recycling and landfill.

Potential adaptation and

promotion strategies

@ Utilise machine telemetry data

todrive efficiencies in plant and

equipment, improving

operationalefficiencies.

@ Upskilling our people through

role-specific targeted training on

climate change, resource efficiency

and supply chain Building New

Futures sustainability strategy pillars.

@ Continued implementation of

energy-demand side response

reduction solutions in our property

and project accommodation portfolio.

@ Actionable project-level resource

efficiency plans to avoid and

minimise waste.

Relevance to operations and value chain

UK rail: Balfour Beatty’s Rail team, working with Advanced Hydrogen Technologies,

successfully trialled Engine Carbon Clean (ECC) technology; the first infrastructure

company to apply this technology to rail-mounted plant. For more information see

page 45.

Carbon and materials: Decarbonising construction materials remains one of the

sector’s biggest challenges; to see how Balfour Beatty is tackling this through

supply chain integrity see page 51.

Zero avoidable waste: As part of our renewed approach to resource efficiency,

Balfour Beatty is embedding the Construction Leadership Council’s zero avoidable

waste route map across the business; for more information see page 50.

Quantification methodology

Proposal developed in the reporting year

Transitioning of owned plant, fleet and equipment to

lower‑carbon options

Type

Transition risk

Financial impact

category

Increased CAPEX

Anticipated time

horizons

S M L

Likelihood:

Limited Action: Almost certain Low Carbon: Almost certain

Potential impacts and

outcomes to business

@ Higher capital expenditures to

purchase lower-carbon alternatives.

@ Potential underutilisation of the

asset due to low uptake (due to high

cost, lack of infrastructure etc.)

leading to lower return on investment.

@ Failure to keep pace with

customerdemand.

@ A disparity grows between

geographies and regions with more

robust EV charging or hydrogen

supply infrastructure in comparison

to lagging jurisdictions where this

technology is not available to

implement at all or at scale.

Potential adaptation and

mitigation strategies

@ Assess the viability of construction

projects that utilise low-carbon

emission technology.

@ Enable capability by providing

training for low-carbon design

optioneering and use of new

technologies.

@ Strong collaboration with supply

chain to ensure low-carbon asset

requirements are met, implemented

through the Asset and Technology

Solutions team.

Relevance to operations and value chain

Asset and Technology Solutions: A specialist in-house team which provides

comprehensive plant, vehicle and equipment services to Balfour Beatty across the

UK. Strategic asset services include in-house solutions such as HGVs, tower and

crawler cranes, piling equipment, fire and security services, suction excavation,

modular buildings and driver risk. Across all these asset types the challenges of

availability and commercial viability of low-carbon options for equipment and

machinery, and the extent of EV charging infrastructure, have the potential to

impactthe Group’s ability to fulfil customer climate-related ambitions.

Specialised equipment: To deliver the Group’s complex construction and

infrastructure activities, specialist equipment and larger plant assets are often

required which do not, as yet, have low-carbon alternatives available in the market.

In the Rail sector, low-carbon options are not available for on-track fleet. Where

low-carbon alternatives do not yet exist, efficiencies for these assets will be

pursued by the Group.

Quantification methodology

Proposal reviewed and updated in reporting year

TOP 10 HIGHEST RATED CLIMATE-RELATED RISKS AND OPPORTUNITIES CONTINUED

CLIMATE CHANGE AND TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Extreme heat leads to damages to physical assets and

disruption at own sites

Type

Physical risk

Financial impact

category

Increased OPEX

Anticipated time

horizons

S M L

Likelihood:

Limited Action: Almost certain Low Carbon: Almost certain

Potential impacts and

outcomes to business

@ Reduced revenues from decreased

productivity and loss of working hours.

@ Impact on employee health for

outdoor working due to increased

risk of heat stress.

@ Increased expenses from

increasedmaintenance costs for

overheatingequipment.

@ Increased expenses from increased

energy usage for cooling.

Potential adaptation and

mitigation strategies

@ Consideration of contractual clauses

that provision for arrangements

covering disruption when

temperatures exceed a certain

threshold for prolonged periods.

@ Utilisation of existing policies and

procedures relating to heat stress;

heat illness prevention plans with

the ability to knowledge share and

apply best practice from areas

currently experiencing exposure to

heat stress to areas that may

become more affected under both

climate scenarios.

Relevance to operations and value chain

US Buildings and Civils: In operations where the likelihood of prolonged extreme

heat is more prevalent, the Group is proactive in managing the health, safety and

wellbeing implications of outdoor work in construction on our people. Policies and

procedures relating to heat stress are enacted on site and all sites operate a heat

illness prevention plan which provisions for scheduled shade and water breaks.

Allemployees who work in areas where heat illness is a potential hazard receive

training on heat illness prevention in English and Spanish. All signage on site relating

to identifying the signs of heat stress is bilingual.

Severe storms lead to damages to physical assets and

disruption at own sites

Type

Physical risk

Financial impact

category

Expected asset impact

Anticipated time

horizons

M L

Likelihood:

Limited Action: Almost certain Low Carbon: Almost certain

Potential impacts and

outcomes to business

@ Increased expenses from

assetdamage.

@ Increased expenses from

businessdisruption.

@ Severe storms lead to damages to

physical assets and disruption at

supply chain operations.

@ Increased expenses from business

disruption to key suppliers due to

higher costs due to ad-hoc

procurement of raw materials at

ahigher price.

@ Delays in projects due to missing key

raw materials leading to penalties for

missing key delivery timelines.

Potential adaptation and

mitigation strategies

@ Implementation of climate-resilient

project design provisioning for

enhanced site protection.

@ Integrate climate-scenario data

intoproject planning to anticipate

weather-related disruptions,

enabling earlier procurement of

at-risk materials, flexible scheduling,

buffer inventories, and modular or

off-site construction.

@ Reduce exposure to delay penalties

by strengthening contractual

provisions, adopting adaptive

project-controls systems, and

implementing early-warning

mechanisms that trigger mitigation

actions when supply chain or

weather-related risks emerge.

Relevance to operations and value chain

Silt pollution: Increased rainfall can increase the likelihood and impact of silt runoff

and landslides, disrupt site access and potentially create environmental incidents

with enforcement risk. Pollution from silt is one of the more frequent environmental

incidents, especially when working in rural and high elevation environments with

significant annual rainfall in the UK. Overhead line construction and refurbishment

projects delivered by the Power Transmission & Distribution business, the UK

Construction Regional Scotland business and operations in the US Pacific

Northwest are especially prone to these kind of events based on the locations

where these project operations take place.

Supply chain disruption: Our supply chain is similarly exposed to the operational

impacts of severe storms, which may disrupt their activities and consequently

impair the Group’s ability to deliver its own operations by restricting access to

essential construction materials and diminishing subcontractor capacity.

High‑speed wind leads to damage to physical assets and

disruption at own sites

Type

Physical risk

Financial impact

category

Expected asset impact

Anticipated time

horizons

M L

Likelihood:

Limited Action: Possible Low Carbon: Possible

Potential impacts and

outcomes to business

@ Delays to project delivery from

stand-down of sites and/or to rectify

damage caused by high-speed winds.

@ Increased costs as extreme weather

event classification may not be

provisioned for within contractual

clauses.

Potential adaptation and

mitigation strategies

@ Close monitoring of weather forecasts

toensure employee safety and

adequatepreparation.

@ Utilising third-party expertise for support

with climate modelling to understand

physical risk impacts.

@ Increase resilience of sites to extreme

weather events by implementing

contingency plans.

Relevance to operations and value chain

Safe operation of equipment: High winds can disrupt onsite activity as machinery

and equipment must be operated under safe wind speeds. Cranes, both tower crane

and luffer type, which are vital to project delivery when building at height for our UK

Construction, US Buildings, Major Projects and US Civils businesses, are most

affected by this.

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Establishment of strengthened or new regulations

onmaterial use and activities

Type

Transition risk

Financial impact

category

Increased OPEX

Anticipated time

horizons

S M L

Likelihood:

Limited Action: Almost certain Low Carbon: Likely

Potential impacts and

outcomes to business

@ Increased expenses from complying

with regulations.

@ Increased expenses from potential

litigation fees for non-compliance

fordisclosure.

@ Tighter material use rules may

reduce availability of certain

materials or limit approved suppliers,

creating supply bottlenecks and

longer lead times. This can affect

project schedules, increase the risk

of delays, and potentially impact

contractual performance.

Potential adaptation and

promotion mitigation

@ Implement enhanced procurement

frameworks that prioritise low-carbon,

certified, and regulation-compliant

materials, supported by robust

supplier due diligence processes

toensure early alignment with

emerging regulatory requirements.

@ Invest in research, trials and

deployment of low-impact and

circular economy materials, as well

as modern methods of construction

(MMC), to reduce exposure to

restricted materials and maintain

competitiveness under stricter

regulatory environments.

@ Establish proactive regulatory

horizon scanning and scenario

planning processes to anticipate

future requirements, integrating

these into design, planning and

delivery so that projects remain

compliant, cost-effective and

operationally resilient if regulations

expand or are strengthened.

Relevance to operations and value chain

Supply chain: Strengthened regulatory requirements on material use illustrated by

the UK Carbon Border Adjustment Mechanism (CBAM) significantly reshapes

construction and infrastructure supply chains. For more information on how the

Group is addressing this challenge see page 51.

Insurance premiums increase/become unavailable due

to higher cost of adaptation measures or more

stringent insurance policies

Type

Physical risk

Financial impact

category

Increased OPEX

Anticipated time

horizons

M L

Likelihood:

Limited Action: Unlikely Low Carbon: Unlikely

Potential impacts and

outcomes to business

@ Potential reduction in future projects

horizon if major infrastructure

projects become too costly to fund.

@ Diminished returns across

Infrastructure Investments assets.

@ Increased cost to the business.

Potential adaptation and

mitigation strategies

@ Review insurance arrangements.

@ Monitor insurance market shifts.

@ Engagement with broker and insurers.

@ Disclosure and transparency with

insurers for any nascent or new

project technology.

Relevance to operations and value chain

Insurance cost and availability for construction projects: An increase in the cost

of insurance may result in operations not being sufficiently covered by insurance or

insurance not being available across the full project lifecycle. Both scenarios would

result in project start-up delays or increased operating cost. In some cases, clients

may choose not to proceed with certain private sector opportunities should

insurance costs be too high or unrecoverable, potentially impacting future horizon

opportunities in this market segment in the longer term.

Insurance cost and availability for asset insurance and returns: The risk of

Infrastructure Investments assets becoming uninsurable is considered minimal,

however insurance premium increases could be seen for areas prone to severe

weather events, specifically in the US such as California and Florida.

TOP 10 HIGHEST RATED CLIMATE-RELATED RISKS AND OPPORTUNITIES CONTINUED

CLIMATE CHANGE AND TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

BOARD LEADERSHIP AND COMPANY PURPOSE

Group

Chair’s

introduction

DEAR SHAREHOLDER

On behalf of the Board, I am

delighted to present the 2025

Corporate Governance report.

The report provides an overview

of our governance framework, a

summary of the Board’s activities

throughout the year, and sets out

our priorities and focus for 2026.

The Board oversees the Group’s purpose, values

and strategy, ensuring that these are aligned to

the culture of the business. Throughout 2025,

the Board continued to focus on the delivery of

our Build to Last strategy, which is underpinned

by robust governance and internal controls.

Board activities

Substantial items that featured on the 2025

Board agenda included:

@ Board succession planning and recruitment,

notably the appointment of a new Group Chief

Executive, Philip Hoare;

@ ongoing oversight (through the Audit and Risk

Committee) of a project to implement an

enhanced Group-wide Internal Control

Framework (ICF) in anticipation of compliance

with Provision 29 of the 2024 UK Corporate

Governance Code;

@ the internal Board performance review;

@ update of the Directors’ Remuneration Policy;

@ updates on key projects; and

@ oversight of the compliance monitor’s reports

in respect of the US military housing business.

Changes to the Board’s

compositionin 2025

Throughout 2025, the Board underwent a

number of changes:

@ Leo Quinn, long-standing Group Chief Executive,

stepped down from the Board inSeptember

after 10 years of service. Hewassucceeded

by Philip Hoare. Philip’s appointment followed

an extensive search led by Odgers. Details about

Philip’s appointment process are set out in the

Nomination Committee’s report on page 119

and details of his induction process can

befound on page 120.

@ At the 2025 AGM, Rudy Wynter was formally

elected by shareholders as an Independent

Non-executive Director, and Michael Lucki

stood down from the Board as an Independent

Non-executive Director.

Changes to the Boardin 2026

As announced in February 2026, Myles Westcott

will join the Company as Chief Financial Officer

later this year. Philip Harrison will remain a Director

of the Company and will continue to fulfil his

current role until Myles joins, supporting the

business through its 2025 full years results in

March 2026. Following Myles’ appointment to

the Board, Philip will continue in an advisory

capacity for four months to ensure a smooth

transition. Myles’s appointment is in accordance

with the Board’s succession plan which included

an extensive search process supported by Odgers.

Details about this process will be set out in the

report of the Nomination Committee in 2026.

Diversity and inclusion:

theBoardand beyond

The Board has proudly continued to comply

withthe diversity targets set by both the

FTSEWomen Leaders Review and the Parker

Review, and we continue to leverage our

diversity to successfully lead the Group and

support the delivery of workforce diversity,

equity andinclusion initiatives.

Board performance review

In 2025, the Board underwent an internal Board

performance review. The review concluded that

the Board and its Committees continued to

operate effectively throughout 2025. Please refer

to pages 115 and 116 for more details on the

scope and outcomes of the review.

Dividend

At the 2026 AGM, due to be held on 7 May 2026,

the Board proposes a resolution, subject to

shareholder approval, to pay a final dividend of

9.8 pence per share.

Our approach this year continues to strike a

balance between investing in our business and

providing returns for shareholders, with the aim

of delivering against our Build to Last strategy

and promoting the long-term sustainable success

of the Group.

Charles Allen

Lord Allen of Kensington, CBE

Non-executive Group Chair

10 March 2026

Charles Allen

Lord Allen of Kensington, CBE

Non-executive Group Chair

Balfour Beatty plc | Annual Report and Accounts 2025

Strategic report Governance Financial statements Other information

Governance

ata glance

UKCORPORATE

GOVERNANCECODE

During the year, the Company was subject

to the Financial Reporting Council’s 2024 UK

Corporate Governance Code, which can be

found at: www.frc.org.uk.

This report, together with the reports from the Audit

and Risk, Nomination, Remuneration, and Safety

and Sustainability Committees, provide details of

how the Company has applied the spirit of the

principles of the Code (pages 99 to 160).

In 2025, the Company complied with all the

provisions of the UK Corporate Governance Code.

1. Board Leadership and Company Purpose Page(s)

A. Effective Board 100-105

B. Purpose, values and culture 104-106

C. Governance framework 111-113

D. Stakeholder engagement 107-110

E. Workforce policies and practices 108-109

2. Division of Responsibilities

F. Role of the Chair 112

G. Independence 112

H. External commitments and conflicts of interest 114

I. Board resources 113-116

3. Composition, Succession and Evaluation

J. Appointment to the Board 114-116

K. Board skills, experience and knowledge 102-103

L. Annual Board evaluation 115-116

4. Audit, Risk and Internal Control

M. External Auditor and Internal Auditor 127-129

N. Fair, balanced and understandable review 128-129

O. Internal financial controls and risk management 128-129

5. Remuneration

P. Linking remuneration to purpose and strategy 130-135

Q. Remuneration Policy review 136-145

R. Performance outcomes in 2024/25 146-160

BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED

HOW THE BOARD SPENT ITS TIME DURING 2025

KEY ACTIONS FROM 2025

@ Carried out a search for and recruited a new Group Chief Executive.

@ Oversaw Philip Hoare’s induction process.

@ Reviewed and updated the Directors’ Remuneration Policy for approval

byshareholders at the 2026 AGM.

@ Reviewed progress against the compliance monitor’s

recommendationsand action plans in respect of the US military

housingbusiness.

@ Undertook an internal Board performance review.

@ Oversaw the development of an enhanced Internal Control

Framework(ICF).

BOARD AND COMMITTEE SCHEDULED MEETINGS DURING THE YEAR

B B B B B B B B

A A A A

N N

R R R R

S S S

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

All Board and Committee meetings were fully attended in 2025.

Strategy, performance

andoperations 72%

Reviewing matters

discussed at Committee

meetings 4%

Governance and

othermatters 24%

Board 54%

Remuneration Committee 9%

Audit and Risk Committee 22%

Safety and Sustainability

Committee 11 %

Nomination Committee 4%

INDICATION OF TIME SPENT IN

BOARD MEETINGS

INDICATION OF RELATIVE TIME

SPENT IN BOARD AND COMMITTEE

MEETINGS

Key

Board

Audit and Risk Committee

Nomination Committee

Remuneration Committee

Safety and Sustainability Committee

Balfour Beatty plc | Annual Report and Accounts 2025

100

Strategic report Governance Financial statements Other information

BOARD GENDER

DIVERSITY

BOARD

INDEPENDENCE

DIVERSITY OF

NATIONALITIES

NON-EXECUTIVE

DIRECTORS’ TENURE

AGE DIVERSITY

BOARD COMPOSITION AND DIVERSITY

Female Male

White Ethnic minority

Executive Directors Independent Non-executive Directors

British American Australian

0-3 years 3-6 years 6-9 years

45-54 55-64 65+

Promoting the

long‑term sustainable

success of the Company

In this section

Board leadership and

Companypurpose

Group Chair’s introduction p99

Leading with experience

Board activities

Promoting a positive culture

Stakeholder engagement Report of the Workforce Engagement Lead p107

Division of responsibilities A robust governance framework p111

Composition, succession

andevaluation

Board composition p114

Board succession

Board evaluation

Nomination Committee Report of the Nomination Committee Chair p117

Board composition and succession

Diversity and inclusion

Safety and

SustainabilityCommittee

Report of the Safety and Sustainability Committee Chair p121

Safety performance and Zero Harm

Environment and sustainability

Audit and Risk Committee Report of the Audit and Risk Committee Chair p124

Financial reporting

External auditor

Risk management and internal control

Remuneration Committee Report of the Remuneration Committee Chair p130

Remuneration at a glance

Proposed Directors’ Remuneration Policy

Annual report on remuneration

Directors’ report Report of the Directors p161

BOARD ETHNIC

DIVERSITY

117

223

351

Balfour Beatty plc | Annual Report and Accounts 2025

101

Strategic report Governance Financial statements Other information

Leading with

experience

The Directors hold the necessary skills and experience

relevant to the sectors in which the Group operates,

enabling the Board to effectively set the strategic

direction and purpose of the Group and promote

itslong-term sustainable success.

PHILIP HARRISON

Chief Financial Officer

Appointed 1 June 2015

Nationality British

Tenure 10 years, 7 months

Experience

Philip has considerable financial expertise

and extensive experience of working in

large multinational manufacturing and

services businesses. Philip was appointed

as Chief Financial Officer in June 2015,

having previously served as Group Finance

Director at Hogg Robinson Group plc, and

as Group Finance Director at VT Group plc.

Prior to that, he was VP Finance at

Hewlett-Packard (Europe, Middle East

and Africa regions) and was amember

ofits EMEA board.

Philip’s earlier career included senior

international finance roles at Compaq,

Rank Xerox and Texas Instruments. Philip

is a fellow of the Chartered Institute of

Management Accountants.

Key external appointments

Philip was Non-executive Director and

Chair of the Audit Committee of Dowlais

Group plc, a role he stepped down from

inFebruary 2026.

Succession

As announced in February 2026, after more

than 10 years in the role, Philip Harrison

will step down from the Board later this

year, to be succeeded by Myles Westcott.

CHARLES ALLEN, LORD ALLEN

OF KENSINGTON, CBE

Non-executive Group Chair

Appointed 13 May 2021

Nationality British

Tenure 4 years, 7 months

Experience

Lord Allen has extensive corporate

experience across a range of sectors,

most notably in support services and

media. His previous positions include

Chair of the British Horseracing Authority,

Chair of ISS A/S, Executive Chair of EMI

Music, Chief Executive of ITV plc, Chief

Executive of Compass Group, Chief

Executive of Granada Group and Chief

Adviser to the British Home Office.

Charles was awarded a CBE in 2002, was

knighted in 2012 and was ennobled in 2013.

Key external appointments

Lord Allen sits in the House of Lords and

currently holds positions as Non-executive

Chair of THG PLC, Senior Director of

Global Media and Entertainment and

Chair ofthe Invictus Games Foundation.

PHILIP HOARE

Group Chief Executive

Appointed 8 September 2025

Nationality British

Tenure 4 months

Experience

Philip is a chartered civil engineer with

extensive leadership experience in

engineering, project management

andconstruction. Educated at Cardiff

University, he has held several senior

roles at AtkinsRéalis, including CEO of

itsUK and European division, President

ofthe global Engineering Services

business, and ultimately Group Chief

Operating Officer.

A strong advocate for the role of

infrastructure in economic growth, Philip

has led a Government task force on UK

business resilience with the Department

for Business and Trade; served on the

Board of Infrastructure Exports UK to

support UK companies in securing

international projects; and chaired the Rail

Supply Group, where he helped develop

anew Sector Deal for rail as part of the

Government’s Industrial Strategy.

Philip is a member of both the Institution

of Civil Engineers and the Chartered

Institution of Highways and Transportation.

Key external appointments

Philip does not hold any

externalappointments.

LEO QUINN

Outgoing Group Chief Executive

Leo Quinn stepped down as Group Chief Executive after

more than 10 transformational years. Joining in 2015,

during a particularly turbulent period in the Group’s history,

he led one of the UK infrastructure sector’s most

significant turnarounds. Through the Build to Last strategy,

he restored stability, strengthened delivery discipline and

rebuilt stakeholder confidence, reshaping Balfour Beatty

into a strong, resilient and market-leading international

infrastructure group.

Over his decade in post, the Group moved from

£371million average net debt in 2014 to £735 million

average net cash in 2024, returned £755 million to

shareholders between 2021 and 2024, and delivered a

261% total shareholder return. Known for his visible,

hands-on style and focus on a high-performance culture,

Leo handed over to Philip Hoare in September 2025,

leaving a business positioned for long-term growth.

BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED

Key

Committee Chair

Audit and Risk Committee

Nomination Committee

Remuneration Committee

Safety and Sustainability Committee

Tenure is as at 31 December 2025.

Balfour Beatty plc | Annual Report and Accounts 2025

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ANNE DRINKWATER

Senior Independent

Non-executiveDirector

Appointed 1 December 2018

Nationality British

Tenure 7 years, 1 month

Experience

Anne has significant experience in heavy

industry, including multiple large capital

expenditure projects with infrastructure

considerations and knowledge of doing

business in the UK and US. She was at

BP plc for over 30 years, holding a number

of senior strategic and operational roles

across multiple jurisdictions including the

US, Norway, Indonesia, the Middle East

and Africa culminating in the role of

President and CEO of the Canadian

business. Anne was previously a

Non-executive Director atAker Solutions

A.S.A. and at UK listed Tullow Oil plc,

where she served on a number of board

committees. She was previously Oil

andGas Adviser to the Falkland Islands

Government.

Key external appointments

Anne is Non-executive Deputy Chair

ofEquinor A.S.A. where she is also Chair

of the Audit Committee and a member

ofthe Safety, Sustainability and

EthicsCommittee.

R S N

BARBARA MOORHOUSE

Independent Non-executive Director

Appointed 1 June 2017

Nationality British

Tenure 8 years, 7 months

Experience

Barbara has extensive leadership

experience across the private, public

andregulated sectors. She was Group

Finance Director at Morgan Sindall plc,

Regulatory Director at South West Water

and Chief Finance Officer for two

international listed IT companies –

KewillSystems plc and Scala Business

Solutions NV. Latterly, she was Director

General at the Ministry of Justice and

theDepartment for Transport. Her most

recent executive appointment was as

Chief Operating Officer at Westminster

City Council. Sheis a fellow of the

Chartered Institute of Management

Accountants and an associate member of

the Association ofCorporate Treasurers.

Key external appointments

Barbara is Independent Chair of Agility

Trains East and Agility Trains West.

A N R

LOUISE HARDY

Independent Non-executive Director

and Workforce Engagement Lead

Appointed 1 April 2022

Nationality British

Tenure 3 years, 9 months

Experience

Louise has over 30 years of business and

leadership experience in the construction

and built engineering industry. A civil

engineer, she has held a range of senior

roles at London Underground, Bechtel,

AECOM and Laing O’Rourke, and as

infrastructure director responsible for the

portfolio of projects for the London 2012

Olympic Games.

Louise has also held a number of

non-executive roles in the public sector

and FTSE 250. Louise is a Fellow of

theInstitution of Civil Engineers, the

Chartered Management Institute and the

Women’s Engineering Society. Louise

won the European Women in Construction

and Engineering, Lifetime Achievement

inConstruction Award in 2019.

Key external appointments

Louise is currently a Non-executive

Director of Crest Nicholson Holdings plc

and Travis Perkins plc. Louise is also

Independent Chair of Oriel andaSTEM

Ambassador and DiversityChampion.

A S

RUDOLPH (RUDY) WYNTER

Independent Non-executive Director

Appointed 1 December 2024

Nationality American

Tenure 1 year, 1 month

Experience

Rudy has a Bachelor’s in Mechanical

Engineering from Pratt Institute and a

Master of Business Administration from

Fordham University in the US. He has

over 35 years’ experience in the gas and

electricity industry where he has served

in many leadership and senior operational

roles. His most recent role was as

President, National Grid New York,

leading the company’s regulated energy

delivery portfolio. Prior to this, Rudy was

Chief Operating Officer of National Grid’s

Wholesale Networks & Capital

Deliverybusiness.

Key external appointments

Rudy is currently a Non-executive

Director and Chair of the Nominating

andCorporate Governance Committee at

EnerSys Inc (NYSE:ENS); an independent

board member of El Paso Electric; and a

Senior Advisor to Accenture US in relation

to the Utility Sector.

GABRIELLE (GABBY)

COSTIGANMBE

Independent Non-executiveDirector

Appointed 8 March 2024

Nationality Australian

Tenure 1 year, 10 months

Experience

Gabby is an Aeronautical Engineer with

adiverse international career including

21years in the Australian Army. She was

previously Chief Executive Officer of the

logistics business, Linfox International

Group. In 2017, she joined BAE Systems

plc as Chief Executive Officer of BAE

Systems Australia before being promoted

to her current role of Group Managing

Director, Business Development and a

member of the Executive Committee.

Key external appointments

Gabby is currently the Group Managing

Director, Business Development for

BAESystems.

S N

ROBERT MACLEOD

Independent Non-executive Director

Appointed 8 March 2024

Nationality British

Tenure 1 year, 10 months

Experience

Robert is a highly experienced Chief

Executive Officer and Chief Financial

Officer and brings strong strategic,

financial, and commercial experience

tothe Board.

A Chartered Accountant by background,

he was formerly Chief Executive Officer

of Johnson Matthey plc from 2014 to

2022 and Chief Financial Officer from

2009 to 2014. Prior to this, he worked at

WS Atkins PLC, serving as Chief Financial

Officer for six years. Robert was a

Non-executive Director of Aggreko plc

from 2007 to 2016.

Key external appointments

Robert is currently a Non-executive

Director of Vesuvius plc; Senior

Independent Non-executive Director and

Chair of the Remuneration Committee

and member of the Audit and Nomination

Committee at the BSI; and Non-executive

Director and Chair of the Audit and Risk

Committee at the Defence Science and

Technology Laboratory.

A R N S A

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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED

The Board and its Committees: 2025 activities

“ In 2025, the Board focused

on effective governance,

oversight of strategy,

performance and risk,

andlong-term

sustainablesuccess.”

Charles Allen

Lord Allen of Kensington, CBE,

Non-executive Group Chair

PERFORMANCE

@ Reviewed routine reports from the executive

Directors on financial and operational

performance, people and stakeholders.

@ Reviewed Group strategy and approved the

Group’s budget.

@ Approved the Company’s Annual Report and

Accounts, financial results, trading updates

and ancillary documents relating to the Annual

General Meeting.

@ Reviewed the capital allocation framework

andits application.

@ Received ‘deep dive’ presentations and

reportson significant matters, key contracts

and projects.

@ Received updates on the ongoing control

improvements at the US military

housingbusiness.

HEALTH, SAFETY, WELLBEING

AND SUSTAINABILITY

@ Received verbal updates from the Safety and

Sustainability Committee following each

Committee meeting.

@ Received routine Group health, safety, wellbeing

and sustainability reports where a Safety and

Sustainability Committee meeting was not

scheduled in the same cycle of meetings.

@ Reviewed changes to the Group’s strategies,

policies and procedures in relation to health,

safety, wellbeing and sustainability.

@ Reviewed the environmental impact and

sustainability of the Group’s operations, and

the strategies and policies of the Group.

AUDIT AND RISK

@ Received verbal updates from the Audit and

Risk Committee following each

Committeemeeting.

@ Approved the Group Risk Appetite with

particular emphasis on risks associated

withproject execution and bid process.

@ Approved recommendations from the Audit

and Risk Committee relating to the fee and

appointment of the external auditor.

@ Reviewed and monitored the Group’s risk

profile, including a robust review of principal

and emerging risks.

@ Reviewed the effectiveness of the systems

ofrisk management and internal control.

@ Received reports on financial and accounting

issues and contract and commercial issues.

@ Approved the going concern statement and

assessment of viability, the Directors’ valuation

of the Investments portfolio and Principal

andEmerging Risks.

@ Received reports from the external auditor

inrespect of full and half year results.

LINK TO VALUES

LINK TO RISKS

STAKEHOLDERS

CONSIDERED

Lean

Expert

Lean

Safe

Sustainable

Lean

Trusted

@ Shareholders

@ Customers

@ Suppliers

@ Partners

@ Communities

@ Employees

@ Shareholders

@ Employees

@ Partners

@ Communities

@ Shareholders

@ Employees

@ Suppliers

1 42 73 8

9 13

3 2 113 8

p77 to 89

p21 to 23

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CULTURE

@ Monitored the Company’s purpose, values

andbehaviours.

@ Monitored engagement with key stakeholder

groups and reviewed the effectiveness of

stakeholder engagement mechanisms.

@ Received reports from the Directors on

workforce engagement activity, as well

asmanagement information on workforce

matters, including analysis of employee

engagement survey results.

@ Received updates on business integrity

including reports on Speak Up, the Group’s

whistleblowing service.

@ Approved the Group’s 2025 Modern

SlaveryStatement.

PEOPLE

@ Reviewed the effectiveness of the Board’s

approach to workforce engagement activities

and reporting.

@ Received verbal updates from the

Remuneration Committee following each

Committee meeting.

@ Received updates and supported workforce

diversity and inclusion initiatives.

@ Received an annual update on pensions.

@ Updated the Board Diversity and

InclusionPolicy.

GOVERNANCE

@ Reviewed succession plans for orderly succession

to both the Board and the Executive Committee.

@ The Board appointed a new

GroupChiefExecutive.

@ Oversaw the development of a diverse pipeline

for succession.

@ Reviewed conflicts of interest of the Directors.

@ Approved the formal matters reserved for the

Board and terms of reference for each of the

Board Committees.

@ Convened sub-committees of the Board where

necessary to deal with specific matters.

@ Approved an approach to attendance at

committee meetings.

@ The Board and its Committees undertook an

internal performance review.

@ Added GTIC and GBL processes to the Board

induction process.

BOARD VISIT TO DALLAS

In September, the Board visited the

Group’s US operations in Dallas, Texas,

combining formal Board and Committee

meetings with site visits and engagement

with management, employees and

clients. The programme enabled the

Board to review US strategy, operational

performance, safety and risk management

at first hand, and to test succession

planning and leadership capability.

Thevisit strengthened the Board’s

understanding of the US business,

informed its oversight of strategy

delivery, and reinforced the importance

of culture, safety and stakeholder

engagement in supporting the Group’s

long-term sustainable success.

Trusted

Safe

Expert

Trusted

Sustainable

Trusted

@ Employees

@ Communities

@ Partners

@ Investors

@ Employees

@ Communities

@ Shareholders @ Customers

@ Employees

@ Shareholders

@ Partners

@ Suppliers

61 75 10 11

6 10 12

6 11

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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED

Workforce engagement

Q. How does the board engage directly

with employees to understand culture

within theGroup?

Workforce engagement activities provide the Board

with direct insights into working environments and

employee attitudes and provide the Board the

opportunity to directly observe and assess how

employees practice Company values and embody

our desired behaviours and ethical standards.

The Directors report back to the full Board

following each engagement activity. Sharing

experiences of workforce engagement activities

as a Board facilitates broader exposure for each

Director than would otherwise be possible due to

the range and scale of the Group’s operations

across different sectors and geographies.

Whistleblowing

Q. How does the Board monitor

breaches of the Group’s cultural

andethical values?

The Audit and Risk Committee reviews Speak Up

statistics, as well as details of any material cases

raised through theSpeak Up helpline and the

progress of relatedinvestigations, which it in turn

reports to the Board.

Speak Up reports provide the Board with a view

of the nature of employee concerns and trends in

behaviours of the workforce. They also monitor

how any reported breaches of the Company’s

Code of Conduct are addressed, and controls

strengthened to prevent any further breaches.

Internal audit

Q. How does the Internal Audit

function support the Board’s oversight

of culture?

The Audit and Risk Committee reviews the

outcomes of internal audits judged to be less

than satisfactory, providing a direct line of sight

into areas of practice, policy and behaviours that

were not at the desired standard. The Board has

visibility of the progress of any corrective actions

taken and seeks assurance from management

that Company values are lived across the Group.

Modern slavery

Q. How does the Board ensure

working practices uphold a culture

ofhigh ethical standards designed

toprotect employees?

The Board reviews and approves the Group’s Modern

Slavery Statement. This provides the Board with:

@ a broad understanding of practices and

behaviours across the Group, and how these

align with the purpose, values and strategy of

the Group; and

@ oversight of steps taken to prevent modern

slavery and human trafficking within the Group

and its supply chain.

Culture on the ground

Q. How does the Board seek to

understand what life is like for

BalfourBeatty employees?

Analysis of the outputs of workforce engagement

mechanisms (e.g. the employee engagement

survey and other people-focused KPIs) enables

the Board to understand the employee experience.

This provides the Board with insights into working

environments, employee behaviours and

attitudes, as well as the workforce’s understanding

of the Group’s culture. It also enables the Board

to assess how working practices and behaviours

align with the purpose, values and strategy of

theGroup.

Health and safety culture

Q. How does the Safety and

Sustainability Committee monitor

andassess the embedding of

safetyculture?

The Safety and Sustainability Committee

receives reports on key health and safety

management KPIs, including:

@ statistics and trends of Lost Time Injury Rates;

@ metrics on safety observations reported by

employees; and

@ health and safety insights derived from the

employee engagement survey.

This enables the Committee to assess the

effectiveness of health, safety and wellbeing

practices and behaviours, and evidences the

extent of individual responsibility taken by

employees to proactively report safety concerns.

In accordance with our Zero Harm strategy,

health and safety culture is also one of the key

areas Board members seek to observe and

assess whilst undertaking site visits.

Our culture

in action

Q&A with Louise Hardy on

how the Board monitored and

assessed culture in 2025.

“ The Board sees Company

culture as a key mechanism

for driving ethical behaviours,

building stakeholder trust,

and ultimately achieving

ourlong-term strategic

objectives. It is therefore

vital that we assess

cultural embedding to

ensure our core values

andbeliefs are translated

into the everyday actions

and behaviours of

ouremployees.”

Louise Hardy

Independent Non-executive Director and

Workforce Engagement Lead

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WORKFORCE ENGAGEMENT STRATEGY

Step – 1 Identify topics of engagement:

The Workforce Engagement Lead and the HR function conduct a deep-dive analytical review of the

employee engagement survey and other key people-focused KPIs (e.g. voluntary attrition rates), to identify

specific topics for the next annual cycle of workforce engagement events. Previous topics have included

health and safety, environment and sustainability, diversity and inclusion, and culture and morale.

STAKEHOLDER ENGAGEMENT

Shaping the

future of

infrastructure

The Board takes a balanced

viewof stakeholder needs and

interests in all Board discussions

and decision making, with a

viewto promoting the long-term

sustainable success of the Group.

The Board designs the stakeholder engagement

framework, which shapes how relationships with

key stakeholders are developed and maintained.

The Board undertakes engagement initiatives

throughout the calendar year to better understand

the interests of the Group’s key stakeholders,

specifically its customers, workforce, supply

chain and strategic partners, communities,

governments and investors.

The Board on its own, however, cannot engage

meaningfully with every single stakeholder.

Toaddress this, stakeholder engagement is

supplemented by a network of mature executive

and business-led stakeholder relationships across

the Group. Feedback on wider stakeholder

engagement is reported to the Board to support

effective decision making and a timely recognition

of emerging stakeholder issues.

Report of the Board’s Workforce

Engagement Lead

I am pleased to present my 2025 Workforce

Engagement report.

The Board recognises that the workforce is the

Group’s most valuable resource and is pivotal to

building its long-term sustainable success. The

Board is therefore committed to building pathways

for constructive two-way dialogue with the

workforce, enabling the employee voice to be

present and heard within the boardroom, and

embedded within the decision-making process.

Under my remit as the Board’s Workforce

Engagement Lead, I am tasked with establishing

and shaping the Group workforce engagement

strategy. The Board’s workforce engagement

strategy isset out below.

Louise Hardy

Independent Non-executive Director and

Workforce Engagement Lead

10 March 2026

Step 2 – Identify targeted engagement:

The employee engagement survey review is also used to identify specific employee groups requiring

targeted engagement (e.g. a particular site, geographical region, or defined employee groups).

Step 3 – Schedule wider Board engagement:

Based on the identified themes and targeted groups, the Workforce Engagement Lead and HR will

establish a list of workforce engagement opportunities, supplemented by additional workforce engagement

events led by senior management and HR. Events include site visits, town halls and focus groups.

Step 4 – Schedule a programme of change initiatives:

An annual programme of workforce change initiatives will be established to address any areas identified for

improvement within the employee engagement survey. See pages 108 and 109 for the key workforce

engagement activities taken in 2025.

Step 5 – Board reporting:

The Board receives a detailed report and presentation on the key insights arising from the employee

engagement survey. Each Director is required to report back to the Workforce Engagement Lead on their

insights and outcomes arising from their individual engagement activities.

Step 6 – Effectiveness review:

The Board evaluates the effectiveness of workforce engagement annually, primarily by assessing the

impact and outcomes of change initiatives by reviewing year-on-year trends in employee engagement

survey results and other people-focused KPIs.

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STAKEHOLDER ENGAGEMENT CONTINUED

Key

workforce

engagement

actions taken

in 2025

2025 workforce engagement-led

change initiatives

In 2025, an array of initiatives were delivered

toaddress key themes arising from the 2024

employee engagement survey, as well as

insights derived from employee engagement

events undertaken throughout 2024.

SUSTAINABILITY

Employees wanted

to see further commitment to the

environment and local communities.

Actions delivered

@ Under the revised sustainability strategy,

Building New Futures, new targets were

announced to create £6 billion in social

value, and deliver 60,000 hours of

educational engagement by 2030

intheUK.

@ Formed a partnership with Syntech, a

UK manufacturer of biofuel, a renewable

alternative to fossil fuels.

@ Proactively worked with the UK Supply

Chain Sustainability School to convene

industry and lobby government on

environmental matters.

Outcomes

91% of employees who responded to

thesurvey confirmed they had seen the

Company take meaningful

sustainabilityaction.

DIVERSITY, INCLUSION

ANDRESPECT

Employees wanted

to see more action towards improving

diversity and inclusion.

Actions delivered

@ Continued to roll out Right to Respect

training to over 10,000 employees, with

a focus on acceptable behaviours and

how to challenge with confidence.

@ Developed new, in-house ‘Evolve’

training programmes to support women

and underrepresented groups.

@ Created a new internal site for

employees transitioning to retirement –

‘My Retirement Journey’.

Outcomes

86% of employees who responded to the

survey reported that they felt comfortable

at work (a 1% increase from the previous

year) and 85% felt they were treated

withrespect.

CAREER DEVELOPMENT

ANDSKILLS

Employees wanted

more opportunities for career development.

Actions delivered

@ Delivered 11,669 technical training

sessions across 4,489 courses.

@ Enhanced Supervisor skills, launching

anew Team Leader in Construction

Skills programme.

@ Launched a new Construction

Management job family, including three

new career progression courses and

Chartered Institute of Building (CIOB)

membership.

Outcomes

76% of employees who responded to the

survey felt that there are opportunities to

develop a career within Balfour Beatty.

An8% increase compared to 2024.

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Find out how we are creating value for our

stakeholders on pages 21 to 23.

Above: In 2025, Charles Allen, Group Chair and Philip Hoare,

Group Chief Executive attended Gammon's Leadership Connect

event in Hong Kong.

Employees wanted

better systems and resources.

Actions delivered

@ Made a UK sector-leading investment in

AI with Microsoft Copilot.

@ Upgraded more than 3,300 laptops

andsmart devices to the latest

operatingsystems.

Outcomes

A pilot study of Microsoft Copilot

undertaken by 350 colleagues

demonstrated that 72% experienced

increased productivity, saving an average

of 30 minutes per day. These efficiency

gains are now being realised by 7,500

colleagues across the UK.

ONBOARDING

Employees wanted

simpler, more efficient processes and

systems that improve the experience for

new starters, managers and candidates.

Actions delivered

@ Launched a new digital Onboarding

Portal in June 2025 to streamline

pre-employment tasks.

@ Automated key onboarding activities,

improving ‘day one readiness’ and

reducing manual effort.

@ Optimised core HR platforms.

@ Incorporated feedback from over 500

employee ideas into the system design.

Outcomes

Since launch, the enhanced process has

improved the onboarding experience for

more than 1,000 new starters, given

managers clearer visibility through better

tracking of onboarding progress, and

enabled more seamless recruitment and

onboarding data flows, delivering improved

insight and increased efficiency that

supports lower operating costs.

ETHICS AND TRANSPARENCY

Employees wanted

more information and transparency

onethics.

Actions delivered

@ Offered specialist ethics advice across

sites to allow employees to learn more

and ask questions.

@ Added new Conflicts of Interest and

Gifts and Hospitality training in 2025.

Outcomes

Employee engagement survey results

improved by 13% in relation to reports of

witnessing unethical behaviour from 2024.

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STAKEHOLDER ENGAGEMENT CONTINUED

Board-led workforce engagement

events in 2025

During 2025, the Board carried out a full schedule

of site visits and in-person engagement activities.

Workforce engagement helps to build a strong

picture of life as a Balfour Beatty employee and

supports robust and considered Board decision

making that creates value for our workforce.

Investors

Investors play a valuable role in the corporate

governance of the Company. The Board is committed

to maintaining an open dialogue with its investors,

which is achieved through a programme of

structured engagement, including one-to-one

meetings and conference attendance. A calendar

of shareholder events can be found to the right.

Institutional investors

The Group Chair, Group Chief Executive, and

Chief Financial Officer held meetings with

individual institutional investors throughout 2025.

In addition, the executive Directors conducted

analyst presentations following the announcements

of the Group’s financial results.

Either on request by investors or at Company

presentations and one-to-one meetings, Committee

Chairs will engage with investors on matters

specific to the remit of their respective Committees.

The Senior Independent Non-executive Director

is also available to shareholders as a separate

channel to report any other views or concerns.

Inaddition, management engages with proxy

advisory firms to support them in their reporting

to their members.

The Board receives biannual reports from the

Head of Investor Relations summarising analyst

research briefings and changes to institutional

shareholdings, as well as ad hoc reports on share

price movements.

Engaging directly with shareholders is integral

toeffective Board decision making that promotes

shareholder and wider stakeholder value. It provides

an opportunity for candour, insight, and the

means to build relationships, transparency

andtrust with key shareholders.

Considerations following the

2025AGM

Comments from shareholders at, or in relation

to,the AGM are considered by the Board, and

where relevant, its Committees. Following the

2025 AGM, where Resolution 2 (approval of the

Directors’ remuneration report), passed with

70.25% support, the Board issued a short

statement on the Company’s website setting

outits approach to shareholder consultation

onDirector remuneration both pre and post

theAGM.

Retail investors

The Company’s website has a section dedicated

to providing investors with a range of valuable

information about the Company, including published

Annual Reports and results announcements; a

financial calendar of events; details on the

Company’s corporate governance arrangements;

the Group’s sustainability strategy, Building New

Futures; andregulatory news announcements.

Retail investors are also encouraged to raise any

questions or queries they may have with the

Company Secretary.

Annual General Meeting (AGM)

The AGM provides an opportunity for all investors

to engage directly with the Board in person.

CALENDAR OF SHAREHOLDER EVENTS

March 2025

@ Group Chair’s investor

meetings – Group Chief

Executivesuccession

@ Full year results presentation

@ London roadshow

@ Berenberg UK Corporate

Conference

@ Jefferies Pan-European

Mid-Cap Conference

May 2025

@ Annual General Meeting

@ Trading update

@ UBS Pan-European Small

and Mid-CapConference

@ European roadshow –

Milan, Lugano

June 2025

@ Private client fund

manager roadshows –

Birmingham, Leeds, York

August 2025

@ Half year results

presentation

September 2025

@ UK roadshow

@ US virtual roadshow

November 2025

@ Private client fund manager

roadshow – London

@ Virtual roadshow –

GroupChief

Executiveintroductions

December 2025

@ Bank of America

European

MaterialsConference

@ Trading update

@ US virtual roadshow

April 2025

@ Annual Report and

Accounts published

@ North America roadshow

– New York, Chicago,

Toronto

@ HSBC UK Corporate and

Investor Conference

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The Board is the principal decision

making body of the Group, with

authority for specific matters

being delegated to Committees

of the Board. Responsibility for

the day-to-day operation of the

Group is formally delegated by

the Board to the Group Chief

Executive who manages the

operational running of the business

through the Executive Committee.

The members of the Executive Committee each

have responsibility for particular business units or

enabling functions, with authority being further

delegated to appropriate individuals throughout

the Group based on their role andseniority.

A high-level summary of the Group’s governance

framework, illustrating the flow of authority as it

is delegated throughout the Group, is shown to

the right.

Nomination Committee

@ Oversees the structure and

composition of the Board.

@ Conducts succession planning.

@ Oversees the appointment and

induction processes of new Directors.

@ Makes recommendations regarding

Directors’ independence against the

Code’s criteria.

Remuneration Committee

@ Reviews the Remuneration Policy

for Directors and Executive

Committee members.

@ Approves the remuneration of the

Group Chair, the Executive Directors

and Executive Committee members.

@ Oversees the implementation of the

Remuneration Policy.

Audit and Risk Committee

@ Reviews the form, content

andprocess for preparing the

financial statements.

@ Reviews principal risks and internal

controls, and the effectiveness of

the risk management framework.

@ Monitors the independence and

effectiveness of the Internal Audit

function and external auditor.

Safety and

SustainabilityCommittee

@ Reviews strategies, policies and

performance in relation to health,

safety, wellbeing and sustainability.

@ Reviews the environmental

impactand sustainability of the

Group’s operations.

@ Reviews in detail incidents where

significant harm has occurred.

Group Tender and Investment Committee

@ Responsible for the content, maintenance and operation of the Gated Business Lifecycle which forms the core process for evaluating and monitoring the governance

ofoperational projects.

Construction Services

@ Our Construction Services

businesses operate across

infrastructure and buildings

markets in the UK, the US and

through the Gammon joint venture

in Hong Kong.

Support Services

@ Our Support Services businesses

operate principally in the UK,

designing, upgrading, managing

and maintaining critical national

infrastructure.

Enabling Functions

@ Bring together shared services

(Legal, Finance, IT, Procurement,

Communications, HR, Health,

Safety and Wellbeing, and

Sustainability) to support the

delivery of business objectives.

Infrastructure Investments

@ Our Infrastructure Investments

business develops and finances

both public and private

infrastructure projects in the UK

and the US.

EXECUTIVE COMMITTEE

@ The Group Chief Executive manages the operational running of the Group through the Executive Committee, members of which are responsible for particular business units

orenabling functions. The Executive Committee oversees the implementation of Group strategy, and matters relating to health and safety, sustainability, employee matters

(including succession and remuneration), legal and governance, technology and innovation, and communications and investor relations.

@ Responsibility for the day-to-day running of each of the strategic business units and enabling functions is delegated to individual members of the Executive Committee.

BALFOUR BEATTY PLC BOARD OF DIRECTORS

@ Establishes the Company’s strategic direction

andpurpose.

@ Assesses and monitors Company culture and

promotes the long-term success of the Company.

@ Approves the Company’s financial statements

andbudget.

@ Ensures maintenance of a framework of prudent and

effective controls.

@ Ensures effective engagement with stakeholders

including employees.

@ Approves matters relating to the composition of the

Board and Committees.

A robust

governance

framework

DIVISION OF RESPONSIBILITIES

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This section sets out the defined roles

and responsibilities of Board members

and outlines the support Directors

receive to assist them in discharging

their duties in accordance with

theCompanies Act, and their

responsibilities under the

UKCorporateGovernance Code.

Role of the Board

In accordance with Principle A of the UK Corporate

Governance Code, the primary role of the Board is

to effectively lead the Group by promoting the

long-term sustainable success of the Company,

generating value for shareholders and contributing

to wider society.

Each Director has a defined role with individual

duties, with a clear division of responsibilities,

particularly between the Group Chair (leadership

ofthe Board) and the Group Chief Executive

(leadership of the Company’s business). The

balance of responsibilities at Board level set out

here supports a balanced approach to decision

making, ensuring that no one individual has

unfettered powers.

Throughout the year the Board met sufficiently

frequently to fully discharge its duties. The Board

held eight scheduled meetings in the year, as well

as ad hoc and Board sub-committee meetings to

manage matters arising outside the formal

schedule of meetings.

Time commitment of Directors

The Board recognises the importance of individual

members having sufficient time to discharge their

duties effectively. On an annual basis, each

Director declares their external appointments and

commitments to the Board as part of the conflicts

of interest declaration. Any additional external

appointments are subject to Board approval to

mitigate the risk of overboarding.

LEADERSHIP

OVERSIGHT

GOVERNANCE

Independent Non-executive Director meetings

The Independent Non-executive Directors, led by the Group Chair, hold regular scheduled meetings without the executive Directors present prior to, or following

Board meetings. The Independent Non-executive Directors meet annually, led by the Senior Independent Non-executive Director and without the Group Chair

present, as part of the Board performance review to discuss the Group Chair’s performance.

Company Secretary

The Board is supported by the Company Secretary who, in accordance with Principle I of the UK Corporate Governance Code, ensures that the Board is able to

function effectively and efficiently, and is available to all Directors, maintaining dialogue with each of them on an individual basis.

In addition to providing logistical support for Board and Committee meetings, the Company Secretary is responsible for advising the Board on all corporate

governance matters, supporting the annual Board effectiveness review, managing policies and processes related to the Board, supporting induction and ongoing

training and development of the Directors, and ensuring that the Directors receive accurate, timely information required for them to discharge their duties.

Senior Independent Non-executive

Director

@ Acts as a sounding board for the Group Chair.

@ Assumes the role of intermediary for the Group

Chief Executive, Non-executive Directors and

shareholders as required.

@ Leads the review of the Group Chair’s performance.

@ Chairs the Nomination Committee when the Group

Chair’s succession is considered.

@ Available to meet with shareholders.

Workforce Engagement Lead

@ Oversees and monitors the workforce

engagementstrategy.

@ Identifies topics of engagement for Board approval.

@ Conducts ongoing analysis of the employee base

toidentify targeted engagement activities.

@ Provides opportunity for two-way feedback from

theworkforce.

Independent Non-executive

Directors

@ Oversee the Company’s strategy and provide

guidance and expert advice to management.

@ Monitor Group performance against objectives, and

hold management to account.

@ Review management proposals.

@ Provide constructive challenge to management.

@ Serve on Board Committees which are responsible

for specified governance roles.

Group Chief Executive

@ Responsible for the day-to-day

management of the Group and the

Group’s performance.

@ Enables planning and execution of the

Company’s strategic direction and

purpose as set by the Board.

@ Leads the Group.

@ Drives the cultural tone of the Group.

@ Ensures the Board is kept abreast of

the views of the workforce, and any

divergent views amongst members

ofthe Executive Committee.

Non-executive Group Chair

@ Leads the Board and demonstrates

objective judgement.

@ Encourages high standards of

corporate governance.

@ Sets the Board agenda and drives

Board effectiveness.

@ Promotes a culture of constructive

debate, mutual respect and openness.

@ Ensures that Directors receive

accurate, timely and clear information.

@ Leads shareholder and wider

stakeholder engagement.

DIVISION OF RESPONSIBILITIES CONTINUED

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Corporate

governance

in action

The Company’s governance

framework operates to support

the delivery of its strategy by

ensuring that business is conducted

within a framework of robust

principles and procedures and

inan orderly fashion.

The Group’s independent Internal Audit function

undertakes an annual programme of risk-based

audits across the Group’s operations. All audit

reports are shared with the relevant business

unitor enabling function management who

areaccountable for implementing appropriate

measures to address any risks or control

weaknesses. The results of key internal audit

activities are shared with the executive Directors

and external auditor and scrutinised by the Audit

and Risk Committee on aregular basis. Further

details can be found on page 129 of the Audit

and Risk Committee report.

Throughout 2025, in accordance with the new

requirements set out under Provision 29 of the

2024 UK Corporate Governance Code, the Audit

and Risk Committee oversaw the continued

development of an enhanced Internal Control

Framework (ICF), with a focus on the performance

and effectiveness of the Group’s material controls.

Please refer to page 129 in the Audit and Risk

Committee report for a case study of the

ICFproject.

The Board

Principally, the Board establishes the strategic

direction and purpose of the Group and assesses

the basis upon which the Company sustainably

generates and preserves value for a range of

stakeholders over the long term. The Board

ensures that risks and opportunities facing the

Group are identified and, where appropriate,

mitigated and exploitedeffectively.

For a deeper look at the role of the Board, scan or

click to review matters reserved for the Board.

Board and Committee meetings

The Group Chair sets structured agendas for

each Board meeting in consultation with the

Group Chief Executive and Company Secretary.

Capacity is maintained on the agenda for each

meeting to allow for the timely consideration of

matters as they arise during the year. The Group

Chair seeks a consensus at Board meetings, but,

if necessary, decisions are taken by majority.

Ifany Director has concerns onany issues that

cannot be resolved, such concerns are noted

inthe Board minutes. Nosuch concerns arose

in2025.

The key activities of the Board in 2025 are detailed

on pages 104 and 105. These activities are

discussed under the value pillars of Lean, Expert,

Trusted, Safe and Sustainable which underpin the

Board’s decision-making process.

The Board has delegated certain responsibilities

to four main Board Committees, the Audit and

Risk Committee, the Nomination Committee, the

Remuneration Committee, and the Safety and

Sustainability Committee. The principal activities

of these Committees are set out in the Committee

reports on pages 117, 121, 124, and 130.

All Directors are invited to attend all Committee

meetings, with the exception of instances where

there is a conflict of interest. Additional attendees

are invited to attend Board and Committee

meetings at the discretion of the relevant Chair.

Risk and internal control

Risk management

The Board is responsible for undertaking a robust

assessment of the principal risks facing the

Group, as described on pages 76 to 89 of the

Strategic report, and ensuring that appropriate

mitigating actions are in place to manage them.

This includes those risks that would threaten the

Group’s business model, future performance,

solvency and liquidity. The Group’s approach to

risk management is set out on pages 72 to 89.

Internal control

The Board has overall responsibility for the

Group’s systems of risk management and internal

control and regularly reviews their effectiveness.

The Audit and Risk Committee has undertaken

this review throughout the financial year. Further

details can be found on page 129 of the Audit

and Risk Committee report.

The Group uses the Enterprise Risk Management

framework across the business to ensure

consistency in application of risk systems and

controls and that exposure to significant risks is

managed effectively. The Board is cognisant of

the fact that such a system can only manage,

rather than eliminate, the risk of failure to achieve

business objectives and can only provide

reasonable, but not absolute, assurance against

material misstatement or loss.

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COMPOSITION, SUCCESSION AND EVALUATION

The Board’s diverse array of technical skills,

experience, cognitive abilities, and balance of

independence, fosters insightful and constructive

debate, which in turn leads to considered,

balanced and risk-adjusted decision making that

promotes long-term shareholder and stakeholder

value and facilitates the Board’s ability to convert

risks into opportunities.

The range of skills and experience within the

Board is demonstrated in the skills matrix opposite.

Conflicts of interest and

independence

The Board has a number of processes and

procedures in place to assess conflicts of interest

and the independence of Non-executive

Directors against the criteria set out in the Code:

@ each Director has a duty to disclose any actual

or potential conflict of interest for consideration

and approval, if appropriate, by the Board;

@ Directors are requested to declare any conflicts

at the start of all Board and Committee meetings;

Maintaining an

appropriate

balance

The Board welcomed

Philip Hoare in2025 as the

newGroup Chief Executive.

KEY SKILLS AND EXPERIENCE OFDIRECTORS

Skills and

experience

Non-executives Executives

Charles

Allen

Anne

Drinkwater

Robert

MacLeod

Gabby

Costigan

Barbara

Moorhouse

Louise

Hardy

Rudy

Wynter

Philip

Hoare

Philip

Harrison

CAPEX-heavy

organisations

Major contracting

Risk

management

People and

remuneration

Finance

UK market

experience

Health

Government

engagement

Construction

sector

CEO experience

ESG

US market

experience

Hong Kong

market

experience

Digital

Expert Advanced General Limited

@ the Nomination Committee conducts an annual

review of the Conflicts of Interest Register and

seeks confirmation from each Director of any

changes to their external appointments; and

@ there is also a formal process in place for the

approval of all new external appointments of

Directors. In considering such appointments,

the Board will consider any conflicts of interest

that may arise, as well as the Directors’ capacity

to continue discharging their duties effectively

in order to mitigate the risk of overboarding.

The Nomination Committee and the Board have,

after completing all of the processes detailed

above, confirmed the continuing independence

and objective judgement of each Independent

Non-executive Director, and the overall

independence of the Board in line with

therecommendations of the Corporate

Governance Code.

Board succession

Board and Executive Committee succession

plans are based on merit and assessed against

objective criteria, whilst also being managed

through the lens of promoting diversity. Succession

and development plans are reviewed annually by

the Nomination Committee, to support the personal

and professional development of key individuals.

Succession planning in 2025 led to the succession

of long-standing Chief Executive Leo Quinn by

Philip Hoare who joined the Company in September

2025. For further information on Philip Hoare’s

appointment process, please refer to page 119.

The Board is compliant with the diversity targets

forgender and ethnic minority board representation

set by the FTSE Women Leaders Review and the

Parker Review. We are delighted that the boardroom

is more representative of our workforce, our

clientsand our supply chains, and the Nomination

Committee will maintain its focused oversight of

diversity, equity and inclusion initiatives across the

Group to ensure that all employees are afforded

theopportunity to succeed at Balfour Beatty.

The Board is also committed to supporting and

developing a diverse pipeline of candidates for

senior manager and subsidiary director roles

within the Group. For further information on

active diversity initiatives within the Group please

refer to page 55.

Director reappointment

All Independent Non-executive Directors

undertake a fixed term of three years subject to

annual re-election by shareholders. The fixed

term can be extended and, consistent with best

practice, would not go beyond nine years unless

exceptional circumstances were deemed to

exist. The current tenure of Non-executive

Directors is set out on page 101.

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Training and development

The Board receives a full programme of briefings

and updates annually across all areas of the

Company’s business from the Executive Directors,

members of the Executive Committee, senior

executives, and advisers. In addition, training and

development sessions are arranged on specific

areas during the year as required.

Any Director can request further information to

support the fulfilment of their individual duties or

collective Board role and, throughout the year,

the Group Chair maintains a dialogue with

individual Directors to identify any specific

training requirements. Where appropriate, such

training isintegrated into Board meetings to

ensure all Directors can benefit. Alternatively,

training sessions may be conducted through

formal presentations, one-on-one meetings, or

site visits, providing opportunities to delve

deeper into specific initiatives or projects.

Information and support

During the year, the Company Secretary advised

the Board on matters related to governance,

ensuring Board procedures were followed and

relevant statutory and regulatory requirements

were complied with. The Company Secretary

hasresponsibility for facilitating the timely

distribution of information between the Board

and its Committees and the Board of Directors.

The Directors have direct access to the Company

Secretary for advice, who can arrange, at the

Company’s expense, for the Directors to receive

independent professional advice where appropriate.

BOARD PERFORMANCE

REVIEW PROCESS

Year 1 (2025)

Internal assessment

@ Evaluation co-ordinated internally by Group

Chair, Committee Chairs and the Company

Secretary.

@ Separate questionnaires prepared on a

range of issues related to the Board and

Board Committees.

@ One-to-one meetings held between the

Group Chair and each Director to review

responses and for individual appraisal. The

Senior Independent Non-executive Director

leads the review of the Group Chair.

Year 2 (2026)

Internal assessment

@ Review outcomes from previous performance

review

and progress against each action.

@ All Directors complete the performance

reviewquestionnaires.

@ One-to-one meetings are held between

the Group Chair and each Director to

review responses and for individual appraisal.

@ The Senior Independent Non-executive.

Director leads the review of the Group Chair.

Year 3 (2027)

External assessment

@ Independent external performance

reviewerappointed.

@ Performance reviewer works with the

Group Chair to define the scope of review.

@ Review conducted by means of

questionnaires and interviews with Board

Directors, observations of Board

meetings, and a review of the quality and

timeliness of Board and Committee packs.

Performance action plan and progress

The Board approved and implemented a 2026 action plan to address the findings of the 2025 internal

Board performance review. A summary of the 2026 action plan can be found on page 116, together

with a summary of the progress and outcomes of the 2025 action plan arising from the 2024 external

performance review undertaken by Egon Zehnder.

Board performance review

To uphold best practice in accordance with the UK Corporate Governance Code, the performance

ofthe Board, its Committees and individual Directors are assessed annually through a formal

performance review. Reviews follow a three-year cycle, with an external review at least every three

years. The review in respect of 2025 was undertaken internally.

Process – Board and Committee

performance review

The Group Chair and Committee Chairs, with

the Company Secretary, defined and set the

scope of the reviews. The internal review was

undertaken through a combination of:

@ quantitative insights (with data obtained

from questionnaires completed anonymously

by each Board member); and

@ qualitative insights (from the comments

section of the questionnaire, as well as

one-to-one performance reviews held by the

Group Chair with individual Board Directors).

The Company Secretary collated the qualitative

and quantitative insights and presented the

results of the reviews to the Group Chair and

the Committee Chairs who led a discussion on

the results with the Board and Committee

members in early 2026, together with a series

of proposed recommendations to enhance the

Board’s and the Committees’ performance.

The scope of the performance review

The internal review included a review of:

@ the performance and effectiveness of

theBoard, and each of its Committees;

@ the performance and effectiveness of the

Group Chair and individual Board Directors;

and

@ the composition and balance of skills,

experience and knowledge across

theBoard, and within each of the

Board’sCommittees.

Findings

The findings of the performance review

concluded that the Board and Committees

continued to function effectively. The review

identified the following strengths:

@ strong Board effectiveness, with open

dialogue, constructive challenge and clear

engagement with management; and

@ robust oversight, including risk, controls and

a balanced mix of skills and experience

across the Board.

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ACTIONS AND OUTCOMES OF THE 2024 BOARD PERFORMANCE REVIEW

2024 recommendations 2025 action plan Outcomes

Enhance the succession

planning processes.

@ Consider how strategy impacts the structure and capabilities of the

management team.

As part of the succession planning process for long-standing Group Chief Executive, Leo Quinn, the

Nomination Committee reflected on the skills and experience needed to lead the Group in delivering the Build

to Last strategy. This in turn shaped the specification for the external recruitment process for his successor,

which resulted in the appointment of Philip Hoare in September 2025.

Allocate more time for

strategy to be considered by

the Board.

@ Increase the opportunities for strategy to be considered by the Board.

@ Encourage increased opportunities for senior managers to present to

theBoard.

Philip Hoare, our new Group Chief Executive, has introduced a series of strategy deep-dive sessions for the

Board. These sessions invite senior leaders responsible for delivering key strategies to attend and present at

Board meetings. This approach provides the Board with enhanced strategic oversight and ensures that

supporting departmental and business-unit level strategies are aligned and working together to deliver on our

overarching Build to Last strategy.

Review processes for the

Board monitoring project

performance.

@ Continue to encourage Independent Non-executive Directors to attend

GTIC meetings (where the bid amount is below the £1 billion threshold

normally required for Non-executive attendance).

Independent Non-executive Directors are encouraged to attend at least two GTIC meetings each year. To

support the Non-executive Directors in achieving this, they are invited to attend GTICs below £1 billion in value.

Consider how remuneration

can improve retention.

@ Consider how to use remuneration metrics to enhance performance and

improve retention.

The Company operates the following performance-based remuneration awards:

@ Annual Incentive Plans (AIPs): Structured, performance-driven plans aligned to stretching financial

measures and, where appropriate, project milestones. Payments are made following assessment and

approval of performance. For senior managers, a portion of the award is deferred into shares for three years

to support retention.

@ Long Term Incentive Plans (LTIPs): Share-based awards for selected senior managers, measured over a

three-year performance period against stretching Group targets set by the Remuneration Committee.

@ Restricted Share Plans (RSPs): Share awards granted to high-performing individuals, subject to a

three-year vesting period to support retention of key talent.

Clarify rules of engagement

in Committee meetings.

@ Clarify rules of engagement of non-Committee members during

Committee meetings.

The Board agreed that all Independent Non-executive Directors who are not Committee members may attend

Committee meetings on an optional basis. Committee Chairs will also, where appropriate, invite non-members

to contribute to discussions to ensure a broad and diverse input.

RECOMMENDATIONS AND ACTION PLAN FROM THE 2025 BOARD PERFORMANCE REVIEW

2025 recommendations 2026 action plan

More structured and

ongoing discussion

ofstrategy.

@ The Board will enhance the way it considers strategy through the year, including more regular discussions and focused sessions on key strategic topics, to support long-term value creation.

@ The Board will strengthen its oversight of delivery against the Group’s strategy, with improved monitoring of progress and outcomes throughout the year.

Enhanced

successionplanning.

@ The Board will continue to develop and refresh succession plans for the Board and senior management, ensuring a strong and diverse pipeline to support continuity and long-term success.

Improved market

awareness and

competitiveinsight.

@ The Board will deepen its understanding of market dynamics, competitive activity and performance against strategic plans to support effective decision-making.

More dynamic approach

torisk oversight.

@ The Board will further develop its approach to risk management, ensuring that emerging and principal risks are considered in a timely and forward-looking manner.

Increased focus on

customers and wider

stakeholders.

@ The Board will strengthen its engagement with key customers and stakeholders, using feedback and insights to inform strategy, risk oversight and decision-making.

COMPOSITION, SUCCESSION AND EVALUATION CONT INUED

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NOMINATION COMMITTEE

Membership

Charles Allen (Committee Chair)

Anne Drinkwater

Robert MacLeod

Barbara Moorhouse

Gabby Costigan

Role and responsibilities of

theCommittee

@ Make recommendations to the Board

onthe appointment, reappointment,

orretirement of Directors.

@ Propose and oversee induction plans for

newly appointed Board members.

@ Make recommendations regarding

Directors’ independence.

@ Monitor the balance, composition,

diversity, structure, and size of the Board

and its Committees.

@ Conduct and monitor Board and Executive

Committee succession planning.

Key actions from 2025

@ Completed a search for a new Group

Chief Executive.

@ Oversaw the induction programmes for

newly appointed Directors, Philip Hoare

and Rudy Wynter.

Priorities for 2026

@ Review the Board and Executive

Committee’s succession plans.

@ Conduct an executive search for a new

Independent Non-executive Director to

replace Barbara Moorhouse who will reach

the end of her nine-year tenure in2026.

@ Deliver a comprehensive induction and

handover to the incoming Chief Financial

Officer, Myles Westcott.

Charles Allen,

Lord Allen of Kensington, CBE

Chair of the Nomination Committee

REPORT OF THE

NOMINATIONCOMMITTEE

I am pleased to present the report

of the Nomination Committee,

setting out the key activities

undertaken throughout 2025

andthe priorities for 2026.

Throughout 2025, the Committee continued to

focus on the long-term succession planning for

the Board, its Committees, the Executive Committee

and their direct reports. The Committee remained

mindful of the importance of diversity across

theleadership population, specifically the

recommendations set out in the FTSE Women

Leaders Review, the Parker Review, and the

Listing Rules.

