Building the foundations

for a sustainable future

Annual Report and Accounts 2022

Keller Group plc Annual Report and Accounts 2022

For further information

visit us online at

keller.com/investors

Every day, people

around the world

live, work and play

on ground prepared

by Keller, the world’s

largest geotechnical

specialist contractor.

Whatever the size of the

project, we have the people,

expertise, experience and

financial stability to respond

quickly with the optimum

solution, execute it safely

and see it through to a

successful conclusion.

Strategic report

01 Highlights

02 At a glance

04 Investment case

06 Chairman’s statement

10 Our market

12 Our business model

14 ChiefExecutiveOfficer’sreview

18 Our purpose, values, strategy

and culture

20 Our strategy

22 North America

24 Europe

26 Asia-Pacific,MiddleEast

andAfrica(AMEA)

28 ChiefFinancialOfficer’sreview

34 Principal risks and uncertainties

44 Task Force on Climate-related

Financial Disclosures

52 ESG and sustainability

74 Non-financialreportingstatement

76 GRI index

Governance

78 Chairman’s introduction

80 Board of Directors

82 Executive Committee

84 Board leadership

86 Section 172 statement

88 Governanceframework

92 Board composition, succession

and evaluation

94 Environment Committee report

96 Social and Community Committee report

98 Nomination and Governance

Committee report

101 Audit and Risk Committee report

108 Annual statement from the Chair

of the Remuneration Committee

110 Remuneration in context

112 Remuneration at a glance

114 Annual remuneration report

122 Directors’ report

125 Statement of Directors’ responsibilities

Financial statements

126 Independent auditor’s report

138 Consolidated income statement

139 Consolidated statement of

comprehensive income

140 Consolidated balance sheet

141 Consolidated statement of

changes in equity

142 Consolidatedcashflowstatement

143 Notes to the consolidated

financialstatements

194 Company balance sheet

195 Company statement of changes in equity

196 Notes to the company

financialstatements

Other Information

203 Adjusted performance measures

206 Financial record

207 Contacts

208 Cautionary statement

2022

20222022

2022

2021

£2,944.6m

100.7p

£218.8m

£108.6m

£1.4bn

£45.0m£67. 8m

37.7p

3.7%

£2,222.5m

84.2p

£119.4m

£88.5m

£1.3bn

£55.6m£76.4m

35.9p

4.0%

Revenue

£2,944.6m

+32%

Diluted underlying earnings per share

100.7p

+20%

Net debt

£218.8m

+83%

Underlying operating profit

£108.6m

+23%

Order book

£1.4bn

+8%

Statutory profit after tax

£45.0m

-19%

Statutory operating profit

£67.8m

-11%

Dividend

37.7p

+5%

Underlying operating margin

3.7%

-30bps

Financial highlights

Underlying Statutory

2022 2021 2022 2021

Operating profit

(£m) 108.6 88.5 67.8 76.4

Operating margin

(%) 3.7 4.0 2.3 3.4

Return on capital employed

(%) 14.9 13.9 9.3 12.0

Profit after tax

(£m) 73.2 60.7 45.0 55.6

Net debt (£m)

2, 3

218.8 119.4 298.9 193.3

1 The 2021 comparative financial results have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination measurement

adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

2 Net debt is on a covenant basis. Reconciliation to statutory numbers is set out in the adjusted performance measures section on page 203.

3 Net debt on a statutory basis is set out in the adjusted performance measures section on page 203.

Group highlights

Strategic report Governance Financial statements

Strategic report

Highlights

Strategic report

At a glance

A balanced portfolio Engineered solutions

Operational excellence Expertise and scale

At its simplest, we get ground ready to build on, providing solutions

to geotechnical challenges across the entire construction sector.

We have the people, expertise, experience and financial stability

to respond quickly and see projects through safely and successfully.

Our purpose

Building the foundations

for a sustainable future.

Our values

Our values are what we have judged as most

important to how we work with colleagues and

customers across the globe.

Our vision

To be the leading provider of

specialist geotechnical solutions.

established employees acquisitions since 2000

Integrity

Collaboration

Excellence

1860 c10,000 27

Our strategy

To be the preferred international geotechnical

specialist contractor focused on sustainable

markets and attractive projects generating

sustained value for our stakeholders.

Our local businesses will leverage the Group’s

scale and expertise to deliver engineered solutions

and operational excellence, driving market

share leadership in our selected segments.

For more information see pages 20-21 For more information see pages 18-19

02 Keller Group plc Annual Report and Accounts 2022

Strategic report

At a glance

Marine Instrumentation

and monitoring

Earth retention

Post-tension systems

Ground improvement

Industrial services

Our organisation

North-East

South-East

Florida

Central

West

Canada

Specialty Services

Moretrench and RECON

Suncoast

Central Europe

North-East Europe

South-East Europe

and Nordics

South-West Europe

ASEAN

Austral

India

Keller Australia

Middle East and Africa

What we do

Using our industry-leading portfolio

of techniques, our engineers can

design the best solutions that reduce

materials, cost and time forour clients.

business units

6,000

contracts executed ayear

£25k to £10m

typical range in project value

£500k

average project value

North America Europe AMEA

(Asia-Pacific, Middle East and Africa)

Deep foundations Grouting

For more information see pages 22-27

Strategic report Governance Financial statements

Strategic report

Page Title

20222013

£300m

140%

0%£0

Net cash from operating

activities before

non-underlying items

Underlying EBITDA

Cash conversion

Keller 5% General

contractors 0.7%

-2%

2022

Dividend CAGR

1994

Diverse market sectors (2022):

Diverse products (2022):

Diverse range of contract values (2022):

Diverse number of contracts

by value (2022):

100

North America Europe AMEA

Deep Foundations Specialty grouting

Earth Retention

Marine

Instrumentation

and monitoring

Post-tensioning

Ground improvement

Industrial services

Infrastructure/public buildings

Power/industrial

Residential

Office/commercial

Below £250k

Above £5m

£1m to £5m

£250k to £1m

Diverse geographies (2022):

Investment case

Firm foundations

• Operating globally in a number of sectors

gives us the resilience to trade through

national cyclicality

• Good access to all markets with no

overweight exposure

• Geopolitically secure

Specialist project profile

• Geotechnical solutions: niche sub-

sector with operating margins of c5%

(10-year average)

• Typically geotechnical contracting is

around 0.5% of the construction market

Inherently strong cash flow characteristics

• 10-year cash conversion rate of 92%

• 10-year aggregate underlying EBITDA

of £1,720m

• 10-year aggregate cash from operations

before non-underlying items of £1,590m

Resilient

revenues

Sustainable

margins

Cash

generative

Robust asset backed balance sheet

with significant funding headroom

Balance sheet strength

• Strong working capital controls aligned

to performance targets

• Historically strong cash conversion

Comparison to general contractor

• Advances/prepayments received

from customers considerably

lower than a general contractor

• High volume short duration contracts

• Minimal inventory

Client risk management

• Large and geographically/industry

diverse client base

• Thorough credit review process

and strong customer relationships

• Credit insurance cover

Credit rating

• NAIC 2c rating (equivalent to

Investment Grade)

Quality lender base and strong liquidity

• £375m multicurrency RCF facility

• $115m bilateral term loan facility

• $75m US Private Placement

• £61m other borrowing facilities

Underlying operating margin

Keller has a higher margin versus

general contractors (10-year average)

Keller versus general contractor –

business model

Keller ground

engineering

• Early stage

• Lower cyclicality

• Specialist design

capability

• A mix of contracts

• Higher margin

• Resource base

• Positive working

capital

General

construction

• Longer, larger

projects

• National focus

• Higher cyclicality

• Integration of

multiple suppliers

and subcontractors

• Low asset base

• Low to negative

working capital

Market Size – room to grow

£38bn

Global geotechnical

contracting market

£3bn

Keller today

Proprietary equipment

and specialist skills

• World’s largest equipment fleet with

flexibility to move between markets to

match local demand

• 1,700 engineers; over 200 focused

purely on design

• 30% of projects are ‘design and build’

where value engineering can reduce

cost by up to 40% and save time

• Manufacturing and servicing of our own

equipment where there is competitive

advantage to do so

28 years of uninterrupted

dividend payments since listing

Dividend per share (p)

04 Keller Group plc Annual Report and Accounts 2022

Strategic report

Investment case

20222012

1.2

Sustainable future

• Construction sector relevant

post-COVID

• Growing urbanisation

• Growing infrastructure spend

• Increased focus on ESG

• Urbanisation and renewal demand

more sophisticated solutions

– Population growth and ageing

infrastructure

– Larger, taller structures requiring

technically demanding foundations

– Cramped inner-city construction

requiring innovative and sustainable

techniques

– Geotechnical solutions key

to development potential of

brownfield sites

Favourable

market

trends

Focused

strategy

Strong

governance

We operate in nearly all major

metropolitan areas around the world

and have the resources and skills to

deliver to this scale and complexity

To be the preferred international geotechnical

specialist contractor focused on sustainable

markets and attractive projects, generating

long-term value for our stakeholders

Our local businesses will leverage the Group’s

scale and expertise to deliver engineered

solutions and operational excellence, driving

market share leadership in our selected

segments

Strong Board and experienced

management

Diverse and experienced teams in place

for next phase of growth

Board

• See pages 80, 81 and 92 for

Board experience

• Four nationalities

• 43% female representation

Executive Committee

• See pages 82 and 83 for Executive

Committee experience

• Five nationalities

• 22% female representation

Industry leading health

and safety performance

Balanced portfolio

We select sustainable markets (geography,

sector and products) in which to set up base

businesses, and attractive projects

Engineered solutions

We offer the best solutions to our customers

by providing alternatives and value engineering,

and invest in innovation and digitisation

Operational excellence

We are the operational leader providing safe,

efficient, on-time and high quality delivery and

relentlessly strive to improve our operational

capability

Expertise and scale

We develop our people, processes and

assets and leverage the global strength of

our technical, operational, commercial and

financial resources

Our objectives

Accident frequency rate

ESG and sustainability –

our definition and focus

For more information see page 67

For more information see pages 52 to 76 for our

ESG and sustainability report

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Chairman’s statement

Our dividend history

is exceptional.

Despite the challenging external events in recent

and earlier years we have consistently increased or

maintained the dividend over the last 28 years since

first listing on the London Stock Exchange, one of only

a few UK listed companies to have achieved this.”

Peter Hill CBE

Chairman

As we recover from the economic impact of

the pandemic and manage inflation, supply

chain constraints and ever changing geopolitics,

our role has never been more relevant in our

markets to build foundations for a sustainable

future. Despite the macroeconomic challenges,

we reported a strong financial and operational

performance. The Group delivered a record

c£3bn in revenue, up 24%, and strong growth

in underlying operating profit, up 12%, both on

a constant currency basis. The good operating

performance was the main driver of earnings

growth, with earnings per share (EPS) up by 20%,

all compared with 2021. Statutory operating

profit, comprising of underlying operating profit

and non-underlying items, decreased by 11%,

largely reflecting the increase in one-off non-

underlying operating costs.

Our clear purpose and strategy have guided

our decision-making in the year and remains

consistent, to be the preferred international

geotechnical specialist contractor focused on

sustainable markets and attractive projects,

generating long-term value for our stakeholders.

We have made good progress, refining the

portfolio in several areas as well as making two

bolt-on acquisitions.

In early 2023, we were immensely disappointed

to announce a financial reporting fraud at one of

our business units in Australia. It was an isolated

case with no impact on cash but nonetheless

a reminder for the Board and management to

continue to be vigilant in our supervision and

stewardship roles, continually evaluating and

improving all that we do across the Group.

Despite this, the Group still delivered strong

results and continues to move forward in 2023.

The order book is robust, as well as high-

quality. NEOM in Saudi Arabia is an exciting

opportunity for the Group. We started the first

Works Order in December and we completed

the piling work February 2023, ahead of

schedule. We are now in advanced discussions

on sizeable packages in relation to this project.

06 Keller Group plc Annual Report and Accounts 2022

Strategic report

Chairman’s statement

ESG

Not only am I the Director responsible for ESG

but I am profoundly dedicated to the topic and I

have a strong desire to make a positive change.

Tackling climate change is a key priority. We are

committed to reducing the carbon intensity

of our work and increasing the quality and

granularity of our carbon reporting and we have

made good progress in this area. It is heartening

to be able to report good progress against

the targets we set out in 2021, to be net zero

by2050.

Keller recognises and embraces the broadest

definition of diversity. Gender equality

and empowerment is a UN Sustainability

Development Goal we have committed

to progressing. In 2022 we focused on

strengthening local accountability to embed the

right ambitions, behaviours and practices in the

company, whilst ensuring that our employees’

views are considered in all that we do.

People are our business so keeping our

colleagues safe and well is paramount. We

want every person who works for us, or with

us, to go home safely at the end of each day.

Disappointingly, the metric by which we measure

our safety performance, accident frequency

rate (AFR), increased in the year with an uptick

particularly in hand and finger injures. The data is

being scrutinised and a remedial plan has been

put in place.

We also look beyond safety, working towards

everyone being better off and healthier having

worked for Keller. This drives our thinking and the

commitment to quality of life and sustainable

livelihoods across the company.

Board composition and succession

Our Board Diversity Policy has been in place

since January 2021. We have made great strides

in achieving a diverse Board, particularly in

respect of female representation which stands

at 43% (2021: 57%). We have met or exceeded

the diversity targets we set ourselves in the

Board’s Diversity Policy and as recommended by

the FTSE Women Leaders and Parker Reviews,

which set targets of a 33% female share of

Board Directors by 2020 and a minimum of

one Board Director from an ethnic minority

background by 2022.

Juan G. Hernández Abrams joined the Board

as an independent Non-executive Director

on 1 February 2022 and became a member of

the Audit and Risk, Environment, Nomination

and Governance, Remuneration, and Social

and Community Committees. Juan succeeded

Nancy Tuor Moore as Environment Committee

Chair on 18 May 2022. His biography is set out

on page 81.

On behalf of the Board, I would like to thank

Nancy for her contribution since joining the

Board as Non-executive Director in 2014 and

her valuable input on various committees - the

Audit and Risk, Nomination and Governance,

Remuneration and Workforce Engagement

and Chair of the Health, Safety, Environment

and Quality Committee. The Board and the

wider Group have benefitted greatly from her

extensive knowledge and experience, particularly

of the US engineering and construction sector,

and we all wish her well in her future ventures.

2022 dividend increase

Section 172 statement

and Code compliance

The Directors have acted to promote the

success of the company for the benefit

of shareholders, whilst having regard to

the matters listed in section 172 of the

Companies Act 2006 during 2022.

In addition, the Board and the company

fully applied the principles and complied

with the provisions of the UK Corporate

Governance Code.

For more information see pages 86 and 78

The Framework Agreement we signed in

2022 paves the way for multiple contract

awards. While we are in the early stages of

this project, it is evolving into a significant and

material opportunity for the future. As a Group

we continue to capture emerging opportunities

and to invest in the future.

The sector continues to move forward and

transform. We are continually adapting and

being responsive to our customers needs and

frequently pre-empting them with new products

to drive efficiencies, implementing sustainable

solutions required for a net zero future and

recruiting the diverse workforce we need to

make us a more inclusive business.

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Chairman’s statement continued

The sector continues to move forward and transform.

We are continually adapting and being responsive to

our customers needs and frequently pre-empting them

with new products to drive efficiencies, implement

sustainable solutions required for a net zero future and

recruit the diverse workforce we need to make us a more

inclusive business.”

Growing the dividend

Keller has an unbroken record of dividends,

having consistently and materially grown its

dividend in the 28 years since listing which clearly

demonstrates the Group’s ability to continue to

prosper through economic downturns, including

both the global financial crisis and the pandemic.

The Board is committed to paying dividends

through the cycle and, despite the increase in

net debt driven by growth in the year, the Board

is recommending an increased dividend for 2022

in keeping with its confidence in the future. The

Board has recommended a 5% increase in the

final dividend which follows the 5% increase in

the interim dividend and marks the resumption

of the Group’s progressive dividend policy. The

final dividend of 24.5p (2021: 23.3p) will be paid

on 23 June 2023 to shareholders on the register

as at the close of business on 2 June 2023.

This will bring the 2022 total dividend payable

to37.7p (2021: 35.9p).

Looking ahead

During 2022 the management team have

successfully developed and implemented the

Group’s strategy, rationalising and restructuring

Keller’s geographic and service activities to

create a more focused, resilient and higher

quality portfolio of businesses. I remain confident

that Keller’s strategy will generate long-term

value for shareholders. Whilst trading conditions

are improving and momentum is increasing,

evidenced by our strong order book, undoubtedly

there will be challenges through 2023 as the

world continues to weather the effects of the

economic aftershocks following the pandemic.

Nonetheless, the Group is well placed to continue

to execute on the strategy and will pursue

both organic and M&A growth opportunities,

maintaining our disciplined assessment of

potential acquisitions as well as look to further

refine the portfolio and exit non-core businesses

where appropriate.

The past two years have undoubtedly been a

very challenging time for many, including but

not limited to the global pandemic and the war

in Ukraine. Our people have again proved their

resilience whilst showing their dedication and

commitment to our projects and customers.

The strong set of results for 2022 could not have

been achieved without the efforts of the 10,000

people who make Keller the great company it

is. During the year, I had the privilege to meet

many colleagues in different locations and saw

first-hand the hard work and commitment that

prevails across the Group. I want to thank all our

people, on behalf of the Board, for everything

they have done and continue to do for Keller.

Peter Hill CBE

Chairman

Approved by the Board of Directors

and authorised for issue on 10 March 2023.

08 Keller Group plc Annual Report and Accounts 2022

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Page Title

Keller’s carbon reduction guide has

formed the basis for the European

Federation of Foundation Contractors’

(EFFC) first sustainability guide focused

oncarbon reduction.

While there is widespread consensus that the

construction industry needs to play its part in reducing

carbon emissions, putting that into practice is more of

a challenge.

Luke Deamer, Keller’s Group Sustainability Manager and

Vice-Chair of both the EFFC and the UK Federation of

Piling Specialists’ sustainability work groups, produced

a carbon reduction guide for Keller. He then built on

this guidance with the EFFC, creating a guide that

was applicable to the wider geotechnical sector. This

EFFC guide also set out why cutting carbon matters

and how members can make improvements with best

practiceguidance.

The EFFC guide explores different ways that companies

can cut carbon, whether that’s reducing material use,

decarbonising transport and equipment or making

changes on site. It includes both quick wins for

companies just starting their decarbonisation journey,

as well as ways to improve in a business with more

mature carbon reduction initiatives.

Find the guide at: www.effc.org/effc-carbon-

reduction-guide

Helping the industry

reduce emissions

Case study

We all have a part to play in

creating a low carbon future for the

geotechnical sector. This is a real

opportunity for all of us to develop.”

Venu Raju

Group Engineering and Operations Director

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Keller

Bauer (contracting)

Soletanche/Bachy/Menard

Trevi (contracting)

General contractor owned

Country/regional specific, small players

Share of addressable market £23bn¹

Our market

Our purpose

is to build the

foundations for a

sustainable future.

While we are the world’s largest geotechnical specialist

contractor, we still have potential to grow our market

share in our chosen regions. Our business units are

designed to understand their local markets whilst

leveraging the Group’s scale and expertise. This

combination delivers the engineered solutions and

operational excellence that drive market leadership.

A strong position but plenty of room to grow

38bn

1. Global geotechnical

contracting market

4. Keller today

3. Core markets where we

choose to operate

2. Addressable markets

£23bn

£18bn

£3bn

Non-addressable markets are mainly China,

North and South Korea, Japan and Russia.

1 USD = 0.81 GBP

Global construction market £9,600bn 2022.

1 Sources: Keller accounts, IHS Global Insight, GlobalData and other local sources.

Favourable market trends

The long-term trends in the global

construction market remain positive.

Our Group strategy is designed to

capitalise on these trends.

Infrastructure renewal

As populations grow and infrastructure ages, there’s

an imperative to invest in new and greater capacity.

Geotechnical solutions are often complex and

sophisticated and large-scale and cramped metropolitan

environments can present additional technical challenges.

We have the resources and skills to deliver to this scale and

complexity, a reputation for delivery and the proven ability

to team up successfully with our customers and partners.

Demand for complete solutions

Geotechnical solutions increasingly require multiple

products. Our broad product portfolio ensures we can

design an effective and efficient solution while our project

management capabilities mean we can integrate other

subcontractors and deliver ‘turnkey’ contracts. This

reduces the number of interfaces for our customers to

manage and reduces risk.

Technical complexity

The construction market is becoming more digital and

sites are increasing in sophistication and complexity.

We have a strong history of innovation.

We leverage our in-house equipment manufacturing

capacities and develop market-leading data acquisition

systems to control and record our processes, and share

information with our customers and the rest of the supply

chain. We can integrate instrumentation and monitoring

solutions and are Building Information Modelling

(BIM)capable.

Urbanisation

As cities expand they require more sophisticated solutions.

Larger, taller structures need more technically demanding

foundations to withstand the building loads and provide

resilience against climate change and acts of nature

such as rising water levels or earthquakes. We have a

comprehensive network of regional offices located in

major metropolitan areas. This local presence keeps us

close to our customers and the opportunities.

Development land shortage

There is a desire to convert more brownfield and marginal

land. Geotechnical solutions are at the fore in releasing

the development potential of otherwise sterile or derelict

areas. Our world-leading geotechnical engineering team,

broad portfolio and near shore marine capability, mean we

can cope with the most complex challenges when working

on brownfield or marginal sites.

10 Keller Group plc Annual Report and Accounts 2022

Strategic report

Our market

Our sectors

Share of our 2022 revenue

Infrastructure/public buildings 30%

Residential 20%

Power/industrial 26%

Office/commercial 24%

Market potential

Fragmented competition

We have three types of competitor. Type

one is the global geotechnical contractor,

of which there are three, but not all are

present in all markets. Type two is general

contracting-owned. Type three is local

competition with low overheads operating

in a small region.

Niche sub-sector

Geotechnical specialist contracting is

an important but niche sub-sector that

commands higher margins than general

construction. Typically geotechnical

contracting is around 0.5% of the

construction market.

Variety of projects and sectors

Our projects are spread across all

construction sectors and vary in scale,

location, end use and geotechnical technique.

Project value is typically between £25k and

£10m, usually short duration and with an

average value of £500,000.

Diverse global market

Operating globally in differing countries

and across the construction sectors, from

residential to infrastructure, gives us the

resilience to trade through national cyclicality.

The geotechnical market is estimated

be around £38bn worldwide, which includes

China, Japan, Korea and other regions of

the world where we are not present. In the

countries where we choose to operate our

core markets are around £18bn. We choose

to operate in sustainable markets that

appreciate the value of the products and

services Keller provides, have a consistent

material demand for those services, and

an acceptable level of risk. With an annual

turnover close to £3bn, we have a 16% share

of those core markets today, and plenty of

opportunity to secure greater market share.

Diverse customerbase

We have a large client spread which means

we’re not overly reliant on a few customers.

We have many repeat customers and,

consistent with the prior year, in 2022

our largest customer represented 5% of

the Group’s revenue. We mostly serve

as a subcontractor working for a general

contractor; however, sometimes we

also contract directly with ultimate client

organisations.

projects per year

addressable markets Keller’s underlying operating

margin (2021: 4.0%)

revenue from largest customermarket share in core markets

6,000

£23bn 3.7%

5%16%

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Our business model

We are at the beginning of the

construction cycle and often one

of the first contractors on site.

How we create and capture value

What differentiates us?

What we do

Global strength and local focus

Our people

Our track record of successful projects is only possible because

of the passion, commitment and enthusiasm of the c10,000

people who work for Keller worldwide. With extensive product

knowledge and a deep understanding of their local markets,

customers and ground conditions, our teams are empowered

to make decisions ‘close to the ground’. This is a significant

motivator which enables us to attract and retain some of the

industry’s best talent. Once people choose to join us, they

generally choose to stay, many for their entire career.

Our customers

Our network of branches ensures that we build strong, local

relationships with our customers that give us insight into market

developments and help us stay responsive and competitive. We

aim to engage from the earliest stage of a project so we can apply

our engineering expertise to drive for high-value solutions that

reduce the cost for clients, whilst improving our own profitability.

Our technology

We have a market-leading portfolio of products and services

backed with full Computer Aided Design (CAD) and Building

Information Modelling (BIM) capability. We have a fleet

comprising more than 1,200 rigs and cranes and the flexibility

to move equipment between markets to match local demand.

We also manufacture and service our own specialist equipment

which provides us with a competitive advantage in particular

product streams.

Our market focus

Targeting profitable markets that value geotechnical solutions

generates long-term value for our stakeholders.

Our financial strength

Our strong balance sheet and cash generation allow us to maintain

key resources through the market cycle, reinvest for growth and

maintain shareholder distributions.

Project Lifecycle Management

Global strength

• Our global knowledge

base allows us to tap into

a wealth of experience,

and the brightest minds

in the industry, to find the

optimum solution, often

combining multiple products.

This improves results for

customers and profitability

for Keller.

Local focus

• Our unrivalled branch network

and knowledge of local

markets and ground conditions

means we’re ideally placed to

understand and respond to

a particular local engineering

challenge.

Opportunity

identification

• Our local businesses

close to their markets

and with enduring

customer relationships

identifydemand.

• A global network supports

cross-border collaboration

on opportunities (especially

important for major projects).

Proposal

preparation

• Design engineers and cost

estimators with local ground

knowledge and capacity create

optimum solutions.

• A significant portion of work is

won based on design and build

tenders.

• Supported by a global network

who assist with solution

development.

Our key resources andrelationships

What we need to make our business model work

12 Keller Group plc Annual Report and Accounts 2022

Strategic report

Our business model

543

Employees

• Commitment to provide a

safe workplace and promote

mental health and wellbeing.

• A diverse, inclusive environment in

which employees can thrive regardless of

background, identity and circumstances.

• Stable employment with opportunities to

develop and progress, including internationally.

Getting the project ‘out of the ground’ is critical to our customers in controlling the early phases of the

project, managing risks, saving time and money, and providing a sound platform for the remaining work.

We often assist in the design and development phase with our customers, providing value engineering

input and advising on construction processes.

Our products and services are not used just for foundations, they are also used for other applications

including earth retention, urban redevelopment and near shore marine structures.

The best solutions

• Through knowledge transfer,

development of existing and

acquisition of new techniques,

innovation and digitisation,

our engineers have access to

the widest range of solutions

to solve challenges across the

entire construction sector.

• 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.

Safety and sustainability

• Our experience of project contracting

built over many decades, combined with

our Group scale, make us a trusted and

reliable partner.

• We have a proven track record of one of

the lowest accident frequency rates in

our industry.

• We are committed to better understand

our contribution to sustainable

development and work collaboratively

with our customers and stakeholders to

reduce potential impacts.

Shareholders

• Stable business with a

robust balance sheet.

• Inherently strong cash

flow characteristics.

• A quality lender base and substantial facilities.

• A 28-year history of uninterrupted dividends.

• Continued growth opportunities.

Communities

• Local employment

opportunities, directly

and indirectly.

• A focus on the United Nations

Sustainable Development Goals

where we can have the greatest impact.

• A commitment to reducing the carbon intensity of

our work and increasing the quality and granularity

of our carbon reporting.

• Participation in many community and charitable

events locally.

Customers

• A ‘one-stop shop’ for

cost-effective geotechnical

solutions reducing the

interface risk for clients of

dealing with multiple suppliers.

• In-depth knowledge of local markets and ground

conditions combined with a wealth of experience

through our global knowledge base.

• Leading health, safety and environmental

performance.

employed globally

c10k

contracts

6,000

total proposed

full-year dividend

£27.3m

CDP score – above

sector average

Our Project Lifecycle Management (PLM) Standard ensures that we implement

adequate procedures, reviews and controls at all phases of the project lifecycle.

Project

execution

• Product-specific

operations teams,

often using specialist

equipment, deliver

efficiently and

effectively (to quality

and schedule) and

respond to any issues

that arise.

Feedback

and learning

• Project leadership

secures client sign-

off and payment.

• Lessons learnt

are retained and

transferred to the

rest of the Group.

Contract

agreement

• Commercial teams

trained in relevant local

laws set up contracts.

The value created

Long-term sustainable value

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In 2022 Keller made some notable

achievements and delivered strong

growth in revenue and underlying

profits as well as maintaining a

robust order book of £1.4bn.

The execution of our strategy has structurally

put the Group in a strong position, and we will

continue to pursue both organic and targeted

M&A growth opportunities to build high

performance local businesses with market

leading positions.”

Michael Speakman

Chief Executive Officer

Chief Executive Officer’s review

Overview

The Group delivered a strong performance

in 2022 in a turbulent and challenging market

environment. Whilst markets generally began to

recover in volume terms, the residual pandemic-

related labour and supply chain shortages were

compounded by more localised effects of the

war in Ukraine, resulting in increased supply

chain issues and stronger inflationary pressures

than the global economy has seen for some

time. Against this uneven macroeconomic

backdrop, construction demand has reacted

variably across geographies and sectors and

almost all our businesses faced the challenge

of serving increased market demand with a

decreasing and more expensive supply base.

Whilst the execution of our strategy has

structurally put the Group in a strong position, it

is a credit to our businesses and management

teams that together Keller generated a record

revenue for the Group, close to £3bn, as well as a

strong growth in the underlying operating profit.

In January 2023, we announced our internal

systems had identified a financial reporting fraud

discrete to Austral, a business unit in Australia.

An external forensic investigation has now

confirmed that there has been no cash leakage.

This was an isolated and contained incident.

The impact of the financial reporting fraud on

the Group’s historical operating profits was

c£7.3m in the first half of 2022, £4.3m in 2021

and £6.7m in the years prior to 2021. We will

take the lessons learned from this incident and

embed any identified improvements into our

management and financial control processes.

Nonetheless, overall the Group progressed well

in 2022 and finished the year with a robust year-

end order book of £1.4bn (2021: £1.3bn), which

excludes expected upcoming sizeable packages

in relation to the large NEOM project.

Keller has an unbroken record of dividends,

having consistently and materially grown its

dividend in the 28 years since listing which clearly

demonstrates the Group’s ability to continue to

prosper through economic downturns, including

both the global financial crisis and the pandemic.

The Board is committed to paying dividends

through the cycle, and despite the increase in

net debt driven by growth in the year, the Board

is recommending an increased dividend for 2022

in keeping with its confidence in the future.

14 Keller Group plc Annual Report and Accounts 2022

Strategic report

Chief Executive Officer’s review

Financial performance

Group revenue was £2,944.6m, up 24% on

the prior year on a constant currency basis,

with increased trading activity across all our

markets. We delivered an underlying operating

profit of £108.6m, an increase of 12% on

a constant currency basis. Whilst in North

America Foundations some project execution

issues continued throughout the year, the

supply chain and inflationary pressures that

were all a feature of the first half of the year

were largely addressed in the second half and

the recovery in margin is on track. Europe grew

notably year-on-year whilst maintaining its

operating margin. In Asia-Pacific, Middle East

and Africa (AMEA), despite the Austral setback,

the division advanced well in terms of volume

and profit. The Group margin for the year was

3.7% (2021: 4.0%), down on prior year, albeit,

as anticipated, the North America margin

improved in the second half and we expect

further progress in 2023.

Our cash flow generation was suppressed by the

growth in working capital as a result of the record

revenue, reflecting the increased activity and

the pressures of supply chain payment terms.

As a result, net debt (IAS 17 lender covenant)

increased by £99.4m to £218.8m, equating to

a net debt/EBITDA leverage ratio of 1.2x, well

within our leverage target of 0.5x–1.5x and our

covenant limit of 3.0x.

Operational performance

In North America, revenue increased by 29%

(on a constant currency basis) driven by

improved trading volume across all businesses,

largely driven by Suncoast (before a slowdown

in the fourth quarter in residential demand)

and with a material contribution from the

accelerated LNG contract at RECON. Despite

contract losses in the foundations business,

supply chain issues, inflationary pressures

and a non-repeat claim resolution in the prior

year, underlying operating profit increased

marginally, up 1%, on a constant currency

basis with these issues more than offset

by the benefit from the increased volume

across the division. Importantly, the operating

margin improved by 150 basis points to 5.0%

in the second half compared to the first half,

demonstrating the continuing improvement in

the business.

In Europe, revenue increased by 19% on a

constant currency basis, with growth in all

business units despite the macroeconomic

backdrop and the impact of the Ukraine war.

Underlying operating profit increased by 20% on

a constant currency basis, reflecting the growth

in trading activity and the ability to pass on the

majority of inflationary cost pressures partially

offset by challenges in North-East Europe.

Notwithstanding the issue in Austral, the AMEA

Division performed strongly. Revenue increased

by 9% on a constant currency basis, driven

by a recovery in trading in Keller Australia, the

Middle East and Africa, and continued strength

in India. NEOM in Saudi Arabia is rapidly gaining

momentum and is ramping up in terms of

activity. We started the initial works order in

December and the piling works have completed

ahead of schedule in February 2023. We are in

advanced discussions on sizeable packages

in relation to this project and the quantum of

further work will require investment in 2023.

Underlying operating profit in the AMEA Division

increased to £6.6m from a restated £0.9m loss

in the prior year, despite the losses in Austral,

driven by the recovery in trading in Keller

Australia and the UAE as well as the impact

of the asset impairment reversal related to

equipment previously deployed in Mozambique

that will be brought back into use elsewhere

in the Group which improved year-on-year

operating profit by £6.1m. The result was

partly offset by challenges on marine projects

in Austral that are nearing completion. In light

of the reporting fraud at Austral, a goodwill

impairment of £7.7m has been taken in the non-

underlying items reflecting the current more

cautious view taken of its future profitability.

Strategy

Our strategy remains to be the preferred

international geotechnical specialist contractor

focused on sustainable markets and attractive

projects, generating long-term value for

our stakeholders. Our local businesses

leverage the Group’s scale and expertise to

deliver engineered solutions and operational

excellence, driving market share leadership in

our selected segments.

Our strategic business model provides the

Group with diversity in revenue streams in terms

of sectors, applications and geographies and

helps to provide revenue resilience and lessen

the impact of business cycles and geopolitical

uncertainly. This in turn ensures that both the

consistency of profit generation and the quality

of cash conversion are also robust over time, as

evidenced by the dividend history of the Group.

We are focused on strengthening and simplifying

our asset portfolio and building local market

share leadership, in line with our strategy.

During the year we made two small bolt-on

acquisitions that strengthen our existing market

positions. As part of our continuing strategic

review of our asset portfolio, we took the

decision to exit two of our peripheral geographies

earlier in the year in the Europe Division.

Whilst there are an increasing number of quality

acquisition opportunities emerging, the Group

will retain its disciplined approach to M&A and will

only pursue targets which will generate attractive

financial returns and shareholder value.

In terms of organic growth opportunities,

the residual impact of the pandemic and the

war in Ukraine has materially influenced the

opportunities that are currently emerging. The

high natural gas price and fluctuating oil price

have emphasised the need for governments to

diversify energy supply and develop independent

supply chains. The short-term focus on energy

security is driving investment in traditional

hydrocarbon industries and infrastructure, whilst

the growing global political will to decarbonise

economies is driving long-term power

generation construction away from carbon-

based energy production projects. Both drivers

provide attractive opportunities for the Group.

Infrastructure renewal remains a major driver of

growth, reflecting the efforts by governments

and public institutions to accelerate

investment to stimulate activity, especially in

an economically constrained time. Investment

is being made in battery manufacture, green

energy is expanding, and in some markets these

are replacing logistics, warehousing and data

centres as the higher growth segments.

Whilst we take pride in the quality of our

project management and project execution,

we recognise that we can always improve and

we are engaged in a process of re-energising

our project execution and other continuous

improvement initiatives. The latest part of

this programme is ‘Project Performance

Management’ which is the next incremental

improvement that captures the latest best

practice across the Group and will ensure that it

is accessible to all project managers throughout

the Group.

During the year we commenced the design of an

enterprise resource planning (ERP) system. This

initiative will embed operational excellence in all

foundations businesses across the whole Group

by introducing new ways of working, streamlining

processes and providing data to drive our

growth. Using an ERP system, processes

become more consistent and standardised,

thereby increasing opportunities for automation

and accuracy. The overall result is improved

efficiency, driving increased productivity and

the profitability of the Group. It will also help

address the likely evolution of the UK regulatory

landscape as it relates to financial reporting

and internal controls. The initiative will be

implemented over five years and we will leverage

our risk management processes to help control

the challenges associated with implementing

the programme of work.

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Chief Executive Officer’s review continued

In our effort to drive efficiencies and cost

savings, we are assessing opportunities for

back-office consolidation.

The NEOM project is ramping up and will

become a significant revenue generator for the

Group. The project is progressing in line with our

expectations operationally and financially; piling

on the c£40m initial Works Order was completed

in February 2023, ahead of schedule and we are

in advanced discussions on the next tranche

of work. The precise phasing of this potentially

material project is fluid and will require measured

investment in equipment and working capital

as it accelerates. We will continue to focus our

efforts on successfully delivering for the client

as the project gains further momentum.

Environmental, Social and

Governance (ESG)

We align our ESG and sustainability approach

with the UN Sustainable Development Goals

(SDGs) through a number of global and local

initiatives. Of the 17 SDGs, we specifically focus

on those that are most closely aligned to Keller’s

core business and where we can have the

greatest impact. In addition, there are a number

of local initiatives that are being supported

at local business level that are relevant and

appropriate to their community context.

We are progressing well against the carbon

reduction targets we set out last year to achieve

net zero by 2050. We will be net zero across all

three emission scopes by 2050; net zero on

Scope 2 by 2030, net zero on Scope 1 by 2040

and net zero by 2050 on Operational Scope 3

(covering business travel, material transport

and waste disposal). The short, medium and

long-term actions required to achieve these

goals are in progress and in some instances

we are ahead of target, particularly around our

Scope 2 carbon reduction. Scope 2 covers

indirect emissions from the electricity we use.

Progress on strategic priorities

in2022

In North America, we successfully integrated

RECON, a geotechnical and industrial services

company acquired in July 2021, into our North

America Division. The RECON project to

develop an energy facility in the Gulf Coast

region of the USA is c90% complete and has

been very successful to date. We continue to

explore further opportunities related to LNG in

the region. We have consolidated our Midwest

Business Unit into our North-East Business

Unit; they are commercially similar and this

will reduce the cost base. In May 2022, the

division completed the bolt-on acquisition of

GKM Consultants Inc., a small geo-structural

measurements and monitoring business based

in Quebec, Canada, for c£5m. GKM is integrating

into our Speciality Services business and will help

accelerate our growth in this specialist segment.

In Europe, in November 2022 the division

acquired Nordwest Fundamentering AS, a

specialist geotechnical contractor based in

Trondheim, in the west of Norway, for c£6m.

This builds our market share in the region. As

part of our continuing strategic review of our

asset portfolio, we took the decision to exit

our peripheral businesses in Denmark and the

IvoryCoast.

In Saudi Arabia, to meet the increasing needs of

the NEOM project we established an operations

base in the Tabuk province, in the north west

of the country. Equipment and people were

sourced and work started on the first works

order in December, worth c£40m, and the

pilingworks has now been completed.

Strategic priorities for 2023

Our diversified model of operating in a number

of sectors, applications and geographies

generates revenues that are resilient whilst

lessening the impacts that can arise from

business cycles and geopolitics. In line with our

strategy, we will continue to focus on increased

market penetration and cost reduction. We

remain customer focused through our branch

structure and continue to drive for a leading

share in our chosen markets.

We continue to review our diverse markets

to ensure that we focus only on sustainable

markets and attractive projects that generate

long-term returns.

Through our expertise and scale, we will

continue to share product knowledge.

Colleagues in the North America Foundations

business have teamed up with colleagues at

RECON at the ground improvement project for

the development of an industrial facility. The

contract involves early site preparation and soil

stabilisation. The North America Foundations

team introduced a new technique to their

RECON colleagues that was a faster solution,

saving the client time and money, and which

was also more environmentally friendly in

usinglesscement.

Growth through organic development and

a disciplined approach to M&A will remain a

priority in 2023, and we will maintain our diligent

assessment of potential acquisitions. At the

same time, as part of our continuing strategic

review of our asset portfolio, we will continue to

refine our existing portfolio, and exit non-core

businesses where appropriate.

16 Keller Group plc Annual Report and Accounts 2022

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Page Title

These emissions mostly occur as a result of

electricity use in our offices and maintenance

yards. Whilst it is by far the smallest scope of

carbon emissions for Keller, it is where we can

make the most immediate impact and therefore

where we aligned our Executive and BU

management remuneration for 2022. There are

many opportunities to save electricity and these

savings have already included energy efficiency

improvements to our equipment and lighting,

as well as generating our own renewable energy.

Whilst Europe and AMEA have significantly

reduced their emissions, North America’s Scope

2 emissions increased in 2022, driven mostly by

local weather events, as well as the acquisition

of RECON. For the Group as a whole, Scope 2

emissions reduced 28% from our 2019 baseline,

significantly ahead of our 10% target.

We continue to pay relentless attention to safety

and our people. Disappointingly, we saw the

key indicator for injury, the accident frequency

rate, increase to 0.1, representing 26 lost time

injuries, an increase of seven lost times injuries

on the prior year. There have been a number of

key initiatives in the year including a Group-wide

safety stand down day, which together with the

introduction of ‘mechanised handling steering

groups’ is targeted upon reducing hand injuries.

We have invested in cameras for all c300 of

our owned rigs in order to provide the rig driver

with reverse and blind spot visibility. With the

return to growth and an expanding workforce,

we have introduced a new induction process

for new employees. The completion of a safety

induction will appear on an employee’s ‘Safety

Passport’ within Insite, which is an increasingly

important tool in keeping our employees safe

and managing projects effectively and efficiently.

We have made progress against our Diversity,

Equity and Inclusion priorities. Our Inclusion

Commitments define the framework we use to

set priorities and ensure alignment and progress

across the Group and in 2022 we saw these

embed deeper into the organisation. This is

important as we strive to build a more diverse,

equitable and inclusive workplace.

In terms of partnerships, we work with

organisations to drive change and those that

align with our own focus on the UN Sustainable

Development Goals. To that end we have

continued our partnership with UNICEF UK and

have entered into a three-year partnership,

starting with a funding contribution of £250,000

in 2022 towards its Core Resources for Children.

Keller’s support with unrestricted funding allows

UNICEF to rapidly respond to emergencies

across the world, including the devastating

earthquakes that have affected children and

their families in Turkey and Syria.

People

Our people are the major differentiator of

our business and pivotal to everything we do.

As I travel around the Group I continue to be

immensely impressed by the skill, dedication

and tenacity of our team and, despite the

significant headwinds of the last year, the team

has continued to outperform our peers. I would

like to acknowledge this endeavour, and thank

all Keller employees for their commitment,

hard work and expertise during another very

challenging year.

We want our people to be inspired and

motivated, equipped with the right skills, tools

and standards to be successful. To that end, it

is important that as Directors we understand

and learn from the views of our employees. Our

culture and engagement programme provides

a structured way of getting and actioning

employee feedback, the aim being to continually

improve employee experience and drive better

business performance. Successfully piloted

in four businesses in 2021, it rolled out to a

further seven business units in 2022. Having

considered the current cost of living crisis that

we are experiencing, salary increases across the

Group have taken inflationary pressures into

account, and we have targeted higher increases

across those who are more junior and lower paid

amongst our employees.

Whilst we had no projects in Ukraine, we have

several employees based in the country and over

20 Ukrainian nationals working for us for many

years in our North East Europe Business Unit.

It was therefore incredibly sad that in February

2023 we lost a Ukrainian colleague who was

killed defending his country against the Russian

invasion. One year after the initial invasion,

the Ukrainian people continue to defend their

country and their independence. The impact

on all people is significant with destruction,

displacement, separation and loss of all daily

norms. Money raised through ‘Fundacia Keller’,

a charitable foundation set up by Keller Poland,

is given directly to our Ukrainian employees and

their families who have been affected by the

conflict so they can buy what they need most.

Outlook

In 2022 Keller made some notable achievements

and delivered strong growth in revenue and

underlying profits as well as maintaining a robust

order book of £1.4bn. We also faced, and dealt

with, a number of challenges and headwinds,

which held us back during the year. The Group

will continue to pursue organic and targeted

M&A growth opportunities and we will also look

to further refine the portfolio as we continue

to execute our strategy. Whilst higher interest

rates will increase our interest expense in 2023,

we have entered the new financial year with

increased momentum, a more solid operational

base and are well placed for major contract

awards. This, together with the actions we have

taken, gives us confidence that 2023 will be a year

of good progress.

Michael Speakman

Chief Executive Officer

Approved by the Board of Directors and

authorised for issue on 10 March 2023.

We have entered the new financial year with

increased momentum and a strong, high quality

order book which gives us confidence that 2023

will be another year of growth.”

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How we work,

shaped by our values

and behaviours

Our track record of successful

projects would not be

possible without the passion,

commitment and enthusiasm

of the c10,000 people who work

for Keller worldwide.

Why we exist

Building the foundations

for a sustainable future.

Our purpose

Our purpose, values, strategy and culture

Delivery of the Group’s vision and purpose relies on the successful

implementation of our strategy and is underpinned by the values

and behaviours that shape our culture and how we work.

average

engagement score

of employees

are proud to

work for Keller

of employees

would recommend

Keller as a great

place to work

of employees agree

‘Working at Keller

makes me want to do

the best work I can’

76%

83%

81%

82%

How we will deliver our purpose

and work towards our vision

Our strategy is to be the preferred

international geotechnical

specialist contractor focused on

sustainable markets and attractive

projects generating sustained

value for our stakeholders.

Our local businesses leverage the

Group’s scale and expertise to

deliver engineered solutions and

operational excellence, driving

market share leadership in our

selected segments.

Engineered

solutions

Our strategy

Our culture

1 Based on results from 11 business units.

We have an outstanding company spirit that

makes Keller a great place to work, and we

aim to ensure that everyone feels respected,

accepted, supported and valued.

Keller’s culture and engagement programme

provides a structured way of getting and

acting on employee feedback to continually

improve the employee experience and drive

better business performance.

The Board and the Social and Community

Committee play an active role in monitoring

the culture of the business by regularly

reviewing the results of employee

engagement surveys, as well as insights

from focus groups and site visits. Where

consistent themes emerge, actions are fed

into the appropriate strategies to further

strengthen our culture.

For more information see page 20

For more information see page 62

18 Keller Group plc Annual Report and Accounts 2022

Strategic report

Our purpose, values, strategy

and culture

Keller’s Code of Business Conductis

also rooted in our values. It explains

the behaviour we expect from all our

employees and provides them with a

clear framework within which to make

the right decisions.

Our ambition for the future

To be the leading provider of

specialist geotechnical solutions.

Our vision

A balanced

portfolio

Operational

excellence

Expertise

and scale

Our values

What we have judged as most important to how we work

with colleagues and customers across the globe

Integrity

We always behave

withintegritytowards our

customers, colleagues

and the communities

withinwhich we work.

Collaboration

Our teams collaborate across

borders and disciplines to bring

our customers the best of

Keller and to build a stronger

business for the future.

Excellence

In all we do we target

excellence; whether it’s

geotechnical engineering,

project management, safety

or people development,

we strive to deliver to the

highest standards.

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• 

Our strategy

Delivering our strategy.

Keller’s strategy is to be

the preferred international

geotechnical specialist

contractor focused on

sustainable markets and

attractive projects.

Our local businesses will leverage

the Group’s scale and expertise

to deliver engineered solutions

and operational excellence,

driving market share leadership

in our selected segments.

In 2022, we continued to make

progress in generating sustainable

long-term value for our

stakeholders.

Sustainable markets are those

markets that appreciate the value

of the products and services Keller

provides, have a consistent, material

demand for those services, and an

acceptable level of geopolitical risk.

Strategic lever

We select sustainable

markets (geography,

sector and products)

in which to set up

base businesses and

attractiveprojects.

We offer the best

solutions to our

customers by providing

alternatives and value

engineering, and invest

in innovation and

digitisation.

We are the operational

leader providing safe,

efficient, on-time and

high-quality delivery,

and relentlessly

strive to improve our

operationalcapability.

We develop our people,

processes and assets

and leverage the

global strength of our

technical, operational,

commercial and

financial resources.

A balanced

portfolio

Engineered

solutions

Operational

excellence

Expertise

and scale

20 Keller Group plc Annual Report and Accounts 2022

Strategic report

Our strategy

• 

2022

2021

16.0%

3.7%

14.9%

0.10

13.3%

4.0%

13.9%

0.07

1 Underlying measures allow management and investors

to compare performance without the potentially

distorting effects of one-off items or non-trading items.

Definitions of underlying measures can be found under

adjusted performance measures on page 203.

Outlook PerformanceWhat we achieved in 2022

• Integrated RECON in the US to Keller North America and

successfully delivered the major project to develop an energy

facility in the Gulf Coast region of the USA.

• Consolidated our Midwest Business Unit in North America into

our North-east Business Unit.

• Acquired GKM Consultants, an instrumentation and monitoring

business based in Canada.

• Acquired Nordwest Fundamentering, a geotechnical foundations

company based in Norway.

• Established an operations base in the Tabuk province, Saudi

Arabia, to meet needs at the NEOM project.

We will

• Remain customer focused

through our branch structure

and drive for a leading share

in our chosen markets.

• Continue to pursue both

organic and M&A growth

opportunities.

• Aim to be profitable through

trading cycles as we sustain

our revenue streams.

• Continue to introduce new

products where we are

already established.

• Introduced our new employee induction programme

for our field-based personnel.

• Improved performance in 5S in our yards. Achieved overall score

of 74% in North America, 85% in AMEA and 88% in Europe

(target: 60%).

• Further strengthened our Lean programme by hiring an industry

expert in North America. Over 1,500 people have been trained to

date in Lean.

• Retrofitted all our rigs with cabs with rear and blindside cameras.

• Commenced the design of an enterprise resource planning

(ERP) system’.

• Introduced ‘mechanized handling steering groups’ to reduce

hand injuries.

• Make continuous,

incremental improvements

to remain competitive in our

chosen markets.

• Deliver our Project

Performance Management

project to capture the latest

best practice from across

the Group.

• Deliver the pilot and first

stage of deployment of our

ERP system.

• Continue to share best

practice in operations,

technical knowledge,

governance andcompliance.

• Continue to pay relentless

attention to safety and

ourpeople.

• Continued sharing product and safety knowledge and

innovations through our global product teams.

• Implemented employee surveys and team action planning

in seven business units to continually improve employee

experience and drive better business performance.

• Launched R&D projects and initiatives to decarbonise our

business throughout Scope 1 to 3.

• Introduced a new diversity reporting framework (‘Building

Balanced Teams’) which enables us to track gender diversity at

every level of the organisation.

• Implemented a wellbeing training programme designed for

leaders which incorporates specific wellbeing challenges relevant

to our industry.

• Developed and began delivery of a plan to develop our financial

controls over financial reporting to be able to comply with a

future controls attestation regime for UK listed businesses.

• Executed an impressive 6,000 projects around the world.

• Achieved further significant milestones on HS2 in the UK.

• Delivered Cape Lambert major project.

• Strategic shift to manufacture of electric/hybrid drilling/vibro

rigs in our manufacturing subsidiary KGS and starting to procure

electric rigs from third parties.

• Continued implementation of our field app InSite.

• Continue to offer our

customers alternative

designs and engineered

solutions that meet their

specifications whilst

reducing costs.

• Retain our technical

advantage by investing in

our people and continuing to

influence across our sector.

• Continue to secure complex,

high-value projects.

Market share in core markets

Share of our core markets

Operating margins

Underlying operating profit expressed

as a percentage of revenue

Return on capital employed

Underlying operating profit as a

net return on capital employed

Accident frequency rate

Accident frequency per 100,000 hours;

lost time injuries are calculated as any

incident over one day

KPI

16%

3.7%

14.9%

0.10

+20%

-7%

+7%

-43%

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Strategic report

Page Title

1,896.1

82.0

4.3%

761.3

0.08

1323.1

73.0

5.5%

787.0

0.02

Revenue (£m)

2022

2021

Underlying operating profit (£m)

Underlying operating margin (%)

Order book (£m)

Accident frequency rate

KPIs

In North America, revenue was up by 29.3% (on

a constant currency basis) driven by improved

trading volume across all businesses, largely

driven by Suncoast (before a slowdown in the

fourth quarter in residential demand) and with a

material contribution from the accelerated LNG

contract at RECON. Despite contract losses in

the foundations business, supply chain issues,

inflationary pressures and a non-repeat claim

resolution in the prior year, underlying operating

profit increased marginally, up 1%, on a constant

currency basis, with these issues more than

offset by the benefit from the increased volume

across the division. In the foundations business

trading continued with a high level of activity.

As a direct result of management actions, the

challenges of project execution and productivity

impacted by supply chain disruption began

to reduce in the latter part of the year, and

started to benefit the North America operating

margin which improved from 3.5% in H1 to

5.0% in H2. Further year on year progress in

the margin is expected in 2023.The supply

chain issues impacted performance through

lower productivity due to delayed delivery and

put pressure on working capital as suppliers

tightened up credit terms on raw materials that

were in short supply. The accident frequency

rate, our key safety metric, increased from 0.02

in 2021 to 0.08 in 2022.

Suncoast, the Group’s post tension business,

experienced high volumes in the residential

sector despite some market headwinds, with

revenue and profit ahead of prior year, despite

a continued slowdown in the housing market

in the final quarter as interest rates rose. In the

high-rise sector, the business benefitted from

the unwind of the prior years’ adverse impact on

profit from its long-term customer contracts

and a reduction in the price of steel strand, its

major raw material.

Moretrench Industrial, our business which

operates in the highly regulated industrial

environmental and power segments, delivered

a solid performance. RECON, the geotechnical

and industrial services company we acquired

in July 2021, performed strongly and ahead of

expectations. RECON’s contract to provide the

foundations for an energy facility in the Gulf

of Mexico is nearing completion and we see

continuing further opportunities related to

LNG in the region.

North America

2022

£m

2021

£m

Constant

currency

Revenue 1,896.1 1,323.1 +29.3%

Underlying operating profit 82.0 73.0 +0.9%

Underlying operating margin 4.3% 5.5% -120bps

Order book

761.3 787.0 -13.0 %

1 Comparative order book stated at constant currency.

Business units

North-East

South-East

Florida

Central

West

Canada

Specialty Services

Moretrench and RECON

Suncoast

22 Keller Group plc Annual Report and Accounts 2022

Strategic report

North America

On 1 May 2022, the business completed the

bolt-on acquisition of GKM Consultants Inc,

a small geo-structural measurements and

monitoring business based in Quebec, Canada.

GKM will integrate into our Speciality Services

business and will help accelerate our growth in

this specialist segment.

The order book for North America at the period

end was at £761.3m, down 13.0% (on a constant

currency basis) from the closing position at

the end of 2021. The decrease year on year is

predominantly driven by the near completion of

the large LNG contract in the RECON business.

Excluding this contract, the order book is broadly

flat on a constant currency basis.

One of Keller’s largest revenue

drivers this year was a ground

improvement project for

development of a $13bn LNG

facility in the Gulf of Mexico, USA.

When it’s completed, the facility will produce

and export around 20 million metric tonnes

of LNG annually. RECON played a critical role

in the project, winning a sizeable contract

for early site preparation and stabilising 2.3

million cubic yards of soft soils, to prepare

forthe facility’s construction.

Despite a global cement shortage and

risingfuel prices during the project,

RECON’s strong relationship with suppliers

ensured fixed prices and limited supply

chain issues, helping this major project

finish ahead ofschedule.

“On a project like this, every day you can

shave off the schedule is worth several

hundreds of thousands of dollars to the

client, so we wanted to do everything we

could to reach the goal faster,” explains John

Carpenter, Managing Director of Moretrench,

the Keller company that RECON reports into.

Preparing the ground for

a $13bn development

Case study

This has been a hugely successful

project that demonstrates

Keller’s ability to live up to our

commitments. The introduction

of different products, additional

resources and prudent contracting

helped mitigate risks and ensure we

delivered fortheclient.”

John Carpenter

Managing Director, Moretrench

RECON, the geotechnical and

industrial services company

we acquired in July 2021,

performed strongly and

ahead of expectations.”

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Page Title

649.3

29.1

4.5

347.5

0.19

549.2

24.3

4.4

332.7

0.23

Revenue (£m)

2022

2021

Underlying operating profit (£m)

Underlying operating margin (%)

Order book (£m)

Accident frequency rate

Europe

Business units

Central Europe

North-East Europe

South-East Europe and Nordics

South-West Europe

KPIs

In Europe, revenue increased by 19.4% on a

constant currency basis, with growth reported

by all business units despite the challenging

macro environment. Underlying operating profit

increased by 20.2% on a constant currency basis,

reflecting the growth in revenue, partly offset by

challenges in North-East Europe. The businesses

were largely able to pass on the significant cost

inflation experienced during the first half of 2022,

benefiting revenue and helping to maintain the

operating margin. The accident frequency rate

reduced from 0.23 to 0.19 in the year.

The growth in revenue and operating profit

were achieved against the backdrop of the war

in Ukraine, and the resulting macro-economic

challenges in Europe. The significant escalation

in supplier costs and energy prices experienced

following the Russian invasion in February 2022

and subsequent delays obtaining materials

resulted in some non-productive time, particularly

in the first half. Material price inflation and supply

shortages receded to some extent in the second

half of the year. We were able to include price

adjustment measures into most of our contracts

and therefore were largely able to pass price

increases onto customers.

Our North-East Europe business was the most

affected by the war in Ukraine, both from a

financial and humanitarian perspective. Despite

these challenges, Poland, which benefitted

from the successful completion of a large oil

refinery project, delivered record revenue. Cost

inflation and resource scarceness were felt

most acutely in Poland and the surrounding

countries and, accordingly, contract margins

were adverselyimpacted.

Following a strong 2021 South-East Europe and

Nordics delivered another year of record revenue,

up by 20% year-on-year with the largest gains

reported in Austria, Italy, Norway, Slovakia and the

Czech Republic. The Nordic countries received

two substantial multi-year contract awards

during the year, Tangenvika, a bridge project in

Norway worth c£39m and Södertäliye, a lock

project in Sweden worth c£34m. Work will start

on both projects in 2023. In November 2022, the

business acquired Nordwest Fundamentering

AS, a specialist geotechnical contractor based in

Trondheim, in the west of Norway.

The UK business reported revenue growth

following increased levels of activity through the

core Foundations and Geotechnique businesses

and continued good delivery on the High Speed 2

(HS2) rail contract.

Our business in Central Europe increased revenue

and profit with good trading activity across

the region. Despite delays to contract starts

during the early part of the year in Germany the

businesses benefitted from strong activity levels

by year end, including expansion into Belgium,

where we registered a new branch.

South West Europe was our business most

affected by the impact of COVID-19 during 2021,

with extended country lockdowns and delays to

contract starts. However, in 2022 the business

delivered growth in both revenue and profit in

theperiod.

2022

£m

2021

£m

Constant

currency

Revenue 649.3 549.2 +19.4%

Underlying operating profit 29.1 24.3 +20.2%

Underlying operating margin 4.5% 4.4% +10bps

Order book

347.5 332.7 +1.5%

1 Comparative order book stated at constant currency.

24 Keller Group plc Annual Report and Accounts 2022

Strategic report

Europe

As part of our continuing strategic review of

our asset portfolio we took the decision to exit

our businesses in Denmark and Ivory Coast.

We continue to review our diverse European

markets to ensure that we focus only on

sustainable markets and attractive projects,

including those in the energy sectors, that

generate long-term returns.

During 2022 the European core business

responded well to the prevailing macro-

economic conditions. The robust year-end

order book provides good near term coverage

with some of the recent larger contract wins

extending beyond 2023. Nevertheless, the

threat of recession that hangs over a number

of the European markets will provide additional

challenges during the year and we will respond

appropriately. We expect to manage the risks

and maintain the recent levels of profit margin.

The Europe order book at the end of the period

was £347.5m, broadly flat on the prior year on a

constant currency basis.

Keller UK is on a mission to cut

carbon emissions, making great

progress in recent months by

slashing energy consumption,

introducing electric vehicles and

using the latest, most efficient rigs.

It might not be the most glamorous or

innovative solution, but a simple change at

Keller UK’s Ryton headquarters has helped

cut office and yard energy consumption by

almost a fifth since 2019. Replacing all lighting

in the office, workshop and yard with LEDs has

boosted the business unit in its strategy to

significantly reduce Scope 2 emissions over

the next few years.

“Sustainability is essential to the long-term

future of our organisation and the planet,” says

Will Reid, Keller UK’s Finance Director. “Cutting

our emissions is not only the right thing to do

morally, but it’s also demanded by stakeholders

such as investors and, increasingly, our clients.”

Alongside the lighting, Keller UK is offering

electric vehicles as part of its company car

scheme, installing double-glazed windows

to reduce heat loss, and has just renewed its

photocopier leases, reducing the number of

machines by a third. They are also starting

to increase engagement on the issue with

employees, encouraging everyone to make

simple contributions like turning off their

computer screens overnight.

An energy saving and opportunity survey in

2019 helped Keller identify less-obvious areas

for improvement, such as installing a heat-

recovery system in the paint shop. Ryton has

had solar panels for several years (generating

over £60,000 of savings in the last decade

from reduced electricity purchased and feed-in

tariffs) but these only produce around 5-7%

ofelectricity consumed.

The aim is to reduce energy use and

increase the number of solar panels in

the coming months so the office can be

more self-sustainable.

In the meantime, Ryton has switched to a

certified green energy tariff, which means all

electricity comes from renewable sources.

Keller’s biggest source of Scope 1 emissions is

its rigs. “We’ve used the opportunities on HS2

as a springboard to invest in and modernise

our fleet, so the vast majority of machines

are now using the latest technology to

reduceemissions.

“Working with our partners on HS2, we have

trialled using hydrogenated vegetable oil fuels

for our existing diesel equipment. We’re keen

to keep pushing in this area, adopting lessons

learnt with our other projects and working

closely with our supply chain to trial new

technologies as they are developed.”

Keller UK focuses on cutting carbon

Case study

We compensate and substitute

where it’s quick and easy to do so,

but the ultimate goal is to reduce

and eliminate emissions as much

as possible.”

Will Reid

Finance Director, Keller UK

During 2022 the European core

business responded well to the

prevailing macro-economic

challenges. The robust year-

end order book provides good

near term coverage with some

of the recent larger contract

wins extending beyond 2023.”

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Strategic report

Page Title

399.2

6.6

1.7

298.4

0.02

350.2

(0.9)

(0.3)

182.4

Revenue (£m)

2022

2021

Underlying operating profit (£m)

Underlying operating margin (%)

Order book (£m)

Accident frequency rate

AMEA

Business units

ASEAN

Austral

India

Keller Australia

Middle East and Africa

KPIs

In AMEA, revenues increased by 9.0% on a

constant currency basis, driven by a recovery

in trading in Keller Australia, in Middle East and

Africa (MEA) and in India. Underlying operating

profit increased to £6.6m driven by the recovery

in trading and an asset impairment reversal

related to equipment in Mozambique, that has

been repatriated, partly offset by challenges

on marine projects in Austral which will be

completed during 2023, and mobilisation at

NEOM. The accident frequency rate increased

to 0.02, with the division reporting two injuries

compared to zero in the prior period.

On 9 January 2023, Keller announced that

it had identified a financial reporting fraud

discrete to its Austral Business Unit in Australia.

The financial reporting fraud related to the

overstatement of Austral’s performance

from 2019 onwards by two senior individuals

in the finance function. An external forensic

investigation has confirmed there was no cash

leakage and the impact of the financial reporting

fraud on the Group’s historical operating profits

was c£7.3m in the first half of 2022, £4.3m in

2021 and £6.7m in the years prior to 2021. The

strengthening of project reviews at Austral has

been implemented and will improve financial

control and management reporting. Following

the investigation, we have relocated one of

the Group’s experienced Managing Directors

into the business while we review and

develop a longer-term succession plan.

In light of the reporting fraud at Austral, a

goodwill impairment of £7.7m has been taken

reflecting the current more cautious view taken

of its future profitability.

Excluding Austral, the AMEA Division performed

well. Keller Australia rebounded strongly from

a loss in the prior year due to COVID-19. The

recovery of trading activity reported in the first

half further strengthened in the second half and

was accompanied by a high level of tendering

activity. The ASEAN business continues to

experience market softness with low levels of

activity though it is expected that trading will

improve in 2023 with several sizeable projects in

the pipeline. The Indian business continued to

perform strongly, growing revenue and profit in

the period. Our MEA business delivered strong

growth in revenue, and recovered in terms of

profitability following a loss in the prior year. In

Mozambique, whilst the LNG project remained

suspended in the period, underlying profit

improved year-on-year by £6.1m from the

impact of an asset impairment reversal related

to equipment previously deployed in the country

and will be brought back into use elsewhere in

theGroup.

In Saudi Arabia, our longstanding presence

has enabled us to undertake work on the

prestigious NEOM Giga project in the Tabuk

Province in the North West of the country.

2022

£m

2021

£m

Constant

currency

Revenue 399.2 350.2 +9.0%

Underlying operating profit 6.6 (0.9) N/A

Underlying operating margin 1.7% N/A N/A

Order book2 298.4 182.4 +55.8%

1 Restated for prior period accounting error arising from the financial reporting fraud at Austral.

2 Comparative order book stated at constant currency.

26 Keller Group plc Annual Report and Accounts 2022

Strategic report

Asia-Pacific, Middle East

and Africa (AMEA)

The first major element of the NEOM project

is The Line, a 170 kilometre long mega city,

starting in the west at the Gulf of Aqaba,

continuing through the Sharma Valley

and terminating at the NEOM International

Airport within the upper valley region. Following

the signing of the overall Framework Agreement,

we received the first Works Order worth c£40m

and started piling in December. We completed

the piling work in February 2023, ahead of

schedule, and we are in advanced discussions on

sizeable packages. The majority of mobilisation

costs were taken in 2022. The Framework

Agreement paves the way for multiple contract

awards. While we are in the early stages of

this project, it is evolving into a significant

andmaterial opportunity for thefuture.

The AMEA order book strengthened strongly

and at the end of the period was at £298.4m,

up 55.8% (on a constant currency basis) on the

prior year. The increase is predominantly driven

by the strengthening opportunities in Australia,

India, the UAE and Saudi Arabia.

Keller is among a small, select

number of geotechnical

contractors working on NEOM.

This development in Saudi Arabia

includes THE LINE, a smart

city, Oxagon, an industrial port

complex and Trojena, a year-round

mountain destination.

‘THE LINE’ megacity will be unlike anything else

in the world: 170km long, 500m high, 200m

wide and home to nine million people. It will

have no roads or cars and will run on 100%

renewable energy. Keller is one of just seven

specialist contractors chosen to carry out the

piling works.

In the south-west of NEOM, Oxagon, a floating

industrial complex, is being constructed. The

fully automated port and supply chain network

will also be a hub for clean industry and next-

generation manufacturing.

Other NEOM project opportunities include

Trojena – NEOM’s year-round mountain

destination, and the Arabian peninsula’s first

major outdoor ski resort, being built in Saudi

Arabia’s highest mountain range. NEOM is also

developing a number of islands in the Red Sea

that will be a key tourist destination.

Overall, NEOM will be a vast programme of

works potentially worth hundreds of millions

of dollars to Keller for years to come. In

order to handle the sheer scale of work,

a dedicated business unit is being set up

within our AMEA Division to coordinate and

manageopportunities.

Building the city of the future

Case study

NEOM is a development unlike

anything else on the planet and

requires the very best in their fields

working together on technically

challenging projects. Keller is

delighted to be bringing our global

expertise to such an exciting

programme of works.”

Danny Treen

Operations Director – Major Projects, AMEA

The Framework Agreement

signed at NEOM paves the way

for multiple contract awards.

While we are in the early stages

of this project, it is evolving

into a significant and material

opportunity for the future.”

Strategic report Governance Financial statements

Strategic report

Page Title

Chief Financial Officer’s review

2022

£m

2021

£m

Revenue 2,944.6 2,222.5

Underlying operating profit

108.6 88.5

Underlying operating profit %

3.7% 4.0%

Non-underlying items in

operating profit (40.8) (12.1)

Statutory operating profit 67.8 76.4

Statutory operating profit % 2.3% 3.4%

1 Restated for prior period accounting error arising from the financial reporting

fraud at Austral and prior period measurement adjustments as detailed in

notes 3 and 6 to the consolidated financial statements.

2 Details of non-underlying items are set out in note 9 to the consolidated

financial statements. Reconciliations to statutory numbers are set out in the

adjusted performance measures section on page 203.

We have a consistently diversified

spread of revenues across geographies,

product lines, market segments and

end customers.”

David Burke

Chief Financial Officer

Revenue of £2,944.6m

was up 24%, at constant

currency, driven by increased

trading volumes across

all three divisions.

Austral financial reporting fraud

On 9 January 2023, the Group announced that it had identified a

financial reporting fraud in the Austral business based in Australia

which resulted in an overstatement of revenue and profit in 2021

and prior years. A forensic investigation of the fraud incident has

now completed. This confirmed the fraud was financial reporting

in nature and there was no cash leakage from the business. We

will take the lessons learned from this incident and embed any

identified improvements into our management and financial

control processes.

Due to the overstatement of revenue and profits, there is now

sufficient uncertainty over the future profitability of the Austral

business such that we have recognised a goodwill impairment of

£7.7m in respect of the total balance of goodwill associated with

this cash generating unit.

Prior year restatement

The impact of the fraud on the prior periods was material, and

we have therefore restated the comparative results for 2021

presented in the Annual Report to show the corrected amounts.

The retained earnings at 31 December 2021 have been reduced

by £15.4m, comprising an opening reserves reduction of £8.7m

and a reduction in profit after tax in 2021 of £6.7m.

Revenue for 2021 has been reduced by £1.9m to £2,222.5m,

underlying operating profit has been reduced by £4.3m to £88.5m

and underlying diluted earnings per share has been reduced by

4.2p to 84.2p.

The statutory operating profit has been reduced by £4.3m to

£76.4m and the statutory diluted earnings per share has been

reduced by 8.9p to 77.2p. The impact on statutory earnings

includes the restatement of the non-underlying deferred tax

credit recognised last year in respect of Australia tax losses.

In addition to the prior year restatement for Austral, the 2021

income statement and balance sheet have been restated for

the prior year measurement period adjustments in respect

of acquisitions in 2021 as required by IFRS 3, ‘Business

combinations’. The fair value of net assets acquired has been

finalised resulting in adjustments to the value of goodwill,

intangible assets, trade receivables and deferred tax liabilities

as at 31 December 2021.

The detail of these adjustments is set out in note 3 to the

consolidated financial statements.

28 Keller Group plc Annual Report and Accounts 2022

Strategic report

Chief Financial Officer’s review

Revenue and underlying operating profit split by geography

Year ended

Revenue £m Underlying operating profit

£m Underlying operating profit margin

2022 2021

Division

North America 1,896.1 1,323.1 82.0 73.0 4.3% 5.5%

Europe 649.3 549.2 29.1 24.3 4.5% 4.4%

AMEA 399.2 350.2 6.6 (0.9) 1.7% –

Central – – (9.1) (7.9) – –

Group 2,944.6 2,222.5 108.6 88.5 3.7% 4.0%

1 Restated for prior period accounting error arising from the financial reporting fraud at Austral as detailed in note 3 to the consolidated financial statements.

2 Details of non-underlying items are set out in note 9 to the consolidated financial statements. Reconciliations to statutory numbers are set out in the adjusted performance measures section on

page 203.

Revenue

Revenue of £2,944.6m (2021

: £2,222.5m) was

up 32%, and up 24% at constant currency, driven

by increased trading volumes across all three

divisions. In North America, organic growth from

RECON, acquired in July 2021, combined with

increased volume across all businesses delivered

a revenue increase of 29%. In Europe, revenue

increased by 19%, and with growth across all

business units despite the macro economic

backdrop and the impact of the Ukraine war. In

AMEA, a recovery in volumes in Keller Australia

and Middle East and Africa, combined with

continuing strength in India, led to a revenue

increase of 9%.

We have a consistently diversified spread

of revenues across geographies, product

lines, market segments and end customers.

Customers are generally market specific and,

consistent with the prior year, the largest

customer represented less than 6% of the

Group’s revenue. The top 10 customers

represent 17% of the Group’s revenue (2021:

15%). The Group worked on more than 6,000

projects in the year with 54% of contracts

having a value between £25,000 and £250,000,

demonstrating a low customer concentration

and a wide project portfolio.

Underlying operating profit

The underlying operating profit of £108.6m was

23% up on prior year (2021

: £88.5m), which on a

constant currency basis was 12% up despite the

significant operational challenges at Australthat

had been masked by the financial reporting fraud.

In North America, despite contract losses in

the foundations business, supply chain issues,

inflationary pressures and a non-repeat claim

resolution in the prior year, underlying operating

profit increased marginally, up 1% on a constant

currency basis, with these issues more than

offset by the benefit from the increased volume

at Suncoast and RECON. In Europe, operating

profit was 20% up on a constant currency basis

reflecting the growth in trading activity and the

ability to largely pass on inflationary pressures.

In AMEA, operating profit grew to £6.6m from

a restated £0.9m loss in the prior year, despite

the poor performance at Austral. Keller Australia

contributed to the profit growth and the division

benefitted from an asset impairment reversal

related to equipment previously in Mozambique

that will be brought back into use elsewhere

in the Group. The result was partly offset by

challenges on marine projects in Austral which

will be completed during 2023. Central costs

have increased by £1.2m from £7.9m to £9.1m.

Share of post-tax results from

jointventures

The Group recognised an underlying post-tax

profit of £1.5m in the year (2021: £0.4m) from its

share of the post-tax results from joint ventures.

The share of the post-tax amortisation charge

of £1.2m (2021: £0.6m) arising from the

acquisition of NordPile by our joint venture KFS

Oy in 2021 is included as a non-underlying item.

No dividends (2021: nil) were received from joint

ventures in the year.

Statutory operating profit

Statutory operating profit comprising underlying

operating profit of £108.6m (2021

: £88.5m)

and non-underlying items comprising net costs

of £40.8m (2021

: £12.1m), decreased by 11%

to £67.8m (2021

: £76.4m). The reduction in

statutory operating profit is a reflection of the

increase in non-underlying operating costs in

2022 to £40.8m. This includes non-cash costs

of £24.0m comprising goodwill impairments

and amortisation of acquired intangible assets,

including the Austral goodwill impairment cost

of £7.7m and increased amortisation of acquired

intangible assets of £8.9m on the RECON

intangibles. Cash non-underlying costs of

£16.8m includes the new ERP implementation

costs of £6.3m and exceptional restructuring

costs of £5.3m. The non-underlying costs are

set out in further detail below.

Net finance costs

Net underlying finance costs increased by

69.7% to £15.1m (2021: £8.9m). The increase

has been driven by the increase in underlying

interest rates and an increase in the average

net debt levels through the year. The average

net borrowings, excluding IFRS 16 lease

liabilities, during the year were £252.1m

(2021:£147.6m).

Taxation

The Group’s underlying effective tax rate

decreased to 22% (2021

: 24%), largely due

to the change in the profit mix of where the

Group is subject to tax. Cash tax paid in the

year of £5.9m (2021: £15.9m) was a decrease

of £10.0m over the prior year and was mainly

attributable to a delay in paying the estimated

US tax charge for 2022. The Group was

awaiting a possible US law change on the timing

of deductions for research and development

expenditure which has not materialised. As

such, the Group will pay its estimated US tax

charge of £17m in April 2023. Further details on

tax are set out in note 12 of the consolidated

financial statements.

