Good afternoon, everyone. I'm Liv Garfield, Chief Executive of Severn Trent, and I'm joined by James Bowling, our Chief Financial Officer, and Shane Anderson, our Director of Strategy and Regulation. Now, hopefully, you can all hear us, and hopefully, you can also see the Slides on screen. Now, if anyone has dialed in on audio only, then a PDF of the presentation is also now available on the website. The last few days we've been eagerly digesting all 1,454 pages and 151 data tables of the draft methodology since it was released last Thursday morning. Now, you might not all be quite as keen as we are, so we thought it might be worthwhile having a quick phone call today to share both our key takeaways, but also have the opportunity at the end for some questions and answers as well. Let me start with a bit of a summary as to how we take it. Overall, it's certainly an evolution of PR19 rather than a revolution, but it is the complicated methodology that is gonna take a lot of detailed reading to really get to the bottom of understanding every last point. Now, happily, Shane runs an expert reg team, and they're busy digesting all the changes and nuances we need to make sure that we've captured every last point. Now, the good news, though, is we've done a few read-throughs already, and while there's been plenty for us to chat through in the coming months with Ofwat, there don't appear to be any big standout issues deep in the document that you might have missed. It is broadly as it's covered off upfront. As we expected, given the current cost of living situation, customer affordability is a clear priority and is actually one of the five tests that Ofwat will use to grade all of the plans. Shane's gonna touch on that grading in just a moment. As well as it being just the right thing to do, to be honest, the launch of our new affordability strategy back in May, with the goal of making sure that nobody in our patch dreads their water bill hitting the doormat, puts us in a really brilliant starting position on that test. The second big focus area that, again, isn't surprising to any of us is long-term multi-AMP investment. That's shown up front in those five tests again, with Ofwat expecting companies to show ambition on big programs, especially when it comes to the environment. Our take is things like our net zero targets, our Get River Positive plan, and the WINEP program will all be key features. Now, of course, Ofwat is going to expect companies to keep getting more efficient and spend every last pound of customers' money wisely. We're encouraged by the innovation we're going to see with the continuation of the Innovation Fund established this AMP and now there to stay for another five years. Similar to PR19, there are going to be winners and losers. It'll come as no surprise that we fully plan to be a winner, and the continuation of the ODI framework into AMP8 and beyond, and the strength and incentivization attached to it is one of the key areas that we focus on, making sure that we deliver the right outcomes for customers while achieving meaningful rewards against stretching targets. Last point of the summary then is that financing continues to be an important part of the next price review and a key component of our success to date, with a particular focus on financial resilience and strong governance. Again, companies will be assessed against that. Before we delve into the detail, and I let Shane get excited about all the things he's picked up, let me first of all just have a quick look at the four ambitions that Ofwat has set out for PR24. This is almost like the Ofwat ambition, the Ofwat strategy situation. They want companies to focus on the long term, to truly understand their customers and communities, to deliver greater environmental and social value, and to drive efficiency and innovation. Now, they want us as a sector to achieve these ambitions against a backdrop of climate change, affordability challenges, and rising customer expectations. Now, hopefully, their kind of large strategy is not a surprise to anyone on the call today, and I believe it's certainly aligned with our own ambitions and our own expectations. We can see each of the ambitions and challenges clearly reflected in the details of the methodology. To see through the process, let me hand you over to Shane, and then James and I will cover some more things later. Thanks, Liv. Just touching on Ofwat's approach to PR24 and starting with the five tests that we're using to grade all our plans. Liv has already highlighted customer affordability and acceptability and the long-term delivery strategy. They're two of the tests. We also have three other tests. The first relating to data information and assurance, the second on risk and return, and finally, costs and outcomes. Across these five tests, Ofwat will expect plans to be high quality and ambitious. When it comes to quality, there are a lot of requirements Ofwat has set out in order to get the top marks. Helpfully, we have an experienced executive team, with most of us having been here throughout PR19 and, of course, a very strong regulation team who are well-practiced in producing high-quality reg submissions. For example, just last year when we were able to secure GBP 566 million for our green recovery program. On ambition, second part, we've never shied