Slides
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Half Year Results 2025/26 19 November 2025 Valve tower at Carsington Reservoir, Derbyshire
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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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HALF YEAR HIGHLIGHTS 4* EPA status confirmed for a record sixth consecutive year Upgrading ODI guidance to at least £40m net reward in FY26 13% asset base growth to £15.4bn this year On track for c. 90% of performance measures Halving average storm overflow spills in 2025 to around 13 4
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5 HELEN MILES Chief Financial Officer
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HALF YEAR FINANCIAL HIGHLIGHTS 6 £769m investment in the first half 74% first half adjusted EPS growth Interim dividend 50.40p in line with policy Over £900m new debt raised, c. 80bps lower than allowance Regulatory Return of around 13% this year
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£295m £467m £215m £18m £10m £6m £39m £6m HY25 Turnover Drought Costs Efficiency Pricing Effects Investment Costs Bad Debt HY26 59% INCREASE IN REGULATED WATER AND WASTEWATER PBIT 7
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TARGETING AT LEAST £500M OF CAPITAL EFFICIENCIES IN AMP8 8 Direct Procurement Securing preferential rates Value Engineering Innovative technologies Smart Solutions On sub-£10m projects Plug and Play Standardisation and modular systems Contingency Reinvestment for ODIs Ofwat reopeners1 Plug and Play: Lower Moor Treatment Works 1 Additional expenditure approved by Ofwat over and above the Final Determination.
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7.9% 8.9% c. 10% 2.5% 5.3% c. 3% AMP6 average AMP7 average FY26 forecast RoRE RCV inflation DELIVERING LONG-TERM VALUE Nominal Regulated Capital Value (£bn) 9 Regulatory Return of around 13% this year Source: Severn Trent Water Annual Performance Report 2020, Ofwat’s Monitoring Financial Resilience Report 2024-25, and internal modelling using Oxford Economics inflation forecast. Source: Regulatory Capital Value Updates (Ofwat), updated using Oxford Economics inflation forecast for AMP8. RCV includes Severn Trent Water and Hafren Dyfrdwy (HD). 10.4% 14.2% c. 13% 0 5 10 15 20 25 AMP8AMP5 AMP6 AMP7AMP4
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CONFIDENCE IN SUSTAINED OUTPERFORMANCE -4% -3% -2% -1% 0% 1% 2% 0% 1% 2% 3% 4% 5% 6% 7% 8% Average AMP7 Regulatory Return AMP7 ODIs vs Totex Totex overspend ODIs out/(under) performance Other WASCs Source: Ofwat’s Monitoring Financial Resilience Report 2024-25, excluding HD. On a notional company basis. Source: Ofwat’s Monitoring Financial Resilience Report 2024-25 excluding HD. Severn Trent Water Other WASC average Severn Trent Water 14.2% 5.8% Better performance Better performance 10
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50% 55% 60% 65% 70% 75% 80% 85% 90% 85 95 105 115 125 135 145 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 11 MAINTAINING OUR FINANCIAL STRENGTH Over £900m debt issued this year, c. 80bps lower than regulatory allowance Pension expected to be fully funded in AMP81 61.5% regulated gearing and outlook of 60%-65% at FY30 Raising new debt at narrower spreads Severn Trent Water spreads (bps) 1In line with journey plan and latest forecasts. Lowest regulated gearing of the WASCs Severn Trent Water Other listed WASCs Non-listed WASCs Source: Bloomberg. Source: Ofwat’s Monitoring Financial Resilience Report 2024-25, excluding HD.
