Keller Group Plc - Annual Financial Report
Annual Report and Accounts for the year ended
In connection with this, the following documents have been posted or otherwise made available to shareholders:
·
Annual Report and Accounts for the year ended
· Notice of AGM 2025
· Proxy Form (for shareholders on the register of members)
· Form of Direction (for employee shareholders)
· Notice of Availability
In compliance with Listing Rule 9.6.1R,
copies of these documents have been submitted, where appropriate, to the National Storage Mechanism via the
We have also submitted the Annual Report 2024 in the electronic reporting format required by Disclosure Guidance and Transparency Rule (“DGTR”) 4.1.14R; and the Annual Report 2024 and the Notice of AGM 2025 are now available to view on the Investors section of the Company's website at
Investor centre |
The Board is keen to ensure that shareholders are able to exercise their right to participate in the meeting. Details on how to submit a proxy vote electronically, by post, online through CREST or Proxymity are set out in the Notice of AGM 2025.
Should shareholders wish to ask any questions of the Board relating to the business of the AGM 2025, they are encouraged to email their questions in advance to secretariat@keller.com or send them by post to the Company's registered office for the attention of the Company Secretary.
In accordance with DGTR 6.3.5R, this announcement contains information in the Appendix about the principal risks and uncertainties, the Directors’ responsibility statement and note 29 to the accounts on related party transactions. This information has been extracted in full unedited text from the Annual Report 2024. This material should be read in conjunction with and is not a substitute for reading the full Annual Report 2024. References to page numbers and notes in the Appendix refer to those in the Annual Report 2024.
A condensed set of financial statements was appended to the Keller's preliminary results announcement issued on
For further information, please contact:
Keller Group plc
www.keller.com
Notes to editors:
Keller is the world's largest geotechnical specialist contractor providing a wide portfolio of advanced foundation and ground improvement techniques used across the entire construction sector. With around 10,000 staff and operations across five continents, Keller tackles an unrivalled 5,500 projects every year, generating annual revenue of c£3bn.
LEI number: 549300QO4MBL43UHSN10
DGTR 6 Annex 1 Classification: 1.1 (Annual financial and audit reports)
Appendix
Principal risks and uncertainties
We list on the following pages the principal risks and uncertainties as determined by the Board that may affect the Group and highlight the mitigating actions that are being taken. The content of the table, however, is not intended to be an exhaustive list of all the risks and uncertainties that may arise .
What we review when assessing our principal and key risks:
Risk ownership Each risk has a named
owner. Risk velocity Measuring how quickly the
In addition, each principal risk is risk reaches its impact assessment in
sponsored by a member of the Executive the event the risk crystallises.
Committee, who drives progress.
Likelihood and impact Managed through a Mitigating actions Further controls and
globally applied five-by-five scoring mitigating activities required to
matrix. further mitigate likelihood or impact
of the risk.
Strategic levers Capturing the impact
Net risk After mitigating controls are on the Group’s strategic levers and
taken into account. interdependencies between principal
risks.
Risk appetite Defined at a risk Emerging risks Any relevant emerging
category level and split into five risks where the principal risk is
levels. impacted captured under medium and
long-term assessed risks.
All principal risks are detailed in a standardised format. This ensures an effective and consistent review, understanding, monitoring and reporting throughout the Group, both in the terminology and the assessment itself. The top-down process includes a rigorous review by both the Executive Committee and the Board twice a year. The bottom-up process includes at least quarterly reviews facilitated by the Group Head of Risk and Internal Audit at a business unit level across the Group. In addition, deep dive reviews are conducted as required with results fed into respective reviews.
Financial risk
1. Inability to finance our business
Risk owner – Chief Financial Officer
Description and impact
Failure to sufficiently
and effectively manage
the financial strength of
the Group could lead it
to:
-- Fail to meet
required tests
that allow it to
continue to use
the going concern
basis in Causes
preparing its
financial Failure to accurately
statements. forecast material
-- Fail to meet exposures and/or manage
financial the financial resources of
covenant tests, the Group.
potentially
leading to a
default event.
