MAKING A MATERIAL
DIFFERENCE
2024
Annual Report and Accounts
STRATEGIC REPORT
Making it happen
»01
Investment case
»04
Breedon at a glance
»06
Chair’s statement
»08
Market review
»10
Business model
»16
Chief Executive Officer’s review
and outlook
»22
– Breedon 3.0
»24
– Operating reviews
»32
Key performance indicators
»40
Chief Financial Officer’s review
»42
Managing our risks and
opportunities
»48
– Principal risks
»51
– Climate-related risks and
opportunities
»59
Viability Statement
»67
Sustainability
»69
– Planet
»72
– People
»81
– Places
»88
– Principles
»91
Section 172(1) Statement
»95
GOVERNANCE REPORT
Board of Directors
»102
Corporate governance statement
»104
Board in action
»105
Culture and colleague engagement
»107
Engaging with shareholders
»109
Audit & Risk Committee report
»112
Nomination Committee report
»118
Sustainability Committee report
»121
Compliance statement against
the Code
»123
Directors’ Remuneration report
»129
– Annual statement
»129
– Remuneration at a glance
»133
– Directors’ Remuneration Policy
»134
– Annual Report on Remuneration
»139
Directors’ report
»147
Statement of directors’
responsibilities
»150
Our purpose is to make a
material difference to the lives
of our colleagues, customers
and communities.
We achieve that by delivering
essential construction materials
while living our values;
keeping it simple, striving to
improve, making it happen
and showing we care.
The strategic report has been
approved by the Board of Directors
and signed on its behalf by:
Rob Wood
Chief Executive Officer
5 March 2025
CONSOLIDATED FINANCIAL
STATEMENTS
Independent Auditor’s report
»152
Consolidated income statement
»162
Consolidated statement
of comprehensive income
»163
Consolidated statement
of financial position
»164
Consolidated statement
of changes in equity
»165
Consolidated statement
of cash flows
»166
Notes to the consolidated
statements
»167
COMPANY FINANCIAL
STATEMENTS
Company balance sheet
»200
Company statement of
changes in equity
»201
Notes to the Company
financial statements
»202
Subsidiaries
»207
ADDITIONAL INFORMATION
Shareholder information
»210
Glossary
»213
Contents
Breedon Group plc Annual Report and Accounts 2024
Strategic report Governance Financial statements Additional information
Record revenue
Revenue
Return on invested capital
Resilient returns
Earnings before interest,
tax, depreciation and
amortisation
Robust earnings
Breedon is a leading vertically-integrated international
construction materials group in Great Britain, Ireland
and the United States.
We supply the construction industry with the essential
materials needed to build the places where we live
and work, play and in-between.
We use our core assets to produce valued-added
downstream products, pulling through our aggregates
and cement to be used in the production of ready-
mixed concrete and asphalt, and the provision of
surfacing solutions.
Our growth strategy has served us well, building
platforms in three geographies and delivering 19%
compound revenue growth since our first full year
of trading as Breedon. Our evolved strategy will
ensure we continue to Expand and Improve Breedon
as we deliver the next chapter of growth.
Making it happen
01
Breedon Group plc Annual Report and Accounts 2024
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At Breedon, our ambition to
become a leading vertically-
integrated international
construction materials group is
driven by our growth mindset.
Since Breedon was formed, we
have experienced rapid expansion,
powered by two complementary
routes to growth.
We focus on supplying essential
materials to end-markets
that benefit from long-term
structural growth dynamics,
ensuring we are well-positioned
in high-demand sectors.
We pursue carefully selected
transactions to consolidate
the markets in which we
operate, strengthening our
competitive position and
expanding our footprint.
Making it happen
02
Breedon Group plc Annual Report and Accounts 2024
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Our growth is enhanced by a
relentless focus on improving our
assets and operations. We devote
significant time and resources to
ensure we replenish and extend
our valuable mineral reserves and
resources. These are the lifeblood of
our business and a significant store
of value for our future.
We are committed to maximising
the efficiency of our assets
through our focus on commercial
and operational excellence,
and attempt to ensure that
every operation is optimised for
performance and value.
Embracing innovation is key
to enhancing productivity and
increasing the value of every tonne
of material we quarry.
Making it happen
03
Breedon Group plc Annual Report and Accounts 2024
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The foundations of our asset-backed model
are 1.4 billion tonnes of mineral reserves and
resources and two well-invested cement plants.
We supply essential materials to attractive
end‑markets, such as infrastructure and
housebuilding, which benefit from long-term
structural growth trends.
Our self-help culture of continuous improvement
supports margin enhancement and drives returns
in excess of our cost of capital.
Our vertically-integrated operating model offers
margin-enhancing routes to market by pulling
through our aggregates and cement to be used in
the production of ready-mixed concrete and asphalt
and the provision of surfacing solutions.
Our disciplined capital allocation enhances returns,
generates strong Free Cash Flow, supporting
multiple routes to growth, and enabling the payment
of a progressive dividend.
At a glance
»06
Business model
»16
Market review
»10
Strategy
»24
Financial review
»42
We offer sustainable long-term
growth, underpinned by a
proven financial framework
Investment case
04
Breedon Group plc Annual Report and Accounts 2024
Strategic report Governance Financial statements Additional information
Breedon
20111
20121
20131
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
5.6
3.6
1.9
1.7
(0.2)
1.5
0.9
1.9
1.4
1.9
0.8
0.7
0.5
1.4
Covenant
Leverage1
times
£1,576m
£169m
19%
Revenue CAGR2
£270m
£17m
24%
Underlying EBITDA3 CAGR
Since our first full year of trading
as Breedon, we have undertaken
27 acquisitions while simultaneously
pursuing organic growth.
In this time, our growth has outpaced our
markets, we have successfully converted
profits to cash and rapidly reduced
leverage following each transaction.
An outstanding
track record
of sustainable
growth
1 Covenant Leverage has been calculated on a
consistent basis for all periods, following the
principles set out in the Group’s current debt facility
agreements. Note 27 of the consolidated financial
statements contains further details of this calculation.
2 CAGR: Compound annual growth rate.
3 Underlying EBITDA refers to earnings before interest,
tax, depreciation and amortisation.
Six bolt-on
transactions
Cemex
UK assets
Nine bolt-on
transactions
BMC
Hope
Lagan
17%
10%
700bps
Underlying EBITDA margin expansion
Investment case
05
Breedon Group plc Annual Report and Accounts 2024
Strategic report Governance Financial statements Additional information
>100
quarries
2
plants
>200
plants
>50
plants
Our quarries supply aggregates to our external
customers and our own ready-mixed concrete
and asphalt plants, pulling materials through
the business model.
To make a material difference to
the lives of our colleagues, customers
and communities.
Our people are one of our
greatest assets. Their safety and
wellbeing is our highest priority
and the objective of our Home
Safe and Well campaign.
We are committed to upholding clear,
authentic behaviours that drive long-
term success. By staying true to our
principles, we create a foundation of trust,
integrity and accountability that supports
sustainable growth.
Our well-invested cement plants are capable
of producing more than two million tonnes
of cement annually.
Our ready-mixed concrete plants supply
quality-assured concrete, screed and mortar
to a broad scope of projects.
Our asphalt plants supply quality-assured
materials to a wide range of projects from
car parks to major trunk roads.
Our Great Britain surfacing operations are
strategically located in England and Scotland,
serving our national, local and airport
customers efficiently and sustainably.
Our Ireland surfacing and contracting
activities benefit from multi-year frameworks
and term contracts, delivering high-profile
projects including airports and major trunk
road resurfacing.
A balanced portfolio of
high‑quality assets operated
by our first-class team
KEEP IT
SIMPLE
MAKE IT
HAPPEN
STRIVE TO
IMPROVE
SHOW
WE CARE
People
Finance
Sustainability
Our strategy
Aggregates
Our purpose
Our values
Our people
Cement
Ready-mixed concrete
Asphalt
Surfacing
Asset-backed and vertically-integrated
Our culture
4,500
people
40
new graduates and apprentices
78%
colleague engagement score
Breedon at a glance
06
Breedon Group plc Annual Report and Accounts 2024
Strategic report Governance Financial statements Additional information
1.4 billion tonnes
tonnes
We are stewards of 1.4 billion
tonnes of mineral reserves and
resources, equivalent to around 47
years of production.
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Reserves
and resources
Our extensive road and rail
haulage infrastructure delivers
our mineral reserves and
resources to our customers
sustainably.
Connected
An extensive footprint
of valuable assets with
leading market shares
Breedon at a glance
United States
Headquartered in St Louis, Missouri, our US
business is well situated for expansion across
the Midwest, operating a concentrated
network of quarries and ready-mixed
concrete plants.
More detail
»36
Cement
Our Cement division operates
two well-invested plants in GB and
Ireland, producing more than two
million tonnes of cement annually.
More detail
»38
Ireland
A network of quarries and plants
across the Island of Ireland,
supporting a highly regarded
surfacing business.
More detail
»34
Great Britain
An extensive footprint of
quarries and downstream
operations, extending
from Hampshire to the
Hebrides.
More detail
»32
07
Breedon Group plc Annual Report and Accounts 2024
Strategic report Governance Financial statements Additional information
We are on a path that will be
defined by growth and driven
by the people who make
Breedon unique.
A remarkable year of
achievements
I am immensely proud of the achievements
we have made as a company, particularly
in 2024, which marks a significant milestone
in our growth journey as we entered the US
construction materials market.
Whether on site or in leadership, each
team member plays a crucial role in driving
Breedon forward, creating opportunities
and delivering remarkable results.
Our team has shown exceptional resilience
and determination. We have successfully
navigated challenging markets and poor
weather to deliver record revenue and grow
our Underlying margins.
This success is a testament to the
unwavering commitment and passion of
our people at every level of the organisation.
On behalf of the Board, I want to express
our heartfelt thanks to each member of
the Breedon team for their hard work
and dedication.
Chair’s statement
Breedon is on an exciting
journey, defined by
the passion, dedication
and commitment
of our team.
Amit Bhatia
Chair
Refreshing our ambition
Three years ago, at our first Capital Markets
Event, we outlined our ambitious plans for
the future. Since then we have delivered.
We established a third platform and made
tremendous progress on our sustainability
strategy. We grew the dividend, exceeding
our target payout ratio ahead of schedule
and we continued to invest through the
cycle, deploying capital to drive growth
in the long term.
These outstanding achievements were not
left to chance. They are the direct result of
the strategic vision, careful planning and
relentless execution by our passionate team.
In 2024 we were delighted to host our
second Capital Markets Event where
we evolved our strategy, upgraded our
sustainability targets and clarified our
ambitious plans for expansion.
At the core of our simplified strategy
remains our intention to prioritise profitable
and sustainable growth.
2021
2020
2022
2023
2024
48.3
37.6
30.5
8.4
0
Total cash dividends paid
£m
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Strategic report Governance Financial statements Additional information
Delivering on our strategic
commitments
One of the most exciting strategic
developments of 2024 was our entry
into the US.
The US construction materials market offers
tremendous growth potential and it was
essential to identify the right entry point.
After a thorough search and careful
consideration, the Board was delighted to
approve the acquisition of BMC.
This is a landmark transaction and
has opened up years of new growth
opportunities for Breedon. We have
found in BMC a business with a strong
cultural alignment, sharing our values and
commitment to excellence, and we are
excited about the long-term prospects
it brings to the Group.
Positioned for growth
Together, we have established a strong
foundation, positioning Breedon for
further success.
We have built a tried and tested model with
extraordinary potential. We have retained a
strong and flexible balance sheet.
Our people are at the heart of our success
and our culture of empowerment,
accountability and respect has fostered a
world-class team with exceptional talent.
The Board site visit to
our Dowlow quarry in
September 2024
Chair’s statement
Board site visit
Exciting future opportunities
Looking ahead, Breedon is positioned
for continued success and our future is
filled with exciting possibilities to grow
and mature.
As we continue to expand, thoughtful
capital deployment will remain central
to the Board’s considerations, balancing
growth with maturity, and financial flexibility
with value creation.
There is much to look forward to. We are
excited for the future and confident Breedon
will continue to thrive in the years ahead.
Seeking re-election
Since joining the Board in 2016 it has
been an incredible privilege to be part of
Breedon’s transformation. I am deeply proud
of what we have accomplished together
and the bright future we have created.
I am eager to contribute to our ongoing
development. Therefore, I am seeking
re‑election in 2025.
I am excited to continue working alongside
our exceptional team as we drive Breedon
toward even greater success in the
years ahead.
Amit Bhatia
Chair
5 March 2025
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Economic driver
The construction industry plays a
fundamental role in everyday life and
construction activity is widely recognised
to be a significant contributor to economic
prosperity, creating, maintaining and
improving the built environment.
According to the CBI, every £1 spent on
UK construction contributed £2.92 of value
to the UK economy, employing 2.3 million
people directly and generating 6% of UK
Gross Value Added. In the US the impact is
even greater with every US$1 of aggregates
sales generating nearly US$4 of sales in the
wider economy.
The population in our core markets is
growing and urbanising. The UK population
is forecast to grow 7% in the decade
to 2032, while in the RoI, the population
is set to increase by one million between
2022 and 2040.
Although the US population is growing at
less than 1%, a greater proportion will live
in urban settings. With household formation
outpacing population growth, the pressure
on our infrastructure, residential and
non-residential spaces is likely to persist.
(Source: CBI, NSSGA)
Essential industry
Mineral products are a key component
of the construction supply chain, providing
essential heavyside building materials
to the construction sector, including
aggregates, cement and concrete products
as well as asphalt and surfacing materials.
Concrete is the most abundant man-made
material on the planet and fundamental
to shaping our world.
The market in GB is relatively consolidated;
Breedon is one of the top five aggregates
producers who together have access
to c.78% of all consented reserves, with
around 300 companies accounting
for the remainder.
In the US the market is highly fragmented
with c.40% of the market supplied by
the top ten providers, with over 5,000
companies delivering the remaining 60%
market share.
Planning consent for new quarries is
rarely granted, emphasising the need for
long-term strategic planning to secure
extensions to the existing estate, alongside
efficient mineral production.
Due to the heavy nature of the materials
and associated costs of transport, markets
are driven by local and regional factors.
(Source: MPA, BDS Market Intelligence)
Growth drivers
Market review
Supplying structurally-
attractive end-markets
with essential building
materials, products
and services
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Strategic report Governance Financial statements Additional information
Market review
2016
2020
2004
2008
2012
2000
2024
50
300
200
150
100
250
350
300
200
100
2000
2004
2008
2012
2016
2020
2024
0
2000
2004
2008
2012
2016
2020
20241
3,000
2,000
1,000
2016
2020
2004
2008
2012
2000
2024
50
300
200
150
100
250
350
Aggregates market supply
GB – million tonnes
Aggregates markets outpace inflation
UK – indexed to 100 in 2000
Source: MPA
Source: ONS
US – million tonnes
US – indexed to 100 in 2000
Source: US Geological Survey
Source: US Bureau of Labor Statistics
UK PPI: Other
mining and
quarrying
products
UK CPI Index
US PPI:
Construction
sand, gravel and
crushed stone
US CPI Index
Crushed rock
Sand and gravel
Recycled and
secondary
Growth drivers
1 2024 data is an estimate.
Breedon Group plc Annual Report and Accounts 2024
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Strategic report Governance Financial statements Additional information
Infrastructure
Infrastructure is typically funded by public
or regulated organisations with fixed long-
term budgets. Governments in our target
geographies recognise that infrastructure is
under-invested and consequently there are
large investment programmes in place.
In its latest analysis of the National
Infrastructure and Construction Pipeline,
the UK Treasury committed to invest
up to £775bn over the current decade.
This programme is currently under review
with an update expected in the summer
of 2025.
The new UK Government is expected
to prioritise planning reform, stimulate
maintenance of the existing transport
network and promote investment in
decarbonisation, renewable energy,
water and sewage treatment.
In 2021 the Government of Ireland
relaunched the National Development
Plan (NDP), which outlined over €165bn
of public investment by 2030. To deliver
sustainable economic growth and improve
environmental and social outcomes,
public investment in RoI will increase
to 5% of GNI by 2025.
End-markets
The construction end-markets we
serve promote economic prosperity
and productivity. However, population
growth and underinvestment have
combined to produce structural deficits,
underpinning the long-term growth profile
of each market.
Following the 2024 European Court
of Justice ruling ordering Apple to pay
€13bn in unpaid RoI taxes, the Minister for
Finance confirmed the windfall would be
targeted towards public infrastructure
investment over the coming decade.
In the US, the Infrastructure Investment
and Jobs Act (IIJA) is a US$1.2tn five-year
federal programme enacted in 2021,
providing for a substantial increase in
funding for a broad spectrum of growth
enhancing infrastructure projects.
The IIJA more than doubled funding
for transportation to US$660bn, of which
US$313bn is targeted at roads and bridges,
a 33% increase.
Funding for infrastructure in Missouri
has also increased. In addition to being
allotted US$6.5bn IIJA funding, the Missouri
Department of Transport introduced a
fuel tax that will raise US$500m annually
for investment in road and bridge repair
and maintenance.
(Source: Gov.uk, Gov.ie, Euroconstruct, FMI, US
Department of Transport)
Market review
Significant infrastructure spending commitments
UK
£775bn
RoI
€165bn
Markets
US
RoI
UK
78%
12%
10%
Industrial,
Commercial
and other
Housing
Infrastructure
c. 50%
c. 20%
c. 30%
Revenue by end-market1
1. Pro-forma 2024: reported numbers for 2024
restated to include the impact of the four
transactions that took place in 2024 as though they
had been completed on 1 January 2024.
US
US$1.2tn
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Builders’ Survey 2024 found that the UK
planning system presented a greater
restriction to the delivery of new homes
than mortgage availability.
In the UK, the National Policy Planning
Framework was updated in December
2024, central to which was a commitment
to reform the planning system. While the
core intention is to make it easier to build
the infrastructure needed to support
growth, the Government committed to
building 1.5 million homes over the course
of this parliament.
The Irish Government published its most
ambitious housing plan in 2021, containing
a series of actions designed to double
housing output by 2026, supported by more
than €4bn of annual Government funding.
In 2024 30,330 homes were completed,
a reduction of 7% compared to 2023
and below the Government’s target.
In the US, the housebuilding market has been
impacted by affordability and the ‘lock-in’
effect. While long-term fixed rate mortgages
offer payment certainty, the prevalence
of low-rate, fixed-term mortgages has
severely reduced mobility in the US housing
market, which requires lower interest rates
and improved affordability to resolve.
(Source: Gov.uk, Gov.ie, MarketWatch.com)
The pandemic has materially affected
where we work, how we shop and how
we spend our leisure time. Commercial
construction, which is typically driven
by large economically sensitive projects,
has been contracting as retail, leisure and
home working practices have undergone
behavioural changes in recent years.
Industrial output has benefited from these
cultural shifts, requiring new logistics
and supply chain solutions, building large
warehouses, distribution and data centres.
US manufacturing and data centre
construction has been boosted by the
Federal CHIPS and Science Act, which
provides US$53bn over five years to
incentivise domestic semiconductor
manufacture and design and promote
supply chain resilience.
(Source: CPA, Euroconstruct, FMI)
Housebuilding
There is a fundamental shortage of housing
in the geographies we serve, with an
estimated deficit of roughly 1.5 million
homes in the UK, 250,000 in RoI and
4.5 million in the US due to housing starts
falling short of household formation over
recent decades. At the current build rate, that
equates to backlogs of roughly eight years,
eight years and three years respectively.
While affordability and interest rates
are key determinants for the pace of
housebuilding, there is wide recognition
that supply-side policies have not kept
pace with demand. The planning processes
in the UK and RoI are under-resourced and
the Federation of Master Builders House
Market review
Markets
Homes shortfall at current build rates
UK up to
8 years
RoI up to
8 years
Source: CPA
Construction Output
UK £bn
2024e
2025f
2026f
217.7
209.3
204.9
211.1
206.6
2023
2022
Source: Euroconstruct
Ireland €bn
2024e
2025f
2026f
33.8
33.2
31.4
30.9
30.8
2023
2022
Source: Census Bureau, FMI
US US$bn
2024e
2025f
2026f
2,218.1
2,176.4
2,154.4
2,023.7
1,902.7
2023
2022
Commercial, Industrial
and other
US up to
3 years
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Volumes
Mineral product volumes in 2024 reflect the
impact of modest economic growth, offset
by rising construction material costs and
the impact of poor weather conditions.
Volumes in GB marked the third
consecutive year of contraction in 2024
reflecting the combined impact of input
cost inflation and a lack of political clarity,
compounded by wet weather.
While aggregates volumes contracted 3%
in the year, third quarter volumes stabilised
and fourth quarter volumes delivered
incremental growth, sequentially and
year-on-year. Asphalt volumes declined 3%
reflecting delays to some projects. However,
the Autumn budget apportioned additional
spending for local authority road mending
and volumes stabilised in the fourth quarter.
Ready-mixed concrete volumes reached
their lowest level since 1963, reducing 11%.
The decline reflected the poor weather
conditions, the slowdown in new build
housing and the effect of the change
in housebuilding regulations in the first
half of 2023, with volumes stabilising
in the second half.
In the US, aggregate volumes stabilised
in 2023 but softened in 2024, reflecting
input cost increases, weather disruption and
political uncertainty. In some sectors there
is the additional effect of elevated prior year
comparatives, notably multi-family housing
and some commercial end-markets.
Markets
tonnes GB primary
aggregates
2024 GB aggregates
volume reduction
156m
(3)%
Market review
GB Aggregates
million tonnes
2022
2023
2024
155.5
159.8
168.3
183.3
158.6
2021
2020
GB Asphalt
million tonnes
2022
2023
2024
19.8
20.4
21.8
23.3
20.7
2021
2020
GB Ready-mixed concrete
million m3
2022
2023
2024
12.3
13.8
14.8
15.3
13.4
2021
2020
Source: MPA
Source: US Geological Survey
US Aggregates
million tonnes
2022
2023
2024
2,379.0
2,449.0
2,499.0
2,517.0
2,390.0
2021
2020
Source: National Ready Mixed Concrete Association
US Ready-mixed concrete
million m3
2022
2023
20241
305.4
305.9
306.9
301.3
288.9
2021
2020
1 2024 projected annual production
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Strategic report Governance Financial statements Additional information
Outlook
Market review
In recent years, geopolitical uncertainty and
macroeconomic disruption, coupled with
unseasonal weather, have created volatile
trading conditions. However, to promote
economic prosperity there is a fundamental
need to invest in the built environment and
Breedon is ideally positioned to respond
when end-markets recover.
Construction output is forecast to grow
in each of our geographies.
The CPA has forecast growth in UK
construction output of 2.1% in 2025,
gaining momentum in 2026 to grow 4.0%.
The shape of the recovery has undergone
revision throughout 2024, and a more
gradual upturn is now forecast.
CPA forecast
2025
2.1%
2026
4.0%
There is a fundamental need to invest
in the built environment to promote economic
prosperity, and Breedon is ideally positioned
to respond when end-markets recover
UK infrastructure construction output is
forecast to grow 1.4% in 2025, accelerating
to 4.1% in 2026. While we await the outcome
of the Treasury’s infrastructure spending
review, activity remains strong on major
projects including HS2 and Hinkley Point C.
In addition, there have been short-term
injections to support road maintenance
and the Government’s measures to
streamline permissions for offshore wind
powered electricity generation will unlock
up to 13 major offshore projects and
accelerate plans to increase capacity.
Construction output in RoI is forecast by
Euroconstruct to accelerate to 6.0% in
2025 before settling back to 1.8% in 2026,
ensuring it remains one of the fastest
growing construction markets in Europe.
Euroconstruct forecast
2025
6.0%
2026
1.8%
Ireland’s strong economic performance
provides a supportive backdrop to
political commitments to accelerate
capital investment in social and economic
infrastructure. With net inward migration
of one million people between 2022 and
2040, housing is a particular focus and the
Government has committed to an annual
house building target of 50,500 homes.
In the US, economic resilience has
underpinned a robust construction market.
Following two consecutive years of strong
total Construction Put in Place of at least
6.0%, growth is forecast to moderate to
2.0% in 2025.
FMI forecast
2025
2.0%
2026
2.0%
US infrastructure is forecast to grow at
5% in 2025. Although this is slower than
in recent years as we lap the effect of the
IIJA, infrastructure investment remains well
funded with backlogs sustained into 2026 as
c.60% of IIJA funds are yet to be committed.
The largest construction market, single
family housing, is forecast to grow at
4% in 2025, driven by falling interest rates
and a shortage of homes.
Over the long term, our markets are
characterised by steady growth and pricing
power through the cycle. The prospects in
the medium to long-term in all our markets
are underpinned by high levels of pent-up
demand coupled with stabilising economic
and political landscapes, conditions
in which Breedon would expect to thrive.
(Source: CPA, Euroconstruct, FMI)
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Surfacing
Cement
Ready-mixed concrete
Block
Tile
ASSETS
ASSET-BACKED
Higher
margin
Better
ROIC
VERTICALLY-INTEGRATED
OUR CUSTOMERS
OUR PEOPLE
We are a business-to-business
provider, serving a diversified
network of customers across the
infrastructure, housebuilding and
industrial end-markets.
We provide materials to small
local businesses, builders
merchants and major
contractors.
The infrastructure projects our
customers deliver are backed by
central government funding or
local authority budgets.
We are typically engaged
in the early stages of construction
projects due to the nature of
our products.
Our materials are utilised in
foundations, groundworks and
other early construction phases.
Our exposure to repair,
maintenance and improvement
construction is limited.
What we do
Generating cash
What sets us apart
>100
quarries
2
cement
plants
1.4bn
tonnes
Aggregates
Asphalt
Business model
Supplying structurally-
attractive end-markets
with essential building
materials, products
and services
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What we do
Generating cash
What sets us apart
Business model
Products
Surfacing
Quarries, Cement
ASSETS
ASSET-BACKED
VERTICALLY-INTEGRATED
Business-to-business
Our quarries and cement plants
produce the materials which flow
downstream through the model to our
customers and our own operations.
Buy and build platform
We are a consolidator. As a trusted
owner of acquired assets we
have a well-populated and active
M&A pipeline.
Organic investment complements
M&A and is supported by our
healthy balance sheet and strong
cash generation.
We follow our acquisitions with
capital investment, enhancing the
assets we acquire and maximising
their profitability.
Shap quarry; investing for growth
When Shap was acquired in 2020 the
quarry was flooded and loss-making.
Following c.£3m investment over four
years, we regained access to Shap’s
unique geology. Due to its hard wearing
properties, it is ideally suited to rail track
ballast and we have established a long-
term supply contract with Network Rail.
Shap is now an active, growing and
profitable quarry.
c.600kT
Annual Shap aggregate production
Our business model
in action at Shap quarry
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What we do
Generating cash
What sets us apart
Business model
Products
Surfacing
Quarries, Cement
ASSETS
ASSET-BACKED
VERTICALLY-INTEGRATED
Maximising value
Our ready-mixed concrete,
asphalt and block plants use our own
aggregates and cement to produce
quality assured materials.
Our processes pull material through to
the customer, maximising the value of
every tonne of material we produce.
Operating locally
Our site teams are embedded in
their local markets. Our sales and
distribution model is regional with
direct connections to our sites.
Our people have freedom within a
framework to maximise profitability.
They are close to their customers, have
clear responsibility and accountability,
and are empowered to make timely
entrepreneurial decisions.
Maximising value at Shap
Shap’s mineral offers high-value skid
resistance and is ideal for high-speed
road surfaces.
We invested in the on-site asphalt plant,
enhancing both capacity and our ability
to include recycled asphalt planings
(RAP) into the process.
These sustainable credentials were key
to our selection to supply 150kT of
asphalt to the local Carlisle Southern
Relief Road scheme.
150kT
Asphalt to vital local infrastructure
Downstream operations pull
through valuable products
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What we do
Generating cash
What sets us apart
Business model
Products
Surfacing
Quarries, Cement
ASSETS
ASSET-BACKED
VERTICALLY-INTEGRATED
Local supply, national footprint
We deliver surfacing and
maintenance services to national
and local road networks, and
airfield operators.
Our surfacing strategy aims to utilise
our core products, enhancing margins
within a conservative risk profile.
Market reach extended
We have built a strong reputation
for quality and reliability in GB
and Ireland.
Airfield surfacing is a highly
specialised market where we have
rapidly established a robust national
position, supplying commercial and
defence infrastructure.
Partnering with the DIO
Airfield infrastructure requires highly
specialised materials delivered with
precision and reliability.
Through investment and execution,
we have built our credibility and now
have a long-term pipeline of work
with the Defence Infrastructure
Organisation (DIO).
In 2024, we completed the resurfacing
of RAF Leeming supplying 36kT
of drystone and 36kT of asphalt.
72kT
Downstream materials
Growing our surfacing business
enhances our routes to market
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What we do
Generating cash
What sets us apart
Business model
Highly cash generative
Our business model is highly cash
generative, rapidly converting revenue
and profit into cash.
Upstream products have short order
lead times which vary, based on the
nature of the construction project.
Delivering downstream products
and services pulls high-value products
through to the customer.
Investment in systems and processes
ensures cash collection is efficient,
quickly converting revenue to cash.
Our balanced portfolio of assets and
services delivers a blended operating
margin and return on invested capital.
Upstream mineral products deliver a
high operating margin. However, the
capital-intensive nature of the assets
impacts the return on invested capital.
Conversely, downstream services have
lower capital requirements and deliver
higher returns on invested capital.
Our thoughtful capital allocation
approach balances returns generated
by our asset portfolio.
Deploying capital
We deploy our capital responsibly,
maintaining strategic optionality.
Investment for growth
Capital investment is evaluated for both
maintenance and growth objectives and
all opportunities are considered through
a sustainability lens.
We invest in replenishing our mineral
reserves and resources and extending
our quarry assets where possible.
Our assets operate in harsh and
abrasive environments and we invest
proactively to maintain and upgrade
our capital equipment.
Financing Breedon’s future
Capital deployment is balanced to
maintain strategic optionality and
maximise return on invested capital.
Breedon has an excellent track
record of rapidly reducing leverage
following acquisitions.
Our increased dividend for the
year exceeded our target payout
ratio of 40% of Adjusted Underlying
Basic EPS.
Strong and agile balance sheet
provides strategic flexibility
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What we do
Generating cash
What sets us apart
Business model
Our assets
Opening a new quarry or cement plant
is challenging. Consequently, our asset-
backed model allows us to maintain
our strong position in the market.
Securing incremental permits and
continuous parcels of land to existing
quarries is achievable.
Our cement plant in Kinnegad was
commissioned in 2002 and is one of
the most modern plants in Europe.
Our investment strategy
Our thoughtful approach to capital
allocation has delivered a balanced
growth profile where M&A and organic
expansion have contributed evenly.
Since we began trading as Breedon,
we have acquired and integrated
27 businesses, where we have a strong
track-record of improving operations
and profitability.
Disciplined capital investment ensures
our assets are well maintained and
incorporate the latest innovations.
Our people
Our first-class team is at the heart
of our business and is one of our
greatest assets.
We have an entrepreneurial,
empowered and engaged workforce.
Our colleagues have deep and
longstanding local relationships and
are connected to their communities,
which is key to our licence to operate.
Our brand
Breedon has become a top five heavyside
construction materials provider in
GB and RoI in just over a decade.
Our brand has gained prominence with
a reputation for quality of product and
reliability of service. Our Net Promoter
Scores (NPS) recognise our services
as extremely good.
Our reputation
as an asset owner
Our reputation as a good owner and
acquirer of assets benefits our M&A
pipeline which is populated with
family- run operations for whom
this is an important consideration.
Differentiators: our local assets,
our people, and investment
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Making it Happen
Living our values has never been more
evident than in 2024 when our team
‘Made it Happen’ in the face of significant
market headwinds, political and economic
instability, and poor weather conditions.
Results ahead of expectations
By adhering to a clear objective, to be
a bigger and better Breedon, and through
the enduring resilience and commitment
of our first-class team, we delivered
significant strategic and operational
milestones across the Group, contributing
to a fourth successive year of record
revenue and delivering Underlying results
ahead of expectations.
Significant strategic milestone
We created our third platform in the US,
evolved our strategy and upgraded our
sustainability targets. This remarkable
outcome was achieved by maintaining
a determined commitment to executing
our strategy and a deliberate focus on
operational and commercial excellence.
In March, we entered the US construction
materials market through the acquisition
of BMC for an enterprise value of
US$300m. BMC, headquartered in St Louis,
Missouri, supplies ready-mixed concrete,
aggregates and building products. With
an entrepreneurial approach and strong
growth track record, the close cultural
alignment enabled the smooth integration
of BMC into the Group, delivering an
encouraging initial contribution.
Chief Financial Officer’s review
»42
We delivered significant
strategic milestones and
our fourth successive year
of record revenue.
Rob Wood
Chief Executive Officer
Underlying EBITDA
2023: £242m
Statutory PBT
2023: £134m
£270m
£125m
Chief Executive Officer’s review and outlook
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Outlook
Enquiry levels were healthy towards the end
of 2024 and have remained encouraging
in the first two months of 2025. Weather
conditions in all our markets have been
disruptive in early 2025. However, this is
traditionally a quieter period of the year
for us.
The economic landscape in the US is robust
while RoI is strong, benefiting from a budget
surplus, falling interest rates and net inward
migration. Both regions benefit from long-
term commitments to fund development
in infrastructure. In addition, they each
experience structural housing shortfalls,
lack of inventory in the secondary market
and improving affordability at the margin.
While we remain optimistic that 2024 should
represent a floor in construction market
activity in the UK, the broader economic
outlook is less clear. The Government’s
growth agenda is supportive for the
construction materials industry, interest
rates have started to fall and the housing
market lacks inventory. However,
the catalyst to stimulate a recovery
in confidence and investment is yet
to materialise.
Our M&A pipeline remains well populated
and we have exciting opportunities in each
of our geographies. We continue to
prioritise the build out of our US business
in the Midwest and we have scope in
GB and Ireland to expand our regional
footprint and downstream activities.
We remain focused on our operational
and commercial excellence programmes
and have maintained investment in
our machinery and plant through the
cycle. This will enable us to maximise
the productivity and efficiency of our
operations when activity levels improve.
While the timing remains uncertain,
when market activity improves Breedon
is optimally positioned to benefit.
Rob Wood
Chief Executive Officer
5 March 2025
Building out of our scalable US platform
Missouri and the
surrounding states
Bolt-on transactions to extend footprint
In-fill regional and
downstream operations
Chief Executive Officer’s review and outlook
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Evolving
our strategy
Breedon 3.0
Breedon is a consolidator
and M&A is at the heart
of our strategy
Replenishing minerals,
unlocking efficiencies,
driving innovation
People
Finance
Sustainability
Our evolved strategy Breedon 3.0
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Our strategy has evolved at intervals
since Breedon was formed but always
with the same simple principle at its core:
deliver profitable growth, by efficiently
providing essential materials to structurally
growing end-markets and executing
carefully considered acquisitions in
target geographies.
Breedon 3.0 is the latest
iteration of our growth strategy.
Although our approach has
evolved, we have remained
faithful to the emphasis on
profitable growth at the heart
of the original ‘Golden Rules’
while at the same time observing
our core value, to Keep it Simple.
Key to operating our successful model are
our values. Our intention to Keep it Simple
and Strive to Improve is evident in this
evolution of our strategy, Breedon 3.0, where
we have simplified and clarified how we will
deliver our next chapter of growth, ensuring
our strategy relates directly to the day-to-
day activities of our operational colleagues.
We have retained our emphasis on
profitable growth through the core driving
forces of Expand and Improve.
Expand
»26
Improve
»28
Furthermore, the implementation
of our strategy is viewed through the
lenses of ‘People’ – leading our first-
class entrepreneurial team effectively,
‘Sustainability’ – operating our business
sustainably, and ‘Finance’ – deploying our
capital in accordance with our disciplined
financial framework.
A financial framework
to underpin our growth
Financial metrics aligned
to our strategy
3 – 5 years
Growth
Cash flow
Financial discipline
Returns
Revenue
Underlying EBITDA margin
FCF generation
Leverage
ROIC
Outperforms our market
17.5% – 20.5%
>45% FCF generation
1x – 2x
>10%
Dividend
Payout ratio
40%
Profitability
Underlying EBIT margin
12% – 15%
Delivering
Breedon 3.0
Our evolved strategy Breedon 3.0
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Breedon is a consolidator
and M&A is at the heart
of our strategy
Since formation, we have built three
vertically-integrated platforms in GB,
Ireland and, most recently, the US, unlocking
value in the process.
We balance M&A with organic growth by
serving structurally-attractive end-markets
in geographies that benefit from long-term
growth prospects.
The launch of our scalable third platform
in the US through the carefully targeted
acquisition of BMC delivers an optimal
combination of both these routes to Expand.
Our ambition in the next decade is to grow
the US business to be as large as the GB
and Ireland businesses combined.
KPIs
Adjusted Underlying Basic EPS
Combined LTIFR
Combined TIFR
Covenant Leverage
Dividend per share
Emissions intensity – Cementitious
Emissions intensity – Revenue
Free Cash Flow conversion
People positively impacted
Reserves and resources
Return on invested capital
Revenue
Sustainable product sales
Underlying EBITDA margin
Underlying EBIT margin
More detail on our KPIs
»40
Risks
Acquisitions and material capital projects
Climate change
Competition
Failure of a critical asset
Health and safety
IT and cyber security
Land and mineral management
Laws, regulations and governance
Markets
People
Supply chain and input costs
Treasury
More detail on our Risks
»51
Our evolved strategy Breedon 3.0
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US
GB and Ireland
Future focus
A fast-growing
construction market
Construction starts in the
US are forecast to outpace
European construction output
in the medium-term, driven
by housing and infrastructure
deficits and federally funded
stimulus programmes.
Acquisition opportunities
The US is highly fragmented with
c.60% of the market supplied by
over 5,000 operators, providing
a significant opportunity to
source high-quality assets at
fair valuations.
The US offers Breedon numerous
opportunities and our objective in
the coming decade is to build a US
business of a scale comparable
to our combined GB and
Ireland operations.
Investing for growth
Each year c.30% of our capital
expenditure budget is invested in
growth projects, enhancing our land
and mineral portfolio, or investing
in plant and machinery that will
support growth and productivity.
Active M&A pipeline
Our M&A pipeline is well populated
and active and we have a reputation
as a good acquirer. Our first priority
is to scale up our US business in
Missouri and the surrounding states.
In the UK and RoI, we seek to in-fill
our existing footprint.
Mid-west focus
Our focus in the US in
the medium-term will
be on Missouri and the
surrounding states, a region
with an economic footprint
roughly equivalent to the UK
but with more than double
the demand for aggregates.
BMC’s first acquisition
under Breedon
In October 2024, BMC
completed its first
transaction under Breedon
ownership, acquiring
a highly complementary,
downstream manufacturer
of masonry blocks and other
building products.
The prospect for further M&A
in GB and Ireland for bolt-on
and downstream transactions
remains compelling, and our
M&A pipeline is well populated.
Eco-Asphalt
In January 2024, we
completed the acquisition
of Eco-Asphalt, a Merseyside
asphalt supplier strategically
located within the region
where we service the
National Highways
Pavement framework.
Phoenix Surfacing
In April 2024 we acquired
Phoenix Surfacing, enhancing
our presence in the Midlands
and reinforcing our regional
surfacing, airfields and
recycled asphalt capabilities.
Our evolved strategy Breedon 3.0
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Replenishing minerals,
unlocking efficiencies,
driving innovation
By bringing the assets we acquire onto our
vertically-integrated platforms, we can
unlock efficiencies, drive innovation and
provide our customers with a reliable and
trusted supply chain partner.
This continual process creates a virtuous
cycle of enhancement, complementing
end-market growth and M&A with self-help,
enabling us to outperform our markets.
KPIs
Adjusted Underlying Basic EPS
Combined LTIFR
Combined TIFR
Covenant Leverage
Dividend per share
Emissions intensity – Cementitious
Emissions intensity – Revenue
Free Cash Flow conversion
People positively impacted
Reserves and resources
Return on invested capital
Revenue
Sustainable product sales
Underlying EBITDA margin
Underlying EBIT margin
More detail on our KPIs
»40
Risks
Acquisitions and material capital projects
Climate change
Competition
Failure of a critical asset
Health and safety
IT and cyber security
Land and mineral management
Laws, regulations and governance
Markets
People
Supply chain and input costs
Treasury
More detail on our Risks
»51
Our evolved strategy Breedon 3.0
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Mineral replenishment
Excellence
Innovation
Future focus
Our valuable mineral reserves
and resources are the lifeblood
of our business and replenishing
them requires diligent long-
term planning and strong
community relationships.
Responsible stewards
We take our responsibility as
stewards of the land we own
very seriously. Navigated by our
proprietary system, we have
a long-term plan to maximise
planning consents and restore
depleted quarries.
Continuous improvement
Perpetual self-help is embedded
in our culture. Our team constantly
innovates, striving to improve our
practices and processes.
Mineral reserves
In 2024 our land and minerals
team successfully replenished
our mineral reserves and
resources, securing planning
consent for extensions at eight
quarries, adding 51m tonnes
of mineral assets, significantly
ahead of the 27.3m tonnes
extracted in the year.
Mineral pipeline
Our teams utilise proprietary
software to map local
markets and track mineral
replenishment requirements
far into the future. We have
an additional pipeline of 142m
tonnes at various stages of
development, equivalent
to more than five years of
production at current rates.
Increasing the use of technology
and innovation is allowing us
to unlock efficiencies while
improving safety.
Greater accuracy
and safety through
robotics
By using ‘setting out’ robots
to autonomously navigate
airfield surfacing projects,
marking out each stage of
laying asphalt with precision,
we increased accuracy and
efficiency while reducing the
risk of vehicle interaction.
Increased training
through AI and VR
We will increasingly utilise
Artificial Intelligence and
virtual reality for training and
quality control, improving
outcomes for our people and
our customers.
As a trusted steward of land and
mineral assets, we seek to refine
our processes through innovation
and commercial and operational
excellence programmes to ensure
we maximise the value of every
tonne of material we produce
while minimising the impact on our
neighbours and environment.
Operational
By using a broad diagnostics
benchmark of operational
efficiency indicators and analysing
every step of the production
process from quarry ‘face to gate’,
we understand each site’s unique
requirements, enabling us to
target our investment with care.
Commercial
Our vertically-integrated model
promotes commercial excellence,
evident in the success of our GB
surfacing business.
Efficient use of capital
and equipment
Process reengineering
enabled us to remove the
need for contract crushing
at Leaton and Cloud Hill
while the development
of our Running Equipment
Efficiency Improvement
Programme enabled us
to increase the utilisation
of the wash plant at
Dowlow by 50%.
Growing our airfield
surfacing business
Through the close
collaboration of our
commercial and site teams
we have ensured the reliable
provision of highly technical
asphalt with sustainable
properties to our growing
airfield surfacing business.
Our evolved strategy Breedon 3.0
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In 2024 we added nearly 600 colleagues
through the acquisition of BMC. On
completion of the transaction, enhancing
safety practices and procedures took
priority and we saw immediate benefits, not
only reducing time lost to injuries by 80%
but also their severity.
Improving the health, safety and wellbeing
of our team is a constant objective and
therefore, in 2024 we undertook a greater
number of Visible Felt Leadership visits
across the Group. We were pleased to see
a direct improvement in our safety metrics
with a reduction in the lost time injury
frequency rate (LTIFR) to 3.3 per million
hours worked (2023: 3.5).
People: Our people make
Breedon unique
Sustainability: Operating
sustainably
Replenishing our team through the early
careers route is essential for the future
success of the Group, bringing in fresh
talent and perspectives. The apprentice and
industrial placement student programmes
have been extremely successful in recent
years, bringing 170 early careers colleagues
into Breedon since 2022, of which 40 joined
in the last 12 months.
Showing we Care is a value we live by,
particularly with regard to our people.
In 2024, we rewarded our colleagues
with a 4% pay rise and implemented
additional management training to
enhance our leadership skills. These
actions were acknowledged in our latest
engagement survey, which once again
recorded exceptionally high scores for the
construction materials industry with 75%
of our colleagues taking part (2023: 76%),
and 78% reporting that they felt engaged
(2023: 80%).
Our people
»81
Operating our business sustainably is a
strategic imperative and at the forefront
of every decision we take. Breedon has
always taken its responsibility to its people
and its communities seriously and we
have committed to increase our disclosure
and transparency while working towards
reducing our carbon footprint.
In recognition of the substantial progress
we have made, we were pleased to receive
formal validation of our Group-wide carbon
reduction targets from the Science Based
Targets initiative (SBTi) during 2024.
In addition, we were awarded our first CDP
ratings, receiving a C for Water Security
and a B for Climate Change. Both ratings
have subsequently been upgraded, and
in February 2025 we were awarded B- for
Water Security and A- for Climate Change.
In 2024 there is abundant evidence of
how operating our vertically-integrated,
asset-backed model in accordance
with our values and strategic priorities
is making a material difference for all
our stakeholders.
Viewing the
implementation
of our strategy
through
three lenses
Our evolved strategy Breedon 3.0
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Decarbonising our Cement business is
essential to achieving our net zero objective
and we are targeting every part of our
operation that contributes to CO2 emissions.
Both our cement plants made progress
to increase the use of alternative fuels,
reaching a blended replacement rate of
nearly 50% while our modern Kinnegad
plant at times achieved 100% utilisation of
low carbon alternatives. Our development
of a high-strength, lower carbon CEM II
product was well received by our customers
and CEM II now comprises 37% of our
cement sales (2023: 30%).
Carbon capture and storage is an essential
technology to enable the decarbonisation
of the cement production process. During
2024 we continued to progress, moving
into the FEED stage (front-end engineering
and design) of our plans to capture
CO2 emissions at Hope, exploring different
technologies and engineering solutions to
capture our carbon emissions.
The landmark Peak Cluster carbon capture
and storage project has the potential
to decarbonise 40% of the cement and lime
production in the UK and we continue to
work with the Peak Cluster partners towards
the next stage of this exciting project.
In light of the significant progress we have
made towards our sustainability targets,
we took the opportunity to upgrade
our ambitions.
We have accelerated our plans to
decarbonise and we are now aiming
to reduce Scope 1 and 2 emissions and
Scope 3 emissions from purchased clinker
and cement by 23.3% by 2030 from a 2022
baseline. Creating social value remains a key
objective and we will generate a cumulative
£500m benefit to society by 2030. We will
work towards generating half of our
downstream revenue from our Breedon
Balance product range (2024: 34%),
thereby contributing to a more sustainable
built environment.
Sustainability
»69
Our financial framework governs how
we connect thoughtful capital allocation
to strategy, facilitating multiple routes to
growth. By prioritising profitable growth,
through-cycle investment and responsible
leverage, the framework has served us well,
ensuring a strong balance sheet, healthy
returns and strategic financial flexibility.
We have multiple investment opportunities
and at Breedon investment is a
differentiator. Even though volumes have
declined in each of the past three years, we
deliberately maintained capital investment
through the cycle, an approach that ensures
our well-invested assets will be positioned
to respond efficiently when the end-market
backdrop improves.
Finance: Disciplined financial
framework
In 2024 we evolved the suite of financial
targets by which we measure our
performance, retaining our emphasis
on profitability and financial flexibility.
While we have maintained the majority
of our targets we have modified our Free
Cash Flow conversion measure, reducing
the target to 45% to reflect higher corporate
tax rates.
An Underlying EBITDA margin target range
was introduced to complement our existing
Underlying EBIT margin target range.
Our cost of borrowing is directly impacted
by our level of Underlying EBITDA and
relates to our debt covenant compliance.
M&A transactions predominantly reference
an Underlying EBITDA multiple when
assessing valuation. Many of our UK and
International peers report Underlying
EBITDA performance as their primary
profit metric. Our primary operating profit
performance measure going forward will be
Underlying EBITDA.
Chief Financial Officer’s review
»42
Our evolved strategy Breedon 3.0
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Resilient performance
Our GB business delivered a resilient
performance in 2024, one of the wettest
years on record when weather conditions
presented significant challenges to on-
site activity for us and our customers.
With the GB market experiencing
its third consecutive year of volume
decline, our first-class team drew on their
extensive experience and strong customer
relationships to manage through the
challenging market conditions.
Robust end-markets
Infrastructure remained relatively
robust and, while some high-profile civil
engineering projects were cancelled,
spending on the maintenance of road,
airport, water and energy infrastructure
underpinned sales of aggregates and
asphalt where volumes only declined
5% and 3% respectively on a like-for-like
basis. The downturn in housebuilding
activity was particularly evident in ready-
mixed concrete sales, which declined
12% organically.
Challenging conditions were felt across the
construction supply chain and, although
the pace of insolvencies abated towards
the end of 2024, the overall level remained
elevated at c.29% above the level seen
during Covid-19.
Aggregates
million tonnes
Asphalt
million tonnes
Ready-mixed concrete
million m3
Great Britain
Our GB business delivered a resilient
performance in 2024, one of the
wettest years on record.
Highlights
Resilient performance; Underlying
EBITDA margin maintained in
challenging trading conditions.
Flexible and agile team; taking action to
scale capacity appropriately and extend
into new markets.
Focus on self-help; completing two bolt-
on transactions, and driving operational
and commercial excellence.
Revenue
(4)%
Underlying EBITDA
(5)%
£997.4m
£132m
2022
2023
2024
21.2
22.2
23.2
25.7
19.0
2021
2020
2022
2023
2024
2.7
2.8
2.8
3.0
2.3
2021
2020
2022
2023
2024
2.4
2.8
2.9
3.0
2.5
2021
2020
Operating reviews Great Britain
Breedon Group plc Annual Report and Accounts 2024
32
Strategic report Governance Financial statements Additional information
Notwithstanding the soft market conditions,
our volumes stabilised in the second half
with sequential volumes comparable to
the first half. Consequently, pricing was
sustained. Revenue declined 4% to £997.4m
(2023: £1,033.8m) or 6% organically.
Flexible and agile team
Our team took deliberate actions to manage
the cost base and protect profitability,
restructuring the materials business and
scaling capacity appropriately. During the
year we closed or mothballed 11 ready-
mixed concrete plants, five quarries and
two asphalt plants.
As a result, Underlying EBITDA reduced
5% to £131.9m (2023: £138.6m) or down
6% organically. In a business with high
operating leverage, it is therefore highly
creditable that our team delivered an
Underlying EBITDA margin of 13.2%, a small
reduction of 20bps compared to 2023.
Focus on self-help
We maintained our focus on self-help
throughout the year, partially mitigating
the soft market conditions. We continued
to drive our commercial and operational
excellence programmes to streamline
processes, maximise efficiency
and enhance customer service and
expanded our presence in new markets
with the acquisitions of Eco-Asphalt and
Phoenix Surfacing.
Our surfacing business increased its
airfield maintenance presence, completing
high-profile projects for the Defence
Infrastructure Organisation and pulling
through a third of the GB Materials asphalt
volumes. Working in close collaboration
internally and with our customers we laid
36,000 tonnes of asphalt at RAF Leeming
in nine days.
We have built a strong brand in this
niche market, investing carefully in
mobile plant and technology to deliver
value and reliability for our customers.
Consequently, we have a healthy airfields
pipeline of DIO and commercial projects
with up to five years’ visibility.
Outlook
The market backdrop is stabilising and we
believe 2024 will prove to be a floor for
volumes, particularly in the event of a house
building recovery. We have continued to
invest through the cycle, maintaining close
customer relationships, ensuring that when
our end-markets return to growth, our
team, and the plant and machinery they
operate, are well-positioned to respond
efficiently and reliably.
water removed
tonnes of high
specification material
1.5m m3
13m
Expand and Improve at Shap
Shap quarry in Cumbria exemplifies the
virtuous cycle of our strategy to Expand and
Improve our business.
Shap joined the Group in 2020 through the
acquisition of the Cemex assets. At that
time, the site was flooded, the rail head was
inactive, and the quarry was loss-making.
With 13m tonnes of reserves and resources,
and a committed and entrepreneurial
team, the key ingredients to return Shap to
profitability were in place.
We removed 1.5m cubic metres of water,
revitalised the rail head through capital
investment and expanded the site team.
Shap now serves three key markets. Its hard
wearing Hornfels Hardstone is ideal for use
as rail ballast and is prized by Network Rail.
The material’s properties are ideally suited
for the Low Level Nuclear Waste Repository
at Drigg while the Carlisle Southern Relief
Road values the high skid resistance value of
the material on its high-speed route.
Through carefully targeted investment
coupled with operational and commercial
excellence, delivered by a local team
embedded in their community, we have
transformed Shap into a thriving, sustainable
and profitable operation.
Operating reviews Great Britain
Breedon Group plc Annual Report and Accounts 2024
33
Strategic report Governance Financial statements Additional information
Strong performance
Our business in Ireland delivered a strong
performance in 2024. RoI benefited from
positive market conditions driven by the
budget surplus and investment in housing
and infrastructure while the return of the
governing Assembly in NI contributed to an
improvement in sentiment.
Furthermore, actions taken in recent
years to restructure and rebrand our Irish
business, reinvigorate the leadership
team and enhance the contribution from
aggregates came to the fore during the year,
driving volume and enhancing profitability.
Aggregates-led
vertical integration
Increasing the supply of our own
mineral assets through our downstream
operations has been a strategic priority in
Ireland. In 2024 we once again enhanced
our contribution from aggregates by
recommissioning dormant quarries and
acquiring well-located assets.
We secured extensions at three existing
quarries, submitted plans for two new
strategically located asphalt plants
and a recycled asphalt planings hub,
and are preparing three new renewable
energy projects.
Aggregates
million tonnes
Asphalt
million tonnes
Ready-mixed concrete
million m3
Ireland
Ireland benefited from a healthy
economic backdrop, a stabilising
political landscape and self-help
to deliver a strong performance.
Highlights
Strong performance; positive market
conditions and self-help delivered
significant Underlying EBITDA margin
increase of 260bps.
Delivering strategic priorities; a new
quarry acquired, mineral assets
extended and planning secured for new
strategically located plants.
Active M&A pipeline and positive
market outlook.
2022
2023
2024
3.9
3.5
3.2
3.5
2.7
2021
2020
2022
2023
2024
0.9
1.0
1.0
1.1
1.0
2021
2020
2022
2023
2024
0.2
0.2
0.2
0.2
0.1
2021
2020
Revenue
(1)%
Underlying EBITDA
+16%
£233.4m
£41.5m
Operating reviews Ireland
Breedon Group plc Annual Report and Accounts 2024
34
Strategic report Governance Financial statements Additional information
Our sites are well positioned to serve
infrastructure projects across Ireland and
the steep rise in house building activity
benefited our operations in RoI. We
supplied high-profile infrastructure projects
such as the Celtic Interconnector and end-
uses such as high-speed road networks and
rail ballast, which require a specific high-
value aggregates specification that quarries
in our portfolio provide. Consequently,
aggregates volumes in Ireland increased
11%, or 8% on a like-for-like basis.
Since acquisition, our aggregates volumes
in Ireland have increased on average
by 9% per year.
In 2024 we tendered for c.600 road
maintenance schemes and delivered
multiple high-speed framework projects
and contracts for Dublin Airport.
In NI, although the political backdrop
stabilised, the phased return to work of the
civil service presented some challenges
in progressing the letting of framework
contracts, which in turn impacted activity
levels. This, together with a more structured
approach to the tendering of contracts,
led to 11% lower asphalt volumes in Ireland
across the year.
Enhancing profitability
Due to our leading market positions
and reputation for high-quality service,
pricing was sustained. Revenue was stable
at £233.4m (2023: £235.5m) or down 2%
on a like-for-like basis after adjusting for
the acquisition of Robinsons in May 2023.
Growing profitably is a guiding principle
of our strategy and we have continued to
review the optimal configuration of the
division. During 2024, we took further steps
to maximise profitability, increasing the
contribution from aggregate sales, reducing
headcount and selectively tendering
for projects.
These deliberate actions resulted in
Underlying EBITDA of £41.5m, an increase
of 16%, or 14% on an organic basis, and
delivered an Underlying EBITDA margin
of 17.8%, an increase of 260bps.
Outlook
The political and economic landscape in
RoI is supportive where the Government
operates a budget surplus and net inward
migration is driving population growth
and the need to invest in housing and
infrastructure. In NI, while sentiment has
improved, the economic outlook remains
less clear. There are a number of large
infrastructure projects coming to market in
2025 and we are well positioned to benefit.
Our M&A pipeline is well populated and
active discussions are ongoing.
reserves and resources
extended in 2024
prospective reserves
and resources
27mT
42mT
Extending our upstream
mineral reserves and resources
Extending our upstream footprint and
increasing the supply of our own mineral
assets through our downstream operations
has been a strategic priority since establishing
our second platform in Ireland in 2018.
In 2024 we once again extended our mineral
reserves and resources, adding a further 27m
tonnes during the year by recommissioning
dormant quarries, securing extensions
on three existing sites, with geological
reassessments across the portfolio. As a result
of our strategic intention, we have now tripled
our mineral asset base in Ireland since 2018.
Working closely with planning authorities
and local communities is essential to
expanding our mineral asset base.
Therefore, we have a programme of
applications at various stages of the
planning process and our mineral pipeline
has a further 42m tonnes of prospects.
In addition to securing upstream mineral
assets, our land and minerals team works
to develop our downstream operations.
In 2024 they secured consent on a new
recycled asphalt planings hub and
developed planning submissions for two
new strategically located asphalt plants
on existing sites and three new renewable
energy projects.
Operating reviews Ireland
Breedon Group plc Annual Report and Accounts 2024
35
Strategic report Governance Financial statements Additional information
Strategic milestone
In March 2024, we delivered a
transformational strategic objective.
Our third geographic platform was
established through the acquisition of
BMC which provides us with a solid
foundation for growth in the US
construction materials market.
BMC’s culture is closely aligned to
Breedon. Our entrepreneurial US team
are close to their local markets, operating
an aggregates-led vertically-integrated
model, pulling our own material through
our ready-mixed concrete plants. BMC is
a consolidator and has been built through
many transactions, with an ambitious
pipeline of target opportunities.
Encouraging initial
contribution
The integration of BMC has been completed
quickly and successfully and in its first ten
months under Breedon’s ownership, BMC
delivered an encouraging initial contribution
despite poor weather conditions in the final
quarter impacting volumes.
Due to the supportive level of underlying
demand and healthy backlogs, pricing
throughout the year was positive. BMC
contributed revenue of £132.5m and
Underlying EBITDA of £24.8m in the
period since 7 March.
Aggregates
million tonnes
Ready-mixed concrete
million m3
US
Our third geographic platform was
established through the acquisition
of BMC which provides us with a
solid foundation for growth in the US
construction materials market.
Highlights
Integration completed; the close cultural
alignment of BMC enabled integration to
be competed quickly and successfully.
Encouraging initial contribution;
supportive end-markets, healthy
backlogs and positive pricing delivered
an Underlying EBITDA margin of 18.7%.
First bolt-on transaction completed; well
populated M&A pipeline.
2022
2023
2024
2.2
2021
2020
2022
2023
2024
0.6
2021
2020
Revenue
Underlying EBITDA
£132.5m
£24.8m
Operating reviews US
Breedon Group plc Annual Report and Accounts 2024
36
Strategic report Governance Financial statements Additional information
Investing in integration
Underlying EBITDA margin of 18.7% absorbs
certain additional operating costs including
investment in improving health, safety and
wellbeing outcomes.
Home Safe and Well
Ensuring our colleagues return Home Safe
and Well each day is our highest priority.
While BMC had already committed to
improve its safety practices, following
completion we increased the emphasis on
safety culture, introducing new protocols
while investing in equipment and training to
enhance safety outcomes.
First bolt-on transaction
Our M&A pipeline is well populated, active
and focused on those states surrounding
Missouri that we define as the Midwest.
Since completing our entry to the US, we
are considered to be a credible acquirer,
and our expanded pipeline has been
complemented by inbound interest.
During October BMC completed its first
transaction under Breedon’s ownership,
acquiring a building products and masonry
manufacturer in Western Illinois. Building
Products is highly complementary
to our downstream products business
and generates revenue of c.US$9.0m
per annum.
Outlook
The economic and political backdrop in the
US is supportive. Residential construction is
underpinned by regional population growth
and urbanisation while infrastructure
and industrial end-markets have been
significantly under-invested and benefiting
from the recent introduction of new federal
and state funding programmes. Falling
interest rates and major infrastructure
projects should continue to support growth
in the future.
investment in
health and safety
fewer days lost
through injury
US$2m
80%
Home Safe and Well
Our people are our greatest asset and
promoting their welfare is one of our
highest priorities.
BMC had already implemented
improvements to its safety practices prior
to acquisition. As part of the integration
process we prioritised health and safety,
allocating US$2m of investment to
improve outcomes.
Firstly, we added safety performance
to the metrics that BMC leaders are
measured on. We expanded the health
and safety team, rolled out new safety
protocols and implemented weekly safety
performance reviews.
Our colleagues embraced the new
guidelines, adopting new personal
protective equipment standards.
They improved guarding and demarcation
around high-risk areas on site. Installing
cameras in our ready-mixed concrete
vehicles has allowed us to work with our
drivers to demonstrate good working
practices. We extended our healthcare
programme to all US employees, providing
additional access to medical benefits.
Changes were adopted swiftly with
immediate benefits. While the number of
reported incidents increased incrementally,
the severity reduced dramatically, cutting
the number of days lost to injury by 80%.
Operating reviews US
Breedon Group plc Annual Report and Accounts 2024
37
Strategic report Governance Financial statements Additional information
Strong performance delivered
by our committed team
The positivity and commitment of our
first-class team were exemplary in 2024
and they delivered a strong performance.
By adhering to our core strategic priority
to Improve and focusing on excellence,
they enabled Cement to deliver a
significant improvement in Underlying
EBITDA margin in the face of considerable
market headwinds and challenging
weather conditions.
Second half volumes stabilised
Infrastructure end-market demand
remained resilient in 2024. However, the
slow-down in house building in GB had
a material impact on cement demand,
resulting in a reduction in volume for the
division as a whole of 5% during the period.
Volumes for the division stabilised as
the year progressed and production in
the second half was comparable to that
achieved in the first half.
Cement
million tonnes
Cement
Our first-class team demonstrated
commitment and positivity, delivering
a strong performance in the face of
considerable market headwinds.
Highlights
Strong performance; our committed
team delivered record Underlying
EBITDA in the face of considerable
market headwinds.
Commercial excellence drives profitability;
resilient pricing and careful input cost
management delivered 300bps of
Underlying EBITDA margin expansion.
Investing in our future; carefully targeted
to reduce carbon emissions and secure the
long-term future of cement production.
2022
2023
2024
2.0
2.1
2.2
2.4
2.0
2021
2020
Revenue
(7)%
Underlying EBITDA
+4%
£309.2m
£88.2m
Commercial
excellence in action
With the cement market entering a third
year of declining volumes, ensuring we
provide the highest quality product, and
most reliable service, has never been more
important. Although the headline price of
cement reduced 1%, reflecting the removal
of carbon surcharges due to the lower cost
of carbon allowances, we remained agile
and close to our customers, enabling us to
progress underlying pricing.
We recorded revenue of £309.2m
(2023: £331.2m) during the period, a
decrease of 7%. Despite this, through
careful management of our cost base,
Underlying EBITDA increased 4% to £88.2m
(2023: £84.5m), expanding Underlying
EBITDA margin by 300bps to 28.5%.
