Sse Plc · LSE:SSE
Sse — FY2011 Earnings Presentation
27 slides from Sse's earnings presentation, 2011
Slide 1: 2011 Full Year Results
2011 Full Year Results
Slide 2: Delivering…Dividend Growth for the Long Term
Delivering…Dividend Growth for the Long Term Lord Smith of Kelvin
Slide 3: The SSE Team
The SSE Team Ian Marchant Lord Smith of Kelvin Gregor Alexander Chief Executive Officer Chairman Finance Director Colin Hood Alistair Phillips-Davies Chief Operating Officer Energy Supply Director Rob McDonald Managing Director of Regulation and Strategy 3
Slide 4: Delivering – A Twelfth Successive Dividend Increase
Delivering – A Twelfth Successive Dividend Increase DPS p +7.1% 80 75 70 70 60 50 40 30 20 10 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9 Committed to increase the full-year divided di id d per share h b by att least l t 2% more than Retail Price Index (RPI) inflation in eac
Slide 5: Delivering…Through a Diverse Business
Delivering…Through a Diverse Business Economically-Regulated Market-Based Businesses Financial Management g Business Generation & Supply Networks × Low renewable generation 9 Increased operating profit 9 Well-executed issue of output; from energy networks; hybrid capital; × Higher wholesale gas cost
Slide 6: Delivering…Another Adjusted PBT Increase
Delivering…Another Adjusted PBT Increase 12 months to March 2011 2010 £m £m FY Adjusted PBT, £m Adjusted Profit Before Tax 1,310.1 1,290.1 Fair value re-measurements (IAS 39) (1) 1,423.3 399.8 1,400 +1.6% Exceptional Items (2) (625.0) - 1,290.1 1,310.1 Tax on JCEs and Associates 3.3 (51.3) 1,050 Rep
Slide 7: Delivering…Another Operating Profit Increase
Delivering…Another Operating Profit Increase 12 months to March 2011 2010 Change 2011 Adjusted Operating Profit £m £m % Energy Networks 642.3 599.5 7.1% Generation and Supply 882.8 896.0 -1.5% Other Energy and Utility Gas Storage 23.7 41.8 -43.3% Services Gas Production 4.6 N/A 8% C, US & M 88.5 80.
Slide 8: Delivering…Major Projects for Dividend Growth (1)
Delivering…Major Projects for Dividend Growth (1) 2010/2011 2011/2012 2012/2013 Estimated Spend to Final Mar-2011* Sep-2010 Mar-2011 Sep-2011 Mar-2012 Sep-2012 Mar-2013 Output* £290m 1,000 GWh Cl d Clyde ms > £100m m On- shore £90m 400 GWh Wind Griffin £67m Gordonbush 230 GWh Wind farm Off- £167m**
Slide 9: Delivering…Major Projects for Dividend Growth (2)
Delivering…Major Projects for Dividend Growth (2) Aldbrough Beauly-Denny ¾ JV with Statoil (UK) Ltd., SSE ¾ Consent to install a 400,000 share 66.6%; volt overhead electricity ¾ Total capacity will be transmission line; c.350mcm in 9 caverns; ¾ Initial funding of £58.8m, ¾ 6 caverns and 170mcm now t
Slide 10: Delivering…Major Projects For Dividend Growth (3)
Delivering…Major Projects For Dividend Growth (3) 9 We believe that the issues at Greater Gabbard can be resolved in a way that allows the wind farm to be completed as planned in 2012; 9 Material progress at the other major projects, and at Glendoe as well; 9 We have invested £1.5bn (incl. OFTO) in
Slide 11: Delivering…Major Projects For Dividend Growth (4)
Delivering…Major Projects For Dividend Growth (4) 9 In support of our investment programme, we operate a large capital project governance framework Jim Smith David Gardner Colin Nicol Ian Funnell Rhys Stanwix Director of Director of Director of Large Director of Director of Offshore Onshore Capital
Slide 12: Delivering…Major Projects For Dividend Growth (5)
Delivering…Major Projects For Dividend Growth (5) FY Capex Split, £m 9 Investment* and capital expenditure in the range of £1.5-£1.7bn in each of the four years 1,700 to March 2015; 9 2011/12 capex is expected to be at the top of 1,500 the range due to phasing; 1,300 9 Around one third of the potent
Slide 13: Delivering…Diverse Options for Investment
Delivering…Diverse Options for Investment 9 Companies with a commitment to the long-term, like SSE, must be disciplined when managing their balance sheets and cautious in financing their activities; and 9 We believe we’ve got enough financial flexibility to pursue the best opportunities to increase
Slide 14: Delivering…Good Financial Management (1)
Delivering…Good Financial Management (1) FY 2011 FY 2010 Interest Cover** £m £m Cash from operating activities 2,108.8 2,175.3 8 Movement in outstanding liquid funds (80.6) (169.0) 7 7.3 Capital expenditure acquisitions and 6 (1,728.0) (1,381.6) 6.3 investments 5 Dividends paid (513 7) (513.7) (618
