Drax Group Plc · LSE:DRX
Drax — FY2025 Earnings Presentation
44 slides from Drax's earnings presentation, Feb 26, 2026
Slide 1: Full Year Results 2025
2025 Full Year Results 26 February 2026
Slide 2: Presenters
Presenters Will Gardiner Chief Executive Officer Mark Strafford Director of IR 2
Slide 3: Our Purpose
Our Purpose To enable a zero carbon, lower cost energy future Our Strategy Create value by investing in the UK energy transition Our People Valued members on a winning team with a worthwhile mission 3
Slide 4: Strong Performance in 2025, Progress on Strategy, Increased Medium-term Visibility
Strong Performance in 2025, Progress on Strategy, Increased Medium-term Visibility Strong operational and underlying financial performance across the Group • Record levels of renewable generation (6% of UK power, 11% of UK renewables) • Record levels of pellet production – 5% increase vs. 2024 Stron
Slide 5: Sustainability
Sustainability Improved scoring in third-party accreditations and progress with priorities in 2025 CDP A rating for climate and forestry Sustainability developments ‘A’ ratings place Drax in the top 4% of • Launched Sustainability Framework companies who submit disclosures, • Climate Transition Plan
Slide 6: Cash generation from existing business supports growth, value creation and returns to shareholders
Cash generation from existing business supports growth, value creation and returns to shareholders Targeting post 2027 Adj. EBITDA of £600-700m(1) pa from current business Target of c.£3bn of free cash flow (2025 to 2031) 1) Excludes development expenditure and contribution from new investments.
Slide 7: FlexGen – Flexible, Renewable Generation
FlexGen – Flexible, Renewable Generation Pumped storage and hydro MW Operational Development Total c.1/3 of total UK long duration storage by GWh capacity Pumped storage and hydro 0.6 <0.1 0.6 • c.60% asset utilisation in 2025 (c.20% in 2019) OCGT 0.9 0.9 • Five-year payback on capital invested on a
Slide 8: Low Carbon Dispatchable CfD for Drax Power Station is an Inflection Point
Low Carbon Dispatchable CfD for Drax Power Station is an Inflection Point A CfD that supports energy security, value for money and sustainability Low carbon dispatchable CfD signed (November 2025) • Strike price of c.£110/MWh (2012 real) • Applies to all four biomass units • c.6TWh pa generation col
Slide 9: Sustainable Biomass
Sustainable Biomass US pellet business provides strong underpin to value via integrated relationship with Biomass Generation US South East pellet production Canadian / US North West pellet production • Integrated model enables capture of full potential of value chain • Sales to Asia under long-term
Slide 10: Financial & operational review
Financial & operational review Strong operational and underlying financial performance
Slide 11: Financial Summary
Financial Summary Strong operational and underlying financial performance Adj. EBITDA(1/2) Adj. basic earnings per share Net debt(3) £947m 137.7 pence £784m / 0.8x (2024: £1,064m) (2024: 128.4 pence) (2024: £992m / 0.9x) Total cash and committed facilities Expected full year dividend(4) Share buybac
Slide 12: Performance by Business
Performance by Business Strong performance driven by high levels of renewable generation, system support and pellet production Pellet Biomass Options for 2025 Adj. EBITDA £m 1 Production 2 Generation 3 FlexGen 4 Growth Total Pellet Production 129 - - - 129 Biomass Generation - 725 - - 725 Pumped Sto
Slide 13: Balance Sheet
Balance Sheet Strong balance sheet and liquidity Balance of maturities weighted to 2029 As at December 2025 (£m) c.0.8x Net debt to Adj. EBITDA Refinancing activities 800 • Repayments of over £230m of facilities(1) • Facilities and extensions • £450m RCF extended to 2028 (option to extend to 2029) •
Slide 14: Capital Investment
Capital Investment Investment in core assets and strategy 2025 FY-26 Key areas Actual £m Estimate £m Growth BESS, Pumped Storage and Hydro, and OCGTs 98 ~100 Maintenance No major planned biomass outage in 2025 72 ~100 Other Health, safety, environment and IT 32 ~30 Total 202 210-250 2026 outlook • G
Slide 15: Cost Management
Cost Management Cost reductions delivering structural savings aligned with post 2027 Adj. EBITDA targets Structural reductions(1) (£m pa) vs. 2024 base 2025 2026 2027 - Continue to invest in growth while driving cost savings and (100) efficiency vs. 2024 base (200) Opex Devex Fixed Costs 1) Reductio
