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Full Year Results 2024/25 21 May 2025
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This document contains statements that are, or may be deemed to be, 'forward-looking statements' with respect to Severn Trent's financial condition, results of operations and business and certain of Severn Trent's plans and objectives with respect to these items. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would', 'should', 'expects', 'believes', 'intends', 'plans', 'projects', 'potential', 'reasonably possible', 'targets', 'goal', 'estimates' or words with a similar meaning, and, in each case, their negative or other variations or comparable terminology. Any forward-looking statements in this document are based on Severn Trent's current expectations and, by their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and no assurances can be given that the forward-looking statements in this document will be realised. There are a number of factors, many of which are beyond Severn Trent's control that could cause actual results, performance and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to: the Principal Risks disclosed in our latest Annual Report and Accounts (which have not been updated since the date of its publication); changes in the economies and markets in which the group operates; changes in the regulatory and competition frameworks in which the group operates; the impact of legal or other proceedings against or which affect the group; and changes in interest and exchange rates. All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Severn Trent or any other member of the group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. This document speaks as at the date of publication. Save as required by applicable laws and regulations, Severn Trent does not intend to update any forward- looking statements and does not undertake any obligation to do so. Past performance of securities of Severn Trent Plc cannot be relied upon as a guide to the future performance of securities of Severn Trent Plc. Nothing in this document should be regarded as a profit forecast. Certain information contained herein is based on management estimates and Severn Trent's own internal research. Management estimates have been made in good faith and represent the current beliefs of applicable members of Severn Trent's management. While those management members believe that such estimates and research are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice, and, by their nature, estimates may not be correct or complete. Accordingly, no representation or warranty (express or implied) is given to any recipient of this document that such estimates are correct or complete. This document is not an offer to sell, exchange or transfer any securities of Severn Trent Plc or any of its subsidiaries and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction. Securities may not be offered, sold or transferred in the United States, absent registration or an applicable exemption from the registration requirements of the US Securities Act of 1933 (as amended). Cautionary statement regarding forward-looking statements 2 DISCLAIMERS
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3 LIV GARFIELD Chief Executive
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2024/25 HIGHLIGHTS Earned £150m ODI reward 4* EPA status for five consecutive years, and confident of a sixth Outstanding Business Plan, securing £15bn totex Met or exceeded target on 83% of performance measures Lowest average storm overflow spills in the sector 4
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5 HELEN MILES Chief Financial Officer
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2024/25 FINANCIAL HIGHLIGHTS 6 Delivered a record £1.7bn of capital investment this year Adjusted EPS growth of 41% 121.71p proposed full year dividend, in line with policy AMP7 closing RCV of £13.7bn 9.7% real Return on Regulated Equity for the year
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£586m £480m £132m £91m £13m £7m £17m £15m £10m £18m £31m £32m FY 2023/24 Core & other revenue Bad debt Pay inflation Reg fees & rates Energy Efficiency Investment in technology AMP8 readiness Growing asset base Work volume increases & other FY 2024/25 REGULATED WATER AND WASTEWATER PBIT Investing for future benefits while delivering 22% increase in regulated PBIT 7 Price effects Investing for the long term