The search for a new

Group Chief Executive

The Nomination Committee led the search for

anew Group Chief Executive supported by the

executive search firm Odgers. The Committee

oversaw an independent and objective process

designed to identify candidates who could

strengthen the Board’s capabilities and support

delivery of the Group’s Build to Last strategy.

Inassessing potential candidates, the working

group considered the composition of the Board,

and the balance of skills, knowledge and

experience. Following this rigorous process, the

Committee recommended the appointment of

Philip Hoare tothe Board, who joined the Board

on 8September 2025.

Philip brings with him a wealth of knowledge and

leadership experience in the engineering, project

management and construction sectors, which he

obtained from his long and distinguished career

at AtkinsRéalis Group Inc. For more information

Philip’s professional background, please see his

biography on page 102.

For more information on Philip Hoare’s

appointment and induction process, please

referto pages 119 and 120 respectively.

Diversity and inclusion on the Board

The Board is compliant with the gender diversity

targets set by both the FTSE Women Leaders

Review, and the Listing Rules and Disclosure

Guidance and Transparency Rules (DTRs).

The Balfour Beatty Board is also compliant with

the recommendations set by the Parker Review

and the Listing Rules and DTRs to have at

leastone Board Director from an ethnic

minoritybackground.

The Committee continues to actively enhance

diversity through the Group’s ongoing succession

planning of both the Board and senior management.

I would like to thank the Committee and the

wider Board for their support and engagement

with succession planning and recruitment

throughout 2025.

Charles Allen,

Lord Allen of Kensington, CBE

Chair of the Nomination Committee

10 March 2026

TERMS OF REFERENCE

Scan or click to view the Committee’s full

Terms of Reference.

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ALLOCATION OF

TIME

Performance, balance and

compositionreviews 12%

Recruitment and succession 60%

Governance and other matters 28%

NOMINATION COMMITTEE C ONTINUED

“ Through the Group Chief

Executive selection process,

it became evident that Philip’s

extensive industry expertise

and demonstrated success in

delivering profitable growth

across multiple geographies

made him the ideal candidate

to lead the Group in its

nextphase.”

Charles Allen

Chair of the Nomination Committee

REPORT OF THE

NOMINATIONCOMMITTEE

CONTINUED

Committee composition

The Committee comprises three Independent

Non-executive Directors, the Senior Independent

Non-executive Director, and the Non-executive

Group Chair.

Board composition and succession

Board composition is shaped and informed by:

@ succession planning activities undertaken by

the Committee;

@ ongoing assessments of the skills, experience

and diversity required on the Board to deliver

against the Group’s strategy, purpose

andvalues;

@ insights derived from the Board performance

review; and

@ shareholder feedback.

The perspectives, skills and experience on the

Board are mapped to the needs of the business

and aligned to the Group’s strategy, purpose and

values. The Committee considers the length of

service of the members of the Board as a whole,

as well as the need for the Board to remain agile

and responsive to the evolving needs of the

Group in an ever-changing external operating

environment. Biographies of the Directors who

were serving on the Board as at 31 December

2025, including details of their backgrounds and

experience, can be found on pages 102 and 103.

Time commitment

The anticipated time commitments of the Group

Chair and Independent Non-executive Directors

are agreed and set out in their respective letters

of appointment. To ensure each Director has

sufficient time to conduct their duties effectively,

and mitigate the risk of overboarding, the

Committee takes the following preventative steps:

@ prior to appointment, the Committee considers

and assesses any existing external commitments

onan individual’s time. This is necessary to

confirm their capacity to take on the role and

discharge their duties effectively; and

@ any additional external appointments are

subject to Board approval to ensure Directors

can continue to devote the necessary time

totheir duties.

Committee performance review

In 2025, the Board and its Committees

undertook an internal performance review. For

more information on the scope and outcomes of

the review, please refer to pages 115 to 116.

Election and re-election of Directors

All Independent Non-executive Directors

undertake a fixed term of three years, subject to

annual re-election by shareholders at the AGM.

The fixed term can be extended, but would not

normally exceed nine years, unless the Board

deemed there to be exceptional circumstances

that merit an extension.

Following the internal performance review and

considerations of the Directors’ tenure, the

Committee unanimously recommends the

re-election of each of Charles Allen, Philip

Harrison, Anne Drinkwater, Louise Hardy,

Barbara Moorhouse, Robert MacLeod, Rudy

Wynter, and Gabby Costigan at the 2026 AGM;

and the election of Philip Hoare following his

appointment on 8 September 2025.

Governance

In 2025 the Committee reviewed and updated its

terms of reference, which are available on the

Company’s website.

Diversity and inclusion

In line with the Value Everyone element of the

Group’s Cultural Framework, the Board recognises

the importance of maintaining an effective balance

of skills, experience and perspectives to support

the sustainable delivery of our Build to Last

strategy and to respond effectively to an evolving

risk and opportunity landscape. Embedding

diversity across the business begins with the

Board, and the Board is committed to fostering

an environment where a broad range of

backgrounds and viewpoints are represented.

While diversity is a key consideration in Board

composition, appointments continue to be made

on merit, with candidates assessed against the

skills and experience required for the role, alongside

all relevant aspects of diversity and independence.

In February 2026, the Committee recommended

the Board Diversity and Inclusion Policy for approval

by the Board in compliance with Disclosure and

Transparency Rule 7.2.8AR. The updated policy

applies specifically to the Board and its Committees.

The policy codifies the Group’s long-term

ambition to achieve gender parity on the Board

and its Committees and establishes a minimum

threshold of 40% representation for each gender.

It also includes an objective to have at least one

Director from an ethnic minority background on

the Board, while recognising that periods of

transition may result in temporary deviations

from these targets.

The Board’s definition of diversity covers gender,

ethnicity, and age (as well as other protected

characteristics set out by the 2010 Equalities Act).

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2025 Group Chief Executive appointment process

The process for appointing a new Group Chief Executive, took the following steps:

Define recruitment criteria

Identify and articulate objectives and criteria

based on Board composition and succession

planning requirements and ongoing

assessments of the skills, experience and

diversity required on the Board to deliver

against the Group’s strategy, purpose

andvalues.

Establish a working group to manage

the appointment process

The working group, which included

members of the Nomination Committee

and the Group HR Director, was established

to manage the appointment process,

appoint an external recruitment

consultant, and filter applications for

interview. The working group reported its

progress to the Nomination Committee.

Instruct external consultant

Odgers appointed as the executive

search consultant to provide a diverse

array of candidates for consideration.

Shortlist and interview

Shortlist candidates and conduct interviews.

Gender diversity

As at 31 December 2025, the Board met the gender

diversity targets set by the FTSE Women Leaders

Review, the Listing Rules and the DTRs, with at

least 40% female representation and a woman

occupying a senior Board role (Anne Drinkwater,

Senior Independent Non-executive Director).

Balfour Beatty is dedicated to actively promoting

gender diversity and empowering women in the

construction industry. For insights into the

Group’s initiatives aimed at advancing gender

diversity and supporting women’s career

progression, please refer to page 55.

The Committee recognises the importance of

achieving gender balance within senior management

particularly at Executive Committee level. To

advance this objective, Balfour Beatty is proactively

engaged in succession planning and is committed

to supporting the professional development of

talented women across the organisation. These

efforts are designed to enable progression into

senior leadership roles and to ensure a diverse

and inclusive leadership pipeline for the future.

For a breakdown of gender demographics across

the Group, please refer to the Sustainability

section on page 55. In compliance with Listing

Rule 9.8.6R(10) additional diversity analysis can

be found on page 161.

Ethnic diversity

As at 31 December 2025, the Board continued

tocomply with the diversity targets set by the

Parker Review and the Listing Rules and DTRs.

The Committee recognises the importance of

ethnic diversity at both Board and senior

management level, and acknowledges that for

the Group to develop a truly diverse and inclusive

‘value everyone’ culture, the Board and senior

management needs to set the right top-down

example and foster a culture that embraces and

celebrates diversity and inclusion.

As a business, Balfour Beatty must make every

effort to attract and retain diverse talent and

break down the barriers that stifle recruitment

and progression of ethnic minorities within the

industry. With the support of the HR function,

the Group drives a number of initiatives to

support career development of ethnic minorities

within the workforce. Details of such initiatives

can be found in the People section on page 60.

Listing Rules and Disclosure Guidance and

Transparency Rules

As at 31 December 2025, the Board was

compliant with the diversity targets set by Listing

Rule 9.8.6R(9)(a), as the Board:

@ had 40% female representation (20% on the

Executive Committee);

@ had at least one senior Board position occupied

by a female Director (Anne Drinkwater, Senior

Independent Non-executive Director); and

@ at least one Board member was from a

minority ethnic background.

Data on these targets in the required standardised

form can be found in the Directors’ report on

page 161.

The Board and the Committee remains

committed to diversifying the workforce at

alllevels by supporting a diverse succession

pipeline at senior management level and

supporting and monitoring Group-wide diversity

and inclusivity policies and initiatives.

Assess

Assess each candidate’s existing skills,

experience and timecommitments, as well

as any potential for actual conflictsof interest.

Recommend

Agree a recommendation for

appointment to the Board.

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GROUP CHIEF EXECUTIVE INDUCTION PROGRAMME

Philip Hoare began a comprehensive and tailored induction programme following confirmation of his

appointment. An overview of Philip Hoare’s induction programme is set out below.

One-to-one meetings with the Board

Directors and the Company Secretary

These meetings enabled Philip to build

strong working relationships with fellow

Board members and to gain a detailed

understanding of the Company’s

governance framework, including the

respective roles and responsibilities of the

Board and its Committees. Committee

Chairs also briefed Philip on the work,

priorities and forward agendas of their

Committees. In addition, these

discussions supported Philip in developing a

comprehensive understanding of the

Group’s Build to Last strategy, risk appetite

and desired culture.

Meetings with the Executive

Committee

and other key senior

management personnel

These meetings provided the opportunity

to build strong working relationships with

senior leadership, and to learn and better

understand the intricacies, opportunities

and challenges of different Business Units

and Enabling Functions across the Group.

Meetings with key shareholders andstakeholders

To ensure stakeholder views are embedded in Board discussions and decision making, itis vital that

the Group Chief Executive hasafull understanding of the Group’s key stakeholders, including

employees, customers, suppliers, and shareholders. Philip’s induction therefore included aplethora

of workforce engagement events, meetings with key customers and shareholder engagement

events, including a virtual roadshow inNovember 2025.

Self-study

A suite of documents was provided to Philip via the electronic Board portal covering key

informationrelating to the Group including financial performance,

Board policies and procedures

andgovernance matters.

Site visits and workforce engagement events

Visits to key operational sites offered the

opportunity to meet with the workforce

andgain valuable insight into the day-to-day

operating environment and Company culture. A

non-exhaustive list of site visits and workforce

engagement events undertaken byPhilip as

part of his induction included:

@ Philip undertook multiple site visits in his first

three months, meeting our project teams

across the Group. He spent time on flagship

UK projects including Sizewell C, Hinkley Point

C and the A9 Dualling contract in Scotland.

His induction also took him to the US – first

visiting sites across Dallas, Orlando and

Charlotte, then heading west to San Diego,

Los Angeles and Portland, including seeing

progress on Los Angeles International

Airport’s Automated People Mover. In Hong

Kong, he joined Gammon’s Leadership Connect

event alongside Charles Allen which was

focused on Zero Harm, innovation and growth.

@ In-person town hall events featured open Q&A

sessions and opportunities for direct connection

– including lunchtime sessions across

numerous locations attended by hundreds of

colleagues. Philip also took that same ‘listen

first’ approach to major project settings,

including HS2 Old Oak Common, where he

joined a September Safety session and

reinforced that no deadline or pressure matters

more than everyone going home safe.

@ attendance at Gammon’s Leadership

Connectevent;

@ a visit to Scotland to meet with the Regional

Scotland leadership to discuss regional

challenges and opportunities; and

@ attendance and key note presentation at

Balfour Beatty’s Early Careers Festival, an

event to welcome 400 new graduates and

apprentices into the business.

NOMINATION COMMITTEE C ONTINUED

Above: Philip Hoare’s visit to Dallas, US with the Board in

September 2025.

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SAFETY AND SUSTAINABILITY COMMITTEE

Membership

Gabby Costigan (Committee Chair)

Anne Drinkwater

Louise Hardy

Philip Hoare

Rudy Wynter

Key actions from 2025

@ Supported the onboarding of new

Committee members Philip Hoare and

Rudy Wynter.

@ Approved the new and updated Building

New Futures sustainability strategy.

@ Reviewed health and safety performance,

specifically findings from incidents and

near misses, ensuring that learnings were

embedded across the Group.

Priorities for 2026

@ Monitor progress towards the Group’s

Building New Futures 2030 sustainability

strategy targets including implementing

targets at the business unit and

projectlevels.

@ Monitor progress against the Group’s

Science Based Targets initiative trajectory

for net zero.

@ Continued focus on embedding a culture

of Zero Harm across the Group.

Gabby Costigan MBE

Chair of the Safety and Sustainability Committee

REPORT OF THE SAFETY AND

SUSTAINABILITY COMMITTEE

I am pleased to present the

Safety and Sustainability

Committee report for 2025.

The Committee met three times in 2025 and its

meetings were regularly attended by other

members of the Board as well as the Health,

Safety and Wellbeing Director, Lee Hewitt, and

the Group Director of Sustainability, Jo Gilroy,

both of whom provide expertise and support

tothe Committee.

Rudy Wynter became a Committee member

inFebruary 2025, and Philip Hoare joined the

Committee following his appointment to the

Board on 8 September 2025.

Health, safety and wellbeing

Across the Group, in 2025 Balfour Beatty

delivered a strong health and safety performance

evidencing a clear embedding of Balfour Beatty’s

‘Make Safety Personal’ culture.

The following key health and safety KPIs were

recorded and reported to the Committee in 2025:

@ Lost Time Injury Rates (LTIR) were 0.08 (2024:

0.09);

@ the Major Injury Rates were 0.03 in 2025;

(2024: 0.02); and

@ 783,942 safety observations were submitted

by employees (2024: 470,506).

The significant increase in safety observations

submitted by employees compared with the

previous year demonstrates the continued

maturity of our Zero Harm culture. This growth

reflects a strengthening sense of ownership

among our people, who increasingly recognise

health and safety as a shared responsibility.

Despite our continued focus on achieving Zero

Harm, one of our colleagues was fatally injured in

May while carrying out steel propane tank

decommissioning work in the US business. As an

organisation, we are determined to learn from

this tragic event and to implement the findings

across our operations, ensuring that we

consistently adopt best practice across all our

geographies.

A comprehensive investigation was undertaken

and the Committee ensured that the key findings

and lessons learnt from this incident were shared

across all our sites and embedded into our health

and safety practices, reinforcing our determination

to continually strengthen our safeguards and

prevent such a loss from ever happening again.

The Group continued its positive work supporting

the mental health of employees in 2025. The

health of employees is viewed as a key component

of the Zero Harm initiative as the focus on ‘Be Fit

for Work’ explores physical, emotional, and

mental health. In 2025, the Group maintained its

partnership with construction industry charity

Mates in Mind in a bid to build and embed a

culture where mental health is openly

acknowledged, discussed, and supported.

Balfour Beatty is also proud to be a founding

member and co-Chair of the UK Health in

Construction Leadership Group (HCLG). The

HCLG is a collaborative forum committed to

eliminating health risks and diseases arising from

exposure to hazards within the construction

industry. Bringing together contractors, clients,

the Health and Safety Executive, professional

bodies, trade associations, and trade unions, the

group unites influential leaders across the sector.

Through ongoing dialogue and joint initiatives,

the HCLG tackles the most pressing health

challenges facing our industry. By championing a

collective approach, we aim to drive innovation,

share best practice, and deliver meaningful

improvements to the health and wellbeing of

everyone working in construction.

TERMS OF REFERENCE

Scan or click to view the Committee’s

fullTerms of Reference.

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ALLOCATION

OFTIME

Health and safety updates

45%

Sustainability matters 44%

Governance and other matters 11 %

Safety performance and Zero Harm

The Health, Safety and Wellbeing (HS&W)

Director issued regular reports to the Committee

throughout 2025 on the Group’s performance

against various health and safety KPIs, including

data covering fatalities, injuries, serious and

minor events, near misses and health and safety

observation reporting. Following a strong

performance in 2024, the Group continued to

receive a record number of workforce safety

observations, indicating strong employee

engagement and a clear embedding of the

Group’s ‘Make Safety Personal’ culture. Further

details on the Group’s Zero Harm strategy can be

found on pages 35 to 39.

Reports were received by the Committee regarding:

@ health, safety and wellbeing performance

across the UK, US and Hong Kong (via our joint

venture Gammon);

@ incident overview and actions; and

@ the progress and implementation of health,

safety and wellbeing initiatives across the Group.

REPORT OF THE SAFETY AND

SUSTAINABILITY COMMITTEE

CONTINUED

Health, safety and wellbeing

continued

The Group is expanding its use of innovative

digital solutions and AI to enhance our safety

culture and deliver against our Zero Harm strategy.

Please see details of our safety innovations on

our website where you will see examples of how

we are innovating to reduce the risks our people

and supply chain partners are exposed to.

For further information on health, safety and

wellbeing please refer to pages 35 to 39.

Sustainability

In 2025, the Committee endorsed the renewed

Building New Futures sustainability strategy,

which sets out the Group’s commitment to

protecting and enhancing the environment and

leaving a positive social legacy. The strategy

establishes commitments and targets in key

areas, including climate change, nature loss,

resource efficiency, supply chain integrity,

community engagement, and employee diversity,

equity and inclusion.

Evolution of the strategy in 2025 included:

@ the establishment of new 2030 targets for

social value (£6 billion), social impact (delivery

of 60,000 hours of educational engagement)

and nature positive targets to reduce nature loss;

@ the appointment of STEM Learning as Balfour

Beatty’s corporate charity partner, to directly

support the development of skills critical to the

Group and the wider industry; and

SAFETY AND SUSTAINABILITY COMMITTEE CONTINUED

@ the establishment of a 2050 target to achieve

net zero across Scope 1, 2 and 3 emissions.

The Sustainability function worked closely with

the Science Based Targets initiative (SBTi) to

validate its 2030 and 2050 targets. Please see

the Company’s UK Carbon Reduction Plan on

our website for further information on Balfour

Beatty’s progress towards achieving our near

and long-term carbon reduction targets.

Gabby Costigan MBE

Chair of the Safety and Sustainability

Committee

10 March 2026

MAIN ACTIVITIES OF THE

COMMITTEE DURING THE YEAR

Roles and responsibilities

oftheCommittee

@ Reviewing strategies, policies and

procedures of the Group in relation to

health, safety, and wellbeing and

sustainability matters.

@ Monitoring and updating the Group’s

control processes where appropriate.

@ Approving health and safety targets and

key performance indicators, monitoring

the Group’s performance against them

and taking corrective action

wherenecessary.

@ Monitoring the Group’s performance

against the main health, safety, wellbeing

and sustainability risk groups, and

implementing strategies to mitigate

suchrisks.

@ Reviewing the environmental and

sustainability performance of the Group,

including but not limited to energy and

carbon emissions, materials and waste

management, and social and

communitymatters.

@ Approving environmental and

sustainability targets and key performance

indicators, monitoring the Group’s

performance against them and taking

corrective action where necessary.

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Notable incidents and fatalities

Tragically, despite our continued focus on Zero

Harm, a fatality was recorded in 2025 as referred

to on page 121. Following the incident, a full

investigation was undertaken which led to the

establishment of Consistency Working Groups

across the wider Balfour Beatty Group, focusing

on four key areas, namely, Digital, Behaviours,

Standards, and Metrics.

The Committee continued to receive regular

reports on learnings and actions arising from

incidents or near misses that had high potential

of serious injury.

The governance processes and procedures

following high-potential incidents (HiPos)

havebeen strengthened in the year.

Theseenhancements require that all HiPos

areescalated within 24 hours of occurrence and

mandate that the Group Chief Executive engages

directly with all Serious Injury and Fatality HiPos.

In 2025, the health, safety and wellbeing function

adopted the Energy Wheel which categorises

high energy incidents that had a realistic potential

to result in fatal or serious injury; a tool which

enables Balfour Beatty to objectively classify

high potential incidents, enabling a consistent

sharing and application of lessons learned at a

Group level.

Environment and sustainability

In 2025, the Committee monitored and oversaw

the Group’s performance against targets set by

the Building New Futures sustainability strategy,

and endorsed the evolution of the strategy,

which included the setting of new 2030 targets

and commitments. More information on Building

New Futures can be found on pages 42 to 55.

The Committee also received regular updates on

a plethora of initiatives implemented by the

Sustainability function to drive the embedding of

a culture of sustainability and deliver against the

Building New Futures sustainability strategy.

In2025, this included:

@ strengthening the Building New Futures

governance into GTIC and Gated Business

Lifecycle processes (embedding sustainability

considerations into ‘go/no go’ criteria);

@ embedding sustainability at project level

(through project-based carbon reduction

targets and the delivery of carbon and

biodiversity training at project level); and

@ launching the Sprouting Sustainability

Network, a programme for early careers.

Governance

The Committee monitored the resourcing of

boththe HS&W and Sustainability functions and

reviewed the appropriateness and effectiveness

of the governance framework for HS&W and

sustainability matters.

Committee performance review

In 2025, the Board and its Committees

undertook an internal performance review.

Formore information on the scope and outcomes

of the review, please refer to pages 115 to 116.

Verbal and physical abuse towards

roadworkers is increasing and has

become a significant issue for those

working on public highways. Inthe UK

alone, three instances of roadworker

abuse are reported on BalfourBeatty

sites each day. The Company has

implemented various initiatives which

aim to eradicate roadworker abuse from

our sites as partof our Zero Harm focus

and to ensure roadworkers feel confident

respected and safe in the workplace.

To find out more about our ongoing efforts to

raise the profile of roadworker abuse and our

work to eliminate it from our sites, please

seepage 37.

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Membership

Robert MacLeod (Committee Chair)

Louise Hardy

Barbara Moorhouse

Rudy Wynter

Key actions from 2025

@ Conducted the tender process for the

selection of an external audit firm for the

31 December 2026 year end.

@ Continued to monitor developments in the

control and compliance environment in

the US military housing business.

@ Reviewed and monitored the Internal

Control Framework (ICF) project in

preparation for compliance with Provision

29 of the 2024 Corporate Governance

Code in 2026.

@ Reviewed and challenged management’s

judgements on significant accounting

issues.

Priorities for 2026

@ Review and monitor the embedding phase

of the Internal Control Framework

(ICF)project.

@ Continue to monitor developments in the

control environment within the US military

housing business.

@ Continue to review and challenge

management’s judgements on significant

accounting issues.

@ Conduct robust reviews of the detailed

drivers and mitigation activities of the

Group’s principal risks.

Robert MacLeod

Chair of the Audit and Risk Committee

AUDIT ANDRISK COMMITTEE

REPORT OF THE AUDIT

AND RISK COMMITTEE

I am pleased to present my

second report of the Audit and

Risk Committee.

This report is intended to provide shareholders

with an insight into key areas considered by the

Committee, together with an explanation of how

the Committee discharged its responsibilities and

provided assurance on the integrity of the 2025

Annual Report and Accounts.

The Audit and Risk Committee assists the Board

in fulfilling its responsibilities related to Group

financial statements, risk management and

financial controls, and overseeing the work of the

Internal Audit function and the external auditor.

The Committee held five meetings in 2025, all of

which were fully attended. The Committee was

regularly attended by the Group Chief Executive,

Chief Financial Officer, Group Audit and Risk

Director, UK Head of Internal Audit, Group

Financial Controller, Group General Counsel and

Company Secretary and representatives of the

external auditor, including the lead audit partner.

There were further ad hoc attendees who joined

Committee meetings for specific agenda items.

Internal Control Framework (ICF)

An area of focus for the Committee throughout

2025 was the continued oversight of the Internal

Control Framework (ICF) project. Please refer to

page 129 for further information.

External audit tender process

During 2025, the Committee and members of

senior management have been involved in

conducting a rigorous and detailed external audit

tender for the 2026 year end audit and beyond. This

process concluded in June 2025 with KPMG being

reappointed as the Company’s external auditor.

US military housing

The Committee received regular updates on the

Balfour Beatty Communities’ Compliance

Programme throughout the year. Regular

meetings with senior management took place

throughout the year which provided an

opportunity for all sides:

@ to review progress against responding to the

Monitor’s recommendations;

@ to assess the timescales of the action plan put

in place to implement the recommendations;

@ to review the resourcing of the team required

to deliver the plan; and

@ to confirm that the implementation team

receives the support necessary to ensure the

monitorship process is successful and delivers

the desired outcomes.

In April 2025, I had the opportunity to visit a

number of the US military housing sites, enabling

first-hand insight into the issues identified and

the progress of management’s actions to

address them.

In August 2025, it was agreed to extend the

monitorship to June 2026 to provide the business

with additional time to implement and test the

necessary control enhancements to assure

compliance with the Monitor’s recommendations.

For more information on the Committee’s

oversight of the US military housing business,

please refer to page 127.

Robert MacLeod

Chair of the Audit and Risk Committee

10 March 2026

TERMS OF REFERENCE

Scan or click to view the Committee’s full

Terms of Reference.

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Strategic report Governance Financial statements Other information

Roles and responsibilities oftheCommittee

@ Monitoring the integrity of the Group’s financial statements,

including providing advice (where requested by the Board) on

whether the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the information necessary for

shareholders to assess the Company’s position and performance,

business model and strategy.

@ Reviewing any significant financial issues and judgements related

tothe Group’s financial statements, including the Investments

portfolio valuations.

@ Ensuring management has effective systems of risk management

and internal control in place.

@ Monitoring the effectiveness and the resourcing of the Internal

Auditfunction.

@ Overseeing the relationship with the external auditor, including

annual approval of the external audit plan, review of audit opinions,

setting of external auditor remuneration, and reporting the results of

external audits to the Board.

@ Appointing the external auditor, and overseeing audit tenders when

these take place.

@ Monitoring the effectiveness, objectivity and independence of the external

auditor, including factors related to the provision of non-audit services.

@ Reviewing the Company’s carbon emissions data, related emissions

intensity data, and social value disclosures included in the 2025

Annual Report.

MAIN ACTIVITIES OF THE COMMITTEEDURING THE YEAR

Committee activities during 2025

The Committee has a substantial remit and cycle of actions to complete throughout the year.

MAR MAY AUG SEP NOV

Group

financial

statements

Received reports on financial and accounting, contract and commercial issues

andlitigation

Approved financial results regulatory announcements and the Annual Report and

Accounts to be put to the Board

Approved the Group’s viability and going concern statements

Reviewed Directors’ valuation of the Investments portfolio

Approved greenhouse gas emissions and social value representation letter to PwC

External

auditor

Reviewed the external auditor’s report on the Company’s full year and half year

financial statements

Reviewed the external auditor’s assessment of its objectivity and independence including

a review of non-audit services (and associated fees) provided by the external auditor

Reviewed management representation letters related to the Company’s full year and

half year financial statements

Reviewed the external auditor’s half year review plan and audit strategy

Reviewed the effectiveness of the external auditor

Approved the external auditor’s fees

Reviewed the external auditor’s US Audit Strategy

Risk

management

and financial

controls

(including the

Internal

Auditfunction)

Conducted assessments of the Group’s systems of risk management and internal

control, including a robust assessment of Principal and Emerging Risks

Approved internal audit plans and received updates on internal audit and risk

Received updates on the Internal Control Framework (ICF) project

Received updates on US military housing controls and compliance

Received the half year risk and controls report

Governance

and other

matters

Received updates on Group tax and insurance

Received updates on Group ethics and compliance, including whistleblowing reports

Reviewed the annual update to the Ethics and Compliance Programme charter

Terms of reference review

US Construction finance updates

Held private meetings between the Non-executive Directors, the Group Risk and Audit

Director and KPMG

ALLOCATION

OFTIME

Financial matters and reporting 34%

Internal audit, risk management and

internal control 23%

External auditor 16%

Governance and other matters 27%

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MAIN ACTIVITIES OF THE COMMITTEE

DURING THE YEAR CONTINUED

Significant issues and other

accounting judgements

The following sets out all significant issues

reviewed by the Committee throughout the year,

being those requiring management to exercise

the highest level of judgement or estimation.

TheCommittee assesses these judgements

orestimates to determine if they are reasonable

and appropriate.

Revenue and margin recognition

Given the nature of the Group’s operations, these

elements are central to how it values its work.

Having reviewed detailed reports and met with

management, the Committee considered

contract and commercial issues on projects

which have an elevated level of exposure to both

revenue and margin recognition risks based on

certain risk parameters set by management.

Asakey area of audit focus, the Committee

alsoreceived a detailed written report from the

external auditor setting out the results of its

workin relation to key contract estimates.

Directors’ valuation of the

investmentsportfolio

The Committee assessed the methodology used

to value the assets in terms of the discount rates

applied. It also critically appraised the output of

the Directors’ valuation exercise.

Contract provisions

The Committee reviewed the significant

estimates of the quantum and timing of liabilities

relating to contract provisions (including those

relating to fire safety), as well as litigation and

other risks. The Committee received detailed

reports including relevant legal advice.

Committee composition

The Committee is chaired by Robert MacLeod. In

accordance with the UK Corporate Governance

Code, the Board has determined that Robert has

recent and relevant financial experience, and the

Committee as a whole has the required financial

management, audit and risk skills and expertise

to discharge its duties. The Committee members’

full biographical details can be found on page 103.

Evaluation of the Committee

In 2025, the Board and its Committees

undertook an internal performance review. For

more information on the scope and outcomes of

the review, please refer to pages 115 to 116.

Financial reporting

A key responsibility of the Committee is to

monitor and oversee the integrity of the Group’s

published financial statements. This

responsibility is discharged in part through the

review and evaluation of the Company’s full year

and half year financial statements.

The Committee has full access to management,

in order to ask questions and gain further insights

where necessary, and receives reports from

members of the Finance and Internal Audit teams

and the external auditor.

The Committee assesses whether the annual

financial statements provide a ‘fair, balanced and

understandable’ view of the Group’s position and

performance, business model and strategy, as

well as:

@ assessing whether the accounting policies

applied, and judgements (including key

contract judgements), estimates and

assumptions made, by management are

reasonable and appropriate based on

information available further details are

inNote2 on pages 185 to 192; and

@ assessing whether the Company has complied

with relevant financial reporting standards and

other regulatory requirements, including the

UK Corporate Governance Code and European

Securities and Markets Authority Guidelines on

Alternative Performance Measures.

Going concern and viability statement

As part of the Board’s wider responsibility for

assessing the Group’s principal and other risks

(see pages 76 to 89, the Committee was

presented with management’s assessments of

the Group’s viability over a three-year period to

31 December 2028; and, its going concern basis

for the period of at least 12 months from the date

of approval of the financial statements.

The Committee assessed these analyses and

assumptions, taking into account cash flows,

current levels of debt and the availability of future

finance if required. The viability and going

concern assessments, including the severe but

plausible downside scenarios modelled, were

discussed and the Committee concluded that the

assessments were appropriate.

The Committee also continued to consider the

impact of climate change on the Group’s viability.

The Committee subsequently approved the

viability statement and the going concern

disclosures for inclusion in the Annual Report and

Accounts 2025.

The viability statement and the going concern

disclosure can be found on page 90 and in Note1

on page 184 respectively.

Non-underlying items

The key judgement is whether items relate to

underlying trading or not and whether they have

been presented in accordance with the Group’s

accounting policy. The Committee conducted

areview of each of the non-underlying items,

receiving written reports from management

andthe external auditor as to their quantum

andnature.

Going concern and viability statement

In order to satisfy itself that the Group has

adequate resources to continue in operation for

the foreseeable future and that there are no

material uncertainties that could lead to

significant doubt as to the Group’s ability to

continue as a going concern, the Committee

considered the Group’s viability statement, cash

position (both existing and projected), bank

facilities and covenants (including bonding lines)

and the borrowing powers allowed under the

Company’s Articles of Association. The Committee

subsequently recommended to the Board the

adoption of the going concern statement and the

viability statement for inclusion in the Annual Report

and Accounts. More details on going concern and

the viability statement are contained in Note 1 on

page 184 and on page 90 respectively.

Retirement benefit obligations

The key judgement relates to the assumptions

underlying the valuation of retirement benefit

obligations. The Committee received reports

from management outlining the assumptions

used, including input from the Group’s actuaries,

in particular in relation to discount rates, inflation

and mortality, which were evaluated against

external benchmarks and, in relation to which,

the external auditor also provided reports.

AUDIT ANDRISK COMMITTEE CONTINUED

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Strategic report Governance Financial statements Other information

The Audit and Risk Committee’s

role in ensuring the financial

statements taken as a whole are

fair, balanced and understandable

As part of the Committee’s assessment as

towhether the annual financial statements

provide a ‘fair, balanced and understandable’

view, the Committee has oversight of and

reviews the effectiveness of the following

processes implemented by management:

@ comprehensive guidance issued to

allcontributors;

@ verification of the factual content of the

financial statements;

@ review of the disclosures made by the

contributors to each section; and

@ comprehensive reviews by senior

management to ensure consistency and

overall balance.

In addition to the above, the Committee also

undertakes a review to determine if the

entire financial statements are representative

of the Group’s performance in the year and

challenges management on the overall balance

of the report prior to recommending approval

of the financial statements to theBoard.

Building safety provisions

The Committee continue to receive regular

updates from management in respect of

developments in relation to the Building Safety

Act (BSA).

In 2024, following further developments and

clarifications in the legal landscape of the BSA,

introduced in 2022, progression of the Group’s

investigation and due diligence as well as

adjudications on claims received to date, the

Group reassessed its provision for BSA claims

which resulted in an increase in the provision of

£83 million. The provision did not include potential

recoveries from third parties. The increase was

recognised in non-underlying due to its size and

the nature of the cost, which arose from a change

in legislation.

In 2025, the Committee reviewed management’s

assessment to increase this provision by £37 million.

This increase is a result of new claims received in

the period, settlements and reassessments of

previously provided claims together with legal

costs incurred in the year.

Based on its review and discussions with

management and the external auditor, the

Committee concluded that it was appropriate

torecognise the charge and record this as a

non-underlying item in line with the previous year.

Financial Reporting Council (FRC)

In September 2025, the Company received a

letter from the FRC notifying that the Company’s

2024 Annual Report and Accounts was subject to

a limited scope review by the FRC’s Corporate

Reporting Review team. The Committee considered

the findings from the FRC’s review. It is pleasing

that the FRC did not take any further action in

relation to these accounts and did not require a

substantive response to its findings. It raised

several minor disclosure points that have been

considered and addressed while preparing this

Annual Report and Accounts.

External auditor

Rotation and reappointment

The Company’s external auditor is KPMG LLP.

KPMG’s appointment was first approved by

shareholders at the 2016 AGM, following an audit

tender process in 2015. KPMG replaced Deloitte,

the incumbent for the preceding 14 years.

Pursuant to the provisions of the Revised Ethical

Standard 2019, the Company has adopted a policy

that no external auditor, appointed following the

implementation of the Revised Ethical Standard

2019 (as summarised below), can remain in post

for longer than 20 years. The Company has

adopted a policy that the Committee will lead an

audit tender process at least every 10 years and

that this would apply to the current incumbent,

KPMG. Consequently, in 2025, the Company

undertook a competitive tender for the external

audit of the 31December 2026 year end and

beyond. This is further discussed below.

The Committee considers that the external auditor

relationship is appropriate and productive and the

Committee is satisfied with KPMG’s effectiveness.

Mike Barradell completed his third year as lead

audit partner for the year ended 31December

2025. The external auditor is required to rotate

the lead partner every five years – such changes

are planned carefully to ensure business continuity,

whilst avoiding the introduction of undue risk of

inefficiencies and any impact to audit quality.

The key aspects of the Revised Ethical Standard

2019 include the following:

@ audit firms should have a maximum tenure of

10 years, although this can be extended by:

@ up to an additional 10 years where a public

tender is carried out after 10 years; or

@ by up to an additional 14 years where more

than one audit firm is appointed to carry out

the audit;

@ audit firms are prohibited from providing

certain non-audit services;

@ where permitted non-audit services are

provided by a group’s auditor, they will be

subject to a fees cap; and

@ restrictions within any contract limiting a

group’s choice of auditor are prohibited.

The disclosures provided within this report

constitute the Company’s statement of

compliance with the requirements of the

Statutory Audit Services for Large Companies

Market Investigation (Mandatory Use of

Competitive Tender Processes and Audit

Committee Responsibilities) Order 2014.

Audit tender

During 2025, the Committee and members of

senior management have been involved in

conducting a rigorous and detailed external audit

tender for the 2026 year end audit.

In advance of the tender the following tasks were

performed by the Committee:

@ reviewed best practice guidelines on external

audit tenders;

@ agreed the tender process timetable;

@ discussed the key attributes that the

Committee would require from its external

auditor and the lead audit partner;

@ agreed the evaluation criteria for choosing the

Company’s next external auditor; and

@ identified suitable firms to be shortlisted

through a thorough desktop review of a longlist

of firms.

US military housing

The Committee received regular updates on

theBalfour Beatty Communities’ Compliance

Programme throughout the year.

In US military housing, the Group continues to

workwith the independent compliance monitor,

appointed by the US Department of Justice (DoJ)

in 2021 and commencing work in 2022. During the

year, the Group agreed with the US Department of

Justice to extend both Balfour Beatty Communities’

plea agreement and monitorship to 6 June 2026 to

allow the Group further time to complete planned

remediation work.

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MAIN ACTIVITIES OF THE COMMITTEE

DURING THE YEAR CONTINUED

External auditor continued

Audit tender continued

In identifying a shortlist, the Committee carried

out an assessment to identify firms that have the

experience, track record and capacity to perform

a robust audit. In assessing this shortlist, the

Committee reviewed the FRC’s assessment of

each firm’s audit quality, including quality scores

from the latest FRC Audit Quality Reports.

TheCommittee also sought confirmation of

independence from each firm and confirmation

that conflict of interest checks have

beenperformed.

Each shortlisted firm received a Request for

Proposal (RFP) on 28 March 2025 outlining the

evaluation criteria and further information in

preparation for presentations. The firms were

also notified that a selection committee was

established for the tender. The selection

committee was made up of members of the

Committee, the Group Chief Financial Officer

andthe Group Financial Controller.

EXTERNAL AUDITOR TENDER TIMETABLE

In addition to the RFP, and following the completion

of the prepared NDA, secure access to a data room

was provided to the shortlisted firms.

Throughout May and June, the firms met with

members of the Committee and senior management

to aid them in understanding the Group in preparation

of their proposals. In addition to these meetings,

the firms also held an audit technology demonstration

session showcasing each firm’s capabilities in

this area to drive efficiencies and better qualityaudits.

The tender process concluded with the firms

submitting their proposal documents to the

selection committee on 13 June 2025 with

presentations to the selection committee

conducted on 27 June 2025.

A thorough and robust deliberation was conducted

by the selection committee after the presentation

to agree its recommendations for the Board.

Theselection committee took into consideration

feedback from individual members, and those

who participated in the management meetings

with the firms. It was agreed that all shortlisted

firms were appointable candidates who had

performed well throughout the tender and who

would have the capabilities to deliver a high-

quality audit.

It was ultimately decided by the Committee to

reappoint KPMG as the external auditor for the

2026 year end.

Independence

A formal review of the external auditor’s

independence is conducted by the Committee

annually. The most recent review took place in

August 2025, when the Committee considered a

letter submitted by KPMG which sets out:

@ any relationships that bear on its objectivity

and independence and the safeguards

implemented to address any consequent

threats to independence; and

@ considerations related to the provision of

non-audit services, including a comparison

forthe prior year (further detail below).

Following review of this letter, the Committee

satisfied itself that KPMG remained sufficiently

independent in accordance with the relevant

professional ethical standards.

Non-audit work

The Company maintains a Non-Audit Services

Policy governing the provision of non-audit

services. The policy sets out:

@ specific services that the external auditor

isprohibited from providing to the Group;

@ details of any characteristics that could

potentially make a service prohibited; and

@ a requirement for the Chief Financial Officer to

approve non-prohibited services where the fee

is below £50,000, and for the Chair of the Audit

and Risk Committee to approve non-prohibited

services where the fee exceeds £50,000.

KPMG also operates its own internal policy that

prohibits it from providing non-audit services,

other than one closely related to an audit,

toanyFTSE 350 company.

These provisions help to safeguard the external

auditor’s objectivity and independence, and

mitigate the risk that the external auditor will:

@ audit its own work;

@ make management decisions on behalf

oftheGroup;

@ act as advocate for the Group; and/or

@ create a mutuality of interest with the Group.

2024

Management

meetings with

audit firms

takeplace

Shortlist of audit

firms confirmed with

chosen audit firms

confirming

independence

Request for

proposal delivered

to audit firms

Presentations by

audit firms to

selection

committee

Recommendations

to the Committee

Firms notified

ofdecision

Appointment of

external auditor by

shareholders

May–June

2025

March

2025

27 June

2025

27 June

2025

30 June

2025

May

2026

AGM

AUDIT ANDRISK COMMITTEE CONTINUED

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In accordance with the policy for the provision of

non-audit services, and in line with the Financial

Reporting Council’s ethical standards, the aggregated

spend on non-audit services with the external

auditor must not exceed 60% of the Group audit

fee, unless exceptional circumstances exist, with

a three-year rolling average not exceeding 70%

of the Group audit fee.

During 2025, there were fees of £0.7 million

(2024: £0.6 million) paid to KPMG for non-audit

services. 2025 non-audit services provided by

KPMG related to the review of the Group’s half

year results and the limited assurance review

over the reporting of selected sustainability data.

Audit fees for 2025 were £5.1 million

(2024:£5.2million). Further details are

includedin Note 6.2 on page 199.

49% of non-audit-related work provided by

international accounting firms in 2025 was

carried out by firms other than KPMG.

Effectiveness

As part of the Committee’s annual cycle of

activities, the Committee conducts an

effectiveness review of the external auditor,

assesses the appropriateness of the external

audit plan, and assesses the external auditor’s

professional scepticism. From this review, the

Committee assessed that the audit was effective

and recommendations for improvement were

identified and communicated to the external

auditor where necessary. Committee members

meet privately with the external auditor and

management throughout the year in order to gain

feedback to support these assessments.

RISK MANAGEMENT

ANDINTERNALCONTROL

The Board assumes ultimate responsibility for

the effective management of risk and internal

control across the Group. However, the Committee

assists the Board in monitoring the Group’s

internal financial controls, and internal control

andrisk management systems, and monitoring

and reviewing the work and effectiveness of

theInternal Audit function.

Internal Audit

The Internal Audit function plays an integral

rolein the Company’s governance structure,

providing independent assurance and advice

tohelp the Group achieve its strategic priorities.

The appointment of a new Group Audit and Risk

Director was led by the Chief Financial Officer

and Group HR Director. The Chair of the Audit

and Risk Committee was kept updated throughout

the process and was actively involved in meeting

preferred candidates, ultimately approving the

appointment of Simon Richardson in November 2025.

The half yearly internal audit plans were approved

by the Committee and provided an assessment

of the adequacy of the budget and resources.

Each audit plan is based on risk, strategic priorities

and consideration of the strength of the control

environment. The Committee monitors progress

against the plan and reviews the results of internal

audit reports during each meeting. Management

is responsible for ensuring that issues raised in

internal audit reports are addressed within the

agreed timetable and their timely completion is

reviewed by the Committee.

Where internal or external circumstances give

rise to an increased level of risk, the audit plan

ismodified accordingly.

The effectiveness of the Internal Audit function

isassessed by the Committee by evaluating

internal audit reports and at meetings without

management present. The Committee also

reviewed the resources and skills of the Internal

Audit function and concluded that they are

appropriate for its activities. Accordingly, the

Committee is satisfied that the quality, experience

and expertise of the Internal Audit function is

appropriate for the business.

Internal control and risk management

The Committee has evaluated the effectiveness

of the internal control and risk management

systems operated within the Group. The

evaluation covered:

@ the new Group-wide Internal Control Framework;

@ the Group’s risk management processes

fordetermining and assessing Group risks,

including those that are principal and emerging;

@ management confirmation reports;

@ reports on fraud perpetrated against the Group;

@ the Group’s approach to anti-bribery

andcorruption and whistleblowing; and

@ reports from both the Internal Audit function

and the external auditor.

The review did not identify any significant

weaknesses in the system of internal control

andrisk management.

READINESS FOR PROVISION 29 OF THE

UK CORPORATE GOVERNANCE CODE

The 2024 UK Corporate Governance Code

(theCode) introduced a revision to Provision 29,

expanding on the previous requirement for boards

to annually attest to the effectiveness of their

company’s risk management and internal control

framework. The new Code places greater emphasis

on identifying and assessing the effectiveness of

‘material’ controls and requires additional reporting,

including details of remedial actions taken to address

any identified control weaknesses. A copy of the

2024 Code is available on the FRC website.

To prepare for compliance with the Code by

31December 2026, our 2026 financial reporting

date, a select team was tasked with leading a

two-year project to design and implement a new

Group-wide Internal Control Framework (ICF).

In 2025, the focus has been on

refining and

enhancing the Internal Control Framework

and

embedding monitoring and reporting of control

effectiveness into business-as-usual processes.

Please see below a summary of key achievements:

@ completed the Group-wide Internal Control

Framework, with a shift in focus to driving

alignment and enhancements where appropriate;

@ delivered updates and presentations to the

Executive Committee and operational and

functional leadership teams;

@ successfully completed a Group-wide

assurance process dry run, which received

positive engagement and feedback;

@ commenced development of a cyclical Line

Testing programme that will be delivered by

acentral Internal Control function during 2026;

@ initiated a tender process to evaluate system

solutions to house the ICF, support first and

second line testing activities, systemise

monitoring of remediation activities and

provide dashboard reporting of control

effectiveness across the Group; and

@ appointed an independent third-party specialist

to review Provision 29 readiness, with no

significant concerns raised.

The project was closely overseen by the Audit

and Risk Committee, which received regular

progress reports throughout the project’s lifecycle.

The Committee’s strategic focus was to ensure

that the new ICF was proportionate to the nature,

scale, and complexity of Balfour Beatty’s operations,

and aligned with the Group’s Enterprise Risk

Management framework.

As a result, the ICF is now fully embedded across

the Group, with ongoing refinements expected

as it continues to mature. We are confident that

the new ICF provides robust oversight of the

effectiveness of the Group’s control environment

as we move towards full compliance with the

Code in 2026.

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REMUNERATION COMMITTEE

Membership

Anne Drinkwater (Chair of the Committee)

Robert MacLeod

Barbara Moorhouse

Key actions from 2025

The Committee’s time in 2025 was focused on

overseeing the implementation of the current

Remuneration Policy and undertaking a full

review of the Remuneration Policy to be put to

a binding shareholder vote at the 2026AGM.

Key actions included:

@ considered and approved the departure

terms for Leo Quinn, who stepped down

from the Board as Group Chief Executive on

8 September 2025, after over 10 years

leading the business;

@ considered and approved the appointment

terms and remuneration package for Group

Chief Executive, Philip Hoare, who joined the

Board as Group Chief Executive on

8September 2025;

@ reviewed the base salary and overall

remuneration package for Chief Financial

Officer, Philip Harrison, in light of increased

responsibilities taken on during the year and

the key role in supporting the transition to a

new Group Chief Executive;

@ ensured the current Remuneration Policy

was implemented in alignment with

business strategy and culture;

@ considered ongoing developments in external

corporate governance and best practice;

@ conducted a full review of the Remuneration

Policy to ensure it remains effective and

aligned to the Group’s strategic objectives;

@ ongoing shareholder consultation in advance

of the 2025 and 2026 AGM; and

@ reviewed and monitored senior management

and wider workforce demographics and

remuneration to ensure alignment with

culture and as broader context for

remuneration policy.

Priorities for 2026

@ Ensure that the new Remuneration Policy is

implemented in alignment with business

strategy and culture.

@ Continue to review and monitor wider

workforce demographics and remuneration

across the Group’s operations to ensure

alignment with culture and as broader

context for remuneration policy.

Anne Drinkwater

Chair of the Remuneration Committee

REPORT OF THE

REMUNERATIONCOMMITTEE

As Chair of the Remuneration

Committee, I am pleased to

present our Directors’ remuneration

report for the year ended

31December 2025.

Our report describes the work of the Committee,

how it has applied our Remuneration Policy

(Policy) that was approved by shareholders at the

2023 AGM and sets out the Remuneration

Committee’s proposals for changes to that Policy

that will be subject to a binding shareholder vote

at the 2026 AGM.

The proposed Policy is set out on pages 136 to 144

and a summary of how this will be implemented for

the year ending 31 December 2026 is included in

the Remuneration At A Glance section on page

145. The remainder of the report sets out the

Annual Report on Remuneration detailing how the

current Policy was applied over the year ended

31December 2025.

TERMS OF REFERENCE

Scan or click to view the Committee’s full

Terms of Reference.

The Committee’s Terms of Reference were reviewed

during the year to ensure compliance with the Code.

Remuneration policy 25%

Remuneration of Directors and Executive

Committee members 43%

Workforce remuneration 12%

Governance and other matters 20%

ALLOCATION

OFTIME

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were set out in last year’s Directors’

remuneration report. Further details of the

awards made to Philip Hoare to partially

compensate for remuneration forfeited on

leaving his previous employer and joining

Balfour Beatty are set out on pages 153 and 154.

Incentive outcomes for 2025

The outcomes of the Annual Incentive Plan (AIP)

for the executive Directors reflected the following

(with further detail provided on pages 147 to 150).

@ Stretching financial targets were set at the

start of the year. In line with prior years, the

cash flow targets have incorporated additional

stretch following our review of historic targets

and out-performance. The formulaic assessment

of the AIP indicated 82.9% of maximum in

respect of the financial targets for the

executive Directors.

@ Objectives set for the executive Directors

incorporated a number of consistent strategic

business objectives together with role-specific

personal objectives. Philip Hoare, Leo Quinn

and Philip Harrison performed strongly against

these objectives resulting in 100% of maximum

for Philip Hoare, 92% of maximum for

LeoQuinn and 96% of maximum for

PhilipHarrison for this element.

@ In line with good practice, the Remuneration

Committee reviewed the overall outcome for

the executive Directors. However, despite

strong safety leadership in developing our

safety culture and the maximum score recorded

against the safety objectives, reflecting the

ongoing progress made by the business

against the leading and lagging indicators,

there was a tragic fatality in 2025. Reflecting

on this the Committee, in discussion with the

executive Directors, decided to apply downward

discretion and reduce the safety element of

the strategic business and personal objectives

by half for the executive Directors, reducing

the overall scoring for strategic business and

personal objectives for Philip Hoare, Leo Quinn

and Philip Harrison to 90%, 82% and 86%

respectively. Further detail is included in the

AIPmetrics and outcomes section on pages

147 to 150.

@ Following the adjustment, 84.7% of maximum

is to be paid to Philip Hoare, 82.7% of maximum

is to be paid to Leo Quinn and 83.7% of

maximum is to be paid to Philip Harrison for

the AIP. In line with the Policy, 50% of the

pay-out will be deferred into shares for three

years for Philip Hoare and Philip Harrison.

Nodeferral will be applied for Leo Quinn.

@ Since joining on 8 September 2025, Philip

Hoare has engaged extensively with key

clients, investors and employees across the

business as part of his onboarding plan. Whilst

building a strong understanding of business

plans, strategy and operations, Philip has led

activity to develop a high performing executive

leadership team, including enhanced

succession planning, alongside his strong

impact in supporting the development of an

engaged and inclusive workforce and the

health, safety and wellbeing culture.

@ Leo Quinn continued to show strong leadership

demonstrated by the performance against the

strategic business and personal objectives.

Inparticular, he led activities to develop a

safeand inclusive culture, supporting the

embedment of the ‘Right to Respect’ campaign

in the UK, and supported the onboarding of the

new Group Chief Executive.

@ Philip Harrison has also shown continued

strong leadership across the business. In

particular, he has delivered changes to key

senior roles within the Finance function and

maintained a high engagement score across

the UK Finance function. He has also

implemented the first phase of the Group

material controls effectiveness processes as

part of the internal controls framework.

REMUNERATION FOR THE YEAR

ENDING 31 DECEMBER 2025

Strategic and business context

As set out in this Annual Report:

@ Balfour Beatty has delivered a further successful

period of operational and financial performance

in 2025, resulting in the Group achieving

profitable growth from its earnings-based

businesses for a fifth consecutive year, while

increasing forward order book, average net

cash and shareholder returns.

@ Matching our growth aspirations with our

focus on attracting and retaining new talent

and key skills remains particularly important.

From early careers and experienced hires to

senior leadership, we continue to invest in our

colleagues and strengthen our succession

pipeline. In the UK, early careers roles

represent 8.9% of the workforce.

@ Colleague engagement, measured through

thelatest survey, remained strong at 83%,

positioned 8percentage points above

industryaverage.

@ Balfour Beatty continues to embed our Right

toRespect programme across the Group

demonstrating its commitment to enabling an

ethical and inclusive culture. In the UK, the

programme received a Highly Commended

award at the Inspiring Women in Construction

and Engineering Awards. The Value Everyone UK

Diversity, Equity & Inclusion strategy and action

plan continues to show steady progress with

increased representation across key measures.

@ As we announced in August, Philip Hoare

joined the Company as Group Chief Executive

with effect from 8 September 2025. On the

same date, Leo Quinn stepped down from the

Board after over 10 years leading the business.

Details of the appointment terms for Philip

Hoare and the departure terms for Leo Quinn

@ Further details of the executive Directors’

strategic business and personal objectives are

set out on pages 148 to 150.

@ The performance conditions relating to the

2023 PSP awards measured performance over

the three years ended 31 December 2025.

TSR performance over the period was above

upper quartile, operating cash flow exceeded

maximum and EPS were towards the upper

end of the range. This results in these awards

vesting strongly at 95.6% of maximum. In

assessing the appropriateness of this

outcome, the Remuneration Committee

considered the overall performance of the

Company over the performance period and

shareholder experience, and considered the

outcome reflective of the strong achievement.

Whilst the Remuneration Committee is

conscious of potential windfall gains from

significant share price increases, the Committee

is satisfied the share price at grant was not

depressed and the growth reflects the sustained

underlying performance of the business.

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REMUNERATION FOR THE YEAR

ENDING 31 DECEMBER 2025

CONTINUED

Board changes

We announced on 24 February 2026 that Philip

Harrison will step down from the Board after over

10 years as Chief Financial Officer. Following an

extensive search process, Myles Westcott,

currently Group Financial Controller at BAE

Systems plc, has been appointed by the Board

tosucceed him.

Departure terms for Philip Harrison

Philip Harrison will remain in post as Chief

Financial Officer and an executive Director of

theCompany until Myles Westcott joins the

Group. Philip will continue to be employed in an

advisory capacity for four months to ensure a

seamlesstransition.

Philip received his normal remuneration for 2025

(details of which are included in the single total

figure remuneration table on page 146). He will

also be eligible for a pro-rated annual bonus in

respect of his active service for 2026. Reflecting

his long service and contribution to the business,

the Committee exercised its discretion to grant

‘good leaver’ status for the purpose of Balfour

Beatty’s share plans. Outstanding deferred

bonus share awards will vest on cessation of

employment in line with the Remuneration

Policy. Outstanding PSP awards, subject to

pro-rating for time and to the satisfaction of the

applicable performance targets, will vest on their

normal vesting dates. The post holding period

relating to Philip’s PSP awards will continue to

apply as per the plan rules. Full details are

provided on page 151.

REMUNERATION COMMITTEE CONTINUE D

Appointment terms for

MylesWestcott

We are delighted Myles will join the Board as

Group Chief Financial Officer. Myles’ deep

financial expertise and a strong track record of

operating at scale within complex, international

organisations will be critical as we continue to

drive disciplined, profitable growth. Details of his

remuneration are set out below:

@ Myles will receive a base salary of £530,000

and a pension allowance of 7% of salary

(aligned with the wider workforce), along with

other benefits offered to the wider workforce.

It is intended that his salary will next be

reviewed in July 2027.

@ Myles’ maximum annual bonus will be 150%

of base salary. For 2026, his bonus will be

pro-rated to reflect the period of service during

the year; and

@ Myles will also be granted a PSP award of

175% of base salary.

In line with usual practice, Myles will also receive

awards to partially compensate for remuneration

he is forfeiting on leaving his previous employer

and joining Balfour Beatty. We applied the following

principles in agreeing these buy-out awards:

@ the buy-out awards will not exceed the actual

value forfeited;

@ 2026 buy-out awards: we may compensate

Myles for amounts payable for vesting in 2026

based on the actual amounts forfeited

(including his 2025 annual bonus if forfeited);

@ 2027 and 2028 buy-out awards: we may

compensate Myles, in part, for amounts

payable or vesting in March 2026, April 2027,

and March 2028 in respect of share-based

awards granted by his former employer;

@ where the buy-out is to replace a share award,

it will be delivered as an award over Balfour

Beatty shares; and

@ the awards will vest no earlier than the same

timescales as the forfeited awards.

New Policy subject to binding

shareholder vote at the 2026 AGM

Our new Policy is proposed in the context of

continued strong performance of the Group and

the appointment of our new Group Chief Executive

and Chief Financial Officer. Our new Policy will

continue to deliver a robust link between strategy,

reward and performance supporting Balfour

Beatty’s drive to deliver ongoing profitable

managed growth.

During the year, the Remuneration Committee

has reviewed the current Policy and has concluded

that it remains largely fit-for-purpose and supports

the strategy of the Group. However, the

Remuneration Committee is proposing the

following changes to ensure that there is

sufficient flexibility built into the Policy for the

next three-year lifecycle:

@ Linking Annual Incentive Plan (AIP) deferral

to shareholding guidelines: The new Policy

will retain the requirement for 50% of any AIP

earned to be deferred into shares for three

years but the level of deferral will reduce to

33% of any AIP earned once the executive

Director has met their shareholding guideline.

The current 50% AIP deferral into shares for

three years is towards the upper end of market

practice compared to the FTSE 250 and sector

peers. Linking the level of the AIP deferral to

meeting the shareholding guideline is a

principle-based approach to ensuring the new

Policy supports the attraction and retention of

high-quality talent, whilst ensuring that executive

Directors’ interests are aligned with those of

Shareholders. Given 33% of the AIP earned

will continue to be deferred once shareholding

guidelines are met (and alongside the ability to

apply malus of unvested Performance Share

Plan (PSP) awards), theRemuneration

Committee believes there continues to be

sufficient mechanisms in place to operate

malus and clawback provisions.

@ The maximum AIP opportunity under

thenew Policy will remain at 150% of

basesalary.

@ Inclusion of headroom to increase the PSP

opportunity to up to 250% of base salary:

The new Policy will include an overall

maximum PSP opportunity of 250% of base

salary. This overall limit is to ensure the new

Policy remains fit for purpose over the next

three years. There is no current intention to

use this headroom. This headroom would only

be used in specific circumstances such as to

facilitate the recruitment or retention of an

executive Director; or in the event of a significant

increase in the size and complexity of the

business. As set out below, for 2026 the

maximum PSP award for Philip Hoare will be

200% of base salary and the PSP award for

Myles Westcott will be 175% of basesalary.

@ Increase in shareholding guidelines if PSP

award granted in excess of 200% of base

salary: The current shareholding guideline is

200% of base salary for all executive Directors

with the exception of Philip Harrison whose

shareholding guideline is 150% of salary.

Under the new Policy, the shareholding guideline

will be increased for any executive Director

who is granted a PSP award above 200% of

base salary at any time post the approval of the

new Policy. In this case, the shareholding

guideline will be equal to the PSP award level.

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@ Simplifying the interaction of the two-year

post-employment shareholding guideline

with the PSP two-year holding period and

the three-year deferral period for the

Deferred Bonus Plan (DBP): We are simplifying

the current Policy such that, at the Remuneration

Committee’s discretion, for example, in a

retirement / ‘good leaver’ scenario, DBP and

PSP awards will vest no later than two years

post-cessation (aligned to the post-cessation

shareholding guideline period). PSP awards

would continue to be subject to time pro-rating

and the satisfaction of the performance

conditions as assessed at the end of the

three-year performance period. This aligns the

timeframe for the release of DBP awards and

PSP awards with the two-year post-employment

shareholding guideline thereby reducing

complexity and administration.

Shareholder engagement

We are committed to aligning shareholder and

company interests, maintaining an open and

transparent dialogue with our shareholders on

executive pay and listening to your views.

As set out in our announcement following the

2025 AGM and our update statement on

7November 2025, the Board acknowledge that

the advisory vote to approve the Directors’

remuneration report at the 2025 AGM passed

with 70.25% support. We understand that the

level of support for the Remuneration report was

lower than in prior years solely due to the 2025

pay review for the Group’s Chief Financial Officer

(CFO), Philip Harrison.

As Chair of the Remuneration Committee, I wrote

to our major shareholders in advance of the 2025

AGM to set out the rationale for the pay review

and offered shareholders the opportunity

todiscuss the pay review in more detail.

Allshareholders that acknowledged the letter

were supportive of the action taken by the

Remuneration Committee. We did not receive

any negative feedback direct from shareholders

on the Remuneration report or the Chief Financial

Officer pay review prior to or following the AGM.

As part of the Company’s triennial review of

thePolicy, we have consulted with our major

shareholders and the main proxy advisory

agencies. Shareholders were supportive of the

proposed changes to thePolicy.

Remuneration for 2026

As set out in the Remuneration report last year,

Philip Harrison’s base salary was increased to

£598,000 with effect from 1 February 2025 reflecting

his significant experience and scope of his role

and responsibilities. Philip Hoare’s base salary

was set at £840,000. The next base salary review

date for Philip Hoare is 1 July 2026. Philip Harrison

will not be eligible for a base salary review in 2026.

No changes are proposed to the structure of the

performance measures to be used in the Annual

Incentive Plan for 2026. It will continue to be

based primarily on challenging Profit Before Tax

(50%), Group Total Cash Flow (25%) and strategic

business and personal objectives (25%). These

objectives will be disclosed in the 2026 Remuneration

report and include measurable objectives aligned

to delivering on our Environmental, Social and

Governance, Peopleand Quality commitments.

The executive Directors will be able to earn a

maximum bonus of 150% of base salary.

The PSP awards to be granted in 2026 will be

based on the achievement of three performance

measures EPS (33.3%); Operating Cash Flow

(33.3%) and TSR relative to the FTSE 250 excluding

investment trusts (33.3%). The Committee is

satisfied that the balance of measures remains

appropriate and supports the long-term business

strategy. As outlined above, Philip Hoare will be

granted a PSP award over shares worth 200% of

base salary and upon joining Myles Westcott will

be granted a PSP award over shares worth 175%

of salary. Philip Harrison will not receive a 2026

PSP award.

The Remuneration Committee will continue to be

mindful of the importance of setting appropriately

stretching targets for both the AIP and PSP

toensure that the incentive out-turns are

commensurate with the performance delivered,

wider stakeholder experience and the long-term

sustainable success of the Group. Given the

commercial sensitivity, the 2026 AIP targets will

be disclosed on a retrospective basis in the 2026

Remuneration report. The EPS and Operating

Cash Flow targets for the 2026 PSP are disclosed

prospectively on page 145.

Gender pay gap

Balfour Beatty’s UK gender pay gap increased

marginally in 2025 across both median and mean

measures. This was mainly a result of the success

in improved gender diversity of new hires,

particularly across the large number of early

careers roles which, building on prior years, has

increased female representation across the lower

pay quartiles by 15%, higher than that across

higher pay quartiles. Whilst the resulting increase

in the gender pay gap is undesirable, our in-depth

analysis helps us to focus on the underlying

cause, including looking beyond the numbers,

and understand the longer-term impact of key

activities implemented through our Value

Everyone DE&I plan in reducing the gap. Since

the introduction of gender pay reporting in

Balfour Beatty, the median gap has reduced by 7%

Conclusion

We believe that implementation of the

Remuneration Policy will continue to deliver

arobust link between strategy, reward and

performance, supporting Balfour Beatty’s drive

to deliver profitable managed growth and

sustainable cash generation. The Company’s

remuneration policies have been, and will

continue to be, implemented rigorously, aligned

with the Group’s strategic goals and culture. We

hope you will support the Remuneration report

and Policy at the 2026 AGM.

Wider workforce remuneration

In addition to the executive Directors, the

Committee reviewed both the level and structure

of remuneration for members of the Executive

Committee and receives regular updates on the

Company-wide pay and benefits for the wider

workforce and takes these into account when

reviewing executive and senior management

remuneration. A summary of the typical updates

shared with the Committee are included in the

table on page 134.

Anne Drinkwater

Chair of the Remuneration Committee

10 March 2026

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Review of level and structure of remuneration

forthe members oftheExecutiveCommittee

Receive regular updates on the wider workforce demographic, pay and benefits across the Group

Review and approve:

@ annual review of base pay levels;

@ Annual Incentive Plan structure, target ranges

and alignment to strategy andculture;

@ payments for Annual Incentive Plans,

considering overall business performance; and

@ Performance Share Plan participation levels

and performance conditions for plan launch

and achievement against performance

conditions of vesting plans.

@ Highlight remuneration practice across the wider workforce and how this relates to the business and HR strategic objectives.

@ Overview of distribution of annual base pay review including diversity and grade analysis, deployment of annual incentive plans and participation in all-employee

and discretionary share plans.

@ Compliance with statutory minimum pay levels including Balfour Beatty’s positioning against the voluntary UK Real Living Wage.

@ Summary of benefits provision and alignment to health, wellbeing and engagement plans.

@ Review of latest UK gender pay gap calculation and progression in reducing the gap, together with Group Chief Executive to average UK employee pay ratio.

@ Developments in employment policy requirements and updates to Balfour Beatty policies.

@ Involvement in a variety of live events, forums and conferences held during the year enabling impactful engagement across theGroup.

A summary of the remuneration arrangements across the wider workforce in 2025, compared with the executive Directors, is included in the table below.

Executive Directors Executive Committee and wider workforce

Base salary reviewed annually effective 1 July.

Following the announcement that he would be

stepping down from the Board, no increase was

awarded to Leo Quinn in 2025. As detailed in the

2024 Remuneration report, Philip Harrison

received a base salary increase, effective

1February 2025 and no further increase was

applied in 2025.

Salary Main salary review effective 1 January 2025, Total UK budget of 4% with 3% available for allocation January 2025 in line with

review guidelines.

Award ranges based on earnings levels, performance and market positioning. Continued focus on lower paid roles, taking the

voluntary UK Real Living Wage level into consideration when setting pay and implementation guidelines in UK.

3% median increase to Executive Committee, effective 1 July 2025.

Eligible for an annual bonus. Performance

measures aligned to Group financial performance

and strategic business/personal objectives.

Annual Incentive Plans Executive Committee and other eligible grades qualify for a bonus. Performance measures aligned to Group/Business Unit

appropriate to role.

Deferral of proportion of annual bonus paid for

threeyears.

Eligible to participate in long-term incentive plan

andall-employees Share Incentive Plan (SIP).

Shareholding requirements in place.

Share-based

incentive plans

Deferral of proportion of annual bonus paid for three years for Executive Committee and senior managers.

Executive Committee and some senior management are nominated for inclusion in a long-term incentive plan.

All UK employees eligible to participate in all-employees SIP. Shareholding requirements in place for ExecutiveCommittee.

Executive Director pension provision of 7%. Pension UK Employer contribution average of 7% of base salary.

REMUNERATION COMMITTEE CONTINUE D

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REMUNERATION AT A GLANCE

Ahead of the Annual Report on Remuneration, we have summarised below the key remuneration outcomes

for 2025, the key elements of the proposed remuneration policy to be approved at the 2026 AGM and how

we intend to implement it in 2026. The full remuneration policy can be found on pages 136 to 145.

