TIDMKLR
12 April 2022
Keller Group plc
Annual Report and Accounts for the year ended 31 December 2021 and Notice of
2022 Annual General Meeting
Keller Group plc ("Keller", the "Company") announces that its Annual General
Meeting will be held at 9.30am on Wednesday 18 May 2022 ("AGM 2022") 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 otherwise
made available to shareholders:
· Annual Report and Accounts for the year ended 31 December 2021 ("Annual
Report 2021")
· Notice of AGM 2022
· Proxy Form (in the case of shareholders on the register of members)
In compliance with Listing Rule 9.6.1R, copies of these documents have been
submitted, where appropriate, to the National Storage Mechanism via the FCA's
Electronic Submission System and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
We have also submitted the Annual Report 2021 in the electronic reporting
format required by Disclosure Guidance and Transparency Rule ("DGTR") 4.1.14R;
and the Annual Report 2021 and the Notice of AGM 2022 are now available to view
on the Company's website at www.keller.com.
Shareholders should be aware that arrangements for the AGM 2022 may change at
short notice. We will give notice of any changes to our arrangements, including
venue, as early as possible before the date of the meeting via our website or
via a regulatory information service.
Should shareholders wish to ask any questions of the Board relating to the
business of the AGM 2022, 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 Group Company Secretary and Legal
Advisor.
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 28 to the accounts on related party
transactions. This information has been extracted in full unedited text from
the Annual Report 2021. This material should be read in conjunction with and is
not a substitute for reading the full Annual Report 2021. References to page
numbers and notes in the Appendix refer to those in the Annual Report 2021. A
condensed set of financial statements was appended to the Keller's preliminary
results announcement issued on 8 March 2022.
For further information, please contact:
Keller Group plc www.keller.com
Kerry Porritt, Group Company Secretary and Legal Advisor 020 7616
7575
Silvana Glibota-Vigo, Group Head of Secretariat
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 6,000 projects every year,
generating annual revenue of more than £2bn.
LEI number: 549300QO4MBL43UHSN10
DGTR 6 Annex 1 Classification: 1.1 (Annual financial and audit reports)
Appendix
Principal risks and uncertainties
The table on the following pages 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.
The COVID-19 pandemic is having and will continue to have an impact across the
entire organisation. We have incorporated commentary into affected principal
risks and we will continue to manage mitigation centrally as well as
regionally. We have also taken account of the impact of climate-related risks
and opportunities on our principal risks and uncertainties.
Key: Strategic lever
1 Balanced portfolio 3 Operational excellence
2 Engineered 4 Expertise and scale
solutions
Financial risk
Risk Potential impact Demonstrable Risk movement (since
mitigation 2020)
Inability to finance A lack of available Mixture of long -term Constant risk Link
our business funds restricts committed debt with to viability
Insufficient levels of investment in growth varying maturity dates Looking forward, as
funding, whether from opportunities, whether which comprise a £375m new facilities are
operating cash flow or through acquisition or revolving credit either required or
external financing innovation. facility with a renewed, we will look
facilities, that are In an extreme maturity extended to at ESG-linked funding,
necessary to support circumstance, the lack November 2025 and a US alongside traditional
the business. of available funds private placement debt funding alternatives.
Link to strategic could lead to a of $75m maturing in
lever: failure of the Group 2024. The $50m note
3 4 to continue as a going maturing in 2021 was
concern. redeemed from existing
facilities.
Active and open
communication with the
revolving credit
facility banking group
ensures that it
understands the
Group's financial
performance and is
supportive of funding
requirements.
Strong free cash flow
profile with the
ability to turn off
capital expenditure
and 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; the
annual bonus plan is
linked to executive
remuneration through
an operating cash flow
metric. Please see the
Directors'
remuneration report
for further
information on
metrics.
Monitoring of and
response to external
factors that may
affect funding
availability; as a
result of the
continued strong cash
management, even
taking account of the
ongoing impact of
COVID-19, the Board
announced in November
2021 that it expected
leverage to be at the
bottom end of the
0.5x-1.5x guided range
at 31 December 2021.
