Investment case

SSE’S INVESTMENT CASE
  • UK-listed energy group focused on regulated electricity networks and renewables sources of electricity
  • Strategy to create value in the transition to net zero through developing, operating and owning green infrastructure
  • Commitment to remunerate shareholders' investment through dividends, with annual DPS targets set to 2023
  • Strategy underpinned by strong environmental, social and governance focus

STRATEGIC FOCUS ON REGULATED NETWORKS AND RENEWABLES

EXECUTING OUR STRATEGY

Developing, operating, owning

applying world-class skills and experience to the low-carbon infrastructure needed now and in the future

Creating value for shareholders and society,

earning profit from successful development, operation and responsible ownership of low-carbon assets; while delivering inclusive services, contributing to inclusive economic growth and sustainable jobs

Delivering in a sustainable way

being purpose-led, adopting four fundamental business goals aligned to the UN’s SDGs

OPPORTUNITIES THROUGH THE LOW CARBON TRANSITION

UK is the first major economy to legislate for ‘net zero’ emissions

  • New ambitious target of 78% reduction by 2035 announced by UK government in sixth carbon budget
  • Achieving UK’s net zero ambitions will require extensive electrification of heat and transport
  • Maximising renewable energy sources key to achieving targets
  • Central enabling role for electricity networks in building smart, flexible local, energy grids

SIGNIFICANT INVESTMENT OPPORTUNITIES IN THE FIVE YEARS TO FY25

£7.5bn capex plan across the five years to 2025*

Transmission

  • Business Plan includes £2.8bn Totex across the RIIO-T2 price control (FY21 – FY26)
  • Could take RAV from £3.6bn to over £5bn by FY26
  • Additional projects could increase Totex to £4bn and RAV to £6bn*

Distribution

  • FY23 - FY28 Business Plan due to be submitted July 2021

*subject to generator commitment and Ofgem approval

Offshore

  • Construction well under way at Seagreen (1,075MW, SSE share 49%) and Dogger Bank A&B (2,400MW, SSE Share 40%)
  • Final Investment Decision expected on Dogger Bank C by end of CY2021

Onshore

  • Construction of 443MW Viking Wind Farm commenced on island of Shetland (SSE share 100%)

FINANCIAL STRENGTH

Net debt/EBITDA range

  • Maintain net debt/EBITDA ratio at the lower end of a 4.5 to 5 times range from FY22-25
  • Metric for FY21 reported as 4.6x

Credit rating

  • S&P BBB+ (stable)
  • Moody's Baa1 (negative)

Sharpening focus on core business

Completed/Agreed £1.5bn headline consideration

  • Walney Offshore Wind Farm
  • MapleCo Meter Asset Provider
  • Multifuel Energy
  • Gas Production Assets

To be initiated mid-Summer 2021

  • Scotia Gas Networks

Largest issuer of green bonds in FTSE 100

  • SSEN Transmission issued £500m green bond

At 31 March 2021

  • £1.5bn undrawn committed facilities
  • £1.6bn cash and cash equivalents

REMUNERATING SHAREHOLDERS IN 2020/21 AND BEYOND

Download our Investment Case factsheet here.

SSE Investment Case Factsheet