Pennon Group Plc · LSE:PNN
Pennon — Q4 2026 Earnings Presentation
36 slides from Pennon's earnings presentation, Jun 10, 2026
Slide 1: Full Year Results 2025/26
Full Year Results 2025/26 10 June 2026
Slide 2: Keith Haslett, Pennon Chief Executive Officer
Keith Haslett Pennon Chief Executive Officer © Pennon Group plc 2026 2
Slide 3: Introduction
Introduction Background & experience • Continuation of a role within UK water, with c.25 years of previous water experience • Opportunity to lead a UK listed water Group through an unprecedented transformative period • Strong alignment with purpose and outcomes First engagements • Engagement session
Slide 4: Initial observations & opportunities
Initial observations & opportunities Observations Quality teams and colleagues A clear, strategic direction for growth Challenges to address Opportunities & areas of focus Customer experience Asset life-cycle Environmental Performance Assessment Energy management © Pennon Group plc 2026 4
Slide 5: Laura Flowerdew, Pennon Chief Financial Officer
Laura Flowerdew Pennon Chief Financial Officer © Pennon Group plc 2026 5
Slide 6: Return to profitability for 2025/26
Return to profitability for 2025/26 Increase More than doubling Return on in EBITDA1 operating profit1 Regulated Equity +55% year-on-year £326m 6.7% (2024/25: £149m) In-year RORE Focused start to Dividend Resilient balance capital programme per share sheet £644m 29.29p 61.8% (2024/25: £652m) (2024/2
Slide 7: Summary of financial performance
Summary of financial performance Underlying1 (£m unless otherwise stated) 2025/26 2024/25 Revenue 1,291.4 1,047.8 Return to EBITDA 519.2 335.6 profitability Operating profit 325.5 148.5 23% increase Net finance costs (191.4) (184.4) in revenues JV PAT 1.0 0.8 Profit/(loss) before tax – underlying 13
Slide 8: EBITDA growth
EBITDA growth 55% increase in underlying EBITDA, achieved through revenue growth and focused cost management Underlying EBITDA1 Water Group (£m) 201.5 20.0 11.1 519.2 (21.9) (9.2) (17.9) 335.6 2024/25 Revenue Inflation & regulatory Bad debt Weather Operational Other 2025/26 underlying increases & in
Slide 9: Building momentum in delivery
Building momentum in delivery 2025/26 Capital expenditure Water Wastewater £341.3m £247.2m Year 1 capital expenditure of £643.6m Record £3.2bn capital programme over K8 Strong efficiencies Other Pennon Power £54.1m being secured £1m From top to bottom Storm tank construction at Dawlish, Devon; Alder
Slide 10: Robust balance sheet
Robust balance sheet Diversified debt portfolio Responsible gearing 61.8% Preference shares Water £12.5m Group Private placements Leases gearing £974.0m £1,100.4m Bank bilateral Strong liquidity and funding position Cash2 £565.2m £388.3m c.£640m Net debt at Debt raised Fixed bonds 31 March 2026 2025
Slide 11: Real RoRE returns of 6.7% in year
Real RoRE returns of 6.7% in year 2025/26 RoRE Totex outperformance driven by capex efficiencies and timing 6.9% 5.3% 6.7% 5.8% Financing – 140bps outperformance on allowed cost of debt Totex Financing Base ODI Base returns including 30bps from PCD ‘outstanding’ business plan ODI performance impacte
Slide 12: Outlook 2026/27
Outlook 2026/27 2025/26 2026/27 guidance EBITDA Water Group Revenue £1,022m +£50-70m Allowed revenues Costs £511m +2-5% Inflationary increases Non-Regulated business Revenue £269m +10-15% T ariff and new contract wins Costs £261m +15-20% W holesale cost pass through Other Group Depreciation £194m +5
Slide 13: Delivering on our four strategic priorities
Delivering on our four strategic priorities Building water Tackling storm Driving Supporting resources, improving overflows environmental affordability, delivering water quality and pollutions gains and Net Zero for customers Through focused investment © Pennon Group plc 2026 13
Slide 14: Building water resources, improving water quality
Building water resources, improving water quality Managing water resilience Industry-leading water quality Leakage (megalitres per day) Water Quality CRI 1 Industry average Burst mains (per 1,000km of main) 2024 ODI deadband SES South West Bristol Bristol Water Water Water Water Supply interruptions
Slide 15: Tackling pollutions and storm overflows
Tackling pollutions and storm overflows Pollution incident reduction Driving spills down Internal sewer flooding a key focus through interventions c.53% 17% c.50% 2025/26 impacted by exceptional weather and storm events, but remaining reduction in pollutions 1 reductions in storm overflow spills red
Slide 16: Delivering environmental gains
Delivering environmental gains Commitment to Net Zero Enhancing sustainability performance 2 Planted c.32,000 trees, Restored over 250 hectares Pennon Power solar farms bringing the total of peatland, engaging 2,370 fully constructed number of trees planted people in events, volunteer since 2019 to
Slide 17: Supporting affordability, delivering for customers
Supporting affordability, delivering for customers Supporting vulnerable customers Listening to our customers Industry leading retailers 4.9 c. 195,000 customers on affordability initiatives 1 23 customer research pieces completed 4.8 – a c.11% increase 2 in 2025/26 including progressive tariff focu
Slide 18: Top priorities for coming months
Top priorities for coming months Customer transformation People & culture Target operating model Asset management & reliability Capital investment programme © Pennon Group plc 2026 18
Slide 19: Comprehensive plan in progress – actions taken
