We have performed strongly against all of our key financial and non-financial measures, we are proud of what we have delivered both operationally and financially, and we look to the future with confidence.

VOLKERWESSELS UK MANAGEMENT BOARD

VolkerWessels UK06

Our management team

Steve CocliffManaging directorVolkerRail

Matt WoodsGroup commercial directorVolkerWessels UK

Naomi ConnellChief finance officerVolkerWessels UK

Alan RobertsonChief executive officerVolkerWessels UK

Richard OffordManaging directorVolkerFitzpatrick

Rob CoupeManaging directorVolkerStevin

Alan RobertsonChief executive officer

We have continued to strengthen our market position and each of our business units has delivered quality projects and services in their own sectors. In 2018, we secured a number of key new contracts, including a place on Lot 2 of Highways England’s Delivery Integration Partnership Framework, and a Highways Term Maintenance Contract with Bath and North East Somerset Council. We were also awarded the Defence Infrastructure Organisation’s Clyde Commercial Framework.

We successfully completed a number of key projects during the year, including the Ely Southern Bypass for Cambridgeshire County Council, a project at Mare Harbour to improve the defence infrastructure on the Falkland Islands, and the North West Electrification Programme to electrify and upgrade the Preston to Blackpool rail route. We continue to make good progress on our ongoing contracts too – among these the Dover Western Docks Revival project, the Luton DART fast transit system, linking London Luton Airport with Luton Airport Parkway railway station, the construction of the jetty at Thanckes Oil Fuel Depot, and the M5 Oldbury Viaduct.

Looking ahead, VolkerWessels UK has in place an exceptionally strong pipeline of quality work, with a year-end secured order book standing at a record £1,367m. We have also done a great deal of work to strengthen our business in preparation for our future development. We have a keen eye on innovation and have accelerated our digital transformation, appointing a chief digital officer to lead the business on this front. We are also continuing to invest in new back office systems to help us streamline and better manage our core business processes and activities.

We are seeing ever increasing levels of collaboration between our business units, combining our main contractor strengths with the specialist skills that we have in house, and offering added value and expertise for our clients in this way. During the year, we increased our in-house capability when we acquired PJ Davidson – a specialist slipform concrete contractor.

Of course, the safety and wellbeing of our teams and everybody we interface with is always our number one priority, and our accident frequency rate remained well below industry average during 2018. For us, health and safety includes the wellbeing of our people, and

this year saw us reaffirm our commitment to minimising work-related mental health issues, through the launch of an awareness and support programme.

None of what we have achieved this year would be possible without our people, who I believe are second to none in our industry. At a time when our sector faces a worsening skills and labour shortage, we have continued to ensure that we have the right mechanisms in place to attract, nurture and retain the best, maximising potential through our reward, recognition, and learning and development opportunities, as well as placing an increased emphasis on equality, diversity and inclusion.

We have a management team and workforce that I am incredibly proud of, and I would like to thank everyone who has contributed to ensuring that VolkerWessels UK is an industry-leading business, delivering exceptional projects, pushing boundaries in continuous improvement, and taking enormous pride in being a quality, dependable partner for all of our stakeholders.

Chief executive officer’s reviewI am delighted to report that 2018 was another successful year for VolkerWessels UK. Our excellent reputation, supported by our strong heritage and consistent, dependable quality of work has continued to build amongst our clients, in the wider marketplace and across the industry. Despite the challenges in the market over the past year, our strategy of prioritising cash-backed profits ahead of turnover growth, and of maintaining our measured and selective approach to bidding and winning work has continued to serve us well. Indeed, we have performed strongly against all of our key financial and non-financial measures, we are proud of what we have delivered both operationally and financially, and we look to the future with confidence.

I am delighted to report that 2018 was another very successful year for VolkerWessels UK.

Alan RobertsonChief executive officer

CHIEF EXECUTIVE OFFICER’S REVIEW

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Building advantage together

VolkerWessels UK

VolkerWessels UK’s strategy is illustrated by our Vantage Business Model which governs how we work collaboratively to build advantage together.

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Our business model is formed of four pillars of growth. By continuing to deliver successfully on these, we will meet our business goals to satisfy our clients’ requirements and gain advantage in the marketplace. The pillars are underpinned by the foundations on which our successful business is built, and on which our strategy depend.