AIP METRICS AND OUTCOMES

PROFIT BEFORE TAX TOTAL SHAREHOLDER RETURN

TSR against the 143 remaining companies ranked 51–200

in the FTSE All Share Index (excluding investment trusts)

EARNINGS PER SHARE

Underlying basic earnings per share from continuing operations

CASH

Operating cash flow (OCF)

PSP OUT-TURN

STRATEGIC BUSINESS AND PERSONALOBJECTIVES AIP OUT-TURN

GROUP TOTAL CASH FLOW

ACTUAL

£627.5m

>100%

of maximum

ACTUAL

£290.8m

74.4%

of maximum

ACTUAL

>MAX

100%

of maximum

ACTUAL

47.6p

86.9%

of maximum

ACTUAL

£656m

100%

of maximum

Actual £290.8m

Actual Above Upper Quartile

Actual 47.6p

Actual £656m

Actual £627.5m

Maximum £305.0m

Maximum Upper Quartile

Maximum 50.7p

Maximum £396m

Target £277.3m

Target –

Target £3 46m

CFO 95.6% of Maximum

Threshold £221.8m

Threshold Median

Threshold 33.0p

Threshold £242m

CEO 95.6% of Maximum

ACTUAL

90%

of maximum

ACTUAL

84.7%

of maximum

ACTUAL

86%

of maximum

ACTUAL

83.7%

of maximum

Target £41.7m

Threshold £33.4m

Maximum £151.7m

PSP METRICS AND OUTCOMES

Group Chief

Executive

Group Chief

Executive

Chief Financial

Officer

Chief Financial

Officer

A reconciliation of the Group’s performance measures to its statutory results is provided in the Measuring our financial performance section.

1 Group total cash flow of £627.5 million is the movement

between opening and closing net cash adjusted for £125 million

share buyback.

2 Operating cash flow of £656 million is defined in the

Measuring our financial performance section.

3 Underlying basic earnings per share from continuing operations.

4 Group Chief Executive’s remuneration scenario is calculated

on base salary of £840k for Philip Hoare. On-target is pro-rata

to reflect time served in 2025 by Philip Hoare from joining

date of 8 September 2025. Actual is fixed pay and annual

bonus for Philip Hoare in 2025. Chief Financial Officer’s

remuneration scenario is calculated on base salary of

£519.15k at 1 January 2025.

5 In line with the Investment Association (IA) guidelines,

calculations shown include shares beneficially owned at

31December 2025 plus unvested shares which are not

subject to a further performance condition, on a net of tax

basis, calculated using base salary at 31 December 2025.

EXECUTIVE DIRECTOR

REMUNERATION SCENARIOS

PSP

AIP

Fixed pay

Vesting >100% of maximum

Vesting 86.9% of maximum

Vesting >100% of maximum

EXECUTIVE DIRECTORS’

SHAREHOLDING GUIDELINES

(% of base salary held)

33%

200%

960%

150%

Actual Actual

Group Chief

Executive

Guideline Guideline

Chief Financial

Officer

Actual Actual

Group Chief

Executive

On-target On-target

£626k

£744k

Chief Financial

Officer

£2,854k

£1,479k

35%

26%

39%

46%

54%

51%

26%

23%

35%

26%

39%

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PROPOSED DIRECTORS’ REMUNERATION POLICY

A summary of the proposed changes

to the Remuneration Policy are:

@ The new Policy will retain the requirement for

50% of any AIP earned to be deferred into

shares for three years but the level of deferral

will reduce to one-third of any AIP earned

oncethe executive Director has met their

shareholding guideline. Linking the level of

theAIP deferral to meeting the shareholding

guideline is a principle-based approach to

ensuring the new Policy supports the attraction

(and retention) of high-quality talent, whilst

ensuring that executive Directors’ interests are

aligned with those of our shareholders. The

one-third AIP deferral once the shareholding

guideline is met is also aligned with the level of

AIP deferral for the Executive Committee.

@ The maximum AIP opportunity under the new

Policy will remain at 150% of base salary.

@ The overall maximum PSP opportunity will

increase to 250% of base salary. This overall

limit is to ensure the new Policy remains fit

forpurpose over the next three years. This

headroom would only be used in specific

circumstances such as to facilitate the

recruitment or retention of an executive

Director; or in the event of a significant

increase in the size and/or complexity of

thebusiness.

@ The shareholding guideline will be increased

for any executive Director whose annual PSP

award opportunity is greater than 200% of

base salary. In this case, the shareholding

guideline will be equal to the PSP award level.

@ Simplification of the interaction of the two-year

post-employment shareholding guideline with

the PSP two-year holding period and the

three-year deferral period for the Deferred

Bonus Plan: At the Remuneration Committee’s

discretion, (e.g. for a genuine retirement),

PSPawards will vest on later of i) end of the

three-year performance period; ii) two years

post-cessation (aligned to the post-cessation

shareholding guideline period). DBP awards

would also vest two years post-cessation

(aligned to the post-cessation shareholding

guideline period). This change limits the shares

which must be held to two years post-cessation

for a good leaver thereby reducing complexity

and administration. This change will not apply

for Philip Harrison.

Further context is set out in the Remuneration

Committee Chair’s statement.

The following table sets out a summary of each

element of the proposed executive Directors’

remuneration packages, their link to the Company’s

strategy, the policy for how these are operated,

the maximum opportunity and a description of

any relevant performance metrics.

Element of pay Purpose and link to

Company’s strategy

How it is operated in practice Maximum opportunity Performance metrics

Base salary To attract and retain high-calibre

individuals.

To provide a competitive salary

relative to comparable companies in

terms of size and complexity.

Salaries are normally reviewed and set annually in July. The Committee

considers remuneration levels in companies of comparable market

capitalisation, revenue and industry sector.

In addition, a key reference point for salary increases is the average increase

across the general workforce (with the exception of promotions or significant

changes in responsibility).

Salaries are paid monthly.

There is no prescribed maximum annual increase.

TheCommittee is guided by the general increase

for the broader employee population. However,

increases may be awarded which are different

to the general increases for the broader

population where appropriate. This includes the

ability to award higher increases in appropriate

circumstances, such as:

@ on promotion or in the event of an increase

in scope of the individual’s role or

responsibilities;

@ where an individual has been appointed to

the Board at a lower than typical market

salary to allow for growth in the role, in which

case larger increases may be awarded to

move salary positioning to a typical market

level as the individual gains experience;

@ change in size and/or complexity of the

Group; and/or

@ significant market movement.

Increases may be implemented over such time

period as the Committee deems appropriate.

While no performance conditions apply to fixed

remuneration, a number of factors are

considered, notably market competitiveness,

business andpersonal performance.

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Element of pay Purpose and link to

Company’s strategy

How it is operated in practice Maximum opportunity Performance metrics

Benefits To aid retention and to remain

competitive in the marketplace.

Inaddition, medical benefits are

provided to minimise disruption

duetoabsence.

Private medical (including for the executive Director’s family) and life

assurance may be provided. A car or car allowance are offered. Executive

Directors are eligible to participate in any all-employee share scheme

operated by the Group.

Other benefits may be provided based on individual circumstances,

whichmay include relocation costs or allowances, travel and

accommodationexpenses.

Reimbursed expenses may include a gross-up to reflect any tax or social

security due in respect of the reimbursement.

The Committee has not set a maximum level

of benefits executive Directors may receive.

The value is set at a level which the Committee

considers to be appropriate taking into account

the nature and location of the role and

individual circumstances. Participation in any

all-employee share scheme is in line with the

rules of the scheme, including the permitted

maximum levels of participation.

None

Pension To remain competitive in

themarketplace.

Executive Directors can elect eitherto:

@ receive an employer contribution to the defined contribution (DC) section

of theGroup’s pension fund;

@ receive a salary supplement in lieu of a pension; or

@ receive a combination of an employer contribution to the DC pension

fundand a salary supplement.

The maximum employer contribution (whether

by way of employer pension contribution,

salary supplement, or a combination) will not

exceed the level of contribution available to the

wider workforce, currently 7% of base salary.

The Committee retains discretion to determine

the approach to and calculation of the

workforce pension level, including if relevant

the methodology for international directors.

None

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Element of pay Purpose and link to

Company’s strategy

How it is operated in practice Maximum opportunity Performance metrics

Annual Incentive

Plan (AIP) and

Deferred Bonus

Plan (DBP)

To motivate executive Directors and

incentivise the achievement of key

business performance targets over

the financial year without encouraging

excessive risk taking. Managing risk is

critical, particularly given the nature of

the Company’s business.

To facilitate share ownership, aid

retention and provide further

alignment with shareholders.

The payment of any bonus is at the absolute discretion of the Committee

which has the discretion to override the out-turn of the bonus if appropriate

to do so. It may exercise this discretion to take account of factors including,

but not limited to, the underlying financial and operational performance of the

Company, individual performance, HSE and Sustainability record, the

appropriateness of the value that would otherwise be earned, the occurrence

of any exceptional event and whether the out-turn that would otherwise apply

is not appropriate in the context of circumstances that were unexpected or

unforeseen at the start of the bonus year.

Until an executive Director has met the shareholding guideline (as determined

by the Committee), 50% of any payment is normally deferred into shares for

three years. The amount deferred into shares is reduced to one-third once the

executive Director has met the shareholding guideline. Deferred share

awards may take the form of nil cost options, conditional awards of shares or

such other form as has a similar economic effect.

Both the cash and deferred share elements of the annual bonus are subject

to malus and clawback provisions – see ‘Malus & Clawback’ below for

furtherdetails.

Participants may also receive an additional award of shares in lieu of the value

of dividends paid over the deferral period in relation to deferredshares (this

payment may assume that dividends had been reinvested in Balfour Beatty

shares on a cumulative basis).

Maximum annual incentive opportunity is

150% of basesalary.

Each year the Committee will select performance

measures for the annual bonus that are aligned

with the strategy of the Company.

At least 50% of the annual bonus will be based

on financial metrics.

Subject to the Committee’s discretion

tooverride the bonus out-turn:

@ for financial measures, up to 20%

ofmaximum is earned for threshold

performance rising to up to 50% for

on-target performance and 100%

formaximum; and

@ for strategic or individual objectives

between 0% and 100% of maximum

isearned based on the Committee’s

assessment of the extent to which the

relevant metric or objective has been met.

The AIP performance measures and

weightings for 2026 are disclosed on page145.

The choice and weighting of the metrics for

future awards may be altered to reflect the

changing needs of the business.

The Committee retains the discretion

toretrospectively amend the measures,

weightings, targets and/or method of

assessment for the in-year bonus to take into

account a change in the business strategy,

significant acquisition or disposal, change in

accounting treatment or the occurrence of

other exceptional circumstances to ensure that

the scheme is able to fulfil its original purpose.

PROPOSED DIRECTORS’ REMUNERATION POLICY CONTINUED

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Element of pay Purpose and link to

Company’s strategy

How it is operated in practice Maximum opportunity Performance metrics

Performance

Share Plan (PSP)

To incentivise and reward delivery of

long-term performance linked to the

business strategy.

To facilitate share ownership and

provide further alignment with

shareholders.

To aid retention.

The Committee may grant awards as conditional shares, as nil (or nominal)

cost options, as forfeitable shares or in such other form as has a similar

economic effect.

PSP awards are granted annually so that no undue emphasis is placed on

performance in any one particular financial year.

Awards will ordinarily vest, subject to performance, following the assessment

of the applicable performance conditions which will typically be assessed

over three years. Awards will then be subject to an additional two-year

holding period, during which time awarded shares may not ordinarily be sold

(other than for tax). Alternatively, the holding period may be operated on the

basis that awards will not normally be released (so that the participant is

entitled to acquire shares) until the end of the holding period of two years

beginning on the vesting date.

The Committee has the discretion to override the formulaic out-turn of the

award if appropriate to do so. It may exercise this discretion to take account

of factors including, but not limited to, the underlying financial and operational

performance of the Company, individual performance and HSE and

Sustainability record, the appropriateness of the value that would otherwise

vest, the occurrence of any exceptional event and whether the vesting level

that would otherwise apply is not appropriate in the context of circumstances

that were unexpected or unforeseen at the award date.

Malus and clawback provisions apply to all awards made under the PSP – see

‘Malus & Clawback’ below for further details.

Participants also receive an additional award of shares in lieu of the value of

dividends paid over the vesting and, if the holding period is operated on the

basis shares cannot be acquired until the end of it, over the holding period in

relation to vested shares (this payment may assume that dividends had been

reinvested in Balfour Beatty shares on a cumulative basis).

The ordinary maximum award in respect of a

financial year is 200% of base salary.

In specific circumstances such as to facilitate

the recruitment of an executive Director or in

the event of a significant increase in the size

and/or complexity of the business, the

maximum award in respect of a financial year

is 250% of base salary.

Awards in respect of 2026 will be granted at

the level of 200% of salary for the Group Chief

Executive Officer and 175% of salary for other

executive Directors.

PSP awards will be granted in accordance with

the rules of the PSP and the discretions

contained therein.

Performance measures will be set on an

annual basis to reflect the Company’s strategy

and provide stretching conditions in the light of

the Company’s current and expected

performance over the performance period. A

minimum of 30% of any award will be based

on relative total shareholder return (TSR). The

balance of any award may be based on

financial and/or non-financial metrics provided

that at least 75% of the award is based on

financial and/or TSR measures.

Subject to the Committee’s discretion to

override the formulaic out-turn of the award,

there is up to 25% vesting for threshold

performance, rising to 100% vesting for

maximum performance.

The PSP performance measures and

weightings for 2026 are disclosed on page 145.

The choice and weighting of the metrics for

future awards may be altered to reflect the

changing needs of the business.

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Element of pay Purpose and link to

Company’s strategy

How it is operated in practice

Shareholding

guidelines

To align the interests of executive

Directors with those of shareholders.

The Committee retains discretion to vary the application of the shareholding guidelines in exceptional circumstances.

In-post requirements

Executive Directors are expected to accumulate a shareholding in the Company’s shares to the value of 200% of base salary, or 150% of salary for Philip Harrison.

There is an aim that this is built up within five years of employment commencing. Executive Directors are expected to retain at least 50% of shares (net of tax) which

vestfromawards made under the PSP and DBP until the target shareholding is attained.

Where an executive Director’s annual PSP award opportunity is greater than 200% of base salary, the requirement will be increased to equal the PSP award level.

Shares subject to awards which are not (or are no longer) subject to performance conditions will count towards the requirement on a net of assumed tax basis.

Post-cessation requirements

For Philip Harrison, the post-vesting holding condition, which applies to PSP awards from 2019 onwards, requires the vested shares (net of tax) to be held until the fifth

anniversary of grant and will continue to apply post-cessation of employment.

Other executive Directors will be required to hold the lower of 100% of their in-post share ownership requirement or their actual holding on departure, for two years

post-cessation of employment.

No post-cessation restriction will apply to shares purchased by Directors from their own funds.

Malus and clawback

The rules of the PSP and the Company’s annual

incentive (including any element deferred into

shares) include provisions for malus and clawback

to apply if the Committee concludes that:

@ any financial results or other performance

measures used to assess the extent to which

an award vested or payment was made was

misstated, incorrect or misleading;

@ the extent to which an award or payment was

made was based on error;

@ an event, act or omission occurs which results

in any member of the Group suffering material

reputational damage;

@ any member of the Group has suffered an

instance of corporate failure, which includes,

but is not limited to: a material reduction in the

value of the relevant company; an involuntary

insolvency or similar circumstance; or any

event that the Committee determines has a

material negative impact on any of the

stakeholders in the Company; or

@ the relevant individual has committed

misconduct.

Clawback generally may be applied for up to

twoyears following payment of a cash AIP,

andup to two years following vesting in respect

of awards granted under the DBP and PSP.

Theseprovisions are set to reflect a timeframe

inwhich the company’s financial reporting,

auditand riskprocedures would typically identify

one of the malus and clawback trigger events.

The Committee retains the discretion to extend

the clawback period in the event of an

ongoinginvestigation.

Discretions retained by the

Committee in operating the PSP

andother variable pay schemes

The Committee operates the Group’s various

incentive plans according to their respective rules

and (where applicable) in accordance with

relevant legislation and HMRC guidance. In order

to ensure efficient administration of these plans,

certain operational discretions are reserved to

the Committee. These include:

@ determining who may participate in the plans;

@ determining the timing of grants of awards

and/or payments under the plans;

@ determining the quantum of any awards and/or

payments (within the limits set out in the

policy table above);

@ determining that a share-based award or any

dividend equivalent shall be settled (in full or in

part) in cash, although the Committee would

only settle an executive Director’s award in

cash in exceptional circumstances, such as

where there is a regulatory restriction on the

delivery of shares, or in respect of the tax

liability arising in relation to the award;

@ determining the performance measures and

targets applicable to an award (in accordance

with the statements made in the policy table

above), including discretion to amend or

substitute the performance measures and

targets in the event of changes in accounting

standards or if other exceptional circumstances

occur which cause the Committee to

reasonably consider it appropriate to do so;

@ where a participant ceases to be employed by

the Company, determining whether ‘good

leaver’ status shall apply;

@ determining the extent of vesting of an award

based on assessment of the performance

conditions, including discretion as to the basis

on which performance is to be measured if an

award vests in advance of normal timetable (on

cessation of employment as a ‘good leaver’ or

on the occurrence of corporate events);

@ determining whether, and to what extent,

awards shall be reduced pro-rata to reflect the

proportion of the performance period

completed in the event of cessation of

employment as a ‘good leaver’ or on the

occurrence of corporate events;

@ determining whether malus and/or clawback

shall be applied to any award and, if so, the

extent to which they shall apply;

PROPOSED DIRECTORS’ REMUNERATION POLICY CONTINUED

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@ making appropriate adjustments to awards on

account of certain events, such as major changes

in the Company’s capital structure; and

@ reducing, delaying or imposing additional

conditions on payments and/or vesting

ofawards.

Consideration of shareholders’ views

The Committee considers feedback from

shareholders received at each AGM, and any

feedback from additional meetings or from

published investor guidelines, as part of any

review of executive remuneration. In addition,

the Committee engages proactively with

shareholders and will ensure that shareholders

are consulted in advance where any material

changes to the remuneration policy and

implementation of that policy are proposed.

Indeed, the process surrounding the formulation

of the 2026 Policy included a programme of

engagement with the Company’s largest

institutional investors (including the top 20

shareholders) and a selection of proxy agencies

in order to understand their views on the

proposed approach. Where questions were

raised, or clarification on any points was

requested, these were responded to on a

case-by-case basis.

Consideration of employment

conditions elsewhere in the Group

and differences between

arrangements for executive Directors

and other employees

In determining the remuneration of the executive

Directors, the Committee takes into account the

general trends in pay and conditions across the

Group as a whole. Whilst employees have not

been consulted formally on executive pay, due in

part to the diverse geographic disposition of the

Group, the Committee also took into account the

pay policies across the Group and themes from

our workforce engagement activities. The

Committee also seeks to ensure that the

underlying principles which form the basis for

decisions on Directors’ pay are consistent with

those on which pay decisions for the rest of the

workforce are taken.

The following differences exist between the

Company’s policy for the remuneration of

executive Directors and its approach to the

payment of employees generally:

@ Participation in the PSP is typically aimed at

the executive Directors and certain selected

senior managers. Other employees may be

invited to participate in the Restricted Share

Plan (RSP) to aid retention and recognition.

Shadow RSP schemes have been introduced

on a cash-settled basis which mirror the

conditions of the equity-settled RSP schemes,

awards under which are principally made to

employees based in the US. All UK employees

including executive Directors, are eligible to

participate in the Company’s Share Incentive

Plan up to prevailing HMRC limits.

@ A lower level of maximum annual bonus

opportunity applies to eligible employees other

than executive Directors. For certain selected

senior managers, a proportion of any bonus

will be deferred into shares under the DBP.

@ Benefits offered to other employees,

depending on their employee grade, may

include health insurance, death-in-service

benefit, a company vehicle or cash allowance

and access to other voluntary employee benefits.

In general, these differences arise from the

development of remuneration arrangements that

are market competitive for the various categories

of individuals. They also reflect the fact that, in

the case of the executive Directors, a greater

emphasis is placed on variable pay.

Executive Director remuneration scenarios

A significant proportion of remuneration is linked to performance, particularly at maximum

performance levels.

The charts below show how much the Group Chief Executive and Chief Financial Officer could earn in

future periods based on different performance scenarios in respect of awards to be made in the 2026

financial year under Balfour Beatty’s remuneration policy.

CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER

Minimum

Fixed pay AIP PSP

MinimumMaximum MaximumTarget Target

Maximum +

share price

appreciation

Maximum +

share price

appreciation

£921k

£651k

£2,391k

£1,623k

£2,595k

£3,118k

£3,861k

£4,701k

35%

43%

54%

26%

33% 27%

100% 39% 24% 19%

32%

40%

50%

28%

35% 29%

100%

5000

4000

3000

2000

1000

3500

3000

2500

2000

1500

1000

500

40% 25%

21%

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Executive Director remuneration

scenarios continued

The following assumptions have been made:

@ minimum (performance below threshold) –

fixed pay only with no vesting under any of

Balfour Beatty’s incentive plans;

@ target – fixed pay plus a bonus (AIP) at the

mid-point of the range (giving 50% of the

maximum opportunity) and vesting of 50%

ofthe face value of the award at grant under

thePSP;

@ maximum (performance meets or exceeds

maximum) – fixed pay plus 100% of the bonus

(AIP) opportunity and 100% of the face value

of the award at grant under the PSP; and

@ maximum + 50% share price growth

(performance meets or exceeds maximum and

50% increase in share price) – fixed pay plus

maximum bonus (AIP) and maximum vesting

under the PSP at a 50% higher share price

than when the PSP award was granted.

Fixed pay comprises:

@ salaries – £840,000 for Group Chief Executive

and £598,000 for the Chief Financial Officer;

@ benefits – amount received in the 2025

financial year; and

@ pension – cash allowance in lieu of pension is

7% of base salary.

Recruitment and promotion policy

forexecutive Directors

To ensure the ongoing leadership continuity of

the Group, the Company will seek the appointment

of high-calibre executives, either by external

appointment or internal promotion. The

remuneration package for a new executive

Director would be set in accordance with the

terms of the Company’s remuneration policy at

the time of appointment and take into account

the scope and complexity of the role, the

experience of the individual, the prevailing market

rate for that experience and the importance and

immediacy of securing that candidate.

When determining appropriate remuneration

arrangements, the Committee may include other

elements of pay which it considers are

appropriate. However, this discretion is capped

and is subject to the limits referred to below.

The salary would be set at a level, based on the

principles above, to secure the most appropriate

candidate but paying no more than is necessary

and in the best interests of the Company and its

shareholders. This may include agreement on

future increases, in line with increased experience

and/or responsibilities, subject to good

performance, where it is considered appropriate.

Pension contributions (and/or salary supplement

in lieu) will not exceed the level of contribution

available to the wider workforce, currently up to

7% of salary. The AIP potential would be limited

to 150% of salary, and grants under the PSP may

be up to the plan maximum of 250% of salary

per annum.

The Committee will not offer non-performance

related incentive payments (such as a

‘guaranteed sign-on bonus’, for example).

Other elements may be included in the

followingcircumstances:

@ an interim appointment being made to fill an

executive Director role on a short-term basis;

@ if exceptional circumstances require that the

Group Chair or a Non-executive Director takes

on an executive function on a short-term

basis;and

@ if an executive Director is recruited at a time in

the year when it would be inappropriate to

provide an incentive for that year as there

would not be sufficient time to assess

performance. Subject to the limit on variable

remuneration set out below, the quantum in

respect of the months employed during the

year may be transferred to the subsequent

year so that reward is provided on a fair and

appropriate basis.

The Committee may also alter the performance

measures, performance period, vesting period,

holding period and deferral period of the AIP or

PSP, subject to the rules of the PSP, if the

Committee determines that the circumstances of

the recruitment merit such alteration. The

rationale will be clearly explained in the next

Directors’ remuneration report.

The maximum level of variable remuneration,

which may be granted (excluding ‘buy-out’

awards) is 400% of salary.

The Committee may make payments or awards

in respect of hiring an employee to ‘buy-out’

remuneration arrangements forfeited from a

previous engagement. In doing so, the

Committee will take account of relevant factors

including any performance conditions attached to

the forfeited arrangements and the time over

which they would have vested. The Committee

will generally seek to structure ‘buy-out’ awards

or payments on a comparable basis to the

remuneration arrangements forfeited. Any such

payments or awards are excluded from the

maximum level of variable remuneration

referredto above.

For an internal executive Director appointment,

any remuneration awarded in respect of the prior

role may be allowed to pay out according to its

terms, adjusted as relevant to take into account

the appointment. In addition, any other ongoing

remuneration obligations existing prior to

appointment may continue.

For external and internal appointments, the

Committee may agree that the Company will

meet certain relocation and/or incidental

expenses asappropriate.

Fees payable to a newly appointed Group Chair

or Non-executive Director will be in line with the

policy in place at the time of the appointment.

PROPOSED DIRECTORS’ REMUNERATION POLICY CONTINUED

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Service agreements and payments for loss of office for executive Directors

It is the Company’s policy that executive Directors should have contracts with an indefinite term, which

can be terminated on one year’s notice by the Company and six months’ notice by the executive Director.

In accordance with the Code, all executive Directors submit themselves for re-election at the AGM.

In the event of termination, the following principles will apply:

Provision Detailed terms

Notice period Philip Hoare’s service agreement may be terminated on 12 months’ notice by

either party.

Philip Harrison’s service agreement may be terminated on 12 months’ notice by

the Company and six months by Philip Harrison.

For any newly appointed executive Director, the Committee may offer a notice

period of up to 12 months by either party.

In the event of termination by the Company ‘for cause’ the executive Director

would not be entitled to the period of notice specified above under his or her

contract of employment or to any payment in lieu of notice.

Notice payments If any existing contract was terminated by the Company (other than for cause), it

would be liable to pay salary and contractual benefits for the notice period,

including any period of garden leave. The Company may elect to make payment

in lieu of any unexpired period of notice comprising salary and a cash sum in lieu

of benefits.

The Company reserves the right to apply mitigation to any payment in lieu of

notice, for example by making phased payments where appropriate for the

balance of any notice period, against which earnings from new employment

would be offset.

Annual bonus This will be reviewed on an individual basis and the decision whether or not

toaward a bonus in full or in part will be dependent upon a number of factors

including the circumstances of their departure and their contribution to the

business during the bonus period in question, such that a bonus will be paid only

in circumstances that the Committee considers are good leaver circumstances.

Any bonus payment would typically be pro-rated for time in active service

andpaid at the usual time, subject to the Committee’s assessment of the

extent to which the performance conditions have been met. The Committee

retains discretion to pay the whole of any bonus earned in cash in appropriate

circumstances. Having this ability to pay a bonus in cash rather than deferred

shares on cessation of employment would reduce administration of doing a

simultaneous transaction i.e. granting a deferred share award which vests

immediately with shares sold for cash on cessation of employment.

Provision Detailed terms

Deferred

bonusawards

Any share-based entitlements granted to an executive Director under the

Company’s share plans will be determined based on the relevant plan rules.

For Philip Harrison, outstanding DBP awards will lapse on cessation of

employment, except in certain good leaver circumstances prescribed by the

plan rules when DBP awards will vest in full on the date of cessation.

For any other executive Director, in certain good leaver circumstances

prescribed by the plan rules, DBP awards will vest on the normal vesting date

or, at the Committee’s discretion, two years post-cessation of employment (if

earlier). However, the Committee has discretion to determine that DBP awards

will vest at cessation in appropriate circumstances.

PSP awards Any share-based entitlements granted to an executive Director under the

Company’s share plans will be determined based on the relevant plan rules. The

default treatment under the PSP is that any outstanding awards lapse on cessation

of employment. However, in certain prescribed circumstances, such as death, ill

health, injury, disability, retirement or other circumstances at the discretion of the

Committee, awards will not be forfeited on cessation of employment and, subject

to the satisfaction of the relevant performance conditions, will vest subject to the

satisfaction of the performance conditions and with a pro-rata reduction to reflect

the proportion of the performance period actually served. Any award held by Philip

Harrison would ordinarily not be released until the end of the originally envisaged

holding period. For any other executive Director, awards may be released at the end

of the originally envisaged holding period or, at the discretion of the Committee,

would be released at the later of the end of the performance period and two years

after cessation of employment.

The Committee has discretion to determine that PSP awards vest/are released at

cessation and/or to amend time pro-rating in appropriate circumstances.

Change of control There are no provisions for enhanced termination payments in the event of

change of control of the Company.

Incidental

expenses and

other payments

The Company may meet relocation and other incidental expenses on termination of

employment, for example relocation expenses, outplacement fees, the fees of legal

or other professional advisers, and accrued but untaken holiday. It may also elect to

continue to provide certain benefits rather than making payment in lieu of the benefit

in question. Awards under the Company’s all-employee Share Incentive Plan will be

treated in accordance with the rules of that plan. In appropriate circumstances, the

Committee may agree that certain benefits may be continued for a reasonable

period following termination of employment.

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Service agreements and payments for loss of office for executive Directors

continued

Where a ‘buy-out’ or other ‘one-off’ award is made, the leaver provisions would be determined at the

time of the award.

The Committee reserves the right to make additional exit payments where such payments are made in

good faith in discharge of an existing legal obligation (or by way of damages for breach of such an

obligation) or by way of settlement or compromise of any claim arising in connection with the

termination of a Director’s office or employment.

Legacy arrangements

The Committee reserves the right to make any remuneration payments and/or payments for loss of

office (including exercising any discretions available to it in connection with such payments)

notwithstanding that they are not in line with the policy set out above where the terms of the payment

were agreed:

@ before the policy came into effect (provided that, in the case of any payment agreed after the

Company’s 2014 Annual General Meeting, they are in line with the policy in place at the time the

terms were agreed or were otherwise approved by shareholders); or

@ at a time when the relevant individual was not a Director of the Company and, in the opinion of the

Committee, the payment was not in consideration for the individual becoming a Director of the

Company; and to satisfy contractual commitments under legacy remuneration arrangements.

For these purposes, ‘payments’ includes the Committee satisfying awards of variable remuneration

and, in relation to an award over shares, the terms of the payment are ‘agreed’ at the time the award

isgranted.

External appointments of executive Directors

The Committee recognises that benefits can arise from allowing executive Directors to take a

non-executive directorship elsewhere, from which fees may be retained with the approval of the Board.

Appointment of Independent Non-executive Directors

Independent Non-executive Directors are appointed by the full Board following recommendations from

the Nomination Committee. All Independent Non-executive Directors are appointed for a term of three

years. In accordance with the Code, all Independent Non-executive Directors submit themselves for

re-election at the AGM.

Element

of pay

Purpose and link

to Company’s

strategy How it is operated in practice

Maximum

opportunity

Independent

Non-executive

Director fees

To attract and

retain high-

quality and

experienced

Independent

Non-executive

Directors.

The Group Chair is paid an annual fee and the

Independent Non-executive Directors are paid

an annual base fee and additional responsibility

fees for the role of Senior Independent Director

or for chairing a Board Committee. Additional

fees may be paid for other responsibilities or

time commitments.

Independent Non-executive Directors may

receive a travel allowance for intercontinental

travel on Company business (excluding travel

within home continent).

The Independent Non-executive Directors are

not eligible to join any pension scheme

operated by the Company and cannot

participate in any of the Company’s

performance-based share plans or annual

incentive schemes although their fees may be

paid in cash or shares (which may include a

non-performance based nil or nominal cost

award over Company shares, which may

incorporate a right to dividend equivalents over

the award’s vesting period).

The Company will pay any reasonable business

related expenses (including tax thereon where

determined as a taxable benefit).

The Chair and Independent Non-executive

Directors may also be eligible to receive

benefits such as the use of secretarial support,

assistance with the preparation of tax returns,

or other benefits that may be appropriate.

Fees are set

taking into

account the

responsibilities

of the role and

expected time

commitment.

Where benefits

are provided to

Independent

Non-executive

Directors they

will be provided

at a level

considered to

be appropriate

taking into

account the

individual

circumstances.

The appointment letters for Independent Non-executive Directors may be terminated with three

months’ notice (six months’ notice for the Group Chair) by either party and contain no provision for

payment in the event of termination in addition to such notice.

PROPOSED DIRECTORS’ REMUNERATION POLICY CONTINUED

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Our approach for 2026

Base salary During the year the Committee reviewed the market positioning for remuneration of

the Group Chief Executive andChief Financial Officer.

Philip Harrison’s base salary was increased to £598,000 in February 2025 and will not

receive a further increase in 2026.

The Group Chief Executive, Philip Hoare’s base salary on appointment was £840,000.

Philip Hoare’s next salary review will be July 2026.

Myles Westcott will receive a base salary of £530,000, which is circa 11% lower than

Philip Harrison, who will step down from the Board when Myles joins the Board. It is

intended that Myles Westcott’s salary will be next reviewed in July 2027.

Pension and

benefits

The pension provision for executive Directors is aligned to the level of the wider workforce,

currently 7% of base salary.

Annual

Incentive

Plan (AIP)

For 2026, the AIP for the executive Directors will be a maximum bonus of 150% of

base salary, based on the achievement of three performance measures:

@ profit before tax (50%);

@ cash (25%); and

@ strategic business (including health and safety, environmental and sustainability

measures) and personal objectives (25%).

The three elements are measured and calculated independently of each other and 50%

of any bonus earned will be deferred for three years in shares. Under the proposed

new Policy the level of deferral will reduce to 33% of any AIP earned once the

executive Director has met their shareholding guideline.

Annual bonus earned by Philip Harrison and Myles Westcott will be pro-rated to reflect

active service during the year.

While the Committee has chosen not to disclose in advance the performance targets

for 2026 as these include items which the Committee considers commercially

sensitive, retrospective disclosure of the targets and performance against them will be

presented in the Remuneration report for 2026.

Our approach for 2026

Long-term

incentive

For 2026, the Group Chief Executive will be granted a Performance Share Plan (PSP)

award over shares worth 200% of base salary and the Chief Financial Officer 175% of

base salary. Philip Harrison will not be granted a 2026 PSP award.

The PSP awards to be granted in 2026 will be based on the achievement of three

performance measures: EPS (33.3%), cash (33.3%) and relative TSR (33.3%).

The TSR peer group will be FTSE 250 companies (excluding investment trusts).

Metric Measure Threshold Target Maximum

Total shareholder

return

TSR ranking Median

Upper

quartile

Cash Operating cash flow (OCF) £279m £398m £448m

EPS

Underlying basic EPS from

continuing operations

49.2p 75.4p

The Committee considers that the performance measures are aligned to long-term

business strategy and appropriately stretching reflecting the current environment.

Shareholding

guidelines

200% of base salary for the Group Chief Executive and incoming Chief Financial

Officer, Myles Westcott. 150% of base salary for Philip Harrison.

The post-vesting holding condition applying to PSP awards requires the vested shares

(netof tax) to be held until the fifth anniversary of grant and will continue to apply

post-cessation of employment.

Independent

Non-executive

Directors

The Company’s approach to setting Non-executive Directors’ fees is by reference to

fees paid at similar companies and reflects the time commitment and responsibilities

of each role. At the annual review on 1 July 2025, Independent Non-executive Directors’

fees were increased in line with the wider workforce. The next review date is 1 July 2026.

1 July 2024

(£)

1 July 2025

(£)

Group Chair 324,600 334,300

Base fee 72,750 74,900

SID fee 10,800 11,10 0

Committee Chair fee 16,250 16,750

Louise Hardy also receives a fee of £10,700 per annum in respect of her responsibility

as Workforce Engagement Lead.

All Independent Non-executive Directors may be paid a travel allowance for

intercontinental travel on Company business (excluding travel within home continent).

PROPOSED IMPLEMENTATION OF THE REMUNERATION POLICY IN 2026

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This part of the Remuneration report sets out how

the Remuneration Policy was implemented over

the year ended 31 December 2025. Details of

theremuneration earned by Directors and the

outcomes of incentive schemes, including details

of relevant links to Company performance, are

alsoprovided in this part.

The following sections have been audited by

KPMG:Remuneration received by Directors for the

year ended 31 December 2025 including related

notes (page 146); Outstanding share awards (page

152), PSP awards granted during the year (page

153); AIP awards for the year ended 31 December

2025 (page 147), AIP metrics and outcomes (page

147), PSP metrics and outcomes (page 151),

Buy-out awards granted to Philip Hoare, payments

to past Directors and payments for loss of office

(page 154); and statement of Directors’

shareholdings and share interests (page 154).

Remuneration received by Directors for

the year ended 31 December 2025

The table below sets out the Directors’ remuneration

for the year ended 31 December 2025 (or for

performance periods ended in that year in respect

oflong-term incentives) together with comparative

figures for the year ended 31December 2024.

Fixed pay Variable pay

Year

Base salary

and fees

Taxable

benefits

2,3

Pension cash

allowance

Sub-total

Annual

incentive cash

Annual incentive

deferred shares

Long-term

incentives

5,6

Other

Sub-total

Total

Executive Directors

Philip Hoare

2025 264,091 6,846 18,486 289,423 168,124 168,124 – 2,313,064 2,649,312 2,938,735

2024 – – – – – – – – – –

Philip Harrison 2025 591,429 11,982 41,400 644,811 375,395 375,395 1,458,678 – 2,209,467 2,854,278

2024 509,175 14,980 35,642 559,797 355,877 355,877 1,311,252 – 2,023,006 2,582,803

Leo Quinn

2025 616,900 14,689 4 3,183 674,772 765,265 – 2,875,691 – 3,640,956 4,315,728

2024 878,300 20,980 61,481 960,761 607,149 6 07,14 9 2,676,030 – 3,890,328 4,851,089

Non-executive Directors

Charles Allen 2025 329,450 6,510 – 335,960 – – – – – 335,960

2024 318,375 19,679 – 338,054 – – – – – 338,054

Gabrielle

Costigan

2025 90,325 3,530 – 93,855 – – – – – 93,855

2024 68,674 3,213 – 71,887 – – – – – 71,887

Anne Drinkwater 2025 101,275 36,375 – 137,6 50 – – – – – 137,650

2024 94,172 21,165 – 115, 3 37 – – – – – 115,3 37

Louise Hardy 2025 84,375 3,945 – 88,320 – – – – – 88,320

2024 81,550 4,118 – 85,688 – – – – – 85,688

Michael Lucki

2025 25,815 52 – 25,867 – – – – – 25,867

2024 71,350 21,720 – 93,070 – – – – – 93,070

Robert MacLeod 2025 90,325 6,530 – 96,855 – – – – – 96,855

2024 68,674 6,220 – 74,894 – – – – – 74,894

Barbara

Moorhouse

2025 73,825 4,160 – 77, 9 8 5 – – – – – 77,985

2024 71,350 7,358 – 78,708 – – – – – 78,708

Rudolph Wynter 2025 73,825 19,402 – 93,227 – – – – – 93,227

2024 6,063 – – 6,063 – – – – – 6,063

ANNUAL REPORT ON REMUNERATION

1 Base salary and fees were those paid in respect of the period of

the year during which the individuals were executive Directors.

2 Taxable benefits are calculated in terms of UK taxable values.

Philip Hoare received private medical insurance for himself and

his family and received a car allowance of £20,000 per annum,

pro-rated for time served in 2025. Leo Quinn received private

medical insurance for himself and his spouse and received a car

allowance of £20,000 per annum, pro-rated for time served as an

executive Director. Philip Harrison received private medical

insurance for himself and his spouse, a car allowance of £14,000

per annum (pro-rated for the period 1 January 2025 to

27February 2025) and a company car from 28 February 2025.

Charles Allen is eligible for a contribution to his reasonable

business expenses, receiving taxable travel expenses of£510

and a taxable travel allowance of £6,000.

3 The Non-executive Directors received taxable travel

expenses and/or travel allowances which are shown in the

taxable benefits column.

4 AIP 2025: further details of these awards are set out on page

147. For 2024, details of the AIP awards were set out in the

2024 Remuneration report.

5 For 2025, this relates to the 2023 PSP award for which the

performance period ends in 2025, with the valuation of

vesting shares calculated on a three-month average share

price to 31 December 2025 of 679.9p. This compares to the

374.3p average middle market price for the three dealing

dates before the PSP award date which was used for

calculating the number of shares granted, so there is a

benefit relating to share price appreciation since award of

305.6p per share and a value of £1,292,560 and £655,643 for

Leo Quinn and Phillip Harrison respectively. Further details of

the 2023 PSP awards are set out on page 151. For 2024, this

relates to the 2022 PSP award for which the performance

period ended in 2024, details of which were set out in the

2024 Remuneration report. For 2024, the valuation of the

vesting shares for the 2022 PSP has been adjusted from the

valuation included in the 2024 Remuneration report to reflect

the actual valuation on the 1 April 2025 vesting date, based

on a share price of 436.2p. This compares to 259.5p average

middle market price for the three dealing days before the PSP

award date (which was used to calculate the number of

shares granted), so there was a benefit relating to share price

appreciation since award of 177p per share and a value of

£1,084,032 and £531,174 for Leo Quinn and Philip Harrison

respectively. Under the rules of the PSP, participants may

receive an award of shares in lieu of the value of dividends

paid over the vesting period on vested shares. For the 2022

PSP award this was 60,967 shares for Leo Quinn and 29,872

shares for Philip Harrison with a valuation of £265,938 and

£130,302 respectively calculated on the share price on the 1

April 2025 of 436.2p.

6 Total figures and long-term incentive figures for 2024 have been

adjusted from the figures included in the 2024 Remuneration

report to reflect the actual valuation on 1 April 2025 vesting

date of shares vesting under the 2022 PSP.

7 Philip Hoare was appointed to the Board effective

8September 2025.

8 Leo Quinn stepped down from the Board effective

8September 2025. Fixed pay and annual incentive cash

hasbeen calculated pro-rata to show earnings for duties as

an executive Director. Long-term incentive is not pro-rated

and included in full.

9 Michael Lucki stepped down from the Board effective

8May2025.

10 For Philip Hoare this includes the value of buy-out awards

including estimated cash payment, restricted share awards

and the vesting of the first PSP award in respect of forfeited

remuneration from Philip Hoare’s previous employer (further

details are set out on page 153).

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PROFIT BEFORE TAX AND

NON-UNDERLYING ITEMS

GROUP TOTAL CASH FLOW

STRATEGIC BUSINESS AND

PERSONAL OBJECTIVES

Maximum

£305.0m

Maximum

£151.7m

AIP OUT-TURN

Threshold

£221.8m

Threshold

£33.4m

Target

£277. 3m

Target

£41.7m

Group total cash flow of £627.5 million is the movement

between opening and closing total net cash adjusted for the

£125 million share buyback.

A reconciliation of the Group’s performance measures to

its statutory results is provided in the Measuring our

financial performancesection.

Group Chief

Executive

Group Chief

Executive

Chief

Financial

Officer

Chief

Financial

Officer

£290.8m

actual

£627.5m

actual

74.4%

of max.

100 %

of max.

90%

of max.

84.7%

of max.

86%

of max.

83.7%

of max.

AIP awards for the year ended 31December 2025

For 2025, the AIP for the executive Directors was a maximum bonus of 150% of base salary based on

the achievement of three performance measures:

@ profit before tax (50%);

@ cash (25%); and

@ strategic business and personal objectives (25%).

The three elements are measured and calculated

independently of each other and 50% of the

bonus earned is deferred for three years in the

form of Balfour Beatty shares. For the profit

before tax element, 20% of the award would

vest for threshold performance, increasing to

50% vesting of that element at target

performance and then to 100% of that element

at maximum performance or above. For the

Group total cash flow element, 20% of that

element would vest for threshold performance,

increasing to 50% vesting of that element at

target performance and then to 100% of that

element at maximum performance or above.

AIP metrics and outcomes

Philip Hoare will be eligible to a bonus during his

active service in 2025, calculated as 8 September

to 31 December 2025. Leo Quinn will be eligible

to a bonus for his active service in 2025,

calculated as 1 January to 31 December 2025,

which will be paid wholly in cash.

Stretching financial targets were set at the start of

the year. In line with prior years, the cash flow

targets have incorporated additional stretch

following our review of historic targets and

out-performance. The formulaic assessment of

the AIP indicated 82.9% of maximum in respect

of the financial targets for the executive Directors.

Objectives set for the executive Directors

incorporated a number of consistent strategic

business objectives together with role-specific

personal objectives. Philip Hoare, Leo Quinn and

Philip Harrison performed strongly against these

objectives resulting in 100% of maximum for

Philip Hoare, 92% of maximum for Leo Quinn

and96% of maximum for Philip Harrison for

thiselement.

In line with good practice, the Remuneration

Committee reviewed the overall outcome for the

executive Directors. However, despite strong

safety leadership in developing our safety culture

and the maximum score recorded against the

safety objectives, reflecting the ongoing progress

made by the business against the leading and

lagging indicators, there was a tragic fatality in

2025. Reflecting on this the Committee, in

discussion with the executive Directors, decided

to apply downward discretion and reduce the

safety element of the strategic business and

personal objectives by half for the executive

Directors, reducing the overall scoring for strategic

business and personal objectives for Philip Hoare,

Leo Quinn and Philip Harrison to 90%, 82% and

86% respectively. Further detail is included in the

AIP metrics and outcomes section on pages 147

to 150.

Following the adjustment, 84.7% of maximum

isto be paid to Philip Hoare, 82.7% of maximum

isto be paid to Leo Quinn and 83.7% of maximum

is to be paid to Philip Harrison for the AIP. In line

with the Policy, 50% of the pay-out will be deferred

into shares for three years for Philip Hoare and

Philip Harrison. No deferral will be applied for

LeoQuinn.

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Strategic report Governance Financial statements Other information

AIP metrics and outcomes continued

Performance against the 2025 AIP strategic business and personal objectives as it relates to the executive Directors was:

Philip Hoare

Objective Weight Outcome and comments Achievement

Safety

Demonstrate strong safety leadership

contributing to a positive safety culture

andimproving performance in 2025

versus2024.

20%

Strong safety leadership and commitment to health, safety & wellbeing culture.

Introduction of high-potential incident reporting and analysis using the ‘Energy Wheel’ to assess the potential impact of incidents and near misses.

Focus on the continued drive to utilise technology to improve safety performance and culture.

Personal leadership, including 18 safety tours since joining, building strong momentum to improve key metrics, including:

@ Group LTIR decrease to 0.08 continuing trend of year-on-year improvement (from 0.09 in 2024 and 0.11 in 2023); and

@ observations increased by 65% to 780,000 (from 475,000 in prior year).

Tragically, there was a fatality in the US business in May. This led to significant learnings and improvements in pre-start briefings that will

support future safety activity.

60% of maximum

60%

Environment

Make progress against the Science Based

Targets initiative (SBTi) plan.

Support continued improvement in

reporting processes and quality against our

sustainability strategy.

20%

Strong leadership, vision and commitment.

Continued progress against SBTi plan targets:

@ decrease in Group absolute carbon emissions for 2025; and

@ 9.4% decrease in carbon emissions intensity, using market-based methodology.

Total energy use decreased by 1.6% versus 2024 with reduced consumption of high carbon fuels and increased renewable electricity

procurement in UK.

Very strong progress with over £1bn of social value achieved in 2025, surpassing the increased 2025 target of £700m.

Governance

Sustain and enhance the culture and approach

to risk management, from work winning to

commercial contracting and project delivery.

20%

Gained a deep understanding of key governance and risk processes, through:

@ personal involvement in the Group tender review process; and

@ reviewing delivery risks and opportunities for improvement.

People

Review and develop improved succession

plans for the key senior roles across

thebusiness.

Continue to develop and improve employee

engagement across the Group.

20%

Significant activity to develop a high performing executive leadership team, including accelerating succession planning actions across

executive team and key project roles.

Strong impact in supporting development of an engaged and inclusive Group workforce:

@ Group employee engagement index scores remained strong with Group EIS of 83% in 2025 (versus 84% 2024), 8percentage points

above industry average; and

@ visible leadership to embed the Right to Respect programme across the Group. In UK, the programme received a Highly Commended

Award at the Inspiring Women in Construction and Engineering Awards.

Continued momentum against key measures, promoting improved inclusion against targets:

@ UK female representation increased to 22.5% (from 21.0% in 2024)

@ UK minority ethnic increased to 14.1% (from 13.0% in 2024)

20% of maximum

20%

Quality

Develop business knowledge and constructive

relationships with key stakeholder groups.

20%

Developed deep knowledge of the business strategy, plans, customers and delivery activities.

Established strong relationships across the business, including all key stakeholders, key clients and investors.

20% of maximum

20%

Total 100% 100% of

maximum 100%

ANNUAL REPORT ON REMUNERATION CONTINUED

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Strategic report Governance Financial statements Other information

Leo Quinn

Objective Weight Outcome and comments Achievement

Safety

Continue to demonstrate strong safety

leadership contributing to a positive safety

culture and improving performance in 2025

versus 2024.

20%

Demonstrated strong safety leadership and performance. Further progression in safety performance in 2025, building on progress in prior

years across key Group metrics, including:

@ Group LTIR decreased to 0.08 continued trend of year-on-year improvement (from 0.09 in 2024 and 0.11 in 2023) whilst delivering a

record number of hours worked; and

@ observations increased by 65% to 780,000 (from 475,000 in prior year).

Tragically, there was a fatality in the US business in May. This led to significant learnings and improvements in pre-start briefings that will

support future safety activity.

56% of maximum

60%

Environment

Make progress against the Science Based

Targets initiative (SBTi) plan.

Support continued improvement in reporting

processes and quality against our

sustainability strategy.

20%

Continued progress, demonstrated by performance against SBTi plan targets:

@ decrease in Group absolute carbon emissions for 2025; and

@ 9.4% decrease in carbon emissions intensity, using market-based methodology.

Total energy use decreased by 1.6% versus 2024 alongside reduced consumption of high carbon fuels and a further increase in renewable

electricity procurement in UK.

Enhancement of reporting processes, including the introduction of business unit targets to support Nature Positive pledge.

Very strong progress with over £1bn of social value achieved in 2025, surpassing the increased 2025 target of £700m.

Governance

Progress key contract negotiations towards

successful conclusions.

20%

Strong contribution to key client relationships in line with our tender review and governance process, leading to successful outcomes to

work winning activity.

People

Review and develop improved succession

plans for the key senior roles across

thebusiness.

Continue to develop and improve employee

engagement across the Group.

20%

Group employee engagement index scores remained strong:

@ Group EIS of 83% in 2025 (versus 84% 2024) was 8 percentage points above industry average.

Supported key initiatives to enhance employee development and culture, including the introduction of a new Project Directors development

programme, embedment of the Right to Respect programme and achieving platinum membership of the 5% Club.

Steady progress against key measures, promoting improved inclusion against key targets:

@ UK female representation increased to 22.5% (from 21.0% in 2024)

@ UK minority ethnic increased to 14.1% (from 13.0% in 2024)

16% of maximum

20%

Quality

Support the effective transition to the new

Group Chief Executive.

20%

Supported the onboarding of new Group Chief Executive with activity including:

@ full briefing on Group operations and current priorities;

@ introduction and handover of key client relationships; and

@ facilitated introduction to internal and external stakeholders.

20% of maximum

20%

Total 100% 92% of maximum

100%

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Strategic report Governance Financial statements Other information

AIP metrics and outcomes continued

Philip Harrison

Objective Weight Outcome and comments Achievement

Safety

Continue to demonstrate strong safety

leadership contributing to a positive safety

culture and improving performance in 2025

versus 2024.

20%

Demonstrated strong safety leadership and performance across a range of activities which have improved health, safety, wellbeing culture

and performance.

Further progression in safety performance in 2025, building on progress in prior years across key Group metrics, including:

@ Group LTIR decreased to 0.08 continuing trend of year-on-year improvement (from 0.09 in 2024 and 0.11 in 2023) whilst delivering a

record number of hours worked; and

@ observations increased by 65% to 780,000 (from 475,000 in prior year).

@ 30% year-on-year improvement in UK service strikes.

Tragically, there was a fatality in the US business in May. This led to significant learnings and improvements in pre-start briefings that will

support future safety activity.

56% of maximum

60%

Environment

Make progress against the Science Based

Targets initiative (SBTi) plan.

Support continued improvement in reporting

processes and quality against our

sustainability strategy.

20%

Continued progress, against SBTi plan targets:

@ decrease in Group absolute carbon emissions; and

@ 9.4% decrease in carbon emissions intensity, using market-based methodology.

Total energy use decreased by 1.6% versus 2024 alongside reduced consumption of high carbon fuels and a further increase in renewable

electricity procurement in UK.

Enhancement of reporting processes, including the introduction of business unit targets to support Nature Positive pledge.

Very strong progress with over £1bn of social value achieved in 2025, surpassing the increased 2025 target of £700m.

Governance

Enhance internal controls framework and

implement specific improvements where

appropriate.

20%

Implemented first phase of Group material controls effectiveness processes as part of the internal controls framework, supporting

implementation of new corporate governance code requirements.

People

Effectively manage key succession plans

impacting the Finance function.

20%

Delivered changes to key senior roles within the Finance function including Group Treasury, Group Head of Tax and Group Audit and Risk

Director.

Group employee engagement index scores remained strong:

@ Group EIS of 83% in 2025 (versus 84% 2024) was 8 percentage points above industry average; and

@ engagement score of 84% across the UK Finance team remained high, above Group average.

20% of maximum

20%

Quality

Support the effective transition to the new

Group Chief Executive.

Continue to improve processes and systems

to maintain prompt payment performance.

20%

Supported the onboarding of new Group Chief Executive with activity including:

@ ensuring solid understanding of Group financial controls and governance processes; and

@ effective onboarding plan established to enable building of key relationships across internal and external stakeholders.

Maintained strong performance, with improvements and changes including:

@ process changes driving 74% improvement in right first-time processing, delivering consistent 97% prompt payment performance.

20% of maximum

20%

Total 100% 96 % of maximum

100%

ANNUAL REPORT ON REMUNERATION CONTINUED

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Strategic report Governance Financial statements Other information

TOTAL SHAREHOLDER RETURN OPERATING CASH FLOW (OCF)

EARNINGS PER SHARE

PSP OUT-TURN

Maximum

£396m

Threshold

£242m

Target

£346m

£656m

Maximum:

upper

quartile

Threshold:

median

actual

actual actual

Above upper

quartile

100%

of max.

100%

of max.

86.9%

of max.

95.6%

of max.

95.6%

of max.

Maximum

50.7p

Threshold

33.0p

47.6p

GROUP CHIEF

EXECUTIVE

CHIEF FINANCIAL

OFFICER

Vesting of PSP awards for the year

under review

The PSP awards granted on 3 April 2023 were

based on a performance period for the three years

ended 31 December 2025. The performance

conditions applying to one-third of each award

were comparative total shareholder return

measured versus the constituents of the FTSE

250 (excluding investment trusts), operating cash

flow and earnings per share. 25% of each of the

total shareholder return and earnings per share

parts of the award would vest for threshold

performance increasing to 100% of each part of

the award vesting for maximum performance or

above. For the operating cash flow part, 25% of

that part would vest for threshold performance,

increasing to 50% vesting of that part at target

performance and then to 100% of that part at

maximum performance or above.

In assessing the appropriateness of the formulaic

outcomes of the performance targets, the

Remuneration Committee considered the

underlying performance of the Group over the

three-year period, and, on balance, the Committee

considered the vesting outcome appropriately

reflected the Group’s underlying performance.

Details of the PSP awards vesting for the year

under review are as shown in the table.

Operation of Malus and Clawback

Consistent with UK Corporate Governance

requirements, the Committee assessed whether

any events necessitated the application of Malus

and Clawback provisions. We confirm that no

such provisions were invoked during 2025.

PSP metrics and outcomes

Metric

Performance

condition Measure

Threshold Target Maximum Actual Vesting %

Total shareholder

return

TSR against the FTSE 250

constituents (excluding

investment trusts)

TSR ranking

72 or above

–

36.5 or above 10 100%

Cash

Operating cash flow (OCF)

£242m

£346m

£396m £656m 100%

Earnings per share

Underlying basic

earningsper share from

continuing operations

33.0p

–

50.7p 47.6 p 86.9%

Total vesting

95.6%

Name of Director Type of award Vesting date

Number

of shares

at grant

Number

of shares

to vest

Number

of shares

to lapse

Value of

vesting

Philip Harrison 2023 conditional 3 April 2026 224,418 214,543 9,875 £1,458,678

Leo Quinn 2023 conditional 3 April 2026 442,425 422,958 19,467 £2,875,691

1 Valuation of vesting shares calculated on a three-month average share price to 31 December 2025 of 679.9p. This compares to the 374.3p average middle market price for the three dealing dates before the

PSP award date which was used for calculating the number of shares granted, so there is a benefit relating to share price appreciation of 305.6p per share since award.

1 Operating cash flow of £656 million is defined in the Measuring our financial performance section.

2 Underlying basic earnings per share.

A reconciliation of the Group’s performance measures to its statutory results is provided in the Measuring our financial performance section.

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Strategic report Governance Financial statements Other information

Outstanding share awards

Maximum number of shares subject to award

Name of Director Share award Date granted

1 January

2025

Awarded

during the

year

Vested

during the

year

Lapsed

during the

year

31 December

2025

Exercisable

and/or vesting from

Philip Harrison PSP

1,5,6

1 April 2022 3 0 2,119 – 300,608 1,511 – 1 April 2025

PSP

2,5,6

3 April 2023 224,418 – – – 224,418 3 April 2026

PSP

3,5,6

26 March 2024 2 31,111 – – – 231,111 26 March 2027

PSP

4,5,6,7

28 March 2025 – 261,821 – – 261,821 28 March 2028

DBP

8,10,11

31 March 2022 120,159 – 120,159 – – 31 March 2025

DBP

8,9,11,13

31 March 2023 99,268 2,249 – – 101,517 31 March 2026

DBP

8,9,11,13

28 March 2024 79,739 1,806 – – 81,545 28 March 2027

DBP

8,9,11,12,13

28 March 2025 – 79,671 – – 79,671 28 March 2028

Leo Quinn PSP

1,5,6

1 April 2022 616,570 – 613,487 3,083 – 1 April 2025

PSP

2,5,6

3 April 2023 442,425 – – – 442,425 3 April 2026

PSP

3,5,6,14

26 March 2024 455,608 – – – 455,608 26 March 2027

DBP

8,10,11

31 March 2022 214,571 – 214,571 – – 31 March 2025

DBP

8,9,11,13

31 March 2023 167,711 3,800 – – 171,511 31 March 2026

DBP

8,9,11,13

28 March 2024 135,801 3,077 – – 138,878 28 March 2027

DBP

8,9,11,12,13

28 March 2025 – 135,924 – – 135,924 28 March 2028

Philip Hoare Buy-out awards

8 September 2025 – 97,149 – – 97,149 3 April 2026

Buy-out awards

8 September 2025 – 166,189 – – 166,189 3 April 2026

Buy-out awards

8 September 2025 – 61,968 – – 61,968 26 March 2027

Buy-out awards

8 September 2025 – 105,998 – – 105,998 26 March 2027

PSP

4,5,6,7

8 September 2025 – 367,775 – – 367,775 28 March 2028

1 2022 PSP award: This award vested at 99.5% of maximum on 1 April 2025. Details of the Company’s performance against the performance conditions were set out in the 2024 Remuneration report. Philip Harrison and Leo Quinn also received 29,872 and 60,967 shares

respectively in lieu of the dividends which would have been payable on the shares which vested. The closing middle market price of ordinary shares on the vesting date was 436.2p.

2 2023 PSP award: Further details of this award are set out on page 151.

3 2024 PSP award: This award is subject to three performance targets over a three-year performance period commencing 1 January 2024. TSR part (33.3% weighting), measured against the companies of the FTSE 250 (excluding investment trusts), no vesting below median

ranking, 25% vesting of this part at median, rising to 100% vesting at upper quartile performance or better. No portion of the cash part (33.3%) will vest unless the 2026 year-end operating cash flow (OCF) is greater than £255 million. 25% to 50% will vest for OCF

between £255 million and £364 million, rising to full vesting for OCF of £414 million or more. For the EPS part (33.3%), no vesting unless 2026 EPS is 36.5p, 25% vesting of this part at 36.5p, rising to full vesting at 56.0p or more.

4 2025 PSP award: Details are set out on page 153.

5 The average middle market price of ordinary shares in the Company for the three dealing dates before the PSP award dates, which was used for calculating the number of shares granted was 259.5p for the 2022 award, 374.3p for the 2023 award,378.0p for the 2024 award

and 456.8p for the 2025 Award. The closing middle market price of ordinary shares on the date of the awards was 256.8p, 371.2p, 382.6p and 447.2p respectively.

6 All PSP awards are granted for nil consideration and are in respect of 50p ordinary shares in Balfour Beatty plc. It is the Company’s current intention that awards will be satisfied by shares purchased in the market.

7 A maximum of 4,594,453 conditional shares were awarded for all participants in the PSP in 2025, which are exercisable on 28 March 2028.

8 All DBP awards are granted for nil consideration and are in respect of 50p ordinary shares in Balfour Beatty plc. It is the Company’s current intention that awards will be satisfied by shares purchased in the market.

9 The DBP awards made on 31 March 2023, 28 March 2024 and 28 March 2025 will vest on 31 March 2026, 28 March 2027 and 28 March 2028 respectively, providing the participant is still employed by the Group at the vesting date (unless specified leaver conditions are

met, in which case early vesting may be permitted).

10 The DBP awards made on 31 March 2022 vested on 31 March 2025. The closing middle market price of ordinary shares in the Company on the vesting date was 434.0p.

11 The shares subject to the DBP awards made on 31 March 2022, 31 March 2023, 28 March 2024 and 28 March 2025 were purchased at average prices of 300.8p, 261.3p, 373.8p, 381.2p and 456.8p respectively.

12 On 28 March 2025, for all participants in the DBP, a maximum of 571,490 conditional shares were awarded which will normally be released on 28 March 2028.

13 On 2 July 2025 and 5 December 2025, a further 29,888 conditional shares and 10,226 conditional shares were granted in lieu of entitlements to the final 2024 and interim 2025 dividend respectively for all participants in the DBP. These shares were allocated at prices of

519.5p and 721.5p respectively.

14 The 2024 PSP for Leo Quinn will be pro-rated to reflect the time elapsed in the performance period upon cessation of employment. The remaining shares may also lapse if Leo Quinn takes up an executive role at another company.

15 Buy-out awards: Further details of these awards are set out on pages 153 and 154.

The closing market price of the Company’s ordinary shares on 31 December 2025 was 711.0p. During the year, the highest and lowest closing market prices were 721.5p and 390.4p respectively.

ANNUAL REPORT ON REMUNERATION CONTINUED

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Strategic report Governance Financial statements Other information

PSP awards granted during the year

The following PSP awards were granted to executive Directors:

Executive Type of award Date of grant

Basis of award

granted

Share price

applied at

date of grant

Number of shares over

which award

was granted

Face value

of award

% of face value that

would vest

at threshold

performance

Vesting determined

by performance

over three

years to Vesting date

Philip Hoare Conditional 8 September 2025 200% of salary of £840,000 456.8p 367,7 75 £1,680,000 25% 31 December 2027 28 March 2028

Philip Harrison Conditional 28 March 2025 200% of salary of £598,000 456.8p 261,821 £1,196,000 25% 31 December 2027 28 March 2028

1 The share price used to grant the 2025 PSP awards was the three-day average to 28 March 2025.

Awards will vest to executives after three years, subject to the achievement of three independently measured performance conditions as set out below:

Metric Performance condition Threshold Target Maximum

One-third relative TSR Relative TSR against the constituents of the FTSE 250 Index (excluding investment trusts);

straight-line vesting between points

Median

(25% vests)

– Upper quartile

(100% vests)

One-third cash Group’s Operating Cash Flow from continuing operations; straight-line vesting between points £186m

(25% vests)

£266m

(50% vests)

£316m

(100% vests)

One-third EPS Group’s EPS; straight-line vesting between points 36.8p

(25% vests)

– 56.5p

(100% vests)

For these PSP awards, a post-vesting holding period will apply requiring the shares (net of tax) to be retained for two years.

Buy-out awards granted to Philip Hoare

As disclosed last year, on appointment, Philip Hoare received awards to partially compensate for

remuneration he forfeited on leaving his previous employer. Following the principles set out in last

year’s Directors’ remuneration report, the following ‘buy-out’ awards have been granted to Philip Hoare

on 8 September 2025. No awards were made in respect of equity remuneration that would vest in 2025.

Cash bonus

An estimated cash payment of £497,003 will be made in respect of the cash bonus forfeited. The value

will be based on the actual out-turn of the annual bonus from his previous employer pro-rated to his

date of appointment with Balfour Beatty (capped at 75% of the pro-rated maximum bonus potential). The

estimated value has been included in the total single figure table and the cash payment will be made

on the later of 31 March 2026 and the first available payroll date after his former employer publishes its

2025 Annual Report.

Restricted share awards

Restricted share awards were made to compensate for 75% of the restricted stock units forfeited. The

following awards are subject to continued employment until the agreed vesting date (and included in

the single figure of remuneration):

Type of award Date of grant

Share price

applied at date

of grant

Number of

shares over

which award

was granted

Face value of

award Vesting date

Conditional 8 September 2025 462.5p 97,149 £449,282 3 April 2026

Conditional 8 September 2025 462.5p 61,968 £286,581 26 March 2027

1 The three-day average share price prior to the date of announcement of appointment (5 March 2025).

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Strategic report Governance Financial statements Other information

Buy-out awards granted to Philip Hoare continued

Performance share awards

The following PSP share awards were also made to partially compensate for performance stock units

forfeited. The awards were based on 75% of the on-target performance stock units forfeited:

Type of award Date of grant

Share price

applied at date

of grant

Number of

shares over

which award

was granted

Face value of

award Performance conditions Vesting date

Conditional 8 September

2025

601.2p 16 6,18 9 £999,073 As applied to Balfour

Beatty 2023 PSP awards

3 April

2026

Conditional 8 September

2025

601.2p 105,998 £ 637,225 As apply to Balfour

Beatty 2024 PSP awards

26 March

2027

1 The three-day average share price prior to the date of appointment (8 September 2025).

The performance conditions for the 2024 PSP awards are set out in last year’s Directors’ remuneration

report. The performance conditions for the 2023 PSP awards are set out on page 153, and 95.6% of this

award will vest. Therefore 158,876 shares will vest (and 7,313 shares will lapse) with a value of

£1,080,198 (calculated on a three-month average share price to 31 December 2025 of 679.9p and

included in the single figure of remuneration). This compares to the 601.2p average middle market price

for the three dealing dates before the PSP award date which was used for calculating the number of

shares granted, so there is a benefit relating to share price appreciation of 78.7p per share since award.

Payments to past Directors and payments for loss of office

The termination arrangements for Leo Quinn were set out in last year’s Directors’ remuneration report.

He received normal remuneration for duties as an executive Director to 8 September 2025 as detailed

in the ‘Remuneration received by Directors for the year ended 31 December 2025’ table on page 146.

From 9 September 2025 to 31 December 2025, he received a total of £650,338 in respect of base

salary, taxable benefits, pension cash allowances and annual bonus as an employee in accordance with

the termination arrangements. Leo Quinn did not receive a base salary increase in 2025 and was not

granted a 2025 PSP award. Reflecting his long service and contribution to the business he was also

treated as a good leaver for the purposes of outstanding DBP and PSP awards. The 2024 PSP for Leo

Quinn will be pro-rated to reflect the time elapsed in the performance period upon cessation of

employment. The remaining shares may also lapse if Leo Quinn takes up an executive role at another

company. He also received £26,000 in respect of legal fees incurred in connection with his departure.

There were no other payments to past directors or payments for loss of office.

Michael Lucki received £4,498 as payment for the balance of his notice period following stepping

down from the Board on 8 May 2025.

Details of the remuneration payments made or to be made to Philip Harrison are set out below. These

terms and his treatment as a ‘good leaver’ under the Company’s incentive plans were the subject of

careful consideration by the Remuneration Committee and are in line with the Company’s Directors’

Remuneration Policy, which was approved by shareholders at the 2023 Annual General Meeting on

12May 2023.

Salary and benefits: Philip Harrison will receive his salary and benefits during the remainder of his

employment in accordance with his contract and the Directors’ Remuneration Policy. Following

cessation of employment, Philip Harrison will be entitled to payments in lieu of notice comprising

salary, benefits, and pension to the end of the notice period (23 February 2027), to be paid in monthly

instalments in the normal way.

@ Annual Incentive Plan (AIP): Philip Harrison will be eligible for a pro-rated 2026 bonus for active service

in the year. This will be pro-rated for time and is subject to performance. The 2026 bonus is payable in

March 2027 and will be paid wholly in cash in line with the Directors’ Remuneration Policy.

@ Deferred Bonus Plan (DBP): Outstanding awards will vest on cessation of employment.

@ Performance Share Plan (PSP): Philip Harrison’s 2023 PSP award will vest on 31 March 2026 at

95.6% further to the performance assessment described earlier in this report. Philip Harrison’s 2024

and 2025 PSP awards (vesting March 2027 and 2028) will, subject to pro-rating for time and to the

satisfaction of the applicable performance targets, vest on their normal vesting dates. Vested shares

under PSP awards will be subject to the normal post-vesting holding period.