-- Have a lack of
available funds,
restricting
investment in
growth
opportunities,
whether through
acquisition or
innovation.
-- Be unable to meet
dividend payment
requirements.
Mitigation and internal
controls
-- Centralised
Treasury function
that is
responsible for
managing key
financial risks,
including
Link to strategy: liquidity and
credit capacity.
3, 4 -- Mixture of
long-term
Timeframe: committed debt
with varying
Medium and Long term maturity dates
which comprise a
Link to viability: £400m revolving
credit facility
Yes maturing in 2031
and a US private
Reduced facility headroom placement debt of
$300m , with $120m
maturing in 2030 Movement since 2023
and $180m
maturing in 2033. Reduced Risk
-- The Group
maintains New seven-year £400m RCF
significant secured (initial five
undrawn years with two one-year
facilities within extensions), along with
a high-quality continued strong
RCF bank operational performance
syndicate, which throughout 2024,
underpins the demonstrate clear ability
liquidity to manage both existing
requirements of and future risks.
the Group.
-- Strong free cash The $75m US private
flow profile – placement, which matured
flexibility on in December 2024 , was paid
capital down from existing
expenditure and facilities.
ability to reduce
dividends.
-- Embedded
procedures to
monitor the
effective
management of
cash and debt,
including weekly
cash reports and
regular cash flow
forecasting to
ensure compliance
with borrowing
limits and lender
covenants.
-- Culture focused
on actively
managing our
working capital
and monitoring
external factors
that may affect
funding
availability.
Market risk
2. A rapid downturn in our markets
Risk owner – Chief Financial Officer
Description and impact
Inability to maintain a Causes
sustainable level of
financial performance -- Customers postponing
throughout the construction or reducing
industry market cycle, which investment in
grows more than many other ongoing and new
industries during periods of projects at short
economic expansion and falls notice.
harder than many other -- Impact of increasing
industries when the economy inflation,
contracts. Any significant, especially in steel,
sustained reduction in the cement and energy.
level of customer activity -- Political
could adversely affect the instability leading
Group’s strategy, reducing to disruption in
revenue and profitability in supply chains
the short and medium term, impacting both
and negatively impact the availability and
longer-term viability of the price.
Group.
Link to strategy: Mitigation and internal
controls
1, 2
-- The diverse markets
Timeframe: in which the Group
operates, both in
Medium and Long term terms of geography
and market segment,
Link to viability: provide protection
to individual
Yes geographic or Movement since 2023
segment slowdowns.
Revenue decline -- Leveraging the Constant Risk
global scale of the
Group, talent and The Group continues to
resources can be maintain a very strong order
redeployed to other book across all divisions at
parts of the company near record levels.
during individual Inflation and interest rate
market slowdowns. risk is now beginning to
-- Having strong local abate in Keller’s key
businesses with markets. Geopolitical
in-depth knowledge uncertainty continues both
of the local markets due to the conflicts in
enables early Ukraine and Gaza, plus
detection and elections in many of
response to market Keller’s key markets.
trends.
-- The diverse customer
base, with no single
customer accounting
for more than 4% of
Group revenue,
reduces the
potential impact of
individual customer
failure caused by an
economic downturn.
Strategic risks
3. Losing our market share
Risk owner – Chief Financial Officer
Description and impact
Inability to achieve
sustainable growth, whether
through organic growth
acquisition, new products,
new geographies or
industry-specific solutions,
may:
-- Jeopardise our Causes
position as the
preferred -- Increased competitor
international activity especially
geotechnical in tight or
specialist contracting markets.
contractor. -- Failure to adjust to
-- Lead to changing customer
inefficiencies and demands or fully
increased operating understand and meet
costs, which in turn their requirements.
could impact our -- Inability to
ability to deliver identify changes in
balanced profitable market demands,
growth, which is a including changes to
key component of our promote
strategy. sustainability.
-- Failure to deliver
on our key strategic
objective may result
in the loss of
confidence and trust
of our key
stakeholders
including investors,
financial
institutions and
customers.