Operating reviews Cement
Breedon Group plc Annual Report and Accounts 2024
38
Strategic report Governance Financial statements Additional information
Delivering operational
excellence
Both our plants operate at world-class
levels of kiln reliability, exceeding 94%
uptime due to our diligent monitoring
and proactive approach to planned
maintenance. While Hope sustained high
levels of performance, Kinnegad once
again improved its reliability. Planned kiln
maintenance completed on time and within
budget in all cases.
Kinnegad, the most modern plant in
Ireland, successfully trialled new materials
as alternative fuels. The team achieved
average fossil fuel replacement of 81%,
at times reaching 100% when feed stock
availability allowed. Hope continued to
increase the mix of alternative fuels enabling
Cement to achieve a combined rate of nearly
50% fossil fuel replacement.
Carefully targeted investment
During the year, Hope, the largest cement
plant in GB, progressed two major capital
improvement projects alongside its annual
programme of maintenance and capital
investments. The primary crusher was
replaced, having been in service since 1950.
The ARM project, which will enable the
import of secondary materials from our
Welsh Slate sites, approached its conclusion
ahead of commissioning in spring 2025.
At Kinnegad, the new 17MW solar farm
neared completion ahead of commissioning
in spring 2025. We commenced the
construction of a new bagging plant
adjacent to the existing site which will
begin operation in the first half of 2025 and
improve our competitive position in the
bagged cement market.
Outlook
The fortunes of the cement market are
influenced by the outlook for housing.
Housebuilding activity in RoI is accelerating
and, with a strong commitment from
the UK Government to unlock planning,
combined with falling interest rates and
improving affordability, we expect 2024
should represent a floor in construction
materials activity.
Operating reviews Cement
years of primary
crusher service
tonnes of mineral
processed
74
100m
Financial Framework; carefully targeted investment
Carefully targeted investment, directed by
diligent planning and rigorous monitoring,
enables us to maintain world-class reliability
while reducing our carbon footprint and
securing our future.
Annual proactive kiln maintenance
implements a tailored programme of repairs
to minimise unplanned outages.
Capital investment ensures the long-
term competitiveness and sustainability
of our operations.
At Hope, preparations to capture and store
our carbon emissions are progressing
through the pre-FEED stage. The ARM
project will enable the transport via rail
of low sulphur Welsh slate, a secondary
material that would otherwise be a waste
by-product. And after 74 years of service,
and processing over 100m tonnes of mineral,
we replaced the primary crusher.
By modernising and increasing our bagging
capacity at Kinnegad we will improve our
competitive position in a sought-after
product that is closely aligned to the rapid
pace of house building in RoI. And when the
new solar farm is commissioned it will deliver
c.20% of the plant’s energy requirements.
In combination, these projects will reduce
our carbon emissions and ensure the long-
term future of our Cement operations.
Breedon Group plc Annual Report and Accounts 2024
39
Strategic report Governance Financial statements Additional information
Link
Directors’ Remuneration report
»129
Underlying EBIT Is considered by the
Remuneration Committee as part of
determining the 2024 annual cash bonus.
For 2025, Underlying EBITDA will be
considered for annual cash bonus purposes.
Impacts vesting levels of our longer-term
performance share plans
Links to remuneration
Financial
Our financial KPIs are used to measure
progress against our strategy and act
as risk monitors.
A new financial KPI (Underlying EBITDA
margin) has been added to our metrics,
which calculates EBITDA as a percentage
of revenue. For all other measures, there
have been no changes to either the metrics
used as financial KPIs, or the calculation
methodology during the current year,
although earnings and dividend per share
measures have been restated for the impact
of the 5:1 share consolidation undertaken
during 2023.
Where a financial KPI is a non-statutory
measure of performance, a reconciliation
to the most directly related statutory
measure is provided in note 27 to the
consolidated financial statements.
* Comparative values for Earnings and Dividend per share measures have been restated to reflect the impact of the 5:1 share consolidation undertaken during the prior year.
Why we chose this measure
How we performed
ST
LT
Revenue
£m
This metric tracks the Group’s top-line
growth.
Revenue for the Group increased by
6%, supported by our entry into the US.
On a like-for-like basis, revenue was
down 5%, being adversely impacted by
macroeconomic uncertainty and adverse
weather conditions.
2020
2021
2022
2023
2024
1,576.3
1,487.5
1,396.3
1,232.5
928.7
Underlying
EBIT margin
%
This metric tracks changes in the relative
profitability of the Group.
Underlying EBIT margin increased driven
by the BMC acquisition as well as careful
cost control and operational excellence
measures across our business.
ST
2020
2021
2022
2023
2024
11.0
10.5
11.1
10.8
8.2
Adjusted
Underlying
Basic EPS*
pence
This metric tracks changes in
adjusted Underlying Basic EPS
for our shareholders.
Adjusted Underlying Basic EPS increased
marginally from 34.0p in 2023 to 34.4p
in 2024.
LT
2020
2021
2022
2023
2024
34.4
34.0
35.4
29.9
15.9
Dividend
per share*
pence
This metric tracks cash returned to
shareholders through dividends.
Dividend has increased by 7%, slightly
ahead of our target payout ratio of 40%.
2022
2023
2024
14.5
13.5
10.5
8.0
2020
2021
Covenant
Leverage
times
This is a key credit metric for our providers
of debt finance which tracks the ability of
the Group to maintain sufficient liquidity
to service the needs of the business and
determines the margin payable on our
revolving credit facility.
Covenant Leverage of 1.4 times is an
increase on the prior year, driven by the
acquisition of BMC Enterprises Inc. in
March 2024.
2022
2023
2024
1.4
0.5
0.7
0.8
1.9
2020
2021
Return on
invested capital
%
This metric tracks how well the
Group generates returns in relation
to the average capital invested.
ROIC decreased as a result of short
term dilution from the BMC acquisition
combined with the impact of increased
corporate tax rates.
2020
2021
2022
2023
2024
9.0
9.9
10.8
9.5
5.5
Free Cash Flow
conversion
%
This metric tracks the conversion of
Underlying EBITDA into Free Cash Flow,
which is a key indicator that
the Group is able to generate
sufficient cash to support its
capital allocation priorities.
Free Cash Flow conversion increased
from 39% in 2023 to 42% in 2024, just
behind our medium term target of 45%.
2022
2023
2024
42
39
29
59
94
2020
2021
Underlying
EBITDA
margin
%
This metric tracks EBITDA as a percentage
of revenue and illustrates operating
profitability as a percentage of total
revenue.
Underlying EBITDA margin was strong at
17.1% for the year (2023: 16.3%), supported
by the BMC acquisition as well as robust
cost control and operational self-help
measures across our business.
2020
2021
2022
2023
2024
17.1
16.3
16.8
17.4
16.1
ST
Key performance indicators
Breedon Group plc Annual Report and Accounts 2024
40
Strategic report Governance Financial statements Additional information
Non-financial
and sustainability
Our non-financial and sustainability KPIs
are used to measure progress against our
strategy and act as risk monitors.
There have been no changes to either
the metrics used as non-financial and
sustainability KPIs nor the calculation
methodology during the current year.
We have made good progress on our
2030 sustainability targets and we have
upgraded our level of ambition. From 2025
we will report against new metrics to track
our upgraded 2030 sustainability targets.
For further information on sustainability,
including details of our new targets
established for 2025, see our Taskforce
on Climate-Related Financial Disclosures
(TCFD) report from page 59 and the
Sustainability report from page 69.
Combined
LTIFR
per million
hours worked
(employee and
contractor)
This industry-standard metric tracks
our health and safety performance and
enables us to maintain a strong health and
safety culture.
Our combined LTIFR performance
reflects a 6% improvement against 2023.
This was due, in part, to a reduction in
employee lost time incidents in 2024.
Note: The 2020 figure has been corrected
following a reporting error in 2023.
Combined
TIFR
per million
hours worked
(employee and
contractor)
Reserves and
resources
billion tonnes
Emissions
intensity –
Revenue
kgCO2e per
£ revenue
This is a wider measure of our health and
safety performance, which indicates the
total injury frequency rate of the Group
across our own colleagues and also the
contractors working on our behalf.
We have seen a 4% increase in the
combined TIFR in 2024. Contractor
TIFR will be a specific area of focus
for us in 2025.
This metric tracks the level of reserves and
resources available to the Group.
We increased our asset base to
1.4 billion tonnes, an extra 0.4 billion
tonnes since the previous year, driven
by the addition of BMC to the Group.
At current volumes, this equates to around
47 years of production.
This is a reporting requirement of the UK
Government’s SECR regime which tracks
our overall carbon intensity and has been
reported by the Group since 2019.
Our total location-based emissions for
this period were 1.6MtCO2e, a decrease of
4% in comparison to 2023. The resultant
emissions intensity is 1.0 kgCO2e/£
revenue, a reduction of 9% in comparison
to 2023.
Emissions
intensity –
Cementitious*
reduction per tonne
from 2005 baseline
People
positively
impacted*
number of people
per year
Sustainable
product sales*
total concrete and
asphalt revenue
This tracks the progress in decarbonising
our cement production and aligns with our
2030 target to achieve a 30% reduction
in gross carbon intensity per tonne of
cementitious product.
From our 2005 baseline we have
maintained a 24% reduction to date,
against a 30% target for 2030.
This is a key measure of social value and
aligns with our 2030 target to positively
impact 100,000 people.
We increased the number of people
positively impacted during the year by a
further 27,268, bringing the cumulative
number to date up to 82,052, achieving
82% of our 2030 target.
This tracks our success in increasing
our sales of sustainable products and
aligns with our 2030 target to achieve
50% of our concrete and asphalt sales
revenue from products with enhanced
sustainability attributes.
We achieved 48% of our concrete
and asphalt sales revenue from products
with enhanced sustainability attributes.
This compares to 40% in 2023 and reflects
an increased adoption of CEM II cement
and warm-mix asphalt.
ST
ST
Directors’ Remuneration report
»129
Considered by the Remuneration Committee
as part of determining the annual cash bonus
Impacts vesting levels of our longer-term
performance share plans
Links to remuneration
ST
LT
2022
2023
2024
3.3
3.5
3.1
3.1
3.0
2020
2021
2022
2023
2024
17.7
17.0
17.2
19.8
18.0
2020
2021
2022
2023
2024
1.4
1.0
1.0
1.0
1.0
2020
2021
2022
2023
2024
1.0
1.1
1.3
1.6
1.7
2020
2021
2022
2023
2024
24%
24%
23%
23%
2020
2021
2020
2021
2022
2023
2024
27,268
25,856
17,814
11,114
2022
2023
2024
48%
40%
37%
25%
2020
2021
Link
Why we chose this measure
How we performed
ST
* These metrics will change from 2025
Key performance indicators
Breedon Group plc Annual Report and Accounts 2024
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Chief Financial Officer’s review
Breedon delivered a
resilient performance
in 2024 despite
challenging market
conditions.
James Brotherton
Chief Financial Officer
Revenue and Underlying EBITDA
2024
2023
Revenue
£m
Underlying
EBITDA*
£m
Revenue
£m
Underlying
EBITDA*
£m
Great Britain
997.4
131.9
1,033.8
138.6
Ireland
233.4
41.5
235.5
35.9
United States
132.5
24.8
–
-
Cement
309.2
88.2
331.2
84.5
Central administration
–
(16.5)
–
(16.7)
Eliminations
(96.2)
–
(113.0)
–
Total
1,576.3
269.9
1,487.5
242.3
* Underlying results are stated before acquisition–related expenses, property gains/losses, redundancy and reorganisation
costs, amortisation of acquired intangibles, unamortised banking arrangement fee and related tax items. The prior year
also included the costs associated with the Group’s move from the AIM to Main Market.
Breedon delivered a further year of
balanced financial performance during
2024 with robust pricing and a focus on
operational excellence more than offsetting
the impact of a challenging GB market.
Revenue for the Group increased by 6%
to £1,576.3m (2023: £1,487.5m), supported
by our entry into the US and price
actions. Like-for-like Revenue for the year
decreased 5% (2023: increase of 4%) with
6% of the decrease due to lower volumes,
partially offset by a 2% favourable impact
from price.
Revenue growth in the year was more
weighted to the second half increasing
by 3% in the first six months and 9% in the
second when compared with the equivalent
periods in 2023. The second half benefited
from a full contribution from BMC and
a modest improvement in GB trading
conditions compared with 2023.
Underlying EBITDA increased by 11% to
£269.9m (2023: £242.3m), helped by good
cost control and operational self-help
measures across each of the divisions.
The Group’s Underlying EBITDA margin
for the year increased to 17.1% (2023: 16.3%),
assisted by the higher margins generated
in BMC and the significantly improved
margin in Ireland. Our Underlying EBITDA
margin is now only slightly below our
threshold target of 17.5%.
On a statutory basis, Group profit from
operations of £149.6m increased by £3.9m
from £145.7m in 2023.
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Chief Financial Officer’s review
Impact of acquisitions
In addition to the acquisition of BMC for an
enterprise value of US$300m during 2024,
we also completed three smaller bolt-on
transactions for an aggregate enterprise
value of £28.8m (2023: three transactions;
aggregate enterprise value £22.0m).
In the ten month period under our ownership
BMC contributed £132.5m to revenue
and £24.8m to Underlying EBITDA. The
incremental impact of the other bolt on
acquisitions completed in 2023 and 2024
was a contribution to revenue of £26.7m and
to Underlying EBITDA of £2.7m in the year.
Joint ventures
Our share of profit from our associate and
joint ventures was higher at £3.5m (2023:
£2.6m), helped by a stronger performance
in 2024 from BEAR Scotland.
Interest
Finance costs in the year increased to
£25.4m (2023: £13.9m) principally due to
interest payable on the additional debt
drawn to fund the acquisition of BMC
together with the write off of capitalised
fees relating to the Group’s previous RCF
that was refinanced in the year.
Non-underlying items
There were £24.1m (2023: £10.5m) of non-
underlying items which impacted profit
from operations during the period. Key
components included £10.2m (2023: £0.9m)
of acquisition-related expenses, and £12.5m
(2023: £6.0m) amortisation of acquired
intangibles. Redundancy and reorganisation
costs of £1.3m (2023: £nil ) relate to
an operational efficiency programme
implemented in response to trading
conditions in some of our markets.
Tax
The Group recorded an Underlying tax
charge of £32.7m (2023: £29.5m) at an
effective rate of 21.7% (2023: 20.4%).
The change in the effective rate is due to
increases in the statutory UK corporation tax
rate combined with the evolving geographic
distribution of the Group’s trading activities.
The statutory tax charge, calculated relative
to statutory profit before tax and inclusive
of deferred tax rate changes, was £29.1m
(2023: £28.8m); equivalent to an effective
tax rate of 23.2% (2023: 21.4%).
From 1 January 2024, the Group falls
within the scope of the Pillar Two Model
Rules (Pillar Two). The impact of Pillar Two
is limited to the Group’s taxable profits
generated in the Republic of Ireland, where
the tax rate is 12.5%, resulting in a top up
charge of £0.6m that has been recorded
in the income statement.
Earnings per share
Statutory Basic EPS decreased to 28.1p
(2023: 31.1p) primarily due to the significant
non-underlying expenses recognised in
the period and Adjusted Underlying Basic
Earnings per Share increased fractionally to
34.4p (2023: 34.0p). The acquisition of BMC
is estimated to have been accretive to 2024
Adjusted Underlying Basic Earnings per
Share by c.2%; around twelve months ahead
of schedule.
The Group has no significant dilutive
instruments, and diluted EPS measures
closely track non-diluted measures for
both the current and prior year.
Return on invested capital
Post-tax ROIC was lower in 2024 at 9.0%
(2023: 9.9%). ROIC was impacted by the GB
trading performance, short-term dilution
from the BMC acquisition and the structural
impact of increased corporate tax rates.
We remain confident in our ability to deliver
a ROIC ahead of our target of 10% in the
medium term once volumes in our key
markets recover.
Statement of financial position
Net assets at 31 December 2024 were
£1,170.6m (2023: £1,110.7m). Increases in
total assets of £2,114.0m (2023: £1,872.8m)
and total liabilities £943.4m (2023: £762.1m)
were principally driven by the acquisition
of BMC which was predominantly cash and
debt funded.
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Like-for-like reflects reported volumes adjusted for the impact of acquisitions and disposals.
Refer to page 196.
Chief Financial Officer’s review
Impairment review
We completed our annual impairment
review of cash generating units containing
goodwill and retain comfortable levels
of headroom relative to the carrying value
of our asset base. As well as our continued
consideration of the impacts of climate
change on impairment testing; in light of
the ongoing challenging market conditions
in GB we applied further sensitivities to our
GB forecasts. The Directors remain of the
view that there are no reasonably possible
changes to assumptions which would result
in an impairment charge being recognised.
Input cost and hedging strategy
Our strategy in the UK and RoI is to hedge
substantially all energy and carbon
requirements for at least one year in
advance, with further layered purchases
extending into future years, to deliver
near-term cost certainty particularly for our
cement plants. Our US business does not
include a cement plant and so its energy
requirements are materially lower than the
UK and Ireland.
A proportion of our bitumen requirements
are hedged in the short-term, typically
for those larger contracts where pricing
is agreed up front. Our remaining bitumen
purchases are made at spot as are
purchases of other fuels.
Year-on-year change in volumes
Aggregates
Asphalt
Concrete
Cement
2022
2023
2024
27.3
25.7
26.3
29.2
21.7
2021
2020
Free Cash Flow
Free Cash Flow before major capital
investment projects was £114.1m (2023:
£94.8m). In 2024 material capital investment
projects totalled £23.4m (2023: £nil) and
comprised three projects consisting of the
ARM and primary crusher projects at Hope
and the solar farm at Kinnegad.
Working capital management remained
disciplined and meant that our Free Cash
Flow conversion rate (Free Cash Flow
as a percentage of Underlying EBITDA)
improved to 42%, just behind our medium-
term target of 45%.
In total, net capital expenditure increased
by £22.2m to £125.6m (2023: £103.4m)
comprising capital investment of £131.3m
(2023: £106.8m), offset by £5.7m of proceeds
from specific asset disposals (2023: £3.4m).
This represents around 132% of the Group’s
depreciation charge and demonstrates
our commitment to use investment as a
differentiator for Breedon through the cycle.
Over the last five years, average Free Cash
Flow conversion has been 53%.
million tonnes
million tonnes
million m3
million tonnes
+6%
(4)%
+11%
(5)%
vs 2023
vs 2023
vs 2023
vs 2023
4 year CAGR
4 year CAGR
4 year CAGR
4 year CAGR
+6%
+3%
+6%
+0%
(3)%
(5)%
(11)%
(5)%
like-for-like
like-for-like
like-for-like
like-for-like
2022
2023
2024
3.6
3.8
3.8
4.1
3.3
2021
2020
2022
2023
2024
3.3
2.9
3.0
3.3
2.6
2021
2020
2022
2023
2024
2.0
2.1
2.2
2.4
2.0
2021
2020
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Chief Financial Officer’s review
Net Debt
Net debt increased by £235.4m to £405.3m
as at 31 December 2024 (2023: £169.9m),
with the increase largely driven by the
acquisition of BMC which was principally
funded through our existing debt facilities
and use of surplus cash balances.
Net Debt includes IFRS 16 lease liabilities
of £48.7m (2023: £48.0m). Covenant
Leverage at the year-end was 1.4x (2023:
0.5x), well within our target range of
1x to 2x and 0.2x lower than reported
at the half year.
Refinancing of
borrowing facilities
During the year, the Group completed the
refinancing of its RCF, increasing the facility
size from £350m to £400m and retaining
the option of a further £100m accordion.
The amended facility secures access to
longer-term finance, running for an initial
four-year period to at least July 2028, and
offers an incremental reduction in ongoing
debt service costs.
Fees and expenses capitalised in
connection with the refinancing amounted
to £2.3m and will be amortised over the
amended life of the facility. Capitalised fees
of £1.3m relating to the previous facility have
been expensed to the income statement as
a non-underlying interest cost.
£ million
2024 net debt movement
(169.9)
269.9
(16.6)
(17.6)
(24.0)
(102.2)
(271.6)
(48.3)
(6.2)
(23.4)
(405.3)
(356.6)
48.7
Closing
Net Debt
(excluding
IFRS 16)
IFRS 16
Closing
Net Debt
Other
Dividends
paid
Acquisitions
Other
operating
cash flow
Net capital
expenditure
(excluding
major capital
projects)
Tax
Interest
Working
capital and
provisions
Underlying
EBITDA
Opening
Net Debt
0
4.6
Major capital
projects
Free cash flow excludes the impact of major capital projects undertaken in the year. The major capital projects undertaken during 2024 were the ARM project
and the primary crusher replacement and the solar farm investment, all within the Cement division.
Inflow
Outflow
Free Cash Flow +£114.1 million
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Chief Financial Officer’s review
The remaining facilities available to the
Group comprise the £250m USPP, issued in
2021, which provides long-term financing
at low fixed interest rates with an average
fixed coupon of approximately 2%. At 31
December 2024 the USPP comprised
£170m sterling and £80m drawn in euro,
with a maturity profile between 2028 and
2036. Our borrowing facilities are subject
to leverage and interest cover covenants
which are tested half-yearly, and we
remained fully compliant with all covenants
during the year.
The Group maintains a strong liquidity
position and at 31 December 2024 had total
available liquidity of over £275m comprising
undrawn borrowing facilities of over £250m
together with cash and cash equivalents
of £28.9m.
Subsequent to the year end, the Group
issued an additional €95m under its USPP
loan note programme. The proceeds from
the issuance were used to pay down its
existing RCF balances, increasing the level
of committed funds available for drawing
under the RCF. The notes have maturities of
between five and seven years, with a fixed
interest rate of approximately 4%.
Dividend
Subject to shareholder approval at the
AGM, we intend to pay an increased total
dividend in respect of the 2024 financial
results of 14.5p (2023: 13.5p).
An interim dividend of 4.5p (2023: 4.0p)
was paid on 1 November 2024 and, a final
dividend of 10.0p per ordinary share will
be paid on 16 May 2025 to shareholders
who are on the Register of Members at the
close of business on 4 April 2025. The ex-
dividend date is 3 April 2025. The latest date
for registering for the Company’s DRIP is
22 April 2025, further details of how to join
the DRIP are available on the Company’s
website.
This delivers a payout ratio of 42% (2023:
40%) of Adjusted Underlying Basic EPS,
slightly ahead of our committed target
payout ratio. Since starting to pay a
dividend in 2021, we have declared nearly
£160m of cash dividends to shareholders.
Dividends are recorded in the financial
statements of the accounting period in
which they are declared. Accordingly
dividend payments to Breedon Group
shareholders amounting to £48.1m (2023:
£37.3m) have been recognised in the 2024
financial statements.
Tax strategy
Breedon’s tax strategy governs our
approach to tax compliance, and is
underpinned by the following principles:
To comply with all relevant tax
regulations.
To ensure ethical tax practice is
maintained and tax planning is
undertaken responsibly.
To engage proactively and transparently
with relevant tax authorities.
To manage tax risks effectively and
maintain a high standard of tax
governance.
Our tax strategy is reviewed periodically
by the Audit & Risk Committee on behalf
of the Board.
During the year we complied with our
stated tax strategy and we made a
significant contribution to the economies
in which we operate through payments
of taxation. In 2024 the total taxes borne
or collected by the Group amounted to
c. £200m (2023: c. £210m).
The strategy is kept under review
by the Audit & Risk Committee
on behalf of the Board. Click or scan
to find out more.
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Chief Financial Officer’s review
Capital allocation
Conservative and disciplined financial
management and the maintenance of a strong
balance sheet are at the core of our thoughtful
approach to capital allocation. The Board
will always seek to deploy the Group’s capital
responsibly, focusing on organic investment
in our business to ensure that our asset base is
well-invested.
We will look to pursue further selective
acquisitions which will accelerate our strategic
development and that we are confident will
create long-term value. This conservative
approach to financial management
enables us to pursue capital growth for our
shareholders through active development
of our business, while supporting our
progressive dividend policy.
James Brotherton
Chief Financial Officer
5 March 2025
Maximise value through
capital deployment
Proactive
Investment
Meeting strategic
objectives
Excess
capital
Thoughtful capital
deployment
ORGANIC
M&A
1.4x
42%
Payout ratio
Covenant Leverage
Our capital allocation model
Investment as a differentiator
Reserves and resources replenished
Dividends
Debt reduction since
half year
Third platform launched
Returns on capital
Strong balance sheet
Productivity enhancing investment
Three major capital projects
Three bolt-on transactions
Transformational – BMC acquired
7%
Increase Y0Y
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Effective risk
management is
fundamental to the
successful delivery
of our strategy
Managing our risks and opportunities
‘Four lines of defence’ risk management
and internal control framework
Our framework utilises a ‘four lines of defence’ approach, with roles and responsibilities
defined as set out below.
Board
Overall responsibility for the Group’s risk
management and internal control framework,
and for reviewing effectiveness. The CFO has
executive management responsibility for risk and
internal control.
Senior management and risk owners
Ensure that the risk management and internal control
framework is embedded within their respective
business area and develop an effective risk culture.
Front line teams
Any Breedon colleague
who makes decisions, deploys
resources or contributes
to an outcome is responsible
for identifying associated risks
and implementing internal
processes and controls to
manage those risks.
Group Risk & Controls
Provides expertise and
support to the front line teams
responsible for designing the risk
management policies, processes
and controls, monitoring the
ongoing effectiveness of internal
controls and the reporting of risk
across the Group.
Other monitoring functions
Responsible for designing policies
and processes and monitoring
the effectiveness of processes
and controls, for their area of
accountability.
Internal audit
Responsible for providing
independent assurance over
risk and control activities
performed by the first and
second lines of defence.
External audit and regulators
Audit & Risk Committee
Reviews the suitability and effectiveness of the risk
management and internal control framework on
behalf of the Board. Performance by the business
against risk appetite is monitored and reported
to the Audit & Risk Committee. The Committee
monitors the effectiveness and independence
of the internal and external auditors.
LINES OF DEFENCE
1
4
2
3
Our risk framework
Risk is an inherent and accepted element of doing business,
and effective risk management is fundamental to how
we run our business. Our risk management framework
facilitates the identification, assessment and mitigation
of risks to an acceptable level, enabling us to make informed
decisions and deliver our strategic priorities.
Breedon Group plc Annual Report and Accounts 2024
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Risk identification, assessment
and monitoring
Our management teams assess the
likelihood and potential impact of key risks
against a risk matrix containing a range
of both quantitative and qualitative factors
for consideration.
Once identified and assessed, risks
are assigned to a member of senior
management who is accountable for
ensuring appropriate processes and
controls are implemented to mitigate that
risk to within the level of appetite set by the
Board, which may include the transfer of
risk through insurance.
Risks are assessed both before and after the
impact of these mitigations and recorded
on risk registers which are held for each
division and central function.
Risk registers are monitored and signed
off by management. The Head of Risk and
Control reviews the registers and identifies
the most significant risks for inclusion on the
Group risk register. The Group risk register
consolidates risks by principal areas and is
reviewed at least twice a year by both the
Executive Committee and the Board. Post
mitigation ‘net risk’ is reported within the
principal risk table on pages 51 to 57.
Risk assurance and reporting
The second-line Group Risk and Controls
team undertake various process reviews
throughout the year, including testing
of compliance with the Group Financial
Controls framework, to provide assurance
over the divisional self-certification process.
Our Internal Audit function undertakes a
number of independent reviews across our
principal risk areas to provide assurance
over the effectiveness of key controls. These
reviews are agreed annually in advance with
the Audit & Risk Committee at the point of
approval of the Internal Audit plan, although
there is opportunity throughout the year to
make amendments to the plan should this
be required.
Findings resulting from these reviews are
reported throughout the year to the Audit
& Risk Committee along with the actions
that have been agreed with management.
Progress with previously agreed mitigating
actions is monitored throughout the year
by the Group Risk and Controls team and
validated by Internal Audit, with formal
progress updates provided to the Audit &
Risk Committee.
Managing our risks and opportunities
Risk appetite
The level of risk accepted in pursuit of
our strategic goals is guided by our risk
appetite, which is set by the Board and
reviewed on an annual basis. This provides
clear guidance to management as to the
level of risk the Board considers acceptable
and sets appropriate boundaries for
business activities and behaviours.
The following appetite statements are
used to describe the level of risk the Board
is prepared to take across each of the
principal risk areas.
Averse
We have little appetite for risk and will seek
to apply more controls to minimise our
exposure and avoid uncertainty.
Cautious
We have an appetite for some risk, however
prefer options that have a low degree
of downside.
Open
We are open to taking considered risks
and will choose options that offer an
acceptable level of reward with a greater
likelihood of success.
Seeking
We are willing to take proactive risks and
be more innovative to pursue strategic
opportunities and achieve higher returns,
despite the higher inherent risks. The costs
and benefits of the increased risk accepted
must be fully understood and measures to
mitigate or transfer the risk established.
Risk categorisation
Our risk review processes apply a common
methodology across the Group for
identifying and assessing risk. Principal
risks are categorised as either Strategic,
Operational or Financial. Compliance risks
span all three categories. The categories are
defined as:
Strategic risks
Events that may make it difficult, or even
impossible, for the Group to achieve its
strategic objectives.
Operational risks
Events or threats that are inherent in our
day-to-day operations.
Financial risks
Threats arising from ineffective
management and control of the Group’s
financial resources or movements in the
financial markets.
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Risk velocity
Risk velocity is defined as the time elapsing
between an event occurring which
crystalises a risk and the point at which
Breedon would be impacted. Risk velocity is
expressed in days, weeks, months or years.
2024 priorities
Throughout 2024 the Group Risk and
Controls team:
implemented an internal controls
compliance tool to facilitate the
storing of controls evidence, automate
workflows, track completion of control
activities and provide greater ‘real-time’
reporting capabilities;
defined the Group’s material controls in
preparation for Provision 29 of the 2024
UK Corporate Governance Code, which
requires boards to make a declaration
over the effectiveness of their material
internal controls;
further developed the Group’s Fraud
risk management framework, with the
implementation of an overarching fraud
policy and fraud risk assessment; and
worked closely with BMC management
to establish the Group’s risk
management and internal control
processes in BMC.
Areas of focus for 2025
Our key areas of focus for 2025 include:
the development of our assurance
plan to test the design and operating
effectiveness of the Group’s material
controls in readiness for Provision
29 of the 2024 UK Corporate
Governance Code; and
development and implementation
of our assurance plan for BMC.
Managing our risks and opportunities
Image TBC
Case study
Following the acquisition of BMC in March
2024, the Group’s risk universe now extends
into the United States.
As part of the integration team, the Group
Risk and Controls team has worked closely
with BMC management to establish the
Group’s risk management and internal control
processes in BMC, embedding a common
standard across Breedon.
Our immediate priorities following the
acquisition were to bring BMC’s cyber
risk management processes under the
supervision of our Information Security team
and to embed the Group’s Risk Management
Framework. A detailed exercise was
undertaken to identify and quantify risks
and opportunities, along with their associated
mitigations, which has been used to inform
our Principal Risk reporting.
This included a full financial statement risk
assessment, providing the foundation to roll
out the Group’s Financial Controls Framework.
Our subsequent walkthroughs of those
processes for which risks were identified
allowed us to identify and assess the design
of the effectiveness of the controls in place,
with any gaps relative to our control standard
subject to remediation plans.
This has set a baseline from which to develop
our assurance plan, with BMC now within the
scope of our internal audit function with a
number of reviews scheduled during 2025.
Risks and
Controls in
the US…
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Principal risks
Risk
Summary
Appetite
Net risk
rating
Velocity
Trend
1 Acquisitions and material
capital projects
Our ability to complete the acquisitions and strategic
projects required to deliver our growth strategy.
SEEKING
MEDIUM
YEARS
2 Climate change
The transitional and physical risks arising from climate
change as we decarbonise our business.
OPEN
VERY HIGH
YEARS
3 Markets
The impact of the macroeconomic environment on our
business.
OPEN
HIGH
MONTHS
4 Land and mineral
management
Managing mineral reserves to deliver our growth
strategy; ensuring compliance with planning and
environmental regulations.
CAUTIOUS
MEDIUM
YEARS
5 People
The successful recruitment, development and
retention of our people.
CAUTIOUS
MEDIUM
YEARS
6 Competition
The impact of our competitors on our market share
and profitability.
OPEN
HIGH
MONTHS
7 Failure of a critical asset
The risk of unplanned downtime or operational
inefficiency at our critical operating locations.
AVERSE
HIGH
DAYS
8 Health and safety
Ensuring our employees and other stakeholders return
Home Safe and Well.
AVERSE
HIGH
DAYS
9 IT and cyber security
The impact of a cyber security incident or a lack of
resilience in our technology infrastructure.
AVERSE
HIGH
DAYS
10 Laws, regulations
and governance
Our ability to comply with all applicable laws,
regulations and principles of corporate governance.
AVERSE
MEDIUM
DAYS
11 Supply chain and
input costs
Managing input costs volatility and supply chain risk.
OPEN
MEDIUM
MONTHS
12 Treasury
Our ability to secure access to the capital needed to
deliver our growth strategy and to manage the impact
of interest and currency rates.
CAUTIOUS
LOW
YEARS
Strategic
Operational
Financial
Our principal
risks are the most
significant risks
that might
adversely impact
the Group
The principal risks and uncertainties
outlined in this section reflect those risks
that, in the opinion of the Board, might
materially affect the Group’s future
performance, prospects or reputation.
The assessment of these principal and
emerging risks and the effectiveness of
the associated controls put in place reflect
management’s current expectations,
forecasts and assumptions, and will be
subject to changes in our internal and
external environments.
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Principal risks
Risk context
How this risk could impact us
Mitigations
Trend
Velocity
STRATEGIC RISKS
1 Acquisitions and material capital projects
YEARS
Our growth strategy is predicated on
continued successful execution and
integration of M&A and delivery of major
capital investment projects. These come with
higher levels of inherent risk compared to
‘business as usual’ operations.
If we do not identify suitable acquisition
targets which meet our stringent criteria on
quality, price and sustainability, we could
not execute the inorganic element of our
growth strategy.
Failure to integrate acquisitions successfully,
including delivering expected synergies,
could result in lower returns on capital.
Competition authorities may restrict the
businesses we are able to acquire.
If capital projects overrun in either cost or
time, these could fail to deliver expected
benefits and cause business disruption.
Acquisitions are subject to rigorous
due diligence and approval processes,
supported by specialist advisers, and
include careful consideration of competition
regulation and sustainability.
Material capital projects and business
integrations are subject to detailed project
plans, implemented by dedicated teams and
with progress monitored by the Board.
No significant change
to risk profile in 2024.
The integration of
BMC is complete
and performance is
encouraging.
We have a steady
pipeline of
opportunities and will
continue to pursue
transactions across all
three platforms.
Although it is possible
for a failed acquisition
or capital project
to have a more
immediate impact, this
risk is most likely to
impact over a number
of years, reflecting the
longer-term nature of
our growth strategy.
2 Climate change
YEARS
Climate change poses a significant challenge
to our business and our response to climate
risks and opportunities forms a critical pillar of
our strategy.
Cement manufacturing in particular emits
significant amounts of carbon, with emissions
hard to abate due to the majority of carbon
being released through chemical reactions
during the manufacturing process. Delivering
on our commitment to achieve net zero by
2050 will require significant capital investment
and the development of technology which has
not yet been proven commercially at scale.
If we do not successfully decarbonise
our business in line with our targets and
the wider industry we may be exposed to
significant additional costs and reduced
demand for our products.
We may experience operational disruption
due to the physical impacts of climate
change.
Full details of physical and transitional risks
and mitigations are provided in our TCFD
reporting on pages 59 to66.
We have committed to near term and net
zero targets and these have been validated
by the SBTi. We are transparent in reporting
our progress against these and senior
management remuneration is structured to
incentivise delivery.
We have appropriate sustainability
governance structures and processes,
overseen by the Board with support from
external specialists where appropriate.
Full details of physical and transitional risks
and mitigations are provided in our TCFD
reporting on pages 59 to 66.
No significant change
to risk profile in 2024.
This risk is most
likely to impact
over the medium
term, as physical
impacts are slow to
materialise in our
trading geographies
and the level of
decarbonisation in
any one year is less
significant than the
multi-year trend.
Principal risks
Net risk rating
Low
Medium
High
Very high
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Principal risks
Risk context
How this risk could impact us
Mitigations
Trend
Velocity
STRATEGIC RISKS
3 Markets
MONTHS
Demand for our products is well diversified
across the public and private sectors, and
our products are supplied into a variety of
infrastructure, residential and commercial
projects. Although the medium to long-term
prospects remain positive for our industry,
our markets are cyclical and in particular
are influenced by the level of government
infrastructure spending.
We accept the risk of operating in these
markets, however to succeed our operating
model has to combine resilience during market
downturns with the strategic flexibility to meet
demand when markets are growing.
Macroeconomic factors or changes in
government policy could reduce demand
for our products, impacting our profitability.
The market trends which impact our sales
also impact our customers, and so may
increase our exposure to credit risk.
We closely follow published indicators of
activity in our geographies and sectors
and maintain regular contact with our key
stakeholders to identify significant trends or
events which could impact our business.
Our budgeting and forecasting processes
provide up-to-date financial information
which allows us to adapt our plans
accordingly.
Credit risk insurance cover is maintained
over the majority of our private sector
customers.
Although the GB
market remains
challenging, we are
seeing improvement
and the outlook is
encouraging for
both the GB and
Ireland markets.
BMC reduces the
risk by increasing the
Group’s geographical
diversification with
a third platform in a
growing economy.
Market downturns
usually impact
within months as our
customers complete
their existing projects
which are replaced
with lower levels of
new work.
4 Land and mineral management
YEARS
Minerals are the life blood of our business and
we extract significant volumes each year to be
sold as aggregates or fed into our downstream
manufacturing processes.
Securing new reserves organically has a
significant lead time from the agreement of a
land deal through to the granting of planning
permission; meaning our Land & Minerals
teams need to plan for the long-term to ensure
continuity of production.
Once reserves are secured it is crucial that
we comply with environmental regulation,
planning restrictions and permits to ensure we
can continue to operate the sites. When a site is
no longer operational, we are required to fulfil
our restoration obligations.
If we fail to replenish our mineral reserves
and resources over time, we will be
deprived of our critical raw material,
disrupting operations and reducing the
value of our business.
If we fail to measure our existing reserves
and resources accurately, we may operate
our quarries inefficiently.
Failure to comply with planning
requirements or to obtain new or extended
permissions at a quarry or plant could
prevent the business from operating
facilities or extracting its mineral reserves.
A compliance breach could incur significant
remediation costs and impact our licence to
operate that site and ability to secure new
mineral reserves.
The costs to fulfil our restoration obligation
at end of quarry life may increase by
more than we have forecast, resulting in
additional costs.
Our Land & Minerals team supports our
businesses in obtaining additional mineral
reserves and resources, providing in-house
expertise through the lifecycle of our
quarries and plants.
We monitor our mineral assets to assess
both the quality and the longevity of our
resources, with the aid of external experts.
We proactively monitor environmental
compliance, including restoration plans,
and have policies in place setting clear
expectations on how we should manage
our environmental impact. These are
communicated to our people through
training programmes.
No significant change
to risk profile in 2024.
Absent a material
compliance breach
which could have an
immediate impact for
the site involved, this
risk is primarily a multi-
year risk from failure to
manage our minerals
pipeline appropriately.
Principal risks
Net risk rating
Low
Medium
High
Very high
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Principal risks
Risk context
How this risk could impact us
Mitigations
Trend
Velocity
STRATEGIC RISKS
5 People
YEARS
We employ c. 4,500 colleagues across all of
our trading locations, a number of whom work
in highly-skilled and specialised roles.
Recruitment is expected to become more
challenging in future years as a significant
proportion of the workforce approaches
retirement.
We are part-way through the implementation
of our five-year People Plan, which aims to
embed our values, attract a talented and
diverse workforce, provide opportunities for
everyone and ensure Breedon remains a great
place to work.
Failure to attract and retain the right people
could have an adverse impact on our ability
to achieve our strategic objectives.
If we do not have adequate succession
planning processes, we may experience
short-term disruption if key individuals leave
the business.
Failure to equip our people with the right
skills and training increases the possibility
that they will not deliver to their full potential.
Our People team provide the framework
of policies and procedures to mitigate
this risk. See People on pages 81 to 87 for
further details.
No significant change
to risk profile in 2024.
This risk is most likely
to impact gradually
over a number of years.
OPERATIONAL RISKS
6 Competition
MONTHS
We face volume and price competition from
both large and small players in our industry.
As our products are largely commodities, the
strength of our customer relationships and
service offering can be a key differentiator in
securing orders.
If we fail to deliver consistently excellent
customer service, increasingly underpinned
by digitalisation, we may lose market share
to our competitors.
Our competitors’ pricing strategies could
cause supply/demand imbalances and limit
our ability to implement price rises to cover
increasing costs.
A new entrant to our markets could gain
market share, reducing our sales volumes.
Over the longer-term, competing alternative
products could emerge which reduce
demand for our core products.
Our commercial teams engage closely with
our customers to understand their needs
and provide excellent customer service.
We have made a number of strategic
investments in digital projects to improve
the customer experience and simplify
administrative processes.
Our product technical teams evaluate and
research new products, materials, methods
and technologies and test these in the field
to assess their performance.
While still challenging,
the cyclical downturn
in the overall size of
our markets is now
stabilising which
reduces the level of risk
that competitors adjust
their pricing strategies
to secure volume.
This risk can impact
in the short-term at
a local level through
either a new entrant or
changes in competitor
behaviour; however
more fundamental
shifts to the competitive
landscape are likely to
be multi-year.
Principal risks
Net risk rating
Low
Medium
High
Very high
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Principal risks
Risk context
How this risk could impact us
Mitigations
Trend
Velocity
OPERATIONAL RISKS
7 Failure of a critical asset
DAYS
Our two cement plants and some of our larger
quarries make a significant contribution
to our overall profitability and significant
management focus is devoted to maximising
production uptime and efficiency at these
locations.
Our cement plants in particular are complex
manufacturing environments, operating 24:7
outside of planned maintenance shutdowns
and the reliability of the kilns is critical to our
operational success.
Emerging risk: Operational technology
An unplanned production outage at one of
our two cement plants or at a small number
of critical quarries could reduce production
efficiency, cause significant operational
disruption and loss of earnings.
Our sites have real-time performance
monitoring and preventative maintenance
and inspection programmes designed by
our specialist plant engineers, with external
support utilised when appropriate.
Each of our cement kilns is subject to an
annual shutdown in accordance with a
planned maintenance schedule.
Back-up processes and facilities are in place
across critical areas of the plants and spare
parts are held for critical equipment.
We hold Business Interruption Insurance
and continue to strengthen business
continuity plans.
No significant change
to risk profile in 2024.
This risk could have
an immediate impact
if a critical asset
suffered unscheduled
downtime.
8 Health and safety
DAYS
Our industry has to operate in inherently
dangerous environments, involving heavy
machinery, extreme temperatures in
manufacturing processes, the use of explosives
in our quarries and significant numbers of
plant and vehicle movements. Our risk extends
to locations outside of our direct control
such as road surfacing or rail operations and
construction sites.
We take our responsibility to keep our people
safe extremely seriously, with robust control
practices and a constant focus on continuously
improving our safety culture. However, we
cannot eliminate this risk entirely.
Emerging risk: Operational technology
The most serious impact would be fatality or
physical harm caused to our employees or
other stakeholders.
If we were deemed culpable, we could be
impacted by significant regulatory fines,
reputational damage and business disruption.
Our Group Health, Safety and Wellbeing
team has day-to-day management
responsibility for this risk.
We promote a strong safety culture with
a focus on continuous improvement and
personal ownership of health, safety and
wellbeing.
We provide people with the tools and
equipment they need to do the job safely,
and invest in risk reduction technologies,
including regular health, safety and
wellbeing training.
Detailed investigations into both actual
and potential incidents, and the sharing
of learnings to help to prevent recurrence.
No significant change
to risk profile in 2024.
This risk could have an
immediate impact in
the event of a serious
incident.
Principal risks
Net risk rating
Low
Medium
High
Very high
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Principal risks
Risk context
How this risk could impact us
Mitigations
Trend
Velocity
OPERATIONAL RISKS
9 IT and cyber security
DAYS
Our business is becoming increasingly digital,
which requires resilient and secure digital
infrastructure as a foundation, both within
Breedon and at approved third parties who are
provided with access to our data and systems.
At the same time, external cyber threats
are growing increasingly frequent and
sophisticated, with more significant potential
impacts. This means management of our cyber
risk remains fundamental to our strategy.
Emerging risk: Generative artificial
intelligence and operational technology
A cyber security incident, whether through
external cyber attack or internal data
breach, could cause operational disruption,
data loss, financial penalties, reputational
damage and potential legal consequences.
Lack of infrastructure resilience could result
in business disruption and reduce our ability
to benefit from increasing digitalisation.
Systems integration projects or significant
IT changes may lead to business disruption.
Our dedicated Information Security team
monitors and responds to new and existing
cyber risks and strengthens the Group’s
cyber resilience with the support of external
service providers.
Our people undertake regular cyber
training, including simulated phishing
attacks to educate users on cyber risk.
Policies and processes are in place,
including business continuity and disaster
recovery plans, to define the standards of
controls we have implemented to prevent,
detect and respond quickly to events.
We are increasing investment in digital
infrastructure to increase security and
resilience.
IT system development projects are
carefully planned and managed with defined
governance and control procedures.
Our risk continues
to increase as cyber
attacks become more
sophisticated, are
more likely to occur
and our business is
increasingly digital.
A cyber attack or a
failure in critical IT
infrastructure could
have an immediate
impact.
10 Laws, regulations and governance
DAYS
We must comply with a complex set of laws
and regulations in all of our trading locations.
Compliance is increasingly complex, and the
penalties for getting compliance wrong more
severe.
These include, among others, environmental,
competition, fraud, bribery, market abuse,
taxation and data privacy, in addition to the
requirements arising from our listing on the
London Stock Exchange.
Our compliance programme sets clear
expectations and provides our people with
support to do the right thing.
Emerging risk: Generative artificial
intelligence
A breach of laws and regulations could
expose us to significant legal consequences
including fines, reputational damage and
operational disruption.
Our Legal and Compliance team monitors
and responds to legal and regulatory
developments, supported by external
expertise where required.
We maintain specific policies for each area of
compliance, which are communicated to our
people through regular compliance training.
Externally facilitated confidential
whistleblowing process, with all reports,
subsequent findings and follow up actions
overseen by the Audit & Risk Committee.
Our tax strategy is approved by the Audit
& Risk Committee, with compliance
monitored Group-wide, applying the
principles of the Senior Accounting Officer
requirements in the UK.
There has been a small
increase in the level of
risk following our move
into the US market, a
new legal jurisdiction
for the Group.
This risk could result in
an immediate impact if
a law or regulation was
found to have been
breached.
Over a multi-year
period a repeated
failure to demonstrate
strong compliance
could have additional
consequences.
Principal risks
Net risk rating
Low
Medium
High
Very high
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Principal risks
Risk context
How this risk could impact us
Mitigations
Trend
Velocity
OPERATIONAL RISKS
11 Supply chain and input costs
MONTHS
The majority of our raw material requirements
are minerals which have been purchased at
historic cost and sit as mineral reserves and
resources in our quarries, providing a natural
hedge against inflation.
Of our remaining cost base, a significant
proportion is either directly or indirectly
impacted by the price of hydrocarbons, so
are sensitive to the global geopolitical trends
which have caused significant cost volatility in
recent years.
If we do not pass on increased input
costs immediately to our customers, our
profitability and margins will be adversely
impacted.
The execution of our procurement and
hedging strategies could fail to provide us
with appropriate cost certainty, or result in
overpaying for commodities.
If we cannot obtain alternative fuels and
raw materials for our cement business,
production may be disrupted.
If we fail to contract with counterparties
who are reliable and maintain high
standards of governance, compliance
and sustainability, we may be exposed to
operational disruption, reputational damage
and fines.
Input cost increases are passed onto
customers through our deliberate pricing
strategy to recover costs.
Our layered hedging strategy provides a
degree of cost certainty around energy,
bitumen and carbon allowances under both
UK and EU ETS schemes.
We are investing in a number of longer-term
renewable energy generation projects
for electricity to reduce dependency on
volatile markets.
Our strategic purchasing programme
aims to secure contracts for key products
and services to ensure counterparties are
assessed and selected with considerations
covering a wide range of criteria.
The risk has reduced as
cost price volatility, in
particular for energy,
has stabilised in 2024.
While prices can
move significantly in
the short term, our
hedging programme
delays the likely impact
for our key input costs
to reduce the velocity
to months.
FINANCIAL RISKS
12 Treasury
YEARS
Access to capital at appropriate rates is a
prerequisite of our growth strategy. Our
capital structure, which includes USPP and
RCF facilities, gives us immediate access to
significant liquidity, and it is important to us
that we maintain strong relationships with
both our lenders and shareholders to ensure
this continues.
Our trading operations use sterling, euro and
US dollar as functional currencies.
We aim to use the natural hedges that arise
from our operations in currencies other than
sterling; however it remains important to
execute our treasury strategy effectively to
minimise unnecessary currency volatility.
Lack of sufficient available capital could
cause us to miss out on significant growth
opportunities or, in extreme situations,
threaten the viability of our business.
Increased interest rates could result in
reduced profitability.
The value of our earnings and assets may be
impacted by currency fluctuations.
We maintain good relationships with our
lenders and shareholders and have a strong
history of raising debt and equity financing.
We utilise fixed and floating rate borrowings
to minimise interest costs while maintaining
appropriate levels of liquidity.
Our borrowings are structured to mitigate
the impact of currency fluctuations on
asset values.
Interest rates in both
the UK and the US are
easing gradually.
Leverage has reduced
following the BMC
acquisition in 2024
which, given our
strong balance sheet,
means that the overall
level of treasury risk
remains low.
The most significant
impact would be an
inability to successfully
refinance our facilities.
Our current maturity
profile means that this
risk would not impact
us in the short to
medium term.
Principal risks
Net risk rating
Low
Medium
High
Very high
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Managing our risks and opportunities
Emerging risks
Emerging risks are identified through our
standard risk processes. We define an
emerging risk as a new risk that cannot yet
be fully assessed, or a risk that is known to
some degree however is believed unlikely
to materialise or have a material impact in
the short term. Emerging risks typically
relate to one or more existing principal risks
however may result in the identification of
additional principal risks as they are more
fully understood.
Climate change and the decarbonisation
of the business is a significant evolving risk
which has the potential to impact over the
medium term. Full details of climate-related
risks and opportunities are provided in our
TCFD reporting.
TCFD reporting
»59
Emerging risk
Link principal risk(s)
Possible impacts
Generative artificial intelligence
Artificial intelligence that can
generate new content, such as text,
images, and audio, that is often
indistinguishable from human-
generated content
IT and cyber security
Laws, regulations
and governance
Data loss
Automation of cyber attacks
Sophisticated phishing emails
Quality control
and misinformation
Operational technology
The increasing modernisation and
digitalisation landscape is likely to
mean that operational hardware and
software, typically separate from IT
systems, becomes more connected
with information technology
Failure of a critical asset
Health and safety
IT and cyber security
Physical harm to people
Operational disruption
Financial loss
Reputational damage
We continue to assess two potentially significant emerging risks
Breedon Group plc Annual Report and Accounts 2024
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Strategic report Governance Financial statements Additional information
Climate-related risks and opportunities
Taskforce on Climate-related
Financial Disclosures
We have set out our climate-related
financial disclosures consistent with
the 11 TCFD recommendations and
recommended disclosures in this section
of our Annual Report in compliance
with UK Listing Rule 6.6.6R and with
consideration of Sections C and E of the
2021 TCFD Annex.
Our Sustainability report from page 69
sets out how Breedon is responding to the
urgent challenge posed by climate change,
our progress against the metrics and
targets which we have set to decarbonise
our business, and the practical actions we
are taking to achieve this.
Our TCFD disclosure supplements the
Sustainability report by providing a clear
analysis for our stakeholders on how
climate change impacts Breedon’s risk and
opportunity landscape, and the governance
arrangements we have in place to support
delivery of our strategy.
During 2024 the SBTi completed the
validation of our decarbonisation targets,
improving our transparency and disclosure.
We have reported the targets and progress
made against them on pages 72 to 74.
TCFD Pillar
Our response
Further information
Governance
Disclose the organisation’s
governance around
climate-related risks and
opportunities.
The Board retains overall responsibility for
climate-related risks and opportunities. The
Board is supported by the Sustainability
Committee, which comprises all members
of the Board and is chaired by Carol Hui.
The Committee meet three times a year.
The Executive Committee is responsible for
the design, implementation and execution
of the sustainability strategies and policies
of the Group.
Our Group Sustainability Director leads
Breedon’s sustainability team and chairs
the cross-divisional Sustainability Liaison
Committee. She reports directly to the
CEO and has day-to-day management
responsibility for climate-related issues.
Climate change
governance
process
»60
Sustainability
Committee report
»121
Strategy
Disclose the actual and
potential impacts of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial
planning where such
information is material.
Climate change presents both
opportunities and risks for Breedon in
delivering our sustainable growth strategy.
To ensure that the latest scientific evidence
on the impacts of climate change is
properly understood and to stress test the
impact on our strategy, we modelled the
impact of our most material risks under a
range of possible warming scenarios.
This exercise highlighted a number of
tactical actions to manage climate risks
and opportunities however has not
required fundamental adjustments to
our strategy.
Our strategic commitment to sustainability
is demonstrated through our key strategic
objectives of Expand and Improve, with
decarbonisation a critical element of
delivering value for all our stakeholders.
Climate scenarios
modelled
»60
Chief Executive
Officer’s review and
strategy
Sustainability: Our
approach
Sustainability:
Strategic actions and
progress achieved
»22
»69
»71
Risk management
Disclose how the
organisation identifies,
assesses, and manages
climate-related risks.
Climate change-related risk identification,
assessment and management is
considered through the Group’s overall
risk management and internal control
framework. Climate change and laws,
regulations and governance are considered
to be principal risks.
We have embedded our Sustainability risk
register into the Group-wide risk processes.
The Group Sustainability Director,
together with the management teams
and cross-divisional Sustainability
Liaison Committee, have reassessed
the outputs from the climate risk review
exercise refreshed with a third party in
2024 and agreed action priorities with
management.
Climate risk
management
processes
»60
Climate-related
risks and
opportunities
Managing our risks
and opportunities
»61
»48
Metrics and targets
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
We report CO2 metrics in line with the
UK SECR, which include both absolute
emissions (Scope 1, 2 and 3) alongside
intensity measures relative to revenue
and volumes.
We have committed to net zero by 2050,
with medium-term targets set through to
2030. We developed science-based near-
term and net-zero targets and these were
formally validated by the SBTi during 2024.
Progress against our targets is monitored
and reviewed regularly by management,
the Executive Committee, the
Sustainability Committee and the Board.
Delivery of these objectives is supported
through short-term targets, the
achievement of which is linked to incentive
schemes which form part of senior
managers’ remuneration.
SECR reporting
»75
Carbon targets
and progress
»72
Sustainability
objectives and
remuneration
Net zero road map
»135
»140
»73
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Executive Committee
Responsible for the design, implementation
and execution of the strategies and policies of
the Group in relation to sustainability.
Receives regular updates from the Group
Sustainability Director.
Management
Our Group Sustainability Director leads
Breedon’s sustainability team. She reports
directly to the CEO and chairs our cross-
divisional Sustainability Liaison Committee.
The Group-level sustainability team and the
cross-divisional delivery groups support
our businesses to ensure that sustainability
is effectively embedded into our working
practices, climate-related KPIs are accurately
defined and quantified, that practical measures
are in place to make progress against our
climate-related targets and that this is
monitored and reported appropriately.
Climate change governance process
The Board
The Board is ultimately responsible for our
strategy to create sustainable value for all our
stakeholders over the long term. The Board
retains ownership of climate-related risks
and opportunities and is supported by the
Committees of the Board. It receives regular
updates from management on climate-
related issues. For examples of where the
Board has considered climate-related issues
see the S172 statement: Board decisions 2024
stakeholder impact – revised carbon targets
on page 99 and the Audit & Risk Committee
report: Accounting impact of climate change
on page 114.
Sustainability
Committee
Oversees
sustainability
strategies, policies,
and targets.
Reviews sustainability
risks and
opportunities.
Considers the integrity
of climate-related
disclosures.
Evaluates the
performance of the
Group over time in
delivering against
these targets.
Audit & Risk
Committee
Supports the Board
in reviewing and
challenging climate-
related risks and
opportunities as part
of the principal risk
reviews.
Considers the integrity
of climate-related
disclosures.
Reviews the
effectiveness of
risk identification
and management
processes, including
climate-related risk.
Oversees appropriate
assurance on disclosed
climate metrics.
Remuneration
Committee
Designs remuneration
structures ensuring
alignment with climate
targets.
Monitors performance
against climate-
related targets
when approving
remuneration.
For further detail
on how executive
remuneration is linked
to sustainability
objectives, see
our Director’s
Remuneration report
on pages 126 to 146.
Nomination
Committee
Ensures the Board and
senior managers have
sufficient experience
to provide effective
leadership on climate
issues.
REPORTING
OVERSIGHT
Climate risk management
process
Climate change is one of Breedon’s
principal risks, with climate-related risks
and opportunities integrated into the
Group’s overall risk management and
internal control framework, set out on
page 48.
As part of our risk process, a full
climate risk review was undertaken
during 2022 to ensure that our risk
assessment reflected the latest scientific
understanding of the likely impacts
of climate change. The physical risk
assessments and scenario modelling
were updated during 2024 and included
acquisitions in the year.
The climate risk review assessed the
risks and opportunities arising from
both physical and transitional impacts
of climate change. Risk levels were
considered over different time horizons
through to 2050 and under three different
possible warming scenarios, allowing for
a comprehensive understanding of the
evolving risk landscape.
Our sustainability risk register tracks our
climate risks alongside the effectiveness
of mitigating actions taken by the Group.
This exercise underpinned the selection
of the most significant climate-related
risks and opportunities which we have
modelled in our scenario analysis.
Our TCFD process
Assessment of potential climate risks to
identify a long list of possible climate‑
related impacts.
Discussions with operational management
to assess risks using Breedon’s standard risk
framework and shortlist the most significant
climate risks and opportunities for further
consideration.
Scenario analysis performed, with external
data analysis, to estimate the unmitigated
impact under each climate scenario in the
short, medium and longer-term.
Findings communicated to the Board and
senior operational management. Action plans
agreed to help to mitigate risk impacts.
Integration into business
as usual risk management
processes, with plans to mitigate
identified risks considered as part of
our overall risk process. Sustainability
risk register updated to capture
both detailed risk information and
mitigating actions.
Climate-related risks and opportunities
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Net risk
Low
Medium
High
Very high
Climate-related risks and opportunities
Risk
Timeframe
Net rating
Flooding
Medium to long
Low
Landslides
Medium to long
Low
Water availability
Medium to long
Medium
Carbon pricing
Medium to long
Very high
Capital cost of transition
Short to long
Very high
Fuel costs and availability
Medium to long
Very high
Reputational damage
Short to long
High
Substitute products
Medium to long
Low
Opportunity
Alternative uses of land resources
Medium to long
Very high
Climate resilience and/or green
infrastructure projects
Short to long
Very high
Sustainable products
Short to long
High
Transitional
Opportunities
Physical
Risk/opportunity description
Management response
Physical risks
Flooding
Sites may be at increased risk of
flooding – either from rising sea levels
or increased rainfall causing rivers to
overflow.
Only a small number of sites are expected to be
impacted by flooding risk, these are mostly leasehold
sites that could be relocated.
Business interruption plans are in place and flood
risk is considered as part of our capital investment
process to ensure future investments are sustainable.
Landslides
Sites may be at increased risk of
landslides. In addition, there is a risk that
quarry faces become unstable in the
medium to long term as a result of the
impacts of climate change.
Our land and minerals teams conduct, for each of
our key sites, regular geological surveys to monitor
landslide and landslip risks at our quarries and
ensure appropriate contingency plans are in place.
Only a small number of non-quarry locations
are expected to be impacted. These are mostly
leasehold sites that could be relocated, and
geological risk is considered as part of our capital
investment process, where relevant, to ensure
future investments are sustainable.
Water availability
Climate change could put additional
stress on the availability of water, which
is a key operating material for a number
of our quarries and concrete plants.
We have installed over 40 smart meters at
our top water consuming sites to understand
demand patterns and allow us to scope
operational contingency measures, including
water storage. The rollout of further metering
will continue into 2025.
Our principal climate-related risks and opportunities are as follows:
Climate-related opportunities and risks are
applicable to all geographies in the Group. The table
on the right reports the amount and extent to which
the assets and revenue of each division is vulnerable
to the significant climate risks and opportunities
reported above.
By division
Great Britain
Ireland
United States
Cement
Revenue
£997.4m
£233.4m
£132.5m
£309.2m
Total assets
£976.0m
£293.8m
£305.0m
£575.0m
Potential impact
LOW
HIGH
LOW
HIGH
LOW
HIGH
LOW
HIGH
Physical risks
Transitional risks
Opportunities
Opportunity
Low
Medium
High
Very high
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Climate-related risks and opportunities
Net risk
Low
Medium
High
Very high
Risk/opportunity description
Management response
Transitional risks
Carbon pricing
We purchase carbon allowances for our
carbon emissions under both UK and
EU ETS schemes.
The cost of these allowances is forecast
to rise over the long term under nearly
all climate scenarios, as a factor of
both market pricing and the gradual
withdrawal of existing free allowances
to incentivise investment in low carbon
technologies.
If the cost of emissions allowances rises
faster than the speed that we are able
to decarbonise, this would result in
increased input costs.
Cement imported from countries with
lower carbon costs would be more
affordable than locally produced cement
unless a carbon border adjustment
mechanism is imposed.
We have carbon reduction targets and roadmaps
across our businesses. In addition, our SBTi-
aligned near-term and net zero targets were
formally validated by the SBTi in 2024.
Progress against our targets is monitored
via KPIs that are linked to Executive
Committee remuneration.
These will reduce the carbon intensity of our
business and the corresponding requirement
for emissions allowances.
To the extent that carbon prices rise more rapidly
than the impact can be mitigated through carbon
reduction, our dynamic pricing strategy has
allowed us to pass on increases to date and we
expect this will continue.
Both UK and EU governments have proposed
carbon border adjustment mechanisms to ensure
equal treatment of carbon costs on cement
imports, and we are engaged with the process
through industry bodies to ensure these are
appropriately drawn.
Capital cost
of transition
While the capital costs of our carbon
reduction strategy are reflected in our
financial plans, the technology required
to decarbonise our Cement business
is not yet proven at scale and it is
consequently not possible to quantify
the gross cost of the transition over the
longer term.
It is likely that very substantial capital
investment will be required, which could
limit funds available to invest in growth
projects elsewhere in the business.
To be commercially viable, the costs
of this investment would need to be
passed into the market through higher
pricing, and without clarity as to the level
of investment required, it is unclear how
this might impact demand for cement.