@ Philip Harrison will not be granted a 2026 PSP award.

@ Professional Costs: Philip Harrison will receive a contribution of up to £25,200 (excluding VAT)

towards legal fees incurred in connection with his departure.

There were no other payments to past Executive Directors or payments for loss of office made during 2025.

Statement of Directors’ shareholdings and share interests

The interests of the Directors and connected persons (including, amongst others, members of the

Director’s immediate family) in the share capital of Balfour Beatty plc and its subsidiary undertakings

during the year are set out below:

Directors

Beneficially owned at

1 January 2025

1,2

Beneficially owned at

31 December 2025

2,3,4

Outstanding

PSPawards

Outstanding

DBP awards

Philip Hoare – 39,459 799,079 –

Philip Harrison 429,252 6 67,812 717,350 262,733

Leo Quinn 3,381,580 3,870,035 898,033 443,732

Charles Allen 107,4 43 109,831

Gabrielle Costigan – –

Anne Drinkwater 4,500 4,500

Louise Hardy – –

Michael Lucki – –

Robert MacLeod 17,674 17,674

Barbara Moorhouse 4,000 4,000

Rudolph Wynter – –

1 Or date of appointment, if later.

2 Includes any shares held in the Company’s all-employee Share Incentive Plan.

3 Or date of stepping down from the Board, if earlier.

4 As at 10 March 2026, the latest practicable date prior to the date of this report, there had been no changes to the above. The

closing market price of the Company’s ordinary shares as at 31 December 2025, 711.0p, was used to calculate the value of shares

for the purposes of the executive Directors’ shareholding guidelines on page 155.

ANNUAL REPORT ON REMUNERATION CONTINUED

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Strategic report Governance Financial statements Other information

Executive Directors’ shareholding guidelines

Shareholding guidelines require the executive Directors to hold shares in the Company worth 200%

ofbase salary and must retain no fewer than 50% of the shares, net of taxes, vesting under their

outstanding DBP and PSP awards until the required shareholding is met. Philip Harrison has a

shareholding guideline to hold shares in the Company worth 150% of base salary.

In line with the Investment Association guidelines, the calculations shown in the chart include shares

beneficially owned at 31 December 2025 plus unvested shares, which are not subject to a further

performance condition (outstanding DBP awards), on a net of tax basis. Philip Harrison’s share

interests met the Company’s shareholding guidelines, and, as recently appointed, Philip Hoare’s

current share interests are less than the Company’s shareholding guidelines at 31 December 2025.

EXECUTIVE DIRECTORS’ SHAREHOLDING GUIDELINES

(% of base salary held)

Performance graph

As in previous reports, the Remuneration Committee has chosen to compare the TSR on the Company’s

ordinary shares against the FTSE 250 Index (excluding investment trusts) principally because this is a

broad index of which the Company is a constituent member. The values indicated in the graph show the

share price growth plus reinvested dividends from a £100 hypothetical holding of ordinary shares in

Balfour Beatty plc and in the index and have been calculated using 30-day average values.

TOTAL SHAREHOLDER RETURN (TSR)

Group Chief Executive’s remuneration table

The total remuneration figures for the Group Chief Executive during each of the last 10 financial years are shown in the table below. The total remuneration figure includes the AIP award based on that year’s

performance and the PSP award based on the three-year performance period ending in the relevant year. The AIP pay-out and PSP vesting level as a percentage of the maximum opportunity are also shown for

each of these years.

2016 2017 2018 2019 2020 2021 2022 2023 2024 Leo Quinn 2025 Philip Hoare 2025

Total remuneration

1,2,3

£1,445,250 £4,124,104 £2,982,121 £3,066,624 £2,254,806 £2,942,943 £4,404,747 £3,945,409 £2,582,803 £4,315,728 £2,938,735

AIP (%) 47.5% 97.0% 69.06% 96.25% 59.25% 85% 95% 77.8% 90.4% 82.7% 84.7%

PSP (%) 0% 88.6% 64.17% 60.92% 33.33% 60.3% 100% 100% 99.5% 95.6% –

1 Total remuneration for 2024 has been adjusted from the total figure included in the 2024 Remuneration report to reflect the actual valuation on the 1 April 2025 vesting date of shares vesting under the 2022 PSP.

2 The figures for 2017 and 2018 exclude the vesting of awards made under the recruitment terms for the Group Chief Executive. Full details of these were included in the 2018 Remuneration report.

3 The figure for 2025 for Leo Quinn includes base pay, taxable benefits, pension cash allowance and annual bonus for the time served as Group Chief Executive in 2025 with 2023 PSP added.

4 The figure for 2025 for Philip Hoare includes base pay, taxable benefits, pension cash allowance and annual bonus for the time served as Group Chief Executive in 2025, following his appointment on 8 September 2025, with buy-out arrangements added as detailed on

pages 153 and 154 .

33%

200%

960%

150%

Actual Actual

Group Chief Executive

Guideline Guideline

Chief Financial Officer

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Strategic report Governance Financial statements Other information

31/12/15

350

300

200

250

150

100

31/12/16 31/12/17 31/12/18 31/12/19 31/12/20 31/12/21 31/12/22 31/12/23 31/12/24 31/12/25

Balfour Beatty plc

FTSE 250 (excluding Investment Trusts)

Source: Datastream

Value (£) rebased

Percentage change in Directors’ remuneration compared with all UK employees

The table below shows the percentage change in the remuneration of the Directors undertaking the roles of Group Chief Executive and Chief Financial Officer and the Independent Non-executive Directors between

the financial years, compared with the percentage increase for the same years for all UK employees of the Group where UK employees have been selected as the most appropriate comparator. Charles Allen was not

a Director until 13 May 2021 and therefore his percentage change between 2021 and 2022 is shown in the table on an annualised basis. Louise Hardy was not a Director until 1 April 2022 and therefore the

percentage change between 2022 and 2023 is also shown on an annualised basis. Gabrielle Costigan and Robert MacLeod were not Directors until 9 May 2024 and Rudolph Wynter not until 1 December 2024

therefore changes between 2024 and 2025 are shown on an annualised basis.

Leo Quinn stepped down as Chief Executive on 8 September 2025 and therefore the percentage changes between 2024 and 2025 are shown on an annualised basis. Michael Lucki stepped down as a Director on

8May 2025 and therefore the percentage changes between 2024 and 2025 are also shown on an annualised basis.

Philip Hoare was appointed as Chief Executive on 8 September 2025 so there is no comparative change to disclose.

% change between 2024 and 2025 % change between 2023 and 2024

Base

salary Benefits

Annual

bonus

Total

remuneration

Base

salary Benefits

Annual

bonus

Total

remuneration

Philip Hoare, Group Chief Executive – – – – – – – –

Leo Quinn, Group Chief Executive 2% 2% (9)% 2% 4% 3% 21% 13%

Philip Harrison, Chief Financial Officer 16% 5% 5% 11% 4% 3% 21% 13%

Charles Allen, Non-executive Group Chair 3% (67)% – (1)% 4% 29% 5%

Gabrielle Costigan, Independent Non-executive Director 32% 10% – 31% – – – –

Anne Drinkwater, Senior Independent Non-executive Director 8% 72% – 19% 12% 64% 19%

Louise Hardy, Independent Non-executive Director 3% (4)% – 3% 4% (1%) 4%

Michael Lucki, Independent Non-executive Director 2% (99)% – (22)% 4% 12% 6%

Robert MacLeod, Independent Non-executive Director 32% 5% – 29% – – – –

Barbara Moorhouse, Independent Non-executive Director 3% (43)% – (1)% 4% 13% 5%

Rudolph Wynter, Independent Non-executive Director 1,118% – – 1,438% – – – –

All UK employees 2% 23% 17% 4% 13% 7% 37% 13%

ANNUAL REPORT ON REMUNERATION CONTINUED

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% change between 2022 and 2023 % change between 2021 and 2022

Base

salary Benefits

Annual

bonus

Total

remuneration

Base

salary Benefits

Annual

bonus

Total

remuneration

Philip Hoare, Group Chief Executive – – – – – – – –

Leo Quinn, Group Chief Executive 4% (57)% (15)% (17)% 2% 2% 16% 9%

Philip Harrison, Chief Financial Officer 6% (54)% (16)% (14)% 5% 4% 22% 14%

Charles Allen, Non-executive Group Chair 4% (38)% – 7% 31% 2,930% – 34%

Gabrielle Costigan, Independent Non-executive Director – – – – – – – –

Anne Drinkwater, Senior Independent Non-executive Director 3% 1% – 3% 3% 1,802% – 18%

Louise Hardy, Independent Non-executive Director 45% 239% – 49% – – – –

Michael Lucki, Independent Non-executive Director 4% 54% – 12% 3% – – 22%

Robert MacLeod, Independent Non-executive Director – – – – – – – –

Barbara Moorhouse, Independent Non-executive Director 4% 96% – 8% 3% 198% – 6%

Rudolph Wynter, Independent Non-executive Director – – – – – – – –

All UK employees 5% – (5)% 5% 7% 13% 11% 7%

% change between 2020 and 2021

Base

salary Benefits

Annual

bonus

Total

remuneration

Philip Hoare, Group Chief Executive – – – –

Leo Quinn, Group Chief Executive 3% 3% 43% 21%

Philip Harrison, Chief Financial Officer 11% 8% 57% 30%

Charles Allen, Non-executive Group Chair – – – –

Gabrielle Costigan, Independent Non-executive Director – – – –

Anne Drinkwater, SeniorIndependent Non-executive Director 5% -87% – -1%

Louise Hardy, Independent Non-executive Director – – – –

Michael Lucki, Independent Non-executive Director 7% -100% – -9%

Robert MacLeod, Independent Non-executive Director – – – –

Barbara Moorhouse, Independent Non-executive Director 7% -5% – 7%

Rudolph Wynter, Independent Non-executive Director – – – –

All UK employees -2% 5% 122% 0%

Note: Benefits for Non-executive Directors relate to taxable travel expenses and/or travel expenses which are shown in the taxable benefits column of the Remuneration received by Directors for the year ended 31 December 2025 table on page 146. The reported percentage increases in

benefits in 2022 from 2021 have been impacted significantly by COVID-19 restrictions on travel in 2021.

Note: In response to the COVID-19 pandemic, the executive Directors and Non-executive Directors took a voluntary 20% reduction in salary/fees in April and May 2020.

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Pay ratio of Group Chief Executive to average employee

The Regulations require certain companies to disclose the ratio of the Chief Executive’s pay, using the amount set out in the single total figure table, to that of the median, 25th and 75th percentile total

remuneration of full-time equivalent UK employees.

The table below shows the relevant data for Balfour Beatty’s UK employees for 2025, together with the 2019 to 2024 data, calculated using Option A as set out in the legislation.

Year Method of calculation adopted

25th percentile pay ratio

(Group Chief Executive: UK employees)

Median pay ratio

(Group Chief Executive: UK employees)

75th percentile pay ratio

(Group Chief Executive: UK employees)

2025 Option A 120:1 83:1 60:1

2024 Option A 125:1 87:1 62:1

2023 Option A 98:1 69:1 50:1

2022 Option A 115:1 81:1 59:1

2021 Option A 84:1 57:1 40:1

2020 Option A 64:1 45:1 32:1

2019 Option A 92:1 65:1 45:1

Pay details for the Group Chief Executive and individuals whose 2025 remuneration is at the median, 25th percentile and 75th percentile amongst UK-based employees are as follows:

Group Chief Executive 25th percentile Median 75th percentile

Salary £878,233

£33,000 £45,000 £62,768

Total pay and benefits £4,941,399

£41,063 £59,705 £82,833

1 Total base salary for Leo Quinn and Philip Hoare for time served as Group Chief Executive in 2025.

2 Total base salary, benefits and annual bonus for Philip Hoare and Leo Quinn for time served as Group Chief Executive in 2025 with 2023 PSP for Leo Quinn added.

The median, 25th percentile and 75th percentile figures used to determine the above ratios were calculated by reference to the full-time equivalent annualised remuneration (comprising salary, benefits, pension,

annual bonus and long-term incentives) of all UK-based employees of the Group as at 31 December 2025 (i.e. ‘Option A’ under the Regulations). The Committee selected this calculation methodology as it was

felt to produce the most statistically accurate result.

The Committee considers that the median pay ratio for 2025 that is disclosed in the above table is consistent with the pay, reward and progression policies for Balfour Beatty’s UK employees as a whole. It

reflects the fact that a greater proportion of executive Director pay is linked to annual performance through a higher annual incentive plan opportunity (a percentage of which is subject to deferral into shares) and

a long-term incentive plan. The pay ratios remain similar for 2025 when compared to 2024, calculated using pro-rata earnings for Leo Quinn and Philip Hoare for time served as Group Chief Executive in 2025.

Relative importance of spend on pay, dividends and underlying pre-tax profit

The following table shows the Company’s actual spend on pay for all Group employees relative to dividends and underlying pre-tax profit:

2024 2025 % change

Staff costs (£m)

1,398 1,427 2%

Dividends (£m) 61 64 5%

Underlying pre-tax profit (£m) 289 291 1%

1 Staff costs include base salary, benefits and bonuses for all Group employees (excluding joint ventures and associates).

ANNUAL REPORT ON REMUNERATION CONTINUED

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Directors’ pension allowances

No Directors were contributing members of the Balfour Beatty Pension Fund during 2025. The executive Directors were in receipt of a cash allowance in lieu of pension equivalent to 7% of base salary, in line

with the wider workforce, as disclosed in the Directors’ remuneration table on page 146.

External appointments of executive Directors

At the discretion of the Board, executive Directors are allowed to act as Non-executive Directors of other companies and retain any fees relating to those posts. Philip Harrison was Non-executive Director of

Dowlais Group plc, a role he stepped down from in February 2026.

Service contracts

Executive Directors’ contracts are on a rolling 12-month basis and are subject to 12 months’ notice when terminated by the Company and six months’ notice when terminated by the Director.

The current Non-executive Directors, including the Chair, do not have a service contract and their appointments, whilst for a term of three years, may be terminated with three months’ notice (six months’ notice

for the Group Chair) by either party. All Non-executive Directors have letters of appointment, and their appointment and subsequent reappointment is subject to annual approval by shareholders.

Name Commencement date Unexpired term remaining

Philip Hoare, Group Chief Executive 8 September 2025 Terminable on 12 months’ notice

Leo Quinn, Group Chief Executive 1 January 2015 Stepped down from Board effective 8 September 2025

Philip Harrison, Chief Financial Officer 1 June 2015 Terminable on 12 months’ notice

Charles Allen, Non-executive Group Chair 13 May 2021 Fixed term expiring on 12 May 2027 (subject to renewal) and terminable on six months’ notice

Gabrielle Costigan, Independent Non-executive Director 8 March 2024 Fixed term expiring on 7 March 2027 (subject to renewal) and terminable on three months’ notice

Anne Drinkwater, Senior Non-executive Independent Director 1 December 2018 Fixed term expiring on 30 November 2027 (subject to renewal) and terminable on three months’ notice

Louise Hardy, Independent Non-executive Director 1 April 2022 Fixed term expiring on 31 March 2028 (subject to renewal) and terminable on three months’ notice

Michael Lucki, Independent Non-executive Director 1 July 2017 Stepped down from Board on 8 May 2025

Robert MacLeod, Independent Non-executive Director 8 March 2024 Fixed term expiring on 7 March 2027 (subject to renewal) and terminable on three months’ notice

Barbara Moorhouse, Independent Non-executive Director 1 June 2017 Fixed term expiring on 31 May 2026 (subject to renewal) and terminable on three months’ notice

Rudolph Wynter, Independent Non-executive Director 1 December 2024 Fixed term expiring on 30 November 2027 (subject to renewal) and terminable on three months’ notice

The service contracts and letters of appointments are available for inspection at the Company’s registered office at 5 Churchill Place, Canary Wharf, London, E14 5HU.

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ANNUAL REPORT ON REMUNERATION CONTINUED

Consideration by the Directors of matters relating to Directors’ remuneration

The members of the Remuneration Committee are Independent Non-executive Directors, as defined

under the Corporate Governance Code. No member of the Committee has conflicts of interest arising

from cross-directorships and no member is involved in the day-to-day executive management of the

Group. During the year under review, the members of the Committee were as follows:

@ Anne Drinkwater (Committee Chair);

@ Michael Lucki (stepped down on 8 May 2025);

@ Barbara Moorhouse; and

@ Robert MacLeod.

The Committee also receives advice from several sources, namely:

@ the Group Chief Executive and the Group HR Director, who are invited to attend meetings of the

Committee but are not present when matters relating directly to their own remuneration are

discussed; and

@ Deloitte LLP.

At regular intervals the Committee reviews the appropriateness and independence of the advice

received from remuneration consultants. As the result of a competitive tender process in 2020,

Deloitte LLP was appointed as independent remuneration consultants to the Committee. Deloitte LLP

is a member of the Remuneration Consultants Group and, as such, voluntarily operates under its Code

of Conduct in relation to executive remuneration consulting in the UK.

During the year, the Committee’s remuneration consultants provided a range of advice to the

Committee, including:

@ analysis of market practice and corporate governance update;

@ provision of benchmark data for senior management and Non-executive Director remuneration;

@ assistance with reviewing the remuneration policy and recommendations for the new Remuneration Policy;

@ assistance with the consultation of shareholders in respect of the new Remuneration Policy;

@ assistance with the drafting of the Remuneration report; and

@ calculation of vesting levels under the TSR element of the PSP awards.

During 2025, Deloitte LLP received fees amounting to £101,565 excluding VAT (£65,000 excluding VAT

in 2024) in respect of advice given to the Committee. Deloitte also provided tax and legal services to

the Group related to the operation of the Group’s share plans. Other than as disclosed above, Deloitte

LLP has no connection with the Company or individual Directors. The Committee is satisfied the

advice provided by Deloitte LLP is independent.

Terms of reference

During the period, the Committee has agreed a number of changes to be made to its terms of

reference, as part of the annual review. Full terms of reference can be found in the Investors section of

the Company’s website at: www.balfourbeatty.com/investors/governance/board-committees/.

Statement of shareholder voting at the AGM

At the AGM on 8 May 2025, the resolution to approve the Annual report on remuneration received the

following votes from shareholders:

Total number of votes % of votes cast

For 274,128,865 70.25%

Against 116,112,78 8 29.75%

Total votes cast 390,241,653 100%

Abstentions 2,851,327

The resolution to approve the Remuneration policy was approved at the AGM on 12 May 2023 and

received the following votes from shareholders:

Total number of votes % of votes cast

For 364,512,799 81.11%

Against 84,890,014 18.89%

Total votes cast 449,402,813 100%

Abstentions 1,065,800

By order of the Board

Anne Drinkwater

Chair of the Remuneration Committee

10 March 2026

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Strategic report Governance Financial statements Other information

The Directors of Balfour Beatty plc present

theirreport, together with the audited financial

statements for the year ended 31 December 2025.

For the purpose of the Financial Reporting

Council’s Disclosure Guidance and Transparency

Rule (DTR) 4.1.8R, the Directors’ report is also

the Management report for the year ended

31December 2025.

As permitted by Section 414 C(11) of the

Companies Act 2006, some matters required to

be included in the Directors’ report have instead

been included in the Strategic report. These

disclosures are incorporated by reference in

theDirectors’ report. The Strategic report can

befound on pages 1 to 98.

Corporate governance

The Governance section on pages 99 to 160,

forms part of this Directors’ report.

The Company complied with all the provisions

ofthe UK Corporate Governance Code during

theyear ended 31 December 2025.

Directors and their interests

The Directors as at 31 December 2025 were

Charles Allen, Lord Allen of Kensington, CBE,

Philip Hoare, Philip Harrison, Anne Drinkwater,

Robert MacLeod, Gabby Costigan MBE, Rudy

Wynter, Barbara Moorhouse, andLouise Hardy.

Further details and individual biographies for each

of the Directors can be found onpages 102 and

103 and information relating to their connected

persons in the Company’s shares (as notifiable

tothe Company under Article 19 of the Market

Abuse Regulation) are set out on page 154.

Related party transactions are included in

Note40 to the accounts on page 239.

Listing Rule 6.6.6R(10)

Data on the diversity of the individuals on

theBoard and in executive management as at

31December 2025, as required by the Listing

Rules is set out on the right. The data is collated

by self-disclosure from the individuals concerned.

Further narrative surrounding Listing Rule

6.6.6R(10) and compliance with the targets set

out can be found in the Nomination Committee

report on pages 117 to 120.

Disclosure Guidance and

Transparency Rules (DTR) 7.2.8AR(1)

The Company is compliant with DTR 7.2.8AR(1).

Further information on Board Diversity and

Inclusion can be found in the Nomination

Committee report on page 117 to 120.

Directors’ indemnities and insurance

The Group maintains directors’ and officers’

liability insurance which provides appropriate

cover for legal action brought against its Directors.

Qualifying third-party indemnity provisions were

in force during 2025 and as at the date of this

report for the benefit of certain employees who

are directors of a subsidiary company.

Qualifying pension scheme indemnity provisions

(as defined by Section 235 of the Companies Act

2006) were in force during the year ended 31

December 2025 for the benefit of the trustee

directors of the Balfour Beatty Pension Fund.

Articles of Association

The Company has not adopted any special rules

regarding the appointment and replacement of

Directors or the amendment of the Articles of

Association, other than as provided for under

UKcompany law.

As at 31 December 2025

Number of Board

members

Percentage of the

Board

Number of senior

positions on the

Board (Chair, CEO,

CFO and SID)

Number in

executive

management

Percentage in

executive

management

Female 4 44.4% 1 2 20%

Male 5 55.6% 3 8 80%

Not specified/prefer

not to say – – – – –

Total 9 100.0% 4 10 100.0%

As at 31 December 2025

Number of Board

members

Percentage of the

Board

Number of senior

positions on the

Board (Chair, CEO,

CFO and SID)

Number in

executive

management

Percentage in

executive

management

White British or

other White

(including minority

White groups) 8 88.9% 4 10 100.0%

Mixed/multiple

ethnicity groups – – – – –

Asian/Asian British – – – – –

Black/African/

Caribbean/Black

British 1 11.1% – – –

Other ethnic group,

including Arab – – – – –

Not specified/prefer

not to say – – – – –

DIRECTORS’ REPORT

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Strategic report Governance Financial statements Other information

Share capital

Details of the share capital of the Company as at

31 December 2025, including the rights attaching

to the shares, are set out in Note 32 on page

230. No shares were issued during 2025.

The powers of the Directors to issue or buy back

the Company’s shares are determined by the

Companies Act 2006 and the Articles of

Association of the Company. The Directors are

authorised to issue and allot shares and to buy

back shares subject to annual shareholder

approval at the

AGM. Such authorities were granted

by shareholders

at the 2025 AGM and they will be

proposed at the 2026 AGM that the Directors be

granted new authorities to issue, allot and buy

back shares.

Under the authority provided at the 2024 AGM,

the Company commenced its 2025 share buyback

programme on 6 January 2025. Further authority

for share buybacks was approved at the 2025

AGM and the 2025 share buyback programme

was completed on 12 December 2025. Under

this programme, the Company purchased 24,175,236

ordinary shares of 50 pence each, for a total

consideration of £125,000,000 (exclusive of

expenses) and these shares were held in treasury

with no voting or dividend rights. On 24December

2025,

all

24,175,236

treasury shares were

cancelled, resulting in a balance of zero treasury

shares heldas at 31 December 2025. The

Company commenced the initial tranche of its

2026 share buyback programme on 5 January 2026.

As at 9 March 2026 (the latest practicable date

prior to the date of this document), the Company

had purchased 3,134,039 ordinary shares of

50pence each, for a total consideration of

£23,000,000 (exclusive of expenses) and these

shares are heldin treasury with no voting or

dividend rights.

Throughout 2025, the Company’s issued share

capital was publicly listed on the London Stock

Exchange and it remains so as at the date of this

report. There are no specific restrictions on the

size of a shareholding which is governed by the

Articles of Association and the prevailing law.

Other than in respect of shares that vest under

the Company’s share schemes and are subject to

a two-year holding period, there are no specific

restrictions on the transfer of shares which are

governed by both the Articles of Association

andthe prevailing law. The Directors are not

aware of any agreements between holders of the

Company’s shares that may result in restrictions

on the transfer of shares or on voting rights.

No person has special rights of control over the

Company’s share capital and all issued shares

arefully paid. Shares held by the Balfour Beatty

Employee Share Ownership Trust rank pari passu

with the ordinary shares in issue and have no

special rights. Voting rights and rights of acceptance

of any offer relating to the shares held in this

trust rest with the trustees, who may take account

of any recommendation from the Company.

Voting rights are not exercisable by the employees

on whose behalf the shares are held in trust.

Dividends are waived by the trustees in relation

to the shares held in trust. Details of shares held

by the Balfour Beatty Share Ownership Trust in

relation to the Company’s share schemes can be

found in Note 33.3 on page 234.

Major shareholders’ interests

Notifications provided to the Company by major

shareholders in accordance with the DTR are

published via a Regulatory Information Service

and on the Company’s website.

The Company has been notified of the following

interests in voting rights in its shares as at

31December 2025 and as at 9 March 2026 (the

latest practicable date prior to the date of this

document). Please note that percentages

provided areas at the date of notification.

Shareholder

Percentage of

voting rights (%)

as at

31 December 2025

Percentage of

voting rights (%)

as at

9 March 2026

JP Morgan

Asset

Management

Holdings Inc. 5.60 5.57

BlackRock, Inc 5.00 5.00

Dividends

An interim dividend of 4.2 pence (2024: 3.8 pence)

was paid on 5 December 2025. A final dividend

of 9.8 pence per share (2024: 8.7 pence) has

been recommended by the Board for shareholder

approval at the 2026 AGM, giving total dividends

per ordinary share of 14.0 pence for 2025

(2024:12.5 pence).

The Directors will continue to offer a Dividend

Reinvestment Plan, which allows holders of

ordinary shares to reinvest their cash dividends

inthe Company’s shares through a specially

arranged share dealing service.

Branches

As the Group is an international business,

thereare activities operated through branches

incertain jurisdictions.

Auditor

KPMG LLP has indicated its willingness to

continue as auditor to the Company and a

resolution for its reappointment will be

proposedat the 2026 AGM.

Company Secretary

Tracey Wood is Company Secretary at the

dateofthis report and was Company Secretary

throughout the year ended 31 December 2025.

Innovation, future development

andresearch and development

Information concerning innovation, future

development and research and development set

out in the Strategic Report form part of the

Directors’ report disclosures.

Sustainability

A full description of the Group’s approach

tosustainability, including information on

itscommunity engagement programme,

appearsonpages 42 and 53 to 54.

Policies

The Group’s Code of Ethics and other published

policies, including: Speak Up; health and safety;

conflicts of interest; sustainability; sustainable

procurement; social value; environment; supply

chain; media, PR and marketing; quality; and

information security, remain in place and can

beaccessed on the Company’s website,

www.balfourbeatty.com.

Engagement with supply chain

suppliers and customers

Details of the Company’s approach to stakeholder

engagement, including engagement with

customers and supply chain can befound

onpages 21 to 23 and 51 to 52.

Greenhouse gas emissions

Details of Balfour Beatty’s greenhouse gas

emissions and the actions which the Group is

taking to reduce them are set out on pages 44 to

and form part of the Directors’ report disclosures.

DIRECTORS’ REPORT CONTINUED

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Employment

The Balfour Beatty Group operates across a

number of geographies and end-markets. Balfour

Beatty provides a Human Resources framework

for promoting diversity, ethical behaviour and

learning and development as well as continuing

to fulfil its commitments in relation to regulation

and corporate governance.

The Group provides fair and flexible employment

policies and practices that respond to the different

needs of its people. Information concerning

employee diversity is set out on pages 55 and 60

and forms part of the Directors’ report disclosures.

Balfour Beatty strives to provide employment,

training and development opportunities for people

with disabilities wherever possible, does not

discriminate, and is committed to supporting

employees who become disabled during

employment, and helping employees with

disabilities make the best use of their skills, expertise

and potential, consistent with any other employee.

The Company operates an employee Share

Incentive Plan (SIP) which enables UK-based

employees to acquire the Company’s ordinary

shares on a potentially tax-favourable basis, in

order to encourage employee share ownership

and provide additional alignment between the

interests of employees and shareholders. Participants

in the SIP are the beneficial owners of shares but

not the registered owners, and the voting rights

to such shares are exercised by the trustee of

theSIP at the discretion of the participants.

Further information on how Directors have

engaged with employees and how they have

hadregard to employee interests can be found

on pages 108 to 109.

Employees

Details on the average number of employees

within the Group can be found in Note 7.1

onpage 200.

Diversity and inclusion

Details on the Board’s Diversity and Inclusion

Policy can be found in the Nomination

Committee report on pages 118 and 119.

Details of the Group’s approach to diversity and

inclusion can be found on pages 55 and 60.

Disclosures required under Listing

Rule 6.6.1

There are no disclosures required to be made

under Listing Rule 6.6.1. Details of long-term

incentive plans can be found in the Remuneration

report on pages 130 to 135.

Events after the reporting date

Myles Westcott will join the Board as Chief

Financial Officer in 2026. He will succeed Philip

Harrison who will step down from the Board after

more than 10 years in role.

Events after the reporting date are set out in

Note 39 on page 239.

Political donations

At the 2025 AGM, shareholders granted

authority, for the purposes of Part 14 of the

Companies Act 2006, for the Company and its

subsidiaries to make donations to political

organisations up to a maximum aggregate

amount of £25,000. This approval is a precautionary

measure in view of the broad definition of these

terms in the Companies Act. No such expenditure

or donations were made during 2025 and shareholder

authority will be sought again at the 2026 AGM.

In the US, corporate political contributions

totalling US$2,500 were made to a Political

Action Committee during 2025. These contributions

are not covered by Part 14 of the Companies Act

2006. Any such contributions or donations are

tightly controlled and must be approved in advance

in accordance with the Company’s internal

procedures and must also adhere strictly to the

Company’s Code of Ethics.

Capitalised interest

Details of the Group’s capitalised interest can be

found in Note 16 on page 205.

Financial instruments

The Group’s financial risk management

objectives and policies (including its hedging

policy) and its exposure to the following risks –

liquidity, foreign currency, interest rate, price and

credit – are detailed in Note 41 on pages 240 to 244.

Going concern and viability

The Group’s going concern statement is detailed

in Note 1 on page184.

The Group’s long-term viability statement is set

out on page 90.

Change of control provisions

The Group’s bank facility and surety agreements

contain provisions that, where the parties are

unable to agree the implications of any change of

control, on notice being given to the Group, the

lenders and sureties may exercise their discretion

to require prepayment of any loans or outstanding

bonds and cancel all commitments under the

agreement concerned.

The Group’s US private placement arrangements

require the Company, promptly upon becoming

aware that a change of control of the Company

has occurred (and in any event within 10 business

days), to give written notice of such fact to all

noteholders and make an offer to prepay the

entire unpaid principal amount of the notes,

together with accrued interest.

A number of joint venture, client contracts and

contract bond agreements include provisions

which become exercisable by a counterparty on

a change of control. These include the right of a

counterparty to request additional security and

toterminate an agreement.

Some other commercial agreements, entered

into in the normal course of business, include

change of control provisions. The Group’s share

and incentive plans include usual provisions

relating to change of control. There are no

agreements providing for compensation for the

Directors or employees on a change of control.

Annual General Meeting

All resolutions continue to be put to a poll rather

than a show of hands. Each substantially separate

issue is proposed via a separate resolution and

proxy forms provide for shareholders to vote for,

vote against or withhold their vote on each resolution.

All Board members typically attend the AGM

andare available to answer questions during

theformal part of the meeting as well as being

present for informal discussion over refreshments

after the AGM.

The 2026 AGM will be held at 5 Churchill Place,

Canary Wharf, London, E14 5HU, United Kingdom

on Thursday 7 May 2026 commencing at 09:30 am.

Statement of Directors as to

disclosure of information to the

Company’s auditor

We confirm that to the best of our knowledge:

@ each of the persons who are Directors at the

time when this Directors’ report is approved

confirms that, so far as they are aware, there

is no relevant audit information of which the

Company’s auditor is unaware and that they

have taken all the steps that they ought to have

taken as a Director to make themselves aware

of any relevant audit information and to establish

that the Company’s auditor is aware of

that information.

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Strategic report Governance Financial statements Other information

Statement of Directors’

responsibilities in respect of

theAnnual Report and the

financialstatements

The Directors are responsible for preparing

theAnnual Report and the Group and Parent

Company financial statements in accordance

with applicable law and regulations.

Company law requires the Directors to prepare

Group and Parent Company financial statements

for each financial year. Under that law they are

required to prepare the Group financial statements

in accordance with UK-adopted international

accounting standards and applicable law and

have elected to prepare the Parent Company

financial statements in accordance with UK

accounting standards and applicable law, including

FRS 101 Reduced Disclosure Framework.

Under company law the Directors must not

approve the financial statements unless they are

satisfied that they give a true and fair view of the

state of affairs of the Group and Parent Company

and of the Group’s profit or loss for that period. In

preparing each of the Group and Parent Company

financial statements, the Directors are required to:

@ select suitable accounting policies and then

apply them consistently;

@ make judgements and estimates that are

reasonable, relevant, reliable, and prudent;

@ for the Group financial statements, state whether

they have been prepared in accordance with

UK-adopted international accounting standards;

@ for the Parent Company financial statements,

state whether applicable UK accounting

standards have been followed, subject to any

material departures disclosed and explained in

the Parent Company financial statements;

@ assess the Group and Parent Company’s ability

to continue as a going concern, disclosing, as

applicable, matters related to going concern; and

@ use the going concern basis of accounting

unless they either intend to liquidate the Group

or the Parent Company or to cease operations,

or have no realistic alternative but to do so.

The Directors are responsible for keeping

adequate accounting records that are sufficient

to show and explain the Parent Company’s

transactions and disclose with reasonable

accuracy at any time the financial position of the

Parent Company and enable them to ensure that

its financial statements comply with the Companies

Act 2006. They are responsible for such internal

control as they determine is necessary to enable

the preparation of financial statements that are

free from material misstatement, whether due to

fraud or error, and have general responsibility for

taking such steps as are reasonably open to them

to safeguard the assets of the Group and to

prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors

are also responsible for preparing a Strategic

report, Directors’ report, Directors’ remuneration

report and Corporate governance statement that

complies with that law and those regulations.

The Directors are responsible for the maintenance

and integrity of the corporate and financial

information included on the Company’s website.

Legislation in the UK governing the preparation

and dissemination of financial statements may

differ from legislation in other jurisdictions.

In accordance with Disclosure Guidance and

Transparency Rule (“DTR”) 4.1.16R, the financial

statements will form part of the annual financial

report prepared under DTR 4.1.17R and 4.1.18R.

The auditor’s report on these financial

statements provides no assurance over whether

the annual financial report has been prepared in

accordance with those requirements.

Responsibility statement of the

Directors in respect of the Annual

Financial Report

We confirm that to the best of our knowledge:

@ the financial statements, prepared in accordance

with the applicable set of accounting standards,

give a true and fair view of the assets, liabilities,

financial position and profit or loss of the

Company and the undertakings included in

theconsolidation taken as a whole; and

@ the Strategic report includes a fair review

ofthe development and performance of the

business and the position of the Company and

the undertakings included in the consolidation

taken as a whole, together with a description

of the principal risks and uncertainties that

they face.

We consider the Annual Report and Accounts,

taken as a whole, is fair, balanced, and understandable

and provides the information necessary for

shareholders to assess the Group’s position

andperformance, business model and strategy.

This confirmation is given and should be interpreted

in accordance with the provisions of Section 418

of the Companies Act 2006.

By order of the Board

Tracey Wood

Group General Counsel and Company

Secretary

10 March 2026

Registered Office: 5 Churchill Place, Canary

Wharf, London E14 5HU Registered in England

and Wales, registered number 00395826

DIRECTORS’ REPORT CONTINUED

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BALFOUR BEATTY PLC

1 Our opinion is unmodified

We have audited the financial statements of Balfour Beatty plc (“the Company”) for the year ended

31December 2025 which comprise the Group Income Statement, Group Statement of Comprehensive

Income, Group Statement of Changes in Equity, Company Statement of Changes in Equity, Group and

Company Balance Sheets, Group Statement of Cash Flows, and the related notes, including the

accounting policies in note 2. The commentary provided by the Directors on pages 175, 177, 178, 181

and 183 does not form part of the financial statements.

In our opinion:

@ the financial statements give a true and fair view of the state of the Group’s and of the parent

Company’s affairs as at 31 December 2025 and of the Group’s profit for the year then ended;

@ the Group financial statements have been properly prepared in accordance with UK-adopted

international accounting standards;

@ the parent Company financial statements have been properly prepared in accordance with UK

accounting standards, including FRS 101 Reduced Disclosure Framework; and

@ the financial statements have been prepared in accordance with the requirements of the Companies

Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and

applicable law. Our responsibilities are described below. We believe that the audit evidence we have

obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our

report to the Audit and Risk Committee.

We were first appointed as auditor by the Company’s shareholders on 19 May 2016. The period of total

uninterrupted engagement is for the ten financial years ended 31 December 2025. We have fulfilled

our ethical responsibilities under, and we remain independent of the Group in accordance with, UK

ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No

non-audit services prohibited by that standard were provided.

2 Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in

the audit of the financial statements and include the most significant assessed risks of material

misstatement (whether or not due to fraud) identified by us, including those which had the greatest

effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of

the engagement team. We summarise below the key audit matters, in decreasing order of audit

significance, in arriving at our audit opinion above, together with our key audit procedures to address

those matters and, as required for public interest entities, our results from those procedures. These

matters were addressed, and our results are based on procedures undertaken, in the context of, and

solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion

thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on

these matters.

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2 Key audit matters: our assessment of risks of material misstatement continued

The risk Our response

Contract accounting: Construction Services – revenue £7,589m (2024: £6,630m), contract assets £134m (2024: £116m), contract liabilities (current) £742m (2024: £506m), and loss provisions included within

contract provisions (current) £228m (2024: £213m). Power is included in Support Services – revenue £1,427m (2024: £1,210m), contract assets £67m (2024: £70m), contract liabilities (current) £319m (2024:

£188m), and loss provisions included within contract provisions (current) £19m (2024: £6m).

Risk vs 2024:

Refer to page 124 (Audit and Risk Committee report), note 2.4 (Principal accounting policies – Revenue recognition), note 2.28(a) (Judgements and key sources of estimation uncertainty – Revenue and margin recognition)

Subjective estimates

The recognition of revenue and margin within the Construction Services

segment and Power Services segment relies on estimates in relation to the

forecast total costs of each contract. Cost contingencies may be included

in these estimates to take account of specific uncertain risks or disputed

claims against the Group arising within each contract.

Where a contract has become, or is expected to be, loss-making, a

provision is recognised using these estimates. The Group will also make

estimates in recognising provisions associated with defects arising on

certain completed contracts.

Further estimation uncertainty exists in relation to assessing the amount of

variable consideration that should be included on a contract-by-contract basis

for variations and claims. The Group has to estimate the amount they expect

to receive and assess whether it is highly probable such that a significant

reversal in the amount of cumulative revenue recognised will not occur.

Professional standards require us to make a rebuttable presumption that

the fraud risk associated with revenue recognition is a significant risk. The

potential incentives and pressures to achieve bonus targets and meet profit

targets could increase the risk of fraudulent revenue recognition in relation

to the Construction Services segment revenue, as well as the risk of fraudulent

margin recognition in relation to contract loss provisions in the segment.

The effect of these matters is that, as part of our risk assessment, we

determined that contract revenue within the Construction Services

segment and the related contract balances have a high degree of

estimation uncertainty, with a potential range of reasonable outcomes

greater than our materiality for the Group financial statements as a whole,

and possibly many times that amount. Therefore, auditor judgement is

required to assess whether the Directors’ estimates for total forecast costs

and variable consideration, and therefore the amount of revenue, margin

and related contract balances recognised, fall within acceptable ranges.

The financial statements (note 2.28(a)) disclose the nature and the extent

of the estimation uncertainty estimated by the Group.

We performed the tests below rather than seeking to rely on the Group’s controls because the nature of the balances is such that

we would expect to obtain audit evidence primarily through the detailed procedures described.

Using a variety of quantitative and qualitative criteria we selected a sample of contracts to assess and challenge the most

significant and complex contract estimates.

We obtained the project review papers prepared by the Group which explained the estimates made and enquired with operational,

legal, commercial and financial management.

Our procedures on the contracts selected included:

@ Historical comparisons: assessing the Group’s ability to accurately forecast end of life contract margins by comparing the total

forecast costs and variable consideration previously recognised to final outcomes;

@ Customer and sub-contractor correspondence scrutiny: analysing correspondence with customers and sub-contractors

around variations and claims to challenge the estimates of variations, claims, forecast costs and defects made by the Group;

@ Legal correspondence scrutiny: where relevant, analysing correspondence with lawyers and other legal advice obtained by

the Group relating to variations, claims and defects;

@ Test of detail: in respect of fixed price contracts, analysing the end of life contract margins forecasts and challenging the total

cost estimates within the forecasts by considering the amounts already procured, the amounts still to be procured, the site and

time related cost forecasts against programme and run rates, and any contingency held;

@ Test of detail: inspecting contracts for key clauses; identifying relevant contractual mechanisms such as pain/gain shares,

disallowed costs, liquidated damages, inflation related clauses and success fees, and assessing whether these key clauses have

been appropriately reflected in the amounts recognised in the financial statements;

@ Site visits: for certain higher risk or larger value contracts, and a haphazard selection of other contracts, attending in person site

visits or holding video conference calls where we inspected the physical progress of the project and discussed the project with

site personnel. Our own construction industry specialists attended a selection of these site visits;

@ Use of our own specialists: utilising our own industry specialists for certain contracts where specific risk factors were

identified to assist with identifying the risks and opportunities associated with the contract and assist in developing a range of

possible outcomes for specific assumptions. This assisted us in challenging the appropriateness of revenue recognised and,

where applicable, provisions held in relation to these contracts; and

@ Assessing transparency: considering the adequacy of the Group’s disclosures around the degree of estimation uncertainty

involved in recognising revenue and related contract balances in the Construction Services segment.

Our results:

We consider the amount of revenue and the related contract assets, contract liabilities and loss provisions recognised within the

Construction Services segment to be acceptable (2024: acceptable).

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BALFOUR BEATTY PLC CONTINUED

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The risk Our response

Recoverability of the parent Company’s investment in subsidiaries Investment in subsidiaries £1,766m (2024: £1,753m)

Risk vs 2024:

Refer to note 21.2 (Investments)

Low risk, high value

The carrying amount of the parent Company’s investment in subsidiaries

represents 64% of the parent Company’s total assets. Their recoverability

is not at a high risk of significant misstatement or subject to significant

judgement. However, due to their materiality in the context of the parent

Company financial statements, this is considered to be the area that had

the greatest effect on our overall parent Company audit.

In particular, we have spent more time on the recoverability of the

investment in Balfour Beatty Investment Holdings Limited (“BBIHL”) as a

value in use model has been used to support the investment’s carrying

amount.

We performed the tests below rather than seeking to rely on any of the Company’s controls because the nature of the balance is

such that we would expect to obtain audit evidence primarily through the detailed procedures described.

Our procedures included:

@ Tests of detail: comparing the carrying amount of 100% of investments (2024: 100%) with the relevant subsidiaries’ draft

balance sheets to identify whether their net assets, being an approximation of their minimum recoverable amount, were in

excess of their carrying amount.

@ Assessing subsidiary audits: Assessed the work performed by the subsidiary audit teams on the subsidiaries and considering

the results of that work, on those subsidiaries’ profits and net assets.

The below procedures were performed over the investment in BBIHL only.

@ Our knowledge of the entity and environment: critically assessing the profit from operations and long term growth rate

assumptions underlying the cash flow forecast with reference to historical forecasting accuracy, and our knowledge of the entity

and the sector in which it operates.

@ Benchmarking assumptions: challenging the assumptions used by the Company in the calculation of BBIHL’s discount rates

and the long-term growth rates by comparisons with external data sources;

@ Sensitivity analysis: performing our own sensitivity analysis over BBIHL’s value in use, including a reasonably possible

reduction in assumed long term growth rates and profit from operations and consideration of the possible impacts of current

economic uncertainty, to identify the most sensitive disclosures.

Our results:

We found the Company’s conclusion that there is no impairment of its investment in subsidiaries to be acceptable (2024: acceptable).

We continue to perform procedures over certain legacy contract related provisions. However, due to the settlement of the damages claim relating to the SH161 project in Texas in the year and corresponding

release of the provision, as well as there being no significant changes in the methodology used in estimating the Building Safety Act provision, we have not assessed this as a key audit matter in the current year

audit and, therefore, it is not separately identified in our report.

2 Key audit matters: our assessment of risks of material misstatement continued

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3 Our application of materiality and an overview of the scope of our audit

Our application of materiality

Materiality for the Group financial statements as a whole was set at £25.4 million (2024: £23.0 million),

determined with reference to a benchmark of Group revenue, of which it represents 0.29% (2024: 0.28%).

We consider total revenue to be the most appropriate benchmark due to the focus on revenue by

investors and the differing nature of the investments business (an asset-based business) compared to

the contracting businesses (profit orientated entities). Whilst the contracting businesses are focused

on profit measures, there has been significant volatility in recent years which has impacted the Group’s

profit before tax without any reduction in the scale of the contracting businesses. In setting our

materiality, we have also given consideration to the Group’s profit before tax normalised for a range of

factors including contract write-downs.

Materiality for the parent Company financial statements as a whole was set at £20.3m (2024: £19.0m),

determined with reference to a benchmark of Company total assets of which it represents 0.79%

(2024: 0.74%).

In line with our audit methodology, our procedures on individual account balances and disclosures

were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level

the risk that individually immaterial misstatements in individual account balances add up to a material

amount across the financial statements as a whole.

Performance materiality for the Group and parent Company was set at 75% (2024: 75%) of materiality

for the financial statements as a whole, which equates to £19.0m (2024: £17.2m) for the Group and

£15.2m (2024: £14.2m) for the parent Company. We applied this percentage in our determination of

performance materiality because we did not identify any factors indicating an elevated level of risk.

We agreed to report to the Audit and Risk Committee any corrected or uncorrected identified

misstatements exceeding £1.3m (2024: £1.2m), in addition to other identified misstatements that

warranted reporting on qualitative grounds.

Overview of the scope of our audit

We performed risk assessment procedures to determine which of the Group’s components are likely

to include risks of material misstatement to the Group financial statements and which procedures to

perform at these components to address those risks.

In total, we identified 23 (2024: 23) components, having considered our evaluation of the following

factors and our ability to perform audit procedures centrally:

@ the Group’s operational structure;

@ the Group’s legal structure;

@ the existence of common information systems;

@ the existence of common risk profile across entities/business units/functions/business activities;

@ geographical locations; and

@ the presence of key audit matters.

Of those, we identified three (2024: three) quantitatively significant components which contained

thelargest percentages of either total revenue or total assets of the Group, for which we performed

auditprocedures.

We also identified three (2024: two) components as requiring special audit consideration, owing to

risks relating to Contract Accounting.

Additionally, having considered qualitative and quantitative factors, we selected six (2024: six) components

with accounts contributing to the specific Risk of Material Misstatements of the Group financial statements.

Accordingly, we performed audit procedures on 12 (2024: 11) components, of which we involved

component auditors in performing the audit work on 5 (2024: 5) components. We also performed the

audit of the parent Company.

The Group also operates a shared service centre that is relevant to our audit in the UK. This service

centre performs accounting and reporting activities alongside related controls. This service centre

processes a substantial portion of the Group’s transactions over purchases and payroll, the outputs of

which relate to financial information of the reporting components it services and therefore it is not a

separate reporting component. This service centre is subject to specified risk-focused audit

procedures, predominantly the testing of transaction processing and review controls. We also

performed audit procedures over the significant accounts of the entities or business units that use the

service centre.

We set the component materialities, ranging from £4.0m to £16.0m (2024: £4.0m to £15.0m), having

regard to the mix of size and risk profile of the Group across the components.

GROUP REVENUE GROUP TOTAL ASSETS GROUP PROFIT BEFORE TAX

98% 91% 78%

(2024: 98%) (2024: 96%) (2024: 83%)

Our audit procedures covered 98% (2024: 98%) of Group revenue.

We performed audit procedures in relation to components that accounted for 78% (2024: 83%)

ofGroup profit before tax and 91% (2024: 96%) of Group total assets.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BALFOUR BEATTY PLC CONTINUED

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3 Our application of materiality and an overview of the scope of our audit

continued

Group auditor oversight

As part of establishing the overall Group audit strategy and plan, we conducted the risk assessment

and planning discussion meetings with component auditors to discuss Group audit risks relevant to the

components, including the key audit matter in respect of Contract Accounting.

The Group auditor instructed component auditors as to the significant areas to be covered, including

the relevant risks and the information to be reported back.

We visited all component auditors in the UK, USA & Hong Kong to assess the audit risks and strategy.

Video and telephone conference meetings were also held with these component auditors throughout

the audit. At these visits and meetings, the results of the planning procedures and further audit

procedures communicated to us were discussed in more detail, and any further work required by us

was then performed by the component auditors.

We inspected the work performed by the component auditors for the purpose of the Group audit and

evaluated the appropriateness of conclusions drawn from the audit evidence obtained and consistencies

between communicated findings and work performed, with a particular focus on work related to

Contract Accounting and the risk of management override of controls.

Impact of controls on our group audit

The Group utilises a diverse range of IT systems across its operating businesses. For all of the

components where audit procedures are performed, we obtained an understanding of the relevant

ITsystems for the purposes of our audit work. Given the diverse nature of the Group’s information

systems and general IT controls, as well as having considered the efficiency and effectiveness of

approaches to gaining the appropriate audit evidence, we did not plan to rely on the Group’s general

ITcontrols in our audit.

We tested operating effectiveness and placed reliance on manual controls in some transactional areas

of the audit, but not in respect of the key audit matters. These transactional areas included treasury,

payroll, revenue billing, and purchases. This led to a reduction in sample sizes for substantive testing in

these areas.

We assessed the design of controls in the significant risk areas relevant to our audit, although we did

not seek to rely on controls in these areas as the nature of the related balances is such that we would

expect to obtain audit evidence primarily through substantive procedures. Accordingly, our audit of the

significant risks was fully substantive.

4 The impact of climate change on our audit

In planning our audit, we considered the potential impacts of climate change on the Group’s business

and its financial statements.

The Group has set out in its Strategic Report its ambition to reduce Scope 1 and 2 carbon emissions by

42% by 2030 and other climate related targets, as well as the potential climate risks to the Group.

As stated in note 1 to the financial statements, whilst the Group has set these targets and considered

the climate risks identified in the TCFD disclosure, the directors do not believe that there is a material

impact on the financial reporting judgements and estimates from these matters as of 31 December 2025.

As a part of our audit, we have performed a risk assessment, including enquiries of management, to

understand how the impact of commitments made by the Group in respect of climate change, as well

as the physical or transition risks of climate change, may affect the financial statements and our audit.

We also held discussions with our own climate change professionals to challenge our risk assessment.

There was no impact of this on our key audit matters.

We did not identify any significant risk in the current period of climate change having a material impact

on the Group’s significant accounting estimates. For contract accounting, as well as contract

provisions, this is due to a range of factors including the shorter-term nature of this estimate (the

majority of contracts will substantially complete within two years of the Balance Sheet date) and

contract mechanisms in place which limit risk (e.g. either where risk remains with the customer or is

passed to the supply chain). For other estimates, this is due to a range of factors including the use of

market-based estimates, and the nature of the estimate (retirement benefit obligations, retirement

benefit assets, financial assets measured through OCI, employee and other provisions).

We have read the disclosure of climate-related information in the front half of the annual report and

considered consistency with the financial statements and our audit knowledge.

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5 Going concern

The directors have prepared the financial statements on the going concern basis as they do not intend

to liquidate the Group or the Company or to cease their operations, and as they have concluded that

the Group’s and the Company’s financial position means that this is realistic. They have also concluded

that there are no material uncertainties that could have cast significant doubt over their ability to

continue as a going concern for at least a year from the date of approval of the financial statements

(“the going concern period”).

We used our knowledge of the Group, its industry, and the general economic environment to identify

the inherent risks to its business model and analysed how those risks might affect the Group’s and

Company’s financial resources or ability to continue operations over the going concern period. The

risks that we considered most likely to adversely affect the Group’s and Company’s available financial

resources and metrics relevant to debt covenants over this period were; a deterioration in contract

profitability due to economic conditions, unforeseen operational challenges or commercial disputes,

ora combination of these, leading to a sustained medium-term decline in profits, delays to planned

disposals of PPP financial assets and delays to the start date of contracts leading to a reduction

inrevenue.

We also considered less predictable but realistic second order impacts, such as a unique one-off event

including the financial consequences of a major health and safety breach.

We considered whether these risks could plausibly affect the liquidity or covenant compliance in the

going concern period by assessing the directors’ sensitivities over the level of available financial

resources and covenant thresholds indicated by the Group’s financial forecasts taking account of

severe but plausible adverse effects that could arise from these risks individually and collectively.

Our procedures also included:

@ critically assessing assumptions in the base case and downside scenarios, particularly in relation to

contract profitability and its impact on forecast liquidity and covenant compliance, by comparing to

historical trends, overlaying knowledge of the entity’s plans based on approved budgets, as well as

our knowledge of the Group and the sector in which it operates;

@ comparing past budgets to actual results to assess the directors’ track record of budgeting accurately;

@ inspecting the confirmation from the lender of the level of committed financing, and the associated

covenant requirements; and

@ considering whether the going concern disclosure in note 1 to the financial statements gives a full

and accurate description of the directors’ assessment of going concern, including the identified

risks, and related sensitivities.

Our conclusions based on this work:

@ we consider that the directors’ use of the going concern basis of accounting in the preparation of the

financial statements is appropriate;

@ we have not identified, and concur with the directors’ assessment that there is not, a material

uncertainty related to events or conditions that, individually or collectively, may cast significant doubt

on the Group’s or Company’s ability to continue as a going concern for the going concern period;

@ we have nothing material to add or draw attention to in relation to the directors’ statement in note 1

to the financial statements on the use of the going concern basis of accounting with no material

uncertainties that may cast significant doubt over the Group and Company’s use of that basis for the

going concern period, and we found the going concern disclosure in note 1 to be acceptable; and

@ the related statement under the UK Listing Rules set out on page 71 is materially consistent with the

financial statements and our audit knowledge.

However, as we cannot predict all future events or conditions and as subsequent events may result in

outcomes that are inconsistent with judgements that were reasonable at the time they were made, the

above conclusions are not a guarantee that the Group or the Company will continue in operation.

6 Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or

conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to

commit fraud. Our risk assessment procedures included:

@ enquiring of directors, the Audit and Risk Committee, internal audit and compliance officers and

inspection of policy documentation as to the Group’s high-level policies and procedures to prevent

and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”,

as well as whether they have knowledge of any actual, suspected or alleged fraud.

@ reading Board and all relevant Committee minutes.

@ considering remuneration incentive schemes (primarily the annual incentive plan) and performance

targets for management and directors, including underlying profit from operations targets for

management remuneration.

@ using analytical procedures to identify any unusual or unexpected relationships; and

@ using our own forensic specialists to assist us in identifying fraud risks based on discussions of the

circumstances of the Group and the Company.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BALFOUR BEATTY PLC CONTINUED

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6 Fraud and breaches of laws and regulations – ability to detect continued

Identifying and responding to risks of material misstatement due to fraud continued

We communicated identified fraud risk factors throughout the audit team and remained alert to any

indications of fraud throughout the audit. This included communication from the Group audit team to

component audit teams of relevant fraud risks identified at the Group level and requests to all

component audit teams performing procedures at the component level to report to the Group auditor

any identified fraud risk factors or identified or suspected instances of fraud that could give rise to a

material misstatement to the Group.

As required by auditing standards, and taking into account possible pressures to achieve bonus targets

and meet profit targets and our overall knowledge of the control environment, we performed

procedures to address the risk of management override of controls and the risk of fraudulent revenue

recognition, in particular:

@ the risk that Group and component management may be in a position to make inappropriate

accounting entries; and

@ the risk of bias in accounting estimates such as the forecast costs and the recognition of variable

consideration in relation to the Construction Services segment revenue and the Power business

included in the Support Services segment.

Further detail in respect of revenue recognition in the Construction Services segment and Power

Services segment, including the estimation of forecast costs and variable consideration, is set out in

the Contract Accounting key audit matter disclosure in section 2 of this report.

However, on this audit we do not believe there is a fraud risk related to revenue recognition in the Rail

business section of the Support Services segment due to the size of its revenue and the nature of

contracts operated in this segment. We also do not believe there is a fraud risk related to revenue

recognition in the Infrastructure Investments segment based on the contractual nature of the

segment’s revenue with no significant judgement or estimation required in recognising revenue.

We also identified a fraud risk relating to the estimate of provisions recognised in relation to claims

made under the Building Safety Act in response to possible pressures to achieve bonus targets and

meet profit targets.

We performed procedures including:

@ identifying journal entries and other adjustments to test for all quantitatively significant components

and components requiring special audit consideration, based on specific risk-based criteria and

comparing the identified entries to supporting documentation. These included those posted with

unusual account pairings; and

@ assessing whether the judgements made in making accounting estimates are indicative of a

potential bias including assessing the provision relating to claims made under the Building Safety Act

for bias.

Identifying and responding to risks of material misstatement due to non-compliance with laws

and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect

on the financial statements from our general commercial and sector experience, through discussion

with the directors and other management (as required by auditing standards), and from inspection of

the Group’s regulatory and legal correspondence and discussed with the directors and other

management the policies and procedures regarding compliance with laws and regulations.

As the Group is regulated, our assessment of risks involved gaining an understanding of the control

environment including the entity’s procedures for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team and remained alert to any

indications of non-compliance throughout the audit. This included communication from the Group audit

team to component audit teams of relevant laws and regulations identified at the Group level, and a

request for component auditor teams to report to the Group audit team any instances of non-compliance

with laws and regulations that could give rise to a material misstatement at the Group level.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Group is subject to laws and regulations that directly affect the financial statements

including financial reporting legislation (including related company legislation), distributable profits

legislation, pension legislation, and taxation legislation. We assessed the extent of compliance with

these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Group is subject to many other laws and regulations where the consequences of

non-compliance could have a material effect on amounts or disclosures in the financial statements, for

instance through the imposition of fines or litigation or the loss of the Group’s licence to operate. We

identified the following areas as those most likely to have such an effect: health and safety, data

protection laws, anti-bribery, employment law, environmental law, building safety, contract legislation

and certain aspects of company legislation recognising the nature of the Group’s activities. Auditing

standards limit the required audit procedures to identify non-compliance with these laws and

regulations to enquiry of the directors and other management and inspection of regulatory and legal

correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or

evident from relevant correspondence, an audit will not detect that breach.

We discussed with the Audit and Risk Committee matters related to actual or suspected breaches of

laws or regulations, for which disclosure is not necessary, and considered any implications for our audit.

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6 Fraud and breaches of laws and regulations – ability to detect continued

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have

detected some material misstatements in the financial statements, even though we have properly

planned and performed our audit in accordance with auditing standards. For example, the further

removed non-compliance with laws and regulations is from the events and transactions reflected in the

financial statements, the less likely the inherently limited procedures required by auditing standards

would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as this may

involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal

controls. Our audit procedures are designed to detect material misstatement. We are not responsible

for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws

and regulations.

7 We have nothing to report on the other information in the Annual Report

The directors are responsible for the other information presented in the Annual Report together with

the financial statements. Our opinion on the financial statements does not cover the other information

and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of

assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our

financial statements audit work, the information therein is materially misstated or inconsistent with the

financial statements or our audit knowledge. Based solely on that work we have not identified material

misstatements in the other information.

Strategic report and directors’ report

Based solely on our work on the other information:

@ we have not identified material misstatements in the strategic report and the directors’ report;

@ in our opinion the information given in those reports for the financial year is consistent with the

financial statements; and

@ in our opinion those reports have been prepared in accordance with the Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared

in accordance with the Companies Act 2006.

Disclosures of emerging and principal risks and longer-term viability

We are required to perform procedures to identify whether there is a material inconsistency between

the directors’ disclosures in respect of emerging and principal risks and the viability statement, and the

financial statements and our audit knowledge.

Based on those procedures, we have nothing material to add or draw attention to in relation to:

@ the directors’ confirmation within the viability statement on page 90 that they have carried out a

robust assessment of the emerging and principal risks facing the Group, including those that would

threaten its business model, future performance, solvency, and liquidity;

@ the Emerging and Principal Risks disclosures on page 77-89 describing these risks and how

emerging risks are identified, and explaining how they are being managed and mitigated; and

@ the directors’ explanation in the viability statement of how they have assessed the prospects of the

Group, over what period they have done so and why they considered that period to be appropriate,

and their statement as to whether they have a reasonable expectation that the Group will be able to

continue in operation and meet its liabilities as they fall due over the period of their assessment,

including any related disclosures drawing attention to any necessary qualifications or assumptions.

We are also required to review the viability statement, set out on page 90 under the UK Listing Rules.

Based on the above procedures, we have concluded that the above disclosures are materially

consistent with the financial statements and our audit knowledge.

Our work is limited to assessing these matters in the context of only the knowledge acquired during

our financial statements audit. As we cannot predict all future events or conditions and as subsequent

events may result in outcomes that are inconsistent with judgements that were reasonable at the time

they were made, the absence of anything to report on these statements is not a guarantee as to the

Group’s and Company’s longer-term viability.

Corporate governance disclosures

We are required to perform procedures to identify whether there is a material inconsistency between

the directors’ corporate governance disclosures and the financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the following is materially consistent with

the financial statements and our audit knowledge:

@ the directors’ statement that they consider that the annual report and financial statements taken as a

whole is fair, balanced and understandable, and provides the information necessary for shareholders

to assess the Group’s position and performance, business model and strategy;

@ the section of the annual report describing the work of the Audit and Risk Committee, including the

significant issues that the Audit and Risk Committee considered in relation to the financial

statements, and how these issues were addressed; and

@ the section of the annual report that describes the review of the effectiveness of the Group’s risk

management and internal control systems.

We are required to review the part of the Corporate Governance Statement relating to the Group’s

compliance with the provisions of the UK Corporate Governance Code specified by the UK Listing

Rules for our review. We have nothing to report in this respect.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BALFOUR BEATTY PLC CONTINUED

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8 We have nothing to report on the other matters on which we are required to

report by exception

Under the Companies Act 2006, we are required to report to you if, in our opinion:

@ adequate accounting records have not been kept by the parent Company, or returns adequate for our

audit have not been received from branches not visited by us; or

@ the parent Company financial statements and the part of the Directors’ Remuneration Report to be

audited are not in agreement with the accounting records and returns; or

@ certain disclosures of directors’ remuneration specified by law are not made; or

@ we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

9 Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 164, the directors are responsible for: the

preparation of the financial statements including being satisfied that they give a true and fair view; such

internal control as they determine is necessary to enable the preparation of financial statements that

are free from material misstatement, whether due to fraud or error; assessing the Group and parent

Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern; and using the going concern basis of accounting unless they either intend to liquidate the

Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue our opinion in an

auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an

audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if, individually or in

aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at

www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in an annual financial report prepared

under Disclosure Guidance and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides

no assurance over whether the annual financial report has been prepared in accordance with

thoserequirements.

10 The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part

16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the

Company’s members those matters we are required to state to them in an auditor’s report and for no

other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to

anyone other than the Company and the Company’s members, as a body, for our audit work, for this

report, or for the opinions we have formed.

Mike Barradell (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants 15 Canada Square London

E14 5GL

10 March 2026

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GROUP INCOME STATEMENT

For the year ended 31 December 2025

				2025			2024
				Non-			Non-
				underlying			underlying
			Underlying	items		Underlying	items
			items 1	(Note 10)	Total	items 1	(Note 10)	Total
		Notes	£m	£m	£m	£m	£m	£m
Revenue including share of joint ventures and associates			10,7 6 7	–	10,7 6 7	1 0 , 0 15	–	10 , 0 15
Share of revenue of joint ventures and associates		20.2	(1, 2 7 8)	–	(1, 2 7 8)	(1,7 8 1)	–	(1, 7 8 1)
Group revenue		4	9,489	–	9,489	8,234	–	8,23 4
Cost of sales			(9,0 33)	12	(9,0 21)	(7 ,81 7)	(66)	( 7, 8 8 3)
Gross profit/(loss)			456	12	468	417	(66)	3 51
Gain on disposals of interests in investments		35.2/35.3	32	–	32	43	–	43
Amortisation of acquired intangible assets		15	–	(3)	(3)	–	(4)	(4)
Other operating (expenses)/income			(30 0)	23	(27 7)	(2 71)	(5)	(2 76)
Group operating profit/(loss)			18 8	32	2 20	18 9	(75)	114
Share of results of joint ventures and associates excluding gain on disposals of interests in investments			60	–	60	59	–	59
Gain on disposals of interests in investments	35.2	/35.3	4	–	4	–	–	–
Share of results of joint ventures and associates		20.2	64	–	64	59	–	59
Profit/(loss) from operations		6	252	32	28 4	24 8	(75)	17 3
Investment income		8	80	–	80	82	–	82
Finance costs		9	(41)	–	(41)	(41)	–	(41)
Profit/(loss) before taxation			2 91	32	323	289	(75)	214
Taxation		11	(5 2)	(7)	(59)	(62)	26	(3 6)
Profit/(loss) for the year			239	25	264	227	(4 9)	17 8
Attributable to Equity holders			238	25	263	227	(4 9)	17 8
Non-controlling interests			1	–	1	–	–	–
Profit/(loss) for the year			239	25	264	227	(4 9)	17 8
1	Before non-underlying items (Notes 2.10 and 10).
							2025	2024
						Notes	Pence	Pence
Earnings per share
– basic						12	52.6	3 4.2
– diluted						12	52 .0	3 3 .7
Dividends per share proposed for the year						13	14 . 0	12 . 5

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Commentary on the Group income statement*

Total profit before taxation for 2025 was £323m (2024: £214m), which is inclusive of a non‑underlying

profit before tax of £32m (2024: £75m loss). The total profit after tax was £264m (2024: £178m).

Background

The Group income statement includes the majority of the Group’s income and expenses for the year

with the remainder being recorded within the Group statement of comprehensive income. The Group’s

income statement is presented showing the Group’s underlying and non-underlying results separately

on the face of the income statement to assist in understanding the underlying financial performance

achieved by the Group.

The income statement shows the revenue and results of continuing operations. There were no

discontinued operations in either year.

Revenue

Revenue from operations including the Group’s share of joint ventures and associates increased by

8%to £10,767m (2024: £10,015m), largely driven by increases in Construction and Support Services.

During 2025, UK and US Construction’s revenue increased, largely driven by higher volumes in the

energy sector in the UK and stronger demand in US Buildings. This was partially offset by reduced

revenue of 30% at Gammon driven by decreased activity on major civils projects, as work on the two

major projects at Hong Kong International Airport moved towards completion through the year. Within

Support Services, revenue increased by 18% to £1,427m (2024: £1,210m), due to higher power

transmission and distribution volumes, with power revenues nearly doubling since 2023.

Share of results of joint ventures and associates

Joint ventures and associates are those entities over which the Group exercises joint control or has significant

influence and whose results are generally incorporated using the equity method whereby the Group’s

share of the post-tax results of joint ventures and associates is included in the Group’s operating profit.

The Group’s underlying profit generated from its share of joint ventures and associates increased

to£64m (2024: £59m). Increased profitability due to the Group’s increased share in Denver Transit

Operators LLC (DTO), which was acquired in 2024, was largely offset by a reduction in profitability

injoint ventures and associates within the Infrastructure Investments segment.

Underlying profit from operations

The underlying profit from operations for the year increased to £252m (2024: £248m), driven by an

increase in profitability from the earnings-based businesses, partially offset by a reduction in

Infrastructure Investments, which in turn is due to monitor and legal costs in military housing.

The Group also benefited from a £36m gain on disposal relating to the Group’s disposal of its

Investments assets. The Group’s disposal included the sale of Foundry Court, a student

accommodation asset, for a consideration of £48m and gain of £23m. The Group also completed

aseries of disposals of its UK PPP asset to its co-shareholder for a consideration of £87m for a gain of

£7m. Refer to Note 35.2 for more detail.

