Annual Review 23
Summary We are a maritime-orientated high-end design house and technical consulting firm driven by a passion for solving complex, real-world problems that matter. Our purpose is to help navigate some of the most important and impactful engineering challenges of our time, creating an environment where people with outstanding technical knowledge strive to deliver a safer, more efficient, more effective, and sustainable future. Our vision is to be a global leader in solving the most impactful engineering challenges of our time. Performance highlights £12.1m Profit before tax and profit sharing schemes from continuing operations during the reporting year 46% Increase in profit before tax and profit sharing schemes from continuing operations (when compared to last year) 68% Record order intake 18% Increase in revenue from continuing operations (when compared to last year) £184.7m Revenue from continuing operations during the reporting year £7.3m Total distribution to employees in line with our status as an employee benefit trust (EBT) Employee Engagement improvement vs prior year and consistent with industry benchmarks BMT Group Ltd | Review of performance 22-23 2
Chairman’s statement As outlined in more detail by Chief Executive, Sarah Kenny, our financial performance during the reporting period was solid, with double digit percentage increases in revenue (up 18%) and profit (up 46%), aided by our largest ever contract win as a key supplier and subcontractor to the Royal Navy’s Fleet Solid Support (FSS) programme. Overview This year’s performance reflects the confidence that our customers have in us, evidenced by our ability to secure larger, more technically challenging and longer-term contracts. It also reflects the confidence we have in our people, and underlines that by investing in them we can add even greater value for our customers. This in turn helps us to deliver on our purpose, which is to help navigate some of the most important and impactful engineering challenges of our time, creating an environment where people with outstanding technical knowledge strive to deliver a safer, more efficient, more effective, and sustainable future. Our continued focus on our four core offerings, delivered through our aligned regional businesses, has created additional value from the depth and breadth of a business portfolio which spans multiple sectors and geographies. Our diverse portfolio provides us not only with resilience, because any slackening in demand in one sector or region can be balanced by growth in another, but also the ability to access opportunities across the world. This brings best-in-class offerings to our customers by sourcing solutions from other sectors, markets and geographies, and providing opportunities for our talented people to work on projects that interest and challenge them. Overall, the prevailing trend of national governments strengthening their defence capabilities in response to an increasingly uncertain world, and organisations needing our services in order to navigate both energy transition and climate change, mean that we are well placed to support customers across all our regions. I would like to thank all our people for their dedication and commitment, not only in helping to make BMT an increasingly successful business, but also in supporting our customers, who trust and rely on our insight and technical expertise to safeguard and adapt vital services so we can collectively strive for a better world. Outlook Our financial performance provides clear evidence that our strategy is delivering. As we continue to focus on the exciting growth opportunities that lie ahead and strengthen our internal processes to win and deliver those opportunities more effectively, I believe we can look forward to further sustainable growth in the years ahead, which will give us more autonomy and focus to deliver on our purpose. Board I am delighted to have been appointed as Chair of BMT at this exciting time, as we look to build upon and leverage the successful delivery of our strategy to take us into our next phase of growth. I would like to take this opportunity to convey the sincere thanks and appreciation of the board and the company to our prior CFO, David McSweeney, who retired during the year, and to recognise the valued contribution of our outgoing senior independent director and audit chair Doug Webb. With David and Doug’s departures, I welcome Gavin Hill to the board as Audit Chair and Gareth Taylor as our CFO. A year of significant progress for BMT. ‘This year’s performance reflects the confidence that our customers have in us, evidenced by our ability to secure larger, more technically challenging and longer-term contracts.’ Ian Tyler Chair of the BMT Board 3
Chief Executive’s statement In last year’s performance review, I wrote that we had put the strategic foundations in place for significant growth. This year, I’m pleased to be able to report that those opportunities are being realised, evidenced by record sales orders, double-digit revenue growth, and significant improvement in margin and profitability. We exist to help navigate some of the most important and impactful engineering challenges of our time. I‘m proud that our growth and performance are increasing and accelerating the positive impact that we have from marine biodiversity to national security. This report highlights some of the ways we have achieved that in the past year. Business environment The reporting period began with governments in the UK, US and Canada committing to strengthening their defence capabilities in light of Russia’s invasion of Ukraine and rising geopolitical risks across the world. Our Americas and UK defence operations showed strong growth, buoyed by the largest ever contract win in our history as a key supplier and subcontractor to the UK Royal Navy’s FSS programme. By contrast, the Asia Pacific (APAC) region, experienced a more challenging business environment, particularly in the Australian defence market where a government defence review resulted in delays to key programmes. Our environment business continued to make progress within the region and, in the commercial shipping market, orders for our offshore energy crew transfer vessel (CTV) designs continued to grow, offsetting a still subdued large yacht market, in which our designs have long set the standard for innovation and efficiency. In this year we saw the ocean heat record broken, making the climate crisis evermore real and increasing pressure on our customers to procure low carbon solutions and respond to a warming world. Environmental, Social and Governance (ESG) disclosures and legislation are increasing