Our base case scenario is that the required
carbon reduction technologies will be developed
to operate at scale over the medium term, and
that these will represent commercially viable
investments either on a standalone basis or with
the benefit of additional government subsidy.
We are closely monitoring developments
in emissions-reducing technology, and our
financial forecasting processes reflect the costs
of anticipated sustainability projects.
We are an active member of the MPA and the
Global Cement and Concrete Association
(GCCA), supporting collaborative approaches
to climate challenges and policy development
across the sector.
Risk/opportunity description
Management response
Transitional risks
Fuel costs and
availability
The transition to a lower carbon
economy is forecast to impact the cost
and availability of fuels which Breedon
currently uses or may use in the future.
Our Energy team monitors developments in
fuel costs and availability, and works closely
with operational teams to ensure that we have
maximum optionality on the types of fuel
capable of being used in our plants.
We are investing in a number of renewable
energy generation projects for electricity to
reduce dependency on volatile markets, provide
longer-term cost certainty and become a more
sustainable business.
Reputational damage
If our sustainability strategy does not
demonstrably succeed in meeting the
challenge of climate change, or we fail
to meet our carbon reduction targets
due to a perceived lack of commitment,
we may suffer significant reputational
damage impacting our relationships
with our customers, employees,
investors and other stakeholders.
We demonstrate our commitment to
sustainability by taking visible actions today
to decarbonise our business, setting ourselves
credible targets for the future and underpinning
this with appropriate governance structures.
Our net-zero targets were validated by the
SBTi during 2024, and our investments in
sustainability projects provide tangible evidence
that we are taking action to reduce the carbon
emitted by our operations.
Our Group Sustainability Director provides
subject matter expertise in this area, and
the Board is supported, in particular by the
Sustainability Committee, to ensure that
our governance structures are appropriate,
to provide challenge and scrutiny, and to
monitor progress.
Substitute products
If a lower carbon substitute product
for concrete emerged which was
commercially scalable, there could be a
reduction in demand for concrete and
cement products.
There is no obvious scalable substitute product
for concrete available at present and we believe
it is unlikely that one will be developed in the
near term.
Over the longer term, the targeted reduction in
the carbon intensity of our operations will reduce
the advantage of substitutes.
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Financial impacts
Where we have been able to utilise external data sources to quantify a climate-related risk
or opportunity, we have disclosed details of the data source and the resultant possible
financial impact (prior to mitigating actions) which has informed our scenario analysis.
For those risks which cannot be reliably quantified, we have assumed that a worst case
scenario (before mitigations) would be £58.5m of operating profit foregone per annum,
representing the 2024 Underlying EBIT contribution from our Cement business.
Data source
Risk modelled
Output (highest modelled impact)
World Resources Institute’s
Aqueduct Floods tool to determine
flood risk.
Flooding
Under the most pessimistic climate scenario
modelled, less than 4% of operating profit is
estimated to be at risk due to an increased
risk of flooding to 2050.
Coalition for Disaster Resilient
Infrastructure GIRI model
to determine susceptibility
to landslides triggered by
precipitation.
Landslides
Under the most pessimistic climate scenario
modelled, no active sites were rated as
being higher than ‘low’ risk of landslide
exposure.
WRI’s Aqueduct Water Risk Atlas
to determine risk of water stress
impacting production.
Water
availability
Under the most pessimistic climate scenario
modelled, less than 1% of operating profit is
estimated to be at risk due to a lack of water
availability until 2050.
International Energy Agency’s
Global Energy and Climate model.
Carbon
pricing
To achieve net zero by 2050, all free
allowances are withdrawn and carbon price
grows rapidly to reach £181/tonne by 2050.
Assuming no reduction of current emissions
levels, this would represent a gross cost
of c.£275m per annum to Breedon.
Fuel price projections are derived
from an Integrated Assessment
Model framework which simulates,
in a forward-looking fashion, the
dynamics within and between
the energy, land use, water, air
pollution and health, economy and
climate systems.
Fuel
costs and
availability
To achieve net zero by 2050, fuel
availability is limited and costs increase
significantly. Assuming Breedon’s current
fuel mix does not change from a 2021
baseline, this could add up to £40m
of increased cost to Breedon by 2030
and £70m per annum by 2050.
Risk/opportunity description
Management response
Opportunities
Alternative uses of
land resources
We have significant land holdings,
typically areas of our quarries on which
restoration has been completed,
which could be used for alternative
purposes such as carbon sequestration
to generate our own emissions
credits, biodiversity net gain or to host
renewable energy infrastructure, such
as solar farms.
We have further analysed our natural and social
capital performance assessment of all our non-
operating rural assets through the lens of our
current agricultural tenants. We are currently
evaluating proposals and possible partnerships
with likeminded tenants and partners. This will
ensure that we are maximising future value for
our stakeholders.
Climate resilience
and/or green
infrastructure projects
Our products are used in infrastructure
projects which both enhance physical
climate resilience, such as flood
defence schemes, and in transitional
technologies, such as green energy
networks. Increasing investment
into these types of project increases
demand for our existing products.
Our network of operating locations and
significant mineral reserves means we are well
positioned to take advantage of increased
demand arising from climate resilience and
green infrastructure projects.
Sustainable products
Demand for more sustainable products
is expected to increase, which provides
a market opportunity to improve both
volumes and margins through product
innovation and investment in lower
carbon technologies.
In 2022 we launched Breedon Balance, our
range of products with sustainable attributes,
and we continue to review opportunities for
innovation within our products.
Capital investment supports these product
developments, with a recent multi-million
pound investment in new silos across our ready-
mixed concrete network, providing additional
capacity for sites to provide lower carbon CEM
II ready-mixed concrete. Additional silos were
constructed during 2024.
Further details can be found within the
Sustainability report on pages 69 to 94.
Climate-related risks and opportunities
Opportunity
Low
Medium
High
Very high
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Climate-related risks and opportunities
Scenario analysis
Climate scenarios considered and impact
on risk
Our financial plan, which is incorporated
into our viability and impairment
assessments, assumes that the divisions
meet their stated policy commitments
to net zero by 2050 on time and in full.
However, there remain a number of
different possible warming scenarios
as government policy and scientific
understanding evolve over time.
During 2024 we have refreshed the
detailed analysis undertaken during 2022
to assess the impact of three possible
different warming scenarios on our most
significant climate-related physical risks
and opportunities. The detailed analysis
for transitional risks and opportunities
continues to be based upon the
assessment performed in 2022.
Risks have been assessed over short,
medium and longer-term time horizons.
The short-term analysis to 2030
aligns with our short-term financial
planning cycle, 2040 with the timing
of our medium-term decarbonisation
roadmap and 2050 with our longer-term
commitment to achieving net zero by
this date.
Underpinning the analysis in each
scenario is an assumption that the costs
of transition impact the industry equally
and that no scalable substitute product
for concrete emerges in the near term.
Outcome of scenarios
modelled
In each scenario modelled, the Group
would continue to be profitable and cash
generative, although in some scenarios
some restructuring of our operating model
may be required to achieve this.
Given the need to decarbonise our cement
operations, we are significantly more
exposed to transitional than physical
climate risks.
Therefore the Orderly and Disorderly
scenarios which involve a successful
transition to net zero by 2050 present
the highest risk to Breedon as a result of
elevated transitional risks in those pathways.
Opportunities are less impacted by the
transition pathway, but are greater in the
Orderly and Disorderly scenarios.
Orderly
transition
Disorderly
transition
Adaptation
TRANSITIONAL RISKS
PHYSICAL RISKS
Relative exposure to transitional and
physical risks under each of the Group’s
climate scenarios
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Climate-related risks and opportunities
Scenario
Risk /opportunity
2030
2040
2050
Orderly transition
The Orderly transition scenario assumes that
climate policies are introduced early and
gradually become more stringent, limiting
the increase in global temperatures to more
manageable levels.
Transitional risks increase as climate action
is more rapid and ambitious than current
policy, which would include significant
increases in carbon pricing and investment
in renewable energy.
1.5 – 2.5°C
Physical risks are relatively subdued in
comparison to other scenarios as expected
temperature increases are lower, however still
reflect increases in the frequency and intensity
of extreme weather events and disruptions to
weather patterns.
Carbon pricing
Capital cost of transition
Fuel costs and availability
Reputational damage
Water availability
Alternative uses of land resources
Climate resilience and/or green
infrastructure projects
Disorderly transition
The Disorderly transition scenario assumes
a delayed introduction of climate policies,
with global greenhouse gas emissions (GHG)
increasing throughout the 2020s before more
drastic action is taken by governments from
2030 to achieve net zero by 2050, with global
temperatures reaching significantly higher levels
than under the Orderly transition scenario.
2.0 – 3.5°C
Transitional risks are therefore the highest of all
scenarios reflecting the greater severity of the
measures required as a result of the delayed
implementation of policy measures, while physical
risks increase relative to the Orderly transition
model as increased global temperatures result in
more extreme weather events.
Carbon pricing
Capital cost of transition
Fuel costs and availability
Reputational damage
Water availability
Alternative uses of land resources
Climate resilience and/or green
infrastructure projects
Adaptation
The Adaptation scenario assumes that some
climate policies are implemented, however
these are not sufficient to halt significant global
warming.
Critical temperature thresholds are exceeded,
leading to severe and irreversible physical
impacts, resulting in the highest level of physical
risk across the three scenarios modelled.
3.0 – 5.0°C+
Policy measures focus less on incentivising
decarbonisation and more on adaptation,
resulting in lower levels of transitional risk and
increased spend on climate resilience projects.
Carbon pricing
Capital cost of transition
Fuel costs and availability
Reputational damage
Water availability
Alternative uses of land resources
Climate resilience and/or green
infrastructure projects
Risk/opportunity impact (unmitigated)
LOW
PHYSICAL RISKS
TRANSITIONAL RISKS
OPPORTUNITIES
HIGH
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Climate-related risks and opportunities
Impact on strategy
Sustainability remains a critical element
of our strategy which underpins the
whole of our operating model.
The greatest climate-related risks arise
from transitional impacts, which are
mitigated through the strategic actions
being taken to decarbonise our business
and achieve net zero by 2050.
We are well positioned to capitalise
on climate-related opportunities, with
a strategy to grow the percentage of
sales from products with sustainable
attributes, and are in the process of
reviewing our land holdings to assess
how we can best utilise them to
maximise sustainable, environmentally
friendly outcomes.
Our operating locations are exposed
to relatively low physical risk, and
consequently this does not require a
significant strategic response. A number
of tactical initiatives are in place to ensure
that the physical risks to achieving our
strategy are appropriately managed.
The key metrics that we have selected
to measure our success in executing our
sustainability strategy are as follows:
Metric
Risks/opportunity
GHG emissions –
scope 1 & 2
Emissions intensity
Energy use
Carbon pricing
Capital cost of transition
Fuel costs and availability
Reputational damage
Mains water intensity Water availability
Reputational damage
Sustainable product
sales
Substitute products
Sustainable products
Climate resilience and/or
green infrastructure
The targets which have been set for
each of these metrics are set out in the
Sustainability report from page 69.
Climate in the financial
statements
We have considered the financial reporting
implications of the impacts of climate
change on the financial statements.
Impairment of non-current assets
As noted in our impairment testing
disclosure in note 9 of the consolidated
financial statements, there may be elevated
levels of climate-related risk in respect of
assets in our Cement division as clarity
emerges on the costs and corresponding
commercial impact of the transition to net
zero. However there is no current indication
of impairment under either base or
sensitised scenarios.
Inventory obsolescence
If market demand were to decline
significantly as a result of climate change,
impacting consumer purchasing habits,
the cost of inventory held on the Group’s
balance sheet may become irrecoverable.
There has been no sign of decreasing
demand for the Group’s products as a
result of societal responses to climate
change. Furthermore, any change in
consumer demand is expected to occur
over a prolonged period of time. Financial
controls are in place to identify these shifts
in demand and we would expect to have
sufficient time to identify any risks and
adapt stock production accordingly.
The Group’s inventories include some
spare parts held for our Cement
plants. As discussed in our impairment
testing disclosures, the technological
advancements required to achieve net
zero could result in these items becoming
obsolete over time, but at present these
parts are held to support a profitable
trading business and are not impaired.
Recoverability of trade debtors
The economic impacts of climate change
may damage our customers’ liquidity,
leading to irrecoverable debts. Cash
collection has remained strong across the
Group throughout 2024 and we mitigate
this risk through credit insurance policies.
We have not identified any indicators
that our customers’ ability to settle debts
has been impacted by climate change
factors. Financial controls are in place to
identify any concerns regarding bad debts.
Furthermore, any risks arising as a result
of climate change are expected to occur
slowly over an extended period of time,
enabling management to respond.
Trade payables and other liabilities
The economic impacts of climate change
may damage our suppliers’ abilities to
continue in operation, disrupting our supply
chain. We have not identified any signs that
the ability of our suppliers to trade is currently
impacted by climate change and consider
this unlikely in the short to medium term.
Where we hold provisions for restoration,
it is likely that the sustainability standards
governing restoration obligations will
increase over time. However, this would not
impact measurement of existing liabilities.
Going Concern and Viability
We have considered the impact of climate
change through the short to medium-term
forecasts used to support our use of the
Going Concern assumption in preparing
our financial statements, and our Viability
assessment over a three-year period.
Over the longer-term, it is possible that
the impact of climate change could result
in increased costs of capital. However we
completed a successful refinancing exercise
during the year at competitive interest rates,
we maintain positive relationships with our
lenders and there has been no indication
that the impact of climate change will
result in any significant issue in the Group
obtaining finance.
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Viability
Statement
Viability Statement
Viability assessment period
The directors have determined that three
years is an appropriate timeframe over
which to provide a Viability Statement.
This is aligned to the period in which the
long-term plan is derived. The directors
consider that demand in the Group’s
business is ultimately driven by certain
key markets and macroeconomic factors
which are difficult to project accurately
beyond a three-year period.
The Board’s assessment of the Group’s
financial position at 31 December 2024 is
set out in the Chief Financial Officer’s review
on pages 42 to 47. Important aspects of that
assessment that are most relevant to the
assessment of viability are:
although like-for-like volumes have
reduced during 2024, as a result of
challenging macroeconomic factors
and adverse weather conditions, the
Group has achieved robust underlying
results through disciplined pricing and
cost control;
the Group’s operations are consistently
cash generative, and underpinned by
well-invested assets; and
the Group has significant headroom in
borrowing facilities. As at 31 December
2024, the Group had liquidity headroom
of over £250m and Covenant Leverage
of 1.4x. The Group comfortably met all
covenants in 2024 and the other terms of
its borrowing agreements in the period.
When assessing viability, the Board
considers the Group’s business model
and strategy as outlined on pages 16 to 31
and the principal risks set out on pages
48 to 58.
Budgeting and long-term
planning
Breedon’s viability prospects are assessed
primarily through the Group’s budgeting
and strategic planning process. The annual
Group budget is compiled in the autumn
of each year and generates a detailed
forecast for the year ahead. The budget
is performed at a site-by-site level which is
reviewed by divisional management before
being presented to the directors and finally
reviewed and approved by the Board.
The long-term strategic plan is formulated
at a higher level and applies a series of
assumptions to the budgeted figures.
The divisional strategies together with
the long-term market outlook are
considered within the long-term planning
process and reviewed by the CFO.
The output of the long-term plan includes
a consolidated set of financial projections
for the Group covering the budget plus a
further two year period, including a review
of forecast debt covenant compliance
and debt headroom. The long-term plan
reviewed as part of the assessment of
prospects in this report covers the three-
year period ending 31 December 2027.
Severe but plausible
downside scenarios
While we have estimated the size of each
of the severe but plausible scenarios
described on the following page, we have
grouped scenarios with similar impact types
together and performed stress testing
for the scenario with the greatest impact.
Where the scenario occurs at a point in time,
we have assumed that it occurs at the point
in the plan with the lowest headroom.
In accordance with provision 31
of the UK Corporate Governance Code
(the Code), the Board has assessed the
viability of the Company over a three-
year period to December 2027, taking
into account the Company’s current
position and principal risks.
Based on that assessment, the
directors have a reasonable
expectation that the Company
will be able to continue in operation
and meet its liabilities as they fall due
over the period to 31 December 2027.
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Viability Statement
The risks and scenarios tested are described below:
Risk assessed
Severe but plausible scenario
Stress test applied
Acquisitions and
material capital
projects
A material capital investment project
experiences delays and overspends,
resulting in business disruption.
Adverse one-off cost
event
Reduction to revenue
and profitability
Markets
A deteriorating macroeconomic
environment results in reduced
demand for our products.
Reduction to revenue
and profitability
Land & mineral
management
Compliance breaches are identified
resulting in immediate remediation
costs and the temporary closure
of sites.
Adverse one-off cost
event
Reduction to revenue and
profitability
Competition
A loss of market share to competitors
or new entrants and increased
pressure on pricing.
Reduction to revenue
and profitability
Failure of a critical
asset
An unplanned production outage
causes significant operational
disruption and loss of earnings.
Adverse one-off cost
event
Health and safety
A serious health and safety
incident leading to regulatory
fines, reputational damage and
business disruption.
Adverse one-off cost
event
Reduction to revenue
and profitability
IT and cyber security
A cyber attack results in business
disruption and data loss leading to
regulatory penalties.
One-off financial penalty
Reduction to revenue
and profitability
Laws, regulations
and governance
A breach of law or regulations results
in a significant one-off penalty.
One-off financial penalty
Supply chain and
input costs
Input costs rise without the ability to
offset through pricing actions.
Reduction to revenue
and profitability
Treasury
Interest rates increase.
An increase to base rate
The risks and scenarios tested are described below:
Stress test
Amount modelled
Increased opening
debt
Opening Net Debt is increased by £200m on the first day of the
assessment period.
Reduction to revenue
and profitability
Budgeted revenues reduce by 10% in the first year then 5% thereafter
in each of the following two years, with profitability also adversely
impacted.
Adverse one-off
cost event
A £50m cash outflow at the point in the forecast with the lowest
headroom.
One-off financial
penalty
A one off £5m cash outflow at the point in the forecast with the
lowest headroom.
Increase to base rate
Base rate is assumed to increase by 2% for the assessment period.
Combined scenario
Budgeted revenues and profitability reduce as outlined in the stress test
above, opening debt is increased by £200m, interest costs and cash
flows increase due to the increased debt and a 2% increase to the base
rate. In addition, one-off cost events of £55m combined are assumed
in year one at the point where headroom is lowest.
actions, such as closing or mothballing
quarries or divesting assets, which would be
undertaken in the event of being necessary.
The models do not consider changes to the
Group’s capital structure which it may be
able to make through refinancing existing
debt facilities and/or raising equity finance.
Going Concern
The directors have continued to adopt
the Going Concern basis in preparing the
financial statements (see note 1 in the notes
to the consolidated financial statements).
Breedon have tested the above scenarios
individually as well as the combined scenario
outlined. After undertaking reasonable
mitigating actions, forecasts show that
covenants are complied with and Breedon
should be able to comfortably withstand the
impact of the severe but plausible scenarios.
The models take account of the natural
reduction in variable costs and availability
and likely effectiveness of mitigating actions
available to the Group, including the flexing
of capital expenditure, dividend payments
and reducing discretionary spend. The
models do not include significant structural
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Our sustainability strategy and framework focuses on our most
material areas of importance and impact, with clear targets and
objectives to help us achieve our aims. Our upgraded targets
reflect our significant achievements and our greater ambition.
Achieve a 23.3%
reduction in absolute
gross scope 1 and 2
emissions, and scope
3 emissions from
purchased clinker and
cement (2022 baseline)
Generate £500m
cumulative Social Value
(from 2025)
Achieve 50% of the
Group’s revenue across
the concrete, asphalt,
block, brick and tile
portfolio from the
Breedon Balance range
Carbon and energy
reduction
Responsible use of
resources
Positive impact on nature
and biodiversity
Develop and empower
a diverse, talented
workforce
Positive impact on the
communities in which
we work
Sustainable products
and services
Research, development
and innovation
Collaboration and
influence
Health, safety and
wellbeing
Quality
Ethics and integrity
Good governance
Stakeholder engagement
New 2030 targets
Focus areas
Underpinned by
We are a progressive
and sustainable
business
»72
»91
»81
»88
Sustainability
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This was done in line with the Taskforce
on Nature-related Financial Disclosures’
(TNFD) guidance and will help inform the
development of a strategic approach for
nature in 2025.
We have developed our first Climate
Transition Plan that will be launched in 2025.
We continue actively collaborating with
our stakeholders and influencing across
the industry through groups such as the
MPA and the GCCA on those challenges
that cannot be tackled by any one
individual company – requiring significant
collaboration across the wider construction,
energy and transportation sectors.
Breedon’s approach is to drive
sustainable change pragmatically,
balanced with the needs of our
stakeholders, and to disclose our
progress transparently
Our strategic focus areas
and targets
We have continued to make good progress
in pursuit of our ambitious strategy. When
we established our framework in 2021, we
set some ambitious targets to 2030 and
over the past three years we have made
good progress.
We continue making solid preparations
for the future. In preparation for
emerging reporting requirements such
as the Corporate Sustainability Reporting
Directive we undertook the first stage of
a Double Materiality Assessment (DMA)
which we will conclude in 2025. The output
of this exercise may require an adjustment
of our most material areas of focus.
We will be embedding a new Group-
wide ESG reporting and management
tool in 2025 along with a new social value
evaluation tool. These will improve our data
quality, business decision making and our
external disclosures.
Progress as at end 2024
a 24% reduction in gross carbon intensity
per tonne of cementitious product since
2005, against a 30% target for 2030;
a cumulative total of over 82,000 people
positively impacted – more than 82%
of our 2030 target; and
48% of our revenue derived from more
sustainable concrete and asphalt
products, against a 50% target for 2030.
Upgraded 2030 targets
achieve a 23.3% reduction in absolute
gross scope 1 and 2 emissions, and scope
3 emissions from purchased clinker and
cement by 2030, from 2022 baseline;
generate £500m cumulative social value
by 2030; and
achieve 50% of the Group’s revenue
across the concrete, asphalt, blocks,
brick and tile portfolio from the Breedon
Balance range by 2030.
In 2024 we were pleased to have achieved
a Bronze Ecovadis award for the Breedon
Group, and improved our CDP scores
to A- for Climate Change and B- for
Water Security.
To further enable and empower a culture
of sustainable action amongst our
colleagues, a new sustainability-specific
communications and engagement
programme is planned for 2025.
Climate-related risk
We refreshed our TCFD risk assessment to
understand any changes in physical risk to
our sites, including our newly acquired BMC
sites in the US. Our full TCFD disclosure can
be found on page 59.
In recognition of the critical role of nature,
we undertook an initial review of the key
nature-related impacts and dependencies
across our operations that might create
opportunities and risks for our business.
Sustainability Our approach
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2021
2022
2023
2024
100% renewable energy tariff in place
9% improvement in energy intensity
7% improvement in emissions
intensity by revenue
25,000 trees planted
19% improvement in emissions
intensity by revenue
Alternative fuel rate 77% at Kinnegad,
and near 35% at Hope
6% reduction in mains water per
tonne of core product sold
31,000 trees planted
25 Biodiversity Action Plans (BAPs)
established
ISO 50001 extended across the Group
5% improvement in carbon intensity
per tonne of core product
15% improvement in emissions
intensity by revenue
Record 79% annual level of
alternative fuel usage at Kinnegad
7,362 trees planted
14 further BAPs established
Carbon reduction targets
formally validated by the SBTi
9% improvement in carbon
intensity per tonne of core product
9% improvement in emissions
intensity by revenue
Alternative fuel rate 81% at Kinnegad,
and 35% at Hope
Over 40 new water meters installed
resulting in identification of savings of
over 10,000m3
Construction commenced on the
planned 17MW solar farm at Kinnegad.
Completed pipeline engineering pre-
FEED and initiated capture plant pre-
FEED study for Peak Cluster Carbon
Capture and Storage (CCS) project
13,400 trees planted
11,114 people positively impacted
Further 17,814 people positively
impacted
Over £300,000 in financial
donations, plus over 600 tonnes
materials donated
Further 25,856 people positively
impacted
Over £450,000 in financial donations,
plus over 3,000 tonnes of materials
donated
Further 27,268 people
positively impacted
Over £600,000 in financial donations,
plus over 1,500 tonnes of materials
donated
Dedicated Group Social Impact
Manager appointed
Volunteering platform launched
IEMA-accredited net zero training
developed for colleagues
Over 350 managers trained
on Management Essentials
25% revenue from more sustainable
concrete and asphalt products
37% revenue from more sustainable
concrete and asphalt products
Breedon Balance sustainable
products established
40% revenue from more sustainable
concrete and asphalt products
28% revenue from Breedon
Balance products
80% relevant technical and
commercial people trained
on Breedon Balance
48% revenue from more sustainable
concrete and asphalt products
34% revenue from Breedon
Balance products
PAS 2080 Carbon
Management achieved
Environmental Product Declarations
for Hope Cement products
Materiality Assessment undertaken
Sustainability strategic
framework developed
2030 targets established
Group-level policies established
139 sites with Responsible
Sourcing certification
18% improvement in employee
LTI severity rate
Board–level Committee established
Scope 3 data and reporting increased
10% remuneration linked
to sustainability KPIs
TCFD aligned disclosures
in Annual Report
53% improvement in employee
LTI severity rate
SBTi targets developed and
submitted for validation
Group-level Sustainable
Procurement Policy established
15% remuneration linked to key
sustainability KPIs
A total of 241 sites with Responsible
Sourcing certification
15% improvement in employee
LTI severity rate
CDP Climate Change and Water
Security disclosures submitted,
scoring B and C respectively
All 2030 targets on track to be met
and upgraded targets announced
6% improvement in combined LTIFR.
New cross-divisional Sustainability
Liaison Committee and topic-specific
Delivery Groups established
Dedicated Sustainable Procurement
Manager appointed
New prequalification process in place
for over 400 strategic or high risk
suppliers in GB
Undertook first stage DMA
in preparation for emerging reporting
requirements
Refreshed TCFD and began aligning
with TNFD to understand our impacts
on nature
Achieved improved CDP scores of
A- for CDP Climate Change and B-
for Water Security disclosures
Planet
People
Places
Principles
Key actions
Performance
Sustainability strategic actions and progress achieved
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Making a material
difference to the
environment
Click or scan to find out
more about the Planet pillar
New target
What we said
Progress in 2024
23.3% reduction in absolute gross scope 1 and 2 GHG
emissions, and scope 3 emissions from purchased cement
and clinker by 2030 from 2022 baseline
We are committed to achieving net zero by 2050, managing
resources responsibly and creating a positive impact on nature.
Communicate our SBTi near-term and net
zero targets once formally validated, and
demonstrate progress towards these.
Carbon reduction targets were validated by the
SBTi.
Seek to improve the carbon intensity of our
products.
Carbon intensity for our core products has
reduced again in 2024; now at 40.0kgCO2e/t.
Continue our use of alternative fuels.
Cement kiln alternative fuels rate increased slightly
from 48% in 2023 to 48.1% in 2024.
Progress the Kinnegad solar farm project.
Construction commenced on the planned 17MW
solar farm at Kinnegad.
Ensure we use our mineral reserves
responsibly.
Several projects underway to optimise use of
minerals across the Group.
Demonstrate progress on our zero waste to
landfill plans.
Central waste contract agreed and rolled out in
2024 with zero waste to landfill target embedded.
Make progress towards better water data
and management.
Over 40 sites now have digital water meters
installed.
Implement the Biodiversity Action Plans
(BAPS) recently developed for key sites.
42 BAPs are in place and planned actions are being
progressed.
Make further progress towards our longer-
term decarbonisation levers such as Carbon
Capture and Storage (CCS).
Progress made on Peak Cluster CCS project toward
FEED stage, alongside continued research into
emerging technologies and cement innovation.
Sustainability Planet
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2.14
1.95
1.80
1.64
0.11
Net zero reduction pathway
Scope 1, 2 emissions and scope 3 emissions from purchased cement and clinker only
Mt CO2e
2022
baseline
2023
2024
2030
target
2050
target
Key levers
1 2 3 4 5 6
Key levers
3 4 5 6 7 8
To achieve these targets we have
identified key levers:
1 Operational efficiency Ongoing
improvements to ways of working to
maximise the use of our resources.
2 Onsite renewables and grid
decarbonisation Focus on using
electricity from clean energy sources.
3 New equipment and technology
Investing in new machinery that result
in lower lifetime emissions or tools
to allow us to identify opportunities
for improvement.
4 Fuel switching Trialling and
deployment of alternative fuels that
result in lower emissions over their
lifecycle including biogenic fuels.
5 Product optimisation Reviewing our
manufactured products to ensure
that higher carbon constituents are
designed out wherever possible whilst
ensuring overall life cycle emissions
are also reduced.
6 Sustainable procurement Working
with our supply chain to ensure our
scope 3 emissions are mitigated.
7 Carbon capture and storage
Where other levers are not viable
due to the inherent chemical process
that produces the emissions, invest
in projects to capture the carbon and
store it permanently.
8 Offsetting and insetting In order to
achieve our 2050 net zero target,
once all the above levers have been
enacted and emissions reduced by at
least 95% (from the 2022 baseline),
we will ensure that residual emissions
are offset using high-quality carbon
credits either purchased or generated
internally from Breedon projects.
Click or scan to view full
details of SBTi targets
Our focus on getting
to net zero
Breedon is dedicated to achieving net
zero carbon emissions across the value
chain by 2050. In 2022 we committed to
develop SBTi-aligned carbon reduction
targets following the 1.5oC warming
pathway. Having submitted our near-
term and net zero targets for approval to
the SBTi in November 2023, these were
formally validated in 2024:
23.3% reduction in absolute gross
scope 1 and 2 GHG emissions, and
scope 3 emissions from purchased
cement and clinker by 2030.
Reduce our absolute gross scope 1,
2 and 3 GHG emissions 95% by 2050
from the 2022 base year.
Carbon
and energy
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Reducing carbon emissions
We have made strong progress in cutting
our carbon emissions. In 2024, we achieved
an additional 4% reduction in our total
scope 1 and 2 (location-based) carbon
emissions compared to 2023.
Our carbon intensity metric has decreased
for the sixth consecutive year, now at 1.0
kgCO2e/£, reflecting a 9% reduction from
2023 and a 47% decrease since we first
reported it in 2019.
Planet performance
»80
We will continue to disclose our carbon
performance in line with SBTi requirements
and both statutory and voluntary
disclosure frameworks.
We have internal governance mechanisms
in place to confirm we are recording our
carbon emissions accurately and ensuring
reductions and disclosure commitments
are maintained. This includes an internal
audit of our carbon reporting processes in
2023 and annual third-party assurance of
our carbon KPIs. In 2024 we established
our first dedicated inter-divisional carbon
delivery group.
Target setting methodology
The target setting process followed the
SBTi guidance including the cement
sector specific guidance. Our near-term
target combined the cement sectoral
decarbonisation approach and the absolute
contraction approach for Breedon’s non-
cement operations. This resulted in our
23.3% absolute reduction target of gross
scope 1, scope 2 (location-based) and
scope 3 emissions (from the purchase of
cement and clinker only). Other scope 3
emissions are not included in the near-term
target but do form part of the long-term
and net zero targets.
As part of the SBTi target setting process,
a target recalculation and re-baselining
methodology was established. This
includes a 5% significance threshold to
any changes in the target or baseline
emissions to account for changes to the
company structure including acquisitions
or divestitures. We will carry out a review
against these thresholds once acquisitions
have been under Breedon control for a full
calendar year.
Having reviewed the data in the reporting
year for acquisitions in 2023, none triggered
the thresholds for a baseline or target
recalculation. The impact of the BMC
acquisition in March 2024 on the SBTi
baseline will be reported in the 2025 annual
report. The progress against SBTi targets
shown below, and the net-zero reduction
pathway on page 73 excludes the emissions
from acquisitions in 2024. These emissions
are included in our company 2024 GHG
reporting on page 75.
Progress against SBTi Targets
2022
baseline
2023
2024 excl-
acquisitions
2024
acquisitions
2024* % diff
from baseline
2030
target
2050
target
Scope 1 (tCO2e) (total)
1,746,874
1,615,764
1,535,465
16,067
(12.1)%
(95)%
Scope 2 (tCO2e) location-based
73,590
77,975
71,487
2,482
(2.9)%
(95)%
Scope 3 (tCO2e) (purchased cement and clinker)
316,574
252,640
189,985
148,155
(40.0)%
(95)%
Total for near-term target (tCO2e)
2,137,038
1,946,379
1,796,937
166,704
(15.9)% (23.3)%
(95)%
Total scope 1 and 2 (tCO2e)
1,820,464
1,693,739
1,606,952
18,549
(11.7)%
(95)%
Total scope 3 (tCO2e)
695,970
692,765
623,417
165,945
(10.4)%
(95)%
Total for long-term target (tCO2e)
2,516,434
2,386,504
2,230,369
184,494
(11.4)%
(95)%
* difference shown is 2024 excl-acquisitions versus 2022 baseline
kgCO2e/£
reduction since
2019
1.0
47%
Carbon intensity improvements
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Greenhouse gas reporting
methodology
The methodology applied to the
calculation of GHG emissions is the GHG
Protocol Corporate Accounting and
Reporting Standard.
We have applied an operational control
boundary, and carbon conversion factors
have been taken from UK Government GHG
Conversion Factors for Company Reporting
– 2024 and the International Energy Agency
emission factors for non-UK sites where
appropriate. For sites that operate within
the UK and EU ETS schemes, the ETS
emissions data for kiln fuels has been used.
Our GHG emissions are reported in tonnes
of carbon dioxide equivalent (tCO2e), for
the period 1 January to 31 December 2024.
We report our location-based and market-
based emissions separately as per previous
years, to reflect the Group’s choice of
electricity supply.
Breakdown of scope 3 emissions categories
2024
tonnes
CO2e
2023
tonnes
CO2e
2024 % of
total scope 1,
2, 3 emissions
Cat 1
Purchased goods and services
465,983
385,688
19.3%
Cat 2
Capital goods
22,478
20,689
0.9%
Cat 3
Fuel and energy-related activities
117,289
118,425
4.9%
Cat 4
Upstream transportation and distribution1
135,122
122,052
5.6%
Cat 5
Waste generated in operations
644
668
0.0%
Cat 6
Business travel1
1,619
1,685
0.1%
Cat 7
Employee commuting1
11,292
11,064
0.5%
Cat 8
Upstream leased assets2
-
422
-
Cat 9
Downstream transportation and distribution1
22,770
22,834
0.9%
Cat 10 Processing of sold products
4,186
4,444
0.2%
Cat 12 End of life treatment of sold products
2,801
2,923
0.1%
Cat 13
Downstream leased assets1
2,991
-
0.1%
Cat 15 Investments3
2,187
1,871
0.1%
Scope 3 total
789,362
692,765
32.7%
1 Includes well-to-tank emissions.
2 Following a review of calculation approach, category 8 no longer relevant, emissions now in scope 2.
3 Category 15 not previously reported, includes equity share from joint ventures outside operational control scope.
Breakdown of scopes 1 and 2 emissions
United
Kingdom
Rest
of the
World
2024
Group
total
2023
% diff
(2024/23)
On-site combustion (MWh)
1,737,751
614,978
2,352,729
2,376,916
(1.0)%
Electricity (MWh)
256,873
67,247
324,120
343,537
(5.7)%
Road transport (MWh)
65,742
43,812
109,554
75,020
46.0%
Energy (MWh)
2,060,366
726,037
2,786,403
2,795,473
(0.3)%
Scope 1 process emissions (tCO2e)
660,063
263,894
923,957
981,253
(5.8)%
Scope 1 (non-process) (tCO2e)
488,670
138,905
627,575
634,511
(1.1)%
Scope 2 (tCO2e) location-based
53,134
20,835
73,969
77,975
(5.1)%
Total (tCO2e) location-based
1,201,867
423,634
1,625,501
1,693,739
(4.0)%
Scope 2 (tCO2e) market-based
0
2,482
2,482
1,395
77.9%
Total (tCO2e) market-based
1,148,733
405,281
1,554,014
1,617,159
(3.9)%
Scopes 1 and 2 emissions
The table shows the total global annual
energy use and gross carbon emissions
associated with the consumption of
electricity, natural gas, all other fuels
combusted on site, and fuel consumed
for relevant business transport purposes,
for the period 1 January to 31 December
2024, and a comparison with 2023.
Process emissions are those associated
with carbon contained within the raw
materials that is released during high
temperature processes such as cement
clinker and brick manufacture.
Scope 3 methodology
The methodology applied to the
calculation of scope 3 emissions follows
the GHG Protocol’s Corporate Value Chain
(scope 3) Accounting and Reporting
Standard following the requirements of
SBTi Corporate manual. As a result, the
2024 emissions for several categories now
include well-to-tank emissions where these
were previously excluded.
We are continuing to develop our internal
systems in order to improve the calculation
methods within each category. We report
on 12 scope 3 categories. The categories
not listed have been assessed and deemed
to be immaterial for our business.
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Emissions intensity
We have used a carbon intensity metric to
express the emissions, for the purpose
of establishing a baseline and for
ongoing comparison.
The intensity metric chosen is by £ revenue.
Using our location-based emissions the
total the resultant emissions intensity is
1.0kgCO2e/£ revenue. This represents a
reduction of 9% in comparison to 2023.
An alternative carbon intensity metric relates
our emissions to the annual sales tonnages
of our core products (cement, ready-mixed
concrete, aggregates and asphalt). In 2024
the kgCO2e/tonne fell 9% from 43.9kgCO2e/
tonne to 40.0kgCO2e/tonne.
Assuring our data
The GHG data we report is tracked internally
during the year through the Executive
Committee, the Sustainability Committee
and shared with the Board. Bureau Veritas
has carried out external assurance on our
scopes 1 and 2 emissions, and the scope
3 impacts from purchased cement and
clinker. Bureau Veritas’s assurance process
is carried out in line with the requirements
of the International Standard on Assurance
Engagements ISAE3000.
Click or scan to view the full
Limited Assurance Statement
Carbon capture and storage
A key lever to achieving our long-term and
net zero carbon reduction commitments is
the successful adoption of CCS technologies
within our cement operations. At the time of
reporting, over 70 carbon capture projects
are being tracked by the GCCA at cement
plants across the globe. One of the largest
of these, is the Peak Cluster CCS project,
of which Breedon is a key partner. When
completed, it will capture 40% of the CO2
emissions from the UK cement and lime
industry. During 2024 we completed the
pipeline engineering pre-FEED and initiated
the capture plant pre-FEED study.
Alternative fuels
We continue to make strong progress
in substituting fossil fuels with waste-
derived or biogenic alternatives. We
achieve this through a range of both
long-standing and new alternative fuel
streams. The development of new fuel
sources requires collaboration with
suppliers, detailed testing to ensure the
material’s quality and consistency, as well
as regulatory support and kiln testing to
ensure emission limits are respected.
Unlike energy from waste plants, which
generate waste ash, the combustion of
alternative fuels in cement kilns not only
utilises the energy content to replace virgin
fossil fuels, but also incorporates the mineral
content of these materials in the cement,
in a process called ‘co-processing’.
We are exploring opportunities for
switching fuels in other parts of the
business. The burners within our asphalt
plants are responsible for over 60ktCO2e
each year. By switching to lower-carbon
and bio-based fuels we can reduce this
impact. During 2024, £0.6m capital
investment was approved to prepare six
more plants for fuel switching projects
to take place in 2025.
saving during trial
kgCO2e/£ revenue
kgCO2e/tonne
525tCO2e
(9)%
(9)%
saving per year
2,450tCO2e
HVO trial
Hydrotreated Vegetable Oil (HVO) offers a
flexible interim carbon reduction solution
until electric and hydrogen solutions mature.
In 2024 we carried out a trial of HVO at our
Raisby Quarry.
Click or scan to find out more
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Energy management
At the start of 2024, 98% of our operational
sites were covered by the ISO 50001 Energy
Management Standard. This figure has
reduced to 77% following the acquisition of
BMC. However the implementation of a new
Group-wide ESG reporting tool will allow for
the consistent monitoring and management
of energy consumption and efficiency at all
of the Group’s operations.
The introduction of a dedicated cross-
divisional Energy Delivery Group will drive
the continued focus and shared learning of
energy opportunities.
Increasing energy efficiency
One of our key carbon reduction levers
is to deliver improvements to operational
efficiency. This can be achieved by driving
out energy wastage through site surveys
and audits either focused on a specific
area such as compressed air leaks, or
by monitoring of idle times of plant
and machinery.
New equipment and technologies will also
provide improvements. Over £3m capital
investment was approved in 2024 for new,
more efficient plant equipment, with a
further £5m for replacement road haulage
vehicles. Additional electric vans and
forklifts have also been purchased.
Projects that consider the efficiency of
the manufacturing processes have also
delivered results. Kinnegad trialled a new
grinding aid for its CEM II product, which
resulted in an energy saving of 4kWh/t.
At our Hope Cement works, a project
commenced to replace both the cement
mill main motors, each of which are over
50 years old. The first motor will be installed
and commissioned in early 2025, with an
estimated annual saving of over 2GWh.
Our teams in GB have been using
operational performance data to track and
improve idle times of our on-site vehicles.
By engaging with operatives on waiting
times, site layout and eco training, we have
seen substantial reductions in percentage
idle times in the year of up to 35ppt.
Renewable energy
In 2024, work continued on the planned
17MW solar array at our Kinnegad Cement
plant in Ireland, with commissioning set
for early 2025. Our Wickwar block plant in
Gloucestershire had a 108kW roof mounted
array installed in May 2024, generating
over 65MWh since going live.
Energy Award
Our team in Ireland won the
best energy achievement in
construction at the Business
Energy Achievement Awards in
Dublin in October.
John Fennell, environment
manager for Breedon Ireland
South accepted the award,
which recognises businesses
and organisations that are
taking a leadership role
in sustainability. We were
celebrated for our outstanding
sustainable energy plans.
The collection of methane
from our Mullaghglass site
was highlighted as a strong
example of energy generation
benefits. By showcasing our
effective and cutting-edge
sustainable energy initiatives
we are constantly striving to
achieve more.
Energy 2024 highlights
Our largest rooftop
solar to date
In May 2024 our latest
renewables project went live
at our Wickwar block plant in
Gloucestershire
A 108kW roof mounted array
will generate over 20% of the
factory’s electricity needs,
saving over 20tCO2e per year.
Electric mixer trial
Reducing the carbon impact of
our transport fleet is one of the
more challenging aspects of
our decarbonisation roadmap
and we endeavour to move
more material via rail. However,
for our fleet of ready-mixed
concrete trucks, other solutions
are required.
In August we commenced a
three month trial of our first
fully electric concrete mixer
operating out of our Raisby
concrete plant to understand
the impacts on delivery
schedules, charging times,
health and safety and driver
satisfaction.
The results of the trial were
positive with a carbon saving
against the diesel of 4.5tCO2e
over the three month trial.
We will be exploring further
trial options in 2025.
Click or scan to find
out more
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Responsible use of natural
resources, positive impact
on biodiversity
Our focus on environmental
management
Breedon’s role in creating the places for
future generations through the production
of our essential building materials is clear.
However, the importance of protecting the
local environment in the areas we operate
now is just as key.
Understanding the impacts of our
operations and activities on nature
and the communities we operate is a
fundamental part of any environmental
management system. At the start of 2024
96% of our operational sites operated to
an externally certified ISO 14001 system.
This has decreased to 75% including our
newly acquired businesses, however the
importance of environmental compliance
and promoting our positive environment
impacts applies across the Group.
Through our corporate partnership with
the Institute of Environmental Management
and Assessment, we continue to develop
training materials for our colleagues to
promote environmental awareness.
Waste
We have continued to progress our
ambition to have zero general waste sent
to landfill. A new central contract for
our general waste collections has been
expanded into our Irish business with a
core element of the partnership to achieve
this milestone. We continue to improve
the quality of our waste data and remain
focused on operating to the waste hierarchy
by reducing the volumes of waste we
generate in the first instance, including
hazardous waste.
Breedon remains a net consumer of
waste given the large amounts of waste
derived fuels used in our cement kilns.
Through our collaboration with other
industries, we will continue to seek
opportunities to provide an outlet for
industrial wastes and secondary materials
that could act as a substitute for primary
raw materials. We are exploring outlets for
Breedon’s secondary materials as well, with
enhanced rock weathering projects and
substituting primary raw materials in some
of our other operations.
Air quality
Our sites are regulated by environmental
permits which place limits on emissions and
set conditions for the use of best available
techniques to mitigate our impacts.
Our cement works have the largest number
of conditions imposed and because of the
chemical composition of the input materials
and the process complexity, emissions of
sulphur dioxide, oxides of nitrogen and dust
are closely monitored.
Click or scan to view more
environmental performance data
Water
As at the end of 2024, over 40 of our
highest mains water consuming sites
have installed smart water meters. The
data provided has been used by our
environmental and operational teams to
identify several areas of improvement
resulting in savings of over 10,000m3 of
water in 2024 alone. The rollout of further
metering will continue in 2025.
In addition, we continue to maximise our
sites recycled water capabilities and work
with suppliers of admixtures to reduce
water demand in our products.
Water availability remains an important
aspect to Breedon’s operations. In the case
of ready-mixed and concrete products it is
a core ingredient in the manufacture of our
products. Therefore we continue to place
a strong emphasis on ensuring we manage
water responsibly.
With the inclusion of BMC into our portfolio,
around 6% of our production sites are located
in areas of high or extremely high water
stress, as classified by the World Resource
Institute’s Risk Atlas tool. As described in
our TCFD report on pages 59 to 66, the risk
of water scarcity in future years cannot be
ignored and so our focus on reducing reliance
on mains water and increasing our usage of
recycled water continues.
Following our latest CDP Water Security
disclosure we received a rating of B-, an
improvement from the previous C rating.
Nature and biodiversity
We aim to protect and enhance biodiversity
across all our operational sites through the
development and implementation of well-
designed biodiversity management plans
and restoration plans.
43 BAPS are in place across the Group and
planned actions are being progressed.
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Understanding our impact
on nature
Looking ahead, we need to better
understand the critical role that nature
plays in supporting our business across
our value chain and the ways in which our
activities impact upon nature. We began to
gather the information needed to fully map
and assess our value chain and adjust our
business to take a more strategic approach
to supporting nature and reducing activities
with negative nature outcomes.
In line with the TNFD guidance including the
LEAP approach, to date we have:
defined a study area across our business,
including aspects of our supply chain,
direct operations and wider value chain;
undertaken an initial review of our
key impacts and dependencies across
both our direct operations and our
supply chain;
established financial thresholds for
assessing business importance and
related risk across our sites;
assessed the ways in which identified
impacts and dependencies might create
risk and opportunities for our business
and the materiality of those risks and
opportunities; and
reviewed our business processes and
frameworks to understand the gaps
in how we account for nature in our
decision making and identified actions
to close these gaps.
An initial evaluation of our direct operations
showed that the most material risk category
for Breedon is reputational risk which is
driven by risk factors linked to pressures
on biodiversity. This is due to the proximity
of certain Breedon sites to protected or
conserved areas and/or key biodiversity
areas and highlights the importance of
minimising our site-level impacts on nature.
Click or scan
to find out more
Nature 2024 highlights
Biodiversity week
A company-wide ‘Biodiversity
week’ in May, showcasing
a range of fantastic activities
across our sites, including
a 24 hour ‘bio-blitz’ ecological
study at Mullaghglass that
was attended by 100 local
people and over 25 scientists
and ecologists.
The Irish Green Awards
Sustainability Team of the
Year 2024.
Biodiversity Awards
Cambusmore nominated
for MPA Biodiversity Awards
Innovation category.
Powmyre quarry nominated
for MPA Biodiversity Awards
Landscape Scale Restoration
category.
North Cave and Mullaghglass
sites are finalists in the MPA
Biodiversity Awards Planned
Restoration category.
Across the Group we have continued to plant trees and hedgerows, install bird and bat
boxes, and create hectares of grasslands, woodlands and water bodies.
Encouraging avian life
17 bird surveys carried out
in Ireland (38 since 2021)
including our Blackmountain
site having the first successful
Peregrine nesting in the
Belfast Hills since 1990 and
Mullaghglass having the first
breeding pair of Barn Owls in
the area in over 50 years.
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Future focus
Our commitment to carbon reduction,
responsible resource use and biodiversity
across the Group is resolute, with several
more projects planned for 2025:
roll-out of a new Group-wide ESG
reporting and management tool
to ensure our performance will be
accurately measured and improve our
rigour for external disclosures;
produce a climate transition
plan (in alignment with our SBTi
approved targets);
roll-out of additional water meters to
identify further water savings;
continue to progress the Peak Cluster
CCS project at Hope Cement Works;
develop a nature-focused approach for
consideration, alongside our existing net
zero approach;
continue to review and implement our
BAPs and maintain a strong focus on
managing our estate for biodiversity
while forging partnerships that further
enhance our positive impact on the
natural environment; and
enhance data collection in line with
the TNFD’s core and sector specific
metrics for the construction materials
sector and building a nature roadmap
that supports a strategic approach
to nature and prepares us for future
reporting requirements.
The results of our DMA may inform any
changes required to our Planet focus areas.
However, decarbonisation, ensuring Breedon
makes a positive impact on nature, and
playing our part in creating a more circular
economy, remain priority focus areas.
Planet performance data table
2020
2021
2022
2023
2024
YOY
change
Emissions intensity
Revenue kgCO2e/£
1.7
1.6
1.3
1.1
1.0
(9)%
Emissions intensity by core products
kgCO2e/t core products
47.2
44.2
46.3
43.9
40.0
(9)%
Energy Intensity by core products
kWh/tonne
75.0
68.3
71.7
70.5
65.9
(7)%
Alternative fuels substitution rate
% of kiln fuel GJ
45.2%
46.1% 48.5% 48.0%
48.1%
0.1ppt
Biofuel used
% of kiln fuel GJ
20.2%
19.5%
21.1%
18.4%
18.2% (0.2)ppt
Mains water
litres/tonne
–
14.5
13.7
16.5
14.6
(12)%
Total non-production waste generated
tonnes
–
–
– 6,140
4,189
(32)%
Trees planted
number
– 24,800
31,300 7,400
13,400
81%
Click or scan to view more Planet performance data
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Making a material
difference to society
Click or scan to find out
more about the People pillar
New target
Our aim is to generate £500m cumulative
social value by 2030
Our 4,500 colleagues are the heart of our business. Alongside our
focus on attracting talent, developing and empowering our workforce,
we also aim to be a good neighbour and have a positive impact on the
communities in which we work.
Continue to positively impact people
towards our target of 100,000.
A further 27,268 people were positively impacted
through our activities, bringing our cumulative total
to 82,052 people. We have upgraded our 2030
targets and will aim to generate £500m cumulative
social value from 2025.
Improve our data across colleagues to
help inform our diversity, equity and
inclusion plans.
Reviewed our onboarding processes to collect a
broader range of data for all job applicants and
new starters.
Make our practices fairer and more inclusive
for colleagues.
79% of our colleagues feel they are treated fairly
regardless of gender, age, seniority, disability,
ethnicity or sexual orientation.
Launch Management Essentials programme
and embed performance conversations with
our leaders.
Over 350 managers now trained and a further 250
managers enrolled on the 2025 training program.
Launch a new Employee Resource Group.
Created a cross-divisional Employee Resource
Group as part of our inclusivity strategy.
Recruit a Social Impact Manager to guide
further best practice across the Group and
improve our ability to demonstrate the social
value of our activities.
Group Social Impact Manager appointed to focus
on establishing a strong foundation and best
practices for demonstrating our social value.
Improve data to more accurately calculate
and report our social value impacts.
Data gap analysis informed the requirements
of a new tool that will create a unified data source
in 2025.
Undertake a social impact assessment for
each division.
Impact methodology for the Group agreed and
baseline established to inform social value targets
for each division.
What we said
Progress in 2024
Sustainability People
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Developing and empowering
a diverse, talented workforce
Outstanding colleague
engagement
Our Group employee engagement
score continues to remain high at 78%.
Our surveys are run by an independent
company and, when benchmarked, our
engagement score for 2024 was eight
percentage points above industry average
and eight percentage points above
companies of a similar size.
Pauline Lafferty continues to be our
Designated Non-executive Director (DNED)
for Workforce Engagement and during
2024 held a number face-to-face sessions
with colleagues across GB and Ireland.
Pauline reports back to the Board, and
this, combined with our regular People
updates and the Board’s frequent visits
to operational sites, allows the Board to
assess and monitor culture. We will run
further sessions in 2025, building on the
feedback that our colleagues provide, so
that we can continue to make Breedon a
great place to work.
We were pleased to have been featured
in the Sunday Independent list of Ireland’s
Best Employers 2024. We also won the
Most Effective Employee Engagement
Strategy award for our ‘Striving to Improve’
programme at the Ireland HR Leadership
and Management Awards.
Colleague support
and wellbeing
We are increasing our focus on wellbeing
and have improved the support available to
our colleagues, such as mental health, and
continue to raise awareness and end stigma
through employee stories and mental
health first aid.
Our Home Safe and Well programme has
progressed, and we have seen further
improvements to our facilities across the
business with support from our colleagues.
Our external partnerships play an important
role in supporting our colleagues and
during the year we launched the two new
partnerships shown above.
Lighthouse Construction
Industry Charity
We are working together on aspects of
physical and mental wellbeing, placing a
greater focus on our mental health first aiders,
with refresher courses for those already
trained to enable colleagues to stay current
on mental health support.
Elephant in the Room
An elephant sculpture, designed
collaboratively by colleagues and their
families, serves as a symbol of strength
and support for those facing mental
health challenges. It embodies the Group’s
dedication to fostering open discussions
about mental health and breaking the
associated stigma.
Sustainability People
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Gender representation
as at 31 December 2024
8
1
89%
11%
M
F
Executive management
964
157
86%
14%
M
F
Management roles
37
12
76%
24%
M
F
Senior leaders
3,837
682
85%
15%
M
F
All employees
A focus on diversity,
equality and inclusion
We pride ourselves on being a fair,
respectful and inclusive place to work,
where all our people feel they belong.
During the year, we have continued to
raise awareness of and celebrate diversity
through a variety of initiatives at a local level,
enabling colleagues to have a contribution
and feel safe to share their personal stories
and experiences.
We have actively listened to our colleagues
and established a working group on
inclusive PPE, recognising life stages,
disability, hidden disability and gender
that will be rolled out in 2025.
We created a new inclusive Employee
Resource Group with representation from
across our Group to make sure that action
plans benefit all our colleagues.
Our aim with these priorities is to engage
current and prospective colleagues
to build a fully inclusive environment
where people feel safe, respected, included
and themselves.
Leadership development
We have had outstanding feedback on our
Management Essentials Level 1 training
across the Group, which is aimed at our
supervisory and management teams with
more than 350 managers now trained and a
further 250 managers enrolled in 2025.
We have partnered with Cranfield Business
School on accelerated senior leadership
development for a number of senior leaders
in GB and Ireland, to help shape their
future roles.
Our focus in 2025 will be to embed the
learning and skills, so that competencies
become a tool that support our value added
performance conversations, providing
feedback, and helping us make more
consistent choices around developing
our talent.
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Connecting teachers to the
minerals industry at Leaton
We hosted a Teacher Encounter day to
provide a group of local teachers with an
insight into careers pathways within the
aggregates industry and an understanding of
how it can be linked to curriculum delivery.
Investment in early careers
Investment into our future talent
continues as a key focus of the Group’s
people strategy, bringing in fresh ideas,
perspectives and energy into the business.
Our early careers cohort saw us welcome
an additional 28 apprentices of which 18%
are female.
We were delighted to have four industry
placements from various universities across
England and Northern Ireland, providing
students with an opportunity to develop
their practical skills in a role directly relevant
to their vocational course.
Eight Large Goods Vehicle driver
apprentices were recruited across England
and Scotland in partnership with Seetec.
This infusion of apprentices brings vital
fresh talent and novel perspectives, helping
to revitalise the industry and ultimately
shape the future landscape of the sector.
Highlights for 2024 include:
we were once again awarded Silver
membership of The 5% Club, in
recognition of our commitment over
the past 12 months to earn and learn
opportunities across the UK as part of
building and developing our workforce;
three of our apprentices, Adam Boddy,
Alex Nolan and Connor Garner-Jones
were all recognised for their outstanding
achievements at the British Aggregates
Association Annual Conference Young
Industry Talent awards; and
Shaun Brecknell, Surfacing Operative
won Apprentice of the Year with
Telford College.
Supporting and developing
our suppliers
By collaborating closely with suppliers,
we strengthen relationships and drive
continuous improvement, fostering
mutual growth.
We have employed a dedicated Sustainable
Supply Chain Manager and, to support
and strengthen our supply chain, we have
introduced a risk-based pre-qualification
system, an updated Supplier Code of
Conduct and supplier audit.
Existing suppliers in Great Britain, including
400 high risk suppliers, were invited
to register on our new prequalification
system in December 2024.
Click or scan to find out more
Sustainability People
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Breedon is embedded in the local
communities where we operate, actively
engaging with stakeholders to understand
and respond to their needs. Through our
operations, we support local economies,
create employment and apprenticeship
opportunities, and partner with schools and
colleges to inspire the next generation.
Additionally, our contributions include
a robust volunteer programme, along
with financial and material donations,
reflecting our commitment to make a
material difference.
In 2024, we positively impacted 27,268
people through various community
partnerships, donations and volunteering.
Since 2021, we have positively impacted
82,052 people, achieving 82% of our original
2030 target to impact 100,000 people.
Given our progress, we have set a more
ambitious target. From 2025 we aim to
generate £500m in cumulative social value
by 2030. This new target is underpinned by
a robust approach, utilising financial proxies
from the Impact Evaluation Standard
framework to better measure and optimise
the positive impact Breedon generates.
Good neighbour plans
As part of our commitment to being a good
neighbour we have developed a structured
approach to community liaison that fosters
two-way, accessible communication. This
approach encourages transparency in
sharing our environmental performance
alongside the delivery of biodiversity,
geodiversity, and archaeological outreach
programmes. We also ensure regular
engagement through attendance at parish
council meetings, local consultations,
and active contributions to community-
based initiatives.
In 2024, we welcomed over 2,800 visitors
to our sites, including groups such as The
Russell Society, the Department for Energy
Security and Net Zero, the MPA, U3A
Groups, Institute of Quarrying Australia, and
students from the University of St Andrews,
Ullapool High School, East Norfolk Sixth
Form, Northumbria University, and
Bristol University.
Over 450 people from the local community
joined our annual Christmas celebration at
our Kinnegad site, and the event raised over
£3,000 for Youth Work Ireland Midlands,
a charitable organisation that supports,
educates and inspires young people in
Ireland. Our Dowlow site celebrated 125
years of operation with 350 local people
attending our Open Day to find out more
about the history of the site and our plans
for a sustainable future.
Positive impact across
our communities
pupils at Hope’s
Forest School
people positively
impacted in 2024
donated to local
schools
people positively
impacted
since 2021
1,236
27,268
>£17,500
82,052
Supporting outdoor play
and learning initiatives in the
Hope Valley
Hope Cement Works in Derbyshire actively
supported various outdoor play and learning
initiatives, including hosting an on-site
forest school, funding an outdoor classroom
and providing play equipment for local
schools, as well as sponsoring a Wilderness
Therapeutic Programme for Year 6 pupils
in the Hope Valley.
Click or scan to find out more
Sustainability People
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Volunteering and donations
Our financial donations increased by
33% since 2023, with £603,770 donated
in 2024 to local and charitable causes.
This was further bolstered by donations
of materials totalling over 1,500 tonnes,
that supported local projects such as
the creation of a car park area for a new
community sports pavilion in Lockington-
cum-Hemington, the repair of pathways at
North Cave playing fields and the creation
of wheelchair access to student allotments
at Hope Valley College.
Across Breedon, our colleagues have
access to one day paid volunteering each
year and we introduced the Neighbourly
platform to connect colleagues with over
30,000 local charities and causes.
Colleagues have dedicated their time to raise
funds for a range of charities, including Brake,
the road safety charity, and veterans’ support
initiatives such as The Great Tommy Sleep
Out for the Royal British Legion, the 13 Bridge
Challenge for SSAFA, and the Cateran Yomp
for the Army Benevolent Fund.
Throughout the year 2,155 volunteering
hours were delivered across the Group. By
working with local stakeholders, colleagues
have supported initiatives that made a
material difference to the communities where
we operate, including the development of
outdoor play and learning areas, supporting
local food and baby banks.
A specific focus was on creating accessible
green spaces and projects included
constructing new footpaths at Sorn
Woodland Walk, creating a new garden
for an Action For Children residential unit
in Stornoway, and laying a disabled access
path leading to a woodland studies shed for
Ysgol Hafod Lon near Minffordd.
Our desire to make a material difference
in the communities where we operate
extends to our sites in the US, where
colleagues supported a range of good
causes including St. Louis Children’s
Hospital, the American Heart Association
and the Alzheimer’s Association.
In addition, RBM, the building materials
division of BMC, donated a new enclosed
trailer to the Berkeley Fire Department in
St. Louis, Missouri. The trailer will be used
by the fire department’s outreach program
to deliver food and clothing throughout the
year. It will also provide essential storage
and allow the department to expand its
service area, helping more families in the
local community.
Volunteering and community 2024 highlights
Emergency
services support
Providing Bleanau Ffestiniog
Fire Station with access to our
Ffestiniog quarry for training
exercises.
Green social prescribing
Funding a support worker at
the Belfast Hills Partnership
to connect young people in
Belfast with nature to promote
positive mental and physical
wellbeing.
Supporting our
local teams
Extending our partnership
with Leicester Tigers Rugby
Club through supporting
the women’s team for
the 2024/2025 season.
We also support grass
roots sports clubs including
Teesside Powerchair Football
Club, Bethesda Rugby
Club and Carryduff U15
Girls Hurling team.
Wetland
maintenance
Cambusmore Quarry
collaborated with the Callander
Woodland Group to clear
overgrown pathways and
enhance drainage in wetland
areas whilst the North Cave
team continued their ongoing
partnership with the Yorkshire
Wildlife Trust to restore the
former quarry area into a
thriving wetland.
Social enterprise
support
Our colleagues supported
Green Routes, a Stirling-
based charity, in improving
accessibility to their outdoor
learning space for young
people with additional support
needs and our team at Breedon
on the Hill quarry donated
over 100 tonnes of material to
help the Sunnyside Rural Trust
improve their car park and
paths around the centre which
trains people with learning
disabilities in horticultural skills.
Community food
Donating 150 tonnes of
materials from our Powmyre
quarry to kickstart a community
supported agriculture scheme
as part of the Sustainable
Kirriemuir project.
Rural crime reduction
Sponsoring an Automated
Number Plate Recognition
crime reduction initiative with
Derbyshire Police.