Non-underlying items

Non-underlying items in 2025 amounted to a credit of £32m (2024: loss of £75m).

The Group has recognised a £49m credit in relation to a US Civils project completed in 2012. In 2024, the

Group recognised a provision of £52m for a claim received from the North Texas Tollway Authority (NTTA)

on a project to provide design and build services in relation to the extension of NTTA’s President George

Bush Turnpike Highway (SH161 in Texas) through a joint operation formed with Fluor Enterprise Inc. in

which the Group owned a 40% share. This project completed in 2012. This provision, net of insurance

recoveries, represented damages awarded to NTTA through a jury verdict in November 2024, and also

included pre-judgement interest and legal costs. This charge was recognised in the Construction Services

segment in 2024 and included within the Group’s non-underlying results due to the size of the provision.

The Group maintained the view that these damages are a result of design elements of the contract which

were performed by subcontractors to the joint operation. In June 2025, an all-party settlement was reached

between NTTA, the joint operation, as well as its design subcontractors. The Group’s share of the

settlement was fully funded by its insurers resulting in no cost to the Group. As such, the Group has

released this provision in full after taking into account legal cost incurred.

In 2025, the Group also increased its provision relating to claims brought against the Group under the

Building Safety Act by £37m as a result of new claims received in the period, settlements and

reassessments to previously provided claims together with legal costs incurred. Consistent with the

treatment adopted in 2024, this charge was recognised within non-underlying and in the Construction

Services segment.

Finally, during 2025, the Group completed the disposal of Omnicom Balfour Beatty, its specialist rail

measurement hardware and intelligent software business, for a consideration of £24m to Hitachi Rail.

Afterdeducting cost of disposal, the Group recorded a gain on disposal of £23m within its non-underlying

results in the year.

Within non-underlying tax there was a £7m charge (2024: £26m credit) relating to the items above.

Net finance income

Net finance income of £39m stayed largely flat compared to £41m in 2024. The increase in

subordinated debt and interest on deposit received in 2025 of £9m and £11m respectively is largely

offset by the impact of impairment reversals of £17m recorded in 2024 which did not repeat in 2025.

Taxation

The Group’s underlying profit before tax from subsidiaries of £227m (2024: £230m) resulted in an

underlying tax charge of £52m (2024: £62m). The decrease in tax charge primarily reflects the

recognition of previously unrecognised brought forward trading losses and a lower tax charge on the

2025 disposals.

Earnings per share

Basic earnings per share were 52.6p (2024: 34.2p). Underlying basic earnings per share were 47.6p

(2024: 43.6p).

* The commentary forms part of the Chief Financial Officer’s review on pages 69 to 71 and does not form part of the financial statements.

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GROUP STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2025

				2025			2024
				Share of joint			Share of joint
				ventures and			ventures and
			Group	associates	Total	Group	associates	Total
		Notes	£m	£m	£m	£m	£m	£m
Profit for the year			200	64	264	11 9	59	17 8
Other comprehensive (loss)/income for the year
Items which will not subsequently be reclassified to the income statement
Actuarial (losses)/gains on retirement benefit assets/liabilities		33.1	(6 2)	1	(61)	(10 2)	–	(10 2)
Fair value revaluations of investments in mutual funds measured at fair value through OCI		33.1	1	–	1	2	–	2
Tax on above		33.1	15	–	15	26	–	26
			(4 6)	1	(4 5)	(74)	–	(74)
Items which will subsequently be reclassified to the income statement
Currency translation differences		33.1	(1 9)	(1 3)	(3 2)	6	3	9
Fair value revaluations	– PPP financial assets	33.1	–	8	8	(2)	(4 8)	(5 0)
	– cash flow hedges	33.1	–	8	8	1	10	11
Recycling of revaluation reserves to the income statement on disposal ^		35.3	–	24	24	–	–	–
Tax on above		33.1	–	(4)	(4)	–	10	10
			(1 9)	23	4	5	(25)	(20)
Total other comprehensive (loss)/income for the year			(6 5)	24	(41)	(69)	(25)	(9 4)
Total comprehensive income for the year		33.1	13 5	88	223	50	34	84
Attributable to Equity holders					222			84
Non-controlling interests					1			–
Total comprehensive income for the year		33.1			223			84

^ Recycling of revaluation reserves to the income statement on disposal has no associated tax effect.

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Commentary on Group statement of comprehensive income*

Total comprehensive income for 2025 was £223m comprising a total profit after tax of £264m and

other comprehensive loss after tax of £41m.

Background

The Group statement of comprehensive income is presented on a total Group basis. Other comprehensive

income (OCI) is categorised into items which will affect the profit and loss of the Group in subsequent

periods when the gain or loss is realised and those which will not be recycled into the income statement.

Items which will not subsequently be reclassified to the income statement

Actuarial movements on retirement benefit assets/liabilities are increases or decreases in the present

value of the pension balances because of:

@ differences between the previous actuarial assumptions and what has actually occurred; or

@ changes in actuarial assumptions used to value the obligations.

Actuarial losses for the Group (excluding joint ventures and associates) totalled £62m in 2025

compared to a £102m loss in 2024. Refer to Note 31.

Items which will subsequently be reclassified to the income statement

Currency translation differences

The Group operates in a number of countries with different local currencies. Currency translation

differences arise on translation of the balance sheet and results from the local functional currency into

the Group’s presentational currency, sterling.

Fair value revaluations – PPP financial assets

Assets constructed by PPP concession companies are classified principally as financial assets

measured at fair value through OCI. In the operational phase fair value is determined by discounting

the future cash flows allocated to the financial asset using discount rates based on long-term gilt rates

adjusted for the risk levels associated with the assets, with market-related fair value movements

recognised in OCI. During the year, gilt rates have decreased resulting in fair value gains including joint

ventures and associates of £8m being taken through OCI (2024: £50m loss).

Fair value revaluations – cash flow hedges

Cash flow hedges are principally interest rate swaps to manage the interest rate and inflation rate risks

in Infrastructure Investments’ subsidiary, joint venture and associate companies which are exposed by

their long-term contractual agreements. The fair value of derivatives changes in response to prevailing

market conditions. During the year, SONIA movements resulted in fair value gains on the interest rate

swaps of £nil (2024: £1m) within the Group’s subsidiaries and £8m (2024: £10m) within the Group’s

joint ventures and associates being recognised in OCI.

Recycling of revaluation reserves to the income statement on disposal

Fair value gains and losses and currency translation differences recognised in OCI are transferred to

the income statement upon disposal of the asset. In 2025, £24m of losses (2024: £nil) were recycled

to the income statement from OCI and included in the gain on disposal.

There is no associated tax on the amounts recycled to the income statement.

* The commentary forms part of the Chief Financial Officer’s review on pages 69 to 71 and does not form part of the financial statements.

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GROUP STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2025

					Share of joint
					ventures’
					and
			Share	Capital	associates’	Other		Non-
		Called-up	premium	redemption	reserves	reserves µ	Retained	controlling
		share capital	account	reserve	(Note 20.6)	(Note 33.1)	profits	interests	Total
	Notes	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January 2024		272	17 6	74	(27)	15 7	546	10	1, 2 0 8
Total comprehensive income for the year	33.1	–	–	–	34	7	43	–	84
Ordinary dividends	13	–	–	–	–	–	(6 1)	(1)	(6 2)
Joint ventures’ and associates’ dividends	20.1	–	–	–	(7 1)	–	71	–	–
Purchase of treasury shares	33.1	–	–	–	–	–	(10 1)	–	(1 0 1)
Cancellation of ordinary shares	33.1	(13)	–	13	–	–	–	–	–
Movements relating to share-based payments +		–	–	–	–	(2)	3	–	1
At 31 December 2024		259	17 6	87	(6 4)	16 2	5 01	9	1 ,1 3 0
Total comprehensive income/(loss) for the year	33.1	–	–	–	88	(1 8)	152	1	2 23
Ordinary dividends	13	–	–	–	–	–	(6 4)	(1)	(6 5)
Joint ventures’ and associates’ dividends	20.1	–	–	–	(5 9)	–	59	–	–
Purchase of treasury shares	33.1	–	–	–	–	–	(12 6)	–	(12 6)
Cancellation of ordinary shares	33.1	(1 2)	–	12	–	–	–	–	–
Movements relating to share-based payments +		–	–	–	–	2	(12)	–	(10)
Reserves transfers relating to joint venture and associate disposals		–	–	–	4	–	(4)	–	–
At 31 December 2025		247	17 6	99	(3 1)	14 6	506	9	1,1 5 2

µ Other reserves include £2 2m of special reserve (2024: £2 2m).

+ Movements relating to share-based payments include £5m tax credit (2024: £4m) recognised directly within retained profits.

Commentary on Group statement of changes in equity*

Total equity was £1,152m at 31 December 2025.

Background

The Group statement of changes in equity includes the total comprehensive income attributable to

equity holders of the Company and non-controlling interests and also discloses transactions which

have been recognised directly in equity and not through the income statement.

Dividends

The Board is recommending a final dividend of 9.8p. Dividends paid in the year comprised £44m for

the final 2024 dividend of 8.7p and £20m for the interim 2025 of dividend 4.2p.

Joint ventures’ and associates’ dividends

Dividends of £59m (2024: £71m) were received in the year from joint ventures and associates (JVA),

resulting in a transfer of this amount between JVA reserves and Group retained profits.

Purchase of treasury shares

In 2025 the Company commenced the fifth phase of its share buyback programme, which completed

on 12 December 2025. The Company purchased 24.2m (2024: 27.1m) shares for a total consideration

of £125m (2024: £100m) and held these in treasury with no voting rights. The purchase of these

shares, together with associated fees and stamp duty amounting to £1m (2024: £1m), utilised £126m

(2024: £101m) of the Company’s distributable profits.

Cancellation of ordinary shares

On 24 December 2025, the Company cancelled the 24.2m treasury shares purchased through the

2025 phase of its share buyback programme (2024: 27.1m). This resulted in a decrease in called-up

share capital of £12m and a corresponding increase in the capital redemption reserve (2024: £13m).

Reserves

Other reserves comprise: hedging reserves £(4)m (2024: £(4)m); PPP financial assets revaluation

reserve £(1)m (2024: £(1)m); currency translation reserve £102m (2024: £121m); special reserve £22m

(2024: £22m); and other reserves £27m (2024: £24m ).

* The commentary forms part of the Chief Financial Officer’s review on pages 69 to 71 and does not form part of the financial statements.

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COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2025

Notes

Called-up

share capital

£m

premium

account

£m

Capital

redemption

reserve

£m

Other

reserves

(Note 33.2)

∆

£m

Retained

profits

£m

Total

£m

At 1 January 2024 272 176 74 149 659 1,330

Total comprehensive income for the year 33.2 – – – – 137 137

Ordinary dividends 13 – – – – (61) (61)

Purchase of treasury shares 33.2 – – – – (101) (101)

Cancellation of ordinary shares 33.2 (13) – 13 – – –

Movements relating to share-based payments

– – – 8 (11) (3)

At 31 December 2024 259 176 87 157 623 1,302

Total comprehensive income for the year 33.2 – – – (1) 134 13 3

Ordinary dividends 13 – – – – (64) (64)

Purchase of treasury shares 33.2 – – – – (126) (126)

Cancellation of ordinary shares 33.2 (12) – 12 – – –

Movements relating to share-based payments

– – – 13 (28) (15)

At 31 December 2025 247 176 99 169 539 1,230

∆ Other reserves include £22m of special reserve (2024: £22m).

+ Movements relating to share-based payments include £nil tax credit (2024: £nil) recognised directly within retained profits.

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BALANCE SHEETS

At 31 December 2025

			Group		Company
			2025	2024	2025	2024
		Notes	£m	£m	£m	£m
Non-current assets
Intangible assets	– goodwill	14	819	85 4	–	–
	– other	15	256	26 8	–	–
Service concession contract asset		16	15 4	69	–	–
Property, plant and equipment		17	1 51	13 6	–	–
Right-of-use assets		18	192	15 3	–	–
Investment properties		19	10 4	10 1	–	–
Investments in joint ventures and associates		20	363	385	–	–
Investments		21	18	24	1,766	1,753
PPP financial assets		22	18	21	–	–
Trade and other receivables		25	296	326	298	370
Retirement benefit assets		31	–	43	–	–
Deferred tax assets		30	19 9	20 0	9	8
			2, 570	2,5 80	2,073	2,131
Current assets
Inventories		23	15 5	15 8	–	–
Contract assets		24	238	229	–	–
Trade and other receivables		25	1, 2 5 3	1 ,099	2	1
Cash and cash equivalents
– infrastructure investments		28	19 3	265	–	–
– other		28	1,667	1, 2 9 3	663	418
Current tax receivable			17	8	37	20
			3,5 23	3,0 52	702	439
Total assets			6,09 3	5,6 32	2,775	2,570

On behalf of the Board

Philip Hoare Philip Harrison

Director Director

10 March 2026

		Group		Company
		2025	2024	2025	2024
	Notes	£m	£m	£m	£m
Current liabilities
Contract liabilities	24	(1, 0 6 2)	(697)	–	–
Trade and other payables	26	(1, 9 5 7)	(1, 7 7 8)	(1,109)	(658)
Provisions	27	(2 66)	(23 9)	–	–
Borrowings
– non-recourse loans	28	(37)	(11)	–	–
– other	28	(6 8)	(18 5)	–	(171)
Lease liabilities	29	(70)	(57)	–	–
Current tax payable		(8)	(13)	–	–
		(3, 4 6 8)	(2,98 0)	(1,109)	(829)
Non-current liabilities
Contract liabilities	24	(1)	(2)	–	–
Trade and other payables	26	(10 0)	(88)	(283)	(274)
Provisions	27	(32 3)	(378)	–	–
Borrowings
– non-recourse loans	28	(56 7)	(5 89)	–	–
– other	28	(15 3)	(16 5)	(153)	(165)
Lease liabilities	29	(12 8)	(10 5)	–	–
Retirement benefit liabilities	31	(4 8)	(41)	–	–
Deferred tax liabilities	30	(15 3)	(15 3)	–	–
Derivative financial instruments	41	–	(1)	–	–
		(1, 4 7 3)	(1, 5 2 2)	(436)	(439)
Total liabilities		(4 , 9 41)	(4,50 2)	(1,545)	(1,268)
Net assets		1 ,1 5 2	1,1 3 0	1,230	1,302
Equity
Called-up share capital	32	2 47	25 9	247	259
Share premium account	33	17 6	17 6	176	176
Capital redemption reserve	33	99	87	99	87
Share of joint ventures’ and associates’ reserves	33	(3 1)	(6 4)	–	–
Other reserves	33	14 6	16 2	169	157
Retained profits	33	506	5 01	539	623
Equity attributable to equity
holders of the Parent		1,1 4 3	1 ,1 2 1	1,230	1,302
Non-controlling interests	33	9	9	–	–
Total equity		1 ,1 5 2	1,1 3 0	1,230	1,302

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Commentary on the Group balance sheet*

Total assets of £6.1bn were 8% higher than last year and total liabilities of £4.9bn increased by 9%.

Net assets decreased to £1.2bn primarily driven by the Group’s share buyback programme.

Background

The Group’s balance sheet shows the Group’s assets and liabilities as at 31 December 2025 in

accordance with IAS 1 Presentation of Financial Statements.

Goodwill

The goodwill on the Group’s balance sheet at 31 December 2025 decreased to £819m (2024: £854m),

solely due to foreign currency movements.

Investments in joint ventures and associates

Investments in joint ventures and associates have decreased by £22m to £363m, largely driven by the

disposals of the Group’s interest in 10 UK PPP financial assets to its co-shareholder for a consideration

of £87m. Share of joint venture and associates profits of £64m was offset by dividends of £59m.

Working capital

Net movements in working capital are discussed in the statement of cash flows commentary on page 183.

Service concession contract asset

Service concession contract asset of £154m relates to a student accommodation project which features

demand risk under IFRIC 12 Service Concession Arrangements. Construction of the asset commenced in

December 2023 and is anticipated to complete in 2028.

Borrowings

Borrowings excluding non‑recourse loans

As at 31 December 2025, the Group had £480m of undrawn committed bank facilities, comprising a

£450m sustainability linked revolving credit facility (RCF) and an additional bilateral committed bank

facility of £30m. The purpose of these facilities is to provide liquidity to support Balfour Beatty’s

ongoing activities. As at 31 December 2025, both facilities remain undrawn.

At 31 December 2025, the Group held $208m of USPP notes comprising of US$35m of notes maturing

in June 2027 at a fixed coupon of 6.31%, US$80m of notes maturing in June 2029 at a fixed coupon

of6.39%, US$25m maturing in May 2031 at a fixed coupon of 6.71%, US$43m of notes maturing in

June 2032 at a fixed coupon of 6.45% and US$25m maturing in May 2036 at a fixed coupon of 6.96%.

Non‑recourse loans

In addition, the Group has non-recourse facilities in companies engaged in certain infrastructure

concession projects. At 31 December 2025, the Group’s share of these non-recourse net borrowings

amounted to £1,224m (2024: £1,376m), comprising £813m (2024: £1,041m) in relation to joint ventures

and associates as disclosed in Note 20.2 and £411m (2024: £335m) on the Group balance sheet in

relation to subsidiaries as disclosed in Note 28.

Retirement benefit assets and liabilities

The Group’s balance sheet includes net retirement benefit liabilities of £48m (2024: £2m net asset)

representing net deficits in the Group’s pension schemes, as measured on an IAS 19 basis. The

movement in pension deficit in the year is primarily due to actuarial losses of £62m (2024: £102m). Any

surplus of deficit contributions would be recoverable by way of a refund as, according to the relevant

trust deed and rules documents, the Group has the unconditional right to the surplus and controls the

run-off of the benefit obligations once all other obligations of the schemes have been settled.

Other

In addition to the liabilities recognised on the balance sheet, the Group, in the ordinary course of

business, arranges for financial institutions to issue guarantees to customers in connection with its

contracting activities (commonly referred to as contract bonds). These bonds provide customers with

financial protection in the event that the Group fails to fulfil its contractual obligations and are

customary or, in some markets, mandatory. Financial institutions issuing the bonds receive a fee and a

counter indemnity from the Company. As at 31 December 2025, contract bonds issued by financial

institutions covered £6.1bn (2024: £5.0bn) of the Group’s contract commitments.

Equity commitments

During 2025, the Group invested £29m (2024: £28m) in a combination of equity and shareholder loans

to Infrastructure Investments’ project companies and at the end of the year had committed to provide

a further £57m from 2026 onwards, inclusive of £4m expected for projects at preferred bidder stage.

£25m of this is expected to be invested in 2026, as disclosed in Note 42(f).

* The commentary forms part of the Chief Financial Officer’s review on pages 69 to 71 and does not form part of the financial statements.

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GROUP STATEMENT OF CASH FLOWS

For the year ended 31 December 2025

		2025	2024
	Notes	£m	£m
Cash flows from operating activities
Cash from operations	34.1	695	277
Income taxes paid		(39)	(12)
Net cash from operating activities		656	265
Cash flows from investing activities
Dividends received from:
– joint ventures and associates – infrastructure investments	20.5	21	26
– joint ventures and associates – other	20.5	38	45
– other investments	21	1	1
Interest received – infrastructure investments – joint ventures	20.5	3	7
Interest received subsidiaries:
– infrastructure investments		9	11
– other Purchases of:		50	40
– service concession contract asset – infrastructure investments	16	(79)	(5 6)
– property, plant and equipment	17	(4 9)	(28)
– investment properties	19	(36)	(3 6)
Investments in and long-term loans to joint ventures and associates	20.5	(11)	(20)
Return of equity from joint ventures and associates	20.5	5	–
PPP financial assets cash expenditure	22	(4)	(5)
PPP financial assets cash receipts	22	7	8
Disposals of:
– investments in joint ventures – infrastructure investments	20.5	89	43
– property, plant and equipment – other		5	5
– investment properties	19	48	–
– other investments	21	6	5
– trade and assets relating to Omnicom Balfour Beatty	10.2	24	–
Net cash from investing activities		127	46

		2025	2024
	Notes	£m	£m
Cash flows used in financing activities
Purchase of ordinary shares	33.3	(31)	(12)
Purchase of treasury shares	32	(12 6)	(10 1)
Proceeds from new loans relating to:
– infrastructure investments assets	34.3	22	36
– other Repayments of loans relating to:	34.3	–	39
– infrastructure investments assets	34.3	(3 0)	(9)
– other	34.3	–	(40)
Repayment of lease liabilities	29	(6 8)	(59)
Ordinary dividends paid	13	(6 4)	(6 1)
Other dividends paid – non-controlling interests		(1)	(1)
Interest paid – infrastructure investments		(14)	(12)
Interest paid – other		(22)	(3 1)
Net cash used in financing activities		(3 3 4)	(2 5 1)
Net increase in cash and cash equivalents		449	60
Effects of exchange rate changes		(30)	3
Cash and cash equivalents at beginning of year		1, 3 7 3	1, 3 1 0
Cash and cash equivalents at end of year	34.2	1,7 9 2	1, 3 7 3

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Commentary on the Group statement of cash flows*

Cash and cash equivalents increased during the year to £1,792m. The Group generated cash from

operating activities in the year of £656m compared to £265m in the prior year.

Background

The Group statement of cash flows shows the cash flows from operating, investing and financing

activities during the year.

Working capital

Working capital includes: inventories; contract assets and liabilities; trade and other receivables; trade

and other payables; and provisions. Where the net working capital balance is in an asset position, i.e.

the inventories and receivables balances are greater than the payables and provisions, this is referred

to as unfavourable/positive working capital. Where this is not the case, this is referred to as favourable/

negative working capital.

Cash used in operations

Cash inflow from operations of £695m (2024: £277m) included a profit from operations of £284m

(2024: £173m), a working capital inflow of £408m (2024: £99m) and the following significant

adjustment items: share of results of joint ventures and associates £64m (2024: £59m); depreciation

and amortisation charges £123m (2024: £129m); gain on disposal of interests in investments of £32m

(2024: £43m); and pension payments including deficit funding of £10m (2024: £30m).

Working capital movements

The movement of the individual working capital balances on the balance sheet will not be reflective of

the underlying movement of working capital due to the balance sheet being affected by foreign

currency movements and disposals.

Working capital movements are disclosed in Note 34.1.

Changes in the Group’s working capital position during the year resulted in a cash inflow of £408m

(2024: £99m inflow). This is driven by driven by increased revenue, advanced receipts on several new

projects in US Construction and Support Services.

Cash flows from investing activities

The Group received dividends of £59m (2024: £71m) from joint ventures and associates during the year.

The Group continued to invest in Infrastructure Investments assets, acquiring a new multifamily

housing development in Conroe, Texas, for £36m. Construction at West Slope student accommodation

project for the University of Sussex also continued into 2025, incurring £79m of capitalised costs in

service concession contract assets.

The Group also continued to invest in its Infrastructure Investments joint ventures and associates,

contributing £11m (2024: £20m) in the year.

The Group completed several disposals in 2025, further details can be found in Note 35.2.

Within the Infrastructure Investments segment, the Group’s disposal included the sale of Foundry

Court, a student accommodation asset, for a consideration of £48m. The Group also completed

aseries of disposals of its UK PPP asset to its co-shareholder for a consideration of £87m.

In 2025, the Group also completed the disposal of Omnicom Balfour Beatty, its specialist rail

measurement hardware and intelligent software business, for a consideration of £24m.

Cash flows used in financing activities

On 12 December 2025 the Company completed its 2025 share buyback programme resulting in 24.2m

(2024: 27.1m) shares purchased for a total consideration of £126m (2024: £101m), including associated

fees and stamp duty amounting to £1m (2024: £1m).

As at 31 December 2025, the Group had £480m of undrawn committed bank facilities, comprising a

£450m sustainability linked revolving credit facility (RCF) and an additional bilateral committed bank

facility of £30m. The purpose of these facilities is to provide liquidity to support Balfour Beatty’s

ongoing activities. As at 31 December 2025, both facilities remain undrawn.

Interest payments amounted to £36m (2024: £43m) during the year, of which £14m (2024: £12m)

related to infrastructure investments, £10m (2024: £10m) related to the USPP, £9m (2024: £7m)

related to the interest paid on lease liabilities and £3m (2024: £14m) related to other finance charges.

* The commentary forms part of the Chief Financial Officer’s review on pages 69 to 71 and does not form part of the financial statements.

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NOTES TO THE FINANCIAL STATEMENTS

1 Basis of accounting

Going concern

The Directors consider it reasonable to assume that the Group has adequate resources to continue

for the foreseeable future and, for this reason, have continued to adopt the going concern basis in

preparing the financial statements.

The key financial risk factors for the Group remain largely unchanged. The Group’s principal risks and

the consequent impact these might have on the Group as well as mitigations that are in place are

detailed on pages 77 to 89.

The Group’s US private placement and committed bank facilities contain certain financial covenants,

such as the ratio of the Group’s EBITDA to its net debt which needs to be less than 3.0 and the ratio

of its EBITA to net borrowing costs which needs to be in excess of 3.0. These covenants are tested

on a rolling 12-month basis as at the June and December reporting dates. At 31 December 2025,

both these covenants were passed as the Group had net cash and net interest income from a

covenant test perspective.

The Directors have carried out an assessment of the Group’s ability to continue as a going concern for

the period of at least 12 months from the date of approval of the financial statements. This assessment

has involved the review of medium-term cash forecasts of each of the Group’s operations. The

Directors have also considered the strength of the Group’s order book which amounted to £22.7bn at

31 December 2025 and will provide a pipeline of secured work over the going concern assessment

period. These base case projections indicate that the headroom provided by the Group’s strong cash

position and the debt facilities currently in place are adequate to support the Group over the going

concern assessment period.

At 31 December 2025, the Group’s only debt, other than non-recourse borrowings ring-fenced within

certain concession companies, comprised $208m US private placement (USPP) notes.

The Group’s £450m committed sustainability linked bank facility remained undrawn at 31 December 2025

and is fully available to the Group until June 2028. The Group’s £30m bilateral committed facility also

remained undrawn at 31 December 2025 and remains fully available to the Group until December 2027.

The Directors have stress-tested the Group’s base case projections of both cash and profit against key

sensitivities which could materialise as a result of adverse changes in the economic environment

including a deterioration in commercial or operational conditions. The Group has sensitised its

projections against severe but plausible downside scenarios which include:

@ elimination of a portion of unsecured work assumed within the Group’s base case projections and

a delay of six months for any awarded but not yet contracted work;

@ a deterioration of contract judgements and restriction of a portion of the Group’s margins; and

@ delay in the disposal of Investments assets by 12 months.

In the severe but plausible downside scenarios modelled, the Group continues to retain sufficient

headroom on liquidity throughout the going concern period. Through these downside scenarios, the

Group is still expected to be in a net cash position and to remain within its banking covenants through

the going concern assessment period.

Based on the above and having made appropriate enquiries, the Directors consider it reasonable to assume

that the Group and the Company have adequate resources to continue for the going concern period and,

for this reason, have continued to adopt the going concern basis in preparing the financial statements.

Consideration of climate change

In preparing the financial statements, the Directors have considered the impact of climate change,

particularly in the context of the risks identified in the TCFD disclosure on pages 91 to 98. There has

been no material impact identified on the financial reporting judgements and estimates. In particular,

the Directors considered the impact of climate change in respect of the following areas:

@ contract judgements made on the Group’s Construction Services and Support Services contracts;

@ going concern and viability of the Group over the next three years;

@ cash flow forecasts used in the impairment assessments of non-current assets including the

Group’s intangible assets such as customer contracts and goodwill;

@ cash flow forecasts used in the impairment assessments of the Group’s infrastructure investments assets;

@ carrying value and useful economic lives of property, plant and equipment; and

@ the valuation of assets held within the Group’s pension schemes.

As current legislation stands, there is currently no material medium-term impact expected from climate

change due to the contractual mechanisms and insurance arrangements in place. The Directors are,

however, aware of the ever-changing risks attached to climate change and will regularly assess these

risks against judgements and estimates made in preparation of the Group’s financial statements.

Basis of preparation

The annual financial statements have been prepared in accordance with UK-adopted international

accounting standards and in conformity with the requirements of the Companies Act 2006 (the Act).

The financial statements have been prepared under the historical cost convention, except as described

under Note 2.27. The functional and presentational currency of the Company and the presentational

currency of the Group is sterling.

The separate financial statements of the Company are presented as required by the Act and have been

prepared in accordance with FRS 101 Reduced Disclosure Framework. In preparing these financial

statements, the Company applies the recognition, measurement and disclosure requirements of

UK-adopted international accounting standards, but makes amendments where necessary in order to

comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure

exemptions has been taken.

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available

under that standard in relation to share-based payments, financial instruments, capital management,

presentation of a cash flow statement, related party transactions and comparative information.

Where required, equivalent disclosures are given in the consolidated financial statements.

In addition to the application of FRS 101, the Company has taken advantage of Section 408 of the Act

and, consequently, its statement of comprehensive income (including the profit and loss account) is

not presented as part of these financial statements.

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2 Principal accounting policies

2.1 Accounting standards

Adoption of new and revised standards

The following accounting standards, interpretations and amendments have been adopted by the Group

in the year ended 31 December 2025:

@ Amendments to the following standard:

@ IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability.

The amended standard did not have a material effect on the Group or the Company.

Accounting standards not yet adopted by the Group

The following accounting standards, interpretations and amendments have been issued by the IASB

but had either not been adopted by the UK or were not yet effective in the UK at 31 December 2025:

@ IFRS 18 Presentation and Disclosure in Financial Statements

@ IFRS 19 Subsidiaries without Public Accountability: Disclosures

@ Amendments to the following standards:

@ IFRS 9 and IFRS 7: Classification and Measurement of Financial Instruments

@ IFRS 9 and IFRS 7: Contracts Referencing Nature-dependent Electricity

@ Annual Improvements to IFRS Accounting Standards Volume 11

The Directors do not expect these new and amended standards to have a material effect on the Group

or the Company and have chosen not to adopt any of the above standards and interpretations earlier

than required. The Group is currently assessing the impact of the revised presentation and disclosure

requirements for financial statements from IFRS 18.

2.2 Basis of consolidation

The Group financial statements include the results of the Company and its subsidiaries, together with

the Group’s share of the results of joint ventures and associates, drawn up to 31 December each year.

a) Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to,

or has rights to, variable returns from its involvement with the entity and has the ability to affect those

returns through its power over the entity.

The results of subsidiaries are consolidated from the date that control commences until the date that

control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the

Group. On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at

their fair values at the date of acquisition. Any excess of the fair value of the cost of acquisition over

the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the

cost of acquisition below the fair values of the identifiable net assets acquired (discount on acquisition)

is credited to the income statement in the period of acquisition. The interest of non-controlling equity

holders is stated at the non-controlling equity holders’ proportion of the fair value of the assets and

liabilities recognised.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference

between: (i) the aggregate of the fair value of the consideration received and the fair value of any retained

interest less direct costs of the transaction; and (ii) the previous carrying amount of the assets (including

goodwill) less liabilities of the subsidiary. The fair value of any investment retained in the former subsidiary

at the date when control is lost is regarded as the fair value on initial recognition for subsequent

accounting under IFRS 9 Financial Instruments or, when applicable, the cost on initial recognition

of an investment in an associate or jointly controlled entity. Amounts previously recognised in other

comprehensive income in relation to the subsidiary are accounted for in the same manner as would

be required if the relevant assets or liabilities were disposed of (i.e. reclassified to profit or loss or

transferred directly to retained earnings).

Any acquisition or disposal which does not result in a change in control is accounted for as a transaction

between equity holders. The carrying amounts of the controlling and non-controlling interests are

adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the

fair value of the consideration paid or received and the amount by which the non-controlling interests

are adjusted is recognised directly in equity and attributed to the owners of the Parent.

Accounting policies of subsidiaries are adjusted where necessary to ensure consistency with those

used by the Group. All intra-Group transactions, balances, income and expenses are eliminated

on consolidation.

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2 Principal accounting policies continued

2.2 Basis of consolidation continued

b) Joint ventures and associates

Joint ventures are those entities over whose activities the Group has joint control, whereby the Group

has rights to the net assets of the entity, rather than rights to its individual assets and obligations for its

individual liabilities.

Associates are those entities over whose financial and operating policies the Group has significant

influence, but not control or joint control.

The results, assets and liabilities of joint ventures and associates are incorporated in the financial

statements using the equity method of accounting except when classified as held for sale. The equity

return from the military housing joint ventures of the Group is contractually limited to a maximum level

of return, beyond which the Group does not share in any further return. Therefore the Group’s

investment in these projects is recognised at initial equity investment plus the value of the Group’s

accrued preferred return from the underlying projects.

Any excess of the fair value of the cost of acquisition over the Group’s share of the fair values of the

identifiable net assets of the joint venture or associate entity at the date of acquisition is recognised as

goodwill. Any deficiency of the fair value of the cost of acquisition below the Group’s share of the fair

values of the identifiable net assets of the joint venture or associate at the date of acquisition (discount

on acquisition) is credited to the income statement in the period of acquisition.

Investments in joint ventures and associates are initially carried in the balance sheet at cost (including

goodwill arising on acquisition) and adjusted by post-acquisition changes in the Group’s share of net

assets of the joint venture or associate, less any impairment in the value of individual investments.

Losses of joint ventures and associates in excess of the Group’s interest in those joint ventures and

associates are only recognised to the extent that the Group is contractually liable for, or has a

constructive obligation to meet, the obligations of the joint ventures and associates.

Unrealised gains and losses on transactions with joint ventures and associates are eliminated to the

extent of the Group’s interest in the relevant joint venture or associate.

c) Joint operations

The Group’s share of the results, assets and liabilities of contracts carried out in conjunction with

another party are included under each relevant heading in the income statement and balance sheet.

The results of a small number of joint operations are drawn up to a date other than 31 December,

typically in the last two weeks of December. Adjustments are made for any significant transactions

between such date and 31 December.

2.3 Foreign currencies

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rates of

exchange at the reporting date. Significant exchange rates used in the preparation of these financial

statements are shown in Note 3.

For the purpose of presenting consolidated financial statements, the results of foreign subsidiaries,

associates and joint venture entities are translated at average rates of exchange for the year, unless the

exchange rates fluctuate significantly during that period, in which case the exchange rates at the date

of transactions are used. Assets and liabilities are translated at the rates of exchange prevailing at the

reporting date. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are

treated as assets and liabilities of the foreign entity and translated at the rates of exchange at the

reporting date. Currency translation differences arising are transferred to the Group’s foreign currency

translation reserve and are recognised in the income statement on disposal of the underlying investment.

In order to hedge its exposure to certain foreign exchange risks, the Group may enter into forward

foreign exchange contracts. Refer to Note 2.27(b) for details of the Group’s accounting policies in

respect of such derivative financial instruments.

2.4 Revenue recognition

The Group recognises revenue when it transfers control over a product or service to its customer.

Revenue is measured based on the consideration specified in a contract with a customer and excludes

amounts collected on behalf of third parties. Where consideration is not specified within the contract

and is therefore subject to variability, the Group estimates the amount of consideration to be received

from its customer. The consideration recognised is the amount which is highly probable not to result in

a significant reversal in future periods.

Where a modification to an existing contract occurs, the Group assesses the nature of the modification

and whether it represents a separate performance obligation required to be satisfied by the Group or

whether it is a modification to the existing performance obligation.

The Group does not expect to have any contracts where the period between the transfer of the

promised goods or services to the customer and payment by the customer exceeds one year.

As a consequence, the Group does not adjust its transaction price for the time value of money.

The Group’s activities are wide ranging, and as such, depending on the nature of the product or service

delivered and the timing of when control is passed onto the customer, the Group will account for

revenue over time and at a point in time. Where revenue is measured over time, the Group uses the

input method to measure progress of delivery.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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2.4 Revenue recognition continued

Revenue is recognised as follows:

@ revenue from construction and services activities is recognised over time and the Group uses the

input method to measure progress of delivery;

@ revenue from manufacturing activities is recognised at a point in time when title has passed to the

customer; and

@ dividend income in the Parent Company is recognised when the equity holders’ right to receive

payment is established.

2.5 Construction and services contracts

When the outcome of individual contracts can be estimated reliably, contract revenue is recognised by

reference to the measure of progress at the reporting date using the input method. Costs are

recognised as incurred and revenue is recognised on the basis of the proportion of total costs at the

reporting date to the estimated total costs of the contract.

Estimates of the final out-turn on each contract may include cost contingencies to take account of the

specific risks within each contract that have been identified during the early stages of the contract. The

cost contingencies are reviewed on a regular basis throughout the contract life and are adjusted where

appropriate. However, the nature of the risks on contracts are such that they often cannot be resolved

until the end of the project and therefore may not reverse until the end of the project. The estimated

final out-turns on contracts are continuously reviewed and, in certain limited cases, recoveries from

insurers are assessed, and adjustments made where necessary.

No margin is recognised until the outcome of the contract can be estimated with reasonable certainty.

Provision is made for all known or expected losses on individual contracts once such losses are

foreseen.

Revenue in respect of variations to contracts and incentive payments is recognised when there is an

enforceable right to payment and it is highly probable it will be agreed by the customer. Variable

consideration is assessed on a contract-by-contract basis according to the facts, circumstances and

terms of each project and only recognised to the extent that it is highly probable not to significantly

reverse in the future. Revenue in respect of claims is recognised only if it is highly probable not to

reverse in future periods. Profit for the year includes the benefit of claims settled in the year to the

extent not previously recognised on contracts completed in previous years.

2.6 Segmental reporting

The Group considers its Board of Directors to be the chief operating decision maker and therefore the

segmental disclosures provided in Note 5 are aligned with the monthly reports provided to the Board of

Directors. The Group’s reporting segments are based on the types of services provided. Operating

segments with similar economic characteristics have been aggregated into three reportable segments,

which reflect the nature of the services provided by the Group. A description of each reportable

segment is provided in Note 5. Further information on the business activities of each reportable

segment is set out on pages 193 to 196.

Operating segments are aggregated on the basis of the nature of the services provided and the

manner in which returns are earned by the Group. Further information on the nature of services

provided within each segment is included in Note 4.

Working capital is the balance sheet measure reported to the chief operating decision maker. The profitability

measure used to assess the performance of the Group is underlying profit from operations.

Segment results represent the contribution of the different segments after the allocation of attributable

corporate overheads. Transactions between segments are conducted at arm’s-length market prices.

Segment assets and liabilities comprise those assets and liabilities directly attributable to the segments.

Corporate assets and liabilities include cash balances, bank borrowings, tax balances and dividends

payable. Non-recourse net borrowings are directly attributable to Infrastructure Investments and

therefore not included within Corporate activities.

Major customers are defined as customers contributing more than 10% of the Group’s external revenue.

2.7 Pre-contract bid costs and recoveries

Pre-contract costs are expensed as incurred until preferred bidder status is awarded at which point

further costs are capitalised as there is a high probability that the Group would be able to recover these

costs. Amounts subsequently recovered in respect of pre-contract costs that have been written off

before preferred bidder status was awarded are recognised in full in the income statement when they

are received in cash.

2.8 Profit from operations

Profit from operations is stated after the Group’s share of the post-tax results of equity accounted joint

venture entities and associates and other operating expenses, which mainly consist of admin expenses,

but before investment income and finance costs.

2.9 Investment income and finance costs

Interest income is accrued on a time basis using the effective interest method by reference to the

principal outstanding and the effective interest rate, which is the rate that exactly discounts estimated

future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Finance costs of debt, including premiums payable on settlement and direct issue costs, are charged

to the income statement on an accruals basis over the term of the instrument, using the effective

interest method. Finance costs also include interest cost on the discount unwind of lease liabilities and

impairment of loans to joint ventures and associates and accrued interest thereon.

2.10 Non-underlying items

Non-underlying items are items of financial performance which the Group believes should be presented

separately on the face of the income statement to enable comparability of the Group’s performance

from its ongoing normal day-to-day trading activities. Such items will not affect the absolute amount

of the results for the period and the trend of results. The Group’s underlying results exclude

non-underlying items.

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2.10 Non-underlying items continued

Non-underlying items include:

@ gains and losses on the disposal of businesses and investments, unless this is part of a programme

of releasing value from the disposal of similar businesses or investments such as infrastructure

concessions;

@ costs of major restructuring and reorganisation of existing businesses;

@ costs of integrating newly acquired businesses;

@ acquisition and similar costs related to business combinations such as transaction costs;

@ impairment and amortisation charges on intangible assets arising on business combinations

(amortisation of acquired intangible assets); and

@ impairment of goodwill.

These are examples, however, from time to time it may be appropriate to exclude further items that are

considered distortive in size and nature to aid comparability of the Group’s performance. Refer to Note 10.

2.11 Taxation

The tax charge comprises current tax and deferred tax, calculated using tax rates that have been

enacted or substantively enacted by the reporting date. Current tax and deferred tax are charged or

credited to the income statement, except when they relate to items charged or credited directly to

equity, in which case the relevant tax is also accounted for within equity. Current tax is based on the

profit for the year.

Deferred tax is provided, using the liability method, on temporary differences arising between the tax

bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax on

such assets and liabilities is not recognised if the temporary difference arises from the initial

recognition of goodwill or from the initial recognition (other than in a business combination) of other

assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be

available against which the temporary differences can be utilised. The carrying amount of deferred

tax assets is reviewed at each reporting date.

Deferred tax is provided on temporary differences arising on investments in subsidiaries, joint ventures

and associates, except where the timing of the reversal of the temporary difference can be controlled

by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same

taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

2.12 Intangible assets

a) Goodwill

Goodwill arises on the acquisition of subsidiaries and other businesses, joint ventures and associates

and represents the excess of the fair value of consideration over the fair value of the identifiable assets

and liabilities acquired. Goodwill on acquisitions of subsidiaries and other businesses is included in

non-current assets. Goodwill on acquisitions of joint ventures and associates is included in investments

in joint ventures and associates.

Goodwill is reviewed annually for impairment and is carried at cost less accumulated impairment

losses. Goodwill is included when determining the profit or loss on subsequent disposal of the

business to which it relates.

Goodwill arising on acquisitions before the date of transition to IFRS (1 January 2004) has been

retained at the previous UK GAAP amounts subject to being tested for impairment. Goodwill written

off or discount arising on acquisition credited to reserves under UK GAAP prior to 1998 has not been

reinstated and is not included in determining any subsequent profit or loss on disposal.

b) Other intangible assets

Other intangible assets are stated at fair value or cost less accumulated amortisation and impairment

losses. Amortisation charges in respect of software and Infrastructure Investments intangibles are

included in underlying items.

c) Research and development

Internally generated intangible assets developed by the Group are recognised only if all the following

conditions are met: an asset is created that can be identified; it is probable that the asset created will

generate future economic benefits; and the development cost of the asset can be measured reliably.

Other research expenditure is written off in the period in which it is incurred.

2.13 Service concession contract asset

Service concession contract asset is stated at cost less impairment losses and includes concession

assets that are accounted for under IFRIC 12 Service Concession Arrangements. These assets are

classified as service concession contract assets whilst in the construction phase. Once construction

is complete and the asset enters the operational phase, it is reclassified to intangible assets or PPP

assets depending on whether the asset features demand risk.

2.14 Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditure associated with bringing the asset to its operating location and condition.

Refer to Note 17 for further detail.

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2.15 Investment properties

The Group classifies land and buildings which it holds to generate capital appreciation and/or to earn

rental income as investment properties. The Group has chosen to state its investment properties at

cost less accumulated depreciation and impairment losses. The Group depreciates its investment

properties over 25 years. Land is not depreciated.

2.16 Leasing

As a lessee, the Group assesses whether a contract is, or contains, a lease at the inception of a

contract. A lease exists if the contract conveys the right to control the use of an identified asset for a

period of time in exchange for consideration. To assess if a lease exists, the Group assesses whether:

(i) the contract involves the use of an identified asset; (ii) the Group has the right to obtain substantially

all of the economic benefits from the use of the asset throughout the lease term; and (iii) the Group

has the right to direct the use of the asset. In order to determine if the contract involves the use of an

identified asset, the Group exercises judgement to assess if the supplier has a substantive substitution

right over the asset. An asset is not identified if it has been determined that the supplier has

substantive substitution rights.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date.

The right-of-use asset is initially measured at cost and subsequently depreciated over the lease term.

The lease liability is measured at the present value of the lease payments that are not paid at the

commencement date, discounted using the interest rate implicit in the lease, or if that rate cannot

be readily determined, the Group’s incremental borrowing rate. The Group has elected to apply the

practical expedient which allows the Group to use a single discount rate for a portfolio of leases with

similar characteristics.

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of

less than 12 months and leases of low-value assets. Instead, the Group recognises the lease payments

associated with these leases as an expense on a straight-line basis over the lease term.

2.17 Impairment of assets

Assets that have an indefinite useful life (such as goodwill arising on acquisitions) are reviewed at least

annually for impairment. Other intangible assets, property, plant and equipment and right-of-use assets

are reviewed for impairment whenever there is any indication that the carrying amount of the asset

may not be recoverable.

If the recoverable amount of an asset is less than its carrying amount, an impairment loss is recognised.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. Value-in-use is

assessed by discounting the estimated future cash flows that the asset is expected to generate. For

this purpose assets, including goodwill, are grouped into cash-generating units representing the level

at which they are monitored by the Board of Directors for internal management purposes. Goodwill

impairment losses are not reversed in subsequent periods. Reversals of other impairment losses are

recognised in income when they arise.

2.18 Investments

Investments are recognised and derecognised on the trade date where a purchase or sale of an

investment is under a contract whose terms require delivery of the investment within the timeframe

established by the market concerned, and are initially measured at cost, including transaction costs.

Investments in mutual funds are measured at fair value. Gains and losses arising from changes in the

fair value of these investments are recognised in other comprehensive income. Investments that are

held until they reach maturity are measured at amortised cost.

Investments in subsidiaries are recognised and held at cost and subsequently tested for impairment on

an annual basis. Where an impairment is identified, a provision for impairment is recorded against the

carrying value of the investment.

2.19 Government grants

Government grants are recognised when there is a reasonable assurance that the Group will be able

to comply with the conditions attached to the grant and that the grant will be received. Grants are

recognised in the income statement on a systematic basis as a deduction from the related category

of cost in the periods in which the expenses are recognised.

2.20 Inventories

Inventories are valued at the lower of cost and net realisable value.

Cost includes an appropriate proportion of manufacturing overheads incurred in bringing inventories to

their present location and condition and is determined using the first-in first-out method. Net realisable

value represents the estimated selling price less all estimated costs of completion and costs to be

incurred in marketing, selling and distribution.

2.21 Trade receivables and contract retention receivables

Trade and contract retention receivables are initially recorded at fair value and subsequently measured

at amortised cost as reduced by allowances for estimated irrecoverable amounts and expected credit losses.

2.22 Trade payables and contract retention payables

Trade and contract retention payables are not interest bearing and are stated at cost.

2.23 Provisions

Provisions for insurance liabilities retained in the Group’s captive insurance arrangements, legal claims,

defects and warranties, environmental restoration, onerous leases and other onerous commitments

are recognised at the best estimate of the expenditure required to settle the Group’s liability.

Provisions are recognised when: (i) the Group has a present legal or constructive obligation as a result

of a past event; (ii) it is probable that an outflow of resources will be required to settle the obligation;

and (iii) the amount of the obligation can be estimated reliably. Provisions are discounted where appropriate.

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2.24 Borrowings

Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue

costs. Premiums payable on settlement or redemption and direct issue costs are included in the

carrying amount of the instrument and are charged to the income statement on an accruals basis

using the effective interest method together with the interest payable.

2.25 Retirement benefit costs

The Group, through trustees, operates a number of defined benefit and defined contribution retirement

and other long-term employee benefit schemes, the largest of which are of the defined benefit type

and are funded. Defined benefit contributions are determined in consultation with the trustees, after

taking actuarial advice.

For defined benefit pension schemes, the cost of providing benefits recognised in the income

statement and the defined benefit obligations are determined at the reporting date by independent

actuaries, using the projected unit credit method. The liability recognised in the balance sheet

comprises the present value of the defined benefit pension obligations, determined by discounting the

estimated future cash flows using the market yield on a high-quality corporate bond, less the fair value

of the scheme assets. Actuarial gains and losses are recognised in the period in which they occur in

the statement of comprehensive income.

Contributions to defined contribution pension schemes are charged to the income statement as they

fall due.

Any surplus of deficit contributions to the Balfour Beatty Pension Fund (BBPF) and the Railways

Pension Scheme (RPS) would be recoverable by way of a refund as, according to the relevant trust

deed and rules documents, the Group has the unconditional right to the surplus and controls the

run-off of the benefit obligations once all other obligations of the BBPF and RPS have been settled.

2.26 Share-based payments

Employee services received in exchange for the grant of equity-settled and cash-settled awards are

charged to the income statement on a straight-line basis over the vesting period. For equity-settled

awards, the charge is based on the fair values of the awards at the date of grant. For cash-settled, the

charge is based on the fair value of the awards at each reporting date.

The credits in respect of the amounts charged are included within separate reserves in equity for

equity-settled awards or within accruals for cash-settled awards until such time as the awards are

exercised, when the shares are transferred or cash payments made to employees.

2.27 Financial instruments

Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group

becomes a party to the contractual provisions of the instrument.

a) Classification of financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual

arrangements. An equity instrument is any contract that evidences a residual interest in the assets of

the Group after deducting all of its liabilities. Equity instruments issued by the Company are recorded

at the proceeds received, net of direct issue costs.

b) Derivative financial instruments and hedge accounting

The Group uses derivative financial instruments to manage interest rate risk and to hedge exposures to

fluctuations in foreign currencies in accordance with its risk management policy. The Group does not

use derivative financial instruments for speculative purposes. A description of the Group’s objectives,

policies and strategies with regard to derivatives and other financial instruments is set out in Note 41.

Derivatives are initially recognised in the balance sheet at fair value on the date the derivative

transaction is entered into and are subsequently re-measured at their fair values.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are

recognised in the income statement together with any changes in the fair value of the hedged item

that are attributable to the hedged risk.

Changes in the fair value of the effective portion of derivatives that are designated and qualify as cash

flow hedges are recognised in other comprehensive income (OCI). Changes in the fair value of the

ineffective portion of cash flow hedges are recognised in the income statement. Amounts originally

recognised in OCI are transferred to the income statement when the underlying transaction occurs or,

if the transaction results in a non-financial asset or liability, are included in the initial cost of that asset

or liability.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are

recognised in the income statement as they arise.

Hedge accounting is discontinued when the hedging instrument expires, is sold, terminated, or

exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the

hedging instrument recognised in OCI is retained in equity until the hedged transaction occurs. If a

hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in OCI is

transferred to the income statement for the period.

Derivatives embedded in other financial instruments or other host contracts are treated as separate

derivatives and recorded in the balance sheet at fair value when their risks and characteristics are not

closely related to those of the host contract. Changes in the fair value of those embedded derivatives

recognised in the balance sheet are recognised in the income statement as they arise.

c) PPP concession companies

Assets constructed by PPP concession companies are classified principally as financial assets

measured at fair value through OCI.

In the construction phase, income is recognised by applying an attributable profit margin to the

construction costs representing the fair value of construction services performed. In the operational

phase, income is recognised by allocating a proportion of total cash receivable over the life of the

project to service costs by means of a deemed rate of return on those costs. The residual element

of projected cash is allocated to the financial asset using the effective interest rate method, giving rise

to interest income.

Due to the nature of the contractual arrangements, the projected cash flows can be estimated with

a high degree of certainty.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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2.27 Financial instruments continued

c) PPP concession companies continued

In the construction phase, the fair value of the Group’s PPP financial assets is determined by applying

an attributable profit margin to the construction costs representing the fair value of construction

services performed. In the operational phase, fair value is determined by discounting the future cash

flows allocated to the financial asset using discount rates based on long-term gilt rates adjusted for the

risk levels associated with the assets, with market-related movements in fair value recognised in OCI.

In both instances, the fair value is reduced by allowances for estimated irrecoverable amounts and

expected credit losses. Amounts originally recognised in OCI are transferred to the income statement

upon disposal of the asset.

2.28 Judgements and key sources of estimation uncertainty

The preparation of consolidated financial statements under IFRS requires management to make

judgements, estimates and assumptions that affect amounts recognised for assets and liabilities at the

reporting date and the amounts of revenue and expenses incurred during the reporting period. Actual

outcomes may differ from these judgements, estimates and assumptions.

The judgements, estimates and assumptions that have the most significant effect on the carrying

value of assets and liabilities of the Group as at 31 December 2025 are discussed below.

a) Revenue and margin recognition (estimate)

The Group’s revenue recognition and margin recognition policies, which are set out in Notes 2.4

and 2.5, are central to how the Group values the work it has carried out in each financial year.

These policies require forecasts to be made of the outcomes of long-term construction services and

support services contracts, which require estimates to be made of both cost and income recognition

on each contract. On the cost side, estimates of forecasts are made on the final out-turn of each

contract in addition to potential costs to be incurred for any maintenance and defects liabilities. On the

income side, estimates are made on variations to consideration which typically include variations due

to changes in scope of work, recoveries of claim income from customers, and potential liquidated

damages that may be levied by customers. On cost reimbursable contracts there are also estimates

required on the level of disallowable costs which requires an assessment of whether costs are

recoverable under the terms of the contract and therefore should be recognised as income. Estimates

are reviewed regularly throughout the contract life based on latest available information and

adjustments are made where necessary. The Group continues to regularly assess these estimates.

As at 31 December 2025, the Group’s contract assets, contract liabilities and contract provisions

amounted to £238m, £1,063m and £514m respectively as set out in Notes 24 and 27. The Group has

considered the nature of the estimates involved in deriving these balances and concluded that it is

possible, on the basis of existing knowledge, that outcomes within the next financial year may be

different from the Group’s assumptions applied as at 31 December 2025 and could require a material

adjustment to the carrying amounts of these assets and liabilities in the next financial year. However,

due to the level of uncertainty, combination of cost and income variables and timing across a large

portfolio of contracts (in excess of 1,000) at different stages of their contract life, it is impracticable to

provide a quantitative analysis of the aggregated estimates that are applied at a portfolio level.

Within this portfolio, there are a limited number of long-term contracts where the Group has

incorporated significant estimates over contractual entitlements relating to recoveries of claim income

from customers, suppliers and liquidated damages levied by the customer. This is in the Construction

Services segment. These recoveries have been recognised at the amount that is considered highly

probable not to significantly reverse. However, there are a host of factors affecting potential outcomes

in respect of these entitlements which could result in a range of reasonably possible outcomes on

these contracts in the following financial year, ranging from a gain of £82m to a loss of £44m. The

Directors have assessed the range of reasonably possible outcomes on these limited number of contracts

based on facts and circumstances that were present and known at the balance sheet date. As with any

contract applying long-term contract accounting, these contracts are also affected by a variety of

uncertainties that depend on future events, and so often need to be revised as contracts progress.

b) Non‑underlying items (judgement)

Non-underlying items are items of financial performance which the Group believes should be

presented separately on the face of the income statement to assist in understanding the underlying

financial performance achieved by the Group. Determining whether an item is part of underlying items

or non-underlying items requires judgement. A total non-underlying profit after tax of £25m (2024:

£49m loss) was credited to the income statement for the year ended 31 December 2025. Refer to

Note 10.

c) Financial assets measured at fair value through OCI (estimate)

At 31 December 2025, £848m (2024: £1,120m) of PPP financial assets constructed by the Group’s

subsidiary, joint venture and associate companies were classified as financial assets measured at fair

value through OCI. In the operational phase the fair value of these financial assets is measured at each

reporting date by discounting the future value of the cash flows allocated to the financial asset. A range

of discount rates is used from 7.2% to 12.1% (2024: 5.2% to 63.4%), which reflects the prevailing

risk-free interest rates and the different risk profiles of the various concessions. These represent key

sources of estimation uncertainty. Refer to Note 41.

A £8m gain was taken to other comprehensive income in 2025 (2024: £50m loss) and a cumulative fair

value gain of £156m had arisen on these financial assets as a result of market-related movements in

the fair value of these financial assets at 31 December 2025 (2024: £148m).

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2.28 Judgements and key sources of estimation uncertainty continued

d) Contract provisions (estimate)

Contract provisions are liabilities of uncertain timing or amount and therefore in making a reliable

estimate of the quantum and timing of liabilities estimates are applied and re-evaluated at each

reporting date. The range of potential outcomes on contract provisions as a result of uncertain future

events could result in a materially positive or negative swing to profitability and cash flow.

The Group has considered the nature of these estimates and concluded that it is possible, on the basis

of existing knowledge, that outcomes within the next financial year may be different from the Group’s

assumptions applied as at 31 December 2025 and could require a material adjustment to the carrying

amounts of assets and liabilities in the next financial year. As disclosed in Note 27, the majority of the

Group’s provision balance relates to contract provisions, which include loss provisions, defect and

warranty provisions, where estimates are made around forecast costs, timing and whether it is

probable there will be an outflow of future economic benefit. Contract loss provisions may also include

estimates around variable consideration as disclosed in Note 2.28(a). However, due to the level of

uncertainty, combination of variables and timing across a large portfolio of complex contracts at

different stages of their contract life, it is impracticable to provide a quantitative analysis of the

aggregated estimates that are applied at a portfolio level.

To the extent that the sensitivities disclosed in Note 2.28(a) affect a loss-making contract, this will

have an impact on the Group’s provisions in the next financial year.

The Group also continues to provide for a number of fire safety-related claims received by the Group as

part of its defects provision. A provision is made when there is a probable obligation and outflow, and

the Group can reliably estimate the cost relating to its obligation. If costs are considered possible or

cannot be reliably estimated, then they are considered to be contingent liabilities (see Note 38).

Provisions of this nature are inherently uncertain as the estimated costs are based on a number of key

estimates and assumptions which include, but are not limited to, the extent of defects that may exist,

the cost of rectifying these defects and the consideration of what was considered to comply with

building safety regulations at the time these buildings were constructed. These estimates are also

inherently uncertain due to the highly complex and bespoke nature of each building. The Directors have

used various externally available information and internal assessments as a basis for the estimated

remedial costs for the fire safety claims received to date. The actual costs will ultimately be subject to

the progression of investigative works, remedial works carried out, settlements of ongoing claims, and

the evolution of current legislation and regulation which will impact the scope of any remediation

works required, and therefore it is impracticable to provide a quantitative analysis of the aggregated

estimates across the Group for these fire safety-related claims. There are also potential avenues to

recovering a portion of these costs from third parties, which have not been recognised by the Group at

this stage.

Within the fire defect population, there are claims received under the retrospective Building Safety Act

(BSA) legislation introduced in 2022 (refer to Note 10.2.2) for which the Group is carrying a defect

provision amounting to £85m at 31 December 2025 (2024: £82m). If the forecast remediation costs

relating to BSA claims received to date were 25% higher / lower than provided, the pre-tax non-

underlying charge in the Group’s income statement would increase / decrease by £21m. However, if

further BSA claims are notified, this could also increase the required provision, but the potential

quantity and timing of this change cannot be readily determined without further claims being made

against the Group and, subsequently, the necessary investigative work being conducted on these

claims. The scope of buildings and remediation works to be considered may also change as legislation

and regulations continue to evolve relating to BSA.

The Group continues to regularly assess these estimates.

e) Retirement benefit obligations (estimate)

Details of the Group’s defined benefit pension schemes are set out in Note 31, including tables showing

the sensitivity of the pension scheme obligations and assets to different actuarial assumptions.

At 31 December 2025, the net retirement benefit liabilities recognised on the Group’s balance sheet

were £48m (2024: £2m net asset). The effects of changes in the actuarial assumptions underlying the

schemes’ obligations (including inflation and mortality) and discount rates and the differences between

expected and actual returns on the schemes’ assets are classified as actuarial gains and losses. During

2025, the Group recognised net actuarial losses of £62m (2024: £102m) in OCI, including its share of

the actuarial gains and losses arising in joint ventures and associates.

3 Exchange rates

The following key exchange rates were applied in these financial statements:

Average rates
£1 buys	2025	2024	Change
US$	1.32	1.28	3.1%
HK$	10.25	9.98	2.7%

Closing rates
£1 buys	2025	2024	Change
US$	1.35	1.25	8.0%
HK$	10.47	9.73	7.6%

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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4 Revenue

4.1 Nature of services provided

4.1.1 C onstruc tion Ser vices

The Group’s Construction Services segment encompasses activities in relation to the physical construction of assets provided to public and private customers. Revenue generated in this segment is measured

over time as control passes to the customer as the asset is constructed. Progress is measured by reference to the cost incurred on the contract to date compared to the contract’s end of job forecast (the input

method). Payment terms are based on a schedule of value that is set out in the contract and fairly reflect the timing and performance of service delivery. Contracts with customers are typically accounted for as

one performance obligation (PO).

Types of assets	Typical contract length	Nature, timing of satisfaction of performance obligations and significant payment terms
Buildings	12 to 36 months	The Group constructs buildings which include commercial, healthcare, education, retail and residential assets. As part of its construction services,
		the Group provides a range of services including design and/or build, mechanical and electrical engineering, shell and core and/or fit-out and interior
		refurbishment. The Group’s customers in this area are a mix of private and public entities.
		The contract length depends on the complexity and scale of the building and contracts entered into for these services are typically fixed price.
		In most instances, the contract with the customer is assessed to only contain one PO as the services provided by the Group, including those where
		the Group is also providing design services, are highly interrelated. However, for certain types of contracts, services relating to fit-out and interior
		refurbishment may sometimes be assessed as a separate PO.
Infrastructure	1 to 3 months for small-scale	The Group provides construction services for three main types of infrastructure assets: highways, railways and other large-scale infrastructure assets
	infrastructure works	such as waste, water and energy plants.
	24 to 60 months for large-scale	Highways represent the Group’s activities in constructing motorways in the UK, US and Hong Kong. This includes activities such as design and
	complex construction	construction of roads, widening of existing motorways or converting existing motorways. The main customers are government bodies.
		Railway construction services include design and managing the construction of railway systems delivering major multi-disciplinary projects, track
		work, electrification and power supply. The Group serves both public and private railways including high-speed passenger railways, freight and mixed
		traffic routes, dense commuter networks, metros and light rail.
		Other infrastructure assets include construction, design and build services on large-scale complex assets predominantly servicing the waste, water
		and energy sectors.
		Contracts entered into relating to these infrastructure assets can take the form of fixed-price, cost-plus or target-cost contracts with shared pain/gain
		mechanisms. Contract lengths vary according to the size and complexity of the asset build and can range from a few months for small-scale
		infrastructure works to four to five years for large-scale complex construction works.
		In most cases, the contract itself represents a single PO where only the design and construction elements are contracted. In some instances, the
		contract with the customer will include maintenance of the constructed asset. The Group assesses the maintenance element as a separate PO and
		revenue from this PO is recognised in the Support Services segment. Refer to Note 4.1.2.

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4 Revenue continued

4.1 Nature of services provided continued

4.1.2 Support Services

The Group’s work in this segment supports existing assets through maintaining, upgrading and managing services across utilities and infrastructure assets. Revenue generated in this segment is measured over

time as control passes to the customer as and when services are provided. Progress is measured by reference to the cost incurred on the contract to date compared to the contract’s end of job forecast (the

input method). Payments are structured as milestone payments set out in the respective contracts.

Types of assets	Nature, timing of satisfaction of performance obligations and significant payment terms
Utilities	Within the Group’s services contracts, the Group provides support services to various types of utility assets.
	For contracts servicing power transmission and distribution assets, the Group constructs and maintains electricity networks, including replacement or new build of overhead lines,
	underground cabling, cable tunnels and offshore wind farm maintenance. Contracts entered into are fixed-price, cost-plus or target cost with shared pain/gain mechanisms. Contract
	lengths can vary from 12 to 36 months. Each contract is normally assessed to contain one PO. However, where a contract contains both a construction phase and a maintenance
	phase, these are assessed to contain two separate POs.
Infrastructure	The Group provides maintenance, asset and network management and design services in respect of highways, railways and other publicly available assets. The customers in this area
	of the Group are mainly government bodies. Types of contract include a fixed schedule of rates, fixed-price, target-cost arrangements and cost-plus.
	Contract terms range from 1 to 25 years. Where contracts include a lifecycle element, this is accounted for as a separate PO and recognised when the work is delivered.

4.1.3 Infrastructure Investments

The Group invests directly in a variety of assets, predominantly consisting of infrastructure assets where there are opportunities to manage the asset upon completion of construction. The Group also invests in

real estate-type assets, in particular private residential and student accommodation assets. Revenue generated in this segment is from the provision of construction, maintenance and management services and

also from the recognition of rental income. The Group’s strategy is to hold these assets until optimal values are achieved through disposal of mature assets.

Types of services	Nature, timing of satisfaction of performance obligations and significant payment terms
Service concessions	The Group operates a UK and US portfolio of service concession assets comprising assets in the roads, healthcare, student accommodation, biomass and waste and offshore
	transmission sectors. The Group accounts for these assets under IFRIC 12 Service Concession Arrangements.
	Where the Group constructs and maintains these assets, the two services are deemed to be separate performance obligations and accounted for separately. If the maintenance phase
	includes a lifecycle element, this is considered to be a separate PO.
	Contract terms can be up to 40 years. The Group recognises revenue over time using the input method. Consideration is paid through a fixed unitary payment charge spread over the
	life of the contract.
	Revenue from this service is presented across Buildings, Infrastructure or Utilities in Note 4.2.
Management services	The Group provides real estate management services such as property development and asset management services. Contract terms can be up to 50 years. The Group recognises
	revenue over time as and when service is delivered to the customer.
	Revenue from this service is presented within Buildings in Note 4.2.
Housing development	The Group also develops housing units on land that is owned by the Group. Revenue is recognised on the sale of individual units at the point in time when control of the asset is
	transferred to the purchaser. This is deemed to be when an unconditional sale is achieved.
	Revenue from this service is presented within Buildings in Note 4.2.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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4 Revenue continued

4.2 Disaggregation of revenue

The Group presents a disaggregation of its revenue according to the primary geographical markets in which the Group operates as well as the types of assets serviced by the Group. The nature of the various

services provided by the Group is explained in Note 4.1. This disaggregation of revenue is also presented according to the Group’s reportable segments as described in Note 5.

For the year ended 31 December 2025

			Revenue by primary geographical markets					Revenue by types of assets serviced
		United	United	Rest of
		Kingdom	States	world	Total	Buildings	Infrastructure	Utilities	Other	Total
		£m	£m	£m	£m	£m	£m	£m	£m	£m
Construction	Revenue including share of joint ventures and associates	3,112	4,509	1,090	8,711	4,966	3,130	508	107	8,711
Services	Group revenue	3,112	4,477	–	7, 589	4,281	2,695	506	107	7,589
Support Services	Revenue including share of joint ventures and associates	1,423	–	4	1,427	14	743	631	39	1,427
	Group revenue	1,423	–	4	1,427	14	743	631	39	1,427
Infrastructure	Revenue including share of joint ventures and associates	243	382	4	629	533 +	87	8	1	629
Investments	Group revenue	137	334	2	473	470 +	3	–	–	473
	Revenue including share of joint ventures and
Total revenue	associates	4,778	4,891	1,098	10,767	5,513	3,960	1,147	147	10,767
	Group revenue	4,672	4,811	6	9,489	4,765	3,441	1,137	146	9,489

+ Includes rental income of £57m including share of joint ventures and associates or £32m excluding share of joint ventures and associates.

			Timing of revenue recognition
	Construction	Support	Infrastructure
	Services	Services	Investments	Total
	£m	£m	£m	£m
Over time	8,706	1,425	594	10,725
At a point in time	5	2	35	42
Revenue including share of joint ventures and associates	8,711	1,427	629	10,767
Over time	7, 584	1,425	438	9,447
At a point in time	5	2	35	42
Group revenue	7,58 9	1,427	473	9,489

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4 Revenue continued

4.2 Disaggregation of revenue continued

For the year ended 31 December 2024

			Revenue by primary geographical markets					Revenue by types of assets serviced
		United	United	Rest of
		Kingdom	States	world	Total	Buildings	Infrastructure	Utilities	Other	Total
		£m	£m	£m	£m	£m	£m	£m	£m	£m
Construction	Revenue including share of joint ventures and associates	3,010	3,638	1,551	8,199	4,178	3,465	417	139	8,199
Services	Group revenue	3,010	3,619	1	6,630	3,420	2,657	414	139	6,630
Support Services	Revenue including share of joint ventures and associates	1,209	–	1	1,210	12	782	385	31	1,210
	Group revenue	1,209	–	1	1,210	12	782	385	31	1,210
Infrastructure	Revenue including share of joint ventures and associates	201	401	4	606	445 +	153	8	–	606
Investments	Group revenue	99	295	–	394	390 +	4	–	–	394
Total revenue	Revenue including share of joint ventures and associates	4,420	4,039	1,556	10,015	4,635	4,400	810	170	10,015
	Group revenue	4,318	3,914	2	8,234	3,822	3,443	799	170	8,234

+ Includes rental income of £48m including share of joint ventures and associates or £26m excluding share of joint ventures and associates.

