Slides
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26 February 2026 2025 Full Year Results
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2 Presenters Mark Strafford Director of IR Will Gardiner Chief Executive Officer
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3 Our Purpose To enable a zero carbon, lower cost energy future Our People Valued members on a winning team with a worthwhile mission Our Strategy Create value by investing in the UK energy transition
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4 Strong Performance in 2025, Progress on Strategy, Increased Medium-term Visibility 1) Excludes development expenditure and contribution from new investments. 2) Includes committed investments in BESS – acquisition of Apatura projects, Flexitricity and for tolling agreements – Fidra and Zenobe. Strong performance in 2025 Strong operational and underlying financial performance across the Group • Record levels of renewable generation (6% of UK power, 11% of UK renewables) • Record levels of pellet production – 5% increase vs. 2024 Low carbon dispatchable CfD contract for Drax Power Station is an inflection point Progress with strategy and value creation • Announced acquisition of 260MW BESS portfolio • Completed £300m share buyback and commenced £450m extension Existing business expected to provide strong cash flow to support growth Continue targeting post 2027 Adj. EBITDA of £600-700m pa(1) • Based on FlexGen, Pellet Production and Biomass Generation Targeting c.£3bn of free cash flow (2025-2031), £0.5bn delivered in 2025 • >£1bn returns to shareholders • Up to c.£2bn available for investment in growth(2) Investment in growth and value creation Opportunities to invest in energy transition and AI growth • Drax Power Station: utilisation of 4GW of grid access – options for data centres and system support • BESS – GW-scale pipeline of BESS identified – physical assets, tolling agreements and optimisation • Assessing opportunities for further investment in flexible, renewable generation Maintain disciplined capital allocation policy • Supports balance sheet strength, growth and returns to shareholders
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5 Sustainability Improved scoring in third-party accreditations and progress with priorities in 2025 CDP A rating for climate and forestry ‘A’ ratings place Drax in the top 4% of companies who submit disclosures, demonstrating transparency and strong performance on climate and forestry MSCI(1) ESG Rating – A ISS ESG Rating - B- prime Sustainalytics(2) Risk Rating - 21/100 Sustainability developments • Launched Sustainability Framework • Climate Transition Plan published • Full alignment to TCFD • Enhanced alignment to TNFD • SBTi targets to 2040 validated (2026) • Launched Biomass Tracker tool (2026) (1) The use by Drax of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Drax by MSCI. MSCI services and data are the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI. (2) Copyright ©2024 Morningstar Sustainalytics. All rights reserved. The information, data, analyses and opinions contained herein: (1) includes the proprietary information of Sustainalytics and/or its content providers; (2) may not be copied or redistributed except as specifically authorised; (3) do not constitute investment advice nor an endorsement of any product, project, investment strategy or consideration of any particular environmental, social or governance related issues as part of any investment strategy; (4) are provided solely for informational purposes; and (5) are not warranted to be complete, accurate or timely. The ESG-related information, methodologies, tool, ratings, data, and opinions contained or reflected herein are not directed to or intended for use or distribution to India-based clients or users and their distribution to Indian resident individuals or entities is not permitted. Neither Morningstar Inc., Sustainalytics, nor their content providers accept any liability for the use of the information, for actions of third parties in respect to the information, nor are responsible for any trading decisions, damages or other losses related to the information or its use. The use of the data is subject to conditions available at www. sustainalytics.com/legal-disclaimers.
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Cash generation from existing business supports growth, value creation and returns to shareholders Targeting post 2027 Adj. EBITDA of £600-700m(1) pa from current business Target of c.£3bn of free cash flow (2025 to 2031) 1) Excludes development expenditure and contribution from new investments.
