SSE (SSE) Deutsche Bank’s Depositary Receipts Virtual Investor Conference summary

Strategic positioning and investment plans

• Positioned at the center of the energy transition, focusing on renewables, flexibility, and electricity networks.

• Plans to deploy around £20 billion in capital investment by 2027, targeting more than double renewables capacity and 15% annual growth in network assets.

• Recent project completions include the Viking Wind Farm and Shetland HVDC subsea cable, both delivered on time and on budget.

• Secured regulatory approval for a £4.3 billion transmission link and resumed construction at Dogger Bank offshore wind farm.

• Confident in delivering 13%-16% annual earnings per share growth and 5%-10% annual dividend growth to 2027.

Financial performance and outlook

• Delivered resilient financial results in FY 2024 despite inflation and weather impacts; adjusted operating profit was £4.2 billion.

• Expects higher earnings from networks and renewables in FY 2025, driven by regulatory tariff catch-ups and increased renewables capacity.

• Medium-term profitability outlook to 2027 reflects normalization of market prices and increased investment opportunities.

• Capital programs secured with Ofgem will more than triple annual CapEx, supporting long-term regulated asset growth.

• Maintains capital discipline, with uncommitted renewables projects not required to meet 2027 earnings targets.

Risk management and capital allocation

• Manages FX risk through natural and specific hedges; 95% of earnings expected from UK and Ireland.

• Hedges energy price exposure by business segment, with 60% of earnings from regulated or index-linked sources.

• Investment criteria: solar (50-300bps over WACC), onshore wind (100-300bps), offshore wind (>11%), emerging tech (300-500bps).

• Capital allocation is flexible, increasing investment in regulated networks when risk-adjusted returns are most attractive.

• Constantly reviews and adjusts investment across renewables, flexibility, and networks based on risk-adjusted returns.