Underlying operating profit has increased by

12%, at constant currency, with improving

performance across all three divisions despite

significant operational challenges.”

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Chief Financial Officer’s review continued

Non-underlying items in

operating profit

The Group has commenced a strategic project

to implement a new cloud computing enterprise

resource planning (ERP) system across the

Group. As this is a complex implementation,

project costs are expected to be incurred over

the next five years. Non-underlying ERP costs

of £6.3m include only costs relating directly

to the implementation, including external

consultancy costs and the cost of the dedicated

implementation team. Non-underlying costs

does not include operational post-deployment

costs such as licence costs for businesses that

have transitioned.

The goodwill impairment of £12.5m relates

mainly to Austral (£7.7m) due to uncertainty over

the future profitability of the business, following

the discovery of the financial reporting fraud and

Sweden (£4.5m); due to a downward revision to

the medium-term forecast, forward projections

did not fully support the carrying value of the

goodwill.

Exceptional restructuring costs of £5.3m

comprises £3.4m in the North American

Division, £1.8m in the Europe Division, a credit

of £0.6m in AMEA and £0.7m incurred centrally.

In North America, the costs arose as a result

of a management and property reorganisation

within the parts of the business located in Texas.

Costs include redundancy costs and property

duplication costs. In Europe, the costs related to

the scheduled exit of Ivory Coast and Morocco

businesses, including asset impairments and

redundancy costs. In AMEA, the credit arose

from restructuring costs provided for in prior

years as costs incurred were lower than originally

anticipated.

The £3.5m exceptional historic contract charge

relates to a provision made for additional legal

costs relating to the historical Avonmouth

contract dispute following a negotiation with

insurers during 2022. In addition, a £2.5m

provision for a legal claim in respect of a closed

business has been recognised.

An impairment charge of £0.3m by the North-

East Europe Business Unit is in respect of trade

receivables in Ukraine that are not expected to

be recovered due to the ongoing conflict.

Additional contingent consideration of £0.1m

relates to the acquisition of the Geo Instruments

US business in 2017.

A credit of £0.7m arose from the reduction

in the fair value of contingent consideration

payable in respect of the RECON and GKM

acquisitions. The contingent consideration paid

in respect of RECON has been finalised and was

settled during the year.

Acquisition costs of £0.2m in the year comprised

professional fees relating to the NWF acquisition

in Norway.

Non-underlying finance costs

During the year the Group entered into an

interest rate derivative with the purpose of

hedging a highly probable forecast transaction.

The forecast transaction did not take place and

as a result the amount arising from the hedging

instrument has been recognised in the income

statement. This has resulted in the recognition

of £3.6m of finance income which has been

included in non-underlying as it is material in size

and is not reflective of the underlying finance

income and costs of the Group.

Non-underlying taxation

A non-underlying tax credit of £9.0m (2021

£7.0m) includes the £4.7m (2021

: £1.3m)

tax impact of the non-underlying loss. The

remaining £4.3m (2021

: £5.7m) arises from the

re-recognition of deferred tax assets in Canada,

as the de-recognition of the deferred tax asset

was booked through the non-underlying tax

charge in prior years, the credit from the re-

recognition of the deferred tax asset has also

been treated as a non-underlying item.

Non-underlying items

The items below have been excluded from the underlying results and further details of non-underlying items are included in note 9 to the financial

statements. The total pre-tax non-underlying items in the year increased to £37.2m (2021

: £12.1m), due to the start of the ERP implementation project,

exceptional historic contract dispute costs and the amortisation of intangible assets acquired with RECON in 2021.

2022

£m

2021

£m

ERP implementation costs 6.3 –

Goodwill impairment 12.5 –

Exceptional restructuring costs 5.3 7.3

Exceptional historic contract dispute 3.5 –

Claims related to closed business 2.5 –

Impairment costs 0.3 –

Contingent consideration: additional amounts provided 0.1 1.3

Change in fair value of contingent consideration (0.7) –

Acquisition costs 0.2 0.5

Loss on disposal of operations – 0.5

Amortisation of acquired intangible assets 10.3 2.6

Amortisation of joint venture acquired intangibles 1.2 0.6

Contingent consideration received (0.7) (0.7)

Total non-underlying items in operating profit 40.8 12.1

Non-underlying items in finance income (3.6) –

Total non-underlying items before taxation 37.2 12.1

Non-underlying taxation (9.0) (7.0)

Total non-underlying items 28.2 5.1

1 Restated for prior period accounting error resulting from the financial reporting fraud at Austral and prior year measurement adjustments in respect of business combinations as detailed in notes 3 and

6 to the consolidated financial statements.

30 Keller Group plc Annual Report and Accounts 2022

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Earnings per share

Underlying diluted earnings per share increased

by 20% to 100.7p (2021

: 84.2p) driven by

higher operating profit and the effective tax

rate reduction partially offset by the increase

in finance costs. Statutory diluted earnings per

share was 62.4p (2021

: 77.2p) which includes

the impact of the non-underlying items.

Dividend

Keller has an unbroken record of dividends,

having consistently and materially grown its

dividend in the 28 years since listing which clearly

demonstrates the Group’s ability to continue to

prosper through economic downturns, including

both the global financial crisis and the pandemic.

The Board is committed to paying dividends

through the cycle, and despite the increase in

debt, driven by growth in the year, the Board is

recommending an increased dividend for 2022

in keeping with its confidence in the future. The

Board has recommended a 5% increase in the

final dividend which follows the 5% increase in

the interim dividend and marks the resumption

of the Group’s progressive dividend policy.

The final dividend of 24.5p (2021: 23.3p) will

be paid on 23 June 2023 to shareholders on

the register as at the close of business on 2

June 2023. This brings the 2022 total dividend

payable to 37.7p (2021: 35.9p). The 2022

dividend earnings cover, before non-underlying

items, was 2.7x (2021: 2.3x).

Keller Group plc has distributable reserves of

£122.1m at 31 December 2022 (2021: £122.9m)

that are available to support the dividend policy,

which comfortably covers the proposed full-year

dividend for 2022 of £17.7m. Keller Group plc is

a non-trading investment company that derives

its profits from dividends paid by subsidiary

companies. The dividend policy is therefore

impacted by the performance of the Group

which is subject to the Group’s principal risks and

uncertainties as well as the level of headroom on

the Group’s borrowing facilities and future cash

commitments and investment plans.

Free cash flow

The Group’s free cash flow was an outflow of

£33.8m (2021

: inflow of £62.5m) as a result of

the increased working capital demands of the

Group in the year. The basis of deriving free cash

flow is set out below.

Free cash flow

2022

£m

2021

£m

Underlying operating profit 108.6 88.5

Depreciation, amortisation and impairment 97.0 97.4

Underlying EBITDA 205.6 185.9

Non-cash items (1.1) –

Dividends from joint ventures – –

(Increase)/decrease in working capital (110.5) 1.2

(Decrease)/increase in provisions and retirement benefit liabilities (13.4) (7.8)

Net capital expenditure (73.5) (72.2)

Additions to right-of-use assets (24.8) (23.4)

Free cash flow before interest and tax (17.7) 83.7

Free cash flow before interest and tax to underlying operating profit (16%) 95%

Net interest paid (10.2) (5.3)

Cash tax paid (5.9) (15.9)

Free cash flow (33.8) 62.5

Dividends paid to shareholders (26.4) (25.9)

Purchase of own shares (1.2) (3.7)

Acquisitions (22.4) (31.8)

Business disposals 0.7 7.1

Non-underlying items (6.2) (3.9)

Fair value movement in net debt 2.6 –

Right-of-use assets/lease liability modifications (1.6) (4.0)

Foreign exchange movements (17. 3) (1.1)

Movement in net debt (105.6) (0.8)

Opening statutory net debt (193.3) (192.5)

Closing statutory net debt (298.9) (193.3)

1 Restated for prior period accounting error resulting from the financial reporting fraud at Austral, prior year measurement adjustments in respect of business combinations and the reclassification of

proceeds from the sale of assets held for sale as detailed in note 3 to the consolidated financial statements.

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Chief Financial Officer’s review continued

Free cash flow

Working capital

Net working capital increased by £110.5m

(2021

: decrease of £1.2m), the net movement

comprises £44.2m increase in inventories and a

£110.0m increase in trade and other receivables,

offset by an increase in trade and other

payables of £43.7m. The increase in inventory

mainly arose at Suncoast as we bought steel

strand upfront given the volatility in the market

following the Ukraine war, the subsequent

slowdown in the residential market resulted in

levels being higher at year end. Organic revenue

growth of 22% has driven a significant increase

in the trade and other receivables, which has

been only partly matched by the increase in

trade and other payables. We have seen the

impact of the supply side disruption on the

payment terms demanded by some suppliers,

particularly in the US.

A reduction in provisions and retirement benefit

liabilities increased the cash outflow in respect

of working capital by £13.4m (2021: £7.8m).

This mainly comprises payments in respect

of amounts previously provided for contracts

or legal claims. The outflow excludes the cash

outflow on restructuring provisions which is

presented within non-underlying items in the

free cash flow calculation.

Capital expenditure

The Group manages capital expenditure tightly

whilst investing in the upgrade and replacement

of equipment where appropriate. Net capital

expenditure, excluding leased assets, of

£73.5m (2021

: £72.2m) was net of proceeds

from the sale of equipment of £8.2m (2021

£12.2m). The asset replacement ratio, which is

calculated by dividing gross capital expenditure,

excluding sales proceeds on disposal of items of

property, plant and equipment and those assets

capitalised under IFRS 16, by the depreciation

charge on owned property, plant and equipment

was 115% (2021: 127%).

Acquisitions

On 1 May 2022, the Group acquired

GKM Consultants Inc. for an initial cash

consideration of £3.4m, including a £0.1m

working capital adjustment, and conditional

consideration with an initial fair value of £1.2m

of contingent consideration. The business is an

instrumentation and monitoring provider based

in Quebec, Canada and is included in the North

America Division.

On 15 November 2022, the Group acquired

Nordwest Fundamentering AS. for cash

consideration of £5.8m and deferred

consideration of £0.5m. Nordwest

Fundamentering is a small specialist

geotechnical contractor business based in

Norway and is included in the Europe Division.

As noted above, the accounting for the 2021

RECON and Subterranean acquisitions was

finalised during 2022, giving rise to prior period

measurement adjustments which are set out in

note 3 to the consolidated financial statements.

Deferred and contingent consideration in

respect of prior period acquisitions of £12.4m

was paid in the year.

Financing facilities and net debt

The Group’s total net debt of £298.9m (2021:

£193.3m) comprises loans and borrowings and

related derivatives of £319.0m (2021: £200.6m),

lease liabilities of £81.0m (2021: £75.4m) net of

cash and cash equivalents of £101.1m (2021:

£82.7m). The Group’s term debt and committed

facilities principally comprise a US$75m US

private placement repayable in December

2024 and a £375m multi-currency syndicated

revolving credit facility, which matures in

November 2025. In addition, in November 2022,

the Group increased committed borrowing

facilities by agreeing a US$115m bilateral term

loan facility, expiring in November 2024. At the

year end, the Group had undrawn committed

and uncommitted borrowing facilities totalling

£273.8m (2021: £291.9m).

The most significant covenants in respect of the

main borrowing facilities relate to the ratio of net

debt to underlying EBITDA, underlying EBITDA

interest cover and the Group’s net worth. The

covenants are required to be tested at the half

year and the year end. The Group operates

comfortably within all of its covenant limits. Net

debt to underlying EBITDA leverage, calculated

excluding the impact of IFRS 16, was 1.2x (2021:

0.8x), well within the covenant limit of 3.0x and

within the Group’s leverage target of between

0.5x-1.5x. Calculated on a statutory basis,

including the impact of IFRS 16, net debt to

EBITDA leverage was 1.5x at 31 December 2022

(2021: 1.0x). Underlying EBITDA, excluding the

impact of IFRS 16, to net finance charges was

15.7x (2021

: 29.5x), well above the limit of 4.0x.

On an IFRS 16 basis, year-end gearing, defined

as statutory net debt divided by net assets, was

60% (2021: 44%).

The average month end net debt during 2022,

excluding IFRS 16 lease liabilities, was £252.1m

(2021: £147.6m). The Group had no material

discounting or factoring in place during the year.

Given the relatively low value and short-term

nature of the majority of the Group’s projects,

the level of advance payments is typically not

significant , although we do look to negotiate

advance payments on larger projects such

asNEOM.

At 31 December 2022 the Group had drawn

upon uncommitted overdraft facilities of £6.9m

(2021: £0.9m) and had drawn £190.6m of bank

guarantee facilities (2021: £150.4m).

Retirement benefits

The Group has defined benefit pension

arrangements in the UK, Germany and Austria.

The Group’s UK defined benefit scheme is

closed to future benefit accrual. The most

recent actuarial valuation of the UK scheme was

as at 5 April 2020, which recorded the market

value of the scheme’s assets at £49.7m and the

scheme being 77% funded on an ongoing basis.

The level of contributions are £2.8m a year with

effect from 1 January 2022 and will increase by

3.6% per annum on 1 January going forward to

5 August 2024. Contributions will be reviewed

following the next triennial actuarial valuation

to be prepared as at 5 April 2023. The 2022

year-end IAS 19 valuation of the UK scheme

showed assets of £42.2m, liabilities of £39.0m

and a pre-tax surplus of £3.2m before an IFRIC

14 adjustment to reflect the minimum funding

requirement for the scheme, which adjusts the

closing position to a deficit of £4.1m.

In Germany and Austria, the defined benefit

arrangements only apply to certain employees

who joined the Group before 1997. The IAS

19 valuation of the defined benefit obligation

totalled £13.2m at 31 December 2022 (2021:

£15.9m). There are no segregated funds to

cover these defined benefit obligations and the

respective liabilities are included on the Group

balance sheet.

All other pension arrangements in the Group

are of a defined contribution nature.

The Group has a number of end of service

schemes in the Middle East as required by

local laws and regulations. The amount of

benefit payable depends on the current salary

of the employee and the number of years

of service. These retirement obligations are

funded on the Group’s balance sheet and

obligations are met as and when required

by the Group. The IAS 19 valuation of the

defined benefit obligation totalled £3.5m

at 31 December 2022 (2021:£3.0m).

32 Keller Group plc Annual Report and Accounts 2022

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Currencies

The Group is exposed to both translational

and, to a lesser extent, transactional foreign

currency gains and losses through movements

in foreign exchange rates as a result of its global

operations. The Group’s primary currency

exposures are US dollar, Canadian dollar, euro,

Singapore dollar and Australian dollar.

As the Group reports in sterling and conducts

the majority of its business in other currencies,

movements in exchange rates can result in

significant currency translation gains or losses.

This has an effect on the primary statements

and associated balance sheet metrics, such as

net debt and working capital.

A large proportion of the Group’s revenues

are matched with corresponding operating

costs in the same currency. The impacts of

transactional foreign exchange gains or losses

are consequently mitigated and are recognised

in the period in which they arise.

The following exchange rates applied during the

current and prior year:

2022 2021

Closing Average Closing Average

USD 1.21 1.24 1.35 1.38

CAD 1.63 1.61 1.71 1.72

EUR 1.12 1.17 1.19 1.16

SGD 1.62 1.70 1.82 1.85

AUD 1.76 1.78 1.86 1.83

Treasury policies

Currency risk

The Group faces currency risk principally on

its net assets, most of which are in currencies

other than sterling. The Group aims to reduce

the impact that retranslation of these net assets

might have on the consolidated balance sheet,

by matching the currency of its borrowings,

where possible, with the currency of its assets.

The majority of the Group’s borrowings are

held in sterling, US dollar, Canadian dollar, euro,

Australian dollar and Singapore dollar.

The Group manages its currency flows to

minimise transaction exchange risk. Forward

contracts and other derivative financial

instruments are used to hedge significant

individual transactions. The majority of such

currency flows within the Group relate to

repatriation of profits, intra-Group loan

repayments and any foreign currency cash

flows associated with acquisitions. The Group’s

treasury risk management is performed at the

Group’s head office.

The Group does not trade in financial

instruments, nor does it engage in speculative

derivative transactions.

Interest rate risk

Interest rate risk is managed by mixing fixed and

floating rate borrowings depending upon the

purpose and term of the financing.

Credit risk

The Group’s principal financial assets are

trade and other receivables, bank and cash

balances and a limited number of investments

and derivatives held to hedge certain Group

liabilities. These represent the Group’s

maximum exposure to credit risk in relation

tofinancialassets.

Underlying diluted earnings per share

increased by 20% to 100.7p driven by

higher operating profit and the effective

tax rate reduction partially offset by the

increase in finance costs.”

The Group has procedures to manage

counterparty risk and the assessment of

customer credit risk is embedded in the contract

tendering processes. The counterparty risk on

bank and cash balances is managed by limiting

the aggregate amount of exposure to any one

institution by reference to its credit rating and by

regular review of these ratings.

Return on capital employed

Return on capital employed is defined at Group

level as underlying operating profit divided by

the accounting value of equity attributable to

equity holders of the parent plus net debt plus

retirement benefit liabilities. Return on capital

employed in 2022 was 14.9% (2021

: 13.9%).

David Burke

Chief Financial Officer

Approved by the Board of Directors and

authorised for issue on 10 March 2023.

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Principal risks and uncertainties

Our business is subject to risks and uncertainties and as such we have a risk governance

framework (see below and page 35) to identify, evaluate, analyse and mitigate significant

risks, including climate-related risks and opportunities, to the achievement of our strategy.

We have processes that seek to identify risks from both a top-down strategic perspective

and a bottom-up local operating company perspective.

Strategic objectives | Risk appetite

Tone from the top

ExCom

Divisions

Business units

Operating entities – projects

Risk Assessment | Risk Reporting

Management of risks | Risk controls

The continued strengthening of our risk management framework

remained a key priority for 2022, as understanding current and

emerging risks is central to effective decision-making in Keller, aligned

to our four strategic levers and in line with the Group’s risk appetite.

Risks that the Group remain exposed to from day-to-day delivery

of projects and the longer-term pursuit of its strategic objectives

continue to be assessed, managed and monitored as depicted in the

process above. During the year we undertook several initiatives to

support this:

• Continued to strengthen our internal control environment, measured

against a comprehensive set of Group Finance Standards across

a number of disciplines including financial reporting, accounting,

operational management, taxation and treasury, reinforcing a culture of

strong governance and risk management. This has been independently

validated through the internal audit programme.

• Successfully developed a climate-related risks and opportunities

scenario analysis tool in line with the recommendations of TCFD.

Our Non-financial and sustainability information statement for 2022

is available on pages 44 to 51.

• Continued to improve the quality of data on risk reporting across the

Group, including climate-related risks and opportunities, through

regular robust and engaging management reviews of risk throughout

the organisation.

• We will continue to focus on deepening the understanding and

useofour risk management data consistently across the Group

through more face to face workshops and targeted training.

• We will further strengthen our Group risk management framework, via

the deployment of a new Governance, Risk and Compliance (GRC) tool,

while continuing to benchmark against current best practice to support

the organisation in effective decision-making, supporting delivery of

the Group strategy.

• We will provide training on the updated Group risk management

framework and the GRC tool to ensure a consistent methodology is

used when identifying, assessing, managing and reporting on risks.

• These changes will lead to continued improvement and consistency of

risk reporting and in turn support a timely and robust decision-making

process.

• There will be continued focus on both the ERP implementation and

the actions required to address the likely UK corporate governance

reforms.

• In light of the Austral reporting fraud, a controls response plan has

been developed to review and improve key internal controls.

Important developments in 2022 Key areas of focus for 2023

Keller Group plc Annual Report and Accounts 2022

Strategic report

Principal risks and uncertainties

Provision of assurance

on the key risks

mitigating controls

Execution of

risk-based audit plan

Internal

Audit (IA)

Our risk governance framework

Sets tone on risk

management culture

Approval of Group’s risk

appetite

Reviews the effectiveness of our

risk management and internal

controls systems

Monitors risk exposures

against risk appetite

Identification and management of risks, including climate-related risks

and opportunities, at a business unit level

Internal controls monitoring

Risk awareness and safety culture in day-to-day operations

Formal and transparent policies and procedures for risk management and internal controls

Determination of the nature and extent of the company’s principal and emerging risks,

including climate-related risks and opportunities

Development and execution of appropriate mitigating actions

Robust assessment of the Group’s

principal and emerging risks,

including climate-related risks and

opportunities

Recommendation of interim

and year end risk disclosures,

including climate-related risks

and opportunities and viability

statement

Approval of interim and year

end risk disclosures, including

climate-related risks and

opportunities and viability

statement

Identification, reporting and

ongoing management of risks,

including climate-related risks

and opportunities

Operational executive

responsibility for the risk

management approach

Implementation of internal controls

Supports the ARC in evaluating

the effectiveness of risk mitigation

strategies and internal controls

implemented by management

Management of outsourced

IA function

Regular review of divisional

risk registers

Divisions, business units and functions

Bottom-up

Oversight, identification,

assessment and

mitigation of risks

at operational and

business unit level

Top-down

Oversight, identification,

assessment and

mitigation of risks

at Group level

Board

Executive Committee

Audit and Risk

Committee (ARC)

Group Head of Risk

and Internal Audit

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Our risk appetite

The Group’s risk appetite drives high standards of

health, safety and environmental compliance, and

a focus on commercial risks and opportunities.

This approach is fully understood across the

organisation, allowing us to collectively build a

profitable and leading market share whilst limiting

the Group’s risk exposures to an acceptable level.

This level of risk is considered appropriate for

Keller to accept in achieving strategic objectives.

Risk identification and impact

The Group’s principal risks are analysed on an

inherent (pre-mitigation) and residual (post-

mitigation) basis.

Risk trends

The ongoing review of the Group’s principal risks

focuses on how these risks may evolve as well as

a consideration of emerging and climate-related

risks, which we identified and impact-assessed

over the short term (ie the next year), medium

term (ie two to five years) and long term (ie six

to thirty years). As such, horizon scanning and

reviewing emerging potential legislation forms

key elements of the risk review process. These

elements are embedded within the Group’s day-

to-day management of risk and its current risk

reporting processes.

The ARC and the Board reviewed the Group’s

principal risks and uncertainties at their meetings

in July and December 2022. Following a robust

discussion, the ARC concluded that supply chain

risk was now to be included as a principal risk in its

own right given its importance to the successful

execution of projects for the Group.

Other principal risks and uncertainties have not

changed materially since the publication of last

year’s annual report, however, given the current

macro-economic outlook, the Austral reporting

fraud and the potential award of new work orders

on the NEOM project (with the associated

increase in capital expenditure and working

capital), the following principal risks will be closely

monitored throughout 2023:

• supply chain;

• a rapid downturn in our markets;

• failure to procure new contracts on

satisfactory terms;

• ethical misconduct and non-compliance

with regulations, and

• inability to finance our business.

Principal risks and uncertainties continued

Developing the viability

statement

In developing the viability statement, it was

determined that a three-year period should

be used, consistent with the period of the

Group’s business planning processes and

reflecting a reasonable approximation of

the maximum time taken from procuring a

project to completion. Management reviewed

the principal risks and considered which

of these risks might threaten the Group’s

viability. It was determined that none of the

individual risks would in isolation compromise

the Group’s viability, and so a number of

different severe but plausible principal risk

combinations were considered. A downside

sensitivity analysis, as well as a consideration

of any mitigating actions available to the

Group, was applied to the Group’s three-year

cash flows forecasted as part of the business

planning process and presented to the Board

for discussion, further to review by the Audit

and Risk Committee. The Board discussed

the process undertaken by management,

and also reviewed the results of stress testing

performed to ensure that the sensitivity

analysis was sufficiently rigorous. The Board

also carried out a robust assessment of the

principal risks facing the Group, including

those that would threaten its business model,

future performance, solvency or liquidity.

Viability statement

In accordance with provision 31 of the UK

Corporate Governance Code, the Directors

have assessed the prospects of the Group

over a three-year period.

The Board selected the three-year period as:

• the Group’s business planning and

budget processes are carried out over

a three-year period which provides the

relevant estimates; and

• three years is a reasonable approximation

of the maximum time taken from

procuring a project to completion and

therefore reflects our current revenue

earning cycle.

The Group’s principal source of funding is

the £375m syndicated revolving credit facility

which is due to expire in November 2025.

The assessment assumes that the Group

will continue to have access to this funding

throughout the viability period on the basis

that the Group will either renew the facility or

have sufficient time to agree an alternative

source of finance on comparable terms.

The review included cash flows and other key

financial ratios over the three-year period.

These metrics were subject to sensitivity

analysis which involves flexing a number

of the main assumptions underlying the

forecast both individually and in collectively.

Downside sensitivity analysis was carried out

to evaluate the potential impact on the Group

of a global downturn in the construction/

geotechnical market. Revenues in 2024

and 2025 were assumed to decrease by

10% year on year with an operating margin

deterioration in proportion.

A number of other downside risks were also

modelled, including worsening working capital

performance, inability to finance the Group’s

business and unforeseen settlements. The

Directors’ assessment has been made with

reference to the Group’s current position and

prospects, the Group’s strategy, the Board’s

risk appetite and the Group’s principal risks

and how these are managed, as detailed in

the Strategicreport.

On the basis of the above and other matters

considered and reviewed by the Board

during the year, the Board has reasonable

expectations that the Group will be able to

continue in operation and meet its liabilities

as they fall due over the next three years.

In doing so, it is recognised that such

future assessments are subject to a level

of uncertainty that increases with time

and, therefore, future outcomes cannot be

guaranteed or predicted with certainty.

Going concern

The Group’s business activities, together

with the factors likely to affect its future

development, performance and position are

set out in the Strategic report. The financial

position of the Group, its cash flows and

liquidity position are described in the Chief

Financial Officer’s review, with details of the

Group’s treasury activities, long-term funding

arrangements and exposure to financial

risk included in note 26 to the consolidated

financial statements.

The Group has sufficient financial resources

which, together with internally generated

cash flows, will continue to provide sufficient

sources of liquidity to fund its current

operations, including its contractual and

commercial commitments and any proposed

dividends. The Group is therefore well

placed to manage its business risks. After

making enquiries, the Directors have formed

the judgement at the time of approving

the financial statements, that there is a

reasonable expectation that the Group has

adequate resources to continue in operational

existence for the period through to 31 March

2024. For this reason, they continue to adopt

the going concern basis of accounting in

preparing the financial statements.

Principal risks and uncertainties

The tables on pages 37 to 43 list 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 tables, however, is

not intended to be an exhaustive list of all the

risks and uncertainties that may arise.

Financial risks Strategic risks

Market risks Operational risks

36 Keller Group plc Annual Report and Accounts 2022

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Page Title

Financial risks

1. Inability to finance our business

Description and impact Causes Mitigation and internal controls Movement since 2021

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

preparing its financial

statements.

• Fail to meet financial covenant

tests, potentially leading to a

default event.

• Have a lack of available funds

restricts investment in

growth opportunities,

whether through acquisition

or innovation.

• Be unable to meet dividend

payment requirements.

• Failure to accurately

forecast material

exposures and/or

manage the financial

resources of the

Group.

• Centralised Treasury function that is responsible

for managing key financial risks, including liquidity

and credit capacity.

• Mixture of long-term committed debt with

varying maturity dates which comprise a £375m

revolving credit facility with a maturity extended

to November 2025 and a US private placement

debt of $75m maturing in 2024. New $115m term

loan in place, maturing in November 2024.

• The Group maintains significant undrawn

facilities within a high quality RCF bank syndicate,

which underpin the liquidity requirements of the

Group.

• Strong free cash flow profile - flexibility on capital

expenditure and 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.

Robust internal controls

within Finance and

Treasury, along with

trading in line with

expectations,

demonstrate clear ability

to manage existing and

anticipated risks.

Looking forward, we will

closely monitor this risk in

relation to winning new

work orders on the NEOM

project and subsequent

requirements for increased

capital expenditure and

working capital.

Link to strategy Link to viability Timeframe

Link to strategy Risk movement since 2021 and link to viability Timeframe

Balanced portfolio

Operational excellence

Engineered solutions

Expertise and scale

Increased risk

Reduced risk

Medium termConstant risk

Link to viability

Short term

Long term

Market risks

2. A rapid downturn in our markets

Description and impact Causes Mitigation and internal controls Movement since 2021

Inability to maintain a sustainable

level of financial performance

throughout the construction

industry market cycle, which

grows more than many other

industries during periods of

economic expansion and falls

more harder than many other

industries when the economy

contracts. Any significant,

sustained reduction in the level

of customer activity could

adversely affect the Group’s

strategy, reducing revenue and

profitability in the short and

medium term, and negatively

impact the longer-term viability

of the Group.

• Customers

postponing or

reducing investment

in ongoing and new

projects.

• Impact of increasing

inflation, especially

in steel, cement and

energy.

• Political instability

leading to disruption

in supply chains

impacting both

availability and price.

• The diverse markets in which the Group

operates, both in terms of geography and market

segment, provide protection to individual

geographic or segment slowdowns.

• Leveraging the global scale of the Group, talent

and resources can be redeployed to other parts

of the company during individual market

slowdowns.

• Having strong local businesses with in-depth

knowledge of the local markets enables early

detection and response to market trends.

• The diverse customer base, with no single

customer accounting for more than 6% of Group

revenue, reduces the potential impact of

individual customer failure caused by an

economic downturn.

The Group has a very

strong order book across

all divisions, with

significant opportunities

on the NEOM project in

Saudi Arabia. However,

due to increasing inflation

and interest rates, as well

as geopolitical uncertainty,

we are starting to see

some early signs of

customers delaying

project starts and

investment.

Link to strategy Link to viability Timeframe

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Page Title

3. Failure to procure new contracts while maintaining appropriate margins

Description and impact Causes Mitigation and internal controls Movement since 2021

Failure to negotiate satisfactory

and appropriate contractual

terms may resultin:

• Delays and disputes during

project delivery, negatively

impacting our relationships with

our customers and the Group’s

reputation for delivering quality

products and solutions.

• Adversely impacting Group

strategy leading to reduced

revenue and profitability and

negatively impacting the

Group’s ability to fund its

strategic objectives.

• Increased

competition

especially in tight or

contracting markets.

• Failure to fully

understand and/or

ability to meet

customer

requirements.

• Inadequate resources

in place (physical

assets and people).

• Failure to understand

and engage with the

customer on balanced

approach to allocation

or sharing of risk in the

contract.

• A focus on understanding customer

requirements and competitor capabilities.

• Structured bid review processes in operation

throughout the Group with well-defined

selection criteria that are designed to ensure

we take on contracts only where we

understand and can manage the risks

involved.

• The Project Lifecycle Management (PLM)

Standard has introduced more rigour into

how risks are considered during the

opportunity, contract approval and project

execution phases.

• Sales training – focus on contractual and

commercial terms.

• Continuous monitoring of market trends

and their potential impact.

• Continuous monitoring of order book wins

and losses.

While we continued to see

a strong order book during

2022, we are also seeing

increased competition on

contracts within our

markets with increased

pressure on bid pricing

from our customers that

along with inflationary

pressures could potentially

erode contract margins.

Principal risks and uncertainties continued

Strategic risks

4. Losing our market share

Description and impact Causes Mitigation and internal controls Movement since 2021

Inability to achieve sustainable

growth, whether through

acquisition, new products, new

geographies or industry-specific

solutions, may:

• Jeopardise our position as the

preferred international

geotechnical specialist

contractor.

• Lead to inefficiencies and

increased operating costs,

which in turn could impact our

ability to deliver balanced

profitable growth, which is a key

component of our strategy.

• 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.

• Increased competitor

activity especially in

tight or contracting

markets.

• Failure to adjust to

changing customer

demands or fully

understand and meet

their requirements.

• Inability to identify

changes in market

demands, including

changes to promote

sustainability.

• A clear business strategy with defined short,

medium and long-term objectives, which is

monitored at local, divisional and Group

level.

• Continued analysis of existing and target

markets to ensure opportunities that they

offer are understood.

• An opportunities pipeline covering all

sectors of the construction market.

• A wide-ranging local branch network which

facilitates customer relationships and helps

secure repeat work.

• Continually seeking to differentiate our

offering through service quality, value for

money and innovation.

• North American businesses reorganisation

delivering on cross-selling opportunities.

• 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.

Robust internal controls

within Finance and

Treasury, along with

trading in line with

expectations,

demonstrate clear ability

to manage existing and

anticipated risks.

Link to strategy

Link to viability

Timeframe

38 Keller Group plc Annual Report and Accounts 2022

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Page Title

5. Ethical misconduct and non-compliance with regulations

Description and impact Causes Mitigation and internal controls Movement since 2021

Keller operates in many different

jurisdictions and is subject to

various rules, regulations and

other legal requirements including

those related to anti-bribery

and anti-corruption. Failure to

comply with the Code of Business

Conduct or other regulations

could leave the Group exposed to:

• Instances of bribery and

corruption.

• Fraud and deception.

• Human rights abuses, such as

modern slavery, child labour

abuses and human trafficking.

• Unfair competition practices.

• Unethical treatment within our

supply chain.

These failures could result in legal

investigations, leading to fines and

penalties, reputational damage

and business losses.

Failure to comply with

the Code of Business

Conduct or related

policies and procedures

could stem from:

• Failure to establish

robust corporate

culture.

• Failure to adopt a

compliance risk

approach.

• Failure to embed the

Group’s values and

behaviours across the

entire organisation,

including any joint

ventures.

• Failure to have a

robust training and

monitoring

programme in place.

• Deliberate non-

compliance.

• A Code of Business Conduct 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 embedded into local business practices.

• 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.

• 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.

A financial reporting fraud

was discovered in the

Austral business unit (BU) in

Australia. As a result,

management

commissioned an external

forensic investigation which

reported to the ARC in

February 2023. It concluded

that the fraudulent activity

had not resulted in a cash

loss for the Group. A specific

controls response plan has

also been developed

covering both control

failings in Austral and a wider

review across Keller.

Progress against plan will be

reported to the ARC. See

the committee’s report on

page 107 for more

information.

Strategic risks

Link to strategy Link to viability Timeframe

6. Inability to maintain our technological product advantage

Description and impact Causes Mitigation and internal controls Movement since 2021

Keller has a history of innovation

that has given us a technological

advantage which is recognised by

our clients and competitors.

Failure to maintain this advantage

through the continued

technological advancements in

our equipment, products and

solutions may:

• Impact our position in the

market.

• Not being selected for key

complex, high-value projects

that support the Group

strategy.

• Make it more difficult to attract

and retain the best talent.

• Result in the loss of reputation

for delivering the best

engineered solutions.

• Failure to maintain

investment in

innovation and

digitisation.

• Increased competitor

investment in

innovative solutions.

• Failure to continue to

invest in our people.

• Innovation initiatives developed at both

Group and divisional level to ensure a

structured approach to innovation is in

place across the Group.

• Digitisation initiatives focusing 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.

• 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.

Link to strategy Link to viability Timeframe

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8. Service or solutions failure

Description and impact Causes Mitigation and internal controls Movement since 2021

In designing a product or a solution for

customers many factors need to be

considered, including client requirements,

site and loading conditions and local

constraints (eg neighbouring buildings, other

underground structures). Inadequate design

of a customer product and/or solution may

lead to:

• Inability to achieve the required

standard.

• Failure to meet quality standards,

damaging our reputation, giving rise to

regulatory action and legal liability, and

ultimately impact financial performance.

• A negative impact on long-term

profitability from poorly designed

product/solution as they are generally

covered by a liability limitation period of

12 years.

• Misinterpretation

of client

requirements or

miscommunication

of requirements by

the client may lead

to a poorly

designed solution

and consequently

failure.

• Continuing to enhance our technological

and operational capabilities through

investment in our product teams, project

managers and our engineering

capabilities.

• Employing geotechnical engineers that

are focused purely on design.

• Disaster Recovery/Business Continuity

Plans in place and reviewed across the

Group.

• The global product teams set standards,

provide guidance and disseminate best

practice across the organisation for our

eight key products.

• We seek to agree liability limits in our

contracts with customers.

• Insurance solutions are in place to limit

financial exposure of a potential

customer claim.

Principal risks and uncertainties continued

7. Climate change

Description and impact Causes Mitigation and internal controls Movement since 2021

Climate change is a global threat and

failure to manage and mitigate it could

lead to:

• Inability to achieve Keller’s

commitment to deliver solutions in an

environmentally conscious manner,

which may in turn have a negative

impact on our reputation, affect

employee morale and lead to a loss of

confidence from our customers,

suppliers and investors.

• Product offerings becoming obsolete

because they are no longer compliant

with environmental standards.

• Remediation of non-compliant work at

our own expense to maintain

compliance.

• Failure to update

product offerings

in line with both

legislation and

customer demand.

• Sustainability Steering Committee that is

responsible for integrating sustainability

targets and measures into the group

business plan to successfully drive changes

important to the company.

• Collaboration with the University of Surrey’s

Centre for Environment and Sustainability to

apply sustainability best practice to all

business functions.

• Scope 1 and 2 carbon emissions verified by

accredited external third party (Carbon

Intelligence).

• Carbon calculator tool used to identify/

improve carbon efficiency.

• Cross-functional team created to develop

and embed processes to meet TCFD

requirements. See page 90 for our

Organisational and reporting structure

for climate governance.

Starting to win project

opportunities related to

climate impact. Focus

remains on delivering

sustainability targets

and meeting TCFD

reporting

requirements.

Operational risks

Strategic risks

Link to strategy

Link to viability

Timeframe

40 Keller Group plc Annual Report and Accounts 2022

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Page Title

Operational risks

10. Supply chain – partners fail to meet the Group’s operational expectation and contractual obligations

(including capacity, competency, quality, financial stability, safety, environmental, social and ethical)

Description and impact Causes Mitigation and internal controls Movement since 2021

Failure to manage suppliers

effectively could lead to:

• Delays to executing

projects waiting for

materials and ongoing

business disruption.

• Additional costs to find

alternative suppliers.

• Becoming involved in legal

disputes and potentially

fines and penalties.

• Damaging our reputation

and potentially being

barred from bidding on

future contracts.

• Human rights abuses,

such as modern slavery,

child labour abuses and

human trafficking.

• Failure to embed the

Group’s expectation within

the procurement process.

• Inadequate assessment of

supply chain partner

capabilities during bidding

phase.

• Lack of supplier resilience

due to rising costs of

energy as a result of

geopolitical uncertainty.

• Lack of supply availability

due to increased demand

from and too little supply.

• Inflation driving up prices.

• Logistical impact causing

delays due to lack of HGV

drivers.

• 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.

• Working group established,

reporting to the Group Company

Secretary and Legal Advisor, to

drive minimum standards both

contractually and behaviourally

across key labour suppliers.

Supply chain issues, including both

scarcity of certain materials (steel,

cement and energy) and the pricing

impact of this, are beginning to show

signs of easing. While pressure remains

as a result of the geopolitical

uncertainty following Russia’s invasion

of Ukraine, it is being better managed

as demand cools across North America

and Europe. It will continue to be closely

monitored and action taken to mitigate

impacts.

The Group is committed to ensuring

slavery and forced labour is not taking

place in its business or supply chain.

Following a recent issue with a

contractor’s use of overseas

recruitment agents, we are undertaking

a modern slavery assessment of our

labour only contractors to ensure they

are complying with our standards.

9. Ineffective execution of our projects

Description and impact Causes Mitigation and internal controls Movement since 2021

Inability to successfully

deliver projects in line with

the agreed customer

requirements may

result in:

• Cost overruns, contractual

disputes and reputational

damage.

• Ineffective project delivery

may also expose the Group

to long-term obligations

including legal action and

additional costs to remedy

solution failure.

• Failure to manage

our projects to

ensure that they are

delivered on time

and to budget due

to unforeseen

ground and site

conditions,

weather-related

delays, unavailability

of key materials,

workforce

shortages or

equipment

breakdowns.

• Lack of

comprehensive

understanding of

contract

obligations.

• Inadequate

resources (people,

physical assets and

materials).

• Ensuring we understand all of our risks through the bid

appraisal process and applying rigorous policies and

processes to manage and monitor contract

performance.

• Ensuring we have high-quality people delivering

projects. Keller’s Project Management Academy and

Field Leadership Academy are designed to create

project 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.

• 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.

Number of projects not

executed to expectations

in 2022 above the

long-term average.

Adversely impacted by

persistently high inflation

across North America and

Europe.

Link to strategy

Link to viability

Timeframe

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Principal risks and uncertainties continued

Operational risks

11. Causing a serious injury or fatality to an employee or a member of the public

Description and impact Causes Mitigation and internal controls Movement since 2021

Failure to maintain high standards

of health and safety, and an

increase in serious injuries or

fatalities, leading to:

• Erosion of trust of employees and

potential clients.

• Damage to staff morale, an

increase in employee turnover

rates and a decrease in

productivity.

• Threat of potential criminal

prosecutions, fines, disbarring

from future contract bidding and

reputational damage.

• Inadequate risk

identification,

assessment and

management.

• Lack of clear

leadership driving the

safety culture.

• Lack of employee

competency.

• Poorly designed

processes that do not

eliminate or mitigate

risk.

• Lack of focus on the

wellbeing and mental

health of employees

and JV partners.

• 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 presence, using safety

tours, safety audits, 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.

12. Not having the right skills to deliver

Description and impact Causes Mitigation and internal controls Movement since 2021

Failure to attract and develop

excellent people to create a

high-quality, vibrant, diverse and

flexible workforce could:

• Harm the Group’s ability to win or

execute specific high-value,

complex projects.

• Fail to meet strategic objectives

to grow the business and lose

key stakeholder confidence

within the market.

• Inability to recruit

and retain strong

performers.

• Lack of a diverse

workforce.

• Failure to maintain

and promote the

Keller culture.

• Overheating of market

causing significant

increase in demand

or competition

for people.

• Lack of visibility of

long-term pipeline for

career progression

resulting in existing

employees leaving

the business.

• Post COVID-19

recovery driving

increase in attrition

or people leaving

the sector.

• Pressure from

wage inflation and

increased offers

from competition.

• 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’ is in

place with people having clear

accountabilities; each organisational unit is

properly configured with a matrix of line

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.

While we are still

witnessing inflationary

pressure on pay across

many locations where

Keller operates, the

pressure on competition

for skilled personnel is

beginning to ease. Focus

remains on retaining staff

with the right skills to

deliver.

Link to strategy Link to viability Timeframe

42 Keller Group plc Annual Report and Accounts 2022

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Operational risks

13. Cyber security

Description and impact Causes Mitigation and internal controls Movement since 2021

Risk of potential disruption in the

business operations, reputational

damage and/or loss or corruption

of data could lead to:

• Loss of intellectual property and

competitive advantage.

• Operational impact restricting

ability to carry out business

critical activities.

• Potential fines and penalties.

• Reputational damage leading to

loss of market and customer

confidence.

• Poor internal

governance.

• Failure to embed

preventative culture.

• Lack of or inadequate

training and

awareness.

• Increased exposure to

phishing attacks and

ransomware due to

increased use of

personal devices and

remote working.

• Inconsistent

approach to data

security, especially

with JV partners and

external third parties.

• Increased use of cloud

services without

equivalent investment

in modern threat

prevention.

• Cyber attacks.

• The Group has a cyber security and

information assurance team and is utilising

zero trust layered technology.

• Creation of 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,

detection, prediction and response services.

• Multi-factor authentication for all users

prevents unauthorised access to Keller’s

networks and applications.

• 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 GDPR and other

standards of data protection.

• Independent third-party review of our

approach to cyber security and the

adequacy of the control environment.

Link to strategy Link to viability Timeframe

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Strategic report

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The Board has ultimate responsibility for the oversight of climate-

related risks and responsibilities, a reflection of the importance of

these issues to the Group’s core business. The Group’s governance

framework of committees is structured to provide regular and relevant

updates to the Board in a clear reporting line to ensure informed

decisions on climate-related matters. ESG was a listed topic on

the agenda at four Board meetings in the last year, corresponding

to the ESG Board Report which the Board receives on a quarterly

basis. Our governance framework is outlined in full on page 88 and

our organisational and reporting structure for climate governance is

depicted on page 90.

The Environment Committee, a Main Board Committee, has

oversight of the Board’s responsibilities in relation to environmental

matters, including climate-related matters and TCFD. In line with

its terms of reference, this committee convenes a minimum three

times a year and is comprised of the CEO and the independent

NEDs. The committee has been chaired since July 2022 by Juan G.

Hernández Abrams, who joined the Board as an Independent NED in

February 2022. The Environment Committee’s report for 2022 can

be found on page 94 and Juan’s views are shared on page 100.

The Sustainability Steering Committee, a Main Management

Committee responsible for climate-related and environmental

matters, as well as other ESG matters including people, community

and governance, is composed of representatives from each division

and the Group’s relevant functions. The committee convenes

quarterly and reports to the Environment Committee and to the

Executive Committee (also a Main Management Committee).

As part of the risk management process for climate risks, the

Sustainability Steering Committee also reports to the Audit and Risk

Committee (a Main Board Committee), which in turn reports to the

Board. More detail on the risk management process is given below,

in the Risk management section of this statement, and on page 40

of the Principal risks and uncertainties section of the annual report.

ESG matters, including climate-related issues, are taken into

account in core strategic decisions by the Board and management

via a formal Project Review process. This process incorporates

assessment of the viability of projects on the grounds of safety and

legal compliance. The Group is developing a stage of this process

which would also incorporate assessment of project viability on the

grounds of climate-related impact. Currently, we incorporate an

assessment of projects based on the financial impact that would be

had as a consequence of an adverse reputational event.

As a result of this process of incorporating climate-related issues

into core strategic decisions, Keller has during 2022 adapted its

strategy in North America in accordance with client demands for

more sustainable projects. The Group has responded by expanding

its suite of ‘design and build’ project solutions, which allow Keller

to deliver more tailored projects, and deliver more low-carbon

solutions which take the environmental surroundings of projects

into consideration.

As referenced above, the Board receives an ESG Board Report on a

quarterly basis, and when circumstances require it, which includes

climate-related matters. The report is coordinated by the Group

Company Secretary and Legal Advisor’s team, and ensures a clear

reporting line on all ESG matters to the Board and the Chairman,

who is the Director responsible for ESG and sustainability.

The Board monitors and oversees progress against goals and

targets for addressing climate-related issues principally through

the Environment Committee, and also through the Remuneration

Committee where there is an impact on executive remuneration.

More detail on ESG-linked remuneration can be found on page 115.

Task Force on Climate-related Financial Disclosures

(Non-financial and sustainability information statement)

We are reporting against the Task Force on Climate-related Disclosures framework for the second

time, building on our prior year reporting. In meeting the requirements of Listing Rule 9.8.6.R we have

concluded that our disclosures are fully consistent with all of the TCFD recommended disclosures

except for certain aspects of the following sections, where our disclosures are partially consistent:

• Strategy – financial quantification of scenario analysis

• Metrics and targets – expanding metrics

For fuller disclosures under these two sections, further work is underway to enhance the financial quantification of the scenario analysis and

to be able to provide metrics for historical periods. We expect the results of this further work will be published in next year’s annual report.

On assessing compliance and consistency, we took into consideration the guidance documents referred to in the guidance notes to the

Listing Rules. This section contains details of our compliance and consistency with the recommended disclosures.

Governance

Disclosure Response

Describe the Board’s oversight of climate-related risks and opportunities

44 Keller Group plc Annual Report and Accounts 2022

Strategic report

Task Force on Climate-related

Financial Disclosures

The Sustainability Steering Committee is a Main Management

Committee responsible for overseeing environmental matters and

climate-related risks and opportunities (CRROs), as well as people,

community, governance and reputational matters. Both the Group’s

relevant functions and divisions are represented on the Sustainability

Steering Committee. It allows divisions and functions to raise

sustainability challenges, including on climate-related topics, to the

Executive Committee and to the Board and its committees. The

Sustainability Steering Committee also acts as a forum for discussing

sustainability strategy between different areas of the business, and

sharing best sustainability practices between divisions.

It is responsible for integrating sustainability targets and measures

into the Group business plan, in order to successfully drive changes

important to the company. Our governance framework is outlined

in full on page 88 and our organisational and reporting structure for

climate governance is depicted on page 90.

The Sustainability Steering Committee is informed about climate-

related issues by a network of Sustainability Champions embedded

across the Group’s business units. Sustainability Champions work

alongside our HSEQ teams and those responsible for local climate

risk registers to help bring to the attention of management and act

upon CRROs.

Governance

Describe management’s role in assessing and managing climate-related risks and opportunities

In 2022 we advanced our approach to CRRO identification and

assessment in two ways. First, by strengthening CRRO evaluation at

the business unit level, and second by implementing a quantitative

scenario analysis. Both will form the foundations of the future

facing climate strategy, enabling us to position ourselves well for

thetransition to a low carbon economy.

Our operations span multiple geographies and disciplines, and as

such, each will be exposed to various CRROs at differing severities.

To navigate this, and to ensure that business units are best equipped

to lead and deliver appropriate climate mitigation actions, we have

developed an internal climate-related risk register owned at the

business unit level. Risks and opportunities are assessed on a basis of

likelihood and impact. Viewed together, each then receives an overall

severity score.

At the Group level, this climate-related risk register has been

consolidated to produce a qualitative view of the relative severity of

CRROs by geography (see page 46).

Time horizons are defined as follows: short term – 1 year, medium

term – 2–5 years, and long term 6–30 years. These divisions take

into consideration both business cycles and the long-term time

horizons relevant to physical climate risk. The short-term risk is

defined as one year in recognition of the short-term nature of

the majority of our projects, which are typically bid for, won and

executed within one year.

The medium term aligns with the business planning horizons used

for the viability statement. The long term aligns to publicly available

climate projections extending to 2050. These timeframes are also

recognised by CDP as consistent with current best practices for

TCFD disclosures.

Based on the climate-related risk assessment, as well as the

quantitative scenario analysis, even the risks that score the highest in

the table overleaf are not material. The ‘high’ category, indicates that

the climate-related risks that score the highest are high relative to the

other risks, not according to their materiality.

Informed by this analysis, the key risks we expect to impact the business

in the future are disruptions from physical events, such as storms or

wildfires, and transition risks such as the cost of raw materials, and the

growing necessity to understand the carbon impact of our supply chain

(ie lack of monitoring/transparency of Scope 3 emissions).

That said, there are also significant opportunities presented by the

transition to a low carbon economy. For instance, our ability to offer

low carbon solutions, as well as the potential to capture demand in

new and evolving markets, such as renewable infrastructure.

We note that the above process was utilised to inform the approach

to the scenario analysis detailed further in this Strategy section.

Strategy

Describe the climate-related risks and opportunities the

organisation has identified over the short, medium and long term

Continues overleaf

Disclosure Response

Strategic report Governance Financial statements

Strategic report

Page Title

TCFD statement continued

Building on the assessment of CRRO at the business unit level, below we provide a more granular view of the potential impact of CRROs expected

to be most significant for the Group. These risks and opportunities have been prioritised on a basis of exposure and time horizon. Those CRROs

where we have high exposure , according to impact and likelihood, or where the impact is expected to be felt in the short term are shown below.

TCFD

Category

Opportunity

description Potential impact description Strategic response

Products

and services

Low carbon

solutions

Capture and retain market share

as carbon intensity of products

grows in importance as a market

differentiator.

Training our employees on the sector standard carbon

calculator, to understand the current emissions of our solutions.

Offering carbon comparisons when tendering large alternative

solutions, to upsell the low carbon solution.

Created a sustainability brochure and various case studies to

share with customers, highlighting our lower carbon solutions.

Products

and services

Climate

adaptation

solutions

The Group could see rising

demand for geotechnical

expertise to ensure robustness

of new and existing structures to

climate-related extreme

weather events, in addition to

infrastructure specifically

designed to reduce climate-

related impacts.

The breadth of expertise across the Group means we are already

well positioned for many existing resilience and retrofit projects.

The short-term nature of most projects means we can pivot

easily to new markets.

We already have the ability to treat desertification or work on

adaptation, resilience and mitigation projects, such as dams

and flood defences.

Describe the climate-related risks and opportunities the organisation

has identified over the short, medium and long term continued

Describe the impact of climate-related risks and opportunities on the organisation’s

businesses, strategy and financial planning

Strategy

High

Medium

Low

Yes

Not exposed

TCFD category Opportunities

Keller division Time horizon

North

America AMEA Europe Short Medium Long

Market Opportunities in new sectors

Products

and services

Low carbon solutions

Climate adaptation solutions

Resource

efficiency

Energy, building and transport efficiency

The tables above illustrates potential exposure through to 2050 by division, with time horizon illustrating when we expect the impacts

oftherisk or opportunity to be felt.

TCFD category Risks

Keller division Time horizon

North

America AMEA Europe Short Medium Long

Market

Risks to existing markets due to climate-related

risks impacting client sectors

Policy and legal

Carbon or air pollution regulation on fuel for operational projects

Cost of carbon intensive materials

Reputation

Lack of monitoring/transparency of Scope 3 emissions

and enhanced carbon reporting

Failure to attract staff due to slow action on reducing emissions

Technology Technological dependence

Physical acute

Storms and flooding delaying operational projects/damage to installed

works or Keller equipment

Physical chronic Hot weather and wildfires delaying operational projects

46 Keller Group plc Annual Report and Accounts 2022

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Page Title

TCFD category Risk description Potential impact description Strategic response

Policy

and legal

Carbon or air

pollution

regulation on fuel

for operational

projects

Potential for indirect impact

should costs rise for clients to a

prohibitive level. We also note

potential capex investment

required if unexpected air

pollution regulation comes out in

the medium term, and cleaner

alternatives become available in

the market.

All the rigs we produced in 2022 were electrohydraulic

or fitted with the latest anti-iIdling software and low

emission tier 5 engines.

We have developed a rig decarbonisation strategy which

included conducting HVO biofuel trials and exploring

electric equipment to reduce our dependence on

fossilfuels.

Collaboration with our trade associations to understand

upcoming legislation and support engagement with

legislators.

Policy

and legal

Cost of carbon

intensive

materials

Pricing remains embedded within

contracting process; however,

there is potential for reduced

overall demand because of cost

increases.

Upsell our existing low carbon solutions, particularly our

cement and steel-free ground improvement solutions.

Innovation focused on decarbonising our most carbon

intensive solutions. Recent innovations include reusing

spoil in jet grouting solutions and reducing spoil volumes

with the use of filter chamber presses and centrifuges.

Short project lead-in times mean we have generally

been successful at passing on material price inflation

to our customers.

Reputation Lack of

monitoring/

transparency of

Scope 3

emissions and

enhanced carbon

reporting

Potential for loss of market share

if clients require transparency in,

and associated reductions of,

Scope 3 emissions , although

most clients have not yet

enquired about Scope 3

emissions. In addition, potential

for loss of suppliers if

requirements become too

burdensome for SME operators.

We are working to embed automatic Scope 3

calculations in our ERP programme development.

We are conducting a business unit trial in Austria to

calculate business unit-wide material Scope 3 emissions.

Collaborate with industry trade associations to request

emissions data from suppliers and set minimum carbon

reporting standards.

Physical

acute

Storms and

flooding delaying

operational

projects

Some delay and opportunity cost

implications, in terms of outlays

that need to be made to support

workforce while project is shut

down, and noting that staff

cannot be deployed to other

projects during this time. Impacts

will be highly localised to coastal

regions and will not affect all

geographies.

Integrate financial contingencies into project planning

in areas with a higher risk of being impacted by extreme

weather events.

Continuously improve best practice guidance regarding

preparation, shut down, and recovery from storm-

related events.

Physical

chronic

Hot weather and

wildfires delaying

operational

projects

Some delay and opportunity cost

implications, in terms of outlays

that need to be made to support

workforce while project is shut

down, and noting that staff

cannot be deployed to other

projects during this time. We also

note some operations cannot be

performed under hot weather,

requiring extra costs for cooling

solutions. Impacts will be

localised to certain regions.

Consider shifting work patterns to avoid high heat

during the day, or during certain periods of the year

(eg to avoid monsoon rains or wildfire seasons).

Integrate contingencies into project planning.

Strategy

Describe the impact of climate-related risks and opportunities on the organisation’s

businesses, strategy and financial planning continued

DisclosureOngoingCompleted Planned Response

Continues overleaf

Strategic report Governance Financial statements

Strategic report

Page Title

TCFD statement continued

To advance the approach to CRRO evaluation, we have established the first quantitative scenario analysis assessment, using a location-based

approach. We assessed the various geographies to determine risk exposure, data capabilities, and the potential to establish a repeatable

process that could be applied across additional business units in future years. The two locations selected for the scenario analysis are those

most exposed to the two risks deemed potentially material, and where sufficient data was available for the modelling. Specific reasons for

these selections are described below.

Locations and scope of assessment are shown in the below table.

Location North America Europe

Business unit US Foundations (Florida and Central) South East Europe and Nordics (Austria)

CRROs Storm-related disruption Cost of raw materials and low carbon solutions

Time horizon 2022 – 2050 2022 – 2050

Warming

scenarios

Physical scenarios informed by Representative

Concentration Pathways

• RCP 4.5: 2ºC

• RCP 8.5: 4ºC

Transition scenarios informed by IEA pathways

• Net Zero Emissions (NZE): 1.5ºC

• Announced Pledges Scenario (APS): 1.8ºC

• Stated Policies Scenario (STEPS): 2.5ºC

Strategy

Describe the resilience of the organisation’s strategy, taking into consideration different

climate-related scenarios, including a 2°C or lower scenario

For the CRROs that were prioritised an assessment was conducted to clarify the potential impacts, as well as draw together the ongoing,

planned and completed mitigation actions. The previous table describes both the potential impact of CRROs and the strategic response to

either mitigate risk or capture opportunity.

The assessment of severity across time horizons at the business unit level allowed us to establish that none of the CRROs, taken individually,

are financially material to the business in the immediate term . However, taken in aggregate, climate change-related risks are judged to

represent a significant risk, and climate change has therefore been added as a principal risk to the business. To reflect this stance in our financial

planning, climate-risk is currently built into the viability statement sensitivity analysis which looks out by three years, for example, by adding in

risks to contract margin for increased project disruption from climate change related events. This approach will be evaluated on an ongoing

basis. The full viability statement can be found on page 36.

Keller’s decarbonisation strategy and targets are set out on page 56.

Describe the impact of climate-related risks and opportunities on the organisation’s

businesses, strategy, and financial planning continued

48 Keller Group plc Annual Report and Accounts 2022

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Page Title

Florida and Central

Risk: Storm-related disruption

Selection:

The risk of acute weather events, such as

storms, is highlighted as a medium risk across

all three of our divisions. In terms of selecting a

location for scenario analysis, US Foundations

is one of our largest entities, with a good record

of project size and geography. The US also has

good climate modelling data (see below) that is

grounded in the RCP scenarios from the IPCC.

This combination of potential business impact,

combined with data quality, makes this a useful

first quantitative model for the physical effects

of climate change.

Inputs:

The data inputs chosen enabled us to

interrogate the physical impacts of climate

change. Warming pathways utilised were

informed by Representative Concentration

Pathways adopted by the IPCC. Storm landfall

probabilities by region were sourced from

Colorado State University, leveraging NOAA’s

storm tracking datasets. Likewise, NOAA

predictions of changing storm intensity and

frequency related to warming scenarios were

used to inform projected storm disruption.

Outputs:

The analysis clearly illustrated that Florida and

Central business units are more exposed to

storm-related disruption in a 4ºC warming

scenario. This exposure is broadly driven

by higher intensity of storms, and a greater

frequency of major hurricanes.

We note that the financial implications of

this disruption will vary significantly across

operational sites, and will be highly localised

to coastal regions. Finally, it is important to

mention that the findings are sensitive to

assumptions made in the modelling process,

in particular the estimated number of days’

delay resulting from storm disruption.

Outcomes/next steps:

• We will work with business units to plan how

to track disruption across operational sites

in a consistent manner, to both monitor

impact and improve future modelled

projections of risk.

• We will continue to improve best practice

guidance regarding preparation, shutdown

and recovery from storm-related events.

Austria

Risk: Cost of raw materials

Opportunity: Low carbon solutions

Selection:

The risk from policy and reporting of Scope3

material emissions is highest in our Europe

Division. This mostly reflects existing legislation,

like the EU Emission Trading System (ETS) for

carbon intensive materials like cement and

steel, as well as upcoming legislation such as

the Carbon Border Adjustment Mechanism

(CBAM) for imported cement and steel. Europe

also has more opportunities from upselling

low carbon solutions, with the likes of the EU

Taxonomy legislation, In combination with

CSRD, rewarding companies and projects

with lower Scope 3 emissions. Keller Austria

has a centralised SAP system for capturing

specific cement and steel types used in each

solution we offer. Austria is also the site of our

first attempt to calculate the Scope 3 material

emissions for an entire entity. Therefore, this

combination of existing legislative pressure and

data availability, combined with IEA modelling

of future EU legislation, makes Austria a good

location for the quantitative modelling. Whilst

the specific product mix and materials used

vary between European BUs, the learnings

around future EU models can be applied to

most of our Europe Division.

Inputs:

This model required data inputs from the

International Energy Agency to assess the

financial risk posed by the additional cost of

materials and opportunities associated with

low carbon solutions. Warming scenarios were

taken from the 2022 World Energy Outlook.

These scenarios also provided projections of

carbon pricing into the future. Studies from the

European Commission and European Cement

Association informed estimations of material

decarbonisation rates that were paired with

warming scenarios analysed.

Outputs:

In contrast with the Florida and Central location,

the risk associated with the cost of raw

materials, and its twin opportunity, the potential

for low carbon solutions, are likely to impact the

Group most significantly in a 1.5ºC scenario.

This is mainly driven by greater stringency

of climate regulation, for instance carbon

pricing, and availability of low carbon materials.

Modelled outputs show that exposure to

elevated carbon pricing is not entirely offset

by the decarbonisation rate of materials, even

in a 1.5ºC scenario. The direct financial impact

of this is likely to be minimal, given cost of

materials is embedded into the contracting

process. Despite this, as price increases, we

could see some reduced overall demand for

services at the industry level – assuming client

budgets remain consistent. In addition to risk,

opportunities were also highlighted, including

Keller’s ability to offer lower carbon solutions to

clients for equivalent services.

The findings around indirect financial impacts

and opportunities will apply to all other European

locations since the regulatory frameworks are

the same. For other business units such as the

UK, the impacts will be very similar to Europe’s,

due to legislative equivalences.

Outcomes/next steps:

• We will continue with the exploration of

feasibility, considering testing where low

carbon product lines are feasible per service

offering, and the testing of low carbon

materials within standing product lines.

• To enable this opportunity, we will continue

to train all engineers in the use of the sector

standard carbon calculator, to enable them

to determine and offer low carbon solutions.

This also requires collaboration, working

with clients to support the selection and

implementation of low carbon approaches

where feasibility allows.

• For future quantitative climate scenario

analysis, we will continue with a location-

based approach, in order to expand our

understanding of both transition and physical

CRROs according to different geographies.

Strategy

Locations

Disclosure Response

Describe the resilience of the organisation’s strategy, taking into consideration different

climate-related scenarios, including a 2°C or lower scenario continued

Strategic report Governance Financial statements

Strategic report

Page Title

TCFD statement continued

Management of climate-related risks is handled through the same processes that are applied to other risks within the Group.

Our processes seek to identify, assess and manage risks from both a top-down strategic perspective and a bottom-up local operating

company perspective. This is achieved through regular risk reviews within our business units and functions facilitated by our Group Head

of Risk and Internal Audit (see model on page 35).

As outlined in the risk governance framework, CRROs are identified from both top-down and bottom-up perspectives, and integrated into risk

reporting and management across the Group. At division, business unit and function level, CRROs are identified and assessed, and reported

to the Group Head of Risk and Internal Audit and Executive Committee, and in turn to the Board and the Audit and Risk Committee in the same

manner that all other risks are evaluated. At Group level, the Board and Audit and Risk Committee are jointly responsible for determining the

nature and extent of the company’s principal and emerging risks, including CRROs.

Describe the organisation’s processes for managing climate-related risks

Describe how processes for identifying, assessing and managing climate-related

risks are integrated into the organisation’s overall risk management

Risk management

Climate change-related risks and opportunities are assessed as

part of the Group’s risk governance framework, which has been built

to identify, evaluate, analyse and mitigate significant risks to the

achievement of our strategy. The strategy for risk embeds processes

that seek to identify risks from both a top-down strategic perspective

at Group level and a bottom-up local operational and business unit

level, in order to ensure a consolidated view of risk.

Climate change has been established as a principal strategic risk, and

the Sustainability Steering Committee has been made responsible

for integrating sustainability targets and measures into the Group

business plan. The full risk governance framework can be found on

page 35.

The significance, size and scope of identified climate-related risks is

determined through the same processes that are applied to other

risks identified by the Group. Risks are initially identified and assessed

at business unit or functional level, and business unit leads are then

assigned CRROs relevant to their own geography and services. CRROs

are then evaluated for their velocity, probability, potential financial and

reputational impact, and assigned an overall quantitative score of

severity of risk, that is then consolidated at Group level to produce a

qualitative view of the relative severity of CRRO risk by geography.

For more detail on the methodology used to identify the materiality

of CRROs see the Strategy section of this TCFD disclosure, section a).

A full list of CRROs is given on page 46.

In addition to the above, we are advancing our approach to climate

quantitative scenario analysis. More detail on this process is provided

in the latter section of the Strategy disclosure.

Describe the organisation’s processes for identifying and assessing climate-related risks

50 Keller Group plc Annual Report and Accounts 2022

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Page Title

Metrics and targets

The Group discloses Scope 1 and Scope 2 carbon emissions to ISO

14064-3 Standard. Independent verification is provided by Carbon

Intelligence.

A newly implemented ERP will assist us with collecting new cross-

industry climate-related metrics.

The Remuneration Committee agreed a Scope 2 reduction target as

one of management’s corporate objectives linked to remuneration

for 2022. More detail on this objective and remuneration outcome is

available in the Directors’ remuneration report on page 115.

When conducting the scenario analysis, the Group assumed multiple

scenario-specific carbon prices based on IEA projections.

Response

Our Scope 1 and Scope 2 emissions are recorded In the ESG and

sustainability section as part of our Streamlined Energy and Carbon

Reporting (SECR) on page 58. These emissions are recorded both in

absolute terms, as well as relative to revenue to highlight the carbon

intensity of our operations.

In terms of Scope 3, we currently only calculate business travel

emissions for key business units. However, Scope 3 calculation

and reporting is being built into the upcoming ERP programme,

to calculate our wider Scope 3 emissions. In the meantime, we collect

various leading metrics that help reduce our Scope 3 emissions.

For more on these leading targets, including training our engineers

in calculating and reducing carbon in our projects, see page 56.

The emissions targets using the scopes outlined in the GHG protocol.

All targets are calculated according to the GHG protocol, and are in

compliance with SECR.

These absolute targets assist the Group in mitigating future climate-

related risks and in recognising climate-related opportunities. All

targets use a 2019 baseline where available.

Scope 1 – Net zero by 2040

Interim target to be set in 2023.

Scope 2– Net zero by 2030

Interim target of 10% in absolute emissions for 2022 (against 2019).

Operational Scope 3 – Net zero by 2050

Operational Scope 3 covers business travel, material transport

and waste disposal.

We also specify multiple leading targets under each absolute

target, to help achieve each net zero target. These range from

conducting energy efficiency audits in our offices and yards, through

to conducting specific carbon reduction site trials and training our

engineers on the sector standard carbon calculator.

For more information on the Group’s emissions and associated

targets, please see page 56.

Disclose the metrics used by the organisation to assess climate-related

risks and opportunities in line with its strategy and risk management process

Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG)

emissions and the related risks

Describe the targets used by the organisation to manage climate-related risks and

opportunities and performance against targets

Disclosure Response

Strategic report Governance Financial statements

Strategic report

Page Title

Our corporate purpose, ‘Building the foundations for a

sustainable future’, is at the heart of everything we do. As the

Director responsible for ESG and sustainability on the Board I am

profoundly dedicated to this topic and I have a strong desire to

make a positive change.

We set our first-ever net zero targets during 2021, to be net

zero by 2050, and I am able to report good progress against this

key priority. We are committed to reducing the carbon intensity

of our work and increasing the quality and granularity of our

carbon reporting and we have made good progress in this area.

We could not achieve this without the many initiatives being

undertaken all across our business, including energy efficiency

audits at every business unit in Europe, multiple business units

generating renewable energy or moving to green energy tariffs,

and over 900 of our engineers starting to use our sector-

standard carbon calculator to help our customers understand

the carbon impacts of solutions available to them.

Keller recognises and embraces the broadest definition of

diversity. In 2022 we have focused on strengthening local

accountability to embed the right ambitions, behaviours and

practices in the company, whilst ensuring that our employees’

views are considered in all that we do. I am able to confirm that in

employee engagement surveys carried out in 2022, 78% of our

employees felt that the company respected individual differences.

People are our business, so keeping our colleagues safe and well

is paramount. We want every person who works for us, or with

us, to go home safely at the end of each day. Disappointingly,

the metric by which we measure our safety performance,

accident frequency rate (AFR), increased in the year with an

uptick particularly in hand and finger injures. The data is being

scrutinised and a remedial plan has been put in place. More

positively, we have ensured that our Employee Assistance

Programme is available to all of our employees wherever they

work across the globe.

The Board continued to receive quarterly reports on all ESG

initiatives and deliverables from the Group Company Secretary

and Legal Advisor, assuring a clear reporting line on all ESG

matters to me and to my fellow Board members.

I would like to thank everyone at Keller for their continued

commitment to our ESG and sustainability agenda.

Peter Hill CBE

Chairman

Approved by the Board of Directors andauthorisedfor

issueon 10 March 2023.

Making sustainability core to our

business helps differentiate us from

our competitors and helps us achieve

long-term profitability and growth.”

ESG and sustainability

Peter Hill CBE

Chairman

52 Keller Group plc Annual Report and Accounts 2022

Strategic report

ESG and sustainability

Global initiatives Local initiatives

Planet

People

Principles

Our key ESG and sustainability metrics

UN SDG

alignment Objective KPI description

KPI performance

Further reading2022 2021

Carbon

reduction

We are committed to reducing

the carbon intensity of our work

and increasing the quality and

granularity of our carbon reporting.

CDP score B B

See page 58

Absolute tonnes of

e per £m revenue

74 85

See page 58

UN SDG

alignment Objective KPI description

KPI performance

2022 2021 Further reading

Safety We want every person who works

for us, or with us, to go home

safely at the end of each day.

Accident frequency rate,

per 100,000 hours worked

0.10 0.07

See page 67

Total recordable incident rate,

per 100,000 hours worked

0.79 0.63

See page 67

Gender

equality

‘We are Keller’ recognises and

embraces the broadest definition

of diversity. Gender equality

and empowerment is a UN

sustainability development goal we

have committed to progressing.

% of women in senior leadership 22% 18%

See page 65

% of women engineers 16% 13%

See page 65

% of women engineering

graduates and apprenticeships

7% 13%

See page 65

Quality

education

We are committed to investing in

our emerging talent and building

diverse capability for the future.

Number of engineering

graduates, apprenticeships,

intern and co-op opportunities

191 238

See page 70

UN SDG

alignment Objective 2022 KPI performance Further reading

Good

governance

We want an effective internal framework of systems

and controls in place which clearly defines authority and

accountability and promotes success whilst permitting

the appropriate management of risk.

ESG reporting framework

in place

See page 72

Partnerships We want to partner with ‘like-minded’ organisations

to drive change in our organisation and the wider

geotechnical industry.

Three-year partnership

with UNICEF’s Core

Resources Fund; donation

of £250,000 in the first year

See page 73

Strategic report Governance Financial statements

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Page Title

Our role in building the foundations

for a sustainable future.

Sustainability is at the heart of

Keller’s strategy for building the

foundations for a sustainable future.

At Keller, we are committed to better

understanding our contribution to

sustainable development and working

collaboratively with our customers and

stakeholders to improve sustainability.

We define what sustainability means

to Keller using the four Ps: planet,

covering environmental sustainability;

people, covering social sustainability;

principles, covering governance; and

profitable projects, covering economic

sustainability and how we apply

sustainability in our work.

Beneath each of the four Ps, we align our initiatives

to the UN Sustainable Development Goals (SDGs).

These goals provide a common language for us to

communicate sustainability initiatives globally, both to

our internal and external stakeholders. We have four

global SDG initiatives, with the whole Keller Group

focused on carbon, gender DEI, safety and good

governance. We then have a number of other local

initiatives, where our business units can focus on areas

of sustainability that are most relevant to our local

markets. To measure progress on these SDGs, we use

metrics from GRI and the SDG compass. See page 76

for our GRI Index.

Keller’s Chairman has ultimate responsibility for ESG

and sustainability on the Board. This reflects the

importance of these issues to our core business,

ensuring sustainability-related risks and opportunities

are viewed at the highest level. We describe this further

on page 90 in the Governance report.

Both the Executive Committee and Keller’s divisions

are represented on the Sustainability Steering

Committee. This Management Committee allows

divisions and functions to raise sustainability

challenges, including climate-related topics, to the

executive and ultimately to the Board. It also acts as

a place to share sustainability best practices between

divisions and discuss sustainability strategy. Meetings

are held quarterly and are structured around Keller’s

four Ps.

Environment

Social

Governance

Improvement

imperative

Drivers: Keller’s four Ps

Profitable

projects

We continually innovate to support

more environmentally sustainable

construction, actively transforming

our product portfolio to help our

customers use fewer resources,

reduce their carbon emissions and

improve their environmental impact.

Making sustainability core to our

business helps differentiate us from

our competitors and helps us achieve

long-term profitability and growth.

ESG and sustainability continued

Our ESG framework

54 Keller Group plc Annual Report and Accounts 2022

Strategic report

Page Title

Global initiatives Local initiatives

Planet

We are helping to build a sustainable

future by using less resources, reducing

carbon emissions and reducing waste

across our operations, whilst playing a

positive rolein our local communities,

the environment and wider society.

People

We operate in a way thatrespects

people and their health, safety and

environment, always strivingfor zero

harm. Our motivating and inclusive

culture makes usa good employer

that people are proud to workfor.

Principles

An effective framework of systems

and controls ensures we manage

risk and run our company well,

and we seek out partners who

understand our principles and the

standards we operate by.

Tackling

pollution

Race

DEI

Partnerships

Resource use

and waste reduction

Carbon

reduction

Quality

education

Good

governance

Resilient

cities

Good health

and wellbeing

See page 61

See page 68

See page 61See page 56

See page 70

Safety

Gender equality

See page 67

See page 65

See page 72

See page 61

See page 62

See page 73

For more information see page 56

For more information see page 62

For more information see page 72

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Page Title

Planet

Global priorities

ESG and sustainability continued

Scope Net zero target More information

1 Net zero by 2040

See page 59

2 Net zero by 2030

See page 60

3 Operational Net zero by 2050

See page 60

Carbon reduction

2022 was the first full year since we set our

first-ever net zero carbon targets. These targets

represent Keller’s commitment to the planet as

we build the foundations for a sustainable future.

These absolute targets will help us mitigate future climate-related risks

and recognise climate-related opportunities. We divide our emissions

targets using the scopes set out in the GHG Protocol. These targets

and our current performance are set out in the following section. The

timeframe and lagging targets we set for each net zero commitment

reflect the size and the level of control we have over each emission scope

(see below). To achieve these targets, we have set multiple internal leading

targets, built around the carbon hierarchy (see right). This explains that,

after we work through the hierarchy to eliminate, reduce and substitute

emissions, we may offset our remaining emissions as a last resort.