Slide 15: Delivering…Good Financial Management (2)
Delivering…Good Financial Management (2) Credit Ratings consistent with securing funding at a reasonable cost Ratings Moody’s A3 Stable; S&P A- Stable Scrip reduced cash dividend by £146m Financial Successful launch of hybrid capital securities in September 2010 Management Issue comprised
Slide 16: Delivering…Good Financial Management (3)
Delivering…Good Financial Management (3) 2002 2003 2008 2010 2011 2015 ACQUISITIONS-LED GROWTH………………………………………….…………...INVESTMENT-LED GROWTH 9 Focused on cost control, credit management and funding;
Slide 17: Delivering…A Long-Term Approach for Dividend Growth
Delivering…A Long-Term Approach for Dividend Growth 9 Returns: Receiving - and reinvesting - dividends is by far the biggest source of an investor’s return over the long term; 9 Income: Dividends provide income for investors who do not wish to reinvest them; 9 Accountability: Clear dividend targets
Slide 18: Delivering…Certainty in an Uncertain World
Delivering…Certainty in an Uncertain World Since our half-year results in November: UK government has published its Electricity Market Reform consultation and announced details of Carbon Price Support; Political unrest has broken out in the fuel-rich Middle East;; Events at Fukushima have chan
Slide 19: Delivering…In Energy Networks (1)
Delivering…In Energy Networks (1) Networks really matter… Energy Networks RAV, £bn 5.36 4.94 9 Give SSE a financial backbone and 5 2.15 operational focus; 4 1.97 9 Are central to our commitment to 3 sustained real annual dividend growth; 2 2.97 3.21 9 Provide us with significant investment 1 opportu
Slide 20: Delivering…In Energy Networks (2)
Delivering…In Energy Networks (2) Performance in Distribution SGN Operational Performance 9 Capability and efficiency to deliver a post- 97.9% 97% 97.2% 97% tax real return in excess of 5% between now and 2015; 9 SSE is i still till among the th top t performing f i distribution companies on core me
Slide 21: Delivering…A Constructive Approach to the Retail Market Review
Delivering…A Constructive Approach to the Retail Market Review Ofgem’s Ofgem s Retail Market Review SSE’s SSE s Response Efficient firms to make profit: 9 An important point which often gets overlooked; Various responses to 2008 Probe 9 Positive response to Probe remedies; remedies: Retail Pri
Slide 22: Delivering…Change in Energy Supply
Delivering…Change in Energy Supply Customer Accounts Smart Products and Services 9 Reached 500,000 customers in Ireland in May 2011 9 Shifted from straightforward retailing to a and have built scale and brand identity wide range of smarter products and 0.41 0.42 services; 0.19 0.49 9 The Renewable H
Slide 23: Delivering…A Workable Package from EMR
Delivering…A Workable Package from EMR Timetable Key y Elements Consultation – December 2010/ March Carbon Price Support 2010 Capacity Mechanism Budgget – Appril 2011 White Paper – Summer 2011 Low Carbon support Energy Bill – ‘Aspiration’ for Second Emissions Performance standard Ses
Slide 24: Delivering…On Key Principles in Generation
Delivering…On Key Principles in Generation SSE Principles Capacity to meet electricity needs of our customers 9 Capacity of over 11 GW Diversity to avoid over-dependence on any fuel or technology 9 40/40/20 split between gas, coal and renewables Availability to respond to customer demand and m
Slide 25: Delivering…An Upstream Gas Business
Delivering…An Upstream Gas Business Gas Production Gas Volume, m therms 9 Completed the acquisition from Hess Limited of North Sea natural gas and infrastructure assets for the total cash consideration of £197 2m; £197.2m; up to 9 Subject to the success and phasing of 300 200 development fields, pea
Slide 26: Delivering…Dividend Growth for the Long Term (1)
Delivering…Dividend Growth for the Long Term (1) Foundations for Dividend Growth Renewable OTHER NETWORKS SUPPLY GENERATION BUSINESSES >£5bn >10m >3GW Prospective Bacton (unrisked) 0.91 3.21 9.16 2.45 2.15 ECA FY 2011 FY 2011 FY 2011 Gas Electricity GB Energy - m Other - m In Construction / With Con
Slide 27: Delivering…Dividend Growth for the Long Term (2)
Delivering…Dividend Growth for the Long Term (2) DPS +7.1% p 80 75 70 70 60 50 40 30 20 10 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9 Committed to increase the full-year divided di id d per share h b by att least l t 2% more than Retail Price Index (RPI) inflation in each o