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8 FINANCING £678m financing outperformance delivered across AMP7 Stable outlook Credit ratings reaffirmed by all three ratings agencies £1.5bn New debt issued, in line with AMP8 requirement 62.7% Regulated Gearing £120m Pension deficit, supported by active derisking strategy STW y1-5 Rest of sector average y1-4 AMP7 RoRE Financing Outperformance STW Rest of sector average Sector range ¹ Excludes Thames Water and Southern Water 50 100 150 200 250 300 Apr-24 May-25 Sector Spreads¹ 0.3% 3.0%
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9.1% AMP7 cumulative RoRE Severn Trent Water AMP7 Rest of sector average¹ 5.2% (1.6%) 80 100 120 140 160 180 200 220 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024 Index Electricity price index vs CPIH allowance CPIH Electricity RETURN ON REGULATED EQUITY 9.7% actual real RoRE in FY25 Totex managed to around 1% of RoRE£434m ODI reward across AMP7 9 consecutive years of financing outperformance Real out/(under) performance on RoRE 1 WaSCs excluding Severn Trent and Hafren Dyfrdwy, across the first four years of AMP7. 9
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24% 10%66% Debt mix FY25 FY26 FY27 FY28 Average power trade price EARNINGS OUTLOOK Outlook of doubling adjusted EPS by 2028 Insourced c. 1,000 people over AMP7, and continued drive for efficiency >60% of wholesale electricity costs locked-in for the next three years, at improving prices Energy hedging Control of service delivery costs Predictable financing 66% of debt at fixed rates, and nine consecutive years of outperformance High revenue visibility 5 year visibility on revenue, and leading bad debt performance at c. 2% Volume hedged 99% 50% 10 32% reduction 33% Fixed Index-linked Floating 1 2 4 3
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28% 59% SVT Average AMP5-AMP7 SVT AMP8 Nominal RCV growth per AMP £0m £200m £400m £600m £800m FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 Return on RCV driving revenue growth • RCV increases over time by compounding inflation • More than trebling absolute return on RCV over ten years • Over 50% of AMP8 revenue linked to the RCV UNPRECEDENTED RCV GROWTH Long-term scale growth driving additional value Nominal RCV of £21.7bn in 2030 11
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See appendix (slide 22) for details TECHNICAL GUIDANCE 12 FY26 Around £2.6bn Up to 12% higher At least £25m 20 - 25% higher £1.7bn - £1.9bn£1.7bn Turnover FY25 Operating costs & IRE Net finance costs Regulated Water and Wastewater Capital investment Group ODI outperformance £2.25bn £1.2bn £68m £244m Outlook Adjusted EPS doubling between FY25 and FY28
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13 LIV GARFIELD Chief Executive
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A RECORD YEAR 14 Growing by a further 59% whilst delivering benefits for all stakeholders Ambitious AMP8 programme Record engagement scores, and one of the top places to work in the UKPerformance culture Sector-leading operational performance delivering £150m of ODI rewards this year Leading operational performance £1.7bn capital investment delivered this year, in line with average AMP8 requirementDriving efficient growth Frontier spills performance, and confident of an unprecedented sixth consecutive year of EPA 4* statusEnvironmental leadership
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FY21 FY22 FY23 FY24 FY25 Performance Target Record year in Water positions us well for AMP8 PERFORMING IN WATER Best ever Supply Interruptions performanceBest ever Leakage performance 16.8% reduction over the AMP , outperforming our AMP7 leakage target Farming for Water Delivered improvements to 57 catchments against a target of 16 Water Quality Complaints Hit target every year of AMP7 Low Pressure Outperformed target by 98% 32% reduction year-on-year, our lowest ever levels 00:11:21 00:12:40 00:09:10 00:06:40 00:04:34 FY21 FY22 FY23 FY24 FY25 15
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Strong performance on key measures and investing for further improvement CONTINUED STRENGTH IN WASTEWATER Insourced c. 400 into our waste networks team Fast responses help prevent external floods becoming internal ‘Right first time’ approach and innovation in blockages Best ever Internal Sewer Flooding performance Beating our end of AMP targets Collaborative Flood Resilience 20% outperformance Water Framework Directive 32% outperformance Best ever performance on key measures Blockages 40% reduction over AMP7 Internal Sewer Flooding 20% year-on-year improvement Investing to improve pollutions Investing £400m in next two years Improving 400 sewage pumping stations 1.86 1.61 1.65 1.67 1.33 FY21 FY22 FY23 FY24 FY25 Nr/10,000 sewer connections 16
