National Grid Plc · LSE:NG.
National Grid — Debt Investor Presentation (November 2024)
36 slides from National Grid's debt investor presentation, Nov 7, 2024
Slide 1: Half Year Results Debt Investor Update 2024/25
Half Year Results Debt Investor Update 2024/25 7 November 2024
Slide 2: Cautionary statement
Cautionary statement This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securit
Slide 3: Starting from a position of strength
Starting from a position of strength Updated strategy • Pureplay networks business New era of growth • £60bn capital investment over the next 5 years • Successfully completed £7bn Rights Issue Capital delivery • Record capital investment • UK: Construction underway on 5 ASTI1 projects • US: Progress
Slide 4: Policy and regulatory progress
Policy and regulatory progress UK US Policy Policy • ESO sold to UK Government • Need for long-term holistic energy planning • NESO & Mission Control established recognised by policymakers • 2030 Clean Power Plan • Planning reform in King’s Speech Regulation • Investment Summit – growth at the heart
Slide 5: Financial highlights
Financial highlights Underlying operating profit Underlying EPS £2,046m 15% 28.1p 8% Good underlying HY24: £1,785m HY24: 25.9p operational performance Capital investment DPS in line with policy across our regulated businesses £4,603m 19% 15.84p HY24: £3,877m 35% of FY24 rebased dividend Underlying r
Slide 6: Reliability and safety
Reliability and safety Reliability • Strong performance across UK and US networks despite storms Winter outlook • NESO forecasts winter electricity capacity margin of 8.8% – Slightly higher than last year Safety • Lost Time Injury Frequency Rate 0.1 6 National Grid plc Half Year Results 2024/25 – De
Slide 7: Operational progress: UK Electricity Distribution
UK Electricity Distribution Operational progress Underlying operating profit £573m (HY24: £563m) Capital investment of £647m, up 6% Connections • Increased customer connections, • Leading role in Technical Limits asset health and network Initiative – accelerated reinforcements connection dates on 28
Slide 8: Operational progress: UK Electricity Transmission
UK Electricity Transmission Operational progress Underlying operating profit1 £724m (HY24: £656m) Capital investment1 of £1.3bn, up 43% Regulation – T3 • 2.3GW of new customer connections • SSMD published in July • London Power Tunnels – energised • Business plan 2.5km circuit submission in December
Slide 9: Operational progress: UK Strategic Infrastructure
UK Strategic Infrastructure Operational progress ASTI progress Key Wave 1 projects Wave 1 EGL1 Eastern Green Link 1 EGL2 Eastern Green Link 2 • First 5 projects under construction EGL2 YG Yorkshire Green – Eastern Green Links 1 & 2 B-T Bramford to Twinstead – Yorkshire Green EGL1 NLR North London Re
Slide 10: Operational progress: US New York
US New York Operational progress Underlying operating profit £288m (HY24: £115m) $4bn Upstate Upgrade £1.6bn capital investment, up 29% on the prior year 1 Electricity Transmission Projects • $4bn Upstate Upgrade – Smart Path Connect project – CLCPA Phase 1 & 2 • 161 miles of gas pipeline replaced R
Slide 11: Operational progress: US New England
US New England Operational progress Underlying operating profit £237m (HY24: £211m) £814m capital investment, up 7%1 Policy progress • Grid modernization and storm hardening • Proposed energy and climate • Asset health work bill – accelerated siting and permitting for clean energy • 66 miles of gas
Slide 12: Operational progress: NG Ventures and Joint Ventures
NGV NG Ventures and Joint Ventures Operational progress Underlying contribution £207m Underlying operational delivery Portfolio • £279m capital investment • Commenced sales process on National Grid • Progress on Propel NY Energy Renewables transmission project • Grain LNG 4th phase expansion on trac
Slide 13: Interest, tax and earnings
Interest, tax and earnings Finance Underlying Underlying costs effective tax rate 1 earnings 2 £670m 11.9% £1,271m HY24: £698m Underlying tax charge: £164m HY24: £1,033m3 • Lower average net debt • 180 bps higher than • 28.1p per share reflecting rights issue prior year3 proceeds • Principally due t
Slide 14: Cash flow and net debt
Cash flow and net debt Cash generated Net debt (£bn) from operations1 £2.7bn 2.7 HY24: £3.1bn 42.3 6.8 (0.5) Op cash (4.3) (0.8) 0.7 (0.8) flow Dividend UK Gas Net Other 38.5 Net cash inflow 2 disposal interest Rights paid Capital £3.5bn Issue4 investment HY24: £(2.6)bn Net debt 3 Opening Closing £3
Slide 15: Financing National Grid's operations
Financing National Grid’s operations Funding & committed facilities National Grid National Grid National Grid National Grid • External debt is issued by our UK (five) and US (six) plc (NG) North America Electricity Electricity operating companies, our US holding company National Grid (NGNA) Transmis
Slide 16: Debt issuance
Debt issuance • Continue to expect lower than normal issuance in FY25 as we utilise the rights issue proceeds • Issued c. £1.8bn of new long-term debt so far in FY25: – $600m of 144A/RegS bonds at KEDNY – €1.5bn of 7-year and 12-year green bonds at NGNA, our largest ever green bond issuance – a NOK1
Slide 17: FY25 Guidance
FY25 Guidance Underlying EPS Continued strong underlying (illustrative) business performance across the group • Operating profit growth c.10% • Lower financing costs Additional Operational 6-8% share count performance CAGR 78.0p From FY25 Adjusted for • 6-8% underlying EPS CAGR to Bonus bonus and FY