across our home markets, pushing up demand for sustainable product and service design. From designing more efficient ships to transitioning to net zero, we’re delivering sustainable solutions and climateconscious designs throughout our portfolio and supply chain. Performance During the reporting period, total revenue from continuing operations was £185m, up from £157m in the previous year, representing an increase of 18%. We achieved profit before tax and profit sharing schemes of £12.1m from continuing operations during the reporting period, up from £8.3m the previous year, representing an increase of 46%. This enabled us to reward our employee members with a total profit distribution of £7.3m, 40% higher than the £5.2m distributed in the previous reporting period. This was a year where I believe that our financial performance accurately reflected the strength of our people, our strategy and our customer relationships. It also enabled us to invest in our capabilities so that we can achieve even more for our customers in the future. To strengthen performance, we rolled out a new organisation design that enables us to better respond to opportunities and manage the delivery of projects more efficiently and effectively. Key to supporting these efficiency improvements was the implementation of a single global management information system, which removes the administrative burden of multiple systems across the business and provides a more streamlined solution. The new system began operations in the UK during the reporting period, with a view to a broader rollout in the following financial year. It will enable us to deliver more effective project and programme management, improve oversight, enable more effective GHG emissions and provide even better service to our customers. Not only did our record-breaking contract win for the UK Royal Navy’s Fleet Solid Support programme have a positive impact on our financial performance during the reporting period, the multi-year nature of the contract also means that it will continue to contribute to our financial performance for several years to come. Just as importantly, it will see us deliver critical defence and sustainment capability to the UK at a time of great geopolitical uncertainty. It will also create over 100 highly skilled technical jobs within the UK. We grew whilst simultaneously reducing the carbon emissions associated with our business. An undoubted highlight in the reporting year was the news that our goals for reducing emissions and reaching net zero by 2035 were successfully examined and validated by the independent and exacting Science-Based Targets initiative (SBTi). People As the impacts of the COVID-19 pandemic have receded, there has been much discussion about the future of work. We took soundings from our people and noted that different geographies, offices and customer environments required different approaches. So, we are proud to maintain flexible and hybrid working because it enables our people to do their best work while balancing their home life. This has been an outstanding year for BMT, with a financial performance that endorses our strategy and enables further investment in growth. BMT Group Ltd | Review of performance 22-23 4
examples of the collaborations that are very much reflective of our approach to delivering success for our customers. Internally, having great teams supported by a unified organisational design in each of our regions, as well as across our key sectors, means that we are better equipped to bring together our capabilities and offerings to offer the quality and diversity that our customers trust and rely on. Board changes I am delighted to welcome Ian Tyler as our new non-executive Chair. Ian’s leadership, expertise and experience across sectors including energy, infrastructure, technology, defence and engineering is already proving to be of great value. I’d also like to express my gratitude to our previous Chair, Charles Packshaw, for his unwavering support and guidance, most especially as we successfully navigated through a period of considerable complexity during the COVID-19 pandemic. Ian’s appointment is one of several key changes to the Board during the reporting period and Ian outlines these in more detail in his Chair’s statement on page 3. I look forward to working with the new chair and refreshed board at an exciting time for us. Outlook With a strong order book and clear evidence that our strategy is delivering for our customers, our people, and our wider stakeholders, we can look ahead with confidence. Our financial performance and focus on investing in our people and in innovation, mean that we are well placed to be leaders in the technologies and concepts that are becoming increasingly important to our customers and our stakeholders, addressing their most complex scientific and engineering challenges. At BMT we believe that employee engagement is crucial to our success as an organisation. To refresh our approach, we switched our annual employee engagement survey to a different provider during the reporting period. I was pleased that, although the methods were different, the outcome was consistent, with the survey finding high levels of employee engagement and satisfaction. We also worked hard during the year on refining our employee value proposition and strengthening our approach to attracting and recruiting people from outside the organisation. We relaunched BMT Giveback, our flagship philanthropic programme, which brings our people’s innovation together with established charities to deliver real-world impact to local communities. This year we donated funds to enable access to safe, clean, reliable, and resilient water supply in remote First Nations communities in Australia. Given our focus and reliance on our people, I am pleased to report that, due to the strength of our financial performance, we were able to reward our people with both an employee dividend and a performance-related bonus, totalling £7.3m. Customers While our FSS contract win has understandably attracted the headlines this year, it is only one example – albeit our largest ever – of how working closely with customers is key to our success. Whether working with governments, shipyards, energy companies, shipowners or port authorities, we continued to collaborate and innovate in order to address their most complex, pressing challenges. Our ability to deliver critical engineering support to the Canadian Department of National Defence (DND), and in the UK through the collaborative Aurora Engineering Partnership (EDP) with QinetiQ and Atkins are just two further Sarah Kenny, OBE Chief Executive, BMT That said, it is only right to add a note of caution. We are living through an almost unprecedented period of geopolitical, societal and environmental change, which presents risks to all organisations. While we will not be immune to such challenges, I believe that our capabilities, strategic approach, and the resilience that comes with a diverse but focussed business portfolio, mean that we will be well positioned to seize opportunities to support our customers during these uncertain times. I believe that business has a positive role to play in society beyond simple wealth creation. Our innovation, skills and knowledge will help shape a better future. By embedding sustainability into the heart of our business we also secure our own future in an uncertain world and help our customers find the best path through complex challenges to make a positive difference. You can read more on our approach to sustainability on our website. 5
