Severn Trent Plc · LSE:SVT
Severn Trent — FY2025 Earnings Presentation
31 slides from Severn Trent's earnings presentation, May 21, 2025
Slide 1: Full Year Results 2024/25
Full Year Results 2024/25 21 May 2025
Slide 2: Disclaimers
DISCLAIMERS Cautionary statement regarding forward-looking statements This document contains statements that are, or may be deemed to be, 'forward-looking All written or verbal forward-looking statements, made in this document or made statements' with respect to Severn Trent's financial condition, r
Slide 3: Liv Garfield, Chief Executive
LIV GARFIELD Chief Executive 3
Slide 4: 2024/25 Highlights
2024/25 HIGHLIGHTS Earned 4* EPA status Outstanding £150m ODI for five consecutive Business Plan, years, and securing £15bn reward confident of a sixth totex Met or exceeded target on Lowest 83% average of performance storm overflow measures spills in the sector 4
Slide 5: Helen Miles, Chief Financial Officer
HELEN MILES Chief Financial Officer 5
Slide 6: 2024/25 Financial Highlights
2024/25 FINANCIAL HIGHLIGHTS Delivered a record £1.7bn Adjusted EPS 121.71p growth of proposed full year of capital dividend, in line investment this 41% with policy year AMP7 closing RCV 9.7% of real Return on Regulated Equity £13.7bn for the year 6
Slide 7: Regulated Water and Wastewater PBIT
REGULATED WATER AND WASTEWATER PBIT Investing for future benefits while delivering 22% increase in regulated PBIT Price effects £13m £10m £18m £31m £91m £17m £32m £7m £15m Investing for the long term £132m £586m £480m FY 2023/24 Core & other Bad debt Pay inflation Reg fees & Energy Efficiency Invest
Slide 8: Financing
FINANCING £678m financing outperformance delivered across AMP7 Stable outlook 62.7% £120m £1.5bn Credit ratings reaffirmed by all Regulated Gearing Pension deficit, supported by New debt issued, in line with three ratings agencies active derisking strategy AMP8 requirement Sector Spreads¹ AMP7 RoRE
Slide 9: Return on Regulated Equity
RETURN ON REGULATED EQUITY 9.7% actual real RoRE in FY25 9.1% £434m 9 consecutive years Totex managed to around AMP7 cumulative RoRE ODI reward across AMP7 of financing outperformance 1% of RoRE Real out/(under) performance on RoRE Electricity price index vs CPIH allowance 220 200 180 5.2% 160 Index
Slide 10: Earnings Outlook
EARNINGS OUTLOOK Outlook of doubling adjusted EPS by 2028 Average power trade price High revenue 1 visibility 5 year visibility on revenue, and leading bad debt performance at c. 2% 32% reduction 2 Energy hedging >60% of wholesale electricity costs locked-in for the next three years, at improving pr
Slide 11: Unprecedented RCV Growth
UNPRECEDENTED RCV GROWTH Long-term scale growth driving additional value Nominal RCV growth per AMP Return on RCV driving revenue growth £800m 59% £600m £400m £200m £0m 28% FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 • RCV increases over time by compounding inflation SVT Average SVT AMP8 • Mor
Slide 12: Technical Guidance
TECHNICAL GUIDANCE FY25 FY26 Turnover £2.25bn Around £2.6bn Wastewater Water and Regulated Operating costs & IRE £1.2bn Up to 12% higher ODI outperformance £68m At least £25m Net finance costs £244m 20 - 25% higher Group Capital investment £1.7bn £1.7bn - £1.9bn Outlook Adjusted EPS doubling between
Slide 13: Liv Garfield, Chief Executive
LIV GARFIELD Chief Executive 13
Slide 14: A Record Year
A RECORD YEAR Leading operational Sector-leading operational performance delivering performance £150m of ODI rewards this year £1.7bn capital investment delivered this year, in line Driving efficient growth with average AMP8 requirement Frontier spills performance, and confident of an Environmental
Slide 15: Performing in Water
PERFORMING IN WATER Record year in Water positions us well for AMP8 Best ever Leakage performance Best ever Supply Interruptions performance 16.8% reduction over the AMP, 32% reduction year-on-year, outperforming our AMP7 leakage target our lowest ever levels Performance 00:12:40 00:11:21 Target 00:
Slide 16: Continued Strength in Wastewater
CONTINUED STRENGTH IN WASTEWATER Strong performance on key measures and investing for further improvement Best ever performance on key measures Best ever Internal Sewer Flooding performance Blockages Internal Sewer Flooding 40% reduction over 20% year-on-year Insourced c. 400 into our waste networks
Slide 17: Driving Efficient Growth