away from looking to set the benchmark for the sector, as you'll have seen from the recent Get River Positive plan and our affordability scheme. Of course, our overriding aim will be to make sure that our plan is the right plan for us in the long-term interests of our stakeholders. Once Ofwat have graded our plans, we'll land in one of the four categories shown. That's outstanding, standard, lacking ambition, or inadequate. Just to put it PR19 into context, the standard category is equivalent to what was fast track, which we landed at AMP7, PR19. If we're to achieve the same again, we retain the 50-50 Totex cost-sharing ratio, and we get a WACC benefit of 0-10 basis points, which is broadly in line with the fast track benefits. If a company were to make it in the outstanding category, and as a reminder, no company made it into that top category at PR19, then they would receive a 30 basis point increase in the WACC, and they'd also be protected for any decline in the WACC between the draft and final determinations if it were to occur. If you don't make it into one of the top two categories this time, then there is a bit more downside risk. Any company which ends up in the lacking ambition category will be facing a 55-45 Totex cost-sharing mechanism and a penalty of up to 30 basis points on the WACC. Any inadequate plans will have 60-40 sharing ratios, and again, a penalty of 30 basis points. Back over to Liv to talk about customers and what matters most to them. Thank you very much, Shane. Now, it comes as no surprise that customers are named as being right at the heart of PR24. As we mentioned earlier, having ambitious stretch and affordability is gonna be an entry requirement for any plan in the sector. Now, one of the changes is Ofwat looks at the companies to show that their customer engagement has been really, really meaningful, and we're also offering their own research, as well as proposing that every company has what's been called open challenge sessions. We're looking forward to these. We think it'll give us the opportunity to really test our plan with our customers and make sure we're truly delivering exactly what they want, which is, of course, right at the heart of how we want to actually run the organization. Of course, let's move on and understand how ODIs plays into that conversation. Our biggest interaction with customers is in the service we deliver to them each and every day. The way in which we get measured is predominantly in ODIs. Now, again, it looks more like an evolution, not a revolution on ODIs. The framework and how they operate is pretty much in line with what we have in PR19, with the same RoRE range and the continuation of both common and bespoke ODIs. A few things, though, are new. For new common ODIs and for bespoke ODIs, there's going to be a cap and collar of ±0.5% of RoRE. Unlike in the sample where ODIs are much more weighted to the downside than what had indicated the PR24 ODIs are going to be largely symmetrical. Now, that won't be the case for 4 of the commons, where companies can get enhanced and uncapturable awards for frontier performance, providing more upside opportunity. That's one of the areas where we've seen some strong incentivization. Another though is the rates themselves, which have increased up to 70% of customers' willingness to pay in terms of value terms, versus the 50% for PR19. The final thing that's new then is that there are a bigger suite of common ODIs, 20 that apply to us, but Ofwat are only expecting a very small handful of bespoke ODIs for each company. Now in terms of getting ready, because this is like the starting gun of a price review is how we see it, one of the good things is that we've got a really clear view of all 20 of the common ODIs, so plenty for us to begin working on. Here on this Slide are the 20 common measures that we'll all get very familiar with in the course of AMP8. Many of them are a straight lift across from PR19 to PR24. In fact, 14, so 7 trends and measures we've been delivering against in AMP7. Some of those have been common already, some have been bespoke for us for the last few years, and some actually are measured through the Annual Environmental Performance, the EPA assessment, which, as you know, we've got a strong track record of being four-star on. Of the remaining six, while they may be new as ODIs, they're all actually pretty familiar to us in terms of topics. Let me talk through them. Storm overflows are something we've been hugely focused on for a while now. We've already made great progress on our commitment to get to an average of 20 spills a year by 2025, and that's the ODI baseline that Ofwat is expecting every company to achieve. That's where you start the next AMP. You've then got operational greenhouse gases, and there's an ODI for each of water and wastewater, which is why there's six where you see five boxes. This is something we've been working hard to understand and also to make real progress on as part of our triple carbon pledge and our delivery of our approved science-based targets. On river quality, this specifically refers to the reduction of phosphate coming out of both our treatment works, but also the prevention of phosphorus entering rivers from wider partnership working. Now again, two activities we've got plenty of experience dealing with. There's gonna