Putting people first “The varied opportunities keep me engaged, enabling me to develop my skills and define my own career path in a diverse way, all within a single company. Every day is a learning opportunity when you are surrounded by the high-calibre people in our organisation.” Chris Huxley Principal Engineer, Australia “Throughout my time at BMT in the environmental field, I have been lucky to work across many project teams. This collaboration has provided me with a deeper understanding and appreciation for the work we provide to customers, and has also enhanced my own knowledge base, learning from true technical experts within their field. I look forward to continuing to gain knowledge from the breadth of technical experts that we have within BMT.” Jasmine Bedford Principal Sustainability and Environmental Consultant, UK BMT Group Ltd | Review of performance 22-23 6
About BMT 1300+ employees 27 office locations 7countries We create environments where people with outstanding technical knowledge deliver meaningful, practical solutions. We are driven by a commitment to a safer, more efficient, effective and sustainable future. 7
Our strategy for sustainable growth How will we continue to be a global leader in solving the most impactful engineering challenges of our time? What How Actions Living our values Why 1 2 3 Sustain and grow the core Growth through collaboration Exploit and invest in innovation Strengthen capabilities across our core business areas to ensure resilience and access new opportunities Expanding our impact To expand the positive impact that we can have for our customers, our communities, in education and the environment. To deliver on our commitment to a safer, more efficient, effective and sustainable future. Investing in ourselves As an employee benefit trust, we want to be resilient, maintain our independence, invest in ourselves, and have choices in our collective future. Trust Innovation Passion Respect Collaboration Build strong relationships within BMT, with customers and partners to draw value from the full breadth of our capabilities Use technology to drive innovation, create efficiencies and add value to existing propositions BMT Group Ltd | Review of performance 22-23 8
Ports and Coastal Infrastructure Building capability and capacity to support port developers, owners and operators to create safe, efficient and resilient infrastructure. Maritime Autonomous Systems Continuing our journey as maritime autonomous leaders, positioning ourselves as a key player in a major transformation of the global fleet. Ship Design Sustaining and growing this business area through evolving our designs. Consulting for Complex Transformation Expanding our consulting capability to support our customers. Offshore Windfarms Growing our capability to support offshore windfarm developers and operators across all stages of the life-cycle of a windfarm. N Maritime design and consultancy Offshore Windfarms t and tions D N Maritime design and consultancy Ports and Coastal Infrastructure Offshore Windfarms Asset monitoring and sustainment Our core business Environment and climate solutions Defence and security customer friend D Ports and Coastal Infrastructure Asset monitoring and sustainment Our core business Environm climate Defence and security customer friend D N Maritime design and consultancy Ports and Coastal Infrastructure Offshore Windfarms Asset monitoring and sustainment Our core business Environment and climate solutions Defence and security customer friend Our core business What does success look like? We are committed to delivering on our purpose and having a positive impact on the world around us. This means enhancing our capabilities, increasing pre-bonus profitability, optimising cash conversion, and prioritising the satisfaction of both our customers and employees, all while fostering a culture of sustainability. So what are we doing? We always strive for a deeper understanding of our customers, their challenges and how we can help. This feeds our business planning process highlight areas for investment. We are backing existing work with investments in Autonomy and Consulting for Complex Transformation. We are investing in campaigns to develop our Ship Design, Ports and Coastal Infrastructure and Offshore Windfarm offerings. And we are further investing in Innovation and Digital Transformation to encourage business entrepreneurship and improve our digital working practices. Maritime design and consultancy: Supporting defence and commercial maritime vessel and infrastructure owners, operators and maintainers across the lifecycle from design, integration of capabilities and life extension of existing platforms. Asset monitoring and sustainment: Supporting customers (in the maritime, offshore and pipeline markets) in managing their portfolio of assets to ensure the structural integrity, efficiency and longevity of operation. Environment and climate solutions: Supporting customers in understanding and mitigating the impacts of environmental and climate effects on their assets and operations. Defence and security advice and services: Supporting Government organisations to procure new capabilities, support solutions and deliver business and capability change. 9
