United Utilities Group plc Half-Year Results 2021

United Utilities Group PLC

24 November 2021

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

Strong purpose – Performing well for customers and communities

• 6% real reduction in typical household bills since the start of AMP7
• Upper quartile for customer satisfaction; on track for a C-MeX reward
• Backing the Consumer Council for Water's (CCW) drive to launch a national social tariff
• More than 200,000 customers supported through extensive affordability schemes
• Welcoming a record 95 apprentices onto our award winning apprentice scheme for 2021
• Helping 250 young people through the Kickstart scheme
• Committed £300,000 to eight North West charities to improve local rivers

Protecting the environment – Delivering a low carbon future and enhancing biodiversity

• Awarded top 4* environmental performance rating for 2020
• 100% of electricity from renewable sources
• First in sector to secure Science Based Targets initiative (SBTi) approval for carbon emissions targets
• On track to achieve Net Zero by 2030
• Working in partnership with the Environment Agency to deliver catchment-wide Systems Thinking
• Enhancing biodiversity; planting 1 million trees and restoring 1,000 ha of peatland

A digital utility – Delivering our AMP7 plans while generating value

• Digital transformation continues at pace, delivering value for all stakeholders
• Accelerating investment to deliver operational improvements earlier
• Delivering reductions in sewer flooding incidents through innovative applications of Systems Thinking
• On track to deliver c£20m net customer ODI rewards in 2021/22 and c£150m in total for AMP7

Financial resilience – Robust financial performance and resilient to risks

• Underlying1 operating profit of £333m up 4%
• Cash collection remains strong with household bad debt improving to 1.8% in the first half of the year
• Strong balance sheet; A3 credit rating with Moody's and fully funded pension schemes
• Hedging policies mitigating risk and delivering sustainable performance
• Prices locked-in on 80% of AMP7 capital programme
• Around 95% hedged to power commodity price rises for 2021/22
• Interim dividend of 14.50p, in line with AMP7 dividend policy

Key financials

¹ Underlying measures are defined in the tables within the underlying profit section and reflect a change in approach to alternative performance measures (APMs) implemented during the financial year ended March 2021 with prior period numbers re-presented for comparability

² Net regulatory capital spend excludes infrastructure renewals expenditure

³ Regulatory capital value (RCV) gearing calculated as group net debt/United Utilities Water Limited's shadow RCV (outturn prices)

Steve Mogford, Chief Executive Officer, said:

“At a time when many families are struggling with a higher cost of living, we have reduced typical water bills for households in our region by 6 per cent in real terms over the last two years. We're also offering more help than ever before for vulnerable customers and households that are struggling to pay.

“Climate change and population growth are challenges we must all confront, and we will continue to invest to make our services more resilient and strengthen our ability to respond to, and recover from, extreme weather events. Our £2 billion investment programme will also help our region's economy to grow, generate jobs and develop skills in our communities.

“We're committed to delivering our six carbon pledges, which will help us achieve our ambition of net zero by 2030. We have already delivered our pledge to source 100 per cent of our electricity from renewable sources. As well as reducing our carbon footprint, we are committed to protecting the natural environment and ensuring no net loss of biodiversity.

“We've continued with the great start that we've made to AMP7, benefitting from the acceleration of our capital programme and investment in Systems Thinking. Our strong operational performance delivers efficiency gains and improvements to outcome delivery incentives, and is enabling us to drive further value for our shareholders.”