Mitigation and internal
Link to strategy: controls
1, 2 -- A clear business
strategy with
Timeframe: defined short,
medium and long-term
Short, Medium, and objectives, which is
Long-term monitored at local,
divisional and Group
Link to viability: level.
-- Continued analysis
Yes of existing and
target markets to
Revenue decline ensure opportunities
that they offer are
understood.
-- An opportunities
pipeline covering Movement since 2023
all sectors of the
construction market. Constant Risk
-- A wide-ranging local
branch network which We continued to see strong
facilitates customer improvement across the US in
relationships and 2024, where we continue to
helps secure repeat provide a wider range of our
work. products across more
-- Continually seeking locations following the
to differentiate our successful execution of the
offering through One Keller project. This
service quality, focus is also showing
value for money and success in the other
innovation. divisions as they diversify
-- North American their available product
businesses range to maintain and grow
reorganisation our market share.
delivering on
cross-selling
opportunities.
-- Minimising the risk
of acquisitions,
including getting to
know a target
company in advance
to understand the
operational and
cultural differences
and potential
synergies, as well
as undertaking these
through due
diligence and
structured and
carefully managed
integration plans.
4. Ethical misconduct and non-compliance with regulations
Risk owner – Company Secretary
Causes
Failure to comply
with the Code of
Business Conduct or
Description and impact related policies and
procedures could stem
Keller operates in many different from:
jurisdictions and is subject to
various rules, regulations and -- Failure to
other legal requirements including establish a
those related to anti-bribery and robust
anti-corruption. Failure to comply corporate
with the Code of Business Conduct culture.
or other regulations could leave -- Failure to
the Group exposed to: adopt a
compliance
-- Instances of bribery and risk
corruption. approach.
-- Fraud and deception. -- Failure to
-- Human rights abuses, such embed the
as modern slavery, child Group’s
labour abuses and human values and
trafficking. behaviours
-- Unfair competition across the
practices. entire
-- Unethical treatment within organisation,
our supply chain. including any
This could also apply to M&A joint
activity in relation to past deeds ventures.
of acquired companies. -- Failure to
have a robust
These failures could result in training and
legal investigations, leading to monitoring
Link to strategy: fines and penalties, reputational programme in
damage and business losses. place.
3, 4 -- Inadequate
due diligence
Timeframe: in M&A
process.
Short term -- Deliberate
non-compliance
Link to viability: .
Mitigation and internal controls
Yes
-- A Code of Business Conduct
One-off costs that sets out minimum
expectations for all
colleagues in respect of
ethics, integrity and
regulatory requirements, that
is updated annually and is
backed by a training programme
to ensure that it is fully
embedded across the Group.
-- Ethics and Compliance Officers
in every business unit who
support the ethics and
compliance culture and ensure
best practice developed by the
Group is communicated and Movement since 2023
embedded into local business
practices. Constant Risk
-- Regular workshops across the
Group to ensure compliance
risks are identified and
addressed.
-- Ethics and compliance updates
to the Audit and Risk
Committee semi-annually.
-- A Group M&A standard that sets
out the approach and process
to be followed for any M&A
activity.
-- An independent third-party
whistleblowing helpline that
is actively promoted.
Complaints are independently
investigated by the Compliance
and Internal Audit teams and
appropriate action taken where
necessary.
5. Inability to maintain our technological product advantage
Risk owner – Chief Construction Officer
Description and impact
Keller has a history of innovation Causes
that has given us a technological
advantage which is recognised by -- Failure to
our clients and competitors. maintain
Failure to maintain this advantage investment in
through the continued technological innovation
advancements in our equipment, and
products and solutions may: digitisation.
-- Increased
-- Impact our position in the competitor
market. investment in
-- Result in us not being innovative
selected for key complex, solutions.
high-value projects that -- Failure to
support the Group strategy. continue to
-- Result in the loss of invest in our
reputation for delivering people.
the best engineered
Link to strategy: solutions.
