United Utilities Group Plc · LSE:UU.
United Utilities — FY2025 Earnings Presentation
43 slides from United Utilities's earnings presentation, May 15, 2025
Slide 1: Full year results
Full year results Year ended 31 March 2025 Thursday 15 May 2025
Slide 2: Louise Beardmore, Chief Executive
Louise Beardmore Chief Executive
Slide 3: Key takeaways
Key takeaways 1 Top quartile performer 2 7% asset base growth 3 At least 100bps outperformance United Utilities • 2024/25 full year results • 3
Slide 4: FY25 Result
Q United Water for the North West Utilities
Slide 5: Result highlights
Result highlights Solid financial results Strong balance sheet Dividend Top quartile 80% performance EPS Growth of c.50% 60% gearing policy reaffirmed commitments 87% colleague Incentive performance 13 consecutive years CSO activations engagement ‘Green’ on serious 24% reduction in spills per £24m O
Slide 6: Financial highlights
Financial highlights Underlying operating profit1 Underlying EPS1 Returns £634m +22% 49.6p +49% RoRE2: 6.7% FY24: FY24: RoRE3: 6.1% £518m 33.3p Capital investment DPS Gearing £1,083m +47% 51.85p +4% 60% +1% FY24: FY24: FY24: £737m 49.78p 59% 1. Underlying profit measures are reconciled to reported p
Slide 7: AMP7 Review
AMP7 Review 2 An ae | lie ee aN - oy Q United Water for the North West Utilities
Slide 8: Best in sector spills improvement
Best in sector spills improvement Average spills per overflow Rainfall significantly 70 39% reduction higher than average in average spills per 60 overflow over AMP7 50 24% reduction in spills per overflow in 2024 40 30 20,000 fewer spills 20 compared to 2023 10 0 2020 2025 2030 31% reduction in spi
Slide 9: Serious pollutions
Serious pollutions Industry-leading performance on serious pollutions1 16 14 13 12 consecutive years ‘Green’ for serious pollutions 10 8 6 4 Drone squad Investment into 2 to monitor and detect power resilience pollutions 0 UK Water and Sewage company peers United Utilities 1. 5-year average. Environ
Slide 10: Wastewater Network performance
Wastewater Network performance Number of sewer collapses per 1,000km of sewers 25 36% reduction Industry leading 20 sewer sensor capability across AMP7 15 18% reduction in sewer blockages across AMP7 10 19% reduction 5 in internal sewer flooding across AMP7 0 FY20 FY25 FY30 Actuals Target as per the
Slide 11: Water performance
Water performance Reduction in water quality contacts 15,000 29% reduction in water quality contacts over AMP7 10,000 – lowest level of water quality complaints ever 5,000 0 FY20 FY25 Lowest level of leakage Increase in find and fix rates for leakage 70% increase in find and fix rates in 2024/25 800
Slide 12: Service performance
Service performance 3rd highest C-MeX reward across AMP7 4th highest Awarded the D-MeX and ServiceMark Br-MeX with Distinction by the Institute of in 2024/25 Customer Service United Utilities • 2024/25 full year results • 12
Slide 13: Affordability
Affordability Bad debt charge Bad debt 4.0% charge stable 3.5% at 1.5% in FY25 £525 million affordability support package in AMP8 3.0% 2.5% 2.0% Supported c.540,000 1.5% 414,000 1.0% households customers on our Priority 0.5% through AMP7 Services Register 0.0% affordability schemes FY15 FY16 FY17 FY
Slide 14: People
People Outperforming external benchmarks Exceeding all external benchmarks with employee engagement of UK High 87% Performance Norm 91% of colleagues are 30,000 jobs UU proud to work supported through our Engagement score for United AMP8 programme Utilities 70% 75% 80% 85% 90% United Utilities • 202
Slide 15: ESG performance
ESG performance Environment • 39% reduction in spills since 2020 - with almost 20,000 fewer spills in 2024 than 2023 E • Environmental Performance Assessment Serious Pollutions– ‘Green’ every year since records began in 2011 • Peatland restoration – completed more than 3,000 hectares, surpassing our
Slide 16: Phil Aspin, Chief Financial Officer
Phil Aspin Chief Financial Officer
Slide 17: Financial highlights
Financial highlights Revenue Underlying operating profit1 Reported operating profit1 £2,145m +10% £634m +22% £632m +32% FY24: FY24: FY24: £1,950m £518m £480m Underlying EPS1 DPS RCV gearing2 49.6p +49% 51.85p +4% 60% +1% FY24: FY24: FY24: 33.3p 49.78p 59% 1. Underlying profit measures are reconciled