			Timing of revenue recognition
	Construction	Support	Infrastructure
	Services	Services	Investments	Total
	£m	£m	£m	£m
Over time	8,19 4	1,209	587	9,990
At a point in time	5	1	19	25
Revenue including share of joint ventures and associates	8,19 9	1,210	606	10,015
Over time	6,625	1,209	375	8,209
At a point in time	5	1	19	25
Group revenue	6,630	1,210	394	8,234

4.3 Transaction price allocated to the remaining performance obligations (excluding joint ventures and associates)

			2028
	2026	2027	onwards	Total
	£m	£m	£m	£m
Construction Services	6,573	3,472	5,965	16,010
Support Services	1,098	826	1,710	3,634
Infrastructure Investments	141	63	2,329	2,533
Total transaction price allocated to remaining performance obligations	7,812	4,361	10,004	22,177

The total transaction price allocated to the remaining performance obligations represents the contracted revenue to be earned by the Group for distinct goods and services which the Group has promised to

deliver to its customers. These include promises which are partially satisfied at the period end or those which are unsatisfied but which the Group has committed to providing. In deriving this transaction price,

any element of variable revenue is estimated at a value that is highly probable not to reverse in the future. The transaction price above does not include any estimated revenue to be earned on framework

contracts for which a firm order or instruction has not been received from the customer.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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5 Segment analysis

Reportable segments of the Group:

@ Construction Services – activities resulting in the physical construction of an asset;

@ Support Services – activities which support existing assets or functions such as asset maintenance and refurbishment; and

@ Infrastructure Investments – acquisition, operation and disposal of infrastructure assets such as roads, hospitals, student accommodation, military housing, multifamily residences, offshore transmission

networks, waste and biomass and other concessions. This segment also includes the Group’s housing development division.

5.1 Total Group

			2025					2024
	Construction	Support	Infrastructure	Corporate		Construction	Support	Infrastructure	Corporate
	Services	Services	Investments	activities	Total	Services	Services	Investments	activities	Total
Income statement – performance by activity	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Revenue including share of joint ventures and associates	8,711	1,427	629	–	10,767	8,19 9	1,210	606	–	10,015
Share of revenue of joint ventures and associates	(1,122)	–	(156)	–	(1,278)	(1,569)	–	(212)	–	(1,781)
Group revenue	7,589	1,427	473	–	9,489	6,630	1,210	394	–	8,234
Group operating profit/(loss) 1	117	122	(5)	(46)	188	118	93	17	(39)	189
Share of results of joint ventures and associates	54	–	10	–	64	41	–	18	–	59
Profit/(loss) from operations 1	171	122	5	(46)	252	159	93	35	(39)	248
Non-underlying items:
– amortisation of acquired intangible assets	(1)	–	(2)	–	(3)	(1)	–	(3)	–	(4)
– provision recognised in relation to claims made under the Building Safety Act	(37)	–	–	–	(37)	(83)	–	–	–	(83)
– net release/(charge) recognised in relation to a legacy claim
received for a project completed in 2012 in Texas	49	–	–	–	49	(52)	–	–	–	(52)
– gain on disposal of Omnicom Balfour Beatty	–	23	–	–	23	–	–	–	–	–
– net release of provisions relating to Rail Germany	–	–	–	–	–	21	–	–	–	21
– recognition of insurance recovery in relation to rectification
works on a development in London	–	–	–	–	–	43	–	–	–	43
	11	23	(2)	–	32	(72)	–	(3)	–	(75)
Profit/(loss) from operations	182	145	3	(46)	284	87	93	32	(39)	173
Investment income					80					82
Finance costs					(41)					(41)
Profit before taxation					323					214

1 Before non-underlying items (Notes 2.10 and 10).

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5 Segment analysis continued

5.1 Total Group continued

			2025					2024
	Construction	Support	Infrastructure	Corporate		Construction	Support	Infrastructure	Corporate
	Services	Services	Investments	activities	Total	Services	Services	Investments	activities	Total
Assets and liabilities by activity	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Contract assets	134	67	37	–	238	116	70	43	–	229
Contract liabilities – current	(742)	(319)	(1)	–	(1,062)	(506)	(188)	(3)	–	(697)
Inventories	71	41	43	–	155	47	48	63	–	158
Trade and other receivables – current	1,005	171	43	34	1,253	939	99	22	39	1,099
Trade and other payables – current	(1,627)	(212)	(61)	(57)	(1,957)	(1,470)	(198)	(59)	(51)	(1,778)
Provisions – current	(228)	(19)	(4)	(15)	(266)	(213)	(6)	(3)	(17)	(239)
Working capital *	(1,387)	(271)	57	(38)	(1,639)	(1,087)	(175)	63	(29)	(1,228)
Total assets	2,223	624	1,267	1,979	6,093	2,209	520	1,309	1,594	5,632
Total liabilities	(3,061)	(723)	(699)	(458)	(4,941)	(2,635)	(524)	(683)	(660)	(4,502)
Net assets	(838)	(99)	568	1,521	1,152	(426)	(4)	626	934	1,130

* Includes non-operating items and current working capital.

			2025					2024
	Construction	Support	Infrastructure	Corporate		Construction	Support	Infrastructure	Corporate
	Services	Services	Investments	activities	Total	Services	Services	Investments	activities	Total
Other information	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Capital expenditure on property, plant and equipment (Note 17)	10	22	–	17	49	7	18	–	3	28
Capital expenditure on service concession contract assets
(Note 16)	–	–	79	–	79	–	–	56	–	56
Depreciation (Note 17, Note 18 and Note 19)	20	69	4	9	102	23	57	3	9	92
Gain on disposals of interests in investments (Note 35.2/35.3)	–	–	32	–	32	–	–	43	–	43
Gain on disposals of interests in investments within joint ventures
and associates (Note 35.2/35.3)	–	–	4	–	4	–	–	–	–	–

		2025				2024
	United	United	Rest of		United	United	Rest of
	Kingdom	States	world	Total	Kingdom	States	world	Total
	2025	2025	2025	2025	2024	2024	2024	2024
Performance by geographic destination	£m	£m	£m	£m	£m	£m	£m	£m
Revenue including share of joint ventures and associates	4,778	4,891	1,098	10,767	4,420	4,039	1,556	10,015
Share of revenue of joint ventures and associates	(106)	(80)	(1,092)	(1,278)	(102)	(125)	(1,554)	(1,781)
Group revenue	4,672	4,811	6	9,489	4,318	3,914	2	8,234

Non-current assets excluding financial assets, deferred tax assets and retirement

benefit assets 1,099 877 84 2,060 1,014 896 90 2,000

Major customers

Included in Group revenue are revenues of £2,687m (2024: £2,291m) from the US Government and £3,504m (2024: £3,475m) from the UK Government, which are the Group’s two largest customers, through

multiple central and regional bodies. These revenues are included in the results across all three reported segments.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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5 Segment analysis continued

5.2 Infrastructure Investments

		2025			2024
		Share of joint			Share of joint
		ventures and			ventures and
		associates			associates
	Group	(Note 20.2) +	Total	Group	(Note 20.2) +	Total
	2025	2025	2025	2024	2024	2024
	£m	£m	£m	£m	£m	£m
Underlying profit/(loss) from operations 1
UK ^	8	–	8	(2)	9	7
North America	(18)	6	(12)	2	9	11
Gain on disposals of interests in investments (Note 35.2/35.3)	32	4	36	43	–	43
	22	10	32	43	18	61
Bidding costs and overheads	(27)	–	(27)	(26)	–	(26)
	(5)	10	5	17	18	35
Net assets/(liabilities)
UK ^	499	92	591	478	105	583
North America	215	173	388	193	185	378
	714	265	979	671	290	961
Non-recourse borrowings net of associated cash and cash equivalents (Note 28)	(411)	–	(411)	(335)	–	(335)
Total Infrastructure Investments net assets	303	265	568	336	290	626

+ The Group’s share of the results of joint ventures and associates is disclosed net of investment income, finance costs and taxation.

^ Including Ireland.

1 Before non-underlying items (Notes 2.10 and 10).

6 Profit/(loss) from operations

6.1 Profit/(loss) from operations is stated after charging/(crediting)

	2025	2024
	£m	£m
Depreciation of property, plant and equipment	30	31
Depreciation of right-of-use assets	68	60
Depreciation of investment properties	4	1
Amortisation of other intangible assets	9	10
Amortisation of contract fulfilment assets	12	27
Net (credit) of trade receivables impairment provision	–	(6)
Profit on disposal of property, plant and equipment	3	(2)
Government grant income	12	(9)
Cost of inventory recognised as an expense	184	141
Auditor’s remuneration	6	6

6.2 Analysis of auditor’s remuneration

	2025	2024
	£m	£m
Services as auditor to the Company	0.8	0.8
Services as auditor to Group subsidiaries	4.3	4.4
Total audit fees	5.1	5.2
Audit-related assurance fees	0.6	0.6
Other assurance fees *	0.1	–
Total non-audit fees	0.7	0.6
Total fees in relation to audit and other services	5.8	5.8

* Other assurance fees relate to the limited assurance review over the reporting of selected sustainability data including the Group’s

Scope 1 and 2 greenhouse gas emissions, emissions intensity and social value.

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7 Employee costs

7.1 Group

	2025	2024
Employee costs during the year	£m	£m
Wages and salaries	1,427	1,398
Redundancy costs	7	5
Social security costs	125	101
Pension costs (Note 31)	67	59
Share-based payments (Note 36)	38	26
	1,664	1,589

	2025	2024
Average number of Group employees	Number	Number
Construction Services	12,221	11,971
Support Services	5,130	4,751
Infrastructure Investments	1,777	1,695
Corporate	162	151
	19,290	18,568

Detailed disclosures of items of remuneration, including those accruing under the Company’s

equity-settled share-based payment arrangements, can be found within the Remuneration report on

pages 130 to 160.

7.2 Company

The Company did not have any employees and did not incur any employee costs in the year (2024:

£nil). Balfour Beatty Group Employment Ltd, which was established in February 2013, remains the

employing entity for the Balfour Beatty Group’s UK employees.

8 Investment income

	2025	2024
	£m	£m
Subordinated debt interest receivable	26	17
Interest receivable on PPP financial assets (Note 22)	–	2
Interest receivable on other infrastructure concession assets	1	–
Interest received on bank deposits	51	40
Other interest receivable and similar income	1	2
Impairment reversal of joint ventures and associates loans	–	17
Net finance income on pension scheme assets and obligations (Note 31.2)	1	4
	80	82

9 Finance costs

	2025	2024
	£m	£m
Non-recourse borrowings
– bank loans and overdrafts	14	12
US private placement
– finance cost	10	10
Interest on lease liabilities (Note 29)	9	7
Fair value loss on investment asset (Note 21)	–	2
Other interest payable
– committed facilities	2	2
– letter of credit fees	–	1
– other finance charges	4	4
Impairment of joint ventures and associates
– loans	1	2
– accrued interest	1	1
	41	41

The net impairment of loans to joint ventures and associates and accrued interest receivable of £2m

(2024: £14m net impairment reversal) relates to expected credit loss assessments performed. All of

the net impairment reversals relate to subordinated debt and accrued interest receivable from joint

ventures and associates held within the Infrastructure Investments segment.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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10 Non-underlying items

		2025	2024
		£m	£m
Items credited to/(charged against) profit
10.1	Amortisation of acquired intangible assets	(3)	(4)
10.2	Other non-underlying items:
	– net release/(charge) recognised in relation to a claim received for a legacy project completed in 2012 in Texas	49	(52)
	– provision recognised in relation to claims made under the Building Safety Act	(37)	(83)
	– gain on disposal of Omnicom Balfour Beatty	23	–
	– recognition of insurance recovery in relation to rectification works on a development in London	–	43
	– net release of provisions relating to Rail Germany	–	21
	Total other non-underlying items	35	(71)
Credited to/(charged against) profit before taxation		32	(75)
10.3	Tax (charge)/credit:
	– tax on amortisation of acquired intangible assets	2	1
	– tax on other items above	(9)	25
	Total tax (charge)/credit	(7)	26
Credited to/(charged against) profit for the year		25	(49)

10.1 The amortisation of acquired intangible assets comprises: customer contracts £2m (2024: £3m); and customer relationships £1m (2024: £1m).

The charge was recognised in the following segments: Construction Services £1m (2024: £1m); and Infrastructure Investments £2m (2024: £3m).

10. 2.1 In 2024 the Group recognised a provision of £52m for a claim received from the North Texas Tollway Authority (NTTA) on a project to provide design and build services in relation to the extension

of NTTA’s President George Bush Turnpike Highway (SH161 in Texas) through a joint operation formed with Fluor Enterprise Inc. in which the Group owned a 40% share. This project completed in 2012.

This provision, net of insurance recoveries, represented damages awarded to NTTA through a jury verdict in November 2024, and also included pre-judgement interest and legal costs. This charge was

recognised in the Construction Services segment in 2024 and included within the Group’s non-underlying results due to the size of the provision.

The Group maintained the view that these damages are a result of design elements of the contract which were performed by subcontractors to the joint operation. In 2025, an all-party settlement was reached

between NTTA and the joint operation as well as its design subcontractors. The Group’s share of the settlement was fully funded by its insurers resulting in no cost to the Group. As such, the Group has

released this provision in full after taking into account legal cost incurred.

10.2.2 In 2024, following further developments and clarifications in the legal landscape of the Building Safety Act (BSA), introduced in 2022, progression of the Group’s investigation and due diligence as well

as adjudications on claims received to date, the Group reassessed its provision for BSA claims which resulted in an increase in the provision of £83m. The provision did not include potential recoveries from third

parties. The increase was recognised in non-underlying due to its size and the nature of the cost, which arose from a change in legislation.

In 2025, the Group increased its provision by £37m as a result of new claims received in the period, settlements and reassessments to previously provided claims, together with legal costs incurred. Consistent

with the treatment adopted in 2024, this charge was recognised within non-underlying and in the Construction Services segment.

10.2.3 On 1 August 2025, the Group completed the disposal of Omnicom Balfour Beatty, its specialist rail measurement hardware and intelligent software business, for a consideration of £24m to Hitachi Rail.

After deducting cost of disposal, the Group recorded a gain on disposal of £23m within its non-underlying results in the year. Refer to Note 35.2.

The gain on disposal has been recognised in the Support Services segment.

10. 3.1 The amortisation of acquired intangible assets gave rise to a tax credit of £2m (2024: £1m credit).

10.3.2 The remaining non-underlying items recognised in the Group’s operating profit gave rise to a current tax charge of £9m (2024: £25m credit), of which £12m charge relates to the net release recognised

in relation to a legacy project completed in 2012 (SH161 in Texas), £9m credit relating to the increase in provision for BSA claims and £6m charge relates to the disposal of Omnicom Balfour Beatty.

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11 Income taxes

11.1 Income tax charge/(credit)

		2025		2024
		Non-underlying
	Underlying	items
	items 1	(Note 10)	Total	Total
	£m	£m	£m	£m
Total UK tax	48	(3)	45	29
Total non-UK tax	4	10	14	7
Total tax charge x	52	7	59	36
UK current tax
– current tax	28	(3)	25	7
– adjustments in respect of previous periods	3	–	3	5
Non-UK current tax	31	(3)	28	12
– current tax	3	–	3	14
– adjustments in respect of previous periods	(1)	–	(1)	2
	2	–	2	16
Total current tax	33	(3)	30	28
UK deferred tax
– origination and reversal of temporary differences	22	–	22	22
– adjustments in respect of previous periods	(5)	–	(5)	(5)
Non-UK deferred tax	17	–	17	17
– origination and reversal of temporary differences	1	11	12	(6)
– adjustments in respect of previous periods	1	(1)	–	(3)
	2	10	12	(9)
Total deferred tax	19	10	29	8
Total tax charge x	52	7	59	36

x Excluding joint ventures and associates.

1 Before non-underlying items (Notes 2.10 and 10).

The Group has recognised a £7m tax charge (2024: £26m credit) within non-underlying items in the

year. Refer to Note 10.3.1 and 10.3.2.

The Group tax charge excludes amounts for joint ventures and associates (refer to Note 20.2), except

where tax is levied at the Group level.

In addition to the Group tax charge, tax of £11m has been credited (2024: £36m) directly to Group

other comprehensive income, comprising: a tax credit of £15m for subsidiaries (2024: £26m); and a tax

charge in respect of joint ventures and associates of £4m (2024: £10m credit). A tax credit of £5m

(2024: £4m) has been recognised directly in Group equity relating to share-based payments comprising

a current tax credit of £3m (2024: £2m) and a deferred tax credit of £2m (2024: £2m). Refer to

Note 33.1.

11.2 Income tax charge/(credit) reconciliation

	2025	2024
	£m	£m
Profit before taxation including share of results from joint ventures and associates	324	214
Less: share of results of joint ventures and associates	(64)	(59)
Profit before taxation	260	155
Add: non-underlying items (credited)/charged excluding share of joint
ventures and associates	(33)	75
Underlying profit before taxation for subsidiaries 1	227	230
Tax on underlying profit before taxation at standard UK corporation
tax rate of 25% (2024: 25%)	57	58
Adjusted for the effects of:
Expenses not deductible for tax purposes and other permanent items	6	–
Non-taxable disposals	(6)	–
Tax levied at Group level on share of joint ventures’ and associates’ profits #	5	3
Utilisation of other losses not previously recognised	(10)	(1)
Current year losses not recognised	–	1
Effect of tax rates in non-UK jurisdictions	2	2
Adjustments in respect of previous periods	(2)	(1)
Total tax charge on underlying profit	52	62
Add: tax charge/(credit) in non-underlying items (Note 10.3)	7	(26)
Total tax charge on profit from operations	59	36

# These are mainly in connection with US joint ventures and associates where tax is levied at the Group level rather than within the

share of joint ventures and associates.

1 Before non-underlying items (Notes 2.10 and 10).

The Organisation for Economic Co-operation and Development’s (OECD) released Pillar Two model

rules in December 2021 introducing a global minimum tax rate of 15% to address the tax concerns

about uneven profit distribution and tax contributions of large multinational corporations.

The Pillar Two top-up tax rules were substantially enacted in the UK in 2023 with application from

1 January 2024. Having carried out a detailed assessment of the Pillar 2 rules and its application, the

Group has determined that no top-up is owed for any of its operations globally, as it is subject to taxes

exceeding the global minimum in every jurisdiction in which it operates.

The Group has applied the temporary mandatory relief from deferred tax accounting for the impacts of

any top-up tax and accounts for it as a current tax when it is incurred.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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12 Earnings per share

Earnings

	2025		2024
	Basic	Diluted	Basic	Diluted
	£m	£m	£m	£m
Earnings	263	263	178	178
Amortisation of acquired intangible assets –
including tax credit of £2m (2024: £1m credit)	1	1	3	3
Other non-underlying items – including tax
charge of £9m (2024: £25m credit)	(26)	(26)	46	46
Underlying earnings	238	238	227	227

	2025		2024
	Basic	Diluted	Basic	Diluted
	m	m	m	m
Weighted average number of ordinary shares	499	505	521	528

The basic earnings per ordinary share is calculated by dividing the profit for the year attributable to

equity holders by the weighted average number of ordinary shares outstanding during the year,

excluding treasury shares and shares held in the Employee Share Ownership Trust.

The diluted earnings per ordinary share uses an adjusted weighted average number of shares and

includes shares that are potentially outstanding in relation to the equity-settled share-based payment

arrangements detailed in Note 36.

Potential dilutive effect of ordinary shares issuable under equity-settled share-based payment

arrangements is 6m (2024: 7m).

Earnings per share

	2025		2024
	Basic	Diluted	Basic	Diluted
	pence	pence	pence	pence
Earnings per ordinary share	52.6	52.0	34.2	33.7
Amortisation of acquired intangible assets
after tax	0.3	0.2	0.6	0.6
Other non-underlying items after tax	(5.3)	(5.2)	8.8	8.7
Underlying earnings per ordinary share	47.6	47.0	43.6	43.0

13 Dividends

	2025		2024
	Per share	Amount	Per share	Amount
	Pence	£m	Pence	£m
Proposed dividends for the year
Interim – current year	4.2	20	3.8	19
Final – current year	9.8	47 &	8.7	44
	14 .0	67	12.5	63
Recognised dividends for the year
Final – prior year		44		42
Interim – current year		20		19
		64		61

& Amount dependent on number of shares on the register on 15 May 2026.

Subject to approval at the Annual General Meeting on 7 May 2026, the final 2025 dividend will be paid

on 1 July 2026 to holders on the register on 15 May 2026 by direct credit or, where no mandate has

been given, by cheque posted by 1 July 2026. The ordinary shares will be quoted ex-dividend on

14 May 2026. The last date for Dividend Reinvestment Plan (DRIP) elections will be 10 June 2026.

14 Intangible assets – goodwill

		Accumulated
		impairment	Carrying
	Cost	losses	amount
	£m	£m	£m
At 1 January 2024	1,069	(224)	845
Currency translation differences	5	4	9
At 31 December 2024	1,074	(220)	854
Currency translation differences	(33)	(2)	(35)
At 31 December 2025	1,041	(222)	819

Carrying amounts of goodwill by segment

		2025			2024
	United	United		United	United
	Kingdom	States	Total	Kingdom	States	Total
	£m	£m	£m	£m	£m	£m
Construction
Services	260	436	696	260	468	728
Support Services	73	–	73	73	–	73
Infrastructure
Investments	–	50	50	–	53	53
Group	333	486	819	333	521	854

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14 Intangible assets – goodwill continued

Carrying amounts of goodwill by cash-generating unit (CGU)

	2025		2024
		Pre-tax		Pre-tax
		discount rate		discount rate
	£m	%	£m	%
UK Regional and Engineering Services	249	10.9%	248	10.8%
Balfour Beatty Construction Group Inc	414	11.1%	445	11. 2%
Rail UK	68	11.0%	68	11.2%
Balfour Beatty Investments US	50	11.3%	53	11. 2%
Other	38	11.0%	40	10.9%
Group total	819		854

The recoverable amount of goodwill is based on value-in-use, a key input of which is forecast cash

flows. The Group’s cash flow forecasts are based on the expected future revenues and margins of

each CGU, giving consideration to the current level of confirmed and anticipated orders. Cash flow

forecasts for the next three years are based on the Group’s Three-Year Plan, which covers the period

from 2026 to 2028. The cash flow forecasts for each CGU were compiled from each of its constituent

business units as part of the Group’s annual financial planning process.

The other key inputs in assessing each CGU are its long-term growth rate and discount rate. The

discount rates have been calculated using the Weighted Average Cost of Capital (WACC) method,

which takes account of the Group’s estimated optimal capital structure (financial risk) as well as the

nature of each CGU’s business (operational risk). Long-term growth rates are assumed to be the

estimated future GDP growth rates based on published independent forecasts for the country or

countries in which each CGU operates, less 1.0% to reflect current economic uncertainties and their

consequent estimated effect on public sector spending on infrastructure.

In the derivation of each CGU’s value-in-use, a terminal value is assumed based on a multiple of

earnings before interest and tax. The multiple is applied to a terminal cash flow, which is the

normalised cash flow in the last year of the forecast period. However, due to the long-term nature and

the degree of predictability of some contracts within Balfour Beatty Investments US, the forecast

period used in the derivation of this CGU’s value-in-use extends beyond the Group’s three-year cash

flow forecast period in line with the duration of the contracts disclosed in Note 42(e). The EBIT multiple

is calculated using the Gordon Growth Model and is a factor of the discount rate and growth rate for

each CGU. The nominal terminal value is discounted to present value.

		2025			2024
			Nominal			Nominal
			long-term			long-term
		Real growth	growth rate		Real growth	growth rate
	Inflation rate	rate	applied x	Inflation rate	rate	applied x
	%	%	%	%	%	%
UK Regional and Engineering Services	2.5	1.2	3.7	2.4	1.2	3.6
Balfour Beatty
Construction Group
Inc	2.3	1.6	3.9	2.2	1.7	3.9
Rail UK	2.5	1.2	3.7	2.4	1.2	3.6
Balfour Beatty
Investments US	2.3	1.6	3.9	2.2	1.7	3.9
Other	2.4	1.4	3.8	2.3	1.5	3.8

x These nominal long-term growth rates are reduced by 1.0% when performing goodwill assessments to reflect current economic

uncertainties and their consequent estimated effect on public sector spending on infrastructure.

Sensitivities

The Group’s impairment review is sensitive to changes in the key assumptions used. The major

assumptions that result in significant sensitivities are the discount rate and the long-term growth rate,

and for certain CGUs, changes to underlying cash projections.

A reasonable possible change in key assumptions would not give rise to an impairment in any of the

Group’s CGUs.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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15 Intangible assets – other

				Infrastructure
	Customer	Customer	Brand	Investments	Software
	contracts	relationships	names	intangibles	and other	Total
	£m	£m	£m	£m	£m	£m
Cost or valuation
At 1 January 2024	230	52	3	248	128	661
Currency translation
differences	4	1	–	–	–	5
Reclassified to service
concession contract
asset (Note 16)	–	–	–	(11)	–	(11)
At 31 December 2024	234	53	3	237	128	655
Currency translation
differences	(16)	(4)	–	–	(1)	(21)
At 31 December 2025	218	49	3	237	127	634
Accumulated
amortisation
At 1 January 2024	(182)	(46)	(3)	(18)	(124)	(373)
Currency translation
differences	(3)	(1)	–	–	–	(4)
Charge for the year	(3)	(1)	–	(5)	(1)	(10)
At 31 December 2024	(188)	(48)	(3)	(23)	(125)	(387)
Currency translation
differences	14	3	–	–	1	18
Charge for the year	(2)	(1)	–	(5)	(1)	(9)
At 31 December 2025	(176)	(46)	(3)	(28)	(125)	(378)
Carrying amount
At 31 December 2025	42	3	–	209	2	256
At 31 December 2024	46	5	–	214	3	268

Intangible assets are amortised on a straight-line basis over their expected useful lives, which are one

to four years for customer contracts, three to ten years for customer relationships, three to seven years

for software, and up to five years for brand names, except for customer contracts and relationships

relating to Balfour Beatty Investments North America which are amortised on a basis matching the

returns earned over the life of the underlying contracts and relationships of up to 50 years.

The Infrastructure Investments intangible assets are amortised on a straight-line basis over the life of

the projects, which is 50 years.

Other intangible assets are amortised over periods up to 10 years.

16 Service concession contract asset

	Total cost
	£m
Reclassified from intangible assets – other (Note 15)	11
Additions	56
Reclassify arrangement fee to borrowings (Note 34.3)	(3)
Amortisation of fair value adjustment on service concession loan (Note 34.3)	5
At 31 December 2024	69
Additions	79
Net interest capitalised	1
Amortisation of fair value adjustment on service concession loan (Note 34.3)	5
At 31 December 2025	154

Service concession contract asset of £154m (2024: £69m) relates to the University of Sussex’s West

Slope student accommodation project which features demand risk under IFRIC 12 Service Concession

Arrangements. This has been classified as a service concession contract asset whilst the asset is in

the construction phase. Construction of the student accommodation commenced in December 2023

and is anticipated to complete in 2028. In the year, construction spend was £79m (2024: £56m).

In 2023, a fair value movement of £19m was recognised against the value of the asset, which will

unwind over the course of the construction phase. The unwind in 2025 amounted to £5m (2024: £5m).

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17 Property, plant and equipment

			Assets in
	Land and	Plant and	the course of
	buildings	equipment	construction	Total
	£m	£m	£m	£m
Cost or valuation
At 1 January 2024	61	301	14	376
Currency translation differences	1	1	–	2
Transfers	–	4	(4)	–
Additions	2	19	7	28
Removal of fully depreciated assets/assets scrapped	(1)	(5)	–	(6)
Disposals	–	(16)	–	(16)
At 31 December 2024	63	304	17	384
Currency translation differences	(1)	(7)	–	(8)
Transfers	1	5	(6)	–
Additions	16	26	7	49
Removal of fully depreciated assets/assets scrapped	–	(3)	–	(3)
Disposals	–	(16)	–	(16)
At 31 December 2025	79	309	18	406
Accumulated depreciation
At 1 January 2024	(44)	(191)	–	(235)
Currency translation differences	–	(1)	–	(1)
Charge for the year	(4)	(27)	–	(31)
Removal of fully depreciated assets/assets scrapped	1	5	–	6
Disposals	–	13	–	13
At 31 December 2024	(47)	(201)	–	(248)
Currency translation differences	1	4	–	5
Charge for the year	(4)	(26)	–	(30)
Removal of fully depreciated assets/assets scrapped	–	3	–	3
Disposals	–	15	–	15
At 31 December 2025	(50)	(205)	–	(255)
Carrying amount
At 31 December 2025	29	104	18	151
At 31 December 2024	16	103	17	136

Except for land and assets in the course of construction, the costs of property, plant and equipment

are depreciated on a straight-line basis over their expected useful lives. Buildings are depreciated at

2.5% per annum and plant and equipment is depreciated at 4% to 33% per annum.

18 Right-of-use assets

	Land and	Plant and	Motor
	buildings	equipment	vehicles	Total
	£m	£m	£m	£m
Cost or valuation
At 1 January 2024	89	55	128	272
Currency translation differences	1	–	–	1
Additions	15	19	47	81
Removal of fully depreciated assets/assets scrapped	(11)	(7)	(12)	(30)
Transfers	–	15	(15)	–
Disposals	(2)	(2)	(12)	(16)
At 31 December 2024	92	80	136	308
Currency translation differences	(4)	–	–	(4)
Additions	15	28	72	115
Removal of fully depreciated assets/assets scrapped	(11)	(7)	(18)	(36)
Lease modification	(6)	–	–	(6)
Disposals	(4)	–	(15)	(19)
At 31 December 2025	82	101	175	358
Accumulated depreciation
At 1 January 2024	(46)	(25)	(66)	(137)
Charge for the year	(15)	(13)	(32)	(60)
Removal of fully depreciated assets/assets scrapped	11	7	12	30
Transfers	–	(10)	10	–
Disposals	1	1	10	12
At 31 December 2024	(49)	(40)	(66)	(155)
Currency translation differences	2	–	–	2
Charge for the year	(14)	(15)	(39)	(68)
Removal of fully depreciated assets/assets scrapped	11	7	18	36
Lease modification	3	–	–	3
Disposals	4	–	12	16
At 31 December 2025	(43)	(48)	(75)	(166)
Carrying amount
At 31 December 2025	39	53	100	192
At 31 December 2024	43	40	70	153

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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19 Investment properties

		Accumulated	Carrying
	Cost	depreciation	amount
	£m	£m	£m
At 1 January 2024	76	(10)	66
Additions	36	–	36
Depreciation charge for the year	–	(1)	(1)
At 31 December 2024	112	(11)	101
Currency translation differences	(6)	2	(4)
Additions	36	–	36
Disposal of Foundry Court (Note 35.2.3)	(34)	9	(25)
Depreciation charge for the year	–	(4)	(4)
At 31 December 2025	108	(4)	104

Investment properties are held by the Group to generate rental income and capital appreciation. The

Group has chosen to account for its investment property assets under the cost method. In 2025, the

Group acquired a new multifamily housing development in Conroe, Texas, for £36m. The Group has

non-recourse project-specific financing amounting to £68m (2024: £73m), which is secured through

floating charges over the properties.

Once a property is ready for use, the Group ceases capitalisation of interest cost and commences

depreciation on the property, on a straight-line basis over 25 years. The Group generated £16m

(2024: £10m) of rental income from its investment properties.

The fair value of the Group’s investment properties at 31 December 2025 is £110m (2024: £142m).

The fair value of investment properties is determined using the discounted cash flow (DCF) method.

The main exception to the use of DCF is for US multifamily housing projects, which are valued based

on periodic broker reports. Further details regarding the valuation techniques are included in the

Directors’ valuation on pages 33 and 34. The fair value measurements for investment property has

been categorised as a Level 3 fair value based on the inputs to the valuation technique used.

Any contractual obligations relating to investment properties will be attributed to Group’s committed

equity funding for these assets. Refer to Note 42(f).

20 Investments in joint ventures and associates

20.1 Movements

	Net
	assets +	Loans ^	Total
	£m	£m	£m
At 1 January 2024	316	73	389
Currency translation differences	4	–	4
Income recognised	59	–	59
Fair value revaluation of PPP financial assets (Note 33.1)	(48)	–	(48)
Fair value revaluation of cash flow hedges (Note 33.1)	10	–	10
Tax on items taken directly to other comprehensive income
(Note 33.1)	10	–	10
Dividends	(71)	–	(71)
Additions	15	–	15
Acquisition of DTO (Note 35.1)	6	–	6
Transfer movement in negative investment in joint venture
to provisions (Note 27)	(3)	–	(3)
Loans repaid	–	(1)	(1)
Net impairment reversal of loans to joint ventures and associates (Note 8)	–	15	15
At 31 December 2024	298	87	385
Currency translation differences	(19)	(1)	(20)
Income recognised	64	–	64
Fair value revaluation of PPP financial assets (Note 33.1)	8	–	8
Fair value revaluation of cash flow hedges (Note 33.1)	8	–	8
Actuarial movements on retirement obligations	1	–	1
Tax on items taken directly to other comprehensive income
(Note 33.1)	(4)	–	(4)
Dividends *	(59)	–	(59)
Additions	12	–	12
Disposals
– Streetlighting projects (Note 35.2.4)	(4)	(3)	(7)
– Connect CNDR Ltd (Note 35.2.5)	(5)	(3)	(8)
– Offshore transmission projects (Note 35.2.6)	20	(26)	(6)
Transfer net movement in negative investment in joint
venture from provisions (Note 27)	(5)	–	(5)
Return of equity*	(5)	–	(5)
Loans repaid	–	(1)	(1)
At 31 December 2025	310	53	363

+ Includes goodwill and intangible assets arising on acquisition of the Group’s interests in investments in joint ventures and associates.

^ Loans include subordinated debt receivable from joint ventures and associates within the Infrastructure Investments segment.

* Includes dividends of £1m and return of equity of £4m relating to the disposal of Paces Brook. See Note 35.2.2.

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20 Investments in joint ventures and associates continued

20.1 Movements continued

The principal joint ventures and associates are shown in Note 42.

The amount of the Group’s share of borrowings of joint ventures and associates which was supported by the Group and the Company was £nil (2024: £nil).

The non-recourse borrowings of joint venture and associate entities relating to infrastructure concessions projects are repayable over periods extending up to 2066. The non-recourse borrowings arise under

facilities taken out by project-specific joint venture and associate concession companies. The borrowings of each concession company are secured by a combination of fixed and floating charges over that

concession company’s interests in its project’s assets and revenues and the shares in the concession company held by its immediate parent company. A significant part of these loans has been swapped into

fixed rate debt by the use of interest rate swaps.

As disclosed in Note 42(f), the Group has committed to provide its share of further equity funding of joint ventures and associates in Infrastructure Investments’ projects and military housing concessions.

Further, in respect of a number of these investments the Group has committed not to dispose of its equity interest until construction is complete. As is customary in such projects, banking covenants restrict

the payment of dividends and other distributions.

20.2 Share of results and net assets of joint ventures and associates

				2025						2024
				Infrastructure Investments						Infrastructure Investments
	Construction	Support		North			Construction	Support		North
	Services	Services	UK ^	America	Total	Total	Services	Services	UK ^	America	Total	Total
Income statement	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Revenue	1,122	–	108	48	156	1,278	1,569	–	104	108	212	1,781
Operating profit excluding gain on disposals of interests in investments	58	–	13	16	29	87	40	–	33	17	50	90
Gain on disposals of interests in investments	–	–	–	4	4	4	–	–	–	–	–	–
Operating profit	58	–	13	20	33	91	40	–	33	17	50	90
Investment income	3	–	56	13	69	72	9	–	66	15	81	90
Finance costs	(1)	–	(67)	(23)	(90)	(91)	(1)	–	(61)	(23)	(84)	(85)
Profit before taxation	60	–	2	10	12	72	48	–	38	9	47	95
Taxation	(6)	–	(2)	–	(2)	(8)	(7)	–	(11)	–	(11)	(18)
Profit after taxation from joint
ventures and associates	54	–	–	10	10	64	41	–	27	9	36	77
Adjustment for expected credit losses
at Group level	–	–	–	–	–	–	–	–	(18)	–	(18)	(18)
Profit after taxation	54	–	–	10	10	64	41	–	9	9	18	59

^ Including Ireland.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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20 Investments in joint ventures and associates continued

20.2 Share of results and net assets of joint ventures and associates continued

			2025						2024
		Infrastructure Investments							Infrastructure Investments
	Construction		North			Construction	Support		North
	Services	UK ^	America	Total	Total	Services	Services	UK ^	America	Total	Total
Balance sheet	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Non-current assets
Intangible assets
– Infrastructure Investments	–	13	–	13	13	–	–	13	–	13	13
– other	8	4	–	4	12	9	–	11	1	12	21
Property, plant and equipment	22	–	85	85	107	24	–	–	39	39	63
Investment properties	–	–	120	120	120	–	–	–	173	173	173
Investments in joint ventures and associates	3	–	–	–	3	4	1	–	–	–	5
Money market funds	–	–	–	–	–	–	–	–	1	1	1
PPP financial assets	–	579	251	830	830	–	–	833	266	1,099	1,099
Military housing projects	–	–	109	109	109	–	–	–	116	116	116
Other non-current assets	82	13	7	20	102	115	–	23	8	31	146
Current assets
Cash and cash equivalents	237	142	17	159	396	334	–	158	24	182	516
Other current assets	377	76	6	82	459	395	–	87	2	89	484
Total assets	729	827	595	1,422	2,151	881	1	1,125	630	1,755	2,637
Current liabilities
Borrowings – non-recourse	–	(25)	(47)	(72)	(72)	–	–	(35)	–	(35)	(35)
Other current liabilities	(458)	(148)	(9)	(157)	(615)	(607)	(1)	(172)	(5)	(177)	(785)
Non-current liabilities
Borrowings – non-recourse	(97)	(533)	(367)	(900)	(997)	(104)	–	(750)	(438)	(1,18 8)	(1,292)
Other non-current liabilities	(106)	(83)	–	(83)	(189)	(116)	–	(149)	–	(149)	(265)
Total liabilities	(661)	(789)	(423)	(1,212)	(1,873)	(827)	(1)	(1,106)	(443)	(1,549)	(2,377)
Net assets	68	38	172	210	278	54	–	19	187	206	260
Goodwill	30	–	–	–	30	32	–	–	–	–	32
Reclassify negative investment to provisions	–	2	–	2	2	7	–	–	–	–	7
Loans to joint ventures and associates	–	53	–	53	53	–	–	86	–	86	86
Total investment in joint ventures and associates	98	93	172	265	363	93	–	105	187	292	385

^ Including Ireland.

The Group’s investment in military housing joint ventures’ and associates’ projects is recognised at its remaining equity investment plus the value of the Group’s accrued returns from the underlying projects.

The military housing joint ventures and associates have total non-recourse net borrowings of £1,669m (2024: £2,053m). Note 42(e) details the Group’s military housing projects.

On certain Infrastructure Investments concessions where net fair value revaluations of PPP financial assets and cash flow hedges resulted in the Group’s carrying value of these investments being negative, the

Group has not recognised losses beyond the carrying value of its investments. This is because the Group has not committed to provide any further funding to these investments and the borrowings within these

concessions are non-recourse to the Group. At 31 December 2025, the unrecognised cumulative net fair value charges to other comprehensive income amounted to £35m (2024: £56m).

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20 Investments in joint ventures and associates continued

20.3 Aggregate information of joint ventures and associates

		2025			2024
	Joint			Joint
	ventures	Associates	Total	ventures	Associates	Total
	£m	£m	£m	£m	£m	£m
The Group’s share of profit from operations	52	12	64	47	12	59
The Group’s share of other comprehensive income	23	–	23	(25)	–	(25)
Aggregate carrying amount of the Group’s interest	254	109	363	269	116	385

20.4 Details of material joint ventures

	Gammon China Ltd		Connect Plus (M25) Ltd
	2025	2024	2025	2024
	£m	£m	£m	£m
Proportion of the Group’s ownership
interest in the joint venture	50%	50%	15%	15%
Income statement
Revenue	2,179	3,099	236	223
Underlying operating profit^	80	74	20	20
Investment income	7	19	147	149
Finance costs	(2)	(2)	(95)	(99)
Income tax charge	(12)	(13)	(18)	(18)
Profit	73	78	54	52
Total other comprehensive income/(loss)	3	(2)	28	(58)
Total comprehensive income/(loss) (100%)	76	76	82	(6)
Group’s share of total comprehensive income/(loss)	38	38	12	(1)
Dividends received by the Group during the year	38	39	6	5

	Gammon China Ltd		Connect Plus (M25) Ltd
	2025	2024	2025	2024
Balance sheet	£m	£m	£m	£m
Non-current assets	215	289	1,529	1,556
Current assets
Cash and cash equivalents	406	632	133	128
Other current assets	720	775	82	78
	1,126	1,407	215	206
Current liabilities
Trade and other payables	(731)	(1,010)	(62)	(59)
Provisions	(32)	(45)	–	–
Borrowings – non-recourse	–	–	(54)	(19)
Other current liabilities	(59)	(79)	(12)	(14)
	(822)	(1,13 4)	(128)	(92)
Non-current liabilities
Trade and other payables	(157)	(172)	–	–
Provisions	(41)	(39)	–	–
Borrowings – non-recourse	(194)	(209)	(1,017)	(1,097)
Other non-current liabilities (including
shareholder loans)	(14)	(21)	(364)	(382)
	(406)	(441)	(1,381)	(1,479)
Net assets (100%)	113	121	235	191
Reconciliation of the above summarised financial
information to the carrying amount of the interest
in the above joint ventures recognised in the consolidated financial statements:
Net assets of joint venture (100%)	113	121	235	191
Group’s share of net assets	57	61	35	29
Add: Group’s interest in shareholder loans	–	–	25	26
Goodwill	30	32	–	–
Carrying amount of the Group’s interest
in the joint venture	87	93	60	55

^ Includes depreciation charge of £12m (2024: £14m) and amortisation charge of £12m (2024: £12m) for Gammon China Ltd. There

were no depreciation or amortisation charges for Connect Plus (M25) Ltd (2024: £nil).

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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20 Investments in joint ventures and associates continued

20.5 Cash flow from/(to) joint ventures and associates

		Infrastructure Investments				Infrastructure Investments
		North				North
	UK ^	America	Other	Total	UK ^	America	Other	Total
	2025	2025	2025	2025	2024	2024	2024	2024
Cash flows from investing activities	£m	£m	£m	£m	£m	£m	£m	£m
Dividends from joint ventures and associates	6	15 *	38	59	10	16	45	71
Subordinated debt interest received	3	–	–	3	7	–	–	7
Investments in and loans to joint ventures and associates	–	(11)	–	(11)	(1)	(13)	(6)	(20)
Equity	(1)	(11)	–	(12)	(2)	(13)	–	(15)
Acquisition of DTO (Note 35.1)	–	–	–	–	–	–	(6)	(6)
Subordinated debt repaid	1	–	–	1	1	–	–	1
Return of equity from joint ventures and associates	–	5 *	–	5	–	–	–	–
Net cash flow from joint ventures and associates	9	9	38	56	16	3	39	58

^ Including Ireland.

* Includes dividends from joint venture of £1m and return of equity of £4m for the disposal of Paces Brook. See Note 35.2.2.

20.6 Share of reserves of joint ventures and associates

			PPP	Currency
	Accumulated	Hedging	financial	translation	Total
	(loss)/profit	reserve	assets	reserve	(Note 33.1)
	£m	£m	£m	£m	£m
At 1 January 2024	(42)	(38)	8	45	(27)
Currency translation differences	–	–	–	3	3
Income recognised	59	–	–	–	59
Fair value revaluation of PPP financial assets	–	–	(48)	–	(48)
Fair value revaluation of cash flow hedges	–	10	–	–	10
Tax on items taken directly to other comprehensive income	–	(2)	12	–	10
Dividends	(71)	–	–	–	(71)
At 31 December 2024	(54)	(30)	(28)	48	(64)
Currency translation differences	–	–	–	(13)	(13)
Income recognised	64	–	–	–	64
Fair value revaluation of PPP financial assets	–	–	8	–	8
Fair value revaluation of cash flow hedges	–	8	–	–	8
Tax on items taken directly to other comprehensive income	–	(2)	(2)	–	(4)
Dividends	(59)	–	–	–	(59)
Recycling of reserves to the income statement on disposal	–	8	16	–	24
Reserve transfers relating to joint ventures and associates	(1)	(1)	6	–	4
Actuarial movements on retirement benefit liabilities	1	–	–	–	1
At 31 December 2025	(49)	(17)	–	35	(31)

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21 Investments

21.1 Group

	Investments in
	mutual funds	Other	Total
	£m	£m	£m
At 1 January 2024	19	9	28
Currency translation differences	1	–	1
Fair value gains/(losses)	2	(2)	–
Interest accrued	1	–	1
Disposals	–	(2)	(2)
Benefits paid	(3)	–	(3)
Dividends	–	(1)	(1)
At 31 December 2024	20	4	24
Currency translation differences	(1)	–	(1)
Fair value gains	1	–	1
Interest accrued	1	–	1
Benefits paid	(6)	–	(6)
Dividends	–	(1)	(1)
At 31 December 2025	15	3	18

The investments in mutual funds comprise holdings in a number of funds, based on employees’

investment elections, in respect of the deferred compensation obligations of the Group as disclosed in

Note 31.2. The fair value of these investments is £15m (2024: £19m), determined by the market price

of the funds at the reporting date.

Other investments relate to the Group’s interest in two Limited Partnerships (LPs) incorporated in Bermuda.

The principal activity of the two LPs is to receive carried interest from a fund. Carry interest refers to a

performance fee payable once the performance of the fund exceeds agreed hurdles. During the year,

the Group recognised £nil fair value movements in relation to its carry interest (2024: £2m loss). The

fund maturity date has been extended by three years to January 2028, with one remaining asset to be

disposed. All gains will be realised by the final maturity date. Dividends of £1m were received from the

fund in the year (2024: £1m).

21.2 Company

	2025	2024
	£m	£m
Investment in subsidiaries	1,792	1,779
Provisions	(26)	(26)
	1,766	1,753

The increase of investment in subsidiaries of £13m (2024: £8m) relates to new capital injected into the

Company’s existing subsidiaries. Including provisions recognised to date, the Directors have assessed

the Company’s investment in subsidiaries to be fully recoverable.

22 PPP financial assets

	Economic	Social
	infrastructure	infrastructure	Total
	£m	£m	£m
At 1 January 2024	19	5	24
Income recognised in the income statement:
– interest income (Note 8)	2	–	2
Losses recognised in the statement of comprehensive income:
– fair value movements	(1)	(1)	(2)
Other movements:
– cash expenditure	3	2	5
– cash received	(6)	(2)	(8)
At 31 December 2024	17	4	21
Other movements:
– cash expenditure	3	1	4
– cash received	(6)	(1)	(7)
At 31 December 2025	14	4	18

Assets constructed by PPP subsidiary concession companies are classified as financial assets

measured at fair value through OCI and are denominated in sterling. The maximum exposure to

credit risk at the reporting date is the fair value of the PPP financial assets.

There were no impairment provisions in 2025 or 2024.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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23 Inventories

	2025	2024
	£m	£m
Raw materials and consumables	107	95
Development and housing land and work in progress	43	63
Manufacturing work in progress	4	–
Finished goods and goods for resale	1	–
	155	158

24 Contract balances

The timing of revenue recognition, billings and cash collection results in trade receivables (billed

amounts), contract assets (unbilled amounts) and customer advances and deposits (contract liabilities)

on the Group’s balance sheet. For services in which revenue is earned over time, amounts are billed

in accordance with contractual terms, either at periodic intervals or upon achievement of contractual

milestones. The timing of revenue recognition is measured in accordance with the progress of delivery

on a contract which could either be in advance or in arrears of billing, resulting in either a contract asset

or a contract liability.

24.1 Contract assets

	£m
At 1 January 2024	300
Currency translation differences	3
Transfers from contract assets recognised at the beginning of the year to receivables	(220)
Increase related to services provided in the year	168
Reclassified from contract liabilities (Note 24.2)	(16)
Impairments on contract assets recognised at the beginning of the year	(6)
At 31 December 2024	229
Currency translation differences	(9)
Transfers from contract assets recognised at the beginning of the year to receivables	(201)
Increase related to services provided in the year	248
Reclassified from contract liabilities (Note 24.2)	(20)
Impairments on contract assets recognised at the beginning of the year	(9)
At 31 December 2025	238

24.2 Contract liabilities

	£m
At 1 January 2024	(602)
Currency translation differences	(6)
Revenue recognised against contract liabilities at the beginning of the year	537
Increase due to cash received, excluding amounts recognised as revenue during the year	(644)
Reclassified to contract assets (Note 24.1)	16
At 31 December 2024	(699)
Currency translation differences	30
Revenue recognised against contract liabilities at the beginning of the year	631
Increase due to cash received, excluding amounts recognised as revenue during the year	(1,048)
Reclassified to contract assets (Note 24.1)	20
Businesses disposed	3
At 31 December 2025	(1,063)

The amount of revenue recognised in the year from performance obligations satisfied (or partially

satisfied) in previous periods amounted to £1m (2024: £2m).

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25 Trade and other receivables

	Group	Group	Company	Company
	2025	2024	2025	2024
	£m	£m	£m	£m
Current
Trade receivables	702	616	–	–
Less: provision for impairment of trade receivables	(2)	(2)	–	–
	700	614	–	–
Due from joint ventures and associates	19	16	–	–
Due from joint operation partners	2	5	–	–
Contract fulfilment assets	9	17	–	–
Contract retentions receivable	264	242	–	–
Accrued income	20	12	–	–
Prepayments	160	65	–	–
Other receivables +	79	128	2	1
	1,253	1,099	2	1
Non-current
Due from subsidiaries	–	–	296	367
Due from joint ventures and associates	107	123	1	1
Contract fulfilment assets	21	34	–	–
Contract retentions receivable	119	102	–	–
Other receivables +	49	67	1	2
	296	326	298	370
Total trade and other receivables	1,549	1,425	300	371
Comprising
Financial assets (Note 41)	1,359	1,360	300	371
Non-financial assets:			–	–
– prepayments	160	65	–	–
– contract fulfilment assets ^	30	–	–	–
	1,549	1,425	300	371

+ Includes insurance recoveries recognised in relation to rectification works on a development in London (Note 10.2).

^ Contract fulfilment assets have been presented as a non-financial asset in 2025. This was previously presented as a financial asset in

2024 and has not been re-presented in the comparative period as the Directors do not consider this to be material.

Based on prior experience, an assessment of the current economic environment and a review of the

financial circumstances of individual customers, the Directors believe no further credit risk provision is

required in respect of the financial assets.

The Directors consider that the carrying values of current and non-current trade and other receivables

approximate their fair values.

Amounts due from subsidiaries of the Company are repayable on demand and have been adjusted for

expected credit losses, which are not material.

Maturity profile of impaired trade receivables and trade receivables past due but not impaired

	Impaired			Past due but not impaired
	Group	Group	Group	Group
	2025	2024	2025	2024
	£m	£m	£m	£m
Up to three months	–	–	41	36
Three to six months	–	–	5	7
Six to nine months	–	–	5	4
Nine to twelve months	–	–	6	1
More than twelve months	2	2	37	28
	2	2	94	76

At 31 December 2025, trade receivables of £94m (2024: £76m) were past due but not impaired. These

relate to a number of individual customers where there is no reason to believe that the receivable is not

recoverable.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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26 Trade and other payables

	Group	Group	Company	Company
	2025	2024	2025	2024
	£m	£m	£m	£m
Current
Trade and other payables	707	625	–	–
Accruals	895	813	3	3
Contract retentions payable	244	230	–	–
VAT, payroll taxes and social security	111	108	–	–
Due to joint ventures and associates	–	2	–	–
Due to subsidiaries	–	–	1,106	655
	1,957	1,778	1,109	658
Non-current
Accruals	12	10	–	–
Contract retentions payable	88	75	–	–
Due to joint ventures and associates	–	3	–	–
Borrowings from subsidiaries	–	–	283	274
	100	88	283	274
Total trade and other payables	2,057	1,866	1,392	932
Comprising
Financial liabilities (Note 41)	1,914	1,734	1,392	932
Non-financial liabilities:
– accruals not at amortised cost	32	24	–	–
– VAT, payroll taxes and social security	111	108	–	–
	2,057	1,866	1,392	932

Borrowings from subsidiaries include a loan to the Company from Balfour Beatty Overseas Investments Limited. The loan matures in December 2033 and bears interest at 1.35% plus SONIA. Amounts due to

the Company’s subsidiaries are repayable on demand.

Maturity profile of the Group’s non‑current financial liabilities at 31 December

		2025			2024
		Contract			Contract	Due to joint
		retentions			retentions	ventures and
	Accruals	payable	Total	Accruals	payable	associates	Total
	£m	£m	£m	£m	£m	£m	£m
Due within one to two years	9	71	80	5	39	1	45
Due within two to five years	3	16	19	5	36	1	42
Due after more than five years	–	1	1	–	–	1	1
	12	88	100	10	75	3	88

The Directors consider that the carrying values of current and non-current trade and other payables and contract retentions payable approximate their fair values. The fair value of non-current trade and other

payables and contract retentions payable has been determined by discounting future cash flows using yield curves and exchange rates prevailing at the reporting date.

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27 Provisions

	Contract	Employee	Other
	provisions	provisions	provisions	Total
	£m	£m	£m	£m
At 1 January 2024	352	33	32	417
Currency translation differences	1	–	–	1
Reclassified from accruals	1	–	1	2
Transfers	(10)	–	10	–
Charged/(credited) to the income statement:
– additional provisions	365	9	13	387
– unused amounts reversed	(54)	(3)	(7)	(64)
Utilised during the year	(113)	(7)	(3)	(123)
Transfer movement in negative investment in joint venture to provisions (Note 20.1)	–	–	(3)	(3)
At 31 December 2024	542	32	43	617
Currency translation differences	(8)	–	–	(8)
Reclassified from accruals	2	–	–	2
Charged/(credited) to the income statement:
– additional provisions	208	8	7	223
– unused amounts reversed	(110)	(1)	–	(111)
Utilised during the year	(120)	(6)	(3)	(129)
Transfer net movement in negative investment in joint venture held in provisions to investment in joint venture (Note 20.1)	–	–	(5)	(5)
At 31 December 2025	514	33	42	589

		2025				2024
	Contract	Employee	Other		Contract	Employee	Other
	provisions	provisions	provisions	Total	provisions	provisions	provisions	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Due within one year	242	9	15	266	214	7	18	239
Due within one to two years	119	5	7	131	196	6	5	207
Due within two to five years	86	6	11	103	105	6	12	123
Due after more than five years	67	13	9	89	27	13	8	48
	514	33	42	589	542	32	43	617

Contract provisions include construction insurance liabilities, principally in the Group’s self-insurance arrangements, which cover claims relating to contractors all risk, public liability and professional indemnity.

Contract provisions also include loss provisions, and defect and warranty provisions on contracts, primarily construction contracts, that have reached practical completion. There is a latent defect period for

which the provision is held, but where there are known identified issues then the provision may be required to cover rectification work over a more extended period. Contract provisions also include provisions

made for Building Safety Act claims received (refer to Note 10.2.2). This provision is subject to significant estimation uncertainties with regards to quantum and timing (refer to Note 2.28(d)).

Employee provisions are principally liabilities relating to employers’ liability insurance retained in the Group’s self-insurance arrangements.

Other provisions principally comprise: motor and other insurance liabilities in the Group’s self-insurance arrangements; legal claims and costs, where provision is made for the Directors’ best estimate of known

legal claims, investigations and legal actions in progress; and environmental provisions.

The Group takes actuarial advice when establishing the level of provisions in the Group’s self-insurance arrangements and certain other categories of provision. Insurance-related provisions within these

categories were £83m (2024: £71m) as follows: Contract provisions £46m (2024: £50m); Employee provisions £34m (2024: £15m); and Other, mainly motor, provisions £3m (2024: £6m).

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

28 Cash and cash equivalents and borrowings

28.1 Group

		2025			2024
	Current	Non-current	Total	Current	Non-current	Total
	£m	£m	£m	£m	£m	£m
Unsecured borrowings at amortised cost
– bank overdrafts	(68)	–	(68)	(185)	–	(185)
– US private placement (Note 28.2)	–	(153)	(153)	–	(165)	(165)
	(68)	(153)	(221)	(185)	(165)	(350)
Cash and deposits at amortised cost	1,191	–	1,191	1,084	–	1,084
Term deposits at amortised cost	476	–	476	209	–	209
Cash and cash equivalents (excluding infrastructure concessions)	1,667	–	1,667	1,293	–	1,293
	1,599	(153)	1,446	1,108	(165)	943
Non-recourse infrastructure concessions project finance loans at amortised cost with final maturity between 2026 and 2072	(37)	(567)	(604)	(11)	(589)	(600)
Infrastructure concessions cash and cash equivalents	193	–	193	265	–	265
	156	(567)	(411)	254	(589)	(335)
Net cash/(borrowings)	1,755	(720)	1,035	1,362	(754)	608

The Company, together with certain of its UK and US subsidiaries, operates notional pooling facilities with main relationship UK and US clearing banks where overdraft balances are offset with cash balances

and interest is calculated on a net basis. During the year ended 31 December 2025, the Group maintained a net cash position on these pooling facilities, so there was no interest payable to the bank in respect

of these bank overdrafts. Overdraft balances and cash held at these banks have been reported gross in the Group balance sheet as there was no legal right of offset and no intention to settle the bank overdrafts

at the balance sheet date.

The loans relating to project finance arise under non-recourse facilities taken out by project-specific subsidiary companies. The loans of each company are secured by a combination of fixed and floating charges

over that company’s interests in its project’s assets and revenues and the shares in the company held by its immediate parent company.

Term deposits are held on a short-term basis and are readily accessible to the Group at any time with insignificant break costs.

Included in cash and cash equivalents is restricted cash of £16m (2024: £16m) held by the Group’s self-insurance company, Delphian Insurance Company Ltd, which is subject to Isle of Man insurance solvency

regulations.

Cash and cash equivalents also include: £134m (2024: £158m) within construction project bank accounts which is used for project-specific expenditure; £425m (2024: £382m) in relation to the Group’s share

of cash held by joint operations which is used for expenditure within the joint operation projects; and £193m (2024: £265m) relating to maintenance and other reserve accounts in Infrastructure Investments

subsidiaries, of which £164m (2024: £234m) is reserved for the construction of University of Sussex’s West Slope student accommodation project.

Maturity profile of the Group’s borrowings at 31 December

		2025			2024
	Non-recourse			Non-recourse
	project	Other		project	Other
	finance	borrowings	Total	finance	borrowings	Total
	£m	£m	£m	£m	£m	£m
Due on demand or within one year	(37)	(68)	(105)	(11)	(185)	(196)
Due within one to two years	(60)	(26)	(86)	(56)	–	(56)
Due within two to five years	(138)	(59)	(197)	(166)	(91)	(257)
Due after more than five years	(369)	(68)	(437)	(367)	(74)	(441)
	(604)	(221)	(825)	(600)	(350)	(950)

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28 Cash and cash equivalents and borrowings continued

28.1 Group continued

The carrying values of the Group’s borrowings are equal to the fair values at the reporting date.

The fair values are determined by discounting future cash flows using yield curves and exchange

rates prevailing at the reporting date.

Undrawn Group committed borrowing facilities at 31 December in respect of which all conditions

precedent were satisfied

		2025			2024
	Non-recourse			Non-recourse
	project	Other		project	Other
	finance	borrowings	Total	finance	borrowings	Total
	£m	£m	£m	£m	£m	£m
Expiring in one year
or less	–	–	–	–	–	–
Expiring in more than one year but not more than two years	–	30	30	–	–	–
Expiring in more than two years	–	450	450	–	480	480
	–	480	480	–	480	480

The Group retains its core Revolving Credit Facility (RCF) with a maturity of June 2028. The RCF

remains a Sustainability Linked Loan (SLL) and the Group continues to be incentivised to deliver annual

measurable performance improvement in three key areas: Carbon Emissions, Social Value generation

and an independent Environmental, Social and Governance (ESG) rating score. The RCF remained

undrawn at 31 December 2025.

The Group retains an additional £30m bilateral committed facility that has materially the same terms

and conditions as the RCF, with a maturity of December 2027. The facility is also a SLL, including

metrics that mirror the RCF. As of 31 December 2025, the facility remained undrawn.

28.2 US private placement

The US Private Placement (USPP) notes comprise a series of US-denominated loan notes with a

weighted average maturity of 4.9 years and an average coupon rate of 6.5% per annum. The earliest

maturity for these notes will be in June 2027 for US$35m.

The Group’s US Private Placement (USPP) notes of US$208m comprises US$35m of notes maturing

in June 2027 at a fixed coupon of 6.31%, US$80m of notes maturing in June 2029 at a fixed coupon

of 6.39%, US$25m maturing in May 2031 at a fixed coupon of 6.71%, US$43m of notes maturing in

June 2032 at a fixed coupon of 6.45% and US$25m maturing in May 2036 at a fixed coupon of 6.96%.

At 31 December 2025, the US$208m USPP notes have an average coupon of 6.5% per annum and

a remaining average maturity of 4.9 years.

28.3 Company

		2025			2024
	Current	Non-current	Total	Current	Non-current	Total
	£m	£m	£m	£m	£m	£m
Cash	202	–	202	218	–	218
Term deposits	461	–	461	200	–	200
Bank overdrafts	–	–	–	(171)	–	(171)
US private placement
(Note 28.2)	–	(153)	(153)	–	(165)	(165)
Net cash/
(borrowings)	663	(153)	510	247	(165)	82

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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29 Lease liabilities

29.1 Movements

	Land and	Plant and	Motor
	buildings	equipment	vehicles	Total
	£m	£m	£m	£m
At 1 January 2024	49	31	63	143
Additions	15	19	47	81
Payments made for lease liabilities +	(17)	(14)	(35)	(66)
Transfers	–	5	(5)	–
Disposals	–	(1)	(2)	(3)
Interest on lease liabilities	2	2	3	7
At 31 December 2024	49	42	71	162
Currency translation differences	(1)	(1)	–	(2)
Additions	15	28	72	115
Payments made for lease liabilities +	(16)	(18)	(43)	(77)
Lease modification	(6)	–	–	(6)
Disposals	–	–	(3)	(3)
Interest on lease liabilities	2	2	5	9
At 31 December 2025	43	53	102	198

+ Payments made for lease liabilities include an interest element of £9m (2024: £7m).

29.2 Maturity analysis – contractual undiscounted cash flows

		2025				2024
	Land and	Plant and	Motor		Land and	Plant and	Motor
	buildings	equipment	vehicles	Total	buildings	equipment	vehicles	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Due within one year	13	14	43	70	15	13	29	57
Due within one to two years	9	11	36	56	11	10	24	45
Due within two to five years	16	20	6	42	19	19	21	59
Due after more than five years	9	13	26	48	12	3	–	15
Total undiscounted cash flows	47	58	111	216	57	45	74	176

29.3 Amounts recognised in the income statement

	2025	2024
	£m	£m
Interest on lease liabilities	9	7
Expenses relating to short-term leases	154	125

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30 Deferred tax

30.1 Group

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same

tax authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Net deferred tax position at 31 December

	Group	Group
	2025	2024
	£m	£m
Deferred tax assets	199	200
Deferred tax liabilities	(153)	(153)
	46	47

Movement for the year in the net deferred tax position

	Group
	£m
At 1 January 2024	28
Currency translation differences	(1)
Charged to income statement	(8)
Credited to other comprehensive income	26
Credited to equity	2
At 31 December 2024	47
Currency translation differences	11
Charged to income statement	(29)
Credited to other comprehensive income	15
Credited to equity	2
At 31 December 2025	46

The table below shows the deferred tax assets and liabilities before being offset where they relate to

income taxes levied by the same tax authority.

Net deferred tax position

	Depreciation
	in excess		Unrelieved					Research and
	of capital	Retirement	trading	Share-based		Fair value	Other GAAP	development
	allowances	benefits	losses	payments	Provisions	adjustments	differences	credits	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January 2024	3	(22)	205	6	24	(99)	(89)	–	28
Currency translation differences	–	–	–	–	–	(1)	–	–	(1)
(Charged)/credited to income statement	(4)	(8)	(12)	(1)	10	–	7	–	(8)
Credited to other comprehensive income	–	26	–	–	–	–	–	–	26
Credited to equity	–	–	–	2	–	–	–	–	2
At 31 December 2024	(1)	(4)	193	7	34	(100)	(82)	–	47
Currency translation differences	–	–	–	–	(2)	7	6	–	11
Transfers	–	–	–	1	(1)	–	–	–	–
(Charged)/credited to income statement	(10)	(2)	(8)	1	(4)	–	(6)	–	(29)
Credited to other comprehensive income	–	15	–	–	–	–	–	–	15
Credited to equity	–	–	–	2	–	–	–	–	2
At 31 December 2025	(11)	9	185	11	27	(93)	(82)	–	46

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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30 Deferred tax continued

30.1 Group continued

Net deferred tax position continued

				Depreciation
	Property,			in excess
	plant and	Right-of-use		of capital
	equipment	assets	Lease liabilities	allowances
	£m	£m	£m	£m
At 1 January 2024	1	(5)	7	3
(Charged)/credited to income statement	(4)	2	(2)	(4)
At 31 December 2024	(3)	(3)	5	(1)
(Charged)/credited to income statement	1	–	(1)	–
Transfers	–	(5)	5	–
(Charged)/credited to income statement	(9)	3	(4)	(10)
At 31 December 2025	(11)	(5)	5	(11)

At the balance sheet date, the Group had unused trading tax losses of £1,093m (2024: £1,136m) available for offset against future profits, of which £732m (2024: £807m) arose in the UK, £19m (2024: £5m)

in the US and £342m (2024: £324m) in other jurisdictions.

A deferred tax asset has been recognised in respect of £736m (2024: £767m) of such losses, of which £719m (2024: £763m) have been recognised in the UK and £17m (2024: £4m) in the US. In considering

the amount of deferred tax asset to be recognised for UK and US tax losses, the potential use of those losses based on the latest current and forecast business performance was assessed, and losses were

recognised where it is probable that they will be utilised. No deferred tax asset has been recognised in respect of the losses of £357m (2024: £369m) where it is considered that it is not probable that they will

be utilised due to restrictions in use and unpredictability of future profitability. Of the Group’s tax losses, £7m (2024: £6m) will expire within 20 years after the year in which they arose, using losses incurred in

earlier years before those incurred in later years. Other losses will be carried forward indefinitely.

In addition to the losses referred to above, at 31 December 2025 the Group had UK capital losses available to carry forward of £1.4bn (2024: £1.4bn). No deferred tax assets have been recognised in respect

of these losses as there are no capital profits forecast against which these losses can be utilised.

Deferred tax liabilities on fair value adjustments of £93m (2024: £100m) relate to temporary differences arising on goodwill and intangibles. Deferred tax liabilities on other GAAP differences of £82m

(2024: £82m) relate to temporary differences on joint ventures.

At the reporting date, undistributed reserves of non-UK subsidiaries, joint ventures and associates for which deferred tax liabilities have not been recognised were £542m (2024: £637m) in respect of subsidiaries and

£37m (2024: £41m) in respect of joint ventures and associates. No liability has been recognised in respect of these differences because either no temporary difference arises or the timing of any distribution is

under the Group’s control and no distribution which gives rise to taxation is contemplated.

Deferred tax asset of £6m (2024: £5m) on other temporary differences has not been recognised.

30.2 Company

The table below shows the deferred tax assets and liabilities before being offset where they relate to income taxes levied by the same tax authority.

