Pennon Group Plc · LSE:PNN
Pennon — Investor Day (March 2025)
26 slides from Pennon's investor day presentation, Mar 13, 2025
Slide 1: A vision towards a sustainable future – delivering for customers
Capital Markets Day A vision towards a sustainable future – delivering for customers 13 March 2025
Slide 2: Disclaimer
Disclaimer For the purposes of the following disclaimers, references to this There are a number of factors that could cause actual results, Without prejudice to the above, whilst Pennon Group accepts “document” shall mean this presentation pack and shall be deemed performance or achievements of Penn
Slide 3: We're doing this
We’re doing this A growing footprint – strong platform for delivery Delivering for our customers in K7 Largest ever investment programme – across 4 strategic priorities Confident in delivery – working with an innovative supply chain Focus on continued outperformance underpinned by a strong balance s
Slide 4: A growing footprint – strong platform for delivery
A growing footprint – strong platform for delivery RCV growth 34% K8 K7 30% SES / BRL 20% Additional investment Water Renewable 25% 1 1 retail energy Base services generation © Pennon Group plc 2025 1 Pennon Water Services – 80:20 joint venture with South Staffs, water2business – 30:70 joint venture
Slide 5: Delivering for our customers in K7
Delivering for our customers in K7 Created WaterShare+ Supporting customers who need it most First of its kind Sharing financial benefits £110m Kept bills as low as possible 100% of support affordability innovative scheme with customers through drive achieved for – c.100,000 customers giving them un
Slide 6: Largest investment programme across our four priorities
Largest investment programme across our four priorities Four strategic priorities being delivered Building water Tackling storm Delivering net zero Supporting resources, improving overflows and environmental affordability, delivering water quality and pollutions gains for customers Confident in deli
Slide 7: Delivering through our colleagues
Delivering through our colleagues c.4,000 brilliant colleagues – delivering for customers Funder of the Social and the environment Mobility Business Partnership Member of the #blackinterns Supporting programme 2,000 jobs across our region c.4,000 courses through our training centres 680 graduates &
Slide 8: Delivering through our colleagues across the supply chain
Delivering through our colleagues across the supply chain Establishing our delivery alliance – Amplify Collaboration with our partners – governed by Pennon • Working together with a shared vision Established April 2024 and values • Bringing the best and brightest together £3.2bn • Drawing on best pr
Slide 9: Delivering our investment – driving for innovation & efficiency
Delivering our investment – driving for innovation & efficiency How we’re doing this 7 HOW IT WORKS: TDG WWTP MODULE Employing AI ‘Off the shelf’ to expedite User Inputs Output Documents solutions and concept to Water Quality Data Technical Report or Proposal ‘off-site build’ outline design Site Inf
Slide 10: Building water resources, improving water quality
Building water resources, improving water quality What we’re investing in Driving outcomes in our operations Leakage reduction of 14-19% Updating c.440km 800,000 Water quality levels 1/3 of water mains Smart Meters <1 on CRI of treament replacement – 1/3 of our works or renewing customer base Supply
Slide 11: Building water resources, improving water quality: smart networks
Building water resources, improving water quality How we’re doing this: Smart networks from source to tap Greater continuous monitoring • AI to overlay feeds in real-time New smart • Expanding innovation from SES across meters our regions • c.800,000 customers smart meters Smart Digital Architecture
Slide 12: Tackling storm overflows
Tackling storm overflows What we’re investing in Driving outcomes through our operations 62% reduction in storm overflow spills (from 2023 levels) c.300 Tackling highest Continuing industry-leading bathing overflows spilling at beaches water quality sites Removing 350 ha 250,000m3 of equivalent of s
Slide 13: Tackling pollutions
Tackling pollutions What we’re investing in Driving outcomes through our operations Maintaining industry-leading internal sewer flooding Power c.10 resilience c.25% reduction in external flooding rising mains and control replacement upgrades c.30% reduction in sewer collapses Pollution reduction pro
