TIDMKLR
15 April 2020
Keller Group plc
Annual Report and Financial Statements for the year ended 31 December 2019 and
Notice of 2020 Annual General Meeting
Keller Group plc, the world's largest geotechnical specialist contractor,
announces that its Annual General Meeting will be held at 11.00am on Thursday
21 May 2020 at the offices of DLA Piper UK LLP, 160 Aldersgate Street, London
EC1A 4HT.
In connection with this, the following documents have been posted or made
available to shareholders:
· Annual Report and Accounts for the year ended 31 December 2019 ("Annual
Report")
· Notice of Annual General Meeting
· Proxy Form (in the case of shareholders on the register of members)
Copies of these documents have been submitted to the Financial Conduct
Authority's Electronic Submission System.
Copies of the Annual Report and Notice of Annual General Meeting are now
available to view on the Company's corporate website at www.keller.com.
In accordance with DTR 6.3.5, this announcement contains information in the
attached Appendix of the principal risk factors, the directors' responsibility
statement and a note to the accounts on related party transactions. This
information has been extracted in full unedited text from the Annual Report
2019. References to page numbers and notes in the Appendix refer to those in
the Annual Report 2019. A condensed set of financial statements was appended to
Keller Group plc's preliminary results announcement issued on 3 March 2020.
For further information, please contact:
Keller Group plc www.keller.com
Kerry Porritt, Group Company Secretary and Legal Advisor 020 7616
7575
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 six continents, Keller tackles an unrivalled 7,000 projects every year,
generating annual revenue of more than GBP2bn.
LEI number: 549300QO4MBL43UHSN10
Classification: 1.1
Appendix
Unedited extract from Annual Report 2019
Principal risks and uncertainties
The table below lists the principal risks and uncertainties as determined by
the Board that may affect the group and highlights 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.
Key: Strategy lever
1 Balanced portfolio
2 Engineered solutions
3 Operational excellence
4 Expertise and scale
Key: Movement in risk
Increased risk
Reduced risk
Constant risk
Link to viability
Financial
risk
Risk Potential Demonstrable mitigation Explanation
impact of risk
movement
(since 2018)
Inability to A lack of Mixture of long-term committed debt with Constant risk
finance our available varying maturity dates which comprise a GBP375m Link to
business funds revolving credit facility with a maturity of viability
Insufficient restricts November 2024 and a US private placement debt
levels of investment in of $125m ($50m note maturing in 2021 and $75m
funding, growth note maturing in 2024).
whether from opportunities, Active and open communication with the
operating whether revolving credit facility banking group
cash flow or through ensures that it understands the group's
external acquisition or financial performance and is supportive of
financing innovation. funding requirements.
facilities, In an extreme Strong free cash flow profile with the
that are circumstance, ability to turn off capital expenditure and
necessary to the lack of reduce dividends.
support the available Embedded procedures to monitor the effective
business. funds could management of cash and debt, including weekly
Link to lead to a cash reports and regular cash flow
strategic failure of the forecasting to ensure compliance with
lever: 3, 4 group to borrowing limits and lender covenants.
continue as a Culture focused on actively managing our
going concern. working capital; the annual bonus plan is
linked to executive remuneration through an
operating cash flow metric.
Monitoring of and response to external
factors that may affect funding availability;
in anticipation of a less stable global
economic environment, the Board announced in
March 2018 reduced leverage guidance from
1.5x-2.0x to 1.0x-1.5x.
Market risk
Risk Potential Demonstrable mitigation Explanation
impact of risk
movement
(since 2018)
A rapid Reduction in The diverse markets in which the group Constant risk
downturn in the demand operates, both in terms of geography and Link to
our markets for our market segment, provide protection to viability
Inability to products and individual geographic or segment slowdowns.
maintain a services may Having strong local businesses with in-depth
sustainable lead to a knowledge of the local markets enables early
level of significant detection and response to market trends.
financial deterioration Leveraging the global scale of the group,
performance in financial talent and resources can be redeployed to
throughout performance, other parts of the company during individual
the including market slowdowns.
construction cash flow The diverse customer base, with no single
industry generation. customer more than 5% of group revenue,
market cycle In an extreme reduces the potential impact of individual
which grows circumstance, customer failure caused by an economic
more than reduced cash downturn.
many other flow
industries generation
during could lead to
periods of a failure of
economic the group to
expansion and continue as a
falls more going
harder than concern.
many other
industries
when the
economy
contracts.