	Unrelieved		Total
	trading	Share-based	deferred
	losses	payments	tax assets
	£m	£m	£m
At 1 January 2024	4	1	5
Credited to income statement	3	–	3
At 31 December 2024	7	1	8
Credited to income statement	1	–	1
At 31 December 2025	8	1	9

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31 Retirement benefit assets and liabilities

31.1 Introduction

The Group, through trustees, operates a number of defined contribution and defined benefit pension schemes.

Defined contribution schemes are those where the Group’s obligation is limited to the amount that it

contributes to the scheme and the scheme members bear the investment and actuarial risks.

Defined benefit schemes are schemes other than defined contribution schemes where the Group’s

obligation is to provide specified benefits on retirement.

IAS 19 Employee Benefits (IAS 19) prescribes the accounting for defined benefit schemes in the

Group’s financial statements. Obligations are calculated using the projected unit credit method and

discounted to a net present value using the market yield on high-quality corporate bonds. The pension

expense relating to current service cost is charged to contracts or overheads based on the function of

scheme members and is included in cost of sales and net operating expenses. The net finance income

arising from the expected interest income on plan assets and interest cost on scheme obligations is

included in investment income. Actuarial gains and losses are reported in the statement of

comprehensive income. The IAS 19 accounting valuations are set out in Note 31.2.

A different calculation is used for the formal triennial funding valuations undertaken by the scheme

trustees to determine the future Company contribution level necessary so that over time the scheme

assets will meet the scheme obligations. The principal difference between the two methods is that

under the funding basis the obligations are discounted using a rate of return reflecting the composition

of the assets in the scheme, rather than the rate of return on high-quality corporate bonds as required

by IAS 19 for the financial statements. Details of the latest formal triennial funding valuations are set

out in Note 31.3.

The assets of the schemes do not include any direct holdings of the Group’s financial instruments,

nor any property occupied by, or other assets of, the Group.

Principal schemes

The Group’s principal schemes are the Balfour Beatty Pension Fund (BBPF), which includes defined

contribution and defined benefit sections, and the Balfour Beatty Shared Cost Section of the Railways

Pension Scheme (RPS). The defined benefit sections of both schemes are funded and closed to new

members with the exception of employees where employment has transferred to the Group under

certain agreed arrangements. Pension benefits for defined benefit schemes are based on employees’

pensionable service and their pensionable salary.

The schemes operate under trust law and are managed and administered by trustees on behalf of the

members in accordance with the terms of the trust deed and rules and relevant legislation. Defined

benefit contributions are determined in consultation with the trustees, after taking actuarial advice.

The trustees are responsible for establishing the investment strategy and ensuring that there are

sufficient assets to meet the cost of current and future benefits.

These schemes expose the Group to investment and actuarial risks where additional contributions may

be required if assets are not sufficient to pay future pension benefits:

@ investment risk: the investment portfolio is subject to a range of risks typical of the investments

held; for example, credit risk on corporate bond holdings; and

@ actuarial risk: the ultimate cost of providing pension benefits is affected by inflation rates and

members’ life expectancy. The net present value of the obligations is affected by the market yield

on high-quality corporate bonds used to discount the obligations.

Changes in the principal actuarial assumptions based on market data, such as inflation and the discount

rate, and experience, such as life expectancy, expose the Group to fluctuations in the net IAS 19 liability

and the net finance cost.

Balfour Beatty Pension Fund

The investment strategy of the BBPF is to hold assets of appropriate liquidity and marketability to

generate income and capital growth. The BBPF invests partly in a diversified range of assets including

corporate bonds, equities and hedge funds in anticipation that, over the longer term, they will grow in

value faster than the scheme’s obligations. The BBPF has been undertaking a phased withdrawal from

equities and hedge funds. The remaining BBPF assets are principally fixed and index-linked bonds and

derivatives, providing protection against movements in inflation and interest rates and hence enhancing

the resilience of the funding level of the scheme. The performance of the assets is measured against

market indices.

The BBPF’s defined benefit section is exposed to a number of liability related risks, namely changes

in gilt yields, inflation and the longevity of the scheme’s members.

With respect to interest rate and inflation risks, the trustee seeks to mitigate the majority of these risks

through its liability hedging portfolio. This is a segregated portfolio of hedging assets which includes

physical gilts, gilt repurchase agreements and interest rate and inflation swaps. The current objective

of the portfolio is to hedge 100% of the impact that changes in interest rates and inflation can have on

the funding position.

The BBPF’s Fiduciary Manager and Investment Committee closely monitor the collateral being held

within the liability hedging portfolio to ensure that the scheme holds sufficient collateral to support

its liability hedging programme.

With respect to longevity risk the BBPF has a longevity swap contract as part of the investment

portfolio which will provide income in the event that pensions are paid out for longer. The fair value

of the longevity swap has been included as part of the fair value of plan assets.

The Group operates a Scottish Limited Partnership (SLP) structure which holds the Group’s 40%

interest in the Birmingham Hospital PFI investment and the Group’s 15% share of the Connect Plus

(M25) asset. The BBPF is a partner in the SLP and is entitled to a share of the income of the SLP. In

accordance with IFRS 10 Consolidated Financial Statements, the SLP is deemed to be controlled by

the Group, which retains the ability to substitute the investment in the Birmingham Hospital PFI

investment and the Connect Plus (M25) asset for other investments from time to time.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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31 Retirement benefit assets and liabilities continued

31.1 Introduction continued

Balfour Beatty Pension Fund continued

Under IAS 19, the investment held by the BBPF in the SLP does not constitute a plan asset and

therefore the pension deficit presented in these financial statements does not reflect the BBPF’s

interest in the SLP. Distributions from the SLP to the BBPF are reflected in the Group’s financial

statements as pension contributions on a cash basis. In 2025, the BBPF received distributions of £2m

from the SLP (2024: £2m), which were used to pay defined contribution costs. The Company and the

trustees have agreed that the BBPF’s partnership interest in the SLP will be terminated in 2026.

Balfour Beatty and the trustees of the BBPF have reconfirmed their commitment to a journey plan

approach to managing the BBPF with the aim of reaching self-sufficiency by 2026. The Company and

trustees previously agreed the 31 March 2022 formal valuation and as a result Balfour Beatty made

deficit contributions to the BBPF of £5m in 2025 (2024: £22m). The Company and trustees have now

agreed the 31 March 2025 formal valuation and as a result, the Company made a deficit contribution to

the BBPF of £30m in February 2026.

The Company and the trustees have agreed that once the Defined Benefit section moves into surplus

as measured on an agreed set of parameters, further surplus can be used by the Company to meet its

existing obligations to the Defined Contribution section of the BBPF. Given the current strong position

of the BBPF, the Group is expecting to start receiving a cash benefit from the surplus by 2027. In

certain circumstances, were the funding level in the Defined Benefit section to fall below certain

pre-agreed thresholds, surplus offset in this way would need to be repaid to the Defined Benefit

section by the Company.

This agreement constitutes a minimum funding requirement (MFR) under IFRIC 14 IAS 19: The Limit

on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The Group has not

recognised any liabilities in relation to this MFR as any surplus of deficit contributions to the BBPF

would be recoverable by way of a refund and the Group has the unconditional right to the surplus and

controls the run-off of the benefit obligations once all other obligations of the BBPF have been settled.

Railways Pension Scheme

The RPS is a shared cost scheme. The legal responsibility of the Group in the RPS is approximately

60% of the scheme’s assets and liabilities based on the relevant provisions of the trust deed and rules

and trustee guidelines regarding future surplus apportionments and deficit financing.

The assumed cost of providing future service benefits is split between the Group and the members in

the ratio 60:40.

Because of a declining population of active members, it has become less likely that the Group’s costs

of meeting any deficits would be capped in line with its strict legal obligation of 60% as members

might only be able to afford to fund a small proportion of the scheme deficit. It has therefore been

assumed that the Group will be responsible for 100% of any deficit and the balance sheet assets and

obligations disclosed, therefore, are equal to 100% of the total scheme assets and obligations.

The RPS invests in a range of pooled investment funds intended to generate a combination of capital

growth and income and, as determined by the trustee, taking account of the characteristics of the

obligations and the trustee’s attitude to risk. The majority of the RPS’s assets that are intended to

generate additional returns, over the rate at which the obligations are expected to grow, are invested in

three pooled growth funds. These funds are invested in a wide range of asset classes and the fund

manager Railpen has the discretion to vary the asset allocation to reflect its views on the relative

attractiveness of different asset classes at any time. The remaining assets in the RPS are principally

invested in the Liability Driven Investment (LDI) Pooled Fund, which invests in a range of fixed interest

and inflation-linked UK government bonds and derivatives; and the Long-Term Income Pooled Fund,

which invests in a range of illiquid, cash flow-generating assets including infrastructure, real estate

and credit.

The RPS is exposed to a number of liability related risks, namely changes in gilt yields, inflation and

the longevity of the scheme’s members. With respect to interest rate and inflation risks, the strategic

asset allocation was reviewed and amended in 2023 to mitigate these risks by increasing the allocation

to fixed and index-linked bond pooled funds and amended further in 2025 by investing in the LDI

Pooled Fund. The current objective of the portfolio is to hedge around 100% of the impact that

changes in interest rates and inflation can have on the funding position.

The formal triennial funding valuation of the RPS as at 31 December 2022 was completed in March

2024, with the Company agreeing to continue to make fixed deficit contributions of £6m per annum

until February 2025. This agreement constitutes an MFR under IFRIC 14 IAS 19: The Limit on a

Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The Company has not

recognised any liabilities in relation to this MFR as any surplus of deficit contributions to the RPS would be

recoverable by way of a refund and the Group has the unconditional right to the surplus and controls

the run-off of the benefit obligations once all other obligations of the RPS have been settled. The next

formal triennial funding valuation is due with effect from 31 December 2025.

Other schemes

Other schemes comprise unfunded post-retirement benefit obligations in Europe, the majority of

which are closed to new entrants, and deferred compensation schemes in North America, where an

element of employees’ compensation is deferred and invested in investments in mutual funds (as

disclosed in Note 21.1) in a trust, the assets of which are for the ultimate benefit of the employees but

are available to the Group’s creditors in the event of insolvency.

The Group also participates in The Plumbing & Mechanical Services Industry Pension Scheme

(Plumbers Scheme), which is an industry-wide non-associated multi-employer defined benefit

scheme. As the Plumbers Scheme does not segregate assets and liabilities between the different

participating employers, the Group’s only obligation to the Plumbers Scheme is to pay the

contributions requested by the scheme trustees as they fall due. In accordance with IAS 19, this

obligation has been accounted for on a defined contribution basis and any employer contributions paid

are charged to the income statement. To confirm, there have been no such contributions over 2025.

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31 Retirement benefit assets and liabilities continued

31.1 Introduction continued

Membership of the principal schemes

Balfour Beatty Pension Fund 2025 Railways Pension Scheme 2025 Balfour Beatty Pension Fund 2024 Railways Pension Scheme 2024

Number

members

Defined

benefit

obligations

£m

Average

duration

Years

Number

members

Defined

benefit

obligations

£m

Average

duration

Years

Number

members

Defined

benefit

obligations

£m

Average

duration

Years

Number

members

Defined

benefit

obligations

£m

Average

duration

Years

Defined benefit

– active members 1 – 13 57 26 14 1 1 11 61 25 15

– deferred pensioners 7,6 6 5 753 15 843 78 14 8,223 912 16 896 80 15

– pensioners, widow(er)s and

dependants 16,630 1,469 8 1,951 174 9 16,656 1,335 8 1,948 182 10

Defined contribution 16,951 – – – – – 16,619 – – – – –

Total 41,247 2,222 11 2,851 278 11 41,499 2,248 11 2,905 287 12

31.2 IAS 19 accounting valuations

Principal actuarial assumptions for the IAS 19 accounting valuations of the Group’s principal schemes

2025 2024

Balfour Beatty

Pension

Fund

Railways

Pension

Scheme

Balfour Beatty

Pension

Fund

Railways

Pension

Scheme

Discount rate 5.50 5.50 5.55 5.55

Inflation rate – RPI 2.90 2.90 3.25 3.25

– CPI 2.40 2.50 2.75 2.90

Future increases in pensionable salary 2.40 2.50 2.75 2.90

Rate of increase in pensions in payment (or such other rate as is guaranteed) 2.80 2.60 3.05 2.95

The BBPF actuary undertakes regular mortality investigations as part of the formal triennial valuation based on the experience exhibited by pensioners of the BBPF and due to the size of the membership of the

BBPF is able to make comparisons of this experience with the mortality rates set out in the various published mortality tables. This research is taken into account in the BBPF’s mortality assumptions, with the

last such mortality investigation performed over 2025 as part of the 31 March 2025 triennial valuation. The mortality assumptions as at 31 December 2025 have been updated from those adopted at the previous

year end to reflect this mortality investigation, and reflect the experience of BBPF pensioners for the period to 30 September 2024, with the exception that the future improvements assumptions have been

updated to reflect the most recent model available, with the Group setting future improvements in line with the Continuous Mortality Investigation (CMI) 2024 core projections model.

Similarly, the RPS actuary also undertakes regular mortality investigations as part of the formal triennial valuation based on the experience exhibited by pensioners of the RPS, with the last such analysis being

completed as part of the 31 December 2022 triennial valuation. With no new mortality investigation performed over the year, the mortality assumptions as at 31 December 2025 are consistent with those

adopted at the previous year end, with the exception that the future improvements assumptions have been updated to reflect the most recent model available.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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31 Retirement benefit assets and liabilities continued

31.2 IAS 19 accounting valuations continued

BBPF life expectancies

		2025		2024
		Average life expectancy		Average life expectancy
		at 65 years of age		at 65 years of age
	Male	Female	Male	Female
Members in receipt of a pension	21.9	2 3.1	21.3	23.0
Members not yet in receipt of a pension (current age 50)	22.7	24.0	22.2	23.9

RPS life expectancies

		2025		2024
		Average life expectancy		Average life expectancy
		at 65 years of age		at 65 years of age
	Male	Female	Male	Female
Members in receipt of a pension	21.1	22.8	20.8	22.7
Members not yet in receipt of a pension (current age 50)	21.9	23.7	21.6	23.6

Amounts recognised in the income statement

The BBPF defined contribution employer contributions paid and charged to the income statement have been separately identified in the table below and the defined contribution section assets and liabilities

amounting to £934m (2024: £803m) have been excluded from the tables on pages 226 to 229. Defined contribution charges for other schemes include contributions to multi-employer pension schemes.

		2025				2024
	Balfour				Balfour
	Beatty	Railways			Beatty	Railways
	Pension	Pension	Other		Pension	Pension	Other
	Fund	Scheme	schemes	Total	Fund	Scheme	schemes	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Group
Current service cost	(1)	(1)	–	(2)	(1)	(1)	(1)	(3)
Defined contribution charge	(58)	–	(7)	(65)	(50)	–	(6)	(56)
Included in employee costs (Note 7)	(59)	(1)	(7)	(67)	(51)	(1)	(7)	(59)
Interest income	123	15	–	138	118	15	–	133
Interest cost	(120)	(15)	(2)	(137)	(113)	(15)	(1)	(129)
Net finance income/(cost) (Note 8)	3	–	(2)	1	5	–	(1)	4
Total (charged)/credited to income statement	(56)	(1)	(9)	(66)	(46)	(1)	(8)	(55)

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31 Retirement benefit assets and liabilities continued

31.2 IAS 19 accounting valuations continued

Amounts recognised in the statement of comprehensive income

		2025				2024
	Balfour				Balfour
	Beatty	Railways			Beatty	Railways
	Pension	Pension	Other		Pension	Pension	Other
	Fund	Scheme	schemes	Total	Fund	Scheme	schemes	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Actuarial movements on pension scheme obligations	(10)	4	(2)	(8)	207	29	(1)	235
Actuarial movements on pension scheme assets	(50)	(4)	–	(54)	(292)	(45)	–	(337)
Total actuarial movements recognised in the statement of comprehensive income (Note 33.1)	(60)	–	(2)	(62)	(85)	(16)	(1)	(102)
Cumulative actuarial movements recognised in the statement of comprehensive income	(481)	(34)	(25)	(540)	(421)	(34)	(23)	(478)

The actual return on plan assets was a gain of £84m (2024: £204m loss).

Amounts recognised in the balance sheet

		2025				2024
	Balfour				Balfour
	Beatty	Railways			Beatty	Railways
	Pension	Pension	Other		Pension	Pension	Other
	Fund	Scheme	schemes †	Total	Fund	Scheme	schemes †	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Present value of obligations	(2,222)	(279)	(32)	(2,533)	(2,248)	(287)	(34)	(2,569)
Fair value of plan assets	2,213	272	–	2,485	2,291	280	–	2,571
(Liabilities)/assets in the balance sheet	(9)	(7)	(32)	(48)	43	(7)	(34)	2

† Investments in mutual funds of £16m (2024: £20m) are held to satisfy the Group’s deferred compensation obligations (Note 21.1).

The defined benefit obligations comprise £32m (2024: £34m) arising from wholly unfunded plans and £2,501m (2024: £2,535m) arising from plans that are wholly or partly funded.

There was a small reduction in corporate bond yields over 2025, which led to a corresponding decrease in the IAS 19 discount rate. There was also a reduction in future inflationary expectations over the year,

with an overall decrease in the present value of obligations from 31 December 2024 to 31 December 2025 as a result of financial actuarial movements over 2025. However, this was more than offset by the

membership experience loss arising from the update in calculations to reflect the membership data underlying the 31 March 2025 BBPF valuation.

There was also a small reduction of the schemes’ assets (excluding the value of the longevity hedge) due to changes in financial market conditions over the year, which is to be expected given the level of

hedging in place.

In June 2023, the High Court handed down a decision in the case of Virgin Media Limited v NTL Pension Trustees II Limited and others relating to the validity of certain historical pension changes due to the lack

of actuarial confirmation required by law. On 2 September 2025, the Government published draft amendments to the Pensions Scheme Bill which would give affected pension schemes the ability to retrospectively

obtain written actuarial confirmation that historical benefit changes met the necessary standards. The draft legislation will need to be agreed by both Houses of Parliament before it passes into law.

Following the publication of draft legislation, the Group does not expect the Virgin Media ruling to give rise to any additional liabilities and so the defined benefit obligations for the BBPF and the RPS have not

been adjusted and continue to reflect the benefits currently administered.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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31 Retirement benefit assets and liabilities continued

31.2 IAS 19 accounting valuations continued

Movement in the present value of obligations

		2025				2024
	Balfour Beatty	Railways			Balfour Beatty	Railways
	Pension	Pension	Other		Pension	Pension	Other
	Fund	Scheme	schemes	Total	Fund	Scheme	schemes	Total
	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January	(2,248)	(287)	(34)	(2,569)	(2,501)	(320)	(35)	(2,856)
Currency translation differences	–	–	1	1	–	–	1	1
Current service cost	(1)	(1)	–	(2)	(1)	(1)	(1)	(3)
Interest cost	(120)	(15)	(2)	(137)	(113)	(15)	(1)	(129)
Actuarial movements from reassessing the difference between RPI and CPI	2	–	–	2	(2)	–	–	(2)
Actuarial movements from changes in demographic assumptions	–	(2)	–	(2)	3	1	–	4
Other financial actuarial movements	21	6	(2)	25	214	28	(1)	241
Experience losses	(33)	–	–	(33)	(8)	–	–	(8)
Total actuarial movements	(10)	4	(2)	(8)	207	29	(1)	235
Benefits paid	157	20	5	182	160	20	3	183
At 31 December	(2,222)	(279)	(32)	(2,533)	(2,248)	(287)	(34)	(2,569)

Movement in the fair value of plan assets

		2025			2024
	Balfour Beatty	Railways		Balfour Beatty	Railways
	Pension	Pension		Pension	Pension	Total
	Fund	Scheme	Total	Fund	Scheme	2024
	£m	£m	£m	£m	£m	£m
At 1 January	2,291	280	2,571	2,602	323	2,925
Interest income	123	15	138	118	15	133
Actuarial movements	(50)	(4)	(54)	(292)	(45)	(337)
Contributions from employer
– regular funding	1	1	2	1	1	2
– ongoing deficit funding	5	–	5	22	6	28
Benefits paid	(157)	(20)	(177)	(160)	(20)	(180)
At 31 December	2,213	272	2,485	2,291	280	2,571

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31 Retirement benefit assets and liabilities continued

31.2 IAS 19 accounting valuations continued

Fair value of the assets held by the schemes at 31 December

		2025			2024
		Railways			Railways
	Balfour Beatty	Pension		Balfour Beatty	Pension
	Pension Fund	Scheme †	Total	Pension Fund	Scheme †	Total
	£m	£m	£m	£m	£m	£m
Return-seeking	222	94	316	285	105	390
– Developed nation equities #	79	–	79	95	–	95
– Hedge funds #	55	–	55	101	–	101
– Return-seeking growth pooled funds $	–	94	94	–	105	105
– Other return-seeking assets #@	88	–	88	89	–	89
Liability-matching bond-type assets	1,743	161	1,904	1,740	172	1,912
– Corporate bonds	1,059	–	1,059	954	–	954
– Fixed interest gilts	823	–	823	844	–	844
– Index-linked gilts ^	(87)	3	(84)	6	113	119
– Currency hedging	8	–	8	(18)	–	(18)
– Liability-matching pooled funds ~	–	158	158	–	59	59
– Interest and inflation rate swaps	(60)	–	(60)	(46)	–	(46)
Property #	28	–	28	29	–	29
Secure income assets #%	92	–	92	100	–	100
Fair value longevity swap &	(34)	–	(34)	(25)	–	(25)
Cash and other	162	17	179	162	3	165
Total	2,213	272	2,485	2,291	280	2,571

† The amounts represent 100% of the scheme’s assets.

^ Index-linked gilts totalling £3m (2024: £113m) are held in a pooled investment vehicle with underlying securities that have quoted prices in active markets. Included in index-linked gilts are loan repurchase agreements with a liability of £542m at 31 December 2025 (2024 £411m).

# Level 3 assets with valuations based on unobservable inputs held by the BBPF include hedge funds, property funds, developed nation equities, secure income assets, other return-seeking assets and £239m of corporate bonds, and total £520m (2024: £527m). These are

pooled investments stated at fair value provided by the fund managers, of which £125m (2024: £170m) have been valued on September 2025 valuations and £nil (2024: £13m) on November 2025 valuations, for which valuations were adjusted for cash movements that

occurred in the last quarter of the year as a result of December 2025 valuations not being available as at the reporting date. The Directors consider these values to be a fair approximation for these assets at 31 December 2025.

@ Other return-seeking assets are alternative beta assets, which provide exposure to a range of risk premia that are intended to diversify portfolio returns from traditional equity and credit markets.

Secure income assets reflect more illiquid investments that offer long-term contractual cash flows that can be used for the payment of pensions.

$ The RPS return-seeking growth pooled funds assets are the Growth Pooled Fund, Illiquid Growth Pooled Fund and the Private Equity Pooled Fund.

The RPS liability-matching pooled funds are the LDI Pooled Fund and the Long-Term Income Pooled Fund.

& The fair market value of the longevity swap is calculated by taking the present value of the expected cash flows from the floating leg using a market-related discount rate and current best-estimates of market mortality assumptions and risk fees, less the corresponding

present value of the fixed leg cash flows that are required under the contract. As at 31 December 2025, the fair value has been calculated using the cash flows from the experience collateral calculations performed by Zurich Assurance Limited as at 31 October 2025 (with

the floating leg reflecting member mortality experience up to 30 September 2025), rolled forward and adjusted to allow for the relevant assumptions at 31 December 2025.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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31 Retirement benefit assets and liabilities continued

31.2 IAS 19 accounting valuations continued

Estimated contributions expected to be paid to the Group’s principal defined benefit schemes during 2026

		Railways
	Balfour Beatty	Pension
	Pension Fund	Scheme	Total
	2026	2026	2026
	£m	£m	£m
Regular funding	2	1	3
Ongoing deficit funding	30	–	30
Total contributions	32	1	33
Estimated BBPF running costs to be funded from deficit contributions	–	–	–
Estimated total cash contributions	32	1	33

The sensitivity analysis below has been determined based on reasonably possible changes in key assumptions occurring at the end of the reporting period. In each case the relevant change in assumption

occurs in isolation from potential changes in other assumptions. In practice more than one variable is likely to change at the same time. The sensitivities have been calculated using the projected unit credit method.

Sensitivity of the Group’s retirement benefit obligations to different actuarial assumptions

		2025				2024
	Sensitivity to increase in			Sensitivity to decrease in		Sensitivity to increase in		Sensitivity to decrease in
	assumptions			assumptions		assumption		assumption
	(Decrease)/	(Decrease)/	Increase/	Increase/	(Decrease)/	(Decrease)/	Increase/	Increase/
	increase in	increase in	(decrease) in	(decrease) in	increase in	increase in	(decrease) in	(decrease) in
	obligations	obligations	obligations	obligations	obligations	obligations	obligations	obligations
Assumptions	%	£m	%	£m	%	%	%	%
Discount rate (0.5% change)	(5.0)%	(124)	5.4%	136	(5.2)%	(132)	5.7%	145
Market expectation of RPI inflation (0.5% change)	3.5%	87	(3.7)%	(93)	3.6%	90	(3.7)%	(94)
Salary growth (0.5% change)	<0.1%	–	<(0.1)%	–	<0.1%	–	<(0.1)%	–
Life expectancy (1 year change)	4.0%	101	(4.2)%	(105)	3.7%	95	(3.8)%	(96)

Sensitivity of the Group’s retirement benefit assets to changes in market conditions

	2025		2024
	(Decrease)/	(Decrease)/	(Decrease)/	(Decrease)/
	increase	increase	increase	increase
	in assets	in assets	in assets	in assets
	%	£m	%	%
Increase in interest rates (0.5%)	(4.9)%	(123)	(5.0)%	(127)
Increase in market expectation of RPI inflation (0.5%)	3.4%	85	3.4%	88

The asset sensitivities only take into account the impact of the changes in market conditions on bond-type assets. The value of the schemes’ return-seeking assets is not directly correlated with movements in

interest rates or RPI inflation.

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31 Retirement benefit assets and liabilities continued

31.2 IAS 19 accounting valuations continued

Year end historical information for the Group’s retirement defined benefit schemes

	2025	2024	2023	2022	2021
	£m	£m	£m	£m	£m
Present value of obligations	(2,533)	(2,569)	(2,856)	(2,803)	(4,201)
Fair value of assets	2,485	2,571	2,925	3,026	4,432
Surplus	(48)	2	69	223	231
Experience adjustment for obligations	(33)	(8)	(2)	21	1
Experience adjustment for assets	(54)	(337)	(106)	(1,368)	87
Total deficit funding	5	28	25	41	39

31.3 Latest formal triennial funding valuations

		Railways
	Balfour Beatty	Pension
	Pension Fund	Scheme
	£m	£m
Date of last formal triennial funding valuation	31/03/2025	31/12/2022
Scheme deficit
Market value of assets	3,055	342
Present value of obligations	(3,062)	(342)
Surplus in defined benefit scheme	(7)	–
Funding level	99.8%	100.0%

32 Share capital

	2025		2024
	Million	£m	Million	£m
Called-up share capital in issue	493	247	517	259

All issued ordinary shares are fully paid. Ordinary shares have a nominal value of £0.50 each and carry no right to fixed income but each share carries the right to one vote at general meetings of the Company.

No ordinary shares were issued during the current or prior year.

In 2025 the Company commenced the fifth phase of its share buyback programme, which completed on 12 December 2025. The Company purchased 24.2m (2024: 27.1m) shares for a total consideration of

£125m (2024: £100m) and held those shares in treasury with no voting rights. The purchase of those shares, together with associated fees and stamp duty amounting to £1m (2024: £1m), utilised £126m

(2024: £101m) of the Company’s distributable profits.

On 24 December 2025, the Company cancelled the 24.2m treasury shares purchased through the 2025 phase of its share buyback programme (2024: 27.1m). This cancellation resulted in a decrease in called-up

share capital in issue of £12m (2024: £13m) and a corresponding increase in the capital redemption reserve.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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33 Movements in equity

33.1 Group

				Share of joint			Other reserves
				ventures’
		Share	Capital	and associates’		PPP	Currency			Non-
	Called-up	premium	redemption	reserves	Hedging	financial	translation		Retained	controlling
	share capital	account	reserve	(Note 20.6)	reserves	assets	reserve	Other µ	profits	interests	Total
	2025	2025	2025	2025	2025	2025	2025	2025	2025	2025	2025
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January 2025	259	176	87	(64)	(4)	(1)	121	46	501	9	1,130
Profit for the year	–	–	–	64	–	–	–	–	199	1	264
Currency translation differences	–	–	–	(13)	–	–	(19)	–	–	–	(32)
Actuarial movements on retirement benefit assets/liabilities	–	–	–	1	–	–	–	–	(62)	–	(61)
Fair value revaluations
– PPP financial assets	–	–	–	8	–	–	–	–	–	–	8
– cash flow hedges	–	–	–	8	–	–	–	–	–	–	8
– investments in mutual funds measured at fair value through OCI	–	–	–	–	–	–	–	1	–	–	1
Recycling of reserves to income statement	–	–	–	24	–	–	–	–	–	–	24
Tax on items recognised in other comprehensive income	–	–	–	(4)	–	–	–	–	15	–	11
Total comprehensive income/(loss) for the year	–	–	–	88	–	–	(19)	1	152	1	223
Ordinary dividends	–	–	–	–	–	–	–	–	(64)	(1)	(65)
Joint ventures’ and associates’ dividends	–	–	–	(59)	–	–	–	–	59	–	–
Purchase of treasury shares	–	–	–	–	–	–	–	–	(126)	–	(126)
Cancellation of ordinary shares	(12)	–	12	–	–	–	–	–	–	–	–
Movements relating to share-based payments +	–	–	–	–	–	–	–	2	(12)	–	(10)
Movements relating to disposals of joint ventures and associates	–	–	–	4	–	–	–	–	(4)	–	–
At 31 December 2025	247	176	99	(31)	(4)	(1)	102	49	506	9	1,152

µ Other reserves include £22m of special reserve.

+ Movements relating to share-based payments include a £5m tax credit recognised directly within retained profits.

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33 Movements in equity continued

33.1 Group continued

				Share of joint		Other reserves
				ventures’
		Share	Capital	and associates’		PPP	Currency			Non-
	Called-up	premium	redemption	reserves	Hedging	financial	translation		Retained	controlling
	share capital	account	reserve	(Note 20.6)	reserves	assets	reserve	Other µ	profits	interests	Total
	2024	2024	2024	2024	2024	2024	2024	2024	2024	2024	2024
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
At 1 January 2024	272	176	74	(27)	(5)	1	115	46	546	10	1,208
Profit for the year	–	–	–	59	–	–	–	–	119	–	178
Currency translation differences	–	–	–	3	–	–	6	–	–	–	9
Actuarial movements on retirement benefit assets/liabilities	–	–	–	–	–	–	–	–	(102)	–	(102)
Fair value revaluations
– PPP financial assets	–	–	–	(48)	–	(2)	–	–	–	–	(50)
– cash flow hedges	–	–	–	10	1	–	–	–	–	–	11
– investments in mutual funds measured at fair value through OCI	–	–	–	–	–	–	–	2	–	–	2
Tax on items recognised in other comprehensive income	–	–	–	10	–	–	–	–	26	–	36
Total comprehensive income/(loss) for the year	–	–	–	34	1	(2)	6	2	43	–	84
Ordinary dividends	–	–	–	–	–	–	–	–	(61)	(1)	(62)
Joint ventures’ and associates’ dividends	–	–	–	(71)	–	–	–	–	71	–	–
Purchase of treasury shares	–	–	–	–	–	–	–	–	(101)	–	(101)
Cancellation of ordinary shares	(13)	–	13	–	–	–	–	–	–	–	–
Movements relating to share-based payments +	–	–	–	–	–	–	–	(2)	3	–	1
At 31 December 2024	259	176	87	(64)	(4)	(1)	121	46	501	9	1,13 0

µ Other reserves include £22m of special reserve.

+ Movements relating to share-based payments include a £4m tax credit recognised directly within retained profits.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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33 Movements in equity continued

33.2 Company

	Called-up	Share	Capital	Other reserves
	share	premium	redemption			Retained
	capital	account	reserve	Special reserve	Other	profits	Total
	£m	£m	£m	£m	£m	£m	£m
At 1 January 2024	272	176	74	22	127	659	1,330
Profit for the year	–	–	–	–	–	135	135
Currency translation differences	–	–	–	–	–	2	2
Total comprehensive profit for the year	–	–	–	–	–	137	137
Ordinary dividends	–	–	–	–	–	(61)	(61)
Purchase of treasury shares	–	–	–	–	–	(101)	(101)
Cancellation of ordinary shares	(13)	–	13	–	–	–	–
Movements relating to share-based payments +	–	–	–	–	8	(11)	(3)
At 31 December 2024	259	176	87	22	135	623	1,302
Profit for the year	–	–	–	–	(1)	136	135
Currency translation differences	–	–	–	–	–	(2)	(2)
Total comprehensive profit for the year	–	–	–	–	(1)	134	133
Ordinary dividends	–	–	–	–	–	(64)	(64)
Purchase of treasury shares	–	–	–	–	–	(126)	(126)
Cancellation of ordinary shares	(12)	–	12	–	–	–	–
Movements relating to share-based payments +	–	–	–	–	13	(28)	(15)
At 31 December 2025	247	176	99	22	147	539	1,230

+ Movements relating to share-based payments include £nil tax credit (2024: £nil) recognised directly within retained profits.

As permitted under Section 408 of the Companies Act 2006, the Company has elected not to present its statement of comprehensive income (including the profit and loss account) for the year. Balfour Beatty plc

reported a profit for the financial year ended 31 December 2025 of £135m (2024: £135m).

During the year, £126m of the Company’s distributable profits were utilised for the purchase of shares into treasury (2024: £101m) and 24.2m (2024: 27.1m) treasury shares were cancelled. See Note 32.

The majority of the retained profits of Balfour Beatty plc are distributable. By special resolution on 13 May 2004, confirmed by the court on 16 June 2004, the share premium account was reduced by £181m

and the £4m capital redemption reserve was cancelled, effective on 25 June 2004, and a special reserve of £185m was created. This reserve becomes distributable to the extent of future increases in share

capital and share premium account, of which £nil occurred in 2025 (2024: £nil).

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33 Movements in equity continued

33.3 Balfour Beatty Employee Share Ownership Trust

The retained profits in the Group and the retained profits of the Company are stated net of investments

in Balfour Beatty plc ordinary shares acquired by the Group’s employee discretionary trust, the Balfour

Beatty Employee Share Ownership Trust, to satisfy awards under the Performance Share Plan, the

Deferred Bonus Plan and the Restricted Share Plan. In 2025, 5.0m (2024: 2.9m) shares were purchased

at a cost of £31m (2024: £12m). The market value of the 5.7m (2024: 5.9m) shares held by the trust

at 31 December 2025 was £40.6m (2024: £26.8m). The carrying value of these shares was £32.4m

(2024: £21.2m).

Following confirmation of the performance criteria at the end of the performance period in the case

of the Performance Share Plan, and at the end of the vesting period in the case of the Deferred

Bonus Plan and the Restricted Share Plan, the appropriate number of shares will be unconditionally

transferred to participants. In 2025, 3.1m shares were transferred to participants in relation to the

April 2022 awards under the Performance Share Plan (2024: 2.5m shares were transferred to

participants in relation to the March 2021 and June 2021 awards under the Performance Share Plan),

0.8m shares were transferred to participants in relation to awards under the Deferred Bonus Plan

(2024: 0.5m shares) and 1.2m shares were transferred to participants in relation to awards under

the Restricted Share Plan (2024: 1.2m).

The trustees have waived the rights to dividends on shares held by the trust. Participants in the

schemes receive an award of shares to represent the dividends which would have been payable

on the shares since the date of grant.

Other reserves in the Group and Company include £12.5m (2024: £10.2m) relating to unvested

Performance Share Plan awards, £3.2m (2024: £3.8m) relating to unvested Restricted Share Plan

awards and £4.3m (2024: £3.3m) relating to unvested Deferred Bonus Plan awards.

34 Notes to the statement of cash flows

34.1 Cash from/(used in) operations

2025

Notes

Underlying

items

£m

Non-

underlying

items

£m £m

2024

£m

Profit from operations 252 32 284 173

Share of results of joint ventures and

associates 20 (64) – (64) (59)

Depreciation of property, plant and

equipment 17 30 – 30 31

Depreciation of right-of-use assets 18 68 – 68 60

Depreciation of investment properties 19 4 – 4 1

Amortisation of other intangible assets 15 6 3 9 10

Amortisation of contract fulfilment assets 12 – 12 27

Pension deficit payments, including

regular funding 31.2 (10) – (10) (30)

Movements relating to equity-settled

share-based payments 16 – 16 10

Gain on disposal of interests in

investments

35.2/

35.3 (32) – (32) (43)

Gain on disposal of Omnicom Balfour

Beatty 10.2 – (23) (23) –

Profit on disposal of property, plant

and equipment (3) – (3) (2)

Other non-cash items (4) – (4) –

Operating cash flows before movements

in working capital 275 12 287 178

Decrease in operating working capital 408 99

Inventories 2 (34)

Contract assets (19) 74

Trade and other receivables (217) (225)

Contract liabilities 395 91

Trade and other payables 264 (6)

Provisions (17) 199

Cash from operations 695 277

1 Before non-underlying items (Notes 2.10 and 10).

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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34 Notes to the statement of cash flows continued

34.2 Cash and cash equivalents

	2025		2024
	Group	Company	Group	Company
	£m	£m	£m	£m
Cash and deposits	1,191	202	1,084	218
Term deposits	476	461	209	200
Cash balances within infrastructure
concessions	193	–	265	–
Bank overdrafts	(68)	–	(185)	(171)
	1,792	663	1,373	247

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term,

highly liquid investments with original maturities of less than three months.

34.3 Analysis of movements in borrowings

	Infrastructure
	concessions
	non-recourse	US private	Bank
	project finance	placement	overdrafts	Total
	£m	£m	£m	£m
At 1 January 2024	(570)	(162)	(104)	(836)
Currency translation differences	(1)	(4)	–	(5)
Proceeds of loans	(36)	(39)	(185)	(260)
Repayments of loans	9	40	104	153
Arrangement fees	3	–	–	3
Amortisation of fair value adjustment on loan	(5)	–	–	(5)
At 31 December 2024	(600)	(165)	(185)	(950)
Currency translation differences	4	12	–	16
Proceeds of loans	(22)	–	(68)	(90)
Repayments of loans – other Repayment of loan – disposal of Foundry	8	–	185	193
Court (Note 35.2.3)	22	–	–	22
Loan indexation	(11)	–	–	(11)
Amortisation of fair value adjustment on loan	(5)	–	–	(5)
At 31 December 2025	(604)	(153)	(68)	(825)

The Group retains its core Revolving Credit Facility (RCF) with a maturity of June 2028. The RCF

remains a Sustainability Linked Loan (SLL) and the Group continues to be incentivised to deliver annual

measurable performance improvement in three key areas: Carbon Emissions, Social Value generation

and an independent Environmental, Social and Governance (ESG) rating score. The RCF remained

undrawn at 31 December 2025.

The Group retains an additional £30m bilateral committed facility that has materially the same terms

and conditions as the RCF, with a maturity of December 2027. The facility is also an SLL, including

metrics that mirror the RCF. As of 31 December 2025, the facility remained undrawn.

The US private placement (USPP) notes are comprised of a series of US-denominated loan notes with

a weighted average maturity of 4.9 years and an average coupon rate of 6.5% per annum. The earliest

maturity for these notes will be in June 2027 for US$35m.

35 Acquisitions and disposals

35.1 Current and prior year acquisitions

There were no acquisitions in 2025.

In 2024, the Group acquired an additional 17% of Denver Transit Operators LLC (DTO), an existing joint

venture of the Group, for a purchase price of £6m, which increased the Group’s holding in this joint

venture to 50%. The Group continues to apply equity-method accounting for DTO and has recognised

a customer contract intangible asset of £9m as a result of this acquisition. Refer to Note 20.2.

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35 Acquisitions and disposals continued

35.2 Current year disposals

						Net (assets)/
				Percentage	Cash	liabilities	Amount recycled	Direct cost	Underlying	Non-underlying
				disposed	consideration	disposed	from reserves	incurred	gain	gain
Notes	Disposal date	Entity/asset	Structure of sale	%	£m	£m	£m	£m	£m	£m
35.2.1	1 August 2025	Omnicom Balfour Beatty	Asset sale	n/a	24	2	–	(3)	–	23
35.2.2	30 September 2025	Paces Brook ^	Asset sale	n/a	5	(1)	–	–	4	–
35.2.3	18 December 2025	Foundry Courtyard (Kennedy Street)	Asset sale	n/a	48	(25)	–	–	23	–
35.2.4	19 December 2025	Sunderland Street Lighting, South Tyneside	Equity sale	20% respectively	7	(7)	–	–	–	–
		Street Lighting, Coventry Street Lighting,
		Cambridgeshire Street Lighting and
		Northamptonshire Street Lighting projects #
35.2.5	19 December 2025	Connect CNDR Ltd #	Equity sale	25%	6	(6)	1	–	1	–
		Gwynt y Môr, Humber Gateway & Thanet		60%; 20%;	20%
35.2.6	23 December 2025	offshore transmission projects #	Equity sale	respectively	74	(43)	(25)	–	6	–
35.2.7		Other #		n/a	2	–	–	–	2	–
					166 ~	(80)	(24)	(3)	36	23
		Less: Repayment of debt following disposal of Foundry Courtyard			(22)
		Less: Cash proceeds not included in the Directors’ valuation +			(24)
			Disposal proceeds per the Directors’ valuation (page 33)		120

# Disposal of joint venture.

^ Disposal of asset within a joint venture entity.

+ The Directors’ valuation does not include proceeds in relation to the Group’s sale of Omnicom Balfour Beatty.

~ Proceeds from the sale within joint venture entities are included within Dividends received from joint ventures and associates – Infrastructure Investments and within Return of equity from joint ventures and associates in the statement of cash flows.

35.2.1 On 1 August 2025, the Group completed the disposal of Omnicom Balfour Beatty, its specialist rail measurement hardware and intelligent software business, for a consideration of £24m to Hitachi Rail.

After deducting cost of disposal, the Group recorded a gain on disposal of £23m within its non-underlying results in the year. Refer to Note 10.2.3.

35.2.2 On 30 September 2025, the Group disposed of its Paces Brook asset, a 260-unit multifamily residential project located in Columbia, South Carolina, for a cash consideration of £5m. The asset disposal

resulted in a gain of £4m being recognised in underlying operating profit.

35.2.3 On 18 December 2025, the Group disposed of its Foundry Courtyard (Kennedy Street) asset, a 536-bed student accommodation building located in Glasgow for a cash consideration of £48m. The asset

disposal resulted in a gain of £23m being recognised in underlying operating profit.

35.2.4 On 19 December 2025, the Group disposed of its entire interest in five street lighting projects for a cash consideration of £7m. The infrastructure concession disposal resulted in a net gain of £nil being

recognised in underlying operating profit, comprising a gain of £nil in respect of the investment in the joint ventures.

35.2.5 On 19 December 2025, the Group disposed of its 25% interest in Connect CNDR Ltd for a cash consideration of £6m. The infrastructure concession disposal resulted in a net gain of £1m being recognised in

underlying operating profit, comprising a gain of £nil in respect of the Group’s investment in the joint ventures of £8m and £2m of upstream loan from the joint venture, and a gain of £1m related to the recycling

of revaluation reserves to the income statement.

35.2.6 On 23 December 2025, the Group disposed of its entire interest in its three offshore transmission projects for a cash consideration of £74m. The infrastructure concession disposal resulted in a net gain

of £6m being recognised in underlying operating profit, comprising a gain of £31m in respect of the Group’s investment in the joint ventures of £6m and £37m of accrued interest receivable from the joint

venture, and a loss of £25m related to the recycling of revaluation reserves to the income statement.

35.2.7 In December 2024, the Group partially disposed of its interests in the four phases of its Northside at UTD portfolio, located in Richardson (Dallas), Texas. This partial disposal resulted in the Group

retaining a 5% share in each of the phases. The Group received consideration of £43m and recognised an underlying gain of £43m in 2024.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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35 Acquisitions and disposals continued

35.2 Current year disposals continued

As part of this disposal, the Group is entitled to receive additional proceeds over the next five years subject to certain conditions. At the time of the disposal, the Group did not include an estimate of this

contingent consideration within its assessment of the gain on disposal as there was significant uncertainty as to whether these conditions would be met. At the half year, the Group received an additional £2m

of proceeds. This additional gain of £2m has been recognised as an underlying gain consistent with the Group’s treatment of the gain on disposal previously recognised. No further additional proceeds have been

recognised in the Group’s results at this stage and will only be recognised once further cash proceeds have been received.

35.3 Prior year disposals

During 2024, the Group partially disposed of one of its portfolio of Infrastructure Investments assets as detailed below. The gain recognised from the disposal is recorded within the Group’s gain on disposal

of interests in investments.

				Percentage	Cash	Net assets	Amount recycled	Underlying
				disposed	consideration	disposed	from reserves	gain
Notes	Disposal date	Entity/asset	Structure of sale	%	£m	£m	£m	£m
35.3.1	16 December 2024	Northside at UTD Phases 1 – 4 #	Equity interest sale	5% – 65%	43	–	–	43
					43	–	–	43

# Disposal of joint venture.

35.3.1 On 16 December 2024, the Group disposed of 5%, 5%, 65% and 60% of its interests respectively in the four phases of its Northside at UTD portfolio, which is located in Richardson (Dallas), Texas, for a

cash consideration of £43m. The Group retains a 5% interest in all the entities within this portfolio. The disposal resulted in an underlying gain of £43m.

36 Share-based payments

The Company operates three equity-settled share-based payment arrangements, namely the Performance Share Plan (PSP), the Deferred Bonus Plan (DBP) and the Restricted Share Plan (RSP). The Group

recognised total expenses relating to equity-settled share-based payment transactions of £16m (2024: £10m). Refer to the Remuneration report for details of the PSP and DBP schemes.

The Company also operates three cash-settled share-based payment arrangements, namely the Shadow PSP (SPSP), the Shadow RSP (SRSP) and the Shadow Deferred Bonus Plan (SDBP). These share-based

payment arrangements mirror the conditions of the equity-settled PSP, RSP and DBP plans, the only difference being they are settled in cash. The Group recognised total expenses relating to cash-settled

share-based payment transactions of £22m (2024: £16m).

Movements in share plans

Equity-settled share-based payment awards

		2025			2024
	PSP	DBP	RSP	PSP	DBP	RSP
	conditional	conditional	conditional	conditional	conditional	conditional
Number of awards	awards	awards	awards	awards	awards	awards
Outstanding at 1 January	7,5 4 4,002	2,040,062	2,747,0 8 3	8,224,917	2,053,723	3,379,603
Granted during the year	4,594,453	571,490	565,747	2,4 67,74 0	595,706	743,784
Awards in lieu of dividends	286,812	40,114	50,262	–	62,16 8	87,033
Forfeited during the year	(644,849)	(31,859)	(176,657)	(626,202)	(124,033)	(230,607)
Exercised during the year	(3,141,847)	(841,357)	(1,183,344)	(2,522,453)	(5 47,502)	(1,232,730)
Outstanding at 31 December	8,638,571	1,778,450	2,003,091	7,544,002	2,040,062	2,747,0 83
Exercisable at 31 December	–	–	–	–	–	–
Weighted average remaining contractual life (years)	1.4	1.2	1.5	1.1	1.1	1.4
Weighted average share price at the date of exercise for awards exercised in the year (pence)	436.2	434.0	6 02.1	376.8	370.1	396.9

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36 Share-based payments continued

Movements in share plans continued

Equity-settled share-based payment awards continued

The principal assumptions, including expected volatility determined from the historical weekly share price movements over the three-year period immediately preceding the award date, used by the consultants

in the stochastic model for the 33.3% of the PSP awards granted in 2025 subject to market conditions, were:

			Closing				Calculated
			share	Expected	Expected	Risk-free	fair value
			price on	volatility of	term of	interest	of an
		Number of	award date	shares	awards	rate	award
Award date	Name of award	awards	Pence	%	Years	%	Pence
28 March 2025	PSP award	3,742,257	447.2	22.39%	3.0	4.03	287.0
8 September 2025	PSP award	263,338	618.5	27.03%	0.5	3.40	444.6
8 September 2025	PSP award	191,255	618.5	25.78%	1.5	4.13	421.2
8 September 2025	PSP award	397,6 4 3	618.5	22.39%	2.5	4.03	397.1

For the 66.7% of the PSP awards granted in 2025 subject to non-market conditions and for the DBP and RSP awards granted in 2025, the fair value of the awards is the closing share price on the date of grant.

Cash-settled share-based payment awards

		2025			2024
	SPSP	SDBP	SRSP	SPSP	SDBP	SRSP
	conditional	conditional	conditional	conditional	conditional	conditional
Number of awards	awards	awards	awards	awards	awards	awards
Outstanding at 1 January	6,607,721	1,217,898	1,204,233	6,488,988	1,250,240	1,235,902
Granted during the year	134,178	241,396	308,331	2,203,042	259,366	365,500
Awards in lieu of dividends	230,431	18,543	25,372	–	35,778	36,404
Forfeited during the year	(395,921)	(63,349)	(60,587)	(13,483)	–	(90,617)
Exercised during the year	(2,601,080)	(622,974)	(4 27,732)	(2,070,826)	(327,486)	(342,956)
Outstanding at 31 December	3,975,329	791,514	1,049,617	6,607,721	1,217,898	1,204,233
Exercisable at 31 December	–	–	–	–	–	–
Weighted average remaining contractual life (years)	0.76	1.15	1.54	1.18	0.94	1.59
Weighted average share price at the date of exercise for awards exercised in the year (pence)	436.2	434.0	626.1	380.9	382.9	3 67.4

As at 31 December 2025, the Group’s liability in respect of outstanding cash-settled share-based payment awards amounted to £27m (2024: £21m). This liability has been recorded within accruals.

37 Commitments

Capital expenditure authorised and contracted for which has not been provided for in the financial statements amounted to £9m (2024: £11m) in the Group and £nil (2024: £nil) in the Company.

The Group has committed to provide its share of further equity funding and subordinated debt in Infrastructure Investments projects which have reached financial close. Refer to Note 42(f).

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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38 Contingent liabilities

The Company and certain subsidiary undertakings have, in the normal course of business, given

guarantees and entered into counter-indemnities in respect of bonds relating to the Group’s own

contracts and given guarantees in respect of their share of certain contractual obligations of joint

ventures and associates and certain retirement benefit liabilities of the Balfour Beatty Pension Fund

and the Railways Pension Scheme. Guarantees are treated as contingent liabilities until such time

as it becomes probable payment will be required under the terms of the guarantee.

Provision has been made for the Directors’ best estimate of known legal claims, investigations and

legal actions in progress. This includes, but is not limited to, any new claims that may arise relating

to fire safety regulations under the Building Safety Act. The Group assesses the likelihood of success

of claims, actions or ongoing investigations, taking into consideration any legal advice received.

No provision is made where the Directors consider that the action is unlikely to succeed, or that the

Group cannot make a sufficiently reliable estimate of the potential obligation. However, in certain

cases where assessments are ongoing and the Group cannot yet conclude whether it is probable

the claim is valid, a possible obligation may exist at 31 December 2025. In respect of these cases,

it is not practicable to estimate the financial effect based on the current status of the assessments.

39 Events after the reporting date

In the period from 1 January 2026 to 9 March 2026 (the latest practicable date prior to the date of

this Annual Report and Accounts), the Company purchased 3.1m ordinary shares, which are held

in treasury with no voting rights, for a total consideration of £23m (including stamp duty and fees).

In early 2026, the Group reached agreement with the trustees of the Balfour Beatty Pension Fund

(BBPF) over the triennial valuation of the Defined Benefit section of the BBPF as at 31 March 2025.

The Group made a one-off contribution of £30m in February 2026, as stipulated in the recent

agreement, and no further contributions are expected to be made.

The Company and the trustees have agreed that once the Defined Benefit section moves into surplus

as measured on an agreed set of parameters, further surplus can be used by the Company to meet its

existing obligations to the Defined Contribution section of the BBPF. Given the current strong position

of the BBPF, the Group is expecting to start receiving a cash benefit from the surplus by 2027. In

certain circumstances, were the funding level in the Defined Benefit section to fall below certain

pre-agreed thresholds, surplus offset in this way would need to be repaid to the Defined Benefit

section by the Company.

40 Related party transactions

Joint ventures and associates

The Group has contracted with, provided services to, and received management fees from, certain

joint ventures and associates amounting to £466m (2024: £438m). These transactions occurred in

the normal course of business at market rates and terms. In addition, the Group procured equipment

and labour on behalf of certain joint ventures and associates which were recharged at cost with no

mark-up. The amounts due from or to joint ventures and associates at the reporting date are disclosed

in Notes 25 and 26 respectively.

Transactions with non-Group members

The Group also entered into transactions and had amounts outstanding with related parties which are

not members of the Group as set out below. This company was a related party as it was controlled,

jointly controlled or under significant influence by a Director of Balfour Beatty plc.

	2025	2024
	£m	£m
Site Assist Software Limited +
Purchase of services	1	1

+ Transactions disclosed with Site Assist Software Limited relate to the period from 1 January 2025 to 8 September 2025. After this

date the company ceased to be a related party of the Group due to Leo Quinn stepping down from the role of Group Chief Executive.

All transactions with this related party were conducted on normal commercial terms, equivalent to

those conducted with external parties. No guarantees have been given or received. No expense has

been recognised in the year for bad or doubtful debts in respect of amounts owed by this related party.

Compensation of key management personnel of the Company

	2025	2024
	£m	£m
Short-term benefits	3.868	3.409
Share-based payments	5.054	2.420
	8.922	5.829

Key management personnel comprise the executive Directors who are directly responsible for the

Group’s activities and the Non-executive Directors. The compensation included above is in respect

of the period of the year during which the individuals were Directors. Further details of Directors’

emoluments, post-employment benefits and interests are set out in the Remuneration report on

pages 130 to 160.

During 2025, a member of the Group’s staff was seconded on a full-time basis to The 5% Club, a

charity which is a dynamic movement of employer-members working to create a shared prosperity

across the UK by driving ‘earn and learn’ skills training. The expense for the salary cost was borne by

the Group and no consideration was received in return. The 5% Club ceased to be a related party to

the Group after Leo Quinn stepped down from his role as Group Chief Executive on 8 September 2025.

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41 Financial instruments

Capital risk management

The Group manages its capital to ensure its ability to continue as a going concern and to maintain an optimal capital structure to reduce the cost of capital. The components of capital are as follows: equity

attributable to equity holders of the Company comprising issued ordinary share capital, reserves and retained earnings as disclosed in Notes 32 and 33; US private placement as disclosed in Note 28; and cash

and cash equivalents and borrowings as disclosed in Note 28.

The Group maintains or adjusts its capital structure through the payment of dividends to equity holders, issue of new shares and buyback of existing shares, and drawdown of new borrowings and repayment

of existing borrowings. The policy of the Group is to ensure an appropriate balance between cash, borrowings (other than the non-recourse borrowings of companies engaged in Infrastructure Investments

projects), working capital and the value in the Infrastructure Investments investment portfolio.

The overall capital risk management strategy of the Group remains unchanged from 2024.

In 2025 the Company commenced the fifth phase of its share buyback programme, which completed on 12 December 2025. The Company purchased 24.2m (2024: 27.1m) shares for a total consideration

of £125m (2024: £100m) and held these shares in treasury with no voting rights. The purchase of these shares, together with associated fees and stamp duty amounting to £1m (2024: £1m), utilised £126m

(2024: £101m) of the Company’s distributable profits.

share capital in issue of £12m (2024: £13m) and a corresponding increase in the capital redemption reserve.

Categories of financial instruments

		2025					2024
	Loans and				Loans and
	receivables at		Financial	Financial	receivables at		Financial	Financial
	amortised	Financial	assets at	assets at	amortised	Financial	assets at	assets at
	cost, cash	liabilities at	fair value	fair value	cost, cash	liabilities at	fair value	fair value
	and deposits	amortised cost	through OCI	through P&L	and deposit	amortised cost	through OCI	through P&L	Derivatives
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Financial assets
Mutual funds	–	–	16	–	–	–	20	–	–
Other investment assets	–	–	–	2	–	–	–	4	–
PPP financial assets	–	–	18	–	–	–	21	–	–
Cash and deposits	1,860	–	–	–	1,558	–	–	–	–
Trade and other receivables ^	1,359	–	–	–	1,360	–	–	–	–
Total	3,249	–	34	2	2,918	–	41	4	–
Financial liabilities
Trade and other payables	–	(1,914)	–	–	–	(1,734)	–	–	–
Unsecured borrowings	–	(221)	–	–	–	(350)	–	–	–
Infrastructure concessions non-recourse term loans	–	(604)	–	–	–	(600)	–	–	–
Derivatives	–	–	–	–	–	–	–	–	(1)
Total	–	(2,739)	–	–	–	(2,684)	–	–	(1)
Net	3,249	(2,739)	34	2	2,918	(2,684)	41	4	(1)
Current year comprehensive income/(loss) excluding share of joint ventures
and associates	77	(30)	1	–	63	(29)	2	(2)	1
^	Contract fulfilment assets have been presented as a non-financial asset in 2025. This was previously presented as a financial asset in 2024 and has not been re-presented in the comparative period as the Directors do not consider this to be material. Refer to Note 25.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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41 Financial instruments continued

Derivatives

	Financial liabilities 2025			Financial liabilities 2024
	Current	Non-current	Total	Current	Non-current	Total
	£m	£m	£m	£m	£m	£m
Forward exchange contracts
Held for trading at fair value through income statement	–	–	–	–	(1)	(1)
	–	–	–	–	(1)	(1)

Non-derivative financial liabilities gross maturity

The following table details the remaining contractual maturity for the Group’s non-derivative financial liabilities. The table reflects the undiscounted contractual maturities of the financial liabilities including

interest that will accrue on those liabilities except where the Group is entitled to and intends to repay the liability before its maturity. At 31 December 2025, the Group does not intend to repay any of these

liabilities earlier than their contractual maturity dates. Settlement of loans for non-recourse project finance may be subject to the Group’s disposal plans for its Infrastructure Investment assets; however,

this is not reflected in the table below.

Maturity profile of the Group’s non-derivative financial liabilities at 31 December

				2025							2024+
				Total non-							Total non-
	Non-recourse		Other	derivative		Future		Non-recourse		Other	derivative		Future
	project	Other	financial	financial		interest	Carrying	project	Other	financial	financial		interest	Carrying
	finance	borrowings	liabilities	liabilities	Discount	payments	value	finance	borrowings	liabilities	liabilities	Discount	payments	value
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Due on demand or within one year	(49)	(78)	(1,824)	(1,951)	2	20	(1,929)	(23)	(196)	(1,655)	(1,874)	1	22	(1,851)
Due within one to two years	(73)	(35)	(70)	(178)	3	19	(156)	(69)	(11)	(36)	(116)	3	21	(92)
Due within two to five years	(172)	(78)	(19)	(269)	11	42	(216)	(205)	(117)	(42)	(364)	14	51	(299)
Due after more than five years	(914)	(79)	(1)	(994)	368	188	(438)	(921)	(90)	(1)	(1,012)	372	198	(442)
	(1,208)	(270)	(1,914)	(3,392)	384	269	(2,739)	(1,218)	(414)	(1,734)	(3,366)	390	292	(2,684)
Discount	384	–	–	384				390	–	–	390
Future interest payments	220	49	–	269				228	64	–	292
Carrying value	(604)	(221)	(1,914)	(2,739)				(600)	(350)	(1,734)	(2,684)

+ Re-presented to include and separately disclose future interest payments in the maturity profile.

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41 Financial instruments continued

Derivative financial liabilities gross maturity

The following table details the Group’s expected maturity for its derivative financial liabilities. The table

reflects the undiscounted net cash inflows/(outflows) on the derivative instruments that settle on a net

basis (interest rate swaps) and undiscounted gross inflows/(outflows) for those derivatives that are

settled on a gross basis (foreign exchange contracts). When the amount payable or receivable is not

fixed, the amount disclosed has been determined by reference to the projected interest rates, using

the yield curves at the reporting date.

Maturity profile of the Group’s derivatives at 31 December

		2025			2024
	Payable	Receivable	Net payable	Payable	Receivable	Net payable
	£m	£m	£m	£m	£m	£m
Due on demand or within one year	(9)	9	–	(37)	36	(1)
Due within one to two years	–	–	–	(7)	6	(1)
Due within two to five years	–	–	–	–	–	–
Total	(9)	9	–	(44)	42	(2)

Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk; credit risk; and liquidity risk.

The Group’s financial risk management strategy seeks to minimise the potential adverse effect of

these risks on the Group’s financial performance.

Financial risk management is carried out centrally by Group Treasury under policies approved by the

Board. Group Treasury liaises with the Group’s business units to identify, evaluate and hedge financial

risks. The Board provides written principles for overall financial risk management, as well as written

policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of

derivative financial instruments and non-derivative financial instruments, and the investment of excess

liquidity. Compliance with policies and exposure limits is monitored through the Group’s internal audit

and risk management procedures. The Group uses derivative financial instruments to hedge certain

risk exposures. The Group does not trade in financial instruments, including derivative financial

instruments, for speculative purposes.

(a) Market risk

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange

rates and interest rates. The Group enters into a variety of derivative financial instruments to manage

its exposure to interest rate and foreign currency risk, including:

@ forward foreign exchange contracts to hedge the exchange rate risk arising on trading activities

transacted in a currency that is not the functional currency of the business unit; and

@ interest rate swaps to mitigate the cash flow variability in non-recourse project finance loans arising

from variable interest rates on borrowings.

There has been no material change to the Group’s exposure to market risks and there has been no

change in how the Group manages those risks since 2024.

(i) Foreign currency risk management

The Group operates internationally and is exposed to foreign exchange risk arising from exposure to

various currencies, primarily to US dollars, euros and Hong Kong dollars. Foreign exchange risk arises

from future trading transactions, assets and liabilities and net investments in foreign operations.

Group policy requires business units to manage their transactional foreign exchange risk against their

functional currency. Whenever a current or future foreign currency exposure is identified with sufficient

reliability, Group Treasury enters into forward contracts on behalf of business units to cover 100% of

foreign exchange risk above materiality levels determined by the Chief Financial Officer.

As at 31 December 2025, the notional principal amounts of foreign exchange contracts in respect of

foreign currency transactions where hedge accounting is not applied was £9m (2024: £42m) receivable

and £9m (2024: £44m) payable with related cash flows expected to occur within one year (2024: two

years). The foreign exchange gains or losses resulting from fair valuing these unhedged foreign

exchange contracts will affect the income statement throughout the same periods.

The Group has not designated any forward exchange contracts as cash flow hedges in 2024 and 2025.

The Group’s investments in foreign operations are exposed to foreign currency translation risks.

The Group does not enter into forward foreign exchange or other derivative contracts to hedge

foreign currency denominated net assets.

At 31 December 2025, the Group held US$208m of debt in the form of US private placement (USPP)

notes. The USPP notes are designated as a net investment hedge against changes in the value of the

Group’s US net assets due to exchange movements. The Group reassessed the US$208m hedge at

31 December 2025 and concluded that the hedge continued to be effective. Exchange movements in

the year led to a £12m decrease in the carrying amount of the liability on the Group’s balance sheet

(2024: £4m increase). A 5% increase/decrease in the US dollar to sterling exchange rate would lead to

a £7m decrease (2024: £8m)/£8m increase (2024: £9m) in the carrying amount of the liability on the

Group’s balance sheet, with the movement recognised in other comprehensive income.

The hedging policy is reviewed periodically. At the reporting date there had been no change to the

hedging policy since 2024.

(ii) Interest rate risk management

Interest rate risk arises in the Group’s non-recourse project companies which borrow funds at both

floating and fixed interest rates and hold financial assets measured at fair value through OCI. Floating

rate borrowings expose the Group to cash flow interest rate risk. The Group’s policy to manage this

risk is to swap floating rate interest to fixed rate, using interest rate swap contracts.

In an interest rate swap, the Group agrees to exchange the difference between fixed and floating rate

interest amounts calculated on agreed notional principal amounts. The net effect of a movement in

interest rates on income would be immaterial. The fair value of interest rate swaps is determined by

discounting the future cash flows using the yield curve at the reporting date.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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41 Financial instruments continued

Financial risk factors continued

(a) Market risk continued

(ii) Interest rate risk management continued

During 2025 and 2024, the Group’s non-recourse project subsidiaries’ borrowings at variable rates of

interest were denominated in sterling. The notional principal amounts of the subsidiaries’ interest rate

swaps outstanding at 31 December 2025 totalled £12m (2024: £17m) with maturities that match the

maturity of the underlying borrowings of six years. At 31 December 2025, the fixed interest rate was

5.1% (2024: 5.1%) and the principal floating rates are SONIA plus a fixed margin. A 50 basis point

increase/decrease in the interest rate on floating rate borrowings for interest rate swaps would lead to

a £nil increase (2024: £nil)/£nil decrease (2024: £nil) in amounts taken directly to other comprehensive

income by the Group in relation to the Group’s exposure to interest rates on the PPP financial assets

and cash flow hedges of its Infrastructure Investments subsidiaries.

Interest rate risk also arises on the Group’s cash and cash equivalents, term deposits and other

borrowings. Other than the non-recourse project subsidiaries’ borrowings at variable rates of interest,

all the debt of the Group is held at fixed interest rates. A 50 basis point increase/decrease in the

interest rate of each currency in which these financial instruments are held would lead to an £8m

decrease (2024: £7m)/£8m increase (2024: £7m) in the Group’s net finance cost.

(iii) Price risk management

The Group’s principal price risk exposure arises in its Infrastructure Investments concessions. At the

commencement of the concession, an element of the unitary payment by the customer is indexed to

offset the effect of inflation on the concession’s costs. The Group is exposed to price risk to the extent

that inflation differs from the index used.

(b) Credit risk

Credit risk is the risk that a counterparty will default on its contractual obligations, resulting in financial

loss. Credit risk arises from cash and deposits, derivative financial instruments, loans provided to joint

ventures and associates and credit exposures to customers, including outstanding receivables and

committed transactions. The Group has a policy of assessing the creditworthiness of potential

customers before entering into transactions set by the Board for the Group.

For cash and deposits and derivative financial instruments, the Group has a policy of only using

counterparties that are independently rated with a minimum long-term credit rating of BBB- and at

31 December 2025 this criterion was met (2024: BBB-). The credit rating of a financial institution will

determine the amount and duration for which funds may be deposited under individual risk limits set

by the Board for the Group and subsidiary companies. Management monitors the utilisation of these

credit limits regularly.

For trade and other receivables, credit evaluation is performed on the financial condition of accounts

receivable using independent ratings where available or by assessment of the customer’s credit quality

based on its financial position, past experience and other factors. The Group’s most significant customers

are public or regulated industry entities which generally have high credit ratings or are of a high credit

quality due to the nature of the customer. As such, the Group does not expect material credit losses

to occur on balances owed to the Group by its public or regulated customers. This is in line with the

Group’s experience in the past of recovering balances owed by these customers.

The Group is exposed to credit risk on loans provided to joint ventures and associates and accrued

interest on those loans, as the repayment of these amounts is contingent on the performance of the

underlying concession or operation. In the Infrastructure Investments segment the concessions are

typically financed by a combination of non-recourse external borrowings and subordinated loans

provided by the joint venture partners. The Group assesses any expected credit losses on its loans

provided to joint ventures and associates by comparing the carrying value of the relevant investment in

joint venture or associate balance (which includes the loans provided and any accrued interest) to future

cash flows expected to be received from the joint venture or associate, discounted where appropriate.

The maximum exposure to credit risk in respect of the above at the reporting date is the carrying value

of financial assets recorded in the financial statements, net of any allowance for losses.

There has been no material change to the Group’s exposure to credit risks and there has been no

change in how the Group manages those risks since 2024.

The Group manages liquidity risk by maintaining adequate cash balances and banking facilities,

continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial

assets and liabilities. Details of undrawn committed borrowing facilities are set out in Note 28.1. The

maturity profile of the Group’s financial liabilities is set out on page 241.

There has been no material change to the Group’s exposure to liquidity risks and there has been no

change in how the Group manages those risks since 2024.

Fair value estimation

The Group holds certain financial instruments on the balance sheet at their fair values. The following

hierarchy classifies each class of financial asset or liability in accordance with the valuation technique

applied in determining its fair value.