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Pumped storage Pumped storage 40MW expansion Hydro OCGTs Energy Solutions 7 FlexGen – Flexible, Renewable Generation MW Operational Development Total Pumped storage and hydro 0.6 <0.1 0.6 OCGT 0.9 0.9 Total 0.6 0.9 1.5 Pumped storage and hydro c.1/3 of total UK long duration storage by GWh capacity • c.60% asset utilisation in 2025 (c.20% in 2019) • Five-year payback on capital invested on acquisition in 2018 £80m upgrade giving 40MW expansion • 2 x 20MW expansion of two units • c.£220m from 15-year CPI-linked Capacity Market agreements OCGTs – 3 x 299MW units (c.900MW) Mixed revenue stack aligned with changing system needs • c.£270m from 15-year CPI-linked Capacity Market agreements • System support services • Peak power generation Commissioning delayed primarily due to grid connections – no penalties incurred • Hirwaun – commissioning from Sept-25, expect commercial control c.Mar-26 • Millbrook and Progress expect to commence commissioning in 2026 Energy Solutions • Renewable energy, PPA and energy services to I&C and corporate customers • Established renewable PPA portfolio with 800MW (>2,000 small generators)
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8 Low Carbon Dispatchable CfD for Drax Power Station is an Inflection Point A CfD that supports energy security, value for money and sustainability Low carbon dispatchable CfD signed (November 2025) • Strike price of c.£110/MWh (2012 real) • Applies to all four biomass units • c.6TWh pa generation collar with flexible operation to support high and low demand periods • c.30% load factor across all four units • Contract period April 2027 to March 2031 Biomass requirements • c.3Mt pa, of which c.2Mt pa own-use • FX hedging in place for full four-year term • Progressing contracting on biomass supply with third-parties • Logistics predominantly complete
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9 Sustainable Biomass US pellet business provides strong underpin to value via integrated relationship with Biomass Generation US South East pellet production • Integrated model enables capture of full potential of value chain • Strong underpin to earnings • c.2Mt pa supplied to Drax Power Station through 2030 • Focus on cost reduction to support increased value to Group Medium-term outlook • Reduction in UK/European pellet demand in 2020s • Own-use Drax supply chain provides insulation from market movements through 2020s • Opportunities for Biomass Generation to access lower cost pellets supporting incremental UK generation • Minimise capital and development expenditure, maximise optionality over future demand growth Long-term opportunities linked to energy transition • Use Elimini to maintain opportunities to support development of carbon markets and future uses of biomass beyond pellets Canadian / US North West pellet production • Sales to Asia under long-term contracts • Rising fibre prices vs revenue indexation eroding margins • Longview project paused and Williams Lake closed • Evaluating options to deliver improvements and maximise value
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Financial & operational review Strong operational and underlying financial performance
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11 Financial Summary Strong operational and underlying financial performance 1) Earnings before interest, tax, depreciation, amortisation, other gains and losses and impairment of non-current assets, excluding the impact of exceptional items and certain remeasurements, earnings from associates and earnings attributable to non-controlling interests. 2) In January 2023, the UK Government introduced the Electricity Generator Levy (EGL) which runs to 31 March 2028. The EGL appli es to the three biomass units operating under the RO scheme and run-of-river hydro operations. It does not apply to the Contract for Difference (CfD) biomass or pumped storage hydro units. EGL is included in Adj. EBITDA and was £nil in 2025 (2024: £161m). 3) Net debt comprised of cash and short-term investments of £302m less borrowings of £979m less impact of hedging instruments withi n borrowings and non-controlling interest of £8m and lease liabilities of £99m. 4) Final dividend conditional on shareholder approval at the AGM in 2026. Total cash and committed facilities £942m (2024: £806m) Adj. EBITDA(1/2) £947m (2024: £1,064m) Net debt(3) £784m / 0.8x (2024: £992m / 0.9x) Adj. basic earnings per share 137.7 pence (2024: 128.4 pence) Expected full year dividend(4) 29.0p/share (c.£99m) (2024: 26.0p/share, c.£96m) Share buyback programme £450m total (c.£57m complete to date) £300m programme completed in 2025
