Pennon Group Plc · LSE:PNN
Pennon — FY2024/25 Earnings Presentation
26 slides from Pennon's earnings presentation, Jun 4, 2025
Slide 1: Full Year Results Update 2024/25
Full Year Results Update 2024/25 4 June 2025
Slide 2: 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 South West Water accepts this “document” shall mean this presentation pack and shall be performance or achievements of South W
Slide 3: South West Water Group credit ratings
South West Water Group South West Water South West Water Limited (guarantor) Finance plc (issuer) credit ratings • Issued £400m Bond in July 2024, maturing 2041 • Issued £250m Bond in December 2024, maturing 2032 • Instrument rating Baa1 (Moody’s) Baa1 BBB+ Sustainable Financing Framework Guarantor
Slide 4: A resilient end to K7, robust outlook for K8
A resilient end to K7 Delivering on our four strategic priorities Serving more customers and communities across our regions Point of inflection – reset and rebased for K8 Strong platform secured for the future © Pennon Group plc 2025 Robust outlook for K8 4
Slide 5: Delivering on our four strategic priorities in K7
Delivering on our four strategic priorities in K7 Building water Tackling storm Driving Supporting resources, improving overflows environmental affordability, delivering water quality and pollutions gains for customers Sector- Sector- 144,000 Breaking the drought leading 100% Bathing Water leading R
Slide 6: Serving more customers and communities across our regions
Serving more customers and communities across our regions – a growing footprint Delivering efficiently Two new state-of-the-art treatment works First time sewerage and step change in water quality Cheddar 2 investment approved Securing financial resilience and Bough beach reservoir opportunities Gro
Slide 7: Point of inflection: reset and rebased for K8
Point of inflection Water Record efficiency Resetting capital Strong initiatives the cost base investment Cumulative balance sheet Rebased driving Delivering WaterShare dividend lower c.£76m RORE £1.3bn post Rights annualised our outcomes for Issue revenue savings our customers 10.4% 1 funding raise
Slide 8: Strong platform for the future
Strong platform for the future ‘outstanding’ Solid business plans – already delivering Business Plan 2025-2030 Our business plan 2025 to 2030 Summary October 2023 We’re doing this ‘standard’ Step change in investment – 34% growth in RCV Driving efficiency and innovation Targeting c.7% RORE in K8 – c
Slide 9: Operational update
Operational update © Pennon Group plc 2025 9
Slide 10: Tackling pollutions and storm overflows
Tackling pollutions and storm overflows Prioritising the impact on homes and businesses Pollution incident reduction a key focus Internal sewer flooding (per 10,000 properties) Total emissions1 (per 10,000km) 68% Industry-leading 2.5 1,400 Lowest number 2.0 performance 1.200 of pollutions 1.5 1,000
Slide 11: Tackling storm overflows and pollutions
Tackling storm overflows and pollutions Progress made despite 2024 being the wettest hydrological year on record Driving spills down through interventions Focus on bathing waters 20% Spill reductions (%) Bathing water/ Bathing season spills One of only 5 50 (number) companies to 40 reduce 30 spills
Slide 12: Building water resources, improving water quality
Building water resources, improving water quality Securing supply resilience into the future Reducing demand and driving water efficiency Supplemented resources (%) Cornwall 34% 100% 30% Supply Demand Balance index Devon Sector-leading demand 2022 2024 reduction scheme Exceeded target Innovative tar
Slide 13: Building water resources, improving water quality
Building water resources, improving water quality Clean, safe, drinking water – our customers’ number 1 priority CRI score1 16 14 Quality First 12 approach delivering results 10 8 Industry-leading 6 average CRI 4 >67% 2 ODI deadband improvement 0 Water Only Companies (WOC) Water and Sewerage Compani
Slide 14: Supporting affordability, delivering for customers and communities