Our operating performance | Asset monitoring and sustainment We enable our customers to make the right decisions about their assets and infrastructure, whether its optimising efficiency and effectiveness, or ensuring that their operations are safe and sustainable. Rising global energy prices, heightened energy security concerns, and a growing focus on renewable energy sources has shaped the market during this reporting period, presenting both complex challenges and new opportunities for our future growth. A surge in renewable energy markets – wind, wave, and tidal power – support our ambition to transition our services into these growing sectors. While the asset types have shifted, our core value proposition of delivering real-time situational awareness, increased reliability and OPEX reduction through cutting-edge asset measurement, modelling, and data digital tools remains. Navigating this landscape is not without challenges. Escalating inflation and rising costs have led to consolidation among our customers, partners and competitors. In addition, while national government support for viable renewable energy options remains unwavering across all regions, regulatory, infrastructure, resource and financial hurdles have slowed progress in certain areas. Nonetheless, we actively pursue new ventures in solar, wind, and pumped hydro storage. Performance We achieved remarkable success during the reporting period. Our expertise in sophisticated offshore monitoring systems has led to several major project awards, with key customers – including Oxy, EXMAR, Shell, Murphy, BP, and SOFEC – who continue to place their trust in us for critical asset measurements and insight. Our commitment extends far beyond installation; it’s a life-of-field partnership. Our dedicated field services team conducts annual service visits, ensuring optimal system performance throughout the asset’s life. These visits cover a comprehensive range of services, from equipment inspections to data analysis. Proactively identifying and resolving potential equipment or structural failures minimises downtime and optimises operational efficiency. Reliable data forms the bedrock for customers’ operational decisions, and we have continued to support our key Gulf of Mexico customers with data management, analytics and hurricane reporting services. Onshore, we’ve actively supported customers in assessing mechanical damage to pipelines and identifying hazards to pipeline integrity due to geotechnical changes and accidents. Collaborating with external partners, we’ve worked on research and development projects, addressing risks associated with transporting different products across the existing infrastructure. This support is critical for facilitating the energy transition to alternative fuels. Additionally, we have seen a rise in activity supporting ageing and legacy mining machinery assets, where helping our customers to extend asset life and sustain performance requires meticulous engineering development to guarantee safe and effective execution onsite. Our contributions extend far beyond routine operations, as evidenced by our regular and prominent participation in global technical symposiums and conferences throughout the year. These platforms have allowed us to influence and shape industry thinking, address challenges, and explore more novel and sustainable solutions. Strategy and organisation We have built on valuable customer feedback to develop new offerings around the delivery of digital platforms and data services this year. Our underlying value to asset operators is provided through our expertise in the reliability and longevity of measurement, our data infrastructure, structural analysis and metocean analysis capabilities. How we go to market with our digital tools in the future is being re-shaped around a more consultative approach to ensure that we fully understand our customers’ challenges and deliver the platforms that meet their specific needs. We launched our offshore wind campaign focussed on presenting an integrated, full life cycle service offer to a newly forming energy sector. By combining our environment, offshore engineering, digital, and naval architecture services we are able to offer our customers a unique service, across the life cycle of the field. We want to build long-term relationships with wind farm developers We provide high-value independent engineering and design services to customers in the energy sector. BMT Group Ltd | Review of performance 22-23 10
‘Collaborating with external partners, we’ve worked on research and development projects, addressing risks associated with transporting different products across the existing infrastructure. This support is critical for facilitating the energy transition to alternative fuels.’ and operators and be their trusted partner, advising and supporting them from concept phase through to operation and eventual decommissioning. In Australia, our machinery team has expanded to include new expertise in mechanical engineering, structural engineering, and electrical engineering. We are building the capacity of this growing team, while maintaining successful service for customers, and transitioning into emerging industries and sectors. Highlights We conducted a Quantitative Risk Assessment (QRA) on a proposed ammonia-fueled power generation facility. Our approach involved analysing various conceptual designs and layouts, culminating in the proposal of the most viable and safe options, enabling our Singapore customer to proceed to final design. (right) 11
Loy Yang Mine, operated by AGL in Victoria, plays a crucial role in powering the adjacent 3400MW combined capacity power stations. The mine employs massive bucket wheel excavators, some of the largest in the southern hemisphere, weighing up to 5,000 tonnes and stretching up to 50 meters high and 200 meters long. We understand these colossal machines, so were entrusted with conducting independent structural integrity inspections to identify potential issues, defects, health and safety risks, or wear and tear. This allows timely maintenance and repairs to prevent failures and uphold operational safety. We developed an in-house inspection app. This rugged tablet-based tool allows engineers, specially trained for confined spaces and heights, to record and upload findings and photos on-site. The app reduces reporting time, enhancing efficiency. (left) We are delivering an Integrated Marine Monitoring System (IMMS) for the Floating Production Unit (FPU) which is being installed as part of the Scarborough development, a natural gas field off the coast of Western Australia. Customer focus, response time and technical knowledge were cited by the customer as being positive contributors to this project win. We are upgrading the Acoustic Doppler Current Profiler (ADCP) systems on five of Oxy’s facilities in the Gulf of Mexico. Oxy is a key customer for us as we provide services for all the leading energy company’s offshore facilities in the Gulf of Mexico, including data management and analysis through our interactive asset data platform BMT Deep. (right) We are delivering an Integrated Marine Monitoring System (IMMS) for leading shipping company EXMAR’s work on the Congo LNG Project. The IMMS will provide real-time data that enables the assessment of vessels’ relative positioning and their fatigue life of connecting ropes between them. BMT Group Ltd | Review of performance 22-23 12