There have been no transfers between these categories during 2025 or 2024.

Level 1 – The fair value is calculated based on quoted prices traded in active markets for identical

assets or liabilities.

The Group holds investments in mutual funds measured at fair value through OCI which are traded in

active markets and valued at the closing market price at the reporting date.

Level 2 – The fair value is based on inputs other than quoted prices included within Level 1 that are

observable for the asset or liability, either directly or indirectly.

The fair value of interest rate swaps is calculated as the present value of the estimated future cash

flows utilising yield curves at the reporting date and taking into account own credit risk. Own credit

risk for Infrastructure Investments’ swaps is not material and is calculated using the following credit

valuation adjustment (CVA) calculation: loss given default multiplied by exposure multiplied by

probability of default.

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41 Financial instruments continued

Financial risk factors continued

Fair value estimation continued

The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the reporting date and yield curves derived from quoted interest rates matching the maturities of the

foreign exchange contracts. Own credit risk for the other derivative liabilities is not material and is calculated by applying a relevant credit default swap (CDS) rate obtained from a third party.

Level 3 – The fair value is based on unobservable inputs.

The fair value of the Group’s PPP financial assets is determined in the construction phase by applying an attributable profit margin by reference to the construction margin on non-PPP projects reflecting the

construction risks retained by the construction contractor, and fair value of construction services performed. In the operational phase it is determined by discounting the future cash flows allocated to the

financial asset at a discount rate which is based on long-term gilt rates adjusted for the risk levels associated with the assets, with market-related movements in fair value recognised in other comprehensive

income and other movements recognised in the income statement. Amounts originally recognised in other comprehensive income are transferred to the income statement upon disposal of the asset.

A change in the discount rate would have a significant effect on the value of the asset and a 75 basis point increase/decrease (2024: 50 basis point increase/decrease), which represents management’s

assessment of a reasonably possible change in the risk-adjusted discount rate, would lead to a £nil decrease (2024: £nil)/£1m increase (2024: £nil) in the fair value of the assets taken through equity. Refer to

Note 22 for a reconciliation of the movement from the opening balance to the closing balance.

For PPP financial assets held in joint ventures and associates, a change in the discount rate by a 75 basis point increase/decrease (2024: 50 basis point increase/decrease), which represents management’s

assessment of a reasonably possible change in the risk-adjusted discount rate, would lead to a £24m decrease (2024: £21m)/£27m increase (2024: £21m) in the fair value of the assets taken through equity

within the share of joint ventures’ and associates’ reserves.

		2025				2024
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Financial instruments at fair value	£m	£m	£m	£m	£m	£m	£m	£m
Investments in mutual fund financial assets	16	–	–	16	20	–	–	20
PPP financial assets	–	–	18	18	–	–	21	21
Other investment assets	–	–	2	2	–	–	4	4
Total assets measured at fair value	16	–	20	36	20	–	25	45
Financial liabilities – forward exchange contracts	–	–	–	–	–	(1)	–	(1)
Total liabilities measured at fair value	–	–	–	–	–	(1)	–	(1)

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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42 Principal subsidiaries, joint ventures and associates

(a) Principal subsidiaries

	Country of
	incorporation
	or registration
Construction and Support Services
Balfour Beatty Group Ltd
Balfour Beatty Construction Group Inc	US
Balfour Beatty Infrastructure Inc	US
Infrastructure Investments
Balfour Beatty Communities LLC	US
Balfour Beatty Infrastructure Investments Ltd*
Balfour Beatty Investments Inc	US
Balfour Beatty Campus Solutions LLC	US
Balfour Beatty Developments Inc	US
Other Balfour Beatty Holdings Inc	US

(b) Principal joint ventures and associates

	Country of	Ownership
	incorporation	interest
	or registration	%
Construction and Support Services
Gammon China Ltd	Hong Kong	50.0
Infrastructure Investments
Connect Plus (M25) Ltd		15.0

Th Group carries out a number of its larger contracts in joint arrangements with other contractors so as

to share resources and risk. The principal joint projects in progress during the year are shown below.

	Country of	Ownership
	incorporation	interest
	or registration	%
M25 Maintenance		52.5
HS2 – Area North		50.0
Central Rail Systems Alliance		40.0
Old Oak Common		42.0
Eccles/1951 Renovation and Expansion Project	US	50.0
Microsoft Campus Redevelopment	US	50.0
Knox Street Development	US	55.0
Interstate 635 LBJ East	US	45.0

Notes

(i) Subsidiaries, joint ventures and associates whose results did not, in the opinion of the Directors, materially affect the results or net

assets of the Group are not shown.

(ii) Unless otherwise stated, 100% of the equity capital is owned and companies are registered in England and Wales and the principal

operations of each company are conducted in the country of incorporation.

* Indicates held directly by Balfour Beatty plc.

A full list of the Group’s related undertakings is included in Note 44.

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42 Principal subsidiaries, joint ventures and associates continued

(d) Balfour Beatty Investments UK

Roads

Balfour Beatty is a promoter, developer and investor in six road and street lighting projects to construct new roads, to upgrade and maintain existing roads and to replace and maintain street lighting. The principal

contract is the project agreement with the governmental highway authority. All assets transfer to the customer at the end of the concession.

		Total debt
		and equity
		funding		Method of	Financial	Duration	Construction
Concession company (i)	Project	£m	Shareholding	accounting	close	years	completion
Connect M1-A1 Ltd (ii)	30km road	290	20%	JV	March 1996	30	1999
Connect A50 Ltd (ii)	57km road	42	25%	JV	May 1996	30	1998
Connect A30/A35 Ltd (ii)	102km road	127	20%	JV	July 1996	30	2000
Connect M77/GSO plc (ii)	25km road	167	85%	JV	May 2003	32	2005
Connect Roads Derby Ltd	Streetlighting	36	100%	Subsidiary	April 2007	25	2012
Connect Plus (M25) Ltd (ii)	J16 – J23, J27 – J30 and
	A1(M) Hatfield Tunnel	1,309	15%	JV	May 2009	30	2012

Notes

(i) Registered in England and Wales and the principal operations of each company are in England and Wales, except Connect M77/GSO plc which is registered, and conducts its principal operations, in Scotland.

(ii) Due to the shareholders’ agreement between Balfour Beatty and the other shareholder requiring unanimity of agreement in respect of significant matters related to the financial and operating policies of this company, the Directors have accounted for its interest in this

company as a joint venture.

Healthcare

Balfour Beatty is a promoter, developer and investor in two healthcare projects to build hospital accommodation and to provide certain non-medical facilities management services over the concession period.

The principal contract for Birmingham is the project agreement between the concession company and the NHS Trust and for the Irish primary care centres, the project agreement is with the Irish Government.

All assets transfer to the customer at the end of the concession.

		Total debt
		and equity
		funding		Method of	Financial	Duration	Construction
Concession company (i)(ii)	Project	£m	Shareholding	accounting	close	years	completion
Consort Healthcare (Birmingham) Ltd	Teaching hospital and mental health hospital	553	40%	JV	June 2006	40	2011
Healthcare Centres PPP Ltd	Primary health care centres	158	40%	JV	May 2016	26	2019

Notes

(i) Registered in England and Wales and the principal operations of each company are in England and Wales, except Healthcare Centres PPP Ltd which is registered, and conducts its principal operations, in Ireland.

company as a joint venture.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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42 Principal subsidiaries, joint ventures and associates continued

(d) Balfour Beatty Investments UK continued

Student accommodation

Balfour Beatty is a promoter, developer and investor in four student accommodation projects. Balfour Beatty also maintains and services the facilities within these projects until the end of the contracts. The

principal agreement is between the concession company and the university and the assets transfer to the customer at the end of the concession.

		Total debt
		and equity
		funding		Method of	Financial	Duration	Construction
Concession company (i)	Project	£m	Shareholding	accounting	close	years	completion
Holyrood Student Accommodation SPV Ltd (ii)	Edinburgh	82	20%	JV	July 2013	50	2016
Aberystwyth Student Accommodation Ltd	Aberystwyth	51	100%	Subsidiary	July 2013	35	2015
East Slope Residencies Student Accommodation LLP	Sussex	218	80%	Subsidiary	March 2017	50	2020
West Slope Residencies LLP	Sussex	343	81%	Subsidiary	December 2023	50	2028

Notes

(i) Registered in England and Wales and the principal operations of each company are in England and Wales, except Holyrood Student Accommodation SPV Ltd which is registered, and conducts its principal operations, in Scotland.

company as a joint venture.

Other concessions

Pevensey Coastal Defence Ltd (PCDL) has a 25-year contract with the Environment Agency to maintain a shingle bank sea defence in East Sussex which completed in 2025. The East Wick and Sweetwater

development is a London Legacy Development Corporation project, being carried out in phases, which will result in the creation of two communities, East Wick and Sweetwater, at the Queen Elizabeth Olympic

Park in London. With the exception of the Eastwick and Sweetwater project, all assets transfer to the customer at the end of the relevant concession.

		Total debt
		and equity
		funding		Method of	Financial	Duration	Construction
Concession company (i)(ii)	Project	£m	Shareholding	accounting	close	years	completion
Pevensey Coastal Defence Ltd	Sea defences	3	25%	JV	July 2000	25	n/a
East Wick and Sweetwater Projects (Phase 1) Ltd	Property development	99	50%	JV	January 2019	6	2021
East Wick and Sweetwater Projects (Phase 2) Ltd	Property development	76	50%	JV	August 2023	3	2026

Notes

(i) Registered in England and Wales and the principal operations of each company are in England and Wales.

companies as a joint venture.

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42 Principal subsidiaries, joint ventures and associates continued

(e) Balfour Beatty Investments North America

Military housing

Summary Balfour Beatty through its subsidiary Balfour Beatty Communities LLC is a manager, developer, and investor in a number of US military privatisation projects associated with a total of 55 US

Government military bases which include 55 military family housing communities and one unaccompanied personnel housing community that are expected to contain approximately 43,000 housing units

once development, construction and renovation are complete.

The projects comprise 11 military family housing privatisation projects with the United States Department of the Army (Army), seven projects with the United States Department of the Air Force (Air Force)

and two projects with the United States Department of the Navy (Navy). In addition, there is one unaccompanied personnel housing (UPH) project with the Army at Fort Stewart.

Contractual arrangements The first phase of the project, known as the initial development period, covers the period of initial construction or renovation of military housing on a base, typically lasting three

to eight years. With respect to Army and Navy projects, the Government becomes a member or partner of the project entity (Project LLC); the Air Force is not a named partner or member in Balfour Beatty

Communities’ Project LLCs, however it contributes a commitment to provide a Government direct loan to the Project LLC and has similar rights to share in distributions and cash flows of the Project LLC.

On each project, the Project LLC enters into a ground lease with the Government, which provides the Project LLC with a leasehold interest in the land and title to the improvements on the land for a period of

50 years. Each of these military housing privatisation projects includes agreements covering the management, renovation, and development of existing housing units, as well as the development, construction,

renovation and management of new units during the term of the project, which, in the case of the Army, could potentially extend for up to an additional 25 years. The 50-year duration of each project calls for

continuous renovation, rehabilitation, demolition and reconstruction of housing units. At the end of the ground lease term the Project LLC’s leasehold interest terminates and all project improvements on the

land generally transfer to the Government.

Preferred returns The projects will typically receive, to the extent that adequate funds are available, an annual minimum preferred return. On most existing projects, this annual minimum preferred return ranges

from 9% to 12% of Balfour Beatty Communities’ initial equity contribution to the project.

Allocation of remaining operating cash flow Operating cash flow remaining after the annual minimum preferred return is paid is shared between Balfour Beatty Communities and the reinvestment account held

by the project for the benefit of the Government. On most of the existing projects, the total amount that Balfour Beatty Communities is entitled to receive (inclusive of the preferred return) is generally capped at

an annual modified rate of return, or cash-on-cash return, on its initial equity contribution to the project. Historically, these caps have ranged between approximately 9% to 18% depending on the particular

project and the type of return (annual modified rates of return or cash-on-cash). However, in some of the more recent projects, there are either no annual caps or lower projected annual rates of return. The total

capped return generally will include the annual minimum preferred return. The reinvestment account is an account established for the benefit of the military, but funds may be withdrawn for construction,

development and renovation costs during the remaining life of a privatisation project upon approval by the applicable military service.

Return of equity Generally, at the end of a project term, any monies remaining in the reinvestment account are distributed to Balfour Beatty Communities and the Army, Navy or Air Force, in a predetermined

order of priority. Typically these distributions will have the effect of providing the parties with sufficient funds to provide a minimum annual return over the life of the project and a complete return of the initial

capital contribution. After payment of the minimum annual return and the return of a party’s initial contribution, all remaining funds will typically be distributed to the applicable military service.

		Total project
		funding	Financial	Duration	Construction
Military concession company (i)	Projects	US$m	close	years	completion
Military family housing
Fort Carson Family Housing LLC	Army base	176	November 2003	46	2004
– Fort Carson expansion		130	November 2006	43	2010
– Fort Carson GTA expansion		99	April 2010	39	2013
– Fort Carson GTA II expansion		68	June 2015	34	2018
Stewart Hunter Housing LLC	Two Army bases	374	November 2003	50	2012
Fort Hamilton Housing LLC	Army base	61	June 2004	50	2009
Fort Detrick/Walter Reed Army Medical Center Housing LLC	Two Army bases	112	July 2004	50	2008
Northeast Housing LLC	Seven Navy bases	496	November 2004	50	2010

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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42 Principal subsidiaries, joint ventures and associates continued

(e) Balfour Beatty Investments North America continued

Military housing continued

		Total project
		funding	Financial	Duration	Construction
Military concession company (i)	Projects	US$m	close	years	completion
Fort Eustis/Fort Story Housing LLC	Two Army bases	175	March 2005	50	2011
– Fort Eustis expansion		8	July 2010	45	2011
– Fort Eustis – Marseilles Village		26	March 2013	42	2015
Fort Bliss/White Sands Missile Range Housing LP	Two Army bases	427	July 2005	50	2011
– Fort Bliss expansion		46	December 2009	46	2011
– Fort Bliss GTA expansion phase I		156	July 2011	44	2014
– Fort Bliss GTA expansion phase II		146	November 2012	43	2016
Fort Eisenhower Housing LLC	Army base	159	May 2006	50	2012
Carlisle/Picatinny Family Housing LP	Two Army bases	84	July 2006	50	2011
– Carlisle Heritage Heights phase II		21	October 2012	44	2014
AETC Housing LP	Four Air Force bases	359	February 2007	50	2012
Southeast Housing LLC	11 Navy bases	558	November 2007	50	2013
Vandenberg Housing LP	Air Force base	155	November 2007	50	2012
Leonard Wood Family Communities LLC	Army base	231	Acquired June 2008	47	2014
AMC West Housing LP	Three Air Force bases	428	July 2008	50	2015
West Point Housing LLC	Army base	220	August 2008	50	2016
Fort Jackson Housing LLC	Army base	181	October 2008	50	2013
Lackland Family Housing LLC	Air Force base	105	Acquired December 2008	50	2013
Western Group Housing LP	Four Air Force bases	328	March 2012	50	2017
Northern Group Housing LLC	Six Air Force bases	427	August 2013	50	2019
ACC Group Housing LLC	Two Air Force bases	56	June 2014	50	2018
Military unaccompanied personnel housing
Stewart Hunter Housing LLC		36	January 2008	50	2010

Note

(i) Registered in the US and the principal operations of each project are conducted in the US.

The Group evaluated each of its interests in the military housing projects to determine if the entities should be consolidated. This analysis included, but was not limited to, identifying the activities that most

significantly impact an entity’s economic performance, which party or parties control those activities and the risks associated with these entities. Decision-making power over key facets of the contracts was

evaluated when determining which party or parties had control over the activities that most significantly impacted a project’s economics. Based on this review, the Directors consider that the Group does not

have the power to direct these activities and does not have control and therefore the Group does not consolidate the military housing projects and accounts for these projects as investments in associates.

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42 Principal subsidiaries, joint ventures and associates continued

(e) Balfour Beatty Investments North America continued

Aviation

Summary Balfour Beatty is a developer, operator and investor in an automated people mover at Los Angeles International Airport. The people mover will be a 2.25-mile above ground airport transport system.

Contractual arrangements The principal contract is the project agreement between the concession partnership and the airport authority. All assets transfer to the authority at the end of the concession.

		Total project
		funding		Method of	Financial	Duration	Construction
Concession company	Project	US$m	Shareholding	accounting	close	years	completion
LAX Integrated Express Solutions LLC (i)(ii)	LINXS	2,828	27%	JV	June 2018	30	2024

Notes

(i) Registered in the US and the principal operations of the project are conducted in the US.

company as a joint venture.

Residential investments

Summary Balfour Beatty is a developer, operator and investor in nine multifamily residential projects.

Contractual arrangements Balfour Beatty has acquired residential apartment buildings for ten multifamily residential projects. For all residential projects, the entities have entered into agreements with Balfour

Beatty Communities LLC to perform the operations and renovation work.

	Total project
	funding		Method of	Financial	Renovation
Residential investments (i)(ii)	US$m	Shareholding	accounting	close	completion
Carolina Cove (Wilmington) Owner LLC (North Carolina)	48	50%	JV	December 2017	2022
Lexington (Ridgeland) Owner, LLC (Jackson, Mississippi)	27	50%	JV	August 2018	2025
Landings (Jacksonville) Owner, LLC (Florida)	48	50%	JV	August 2019	2025
Retreat at Schillinger (Mobile) Owner, LLC (Alabama)	33	50%	JV	December 2019	2026
Chenal Pointe (Little Rock) Owner, LLC (Arkansas)	34	50%	JV	October 2020	2027
San Mateo (Kissimmee) Owner, LLC (Florida)	81	50%	JV	August 2021	2027
View SA LLC (San Antonio, Texas)	76	87%	JV	June 2022	2025
Mt Laurel, LLC (New Jersey)	80	31%	JV	June 2024	2025
Gathering at Arbor Greens (Florida)	59	50%	JV	March 2025	2026
River Pointe (Conroe) Owner, LLC (Texas)	47	100%	Subsidiary	April 2025	2026

Notes

(i) Registered in the US and the principal operations of each project are conducted in the US.

(ii) Due to the shareholders’/partnership agreement between Balfour Beatty and the other shareholder/partner requiring unanimity of agreement in respect of significant matters related to the financial and operating policies of this undertaking, the Directors have accounted for

its interests in these undertakings as a joint venture.

Student accommodation

Summary Balfour Beatty is also a developer and owner of seven student accommodation projects.

Contractual arrangements The principal contracts in the student accommodation projects are the ground leases, development leases and operating agreements with the state universities setting out the

obligations for the construction, operation and maintenance of the student accommodation including lifecycle replacement during the concession period. The Tallahassee and Denton projects are investments

in existing off-campus student housing communities which are structured as subsidiaries.

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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42 Principal subsidiaries, joint ventures and associates continued

(e) Balfour Beatty Investments North America continued

Student accommodation continued

	Total project					Construction/
	funding		Method of	Financial	Duration	renovation
Concession company (i)(ii)	US$m	Shareholding	accounting	close	years	completion
Northside Campus Partners LP (Texas Dallas)	54	5%	JV	March 2015	61	2016
Northside Campus Partners 2, LP (Texas Dallas)	67	5%	JV	February 2017	61	2018
Northside Campus Partners 3, LP (Texas Dallas)	36	5%	JV	June 2019	61	2020
Northside Campus Partners 4, LP (Texas Dallas)	70	5%	JV	December 2019	61	2021
Swiftsure Housing Partners, LLC (Vanderbilt)	154	23%	JV	April 2021	45	2023
Oktiv (Tallahassee) Owner, LLC (Florida)	53	100%	Subsidiary	June 2023		2025
Leonard (Denton) Owner, LLC (Texas)	45	100%	Subsidiary	December 2024		2026

Notes

(i) Registered in the US and the principal operations of each project are conducted in the US.

its interests in these undertakings as a joint venture.

(f) Balfour Beatty Investments UK and North America

Total future committed equity and debt funding for Infrastructure Investments’ project companies

				2029
	2026	2027	2028	onwards	Total
Concessions	£m	£m	£m	£m	£m
UK
Student accommodation	–	19	13	–	32
Other concessions	4	–	–	–	4
	4	19	13	–	36
North America
Aviation	21	–	–	–	21
	21	–	–	–	21
	25	19	13	–	57
Projects at financial close	21	19	13	–	53
Projects at preferred bidder stage	4	–	–	–	4
Total	25	19	13	–	57

43 Audit exemptions taken for subsidiaries

The following subsidiaries are exempt from the requirements under the Companies Act 2006 relating to the audit of individual financial statements by virtue of Section 479A of the Act.

	Company registration number
Education Investments Holdings Ltd	6863458
Consort Healthcare Infrastructure Investments Ltd	6859623
Manchester Residences (New Cross) Ltd	112015 9 6
South Cambridgeshire Investments Holdings Limited	12843704

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44 Details of related undertakings of Balfour Beatty plc as at 31 December 2025

In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates and joint ventures, including the principal activity, the country of incorporation and the effective

percentage of equity owned as at 31 December 2025 is disclosed below. Unless otherwise stated, all interests are in the ordinary share capital or shares of common stock in the entity and are held indirectly by

the Company, and all entities operate principally in their country of incorporation. All subsidiaries had a reporting period ended 31 December 2025 and are wholly owned and consolidated into the Group’s results,

except where indicated.

Subsidiary undertakings incorporated in the United Kingdom

Entity	Principal activity
Q14 Quorum Business Park, Benton Lane, Newcastle upon
Tyne NE12 8BU
Aberystwyth Student	Infrastructure Concession
Accommodation Ltd
Balfour Beatty Infrastructure	Investment Holding Company
Investments Ltd (i)
Balfour Beatty Infrastructure	Dormant
Partners Member Ltd
Balfour Beatty Infrastructure	Investment Holding Company
Projects Investments Ltd
Balfour Beatty Investments Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty OFTO	Investment Holding Company
Holdings Ltd
Balfour Beatty Rail Corporate	Agent of Balfour Beatty Group Ltd
Services Ltd
Balfour Beatty WorkSmart Ltd	Agent of Balfour Beatty Group Ltd
BBI Holdings Australia Ltd	Dormant
BBPF LLP (iii)	Investment Partnership
Connect Roads Derby	Investment Holding Company
Holdings Ltd
Connect Roads Derby Ltd	Infrastructure Concession
Connect Roads Infrastructure	Investment Holding Company
Investments Ltd
Consort Healthcare	Investment Holding Company
Infrastructure Investments Ltd
East Slope Residencies	Infrastructure Concession
Facilities Management Ltd
East Slope Residencies	Investment Holding Company
Holdings Ltd
East Slope Residencies	Investment Holding Company
Partner Ltd
East Slope Residencies plc (ii)	Infrastructure Concession
East Slope Residencies Student	Infrastructure Concession
Accommodation LLP (ii) (iii)

Entity	Principal activity
Education Investments	Investment Holding Company
Holdings Ltd
Initial GP1 Ltd	Investment Holding Company
Manchester Residences	Infrastructure Concession
(New Cross) Ltd
South Cambridgeshire	Investment Holding Company
Investments Holdings Ltd
Urban Fox Networks (UK) Ltd (vi)	Infrastructure Concession
West Slope Residencies	Infrastructure Concession
Facilities Management Ltd
West Slope Residencies	Infrastructure Concession
Finance Ltd
West Slope Residencies	Investment Holding Company
Holdings Ltd (v)
West Slope Residencies LLP (iii) (v) Infrastructure Concession
West Slope Residencies	Investment Holding Company
Partner Ltd
West Stratford	Investment Holding Company
Developments Ltd (iv)
5 Churchill Place, Canary Wharf, London E14 5HU
Avatar Ltd	Dormant
Balfour Beatty Build Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Building Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty CE Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Civil Engineering	Agent of Balfour Beatty Group Ltd
(SW) Ltd
Balfour Beatty Civil	Agent of Balfour Beatty Group Ltd
Engineering Ltd
Balfour Beatty Civils Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Const Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Construction	Agent of Balfour Beatty Group Ltd
(SW) Ltd
Balfour Beatty Construction	Agent of Balfour Beatty Group Ltd
International Ltd

Entity	Principal activity
Balfour Beatty Construction	Agent of Balfour Beatty Group Ltd
Northern Ltd
Balfour Beatty Engineering	Agent of Balfour Beatty Group Ltd
Services (HY) Ltd
Balfour Beatty Engineering Ltd	Dormant
Balfour Beatty Group	Employer For UK Workforce
Employment Ltd
Balfour Beatty Group Ltd	Construction & Support Services
Balfour Beatty Homes Ltd	Agent of Manring Homes Ltd
Balfour Beatty International Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Investment	Investment Holding Company
Holdings Ltd (i)
Balfour Beatty Management Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Nominees Ltd	Nominee Company
Balfour Beatty Overseas	Investment Holding Company
Investments Ltd
Balfour Beatty Overseas Ltd	Investment Holding Company
Balfour Beatty Property Ltd (i)	Agent of Balfour Beatty plc
Balfour Beatty Rail	Agent of Balfour Beatty Group Ltd
Infrastructure Services Ltd
Balfour Beatty Rail Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Rail Projects Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Rail	Agent of Balfour Beatty Group Ltd
Technologies Ltd
Balfour Beatty Rail Track	Agent of Balfour Beatty Group Ltd
Systems Ltd
Balfour Beatty	Agent of Balfour Beatty Group Ltd
Refurbishment Ltd
Balfour Beatty Regional	Agent of Balfour Beatty Group Ltd
Construction Ltd
Balfour Beatty Utility	Agent of Balfour Beatty Group Ltd
Solutions Ltd
Balfour Kilpatrick Ltd	Dormant
BB Indonesia Ltd	Support Services

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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252

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Entity	Principal activity
5 Churchill Place, Canary Wharf, London E14 5HU continued
Balvac Ltd	Agent of Balfour Beatty Group Ltd
Bical Construction Ltd	Agent of Balfour Beatty Group Ltd
Bignell & Associates Ltd	Agent of Balfour Beatty Group Ltd
Birse Group Ltd	Investment Holding Company
Birse Metro Ltd	Dormant
Bnoms Ltd (i)	Nominee Company
BPH Equipment Ltd	Agent of Balfour Beatty Group Ltd
Cowlin Group Ltd	Dormant
Devonshire House Dormant	Dormant
Three Ltd
Guinea Investments Ltd	Investment Holding Company
G. N. Haden & Sons Ltd	Dormant
Haden Building Services Ltd	Dormant
Haden Young Ltd (i)	Dormant
Hall & Tawse Western Ltd	Dormant
Laser Rail Ltd	Agent of Balfour Beatty Group Ltd
Lounsdale Electric Ltd	Dormant
Manring Homes Ltd (i)	Property Investment
Multibuild (Construction	Agent of Balfour Beatty Group Ltd
& Interiors) Ltd
Office Projects (Interiors) Ltd	Agent of Balfour Beatty Group Ltd
Raynesway Construction Ltd	Agent of Balfour Beatty Group Ltd
Strata Construction Ltd	Dormant
Hereford Steel Works, Holmer Road, Hereford HR4 9SW
Painter Brothers Ltd	Agent of Balfour Beatty Group Ltd
Kings Business Park, Kings Drive, Prescot, Merseyside L34 1PJ
Balfour Beatty Pension	Pension Fund Trustee
Trust Ltd (i)
C/O Mcgrigors Belfast LLP, Arnott House, 12–16 Bridge Street, Belfast BT1 1LS, Northern Ireland
Balfour Kilpatrick	Dormant
Northern Ireland Ltd
The Curve Building, Axis Business Park, Hurricane Way, Langley, Berkshire SL3 8AG
Balfour Beatty Ground	Agent of Balfour Beatty Group Ltd
Engineering Ltd

Entity	Principal activity
Balfour Beatty Infrastructure	Agent of Balfour Beatty Group Ltd
Services Ltd
Balfour Beatty Living Places Ltd	Agent of Balfour Beatty Group Ltd
Sunderland Streetlighting Ltd	Agent of Balfour Beatty Group Ltd
Testing and Analysis Ltd	Agent of Balfour Beatty Group Ltd
Maxim 7, Maxim Office Park, Parklands Avenue, Eurocentral, Holytown ML1 4WQ
Balfour Beatty Construction Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Construction	Agent of Balfour Beatty Group Ltd
Scottish & Southern Ltd
Balfour Beatty Kilpatrick Ltd	Agent of Balfour Beatty Group Ltd
Balfour Beatty Rail	Agent of Balfour Beatty Group Ltd
Residuary Ltd
Balfour Beatty Regional Civil	Agent of Balfour Beatty Group Ltd
Engineering Ltd
BBPFS LP (iii)	Investment Partnership
Glasgow Residences	Investment Holding Company
(Kennedy Street) Holdings Ltd
Glasgow Residences	Infrastructure Concession
(Kennedy Street) LLP (iii)
Glasgow Residences (Kennedy	Infrastructure Concession
Street) SPV Ltd
Hall & Tawse Ltd	Dormant
Initial Founder Partner GP1 Ltd	Investment Holding Company
Midmill Business Park, Tumulus Way, Kintore, Aberdeenshire
AB51 0TG
Balfour Beatty Engineering	Agent of Balfour Beatty Group Ltd
Services (CL) Ltd
Tower Bridge House, St Katharine’s Way, London E1W 1DD
Balfour Beatty Power	Dormant
Construction Ltd
Balfour Beatty Power Networks	Dormant
(Distribution Services) Ltd
Branlow Ltd	Dormant – In liquidation
Mansell Maintenance Ltd	Dormant
30 Old Bailey, London EC4M 7AU
Birse Construction Ltd	Investment Holding Company –
	In liquidation

Entity		Principal activity
Edgar Allen Engineering Ltd		Dormant – In liquidation
Mansell plc		Investment Holding Company –
		In liquidation
West Service Road, Raynesway, Derby DE21 7BG
Balfour Beatty Plant		Agent of Balfour Beatty Group Ltd
& Fleet Services Ltd
C/O Mazars LLP, 100 Queen Street, Glasgow G1 3DN, Scotland
Balfour Beatty Engineering		Dormant – In liquidation
Services (LEL) Ltd
Lumina Building, 40 Ainslie Road, Hillington Park, Glasgow
G52 4RU
Shaw-Petrie Ltd		Dormant
42–44 Clarendon Road, Watford, Hertfordshire WD17 1DR
Barlow & Young, Ltd		Dormant
Haden International Ltd		Dormant
Fourth Floor, 130 Wilton Road, London SW1V 1LQ
00158345	Ltd	Dormant
0119 8171	Ltd	Dormant
BICC Dormant One Ltd		Dormant
Devonshire House		Dormant
Dormant One Ltd
Third Floor, Devonshire House, Mayfair Place, London W1X 5FH
BICC Thermoheat Ltd		Dormant

Notes

(i) Held directly by Balfour Beatty plc.

(ii) 80% owned.

(iii) Partnership interests held.

(iv) 31 March year end.

(v) 81% owned.

(vi) The Group holds a 77.8% direct interest in Urban Fox Networks (UK) Ltd and an

indirect interest of 5.6% through the Group interest in Urban Electric Networks Ltd.

44 Details of related undertakings of Balfour Beatty plc as at 31 December 2025 continued

Subsidiary undertakings incorporated in the United Kingdom continued

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253

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44 Details of related undertakings of Balfour Beatty plc as at 31 December 2025 continued

Subsidiary undertakings incorporated outside the United Kingdom

Entity			Principal activity
Australia
Level	12,	680	George Street, Sydney, NSW 2000
Balfour Beatty Australian			Holding company
Limited Partnership (ii)
Balfour Beatty Australia Pty Ltd			Construction & Support Services
Bahamas
The Alexander Corporate Group Limited, One Millars Court, P.O. Box N-7117, Nassau
Balfour Beatty Bahamas Ltd			Dormant
Canada
Borden Ladner Gervais LLP, 22 Adelaide Street West, Suite
34	00, Toronto, ON, M5H 4E3
BB Group Canada Inc			Investment Holding Company
Taylor McCaffrey LLP, 900-400 St. Mary Avenue, Winnipeg, MB, R3C 4K5
Balfour Beatty Communities			Infrastructure Investment
GP, Inc
Balfour Beatty Communities, LP (ii)			Infrastructure Investment
Balfour Beatty Construction, LP (ii)			Construction Services
Balfour Beatty Construction			Construction Services
GP, Inc
Balfour Beatty Investments			Infrastructure Investment
GP, Inc
Balfour Beatty Investments, LP (ii)			Infrastructure Investment
Germany
Garmischer Strasse 35, 81373 Munich
Balfour Beatty Rail GmbH			Dormant
BICC Holdings GmbH			Dormant
Schreck-Mieves GmbH			Dormant
Hong Kong
5/F, Manulife Place, 348 Kwun Tong Road, Kowloon Hong Kong
Balfour Beatty Hong Kong Ltd			Construction & Support Services
India
6th Floor, N-1 Balsa Block, Manyata Embassy Business Park, Nagavara, Rachenahalli Village, Bangalore – 560045, India
Balfour Beatty Infrastructure			Engineering Design Consultancy
India Pvt. Ltd

Entity			Principal activity
Ireland
25 North Wall Quay, Dublin 1
Balfour Beatty Ireland Ltd			Support Services
Isle of Man
Tower House, Loch Promenade, Douglas IM1 2LZ, Isle of Man
Delphian Insurance Company Ltd (i)			Insurance Company
Jersey
12 Castle Street, St. Helier, Jersey
Balfour Beatty Employees			Employee Trust
Trustees Ltd (i)
Malaysia
12th Floor, Menara Symphony, No 5, Jalan Prof. Khoo Kay Kim, Seksyen	13,	46200	Petaling Jaya, Selangor
Balfour Beatty Rail Design			Support Services
International Sdn Bhd
Netherlands
Rapenburgerstraat 177/B, 1011 VM Amsterdam
Balfour Beatty Netherlands B.V.			Investment Holding Company
Romania
23 General Ernest Brosteanu Street, 1st District, 010		527, Bucharest
S.C. Balfour Beatty Rail S.R.L.			Dormant – In liquidation
Sri Lanka
Phase 3 Investment Promotion Zone, Katunayake, Colombo, Western Province
Balfour Beatty Ceylon (Private) Ltd			Support Services
Thailand
9 Soi Santisuk, Sithisarn Road, Huay Kwang, Bangkok
Asia Trade Development Co Ltd			Dormant
Balfour Beatty Construction			Dormant
(Thailand) Co Ltd
Balfour Beatty Holdings			Dormant
(Thailand) Co Ltd
Balfour Beatty Thai Ltd			Dormant
Linwood Co Ltd			Dormant
United States
1011	Centre Road, Suite 310, Wilmington DE 19805
Balfour Beatty Holdings Inc	Investment Holding Company

Entity	Principal activity
Balfour Beatty LLC	Investment Holding Company
300	Galleria Parkway, Suite 2050, Atlanta, GA 30339
Balfour Beatty Infrastructure, Inc	Construction Services
Corporation Service Company, 1127 Broadway Street NE, Suite 310, Salem OR 97301
Balfour Beatty Rock Springs, LLC	Business Services
Corporation Service Company, 1703 Laurel Street, Columbia, SC 29201
National Casualty and Assurance, Inc	Insurance Company
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808
Balfour Beatty	Infrastructure Holding Company
Campus Solutions, LLC
Balfour Beatty	Infrastructure Investment
Communities, LLC
Balfour Beatty Construction	Dormant
D.C., LLC
Balfour Beatty	Construction Services
Construction, LLC
Balfour Beatty	Infrastructure Investment
Developments HoldCo, LLC
Balfour Beatty	Construction Services
Developments, Inc
Balfour Beatty Equipment, LLC	Construction Services
Balfour Beatty Investments, Inc	Investment Company
Balfour Beatty Management Inc	Business Services
Balfour Beatty/Benham Military	Infrastructure Investment
Communities LLC (v)
Balfour Beatty/PHELPS Military	Infrastructure Investment
Communities LLC (iv)
Balfour Beatty Military Housing	Infrastructure Investment
Development LLC
Balfour Beatty Military Housing	Investment Holding Company
Investments LLC
Balfour Beatty Military Housing	Infrastructure Investment
Management LLC

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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Entity	Principal activity
Corporation Service Company, 251 Little Falls Drive,
Wilmington DE 19808 continued
Balfour Beatty –	Construction Services
Worthgroup, LLC
BBC AF Housing	Infrastructure Investment
Construction LLC
BBC AF Management/	Infrastructure Investment
Development LLC
BBC Independent Member I, Inc	Infrastructure Investment
BBC Independent Member II, Inc	Infrastructure Investment
BBC Military Housing –	Infrastructure Investment
ACC Group, LLC
BBC Military Housing –	Infrastructure Investment
AETC General Partner LLC (iii)
BBC Military Housing –	Infrastructure Investment
AETC Limited Partner LLC (iii)
BBC Military Housing –	Infrastructure Investment
AMC General Partner LLC
BBC Military Housing –	Infrastructure Investment
AMC Limited Partner LLC
BBC Military Housing – Bliss/	Infrastructure Investment
WSMR General Partner LLC
BBC Military Housing – Bliss/	Infrastructure Investment
WSMR Limited Partner LLC
BBC Military Housing – Carlisle/	Infrastructure Investment
Picatinny General Partner LLC
BBC Military Housing – Carlisle/	Infrastructure Investment
Picatinny Limited Partner LLC
BBC Military Housing –	Infrastructure Investment
FDWR LLC (v)
BBC Military Housing –	Infrastructure Investment
Fort Carson LLC
BBC Military Housing –	Infrastructure Investment
Fort Eisenhower LLC
BBC Military Housing –	Infrastructure Investment
Fort Hamilton LLC

Entity	Principal activity
BBC Military Housing –	Infrastructure Investment
Fort Jackson LLC
BBC Military Housing –	Infrastructure Investment
Hampton Roads LLC
BBC Military Housing –	Infrastructure Investment
Lackland LLC
BBC Military Housing –	Infrastructure Investment
Leonard Wood LLC
BBC Military Housing –	Infrastructure Investment
Navy Northeast LLC (v)
BBC Military Housing –	Infrastructure Investment
Navy Southeast LLC
BBC Military Housing –	Infrastructure Investment
Northern Group, LLC
BBC Military Housing –	Infrastructure Investment
Stewart Hunter LLC
BBC Military Housing –	Infrastructure Investment
Vandenberg General
Partner LLC (v)
BBC Military Housing –	Infrastructure Investment
Vandenberg Limited
Partner LLC (v)
BBC Military Housing –	Infrastructure Investment
West Point LLC
BBC Military Housing –	Infrastructure Investment
Western General Partner, LLC
BBC Military Housing –	Infrastructure Investment
Western Limited Partner, LLC
BBC Multifamily Holdings, LLC	Infrastructure Investment
BBCS – Northside Campus LLC	Infrastructure Investment
BBCS Development, LLC	Infrastructure Investment
BBD View GP LLC	Infrastructure Investment
BB Developments Sub	Infrastructure Investment
Holdco, LLC
BICC Cables Corporation	Business Services
Leonard (Denton) Owner, LLC	Infrastructure Investment

Entity	Principal activity
Northside Campus Limited	Infrastructure Concession
Partner, LLC
River Pointe (Conrow)	Infrastructure Investment
Owner, LLC
Oktiv (Tallahassee) Owner, LLC	Infrastructure Investment
Corporation Service Company, 300 Deschutes Way SW, Suite 304, Tumwater WA 98501
Howard S. Wright	Dormant
Construction Co
HSW, Inc	Dormant
CSC – Nevada, C/O CSC Services of Nevada, Inc., 502	East John Street, Carson City, Nevada 89706
Balfour Beatty-Golden	Construction Services
Construction Company
Balfour Beatty Construction	Construction Services
Company, Inc
Balfour Beatty Construction	Construction Services
Group, Inc

Notes

(i) Held directly by Balfour Beatty plc.

(ii) Partnership interests held.

(iii) 80% interest held.

(iv) 89% interest held.

(v) 90% interest held.

44 Details of related undertakings of Balfour Beatty plc as at 31 December 2025 continued

Subsidiary undertakings incorporated outside the United Kingdom continued

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44 Details of related undertakings of Balfour Beatty plc as at 31 December 2025 continued

Joint ventures incorporated in the United Kingdom

	% held by
Entity	the Group	Principal activity
Q14 Quorum Business Park, Benton Lane, Newcastle Upon Tyne, England, NE12 8BU
BBDE Orbital Holdings, LLP (iii) (v)	37.5	Investment Holding Company
Connect A30/A35 Holdings Ltd (iv)	20	Investment Holding Company
Connect A30/A35 Ltd (iv)	20	Infrastructure Concession
Connect A50 Ltd (iv)	25	Infrastructure Concession
Connect M1-A1 Holdings Ltd (i) (iv)	20	Investment Holding Company
Connect M1-A1 Ltd (iv)	20	Infrastructure Concession
Connect M77/GSO Holdings Ltd (ii) (iv)	85	Investment Holding Company
Connect M77/GSO plc (ii) (iv)	85	Infrastructure Concession
Connect Roads Ltd (iv)
East Wick and Sweetwater Projects (Holdings) Ltd (iv)	50	Infrastructure Concession
East Wick and Sweetwater Projects (Phase 1) Ltd (iv)	50	Infrastructure Concession
East Wick and Sweetwater Projects (Phase 2) Ltd (iv)	50	Infrastructure Concession
East Wick and Sweetwater Projects (Phase 3) Ltd (iv)	50	Infrastructure Concession
East Wick and Sweetwater Projects (Phase 4) Ltd (iv)	50	Infrastructure Concession
East Wick and Sweetwater Projects (Phase 5) Ltd (iv)	50	Infrastructure Concession
East Wick and Sweetwater Projects (Phase 7A) Ltd (iv)	50	Infrastructure Concession
East Wick and Sweetwater Projects (Phase 7) Ltd (iv)	50	Infrastructure Concession
East Wick and Sweetwater Finance (Holdings) Ltd (iv)	50	Investment Holding Company
East Wick and Sweetwater Projects (Finance) Ltd (iv)	50	Infrastructure Concession
South Cambridgeshire Projects LLP (v)	50	Infrastructure Concession
Connect Plus House, St Albans Road, South Mimms, Hertfordshire EN6 3NP
Connect Plus (M25) Holdings Ltd (iii) (iv)	15	Investment Holding Company
Connect Plus (M25) Intermediate Ltd (iii) (iv)	15	Infrastructure Concession
Connect Plus (M25) Issuer plc (iii) (iv)	15	Infrastructure Concession
Connect Plus (M25) Ltd (iii) (iv)	15	Infrastructure Concession
C/O Spaces, 100 West George Street, Glasgow, Scotland, G2 1PP
Holyrood Holdings Ltd	20	Investment Holding Company
Holyrood Student Accommodation Holdings Ltd	20	Infrastructure Concession
Holyrood Student Accommodation Intermediate Ltd	20	Infrastructure Concession
Holyrood Student Accommodation plc	20	Infrastructure Concession
Holyrood Student Accommodation SPV Ltd	20	Infrastructure Concession
Westminster House, Crompton Way, Segensworth West, Fareham, Hampshire PO15 5SS
Pevensey Coastal Defence Ltd	25	Infrastructure Concession

	% held by
Entity	the Group	Principal activity
C/O Pario Ltd, 18 Riversway Business Village, Navigation Way, Preston PR2 2YP
Consort Healthcare (Birmingham) Funding plc	40	Infrastructure Concession
Consort Healthcare (Birmingham) Holdings Ltd	40	Investment Holding Company
Consort Healthcare (Birmingham) Intermediate Ltd	40	Infrastructure Concession
Consort Healthcare (Birmingham) Ltd	40	Infrastructure Concession
9 Amberside House, Wood Lane, Paradise Industrial Estate, Hemel Hempstead, Hertfordshire, England HP2 4TP
Urban Electric Networks Ltd	25	Infrastructure Concession
		CWH

Notes

(i) Held directly by Balfour Beatty plc.

(ii) Due to the shareholders’ agreement between Balfour Beatty and the other shareholders requiring unanimity of agreement in

respect of significant matters related to the financial and operating policies of the company, the Directors consider that the Group

does not control the company and it has been accounted as a joint venture.

(iii) The Group owned a 37.5% partnership interest in BBDE Orbital Holdings LLP at 31 December 2022. Connect Plus (M25) Holdings

Ltd and its subsidiaries are 40% owned by BBDE Orbital Holdings LLP.

(iv) 31 March year end.

(v) Partnership interests held .

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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	% held by
Entity	the Group	Principal activity
Bermuda
Clarendon House, 2 Church Street, Hamilton HM 11
CP Bay Carry A LP (iii)	20	Infrastructure Concession
CP Bay Carry B LP (iii)	20	Infrastructure Concession
British Virgin Islands
Vistra Corporate Services Centre, Wickhams Cay II Road Town, Tortola VG1110
Gammon Asia Ltd	50	Management Company
Gammon Construction Holdings Ltd	50	Investment Holding Company
Canada
Taylor McCaffrey LLP, 900-400 St. Mary Avenue, Winnipeg, MB, R3C 4K5
CWH Design – Build GP (iii)	50	Infrastructure Investment
China
Hong Kong Avenida da Praia Grande, n°429, 25° andar D, em Macau
BBE&M (Macau) Ltd	50	Electrical and
		Mechanical Contracting
Gammon Building Construction (Macau) Ltd	50	Building Construction
No. 457, Shatian Section, Ganggang Avenue, Shatian Town, Dongguan City, Guangdong Province
Dongguan Pristine Metal Works Ltd	50	Manufacturing Services
25th Floor, Jardine House, 1 Connaught Place, Central, Hong Kong
Sanfield-Gammon Construction JV Company Ltd	50	Construction Services
22/F, Tower 1, The Quayside, 77 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong
AsiaBuild Ltd	50	Dormant
Balfour Beatty E&M Ltd	50	Dormant
Digital G Ltd	50	Technology and Innovation
Entasis Ltd	50	General Contractor
Gammon Building Construction Ltd	50	Building Construction
Gammon Capital Ltd	50	Dormant
Gammon Capital Management Ltd	50	Dormant
Gammon China Ltd	50	Investment Holding Company
Gammon Concrete Services Ltd	50	Dormant
Gammon Construction (China) Ltd	50	Building Construction
Gammon Construction (Vietnam) Holdings Ltd	50	Construction and
		Project Management
Gammon Construction Consultants (Shenzhen) Ltd	50
Gammon Construction Ltd (ii)	50	Engineering and Construction
Gammon E&M Ltd	50	Engineering Services
Gammon Engineering & Construction Company Ltd	50	Engineering and Construction

		% held by
Entity		the Group	Principal activity
Gammon Engineering Ltd		50	Dormant
Gammon Finance Ltd		50	Finance and Investment
Gammon Interiors Ltd		50	Dormant
Gammon Management Services Ltd		50	Construction
			Management Services
Gammon Plant Ltd		50	Plant and Equipment Hire
			and Maintenance
Gold Tactics Investment Ltd		50	Dormant
Into G Ltd		50	Interior Fit-Out and Contracting
Lambeth Associates Ltd		50	Management and
			Consultancy Services
Pristine Metal Works Ltd		50	Investment Holding Company
7/F & 8/F Tower A, Sunhope E Metro, 7018 Caitian Road, Futian District, Shenzhen, People’s
Republic of China
Gammon Construction Consultants (Shenzhen) Ltd		50	Support Services
Ireland
25 North Wall Quay, Dublin 1, D01 H104
Balfour Beatty CLG Ltd		50	Support Services
C/O Pario SPV Management Limited, Suite 54, Morrison Chambers, 32 Nassau St, Dublin 2, D02 AP29
Healthcare Centres PPP Holdings Ltd		40	Investment Holding Company
Healthcare Centres PPP Ltd		40	Infrastructure Concession
Malaysia
Unit B-9-7, Level 9, Capital 2, Oasis Square, No.2 Jalan PJU 1A/7A, Ara Damansara, 47301
Petaling Jaya, Selangor, Malaysia
Gammon Sdn Bhd		50	Dormant
Pesaka Gammon Construction Sdn Bhd		15	Dormant
Philippines
G/F Makati Stock Exchange, Ayala Avenue, Makati City, Metro Manila, Philippines
Gammon Philippines, Inc.		40	General Construction
MG Construction Ventures Holdings, Inc.		33	Property Investment
Singapore
239	Alexandra Road, 159930
Digital G (Singapore) Pte. Ltd		50	Equipment Services
Gammon Construction and Engineering Pte. Ltd		50	Construction Services
Gammon Construction Holdings (S) Pte. Ltd		50	Investment Holding Company
Gammon Pte. Ltd		50	Engineering and Construction
Lambeth Associates Design & Consultancy Pte Ltd		50	Management and
			Consultancy Services

44 Details of related undertakings of Balfour Beatty plc as at 31 December 2025 continued

Joint ventures incorporated outside the United Kingdom

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Strategic report Governance Financial statements Other information

		% held by
Entity		the Group	Principal activity
Thailand
21st Floor, Times Square Building, 246 Sukhumvit Road, Klongtoey Sub-District, Klongtoey District, Bangkok 10110, Thailand
Gammon (Thailand) Ltd		49	Dormant
23rd Floor, Times Square Building, 246 Sukhumvit Road, Klongtoey Sub-District, Klongtoey District, Bangkok 10110, Thailand
Gammon Construction (Thailand) Ltd		24.5	Dormant
Thai Gammon Ltd		24.5	Dormant
United States
Corporation Service Company, d/b/a CSC-Lawyers, Incorporating Service Company, 211	E. 7th Street, Suite 620, Austin TX 78701-3218
Northside Campus Partners, LP (iii)		5	Infrastructure Concession
Northside Campus Partners 2,LP (iii)		5	Infrastructure Concession
Northside Campus Partners 3, LP (i) (iii)		5	Infrastructure Concession
Northside Campus Partners 4, LP (i) (iii)		5	Infrastructure Concession
Northside Campus General Partner, LLC		50	Infrastructure Concession
Corporation Service Company, 251 Little Falls Drive, Wilmington DE19808
Arbor Greens (Newberry) Owner, LLC		50	Infrastructure Investment
BBC – ApexOne Carolina Cove, LLC		50	Infrastructure Investment
BBC – ApexOne Chenal Pointe, LLC		50	Infrastructure Investment
BBC – ApexOne Landings, LLC		50	Infrastructure Investment
BBC – ApexOne Lexington, LLC		50	Infrastructure Investment
BBC – ApexOne Paces Brook, LLC		50	Infrastructure Investment
BBC – ApexOne Retreat, LLC		50	Infrastructure Investment
BBC – ApexOne San Mateo, LLC		50	Infrastructure Investment
BBC – ApexOne Southwind, LLC		50	Infrastructure Investment
BBC Army Integrated, LLC		10	Infrastructure Investment
BBD-ApexOne Arbor Greens, LLC		50	Infrastructure Investment
Carolina Cove (Wilmington) Owner, LLC		50	Infrastructure Investment
Chenal Pointe (Little Rock) Owner, LLC		50	Infrastructure Investment
LAX Integrated Express Solutions Holdco, LLC		27	Infrastructure Concession
LAX Integrated Express Solutions, LLC		27	Infrastructure Concession
Landings (Jacksonville) Owner, LLC		50	Infrastructure Investment
Lexington (Ridgeland) Owner, LLC		50	Infrastructure Investment
Paces Brook (Columbia) Owner, LLC		50	Infrastructure Investment
San Mateo (Kissimmee) Owner, LLC		50	Infrastructure Investment
Southwind (Memphis) Owner, LLC		20	Infrastructure Investment
Southwind (Memphis) Holdings, LLC		20	Infrastructure Investment

	% held by
Entity	the Group	Principal activity
Swiftsure Housing Partners, LLC	23	Infrastructure Concession
View SA Holding Company LP (i) (iii)	87	Infrastructure Investment
View SA LLC (i)	87	Infrastructure Investment
Corporation Service Company, 1900 W Littleton Blvd., Littleton, CO 80120
Denver Transit Constructors LLC	30	Design and Construction
Denver Transit Operators LLC	50	Operations and Maintenance
Denver Transit Systems LLC	50	Design and Construction
National Registered Agents, Inc. 1209 Orange Street, Wilmington DE 19801, United States
CHC RES 20 – Mt. Laurel LLC	31	Infrastructure Investment
Mt. Laurel CHC Equity LLC	31	Infrastructure Investment
CHC Mt. Laurel LLC	31	Infrastructure Investment
Vietnam
5th Floor, Gemadept Tower, 2Bis–4–6 Le Thanh Ton Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
Gammon Construction Vietnam Co. Ltd	50	Building Construction and
		Management Services

Notes

(i) Due to the shareholders’ agreement between Balfour Beatty and the other shareholders requiring unanimity of agreement in

respect of significant matters related to the financial and operating policies of the company, the Directors consider that the Group

does not control the company and it has been accounted for as a joint venture.

(ii) Preference shares and/or deferred shares also held.

(iii) Partnership interest held.

44 Details of related undertakings of Balfour Beatty plc as at 31 December 2025 continued

Joint ventures incorporated outside the United Kingdom continued

NOTES TO THE FINANCIAL STATEMENTS CONT INUED

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258

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	% held by
Entity	the Group	Principal activity
United Kingdom
3 Sidings Court, White Rose Way, Doncaster, England, DN4 5NU
UBB Waste (Essex) Ltd	30	Dormant
United States
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808
ACC Group Housing, LLC (i)	100	Infrastructure Concession
AETC Housing LP (i) (ii)	100	Infrastructure Concession
AMC West Housing LP (i) (ii)	100	Infrastructure Concession
Carlisle/Picatinny Family Housing LP (ii)	10	Infrastructure Concession
FDWR Parent LLC	10	Infrastructure Concession
Fort Bliss/White Sands Missile Range Housing LP (ii)	10	Infrastructure Concession
Fort Carson Family Housing LLC	10	Infrastructure Concession
Fort Detrick/Walter Reed Army Medical Center	100	Infrastructure Concession
Housing LLC (i)
Fort Eustis/Fort Story Housing LLC	10	Infrastructure Concession
Fort Eisenhower Housing LLC	10	Infrastructure Concession
Fort Hamilton Housing LLC	10	Infrastructure Concession
Fort Jackson Housing LLC	10	Infrastructure Concession
Lackland Family Housing, LLC (i)	100	Infrastructure Concession
Leonard Wood Family Communities, LLC	10	Infrastructure Concession
Northeast Housing LLC	10	Infrastructure Concession
Northern Group Housing, LLC (i)	100	Infrastructure Concession
Southeast Housing LLC (i)	100	Infrastructure Concession
Stewart Hunter Housing LLC	10	Infrastructure Concession
Vandenberg Housing LP (i) (ii)	90	Infrastructure Concession
Western Group Housing, LP (i) (ii)	100	Infrastructure Concession
West Point Housing LLC	10	Infrastructure Concession

Notes

(i) The Group evaluated each of its interests in the military housing projects to determine if the associated entities should be

consolidated. This analysis included, but was not limited to, identifying the activities that most significantly impact an entity’s

economic performance, which party or parties control those activities and the risks associated with these entities. Decision-making

power over key facets of the contracts were evaluated when determining which party or parties had control over the activities that

most significantly impact a project’s economics. Based on this review, the Directors consider that the Group does not have the

power to direct these activities and does not control or jointly control them and therefore the entities have been accounted for as

associated undertakings.

(ii) Partnership interests held.

44 Details of related undertakings of Balfour Beatty plc as at 31 December 2025 continued

Associated undertakings incorporated in and outside the United Kingdom

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259

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UNAUDITED GROUP FIVE-YEAR SUMMARY

2025

£m

2024

£m

2023

£m

2022

£m

2021

£m

Income

Revenue including share of joint ventures and associates 10,767 10,015 9,595 8,931 8,263

Share of revenue of joint ventures and associates (1,278) (1,781) (1,602) (1,302) (1,078)

Group revenue 9,489 8,234 7,993 7,629 7,185

Underlying profit from operations 252 248 228 279 197

Underlying net finance income/(costs) 39 41 33 12 (10)

Underlying profit before taxation 291 289 261 291 187

Amortisation of acquired intangible assets (3) (4) (5) (6) (5)

Other non-underlying items 35 (71) (12) 2 (95)

Profit before taxation 323 214 244 287 87

Taxation (59) (36) (50) – 52

Profit for the year 264 178 194 287 139

Profit for the year attributable to equity holders 263 178 197 288 140

Profit/(loss) for the year attributable to non-controlling interests 1 – (3) (1) (1)

Profit for the year 264 178 194 287 139

Capital employed

Equity holders’ equity 1,143 1,121 1,19 8 1,378 1,369

Net non-recourse borrowings – infrastructure concessions 411 335 264 242 243

Net cash – other (1,446) (943) (842) (815) (790)

108 513 620 805 822

2025

Pence

2024

Pence

2023

Pence

2022

Pence

2021

Pence

Statistics

Underlying earnings per ordinary share

47.6 43.6 37. 3 47.5 29.7

Basic earnings per ordinary share 52.6 34.2 35.3 46.9 21.3

Diluted earnings per ordinary share 52.0 33.7 34.8 46.3 21.1

Proposed dividends per ordinary share 14.0 12.5 11.5 10.5 9.0

Underlying profit from operations before net finance income/(costs) including share of joint ventures and associates as a percentage of

revenue including share of joint ventures and associates 2.3% 2.5% 2.4% 3.1% 2.4%

Note

* Underlying earnings per ordinary share have been disclosed to give a clearer understanding of the Group’s underlying trading performance.

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SHAREHOLDER INFORMATION

Financial calendar 2026

7 May Annual General Meeting and trading update

1 July Final 2025 dividend payable

12 August* 2026 half year results announcement

3 December* Trading update

4 December* Interim 2026 dividend payable

* Dates are subject to change.

Registrar

Balfour Beatty’s share register is maintained by Equiniti, the Company’s Registrar. All administrative

enquiries relating to shareholdings and requests to receive corporate documents by email should, in

the first instance, be directed to Equiniti, clearly stating your registered address and, if available, your

shareholder reference number.

Please visit their website www.shareview.co.uk.

Telephone: +44 (0) 371 384 2703. Calls are charged at the standard geographic rate and will vary by

provider. Calls outside the United Kingdom are charged at the applicable international rate. Lines are

open between 8.30 am to 5.30 pm, Monday to Friday excluding public holidays in England and Wales.

Share certificates

In order to sell or transfer your shares, you must ensure that, where your shares are not held

electronically on your behalf, you have a valid share certificate. This must be in the name of Balfour

Beatty plc. If you lose or misplace your share certificate, you can contact Equiniti customer experience

centre and request a replacement certificate. Equiniti will then issue a letter of indemnity to you which

you will need to sign and return for a new certificate to be produced. There is a fee charged for this

service which includes an administration charge and a counter signature fee (the counter signature fee

can vary depending on the value of the shareholding).

Dividends and dividend reinvestment plan

Shareholders are encouraged to have dividends paid directly into their bank or building society account

through the Bankers Automated Clearing System (BACS). Equiniti can provide a dividend mandate form

in order to set this up.

Alternatively, the Company offers a Dividend Reinvestment Plan (DRIP) which allows holders of shares

to reinvest their cash dividends in the Company’s shares through a specially arranged share dealing

service. Full details of the DRIP and its charges, together with mandate forms, are available at:

www.shareview.co.uk.

International payment service

Shareholders outside the UK may elect to receive dividends directly into their overseas bank account,

or by currency draft, instead of by sterling cheque. For further information, contact the Company’s

Registrar, Equiniti using the contact details above.

Electronic shareholder communications

Shareview is an online service provided by the Company’s Registrar, through which you will be able to

access the full range of online shareholder services, including the ability to: view your holdings and

indicative share price and valuation; view movements on your holdings and your dividend payment

history; register a dividend mandate to have your dividends paid directly into your bank account;

change your registered address; sign up to receive e-communications to access the online proxy voting

facility; and download and print shareholder forms. Shareview is easy to use. Please visit

www.shareview.co.uk.

The Company’s website www.balfourbeatty.com also provides a range of information about the

Company, our people and businesses and our policies on corporate governance, sustainability and

health and safety. The website should be regarded as your first point of reference for information on

any of these matters. The share price can also be found there.

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Unsolicited telephone calls

In the past, some of our shareholders have received unsolicited telephone calls or

correspondence concerning investment matters from organisations or persons claiming or

implying that they have some connection with the Company. We advise our shareholders to be

wary of any unsolicited telephone calls, advice or correspondence concerning investment

matters from organisations or persons claiming or implying that they have some connection with

the Company. These are typically from overseas-based ‘brokers’ who target UK shareholders

offering to sell them what often turn out to be worthless or high-risk shares in UK or overseas

investments. Shareholders are advised to be very wary of any unsolicited advice, offers to buy

shares at a discount or offers of free annual and/or other reports on the Company.

If you receive any unsolicited investment advice:

@ Always ensure the firm is authorised by the Financial Conduct Authority (FCA), is on the FCA

check if a firm is on the FCA’s Register via register.fca.org.uk.

@ Ask the caller for their name and telephone number and inform them you will call them back.

Then check their identity to ensure that they are from the firm they say they are from by

calling the firm using the contact number listed on the FCA Register. If there are no contact

details on the FCA Register or you are told that they are out of date, or if you have any other

doubts, call the FCA Consumer Helpline on 0800 111 6768 (freephone) or 0300 500 8082

from the UK, or +44 207 066 1000 from abroad. Calls using next generation text relay, please

call (18001) 0207 066 1000.

@ If you are approached about a share scam, please visit the FCA’s ScamSmart website at

www.fca.org.uk/scamsmart where you can access information about the various types of

scam, including share and boiler room fraud, see the FCA’s Warning List and reports on firms

about whom consumers have expressed concerns. Alternatively, you can call the FCA

Consumer Helpline (see above). If you use an unauthorised firm to buy or sell shares or other

investments, you will not have access to the Financial Ombudsman Service or be eligible to

receive payment under the Financial Services Compensation Scheme if things go wrong.

@ You should also report any approach to Action Fraud, which is the UK’s national fraud

reporting centre, at www.actionfraud.police.uk, or by calling 0300 123 2040.

American Depository Receipts (ADRs)

An American Depository Receipt (ADR) is a negotiable instrument issued by a depositary bank that

evidences ownership of shares in a corporation organised outside the US. Each ADR represents a

specific number of underlying shares in the non-US company, on deposit with a custodian in the

applicable home market.

ADRs are generally treated as US domestic securities. They are quoted and traded in US Dollars and

are subject to the trading and settlement procedures of the market in which they trade.

Balfour Beatty’s ADR programme details

Balfour Beatty’s sponsored ADR programme with JPMorgan Chase Bank, N.A. (J.P. Morgan) closed in

June 2024.

Following this, J.P. Morgan established an unsponsored ADR programme in respect of Balfour Beatty’s

ordinary shares. All of the remaining ordinary shares held under the sponsored ADR programme were

transferred to the custodial account for the unsponsored ADR programme and all of the outstanding

American depository shares (ADSs) were cancelled, with unsponsored ADSs issued in respect of the

transferred ordinary shares.

Further information is available at https://www.adr.com/drprofile/05845R405

Gifting shares to your family or to charity

To transfer shares to another member of your family as a gift, please ask the Registrar for a Balfour

Beatty gift transfer form.

Alternatively, if you only have a small number of shares whose value makes ituneconomic to sell

them, you may wish to consider donating them to the share donation charity ShareGift (registered

charity no. 1052686), whose work Balfour Beatty supports. Any shares you donate to ShareGift will

beaggregated and sold when possible, and the proceeds will be donated to awide range of other

UKcharities. Since ShareGift was launched, over £64m has been given to more than 4,000 charities.

The relevant share transfer form may be obtained from the Registrar. For more information visit

www.sharegift.org.

Share dealing services

In addition to share dealing services provided by UK banks and brokers, Equiniti provide a telephone

and online share dealing service for UK resident shareholders. To use this service, telephone 03456

037 037 from within the UK. Calls are charged at the standard geographic rate and will vary by

provider. Lines are open Monday to Friday 8.00 am to 4.30 pm, UK time, excluding public holidays in

England and Wales. Alternatively, you can log on to www.equiniti.com. Equiniti Limited is authorised

and regulated by the Financial Conduct Authority.

SHAREHOLDER INFORMATION CONTINUED

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London Stock Exchange codes

The London Stock Exchange Daily Official List (SEDOL) code is: 0096162.

The London Stock Exchange ticker code is: BBY.

Capital gains tax (CGT)

For CGT purposes the market value on 31 March 1982 of Balfour Beatty plc’s ordinary shares of 50p

each was 267.6p per share. This has been adjusted for the 1 for 5 rights issue in June 1992, the 2 for

11 rights issue in September 1996 and the 3 for 7 rights issue in October 2009 and assumes that all

rights have been taken up.

Consolidated tax vouchers

Balfour Beatty issues a consolidated tax voucher annually to all shareholders who have their dividends

paid direct to their bank accounts. If you would prefer to receive a tax voucher at each dividend

payment date rather than annually, please contact the Registrar. A copy of the consolidated tax

voucher may be downloaded from the Share Portal at www.shareview.co.uk.

Enquiries

Enquiries relating to Balfour Beatty’s results, business and financial position should be made in writing

to the Corporate Communications Department at the address shown below or by email to

info@balfourbeatty.com.

Balfour Beatty Registered Office: 5 Churchill Place, Canary Wharf, London E14 5HU

Registered in England and Wales, registered number 00395826

Forward-looking statements

This report, including information included or incorporated by reference in it, may include statements

that are or may be forward-looking statements, beliefs or opinions, including statements with respect

to Balfour Beatty’s business, financial condition, operations and prospects. These forward-looking

statements may be identified by the use of forward-looking terminology or the negative thereof such

as “expects” or “does not expect”, “anticipates” or “does not anticipate”, “targets”, “aims”,

“continues”, “is subject to”, “assumes”, “budget”, “scheduled”, “estimates”, “risks”, “positioned”,

“forecasts” “intends”, “hopes”, “believes” or variations of such words or comparable terminology and

phrases or statements that certain actions, events or results “may”, “could”, “should”, “shall”,

“would”, “might” or “will” be taken, occur or be achieved. Such statements are qualified in their

entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking

statements are not based on historical facts, but rather on current predictions, expectations, beliefs,

opinions, plans, objectives, goals, intentions and projections about future events, results of operations,

prospects, financial condition and discussions of strategy.

By their nature, forward-looking statements involve known and unknown risks and uncertainties

because they relate to events and depend on circumstances that may or may not occur in the future.

These events and circumstances include changes in the global, political, economic, business,

competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates,

future business combinations or disposals, and any epidemic, pandemic or disease outbreak. If any

one or more of these risks or uncertainties materialises or if any one or more of the assumptions prove

incorrect, actual results may differ materially from those expected, estimated or projected. Such

forward-looking statements should therefore be construed in the light of such factors. As a result, you

are cautioned not to place any undue reliance on such forward-looking statements.

No representation or warranty is made that any of these statements or forecasts will come to pass or

that any forecast results will be achieved, and projections are not guarantees of future performance.

Forward-looking statements speak only as at the date of this report and, other than in accordance with

its legal or regulatory obligations, Balfour Beatty expressly disclaims any obligations or undertaking to

update, or revise, any forward-looking statements in this report.

No statement in this report is intended as a profit forecast or profit estimate and no statement in this

presentation should be interpreted to mean that Balfour Beatty’s earnings per share for the current or

future financial years would necessarily match or exceed the historical published earnings per share for

Balfour Beatty.

This report does not constitute or form part of any offer or invitation to sell or issue, or any solicitation

of any offer to purchase or subscribe for any securities. The making of this presentation does not

constitute any advice or recommendation regarding any securities.

Balfour Beatty plc | Annual Report and Accounts 2025

263

Strategic report Governance Financial statements Other information

NOTES

Balfour Beatty plc | Annual Report and Accounts 2025

264

Strategic report Governance Financial statements Other information

Balfour Beatty plc’s commitment to environmental issues is reflected

in this Annual Report, which has been printed on Symbol Freelife Satin

and Arena Smooth Extra White, an FSC

certified material.

This document was printed by Park Communications using its

environmental print technology, which minimises the impact of

printing on the environment, with 99% of dry waste diverted from

landfill. Both the printer and the paper mill are registered to ISO 14001.

Produced by Design Portfolio

www.design-portfolio.co.uk

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Balfour Beatty

5 Churchill Place

Canary Wharf

London E14 5HU

Telephone: +44(0) 20 7216 6800

www.balfourbeatty.com

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Balfour Beatty plc Annual Report and Accounts 2025