be a new experience measure called BR-MeX, which is going to measure the experience of business retailers when they deal with us. Now, it's something that we've been working on for a little while to improve, and we've got a transformation program to see a step change in performance over the coming months. Finally, there's a new measure all about water demand. While the measure is still to be defined and is not actually particularly specified yet, it's made of a whole suite of quite familiar topics and activities. You've got leakage, per capita consumption, business demand, and different forms of sublevels of leakage, whether it's supply pipes or whether it's main pipes. Nothing new in terms of the topics, but definitely a brand-new measure for the whole sector, which we'll learn more about during the course of the next few months from Ofwat. Net net, one of the great things is we've got an early view, so we know exactly what we are going to be measured on in AMP8. Now, I'm not saying that our performance on each and every one of these today is exactly where it needs to be. There are, of course, a few in any list of measures of 20 where we need to show a bit of improvement. Actually that's what the ODI regime is for, is to drive performance forwards. What I'm pleased with is that we actually recognize the vast majority were pretty good performers on a very good chunk of those. What we know in Severn Trent style, so we set our mind to something, we can definitely make improvements. Let's move on now to talk about Totex. This I think is one of the other big areas that is a lengthy part of the document, and it's all about investments. We're seeing some helpful consistency in the base models from the last AMP to this AMP. We are seeing references to an appreciation of future cost pressures and, for example, from the inflation that we're experiencing right now. Definitely a clear long-term focus on investments, and especially when it comes to the environment, and that's a good indicator of future growth. Let's touch on what's the same in a little bit more detail, and then I'll talk about a couple of things that might be different. The main thing is that the models for base Totex, which makes up the majority of your allowance as a company in our sector, are pretty consistent to what we had in PR19. We're familiar with them, we know what to expect, and we know that Ofwat will be tasking companies with efficiency challenge, as you would expect. We'll have to begin working on that. On the new news, again, a few of the things are quite familiar actually, but there's helpful clarity and some certainty around some specific areas that we've been all talking about recently. It's clear from the methodology statements that Ofwat are supportive and encouraging of long-term investment planning, and that's reflected in a few areas. On costs, Ofwat are considering some different options for including forecast OpEx costs in the models. They're also going to take into account future cost pressures. One of the examples that they give, and one which we've definitely experienced at AMP, is the increased complexity and cost associated with ultraviolet treatment, which is being used more often. That wouldn't have been reflected in the base models in PR19, so that's a helpful indication for the future. Similarly, Ofwat have acknowledged that different solutions might have different cost profiles, and they provide more certainty about how those costs will be allowed for. A really good example is nature-based solutions, where the CapEx outlay might be lower, but there's a much longer ongoing OpEx and IRE cost, and that requires funding. As I mentioned at the start, there's also a bigger focus on environmental enhancement spend. Net zero, Ofwat have indicated that work to reduce process emissions will be funded, and for anything that can't be achieved through absolute reduction, and so, for example, needs to be through areas such as offsetting, there'll be a bidding competition within the sector to win more funding for some companies to go further and faster. In our big environmental program on WINEP, there is a pleasingly greater degree of flexibility on timing, meaning we have the ability to accelerate our work and make those vital improvements even quicker. One last comment, and I know it's a bit niche, but I guess I am originally a regulatory team person. Where I guess one of the changes we are seeing is in developer services, and you see the developer services is actually being removed from the price controls. We see this as positive. It'll make the whole model a lot simpler, but again, that's a change for our regulatory team to work through is to make that change happen. With that, I'm gonna move on for now to James to talk about different elements of financing. Thank you, Liv. First, I'd just like to highlight that, as in PR19, the opportunity to outperform on financing and hold on to that outperformance remains in PR24. The cost of debt will continue to be a blend of embedded and new debt, with embedded debt based on the existing balance sheets of companies and new debt being indexed and trued up to reflect changes in interest rates during the AMP. On the cost of equity, Ofwat will continue to use the CAPM model in combination with a number of cross-checks. In terms of what's new for PR24, there