Balfour Beatty (BBY) Investor update summary

Market growth and investment outlook

• UK power transmission market targeted for 2025-30 at ~20% CAGR; estimated 2025 market share 25%. H1 revenue £366m, up 130% vs H1 2023; order book £2.1bn, 5x H1 2023.

• A further £6-8bn of pipeline is identified; National Grid, SSE and ScottishPower have 2026-31 investment programmes of £35bn, £29bn and up to £12bn, respectively.

• Distribution investment forecast at £50bn to 2050, at least double current annual levels; acceleration expected over the next 5-10 years, including RIIO-ED3 in 2028-33.

• Beyond 2030, £89bn of investment is identified vs £64bn pre-2030; 43 major transmission projects worth £33bn, with half requiring early investment and delivery by the mid-2030s.

Funding and routes to market

• Network investment is planned by network owners, approved by Ofgem and funded by network owners; regulated returns are recovered through electricity bills, not the Treasury.

• RIIO-T3 covers transmission in 2026-31 and RIIO-ED3 covers distribution in 2028-33; ASTI enables earlier funding for development, design and procurement of major transmission schemes.

• Framework positions with National Grid, SSE and ScottishPower provide access to principal customer programmes across transmission, distribution, overhead lines, cables, substations and converter stations.

Delivery capabilities and market position

• Focus is on complex, specialist and large-scale work with high entry barriers; differentiators include a 100-year track record, end-to-end delivery and the largest design and delivery workforce in the UK.

• End-to-end capability spans design and engineering, project management, manufacturing, specialist plant, construction and commissioning; 550 designers are based in the UK and India.

• Painter Brothers' Hereford facility has current annual capacity of 10,000t, with 15,000t planned; in-house tower and substation-structure manufacturing supports integrated delivery and wider-market supply.

• Major project experience includes Beauly-Peterhead, Viking Link, Hinkley Connection, Skye and Argyll, across overhead lines, underground cables, substations and converter stations.