Supporting affordability, delivering for customers and communities Supporting vulnerable Significant support Working with our customers packages local communities Priority Services Register (reach %) 16 14 12 10 8 6 4 2 Target 0 SWW BRL SES SWW BRL SES 2020/21 2024/25 Exceeding our target every year
Slide 15: Delivering through our colleagues
Delivering through our colleagues c.4,000 Confident brilliant colleagues in delivery – delivering for customers – working with innovative and the environment supply chain Supporting 2,000 jobs across our region c.4,000 courses through our training centres 680 graduates & apprentices © Pennon Group p
Slide 16: Financial update
Financial update © Pennon Group plc 2025 16
Slide 17: South West Water key financial metrics
South West Water key financial metrics Resilient underlying South West Water SWW Return on performance gearing Regulated Equity EBITDA £308.6m 62.0% 6.0% 1 Investing Investment grade Strong to deliver credit ratings liquidity CAPEX £588.7m Baa1 BBB+ SWW guarantor £694.2m © Pennon Group plc 2025 1 Re
Slide 18: South West Water – Financing our growth
South West Water – Financing our growth Strong liquidity and Diversified debt portfolio Efficient financing funding position Preference shares SWW SWW effective £12.5m Private placements £660.2m Leases £1,045.5m gearing 62% interest rate 2 5.4% £1.1bn Average maturity 14 years raised in 2024/25 Cash
Slide 19: FY25 results shaped by customer demand measures and record K7 investment
FY25 results shaped by customer demand measures and record K7 investment SWW revenue flat, Underlying (£m unless otherwise stated) 2024/25 2023/24 Change resulting from lower customer consumption Revenue 737.7 729.8 1.10% Operational efficiencies Operating costs (429.1) (397.3) 8.00% partly offsetti
Slide 20: Delivering efficient performance
Delivering efficient performance c . £75m targeted K8 run rate annualised savings 2024/25 TARGETED K8 RUN RATE Bristol Water integration • Integration synergies achieved in full £20m c. £20m Fully delivered Reshaping Business Plan 2025-2030 • Improving how we work, being more efficient the business
Slide 21: Funding secured for next phase of growth
Funding secured for next phase of growth Unprecedented growth from UK water • £ K7 outperformance £3.2bn Nominal K8 base Cumulative SWW returns 2 Shareholder value allowances RCV growth 6.0% 10.4% K7 shareholder value c.£910m (£m) Growth1 c.£200m 75% 34% Dividends paid real nominal Retained value 3
Slide 22: RORE outperformance
South RORE outperformance West Water Cumulative RORE performance1 (£m) Cumulative WaterShare RORE 3 2020/ 2021/ 2022/ 2023/ 2024/ Cumulative 6.0% SWW & BRL 21 22 23 24 25 total Financials 5.1% Totex 60 33 -80 -73 -80 -140 Financing 14 53 133 55 89 344 Base Totex ODIs -12 12 -10 -14 -23 -58 Financing
Slide 23: Balance sheet – diversified funding portfolio
South Balance sheet – diversified funding portfolio West Water Balance at 31 March 2025 South West (£m) Water Leasing 1,045.7 Bank bilaterals 547.3 Index-linked debt (RPI) 715.1 Fixed rate bonds 835.1 Private placements 660.2 Preference shares 12.5 Total borrowings 3,815.9 Less: cash / liquid invest
Slide 24: Debt maturity profile
South Debt maturity profile West Water Liquidity position SWW debt maturity profile (£m) • At 31 March 2025, Pennon Group had access to undrawn committed funds 450 and cash and cash deposits totalling 400 c.£977.9m, including cash and other 350 short-term deposits of £417.9m and 300 c.£560m of undra
Slide 25: Financing costs
South Financing costs West Water • Full year impact of SES • Reduction in inflation and rates offset by new debt to fund the ongoing investment programme • SWW effective interest rate 5.4% Total interest 43.4 4.5 170.6 charge 155.6 (£m) (9.2) (3.4) (3.2) (17.1) 2023/24 Interest rate Inflation New de
Slide 26: Net interest analysis
South Net interest analysis West Water (£m unless otherwise stated) 2024/25 2023/24 Underlying net interest charge (170.6) (155.5) Less: pensions net interest (1.1) (1.4) Non-debt related interest (23.1) (14.1) Add: capitalised interest 4.5 - Net interest for average rate calculation (190.3) (171.0)