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2025 Adj. EBITDA £m Pellet Production Biomass Generation FlexGen Options for Growth Total Pellet Production 129 - - - 129 Biomass Generation - 725 - - 725 Pumped Storage & Hydro - - 111 - 111 Energy Solutions – I&C - - 54 - 54 Energy Solutions – SME - - (5) - (5) Elimini - - - (37) (37) Innov., Cap. Proj. and Other - - - (31) (31) 2025 total 129 725 160 (68) 947 2024 total 143 814 188 (81) 1,064 12 Performance by Business Strong performance driven by high levels of renewable generation, system support and pellet production 1 2 3 4 Impairment of Canadian business, Longview pellet project and UK BECCS • £198m – Canadian pellet business – lower expected margins, constrained Canadian fibre market • £139m – Longview pellet project paused – future demand from Drax Power Station under low carbon, dispatchable CfD supported by existing US Pellet Production business • £48m – UK BECCS – retain option for long-term development pending appropriate commercial and regulatory support
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0 200 400 600 800 2026 2027 2028 2029 2030 As at December 2025 (£m) Infrastructure facilities Euro bond Term loan facilities RCF (undrawn) Term loan facility 13 Balance Sheet Strong balance sheet and liquidity c.0.8x Net debt to Adj. EBITDA Refinancing activities • Repayments of over £230m of facilities(1) • Facilities and extensions • £450m RCF extended to 2028 (option to extend to 2029) • £171m extension of term-loan facilities • New £190m term-loan Liquidity and working capital • £942m of cash and committed facilities Stable crossover credit ratings Instrument Maturity Description Term-loan facility 2027 £190m (undrawn at YE) Infrastructure facilities(2) 2026-2030 £245m Term-loan facilities(3) 2027-2029 £442m Revolving credit facility (RCF) 2028 £450m (undrawn) Euro bond 2029 €350m 1) C$200m ESG CAD term-loan and €144m Euro bond. 2) Infrastructure maturities – €70m in 2026, £45m in 2027, £53m in 2028, £50m in 2029 and €32m in 2030. 3) Term-loan maturities – £95m in 2027, €135m and £100m in 2028 and €50m and £80m in 2029. Balance of maturities weighted to 2029
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14 Capital Investment Investment in core assets and strategy Key areas 2025 Actual £m FY-26 Estimate £m Growth BESS, Pumped Storage and Hydro, and OCGTs 98 ~100 Maintenance No major planned biomass outage in 2025 72 ~100 Other Health, safety, environment and IT 32 ~30 Total 202 210-250 2026 outlook • Growth – BESS, Pumped Storage and Hydro upgrades, and OCGTs • Maintenance – Major planned biomass outage and US pellet operations
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15 Cost Management Cost reductions delivering structural savings aligned with post 2027 Adj. EBITDA targets Structural reductions(1) (£m pa) vs. 2024 base 1) Reductions shown in 2024 real terms, excluding Opus & Daldowie disposals, costs associated with growth for new OCGT assets and major outages. Continue to invest in growth while driving cost savings and efficiency vs. 2024 base (200) (100) - 2025 2026 2027 Opex Devex Fixed Costs
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16 Disciplined Capital Allocation Supports Growth and Returns to Shareholders Capital allocation policy remains unchanged Sustainable and growing dividend Return surplus capital beyond investment requirements Maintain strong balance sheet and credit rating Invest in core business1 2 3 4
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Create value by investing in the UK energy transition Drax Power Station, BESS and other opportunities to invest in flexible, renewable generation
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18 Future Focus – Structuring the Business to Succeed Supporting the Group’s targets and options for growth Performance, culture and capabilities Transformation and change Technology, digital, data Reduce cost base and focus resource to deliver strategy and best financial returns
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2025-2031 2030s onwards Power generation ✓ ✓ Data centre power supply ✓ ✓ Other system support services ✓ ✓ Other generation opportunities ✓ Carbon removals ✓ 19 Opportunities for Development of Drax Power Station Evaluating a range of opportunities to utilise 4GW of grid access
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Large-scale reliable power supply • 4GW(1) site with 2.6GW(1) of active generation capacity to support 24/7 power • >1,000 acre site • Water extraction rights and cooling systems • Secure operational site • Proximity to UK fibre network • Fully owned by Drax Scalable front of and behind the meter solutions – short, medium, long-term potential(2) • Phase 1: c.100MW front of meter from 2027 • Phase 2: c.500MW behind the meter 2028-2031 (subject to agreement with UK Government) • Phase 3: c.600MW behind the meter from 2031 • Backed up by 2.6GW(1) of active generation capacity • 1.3GW of additional grid access(1) for development Expertise of Drax Group • Established work force • Experience in local planning and consenting 20 Development of Options for Data Centre at Drax Power Station Physical attributes Other attributes Illustrative development schedule Characteristics to support AI data centre and energy security 1) TEC – Transmission Entry Capacity. 2) Developing options for 1.2GW-scale data centre with first goal of 100MW from 2027 subject to necessary consents and a full assessment of capital cost and investment case, as well as establishment of the commercial and development structures.