Relative size of our emissions (approximate)

Directly within Keller

Yard and office

electricity

Transport

and travel

Materials

Site waste

Diesel –

other equipment

On-site

diesel – rigs

In supply network

Net zero 2040 Net zero 2030 Net zero 2050

Scope 1 Scope 2 Scope 3

56 Keller Group plc Annual Report and Accounts 2022

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Keller’s Central Europe and South-West

Europe business units have developed new

software that optimises piling projects,

speeding up the design process and reducing

carbon and costs.

Severin Vollmert, Technical Lead for the CFA Competence Team,

explains how to improve piling designs, and to do them faster.

“When you have lots of piles supporting different loads, you either

find the pile in each section bearing the largest load and design them

all to that specification, and you have a lot of over-designed piles,

or you spend a long time working out the ideal design for each pile.

Bothapproaches have inefficiencies.”

Keller’s new Pile Designer software allows users to calculate

different pile types, diameters, soil profiles and steel reinforcements

for the load of each individual node of a structure, all at the same time.

The result offers simple comparisons across different solutions and an

optimised design for each pile. The software also makes it much simpler

and quicker to recalculate designs when faced with client changes.

Minimising a project’s carbon footprint

Once the design is finalised, the calculations can be fed into rig

technology, enabling the operations teams to drill each pile to exactly

the right depth and install the precise amount of material.

This cuts design time in half, whilst significantly reducing materials

and embodied carbon and, consequently, the overall cost base.

The software has been trialled on six projects, with good feedback.

The aim is to now encourage more design specialists to start using it

and, because design standards vary so much, to look at whether it can

be adapted for different markets.

Piling software cuts carbon and speeds up design

Case study

Compensate

Substitute

Reduce

Eliminate

The carbon hierarchy

Eliminate emissions completely

eg Teams instead of travel, eliminate concrete,

cement and steel

Reduce emissions

eg reduce number of piles and pile diameter,

improve the efficiency of our processes

Substitute emission sources

eg low-carbon cements, recycled steel/aggregate,

offices powered by renewable power

Compensate

eg carbon-negative solutions, carbon offsetting

(‘carbon credits’)

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Page Title

North America 2022

Oil consumption

Equipment diesel consumption

Gas consumption

Vehicle petrol consumption

LPG consumption

Vehicle diesel consumption Electricity consumption market-based

Europe 2022

AMEA 2022

North America 2021

0 20,000 40,000 60,000 80,000 120,000100,000

Europe 2021

AMEA 2021

Overall performance and verification

Group 2022 2021 2020 2019

Energy use MWh 897,717 741,579 691,074 811,881

Scope 1 tonnes CO

e 210,186 183,112 169,216 198,289

Scope 2 (market-based) tonnes CO

e 6,593 6,574 7,091

Scope 2 (location-based) tonnes CO

e 6,913 6,723 7,0 94 9,159

Total Scope 1 and 2 (market-based) tonnes CO

e 216,779 189,686 176,307

Total Scope 1 and 2 (location-based) tonnes CO

e 217,099 189,835 176,310 207,448

Absolute tonnes of CO

e per £m revenue 74 85 85 90

Keller UK 2022 2021 2020 2019

Energy use MWh 20,673 19,699 12,949 16,724

Scope 1 tonnes CO

e 4,790 4,961 3,033 3,915

Scope 2 (market-based) tonnes CO

e 0 0 218

Scope 2 (location-based) tonnes CO

e 117 69 219 265

Total Scope 1 and 2 (market-based) tonnes CO

e 4,790 4,961 3,251

Total Scope 1 and 2 (location-based) tonnes CO

e 4,907 5,030 3,252 4,180

Absolute tonnes of CO

e per £m revenue 38 50 53 64

Scope 3 business travel tonnes CO

e 721 97 26

Note that some of the fuel we use in our equipment is purchased by the main contractor and we are currently unable to report on these emissions due to difficulties with collecting accurate data.

Keller Group 2022 and 2021 greenhouse gas emissions (tCO

ESG and sustainability continued

Planet

Overall performance

This year, Keller’s overall Scope 1 and 2 emissions increased. This mostly

reflects the acquisition of RECON and an increase in the number of

projects carried out compared to 2021. However, in terms of the carbon

intensity of our operations, relative emissions actually continued to fall.

This reflects the range of carbon reduction and efficiency improvements

implemented throughout the year (see pages 59 and 60). It also means

that Keller’s total relative emissions have either remained level or fallen

every year since 2017.

Third-party assurance statement

At the request of the Director responsible for sustainability, Keller seeks

annual third-party verification of our emissions. This verification process is

compliant with the same consolidation rules as are applied to our financial

accounting. This is consistent with the approach used in the ISO 14040

series and reflects the impact we have on overall emissions in our entities.

Independent verification, in accordance with best practices required by

ISO14064-3 Standard, on the Scope 1 and Scope 2 GHG accounts has

been provided by Carbon Intelligence. Their summary opinion is provided

below (full opinion and recommendations are available on request).

Based on the data and information provided by Keller and the processes

and procedures conducted, Carbon Intelligence concludes with limited

assurance that the GHG assertion:

• is materially correct;

• is a fair representation of the GHG emissions data and information; and

• is prepared in accordance with the criteria listed above.

It is our opinion that Keller has established appropriate systems for the

collection, aggregation and analysis of quantitative data for determination

of these GHG emissions for the stated period and boundaries.

CDP

As in previous years, Keller disclosed our climate change performance to

CDP. CDP assesses the carbon intensity of Keller’s operations, as well as our

ability to identify and mitigate climate-related risks and opportunities. In 2022,

we achieved a score of B. This is the same as in 2021, with Keller remaining

above the global and construction average CDP score of a C. Since this CDP

score reflects our progress in 2021, the score does not include our progress

on climate scenario analysis and wider TCFD improvements. These should

be reflected in next year’s CDP score. For more on our climate risks and

opportunities and TCFD, see pages 44 to 51.

58 Keller Group plc Annual Report and Accounts 2022

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Scope 1: Direct emissions

Net zero by 2040

Scope 1 covers our direct emissions. These mostly arise from the fuel

use of our rigs and Keller vehicles. Keller’s 2022 Scope 1 emissions have

increased since 2021. Scope 1 fuel emissions are highly dependent on

the projects completed annually. Therefore, since we have completed

more work this year than during the COVID-19 restrictions of 2021,

our emissions have increased. This also reflects the addition of RECON

projects in 2022. However, the carbon intensity of our operations has

decreased. This means we have continually decreased or maintained

our Scope 1 emissions per £m revenue year on year since 2017.

This reduction in relative emissions reflects a number of carbon

reduction initiatives that were introduced this year. All these initiatives

are needed to decouple our growing work from absolute Scope 1

emissions. Following the carbon hierarchy, we use Lean design and

optimise site set-up to reduce the number of days we spend on site

and thereby reduce emissions.

In terms of substituting emission sources, all the rigs we produced in

2022 were electrohydraulic or fitted with the latest tier 5 engines. This

reduces our emissions on site, improves fuel efficiency and reduces

our fuel consumption. Through our in-house rig manufacturers, we are

constantly innovating to develop more sustainable equipment. This

includes work developing our first electric rig, the KB0-E. 2022 also saw

the first year-long hydrogenated vegetable oil biofuel trials in our rigs.

This initiative, alongside many others, represents stepping stones in

our fleet and machinery decarbonisation strategy.

Although most of our emissions come from our rigs, our vehicle fleet

is also a large source of emissions. Therefore, in North America, where

vehicle emissions are largest, we are trialling hybrid trucks as a way to

reduce carbon emissions and improve air quality. In markets with good

electric charging infrastructure, we have also adapted company car

schemes to encourage the uptake of hybrid and electric vehicles.

95 250,000

70 0

75 50,000

80 100,000

85 150,000

90 200,000

2019 20192022 20222021 20212020 2020

tCO

e/£m revenue

tCO

Scope 1 per £m revenue Absolute Scope 1

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ESG and sustainability continued

Planet

Net zero by 2030

Net zero for Operational Scope 3 by 2050

10,000

2,000

4,000

6,000

8,000

2019 202220212020

tCO

Absolute Scope 2

Scope 2 covers indirect emissions from the electricity we use. These

emissions are mostly from office and maintenance yard operations.

This makes Scope 2 the smallest of Keller’s three emission scopes.

Location-based emissions are dependent on the average carbon

intensity of energy generation in the countries in which we operate.

Market-based emissions are based on the specific energy tariff we use

for each of our offices and maintenance yards. Since these emissions

do not significantly vary with the number of projects carried out, we

only analyse absolute Scope 2 emissions.

For the first time, this year Keller linked leadership remuneration to a

10% reduction in market-based Scope 2 emissions, based on our 2019

baseline year. This was successfully achieved, with Keller seeing a 28%

reduction on the baseline. Scope 2 emissions remained effectively level

with 2021, even as employees returned to the office after COVID-19

restrictions were lifted in most markets.

Achieving the same emissions, despite a return to offices and an

increase in yard use, is thanks to multiple carbon reduction initiatives. To

help target these initiatives, Keller ran energy efficiency audits across all

the divisions of our business. Using these audits, business units around

the Group have implemented recommendations, from installing LED

lights, to replacing old single-glazed windows and educating employees

about saving energy. We also have a number of branches trialling the

electrification of equipment, such as forklifts and machinery, in their

yards. Although this increases Scope 2 emissions, this offers an overall

carbon saving over using diesel-poweredequipment.

The growing difference between location-based and market-based

Scope 2 emissions reflects how some of our business units, such

as in the UK and Germany, are now procuring certified renewable

power electricity for the first time. Taking this one step further, certain

business units, such as Austria, Austral and the UK, generated their own

renewable energy using solar panels. Additional business units, such as

India and Poland, also plan to install solar panels in 2023.

Scope 3 represents all other indirect emissions from Keller’s supply

network. This means Scope 3 is the largest proportion of Keller’s

emissions.

To reflect where we believe we can have the most impact, we have set

a net zero target for Operational Scope 3. This covers business travel,

transportation of materials, and waste disposal. Scope 3 business travel

has increased since 2021 as COVID-19 travel restrictions continued

to be lifted. We continue to develop our Scope 3 reporting to include

the rest of our Operational target, building these transportation

emissions into the upcoming ERP system. In the meantime though,

we continue to encourage the use of video calls to reduce the need to

travel between offices. At our sites, we also have initiatives like 5S and

containerisation to reduce the number of trucks needed to mobilise

and demobilise our equipment.

Whilst Keller looks to reduce Materials Scope 3 emissions by designing

for less and lower-carbon materials, we are still dependent on our

supply network decarbonising their activities.

Since we work with local material suppliers on each project, we have

thousands of suppliers in our value chain. This use of many small

suppliers for individual projects means we lack leverage when it comes

to decarbonising our supply network. Our approach to Materials Scope

3 is therefore focused on creating the drivers to encourage smaller

suppliers to decarbonise, as well as engaging with larger stakeholders

to help drive decarbonisation. For example, we are working with our

trade associations across Europe and North America to collectively

leverage our supply network to drive decarbonisation. We are also

looking to form strategic partnerships with larger suppliers to help

decarbonise our material emissions.

In terms of measuring all Scope 3 emissions, we are integrating these

into the upcoming ERP project. This will also enable us to estimate

a range of other sustainability impacts from our supply network. For

now, in 2022, we trained over 900 employees on the sector-standard

EFFC – DFI embodied carbon calculator. This has enabled us to start

proactively monitoring our Scope 3 emissions on key projects. More

importantly, it also offers the opportunity to offer lower-carbon

solutions to our clients, as well as helping identify carbon-intensive

Scope 3 hotspots to target with future carbon reduction initiatives.

Scope 2: Indirect emissions from electricity

Scope 3: All other indirect emissions

Keller Group plc Annual Report and Accounts 2022

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Page Title

Resource use and

waste reduction

This initiative reflects the contribution Keller

can make towards the circular economy.

In particular, we look to reduce raw material

use, increase our use of secondary materials,

reduce waste to landfill and allow for pile reuse.

We recognise the large volumes of materials used and produced on

our sites, so have started a number of projects to improve these

impacts. This is why we are contributing to cross-sector research and

development of a circular economy guide for geotechnical companies.

This will help the whole sector understand their current circular

economy impacts and existing legislation in this space. Critically, this

will also share good practices that geotechnical companies can adopt

to improve their impact on the circular economy.

Internally, Keller routinely promotes ground improvement solutions as

a way to reduce raw material use on site. Ground improvement uses

natural or recycled materials to improve ground load carrying capacity.

This reduces or completely removes the need for heavy foundations. In

turn, this reduces the volume of cement and steel used on site, saving

primary resource use, and potentially offering a financial saving to our

clients. The reduced need for heavy foundations also reduces the

carbon intensity of the overall project.

As well as addressing our use of raw materials, we are also keen

to reduce waste. Of all the geotechnical solutions we offer, our jet

grouting solutions have traditionally used the most water and created

the most waste spoil. Therefore, our research and development

teams have been trialling ways to monitor and reduce these impacts.

Using a combination of filter chamber presses, centrifuges and shale

shakers, we are now able to reduce the volumes of waste water and

spoil produced on jet grouting sites. As well as reducing the cost of

waste disposal, this has the added benefit of reducing the number of

trucks required to transport materials off site. This reduces congestion

around our sites, improving air quality and reducing our impact on the

local community.

We also have a number of ongoing research projects looking to use

alternative materials for jet grouting. Building on the success of our

Halocrete

and Neutrogel

innovations announced in the 2020 annual

report, we are now developing other, non-toxic, low-carbon grouts for

other geotechnical purposes.

Local priorities

Resilient cities

With this SDG, we focus on improving our impact

on the local communities in which we operate.

We also focus on ensuring our solutions offer

resilience for cities and communities facing the

physical risks of climate change.

Many of our business units work with local organisations and wildlife trusts

to improve their local environment. For example, our India Business Unit

used remaining cement left over from one project to make bricks for local

community construction projects.

As subcontractors and contractors on site in urban areas, we make use of

dust suppression and baffling to minimise the impact of dust and noise

on the local environment. We also typically use local material suppliers

to support local businesses, reduce transport distances and reduce

congestion around our sites.

We recognise that every community and city that we operate in has different

sustainability needs. Therefore, alongside our Group-wide commitments,

each of our business units have their own local sustainability priorities.

We take this same approach to our projects. For example, on treating the

physical effects of climate change in different markets, Keller works on flood

defence projects and projects focused on ground remediation treating

desertification. We continue to develop our product portfolio to meet these

growing markets. We promote these products both directly to clients and

through our existing sustainability brochure.

Tackling pollution

Keller is committed to delivering its solutions

in a socially and environmentally conscious

manner. Over recent years reporting processes

have improved and performance is generally

encouraging.

The overall number of environmental incidents remained in line with

those reported the previous year, with most incidents being minor

hydraulic leaks. We have therefore been rolling out our improved

equipment inspection process, using our site software prior to each

shift commencing, in an effort to reduce the number of minor spills.

We continue to work on our preventative maintenance programmes to

ensure that we address any issues before the event occurs. In addition,

we ensure that secondary containment is in place for stored equipment

and materials. We continually seek to improve our processes on site,

specifically around job planning, to ensure that we identify, mitigate and

control our risks and minimise our environmental impact.

Whilst as subcontractors we have minimal control on biodiversity on site,

multiple business units continue to engage with wildlife trusts to promote

local biodiversity.

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Conscious

Leadership

Improve accountability

through inclusive and

conscious leadership.

By empowering and equipping our

leaders to excel in this space.

Empower

Empower and invest in

our workforce.

By creating an environment

of continuous learning and

development to support our

people in reaching their full

potential.

Listen

Listen and engage with

our workforce.

Through employee-led

affinity groups and workforce

engagement opportunities.

Evolve

Continue to evolve as the

employer of choice in our

industry.

To attract, inspire and retain a

more diverse group of talent.

Celebrate

Celebrate our differences

and all that unite us.

Through earmarking key global

events that represent the breadth

of our workforce.

Partner

Partner with ‘like-minded’

organisations through inclusivity.

To drive necessary change

in the industry.

Diversity, equity and inclusion (DEI)

Our Inclusion Commitments bring together

what we are doing across Keller to build a more

diverse, equitable and inclusive workplace.

While gender equality and empowerment

remains a priority, we recognise and embrace

the broadest definition of diversity.

People

This is important because our employees

represent the broadest range of backgrounds,

cultures, experiences and insights. We believe

this is fundamental to the successful delivery

of our business strategy and to best serve our

customers around the globe.

Our Inclusion Commitments

ESG and sustainability continued

Keller Group plc Annual Report and Accounts 2022

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Page Title

Progress in 2022

Our focus on DEI during 2022 has been on

strengthening local accountability to embed the

right ambitions, behaviours and practices in the

company, whilst ensuring that our employees’

views are considered in all that we do.

Over the first half of the year, we held a number of workshops to

support management teams in developing their localised DEI action

plans. These ensure different parts of the business develop an

approach that maximises local impact.

We recognise that we still have a long way to go and are committed

to further progress based on learnings and feedback.

Diversity, equity and inclusion: Recent progress

Conscious

Leadership

• Workshops held to help business unit

teams develop local DEI action plans.

Plans are now in place for every business

unit in Europe and AMEA (with North

America leading this at divisional level).

• Started tracking gender diversity

statistics, including metrics around

hiring, promotion and retention rates.

• Following its success for the Executive

Committee, our reverse mentoring

programme was extended to the

European leadership team.

• AMEA’s Conscious Leadership

Programme has been extended to Keller

Australia and Austral, with ASEAN, India

and Middle East and Africa to follow.

Partner

• Raised awareness of the ‘Three

Barriers to Women’s Progression’

in conversation with Sharon Peake,

producer of the white paper.

• Increased the use of external search

companies to explore the wider market

for key vacancies, successfully recruiting

Athena Venios, business unit leader,

Keller Australia.

Listen

• Listening sessions with women working

on site continue with key themes being

embedded in localised action plans.

• Established new Keller Women in

Construction (KWIC) sub-committees

in North America focussing on

operations, welcoming and data.

Launched KWIC Europe SharePoint site

and webcast series in AMEA.

Evolve

• Refreshed our global PPE standard with

additional guidance for procurement

teams on how to source inclusive PPE

that meets the needs of a diverse

workforce.

• Nine students have benefitted from

our Pitcairn Geotechnical Leaders’

Scholarship that encourages more

exceptional, ambitious and diverse

students to pursue careers in

engineering.

Empower

• Many of our business units in AMEA have

started implementing flexible maternity

leave plans and flexible return-to-work

options for new mothers. Several are

also improving their paternity/parental

leave plans.

• All AMEA offices and sites (where

necessary) are now equipped with

female toilets and nursing rooms.

• Keller UK developed a menopause

policy, guidance for line managers, and

voluntary training.

Celebrate

• We continue to celebrate key global

events that represent the breadth of our

workforce, with sponsorship from our

Executive Committee.

• Keller UK won Managing Director of Year

2022 and HR Director/Manager of the

Year at the National Centre for Diversity

FREDIE awards.

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ESG and sustainability continued

People

Making the construction industry more inclusive

Keller UK has made great strides in recent

years to become one of the country’s

most inclusive workplaces.

This year, it became a double winner at the National Centre for

Diversity’s FREDIE Awards. Managing Director Bob Thompson

was announced as Board Member/Director of the Year, while

Amrit Ingham was awarded HR Director/Manager of the Year.

This is the fourth year running that the business unit has featured

in the Centre’s Top 100 Most Inclusive Workplaces. Keller rose 64

places this year, to 21st, and also earned prestigious Leaders in

Diversity status.

The recognition is a reflection of the journey Keller UK has been

on over the past few years and the wide-ranging diversity, equity

and inclusion (DEI) initiatives that continue to be implemented.

The business started with basic elements, such as policies and

procedures and gender pay gap reporting, before moving onto

things like mandatory DEI training, securing Level 2 Disability

Confident accreditation. They have also partnered with Mates in

Mind to deliver awareness training focused on promoting better

mental health, and nowhave more than 20 mental health first aiders.

Other steps the business unit has taken include working with

schools and universities to encourage a more diverse workforce

into the industry, promoting Keller Women in Construction,

supporting charities through community days, introduction

of home working, and providing physical, emotional and

psychological safety through its ‘Step Forward for Safety’ training.

More recently, the company has been looking at creating more

family-friendly work policies around maternity and paternity leave,

and is currently developing further DEI training.

All these efforts have had a positive impact on the workplace in

terms of attracting a more diverse workforce, fostering a supportive

environment and helping secure geotechnical contracts.

Case study

Employees

Different ethnicities Different nationalities

439

Ranked 21st

31 29

in the NCFD’s Top 100 Most

Inclusive Workplaces

It’s no secret that construction was behind other

sectors when it came to DEI, but we’re now making

progress, both as an industry and a company.”

Amrit Ingham

Head of HR and Training, Keller UK

64 Keller Group plc Annual Report and Accounts 2022

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Measuring and evaluating our success

To hold us accountable in our progress to achieving greater diversity

and inclusivity in the workplace, we believe transparency and

accountability are paramount.

At Keller, inclusion is primarily measured via engagement surveys

and focus groups and we continue to check in with colleagues to

understand whether our working environment is one where everyone

feels respected, accepted, supported and valued. The data points

below relate to inclusion and are based on surveys undertaken in

eleven businesses to date.

Keller respects

individual differences.”

I can voice a contrary

opinion without fear

of negative consequence.”

78%

70%

Representation matters and our ambition is to build more balanced

teams. We continue to measure and monitor gender diversity

throughout the organisation and identify specific activities that

will not only attract and retain a more diverse group of talent, but

continue to enhance our culture of inclusion.

Our inclusion and diversity data

Keller operates in an industry with a high number of men in engineering and

technical roles. To increase the proportion of women across the business,

we have accelerated our efforts to partner with local schools and universities

to encourage the emerging workforce to consider a career in geotechnics.

We have also engaged with our women who work on site through focus

groups to gain a deeper understanding of the benefits, barriers and possible

challenges they face on site. Outcomes have been shared with management

and, where appropriate, embedded in localised action plans.

Female representation

2022 2021

No % No %

Board members 3 43% 4 57%

Executive Committee 2 22% 2 18%

Global leadership team 7 13% 5 9%

Engineers 274 16% 200 13%

Engineering graduates

and apprentices 8 7% 20 13%

Total workforce 1,130 12% 1,061 11%

Notes:

• All data as at 31 December 2022.

• Global leadership team excludes Executive Committee members.

• Engineers includes Engineering, Project Management, Business Development and

Estimatingworkforce.

Our female diversity statistics show a slight increase in representation

within the global leadership team. This was due to an external appointment

and internal promotion. Representation in the engineering population

continues to increase year on year due to significant efforts with employee

referral programmes. While AMEA and Europe’s intake of engineering

graduates and apprentices has improved, North America’s intake

decreased significantly during the year due to a challenging talent market

with high competition. The division has specific actions in place for 2023 to

evolve as the employer of choice for a diverse group of talent.

Given the effort our teams have made to make Keller a far more

inclusive workplace, we hoped to have made greater progress in our

diversitystatistics.

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Gender pay gap

ESG and sustainability continued

People

Mean UK gender pay gap:

Median UK gender pay gap:

Mean bonus gender pay gap:

Median bonus gender pay gap:

23.1%

15.1%

37.9%

(2020/21: 17.7%)

(2020/21: 17.6%)

(2020/21: 47.8%)

Gender pay gap

Keller is committed to providing open and detailed information about its

gender pay gap. The results below pertain to Keller Limited, a UK subsidiary

of Keller Group plc.

The main factors affecting the increase in the mean gender pay gap

primarily relate to the significant increase in recruitment due to the High

Speed 2 mega-project, as well as the appointment of a Deputy General

Manager for the UK Business Unit to meet the need for increased

leadership capacity and planned succession for the Managing Director

role. This increase, driven by the scaling-up of the organisation as a whole

during a period of significant salary pressure due to HS2, supply constraints

due to external factors, as well as the specific effect of strengthening

towards the top of the organisation with experienced project managers.

The main factor effecting an erosion in the median pay gap in 2020

(recovering slightly in 2021) is the effect of furlough and redundancy in the

support organisation during the early stages of the pandemic which has a

higher weighting of female employees than the overall UK organisation.

There are a number of actions Keller Limited are taking to attract and

retain more women in the industry, including:

• Working with several universities, particularly those offering an MsC

in geotechnical engineering and Degree Apprenticeships in Civil

Engineering to attract young professionals to the sector.

• Collaborating with Europe’s Keller Women in Construction whose

purpose is to support our businesses with attracting, inspiring,

supporting and developing women.

• Partnering with Women in Construction to help raise awareness, share

best practice across the sector and inspire younger generations to

consider a career in geotechnics.

• Undertaking annual assessments to ensure gender pay parity.

• Maintaining Leaders in Diversity accreditation, which involves a rigorous

process to effectively demonstrate commitment to equality and

diversity in the workplace.

• Continuing to evolve as a Disability Confident Employer.

Collaborating for change with partners

Around the globe, Keller engages in meaningful partnerships to deliver on its diversity, equity and inclusion strategy.

(2020/21: 50.8%)

47%

66 Keller Group plc Annual Report and Accounts 2022

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Case study

Keller’s first Global Safety Week

Keller’s divisions and business units have held

their own safety days or weeks in the past.

Based on their success, and to have even more

impact, we involved everyone this year in our

first ever Global Safety Week.

The week was a chance to recognise the efforts to keep us injury free

and encourage everyone to continue to work together to get people

home safely, every day.

Throughout the week, leaders did more than 350 site visits to thank

teams personally for their contributions and encourage everyone to

continue to play their part in keeping teams safe.

Site teams took part in toolbox talks focused on our Stop Work Authority

- the right of anyone to stop work if they believe something is unsafe -

and health and wellbeing.

We also recognised and, via videos, celebrated our safety champions;

the people that take that extra step to support safety, regardless of

the job they do.

It doesn’t matter who we are, where we work, or what we

do, we all have a responsibility to stop work when things

don’t feel right. Safety Week was a great opportunity for

us to reinforce that.”

John Raine

Group HSEQ Director

of employees said they took

part in Global Safety Week

of employees said the week

increased awareness of safety

generally, and understanding

of Stop Work Authority in

particular

98%95%

Safety

At Keller we view safety as a value, something

we do not compromise. We have made

great strides increasing participation in our

leading indicators with a view to continuously

improving our Accident Frequency Rate (AFR)

and Total Recordable Incident Rate (TRIR).

Safety leadership at all levels of the organisation is our strength; this is

demonstrated through genuine and visible presence at our work sites,

which is an opportunity for site teams and management to discuss

and resolve issues. We set objectives and measure leadership visits

throughout the year; in 2022 we recorded 4,000 visits.

Ensuring our safety programmes are well designed and simple to use

is paramount to ensure everyone understands their role and personal

responsibilities. We continue to implement our field-based application

‘InSite’; this application enables ‘real time’ delivery of required safety

information to our site teams. This application is now in daily use

across North America and is being implemented in AMEA and Europe.

We continue to focus on our key risks, known as our Work Safe 6;

ensuring that we have consistent standards that are employed

consistently is central to our approach. In 2022 we developed an

induction programme to be used across the Keller Group that ensures

new employees are provided with fundamental training requirements

and understanding of our cultural expectations.

Our strong efforts on assurance continue; in 2022 we completed

close to 3,000 site and shop verifications. In 2023 we will double

down on this effort to ensure that key requirements are implemented

effectively in all locations.

Responding with urgency and understanding the cause of incidents

is an area that we have concentrated on over the years. Our incident

management process and subsequent incident review board process

ensures that we learn and share everything we can. In 2022 we put

additional emphasis on near miss reporting and saw the number of

reports increase by 50%. We view this as a very positive metric which

enables us to implement actions to prevent injuries from occurring.

The Group’s AFR for 2022 is at 0.1 per 100,000 hours. TRIR is at

0.79 per 200,000 hours.

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ESG and sustainability continued

People

Good health and wellbeing

Everything we achieve as a business is through

our people. Their safety, health and wellbeing is

at the heart of everything we do. And with strong

wellbeing foundations, we can keep our business

resilient and achieve sustainable success.

Community

“Being connected – building

positive relationships with each

other and our communities”

Mind

“Being emotionally healthy

and resilient – positive attitudes

to life and its challenges”

Growth

“Being empowered and supported in your career –

positive work experiences that produce pride,

fulfilment, meaning and happiness”

Body

“Being at your best physically

by keeping fit, eating and

sleeping well”

Financial security

“Being financially fit – managing

your money well for

greater security”

Our Foundations of Wellbeing

Our goal

To build a sense of belonging in

the workplace and create opportunities

for shared positive experiences

Our goal

To create an environment to support

everyone’s mental health and

resilience to life’s events

Our goal

To encourage career conversations

and growth opportunities that help

everyone reach their full potential

Our goal

To encourage balanced and

healthy lifestyles and the ability

to thrive in life

Our goal

To provide educational tools

and resources to help everyone

manage their day-to-day finances

and prepare for the future

In 2021 we developed ‘Our Foundations of Wellbeing’ which sets

out our approach to wellbeing at Keller. To equip our leaders with

the tools to carry out wellbeing in a strategic way, we also created a

wellbeing toolkit, based on best practice specific to our industry.

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We introduced two global

initiatives during 2022:

Wellbeing training for leaders

We believe leaders play a pivotal role in embedding a culture of

wellbeing in the organisation. During the year, our Group Head of

Talent and Diversity worked alongside CHX Performance to co-create

a leadership training programme. The programme is based on Our

Foundations of Wellbeing (Mind, Body, Growth, Community and

Financial Education) and incorporates specific wellbeing challenges

relevant to Keller and our industry. The programme was well received in

AMEA and Europe.

Global Health Challenge

We launched a Global Health Challenge which was an opportunity for

colleagues to participate in a team-based physical challenge. The aim

was to encourage balanced and healthy lifestyles and a greater ability

to thrive. As part of the programme, participants could also choose to

take part in personal mini challenges focused on how to stress less, go

device free, and manage on a budget.

Case study

We already have a strong, established culture

of keeping our people physically safe at Keller.

To build on this, we are increasing our focus on

our people’s health and wellbeing. This year, we

gave employees the chance to take part in VP

GO, a global health initiative.

The main part of VP GO is a team challenge – Destination GO. Employees

form teams of up to seven people. Every day over nine weeks, participants

record and enter their daily step count from walking or running (with

‘conversions’ for cycling, swimming etc) into the VP GO app or website.

The site adds individual step counts to their team’s total and converts

this to a kilometre/mile distance. It then plots the team’s progress along a

virtual tour of the world and shows how they’re doing compared to other

Keller teams.

The more active employees are, the further they go and the healthier they

become. As they progress, employees can also see how they’re doing

against other Keller teams and find out more about the places they’ve

reached.

As part of the programme, people can also take part in three, seven-day

personal mini health and wellbeing challenges, and get access to additional

resources, including an optional baseline health assessment online, daily

health and wellbeing cards, healthy habit tracking and peer to peer social

groups and challenges.

Some 1,500 employees took part in Destination GO, racking up 530 million

steps collectively and travelling 265,000 miles, virtually, from Canada to

Egypt and on to Australia.

New global health initiative

VP GO has encouraged many of our employees to put

greater focus on their physical and mental health and

wellbeing, and develop and maintain new positive

lifestyle habits.”

John Raine

Group HSEQ Director

We will continue to listen to our people via local

focus groups and engagement surveys to

understand whether we are making an impact

and adapt our approach to support our people

in the best possible way.

75%

My immediate manager(s)

genuinely cares about my wellbeing.”

Current Keller score:

Generally, I believe my workload

is reasonable for my role.”

Current Keller score:

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ESG and sustainability continued

People

Quality education

We invest in our people’s professional and

personal development and provide a challenging

environment for them to exercise their skills.

We also take a leadership role in our industry

and the communities in which we operate to

encourage personal and economic growth.

Learning and development programmes

Keller’s ability to deliver its business strategy depends on employees with

relevant skills, knowledge and experience. Our Group-wide learning and

development programmes promote a culture that empowers our people

to drive innovation and focus on Keller’s principal activities of winning and

executing work on behalf of clients.

North America has continued its commitment to employee development,

delivering a catalogue of courses focusing on leadership, technical and

sustainability training. An example of this includes the Project Manager

Academy programme where high potential colleagues enhance their

capability to improve execution leading to continued commercial

success. A key focus for 2022 has been the delivery of a carbon calculator

e-learning module to support our sustainability efforts, of which 868

completed the module. Our Leading for Results programme, which

challenges participants to lead effectively, develop talent and create clarity

in a complex market, was offered to our emerging leaders of the division.

Developing a well-established leadership pipeline remains integral

to Keller’s strategy. Alongside the delivery of technical and specialist

programmes, AMEA have focused their efforts on upskilling their

broader leadership team through the delivery of a Conscious Leadership

programme, designed to increase knowledge of personality differences

and raise self-awareness, and a new Manager programme, designed for

first time line managers.

At Keller, we recognise the significant role our managers play in cultivating

a culture of safety and wellbeing. In 2022, a new wellbeing training module

for line managers was developed and launched in AMEA and Europe. We

will continue to roll this out across Keller and look at effective ways of the

workforce benefitting from wellbeing investment.

Our Europe Division reactivated their pre-COVID-19 training programmes

holding a two-week face to face training session for senior leaders and

Finance for Engineers training. Keller’s Counsellor Sales Process which

seeks to increase the company’s capabilities in winning higher quality work

from our clients, together with Leadership on site, have also been delivered

online. Work on updating and improving commercial training has started,

introducing adaptive e-learning courses and a blended learning journey.

Further training courses are provided through the European Learning

Management Platform, via local trainings in local languages. Evaluations

show that all the offerings have been well received by participants and

have helped improve their skills. The divisional leadership team in Europe

took part in a reverse mentoring programme during 2022 to build on

their inclusive leadership skills. In addition, all leadership related training

programmes have been enhanced by adding DEI content.

Emerging talent

We are committed to developing our future talent pipeline of leaders and

investing in our people to ensure they are equipped with the skills to drive

the organisation forward within an ever-changing and complex market.

Our Unearthing Potential talent development programme enables us to

build this capability and to respond to the future needs of the business.

It also allows us to actively engage a diverse range of talent as well as

develop future leader learning for all.

During the year, we took on over 55 engineering graduates and provided

66apprenticeship and 70 intern and co-op opportunities across the Group.

Beyond emerging talent, Keller has focused on bringing people into

geotechnics from a wide range of backgrounds to ensure it has a healthy

pipeline of skills for the future. We continue to cultivate relationships with

key universities which provide opportunities to attract diverse talent. Over

the last four years, North America has seen progress year over year with

diversity hires. Our diversity intake for entry-level engineering continues to

grow due to our continued partnerships/relationships at universities that

represent many unrepresented minorities. During 2022, we established a

5% increase overall for Hispanic hires for entry-level full-time engineers,

interns and co-ops, and a 5% increase of entry-level full-time female hires.

A major factor in the increase is our continued success at targeting and

following through on our DEI initiatives, established employee resource

groups that partner with recruiting, and continued success to enhance

ourbenefits to attract diverse employees around North America.

70 Keller Group plc Annual Report and Accounts 2022

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The Pitcairn Geotechnical Engineering Scholarship, designed to

attract the best geotechnical engineers, gives us the opportunity

to not only strengthen our future talent pipeline, but to improve

diversity at Keller by attracting individuals from under-represented

minority groups.

Global product teams

Keller’s global product teams focus on sharing product-specific

knowledge around the world through the delivery of a monthly

educational webcast, making sure we are best equipped to offer safe,

productive, market-leading technologies to our customers.

During 2022, we evolved the network to have smaller global product

teams and new divisional product teams in our North America and

Europe divisions, more closely aligned to local operations and focused

on local priorities. This has enhanced the teams’ ability to be more

innovative, improve ways of working and to contribute more effectively

to technical digitisation and sustainability initiatives.

Geotechnical community

In addition to supporting our existing talent, Keller proactively

supports the future skills agenda for the geotechnical industry.

Our businesses take a leadership role by providing employees,

customers, suppliers and potential employees with technical papers,

seminars, field trips and site visits. Staff from companies throughout

the Group maintain close contact with partner universities to share

best practice and undertake research projects to develop new and

innovative products, materials and design approaches.

Case study

Keller showed the industry its commitment to

a more sustainable future, with presentations

at this year’s International Conference on Deep

Foundations and Ground Improvement in Berlin.

Smart Construction for the Future was the topic of this year’s conference

run by the European Federation of Foundation Contractors (EFFC), and its

American counterpart, the Deep Foundations Institute (DFI).

The three-day event at the University of Berlin saw presentations from

geotechnical companies, general contractors and manufacturers on

topics ranging from advances in ground improvement techniques, to

smart monitoring and new technologies.

One of those presenting on behalf of Keller was Kimberly Martin, Senior

Engineer for Innovation and Sustainability in North America, who also sits

on the DFI’s sustainability committee.

“Although a lot of great work is being done across the industry when it

comes to sustainability, there are still companies who aren’t really sure how

or where to start,” she says. “This was a chance for organisations like Keller

to talk about what they’re doing and share their progress.

“Keller is serious about sustainability and we’ve done a lot of great things

we should be proud of, so showing what we’ve done at events like this is

important. Being here also means we can keep our fingers on the pulse

and learn from others.”

Also in attendance was ASEAN’s Managing Director, Deepak Raj, who was

at the conference to talk about how engineers in ASEAN have embraced

the EFFC/DFI carbon calculator. Using a large energy-sector project in

Singapore as an example, he explained how the calculator demonstrated

how Keller had cut emissions by more than 90% by using an alternative

ground improvement foundation and deep vibro techniques.

“We’re making a conscious effort to educate the market. Most of our

engineers in ASEAN are now trained in using the calculator, so every

tender shows clients the carbon footprint of the current and alternative

solutions for a design-build proposal,” he says.

As for why he feels being at the conference matters: “As a market leader,

it’s important we’re in the front seat, to showcase what we’re doing but

also to see which way the industry is going, to hear from others in the value

chain and to be aware of what innovations are coming through.”

Showcasing Keller’s

commitment to sustainability

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ESG and sustainability continued

Principles

Good governance

Good governance is about balancing the needs

of stakeholders and helping to run the company

well through efficient processes and decision

making. It involves being satisfied that an

effective internal framework of systems and

controls is in place which clearly defines authority

and accountability and promotes success whilst

permitting the appropriate management of risk.

Human rights

Keller expects all employees and suppliers to adhere to international

standards on human rights, including with respect to child and forced labour,

land rights and freedom of association, among other elements. We take a

zero-tolerance approach to slavery and human trafficking and are strongly

committed to ensuring that all employees, as well as the people who work

on our behalf, are protected. Our full expectations are included in our Supply

Chain Code of Business Conduct and modern slavery and human trafficking

statement, which are available on our website. We conduct appropriate due

diligence on our partners, and all of our suppliers are obliged to adhere to the

principles set out in the Code, including on human rights.

Anti-bribery and corruption

Keller’s Anti-Bribery and Anti-Fraud Policy and whistleblowing procedures

are designed to ensure that employees and other parties, including

contractors and third parties, are able to report any instances of poor

practice safely through an independent organisation.

All reports received via this or any other reporting mechanism are

thoroughly investigated and reported to the Audit and Risk Committee,

which reviews each case and its outcomes. None of our investigations

during 2022 identified any systemic issues or breaches of our obligations

under the Bribery Act 2010. The Anti-Bribery and Anti-Fraud Policy is

supported by periodic audits and reminders and was reviewed during the

year to reinforce the processes around fraud.

Disappointingly, we finished the financial year with the announcement in

January 2023 regarding the financial reporting fraud in the Austral business in

Australia (AMEA). The specific incident has been forensically investigated by

PwC. In the follow-on actions, management commissioned an independent

review of the operation of our financial reporting controls across the rest of

the Group. More detail on our actions on this matter is available on page 107 of

the Audit and Risk Committee report.

Governance and oversight

We recognise that assurance over our business activities and those of

our partners and suppliers is essential. In 2022 our employees completed

mandatory training on competition law compliance, data privacy and

the Code of Business Conduct. You can read more about our risk

management framework and principal risks from page 34 onwards.

In addition we are pleased to have been collaborating with employers across

different sectors since 2020 to develop a Governance Officer Apprenticeship

Standard in the UK. We expect the standard to be approved in 2023.

Tax strategy

We publish our tax strategy on our website and are committed to

managing our tax affairs responsibly and in compliance with relevant

legislation. Our tax strategy is aligned to our Code of Business Conduct

and Keller’s values and culture, and is owned and approved by the Audit and

Risk Committee and the Board annually.

Keller’s ways of working

Our Code of Business Conduct (‘Code’) sets out clear and common

standards of behaviour for everyone who works in and with Keller, as

well as a framework to guide decision-making when situations aren’t

clear-cut. It also ensures a positive culture that keeps us successful,

operating in a way that we can all be proud of. It is a public statement

of our commitment to high standards that tells others they can rely

on our integrity.

The Code is supported by our Group policies, our modern slavery

and human trafficking statement for 2023, our tax strategy and our

Supply Chain Code of Business Conduct.

Our ethics and compliance programme is now in its seventh year of

supporting our employees doing the right thing, which comprises

training of our employees across the business by: maintaining ethical

and honest behaviour, respecting employees’ rights and diversity, and

staying free from bribery and corruption.

During 2022 and the beginning of 2023 we ran tailored directors’

duties training in Europe and AMEA. We did this as we appreciate the

important role those colleagues who serve on subsidiary boards play in

protecting their companies and the Group’s reputation and in leading

by example and promoting our values. Overall, we provided training to

more than 70 colleagues.

Keller’s Code of Business Conduct and Group policies can be found

at: www.keller.com under ‘How we work’

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Case study

Below: Nine-year-old Artem helping volunteers at UNICEF’s

Blue Dot Centre in Brasov having fled his home in Odessa, Ukraine.

Credit: UNICEF / Adrian Catu

Partnerships

At Keller, we recognise the importance

of collaborating with organisations that

understand our values and commitments,

and the ways of working and the standards

by which we operate. Partnering with these

‘like-minded’ organisations helps us drive

change in our organisation and the wider

geotechnical industry.

Industry partnerships

Many of our senior managers play key roles in the geotechnical

professional associations and activities around the world.

In Europe, a number of employees are part of the European Federation

of Foundation Contractors (EFFC), which is also chaired by Andreas

Körbler from Keller. In Keller North America, employees are active

participants in geotechnical engineering and construction trade groups,

including the Deep Foundations Institute (DFI), ASCE/Geo-Institute

and ADSC International Association of Foundation Drilling. Our North

American engineers also hold leadership positions on multiple national

technical committees (including committees on sustainability) and local

and university chapters; many have served as members of the board of

directors for these organisations.

Finally, in AMEA, Keller plays an important role in the local professional

societies, with Keller employees holding leading positions in multiple

trade associations, including in ASEAN and India.

We also support trade conferences across our divisions, including the

combined American and European trade conference.

Sustainability is an increasing focus in the industry. We work with a

number of universities on sustainability initiatives, focusing on whole-

company innovation, specific geotechnical products like grouting and

vibro stone columns, and key geotechnical projects.

We wrote the sustainability overview for the European Federation of

Foundation Contractors and helped with the drafting of the American

DFI sustainability guide.

We are also helping to compile sustainability best practice guides with

the European and American trade associations.

Charitable partnerships

Our business units support a broad range of groups and charities,

depending on what is most important to them locally. This may involve

fundraising or donating money, time or skills.

In recognition of the continued global challenges faced by our

communities, we announced a new three-year partnership with UNICEF,

starting with a funding contribution of £250,000 in 2022 towards its Core

Resources for Children.

We again supported The Brilliant Breakfast in 2022 with a donation

of £10,000. Working with The Prince’s Trust, this UK initiative aims to

change the lives of young women by helping them gain the skills needed

to live, learn and earn. More information on this can be found in the

report of the Social and Community Committee on page 97.

After donating £300,000 to their COVID-19

vaccines appeal in 2021, Keller has now formed a

three-year partnership with UNICEF UK, starting

with a funding contribution of £250,000 in 2022.

UNICEF works in more than 190 countries and territories, including

some of the world’s toughest places to reach. Keller’s funding is without

restrictions and can be used flexibly by UNICEF for children and their

families wherever and whenever the need is greatest.

Many of the problems facing children are interconnected; for example, a

hungry child will have difficulty learning at school and a child without access

to clean water is more likely to suffer from disease. UNICEF therefore

supports across the entire lifecycle of a child.

Interconnected problems require interconnected solutions. UNICEF

designs solutions to respond to the experience of every child. It aims to

ensure children survive and thrive, and are able to contribute to their family,

community and society.

This approach aligns well with Keller’s own focus on the UN Sustainable

Development Goals and in particular in the areas of good health, quality

education and gender equality.

Keller extends partnership

with UNICEF

For over 75 years UNICEF has responded to emergencies,

doing whatever it takes to reach children all around the

world to ensure children can fulfil their potential and grow

up healthy and safe. Keller is proud to support UNICEF’s

work in providing life-saving aid to millions of children

facing terrible conflicts and disasters at this time in

countries such as Ukraine, Turkey and Syria.”

Kerry Porritt

Group Company Secretary and Legal Advisor

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Non-financial reporting statement

Pursuant to the Non-financial Reporting Regulations, which apply to the Group, the tables

below summarise where further information on each of the key areas of disclosure can be found.

Further disclosures, including our Group policies, can be found on our website at www.keller.com.

Description of our business model

Business model

See pages 12 and 13

Our strategy

See pages 20 and 21

The main trends and factors likely to affect the

future development, performance and position

of the Group’s business

Our market

See pages 10 and 11

Divisional reviews

See pages 22 to 27

Description of the principal risks and any

adverse impacts of business activity

Principal risks and uncertainties

See pages 34 to 43

Non-financial key performance indicators

Customer satisfaction

See page 13

Safety, good health and wellbeing

See pages 67 to 69

Gender diversity

See pages 65 to 66

Greenhouse gas emissions and energy

See page 58

Reporting requirement Relevant section of this report

Reporting requirement

Policies, processes and standards

which govern our approach¹

Risk management

Embedding due diligence, outcomes of

our approach and additional information

Environmental

matters

ESG and sustainability

See pages 52 to 76

Climate change

See page 40

Ethical misconduct and

non-compliance with regulations

See page 39

Losing market share

See page 38

Inability to maintain technological

product advantage

See page 39

Our market

See pages 10 and 11

Divisional reviews

See pages 22 to 27

Greenhouse gas emissions and

energy data, trend analysis and

assurance

See pages 58 to 60

Environment Committee report

See pages 94 and 95

Section 172 statement

See pages 86 and 87

Employees HR Policy

Code of Business Conduct

Whistleblowing Policy

Wellbeing Foundations

ESG and Sustainability Policy

ESG and sustainability

See pages 52 to 76

Serious injury or fatality to

employees or a member of the public

See page 42

Ethical misconduct and

non-compliance with regulations

See page 39

Not having the right skills to deliver

See page 42

Climate change

See page 40

Diversity, equity and inclusion

See pages 62 to 66

Training and development

See pages 70 and 71

Health and wellbeing

See pages 67 and 68

Employee engagement

See page 67

Section 172 statement

See pages 86 and 87

Social and Community

Committee report

See pages 96 and 97

74 Keller Group plc Annual Report and Accounts 2022

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Non-financial reporting statement

Reporting requirement

Policies, processes and standards

which govern our approach¹

Risk management

Embedding due diligence, outcomes of

our approach and additional information

Social and

community

matters

Code of Business Conduct

Wellbeing Foundations

ESG and Sustainability Policy

ESG and sustainability

See pages 52 to 76

Procurement Policy

Supply Chain Code of Business

Conduct

Ethical misconduct and

non-compliance with regulations

See page 39

Climate change

See page 40

Business model

See pages 12 and 13

Divisional reviews

See pages 22 to 27

Safety, good health and wellbeing

See pages 67 to 69

Social and Community

Committee report

See pages 96 and 97

Section 172 statement

See pages 86 and 87

Human rights Code of Business Conduct

Supply Chain Code of Business

Conduct

Modern slavery and human

trafficking statement

Wellbeing Foundations

ESG and Sustainability Policy

Ethical misconduct and

non-compliance with regulations

See page 39

Serious injury or fatality to

employees or a member of the public

See page 42

Climate change

See page 40

Safety, good health and wellbeing

See pages 67 to 69

Social and Community

Committee report

See pages 96 and 97

Section 172 statement

See pages 86 and 87

Anti-corruption

and anti-bribery

Anti-Bribery and Anti-Fraud Policy

Competition Law Compliance Policy

Conflicts of Interest Policy

Whistleblowing Policy

Ethical misconduct and

non-compliance with regulations

See page 39

Principles

See page 72

Audit and Risk Committee report

See pages 101 to 107

1 Some policies, processes and standards shown here are not published externally.

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GRI index

To facilitate access to information for our stakeholders, the following table indexes the information

relevant to the GRI Standards’ General Disclosures, with which the Group aims to align its activities.

Further disclosures, including Group policies and standards referenced below, can be located on our

website at www.keller.com.

Disclosure Page Comments

2-1 Organisational details Note 1 on page 143, 22–27

2-2 Entities included in sustainability reporting Note 9 on page 199, 58

2-3 Reporting periods, frequency and contact

point

2-4 Restatement of information 76

2-5 External assurance 58 Practice for seeking

assurance not disclosed

2-6 Activities, products, services and markets

served

2–3, 10–12, 22, 24, 26 Entities up and

downstream not disclosed

2-9 Governance structure and composition 80–93

2-10 Nomination and selection of highest

governance body

91, Nomination and Governance Committee terms of

reference, Board Diversity Policy

2-11 Chair of highest governance body 80

2-12 Role of highest governance body in

overseeing management of impacts

44, 85, 88–91 Management of impacts

not disclosed

2-13 Delegation of responsibility for managing

impacts

44, Environment and Social and Community Committees

terms of reference

2-14 Role of the highest governance body in

sustainability reporting

34–35, 44, 52, 90

2-15 Conflicts of interest 80–81, 85

2-17 Collective knowledge of the highest

governance body

2-19 Remuneration policies 112, 114, 120, 60 and 115 (for Scope 2 reduction objective),

Remuneration Policy (Keller website)

2-20 Process to determine remuneration 110–112

2-21 Annual total compensation ratio 118–119

2-22 Statement of sustainable development

strategy

52–55

2-23 Policy commitments 72, 74–76 , supporting policies on Keller website

2-26 Mechanisms for seeking advice and raising

concerns

72, 74 –75 Wider channels to report

concerns not disclosed

2-27 Compliance with laws and regulations 93

2-28 Membership associations 73 Select list of partnerships

disclosed

2-29 Approach to stakeholder engagement 79, 86–87, 96–97

Some policies, processes and standards shown are not published externally.

General Disclosures

GRI 2: General Disclosures

The Strategic report has been approved, authorised for issue and

signed by order of the Board by:

Kerry Porritt

Group Company Secretary and Legal Advisor

10 March 2023

Sustainability reporting period

The collated information on sustainability was aligned to the financial

reporting period of 1 January to 31 December 2022, in correspondence

with GRI disclosure 2-3.

Restatements

Pursuant to GRI disclosure 2-4, there were no restatements of

sustainability information during the reporting period.

For further queries relating to the reported information on sustainability,

please contact secretariat@keller.com.

76 Keller Group plc Annual Report and Accounts 2022

Strategic report

GRI index

Governance and

Financial statements

Governance

78 Chairman’s introduction

80 Board of Directors

82 Executive Committee

84 Board leadership

86 Section 172 statement

88 Governance framework

92 Board composition, succession andevaluation

94 Environment Committee report

96 Social and Community Committee report

98 Nomination and Governance Committee report

101 Audit and Risk Committee report

108 Annual statement from the Chair

ofthe Remuneration Committee

110 Remuneration in context

112 Remuneration at a glance

114 Annual remuneration report

122 Directors’ report

125 Statement of Directors’ responsibilities

Financial statements

126 Independent auditor’s report to

the members of Keller Group plc

138 Consolidated income statement

139 Consolidated statement of comprehensive income

140 Consolidated balance sheet

141 Consolidated statement of changes inequity

142 Consolidated cash flow statement

143 Notes to the consolidated financial statements

194 Company balance sheet

195 Company statement of changes inequity

196 Notes to the company financial statements

Other information

203 Adjusted performance measures

206 Financial record

207 Contacts

208 Cautionary Statement

Strategic report Governance Financial statements

Strategic report Governance

Governance

Page Title

Chairman’s introduction

Dear shareholder

On behalf of the Board, I would like to introduce

our Governance report for the year ended

31 December 2022. This report sets out our

approach to effective corporate governance

and outlines key areas of focus of the Board and

its activities undertaken during the year as we

continue to drive long-term value creation for

all our stakeholders.

During 2022, I visited our operations in North

America, the UK, the Middle East, Singapore

and Australia, where I have gained first-hand

insight from our local management teams

and colleagues about the opportunities and

challenges they face. I am very grateful to all

the colleagues and stakeholders who have

taken time to speak with me during the year

and to share their knowledge and insights.

This knowledge is essential to ensure that I can

continue to lead the Board effectively and create

the right conditions to enable us to deliver on

our strategy of sustainable growth.

Board succession and diversity

On 1 February 2022, we welcomed Juan

G. Hernández Abrams to the Board as an

independent Non-executive Director. Juan was

appointed Chair of the Environment Committee

in May 2022. Juan brings rich and diverse

experience to the Board and we have greatly

appreciated his early contributions to our Board

decision-making.

Nancy Tuor Moore retired from the Board in May

2022. The Board and the wider Group benefitted

greatly from her extensive knowledge and

experience, particularly of the US engineering

and construction sector, and we wish her well in

her future ventures.

I reported last year that we had met the targets

set out in our Board Diversity Policy. In 2022

we met the targets set by the FTSE Women

Leaders Review, the Parker Review and the

targets specified in recent updates to the FCA’s

Listing Rules, which Keller will report against

in 2023. The Board and the Nomination and

Governance Committee will continue to drive

the agenda of diversity, equity and inclusion

across the Group.

Company purpose and culture

In early 2023, we were immensely disappointed

to announce a financial reporting fraud at one

of our business units in Australia. It had no

impact on cash but nonetheless a reminder for

the Board and management to continue to be

vigilant in our supervision and stewardship roles,

continually evaluating and improving all that we

do across the Group.

We will continue as a

Board to maintain the

highest standards of

corporate governance

across the Group.”

The company was subject to the Code in

respect of the year ended 31 December

2022 (the full text of which can be found

at www.frc.org.uk). The Board is pleased

to confirm that the Group applied the

principles and complied with the provisions

of the Code.

The remainder of this report contains the

narrative reporting variously required by the

Code, the Listing Rules and the Disclosure,

Guidance and Transparency Rules, setting

out in greater detail the framework and

processes that Keller has in place to ensure

the highest levels of corporate governance.

Compliance with the Code

Board leadership and

company purpose

Audit, risk and

internal control

Division of

responsibilities

Remuneration

Composition, succession

and evaluation

For more information see pages 18 and 84

For more information see page 95

and the Audit and Risk Committee report

For more information see page 92

For more information see page 91

For more information see the Directors’

remuneration report

Peter Hill CBE

Chairman

78 Keller Group plc Annual Report and Accounts 2022

Governance

Chairman’s introduction

The Board is responsible for setting the tone

from the top and promoting a culture which

creates a positive work environment where

everyone feels respected, motivated and able

to thrive. Our employees are essential for the

delivery of our strategic objectives and our

continued success. Their feedback is critical

to the Board and we continue to monitor our

culture through surveys, town-hall sessions and

formal and informal engagement activities.

Engagement with our stakeholders

Stakeholder engagement is critical to the

long-term success of our business; the art

of balancing different stakeholder views and

needs in Board discussions and decision-

making is key. The role of our designated

workforce engagement director has been

in place since 2017 and, supported by the

Social and Community Committee, continues

to be a successful way of ensuring that the

Board appropriately considers the interests of

employees in its deliberations and, in doing so,

makes better decisions.

Last year, I reported that we had commissioned

an independent perception audit of a number of

investment managers. The outcome has been

invaluable in affording the Board a deeper level of

understanding of the views of our shareholders

and potential investors whilst giving the

executive management additional input as they

formulate the strategy for the years ahead.

Board evaluation

It is extremely important that the Board, its

committees and individual Directors rigorously

review their performance and embrace the

opportunity to develop, where necessary. In

2020 and 2021, I reported that an external

effectiveness review had been undertaken with

support from the Group Company Secretary

and Legal Advisor. In 2022, we have actively

progressed the areas of focus identified, further

detail of which can be found on pages 92 and

93. An internal review of the effectiveness of

the Board and its committee’s will be facilitated

by the Group Company Secretary and Legal

Adviser during 2023.

In 2022 we…

February

Enhanced Board composition through the

appointment of Juan G. Hernández Abrams

as Non-executive Director and Chair of the

Environment Committee.

May

Strengthened Board effectiveness and

competence on climate change by attending

an externally facilitated training session on

climate matters, TCFD and the audit and

corporate governance reform.

July

Approved our approach to our second year

of reporting under TCFD, which included

scenario analysis.

August

Announced a three-year partnership with

UNICEF, starting with a funding contribution

of £250,000 towards its Core Resources

forChildren.

October

Carried out two site visits in New York to feel

the operational environment and enhance

understanding of employees’ experience of

their working environment.

November

Announced an increase in the 2022 final

dividend, in recognition of the importance

of capital returns to our shareholders.

Peter Hill CBE

Chairman

Approved by the Board of Directors and

authorised for issue on 10 March 2023

Yours faithfully

Highlights

For more information see pages 94, 95 and 100

For more information see pages 44 to 51

For more information see page 73

For more information see page 31

Looking forward

We will continue as a Board to maintain

the highest standards of corporate

governance across the Group, focus on

delivery of our strategy and evaluate and

improve all that we do across the Group.

I encourage all our stakeholders to take

every opportunity presented to engage

with the company and I would welcome

you to attend, and in any case vote at,

the forthcoming AGM. Needless to say,

that if we cannot meet in person in May,

if you wish to ask a question of the Board

relating to this report or the business

of the AGM, please feel free to do so by

emailing the Group Company Secretary

and Legal Advisor at secretariat@keller.

com. We will consider and respond to all

questions received and, to the extent

practicable, publish the answers on

ourwebsite.

As I look forward to the year ahead,

Iwould like to take the opportunity to

thank my colleagues on the Board and

across the business for their continued

hard work and dedication.

Strategic report Governance Financial statements

Governance

Page Title

Board of Directors

Chairman Executive Directors Non-executive Directors

Michael Speakman

Chief Executive Officer

David Burke

Chief Financial Officer

Baroness Kate Rock

Senior Independent Director

and designated Non-executive

Director with responsibility for

workforce engagement

Peter Hill CBE

Non-executive Chairman and

designated Director for ESG

and sustainability matters

Skills and experience:

Michael joined Keller from Cape

plc, a leading international provider

of industrial services, where he

was Chief Financial Officer. He has

over 30 years of experience across

a range of industries, holding

senior operational, divisional and

corporate roles within TI Group plc

and Smiths Group plc between

1982 and 2004, before his

appointment as Chief Financial

Officer for the oilfield services

company Expro International

Group plc. Michael holds a BSc in

Engineering and is a Fellow of the

Chartered Institute of

Management Accountants.

Skills and experience:

David is a highly experienced

finance executive who has worked

in a variety of industries and

geographies over the last 30

years. Most recently he was Chief

Financial Officer of J. Murphy &

Sons Limited, a leading

international specialist

engineering and construction

company. He has held senior

finance roles at Serco Group plc

and at Barclays plc.

David trained as an accountant

with KPMG in London and is a

Fellow of the Institute of

Chartered Accountants in

England and Wales.

Skills and experience:

Kate was a Non-executive

Director and Chairman of the

Remuneration Committee of

Imagination Technologies plc, the

former global FTSE 250 high

technology company, until

November 2017. She is a Board

member of the world’s first Centre

for Data Ethics and Innovation.

She sat on the House of Lords

Science and Technology Select

Committee until the end of

January 2023 and from 2017 to

2018 was a member of the House

of Lords Select Committee on

Artificial Intelligence. Kate was a

partner at College Hill for 12 years

from 1996 and was Vice-

Chairman of the Conservative

Party with responsibility for

business engagement until July

2016. She holds a BA in Publishing

and History.

Other appointments:

Kate is the Non-executive Chair

of Costain Group Plc and a

Non-executive Director of

Unbound Group plc. She is also

a Director and Trustee of The

Prince’s Countryside Fund. She was

appointed a Life Peer in 2015 and is

also a Senior Adviser at Instinctif

Partners and at Newton Europe.

Skills and experience:

A mining engineer by background,

Peter was Non-executive Chairman

of Volution Group plc until January

2020; Non-executive Chairman of

Imagination Technologies plc from

February 2017 until its sale to Canyon

Bridge Partners in September 2017;

Non-executive Chairman of Alent plc

from 2012 to the end of 2015; Chief

Executive of the electronics and

technology group Laird PLC from

2002 to late 2011 and a Non-

executive Director on the boards of

Cookson Group plc, Meggitt plc and

Oxford Instruments plc. He has been

a non-executive board member of

UK Trade and Investment, and a

Non-executive Director on the board

of the Royal Air Force, chaired by the

UK Secretary of State for Defence.

His early career was spent with

natural resources companies Anglo

American, Rio Tinto and BP; he was

an Executive Director on the board of

the engineering and construction

company Costain Group plc, and he

has also held management positions

with BTR plc and Invensys plc.

Other appointments:

Peter is the Non-executive

Chairman of Petra Diamonds

Limited.

Nationality: British

Appointed:

2018 and CEO in 2019

Nationality: Irish

Appointed:

2020

Nationality: British

Appointed:

2018

Nationality: British

Appointed:

2016

80 Keller Group plc Annual Report and Accounts 2022

Governance

Board of Directors

Non-executive Directors Secretary

Paula Bell

Non-executive Director

Juan G. Hernández

Abrams

Non-executive Director

Eva Lindqvist

Non-executive Director

Skills and experience:

Paula has extensive FTSE 250

board experience as both an

Executive and Non-executive

Director. From 2013 to 2016 she

was Chief Financial Officer of

support services group John

Menzies plc and between 2006 and

2013 was Group Finance Director

of the advanced engineering group

Ricardo plc. Prior to that Paula held

senior management positions at

BAA plc, AWG plc and Rolls-Royce

plc. Paula was a Non-executive

Director and Chairman of the Audit

Committee of the global

engineering and technology group

Laird PLC from 2012 until its

acquisition and delisting in July

2018, including a period as Senior

Independent Director.

Paula is a Fellow of the Chartered

Institute of Management

Accountants and a Chartered

Global Management Accountant.

Other appointments:

Paula is the Chief Financial and

Operations Officer of Spirent

Communications plc.

Skills and experience:

Juan has served in multiple senior

roles with Fluor Corporation,

including General Manager and

Vice President of the Mining and

Metals business in South America,

as well as President of the

Industrial Services business

including the Operations and

Maintenance group. His

responsibilities included the

strategic direction, operations and

financial performance across a

wide range of industries and sites

throughout Europe, the USA, Asia,

Australia and the Middle East.

Juan was born and raised in Puerto

Rico and holds a Bachelor’s degree

in Environmental Sciences from

the University of Maine. He is a

graduate of Thunderbird

University International

Management Program, the

INSEAD International Competitive

Strategy Program, and the London

Business School’s International

Business Program.

Other appointments:

Juan is President of Fluor

Corporation’s Advanced

Technologies & Life Sciences

business. He is a member of the

Board of Directors for the US

National Association of

Manufacturers.

Skills and experience:

Eva graduated with a Master of

Science in Engineering and

Applied Physics from Linköping

Institute of Technology and holds

an MBA from the University of

Melbourne. She is a member of

the Royal Swedish Academy of

Engineering Sciences. Eva began

her career in various positions with

Ericsson working in Continental

Europe, North America and Asia

from 1981 to 1990 followed by

director roles with Ericsson from

1993 to 1999. She joined

TeliaSonera in 2000 as Senior

Vice President before moving to

Xelerated, initially as Chairperson

and later as Chief Executive from

2007 to 2011.

Other appointments:

Eva is a Non-executive Director

of Bodycote plc, Tele2 AB and

Greencoat Renewables plc.

Nationality: British

Appointed:

2018

Nationality: American

Appointed:

2022

Nationality: Swedish

Appointed:

2017

Keller committees:

Nomination and Governance

Audit and Risk

Remuneration

Environment

Social and Community

Executive

Denotes Chair

Kerry Porritt

Group Company Secretary

and Legal Advisor

For full biography see page 83

Strategic report Governance Financial statements

Governance

Page Title

Executive Committee

Jim De Waele

President, Europe

Eric Drooff

President, North America

Peter Wyton

President, AMEA

Nationality: British

Member since:

2018

Nationality: American

Member since:

2018

Nationality: Australian

Member since:

2018

Michael Speakman

Chief Executive Officer

For full biography see page 80

David Burke

Chief Financial Officer

Keller committees:

Disclosure

Bank Guarantees and Facilities

Safety Leadership

Share Plans

Sustainability Steering

Treasury

Denotes Chair

Skills and experience:

Eric is the President of Keller in

North America, which includes the

geotechnical and foundation

companies of Keller as well as

Geo-Instruments, Moretrench

Industrial, RECON, and Suncoast

Post-Tension.

Eric holds a BSCE from Bucknell

University and has been involved in

the design and construction of

foundation and ground stabilisation

projects for over 30 years. He is a

member of the ASCE Geo Institute

where he currently serves as a

member of the Grouting

Committee, he is a past Chairman

of the ASTM D1816 Grouting

Committee, and is a member of the

Deep Foundations Institute, and

The Moles. Notable projects

managed by Eric include North

America’s first compensation

grouting project at the St. Claire

River Tunnel in Sarnia, Ontario,

compaction grouting for seismic

mitigation for the Paiton Power

Station in Java, Indonesia, and

chemical grout ground stabilisation

for the CA/T, C11A1, Atlantic

Avenue Tunnel. He has authored

numerous papers and frequently

presents on specialised

geotechnical construction.

Skills and experience:

Before his appointment as

President, Europe in January

2021, Jim was Group Strategy and

Business Development Director

from January 2019 until

December 2020. Jim has over 30

years’ experience in the industry

and has held various senior

positions, including 10 years as

Managing Director of Keller’s

North-West Europe business. He

has served the UK trade

association, the Federation of

Piling Specialists, for many years,

including two as Chairman.

Jim is a Chartered Engineer, a

fellow of the ICE and RICS. He is

also an honorary professor at the

University of Birmingham.

Skills and experience:

Peter joined Keller after 25 years

at AECOM, a leading global

infrastructure firm. He is an

experienced business leader and

engineering professional with

extensive knowledge of the

Asia-Pacific region. He has

supported the delivery of major

infrastructure projects in

transport, building, utilities, mining

and industrial markets across

APAC. Peter received a Bachelor

of Civil Engineering from the

Queensland University of

Technology.

82 Keller Group plc Annual Report and Accounts 2022

Governance

Executive Committee

Former member

John Raine

Group HSEQ Director

Kerry Porritt

Group Company Secretary

and Legal Advisor

Venu Raju

Engineering and

Operations Director

Katrina Roche

Chief Information Officer

Nationality: British

Member since:

2018

Nationality: British

Member since:

2013

Graeme Cook

Group People Director

Nationality: British

Graeme was the Group People Director from 2018 and he stepped

down in September 2022.

Nationality: Singaporean

Member since:

2012

Nationality: British

Member since:

2020

Skills and experience:

Venu began his career with Keller

in Germany in 1994 as a

geotechnical engineer. He has

held the roles of Managing

Director Keller Singapore, Malaysia

and India; Business Unit Manager,

Keller Far East in 2009; and

Managing Director, Asia. Venu has

extensive operational and

strategic management

experience. He served as an

Executive Director from January

2017 until June 2020.

Born in India, Venu studied civil

engineering in India and the USA,

has a PhD in structural engineering

from Duke University and a

Doctorate in geotechnical

engineering from the University of

Karlsruhe in Germany.

Skills and experience:

Kerry has over 25 years’ experience

of company secretarial roles within

large, complex FTSE listed

companies across a broad range of

sectors. Kerry is a Fellow of the

Chartered Governance Institute

and holds an Honours degree in

Law. Kerry is a member of the

European Corporate Governance

Council and the Chartered

Governance Institute’s Company

Secretaries’ Forum, and an

Ambassador for Women

Supporting Women, a group

enabling The Prince’s Trust to

support more young women

through its programmes.

Kerry has been Keller’s Group

Ethics and Compliance Officer

since 2015.

Skills and experience:

John is an experienced HSEQ

practitioner who has lived and

worked in Europe, Asia-Pacific and

the US. He was, most recently, at

AMEC Foster Wheeler, an

international engineering and

project management company,

where he was Chief HSSE Officer.

Before that, he was Vice President

QHSSE for Weatherford

International, one of the world’s

largest multinational oil and gas

service companies.

Skills and experience:

Katrina has over 25 years of

experience in delivering

technology-driven change and

business transformation in

multiple industries such as

Aerospace Defence,

Telecommunications, Transport

and Technology. She joined Keller

from Cobham Plc, where she held

the position of Executive Vice

President IT. Katrina has also held

senior IT roles in Raytheon,

Systems Union and MCI

WorldCom as well as senior roles

in Product Development and

Transformation at Cable &

Wireless and Verizon.

Katrina has a BSc in Mathematics

and an MSc in Operational

Research.

Strategic report Governance Financial statements

Governance

Page Title

Board leadership

Board and Committee meetings and attendance

All Directors are expected to attend each Board meeting and each Committee meeting for which they are members, unless there are exceptional

circumstances preventing them from participating. The table below shows the Directors attendance at all Board and Committee meetings

throughout the year.

Meetings Paula Bell David Burke

Juan G. Hernández

Abrams

Peter Hill CBE

Eva

Lindqvist

Baroness Kate Rock

Michael

Speakman

Nancy Tuor

Moore

Board

Audit and Risk

Committee

— — —

Remuneration

Committee

— — —

Nomination and

Governance

Committee

— —

Environment

Committee

— —

Social and

Community

Committee

— —

1 Juan G. Hernández Abrams was appointed to the Board on 1 February 2022 and succeeded Nancy Tuor Moore as Chair of the Environment Committee in May 2022.

2 Eva Lindqvist was unable to attend a number of the meetings held in December 2022 due to unavoidable personal matters. She was briefed by the Chairman prior to the meetings and she also

provided comments on the meeting materials to both the Chairman and the Group Company Secretary and Legal Advisor in advance.

3 Nancy Tuor Moore retired from the Board on 18 May 2022.

4 Michael Speakman was unable to attend the joint meeting of the Environment and Social and Community Committees held in December 2022 due to unavoidable personal matters. He received

the papers in advance and discussed them with the committees’ Chairs prior to the meeting.

Effectiveness

Directors and Directors’ independence

The Board currently comprises the Chairman, four independent Non-executive Directors (NEDs) and two Executive Directors. The names of

the Directors at the date of this report, together with their biographical details, are set out on pages 80 and 81.

The NEDs constructively challenge and help to develop proposals on strategy and bring strong independent judgement, knowledge and experience to

the Board’s deliberations. Periodically, the Chairman meets with the NEDs without the Executive Directors present. Apart from formal contact at Board

meetings, there is regular informal contact between the Directors.

Paula Bell, Eva Lindqvist, Baroness Kate Rock and Juan G. Hernández Abrams are all considered to be independent NEDs. Their other professional

commitments are as detailed on pages 80 and 81. Peter Hill CBE was independent at the time of his appointment as Chairman on 26 July 2016. Peter’s

other professional commitments are as detailed on page 80.

All Directors are subject to election by shareholders at the first AGM following their appointment and to annual re-election thereafter, in accordance

with the Code.

Leadership

84 Keller Group plc Annual Report and Accounts 2022

Governance

Board leadership

Directors’ conflicts of interests

Under the Companies Act 2006 (the ‘2006 Act’), a Director must avoid a situation where they have, or could have, a direct or indirect interest that

conflicts, or possibly may conflict, with Keller’s interests. The 2006 Act allows Directors of public companies to authorise conflicts and potential conflicts,

where appropriate, where the Articles of Association (the ‘Articles’) contain a provision to this effect. The Articles give the Directors authority to approve

such situations and to include other provisions to allow conflicts of interest to be dealt with. To address this issue, at the commencement of each Board

meeting, the Board considers its register of interests and gives, when appropriate, any necessary approvals.

There are safeguards which will apply when Directors decide whether to authorise a conflict or potential conflict. Firstly, only Directors who have no interest in

the matter being considered will be able to take the relevant decision and, secondly, in taking the decision, the Directors must act in a way that they consider,

in good faith, will be most likely to promote Keller’s success. The Directors are able to impose limits or conditions when giving authorisation if they think this is

appropriate. These procedures on conflicts have been followed throughout the year and the Board considers the approach to operate effectively.

Board activities and principal decisions

Strategy and

performance

People and

culture

Operational

performance

Financial

management

Risk and control

Governance

• Evaluated and further focused the

Group’s strategy

• Reviewed and considered the monthly

performance of the divisions and

businessunits

• Promoted a review of the PLM Standard and

endorsed its relaunch as Project Performance

Management Standard

• Completed the appointment of a new

Non-executive Director

• Evaluated the Executive Committee

succession plan

• Progressed inclusion and diversity, maintaining

focus on ambitions

• Reviewed the company’s contract

performance and revenue over the year

• Continued the company’s delivery of initiatives

against its ESG and sustainability objectives

• Approved the business case for the ERP and

continued its development

• Met with employees in North America,

Australia and Dubai

• Visited operational sites in New York, USA

• Evaluated and approved the 2023 business plan

and budget, and the approach and process for

the viability and going concern statements

• Reviewed the company’s forecast net debt

levels, facility headroom and covenants and

working capital

• Considered and agreed the recommendation

to increase the 2022 final dividend, as well as

the payment of the 2022 interim dividend

• Considered the principal and emerging risks and

uncertainties which could impact the Group

• Reviewed the risk management framework

with particular regard to going concern and

impact on the viability statement

• Considered the impact of the audit and

corporate governance reform and developed

an approach to respond, aligned with the ERP

• Received training on climate matters, TCFD and

the audit and corporate governance reform

• Received updates on legal and regulatory

changes

• Following the investor perception audit

conducted in 2021, factored feedback

received into decisions

• Agreed the Modern slavery and human

trafficking statement for 2022

Strategic report Governance Financial statements

Governance

Page Title

Section 172 statement

As a Board, we have always taken decisions for the long term. Collectively and individually, our aim

is always to uphold the highest standards of conduct. We understand that our business can only

grow and be successful over the long term if we understand and respect the views and needs of

our employees, customers and the communities in which we operate, as well as our suppliers, the

environment and the shareholders to whom we are accountable.

In summary, as required by section 172 of

the 2006 Act, a director of a company must

act in the way they consider, in good faith,

would most likely promote the success of the

company for the benefit of its shareholders.

In doing this, the director must have regard,

amongst other matters, to the:

• likely consequences of any decisions in the

long term;

• interests of the company’s employees;

• need to foster the company’s business

relationships with suppliers, customers

andothers;

• impact of the company’s operations on the

community and environment;

• company’s reputation for high standards of

business conduct; and

• need to act fairly as between members of

the company.