Market risk
Risk Potential impact Demonstrable Risk movement (since
mitigation 2020)
A rapid downturn in Reduction in the The diverse markets in Constant risk Link
our markets demand for our which the Group to viability
Inability to maintain products and services operates, both in As expected, we saw a
a sustainable level of may lead to a terms of geography and slight shrinking of
financial performance significant market segment, the construction
throughout the deterioration in provide protection to market in 2021, with
construction industry financial performance, individual geographic recovery moving at
market cycle, which including cash flow or segment slowdowns. different speeds in
grows more than many generation. COVID-19 has continued each geography. North
other industries In an extreme to cause disruption in America was the most
during periods of circumstance, reduced economic activity in advanced in recovery,
economic expansion and cash flow generation several of the markets with Europe in line
falls more harder than could lead to a in which we operate. with expectations and
many other industries failure of the Group Whilst the Group has AMEA remaining the
when the economy to continue as a going shown good resilience most challenging. We
contracts. concern. to this change in will continue to
Link to strategic 2021, it is likely mitigate through our
lever: that COVID-19 will market position across
1 2 continue to depress a number of sectors of
the economies in the construction
affected markets over market and are well
the next 12 months. placed to take
This may cause a advantage of
reduction in activity opportunities,
in the construction especially in
sector which adversely infrastructure. We
affects the Group's will continue to
order book. monitor this risk
Having strong local closely, paying close
businesses with attention to any
in-depth knowledge of impact on the size of
the local markets our order book, which
enables early has recovered to a
detection and response record level, and take
to market trends. appropriate mitigating
Leveraging the global actions.
scale of the Group,
talent and resources
can be redeployed to
other parts of the
company during
individual market
slowdowns.
The diverse customer
base, with no single
customer accounting
for more than 3% of
Group revenue, reduces
the potential impact
of individual customer
failure caused by an
economic downturn.
Strategic risks
Risk Potential impact Demonstrable Risk movement (since
mitigation 2020)
Failure to procure Failure to negotiate A focus on Increased risk
new contracts on satisfactory and understanding Our business depends
satisfactory terms appropriate customers' on purchasing
Increasing contractual terms may requirements and materials efficiently
competition, changing result in delays and competitors' and in a timely
customer requirements disputes during capabilities. manner, linked to
or a loss of project delivery, Structured bid review project execution.
technological negatively impacting processes in COVID-19 continues to
advantage results in our relationships operation throughout disrupt supply
a failure to continue with our customers the Group with chains, putting
to win and retain and the Group's well-defined pressure both on the
contracts on reputation for selection criteria continuity of supply
satisfactory terms delivering quality that are designed to and also on pricing.
and conditions in our products and ensure we take on Fluctuations in these
existing and new solutions. contracts only where costs cannot always
target markets. Inability to enter we understand and can be passed on in full
Link to strategic into commercially manage the risks to the customer,
lever: viable contracts may involved. especially with
1 2 have a negative The Project Lifecycle increased competition
3 4 effect on the Management (PLM) for a reduced number
profitability of our Standard has of contracts, which
projects and prevent introduced more puts pressure on bid
the Group from rigour into how risks pricing. Our focus on
achieving its are considered during maintaining our
targets. the opportunity, supply chain and
contract approval and managing material
project execution price risk for our
phases. critical materials is
Sales training, which actively managed
includes a focus on through our business
contractual and unit procurement
commercial terms. teams.
Losing our market Delivering A clear business Constant risk Link
share sustainable growth is strategy with defined to viability
Inability to achieve a key component of short, medium and While we are seeing
sustainable growth, our strategy. Failure long-term objectives, improvement across
whether through to deliver on our key which is monitored at the US, selling a
acquisition, new strategic objective local, divisional and whole range of
products, new may result in the Group level. services not
geographies or loss of confidence Continued analysis of previously offered in
industry-specific and trust of our key existing and target regions before One
solutions, may stakeholders markets to ensure Keller was
jeopardise our including investors, opportunities that implemented, due to
position as the financial they offer are COVID-19 there is an
preferred institutions and understood. economic squeeze
international customers. An opportunities globally, increasing
geotechnical pipeline covering all pressure on volume/
specialist sectors of the market share. This is
contractor. construction market. being somewhat offset
Link to strategic A wide-ranging local by focused, targeted
lever: branch network which M&A activity.
1 2 facilitates customer The focus on
relationships and sustainability
helps secure repeat continues to increase
work. from both government
Continually seeking and private clients
to differentiate our and we are well
offering through placed to take
service quality, advantage of
value for money and opportunities
innovation. supported by our wide
North American product offering.
businesses
reorganisation
delivering on
cross-selling
opportunities.