Our core values sit alongside the business model and guide our decisions, actions and behaviours.

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IntegrityWe are open and totally honest; our business is ethically and morally strong and each of us is accountable.

PassionWe are committed in heart and mind and enjoy what we do.

InnovationWe strive to be ahead of the game by continually improving the way we do things for ourselves and our clients.

WinningWe never settle for second best; we always deliver high quality work and we strive to exceed expectations.

CollaborationWe collaborate in all aspects of our business, and we work as a team to take advantage of collective genius so that we succeed together.

Annual review 2018 09

The UK management board talks about how VolkerWessels UKis delivering on its vantage model.

Q: How would you summarise VolkerWessels UK’s culture and approach to its operations?Alan Robertson, Chief executive officer: Our Vantage Business Model and our core values set out how we work and what we expect from ourselves and our people. We’re very proud of our business and what we’re achieving together. Delivering to the highest standards is simply embedded in our way of working, and our goal is to continually exceed our clients’ expectations and deliver advantage together. We promote a culture which is authentic, honest and dependable. We have a selective approach to taking on new work, which means that we bring our absolute best in the projects we deliver.

We’re a people business, with a warm and inclusive culture, and we encourage an ‘open door’ approach. Our people are very pragmatic and down to earth – we take pride in the pleasure of a job well done.

Q: How does collaboration play a part in your strategy? Alan Robertson: Collaboration between the VolkerWessels UK businesses and also with all of our external stakeholders is a really important part of our business model, and we continuously adapt to ensure we are maximising the potential of our workforce and our projects. 2018 has seen a further increase in our businesses working together across many of our projects, combining our main contractor strengths with the specialist skills that we have in house. Our people and businesses work together to bring out the best in each other, offering a wide range of capabilities and services to maximise the benefits for our clients. A great example of this is our Dover Western Docks Revival project, where four of our business units have been involved.

Strong and fair relationships with our supply chain are an important part of our collaborative approach, and we recognise that good payment practices are a key part of this. We are focussed on maintaining a supplier payments record which is in the top quartile for our industry.

Q: Entrepreneurship is quite unusual in a corporate business model – can you explain what this means for VolkerWessels UK?Alan Robertson: Our five businesses are empowered to deliver in a way that works best for their own sectors and client base. We welcome entrepreneurs, as ultimately they drive us forward and give us the edge. We encourage our people to be independent, aspirational thinkers, to push boundaries and generate new ideas. We value the ambition of our people to seek out new business opportunities and to network and develop relationships with new clients, and we’re agile, so we’re able to embrace opportunities as they arise.

Q: Innovation is one of your key pillars – what’s been happening in this area in 2018? Alan Robertson: We’ve always encouraged innovation and we’re keen to embrace change, and to challenge to the way we do things. The acceleration of our digital transformation has been a key focus for 2018 and we’re gearing up for the future, with the appointment of our chief digital officer. Our digital transformation work is designed to find new and effective solutions, which will look to technology to automate, or allow us to do regular tasks more quickly, freeing up people’s time to innovate and deliver continuous improvement for our clients.

OUR STRATEGY

We’re proud of our business and what we’re achieving together.

Alan RobertsonChief executive officer

Q: What are you doing to ensure ongoing excellence in engineering and operational delivery? Richard Offord, MD, VolkerFitzpatrick: We’re proud that we offer a full range of engineering disciplines across our five business units and we can offer appropriate specialist solutions across all of our sectors. During the year, we’ve continued to demonstrate a dependable, in-house, integrated approach. It’s all about continuous improvement, and we’ve been working on mechanisms to make it easier to share our successes, lessons learnt and best practice across the group.

Rob Coupe, MD, VolkerStevin: We strive to be the employer of choice in our sector, and have continued to invest in a pipeline of talent flowing into the business – for example through our graduate, industrial training placements and apprenticeship schemes. We’ve also worked to grow our networks within education, to promote and encourage STEM subjects and pathways into engineering careers for all. We’re particularly focussed on promoting careers in engineering to people who might not have previously considered it, encouraging diversity within our business.

Quality is also a constant theme across everything that we do, and 2018 has seen a number of improvements to our in-house learning and development, ensuring that our people continue to have opportunities for training and improving their skills in a wide variety of ways. One example is our new online Performance and Development Review process, which joins up the review process with self-learning and training opportunities in one system.