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Future focus
People performance data table
2020
2021
2022
2023
2024
YOY
change
Proportion of women in
workforce
-
13%
14%
15%
15%
-
Number of women at
management level
-
119
143
146
157
8%
Employee training hours
–
13,651
21,919
22,697
23,095
2%
People positively
impacted
-
11,114
17,814
25,856
27,268
5%
Community/charitable
financial donations
- £154,906 £318,097 £455,305
£603,770
33%
Community/charitable
material donations (t)
-
513
669
3,273
1,555
(52)%
Neighbour complaints
72
45
29
26
15
(42)%
Click or scan to view more People performance data
To build on our successes in 2024, our focus
going forward will be to:
increase employee awareness,
knowledge and engagement through
improved communication;
develop a compelling and inclusive
offering of benefits to our colleagues and
launch a new flexible benefits platform;
finalise a mental health framework
through our new partnerships and in
collaboration with all colleagues;
further growth in our early careers
pipeline and further develop
our attraction pathways into the
organisation;
focus on driving and embedding
performance conversations as we seek
to proactively manage our talent pipeline
and succession proactively;
implement a new Group-wide ESG
reporting and management tool and
a new system for quantifying social
impact; and
embed our new social value
methodology ensuring social value
is delivered through our colleagues,
customers and supply chain partners.
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Making a material
difference to the built
environment
Click or scan to find out
more about the Places pillar
Our products play an important role in building the places and
spaces around us. With the increasing drive towards more
sustainable construction, we recognise it is our responsibility to
provide our customers with innovative, lower carbon and more
sustainable solutions. We do this through our focus on research
and development, innovation and collaboration.
Make further progress towards our previous
2030 target to achieve 50% of our asphalt
and concrete sales revenue from more
sustainable products.
Sales of asphalt and concrete products with more
sustainable attributes rose from 40% in 2023
to 48% in 2024.
As we were on track to exceed our 2030 target,
we have upgraded our ambition still further.
Increase the proportion of CEM II sales, and
install additional silos to enable the use of
CEM II downstream.
Additional silos installed and CEM II sales increased
from 30% to 37%.
Publish Environmental Product Declarations
(EPDs) for Hope’s cement products.
EPDs for Hope’s cement products published in
May 2024.
What we said
Progress in 2024
Sustainability Places
New target
Our target is to achieve 50% of the Group’s revenue across
the concrete, asphalt, blocks, brick and tile portfolio from
the Breedon Balance range by 2030
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The first Biophalt® trial in Ireland
In October 2024, we were proud to be part of
a collaboration to conduct the first Biophalt
trial in Ireland – offering a lower carbon
asphalt using a plant-based alternative to
traditional bitumen that also includes 40%
recycled materials.
1 million cubic yards of
CarbonCure™ concrete in the US
Applicable to both precast and ready-
mixed, the CarbonCure™ solution injects
captured CO2 directly into concrete while
it is being mixed.
Click or scan to find out more
Click or scan to find out more
Sustainable products
Our focus is on making our products
and services even more sustainable.
Some examples of our progress
in 2024 include:
increased sales of products with
sustainable attributes from 40% to 48%
and sales of Breedon Balance products
from 28% to 34% of revenue;
significant increase in production
of warm mix asphalt;
increased usage of RAP in asphalt
production;
addition of biogenic materials into
polymerised and standard bitumens;
tar bound planings processing to
produce foam mix asphalt, offering our
customers both cost-saving potential
and significant CO2 savings;
successful switch to CEM II as the main
cement type in many of our ready-mixed
concrete plants;
increased focus on the usage of ground
granulated blast-furnace slag to facilitate
lower carbon standard concrete mixes;
supply of concrete containing incinerator
bottom ash aggregate to livestream
projects in Scotland and England
– including the first ever project in
England; and
our BMC division in the US achieved
a milestone of delivering over one million
cubic yards of high-quality, lower
carbon concrete made with the
CarbonCure™ solution.
Our focus on innovative, lower
carbon and more sustainable
products and services
Environmental Product
Declarations
As part of our ongoing commitment to data
transparency and making it easier for our
customers to make informed choices we
have continued to develop our EPD offering
during 2024.
Following the verification of Hope Cement’s
EPDs in May 2024, we now have EPDs for
all our cement products. Breedon Ireland
is working with EcoChain on lifecycle
assessments for all their asphalt mixes,
aiming for verified EPDs in 2025.
In addition, we have achieved PAS
2080 certification, enabling customers
to reduce carbon emissions and costs
on their projects.
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Adapting our operations
We continue to invest in the development
of our operations to further enhance
our capabilities in making our products
more sustainable.
We are achieving this through investment to
enable us to use more recycled or secondary
materials in our plants, the introduction
of new technologies to capture and store
carbon and by introducing new materials
and additives into our production processes.
We are also developing our systems, data
capture and reporting to enable us to
calculate the carbon intensity of our products
as we look to provide our customers with the
sustainability data they need.
During 2024 we developed a process
to calculate the carbon intensity for
our delivered cementitious and asphalt
products. In 2025 we will explore the
possibility of allowing customers to access
a portal to extract the carbon data on
products supplied.
Click or scan to view more Places performance data
To build on our successes of 2024, our focus
going forward will be to:
further establish our Breedon Balance
range and continue to make progress
towards our 2030 target of 50% of our
sales to come from this range;
continue to invest in our production
capabilities for more sustainable
processes and materials;
grow our innovation pipeline and embed
processes and governance to drive
delivery;
invest in our research and development
facilities and capabilities; and
continue to expand our EPD offering
to a wider range of our products.
Research, development
and innovation
We understand that innovation and an
investment in research and development is
vital for our business.
Our focus is on enabling the development of
new, more sustainable products, processes
and services; improving efficiencies,
reducing costs and differentiating ourselves
from our competitors to enhance our
position as an industry leader.
Collaboration and influence
Working in partnership with our supply chain
and customers is a key part of our strategy.
Our strong representation on a number
of industry committees and associations
ensures that we remain informed with
the latest developments and are able to
contribute to developing policies.
We actively engage with and support
research groups and academia, providing
expertise and resources on a wide range
of research and development projects.
Places performance data table
2020
2021
2022
2023
2024
YOY
change
Sustainable concrete and asphalt sales revenue1
% of total concrete and asphalt revenue
-
25%
37%
40%
48%
8ppt
Breedon Balance concrete and asphalt sales revenue1
% of total concrete and asphalt revenue
-
-
-
28%
34%
6ppt
% product sales covered with products holding
a valid Environmental Product Declaration
-
-
-
-
18%
-
% of products that qualify for credits in sustainable
building design and construction certifications
e.g. BREEAM
-
-
-
-
70%
-
Future focus
1 Revenues from BMC in 2024 not included
Sustainability Places
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Ensuring that we
operate responsibly
and transparently
Click or scan to find out
more about the Principles
pillar
Underpinning our Planet, People and Places pillars, our fundamental
operating Principles ensure that we operate responsibly through our
continuous focus on health and safety, quality, ethics and integrity,
governance and stakeholder engagement.
Introduce a new reporting and Integrated
Management System platform.
Enhancements to our integrated Breedon
Management System, incident investigation,
and reporting processes have improved oversight
and learning.
Extend BES 6001 certification across more
of our concrete sites.
All of our GB and Ireland concrete sites are now
certified to BES 6001.
Achieve PAS 2080 Carbon Management
accreditation.
Achieved PAS 2080 accreditation for Breedon
Trading Limited.
Complete the DMA and prepare for
Corporate Sustainability Reporting
Directive-aligned reporting.
Initial DMA research conducted and made
progress on preparation for relevant emerging
reporting requirements.
What we said
Progress in 2024
Sustainability Principles
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High potential incidents are those which
carried high risk but where the outcome
was benign. They provide good learning
and improvement opportunities and we
have increased our emphasis on reporting
them in recent years in order to improve
our overall safety outcomes. In 2024 these
were significantly reduced, evidence
of the effectiveness of our strategy to
improve our safety culture.
Health and safety initiatives
In 2024, we launched key initiatives that will
continue into 2025 and beyond.
Breedon’s Five Alive rules and the
Significant Risk Elimination program
have driven a stronger safety culture
by focusing on critical behaviours and
addressing significant risks.
Enhancements to our Breedon
Management System, incident
investigation, and reporting processes
have improved oversight and learning.
Additionally, a renewed focus on
occupational health, particularly health
surveillance, ensures employee wellbeing
remains a priority.
These efforts reflect our commitment to
creating safer, healthier workplaces and
driving continuous improvement across all
aspects of our operations.
Keeping our people
safe and well
Health and safety
Breedon made significant progress in
enhancing its safety culture in 2024, with
stronger leadership engagement and a
focus on fostering a safer, more resilient
working environment. Highlights include:
roll out of Five Alive rules across
the Group; and
6% improvement in combined LTIFR.
These efforts have reinforced the Group’s
commitment to prioritising the wellbeing of
its workforce and building a robust safety
foundation.
Looking ahead, Breedon will continue
to advance its safety agenda by driving
cultural change and improving risk
management across the business.
Through a focus on continuous
improvement and strategic leadership,
the Group is committed to ensuring
sustainable safety enhancements and
maintaining a strong focus on protecting
employees and contractors.
Safety performance
Breedon’s safety performance in 2024
demonstrated improvements in key
areas, reflecting a strong focus on safety
and leadership.
Our combined LTIFR performance reflects
a 6% improvement against 2023. This was
due, in part, to a reduction in employee lost
time incidents in 2024, however this masks
an increase in contractor LTIFR which is an
area of focus for us.
74% of our operational sites have certified
ISO 45001 health and safety management
systems. Strong levels of reporting were
maintained throughout the year, reaffirming
Breedon’s commitment to transparency and
ongoing safety enhancements.
We have continued to increase the
number of Visible Felt Leadership site
visits throughout the year, demonstrating
stronger management and leadership
engagement in promoting our
safety culture.
Improved safety
and performance outcomes
at RAF Leeming
Removing the need for technicians to walk
around plant taking temperatures or samples
Click or scan to find out more
Sustainability Principles
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Click or scan to view more Principles performance data
We aim to operate compliantly, transparently
and with integrity, ensuring ethical operations
and responsible sourcing. In 2024 a further
5,746 hours was spent by colleagues on
training covering anti-bribery and corruption,
competition law, whistleblowing, cyber
security and modern slavery.
Responsible procurement
In 2024 we strengthened our procurement
function, appointing a dedicated
Sustainable Supply Chain Manager
and two senior Category Managers to
support compliance with our sustainable
procurement policy, supplier code of
conduct, and Modern Slavery Statement.
Highlights this year have been:
a risk matrix approach to supplier
management implemented and a tender
to select our supplier pre-qualification
partner, Avetta; and.
400 strategic or high risk suppliers in
GB were invited to register with Avetta
in December 2024.
By collaborating closely with suppliers,
we strengthen relationships and drive
continuous improvement, fostering mutual
growth. This proactive approach reinforces
our commitment to responsible sourcing
and ethical procurement.
Ethics and
integrity
Promoting reuse through our
responsible supply chain
Following a major office refurbishment
programme at Breedon’s head office, Biffa
and the Derby Furniture Alliance ensured
that the old furniture was reused rather
than recycled or treated as waste.
Click or scan to find out
more
Good governance
»100
Stakeholder engagement
»96
More detail on our other focus
areas for Principles:
Principles performance data table
2020
2021
2022
2023
2024
YOY
change
Combined LTIFR
(employees and contractors)
per million hours worked
3.0
3.1
3.1
3.5
3.3
(6)%
Combined TIFR
(employees and contractors)
per million hours worked
18.0
19.8
17.2
17.0
17.7
4%
CDP score – Climate Change
-
-
-
B
A-
-
CDP score – Water Security
-
-
-
C
B-
-
Number of hours employees
compliance training
-
-
-
7,356
5,746
(1,610)
Supply chain audits completed
-
-
-
-
14
-
In addition to our ongoing focus around
existing targets and strategies, in 2025
we will be focusing more explicitly on:
the materiality of our focus areas and
preparation for relevant emerging
reporting requirements ;
implementing enabling systems and
embedding Significant Risk Elimination
thinking across the Group to improve our
health and safety data and performance;
ensuring all high-risk suppliers are
registered within the Avetta pre-
qualification system;
launching new supplier and payment
forms to ensure we capture all the
required information for risk assessment
and compliance to our supplier code of
conduct; and
conducting a further 34 supplier audits.
Future focus
Sustainability Principles
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Reporting requirement and key
performance information
Relevant policies
Page reference
Environmental matters
Our net zero targets were
validated by the Science
Based Targets initiative
(SBTi)
Climate Transition Plan
developed
Location-based carbon
intensity reduction of 9% in
comparison to 2023
Energy and Carbon – Outlines our
commitment to operating our business
in a manner that ultimately eliminates its
contribution to global warming.
Environment Policy – Seeks to protect the
environment, prevent pollution, mitigate
our environmental impacts on surrounding
communities and improve sustainable
development.
Circular Economy – Our commitment to the
principles of the circular economy and the
responsible use of resources.
Biodiversity Policy – Our commitment to
protect and enhance biodiversity across all
our operational sites.
Sustainability Policy – Our commitment
to ensure that our actions and decisions
are sustainable, balancing the long-term
economic, social and environmental impacts
of our activities for the benefit of all our
stakeholders.
More information:
TCFD
»59 to 66
Related principal risks:
Climate change
»52
Land and mineral
management
»53
Competition
»54
Laws, regulations
and governance
»56
Supply chain
and input costs
»57
Climate-related financial disclosures
Reported against the
recommendations of the
Taskforce on Climate-related
Financial Disclosures
Energy and Carbon Policy – Outlines our
commitment to operating our business
in a manner that ultimately eliminates its
contribution to global warming.
More information:
SECR table
»75
TCFD
»59 to 66
Related principal risks:
Climate change
»52
Laws, regulations and
governance
»56
Reporting requirement and key
performance information
Relevant policies
Page reference
Employees
3.30 combined (employees
and contractors) LTIFR per
million hours worked
17.7 combined (employees
and contractors) TIFR per
million hours worked
78% employee engagement
score/ employees feel proud
to work for Breedon
43% of Board positions held
by women
Business Code of Conduct – Affirms our
commitment to high standards of ethical
conduct in all our business dealings.
Health, Safety and Wellbeing Policy – Our
commitment to preventing injuries and
work-related ill-health by achieving and
maintaining the highest standards of health,
safety and wellbeing, through continuous
improvement and the promotion and sharing
of good practice.
Diversity and Inclusion Policy – We value
and respect the differences that make each
person unique and we aim to create an
environment where all our colleagues can be
themselves, feel valued and respected and
able to give their best.
Social Responsibility Policy – We act
in a responsible and ethical manner and
are actively and positively present in the
communities where we operate.
More information:
Non-financial KPIs
»41
Employee engagement
»82
Board composition
»102 to 103
Related principal risks:
People
»54
Health and safety
»55
Laws, regulations
and governance
»56
Human rights
Continue to train over 1,200
employees to identify
signs of modern slavery
and human trafficking
for which we have a zero
tolerance policy
Improved our supplier
pre-qualification and audit
process and auditing 14 high
risk/strategic suppliers in GB
Anti-slavery Policy – Outlines Breedon’s zero
tolerance approach to modern slavery in our
business or supply chains.
Modern Slavery Statement 2024
Supplier Code of Conduct – Establishes the
minimum standards that must be met by any
entity that supplies products or services to
the Group.
Sustainable Procurement Policy – We work
collaboratively with our suppliers to create
a procurement process that not only meets
legal requirements but also contributes
positively to society and the environment.
Whistleblowing Policy – We have an
independent grievance and whistleblowing
process that allows concerns and challenges
to be raised (anonymously if needed),
without fear of reprisal.
More information:
Responsible
procurement
»93
Related principal risks:
People
»54
Laws, regulations
and governance
»56
Supply chain
and input costs
»57
Sustainability Non-financial and Sustainability Information Statement
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Strategic report Governance Financial statements Additional information
The Board are fully aware
of and understand their duties
under the Companies Act
2006 Section 172 and have
established a framework
for determining those
matters within in its remit.
Our Section 172(1) statement identifies
our stakeholders, gives examples of key
decisions taken by the Board in 2024 and
how they were considered in that decision-
making process, and reports on how these
decisions are connected to our business
model and overall corporate strategy.
The directors believe that they have acted
in good faith in a way which is likely to
promote the success of the Company
for the benefit of its members and other
stakeholders through the decisions they
have taken during 2024.
Section 172(1)
statement
The likely consequences of any decision
in the long term
Investment case
»04
Business model
»16
CEO review and strategy
»22
CFO review
»42
The interests of the Company’s employees
People
»81
Culture and colleague engagement
»107
Diversity reporting
»83
Whistleblowing
»117
The need to foster business relationships
with suppliers, customers and others
Market review
»10
Business model
»16
Operating reviews
»32
Sustainability
»69
The impact of the Company’s operations
on the community and the environment
Market review
»10
Operating reviews
»32
Managing our risks and opportunities
»48
Sustainability
»69
The desirability of the Company maintaining a
reputation for high standards of business conduct
Business model
»16
Managing our risks and opportunities
»48
Governance report
»100
Whistleblowing
»117
Code compliance
»123
The need to act fairly as between members
of the Company
Sustainability
»69
Culture and colleague engagement
»107
Engaging with shareholders
»109
Section 172(1) statement
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Colleagues
Customers and suppliers
Communities
Investors and lenders
Regulators, local government,
industry associations
Key concerns
Physical working conditions
Pay and benefits
Communication
Opportunities for
development and training
Health, safety and wellbeing
Sustainability
Product development
Service levels
Sustainability commitments
Product quality
Payment practices
Cost
Noise
Transportation routes
Health and safety
Environment
Communication
Support for local causes
Governance
Profitability and return
on investment
Sustainability commitments
Dividend policies
Environment
Strategy
Climate change
Emissions and discharges
Site restoration and aftercare
Health and safety
Logistics practices
Planning compliance
Direct methods
of engagement
Colleague focus groups
Colleague groups and
social committees
DNED for Workforce
Engagement
Personal development
reviews
In person engagement
Contracts and terms
of business
Tender quotations
Targeted consultations
360 feedback
Local liaison meetings
Good neighbour plans
Community events
Site tours, open days
School visits
Capital Markets Event
Site visits and field trips
One-to-one meetings
Group meetings
Investor conferences
Brokers’ contacts
AGM and General Meetings
Regulator visits and meetings
Liaison with local MPs and
government offices
Participation in industry
associations
In-direct methods
of engagement
Colleague engagement
surveys
Intranet, post, emails,
newsletters, notices
Third-party engagement
Website
Industry associations
Social media
Letters, emails, notices
Websites
Website
Annual Report and Accounts
Social media
Mandatory returns
and applications
Notices
Value created
Improved engagement
with colleagues ensures we
develop, motivate and retain
our valued workforce while
promoting and attracting new
colleagues who want to work
for us.
Engaging with our customers
helps us deliver excellent
customer service and build
relationships to enable us to
get the right product, to the
right place, at the right time for
the right price. Engaging with
our suppliers helps us deliver
a sustainable supply chain and
circular economy.
Positive engagement with
our communities ensures
that we understand and take
into account their concerns
and needs so that we can
address these and improve the
communities that we live and
work in.
Our engagement with
investors and lenders
ensures that they have a clear
understanding of our business
and objectives and are
prepared to continue with their
financial support.
Through our engagement
we are able to respond and
contribute to sector needs
and requirements, deliver on
compliance and regulatory
standards, and have input in
their development.
Section 172(1) statement
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Context
Our strategy has at its core the delivery
of profitable growth through the efficient
provision of essential materials to
structurally-attractive end-markets and
the execution of carefully considered
acquisitions in target geographies.
The Board keeps strategy under review
and in 2024 announced an evolution of
the Group’s strategy, retaining an emphasis
on profitable growth underpinned by a
focus on the core driving forces of ‘Expand’
and ‘Improve’.
Consideration of S172(1) stakeholders
Whilst day-to-day authority on the delivery
of the strategy is delegated to the executive
directors and the senior management team,
the Board receive regular updates at each
meeting on key activities, progress and
decisions taken, thus maintaining oversight
of the execution of the strategy and how
those activities and decisions impact
our stakeholders.
Value created
The evolved strategy will concentrate on:
Expand
balance M&A with organic growth
by supplying essential materials to
structurally-attractive end-markets that
benefit from long-term growth dynamics,
ensuring we are well-positioned in high-
demand sectors; and
Improve
replenishing materials, unlocking
efficiencies and driving innovation
to maximise the assets we own and
acquire, ensuring that every operation
is optimised for performance and value.
Board decisions
2024
stakeholder
impact
Evolving strategy
The Board recognise the critical
role stakeholders play in the long-
term success of the Company and is
committed to building sustainable
and resilient relationships with them.
Further information about the Board’s
approach to engagement with our
stakeholders is set out on page 96.
Our values and culture, set out on page
108, are key to how Breedon conducts
its business and are an integral part of
decision-making.
How we have engaged with investors
in 2024 can be found on pages 109 to 111.
Stakeholder engagement provides the Board with insight as to what matters most
to our stakeholders. The Board values the feedback that this engagement provides,
which allows us to build trust, balance interests, needs and concerns, and make
better decisions for all those affected.
Section 172(1) statement
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Context
The acquisition of BMC was a major
strategic move by the Group and the
Board were closely involved in all aspects
of the transaction; starting with the initial
evaluation conducted by the executive
team to explore the US as a potential third
geographic platform for the Group all the
way through to the successful completion of
the acquisition and subsequent integration.
Consideration of S172(1) stakeholders
Investors
The Board needed to balance the clear
attractiveness of the US market with
the consideration that many investors
had acquired their shares in Breedon on
the basis of the Group being a focused
UK and Ireland business. Following our
announcement of our intention to explore
a third platform the Board closely reviewed
investor feedback and requested further
analysis of the market opportunity, the
nature of the businesses that Breedon
might seek to acquire and likely valuations.
Due diligence on BMC was conducted by
third parties and the Board commissioned
an independent report on valuation
and financial effects of the transaction.
Communities, customers and suppliers
The acquisition of BMC was not expected
to impact Breedon’s existing communities,
customers and suppliers given that BMC
is based in a wholly separate geography;
however the Board focused on how BMC
engaged with its communities, its reputation
in the local market and the sustainability
characteristics of the acquired business,
including the extent and the quality of the
acquired reserves and resources.
Colleagues
A key element of focus for the Board
was the extent that there would be a
cultural alignment between existing
Breedon colleagues and their new BMC
colleagues. Independent due diligence
was commissioned involving interviews
with senior BMC management to discuss
how BMC’s values aligned with those of
Breedon. Following the acquisition there
are now opportunities for both Breedon
and BMC teams to spend time in and learn
from each other’s businesses, together with
longer-term secondment opportunities.
Value created
The establishment of a third geographic
platform has been a key strategic
priority for the Group. The acquisition
of BMC is intended to be the first stage
in the development of a significant US
business over time, which will reduce
the dependency of the Group on the UK
and Irish markets and provides opportunity
for future value creation.
The acquisition
of BMC
Context
The Board ensures that there is a strong
focus on the alignment of culture and
values across the Group. The Board have
implemented an Employee Stock Purchase
Plan for US colleagues, similar to that which
is currently offered to colleagues in both the
UK and Ireland.
Consideration of S172(1) stakeholders
Colleagues
Providing the opportunity for all our
employees to save and purchase discounted
shares and become shareholders in the
wider Group.
Value created
With nearly 600 colleagues in the US,
the implementation of a stock purchase
plan for our US colleagues, who have come
from a previously family-owned business,
is instrumental in realising the value of being
part of a listed entity.
A stock purchase plan enables colleagues
to benefit financially through providing
an opportunity to share in the long-term
success of the Group.
US share scheme
Section 172(1) statement
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Context
The Board and Sustainability Committee
have revised carbon emission targets with
the aim to achieve a 23.3% reduction in
absolute gross scope 1 and 2 emissions, and
scope 3 emissions from purchased clinker
and cement by 2030. Targets associated
with social value and our Breedon
Balance products were also rebased.
Consideration of S172(1) stakeholders
Customers
Through engaging with our customers
we understand their growing need for lower
carbon products.
Communities
A reduction in carbon emissions has a
positive impact on the local communities,
nature and biodiversity in which they live.
Suppliers
Encouraging our suppliers to provide lower
carbon and more sustainable products and
use efficient and new technologies.
Colleagues
Employee engagement has demonstrated
the importance of sustainability in
attracting and retaining talent.
Value created
Operational efficiencies, trials of new
equipment and technologies, and
increasing use of alternative fuels will
accelerate our reduction of carbon use
across the Group.
Revised
carbon targets
Section 172(1) statement
Context
GB Cement is dependent on rail fleet to
deliver product to our cement terminals
for onward haulage to internal and external
customers in a sustainable way. Targeted
investment for the replacement of our old
tankers with a long term lease of 54 JPA
wagons was provided through thoughtful
capital allocation.
Consideration of S172(1) stakeholders
Investors
Consideration given to outright purchase
and alternative leasing arrangements
for whole-of-life costing with delivery
of associated cost reduction.
Communities
Optimisation of logistics and increased
efficiencies reducing impact on the
environment through a reduction in the
number of rail movements.
Customers
Greater reliability, improved performance
and service delivery together with
efficiency enhancements should bolster
our service offering on critical infrastructure
projects across the UK.
Suppliers
Increase value add back into the
industry with sensors and availability
of data analytics to support on safety
improvements across the supply chain.
Value created
Carefully targeted investment on the
replacement of end-of-life key assets
ensures the future success of the Company
as a whole. This investment will provide new
data-driven insights into wagon safety and
performance, operational efficiencies and
real time tracking.
Through cycle
investment
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Strategic report Governance Financial statements Additional information
Board of Directors
»102
Corporate governance statement
»104
Board in action
»105
Culture and colleague engagement
»107
Engaging with shareholders
»109
Audit & Risk Committee report
»112
Nomination Committee report
»118
Sustainability Committee report
»121
Compliance statement against the Code
»123
Directors’ Remuneration report
»129
– Annual statement
»129
– Remuneration at a glance
»133
– Directors’ Remuneration Policy
»134
– Annual report on Remuneration
»139
Directors’ report
»147
Statement of directors’ responsibilities
»150
100
Breedon Group plc Annual Report and Accounts 2024
Strategic report Governance Financial statements Additional information
Independence
Independent
Non-independent
4
3
Non-executive
tenure
Carol Hui, OBE
Pauline Lafferty
Helen Miles
4 years, 8 months
3 years, 9 months
3 years, 11 months
5 years, 5 months
Ethnicity
White
Ethnic minority
Board
2
5
Audit & Risk
1
3
Remuneration
1
3
Nomination
2
3
Sustainability
2
3
Gender
Male
Female
Board
3
4
Audit & Risk
3
1
Remuneration
3
1
Nomination
3
2
Sustainability
3
2
Meeting
attendance
Board
Audit & Risk
Remuneration
Nomination
Sustainability
Amit Bhatia
6/6
–
–
3/3
3/3
Rob Wood
6/6
–
–
–
–
James Brotherton
6/6
–
–
–
–
Carol Hui, OBE
6/6
4/4
4/4
3/3
3/3
Pauline Lafferty
6/6
4/4
4/4
3/3
3/3
Helen Miles
6/6
4/4
4/4
3/3
3/3
Clive Watson
6/6
4/4
4/4
3/3
3/3
Amit Bhatia
8 years, 5 months
Clive Watson
Corporate governance at a glance
As at the date of this report, our Board comprised the Chair, four
independent non‑executive directors and two executive directors.
There is a clear division of responsibilities between the Chair, the SID
and the CEO,
Chair
Senior Independent
Director
Chief Executive
Officer
Ensure the Board is
effective in setting
and implementing
the Group’s direction
and strategy.
Oversee the operation
of the governance
framework.
Chair the meetings of
the Company, Board
and Nomination
Committee.
Ensure the Board is
effective in all aspects
of its role, including
its legal, regulatory
and shareholder
responsibilities.
Maintain dialogue with
the CEO and the Board
on important and
strategic issues.
Act as a sounding board
for the Chair and other
members of the Board.
Be an alternative
point of contact for
shareholders.
Work with the Chair,
Board and shareholders
to resolve significant
issues.
Obtain a balanced
understanding of the
issues and concerns
of shareholders.
Lead the performance
evaluation of the Chair
on behalf of the Board.
Oversee the
operational day-to-day
management of the
Group’s businesses
in line with the
strategy and long-
term objectives.
Make decisions
affecting the operations,
performance and
strategy of the Group’s
businesses, except for
matters reserved to the
Board or Committees.
Implement the
strategy and long-
term objectives,
annual budget and
operating plan.
Board overview
Breedon Group plc Annual Report and Accounts 2024
101
Strategic report Governance Financial statements Additional information
Board
Skills matrix
Strategy
Sector
ESG
Finance/accounting
Risk/internal control
Legal
Workforce engagement/remuneration
Governance
Listed company
Cyber/technology
Amit Bhatia
Chair of the Board
N
S
Independent: No
Amit was appointed to the Board in August
2016, appointed Deputy Chairman in April
2018 and Chair in May 2019.
Experience
Amit has over 20 years’ corporate finance
and private equity experience. He is a
founding Partner at Summix Capital, a
strategic land and property fund. He was
Executive Chairman of Hope Construction
Materials until it was acquired by Breedon
Group in August 2016 when he joined the
Board as a non-executive.
Other positions held
Director, Queens Park Rangers Football Club
Partner at Summix Capital
Managing Director – AyBe Capital Advisers
Limited
Rob Wood
Chief Executive Officer
Independent: No
Rob was appointed to the Board in March
2014 as Group Finance Director and took
the position of Chief Executive Officer in
April 2021.
Experience
Rob has over 20 years’ experience in the
international building materials industry.
He qualified as a chartered accountant
with Ernst & Young and subsequently
joined Hanson plc where he held a number
of senior positions including Finance
Director Brick Continental Europe, Finance
Director Building Products UK and Chief
Financial Officer Australia and Asia Pacific.
Following the acquisition of Hanson plc by
HeidelbergCement AG, Rob returned to
the UK and joined Drax Group plc as Group
Financial Controller. During his time at Drax
he also spent a period of time as Head of
Mergers & Acquisitions.
Other positions held
None
James Brotherton
Chief Financial Officer
Independent: No
James was appointed to the Board in April
2021 as Chief Financial Officer.
Experience
James joined Breedon in January 2021.
Previously he was CFO of Tyman plc
between 2010 and 2019, prior to which he
was Director of Corporate Development.
Earlier in his career, James worked in
investment banking roles at Citi and HSBC,
after qualifying as a chartered accountant
at Ernst & Young.
Other positions held
Director, The Quoted Companies Alliance
Member of the Panel on Takeovers
and Mergers
Member of the Pre-Emption Group
Our Board comprises an executive leadership
team with extensive knowledge of the
international construction materials industry,
supported by experienced non-executive
directors who bring a wealth of governance
disciplines and a breadth of valuable external
perspective to our business.
Board leadership
Key
A
Member of the Audit & Risk Committee
R
Member of the Remuneration Committee
N
Member of the Nomination Committee
S
Member of the Sustainability Committee
Committee chair
Board of directors
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Board
Strategy
Sector
ESG
Finance/accounting
Risk/internal control
Legal
Workforce engagement/remuneration
Governance
Listed company
Cyber/technology
Pauline Lafferty
Non-executive Director
A
R
N
S
Independent: Yes
Pauline was appointed to the Board and
as Chair of the Remuneration Committee
in August 2021 and is the Designated
Non-executive Director for Workforce
Engagement.
Experience
Pauline brings significant experience
from an international career spanning
manufacturing and supply, executive
search and human resources. Since retiring
as Chief People Officer at Weir Group plc,
where she was responsible for progressing
the Group’s agenda on all aspects of
strategic HR, she has embarked on a non-
executive portfolio that includes Chair of
the Remuneration Committee for XP Power
Limited, Scottish Events Campus Limited
and on the Board of Centurion Group. Prior
to Weir Group plc, Pauline was a Partner
with The Miles Partnership and an Executive
Director at Russell Reynolds Associates
in the UK and Australia, and Asia Pacific
Director of Materials & Supply at Digital
Equipment Corporation in Hong Kong.
Other positions held:
Non-executive Director, XP Power Limited,
Chair of Remuneration Committee
Helen Miles
Non-executive Director
A
R
N
S
Independent: Yes
Helen was appointed to the Board in April
2021 as an independent Non-executive
Director.
Experience
Helen brings with her a breadth of
operational and commercial experience
having worked within regulated businesses
together with her broader infrastructure
experience developed across telecoms,
leisure and banking. As a member of the UK
Board, Helen was instrumental in delivering
HomeServe’s future growth strategy and
ensuring a sustainable, customer-focused
business. As an experienced finance
professional, Helen was previously Chief
Financial Officer for Openreach, part of BT
Group plc, and has extensive experience of
delivering major business transformation
across the Group. Prior to BT Group,
Helen worked in a variety of sectors and
organisations such as Bass Taverns Limited,
Barclays Bank plc, and Compass Group plc.
Other positions held:
Chief Financial Officer, Severn Trent plc
Clive Watson
Non-executive Director
A
R
N
S
Independent: Yes
Clive was appointed to the Board in
September 2019 and became the Senior
Independent Director and Chair of the
Audit & Risk Committee in April 2020.
Experience
Clive has considerable finance experience,
having previously been the Group Finance
Director of Spectris plc, Chief Financial
Officer and Executive Vice President for
business support at Borealis, Group Finance
Director at Thorn Lighting Group and held
a variety of finance roles at Black & Decker.
In 2019, Clive retired as a Non-executive
Director of Spirax Sarco Engineering plc,
where he was Chair of the Audit Committee
and Senior Independent Director.
Other positions held:
Non-executive Director, discoverIE Group
plc, Chair of Audit & Risk Committee
Non-executive Director, Kier Group
plc, Chair of Risk Management & Audit
Committee
Non-executive Director, Trifast plc, Senior
Independent Director and Chair of Audit
and Risk Committee
Skills matrix
Carol Hui, OBE
Non-executive Director
A
R
N
S
Independent: Yes
Carol was appointed to the Board in May
2020 and as Chair of the Sustainability
Committee in January 2022.
Experience
Carol was the Non-executive Chairman at
Robert Walters plc, an Executive Board
Director at Heathrow Airport Limited and
held senior executive positions at large
companies including Amey plc and British
Gas plc. Previously she was a corporate
finance lawyer with Slaughter and May.
Carol is an experienced non-executive
director having served on varied boards in
major infrastructure, real estate, tourism,
charities, consultancy and education. She
has received numerous legal and business
awards throughout her career. Carol
received an OBE in 2024 for her services
to tourism.
Other positions held:
Non-executive Director, Grainger plc, Chair
of Responsible Business Committee
Non-executive Director, Lord
Chamberlain’s Committee, Royal
Household
Board Trustee, Christian Aid
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The Board continues
to support the
growth and success
of the company,
through robust
governance practice
2024 has seen Breedon complete its first full year
as a main market listed company and the Board have
taken time to review and reflect what that means for
the Group and its stakeholders. The Board reviewed all
governance documentation including Board policies
and the various terms of reference. I am pleased
to report that following our internal review of Board
and Committee performance, we believe that we have
continued to support the Group and our colleagues
through robust governance practice. For 2025,
we have updated our governance documentation
following the published FRC Corporate Governance
Code and will report formally against the new Code as
the requirements come into effect in 2025 and 2026.
Amit Bhatia
Non-executive Chair
5 March 2025
On the Board’s mind…
Chair succession
At the forthcoming AGM,
the Board are supporting the
re-election of Amit Bhatia as a
Director and Chair. Amit will have
been on the Board of Breedon
Group plc just under 9 years,
and therefore during 2025 will
have served on the board for
more than nine years from the
date of his first appointment. The
Board considered Amit’s tenure
as part of succession planning
and consulted with shareholders
representing over half the issued
share capital.
More detail
»118
Engaging with
colleagues and
embedding culture
The Board continues to engage
with colleagues through various
means. Direct engagement allows
the Board to receive first hand
feedback and the employee
‘Your Say’ survey is vital to help
the Board understand what
Breedon does well and where it
can improve. Site visits allow the
Board to interact and understand
employees views.
The Board acknowledges that
these experiences drive culture
and are instrumental in achieving
a workplace where colleagues
feel safe, proud and motivated.
More detail
»107
Understanding cyber
risks and resilience
The Board is aware of increasing
investor focus on board oversight
of cyber risk. The Board have
added oversight of cyber risk as
part of its Schedule of Matters
Reserved to the Board and to
the Audit & Risk Committee
Terms of Reference. The Audit
& Risk Committee provide the
Board with reassurance of the
effectiveness of the Group’s cyber
risk, policies and procedures.
More detail
»56
Supporting
management with growth
through acquisitions
The Board has a strong appetite
for growth which was accelerated
in the year with the launch of
the third platform in the US. The
Board considers that BMC is well
positioned to grow within the US
construction materials market.
More detail
»24
Management
succession, talent and
inclusion & diversity
The Nomination Committee
has built on the foundations of a
succession plan that it has been
developing over the past few years.
The Committee’s focus has been
on the succession of the executive
directors and other members of
the Executive Committee. The
Committee has received support
from the Head of Talent to identify
emerging talent that supports the
succession plan.
More detail
»118
Corporate governance statement
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Each meeting of the Board and Committees
was attended by all respective members.
If the Board needs to make decisions in
between meetings, it can do so through
unanimous approval by email. However,
they will only do so in such situations
where the matter has been discussed at
previous meetings so that directors are fully
appraised, have had the opportunity to
ask questions and are therefore in a position
to make a fully informed decision.
The Board has delegated certain aspects
to Board Committees, details of which can
be found on pages 112 to 122 and 129 to 146.
The Board held various dinners throughout
the year, some of which were exclusively for
non-executive directors and some which
included the whole Board, the Executive
Committee and their leadership teams.
No decisions are made at dinners.
These events present the Board with the
opportunity to discuss matters impacting
the business in an informal manner and
provides the opportunity to engage with
colleagues outside the workplace setting.
The non-executive directors meet without
the executive directors being present
either as part of a Committee meeting or
prior to each Board meeting. On a regular
basis, individual members of the Executive
Committee and leadership team are
invited to attend to present on strategic
or operational matters.
The Board receive regular training during
the year including presentations from
the business on operational and strategic
objectives together with external subject
matter experts.
Strategy
Strategic plan reviewed
Acquisitions
US strategy
External adviser strategy presentations
Economics update
Approval of contracts
Financial
CFO reports on financial performance
Budgets and forecasts
Final and interim dividend
Going Concern and Viability Statement
Assessment of fair balanced and
understandable
Investor Relations Reports and
interactions
Preliminary Results
Annual Report and Accounts
AGM Trading Statement
Interim Results
November Trading Statement
Operational
Presentations on health, safety and
wellbeing, employee survey;
GB Materials sustainability; GB Materials
and Cement
Board visits to Dagenham and Dowlow
CEO reports on operational activity
Modern Slavery Statement
Training
Cyber Risks
Directors Duties
UK Listing Rules
UK Corporate Governance Code
Risk Elimination
Technology
Risk and governance
Risk appetite and principal risk review
Board effectiveness review
Legal and litigation update
AGM
Insurance review
Directors’ responsibilities training
Audit reviews
Audit issues and judgements
Whistleblowing reports
Board succession and dynamics
Matters Reserved to the Board
Declaration of Interests
Board Policies
Shareholding Guidelines
External Quality Assurance
People and organisation
Health, safety and wellbeing reports
Succession planning
Talent management
Diversity and Inclusion Policy
Gender Pay report
Employee engagement and culture
Remuneration, incentives and share
awards
Directors’ Remuneration Policy
New Share Scheme proposals
Sustainability
Sustainability strategic objectives and
targets
SBTi and net zero commitment
ESG performance
Sustainability risks and opportunities
ESG policies
The Board held six scheduled
meetings during the year
together with two site visits,
a strategy day and Board
update calls
Board in action
Key topics for the Board
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January
Board meeting
Audit & Risk Committee
Remuneration
Committee
Dagenham bagging
plant site visit
March
Board meeting
Nomination
Committee
July
Board meeting
Audit & Risk Committee
September
Board meeting
Nomination Committee
Sustainability Committee
Dowlow quarry site visit
November
Board meeting
Audit & Risk Committee
Remuneration Committee
Sustainability Committee
Capital Markets Event
December
Board call
Nomination Committee
February
Audit & Risk
Committee
Remuneration
Committee
Sustainability
Committee
April
Board meeting
Remuneration
Committee
Annual General
Meeting
June
Strategy
Day
October
Investor consultation
with regards the Chair
re-election
Board activity in 2024
Board in action
106
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Informal engagement
The Board have held several
dinners or lunches during 2024
where colleagues were invited
to participate in discussions
with members of the Board in an
informal setting. The Board sees
these events as an important way
to connect with colleagues where
no prescribed questions or topics
are discussed and therefore
allows the flow of information
either way not to be dictated.
Engagement Survey
The annual survey is an
opportunity for the Board to gain
the views of colleagues across
the Group. The Board reviews
the results of the survey, which
enables them to understand how
engaged our colleagues are. The
data provides the Board with
movement from the previous
year and how engagement
compares to our peers. In 2024
our employee engagement score
was 78%.
Board reporting
The Board receive regular
reports providing an oversight
of culture which recognises the
importance and benefits of clear
and embraced values and culture
to the workplace experience.
The Board acknowledge the
importance of monitoring
culture together with their role
to influence culture to ensure
that policy, practices and
behaviour throughout the entire
organisation are aligned with
the Group’s purpose, values
and strategy.
Site Visits
The Board undertook two site
visits in the year. The first in
January was to the Dagenham
bagging plant and was followed
later in the year with a visit to
Dowlow quarry in September.
The Board embrace the
opportunity to undertake site
visits to engage with colleagues
in their own workplace whilst
also observing and gaining an
understanding of their roles
within the business.
DNED for Workforce Engagement
Three dedicated events took
place in the year, where Pauline
Lafferty DNED for Workforce
Engagement met with colleagues.
This year, the engagement plan
saw a shift so as to engage with
our colleagues that support our
business operations, on a number
of topics.
Two events took place in April
where Pauline met colleagues
from support functions including
accounts payable, health & safety
and logistics and in September
with operational colleagues at
Dowlow quarry.
The meetings now provide an
insight to culture across a wider
range of roles at different levels
within the Group.
Culture and colleague engagement
How the Board
engaged and
assessed culture
in 2024
Workforce polices and
ways of working
The Board and its Committees
reviewed various policies in the
year which aim to have a positive
impact on colleagues. These
policies such as the Diversity
and Inclusion Policy, and Health,
Safety and Wellbeing are
monitored and reviewed annually.
There is also in place a range of
mandatory e-learning modules,
to ensure that colleagues act in a
way that supports behaviours that
underpin the Company’s values.
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Culture is important
to the Board
All colleagues are expected to maintain an
appropriate standard of conduct in all of
their activities, and the directors seek to set
the tone for such behaviour through their
own actions.
To promote a common culture across
the organisation, we have defined a clear
purpose and set of values that support the
successful delivery of our strategy. Led by
the Board and Executive Committee, the
Group continues to embed the purpose ‘to
make a material difference to the lives of our
colleagues, customers and communities’ to
create a workplace where people feel safe,
proud and motivated to do their best.
Our purpose is underpinned by our values:
keep it simple; make it happen; strive to
improve; and show we care. These values
were formally introduced at the beginning
of 2020 following collaboration across our
workforce to ensure that they were relevant
to, and resonated with, our people. The
values are now an integral part of our ethos
and an established way of working together
to ensure long-term success.
By supporting these principles, we create a
culture of trust, integrity, and accountability
that supports growth and success. This is
maintained through our leaders, embedding
of values and behaviours in all learning
interventions and colleague engagement.
Culture and colleague engagement
Our people are one of our greatest assets
and our number one priority remains
sending our colleagues Home Safe and Well.
The results of our cultural survey in 2024
provided the Board with valuable feedback
on what our colleagues thought worked well
and the areas that need to be improved.
Breedon remains focused on being a
great place to work. At the heart of this
is nurturing a culture of respect; valuing
colleagues for who they are and the
individual experience and perspectives
they bring to Breedon. This is achieved by
creating a sense of team and investing in
colleagues so they have the opportunity to
grow, learn and be the best they can be.
Our colleague’s wellbeing continues to
be paramount, and we have continued to
‘show that we care’ when it comes to all
aspects of health, safety and wellbeing.
Support, guidance and training is provided
for the physical and mental wellbeing of
our colleagues through the Employee
Assistance Programme. Access to financial
wellbeing webinars are provided covering
debt and budgeting, scams and frauds
and pensions. The Group provides share
schemes for all eligible colleagues to save
into together with a holiday purchase
scheme for our UK and RoI colleagues.
We support colleagues with technical and
professional qualifications, funded through
our levy and business sponsorship.
Employee engagement
»107
The culture of an
organisation drives
behaviour, and the
Board seeks to ensure
that the right culture
is in place to achieve
our goals
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Economic driver
We encourage clear and transparent
communication to promote a full
understanding of Breedon’s business model,
strategy and end-markets. The programme
includes direct Board engagement through
the Chief Executive Officer and Chief
Financial Officer, with Chair and Senior
Independent Director participation upon
request. All directors are available to meet
with shareholders at our AGM.
The Board receives regular reports
providing updates on key market events
and share price performance, shareholder
engagement and register analysis, analyst
forecasts and recommendations, market
updates and investor relations activities.
Investor and market participant feedback
are shared with the Board and contribute to
the strategic decisions taken by the Board.
The Board is committed
to maintaining regular
dialogue with our
shareholders and market
participants, supporting
a comprehensive
programme of investor
relations activity
Meeting activity
Through the year we undertook nearly 400
meetings and interactions with institutions
and private investors, further extending our
engagement with non-holders and non-UK
investors. Members of the Board took the
opportunity to meet with investors, analysts
and shareholders at the Capital Markets
Event and the AGM.
The Senior Independent Director
commenced engagement with investors
in October 2024 regarding the Chair’s
tenure ahead of the resolution for
re-election at the AGM in 2025.
Engaging with shareholders
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Top
questions
What is your
strategy to grow
the US business?
In March we entered the US
construction materials market
with the acquisition of BMC,
headquartered in St Louis,
Missouri.
In the coming years we will
build out our US business,
initially within Missouri and the
surrounding states. Over time we
will aim to diversify the product
offering to more closely resemble
the wider Group’s vertically-
integrated model.
Chief Executive Officer’s
review and outlook
»22
How are
end-markets
performing?
Our primary markets,
infrastructure and housebuilding,
are supported over the long-term
by structural growth drivers.
In the short-term macroeconomic
headwinds and poor weather
conditions have presented
challenging trading conditions,
particularly in GB. Enquiry levels
were healthy across all end-
markets towards the end of 2024
and volumes stabilised in the
second half.
Market review
»10
What are your
priorities for capital
deployment?
Our highly cash generative
model has multiple routes to
growth, undertaking M&A and
investment.
To ensure we retain strategic
flexibility and a strong balance
sheet, our disciplined financial
framework prioritises profitable
growth and promotes return on
invested capital. Excess capital is
distributed to shareholders and
deployed to reduce debt.
Chief Financial Officer’s
review
»42
How have volumes and
pricing responded to
macroeconomic volatility?
Resilient infrastructure spending
underpinned aggregates and
asphalt volumes. In addition,
our deliberate strategy to grow
our upstream mineral assets
led to increased aggregate
volumes in Ireland.
Cement and ready-mixed
concrete volumes declined,
primarily due to the soft
housebuilding market in GB.
Pricing was sustained
due to supportive market
fundamentals, enabling us to
fully recover input costs.
Chief Executive Officer’s
review and outlook
»22
Operating reviews
»32
Engaging with shareholders
110
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January
Investor site visit
(Cloud Hill)
March
2023 Annual Results
Investor roadshow;
London, virtual
JPM Pan-Europe Small
and Mid-cap CEO
conference
Berenberg UK corporate
conference
May
Final dividend paid
UBS Pan-Europe
Small and Mid-cap
conference
Investor site visit
(Wickwar)
July
2024 interim results
Investor roadshow;
London, virtual
September
Investor roadshow;
London, virtual
November
Ten-month trading
update
Capital Markets Event
Goodbody Annual Equity
Conference
Interim dividend paid
February
Closed period
April
Q1 trading update
AGM
London roadshow
HSBC UK conference
June
Dublin roadshow
October
Engagement with
investors regarding
Chair reappointment
Redburn Mid-cap
conference
Investor site visit
(Wickwar)
December
Berenberg European
conference
Engaging with shareholders
Investor relations
activity in 2024
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Audit & Risk Committee report
The Committee monitors the integrity
of the Group’s financial statements and
ensures that the interests of shareholders
are properly protected in relation to
financial reporting, internal control and
risk management.
The Committee monitors and reviews the
effectiveness of the internal control and
risk management framework alongside the
wider compliance environment operating
within the Group, which includes the Group’s
whistleblowing arrangements.
The Committee makes recommendations
to the Board in respect of the appointment
of the external auditor, reviews and monitors
their independence and objectivity, and
approves their remuneration.
It consults with the external auditor on the
scope of their work and reviews all major
points arising from the audit.
The Committee oversees the Group’s
outsourced internal audit function which
reports directly to the Committee, and has
responsibility for appointing the Head of
Internal Audit, approving the annual internal
audit plan, reviewing key outputs from
internal audit reviews and assessing the
performance of the function.
The Committee has relevant financial
experience at a senior level as set out
in the biographies on pages 102 and 103.
Key activities in 2024
January
review of cyber security risk; and
discussion and review of risk
disclosures.
February
review of the Annual Report, including:
significant accounting issues
and disclosures;
Going Concern and Viability;
fair, balanced and understandable
reporting;
risk disclosures;
discussion of KPMG’s findings from the
2023 audit and their independence as
external auditors;
review of solvency position to support
final dividend; and
update on risk management review
processes, independent assurance
in relation to sustainability KPIs
and financial controls framework
implementation.
July
review of the interim financial
statements, including interim risk
disclosure and interim dividend;
update on risk management review
processes and financial controls
framework implementation;
report received on External Quality
Assessment (EQA);
update on findings of internal
control reviews;
annual review of effectiveness and
independence of the external auditor;
approval of KPMG’s external audit
engagement letter and 2024 fees; and
approval of the Fraud Detection
and Prevention Policy.
November
review of external audit plan and
strategy for year-end 2024;
review of non-audit services policy;
annual review of effectiveness of
Group’s risk management and internal
control framework;
update on financial controls framework
implementation and fraud risk
assessment process;
review of Group key accounting policies;
update on progress against the internal
audit plan and findings of internal
control reviews;
review of terms of reference and
internal performance review of the
Committee; and
agreed internal audit plan for the
2025 Internal Audit Cycle.
The Audit & Risk
Committee continues
to focus on ensuring
high standards of
financial governance
and risk management.
Clive Watson
Chair, Audit & Risk Committee
Roles and responsibilities
of the Audit & Risk Committee
Click or scan to see the
terms of reference
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Audit & Risk Committee report
Significant accounting matters
The Committee considered key accounting
issues, judgements and disclosures in
relation to the Group’s 2024 financial
statements, the most significant of which
were goodwill impairment testing and
restoration provisions.
These key issues were discussed and
reviewed with management and the
external auditors. The Committee
challenged judgements made and
sought clarification where necessary.
The Committee received a report from
the external auditor on the work they had
performed to arrive at their conclusions
and discussed in detail all significant
findings contained within that report.
The information contained in the following
table should be considered together with
KPMG’s independent external audit report
on pages 152 to 161 and the accounting
policies disclosed in the notes to the
financial statements as referenced
in the table.
Area of focus
Audit & Risk Committee review
Conclusions
Impairment of goodwill – Key Audit Risk
See note
9 to the
consolidated
financial
statements
The Group has £534.6m of goodwill arising
from acquisitions. This is not amortised
but is reviewed for impairment on an annual
basis, or more frequently if there
are indications that the goodwill may
be impaired.
The recoverable amounts for each segment
to which goodwill has been allocated are
calculated by determining the value in use
of each segment, based on the net present
value of projected cash flows, with the most
significant judgements being the forecast
financial performance, longer-term growth
rates and discount rates.
The Committee was presented with a written
report from management setting out the
basis of the calculation, support for the key
assumptions used alongside a sensitivity
analysis to quantify the impact of possible
changes to those assumptions. This report
included detail on the judgements made
about the impact of climate change on
forecast financial performance in the
impairment review, in particular for the
Cement operating segment.
The Committee discussed these judgements
with both management and the external
auditor, and considered the appropriateness
of the key assumptions and the adequacy
of the disclosure provided in note 9 of the
consolidated financial statements.
The recoverable amounts
of each segment showed
significant headroom compared
to their carrying value when
reasonably possible changes are
made to key assumptions.
The Committee noted that key
judgements were reasonable,
with the trading performance
in 2024 providing additional
comfort over the cash flows
used in the review.
They confirmed that
management continues to utilise
an external expert to calculate
discount rates.
The impact of climate change
and the associated disclosures,
in particular in respect of the
Cement operating segment,
was reviewed and considered
by the Committee to provide
a balanced presentation of
the risk of future impairments
against a backdrop of significant
current uncertainty.
The Committee was satisfied
that no impairment of goodwill
was necessary, and that the
disclosures in the financial
statements were appropriate.
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Area of focus
Audit & Risk Committee review
Conclusions
Restoration provisions – Key Audit Risk
See notes 16
and 26 to the
consolidated
financial
statements
The Group holds a provision of £99.1m
for the future costs of restoring and
decommissioning its trading assets. These
amounts can be especially significant for the
Group’s quarries, of which there are over 100
and its two cement plants.
The Group conducts an annual process to
review the ongoing accuracy and adequacy
of these provisions, with the aid of external
experts, where appropriate.
During the year, the level of provision
increased by £7.8m to reflect the impact
of the BMC acquisition, as well as higher
inflation on the cost of restoration, partially
offset by an increase in the rate used to
discount these costs.
The Committee discussed the output
from the annual review of provisions with
management and the external auditor.
The Committee noted the
impact of inflation on the
calculation of restoration
provisions during the year.
They concluded that provisions
were appropriately calculated
and fairly stated in the accounts.
Accounting impact of climate change
See notes 9
and 26 to the
consolidated
financial
statements
Climate change has been identified by the
Group as a principal risk, and both the physical
and transitional risks posed by climate change
could affect accounting judgements made in
preparing the financial statements.
The Committee was presented with a
paper from management which assessed
this potential impact, concluding that the
judgements made in the impairment of
non-current assets were the only area with
potential to materially impact the financial
statements, as a result of the uncertainty
surrounding the costs involved to transition
to net zero by 2050.
The Committee reviewed this disclosure
as a key accounting judgement in the
financial statements.
The Committee was satisfied
that the potential impact of
climate change had been
appropriately considered
in preparing the financial
statements, and that the
disclosure fairly reflected
the nature of the risk and
judgements made by
management.
Area of focus
Audit & Risk Committee review
Conclusions
Identification of non-underlying items
See note
3 to the
consolidated
financial
statements
The identification and presentation of
certain items as non-underlying on the
face of the consolidated income statement
requires management to apply judgement
in identifying and appropriately disclosing
these items.
In 2024, total non-underlying items before
interest and tax were £24.1m (2023: £10.5m),
being primarily the amortisation of acquired
intangible assets and acquisition costs
associated with the purchase of BMC.
The Committee considered the nature of the
items which were presented as
non-underlying and the associated
disclosures in the notes to the
financial statements.
The Committee was satisfied
that the non-underlying items
identified by management
were appropriately disclosed
and that this presentation
provides stakeholders with
useful additional understanding
of business performance by
reflecting the way in which the
business is managed.
They noted that the nature
of such items was consistent
over time and were clearly
disclosed in the accounts with
reconciliations provided to
statutory measures.
Acquisition accounting for intangible assets and goodwill – Key Audit Risk
See note 25
to the
consolidated
financial
statements
During the year, the Group completed the
acquisition of the four entities for a combined
consideration of £196.7m. Management
performed a fair value exercise for each of
the acquisitions in which intangible assets
were identified, along with mineral reserves
and resources they were all fair valued and
assigned a useful economic life, over which
the assets will be amortised.
The Audit & Risk Committee reviewed and
discussed, with both management and
the external auditor, a paper prepared
by management setting out the process
followed to identify the intangible assets, the
basis of the fair value of these assets and the
mineral reserves and resources as well as the
assigned useful economic lives.
The Committee was satisfied
that the intangible assets and
mineral reserves and resources
identified as part of the
acquisitions are appropriate
and have been accounted
for in line with the applicable
accounting standards.
They noted that the assumptions
used in the valuation of the assets
were determined on a consistent
basis to historical acquisitions.
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Area of focus
Audit & Risk Committee review
Conclusions
Alternative Performance Measures
See note 27
to the
consolidated
financial
statements
The Group utilises a number of Alternative
Performance Measures in response to
demand from its shareholders. Care is
required to ensure that the use of these
measures is compatible with the Group’s
obligation to prepare an Annual Report which
is fair, balanced and understandable.
In particular, these measures should
be calculated on a consistent and transparent
basis over time and given no more
prominence than related statutory measures.
The Committee reviewed the use and
presentation of these measures throughout
the Annual Report, alongside the full
reconciliations back to statutory measures
provided in note 27 to the consolidated
financial statements.
The Committee was satisfied the
use of Alternative Performance
Measures enhances the
reporting of the Group by
providing additional information
that is useful to users of the
accounts.
They further concluded that
these Alternative Performance
Measures were consistently
calculated and have been
presented fairly together with
full reconciliations alongside the
relevant statutory measures.
Going Concern and Viability
See note 1
to the
consolidated
financial
statements
and the
Viability
Statement
on page 67
At each reporting date the Group assesses
whether it remains appropriate to prepare
accounts on a Going Concern basis and
makes a statement on its longer-term viability
as part of its risk reporting.
The Committee reviewed and considered a
paper setting out why management believe
that the Group remains a Going Concern.
This included details of available facilities, the
profit and cash generation of the Group and a
sensitivity analysis in the form of a ‘severe but
plausible’ downside scenario. Going Concern
was also discussed with the external auditor.
The Viability Statement was reviewed,
alongside a supporting paper from
management, incorporating both a base case
and downside scenario covering the three-
year period of the statement.
The Committee recommended
to the Board the use of the
Going Concern assumption
and approved the Viability
Statement.
They noted that following the
strong levels of profit and cash
generation, the risks facing the
Group have continued to reduce
since 2020. The Committee was
satisfied that the disclosure in
the basis of preparation note
to the financial statements
included all factors relevant to
users of the accounts.
Financial Reporting Council
review of report and accounts
The FRC carried out a review of the
Group’s Annual Report for the year
ended 31 December 2023. No significant
questions or queries were raised, and the
Group took into consideration the FRC
recommendations when preparing this
Annual Report. The Committee notes
that the FRC’s review does not provide
assurance that the Annual Report is
correct in all material respects as the
FRC’s role is not to verify information
provided, but to consider compliance
with reporting requirements.
Fair, balanced and
understandable assessment
The Committee reviewed the Annual
Report and was able to confirm to the
Board that the Committee considered
the Annual Report and Accounts,
taken as a whole, was fair, balanced
and understandable and provided the
information necessary for shareholders
to assess the Group’s performance,
business model and strategy.
External auditor
The external auditor, KPMG, has an
independent reporting line to the
Committee and attended all Committee
meetings held in 2024. At these meetings,
the Committee met KPMG without the
executive directors being present to
provide a forum to raise any matters of
concern in confidence.
The Committee discussed and agreed
the scope of the audit plan with KPMG,
and subsequently reviewed their findings,
covering the control environment in
the Group, key accounting matters and
mandatory communications.
The Committee considers the effectiveness
of KPMG’s audit on an annual basis,
including consideration of the standard
of KPMG’s formal communication around
audit strategy and findings, ad hoc
engagements throughout the year
and the feedback which is provided by
management following an internal survey
of relevant stakeholders.
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The Committee noted that the FRC’s Audit
Quality Review (AQR) team completed
an inspection of KPMG’s audit work on
the financial statements for the year
ended 31 December 2023. The Committee
discussed the outcome with KPMG and
agreed the actions that would be taken
in order to address the findings raised.
The Committee remains satisfied with
the quality of the audit provided by
KPMG and that they remain objective
and independent.
KPMG, either directly or via KPMG Channel
Islands Limited, has acted as auditor to the
Group since its formation in 2008, with
the audit last subject to a full competitive
tender in 2019.
KPMG did not provide any non-audit
services during the year.
Internal audit
RSM continue to provide an outsourced
internal audit function to the Group.
They are independent of management
and the Head of Internal Audit, provided
by RSM, reports directly to the Chair of
the Committee.
The 2024 internal audit plan was completed
in line with the plan approved by the
Committee, which received reports from
RSM on the outcome of those reviews
and regular updates on actions taken in
addressing issues previously identified.
RSM attended the Audit & Risk Committee
meetings held during the year. At these
meetings, the Committee met RSM without
the executive directors being present to
provide a forum to raise any matters of
concern in confidence.
The internal audit plan for 2025 has been
approved and includes reviews covering
our newly acquired BMC business in the US
and General IT controls alongside a range of
other financial and non-financial processes.
During the year, the Committee engaged
the Chartered Institute of Internal Auditors
to undertake an EQA of the Group’s
internal audit arrangements. The review
concluded that the outsourced internal
audit service was effective and conforms
to the International Professional Practices
Framework. Recommendations arising from
the review have either been addressed or
are expected to be addressed during 2025.
Therefore, the Committee concluded that
it was satisfied with the work performed
by RSM and that the internal audit function
remains effective.
Risk management and
internal control
The Audit & Risk Committee monitors
the effectiveness of the Group’s risk
management and internal control systems,
through the following processes:
The Executive team:
reports to the Board on changes in the
business and external environment
which present significant risks;
provides the Board with monthly
trading and financial information
and comparison versus KPIs;
regularly informs the Board on changes
to the competitive landscape; and
performs a review at least twice a year
of the principal risks and mitigations
identified by management through
the risk management processes.
The Audit & Risk Committee:
receives regular reports on significant
legal, ethical, compliance and insurance
matters from the Group General
Counsel, including summaries of any
reports received through the Group’s
whistleblowing hotline;
approves the Group risk management
and internal control framework,
which sets out the governance, risk
assessment policies and processes,
for their review and approval;
receives formal reporting from the
Group Head of Risk and Control on
the risk review processes followed and
the outcome of the formal risk reviews
which form the basis of the principal
and emerging risks reporting;
reviews progress updates from the
Group Head of Risk and Control
covering control remediation actions,
progress against the internal audit plan
and reviews both the financial controls
framework implementation and risk
management activities;
receives an update on the outcomes
from the annual self-certification
process for our key financial controls
against the agreed minimum standards,
as defined in the Breedon Financial
Controls Manual, and is provided a
summary of the results of the second
line testing performed;
reviews reports from RSM concerning
the design, implementation and
operating effectiveness of internal
controls across the Group’s operations,
including IT and cyber security controls.
This reporting covers both the scope
and findings of reviews, actions
agreed with management as well as
the progress made by management
to address any actions;
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receives regular updates from KPMG,
which includes findings on risk and
internal controls arising from their
work. Subsequent updates on issues
identified by KPMG are reported to
the Audit & Risk Committee;
receives significant financial
accounting policies for their review
and approval;
receives updates from the Head of
Risk and Control and the Group Head
of Information Security regarding the
development of the Group Fraud Risk
Management and the Information and
Security governance frameworks; and
receives updates from the Head of Risk
and Control on the work performed
to prepare for the changes to the
Corporate Governance Code Provision
29 in relation to ‘material controls’.
The Committee completed its
annual review of the effectiveness of
the Group’s internal control and risk
management framework, concluding
that this remained effective.