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- 500 1,000 1,500 2,000 FY21 FY22 FY23 FY24 FY25 AMP8 average DRIVING EFFICIENT GROWTH Record capital investment of £1.7bn positioning us well for £6.4bn AMP8 enhancement spend Already stepped-up capital run rate to deliver AMP8 Over £450m accelerated expenditure Getting ahead on our AMP8 programme… …and confident we can deliver it efficiently £4.1bn of AMP8 investment programme underway Diversified our supply chain to over 150 suppliers De-risking programme with expanded advanced procurement strategy Majority of AMP8 schemes involve smaller and repeatable solutions, allowing full leverage of plug and play programme Storm tanks in Braunston, Northamptonshire 17
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Jan to April 2024 Jan to April 2025 YTD spills comparison Transforming performance on spills Delivered 1,800 interventions On track for operational net zero by 2030 Achieving Net Zero Improved more than three times our original Biodiversity commitment Enhancing Biodiversity ENVIRONMENTAL LEADERSHIP Improving River Health Confident of reaching below 18 average spills this year Aiming to be under 2% of Reasons for Not Achieving Good Status (RNAGS) by 2030 Progress made on environmental priorities Sustaining EPA 4* Confident of a sixth consecutive year of the highest environmental rating 66% reduction 18
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Supported over 7,000 people with employment-related experience and training Donated £11.6m to around 900 local organisations in AMP7 10-year Social Impact Strategy generating £7m of social value to date Our communities Our customers Supported around 300,000 customers with their bills this year Trustpilot score of 4.8/5, 92% of reviews are 5 star £3m outperformance on the MeX’s, £18m across AMP7 Supporting our region and maintaining a culture that delivers operational success COMMUNITIES, CUSTOMERS AND COLLEAGUES 19 Our colleagues Engagement scores in top 2% of utilities 20% of workforce promoted or moved to broader roles in the past 2 years 29th in Glassdoor’s best places to work in UK
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AMP8 2025 – 2030 Growth Performance Environment Returns 2 20 3 4 5 59% nominal RCV growth, one of the highest in the sector Guiding to £300m in operational outperformance, including up to £50m in PCDs Proven track record on environmental performance, delivering Net Zero and halving spills by 2030 Doubling adjusted earnings per share between 2025 and 2028 Investment1 £15bn totex allowance, our largest ever programme Outstanding plan that delivers for all our stakeholders
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APPENDIX
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TECHNICAL GUIDANCE 2025/26 22 Regulated Water and Wastewater FY25 Year-on-year Turnover Around £2.6 billion including HS2 related income. £2.2bn ▲ Operating costs & IRE Up to 12% higher year-on-year including continued investment in operational performance and increases in national insurance and pay. £1.2bn ▲ ODIs At least £25 million of ODI reward with growth expected later in AMP8. 1 £68m ▼ Business Services EBITDA 15% - 25% increase year-on-year driven by higher property profits and strong generation performance in Green Power. £47m ▲ Group Net finance costs2 20% - 25% higher year-on-year including additional debt to fund the AMP8 investment programme. £244m ▲ Adjusted effective current tax rate Adjusted effective current tax rate of nil due to “full expensing" and other accelerated capital allowances on our substantial capital investment programme. 0.1% Capital investment Set to invest between £1.7 billion - £1.9 billion. £1.7bn ▲ Dividend3 2025/26 dividend of 126.02 pence, in line with our AMP8 policy of annual growth by CPIH. 121.71p ▲ 1. Customer Outcome Delivery Incentives are quoted post-tax in 2022/23 prices. 2. Based on Oxford Economics April inflation forecast. Index-linked debt comprises around a quarter of our total debt. 3. 2025/26 dividend growth rate based on November 2024 CPIH of 3.53%.
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2,152.0 2,249.0 23.1 83.5 25.5 11.1 2023/24 CPIH/K RFI reduction ODI and Green Recovery fast money Other 2024/25 REGULATED WATER AND WASTEWATER REVENUE Annual CPIH + K increase in tariffs Representing the recovery of higher revenue in 21/22 under the RFI mechanism Driven by in-AMP fast money for Green Recovery and ODI reward recognised Includes higher NHH consumption and fewer meter optants, partially offset by lower infrastructure renewal income, mostly in relation to HS2. 23