Richard Offord: Our Operations Board plays an important role in focussing on excellence in operational delivery. It’s a cross-business Senior Management Team, which helps advise the business and takes action on matters that have a potential impact on our operations. We look at things like engineering excellence and quality, digital transformation and innovation, design management, health and safety and, importantly, how to develop our people.

Q: Corporate Responsibility is one of your foundations of excellence – can you talk about your approach and achievements in this area?Steve Cocliff, MD, VolkerRail: For us, Corporate Responsibility has always been about ensuring the highest standards of safety, minimising our environmental impact, and operating in a way that is sustainable and delivers positive value.

Safety is of course absolutely non-negotiable: ensuring the safety of our people, our subcontractors, the public, and all those who are involved with our operations, is more important than anything else we do. Making sure everyone goes home safe every day is our guiding principle.

Our safety record has shown ongoing improvement over the past five years, thanks to robust training, and the delivery of regular, engaging behavioural safety programmes in each of our businesses. We also incentivise close call reporting through a scheme linked to charitable donations. We’re proud to have won awards for our high standards of safety and the work we do to achieve it, but we don’t rest on our laurels, as continuous improvement is key.

The wellbeing of our people is also high on our agenda, and we’ve focussed particularly on mental health and resilience during the past year.

Rob Coupe: We’ve continued to work hard on minimising our impact on the natural environment, and we’re proud to be able to report improvements across some key KPIs for 2018. This has been achieved through the commitment of the business to training our teams, the desire to find better innovative solutions and our meticulous monitoring, measurement and assessment. (Read more in our full Sustainability Report).

OUR STRATEGY

VolkerWessels UK10

Making sure everyone goes home safe every day is our guiding principle.

We’ve continued to work hard on minimising our impact on the natural environment.

Rob CoupeMD, VolkerStevin

Richard OffordMD, VolkerFitzpatrick

Steve CocliffMD, VolkerRail

Our Operations Board has a focus on excellence in operational delivery.

Annual review 2018 11

2018 has again seen a significant improvement across a range of health, safety, environmental, quality and sustainability measures; a testament to the endeavours of our staff.

Adrian Shah-CundyCorporate responsibility director, VolkerWessels UK

OUR STRATEGY

Awards/accreditations

RoSPA Awards 2018VolkerFitzpatrick President’s AwardVolkerHighways Gold Medal AwardVolkerLaser Gold Medal AwardVolkerRail Gold AwardVolkerStevin Gold AwardVolkerRail Fleet Safety Award (Gold)

British Safety Council Awards 2018VolkerFitzpatrick MeritVolkerFitzpatrick Rail MeritVolkerHighways MeritVolerRail MeritVolkerFitzpatrick Pass

0.25lost time frequency rate

33,000close calls reported

0.03accident frequency rate

https://volkerwessels-annualreview.co.uk/wp-content/uploads/2019/04/VWUK2018-SustainabilityReport.pdf

Richard Offord: For us, the added value we can bring to the communities we work in is also key to the way we do business. We go beyond simply minimising our impact, and believe it is our responsibility to add social value and leave a positive legacy.

We’re proud to have achieved an average Considerate Constructors Scheme score of 40.46 this year, compared to an industry average of 36.26 - highlighting our commitment and achievement in all of these areas.

Q: What have you done to keep a focus on people and culture as the mainstay of your strategy? Naomi Connell, Chief finance officer: Our people are front and centre of everything we do, and we recognise that skilled, empowered, dependable and stable teams offer the best possible service to our clients. This starts with ensuring we recruit the best, and to do that we have been focussing on promoting our culture and what we offer as an employer. We recognise the achievements of our people and teams through our internal awards schemes, such as the Platinum Awards. We nurture them through our VolkerWessels UK Academy where employees can develop specific personal skills or join management and leadership development programmes. In 2018, we further increased our efforts to ensure that VolkerWessels UK is a diverse and inclusive place to work through the appointment of our

head of equality, diversity and inclusion (EDI).As a result of our significant investment in our people, we’ve developed high levels of stability and retention, and we believe we have employees who are second to none in their fields.