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95 105 115 125 135 145 Jan-14 Jan-16 Jan-18 Jan-20 Jan-22 Jan-24 Construction Output Pricing Index vs inflation 100% New debt allowance linked to iBoxx plus 30 bps 38% Base costs protected AMP8 DERISKED WITH 54% OF OUR TOTEX PROTECTED 12Source: Bloomberg and S&P. Source: Office for National Statistics. 77% Enhancement costs protected May-20 May-21 May-22 May-23 May-24 May-25 15 year gilt rate vs iBoxx iBoxx A/BBB Gilt rate CPIH COPI Infrastructure index
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8% 10% Other listed WASCs SVT Nominal RCV CAGR – AMP8 FY25 FY30 Nominal equity RCV 29% 60% SVT Average AMP5-AMP7 SVT AMP8 Nominal RCV growth per AMP SUSTAINED AND SIGNIFICANT GROWTH 13 Growing more than ever before… …and increasing value for shareholders…more than our peers… Source for all charts: Ofwat, updated with Oxford Economics inflation forecast. £7.7bn - £8.8bn £5.1bn Range based on regulated gearing outlook of 60%-65%
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INFRASTRUCTURE SERVICES: DOUBLING EBITDA TO £100M IN FY30 14 Green Power Operating Services Current Businesses Complements regulated business Additional returns enhance EPS growth Cash positive for the Group Watertight Industrial Water Jetting Systems Complementary Acquisitions Property Development
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See appendix (slides 26 and 27) for details GUIDANCE AND OUTLOOK 15 FY26 Around £2.6bn 5% - 8% higher At least £40m 25% - 30% 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 Around 13%STW Reg Return 11.9% Regulated gearing between 60% - 65% at FY30 Doubling Infrastructure Services EBITDA to around £100m in FY30 Upgraded New guidance Upgraded Updated
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16 LIV GARFIELD Chief Executive
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CREATING VALUE FROM GROWTH 17 Work in progress at Wanlip Waste Treatment Works Asset base investment Performance culture Insourced workforce Fast start to AMP8
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FAST START TO AMP8 INVESTMENT PROGRAMME On track for maximum Price Control Deliverable (PCD) rewards this year FY21 FY22 FY23 FY24 FY25 FY26 guidance Capital investment since the start of AMP7 (£bn) Mains Renewals 0.6 0.6 0.7 1.2 1.7 1.7 - 1.9 Metering Confidence in AMP8 delivery 18 Source: Annual Report and Accounts FY21-FY25, and current year guidance. Thousands of capital projects in AMP8 80% of enhancement schemes contracted by March 2027 Plug and Play assets can be deployed across multiple projects
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FY21 FY22 FY23 FY24 FY25 FY26 forecast Megalitres per day leakage since the start of AMP7 CONSISTENTLY OUTPERFORMING IN WATER Hitting leakage target for eighth consecutive year… Supply Interruptions Water Quality ComplaintsCompliance Risk Index (CRI) 19 …and on track to deliver other key water ODIs Around half of our network remotely pressure- controlled this year No-dig technology used on around half of communication pipe repairs Reduction of bursts of over 20% in pressure- controlled areas Source: Annual Performance Reports FY21-FY25, and current year forecast.
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> 2,700 interventions delivered Lowest average spills in 2024 Achieving 2030 target in 2025 LEADING SPILLS PROGRAMME 20 Jan to Oct 2024 Jan to Oct 2025 Jan to Oct 2025 (Weather-adjusted) Average storm overflow spills c. 27% reduction YoY with like-for-like weather conditions c. 50% reduction YoY £1.5bn storm overflow investment by 2030 to approach world-leading spill levels Significant opportunity beyond 2030 getting all storm overflows to 10 spills Source: Internal data from Event Duration Monitors.
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ON TRACK FOR 100% OF WASTE AND ENVIRONMENT TARGETS On track for all other waste and environment ODIs Internal sewer flooding Sewer collapses External sewer flooding220 176 Jan to Oct 2024 Jan to Oct 2025 20% reduction in pollutions YTD Waste GHGs Investing £400m across five years: • Upgrading over 400 of our highest priority pumping stations • Sevenfold increase in our annual investment in proactive works • Utilising AI to predict and prevent future pollutions BiodiversitySerious pollutions River water qualityWater GHGsStorm overflows Discharge permit compliance River Teme, Tenbury Wells 21 234 – Jan to Dec Ofwat target Source: Internal reporting against Ofwat target.