Slide 18: Delivering an attractive combination of growth and yield
Delivering an attractive combination of growth and yield FY2025 - 2029 Asset base Dividend per share (£bn) (pence) Capital investment Asset growth of Aim to grow DPS in c.£60bn – of which c.£51bn green1 c.10% per annum2 line with UK CPIH5 Group asset growth 2 c.10% CAGR (from a FY24 baseline) ~100 C
Slide 19: Priorities & Outlook
Priorities & Outlook
Slide 20: US priorities
US priorities Regulatory focus • New York Niagara Mohawk rate case – settlement in spring • Massachusetts Electric enhanced recovery – earn closer to the allowed return • Massachusetts Electric Sector Modernization Plan – focused on agreeing cost and recovery mechanisms Policy priorities • New York
Slide 21: UK priorities: capital delivery
UK priorities Capital delivery • 6 ASTI projects under construction by year end • Secure tier 1 supply chain for all 17 ASTI projects – Including HVDC and converter station contracts • Finalise £59bn HVDC framework • Continued progress on Hinkley and London Power Tunnels • 4.5GW of clean energy conn
Slide 22: UK priorities: policy focus
UK priorities Policy Focus • Continue to engage on Government’s Clean Power Plan • Advocating for – Planning reform – including fast-track consenting – Community benefits framework – Developing green energy skills pipeline in workforce 22 National Grid plc Half Year Results 2024/25 – Debt Investor U
Slide 23: New era of growth underway
New era of growth underway Executing our strategy Major projects delivery underway Policy and regulatory momentum Low-risk, high-quality asset growth Strong earnings growth Inflation-protected dividend Delivering long-term value and returns for shareholders 23 National Grid plc Half Year Results 202
Slide 24: nationalgrid
nationalgrid QcA
Slide 25: Appendices
Appendices 25 National Grid plc Half Year Results 2024/25 – Debt Investor Update
Slide 26: Pensions & other post employment benefit obligations (IAS 19 data)
Appendix 1 Pensions & other post employment benefit obligations (IAS 19 data) UK US As at 30 September 2024 (£m) ESPS NGUK PS NGED DB Pensions OPEBs1 Total Fair value of plan assets 2,310 4,208 4,978 5,178 2,573 19,247 Present value of liabilities (1,909) (3,815) (4,468) (4,789) (2,391) (17,372) Net
Slide 27: Timing impacts
Appendix 2 Timing impacts UK Electricity UK Electricity System UK Electricity Total continuing £m Transmission Operator Distribution New York New England operations 31 March 2024 Closing Balance 150 877 (283) 647 (441) 950 Opening balance restatement adjustment 4 64 (5) - - 63 Over / (under) recover
Slide 28: Weighted average number of shares
Appendix 3 Weighted average number of shares For the half year ended 30 September 2024 2023 Number of shares (millions): Current period opening shares 3,720 3,677 IFRS 'bonus shares' (Rights Issue) 302 299 Rights Issue ‘fully subscribed shares’ (pro rated) 471 - Scrip dividend shares (weighted issue
Slide 29: Accelerated Strategic Transmission Investment
Appendix 4 Accelerated Strategic Transmission Investment Key Name Wave 1 projects EGL1 Eastern Green Link 1 EGL2 Eastern Green Link 2 YG Yorkshire Green B-T Bramford to Twinstead EGL2 NLR North London Reinforcement G-T Grain to Tilbury EGL3 Wave 2 projects EGL1 EGL3 Eastern Green Link 3 EGL4 EGL4 Ea
Slide 30: Financial Performance
Financial Performance
Slide 31: UK Electricity Distribution
UK Electricity Distribution UK Electricity Distribution Underlying operating profit (£m) (21) (17) 57 (9) Underlying Capital Controllable Depreciation 563 Net costs Other 573 operating profit investment revenue £573m £647m HY24: £563m HY24: £608m • Increased revenues • Reinforcement work Partially o
Slide 32: UK Electricity Transmission
UK Electricity Transmission UK Electricity Transmission Underlying operating profit (£m) 84 3 (17) Depreciation (2) 724 Underlying Capital Controllable Other 656 Net revenue costs operating profit investment £724m £1,290m HY24: £656m HY24: £899m • Higher allowed • Customer revenues connections • Low
Slide 33: US Regulated – New York
US New York US Regulated – New York Underlying operating profit (£m) Underlying Capital 3 (5) (40) 81 288 operating profit investment 169 137 Controllable costs Depreciation Other 1 £288m £1,569m 195 HY24: £115m HY24: £1,217m Net 115 revenue • Higher revenues • Smart Path Connect driven by rate and
Slide 34: US Regulated – New England
US New England US Regulated – New England Underlying operating profit (£m) Underlying Capital 60 (21) (24) operating profit investment Controllable 11 Net revenue costs Depreciation Other 1 237 £237m £814m 211 HY24: £211m HY24: £764m Higher revenues • Electric distribution asset condition work • Per
Slide 35: NG Ventures and Joint Ventures
NGV NG Ventures and Joint Ventures NG Ventures 6 months ended 30 Sept 30 Sept Operating profit (£m) 2024 2023 Operating profit & post tax share of JVs Interconnectors 128 139 • One-off benefit to the North Sea Link interconnector in the Grain LNG 68 79 prior period Smart Metering - 13 • Lower US Ven
Slide 36: Other activities
Other Other activities 6 months ended 30 Sept 30 Sept Operating profit (£m) 2024 2023 Operating profit Property 26 6 • Fair value changes in National Grid Partners NG Partners (26) 4 • Offset by higher property sales Corporate & Other (38) (23) Total Other (38) (13) Capital investment £4m HY24: £2m
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