For more information see page 93

Our people are our most valuable

asset. We want them to be inspired

and motivated, equipped with the

right skills, tools and standards to

be successful.

Workforce engagement

During 2022, the Board continued its

approach to engagement with the workforce

led by Baroness Kate Rock, Keller’s

designated Non-executive Director for

employee engagement matters.

Communications

We communicate regularly with our employees

through face to face meetings, webcasts, our

company intranet and newsletter and site and

office visits. Site visits allow NEDs to feel the

operational environment and enhance their

understanding of employees’ experience of

their working environment.

Outcomes for our employees:

• Local and global opportunities • Development and training • Long-term employment

Employees

Delivering for our shareholders

ensures that the business

continues to be successful in

the long term and can therefore

continue to deliver for all our

stakeholders.

Strategy

The Chief Executive Officer and Chief Financial

Officer met major shareholders following the

preliminary announcement of the Group’s

2021 results to discuss a number of matters,

including progress against the Group’s

strategy. Additionally, the Chief Executive

Officer and the Chief Financial Officer had

calls with major shareholders following the

announcement of the Group’s 2022 interim

results. Following these announcements,

analysts’ notes were circulated to the Board.

Performance

The Board initiated an investor perception audit

and received feedback which afforded the Board

a deeper level of understanding of the views of

shareholders and potential investors and gave

the executive management additional input to

formulate the strategy for the years ahead.

The Chief Executive Officer and the Chief

Financial Officer had calls with major

shareholders following the Group’s trading

update announcement in November 2022.

The Chairman and the Senior Independent

Director had calls with shareholders to discuss

Group performance and risk management

throughout the year. The Chair of the

Audit and Risk Committee had calls with

shareholders on the wake of the financial

reporting fraud in Austral.

Website

The investor relations section of our

website provides information on the financial

calendar, dividends, AGMs and other areas

of interest to shareholders. Copies of annual

reports and investor presentations are

available to view and download.

Shareholders can also register to receive

‘news alerts’ relating to the Group’s activities.

During the year, we enhanced the ESG and

sustainability section of the website to

improve users access toinformation.

AGM

The Board uses the AGM as an opportunity

to communicate with shareholders, who

are invited to attend, ask questions and

meet Directors prior to, and after, the formal

proceedings. The Chairs of the Main Board

Committees are present at the AGM to answer

questions on the work of their committees.

The results of the voting at the 2022 AGM

can be found on our website.

Dividend

We have consistently either grown or maintained

our dividend since listing and we announced a

further increase to the final dividend for 2022. We

have strong cash generation and a robust balance

sheet, which together support our ability to

continue to increase the dividend to shareholders

sustainably through the market cycle.

Outcomes for our shareholders:

• Keller is a stable business with a long-term track record • Continued growth opportunities

Shareholders

86 Keller Group plc Annual Report and Accounts 2022

Governance

Section 172 statement

Our customers are central to our

business – without them we would

not exist. We want to continuously

improve on efficiently delivering

a consistently high performance

across all our strategic levers so as

to meet our customers’ needs.

Contact

The Chief Executive Officer and the Divisional

Presidents are in regular contact with our

customers, and they regularly brief the Board

on our performance in delivering on our

commitments to customers and the quality

of these critical relationships.

Research

We conduct a wide range of customer

research to better understand their

expectations of us.

During the year, our local teams engaged with

our customer network to better understand

their requirements post-pandemic and how

they are facing the repercussions of rising

inflation from the past year.

Building strong relationships with

our suppliers enables us to obtain

the best value, service and quality.

We want to work with suppliers

who understand us and adhere to

our ways of working.

Procurement

Established in 2016, our procurement function

continued to work hard to understand our

supply chain and how to develop deeper and

more strategic relationships with key suppliers.

Working together to do the

right thing

Keller’s Supply Chain Code of Business Conduct

sets out our expectations that our supply

chain should respect the human rights of their

employees and contractors and treat them

fairly, in accordance with all applicable laws.

Increased communications with our suppliers

during the year has assisted us in managing

our resources and materials on site.

What we do is an integral part of

the community and the community

is ultimately our customer. Poor

relationships can damage and

even destroy our reputation. Good

relationships win us goodwill.

Contributing to the community

The Board recognises the importance of

leading a company that not only generates

value for shareholders, but also contributes to

wider society.

The Board approved a new three-year

partnership with UNICEF, starting with a

funding contribution of £250,000 in 2022

towards its Core Resources for Children.

Our environmental impact

As a geotechnical engineering specialist,

we understand that environmental and

climate risks could impact us directly. We are

committed to protecting the environment,

and aim to have a positive impact on it – so we

safeguard the future.

Outcomes for our customers:

• Benefit from Keller’s global strength and local focus • Provision of cost-effective geotechnical solutions

Outcomes for our suppliers:

• A reliable local relationship with a financially strong global company • Support in meeting global supply chain standards

Outcomes for our communities:

• Local employment

• Charitable partnerships

• Participation by our employees in community events

• Sustainable commitments

Customers

Suppliers

Communities

The Directors of Keller – and those of all UK

companies – must act in accordance with a set

of general duties. These duties are detailed in

the 2006 Act and include a duty to promote the

success of the company, which is summarised

on the previous page. As part of their induction,

the Directors are briefed on their duties and

they can access professional advice on these –

either through the company or, if they judge it

necessary, from an independent provider.

The Directors fulfil their duties partly through

a governance framework that delegates

day-to-day decision-making to employees

of the company. The Board recognises that

such delegation needs to be much more

than simple financial authorities and, in this

section of the report, we have summarised

ourgovernancestructure. This covers: the

values and behaviours expected of our

employees; the standards they must

adhere to; how we engage with stakeholders;

and how the Board looks to ensure that we

have a robust system of control and assurance

processes.

For more detail on our governance framework,

see pages 88 to 90. Details about the principal

decisions the Board made during the year can

be found on page 85.

Strategic report Governance Financial statements

Governance

Page Title

Board of Directors

Board Committees

Find out more

Management Committees

Share Plans

Committee

Treasury Committee

Audit and Risk

Committee

Executive Committee

Disclosure

Committee

Environment

Committee

Nomination

and Governance

Committee

Safety Leadership Committee

Remuneration

Committee

Sustainability Steering Committee

Social and

Community

Committee

Bank Guarantees

and Facilities

Committee

Data Protection Steering Committee

A&R

EXC

DIS

N&G

REM

SUS

REM

S&CENV

Accountability

Oversight

Main Committees Other Committees

Governance framework

The Board is appointed by shareholders, who are the owners of the company. The Board’s

principal responsibility is to act in the best interests of shareholders as a whole, within the legal

framework of the 2006 Act and taking into account the interests of all stakeholders, including

employees, customers, suppliers and communities. Ultimate responsibility for the management

and long-term success of the Group rests always with the Board, notwithstanding the delegated

authorities framework detailed below.

Keller Group plc Annual Report and Accounts 2022

Governance

Governance framework

Board

Develops

strategy, grows

shareholder value,

provides oversight and

corporate governance,

and sets the tone from

the top.

Provides

entrepreneurial leadership

of the Group, driving it

forward for the benefit,

and having regard to the

views, of its shareholders

and other stakeholders.

Governs

the Group within a

framework of prudent

and effective controls,

which enable risks to be

assessed and managed to

an appropriate level.

Approves

the Group’s strategic

objectives.

Ensures

that sufficient resources

are available to the Group

to enable it to meet

strategic objectives.

The Board delegates authority to manage the business to the Chief Executive Officer (CEO) and also delegates other matters to its committees

and management as appropriate. The Board has formally adopted a schedule of matters reserved to it for its decision, which is available on our

website. Details about the principal decisions the Board made during the year can be found on page 85.

The CEO in turn chairs the Executive Committee for day-to-day management matters and delegates other matters to various Management Committees.

Main Board Committees

Committees Remit Membership Quorum

A&R

Audit and Risk

Committee

Oversight of the Group’s financial and non-financial reporting,

risk management (including TCFD) and internal control

procedures and the work of its internal and external auditor.

Independent Non-executive

Directors (NEDs)

Two

N&G

Nomination

and Governance

Committee

Review of the composition of the Board and senior

management, and plans for its progressive refreshing with

regard to balance and structure as well as succession

planning, taking account of evolving legal and regulatory

requirements as well as stakeholders’ expectations.

Responsibility for governance matters.

Chairman and independent

NEDs

Two

REM

Remuneration

Committee

Framework, policy and levels of remuneration of the Executive

Directors and senior executives.

Independent NEDs Two

DIS

Disclosure

Committee

Inside information determination and advice on scope and

content of disclosures to the market.

Any two Directors (including

CEO or Chief Financial Officer)

and the Group Company

Secretary and Legal Advisor

Two

ENV

Environment

Committee

Oversight of the Board’s responsibilities in relation to

environmental matters, including climate-related matters

and TCFD.

Independent NEDs and CEO Two

S&C

Social and

Community

Committee

Understanding of the key concerns of the workforce and

wider stakeholders, apart from shareholders.

Independent NEDs and CEO Two

The terms of reference for each of the Main Board Committees are reviewed on an annual basis and can be found on our website (www.keller.com).

Other Board Committees

Committees Remit Membership Quorum

Share Plans Committee

Consideration of administrative matters related to the

provision of share-based employee benefits for the company

and its subsidiaries.

All Directors and the Group

Company Secretary and

Legal Advisor

Two

Bank Guarantees and

Facilities Committee

Consideration of matters related to the provision of bank

guarantees and facilities for the company and its subsidiaries.

All Directors and the Group

Company Secretary and

Legal Advisor

Two

The terms of reference for each of these Other Board Committees can be found on our website (www.keller.com).

Strategic report Governance Financial statements

Governance

Page Title

Governance framework continued

Main Management Committees

Committees Remit Membership Chair Quorum

EXC

Executive

Committee

Day-to-day management CEO, CFO, Group Company Secretary and

Legal Advisor and any other officers as

invited by the CEO. Minimum of six.

CEO or Chief

Financial Officer

(CFO) in CEO’s

absence

Four (including

CEO or CFO)

Safety

Leadership

Committee

Safety culture CEO, Divisional Presidents of Europe,

North America and AMEA, Group HSEQ

Director, Group Company Secretary and

Legal Advisor and any other direct reports

as required by the CEO. Minimum of six.

CEO Four (including

CEO or Group

HSEQ Director)

SUS

Sustainability

Steering

Committee

Mostly climate-related and

environmental matters, but

also people, community,

governance and reputational

matters.

A minimum of six representatives of each

division and the Group’s relevant

functions.

Group Engineering

and Operations

Director

Four (including

Group

Engineering

and Operations

Director)

Other Management Committees

Committees Remit Membership Chair Quorum

Treasury Committee

Management of the

company’s financial risks in

accordance with the

objectives and policies

approved by the Board.

CFO, Group Financial Controller, Group

Head of Treasury, Group Head of Tax.

Group Head of

Treasury

Two

(including CFO)

Data Protection

Steering Committee

Implementation of Keller’s

strategy for compliance with

data protection laws.

Legal representatives from each division

(Europe, North America, AMEA), Group

Company Secretariat and Group IT.

n/a n/a

Organisational and reporting structure for climate governance

The Environment Committee provides oversight of TCFD activities on behalf of the Board. The committee is supported by the TCFD working group on

TCFD matters. The Sustainability Steering Committee has a wider remit than the TCFD working group and feeds through sustainability matters to the

Executive Committee, the Environment Committee, the Social and Community Committee and the Board.

Board

Chairman is designated Director for ESG and sustainability matters

Executive Committee

Group Engineering and Operations Director is a member

North America

Divisional representative

BU managers

Function heads

Sustainability champions

Europe

Divisional representative

BU managers

Function heads

Sustainability champions

AMEA

Divisional representative

BU managers

Function heads

Sustainability champions

Environment Committee

Sustainability Steering Committee

Divisional and Group representatives

TCFD working group

Group functions:

Sustainability, HSEQ,

Engineering and

Operations, Finance,

Risk, Communications,

Investor Relations,

People, Company

Secretariat.

Group Engineering

and Operations

Director

90 Keller Group plc Annual Report and Accounts 2022

Governance

Page Title

• Formulating strategy proposals for the

Board.

• Formulating annual and medium-term

plans, charting how this strategy will be

delivered.

• Apprising the Board of all matters

which materially affect the Group

and its performance, including any

significantly underperforming business

activities.

• Leading executive management in

order to enable the Group’s businesses

to meet the requirements of

shareholders.

• Ensuring adequate, well-motivated and

incentivised management resources.

• Ensuring appropriate succession

planning.

• Ensuring business processes for long-

term value creation.

• Being the ultimate custodian of

shareholders’ interests.

• Ensuring appropriate Board

composition and succession.

• Ensuring effective Board processes.

• Setting the Board’s agenda.

• Attends meetings with major

shareholders to obtain an

understanding of their issues

and concerns, ensuring effective

communication with them.

• Ensuring that Directors are properly

briefed in order to take a full and

constructive part in Board and Board

Committee discussions.

• Ensuring constructive relations

between Executive and Non-executive

Directors.

• Being the designated Director for ESG

and sustainability matters, in particular

climate-related issues.

• Adherence within the company to all

applicable accounting standards.

• Internal financial controls within the

company.

• Custodian of the Group’s financial

resources.

• Oversight of the company’s financial

functions and staffing including

motivation, development and

succession.

• Maintaining adequate financial liquidity

and ensuring the viability and resilience

of the Group.

• Works closely with the Chairman, acting as a sounding

board and providing support.

• Acts as an intermediary for other Directors as and when

necessary.

• Is available to shareholders and other NEDs to address

any concerns or issues they feel have not been adequately

dealt with through the usual channels of communication.

• Meets at least annually with the NEDs to review the

Chairman’s performance and carries out succession

planning for the Chairman’s role.

• Attends sufficient meetings with major shareholders

to obtain a balanced understanding of their issues and

concerns.

• Ensures good information flows to the Board and its

Committees and between senior management and

NEDs.

• All Directors have access to their advice and services.

• Responsible for ensuring that the Board operates in

accordance with the governance framework it has

adopted.

• Advises on evolving standards and supports the

Chairman on the continuing development of the Board.

• Their appointment and resignation is a matter for

consideration by the Board as a whole.

Responsible for the effectiveness of each committee and individual member Directors.

Key role Responsibilities

Responsible for the

formulation of strategy,

and the operational and

financial business ofthe

Group.

The CEO is also

responsible for:

Responsible for leading the

Board, its effectiveness

and governance.

The Chairman is also

responsible for:

Responsible for financial

management and control,

budgeting and forecasting,

tax and treasury and

investor relations.

The CFO is also

responsible for:

Chief

Executive

Officer

Chairman

Senior

Independent

Director

Chief

Financial

Officer

Group

Company

Secretary

and Legal

Advisor

Committee Chairs

The roles of the Chairman and the CEO are quite distinct from each other and are clearly

defined in written terms of reference. They do collaborate and have a close working relationship.

Division of responsibilities

The Keller Charter of Expectations and Role Profiles sets the role profiles for all of the key positions on the Keller Group plc Board, and states the

expectations that are demanded of each of the Directors and the Group Company Secretary and Legal Advisor. The charter is available on our website

so that there is complete transparency of the standards we set ourselves for all our stakeholders. The performance of the Board and Board Committees

and of each of the Directors individually is measured against these expectations.

Strategic report Governance Financial statements

Governance

Page Title

Nationality (%)

Gender (%)

Length of tenure (%)

Number of Board members

with relevant experience

Number of Board members with

relevant international experience

British 57%

Female 43%

<1 year 14%

Oil and gas 3

Americas 6

Other 43%

Male 57%

1–3 years 14%

Technology 5

Europe 7

4–6 years 72%

Construction 5

Middle East 4

Engineering 6

Africa 2

Asia Pacific 5

Data as at 31 December 2022.

Board composition, succession and evaluation

Board composition

As reported in last year’s annual report, Juan G.

Hernández Abrams joined the Board in February

2022 and took over as Chair of the Environment

Committee from Nancy Tuor Moore, who

retired in May 2022. No other changes occurred

during the year and the new Board Committees

structure effectively allowed more focus on

Keller’s ESG priorities.

Please refer to our Governance framework on

page 88 for further information and also the ESG

and sustainability section of this report starting

on page 52.

Board diversity

Our Board Diversity Policy has been in place since

January 2021.

In 2022, Keller’s Board of Directors had a 43%

female share (2021: 57%). The decrease was

due to the appointment of Juan G. Hernández

Abrams in place of Nancy Tuor Moore, who retired

last year. The appointment of Juan allowed us to

meet the Parker Review target with one Board

Director from an ethnic minority background.

The selection of candidates to join the Board

continues to be made based on merit and the

individual appointee’s ability to contribute to

the effectiveness of the Board, which in turn is

dependent on the pool of candidates available.

All appointments and succession plans will

seek to promote diversity of gender, ethnicity,

skills, background, knowledge, international and

industry experience and other qualities.

Our commitment to equality and diversity and

inclusion aligns with our values of integrity,

collaboration and excellence and is underpinned

by our Inclusion Commitments.

The Board is committed to promoting equality,

diversity and inclusion in the boardroom, to

ensure all are able to contribute to Board

discussions, and aims to meet industry targets

and recommendations wherever possible. This

includes our objective of meeting the diversity

targets recommended by the Hampton-

Alexander Review and Parker Review.

The Board, supported by the Nomination and

Governance Committee, is also committed to:

• ensuring that the Board is comprised of a

good balance of skills, experience, knowledge,

perspective and varied backgrounds;

• only engaging search firms who are signed

up to the Voluntary Code of Conduct for

Executive Search Firms;

• ensuring that Board appointment ‘long lists’ will

be inclusive according to the widest definition

of diversity;

• considering candidates for Non-executive

Director Board appointments from a wide pool,

including those with no listed company board-

level experience; and

• reporting annually on the diversity of the

executive pipeline as well as the diversity of

the Board.

The annual evaluation of the Board effectiveness

considers the composition and diversity of

theBoard.

We also aim to develop a strong pipeline of

diverse candidates for executive Board roles

and for the Executive Committee with a goal

of ensuring that it is made up of an appropriate

balance of skills, experience and knowledge

required to effectively oversee the management

of the company in the delivery of its strategy.

Our gender diversity statistics across the Group

are shown on page 65.

Board evaluation and review of the

Chairman’s performance

The externally facilitated board evaluations in

2020 and 2021 led to a number of areas being

identified for improvement. The Board members

agreed these areas for improvement would be a

focus in 2022.

Overall, Keller’s Board Diversity Policy aligns to the FTSE Women

Leaders Review and the Parker Review, and we report in line with the

UK Corporate Governance Code (via the Listing Rules), the relevant

Disclosure Guidance and Transparency Rules, and the Companies Act

2006 on people matters.

2021 and 2022 –

outputs from the evaluations

The Board:

In general, members had been very positive

about the Board and how it functions, with

a good blend of expertise around the table

and a high level of energy. The Board felt that

dialogue was open and transparent, and

that the Executive Directors were working

well with the Board, contributing openly and

without defensiveness.

Board members agreed that there was a

perceived need for improvement in the

framing of issues for discussion, a desire

for more strategic discussion, and a desire

to close out returning issues. Given the

high level of board activity, Board members

felt that keeping meeting schedules tight

was a good discipline to force choices

and to prioritise the agenda. They agreed

that they all had good opportunities to

contribute and that the expertise around the

table was appropriate.

92 Keller Group plc Annual Report and Accounts 2022

Governance

Board composition, succession

and evaluation

Information and support

The Board and committees are satisfied that they

receive sufficient, reliable and timely information

in advance of meetings and are provided with

all necessary resources and expertise to enable

them to fulfil their responsibilities and undertake

their duties in an effective manner.

The Chairman and the Group Company

Secretary and Legal Advisor keep under review

the forward agendas for the Board and the

content and construct of management papers

to allow for greater focus by the Board as a whole

on strategic matters and avoiding unnecessary

operational detail.

For each Board and committee meeting,

Directors are provided with a tailored Board

pack in advance of the meeting. To improve

the delivery and security of meeting papers, we

use an electronic system that allows the Board

to easily access information, irrespective of

geographic location. Directors regularly receive

additional information between Board meetings,

including a monthly Group performance update

which includes carbon emissions reduction

performance. If a Director is unable to attend a

meeting, they are provided with all the papers and

information relating to that meeting and have

the opportunity to discuss issues arising directly

with the Chairman and Chief Executive Officer.

Accountability

Internal controls

The Board is ultimately responsible for the

Group’s system of internal control and for

reviewing its effectiveness. However, such a

system is designed to manage, rather than

eliminate, the risk of failure to achieve business

objectives, and can provide only reasonable,

not absolute, assurance against material

misstatement or loss.

The Board confirms that there is an ongoing

process for identifying, evaluating and managing

the principal risks faced by the Group, which has

been in place for the year under review and up

to the date of approval of the Annual Report and

Accounts. This process is regularly reviewed by

the Board and accords with the guidance from the

Financial Reporting Council.

Details on the identification and evaluation of

risk, as well as on the management of project

risk, can be found in the section headed

Principal risks and uncertainties on pages 34

to 43. The key elements of the Group’s system

of internal controls are explained in the Audit

and Risk Committee report on page 106. The

management of financial risks is described in the

Chief Financial Officer’s review on page 33.

Disappointingly, we finished the financial year with

the announcement in January 2023 regarding the

financial reporting fraud in the Austral business

in Australia (AMEA). The specific incident has

been forensically investigated by PwC. In the

follow-on actions, management commissioned

an independent review of the operation of our

financial reporting controls across the rest of the

Group. More detail on our actions on this matter

is available on page 107 of the Audit and Risk

Committee report.

Compliance with laws and regulations

Compliance with laws and regulations both

local and global is of extreme importance to the

Board, including the minimisation of instances

of non-compliance. Throughout the reporting

year, the Group Company Secretary and

Legal Advisor received reports from and met

with members of divisional management to

assess and understand the key challenges and

opportunities faced in relation to legislative and

regulatory developments within each jurisdiction

of operation, which were subsequently reported

to the Board for consideration.

Instances of non-compliance identified

throughout the year involved the introduction

of new monitoring and reporting requirements,

particularly with regard to cyber security and

data protection within the AMEA Division. Having

identified these, the Group Company Secretary

and Legal Advisor coordinated responses along

with Management Committees to understand

the requirements and implement due process, as

to ensure compliance.

For more information on policy commitments in

compliance with laws and regulations, please see

our Non-financial reporting statement on pages

74 and 75.

Information included in

the Directors’ report

Certain information that fulfils the

requirements of the Corporate governance

statement can be found in the Directors’

report in the sections headed ‘Substantial

shareholdings’, ‘Repurchase of shares’,

‘Amendment of the company’s Articles

of Association’, ‘Appointment and

replacement of Directors’ and ‘Powers

of the Directors’ and is incorporated

into this Corporate governance section

by reference.

Overall, there was a high level of respect

for people around the table and although

discussions were sometimes considered to

be robust, they were also respectful with a

good level of debate.

The Chairman:

The Board agreed that the Chairman’s style

and approach had been appropriate and

necessary to drive change during a critical

period. Members also agreed that his style

was inevitably evolving to meet the new

demands in the business.

It was recognised that the events of 2020 and

2021 had led to an intense period of Board

involvement and focus on operational issues, and

in 2022 the Board’s focus was re-oriented to a

greater mix of operational and strategic issues.

The Chairman, the CEO and the Group Company

Secretary and Legal Advisor meet before each

scheduled Board and committee meeting to

agree the itinerary and meeting schedule, before

finalising agendas. The Chairman provides a

briefing note to the Board members prior to each

Board meeting to frame the issues for discussion

and key decisions required in the meeting. There

is time built in to the itinerary for discussion both

between the Chairman and the Non-executive

Directors, and with the Executive Directors.

Recognising the lack of face to face meetings

across the business between the Board and

management in 2020 and into 2021, the

Board’s agendas in 2022 allowed for increased

attendance by the executive team.

An internal review of the effectiveness of the

Board and its committees will be facilitated by

the Group Company Secretary and Legal Advisor

during 2023.

Board development

On appointment, Directors are provided with

induction training and information about the

Group, the role of the Board and the matters

reserved for its decision, the terms of reference

and membership of the Board Committees and

the latest financial information about the Group.

This is supplemented by meetings with the

company’s legal and other professional advisers,

and, where appropriate, visits to key locations

and meetings with certain senior executives

to develop the Directors’ understanding of

thebusiness.

Throughout their period of office, Non-executive

Directors are continually updated on our business,

markets, social responsibility matters and other

changes affecting the Group and the industry in

which we operate, including changes to the legal

and governance environment and the obligations

on themselves as Directors. Specific updates

this year included an externally facilitated session

on climate matters, TCFD and the audit and

corporate governance reform.

Strategic report Governance Financial statements

Governance

Page Title

ENV

Dear shareholder

On behalf of the Board, I am pleased to present the report

ofthe Environment Committee for the year ended

31 December 2022, my first report since I took over as Chair

in May last year. I have been impressed by the energy and

commitment of the Keller people during my first year with

the organisation. I have shared my views on page 100 of

thisreport.

Continued focus

The committee continued to focus on our carbon reduction

targets and TCFD reporting requirements.

Key initiatives such as fleet decarbonisation, site trials on

carbon saving opportunities, and energy efficiency audits

remain pivotal to our journey to net zero and the delivery of

sustainable strategy for our stakeholders and shareholders.

TCFD reporting

Throughout the year, the committee invested in internal

capabilities to increase the scope and quality of our

disclosures under TCFD.

We are pleased to report that we have made substantial

progress in our second year of reporting under TCFD,

having been able to take into account the quantitative and

qualitative findings from the scenario analysis modelling we

ran during the year. This demonstrates Keller’s ambition to

better manage and mitigate our climate-related risks and

opportunities, and our commitment to increased reporting

for the benefit of our stakeholders. The committee is ideally

placed to provide Board-level governance and scrutiny over

strategic, climate-related topics.

Our Non-financial and sustainability statement, within our

TCFD report for the year, is available from page 44.

For more information on the specific climate-related risks and

opportunities, please see page 40 in the Principal risks and

uncertainties section of this report.

Carbon reduction targets

Scope 1 emissions per £m revenue have decreased,

with small improvements in the carbon efficiency of our

operations.

We trialled several equipment decarbonisation initiatives

during 2022 such as use of hybrid electric rigs, biofuels (HVO)

and company policies to encourage use of electric or hybrid

vehicles. These will form the basis for our first steps towards

fleet decarbonisation.

Keller has seen good engagement on Scope 2 activities, with

the Group readily achieving their Scope 2 emissions reduction

target. Energy audits have also been conducted across

Keller’s three divisions, highlighting opportunities to save

energy and money going forwards.

Multiple projects are under way to quantify and reduce Scope

3 emissions. These include developing the first complete

estimate of Scope 3 material emissions for a business unit

in Keller Austria. The new ERP system is also being designed

to have the capability to capture the necessary data for

measuring Scope 3 emissions.

Environment Committee report

Committee highlights in 2022

Oversaw the development of the ESG and sustainabilitysection

of the website.

Made substantial progress on TCFD disclosures.

Monitored progress against the year’s environmentalobjectives.

Monitored progress of the Group’s environmental initiatives.

Reviewed the committee’s priorities for 2023.

Reviewed the effectiveness of the committee.

Role of the committee

The role of the committee is to help the Board of Directors fulfil its oversight

responsibilities in relation to environmental and related sustainability matters

arising out of the activities of the Group.

Committee composition during 2022 Meeting attendance

Juan G. Hernández Abrams (Chair)*

Nancy Tuor Moore**

Paula Bell

Eva Lindqvist

Baroness Kate Rock

Michael Speakman

* Member from February 2022 ** Chair until May 2022

Juan G. Hernández Abrams

Chair of the Environment Committee

See biographies on pages 80 and 81

94 Keller Group plc Annual Report and Accounts 2022

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Page TitleEnvironment Committee report

Corporate governance

The remit of the committee is set out in its

terms of reference which are available on

the Group’s website (www.keller.com) and on

request, from the Committee Secretary. During

this financial year we met four times, with

attendance at the meetings shown on pages 84

and 94.

One of the meetings was held jointly with the

Social and Community Committee.

The committee is comprised of the independent

Non-executive Directors of the company and

the CEO. The committee may invite members

of the senior management team to attend

meetings where it is felt appropriate, and the

Group Chairman, the CFO, the Group Company

Secretary and Legal Advisor, the Engineering and

Operations Director and members of his team

regularly attend meetings of the committee.

The Board delegates authority to the committee

to manage, plan and mitigate Keller’s climate-

related risks and opportunities, but the Board

maintains ultimate accountability for these

with the Group Chairman being the Director

responsible for ESG and sustainability. As such,

the Board continued to monitor the efficacy,

expertise and knowledge of the committee

in executing the environmental strategy

throughout the year. Our organisational and

reporting structure for climate governance, and

how it fits within our governance framework, is

set out on page 90. In addition, the committee’s

performance, and that of its members, was

evaluated internally in an exercise facilitated

by the Group Company Secretary and Legal

Advisor and overseen by the Group Chairman.

More detail about this exercise can be found on

pages 92 and 93.

I look forward to meeting shareholders who

attend our AGM this year to answer any

questions on this report or on the committee’s

activities. Shareholders are also encouraged

to email their questions to the Committee

Secretary at secretariat@keller.com.

Juan G. Hernández Abrams

Chair of the Environment Committee

Approved by the Board of Directors and

authorised for issue on 10 March 2023.

We are on the right path at Keller

on environmental matters and

will continue to drive for a more

sustainable future.”

Looking forward

As industry leaders, we are on the right

path at Keller on environmental matters

and will continue to drive for a more

sustainable future. Our priorities for 2023

will revolve around:

• Embedding climate risks and

opportunities in our overall strategy

• Supporting the company in its progress

towards net zero.

• Assisting the Remuneration

Committee in monitoring the impact of

ESG targets on remuneration.

• Continuing to engage employees on

sustainability matters.

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Page Title

S&C

Social and Community Committee report

Committee composition during 2022 Meeting attendance

Baroness Kate Rock (Chair)

Paula Bell

Juan G. Hernández Abrams*

Eva Lindqvist

Michael Speakman

Nancy Tuor Moore**

* Member from February 2022 ** Member until May 2022

Baroness Kate Rock

Chair of the Social and Community Committee

Dear shareholder

It is my pleasure as Chair to present the report of the

Social and Community Committee for the year ended

31 December 2022 on behalf of the Board.

During the year we continued to deliver our obligations by:

• Ensuring that the ‘voice of the employee’ is considered in

the boardroom.

• Reviewing formal data and informal feedback from

employees with management.

• Regularly reviewing Keller’s People initiatives as to their

appropriateness in delivering the strategy and supporting

our values and desired culture.

• Identifying consistent themes received via feedback from

employees.

• Ensuring that the identified themes, along with the

introduction of any Board identified topics that support the

company’s business strategy and desired culture, are fed

into the appropriate strategies.

Employee engagement

As Senior Independent Director and designated Non-

executive Director for workforce engagement, I continued

to champion effective engagement by the Board and its

committees with our workforce, making sure that the

Directors understand and learn from the views of all our

stakeholders. Opportunities for the Directors to learn from

the views of our workforce arose in particular during the year

when the Board visited two sites in New York in October,

where we learned about jet grouting and secant piles, and

when we met with Divisional Presidents and their teams on

various occasions during the year.

Keller’s culture and engagement programme, comprising

leadership upskilling, engagement surveys, reporting by

team and team-based action planning sessions provides a

structured way of getting and actioning employee feedback.

The aim being to continually improve the employee

experience and drive better business performance.

The programme was piloted in four business units in 2021,

and the Board supported its continued rollout to a further

seven business units in 2022.

To actively monitor the culture of the business, the

committee regularly reviews the results of employee

engagement surveys, as well as insights from focus groups

and site visits. Where consistent themes emerge, actions are

fed into the appropriate strategies to further strengthen our

culture. As an example, key feedback was heard and led to the

implementation of separate PPE for women on site in North

America and in the UK, and availability of electric and hybrid

company cars in consideration of sustainability objectives.

After the success of the reverse mentoring exercises in

2021, the committee also promoted the cascading of such

programmes to divisional management teams.

Committee highlights in 2022

Supported management in extending Keller’s culture and engagement

programme to a further seven business units.

Monitored whistleblowing reports on HR and reputational matters.

Reviewed and recommended the Modern slavery and human trafficking

statement to the Board.

Recommended the entering into a three-year partnership with

UNICEF to the Board.

Role of the committee

The role of the committee is to obtain and address feedback from employees

and wider stakeholders, and review relevant people, social and community

policies and practices.

We are also responsible, along with the Audit and Risk Committee, for ensuring

that the company has policies in place to encourage, understand and address

employee concerns and feedback.

Finally, we work closely with the Remuneration Committee, making

recommendations to the Board on whether Keller’s policies and practices

are in line with the purpose and values, and support the desired culture.

See biographies on pages 80 and 81

96 Keller Group plc Annual Report and Accounts 2022

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Page TitleSocial and Community Committee report

Last year we were delighted to announce the

launch of a three-year partnership agreement

between Keller and UNICEF, supporting children

wherever and whenever the need is greatest.”

In addition, the Group Company Secretary and

Legal Advisor ran an internal exercise to review

the performance of the committee and its

members. More detail can be found on pages

92 and 93.

Activities

Further detail on the committee’s activities can

be found in the People and Principles sections

of our ESG and sustainability report, starting on

page 62, but I would like to highlight the following

topics considered during the year:

• We reviewed and promoted management’s

proposal to invest towards internal talent and

skills development.

• We supported the embedding of Keller’s

Wellbeing Foundations through local

accountability. This great piece of work

focused on equipping our Extended

Leadership Group to identify common

wellbeing challenges such as stress, burnout

and isolation, and reinforcing the five key

pillars: body, mind, community, growth and

financial security.

• Under the Charitable Giving Policy approved

in 2021, last year we recommended entering

into a three-year partnership with UNICEF

with an initial contribution of £250,000.

Keller’s three-year partnership, approved

by the Board, is contributing to Core

Resources for Results (unrestricted funds).

By contributing unrestricted funds, UNICEF

UK is able to use the funds where the need is

greatest.

• We were kept abreast of the implementation

of our Diversity, Equity and Inclusion

Commitments, which continued at pace,

with excellent engagement and commitment

shown at divisional level in implementing

dynamic plans, which strengthened

accountability and empowered Keller

divisional leaders to drive progress in their

respective regions.

Looking forward

Last year we said that one of the

priorities for 2022 was going to be the

development of talent and skills. We did

not make much progress on that front

due to other priorities, but we continue

to think that it is essential to ensure that

our talent programmes and promotion

practices are inclusive and based on

merit. So we will reinstate talent and skills

development as a priority for 2023.

In addition, we will support management

in the actions to be undertaken in the

wake of the Austral reporting fraud in so

far as they will have an impact on culture

and behaviours.

Following the success in North America

and the UK, we will also be pushing for the

development and implementation across

the board of a PPE standard for women

on-site.

I will also continue to give the Board

feedback on the thoughts and ideas

of our employees, ensuring that our

workforce and wider stakeholders are

represented appropriately in the Board’s

decision-making process.

Keller was delighted to once again support

The Brilliant Breakfast with a donation of

£10,000.

This amazing initiative started two years

ago to raise awareness and funding for The

Prince’s Trust. The funds raised will help

The Prince’s Trust support disadvantaged

young women to change their lives for the

better, through education or meaningful

employment. To date, The Brilliant

Breakfast has raised over £1m.

Supporting The Brilliant

Breakfast 2022

Baroness Kate Rock

Chair of the Social and Community Committee

Approved by the Board of Directors and

authorised for issue on 10 March 2023.

Governance

Our committee met four times during 2022,

on one occasion jointly with the Environment

Committee as to focus on employee

engagement of environmental matters.

The committee’s terms of reference can be

found on our Group website (www.keller.com)

and on request from the Committee Secretary.

In line with best practice, the committee

completed an effectiveness review of the

business covered during the year against its

terms of reference.

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N&G

Nomination and Governance Committee report

Committee composition during 2022 Meeting attendance

Peter Hill CBE (Chair)

Paula Bell

Juan G. Hernández Abrams*

Eva Lindqvist

Baroness Kate Rock

Nancy Tuor Moore**

* Member from February 2022 ** Member until May 2022

Peter Hill CBE

Chair of the Nomination and Governance Committee

Dear shareholder

Welcome to the report of the Nomination and Governance

Committee for the year ended 31 December 2022.

The committee has continued to review the balance of skills

on the Board as well as the knowledge, experience, length of

service and performance of the Directors. During the year,

we held two meetings, one in May and one in December. The

attendance at both meetings is shown on pages 84 and 98.

Particular areas of focus this year included the appointment

and induction of a new Non-executive Director, Juan G.

Hernández Abrams, who joined the Board on 1 February

2022. Please read his views on his first year at Keller on

page100.

Nancy Tuor Moore, who had been on the Board since 2014,

retired after the Annual General Meeting in May 2022.

Board evaluation

It is extremely important that the Board, its committees

and individual Directors rigorously review their performance

and embrace the opportunity to develop, where necessary.

In 2020 and 2021, I reported that an external effectiveness

review had been undertaken with support from the Group

Company Secretary and Legal Advisor. In 2022, we have

actively progressed the areas of focus identified, further

detail of which can be found on pages 92 and 93. An internal

review of the effectiveness of the Board and its Committee’s

will be facilitated by the Group Company Secretary and Legal

Advisor during 2023.

Board composition

The committee’s activities during the year included:

• Considering the number of Executive and Non-executive

Directors on the Board, and whether the balance was

appropriate to ensure optimum effectiveness.

• Reviewing the balance of industry knowledge, relevant

experience, skills and diversity on the Board.

• Assessing and confirming that all the Non-executive

Directors remained independent.

We are confident that each Director remains committed to

their role and the Board continues to work well and benefits

from an appropriate and diverse mix of skills and industry

knowledge. Collectively, the Directors bring a range of

expertise and experience of different business sectors to

Board deliberations, and this encourages constructive and

challenging debate around the boardroom table. Having a

good mix of skills plays an important role in keeping the Board

relevant and up to date with the market.

Committee highlights in 2022

Appointment of Juan G. Hernández Abrams as a Non-executive Director.

Evaluation of the Board and its committees, the Board Strategy Day

and the Chairman and Directors.

Continued to develop and monitor succession plans for the Board

and senior management.

Monitored the length of tenure of the Non-executive Directors.

Reviewed the terms of reference of the committee.

Reviewed the committee’s effectiveness during the year.

Role of the committee

The role of the committee is to recommend the structure, size and

composition of the Board and its Committees.

It is also responsible for succession planning of the Board and executive

management, for promoting the overall effectiveness of the Board and its

Committees, and for governance matters in general.

See biographies on pages 80 and 81

98 Keller Group plc Annual Report and Accounts 2022

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Page TitleNomination and Governance

Committee report

Board diversity

Our commitment to equality, diversity and

inclusion aligns with our values of integrity,

collaboration and excellence and is underpinned

by our Inclusion Commitments.

The Board is committed to promoting equality,

diversity and inclusion in the boardroom, to

ensure all are able to contribute to Board

discussions, and aim to meet industry targets

and recommendations wherever possible. This

includes our objective of meeting the diversity

targets recommended by the Hampton-

Alexander (now FTSE Women Leaders Review)

and the Parker Reviews.

In 2022, Keller’s Board of Directors had a 43%

female share, meeting the Hampton-Alexander

Review target of 33% female share of Board

Directors by 2020. With the appointment of

Juan G. Hernández Abrams to the Board on

1 February 2022, we also met the Parker Review

target with one Board Director from an ethnic

minority background by 2022.

For further information on diversity at Board

level, as well as more generally at Keller, please

see the ESG and sustainability section of

thisreport.

Non-executive appointments

and time commitments

When we make recommendations to the

Board regarding Non-executive Director

appointments, we will consider the expected

time commitment of the proposed candidate,

and any other existing commitments, to ensure

that they have sufficient time available to devote

to the company.

Before accepting any additional commitments,

Non-executive Directors will discuss them with

the Chairman of the Board, or in the case of

the Chairman, with the Senior Independent

Director and the CEO. Board agreement

is required to ensure that any conflicts of

interest are identified and that the individual

will continue to have sufficient time available to

devote to the company.

Corporate governance

The committee’s terms of reference

are available on the Group’s website

(www.keller.com) and on request from the

Group Company Secretary and Legal Advisor.

The terms of reference were reviewed during

the year, with no material changes to report.

Only the Chairman and Non-executive Directors

are members of the committee, and no other

person is entitled to be present at committee

meetings. We may invite members of senior

management to attend meetings where we feel

it is appropriate, and the CEO did indeed attend

the two meetings held during the year.

Our 2022 evaluation of the committee’s

effectiveness concluded that, consistent with

the Code and our own terms of reference, the

committee was discharging its obligations in an

effective manner.

In accordance with the requirements of the

Code, all members of the Board will seek

re-election at the AGM in May 2023.

Peter Hill CBE

Chair of the Nomination and Governance

Committee

Approved by the Board of Directors and

authorised for issue on 10 March 2023.

Having a good mix of skills plays an important

role in keeping the Board relevant and up to

date with the market.”

In October 2022 the Board visited two

sites in New York where they learned

about secant piles and jet grouting and

met with local colleagues and divisional

management.

Strategic report Governance Financial statements

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Board site visits in 2022

Governance

Page Title

N&G

Nomination and Governance Committee report continued

A conversation with Juan G. Hernández Abrams

What does the Environment

Committee do?

All corporations are having to face up to the

impact they have on the environment, and

Keller is no different. We meet as a committee

to discuss and analyse where we are in meeting

our emissions targets and to look at ways we

can mitigate them with the entire global team.

The biggest goal we have is to find a way to get

all employees involved and thinking about this.

We want to give our employees the tools and

guidance to make an impact every day, so Keller

can do its part in meeting our emissions targets.

For example, there’s a big push at the moment

to make more of our construction equipment

and other vehicles electric. We’re also looking

at how different teams are eliminating waste

through stronger project planning.

There’s a lot of energy in the business to

make a difference and my ultimate goal is to

leave a legacy at Keller, and for us to be the

environmental leader in our industry as we

execute our projects with excellence.

What have you enjoyed about

being at Keller so far?

Most of my interactions are with the Board and

leadership team, and I can tell you I’ve been

fully embraced. I had no real expectations

when I joined, but I’ve been impressed with

the chemistry, teamwork and collaboration at

Board level, as we tackle very tough issues that

the industry faces. It’s been exciting for me, I’ve

enjoyed the responsibilities I’ve been given and

I can’t speak highly enough of my colleagues on

the Board and the Chairman.

There’s a female majority on the Board, and that

diversity was another aspect that attracted me

to Keller – I’ve learnt a lot from them.

What have been your

impressions of the wider

company?

This is a truly global company running

thousands of diverse, fast-moving, complex

projects. The passion and energy from our

people running them – who are excited to

be part of Keller and who take on enormous

responsibility – is so impressive. I really believe

it’s people who make the difference.

What are your aspirations

for the future?

The Executive Committee and the Board

have a strong strategy and I believe we’re

going in the right direction. I think there are

many opportunities for us – there’s a lot of

big, old infrastructure globally, so I’d like to

see us do more in this area to support the

modernisation of decaying infrastructure.

However, my main goal is to continue

supporting the growth of the company

in a sustainable way while meeting our

responsibilities to our people, clients and

shareholders. The world faces a lot of

challenges and headwinds right now, but

there’s a very good Board and leadership

team in place. I’m honoured to be part of

it by helping to manage the company into

thefuture.

What attracted

you to Keller?

After 34 years with Fluor, I wanted to join a

board and offer my knowledge and experience

of running global businesses. But I wanted to

be very selective and join a global leader, one

with a strong leadership team, a sound long-

term strategy, and commitments to safety,

sustainability and diversity. I take the role very

seriously and want to use my experience to

help the company, and ultimately our clients

and shareholders.

Can you tell us about your

roles as a NED and Chair of

the Environment

Committee?

NEDs help set the tone, culture and direction

of the company, both in the short and

long term. Through the Board, we support

and influence leadership to take the right

direction.

NEDs also chair various committees. I am

really excited to be Chair of the Environment

Committee – it’s a topic I’m very passionate

about. My journey started at university when

I studied environmental science and it’s

something I’ve lived throughout my career.

We’re on the right path at Keller and will

continue to drive for a more sustainable

future.

My main goal is to continue

supporting the growth of the

company in a sustainable way.”

Juan G. Hernández Abrams joined Keller as a Non-executive Director (NED) in February

2022. He’s been with Fluor – one of the largest engineering and construction companies in

the world – all of his 34-year career.

At Fluor, he’s held numerous senior positions, including Vice President of Sales and Operations for

the Manufacturing and Life Sciences business line as well as Vice President of Operations for the

Operations and Maintenance group. He was also General Manager/Vice President of the Mining

and Metals business line in South America. Juan, who was born and raised in San Juan, Puerto Rico,

is currently President of Fluor’s Advanced Technologies and Life Sciences business line, which

he’s led for the past 10 years, responsible for projects worth up to $2.5bn. Please see page 81 for

Juan’s full biography.

100 Keller Group plc Annual Report and Accounts 2022

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Page Title

A&R

Audit and Risk Committee report

Committee composition during 2022 Meeting attendance

Paula Bell (Chair)

Juan G. Hernández Abrams*

Eva Lindqvist

Baroness Kate Rock

Nancy Tuor Moore**

* Member from February 2022 ** Member until May 2022

Paula Bell

Chair of the Audit and Risk Committee

Dear shareholder

On behalf of the Audit and Risk Committee, I am pleased to

present our report for the financial year ended 31December

2022.

This report is intended to provide shareholders with an insight

into key areas considered, together with how the committee

has discharged its responsibilities and provided assurance

on the integrity of the 2022 Annual Report. This has included

ensuring the 2022 Annual Report is aligned with the latest

requirements and guidance from regulators, that it is fair,

balanced and understandable and that all matters disclosed

and reported upon meet the rapidly evolving needs of our

stakeholders. In addition, the committee’s fundamental

priorities include ensuring the quality and effectiveness of

the external and internal audit processes and monitoring the

management of the principal risks of the business.

My introduction sets out the key areas of focus for the

committee during 2022 (since our 2021 report) and to the

date of this report.

The Group operates within a large, global and fast-changing

environment, which requires an adaptive approach to

assurance. Needless to say that the macro environment

during 2022 was challenging so it was important to ensure

that the Group’s risk management and internal control

systems operated effectively. Throughout the year the

committee received regular updates from management on

the strengthening of the financial control environment and

systems of internal control.

Internal management reviews discovered a complex financial

reporting fraud in the Austral business unit in Australia (AMEA

division). The committee reviewed the external forensic

findings and management response to the incident, including

establishing follow-on actions at Austral and opportunities

for improvement across the Group. More detail on the

committee’s actions onthis matter is available on page 107.

Committee highlights in 2022

Continued to oversee the development of the Group’s

financial control framework.

Monitored the implementation of the Group’s risk management

framework.

Reviewed and approved the enterprise resource planning (ERP)

system business case, for recommendation to the Board, and Initiated

an external and internal assurance process for the same.

Commissioned an internal audit review on the Project Lifecycle

Management (PLM) Standard.

Monitored and challenged management plans in preparation for

the audit and corporate governance reform as well as the output of

management’s assurance map to assess controls maturity.

Reviewed and approved for recommendation to the Board

a new Anti-bribery and anti-fraud policy.

Recommended to the Board the approval of an overarching

Group Treasury Policy setting out the approach to managing

treasury-related risks.

Reviewed the output of the evaluation of the external and the

internal auditors.

Reviewed and challenged the implementation of the internal

audit programme to ensure appropriate coverage of matters of

business risk.

Reviewed and approved the results of the Group’s annual

Electronic Internal Control Questionnaire.

Reviewed its terms of reference and effectiveness during the year.

Role of the committee

The committee is responsible for overseeing the internal risk management

framework, ensuring effective internal controls are in place, financial and non-

financial reporting and appropriate external and internal audit arrangements.

See biographies on pages 80 and 81

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101

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Page TitleAudit and Risk Committee report

A&R

One of those areas is climate governance and

during the year we devoted time to understand

the challenges and supported management

on the development of a system to respond to

the risk reporting requirements under TCFD.

Our TCFD report for the year, our second year

of reporting under the recommendations, is

available on pages 44 to 51.

As the year progressed, the committee

requested additional items on its meeting

agendas to ensure it had clear oversight of the

evolving impact of the Group’s strategy on the

business. Given the criticality of technology

to the successful execution of the strategy

and implementation of the ERP, the Chief

Information Officer now reports twice per year

to the committee on information security and

IT controls.

Another example of the committee’s

responsiveness to new or emerging risks was

the request, supported by the Board, for an

internal audit review of the PLM Standard. The

results of the review were considered by the

committee, which recommended a full review

and the relaunch of the Standard, which will be

called Project Performance Management. This

is currently under way and will be reported on

next year.

This has been another busy year for the

committee and management has worked hard

to drive improvements in the areas of risk,

internal controls and financial reporting.

Despite the challenges, we are proud of the

progress that has been made during the year

and remain confident in the actions that the

management team has taken, and will continue

to take, to ensure the maintenance of both

high ethical and professional standards and

resilient and effective controls throughout

ourorganisation.

We remain confident in the actions that

management has taken to ensure the

maintenance of both high ethical and professional

standards and resilient and effective controls

throughout our organisation.”

The committee closely monitored

management’s actions and I’m pleased to

report that these provided the committee

with confidence in the robustness of the

financial reporting, audit processes and

controlenvironment.

The internal audit plan also continued to be

adjusted to adapt appropriately to the changing

needs of the business.

In particular, following the review and approval

of the ERP business case by the Board, the

committee challenged management on the

development of the assurance plan for the new

Group-wide operating model.

Following the publication of the Government’s

consultation on ‘Restoring Trust in Audit

and Corporate Governance’, to which the

company formally responded in 2021,

management reviewed the Group’s internal

control environment and prepared a detailed

implementation plan to address future

enhanced internal control requirements, and

updated the committee on progress against

the implementation plan at every meeting. The

committee was reassured by this review and plan

and its contribution to enhancing all areas of

the Group’s financial reporting and operational

finance processes. We appreciate that further

enhancements will have to be made to address

the evolving corporate governance landscape

but we believe the Group is well positioned to

address developments in this area, when they

become mandatory.

Both the external and the internal audit

processes were deemed to be effective. We are

confident about the efficiency and quality of

the process in place for the external audit of the

2022 year-end accounts. With regards to the

internal audit, we have plans for an independent

external review of effectiveness during 2023

in line with the Institute of Internal Auditors

(IIA) requirement to perform an independent

assessment at least every five years.

This is a time of considerable change and

evolution in the role of the Audit and Risk

Committee – with increasing demands for

greater assurance in areas of narrative and

non-financial reporting which have not

traditionally been part of the Committee’s role.

Audit and Risk Committee report continued

I hope that you find this report informative and

can continue to take assurance from the work

undertaken by the committee this year. We seek

to respond to stakeholders’ expectations in our

reporting and, as always, welcome any feedback

from shareholders or other stakeholders.

I look forward to meeting shareholders who

attend our AGM this year to answer any

questions on this report or on the committee’s

activities. Shareholders are encouraged to email

their questions in advance to the Committee

Secretary at secretariat@keller.com.

Paula Bell

Chair of the Audit and Risk Committee

Approved by the Board of Directors and

authorised for issue on 10 March 2023.

102 Keller Group plc Annual Report and Accounts 2022

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Page Title

The committee has an extensive agenda of

items of business, aligned with the financial

reporting cycle, focusing on the audit,

assurance and risk processes within the

business which it deals with in conjunction

with senior management, the external auditor,

the internal audit function and the financial

reporting team.

The committee’s role is to ensure that

management’s disclosures reflect the

supporting detail provided to the committee

or challenge them to explain and justify their

interpretation and, if necessary, re-present

the information. The committee reports its

findings and makes recommendations to the

Board accordingly.

The committee is supported in this role

by using the expertise of EY. In doing so it

ensures that high standards of financial

governance, in line with the regulatory

framework as well as market practice for audit

committees going forward, are maintained.

Furthermore, PwC in their role as internal

auditors contribute to the assurance process

by reviewing compliance with internal

processes.

The committee met four times during the

year, with attendance at these meetings

shown on pages 84 and 101, and considered

the items of business shown on the table on

the right.

The committee also reviewed the information

presented in the Group’s preliminary

announcement, the company’s processes for

the preparation of the 2022 Annual Report

and the outcomes of those processes to

ensure that we were able to recommend

to the Board that the 2022 Annual Report

satisfied the requirement of being fair,

balanced and understandable.

The following processes are in place to

provide this assurance:

• Coordination and review of the Annual

Report and Accounts performed alongside

the formal audit process undertaken by EY.

• Guidance issued to contributors at an

operational level.

• Internal challenge and verification process

dealing with the factual content of the

information within the Annual Report

and Accounts.

• Comprehensive review by senior

management and external advisers to

ensure consistency and overall balance.

Activities of the committee

Item of business When

Regular updates on the Group’s system of internal controls and its

effectiveness.

At every meeting

Impact of audit and corporate governance reform and plan of action,

alignment with work under way on the ERP implementation and

impact on principal risks.

At every meeting

Progress review of the work undertaken to strengthen the financial

and business control landscape across the Group.

At every meeting

Review and challenge of the output of management’s assurance

map to assess controls maturity.

At every meeting

Management reports on the status of remediation actions identified

from completed internal audit reviews.

At every meeting

Responses and key themes arising from the Group’s annual

Electronic Internal Control Questionnaire.

February

Review of the Board delegated authorities. February

Review of the Group’s principal and emerging risks and definition of

the Group’s risk appetite.

December and

February

Updates on the risk management framework. At every meeting

Information assurance and security report aligned with the ERP. February and

September

Effectiveness and scope review of the internal audit function. December and July

Review and approval of the programme of internal audit reviews of

the Group’s operations and financial controls for 2023.

December

Review and approval of areas of significant accounting judgements. December and

February

Management report on the process for assessing the Group’s going

concern and viability.

December and

February

Basis of provisioning within the Group’s captive insurance vehicle. February

Review and approval of the EY engagement letter, audit fee and their

audit plan.

December, February

and September

Scope and results review of the external audit, its quality and

effectiveness, and the independence and objectivity of EY.

December and July

Group’s tax strategy review and approval for recommendation

to the Board.

February

Briefings on global tax developments which impact the Group. As necessary

Review of finance function resourcing and talent. September

Updates on matters relating to ethics, fraud and compliance. At every meeting

Review of policies including Whistleblowing and Non-audit services. February

Review of the Executive Directors’ expenses. February

Review of the committee’s effectiveness and terms of reference. December

Review and approval of new Anti-Bribery and Anti-Fraud Policy –

for recommendation to the Board.

July

Review and approval of new Treasury Policy – for recommendation

to the Board.

September

Strategic report Governance Financial statements

103

Governance

Page Title

A&R

Significant audit risks and accounting judgements

In planning its agenda and reviewing the audit plans of the internal and external auditors, the committee has taken into account significant operational and

financial issues and risks which may have had an impact on the company’s financial statements, internal controls and/or the delivery and execution of the

company’s strategy (including changes in the nature and significance of some of the Group’s principal risks).

The committee focused on assessing whether management had made appropriate judgements and estimates in preparing the company’s financial

statements, particularly with regard to the significant issues listed below. These issues were subject to robust challenge and debate between

management, the external auditor and the committee.

The committee also reviewed detailed external auditor reports outlining work performed and any issues identified in respect of key judgements and

estimates – in the independent auditor’s report on pages 126 to 137. The committee concluded there was no significant disagreement or unresolved

issue that required referral to the Board.

Significant issues considered How the committee addressed these issues

Accounting for construction contracts

There has been no change to the revenue accounting policy approved

in 2019 and set out in the Group Finance Standard issued in 2019. The

policy has been in effect and operational throughout 2022 and we

have seen consistent application of the revenue recognition

methodology applied in the businesses and across contract types.

Significant judgements are still required to be made on contracts

forwhich a degree of uncertainty remains after application of

themethodology.

During the year the committee monitored revenue recorded. This

included material revenue related to contracts that were subject to

settlement agreements and variation orders. The treatment

recommended by management was in line with the approved policy

and consistent with previous practice.

The committee considered these issues at all of its meetings during

the year and, in particular, in December 2022 and February 2023 when

it agreed with management’s recommendations. The reasonableness

of the recommendations made by management was also discussed

with EY.

Carrying value of goodwill

The Group tests goodwill annually, to assess whether any

impairment has been suffered. This test is carried out in accordance

with the accounting policy set out in note 2 to the financial

statements. The Group estimates the recoverable amount based on

value-in-use calculations. These calculations require the use of

assumptions, the most important being the forecast operating

profits, forecast reliability and the discount rate applied. The key

assumptions used for the value-in-use calculations are set out in

note 15 to the financial statements.

The committee considered the results of impairment tests of goodwill

prepared by management at its meetings in December 2022 and

February 2023. Following discussion, consultation with EY and

challenge, the committee agreed with the recommendations made

by management. This resulted in an impairment charge recognised for

the goodwill at Austral and Keller Sweden.

Provisioning

Given the nature of the contracts undertaken by the Group, there is

an inherent risk of claims being made against one or more of the

Group’s businesses in relation to performance on specific contracts.

These claims can include risks for which the Group has external

insurance coverage.

Recognition of liabilities for these claims requires judgement and

coordination between different Group functions.

The committee received regular updates on legal claims and

assurance was provided by the divisional legal teams who reviewed the

claims, with provisioning being assessed with input from divisional and

Group finance.

Details of provisions are set out in note 24 to the financial statements.

Non-underlying items

The disclosure of non-underlying items requires significant

judgement given that no accounting standard defines specifically

what items should or what items should not be presented as

non-underlying.

The committee considered management’s presentation of non-

underlying items at its meetings in July and December 2022, and

February 2023. The reasonableness of the assumptions made by

management was discussed with EY.

The committee agreed with the recommendations made by

management.

Audit and Risk Committee report continued

104

Keller Group plc Annual Report and Accounts 2022

Governance

Page Title

Mozambique LNG contract

In 2021 a large LNG contract in Mozambique was suspended due to

terrorist activity in the local area. The Group negotiated

reimbursement for the resulting standing costs, which is accounted

for as a contract modification. There is significant judgement to be

applied to the accounting for the contract modification, in particular

how to estimate the remaining cost to complete given the uncertainty

over the restart date for the project and the appropriate carrying

value of equipment on site.

The committee received regular updates on the discussions with the

customer regarding a restart date and plans to demobilise the

remaining equipment from site at the meetings during the year. They

considered the reasonableness of management’s judgements and

supporting evidence for the judgements. The reasonableness of the

approach and the assumptions included were discussed with EY. The

committee agreed with the recommendations made by management.

Going concern

Assessing the Group’s ability to meet its obligations as they fall due

in the near term requires estimates and judgements to be made

about the likely performance of the Group. The Group, like many

businesses in 2022, continued to operate within a global economy

that faced significant uncertainty caused by the war in Ukraine, rising

inflation and supply chain constraints leading to an increase in

average net debt levels. Through this period, going concern received

enhanced attention from external and internal stakeholders. On

each occasion that the Group has assessed its ability to continue as

a going concern, judgements and estimates have been made on

prevailing market conditions.

The committee considered the judgements and estimates made by

management in their assessment of the Group’s ability to continue as

a going concern for the period through to the end of March 2024, a

period of at least 12 months from when the financial statements are

authorised for issue, at its meetings in July and December 2022, and

February 2023.

Internal audit

The Keller internal audit programme is risk-based,

ensuring appropriate coverage dependent upon

the size of the entity and the perceived risks

associated with that operation. It also includes

theme-based audits to review adherence to

Group policies across the organisation.

The programme carried out by PwC during the

year consisted of 18 operational entity audits

and themed audits across 12 countries, which

together represented approximately 39% of the

Group’s budgeted revenue for the year.

The committee received and considered reports

from PwC which detailed the progress against the

agreed work programme and the findings. In the

majority of reviews, following the successful update

and deployment of the Group Finance Standards,

findings were limited to the need for formalising

maintenance of evidence of controls performed.

Where more significant control issues were

identified, we reviewed the findings, discussed

the remediation plans with management and

received updates on the progress of remediating

the control deficiencies. None of the control

deficiencies identified are significant in relation

to the preparation of the 2022 Annual Report

and Accounts.

The audits carried out during 2022 have

been performed against updated control

standards wherever they have been issued

and any improvement actions aligned to them.

The majority of control standards are now

in place and embedded across the Group,

helping to improve the control environment

and enable early identification of potential

controlbreakdowns.

Special internal audit reviews were commissioned

by the committee on the PLM Standard and on

the Suncoast inventory. As a result a full review, a

relaunch of the PLM Standard is currently under

way by management. and will be reported on

next year. The Standard will be renamed Project

Management Performance.

Overall, progress has been made across

business units and we have observed a

demonstrably stronger control environment,

however, not without challenges.

During the year, the committee completed an

internal effectiveness assessment of the internal

audit function, which measured its performance

against the quality assessment criteria provided

by the Institute of Internal Auditors. The work

of the internal audit function was rated as fully

conforming. For 2023, we expect to undertake

an external review of effectiveness and we will

report on the results innext year’s annual report.

External audit

The committee places great importance on

ensuring there are high standards of quality

andeffectiveness.

EY was appointed by shareholders at the AGM

held in May 2019, and reappointed in subsequent

years. The lead EY partner during the financial

year ended 31 December 2022 was Kevin Harkin,

who had no previous involvement with the Group

in any capacity prior toappointment.

The committee considered the effectiveness

and quality of the external audit process and

of EY as external auditor. This review included

consideration of comprehensive papers from

both management and the external auditor, and

meetings with management in the absence

of the external auditor. It considered matters

including: the competence of the key senior

members of the team and their understanding of

the business and its environment; the planning

process; effectiveness in identifying key risks;

technical expertise displayed by the auditor over

complex accounting matters; communicating

and resolving audit issues; timeliness of the audit

process; cost and communication of issues and

risks to management and the committee.

Strategic report Governance Financial statements

105

Governance

Page Title

A&R

There are a number of checks and controls

in place for safeguarding the objectivity and

independence of EY. These include open lines

of communication and reporting between

EY and the committee and, when presenting

their ‘independence letter’, EY discuss with the

committee their internal process for ensuring

independence.

We assess the effectiveness of the external

audit process on an ongoing basis, paying

particular attention to the mindset and culture,

skills, character and knowledge, quality control

and judgement of the external audit firm in their

handling of key judgements, responsiveness

to the committee and in their commentary

where appropriate on the systems of internal

control. By way of an example, please refer to the

Independent auditor’s report on page 132 where

EY’s actions to mitigate the risk arising out the

financial reporting fraud in Austral are explained.

We hold regular private meetings with the

external auditor, during which we discuss:

• How the auditor has identified and addressed

potential risks to the audit quality.

• The controls in place within the audit firm to

identify risks to audit quality.

• The level of challenge the auditor has

discussed with the management team and

their confidence on the control landscape.

• Whether the auditor has met the agreed audit

plan and how it has responded to any changes

that have been required.

• Feedback from key people involved in the audit.

• The content of the auditor’s management

letter.

A detailed assessment of the amounts and

relationship of audit and non-audit fees and

services is carried out each year and we

have developed and implemented a policy

regulating the placing of non-audit services

to EY. This should prevent any impairment of

independence and ensure compliance with the

updates to the Code and revised Auditing and

Ethical Standards with regard to non-audit fees.

Any work awarded to EY, other than audit, with a

value in excess of £50,000, requires the specific

pre-approval of the Board. In 2022, non-audit-

related fees paid to EY were less than 5% of

the total audit fee. These relate to the half-year

report review and are considered to be permitted

services. The breakdown is available in note 7 of

the accounts on page 164.

The external audit contract is put out to

tender at least every 10 years. As part of the

review of the effectiveness and independence

of the external auditor, we recommend the

reappointment of EY for the year ending

31 December 2023.

We confirm compliance with the provisions

of the Statutory Audit Services for Large

Companies Market Investigation (Mandatory

Use of Competitive Tender Processes and Audit

Committee Responsibilities) Order 2014.

Risk management and

internal control

The committee has a key role, as delegated by

the Board, in ensuring appropriate governance

and challenge around risk management. We also

set the tone and culture within the organisation

regarding risk management and internal control,

and this year this was evident in the actions we

have overseen (see page 107 overleaf) in light of

the Austral financial reporting fraud.

Further information on the Group’s risks can be

found on pages 34 to 43.

The system of internal control is designed

both to safeguard shareholders’ investment

and the Group’s assets, and to facilitate the

identification, evaluation and management

of the significant risks facing the Group. Key

elements of the Group’s system of internal

control include:

• An experienced and qualified finance function

which regularly assesses the possible financial

impact of the risks facing the Group.

• Monthly dashboard packs reviewed by the

Executive Committee and the Board.

• Detailed business unit budget reviews with

updates provided to the Board.

• Regular reports to the Board on health and

safety issues.

• Regular visits to operating businesses by head

office and divisional directors.

• Annual completion of internal control

questionnaires by business unit management.

• Reports to the Committee by PwC on the

findings of their internal audit reviews of the

controls, processes and procedures in place

at each of the Group’s in-scope units.

The Group aims to continuously strengthen

its processes, with the involvement of the

committee, to ensure these processes are

embedded throughout the organisation. In

2022, we worked with management to continue

to enhance the system of internal controls,

defining the following priorities and receiving

updates on their progress:

• Continued development of the Group’s

financial control framework and setting of

minimum control standards for all areas of

financial reporting and operational finance.

• Monitoring of the implementation of the

monthly sign-off checklist at each business

to certify that accounting controls have been

performed/complied with for the month.

• Review of internal control questionnaires, to

identify common areas for improvement as

well as to address specific risks and direct

assurance efforts.

• Mapping of the Group’s control environment

to assess controls maturity across all

functions within the Group.

Although we review the Group’s system of

internal controls, any such system can only

provide reasonable and not absolute assurance

against any material misstatement or loss.

The committee reviewed and challenged the

output of management’s assurance map

to assess controls maturity in the context

of the forthcoming audit and corporate

governancereform.

Anti-bribery and anti-fraud

The committee is responsible for reviewing the

Group’s procedures for detecting fraud, and

the systems and controls for preventing other

inappropriate behaviour with a financial impact.

During the year the committee recommended

a review to the policy to reinforce the processes

around fraud. As a result it was agreed that any

instances of fraud or suspected fraud should

be reported directly to the Group Head of Risk

and Internal Audit and the Group Company

Secretary and Legal Advisor, or anonymously via

the Group Whistleblowing hotline.

All reports of suspected or actual fraud

will be treated with confidentiality and

thoroughly reviewed and assessed. An

effective anti-fraud response plan will be

developed and implemented in proportion to

the level of fraud risk identified and all fraud

investigations and their results will be reported

to senior management and then escalated to

thecommittee.

During the year, the committee was kept fully

apprised in regular updates on the progress and

findings of investigations of cases of alleged

fraud and any remedial actions taken.

Audit and Risk Committee report continued

106 Keller Group plc Annual Report and Accounts 2022

Governance

Page Title

Financial reporting fraud in the

Austral business unit

Following an internal management operational

review, the Group announced in January 2023

that it had identified a financial reporting fraud

in the Austral business in Australia, within

the AMEA Division. As a result, management

commissioned an external forensic investigation

of the incident. The report was submitted to

the committee in February 2023. The report

concluded that the fraudulent activity had

not resulted in a cash loss to the Group. In

addressing the fraud, we followed all of the

procedures established by the Company’s newly

revised Anti-bribery and anti-fraud policy, as

described elsewhere in this report.

Looking forward

In 2023 our priorities will be:

• Monitoring improvement actions

identified in 2022.

• Monitoring the progress of a new

initiative to refresh the global finance

organisation structure.

• Further developing the approach to

fraud risk assessment.

• Continued assessment of the

Government’s audit and corporate

governance reform along with the

company’s response to meeting

and implementing the revised

requirements.

• Continued review of cyber security risk

mitigation plan.

• Monitoring the implementation of

the redesigned PLM Standard, to

be renamed Project Management

Performance Standard.

• Delivering and successfully

implementing the new ERP system.

The following Group-wide actions have been

initiated by management and approved by the

committee:

• enhancement and relaunch of the

standard operating procedure that governs

project performance from bid through to

demobilisation;

• an independent review of financial reporting

risk and controls to report in the second

quarter of 2023;

• all finance reporting lines changed to the

Group CFO – they are currently reporting to

the Divisional Presidents; and

• acceleration of a finance transformation

initiative ahead of the ERP rollout.

In addition, the committee will constantly

appraise the opportunities for extending the

audit and assurance scope and utilising technical

subject matter experts where appropriate to

ensure the findings of the report are addressed.

Corporate governance

The committee’s terms of reference, which were

reviewed during the year, are available on our

website (www.keller.com) and on request from

the Committee Secretary.

It is intended that the committee is comprised

of at least three members, all of whom are

independent Non-executive Directors of the

company with the necessary range of relevant

sector, financial and commercial expertise

to enable the committee to fulfil its terms of

reference. They do so by providing independent

and robust challenge to management and our

internal and external auditors, and ensuring

there are effective and high quality controls

in place and appropriate judgements are

taken. The Code requires the inclusion of one

financially qualified member (as recognised by

the Consultative Committee of Accountancy

Bodies) with recent financial expertise. Currently,

the Committee Chair fulfils this requirement.

We invite the Chairman, Chief Executive Officer,

Chief Financial Officer, Group Financial Controller,

Group Head of Risk and Internal Audit, the Group

Company Secretary and Legal Advisor, the

company’s external auditor, EY, and PwC in

their role as internal auditor, to all meetings.

This picture has been taken at one of the

site visits the Board conducted in New

York in October 2022, where they learned

about secant piles and jet grouting and

met with local colleagues and divisional

management.

On two occasions, the committee met privately

with EY without management being present

and we also met twice during the year with PwC

and the Group Head of Risk and Internal Audit

without management present.

In line with best practice, the committee

conducted an effectiveness review of the

business covered during the year against its

terms of reference.

Collectively, the committee has the competence

relevant to the sector as required by the

provisions of the Code, as well as the contracting

and international skills and experience required

to fully discharge its duties. The committee is

authorised by the Board to seek any information

necessary to fulfil these duties and to obtain any

necessary independent legal, accounting or other

professional advice, at the company’s expense.

Strategic report Governance Financial statements

107

Governance

Board site visit in 2022

Governance

Page Title

REM

Annual statement from the Chair

of the Remuneration Committee

Eva Lindqvist

Chair of the Remuneration Committee

Committee composition during 2022 Meeting attendance

Eva Lindqvist (Chair)

Paula Bell

Juan G. Hernández Abrams*

Baroness Kate Rock

Nancy Tuor Moore**

* Member from February 2022 ** Member until May 2022

See biographies on pages 80 and 81

Whilst Keller delivered

strong growth in revenue

and underlying profits,

there were also a number of

challenges and headwinds.”

Committee highlights in 2022

Monitored developments in corporate governance and

market trends, including the challenges presented by

increasing levels of inflation and the impact of the ‘cost of

living crisis’, and the impact across our wider workforce.

Benchmarked and assessed the remuneration packages

of the Executive Directors and the Executive Committee.

Determined bonus outcomes for 2022 and the vesting

outcome of the 2020–22 Performance Share Plan (PSP)

awards.

Set base salaries and established Executive Director

bonus arrangements for 2023; reviewed base salaries

and bonus arrangements for the Executive Committee

for 2023; approved 2023–25 LTIP awards to Executive

Directors and senior executives.

Reviewed its terms of reference and the effectiveness of

the committee.

Role of the committee

The role of the committee is to determine and agree with the Board the

framework or broad policy for the remuneration of the Chairman, the Executive

Directors, their direct reports and such other members of the executive

management as it is designated to consider. In addition, the committee is

responsible for determining the total individual remuneration packages of

the Chairman, the Executive Directors, the Group Company Secretary and

Legal Advisor and other senior executives, ensuring compliance with legal and

regulatory requirements whilst enhancing Keller’s long-term development.

The committee also:

• determines the measures and targets for annual bonus plan objectives

and outcomes for the Executive Directors, Executive Committee and

other senior executives;

• exercises the powers of the Board in relation to share plans;

• sets and oversees the selection and appointment process of its

remuneration advisers;

• monitors developments in corporate governance and, particularly, any

impacts on remuneration practices; and

• reports on its activities to shareholders on an annual basis.

The Chair of the committee reports on the committee’s activities at the

Board meeting immediately following each meeting.

108 Keller Group plc Annual Report and Accounts 2022

Governance

Page TitleAnnual statement from the Chair

of the Remuneration Committee

Dear shareholder

On behalf of the committee, I am pleased

to provide an overview of Executive

Director remuneration for the year

ended 31December2022.

2022 business performance

and incentive outcomes

Keller delivered a strong performance in 2022

with revenue for the Group of close to £3bn,

up 24% (at constant currency). Underlying

operating profit increased to £108.6m, up

12% at constant currency. Underlying diluted

earnings per share increased by 20% to 100.7p

per share (2021: 84.2p per share). Net debt

(on a bank covenant IAS 17 basis) increased by

£99.4m to £218.8m, equating to a net debt/

EBITDA leverage ratio of 1.2x (2021: 0.8).

The targets for the 2022 annual bonus for

executive management were set by the

committee in February of last year and remained

unchanged throughout the year. When

determining the bonus outcome, the committee

considered overall company performance over

the period, weighing the successful execution of

the strategy and continued growth of the Group

against the wider macro-economic environment

and, of course, the fraud at Austral, Keller’s

business unit in Australia, more details of which

can be found in the Strategic report.

Whilst Keller delivered strong growth in revenue

and underlying profits, there were also a

number of challenges and headwinds, including

the financial reporting fraud at Austral, that

impacted the 2022 annual bonus outcomes.

The financial measures, Group profit before tax

and net debt, did not pay out. There was a small

measure of progress against the corporate

objectives and the Executive Directors achieved

6% out of a possible 30% maximum. Overall, the

annual bonus outturn was 6% of maximum.

After considering all the relevant factors for the

2022 bonus, the committee’s view was that the

outcome was fair and appropriate from both a

performance perspective and also taking into

account the wider stakeholder experience.

Therefore, no discretion was exercised.

The performance of the LTIP granted to

executives in 2020 and vesting in March 2023

was improved from the previous LTIP cycle. The

EPS and ROCE targets were partially met during

the performance period, with TSR vesting at

maximum. Overall, the 2020 LTIP awards vested

at 61.9% of maximum.

The committee carefully considered the

vesting levels of the 2020 award, with additional

reference to both the shareholder and wider

workforce experience. It also specifically

considered share price movements and was

satisfied that there had been no inappropriate

windfall gains over the period . The committee

determined that the LTIP outcome fairly and

appropriately reflected performance over the

three years and no discretion was exercised.

In light of the restatement of the 2021 accounts

due to the Austral fraud, the committee also

reconsidered the outturn for the 2021 annual

bonus together with the 2021 vesting of the

LTIP granted in 2019. Having reviewed all of the

information the committee found there to be no

impact to the outcomes agreed in that year, and

malus and clawback were not applied.

2023 salary review

Salary increases for UK-based employees

across the Group were generally around 8%,

effective 1 January 2023. The committee

has considered the impacts of rising inflation

and cost of living challenges with regard to

the wider workforce and has positively noted

management’s efforts to provide additional

security and robustness of earnings to those

particularly impacted in the group.