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7 4 6 8 6 8 1 4 2 2 1 1 1 1 1 1 2019 2020 2021 2022 2023 2024 SIX CONSECUTIVE YEARS OF EPA 4* 22 Supply-Demand Balance Index WINEP delivery Self-reporting of pollutions Serious pollutions Total pollutions – Discharge permit compliance Sludge use and disposal Environment Agency EPA ratings Source: Environment Agency Environmental Performance Assessment (EPA) 2019-2024. Non-4* companiesOther companies with 4*Severn Trent Water
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Engagement score of 8.8/10 within the top 5% of utilities Trustpilot score of 4.9 the highest in the FTSE100 Second place in 2025 Social Mobility Index c. 15,000 attendees at our employability events since 2023 Giving back to our communitiesDelivering for customers Accelerated AMP8 investment to deliver early customer benefits Frontloaded capital programme to fast-track improvements Further improving performance levels for customers £575m affordability package CUSTOMERS, COMMUNITIES AND COLLEAGUES Perpetuating our high-performance culture 23 Customers enjoying cycle paths at Upper Derwent Valley reservoir Education team visiting a local school Reservoir Rangers at Upper Derwent Valley
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24 LONG-TERM VALUE CREATION Top operational performance2 At least £300m of AMP8 outperformance Strong financial growth3 EPS doubling between FY25 and FY28 Creating shareholder value4 Long-term growth beyond AMP8 Early and sustained investment1 60% asset base growth in AMP8 River Avon, Warwick
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APPENDIX
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TECHNICAL GUIDANCE 2025/26 26 Regulated Water and Wastewater FY25 Year-on-year Turnover Around £2.6 billion including HS2 related income. £2.25bn ▲ Operating costs & IRE 5% - 8% higher year-on-year including continued investment in operational performance and increases in national insurance and pay. £1.2bn ▲ ODIs1 At least £40 million of ODI reward. £68m ▼ STW Regulatory Return2 Around 13%. 11.9% ▲ Infrastructure Services EBITDA 15% - 25% increase year-on-year driven by higher property profits and the performance of our new acquisitions. £47m ▲ Group Net finance costs3 25% - 30% higher year-on-year driven by higher inflation and includes 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 ▲ Dividend4 2025/26 dividend of 126.02 pence, in line with our AMP8 policy of annual growth by CPIH. 121.71p ▲ 1. Outcome Delivery Incentives are quoted post-tax in 2022/23 prices. 2. Regulatory return: the return generated on actual regulatory equity, calculated using average gearing applied to the Final Determination RCV. It encompasses the base return, outperformance, and the uplift to our RCV from inflation. 3. Based on Oxford Economics October inflation forecast. Index-linked debt comprises around a quarter of our total debt. 4. 2025/26 dividend growth rate based on November 2024 CPIH of 3.53%.
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OUTLOOK STATEMENT 27 Long-term earnings Financial resilience Our long-term earnings outlook remains unchanged. We project Group adjusted EPS to double in the 3-year period to 2027/28, from 112.1 pence in 2024/25, benefitting from regulated revenue growth including ODI outperformance, continued cost management, and our strategic approach to financing. We expect this Group adjusted EPS growth to be weighted towards 2025/26 reflecting our bill profile. In addition, we anticipate increasing EBITDA from Infrastructure Services to around £100 million in the period 2029/30, driven by growth in Network Services as well as our Green Power, Operating Services, and Property businesses. This includes our long- term plan to achieve £150 million of profit from our Property business by 2032. We expect regulated gearing to be between 60% – 65% at the end of the AMP . We expect Plc gearing to remain within thresholds consistent with our current credit ratings.