Slide 16: Disciplined Capital Allocation Supports Growth and Returns to Shareholders
Disciplined Capital Allocation Supports Growth and Returns to Shareholders Capital allocation policy remains unchanged Maintain strong balance sheet 1 2 Invest in core business and credit rating Return surplus capital beyond 3 Sustainable and growing dividend 4 investment requirements 16
Slide 17: Create value by investing in the UK energy transition
Create value by investing in the UK energy transition Drax Power Station, BESS and other opportunities to invest in flexible, renewable generation
Slide 18: Future Focus – Structuring the Business to Succeed
Future Focus – Structuring the Business to Succeed Supporting the Group’s targets and options for growth Performance, culture Transformation Technology, and capabilities and change digital, data Reduce cost base and focus resource to deliver strategy and best financial returns 18
Slide 19: Opportunities for Development of Drax Power Station
Opportunities for Development of Drax Power Station Evaluating a range of opportunities to utilise 4GW of grid access 2025-2031 2030s onwards Power generation ✓ ✓ Data centre power supply ✓ ✓ Other system support services ✓ ✓ Other generation opportunities ✓ Carbon removals ✓ 19
Slide 20: Development of Options for Data Centre at Drax Power Station
Development of Options for Data Centre at Drax Power Station Characteristics to support AI data centre and energy security Large-scale reliable power supply • 4GW(1) site with 2.6GW(1) of active generation capacity to support 24/7 power • >1,000 acre site Physical attributes • Water extraction right
Slide 21: BESS: An Attractive Power Market Opportunity
BESS: An Attractive Power Market Opportunity Renewable deployment expected to result in wider spread of power prices Opportunities for flexible generators to capture greater value Growing demand for flexibility on system Power price and spread development • UK requires c.74-87GW of dispatchable gene
Slide 22: BESS: Targeting a GW-Scale Pipeline of Opportunities
BESS: Targeting a GW-Scale Pipeline of Opportunities Significant progress made, 710MW of BESS developments added since October 2025 Growing demand for system flexibility, wider spread of power prices, reduction in capital costs • UK requires c.74-87GW of dispatchable generation by 2030(1) Market dev
Slide 23: BESS: Developing a Portfolio of Drax-owned Assets
BESS: Developing a Portfolio of Drax-owned Assets Initial investment in 260MW of assets principally located across England/Scotland transmission constraint c.£157m investment in 260MW, 2-hour duration BESS across three sites • Staged payments through 2028, linked to construction milestones • Contrac
Slide 24: BESS: Developing a Portfolio of Tolling Products for BESS Owners
BESS: Developing a Portfolio of Tolling Products for BESS Owners Agreements in place for 450MW (1.3GWh) of tolling rights Tolling agreements signed with Fidra and Zenobe(1) • 2 and 4-hour duration BESS • 10 and 15-year tolling agreements • No upfront capital requirement or ongoing maintenance cost •
Slide 25: BESS: Acquisition of Asset Optimiser (Flexitricity)
BESS: Acquisition of Asset Optimiser (Flexitricity) Flexitricity platform supports GW-scale growth in BESS and optimisation of existing asset base Acquisition of Flexitricity for c.£36m, provides tech platform to grow BESS business • Front-of and behind-the-meter solutions for grid scale assets and
Slide 26: Summary and outlook
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Slide 27: Growing a Balanced UK Portfolio
Growing a Balanced UK Portfolio Flexible, renewable portfolio with options for growth in energy security, energy transition and AI growth GW Operational Development Options Total Drax Power Station 2.6 1.4 4.0 Pumped storage Pumped storage expansion Pumped Storage and hydro 0.6 0.6 Hydro OCGTs OCGT
Slide 28: Creating Value by Investing in the UK Energy Transition
Creating Value by Investing in the UK Energy Transition Strong operational and underlying financial performance across the Group • Record levels of renewable generation (6% of UK power, 11% of UK renewables) • Record levels of pellet production – 5% increase vs. 2024 Strong performance Low carbon di
Slide 29: Appendices
Appendices 26 February 2026 drax
Slide 30: Generation – Forward Power Sales
