Severn Trent (SVT) Investor Update summary

Recognition and status

• Ofwat awarded Outstanding status to the PR24 business plan, unlocking GBP 93 million in rewards and a 50/50 cost-sharing rate, with WACC and base costs only able to improve from this point.

• Ofwat requires delivery of EPA 4-star at least once in AMP8, reduction in spills, and an increase in the affordability package by GBP 25 million.

• Hafren Dyfrdwy, the Welsh subsidiary, achieved a standard rating, 32% RCV growth, and its highest ever investment level.

Investment and growth

• Record 28% real RCV growth projected for AMP8, up from 10% in AMP7, driven by the largest investment program in company history and all 13 enhancement cases established.

• AMP8 will see GBP 4.3 billion more TOTEX than AMP7, with significant portions already approved and further upside possible.

• Multi-AMP investment includes GBP 1.2 billion for storm overflows and nearly GBP 1 billion for water resources in AMP8.

• Every enhancement case has been approved to some extent, establishing the need for long-term investment out to 2050.

• Successful GBP 1 billion equity raise supports AMP8 investment, resulting in the lowest sector gearing and a strong balance sheet.

Customer, environmental, and social impact

• Customers will benefit from improved service, second lowest bills in England and Wales, and expanded affordability support totaling GBP 575 million, with 1 in 6 customers eligible for assistance.

• Environmental initiatives include GBP 1.2 billion to reduce river spills, a commitment to Net Zero by 2030, and a 16% leakage reduction on track for a 50% government target.

• Committed to eradicating water poverty by 2030 and expanding support for community initiatives.

• £2.6 billion WINEP investment to improve river health, £887 million for future water needs, and £250 million to support Net Zero by 2030.

• Affordability and customer support are key enablers of RCV growth and multi-AMP investment.