Centrica Plc · LSE:CNA
Centrica — Investor Presentation (July 2025)
24 slides from Centrica's investor presentation, Jul 22, 2025
Slide 1: Sizewell C: Regulated investment with predictable returns
Sizewell C Regulated investment with predictable returns 22 July 2025
Slide 2: Disclaimer
This presentation is provided for the purpose of giving information on an equity investment by the Group in the Sizewell C nuclear power plant project (the “Project”). This presentation should not be used for any purpose other than assisting with an assessment of the Group’s proposed investment in t
Slide 3: More electrified, more intermittent, with nuclear providing zero-carbon baseload
More electrified… …more intermittent… …with nuclear providing zero-carbon 24/7 baseload Global electricity consumption1 (EJ) UK wind share of generation output % Global primary energy mix1 (%) +102% 80% Nuclear 5% 11% Other UK nuclear ambitions Renewables (2050) 60% Natural Gas ~17GW increase in UK
Slide 4: Critical to UK energy security and decarbonisation
• Critical to UK energy security and decarbonisation − 3.2GW capacity – 2 x 1.6GW European Pressurised Reactors − Power for ~6 million homes – ~7% of UK demand − 60+ year operational life • De-risked development Torness − Benefiting from Hinkley Point C – over 80% of above ground Sizewell C design r
Slide 5: Regulated investment with inflation-protected returns, capped at £1.3bn
• Regulated Asset Base model with no pre-productive capital and protections against delays and cost overruns 15% £ 1.3bn • Inflation-protected regulated returns Centrica ownership Capped investment − Allowed return on equity 10.8% real (WACC 6.7%) − IRR >12%1 • Phased investment capped at £1.3bn for
Slide 6: Optimisation of our share of zero carbon baseload electrons
1 Optimisation of our share of zero carbon baseload electrons 2 Route to market services on additional volumes 3 Right of first offer in the event of future government sell-downs1 1. Pro rata with partners based on existing shareholding. 6
Slide 7: Regulated returns, phased investment, comprehensive protections
Regulated returns Phased investment Comprehensive protections • 10.8% real allowed return on equity • £38bn total construction costs3 • Funding obligation capped through during construction and initial − Mid-late 2030s COD3 cost threshold mechanism operations − >12% IRR1 • Centrica’s 15% share of eq
Slide 8: Construction, PCR and Operations regulatory framework
Construction PCR2 Operations Commencement COD1 COD+3yrs 60+ years Agreed regulatory period 5-year periodic regulatory reviews (Set by Secretary of State) (Set by Ofgem) Financing during construction • Allowed returns set until Post Construction Review period completed Cost of equity (real) 10.8% − R
Slide 9: Cost estimate and regulatory thresholds (LRT and HRT)
Sizewell C Sizewell C management cost estimate LRT HRT estimate £38bn1 £40.5bn1 £47.7bn1 • £38bn capital cost1 • Mid-late 2030s COD Up to LRT Between LRT and HRT Above HRT Lower Regulatory • 100% of construction costs • 50% of construction costs • £1.3bn capped commitment; Threshold (“LRT”) added to
Slide 10: Allowed return split between cash yield and RAB reinvestment
Allowed return split between cash £1.3bn gross investment delivers equity share of RAB of ~£3bn yield and RAB reinvestment (LRT case, £bn) Inflation RAB 0.8 growth 1.3 ~£5bn Debt (65%) 0.5 Real Gross Cash yield Net return 10.8% investment during investment construction 6.0% Cash yield ~£3bn Equity (
Slide 11: Illustrative Centrica free cash flow profile
Illustrative Centrica free cash flow profile1 • During construction, distributions subject to 6% cash 1 yield cap on cumulative gross investment 1 2 3 − £0.8bn cash return during construction from 6% yield COD − Net annual cash flow to Centrica turns positive from mid-2030s; project fully self-fundi
Slide 12: Stable and predictable investment, robust governance structure