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Waste Water H1 2024 H1 2025 Variance Variance £m £m £m % 510.6 Regulated Water and Wastewater 704.2 193.6 37.9 24.4 Infrastructure Services 21.3 (3.1) (12.7) 13.0 Operating Services and Other 11.8 (1.2) (9.2) - Network Services (1.3) (1.3) n/a 10.5 Green Power 9.4 (1.1) (10.5) 0.9 Property Development 1.4 0.5 55.6 (10.8) Corporate and other (7.2) 3.6 33.3 (0.6) Consolidation adjustments (2.1) (1.5) (250.0) 523.6 Severn Trent Group 716.2 192.6 36.8 1. Earnings before interest, tax, depreciation and amortisation. EBITDA¹ 28
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79.9 43.0 122.9 Cash interest (including accruals) 95.4 72.0 167.4 5.0 – 5.0 Net pension finance cost 3.4 – 3.4 39.7 – 39.7 Inflation uplift on index-linked debt 62.4 – 62.4 124.6 43.0 167.6 161.2 72.0 233.2 H1 2024 H1 2025 Income statement charge £m Capitalised interest £m Gross interest incurred £m Income statement charge £m Capitalised interest £m Gross interest incurred £m NET FINANCE COSTS 29
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H1 2024 £m H1 2025 £m Variance £m Variance % 297.8 Profit before interest and tax 466.2 168.4 56.5 (124.6) Net finance costs (161.2) (36.6) (29.4) 0.6 Share of current year profit/(loss) of joint venture (1.6) (2.2) (366.7) 173.8 Adjusted profit before tax 303.4 129.6 74.6 (0.2) Current tax (0.1) 0.1 50.0 173.6 Earnings for the purpose of adjusted basic and diluted earnings per share 303.3 129.7 74.7 299.4 Weighted average number of ordinary shares for basic earnings per share (m) 300.3 0.9 0.3 58.0 Adjusted basic EPS (pence) 101.0 43.0 74.1 ADJUSTED EARNINGS PER SHARE 30
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31 March 2025 £m 30 September 2025 £m Variance £m Variance % (784.7) Bank loans (787.4) (2.7) (0.3) (8,798.0) Other loans (9,844.2) (1,046.2) (11.9) (111.1) Lease liabilities (113.7) (2.6) (2.3) 1,044.8 Net cash and cash equivalents 1,449.2 404.4 38.7 23.1 Fair value accounting adjustments 18.6 (4.5) (19.5) 9.4 Exchange on currency debt not hedge accounted 73.9 64.5 686.2 71.2 Loans receivable from joint ventures 53.8 (17.4) (24.4) (8,545.3) Adjusted net debt (9,149.8) (604.5) (7.1) ADJUSTED NET DEBT 31
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31 March 2025 £m 30 September 2025 £m Variance £m Variance % (783.8) Floating rate debt 2 (779.8) 4.0 0.5 (6,096.8) Fixed rate debt (7,164.6) (1,067.8) (17.5) (1,703.4) Index-linked debt (1,647.4) 56.0 3.3 (8,584.0) (9,591.8) (1,007.8) (11.7) 1,044.8 Net cash and cash equivalents 1,449.2 404.4 38.7 71.2 Loans due from joint venture 53.8 (17.4) (24.4) 23.1 Fair value accounting adjustments 18.6 (4.5) (19.5) 9.4 Exchange on currency debt not hedge accounted 73.9 64.5 686.2 (7,435.5) Fair value of net debt (7,996.3) (560.8) (7.5) (8,545.3) Adjusted net debt (previous slide) (9,149.8) (604.5) (7.1) (1,109.8) Difference (1,153.5) 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. FAIR VALUE OF DEBT 1 32
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DEBT MATURITY PROFILE 33 0 100 200 300 400 500 600 700 800 900 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 FY39 FY40 FY41 FY42 FY43 FY44 FY45 FY46 FY47 FY48 FY49 FY50 FY51 FY52 FY53 FY54 FY55 FY56 FY57 FY58 FY59 FY60 FY61 FY62 FY63 FY64 FY65 FY66 FY67 FY68 FY69 £m Debt FY26 Funding
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34 1. Based on Severn Trent Water Group regulated adjusted net debt of £8,832m (31 March 2025: £8,487m) and Hafren Dyfrdwy regulated adjusted net debt of £88m (31 March 2025: £81m) divided by estimated FD RCV of £14,511m, calculated using opening and closing FD RCV for the year. 31 March 2025 Adjusted net debt/RCV 30 September 2025¹ 62.7% Regulated gearing 61.5% 31 March 2025 30 September 2025 Severn Trent Water Severn Trent Plc Severn Trent Water Severn Trent Plc Outlook Baa1 Baa2 Moody's Baa1 Baa2 Stable BBB+ BBB Fitch BBB+ BBB Stable GEARING AND CREDIT RATINGS