Slide 18: Underlying operating profit
Underlying operating profit 22% increase in underlying operating profit +10% £m Revenue: £2,145m • Regulatory adjustments: £186m 800 700 (37) (31) 196 (12) 634 +6% 600 Underlying opex: £1,511m • Asset base growth: £37m 500 518 • Inflationary increases: £31m 400 • Investing in performance: £8m 300 20
Slide 19: Interest, tax and earnings
Interest, tax and earnings Underlying net finance Underlying tax Underlying profit after expense tax FY25: £284m FY25: £nil FY25: £338m FY24: £293m FY24: £7m credit FY24: £227m Inflation charge on index-linked ‘Full expensing’ to continue to Underlying EPS of 49.6p instruments of £162m (FY24: provid
Slide 20: Financial strength
Financial strength RCV1 (£bn) RCV gearing2 Responsible financing 15.4 60% Fully funded pension 14.7 FY24: 59% Not subject to unfunded costs FY24 FY25 Funding raised Liquidity Net debt (£bn) c.£1.8bn £2.8bn 9.3 AMP8 funding well progressed Sufficient liquidity into 2027 8.8 1. Includes the full expec
Slide 21: Return on regulated equity (RoRE)
Return on regulated equity (RoRE) AMP7 RoRE bridge 10% 0.5% 9% 2.0% 8% 7% 2.8% 6.7% -2.2% -0.4% 6.1% 6% -0.6% 5% 4.0% 4% 3% 2% 1% 0% Real base Financing Tax ODIs Totex Retail Real RoRE Ofwat Real RoRE methodology change United Utilities • 2024/25 full year results • 21
Slide 22: Financial framework
Financial framework Aim to outperform RoRE1,2 by at least 100 bps Capital Investment3 c.£9 billion across FY26-30 Asset Base Growth3,4 7% CAGR Target ratings Moody's Baa1 Dividend Policy Growing in line with CPIH Standard & Poor's BBB+ Strong Balance Sheet5 Target 55 – 65% gearing Fitch BBB+ 1. Base
Slide 23: Technical guidance 2025/26
Technical guidance 2025/26 FY25 y-o-y Revenue is expected to increase to between £2.5 billion and Revenue £2,145m £2.6 billion in 2025/26 in line with the final determination, adjusted for inflation. Underlying operating costs are expected to decrease, with higher costs associated with inflation and
Slide 24: Financial summary
Financial summary Solid financial result Financial strength • Underlying operating profit: £634m (+22%) • RCV gearing of 60%1 • Underlying EPS: 49.6p (+49%) • Fully funded pension scheme Funding and liquidity position Dividend • Liquidity of £2.8bn extending out to 2027 • FY25 dividend: 51.85p • AMP
Slide 25: Louise Beardmore, Chief Executive
Louise Beardmore Chief Executive
Slide 26: Summary
Summary Performing well operationally Consistent upper quartile Financial strength and flexibility and financially performance Well positioned to step in to Determined to drive a step Track record of delivery AMP8 change United Utilities • 2024/25 full year results • 26
Slide 27: Capital Markets Day
Capital Markets Day 19th June 2025 Jane Simpson James Bullock Mike Gauterin Louise Beardmore Phil Aspin Matt Hemmings Adrienne McFarland Commercial, Engineering Regulation and Compliance Customer and Technology Chief Executive Chief Financial Officer Chief Operating Officer People Director and Capit
Slide 28: Cautionary statement
Cautionary statement This presentation contains certain forward-looking statements with respect to the operations, performance and financial condition of the group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to diffe
Slide 29: Supporting information
Supporting information 1. Underlying income statement 8. Statement of financial position 2. Underlying operating profit 9. Reconciliation of net debt 3. Profit before tax reconciliation 10. Financing performance 4. Profit after tax reconciliation 11. Financing and liquidity 5. Finance expense 12. De
Slide 30: Underlying income statement
Underlying income statement Year ended 31 March 2025 2024 Change (%) £m Revenue 2,145.2 1,949.5 +10.0% Operating expenses (857.0) (787.1) +8.9% Infrastructure renewals expenditure (189.5) (205.8) -7.9% EBITDA 1,098.7 956.6 +14.9% Depreciation and amortisation (464.9) (438.8) +5.9% Operating profit 6
Slide 31: Underlying operating profit
Underlying operating profit Year ended 31 March 2025 2024 Change (%) £m Revenue 2,145.2 1,949.5 +10.0% Employee costs (224.1) (204.7) +9.5% Power (154.5) (164.3) -6.0% Hired and contracted services (133.9) (108.2) +23.8% Materials (81.1) (65.8) +23.3% Chemicals (63.0) (61.3) +2.8% Property rates (89
