Pennon Group Plc · LSE:PNN
Pennon — Investor Presentation (October 2023)
16 slides from Pennon's investor presentation, Oct 5, 2023
Slide 1: Spotlight on PR24
Spotlight on PR24 5 October 2023
Slide 2: Disclaimer
Disclaimer For the purposes of the following disclaimers, references to There are a number of factors that could cause actual results, a) neither Pennon Group nor any other member of Pennon this “document” shall mean this presentation pack and shall performance or achievements of Pennon Group to dif
Slide 3: Susan Davy and Paul Boote
Susan Davy Paul Boote Group Chief Executive Group Chief Financial Officer © Pennon Group plc 2023 3
Slide 4: An ambitious plan – the right plan, the right deal for our region
Pennon An ambitious plan – the right plan, the right deal for our region A balanced plan – based on customer priorities Business Plan 2025-2030 Robust K7 platform for delivery Step up in investment across the region – growth in RCV Investing in our supply chain, investing in people We’re doing this
Slide 5: One Pennon – the right plan for our regions
Pennon One Pennon – the right plan for our regions 30,000 customers and 1,000 local stakeholders directly involved in the development of our plan WaterShare+ - 90,000 customers are shareholders – four times the number of institutional investors Population of 3.5 million – increasing to 10 million in
Slide 6: Robust K7 platform for delivery
Pennon Robust K7 platform for delivery Tackling storm overflows and pollutions • WaterFit – Improving 49 of the 151 beaches in our region Bills at their lowest point by 2025 – 70 improvement schemes underway for 10 years – significant • Pollution reductions – 50% reduction delivered to date, afforda
Slide 7: A well balanced plan to 2030
Pennon A well balanced plan to 2030 Investing Keeping bills Strong support efficiently as low as possible from customers £4.5bn 3 - 4% 74% Totex, assuming 12% efficiency average increase per annum Customer acceptability Growth for Incentivising Underpinned by investors performance responsible financ
Slide 8: Tackling the biggest challenges head on
Pennon Tackling the biggest challenges head on Storm overflows £761m enhanced 9cust3om%er and pollutions investment support Water quality £e6nh3an9cem d 92% customer and resilience investment support Net zero and £431m enhance 93% customer environmental gains investmendt support over Addressing affo
Slide 9: Key deliverables to 2030
Pennon Key deliverables to 2030 Storm overflows Water quality Net zero and and pollutions and resilience environmental gains Tackling 100% of storm overflows Upgrading a third of treatment Decarbonising our operations, at all bathing beaches, shellfish works across our region, investing reducing emi
Slide 10: Addressing affordability and delivering for customers
Pennon Addressing affordability Addressing affordability and delivering for customers Progressive charging Driving efficiency – keeping bills as low as possible • Piloting innovative approaches • Seasonal charging Further expanding our affordability tooklit • Rising block tariffs Revolutionising cha
Slide 11: Step up in investment
Pennon Step up in investment Total expenditure1 Shareholder value – RCV growth Enhancement 5,000 £1.8bn 8,000 4,500 7,000 4,000 6,000 4,500 Enhancement Enhancement 5,000 £0.4bn £0.4bn 3,000 2,500 4,000 3,000 38% RCV growth 2,000 2,000 (nominal) 1,500 1,000 1,000 0 2020 2021 2022 2023 2024 2025 2026
Slide 12: Financeable
Pennon Financeable • Financeable on a notional and actual basis – Real returns based on using Ofwat’s early view of WACC Ofwat Ofwat Ofwat • Current market conditions and requirement for methodology methodology methodology (Dec 2022) (market (market update new debt given significant investment plans
Slide 13: Balancing risk and return
Pennon Balancing risk and return Return on regulated equity 1 Strong platform for K8 • Strong track record of RORE outperformance • Industry upper Cumulative average Outcome Delivery Incentives K6 Cumulative quartile common 90% 12.0% RORE ODI performance 80% 70% average 11.7% in K7 to date 60% 0.5%
Slide 14: Next steps
Pennon Next steps 5 October 29 November 21 May May/June 27 November December May 2023 2023 2024 2024 2024 2024 2024 Spotlight Half year Full year Ofwat Half year Ofwat Full year results 2024/25 presentation results results publish draft results publish Final Announcement of Pennon 2023/24 2023/24 de
Slide 15: Right Deal for Right Now
Pennon Right Deal for Right Now Isles of S cil Tackling the biggest challenges head on ly Devon Robust K7 platform Step change in investment Step change in outcomes for our regions Positive outlook for RCV growth Ambitious, deliverable, financeable plan C o rnwa l l ut h o Bour nem © Pennon Group pl
Slide 16: Q&A
Q&A