Whistleblowing
The Group has adopted a whistleblowing
policy which, together with our confidential
whistleblowing helpline, gives colleagues
or any other third party the means to
raise concerns in confidence and, if they
wish, anonymously.
The Committee regularly reviews
reports on notifications received and
ensures that arrangements are in place
for the proportionate and independent
investigation of such matters and for
follow-up action.
Committee effectiveness
The Committee believes that it has been
effective in 2024. An external evaluation
of the Board and Committee performance
was undertaken in 2024 and an internal
performance review of the Committee was
carried out in 2024 (see page 119).
The Chartered Institute of Internal Auditors
undertook an EQA review and reported to
the Committee at their meeting in July 2024.
The Audit & Risk Committee was Chaired
by Clive Watson for all meetings in the year,
was quorate for all four meetings it held
and was supported by the Group Financial
Officer, Group Financial Controller and the
Head of Risk and Control. The Committee
were available to talk to shareholders at the
AGM in 2024.
The composition, skills and experience of
the Audit & Risk Committee can be found
on pages 102 and 103.
Areas of focus for 2025
The following areas will be key areas of
focus heading into 2025 including:
implementation of the recommendations
arising from the Committee effectiveness
review undertaken during the year;
development of the assurance plan
in respect of the Group’s material
operational, reporting and compliance
controls and associated assurance
plan in preparation for the Corporate
Governance Code Provision 29; and
further development of the Group Fraud
Risk Management framework.
Clive Watson
Chair, Audit & Risk Committee
5 March 2025
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Nomination Committee report
The Nomination
Committee ensures
that the Board and the
Executive Committee
have the necessary
skills and experience to
be effective and bring
sufficient challenge
to lead a successful
organisation.
Amit Bhatia
Chair, Nomination Committee
Review of 2024
During the year the Nomination Committee
was Chaired by Amit Bhatia except when
discussions regarding his independence and
potential extension were held. The Committee
was quorate for all three meetings it held and
was supported by the Group People Director
and Head of Talent.
Succession planning was the focus for the
Committee during 2024, in respect of both the
Board and that of the Executive Committee.
Two non-executives directors, Helen
Miles and Pauline Lafferty completed
their first three-year term in office during
2024 and the Nomination Committee,
following review, recommended their re-
appointment for a second three-year term.
The Committee felt that both non-executive
directors continued to provide the Board
with a combination of skills, experience
and knowledge and that each director
continued to contribute effectively to the
long-term success of the Company.
The Committee considers all
recommendations on appointment or
reappointment of directors in line with
the Board’s Diversity and Inclusion Policy
regarding diversity, inclusion and equal
opportunity, and tenure, together with
any skills gaps identified.
The Committee, as part of its succession
planning, continued to keep under review
the position regarding the Chair not
being independent on appointment (as
per Provision 9 of the Code). The Board
remain of the opinion that the Chair’s non-
independence is not a hindrance to his
involvement on the Board, but an asset to
other shareholders, due to his experience,
commitment and passion for the business.
The Committee also considered the tenure
of the Chair (as per Provision 19 of the
Code). Amit Bhatia was appointed Chair
in May 2019, three years after his initial
appointment to the Board. Given the recent
acquisition of BMC, the wish to grow the
third platform in the US and the move of the
Company to the FTSE 250, the SID sought
formal engagement with shareholders
representing over half of our issued share
capital where recognition of his exceptional
period of strong growth and good track
record was expressed. In light of this,
together with the Chair’s extensive strategic
knowledge and expertise within the sector,
the Committee and the Board believe it is
in the best interests of all shareholders to
extend the Chair’s term but do not envisage
this extension to last longer than three years.
The Committee reviews all Board roles
in relation to succession and whilst in
agreement that Amit should remain as
Chair, the committee will continue to work
on succession in the best interests of the
Company and shareholders.
Roles and responsibilities
of the Nomination Committee
Click or scan to see the
terms of reference
Key activities in 2024
March
recommended the reappointment of
Helen Miles and Pauline Lafferty for a
further three-year term each.
September
approved the Board Diversity and
Inclusion Policy;
reviewed succession plans for the
Board and the Executive Committee;
reviewed the structure, size and
composition of the Board; and
discussed on-going proposals
regarding the Chair succession plans
and opened consultation with investors.
December
workshop held on succession
planning and talent management for
the Executive Committee and their
direct reports.
Amit did not Chair any part of the meetings
that his extension was being considered
and evaluated and removed himself from
all such discussions.
Compliance with the UK Corporate
Governance Code
»123
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The succession pipeline for the Executive
Committee and its direct reports continues
to be a discussion item for the Committee.
Following a talent management
presentation in 2023, the Nomination
Committee have considered the Executive
Committee succession plan and held a
dedicated workshop to review the wider
talent strategy and talent priorities for
2025. The Nomination Committee keeps
under review the size and composition of
the Board including its skills, experience
and knowledge of its directors. The external
Board Performance Review, which
took place in 2023, concluded that the
composition of the Board did provide
a broad range of business and functional
skills. The Committee took this into
consideration when recommending the
reappointment of the two directors at the
end of their three-year terms and also in
supporting all directors in their re-election
at the AGM in 2025.
Composition, skills and experience of the
Nomination Committee
»102
Nomination Committee report
Board Performance
The external Board Performance Review
which took place in 2023, identified
three main areas for the Board and the
Nomination Committee to consider.
The Board and the Nomination Committee
have monitored progress of the three main
areas together with some areas where
other suggestions had made. The table
below indicates the progress against the
considerations identified in 2023.
The Board and each of its Committees
undertook an internal review of its
performance during 2024. Each director
considered their own skills and performance
and made an assessment against criteria
which concluded that they continued to
contribute effectively. They also considered
how the Board and the Committees had
performed and concluded that they were
effective. The results were shared with
each Committee and the annual review
did not highlight any contradictions to
performance, composition or diversity.
Main areas for consideration from the
2023 External Board Performance
Board and Nomination Committee progression
of the considerations
Further develop the Board’s
strategic role
Strategy day held with an annual date set for forthcoming years –
see page 24 of the Strategic report for more details of the Board’s
long-term strategy.
Continue the development of the
assurance framework
EQA undertaken of the internal audit function with all the findings
accepted – see page 116 of the Audit & Risk Committee report.
Deepen the Board’s contact
within the organisation
The Board undertook various contacts with the organisation and
employees – see pages 105 and 106 in Board in Action.
Diversity and inclusion
The Nomination Committee keeps the
composition of the Board, and its diversity,
under close review and in 2024 re-approved
a Board Diversity and Inclusion Policy which
supports the UKLR targets on diversity
and inclusion.
As at 31 December 2024, 43% of Board
directors were women and two Board
directors have a minority ethnic
background. The Committee considers
the wider benefits of diversity to include
age, gender, ethnicity, educational profile
and socioeconomic background.
All appointments to the Board are made on
the basis of merit, having regard to diversity
to allow contribution from a range of views,
insights, perspectives and opinions together
with the skills, experience, independence
and knowledge it can bring to Board
decision-making and effectiveness.
The Board confirms that as at 31 December
2024, it complied with UKLR 6.6.6R(9) (a) (i)
with the target of at least 40% of the
Board directors being women and UKLR
6.6.6R(9)(a)(iii) at least one individual
on its board of directors from a minority
ethnic background.
The Board did not comply with UKLR
6.6.6R(9)(a)(ii) that at least one senior
Board position was held by a women.
The Board aspires to meet the target of
having at least one senior Board position
held by a woman. The Board are pleased
to report that the role of Chair of both
the Remuneration Committee and
Sustainability Committee were held by a
woman. The Nomination Committee will
review annually as part of its succession
plans, the progress on meeting the targets
of the UKLR.
UKLR target
Position as at
31 December 2024
Outcome
Observation
At least 40% of Board
directors are women
43%
Achieved
Three Board directors
were women
At least one senior Board
position* held by a woman
0
Not met
No senior Board positions
were held by women
At least one Board director
from a minority ethnic
background
29%
Achieved
Two Board directors were from
a minority ethnic background
* Chair, Chief Executive Officer, Senior Independent Director or Chief Financial Officer.
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Focus for 2025
The Committee will discuss the
re-appointment of Clive Watson
as he approaches the end of his second
three-year term in September 2025.
The Nomination Committee will review
and explore the succession plan for future
non-executive membership of the Board
together with consideration of succession
and talent management for the Executive
Committee and their direct reports.
In line with the adoption of the
Board Diversity and Inclusion Policy,
the Committee will support the Board
on its journey to increase diversity with
the objective of meeting the UKLR target
of at least one senior Board position
to be held by a woman.
Amit Bhatia
Chair, Nomination Committee
5 March 2025
In February 2022 the FTSE Women
Leaders Review announced its gender
diversity targets for FTSE 350 companies.
Their target is for women to comprise 40%
of all FTSE 350 boards by the end of 2025
and 40% of leadership teams to be women
by the end of 2025 (leadership team is
defined as the Executive Committee and
their direct reports).
At 31 December 2024, the Board was
represented by 43% women and for our
leadership team this was 22%.
All colleagues are asked to provide the
Group with information regarding their
gender and ethnicity when they join.
If provided, the gender and ethnicity
information for colleagues is entered
into the Group’s HR Information System.
Colleagues can update this information
at any time during their employment and
are periodically reminded to provide their
gender and ethnicity information.
The Board are asked to provide the same
information to the Company Secretary
which is confirmed on a regular basis.
Colleagues and the Board are able to self-
identify as either male, female or ‘other’.
For ethnicity, they are asked to self-identify
based on the Office for National Statistics
ethnicity categories.
Number of
Board Members
% on the Board
Number of
Senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
Executive
Management
% of Executive
Management
White British or other White, including minority-white groups
5
71
3
9
100
Mixed/Multiple Ethnic Groups
0
0
0
0
0
Asian/Asian British
2
29
1
0
0
Black/African/Caribbean/Black British
0
0
0
0
0
Other ethnic group, including Arab
0
0
0
0
0
Not specified/prefer not to say
0
0
0
0
0
The following tables set out the information that a listed company must include in its annual financial report under UKLR 6.6R(10),
and the format in which it must be set out.
Number of
Board Members
% on the Board
Number of
Senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
Executive
Management
% of Executive
Management
Men
4
57
4
8
89
Women
3
43
0
1
11
Not specified/prefer not to say
0
0
0
0
0
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Sustainability Committee report
The Sustainability
Committee continues
to support the Board
in providing oversight
of our sustainability
impact and climate-
related responsibilities.
Carol Hui, OBE
Chair, Sustainability Committee
Review of 2024
The Committee has continued to develop
and monitor the Board’s corporate
sustainability targets and key performance
indicators. During 2024 the Committee
received reports on sustainability
performance at every meeting to ensure
positive progress against the objectives
was met.
As we were on track to exceed our 2030
sustainability targets, the Committee agreed
rebased targets in the year, which were
shared with investors at the Capital Markets
Event in November. These are:
achieve a 23.3% reduction in absolute
gross scope 1 and 2 emissions and scope
3 emissions from purchased cement
and clinker by 2030;
generate £500m of cumulative social
value by 2030; and
50% of our concrete, asphalt, block, brick
and tile sales revenue to be specifically
from sales of Breedon Balance products
by 2030.
During the year the Committee received
reports and reviewed sustainability
governance at both Board level and within
the businesses. The Committee reviewed
the environmental impact and sustainability
of the Group’s operations particularly
in relation to those activities where the
Company has its most significant climate-
related and environmental impacts.
The Sustainability Committee, on behalf
of the Board, reviewed and recommended
approval of the climate-related disclosures
for the 2023 Annual Report and approved
a suite of Group-wide sustainability
policies. The Committee also reviewed
the sustainability risks and opportunities
at every meeting as part of monitoring
the Sustainability Risk Register.
The Committee received presentations
from two businesses within the Group
as part of the Committee’s knowledge-
building to ensure that its work had the
most impact and to understand the
sustainability priorities in those businesses.
The Committee has received reports at
all meetings on stakeholder engagement
and has interacted with employees with
regards to sustainability. Aligned with
the Company’s promotion of socially
responsible values and standards,
the Sustainability Committee has continued
to support engagement with both external
stakeholders and colleagues on key
sustainability topics.
Sustainability report
»69
Throughout the year the Sustainability
Committee was chaired by Carol Hui, with
membership comprising of a majority
of independent non-executive directors
as required by the Committee’s terms of
reference. The meetings in the year were
attended by the Group Sustainability
Director, Group People Director and the
Head of Health, Safety and Wellbeing who
all have a standing invitation to attend,
The Committee have made
recommendations on its terms of reference
and has reviewed the Committee’s
performance in the year, concluding
that it has been effective.
The Committee was quorate for all three
meetings it held in 2024 and members
were available to speak to shareholders
at the AGM in 2024.
Composition, skills and experience of the
Sustainability Committee
»102
Roles and responsibilities
of the Sustainability Committee
Click or scan to see the
terms of reference
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Focus for 2025
The Sustainability Committee will continue
to maintain a close understanding of the
business and its sustainability priorities
by inviting business colleagues to present
and discuss sustainability issues. External
experts will provide guidance and shared
learning on those sustainability issues that
impact Breedon.
Following an exercise to assess the most
material areas of impact that the Group
has on the economy, environment and
stakeholders, the Sustainability Committee
will review priorities for the Committee’s
focus, which it will undertake going forward.
Carol Hui, OBE
Chair, Sustainability Committee
5 March 2025
Key activities in 2024
February
monitored 2023 progress performance
and agreed objectives for 2024;
reviewed risks and opportunities;
recommended STIP and PSP linked
sustainability target for Remuneration
Committee;
received report on stakeholder
engagement and communications;
Annual Report disclosures agreed;
agreed suite of ESG Policies; and
received a presentation on Breedon
Cement’s sustainability priorities.
September
received H1 update on objectives
progress;
reviewed risks and opportunities;
received report on stakeholder
engagement and communications; and
received a presentation on GB Materials
sustainability priorities.
November
reviewed and agreed focus areas for the
Committee for 2025;
review of sustainability management
and governance within the Group;
recommended revised terms of
reference for adoption by the Board;
internal review of Committee
performance reviewed;
received report on progress against
objectives;
reviewed risks and opportunities; and
received the report on stakeholder
engagement and communications.
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Strategic report Governance Financial statements Additional information
Compliance statement against the Code
Compliance
statement
against the
Code
Provision 9
Amit Bhatia was not deemed to be
independent upon his appointment
as Chair.
The Code recommends that a chair should
meet the independence criteria set out
in the Code on appointment. Amit is not
considered to have been independent on
appointment to the Board, having been
initially appointed as the representative
of Abicad Holding Limited, a significant
Breedon shareholder pursuant to the terms
of a relationship agreement in force at the
time of his appointment as Chair.
Accordingly, although Amit is no longer
a representative of Abicad Holding
Limited, he is not considered to have been
independent on appointment to the Board.
Provision 19
The Board will not comply with Provision 19
during 2025.
At the forthcoming AGM, the Board are
supporting the re-election of Amit Bhatia
as a director and the Chair. Amit will have
been on the Board of Breedon Group plc
just under nine years, and therefore during
2025 will have served on the Board for
more than this time from the date of his first
appointment. This will mean that the Board
will no longer comply with Provision 19 of
the Code. Provision 19 states that “the chair
should not remain in post beyond nine years
from the date of their first appointment to
the Board. To facilitate effective succession
planning and the development of a diverse
board, this period can be extended for a
limited time, particularly in those cases
where the chair was an existing non-
executive director on appointment.”
Amit was appointed Chair in May 2019 and
although on the Board for nearly nine years,
he will have only held the role of Chair for a
little over six years at the time of the AGM
in 2025. Amit was appointed as executive
Chair of Hope Construction Materials in 2013,
then the UK’s largest independent building
materials business before it was acquired by
the Group in August 2016 (which is when he
joined the Breedon Board).
Amit continues to be a high calibre Chair.
He has an in-depth knowledge of Breedon
and the industry having been involved
in the business and sector through his
prior executive chair role at Hope and his
experience while at Breedon. His interests,
as a major shareholder of Breedon, are
significantly aligned with our independent
shareholders, and he has an important
role to oversee the development of our
US business following our entry into
that market earlier in 2024. Amit brings
extensive knowledge of the sector and
expertise with regards to strategy, together
with an exceptional period of strong growth
and a good track record whilst Chair.
During the latter part of 2024, the SID sought
formal engagement with shareholders
representing over half of our issued share
capital where recognition of his experience,
commitment and passion for Breedon was
expressed. After detailed Board discussions,
led by the SID and subsequent careful
consideration, the Board believes it is in the
best interests of all shareholders to extend
Amit’s term as director and Chair, particularly
at such an important time in our growth.
The Board does not envision this extension
to last longer than three years therefore will
be supporting the annual re-election of Amit
up to the AGM being held in 2028.
The Board continue to have a high
regard for Amit as Chair and note that
whilst technically he is non-independent
under the provisions of the Code, in his
capacity as Chair he acts at all times as if
he were independent. Amit consistently
demonstrates clear and objective thought,
reflecting his strategic and entrepreneurial
approach. He actively promotes constructive
challenge and engagement by the Board with
the executive directors, the management
team and the business.
The Nomination Committee will continue
to review all board roles in relation
to succession and whilst in agreement
that Amit should remain as Chair,
the Nomination Committee will continue
to work on succession in the best interests
of the Company and shareholders.
The Board is pleased to
report that they applied the
principles and complied
with all provisions of the
Code in 2024 with the
exception of Provision 9
Chair independence.
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Application
Compliance
1 Board leadership and Company purpose
The Board has collective responsibility for the long-term success of the
Company. The Board holds an annual strategy day together with strategic
discussions at every meeting through a robust decision-making process. Long-
term strategy, divisional strategies and a progressive dividend policy are all
considerations of the Board in generating value for shareholders. The Group’s
strategy and business model and details of the governance arrangements
in place which contribute to the delivery of our strategy can be found in
our Annual Report. The Board is responsible for leading and governing the
Company and has overall authority for the management and conduct of its
business, strategy and development.
The Board is also responsible for ensuring the maintenance of a sound system
of internal controls and risk management (including financial, operational and
compliance controls) and for reviewing the overall effectiveness of systems
in place as well as for the approval of any changes to the capital, corporate
and/or management structure of the Company. The Board has a governance
framework in place which includes the directors, board committees, an
executive committee and a formal schedule of those matters that are reserved
to the Board and is satisfied that during 2024 its responsibilities were met.
We have an approved Board Conflicts of Interest Policy and Related Party
Transactions Policy.
Principle 1A
Provision 1
Managing our risks
and opportunities
»48 to 66
Business model
»16 to 21
Governance report
»100 to 150
The Schedule of Matters Reserved for the Board specifies that the Board is
responsible for ensuring that its culture and values are aligned to the Group’s
purpose, long-term strategy and objectives. Procedures for the regulation
of Board conduct are detailed in individual appointment letters. The Annual
Report sets out the activities taken by the Board in respect of monitoring
culture and its approach to investing in and rewarding its workforce.
To promote a common culture across the organisation, the Board defined a
clear purpose and set of values that support the successful delivery of our
strategy: Expand and Improve. Led by the Board and Executive Committee,
the purpose ‘to make a material difference to the lives of our colleagues,
customers and communities’ to create a workplace where people feel safe,
proud and motivated to do their best. The values at the heart of our business:
keep it simple; make it happen; strive to improve; and show you care, will drive
the performance of the business, motivating and engaging colleagues, building
customer loyalty and strengthening our relationship with local communities.
Principle 1B
Provision 2
Monitoring culture
»107 and 108
Directors’
Remuneration report
»129 to 146
Application
Compliance
1 Board leadership and Company purpose
The Board set and monitor the strategy for the Group, holding management
to account on their delivery of the agreed strategy. This is assisted by a robust
internal control and risk management framework, which is overseen by the
Audit & Risk Committee. The Annual Report sets out how resources have been
used to meet our strategy for the Group and those of the individual businesses.
The Board has identified five strategic risks: acquisitions and material capital
projects, climate change, markets, land and mineral management, and people,
all of which are detailed in the Annual Report.
Principle 1C
Provision 1
Managing our risks
and opportunities
»48 to 66
CEO review and
strategy
»22 to 31
Operating reviews
»32 to 39
The Board regularly receives and considers updates on the views of
shareholders through reports from its brokers and directors following
shareholder engagement. The Head of Investor Relations reports and analyst
notes are reviewed to maintain a broad understanding of varying investor
views. The Board, including the Chair and the Committee Chairs, engage with
shareholders at the AGM, and in 2024 the SID consulted with shareholders with
regards to the proposed extension of the Chair’s term in office beyond nine
years. A number of directors attended the Capital Markets event in November
where they were able to talk to investors.
At the AGM in 2024 there were no resolutions where 20% of the vote had
been cast against a Board recommendation. The results are published on our
website following our AGM.
The Board has appointed Pauline Lafferty as DNED for Workforce Engagement
and during 2024 she has undertaken both face-to-face and virtual sessions
across businesses.
Principle 1D
Provision 3
Engaging with
shareholders
»109 to 111
Provision 4
No AGM votes below 80%
Provision 5
S172(1) Statement
»95 to 99
Engaging with our
workforce
»107 and 108
Compliance statement against the Code
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124
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Application
Compliance
1 Board leadership and Company purpose
Group-wide policies are reviewed regularly and are accessible to all employees.
The Board undertakes an annual engagement survey with all employees
with the results being reviewed by the Board to ensure that a supportive and
inclusive culture is in place. The Board engages directly with the workforce
through site visits and through the DNED responsible for workforce
engagement.
The Group has in place a Whistleblowing Policy for any employee to raise
concerns. The policy provides for a confidential process for notification and
the arrangement for independent investigation to take place. The policy is
monitored by the Audit & Risk Committee and overseen by the Board.
The Board has a Conflicts of Interest Policy and all directors declare any
potential interest at meetings and provides a list of all external directorships
together with any third-party relationships. If a director has any concern
regarding the operation of the Board then any such concerns will be minuted in
the Board minutes. During the year, the Board determined that there were no
relationships that posed any actual or potential conflict.
Principle 1E
Provision 6:
Engaging with
our workforce
»107 and 108
Provision 7:
Board of Directors
»102 and 103
Provision 8:
Director
appointment letters
»138
Board Conflicts of
Interest Policy
2 Division of responsibilities
The Chair was not independent on appointment. The Chair does not represent
a significant shareholder, however he is a Closely Associated Person of a
significant shareholder. The Board is of the opinion that the Chair has acted at all
times as if he were independent and demonstrates clear and objective thought.
The Chair sets the Board’s agenda and the Board is provided with clear, regular
and timely information on the financial performance of the businesses within the
Group, and of the Group as a whole. In addition, other trading reports, contract
performance and market reports and data, including reports on personnel-
related matters such as health and safety and wellbeing issues, are provided. The
Board has approved a Schedule of Matters Reserved for the Board.
Principle 2F
Provision 9:
Board of Directors
»102 and 103
Board in action
»105 and 106
Application
Compliance
2 Division of responsibilities
All non-executive directors (excluding the Chair) have been identified by the
Board as independent. The Board has a majority of independent directors. No
changes to the composition of the Board occurred during the year.
There is a clear division of responsibilities between the Chair, Senior
Independent Officer and Chief Executive Officer. Each Board Committee
has Terms of Reference agreed by the Board which sets out the role and
responsibilities of that Committee.
The Chair encourages and facilitates each directors contribution to ensure that
no one individual can dominate its proceedings. All directors are encouraged
to use their independent judgement and to challenge all matters, whether
strategic or operational. The Senior Independent Director undertakes
an evaluation of the Chair annually and the Board undertakes an external
validation of its performance every three years.
There are clear responsibilities to ensure appropriate decision-making with
delegations in place through the terms of reference for each Board Committee.
Principle 2G
Provisions 10, 11 & 12:
Board of Directors
»102 and 103
Provision 14:
Division of responsibilities
»101
Corporate governance
at a glance
»101
All non-executive directors have letters of appointment which detail their
responsibilities of the role and time expectations. The Chair holds regular
sessions with the non-executive directors without executive directors being
present. The Nomination Committee, which is constituted of non-executive
directors, has the responsibility for recommending to the Board any
appointments or removal of directors.
The duties of the Board are detailed in our Schedule of Matters Reserved for the
Board, which aligns to the requirements of this Principle and includes the key
role of appointing and removing executive directors.
Each non-executive director’s letter of appointment sets out the commitments
expected to discharge their duties. Executive directors are prohibited from
taking more than one additional listed directorship, with none of the executive
directors holding any such positions during the year.
All directors undergo an induction on appointment, and training and
development is provided throughout the year.
Principle 2H
Provision 13:
Nomination
Committee report
»118 to 120
Provision 15:
Letters of appointment
»138
Schedule of Matters
Reserved for the Board
Board of Directors
»102 and 103
Nomination
Committee report
»118 to 120
Compliance statement against the Code
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125
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Application
Compliance
2 Division of responsibilities
The Group General Counsel has been appointed by the Board as Company
Secretary to act as a trusted advisor to the Board and its Committees, and
ensures there are appropriate interactions between senior management and
the non-executive directors. He is responsible for advising the Board on all
governance matters and all directors have access to him for advice. The Matters
Reserved for the Board states that only the Board can appoint or remove the
Company Secretary.
Principle 2I
Provision 16:
Schedule of Matters
Reserved for the Board
3 Composition, succession and evaluation
The Board has established a Nomination Committee to which it delegates
certain responsibilities. The majority of the membership of the Committee are
independent non-executive directors. The Chair of the Board is Chair of the
Committee, however the terms of reference set out the process for another
member to Chair the meeting when dealing with the Chair’s successor. The
Chair was not independent on appointment and is reaching nine years tenure
on the Board. The SID chaired parts of the Nomination Committee meeting
when discussions have taken place regarding Chair succession.
The Nomination Committee reviews succession plans for the Board and senior
executives together with talent management strategies. The Board has a
Diversity and Inclusion Policy which is detailed in the Annual Report.
All directors are subject to re-election as per the Company’s Articles of
Association (the ‘Articles’) and the supporting reasons for each directors re-
election are set out in the Notice of Meeting.
Principle 3J
Provision 17:
Nomination
Committee report
»118 to 120
Diversity reporting
»119 and 120
Provision 18:
Notice of Meeting
Application
Compliance
3 Composition, succession and evaluation
The current composition of the Board comprises various skills, knowledge
and experience that the Nomination Committee considers is requisite for
the Board to discharge its responsibilities effectively. At 31 December 2024,
the tenure of the Board consisted of one non-executive director in their third
term (Chair), two in their second term (SID and Chair of Sustainability), with
the remaining two in their second three-year term. During 2024 the Chair had
not been in post beyond nine year. The composition and performance of the
Board, and the skills and experience of each director, are regularly evaluated, to
ensure that they best fit the evolution of the Group’s business. The Nomination
Committee regularly reviews the succession plan to ensure that when seeking
to recommend new members to the Board, consideration of a range of relevant
matters including the diversity of its composition is given.
The Board considers that each of the directors brings a senior level of
experience and judgement to bear on issues of operations, finance, strategy,
performance, governance and standards of conduct. Directors are given
regular access to the Group’s operations and personnel as and when required.
Non-executive directors have a wealth and breadth of experience gained from
their appointments on other boards.
Principle 3K
Provision 19:
Board of directors
»102 and 103
Provision 20:
Nomination
Committee report
»118 to 120
The Board regularly reviews its own effectiveness and the Chair is in regular
contact with each member of the Board to ensure that any concerns are
identified and acted upon. The SID undertakes an annual performance review
of the Chair gaining feedback from the other members of the Board.
The Board carries out an externally facilitated Board Performance Review
every three years and welcomes input as part of the process from stakeholders
outside of the Board. The Board also conducts an internal review of its
effectiveness during the intervening period. The Board is committed to
actioning any suggestions or recommendations that are made to improve its
effectiveness. The Board undertook an external Board performance review
in 2023, the outcome and progress made in 2024 can be found in this Annual
Report. An internal Board and Committee performance evaluation was
undertaken in 2024.
The Board considers and reviews the requirement for continued professional
development and each director is encouraged to reflect on their own individual
needs. The Board is provided with development opportunities inside and
outside the boardroom on a wide range of areas.
Principle 3L
Provisions 21 and 22:
Board performance
review
»119
Board in action
»105 and 106
Provision 23:
Nomination
Committee report
»118 to 120
Diversity reporting
»119 and 120
Compliance statement against the Code
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126
Strategic report Governance Financial statements Additional information
Application
Compliance
4 Audit, risk and internal control
The Board has established an Audit & Risk Committee. Membership solely
consists of non-executive directors. Two members have recent and relevant
financial experience and the Committee as a whole has competence relevant
to the sector. The Chair of the Board is not a member. Terms of reference have
been approved which complies fully with the roles and responsibilities set out in
the Code.
The Audit & Risk Committee manages the relationship with the internal
and external audit functions on behalf of the Board satisfying itself of their
independence and effectiveness. On an annual basis, the Committee considers
reports on the effectiveness of both the internal and external audit functions
which is carried out through assessments in which both the Group and the audit
functions contribute. The Committee has evaluated and considers that the
external auditor is independent and is compliant with the Committee’s policy on
the provision of non-audit services.
The Committee also has oversight of the Risk and Control function within the
Group together with the finance function. The Committee is responsible for
reviewing the internal financial controls and risk management systems in order
to ensure the integrity of the financial and narrative statements. The Audit &
Risk Committee has an approved policy on the supply of non-audit services.
The Statement of Directors’ Responsibilities, Going Concern and Viability
Statements are contained within the Annual Report and are approved by
the Board.
Principle 4M
Provisions 24 and 26:
Audit & Risk
Committee report
»112 to 117
Provision 25:
Audit & Risk
Committee report
»112 to 117
Viability Statement
»67 and 68
Statement of Directors’
Responsibilities
»150
The Audit & Risk Committee provides advice to the Board as to whether
it considers the Annual Report, taken as a whole, to be fair, balanced and
understandable, and provides information necessary for shareholders to
assess the Company’s position, performance, business model and strategy.
This responsibility of the Board is presented and confirmed by the Board in the
Annual Report.
The Annual Report contains disclosures that the Board considers it appropriate
to adopt the Going Concern basis of accounting and how it has assessed the
prospects of the Company. The Viability Statement confirms that the directors
have a reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall. The Statement of Directors’
Responsibilities provides details of the director’s responsibility for preparing
the Annual Report.
Principle 4N
Provisions 25 and 27:
Audit & Risk
Committee report
»112 to 117
Provisions 30 and 31:
Financial statements
»162 to 209
Viability Statement
»67 and 68
Application
Compliance
4 Audit, risk and internal control
The Board is ultimately responsible for the internal control framework including
risk management and internal controls, and for ensuring robust systems are in
place for the assessment of principal risks and the emerging risks faced by the
Company. The Board conducts an annual assessment of those risks, together
with monitoring the risk management and internal controls and confirms that
it has done so in the Annual Report. The procedures that the Board has in place
to identify emerging risks and how these are being managed or mitigated are
disclosed in the Annual Report. The Audit & Risk Committee supports the
Board with their responsibility.
In compliance with provision 28 of the Code, the Board confirms that they have
carried out a robust assessment of the emerging and principal risks facing
the Group, including those that would threaten its business model, future
performance, solvency and liquidity.
Principle 4O
Provisions 28 and 29:
Managing our risks
and opportunities
»48 to 66
Audit & Risk
Committee report
»112 to 117
5 Remuneration
The Board has established a Remuneration Committee consisting of
independent non-executive directors and a Chair who has the requisite
experience as set out in the Code. The Remuneration Committee assists
in fulfilling the Board’s oversight responsibilities relating to the Directors’
Remuneration Policy (the ‘Policy’ or the ‘2024 Policy’) and practices and is
responsible for the formalisation of all elements of remuneration for the Chair,
the executive directors, and the Executive Committee.
The Remuneration Committee reviews workforce remuneration and relation
policies and the alignment of those incentives and rewards with the culture of
the Group. The policies are aligned to our purpose and values and are designed
to support the Company’s long-term strategic aims.
Principle 5P
Provisions 32 and 33:
Terms of reference
Directors’
Remuneration report
»129 to 146
Compliance statement against the Code
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127
Strategic report Governance Financial statements Additional information
Application
Compliance
5 Remuneration
The Remuneration Committee has established remuneration schemes that
promote long-term shareholding by executive directors that support alignment
with long-term shareholder interests, with share awards subject to a total
vesting and holding period and post-employment shareholding requirements.
The Policy will next be put to shareholders for approval no later than the 2027
AGM, following last approval being sought in 2024.
The 2024 Policy is aligned with the Company’s culture to drive behaviours
consistent with Company strategy and purpose and values, which aims to
attract, retain and motivate successfully without paying more than is necessary.
Pension contribution rates for executive directors are aligned to those available
to the workforce. A proportion of remuneration is performance-related with
any such elements structured so as to be transparent, stretching and rigorously
applied which do not reward poor performance.
Details of all directors service agreements and letters of appointment are
detailed in the Annual Report. Both executive directors have a contract notice
period of one year, whether given by the individual or the Company. The Board’s
overriding approach to payments for loss of office is to act in shareholders’
interests. Non-executive remuneration remains the responsibility of the Board,
as specified in the Schedule of Matters to be Reserved for the Board and does
not include share options or any performance-related elements.
Principle 5Q
Provision 34:
Directors’
Remuneration report
»139
Provisions 36, 37, 38, 39:
Directors’
Remuneration report
»134 to 138
Provisions 40 and 41:
Directors’
Remuneration report
»129 to 146
The Remuneration Committee consists of only independent non-executive
directors and a Chair who has the requisite experience as set out in the Code.
The Remuneration Committee is supported by an external consultant who
provides independent advice and benchmarking and is identified in the
Annual Report.
Policies are in place to override formulaic outcomes and provide provisions for
the Remuneration Committee to recover or withhold sums or share awards.
A summary of the Policy can be found in the Annual Report.
Principle 5R
Provision 35:
Directors’
Remuneration report
»143
Provision 37:
Directors’
Remuneration Policy
»134 to 137
Compliance statement against the Code
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128
Strategic report Governance Financial statements Additional information
Annual statement
1
2024 saw the
implementation of
our first Directors’
Remuneration Policy as
a Main Market company.
This Policy is designed
to support our strategy
to deliver a long-term
sustainable performance
for the benefit of our
stakeholders.
Pauline Lafferty
Chair, Remuneration Committee
Dear shareholder
I am delighted to introduce this Directors’
Remuneration report for 2024, the first full
financial year for Breedon as a Main Market
company. 2024 was a significant year for
the Committee, with the adoption of our
first Directors’ Remuneration Policy which
received c.97% support by shareholders
at the 2024 AGM. We are grateful for the
constructive feedback received when we
consulted with our investors on the Policy
and look forward to continued engagement.
2024 business performance
We have delivered a resilient performance
in 2024 despite challenging external
factors. Revenue grew 6% to £1,576.3m
and we delivered an Underlying EBITDA of
£269.9 m and Underlying EBIT of £173.7m.
Our acquisition during the year of BMC
in the US has had a positive impact on our
performance and we continued to add bolt-
on acquisitions during the year. Exceptional
cost management across the Group has
played a part in our performance and has
mitigated the effect of reduced volumes
in a challenging market.
We made excellent progress on our
strategic objectives this year and at our
Capital Markets Event in November we
launched the next iteration of our strategy,
Breedon 3.0.
It is our people who make Breedon unique
and help us every day to achieve great
results. We have maintained very strong
Engagement Survey results again this year
with 78% of our colleagues telling us they
are proud to work for Breedon and 84% are
motivated to do their best work for Breedon.
1
»129
Annual statement outlines the key items
considered by the Committee during the
year, including pay outcomes, and our
approach to paying directors in 2025.
2
»133
Remuneration at a glance provides a
snapshot of executive directors’ pay for
the year.
3
»134
Directors’ Remuneration Policy provides
a summary of the 2024 Policy with a full
copy available on the website and in the
2023 Annual Report.
4
»139
Annual report on remuneration details
the pay outcomes for 2024, sets out
additional information on the context
in which pay has been awarded, and
describes in more detail how we propose
to implement our Policy in 2025.
This report is comprised of four sections
Roles and responsibilities
of the Remuneration Committee
Click or scan to see the
terms of reference
2024 business performance
Revenue
Basic Earnings
Per Share
Underlying EBITDA
Colleague
engagement score
£1,576.3m
28.1p
£269.9m
78%
Directors’ Remuneration report
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129
Strategic report Governance Financial statements Additional information
The Committee considered carefully
whether the annual bonus outcome was
consistent with the underlying performance
of the business. On balance, the Committee
agreed the bonus outcome was a fair
reflection of performance, considering the
strong Group financial performance set out
above and the excellent progress made on
strategic and ESG priorities. As a result, no
discretion was applied in the Committee’s
approval of the outcome.
2022 PSP
Vesting of the 2022 PSP awards was based
50% on Breedon’s TSR against the FTSE
250 over the three-year performance
period ending 31 December 2024 and 50%
on EPS performance in 2024. Breedon’s
TSR over the period was above the median
of the benchmark, warranting 28.5%
vesting of this element. The 2024 adjusted2
EPS outturn of 34.5p was between target
and maximum, warranting 25% vesting
of this element. Therefore, 53.5% of the
2022 PSP award will vest in April 2025.
The Committee believes the PSP outcome
is a fair reflection of overall performance
over the performance period in the
context of a challenging macroeconomic
environment and applied no discretion in
the determination of the outcome.
2 The Pillar Two adjustment increased the Underlying
Diluted EPS for performance measurement
purposes by 0.2p to 34.5p.
2024 remuneration outcomes
Annual bonus
Consistent with the approach taken in
previous years, 75% of the 2024 annual
bonus was based on a sliding scale of
Underlying EBIT targets and 25% on a range
of strategic and sustainability objectives.
The range set for Underlying EBIT was
based on outperforming a stretching
budget, with full payout requiring
outperformance of market consensus at the
time targets were set. The Committee also
increased the Underlying EBIT range during
the year to reflect the positive impact of the
BMC acquisition. The delivery of adjusted1
Underlying EBIT of £174.7m in 2024 falls
between the target and maximum of the
bonus range, warranting 62.6% payout of
the financial element of the bonus. Excellent
progress towards our corporate objectives
in 2024 resulted in a payout of 100% of
maximum for this element.
The overall bonus payout for 2024 was
therefore 108% of base salary, of which
one-third will be deferred in shares for
two years.
1 For details of the adjustments made for performance
measurements purposes see page 140.
The Committee also considered the vesting
value of the 2022 PSP awards in relation
to investor guidance around windfall
gains. 2022 PSP awards were granted in
April 2022 using a share price of 402.0p,
while the average share price over Q4
2024 used to calculate the single figure of
remuneration (see page 139) was 444.8p.
The Committee reviewed a number of
relevant perspectives in its deliberations,
concluding that the gain through share
price appreciation for this award reflects
strong business performance and is
not indicative of any windfall gains.
The Committee will review again this
decision at the time of vesting in April 2025.
Annual bonus outcome 2024
Performance share plan outcome 2022 cycle
EBIT1
Corporate objectives
Threshold
10% payout
£154.7m
Maximum
100% payout
Weighting
% of
maximum
achieved
% of
maximum
achieved
% of
bonus
achieved
% of
PSP
vesting
£183m
75%
62.6%
47%
25%
100%
25%
£174.7m
Fully met
Overall, bonuses of 108.0% of salary became payable to executive directors
EPS2
TSR vs FTSE 250
Threshold
25% payout
33.25p
Median
Maximum
100% payout
Weighting
37.00p
Upper quartile
50%
50%
25%
50%
57%
28.5%
34.5p
61st percentile
Overall 53.5% of the 2022 PSP will vest to the executive directors
2024 PSP
Awards were granted to the executive
directors under the PSP in April 2024,
with vesting linked to EPS, TSR and, for
the first time, carbon reduction. The TSR
performance condition is consistent with
prior awards, with full vesting requiring
Breedon to deliver upper quartile TSR when
compared to the FTSE 250. The EPS range
was set to be challenging in the context
of Breedon’s growth ambitions, and the
carbon reduction range was set to build
on Breedon’s previous significant progress
in reducing carbon emissions.
Full details of the targets are disclosed
»142
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Strategic report Governance Financial statements Additional information
Senior management and wider
workforce
The Committee sets remuneration for senior
executives, and during the year received
updates on colleague remuneration, policies
and practices across the Group, enabling
the Committee to stay alert to trends
and themes for the wider workforce. Pay
increases for the wider workforce in 2024
were set to 4.0%. The executive directors
and Executive Committee received the
same level of increase.
Through the BMC acquisition in 2024,
we welcomed a number of colleagues
to Breedon’s workforce in the US. The
Committee has therefore spent time during
the year in understanding in more depth
competitive practices in that talent market,
including the differences in structures
and philosophy between that market and
Europe. As BMC is further integrated into
Breedon, through its overarching remit to
govern pay practices across the Group,
the Committee will keep under review
the structure of remuneration across the
workforce to ensure it aligns with our
stated principles of competitiveness and
supporting our shared culture and values.
As the DNED for Workforce Engagement,
I attended a number of focus groups in
2024 with colleagues across our UK and
Ireland businesses and discussed a wide
range of topics.
Our Group-wide engagement survey
‘Your Say’ ran in November 2024 and for
the first time included our BMC colleagues.
We are delighted with both participation
from our colleagues (75%) and our overall
engagement score (78%).
Key activities in 2024
January
measures and targets for the 2024
annual bonus;
all-employee share plans;
policy review – conclusion of
shareholder consultation;
Executive Committee remuneration
review; and
2024 PSP structure.
February
base salary changes for the executive
directors and Executive Committee
for 2024 in the context of workforce
increases;
annual bonus outcomes for 2023;
approval of the 2021 PSP award vesting;
and
shareholding guidelines.
April
a review of US remuneration following
the BMC acquisition;
a review and increase to bonus targets
following the BMC acquisition; and
approval of the grant of the 2024 PSP
awards.
November
the Committee’s terms of reference;
a review of the effectiveness of the
Committee and its independent
advisers;
a review of workforce arrangements
including US;
interim performance update on
incentives; and
market update.
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Looking forward to 2025
2025 will be the second year of our three-
year Policy which the Committee will
implement as follows:
Salary
The Committee supports the principle that
executive director salary increases should
be in line with or below those granted
to the rest of the workforce. However,
in reviewing executive director salaries
this year, we believe that circumstances
justify a departure from this norm for
2025. Recognising Rob Wood’s continued
strong performance and contribution in
2024 and his leadership of a Group which
continues to evolve in scale, complexity
and geographical reach, the Committee
determined to increase his salary by 4.7% to
£700,000 per annum from 1 April 2025.
In its review of James Brotherton’s salary,
the Committee noted that when James was
appointed in 2021, his salary was set lower
than his predecessor with the Committee
agreeing to review the matter regularly
as he developed in his role. Since then,
James has performed at the highest level
and made a significant contribution to the
success of the business. The scope of his
responsibilities has recently broadened to
include leadership of the delivery of our
digitalisation roadmap, and the complexity
of the role has increased materially
following the acquisition of BMC in 2024.
In light of this, we believe that a salary
increase of 7.3% to £485,000 per annum
is fair, appropriate and commensurate
with the levels of pay for an executive of his
calibre at companies of comparable size
and complexity to Breedon.
The average workforce salary increase is yet
to be agreed.
Benefits and pension
There has been no change to the benefits
provision. Pension contribution rates
remain in line with the general workforce
contribution offering of 5% of salary.
Annual bonus
The annual bonus opportunity for both
executive directors will continue to be 150%
of base salary and based 75% on underlying
profitability and 25% on corporate
objectives including ESG. Consistent with
the Group’s approach to migrate its primary
operating profit metric from Underlying
EBIT to Underlying EBITDA, for 2025 the
financial element of the annual bonus will
be determined by the Group’s Underlying
EBITDA performance. The Underlying
EBITDA measure will remain subject
to a moderator to reflect actual capital
employed in the business versus budget,
and a quality of earnings assessment
will apply. The targets and objectives
are considered to be commercially
sensitive and will be disclosed in the 2025
remuneration report.
PSP
The Committee intends to make awards
with a face value of 200% of salary to the
CEO and 175% of salary to the CFO. The
Committee has considered the prevailing
share price and considers these award
levels to be appropriate.
Consistent with the approach taken in
2024, EPS and relative TSR will continue
to apply with weightings of 42.5% each.
The remaining 15% will be based on a
carbon reduction metric, which reflects our
environmental ambitions. The performance
ranges set for these metrics are detailed on
page 146.
Concluding remarks
In accordance with the regulatory
requirements for UK Main Market
companies, we will be required to submit
a new Policy to shareholders for approval
by no later than the 2027 AGM. In the
meantime, the Committee will continue
to monitor developments in market
practices and investor attitudes around
senior executive pay, to ensure the 2024
Policy is fit-for-purpose, robust and
competitive. In particular, the Committee
will focus on ensuring the remuneration
structure reinforces Breedon’s growth
ambitions, through our choice of variable
pay structures, incentive mix, performance
measure selection and target ranges.
The Committee continues to place great
importance on ensuring that there is a
clear link between pay and performance,
including a focus on culture, adherence
to the Group’s risk framework, and that
remuneration outcomes are reflective of
this wider context.
I hope you find this report to be a
comprehensive account of the Committee’s
activities and the decisions we have made
during the year. I shall be available at the
upcoming AGM to answer any questions
about the work of the Remuneration
Committee, and thank you again for your
continued support of Breedon.
Pauline Lafferty
Chair, Remuneration Committee
5 March 2025
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Strategic report Governance Financial statements Additional information
Remuneration at a glance
2
Actual pay delivered for 2024 £’000
CEO
CEO
CFO
CFO
711
722
546
270%
488
488
369
43%
CEO
CFO
Salary
£700k (+4.7%)
£485k (+7.3%)
Benefits
Private medical insurance, medical screening,
car allowance
Pension
5% of salary, in line with the workforce
Opportunity
150% of salary
150% of salary
Measures
75% — Adjusted Underlying EBITDA (with moderator to
reflect actual capital employed versus budget)
25% — Key strategic/sustainability objectives
Deferral
One-third of any bonus earned, for two years
Annual bonus
Fixed pay
Opportunity
200% of salary
175% of salary
Measures
42.5% — EPS
42.5% — TSR vs FTSE 250 excl investment trusts
15% — Carbon reduction
Cycle
Three-year performance period plus two-year hold
Executive director remuneration
Executive director remuneration
250
500
750
1,000
1,250
1,500
1,750
2,000
Level
200% of salary
Details
Retain half of any vested share awards (net of tax) until
guideline is achieved. Remains in force for two years
post-cessation
Performance share plan
Shareholding requirements
Shareholding % of salary
Annual bonus outcome
Performance share plan outcome 2022 cycle
EBIT
Corporate objectives
Total 72%
Threshold
10% payout
£154.7m
Maximum
100% payout
Weighting
Achieved
Payout
£183m
75%
62.6%
47%
25%
100%
25%
£174.7m
Fully met
EPS
TSR vs FTSE 250
Total 53.5%
Threshold
25% payout
33.25p
Median
Maximum
100% payout
Weighting
Achieved
Payout
37.00p
Upper quartile
50%
50%
25.0%
50%
57%
28.5%
34.5p
61st percentile
50%
100%
150%
200%
One-year performance period
Two-thirds of bonus earned is paid
in 2026
One-third is deferred in shares for
two years
Three-year performance period
Two-year holding period on any
vested shares
2025
2026
2027
2028
2029
2024
2025
Clear and simple
Attracts, retains and motivates
Competitive but not excessive
Clear focus on performance-related pay
Aligned with shareholders
and other stakeholders
Supports our culture and values
Promotes good governance
Our pay principles
250%
300%
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Strategic report Governance Financial statements Additional information
Purpose and link to strategy
Operation
Maximum opportunity
Performance conditions
Base salary
To provide a competitive base salary reflective of
the particular skills, calibre and experience of an
individual.
Normally reviewed annually or where there is a
significant change of responsibilities.
Typically take effect from 1 April.
No maximum salary, although increases will
normally be broadly in line with those awarded to
the wider workforce.
Increases above this level may be awarded to take
into account individual circumstances.
Any increase in base salary is only implemented
after careful consideration of individual
contribution and performance.
Benefits
To provide market competitive, cost effective
benefits to assist with retention and recruitment.
May include private medical insurance, life
assurance, car allowance, executive medical
screening and any other benefits which are
introduced for the wider workforce.
May also include certain relocation, travel and/or
incidental expenses as appropriate.
There is no predetermined maximum.
Not performance related.
Pension
To provide employees with long-term savings to
allow for retirement planning.
Includes participation in a defined contribution
pension plan or a cash supplement in lieu of
pension up to the same value, or a mixture of both.
Aligned with the wider workforce pension
contribution (5% of base salary).
Not performance related.
Our Directors’ Remuneration Policy was approved by shareholders at the AGM
on 24 April 2024 and will continue to apply for the 2025 financial year.
Summary Policy table for directors
The table below sets out the main components of the Policy.
Click or scan here to see a full copy of the
Policy approved in 2024
Directors’ Remuneration Policy
3
Directors’ Remuneration report
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Strategic report Governance Financial statements Additional information
Purpose and link to strategy
Operation
Maximum opportunity
Performance conditions
Annual bonus
Rewards achievement of annual financial and
business targets aligned with the Group’s
KPIs. Bonus deferral encourages long-term
shareholding, supports retention and discourages
excessive risk taking.
Subject to the achievement of performance
targets and with payment at the Committee’s
discretion.
Two-thirds payable in cash and one-third
deferred in shares for two years.
Malus and clawback provisions apply.
150% of base salary.
Financial measures will normally determine
the majority of the bonus opportunity and the
balance may be based on non-financial, strategic,
personal and/or ESG-related objectives.
The Committee has discretion to adjust the
formulaic outcome taking account of any relevant
factors.
Performance Share Plan
To drive superior performance of the Group and
delivery of the Group’s long-term objectives, aid
retention and align directors’ interests with those
of the Company’s shareholders.
Share awards granted in the form of nil or nominal
cost options or conditional awards.
Vested awards are subject to a two-year
holding period.
Dividend accrual applies.
Malus and clawback provisions apply.
200% of salary for the CEO and 175% of salary for
other directors.
Vesting subject to the satisfaction of
performance conditions, typically measured over
a period of at least three years.
Measures could include, but are not limited
to, EPS, relative TSR or sustainability-based
measures. The Committee has the flexibility to
vary the mix of measures or to introduce new
measures for future awards.
The Committee has discretion to alter the vesting
outcome taking account of any relevant factors.
All-employee share schemes
Encourages colleague share ownership and
therefore increase alignment with shareholders.
Sharesave schemes are open to all colleagues of
the Group.
The Company may introduce other all-employee
schemes, if appropriate.
Limits set by HMRC from time to time.
Not performance related.
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135
Strategic report Governance Financial statements Additional information
Purpose and link to strategy
Operation
Maximum opportunity
Performance conditions
Shareholding guidelines
Encourages executive directors to build a
meaningful shareholding in the Group.
At least half of any share awards vesting
(post-tax) must be retained until the required
holding is reached.
Shares owned outright count towards the in-
employment guideline as do unvested deferred
bonus shares and vested PSP awards, which
remain unexercised on a net of tax basis.
During employment: 200% of salary guideline
applies.
Post-employment: the holding requirement is the
lower of the shareholding at cessation and 200%
of salary, and applies for two years.
Not performance related.
Chair and non-executive directors’ fees
To attract high-calibre individuals and
appropriately reflect knowledge, skills and
experience.
Fees reviewed annually, taking into account time
commitment and contribution.
The Chair is paid an all-inclusive fee for all Board
responsibilities.
Non-executive directors receive a basic fee and
additional fees for further responsibilities.
No maximum fee level or rate of increase, but
account is taken of market movements and
ongoing time commitments.
Not performance related.
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136
Strategic report Governance Financial statements Additional information
Year 1
Year 2
Year 3
Year 4
Year 5
CEO
(£’000)
CFO
(£’000)
Minimum
Minimum
Target
Target
Maximum
Maximum
Maximum
with share
price growth
Maximum
with share
price growth
Total fixed
remuneration
Annual
bonus
Performance
share plan
Shareholding
guidelines
Total fixed remuneration
Annual bonus
Performance share plan
Share price growth
Illustration of the application of the Policy
One-year performance period
Maximum two-thirds payment as cash
Malus and clawback apply
Base Salary
Benefits
Pension
Executive directors are expected to build and maintain a
shareholding equivalent to 200% of their base salary
Three year performance period
Malus and clawback apply
Two-year
holding period
Malus and
clawback apply
Minimum one-third payment deferral
as shares for two-year period
No further performance conditions
Malus and clawback apply
The balance between fixed and variable
‘at risk’ elements of remuneration changes
with performance. Our Policy results in
a significant proportion of remuneration
received by executive directors being
dependent on Company performance.
The charts above illustrate how the Policy
would function for minimum, on-target and
maximum performance for each executive
director in 2025.
Assumptions for the chart:
Benefits estimated at the value shown
in the single total figure of remuneration
table for 2024.
On-target: bonus achieved at 50% of the
maximum opportunity, and the PSP is
valued at 25% of the face value at grant.
Maximum: full bonus achieved and PSP
vesting in full i.e. bonus payouts of 150%
of salary, and PSP award values of 200%
and 175% of salary for the CEO and CFO
respectively.
Share price appreciation of 50% has been
assumed for the PSP awards under the
final ‘maximum with growth’ scenario
(no share price appreciation has been
assumed for the first three sections).
Amounts relating to all-employee share
schemes have, for simplicity, been
excluded from the charts.
22%
43%
18%
36%
32%
33%
27%
100%
46%
24%
19%
£755
£1,630
£3,205
£3,905
19%
40%
16%
34%
33%
35%
29%
100%
48%
25%
21%
£529
£1,105
£2,106
£2,530
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137
Strategic report Governance Financial statements Additional information
Service agreements/letters of appointment and loss of office
Each director has a service agreement or letter of appointment with the Company
as follows:
Director
Service agreements/
letters of appointment
and loss of office
Date of contract/
letter of appointment
following Admission
Notice period
From the
director
From the
Company
Executive directors
Rob Wood
27 February 2014
10 May 2023
12 months
12 months
James Brotherton
17 November 2020
10 May 2023
12 months
12 months
Non-executive directors
Amit Bhatia
1 August 2016
26 April 2023
–
–
Carol Hui, OBE
3 March 2020
26 April 2023
–
–
Pauline Lafferty
17 June 2021
26 April 2023
–
–
Helen Miles
18 November 2020
26 April 2023
–
–
Clive Watson
24 July 2019
26 April 2023
–
–
The non-executive directors, Pauline Lafferty and Helen Miles, entered into new letters
of appointment in 2024.
In line with the expectations of the UK Corporate Governance Code, all directors submit
themselves for re-election annually at the AGM.
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Strategic report Governance Financial statements Additional information
Annual report on remuneration
4
4A
Remuneration for 2024
»139
4B
Directors’ share ownership
and share interests
»142
4C
Remuneration Committee
membership, governance
and voting
»143
4D
Pay comparison
»144
4E
Implementation of the
Policy in 2025
»146
This part of the report is comprised of
five sections:
4A Remuneration for 2024
Single total figure of directors’ remuneration (audited)
The total remuneration of the directors for the year ended 31 December 2024 and the prior year is shown in the table below:
Director
Salary/fees
£’000
Benefits1
£’000
Pension2
£’000
Fixed pay
Sub-total
£’000
Annual
bonus3
£’000
PSP awards
vesting4
£’000
Variable pay
Sub-total
£’000
Total
£’000
2024 2023
2024 2023
2024 2023
2024 2023
2024 2023
2024 2023
2024
2023
2024
2023
Executive directors
Rob Wood
662
636
20
20
29
28
711
684
722
799
546
349
1,268
1,148
1,979
1,832
James Brotherton
448
430
20
20
20
19
488
469
488
541
369
202
857
743
1,345
1,212
Non-executive directors
Amit Bhatia
219
183
–
–
–
–
219
183
–
–
–
–
–
–
219
183
Carol Hui, OBE
70
64
–
–
–
–
70
64
–
–
–
–
–
–
70
64
Pauline Lafferty
77
69
–
–
–
–
77
69
–
–
–
–
–
–
77
69
Helen Miles
59
54
–
–
–
–
59
54
–
–
–
–
–
–
59
54
Clive Watson
81
74
–
–
–
–
81
74
–
–
–
–
–
–
81
74
1 Benefits paid to Rob Wood and James Brotherton comprise the provision of private medical insurance and a car allowance.
2 Rob Wood and James Brotherton received a salary supplement in lieu of a contribution to a pension arrangement.
3 Further information in relation to the bonuses payable to Rob Wood and James Brotherton is given on pages 140 and 141 and these bonuses were earned pursuant to the terms
of the 2024 annual bonus scheme.
4 Both executive directors were granted PSP awards on 11 April 2022 which are due to vest at 53.5% on 11 April 2025. As the vesting date falls after the remuneration report is
signed off, the value of these awards has been estimated using the three-month average share price to 31 December 2024 (444.8p). The actual value of these awards at the
point of vesting will be set out in the 2025 Directors’ Remuneration report. The 2023 PSP figures have been updated to reflect the actual share price on the date of vesting
(374.0p and the value of accrued dividends during the vesting period).
This section of the report has been prepared
in accordance with Part 3 of The Large and
Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008
(as amended) and UKLR 6.6.6R. The
Directors’ Remuneration report, comprising
the Annual Statement to shareholders by
the Remuneration Committee Chair and the
Annual report on remuneration will be put
to a to a single advisory shareholder vote
at the AGM on 29 April 2025.
Directors’ Remuneration report
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139
Strategic report Governance Financial statements Additional information
Annual bonus for the year ended 31 December 2024 (audited)
The annual bonus opportunity for each executive director was 150% of base salary.
The 2024 annual bonus was based on the achievement of stretching Underlying EBIT
targets for 75% with the remaining 25% based on corporate objectives. The Underlying
EBIT range was set around the budget for the year, and was subsequently increased to
reflect the impact of the BMC acquisition. At the time of setting the Underlying EBIT range,
the stretch level of performance required a 7% out-performance of market consensus.
Underlying EBIT (75% of the total bonus)
Threshold level of
Underlying EBIT
(10% payout)
£m
Target level of
Underlying EBIT
(50% payout)
£m
Maximum level of
Underlying EBIT
£m
Adjusted
Underlying EBIT
£m1
Bonus earned
(percentage of
maximum) %
154.7
171.9
183.0
174.7
62.6
1 After the application of the capital employed moderator and the exchange rate translation
The rules of the annual bonus scheme provide that the actual level of Underlying EBIT
achieved is subject to a capital moderator which reinforces working capital discipline and
is based on applying a capital charge to excess working capital, and conversely a capital
credit for a reduction in working capital. In 2024 the impact of the capital moderator on
the Underlying EBIT achieved was to increase EBIT by c.£0.6m based on working capital
being lower than had been budgeted as increases in capital employed from acquisition of
businesses were fully offset by a stronger than budgeted working capital performance.
In 2024 it was determined by the Committee that, for performance measurement
purposes, BMC earnings for 2024 would be translated to sterling at an exchange rate of US
dollar 1.26:GBP, consistent with the rate of exchange on the date of acquisition. Accordingly,
Underlying EBIT was increased for performance measurement purposes by a further
£0.4 m to recognise the different exchange rates used (1.29) for the reporting period.
In overseeing the bonus outcome, the Committee examines whether the formulaic
calculation for the Underlying EBIT metric is justifiable and explainable in the context
of overall business performance, particularly focusing on the impact of one-off events.
The Committee concluded from its review that the formulaic outcome against the
Underlying EBIT targets reflected the underlying performance of the Group in the year.
Directors’ Remuneration report Annual report on remuneration
4A Remuneration for 2024
Corporate objectives (25% of the total bonus)
Objectives
Assessment
Strategic themes
Strategy — refresh the Group Strategy and clarity
on third Platform.
Breedon 3.0 evolved strategy was approved by the
Board and presented at the Capital Markets Event
in November.
BMC acquisition completed and integration in line
with the acquisition plan.
Customer — maintain and/or improve NPS across
all divisions.
Target for 2024 was to maintain or improve against
weighted average NPS score of 63 for 2023. This
target was exceeded with a weighted NPS score
of 67.
Mineral reserves — planning applications/planning
consents secured for key mineral reserves.
Target for replenishment of mineral reserves in
2024 exceeded extraction with 36.2mT minerals
secured during the year.
Digitalisation — roadmap for the delivery of our
five-year technology strategy.
Five-year technology roadmap developed by
newly appointed CIO and approved by the Board
with key delivery priorities set for 2025.
Sustainability 2030 target
Planet — Progress the Peak Cluster project
alongside continuation of research into emerging
technologies and cement innovation.
Good progress made towards FEED on the Peak
Cluster decarbonisation project.
A number of significant research and innovation
projects and initiatives commenced.
People — demonstrate the positive impact to
25,000 people by the end of 2024.
27,268 people positively impacted during 2024.
Places — percentage of concrete and asphalt
sales revenue to be from products with enhanced
sustainability attributes by the end of 2024.
Sales of products with more sustainable attributes
rose from 40% to 48% in 2024 exceeding the target
of 42%.
The objectives made up 25% of the total bonus for the CEO and CFO. The Committee
determined that excellent progress had been made against each of the objectives
and targets and this resulted in a payout of 100%.
The table above provides disclosure of the objectives against each area and actual
performance.
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140
Strategic report Governance Financial statements Additional information
4A Remuneration for 2024
Overall the bonus outcome for the year, taking into account financial performance and the
delivery of corporate objectives, was 72% of maximum. The overall bonus for the period
was as follows:
Maximum bonus
opportunity
(% of salary)
Bonus payout
(% of maximum)
Bonus earned
(£’000)
Payable in
cash
Portion to be
deferred in
shares for
2 years
Rob Wood
150%
72%
722
481
241
James Brotherton
150%
72%
488
325
163
The Remuneration Committee believes these outcomes fairly reflect the performance of
the business over the 2024 financial year and therefore no adjustment is required to the
formulaic outcomes. In arriving at this conclusion, the Committee recognised the resilient
performance delivered in 2024 in a very challenging macroeconomic environment.
The Committee also considered progress on strategic delivery and sustainability objectives
delivered during the year.
2022 PSP vesting outcome in respect of performance to 31 December 2024 (audited)
Awards were granted under the PSP on 11 April 2022, with vesting subject to two
performance conditions, each with an equal weighting – Underlying Diluted EPS growth
and relative TSR against the constituents of the FTSE 250 (excluding investment trusts).
The performance period for both measures ended on 31 December 2024 and the awards
will become exercisable on the third anniversary of grant subject to continued service.
These awards are subject to a two-year holding period.
Threshold
(25% vesting)
Maximum
(100% vesting)
Actual
Vesting (% of
maximum)
Relative TSR (50%)
Median rank
(12)% TSR
Upper quartile rank
20.5% TSR
1.0% TSR, above
median ranking
57%
EPS (50%)1 2
33.25p
37.0p or higher
34.5p
50%
1 The EPS targets were adjusted for the one-for-five share consolidation undertaken as part of the move to the
Main Market.
2 The Pillar Two adjustment increased Underlying Diluted EPS for performance measurement purposes by 0.2p to
34.5p (see page 130).