Mitigation and internal controls
1, 2
-- Innovation initiatives
Timeframe: developed at both Group and
divisional level to ensure a
Medium and Long-term structured approach to
innovation is in place across
Link to viability: the Group.
-- Innovation in low-carbon
No materials (cement, concrete,
cement-free binders), by
carrying out field trials and
collaborating with cement
suppliers and other companies
innovating in this space. Movement since 2023
-- Digitisation initiatives
focusing on strategy of Constant risk
facilitating equipment and
operational data capture.
-- We take a leadership role in
the geotechnical industry,
with many of our team playing
key roles in professional
associations and industry
activities around the world.
-- Global product teams set
standards, provide guidance
and disseminate best practice
across the Group.
-- Continued investment in both
external and internal
equipment manufacture.
6. Climate change
Risk owner – Chief Sustainability Officer
Description and impact
Climate change is a global
threat and failure to manage
and mitigate it could lead
to:
-- An inability to
achieve Keller’s
commitment to
deliver solutions in
an environmentally
conscious manner,
which may in turn Causes
have a negative
impact on our -- Failure to update
reputation, affect product and
employee morale and equipment offerings
lead to a loss of in line with both
confidence from our legislation and
customers, suppliers customer demand.
and investors.
-- Product offerings
and equipment used
becoming obsolete
because they are no
longer compliant
with environmental
standards.
Link to strategy: -- Remediation of
non-compliant work
1, 2, 3, 4 at our own expense
to maintain
Timeframe: compliance.
Mitigation and internal
Short, Medium, and controls
Long-term
-- Sustainability
Link to viability: Steering Committee
that is responsible
Yes for integrating
sustainability
One-off costs targets and measures
into the Group Movement since 2023
business plan to
successfully drive Constant Risk
changes important to
the company. We are starting to win
-- Scope 1 and 2 carbon project opportunities
emissions verified related to climate impact.
by accredited This is tempered by the
external third party introduction of more
(Carbon legislation relating to
Intelligence). climate impact, eg proposed
-- Carbon calculator new restriction for federal
tool used to construction projects in the
identify/improve US and CSRD in Europe .
carbon efficiency.
-- Processes to meet We continue to focus on
TCFD requirements delivering against our
embedded into sustainability targets and
business-as-usual meeting TCFD reporting
activities. requirements.
-- Cross-functional
working group
created to
understand and
develop processes
and procedures to
meet the Corporate
Sustainability
Reporting Directive
(CSRD) legislation.
Operational risks
7.Ineffective management of our projects
Risk owner – Chief Construction Officer
Description and impact Causes
Inability to successfully -- Misinterpretation
deliver projects in line of client
with the agreed customer requirements or
requirements (while miscommunication
maintaining satisfactory and of requirements
appropriate contractual by the client may
terms), site and loading lead to a poorly
conditions and local designed solution
constraints (eg neighbouring and consequently
buildings). In addition, an failure.
inadequate design of a -- Failure to
customer product and/or understand and
solution or failure to engage with the
effectively manage suppliers customer on a
may lead to: balanced approach
to allocation or
-- Cost overruns, sharing of risk
contractual disputes in the contract.
and a failure to -- Failure to
meet quality identify and
standards, damaging manage risks in
our reputation with our projects to
the customer and ensure that they
giving rise to are delivered on
potential regulatory time and to
action and legal budget, eg due to
liability, unforeseen ground
ultimately impacting and site
financial conditions,
performance. weather-related
-- Delays to executing delays,
projects waiting for unavailability of
materials and key materials,
ongoing business workforce
disruption, along shortages or
with additional equipment
costs to find breakdowns.
alternative -- Lack of
suppliers. comprehensive
-- Exposing the Group understanding of
to long-term contract
obligations obligations.
including legal -- Inadequate
action and resources
additional costs to (people, physical
remedy solution assets and
failure. materials).
Mitigation and internal
controls
-- Ensuring we
understand all of
our risks throughout
the Project
Performance
Management process
and applying
rigorous policies
and processes to
manage and monitor
risks and contract
performance.
-- The Group has
professional
commercial/contracts
personnel and
lawyers engaged when
negotiating
contracts.
