TIDMKLR
13 April 2021
Keller Group plc
Annual Report and Accounts for the year ended 31 December 2020 and Notice of
2021 Annual General Meeting
Keller Group plc ("Keller", the "Company") announces that its Annual General
Meeting ("AGM") will be held at 9.00am on Wednesday 19 May 2021 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 2020 ("Annual
Report 2020")
· Notice of AGM
· Proxy Form (in the case of shareholders on the register of members)
Copies of these documents have been submitted, where appropriate, to the
National Storage Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The Annual Report 2020 and the Notice of AGM are now available to view on the
Company's website at www.keller.com.
Keller is closely monitoring developments relating to COVID-19 and how this may
affect the arrangements for the AGM. Shareholders should therefore continue to
refer to the Company's website and announcements for any updates in relation to
the AGM, including venue.
In addition, should shareholders wish to ask any questions of the Board
relating to the business of the AGM, 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 the DTR 6.3.5, this announcement contains information in the
attached 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 2020. This material should be read in conjunction with and is
not a substitute for reading the full Annual Report 2020. References to page
numbers and notes in the Appendix refer to those in the Annual Report 2020. A
condensed set of financial statements was appended to the Keller's preliminary
results announcement issued on 9 March 2021.
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 9,000 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
Classification: 1.1 (Annual financial and audit reports)
Appendix
Unedited extract from Annual Report 2020
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, which we will continue to manage centrally as well as regionally.
Key: Strategy lever Key: Risk movement
1 Balanced portfolio Increased risk Reduced risk
2 Engineered solutions
3 Operational excellence
4 Expertise and scale Constant risk Link to viability
Financial risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
Inability to A lack of Mixture of long-term committed
finance available funds debt with varying maturity Constant risk
our business restricts dates which comprise a £375m Link to viability
Insufficient investment in revolving credit facility with
levels of growth a maturity extended to
funding, whether opportunities, November 2025 and a US private
from operating whether through placement debt of $125m ($50m
cash flow or acquisition or note maturing in 2021 and $75m
external innovation. note maturing in 2024).
financing
facilities, that In an extreme Active and open communication
are necessary to circumstance, with the revolving credit
support the the lack of facility banking group ensures
business. available funds that it understands the
could lead to a Group's financial performance
Link to failure of the and is supportive of funding
strategic lever: Group to requirements.
3, 4 continue as a
going concern. 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 strong cash
management, even taking
account of the impact of
COVID-19, the Board announced
in November 2020 reduced
leverage guidance from
1.0x-1.5x to 0.5x-1.5x.
Market risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
A rapid downturn Reduction in the The diverse markets in which Constant risk
in our markets demand for our the Group operates, both in Link to viability
Inability to products and terms of geography and market
maintain a services may segment, provide protection to
sustainable lead to a individual geographic or While we expect a
level of significant segment slowdowns. slight shrinking
financial deterioration in of the
performance financial Since March 2020, COVID-19 has construction
throughout the performance, caused a decrease in economic market in 2021
construction including cash activity in several of the and an adverse
industry market flow generation. markets in which we operate. impact on our
cycle, which Whilst the Group has shown order book, we
grows more than In an extreme good resilience to this will mitigate
many other circumstance, change, it is likely that through our
industries reduced cash COVID-19 will continue to exposure across a
during periods flow generation depress the economies in number of sectors
of economic could lead to a affected markets over the next of the
expansion and failure of the 12 months. This may cause a construction
falls more Group to reduction in activity in the market and are
harder than many continue as a construction sector which well placed to
other industries going concern. adversely affects the Group's take advantage of
when the economy order book. opportunities,
contracts. especially in
Having strong local businesses infrastructure.
Link to with in-depth knowledge of the We will continue
strategic lever: local markets enables early to monitor this
1, 2 detection and response to risk closely,
market trends. paying close
attention to any
Leveraging the global scale of impact on the
the Group, talent and size of our order
resources can be redeployed to book and take
other parts of the company appropriate
during individual market mitigating
slowdowns. actions.