Comprehensive plan in progress – actions taken • Project Fusion go live – driving customer service Customer transformation improvements and cost efficiencies • Employee survey complete People & culture • Introduce performance led culture • Simplify and remove duplication Target operating model • Foc
Slide 20: Well positioned for sector reform
Well positioned for sector reform White Paper and Transition Plan – a reset for the sector Supportive of and shaping the direction of reform • Welcome the clear shift in tone, approach, and ambition from government and regulators • Builds on Pennon’s strengths and reflects what we expected A New Vis
Slide 21: Cost change process – new mechanism for additional funding
Cost change process – new mechanism for additional funding Opportunity and further growth Opportunity to accelerate investment on Year 1 – c.£250 million submission1 asset health, to support economic growth Asset health and new priorities. • Pulling forward spend from PR29 into this AMP Cyber Accele
Slide 22: In summary
In summary Challenging start to AMP8 Building momentum for improved delivery Strategic update to come before the end of September 2026 © Pennon Group plc 2026 22
Slide 23: Appendix
Appendix © Pennon Group plc 2026 23
Slide 24: 2025/26 Regulatory return (%)
2025/26 Regulatory return (%) 3.8 12.4 2.0 1.9 8.6 1.5 6.7 5.4 (2.2) Base Financing Totex ODIs Notional Gearing Actual Inflation Regulatory RoRE impact RoRE return (real) 1, 2 (real) (nominal) 3 1 Based on notional company structure of 55% regulated gearing; 2 Return on Regulated Equity (RoRE), a me
Slide 25: Operational KPIs – Water
South West Water (SWB) South West Water (SWB) 2025 1.38 2025 Operational KPIs – Water 2024 1.19 2024 Water quality Water quality Taste, Taste, smell andsmell 2023 colourand colour Unplanned Unplanned 3.02 outage outage 2023 (CRI score)(CRI score) (Contact per 1,000 (Contact per 1,000 population)popu
Slide 26: Operational KPIs – Wastewater
Operational KPIs Operational KPIs Operational KPIs – Wastewater Pollution incidents Operational (Number KPIsincidents) of wastewater South West Water (SWB) Internal sewer flooding (Incidents per 10,000 sewer connections) Sewer collapses Pollution (Incidents South(Number perincidents 1,000km) West Wa
Slide 27: EPA scorecard evolution
EPA scorecard evolution Year of application EPA measure Definition changes for 2026-2030 2026 2027 2028 Rating Pollutions Total pollutions WIRI guidance: 5 Excellent (from 2028) + Dry day spills + Emergency overflows 4 Good Removing environmental impact 3 Fair Serious pollutions No change 2 Requires
Slide 28: Pennon Power
Pennon Power Strategic rationale Standalone, debt-funded plan to complete • Equity returns in the range • Remaining funding until completion will be via debt of 10-15%1 • We will review and • Aligned with UK Net Zero optimise ownership and 2025 targets financing closer to or • Provides natural hedge
Slide 29: Flexible funding strategy
Flexible funding strategy Group debt Funding strategy at 31 March 2026 (£m) Gross Net • Maintain two investment grade credit ratings debt debt • Continued use of our diverse portfolio assessing the best options to Pennon Group plc 365.3 364.9 support the business and our customers Water Group 4,388.
Slide 30: Pennon Balance sheet – diversified funding portfolio
Pennon Balance sheet – diversified funding portfolio Balance at 31 March 2026 Pennon Water South West (£m) Group Business Water Leasing 1,100.4 1,093.9 1,092.6 Bank bilaterals 565.2 446.0 421.0 Index-linked debt (RPI) 1,057.9 979.3 743.3 Fixed rate bonds 1,179.7 1,169.2 1,169.3 Private placements 98
Slide 31: Pennon Debt maturity profile
Pennon Debt maturity profile Group debt Liquidity position maturity profile (£m) At 31 March 2026, Pennon Group had 800 access to undrawn committed funds and cash and cash deposits totalling c.£1 billion, 700 including cash and other short-term 600 deposits of £388.3 million and £610 million of undr
Slide 32: Pennon Net debt movements
Pennon Net debt movements Pennon Group – summarised net debt flow 2025/26 2024/25 (£m) flows flows Net debt excluding other non-cash indebtedness – 1 April (3,936.2) (3,684.8) Opening balance 1 April (4,078.2) (3,844.8) Cash generated from operations 529.7 233.6 Corporation tax received 1.0 3.0 Net
Slide 33: Pennon Financing costs
Pennon Financing costs • Stabilisation in inflation and rates increased by new debt to fund the ongoing investment programme • Increased interest capitalisation based on capital programme • SWW effective interest rate 5.7% 31.8 2.5 184.4 (2.3) 0.7 191.4 (12.8) (6.3) (6.6) Net finance Floating Increa
Slide 34: Pennon Net interest analysis
Pennon Net interest analysis Water Group South West Water (£m unless otherwise stated) 2025/26 2024/25 2025/26 2024/25 Underlying net interest charge (189.7) (189.4) (170.1) (170.6) Less: pensions net interest (2.0) (1.5) (1.6) (1.1) Non-debt related interest (2.4) 2.2 (2.4) 2.2 Add: capitalised int
Slide 35: Pennon Balance sheet – Pensions
Pennon Balance sheet – Pensions As at As at Pensions 31 March 31 March (£m) 2026 2025 Pension schemes’ assets 605 704 Pension schemes’ liabilities (573) (673) Net pension schemes’ assets 32 31 Deferred tax (4) (4) Net of tax pension schemes’ assets 28 27 Main PGPS scheme Bristol Water scheme SES Wat
Slide 36: Disclaimer
Disclaimer For the purposes of the following disclaimers, references to There are a number of factors that could cause actual results, Without prejudice to the above, whilst Pennon Group accepts this “document” shall mean this presentation pack and shall be performance or achievements of Pennon Grou