Outlook Energy costs, energy security and the drive towards energy transition are likely to remain key drivers for our customers, and will ensure that demand for our asset monitoring services remains high. By ensuring more sustainable, safer, and reliable energy sources, we are positioning ourselves as a sought-after partner for innovative solutions in this evolving energy landscape. We expect this approach to create significant growth opportunities for our asset monitoring services in the year ahead and beyond. Greater Plutonio FPSO System Upgrade. We began work on a complete system update for the Greater Plutonio FPSO, offshore Angola for BP, bringing an older system up to date and highlighting the importance of good service relationships with our long-term clients. The scope of work included an Integrated Marine Monitoring System console upgrade, instrument and field equipment upgrades, telemetry system upgrade, and CALM buoy equipment installation. (above and right) “The Department of Transport would like to thank you for your continuous support, cooperation and partnership throughout the current financial year to deliver excellent outcomes … your support and can do attitude has been an enormous strength … ” Western Australia, Department of Transport, Maintenance Dredging Programme Owner. (right) 13
Our operating performance | Defence and security advice and services Market context The economic implications of the global COVID pandemic, and the continued conflict in Ukraine, alongside escalating tensions in East Asia and the Middle East has inevitably affected and influenced government thinking and spending on defence and security across the reporting year. While overall public spending was weaker, new or renewed commitments around future spending and defence and security capability and strategy were made, which positively influenced our inyear performance and signal future growth and opportunity. One of the key challenges facing the defence and security industrial base is the deepening technical skills shortage. Customer demand for short lead time consultancy and technical support continues to make it challenging to match demand and supply, making partnering across and between industry, and good supply chain management essential. Performance 2022/2023 We achieved solid order intake built off the back of our strong position on the UK MOD’s Aurora Engineering Delivery Partnership (EDP) and Canada’s Engineering, Logistics, and Management Support (ELMS) contracts. The trend for longerWe provide independent engineering, design, management and programme consultancy services in the ‘five eyes’ defence and security markets of Australia, New Zealand, Canada, the US and the UK. Our technical expertise, collaborative approach and independence help our customers and partners to meet their most complex engineering and programme challenges. term contracts, with a progressive shift towards more outcome focus and less manpower substitution, has continued. We expanded our management consulting activity from an established position with London’s Metropolitan Police Service into the Department for Work and Pensions (DWP) and the Home Office, where we are combining programme delivery support with our technical knowledge as the government looks to recapitalise the Border Force maritime fleet. Our expansion into other government departments highlights the value of BMT securing a place across a number of key routes to market including through the Management Consultancy Framework Three (MCF3), a multi-lot framework agreement that gives central government and wider public sector customers access to our high quality and cost-effective consultancy services. Our strong focus on customer satisfaction has been rewarded through multiple repeat contracts, such as the £5m award of the UK Defence Cyber Operations Programme. Strategy and organisation People remain core to our offer. As technology moves at pace we continue to invest in upskilling our employees to remain at the leading edge. Our investments in Digital and in our Autonomy campaign, is rapidly growing our skills and capability. Similarly, we have invested in a Consulting for Complex Transformation campaign, which will extend our offer into higher value services through new skills. Social Value (SV) has become a cornerstone of all new propositions in to defence and security. While SV can take a variety of forms depending on the country and specific market, the activities and benefits cited must be directly relevant to the opportunity and subsequently tracked through delivery. Our commitment to sustainability is shaping our response to SV and is enabling us to collaborate more with our customers on delivering better outcomes for society, communities and the environment. ‘People remain core to our offer. As technology moves at pace it is essential that we continue to invest in upskilling our employees to remain at the leading edge.’ BMT Group Ltd | Review of performance 22-23 14
Highlights We have an extensive track record in delivering complex transformation across central government, security and defence. Supported by PwC, we are the support partner for the UK Border Force’s Maritime Capability Replacement Programme as it looks to recapitalise the maritime fleet. (below) We were awarded the contract to provide engineering support services to the Naval Authority and Technology Group (NATG) Enabling Arrangement (EA) through the EDP. We look forward to working closely with the NATG to deliver highquality engineering support services over the course of this contract. (right) We are providing engineering support services to the UK’s Submersible Ship Nuclear Replacement (SSNR) project team. We are leading a team which is helping to progress the business case submission that will ultimately decide the best option ahead for this major programme. (above left. @Crown copyright) We have started our second piece of work with the Department for Work and Pensions (DWP) under their service modernisation framework. Our work, delivered with consulting group Moorhouse, covers maturity assessment, governance, planning and stakeholder engagement. 15