are a few points on financeability that I'd like to highlight. First, and I think helpfully, Ofwat is adding some new credit metrics to its suite of metrics used to assess plan financeability. These are more closely aligned to those used by Moody's and Standard & Poor's, which we of course reflect in our own planning assumptions. They're also considering lowering the level of notional gearing from the 60% that it stands at today, and that we think that's to encourage greater financial resilience in the sector, which they have hinted should be made possible by the high inflation environment we're currently experiencing. They're also looking at the level of indexing debt in the sector and considering whether that should be reflected in the notional company. When it comes to the financial levers available, companies will continue to be able to propose their own pay as you go and RCV run off rates, but within an acceptable range. Finally, Ofwat have recognized the important role that dividends play in equity financeability, a positive point we think for the listings. Moving on now to market developments, and it's a similar theme of evolution, not revolution. The price controls themselves have remained largely unchanged, with the same number of controls as in PR19, and no real changes other than to bioresources. Here, Ofwat is proposing an average revenue control that brings the sector closer to the kind of gate prices that are experienced in other waste markets. Now, it's a bit too early for us to say much more on this change, as we're expecting a more detailed consultation from Ofwat in September. One other area of competition is in Direct Procurement for Customers, which will be carried over from PR19 to PR24, but with an increase in the threshold, at which point DPC becomes default, and that's up to GBP 200 million of the lifetime Totex. With that, I'll hand you back to Liv. Thank you, James. Now, just worth talking about this for a moment, and let's just remind you that we're right at the beginning of the PR24 journey. There's an awful lot of detail to pore over and many discussions and many consultations to be had over the next 18 months or so. The next big date for your diary, if you wanna put it in your calendar, is in December this year, when Ofwat will be publishing their final methodology. Before that, of course, you can imagine, we're responding in lots of detail to the various consultations set out in the draft. There you have it, our key takeaways of the literally 1,500 pages of methodology, certainly a lot of continuity from PR19, with no big new surprises. Of course, a good number of challenges, and we're working through those over the coming months to understand the details of it and also discuss it with Ofwat. Plenty of opportunity as we go into the next period for those companies who can deliver to very much be winners versus the sector, and I firmly consider Severn Trent to have the opportunity to be able to do that. With that, we'll open up for any Q&A. Okay. The way it's gonna work, I think if you just, yeah, click on the link, and I think there are a couple who've got pre-questions ready, and I guess if everybody else can stay on mute, that would be ace. James, we're gonna go to you first, if that's all right. James Brand. Hi. Thanks for the presentation. I have three questions. I hope that's not too many. The first is on ODIs. You mentioned that the kind of indicative range for outperformance or underperformance was unchanged, but there'd be some uncapping. And then there's this sharing mechanism that's coming in over 3%, which I guess implies that Ofwat thinks that some companies might be outperforming by more than 3%. Do you think there's likely to be more to go for in ODIs in this upcoming period than the period we're in at the moment? That's the first question. Secondly, pay-as-you-go and RCV run-off, and narrowing those down to tighter ranges. I don't recall you being an outlier on either of those, but maybe you could just clarify that you're not on either of those measures. Then thirdly, another large listed water company has been talking about significant investment in the next regulatory periods, related to combined sewers, and reducing sewage overflows. Do you have a lot of combined sewers and is that a theme also for you? Thank you very much. Very good. I'll take one and three, and I think Shane will jump in on number two. You're allowed three questions, James. That's fine. I mean, as it stands on ODIs, I think if we look at what Ofwat has said, it's said that broadly the range is not dissimilar to this period, is what they've said. That's their assessment of the range. I mean, the targets are very hard, so I think as it stands now, I think it looks harder to achieve the same numbers. I guess when you look at it's worth being clear that they are capping the vast majority of metrics. The metrics in the current version of the document, the vast majority of the metrics are capped at about GBP 9 million a year. Now they're collared as well, so there's downside, but they are capped. You know, you'd have to make good money on the uncapped ones, which are the commons, so the kind of like the sewer-to-sewer flooding ones and pollutions. You'd have to make good money on those to get to similar numbers. I think, and there's, you know, there's not as many