However, due to
COVID-19 there is an
ongoing economic
squeeze globally,
increasing pressure
on volume/market
share.
Minimising the risk
of acquisitions,
including getting to
know a target company
in advance, often
working in a joint
venture, 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.
Ethical misconduct Non-compliance with A Code of Business Constant risk Link
and non-compliance relevant laws and Conduct that sets out to viability
with regulations regulations could minimum expectations Strengthened
Keller operates in lead to substantial for all colleagues in communication of
many different damage to Keller's respect of ethics, Keller's tone at the
jurisdictions and is reputation and/or integrity and top and a renewed
subject to various large financial regulatory focus on risk
rules, regulations penalties. requirements and is management and
and other legal Losing the trust of backed by a training internal control have
requirements our customers, programme to ensure maintained the
including those suppliers and other that it is fully exposure of this
related to stakeholders would embedded across the risk. Refresher
anti-bribery and have an adverse Group. training on code of
anti-corruption. effect on our ability A clear and conduct taking place
There is a risk that to deliver against confidential across the Group.
the our strategy and externally run
Group fails to business objectives. 'whistleblowing'
maintain the required facility encouraging
level of compliance. employees to report
Link to strategic any suspected
lever: misconduct.
3 4 An Ethics and
Compliance Officer at
every business unit
who supports the
ethics and compliance
culture and ensures
best practice
developed by the
Group is communicated
and embedded into
local business
practices.
Regular workshops
across the Group to
ensure compliance
risks are identified
and addressed.
Inability to maintain Without a structured Innovation Constant risk
our technological innovation approach, initiatives developed
product advantage including sufficient at both Group and
Keller has a history investment, Keller divisional level to
of innovation that may lose its ensure a structured
has given us a competitive approach to
technological advantage. innovation is in
advantage which is place across the
recognised by our Group.
clients and Keller's continued
competitors. investment in both
Inability to maintain external and internal
this advantage equipment
through the continued manufacture.
technological Global product teams
advancements in our set standards,
equipment, products provide guidance and
and solutions may disseminate best
impact our position practice across the
in the market. Group.
Link to strategic Digitisation
lever: initiatives focusing
1 2 on strategy of
facilitating
equipment and
operational data
capture, bringing
information together
and making it
accessible on a
single platform. It
will include all
technical information
from Keller and
third-party sources
at each stage of
delivery, including
data analysis and
visualisations where
possible, and it will
also be
BIM-compatible.
Changing Inability to achieve Collaboration with Increased risk
environmental factors Keller's commitment the University of While the focus
Changes in to deliver solutions Surrey's Centre for around environmental
environmental in an environmentally Environment and legislation is
legislation and conscious manner may Sustainability to increasing, we
relevant standards have a negative apply sustainability believe this will
that impact our impact on our best practice to all also present
product and service reputation, affect business functions. opportunities to us
offerings and an employee morale and The Sustainability that we are well
increasingly active lead to loss of Steering Committee is placed to exploit.
public response to confidence from our responsible for Our increasing
environmental customers, suppliers integrating activity to improve
concerns in the and investors. sustainability sustainability will
sectors in which we Product offerings targets and measures put us in a good
operate. become obsolete into the Group position to compete
Link to strategic because they are no business plan to with our peers as
lever: longer compliant with successfully drive opportunities arise.
3 environmental changes important to We have now put in
standards. We may be the company. place targets for
required to remediate Scope 1 and 2 carbon Scopes 1, 2 and 3.
at our own cost to emissions verified by For Scope 3, the
maintain compliance. accredited external target covers
third party (Carbon transportation of
Intelligence). materials, business
Carbon calculator travel and waste
tool used to identify disposal.
/improve carbon We have also
efficiency. developed a process
Project team created to capture
to develop processes climate-related risks
to meet Task Force on and opportunities in
Climate-related line with TCFD
Financial Disclosures reporting
(TCFD) requirements. requirements and now
Further details can have a
be found in the ESG climate-related risk
and sustainability and opportunity
section on pages 42 register.
to 67.