“By selecting Team Resolute, the Ministry of Defence has secured £77 million of investment into UK shipyards, creating around 2,000 UK jobs, and showcasing cutting-edge British design. Building on ambitions laid out in the National Shipbuilding Strategy, we are also bolstering technology transfer and key skills from a world-renowned shipbuilder, crucial in the modernisation of British shipyards.” UK Defence Secretary Ben Wallace, speaking about Team Resolute, which will see a consortium of Navantia UK, BMT and Harland & Wolff, work together to support the UK Royal Navy’s Fleet Solid Support ship programme. (below) “BMT’s pro bono work with my charity directly led to improvements in the referral pathways for one of our key services. The consultants were fantastic, and the positive legacy of their efforts continue long after completion.” Robbie Thornhill Director of Recovery & Resettlement, Addiction Recovery Agency “BMT has stood out from the crowd, by not only providing the core domain expertise but having the right culture and behaviour that mean that together we have achieved the outcomes needed.” Dan Jones Strategic Command, Defence Digital, Crypto and Defensive “Our collaborative partnership offers a seaworthy, sovereign communications system that will enable Navy to fight and win at sea.” Scott Carpendale Vice President and Managing Director, Boeing Defence, Australia BMT Group Ltd | Review of performance 22-23 16
Outlook With government elections in our key geographies in the coming 12-18 months, we anticipate that defence and industrial spending and capability reviews will feature heavily in the coming financial year. Having had several years of strong defence and security spending, and with the global security situation becoming more complex and worsening, we anticipate growth in the medium to long term, but it will take time for these reviews and spending plans to settle. In the short term, the number of consultants used in government departments may be squeezed and short-term needs may prevail, with platform and capability sustainment prioritised over long-term recaptialisation or new capability programmes. Understanding and supporting our customers will be key to success; as will partnering and collaborating to achieve better outcomes faster. We have opportunities to take our engineering and management consulting offer beyond our traditional markets, working across sectors and leveraging our global workforce. We expect the various postelection Defence Reviews to endorse national Defence plans and modernise forces against a 2040 planning horizon; and we anticipate amphibious and air defence capabilities interwoven with greater use of autonomous capabilities, to feature heavily in future strategies. We need to leverage all of our global campaigns to gain market share as these opportunities arise. “It will provide a capability unlike anything else known to defence … to deliver payloads in the most challenging terrain, reducing risk to the airframe, the payload and personnel on the ground.” Extract from the AWE’s independent product assessment report on the BMT SPARO autonomous drone delivery device. (below) 17
Our operating performance | Environment and climate solutions Market context The global environmental and climate consulting services industry has had a buoyant year, with momentum in environmental approvals, coastal and flood management, climate change and energy services. This was driven by trade expansion in ports, new technology and industry expansion associated with net zero transition policies and associated government funding schemes. Coupled with this, wildfire and severe storm events across the world highlighted a growing need to understand and mitigate the physical and social risks of climate change. These market conditions created a strong drive amongst the environmental and sustainability consulting sector’s top- tier players to expand and consolidate their position, and this has created a squeeze on the smaller specialist consultancies, both in terms of opportunity and talent retention. We have sought to form partnerships in this space, and have adjusted our recruitment and retention approaches to secure and keep our talented people. There is an increased societal expectation on businesses, industry, and government, to take responsibility for restoring and protecting the environment. We provide the expertise and assurance that they need to measure, monitor and manage environmental risks. Performance After three solid years of double-digit order intake growth, our global environment and climate solutions portfolio performance remained stable for the year 22/23. We successfully retained and expanded work with key customers across the ports sector, mining sector, and government customers. We have been able to secure larger and longer term projects; achieved through excellent communications and service delivery, maintaining our position as an independent trusted advisor within these sectors. Our naturally collaborative spirit, along with added dynamism from new hires, also propelled success across our ecological and field-based consulting services, and there was continued growth of our coastal and flood service offerings. This included further work in the climate risk space, such as innovative projects on blue carbon accounting and rehabilitation – driven by the increasing corporate focus of our customers on both climate and biodiversity risk disclosure. Local business development campaigns in APAC also created traction to deliver the region’s capabilities into the emerging offshore wind market, as well as exciting opportunities for coastal infrastructure that will support alternate fuels. The UK and Europe region delivered a stable performance against the previous year, with the continuation of long-term environmental consulting and permit support to key energy customers in the North Sea. In the defence market, we delivered continuation of management and updates to our Defence Legislation Support Tool (directly to defence regulator), and a project for the Defence Equipment & Support (DE&S) looking at their acquisition process in light of net zero and sustainability criteria. Another key win was with the Future Combat Air Support (FCAS) programme, supporting the programme demonstrator to ensure environmental risk management, planning and stakeholder engagement across the entire project lifecycle. The commercial flood risk and modelling team also showed steady performance, being successful where the modelling studies included higher levels of technical complexity, such as the large win for the Isle of Man. In the US and Canada, work was secured for an environmental legislation roadmap and the creation of a sustainability action plan under the ELMS contract, providing a starting point for the new environmental consulting business in region. BMT Group Ltd | Review of performance 22-23 18