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Growing demand for flexibility on system • UK requires c.74-87GW of dispatchable generation by 2030(1) • 30GW of storage by 2030 (7GW in 2025)(1) Widening of margins from 2027 onwards • Optimisation capability is key to maximising value • Grid access and planning approval is a limiting factor Acquisition models provide faster time to power • Projects in development with grid access have shorter lead time • Limited development risk to Drax Reducing capital cost curve • Benefits of technology cost savings to be reflected in future repowering of sites 0 20 40 60 80 100 120 140 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Power price, £/MWh 2024 real P10 P50 P90 21 BESS: An Attractive Power Market Opportunity Renewable deployment expected to result in wider spread of power prices Opportunities for flexible generators to capture greater value Source: Aurora, Drax Analysis Expected >1.5x increase in price spread by 2031 Power price and spread development 1) UK Government Clean power 2030 Action Plan (Dec-24).
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Market development Growing demand for system flexibility, wider spread of power prices, reduction in capital costs • UK requires c.74-87GW of dispatchable generation by 2030(1) • 30GW of storage by 2030 (7GW in 2025)(1) Acquisition models provide faster time to power and lower risk than self-build Development models Attractive returns Targeting returns significantly in excess of WACC • Utilise existing asset base, trading expertise and balance sheet to deliver incremental value vs. stand-alone BESS Progress to date c.£500m of capex and tolling agreements • 260MW of Drax-owned assets acquired • 450MW of Drax controlled tolling agreements • Acquisition of asset optimisation platform (Flexitricity)(2) GW-scale pipeline of opportunities in development BESS: Targeting a GW-Scale Pipeline of Opportunities Significant progress made, 710MW of BESS developments added since October 2025 Two pillars to strategy Physical ownership Tolling Develop portfolio of owned assets Minimal upfront cost Utilise tolling agreements to provide additional opportunity from BESS and power market access Underpinned by trading and optimisation capability 221) UK Government Clean power 2030 Action Plan (Dec-24). 2) Completion expected Mar-26.