Climate-related risks and opportunities
Climate change is a global threat and, as such, will continue to have many
impacts across our business over the short (1 year), medium (2-5 years) and
long term (6-30 years). Nonetheless, we believe there are also many
opportunities as we, and the rest of the world, look to decarbonise. We fully
support the aims of the TCFD and are using this framework to record and
communicate the impacts of climate change on our business. We also use this to
improve our disclosure of climate-related financial information. Please see our
TCFD dashboard on page 52 for further information. An update on significant
climate-related risks and opportunities is provided below:
Physical-Acute Transition
Policy and Legal Market
Flooding, drought, heavy precipitation and Current and emerging There is a risk that
other extreme weather events, which are legislation could our customer base
expected to increase over the medium and impact our financial contracts and
long term, can affect our ability to performance over the switches to our
conduct geotechnical projects. Forest fires medium term. As competitors over the
have impacted our Australian and Western governments introduce medium or long term
North America business, directly delaying carbon taxes and as a result of not
projects in this area, which could lead to other legislation, responding to client
lost revenue. Flooding in Europe also operating costs and demand for
delayed projects in that region. These the costs of raw lower-carbon
events may also cause harm to our employees materials may solutions. This could
as well as damage to our buildings, yards increase. prove more costly for
and equipment. Keller is committed projects related to
Our management and project teams take a to reducing the the climate
view on the risk factors that might carbon intensity of transition, such as
adversely impact their ability to our work, which will flood defence
successfully deliver any given project. aid mitigation of the projects. More
These are formalised within the Group-wide impact of any laws or carbon-intensive
PLM Standard. regulations. For more projects, such as
Keller continues to offer new and details on what those using jet
sustainable techniques for working in our Keller is doing, grouting, may see a
markets. See pages 47, 49 and 51 for more please refer to page decrease in client
details. Where these markets are exposed to 47. demand.
acute or chronic climate extremes, our Keller has therefore
design skills, global reach and product developed a number of
range enable us to deliver some of the most more sustainable
complex projects in the industry. We construction
believe these factors set us apart from our solutions which will
competitors and therefore also present an help mitigate these
opportunity. market risks. For
We will look at these impacts, alongside example, Keller's
chronic physical impacts, in more detail vibro stone column
with scenario analysis modelling later in solution can be used
2022. instead of the
traditional
continuous-flight
auger piling; this
technique can reduce
the embodied carbon
dioxide produced by
up to 90%. Most of
this saving is
achieved by replacing
the use of concrete
and reinforced steel,
which have high
embodied carbon, with
lower embodied carbon
stone aggregate.
To highlight the
benefits of these
lower embodied carbon
techniques, we use
the European
standardised EFFC-DFI
carbon calculator to
demonstrate the
carbon savings from
alternative
solutions.
Operational risks
Risk Potential impact Demonstrable Risk movement (since
mitigation 2020)
Service or solutions Failure to meet Continuing to enhance Constant risk Link
failure quality standards our technological and to viability
In designing a product could damage our operational
or a solution for reputation, result in capabilities through
customers, many regulatory action and investment in our
factors need to be legal liability, and product teams, project
considered including impact financial managers and our
client requirements, performance. engineering
site and loading The liability capabilities.
conditions and local limitation period of Employing geotechnical
constraints (eg our products is engineers that are
neighbouring generally 12 years; focused purely on
buildings, other consequently, a poorly design.
underground designed product/ Disaster Recovery/
structures). solution could have an Business Continuity
Inadequate design of a impact on our Plans in place and
customer product and/ long-term reviewed across the
or solution may lead profitability. Group.
to an inability to The global product
achieve the required teams set standards,
standard. provide guidance and
Misinterpretation of disseminate best
client requirements or practice across the
miscommunication of organisation for our
requirements by the eight key products.
client may lead to a We seek to agree
poorly designed liability limits in
solution and our contracts with
consequently failure. customers.
Link to strategic Insurance solutions
lever: are in place to limit
2 4 financial exposure of
a potential customer
claim.
Ineffective execution Inability to Ensuring we understand Constant risk Link
of our projects successfully deliver all of our risks to viability
Failure to manage our projects in line with through the bid
projects to ensure the agreed customer appraisal process and
that they are requirements may applying rigorous
delivered on time and result in cost policies and processes
to budget due to overruns, contractual to manage and monitor
unforeseen ground and disputes and contract performance.
site conditions, reputational damage. Ensuring we have
weather-related Ineffective project high-quality people
delays, unavailability delivery may also delivering projects.
of key materials, expose the Group to Keller's Project
workforce shortages or long-term obligations Management Academy and
equipment breakdowns. including legal action Field Leadership
Link to strategic and additional costs Academy are designed
lever: to remedy solution to create project
3 4 failure. managers with a
consistent skill set
across the entire
organisation. The
academies cover a
broad range of topics
including contract
management, planning,
risk assessment,
change management,
decision-making and
finance.