Link to
strategic
lever: 1, 2
Strategic risk
Risk Potential Demonstrable mitigation Explanation
impact of risk
movement
(since 2018)
Failure to Failure to A focus on understanding customers' Constant risk
procure new negotiate requirements and competitors' capabilities.
contracts on satisfactory Structured bid review processes in operation
satisfactory and appropriate throughout the group with well-defined
terms contractual selection criteria that are designed to
Increasing terms may ensure we take on contracts only where we
competition, result in understand and can manage the risks involved.
changing customer delays and The Project Lifecycle Management (PLM)
requirements or a disputes during Standard has introduced more rigour into how
loss of project risks are considered during the opportunity,
technological delivery, contract approval and project execution
advantage results negatively phases.
in a failure to impacting our Sales training, which includes a focus on
continue to win relationships contractual and commercial terms.
and retain with our
contracts on customers and
satisfactory the group's
terms and reputation for
conditions in our delivering
existing and new quality
target markets. products and
Link to strategic solutions.
lever: 1, 2, 3, 4 Inability to
enter into
commercially
viable
contracts may
have a negative
effect on the
profitability
of our projects
and prevent the
group from
achieving its
targets.
Losing our market Delivering A clear business strategy with defined Constant risk
share sustainable short-, medium- and long-term objectives, Link to
Inability to growth is a key which is monitored at local, divisional and viability
achieve component of group level.
sustainable our strategy. Continued analysis of existing and target
growth, whether Failure to markets to ensure opportunities that they
through deliver on our offer are understood.
acquisition, new key strategic An opportunities pipeline covering all
products, new objective may sectors of the construction market.
geographies or result in the A wide-ranging local branch network which
industry-specific loss of facilitates customer relationships and helps
solutions may confidence and secure repeat work.
jeopardise our trust of our Continually seeking to differentiate our
position as the key offering through service quality, value for
preferred stakeholders money and innovation.
international including Minimising the risk of acquisitions,
geotechnical investors, including getting to know a target company in
specialist financial advance, often working in joint venture, to
contractor. institutions understand the operational and cultural
Link to strategic and customers. differences and potential synergies. As well
lever: 1, 2 as undertaking these through due diligence
and structured and carefully managed
integration plans.
Ethical Non-compliance A Code of Business Conduct that sets out Reduced risk
misconduct and with relevant minimum expectations for all colleagues in Link to
non-compliance laws and respect of ethics, integrity and regulatory viability
with regulations regulations requirements and is backed by a training
Keller operates could lead to programme to ensure that it is fully embedded Strengthened
in many different substantial across the group. communication
jurisdictions and damage to A clear and confidential externally run of Keller's
is subject to Keller's 'whistleblowing' facility encouraging tone at the
various rules, reputation and/ employees to report any suspected misconduct. top and a
regulations and or large An Ethics and Compliance Officer at every renewed focus
other legal financial business unit who supports the ethics and on risk
requirements penalties. compliance culture and ensures best practice management
including those Losing the developed by the group is communicated and and internal
related to trust of our embedded into local business practices. control have
anti-bribery and customers, Regular workshops across the group to ensure decreased the
anti-corruption. suppliers and compliance risks are identified and exposure of
There is a risk other addressed. this risk.
that the group stakeholders See page 37 for detailed mitigations of
fails to maintain would have an health and safety risks.
the required adverse effect
level of on our ability
compliance. to deliver
Link to strategic against our
lever: 3, 4 strategy and
business
objectives.