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 risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
Failure to Failure to A focus on understanding Increased risk
procure new negotiate customers' requirements and
contracts on satisfactory and competitors' capabilities. In addition to a
satisfactory appropriate potential adverse
terms contractual Structured bid review impact on our
Increasing terms may result processes in operation order book as a
competition, in delays and throughout the Group with result of a
changing disputes during well-defined selection downturn in our
customer project criteria that are designed to markets due to
requirements or delivery, ensure we take on contracts COVID-19, it is
a loss of negatively only where we understand and possible that
technological impacting our can manage the risks involved. there is
advantage relationships increased
results in a with our The Project Lifecycle competition for a
failure to customers and Management (PLM) Standard has reduced number of
continue to win the Group's introduced more rigour into contracts within
and retain reputation for how risks are considered those markets.
contracts on delivering during the opportunity, This may increase
satisfactory quality products contract approval and project pressure on bid
terms and and solutions. execution phases. pricing and
conditions in potentially erode
our existing and Inability to Sales training, which includes contract margins.
new target enter into a focus on contractual and We will continue
markets. commercially commercial terms. to monitor any
viable contracts increased
Link to may have a pressure on
strategic lever: negative effect contract margins
1, 2, 3, 4 on the and take
profitability of appropriate
our projects and mitigating
prevent the actions.
Group from
achieving
its targets.
Strategic risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
Losing our market Delivering A clear business strategy with Constant risk
share sustainable defined short, medium and Link to viability
Inability to growth is a key long-term objectives, which is
achieve component of our monitored at local, divisional
sustainable strategy. and group level.
growth, whether Failure to
through deliver on our Continued analysis of existing
acquisition, new key strategic and target markets to ensure
products, new objective may opportunities that they offer
geographies or result in the are understood.
industry-specific loss of
solutions, may confidence and An opportunities pipeline
jeopardise our trust of our key covering all sectors of the
position as the stakeholders construction market.
preferred including
international investors, A wide-ranging local branch
geotechnical financial network which facilitates
specialist institutions and customer relationships and
contractor. customers. helps secure repeat work.
Link to strategic Continually seeking to
lever: 1, 2 differentiate our offering
through service quality, value
for money and innovation.
North American businesses
reorganisation delivering
on cross-selling
opportunities. However, due to
COVID-19 there is an 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 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 Non-compliance A Code of Business Conduct Constant risk
misconduct and with relevant that sets out minimum Link to viability
non-compliance laws and expectations for all
with regulations regulations colleagues in respect of Strengthened
Keller operates could lead to ethics, integrity and communication of
in many different substantial regulatory requirements and is Keller's tone at
jurisdictions and damage to backed by a training programme the top and a
is subject to Keller's to ensure that it is fully renewed focus on
various rules, reputation and/ embedded across the Group. risk management
regulations and or large and internal
other legal financial A clear and confidential control have
requirements penalties. externally run maintained the
including those 'whistleblowing' facility exposure of this
related to Losing the trust encouraging employees risk.
anti-bribery and of our to report any suspected
anti-corruption. customers, misconduct.
There is a risk suppliers and
that the Group other An Ethics and Compliance
fails to maintain stakeholders Officer at every business unit
the required would have an who supports the ethics and
level of adverse effect compliance culture and ensures
compliance. on our ability best practice developed by the
to deliver Group is communicated and
Link to strategic against our embedded into local business
lever: 3, 4 strategy and practices.
business
objectives. Regular workshops across the
Group to ensure compliance
risks are identified and
addressed.
