United Utilities Group PLC · LSE:UU.
United Utilities — Investor Presentation (October 2023)
19 slides from United Utilities's investor presentation, October 2023
Slide 1: Stronger, Greener, Healthier: Our plan for the North West
PR24 Stronger, Greener, Healthier: Our plan for the North West
Slide 2: Our most ambitious plan ever
Our most ambitious plan ever Delivering on what matters Strong customer support Step change in customer and environmental outcomes Significant growth Financial strength to deliver Opportunity to outperform Already started United Utilities • PR24 Business Plan Submission • 2
Slide 3: Building a plan for a Stronger, Greener, Healthier North West
Building a plan for a Stronger, Greener, Healthier North West An ambitious plan Improved resilience 7x increase £13.7bn totex plan - in our environmental largest infrastructure programme investment for over 100 years Regional Igniting the economy approach: Great engagement Five county Great engageme
Slide 4: Backed by a strong track record
Backed by a strong track record Doing the right thing, time after time: Fully funded pension scheme One of the lowest levels of gearing in the sector Strong credit ratings A3/A-(1) Led the sector on affordability support Strong track record of delivering on service, performance commitments and ESG:
Slide 5: Business plan highlights
Business plan highlights A plan that delivers for customers and the environment Great water Secure supply Building resilience Upgrading over Improving water quality Investing in our aqueducts 950km mains & pipes, installing for over 1.4 million to safeguard supplies to over 900k smart meters, custom
Slide 6: Business plan highlights
Business plan highlights A plan that delivers for customers and the environment Acceptability Testing Customer bills Affordability support c.£22 real increase each Proposed £525m 74% support year of the AMP to deliver of customer support for our plan environmental and service helping more than impro
Slide 7: Bills and customer support
Bills and customer support Average household bill increase of c.£22 (real) on average, 74% customer acceptability of our plan each year of AMP8 £556 £531 £506 £516 £481 £447 FY25 FY26 FY27 FY28 FY29 FY30 Bill profile in real prices, on a post-tax adjustment basis, as applied to revenues. Increasing
Slide 8: Totex: Delivering for customers in AMP8
TotexDelivering for customers in AMP8: customer support, service improvements, resilience & environment 93% of AMP8 enhancement driven by statutory requirements PR24 Submission £13.7bn (FY23 Prices) £m Other WINEP Enhancement Projects 14.0 • Phosphorus removal 13.0 • Improving bathing waters • Nutri
Slide 9: RCV growth
RCV growth RCV growth accelerating from 4-5% in AMP7 to ~9% CAGR in AMP8 AMP8 RCV (nominal) £22.4bn Nominal RCV CAGR: ~9% CAGR AMP Real 6.5% 37% £14.8bn Nominal 8.7% 52% £14.0bn FY23A FY25* FY30 forecast Business Plan *Mar-25 closing RCV reflects midnight adjustments capitalised £0.6bn of carried fo
Slide 10: Investor Returns
Investor Returns Our plan based on Ofwat guidance AMP8 RoRE Incentive Ranges (%) UU PR24 Ofwat PR24 Base Returns Allowance (Real, CPIH) 6.00 Ofwat PR19 Ofwat 'Early Frontier Economics* 4.00 0.29 0.50 View' 1.15 0.70 (Dec-19) (Sep-22) (Apr-23) 2.00 2.00 Low High 2.02 Gearing 60% 55% 55% 55% 0.30 0.30
Slide 11: Finance: Gearing Bridge: PR24 Submission
Finance Gearing Bridge: PR24 Submission Group Gearing (ND/RCV) Base return Ofwat ‘early view’ WACC 3.29% (real) adopted for consistency and 63% comparability 58% Totex PR24 submission £13.7bn FY23A 1 2 3 4 PR24 AMP8 PR24 (FY23 prices) Submission Capital Submission Assumed Requirement Equity Average
Slide 12: Finance: Gearing Bridge: Alternative Plan Assumptions
Finance Gearing Bridge: Alternative Plan Assumptions Group Gearing (ND/RCV) Base return 67% Frontier Economics 65% 3.93% WACC 65% ~63% (real, CPIH) 58% Totex Adaptive planning scenario: £12.7bn FY23A FY23 AMP8 Gearing Frontier Adaptive Alternative (FY23 prices) Capital Without Economics Planning Pla
Slide 13: Summary of customer ODIs
Summary of customer ODIs Backing ourselves to deliver Targeting stretching Pushing the frontier proposed RoRE range of performance levels forward on reducing pollution –2.29% to 2.31% Framework evolution AMP7 83% - highest 12 27 in the sector this year Common ODIs Bespoke ODIs AMP8 3 23 Bespoke Comm
Slide 14: A plan that delivers
A plan that delivers We are submitting a plan that is financeable, affordable and most importantly deliverable - building on our strong track record of success 1. Financeable 2. Affordable 3. Deliverable • Strong balance sheet with 58% • Plan is underpinned by £525m of • Early start to £1.2bn of sto
Slide 15: Next steps
Next steps Ongoing engagement Early 2025 with Ofwat, EA, CCW UUG dividend and DWI on business policy plans announcement 2 October May/June December April 2025 2023 2024 2024 Start of Business Draft Final AMP8 plan determinations determinations submission United Utilities • PR24 Business Plan Submiss
Slide 16: Summary highlights
Summary highlights Key stats and information coupled with an investor summary available to help 65% £13.7bn A3/A- average gearing totex plan current credit rating without recourse to equity (2022/23 prices) 37% c.£22 £525m real RCV growth average real increase in affordability support – 6.5% real CA
Slide 17: An outstanding plan
An outstanding plan A plan that delivers for everyone 1. 5 counties approach – we have been listening and understand 2. Delivering what matters – benefiting our North West economy • Committed to make a 3. Supporting >1 in 6 customers with over £500m of support difference 4. Comprehensive plan – deli
Slide 18: Questions.
Questions.
Slide 19: Cautionary statement
Cautionary statement This presentation contains certain forward-looking statements with respect to the operations, performance and financial condition of the group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to diffe
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