Michael Speakman, CEO, and David Burke,

CFO, were awarded salary increases of 5%. As

additional context, the CEO and CFO are already

aligned with the wider workforce pension rate of

7% of salary.

Year ahead: 2023 annual bonus

plan and LTIP metrics

As set out last year, management’s focus will be

on driving value by focusing on, and investing

in, our key markets and the sustainability of

operating profits and enhanced margins, whilst

maintaining a robust balance sheet.

In 2022, the company committed to ambitious

net zero targets for all three of our emission

scopes which will culminate in carbon neutrality

by 2050 at the latest and a Scope 2 reduction

target formed one of management’s corporate

objectives for 2022. Recognising the continued

importance of achieving these goals, we have

agreed a further Scope 2 reduction target as

one of management’s corporate objectives

for 2023. Further detail on the 2023 corporate

objectives will be disclosed in the 2023 Annual

remuneration report.

The four LTIP measures agreed in 2021, and

used in 2021 and 2022, continue to support the

delivery of the strategy and are therefore carried

forward into 2023. Together with the targets for

the LTIP for the year ahead, the measures are

disclosed in the 2022 Directors’ remuneration

report. See page 115 for further details.

2023 Annual General Meeting

We very much hope that you will support our

2022 Annual report on remuneration at the AGM

in May. I will be available at the AGM to answer

any questions you may have about our work.

Please also feel free to email your questions

to the Group Company Secretary and Legal

Advisor at secretariat@keller.com and we will

respond to them directly.

Eva Lindqvist

Chair of the Remuneration Committee

Approved by the Board of Directors and

authorised for issue on 10 March 2023.

Strategic report Governance Financial statements

109

Governance

Page Title

REM

Remuneration in context

Linkage to all-employee pay

The committee reviews changes in

remuneration arrangements in the workforce

generally as we recognise that all our people

play an important role in the success of the

company. Keller is committed to creating an

inclusive working environment and to rewarding

our employees throughout the organisation in

a fair manner. In making decisions on executive

pay, the Committee considers wider workforce

remuneration and conditions to ensure that they

are aligned on an ongoing basis.

As part of our commitment to fairness, we have a

section in this report (see ESG and sustainability)

which sets out more information on our wider

workforce and our diversity initiatives. We

recognise there is always an opportunity to

improve in relation to theseissues.

Shareholder views

The committee engages proactively with

the company’s major shareholders and is

committed to maintaining an open dialogue.

The committee reviews any feedback

received from shareholders as a result of

the AGM process. Committee members are

available to answer questions at the AGM and

throughout the rest of the year. The committee

takes into consideration the latest views of

investor bodies and their representatives,

including the Investment Association, the

Pension and Lifetime Savings Association and

proxy advice agencies such as Institutional

ShareholderServices.

Remuneration principles

We strongly believe in fair and transparent

reward throughout the organisation and when

making decisions on executive remuneration

the committee considers the context of

wider workforce remuneration. This section

shows how the 2018 Code is embedded in

our remuneration principles and how they are

cascaded throughout the organisation. The

diagram on the following page shows how

the policy is aligned with the factors set out in

Provision 40, and how our principles and policy

are aligned with the 2018 Code.

The committee sets the Remuneration Policy for

Executive Directors and other senior executives,

taking into account the company’s strategic

objectives over both the short and the long term

and the external market.

Our purpose: Building the foundations for a sustainable future

Embedding our purpose and

vision in our remuneration

guiding principles

• Support our purpose, values and our

wider business goals.

• Drive long-term sustainable

performance for the benefit of all our

customers, shareholders and wider

stakeholders.

• Be simple, transparent and easily

understood by internal and external

stakeholders.

• Attract, motivate and retain all our

employees with diverse backgrounds,

skills and capabilities.

Cultural alignment and proportionality

• The committee ensures that the overall

reward framework embeds our purpose

and values.

• The committee reviews the executive

reward framework regularly to ensure it

supports the company’s strategy.

Proportionality and risk

• A significant proportion of remuneration is

delivered in variable pay linked to corporate

performance.

• Performance measures/targets for

incentives are objectively determined.

• Outcomes under incentive plans are based

on holistic assessment of performance.

Simplicity, clarity and predictability

• The committee ensures the highest

standards of disclosure to our internal and

external stakeholders.

• The committee makes decisions on

executive pay in the context of all

employees and the external environment.

Cultural alignment and risk

• The committee ensures that a significant

portion of reward is equity-based and

thereby linked to shareholder return.

• Executive Directors are required to build

significant personal shareholdings in the

company and this is regularly monitored by

the committee.

Clarity

The Committee ensures that Executives are provided with a remuneration opportunity which

is competitive against companies of a similar size and complexity, with a strong emphasis on

the variable elements.

How we address the requirements under Provision 40

The committee addresses the need to balance

risk and reward. The Committee monitors the

variable pay arrangements to take account of

risk levels, ensuring an emphasis on long-

term and sustainable performance. The

Committee believes that the incentive plans are

appropriately managed and that the choice of

performance measures and targets does not

encourage undue risk-taking by the Executives

so that the long-term performance of the

business is not compromised by the pursuit of

short-term value. The plans incorporate a range

of internal and external performance metrics,

measuring both operational and financial

performance over differing and overlapping

performance periods, providing a rounded

assessment of overall company performance.

110 Keller Group plc Annual Report and Accounts 2022

Governance

Page TitleRemuneration in context

Alignment of the policy to the provisions of the 2018 Code

The company’s performance remuneration is based on supporting the implementation of the company’s strategy measured through

KPIs which are used for the annual bonus and LTIP. This provides clarity to all stakeholders on the relationship between the successful

implementation of the company’s strategy, including its sustainability framework, and the remuneration paid.

Shareholders are given full information on the potential values

which can be earned under the annual bonus and LTIP plans on

their approval. In addition, all the checks and balances set out above

under ‘Risk’ are disclosed at the time of shareholder approval.

The company’s incentive plans clearly reward the successful

implementation of the strategy and our environmental ambitions,

and through deferral and measurement of performance over a

number of years ensure that the Executives have a strong drive

to ensure that the performance is sustainable over the long term.

Poor performance cannot be rewarded due to the Committee’s

overriding discretion to depart from the formulaic outcomes

under the incentive plans if they do not reflect underlying

business performance.

The policy includes the following:

• setting defined limits on the maximum awards which can be earned;

• requiring the deferral of a substantial proportion of the incentives

in shares for a material period of time, helping to ensure that the

performance earning the award was sustainable, and thereby

discouraging short-term behaviours;

• aligning the performance conditions with the agreed strategy

of the company as well as our sustainability and net zero

carbonambitions;

• ensuring a focus on long-term sustainable performance through

the LTIP; and

• ensuring there is sufficient flexibility to adjust payments through

malus and clawback and an overriding discretion to depart from

formulaic outcomes, especially if it appears that the behaviours

giving rise to the awards are inappropriate or that the criteria

on which the award was based do not reflect the underlying

performance of the company.

A key principle of the company’s culture is a focus on our stakeholders and their experience; this is reflected directly in the type of performance

conditions used for the bonus. The focus on long-term sustainable performance is also a key part of the company’s culture. In addition, the

measures used for the incentive plans are measures used to determine the success of the implementation of the strategy.

Clarity:

Simplicity:

Alignment to culture:

Predictability: Proportionality:

Strategic report Governance Financial statements

111

Governance

Page Title

REM

Remuneration at a glance

Overview of Remuneration Policy – How Executive Directors will be paid in future years

Shareholders approved a revised policy at the 2021 AGM, full details of which can be found in our 2020 annual report.

An overview of our policy and how it is proposed to apply in 2023 is set out below:

Fixed pay

Annual bonus

Shareholding guideline

Performance share plan (PSP)

Remuneration in 2023

Salary CEO: £617,715 – 5% increase from

2022, below salary increases awarded

to UK-based employees of 8%

CFO: £405,563 – 5% increase from

2022, below salary increases awarded to

UK-based employees of 8%

Pension 7% of salary – aligned with the wider workforce rate

Benefits Includes car allowance, private health care and life assurance and long-term disability insurance

Attract and retain

high-calibre

individuals needed

to execute and

deliver on the

Group’s strategic

objectives.

Rewards

achievement of

short-term financial

and strategic targets.

Post-employment guideline: 100% of in-post

shareholding (or actual shareholding if lower) in

year 1 and at least 50% in year 2.

Focus on delivering

value creation for

shareholders and

sustainable financial

performance for the

company over the

long term.

Guideline applies in

post, and extends

beyond tenure.

Policy

The policy approved

in 2021 introduced or

formalised a number

of good governance

features in line

with evolving best

practice.

Cash element

2023 bonus metrics:

• 50% Underlying

operating profit

• 20% Net debt

• 30% Corporate

objectives

2023 PSP metrics:

• 25% Cumulative EPS

• 25% ROCE

• 25% Relative TSR

• 25% Operating margin

25% of bonus deferred

into shares for two years

Maximum opportunity – up to 150% of salary.

Awards subject to malus and clawback.

3-year

performance period

2-year

holding period

Maximum opportunity – up to 150% of salary.

For 2023, CEO will receive 150% of salary and

CFO will receive 125% of salary.

Awards subject to malus and clawback.

In-post guideline: 200% of salary

Introduced

• Post-employment shareholding requirement.

• Discretion for the committee to override

formulaic outcomes.

Formalised

• Malus and clawback policy.

• Alignment of Executive Directors’ pensions

to the general workforce rate.

• Mitigation measures in service contracts.

• Settlement of deferred bonus and dividend

equivalents in shares.

✓ Aligned with

our strategy

✓ Aligned with

shareholders

✓ Aligned with

strategic KPIs

✓ Drive quality

and sustainable

performance

112 Keller Group plc Annual Report and Accounts 2022

Governance

Page TitleRemuneration at a glance

250

Keller

FTSE 250 FTSE All -Share

31 Dec 12 31 Dec 13 31 Dec 14 31 Dec 15 31 Dec 16 31 Dec 17 31 Dec 18 31 Dec 19 31 Dec 20 31 Dec 21 31 Dec 22

125

175

200

225

100

150

Remuneration for 2022 – What Executive Directors earned during 2022

The chart below shows the growth in value of a hypothetical £100 holding in Keller Group plc ordinary shares over 10 years, relative to a hypothetical

£100 holding in the FTSE250 and FTSE All-Share Indices.

Annual bonus Weighting Threshold Target Max Outcome (% of max)

PBT, £m

60% 95.6 112.5 118.1 0%

Performance outcome: 93.5

Net debt (IAS 17 basis), £m

20% 117.6 112.0 95.2 0%

Performance outcome: 218.8

Corporate objectives

20% Summary of objectives on page 115 6%

Actual: 6% of max

Overall 6%

PSP (2020–22) Weighting Threshold Max Outcome (% of max)

EPS

50% 270p 310p 46%

Actual: 281.2p

TSR

25% Median Above upper quartile 100%

Actual: Upper quartile

ROCE

25% 14% 20% 55.7%

Actual: 16.4%

Overall 61.9%

1 At 2022 actual exchange rates, before non-underlying items.

2 Average of the three-year ROCE for 2020–22.

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113

Governance

Page Title

REM

Annual remuneration report

The following section provides details of how Keller’s Remuneration Policy

was implemented during the financial year ended 31 December 2022.

Single total figure of remuneration for Executive Directors (audited)

The table below sets out a single figure for the total remuneration received by each Executive Director for the financial years ended 31 December 2021

and 2022:

Executive Directors

Michael Speakman David Burke

2022

£000

2021

£000

2022

£000

2021

£000

Salary

588 571 386 375

Taxable benefits

14 14 20 20

Pension benefits

41 40 27 26

Total fixed pay 643 625 433 421

Annual bonus

35 771 23 506

PSP

619 229

– –

Total variable pay 654 1,000 23 506

Total pay 1,297 1,625 456 927

1 Taxable benefits consist primarily of a car allowance of £12,000 and £18,000 for Michael Speakman and David Burke respectively.

2 Pension benefits represent cash in lieu of pension for Michael Speakman. David Burke’s pension contribution is paid into a private SIPP.

3 The annual bonus represents the value of the bonus receivable in respect of the Group’s annual bonus plan for the relevant financial year. 25% of the bonus shown above will be deferred into Keller

shares for a period of two years.

4 For the PSP, the value shown for 2022 reflects the final vesting outcome of the 2020 PSP award with performance measured over the three-year performance period 1 January 2020 to 31 December

2022. The final vesting outcome of the 2020 PSP award was 61.9% of maximum. The value of the award was calculated using a three-month average closing share price to 31 December 2022 of

803.49p. See page 115 for further details. The 2020 award will vest on 15 March 2023. Using the average closing share price to 31 December 2022, the price appreciated from the date of the award.

For Michael Speakman, the value shown for 2022 also includes the final vesting outcome of an additional PSP award reflecting his service as CEO from 1 September 2019–31 December 2019.

The award was made at the same time as the 2020 PSP awards in March 2020, but the committee considers it to be remuneration awarded in 2019 supplementing his 2019 award.

5 The PSP for 2021 has been restated to reflect the share price on the vesting date compared with the estimate published in the 2021 Annual Report. The share price on the date of vesting was 760p

compared to the three-month average share price to 31 December 2021 of 921.6p, which was used to estimate the value in the 2021 Annual report. The 2021 PSP vested on 8 March 2022 and the

final vesting outcome was 36.6% maximum.

Total pension entitlements (audited)

Michael Speakman and David Burke’s pension rate has been set at 7% of base salary in line with the contribution rate provided to the majority of the UK

workforce. The committee keeps the pension entitlement of the Executive Directors under review in the context of any changes in pension provision

across the Group.

2022 annual bonus

The 2022 annual bonus was based 80% on the achievement of stretching profitability and net debt targets and 20% on individual corporate objectives

aligned to the delivery of key strategic and operational priorities. Overall, the bonus outcome for 2022 was 6% of the maximum payout, for each Executive

Director, based on performance as set out below.

Measures

2022 measurement ranges and outcome Bonus as % of salary

Threshold

Target

50%

Maximum

100%

Performance

outcome

Executive Directors

Michael Speakman David Burke

Max % Outcome % Max % Outcome %

Group PBT, £m 95.6 112.5 118.1 93.5 90 – 90 –

Group net debt (IAS 17 basis), £m 117.6 112.0 95.2 218.8 30 – 30 –

Total Group measures 120 – 120 –

Corporate objectives assessment 30 6 30 6

Total bonus 150 6 150 6

Base salary £588,300 £386,250

Bonus based on performance outcomes 6 £35,298 6 £23,175

1 At 2022 actual exchange rates, before non-underlying items.

114 Keller Group plc Annual Report and Accounts 2022

Governance

Page TitleAnnual remuneration report

Corporate objectives

Corporate objectives are measurable deliverables that are jointly shared by the Executive Directors and the Executive Committee and are focused on

supporting the delivery of Keller’s key strategic activities. The committee determined that this was an appropriate basis to incentivise management to

increase collaboration on strategic activities. The categories of the corporate objectives have maximums from 6% to 12% of base salary that can be

attained, with an overall maximum of 30% of base salary available (20% weighting of total annual bonus plan for Executive Directors). The committee

retains the right to apply discretion to the overall evaluation of the attainment of corporate objectives.

Corporate objective Opportunity (maximum) Actual performance

Outcome

(maximum 30%)

Improved project performance

Reducing the number of loss-making

projects (LMP) 12.0% of base salary LMP performance did not meet the target for the year. 0.0%

An absolute 10% reduction in Scope 2

market-based emissions

Using the 2019 reported number as

a baseline 6.0% of base salary Target achieved. 6.0%

Margin enhancement

Improving the margin in our

business units 12.0% of base salary Margin performance did not meet the target for the year. 0.0%

Attainment as assessed by

the Committee 6.0%

Discretion applied 0% reduction

Final outcome 6% achieved

2022 annual bonus outcomes

The financial targets for Keller were not met in 2022.

The objective scoring by the committee for performance in 2022 against corporate objectives resulted in an outcome of 6% of salary.

As described in the Chair’s letter, the committee considered all relevant factors when determining the level of bonus payout and concluded that it was

appropriate for the financial targets not to pay out and for the corporate objectives to partially pay out and no discretion was exercised.

2020–22 Performance Share Plan (PSP) outcomes (audited)

Based on EPS and TSR performance over the three years ended 31 December 2022, the PSP awards made in 2020 will vest as follows:

Measures

Vesting schedule and outcome

% of award that will vest

0% 25% 100% Outcome Vesting %

50% weight

Cumulative earnings per share (EPS) over three years

Below 270p 270p 310p 281.2p 23.0

25% weight

Keller’s TSR ranking relative to the constituents of

the FTSE 250 comparator index

Less than

median Median

Upper quartile

or higher

Above upper

quartile 25.0

25% weight

ROCE over three years

3, 4

Below 14% 14% 20% 16.4% 13.9

Total vesting 61.9

1 EPS is before non-underlying items on an IAS 17 basis.

2 Excluding investment trusts and financial services.

3 The Group adopted IFRS 16 on 1 January 2019, as disclosed in note 2 to the consolidated financial statements, and comparative financial measures have not been restated. The outcome for ROCE has

been prepared on the basis of IAS 17, the previous leasing standard.

4 Average of the three-year ROCE for 2020–22.

The committee carefully considered the vesting levels of the 2020 award, with additional reference to both the shareholder and wider workforce

experience. It also specifically considered share price movements and was satisfied that there had been no inappropriate windfall gains over the period.

The committee determined that the LTIP outcome fairly and appropriately reflected performance over the three years and no discretion was exercised.

In line with the policy, the committee has the ability to exercise malus and clawback with regard to incentive awards in certain circumstances as outlined in

the policy. Overall, the committee considers that the policy has operated as it was intended during 2022.

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Governance

Page Title

Scheme interests awarded in 2022 (audited) 2022–24 PSP

The three-year performance period over which performance will be measured began on 1 January 2022 and will end on 31 December 2024. Awards will

vest in March 2025, subject to meeting performance conditions. Awards were made as follows:

Executive Director Date of grant

Shares over which

awards granted

Market price

at award (£)

Face value of the

award at grant

Face value at

threshold (£)

Face value at

maximum (£) Performance period

Michael Speakman 15 March 22 102,858 7.811 150% of salary 200,830 803,321 1 Jan 22 – 31 Dec 24

David Burke 15 March 22 61,820 7.811 125% of salary 120,704 482,814 1 Jan 22 – 31 Dec 24

1 The average of the daily closing price on 9, 10 and 11 March 2022 of the company’s shares on the main market of the London Stock Exchange.

Vesting of the 2022–24 Performance Awards is subject to achieving the following performance conditions:

Measures

Vesting schedule

% of award that will vest

0% 25% 100%

25% weight

Cumulative EPS over three years

Below 330p 330p 400p

25% weight

Keller’s relative TSR performance vs FTSE 250

Index over three years Below median Median Upper quartile

25% weight

Average ROCE over three years Below 12% 12% 18%

25% weight

Operating profit margin in year three Below 5.5% 5.5% 6.5%

1 EPS and ROCE are before non-underlying items on an IFRS 16 basis.

2 Excluding investment trusts and financial services.

To reflect the impact of any changes in IFRS accounting standards, the committee will consider adjusting financial targets appropriately for all subsisting

PSP awards, ensuring that they are not materially easier or harder to satisfy than the original targets. Any amended targets determined by the committee

will be disclosed to shareholders in the next Directors’ remuneration report.

Directors’ interests (audited information)

The table below sets out the beneficial interests of the Directors and their families in the share capital of the company as at 31 December 2022. None of

the Directors has a beneficial interest in the shares of any other Group company. There have been no changes in the Directors’ interests in shares since

31 December 2022 and the date of this report.

Director

Ordinary shares at

31 December 2022

Ordinary shares at

31 December 2021

Michael Speakman 63,008 44,280

David Burke 4,872 4,872

Peter Hill CBE 53,000 53,000

Nancy Tuor Moore1 3,000 3,000

Eva Lindqvist – –

Baroness Kate Rock 2,500 2,500

Paula Bell 1,581 1,581

Juan G. Hernández Abrams2 – –

1 Nancy Tour Moore retired from the Board on 18 May 2022.

2 Juan G. Hernández Abrams was appointed to the Board on 1 February 2022.

Executive Directors’ shareholding guideline (audited information)

The table below shows the shareholding of each Executive Director against their respective shareholding guideline as at 31 December 2022.

Shares held Awards held

Shareholding guideline %

salary/fee

Current shareholding %

salary/feeOwned outright or vested

Unvested and subject to

performance conditions

Unvested without

performance conditions

Michael Speakman 63,008 354,667 51,715 200% 86%

David Burke 4,872 126,611 20,892 200% 10%

1 Dividend accruals are included in these numbers, totalling 19,838 shares for Michael Speakman and 7,187 shares for David Burke.

2 Deferred awards.

3 Reflects closing price on 31 December 2022 of 800p.

Annual remuneration report continued

116

Keller Group plc Annual Report and Accounts 2022

Governance

Page Title

Keller

FTSE 250 FTSE All -Share

31 Dec 12 31 Dec 13 31 Dec 14 31 Dec 15 31 Dec 16 31 Dec 17 31 Dec 18 31 Dec 19 31 Dec 20 31 Dec 21 31 Dec 22

250

125

175

200

225

100

150

Supplementary information on Directors’ remuneration

Outstanding Performance Share options/awards

Details of current awards outstanding to the Executive Directors are detailed in the table below:

At 1 January

2022

1,2

Granted during

the year

Vested in

year

Lapsed during

the year

Dividend

equivalents

accrued during

the year

At 31 December

2022

Vesting date

Michael Speakman

8 March 2019 82,467 – 30,199 52,268 – – 08/03/22

9 March 2020 (deferred award) 5,250 – 5,250 – – – 09/03/22

9 March 2020

4,812 – – 3,052 90 1,850 15/03/23

9 March 2020 115,483 – – – 5,916 121,399 15/03/23

15 March 2021 (deferred award) 24,512 – – – 1,255 25,767 15/03/23

15 March 2021 107,151 – – – 5,489 112,640 15/03/24

15 March 2022 (deferred award) - 24,684 – – 1,300 25,948 15/03/24

15 March 2022 - 112,990 – – 5,788 118,778 15/03/25

David Burke

15 March 2021(deferred award) 3,669 – – – 187 3,856 15/03/23

15 March 2021 58,621 – – – 3,004 61,625 15/03/24

15 March 2022 (deferred award) - 16,206 – – 830 17,036 15/03/24

15 March 2022 - 61,820 – – 3,166 64,986 15/03/25

1 For awards granted in 2018 to 2020, performance conditions are measured 25% on TSR outperformance of the FTSE 250 excluding investment trusts and financial services, 50% on EPS over three

years of the performance period, and 25% on ROCE. Awards granted in 2021 are measured 25% on TSR outperformance of the FTSE 250 excluding investment trusts and financial services, 25% on

EPS over three years of the performance period, 25% on ROCE, and 25% on operating margin in year three. Each performance period ends on 31 December of the third year.

2 Includes dividend equivalents added as shares since the date of grant.

3 The committee decided to make an additional PSP award to Michael Speakman to reflect his service as CEO from 1 September to 31 December 2019. This award carries the same performance

measures as the 2019–21 PSP award and will vest in three years from the date of grant. The award was made at the same time as the 2020 PSP awards in March 2020, albeit the committee considers it

to be remuneration awarded in respect of 2019 and supplements his 2019 PSP award.

CEO pay for performance comparison with TSR performance

The graph below shows the company’s performance, measured by TSR, compared with the performance of the FTSE 250 Index (excluding investment

trusts and financial services) and the FTSE All-Share Index. These indices have been selected for consistency with the comparator groups used to

measure TSR performance for PSP awards.

This graph shows the growth in value of a hypothetical £100 holding in Keller Group plc ordinary shares over 10 years, relative to a hypothetical £100

holding in the FTSE 250 and FTSE All-Share Indices.

Strategic report Governance Financial statements

117

Governance

Page Title

Annual remuneration report continued

The table below details the CEO single figure of remuneration over the same period.

2013 2014 2015

2016 2017 2018

2019

2020 2021 2022

CEO single figure of remuneration (£000) 1,870 1,630 1,420 715 1,427 639 921 1,433 1,685

1,297

Annual bonus as a % of maximum opportunity 84% 22% 85% 12% 59% 0% 38% 93% 90% 6%

PSP vesting as a % of maximum opportunity 100% 100% 67.3% 0% 33.9% 0% 26.5% 10.6% 36.6% 61.9%

1 The CEO single figure of remuneration has been calculated using Justin Atkinson’s emoluments for the period from 1 January 2015 to 14 May 2015 and Alain Michaelis’ emoluments for the period

14May 2015 to 31 December 2015.

2 The Committee exercised its discretion and applied 0% bonus in 2018.

3 The CEO single figure of remuneration has been calculated using Alain Michaelis’ emoluments for the period from 1 January 2019 to 30 September 2019 and Michael Speakman’s emoluments for

theperiod 1 October 2019 to 31 December 2019.

4 Reflects the restatement of the PSP for 2021 to reflect the share price on the vesting date compared with the estimate published in the 2021 Annual Report. See page 114..

CEO pay ratio

The table below shows the comparison of the CEO’s single total figure of remuneration (STFR) to the 25th, median and 75th percentile STFR of full-time

equivalent UK employees on a Group-wide basis consistent with The Companies (Miscellaneous Reporting) Regulations 2018.

Financial year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio

2019 Option A 26:1 19:1 15:1

2020 Option A 37:1 24:1 18:1

2021 Option A 43:1 30:1 22:1

2021 (restated with actual bonuses) Option A 43:1 30:1 22:1

2022 Option A 34:1 20:1 15:1

The employees used for the purposes of the table above were identified as based in the UK and on a full-time equivalent basis as at 31 December 2022.

Option A was chosen as it is considered to be the most accurate way of identifying the relevant employees required by The Companies (Miscellaneous

Reporting) Regulations 2018.

The CEO pay ratio has been calculated to show the remuneration of the CEO Michael Speakman, who has been CEO on a permanent basis for the full

financial year.

Due to the timing of bonus payouts for the 2022 performance year, we have used the bonus payout for 2022 for the CEO and the bonus payouts for the

comparison population that was paid in 2022, in respect of the 2021 performance year. We will update these figures with the actual amounts paid in 2023,

in respect of the 2022 performance year, in next year’s Annual Report on remuneration.

The following table provides salary and total remuneration information in respect of the employees at each quartile.

Financial year Element of pay 25th percentile employee Median employee 75th percentile employee

2021 reported Salary £31,823 £44,986 £58,806

Total remuneration £39,320 £56,531 £76,235

2021 restated with actual bonus figures Salary £30,680 £41,966 £55,989

Total remuneration £38,880 £56,777 £75,217

2022 Salary £31,576 £46,662 £62,567

Total remuneration £37,753 £63,434 £85,133

The Board has confirmed that the ratio is consistent with the company’s wider policies on employee pay, reward and progression.

118 Keller Group plc Annual Report and Accounts 2022

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Page Title

Director percentage change versus employee group

The table below shows how the percentage increase in each Director’s salary/fees, taxable benefits and annual bonus between 2021 and 2022 compared

with the average percentage increase in each of those components of pay for the UK-based employees of the Group as a whole. The Committee has

previously monitored year-on-year changes between the movement in salary, benefits and annual bonus for the CEO between the current and previous

financial year compared with that of employees. As required under The Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report)

Regulations 2019, the analysis has been expanded to cover each Executive Director and Non-executive Director and this information will build up to

display a five-year history.

% change 2021/22 % change 2020/21 % change 2019/20

% change in

salary or

fees

% change in

benefits

% change in

annual

bonus

% change in

salary or

fees

% change in

benefits

% change in

annual

bonus

% change in

salary or

fees

% change in

benefits

% change in

annual

bonus

Executive Directors

Michael Speakman

3.0 1.90 (95.5) 2.0 (0.8) (1.6) 39.3 0.0 412.4

David Burke

3.0 2.00 (95.5) 364.4 300.0 332.5 n/a n/a n/a

Chairman and Non-executive Directors

Peter Hill CBE 5.0 – – 2.6 – – 8.3 – –

Baroness Kate Rock 2.1 – – 1.4 – – 26.3 – –

Paula Bell 2.4 – – 1.6 – – 8.8 – –

Eva Lindqvist 2.4 – – 1.6 – – 26.5 – –

Nancy Tuor Moore3 (52.6) – – (7.7) – – 6.0 – –

Juan G. Hernández Abrams4 100.0 – – n/a n/a n/a n/a n/a n/a

Keller UK based employees

5,6

4.5 44.6 (11.8) 5.1 16.9 (11.7) 4.7 46.5 8.0

1 The substantial increase in all measures for David Burke between 2020 and 2021 reflects a full year of employment following his start date on 12 October 2020. In both 2020 and 2021 the financial

targets relating to profitability and cash-based performance were achieved in full. The Executive Directors and the comparator group of employees are incentivised on the same financial metrics.

2 The increases for Non-executive Directors reflect the changes made during 2022.

3 Nancy Tuor Moore retired in May 2022.

4 Juan G. Hernández Abrams was appointed in February 2022.

5 The comparator group comprises the population of Keller UK and group head office employees being professional/managerial employees based in the UK and employed on more readily

comparable terms.

6 The change in components of the comparator group remuneration is on a per capita basis, the year-on-year increases, reflect large percentage increases in small value benefits such as travel allowances.

Relative importance of spend on pay

The table below shows shareholder distributions (ie dividends) and total employee pay expenditure for the financial years ended 31 December 2021 and

31 December 2022, along with the percentage changes.

2022

£m

2021

£m

change

Distribution to shareholders

26.4 25.9 1.9%

Remuneration paid to all employees

699.8 580.7 20.5%

1 The Directors are proposing a final dividend in respect of the financial year ended 31 December 2022 of 24.5p per ordinary share.

2 Total remuneration reflects overall employee costs. See note 7 to the consolidated financial statements for further information.

Summary of implementation of the Remuneration Policy during 2022 and 2023

Overall, the committee considers that the Remuneration Policy has operated as it intended during 2022, with no deviations. A summary of how the

committee intends the policy to be operated during 2023 can be found in the remaining pages of this report.

2023 base salary and benefits

The committee noted that salary increases for UK-based employees across the Group were generally around 8%, effective 1 January 2023. The

Executive Directors received salary increases below this amount for 2023.

Benefits for 2023 will remain broadly unchanged from prior years.

2023 pensions

Pension contributions for Michael Speakman and David Burke have been set at 7% of base salary in line with the rate provided to the majority of the

workforce in the UK and on a weighted average basis around Keller’s most populous locations.

2023 annual bonus

For 2023, 70% of Executive Directors’ bonus will be based on Group financial results and 30% will be based on shared corporate objectives. The

performance measures will be underlying operating profit, an important indicator of the company’s financial and operating performance, and a cash-

based target, a more operational measure. Targets for each measure are challenging but realistic and have been set in the context of the business plan.

Targets will be disclosed retrospectively in the 2023 Annual remuneration report to the extent that they are no longer considered commercially sensitive.

25% of any bonus earned will be deferred into company shares for two years.

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2023–25 Performance Share Plan Awards (PSP)

The 2023–25 PSP performance conditions will be assessed over three years based on the following measures: relative TSR (25% weight), cumulative EPS

(25% weight), return on capital employed (ROCE) (25% weight) and operating profit margin (25% weight). These measures strongly align potential payout

under the PSP with Keller’s strategic priorities.

Relative TSR performance will be measured by ranking against FTSE 250 companies (excluding investment trusts and financial services). Under a ranked

approach, a threshold vesting (resulting in 25% of that portion of the award vesting) will be for median performance against the comparator group;

maximum vesting for upper quartile performance (or above) against the comparator group. Straight-line vesting between these points.

EPS will be measured on a cumulative basis enabling target setting to reflect business plans, market consensus and the position in the construction cycle.

Cumulative EPS of 400p over the three-year period will enable full vesting of this performance condition, with a threshold vesting of 25% if 330p is

achieved, calculated off the 2021 underlying EPS (at IFRS 16 basis) of 88.4p.

ROCE will be measured on an average basis over the three-year performance period, with a threshold level of performance of 12% (leading to 25% of that

portion of the award vesting) and a maximum of 18% straight-line vesting between these points.

Operating profit margin will be measured in year three (with a threshold vesting of 5.5% leading to 25% of that portion of the award vesting) and maximum

of 6.5% straight-line vesting between these points.

These targets have been carefully assessed and the committee considers them to be appropriately stretching, given the company’s business plans,

opportunity set and investor expectations and the challenging macro-economic environment.

2023–25 Performance Share Awards

To reflect the impact of any changes in IFRS accounting standards, the committee will consider adjusting financial targets for all subsisting PSP awards,

ensuring that they are not materially easier or harder to satisfy than the original targets. Any amended targets determined by the committee will be

disclosed to shareholders in the next Directors’ remuneration report.

Measures

Vesting schedule

% of award that will vest

0% 25% 100%

25% weight

Cumulative EPS over three years

Below 330p 330p 400p

25% weight

Keller’s relative TSR performance vs FTSE 250

Index over three years Below median Median Upper quartile

25% weight

Average ROCE over three years Below 12% 12% 18%

25% weight

Operating profit margin in year three Below 5.5% 5.5% 6.5%

1 EPS is before non-underlying items on an IFRS 16 basis.

2 Excluding investment trusts and financial services.

Chairman and Non-executive Director fees

Fees for the Non-executive Directors were reviewed with effect from 1 January 2023. The base fee, together with additional fees, were increased by 5%.

The Chairman’s fee was also increased by 5%.

Single total figure of remuneration for Non-executive Directors (audited information)

The table below sets out a single figure for the total remuneration received by each Non-executive Director for the year ended 31 December 2022 and

the prior year:

Non-executive Director

2022

2021

Peter Hill CBE 210,000 200,000

Eva Lindqvist

64,500 63,000

Nancy Tuor Moore

31,042 65,500

Paula Bell

64,500 63,000

Baroness Kate Rock

74,500 73,000

Juan G. Hernández Abrams5 59,125 –

Total fees 503,667 464,500

1 Eva Lindqvist received additional fees of £10,000 per annum as Chair of the Remuneration Committee.

2 Nancy Tuor Moore received additional fees of £10,000 as Chair of the Environment Committee and £10,000 for transatlantic travel. The fee for transatlantic travel was suspended in 2020 and

reinstated in October 2021. Nancy retired in May 2022.

3 Paula Bell received additional fees of £10,000 as Chair of the Audit and Risk Committee.

4 Baroness Kate Rock received additional fees of £20,000 as Senior Independent Director and Chair of the Social and Community Committee.

5 Juan G. Hernández Abrams received additional fees of £10,000 as Chair of the Environment Committee and £10,000 for transatlantic travel. Juan was appointed in February 2022.

Annual remuneration report continued

120

Keller Group plc Annual Report and Accounts 2022

Governance

Page Title

Statement of shareholder voting

The following table sets out the results of the vote on the Remuneration report at the 2022 AGM and the Remuneration Policy at the 2021 AGM:

Votes for Votes against

Votes cast

Number

Votes withheld

NumberNumber % Number %

Remuneration report 52,806,875 91.68 4,791,178 8.32 57,598,053 5,687

Remuneration Policy 54,665,416 90.20 5,942,286 9.80 60,607,702 6,784

Consideration by the Directors of matters relating to Directors’ remuneration

The following Directors were members of the Remuneration Committee when matters relating to the Directors’ remuneration for 2023 were being

considered:

• Eva Lindqvist

• Juan G. Hernández Abrams

• Paula Bell

• Baroness Kate Rock

During the year, the committee received assistance from Kerry Porritt (Group Company Secretary and Legal Advisor) on salary increases, bonus awards,

share plan awards and vesting, and policy and governance matters. David Burke (Chief Financial Officer) presented information with regard to 2022

financial performance and 2023 budget and the three-year plan for 2023–25. In determining the Executive Directors’ remuneration for 2022 and 2023,

the committee consulted the Chairman and the CEO about its proposals, except (in the case of the CEO) in relation to their own remuneration. No

Director was involved in determining their own remuneration.

No member of the committee has any personal financial interest (other than as a shareholder), conflict of interest arising from cross-directorships or

day-to-day involvement in running the business. Given their diverse backgrounds, the Board believes that the members of the Committee are able to

offer an informed and balanced view on executive remuneration issues.

Corporate governance

The committee’s terms of reference, which were reviewed during the year, are available on the Group’s website (www.keller.com) and on request from the

Group Company Secretary and Legal Advisor.

The committee conducted an effectiveness review of the business covered during the year against its terms of reference.

External advisers

During the year, the committee received advice from Deloitte, an independent firm of remuneration consultants appointed by the committee after

consultation with the Board. The committee is satisfied that Deloitte is and remains independent of the company and that the advice provided is impartial

and objective. Deloitte is a founding member and signatory of the Code of Conduct for Remuneration Consultants, details of which can be found at

www.remunerationconsultantsgroup.com.

During the year, Deloitte also provided advice in relation to tax compliance and risk advisory services. The committee is satisfied that the provision of

these services did not impair Deloitte’s ability to advise the committee independently and objectively. Their total fees for the provision of remuneration

services to the committee for 2022 were £49,000.

Eva Lindqvist

Chair of the Remuneration Committee

Approved by the Board of Directors and authorised for issue on 10 March 2023.

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121

Governance

Page Title

Directors’ report

The Directors present their report together with the

audited consolidated financial statements for the year

ended 31 December 2022.

This report is required to be produced by law. The Disclosure

Guidance and Transparency Rules and the Listing Rules also

require us to make certain disclosures.

The Corporate governance statement, including the

Audit and Risk Committee report, forms part of this

Directors’ report and is incorporated by reference.

Disclosures elsewhere in the Annual Report and Accounts

are cross-referenced where appropriate. Taken together,

the Strategic report on pages 1 to 76 and this Directors’

report fulfil the requirement of Disclosure Guidance and

Transparency Rule 4.1.5R to provide a Management report.

Kerry Porritt

Group Company Secretary and Legal Advisor

Results and dividends

The results for the year, showing an underlying profit before

taxation of £93.5m (2021 restated: £79.6m), are set out on

pages 138 to 202. Statutory profit before tax was £56.3m

(2021 restated: £67.5m). The Directors recommend a final

dividend of 24.5p per share to be paid on 23 June 2023, to

members on the register at the close of business on 2 June

2023. An interim dividend of 13.2p per share was paid on 9

September 2022. The total dividend for the year of 37.7p

(2021: 35.9p) will amount to £27.3m (2021: £25.9m).

Going concern and viability statement

Information relating to the going concern and viability

statements is set out on pages 36 of the Strategic report

and is incorporated by reference into this report.

Financial instruments

Full details can be found in note 26 to the financial statements

and in the Chief Financial Officer’s review.

Post balance sheet events

Please see page 193 for post balance sheet events.

Change of control

The Group’s main banking facilities contain provisions that,

upon 15 days’ notice being given to the Group, lenders may

exercise their discretion to require immediate repayment of

the loans on a change of control and cancel all commitments

under the agreement.

Certain other commercial agreements, entered into

in the normal course of business, include change of

control provisions. There are no agreements providing for

compensation for the Directors or employees on a change

of control.

Transactions with related parties

Apart from transactions between the company, its

subsidiaries and joint operations, which are related parties,

there have been no related party transactions during the year.

Directors and their interests

The names of all persons who, at any time during the year, were

Directors of the company can be found on pages 80 and 81.

The interests of the Directors holding office at the end of the

year in the issued ordinary share capital of the company and

any interests in its Performance Share Plan are given in the

Directors’ remuneration report on pages 116 and 117.

No Director had a material interest in any significant contract,

other than a service contract or a contract for services, with the

company or any of its operating companies during the year.

The company’s Articles of Association indemnify the Directors

out of the assets of the company in the event that they suffer

any loss or liability in the execution of their duties as Directors,

subject to the provisions of the 2006 Act. The company

maintains insurance for Directors and Officers in respect of

liabilities which could arise in the discharge of their duties.

122 Keller Group plc Annual Report and Accounts 2022

Governance

Page TitleDirectors’ report

Powers of the Directors

The business of the company is overseen by

the Board, which may exercise all the powers of

the company subject to the provisions of the

company’s Articles of Association, the 2006

Act and any ordinary resolution of the company.

Specific treatment of Directors’ powers

regarding allotment and repurchase of shares

is provided under separate headings in the

following pages.

Amendment of the company’s

Articles of Association

Any amendments to the company’s Articles

of Association may be made in accordance

with the provisions of the 2006 Act by way of

special resolution. The company’s Articles of

Association were last amended in May 2017.

Appointment and replacement

of Directors

Directors shall be no fewer than two and no

more than 12 in number. Subject to applicable

law, a Director may be appointed by an ordinary

resolution of shareholders in a general meeting

following nomination by the Board or a member

(or members) entitled to vote at such a meeting,

or following retirement by rotation if the Director

chooses to seek re-election at a general

meeting. In addition, the Directors may appoint

a Director to fill a vacancy or as an additional

Director, provided that the individual retires

at the next AGM. A Director may be removed

by the company as provided for by applicable

law, in certain circumstances set out in the

company’s Articles of Association (for example

bankruptcy, or resignation), or by a special

resolution of the company. All Directors stand

for re-election on an annual basis, in line with the

recommendations of the Code.

Employees

The Group employed approximately 10,000

people at the end of the year.

Employment policy

The Group gives full and fair consideration to

applications for employment made by disabled

persons, having regard for their respective

aptitudes and abilities. The policy includes,

where practicable, the continued employment

of those who become disabled during their

employment and the provision of training and

career development and promotion, where

appropriate. Information on the Group’s

approach to employee involvement, equal

opportunities and health, safety and the

environment can be found in the ESG and

sustainability section of this report on pages

62 to 71.

Section 172 statement

During the financial year, the Directors have

considered the needs of the company’s

stakeholders as part of their decision-making

process. Details are set out in our section 172

statement on pages 86 and 87.

Political donations

No political donations were made during

the year. Keller has an established policy of

not making donations to any political party,

representative or candidate in any part of

the world.

Greenhouse gas emissions

Information relating to the greenhouse gas

emissions of the company is set out on page 58

and is incorporated by reference into this report.

Research and development

The Group continues to have in-house design,

development and manufacturing facilities, where

employees work closely with site engineers

to develop new and more effective methods

of solving problems of ground conditions and

behaviour. Most of the specialised ground

improvement equipment used in the business

is designed and built in-house and, where

applicable, the development costs are included

in the cost of the equipment.

Share capital

Details of the share capital, together with details

of the movements in the company’s issued

share capital during the year, are shown in note

28 to the consolidated financial statements. The

company has one class of ordinary shares which

is listed on the London Stock Exchange (ordinary

shares). Ordinary shares carry no right to a fixed

income and each ordinary share carries the right

to one vote at general meetings of the company.

There are no specific restrictions on the size

of a shareholding, nor on the transfer of shares,

which are both governed by the Articles of

Association and the prevailing law. The Directors

are not aware of any agreements between

shareholders that may result in restrictions on

voting rights and the transfer of securities. No

person has any special rights of control over the

company’s share capital and all issued shares are

fully paid.

Details of employee share plans are set

out in note 32 to the consolidated financial

statements. Treasury shares and shares held

by the Keller Group plc Employee Benefit Trust

are not voted.

Repurchase of shares

The company obtained shareholder authority

at the last AGM (18 May 2022) to buy back up

to 7,232,181 shares. The authority remains

outstanding until the conclusion of the 2023

AGM but could be varied or withdrawn by

agreement of shareholders at an intervening

general meeting. The minimum price which

must be paid for each ordinary share is its

nominal value and the maximum price is the

higher of an amount equal to not more than

5% above the average of the middle market

quotations for an ordinary share, as derived from

the London Stock Exchange Daily Official List for

the five business days immediately before the

purchase is made, and an amount equal to the

higher of the price of the last independent trade

of an ordinary share and the highest current

independent bid for an ordinary share on the

trading venue where the purchase is carried out.

The Directors have not used, and have no

current plans to use, this authority.

Allotment of shares and pre-emption

disapplication

Shareholder authority was also given at the last

AGM for the Directors to allot new shares up

to a nominal amount of £2,410,727, equivalent

to approximately one-third of the company’s

issued share capital (excluding treasury shares)

as at 7 March 2022 and to disapply pre-emption

rights up to an aggregate nominal amount

of £361,609, representing approximately 5%

of the company’s issued share capital as at

7March 2022.

The Directors have not used, and have no

current plans to use, these authorities.

Auditors

The Board, upon the recommendation of

the Audit and Risk Committee, has decided

that Ernst & Young LLP (EY) will be proposed

as the Group’s auditors for the year ending

31 December 2023 and a resolution to reappoint

EY will be put to shareholders at the 2023 AGM.

AGM

The full details of the 2023 AGM, which will take

place on 17 May 2023, are set out in the Notice

of Meeting, together with the full wording of

the resolutions to be tabled at the meeting. We

continue to closely monitor health and safety

guidance and any changes to venue and logistics

as a result will be notified by way of a Stock

Exchange announcement.

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123

Governance

Page Title

Directors’ report continued

Substantial shareholdings

At 10 March 2023, the company had been notified in accordance with chapter 5 of the Disclosure

Guidance and Transparency Rules of the Financial Conduct Authority of the voting rights of

shareholders in the company as per the table below:

Ordinary shares

Number of

ordinary shares

Percentage of the

total voting rights

FIL Limited 8,116,522 11.15%

Schroders Plc 7,268 ,153 9.98%

Old Mutual Plc 4,242,670 5.56%

J O Hambro Capital Management Limited 3,637,767 4.99%

Franklin Templeton Institutional, LLC 3,557,757 4.96%

Aberforth Partners LLP 3,597,495 4.94%

Artemis Investment Management LLP 3,561,152 4.94%

Standard Life Aberdeen plc 3,443,366 4.78%

Baillie Gifford & Co 3,327,404 4.60%

Norges Bank 2,676,017 3.71%

Source: TR1 notifications made by shareholders to the company.

Disclaimer

The purpose of this Annual Report and Accounts

is to provide information to the members of the

company, as a body, and no other persons.

The company, its Directors and employees,

agents or advisers do not accept or assume

responsibility to any other person to whom this

document is shown or into whose hands it may

come and any such responsibility or liability is

expressly disclaimed.

The Annual Report and Accounts contains

certain forward-looking statements with

respect to the operations, performance and

financial condition of the Group. By their nature,

these statements involve uncertainty since

future events and circumstances can cause

results and developments to differ materially

from those anticipated. The forward-looking

statements reflect knowledge and information

available at the date of preparation of this

Annual Report and Accounts and the company

undertakes no obligation to update these

forward-looking statements. Nothing in

this Annual Report and Accounts should be

construed as a profit forecast.

Other information

The Directors who held office at the date of

approval of this Directors’ report confirm that, in

accordance with the provisions of section 418

of the 2006 Act, so far as they are each aware,

there is no relevant audit information of which

the company’s auditors are unaware; and each

Director has taken all the steps that he or she

ought to have taken as a Director to make him or

herself aware of any relevant audit information

and to establish that the company’s auditors are

aware of that information.

Kerry Porritt

Group Company Secretary and Legal Advisor

Approved by the Board of Directors and

authorised for issue on 10 March 2023.

Registered office:

2 Kingdom Street

London W2 6BD

Registered in England No. 2442580

124 Keller Group plc Annual Report and Accounts 2022

Governance

Page Title

Statement of Directors’ responsibilities

in respect of the Annual Report and the financial statements

The Directors are responsible for preparing

the Annual Report and the Group and company

financial statements in accordance with

applicable law and regulations.

Company law requires the Directors to prepare

Group and company financial statements

for each financial year. Under that law they

have elected to prepare the Group financial

statements in accordance with UK-adopted

International Accounting Standards in

conformity with the requirements of the

Companies Act 2006, and the parent company

financial statements in accordance with UK

Accounting Standards, including FRS 101

Reduced Disclosure Framework. Company

law requires the Directors to prepare Group

and parent Company Financial Statements for

each financial year. Under that law the Directors

have elected to prepare the Group Financial

Statements in accordance with UK-adopted

international accounting standards (IFRSs) and

have elected to prepare the parent Company

Financial Statements in accordance with United

Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards

and applicable law), including Financial Reporting

Standard 101 ‘Reduced Disclosure Framework’

(FRS 101).

Under company law the Directors must not

approve the financial statements unless they are

satisfied that they give a true and fair view of the

state of affairs of the Group and company and

of their profit or loss for that period. In preparing

each of the Group and company financial

statements, the Directors are required to:

• select suitable accounting policies and

then apply them consistently;

• make judgements and estimates that are

reasonable and prudent;

• for the Group financial statements, state

whether they have been prepared in

accordance with UK-adopted International

Accounting Standards in conformity with the

requirements of the Companies Act 2006;

• for the company financial statements,

state whether the applicable UK

Accounting Standards have been followed,

subject to any material departures

disclosed and explained in the company

financial statements;

• assess the Group and company’s ability to

continue as a going concern, disclosing,

as applicable, matters relating to going

concern; and

• use the going concern basis of accounting

unless they either intend to liquidate the

Group or the company or to cease operations,

or have no realistic alternative but to do so.

The Directors are responsible for keeping

adequate accounting records that are

sufficient to show and explain the company’s

transactions and disclose with reasonable

accuracy at any time the financial position of

the company and enable them to ensure that its

financial statements comply with the Companies

Act 2006. They are responsible for such internal

control as they determine is necessary to enable

the preparation of financial statements that are

free from material misstatement, whether due

to fraud or error, and have general responsibility

for taking such steps as are reasonably

open to them to safeguard the assets of the

Group and to prevent and detect fraud and

other irregularities.

Under applicable law and regulations, the

Directors are also responsible for preparing

a Strategic report, a Directors’ report, a

Directors’ remuneration report and a Corporate

governance statement that comply with that law

and those regulations.

The Directors are responsible for the

maintenance and integrity of the corporate and

financial information included on the company’s

website. Legislation in the UK governing the

preparation and dissemination of financial

statements may differ from legislation in

other jurisdictions.

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.

The Strategic report (pages 1 to 76) and

the Directors’ report (pages 122 to 124) have

been approved by the Board of Directors and

authorised for issue on the date shown below.

Kerry Porritt

Group Company Secretary and Legal Advisor

10 March 2023

Registered office:

2 Kingdom Street

London W2 6BD

Registered in England No. 2442580

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125

Governance

Page TitleStatement of Directors’ responsibilities

Independent auditor’s report

to the members of Keller Group plc

Opinion

In our opinion:

• Keller Group plc’s consolidated financial statements and parent Company financial statements (the “financial statements”) give a true and fair view of

the state of the Group’s and of the parent Company’s affairs as at 31 December 2022 and of the Group’s profit for the year then ended;

• the consolidated financial statements have been properly prepared in accordance with UK adopted international accounting standards;

• the parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Keller Group plc (the ‘Company’) and its subsidiaries (the ‘Group’) for the year ended

31 December 2022 which comprise:

Group Parent company

Consolidated balance sheet as at 31 December 2022

Consolidated income statement for the year then ended 31 December 2022

Consolidated statement of comprehensive income for the year then

ended 31 December 2022

Consolidated statement of changes in equity for the year then ended

31 December 2022

Consolidated cash flow statement for the year then ended 31 December 2022

Related notes 1 to 35 to the consolidated financial statements, including a

summary of significant accounting policies

Company balance sheet as at 31 December 2022

Company statement of changes in equity for the year then ended

31December 2022

Related notes 1 to 9 to the Company financial statements including

a summary of significant accounting policies

The financial reporting framework that has been applied in the preparation of the consolidated financial statements is applicable law and UK adopted

international accounting standards. The financial reporting framework that has been applied in the preparation of the parent Company financial

statements is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally

Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those

standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group and parent in accordance with the ethical requirements that are relevant to our audit of the financial statements in the

UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance

with these requirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the parent Company and we remain independent of

the Group and the parent Company in conducting the audit.

126 Keller Group plc Annual Report and Accounts 2022

Financial statements

Independent auditor’s report

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’

use of the going concern basis of accounting in the preparation of the

financial statements is appropriate. Our evaluation of the directors’

assessment of the Group and parent Company’s ability to continue to

adopt the going concern basis of accounting included:

• In conjunction with our walkthrough of the Group’s financial statement

close process, we confirmed our understanding of management’s going

concern assessment process and also engaged with management

early to ensure key factors were considered in their assessment,

including factors which we determined from our own independent risk

assessment and the evaluation of the current economic environment

impacting the Group including industry wide factors such as the rising

cost of materials, energy and labour which are critical parts of the

Group’s operations.

• We obtained management’s Board-approved forecast cash flows and

covenant calculation covering the period of assessment from the date

of signing to 31 March 2024. As part of this assessment, the Group has

modelled a number of adverse scenarios in their cash forecasts and

covenant calculations in order to incorporate unexpected changes to

the forecasted liquidity of the Group.

• We assessed the reasonableness of the cash flow forecast through

analysing management’s historical forecasting accuracy, challenging

the robustness of the Group’s order book, and considering actual

post year-end performance to date. We considered the impact of

the manipulation of contract performance in the Austral business

and how management have adjusted their expectation over its future

profitability and cashflows in the base case forecast. We evaluated the

key assumptions underpinning the Group’s assessment by challenging

the measurement and completeness of downside scenarios modelled

by management and how these compare with principal risks and

uncertainties of the Group.

• We considered the extent to which current and emerging climate-

related risks may affect the Group’s assessment, including assumptions

around the long-term reliance on concrete, steel and related

manufacturing processes, the use of heavy duty combustion machinery,

‘Environmental, Social and Governance’ related covenants or levies,

the cost of climate adaptation solutions and the exposure to extreme

weather events which could delay project completion or cause damage

to physical assets.

• We tested the clerical accuracy and logical integrity of the cash flow

forecast model, used to prepare the Group’s going concern and viability

assessments.

• We considered whether the Group’s forecasts and related key

assumptions in the going concern assessment were consistent with

other forecasts used by the Group in its accounting estimates, including

goodwill impairment and deferred tax asset recognition.

• We evaluated, based on our own independent analysis, what reverse

stress testing scenarios could lead either to a breach of the Group’s

banking covenants or a liquidity shortfall and whether these scenarios

were plausible.

• Our analysis also considered the mitigating actions that management

could undertake in an extreme downside scenario and whether these

were achievable and in control of management.

• We confirmed the continued availability of debt facilities through the

going concern period and reviewed their underlying terms, including

covenants, by examination of executed documentation, and agreed the

amounts drawn down at year-end to external confirmations from the

banks.

• We considered whether management’s disclosures, in the financial

statements, sufficiently and appropriately capture the impact of

the Group’s principal risks and uncertainties on the going concern

assessment and through consideration of relevant disclosure standards.

• We extended our procedures (including inquiries of management,

considering the forward order book and maturity of debt/availability

of access to future financing in the viability period) to consider events

beyond 31 March 2024, including the forecast for covenant compliance

at the next testing interval as at 30 June 2024.

• The audit procedures performed in evaluating the Directors’

assessment were performed by the Group audit team, however we also

considered the financial and non-financial information communicated

to us from our component teams of key locations as sources of

potential contrary indicators which may cast doubt over the going

concern assessment.

The results from both management's evaluation and our independent

reverse stress testing suggest that the Group would need to be exposed

to downside events, significantly greater than the financial effect of the

disruption caused in recent years (eg due to COVID-19 and high cost

inflation following Russia’s invasion of Ukraine), throughout the going

concern period in order to breach its covenants or exhaust its available

funding.

The Group has borrowing facilities available to it during the going concern

period. The undrawn committed facilities available as at 31 December

2022 amounted to £227.6m which comprises the Group’s £375m

revolving credit facility which expires on 23 November 2025 and a $115m

bilateral term loan facility, which expires in November 2024.

Conclusion

Based on the work we have performed, we have not identified any

material uncertainties relating to events or conditions that, individually

or collectively, may cast significant doubt on the Group and parent

Company’s ability to continue as a going concern for a period through to

31 March 2024.

In relation to the Group and parent Company’s reporting on how they have

applied the UK Corporate Governance Code, we have nothing material

to add or draw attention to in relation to the directors’ statement in the

financial statements about whether the directors considered it appropriate

to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect

to going concern are described in the relevant sections of this report.

However, because not all future events or conditions can be predicted,

this statement is not a guarantee as to the Group’s ability to continue as a

going concern.

Strategic report Governance Financial statements

127

Financial statements

Page Title

Profit before tax Revenue Total assets

Full scope components Full scope components Full scope components48% 67% 70%

Specific scope components Specific scope components Specific scope components43% 26% 27%

Other procedures Other procedures Other procedures9% 7% 3%

Overview of our audit approach

Audit scope • We performed an audit of the complete financial information of 64 components and audit procedures on specific

balances for a further 20 components.

• The components where we performed full or specific audit procedures accounted for 91% of profit before tax, 93% of

revenue and 96% of total assets.

Key audit matters • Improper revenue recognition.

• Carrying value of goodwill.

• Quality of earnings including disclosure of non-underlying items.

• Austral financial reporting fraud

Materiality • Overall Group materiality of £4.6m which represents 4.9% of profit before tax, adjusted for one-off, non-underlying items.

Independent auditor’s report continued

to the members of Keller Group plc

An overview of the scope of the parent Company

and Group audits

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our

allocation of performance materiality determine our audit scope for each

company within the Group. Taken together, this enables us to form an

opinion on the consolidated financial statements. We take into account

size, risk profile, the organisation of the Group and effectiveness of Group-

wide controls, changes in the business environment, the potential impact

of climate change and other factors such as recent internal audit results

when assessing the level of work to be performed at each company.

In assessing the risk of material misstatement to the Group financial

statements, and to ensure we had adequate quantitative coverage of

significant accounts in the financial statements, of the 205 reporting

components of the Group, we selected 84 components covering entities

within AMEA, Europe, and North America, which represent the principal

business units within the Group.

Of the 84 components selected, we performed an audit of the complete

financial information of 64 components (“full scope components”) which

were selected based on their size or risk characteristics. This comprised the

major business units of the group and central/consolidation adjustments.

For the remaining 20 components (“specific scope components”), we

performed audit procedures on specific accounts or specified procedures

within that component that we considered had the potential for the greatest

impact on the significant accounts in the financial statements either

because of the size of these accounts or their risk profile.

The reporting components where we performed audit procedures

accounted for 91% (2021: 94%) of the Group’s profit before tax, 93%

(2021: 91%) of the Group’s revenue and 96% (2021: 88%) of the Group’s

total assets. For the current year, the full scope components contributed

48% (2021: 72%) of the Group’s profit before tax, 67% (2021: 70%) of the

Group’s revenue and 70% (2021: 69%) of the Group’s total assets. The

specific scope component contributed 43% (2021: 22%) of the Group’s

profit before tax, 26% (2021: 21%) of the Group’s revenue and 27% (2021:

19%) of the Group’s total assets. The audit scope of these components

may not have included testing of all significant accounts of the components

but will have contributed to the coverage of significant accounts tested for

the Group. Through a combination of instructing local component teams

and centralised work performed by the primary team, we also performed

specified procedures in six further entities which included selected revenue

contract testing reflecting the primary team’s central risk assessment,

testing over material cash and cash equivalents balances for existence

and valuation purposes, and additional procedures over property plant and

equipment, trade and other payables, and operating costs.

Of the remaining 121 components that together represent 9% of the

Group’s profit before tax, none are individually greater than 2% of the

Group’s profit before tax. For these components, we performed other

procedures, including analytical review and/or ‘review scope’ procedures,

testing of consolidation journals and intercompany eliminations and

foreign currency translation recalculations to respond to any potential risks

of material misstatement to the Group financial statements.

The charts below illustrate the coverage obtained from the work

performed by our audit teams.

128 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

Changes from the prior year

For the current year, we evaluated that the principal operating entities

in the UK (Keller Limited) and Canada to be locations where we applied

specific risk focussed procedures, compared with full scope in the prior

year. The determination was made through our updated risk assessment

and a reflection of the low rate of misstatements identified in the previous

cycles, as well as the relative contribution of these entities to the Group

as a whole. The current year scope continues to focus on the key areas

of audit focus and judgement, including, but not limited to, revenue

recognition and we increased the scope of procedures performed across

the Group in areas of emerging increases in risk, such as Keller Arabia

who are servicing the work related to the NEOM project in Saudi Arabia.

Our scoping reflects the inclusion of consolidation entities representing

manual adjustments posted topside at the Group consolidated level, which

we have treated as full scope.

Involvement with component teams

In establishing our overall approach to the Group audit, we determined the

type of work that needed to be undertaken at each of the components by

us, as the primary audit engagement team, or by component auditors from

other EY global network firms operating under our instruction. Of the 64

full scope components, audit procedures were performed on 62 of these

directly by the primary audit team. For the 20 specific scope components,

where the work was performed by component auditors or centrally by the

primary audit team, we determined the appropriate level of involvement to

enable us to determine that sufficient audit evidence had been obtained as

a basis for our opinion on the Group as a whole.

In addressing the appropriateness of oversight arrangements for

component teams, the Group audit team executed an oversight strategy

consisting of physical and virtual site visits for in-scope components, the

latter being enabled through the use of video conferencing.

The Group audit team visited the principal operating business of North

America during the planning/interim phase of the audit which involved

discussing the audit approach with the component team and any issues

arising from their work, meetings with local and divisional management

to discuss key accounting judgements on revenue and provisions,

conducting contract site visits and reviewing key audit working papers

in the high risk areas. The virtual site visits, which occurred throughout

the key audit periods, involved the primary team (including the Senior

Statutory Auditor) meeting with our component teams to discuss

and direct their audit approach, reviewing key working papers and

understanding the significant audit findings in response to the risk areas

including revenue recognition and areas of judgement and estimation

such as contract liabilities and provisions and provisions for legal claims

(including insured liabilities). We also attended virtual meetings with local

management, obtaining updates on reported financial performance and

significant risk areas for the audit, including the anticipated business

outlook during the going concern period.

The primary team interacted regularly with the component teams,

during various stages of the audit, reviewed key working papers and

were responsible for the scope and direction of the audit process. This,

together with the additional procedures performed at Group level, gave us

appropriate evidence for our opinion on the Group financial statements.

Climate change

Stakeholders are increasingly interested in how climate change will

impact Keller Group plc. The Group has assessed the principal risks and

impact of climate change for the business in relation to (a) its inability to

deliver environmentally friendly and/or regulatory conforming solutions

impacting its clients and reputation, (b) disruptions to operations

and damage to assets or installed works from physical events, such

as storm, floods or wildfires, and (c) transition risks such as the cost

of carbon intensive materials, and the growing necessity to monitor

andreportreduction of Scope 3 emissions and reporting.

These are explained on pages 44 to 51 in the Task Force for Climate

related Financial Disclosures and on page 40 in the principal risks and

uncertainties. They have also explained their climate commitments

on pages 56 to 60. All of these disclosures form part of the “Other

information,” rather than the audited financial statements. Our

procedures on these unaudited disclosures therefore consisted

solely of considering whether they are materially inconsistent with the

financial statements, or our knowledge obtained in the course of the

audit or otherwise appear to be materially misstated, in line with our

responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of

climate change on the Group’s business and any consequential material

impact on its financial statements.

The Group has explained in basis of preparation in note 2 how they have

considered the impact of climate change in their financial statements,

particularly in the context of the risks identified in the TCFD disclosure

on pages 44 to 51 this year. The basis of preparation also explains

management consideration of the impact of climate change in respect to

(a) estimates of future cash flows used in impairment assessments of the

carrying value of goodwill, (b) the useful economic life of plant, equipment

and other intangible assets; and (c) going concern and viability of the

Group over the next three years. Whilst management disclosed that there

is currently no medium-term impact expected from climate change, they

are aware of the variable risks arising from climate change and thus they

will regularly assess these risks against judgement and estimates made in

preparation of the Group’s financial statements.

Our audit effort in considering the impact of climate change on the

financial statements was focused on evaluating management’s

assessment of the impact of climate risk, physical and transition, their

climate commitments, the effects of material climate risks disclosed on

pages 44 to 51 and the significant judgements and estimates disclosed

in note 2. We have assessed whether the impact of climate related risks

have been appropriately reflected in future cash flows used to assess the

carrying value of goodwill, economic life of plant, equipment and other

intangible assets and the going concern and viability assessment (see

note 2) following the requirements of UK adopted international accounting

standards. As part of our audit testing and applying profession scepticism,

we performed our own risk assessment, supported by our climate change

internal specialists, to determine the risks of material misstatement in the

financial statements from climate change which needed to be considered

in our audit. Our audit testing included challenges to management with

regards to cost assumptions around climate adaptation solutions, and the

exposure to extreme weather events which could delay project completion

or cause damage to physical asset, thus impacting future margins and

forecasted cash flows. We corroborated our analysis with market available

information for any change in climate related regulations and discussion

with our component team. In determining the valuations and the timing

of future cashflows, we acknowledged that there is degree of certainty

involved and all climate related risks or future outcome are not yet known.

We also challenged the Directors’ considerations of climate change risks

in their assessment of going concern, viability and associated disclosures.

Where considerations of climate change were relevant to our assessment

of going concern, these are described above.

Based on our work we have not identified the impact of climate change

on the financial statements to be a key audit matter. We considered the

impact of climate change on the future cash flows which have been used

to assess the carrying value of goodwill. Details of our procedures and

findings on the goodwill impairment assessment are included in the key

audit matters section on page 130.

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129

Financial statements

Page Title

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current

period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included

those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement

team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide

a separate opinion on these matters.

Risk Our response to the risk

Key observations communicated

to the Audit and Risk Committee

Improper revenue recognition

(2022: £2,944.6m, 2021: £2,222.5m)

Refer to the Audit and Risk Committee report

(page 104); Accounting policies (pages 145

and 146); and note 5 of the consolidated

financial statements (pages 158 and 159)

The Group recognises revenue over time

from contracts either as earned value

(output method) or on the percentage of

completion (input method) basis,

depending on the size and nature of the

contract (in accordance with the guidelines

provided in the Group revenue recognition

policy and IFRS 15). The judgements

involved in determining revenue recognition

under both recognition methods present a

significant fraud risk as results are

susceptible to manipulation, particularly

around the estimation in determining the

cost to complete and percentage of

completion at the year end. Management

may use inappropriate measures and

assumptions to evaluate the Group’s

progress towards satisfaction of

performance obligations.

There is also significant judgement involved

in estimating the impact of factors such as

rising cost pressures and the availability of

necessary skills and their impact on the

cost of satisfying outstanding performance

obligations and the projected outcome of

contract claims and variations made both

by and against the Group and valuation of

contract provisions for both percentage of

completion and earned value bases.

The Group also provides fabricated,

unbonded post-tension materials to

customers in the residential and

commercial sectors. The revenue from

sales of these materials is recognised at a

point of time, based upon the satisfaction

of the performance obligations. We have

identified that there is a risk that such

revenues could be manipulated at or near to

the period end through inappropriate

‘cut-off’ to meet income statement targets.

For all revenue recorded on the percentage of completion

and earned value bases, we:

• Performed walkthroughs of significant classes of revenue

transactions and assessed the design effectiveness of

key controls.

• Performed a risk assessment of the population of

contracts and selected a sample of higher-risk (value and/

or complexity) contracts across the Group, representing

both those accounted for using the input method and

those using the output method. For the sample selected

we obtained an understanding of the contract terms, key

operational or commercial/financial issues, significant

judgements that impact the contract position and the

appropriateness of revenue recognised at 31 December

2022.

• The factors that we considered when determining

additional higher-risk contracts to select included

low-margin, loss-making and/or contracts subject to

delayed performance or commencement and where the

ability to continue work had been affected by

circumstances outside the Group’s control.

For the sample selected for testing we:

• Considered the appropriateness of supporting evidence

and the requirements of IFRS 15 and the Group’s

accounting policies where contracts included additional

entitlements to variations and claims, both for and against

the Group.

• We had meetings with the contract project managers to

understand the project status and outstanding works

remaining on the contracts, and to ensure that the

financial information recorded was consistent with their

input.

• Challenged the level of unbilled revenues and the

adequacy of the evidence to prove recoverability through

subsequent work certifications and cash collections.

For the sample contracts where revenue was recognised

over time under the percentage of completion basis, we

have performed the following:

• Challenged the reasonableness of management’s

calculations of costs to complete, which included

understanding the risks and outstanding works remaining

on the contract, the impact of any delays or other delivery

issues and the related cost assumptions and

contingencies.

• We tested the cost build up and the correct allocation

across contracts (eg to verify no manipulation of costs

between profitable and loss-making contracts and

recognition between periods (eg cut-off testing)) through

a combination of cost verification and analytical

procedures on contract margins.

• Evaluated the expected margin and revenue recognised

to date against latest contract progress.

There was a prior year

restatement relating to improper

revenue recognition as a result of

the financial fraudulent reporting

in the Austral business, please

refer to the “Keller Austral –

manipulation of contract

performance” section in this table

for further information on the

work performed in response to

this matter.

From the audit procedures

performed otherwise, we

conclude that the recognition of

revenue was appropriate, that the

judgements made by

management are consistent with

the accounting policy to be

applied to all contracts with

customers, and that the

presentation and disclosure of

revenue is materially correct.

Independent auditor’s report continued

to the members of Keller Group plc

130 Keller Group plc Annual Report and Accounts 2022

Financial statements

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Risk Our response to the risk

Key observations communicated

to the Audit and Risk Committee

Improper revenue recognition continued For the sample of contracts where revenue is recognised on

the earned value basis, we performed the following

procedures:

• Evaluated whether the assessment of earned value

appropriately depicted outputs actually delivered and

progress towards satisfaction of performance

obligations.

• We tested the cost build up and the correct allocation

across contracts (eg to verify no manipulation of costs

between profit-making and loss-making contracts)

through a combination of cost verification against

invoices and analytical procedures.

• Tested whether revenue has been recognised in the

appropriate period. This included checking whether

revenue recognised at the year end on open contracts is

supported by evidence (eg measured works certificates)

that demonstrates the period in which the work was

performed. For any loss-making contracts identified, for

both percentage of completion and earned value

contracts, we tested whether management’s assessment

of the forecast loss included appropriate estimates in

respect of costs to completion.

For contracts where there was significant uncertainty over

whether the project would be completed, we assessed the

appropriateness of the accounting treatment of contract

modifications, consideration received, and revenue

recognised/deferred and the impact on the carrying value of

related assets. For revenue recognised at a point in time, we

performed revenue cut-off procedures at the year end to

determine whether transactions are recorded in the

appropriate period based on the recognition criteria under

IFRS 15 by vouching the transactions through to third-party

support (such as shipping, delivery or acceptance

documents).

Data-driven journal entry testing was also performed in full

and specific scope locations on a risk-based approach,

including focusing on entries which were posted manually or

those which could be made to overstate revenue and

unbilled revenue.

We performed full and specific scope audit procedures over

revenue in 21 locations, which covered 95% of the risk

amount.

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Risk Our response to the risk

Key observations communicated

to the Audit and Risk Committee

Keller Austral – manipulation of contract

performance

On 09 January 2023, the Group announced

that following an internal management

operational review, it had identified a

deliberate and sophisticated financial

reporting fraud in the Austral business in

Australia. The Group also announced that it

had commenced an internal investigation and

has commenced the process of appointing an

external party to undertake an investigation.

Further details of the investigation are set out

on page 28. Management’s response to the

findings of the investigation, including the

associated control deficiencies that were

identified, is set out on page 107.

The total impact, including changes in

deferred tax recognition, amount to a

reduction in net assets of £14.9m compared

with previously reported at 31 December

2021 and £8.7m lower at 1 January 2021.The

prior year errors were reflected in the relevant

comparative periods and the impact is set out

in note 2. The specific items are described in

note 3.

Our audit focussed on evaluating the

adequacy and robustness of management’s

investigation, the impact on the financial

statements, and addressing the risk of similar

issues in other reporting units.

We incorporated forensic specialists in both the UK and

Australia into our audit team to assess the structure, scope,

approach and independence of the investigation

commenced by the Group, and to satisfy ourselves that it

considered the risk that the issues identified may be more

pervasive across the Group, and that the conclusions

reached were appropriate. Where appropriate, we

shadowed, independently reperformed or extended the

scope of forensic procedures to address our ISA (UK) 240

requirements for audit purposes.

We also used our forensics specialists to support us in

considering the associated audit risks arising from each of

the matters identified by the investigation and determining

the impact on our audit risk assessment and developing an

appropriate audit response.

We considered the scope of the audit and, in particular,

assessed which reporting units required additional audit

procedures to be performed, including but not limited to

Australia.

We also instructed our component teams to perform

additional procedures to respond to the risk of fraud,

including incremental procedures over unbilled revenue and

additional journal entry testing.

We considered the impact of the investigation on

management’s internal control environment both in

Australia and in other locations exposed to the same risks.

Taking the above into account, consistent with our original

audit plan, we instructed our component audit team in

Australia to perform a full scope audit on the reporting unit’s

complete financial information, and evaluated the

component team’s work. In addition, we performed a

significant level of oversight, with senior members of the

group engagement team including the involvement of our

forensic specialists throughout the process.

As part of these oversight activities, we were involved in the

component audit team’s risk assessment to identify

significant risks of material misstatement, evaluated the

appropriateness of the audit procedures to be performed by

the component team to respond to the identified significant

risks, reviewed certain working papers of the component

audit team to evaluate the work performed and held regular

meetings with our component audit team and with local,

AMEA and Group management to consider the component

team’s audit work and findings.

Our component team in Australia also specifically tested the

prior year revisions and the specific items restated.

We communicated to the audit

committee that the issue was a

significant deficiency in internal

controls.

We concluded that as a result of

our work, we satisfied ourselves

that the adjustments posted by

management following the

investigation appropriately reflect

the corrected positions in the

current and prior periods. We also

considered the appropriateness

of the disclosures made by

management in the financial

statements, in particular in note 2

and note 3 and determined that

they provided an adequate

explanation of the issue and the

results of management’s

investigation.

Independent auditor’s report continued

to the members of Keller Group plc

132 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

Risk Our response to the risk

Key observations communicated

to the Audit and Risk Committee

Carrying value of goodwill

(2022: £125.3m; 2021: £120.5m)

Refer to the Audit and Risk Committee report

(page 104); Accounting policies (page 147);

and note 15 of the consolidated financial

statements (pages 171 and 172)

Under IAS 36, an entity must assess

intangible items with an indefinite useful life

annually, or whenever indicators of

impairment are present for all other assets.

Due to the degree of estimation involved in

calculating the expected future cash flows

from cash-generating units (CGUs) and

determining appropriate long-term growth

rates and discount rates specific to each

CGU (including those arising from

acquisitions), we have identified a

significant risk regarding the assessment of

any impairment against goodwill carrying

values, as well as the identification of any

indicators of impairment as an area of

significant risk.

We have performed the following:

• Performed a walkthrough to understand the impairment

analysis and calculation process (eg controls over the data

and assumptions used), level of review on the outlook

data in future years and how key inputs were derived.

• Evaluated the appropriateness of the CGUs identified

given changes in Group structure (including acquisitions)

and the allocation of assets and liabilities to the CGUs.

• In respect of each CGU, we have challenged management

over the key inputs and on the achievability of the cash

flow forecasts. We have assessed the projected financial

information against recent performance and other

market data to assess the robustness of management’s

forecasting process.

• Assessed the discount rates applied against cash flows

for each CGU by obtaining the underlying data used in the

calculation and benchmarking against comparable

organisations with the support of our EY valuation

experts.

• Validated the revenue/margin growth rates assumed for

the projected financial information for each CGU by

comparing them to economic and industry forecasts.