Inability to Without a The Keller Innovation Board works closely New risk
maintain our structured with business units, divisions and global Keller's
technological innovation product teams to ensure a structured approach ability to
advantage approach, to innovation is in place across the group. innovate is
Keller has a including The Keller Innovation Conference was an essential to
history of sufficient important milestone to help make existing its operating
innovation that investment, innovation activities not only more model.
has given us a Keller may lose transparent, but also more focused,
technological its completive coordinated and quicker to implement in the
advantage which advantage. future.
is recognised by KDAQ, a group-wide innovation project, will
our clients and bring information together and make it
competitors. accessible in one simple and concise
Inability to platform. It will include all technical
maintain this information from Keller and third-party
advantage through sources at each stage of delivery, including
the continued data analysis and visualisations where
technological possible, and it will also be BIM-compatible.
advancements in
our equipment,
products and
solutions may
impact our
position in the
market.
Link to strategic
lever: 1, 2
Changing Inability to The group collaborates with the University of New risk
environmental achieve Surrey's Centre for Environment and An
factors Keller's Sustainability to apply sustainability best increasingly
Changes in commitment to practice to all business functions. active public
environmental deliver A Sustainability Steering Group is response to
legislation and solutions in an responsible for integrating sustainability environmental
relevant environmentally targets and measures into the group business concerns in
standards that conscious plan to successfully drive changes important the sectors
impact our manner may have to the company. in which we
product and a negative Further details can be found in the operate.
service offerings impact on our sustainability report on pages 39 to 46.
and an reputation,
increasingly affect employee
active public morale and lead
response to to loss of
environmental confidence from
concerns in the our customers,
sectors in which suppliers and
we operate. investors.
Link to strategic Product
lever: 3 offerings
become obsolete
because they
are no longer
compliant with
environmental
standards. We
may be required
to remediate at
our own cost to
attain
compliance.
Operational risk
Risk Potential Demonstrable mitigation Explanation
impact of risk
movement
(since 2018)
Service or Failure to Continuing to enhance our technological and Constant
solutions failure meet quality operational capabilities through investment risk
In designing a standards in our product teams, project managers and Link to
product or a could damage our engineering capabilities. viability
solution for our Employing geotechnical engineers that are
customers many reputation, focused purely on design.
factors need to result in The global product teams set standards,
be considered regulatory provide guidance and disseminates best
including client action and practice across the organisation for our 10
requirements, legal key products.
site and loading liability, and We seek to agree liability limits in our
conditions and impact contracts with customers.
local constraints financial Insurance solutions are in place to limit
(eg neighbouring performance. financial exposure of a potential customer
buildings, other The liability claim.
underground limitation
structures). period of our
Inadequate design products is
of a customer generally 12
product and/or years;
solution may lead consequently,
to an inability a poorly
to achieve the designed
required product/
standard. solution could
Misinterpretation have an impact
of client on our
requirements or long-term
miscommunication profitability.
of requirements
by the client may
lead to a poorly
designed solution
and consequently
failure.
Link to strategic
lever: 2, 4
Ineffective Inability to Ensuring we understand all of our risks Constant
execution of our successfully through the bid appraisal process and risk
projects deliver applying rigorous policies and processes to Link to
Failure to manage projects in manage and monitor contract performance. viability
our projects to line with the Ensuring we have high-quality people
ensure that they agreed delivering projects. Keller's Project
are delivered on customer Management Academy is designed to create
time and to requirements project managers with a consistent skill set
budget due to may result in across the entire organisation. The Academy
unforeseen ground cost overruns, covers a broad range of topics including
and site contractual contract management, planning, risk
conditions, disputes and assessment, change management,
weather-related reputational decision-making and finance.
delays, damage. The new KDAQ system will collect, process
unavailability of Ineffective and visualise data from any equipment;
key materials, project enabling comparison of performance across
workforce delivery may sites using similar products, identification
shortages or also expose of areas of best practice and quickly
equipment the company to raising awareness of where improvement is
breakdowns. long-term needed.