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RWWW PBIT RECONCILIATION 2024/25 £m 2023/24 £m Variance £m Variance % Core & other revenue £m Bad debts £m Price effects £m Work volume increases & Other £m Investing in the long-term £m Efficiency £m Turnover 2,249.0 2,152.0 97.0 4.5 132.3 (35.3) Net Labour costs (244.6) (200.9) (43.7) (21.8) (16.6) (8.8) (18.3) Net Hired and Contracted costs (274.5) (251.8) (22.7) (9.0) (24.0) (9.9) 11.2 Power (192.0) (283.0) 91.0 32.2 91.0 Bad debt (34.5) (27.3) (7.2) (26.4) (7.2) Other costs (323.4) (291.9) (31.5) (10.8) (15.1) 0.5 (19.2) 2.3 Net Opex (1,069.0) (1,054.9) (14.1) (1.3) (7.2) 59.3 (32.3) (47.4) 13.5 Infrastructure renewals expenditure (148.5) (207.2) 58.7 28.3 35.3 23.4 Depreciation (445.7) (410.3) (35.4) (8.6) (35.4) PBIT 585.8 479.6 106.2 22.1 132.3 (7.2) 59.3 (32.3) (59.4) 13.5 24
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31 March 2024 31 March 2025 Variance Variance £m £m £m % 889.9 Regulated Water and Wastewater 1,031.5 141.6 15.9 59.2 Business Services 47.5 (11.7) (19.8) 25.6 Operating Services and Other 21.2 (4.4) (17.2) 29.5 Green Power 22.7 (6.8) (23.1) 4.1 Property Development 3.6 (0.5) (12.2) (9.2) Corporate and other (19.5) (10.3) (112.0) 0.2 Consolidation adjustments (1.0) (1.2) (600.0) 940.1 Severn Trent Group 1,058.5 118.4 12.6 1. Earnings before interest, tax, depreciation and amortisation. 25 EBITDA¹
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160.1 69.6 229.7 Cash interest (including accruals) 163.7 103.1 266.8 13.4 – 13.4 Net pension finance cost 10.3 – 10.3 108.0 – 108.0 Inflation uplift on index-linked debt 69.9 – 69.9 281.5 69.6 351.1 243.9 103.1 347.0 31 March 2024 31 March 2025 Income statement charge £m Capitalised interest £m Gross interest incurred £m Income statement charge £m Capitalised interest £m Gross interest incurred £m 26 NET FINANCE COSTS
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31 March 2024 £m 31 March 2025 £m Variance £m Variance % 511.8 Profit before interest and tax 590.2 78.4 15.3 (281.5) Net finance costs (243.9) 37.6 13.4 (2.5) Increase in expected credit loss on loan receivable – 2.5 – 227.8 Adjusted profit before tax 346.3 118.5 52.0 (5.0) (0.5) (4.1) Current tax in relation to prior years Tax at the adjusted effective rate of 0.1% (2024: 0.2%) Share of current year loss of joint venture 0.6 (0.4) (10.8) 5.6 0.1 (6.7) 112.0 20.0 (163.4) 218.2 Earnings for the purpose of adjusted basic and diluted earnings per share 335.7 117.5 53.8 274.9 Weighted average number of ordinary shares for basic earnings per share 299.5 24.6 8.9 79.4 Adjusted basic EPS (pence) 112.1 32.7 41.2 27 ADJUSTED EARNINGS PER SHARE
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31 March 2024 £m 31 March 2025 £m Variance £m Variance % (783.5) Bank loans (784.7) (1.2) (0.2) (7,357.9) Other loans (8,798.0) (1,440.1) (19.6) (120.0) Lease liabilities (111.1) 8.9 7.4 951.4 Net cash and cash equivalents 1,044.8 93.4 9.8 29.8 Fair value accounting adjustments 23.1 (6.7) (22.5) 19.7 Exchange on currency debt not hedge accounted 9.4 (10.3) (52.3) 72.6 Loans receivable from joint ventures 71.2 (1.4) (1.9) (7,187.9) Adjusted net debt (8,545.3) (1,357.4) (18.9) 28 ADJUSTED NET DEBT
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31 March 2024 £m 31 March 2025 £m Variance £m Variance % (788.7) Floating rate debt 2 (783.8) 4.9 0.6 (5,049.5) Fixed rate debt (6,096.8) (1,047.3) (20.7) (1,957.9) Index-linked debt (1,703.4) 254.5 13.0 (7,796.1) (8,584.0) (787.9) (10.1) 951.4 Net cash and cash equivalents 1,044.8 93.4 9.8 72.6 Loans due from joint venture 71.2 (1.4) (1.9) 29.8 Fair value accounting adjustments 23.1 (6.7) (22.5) 19.7 Exchange on currency debt not hedge accounted 9.4 (10.3) (52.3) (6,722.6) Fair value of net debt (7,435.5) (712.9) (10.6) (7,187.9) Adjusted net debt (previous slide) (8,545.3) (1,357.4) (18.9) (465.3) Difference (1,109.8) 1. The floating, fixed and index-linked debt classification above is shown before the impact of interest rate swaps or cross curren cy swaps 2. The floating rate debt excludes the overdraft amount as this is included within net cash and cash equivalents 29 FAIR VALUE OF DEBT 1
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30 0 100 200 300 400 500 600 700 800 900 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 £m Debt FY25 Funding DEBT MATURITY
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1. Based on Severn Trent Water Group regulated adjusted net debt of £8,487m (31 March 2024: £7,292m) and Hafren Dyfrdwy regulated adjusted net debt of £81m (31 March 2024: £66m) divided by Economic RCV of £13,657m being RCV after midnight adjustments in accordance with Ofwat guidance in IN25/02. 31 March 2024 Adjusted net debt/RCV 31 March 2025¹ 61.3% Regulated Gearing 62.7% 31 GEARING AND CREDIT RATINGS 31 March 2024 31 March 2025 Severn Trent Water Severn Trent Plc Severn Trent Water Severn Trent Plc Outlook Baa1 Baa2 Moody's Baa1 Baa2 Stable BBB+ BBB Standard and Poor's BBB+ BBB Stable BBB+ BBB Fitch BBB+ BBB Stable