Stable and predictable investment Robust governance structure Regulated returns Centrica Amber EDF La Caisse HM Infrastructure2 Government2 15% 12.5% 20% 7.6% 44.9% Phased capex • Centrica will have one board seat, providing influence and transparency Non-recourse debt • Fundamental decisions requir
Slide 13: £2.5bn of £4bn investment programme now committed
• £2.5bn of £4bn investment programme now committed – ~£500m for 2025 – 2028 on Sizewell C – ~£1.7bn in total now committed to regulated / contracted assets – Uncommitted Sizewell C, MAP, Irish Peakers • £1.5bn still to be committed £4bn Committed ~65% – Attractive returns remain core focus – Regula
Slide 14: Underpins end of 2028 run-rate EBITDA
Underpins end of 2028 run-rate EBITDA • EBITDA contribution of ~£50m by the Of which SZC ~£50m end of 2028 ~£0.2bn ~£1.6bn • EBITDA grows to ~£150m by commercial operations ~£0.2bn ~£0.2bn • Significant acceleration in EBITDA, earnings and cash ~£1.0bn flow following commercial operations date • 9%
Slide 15: Maximise sustainable earnings: capital allocation framework
01 02 03 04 05 Maximise Maintain a strong Progressive Investing Return sustainable balance sheet dividend for value surplus capital earnings Growing our stable, Regulated Infrastructure Further confidence in Regulated investment Consistent with net zero aligned asset improving our long-term outlook
Slide 16: Regulated Asset Base model with protections against delays and cost overruns
• Regulated Asset Base model with no pre-productive capital and protections against delays and cost overruns • Inflation-protected regulated returns Operational Commercial − Allowed return on equity 10.8% real excellence focus − IRR >12% • Phased investment capped at £1.3bn for 15% stake; £0.8bn cas
Slide 17: Appendix
Appendix
Slide 18: SZC revenue components (indicative)
SZC revenue components (indicative) Allowed Revenue during operations (SZC) Return Other costs Depreciation Tax Inflation (RAB x + of the RAB + allowance + and allowances factor (CPIH) Return on the RAB Depreciation of the RAB WACC) Other Costs Allowed Revenue Market Revenue Other costs and allowanc
Slide 19: Illustrative Centrica RAB build-up
Illustrative Centrica RAB build-up1 RAB growth funded 1 through combination of debt, equity and cash not released as yield Cash retained funds 2 increasing proportion of capex, eventually all, over time. Post COD, Equity Debt shareholder loan capital repayments commence Cumulative by COD (15% basis)
Slide 20: Potential exposure and protections in place
Potential exposure Protections in place • Compensation in event of government discontinuation Discontinuation • Consists of repayment by government of the RAB and any hedge breaking costs Liquidity support • Government provided liquidity facility in event of capital market disruption • Decommissioni
Slide 21: Centrica investment parameters
Centrica investment parameters Regulatory returns LRT HRT Returns during Construction (IWACC) • Allowed return on equity: 10.8% • Cost of debt: 4.5% (CPIH, real) (CPIH, real) • IWACC (return on RAB): 6.7%2 Stake sizeStake size 15% • Gearing ratio: 65% of RAB Gross equity investment Structure of equi
Slide 22: Key estimates and regulatory thresholds
Key estimates and regulatory thresholds Project delivery incentives / penalties • Below LRT: 100% of construction costs plus 50% cost savings added to RAB Construction cost Lower Higher • LRT to HRT: 50% over-run added to RAB Sizewell C regulatory regulatory • Above HRT: no impact on Centrica RAB ma
Slide 23: Term Detail: definitions
Term Detail COD / commissioning • Commercial Operations Date: when both generation units are signed off by the regulator Ofgem as fully commissioned and entering operations • For modelling purposes this is assumed to be end-2039 under LRT (in line with licence target COD) • For modelling purposes th
Slide 24: Term Detail: IRR methodology and definitions
Term Detail IRR • Calculated as return on Centrica’s unlevered cash injections − Post-tax, nominal; ~2% annual CPIH inflation assumed − Cash injections: all share capital and shareholder loan injections − Return: cash yield + shareholder loan interest and principal repayments − Time period: all cash