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Initial investment in 260MW of assets principally located across England/Scotland transmission constraint c.£157m investment in 260MW, 2-hour duration BESS across three sites • Staged payments through 2028, linked to construction milestones • Contractual protections for cost overruns and delays • First site expected to be operational in 2027 Right of First Offer (ROFO) on additional developments • 289MW across eight additional sites Benefits • Adds complementary technology to existing FlexGen portfolio • Time to power benefit from projects already in development • Locations targeted to provide benefits to the system and enabling renewable generation • Falling costs of BESS to be captured in future repowering BESS: Developing a Portfolio of Drax-owned Assets 23 23
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Agreements in place for 450MW (1.3GWh) of tolling rights 24 BESS: Developing a Portfolio of Tolling Products for BESS Owners Tolling agreements signed with Fidra and Zenobe(1) • 2 and 4-hour duration BESS • 10 and 15-year tolling agreements • No upfront capital requirement or ongoing maintenance cost • Total tolling commitments of c.£300m • Protected grid connection, targeting a Commercial Operation Date (COD) in 2028 Large market with appetite for structured products • Infrastructure funds investing in BESS lack trading capability • Infrastructure funds prefer tolling agreements over merchant exposure Benefits • Long-term cost visibility • Time to power benefit from projects already in development • Leverages Drax trading and FlexGen expertise • Contracting with proven counterparties • Complements physical ownership model and Flexitricity acquisition 1) Agreements signed with Fidra and Zenobe in Jan-26/Feb-26 but remain subject to FID by Fidra and Zenobe, expected H1-26. Fidra Energy – West Burton 250MW / 500MWh 10 years from 2028 Zenobe Energy - Coalburn 200MW / 800MWh 15 years from 2028
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Flexitricity platform supports GW-scale growth in BESS and optimisation of existing asset base 25 BESS: Acquisition of Asset Optimiser (Flexitricity) Acquisition of Flexitricity for c.£36m, provides tech platform to grow BESS business • Front-of and behind-the-meter solutions for grid scale assets and demand response • Existing customer base of >0.9GW of operational assets • Expected completion Mar-2026 Supports scaling of BESS and optimisation of existing portfolio
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Summary and outlook
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GW Operational Development Options Total Drax Power Station 2.6 1.4 4.0 Pumped Storage and hydro 0.6 0.6 OCGT 0.9 0.9 BESS(1) 0.7 0.3 1.0 Total 3.2 1.6 1.7(2) 6.5 27 Growing a Balanced UK Portfolio Pumped storage Pumped storage expansion Hydro OCGTs Biomass BESS – physical and tolling BESS – development options Energy services and optimisation 1) Apatura, Fidra and Zenobe developments, plus ROFO. 2) Additional 600MW capacity permitted at Cruachan Power Station. 3) Drax Energy Solutions has established renewable PPA portfolio with 800MW (>2,000 small generators). 4) Flexitricity has agreements for c.900MW route-to-market services. 5) Measured by output Q4 2024 to Q3 2025. Source: Drax and Elexon. Flexible, renewable portfolio with options for growth in energy security, energy transition and AI growth Additional route-to-market services and demand-side response, provided to c.1.7GW across Drax Energy Solutions(3) and Flexitricity(4) Key contribution to UK energy security in 2025(5) 2nd largest producer of renewable power 3rd largest producer of dispatchable power 6th largest producer of power
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28 Creating Value by Investing in the UK Energy Transition 1) Excludes development expenditure and contribution from new investments. 2) Includes committed investments in BESS – acquisition of Apatura projects, Flexitricity and for tolling agreements – Fidra and Zenobe. Strong performance in 2025 Strong operational and underlying financial performance across the Group • Record levels of renewable generation (6% of UK power, 11% of UK renewables) • Record levels of pellet production – 5% increase vs. 2024 Low carbon dispatchable CfD contract for Drax Power Station is an inflection point Progress with strategy and value creation • Announced acquisition of 260MW BESS portfolio • Completed £300m share buyback and commenced £450m extension Existing business expected to provide strong cash flow to support growth Continue targeting post 2027 Adj. EBITDA of £600-700m pa(1) • Based on FlexGen, Pellet Production and Biomass Generation Targeting c.