DRIVING EFFICIENT GROWTH Record capital investment of £1.7bn positioning us well for £6.4bn AMP8 enhancement spend Getting ahead on our AMP8 programme… …and confident we can deliver it efficiently Over £450m De-risking programme with accelerated expenditure Diversified our supply chain to expanded a
Slide 18: Environmental Leadership
ENVIRONMENTAL LEADERSHIP Progress made on environmental priorities Sustaining EPA 4* Improving River Health Confident of reaching below 18 Transforming performance on spills average spills this year Confident of a sixth consecutive year of the highest Aiming to be under 2% Delivered 1,800 interventi
Slide 19: Communities, Customers and Colleagues
COMMUNITIES, CUSTOMERS AND COLLEAGUES Supporting our region and maintaining a culture that delivers operational success Our communities Our customers Our colleagues Supported over 7,000 people with Supported around 300,000 customers with employment-related experience and training their bills this ye
Slide 20: AMP8 2025 – 2030
AMP8 2025 – 2030 Outstanding plan that delivers for all our stakeholders £15bn totex allowance, 1 Investment our largest ever programme 59% nominal RCV growth, 2 Growth one of the highest in the sector Guiding to £300m in operational outperformance, 3 Performance including up to £50m in PCDs Proven
Slide 21: Appendix
APPENDIX
Slide 22: Technical Guidance 2025/26
TECHNICAL GUIDANCE 2025/26 Regulated Water and Wastewater FY25 Year-on-year Turnover Around £2.6 billion including HS2 related income. £2.2bn ▲ Up to 12% higher year-on-year including continued investment in operational performance and increases in national insurance and Operating costs & IRE £1.2bn
Slide 23: Regulated Water and Wastewater Revenue
REGULATED WATER AND WASTEWATER REVENUE Driven by in-AMP fast money Annual CPIH + K for Green Recovery and ODI increase in tariffs reward recognised 25.5 23.1 11.1 83.5 Includes higher NHH Representing the recovery of consumption and fewer meter higher revenue in 21/22 under optants, partially offset
Slide 24: RWWW PBIT Reconciliation
RWWW PBIT RECONCILIATION 2024/25 2023/24 Variance Variance Core & other Bad debts Price effects Work volume Investing in the Efficiency revenue increases & Other long-term £m £m £m % £m £m £m £m £m £m Turnover 2,249.0 2,152.0 97.0 4.5 132.3 (35.3) Net Labour costs (244.6) (200.9) (43.7) (21.8) (16.6
Slide 25: EBITDA
EBITDA¹ 31 March 31 March 2024 2025 Variance Variance £m £m £m % 889.9 Regulated Water and Wastewater 1,031.5 141.6 15.9 59.2 Business Services 47.5 (11.7) (19.8) 25.6 Operating Services and Other 21.2 (4.4) (17.2) 29.5 Green Power 22.7 (6.8) (23.1) 4.1 Property Development 3.6 (0.5) (12.2) (9.2) Co
Slide 26: Net Finance Costs
NET FINANCE COSTS 31 March 2024 31 March 2025 Income Gross Income Gross statement Capitalised interest statement Capitalised interest charge interest incurred charge interest incurred £m £m £m £m £m £m 160.1 69.6 229.7 Cash interest (including accruals) 163.7 103.1 266.8 13.4 – 13.4 Net pension fina
Slide 27: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE 31 March 31 March Variance Variance 2024 2025 £m % £m £m 511.8 Profit before interest and tax 590.2 78.4 15.3 (281.5) Net finance costs (243.9) 37.6 13.4 (2.5) Increase in expected credit loss on loan receivable – 2.5 – 227.8 Adjusted profit before tax 346.3 118.5 52.0 (5
Slide 28: Adjusted Net Debt
ADJUSTED NET DEBT 31 March 2024 31 March 2025 Variance Variance £m £m £m % (783.5) Bank loans (784.7) (1.2) (0.2) (7,357.9) Other loans (8,798.0) (1,440.1) (19.6) (120.0) Lease liabilities (111.1) 8.9 7.4 951.4 Net cash and cash equivalents 1,044.8 93.4 9.8 29.8 Fair value accounting adjustments 23.
Slide 29: Fair Value of Debt
FAIR VALUE OF DEBT 1 31 March 2024 31 March 2025 Variance Variance £m £m £m % (788.7) Floating rate debt 2 (783.8) 4.9 0.6 (5,049.5) Fixed rate debt (6,096.8) (1,047.3) (20.7) (1,957.9) Index-linked debt (1,703.4) 254.5 13.0 (7,796.1) (8,584.0) (787.9) (10.1) 951.4 Net cash and cash equivalents 1,04
Slide 30: Debt Maturity
£m 0 100 200 300 400 600 700 800 900 500 2026 2027 2028 2029 2030 2031 DEBT MATURITY 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Debt 2044 2045 2046 2047 2048 FY25 Funding 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 30
Slide 31: Gearing and Credit Ratings
GEARING AND CREDIT RATINGS 31 March 2024 Adjusted net debt/RCV 31 March 2025¹ 61.3% Regulated Gearing 62.7% 31 March 2024 31 March 2025 Severn Trent Water Severn Trent Plc Severn Trent Water Severn Trent Plc Outlook Baa1 Baa2 Moody's Baa1 Baa2 Stable BBB+ BBB Standard and Poor's BBB+ BBB Stable BBB+