‘In the US and Canada, work was secured for an environmental legislation roadmap and the creation of a sustainability action plan under the ELMS contract, providing a starting point for the new environmental consulting business in region.’ Strategy and organisation Our approach to the environment and climate programmes, has achieved successes in improved project profitability, pipeline clarity and risk management. We also have clear capability leadership to ensure our people profile keeps up with the changing demands of the business. Customer quality, profitability, bidding governance and bidding quality were all in focus this year to ensure that we are directing valuable time from our team towards the highest impact opportunities. Targeting the larger scopes and frameworks is important, because it expands the impact we are able to have for our customers and their stakeholders, and ensuring that we have the track record and credibility is key to success for larger opportunities. We also target smaller, lower probability opportunities that deliver the important track record required to unlock future growth. The global offshore wind, ports and coastal infrastructure markets were identified as key areas of focus for the business and global campaigns were put in place to penetrate markets and access new opportunities. Highlights Suffolk County Council in the UK commissioned BMT to carry out surface water modelling for a number of areas across the county to measure the impact of a range of weather events, taking into account the effects of climate change. This modelling will help to determine the number of properties that are likely to be affected and the wider economic impact. (right) 19
Energy Resources Australia (ERA) has commenced the rehabilitation of the former Ranger Uranium mine in the Northern Territory. Several waterways and billabongs occur near the Ranger Mine which support a range of biodiversity and cultural values, including the iconic Kakadu National Park. We were engaged by ERA to develop and implement a water quality management framework for mine closure. The project builds on best practice frameworks for protection of environmental and cultural values. This involved the identification of water types, environmental values, key threats and management objectives for different water types. (below) We are assisting the UK’s Ministry of Defence (MOD) on the delivery of its Future Combat Air System (FCAS). We are part of the team supporting the environmental, safety and instrument landing system (ILS) aspects of this multinational project. In doing so, we are helping to ensure that the project is being delivered as contracted for this vital new future combat air capability. (right) “Given the extent of the study and complexities involved, I very much appreciate the hard work put in by the whole BMT team and their technical expertise.” Sutherland Shire Council, Australia, following submission of the Draft Sutherland Shire Overland Flood Study. (below) BMT Group Ltd | Review of performance 22-23 20
Outlook The three major future industry growth drivers will be: net zero, green finance and ESG investment, and digital technology disruption. Our focus will be firmly on applying our full breadth of environmental, technical, and engineering capability to solve the decarbonisation challenges present in the maritime vessel, infrastructure, and energy system markets, as well as servicing the increasing demands for environmental consulting to mineral mining projects. We will also continuously review the disruptive digital technology impacting our services, and where strong business cases can be developed, leverage technology to transform how we create value for our customers. The ongoing ‘war for talent’ and associated resourcing challenge remains the single biggest concern for the medium term. New legislation will create both opportunity and risk for our core service offerings in environmental risk management. This is in addition to continued legislative drivers and compliance tightening around carbon and biodiversity risk disclosure in the UK, Australia, and Canada. All nations within our key regions have set high bars for net zero and homegrown developed energy transition plans, and our environmental capability will be critical in supporting this aspiration. There are numerous major infrastructure projects across offshore wind, hydrogen and carbon capture that will demand our services. Continued support for domestic energy such as oil and gas is also a key part of ensuring successful transition, including decommissioning and mine closure, and business opportunities will continue to arise in these areas. “In 2021, we announced the Ocean Energy Smart Grid Integration Project and are excited to see the milestones coming from it to help get rural communities off diesel and transitioning to renewable energy … a demonstration of the power of collaboration.” Kendra MacDonald CEO, Canada’s Ocean Supercluster. (left) “Well done to the team for the excellent reporting and the development of new visual display tools for environmental monitoring data … it makes working with BMT a pleasure.” Port of Brisbane Australia. (left) 21
Our operating performance | Maritime design and consultancy Market context Driven by the growth in the global offshore wind energy market, interest in Crew Transfer Vessels (CTVs) remains strong. As energy suppliers look to expand their operations to more challenging locations, they need larger vessels in order to meet endurance and sea state demands. This is driving investment and attention towards Service Operation Vessels (SOVs). Given the ongoing global security challenges, many governments are looking to strengthen defence capabilities, with a focus on amphibious platforms. Alternative fuels remain a key design consideration but with no clear winner in the future fuels debate, and limited budgets, many commercial owners are specifying platforms that are capable of retrofitting new technologies rather than committing at the onset. The APAC region saw a surge in demand for maritime engineering and design services, particularly in the realm of ports and coastal maritime infrastructure. These projects aim to increase capacity, incorporating smart and sustainable technologies to enhance operational efficiency, with an increased emphasis on port connectivity and the integration of multimodal transport systems. Performance This year saw us win our largest ever single order. As part of Team Resolute, alongside Navantia UK and Harland & Wolff, we secured design and integrated logistics support work totalling c£90m for the UK Royal Navy’s Fleet Solid Support (FSS) programme. This was the culmination of many years of work