£3bn of free cash flow (2025-2031), £0.5bn delivered in 2025 • >£1bn returns to shareholders • Up to c.£2bn available for investment in growth(2) Investment in growth and value creation Opportunities to invest in energy transition and AI growth • Drax Power Station: utilisation of 4GW of grid access – options for data centres and system support • BESS – GW-scale pipeline of BESS identified – physical assets, tolling agreements and optimisation • Assessing opportunities for further investment in flexible, renewable generation Maintain disciplined capital allocation policy • Supports balance sheet strength, growth and returns to shareholders
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26 February 2026 Appendices
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30 Generation – Forward Power Sales Strong forward power sales through end of current renewable schemes 1) Includes de minimis structured power sales in 2026, 2027 and 2028 (forward gas sales as a proxy for forward power), transacte d for the purpose of accessing additional liquidity for forward sales and highly correlated to forward power prices. 2) Presented net of cost of closing out gas positions at maturity and replacing with forward power sales. 3) CfD strike price, c.£142/MWh (Apr-25 to Mar-26). Contracted power sales (24 Feb 2026) 2026 2027 2028 Net RO, hydro and gas (TWh)(1) 10.9 2.1 0.2 Average achieved £ per MWh(2) 77.8 79.5 71.3 CfD (TWh)(3) 2.4 - - Forward power sales underpin earnings through Q1-27 • c.£1.0bn of forward power sales • 13.3TWh at an average price of £78.0/MWh(1/2) • RO generation – fully hedged in 2026 and substantially hedged to Mar-27 Other sources of value • System support services Working capital inflow in 2027 • c.£0.5bn from end of RO scheme at Drax Power Station New low carbon dispatchable CfD scheme commences Q2-27
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31 Group Income Statement 2025 2024 In £m Adj. Results Adjustments(1) Total Results Adj. Results Adjustments(1) Total Results Revenue 5,355 35 5,391 6,081 81 6,163 Cost of sales (3,794) (84) (3,878) (4,130) 5 (4,125) Electricity Generator Levy - - - (161) - (161) Gross profit 1,562 (49) 1,513 1,790 86 1,877 Operating expenses (614) (27) (641) (726) (35) (761) Adj. EBITDA 947 n/a n/a 1,064 n/a n/a Depreciation and amortisation (243) - (243) (242) - (242) Impairments (27) (351) (378) - - - Other (6) (4) (10) (23) (1) (24) Operating profit 671 (430) 241 800 50 850 Foreign exchange gains/(losses) 8 (2) 6 (9) - (9) Net interest charge (56) (2) (58) (87) (1) (88) Profit before tax 623 (434) 190 704 49 753 Tax (charge)/credit (138) 16 (121) (213) (15) (228) Profit after tax 486 (418) 68 491 35 526 1) Exceptional items and certain remeasurements.
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32 Group Adj. EBITDA by Business Unit In £m 2025 2024 Pellet Production 129 143 Biomass Generation 725 814 Pumped Storage and Hydro 111 138 Energy Solutions – I&C 54 81 Energy Solutions – SME (5) (30) Flexible Generation and Energy Solutions (FlexGen) 160 188 Elimini (37) (47) Innovation, Capital Projects and Other (31) (34) Group 947 1,064
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33 Generation – FlexGen and Biomass Generation In £m 2025 2024 Revenue Power sales 3,190 3,869 System support and optimisation 96 197 Renewable certificate sales 941 747 CfD income 187 144 Capacity Market income 17 12 Gas sales to Energy Solutions business 27 63 Fuel sales and other income 120 112 4,578 5,144 Cost of sales Generation fuel costs (1,648) (1,706) System support and optimisation (26) (55) ROC value from generation 712 612 REGO value from generation 6 47 Carbon certificates (6) (5) Renewable certificates sold or utilised (895) (762) Cost of power purchases (1,525) (1,767) Fuel sold (77) (73) Grid charges (19) (23) EGL - (161) (3,478) (3,892) Gross profit 1,100 1,251 Operating costs (264) (300) Adj. EBITDA 836 951 2025 2024 Generation Adj. EBITDA (£m) 836 951 Biomass 725 814 Pumped storage and hydro 111 138 Generation (TWh) 15.7 15.4 Biomass 15.0 14.6 Pumped storage and hydro(1) 0.7 0.8 Average achieved power price Gross power sales (£m) 3,190 3,869 Cost of power purchases (£m) (1,525) (1,767) Net power sales (£m) 1,665 2,102 Net power sales (TWh) 15.7 15.4 Average achieved price (£/MWh) 106.1 136.5 1) Gross output from pumped storage and hydro schemes.