Slide 32: Profit before tax reconciliation
Profit before tax reconciliation Year ended 31 March 2025 2024 £m Operating profit 631.5 480.2 Net finance expense (265.7) (306.1) Share of profits/(losses) of joint ventures (10.8) (4.1) Reported profit before tax 355.0 170.0 Adjustments: Fleetwood outfall pipe fracture 2.3 37.6 Fair value losses/(
Slide 33: Profit after tax reconciliation
Profit after tax reconciliation Year ended 31 March 2025 2024 £m Reported profit after tax 264.7 126.9 Adjustments: Fleetwood outfall pipe fracture 2.3 37.6 Fair value losses/(gains) on debt and derivative instruments, excluding interest on (18.7) 12.9 derivatives and debt under fair value option De
Slide 34: Finance expense
Finance expense Year ended 31 March 2025 2024 £m Investment income 106.2 85.6 Finance expense (371.9) (389.3) Allowance for expected credit losses- loans to joint venture - (2.4) (265.7) (306.1) Fair value losses/(gains) on debt and derivative instruments, excluding interest on derivatives and debt
Slide 35: Finance expense: index-linked debt
Finance expense: index-linked debt Year ended 31 March 2025 2024 £m Interest on index-linked debt (43.7) (40.8) RPI adjustment (£2.4bn debt at Mar-24/2.5% indexation charge for the six months to Sep-24; £2.3bn debt at (86.5) (115.8) Mar-23/3.9% indexation charge for the six months to Sep-23) – 3 mon
Slide 36: Derivative analysis
Derivative analysis Year ended 31 March 2025 2024 £m Derivatives hedging debt (98.6) (49.4) Derivatives – total accretion on inflation-linked swaps (130.8) (111.2) Derivatives – fixing future real interest rates through inflation-linked swaps 126.9 123.8 Derivatives – hedging future nominal interest
Slide 37: Statement of financial position
Statement of financial position At 31 Mar 2025 31 Mar 2024 Change (%) £m Property, plant and equipment 13,873.0 13,044.3 +6.4% Retirement benefit surplus 302.3 268.0 +12.8% Other non-current assets 181.0 210.6 -14.1% Cash and bank deposits 1,672.6 1,399.3 +19.5% Other current assets 399.9 348.4 +14.
Slide 38: Reconciliation of net debt
Reconciliation of net debt At 31 Mar 2025 31 Mar 2024 £m Cash and bank deposits (1,672.6) (1,399.3) Total derivative assets (340.7) (382.8) Gross borrowings 10,788.6 10,001.4 Total derivative liabilities 292.6 280.6 Balance sheet net debt 9,067.9 8,499.9 Exclude: The fair value impact of: Interest r
Slide 39: Financing performance
Financing performance Existing debt locked in at rates favourable to the AMP7 allowed cost of embedded debt 9000 Floating Fixed CPI-linked RPI-linked 8000 7000 3.2% 2.2% 2.6% 2.5% 2.4% 6000 5000 4000 (0.6)% (0.6)% (0.6)% (0.2)% (0.6)% 3000 1.3% 1.3% 1.3% 1.4% 1.4% 2000 1000 0 2020/21 2021/22 2022/23
Slide 40: Financing and liquidity at 31 March 2025
Financing and liquidity at 31 March 2025 Liquidity = £2.8bn Gross Debt = £10.8bn Other borrowings £m including lease EIB & other floating GBP obligations and short- loans term debt £845.2m Cash, cash investments and bank deposits 1,672.6 £209.5m GBP CPI linked bonds and Undrawn committed bank facili
Slide 41: Debt structure at 31 March 2025
Debt structure at 31 March 2025 United Utilities Group PLC United Utilities PLC Yankees: • $400m in 28s on-lent at issue to UU Water Baa2 stable; BBB- stable; BBB+ stable7 Euro MTNs: Other debt: United Utilities Water Limited • £300m in 27s • £50m in 32s1 • £100m in 40s1 • £50m in 41s1 • £510m in 56
Slide 42: Term debt maturity profile as at 31 March 2025
Term debt maturity profile as at 31 March 20251 Average term to maturity of approximately 15 years 1 Future repayments of index-linked debt include RPI/CPI/CPIH market derived forecasts out to 2029, subsequently transitioning to an average annual RPI rate of 2.4% and an average annual CPI/CPIH rate
Slide 43: Glossary
Glossary Key Term Definition AMP7 / AMP8 The regulatory cycle is broken up into five-year asset management plan (AMP) periods. AMP7 ran from 1 April 2020 to 31 March 2025. AMP8 will run from 1 April 2025 to 31 March 2030. PCs / ODIs Ofwat sets performance commitments (PCs) with annual targets, and m
United Utilities Group — FY2025 Earnings Presentation on 6ix