National Grid (NG) Investor update summary

Strategic investment and growth plans

• Announced a plan to invest at least £70 billion over the next five years, a 70% increase from the prior period, with about 85% allocated to green investments, to modernize and expand networks in the UK and US.

• Investment will nearly double UK transmission capacity and increase US investments by almost 50%, supporting electrification, digitalization, and rising demand from sectors like data centers and healthcare.

• Targeting group asset growth CAGR of around 10% and upgraded underlying EPS CAGR of 8%-10% from a FY26 baseline, with group assets expected to reach around £115 billion by FY31.

• Dividend per share aimed to grow in line with UK CPIH inflation, maintaining a strong balance sheet and investment-grade credit rating.

• Investment plan driven by decarbonisation, energy security, data centre demand, AI, and industrial electrification.

Regulatory and financial framework

• Accepted Ofgem's RIIO-T3 price control, enabling investment at the required pace and scale, with improved protections over project cost recovery and enhanced Output Delivery Incentives (ODIs).

• Price control supports delivery of overall return on equity above 9% across the period, with performance split more evenly between TOTEX and ODI incentives compared to T2.

• Five-year framework based on pragmatic regulatory and performance assumptions, including updated FX rates and inflation expectations.

• Leverage expected to rise to the high 60s by FY31, with significant unused hybrid debt capacity and no major hybrid issuance planned within the period.

• No major impact from cost inflation on CapEx guidance; increase from £60bn to £70bn mainly reflects additional years and volume, not inflation.

Execution, efficiency, and delivery confidence

• Enhanced delivery engine and supply chain de-risking measures, including new contractor partnerships and advanced procurement strategies.

• Six ASTI projects in construction, six more to be submitted, and others in late-stage consultation, supported by planning reforms and internal capability development.

• Regulatory incentives encourage efficiency, with cost savings shared between customers and the company.

• U.S. CapEx plan reflects ongoing rate cases and affordability considerations, with continued focus on efficient deployment and strong recent rate case outcomes.

• Portfolio optimization remains under review, but no significant asset disposals are assumed in the current funding plan.