• Given the uncertainty attached to forecasts presented by

rising costs, skills shortages and the potential for

suspension or delay to key projects, we have assessed

management’s assumptions in relation to these factors

including the ongoing market uncertainties and increasing

costs of energy, materials and labour, in determining the

ability to achieve cash flow forecasts.

• Analysed the historical accuracy of budgets compared

with actual results to determine whether forecast cash

flows are reliable based on past experience.

• Challenged the assumptions in the approach taken to

determine working capital levels over the forecast period,

focussing on the principal reasons and timing of larger

fluctuations and how this compared with the historical

trend.

• Performed an integrity review of the goodwill model to be

able to conclude that the formulae and construction of

these models are effective and accurate.

• Performed sensitivity analyses by testing key

assumptions in the model to recalculate a range of

potential outcomes in relation to the size of the headroom

between carrying value and fair value.

• Considered the assumptions around the long-term

reliance on concrete, steel and related manufacturing

processes, heavy duty combustion machinery, and the

potential for ‘Environmental, Social and Governance’

related covenants or levies which could impact the CGU

cash flows. We have also considered the assumptions

made by management around the cost of investment in

technology in order to adapt to changing regulations

related to climate change and emissions.

• Considered the appropriateness of the related

disclosures provided in the notes to the Group financial

statements.

The primary team centrally executed the work performed

across all locations, covering 100% of the balance.

Component teams have supported the primary team in

assessing the growth rates and achievability of the cash

flows based on their understanding of the business and local

market and industry conditions.

Our procedures focused on the

CGUs where the headroom was

either lower and/or sensitive to

changes in key assumptions used,

including improved future

performance. Through our

process of challenging

management and understanding

their assumptions, we concur

with their conclusion that the

goodwill recorded in Austral

(£7.7m), Grundlaggning (£4.5m)

and Getec (£0.3m) is impaired.

For the remaining CGUs, there is

sufficient headroom to support

the carrying value.

We concluded that management

have accounted for the

impairments calculated

appropriately and have included

sufficient disclosure over the key

assumptions and sensitivities

impacting the remaining CGUs in

note 15.

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133

Financial statements

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Risk Our response to the risk

Key observations communicated

to the Audit and Risk Committee

Quality of earnings, including disclosure

of non-underlying items (2022: £37.2m

(pre-tax); 2021: £12.1m (pre-tax))

Refer to the Audit and Risk Committee report

(page 104); Accounting policies (pages 150

and 151); and note 9 of the consolidated

financial statements (page 165, 166 and 167)

The Group’s accounting policy is to classify

certain income statement items as

non-underlying, where they are exceptional

by their size and/or are non-trading in

nature, including amortisation of acquired

intangibles and other non-trading amounts,

including those relating to acquisitions and

disposals.

As at the year end, management identified

certain pre-tax items totalling £37.2m

which they believe are significant by either

size and/or nature, which warrant separate

disclosure in the consolidated financial

statements to better reflect underlying

business performance.

The classification of such items is

judgemental and there is a risk that material

items are misclassified as ‘non-underlying’

and are therefore excluded from the results

presented in the form of adjusted profit

measures, which would mislead the users of

the financial statements in understanding

the performance of the Group.

Furthermore, there is a risk that the

financial statements give undue

prominence to adjusted performance

measures compared with their IFRS

equivalents.

We performed the following procedures:

• Obtained the breakdown of non-underlying items to

determine whether by their nature they meet the

definition of non-underlying items, in accordance with

Group policy and ESMA (European Securities and Markets

Authority) guidance.

• Tested that the amounts included as non-underlying

items are supported by appropriate evidence. We

performed tests of detail over material restructuring

costs to ensure that the underlying expenditure recorded

truly relates to a specified restructuring project and not a

general or recurring expense, and that the IAS37 criteria

has been correctly met. We were assisted by our

component teams in locations where these material

expenditures have arisen.

• Assessed the appropriateness of the disclosures of

non-underlying items in light of IFRS (IAS 1) and the

continued focus by the accounting regulators on

alternative profit measures (APMs) with the support

of our EY technical review team, we focussed on:

– the clarity of definitions and explanations for the

use of APMs;

– adequacy of reconciliations to GAAP measures

– equal prominence to GAAP measures; and

– consistency of application, including explanations

for any changes

• The primary team performed centralised procedures over

the classification and disclosure of non-underlying items,

and the related risk of material misstatement, in the

Group consolidated financial statements as a whole.

As a result of our audit

procedures performed, no items

were inappropriately included or

excluded from non-underlying

items.

We have assessed that the

alternative performance

measures (APMs) included in the

Group financial statements are

appropriately defined, reconciled

to GAAP measures and disclosed.

In the current year, we have added a key audit matter relating to the manipulation of contract performance in Keller Austral, as described above. There

have been no other changes in our assessment of key audit matters compared with prior year.

Independent auditor’s report continued

to the members of Keller Group plc

134 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

Our application of materiality

We apply the concept of materiality in planning and performing the audit,

in evaluating the effect of identified misstatements on the audit and in

forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the

aggregate, could reasonably be expected to influence the economic decisions

of the users of the financial statements. Materiality provides a basis for

determining the nature and extent of our audit procedures.

We determined materiality for the Group to be £4.6 million (2021: £4.2

million), which is 4.9% (2021: 5%) of profit before tax, adjusted for one-

off, non-underlying items. We believe this measure provides us with an

appropriate materiality basis which excludes non-underlying items: as

these were identified as a key audit matter which resulted in specific

auditfocus.

We determined materiality for the parent Company to be £4.7 million

(2021: £4.7 million), which is 1% (2021: 1%) of Equity. Equity is the most

appropriate measure given the parent Company is an investment holding

company with no revenue. The materiality determined for the standalone

parent Company financial statements exceeds the Group materiality as

it is determined on a different basis given the nature of the operations.

For the purposes of the audit of the Group financial statements, our

procedures, including those on balances in the parent Company that

are consolidated, are undertaken with reference to the Group assigned

materiality and performance materiality set out in this report.

Performance materiality

The application of materiality at the individual account or balance level. It is set

at an amount to reduce to an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the

Group’s overall control environment, our judgement was that performance

materiality was 75% (2021: 50%) of our planning materiality, namely £3.5m

(2021: £2.1m) at the planning stage. Following the emergence of the

financial reporting issue in Austral, we revised our performance materiality

to 50% of planning materiality as a direct response reflecting the increase

in risk. The decrease in performance materiality was applied retrospectively

to cover the whole year and the level of audit effort therefore increased

across all components.

Audit work at component locations for the purpose of obtaining audit

coverage over significant financial statement accounts is undertaken

based on a percentage of total performance materiality. The performance

materiality set for each component is based on the relative scale and risk

of the component to the Group as a whole and our assessment of the

risk of misstatement at that component. In the current year, the range of

performance materiality allocated to components was £0.5m to £1.6m

(2021: £0.3m to £1.5m).

Reporting threshold

An amount below which identified misstatements are considered as being

clearly trivial.

We agreed with the Audit Committee that we would report to them all

uncorrected audit differences in excess of £0.2m (2021: £0.2m), which

is set at 5% of planning materiality, as well as differences below that

threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative

measures of materiality discussed above and in light of other relevant

qualitative considerations in forming our opinion.

Other information

The other information comprises the information included in the Annual

report and Accounts set out on pages 1 to 193, including the Strategic

report on pages 1 to 77, and Corporate governance report set out on

pages 78 to 125 other than the financial statements and our auditor’s

report thereon. The directors are responsible for the other information

contained within the annual report.

Our opinion on the financial statements does not cover the other

information and, except to the extent otherwise explicitly stated in this

report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with

the financial statements or our knowledge obtained in the course of the

audit, or otherwise appears to be materially misstated. If we identify such

material inconsistencies or apparent material misstatements, we are

required to determine whether this gives rise to a material misstatement

in the financial statements themselves. If, based on the work we have

performed, we conclude that there is a material misstatement of the

otherinformation, we are required to report that fact.

We have nothing to report in this regard.

Starting

basis

• £56.3m

• Profit before tax for the year

• £26.9m

• Non-underlying items for the year

• £10.3m

• Amortisation of intangibles on acquisition

• Totals £93.5m

• Materiality of £4.6m (4.9% of

Profit before tax adjusted for one-off,

non-underlying items.

Materiality

Adjustments

During the course of our audit, we reassessed initial materiality, noting no

significant variations from the original assessment at planning, with the

exception of a revision in our performance materiality explained below.

Strategic report Governance Financial statements

135

Financial statements

Page Title

Independent auditor’s report continued

to the members of Keller Group plc

Opinions on other matters prescribed by the

Companies Act 2006

In our opinion, the part of the directors’ remuneration report to be audited

has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors’ report

for the financial year for which the financial statements are prepared

isconsistent with the financial statements; and

• the strategic report and the directors’ report have been prepared in

accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the

parent Company and its environment obtained in the course of the audit,

we have not identified material misstatements in the strategic report or

the directors’ report.

We have nothing to report in respect of the following matters in

relationto which the Companies Act 2006 requires us to report to

you if, in ouropinion:

• adequate accounting records have not been kept by the parent

Company, or returns adequate for our audit have not been received

from branches not visited by us; or

• the parent Company financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are

not made; or

• we have not received all the information and explanations we require

for our audit.

Corporate Governance Statement

We have reviewed the directors’ statement in relation to going concern,

longer-term viability and that part of the Corporate Governance

Statement relating to the Group and Company’s compliance with the

provisions of the UK Corporate Governance Code specified for our

review by the Listing Rules.

Based on the work undertaken as part of our audit, we have concluded that

each of the following elements of the Corporate Governance Statement

is materially consistent with the financial statements or our knowledge

obtained during the audit:

• Directors’ statement with regards to the appropriateness of adopting

the going concern basis of accounting and any material uncertainties

identified set out on page 36;

• Directors’ explanation as to its assessment of the Company’s

prospects, the period this assessment covers and why the period is

appropriate set out on page 36;

• Directors’ statement on whether it has a reasonable expectation that

the Group will be able to continue in operation and meets its liabilities

set out on page 36;

• Directors’ statement on fair, balanced and understandable set out on

page 101;

• Board’s confirmation that it has carried out a robust assessment of

the emerging and principal risks set out on pages 37 to 43;

• The section of the annual report that describes the review of

effectiveness of risk management and internal control systems set

out on pages 37 to 43; and

• The section describing the work of the audit committee set

out on page 101.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set

out on page 91, the directors are responsible for the preparation of the

financial statements and for being satisfied that they give a true and fair

view, and for such internal control as the directors determine is necessary

to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for

assessing the Group and parent Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless the directors

either intend to liquidate the Group or the parent Company or to cease

operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the

financial statements

Our objectives are to obtain reasonable assurance about whether the

financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue an auditor’s report that includes

our opinion. Reasonable assurance is a high level of assurance but is not a

guarantee that an audit conducted in accordance with ISAs (UK) will always

detect a material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of

detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws

and regulations. We design procedures in line with our responsibilities,

outlined above, to detect irregularities, including fraud. The risk of not

detecting a material misstatement due to fraud is higher than the risk of

not detecting one resulting from error, as fraud may involve deliberate

concealment by, for example, forgery or intentional misrepresentations,

or through collusion. The extent to which our procedures are capable of

detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of

fraud rests with both those charged with governance of the Company

andmanagement.

• We obtained an understanding of the legal and regulatory frameworks

that are applicable to the Group and determined that the most

significant are those related to the reporting framework (IFRS, IFRS

adopted pursuant to FRS 101, United Kingdom Generally Accepted

Accounting Practice, the Companies Act 2006 and Corporate

Governance Code) and the relevant tax compliance regulations in the

countries of operations of the reporting components. In addition,

we concluded that there are certain significant laws and regulations

which may have an effect on the determination of the amounts and

disclosures in the financial statements, being the Listing Rules of the

London Stock Exchange and the Bribery Act 2010.

136 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

• We understood how Keller Group plc is complying with those frameworks

by making enquiries of management, reviewing management procedures

for oversight by those charged with governance (ie considering the

potential for override of controls or other inappropriate influence over

the financial reporting process, such as efforts by management to

manage earnings in order to influence the perceptions of analysts as to

the Group’s performance and profitability), the culture of honesty and

ethical behaviour and whether a strong emphasis is placed on fraud

prevention, which may reduce opportunities for fraud to take place, and

fraud deterrence. We corroborated our enquiries through our review

of Board minutes, discussions with the Audit and Risk Committee, any

correspondence received from regulatory bodies and those responsible

for legal and compliance procedures and the Company Secretary.

• We assessed the susceptibility of the Group’s financial statements to

material misstatement, including how fraud might occur, by meeting

with management to understand where they considered there was

susceptibility to fraud. This included evaluating the root cause of the

fraud that materialised in Austral and the susceptibility of other business

units to the issues. We also considered performance targets and their

influence on efforts made by management to manage earnings or

influence the perceptions of analysts. Where this risk was considered

to be higher, we performed audit procedures to address each identified

fraud risk. The key audit matters section above addresses procedures

performed in areas where we have concluded the risks of material

misstatement are highest (including where due to the risk of fraud),

and the procedures performed directly in response to the instance of

fraud in the Austral business. These procedures included testing manual

journal entries, a focus on the recoverability of unbilled revenue, and

considerations over information produced by the entity including work

over the authenticity of key evidence received during theaudit.

• Based on this understanding we designed our audit procedures to

identify non-compliance with such laws and regulations. Our procedures

involved review of Board minutes to identify non-compliance with

such laws and regulations, review of reporting to the Audit and Risk

Committee on compliance with regulations and enquires of the

Company Secretary and management.

• Where we identified potential non-compliance with laws and regulations,

we developed an appropriate audit response and communicated

directly with components impacted. Our procedures involved:

understanding the process and controls to identify non-compliance,

inquiring of internal and external legal counsel, and management’s

external investigators, understanding the fact patterns in each case

and documenting the positions taken by management, and using

specialists (including Forensics) to support us in concluding on the

mattersidentified.

A further description of our responsibilities for the audit of the financial

statements is located on the Financial Reporting Council’s website at

www.frc.org.uk/auditorsresponsibilities. This description forms part of our

auditor’s report.

Other matters we are required to address

• Following the recommendation from the audit committee, we were

appointed by the Company to audit the financial statements for the

year ending 31 December 2022 and subsequent financial periods. We

were appointed as auditors at the Annual General Meeting of members

and an engagement letter was signed on 03March2022 which applies

to all accounting periods from the date ofthe engagement letter until it

isreplaced.

The period of total uninterrupted engagement including previous

renewals and reappointments is four years, covering the years ended

31 December 2019 to 31 December 2022.

The audit opinion is consistent with the additional report to the

auditcommittee.

Use of our report

This report is made solely to the Company’s members, as a body, in

accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our

audit work has been undertaken so that we might state to the Company’s

members those matters we are required to state to them in an auditor’s

report and for no other purpose. To the fullest extent permitted by law, we

do not accept or assume responsibility to anyone other than the Company

and the Company’s members as a body, for our audit work, for this report,

or for the opinions we have formed.

Kevin Harkin

Senior statutory auditor

for and on behalf of Ernst & Young LLP,

Statutory Auditor

Reading

10 March 2023

Strategic report Governance Financial statements

137

Financial statements

Page Title

Note

2022 2021 (Restated)

Underlying

£m

Non-underlying

items (note 9)

£m

Statutory

£m

Underlying

£m

Non-underlying

items (note 9)

£m

Statutory

£m

Revenue 4,5 2,944 .6 – 2, 944.6 2,222 .5 – 2,222. 5

Operating costs 7 (2 , 8 3 7. 5) (30.0) (2 , 8 67. 5) (2 ,1 34 . 4) (9. 6) (2 ,14 4 . 0)

Amortisation of acquired intangible assets – (10 . 3) (10 . 3) – (2. 6) (2 .6)

Other operating income – 0.7 0.7 – 0 .7 0 .7

Share of post-tax results of joint ventures 17 1.5 (1. 2) 0.3 0.4 (0 .6) (0 . 2)

Operating profit/(loss) 4 10 8 . 6 (40 . 8) 6 7. 8 88.5 (1 2 .1) 76 . 4

Finance income 10 0.5 3.6 4 .1 0.4 – 0.4

Finance costs 11 (15. 6) – (15 . 6) (9. 3) – (9. 3)

Profit/(loss) before taxation 93. 5 (3 7. 2) 56. 3 79.6 (1 2 .1) 6 7. 5

Taxation 12 (20. 3) 9.0 (11 . 3) (18 .9) 7. 0 (11 . 9)

Profit/(loss) for the year 73. 2 (2 8. 2) 45.0 6 0.7 (5 .1) 55.6

Attributable to:

Equity holders of the parent 74 . 2 (28 . 2) 46.0 61 . 6 (5 .1) 56 .5

Non-controlling interests 34 (1.0) – (1.0) (0 .9) – (0. 9)

73. 2 (2 8. 2) 45.0 6 0.7 (5 .1) 55.6

Earnings per share

Basic 14 102 .1p 63. 3p 8 5. 2p 78 .1p

Diluted 14 10 0 . 7p 62 .4p 8 4. 2p 7 7. 2p

1 The 31 December 2021 consolidated income statement has been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Consolidated income statement

For the year ended 31 December 2022

138 Keller Group plc Annual Report and Accounts 2022

Consolidated income statement

Consolidated statement of comprehensive income

For the year ended 31 December 2022

Note

2022

£m

2021

(Restated)

£m

Profit for the year 45.0 55. 6

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Exchange movements on translation of foreign operations 46. 3 (3. 8)

Exchange movements on translation of non-controlling interests – –

Transfer of translation reserve on disposal of subsidiaries – (0 . 4)

Items that will not be reclassified subsequently to profit or loss:

Remeasurements of defined benefit pension schemes 33 2.8 1.2

Tax on remeasurements of defined benefit pension schemes 12 (0.6) (0 . 2)

Other comprehensive income/(loss) for the year, net of tax 48. 5 (3. 2)

Total comprehensive income for the year 93. 5 52. 4

Attributable to:

Equity holders of the parent 94.0 53. 3

Non-controlling interests (0 . 5) (0. 9)

93. 5 52. 4

1 The 31 December 2021 consolidated statement of comprehensive income has been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period

business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Strategic report Governance Financial statements

139

Financial statements

Consolidated statement of

comprehensive income

Consolidated balance sheet

As at 31 December 2022

Note

At 31 December 2022

£m

At 31 December 2021

(Restated)

£m

At 1 January 2021

(Restated)

£m

Assets

Non-current assets

Goodwill and intangible assets 15 1 3 7. 2 139. 5 11 8 . 8

Property, plant and equipment 16 486. 5 4 43 .4 434 .9

Investments in joint ventures 17 4.4 4.0 4 .4

Deferred tax assets 12 15.1 8.8 8.3

Other assets 18 60.8 88.5 60.3

704 . 0 684. 2 6 26 .7

Current assets

Inventories 19 124 . 4 7 2 .1 6 0 .1

Trade and other receivables 20 76 4 . 6 585 .5 495. 4

Current tax assets 5.0 8 .9 2 .1

Cash and cash equivalents 21 101 . 1 8 2.7 66.3

Assets held for sale 22 2.8 3.4 8 .7

9 9 7. 9 752 . 6 6 32.6

Total assets 4 1,7 01.9 1, 436 . 8 1, 2 59. 3

Liabilities

Current liabilities

Loans and borrowings 26 (34 . 2) (29. 8) (67.0)

Current tax liabilities (52. 5) (1 7. 9) (17. 1)

Trade and other payables 23 (58 5.6) (508 . 0) (3 81 .9)

Provisions 24 (52 .7) (53. 8) (54 .4)

(725. 0) (6 0 9 .5) (520. 4)

Non-current liabilities

Loans and borrowings 26 (365. 8) (24 6 . 2) (1 91 . 8)

Retirement benefit liabilities 33 (2 0. 8) (25 .7) (31 .1)

Deferred tax liabilities 12 (5. 3) (28 . 3) (21 . 3)

Provisions 24 (66 .9) (7 7. 9) (71. 4)

Other liabilities 25 (21 . 3) (21 . 2) (22.0)

(4 8 0 . 1) (399 . 3) (3 3 7. 6)

Total liabilities 4 (1 , 20 5 .1) (1 , 0 0 8 . 8) (85 8. 0)

Net assets 4 496 .8 428 . 0 4 01 . 3

Equity

Share capital 28 7. 3 7. 3 7. 3

Share premium account 3 8.1 3 8 .1 3 8 .1

Capital redemption reserve 28 7. 6 7. 6 7. 6

Translation reserve 5 7. 9 1 2.1 16.3

Other reserve 28 56.9 56 .9 56.9

Retained earnings 326 .7 3 03. 2 2 71. 4

Equity attributable to equity holders of the parent 494. 5 42 5. 2 3 9 7. 6

Non-controlling interests 34 2. 3 2. 8 3 .7

Total equity 496. 8 428 . 0 4 01 . 3

1 The 1 January 2021 consolidated balance sheet has been restated in respect of the correction of prior period errors arising from the fraud at Austral as outlined in note 3 to the consolidated

financial statements.

2 The 31 December 2021 consolidated balance sheet has been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

These consolidated financial statements were approved by the Board of Directors and authorised for issue on 10 March 2023.

They were signed on its behalf by:

Michael Speakman David Burke

Chief Executive Officer Chief Financial Officer

140 Keller Group plc Annual Report and Accounts 2022

Financial statements

Consolidated balance sheet

capital

(note 28)

£m

premium

account

£m

Capital

redemption

reserve

(note 28)

£m

Translation

reserve

£m

Other

reserve

(note 28)

£m

Hedging

reserve

(note 26)

£m

Retained

earnings

£m

Attributable

to equity

holders of

the parent

£m

Non-

controlling

interests

(note 34)

£m

Total

equity

£m

At 1 January 2021 (as presented) 7. 3 3 8 .1 7. 6 1 6.3 56 .9 – 28 0 .1 406.3 3 .7 4 1 0.0

Prior year adjustment – – – – – – (8 .7) (8 .7) – (8 .7)

At 1 January 2021 (restated)

7. 3 3 8 .1 7. 6 1 6.3 56.9 – 271. 4 3 9 7. 6 3.7 4 01. 3

Profit/(loss) for the year (restated)

– – – – – – 56. 5 56 .5 (0 .9) 55. 6

Other comprehensive income

Exchange movements on translation

of foreign operations (restated)

– – – (3 . 8) – – – (3 . 8) – (3. 8)

Transfer of reserves on disposal

of subsidiaries – – – (0 .4) – – – (0 . 4) – (0. 4)

Remeasurements of defined benefit

pension schemes – – – – – – 1. 2 1. 2 – 1. 2

Tax on remeasurements of defined

benefit pension schemes – – – – – – (0 . 2) (0. 2) – (0. 2)

Other comprehensive (loss)/income

for the year, net of tax (restated)

– – – (4 . 2) – – 1. 0 (3. 2) – (3. 2)

Total comprehensive (loss)/income

for the year (restated)

– – – (4 . 2) – – 57. 5 53 .3 (0 .9) 52. 4

Dividends – – – – – – (25. 9) (25 .9) – (25 .9)

Purchase of own shares for ESOP trust – – – – – – (3 .7) (3 .7) – (3 .7)

Share-based payments – – – – – – 3.9 3.9 – 3 .9

At 31 December 2021 (restated)

7. 3 3 8 .1 7. 6 1 2 .1 56 .9 – 303. 2 425 .2 2.8 428 .0

Profit/(loss) for the year – – – – – – 46.0 46.0 (1.0) 45.0

Other comprehensive income

Exchange movements on translation

of foreign operations – – – 45. 8 – – – 45. 8 0.5 46 .3

Remeasurements of defined benefit

pension schemes – – – – – – 2.8 2.8 – 2.8

Tax on remeasurements of defined

benefit pension schemes – – – – – – (0.6) (0 .6) – (0.6)

Other comprehensive income

for the year, net of tax – – – 45. 8 – – 2.2 48.0 0.5 48.5

Total comprehensive (loss)/income

for the year – – – 45. 8 – – 48. 2 94. 0 (0. 5) 93. 5

Dividends – – – – – – (26. 4) (26. 4) – (26 .4)

Purchase of own shares for ESOP trust – – – – – – (1 . 2) (1 . 2) – (1. 2)

Share-based payments – – – – – – 2.9 2.9 – 2.9

At 31 December 2022 7. 3 38 .1 7. 6 5 7. 9 56. 9 – 32 6.7 494. 5 2.3 496. 8

1 Retained earnings as at 1 January 2021 have been restated in respect of the correction of prior period errors arising from the fraud at Austral, as outlined in note 3 to the consolidated financial

statements. Retained earnings as at 31 December 2021 have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Consolidated statement of changes in equity

For the year ended 31 December 2022

Strategic report Governance Financial statements

141

Financial statements

Consolidated statement of

changes in equity

Note

2022

£m

2021

(Restated)

£m

Cash flows from operating activities

Profit before taxation 56. 3 6 7. 5

Non-underlying items 9 40.8 1 2.1

Finance income 10 (4 . 1) (0 .4)

Finance costs 11 15.6 9. 3

Underlying operating profit 4 108 . 6 88.5

Depreciation/impairment of property, plant and equipment 16 96.6 9 0.6

Amortisation of intangible assets 15 0.4 0 .6

Share of underlying post-tax results of joint ventures 17 (1 . 5) (0. 4)

Profit on sale of property, plant and equipment (3 . 3) (1 . 8)

Other non-cash movements (including charge for share-based payments) 3 .7 8.3

Foreign exchange losses – 0 .1

Operating cash flows before movements in working capital and other underlying items 204 .5 185 .9

(Increase)/decrease in inventories (44 . 2) (18 . 3)

(Increase)/decrease in trade and other receivables (1 10.0) (1 0 2 . 5)

Increase/(decrease) in trade and other payables 43 .7 121 . 4

(Decrease)/increase in provisions, retirement benefit and other non-current liabilities (13 . 4) (7. 8)

Cash generated from operations before non-underlying items 80.6 178.7

Cash outflows from non-underlying items: ERP costs (5.4) –

Cash outflows from non-underlying items: restructuring costs (0.6) (3 .9)

Cash outflows from non-underlying items: acquisition costs (0 . 2) (0. 5)

Cash generated from operations 74 . 4 174 . 3

Interest paid (10 .1) (2 .0)

Interest element of lease rental payments (3.6) (3 .1)

Income tax paid (5.9) (15 . 9)

Net cash inflow from operating activities 54. 8 153.3

Cash flows from investing activities

Interest received 4.0 0.4

Proceeds from sale of property, plant and equipment 8.2 12. 2

Proceeds on disposal of businesses 6 0.7 7. 1

Acquisition of businesses, net of cash acquired 6 (20 . 2) (29.9)

Acquisition of property, plant and equipment 16 (81.6) (84 . 0)

Acquisition of other intangible assets 15 (0 . 1) (0 .4)

Net cash outflow from investing activities (89. 0) (94 .6)

Cash flows from financing activities

Increase in borrowings 99. 3 91 . 2

Cash flows from derivative instruments 0.2 –

Repayment of borrowings (1 . 4) (69.4)

Payment of lease liabilities (29. 5) (29. 8)

Purchase of own shares for ESOP trust (1 . 2) (3 .7)

Dividends paid 13 (26 . 4) (2 5.9)

Net cash inflow/(outflow) from financing activities 4 1.0 (3 7. 6)

Net increase in cash and cash equivalents 6.8 21 .1

Cash and cash equivalents at beginning of year 81.8 61 . 6

Effect of exchange rate movements 5.6 (0 .9)

Cash and cash equivalents at end of year 21 94 .2 81 . 8

1 Operating cash flows before movements in working capital and the movements in trade and other receivables and trade and other payables for the year ended 31 December 2021 have been restated

in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated

financial statements. Cash generated from operations and proceeds from the disposal of property, plant and equipment have been restated to reclassify cash received on the disposal of assets held

from sale.

Consolidated cash flow statement

For the year ended 31 December 2022

142 Keller Group plc Annual Report and Accounts 2022

Financial statements

Consolidated cash flow statement

Notes to the consolidated financial statements

1 Corporate information

The consolidated financial statements of Keller Group plc and its

subsidiaries (collectively, the ‘Group’) for the year ended 31 December

2022 were authorised for issue in accordance with the resolution of the

Directors on 10 March 2023.

Keller Group plc (the ‘company’) is a public limited company, incorporated

and domiciled in the United Kingdom, whose shares are publicly traded on

the London Stock Exchange. The registered office is located at 2 Kingdom

Street, London W2 6BD. The Group is principally engaged in the provision

of specialist geotechnical services. Information on the Group’s structure is

provided in note 9 of the company financial statements.

2 Significant accounting policies

Basis of preparation

In accordance with the Companies Act 2006, these consolidated financial

statements have been prepared and approved by the Directors in

accordance with UK adopted international accounting standards. The

company prepares its parent company financial statements in accordance

with FRS 101.

The consolidated financial statements have been prepared on an historical

cost basis, except for derivative financial instruments that have been

measured at fair value. The carrying values of recognised assets and

liabilities that are designated as hedged items in fair value hedges that

would otherwise be carried at amortised cost are adjusted to recognise

changes in the fair values attributable to the risks that are being hedged in

effective hedge relationships. The consolidated financial statements are

presented in pounds sterling and all values are rounded to the nearest

hundred thousand, expressed in millions to one decimal point, except

when otherwise indicated.

Prior year restatements

Prior year financial reporting fraud

Following an internal management operational review at the Austral

business in Australia, the Group has identified a historical overstatement

of revenue and profit relating to the years ended 31 December 2021,

31 December 2020 and 31 December 2019 due to a financial reporting

fraud. This reporting error has been corrected by restating the prior year

comparatives, reducing contract assets and prepayments (included

with trade and other receivables) by £8.1m and £0.3m respectively, and

increasing other payables (included within trade and other payables) by

£2.3m at 31 December 2021. Contract assets were reduced by £6.5m

and other payables were increased by £0.2m as at 1 January 2021.

The impact on the consolidated income statement for the year ended

31 December 2021 is a decrease in revenue of £1.9m and an increase in

operating costs of £2.4m, resulting in a decrease in operating profit and

profit before tax of £4.3m. The lower profit before tax recognised within

the consolidated Australia group of entities as a result, has impacted the

recognition of deferred tax assets recognised in respect of tax losses

carried forward as the asset is no longer regarded as recoverable. The

deferred tax asset at 31 December 2021 is reduced by £4.2m and the

deferred tax asset at 1 January 2021 is reduced by £2.0m. The deferred

tax charge for the year ended 31 December 2021 is increased by £2.4m.

Net assets are £14.9m lower than previously reported at 31 December

2021 and £8.7m lower at 1 January 2021. The consolidated cash flow

statement has been restated to show the change in profit before tax and

the change in trade and other receivables and trade and other payables.

There is no impact on the cash generated from operations for the year

ended 31 December 2021.

The restatement decreased diluted statutory earnings per share from

86.1p to 77.2p and diluted underlying earnings per share from 88.4p per

share to 84.2p per share for the year ended 31 December 2021. The basic

statutory earnings per share was reduced from 89.5p to 85.2p. Notes

4, 5, 7, 9, 12, 14, 15, 20, 23 and the alternative performance measures

set out on pages 203 to 205 have also been restated, where relevant, to

incorporate these changes.

A reconciliation of the changes made to the restated financial results for

the year ended 31 December 2021 are set out in detail in note 3. Further

details regarding the restatements are provided in the Audit and Risk

Committee report on page 101.

Prior year measurement period adjustment

In the year to 31 December 2021, the Group acquired RECON Services Inc.

and the trade and assets of Subterranean (Manitoba) Ltd. At 31 December

2021, the purchase price allocation for both business combinations was

prepared on a provisional basis in accordance with IFRS 3 ‘Business

Combinations’. Under IFRS 3 ‘Business Combinations’ there is a

measurement period of no longer than 12 months in which to finalise

the valuation of the acquired assets and liabilities.

During the measurement period, the Group finalised the valuation of

intangible assets recognised on acquisition of RECON in respect of the

trade name and customer relationships and the associated deferred tax

liabilities. The Group also finalised the valuation of trade receivables

acquired with Subterranean. The impact of the measurement period

adjustments has been applied retrospectively, meaning that the results

and financial position for the year to 31 December 2021 have been

restated. The impact of these adjustments on the comparatives for the

year ended 31 December 2021 is included in note 3 and further detail is

set out in note 6.

Going concern

At 31 December 2022, the Group had undrawn committed and

uncommitted borrowing facilities totalling £273.8m, comprising £113.6m

of the unutilised portion of the revolving credit facility, £114.1m of other

undrawn committed borrowing facilities and undrawn uncommitted

borrowing facilities of £46.1m, as well as cash and cash equivalents of

£101.1m. At 31 December 2022, the Group’s net debt to underlying

EBITDA ratio (calculated on an IAS 17 covenant basis) was 1.2x, well

within the limit of 3.0x.

The Group has prepared a forecast of financial projections for the

three-year period to 31 December 2025. The forecast underpins the

going concern assessment which has been made for the period through

to 31 March 2024, a period of at least 12 months from when the financial

statements are authorised for issue and aligning with the period in which

the Group’s banking covenants are tested. The base case reflects the

assumptions made by the Group with respect to increased market

penetration including key project wins, organic growth, a focus on cost

reduction, and mobilisation and delivery of the NEOM project. The

forecast shows significant headroom and supports the position that the

Group can operate within its available banking facilities and covenants

throughout this period.

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Notes to the consolidated

financial statements

Notes to the consolidated financial statements continued

2 Significant accounting policies continued

Going concern continued

For the going concern assessment, management ran a series of downside

scenarios over the base case forecast to assess covenant headroom

against available funding facilities. This process involved constructing

scenarios to reflect the Group’s current assessment of its principal risks,

including those that would threaten its business model, future

performance, solvency or liquidity. The principal risks and uncertainties

modelled by management align with those disclosed within this Annual

Report and Accounts.

The following severe but plausible downside assumptions were modelled:

• Rapid downturn in the Group’s markets resulting in up to a 10% decline

in revenues.

• Ineffective execution of projects reducing profits by 1% of revenue.

• Not having the right skills to deliver reducing profits by 0.5% of revenue.

• A combination of other principal risks and trading risks materialising

together reducing profits by up to £42.9m over the period to 31 March

2024. These risks include changing environmental factors, costs of

ethical misconduct and regulatory non-compliance, occurrence of an

accident causing serious injury to an employee or member of the public,

the cost of a product or solution failure and the impact of a previously

unrecorded tax liability.

• Deterioration of working capital performance by 5% of six months’ sales.

The financial and cash effects of these scenarios were modelled

individually and in combination. The focus was on the ability to secure or

retain future work and potential downward pressure on margins.

Management applied sensitivities against projected revenue, margin and

working capital metrics reflecting a series of plausible downside scenarios.

Against the most negative scenario, mitigating actions were overlaid.

These include a range of cost-cutting measures and overhead savings

designed to preserve cash flows. The most extreme downside scenario

modelled, included an aggregation of all risks considered, which showed a

decrease in operating profit of 29.8% and an increase in net debt of 45.2%

against the Group’s latest forecast profit and cash flow projections for the

review period up to 31 March 2024. The adjusted projections within this

scenario does not forecast a breach of covenants in respect of available

funding facilities or any liquidity shortfall. Consideration was given to

scenarios where covenants would be breached and the circumstances

giving rise to these scenarios were considered extreme and remote.

This process allowed the Board to conclude that the Group will continue to

operate on a going concern basis for the period through to the end of

March 2024, a period of at least 12 months from when the financial

statements are authorised for issue. Accordingly, the consolidated

financial statements are prepared on a going concern basis.

Climate change

In preparing the consolidated financial statements, management has

considered the impact of climate change , particularly in the context of the

risks identified in the TCFD disclosure on pages 45 to 48 this year. There

has been no material impact identified on the financial reporting

judgements and estimates. In particular, management considered the

impact of climate change in respect of the following areas:

• estimates of future cash flows used in impairment assessments of

the carrying value of goodwill;

• the useful economic life of plant, equipment and other intangible

assets; and

• going concern and viability of the Group over the next three years

Whilst there is currently no medium-term impact expected from climate

change, management are aware of the variable risks arising from climate

change and will regularly assess these risks against judgement and

estimates made in preparation of the Group’s financial statements.

Changes in accounting policies and disclosures

New and amended standards and interpretations

The following applicable amendments became effective during the

year to 31 December 2022:

• Amendments to IAS 37 ‘Onerous Contracts – Costs of Fulfilling a

Contract’.

• Amendments to IAS 16 ‘Property, Plant and Equipment: Proceeds

before Intended Use’.

• IFRS 9 Financial Instruments ‘Fees in the ‘10 per cent’ test for

derecognition of financial liabilities’.

These amendments have a limited impact on the consolidated financial

statements of the Group.

The Group has not early adopted any standards, interpretations or

amendments that have been issued but are not yet effective.

Amendments to IAS 37 ‘Onerous Contracts –

Costs of Fulfilling a Contract’

An onerous contract is a contract under which the unavoidable costs (ie,

the costs that the Group cannot avoid because it has the contract) of

meeting the obligations under the contract exceed the economic benefits

expected to be received under it. The amendments specify that when

assessing whether a contract is onerous or loss-making, an entity needs

to include costs that relate directly to a contract to provide goods or

services including both incremental costs (eg, the costs of direct labour

and materials) and an allocation of costs directly related to contract

activities (eg, depreciation of equipment used to fulfil the contract as well

as costs of contract management and supervision). General and

administrative costs do not relate directly to a contract and are excluded

unless they are explicitly chargeable to the counterparty under the

contract. This amendment does not have an impact on the consolidated

financial statements of the Group as an allocation of costs directly related

to contract activities was previously included in the unavoidable costs used

in the costs to complete assessment for onerous contracts and the Group

does not include an allocation of general overheads.

Amendments to IAS 16 ‘Property, Plant and Equipment: Proceeds

before Intended Use’

The amendments prohibit entities from deducting from the cost of an item

of property, plant and equipment, any proceeds of the sale of items

produced while bringing that asset to the location and condition necessary

for it to be capable of operating in the manner intended by management.

Instead, an entity recognises the proceeds from selling such items, and the

costs of producing those items, in profit or loss. These amendments had no

impact on the consolidated financial statements of the Group as there were

no sales of such items produced by property, plant and equipment made

available for use on or after the beginning of the earliest period presented.

IFRS 9 Financial Instruments ‘Fees in the ‘10 per cent’ test for

derecognition of financial liabilities’

The amendment clarifies the fees that an entity includes when assessing

whether the terms of a new or modified financial liability are substantially

different from the terms of the original financial liability. These fees include

only those paid or received between the borrower and the lender, including

fees paid or received by either the borrower or lender on the other’s behalf.

This amendment had no impact on the consolidated financial statements

of the Group as there were no modifications of the Group’s financial

instruments during the period .

144 Keller Group plc Annual Report and Accounts 2022

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Basis of consolidation

The consolidated financial statements consolidate the accounts of

the parent and its subsidiary undertakings to 31 December each year.

Subsidiaries are entities controlled by the company. Control exists when

the company has power over an entity, exposure to variable returns from

its involvement with the entity and the ability to use its power over the

entity to affect its returns. Where subsidiary undertakings were acquired

or sold during the year, the accounts include the results for the part of the

year for which they were subsidiary undertakings using the acquisition

method of accounting. Intra-group balances, and any unrealised income

and expense arising from intra-group transactions, are eliminated in

preparing the consolidated financial statements.

Joint operations

Where the Group undertakes contracts jointly with other parties, these

are accounted for as joint operations as defined by IFRS 11. In accordance

with IFRS 11, the Group accounts for its own share of assets, liabilities,

revenues and expenses measured according to the terms of the joint

operations agreement.

Joint ventures

A joint venture is a type of joint arrangement whereby the parties that

have joint control of the arrangement have rights to the net assets of the

joint arrangement. The consolidated financial statements incorporate a

share of the results, assets and liabilities of joint ventures using the equity

method of accounting, whereby the investment is carried at cost plus

post-acquisition changes in the share of net assets of the joint venture,

less any provision for impairment. Losses in excess of the consolidated

interest in joint ventures are not recognised except where the Group has

a constructive commitment to make good those losses. The results of

joint ventures acquired or disposed of during the year are included in the

consolidated income statement from the effective date of acquisition or

up to the effective date of disposal, as appropriate.

Summary of significant accounting policies

Foreign currencies

The Group’s consolidated financial statements are presented in pounds

sterling, which is also the parent company’s functional currency. For each

entity, the Group determines the functional currency and items included

in the financial statements of each entity are measured using that

functional currency.

Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s

entities at their respective functional currency spot rates at the date the

transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are

translated at the functional currency spot rates of exchange at the

reporting date. Differences arising on settlement or translation of

monetary items are recognised in the consolidated income statement.

Non-monetary items that are measured in terms of historical cost in a

foreign currency are translated using the exchange rates at the dates of

the initial transactions.

Group companies

On consolidation, the assets and liabilities of foreign operations are

translated into pounds sterling at the rate of exchange prevailing at

the reporting date and their income statements are translated at

exchange rates prevailing at the dates of the transactions. The exchange

movements arising on translation for consolidation are recognised in

other comprehensive income (OCI). On disposal of a foreign operation,

the component of the translation reserve relating to that particular foreign

operation is reclassified to profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any

fair value adjustments to the carrying amounts of assets and liabilities

arising on the acquisition are treated as assets and liabilities of the foreign

operation and translated at the average rate.

The exchange rates used in respect of principal currencies are:

Average rates 2022 2021

US dollar 1.24 1.38

Canadian dollar 1.61 1.72

Euro 1.17 1.16

Singapore dollar 1.70 1.85

Australian dollar 1.78 1.83

Year-end rates 2022 2021

US dollar 1.21 1.35

Canadian dollar 1.63 1.71

Euro 1.12 1.19

Singapore dollar 1.62 1.82

Australian dollar 1.76 1.86

Revenue from construction contracts

The Group’s operations involve the provision of specialist geotechnical

services. The majority of the Group’s revenue is derived from construction

contracts. Typically, the Group’s construction contracts consist of one

performance obligation; however, for certain contracts (for example

where contracts involve separate phases or products that are not highly

interrelated) multiple performance obligations exist. Where multiple

performance obligations exist, total revenue is allocated to performance

obligations based on the relative standalone selling prices of each

performance obligation.

For each contract, revenue is the amount that is expected to be received

from the customer. Revenue is typically invoiced in stages during the

contracts, however smaller contracts are usually invoiced on completion.

Variable consideration and contract modifications are assessed

on a contract-by-contract basis, according to the terms, facts and

circumstances of the project. Variable consideration is recognised only

to the extent that it is highly probable that there will not be a significant

reversal. The effects of contract modifications are recognised only when

the Group considers there is an enforceable right to consideration.

In certain circumstances, uncertainty over whether a project will be

completed or not will mean that it is not appropriate to recognise

contracted revenues.

Revenue attributed to each performance obligation is recognised based on

either the input or the output method. The output method is the Group’s

default revenue recognition approach. The input method is generally used

for longer-term, more complex contracts. These methods best reflect the

transfer of benefits to the customer.

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Notes to the consolidated financial statements continued

2 Significant accounting policies continued

Revenue from construction contracts continued

• Output method: revenue is recognised on the direct measurement of

progress based on output, such as units of production relative to the

total number of contracted production units.

• Input method: revenue is recognised on the percentage of completion

with reference to cost. The percentage of completion is calculated

based on the costs incurred to date as a percentage of the total

costs expected to satisfy the performance obligation. Estimates

of revenues, costs or extent of progress towards completion are

revised if circumstances change. Any resulting increases or decreases

in estimated revenues or costs are reflected in the percentage of

completion calculation in the period in which the circumstances that

give rise to the revision become known.

Where the Group becomes aware that a loss may arise on a contract,

and that loss is probable, full provision is made in the consolidated

balance sheet; based on the estimated unavoidable costs of meeting the

obligations of the contract, where these exceed the economic benefits

expected to be received. The unavoidable costs under a contract reflect

the least net cost of exiting from the contract, which is the lower of the

cost of fulfilling it and any compensation or penalties arising from failure to

fulfil it.

Incremental bid/tender costs and fulfilment costs are not material to the

overall contract and are expensed as incurred.

Any revenues recognised in excess of billings are recognised as contract

assets within trade and other receivables. Any payments received in excess

of revenue recognised are recognised as contract liabilities within trade

and other payables.

Revenue from the sale of goods and services

The Group’s revenue recognised from the sale of goods and services

primarily relates to certain parts of the North America business. These

contracts typically have a single performance obligation, or a series of

distinct performance obligations that are substantially the same. There are

typically two types of contract:

• Delivery of goods: revenue for such contracts is recognised at a point

in time, on delivery of the goods to the customer.

• Delivery of goods with installation and/or post-delivery services:

revenue for these contracts is recognised at a point in time by reference

to the date on which the goods are installed and/or accepted by the

customer.

Taxes

Current income tax

Current income tax assets and liabilities are measured at the amount

expected to be recovered from or paid to the taxation authorities. The tax

rates and tax laws used to compute the amount are those that are enacted

or substantively enacted at the reporting date in the countries where

the Group operates and generates taxable income. Current income tax

relating to items recognised directly in equity is recognised in equity and

not in the consolidated income statement.

The Group provides for future liabilities in respect of uncertain tax

positions where additional tax may become payable in future periods. Such

provisions are based on management’s best judgement of the probability

of the outcome in reaching agreement with the relevant tax authorities.

For further information refer to note 12.

Deferred tax

Deferred tax is provided using the liability method on temporary

differences between the tax bases of assets and liabilities, and their

carrying amounts for financial reporting purposes at the reporting date.

Deferred tax is recognised on temporary differences in line with IAS 12

‘Income Taxes’. Deferred tax assets are recognised when it is considered

likely that they will be utilised against future taxable profits or deferred tax

liabilities.

Deferred tax is calculated at the tax rates that are expected to apply in the

period when the liability is settled or the asset is realised. Deferred tax is

charged or credited to the income statement, except when it relates to

items charged or credited directly to equity or to OCI, in which case the

related deferred tax is also dealt with in equity or in OCI.

The carrying amount of deferred tax assets is reviewed at each reporting

date and reduced to the extent that it is no longer probable that sufficient

taxable profit will be available to allow all or part of the deferred tax asset

to be utilised. Unrecognised deferred tax assets are reassessed at each

reporting date and are recognised to the extent that it has become

probable that future taxable profits will allow the deferred tax asset to be

recovered.

Deferred tax assets and liabilities are offset when there is a legally

enforceable right to set off current tax assets against current tax liabilities

and when they relate to income taxes levied by the same taxation authority

and the Group intends to settle its current tax assets and liabilities on a net

basis.

Interest income and expense

All interest income and expense is recognised in the income statement on

an accruals basis, using the effective interest method.

Employee benefit costs

The Group operates a number of defined benefit pension schemes, and

also makes payments into defined contribution schemes.

The liability in respect of defined benefit schemes is the present value of

the defined benefit obligations at the balance sheet date, calculated using

the projected unit credit method, less the fair value of the schemes’ assets

where applicable. The Group recognises the administration costs, current

service cost and interest on scheme net liabilities in the income statement,

and remeasurements of defined benefit plans in OCI in full in the period in

which they occur. Any surplus resulting from this calculation is limited to

the present value of any economic benefits available in the form of refunds

from the plans or reductions in future contributions to the plans. Where

there is no legal right to a refund from the plan, the liability is calculated as

the minimum funding requirement to the plan that exists at the balance

sheet date.

The Group also has long service arrangements in certain overseas

countries. These are accounted for in accordance with IAS 19 ‘Employee

Benefits’ and accounting follows the same principles as for a defined

benefit scheme.

Payments to defined contribution schemes are accounted for on an

accruals basis.

Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated

depreciation and accumulated impairment losses, if any. Further details

are set out in note 16 for impairments recognised in the year. Subsequent

expenditure on property, plant and equipment is capitalised when it

enhances or improves the condition of the item of property, plant and

equipment beyond its original assessed standard of performance.

Maintenance expenditure is expensed as incurred.

146 Keller Group plc Annual Report and Accounts 2022

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Depreciation

Depreciation is provided to write off the cost less the estimated residual

value of property, plant and equipment using the straight-line method by

reference to their estimated useful lives as follows:

Buildings 50 years

Plant and equipment 3 to 12 years

Motor vehicles 4 years

Computers 3 years

Depreciation is not provided for on freehold land.

An item of property, plant and equipment is derecognised upon disposal

(ie at the date the recipient obtains control) or when no future economic

benefits are expected from its use or disposal. Any gain or loss arising on

derecognition of the asset (calculated as the difference between the net

disposal proceeds and the carrying amount of the asset) is included in the

income statement when the asset is derecognised.

The residual values, useful lives and methods of depreciation of property,

plant and equipment are reviewed at each financial year end and adjusted

where appropriate.

Leases

The Group assesses at contract inception whether a contract is, or

contains, a lease. That is, if the contract conveys the right to control

the use of an identified asset for a period of time in exchange for

consideration.

Group as lessee

The Group applies a single recognition and measurement approach for all

leases, except for short-term leases and leases of low-value assets (less

than £3,000). The Group recognises lease liabilities to make payments and

right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date

of the lease (ie the date the underlying asset is available for use). Right-of-

use assets are measured at cost, less any accumulated depreciation and

impairment losses, and adjusted for any remeasurement of lease liabilities.

The cost of right-of-use assets includes the amount of lease liabilities

recognised, initial direct costs incurred, and lease payments made at or

before the commencement date less any lease incentives received. Right-

of-use assets are depreciated on a straight-line basis over the shorter of

the lease term and estimated useful lives as follows:

Land and buildings 3 to 15 years

Plant and equipment 2 to 8 years

Motor vehicles 3 to 5 years

Right-of-use assets are tested for impairment in accordance with IAS 36

‘Impairment of Assets’.

Lease liabilities

At the commencement date of the lease, the Group recognises lease

liabilities measured at the present value of lease payments to be made

over the lease term. The lease payments include fixed payments less

any lease incentives receivable, variable lease payments that depend

on an index or a rate, and amounts expected to be paid under residual

value guarantees. The lease payments also include the exercise price of

a purchase option reasonably certain to be exercised by the Group and

payments of penalties for terminating a lease, if the lease term reflects the

Group exercising the option to terminate. Variable lease payments that

do not depend on an index or a rate are recognised as an expense in the

period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses

the incremental borrowing rate at the lease commencement date, if

the interest rate implicit in the lease is not readily determinable. The

incremental borrowing rate applied to each lease is determined by taking

into account the risk-free rate of the country where the asset under lease

is located, matched to the term of the lease and adjusted for factors such

as the credit risk profile of the lessee. Incremental borrowing rates applied

to individual leases range from 1.07% to 16.78%.

After the commencement date, the amount of lease liabilities is increased

to reflect the addition of interest and reduced for the lease payments

made. In addition, the carrying amount of lease liabilities is remeasured

if there is a modification, a change in the lease term, a change in lease

payments (eg changes to future payments resulting from a change in an

index or rate used to determine such lease payments) or a change in the

assessment of an option to purchase the underlying asset. The Group’s

lease liabilities are included in interest-bearing loans and borrowings. Refer

to note 26 for details.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its

short-term leases of plant, machinery and vehicles (ie those leases that

have a lease term of 12 months or less from the commencement date and

do not contain a purchase option). It also applies the lease of low-value

assets recognition exemption to leases of office equipment that are

considered of low asset value (below £3,000). Lease payments on short-

term leases and leases of low-value assets are recognised as an expense

on a straight-line basis over the lease term.

Business combinations

Business combinations are accounted for using the acquisition method

as at the acquisition date, which is the date on which control is transferred

to the Group. Control is the power to govern the financial and operating

policies of an entity so as to obtain benefits from its activities. In assessing

control, the Group takes into consideration potential voting rights that

currently are exercisable. The cost of an acquisition is measured as the

aggregate of the consideration transferred, which is measured at the

fair value at the acquisition date. Acquisition-related costs are expensed

as incurred and included in administrative expenses. Identifiable assets

acquired and liabilities and contingent liabilities assumed in a business

combination are measured initially at their fair values at the acquisition

date. The excess of cost of an acquisition over the fair value of the Group’s

share of the identifiable net assets acquired, including assets identified as

intangibles on acquisition, is recorded as goodwill.

The results of subsidiaries which have been disposed are included up to

the effective date of disposal.

Goodwill

Goodwill is initially measured at cost, being the excess of the aggregate

of the consideration transferred. After initial recognition, goodwill is

measured at cost less any accumulated impairment losses. Goodwill is

reviewed for impairment annually and whenever there is an indication that

the goodwill may be impaired in accordance with IAS 36, any impairment

losses are recognised immediately in the income statement. Goodwill

arising prior to 1 January 1998 was taken directly to equity in the year

in which it arose. Such goodwill has not been reinstated on the balance

sheet. For the purpose of impairment testing, goodwill acquired in a

business combination is, from the acquisition date, allocated to each of the

Group’s cash-generating units (CGUs) that are expected to benefit from

the combination, irrespective of whether other assets or liabilities of the

acquiree are assigned to those units.

Where goodwill has been allocated to a CGU and part of the operation

within that unit is disposed of, the goodwill associated with the disposed

operation is included in the carrying amount of the operation when

determining the gain or loss on disposal. Goodwill disposed in these

circumstances is measured based on the relative values of the disposed

operation and the portion of the CGU retained.

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Notes to the consolidated financial statements continued

2 Significant accounting policies continued

Other intangible assets

Intangible assets, other than goodwill, include purchased licences,

software (including internally generated software), customer relationships,

customer contracts and trade names. Intangible assets are capitalised

at cost and amortised on a straight-line basis over their useful economic

lives from the date that they are available for use and are stated at cost less

accumulated amortisation and impairment losses. The estimated useful

economic lives are as follows:

Licences 1 to 4 years

Software 3 to 7 years

Patents 2 to 7 years

Customer relationships 5 to 7 years

Customer contracts 1 to 2 years

Trade names 5 to 7 years

Software-as-a-service arrangements

The Group’s current SaaS arrangements are arrangements in which the

Group does not control the underlying software used in the arrangement.

Software development costs incurred to configure or customise

application software provided under a cloud computing arrangement and

associated fees are recognised as operating expenses as and when the

services are received where the costs represent a distinct service provided

to the Group.

When such costs incurred do not provide a distinct service, the costs

are recognised as expenses over the duration of the SaaS contract. The

Group capitalises other software costs when the requirements of IAS 38

‘Intangible Assets’ are satisfied, including configuration and customisation

costs which are distinct and within the control of the Group. Such software

costs are capitalised and carried at cost less any accumulated amortisation

and impairment, and amortised on a straight-line basis over the period

which the developed software is expected to be used.

Amortisation commences when the development is complete and the

asset is available for use and is included in the operating costs item of the

consolidated income statement. The amortisation is reviewed at least at

the end of each reporting period and any changes are treated as changes

in accounting estimates.

Impairment of assets excluding goodwill

The carrying values of property, plant and equipment, right-of-use assets

and other intangibles are reviewed for impairment when events or changes

in circumstances indicate the carrying value may be impaired. If any such

indication exists, the recoverable amount, being the lower of their carrying

amount and fair value less costs to sell, of the asset is estimated in order to

determine the extent of impairment loss.

Capital work in progress

Capital work in progress represents expenditure on property, plant and

equipment in the course of construction. Transfers are made to other

property, plant and equipment categories when the assets are available

for use.

Inventories

Inventories are measured at the lower of cost and estimated net realisable

value with allowance made for obsolete or slow-moving items.

Cost comprises direct materials and, where applicable, direct labour costs

and those overheads that have been incurred in bringing the inventories to

their present location and condition.

Write-downs to net realisable value are made for slow-moving, damaged

or obsolete items based on evaluations made at the local level by

reference to frequency of stock turnover or specific factors affecting

the items concerned.

Assets held for sale

Assets are classified as held for sale if their carrying amount will be

recovered by sale rather than by continuing use in the business. Assets

held for sale are measured at the lower of their carrying amount and fair

value less costs to sell, with reference to comparable market transactions.

Assets that are classified as held for sale are not depreciated.

Financial instruments

Financial assets and financial liabilities are recognised in the Group’s

balance sheet when the Group becomes a party to the contractual

provisions of the instrument. The principal financial assets and liabilities

of the Group are as follows:

(a) Trade receivables and trade payables

Trade receivables are initially recorded at fair value and subsequently

measured at cost and reduced by allowances for estimated irrecoverable

amounts.

Trade receivables and contract assets are stated net of expected credit

losses (ECLs). At each reporting date, the Group evaluates the estimated

recoverability of trade receivables and contract assets and records

allowances for ECLs based on experience.

The Group applies the simplified approach to measurement of ECLs in

respect of trade receivables, which requires expected lifetime losses to be

recognised from initial recognition of the receivable.

Immediately after an individual trade receivable or contract asset is

assessed to be unlikely to be recovered, an impairment is recognised as

the difference between the carrying amount of the receivable and the

present value of estimated future cash flows. Customer specific factors

are considered when identifying impairments, which can include the

geographic location and credit rating of a customer.

Where there are no specific concerns over recovery, other than the

increasing age of a trade receivable or contract asset balance past

payment terms, the Group uses a provision matrix, where provision rates

are based on days past due. The provision matrix used reflects estimates

based on past experience, current economic factors and consideration

of forward looking estimates of economic conditions. Generally, trade

receivables are written-off completely if past due for more than 180 days.

Default is defined as the point where there is no further legal address

available for the Group to recover the receivable amount.

The information about the ECLs on the Group’s trade receivables and

contract assets is disclosed in note 20.

Trade payables that are not interest bearing are initially recognised at fair

value and carried at amortised cost.

148 Keller Group plc Annual Report and Accounts 2022

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(b) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank

and on hand and short-term deposits with a maturity of three months

or less. For the purpose of the consolidated statement of cash flows,

cash and cash equivalents consist of cash and short-term deposits, as

defined above, net of outstanding bank overdrafts as they are considered

an integral part of the Group’s cash management. Bank overdrafts are

included within financial liabilities in current liabilities in the balance sheet.

Interest-bearing bank and other borrowings are recorded at the fair value

of the proceeds received, net of direct issue costs. Subsequent to initial

recognition, borrowings are stated at amortised cost, where applicable.

Bank or other borrowings are derecognised when the obligation under

the liability is discharged, cancelled or expires. When an existing financial

liability is replaced by another from the same lender on substantially

different terms, or the terms of an existing liability are substantially

modified, such an exchange or modification is treated as the

derecognition of the original liability and the recognition of a new liability.

The difference in the respective carrying amounts is recognised in the

consolidated income statement.

Financial assets and financial liabilities are offset and the net amount is

reported in the consolidated balance sheet if there is a currently

enforceable legal right to offset the recognised amounts and there is an

intention to settle on a net basis, ie to realise the assets and settle the

liabilities simultaneously.

(d) Derivative financial instruments and hedge accounting

The Group uses derivative financial instruments to manage interest rate

risk and to hedge fluctuations in foreign currencies in accordance with its

risk management policy. In cases where these derivative instruments are

significant, hedge accounting is applied as described below. The Group

does not use derivative financial instruments for speculative purposes.

Derivatives are initially recognised in the balance sheet at fair value on

the date the derivative contract is entered into and are subsequently

remeasured at reporting periods to their fair values. Derivatives are carried

as financial assets when the fair value is positive and as financial liabilities

when the fair value is negative.

Changes in the fair value of the effective portion of derivatives that are

designated and qualify as cash flow hedges are recognised in other

comprehensive income (OCI). Changes in the fair value of the ineffective

portion of cash flow hedges are recognised in the income statement.

Amounts originally recognised in OCI are transferred to the income

statement when the underlying transaction occurs or if the transaction

results in the recognition of a non-financial asset or liability, the amount

accumulated in equity is included in the initial cost or carrying amount of

the hedged asset or liability.

Changes in the fair value of derivative financial instruments that do not

qualify for hedge accounting are recognised in the income statement as

they arise.

Hedge accounting is discontinued when the hedging instrument expires

or is sold, terminated, or exercised, or no longer qualifies for hedge

accounting. At that time, any cumulative gain or loss on the hedging

instrument recognised in OCI is retained in equity until the hedged

transaction occurs. If a hedged transaction is no longer expected to occur,

the net cumulative gain or loss recognised in OCI is transferred to the

income statement in the period.

For the purpose of hedge accounting, hedges are classified as:

• Cash flow hedges when hedging the exposure or variability in cash flows

that is either attributable to a particular risk associated with a recognised

asset or liability or a highly probable transaction.

• Fair value hedges when hedging the exposure to changes in the fair

value of a recognised asset or liability.

• Hedges of a net investment in a foreign operation.

At the inception of a hedge relationship, the Group formally designates

and documents the hedge relationship to which it wishes to apply

hedge accounting and the risk management objective and strategy for

undertaking the hedge. The documentation includes identification of the

hedging instrument, the hedged item, the nature of the risk being hedged

and how the Group will assess whether the hedging relationship meets

the hedge effectiveness requirements (including the analysis of sources of

hedge ineffectiveness and how the hedge ratio is determined). A hedging

relationship qualifies for hedge accounting if it meets all of the following

effectiveness requirements:

• There is ‘an economic relationship’ between the hedged item and the

hedging instrument.

• The effect of credit risk does not ‘dominate the value changes’ that

result from that economic relationship.

• The hedge ratio of the hedging relationship is the same as that resulting

from the quantity of the hedged item that the Group actually hedges

and the quantity of the hedging instrument that the Group actually uses

to hedge that quantity of hedged item.

Provisions

Provisions have been made for employee-related liabilities, restructuring

commitments, onerous contracts, insured liabilities and legal claims,

and other property-related commitments. These are recognised as

management’s best estimate of the expenditure required to settle the

Group’s liability at the reporting date.

A provision is recognised in the balance sheet when the Group has a

present legal or constructive obligation as a result of a past event and

where it is probable that an outflow will be required to settle the obligation

and the amount of the obligation can be estimated reliably. If the effect is

material, expected future cash flows are discounted using a current pre-

tax rate that reflects, where appropriate, the risks specific to the liability.

Where discounting is used, the increase in the provision due to unwinding

the discount is recognised as a finance cost. Details of provisions are set

out in note 24.

Provisions for insured liabilities and legal claims include the full estimated

value of the liability. Any related insurance reimbursement asset that is

virtually certain to be received is separately presented gross within trade

and other receivables or other non-current assets on the consolidated

balance sheet.

Contingent liabilities

Contingent liabilities are possible obligations of the Group of which the

timing and amount are subject to significant uncertainty. Contingent

liabilities are not recognised in the consolidated balance sheet, unless

they are assumed by the Group as part of a business combination. They

are however disclosed, unless they are considered to be remote. If a

contingent liability becomes probable and the amount can be reliably

measured it is no longer treated as contingent and recognised as a liability

on the balance sheet.

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Notes to the consolidated financial statements continued

2 Significant accounting policies continued

Contingent assets

Contingent assets are possible assets of the Group of which the timing

and amount are subject to significant uncertainty. Contingent assets

are not recognised in the consolidated balance sheet. They are however

disclosed, when they are considered to be probable. A contingent asset

is recognised in the financial statements when the inflow of economic

benefits is virtually certain.

Share-based payments

The Group operates a number of equity-settled executive and employee

share plans. For all grants of share options and awards, the fair value of the

employee services received in exchange for the grant of share options

is recognised as an expense, calculated using appropriate option pricing

models. The total amount to be expensed over the vesting period is

determined by reference to the fair value of the options granted, excluding

the impact of any non-market vesting conditions, with a corresponding

increase in retained earnings. The charge is adjusted to reflect expected

actual levels of options vesting due to non-market conditions.

Shares purchased and held in trust in connection with the Group’s

share schemes are deducted from retained earnings. No gain or loss is

recognised within the income statement on the market value of these

shares compared with the original cost.

Segmental reporting

During the year the Group comprised three geographical divisions which

have only one major product or service: specialist geotechnical services.

North America; Europe; and Asia-Pacific, Middle East and Africa continue

to be managed as separate geographical divisions. This is reflected in the

Group’s management structure and in the segment information reviewed

by the Chief Operating Decision Maker.

Dividends

Interim dividends are recorded in the Group’s consolidated financial

statements when paid. Final dividends are recorded in the Group’s

consolidated financial statements in the period in which they receive

shareholder approval.

Non-underlying items

Non-underlying items are disclosed separately in the financial statements

where it is necessary to do so to provide further understanding of the

financial performance of the Group. They are items which are exceptional by

their size and/or are non-trading in nature, including amortisation of acquired

intangibles, goodwill impairment, restructuring costs and other non-trading

amounts, including those relating to acquisitions and disposals. Tax arising

on these items, including movement in deferred tax assets arising from

non-underlying provisions, is also classified as a non-underlying item.

Significant accounting judgements, estimates and assumptions

The preparation of the Group’s consolidated financial statements in

conformity with IFRS requires management to make judgements, estimates

and assumptions that affect the application of policies, reported amounts

of assets and liabilities, revenue and expenses and the accompanying

disclosures, and the disclosure of contingent liabilities. The estimates are

based on historical experience and various other factors that are believed

to be reasonable under the circumstances, the results of which form the

basis of making the judgements about carrying values of assets and liabilities

that are not readily apparent from other sources. Uncertainty about these

assumptions and estimates could result in outcomes that require a material

adjustment to the carrying amount of assets or liabilities affected in future

periods. Actual results may also differ from these estimates.

The estimates are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimate is revised

if the revision affects only that and prior periods, or in the period of

the revision and future periods if the revision affects both current and

future periods.

The key assumptions concerning the future and other key sources of

estimation uncertainty at the reporting date, that have a significant risk

of causing a material adjustment to the carrying amounts of assets and

liabilities within the next financial year, are described below. The Group

based its assumptions and estimates on parameters available when the

consolidated financial statements were prepared. Existing circumstances

and assumptions about future developments, however, may change due to

market changes or circumstances arising that are beyond the control of the

Group. Such changes are reflected in the assumptions when they occur.

Construction contracts

The Group’s approach to key estimates and judgements relating to

construction contracts is set out in the revenue recognition policy. In the

Group consolidated balance sheet this impacts contract assets, contract

liabilities and contract provisions (refer to notes 5 and 24). As described

in the policy the default revenue recognition approach is the output

method. When revenue is recognised based on the output method, there

is little judgement involved in accounting for construction contracts as the

amount of revenue that has not been certified/accepted by the client is

typically small and is usually based on volumes achieved at agreed rates.

These contracts can still be subject to claims and variations resulting in an

adjustment to the revenue recognised.

When revenue is recognised based on the input (cost) method, the main

factors considered when making estimates and judgements include the

cost of the work required to complete the contract in order to estimate

the percentage completion, and the outcome of claims raised against

the Group by customers or third parties. The Group performed around

6,000 contracts during 2022, at an average revenue of approximately

£500,000 and a typical range of between £25,000 and £10m in value. The

majority of contracts were completed in the year and therefore there are

no estimates involved in accounting for these. For contracts that are not

complete at year end, the Group estimates the total costs to complete in

order to measure progress and therefore how much revenue to recognise,

which may impact the contract asset or liability recorded in the balance

sheet. Contract assets are £105.3m and contract liabilities are £85.6m at

31 December 2022. The actual total costs incurred on these contracts

will differ from the estimate at 31 December and it is reasonably possible

that outcomes on these contracts within the next year could be materially

different in aggregate to those estimated.

However, due to the level of uncertainty and timing across a large portfolio

of contracts, which will be at different stages of their contract life, it is not

practical to provide a quantitative analysis of the aggregated judgements

that are applied at a portfolio level. The estimated costs to complete

are management’s best estimate at this point in time and no individual

estimate or judgement is expected to have a materially different outcome.

In the case of loss-making contracts, a full provision is made based on the

estimated unavoidable costs of meeting the obligations of the contract,

where these exceed the economic benefits expected to be received.

The process for estimating the total cost to complete is the same as

for in progress profitable contracts, and will include management’s best

estimate of all labour, equipment and materials costs required to complete

the contracted work. All cost to complete estimates involve judgement

over the likely future cost of labour, equipment and materials and the

impact of inflation is included if material. The amount included within

provisions in respect of contract provisions is £37.8m (2021: £41.9m).

150 Keller Group plc Annual Report and Accounts 2022

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As stated in the revenue recognition accounting policy, variable

consideration is assessed on a contract-by-contract basis, according to

the terms, facts and circumstances of the project. Variable consideration

is recognised only to the extent that it is highly probable that there will not

be a significant reversal; management judgement is required in order to

determine when variable consideration is highly probable. Uncertainty over

whether a project will be completed or not can mean that it is appropriate

to treat the contracted revenue as variable consideration.

The restatement of the prior period financial statements for the impact of

the financing reporting fraud at Austral has involved the use of estimates.

Primarily this has been in calculating the correct accrued cost inputs at

a project level and therefore the relevant revenue to be recognised on

a percentage of completion basis. The estimated costs to complete

included in the restatement of the 31 December 2020 and 2021 balance

sheets are management’s best estimate and no individual estimate or

judgement would result in a materially different outcome.

Non-underlying items

Non-underlying items are disclosed separately in the financial statements

where it is necessary to do so to provide further understanding of the

financial performance of the Group. They are items which are exceptional

by their size and/or are non-trading in nature, including amortisation

of acquired intangibles, goodwill impairment, restructuring costs and

other non-trading amounts, including those relating to acquisitions and

disposals. Tax arising on these items, including movement in deferred tax

assets arising from non-underlying provisions, is also classified as a non-

underlying item.

The Group exercises judgement in assessing whether restructuring

items should be classified as non-underlying. This assessment covers the

nature of the item, cause of the occurrence and scale of impact of that

item on the reported performance. Typically, management will categorise

restructuring costs incurred to exit a specific geography as non-

underlying, in addition restructuring programmes which are incremental to

normal operations undertaken to add value to the business are included in

non-underlying items. The value of exceptional restructuring costs in 2022

(£5.3m) is lower than in 2021 (£7.3m).

Carrying value of goodwill

The Group tests annually whether goodwill has suffered any impairment

in accordance with the accounting policy set out above. Impairment exists

when the carrying value of an asset or cash-generating unit exceeds its

recoverable amount, which is the higher of its fair value less costs of disposal

and its value-in-use. The fair value less costs of disposal calculation is

based on available market data for transactions conducted at arm’s length,

for similar assets or observable market prices less incremental costs of

disposing of the asset. The Group estimates the recoverable amount based

on value-in-use calculations. The value-in-use calculation is based on a

discounted cash flow (DCF) model. The cash flows are derived from the

relevant budget and forecasts for the next three years, including a terminal

value assumption. The recoverable amount is sensitive to the discount rate

used for the DCF model as well as the expected future cash inflows, growth

rates and maintainable earnings assumed within the calculation. Refer to

note 15 for further information.

Deferred tax assets

Deferred tax assets are recognised for unused tax losses and other

timing differences to the extent that it is probable that future taxable

profits will be available against which the losses can be utilised.

Significant management judgement is required to determine the

amount of deferred tax assets that can be recognised, based upon the

likely timing and the level of future taxable profits (based on the same

Board-approved information to support the going concern and goodwill

impairment assessments).

The Group uses judgement in assessing the recoverability of deferred tax

assets, for which the significant assumption is forecast taxable profits.

A 10% shortfall in expected profits would have a proportional impact

on the value of the deferred tax assets recoverable Refer to note 12 for

further information.

The restatement of the prior period financial statements for the impact of

the financing reporting fraud at Austral has involved the use of estimates in

determining the amount of deferred tax assets that should be recognised

on the restated balance sheets as at 31 December 2020 and 2021. The

restatement impact was to reduce the deferred tax assets by £2.0m at 31

December 2020 and by £4.2m at 31 December 2021. This is the maximum

impact, an increase in the forecast taxable profit of 10% would not have a

material impact on the value of these adjustments.

Insurance and legal provisions

The recognition of provisions for insurance and legal disputes is subject to

a significant degree of estimation. In making its estimates, management

seek specialist input from legal advisers and the Group’s insurance claims

handler to estimate the most likely legal outcome. Provisions are reviewed

regularly and amounts updated where necessary to reflect developments

in the disputes. The ultimate liability may differ from the amount provided

depending on the outcome of court proceedings and settlement

negotiations or if investigations bring to light new facts. Refer to note 24

for further information.

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Notes to the consolidated financial statements continued

3 Prior year correction of errors arising from the fraud at Austral and business combination measurement period

adjustments as at 31 December 2021

As set out in the basis of preparation, following an internal management operational review at the Austral business in Australia, the Group has identified

a historical overstatement of revenue and profit relating to the years ended 31 December 2021, 31 December 2020 and 31 December 2019 due to a

financial reporting fraud.

The errors have been corrected by restating each of the affected financial statement line items for the prior periods.

In addition, the results and financial position for the year to 31 December 2021 have been restated to reflect the final purchase price allocation

adjustments in respect of 2021 business combinations. The impact of the measurement period adjustments has been applied retrospectively, in

accordance with IFRS 3 Business Combinations. Further detail is included in note 6.

The following tables summarise the impacts on the Group’s financial statements.

Restatement of consolidated income statement for the year ended 31 December 2021 (statutory results)

2021 Statutory

(as presented)

£m

Impact of prior

period error

£m

Impact of measurement

period adjustments

£m

2021 Statutory

(as restated)

£m

Revenue 2,224.4 (1.9) – 2,222.5

Operating costs (2,141.6) (2.4) – (2,144.0)

Amortisation of acquired intangible assets (2.8) – 0.2 (2.6)

Other operating income 0.7 – – 0.7

Share of post-tax results of joint ventures (0.2) – – (0.2)

Operating profit/(loss) 80.5 (4.3) 0.2 76.4

Finance income 0.4 – – 0.4

Finance costs (9.3) – – (9.3)

Profit/(loss) before taxation 71.6 (4.3) 0.2 67.5

Taxation (9.5) (2.4) – (11.9)

Profit/(loss) for the year 62.1 (6.7) 0.2 55.6

Attributable to:

Equity holders of the parent 63.0 (6.7) 0.2 56.5

Non-controlling interests (0.9) – – (0.9)

62.1 (6.7) 0.2 55.6

Earnings per share

Basic 87.1p (9.3p) 0.3p 78.1p

Diluted 86.1p (9.2p) 0.3p 77.2p

152 Keller Group plc Annual Report and Accounts 2022

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Restatement of consolidated income statement for the year ended 31 December 2021 (underlying results)

2021 Underlying

(as presented)

£m

Impact of prior

period error

£m

Impact of measurement

period adjustments

£m

2021 Underlying

(as restated)

£m

Revenue 2,224.4 (1.9) – 2,222.5

Operating costs (2,132.0) (2.4) – (2,134.4)

Share of post-tax results of joint ventures 0.4 – – 0.4

Operating profit/(loss) 92.8 (4.3) – 88.5

Finance income 0.4 – – 0.4

Finance costs (9.3) – – (9.3)

Profit/(loss) before taxation 83.9 (4.3) – 79.6

Taxation (20.1) 1.2 – (18.9)

Profit/(loss) for the year 63.8 (3.1) – 60.7

Attributable to:

Equity holders of the parent 64.7 (3.1) – 61.6

Non-controlling interests (0.9) – – (0.9)

63.8 (3.1) – 60.7

Earnings per share

Basic 89.5p (4.3p) – 85.2p

Diluted 88.4p (4.2p) – 84.2p

The impact of the restatement of deferred tax in respect of the Austral accounting error is split between underlying and non-underlying as it comprises

the reversal of a £1.2m underlying deferred tax charge and a £3.6m non-underlying deferred tax credit originally recognised in 2021. The restatement

results in a net £2.4m increase in the Group’s statutory tax charge for 2021.