Link to strategy: -- Ensuring we have
high-quality people
3, 4 delivering projects.
Keller’s Project
Timeframe: Management Academy
and Field Leadership
Short term Academy are designed
to create project
Link to viability: managers with a
consistent skill set
Yes across the entire
organisation. The
Contract margin decline academies cover a
broad range of
topics including
contract management,
planning, risk
assessment, change
management,
decision-making and Movement since 2023
finance.
-- Continuing to Constant Risk
enhance our
technological and Project execution in 2024
operational continued to maintain the
capabilities through improvement trend
investment in our witnessed throughout
product teams, 2023, which along with
project managers and the work under way to
our engineering create a new Project
capabilities. Performance Management
-- High-quality safety standard will put in
standards for place better controls to
operations (eg ensure continued
platform, cage effective execution of
handling), equipment projects across Keller.
standards and fleet This new standard will be
renewal. effective in 2025 and
-- The Project will be supported though
Lifecycle Management a dedicated application,
(PLM) Standard aims currently being
to drive a developed.
consistent approach
to project delivery
with robust controls
at every project
phase. This is
currently being
updated and will be
renamed Project
Performance
Management (PPM).
Alongside the
updated standard
will be an app to
support the
efficient and
effective execution
of projects.
-- The Group has
developed long-term
partnerships with
key suppliers,
working closely with
them to understand
their operations,
but is not
over-reliant on any
single one, with an
extensive network of
approved suppliers
in place across the
organisation to
support its
strategic ambitions.
-- A Supply Chain Code
of Business Conduct
that sets out
minimum expectations
for all suppliers in
respect of ethics,
integrity and
regulatory
requirements, that
is updated annually.
8.Causing a serious injury or fatality to an employee or a member of the public
Risk owner – Chief HSEQ Officer
Causes
-- Inadequ
ate
risk
identif
ication
,
assessm
ent
and
managem
ent.
-- Lack
of
clear
leaders
hip
driving
the
safety
culture
.
-- Lack
of
employe
e
compete
Description and impact ncy.
-- Conscio
Failure to maintain high standards of health us
and safety, and an increase in serious decisio
injuries or fatalities leading to: n
taken
-- An erosion of trust of employees and by
potential clients. employe
-- Damage to staff morale, an increase e to
in employee turnover rates and a shortcu
decrease in productivity. t
-- Threat of potential criminal approve
prosecutions, fines, disbarring from d
future contract bidding and process
Link to strategy: reputational damage. to
benefit
3 product
ion.
Timeframe: -- Poorly
designe
Short term d
process
Link to viability: es
that
Yes do not
elimina
One-off costs te or
mitigat
e
risk.
-- Lack
of
focus
on the
wellbei
ng and
mental
health
of
employe
es and
JV
partner
s.
Mitigation and internal controls
-- Board-led commitment to drive health
and safety programmes and
performance with a vision of zero harm.
-- An emphasis on safety leadership to
ensure both HSEQ professionals
and operational leaders drive
implementation and sustainment of our
safety standards through ongoing site Movement
presence, using safety tours, since 2023
safety audits, safety action groups
and mandatory employee training. Constant Risk
-- Ongoing improvement of existing HSEQ
systems to identify and control
known and emerging HSEQ risks, which
conform to internal standards.
-- Incident Management Standard and
incident management software
driving a robust and consistent
management process across the
organisation that ensures the cause of
the incident is identified and
actions are put in place to prevent
recurrence.
