Balfour Beatty plc (BAFBF) Q4 2024 Earnings Call Transcript

2025-03-13 13:58:42 ET

Balfour Beatty plc (BAFBF)

Q4 2024 Earnings Conference Call

March 12, 2025, 5:00 AM ET

Company Participants

Leo Quinn - Group Chief Executive

Philip Harrison - Chief Financial Officer

Conference Call Participants

Gregor Kuglitsch - UBS

Andrew Nussey - Peel Hunt

Joe Brent - Liberum

Arnaud Lehmann - Bank of America

Robert Chantry - Berenberg

Jonny Coubrough - Deutsche Numis

Graham Hunt - Jefferies

Mark Howson - Dowgate Capital

Presentation

Leo Quinn

Good morning. Welcome to our 2024 Full Year Results. I'm joined here by Phil Harrison, my very able-bodied wingman, who is going to talk to you about the financial side of things and I'm going to talk about the aspiration and the future.

Let's start off. You can read the numbers. I think they're all very, very good, increase in profit. Love the fact that we finished with nearly GBP1 billion worth of cash in the bank. By the way, I'm going to use this nearly GBP1 billion many, many times in this presentation. So don't confuse the cash and the share buybacks and all the other bits and pieces, I'll be quite clear on it.

And of course the GBP18.4 billion backlog or order book with improved quality of margin and derisked. And then, of course, the increased share buyback this year. But I want to start by going back to 2014 and really what's behind all of this. And it's quite interesting. When you go back and you look at the presentation, back in 2014, I think to the nine-month point, our cash flow was minus $1 billion. We had a takeover offer by Carillion. I don't know if you remember, but John Laing made a pitch for our investment portfolio at $1 billion.

We had 89 distressed projects, which was closer to 110 when we got through them all. We had eight profit warnings, which I think was a record, record that you wouldn't really want to have. But we're in a pretty dire state. And we rolled out something called Build to Last. And I think one of the most interesting things is we said that we're going to do this transformation and recovery using self-help, i.e., we weren't going to go to the shareholders to actually ask some money. We were going to actually sell the assets we had and do the things that were necessary to run the company properly.

What you see here today isn't just like a blip. This is something which has been fashioned over a long period of time, which is 10 years. And it's really underpinned by our cultural transformation. So the question you got to ask yourself, well, okay, this is what you've done for me this year, but what have you done lately? And how do I know it's going to be repeatable?

Well, the culture that we have behind this, I think, makes us sustainable for the next decade. If you actually look at the employee engagement that we have year-on-year for 10 years, it's actually improved. We are ranking at some 84% score at the moment, which is actually 10 points higher than our peer groups, which is a phenomenal achievement....

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