and builds on the success of designing the Royal Fleet Auxiliary (RFA) Military Afloat Reach and Sustainability (MARS) platforms 10 years ago. In parallel, our CTVs remain in demand, particularly with the Singaporean yards Penguin and Strategic Marine. By volume of platforms, our CTV designs are currently #1 in the world. The fast ferry market and luxury yacht markets, however, have remained relatively slow in the reporting year, and we have continued broadening our services into consulting and ‘customer friend’ roles. Our award-winning immersive maritime navigation simulator BMT REMBRANDT has seen continued success - we built a multi-bridge simulator in our Fareham office to train the The King’s Harbour Master’s team and the Admiralty Pilots. In APAC, we focused on improving infrastructure project performance through the application of consistent business and commercial processes within the teams. From innovative ship designs and expert surveys to high-value vessel performance improvements, we help customers and their cargoes to arrive safely, effectively and on time. Strategy and organisation Throughout the year our Ship Design campaign has focused on core sales, driven by the commercial technical sales team, and the development of a new concept, the 48m Service Operation Vessel (SOV). The overarching ship design business model remains focused on delivering work in the UK, but we are working to bring together our skills and expertise globally to expand and enhance our capability and offerings. In APAC we have been exploring better collaboration across our Australian and Singapore teams, blending our diverse capabilities to enhance our pan-lifecycle offerings, and move us up the value chain. And in our marine surveying and investigations business, we have stepped up recruitment to focus on the finance sector and directly engage with the end customers. BMT Group Ltd | Review of performance 22-23 22
Highlights We won our largest ever single contract with our support of the UK Fleet Solid Support (FSS) programme. We are responsible for delivering the functional design, through-life support and training packages for three 216m long vessels for the Royal Fleet Auxiliary (RFA). This is a strong endorsement of the talent and expertise of our employees in world-class naval design and support for high-value assets in the water. (below and right) “We are proud to have collaborated with BMT. Their support in developing our port terminal will play a significant role in contributing to the maritime industry’s decarbonisation goals along the Malacca Straits and wider ASEAN region.” Marin Selatan, a leading Malaysian shipping, logistics and marine services company. 23
We have been delivering the Westport Supply Chain Integrated Design, a core element in the development of a next-generation container port in Western Australia. Our work is built on strong and trusted relationships with both Westport and lead consultant WSP. (above) Our StratCat 27m Crew Transfer Vessel design was selected by Purus HST, an established owner and operator of offshore Crew Transfer Vessels (CTVs), for the expanding European offshore wind market. Built by specialist aluminium shipbuilder Strategic Marine, the four hybrid StratCat 27 CTVs are the first parallel hybrid propulsion CTVs to be built in Asia. (below) The Singapore Civil Defence Force have yet again selected BMT and Penguin Shipyard International to design and build the next generation of Singapore Fire and Rescue boats. The new vessels will offer unrivalled emergency response capabilities combining high vessel performance and extensive search and rescue, and firefighting capabilities. (right) We are leading a project for Australia’s Blue Economy Co-operative Research Centre. Our role is to research the maturity of hydrogen and ammonia powered vessel technology, and to consider the nearterm (10-year) market for such vessels operating in Australian waters. (left) BMT Group Ltd | Review of performance 22-23 24
Outlook Geopolitical concerns, protectionism, and supply chain considerations continue to hamper the ship building sector and this has a consequential impact on design work. Offshore renewables remain a relatively strong sector with new facilities being planned in more extreme locations and this will ultimately shape our infrastructure and design offers. In Defence, nations are stretched dealing with a variety of world events. The urgency of maintaining current stockpiles is inevitably taking the focus away from long- term planning. There is an increasing focus on the trade- off between the number of complex platforms needed against smaller, more agile (and even disposable) platforms. National protectionism of the industrial base may be accelerated and baked into legislation. The publishing of national shipbuilding strategies has provided some certainty but also highlights the challenges of some lean years, with a focus on continuous build rather than design. The desire for green technologies remains a key factor in the sector but there are still no easy choices and the market is confused about which fuel sources will ultimately prevail. Digital and data have become the norm, even at sea, with the threat of cyber and piracy attacks growing. We remain well placed to support our customers as they rise to these challenges. “This repeat order from the Singapore Civil Defence Force represents a significant vote of confidence in the collective capabilities of BMT and Penguin, in particular BMT’s excellence in design and naval architecture for highly-specialised vessels.” James Tham, Managing Director at Penguin International Limited “BMT analysis has helped inform the Government’s consideration of potential measures to reduce greenhouse gas emissions from international shipping ... the Department would highly recommend their work.” Department of Infrastructure, Transport, Regional Development, Communications and the Arts, Australia “Strategic Marine’s collaboration with BMT is proving successful once again with the latest version of the increasingly popular StratCat 27 CTV. It’s the latest example of how we are working with specialist partners to build ever-expanding fleets of low carbon vessels.” Strategic Marine’s Chief Executive Officer “I do not believe we could have completed this task without the facility of the BMT REMBRANDT simulator. All our trainees remark on the advantage they experience of spending time on the simulator before going ‘live’ on the vessels.” Captain Ian Clark, AFRIN AFNI Head of Marine Operations (Seconded Training and Competency Manager), Woolwich Ferry Transport for London. (left) 25
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