Q: Alan Robertson has spoken about VolkerWessels UK being a dependable and responsible business, which is very grounded. What is your approach to risk?Matt Woods, Group commercial director: We have a careful and measured approach, with robust processes and systems at every stage of our operations. We have a strategically

VolkerWessels UK12

Our digital transformation journey

Simon White joined VolkerWessels UK as chief digital officer in the summer of 2018. This was a new role, aimed at accelerating the business’ digital transformation journey. What’s VolkerWessels UK’s approach to digital?For us digital is about creating a culture where our people are curious and empowered to seek out and adopt the latest technology. We believe that we must act now and play our part in leading our industry into a new digital era that will fundamentally alter and improve the way that we work.

What is your objective/strategy for VolkerWessels UK?We’re embracing digital to enable us to change the way that we do business, to make us more efficient, create more time for us to think and innovate, and ultimately bring added value to our clients. However, we believe that digital is more about people than technology and we’re embarking on an ambitious digital transformation programme to help our people embrace the shift to an exciting new landscape and drive the transformation.

What activities are you involved in?We’re looking to embrace emerging technology breakthroughs

in fields such as automated plant and machinery, artificial intelligence, machine learning, the Internet of Things, applications in the field of BIM systems, reality capturing, data visualisation and virtual and augmented reality. We’re driving towards the intelligent use of intelligent data and assisted decision making to maximise the great potential of our people.

As part of this, we’re establishing a digital disruption network which will seek out and support digital initiatives, challenge analogue working, promote automation and share our knowledge across the business.

What benefits will the digital transformation bring?We believe it will help us all become better, faster and smarter as we understand technology, interact with it and master it, and will bring added value to individuals and teams, to our company as a whole, and most importantly to our clients.

OUR STRATEGY

In 2018 we further increased our efforts to ensure that VolkerWessels UK is a diverse and inclusive place to work.

Naomi ConnellChief finance officer

Annual review 2018 13

selective approach to taking on non-core work, and always prioritise margin over volume, which we believe makes for a more secure, strong and reliable business, in which our clients can have trust and confidence. Sticking to what we know and do best has been the foundation of our success.

We carry out thorough risk reviews at pre-contract stage and throughout the life of a project, from design, through to construction and handover. There’s no excuse for not understanding your deliverables as the contractor and where the main threats lie.

Like the rest of our sector, during 2018 we operated against a challenging economic backdrop. Of course, there’s the Brexit uncertainty, which exacerbates other risks like the skills shortage, and regulatory and legislation changes. Our clients understand this. Our careful, measured approach has given us credibility among our peers and enabled us to flourish - and we never forget our roots. We pride ourselves on being grounded, stable and dependable.

As well as being selective on contracts, and ensuring robust governance, we’re also strong on cost control, and our strategic investments in the future are considered and targeted. All of this adds up to stability for our business, and a reputation for dependability and credibility with our people, our clients, stakeholders and investors.

We deliver long-term infrastructure across a range of sectors, which we believe minimises our risk exposure.

Q: Systems and processes form one of your foundations of excellence. Are there any developments or changes on the horizon?Naomi Connell: We’re planning to put new systems in place to help us streamline and better manage our core back office processes. This is part of our drive for continuous improvement and gearing up for the future, to ensure we’re operating in the most effective way possible, so that we can provide the support that our operational teams need, leaving them to focus on delivery.

We’ve also accelerated our digital transformation, and this will have a positive impact on our systems, as we work to improve the way our data is collected, shared and used, for example.

FINANCIAL HIGHLIGHTS

For 2018, VolkerWessels UK reported revenue of £984m, representing a 13% increase on 2017, and a 21% increase in operating result to £29m. Our year-end secured order book stood at £1,367m, 27% ahead of the 2017 figure.

Net cash position (£m)

2018 +4%133

2013 76

2014 92

2015 77

2017 127

2016 67

Revenue (£m)

2018 +13%984

2013 697

2014 747

2015 852

2017 870

2016 877

Operating result (£m)

2018 +21%29

2013 12

2014 16

2015 21

2017 24

2016 23

Secured order book (£m)

2018 +27%1,367

2013 1,005

2014 973

2015 901

2017 1,077

2016 1,003

Simon WhiteChief digital officer

Despite a challenging economy, we have a reputation for dependability and crediblity.

Matt WoodsGroup commercial director