The EPS performance over the period was such that this part of the award will vest at 50%.
For TSR, the Company ranked above median of the comparator group and therefore 57%
of this award will vest. As such, 53.5% of the awards will vest on 11 April 2025.
Number of PSP
awards granted
‘000
Performance
outcome
%
Number of
awards vesting
‘000
Value due to
share price
appreciation
£’000
PSP single total
figure value
£’000
Rob Wood
229
53.5%
123
53
546
James Brotherton
155
53.5%
83
36
369
The value of these awards as set out in the above table is based on the average three-month
share price to 31 December 2024 of 444.8p.
The Committee believes the vesting outcome is a fair reflection of performance over the
three-year period and therefore no discretion has been applied to amend the formulaic
outcomes. In addition, the Committee is satisfied that no windfall gains have arisen but this
will be subject to a final assessment at vesting.
2021 PSP vesting
The PSP awards granted on 23 April 2021 vested at 50% on 23 April 2024. In the 2024
Annual Report, an estimated vesting value was provided based on the three-month
average share price to 31 December 2023 (337.5p). The prior year PSP values in the single
figure table have been updated to reflect the actual share price on the date of vesting
(374.0p) and the value of accrued dividends during the vesting period.
Payments to former directors (audited)
There were no payments to former directors during the year.
Payments for loss of office (audited)
There were no payments for loss of office during the year.
4A Remuneration for 2024
Directors’ Remuneration report Annual report on remuneration
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141
Strategic report Governance Financial statements Additional information
4B Directors’ share ownership and share interests
Share awards granted in 2024 (audited)
The table below provides details of PSP awards made to executive directors on
25 April 2024.
Director
Type of award
Percentage
of salary
Basis of
award
Number of
shares under
award1
‘000
Face value
of award1
£’000
Percentage
vesting at
threshold
End of
performance
period
Rob Wood
Conditional
shares
200%
367
1,337
25%
31 Dec 2026
James Brotherton
Conditional
shares
175%
217
791
25%
31 Dec 2026
1 The number of awards was based on a share price of 364.5pp being the middle market closing price on the dealing
day prior to grant.
The vesting of the above awards is subject to the achievement of three performance
conditions, measured independently.
Performance measure, weighting and targets range
Percentage of award t
hat vests
Adjusted underlying
diluted FY26 EPS
42.5% weighting
TSR vs FTSE250
excl. IT
42.5% weighting
Core carbon
intensity reduction
15% weighting
0%
Less than 37.50p
Below Median TSR
Less than 4.95%
25%
37.50p
Median TSR
4.95%
50%
40.40p
n/a
6.60%
100%
44.44p
Upper quartile TSR
8.25%
Outstanding PSP and SAYE awards (audited)
PSP
Movements in the year
Year of
award
Awards
held as at
1 Jan 2024
‘000
Granted
‘000
Vested1
‘000
Lapsed1
‘000
Awards held
as at
31 Dec 2024
‘000
Vesting date
Rob Wood
2021
172
–
93
86
0
April 2024
2022
229
–
–
–
229
April 2025
2023
272
-
–
–
272
April 2026
2024
-
367
-
–
367
April 2027
Total
673
367
93
86
868
James
Brotherton
2021
100
–
54
50
0
April 2024
2022
155
–
–
–
155
April 2025
2023
184
-
–
–
184
April 2026
2024
-
217
–
–
217
April 2027
Total
439
217
54
50
556
1 2021 PSP – additional dividend shares of 7,477 for Rob Wood and 4,334 for James Brotherton accrued on vested
shares.
SAYE
Shares under
option
‘000
Option date
Maturity date
Option price
Term
(months)
Options matured
during the year
‘000
Rob Wood
10
1 May 2024
1 June 2029
316p
60
11
James
Brotherton
8
1 April 2021
1 May 2026
356p
60
Nil
Directors’ Remuneration report Annual report on remuneration
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142
Strategic report Governance Financial statements Additional information
4B Directors’ share ownership and share interests
Beneficial interests (audited)
The share interests of each director as at 31 December 2024 (together with interests held
by connected persons) are set out in the table below. To align executive directors with
the interests of shareholders, the Committee has implemented shareholding guidelines
for executive directors and key senior colleagues. The guidelines require that executive
directors build up and maintain an interest in the ordinary shares of the Company that is
200% of their annual base salary and retain half of any vested share awards (net of any
taxes due) until this guideline is met.
Shareholdings for directors who have held office during the year ended 31 December 2024
are set out as a percentage of salary or fees in the table below.
No. of shares
owned
outright (inc.
connected
persons)
31 Dec 2024
‘000
No. of shares
owned
outright (inc.
connected
persons)
31 Dec 2023
‘000
Vested but
unexercised
share
awards
Unvested
shares
subject to
performance
conditions
‘000
SAYE
Options
held
‘000
Shareholding
as a % of
salary as at
31 Dec 20241
Shareholding
guidelines
(200% of
salary) met?
Executive directors
Rob Wood
405
344
0
868
10
270%
Yes
James
Brotherton
44
15
0
556
8
43%
No
Non-executive directors
Amit Bhatia2
100
100
–
–
–
–
–
Carol Hui, OBE
4
4
–
–
–
–
–
Pauline Lafferty
0
0
–
–
–
–
–
Helen Miles
0
0
–
–
–
–
–
Clive Watson
40
39
–
–
–
–
–
1 Includes the value of beneficially owned shares and any vested but unexercised share awards on a net of tax basis.
2 Amit Bhatia is recognised by the Board as being a person closely associated with Abicad Holdings Limited. Abicad
Holdings Limited currently holds 65,554,894 ordinary shares in the Company.
Executive directors are expected to build and maintain a shareholding equivalent to
200% of their base salary. There was no change in the interests set out above between
31 December 2024 and 5 March 2025.
Directors’ Remuneration report Annual report on remuneration
4CRemuneration Committee membership, governance and voting
Independent advisers
The Committee takes account of information from both internal and independent
sources, including FIT Remuneration Consultants LLP (FIT) who acted as the Committee’s
independent adviser during 2024. Following a tender process, the Committee appointed
Ellason LLP (Ellason) as adviser towards the end of the year.
FIT and Ellason are members of the Remuneration Consultants’ Group and comply with
its Code of Conduct, which sets out guidelines to ensure that their advice is independent
and free of undue influence. The Committee reviews the performance and independence
of its advisers on an annual basis, and was satisfied that FIT and Ellason’s advice was
independent and objective. Breedon incurred fees of £132,531 excluding VAT during 2024
relating to Committee advice. FIT and Ellason billed on a time and materials basis and did
not provide any other services (other than share plan implementation advice in the case of
FIT) to Breedon during 2024.
Shareholder voting
Breedon submitted the Directors’ Remuneration report and Directors’ Remuneration Policy
for shareholder votes at the AGM held on 24 April 2024. The vote on the Remuneration
report was advisory while the vote on the Policy was binding, with each resolution receiving
the following support.
Directors’ Remuneration report (2024)
Directors’ Remuneration Policy (2024)
Total number of votes
% of votes cast
Total number of votes
% of votes cast
For
260,481,429
95.03
265,756,165
96.95
Against
13,626,682
4.97
8,353,190
3.05
Total votes cast
(for and against)
274,131,711
100
274,131,822
100
Votes withheld
23,711
–
22,467
–
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Strategic report Governance Financial statements Additional information
4D Pay comparison
CEO pay ratio
In line with the reporting regulations, set out below is the ratio of CEO pay compared to
the pay of UK full-time equivalent colleagues of the Group for the financial year ended
31 December 2024. This disclosure for Breedon will continue to build up to ten years’ worth
of data over time. We expect the pay ratio to vary from year to year, driven largely by
variability in incentive outcomes for the CEO, which will significantly outweigh any other
general employee pay changes at Breedon. The CEO single total figure remuneration
of £1,978,861 is used in the table below. The Committee will monitor the CEO pay ratio
over time to check that it appears reasonable and is consistent with the Company’s wider
policies on colleague pay, reward and progression. We have chosen to use Option A in
calculating the ratios, which is a calculation based on the pay of all UK employees on a full-
time equivalent basis, as this option is considered to be more statistically robust. The ratios
are based on total pay and benefits inclusive of short-term and long-term incentives
applicable for the respective financial year (1 January to 31 December). The reference
employees at the 25th, 50th and 75th percentile have been determined by reference to pay
and taxable benefits as at 31 December 2024.
Method
25th percentile
pay ratio
Median pay ratio
75th percentile
pay ratio
2024
Option A
57.3:1
47.5:1
36.9:1
2023
Option A
51.8:1
43.1:1
33.8:1
The Committee is satisfied that the resulting figures are reasonable and are appropriately
representative for the purposes of the CEO pay ratio calculations.
Set out in the table below is the base salary and total pay and benefits for each of the
percentiles.
CEO
25th percentile
Median
75th percentile
Salary
£661,995
£28,673
£33,963
£42,015
Total pay and benefits
£1,978,861
£34,550
£41,666
£53,565
Directors’ Remuneration report Annual report on remuneration
Percentage change in directors’ remuneration versus employee pay
The table below shows the percentage changes in base salary or fees, taxable benefits
and annual bonus of each director in the financial year ended 31 December 2024 together
with the approximate comparative average figures for those employees who were
employed for a full 12 months in the UK. This section of the employee population (comprising
approximately 2,900 individuals across a number of levels) is considered to be the most
appropriate group for comparison purposes, as its remuneration is controlled by the Group
and is subject to similar external market forces as those that relate to the executive directors’
remuneration. This disclosure will build up over time to show five years’ worth of data.
Salary/Fees
Benefits
Annual bonus
2024
20232
2024
20232
2024
2023
Rob Wood
4.1%
5.1%
(3.6)%
(2.5)%
(9.7)%
6.3%
James Brotherton
4.1%
4.4%
0.0%
(4.3)%
(9.7)%
6.3%
Amit Bhatia
19.5%
4.4%
–
–
–
–
Carol Hui, OBE
10.5%
4.4%
–
–
–
–
Pauline Lafferty
12.5%
3.4%
–
–
–
–
Helen Miles
9.0%
4.4%
–
–
–
–
Clive Watson
9.6%
3.2%
–
–
–
–
Workforce average 1
5.2%
6.6%
(6.2)%
1.0%
(16.5)%
9.6%
1 The salaries for part time employees have been pro-rated to full time equivalents. Weekly paid employees have
been excluded from the report as the pay conditions are different from those employees who are monthly paid
making comparison misleading.
2 2023 numbers have been restated based on actual rather than rounded values and this methodology has been
applied in 2024.
Breedon Group plc Annual Report and Accounts 2024
144
Strategic report Governance Financial statements Additional information
The total remuneration figures, including annual bonus and vested PSP awards (shown as a
percentage of the maximum that could have been achieved) for the CEO for each of the last
eight financial years are shown in the table below.
Year
CEO
CEO single figure
of total remuneration
£’000
Annual bonus payout
against maximum
opportunity %
PSP vesting rates %
2024
Rob Wood
1,979
72.0
53.5
2023
Rob Wood
1,832
99.5
50.0
2022
Rob Wood
1,868
97.8
100.0
2021
Rob Wood1
1,722
100.0
70.8
2021
Pat Ward2
1,210
100.0
70.8
2020
Pat Ward
1,444
100.0
0
2019
Pat Ward
2,076
82.6
61.9
2018
Pat Ward
1,334
60.5
83.5
2017
Pat Ward
1,056
67.1
100
1 Total remuneration for Rob Wood including the period 1 January 2021 to 31 March 2021 when he served as Group
Finance Director.
2 Pat Ward’s remuneration above is for the period ended 31 March 2021 when he retired from the Board.
Relative importance of the spend on pay
The following table shows the Company’s actual spend on pay for all Group colleagues
relative to dividends:
2024
£m
2023
£m
% change
%
Staff costs1
246.6
208.3
18
Dividends2
48.1
37.3
29
1 Note 5 of the consolidated financial statements.
2 Dividend paid to Breedon Group shareholders.
4D Pay comparison
Directors’ Remuneration report Annual report on remuneration
Total shareholder return performance graph and CEO total pay
The following graph illustrates the total return, in terms of share price growth and dividends
on a notional investment of £100 in Breedon over the last ten years relative to the FTSE 250
Index (excluding investment trusts).
This index was chosen by the Committee as Breedon is a constituent of the index and
it provides an indicator of general UK market performance for companies of a broadly
similar size.
Dec-16
0
50
100
200
150
250
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-23
Dec-22
Dec-24
Dec-14
Dec-15
TSR Chart
Breedon Group
FTSE 250 (excluding investment trusts)
Source: Bloomberg
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145
Strategic report Governance Financial statements Additional information
4E Implementation of Policy in 2025
Base salaries
As explained in the annual statement on page 132, the changes to base salary effective from
1 April 2025 will be as follows:
Chief Executive Officer: £700,000 (2024: £668,382)
Chief Financial Officer: £485,000 (2024: £452,109)
Non-executive directors’ fees
The fee for the non-executive chair for 2025 is £238,000 (2024: £230,000).
The fees payable to the non-executive directors for 2025 are:
basic fee of £62,000 (2024: £60,000);
an additional fee for holding the office of Senior Independent Director of £10,900;
an additional fee for chairing the Audit & Risk, Remuneration or Sustainability
Committees of £13,000; and
an additional fee of £7,800 to the Designated Non-executive Director for
Workforce Engagement.
Annual bonus
For 2025, the executive directors will have the opportunity to earn a bonus of up to 150% of
salary. The bonus will be subject to stretching performance conditions based on Underlying
EBITDA (75%) and corporate objectives (25%). Financial performance will continue to
incorporate a capital employed moderator designed to incentivise a strong balance
sheet and cash management and penalise poor performance in these areas. In addition,
a ‘Quality of Earnings’ assessment will apply in determining the financial bonus outcome.
This subjective assessment of earnings would consider – in the round – whether the
Underlying EBITDA outcome is reasonable taking into account other financial indicators,
and assurance from the Audit & Risk Committee.
The performance targets contain confidential information and so are not disclosed on a
prospective basis. The Committee intends to disclose the targets, and performance against
them, in the 2025 Annual Report.
PSP awards
For 2025, it is anticipated that the CEO will receive an award with a face value of 200%
of base salary and the CFO will receive an award of 175% of salary.
The awards will vest subject to the satisfaction of stretching performance conditions
assessed over the three-year period ending 31 December 2027. These measures and
weightings will be EPS 42.5%, relative TSR 42.5% and carbon reduction 15% as detailed
in the table below.
Performance measure, weighting and targets range
Percentage of award
that vests
Adjusted underlying
diluted FY27 EPS
42.5% weighting
TSR vs
FTSE250 excl. IT
42.5% weighting
Core carbon
intensity reduction
15.0% weighting
0%
Less than 38.00p
Below Median TSR
Less than 4.87%
25%
38.00p
Median TSR
4.87%
50%
41.00p
n/a
6.50%
100%
47.00p
Upper quartile TSR
8.13%
Pauline Lafferty
Chair, Remuneration Committee
5 March 2025
Directors’ Remuneration report Annual report on remuneration
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146
Strategic report Governance Financial statements Additional information
Directors’ report
The Directors’ report for the year ended
31 December 2024 is presented and
includes sections of the Annual Report
incorporated by reference. This includes
the Governance report set out on pages
101 to 150 and, accordingly, should be read
as part of this report and, as permitted
by legislation, some of the matters
required to be included in the Directors’
report have instead been included in the
Strategic report on pages 01 to 99, as the
Board considers them to be of strategic
importance. Specifically, these are:
pages 10 to 47 provide detailed
information relating to a review of
the market, our business model,
strategy, business operations, future
developments and the results and
financial position for the year ended
31 December 2024;
details of the Company’s policy on
addressing the principal risks and
uncertainties facing the Company,
which are set out in the Strategic report
on pages 48 to 66;
information as to the Group’s greenhouse
gas emissions for the year ended
31 December 2024, which can be found
on page 75;
Section 172(1) Statement, which is set out
on pages 95 to 99;
how we have engaged with our
colleagues and stakeholders on pages
106 to 111; and
business relationships on pages 01 to 39,
88 to 90, and 95 to 99.
Disclosures required under
UKLR 6.6.6R
The information required to be disclosed
in accordance with UKLR 6.6.6R of the
Financial Conduct Authority’s UK Listing
Rules can be located in the following pages
of this Annual Report:
(3) Details of long-term incentive schemes
– pages 134 and 137; and
(1) (2) (4) to (13) Not applicable.
The Strategic report and the Directors’
report together form the Management
report for the purposes of the Disclosure
Guidance and Transparency Rules
(DTR) 4.1.8R.
Principal activities
The principal activities of the Company
are the quarrying of aggregates and
manufacture and sale of construction
materials and building products in GB,
Ireland and the US, including cement,
asphalt and ready-mixed concrete,
and specialist building products together
with the delivery of surfacing solutions as a
further route to market for our construction
materials. Details of our UK subsidiaries
together with those outside of the UK can
be found on pages 207 to 209.
Dividends
The Company paid an interim dividend
on 1 November 2024 of 4.5p per share to
holders of ordinary shares of £0.01 who
were on the register as at 27 September
2024. A final dividend of 10.0p per share will
be proposed for shareholder approval at
the AGM on 29 April 2025. If approved, the
final dividend will be paid on 16 May 2025
to shareholders on the Register of Members
on 4 April 2025.
Annual General Meeting
The Annual General Meeting of the
Company will be held at Pinnacle House,
Breedon Quarry, Breedon on the Hill, DE73
8AP on 29 April 2025 at 2.00pm.
The formal notice convening the AGM,
together with explanatory notes on the
resolutions contained therein, is included
in the separate circular accompanying this
document and which is available on the
Company’s website.
Click or scan code to find out more
Directors’
report
The directors present
their report, together
with the audited financial
statements, for the year
ended 31 December 2024.
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147
Strategic report Governance Financial statements Additional information
Substantial shareholdings
The Company is aware that, as at
17 February 2025, the interests of
shareholders holding 3% or more of the
issued share capital of the Company were
as shown in the table below:
Number
%
Abicad Holding Limited
65,554,894
19.08
Blackrock
30,700,135
8.93
Columbia Threadneedle
Investments
19,296,874
5.62
Lansdowne Partners
17,590,345
5.12
Vanguard Group
14,745,980
4.29
MFS Investment
Management
12,650,669
3.68
Man GLG
10,985,349
3.20
Capital structure
Details of the Company’s issued share
capital and of the movements during the
year are shown in note 17 to the consolidated
financial statements. The Company has
one class of ordinary share which carries
no right to fixed income. Each share carries
the right to one vote at General Meetings
of the Company. There are no restrictions
on the transfer of shares, which are both
governed by the general provisions of the
Articles and prevailing legislation.
The directors are not aware of any
agreements between holders of the
Company’s shares that may result in
restrictions on the transfer of securities
or on voting rights. The Chair is recognised
by the Board as being a Person Closely
Associated with Abicad Holding Limited.
There are no persons holding shares
carrying special rights regarding control
of the Company.
Details of employee share schemes are set
out in note 18 to the consolidated financial
statements. No person has any special rights
of control over the Company’s share capital.
The Company did not purchase or acquire
any of its own shares in the financial year
to 31 December 2024.
Under the Articles, the directors have
authority to allot ordinary shares, subject
to the aggregate nominal amount limit
set at the General Meeting held on 24
April 2024 of £1,132,685.69. Shareholders
granted the Company authority to purchase
up to an aggregate of 33,980,570 of its own
shares. No shares have been purchased to
date under this authority and therefore at
31 December 2024 the authority remained
outstanding. Both authorities expire at the
conclusion of the AGM to be held in 2025
or on 23 July 2025 (whichever is sooner)
and a resolution to renew the authorities will
be put to shareholders at the forthcoming
AGM. At 31 December 2024 the Company
held no shares in treasury.
Directors’ report
With regard to the appointment and
replacement of directors, the Company
is governed by its Articles, the UK Corporate
Governance Code, the Companies Act
2006 and related legislation. Each director
stands for election or re-election annually
by shareholders at each AGM.
The Articles may be amended by Special
Resolution of the shareholders.
Change of control
There are no significant agreements that
take effect, alter or terminate on change
of control of the Company following
a takeover. However, there are a number
of agreements that take effect after, or
terminate upon, a change of control of the
Company, such as commercial contracts,
bank loan agreements, property lease
arrangements and employee share
plans. None of these are considered to be
significant in terms of their likely impact
on the business of the Group as a whole.
No agreements exist with the Company and
its directors or employees for compensation
for loss of office or employment that occurs
because of a takeover bid.
Directors
Biographical details of the directors serving
during the year and as at 31 December
2024 can be found on pages 102 to 103
and details of their service contracts are
given in the Directors’ Remuneration
report on page 138. The beneficial and
non-beneficial interests of the directors
and their connected persons in the shares
of the Company at 31 December 2024 and
as at the date of this report are disclosed
in the Directors’ Remuneration report
on page 143.
As set out in the Notice of Meeting, all
the directors will retire at this year’s AGM
and submit themselves for re-election by
shareholders. All directors took part in the
internal Board performance review in 2024.
Indemnity provisions
The Company maintains Directors’ and
Officers’ liability insurance in respect of
legal action that might be brought against
its Directors and Officers. The Company
has granted an indemnity in favour of its
directors against certain liabilities that may
be incurred as a result of their being in office
to the extent permitted by Section 234
of the Companies Act 2006. The Company
has not issued any qualifying pension
scheme indemnity provisions.
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148
Strategic report Governance Financial statements Additional information
Colleagues
The Group recognises the importance of
colleague involvement in the operation and
development of its business units, which
are given autonomy, within a Group policy
and structure, to enable management to
be fully accountable for their own actions
and gain maximum benefit from local
knowledge. Colleagues are informed by
regular consultation, intranet, and internal
newsletters of the progress of both their own
business units and the Group as a whole.
The Group is committed to providing
equal opportunities for individuals in all
aspects of employment. It considers the
skills and aptitudes of disabled persons in
recruitment, career development, training
and promotion. If existing colleagues
become disabled, every effort is made
to retain them, and retraining is arranged
wherever possible.
How the Board has engaged with
employees can be found on pages 107 and
108 and provides details of how information
has been provided to them and how
their involvement has been encouraged.
The Section 172(1) Statement sets out how
the Board has had regard to employees
interests and is set out on pages 95 to 99.
Research & Development
Innovation is a key part of the Breedon
culture and its future, from the development
of lower carbon cements, to utilising
recycled materials in products and from
adopting new production methods to
utilising additives that enhance the product
lifecycle. Activities of the Group with
regards to research and development
can be found on pages 72 to 80.
Political contributions
The Group did not make any contributions
to political parties during the current or the
previous year.
Financial instruments
Details of the Group’s financial instruments
are set out in note 19 of the consolidated
financial statements.
Sustainability
The Board considers sustainability to be of
strategic importance and as such relevant
information is contained in the Strategic
report on pages 69 to 94 together with
our TCFD disclosures on pages 59 to 66.
Going Concern
The directors have continued to adopt
the Going Concern basis in preparing
the financial statements (see note 1 to the
consolidated financial statements.
Business relationships
The directors have regard to foster business
relationships with key stakeholders
including suppliers and customers. How
engagement has taken place and how the
effect of that regard influenced decisions
taken by the directors during the financial
year can be found in the Board’s Section
172(1) Statement on pages 95 to 99 of the
Strategic report.
Risk management and
internal control
The Board is responsible for the Group’s
system of risk management and continues
to develop policies and procedures that
reflect the nature and scale of the Group’s
business. Further details of the key areas
of risk to the business identified by the
Board are included on pages 48 to 58
and the report of the Board’s Audit & Risk
Committee, which details the internal
control framework can be found on pages
116 and 117. The Group’s operational key
performance indicators are shown on
pages 40 and 41.
Disclosure of information
to auditor
The directors who hold office at the date
of this report confirm that, so far as they
are each aware, there is no relevant audit
information of which the Company’s auditor
is unaware, and each director has taken all
steps that he or she ought to have taken
to make himself or herself aware of any
relevant audit information and to establish
that the Company’s auditor is aware of
that information. This confirmation is given
and should be interpreted in accordance
with the provisions of Section 418 of the
Companies Act 2006.
Auditor
KPMG LLP has expressed willingness to
continue in office and a resolution to re-
appoint KPMG LLP will be proposed at the
forthcoming AGM.
Events after the reporting
period
These have been disclosed within note 28
of the consolidated financial statements.
By order of the Board
Amit Bhatia
Non-executive
Chair
5 March 2025
Rob Wood
Chief Executive
Officer
Directors’ report
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Statement of directors’ responsibilities
Responsibility statement of
the directors in respect of the
annual report and financial
statements
The directors are responsible for preparing
the Annual Report and the Group and
parent Company financial statements
in accordance with applicable law
and regulations.
Company law requires the directors to
prepare Group and parent Company
financial statements for each financial
year. Under that law they are required to
prepare the Group financial statements in
accordance with UK-adopted international
accounting standards and applicable
law and have elected to prepare the
parent Company financial statements in
accordance with UK accounting standards
and applicable law, including FRS 101
Reduced Disclosure Framework.
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 parent Company and of the Group’s
profit or loss for that period. In preparing
each of the Group and parent Company
financial statements, the directors are
required to:
select suitable accounting policies and
then apply them consistently;
make judgements and estimates that
are reasonable, relevant, and reliable
and, in respect of the parent Company
financial statements only, prudent;
for the Group financial statements,
state whether they have been prepared
in accordance with UK-adopted
international accounting standards;
for the parent Company financial
statements, state whether applicable
UK accounting standards have been
followed, subject to any material
departures disclosed and explained in the
parent Company financial statements;
assess the Group and parent Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern; and
use the going concern basis of
accounting unless they either intend
to liquidate the Group or the parent
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 parent
Company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the parent 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 responsible for preparing a
Strategic report, Directors’ report, Directors’
Remuneration report and Corporate
Governance statement that complies
with that law and those regulations.
In accordance with Disclosure Guidance
and Transparency Rule (DTR) 4.1.16R, the
financial statements will form part of the
annual financial report prepared under
DTR 4.1.17R and 4.1.18R. The auditor’s report
on these financial statements provides no
assurance over whether the annual financial
report has been prepared in accordance
with those requirements.
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 financial report
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 taken as a whole; and
the strategic report includes a fair review
of the development and performance of
the business and the position of the issuer
and the undertakings included in the
consolidation taken as a whole, together
with a description of the principal risks
and uncertainties that they face.
We consider the Annual Report and
Accounts, taken as a whole, is fair, balanced
and understandable and provides the
information necessary for shareholders
to assess the Group’s position and
performance, business model and strategy.
Rob Wood
James Brotherton
Chief Executive
Chief Financial
Officer
Officer
5 March 2025
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Independent Auditor’s report
»152
Consolidated income statement
»162
Consolidated statement of comprehensive income
»163
Consolidated statement of financial position
»164
Consolidated statement of changes in equity
»165
Consolidated statement of cash flows
»166
Notes to the consolidated financial statements
»167
»
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Independent Auditor’s report
Independent auditor’s report to the members
of Breedon Group plc
Our opinion is unmodified
1
We have audited the financial statements of Breedon Group plc (“the Company”) for the year
ended 31 December 2024 which comprise the consolidated income statement, the consolidated
statement of comprehensive income, the consolidated statement of financial position, the
consolidated statement of changes in equity, the consolidated statement of cash flows, the
company balance sheet, the company statement of changes in equity, and the related notes,
including the accounting policies in note 1.
In our opinion:
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 2024 and of the Group’s profit for the year then ended;
the Group 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
UK accounting standards, including FRS 101 Reduced Disclosures Framework ; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities are described below. We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion
is consistent with our report to the Audit & Risk Committee.
We were first appointed as auditor by the directors on 21 July 2023. The period of total
uninterrupted engagement is for the two financial years ended 31 December 2024. Prior to that
we were also auditor to the Group’s previous parent company, but which, as it was listed on AIM,
was not a public-interest entity. We have fulfilled our ethical responsibilities under, and we remain
independent of the Group in accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed public interest entities. No non-audit services prohibited by that
standard were provided.
Overview
Materiality:
Group financial statements as a whole
£6.25m (2023:£6.25m)
5.0% (2023: 4.7%) of Group profit before tax
Coverage
86% of Group revenue
Key audit matters
vs 2023
Recurring risks
Recoverability of goodwill allocated to Cement
Restoration and decommissioning provision
within the GB segment
Recoverability of parent company receivable
New
Valuation of intangibles within acquisitions
Key audit matters: our assessment of risks
of material misstatement
2
Key audit matters are those matters that, in our professional judgement, were of most
significance in the audit of the financial statements and include the most significant assessed
risks of material misstatement (whether or not due to fraud) identified by us, including 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. We summarise below the key audit
matters, in decreasing order of audit significance, in arriving at our audit opinion above, together
with our key audit procedures to address those matters and, as required for public interest
entities, our results from those procedures. These matters were addressed, and our results are
based on procedures undertaken, in the context of, and solely for the purpose of, our audit of
the financial statements as a whole, and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate opinion on these matters.
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Independent Auditor’s report
The risk
Our response
Recoverability of
goodwill allocated to
Cement
(£159.5 million;
2023: £162.1 million)
Refer to page 113 (Audit
& Risk Committee
report), page 169
(accounting policy)
and page 179 (financial
disclosures).
Forecast-based assessment
Goodwill related to the Cement group of CGUs and the estimated
recoverable amount is subjective due to the inherent uncertainty
involved in forecasting and discounting future cashflows.
In addition, the Group has set medium and long term targets
to reduce carbon emissions. Demand for cement could be
impacted by the price increases needed to recover these costs,
substitute products becoming available or longer-term changes in
consumer behaviour.
The future cashflows are also dependent on the continued
availability of limestone resources over the remaining life of the asset
base and are subject to obtaining incremental planning permissions
for quarries and plants.
The effect of these matters is that, as part of our risk assessment,
we determined that the value in use of the Cement group of CGUs
had a high degree of estimation uncertainty, with a potential
range of reasonable outcomes greater than our materiality for the
consolidated financial statements as a whole, and possibly many
times that amount.
In conducting our final audit work we concluded that reasonably
possible changes in the assumptions would not be expected to result
in a material change to the carrying value of goodwill in the next
financial year.
We performed the tests below rather than seeking to rely on any of the Group’s controls
because the nature of the balance is such that we would expect to obtain audit evidence
primarily through the detailed procedures described.
Our procedures included:
Our sector experience: Assess whether the assumptions used, including those relating
to the levels of capital expenditure required to meet the Group’s climate change
commitments, reflect our knowledge of the business and industry, including known or
probable changes in the business environment and the impact of climate change. We used
our climate change professionals to assist us in challenging management’s assumptions
around transition costs;
Historical comparisons: Consider the historical forecasting accuracy, by comparing
previously forecast cash flows to actual results achieved;
Benchmarking assumptions: Challenge, using observable market data including available
sources for comparable companies, the key inputs used in the group’s calculation of the
discount rate and growth rate;
Sensitivity analysis: Perform our own sensitivity analysis over the reasonably possible
combination of changes in the forecasts on the assumptions noted above;
Comparing valuations: Comparing the sum of the discounted cash flows to the Group’s
market capitalisation to assess the reasonableness of those cashflows; and
Assessing disclosures: Assess whether the Group’s disclosures regarding the sensitivity
of the outcome of the impairment assessment to changes in key assumptions, specifically
those relating to climate change, reflected the risks inherent in the recoverable amount
of goodwill.
Our results
We found the Group’s conclusion that there is no impairment of goodwill allocated to Cement
to be acceptable (2023 result: acceptable).
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The risk
Our response
Restoration and
decommissioning
provision within
the GB segment
(Total restoration provision
£99.1 million, of which a
substantial proportion
relates to the GB segment;
2023: £91.3 million)
Refer to page 114 (Audit
& Risk Committee report),
page 170 (accounting
policy) and page 183
(financial disclosures).
Subjective estimate:
The calculation of restoration and decommissioning provisions
requires the Group to estimate the quantum and timing of future
costs to restore and decommission sites.
These assumptions are inherently difficult to forecast and small
changes in assumption of certain costs could have a significant
effect of the estimation of the provision.
These calculations also require the Group to determine an
appropriate rate to discount future costs to their net present value.
Inflation and discount rates are subject to change and could impact
significantly on the calculation.
There is limited restoration and decommissioning activity and
historical precedent against which to benchmark estimates of
future costs.
The effect of these matters is that, as part of our risk assessment, we
determined that restoration and decommissioning provisions have
a high degree of estimation uncertainty, with a potential range of
outcomes greater than our materiality for the financial statements
as a whole.
The financial statements (note 26) disclose the sensitivity estimated
by the Group.
We performed the tests below rather than seeking to rely on any of the Group’s controls
because the nature of the balance is such that we would expect to obtain audit evidence
primarily through the detailed procedures described.
Our procedures included:
Assessing experience of external experts: Evaluate the competence and independence
of external experts appointed by the Group to determine an estimate of restoration and
decommissioning costs;
Challenging assumptions and inputs: Challenge the consistency of the assumptions used by
the Group in generating the estimated costs of restoration and decommissioning and agree
a sample of costs to external sources;
Benchmarking assumptions: Challenge the inflation and discount rates by comparing them
to externally observable data, including available sources for comparable companies;
Test of details: Evaluate a sample of underlying planning consents to assess the possible
timing of the obligations with respect to restoration and decommissioning costs; and
Assessing disclosures: Assess the adequacy of the Group’s disclosures about the sensitivity
of changes in key assumptions reflected in the risk inherent in the estimation of the liability.
Our results
We found the level of restoration and decommissioning provision recognised for the GB
segment to be acceptable (2023 result: acceptable).
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The risk
Our response
Valuation of intangibles
within the BMC
acquisition
(£109.9 million;
2023: not applicable)
Refer to page 114 (Audit
& Risk Committee
report), page 169
(accounting policy)
and page 193 (financial
disclosures).
Forecast based valuation:
The Group has acquired the BMC business during the year which
has led to the recognition of £109.9m of acquired intangible assets.
These intangible assets are initially measured at fair value as part of
the purchase price allocation.
In determining the fair value of acquired intangible assets,
management is required to adopt an appropriate valuation
methodology and make significant judgements and estimates
including those relating to the forecast cash flows and the discount
rate. Performing audit procedures to evaluate the appropriateness
and the reasonableness of these judgements and estimates required
a high degree of auditor judgement and an increased extent of
effort, including the need to involve our valuation specialists.
We therefore determined that valuation of intangibles within the
BMC acquisition to be a key audit matter.
We performed the tests below rather than seeking to rely on any of the Group’s controls
because the nature of the balance is such that we would expect to obtain audit evidence
primarily through the detailed procedures described.
Our procedures included:
Methodology choice: With the assistance of our own valuation specialists, assess the
appropriateness of the methodology used in the valuation models by considering if it was in
accordance with relevant accounting standards.
Our valuation expertise: With the assistance of our own valuation specialists, challenge the
appropriateness of the key assumptions underlying the intangible valuation, including the
forecast cash flows and the discount rate;
Benchmarking assumptions: Compare the Group’s assumptions for key inputs, such as
revenue growth rates and customer attrition rates, to externally derived data and to other
similar acquisitions; and
Forecasting accuracy: Challenge management on the reasonableness of assumptions
for revenue growth rates and customer attrition rates by comparing to post acquisition
performance.
Our results
We found the balance of intangible assets recognised for the BMC acquisition to be acceptable
(2023: not applicable).
Recoverability of parent
Company receivable
(£554.9 million;
2023: £507.5 million)
Refer to page 112 (Audit &
Risk Committee report),
page 201 (accounting
policy) and page 203
(financial disclosures).
Low risk, high value:
The amount of the parent Company’s intragroup receivable with
the intermediate holding company for the rest of the Group’s
subsidiaries represents over 99% of the parent Company’s assets.
Its recoverability is not at a high risk of significant misstatement or
subject to significant judgement.
However, due to its materiality in the context of the parent Company
financial statements this is considered to be the area that had the
greatest effect on our overall parent Company audit.
We performed the tests below rather than seeking to rely on any of the parent Company’s
controls because the nature of the balance is such that we would expect to obtain audit
evidence primarily through the detailed procedures described.
Our procedures included:
Tests of detail: For the intermediate holding company the intragroup receivable is with,
evaluate the likely risk of default with reference to the parent Company’s definition of default
and forecasts of future profitability.
Assessing subsidiary audits : Assess the work performed by us and component auditors
on that sample of subsidiaries, and consider the results of that work, on those subsidiaries’
profits, net assets and the likely risk of default on the intragroup balance.
Our results
We found the intragroup receivable balance to be acceptable (2023: acceptable).
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Independent Auditor’s report
Our application of materiality and an overview
of the scope of our audit
3
Our application of materiality
Materiality for the Group financial statements as a whole was set at £6.25m (2023: £6.25m)
determined with reference to a benchmark of Group profit before tax of £125.4m
(2023: £134.4m), of which it represents 5.0% (2023: 4.7%).
Materiality for the parent Company financial statements as a whole was set at £5.5m
(2023: £6.0m), determined with reference to a benchmark of Company total assets,
of which it represents 1.0% (2023: 1.2%).
In line with our audit methodology, our procedures on individual account balances and
disclosures were performed to a lower threshold, performance materiality, so as to reduce to
an acceptable level the risk that individually immaterial misstatements in individual account
balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 75% (2023: 75%) of materiality for the financial statements
as a whole, which equates to £4.7m (2023: £4.7m) for the Group and £4.1m (2023: £4.5m) for the
parent Company. We applied this percentage in our determination of performance materiality
because we did not identify any factors indicating an elevated level of risk.
We agreed to report to the Audit & Risk Committee any corrected or uncorrected identified
misstatements exceeding £0.3m (2023: £0.3m), in addition to other identified misstatements
that warranted reporting on qualitative grounds.
Overview of the scope of our audit
This year, we applied the revised group auditing standard in our audit of the consolidated
financial statements. The revised standard changes how an auditor approaches the identification
of components, and how the audit procedures are planned and executed across components.
In particular, the definition of a component has changed, shifting the focus from how the entity
prepares financial information to how we, as the group auditor, plan to perform audit procedures
to address group risks of material misstatement (“RMMs”). Similarly, the group auditor has an
increased role in designing the audit procedures as well as making decisions on where these
procedures are performed (centrally and/or at component level) and how these procedures are
executed and supervised. As a result, we assess scoping and coverage in a different way and
comparisons to prior period coverage figures are not meaningful. In this report we provide an
indication of scope coverage on the new basis.
Group profit before tax
£125.4m (2023: £134.4m)
Group materiality
£6.25m (2023: £6.25m)
PBT
Group materiality
£6.25m
Whole financial statements
materiality (2023: £6.25m)
£4.7m
Whole financial statements
performance materiality
(2023: £4.7m)
£5.5m
Range of materiality at
7 components (£2.7m to £5.5m)
(2023: £2.0m to £5.6m)
£0.3m
Misstatements reported
to the Audit & Risk Committee
(2023: £0.3m)
We performed risk assessment procedures to determine which of the Group’s components are
likely to include RMMs to the Group financial statements and which procedures to perform at
these components to address those risks.
In total, we identified 33 components, having considered our evaluation of the Group’s
operational structure, the existence of common information systems, the existence of common
risk profile across entities, and our ability to perform audit procedures centrally.
Of those, we identified two quantitatively significant components which contained the largest
percentages of either total revenue or total assets of the Group, for which we performed
audit procedures.
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Our application of materiality and an overview
of the scope of our audit continued
3
Additionally, having considered qualitative and quantitative factors, we selected
four components with accounts contributing to the specific RMMs of the Group
financial statements.
Accordingly, we performed audit procedures on six components, of which we involved
component auditors in performing the audit work on two components. We also performed the
audit of the parent Company.
We set the component materialities, ranging from £2.7m to £5.5m having regard to the mix
of size and risk profile of the Group across the components.
Our audit procedures covered 85% of Group revenue. We performed audit procedures in relation
to components that accounted for 85% of Group profit before tax and 88% of Group total assets.
For the remaining components for which we performed no audit procedures, no component
represented more than 6% of Group total revenue or Group total assets, or more than 9% of
Group profit before tax. We performed analysis at an aggregated Group level to re-examine
our assessment that there is not a reasonable possibility of a material misstatement in
these components.
Impact of controls on our group audit
We identified the main centralised financial reporting, sales, and purchases IT systems and the
separate financial reporting system used by one in-scope component as being relevant to the
audit of the Group.
On this audit we take a predominantly substantive approach due to control findings identified in
previous years and the current year in relation to the IT environment and manual journal entries,
as well as our belief that for this audit a substantive audit approach is the most efficient and
effective approach for gaining the appropriate audit evidence.
We adopted a data-oriented approach to auditing revenue and journals for two in-scope
components by performing data and analytics routines. Given that we did not plan to rely on IT
controls in our audit, a direct testing approach was used over the completeness and reliability
of data used in these routines. In other areas of the audit, and in our audit of revenue for the other
in-scope components, we planned and performed additional substantive testing rather than
relying on controls.
Group auditor oversight
As part of establishing the overall Group audit strategy and plan, we conducted the risk
assessment and planning discussion meetings with component auditors to discuss Group audit
risks relevant to the components.
We visited one component auditor in the US to assess the audit risks and strategy. Video and
telephone conference meetings were also held with this component auditor and others that
were not physically visited. At these visits and meetings, the results of the planning procedures
and further audit procedures communicated to us were discussed in more detail, and any further
work required by us was then performed by the component auditors.
We inspected the work performed by the component auditors for the purpose of the Group
audit and evaluated the appropriateness of conclusions drawn from the audit evidence obtained
and consistencies between communicated findings and work performed, with a particular focus
on significant risks and other areas of focus, including revenue and receivables, cost of sales and
creditors, and inventory.
Independent Auditor’s report
Group profit
before tax
(2023: 88%)
85%
Group revenue
(2023: 91%)
85%
Group total
assets
(2023: 91%)
88%
Our audit procedures covered
the following percentage of
Group revenue:
We performed audit procedures in relation to
components that accounted for the following
percentages of Group profit before tax and
Group total assets:
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The impact of climate change in our audit
4
In planning our audit, we considered the potential impacts of climate change on the Group’s
business and its financial statements.
The Group has set out its targets to achieve a 23.3% reduction in absolute gross scope 1
and 2 emissions, and scope 3 emissions from purchased clinker and cement compared to a
2022 baseline.
However, whilst the Group has set targets to be carbon neutral by 2050, the gross cost of this
transition, how the demand for cement might be impacted by the price increases needed
to recover these costs, the possibility of substitute products becoming available and the
longer term changes in customer behaviour are not yet known. To the extent there are known
implications, these have been reflected in the financial statements in accordance with IFRS
requirements and have been considered in our audit as set out in our key audit matter on the
recoverability of goodwill allocated to the Cement cash generating unit. It is therefore possible
that the future carrying amounts of assets will be impacted due to the outcome of these
judgements and estimates as the Group responds to its climate change targets.
Our key audit matter on the recoverability of goodwill allocated to the Cement cash generating
unit explains how we have assessed the Group’s climate related assumptions and relevant
disclosures in arriving at our audit conclusions. This included holding discussions with our own
climate change professionals to challenge our risk assessment.
We have also read the Group’s disclosure of climate related information in the Strategic report
of the Annual Report and compared this to our knowledge gained from our financial statement
audit work which includes the disclosures as recommended by the TCFD on page 59 to 66 of the
Annual Report.
Going concern
5
The directors have prepared the financial statements on the going concern basis as they do
not intend to liquidate the Group or the Company or to cease their operations, and as they have
concluded that the Group’s and the Company’s financial position means that this is realistic.
They have also concluded that there are no material uncertainties that could have cast significant
doubt over their ability to continue as a going concern for at least a year from the date of
approval of the financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general economic environment to
identify the inherent risks to its business model and analysed how those risks might affect the
Group’s and parent Company’s financial resources or ability to continue operations over the
going concern period. The risk that we considered most likely to adversely affect the Group’s and
parent Company’s available financial resources over this period was the ability of the Group to
comply with debt covenants.
We considered whether these risks could plausibly affect the liquidity or covenant compliance
in the going concern period by comparing severe, but plausible downside scenarios that could
arise from these risks individually and collectively against the level of available financial resources
and covenants indicated by the Group’s financial forecasts.
We considered whether the going concern disclosure in note 1 to the consolidated financial
statements and note 1 to the parent Company financial statements gives a full and accurate
description of the assessment of going concern.
Our conclusions based on this work:
we consider that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material
uncertainty related to events or conditions that, individually or collectively, may cast
significant doubt on the Group’s or Company’s ability to continue as a going concern for the
going concern period;
we have nothing material to add or draw attention to in relation to the directors’ statement in
note 1 to the financial statements on the use of the going concern basis of accounting with no
material uncertainties that may cast significant doubt over the Group and Company’s use of
that basis for the going concern period, and we found the going concern disclosure in note 1 to
be acceptable; and
the related statement under the Listing Rules set out on page 67 is materially consistent with
the financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may
result in outcomes that are inconsistent with judgements that were reasonable at the time they
were made, the above conclusions are not a guarantee that the Group or the Company will
continue in operation.
Independent Auditor’s report
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Fraud and breaches of laws and regulations –
ability to detect
6
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events
or conditions that could indicate an incentive or pressure to commit fraud or provide an
opportunity to commit fraud. Our risk assessment procedures included:
enquiring of directors and other management as to the Group’s high-level policies and
procedures to prevent and detect fraud, including the internal audit function, and the Group’s
channel for ‘whistleblowing’, as well as whether they have knowledge of any actual, suspected
or alleged fraud;
reading Board, Audit & Risk Committee and Remuneration Committee minutes;
considering remuneration incentive schemes and performance targets for management and
the directors;
using analytical procedures to identify any unusual or unexpected relationships; and
considering the existence of significant unusual transactions.
We communicated identified fraud risks throughout the audit team and remained alert to any
indications of fraud throughout the audit. This included communication from the Group auditor
to component auditors of relevant fraud risks identified at the Group level and requesting
component auditors performing procedures at the component level to report to the Group
auditor any identified fraud risk factors or identified or suspected instances of fraud.
As required by auditing standards, and taking into account possible pressures to meet profit
targets and our overall knowledge of the control environment, we perform procedures to
address the risk of management override of controls, in particular the risk that Group and
component management may be in a position to make inappropriate accounting entries and the
risk of bias in accounting estimates and judgements, such as the valuation of goodwill.
On this audit we do not believe there is a fraud risk related to revenue recognition because
product revenue recognition is straightforward and contract revenue contains limited
management judgement, therefore limiting the opportunity to commit a material fraud. We did
not identify any additional fraud risks.
We performed procedures including:
identifying journal entries and other adjustments to test based on risk criteria and comparing
the identified entries to supporting documentation. These include journal entries to external
revenue with a corresponding entry to an unrelated account;
incorporating an element of unpredictability in our audit procedures; and
assessing whether the judgements made in making accounting estimates are indicative of a
potential bias.
Identifying and responding to risks of material misstatement due to non-
compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a
material effect on the financial statements from our general commercial and sector experience,
and through discussion with the directors and other management (as required by auditing
standards) and discussed with the directors and other management the policies and procedures
regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control
environment including the entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to
any indications of non-compliance throughout the audit. This included communication from
the Group audit team to component auditors of relevant laws and regulations identified at the
Group level, and a request for component auditors to report to the Group team any instances of
non-compliance with laws and regulations that could give rise to a material misstatement at the
Group level.
The potential effect of these laws and regulations on the financial statements
varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements
including financial reporting legislation (including related companies legislation), distributable
profits legislation and taxation legislation. We assessed the extent of compliance with these laws
and regulations as part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences
of non-compliance could have a material effect on amounts or disclosures in the financial
statements, for instance through the imposition of fines or litigation.
We identified the following areas as those most likely to have such an effect: health and safety,
anti-bribery, employment law and certain aspects of company legislation recognising the nature
of the Group’s activities and its legal form. Auditing standards limit the required audit procedures
to identify non-compliance with these laws and regulations to enquiry of the directors and
other management and inspection of regulatory and legal correspondence, if any. Therefore if a
breach of operational regulations is not disclosed to us or evident from relevant correspondence,
an audit will not detect that breach.
Independent Auditor’s report
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159
Strategic report Governance Financial statements Additional information
Independent Auditor’s report
Fraud and breaches of laws and regulations –
ability to detect continued
6
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not
have detected some material misstatements in the financial statements, even though we
have properly planned and performed our audit in accordance with auditing standards. For
example, the further removed non-compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect material misstatement. We are
not responsible for preventing non-compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
We have nothing to report on the other information
in the Annual Report
7
The directors are responsible for the other information presented in the Annual Report together
with the financial statements. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based
on our financial statements audit work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge. Based solely on that work we
have not identified material misstatements in the other information.
Strategic report and Directors’ report
Based solely on our work on the other information:
we have not identified material misstatements in the Strategic report and the Directors’ report;
in our opinion the information given in those reports for the financial year is consistent with the
financial statements; and
in our opinion those reports have been prepared in accordance with the Companies
Act 2006.
Directors’ Remuneration report
In our opinion the part of the Directors’ Remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency
between the directors’ disclosures in respect of emerging and principal risks and the Viability
Statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
the directors’ confirmation within the compliance against the Code section on page 123 that
they have carried out a robust assessment of the emerging and principal risks facing the
Group, including those that would threaten its business model, future performance, solvency
and liquidity;
the managing of risk disclosures describing these risks and how emerging risks are identified,
and explaining how they are being managed and mitigated; and
the directors’ explanation in the Viability Statement of how they have assessed the prospects
of the Group, over what period they have done so and why they considered that period to
be appropriate, and their statement as to whether they have a reasonable expectation that
the Group will be able to continue in operation and meet its liabilities as they fall due over
the period of their assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
We are also required to review the Viability Statement, set out on page 67 under the
UK Listing Rules. Based on the above procedures, we have concluded that the above
disclosures are materially consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge
acquired during our financial statements audit. As we cannot predict all future events or
conditions and as subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the absence of anything to report
on these statements is not a guarantee as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency
between the directors’ corporate governance disclosures and the financial statements and our
audit knowledge.
Based on those procedures, we have concluded that each of the following is materially
consistent with the financial statements and our audit knowledge:
Breedon Group plc Annual Report and Accounts 2024
160
Strategic report Governance Financial statements Additional information
We have nothing to report on the other information
in the Annual Report continued
7
the directors’ statement that they consider that the annual report and financial statements
taken as a whole is fair, balanced and understandable, and provides the information necessary
for shareholders to assess the Group’s position and performance, business model and
strategy;
the section of the annual report describing the work of the Audit & Risk Committee, including
the significant issues that the Audit & Risk Committee considered in relation to the financial
statements, and how these issues were addressed; and
the section of the annual report that describes the review of the effectiveness of the Group’s
risk management and internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the
Group’s compliance with the provisions of the UK Corporate Governance Code specified by the
UK Listing Rules for our review. We have nothing to report in this respect.
We have nothing to report on the other matters on which
we are required to report by exception
8
Under the Companies Act 2006, we are required 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.
We have nothing to report in these respects.
Respective responsibilities
9
Directors’ responsibilities
As explained more fully in their statement set out on page 150, the directors are responsible for:
the preparation of the financial statements including being satisfied that they give a true and fair
view; 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; 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 they
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
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 our
opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
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 aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/
auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report
prepared under Disclosure Guidance and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s
report provides no assurance over whether the annual financial report has been prepared in
accordance with those requirements
The purpose of our audit work and to whom we owe
our responsibilities
10
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.
Anna Barrell (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
One Snowhill
Snowhill Queensway
Birmingham
B4 6GH
5 March 2025
Independent Auditor’s report
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161
Strategic report Governance Financial statements Additional information
Consolidated income statement
For the year ended 31 December 2024
Note
2024
2023
Underlying
£m
Non-
underlying1
£m
Total
£m
Underlying
£m
Non-
underlying1
£m
Total
£m
Revenue
2
1,576.3
–
1,576.3
1,487.5
–
1,487.5
Operating expenses
3, 4
(1,406.1)
(24.1)
(1,430.2)
(1,333.9)
(10.5)
(1,344.4)
Group operating profit
170.2
(24.1)
146.1
153.6
(10.5)
143.1
Share of profit of associate and joint ventures
10
3.5
–
3.5
2.6
–
2.6
Profit from operations
2
173.7
(24.1)
149.6
156.2
(10.5)
145.7
Financial income
6
1.2
–
1.2
2.6
–
2.6
Financial expense
3, 6
(24.1)
(1.3)
(25.4)
(13.9)
–
(13.9)
Profit before taxation
150.8
(25.4)
125.4
144.9
(10.5)
134.4
Tax at effective rate
3, 7
(32.7)
3.6
(29.1)
(30.2)
1.4
(28.8)
Taxation
(32.7)
3.6
(29.1)
(30.2)
1.4
(28.8)
Profit for the year
118.1
(21.8)
96.3
114.7
(9.1)
105.6
Attributable to:
Breedon Group shareholders
118.0
(21.8)
96.2
114.6
(9.1)
105.5
Non-controlling interests
0.1
–
0.1
0.1
–
0.1
Profit for the year
118.1
(21.8)
96.3
114.7
(9.1)
105.6
1 Non–underlying items represent acquisition–related expenses, property gains or losses, redundancy and reorganisation costs, amortisation of acquired intangibles, unamortised banking arrangement fee and related tax items. The prior
year also included the costs associated with the Group’s move from the AIM to Main Market.
Earnings per share
Basic
23
28.1p
31.1p
Diluted
23
28.0p
31.0p
Underlying earnings per share are shown in note 23.
Dividends in respect of the year
Dividend per share
17
14.5p
13.5p
Breedon Group plc Annual Report and Accounts 2024
162
Strategic report Governance Financial statements Additional information
Consolidated statement of comprehensive income
For the year ended 31 December 2024
Note
2024
£m
2023
£m
Profit for the year
96.3
105.6
Other comprehensive (expense)/income
Items which may be reclassified subsequently to profit and loss:
Foreign exchange differences on translation of foreign operations, net of hedging
(6.0)
(4.1)
Effective portion of changes in fair value of cash flow hedges
0.8
(0.7)
Taxation on items taken directly to other comprehensive income
7
–
0.1
Other comprehensive expense for the year
(5.2)
(4.7)
Total comprehensive income for the year
91.1
100.9
Total comprehensive income for the year is attributable to:
Breedon Group shareholders
91.0
100.8
Non-controlling interests
0.1
0.1
91.1
100.9
Breedon Group plc Annual Report and Accounts 2024
163
Strategic report Governance Financial statements Additional information
Consolidated statement of financial position
Note
2024
£m
2023
£m
Non-current assets
Property, plant and equipment
8
939.1
817.2
Right-of-use assets
20
46.5
45.1
Intangible assets
9
686.3
520.2
Investment in associate and joint ventures
10
15.0
14.5
Trade and other receivables
13
–
0.9
Total non-current assets
1,686.9
1,397.9
Current assets
Inventories
12
135.7
120.1
Trade and other receivables
13
261.0
227.9
Current tax receivable
1.5
–
Cash and cash equivalents
14
28.9
126.9
Total current assets
427.1
474.9
Total assets
2,114.0
1,872.8
Current liabilities
Interest-bearing loans and borrowings
14
(8.7)
(8.1)
Trade and other payables
15
(283.6)
(278.6)
Current tax payable
–
(0.1)
Provisions
16
(30.0)
(8.8)
Total current liabilities
(322.3)
(295.6)
Non-current liabilities
Interest-bearing loans and borrowings
14
(425.5)
(288.7)
Provisions
16
(91.4)
(85.8)
Deferred tax liabilities
11
(104.2)
(92.0)
Total non-current liabilities
(621.1)
(466.5)
Total liabilities
(943.4)
(762.1)
Net assets
1,170.6
1,110.7
Note
2024
£m
2023
£m
Equity attributable to Breedon Group shareholders
Share capital
17
3.4
3.4
Share premium
17
2.0
0.7
Hedging reserve
17
0.3
(0.5)
Translation reserve
17
(9.7)
(3.7)
Merger reserve
17
92.7
80.5
Retained earnings
1,081.5
1,030.0
Total equity attributable to Breedon Group shareholders
1,170.2
1,110.4
Non-controlling interests
0.4
0.3
Total equity
1,170.6
1,110.7
These financial statements were approved by the Board of Directors on 5 March 2025
and were signed on its behalf by:
Rob Wood
James Brotherton
Chief Executive Officer
Chief Financial Officer
At 31 December 2024
Breedon Group plc Annual Report and Accounts 2024
164
Strategic report Governance Financial statements Additional information
Consolidated statement of changes in equity
Note
Share
capital
£m
Share
premium
£m
Stated
capital
£m
Hedging
reserve
£m
Translation
reserve
£m
Merger
reserve
£m
Retained
earnings
£m
Attributable
to Breedon
Group
shareholders
£m
Non-
controlling
interests
£m
Total
equity
£m
Balance at 1 January 2023
–
–
555.0
0.1
0.4
–
488.0
1,043.5
0.3
1,043.8
Shares issued
17
–
0.7
–
–
–
–
–
0.7
–
0.7
Corporate reorganisation
474.5
–
(555.0)
–
–
80.5
–
–
–
–
Capital reduction
17
(471.1)
–
–
–
–
–
471.1
–
–
–
Transfer to non-controlling interests
17
–
–
–
–
–
–
(0.2)
(0.2)
0.2
–
Dividends paid
17
–
–
–
–
–
–
(37.3)
(37.3)
(0.3)
(37.6)
Total comprehensive income for the year
–
–
–
(0.6)
(4.1)
–
105.5
100.8
0.1
100.9
Share-based payments1
18
–
–
–
–
–
–
2.9
2.9
–
2.9
Balance at 31 December 2023
3.4
0.7
–
(0.5)
(3.7)
80.5
1,030.0
1,110.4
0.3
1,110.7
Shares issued
17
–
1.3
–
–
–
12.2
–
13.5
–
13.5
Transfer to non-controlling interests
17
–
–
–
–
–
–
(0.2)
(0.2)
0.2
–
Dividends paid
17
–
–
–
–
–
–
(48.1)
(48.1)
(0.2)
(48.3)
Total comprehensive income for the year
–
–
–
0.8
(6.0)
–
96.2
91.0
0.1
91.1
Share-based payments1
18
–
–
–
–
–
–
3.6
3.6
–
3.6
Balance at 31 December 2024
3.4
2.0
–
0.3
(9.7)
92.7
1,081.5
1,170.2
0.4
1,170.6
1 Share-based payments are shown inclusive of deferred tax recognised in equity.
For the year ended 31 December 2024
Breedon Group plc Annual Report and Accounts 2024
165
Strategic report Governance Financial statements Additional information
Consolidated statement of cash flows
Note
2024
£m
2023
£m
Cash flows from operating activities
Profit for the year
96.3
105.6
Adjustments for:
Depreciation and mineral depletion
4
99.7
88.7
Amortisation
9
12.5
6.0
Financial income
6
(1.2)
(2.6)
Financial expense
6
25.4
13.9
Share of profit of associate and joint ventures
10
(3.5)
(2.6)
Gain on sale of property, plant and equipment
4
(1.7)
(1.4)
Share-based payments
5
3.3
3.0
Taxation
7
29.1
28.8
Operating cash flows before changes in
working capital and provisions
259.9
239.4
(Increase) in inventories
(8.4)
(24.6)
Decrease/(increase) in trade and other receivables
10.5
(1.0)
(Decrease)/increase in trade and other payables
(15.6)
8.8
(Decrease)/increase in provisions
(3.1)
8.3
Cash generated from operating activities
243.3
230.9
Interest paid
(15.9)
(6.8)
Interest element of lease payments
(2.9)
(2.3)
Interest received
1.2
2.6
Income taxes paid
(24.0)
(32.5)
Net cash from operating activities
201.7
191.9
Cash flows used in investing activities
Acquisition of businesses
25
(173.6)
(18.8)
Dividends from associate and joint ventures
10
3.0
1.8
Purchase of property, plant and equipment
8
(131.3)
(106.8)
Proceeds from sale of property, plant and equipment
5.7
3.4
Net cash used in investing activities
(296.2)
(120.4)
Note
2024
£m
2023
£m
Cash flows used in financing activities
Dividends paid
17
(48.3)
(37.6)
Proceeds from the issue of shares (net of costs)
17
1.3
0.7
Proceeds from interest-bearing loans (net of costs)
357.4
–
Repayment of interest-bearing loans
(304.0)
(0.9)
Revolving Credit Facility extension costs
14
–
(0.7)
Repayment of lease obligations
(9.4)
(8.1)
Net cash used in financing activities
(3.0)
(46.6)
Net (decrease)/increase in cash and cash equivalents
(97.5)
24.9
Cash and cash equivalents at 1 January
126.9
101.7
Foreign exchange differences
(0.5)
0.3
Cash and cash equivalents at 31 December
28.9
126.9
For the year ended 31 December 2024
Breedon Group plc Annual Report and Accounts 2024
166
Strategic report Governance Financial statements Additional information
Accounting policies
1
The principal activities of the Group are
the quarrying of aggregates together
with manufacture and sale of construction
materials and building products, including
cement, asphalt and ready-mixed concrete,
together with related activities in GB, Ireland
and the US.
Breedon Group plc (the ‘Company’) is a
company domiciled in England. The address
of the Company’s registered office is
Pinnacle House, Breedon Quarry, Breedon
on the Hill, Derby, England, DE73 8AP.
Basis of preparation
These financial statements consolidate
the results of the Company and subsidiary
undertakings, and equity accounts for
the Group’s interests in its associate and
joint ventures (collectively ‘the Group’).
Applicable laws and accounting
standards
These financial statements have been
prepared in accordance with UK-adopted
international accounting standards.
The consolidated financial statements have
been prepared under the historical cost
convention except for the revaluation to
fair value of certain financial instruments.
The accounting policies set out below
have, unless otherwise stated, been applied
consistently throughout the year.
Presentation currency
These financial statements are presented in
sterling. All financial information presented
has been rounded to the nearest £0.1m.
Basis of consolidation
Subsidiary undertakings are entities
controlled by the Group. Control exists
when the Group is exposed to or has rights
to variable returns from its investment
and has the ability to affect those returns
through its power over the investee. In
assessing control, potential voting rights
that are currently exercisable or convertible
are taken into account.
The Group considers an entity to be a
subsidiary undertaking when the Group
has control over the entity. Ordinarily
this is when the Group holds more than
50% of the shares and voting rights.
Subsidiary undertakings are consolidated in
accordance with IFRS 10.
Associates are those entities in which the
Group holds more than 20% of the shares
and voting rights and has significant
influence, but not control, over the financial
and operating policies. Joint ventures
are those entities over whose activities
the Group has joint control, requiring
unanimous consent of the owners for
strategic financial and operating decisions.
Going Concern
These financial statements are prepared
on a going concern basis which the
directors consider to be appropriate
for the following reasons:
The Group meets day-to-day working
capital and other funding requirements
through banking facilities, which include
an overdraft facility. Longer-term
debt financing is accessed through the
Group’s USPP loan note programme.
The facilities comprise a £400m multi-
currency RCF, which runs to July 2028
and £250m of USPP loan notes with
maturities between 2028 and 2036.
Further details of these facilities are
provided in note 14 to the financial
statements.