Slide 14: Tackling storm overflows and pollutions
Tackling storm overflows and pollutions How we’re doing this: Smart Monitoring Strategy tr Proactive control – over 1,800 successful Data S ate gy interventions, preventing pollutions • 12,000 sewer monitors installed 1 2 • Focused on blockage and burst detection Optimised SCADA Network Monitoring •
Slide 15: Driving Environmental Gains
Driving Environmental Gains What we’re investing in Delivering outcomes for customers Targeting greenhouse gas emission Upgrading Continued reductions and introducing whole life carbon 34 sites investment in renewable accounting for capital works to improve water quality generation Delivering c.350
Slide 16: Driving Environmental Gains
Driving Environmental Gains How we’re doing this Renewables supporting Energy Biodiversity our Net Zero aims efficiency net gains • Targeting c.40%1 generation of Group • Pump efficiency programmes reducing • Green-first approach to capital energy requirements operational energy use investment incre
Slide 17: Supporting affordability, delivering for customers
Supporting affordability, delivering for customers What we’re investing in Delivering outcomes for customers Supporting homes and businesses to use 800,000 water efficiently smart meters Fusion – – covering investing in a 1/3 of our best in class Improving customer service and experience customer te
Slide 18: Supporting affordability, delivering for customers
Supporting affordability, delivering for customers FUSION driving customer service Ensuring affordability for all Our affordability toolkit 1 Payment break 5 Debt support 2 Discounted tariff 6 Water efficiency advice 3 Smart meter 7 Auto-enrol onto the right help 4 Metered tariff 8 Lowest bill guara
Slide 19: Positive Final Determination outcome – supporting long-term growth
Positive Final Determination outcome – supporting long-term growth Received 100% Business Plan 2025-2030 ‘good / £5.6 Our business plan 2025 to 2030 standard’ revenue levels Allowed cost Summary October 2023 requested for of capital We’re doing this the Group billion 1 improved Delivering Totex allo
Slide 20: Step change in investment will drive growth in RCV
Step change in investment will drive growth in RCV K8 step change in capital investment Unprecedented growth from UK water £1.5bn £3.2bn Nominal 1 2 K7 base allowances RCV growth K8 base allowances (£m) Growth3 £0.4bn 34% 1 K7 additional investment 75% (25% base, 20% K7 additional investment, 30% ac
Slide 21: Targeting continued outperformance in K8
Targeting continued outperformance in K8 Driving outperformance Delivered strong outperformance in previous Targeting c.7% RORE returns over K8 – regulatory periods within Ofwat’s expected returns Return on Regulated 2025 2030 Equity – RORE (% real) Financing 12% 10% 8% Totex 6% Base returns 4% ODI
Slide 22: Efficiency driving outperformance
Efficiency driving outperformance Driving efficient delivery Cost protections mitigating downside risks Totex spend Bristol Water by type integration c. £20m delivered Business Plan 2025-2030 Reshaping the business We’re doing this c. £55m >50% SES Water integration c. £11m Energy – DESNZ industrial
Slide 23: Outcome Delivery Incentives
Outcome Delivery Incentives Measures New measures Strong comparative performance in K7 Unplanned outage Embodied greenhouse gas emissions – bespoke Internal sewer flooding Ofwat 2023/24 Water Company October 2024 Operational greenhouse gas Performance Report1 Water company performance report 2023-24
Slide 24: Driving financing outperformance
Driving financing outperformance Efficient & effective financing Diversified debt portfolio Hedging strategy to manage risk 12% 5.5 K8 nominal cost of debt 10% 4.5 8% Index linked 6% Floating 3.5 Fixed 4% 2.5 2% K8 nominal cost of debt 0 1.5 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 20
Slide 25: Supported by our comprehensive financing package
Supported by our comprehensive financing package Key pillars of our approach Portfolio • Driving an efficient cost base, already targeting £86 million of annual benefits from reshaping the business, and realising acquisition cost synergies £2.0bn • Pennon Power: remaining investment to be fully debt
Slide 26: We're doing this
We’re doing this A growing footprint – strong platform for delivery Delivering for our customers in K7 Largest ever investment programme – across 4 strategic priorities Confident in delivery – working with an innovative supply chain Focus on continued outperformance underpinned by a strong balance s