bespokes as you've had before, and typically the sector's performed quite strongly on bespoke. My sense of it is, there is as good an opportunity at this stage because you know the areas. What you've now got to do is get into the detail. We don't know quite a lot of detail for quite a lot of measures. For some of them, the detail is still to be issued as to exactly what the what the actual measurement process is. Of course, the key thing is the written targets. I can't tell you whether the numbers are gonna be the same until I've seen the targets. It comes down to those targets. The great thing is Ofwat commits to a very strong continuation between performance in this AMP through to the AMP after. If you perform strongly in the next five-year period, years 2025-2030, it'll be the same measures in years 2030-2035. It's really worth being a good ODI performer because they've committed to the very long term on ODIs. That's great news for us. It's one of the debates we've had with you guys for a long time, is that you don't factor in the models long enough. ODI performance outcomes for longer, because you'd be worried that the regulator might get rid of ODIs. They're firmly in on them for the next two or three AMPs, is what they say in their own statements. When you look at the metrics, you make more money on waste measures. That's the other factor we can see, is there is of the 20 metrics, way more of them are waste and environmental metrics. A much smaller number are water ODIs. That's the facts that we've seen so far. In terms of number three, what the document says is it says that every company in this five-year period has to get down to an average of 20 CSOs from their own funding. They won't fund, but thereafter the regulator will fund scale investment from an average of 20 CSOs to a max of 10 CSOs for every company over a 15-year journey. We will all have an equal opportunity because the reality is everyone will have to fund themselves down to an average of 20 by 2025, and thereafter we actually have more CSOs than anybody else. I guess on paper we have a good funding opportunity for long-term RCV growth on that basis. We're on track to get ourselves down to that average of 20, which is a starting gate position. We're upper quartile already in the sector, and we're one of only three companies committed to get to the average of 20 by 2025. It is definitely one of the focused investment areas that is laid out in the document. If you look at our most recent newsletter, we've also listed in that newsletter the other investment areas that have come out of here as well. That might help as well with other investment themes. Shane, we're not an outlier, are we, on the RCV? No, sorry. On the patient. Sorry, just wanna touch on that. of what has said on financeability leaders, you've got flexibility for pay as you go and run-off, but run-off is within a narrower band. On the RCV run-off at PR19 the range was 3.7%-7.1%, and our rate was 4.6%. We're at the bottom end of the range as compared to PR19 rates. You wanna be lower. Yeah. Lower is considered to be better, just in case that was another question somebody was gonna ask us. Great. Thank you very much. Great. Martin, you're up next, if that's all right. Martin Young. Yeah. Hi there. Good afternoon to everybody. Just a question around the categorization of the business plans. Getting fast-tracked in PR19 was obviously great for people to get an early start, getting Totex programs, etc., up and running. When we think about those four categories for PR24, where would you need to be in order to get that head start? And sort of a linked question to that, what about sort of your management incentivization to get Severn Trent into the outstanding, you know, category? What's the sort of the broad thinking about that? I mean, it's one of the interesting things from the other price review. Actually, Martin, there is no head start. Last time round, if you've got fast-tracked, you did actually settle earlier and you went through quicker. Actually, Ofwat's not got that in this price review. One of the things they've done is they've gone from three gates to two gates, so there is no head start. There's no reason that any company in any categorization actually can't have an equal start on their performance. That's one thing. The second thing is, if you look at it, then, the way I would view plans at this stage is you need to get the right plans to run your business for the long term. At this stage, you need to make sure that you understand the detail of the document, you go into consultation with Ofwat to really discuss all the details in the areas where we've got views, and then we'll work through the investment priorities in the portfolio. We need to make sure that actually the right investment is funded for the long term. That's the most important thing. I'm confident we'll put forward a quality plan. I mean, there are a lot of boxes to tick for a quality plan. I'm sure my reg team felt slightly nervous when they saw the sheer list of things you've got to do to have a quality plan, but we back ourselves to put forward a quality plan. I think it'll come down to, you know, the scale of investments and where we land on that and the conversations with Ofwat. It's important to note as well that actually if you look last time around, fast track is