In 2024, the Group comfortably met
all covenants and other terms of
its borrowing agreements. The Group
has continued its track record of
profitability and cash generation, with an
overall profit before taxation of £125.4m
and net cash from operating activities
of £201.7m.
The Group has prepared cash flow
forecasts for a period of 12 months from
the date of signing these financial
statements, which show a sustained
trend of profitability, cash generation
and retained covenant headroom, even
under a ‘severe but plausible’ downside
scenario of forecast cash flows.
The base case assumes a trading
performance delivered in line with
market consensus over the forecast
period, while the downside scenario
models a 5%-10% reduction in revenues,
which the Group believes is a severe
sensitivity relative to likely outcomes and
historic experience.
As at 31 December 2024, the Group had
cash balances of £28.9m and undrawn
banking facilities in excess of £250m.
At the date of this report, the Group’s
liquidity has increased by c. £80m as a
result of the issuance of additional notes
under its USPP programme. Following
the acquisition discussed in note 28, the
level of undrawn facilities will reduce to
c. £150m, which is expected to provide
sufficient available funds for the Group to
discharge its liabilities as they fall due.
Consequently, the directors are
confident that the Group will have
sufficient funds to continue to meet
its liabilities as they fall due for at least
12 months from the date of approval of
these financial statements and therefore
have prepared the financial statements
on a going concern basis.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
167
Strategic report Governance Financial statements Additional information
The Group’s financial statements
includes the Group’s share of the total
comprehensive income of its associate
and joint ventures, on an equity accounted
basis, from the date that significant
influence or joint control commences
until the date that significant influence
or joint control ceases.
When the Group’s share of losses exceeds
its interest in an associate or joint venture,
the Group’s carrying amount is reduced
to nil and recognition of further losses is
discontinued, except to the extent that the
Group has incurred legal or constructive
obligations or made payments on behalf
of an associate or joint venture.
Accounting estimates and judgements
The preparation of the financial statements
requires the use of certain critical
accounting estimates, and for management
to exercise judgement in the process of
applying the Group’s accounting policies.
The areas involving a higher degree of
judgement or complexity, or areas where
assumptions and estimates are significant
to the consolidated financial statements, are
disclosed in note 26.
New IFRS Standards and Interpretations
adopted in the year
The Group adopted amendments to IAS1,
IAS 7, IFRS 7 and IFRS 16 from 1 January
2024. The adoption of these standards
has not had a material impact on the
financial statements.
New IFRS Standards and Interpretations
not adopted
At the date on which these financial
statements were authorised, there
were no Standards, Interpretations and
Amendments which had been issued
but were not effective for the year ended
31 December 2024 that are expected
to have a material impact on the Group’s
financial statements in the future.
Foreign exchange
Foreign exchange transactions
Transactions in foreign currencies are
recorded at the spot rate at the transaction
date. Monetary assets and liabilities
denominated in foreign currencies are
retranslated at the balance sheet date,
with all currency translation differences
recognised within the consolidated income
statement, except for those monetary items
that provide an effective hedge for a net
investment in a foreign operation.
Foreign exchange translation
The consolidated financial statements
are presented in sterling, which is the
presentational currency of the Group.
The individual financial statements of the
Group’s subsidiaries and joint ventures with
a functional currency other than sterling
are translated into sterling according
to IAS 21.
Results and cash flows are translated
monthly using average monthly exchange
rates. Accumulated assets and liabilities
are translated using the closing rates at the
reporting date and equity is translated at
historic exchange rates.
The resulting translation differences are
recognised in the consolidated statement of
comprehensive income until the subsidiary
is disposed of. Goodwill and fair value
adjustments arising on acquisition of a
foreign operation are regarded as assets
and liabilities of the foreign operation and
are translated accordingly.
Financial instruments
Financial instruments are recognised
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:
Trade receivables and trade payables
Trade receivables and trade payables are
initially recognised at fair value and are then
stated at amortised cost.
Contract assets and liabilities
Contract assets, presented within trade
and other receivables, primarily relate to
the Group’s rights to consideration for work
completed but not billed at the reporting
date on surfacing contracts. The contract
assets are transferred to receivables
when the rights become unconditional.
Contract liabilities, presented within trade
and other payables, primarily relate to
the advance consideration received from
customers on these contracts.
Cash and cash equivalents
Cash and cash equivalents comprise
cash at bank and in hand, including bank
deposits and money-market funds with
original maturities of three months or
less. For the purposes of the consolidated
statement of cash flows, bank overdrafts
are included in cash and cash equivalents
as they are an integral part of the Group’s
cash management.
Bank and other borrowings
Interest-bearing bank loans, overdrafts
and other loans, including USPP loan
notes, are recognised initially at fair
value less attributable transaction costs.
All borrowings are subsequently stated
at amortised cost with the difference
between initial net proceeds and
redemption value recognised in the
consolidated income statement over
the period to redemption on an effective
interest basis.
Derivative financial instruments
The majority of the Group’s strategic
hedging programme is delivered using
executory contracts to forward purchase
commodities for our own use. The cost is
recognised in the consolidated income
statement at the agreed forward rates
on receipt of the underlying items.
Notes to the consolidated financial statements
Accounting policies continued
1
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168
Strategic report Governance Financial statements Additional information
Derivative financial instruments
continued
The Group uses financial instruments to
manage financial risks associated with
the Group’s underlying business activities
and the financing of those activities.
The Group does not undertake any
trading in financial instruments.
Derivatives are initially recognised at fair
value and subsequently remeasured in
future periods at fair value. The gain
or loss on remeasurement is recognised
immediately in profit or loss, unless
a derivative financial instrument is
designated as a hedge of the variability in
cash flows of a recognised asset or liability.
In this instance the effective part of
any gain or loss is recognised in the
consolidated statement of comprehensive
income and in the hedging reserve.
Any ineffective portion of the hedge
is recognised immediately in the
consolidated income statement.
Amounts recorded in the hedging reserve
are subsequently reclassified to the
consolidated income statement when
the expense for the hedged transaction
is actually recognised.
To qualify for hedge accounting, the hedging
relationship must meet several conditions
with respect to documentation, probability
of occurrence, hedge effectiveness and
reliability of measurement.
At the inception of the transaction,
the Group documents the relationship
between hedging instruments and hedged
items, as well as its risk management
objective and strategy for undertaking
the hedge transaction.
This process includes linking all derivatives
designated as hedges to specific assets and
liabilities or to specific firm commitments or
forecast transactions.
The Group documents an assessment, at
hedge inception and on an annual basis,
as to whether the derivatives that are
used in hedging transactions have been,
and are likely to continue to be, effective
in offsetting changes in fair value or cash
flows of hedged items.
Mineral reserves and resources
Mineral reserves and resources are stated
at cost, including both the purchase price
and costs incurred to gain access to the
reserves, including costs of planning and
initial site development. The value of mineral
reserves and resources recognised as a
result of business combinations is based on
the fair value at the point of acquisition.
Mineral assets are depreciated using a
physical unit-of-production method,
over the commercial life of the quarry.
Property, plant and equipment
Items of property, plant and equipment
are stated at cost less accumulated
depreciation and any recognised
impairment loss.
Depreciation is charged to the consolidated
income statement on a straight-line basis
over the estimated useful lives of assets,
in order to write off the cost or deemed cost
of assets.
The estimated useful lives are as follows:
Freehold buildings
50 years
Fixtures and fittings
up to 10 years
Office equipment
up to 5 years
Fixed plant
up to 35 years
Loose plant
and machinery
up to 10 years
Motor vehicles
up to 10 years
No depreciation is provided on freehold land.
Business combinations, intangible
assets and goodwill
The Group measures goodwill as the
fair value of the purchase consideration
transferred, including the recognised
amount of any non-controlling interest
in the acquiree, less the fair value of the
identifiable assets acquired and liabilities
assumed, all measured as of the acquisition
date. Fair value adjustments are always
considered to be provisional at the first
reporting date after the acquisition.
Goodwill arising on the acquisition of
subsidiary undertakings is recognised
as an asset in the consolidated statement of
financial position and is subject to an annual
impairment review.
Other intangible assets that are acquired by
the Group as part of a business combination
are stated at cost less accumulated
amortisation and impairment losses.
Cost reflects management’s judgement
of the fair value of the individual intangible
asset calculated by reference to the net
present value of future economic benefits
accruing to the Group from the utilisation
of the asset, discounted at an appropriate
rate. Cash flow projections are based on
management’s estimate of economic and
market conditions, as well as operating
margins, capital expenditure, customer
attrition rates and working capital
requirements. Other intangibles arising on
the acquisition of associated undertakings
are included within the carrying value of the
investment.
Amortisation is based on the estimated
useful economic lives of the assets
concerned, which is considered by the
directors to be a period of up to 20 years.
The Group measures non-controlling
interests at a proportionate share of the
recognised amount of the identifiable net
assets at the acquisition date.
Where the Group has entered into put
options relating to a minority shareholding
as part of a transaction, the Group applies
the ‘anticipated acquisition’ method to
account for the put liability and does not
recognise a separate non-controlling
interest within reserves. Subsequent
changes in the value of the put liability
are recognised within equity.
Notes to the consolidated financial statements
Accounting policies continued
1
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169
Strategic report Governance Financial statements Additional information
Impairment of non-financial assets
The carrying amounts of the Group’s
non-financial assets, other than goodwill,
inventories and deferred tax assets
(see separate accounting policies),
are reviewed at each reporting date to
determine whether there is any indication of
impairment; including an assessment of any
indication of impairment arising as a result
of climate change.
Impairment reviews are undertaken at the
level of each significant cash-generating
unit, which is no larger than an operating
segment as defined by IFRS 8. If any
such indication exists then the asset’s
recoverable amount is estimated.
The recoverable amount of an asset or
cash-generating unit is the greater of
the value in use and the fair value less
costs to sell.
In assessing value in use, the estimated
future cash flows are discounted to their
present value using a pre-tax discount rate
that reflects current market assessments
of the time value of money and the risks
specific to the asset.
An impairment loss in respect of goodwill
is not reversed. In respect of other assets,
impairment losses recognised in prior
periods are assessed at each reporting
date for any indications that the loss has
decreased or no longer exists.
An impairment loss is reversed if there has
been a change in the estimates used to
determine the recoverable amount.
An impairment loss is reversed only to the
extent that the asset’s carrying amount
does not exceed the carrying amount
that would have been determined, net
of depreciation or amortisation, if no
impairment loss had been recognised.
Impairment of financial assets
The Group recognises loss allowances
for expected credit losses (ECLs) on
financial and contract assets measured
at amortised cost.
The Group measures loss allowances at
an amount equal to lifetime ECLs except
for bank balances for which credit risk
(i.e. the risk of default occurring over the
expected life of the financial instrument)
has not increased significantly since
initial recognition, which are measured as
12-month ECLs.
ECLs are a probability-weighted estimate
of credit losses. Credit losses are measured
as the present value of all cash shortfalls (i.e.
the difference between the cash flows due
to the entity in accordance with the contract
and the cash flows that the Group expects
to receive). ECLs are discounted at the
effective interest rate of the financial asset.
Inventories
Inventories are stated at the lower of cost
and net realisable value. Cost is based on
the first-in first-out principle and includes
expenditure incurred in acquiring the
inventories and bringing them to their
existing location and condition.
In the case of manufactured inventories
and work in progress, cost includes an
apportionment of overheads, including
mineral depletion where relevant. The level of
overheads included in the cost of inventory is
based on normal operating capacity.
Net realisable value is determined with
reference to sales prices less cost to sell
and, in the case of obsolete stock, on an
excess stock model of sales relative to
inventories held.
Emissions rights
The Group is required to purchase carbon
emissions credits to settle liabilities
under both EU and UK ETS. Assets and
liabilities arising in respect of emission
rights are presented on a net basis in the
consolidated financial statements.
Where an emissions credit is received for
nil cost, these are initially measured at a
nominal value of zero and an emissions
liability is recognised only in circumstances
where emissions have exceeded the
allowance for a scheme, from the
perspective of the Group as a whole, and
will require the purchase of additional
allowances to settle an emissions liability.
Emission credits purchased for
consideration are measured at cost using
the first-in first-out principle and presented
within inventories where the net value is in
excess of emissions liabilities.
Retirement benefits
The Group does not operate any defined
benefit plans. Obligations for contributions
to defined contribution pension plans
are recognised as an expense in the
consolidated income statement as incurred.
Provisions
A provision is recognised in the consolidated
statement of financial position when the
Group has a present legal or constructive
obligation, and it is probable that an outflow
of economic benefits will be required to
settle the obligation.
The Group provides for the costs of
decommissioning and restoration where
an obligation arises to comply with
contractual, environmental, planning and
other legislation.
The initial cost of creating provisions on
commencement of operations is included
in property, plant and equipment and
depreciated over the life of the plant.
Changes in the measurement of a
previously capitalised provision that result
from changes in the estimated timing or
amount of cash outflows are added to, or
deducted from, the cost of the related asset
unless a deduction would reduce the asset
to below zero.
Notes to the consolidated financial statements
Accounting policies continued
1
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170
Strategic report Governance Financial statements Additional information
Provisions continued
All other changes are recognised in the
consolidated income statement, including
incremental extraction of minerals which
increase the level of restoration provisions
and any decreases in liability in excess of the
carrying amount of a capitalised asset.
All provisions are discounted to their present
value at a rate that reflects current market
assessments of the time value of money and
the risks specific to the liability.
Revenue
Group revenue arises from the sale of goods
and surfacing. IFRS 15 requires revenue to
be recognised in line with a principles-based
five-step model. This requires the Group
to identify its performance obligations,
determine the transaction price applicable
to each of these performance obligations
and then to select an appropriate method
for the timing of revenue recognition,
reflecting the substance of the performance
obligation, being either recognition at a
point in time or over time.
Revenue from sale of goods
The majority of the Group’s revenue is
derived from the sale of physical goods
to customers. Depending on whether
the goods are delivered to or collected
by the customer, the contract contains either
one performance obligation which is satisfied
at the point of collection, or two performance
obligations which are satisfied
simultaneously at the point of delivery.
The transaction price for this revenue is
the amount which can be invoiced to
the customer once the performance
obligations are fulfilled, reduced to reflect
provisions recognised for returns, trade
discounts and rebates. Where the Group
offers discounts or volume rebates, the
variable element of revenue is based on
the most likely amount of consideration that
the Group believes will be received. This
value excludes items collected on behalf of
third parties, such as sales taxes.
For all sales of goods, revenue is recognised
at a point in time, being the point that the
goods are transferred to the customer.
Revenue from surfacing
The majority of surfacing revenue
comprises short-term performance
obligations to supply and lay materials.
Other surfacing revenue can contain
more than one performance obligation
dependent on the nature of the contract.
The transaction price is calculated as
consideration specified by the contract,
adjusted to reflect provisions recognised for
returns, trade discounts and rebates.
Where the agreement with a customer
provides for elements of variable
consideration, these values are included
in the calculation of the transaction price
only to the extent that it is deemed ‘highly
probable’ that a significant reversal in the
amount of cumulative revenue recognised
will not occur when the uncertainty
associated with the variable consideration
is resolved.
Where the transaction price is allocated
between multiple performance obligations,
this typically reflects the allocation of value
to each performance obligation agreed with
the end customer, unless this does
not reflect the economic substance.
Surfacing performance obligations
are satisfied over time, so surfacing revenue
is typically recognised on an output basis,
being volume of product laid.
Warranties and customer claims
The Group provides assurance type
warranties over the specification of
products but does not provide extended
warranties or maintenance services in
contracts with customers. Claims with
customers may arise in the usual course
of business. Both customer claims and
warranties are accounted for under IAS 37.
Financial income and expense
Financial income and expense comprise
interest payable, finance charges, lease
interest, interest receivable on funds
invested, and gains and losses on related
hedging instruments that are recognised
in the consolidated income statement.
Interest income and interest payable is
recognised in profit or loss as it accrues,
using the effective interest method.
Income tax
Income tax on the profit or loss for the
year comprises current and deferred
tax. Income tax is recognised in the
consolidated income statement except
to the extent that income tax relates to
items recognised directly in equity.
Current tax is the expected tax payable
on the taxable profit for the year. Taxable
profit differs from net profit as reported
in the consolidated income statement
because taxable profit excludes items of
income or expense that are not taxable
or deductible.
The Group’s liability for current tax is
calculated using tax rates enacted or
substantively enacted at the reporting
date and includes any adjustment to tax
payable in respect of previous years.
Deferred tax
Deferred tax is provided in full using the
statement of financial position liability
method and represents the tax expected
to be payable or recoverable on the
temporary differences between the
carrying amounts of assets and liabilities
for financial reporting purposes and the
amounts used for taxation purposes.
Notes to the consolidated financial statements
Accounting policies continued
1
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171
Strategic report Governance Financial statements Additional information
Deferred tax continued
The following temporary differences are not
provided for:
goodwill not deductible for tax purposes;
the initial recognition of assets or
liabilities that affect neither accounting
nor taxable profit other than in a business
combination; and
differences relating to investments
in subsidiaries to the extent that
they will probably not reverse in the
foreseeable future.
The amount of deferred tax provided
is based on the expected manner of
realisation or settlement of the carrying
amount of assets and liabilities using tax
rates enacted or substantively enacted
at the reporting date.
A deferred tax asset is recognised only
to the extent that it is probable that
future taxable profits will be available
against which the asset can be utilised.
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 asset to
be recovered.
Deferred tax assets and liabilities are offset
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.
Leases
Right-of-use assets and liabilities are
recognised for any arrangements meeting
the definition of a lease set out in IFRS 16.
Right-of-use assets are measured at cost,
comprising the initial amount of the
lease liability adjusted for any lease
prepayments, plus any initial direct costs
incurred, less any lease incentives received.
Right-of-use assets are then depreciated
using the straight-line method from the
start of the lease to the earlier of the end
of the useful life of the right-of-use asset
or the end of the lease term.
Lease liabilities are presented within
interest-bearing loans and borrowings.
They are measured at the present value
of future lease payments, discounted at
a rate which reflects both the Group’s
incremental borrowing rate, adjusted for the
time value of money, and the nature of the
leased asset.
The Group has elected to take advantage
of the practical expedients, permitted by
IFRS 16, not to recognise lease assets and
liabilities in respect of short-term and low-
value leases. Charges recognised in the
consolidated income statement in respect of
these leases are not significant to the Group.
Share-based transactions
Equity-settled share-based payments
to directors, key employees and others
providing similar services are measured at
the fair value of the equity instruments at
the grant date. The fair value is expensed,
with a corresponding increase in equity,
on a straight-line basis over the period that
the employees become unconditionally
entitled to the awards.
At each reporting date, the Group revises
the amount recognised as an expense
to reflect the number of awards for which
the related service and non-market
performance conditions are expected to
be met, such that the amount ultimately
recognised as an expense is based on the
number of awards that meet the related
service and non-market performance
conditions at the vesting date.
For share-based payment awards with
market-based performance conditions,
the grant date fair value of the share-
based payment is measured to reflect
such conditions and there is no true-up
for differences between expected and
actual outcomes.
Where a share-based payment is net-
settled by withholding a specified portion of
the shares to meet statutory obligations, the
arrangement is accounted for as an equity-
settled share-based payment in its entirety.
Dividends
Dividends are recognised as a liability
in the financial statements in the period in
which they are declared by the Company
and, in respect of final dividends, approved
by shareholders.
Alternative performance measures
The following non-GAAP performance
measures have been used in the
financial statements:
Non-GAAP performance measure
Note
ref
i.
Underlying Earnings Before Interest
and Tax (EBIT)
27
ii.
Underlying Earnings Before
Interest and Tax, Depreciation and
Amortisation (EBITDA)
27
iii.
Underlying EBIT and EBITDA margin
27
iv.
Like-for-like Underlying EBIT
and EBITDA
27
v.
Like-for-like revenue
27
vi.
Adjusted Underlying Basic & Diluted
Earnings per Share (EPS)
23
vii.
Free Cash Flow
27
viii. Free Cash Flow conversion
27
ix.
Return on invested capital
27
x.
Covenant Leverage
27
xi.
Net Debt
14
xii.
Net Debt (excluding IFRS 16)
14
Management uses these terms as
they believe these measures allow an
understanding of the Group’s underlying
business performance. These alternative
performance measures are well understood
by investors and analysts, are consistent
with the Group’s historic communication
with investors and reflect the way in which
the business is managed.
Notes to the consolidated financial statements
Accounting policies continued
1
Breedon Group plc Annual Report and Accounts 2024
172
Strategic report Governance Financial statements Additional information
Segmental analysis
2
The Group’s activities comprise the following reportable segments:
Great Britain: our construction materials and surfacing businesses in Great Britain.
Ireland: our construction materials and surfacing businesses on the Island of Ireland.
United States: our construction materials businesses in the United States of America,
acquired during the year (note 25).
Cement: our cementitious operations in Great Britain and the Republic of Ireland.
A description of the activities of each segment is included on pages 32 to 39.
Income statement
2024
2023
Revenue
£m
Underlying
EBITDA1
£m
Revenue
£m
Underlying
EBITDA1
£m
Great Britain
997.4
131.9
1,033.8
138.6
Ireland
233.4
41.5
235.5
35.9
United States
132.5
24.8
–
–
Cement
309.2
88.2
331.2
84.5
Central administration
–
(16.5)
–
(16.7)
Eliminations
(96.2)
–
(113.0)
–
Total
1,576.3
269.9
1,487.5
242.3
Reconciliation to statutory profit
Underlying EBITDA as above
269.9
242.3
Depreciation and mineral depletion
(99.7)
(88.7)
Underlying Group operating profit
170.2
153.6
– Great Britain
78.5
86.4
– Ireland
33.6
29.0
– United States
16.4
–
– Cement
58.5
55.2
– Central administration
(16.8)
(17.0)
Underlying Group operating profit
170.2
153.6
Share of profit of associate and joint ventures
3.5
2.6
Underlying profit from operations (EBIT)
173.7
156.2
Non-underlying items (note 3)
(24.1)
(10.5)
Profit from operations
149.6
145.7
1 Underlying EBITDA is earnings before interest, tax, depreciation and mineral depletion, amortisation,
non-underlying items (note 3) and before our share of profit of associate and joint ventures.
Disaggregation of revenue from contracts with the customers
Analysis of revenue by geographic location of end-market
The primary geographic markets for all Group revenues for the purpose of IFRS 15 are the
UK, Republic of Ireland (RoI) and United States. In line with the requirements of IFRS 8, this
is analysed by individual countries as follows:
2024
£m
2023
£m
United Kingdom
1,251.0
1,296.8
Republic of Ireland
190.1
188.1
United States
132.5
–
Other
2.7
2.6
1,576.3
1,487.5
Analysis of revenue by major products and service lines by segment
2024
£m
2023
£m
Sale of goods
Great Britain
797.9
855.8
Ireland
106.9
96.5
United States
132.5
–
Cement
309.2
331.2
Eliminations
(96.2)
(113.0)
1,250.3
1,170.5
Surfacing
Great Britain
199.5
178.0
Ireland
126.5
139.0
326.0
317.0
1,576.3
1,487.5
Eliminations primarily comprise sales from Cement to the Great Britain and Ireland segments.
Timing of revenue recognition
Sale of goods revenue relates to products for which revenue is recognised at a point
in time as the product is transferred to the customer. Surfacing revenues are accounted
for as products and services for which revenue is recognised over time.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
173
Strategic report Governance Financial statements Additional information
Segmental analysis continued
2
Statement of financial position
2024
2023
Total assets
£m
Total liabilities
£m
Total assets
£m
Total liabilities
£m
Great Britain
940.7
(233.8)
920.6
(238.3)
Ireland
269.4
(38.1)
282.8
(40.6)
United States
303.5
(32.7)
–
–
Cement
567.0
(75.9)
539.2
(73.8)
Central administration
3.0
(24.5)
3.3
(20.5)
Total operations
2,083.6
(405.0)
1,745.9
(373.2)
Current tax
1.5
–
–
(0.1)
Deferred tax
–
(104.2)
–
(92.0)
Net Debt
28.9
(434.2)
126.9
(296.8)
Total Group
2,114.0
(943.4)
1,872.8
(762.1)
Net assets
1,170.6
1,110.7
GB total assets include £13.8m (2023: £13.4m) and Cement total assets include £1.2m
(2023: £1.1m) in respect of investments in associate and joint ventures.
Geographic location of non-current assets
2024
£m
2023
£m
United Kingdom
1,068.0
1,074.6
Republic of Ireland
362.3
323.3
United States
256.6
–
1,686.9
1,397.9
Analysis of depreciation, amortisation and capital expenditure
Depreciation
and mineral
depletion
£m
Amortisation
of intangible
assets
£m
Additions
to property,
plant and
equipment
£m
2024
Great Britain
53.4
3.6
49.4
Ireland
7.9
2.5
11.4
United States
8.4
6.4
16.7
Cement
29.7
–
53.8
Central administration
0.3
–
–
99.7
12.5
131.3
2023
Great Britain
52.2
3.6
56.9
Ireland
6.9
2.4
14.1
Cement
29.3
–
35.2
Central administration
0.3
–
0.6
88.7
6.0
106.8
Additions to owned property, plant and equipment exclude additions in respect of
business combinations.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
174
Strategic report Governance Financial statements Additional information
Non-underlying items
3
Non-underlying items are those which, because of their nature, size or incidence, are either
unlikely to recur in future periods or which distort the underlying trading performance
of the business, including non-cash items. For an item to be classified as non-underlying,
it must meet defined criteria which are applied consistently by the Group.
The directors monitor the performance of the Group using alternative performance
measures which are calculated on an underlying basis. In the opinion of the directors,
this presentation aids understanding of the underlying business performance and any
references to underlying earnings measures throughout this report are made on this basis.
As underlying measures include the benefits of acquisitions but exclude significant costs
(such as one-off acquisition related costs or amortisation of acquired intangible assets),
they should not be regarded as a complete picture of the Group’s financial performance.
Underlying measures are calculated and presented on a consistent basis over time to assist
in the comparison of performance.
2024
£m
2023
£m
Included in operating expenses:
Acquisition-related expenses (note 25)
10.2
0.9
Losses on disposal of property
0.1
–
Redundancy and reorganisation costs
1.3
–
Amortisation of acquired intangible assets
12.5
6.0
AIM to Main Market costs
–
3.6
Total non-underlying items (before interest and tax)
24.1
10.5
Non-underlying interest (note 14)
1.3
–
Non-underlying tax
(3.6)
(1.4)
Total non-underlying items
21.8
9.1
Operating expenses and auditor’s remuneration
4
2024
£m
2023
£m
Costs of raw materials purchased
306.8
263.1
Employee costs (note 5)
246.6
208.3
Depreciation and mineral depletion:
Owned assets
91.6
80.6
Leased assets
8.1
8.1
Gain on sale of property, plant and equipment
(1.8)
(1.4)
Other operating expenses
754.8
775.2
Underlying operating expenses
1,406.1
1,333.9
Non-underlying operating expenses (note 3)
24.1
10.5
Operating expenses
1,430.2
1,344.4
2024
£m
2023
£m
Auditor’s remuneration
Audit of the Company
0.3
0.3
Audit of the Company’s subsidiary undertakings
1.3
0.9
Reporting accountant’s fees
-
0.6
1.6
1.8
There were no non-audit services undertaken during the year.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
175
Strategic report Governance Financial statements Additional information
Employees and directors
5
Disclosure by individual director, including information on all outstanding share options,
is provided in the Directors’ Remuneration report from page 129. Remuneration received by
the directors (the Group’s key management personnel) is summarised below:
Directors’ remuneration
2024
£m
2023
£m
Salaries and short-term employee benefits
2.4
2.5
Directors’ fees
0.5
0.4
Share-based payments (note 18)
0.6
1.1
3.5
4.0
No pension contributions were paid by the Group directly to any pension schemes
on behalf of the directors in either the current or prior years.
Staff numbers and costs
The average number of persons employed by the Group during the year was as follows:
Number of employees
2024
2023*
Great Britain
2,767
2,778
Ireland
347
338
United States
466
–
Cement
537
523
Central administration
278
258
4,395
3,897
* Restated for consistent presentation of central administrative headcount to reflect changes in the Group’s internal
reporting during 2023.
The aggregate payroll costs of these persons were as follows:
2024
£m
2023
£m
Wages and salaries
211.8
177.4
Social security costs
22.5
20.3
Pension costs
9.0
7.6
Share-based payments (note 18)
3.3
3.0
246.6
208.3
Pension costs relate to various defined contribution pension schemes operated within
the Group. These are accounted for on a contribution payable basis.
Contributions outstanding at 31 December 2024 amounted to £1.1m (2023: £1.2m)
and are included in other payables.
Financial income and expense
6
2024
£m
2023
£m
Interest received on cash deposits and money-market funds
1.2
2.6
Total financial income
1.2
2.6
Interest charged on bank loans, private placement notes and overdrafts
(15.9)
(6.8)
Amortisation of loan arrangement fees
(0.9)
(1.1)
Lease liabilities
(2.9)
(2.3)
Unwinding of discount on provisions
(4.4)
(3.7)
Underlying financial expense
(24.1)
(13.9)
Non-underlying interest (note 14)
(1.3)
-
Total financial expense
(25.4)
(13.9)
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
176
Strategic report Governance Financial statements Additional information
Taxation
7
Recognised in the consolidated income statement
2024
£m
2023
£m
Current tax
Current year
26.5
30.5
Prior year
(4.1)
(2.1)
Total current tax
22.4
28.4
Deferred tax
Current year
2.6
(1.2)
Prior year
4.1
1.6
Total deferred tax
6.7
0.4
Total tax charge in the consolidated income statement
29.1
28.8
Recognised in equity
2024
£m
2023
£m
Deferred tax
Derivatives
–
(0.1)
Share-based payments
(0.3)
0.1
Total tax charge in equity
(0.3)
–
Reconciliation of effective tax rate
2024
£m
2023
£m
Profit before taxation
125.4
134.4
Tax at the Company’s domestic rate of 25.0% (2023: 23.5%)
31.4
31.6
Difference between Company and subsidiary statutory tax rates
(5.8)
(4.0)
Expenses not deductible for tax purposes
3.2
1.4
Income from associate and joint ventures already taxed
(0.8)
(0.5)
Change in deferred tax rate
–
0.7
Pillar Two top up charge
0.6
–
Other
0.5
0.1
Adjustment in respect of prior years
–
(0.5)
Total tax charge
29.1
28.8
The Company is tax resident in the UK, with a 25.0% (2023:23.5%) tax rate. The Group’s
subsidiary operations pay tax at a rate of 25.0% (2023: 23.5%) in the UK and 12.5%
(2023: 12.5%) in RoI. US subsidiary operations pay tax at the federal tax rate of 21%
together with state income tax, resulting in a blended statutory rate of c. 25%.
Excluding the impact of non-underlying items, the Group’s Underlying effective tax rate
is 21.7% (2023: 20.4%). Including these items, the Group’s reported tax rate for the year
is 23.2% (2023: 21.4%).
Global Minimum Corporate Tax Framework
From 1 January 2024, the Group is within scope of the Global Minimum Corporate Tax
rate of 15% (‘Pillar Two’ rules). The impact of these new rules on the Group is limited to the
Group’s taxable profits generated in the Republic of Ireland, where the tax rate is 12.5%,
resulting in a top up charge of £0.6m.
In accordance with the mandatory exception under Amendments to IAS 12, the Group has
not remeasured deferred tax assets and liabilities as a result of the implementation of the
Pillar Two rules.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
177
Strategic report Governance Financial statements Additional information
Property, plant and equipment
8
Mineral
reserves and
resources
£m
Land and
buildings
£m
Plant,
equipment
and vehicles
£m
Total
£m
Cost
Balance at 1 January 2024
354.8
148.4
787.4
1,290.6
Translation adjustment
(1.1)
(2.1)
(3.4)
(6.6)
Business combinations (note 25)
4.6
15.1
68.1
87.8
Additions
7.0
5.7
118.6
131.3
Disposals and impairment
–
(0.8)
(23.6)
(24.4)
Change to capitalised provisions (note 16)
1.3
1.6
0.4
3.3
Reclassification
–
4.4
(4.4)
–
At 31 December 2024
366.6
172.3
943.1
1,482.0
Depreciation and mineral depletion
Balance at 1 January 2024
96.5
40.7
336.2
473.4
Translation adjustment
(0.2)
(0.4)
(0.8)
(1.4)
Charge for the year
11.7
6.5
73.4
91.6
Disposals and impairment
-
(0.4)
(20.3)
(20.7)
At 31 December 2024
108.0
46.4
388.5
542.9
Net book value
At 31 December 2024
258.6
125.9
554.6
939.1
Mineral
reserves and
resources
£m
Land and
buildings
£m
Plant,
equipment
and vehicles
£m
Total
£m
Cost
Balance at 1 January 2023
340.3
134.8
713.3
1,188.4
Translation adjustment
(0.6)
(0.7)
(1.8)
(3.1)
Business combinations (note 25)
6.5
1.6
2.9
11.0
Additions
13.5
10.9
82.4
106.8
Disposals and impairment
(2.0)
(0.5)
(6.7)
(9.2)
Change to capitalised provisions
–
(0.6)
(3.2)
(3.8)
Transfer from leased assets (note 20)
–
–
0.5
0.5
Reclassification
(2.9)
2.9
–
–
At 31 December 2023
354.8
148.4
787.4
1,290.6
Depreciation and mineral depletion
Balance at 1 January 2023
86.4
32.8
281.3
400.5
Translation adjustment
(0.1)
–
(0.4)
(0.5)
Transfer from leased assets (note 20)
–
–
0.2
0.2
Charge for the year
13.8
5.9
60.9
80.6
Disposals and impairment
(1.5)
(0.1)
(5.8)
(7.4)
Reclassification
(2.1)
2.1
–
–
At 31 December 2023
96.5
40.7
336.2
473.4
Net book value
At 31 December 2023
258.3
107.7
451.2
817.2
Assets under construction
Presented within plant, equipment and vehicles are assets in the course of construction
totalling £66.5m (2023: £59.3m) which are not being depreciated.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
178
Strategic report Governance Financial statements Additional information
Intangible assets
9
Goodwill
£m
Customer
related
£m
Other
£m
Total
£m
Cost
At 1 January 2024
474.1
53.8
17.7
545.6
Translation adjustment
(4.7)
0.2
–
(4.5)
Business combinations (note 25)
65.2
116.1
1.6
182.9
At 31 December 2024
534.6
170.1
19.3
724.0
Amortisation
At 1 January 2024
–
18.9
6.5
25.4
Translation adjustment
–
–
(0.2)
(0.2)
Charge for the year
–
10.8
1.7
12.5
At 31 December 2024
–
29.7
8.0
37.7
Net book value
At 31 December 2024
534.6
140.4
11.3
686.3
Cost
At 1 January 2023
469.6
50.4
17.7
537.7
Translation adjustment
(2.4)
(0.5)
–
(2.9)
Business combinations (note 25)
6.9
3.9
–
10.8
At 31 December 2023
474.1
53.8
17.7
545.6
Amortisation
At 1 January 2023
–
14.7
4.8
19.5
Translation adjustment
–
(0.1)
–
(0.1)
Charge for the year
–
4.3
1.7
6.0
At 31 December 2023
–
18.9
6.5
25.4
Net book value
At 31 December 2023
474.1
34.9
11.2
520.2
Other intangible assets primarily comprise brand and permit assets arising from
acquisitions. The amortisation charge on these assets is recognised in non-underlying
operating expenses in the consolidated income statement. The remaining life of the finite
intangible assets is up to 15 years.
Carrying value of goodwill by operating segment
2024
£m
2023
£m
Great Britain
212.4
200.2
Ireland
109.1
111.8
United States
53.6
–
Cement
159.5
162.1
534.6
474.1
Impairment tests for cash-generating units (CGUs) containing goodwill
Goodwill arising on business combinations is not amortised but is reviewed for impairment
on an annual basis, or more frequently if there are indications that the goodwill may
be impaired. Goodwill is allocated to groups of CGUs according to the level at which
management monitor that goodwill, being the Group’s operating segments.
The key assumptions used in performing the impairment review are those used in
calculating the value-in-use of each CGU, as set out below:
Cash flow projections
Cash flow projections for each operating segment are derived from the annual budget
approved by the Board for 2025 and the three-year plan extending to 2027. The key
assumptions on which budgets and plans are based include sales growth, product mix,
changes in operating costs and capital investment requirements.
These cash flows are then extrapolated forward for a further period of up to 50 years
reflecting the long-term nature of the underlying assets, subject to obtaining incremental
planning permissions for our quarries and plants. This is not considered to be a significant
judgement. Budgeted cash flows are based on past experience and forecast future
trading conditions.
Long-term growth rates
Cash flow projections assume a growth rate of between 2.5% and 3% (2023: 3.2%) from
the fourth year of the value-in-use model, which reflects the impact of longer-term inflation
projections on future earnings derived from published market data.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
179
Strategic report Governance Financial statements Additional information
Intangible assets continued
9
Discount rate
Forecast pre-tax cash flows for each segment have been discounted at pre-tax rates of
between 10.3% and 14.5% (2023: between 11.5% and 14.7%). These rates were determined
by an external expert based on market participants’ cost of capital and adjusted to reflect
factors specific to each segment.
Pre-tax discount rates
2024
2023
GB
13.6%
14.1%
Ireland
11.7%
13.5%
US
11.3%
N/A
Cement
12.5%
12.5%
Sensitivity
The Group has assessed the impact of possible changes in the key assumptions to the
impairment review, including the near term capital costs of the implementation of our
carbon reduction strategy that are included in our financial plans. As discussed below,
it is not possible at present to quantify the gross cost of the transition over the longer term
and this is therefore excluded from the sensitivity analysis.
Having performed a sensitivity analysis over the key assumptions, the directors have
concluded that there are no reasonably possible changes to assumptions which would
result in an impairment charge being recognised.
Impact of climate change on impairment testing
Impacts related to climate change and the transition to a lower carbon economy
may include:
physical impacts resulting from increased severity and frequency of extreme weather
events, together with impacts arising from longer-term shifts in climate patterns; and
transitional impacts, including changing demand for the Group’s products due to
shifts in policy, regulation (including carbon pricing mechanisms), legal, technological,
market, customer or societal responses to climate change.
The Group’s risk analysis indicates that the physical impacts of climate change are unlikely
to have a significant impact on our impairment testing, with our operations typically
located in regions that face relatively low physical challenges from climate change.
Our commitment to better climate-related disclosures can be seen in our TCFD report
on pages 59 to 66.
The impact of the transition to a lower carbon economy could be more significant. Breedon
is committed to net zero by 2050 as well as to the manufacture of cement at our two well-
invested cement plants; however, to achieve net zero will require a significant reduction in
our carbon emissions.
As set out in more detail in our Sustainability report, we have committed to SBTi aligned
carbon reduction targets following the 1.50C warming pathway. By 2030 we aim to achieve a
23.3% reduction in absolute gross scope 1 and 2 GHG emissions, and scope 3 emissions from
purchased cement and clinker from a 2022 base year. Our long term SBTi target commits
to reducing our absolute gross scope 1, 2 and 3 GHG emissions 95% by 2050 from the 2022
base year.
We are taking near-term actions based on existing technologies to move towards this
objective. In addition the Group is working with governments, industry, academia and
the GCCA to explore potential routes to further decarbonisation, including carbon capture
technologies. However these are not yet proven at scale.
The cash flows associated with our near-term plans are incorporated into our impairment
testing along with our best estimate of the longer term impacts associated with the
transition to net zero. However, it is not possible to accurately quantify these in full, nor
longer term changes in consumer behaviour or how demand for cement might be
impacted by price increases needed to recover these costs.
In conducting the impairment tests, we have assumed that future cement volumes remain
broadly in line with current levels and that increased costs, including carbon costs and
increased capital investment are recovered through pricing, consistent with our historic
experience and that no scalable substitute for concrete emerges in the near term. As the
cost of transition to net zero and the consequent impact on end-market demand becomes
clearer, these judgements will need to be refined and it is possible that this may result
in future impairment charges.
The directors are aware of the evolving risks attached to climate change and will
regularly assess these risks against estimates made in future value-in-use assessments.
They continue to view future impairment charges as unlikely at the date of this report.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
180
Strategic report Governance Financial statements Additional information
Investment in associate and joint ventures
10
The entities contributing to the Group’s financial results are listed on pages 207 to 209.
The Group equity accounts for investments in its associate and joint ventures.
Associate
£m
Joint ventures
£m
Total
£m
Carrying value
At 1 January 2023
5.7
8.0
13.7
Share of profit of associate and joint ventures
0.2
2.4
2.6
Dividends received
(0.4)
(1.4)
(1.8)
At 31 December 2023
5.5
9.0
14.5
Share of profit of associate and joint ventures
1.3
2.2
3.5
Dividends received
(1.8)
(1.2)
(3.0)
At 31 December 2024
5.0
10.0
15.0
Summary financial information of associate and joint ventures
2024
2023
Associate
£m
Joint ventures
£m
Associate
£m
Joint ventures
£m
Non-current assets
18.5
15.4
19.2
15.7
Current assets
37.6
19.4
41.6
21.3
Current liabilities
(35.9)
(22.0)
(37.0)
(23.3)
Non-current liabilities
(5.9)
(1.1)
(8.0)
(4.1)
Net assets
14.3
11.7
15.8
9.6
Revenue
199.0
109.9
161.6
125.8
Profit for the year
3.8
4.2
0.4
5.0
The table above shows the results and balances of the associate and joint ventures.
Included within the consolidated results of the Group is the share of profit of the associate
and joint ventures, as disclosed in the consolidated income statement.
Deferred tax
11
2024
1 January
2024
£m
Acquisitions
(note 25)
£m
Recognised
in income
£m
Recognised
in equity
£m
Translation
adjustments
£m
31 December
2024
£m
Property, plant
and equipment
(103.3)
(6.3)
(15.7)
–
0.6
(124.7)
Intangible assets
(9.9)
0.2
(1.2)
–
0.2
(10.7)
Tax losses
0.7
–
6.2
–
(0.6)
6.3
Share-based payments
0.9
–
0.6
0.3
–
1.8
Working capital
and provisions
19.6
–
3.4
–
0.1
23.1
(92.0)
(6.1)
(6.7)
0.3
0.3
(104.2)
2023
1 January
2023
£m
Acquisitions
(note 25)
£m
Recognised
in income
£m
Recognised
in equity
£m
Translation
adjustments
£m
31 December
2023
£m
Property, plant
and equipment
(95.7)
(2.3)
(5.7)
–
0.4
(103.3)
Intangible assets
(10.5)
(0.9)
1.3
–
0.2
(9.9)
Derivatives
–
–
(0.1)
0.1
–
–
Tax losses
0.9
–
(0.2)
–
–
0.7
Share-based payments
0.7
–
0.3
(0.1)
–
0.9
Working capital
and provisions
15.6
–
4.0
–
–
19.6
(89.0)
(3.2)
(0.4)
–
0.6
(92.0)
There are no unrecognised deferred tax assets or liabilities.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
181
Strategic report Governance Financial statements Additional information
Inventories
12
2024
£m
2023
£m
Raw materials and consumables
59.5
49.8
Work in progress
11.2
9.8
Finished goods and goods for resale
65.0
60.5
135.7
120.1
Inventories (being directly attributable costs of production) of £982.7m (2023: £928.7m)
have been expensed in the year.
Emission Trading Scheme assets are presented within finished goods and goods for resale.
Trade and other receivables
13
2024
£m
2023
£m
Trade receivables
198.3
185.1
Amounts due from associate and joint ventures (note 22)
2.4
6.1
Derivative assets
0.3
–
Contract assets
17.4
20.1
Other receivables and prepayments
42.6
17.5
261.0
228.8
2024
£m
2023
£m
Analysed as
Current
261.0
227.9
Non-current
–
0.9
261.0
228.8
The nature of contract assets has not changed materially during the reporting period.
Interest-bearing loans and borrowings
14
Net Debt
2024
£m
2023
£m
Cash and cash equivalents
28.9
126.9
Current borrowings
(8.7)
(8.1)
Non-current borrowings
(425.5)
(288.7)
Net Debt
(405.3)
(169.9)
IFRS 16 lease liabilities
48.7
48.0
Net Debt (excluding IFRS 16)
(356.6)
(121.9)
Analysis of borrowings between current and non-current
2024
£m
2023
£m
Lease liabilities
8.7
8.1
Current borrowings
8.7
8.1
Bank and USPP debt
385.5
248.8
Lease liabilities
40.0
39.9
Non-current borrowings
425.5
288.7
During the year, the Group completed the refinancing of its RCF, increasing the facility size
from £350m to £400m and retaining the option of a further £100m accordion. The amended
facility secures access to longer-term finance, running for an initial four-year period to at least
July 2028, and offers an incremental reduction in ongoing debt service costs. The Group’s
borrowing facilities also comprise a £250m USPP.
Interest on the RCF is calculated as a margin referenced to the Group’s Covenant Leverage
plus SONIA, SOFR or EURIBOR according to the currency of borrowing. Interest on the
RCF was charged in the period at margins of between 1.65% and 1.75%.
The USPP was issued in 2021 with an average fixed coupon of approximately 2% and
comprises £170m sterling and £80m drawn in euro, with a maturity profile between
2028 and 2036.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
182
Strategic report Governance Financial statements Additional information
Interest-bearing loans and borrowings continued
14
Fees and expenses incurred in connection with the refinancing amounted to £2.3m and
will be amortised over the amended life of the facility. In line with IFRS 9, the refinancing
has been treated as an extinguishment of the previous RCF. Prepaid fees of £1.3m, which
had been held on the balance sheet in relation to the old facility, have been expensed
to the income statement during 2024 as a non-underlying interest expense.
Borrowing facilities are subject to leverage and interest cover covenants which are tested
half-yearly. The Group remained fully compliant with all covenants during the year.
Reconciliation of cash flow movement to movement in Net Debt
2024
£m
2023
£m
For the year ended 31 December
Net (decrease)/increase in cash and cash equivalents
(97.5)
24.9
Foreign exchange differences – cash and cash equivalents
(0.5)
0.3
Net movement in cash and cash equivalents
(98.0)
25.2
Net cash flow movements in debt financing
(44.0)
9.7
Non-cash movements
Net of lease additions and disposals
(8.6)
(6.4)
Amortisation of prepaid bank arrangement fee
(2.2)
(1.1)
Debt acquired via acquisitions (note 25)
(87.8)
(1.1)
Foreign exchange differences – interest-bearing loans and borrowings
5.2
1.5
(Increase)/decrease in Net Debt in the year
(235.4)
27.8
Net Debt as at 1 January
(169.9)
(197.7)
Net Debt as at 31 December
(405.3)
(169.9)
Trade and other payables
15
2024
£m
2023
£m
Trade payables
151.7
145.2
Contract liabilities
11.5
12.1
Deferred consideration (note 25)
6.4
3.0
Derivative liabilities
–
0.3
Other payables and accrued expenses
91.4
99.9
Other taxation and social security
22.6
18.1
283.6
278.6
The nature of contract liabilities has not changed significantly during the reporting period.
Brought forward contract liabilities of £12.1m have all been recognised in revenue during
the year.
Provisions
16
Restoration
£m
Other
£m
Total
£m
At 1 January 2023
84.7
1.3
86.0
Translation adjustment
(0.1)
–
(0.1)
Utilised during the year
(2.6)
–
(2.6)
Charged to income statement
9.1
2.0
11.1
Amounts arising from business combinations
0.3
–
0.3
Change to capitalised provisions (note 8)
(3.8)
–
(3.8)
Unwinding of discount
3.7
–
3.7
At 31 December 2023
91.3
3.3
94.6
Translation adjustment
(0.4)
–
(0.4)
Utilised during the year
(3.1)
–
(3.1)
Charged to income statement
0.1
–
0.1
Amounts arising from business combinations (note 25)
3.5
19.0
22.5
Change to capitalised provisions (note 8)
3.3
–
3.3
Unwinding of discount
4.4
–
4.4
At 31 December 2024
99.1
22.3
121.4
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
183
Strategic report Governance Financial statements Additional information
Provisions continued
16
2024
£m
2023
£m
Analysed as
Current
30.0
8.8
Non-current
91.4
85.8
121.4
94.6
Restoration provisions principally comprise provisions for the cost of decommissioning and
restoring sites. The obligation is calculated on a site-by-site basis and is subject to regular
reviews which utilise external data and expertise. Each obligation is discounted to reflect
the period over which it is expected to be settled which, on average, is around 10 years.
Nominal discount rates used have been derived using UK, Irish and US Gilt rates.
Other provisions primarily comprises amounts arising on the acquisition of BMC.
Contained within this balance is a contingent liability of £10.0m for which the Group is fully
indemnified, with a corresponding indemnification asset recognised within trade and other
receivables. For more details see note 25.
Capital, reserves and dividends
17
Share capital
All shares issued by Breedon are ordinary shares which have a par value of £0.01 and are
fully paid. The Company has no limit to the number of shares which may be issued.
The holders of ordinary shares are entitled to receive dividends as declared and are entitled
to one vote per share at meetings of the Company.
Movements during 2024:
The Company issued 0.5 million shares for cash raising £1.3m in connection with the
exercise of certain savings-related share options, with £1.3m recognised as share premium.
The Company issued 0.3 million shares for non-cash consideration of 1.0p per share,
satisfied through the capitalisation of retained earnings, in connection with the vesting
of awards under the Performance Share Plans (note 18).
In addition, 3.2m of ordinary shares were issued to the vendor of BMC, with £12.2m being
recognised within the merger reserve.
Number of ordinary shares (m)
2024
Issued ordinary shares at beginning of year
339.7
Issued in connection with:
Exercise of savings-related share options
0.5
Issued on acquisition of BMC (note 25)
3.2
Vesting of Performance Share Plan awards
0.3
As at 31 December 2024
343.7
Movements during 2023:
Corporate Reorganisation
In connection with the Group’s move from AIM to the Premium Segment of the Main Market
of the London Stock Exchange during the first half of 2023, a new holding company for
the Group was established (‘New Breedon’), which replaced the previous parent company
of the Group, Breedon Group Limited (‘Old Breedon’). New Breedon obtained control of
the Group on 17 May 2023 via a court approved scheme of arrangement (the ‘Corporate
Reorganisation’). Under the scheme arrangement, shares were issued in exchange for
all the shares in Old Breedon at a ratio of one share in New Breedon to five shares in Old
Breedon. The difference between Stated Capital and Share Capital was recognised
as a Merger Reserve.
Other movements during 2023
The Company issued 0.2 million shares for cash raising £0.7m in connection with the
exercise of certain savings-related share options, with £0.7m recognised as share premium.
The company issued 0.6 million shares for non-cash consideration of 1.0p per share,
satisfied through the capitalisation of retained earnings, in connection with the vesting
of awards under the Performance Share Plans (note 18).
Number of ordinary shares (m)
2023
Issued ordinary shares at beginning of year
1,694.4
5:1 share consolidation
(1,355.5)
Issued ordinary shares after corporate reorganisation
338.9
Issued in connection with:
Exercise of savings-related share options
0.2
Vesting of Performance Share Plan awards
0.6
As at 31 December 2023
339.7
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
184
Strategic report Governance Financial statements Additional information
Capital, reserves and dividends continued
17
Other reserves
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the
fair value of cash flow hedged instruments related to hedged transactions which have not
yet occurred.
Merger reserve
The merger reserve was created as part of the Corporate Reorganisation and represents
the difference between the Stated Capital reported by Old Breedon and the Share Capital
of New Breedon.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the
translation of the financial statements of foreign operations as well as from the translation
of the liabilities that hedge the Group’s net investment in foreign operations.
Dividends
Paid in year
Dividends paid comprise the following elements:
2024
£m
2023
£m
Dividends paid to Breedon Group plc shareholders
48.1
37.3
Dividends paid to non-controlling interests in consolidated subsidiaries
0.2
0.3
Total dividends paid
48.3
37.6
Amounts recognised as dividends paid to Breedon Group plc shareholders in the year
comprised £48.1m, being £32.0m in respect of the final dividend of the year ended
31 December 2023 of 9.5p per share and £16.1m in respect of an interim dividend of 4.5p
per share for the year ended 31 December 2024.
Dividends totalling £0.2m have been paid to non-controlling interests relating to
consolidated subsidiaries accounted for using the anticipated acquisition method which
have been recognised directly in equity. No dividend has been paid to non-controlling
interests relating to other consolidated subsidiaries.
Future dividends
The directors have proposed a final dividend in respect of the financial year ended
31 December 2024 of 10.0p per share which will absorb an estimated £34.4m of
shareholders’ funds. Assuming the final dividend is approved by shareholders at the Annual
General Meeting of the Company to be held on 29 April 2025, the final dividend will be paid on
16 May 2025 to shareholders who are on the register at the close of business on 4 April 2025.
Share-based payments
18
Share-based payments to employees include PSP awards made to senior executives
and voluntary participation in savings-related share option schemes (‘Sharesave
Schemes’) for the wider workforce.
Under the PSP, awards may be granted to key senior employees as either a conditional
award or as a nil paid (or nominal) cost award. Awards will normally vest three years
after grant subject to satisfaction of the relevant performance conditions; for certain
employees these may be subject to an additional two-year holding period.
Sharesave Schemes are open to all eligible employees both in the UK and RoI.
These schemes have a term of either three or five years.
Further details of these options and awards, as well as the interests of the directors
in both the PSP and the Breedon Sharesave Schemes, can be found in the Directors’
Remuneration report from pages 129 to 146.
Movements in outstanding options and awards
Share options (millions)
Outstanding
at 1 Jan 2024
Granted
Vested
Lapsed
Outstanding
at 31 Dec
2024
PSP – non-market based performance
conditions
1.4
1.0
(0.2)
(0.2)
2.0
PSP – market based performance
conditions
1.1
0.7
(0.2)
(0.2)
1.4
Sharesave Schemes
4.3
1.3
(0.4)
(1.1)
4.1
6.8
3.0
(0.8)
(1.5)
7.5
All PSP share awards have an exercise price of nil. The exercise price for outstanding
Sharesave Schemes at 31 December 2024 is between £3.02 and £3.90.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
185
Strategic report Governance Financial statements Additional information
Share-based payments continued
18
Options granted during the year
The fair value of options and awards granted during the year, and the key inputs used
to derive the fair value, were as follows:
PSP – non-market
based performance
conditions
PSP – market based
performance
conditions
Sharesave
Fair value at grant date
£3.59
£2.19
£0.86 – £1.12
Valuation model
Black–Scholes
Stochastic
Black–Scholes
Exercise price
–
–
£3.16 – £3.46
Share price at grant date
£3.59
£3.59
£3.88
Holding period
0–2 years
0–2 years
–
Expected volatility
28–29%
28–29%
28–31%
Risk-free rate
4.53%
4.53%
4.00–4.16%
Vesting period
3 years
3 years
3–5 years
Expected dividend yield
n/a
n/a
3.48%
Where share awards contain mechanisms to compensate for the dilutive impact of
dividends paid during the vesting period, no dividend yield has been incorporated into
the calculation of the fair value of those awards.
Expected volatility has been calculated on share price movements compared to historic
option values, over the period consistent with the holding period prior to the date of grant.
Financial instruments
19
The Group has the following financial assets and liabilities:
2024
Book value
£m
Non-
financial
instruments
£m
Financial
instruments
£m
Financial assets
Trade and other receivables
261.0
13.9
247.1
Cash and cash equivalents
28.9
–
28.9
Total financial assets
289.9
13.9
276.0
Financial liabilities
Borrowings
(385.5)
2.8
(388.3)
Lease liabilities
(48.7)
–
(48.7)
Trade and other payables
(283.6)
(34.1)
(249.5)
Total financial liabilities
(717.8)
(31.3)
(686.5)
2023
Book value
£m
Non-financial
instruments
£m
Financial
instruments
£m
Financial assets
Trade and other receivables
228.8
10.9
217.9
Cash and cash equivalents
126.9
–
126.9
Total financial assets
355.7
10.9
344.8
Financial liabilities
Borrowings
(248.8)
2.7
(251.5)
Lease liabilities
(48.0)
–
(48.0)
Trade and other payables
(278.6)
(30.2)
(248.4)
Total financial liabilities
(575.4)
(27.5)
(547.9)
The Group has exposure to the following risks from its use of financial instruments:
Credit risk
Foreign exchange risk
Liquidity risk
Interest rate risk
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
186
Strategic report Governance Financial statements Additional information
Financial instruments continued
19
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet their contractual obligations. Credit risk arises principally from
the Group’s cash and cash equivalents held with financial counterparties and the Group’s
receivables due from customers.
Management has a credit policy in place and exposure to credit risk is monitored on an
ongoing basis. At the reporting date there were no significant concentrations of customer
credit risk.
Credit risk associated with cash balances is managed and limited by transacting with
financial institutions with high-quality credit ratings.
Exposure to credit risk
The carrying amount of financial assets at the reporting date represents the maximum
credit exposure. The maximum exposure to credit risk at the reporting date was:
Carrying amount
2024
£m
2023
£m
Trade and other receivables
247.1
217.9
Cash and cash equivalents
28.9
126.9
276.0
344.8
The maximum exposure to credit risk for trade and other receivables by reportable
segment was:
Carrying amount
2024
£m
2023
£m
Great Britain
142.2
144.0
Ireland
34.6
39.7
United States
37.5
–
Cement
32.4
33.1
Central administration
0.4
1.1
247.1
217.9
Management considers that the credit quality of the various receivables is good in respect
of the amounts outstanding. The Group has no individually significant customers and the
majority of the Group’s customers are end-user customers. Credit insurance is in place to
cover the majority of the Group’s private sector UK and Ireland trade receivables, subject
to an aggregate first loss. The Group has fully provided for all its doubtful debt exposure.
The remaining credit risk is therefore considered to be low. Balances are only written off
when the Group has exhausted all options to recover the amounts receivable.
The ageing of trade and other receivables at the reporting date was:
2024
2023
Gross
£m
Impairment
£m
Net
£m
Gross
£m
Impairment
£m
Net
£m
Not past due
218.9
(3.9)
215.0
195.2
(2.3)
192.9
Past due
0-30 days
19.1
(0.6)
18.5
13.8
(0.9)
12.9
Past due
31-60 days
9.3
(0.7)
8.6
7.5
(1.2)
6.3
Past due
more than
60 days
8.4
(3.4)
5.0
8.3
(2.5)
5.8
255.7
(8.6)
247.1
224.8
(6.9)
217.9
Provisions for impairment of trade and other receivables are calculated on a lifetime
expected loss model in line with IFRS 9. The key inputs in determining the level of provision
are the historical level of bad debts experienced by the Group and ageing of outstanding
amounts. Movements during the year were as follows:
2024
£m
2023
£m
At 1 January
6.9
8.0
Charged to the consolidated income statement during the year
3.5
3.0
Business combination
1.0
–
Utilised during the year
(1.7)
(2.0)
Unused amounts released
(1.1)
(2.1)
At 31 December
8.6
6.9
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
187
Strategic report Governance Financial statements Additional information
Financial instruments continued
19
Foreign exchange risk
Transactional
The Group has limited transactional currency exposures arising on sales and purchases made
in currencies other than the functional currency of the entity making the sale or purchase.
Significant exposures which are deemed at least highly probable are matched where possible.
Translation
The Group has significant net assets denominated in euro and US dollars. The translation of
these balances into sterling for reporting purposes exposes the Group to foreign exchange
movements in the consolidated statement of financial position and consolidated income
statement, along with a corresponding impact on certain key performance indicators.
The Group’s strategy is to mitigate this risk through utilising Euro and US dollar borrowings
as a hedge against movements in the sterling value of euro and US dollar investments.
The level of this hedge is currently managed with the objective of mitigating the impact
of foreign exchange movements on Covenant Leverage.
Currency analysis and exchange rate sensitivity
Foreign currency financial assets and liabilities, translated into sterling at the closing rate,
are as follows:
2024
2023
Sterling
£m
Euro
£m
US dollar
£m
Total
£m
Sterling
£m
Euro
£m
Total
£m
Financial assets
Trade and other receivables
181.1
28.5
37.5
247.1
189.0
28.9
217.9
Cash and cash equivalents
15.9
11.4
1.6
28.9
121.2
5.7
126.9
Total financial assets
197.0
39.9
39.1
276.0
310.2
34.6
344.8
Financial liabilities
Borrowings
(180.0)
(156.5)
(51.8)
(388.3)
(170.0)
(81.5)
(251.5)
Lease liabilities
(47.3)
–
(1.4)
(48.7)
(47.9)
(0.1)
(48.0)
Trade and other payables
(204.9)
(33.3)
(11.3)
(249.5)
(208.1)
(40.3)
(248.4)
Total financial liabilities
(432.2)
(189.8)
(64.5)
(686.5)
(426.0)
(121.9)
(547.9)
Potential impact on profit
before taxation – gain/(loss)
10% increase in functional
currency
–
(1.3)
(0.9)
(2.2)
–
0.8
0.8
10% decrease in functional
currency
–
1.9
1.1
3.0
–
(1.0)
(1.0)
Potential impact on other
comprehensive income – gain/
(loss)
10% increase in functional
currency
–
13.6
2.3
15.9
–
7.1
7.1
10% decrease in functional
currency
–
(16.7)
(2.8)
(19.5)
–
(8.7)
(8.7)
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
188
Strategic report Governance Financial statements Additional information
Financial instruments continued
19
Significant exchange rates
The following significant exchange rates applied during the year:
2024
2023
Average rate
Year-end rate
Average rate
Year-end rate
Sterling/euro
1.18
1.21
1.15
1.15
Sterling/US dollar
1.29
1.26
1.24
1.27
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial resources to meet
obligations as they fall due. The Group manages liquidity risk by monitoring forecasts and
cash flows and negotiating appropriate bank facilities. The Group uses term and revolving
bank facilities and sufficient headroom is maintained above peak requirements to meet
unforeseen events.
The following are the contractual maturities of financial liabilities, including estimated
interest payments, assuming the current utilisation remains until the contract matures:
31 December 2024
Carrying
amount
£m
Contractual
cash flows
£m
Within
one year
£m
Between one
and five years
£m
More than
five years
£m
Non–derivative
financial liabilities
Revolving credit facility
– sterling
10.0
18.0
2.2
15.8
–
– euro
78.6
92.6
3.9
88.7
–
– US dollar
51.8
63.7
3.3
60.4
–
USPP loan notes
– sterling
170.0
203.6
4.0
40.3
159.3
– euro
77.9
83.2
0.9
42.3
40.0
Lease liabilities
48.7
74.9
9.0
23.3
42.6
Trade and other payables
249.5
249.5
249.5
–
–
686.5
785.5
272.8
270.8
241.9
31 December 2023
Carrying
amount
£m
Contractual
cash flows
£m
Within
one year
£m
Between one
and five years
£m
More than
five years
£m
Non–derivative
financial liabilities
Multi–currency revolving
credit facility
–
5.3
2.1
3.2
–
USPP loan notes
– sterling
170.0
207.5
4.0
40.8
162.7
– euro
81.5
88.0
1.0
44.6
42.4
Lease liabilities
48.0
72.1
9.0
23.0
40.1
Trade and other payables
248.4
248.4
248.4
–
–
547.9
621.3
264.5
111.6
245.2
Interest rate risk
The Group borrows at floating and fixed interest rates. At the reporting date the interest
rate profile of the Group’s interest-bearing financial instruments was:
2024
£m
2023
£m
Fixed rate instruments
Financial liabilities
(296.6)
(299.5)
Variable rate instruments
Financial assets
28.9
126.9
Financial liabilities
(140.4)
–
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value
through profit or loss. Therefore, a change in interest rates at the reporting date would not
affect profit or loss.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
189
Strategic report Governance Financial statements Additional information
Financial instruments continued
19
Cash flow sensitivity analysis for variable rate instruments
As at 31 December 2024, drawn borrowings on the USPP are fixed rate and as such, are
not exposed to interest rate fluctuations. The RCF is subject to variable interest rates.