Strategic risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
Inability to Without a The Keller Innovation Board Constant risk
maintain our structured works closely with business
technological innovation units, divisions and global
product approach, product teams to ensure a
advantage including structured approach to
Keller has a sufficient innovation is in place across
history of investment, the Group.
innovation that Keller may lose
has given us a its completive Keller's continued investment
technological advantage. in both external and internal
advantage which equipment manufacture.
is recognised by
our clients and Keller Data AcQuisition
competitors. (KDAQ), a group-wide
Inability to innovation project, will bring
maintain this information together and make
advantage it accessible in one simple
through the and concise platform. It will
continued include all technical
technological information from Keller and
advancements in third-party sources at each
our equipment, stage of delivery, including
products and data analysis and
solutions may visualisations where possible,
impact our and it will also be
position in the BIM-compatible.
market.
Link to
strategic lever:
1, 2
Changing Inability to Collaboration with the Constant risk
environmental achieve Keller's University of Surrey's Centre
factors commitment to for Environment and While the focus
Changes in deliver Sustainability to apply around
environmental solutions in an sustainability best practice environmental
legislation and environmentally to all business functions. legislation is
relevant conscious manner increasing, we
standards that may have a A Sustainability Steering believe this will
impact our negative impact Group is responsible for present
product and on our integrating sustainability opportunities to
service reputation, targets and measures into the us that we are
offerings and an affect employee group business plan to well placed to
increasingly morale and lead successfully drive changes exploit. Our
active public to loss of important to the company. increasing
response to confidence from activity to
environmental our customers, Scope 1 and 2 carbon emissions improve
concerns in the suppliers and verified by accredited sustainability
sectors in which investors. external third party (Carbon over and above
we operate. Intelligence). our peers will
Product ensure we are
Link to offerings become Carbon Calculator tool used to ready to take
strategic lever: obsolete because identify/improve carbon opportunities as
3 they are no efficiency. they arise.
longer compliant
with Project team created to
environmental develop processes to meet Task
standards. We Force on Climate-related
may be required Financial Disclosures (TCFD)
to remediate at requirements.
our own cost to
attain Further details can be found
compliance. in the ESG and sustainability
section on pages 40 to 53.
Operational risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
Service or Failure to meet Continuing to enhance our Constant risk
solutions failure quality technological and operational Link to viability
In designing a standards could capabilities through
product or a damage our investment in our product
solution for reputation, teams, project managers and
customers many result in our engineering capabilities.
factors need to regulatory
be considered action and legal Employing geotechnical
including client liability, and engineers that are focused
requirements, impact financial purely on design.
site and loading performance.
conditions and Disaster Recovery/Business
local constraints The liability Continuity Plans in place
(eg neighbouring limitation across the Group.
buildings, other period of our
underground products is The global product teams set
structures). generally 12 standards, provide guidance
Inadequate design years; and disseminate best practice
of a customer consequently, a across the organisation for
product and/or poorly designed our eight key products.
solution may lead product/solution
to an inability could have an We seek to agree liability
to achieve the impact on our limits in our contracts with
required long-term customers.
standard. profitability.
Insurance solutions are in
Misinterpretation place to limit financial
of client exposure of a potential
requirements or customer claim.
miscommunication
of requirements
by the client may
lead to a poorly
designed solution
and consequently
failure.
Link to strategic
lever: 2, 4
Operational risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
Ineffective Inability to Ensuring we understand all of Constant risk
execution of our successfully our risks through the bid Link to viability
projects deliver projects appraisal process and applying
Failure to in line with the rigorous policies and
manage our agreed customer processes to manage and
projects to requirements may monitor contract performance.
ensure that they result in cost
are delivered on overruns, Ensuring we have high-quality
time and to contractual people delivering projects.
budget due to disputes and Keller's Project Management
unforeseen reputational Academy and Field Leadership
ground and site damage. Academy are designed to create
conditions, project managers with a
weather-related Ineffective consistent skill set across
delays, project delivery the entire organisation. The
unavailability may also expose academies cover a broad range
of key the Group to of topics including contract
materials, long-term management, planning, risk
workforce obligations assessment, change management,
shortages or including legal decision-making and finance.
equipment action and
breakdowns. additional costs KDAQ system enabling
to remedy comparison of performance
Link to solution across sites using similar
strategic lever: failure. products, identification of
3, 4 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 drives a
consistent approach to project
delivery with robust controls
at every project phase.