the equivalent standard. So nobody, there was always an exceptional situation last time around as well, but it was never handed to anybody. So the outstanding is the same as last time's exceptional, which hasn't been handed to anybody. The fast-track status is equivalent to standard, just to make that clear as well. Okay. Thank you. Oh, I've got a question here that's been typed in. Thank you, Peter. Question as follows. This is just a draft methodology. What do you expect of the outcome of the financial resilience consultation, which could potentially have an impact? Great question. I know that Shane and James. I think James wants to chip in first, and then Shane might add a comment if he wants to afterwards. Yeah. It's a great question, Peter, and we've been obviously looking at this. We provided our response to the consultation, as I think many others did, earlier in the year, and we've also been kind of keeping an eye on things as they go. I think they're gonna be coming out later in the year. I think you're gonna see something probably in the autumn on this. I think it's very much watch this space on that. I definitely get the impression that Ofwat are, you know, wanting to focus on, you know, those companies that they believe lack financial resilience. And I think they will be probably, you know, focused on those companies. It's some. It's less something that I think is probably of less concern to the lenders which are broadly much sort of, you know, are at the lower end of the kind of gearing range, if you will. I think there'll be some targeted approaches, I'd like to think, from Ofwat on that. Yeah, I think it'll be something that we'll learn more about in the autumn. Yeah. I suppose the only other thing to add is we'll probably have more data tables to submit as well. Yeah. With these things, Ofwat does want more information to monitor the sector. Yeah. with that will come more reporting, requirements. Yeah. Very good. Any other questions that people have got? There's no more coming through on the view question situation. Anybody else on the phone wants queries on anything? Oh, yep, there's a question coming through. Pawan. Hi, guys. Thank you for the very clear presentation. I have two questions, please. On gearing, I mean, if Ofwat does reduce the gearing levels, what is your thinking about being in line with that notional versus potentially staying at the 60% of this? Like what is your thinking on would you want to be in line with what they say or would you make your own decision? Then my second question is, can you just highlight, in your view, kind of what you're going to submit to Ofwat or maybe things in the draft document that you're not particularly happy with? Thanks. On the first one, we've always said we're happy with gearing up to about 67%-68%. That's been our long-term answer on gearing. We wanna be in the 60s and, you know, nothing's changed for us, you know, as it stands today. Yes. Now, we're liking the fact that we've been able to work hard with our cost base. We've not overspent on the AMP. We've managed inflation well, in spite of it being a challenge, which means that we enter into this position with a good gearing position. Strong cost control and good delivery has been good. We also did an equity raise on the green recovery, which again has helped our gearing and Ofwat's call for it in the document. We've worked hard to have a decent gearing position 'cause we know we want a strong investment AMP. In terms of like issuing a number, we'll just wait and see how time plays out over that. That's what we've been comfortable up to. Yeah. I think, you know, it's important to note that the gearing that they're using is how they kind of look at the notional company and the financing. It is largely a sort of the way that the WACC is calculated for the sector as a whole. I think Liv's absolutely right. What we have to do is to get the right gearing for us, and that will be ultimately a decision we'll make that's in the interest of all of our stakeholders and works for the plan that we want to have for AMP8. In terms of the second part, I mean, you know, if we began to list out every last comment we've got on 1,544 pages, you'd still be here tomorrow morning, right? The best thing to do at the moment is we've got teams of people crawling through, pulling out things, and then what we'll have to do is slim down to what we're very energized about and what we're not. The one big overarching thing that we're really surprised isn't in there, and we've openly said to Ofwat already, is past delivery isn't factored. We find that, I guess, interesting and probably not right for the sector reputation, that past performance hasn't actually been flagged as being a real criteria for success going forward. That's our one kind of overarching comment, but I can promise you there's a lot of other stuff we'll work through Ofwat on and have good conversations about. It's the start of an 18-month dialogue is the key position, I'd say. Thank you. No more questions coming through. I'll just say that one last time in case somebody was tempted. No? In which case, thank you very much for dialing in, and hopefully, that saves many of you from having to read all of the documents. We'll keep you up to date as we go through the next few dates and phases. Thank you very much, everyone.