Link to strategic obligations The PLM Standard introduces a consistent
lever: 3, 4 including approach to project delivery with robust
legal action controls at every project phase.
and additional A formal, structured approach to LEAN across
costs to the organisation is being embedded, which is
remedy improving processes and strengthening
solution Keller's working culture.
failure.
Causing a serious Inability to A Board-led commitment to drive health and Constant
injury or maintain a safety programmes and performance with a risk
fatality to an positive vision of zero harm. Link to
employee or a health and An emphasis on safety leadership to ensure viability
member of the safety culture both HSEQ professionals and operational
public may lead to leaders drive implementation and sustainment
Failure to damage to of our safety standards through ongoing site
maintain high morale, an presence, using safety tours, safety audits,
standards of increase in safety action groups and mandatory employee
health and employee training.
safety, and an turnover rates Ongoing improvement of existing HSEQ systems
increase in and a decrease to identify and control known and emerging
serious injuries in HSEQ risks, which conform to internal
or fatalities productivity. standards.
leading to an Deterioration The new Incident Management Standard and
erosion of trust in health and incident management software will drive a
of employees and safety robust and consistent management process
potential performance across the organisation that ensures the
clients. may lead to cause of the incident is identified and
Link to strategic loss of actions are put in place to prevent
lever: 3 customer, recurrence.
supplier and
partner
confidence and
damage to our
reputation in
an area that
we regard as a
top priority.
Not having the Failure to Continuing to invest in our people and Increased
right skills to maintain organisation in line with the four pillars risk
deliver satisfactory of the Keller People agenda as noted below. We are
Inability to performance in Ensuring that the 'Right Organisation' is in seeing
attract and respect of our place with people having clear increased
develop excellent current accountabilities; each organisational unit competition
people to create projects and is properly configured with a matrix of line for skilled
a high-quality, failure to management, functional support, and product construction
vibrant, diverse deliver our expertise. and
and flexible strategy and As industry leader, that Keller is made up engineering
workforce. business of 'Great People' that are well trained, resources,
Link to strategic targets for motivated and have opportunities to develop in
lever: 2, 3, 4 growth. to their full potential. Project Managers particular
and field employees receive comprehensive in our North
training programmes which cover a broad American
range of topics including contract market.
management, planning, risk assessment,
change management, decision?making and
finance.
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.
Loss of security A cyber A dedicated cyber security team has been New risk
of our data and security established to monitor and respond to The
systems breach could potential incidents. introduction
Information result in Multi-factor authentication for all users of digital
security and leakage of prevents unauthorised access to Keller's solutions
cyber threats are proprietary networks and applications. such as
a concern across information, Advanced threat protection on all IT InSite and
industries operational equipment delivers comprehensive, ongoing KDAQ
worldwide. The disruptions, and real-time protection against viruses, increases
introduction of and loss of malware and spyware. the group's
digital solutions employee and A data protection framework ensures reliance on
such as InSite customer data. compliance with the General Data Protection IT and its
and KDAQ Regulation. inherent
increases the cyber risk
group's reliance exposure.
on IT and its
inherent cyber
risk exposure.
Link to strategic
lever: 3, 4
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 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 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.
27 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 Board and Executive Committee, who are the key
management personnel, comprised:
2019 2018
GBPm GBPm
Short-term employee benefits 5.4 5.1
Post-employment benefits 0.4 0.4
Termination payments 0.2 1.4
6.0 6.9
Other related party transactions
As at the year end there was a net balance of GBP0.2m owed to (2018: GBP1.1m owed
by) the joint venture. These amounts are unsecured, have no fixed date of
repayment and are repayable on demand. There were no sales by the group to
joint ventures during the year (2018: none).
During the year two members of management acquired the right to purchase the
Cyntech Anchors business at a fixed price over the next five years at their
option.
END
(END) Dow Jones Newswires
April 15, 2020 06:20 ET (10:20 GMT)
Keller (LSE:KLR)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Keller (LSE:KLR)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