Generation – Forward Power Sales Strong forward power sales through end of current renewable schemes Forward power sales underpin earnings through Q1-27 Contracted power sales (24 Feb 2026) 2026 2027 2028 • c.£1.0bn of forward power sales Net RO, hydro and gas (TWh)(1) 10.9 2.1 0.2 • 13.3TWh at an a
Slide 31: Group Income Statement
Group Income Statement 2025 2024 In £m Adj. Results Adjustments(1) Total Results Adj. Results Adjustments(1) Total Results Revenue 5,355 35 5,391 6,081 81 6,163 Cost of sales (3,794) (84) (3,878) (4,130) 5 (4,125) Electricity Generator Levy - - - (161) - (161) Gross profit 1,562 (49) 1,513 1,790 86
Slide 32: Group Adj. EBITDA by Business Unit
Group Adj. EBITDA by Business Unit In £m 2025 2024 Pellet Production 129 143 Biomass Generation 725 814 Pumped Storage and Hydro 111 138 Energy Solutions – I&C 54 81 Energy Solutions – SME (5) (30) Flexible Generation and Energy Solutions (FlexGen) 160 188 Elimini (37) (47) Innovation, Capital Proje
Slide 33: Generation – FlexGen and Biomass Generation
Generation – FlexGen and Biomass Generation In £m 2025 2024 2025 2024 Revenue Generation Adj. EBITDA (£m) 836 951 Power sales 3,190 3,869 Biomass 725 814 System support and optimisation 96 197 Pumped storage and hydro 111 138 Renewable certificate sales 941 747 CfD income 187 144 Generation (TWh) 15
Slide 34: Energy Solutions
Energy Solutions Renewable power and energy solutions I&C In £m 2025 2024 • Margin similar to 2024, some reduction in volume Revenue 2,633 3,786 SME Cost of sales • Sale of majority of Opus Energy’s meter points completed Sep-24 Cost of power and gas purchases (1,325) (2,084) • Remaining meter point
Slide 35: Pellet Production
Pellet Production Record production levels and lower production costs Good progress in 2025 In £m 2025 2024 • Record levels of production • Reduction in production costs vs. 2024 Revenue 903 942 • Improved throughput Cost of sales (551) (562) • Cost management • Operational efficiencies Gross profit
Slide 36: Group Cash Flow Statement
Group Cash Flow Statement In £m 2025 2024 Adj. EBITDA 947 1,064 Working capital 86 122 Other (33) (51) Cash generated from operations 1,000 1,135 Debt service and other interest (80) (82) Corporation tax (110) (194) Net cash from operating activities 810 860 Capital investment (285) (388) Net financ
Slide 37: Group Net debt
Group Net debt £m 1,000 0 0 800 221 600 992 947 96 400 110 784 80 200 53 285 0 31 December 2024 EBITDA Working capital Capital Debt service & Tax Dividends Share 31 December 2025 Net debt & Other expenditure other interest buyback Net debt 37
Slide 38: Working Capital Inflow in 2027
1 Working Capital Inflow in 2027 c.£0.5bn benefit from end of Renewables Obligation scheme at Drax Power Station in 2027 Renewables Obligation (RO) Illustrative Generation cash flow from ROCs • RO – requirement for energy suppliers to source a proportion of their energy from a renewable source 2026
Slide 39: Capacity Market Agreements
Capacity 1 Market Agreements Capacity Market agreements provide strong underpin for FlexGen earnings c.£650m(1) of agreements in place Capacity Market agreements profile and illustration (£m) Asset Payment period Value £m Pumped storage 1-year agreements (2026-2029) 74 Pumped storage 15-year agreeme
Slide 40: FlexGen
FlexGen Strong performance since 2019 underpinned by renewables driving growing need for system support services, with opportunity for further future value (1) Offshore Wind (TWh) (2) Hours of negative pricing Changing power system: Increased levels of intermittent 60 250 renewables and volatility o
Slide 41: Long-term Indicators
1 Long-term Indicators UK Gov. net zero targets require major increase in renewables, system support and carbon removals Long-term value opportunity for FlexGen and Biomass Generation At least 2x increase in demand for power (TWh) Significant increase in offshore wind (TWh) • Targets to decarbonise
Slide 42: Merchant Forward Commodity Prices
Merchant Forward Commodity Prices Baseload Power Price (£/MWh) Peak Power Price (£/MWh) 120 200 150 80 100 40 50 0 0 Jan-23 Jun-23 Dec-23 Jun-24 Dec-24 Jun-25 Dec-25 Jan-23 Jun-23 Dec-23 Jun-24 Dec-24 Jun-25 Dec-25 SUM-26 WIN-26 SUM-27 WIN-27 SUM-28 SUM-26 WIN-26 SUM-27 WIN-27 SUM-28 NBP Gas Price (
Slide 43: Merchant Carbon Prices
Merchant Carbon Prices UKA Carbon (£/t) EU ETS Carbon (€/t) 80 120 60 80 40 40 20 0 0 Jan-24 Jun-24 Dec-24 Jun-25 Dec-25 Jan-23 Jun-23 Dec-23 Jun-24 Dec-24 Jun-25 Dec-25 Dec-26 Dec-27 Dec-28 Dec-26 Dec-27 Dec-28 Source: ICE 43
Slide 44: Full Year Results
2025 Full Year Results 26 February 2026