9.Not having the right skills to deliver Risk owner –Chief People Officer Causes -- Inability to recruit and retain strong performers. -- Lack of a diverse workforce. -- Failure to maintain Description and impact and promote the Keller culture. Failure to attract, develop -- Overheating of and retain the right people market causing could negatively impact our: significant increase in demand or -- Capability to win competition for and execute work people. safely and -- Lack of visibility efficiently. of long-term -- Ability to stay pipeline for career ahead of our progression competition. resulting in -- Reputation and the existing employees confidence of our leaving the key stakeholders. business. -- Post COVID-19 recovery driving increase in attrition or people leaving sector. -- Pressure from wage inflation and increased offers from competition. Mitigation and internal controls -- Continuing to invest in our people and organisation in line with the four pillars of the Keller People agenda as noted below. -- Ensuring that the ‘Right Organisation’ Linkto strategy: is in place with people having clear 2, 3, 4 accountabilities; each organisational Timeframe: unit is properly configured with a Short, Medium, and matrix of line Long-term management, functional support Link to viability: and product expertise. No -- As an industry Movement since 2023 leader, that Keller is made up of ‘Great Constant Risk People’ that are well trained, Inflationary pressure on pay motivated and have is reducing across many opportunities to locations where Keller develop to their operates as inflation rates full potential. fall back to more normal Project managers and levels. There are still some field employees pockets of pressure on receive competition for skilled comprehensive personnel in some parts of training programmes Keller. which cover a broad range of topics However, generally, job including contract markets are beginning to management, show signs of a slowdown, planning, risk which will hopefully ease assessment, change this issue. This focus management, remains on retaining staff decision-making and with the right skills to finance. deliver. -- A strong focus on the ‘Exceptional Performance’ of employees in delivering commercial outcomes safely for Keller based upon project successes for our customers. Business leaders are incentivised to deliver their annual financial and safety commitments to the Group. -- The ‘Keller Way’ provides guidance to the company’s employees and leaders to comply with local laws and work within Keller’s values and Code of Business Conduct.
10.Information Technology, cyber security and assurance
Risk owner – Chief Information Officer
Causes
-- Failure to
maintain
appropriate
threat
prevention,
identification
and
resolution
mechanisms
either
technically
or through
Description and impact processes.
-- Poor internal
Failure, degradation or error in IT governance.
systems or cyber security incidents -- Failure to
could result in: embed
preventative
-- Loss of intellectual property culture.
and competitive advantage. -- Lack of or
-- Loss of personal data. inadequate
-- Operational impact training and
restricting the ability to awareness
carry out business-critical leading to
activities. mistakes and
-- Potential fines and errors.
penalties. -- Inconsistent
-- Reputational damage leading approach to
to loss of market and data
customer confidence. security,
-- Failure to meet client IT or especially
security requirements to win with JV
or maintain contracts. partners and
external
third
Link to strategy: parties.
-- Cyber
3, 4 attacks.
-- Failure to
Timeframe: obtain or
maintain
Short term external
security
Link to viability: certifications
that are
No required by
clients.
Mitigation and internal controls
-- The Group has a cyber security
and information assurance team
and is utilising zero-trust
layered technology.
-- The Group has created an
Information Security Management
System framework, referencing
industry standards to ensure
appropriate governance, control
and risk management and then
onward management for
compliance, maturity and
development of service.
-- Introduction of technical
capabilities and services to
further enable prevention, Movement since 2023
detection, prediction and
response services. Constant Risk
-- Multi-factor authentication for
all users prevents unauthorised
access to Keller’s networks and
applications and further
controls limit access to only
Keller-approved devices.
-- Advanced threat protection on
all IT equipment delivers
comprehensive, ongoing and
real-time protection against
viruses, malware and spyware.
-- Data protection framework to
ensure compliance with the
General Data Protection
Regulation (GDPR) and other
standards of data protection.
-- Proactive threat-hunting
throughout the environment.
Responsibility statement of the Directors in respect of the Annual Report and the financial statements
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 as a whole; and
-- the Strategic report and the Directors’ report, including content
contained by reference, includes a fair review of the development and
performance of the business and the position and performance 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.
The Board confirms that the Annual Report and the financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group’s position and performance, business model and strategy.
29 Related party transactions
Transactions between the parent, its subsidiaries and joint operations, which are related parties, have been eliminated on consolidation. Other related party transactions are disclosed below:
Compensation of key management personnel
The remuneration of the
2024£m 2023£m
Short-term employee benefits 8.5 8.2
Post-employment benefits 0.3 0.3
8.8 8.5
Other related party transactions
As at