Keller Data
Acquisition (KDAQ)
system enabling
comparison of
performance across
sites using similar
products,
identification of
areas of best practice
and quickly raising
awareness of where
improvement is needed.
Safety Standards for
operations (eg
platform, cage
handling), Equipment
Standards and fleet
renewal.
The PLM Standard aims
to drive a consistent
approach to project
delivery with robust
controls at every
project phase.
A formal, structured
approach to Lean and
5S is being rolled out
across the
organisation, which is
improving processes
and strengthening
Keller's working
culture.
Causing a serious Inability to maintain Board-led commitment Constant risk Link
injury or fatality to a positive health and to drive health and to viability
an employee or a safety culture may safety programmes and
member of the public lead to damage to performance with a
Failure to maintain morale, an increase in vision of zero harm.
high standards of employee turnover An emphasis on safety
health and safety, and rates and a decrease leadership to ensure
an increase in serious in productivity. both HSEQ
injuries or fatalities Deterioration in professionals and
leading to an erosion health and safety operational leaders
of trust of employees performance may lead drive implementation
and potential clients. to loss of customer, and sustainment of our
Link to strategic supplier and partner safety standards
lever: confidence and damage through ongoing site
3 to our reputation in presence, using safety
an area that we regard tours, safety audits,
as a top priority. safety action groups
and mandatory employee
training.
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.
Not having the right Failure to maintain Continuing to invest Increased risk
skills to deliver satisfactory in our people and We are seeing
Inability to attract performance in respect organisation in line increased competition
and develop excellent of our current with the four pillars for skilled personnel
people to create a projects and failure of the Keller People as well as
high-quality, vibrant, to deliver our agenda as noted below. inflationary pressure
diverse and flexible strategy and business Ensuring that the on pay across many
workforce. targets for growth. 'Right Organisation' locations where Keller
Link to strategic is in place with operates. This is
lever: people having clear leading to increased
2 3 accountabilities; each risk around recruiting
4 organisational unit is and retaining staff
properly configured with the right skills
with a matrix of line to deliver.
management, functional
support and product
expertise.
As an industry leader,
that Keller is made up
of 'Great People' that
are well trained,
motivated and have
opportunities to
develop to their full
potential. Project
managers and field
employees receive
comprehensive training
programmes which cover
a broad range of
topics including
contract 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.
Risk of potential Cyber security breach Building a cyber Constant risk
disruption in the could result in security and
business operations, leakage of proprietary information assurance The threat landscape
reputational damage information, team and services. continues to evolve
and/or loss or operational Building a zero trust each year and so we
corruption of data disruptions, and loss layered technology continue to adapt our
through external or of employee and capability. monitoring, detection,
internal technical customer data. Creation of an prevention and
threats and malicious Information Security education processes to
action Management System maintain a balanced
Information security framework, referencing risk perspective.
and cyber threats are industry standards to We assess cyber risks
a concern across ensure appropriate and determine
industries worldwide. governance, control appropriate actions
The introduction of and risk management for our business.
digital solutions such and then onward Existing capabilities
as InSite and KDAQ management for continue to be
increases the Group's compliance, maturity deployed and enhanced
reliance on IT and its and development of if needed.
inherent cyber risk service. As an example, having
exposure. Introduction of seen over the last two
Link to strategic technical capabilities years the rise in the
lever: and services to number of ransomware
3 4 further enable attacks and the
prevention, detection, increased number of
prediction and reported attacks that
response services. target backup as well
Multi-factor as production
authentication for all environments across
users prevents all industries, we
unauthorised access to have implemented a
Keller's networks and backup solution for
applications. key services that is
Advanced threat immutable and cannot
protection on all IT be encrypted.
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.
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.
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:
2021 2020
£m £m
Short-term employee benefits 8.2 8.3
Post-employment benefits 0.3 0.4
Termination payments 0.4 0.4
8.9 9.1
Other related party transactions
As at the year end there was a net balance of £0.1m owed by (2020: £0.1m owed
by) the joint venture. These amounts are unsecured, have no fixed date of
repayment and are repayable on demand.
END
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