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In £m 2025 2024 Revenue 2,633 3,786 Cost of sales Cost of power and gas purchases (1,325) (2,084) Grid charges (614) (760) Other costs (586) (781) (2,525) (3,625) Gross profit 109 161 Operating costs (60) (110) Adj. EBITDA 49 51 -I&C 54 81 -SME (5) (30) 34 Energy Solutions I&C • Margin similar to 2024, some reduction in volume SME • Sale of majority of Opus Energy’s meter points completed Sep-24 • Remaining meter points sold May-25 • Wind down of SME substantially complete Renewable power and energy solutions
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Pellet Production 35 In £m 2025 2024 Revenue 903 942 Cost of sales (551) (562) Gross profit 352 380 Operating costs (222) (237) Adj. EBITDA 129 143 Production (Mt) 4.2 4.0 Good progress in 2025 • Record levels of production • Reduction in production costs vs. 2024 • Improved throughput • Cost management • Operational efficiencies US Pellet Production • Focused on own-use requirements of Biomass Generation business • Cost-plus transfer pricing basis • Reduction in costs = reduction in revenues • Overall impact is lower Pellet Production EBITDA, but lower biomass costs for Biomass Generation, a net benefit to the Group Canadian Pellet Production • Increase in fibre costs vs revenue indexation, lower margins Record production levels and lower production costs
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36 Group Cash Flow Statement In £m 2025 2024 Adj. EBITDA 947 1,064 Working capital 86 122 Other (33) (51) Cash generated from operations 1,000 1,135 Debt service and other interest (80) (82) Corporation tax (110) (194) Net cash from operating activities 810 860 Capital investment (285) (388) Net financing (238) (249) Equity dividends paid (96) (94) Repurchase of own shares (221) (115) Other (26) (36) Net decrease in cash and cash equivalents (56) (22) Cash and cash equivalents at the beginning of the period 356 380 Net cash flow (56) (22) Effect of changes in foreign exchange rates 2 (2) Cash and cash equivalents at the end of the period 302 356
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Group Net debt 37 992 784 53 285 80 110 96 221 947 0 0 0 200 400 600 800 1,000 31 December 2024 Net debt EBITDA Working capital & Other Capital expenditure Debt service & other interest Tax Dividends Share buyback 31 December 2025 Net debt £m
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38 Working Capital Inflow in 2027 Renewables Obligation (RO) • RO – requirement for energy suppliers to source a proportion of their energy from a renewable source • Renewables Obligation Certificates (ROCs) issued to generators • ROCs bought by suppliers to show they have fulfilled the RO • RO compliance period April-March • 1 ROC is c.£67 (plus RPI) (2025/26) ROCs at Drax • Drax generates c.10m ROCs per compliance period • ROCs held on balance sheet until a sale is agreed – typically at the end of the RO compliance period in the following calendar year • RO scheme ends for Drax Power Station in March 2027 • ROCs generated between Apr-26 and Mar-27 will be sold and cash received in 2027 • Working capital inflow of c.£0.5bn 1 c.£0.5bn benefit from end of Renewables Obligation scheme at Drax Power Station in 2027 2026 2027 ROCs (m) Opening 7 7 Earned 10 3 Sold (10) (10) Closing 7 - Balance sheet (£bn) Opening 0.5 0.5 Earned 0.7 0.2 Sold (0.7) (0.7) Closing 0.5 - Cash inflow (£bn) 0.7 0.7 Decrease in w/cap (£bn) - 0.5 Illustrative Generation cash flow from ROCs
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39 Capacity Market Agreements Capacity Market agreements provide strong underpin for FlexGen earnings c.£650m(1) of agreements in place Opportunities from future auctions • Next T-4 auction March 2026 • Existing assets remain eligible for one-year contracts in future auctions • Illustrative only – c.£60/KW(2) – clearing price in last auction Asset Payment period Value £m Pumped storage 1-year agreements (2026-2029) 74 Pumped storage 15-year agreements (2027-2042) 242 Hydro 1-year agreements (2026-2029) 22 Hydro 15-year agreements (2028-2043) 21 OCGTs 15-year agreements (2026-2039) 268 Other gas 1-year agreements (2026-2029) 21 Total existing capacity agreements 648 Potential future agreements at c.£60/KW(2) c.560 Illustrative Capacity Market Income 2026-2043 c.1,200 Capacity Market agreements profile and illustration (£m) 1 1) Real values, 2025, no additional inflation assumed. 2) Clearing price in 2025 T-4 auction.
