Pennon Group Plc · LSE:PNN
Pennon — South West Water — H1 2025/26 Earnings Presentation
25 slides from Pennon's earnings presentation, Dec 1, 2025
Slide 1: Half Year Results 2025/26
Half Year Results 2025/26 1 December 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 and bond issuance
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 • Issued £300m Bond in September 2025, maturing 2031 Sustainable Financing Framework Gu
Slide 4: Robust start to K8
Robust start to K8 Strong return to profitability for 2025/26 Operational successes – step change in wastewater performance Momentum in capital investment maintained into the start of K8 Well positioned as the sector evolves © Pennon Group plc 2025 4
Slide 5: Strong return to profitability
Strong return to profitability Resilient underlying South West Water SWW Return on performance Group gearing Regulated Equity EBITDA A 1 Investing Investment grade Strong to deliver credit ratings liquidity CAPEX Baa1 BBB+ SWW guarantor © Pennon Group plc 2025 1 Real cumulative RORE on underlying to
Slide 6: Operational successes – step change in performance
Operational successes – step change in performance Building water Tackling storm Driving Supporting resources, improving overflows environmental affordability, delivering water quality and pollutions gains for customers Resilient Sector- Biodiversity Progress c.20% 2 water c.50% c.45% 1 1 gains on e
Slide 7: Momentum in capital investment maintained into the start of K8
Momentum in capital investment maintained into the start of K8 Capital investment 1 (£m) K6 K7 K8 800 700 600 500 400 300 200 H1 100 0 7 1 2 8 3 4 5 9 6 0 6 7 8 9 /2 /1 /2 /2 /2 /2 /2 /1 /2 /2 /1 /1 /2 /2 /3 16 20 17 15 18 26 27 21 24 22 25 28 23 19 29 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 ©
Slide 8: Well positioned for sector reform
Well positioned for sector reform Engaged in regulatory reform process and transition planning We expect the reforms to deliver: • Clear long-term direction for UK water • New single regulator and supervisory regime • Customer focused • Clear plans for improving water quality • Securing water resili
Slide 9: Financial update
Financial update © Pennon Group plc 2025 9
Slide 10: Financial framework over K8
Financial framework over K8 RORE 7% target returns 1 160 bps outperformance, 30 bps reward Capital investment £3.2bn investment programme RCV growth 34% to 2030 Dividend policy Growing in line with CPIH Resilient balance sheet 55-65% gearing policy for Water Group Investment grade credit ratings Moo
Slide 11: South West Water K8 inflection point
South West Water • K8 inflection point Step change in profitability Ongoing investment at start of K8 cycle South West Water South West Water Statutory operating 159 Capex profit (£m) 306 274 (£m) 49 H1 2024/25 H1 2025/26 H1 2024/25 H1 2025/26 Strong return to profitability Gearing to supportive of
Slide 12: Step change in H1 financial performance
Step change in H1 financial performance Strong return to Underlying1 H1 H1 (£m unless otherwise stated) 2025/26 2024/25 profitability Revenue 479.1 372.0 25% increase in revenues EBITDA 245.3 151.2 Operating profit more Operating profit 159.8 82.5 than doubling year on year Net finance costs 86.3 (8
Slide 13: Investment continues to deliver our customers' priorities
Investment continues to deliver our customers’ priorities Water Group1 capital investment (£m) H1 H1 2025/26 2024/25 Clean water 154.2 185.0 Wastewater 125.0 130.8 Total 279.2 315.8 Record £3.2bn capital programme over K8 On track to deliver Year-1 Price Control Deliverables 1,000+ deliverables mobi
Slide 14: South West Water Balance sheet set for K8 delivery
South West Water • Balance sheet set for K8 delivery South West Water Diversified debt portfolio Responsible gearing Preference shares Private placements £656.1m £12.5m Leases £1,037.1m South West Water gearing c.60% Strong liquidity and funding position Cash2 £423.1m Bank bilateral Fixed bonds £1,1
Slide 15: Transformative growth delivering long-term value
Transformative growth delivering long-term value On track to deliver 7% RORE target for K8 Transformative growth, long-term value Nominal 12% RCV growth (£m) Growth3 10% 8% 75% (25% base, 20% K7 additional investment, 30% acquisition) 34% floor for growth 6% 9,000 4% 8,000 Base 2% Outperformance2 FD
Slide 16: Debt maturity profile
Debt maturity profile Group debt Liquidity position maturity profile (£m) At 30 September 2025, South West Water had access to 700 undrawn committed funds, cash and cash deposits totalling c.£850million, including cash and other short term deposits of 600 £423.1million and £435million of undrawn fac
Slide 17: Net interest analysis
Net interest analysis Water Group South West Water (£m unless otherwise stated) H1 H1 H1 H1 2024/25 2025/26 2024/25 2025/26 restated Underlying net interest charge (94.6) (89.9) (86.3) (80.2) Less: pensions net interest (1.1) (0.8) (0.9) (0.6) Non-debt related interest (1.1) 0.8 (1.1) 0.8 Add: capit
Slide 18: Operational update
Operational update © Pennon Group plc 2025 18
Slide 19: Driving step change in wastewater performance
Driving step change in wastewater performance Pollution incident reduction Driving spills down Focus on bathing waters a key focus through interventions c.50% reduction in Cat 1-3 pollutions c.45% c.6,000 100% 2 c.25% reductions in storm spills avoided due water quality – reduction in spill overflow
Slide 20: Resilient water resources, industry leading water quality
Resilient water resources, industry leading water quality Resilient reservoir levels Industry leading water quality despite a hot, dry summer Supplemented resources (%) CRI score1 16 34% 14 Cornwall 100% 12 30% Supply Demand 10 Balance index 8 Devon 6 4 average 2 ODI 2022 2025 deadband 0 Water Only
Slide 21: Driving environmental gains
Driving environmental gains Commitment to Net Zero Enhancing biodiversity 2 Aberdeenshire site Peatland Programme delivering impactful restoration and engagement during H1 solar sites energised fully constructed 350+ volunteer 50 stakeholders 300 hectares 4 sites – Contributing to hours events of pl
Slide 22: Supporting our customers through increased support
Supporting our customers through increased support Significant support packages, Working with our supporting vulnerable customers local communities Priority Services Register industry c.20% increase in customers benefitting from one of more 290 drop-in sessions engaging over 5,000 customers leader o
Slide 23: Delivering on our commitments
Delivering on our commitments October 2025 Water company performance report 2024-25 Ofwat 2024/25 Water Company Performance Report 1 Company Water Wastewater categorisation performance performance 2023/24 2024/25 2025/26 6 5 Leading 3 4 3 2 2 1 1 Average 0 0 Upper quartile One off Return to in-line
Slide 24: Embedding innovation in our delivery
Embedding innovation in our delivery Centre for Resilience in Environment, Water and Waste State-of-the-art microplastics lab, Using AI in bid to make water focused on three main areas network lead free Microplastics in sewage slud dge Lead replacement is a challenge across the • Investigating techn
Slide 25: Outcome Delivery Incentives
Outcome Delivery Incentives Measures New w measures Unplanned outage Embodied greenhouse gas emissions – bespoke Internal sewer flooding n/a Operational greenhouse gas emissions (water) Bathing water quality n/a Operational greenhouse gas emissions (wastewater) Biodiversity River water quality (phos