An increase of 100 basis points in interest rates in respect of variable rate instruments at the
reporting date values would decrease profit for the year by £1.5m (2023: increase of £1.3m).
A decrease of 100 basis points would increase profit for the year by £1.5m (2023: decrease
of £1.3m). These analyses assume that all other variables remain constant.
Fair values versus carrying amounts
The directors consider that the carrying amounts recorded in the financial information
in respect of financial assets and liabilities, which are carried at amortised cost,
approximates to their fair values with the exception of the £247.9m of USPP loan note
liabilities which have an estimated fair value of £214.8m. This valuation is not based
on observable market data and is therefore valued as level 3 according to the definitions
below. Derivative financial assets and liabilities are carried at fair value. The different levels
have been defined as follows:
Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either as a direct price or indirectly derived from prices; and
Level 3 – inputs for the asset or liability that are not based on observable market data.
The fair value of the derivative financial assets and liabilities are based on bank valuations.
Capital management
The Board’s capital management policy is to maintain a strong balance sheet, providing
flexibility to pursue growth opportunities. The Board seeks to maintain a balance
between the higher returns that might be possible with higher levels of borrowing and
the advantages and security afforded by a sound capital position.
In maintaining the Group’s capital structure in line with these principles, the Board may
choose to adjust amounts paid as dividends to shareholders, issue new equity or dispose
of assets as required.
The financial covenants associated with the Group’s borrowings are a maximum leverage
ratio and a minimum interest cover. The Group complied with these financial covenants
throughout the financial year.
Leases
20
Right-of-use assets
Land and
buildings
£m
Plant,
equipment
and vehicles
£m
Total
£m
Cost
Balance at 1 January 2024
51.2
32.7
83.9
Acquired on business combinations (note 25)
1.2
–
1.2
Additions
8.3
0.3
8.6
Disposals and impairments
(0.9)
(3.4)
(4.3)
Balance at 31 December 2024
59.8
29.6
89.4
Depreciation
Balance at 1 January 2024
14.8
24.0
38.8
Charge for the year
4.0
4.1
8.1
Disposals and impairments
(0.6)
(3.4)
(4.0)
Balance at 31 December 2024
18.2
24.7
42.9
Net book value
At 31 December 2024
41.6
4.9
46.5
Cost
Balance at 1 January 2023
45.9
33.7
79.6
Acquired on business combinations (note 25)
–
0.2
0.2
Additions
5.5
0.9
6.4
Transfer to owned assets
–
(0.5)
(0.5)
Disposals and impairments
(0.2)
(1.6)
(1.8)
Balance at 31 December 2023
51.2
32.7
83.9
Depreciation
Balance at 1 January 2023
11.6
20.9
32.5
Charge for the year
3.4
4.7
8.1
Transfer to owned assets
–
(0.2)
(0.2)
Disposals and impairments
(0.2)
(1.4)
(1.6)
Balance at 31 December 2023
14.8
24.0
38.8
Net book value
At 31 December 2023
36.4
8.7
45.1
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
190
Strategic report Governance Financial statements Additional information
Leases continued
20
Lease liabilities are secured on the assets to which they relate and are payable as follows:
Minimum lease payments
2024
£m
2023
£m
Less than one year
9.0
9.0
Between one and five years
23.3
23.0
More than five years
42.6
40.1
74.9
72.1
The value of lease payments made during the year was £12.3m (2023: £10.4m).
Movements between owned and leased assets
Items transferred to owned assets represent leases where the liability has been fully repaid
in the normal course of business and legal ownership of the asset has transferred to the
Group. Where an underlying physical asset is purchased by the Group and this causes an
existing lease to end, this is presented as an addition to owned assets within note 8 and as
a disposal of a leased asset within this note.
Capital commitments
21
At 31 December 2024 the Group had commitments to purchase property, plant and
equipment for £13.7m (2023: £27.9m). These commitments are expected to be settled
during the course of 2025.
Related parties
22
During the year the Group supplied services and materials to, and purchased services and
materials from, its associate and joint ventures on an arm’s length basis. The Group had the
following transactions with these related parties during the year:
Sales
£m
Purchases
£m
Receivables
£m
Payables
£m
2024
BEAR Scotland
21.9
–
1.3
–
Other
6.0
2.4
1.1
0.1
27.9
2.4
2.4
0.1
2023
BEAR Scotland
21.0
–
1.6
–
Other
12.0
2.5
4.5
–
33.0
2.5
6.1
–
Parent and ultimate controlling party
The Company’s shares are traded on the Premium Segment of the Main Market of the
London Stock Exchange. The Company’s shareholder base is monitored on a regular basis.
There is no controlling party and the Company does not have a parent.
Transactions with directors and directors’ shareholdings
Details of transactions with directors, directors’ shareholdings and outstanding share
options and awards are given in the Directors’ Remuneration report on pages 129 to 146.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
191
Strategic report Governance Financial statements Additional information
Earnings per share
23
Basic earnings per share amounts are calculated by dividing profit for the year attributable
to Breedon Group shareholders by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing profit for the year
attributable to Breedon Group shareholders by the weighted average number of ordinary
shares outstanding during the year plus the weighted average number of ordinary shares
that would be issued on the conversion of all the potential dilutive ordinary shares into
ordinary shares.
Calculations of these measures and reconciliations to related alternative performance
measures are as follows:
Basic EPS to Adjusted Underlying Basic EPS
2024
2023
Earnings
£m
Shares
millions
EPS
pence
Earnings
£m
Shares
millions
EPS
pence
Basic EPS
96.2
342.754
28.1
105.5
339.148
31.1
Adjustments to
earnings
Earnings impact of
change in deferred
tax rate (note 7)
–
–
–
0.7
–
0.2
Non-underlying
items (note 3)
21.8
–
6.3
9.1
–
2.7
Adjusted Underlying
Basic EPS
118.0
342.754
34.4
115.3
339.148
34.0
Diluted EPS to Adjusted Underlying Diluted EPS
2024
2023
Earnings
£m
Shares
millions
EPS
pence
Earnings
£m
Shares
millions
EPS
pence
Diluted EPS
96.2
343.738
28.0
105.5
339.849
31.0
Adjustments to
earnings
Earnings impact of
change in deferred
tax rate (note 7)
–
–
–
0.7
–
0.2
Non-underlying
items (note 3)
21.8
–
6.3
9.1
–
2.7
Adjusted Underlying
Diluted EPS
118.0
343.738
34.3
115.3
339.849
33.9
Dilutive items in both the current and prior year related to share-based payments. Details of
the Group’s share schemes, which may become dilutive in the future, are set out in note 18.
Contingent liabilities
24
The Group has guaranteed its share of the banking facilities of BEAR Scotland. The maximum
liability at 31 December 2024 amounted to £2.9m (2023: £2.9m). This has been accounted
for as a Financial Guarantee Contract in line with IFRS 9.
The Group has guaranteed the performance of the BEAR Scotland contracts in respect
of the maintenance of certain trunk roads in the North-West and South-East of Scotland
and in respect of the M80 operating and maintenance contract. The Group has also
guaranteed the performance of the Breedon Colas contract in respect of Lot 1 of the
North Super Region of the Pavement Delivery Framework issued by National Highways.
These guarantees have been accounted for as insurance contracts in line with IFRS 17.
For the year ended 31 December 2024, the subsidiary companies listed below are exempt
from the requirements of the Companies Act 2006 relating to the audit of individual
financial statements by virtue of section 479A. As a result, the Company guarantees all
outstanding liabilities to which the subsidiary companies are subject.
Name of undertaking
Country of incorporation or
registration
Company registration number
Breedon Midco Limited
England and Wales
14777332
Minster Surfacing Limited
England and Wales
04084446
Eco-Asphalt Supplies Limited
England and Wales
13450225
Alliance Recycling (UK) Ltd
England and Wales
09418245
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
192
Strategic report Governance Financial statements Additional information
Acquisitions
25
Current year acquisitions
The Group completed four acquisitions in the period, being BMC Enterprises Inc,
Eco-Asphalt Supplies Limited, Phoenix Surfacing Limited and Building Products Inc.
BMC Enterprises Inc. (BMC)
The Group completed the acquisition of BMC, a supplier of ready-mixed concrete,
aggregates and building products on 6 March 2024, acquiring 100% of the share capital.
The provisional fair values in respect of the identifiable assets acquired and liabilities
assumed are set out below:
Provisional
fair value on
acquisition
£m
Intangible assets
109.9
Property, plant and equipment
81.4
Right-of-use assets
1.2
Inventories
7.2
Trade and other receivables
39.1
Cash and cash equivalents
5.5
Trade and other payables
(12.8)
Provisions
(22.4)
Borrowings
(85.9)
Deferred tax liabilities
(4.5)
Total acquired net assets
118.7
Cash consideration on completion
155.6
Post-completion payment
0.2
Equity consideration
12.2
Total consideration payable
168.0
Goodwill arising
49.3
Equity consideration
Equity consideration comprises 3,199,915 ordinary shares issued to the vendor, valued
based on the market price of those shares at the date of acquisition.
Fair value adjustments
Fair value adjustments are always considered to be provisional at the first reporting date
after the acquisition and are inclusive of adjustments to:
recognise intangible assets, including the value of acquired customer relationships and
non-compete agreements. The value of these assets were assessed with the support
of a third party corporate finance specialist using an excess earnings method, based on
estimated cash flows (see accounting policies, on page 169);
revalue certain items of property, plant and equipment, including mineral reserves and
resources, to reflect the fair value at date of acquisition;
working capital accounts to reflect fair value ; and
restoration provisions to reflect costs to comply with environmental and other
legislation.
The goodwill arising represents the strategic geographic location of assets acquired, the
potential for future growth and the skills of the existing workforce and management team.
Goodwill is deductible for tax purposes.
Since the Group’s interim results were published, goodwill has increased by £5.7m, with
the largest adjustment being £4.5m in relation to deferred tax following agreement of the
completion accounts.
Included within provisions is a contingent liability for which the Group is fully indemnified,
with a corresponding asset recognised within trade and other receivables. The range of
outcomes in respect of the contingent liability is expected to be either nil or £10.0m.
Other current year acquisitions
The directors consider the remaining acquisitions completed in the year, being 100% of the
share capital of Eco-Asphalt Supplies Limited (31 January 2024), 80% of the share capital
of Phoenix Surfacing Limited (1 April 2024), and the trade and assets of Building Products
Inc. (18 October 2024) to be individually immaterial, but material in aggregate.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
193
Strategic report Governance Financial statements Additional information
Acquisitions continued
25
The combined provisional fair values in respect of the identifiable assets acquired and
liabilities assumed are set out below:
Provisional
fair value on
acquisition
£m
Intangible assets
7.8
Property, plant and equipment
6.4
Inventories
0.9
Trade and other receivables
5.0
Cash and cash equivalents
1.8
Trade and other payables
(5.6)
Provisions
(0.1)
Borrowings
(1.9)
Deferred tax liabilities
(1.5)
Total acquired net assets
12.8
Cash consideration on completion
25.3
Deferred consideration
3.4
Total consideration payable
28.7
Goodwill arising
15.9
Consideration
Deferred consideration includes £2.6m relating to a put liability and has been accounted for
using the anticipated acquisition method.
Fair value adjustments
The fair value adjustments primarily comprised:
intangible assets, including the value of acquired customer relationships;
impairment of property, plant and equipment, and
deferred tax balances.
The goodwill arising represents expected synergies, the potential for future growth,
and the skills of the existing workforce.
Impact of current year acquisitions
Income statement
During the period, the BMC acquisition (including Building Products which was acquired 18
October 2024), contributed revenues of £132.5m, Underlying EBIT of £16.4m and profit before
interest and tax of £13.8m to the results of the Group.
Other current year acquisitions contributed revenues of £22.9m, Underlying EBIT of £0.8m
and profit before tax of £0.8m to the results of the Group.
Had these acquisitions occurred on 1 January 2024, the results of the Group for the year ended
31 December 2024 would have shown revenue of £1,612.5m, Underlying EBIT of £176.0m and
profit before tax of £127.7m.
Cash flow
The cash flow impact of acquisitions in the year can be summarised as follows:
£m
Consideration – cash
180.9
Cash and cash equivalents acquired
(7.3)
Net cash consideration shown in the consolidated statement of cash flows
173.6
Acquisition costs
The Group incurred acquisition related costs of £10.2m (2023: £0.9m) which included
external professional fees in relation to these acquisitions. These are presented as non-
underlying operating costs (note 3).
Prior year acquisitions
The Group acquired three individually immaterial acquisitions in the prior year, being
Broome Brothers (Doncaster) Limited (1 May 2023), Robinson Quarry Masters Limited
(15 May 2023) and 80% of the share capital of Minster Surfacing Limited (5 May 2023) for
a total consideration of £27.1m. No additional adjustments have been made in respect of
these acquisitions within the measurement period and the provisional values reported in
the prior year are now considered final.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
194
Strategic report Governance Financial statements Additional information
Accounting estimates and judgements
26
Preparation of financial information requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and their associated underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate is
revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical
judgements in applying accounting policies that have the most significant effect on the
amounts recognised in the financial information are described below.
Accounting estimates
Restoration provisions
Restoration provisions principally comprise provisions for the cost of decommissioning and
restoring sites. This is an inherently subjective calculation and there is significant estimation
required to determine the future cost of the approved restoration scheme.
Estimated future cash flows have been determined on a site by site basis based on the
present day cost of restoration. An increase in these gross cash flow assumptions
of 10% would result in an increase of the restoration liability of £9.4m. The estimated cost
of restoration is subject to both internal and external expert evaluation in order to mitigate
the risk of material error.
These cash flows are inflated to the point that the cash flow is expected to occur and
discounted, at a rate which reflects both the time value of money and the risk free rate,
in order to derive the net present value of the obligation as at the balance sheet date.
The discount and long-term inflation rates used in this calculation are between 2.4-4.8%
and 2.6-3.6% respectively. A 100bps increase in discount rate or decrease in the long-term
inflation rate would result in a decrease in the value of restoration provisions by £7.8m
or £8.2m respectively. A 100bps decrease in discount rate or increase in the long-term
inflation rate would result in an increase in the value of restoration provisions by £10.7m
or £11.0m respectively.
Restoration dates have been determined as the earlier of the date at which reserves are
expected to be exhausted or planning permission on reserves is expected to expire.
Reasonably possible changes in restoration dates would not have a material impact
on the financial statements, and management do not consider restoration dates to be
significant estimates.
Accounting judgements
Impact of climate change on impairment review
The Group is committed to achieving net zero by 2050, as well as to the manufacture of
cement at its two well-invested cement plants; however, to achieve net zero will require a
significant reduction in carbon emissions.
The cash flows used in our impairment review are underpinned by a judgement that future
cement volumes remain broadly in line with current levels and that increased costs to
achieve net zero will be recovered through market acceptance of increased pricing.
See note 9 for additional detail and further information on how the impact of climate
change has been considered through the impairment testing.
Reconciliation to non-GAAP measures
27
Non-GAAP performance measures are used throughout this Annual Report and these
consolidated financial statements. This note provides a reconciliation between these
alternative performance measures to the most directly related statutory measures.
These measures are not a substitute for, or superior to, any IFRS measures of performance.
Management believe these measures allow an understanding of the Group’s underlying
business performance. They are defined as:
Underlying EBIT – statutory (reported) profit from operations excluding non-underlying
items. Non-underlying items are disclosed in note 3. Management considers underlying
EBIT to be key measure in understanding the underlying profit of the Group at this level.
Free Cash Flow (FCF) – calculated as statutory (reported) net cash flow from operating
activities and net cash used in investing activities, adjusted for the cash impact of major
capital projects in the year, cash associated with acquisition of businesses and the cash
impact of non-underlying items. FCF represents the cash that the Group generates after
spending the money required to maintain or expand its asset base, thus is useful for
Management in assessing liquidity.
Net Debt – Net Debt is calculated as the net of cash and cash equivalents and interest-
bearing loans and borrowings (both current and non-current). It is a measure of the Group’s
net indebtedness that provides an indicator of the overall balance sheet strength. Net Debt
is also shown on a pre-IFRS 16 basis as the banking covenants are calculated on a
pre-IFRS 16 basis.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
195
Strategic report Governance Financial statements Additional information
Reconciliation to non-GAAP measures continued
27
Reconciliation of earnings based alternative performance measures
2024
Great
Britain
£m
Ireland
£m
United
States
£m
Cement
£m
Central
administration
and
eliminations
£m
Share of
profit of
associate
and joint
ventures
£m
Total
£m
Revenue
997.4
233.4
132.5
309.2
(96.2)
–
1,576.3
Profit from operations
149.6
Non-underlying
items (note 3)
24.1
Underlying EBIT
78.5
33.6
16.4
58.5
(16.8)
3.5
173.7
Underlying
EBIT margin
7.9%
14.4%
12.4%
18.9%
11.0%
Underlying EBIT
78.5
33.6
16.4
58.5
(16.8)
3.5
173.7
Share of profit
of associate and
joint ventures
–
–
–
–
–
(3.5)
(3.5)
Depreciation and
mineral depletion
53.4
7.9
8.4
29.7
0.3
–
99.7
Underlying EBITDA
131.9
41.5
24.8
88.2
(16.5)
–
269.9
Underlying EBITDA
margin
13.2%
17.8%
18.7%
28.5%
17.1%
2023
Great
Britain
£m
Ireland
£m
Cement
£m
Central
administration
and
eliminations
£m
Share of
profit of
associate
and joint
ventures
£m
Total
£m
Revenue
1,033.8
235.5
331.2
(113.0)
–
1,487.5
Profit from operations
145.7
Non-underlying
items (note 3)
10.5
Underlying EBIT
86.4
29.0
55.2
(17.0)
2.6
156.2
Underlying
EBIT margin
8.4%
12.3%
16.7%
10.5%
Underlying EBIT
86.4
29.0
55.2
(17.0)
2.6
156.2
Share of profit
of associate and
joint ventures
–
–
–
–
(2.6)
(2.6)
Depreciation and
mineral depletion
52.2
6.9
29.3
0.3
–
88.7
Underlying EBITDA
138.6
35.9
84.5
(16.7)
–
242.3
Underlying EBITDA
margin
13.4%
15.2%
25.5%
16.3%
Like-for-like alternative performance measures
There are a number of references throughout this report to like-for-like revenue, earnings
and volumes. Like-for-like numbers exclude the impact of acquisitions and disposals
and have been used alongside non-like-for-like measures to help the Group better
communicate performance in the year when compared to previous reporting periods.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
196
Strategic report Governance Financial statements Additional information
Notes to the consolidated financial statements
Reconciliation to non-GAAP measures continued
27
Covenant Leverage
Covenant Leverage is defined as the ratio of Underlying EBITDA to Net Debt, with both
Underlying EBITDA and Net Debt adjusted to reflect the material items which are adjusted
by the Group and its lenders in determining leverage for the purpose of assessing covenant
compliance and, in the case of our bank facilities, the margin payable on overdrawn
borrowings. In both the current and prior year, the only material adjusting item was the
impact of IFRS 16 – Leases.
2024
£m
2023
£m
Underlying EBITDA
269.9
242.3
Impact of IFRS 16
(11.0)
(10.3)
Underlying EBITDA for covenants
258.9
232.0
Net Debt (excluding IFRS 16) (note 14)
356.6
121.9
Covenant Leverage
1.4x
0.5x
Free Cash Flow conversion
Free Cash Flow has been reconciled to net cash from operating activities, which is the most
relevant GAAP measure.
2024
£m
2023
£m
Net cash from operating activities
201.7
191.9
Net cash used in investing activities
(296.2)
(120.4)
Cash impact of material capital projects
23.4
-
Acquisition of businesses
173.6
18.8
Cash impact of non-underlying items
11.6
4.5
Free Cash Flow
114.1
94.8
Underlying EBITDA
269.9
242.3
Free Cash Flow conversion
42%
39%
The cash impact of material capital projects comprised three projects consisting of the
ARM and primary crusher projects at Hope and the solar farm at Kinnegad.
Return on invested capital
2024
£m
2023
£m
Underlying EBIT
173.7
156.2
Underlying effective tax rate (note 7)
21.7%
20.4%
Taxation at the Group’s underlying effective rate
(37.7)
(31.9)
Underlying earnings before interest
136.0
124.3
Net assets
1,170.6
1,110.7
Net Debt (note 14)
405.3
169.9
Invested capital at 31 December
1,575.9
1,280.6
Average invested capital1
1,428.3
1,261.1
Adjustment for timing of significant acquisition2
83.3
–
Adjusted average invested capital
1,511.6
–
Return on invested capital3
9.0%
9.9%
1 Average invested capital is calculated by taking the average of the opening invested capital at 1 January and the
closing invested capital at 31 December. Opening invested capital at 1 January 2023 was £1,241.5m.
2 This adjustment is made to the average of opening and closing invested capital to more accurately reflect the
impact of the timing of the acquisition of BMC Enterprises which completed on 6 March 2024. See note 25.
3 Return on invested capital is calculated as Underlying earnings before interest for the previous twelve months,
divided by Adjusted average invested capital for the year.
Breedon Group plc Annual Report and Accounts 2024
197
Strategic report Governance Financial statements Additional information
Post balance sheet events
28
Acquisition of Lionmark
On 5 March 2025 the Group announced the proposed acquisition of Lionmark Construction
Companies LLC, a construction materials and surfacing business headquartered in
St Louis, Missouri.
The acquisition is expected to complete by 7 March 2025. Consideration payable is based
on an enterprise value of US$237.5m, of which US$225.6m is payable in cash and the
remaining US$11.9m through the issue of newly created shares in Breedon Group plc.
The consideration is subject to customary closing adjustments and retentions. The cash
element of the consideration will be satisfied through a drawdown on the Group’s existing
borrowing facilities.
Additional liquidity is provided by €95m of additional notes which were issued under the
Group’s USPP programme on 26 February 2025. The notes have maturities of between five
and seven years, with a fixed interest rate of approximately 4%.
The acquisition is expected to have a material impact on the Group’s results for the year
ended 31 December 2025. Given the proximity of the acquisition date to the date on which
the Financial Statements were authorised, the Group is not yet able to provide certain
disclosures required by IFRS 3, including the initial fair values of assets and liabilities
acquired, which have not yet been ascertained. These disclosures will be presented as part
of the Group’s Interim Statement made up to 30 June 2025.
Notes to the consolidated financial statements
Breedon Group plc Annual Report and Accounts 2024
198
Strategic report Governance Financial statements Additional information
Company balance sheet
»200
Company statement of changes in equity
»201
Notes to the Company financial statements
»202
Subsidiaries
»207
Breedon Group plc Annual Report and Accounts 2024
199
Strategic report Governance Financial statements Additional information
As at 31 December 2024
Note
2024
£m
2023
£m
Non-current assets
Trade and other receivables
4
541.9
507.2
Current assets
Trade and other receivables
4
14.1
0.9
Cash & equivalents
0.3
-
Current liabilities
Trade and other creditors
5
(83.8)
(13.6)
Net assets
472.5
494.5
Capital and reserves
Share capital
6
3.4
3.4
Share premium
6
2.0
0.7
Merger reserve
2, 6
44.8
32.6
Profit and loss account
422.3
457.8
Equity shareholder’s funds
472.5
494.5
The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent company income statement. The result for the Company
for 2024 was a profit of £9.3m (2023: loss £1.8m).
The Company financial statements on pages 200 to 206 were approved by the Board on 5 March 2025 and signed on its behalf by:
Rob Wood
James Brotherton
Chief Executive Officer
Chief Financial Officer
Company number: 14739556
Company balance sheet
Breedon Group plc Annual Report and Accounts 2024
200
Strategic report Governance Financial statements Additional information
For the year ended 31 December 2024
Note
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Retained
earnings
£m
Total
equity
£m
Balance on incorporation at 17 March 2023
0.1
–
–
–
0.1
Scheme of arrangement
2
474.4
–
32.6
–
507.0
Capital reduction
3
(471.1)
–
–
471.1
–
Loss for the period
–
–
–
(1.8)
(1.8)
Share-based payments
–
–
–
2.1
2.1
Dividends paid
–
–
–
(13.6)
(13.6)
Shares issued
–
0.7
–
–
0.7
Balance at 31 December 2023
3.4
0.7
32.6
457.8
494.5
Profit for the period
–
–
–
9.3
9.3
Share-based payments
–
–
–
3.3
3.3
Dividends paid
–
–
–
(48.1)
(48.1)
Shares issued
–
1.3
12.2
–
13.5
Balance at 31 December 2024
3.4
2.0
44.8
422.3
472.5
Company statement of changes in equity
Breedon Group plc Annual Report and Accounts 2024
201
Strategic report Governance Financial statements Additional information
Accounting policies
1
Basis of accounting
Breedon Group plc (the Company) is
a public limited company, limited by
shares, which is listed on the London Stock
Exchange and incorporated and domiciled
in England and Wales. The registered
number is 14739556 and the address of
the registered office is Pinnacle House,
Breedon Quarry, Breedon on the Hill, Derby,
England, DE73 8AP.
These financial statements present
information about the Company from
the point of its incorporation on 17 March
2023 as an individual undertaking and not
about its Group.
In preparing these financial statements,
the Company applies the recognition,
measurement and disclosure requirements
of International Financial Reporting
Standards as adopted by the UK (Adopted
IFRS) but makes amendments where
necessary in order to comply with
Companies Act 2006 and has set out below
where advantage of the FRS 101 disclosure
exemptions have been taken.
The financial statements are presented
in pounds sterling, which is the Company’s
functional currency, and are shown in
£millions to one decimal place.
The Company is included within the
consolidated financial statements of
Breedon Group plc. The consolidated
financial statements of Breedon Group
plc are prepared in accordance with IFRS
and are publicly available. In these financial
statements, the Company is considered
to be a qualifying entity and has applied
the exemptions available under FRS 101 in
respect of the following disclosures:
a cash flow statement and related notes;
disclosures in respect of the
compensation of key management
personnel;
disclosures in respect of transactions
with wholly owned subsidiaries; and
disclosures in respect of capital
management.
As the consolidated financial statements of
Breedon Group plc include the equivalent
disclosures, the Company has taken the
exemptions available under FRS 101 in
respect of the following disclosures:
IFRS 2 -Share-Based Payments in
respect of group settled share-based
payments; and
certain disclosures required by IFRS
13 – Fair Value Measurement and the
disclosures required by IFRS 7 – Financial
Instrument Disclosures.
The Company intends to continue to adopt
the reduced disclosure framework of FRS
101 in its next financial statements.
Going Concern
These financial statements are prepared
on a going concern basis which the
directors consider to be appropriate for
the following reasons:
The Group meets day-to-day working
capital and other funding requirements
through banking facilities, which include
an overdraft facility. Longer-term
debt financing is accessed through the
Group’s USPP loan note programme.
The facilities comprise a £400m multi-
currency RCF, which runs to July 2028
and £250m of USPP loan notes with
maturities between 2028 and 2036.
Further details of these facilities are
provided in note 19 to the Group’s
consolidated financial statements.
In 2024, the Group comfortably met
all covenants and other terms of its
borrowing agreements. The Group has
continued its track record of profitability
and cash generation, with an overall
profit before taxation of £125.4m and
net cash from operating activities
of £201.7m.
The Group has prepared cash flow
forecasts for a period of 12 months
from the date of signing these financial
statements, which show a sustained
trend of profitability, cash generation
and retained covenant headroom, even
under a ‘severe but plausible’ downside
scenario of forecast cash flows.
The base case assumes a trading
performance delivered in line with
market consensus over the forecast
period, while the downside scenario
models a 5% to 10% reduction in
revenues, which the Group believes
is a severe sensitivity relative to likely
outcomes and historic experience.
As at 31 December 2024, the Group had
cash balances of £28.9m and undrawn
banking facilities in excess of £250m.
At the date of this report, the Group’s
liquidity has increased by c.£80m as a
result of the issuance of additional notes
under its USPP programme. Following the
acquisition discussed in note 28, the level of
undrawn facilities will reduce to c.£150m,
which is expected to provide sufficient
available funds for the Group to discharge
its liabilities as they fall due.
Consequently, the directors are confident
that the Group, and therefore the
Company, will have sufficient funds to
continue to meet its liabilities as they fall
due for at least 12 months from the date
of approval of these financial statements
and therefore have prepared the financial
statements on a going concern basis.
Notes to the Company financial statements
Breedon Group plc Annual Report and Accounts 2024
202
Strategic report Governance Financial statements Additional information
Accounting policies continued
1
Company result for the period
In accordance with the exemption permitted
under section 408(3) of the Companies
Act 2006, the Company has elected not
to present its own income statement or
statement of comprehensive Income.
Accounting policies
The accounting policies set out in the notes
below have been applied in preparing the
financial statements for the period ended
31 December 2024 and in the prior period.
Newly effective standards
There were no newly effective standards
in the period which had a material impact
on the Company, nor are any standards
published but not yet effective which
are expected to have a material impact
on the Company.
Taxation
The charge for taxation is based on the result
for the year and takes into account taxation
deferred because of timing differences
between the treatment of certain items for
taxation and accounting purposes.
Deferred tax is provided on the temporary
differences between the carrying amounts
of assets and liabilities for financial reporting
purposes and the amounts used for taxation
purposes. The amount of deferred tax
provided is based on the expected manner
of realisation or settlement of the carrying
amount of assets and liabilities using tax
rates enacted or substantively enacted at
the reporting date.
A deferred tax asset is recognised only to
the extent that it is probable that future
taxable profits will be available against
which the temporary difference can be
utilised. 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 asset to
be recovered.
Deferred tax assets and liabilities are offset
when they relate to income taxes levied
by the same taxation authority and the
Company intends to settle its current tax
assets and liabilities on a net basis.
Fixed asset investments
Fixed asset investments are stated at cost
less provision for any diminution in value.
Financial instruments
Financial instruments are recognised
when the Company becomes a party to the
contractual provisions of the instrument.
The principal financial assets and liabilities
of the Company are as follows:
Trade receivables and payables
Trade receivable and trade payables are
initially recognised at fair value and are then
stated at amortised cost.
Cash and cash equivalents
Cash and cash equivalents comprise
cash at bank and in hand, including bank
deposits with original maturities of three
months or less.
Impairment of financial assets
The Company recognises loss allowances
for expected credit losses (ECLs) on
financial assets measured at amortised cost.
The Company measures loss allowances
at an amount equal to lifetime ECL, except
for bank balances for which credit risk
(i.e. the risk of default occurring over the
expected life of the financial instrument)
has not increased significantly since
initial recognition, which are measured
as 12-month ECL.
ECLs are a probability-weighted estimate of
credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the
entity in accordance with the contract and
the cash flows that the Company expects to
receive). ECLs are discounted at the effective
interest rate of the financial asset.
Share-based payments
Equity-settled share-based payments
to directors, key employees and others
providing similar services are measured at
the fair value of the equity instruments at
the grant date.
The fair value is recharged to the subsidiary
entities which receive services from those
individuals who have been granted awards
on a straight-line basis over the period that
the employees become unconditionally
entitled to the awards.
Financial risk management
The Company’s financial risk is managed
as part of the Group’s strategy and policies
as discussed in note 19 of the Group
financial statements.
Estimates and judgements
No significant estimates or judgements
have been used by the directors in
preparing these financial statements.
Directors’ remuneration and
staff numbers
The Company has no employees other
than the directors, who did not receive any
remuneration for their services directly
from the Company the current period.
See note 5 in the Group consolidated
financial statements for Key Management
Personnel compensation.
External auditor’s remuneration
The remuneration paid to the external
auditor in relation to the audit of the
Company is disclosed in note 4 of the
consolidated financial statements. The fees
for the audit of the Company’s financial
statements are borne by a subsidiary of
the Company and are not recharged.
Notes to the Company financial statements
Breedon Group plc Annual Report and Accounts 2024
203
Strategic report Governance Financial statements Additional information
2023 scheme of arrangement
2
Breedon Group plc (New Breedon) is a public company domiciled in England & Wales
with registration number 14739556 which was incorporated on 17 March 2023 to act as
the new holding company for Breedon Group Limited (Old Breedon) and its subsidiaries
(the Group), and to replace Old Breedon, a company incorporated in Jersey with
registration number 98465, in connection with the Group’s move from AIM to the Premium
Segment of the Main Market of the London Stock Exchange during the first half of 2023.
New Breedon obtained control of the Group on 17 May 2023 via a court approved scheme
of arrangement. Under the scheme of arrangement, shares with a nominal value of
£1.40 were issued in exchange for all the shares in Old Breedon at a ratio of one share in
New Breedon for every five shares in Old Breedon. There were no changes in rights or
proportion of control exercised as a result of the transaction.
The difference between the nominal value of the shares issued under the scheme of
arrangement of £474.4m and the net assets of Old Breedon of £507.0m has been
recognised within a Merger Reserve.
2023 capital reduction
3
On 9 June 2023, the Company undertook a capital reduction to convert £471.1m of share
capital to distributable reserves, resulting in share capital of 338.9 million shares with a
nominal value of £0.01 per share.
Trade and other receivables
4
2024
£m
2023
£m
Amounts owed by Group undertakings
554.9
507.5
Prepayments and accrued income
0.2
0.1
Corporation tax
–
0.3
Deferred tax
0.9
0.2
556.0
508.1
2024
£m
2023
£m
Analysed as
Current
14.1
0.9
Non-current
541.9
507.2
556.0
508.1
Included within amounts owed by Group undertakings is £541.9m (2023: £507.2m) due
after more than one year. The loan interest is charged at a rate of SONIA plus a market rate
margin. All other amounts owed by Group undertakings are unsecured, interest free, and
due on demand.
The amounts owed by Group undertakings are financial assets and are held at
amortised cost.
Deferred tax assets are recognised in relation to share-based payment arrangements.
The charge for the current period has been recognised wholly within the income statement.
Trade and other creditors
5
2024
£m
2023
£m
Amounts owed to Group undertakings
74.2
12.7
Accruals and other creditors
1.4
0.9
Corporation tax
8.2
-
83.8
13.6
Amounts owed by Group undertakings are interest free and repayable on demand.
All trade and other creditors are financial liabilities and are held at amortised cost.
Notes to the Company financial statements
Breedon Group plc Annual Report and Accounts 2024
204
Strategic report Governance Financial statements Additional information
Capital and reserves
6
Share capital and premium
Number
(millions)
£m
Allotted, called-up and fully paid ordinary shares of £0.01 each:
At 31 December 2023
339.7
3.4
Exercise of savings-related share options
0.5
-
Issued on acquisition of BMC
3.2
-
Vesting of Performance Share Plan awards
0.3
-
At 31 December 2024
343.7
3.4
Movements during 2024:
The Company issued 0.5 million shares for cash raising £1.3m in connection with the
exercise of certain savings-related share options, with £1.3m recognised as share premium.
The Company issued 0.3 million shares for non-cash consideration of 1.0p per share,
satisfied through the capitalisation of retained earnings, in connection with the vesting
of awards under the Performance Share Plans.
Movements during 2023:
The Company had 14,286 ordinary shares with a nominal value of £3.50 on incorporation
on 17 March 2023.
As part of the scheme of arrangement (note 2) the Company issued 338.9 million ordinary
shares with a nominal value of £1.40. Subsequently, the Company undertook a capital
reduction effective 9 June 2023 which cancelled the original 14,286 ordinary shares with
a nominal value of £3.50 and reduced the nominal value of the remaining ordinary shares
from £1.40 to £0.01.
The Company issued 0.2 million shares for cash raising £0.7m in connection with the
exercise of certain savings-related share options, of which £0.7m was recognised as share
premium. The Company issued 0.6 million shares for non-cash consideration of 1.0p per
share, satisfied through the capitalisation of retained earnings, in connection with the
vesting of awards under the Performance Share Plans.
Merger reserve
The Merger reserve was created as a result of the scheme of arrangement (note 2).
In addition, 3.2m of ordinary shares were issued to the vendor of BMC, with £12.2m being
recognised as merger reserve.
Investments
7
Movements during 2024:
There have been no movements in investments during the period. The Company holds an
investment of £1, comprising 100% of the ordinary share capital of Breedon Midco Limited,
a holding company within the Group registered in England & Wales with a company
number of 14777332 and a registered address at Pinnacle House, Breedon Quarry, Breedon
on the Hill, Derby, England, DE73 8AP.
A full list of subsidiaries is presented on pages 207 to 209 of the Breedon Group plc Annual
Report.
Share-based payments
8
Details of the Company’s share-based payments are disclosed within note 18 of the Group
consolidated financial statements.
Notes to the Company financial statements
Breedon Group plc Annual Report and Accounts 2024
205
Strategic report Governance Financial statements Additional information
Notes to the Company financial statements
Contingent liabilities
9
The Company acts as a guarantor to the Group’s debt facilities, which comprise a £400m
Revolving Credit Facility and £250m US Private Placement. These have been accounted for
as Financial Guarantee Contracts in line with IFRS 9.
For the year ended 31 December 2024, the subsidiary companies listed below are exempt
from the requirements of the Companies Act 2006 relating to the audit of individual
financial statements by virtue of section 479A. As a result, the Company guarantees all
outstanding liabilities to which the subsidiary companies are subject.
Name of undertaking
Country of incorporation or
registration
Company registration number
Breedon Midco Limited
England and Wales
14777332
Minster Surfacing Limited
England and Wales
04084446
Eco-Asphalt Supplies Limited
England and Wales
13450225
Alliance Recycling (UK) Ltd
England and Wales
09418245
Breedon Group plc Annual Report and Accounts 2024
206
Strategic report Governance Financial statements Additional information
Subsidiaries
Company name
Registered
address
Proportion
held
directly
by the
parent
Proportion
held by
the Group
Aggregate Holdings, LLC
15
100
100
ALBA Traffic Management Limited
3
75
75
Alfred McAlpine Slate Penrhyn
Limited
1
100
100
Alliance Recycling (UK) Ltd
1
80
80
Alpha Resource Management Ltd
2
100
100
Barney Precast Limited
1
100
99.4
Berwyn Granite Quarries Limited
1
100
100
Blinkbonny Quarry (Borders)
Limited
3
100
100
BMC Development of Caseyville, LLC
17
100
100
BMC Development of Columbia, LLC
17
100
100
BMC Development of Defiance, LLC
15
100
100
BMC Development of Hamel, LLC
17
100
100
BMC Development of Illinois, LLC
15
100
100
BMC Development of Lebanon, LLC
17
100
100
BMC Development of Missouri, Inc
15
100
100
BMC Development of Warrenton, LLC
15
100
100
BMC Development of Wright City, LLC
15
100
100
BMC Development, LLC
15
100
100
BMC Enterprises, Inc
15
100
100
BMC Hauling, Inc
15
100
100
BMC Jefferson, LLC
15
100
100
BMC Leasing of Illinois, LLC
15
100
100
BMC Leasing of Missouri, Inc
15
100
100
BMC Leasing, LLC
15
100
100
BMC Maintenance, LLC
15
100
100
BMC Management, Inc
15
100
100
BMC Missouri Realty, LLC
15
100
100
BMC Sand, LLC
15
100
100
BMC St Charles, LLC
15
100
100
Company name
Registered
address
Proportion
held
directly
by the
parent
Proportion
held by
the Group
BMC Stone, LLC
15
100
100
Boyne Bay Lime Company Ltd, The
3
100
100
Breckenridge Jefferson County, Inc
15
100
100
Breckenridge of Illinois, LLC
15
100
100
Breckenridge O’Fallon, Inc
15
100
100
Breckenridge Material Company
15
100
100
Breedon Aggregates SW Limited
3
100
100
Breedon Bow Highways Limited
1
100
100
Breedon Brick Limited
5
100
100
Breedon Cement Ireland Limited
5
100
100
Breedon Cement Limited
1
100
100
Breedon Employee Services Ireland
Limited
4
100
100
Breedon Facilities Management
Limited
3
100
100
Breedon Group Limited
6
100
100
Breedon Group Services Limited
1
100
100
Breedon Holdings (Jersey) Limited
6
100
100
Breedon Holdings Limited
1
100
100
Breedon Investments UK Limited
1
100
100
Breedon Investments USA Inc
9
100
100
Breedon Materials Limited
4
100
100
Breedon Midco Limited
1
100
100
Breedon Northern Limited
3
100
100
Breedon Properties Limited
1
100
100
Breedon Scotland Limited
3
100
100
Breedon Southern Limited
1
100
100
Breedon Surfacing Solutions
Ireland Limited
4
100
100
Breedon Surfacing Solutions
Limited
1
100
100
Company name
Registered
address
Proportion
held
directly
by the
parent
Proportion
held by
the Group
Breedon Trading Limited
1
100
100
Breedon Whitemountain Ltd
3
100
100
BRH Enterprises, LLC
15
100
100
BRM, LLC
15
100
100
Broome Bros. (Doncaster) Limited
1
100
100
City Asphalt Limited
8
100
80
City Mini Mix (Notts) Limited
1
100
100
Clearwell Quarries Limited
1
100
99.4
Cocklebank Conservations Limited
1
100
100
Cwmorthin Slate Quarry 1994
Company Limited
1
100
100
Deckal Limited
7
100
100
Eastern Missouri Concrete, LLC
15
100
100
Eco-Asphalt Supplies Limited
1
100
100
EJCC Limited
1
100
100
Enneurope Holdings Limited
1
100
100
Enneurope Limited
1
100
100
Flemings’ Fireclays Limited
4
100
100
G&T Investing, LLC
15
100
100
Glencarne Bricks Limited
4
100
100
Glenfarne Clayware Limited
4
100
100
Greenshine
7
100
100
Hart Aggregates Limited
1
100
100
Hope Construction Products
Limited
1
100
100
Hope Dormant 1 Limited
1
100
100
Hope Ready Mixed Concrete
Limited
1
100
100
Humberside Aggregates Limited
1
100
100
Huntsman’s Quarries Limited
1
100
100
As at 31 December 2024, the companies listed below and on the following pages are indirectly held by Breedon Group plc except Breedon Midco Limited which is 100% directly owned.
Breedon Group plc Annual Report and Accounts 2024
207
Strategic report Governance Financial statements Additional information
Subsidiaries
Company name
Registered
address
Proportion
held
directly
by the
parent
Proportion
held by
the Group
Kettering Bituminous Products
Limited
1
100
80
Kilcarn Limited
2
100
100
Kingscourt Bricks Limited
2
100
100
Kingscourt Clay Products Limited
2
100
100
Lagan Airports Limited
2
100
100
Lagan Asphalt (UK) Ltd
2
100
100
Lagan Asphalt Group Limited
2
100
100
Lagan Asphalt Limited
4
100
100
Lagan Bitumen Limited
1
100
100
Lagan Cement Limited
2
100
100
Lagan Cement Products Limited
2
100
100
Lagan Group (Holdings) Limited
7
100
100
Lagan Group Limited
7
100
100
Lagan Hibernian Limited
4
100
100
Lagan Materials Limited
4
100
100
Lagan Whitemountain Limited
2
100
100
Marwyn Materials (UK) Limited
1
100
100
MC Materials, LLC
15
100
100
Micromix (Northern) Limited
1
100
100
Midwest Aggregates Limited
5
100
100
Minster Surfacing Limited
1
80
80
Mulholland Bros (Brick and Sand)
Limited
2
99.9
99.9
Natural Building Materials Limited
1
99.4
99.4
Nith Aggregates Limited
1
100
100
Nottingham Ready Mix Limited
1
100
100
Ozark Building Materials, LLC
15
100
100
Phoenix Surfacing Limited
1
80
80
Pile’s Concrete, LLC
16
100
100
Company name
Registered
address
Proportion
held
directly
by the
parent
Proportion
held by
the Group
Pinnacle Construction Materials
Limited
1
100
100
Politte Ready Mix, LLC
15
100
100
Pro Mini Mix Concrete, Mortars and
Screeds Limited
1
100
100
Raineri Building Materials, LLC
15
100
100
RMC, LLC
15
100
100
Roadmix Limited
2
100
100
Roadway Civil Engineering &
Surfacing Ltd
1
100
100
Robinson Quarry Masters Limited
2
100
100
RT Mycock & Sons Limited
1
100
100
SCP Holdings, LLC
15
100
100
Severn Sands (Holdings) Limited
1
100
100
Severn Sands Limited
1
100
100
Sherburn Cement Limited
1
100
100
Sherburn Minerals Limited
1
100
100
Sherburn Sand Company Limited
1
100
100
Sherburn Stone Company Limited
1
100
100
SMRM Holdings, LLC
15
100
100
Staffs Concrete Limited
1
100
100
Stewart Concrete Products, LLC
15
100
100
The Cwt-Y-Bugail Slate Quarries
Limited
1
100
100
The Waveney Asphalt Company
Limited
1
100
100
Thomas Bow Limited
8
80
80
UK Stone Direct Limited
1
100
100
Welsh Slate Limited
1
100
100
Whitemountain Quarries Ltd
2
100
100
Company name
Registered
address
Proportion
held
directly
by the
parent
Proportion
held by
the Group
BEAR Scotland Limited
14
37.5
37.5
Breedon Bowen Limited
1
50
50
Breedon Colas Limited
1
50
50
Capital Concrete Limited
10
43
43
H.V. Bowen & Sons (Quarry) Ltd
1
100
50
H.V. Bowen & Sons (Transport)
Limited
1
100
50
Kingscourt Country Manor Brick
Company Limited
11
50
50
Lough Neagh Sand Traders
Limited
20
25
25
Northern Quarry Products
Limited
12
50
50
PSV (UK) Ltd
1
100
50
Rolla Ready Mix, LLC
18
50
50
RRM Real Estate Partnership
19
50
50
Welsh Slate Europe B.V.
13
50
50
Joint ventures and associates
Breedon Group plc Annual Report and Accounts 2024
208
Strategic report Governance Financial statements Additional information
Subsidiaries
Registered office addresses
1
Pinnacle House, Breedon Quarry, Breedon on the Hill, Derby, England, DE73 8AP, United Kingdom
2
5 Blackwater Road, Newtownabbey, Northern Ireland, BT36 4TZ
3
Ethiebeaton Quarry, Kingennie, Monifieth, Angus, DD5 3RB, Scotland
4
Rosemount Business Park, Ballycoolin Road, Dublin 11, Dublin, RoI
5
Killaskillen, Kinnegad, Westmeath, Ireland
6
28 Esplanade, St Helier, Jersey, JE2 3QA
7
Bank Chambers, 15-19 Athol Street, Douglas, IM1 1LB, Isle of Man
8
Ashbow Court 4-12 Middleton Street, Lenton, Nottingham, England, NG7 2AL
9
1209 Orange Street, City of Wilmington, New Castle County, Delaware 19801, United States
10
Robert Brett House, Ashford Road, Canterbury, Kent, England, CT4 7PP
11
Unit 26 Airways Industrial Estate, Dublin 17, Santry, Dublin, D17 TH93, RoI
12
Rigifa, Cove, Aberdeen, United Kingdom, AB12 3LR
13
Battenweg 10, 6051AD Maasbracht, NL
14
BEAR House, Inveralmond Road, Inveralmond Industrial Estate, Perth, PH1 3TW, Scotland
15
406 N Main St, Ste B, Rolla MO 65401-3154, United States
16
850 New Burton Road Suite 201, Dover, Kent, DE 19904, United States
17
600 S. 2nd St., Suite 404, Springfield, Il 62704, United States
18
8112 Maryland Ave, Suite 320, Saint Louis, MO 63105, United States
19
County Road 3060, Rolla, MO, United States
20
Murray House, Murray Street, Belfast, Antrim, United Kingdom, BT1 6DN
Breedon Group plc Annual Report and Accounts 2024
209
Strategic report Governance Financial statements Additional information
Shareholder information
Registrar
All administrative enquiries relating to
shareholdings, such as lost certificates,
changes of address, change of ownership
or dividend payments and requests to
receive corporate documents by email
should, in the first instance, be directed to
the Company’s Registrar, MUFG Corporate
Markets (MUFG), and clearly state the
shareholder’s registered address and, if
available, your investor code, which can be
found on your share certificate:
By post: MUFG Corporate Markets,
Central Square, 29 Wellington Street,
Leeds, LS1 4DL.
By telephone: 0371 664 0300. Calls are
charged at the standard geographic rate
and will vary by provider. If you are outside
the UK call +44 371 664 0300. Calls outside
the UK will be charged at the applicable
international rate. The helpline is open
between 9.00am and 5.30pm, Monday to
Friday excluding public holidays in England
and Wales.
e-mail
shareholderenquiries@cm.mpms.
mufg.com
website
www.eu.mpms.mufg.com
Share portal
www.breedonshares.com
Registering on the Registrar’s share
portal (Portal), enables you to view your
shareholding, including an indicative share
price and valuation, check your holding
balance and transactions, change your
address or bank details and view dividend
payments. Follow the QR code below to
register for the Portal. All you need is your
investor code, which can be found on your
share certificate.
Share portal
Scan the QR code or click here to go
to the Registrar’s share portal
Group website and electronic
communications
The 2024 Annual Report and other
information about the Company are
available on its website. The Company
operates a service whereby you can
register to receive notice by email of all
announcements released by the Company.
The Company’s share price (15-minute
delay) is displayed on the Company’s
website.
Shareholder documents are now, following
changes in company law and shareholder
approval, primarily made available via the
Company’s website, unless a shareholder
has requested to continue to receive hard
copies of such documents. If a shareholder
has registered their up-to-date email
address, an email will be sent to that
address when such documents are
available on the website.
If shareholders have not provided an up-to-
date email address and have not elected to
receive documents in hard copy, a letter will
be posted to their address that is recorded
on the Register of Members notifying
them that the documents are available
on the website. Shareholders can continue
to receive hard copies of shareholder
documents by contacting the Registrar.
If you have not already registered your
current email address, you can do so
via the Portal.
Investors who hold their shares via
an intermediary should contact the
intermediary regarding the receipt of
shareholder documents from the Company.
The Group has a wide range of information
that is available on the website including:
financial information — annual reports
and half year results, financial news
and events;
share price information;
shareholder services information;
dividend information; and
press releases — both current
and historical.
Multiple accounts
Shareholders who receive more than
one copy of communications from the
Company may have more than one account
in their name on the Company’s Register
of Members. Any shareholder wishing to
amalgamate such holdings should write to
the Registrar giving details of the accounts
concerned and instructions on how they
should be amalgamated.
Dividend information
The Company pays its dividend to
shareholders by electronic transfer. You will
need to have a dividend mandate registered
against your Breedon shareholder account
by the Record Date which enables payment
of the dividend straight to your bank
account. By paying dividends by direct
credit, it helps to reduce the Company’s
impact on the environment and provides
greater benefits in terms of efficiency, cost,
and safeguards the security of the payment.
Please register your bank details on the
Portal or contact our Registrar, MUFG
Corporate Markets, on 0371 664 0300
or +44 371 664 0300 if outside the UK.
Investors who hold their shares via
an intermediary should contact the
intermediary regarding the receipt of
dividend payments from the Company.
Breedon Group plc Annual Report and Accounts 2024
210
Strategic report Governance Financial statements Additional information
Dividend reinvestment plan
(UK and Channel Islands only)
MUFG provide a Dividend Reinvestment
Plan (DRIP) which provides shareholders
in the UK and Channel Islands with the
opportunity to reinvest their dividend
payments to purchase additional ordinary
shares in the Company. If you choose
to join the DRIP, MUFG will use the cash
dividend payment to which you are
entitled to acquire further ordinary shares
in the Company on your behalf as soon as
practicable after the dividend payment
date. Terms and conditions and a brochure
may be found online on the Portal, where
you can also join the DRIP or contact
MUFG on 0371 664 0381 (see below for call
charges) or email shares@cm.mpms.mufg.
com to request a DRIP application form.
In order to be effective for a particular
dividend, any application must reach MUFG
by no later than the DRIP election date
specified in the financial calendar, set out
at www.breedongroup.com/dividends.
Applications to join the DRIP received after
that date will take effect from the next
dividend payment date.
Please note that due to the minimum
charge, the service may not be cost
effective for all participants, and the value of
shares, and any income from them, can fall
as well as rise. This is not a recommendation
to purchase shares and if you are in any
doubt as to what action you should take you
should consult an appropriately qualified
professional advisor.
Share dealing services
You can buy shares through any authorised
stockbroker or bank that offers a share
dealing service in the UK, or in your country
of residence if outside the UK.
MUFG also provides a share dealing
service to private shareholders in the UK
or Channel Islands.
For further information on the share dealing
service provided by MUFG, or to buy and
sell shares via MUFG Corporate Markets
visit www.dealing.cm.mpms.mufg.com or
call 0371 664 0445. Calls are charged at the
standard geographic rate and will vary by
provider. Lines are open between 8.00am
and 4.30pm, Monday to Friday excluding
public holidays in England and Wales.
This is not a recommendation to buy and sell
shares and this service may not be suitable
for all shareholders. The price of shares
can go down as well as up and you are not
guaranteed to get back the amount you
originally invested. Terms and conditions
apply. MUFG Corporate Markets is a division
of MUFG Pension & Market Services which
is authorised and regulated by the Financial
Conduct Authority. This service is only
available to private shareholders resident
in the United Kingdom, the Channel Islands
or the Isle of Man.
MUFG Corporate Markets is a trading
name of trading name of MUFG Corporate
Markets (UK) Limited. Share registration and
associated services are provided by MUFG
Corporate Markets (UK) Limited (registered
in England and Wales, No. 2605568).
Regulated services are provided by MUFG
Corporate Markets Trustees (UK) Limited
(registered in England and Wales No.
2729260), which is authorised and regulated
by the Financial Conduct Authority.
The registered office of each of these
companies is MUFG Corporate Markets,
Central Square, 29 Wellington Street,
Leeds, LS1 4DL.
Unsolicited mail, investment
advice and fraud
The Company is obliged by law to make
its share register publicly available and, as
a consequence, some shareholders may
receive unsolicited mail. In addition, many
companies have become aware that their
shareholders have received unsolicited
phone calls or correspondence, typically
from overseas ‘brokers’, concerning
investment matters.
These callers can be very persistent and
extremely persuasive and their activities
have resulted in considerable losses for
some investors. It is not just the novice
investor that has been deceived in this
way; many victims have been successfully
investing for several years. Shareholders are
advised to be very wary of any unsolicited
advice, offers to buy shares at a discount or
offers of free company reports.
Please keep in mind that firms authorised by
the Financial Conduct Authority (FCA) are
unlikely to contact you out of the blue with
an offer to buy or sell shares.
Shareholder information
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211
Strategic report Governance Financial statements Additional information
If you receive any unsolicited mail or
investment advice:
Make sure you get the correct name
of the person and organisation.
Check the Financial Services Register
at www.fca.org.uk.
Use the details on the Financial Services
Register to contact the firm.
Call the FCA Consumer Helpline on
0800 111 6768 if there are no contact
details on the Register or you are told
they are out of date.
Beware of fraudsters claiming to be from
an authorised firm, copying its website
or giving you false contact details.
Use the firm’s contact details listed on the
Register if you want to call them back.
Search the list of unauthorised firms and
individuals to avoid doing business with
at www.fca.org.uk/scams.
Report a share scam by telling the
FCA using the share fraud reporting
form in the Consumers section of the
FCA website.
If the unsolicited phone calls persist,
hang up.
If you wish to limit the number of
unsolicited calls you receive, contact the
Telephone Preference Service (TPS) at
www.tpsonline.org.uk and follow the link,
or from your mobile phone register your
mobile number, free of charge, by texting
‘TPS’ together with your email address
to 85095.
If you wish to limit the amount of
unsolicited mail you receive, contact
the Mailing Preference Service on
020 7291 3310 or visit the website at
www.mpsonline.org.uk.
If you deal with an unauthorised firm, you
will not be eligible to receive payment
under the Financial Services Compensation
Scheme. If you have already paid money to
share fraudsters, you should contact Action
Fraud on 0300 123 2040 or report online
at www.actionfraud.police.uk/reporting-
fraud-and-cyber-crime.
Shareholder information
Electronic voting
Shareholders can submit proxies for
the 2025 AGM electronically by logging
on to the Portal. Electronic proxy
appointments must be received by the
Company’s Registrar no later than 2.00pm
on Friday 25 April 2025 (or not less than
48 hours before the time fixed for any
adjourned meeting).
Shareholder communication
E: shareholderenquiries@cm.mpms.
mufg.com
T: 0371 664 0300
Calls are charged at the standard
geographic rate and will vary by
provider. If you are outside the UK call
+44 371 664 0300. Calls outside the UK will
be charged at the applicable international
rate. The helpline is open between 9.00am
and 5.30pm, Monday to Friday excluding
public holidays in England and Wales.
Click or scan to go to the
Registrar’s share portal.
Breedon Group plc Annual Report and Accounts 2024
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Strategic report Governance Financial statements Additional information
Glossary
The following definitions apply throughout this Annual Report,
unless the context requires otherwise.
AGM
Annual General Meeting of the Company
AI
artificial intelligence
AIM
Alternative Investment Market of the London Stock
Exchange
AQR
Audit Quality Review
ARM
Alternative raw material
BAP
Biodiversity Action Plan
BEAR
Scotland
BEAR Scotland Limited
BMC
BMC Enterprises, Inc.
bps
basis points
Breedon
Breedon Group plc
Breedon Colas Breedon Colas Limited
Broome Bros
Broome Bros (Doncaster) Limited
CAGR
Compound annual growth rate
CCS
Carbon capture and storage
CEM II
Portland composite cement; comprising Portland cement
and up to 35% of certain other single constituents
Cemex
Cemex UK Operations Limited
CEO
Chief Executive Officer
CFO
Chief Financial Officer
CGU
Cash-Generating Unit
CO2e
Carbon dioxide equivalent
Covenant
Leverage
Leverage as defined by the Group’s banking facilities.
This excludes the impact of the IFRS 16 and includes the
proforma impact of M&A
CPA
Construction Products Association
DMA
Double Materiality Assessment
DNED
Designated Non-executive Director
division
One of the Group’s four operating segments: GB, Ireland,
US and Cement
DIO
Defence Infrastructure Organisation
DRIP
Dividend Reinvestment Plan
DTR
Disclosure Guidance and Transparency Rule
EBIT
Earnings before interest and tax, which equates to profit
from operations
EPD
Environmental Product Declaration
EPS
Earnings per share
EQA
external quality assessment
ESG
Environment, Social and Governance
ETS
Emissions Trading Scheme
EU
European Union
EURIBOR
Euro Inter-bank Offered Rate
FCA
Financial Conduct Authority
FEED
front-end engineering and design
FRC
Financial Reporting Council
GAAP
Generally Accepted Accounting Principles
GB
Great Britain
GCCA
Global Cement and Concrete Association
GHG
Greenhouse gas (emissions)
GJ
Gigajoule
GNI
Gross National Income
Group
Breedon and its subsidiary companies
HVO
Hydrotreated Vegetable Oil
HR
Human Resources
IAS
International Accounting Standards
IFRS
International Financial Reporting Standard
Significant exchange rates
Average
rate 2024
Year-end
rate 2024
Average
rate 2023
Year-end
rate 2023
Sterling/Euro
1.18
1.21
1.15
1.15
Sterling/US dollar
1.29
1.26
1.24
1.27
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Strategic report Governance Financial statements Additional information
Glossary
IIJA
Infrastructure Investment and Jobs Act
invested
capital
Net assets plus Net Debt
Ireland
The Island of Ireland
ISO
International Organization for Standardisation
IT
Information Technology
KPI
Key Performance Indicator
kT
kilo tonnes
Lagan
Lagan Group (Holdings) Limited
Leverage
Net Debt expressed as a multiple of Underlying EBITDA
Like-for-like
Like-for-like reflects reported values adjusted for the
impact of acquisitions and disposals
LTI
Lost time injury
LTIFR
Lost time injury frequency rate
M&A
Mergers & acquisitions
Minster
Minster Surfacing Limited
MPA
Mineral Products Association
MUFG
Company registrar, previously known as Link
MW/MWh
Megawatt/Megawatt hour
Net Debt
Net Debt including IFRS 16 lease liabilities
Net capital
expenditure
Purchase of property, plant and equipment net
of proceeds from sale of property, plant and equipment
New Breedon
The company registered in England & Wales and
incorporated on 17 March 2023 to act as the new parent
company for the Group, in place of Breedon Group plc (Old
Breedon), a company incorporated in Jersey
NI
Northern Ireland
NPS
Net Promoter Scores
Pillar Two
International tax rules, introduced by the OECD, which
establish a global minimum corporate tax rate of 15%
ppt
percentage points
PSP
Performance Share Plan
RAP
recycled asphalt planings
RCF
Revolving Credit Facility
Robinsons
Robinson Quarry Masters Limited
RoI
Republic of Ireland
ROIC
Post-tax Return on Invested Capital
SBTi
Science Based Targets initiative
SECR
Streamlined Energy and Carbon Reporting
SONIA
Sterling Overnight Index Average
Sterling
Pounds sterling
SID
Senior Independent Director
STIP
Short Term Investment Plan
TCFD
Taskforce on Climate-related Financial Disclosures
TIFR
Total injury frequency rate
TNFD
Taskforce on Nature-related Financial Disclosures
TSR
Total shareholder return
UK
United Kingdom (GB and NI)
Underlying
EBIT
Earnings before interest, tax and non-underlying items
Underlying
EBITDA
Earnings before interest, tax, depreciation and
amortisation, non-underlying items and before our share of
profit from associate and joint ventures
US
United States
USPP
US Private Placement
WRI
World Resources Institute
Breedon Group plc Annual Report and Accounts 2024
214
Strategic report Governance Financial statements Additional information
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Advisers and Company information
Company information
Registered in England & Wales
Company number 14739556
Registered office
Pinnacle House
Breedon Quarry
Breedon on the Hill
Derby DE73 8AP
England
Directors
A Bhatia
J Brotherton
C Hui, OBE
P Lafferty
H Miles
C Watson
R Wood
Company secretary
J Atherton-Ham
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
Independent auditor
KPMG LLP
One Snowhill
Snowhill Queensway
Birmingham B4 6GH
Joint broker
Deutsche Numis
Deutsche Bank AG
45 Gresham Street
London EC2V 7BF
Joint broker
HSBC Bank plc
8 Canada Square
London E14 5HQ
Solicitors to the Company
(UK)
Travers Smith LLP
10 Snow Hill
London EC1A 2AL
Contact
If you require information
regarding Breedon Group plc,
please contact:
Breedon Group plc
Pinnacle House
Breedon Quarry
Breedon on the Hill
Derby DE73 8AP
Tel: +44 (0)1332 694010
E: info@breedongroup.com
W: www.breedongroup.com
Breedon Group plc Annual Report and Accounts 2024
215
Strategic report Governance Financial statements Additional information
Pinnacle House
Breedon Quarry
Main Street
Breedon on the Hill
Derby, DE73 8AP
+44 (0) 1332 694000
breedongroup.com
Breedon Group plc