Balfour Beatty (BBY) Investor update summary

Market outlook and financial indicators

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

• Confirmed UK network investment totals £80bn-£85bn through 2031; National Grid, SSE and ScottishPower programmes for 2026-31 total £35bn, £29bn and up to £12bn, respectively.

• A further £60bn-£70bn is under consideration beyond 2031; 43 major transmission projects worth £33bn are identified, with half requiring early investment and delivery by the mid-2030s.

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

• Demand drivers include net zero by 2050, Clean Power 2030, electrification, renewable connections, aging assets, resilience and data-center loads.

Market position and routes to market

• The stated 25% share is with National Grid, SSE and ScottishPower; around 80% of current activity is in transmission and distribution.

• Frameworks cover overhead lines, cables, substations and converters; preferred-contractor status for major substations in northeast England and Wales runs for six to seven years.

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

• 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.

• Multi-stage contracts enable design, surveys, value engineering and equipment procurement before construction pricing, improving certainty for clients and delivery teams.

Delivery capabilities, capacity and growth investment

• End-to-end delivery spans design, engineering, project management, manufacturing, specialist plant, construction and commissioning; the workforce includes 550 designers and 900 construction delivery staff.

• Direct and supply-chain project workforce is planned to grow from ~1,500 in 2024 to ~3,200 in 2026 and ~6,000 in 2030.

• Hiring rose from 562 experienced and 71 early-career hires in 2024 to 642 and 94 in 2025; 2026 plans are 700 experienced and 94 early-career hires. Over 1,700 people joined in the past three years.

• Painter Brothers increased steel output from 5,000 to 10,000 tons and targets 15,000 tons; its workforce grew from 45 to over 100. Hereford annual capacity is 10,000t, with 15,000t planned.

• Growth investment includes an overhead-line training school, 17 bespoke development pathways, AI, drones and robotics; a conductor-spacer robot is four times quicker and removes workers from elevated baskets.