Restatement of consolidated statement of comprehensive income for the year ended 31 December 2021

2021

(as presented)

£m

Impact of prior

period error

£m

Impact of measurement

period adjustments

£m

2021

(as restated)

£m

Profit for the year 62.1 (6.7) 0.2 55.6

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Exchange movements on translation of foreign operations (4.3) 0.5 – (3.8)

Transfer of translation reserve on disposal of subsidiaries (0.4) – – (0.4)

Items that will not be reclassified subsequently to profit or loss:

Remeasurements of defined benefit pension schemes 1.2 – – 1.2

Tax on remeasurements of defined benefit pension schemes (0.2) – – (0.2)

Other comprehensive loss for the year, net of tax (3.7) 0.5 – (3.2)

Total comprehensive income for the year 58.4 (6.2) 0.2 52.4

Attributable to:

Equity holders of the parent 59.3 (6.2) 0.2 53.3

Non-controlling interests (0.9) – – (0.9)

58.4 (6.2) 0.2 52.4

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Notes to the consolidated financial statements continued

3 Prior year correction of errors arising from the fraud at Austral and business combination measurement period

adjustments as at 31 December 2021 continued

Restatement of consolidated balance sheet at 1 January 2021

At 1 January 2021

(as presented)

£m

Impact of prior

period error

£m

At 1 January 2021

(as restated)

£m

Assets

Non-current assets

Goodwill and intangible assets 118.8 – 118.8

Property, plant and equipment 434.9 – 434.9

Investments in joint ventures 4.4 – 4.4

Deferred tax assets 10.3 (2.0) 8.3

Other assets 60.3 – 60.3

628.7 (2.0) 626.7

Current assets

Inventories 60.1 – 60.1

Trade and other receivables 501.9 (6.5) 495.4

Current tax assets 2.1 – 2.1

Cash and cash equivalents 66.3 – 66.3

Assets held for sale 8.7 – 8.7

639.1 (6.5) 632.6

Total assets 1, 267.8 (8.5) 1,259.3

Liabilities

Current liabilities

Loans and borrowings (67.0) – (67.0)

Current tax liabilities (17.1) – (17.1)

Trade and other payables (381.7) (0.2) (381.9)

Provisions (54.4) – (54.4)

(520.2) (0.2) (520.4)

Non-current liabilities

Loans and borrowings (191.8) – (191.8)

Retirement benefit liabilities (31.1) – (31.1)

Deferred tax liabilities (21.3) – (21.3)

Provisions (71.4) – (71.4)

Other liabilities (22.0) – (22.0)

(337.6) – (337.6)

Total liabilities (857.8) (0.2) (858.0)

Net assets 410.0 (8.7) 401.3

Equity

Share capital 7.3 – 7.3

Share premium account 38.1 – 38.1

Capital redemption reserve 7.6 – 7.6

Translation reserve 16.3 – 16.3

Other reserve 56.9 – 56.9

Retained earnings 280.1 (8.7) 271.4

Equity attributable to equity holders of the parent 406.3 (8.7) 397.6

Non-controlling interests 3.7 – 3.7

Total equity 410.0 (8.7) 401.3

154 Keller Group plc Annual Report and Accounts 2022

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Restatement of consolidated balance sheet at 31 December 2021

At 31 December 2021

(as presented)

£m

Impact of prior

period error

£m

Impact of measurement

period adjustments

£m

At 31 December 2021

(as restated)

£m

Assets

Non-current assets

Goodwill and intangible assets 141.5 – (2.0) 139.5

Property, plant and equipment 443.4 – – 443.4

Investments in joint ventures 4.0 – – 4.0

Deferred tax assets 13.0 (4.2) – 8.8

Other assets 88.5 – – 88.5

690.4 (4.2) (2.0) 684.2

Current assets

Inventories 72.1 – – 72.1

Trade and other receivables 592.0 (8.4) 1.9 585.5

Current tax assets 8.9 – – 8.9

Cash and cash equivalents 82.7 – – 82.7

Assets held for sale 3.4 – – 3.4

759.1 (8.4) 1.9 752.6

Total assets 1,449.5 (12.6) (0.1) 1,436.8

Liabilities

Current liabilities

Loans and borrowings (29.8) – – (29.8)

Current tax liabilities (17.9) – – (17.9)

Trade and other payables (505.7) (2.3) – (508.0)

Provisions (53.8) – – (53.8)

(607.2) (2.3) – (609.5)

Non-current liabilities

Loans and borrowings (246.2) – – (246.2)

Retirement benefit liabilities (25.7) – – (25.7)

Deferred tax liabilities (28.6) – 0.3 (28.3)

Provisions (77.9) – – (77.9)

Other liabilities (21.2) – – (21.2)

(399.6) – 0.3 (399.3)

Total liabilities (1,006.8) (2.3) 0.3 (1,008.8)

Net assets 442.7 (14.9) 0.2 428.0

Equity

Share capital 7.3 – – 7.3

Share premium account 38.1 – – 38.1

Capital redemption reserve 7.6 – – 7.6

Translation reserve 11.6 0.5 – 12.1

Other reserve 56.9 – – 56.9

Retained earnings 318.4 (15.4) 0.2 303.2

Equity attributable to equity holders of the parent 439.9 (14.9) 0.2 425.2

Non-controlling interests 2.8 – – 2.8

Total equity 442.7 (14.9) 0.2 428.0

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Notes to the consolidated financial statements continued

3 Prior year correction of errors arising from the fraud at Austral and business combination measurement period

adjustments as at 31 December 2021 continued

Restatement of consolidated cash flow statement for the year ended 31 December 2021

2021

(as presented)

£m

Impact of prior

period error

£m

Impact of

measurement

period

adjustments

£m

Presentation

reclassification for

proceeds from assets

held for sale1

£m

2021

(as restated)

£m

Cash flows from operating activities

Profit before taxation 71.6 (4.3) 0.2 – 67.5

Non-underlying items 12.3 – (0.2) – 12.1

Finance income (0.4) – – – (0.4)

Finance costs 9.3 – – – 9.3

Underlying operating profit 92.8 (4.3) – – 88.5

Depreciation of property, plant and equipment 90.6 – – – 90.6

Amortisation of intangible assets 0.6 – – – 0.6

Share of underlying post-tax results of joint ventures (0.4) – – – (0.4)

Profit on sale of property, plant and equipment (1.8) – – – (1.8)

Other non-cash movements 8.3 – – – 8.3

Foreign exchange losses 0.1 – – – 0.1

Operating cash flows before movements in working

capital and other underlying items 190.2 (4.3) – – 185.9

(Increase)/decrease in inventories (18.3) – – – (18.3)

(Increase)/decrease in trade and other receivables (104.4) 1.9 – – (102.5)

Increase/(decrease) in trade and other payables 119.0 2.4 – – 121.4

(Decrease)/increase in provisions, retirement benefit and

other non-current liabilities (7.8) – – – (7.8)

Cash generated from operations before non-underlying

items 178.7 – – – 178.7

Cash inflows from non-underlying items (2.0) – – (2.4) (4.4)

Cash generated from operations 176.7 – – (2.4) 174.3

Interest paid (2.0) – – – (2.0)

Interest element of lease rental payments (3.1) – – – (3.1)

Income tax paid (15.9) – – – (15.9)

Net cash inflow from operating activities 155.7 – – (2.4) 153.3

Net cash outflow from investing activities (97.0) – – 2.4 (94.6)

Net cash outflow from financing activities (37.6) – – – (37.6)

Net increase/(decrease) in cash and cash equivalents 21.1 – – – 21.1

Cash and cash equivalents at beginning of year 61.6 – – – 61.6

Effect of exchange rate movements (0.9) – – – (0.9)

Cash and cash equivalents at end of year 81.8 – – – 81.8

1 The consolidated cash flow statement has also been restated to reclassify cash flows arising from the disposal of assets held for sale. These proceeds were previously disclosed as cash inflows from

non-underlying items and have now been classified within proceeds from disposal of property, plant and equipment within net cash outflow from investing activities.

156 Keller Group plc Annual Report and Accounts 2022

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4 Segmental analysis

During the year the Group was managed as three geographical divisions and has only one major product or service: specialist geotechnical services.

This is reflected in the Group’s management structure and in the segment information reviewed by the Chief Operating Decision Maker.

2022 2021 (Restated)

Revenue

£m

Operating profit

£m

Revenue

£m

Operating profit

£m

North America 1,896.1 82.0 1,323.1 73.0

Europe 649.3 29.1 549.2 24.3

Asia-Pacific, Middle East and Africa 399.2 6.6 350.2 (0.9)

2,944.6 117.7 2,222.5 96.4

Central items – (9.1) – (7.9)

Underlying 2,944.6 108.6 2,222.5 88.5

Non-underlying items (note 9) – (40.8) – (12.1)

2,944.6 67.8 2,222.5 76.4

2022

Segment

assets

£m

Segment

liabilities

£m

Capital

employed

£m

Capital

additions

£m

Depreciation

and amortisation

£m

Tangible

and intangible

assets

£m

North America 1,016.3 (349.1) 667.2 33.8 54.6 352.5

Europe 338.2 (208.0) 130.2 23.2 27. 8 158.9

Asia-Pacific, Middle East and Africa 251.1 (163.4) 87.7 24.7 13.7 109.6

1,605.6 (720.5) 885.1 81.7 96.1 621.0

Central items

96.3 (484.6) (388.3) – 0.9 2.7

1,701.9 (1,205.1) 496.8 81.7 97.0 623.7

2021

Segment

assets

£m

Segment

liabilities

£m

Capital

employed

£m

Capital

additions

£m

Depreciation

and amortisation

£m

Tangible

and intangible

assets

£m

North America 826.9 (349.6) 477.3 36.4 46.1 332.7

Europe 273.9 (184.7) 89.2 23.8 25.0 143.7

Asia-Pacific, Middle East and Africa 209.6 (102.2) 107.4 24.2 19.5 103.5

1,310.4 (636.5) 673.9 84.4 90.6 579.9

Central items

126.4 (372.3) (245.9) – 0.6 3.0

1,436.8 (1,008.8) 428.0 84.4 91.2 582.9

1 Central items include net debt and tax balances, which are managed by the Group.

2 Depreciation and amortisation excludes amortisation of acquired intangible assets.

3 Tangible and intangible assets comprise goodwill, intangible assets and property, plant and equipment.

4 The 31 December 2021 consolidated income statement and balance sheet has been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period

business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

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Notes to the consolidated financial statements continued

4 Segmental analysis continued

Revenue analysed by country:

2022

£m

2021

(Restated)

£m

United States 1,758.0 1,197.6

Australia 228.4 200.5

Canada 137.9 125.1

United Kingdom 127.4 100.4

Germany 115.9 110.0

Other 577.0 488.9

2,944.6 2,222.5

1 The 31 December 2021 consolidated revenue has been restated in respect of the correction of prior period errors arising from the fraud at Austral, as outlined in note 3 to the consolidated

financial statements.

5 Revenue

The Group’s revenue is derived from contracts with customers. In the following table, revenue is disaggregated by primary geographical market, being the

Group’s operating segments (see note 4) and timing of revenue recognition:

Year ended 31 December 2022 Year ended 31 December 2021 (Restated)

Revenue

recognised on

performance

obligations

satisfied

over time

£m

Revenue

recognised on

performance

obligations

satisfied at a

point in time

£m

Total revenue

£m

Revenue

recognised on

performance

obligations

satisfied

over time

£m

Revenue

recognised on

performance

obligations

satisfied at a

point in time

£m

Total revenue

£m

North America 1,434.7 461.4 1,896.1 1,005.0 318.1 1,323.1

Europe 649.3 – 649.3 549.2 – 549.2

Asia-Pacific, Middle East and Africa 399.2 – 399.2 350.2 – 350.2

2,483.2 461.4 2,944.6 1,904.4 318.1 2,222.5

1 The 31 December 2021 consolidated revenue has been restated in respect of the correction of prior period errors arising from the fraud at Austral, as outlined in note 3 to the consolidated

financial statements.

The final contract value will not always have been agreed at the year end. The contract value, and therefore revenue allocated to a performance obligation,

may change subsequent to the year end as variations and claims are agreed with the customer. The amount of revenue recognised in 2022 from

performance obligations satisfied in previous periods is £15.7m (2021: £28.0m).

The Group’s order book comprises the unexecuted elements of orders on contracts that have been awarded. Where a contract is subject to variations,

only secured variations are included in the reported order book. As at 31 December 2022, the total order book is £1,407.1m (2021: £1,302.1m). The order

book as at 31 December 2021 has been restated in respect of prior period measurement adjustments.

The order book for contracts with a total duration over one year is £384.5m (2021: £402.0m). Revenue on these contracts is expected to be recognised

as follows:

2022

£m

2021

£m

Less than one year 289.3 279.7

One to two years 87.1 103.7

More than two years 8.1 18.6

384.5 402.0

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The following table provides information about trade receivables, contract assets and contract liabilities arising from contracts with customers:

2022

£m

2021

(Restated)

£m

Trade receivables 615.4 450.7

Contract assets 105.3 99.2

Contract liabilities (85.6) (46.5)

1 The 31 December 2021 consolidated trade receivables and contract assets have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period

business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Trade receivables include invoiced amounts for retentions, which are balances typically payable at the end of a construction project, when all contractual

performance obligations have been met, and are therefore received over a longer period of time. Included in the trade receivables balance is £121.3m

(2021: £85.9m) in respect of retentions anticipated to be receivable within one year. Included in non-current other assets is £16.3m (2021: £24.4m)

anticipated to be receivable in more than one year. All contract assets and liabilities are current.

Significant changes in the contract assets and liabilities during the year are as follows:

2022 2021 (Restated)

Contract

assets

£m

Contract liabilities

£m

Contract

assets

£m

Contract

liabilities

£m

As at 1 January 99.2 (46.5) 64.7 (43.9)

Revenue recognised in the current year 911.2 824.2 652.4 516.0

Acquired with businesses 0.6 – 2.0 (0.3)

Amounts transferred to trade receivables (914.1) – (619.5) –

Cash received/invoices raised for performance obligations not yet satisfied – (858.9) – (518.3)

Exchange movements 8.4 (4.4) (0.4) –

As at 31 December 105.3 (85.6) 99.2 (46.5)

1 The 31 December 2021 consolidated contract asset has been restated in respect of the correction of prior period errors arising from the fraud at Austral as outlined in note 3 to the consolidated

financial statements.

6 Acquisitions and disposals

Acquisitions

Current period

GKM Consultants Inc.

On 1 May 2022, the Group acquired 100% of the issued share capital of GKM Consultants Inc., an instrumentation and monitoring provider in Quebec,

Canada, for an initial cash consideration of £3.3m (CAD$5.3m). In addition, contingent consideration is payable dependent on the cumulative EBITDA in

the three-year period post acquisition. At the acquisition date, the fair value of the contingent consideration was £1.2m (CAD$2.0m), based on expected

cashflows generated by the business over a three-year period at that point in time. At 31 December 2022, the fair value of the contingent consideration

has been revised to £0.9m, with the reduction in the amount payable recognised in the income statement as a non-underlying item. The maximum value

of the contingent consideration is £1.2m, the minimum payable would be zero.

The fair value of intangible assets acquired represents the fair value of customer contracts at the date of acquisition, customer relationships and

the tradename. Goodwill arising on acquisition is attributable to the knowledge and expertise of the assembled workforce, the expectation of future

contracts and customer relationships and the operating synergies that arise from the Group’s strengthened market position. The goodwill is not

expected to be deductible for tax purposes.

In the period to 31 December 2022, the acquisition contributed £6.8m to revenue and a profit before tax of £nil. Had the acquisition taken place on

1 January 2022, total Group revenue would have been £2,984.0m and statutory profit before tax for the period would have been £64.4m.

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Notes to the consolidated financial statements continued

6 Acquisitions and disposals continued

The identifiable assets and liabilities as at the date of acquisition were:

Carrying

amount

£m

Fair value

adjustment

£m

Fair

value

£m

Assets

Intangible assets – 1.5 1.5

Property, plant and equipment 0.3 – 0.3

Inventories 0.6 – 0.6

Trade and other receivables

2.8 (0.1) 2.7

Current tax assets 0.1 – 0.1

Cash and cash equivalents 0.2 – 0.2

4.0 1.4 5.4

Liabilities

Trade and other payables (1.9) – (1.9)

Deferred tax liabilities (0.1) (0.4) (0.5)

(2.0) (0.4) (2.4)

Total identifiable net assets 2.0 1.0 3.0

Goodwill 1.6

Total consideration 4.6

Satisfied by:

Initial cash consideration 3.3

Contingent consideration 1.2

Purchase price adjustment 0.1

4.6

Acquisition of businesses per the cash flow statement:

Initial cash consideration 3.3

Purchase price adjustment paid 0.1

Less cash acquired (0.2)

3.2

1 The fair value of trade receivables amounts to £2.7m. The gross amount of trade receivables before the expected credit loss provision is £2.8m and it is expected that the full contractual amounts can

be collected.

Nordwest Fundamentering AS

On 15 November 2022, the Group acquired 100% of the issued share capital of Nordwest Fundamentering AS, a small specialist geotechnical contractor

provider in Norway, for an initial cash consideration of £5.5m (NOK65m). In addition, deferred consideration of £0.5m (NOK6m) is payable.

Due to the timing of the acquisition, the review of the fair value of net assets acquired is expected to be completed in H1 2023. The value of assets

acquired is therefore provisional and will be finalised within 12 months of the acquisition date. All asset values, other than for cash and cash equivalents,

are provisional, including the value of any intangible assets that have been acquired with the business but not yet separated from the goodwill balance.

The provisional value of net assets acquired was £1.0m, resulting in a goodwill and other intangibles value of £5.3m.

In the period to 31 December 2022, the acquisition contributed £2.0m to revenue and a profit before tax of £nil. Had the acquisition taken place on

1 January 2022, total Group revenue would have been £2,956.5m and statutory profit before tax for the period would have been £66.2m.

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The identifiable assets and liabilities as at the date of acquisition were:

Carrying

amount

£m

Fair value

adjustment

£m

Fair

value

£m

Assets

Property, plant and equipment 0.3 – 0.3

Property, plant and equipment – right of use asset 2.1 – 2.1

Trade and other receivables 1.5 – 1.5

Cash and cash equivalents 1.1 – 1.1

5.0 – 5.0

Liabilities

Trade and other payables (1.5) – (1.5)

Loans and borrowings, including lease liabilities (2.2) – (2.2)

Deferred tax liabilities (0.3) – (0.3)

(4.0) – (4.0)

Total identifiable net assets 1.0 – 1.0

Goodwill 5.3

Total consideration 6.3

Satisfied by:

Initial cash consideration 5.5

Deferred consideration 0.5

Purchase price adjustment 0.3

6.3

Acquisition of businesses per the cash flow statement:

Initial cash consideration 5.5

Purchase price adjustment paid 0.3

Less cash acquired (1.1)

4.7

Prior year acquisitions

On 13 July 2021, the Group acquired 100% of the issued share capital of RECON Services Inc., a geotechnical environmental remediation and industrial

services company based in Texas, US.

On 29 September 2021, the Group acquired the trade and assets of Subterranean (Manitoba) Ltd., a geotechnical contractor in Canada.

On 1 November 2021, the Group acquired the trade and assets of Voges Drilling, a geotechnical foundation company based in Texas, US.

Total contingent and deferred consideration in respect of prior year acquisitions of £12.3m was paid during the period, comprising £8.1m in respect of the

RECON Services Inc. acquisition in 2021 and £3.8m in respect of the Geo Construction Group (Bencor) acquisition in 2015. These both represent final

agreements. Additionally, £0.2m was paid in respect of the Geo Instruments acquisition and £0.2m deferred consideration in respect of the Voges Drilling

acquisition.

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Notes to the consolidated financial statements continued

6 Acquisitions and disposals continued

Prior period measurements adjustments

Under IFRS 3 ‘Business Combinations’ there is a measurement period of no longer than 12 months in which to finalise the valuation of the acquired assets

and liabilities. During the measurement period, the acquirer retrospectively adjusts the provisional amounts recognised at the acquisition date to reflect

any new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement

of the amounts recognised as of that date.

The valuation of the RECON Services Inc. acquired assets and liabilities is now final and the adjustments to the provisional fair values that were made

during the measurement period are set out in the table below:

Provisional fair value

recognised on

acquisition

£m

Adjustments during

measurement

period

£m

Revised provisional

fair value recognised

on acquisition

£m

Assets

Intangible assets

18.9 (1.4) 17.5

Property, plant and equipment 4.7 – 4.7

Other non-current assets 0.1 – 0.1

Trade and other receivables 20.4 – 20.4

Current tax assets 1.4 – 1.4

Cash and cash equivalents 0.9 – 0.9

46.4 (1.4) 45.0

Liabilities

Lease liabilities (1.4) – (1.4)

Trade and other payables (11.2) – (11.2)

Current tax liabilities (1.1) – (1.1)

Deferred tax liabilities

(5.1) 0.3 (4.8)

Provisions (1.4) – (1.4)

Other non-current assets (0.3) – (0.3)

(20.5) 0.3 (20.2)

Total identifiable net assets 25.9 (1.1) 24.8

Goodwill 3.7 1.1 4.8

Total consideration 29.6 – 29.6

Satisfied by:

Initial cash consideration 20.2 – 20.2

Initial valuation of contingent consideration 9.5 – 9.5

Purchase price adjustment (0.1) – (0.1)

29.6 – 29.6

1 The adjustment to intangible assets relates to the revised valuation of the tradename and customer relationships acquired.

2 The adjustment to deferred tax liabilities relates to the updated value of intangible assets.

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The impact of these adjustments has been applied retrospectively, meaning that the results and financial position for the year to 31 December 2021 have

been restated, as detailed in note 2. The adjustment to intangible assets at acquisition resulted in a lower amortisation charge in the year to 31 December

2021 of £0.2m, resulting in a net adjustment to the net book value of intangible assets of £1.2m as at 31 December 2021.

The valuation of the Subterranean (Manitoba) Ltd. and Voges Drilling acquired assets and liabilities is now final and the adjustments to the provisional fair

values that were made during the measurement period are set out in the table below:

Provisional fair value

recognised on

acquisition

£m

Adjustments during

measurement

period

£m

Revised provisional

fair value recognised

on acquisition

£m

Assets

Intangible assets 0.4 – 0.4

Property, plant and equipment 6.1 – 6.1

Trade and other receivables

2.7 1.9 4.6

9.2 1.9 11.1

Liabilities

Trade and other payables (1.3) – (1.3)

(1.3) – (1.3)

Total identifiable net assets 7.9 1.9 9.8

Goodwill 1.9 (1.9) –

Total consideration 9.8 – 9.8

Satisfied by:

Initial cash consideration 9.2 – 9.2

Deferred consideration 0.8 – 0.8

Purchase price adjustment (0.2) – (0.2)

9.8 – 9.8

1 The adjustment to trade and other receivables relates to the revised valuation of fair value of the billed and unbilled receivables acquired with Subterranean in relation to their recoverability.

The impact of these adjustments has been applied retrospectively, meaning that the results and financial position for the year to 31 December 2021

have been restated, as detailed in note 3. The adjustments did not result in any impact on the income statement for the year ended 31 December 2021.

A summary of the prior period acquisitions after the final measurement period adjustments is set out in the table below:

Acquisition

Goodwill

£m

Acquired

intangible

assets

£m

Acquired

deferred tax

liabilities

£m

Fair value

of other

identifiable

assets and

liabilities

£m

Consideration

paid

£m

Cash acquired

£m

Non-cash

elements

£m

Net cash

outflow

£m

RECON 4.8 17.5 (4.8) 12.1 29.6 0.9 8.0 (20.7)

Subterranean and Voges – 0.4 – 9.4 9.8 – 0.6 (9.2)

4.8 17.9 (4.8) 21.5 39.4 0.9 8.6 (29.9)

Disposals

Current year

There were no material disposals during the year to 31 December 2022. Contingent consideration of £0.7m was received in accordance with the terms of

the sale and purchase agreement of Wannenwetsch GmbH, which was disposed of in 2020.

Prior year

In 2021, the Group disposed of its Cyntech Anchors operation in Canada, being 100% of the issued share capital of Keller Cyntech U.S. and Cyntech

Anchors Ltd., for a total consideration of £6.0m (CAD$10.2m), consisting of the sale price of £3.1m (CAD$5.3m) and further sale price adjustments in

relation to working capital of £2.9m (CAD$4.9m). A non-underlying loss on disposal of £0.2m was recognised.

In 2021, the Group completed the disposal of its Colcrete business, being 100% of the issued share capital of Keller Colcrete Limited, for a cash

consideration of £0.4m. A non-underlying loss of disposal of £0.4m was recognised in 2020. Contingent consideration of £0.7m in relation to the disposal

of Wannenwetsch GmbH was received in 2021 in addition to the initial cash consideration received in 2020.

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Notes to the consolidated financial statements continued

7 Operating costs

Note

2022

£m

2021

(Restated)

£m

Raw materials and consumables 1,054.3 711.8

Staff costs 8 699.8 580.7

Other operating charges 764.7 583.2

Amortisation of intangible assets 15 0.5 0.6

Expenses relating to short-term leases and leases of low-value assets 201.7 154.8

Depreciation:

Owned property, plant and equipment 16a 71.1 64.1

Right-of-use assets 16b 29.7 26.5

Net expected credit loss of trade receivables and contract assets

20 15.7 12.7

Underlying operating costs 2,837.5 2,134.4

Non-underlying items 9 30.0 9.6

Statutory operating costs 2,867.5 2,144.0

Other operating charges include:

Redundancy and other reorganisation costs – –

Fees payable to the company’s auditor for the audit of the company’s Annual Report and Accounts 1.4 1.1

Fees payable to the company’s auditor for other services:

The audit of the company’s subsidiaries, pursuant to legislation 2.0 1.9

Other assurance services 0.1 0.1

1 The 31 December 2021 other operating charges has been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

2 Of this amount £11.5m (2021: £15.3m) are subject to enforcement activity.

During the year, the Group received £nil (2021: £2.4m) of direct subsidies with respect to COVID-19 related aid measures introduced by government

bodies in various countries. These subsidies are recognised as an offset against the expense item which they are intended to compensate.

8 Employees

The aggregate staff costs of the Group were:

2022

£m

2021

£m

Wages and salaries 606.7 505.6

Social security costs 66.7 57.5

Other pension costs 23.1 13.7

Share-based payments 3.3 3.9

699.8 580.7

These costs include Directors’ remuneration. Fees payable to Non-executive Directors totalled £0.5m (2021: £0.5m).

In the United States, the Coronavirus Aid, Relief, and Economic Security Act allowed employers to defer the payment of the employer’s share of social

security taxes otherwise required to be paid between 27 March and 31 December 2020. The payment of the deferred taxes is required in two instalments;

the first half was paid on 3 January 2022 and the remainder was paid on 3 January 2023.

The average number of staff, including Directors, employed by the Group during the year was:

2022

Number

2021

Number

North America 4,604 4,722

Europe 3,043 2,922

Asia-Pacific, Middle East and Africa 2,174 2,080

9,821 9,724

164 Keller Group plc Annual Report and Accounts 2022

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9 Non-underlying items

Non-underlying items include items which are exceptional by their size and/or are non-trading in nature, including amortisation of acquired intangibles,

goodwill impairment, restructuring costs and other non-trading amounts, including those relating to acquisitions and disposals. Tax arising on these

items, including movement in deferred tax assets arising from non-underlying provisions, is also classified as a non-underlying item. These are detailed in

the table below.

As underlying results include the benefits of restructuring programmes and acquisitions but exclude significant costs (such as major restructuring costs

and the amortisation of acquired intangible assets) they should not be regarded as a complete picture of the Group’s financial performance, which is

presented in its total statutory results. The exclusion of non-underlying items may result in underlying earnings being materially higher or lower than total

statutory earnings. In particular, when significant impairments and restructuring charges are excluded, underlying earnings will be higher than total

statutory earnings.

2022

£m

2021

(Restated)

£m

ERP implementation costs 6.3 –

Goodwill impairment 12.5 –

Exceptional restructuring costs 5.3 7.3

Exceptional historic contract dispute 3.5 –

Claims related to closed business 2.5 –

Impairment costs 0.3 –

Contingent consideration: additional amounts provided 0.1 1.3

Change in fair value of contingent consideration (0.7) –

Loss on disposal of operations – 0.5

Acquisition costs 0.2 0.5

Non-underlying items in operating costs 30.0 9.6

Amortisation of acquired intangible assets 10.3 2.6

Contingent consideration received (0.7) (0.7)

Non-underlying items in other operating income (0.7) (0.7)

Amortisation of joint venture acquired intangibles 1.2 0.6

Total non-underlying items in operating profit 40.8 12.1

Non-underlying items in finance income (3.6) –

Total non-underlying items before taxation 37.2 12.1

Taxation (9.0) (7.0)

Total non-underlying items after taxation 28.2 5.1

1 The 31 December 2021 consolidated amortisation of acquired intangible assets has been restated in respect of prior period business combination measurement adjustments, as outlined in notes 3

and 6 to the consolidated financial statements.

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Notes to the consolidated financial statements continued

9 Non-underlying items continued

Non-underlying items in operating costs

ERP implementation costs

The Group has commenced a strategic project to implement a new cloud computing enterprise resource planning (ERP) system across the Group.

Due to the size, nature and incidence of the relevant costs expected to be incurred, the costs are presented as a non-underlying item, as they are not

reflective of underlying performance of the Group. As this is a complex implementation, project costs are expected to be incurred over the next five years.

Non-underlying ERP costs of £6.3m include only costs relating directly to the implementation including external consultancy costs and the cost of the

dedicated implementation team. Non-underlying costs does not include operational post-deployment costs such as licence costs for businesses that

have transitioned. There were no ERP implementation costs in 2021.

Goodwill impairment

The goodwill impairment of £12.5m relates to Austral (£7.7m) due to uncertainty over the future profitability of the cash-generating unit, following the

discovery of the financial reporting fraud; and Sweden (£4.8m) due to a downward revision to the medium-term forecast as forward projections did not

fully support the carrying value of the goodwill. Refer to note 15 for further information. There was no goodwill impairment cost in 2021.

Exceptional restructuring costs

Exceptional restructuring costs of £5.3m comprises £3.4m in the North America Division, £1.8m in the Europe Division, a credit of £0.6m in AMEA and

£0.7m incurred centrally. In North America, the costs arose as a result of a management and property reorganisation within the parts of the business

located in Texas. Costs include redundancy costs and property duplication costs. In Europe, the costs related to the scheduled exit of the Ivory Coast and

Morocco businesses, including asset impairments and redundancy costs. In AMEA, the credit arose from restructuring costs provided for in prior years as

costs incurred were lower than originally anticipated.

The Group exercises judgement in assessing whether restructuring items should be classified as non-underlying. This assessment covers the nature

of the item, cause of the occurrence and scale of impact of that item on the reported performance. Typically, management will categorise restructuring

costs incurred to exit a specific geography as non-underlying, in addition restructuring programmes which are incremental to normal operations

undertaken to add value to the business are included in non-underlying items. The value of exceptional restructuring costs in 2022 (£5.3m) is lower than

in 2021 (£7.3m).

In 2021, exceptional restructuring costs of £7.3m comprised £4.4m in Europe, £2.5m in Asia-Pacific, Middle East and Africa, £1.6m of central items

and a credit of £1.2m in North America. In Europe, these costs arose as a continuation of the strategic project to rationalise the Europe Division. The

restructuring costs during the period comprised redundancy costs, property costs, asset impairments and costs of market exit which include project

termination costs. In Asia-Pacific, Middle East and Africa these costs arose as part of the project to rationalise the Middle East and Africa business. The

restructuring costs during the period comprised mainly asset impairments and redundancy costs. Centrally, restructuring costs were incurred in KGS, the

in-house equipment manufacturer, as a result of a restructuring plan for this business. These costs comprised redundancy costs and asset impairments.

In North America the credit arose from the reduction in restructuring costs provided for in 2020 as costs incurred were lower than originally anticipated.

Exceptional historic contract dispute and claims related to closed business

The £3.5m exceptional charge relates to a provision made for additional legal costs relating to the historical Avonmouth contract dispute following a

negotiation with insurers during 2022. In addition, a £2.5m provision for a legal claim in respect of a closed business has been recognised.

Impairment costs

An impairment charge of £0.3m by the North-East Europe Business Unit is in respect of trade receivables in Ukraine that are not expected to be

recovered due to the ongoing conflict.

Contingent consideration

Additional contingent consideration of £0.1m relates to the acquisition of the Geo Instruments US business in 2017. A credit of £0.7m arose from the

reduction in the fair value of contingent consideration payable in respect of the RECON and GKM acquisitions. The contingent consideration paid in

respect of RECON has been finalised and was settled during the year.

In 2021, additional contingent consideration payable of £1.3m relates to the acquisition of the Geo Construction Group (Bencor) in 2015, following

finalisation of items referenced in the sale and purchase agreement.

Loss on disposal of operations

The Cyntech Anchors operation in Canada was disposed of on 28 June 2021, resulting in a net loss on disposal of £0.2m. During 2021 there was a true-

up of the sale price of the Brazil disposal reflected in 2020, resulting in an additional loss of £0.3m in the year. This increased the total non-underlying loss

on disposal for this transaction to £9.5m.

Acquisition costs

Acquisition and other costs of £0.9m in the year comprised professional fees relating to the NWF acquisition in Norway and centrally incurred project costs. In

2021, acquisition costs of £0.5m in the year comprised professional fees relating to the RECON and Subterranean acquisitions.

166 Keller Group plc Annual Report and Accounts 2022

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Amortisation of acquired intangible assets

Amortisation of acquired intangible assets relates to the RECON, GKM, Moretrench and Voges acquisitions, as restated for the prior period measurement

adjustment to the RECON acquired intangible assets.

Non-underlying items in other operating income

During 2022, the second instalment of contingent consideration was received in relation to the Wannenwetsch disposal in September 2020, in

accordance with the terms of the sale and purchase agreement. The first instalment was received during 2021.

Amortisation of joint venture acquired intangibles

Amortisation of joint venture intangibles relates to NordPile, an acquisition by the Group’s joint venture interest KFS Finland Oy on 8 September 2021.

Non-underlying finance income

During the year the Group entered into an interest rate derivative with the purpose of hedging a highly probable forecast transaction. The forecast

transaction did not take place and as a result the amount arising from the hedging instrument has been recognised in the income statement. This

has resulted in the recognition of £3.6m of finance income which has been included in non-underlying as it material in size and is not reflective of the

underlying finance income and costs of the Group.

Non-underlying taxation

Refer to note 12 for details of the non-underlying tax items.

10 Finance income

2022

£m

2021

£m

Bank and other interest receivable 0.3 0.2

Net pension interest income 0.1 –

Other finance income 0.1 0.2

Underlying finance income 0.5 0.4

Non-underlying finance income 3.6 –

Total finance income 4.1 0.4

11 Finance costs

2022

£m

2021

£m

Interest payable on bank loans and overdrafts 7.8 3.1

Interest payable on other loans 2.4 1.3

Interest on lease liabilities 3.6 3.1

Net pension interest cost 0.1 0.2

Other interest costs 1.5 1.0

Total interest costs 15.4 8.7

Unwinding of discount and effect of changes in discount rates on provisions 0.2 0.6

Total finance costs 15.6 9.3

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Notes to the consolidated financial statements continued

12 Taxation

2022

£m

2021

(Restated)

£m

Current tax expense:

Current year 46.6 14.0

Prior years (2.5) (3.0)

Total current tax 44.1 11.0

Deferred tax expense:

Current year (32.0) 0.7

Prior years (0.8) 0.2

Total deferred tax (32.8) 0.9

11.3 11.9

1 The 31 December 2021 consolidated tax expense has been restated in respect of the correction of prior period errors arising from the fraud at Austral as outlined in notes 3 and 6 to the consolidated

financial statements.

UK corporation tax is calculated at 19% (2021: 19%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the

rates prevailing in the respective jurisdictions.

The effective tax rate can be reconciled to the UK corporation tax rate of 19% (2021: 19%) as follows:

2022 2021 (Restated)

Underlying

£m

Non-underlying

items (note 9)

£m

Statutory

£m

Underlying

£m

Non- underlying

items (note 9)

£m

Statutory

£m

Profit/(loss) before tax 93.5 (37.2) 56.3 79.6 (12.1) 67.5

UK corporation tax charge/(credit) at 19% (2021: 19%) 17.8 (7.1) 10.7 15.1 (2.3) 12.8

Tax charged at rates other than 19% (2021: 19%) 3.1 (1.0) 2.1 5.1 (0.5) 4.6

Tax losses and other deductible temporary

differences not recognised 6.6 0.8 7.4 3.3 1.2 4.5

Utilisation of tax losses and other deductible temporary

differences previously unrecognised (0.7) (4.3) (5.0) (1.4) (5.5) (6.9)

Permanent differences (2.8) 2.6 (0.2) (0.5) 0.1 (0.4)

Adjustments to tax charge in respect of previous periods (3.3) – (3.3) (2.8) – (2.8)

Other (0.4) – (0.4) 0.1 – 0.1

Tax charge/(credit) 20.3 (9.0) 11.3 18.9 (7.0) 11.9

Effective tax rate 21.7% 24.2% 20.1% 23.7% 57.9% 17.6%

1 The 31 December 2021 consolidated profit/(loss) before tax and tax charge/(credit) have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior

period business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

The tax credit of £9.0m on non-underlying losses includes £4.7m as the tax benefit of amounts which are expected to be deductible for tax purposes

and £4.3m from the re-recognition of deferred tax assets in Canada at 31 December 2022. The deferred tax asset has been reassessed as recoverable

following the improved performance of the business demonstrating a more reliable source of taxable income in order to utilise the tax losses. As the

de-recognition of the deferred tax asset was booked through the non-underlying tax charge, the credit from the re-recognition of the deferred tax asset

has also been treated as a non-underlying item. The 2021 restated tax credit on non-underlying items is £7.0m. This includes a partial re-recognition

of Canadian deferred tax assets of £5.5m and the benefit of a net tax credit on other non-underlying charges which are expected to be deductible for

tax purposes.

The effective tax rate in 2022 on non-underlying items before the re-recognition of the deferred tax asset is lower than the effective tax rate on

underlying items due to the inclusion of goodwill impairment costs for which there is no corresponding tax credit.

168 Keller Group plc Annual Report and Accounts 2022

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The Group is subject to taxation in over 40 countries worldwide and the risk of changes in tax legislation and interpretation from tax authorities in the

jurisdictions in which it operates. The assessment of uncertain positions is subjective and subject to management’s best judgement of the probability

of the outcome in reaching agreement with the relevant tax authorities. Where tax positions are uncertain, provision is made where necessary based on

interpretation of legislation, management experience and appropriate professional advice. Management do not expect the outcome of these estimates

to be materially different from the position taken.

The UK government has released draft legislation introducing a global minimum tax of 15% in line with the OECD’s Pillar 2 rules. If enacted the rules will

apply to Keller from 1 January 2024. Based on the draft legislation, it is not expected that the Pillar 2 rules will have a material impact on the group’s overall

tax charge.

The following are the major deferred tax liabilities and assets recognised by the Group and the movements during the current and prior reporting periods:

Unused tax

losses

£m

Accelerated

capital

allowances

£m

Retirement

benefit

obligations

£m

Other

employee-

liabilities

£m

Bad debts

£m

Other

temporary

differences

£m

Total

£m

At 1 January 2021 (Restated)

(8.9) 34.4 (4.0) (6.5) (6.2) 4.2 13.0

(Credit)/charge to the income statement (4.2) 3.2 (0.7) 0.3 (2.4) 4.5 0.7

Charge to other comprehensive income – – 0.2 – – – 0.2

Acquisition and disposal of businesses – 0.3 – – – 4.4 4.7

Exchange movements 0.1 0.3 0.2 (0.1) (0.1) 0.2 0.6

Other reallocations/transfers – – 0.1 – – 0.2 0.3

At 31 December 2021 and 1 January 2022 (Restated)

(13.0) 38.2 (4.2) (6.3) (8.7) 13.5 19.5

(Credit)/charge to the income statement (1.0) (31.2) 0.3 0.9 (0.3) (1.6) (32.9)

Charge to other comprehensive income – – 0.6 – – – 0.6

Acquisition and disposal of businesses – – – – – 0.8 0.8

Exchange movements (0.5) 3.9 0.1 (0.7) (1.1) 0.6 2.3

Other reallocations/transfers – – – – – (0.1) (0.1)

At 31 December 2022 (14.5) 10.9 (3.2) (6.1) (10.1) 13.2 (9.8)

1 The 1 January 2021 and 31 December 2021 consolidated deferred tax assets have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period

business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

2 Other temporary differences are mainly in respect of intangible assets.

The movement from a net deferred tax liability of £19.5m at 31 December 2021 to a net deferred tax asset of £9.8m at 31 December 2022 is largely as a

result of a change in law in the US with regards to the timing of the deductibility of R&D expenditure (totalling £29.3m included in the charge in accelerated

capital allowances for the year). Previously, R&D expenditure was tax deductible in the year that it was incurred, whereas following the law change in 2022

R&D expenditure is capitalised for tax purposes and amortised over five years.

Deferred tax assets include amounts of £15.1m (2021 as restated: £8.8m) where recovery is based on forecasts of future taxable profits that are

expected to be available to offset the reversal of the associated temporary differences. The deferred tax assets arise predominantly in Canada

(£9.1m), the US (£4.1m) and the UK (£1.8m). The amount of profits in each territory which are necessary to be realised over the forecast period to

support these assets are £37m, £16m and £7m respectively. Canadian tax rules currently allow tax losses to be carried forward up to 20 years. The

UK and the US allow losses to be carried forward indefinitely. The recovery of deferred tax assets has been assessed by reviewing the likely timing

and level of future taxable profits. The period assessed for recovery of assets is appropriate for each territory having regard to the specific facts and

circumstances and the probability of achieving forecast profitability. A 10% shortfall in expected profits would have a proportional impact on the value

of the deferred tax assets recoverable.

The following is the analysis of the deferred tax balances:

2022

£m

2021

(Restated)

£m

Deferred tax liabilities 5.3 28.3

Deferred tax assets (15.1) (8.8)

(9.8) 19.5

1 The 31 December 2021 consolidated deferred tax assets have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

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Notes to the consolidated financial statements continued

12 Taxation continued

At the balance sheet date, the Group had unused tax losses of £140.9m (2021: £125.0m), mainly arising in Canada, Australia, Malaysia and the UK,

available for offset against future profits, on which no deferred tax asset has been recognised. Of these losses, £118.2m (2021: £74.3m) may be carried

forward indefinitely. Of the remaining losses, £19.2m expire in 2025 and £3.5m expire in 2035.

At the balance sheet date, the aggregate of other deductible temporary differences for which no deferred tax asset has been recognised was £18.0m

(2021: £13.9m). These differences have no expiry term.

At the balance sheet date the aggregate of temporary differences associated with investments in subsidiaries, branches and joint ventures for which

no deferred tax liability has been recognised is £156.7m (2021: £124.9m), on the basis that the Group can control the reversal of temporary differences

and it is probable that the temporary differences will not reverse in the foreseeable future. The unprovided deferred tax liability in respect of these timing

differences is £10.2m (2021: £7.6m).

13 Dividends payable to equity holders of the parent

Ordinary dividends on equity shares:

2022

£m

2021

£m

Amounts recognised as distributions to equity holders in the year:

Final dividend for the year ended 31 December 2021 of 23.3p (2020: 23.3p) per share 16.8 16.8

Interim dividend for the year ended 31 December 2022 of 13.2p (2021: 12.6p) per share 9.6 9.1

26.4 25.9

The Board has recommended a final dividend for the year ended 31 December 2022 of £17.7m, representing 24.5p (2021: 23.3p) per share. The

proposed dividend is subject to approval by shareholders at the Annual General Meeting on 17 May 2023 and has not been included as a liability in these

financial statements.

14 Earnings per share

Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average

number of ordinary shares outstanding during the year.

When the Group makes a profit, diluted earnings per share equals the profit attributable to equity holders of the parent adjusted for the dilutive impact

divided by the weighted average diluted number of shares. When the Group makes a loss, diluted earnings per share equals the loss attributable to the

equity holders of the parent divided by the basic average number of shares. This ensures that earnings per share on losses is shown in full and not diluted

by unexercised share awards.

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation

of these financial statements.

Basic and diluted earnings per share are calculated as follows:

Underlying earnings attributable to

the equity holders of the parent

Earnings attributable to the

equity holders of the parent

2022

2021

(Restated)

2022

2021

(Restated)

Basic and diluted earnings (£m) 74.2 61.6 46.0 56.5

Weighted average number of ordinary shares (m)

Basic number of ordinary shares outstanding 72.7 72.3 72.7 72.3

Effect of dilution from:

Share options and awards 1.0 0.9 1.0 0.9

Diluted number of ordinary shares outstanding 73.7 73.2 73.7 73.2

Earnings per share

Basic earnings per share (p) 102.1 85.2 63.3 78.1

Diluted earnings per share (p) 100.7 84.2 62.4 77.2

1 The 31 December 2021 consolidated earnings attributable to the equity holders of the parent has been restated in respect of the correction of prior period errors arising from the fraud at Austral and

prior period business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

2 The weighted average number of shares takes into account the weighted average effect of changes in treasury shares during the year. The weighted average number of shares excludes those held in

the Employee Share Ownership Plan Trust and those held in treasury, which for the purpose of this calculation are treated as cancelled.

170 Keller Group plc Annual Report and Accounts 2022

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15 Goodwill and intangible assets

Goodwill

£m

Arising on

acquisition

£m

Other

£m

Total

£m

Cost

At 1 January 2021 219.6 58.9 23.3 301.8

Additions – – 0.4 0.4

Acquired with businesses

4.8 17.9 – 22.7

Disposals – – (0.7) (0.7)

Exchange movements 1.1 0.5 (0.6) 1.0

At 31 December 2021 and 1 January 2022

225.5 77.3 22.4 325.2

Additions – – 0.1 0.1

Acquired with businesses (note 6)

6.9 1.5 – 8.4

Exchange movements 15.8 3.2 4.6 23.6

At 31 December 2022 248.2 82.0 27.1 357.3

Accumulated amortisation and impairment

At 1 January 2021 104.4 56.5 22.1 183.0

Amortisation charge for the year

– 2.6 0.6 3.2

Disposals – – (0.7) (0.7)

Exchange movements 0.6 (0.1) (0.3) 0.2

At 31 December 2021 and 1 January 2022

105.0 59.0 21.7 185.7

Impairment charge for the year 12.5 – – 12.5

Amortisation charge for the year – 10.3 0.4 10.7

Exchange movements 5.4 1.4 4.4 11.2

At 31 December 2022 122.9 70.7 26.5 220.1

Carrying amount

At 1 January 2021 115.2 2.4 1.2 118.8

At 31 December 2021 and 1 January 2022

120.5 18.3 0.7 139.5

At 31 December 2022 125.3 11.3 0.6 137.2

1 The 31 December 2021 consolidated balance sheet has been restated in respect of prior period business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated

financial statements.

2 Goodwill arising on acquisition during the year relates to the acquisition of GKM Consultants Inc. and Nordwest Fundamentering AS.

Intangible assets arising on acquisition represent customer contracts and relationships with a carrying amount of £5.5m (2021: £12.4m) and trade

names with a carrying amount of £5.8m (2021: £5.9m). Other intangibles represent internally developed software and licences. There are no indicators

of impairment for these assets at 31 December 2022.

For the purposes of impairment testing, goodwill has been allocated to ten (2021: nine) separate cash-generating units (CGUs). The carrying amount of

goodwill allocated to the five CGUs with the largest goodwill balances is significant in comparison to the total carrying amount of goodwill and comprises

95% of the total (2021: 92%). The relevant CGUs and the carrying amount of the goodwill allocated to each are as set out below, together with the pre-

tax discount rate and medium-term growth rate used in their value-in-use calculations:

CGU Geographical segment

2022 2021

Carrying

value

£m

Pre-tax

discount rate1

Forecast

growth rate

Carrying

value

£m

Pre-tax

discount rate1

Forecast

growth rate

Keller US North America 51.9 13.6 2.0 45.0 11.6 2.0

Suncoast North America 35.5 13.5 2.0 31.9 11.6 2.0

Keller Canada North America 13.7 12.7 2.0 13.1 11.8 2.0

Keller Limited Europe 12.1 13.2 2.0 12.1 10.1 3.0

Austral Asia-Pacific, Middle East and Africa – – – 7.3 12.9 2.0

Other North America and Europe 12.1 11.1

125.3 120.5

1 Pre-tax discount rates and forecast growth rates are defined by market.

2 The 31 December 2021 consolidated balance sheet has been restated in respect of prior period business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated

financial statements.

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Notes to the consolidated financial statements continued

15 Goodwill and intangible assets continued

The recoverable amount of the goodwill allocated to each CGU has been calculated on a value-in-use basis. The calculations use cash flow projections

based on financial budgets and forecasts approved by management and cover a three-year period.

The Group’s businesses operate in a diverse geographical set of markets, some of which are expected to continue to face uncertain conditions in future

years. The most important factors in the value-in-use calculations are the forecast revenues and operating margins during the forecast period, the

growth rates and discount rates applied to future cash flows. The key assumptions underlying the cash flow forecasts are revenue and operating margins

assumed throughout the forecast period. Revenue and operating margins are prepared as part of the Group’s three-year forecast in line with the Group’s

annual business planning process. The Group’s budget for 2023 and financial projections for 2024 and 2025 were approved by the Board, and have been

used as the basis for input into the value-in-use calculation.

Management considers all the forecast revenues, margins and profits to be reasonably achievable given recent performance and the historic trading

results of the relevant CGUs. A margin for historical forecasting error has also been factored into the value-in-use model. Cash flows beyond 2025

which are deemed to be on a continuing basis have been extrapolated using the forecast growth rates above and do not exceed the long-term average

growth rates for the markets in which the relevant CGUs operate. The growth rates used in the Group’s value-in-use calculation into perpetuity are

based on forecasted growth in the construction sector in each region where a CGU is located and adjusted for longer-term compound annual growth

rates for each CGU as estimated by management. The discount rates used in the value-in-use calculations are based on the weighted average cost of

capital of companies comparable to the relevant CGUs, adjusted as necessary to reflect the risk associated with the asset being tested. Management’s

assessment for Keller Limited is sensitive to the future successful execution of business plans designed to address the reduction in revenue, margins and

profits from HS2 contracts, scheduled to be completed within the three year-forecast period.

Following the discovery of the financial reporting fraud at Austral and the uncertainty over the forecast operating profit of this CGU, the goodwill in Austral

of £7.7m has been impaired. The goodwill in Keller Grundlaggning was impaired during the year by £4.5m, and the goodwill in Keller Getec impaired during

the year by £0.3m. For the remaining CGUs, management believes that any reasonable possible change in the key assumptions on which the recoverable

amounts of the CGUs are based would not cause any of their carrying amounts to exceed their recoverable amounts.

A number of sensitivities were run on the projections to identify the changes required in each of the key assumptions that, in isolation, would give rise to

an impairment of the following goodwill balances.

CGU Geographical segment

Increase in

discount rate

Reduction in

future growth rate

Reduction in final

year cash flow

Keller US North America 28.1 48.9 89.4

Suncoast North America 45.1 112.9 101.0

Keller Canada North America 15.1 21.9 74.3

Keller Limited Europe 4.3 5.3 35.7

1 The increase in discount rate and reduction in future growth rate are presented as gross movements.

16 Property, plant and equipment

Property, plant and equipment comprises owned and leased assets.

Note

2022

£m

2021

£m

Property, plant and equipment – owned assets 16a 409.5 375.5

Right-of-use assets – leased assets 16b 77.0 67.9

At 31 December 486.5 443.4

172 Keller Group plc Annual Report and Accounts 2022

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16 a) Property, plant and equipment – owned assets

Land and

buildings

£m

Plant, machinery

and vehicles

£m

Capital work

in progress

£m

Total

£m

Cost

At 1 January 2021 68.9 878.7 7.3 954.9

Additions 3.4 79.3 1.3 84.0

Acquired with businesses 0.7 8.7 – 9.4

Disposals (2.5) (41.4) – (43.9)

Net transfers to held for sale – 1.3 – 1.3

Disposal of businesses – (1.2) (0.5) (1.7)

Reclassification – 2.4 (2.4) –

Exchange movements (1.5) (16.9) (0.2) (18.6)

At 31 December 2021 and 1 January 2022 69.0 910.9 5.5 985.4

Additions 1.9 72.4 7.3 81.6

Acquired with businesses (note 6) – 0.7 – 0.7

Disposals – (34.8) – (34.8)

Net transfers to held for sale

– (1.5) – (1.5)

Reclassification – 2.2 (2.2) –

Exchange movements 5.3 68.2 0.6 74.1

At 31 December 2022 76.2 1,018.1 11.2 1,105.5

Accumulated depreciation and impairment

At 1 January 2021 21.4 568.1 – 589.5

Charge for the year 1.7 62.4 – 64.1

Disposals (0.7) (35.2) – (35.9)

Net transfers to held for sale – 0.9 – 0.9

Disposal of businesses – (0.3) – (0.3)

Impairments – 3.4 – 3.4

Exchange movements (0.5) (11.3) – (11.8)

At 31 December 2021 and 1 January 2022 21.9 588.0 – 609.9

Charge for the year 1.9 69.2 – 71.1

Disposals – (30.1) – (30.1)

Net transfers to held for sale

– (1.2) – (1.2)

Exchange movements 1.6 44.7 – 46.3

At 31 December 2022 25.4 670.6 – 696.0

Carrying amount

At 1 January 2021 47.5 310.6 7.3 365.4

At 31 December 2021 and 1 January 2022 47.1 322.9 5.5 375.5

At 31 December 2022 50.8 347.5 11.2 409.5

1 The carrying amount of assets held for sale at the balance sheet date are detailed in note 22.

The Group had contractual commitments for the acquisition of property, plant and equipment of £17.6m (2021: £7.2m) at the balance sheet date. These

amounts were not included in the balance sheet at the year end.

In 2021, impairments included the write-down of surplus equipment to their value-in-use in the Middle East and Africa; and KGS, the in-house equipment

manufacturer, where it was not relocated to other more active parts of the Group. The carrying amount of these assets was £1.9m, compared to a

value-in-use of £0.3m, which resulted in a non-underlying impairment charge of £1.6m. Details of restructuring are set out in note 9. Also included are

impairments related to assets that are inaccessible due to a contract suspension. The carrying amount of these assets was £1.8m, compared to a value-

in-use of £nil, which resulted in an underlying impairment charge of £1.8m.

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Notes to the consolidated financial statements continued

16 Property, plant and equipment continued

16 b) Right-of-use assets – leased assets

The Group has lease contracts for various items of land and buildings, plant, machinery and vehicles used in its operations. Leases of land and buildings

generally have lease terms between three and 15 years, while plant, machinery and vehicles generally have lease terms between two and eight years. The

Group’s obligations under its leases are secured by the lessor’s title to the lease assets. Generally, the Group is restricted from assigning and sub-leasing

its leased assets. There are several lease contracts that include extension and termination options.

The Group has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the

‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases.

Set out below are the carrying amounts of the right-of-use assets recognised and the movements during the year:

Land and

buildings

£m

Plant, machinery

and vehicles

£m

Total

£m

At 1 January 2021 42.2 27.3 69.5

Additions 11.3 12.1 23.4

Acquired with businesses 0.4 1.0 1.4

Depreciation expense (12.6) (13.9) (26.5)

Impairment expense – (4.4) (4.4)

Contract modifications 1.7 3.1 4.8

Exchange movements (0.1) (0.2) (0.3)

At 31 December 2021 and 1 January 2022 42.9 25.0 67.9

Additions 5.9 18.9 24.8

Acquired with businesses – 2.1 2.1

Depreciation expense (14.1) (15.6) (29.7)

Impairment reversal – 4.2 4.2

Contract modifications 6.0 (4.4) 1.6

Exchange movements 3.4 2.7 6.1

At 31 December 2022 44.1 32.9 77.0

The carrying amounts of lease liabilities (included within note 26 within loans and borrowings) and the movements during the year are set out in note 27.

Impairments in 2021 related to assets that were inaccessible due to a contract suspension in AMEA. The carrying amount of these assets was £4.4m,

compared to a value-in-use of £nil, which resulted in an underlying impairment charge of £4.4m. The impairment was subsequently reversed in the

current year as the assets were transported off site and their value-in-use was reassessed.

17 Investments in joint ventures

The Group’s investment in joint ventures relates to a 50% interest in the ordinary shares of KFS Finland Oy, an entity incorporated in Finland.

2022

£m

At 1 January 2022 4.0

Share of underlying post-tax results 1.5

Share of non-underlying post-tax results (note 9) (1.2)

Exchange movements 0.1

At 31 December 2022 4.4

2021

£m

At 1 January 2021 4.4

Share of underlying post-tax results 0.4

Share of non-underlying post-tax results (note 9) (0.6)

Exchange movements (0.2)

At 31 December 2021 4.0

In 2022, KFS Finland Oy earned total revenue of £20.7m (2021: £36.8m) and a statutory profit after tax for the year of £0.3m (2021: statutory loss after

tax of £0.2m).

The joint venture had no contingent liabilities or commitments as at 31 December 2022 (2021: £nil).

174 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

Aggregate amounts relating to joint ventures:

2022 2021

Underlying

£m

Non-underlying

items (note 9)

£m

Statutory

£m

Underlying

£m

Non-underlying

items (note 9)

£m

Statutory

£m

Revenue 20.7 – 20.7 18.4 – 18.4

Operating costs

(19.2) (1.2) (20.4) (17.9) (0.6) (18.5)

Operating profit/(loss) 1.5 (1.2) 0.3 0.5 (0.6) (0.1)

Finance costs (0.1) – (0.1) (0.1) – (0.1)

Profit/(loss) before taxation 1.4 (1.2) 0.2 0.4 (0.6) (0.2)

Taxation 0.1 – 0.1 – – –

Share of post-tax results 1.5 (1.2) 0.3 0.4 (0.6) (0.2)

1 Included within operating costs is depreciation on owned assets of £1.0m (2021: £0.8m).

KFS Finland Oy (100% of results) Group’s portion of the joint venture

2022

£m

2021

£m

2022

£m

2021

£m

Non-current assets 18.0 20.4 9.0 10.2

Cash and cash equivalents 1.4 1.2 0.7 0.6

Other current assets 4.4 7.8 2.2 3.9

Tot al assets 23.8 29.4 11.9 14.7

Other current liabilities (3.4) (8.4) (1.7) (4.2)

Non-current loans and borrowings (10.8) (11.2) (5.4) (5.6)

Other non-current liabilities (0.8) (1.8) (0.4) (0.9)

Total liabilities (15.0) (21.4) (7.5) (10.7)

Share of net assets 8.8 8.0 4.4 4.0

On 8 September 2021, KFS Finland Oy acquired NordPile, a driven piling contractor, for £7.3m (EUR8.5m). The fair value of the Group’s share of intangibles

acquired was £2.1m (EUR2.4m), representing the fair value of customer contracts at the date of acquisition and customer relationships. Amortisation of

these assets is recognised as a non-underlying item.

18 Other non-current assets

2022

£m

2021

£m

Fair value of derivative financial instruments – 2.6

Non-qualifying deferred compensation plan assets 19.4 20.6

Customer retentions 16.3 24.4

Other assets 1.7 2.1

Insurance receivables 23.4 38.8

60.8 88.5

A non-qualifying deferred compensation plan (NQ) is available to US employees, whereby an element of eligible employee bonuses and salary is deferred

over a period of four to six years. The plan allows participants to receive tax relief for contributions beyond the limits of the tax-free amounts allowed

per the 401k defined contribution pension plan. The plan is administered by a professional investment provider with participants able to select their

investments from an approved listing. An amount equal to each participant’s compensation deferral is transferred into a trust and invested in various

marketable securities. The related trust assets are not identical to investments held on behalf of the employee but are invested in similar funds with the

objective that performance of the assets closely tracks the liabilities. The investments held in the trust are designated solely for the purpose of paying

benefits under the non-qualified deferred compensation plan. The investments in the trust would however be available to all unsecured general creditors

in the event of insolvency.

The value of both the employee investments and those held in trust by the company are measured using Level 1 inputs per IFRS 13 (‘quoted prices in

active markets for identical assets or liabilities that the entity can access at the measurement date’) based on published market prices at the end of the

period. Adjustments to the fair value are recorded within net finance costs in the consolidated income statement.

At 31 December 2022, non-current assets in relation to the investments held in the trust were £19.4m (2021: £20.6m). The fair value movement on

these assets was £3.5m (2021: £2.0m). During the period proceeds from the sale of NQ-related investments were £nil (2021: £nil). At 31 December

2022, non-current liabilities in relation to the participant investments were £14.7m (2021: £15.8m). These are accounted for as financial liabilities at fair

value through profit or loss. The fair value movement on these liabilities was £3.5m (2021: £2.1m). During the year £1.2m (2021: £1.4m) of compensation

was deferred.

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175

Financial statements

Page Title

Notes to the consolidated financial statements continued

19 Inventories

2022

£m

2021

£m

Raw materials and consumables 56.3 40.6

Work in progress 1.9 1.8

Finished goods 66.2 29.7

124.4 72.1

During 2022, £2.0m (2021: £2.4m) of inventory write-downs were recognised as an expense for inventories carried at net realisable value. This is

recognised within operating costs in the consolidated income statement.

20 Trade and other receivables

2022

£m

2021

(Restated)

£m

Trade receivables 615.5 450.7

Contract assets 105.3 99.2

Other receivables 20.7 15.9

Prepayments 23.1 19.6

Insurance receivables – 0.1

764.6 585.5

1 The 31 December 2021 consolidated trade receivables and contract assets have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period

business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Trade receivables and contract assets included in the balance sheet are shown net of expected credit loss provisions as detailed in note 2.

The movement in the allowance for expected credit losses of trade receivables and contract assets is as follows:

2022

£m

2021

£m

At 1 January 53.7 42.9

Used during the year (4.4) (3.1)

Additional provisions 13.8 24.6

Unused amounts reversed (29.5) (11.9)

Acquisition with businesses 0.2 2.4

Exchange movements 2.2 (1.2)

At 31 December 36.0 53.7

176 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

Set out below is information about the credit risk exposure on the Group’s trade receivables and contract assets, detailing past due but not impaired,

based on agreed terms and conditions with the customer:

2022

Contract assets Trade receivables and non-current customer retentions

Total

£m

Current

£m

Days past due

Total

£m

<30 days

£m

31–90 days

£m

>90 days

£m

Expected credit loss rate 1% 1% 0% 0% 43% 5%

Estimated total gross carrying amount at default 106.4 395.9 112.3 91.2 67.3 666.7

Expected credit loss (1.1) (5.3) (0.3) (0.4) (28.9) (34.9)

Carry amount as shown in the balance sheet 105.3 390.6 112.0 90.8 38.4 631.8

2021 (Restated)

Contract assets Trade receivables and non-current customer retentions

Total

£m

Current

£m

Days past due

Total

£m

<30 days

£m

31–90 days

£m

>90 days

£m

Expected credit loss rate 1% 7% 0% 1% 63% 10%

Estimated total gross carrying amount at default 99.9 288.9 125.3 60.0 53.9 528.1

Expected credit loss (0.7) (18.8) (0.1) (0.4) (33.7) (53.0)

Carry amount as shown in the balance sheet 99.2 270.1 125.2 59.6 20.2 475.1

1 The 31 December 2021 consolidated trade receivables and contract assets have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period

business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

21 Cash and cash equivalents

2022

£m

2021

£m

Bank balances 97.0 77.9

Short-term deposits 4.1 4.8

Cash and cash equivalents in the balance sheet 101.1 82.7

Bank overdrafts (6.9) (0.9)

Cash and cash equivalents in the cash flow statement 94.2 81.8

Cash and cash equivalents include £8.5m (2021: £2.7m) of the Group’s share of cash and cash equivalents held by joint operations, and £1.4m (2021:

£1.7m) of restricted cash which is subject to local country restrictions as it is held as collateral in support of bank guarantees.

22 Assets held for sale

2022

£m

2021

£m

Plant and machinery 2.8 3.1

Inventories – 0.3

2.8 3.4

Assets held for sale in 2022 and 2021 mainly comprises equipment in North America of £1.2m (2021: £1.3m), following a rationalisation exercise, and

machinery in the AMEA Division of £1.4m (2021: £1.6m) as a result of the wind-down of the Waterway business.

During the year, £0.9m of the North American assets were disposed of. The Waterway assets remain in assets held for sale as they are currently being

marketed for sale. No new assets have been added to the assets held for sale category during the year .

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177

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Notes to the consolidated financial statements continued

23 Trade and other payables

2022

£m

2021

(Restated)

£m

Trade payables 229.4 268.8

Other taxes and social security payable 21.5 25.2

Other payables 139.4 119.5

Contract liabilities 85.6 46.5

Accruals 109.7 48.0

585.6 508.0

1 The 31 December 2021 consolidated other payables have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Other payables includes contingent and deferred consideration of £0.8m (2021: £12.3m) and contract specific accruals of £117.6m (2021: £78.7m).

24 Provisions

Employee

provisions

£m

Restructuring

provisions

£m

Contract

provisions

£m

Insurance

and legal

provisions

£m

Other

provisions

£m

Total

£m

As at 31 December 2021 9.9 3.5 41.9 72.8 3.6 131.7

Charge for the year 3.6 4.3 38.8 24.1 0.1 70.9

Used during the year (3.2) (3.0) (30.2) (28.9) (1.4) (66.7)

Unused amounts reversed (0.9) (1.0) (16.1) (4.7) (0.3) (23.0)

Unwinding of discount and changes in the discount rate 0.1 – – 0.1 – 0.2

Exchange movements 0.9 0.3 3.4 1.6 0.3 6.5

At 31 December 2022 10.4 4.1 37.8 65.0 2.3 119.6

Current 3.5 3.8 32.4 10.8 2.2 52.7

Non-current 6.9 0.3 5.4 54.2 0.1 66.9

At 31 December 2022 10.4 4.1 37.8 65.0 2.3 119.6

Employee provisions

Employee provisions relate to various liabilities in respect of employee rights and benefits, including the workers’ compensation scheme in North America

and long service leave benefits in Australia.

At 31 December 2022, the provision in respect of workers’ compensation was £7.1m (2021: £6.5m). A provision is recognised when the an employee

informs the company of a workers’ compensation claim. The provision is measured based on information provided by the workers’ compensation

insurer. The actual costs that may be incurred in respect of these claims are dependent on the assessment of an employee’s claim and potential medical

expenses, with timing of outflows variable depending on the claim.

At 31 December 2022, the provision in respect of long service leave was £1.9m (2021: £1.7m). A provision is recognised at the point an employee joins

the company, with an adjustment made to factor the likelihood that the employee will remain in continuous service with the company to meet the

threshold to receive the benefits. It is measured on an IAS 19 basis, at the present value of expected future benefit for services provided by employees

up to the reporting date. The actual costs that may be incurred are dependent on the length of service for employees and amended for any starters and

leavers. The provision is utilised when the leave is taken by the employee or when unused leave is paid on termination of employment.

Employee provisions also includes an amount of £0.8m (2021: £1.4m) in respect of social security contributions on share options. This provision is utilised

as the options are exercised by employees, which occurs when the awards vest.

178 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

Restructuring provisions

A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring, has raised a valid expectation in those

individuals affected and liabilities have been identified. The measurement of a restructuring provision includes only the direct expenditures arising from

the restructuring.

The restructuring provisions in 2022 relate primarily to the relevant activities in the North America and Europe Divisions. The provisions comprise mainly

amounts for redundancy costs. Estimates may differ from the actual charges depending on the finalisation of redundancy amounts. These provisions are

expected to be utilised within the next 12 months.

Contract provisions

Contract provisions include onerous contracts where the forecast costs of completing the contract exceed the revenue. Provision is made in full when

such losses are foreseen, based on the estimated unavoidable costs of meeting the obligations of the contract, where these exceed the economic

benefits expected to be received. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of

the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. The majority of this balance is expected to be utilised in the next

12 months, given the general short-term nature of contracts. The non-current element of the provision relates to longer-term contracts and customer

claims and disputes.

Insurance and legal provisions

Insurance and legal provisions comprises the liability for legal claims against the Group, including those that are retained within the Group’s captive insurer

(the ‘captive’). The captive covers both public liability and professional indemnity claims for the Group. The captive covers liabilities below an upper limit

above which third-party insurance applies.

Provisions for insurance and legal claims are made based on the best estimate of the likely total settlement value of a claim against the Group.

Management seek specialist input from legal advisers and the Group’s insurance claims handler to estimate the most likely legal outcome. The outcome

of legal negotiations is inherently uncertain; as a result, there can be no guarantee that the assumptions used to estimate the provision will result in an

accurate prediction of the actual costs that may be incurred.

A provision is recognised when it is judged likely that a legal claim will result in a payment to the claimant and the amount of the claim can be reliably

estimated. Provisions are utilised as insurance claims are settled, which may take a number of years. A separate insurance receivable is recognised to

the extent that confirmed third-party insurance is expected to cover any element of an estimated claim value and is virtually certain to be recovered.

The asset is recognised within other non-current assets (refer to note 18) and trade and other receivables (refer to note 20). Management considers

that there are no instances of reimbursable assets which are probable in nature.

Other provisions

Other provisions are in respect of property dilapidation arising from lease obligations and other operational provisions. Where a lease includes a

‘make-good’ requirement, provision for the cost is recognised as the obligation is incurred, either at the commencement of the lease or as a

consequence of using the asset, and the cost of the expected work required can be reliably estimated. These are expected to be utilised over the

relevant lease term which ranges from 3 to 15 years across the Group.

25 Other non-current liabilities

2022

£m

2021

£m

Non-qualifying compensation plan liabilities 14.7 15.8

Other liabilities 6.6 5.4

21.3 21.2

Other liabilities include deferred and contingent consideration of £1.1m (2021: contingent consideration of £0.4m) and £5.2m (2021: £4.7m) in respect of

US social security tax deferrals, refer to note 8 for further information.

Refer to note 18 for further information on the non-qualifying deferred compensation plan.

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179

Financial statements

Page Title

Notes to the consolidated financial statements continued

26 Financial instruments

Exposure to credit, interest rate and currency risks arise in the normal course of the Group’s business and have been identified as risks for the Group.

Derivative financial instruments are used to hedge exposure to fluctuations in foreign exchange and interest rates.

The Group does not trade in financial instruments nor does it engage in speculative derivative transactions.

Currency risk

The Group faces currency risk principally on its net assets, most of which are in currencies other than sterling. The Group aims to reduce the impact that

retranslation of these net assets might have on the consolidated balance sheet by matching the currency of its borrowings, where possible, with the

currency of its assets. The majority of the Group’s borrowings are held in sterling, US dollars and Australian dollars.

The Group manages its currency flows to minimise transaction exchange risk. Forward contracts are used to hedge significant individual transactions.

The majority of such currency flows within the Group relate to the repatriation of profits, intra-group loan repayments and any foreign currency cash

flows associated with acquisitions. The Group’s treasury risk management is performed at the Group’s head office.

As at 31 December 2022, the fair value of outstanding foreign exchange forward contracts was £nil (2021: £nil) included in current assets/liabilities.

Interest rate risk

Our objectives are to add stability to the interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we

primarily use external debt and interest rate swaps as part of our interest rate risk management strategy.

Interest rate risk is managed by either fixed or floating rate borrowings dependent upon the purpose and term of the financing.

As at 31 December 2022, approximately 80% (2021: 99%) of the Group’s third-party borrowings were at floating interest rates.

Hedging currency risk and interest rate risk

The Group hedges currency risk and interest rate risk. Where hedging instruments are used to hedge significant individual transactions, the Group

ensures that the critical terms, including dates, currencies, nominal amounts, interest rates and lengths of interest periods, are matched. The Group

uses both qualitative and quantitative methods to confirm this and to assess the effectiveness of the hedge.

Credit risk

The Group’s principal financial assets are trade and other receivables, bank and cash balances and a limited number of investments and derivatives held to

hedge certain Group exposures. These represent the Group’s maximum exposure to credit risk in relation to financial assets.

The Group has procedures to manage counterparty risk and the assessment of customer credit risk is embedded in the contract tendering processes.

The counterparty risk on bank and cash balances is managed by limiting the aggregate amount of exposure to any one institution by reference to their

credit rating and by regular review of these ratings.

Customer credit risk is mitigated by the Group’s relatively small average contract size and diversity, both geographically and in terms of end markets. No

individual customer represented more than 6% of revenue in 2022 (2021: 3%). The ageing of trade receivables that were past due but not impaired is

shown in note 20.

The Group evaluates each new customer and assesses their creditworthiness before any contract is undertaken.

The Group reviews customer receivables (including contract assets) on an ageing basis and provides against expected unrecoverable amounts.

Experience has shown the level of historical provision required to be relatively low. Credit loss provisioning reflects past experience, economic factors and

specific conditions.

The Group’s estimated exposure to credit risk for trade receivables and contract assets is disclosed in note 20. This amount is the accumulation of several

years of provisions for known or expected credit losses.

180 Keller Group plc Annual Report and Accounts 2022

Financial statements

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Liquidity risk and capital management

The Group’s capital structure is kept under constant review, taking into account the need for availability and cost of various sources of funding. The capital

structure of the Group consists of net debt and equity as shown in the consolidated balance sheet. The Group maintains a balance between the certainty

of funding and a flexible, cost-effective financing structure, with all main borrowings being from committed facilities. The Group’s policy ensures that its

capital structure is appropriate to support this balance and the Group’s operations.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,

issue new shares or sell assets to reduce debt. The Group’s debt and committed facilities mainly comprise a $75m private placement repayable in

December 2024 and a £375m syndicated revolving credit facility expiring in November 2025. In November 2022 the Group increased borrowing facilities

by a $115m bilateral term loan facility, expiring November 2024. This facility has not been used to date. These facilities are subject to certain covenants

linked to the Group’s financing structure, specifically regarding the ratios of net debt and interest to profit. The covenants are calculated on an IAS 17

basis, EBITDA to net debt leverage must be below three times and EBITDA interest cover must be above four times. The Group has complied with these

covenants throughout the year.

At the year end, the Group also had other borrowing facilities available of £75.8m (2021: £76.0m), including overdraft facilities, of which £3.2m was

undrawn at 31 December 2022.

Private placements

In October and December 2014, $50m and $75m were raised through a private placement with US institutions. The proceeds of the issue of $50m Series A

notes 3.81% due 2021 and $75m Series B notes 4.17% due 2024 were used to refinance maturing private placements. In October 2021 the $50m private

placement was repaid, in line with the agreed terms. The US private placement notes are accounted for on an amortised cost basis and are retranslated at the

exchange rate at each period end. The carrying value of the $75m private placement liability at 31 December 2022 was £62.0m (2021: £58.1m).

Hedging

The 2014 $50m and $75m fixed rate private placement liabilities were swapped into floating rates by means of US dollar interest rate swaps (the ‘2014

swaps’). In October 2021, the interest rate swap hedging the tranche of the $50m private placement liability repaid in the year was closed out in line with

the agreed terms. The outstanding 2014 swaps hedging the $75m private placement liability that held the same maturity and were designated as fair

value hedges were settled on 18 May 2022 at a net loss of £0.4m, which was reflected within finance costs in the income statement. The swaps were

settled before the maturity of the private placement as a result of the implementation of Group’s interest management strategy.