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FlexGen Strong performance since 2019 underpinned by renewables driving growing need for system support services, with opportunity for further future value (1) Offshore Wind (TWh) (2) Hours of negative pricing (4) Cruachan hours of operation (%)(1) Changing power system: Increased levels of intermittent renewables and volatility over last 6 years, creating greater demand for flexible generation services (1) c.50% increase in offshore wind (2) c.500% increase in hours of negative pricing (3) Increase in renewables and system management action has led to a doubling of system costs (4) Cruachan is operating over twice as much as in 2019 Source: NESO 0 10 20 30 40 50 60 2019 2020 2021 2022 2023 2024 2025 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 0% 20% 40% 60% 80% 2019 2020 2021 2022 2023 2024 2025 0 1 2 3 4 5 6 2019 2020 2021 2022 2023 2024 2025 2026 Outturn Forecast (3) System cost (£bn) 401) 2025 adjusted for planned outage programme
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41 UK Gov. net zero targets require major increase in renewables, system support and carbon removals Long-term value opportunity for FlexGen and Biomass Generation At least 2x increase in demand for power (TWh) • Targets to decarbonise heating and transportation, new demand from data centres Significant increase in offshore wind (TWh) • >3x increase in production (TWh) • Likely to drive increased volatility due to low marginal cost and intermittency Up to 24TWh of offshore wind curtailment pa (TWh) • Excess supply in certain periods leads to negative pricing and curtailment of wind to create space for flexible assets which can turn up and down and support the system Long-term Indicators1 Reduction in flexible CCGT generation (TWh) • Decarbonisation driving removal of flexible CCGTs and replacement with intermittent renewables Source: NESO Future Energy Scenarios 2025Electric Engagement Holistic Transition Hydrogen Evolution Falling Short 0 200 400 600 800 2024 2028 2032 2036 2040 2044 2048 0 100 200 300 400 2024 2028 2032 2036 2040 2044 2048 0 20 40 60 80 2024 2028 2032 2036 2040 2044 2048 0 10 20 30 2024 2028 2032 2036 2040 2044 2048
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0 40 80 120 Jan-23 Jun-23 Dec-23 Jun-24 Dec-24 Jun-25 Dec-25 SUM-26 WIN-26 SUM-27 WIN-27 SUM-28 42 Merchant Forward Commodity Prices Baseload Power Price (£/MWh) Peak Power Price (£/MWh) NBP Gas Price (p/therm) Source: ICE 0 50 100 150 200 Jan-23 Jun-23 Dec-23 Jun-24 Dec-24 Jun-25 Dec-25 SUM-26 WIN-26 SUM-27 WIN-27 SUM-28 0 40 80 120 Jan-23 Jun-23 Dec-23 Jun-24 Dec-24 Jun-25 Dec-25 SUM-26 WIN-26 SUM-27 WIN-27 SUM-28
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0 40 80 120 Jan-23 Jun-23 Dec-23 Jun-24 Dec-24 Jun-25 Dec-25 Dec-26 Dec-27 Dec-28 43 Merchant Carbon Prices UKA Carbon (£/t) EU ETS Carbon (€/t) Source: ICE 0 20 40 60 80 Jan-24 Jun-24 Dec-24 Jun-25 Dec-25 Dec-26 Dec-27 Dec-28
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26 February 2026 2025 Full Year Results