A formal, structured approach
to LEAN and 5S across the
organisation is being
embedded, which is improving
processes and strengthening
Keller's working culture.
Operational risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
Causing a Inability to Board-led commitment to drive Constant risk
serious maintain a health and safety programmes Link to viability
injury or positive health and performance with a vision
fatality to an and safety of zero harm.
employee or a culture may lead
member of the to damage to An emphasis on safety
public morale, an leadership to ensure both HSEQ
Failure to increase in professionals and operational
maintain high employee leaders drive implementation
standards of turnover rates and sustainment of our safety
health and and a decrease standards through ongoing site
safety, and an in productivity. presence, using safety tours,
increase safety audits, safety action
in serious Deterioration in groups and mandatory employee
injuries or health and training.
fatalities safety
leading to an performance may Ongoing improvement of
erosion of trust lead to loss of existing HSEQ systems to
of employees and customer, identify and control known and
potential supplier and emerging HSEQ risks, which
clients. partner conform to internal standards.
confidence and
Link to damage to our Incident Management Standard
strategic lever: reputation in an and incident management
3 area that we software driving a robust and
regard as a top consistent management process
priority. across the organisation that
ensures the cause of the
incident is identified and
actions are put in place
to prevent recurrence.
Not having the Failure to Continuing to invest in our Constant risk
right skills to maintain people and organisation in
deliver satisfactory line with the four pillars of
Inability to performance in the Keller People agenda as
attract and respect of our noted below.
develop current projects
excellent people and failure to Ensuring that the 'Right
to create a deliver our Organisation' is in place with
high-quality, strategy and people having clear
vibrant, diverse business targets accountabilities; each
and flexible for growth. organisational unit is
workforce. properly configured with a
matrix of line management,
Link to functional support and product
strategic lever: expertise.
2, 3, 4
As 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.
Operational risk
Risk Potential impact Demonstrable mitigation Risk movement
(since 2019)
Risk of Cyber security Building a cyber security and Constant risk
potential breach could information assurance team and
disruption in result in services. The threat
the business leakage of landscape
operations, proprietary Building a zero trust layered continues to
reputational information, technology capability. evolve each year
damage and/or operational and so we
loss or disruptions, and Creation of an Information continue to adapt
corruption of loss of employee Security Management System our monitoring,
data through and customer framework, referencing detection,
external or data. industry standards to ensure prevention and
internal appropriate governance, education
technical control and risk management processes to
threats and and then onward management for maintain a
malicious action compliance, maturity and balanced risk
Information development of service. perspective.
security
and cyber Introduction of technical We assess cyber
threats are capabilities and services to risks and
a concern across further enable prevention, determine
industries detection, prediction and appropriate
worldwide. The response services. actions for our
introduction of business.
digital Multi-factor authentication Existing
solutions such for all users prevents capabilities
as InSite and unauthorised access to continue to be
KDAQ increases Keller's networks and deployed and
the Group's applications. enhanced if
reliance on IT needed.
and its inherent Advanced threat protection on
cyber risk all IT equipment delivers As an example,
exposure. comprehensive, ongoing and having seen in
real-time protection against 2020 the rise in
Link to viruses, malware and spyware. the number of
strategic lever: ransomware
3, 4 Data protection framework to attacks and the
ensure compliance with the increased number
General Data Protection of reported
Regulation (GDPR) and other attacks that
standards of data protection. target backup as
well as
production
environments
across all
industries, we
shall implement
in 2021 a backup
solution for key
services that is
immutable and
cannot be
encrypted.
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.
28 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:
2020 2019
£m £m
Short-term employee benefits 8.3 5.4
Post-employment benefits 0.4 0.4
Termination payments 0.4 0.2
9.1 6.0
Other related party transactions
As at the year end there was a net balance of £0.1m owed by (2019: £0.2m owed
to) the joint venture. These amounts are unsecured, have no fixed date of
repayment and are repayable on demand.
END
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