The fair value of the 2014 swaps at 31 December 2022 was £nil (2021: £2.6m); no amount was included in other non-current assets (2021: £6.2m). The

effective portion of the changes in the fair value of the 2014 swaps was £nil (2021: loss of £3.6m), which has been taken to the income statement along

with the equal and opposite movement in fair value of the corresponding hedged items.

The Group entered into a Treasury lock on 25 August 2022. A Treasury lock is a synthetic forward sale of a US Treasury note, which is settled in cash

based upon the difference between an agreed upon treasury rate and the prevailing treasury rate at settlement. Such Treasury locks are entered into to

effectively fix the treasury component of an upcoming debt issuance. This was in order to hedge the treasury rates on the highly probable launch of a new

US private placement issuance between the date the Treasury lock was entered into and the intended finalisation of the transaction on 28 September

2022. The financing transaction was deferred; therefore, the Treasury lock was settled on maturity. The treasury reference rates increased over the

relevant period, and a net credit was received of £3.6m, which was recognised as finance income in the income statement as a non-underlying item.

All hedges are tested for effectiveness every six months. All hedging relationships remained effective during the year while they were in place. There are

no designated hedging relationships at 31 December 2022. The interest rate hedging relationship in place during 2021 as referred to above remained

effective in 2021.

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Financial statements

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Notes to the consolidated financial statements continued

26 Financial instruments continued

Accounting classifications

2022

£m

2021

(Restated)

£m

Financial assets measured at fair value through profit or loss

Non-qualifying deferred compensation plan 19.4 20.6

Interest rate swaps – 2.6

Financial assets measured at amortised cost

Trade receivables 615.5 450.7

Contract assets 105.3 99.2

Cash and cash equivalents 101.1 82.7

Financial liabilities at fair value through profit or loss

Contingent consideration payable (0.9) (12.7)

Financial liabilities measured at amortised cost

Trade payables (229.4) (268.8)

Contract liabilities (85.6) (46.5)

Bank and other loans (319.0) (200.6)

Lease liabilities (81.0) (75.4)

Deferred consideration payable (1.0) –

1 The 31 December 2021 consolidated trade receivables and contract assets have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period

business combination measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Effective interest rates and maturity analysis

In respect of financial liabilities, the following table indicates their effective interest rates and undiscounted contractual cash flows at the balance sheet date:

2022

Effective

interest rate

Due within

1 year

£m

Due within

1–2 years

£m

Due within

2–5 years

£m

Due after more

than 5 years

£m

Total

£m

Carrying amount

as shown in the

balance sheet

£m

Bank loans and overdrafts 5.0 10.4 0.4 245.7 0.1 256.6 256.4

Other loans 4.2 3.2 64.6 – – 67.8 62.6

Lease liabilities – 28.3 21.4 32.9 7.1 89.7 81.0

Contract liabilities – 85.6 – – – 85.6 85.6

Trade payables – 229.4 – – – 229.4 229.4

Contingent and deferred

consideration – 0.8 1.1 – – 1.9 1.9

357.7 87.5 278.6 7. 2 731.0 716.9

2021

Effective

interest rate

Due within

1 year

£m

Due within

1–2 years

£m

Due within

2–5 years

£m

Due after more

than 5 years

£m

Total

£m

Carrying amount

as shown in the

balance sheet

£m

Bank loans and overdrafts 1.0 1.5 0.4 139.3 0.1 141.3 141.8

Bonds and other loans 1.6 3.6 2.3 57.8 – 63.7 58.8

Lease liabilities – 30.3 17.4 27.3 7.6 82.6 75.4

Contract liabilities – 46.5 – – – 46.5 46.5

Trade payables – 268.8 – – – 268.8 268.8

Contingent consideration – 12.3 0.4 – – 12.7 12.7

363.0 20.5 224.4 7.7 615.6 604.0

182 Keller Group plc Annual Report and Accounts 2022

Financial statements

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Loans and borrowings analysis

2022

£m

2021

£m

$75m private placement (due December 2024) 62.0 58.1

£375m syndicated revolving credit facility (expiring November 2025) 248.1 138.5

Bank overdrafts 6.9 0.9

Other bank borrowings 1.4 2.4

Other loans 0.6 0.7

Lease liabilities (note 27) 81.0 75.4

Total loans and borrowings 400.0 276.0

The Group has substantial borrowing facilities available to it. The undrawn committed facilities available at 31 December 2022 amounted to £227.6m

(2021: £235.5m). This mainly comprised the unutilised portion of the Group’s £375m revolving credit facility, which expires on 23 November 2025. In

addition, the Group had undrawn uncommitted borrowing facilities totalling £46.1m at 31 December 2022 (2021: £56.4m). Other uncommitted bank

borrowing facilities are normally reaffirmed by the banks annually, although they can theoretically be withdrawn at any time. Facilities totalling £1.5m

(2021: £3.2m) are secured against certain assets. Future obligations under finance leases on a former IAS 17 basis totalled £0.9m (2021: £1.5m), including

interest of £0.1m (2021: £0.1m).

Changes in loans and borrowings were as follows:

2021

£m

Cash flows

£m

Other

£m

New leases

£m

Acquisition of

businesses

£m

Foreign

exchange

movements

£m

Fair value

changes

£m

2022

£m

Bank overdrafts (0.9) (5.9) – – – (0.1) – (6.9)

Bank loans (140.9) (98.2) (0.5) – (0.1) (9.8) – (249.5)

Other loans (58.8) 0.3 – – – (6.5) 2.4 (62.6)

Lease liabilities (note 27) (75.4) 33.1 (5.2) (24.8) (2.1) (6.6) – (81.0)

Total loans and borrowings (276.0) (70.7) (5.7) (24.8) (2.2) (23.0) 2.4 (400.0)

Derivative financial instruments 2.6 (0.2) – – – – (2.4) –

1 Other comprises disposals and contract modifications and interest accretion on lease liabilities. and the amortisation of deferred financing costs on bank loans.

The Group has managed the transition to alternative benchmark rates that are linked to existing interest rate benchmarks related to borrowings, leases

and derivative contracts. The impact of IBOR reform on the Group was limited. The changes only applied to one hedge relationship associated with

managing the fixed rate on the US private placement expiring in December 2024 (refer to note 25) which was closed out in May 2022. In 2021, the Group

amended and restated the £375m syndicated revolving credit facility to replace any reference to IBOR with reference to applicable risk-free rates. There is

no impact on the incremental borrowing rate for calculating leases liabilities.

Cash flow hedges

At 31 December 2022, the Group held no instruments to hedge exposures to changes in foreign currency rates (2021: £nil). At 31 December 2021,

the Group’s net value of instruments held to hedge exposures to changes in foreign currency rates was £nil (2021: £nil).

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Notes to the consolidated financial statements continued

26 Financial instruments continued

Fair value hedges

The Group held the following instruments to hedge exposures to changes in interest rates:

2022

Maturity Carrying amount Change in fair

value used for

calculating hedge

ineffectiveness

£m

Nominal

amount

<1 year

£m

1–2 years

£m

2–5 years

£m

>5 years

£m

Asset

£m

Liability

£m

Interest rate swaps – – – – – – – –

2021

Maturity Carrying amount Change in fair

value used for

calculating hedge

ineffectiveness

£m

Nominal

amount

<1 year

£m

1–2 years

£m

2–5 years

£m

>5 years

£m

Asset

£m

Liability

£m

Interest rate swaps – – 2.6 – 2.6 – – 9.4

1 Included within other assets.

2 The average fixed interest rate is 4.2%.

The Group had the following hedged items relating to the above instruments:

2022 2021

Carrying

amount

liability

£m

Change in fair

value used for

calculating hedge

ineffectiveness

£m

Hedge

ineffectiveness

in profit or loss

£m

Carrying

amount

liability

£m

Change in fair

value used for

calculating hedge

ineffectiveness

£m

Hedge

ineffectiveness

in profit or loss

£m

$75m private placements – – – (58.1) – –

Fair value hedge adjustments – – – 3.6 – –

1 Included within loans and borrowings.

2 Included in operating profit for the year.

Non-interest-bearing financial liabilities comprise trade payables and contract liabilities of £315.8m (2021: £315.3m), payable within one year .

Fair values

The fair values of the Group’s financial assets and liabilities are not materially different from their carrying values. The following summarises the major

methods and assumptions used in estimating the fair values of financial instruments; being derivatives, interest-bearing loans and borrowings, contingent

and deferred consideration and payables, receivables and contract assets, cash and cash equivalents.

Derivatives

The fair values of interest rate and cross-currency swaps are calculated based on expected future principal and interest cash flows, discounted using

market rates prevailing at the balance sheet date. The valuation methods of all of the Group’s derivative financial instruments carried at fair value are

categorised as Level 2. Level 2 assets are financial assets and liabilities that do not have regular market pricing, but whose fair value can be determined

based on other data values or market prices. During the period, the interest rate swaps on the $75m private placement were terminated.

184 Keller Group plc Annual Report and Accounts 2022

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Interest-bearing loans and borrowings

Fair value is calculated based on expected future principal and interest cash flows discounted using appropriate discount rates prevailing at the balance

sheet date.

Contingent and deferred consideration

Fair value is calculated based on the amounts expected to be paid, determined by reference to forecasts of future performance of the acquired

businesses, discounted using appropriate discount rates prevailing at the balance sheet date and the probability of contingent events and targets

being achieved.

The valuation methods of the Group’s contingent consideration carried at fair value are categorised as Level 3. Level 3 assets are financial assets and

liabilities that are considered to be the most illiquid. Their values have been estimated using available management information, including subjective

assumptions. The one individually significant unobservable input used in the fair value measurement of the Group’s contingent consideration as at

31 December 2022 is the estimation of future profits at GKM in order to determine the expected outcome of the earnout arrangement.

The following table shows a reconciliation from the opening to closing balances for contingent and deferred consideration:

2022

£m

2021

£m

At 1 January 12.7 3.0

Acquisition of businesses (note 6) 1.7 8.8

Additional amounts provided (note 9) 0.1 1.3

Paid during the period (12.3) (0.4)

Fair value in the income statement during the period (note 9) (0.7) (0.1)

Exchange movements 0.4 0.1

At 31 December 1.9 12.7

On 1 May 2022, the Group acquired GKM Consultants Inc. Contingent consideration is payable dependent on the cumulative EBITDA in the three-year

period post acquisition. The fair value of the contingent consideration was recognised at the date of acquisition at £1.2m, but has been subsequently

reduced following movements in its fair value to £0.8m at 31 December 2022. On 15 November 2022, the Group acquired Nordwest Fundamentering AS,

and the deferred contingent consideration payable relating to this acquisition is £0.5m.

Additional contingent consideration provided of £0.1m relates to the acquisition of the Geo Instruments US business in 2017.

Total contingent and deferred consideration of £12.3m was paid during the period, comprising £8.1m in respect of the RECON Services Inc. acquisition in

2021 and £3.8m in respect of the Geo Construction Group (Bencor) acquisition in 2015. These both represent final agreements. Additionally, £0.2m was

paid in respect of the Geo Instruments acquisition and £0.2m deferred consideration in respect of the Voges Drilling acquisition in 2021.

Fair value movements during the period of £0.7m relate to a fair value adjustment of the RECON contingent consideration on finalisation of the amount

payable (£0.3m) and the reduction in the GKM payable noted above (£0.4m).

Payables, receivables and contract assets

For payables, receivables and contract assets with an expected maturity of one year or less, the carrying amount is deemed to reflect the fair value.

Non-qualifying deferred compensation plan assets and liabilities

The value of both the employee investments and those held in trust by the company are measured using Level 1 inputs per IFRS 13 (‘quoted prices in

active markets for identical assets or liabilities that the entity can access at the measurement date’) based on published market prices at the end of the

period. Adjustments to the fair value of the assets and related liabilities are recorded within net finance costs in the consolidated income statement.

Refer to note 18 for further information on the non-qualifying deferred compensation plan.

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Notes to the consolidated financial statements continued

26 Financial instruments continued

Interest rate and currency profile

The profile of the Group’s financial assets and financial liabilities after taking account of the impact of hedging instruments was as follows:

2022

GBP USD EUR CAD AUD Other Total

Weighted average fixed debt interest rate (%) – 4.2 1.4 – – 3.5 –

Weighted average fixed debt period (years) – 2.0 3.2 – – 0.1 –

£m £m £m £m £m £m £m

Fixed rate financial liabilities – (62.0) (1.4) – – (0.6) (64.0)

Floating rate financial liabilities (75.3) (153.8) (0.2) – 25.6 (0.1) (255.0)

Lease liabilities (2.9) (48.4) (10.4) (4.4) (4.6) (10.3) (81.0)

Financial assets 7.1 4.4 14.9 4.7 11.6 58.4 101.1

Net debt (71.1) (259.8) 2.9 0.3 (18.6) 47.4 (298.9)

2021

GBP USD EUR CAD Other

Total

Weighted average fixed debt interest rate (%) – – 1.5 – 6.1 –

Weighted average fixed debt period (years) – – 4.1 – 0.3 –

£m £m £m £m £m £m

Fixed rate financial liabilities – – (1.7) – (1.3) (3.0)

Floating rate financial liabilities (63.3) (111.8) (0.1) – (22.4) (197.6)

Lease liabilities (3.5) (45.1) (12.7) (3.2) (10.9) (75.4)

Financial assets 4.3 14.7 6.9 8.4 48.4 82.7

Net debt (62.5) (142.2) (7.6) 5.2 13.8 (193.3)

1 Included within other floating rate financial liabilities are AUD revolver loans of £21.5m. Included within other financial assets are AUD cash balances of £4.1m.

Sensitivity analysis

At 31 December 2022, it is estimated that a general movement of one percentage point in interest rates would increase or decrease the Group’s profit

before taxation by approximately £1.5m (2021: £1.2m).

It is estimated that a general increase of 10 percentage points in the value of sterling against other principal foreign currencies would have decreased

the Group’s profit before taxation and non-underlying items by approximately £8.8m for the year ended 31 December 2022 (2021: £5.0m). The

estimated impact of a 10 percentage point decrease in the value of sterling is an increase of £7.2m (2021: £6.1m) in the Group’s profit before taxation

and non-underlying items. This sensitivity relates to the impact of retranslation of foreign earnings only. The impact on the Group’s earnings of currency

transaction exchange risk is not significant. These sensitivities assume all other factors remain constant.

27 Lease liabilities

Set out below are the carrying amounts of lease liabilities (included within note 26 within loans and borrowings) and the movements during the year:

2022

£m

2021

£m

At 1 January 75.4 73.8

Additions 24.8 24.8

Acquired with businesses 2.1 –

Contract modifications 1.6 4.0

Interest expense 3.6 3.1

Payments (33.1) (29.8)

Exchange movements 6.6 (0.5)

At 31 December 81.0 75.4

Current 24.5 27.5

Non-current 56.5 47.9

186 Keller Group plc Annual Report and Accounts 2022

Financial statements

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28 Share capital and reserves

2022

£m

2021

£m

Allotted, called up and fully paid equity share capital:

73,099,735 ordinary shares of 10p each (2021: 73,099,735) 7.3 7.3

The company has one class of ordinary shares, which carries no rights to fixed income. There are no restrictions on the transfer of these shares.

The capital redemption reserve of £7.6m is a non-distributable reserve created when the company’s shares were redeemed or purchased other than

from the proceeds of a fresh issue of shares.

The other reserve of £56.9m is a non-distributable reserve created when merger relief was applied to an issue of shares under section 612 of the

Companies Act 2006 to part-fund the acquisition of Keller Canada. The reserve becomes distributable should Keller Canada be disposed of.

As at 31 December 2022, the total number of shares held in treasury was 328,954 (2021: 777,917).

During the year to 31 December 2022, 135,050 ordinary shares were purchased by the Keller Group Employee Benefit Trust (2021: 417,240), to be

used to satisfy future obligations of the company under the Keller Group plc Long-Term Incentive Plan. This brings the total ordinary shares held by the

Employee Benefit Trust to 552,290 (2021: 417,240). The cost of the market purchases was £1.2m (2021: £3.7m).

There is a dividend waiver in place for both shares held in treasury and by the Keller Group Employee Benefit Trust.

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 Board and Executive Committee, who are the key management personnel, comprised:

2022

£m

2021

£m

Short-term employee benefits 4.5 8.2

Post-employment benefits 0.3 0.3

Termination payments 0.4 0.4

5.2 8.9

Other related party transactions

As at 31 December 2022, there was a net balance of £0.1m owed by (2021: £0.1m owed by) the joint venture. These amounts are unsecured, have no

fixed date of repayment and are repayable on demand.

30 Commitments

Capital commitments

Capital expenditure contracted for at the end of the reporting period but not yet incurred was £17.6m (2021: £7.2m) and relates to property, plant and

equipment purchases.

31 Guarantees, contingent liabilities and contingent assets

Claims and disputes arise, both in the normal course of business and in relation to the historic construction activities of the Group, some of which lead to

litigation or arbitration procedures. Such claims are predominantly covered by the Group’s insurance arrangements. The Group recognises provisions for

liabilities when it is more likely than not that a settlement will be required and the value of such a payment can be reliably estimated.

At 31 December 2022, the Group had outstanding standby letters of credit and surety bonds for the Group’s captive insurance arrangements totalling

£28.1m (2021: £26.5m). The Group enters into performance and advance payment bonds and other undertakings in the ordinary course of business,

using guarantee facilities with financial institutions to provide these bonds to customers. At 31 December 2022, the Group has £190.6m outstanding

related to performance and advanced payment bonds (2021: £138.3m). These are treated as a contingent liability until such time it becomes probable

that payment will be required under the individual terms of each arrangement. It is judged to be a remote possibility that a payment will be required under

any of the current performance or advance payment bonds.

At 31 December 2022, the Group had no contingent assets (2021: £nil).

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Notes to the consolidated financial statements continued

32 Share-based payments

The Group operates a Long-Term Incentive Plan (the ‘Plan’). Under the Plan, Executive Directors and certain members of senior management are granted

nil-cost share options with a vesting period of three years. The awards are exercised automatically on vesting with the exception of Executive Directors

who are subject to a two-year post-vesting holding period.

Performance share awards are granted to Executive Directors and key management personnel which are subject to performance conditions including

total shareholder return, earnings per share, return on capital employed and operating profit margin. Conditional awards are granted under which senior

management receive shares subject only to service conditions, ie the requirement for participants to remain in employment with the Group over the

vesting period. Participants are entitled to receive dividend equivalents on these awards.

Outstanding awards are as follows:

Number

Outstanding at 1 January 2021 2,063,410

Granted during 2021 805,367

Lapsed during 2021 (782,525)

Exercised during 2021 (111,816)

Outstanding at 31 December 2021 and 1 January 2022 1,974,436

Granted during 2022 817,381

Lapsed during 2022 (365,677)

Exercised during 2022 (448,963)

Outstanding at 31 December 2022 1,977,177

Exercisable at 1 January 2021 –

Exercisable at 31 December 2021 and 1 January 2022 –

Exercisable at 31 December 2022 –

The average share price during the year was 759.3p (2021: 865.1p).

Under IFRS 2, the fair value of services received in return for share awards granted is measured by reference to the fair value of share options granted. The

estimate of the fair value of share awards granted is measured based on a stochastic model. The contractual life of the award is used as an input into this

model, with expectations of early exercise being incorporated into the model.

The inputs into the stochastic model are as follows:

2022 2021

Share price at grant 800.0p 856.0p

Weighted average exercise price 0.0p 0.0p

Expected volatility 41.2% 47.3%

Expected life 3 years 3 years

Risk-free rate 1.35% 0.14%

Expected dividend yield 0.00% 0.00%

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three years, adjusted for any

expected changes to future volatility due to publicly available information.

The Group recognised total expenses (included in operating costs) of £2.9m (2021: £3.9m) related to equity-settled, share-based payment transactions.

The weighted average fair value of options granted in the year was 724.2p (2021: 827.6p). Options outstanding at the year-end have a weighted average

remaining contractual life of 1.2 years (2021: 1.1 years).

The awards, which are taken as shares, are intended to be satisfied from shares held under the Keller Group Employee Benefit Trust (the ‘Trust’) or from

treasury shares held. The shares held by the Trust are accounted for as a deduction from equity in retained earnings. At 31 December 2022, 552,290

(2021: 417,240) ordinary shares were held by the Trust with a value of £4.9m (2021: £3.7m).

188 Keller Group plc Annual Report and Accounts 2022

Financial statements

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33 Retirement benefit liabilities

The Group operates pension schemes in the UK and overseas.

In the UK, the Group operates the Keller Group Pension Scheme (the ‘Scheme’), a defined benefit scheme, which has been closed to new members since

1999 and was closed to all future benefit accrual with effect from 31 March 2006. Under the Scheme, employees are normally entitled to retirement

benefits on attainment of a retirement age of 65. The Scheme is subject to UK pensions legislation which, inter alia, provides for the regulation of

work-based pension schemes by The Pensions Regulator. The trustees are aware of and adhere to the Codes of Practice issued by The Pensions

Regulator. The Scheme trustees currently comprise one member-nominated trustee and two employer-nominated trustees. An employer-nominated

trustee is also the Chair of the trustees. The Scheme exposes the Group to actuarial risks, such as longevity risk, interest rate risk and market

(investment) risk, which are managed through the investment strategy to acceptable levels established by the trustees. The Scheme can invest in a wide

range of asset classes including equities, bonds, cash, property, alternatives (including private equity, commodities, hedge funds, infrastructure, currency,

high yield debt and derivatives) and annuity policies. Any investment in derivative instruments is only made to contribute to a reduction in the overall level

of risk in the portfolio or for the purposes of efficient portfolio management. With effect from the most recent actuarial valuation date (5 April 2020), the

Group has agreed to pay annual contributions of £2.7m, to increase by 3.6% per annum, until 5 August 2024, subject to a review of the level of employer

contributions at the next actuarial review in 2023.

Between 1990 and 1997, the Scheme members accrued a Guaranteed Minimum Pension (GMP). This amount differed between men and women in

accordance with the rules which were applicable at that time. On 26 October 2018, there was a court judgement (in the case of Lloyds Banking Group

Pensions Trustees Limited v Lloyds Bank PLC) that confirmed that GMP is to be made equal for men and women. In 2018, the estimated increase in the

Scheme’s liabilities was £1.3m, which was recognised as a past service cost in 2018 as a charge to non-underlying items. On 20 November 2020, there

was an updated judgement requiring an allowance to be made for past transfers. The estimated increase in the Scheme’s liability in respect of this is less

than £0.1m. These estimates remain appropriate for 2022. The actual cost may differ when the GMP equalisation exercise is complete.

The Group has two UK defined contribution retirement benefit schemes. There were no contributions outstanding in respect of these schemes at

31 December 2022 (2021: £nil). The total UK defined contribution pension charge for the year was £1.6m (2021: £1.4m).

The Group has defined benefit retirement obligations in Germany and Austria. Under these schemes, employees are entitled to retirement benefits on

attainment of a retirement age of 65, provided they have either five or ten years of employment with the Group, depending on the area or field they are

working in. The amount of benefit payable depends on the grade of the employee and the number of years of service. Benefits under these schemes only

apply to employees who joined the Group prior to 1997. These defined benefit retirement obligations are funded on the Group’s balance sheet and

obligations are met as and when required by the Group.

The Group has a number of end of service schemes in the Middle East as required by local laws and regulations. The amount of benefit payable depends

on the current salary of the employee and the number of years of service. These retirement obligations are funded on the Group’s balance sheet and

obligations are met as and when required by the Group.

The Group operates a defined contribution scheme for employees in North America, where the Group is required to match employee contributions up to

a certain level in accordance with the scheme rules. The total North America pension charge for the year was £14.6m (2021: £6.4m).

In Australia, there is a defined contribution scheme where the Group is required to ensure that a prescribed level of superannuation support of an

employee’s notional base earnings is made. This prescribed level of support is currently 10.5% (2021: 10.0%). The total Australian pension charge for the

year was £4.6m (2021: £3.8m).

Details of the Group’s defined benefit schemes are as follows:

The Keller

Group Pension

Scheme (UK)

2022

£m

The Keller

Group Pension

Scheme (UK)

2021

£m

German

Austrian and

other schemes

2022

£m

German

Austrian and

other schemes

2021

£m

Present value of the scheme liabilities (39.0) (58.3) (16.7) (18.9)

Fair value of assets 42.2 63.7 – –

Surplus/(deficit) in the scheme 3.2 5.4 (16.7) (18.9)

Irrecoverable surplus (7.3) (12.2) – –

Net defined benefit liability (4.1) (6.8) (16.7) (18.9)

1 Included in this balance is £3.5m (2021: £3.0m) in relation to the end of service schemes in the Middle East.

For the Keller Group Pension Scheme, based on the net deficit of the Scheme as at 31 December 2022 and the committed payments under the Schedule

of Contributions agreed on 17 November 2020, there is a irrecoverable surplus of £7.3m (2021: £12.2m). Management is of the view that, based on the

Scheme rules, it does not have an unconditional right to a refund of a surplus under IFRIC 14, and therefore an additional balance sheet liability in respect

of a ‘minimum funding requirement’ has been recognised. The minimum funding requirement is calculated using the agreed contributions of £2.7m a year

with effect from 1 January 2021, increasing by 3.6% per annum on 1 January going forward to 5 August 2024. The contributions will be reviewed following

the next actuarial review to be prepared as at 5 April 2023.

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189

Financial statements

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Notes to the consolidated financial statements continued

33 Retirement benefit liabilities continued

The value of the scheme liabilities has been determined by the actuary using the following assumptions:

The Keller

Group Pension

Scheme (UK)

2022

The Keller

Group Pension

Scheme (UK)

2021

German and

Austrian

schemes

2022

German and

Austrian

schemes

2021

Discount rate 4.8 2.0 3.5 0.8

Interest on assets 4.8 2.0 – –

Rate of increase in pensions in payment 3.4 3.5 2.5 2.0

Rate of increase in pensions in deferment 2.7 2.9 8.3 3.2

Rate of inflation 3.3 3.5 8.3 3.2

The mortality rate assumptions are based on published statistics. The average remaining life expectancy, in years, of a pensioner retiring at the age of 65

at the balance sheet date is:

The Keller

Group Pension

Scheme (UK)

2022

The Keller

Group Pension

Scheme (UK)

2021

German and

Austrian

schemes

2022

German and

Austrian

schemes

2021

Male currently aged 65 21.0 21.0 19.9 19.5

Female currently aged 65 23.4 23.3 23.3 22.8

The assets of the schemes were as follows:

The Keller

Group Pension

Scheme (UK)

2022

£m

The Keller

Group Pension

Scheme (UK)

2021

£m

German,

Austrian and

other schemes

2022

£m

German,

Austrian and

other schemes

2021

£m

Equities 7.8 16.8 – –

Target return funds

5.0 8.1 – –

Gilts – – – –

Bonds 13.6 19.7 – –

Liability driven investing (LDI) portfolios

12.9 15.9 – –

Cash 2.9 3.2 – –

42.2 63.7 – –

1 A diversified growth fund split between mainly UK listed equities, bonds and alternative investments which are capped at 20% of the total fund.

2 A portfolio of gilt and swap contracts, backed by investment-grade credit instruments, that is designed to hedge the majority of the interest rate and inflation risks associated with the Schemes’ obligations.

190 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

The Keller

Group Pension

Scheme (UK)

2022

£m

The Keller

Group Pension

Scheme (UK)

2021

£m

German

Austrian and

other schemes

2022

£m

German

Austrian and

other schemes

2021

£m

Changes in scheme liabilities

Opening balance (58.3) (65.0) (18.9) (21.9)

Current service cost – – (0.8) (0.6)

Interest cost (1.1) (0.8) – (0.1)

Benefits paid 2.1 2.1 1.0 1.5

Exchange movements – – (0.8) 1.0

Experience loss on defined benefit obligation (0.5) – – –

Changes to demographic assumptions – (0.6) – –

Changes to financial assumptions 18.8 6.0 2.8 1.2

Closing balance (39.0) (58.3) (16.7) (18.9)

Changes in scheme assets

Opening balance 63.7 58.0 – –

Interest on assets 1.2 0.7 – –

Administration costs (0.2) (0.2) – –

Employer contributions 2.8 2.7 – –

Benefits paid (2.1) (2.1) – –

Return on plan assets less interest (23.2) 4.6 – –

Closing balance 42.2 63.7 – –

Actual return on scheme assets (22.0) 5.3 – –

Statement of comprehensive income

Return on plan assets less interest (23.2) 4.6 – –

Experience gain on defined benefit obligation (0.5) – – –

Changes to demographic assumptions – (0.6) – –

Changes to financial assumptions 18.8 6.0 2.8 1.2

Change in irrecoverable surplus 4.9 (10.0) – –

Remeasurements of defined benefit plans – – 2.8 1.2

Cumulative remeasurements of defined benefit plans (25.6) (25.6) (6.4) (9.2)

Expense recognised in the income statement

Current service cost – – 0.8 0.6

Administration costs 0.2 0.2 – –

Operating costs 0.2 0.2 0.8 0.6

Net pension interest cost (0.1) 0.1 – 0.1

Expense recognised in the income statement 0.1 0.3 0.8 0.7

Movements in the balance sheet liability

Net liability at start of year 6.8 9.2 18.9 21.9

Expense recognised in the income statement 0.1 0.3 0.8 0.7

Employer contributions (2.8) (2.7) – –

Benefits paid – – (1.0) (1.5)

Exchange movements – – 0.8 (1.0)

Remeasurements of defined benefit plans – – (2.8) (1.2)

Net liability at end of year 4.1 6.8 16.7 18.9

1 Other comprises end of service schemes in the Middle East of £3.5m (2021: £3.0m).

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Financial statements

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Notes to the consolidated financial statements continued

33 Retirement benefit liabilities continued

A reduction in the discount rate of 0.5% would increase the deficit in the schemes by £2.5m (2021: reduction in the discount rate of 0.1% would increase

the deficit in the scheme by £1.1m), whilst a reduction in the inflation assumption of 0.5%, including its impact on the revaluation in deferment and

pension increases in payment, would decrease the deficit by £1.3m (2021: reduction in the inflation assumption of 0.1% would decrease the deficit by

£0.7m). A decrease in the mortality rate by one year would decrease the deficit in the schemes by £1.8m. Note that these sensitivities do not include end

of service schemes in the Middle East as these are not material to the Group.

The weighted average duration of the defined benefit obligation is approximately 13 years for the UK scheme and 12 years for the German and Austrian

schemes. The history of experience adjustments on scheme assets and liabilities for all the Group’s defined benefit pension schemes, including the end

of service schemes in the Middle East, are as follows:

2022

£m

2021

£m

2020

£m

2019

£m

2018

£m

Present value of defined benefit obligation (55.7) (77.2) (86.9) (81.1) (71.7)

Fair value of scheme assets 42.2 63.7 58.0 52.2 45.2

Deficit in the schemes (13.5) (13.5) (28.9) (28.9) (26.5)

Irrecoverable surplus (7. 3) (12.2) (2.2) (1.8) (1.4)

Net defined benefit liability (20.8) (25.7) (31.1) (30.7) (27.9)

Experience adjustments on scheme liabilities 21.1 6.6 (7.9) (8.2) 3.7

Experience adjustments on scheme assets (23.2) 4.6 6.1 5.4 (1.5)

34 Non-controlling interests

Financial information of subsidiaries that have a material non-controlling interest is provided below:

Name Country of incorporation 2022 2021

Keller Fondations Speciales SPA Algeria 49% 49%

Keller Turki Company Limited Saudi Arabia 35% 35%

Loss attributable to non-controlling interests:

2022

£m

2021

£m

Keller Fondations Speciales SPA (0.5) (0.5)

Keller Turki Company Limited (0.3) (0.3)

Other interests (0.2) (0.1)

(1.0) (0.9)

Share of net assets of non-controlling interests:

2022

£m

2021

£m

Keller Fondations Speciales SPA 2.7 2.9

Keller Turki Company Limited (0.6) (0.3)

Other interests 0.2 0.2

2.3 2.8

192 Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

Aggregate amounts relating to material non-controlling interests:

2022

£m

2021

£m

Keller

Fondations

Speciales SPA

Keller Turki

Company

Limited

Keller

Fondations

Speciales SPA

Keller Turki

Company

Limited

Revenue 0.1 4.6 0.9 4.2

Operating costs (0.6) (4.9) (1.2) (4.5)

Operating loss (0.5) (0.3) (0.3) (0.3)

Finance costs – – – –

Loss before taxation (0.5) (0.3) (0.3) (0.3)

Taxation – – (0.2) –

Loss attributable to non-controlling interests (0.5) (0.3) (0.5) (0.3)

2022

£m

2021

£m

Keller

Fondations

Speciales SPA

Keller Turki

Company

Limited

Keller

Fondations

Speciales SPA

Keller Turki

Company

Limited

Non-current assets 0.8 0.7 0.9 0.7

Current assets 2.8 6.0 2.8 2.4

Current liabilities (0.9) (6.2) (0.8) (2.8)

Non-current liabilities – (1.1) – (0.6)

Share of net assets/(liabilities) 2.7 (0.6) 2.9 (0.3)

35 Post balance sheet events

There were no material post balance sheet events between the balance sheet date and the date of this report.

Strategic report Governance Financial statements

193

Financial statements

Page Title

Company balance sheet

As at 31 December 2022

Note

2022

£m

2021

£m

Assets

Investments 2 513.9 513.9

Deferred tax assets 0.5 0.3

Other assets 3 0.2 2.8

Non-current assets 514.6 517.0

Amounts owed by subsidiary undertakings:

– Amounts falling due within one year 6.1 0.2

– Amounts falling due after one year 62.0 55.6

Current tax assets 4.3 3.6

Trade and other debtors 4 4.6 0.8

Cash and bank balances 4.1 10.9

Current assets 81.1 71.1

Liabilities

Trade and other creditors 5 (16.7) (10.5)

Amounts owed to subsidiary undertakings (1.4) (0.4)

Creditors: amounts falling due within one year (18.1) (10.9)

Net current assets 63.0 60.2

Total assets less current liabilities 577.6 577.2

Bank and other loans (60.7) (56.4)

Amounts owed to subsidiary undertakings (46.8) (44.2)

Other creditors 6 – (6.2)

Pension liabilities 8 (1.3) (0.8)

Creditors: amounts falling due after one year (108.8) (107.6)

Net assets 468.8 469.6

Capital and reserves

Called up share capital 7.3 7.3

Share premium account 38.1 38.1

Capital redemption reserve 7.6 7.6

Other reserve 56.9 56.9

Retained earnings 358.9 359.7

Shareholders’ funds 468.8 469.6

The company’s profit for the year was £23.5m (2021: £12.9m).

These financial statements were approved by the Board of Directors and authorised for issue on 10 March 2023.

They were signed on its behalf by:

Michael Speakman David Burke

Chief Executive Officer Chief Financial Officer

194 Keller Group plc Annual Report and Accounts 2022

Financial statements

Company balance sheet

capital

£m

premium

account

£m

Capital

redemption

reserve

£m

Other

reserve

£m

Hedging

reserve

£m

Retained

earnings

£m

Total

equity

£m

At 1 January 2021 7.3 38.1 7.6 56.9 – 372.5 482.4

Profit for the year – – – – – 12.9 12.9

Remeasurement of defined benefit pension schemes – – – – – – –

Total comprehensive income for the year – – – – – 12.9 12.9

Dividends – – – – – (25.9) (25.9)

Purchase of own shares for ESOP trust – – – – – (3.7) (3.7)

Share-based payments – – – – – 3.9 3.9

At 31 December 2021 and 1 January 2022 7.3 38.1 7.6 56.9 – 359.7 469.6

Profit for the year – – – – – 23.5 23.5

Remeasurement of defined benefit pension schemes – – – – – – –

Total comprehensive income for the year – – – – – 23.5 23.5

Dividends – – – – – (26.4) (26.4)

Purchase of own shares for ESOP trust – – – – – (1.2) (1.2)

Share-based payments – – – – – 3.3 3.3

At 31 December 2022 7.3 38.1 7.6 56.9 – 358.9 468.8

Details of the capital redemption reserve and the other reserve are included in note 28 of the consolidated financial statements.

Details of the shares held by the Keller Group Employee Benefit Trust and the share-based payment scheme are included in note 32 to the consolidated

financial statements.

Of the retained earnings, an amount of £236.8m (2021: £236.8m) attributable to profits arising on an intra-group reorganisation is not distributable.

Company statement of changes in equity

For the year ended 31 December 2022

Strategic report Governance Financial statements

195

Financial statements

Company statement of changes

in equity

Notes to the company financial statements

1 Principal accounting policies

Basis of preparation

The separate financial statements of the company are presented as required by the Companies Act 2006 (the ‘Act’). The company meets the definition of

a qualifying entity under FRS 100 (‘Financial Reporting Standard 100’) issued by the Financial Reporting Council and reports under FRS 101.

Except as noted below, the company’s accounting policies are consistent with those described in the consolidated financial statements of Keller Group

plc. As permitted by FRS 101, the company has taken advantage of the disclosure exemptions available under that standard in relation to share-based

payments, financial instruments, capital management, presentation of a cash flow statement, related party transactions and comparative information.

Where required, equivalent disclosures are given in the consolidated financial statements. In addition, disclosures in relation to share capital (note 28) and

dividends (note 13) have not been repeated here as there are no differences to those provided in the consolidated financial statements.

These company financial statements have been prepared on the going concern basis and under the historical cost convention. The financial statements

are presented in pounds sterling, which is the company’s functional currency, and all values are rounded to the nearest hundred thousand, expressed in

millions to one decimal point, except when otherwise indicated.

Profit of the parent company

The company has taken advantage of section 408 of the Act and consequently the statement of comprehensive income (including the profit and loss

account) of the parent company is not presented as part of these accounts. The profit after tax of the parent company for the financial year amounted to

£23.5m (2021: £12.9m).

Amounts owed by subsidiary undertakings

The company holds inter-company loans with subsidiary undertakings with repayment dates being a mixture of repayable on demand or repayable on a

fixed contractual date. These inter-company loans are disclosed on the face of the balance sheet. None are past due nor impaired. The carrying value of

these loans approximates their fair value. The expected credit loss on these loans with subsidiary undertakings is expected to be immaterial, both on

initial recognition and subsequently.

Financial instruments

Details of the company’s risk management processes and hedge accounting are included in the disclosures in note 26 to the consolidated financial

statements.

Investments

Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.

Audit fees

The company has taken the exemption granted under SI 2008/489 not to disclose non-audit fees paid to its auditors as these are disclosed in the

consolidated financial statements.

Employees

The company has no employees other than the Directors. The remuneration of the Executive Directors is disclosed in the audited section of the Annual

remuneration report on pages 114 to 121. Fees payable to Non-executive Directors totalled £0.5m (2021: £0.5m).

2 Investments

2022

£m

2021

£m

Shares at cost

At 1 January 513.9 513.9

Allowances for impairment – –

At 31 December 513.9 513.9

The company’s investments are included in note 9.

3 Other assets

2022

£m

2021

£m

Fair value of derivative financial instruments – 2.6

Other assets 0.2 0.2

0.2 2.8

196 Keller Group plc Annual Report and Accounts 2022

Financial statements

Notes to the company

financial statements

4 Trade and other debtors

2022

£m

2021

£m

Other receivables 0.5 0.2

Prepayments 4.1 0.6

Fair value of derivative financial instruments – –

4.6 0.8

5 Trade and other creditors

2022

£m

2021

£m

Trade creditors and accruals 9.7 10.5

Other creditors 6.9 –

Accrued interest 0.1 –

16.7 10.5

6 Non-current other creditors

2022

£m

2021

£m

Other creditors – 6.2

– 6.2

7 Contingent liabilities

The company and certain of its subsidiary undertakings have entered a number of guarantees in the ordinary course of business, the effects of which are

to guarantee or cross-guarantee certain bank borrowings and other liabilities of other Group companies. At 31 December 2022, the company’s liability in

respect of the guarantees against bank borrowings amounted to £246.4m (2021: £140.2m). In respect of one subsidiary, which is dormant and does not

have the funds to pay its liabilities, the company has recognised a liability for the amounts that will need to be repaid if the subsidiary is wound up which is

presented as other creditors in notes 5 and 6. In respect of all other guarantees and cross-guarantees, it is judged to be remote that any cash outflow will

arise. In addition, outstanding standby letters of credit and surety bonds for the Group’s captive insurance arrangements totalled £28.1m (2021: £26.5m).

In addition, as set out in note 9, the company has provided a guarantee of certain subsidiaries’ liabilities to take the exemption from having to prepare

individual accounts under section 394A and section 394C of the Companies Act 2006 and exemption from having their financial statements audited

under sections 479A to 479C of the Companies Act 2006.

8 Pension liabilities

In the UK, the company participates in the Keller Group Pension Scheme (the ‘Scheme’), a defined benefit scheme, details of which are given in note 33 to

the consolidated financial statements. The company’s share of the present value of the assets of the Scheme at the date of the last actuarial valuation on

5 April 2020 was £7.0m and the actuarial valuation showed a funding level of 77%.

Details of the actuarial methods and assumptions, as well as steps taken to address the deficit in the Scheme, are given in note 33 to the consolidated

financial statements. The policy for determining the allocation of each participating company’s pension liability is based on where each Scheme member

was employed.

During the year the company was party to a flexible apportionment arrangement (FAA) to transfer in the portion of the scheme previously attributed to a

dormant subsidiary entity. The Company previously accounted for a 14% share of the scheme assets and liabilities. This has now increased to 31% of the

scheme assets and liabilities.

In respect of Guaranteed Minimum Pension the estimated increase in the Scheme’s liabilities was £0.2m. This was recognised as a past service cost in

2018. An allowance has been made for an irrecoverable surplus of £2.3m (2021: £1.7m), representing the company’s allocation as a result of the Group

not having an unconditional right to refund of a surplus under IFRIC 14. These items are explained further in note 33 to the consolidated financial

statements.

Details of the company’s share of the Scheme are as follows:

2022

£m

2021

£m

Present value of the Scheme liabilities (12.0) (8.1)

Present value of assets 13.0 9.0

Surplus in the Scheme 1.0 0.9

Irrecoverable surplus (2.3) (1.7)

Net defined benefit liability (1.3) (0.8)

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197

Financial statements

Page Title

8 Pension liabilities continued

The assets of the Scheme were as follows:

2022

£m

2021

£m

Equities 2.4 2.5

Target return funds

1.5 1.1

Gilts – –

Bonds 4.2 2.8

Liability driven investing (LDI) portfolios

4.0 2.2

Cash 0.9 0.4

13.0 9.0

1 A diversified growth fund split between mainly UK listed equities, bonds and alternative investments which are capped at 20% of the total fund.

2022

£m

2021

£m

Changes in scheme liabilities

Opening balance (8.1) (9.1)

FAA transfer (9.1) –

Interest cost (0.3) (0.1)

Benefits paid 0.5 0.3

Experience loss on defined benefit obligation – –

Changes to demographic assumptions (0.2) (0.1)

Changes to financial assumptions 5.2 0.9

Closing balance (12.0) (8.1)

Changes in scheme assets

Opening balance 9.0 8.2

FAA transfer 8.1 –

Interest on assets 0.3 0.1

Administrative costs (0.1) –

Employer contributions 0.6 0.3

Benefits paid (0.5) (0.3)

Return on plan assets less interest (4.4) 0.7

Closing balance 13.0 9.0

Actual return on scheme assets (4.1) 0.8

Statement of comprehensive income

Return on plan assets less interest (4.4) 0.7

Experience loss on defined benefit obligation – –

Changes to demographic assumptions (0.2) (0.1)

Changes to financial assumptions 5.2 0.9

Change in irrecoverable surplus (0.6) (1.5)

Remeasurements of defined benefit plans – –

Cumulative remeasurements of defined benefit plans (3.5) (3.5)

Expense recognised in the income statement

Net pension interest costs – –

Expense recognised in the income statement – –

Movements in the balance sheet liability

Net liability at start of year 0.8 1.1

FAA transfer 1.0 –

Expense recognised in the income statement 0.1 –

Employer contributions (0.6) (0.3)

Remeasurements of defined benefit plans – –

Net liability at end of year 1.3 0.8

The contributions expected to be paid during 2023 are £0.8m.

Notes to the company financial statements continued

198

Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

The history of experience adjustments on Scheme assets and liabilities is as follows:

2022

£m

2021

£m

2020

£m

2019

£m

2018

£m

Present value of defined benefit obligations (12.0) (8.1) (9.1) (9.0) (8.3)

Fair value of Scheme assets 13.0 9.0 8.2 7.9 6.8

Surplus/(deficit) in the Scheme 1.0 0.9 (0.9) (1.1) (1.5)

Irrecoverable surplus (2.3) (1.7) (0.2) (0.3) (0.2)

Net defined benefit liability (1.3) (0.8) (1.1) (1.4) (1.7)

Experience adjustments on Scheme liabilities 5.0 0.8 (0.4) (0.8) 0.7

Experience adjustments on Scheme assets (4.4) 0.7 0.3 0.8 (0.4)

The company contributes to a defined contribution scheme; there were no contributions outstanding in respect of the Scheme at 31 December 2022

(2021: £nil).

9 Group companies

In accordance with section 409 of the Companies Act 2006, a full list of subsidiaries and joint ventures as at 31 December 2022 is disclosed below.

Unless otherwise stated, each of the subsidiary undertakings is wholly owned through ordinary shares by intermediate subsidiary undertakings.

All of the subsidiary undertakings are included within the consolidated financial statements.

All trading companies are engaged in the principal activities of the Group, as defined in the Directors’ report.

Name Address

A.C.N. 000 120 936 Pty Ltd Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

A.C.N. 000 842 240 Pty Ltd Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

A.C.N. 001 252 875 Pty Ltd Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

A.C.N. 006 103 135 Pty Ltd Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

A.C.N. 008 673 167 Pty Ltd Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

A.C.N. 099 793 852 Pty Ltd Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

Accrete Industrial Flooring Limited 2 Kingdom Street, London, W2 6BD, United Kingdom

Accrete Limited 2 Kingdom Street, London, W2 6BD, United Kingdom

Ansah Asia Sdn Bhd 8A, Jalan Vivekananda, Off Jalan Tun Sambanthan, Brickfields, Kuala Lumpur, 50470, Malaysia

Austral Construction Pty Ltd 112–126 Hallam Valley Road, Dandenong, VIC, 3175, Australia

Austral Group Holdings Pty Ltd 112–126 Hallam Valley Road, Dandenong, VIC, 3175, Australia

Austral Investors Pty Ltd 112–126 Hallam Valley Road, Dandenong, VIC, 3175, Australia

Austral Plant Services Pty Ltd 112–126 Hallam Valley Road, Dandenong, VIC, 3175, Australia

Capital Insurance Limited

1st Floor Goldie House, 1–4 Goldie Terrace, Upper Church Street, Douglas, IM1 1EB, Isle of Man

Case Foundation Company 2405 York Road, Suite 201, Lutherville Timonium, Maryland, 21093, United States

Cyntech Construction Ltd. Suite 2600, Three Bentall Centre, 595 Burrard Street, P.O. Box 49314, Vancouver, BC V7X 1L3

Fondedile Foundations UK Ltd Oxford Road, Ryton-on-Dunsmore, Coventry, West Midlands, CV8 3EG, United Kingdom

Frankipile Botswana (Pty) Limited First floor, Plot 64518, Fairgrounds Office Park, Gaborone, Botswana

Frankipile Ghana Limited Plot LI/13/86, Bethlehem Street, Thema, Ghana

Frankipile International Projects Limited C/O DTOS Ltd, 10th floor, Standard Chartered Tower, 19 Cybercity, Ebene, Mauritius

Frankipile Mauritius International

(Seychelles) Limited

Ocean Gate House, Ground Floor, Room 12, Victoria, Mahe, Seychelles

Frankipile Swaziland (Pty) Limited Tenant Office 204, 2nd floor, Inyatsi House, 760 Dr David Hynd Road, Trelwany Park, Manzini, Eswatini

GENCO Geotechnical Engineering

Contractors Limited

Sheraton Buildings-Plot 10, Block 1161, El Nozha , Cairo, Egypt

GEO Instruments Polska Sp. z o.o. Lysakow Drugi nr 47, 28–300 Jedrzejow, Poland

Geo-Instruments GmbH Mausegatt 51, 44866 Bochum, Germany

Geo-Instruments Sarl 8 Allee des Ginkgos, Parc d’Activites du Chene, Activillage, 69673 Bron Cedex, France

GEO-Instruments, Inc. 2405 York Road, Suite 201, Lutherville Timonium, Maryland, 21093, United States

GKM Consultants Inc. 101 – 2141 rue Nobel, Sainte-Julie, Québec, J3E1Z9, Canada

Golden Triangle Construction Materials, Inc. 9720 Derrington Road, Houston, TX 77064 United States

Keller (M) Sdn Bhd 8A, Jalan Vivekananda, Off Jalan Tun Sambanthan, Brickfields, Kuala Lumpur, 50470, Malaysia

Keller AMEA Hub Investment L.L.C. Unit 302, Level 103, Arenco Tower, Sheikh Zayed Road, Dubai Media City, Al Sufouh 2, Dubai,

United Arab Emriates

Strategic report Governance Financial statements

199

Financial statements

Page Title

Name Address

Keller Arabia Contracting Holdings Limited KGAF6755, 6755 Prince Sultan Bin Abdulaziz road, 3357 Ulaia District, Tabuk 47911,

Kingdom of Saudi Arabia

Keller AsiaPacific Limited 72, Anson Road #11–03, Anson House, Singapore, 079911

Keller Australia Pty Limited

Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

Keller Funderingstechnieken Belgie BV Lozenberg 22, bus 3, 1932 Zaventem, Belgium

Keller Canada Holdings Ltd. Suite 2600, Three Bentall Centre, P.O. Box 49314, 595 Burrard Street, Vancouver BC, V7X 1 L3,

Canada

Keller Canada Services Ltd Suite 2600, Three Bentall Centre, P.O. Box 49314, 595 Burrard Street, Vancouver BC, V7X 1 L3,

Canada

Keller Central Asia LLP Aiteke Bi Street 55, Atyrau City, 060011, Kazakhstan

Keller Cimentaciones Chile, SpA Avenida De Apoquindo 3885, piso 18 la Comuna de las Condes, Santiago, Chile

Keller Cimentaciones de Latinoamerica

SA de CV

Av. Presidente Masaryk 101, Int. 402, Bosque de Chapultepec I Seccion Delegacion Miguel Hidalgo,

11580 CDMX, Mexico

Keller Cimentaciones SAC Avenida Santo Toribio 143, Urbanizacion El Rosario, Departamento San Isidro, Lima, Peru

Keller Cimentaciones, S.L.U. Calle de la Argentina, 15, 28806 Alcala de Henares, Madrid, Spain

Keller Drilling, Inc. CT Corporation System, 818 West Seventh Street, Suite 930, Los Angeles, CA, 90017, United States

Keller Egypt LLC Sheraton Buildings, Plot 10, Block 1161, El Nozha, Cairo, Egypt

Keller EMEA Limited

2 Kingdom Street, London, W2 6BD, United Kingdom

Keller Finance Australia Limited 2 Kingdom Street, London, W2 6BD, United Kingdom

Keller Finance Limited 2 Kingdom Street, London, W2 6BD, United Kingdom

Keller Financing 2 Kingdom Street, London, W2 6BD, United Kingdom

Keller Fondations Speciales SAS 2 rue Denis Papin, 67120, Duttlenheim, France

Keller Fondations Speciales SPA

No. 35, Route de Khmiss El Khechna, Sbâat, 16012 Rouiba, w. Alger, Algeria

Keller Fondazioni S.r.l Via Isarco 1, Varna, I-39040, Italy

Keller Foundations (S E Asia) Pte Ltd 18 Boon Lay Way, #04–104, Tradehub 21, 609966, Singapore

Keller Foundations Ltd. Suite 2600, Three Bentall Centre, P.O. Box 49314, 595 Burrard Street, Vancouver BC, V7X 1 L3,

Canada

Keller Foundations Vietnam Company Limited 24 Dang Thai Mai Street, Ward 7, Phu Nhuan District, Ho Chi Minh City, Vietnam

Keller Funderingstechnieken B.V. Europalaan 16, 2408 BG, Alphen aan den Rijn, Netherlands

Keller Funderingsteknik Danmark ApS Lottenborgvej 24, 2800 Kongens Lyngby, Denmark

Keller Geotechnics ESC 16 Industry Road, Clayville Industrial, Olifantsfontein, 1666, South Africa

Keller Geotechnics (Mauritius) Ltd Geoffrey Road, Bambous, Mauritius

Keller Geotechnics Namibia (Pty) Limited 2nd floor, LA Chambers, Ausspann Plaza, Dr Agostinho Neto Road, Windhoek, Namibia

Keller Geotechnics SA (Pty) Ltd

16 Industry Rd, Clayville Industrial, Olifantsfontein, 1666, Gauteng, South Africa

Keller Geotechnics Tanzania Ltd

1127 Amverton Tower, Chole Road, Dar es Salaam, Tanzania

Keller Geotehnica Srl Bucuresti Sectorul 1, Str., Uruguay, Nr. 27, Etaj 1, Ap. 2, 011444 Bucuresti, Romania

Keller Geoteknikk AS Hovfaret 13, Oslo, 0275, Norway

Keller Ground Engineering Bangladesh Limited 661/3 Ashkona Bazar, Hazi Camp, Dhakinkhan, Dhaka-1230, Bangladesh, Dhaka, Bangladesh

Keller Ground Engineering India Private Limited 7th Floor, Eastern Wing, Centennial Square 6A, Dr Ambedkar Road, Kodambakkam, Chennai,

600024, India

Keller Ground Engineering LLC

Office # 14, Building # 700 Boushar Street 51, Oman

Keller Grundbau Ges.m.b.H. Guglgasse 15, BT4a/3.OG, Vienna, 1110, Austria

Keller Grundbau GmbH Kaiserleistraße 8, Offenbach am Main, 63067, Germany

Keller Grundlaggning AB Östra Lindomev 50, 437 34, Lindome, Sweden

Keller Holding GmbH Kaiserleistraße 8, Offenbach am Main, 63067, Germany

Keller Holdings Limited

2 Kingdom Street, London, W2 6BD, United Kingdom

Keller Holdings, Inc. The Corporation Trust Company, 1209 Orange Street, Wilmington, DE, 19801, United States

Keller Industrial, Inc. 820 Bear Tavern Road, West Trenton, New Jersey 08628, United States

Keller Investments LLP 2 Kingdom Street, London, W2 6BD, United Kingdom

Keller Limited

Oxford Road, Ryton-on-Dunsmore, Coventry, West Midlands, CV8 3EG, United Kingdom

Keller Management Services, LLC The Corporation Trust Company, 1209 Orange Street, Wilmington, DE, 19801, United States

Keller Mélyépítő Korlátolt Felelősségű Társaság 1124 Budapest, Csörsz utca 41. 6. em., Hungary

Keller Mocambique, Limitada Bairro da Matola D, Estrada Nacional N4, Avenida Samora Machel nr. 393, Matola, Mozambique

Keller New Zealand Limited C/-GazeBurt, 1 Nelson Street, Auckland, 1010, New Zealand

9 Group companies continued

Notes to the company financial statements continuedNotes to the company financial statements continued

200

Keller Group plc Annual Report and Accounts 2022

Financial statements

Page Title

Name Address

Keller North America, Inc. The Corporation Trust Company, 1209 Orange Street, Wilmington, DE, 19801, United States

Keller Polska Sp. z o.o. ul. Poznanska172, Ozarow Mazowiecki, PL-05850, Poland

Keller Pty Ltd Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

Keller Puerto Rico, LLC 1209 Orange Street, Wilmington, Delaware, 19801, United States

Keller Qatar L.L.C

Office No 273 Al Jazeera Complex-B Satwa Road, Wholesale Market, Doha, Qatar

Keller Resources Limited 2 Kingdom Street, London, W2 6BD, United Kingdom

Keller speciálne zakladani spol. s r.o. Na Pankraci 1618/30, 14000 Praha 4, Czech Republic

Keller specialne zakladanie spol.s.r.o. Hranica 18 – AB 6, 82105 Bratislava, Slovakia

Keller Turki Company Limited

PO Box 718, Dammam, 31421, Saudi Arabia

Keller Ukraine LLC 30, Vasylkivska Street, Kiev, 03022, Ukraine

Keller West Africa S.A. BP 1238 Abidjan-Marcory, Zone 4C, Rue Clement Ader, Côte d’Ivoire

Keller-MTS AG Allmendstrasse 5, Regensdorf, 8105, Switzerland

KFS Finland Oy

Haarakaari 42, TUUSULA, 04360, Finland

KGS Keller Gerate & Service GmbH Kaiserleistraße 8, Offenbach am Main, 63067, Germany

Makers Holdings Limited

2 Kingdom Street, London, W2 6BD, United Kingdom

Makers Management Services Limited

2 Kingdom Street, London, W2 6BD, United Kingdom

Makers Services Limited 2 Kingdom Street, London, W2 6BD, United Kingdom

Makers UK Limited 2 Kingdom Street, London, W2 6BD, United Kingdom

Moretrench Industrial Inc. 820, Bear Tavern Road, West Trenton, NJ, 08628, United States

Nordwest Fundamentering AS Erviknesveien 55, 7160 Bjugn, Norway

North American Foundation Engineering Inc. 5393 Steels Ave West, Milton, ON, LPT 2Z1, Canada

PHI Group Limited

Oxford Road, Ryton-on-Dunsmore, Coventry, West Midlands, CV8 3EG, United Kingdom

Piling Contractors New Zealand Limited C/-GazeBurt, 1 Nelson Street, Auckland, 1010, New Zealand

Piling Contractors Pty Limited Suite G01, 2–4 Lyonpark Road, Macquarie Park, NSW, 2113, Australia

PT. Keller Franki Indonesia

Gedung Graha Kencana Lantai 7 Unit B-I, Jalan Raya Perjuangan No. 88, Kebon Jeruk, Jakarta Barat,

11530, Indonesia

Recon Europe Holding, LLC 251 Little Falls Drive, Wilmington, DE 19808 United States

Recon GP, LLC 251 Little Falls Drive, Wilmington, DE 19808, United States

Recon Holdings II, Inc. 251 Little Falls Drive, Wilmington, DE 19808, United States

Recon Holdings III, Inc 251 Little Falls Drive, Wilmington, DE 19808, United States

Recon Services Inc. (Canada) 199 Bay Street, 5300 Commerce Court West, Toronto, ON M5L 1B9 Canada

Recon Services, Inc. 251 Little Falls Drive, Wilmington, DE 19808, United States

Recon Servicios Ambientales Puerto Rico, LLC c/o Fast Solutions, LLC, Citi Tower, 252 Ponce de Leon Avenue, Floor 20, San Juan, PR 00918,

Puerto Rico

Remedial Construction Services, L.P 211 E. 7th Street, Suite 620, Austin, TX 78701, United States

Resource Piling (M) Sdn. Bhd. 8A, Jalan Vivekananda, Off Jalan Tun Sambanthan, Brickfields, Kuala Lumpur, 50470, Malaysia

Suncoast Post-Tension, Ltd. 1209, Orange Street, Wilmington, DE, 19801, United States

Waterway Constructions Group Pty Limited 112–126 Hallam Valley Road, Dandenong, VIC, 3175, Australia

Waterway Constructions Pty Ltd 112–126 Hallam Valley Road, Dandenong, VIC, 3175, Australia

1 Owned directly by the company.

2 100% owned by two trustees.

3 Share capital consists of 99% ordinary shares. The remaining 1% consists of ordinary A, ordinary B and ordinary C shares.

4 51% owned by Keller Fondations Speciales SAS.

5 75.1% owned by Keller Holdings Limited.

6 99.7% owned by Keller Holdings Limited.

7 70% owned by Keller Holdings Limited.

8 49% owned by Keller Holdings Limited.

9 65% owned by Keller Grundbau GmbH.

10 Joint venture 50% owned by Keller Holdings Limited, based in Tuusula, Finland. The company is managed jointly by an equal number of directors from each of the two shareholder companies.

11 Share capital consists of 56% Class A Shares and 44% Class B Shares. Keller Foundations (SE Asia) Pte Limited owns 100% of the Class A Shares and 25% of the Class B Shares.

Strategic report Governance Financial statements

201

Financial statements

Page Title

9 Group companies continued

Keller Group plc has guaranteed the liabilities of the following subsidiaries in order that they qualify for the exemption from having to prepare individual

accounts under section 394A and section 394C of the Companies Act 2006 in respect of the year ended 31 December 2022:

Company Registered number

Keller Financing 04592933

Keller EMEA Limited 02427060

Keller Resources Limited 04592974

Keller Finance Australia Limited 06768174

Keller Group plc has guaranteed the liabilities of the following subsidiaries in order that they qualify for the exemption from audit under sections 479A to

479C of the Companies Act 2006 in respect of the year ended 31 December 2022:

Company Registered number

Keller Holdings Limited 02499601

Keller Finance Limited 02922459

Keller Investments LLP OC412294

Notes to the company financial statements continued

202

Keller Group plc Annual Report and Accounts 2022

Other Information

The Group’s results as reported under International Financial Reporting Standards (IFRS) and presented in the consolidated financial statements (the

‘statutory results’) are significantly impacted by movements in exchange rates relative to sterling, as well as by exceptional items and non-trading

amounts relating to acquisitions.

As a result, adjusted performance measures have been used throughout the Annual Report and Accounts to describe the Group’s underlying

performance. The Board and Executive Committee use these adjusted measures to assess the performance of the business because they consider

them more representative of the underlying ongoing trading result and allow more meaningful comparison to prior year.

Underlying measures

The term ‘underlying’ excludes the impact of items which are exceptional by their size and/or are non-trading in nature, including amortisation of acquired

intangible assets and other non-trading amounts relating to acquisitions and disposals (collectively ‘non-underlying items’), net of any associated tax.

Underlying measures allow management and investors to compare performance without the potentially distorting effects of one-off items or non-

trading items. Non-underlying items are disclosed separately in the consolidated financial statements where it is necessary to do so to provide further

understanding of the financial performance of the Group.

Constant currency measures

The constant currency basis (‘constant currency’) adjusts the comparative to exclude the impact of movements in exchange rates relative to sterling.

This is achieved by retranslating the 2021 results of overseas operations into sterling at the 2022 average exchange rates.

A reconciliation between the underlying results and the reported statutory results is shown on the face of the consolidated income statement, with

non-underlying items detailed in note 9 to the consolidated financial statements. A reconciliation between the 2021 underlying result and the 2021

constant currency result is shown below and compared to the underlying 2022 performance:

Revenue by segment

2022 2021 (Restated)

Statutory

change

Constant

currency

change

Statutory

£m

Statutory

£m

Impact of

exchange

movements

£m

Constant

currency

£m

North America 1,896.1 1,323.1 143.6 1,466.7 +43% +29%

Europe 649.3 549.2 (5.4) 543.8 +18% +19%

Asia-Pacific, Middle East and Africa 399.2 350.2 15.9 366.1 +14% +9%

Group 2,944.6 2,222.5 154.1 2,376.6 +32% +24%

1 The 31 December 2021 consolidated revenues have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Underlying operating profit by segment

2022 2021 (Restated)

Underlying

change

Constant

currency change

Underlying

£m

Underlying

£m

Impact of

exchange

movements

£m

Constant

currency

£m

North America 82.0 73.0 8.2 81.2 +12% +1%

Europe 29.1 24.3 (0.1) 24.2 +20% +20%

Asia-Pacific, Middle East and Africa 6.6 (0.9) 0.8 (0.1) n/a n/a

Central items (9.1) (7.9) – (7.9) n/a n/a

Group 108.6 88.5 8.9 97.4 +23% +12%

1 The 31 December 2021 consolidated operating profits have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Underlying operating margin

Underlying operating margin is underlying operating profit as a percentage of revenue.

Adjusted performance measures

203

Other information

Financial statements

Page TitleAdjusted performance measures

Other adjusted measures

Where not presented and reconciled on the face of the consolidated income statement, consolidated balance sheet or consolidated cash flow

statement, the adjusted measures are reconciled to the IFRS statutory numbers below:

EBITDA (statutory)

2022

£m

2021

(Restated)

£m

Underlying operating profit 108.6 88.5

Depreciation and impairment of owned property, plant and equipment 71.1 65.9

Depreciation and impairment of right-of-use assets 25.5 30.9

Amortisation of intangible assets 0.4 0.6

Underlying EBITDA 205.6 185.9

Non-underlying items in operating costs (excluding goodwill impairment) (17.6) (9.6)

Non-underlying items in other operating income 0.7 0.7

EBITDA 188.7 177.0

1 The 31 December 2021 consolidated operating profits have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

EBITDA (IAS 17 covenant basis)

2022

£m

2021

(Restated)

£m

Underlying operating profit 108.6 88.5

Depreciation and impairment of owned property, plant and equipment 71.1 65.9

Depreciation and impairment of right-of-use assets 25.5 30.9

Legacy IAS 17 operating lease charges (27.9) (32.7)

Amortisation of intangible assets 0.4 0.6

Underlying EBITDA 177.7 153.2

Non-underlying items in operating costs (excluding goodwill impairment) (17.6) (9.6)

Non-underlying items in other operating income 0.7 0.7

EBITDA 160.8 144.3

1 The 31 December 2021 consolidated operating profits have been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Net finance costs

2022

£m

2021

£m

Finance income (0.5) (0.4)

Underlying finance costs 15.6 9.3

Net finance costs (statutory) 15.1 8.9

Finance charge on lease liabilities

(3.6) (3.0)

Lender covenant adjustments (0.2) (0.7)

Net finance costs (IAS 17 covenant basis) 11.3 5.2

1 Excluding legacy IAS 17 finance leases.

Adjusted performance measures continued

204

Keller Group plc Annual Report and Accounts 2022

Other Information

Page Title

Net capital expenditure

2022

£m

2021

(Restated)

£m

Acquisition of property, plant and equipment 81.6 84.0

Acquisition of other intangible assets 0.1 0.4

Proceeds from sale of property, plant and equipment (8.2) (12.2)

Net capital expenditure 73.5 72.2

1 The 31 December 2021 consolidated net capital expenditure has been restated in respect of the correction of prior period errors arising from the fraud at Austral and prior period business combination

measurement adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

Net debt

2022

£m

2021

£m

Current loans and borrowings 34.2 29.8

Non-current loans and borrowings 365.8 246.2

Cash and cash equivalents (101.1) (82.7)

Net debt (statutory) 298.9 193.3

Lease liabilities

(80.1) (73.9)

Net debt (IAS 17 covenant basis) 218.8 119.4

1 Excluding legacy IAS 17 finance leases.

Leverage ratio

The leverage ratio is calculated as net debt to underlying EBITDA.

Statutory

2022

£m

2021

(Restated)

£m

Net debt 298.9 193.3

Underlying EBITDA 205.6 185.9

Leverage ratio (x) 1.5 1.0

1 The 31 December 2021 consolidated results have been restated in respect of the correction of prior period errors arising from the fraud at Austral as outlined in note 3 to the consolidated

financialstatements.

IAS 17 covenant basis

2022

£m

2021

(Restated)

£m

Net debt 218.8 119.4

Underlying EBITDA 177.7 153.2

Leverage ratio (x) 1.2 0.8

1 The 31 December 2021 consolidated results have been restated in respect of the correction of prior period errors arising from the fraud at Austral, as outlined in note 3 to the consolidated

financial statements.

Order book

The Group’s disclosure of its order book is aimed to provide insight into its backlog of work and future performance. The Group’s order book is not a

measure of past performance and therefore cannot be derived from its consolidated financial statements. The Group’s order book comprises the

unexecuted elements of orders on contracts that have been awarded. Where a contract is subject to variations, only secured variations are included in the

reported order book.

205

Other information

Financial statements

Page Title

2013

£m

2014

£m

2015

£m

2016

£m

2017

£m

2018

£m

2019

£m

2020

£m

2021

£m

2022

£m

Consolidated income statement

Continuing operations

Revenue 1,438.2 1,599.7 1,562.4 1,780.0 2,070.6 2,224.5 2,300.5 2,062.5 2,222.5 2,944.6

Underlying EBITDA 124.2 141.9 155.5 158.6 177.2 167.5 198.4 205.0 185.9 205.6

Underlying operating profit 77.8 92.0 103.4 95.3 108.7 96.6 103.8 110.1 88.5 108.6

Underlying net finance costs (3.7) (6.9) (7.7) (10.2) (10.0) (16.1) (22.5) (13.2) (8.9) (15.1)

Underlying profit before taxation 74.1 85.1 95.7 85.1 98.7 80.5 81.3 96.9 79.6 93.5

Underlying taxation (23.8) (29.7) (33.0) (29.8) (24.7) (22.5) (22.4) (28.3) (18.9) (20.3)

Underlying profit for the year 50.3 55.4 62.7 55.3 74.0 58.0 58.9 68.6 60.7 73.2

Non-underlying items

(20.2) (56.6) (36.4) (7.3) 13.5 (71.8) (37.2) (27.5) (5.1) (28.2)

Profit/(loss) for the year 30.1 (1.2) 26.3 48.0 87.5 (13.8) 21.7 41.1 55.6 45.0

Underlying EBITDA (IAS 17 covenant basis) 124.2 141.9 155.5 158.6 177.2 167.5 170.8 175.0 153.2 177.7

Consolidated balance sheet

Working capital 124.1 104.1 97.1 152.5 181.3 225.4 200.9 180.3 149.6 303.4

Property, plant and equipment 281.9 295.6 331.8 405.6 399.2 422.0 460.6 434.9 443.4 486.5

Intangible and other non-current assets 202.8 203.4 183.0 218.2 198.3 179.5 192.3 183.5 232.0 202.4

Net debt (statutory) (143.7) (102.2) (183.0) (305.6) (229.5) (286.2) (289.8) (192.5) (193.3) (298.9)

Other net liabilities (92.5) (154.6) (94.9) (41.1) (77.1) (114.2) (166.5) (196.2) (203.7) (196.6)

Net assets 372.6 346.3 334.0 429.6 472.2 426.5 397.5 410.0 428.0 496.8

Net debt (IAS 17 covenant basis) (143.7) (102.2) (183.0) (305.6) (229.5) (286.2) (213.1) (120.9) (119.4) (218.8)

Underlying key performance indicators

Diluted earnings per share from continuing

operations (p) 71.9 74.2 85.4 74.8 101.8 79.1 81.3 96.3 84.2 100.7

Dividend per share (p) 24.0 25.2 27.1 28.5 34.2 35.9 35.9 35.9 35.9 37.7

Operating margin 5.4% 5.8% 6.6% 5.4% 5.2% 4.3% 4.5% 5.3% 4.0% 3.7%

Return on capital employed

16.7% 18.3% 20.5% 15.3% 15.1% 13.2% 14.4% 16.4% 13.9% 14.9%

Net debt: EBITDA (statutory) 1.2x 0.7x 1.2x 1.9x 1.3x 1.7x 1.5x 0.9x 1.0x 1.5x

Net debt: EBITDA (IAS 17 covenant basis) 1.2x 0.7x 1.2x 1.9x 1.3x 1.7x 1.2x 0.7x 0.8x 1.2x

1 Intangible and other non-current assets and other net liabilities presented here do not correspond to the published 2021 consolidated financial statements. The 31 December 2021 consolidated

income statement, balance sheet and key performance indicators have been restated in respect of the prior period reporting errors at Austral and prior period measurement business combinations

adjustments, as outlined in notes 3 and 6 to the consolidated financial statements.

2 Non-underlying items are items which are exceptional by their size and/or are non-trading in nature and are disclosed separately in the financial statements where it is necessary to do so to provide

further understanding of the financial position of the Group.

3 Calculated as operating profit expressed as a percentage of average capital employed. ‘Capital employed’ is net assets before non-controlling interests plus net debt and net defined benefit

retirement liabilities.

Financial record

206 Keller Group plc Annual Report and Accounts 2022

Other Information

Page Title Financial record

Head office

2 Kingdom Street

London W2 6BD

Telephone: +44 20 7616 7575

www.keller.com

North America Division

7550 Teague Road

Suite 300, Hanover

Maryland 21076

Telephone: +1 410 551 1938

www.keller-na.com

Europe Division

Kaiserleistrasse 8

63067 Offenbach

Germany

Telephone: +49 69 80510

www.kellerholding.com

Asia-Pacific, Middle East

and Africa (AMEA) Division

Unit 302, Level 103

Arenco Tower, Sheikh Zayed Road,

Dubai Media City, Al Sufouh 2,

Dubai, UAE

Telephone: +971 4213 58 00

www.kellerme.com

Group Company Secretary

and Legal Advisor

Kerry Porritt FCG LLB (Hons)

Registered office

2 Kingdom Street

London W2 6BD

Registered number

2442580

Joint brokers

Investec Bank plc

30 Gresham Street

London EC2V 7QP

Peel Hunt LLP

Moor House, 120 London Wall

London EC2Y 5ET

Financial advisors

Rothschild & Co.

New Court, St. Swithin’s Lane

London EC4N 8AL

Legal advisors

DLA Piper UK LLP

160 Aldersgate Street

London EC1A 4HT

Financial public relations advisors

FTI Consulting

200 Aldersgate Street

London EC1A 4HD

Registrars

Equiniti Limited

Aspect House, Spencer Road

Lancing, West Sussex

BN99 6DA

Contacts

Our offices Secretary and advisors

207

Other information

Financial statements

Page TitleContacts

Cautionary statement

This document contains certain forward-looking statements with

respect to Keller’s financial condition, results of operations and

business, and certain of Keller’s plans and objectives with respect to

these items.

Forward-looking statements are sometimes, but not always, identified

by their use of a date in the future or such words as ‘anticipates’, ‘aims’,

‘due’, ‘will’, ‘could’, ‘may’, ‘should’, ‘expects’, ‘believes’, ‘intends’, ‘plans’,

‘potential’, ‘reasonably possible’, ‘targets’, ‘goal’ or ‘estimates’. By their

very nature forward-looking statements are inherently unpredictable,

speculative and involve risk and uncertainty because they relate to

events and depend on circumstances that will occur in the future.

There are a number of factors that could cause actual results and

developments to differ materially from those expressed or implied by

these forward-looking statements.

These factors include, but are not limited to, changes in the economies

and markets in which the Group operates; changes in the regulatory and

competition frameworks in which the Group operates; the impact of legal

or other proceedings against or which affect the Group; and changes

in interest and exchange rates. For a more detailed description of these

risks, uncertainties and other factors, please see the risk management

approach and principal risks section of the strategic report.

All written or verbal forward-looking statements, made in this document

or made subsequently, which are attributable to Keller or any other

member of the Group or persons acting on their behalf are expressly

qualified in their entirety by the factors referred to above. Keller does not

intend to update these forward-looking statements.

Nothing in this document should be regarded as a profits forecast.

This document is not an offer to sell, exchange or transfer any securities

of Keller Group plc or any of its subsidiaries and is not soliciting an offer

to purchase, exchange or transfer such securities in any jurisdiction.

Securities may not be offered, sold or transferred in the United States

absent registration or an applicable exemption from the registration

requirements of the US Securities Act.

Keller Group plc

2 Kingdom Street

London W2 6BD

+44 20 7616 7575

info@keller.com

www.keller.com

208 Keller Group plc Annual Report and Accounts 2022

Other Information

Cautionary statement

www.keller.com

Keller Group plc Annual Report and Accounts 2022